SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For quarter ended MARCH 29, 1997
Commission file number 1-9273
PILGRIM'S PRIDE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 75-1285071
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
110 SOUTH TEXAS, PITTSBURG, TX 75686-0093
(Address of principal executive offices) (Zip code)
(903) 855-1000
(Telephone number of principle executive offices)
NOT APPLICABLE
Former name, former address and former fiscal year, if changed since last
report.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter periods
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practical date.
COMMON STOCK $.01 PAR VALUE--- 27,589,250 SHARES AS OF MAY 7, 1997
INDEX
PILGRIM'S PRIDE CORPORATION AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
Item 1: Financial Statements (Unaudited):
Condensed consolidated balance sheets:
March 29, 1997 and September 28, 1996
Consolidated statements of income (loss):
Three months and six months ended March 29, 1997 and March 30, 1996
Consolidated statements of cash flows:
Six months ended March 29, 1997 and March 30, 1997
Notes to condensed consolidated financial statements--March 29, 1997
Item 2: Management's Discussion and Analysis of Financial Condition
and Results of Operations.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
PART I. FINANCIAL INFORMATION
PILGRIM'S PRIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ITEM 1: FINANCIAL STATEMENTS :
March 29, September 28,
1997 1996
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 7,717 $ 18,040
Trade accounts and other receivables,
less allowance for doubtful accounts 69,256 65,887
Inventories 137,926 136,866
Deferred income taxes 7,001 6,801
Prepaid expenses 744 907
Other current assets 211 757
Total Current Assets 222,855 229,258
Other Assets 21,801 18,827
Property, Plant and Equipment 474,699 466,672
Less accumulated depreciation 187,776 178,035
286,923 288,637
$ 531,579 $ 536,722
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable to banks $ 24,000 $ 27,000
Accounts payable 57,789 71,354
Accrued expenses 32,895 33,599
Current maturities of long-term debt 9,645 8,850
Total Current Liabilities 124,329 140,803
Long-Term Debt, less current maturities 193,546 198,334
Deferred Income Taxes 55,496 53,608
Minority Interest in Subsidiary 842 842
Stockholders' Equity:
Common stock; $.01 par value 276 276
Additional paid-in capital 79,763 79,763
Retained earnings 77,327 63,096
Total Stockholders' Equity 157,366 143,135
$ 531,579 $ 536,722
See notes to condensed consolidated financial statements.
PILGRIM'S PRIDE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
MARCH 29, 1997 MARCH 30, 1996 MARCH 29, 1997 MARCH 30, 1996
(in thousands, except share and per share data)
Net Sales $303,401 $272,004 $601,207 $539,479
Costs and Expenses:
Cost of sales 280,316 255,957 547,855 502,460
Selling, general and
administrative
13,425 12,363 27,378 24,510
293,741 268,320 575,233 526,970
Operating income
9,660 3,684 25,974 12,509
Other Expense (Income):
Interest expense,
net 5,284 5,210 10,733 10,331
Foreign exchange
loss (gain) 99 (94) 536 1,222
Miscellaneous,
net (397) (329) (2,906) (577)
4,986 4,787 8,363 10,976
Income (loss) before income taxes
and extraordinary
charge 4,674 (1,103) 17,611 1,533
Income tax (benefit)
expense (280) (548) 2,552 2,792
Net income (loss) before extraordinary
charge 4,954 (555) 15,059 (1,259)
Extraordinary charge-early repayment of debt,
net of tax - (2,780) - (2,780)
Net income
(loss) $ 4,954 $ (3,335) $ 15,059 $ (4,039)
Net income (loss) per common share
before extraordinary
charge $ .18 $ (.02) $ .55 $ (.05)
Extraordinary charge per common
share - (.10) - (.10)
Net income (loss)
per common
share $ .18 $ (.12) $ .55 $ (.15)
Dividends
per common
share $ .015 $ .015 $ .03 $ .03
Weighted average shares
outstanding
27,589,250 27,589,250 27,589,250 27,589,250
See Notes to condensed consolidated financial statements.
PILGRIM'S PRIDE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
SIX MONTHS ENDED
MARCH 29, 1997 MARCH 30, 1996
Cash Flows From Operating Activities: (In thousands)
Net income (loss) $ 15,059 $ (4,039)
Adjustments to reconcile net income (loss) to cash
provided by operating activities:
Depreciation and amortization 14,229 14,639
(Gain) loss on property disposals 46 (221)
Provision for doubtful accounts (779) 206
Deferred income taxes 1,689 (3,214)
Extraordinary charge - 4,587
Changes in operating assets and liabilities:
Accounts and other receivable (5,783) (5,242)
Inventories (1,061) (18,845)
Prepaid expenses 703 (1,828)
Accounts payable and accrued expenses (14, 269) 3,475
Other (162) (186)
Cash Flows Provided By (Used In)
Operating Activities 9,672 (10,668)
Investing Activities:
Acquisitions of property, plant and equipment (12,162) (23,937)
Proceeds from property disposals 330 1,314
Other, net (258) 36
Net Cash Used In Investing Activities (12,090) (22,262)
Financing Activities:
Proceeds from notes payable to banks 31,500 56,500
Re-payments of notes payable to banks (34,500) (43,500)
Proceeds from long-term debt - 50,028
Payments on long-term debt (4,068) (29,001)
Extraordinary charge, cash items - (3,920)
Cash dividends paid (828) (828)
Cash (Used In) Provided By Financing Activities (7,896) 29,279
Effect of exchange
rate changes on cash and cash equivalents (9) (13)
(Decrease) Increase in cash and
cash equivalents (10,323) (3,664)
Cash and cash equivalents at beginning of year 18,040 11,892
Cash and cash equivalents at end of period $ 7,717 $ 8,228
Supplemental disclosure information:
Cash paid during the period for
Interest (net of amount capitalized) $ 10,961 $ 9,530
Income Taxes $ 1,807 $ 4,014
See notes to condensed consolidated financial statements.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been
included. Operating results for the period ended March 29, 1997 are not
necessarily indicative of the results that may be expected for the year
ended September 27, 1997. For further information, refer to the
consolidated financial statements and footnotes thereto included in
Pilgrim's annual report on Form 10-K for the year ended September 28,
1996.
The consolidated financial statements include the accounts of Pilgrim's
and its wholly and majority owned subsidiaries. Significant intercompany
accounts and transactions have been eliminated.
The assets and liabilities of the foreign subsidiaries are translated at
end-of-period exchange rates, except for and non-monetary assets which
are translated at equivalent dollar costs at dates of acquisition using
historical rates. Operations of foreign subsidiaries are translated at
average exchange rates in effect during the period.
NOTE B--NET INCOME PER COMMON SHARE
Earnings per share for the periods ended March 29, 1997 and March 30,
1996 are based on the weighted average shares outstanding for the
periods.
NOTE C--INVENTORIES
Inventories consist of the following:MARCH 29, 1997 SEPTEMBER 28, 1996
(in thousands)
Live chickens and hens $ 64,632 $ 66,248
Feed, eggs and other 38,208 39,804
Finished chicken products 35,086 30,814
$ 137,926 $ 136,866
NOTE D-SUBSEQUENT EVENTS
On April 15, 1997 the Company secured an additional $35 million in
secured term borrowing capacity from an existing lender at rates of 2.0%
over LIBOR, with monthly principal and interest payments, maturing on
February 28, 2006. As of May 9, 1997 $20 million has been borrowed on
such facility, with the additional $15 million remaining available until
April 1, 1999.
ITEM 2:MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following table presents certain items as a percentage of net sales
for the periods indicated.
Percentage of Net Sales Percentage of Net Sales
THREE MONTHS ENDED SIX MONTHS ENDED
MARCH 29, 1997 MARCH 30, 1996 MARCH 29,1997 MARCH 30, 1996
Net sales 100.0% 100.0% 100.0% 100.0%
Costs and expenses:
Cost of sales 92.4% 94.1% 91.1% 93.1%
Gross profit 7.6% 5.9% 8.9% 6.9%
Selling, general and
administrative 4.4% 4.5% 4.6% 4.5%
Operating income 3.2% 1.4% 4.3% 2.3%
Interest expense 1.7% 1.9% 1.8% 1.9%
Income (loss) before
income taxes and
extraordinary charge 1.5% (.4%) 2.9% .3%
Extraordinary charge-early
repayment of debt,
net of tax - (1.0%) - .5%
Net Income (loss) 1.6% (1.2%) 2.5% (.7%)
SECOND QUARTER 1997, COMPARED TO SECOND QUARTER 1996
Consolidated net sales were $303.4 million for the second quarter of
fiscal 1997, an increase of $31.4 million, or 11.5%, over the second
quarter of fiscal 1996. The increase in consolidated net sales resulted
from a $23.9 million increase in domestic chicken sales to $204.1
million, a $4.9 million increase in Mexican chicken sales to $61.2
million and a $2.6 million increase of sales of other domestic products
to $38.1 million. The increase in domestic chicken sales was primarily
due to a 8.9% increase in dressed pounds produced and a 4.0% increase in
total revenue per dressed pound produced. The increase in Mexican chicken
sales was primarily due to a 8.6% increase in total revenue per dressed
pound. The increase in sales of other domestic products was primarily
the result of increased sales of the Company=s poultry by-products group.
Increased revenues per dressed pound produced both domestically and in
Mexico were primarily the result of higher sales prices as well as
generally improved economic conditions in Mexico compared to the prior
year.
Consolidated cost of sales was $280.3 million in the second quarter of
fiscal 1997, an increase of $24.4 million, or 9.5%, over the second
quarter of fiscal 1996. The increase primarily resulted from a $24.1
million increase in cost of sales of domestic operations, and a $.3
million increase in the cost of sales in Mexican operations.
The cost of sales increase in domestic operations of $24.1 million was
due to a 8.9% increase in dressed pounds produced and increased
production of higher cost and margin products in prepared foods offset by
lower feed ingredient cost experienced in the period compared to the
prior year.
Cost of sales in the Mexican operations stayed relatively stable
increasing only $.3 million.
Gross profit as a percentage of sales increased to 7.6% in the second
quarter of fiscal 1997 from 5.9% in the second quarter of fiscal 1996.
The increased gross profit resulted mainly from higher sales prices as
mentioned above and significantly higher margins in Mexico.
Consolidated selling, general and administrative expenses were $13.4
million in the second quarter of fiscal 1997, and $12.4 million in fiscal
1996. Consolidated selling, general and administrative expenses as a
percentage of sales decreased slightly in the second quarter of fiscal
1997 to 4.4% compared to 4.5% in the second quarter of fiscal 1996 due to
higher net sales and the effect of economies of scale.
Consolidated operating income was $9.7 million for the second quarter of
fiscal 1997, an increase of $6.0 million when compared to the second
quarter of fiscal 1996, resulting primarily from higher margins
experienced in the Mexican operations.
Consolidated net interest expense was $5.3 million in the second quarter
of fiscal 1997, an increase of $.07 million, or 1.4%, when compared to
the second quarter of fiscal 1996. This increase was due to slightly
higher interest rates offset by lower outstanding debt levels when
compared to the second quarter of fiscal 1996.
Consolidated income tax benefit in the second quarter of fiscal 1997 was
$.3 million compared to benefit of $.5 million in the second quarter of
fiscal 1996.
SIX MONTHS ENDED MARCH 29, 1997, COMPARED TO
SIX MONTHS ENDED MARCH 30, 1996
Consolidated net sales were $601.2 million for the first six months of
fiscal 1997, an increase of $61.7 million, or 11.4%, over the first six
months of fiscal 1996. The increase in consolidated net sales resulted
from a $35.1 million increase in domestic chicken sales to $397.3
million, a $18.9 million increase in Mexican chicken sales to $127.4
million and a $7.7 million increase of sales of other domestic products
to $76.5 million. The increase in domestic chicken sales was primarily
due to a 7.5% increase in dressed pounds produced and a 2.1% increase in
total revenue per dressed pound produced. The increase in Mexican chicken
sales was primarily due to a 28.3% increase in total revenue per dressed
pound offset slightly by a 8.5% decrease in dressed pounds produced.
The increase in sales of other domestic products was primarily the result
of increased sales of the Company=s poultry by-products group and higher
average prices for commercial eggs for the period. Increased revenues
per dressed pound produced both domestically and in Mexico were primarily
the result of higher sales prices as well as generally improved economic
conditions in Mexico compared to the prior year.
Consolidated cost of sales was $547.9 million in the first six months of
fiscal 1997, an increase of $45.4 million, or 9.0%, over the first six
months of fiscal 1996. The increase primarily resulted from a $41.5
million increase in cost of sales of domestic operations, and a $3.9
million increase in the cost of sales in Mexican operations.
The cost of sales increase in domestic operations of $41.5 million was
due to a 7.5% increase in dressed pounds produced and increased
production of higher cost and margin products in prepared foods offset
partially by lower feed ingredient costs experienced during the period.
The $3.9 million cost of sales increase in Mexican operations was
primarily due to a 13.3% increase in average costs of sales per pound
offset partially by an 8.5% decrease in dressed pounds produced. The
increase in average costs of sales per pound was primarily the result of
increased production of higher value and cost products.
Gross profit as a percentage of sales increased to 8.9% in the first six
months of fiscal 1997 from 6.9% in the first six months of fiscal 1996.
The increased gross profit resulted mainly from higher sales prices as
mentioned above and significantly higher margins in Mexico.
Consolidated selling, general and administrative expenses were $27.4
million in the first six months of fiscal 1997, and $24.5 million in
fiscal 1996. Consolidated selling, general and administrative expenses
as a percentage of sales increased slightly in the first six months of
fiscal 1997 to 4.6% compared to 4.5% in the first six months of fiscal
1996.
Consolidated operating income was $26.0 million for the first six months
of fiscal 1997, an increase of $13.5 million when compared to the first
six months of fiscal 1996, resulting primarily from higher margins
experienced in the Mexican operations.
Consolidated net interest expense was $10.7 million in the first six
months of fiscal 1997, an increase of $.4 million, or 3.9%, when compared
to the first six months of fiscal 1996. This increase was due to
slightly higher interest rates and higher average outstanding debt
amounts when compared to the first six months of fiscal 1996.
Consolidated miscellaneous, net a component of AOther Expense (Income)@
was $2.9 million in the first six months of fiscal 1997, includes a $2.2
million final settlement of claims resulting from the January 8, 1992
fire at the Company's prepared foods plant in Mt. Pleasant, Texas.
Consolidated income tax expense in the first six months of fiscal 1997
decreased to $2.5 million compared to expense of $2.8 million in the
first six months of fiscal 1996. The lower consolidated income tax
expense in contrast to higher consolidated income, resulted from
increased Mexican earnings which are not currently subject to income
taxes.
LIQUIDITY AND CAPITAL RESOURCES
Strong profits improved liquidity and financial ratios in the fiscal
first six months of 1997. The Company's working capital increased to
$98.5 million at March 29, 1997 compared to $88.5 million at September
28, 1996, the current ratio at March 29, 1997 improved to 1.79 to 1
compared to 1.63 to 1 at September 28, 1996 and the Company's
stockholder=s equity increased to $157.4 million from $143.1 million at
September 28, 1996. Total debt to capitalization decreased to 59.1% at
March 29, 1997 compared to 62.1% at September 28, 1996. The Company
maintains $110 million in revolving credit facilities with available
unused lines of credit of $72 million at May 8, 1997.
Trade accounts and other receivables were $69.3 million at March 29,
1997, a $3.4 million increase from September 28, 1996. The 5.1% increase
was due primarily to increased consolidated sales. Allowances for
doubtful accounts, as a percentage of trade accounts and notes receivable
were 4.6% at March 29, 1997 compared to 5.7% at September 28, 1996.
Inventories were $137.9 million at March 29, 1997, a increase of $1.1
million from September 28, 1996, due primarily to higher finished poultry
products inventories offset partially by the reduction of feed costs in
inventories.
Accounts payable were $57.8 million at March 29, 1997, a 19.0% decrease
from September 28, 1996, due primarily to the reduction in cost of feed
ingredients.
Capital expenditures for the six months ended March 29, 1997 were $12.2
million and were primarily incurred to expand production capacities
domestically, improve efficiencies, reduce costs and for the routine
replacement of equipment. The Company anticipates that it will spend
approximately $55 million for capital expenditures in fiscal year 1997
and expects to finance such expenditures with available operating cash
flows and long-term financing. On April 15, 1997 the Company completed
its acquisition of certain chicken producing assets of Green Acre Foods,
Inc., an integrated chicken producer located in the Nacogdoches area of
East Texas. The additional production from the acquired facilities will
help fulfill additional demand from the Company's prepared foods
customers.
On April 15, 1997 the Company secured an additional $35 million in
secured term borrowing capacity from an existing lender at rates of 2.0%
over LIBOR, with monthly principal and interest payments, maturing on
February 28, 2006. As of May 9, 1997 $20 million has been borrowed on
such facility, with the additional $15 million remaining available until
April 1, 1999.
PART II
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
3.3 Amended and Restated Corporate Bylaws of Pilgrim's Pride
Corporation, a Delaware Corporation, effective December 4, 1996.
4.9 Amended and Restated Corporate Bylaws of Pilgrim's Pride
Corporation, a Delaware Corporation, effective December 4, 1996.
10.46 Note Purchase Agreement dated April 14, 1997 by and between John
Hancock MutualLife Insurance Company and Signature 1A (Cayman), Ltd. and
Pilgrim's Pride
Corporation, a Delaware Corporation.
10.47 Agreement between Pilgrim's Pride Corporation and Certain
Shareholders dated November
28, 1996.
10.48 Aircraft Lease Extension Agreement between B.P. Leasing Co., (L. A.
Pilgrim,
Individually) and Pilgrim's Pride Corporation, (formerly Pilgrim
Industries, Inc.) effective November 15, 1992.
10.49 Broiler Grower Contract dated May 6, 1997 between Pilgrim's Pride
Corporation and Lonnie "Bo" Pilgrim (Farm 30).
10.50 Commercial Egg Grower Contract dated May 7, 1997 between Pilgrim's
Pride Corporation and Pilgrim Poultry, G. P.
10.51 Agreement dated October 15, 1996 between Pilgrim's Pride
Corporation and Pilgrim Poultry, G.P.
10.52 Heavy Breeder Contract dated May 7, 1997 between Pilgrim's Pride
Corporation and Lonnie "Bo" Pilgrim (Farm 44, 45 & 46).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PILGRIM'S PRIDE CORPORATION
Date MAY 7, 1997 Richard A. Cogdill
Executive Vice President and
Chief Financial Officer and
Secretary and Treasurer
in his respective capacity as such
5
1,000
6-MOS
SEP-27-1997
MAR-29-1997
7,717
0
69,256
0
137,926
222,855
474,699
187,776
531,579
124,329
193,546
276
0
0
157,090
531,579
601,207
601,207
547,855
575,233
8,363
(779)
10,733
17,611
2,552
15,059
0
0
0
15,059
.55
.55
AMENDED AND RESTATED
CORPORATE BYLAWS
OF
PILGRIM'S PRIDE CORPORATION
(A DELAWARE CORPORATION)
* * * * *
TABLE OF CONTENTS
AMENDED AND RESTATED
CORPORATE BYLAWS OF
PILGRIM'S PRIDE CORPORATION
(a Delaware corporation)
SECTION SUBJECT MATTER PAGE
ARTICLE : NAME AND OFFICES
. Name ................................................1
. Registered Office and Agent..........................1
() Registered Office...............................1
() Registered Agent................................1
() Change of Registered Office or Agent............1
. Other Offices........................................2
ARTICLE : STOCKHOLDERS
. Place of Meetings....................................2
. Annual Meetings......................................2
. Special Meetings.....................................2
. Notice ..............................................2
. Voting List..........................................3
. Quorum 4
. Requisite Vote.......................................4
. Withdrawal of Quorum.................................5
. Voting at Meetings...................................5
() Voting Power....................................5
() Exercise of Voting Power; Proxies...............5
() Election of Directors...........................5
. Record Date..........................................6
. Action Without Meetings..............................6
. Record Date for Action Without Meeting...............7
. Preemptive Rights....................................8
ARTICLE : DIRECTORS
. Management Powers....................................8
. Number and Qualification.............................9
. Election and Term....................................9
. Voting on Directors..................................9
. Vacancies and New Directorships......................9
. Removal 10
. Meetings 10
() Place...........................................10
() Annual Meeting..................................11
() Regular Meetings................................11
() Special Meetings................................11
() Notice and Waiver of Notice.....................11
() Quorum..........................................11
() Requisite Vote..................................11
. Action Without Meetings..............................12
. Committees...........................................12
() Designation and Appointment.....................12
() Members; Alternate Members; Term................12
() Authority.......................................12
() Records.........................................12
() Change in Number................................12
() Vacancies.......................................13
() Removal.........................................13
() Meetings........................................13
() Quorum; Requisite Vote..........................13
() Compensation....................................13
() Action Without Meetings.........................13
() Responsibility..................................13
. Compensation.........................................13
. Maintenance of Records...............................14
. Interested Directors and Officers....................14
ARTICLE : NOTICES
. Method of Notice.....................................15
. Waiver 15
ARTICLE : OFFICERS AND AGENTS
. Designation..........................................16
. Election of Officers.................................16
. Qualifications.......................................16
. Term of Office.......................................16
. Authority 17
. Removal 17
. Vacancies 17
. Compensation.........................................17
. Chairman of the Board................................17
. Vice Chairman........................................18
. Chief Executive Officer..............................18
. Executive President..................................19
. Chief Operating Officer..............................19
. President 19
. Vice Presidents......................................20
. Secretary 20
. Assistant Secretaries................................21
. Treasurer 21
. Assistant Treasurers.................................22
ARTICLE : INDEMNIFICATION
. Mandatory Indemnification............................22
. Determination of Indemnification.....................23
. Advance of Expenses..................................24
. Permissive Indemnification...........................25
. Nature of Indemnification............................25
. Insurance 25
. Notice 27
ARTICLE : STOCK CERTIFICATES AND
TRANSFER REGULATIONS
. Description of Certificates..........................27
. Entitlement to Certificates..........................28
. Signatures...........................................28
. Issuance of Certificates.............................28
. Payment for Shares...................................29
() Consideration...................................29
() Valuation.......................................29
() Effect..........................................29
() Allocation of Consideration.....................29
. Subscriptions........................................29
. Record Date..........................................29
. Registered Owners....................................30
. Lost, Stolen or Destroyed Certificates...............31
() Proof of Loss...................................31
() Timely Request..................................31
() Bond............................................31
() Other Requirements..............................31
. Registration of Transfers............................31
() Endorsement.....................................31
() Guaranty and Effectiveness of Signature.........32
() Adverse Claim...................................32
() Collection of Taxes.............................32
() Additional Requirements Satisfied...............32
. Restrictions on Transfers and Legends
on Certificates......................................32
() Shares in Classes or Series.....................32
() Restriction on Transfer.........................32
() Unregistered Securities.........................33
ARTICLE : GENERAL PROVISIONS
. Dividends 33
() Declaration and Payment.........................34
() Record Date.....................................34
. Reserves 34
. Books and Records....................................34
. Annual Statement.....................................35
. Contracts and Negotiable Instruments.................35
. Fiscal Year..........................................35
. Corporate Seal.......................................36
. Resignations.........................................36
. Amendment of Bylaws..................................36
. Construction.........................................36
. Telephone Meetings...................................36
. Table of Contents; Captions..........................37
AMENDED AND RESTATED
CORPORATE BYLAWS
OF
PILGRIM'S PRIDE CORPORATION
(a Delaware Corporation)
ARTICLE
NAME AND OFFICES
. NAME. The name of the Corporation is PILGRIM'S PRIDE
CORPORATION, hereinafter referred to as the "Corporation."
. REGISTERED OFFICE AND AGENT. The Corporation shall establish,
designate and continuously maintain a registered office and agent in the
State of Delaware, subject to the following provisions:
() REGISTERED OFFICE. The Corporation shall establish and
continuously maintain in the State of Delaware a registered office
which may be, but need not be, the same as its place of business.
() REGISTERED AGENT. The Corporation shall designate and
continuously maintain in the State of Delaware a registered agent,
which agent may be either an individual resident of the State of
Delaware whose business office is identical with such registered
office, or a domestic corporation or a foreign corporation
authorized to transact business in the State of Delaware, having a
business office identical with such registered office.
() CHANGE OF REGISTERED OFFICE OR AGENT. The Corporation may
change its registered office or change its registered agent, or
both, upon the filing in the Office of the Secretary of State of
Delaware of a statement setting forth the facts required by law, and
executed for the Corporation by its Executive President, President,
a Vice President or other duly authorized officer.
. OTHER OFFICES. The Corporation may also have offices at such
other places within and without the State of Delaware as the Board of
Directors may, from time to time, determine the business of the
Corporation may require.
ARTICLE
STOCKHOLDERS
. PLACE OF MEETINGS. Each meeting of the stockholders of the
Corporation is to be held at the principal offices of the Corporation or
at such other place, either within or without the State of Delaware, as
may be specified in the notice of the meeting or in a duly executed
waiver of notice thereof.
. ANNUAL MEETINGS. The annual meeting of the stockholders for
the election of Directors and for the transaction of such other business
as may properly come before the meeting shall be held within one hundred
twenty (120) days after the close of the fiscal year of the Corporation
on a day during such period to be selected by the Board of Directors;
provided, however, that the failure to hold the annual meeting within the
designated period of time or on the designated date shall not work a
forfeiture or dissolution of the Corporation.
. SPECIAL MEETINGS. Special meetings of the stockholders, for
any purpose or purposes, may be called by the Board of Directors,
Chairman of the Board, Chief Executive Officer, Executive President or
President. The notice of a special meeting shall state the purpose or
purposes of the proposed meeting and the business to be transacted at any
such special meeting of stockholders, and shall be limited to the
purposes stated in the notice therefor.
. NOTICE. Written or printed notice of the meeting stating the
place, day and hour of the meeting, and in the case of a special meeting,
the purpose or purposes for which the meeting is called, shall be
delivered not less than ten (10) nor more than sixty (60) days before the
date of the meeting, either personally or by mail, by or at the direction
of the Board of Directors, Chairman of the Board, Chief Executive
Officer, Executive President, President, or Secretary, to each
stockholder of record entitled to vote at such meeting as determined in
accordance with the provisions of Section 2.10 hereof. If mailed, such
notice shall be deemed to be delivered when deposited in the United
States Mail, with postage thereon prepaid, addressed to the stockholder
entitled thereto at his address as it appears on the stock transfer books
of the Corporation.
. VOTING LIST. The officer or agent having charge and custody of
the stock transfer books of the Corporation, shall prepare, at least ten
(10) days before each meeting of stockholders, a complete list of the
stockholders entitled to vote at such meeting, arranged in alphabetical
order and showing the address of each stockholder and the number of
shares having voting privileges registered in the name of each
stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary
business hours for a period of not less than ten (10) days prior to such
meeting either at the principal office of the Corporation or at a place
within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the
place where the meeting is to be held. Such list shall also be produced
and kept open at the time and place of the meeting and shall be subject
to the inspection of any stockholder during the entire time of the
meeting. The original stock ledger or transfer book, or a duplicate
thereof, shall be prima facie evidence as to identity of the stockholders
entitled to examine such list or stock ledger or transfer book and to
vote at any such meeting of the stockholders. The failure to comply with
the requirements of this Section shall not affect the validity of any
action taken at said meeting.
. QUORUM. The holders of a majority of the shares of the capital
stock issued and outstanding and entitled to vote thereat, represented in
person or by proxy, shall be requisite and shall constitute a quorum at
all meetings of the stockholders for the transaction of business except
as otherwise provided by statute, the Certificate of Incorporation or
these Bylaws. If, however, such quorum shall not be present or
represented at any such meeting of the stockholders, the stockholders
entitled to vote thereat, present in person, or represented by proxy,
shall have the power to adjourn the meeting, from time to time, without
notice other than announcement at the meeting, until a quorum shall be
present or represented. At such reconvened meeting at which a quorum
shall be present or represented, any business may be transacted which
might have been transacted at the meeting as originally notified. If the
adjournment is for more than thirty (30) days, or if after the
adjournment a new record date is fixed for the reconvened meeting, a
notice of said meeting shall be given to each stockholder entitled to
vote at said meeting.
. REQUISITE VOTE. If a quorum is present at any meeting, the
vote of the holders of a majority of the outstanding shares of capital
stock having voting power, present in person or represented by proxy,
shall determine any question brought before such meeting, unless the
question is one upon which, by express provision of the Certificate of
Incorporation or of these Bylaws, a different vote shall be required, in
which case such express provision shall govern and control the
determination of such question.
. WITHDRAWAL OF QUORUM. If a quorum is present at the time of
commencement of any meeting, the stockholders present at such duly
convened meeting may continue to transact any business which may properly
come before said meeting until adjournment thereof, notwithstanding the
withdrawal from such meeting of sufficient holders of the shares of
capital stock entitled to vote thereat to leave less than a quorum
remaining.
. VOTING AT MEETING. Voting at meetings of stockholders shall be
conducted and exercised subject to the following procedures and
regulations:
() VOTING POWER. In the exercise of voting power with
respect to each matter properly submitted to a vote at any meeting
of stockholders, each holder of the capital stock of the Corporation
having voting power shall be entitled to one (1) vote for each such
share held in his name on the books of the Corporation, except to
the extent otherwise specified by the Certificate of Incorporation
or Certificate of Designations pertaining to a series of preferred
stock.
() EXERCISE OF VOTING POWER; PROXIES. Each stockholder
entitled to vote at a meeting or to express consent or dissent to
corporate action in writing without a meeting may vote either in
person or authorize another person or persons to act for him by
proxy duly appointed by instrument in writing subscribed by such
stockholder or by his duly authorized attorney-in-fact; provided,
however, no such appointment of proxy shall be valid, voted or acted
upon after the expiration of three (3) years from the date of
execution of such written instrument of appointment, unless
otherwise stated therein. A proxy shall be revocable unless
expressly designated therein as irrevocable and coupled with an
interest. Proxies coupled with an interest include the appointment
as proxy of: (a) a pledgee; (b) a person who purchased or agreed to
purchase or owns or holds an option to purchase the shares voted;
(c) a creditor of the Corporation who extended its credit under
terms requiring the appointment; (d) an employee of the Corporation
whose employment contract requires the appointment; or (e) a party
to a voting agreement created under Section 218 of the General
Corporation Law of Delaware, as amended. Each proxy shall be filed
with the Secretary of the Corporation prior to or at the time of the
meeting. Any vote may be taken by voice vote or by show of hands
unless someone entitled to vote at the meeting objects, in which
case written ballots shall be used.
() ELECTION OF DIRECTORS. In all elections of Directors
cumulative voting shall be prohibited.
. RECORD DATE. As more specifically provided in Article 7,
Section 7.7 hereof, the Board of Directors may fix in advance a record
date for the purpose of determining stockholders entitled to notice of or
to vote at a meeting of stockholders, which record date shall not precede
the date upon which the resolution fixing the record date is adopted by
the Board of Directors, and which record date shall not be less than ten
(10) nor more than sixty (60) days prior to such meeting. In the absence
of any action by the Board of Directors fixing the record date, the
record date for determining stockholders entitled to notice of or to vote
at a meeting of stockholders shall be at the close of business on the day
before the day on which notice of the meeting is given, or, if notice is
waived, at the close of business on the day before the meeting is held.
. ACTION WITHOUT MEETINGS. Any action permitted or required to
be taken at a meeting of the stockholders of the Corporation may be taken
without a meeting, without prior notice, and without a vote, if a consent
or consents in writing, setting forth the action so taken, shall be
signed by the holder or holders of the outstanding stock having not less
than the minimum number of votes that would be necessary to authorize or
take such action at a meeting at which all shares entitled to vote
thereon were present and voted, and such written consent shall have the
same force and effect as the requisite vote of the stockholders thereon.
Any such executed written consent, or an executed counterpart thereof,
shall be placed in the minute book of the Corporation. Every written
consent shall bear the date of signature of each stockholder who signs
the consent. No written consent shall be effective to take the action
that is the subject of the consent unless, within sixty (60) days after
the date of the earliest dated consent delivered to the Corporation in
the manner required under Section 2.12 hereof, a consent or consents
signed by the holders of the minimum number of shares of the capital
stock issued and outstanding and entitled to vote on and approve the
action that is the subject of the consent are delivered to the
Corporation. Prompt notice of the taking of any action by stockholders
without a meeting by less than unanimous written consent shall be given
to those stockholders who did not consent in writing to the action.
. RECORD DATE FOR ACTION WITHOUT MEETINGS. Unless a record date
shall have previously been fixed or determined by the Board of Directors
as provided in Section 2.10 hereof, whenever action by stockholders is
proposed to be taken by consent in writing without a meeting of
stockholders, the Board of Directors may fix a record date for the
purpose of determining stockholders entitled to consent to that action,
which record date shall not precede, and shall not be more than ten (10)
days after, the date upon which the resolution fixing the record date is
adopted by the Board of Directors. If no record date has been fixed by
the Board of Directors and the prior action of the Board of Directors is
not required by statute or the Certificate of Incorporation, the record
date for determining stockholders entitled to consent to corporate action
in writing without a meeting shall be the first date on which a signed
written consent setting forth the action taken or proposed to be taken is
delivered to the Corporation by delivery to its registered office, its
principal place of business, or an officer or agent of the Corporation
having custody of the books in which proceedings of meetings of
stockholders are recorded. Delivery shall be by hand or by certified or
registered mail, return receipt requested. Delivery to the Corporation's
principal place of business shall be addressed to the Executive President
or principal executive officer of the Corporation. If no record date
shall have been fixed by the Board of Directors and prior action of the
Board of Directors is required by statute, the record date for
determining stockholders entitled to consent to corporate action in
writing without a meeting shall be at the close of business on the day on
which the Board of Directors adopts a resolution taking such prior
action.
. PREEMPTIVE RIGHTS. No holder of shares of capital stock of the
Corporation shall, as such holder, have any right to purchase or
subscribe for any capital stock of any class which the Corporation may
issue or sell, whether or not exchangeable for any capital stock of the
Corporation of any class or classes, whether issued out of unissued
shares authorized by the Certificate of Incorporation, as amended, or out
of shares of capital stock of the Corporation acquired by it after the
issue thereof; nor shall any holder of shares of capital stock of the
Corporation, as such holder, have any right to purchase, acquire or
subscribe for any securities which the Corporation may issue or sell
whether or not convertible into or exchangeable for shares of capital
stock of the Corporation of any class or classes, and whether or not any
such securities have attached or appurtenant thereto warrants, options or
other instruments which entitle the holders thereof to purchase, acquire
or subscribe for shares of capital stock of any class or classes.
ARTICLE
DIRECTORS
. MANAGEMENT POWERS. The powers of the Corporation shall be
exercised by or under the authority of, and the business and affairs of
the Corporation shall be managed under the direction of, its Board of
Directors which may exercise all such powers of the Corporation and do
all such lawful acts and things as are not by statute, the Certificate of
Incorporation or these Bylaws directed or required to be exercised or
done by the stockholders.
. NUMBER AND QUALIFICATION. The Board of Directors shall consist
of not less than one (1) member. The number of Directors shall initially
be fixed by the incorporator and thereafter from time to time by the
Board of Directors. Directors need not be residents of the State of
Delaware nor stockholders of the Corporation. Each Director shall
qualify as a Director following election as such by agreeing to act or
acting in such capacity. The number of Directors shall be fixed, and may
be increased or decreased, from time to time by resolution of the Board
of Directors without the necessity of a written amendment to the Bylaws
of the Corporation; provided, however, no decrease shall have the effect
of shortening the term of any incumbent Director.
. ELECTION AND TERM. Members of the Board of Directors shall
hold office until the annual meeting of the stockholders of the
Corporation and until their successors shall have been elected and
qualified. At the annual meeting of stockholders, the stockholders
entitled to vote in an election of Directors shall elect Directors to
hold office until the next succeeding annual meeting of the stockholders.
Each Director shall hold office for the term for which he is elected, and
until his successor shall be elected and qualified or until his death,
resignation or removal, if earlier.
. VOTING ON DIRECTORS. Directors shall be elected by the vote of
the holders of a plurality of the shares entitled to vote in the election
of Directors and represented in person or by proxy at a meeting of
stockholders at which a quorum is present. Cumulative voting in the
election of Directors is expressly prohibited.
. VACANCIES AND NEW DIRECTORSHIPS. Vacancies and newly created
directorships resulting from any increase in the authorized number of
Directors elected by all the stockholders having the right to vote as a
single class may be filled by the affirmative vote of a majority of the
Directors then in office, although less than a quorum, or by a sole
remaining Director, or by the requisite vote of the stockholders at an
annual meeting of the stockholders or at a special meeting of the
stockholders called for that purpose, and the Directors so elected shall
hold office until their successors are elected and qualified. If the
holders of any class or classes of stock or series of stock of the
Corporation are entitled to elect one or more Directors by the
Certificate of Incorporation or Certificate of Designations applicable to
such class or series, vacancies and newly created directorships of such
class or classes or series may be filled by a majority of the Directors
elected by such class or classes or series thereof then in office, or by
a sole remaining Director so elected, and the Directors so elected shall
hold office until the next election of the class for which such Directors
shall have been chosen, and until their successors shall be elected and
qualified. For purposes of these Bylaws, a "vacancy" shall be defined as
an unfilled directorship arising by virtue of the death, resignation or
removal of a Director theretofore duly elected to serve in such capacity
in accordance with the relevant provisions of these Bylaws.
. REMOVAL. Any Director may be removed either for or without
cause at any duly convened special or annual meeting of stockholders, by
the affirmative vote of a majority in number of shares of the
stockholders present in person or by proxy at any meeting and entitled to
vote for the election of such Director, provided notice of intention to
act upon such matter shall have been given in the notice calling such
meeting.
. MEETINGS. The meetings of the Board of Directors shall be held
and conducted subject to the following regulations:
() PLACE. Meetings of the Board of Directors of the
Corporation, annual, regular or special, are to be held at the
principal office or place of business of the Corporation, or such
other place, either within or without the State of Delaware, as may
be specified in the respective notices, or waivers of notice,
thereof.
() ANNUAL MEETING. The Board of Directors shall meet each
year immediately after the annual meeting of the stockholders, at
the place where such meeting of the stockholders has been held
(either within or without the State of Delaware), for the purpose of
organization, election of officers, and consideration of any other
business that may properly be brought before the meeting. No notice
of any kind to either old or new members of the Board of Directors
for such annual meeting shall be required.
() REGULAR MEETINGS. Regular meetings of the Board of
Directors may be held without notice at such time and at such place
or places as shall from time to time be determined and designated by
the Board.
() SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by the Chairman of the Board, Chief
Executive Officer, Executive President or President of the
Corporation on notice of two (2) days to each Director either
personally or by mail or by telegram, telex or facsimile
transmission and delivery. Special meetings of the Board of
Directors shall be called by the Chairman of the Board, Executive
President or Secretary in like manner and on like notice on the
written request of two (2) Directors.
() NOTICE AND WAIVER OF NOTICE. Attendance of a Director at
any meeting shall constitute a waiver of notice of such meeting,
except where a Director attends for the express purpose of objecting
to the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be transacted
at, nor the purpose of, any regular meeting of the Board of
Directors need be specified in the notice or waiver of notice of
such meeting.
() QUORUM. At all meetings of the Board of Directors, a
majority of the number of Directors shall constitute a quorum for
the transaction of business, unless a greater number is required by
law or by the Certificate of Incorporation. If a quorum shall not
be present at any meeting of Directors, the Directors present
thereat may adjourn the meeting, from time to time, without notice
other than announcement at the meeting, until a quorum shall be
present.
() REQUISITE VOTE. The act of a majority of the Directors
present at any meeting at which a quorum is present shall be the act
of the Board of Directors unless the act of a greater number is
required by statute, the Certificate of Incorporation or these
Bylaws.
. ACTION WITHOUT MEETINGS. Unless otherwise restricted by the
Certificate of Incorporation or these Bylaws, any action required or
permitted by law to be taken at any meeting of the Board of Directors, or
any committee thereof, may be taken without a meeting, if prior to such
action a written consent thereto is signed by all members of the Board or
of such committee, as the case may be, and such written consent is filed
in the minutes or proceedings of the Board of Directors or committee.
. COMMITTEES. Committees designated and appointed by the Board
of Directors shall function subject to and in accordance with the
following regulations and procedures:
() DESIGNATION AND APPOINTMENT. The Board of Directors may,
by resolution adopted by a majority of the entire Board, designate
and appoint one or more committees under such name or names and for
such purpose or function as may be deemed appropriate.
() MEMBERS; ALTERNATE MEMBERS; TERMS. Each committee thus
designated and appointed shall consist of one or more of the
Directors of the Corporation, one of whom, in the case of the
Executive Committee, shall be the Chief Executive Officer of the
Company. The Board of Directors may designate one or more of its
members as alternate members of any committee, who may, subject to
any limitations imposed by the entire Board, replace absent or
disqualified members at any meeting of that committee. The members
or alternate members of any such committee shall serve at the
pleasure of and subject to the discretion of the Board of Directors.
() AUTHORITY. Each committee, to the extent provided in the
resolution of the Board creating same, shall have and may exercise
such of the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation as the
Board of Directors may direct and delegate, except, however, those
matters which are required by statute to be reserved unto or acted
upon by the entire Board of Directors.
() RECORDS. Each such committee shall keep and maintain
regular records or minutes of its meetings and report the same to
the Board of Directors when required.
() CHANGE IN NUMBER. The number of members or alternate
members of any committee appointed by the Board of Directors, as
herein provided, may be increased or decreased (but not below two)
from time to time by appropriate resolution adopted by a majority of
the entire Board of Directors.
() VACANCIES. Vacancies in the membership of any committee
designated and appointed hereunder shall be filled by the Board of
Directors, at a regular or special meeting of the Board of
Directors, in a manner consistent with the provisions of this
Section 3.9.
() REMOVAL. Any member or alternate member of any committee
appointed hereunder may be removed by the Board of Directors by the
affirmative vote of a majority of the entire Board, whenever in its
judgment the best interests of the Corporation will be served
thereby.
() MEETINGS. The time, place and notice (if any) of
committee meetings shall be determined by the members of such
committee.
() QUORUM; REQUISITE VOTE. At meetings of any committee
appointed hereunder, a majority of the number of members designated
by the Board of Directors shall constitute a quorum for the
transaction of business. The act of a majority of the members and
alternate members of the committee present at any meeting at which a
quorum is present shall be the act of such committee, except as
otherwise specifically provided by statute, the Certificate of
Incorporation or these Bylaws. If a quorum is not present at a
meeting of such committee, the members of such committee present may
adjourn the meeting from time to time, without notice other than an
announcement at the meeting, until a quorum is present.
() COMPENSATION. Appropriate compensation for members and
alternate members of any committee appointed pursuant to the
authority hereof may be authorized by the action of a majority of
the entire Board of Directors pursuant to the provisions of Section
3.10 hereof.
() ACTION WITHOUT MEETINGS. Any action required or permitted
to be taken at a meeting of any committee may be taken without a
meeting if a consent in writing, setting forth the action so taken,
is signed by all members of such committee. Such consent shall have
the same force and effect as a unanimous vote at a meeting. The
signed consent, or a signed copy, shall become a part of the record
of such committee.
() RESPONSIBILITY. Notwithstanding any provision to the
contrary herein, the designation and appointment of a committee and
the delegation of authority to it shall not operate to relieve the
Board of Directors, or any member thereof, of any responsibility
imposed upon it or him by law.
. COMPENSATION. By appropriate resolution of the Board of
Directors, the Directors may be reimbursed their expenses, if any, of
attendance at each meeting of the Board of Directors and may be paid a
fixed sum (as determined from time to time by the vote of a majority of
the Directors then in office) for attendance at each meeting of the Board
of Directors or a stated salary as Director, or both. No such payment
shall preclude any Director from serving the Corporation in another
capacity and receiving compensation therefor. Members of special or
standing committees may, by appropriate resolution of the Board of
Directors, be allowed similar reimbursement of expenses and compensation
for attending committee meetings.
. MAINTENANCE OF RECORDS. The Directors may keep the books and
records of the Corporation, except such as are required by law to be kept
within the State, outside the State of Delaware or at such place or
places as they may, from time to time, determine.
. INTERESTED DIRECTORS AND OFFICERS. No contract or other
transaction between the Corporation and one or more of its Directors or
officers, or between the Corporation and any firm of which one or more of
its Directors or officers are members or employees, or in which they are
interested, or between the Corporation and any corporation or association
of which one or more of its Directors or officers are stockholders,
members, directors, officers, or employees, or in which they are
interested, shall be void or voidable solely for this reason, or solely
because of the presence of such Director or Directors or officer or
officers at the meeting of the Board of Directors of the Corporation,
which acts upon, or in reference to, such contract, or transaction, if
(a) the material facts of such relationship or interest shall be
disclosed or known to the Board of Directors and the Board of Directors
shall, nevertheless in good faith, authorize, approve and ratify such
contract or transaction by a vote of a majority of the Directors present,
such interested Director or Directors to be counted in determining
whether a quorum is present, but not to be counted in calculating the
majority of such quorum necessary to carry such vote; (b) the material
facts of such relationship or interest as to the contract or transaction
are disclosed or are known to the stockholders entitled to vote thereon,
and the contract or transaction is specifically approved in good faith by
the vote of the stockholders; or (c) the contract or transaction is fair
to the Corporation as of the time it is authorized, approved or ratified
by the Board of Directors, a committee thereof or the stockholders. The
provisions of this Section shall not be construed to invalidate any
contract or other transaction which would otherwise be valid under the
common and statutory law applicable thereto.
ARTICLE
NOTICES
. METHOD OF NOTICE. Whenever under the provisions of the General
Corporation Law of Delaware or of the Certificate of Incorporation or of
these Bylaws, notice is required to be given to any Director or
stockholder, it shall not be construed to mean personal notice, but such
notice may be given in writing and delivered personally, through the
United States mail, by a recognized delivery service (such as Federal
Express) or by means of telegram, telex or facsimile transmission,
addressed to such Director or stockholder, at his address or telex or
facsimile transmission number, as the case may be, as it appears on the
records of the Corporation, with postage and fees thereon prepaid. Such
notice shall be deemed to be given at the time when the same shall be
deposited in the United States Mail or with an express delivery service
or when transmitted by telex or facsimile transmission or personally
delivered, as the case may be.
. WAIVER. Whenever any notice whatever is required to be given
under the provisions of the General Corporation Law of Delaware or under
the provisions of the Certificate of Incorporation or these Bylaws, a
waiver thereof in writing signed by the person or persons entitled to
such notice, whether before or after the time stated therein, shall be
deemed equivalent to the giving of such notice. Attendance by such
person or persons, whether in person or by proxy, at any meeting
requiring notice shall constitute a waiver of notice of such meeting,
except where such person attends the meeting for the express purpose of
objecting to the transaction of any business because the meeting is not
lawfully called or convened.
ARTICLE
OFFICERS AND AGENTS
. DESIGNATION. The officers of the Corporation shall be chosen
by the Board of Directors and shall consist of the offices of:
() Chairman of the Board, Chief Executive Officer, Executive
President, President, Vice President, Treasurer and Secretary; and
() Such other offices and officers (including one or more
additional Vice Presidents) and assistant officers and agents as the
Board of Directors shall deem necessary.
. ELECTION OF OFFICERS. Each officer designated in Section
5.1(a) hereof shall be elected by the Board of Directors on the
expiration of the term of office of such officer, as herein provided, or
whenever a vacancy exists in such office. Each officer or agent
designated in Section 5.1(b) above may be elected by the Board of
Directors at any meeting.
. QUALIFICATIONS. No officer or agent need be a stockholder of
the Corporation or a resident of Delaware. No officer or agent is
required to be a Director, except the Chairman of the Board. Any two or
more offices may be held by the same person.
. TERM OF OFFICE. Unless otherwise specified by the Board of
Directors at the time of election or appointment, or by the express
provisions of an employment contract approved by the Board, the term of
office of each officer and each agent shall expire on the date of the
first meeting of the Board of Directors next following the annual meeting
of stockholders each year. Each such officer or agent, unless elected or
appointed to an additional term, shall serve until the expiration of the
term of his office or, if earlier, his death, resignation or removal.
. AUTHORITY. Officers and agents shall have such authority and
perform such duties in the management of the Corporation as are provided
in these Bylaws or as may be determined by resolution of the Board of
Directors not inconsistent with these Bylaws.
. REMOVAL. Any officer or agent elected or appointed by the
Board of Directors may be removed with or without cause by the Board of
Directors whenever in its judgment the best interests of the Corporation
will be served thereby. Such removal shall be without prejudice to the
contract rights, if any, of the person so removed. Election or
appointment of an officer or agent shall not of itself create contract
rights.
. VACANCIES. Any vacancy occurring in any office of the
Corporation (by death, resignation, removal or otherwise) shall be filled
by the Board of Directors.
. COMPENSATION. The compensation of all officers and agents of
the Corporation shall be fixed from time to time by the Board of
Directors.
. CHAIRMAN OF THE BOARD. The Chairman of the Board shall be
chosen from among the Directors. The Chairman of the Board shall have
the power to call special meetings of the stockholders and of the
Directors for any purpose or purposes, and he shall preside at all
meetings of the Board of Directors, unless he shall be absent or unless
he shall, at his election, designate the Vice Chairman, if one is
elected, to preside in his stead. The Chairman of the Board shall advise
and counsel the Chief Executive Officer and other officers of the
Corporation and shall exercise such powers and perform such duties as
shall be assigned to or required by him from time to time by the Board of
Directors.
. VICE CHAIRMAN. The Vice Chairman, if one is elected, shall
have the power to call special meetings of the stockholders and of the
Directors for any purpose or purposes, and, in the absence of the
Chairman of the Board, the Vice Chairman shall preside at all meetings of
the Board of Directors unless he shall be absent. The Vice Chairman
shall advise and counsel the other officers of the Corporation and shall
exercise such powers and perform such duties as shall be assigned to or
required of him from time to time by the Board of Directors.
. CHIEF EXECUTIVE OFFICER. Subject to the supervision of the
Board of Directors, the Chief Executive Officer shall have general
supervision, management, direction and control of the business and
affairs of the Corporation and shall see that all orders and resolutions
of the Board of Directors are carried into effect. The Chief Executive
Officer shall execute bonds, mortgages and other contracts requiring a
seal, under the seal of the Corporation, except where required or
permitted by law to be otherwise executed and except where the execution
thereof shall be expressly delegated by the Board of Directors to some
other officer or agent of the Corporation. The Chief Executive Officer
shall preside at all meetings of the stockholders and, in the absence of
the Chairman of the Board and the Vice Chairman, at all meetings of the
Board of Directors. The Chief Executive Officer shall be ex officio a
member of the Executive Committee, if any, of the Board of Directors.
The Chief Executive Officer shall have the general powers and duties of
management usually vested in the office of chief executive officer of a
corporation and shall perform such other duties and possess such other
authority and powers as the Board of Directors may from time to time
prescribe.
. EXECUTIVE PRESIDENT. In the absence or disability of the Chief
Executive Officer, the Executive President shall perform all of the
duties of the Chief Executive Officer and when so acting shall have all
the powers and be subject to all the restrictions upon the Chief
Executive Officer, including the power to sign all instruments and to
take all actions which the Chief Executive Officer is authorized to
perform by the Board of Directors or the Bylaws. The Executive President
shall have the general powers and duties usually vested in the office of
president of a corporation and shall perform such other duties and
possess such other authority and powers as the Board of Directors may
from time to time prescribe or as the Chief Executive Officer may from
time to time delegate. In the event no individual is elected to the
office of Chief Operating Officer, the Executive President shall have the
powers and perform the duties of the Chief Operating Officer.
. CHIEF OPERATING OFFICER. Subject to the supervision of the
Executive President, the Chief Operating Officer, if one is elected,
shall have general supervision of the day to day operations of the
Corporation. The Chief Operating Officer shall be ex officio a member of
the Executive Committee, if any, of the Board of Directors. The Chief
Operating Officer shall have the general powers and duties of management
usually vested in the office of chief operating officer of a corporation
and shall perform such other duties and possess such other authority and
powers as the Board of Directors may from time to time prescribe.
. PRESIDENT. In the absence or disability of the Executive
President, the President shall perform all of the duties of the Executive
President and when so acting shall have all the powers and be subject to
all the restrictions upon the Executive President, including the power to
sign all instruments and to take all actions which the Executive
President is authorized to perform by the Board of Directors or the
Bylaws. The President shall have the general powers and duties vested in
the office of President as the Board of Directors may from time to time
prescribe or as the Chief Executive Officer may from time to time
delegate.
. VICE PRESIDENTS. The Vice President, or if there shall be more
than one, the Vice Presidents in the order determined by the requisite
vote of the Board of Directors, shall, in the prolonged absence or
disability of the President, perform the duties and exercise the powers
of the President and shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe or as
the Chief Executive Officer may from time to time delegate. The Board of
Directors may designate one or more Vice Presidents as Executive Vice
Presidents or Senior Vice Presidents.
. SECRETARY. The Secretary shall attend all meetings of the
Board of Directors and all meetings of the stockholders of the
Corporation and record all proceedings of the meetings of the Corporation
and of the Board of Directors in a book to be maintained for that purpose
and shall perform like duties for the standing committees when required.
The Secretary shall give, or cause to be given, notice of all meetings of
the stockholders and special meetings of the Board of Directors, and
shall perform such other duties as may be prescribed by the Board of
Directors, Chairman of the Board, Chief Executive Officer, Executive
President or President. The Secretary shall have custody of the
corporate seal of the Corporation, and he, or an Assistant Secretary,
shall have authority to affix the same to any instrument requiring it and
when so affixed, it may be attested by his signature or by the signature
of such Assistant Secretary. The Board of Directors may give general
authority to any other officer to affix the seal of the Corporation and
to attest the affixing by his signature.
. ASSISTANT SECRETARIES. The Assistant Secretary, or if there be
more than one, the Assistant Secretaries in the order determined by the
Board of Directors, shall in the absence or disability of the Secretary,
perform the duties and exercise the powers of the Secretary and shall
perform such other duties and have such other powers as the Board of
Directors may from time to time prescribe or as the Chief Executive
Officer may from time to time delegate.
. TREASURER. The Treasurer shall be the chief financial officer
of the Corporation and shall have the custody of the corporate funds and
securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and shall deposit all
moneys and other valuable effects in the name and to the credit of the
Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as
may be ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the Chief Executive Officer (and
Chairman of the Board, if one is elected) and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an
account of all his transactions as Treasurer and of the financial
condition of the Corporation. If required by the Board of Directors, the
Treasurer shall give the Corporation a bond in such sum and with such
surety or sureties as shall be satisfactory to the Board of Directors for
the faithful performance of the duties of his office and for the
restoration to the Corporation, in case of his death, resignation,
retirement or removal from office, of all books, papers, vouchers, money,
and other property of whatever kind in his possession or under his
control owned by the Corporation. The Treasurer shall perform such other
duties and have such other authority and powers as the Board of Directors
may from time to time prescribe or as the Chief Executive Officer may
from time to time delegate.
. ASSISTANT TREASURERS. The Assistant Treasurer, or, if there
shall be more than one, the Assistant Treasurers in the order determined
by the Board of Directors, shall, in the absence or disability of the
Treasurer, perform the duties and exercise the powers of the Treasurer
and shall perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe or as the Chief
Executive Officer may from time to time delegate.
ARTICLE
INDEMNIFICATION
. MANDATORY INDEMNIFICATION. Each person who was or is made a
party or is threatened to be made a party, or who was or is a witness
without being named a party, to any threatened, pending or completed
action, claim, suit or proceeding, whether civil, criminal,
administrative or investigative, any appeal in such an action, suit or
proceeding, and any inquiry or investigation that could lead to such an
action, suit or proceeding (a "Proceeding"), by reason of the fact that
such individual is or was a Director or officer of the Corporation, or
while a Director or officer of the Corporation is or was serving at the
request of the Corporation as a director, officer, partner, venturer,
proprietor, trustee, employee, agent or similar functionary of another
corporation, partnership, trust, employee benefit plan or other
enterprise, shall be indemnified and held harmless by the Corporation
from and against any judgments, penalties (including excise taxes),
fines, amounts paid in settlement and reasonable expenses (including
court costs and attorneys' fees) actually incurred by such person in
connection with such Proceeding if it is determined that he acted in good
faith and reasonably believed (i) in the case of conduct in his official
capacity on behalf of the Corporation that his conduct was in the
Corporation's best interests, (ii) in all other cases, that his conduct
was not opposed to the best interests of the Corporation, and (iii) with
respect to any Proceeding which is a criminal action, that he had no
reasonable cause to believe his conduct was unlawful; provided, however,
that in the event a determination is made that such person is liable to
the Corporation or is found liable on the basis that personal benefit was
improperly received by such person, the indemnification is limited to
reasonable expenses actually incurred by such person in connection with
the Proceeding and shall not be made in respect of any Proceeding in
which such person shall have been found liable for willful or intentional
misconduct in the performance of his duty to the Corporation. The
termination of any Proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of
itself be determinative of whether the person did not act in good faith
and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any
Proceeding which is a criminal action, had reasonable cause to believe
that his conduct was unlawful. A person shall be deemed to have been
found liable in respect of any claim, issue or matter only after the
person shall have been so adjudged by a court of competent jurisdiction
after exhaustion of all appeals therefrom.
. DETERMINATION OF INDEMNIFICATION. Any indemnification under
the foregoing Section 6.1 (unless ordered by a court of competent
jurisdiction) shall be made by the Corporation only upon a determination
that indemnification of such person is proper in the circumstances by
virtue of the fact that it shall have been determined that such person
has met the applicable standard of conduct. Such determination shall be
made (1) by a majority vote of a quorum consisting of Directors who at
the time of the vote are not named defendants or respondents in the
Proceeding; (2) if such quorum cannot be obtained, by a majority vote of
a committee of the Board of Directors, designated to act in the matter by
a majority of all Directors, consisting of two or more Directors who at
the time of the vote are not named defendants or respondents in the
Proceeding; (3) by special legal counsel (in a written opinion) selected
by the Board of Directors or a committee of the Board by a vote as set
forth in Subsection (1) or (2) of this Section, or, if such quorum cannot
be established, by a majority vote of all Directors (in which Directors
who are named defendants or respondents in the Proceeding may
participate); or (4) by the stockholders of the Corporation in a vote
that excludes the shares held by Directors who are named defendants or
respondents in the Proceeding.
. ADVANCE OF EXPENSES. Reasonable expenses, including court
costs and attorneys' fees, incurred by a person who was or is a witness
or who was or is named as a defendant or respondent in a Proceeding, by
reason of the fact that such individual is or was a Director or officer
of the Corporation, or while a Director or officer of the Corporation is
or was serving at the request of the Corporation as a director, officer,
partner, venturer, proprietor, trustee, employee, agent or similar
functionary of another corporation, partnership, trust, employee benefit
plan or other enterprise, shall be paid by the Corporation at reasonable
intervals in advance of the final disposition of such Proceeding, and
without the determination set forth in Section 6.2, upon receipt by the
Corporation of a written affirmation by such person of his good faith
belief that he has met the standard of conduct necessary for
indemnification under this Article 6, and a written undertaking by or on
behalf of such person to repay the amount paid or reimbursed by the
Corporation if it is ultimately determined that he is not entitled to be
indemnified by the Corporation as authorized in this Article 6. Such
written undertaking shall be an unlimited obligation of such person and
it may be accepted without reference to financial ability to make
repayment.
. PERMISSIVE INDEMNIFICATION. The Board of Directors of the
Corporation may authorize the Corporation to indemnify employees or
agents of the Corporation, and to advance the reasonable expenses of such
persons, to the same extent, following the same determinations and upon
the same conditions as are required for the indemnification of and
advancement of expenses to Directors and officers of the Corporation.
. NATURE OF INDEMNIFICATION. The indemnification and advancement
of expenses provided hereunder shall not be deemed exclusive of any other
rights to which those seeking indemnification may be entitled under the
Certificate of Incorporation, these Bylaws, any agreement, vote of
stockholders or disinterested Directors or otherwise, both as to actions
taken in an official capacity and as to actions taken in any other
capacity while holding such office, shall continue as to a person who has
ceased to be a Director, officer, employee or agent of the Corporation
and shall inure to the benefit of the heirs, executors and administrators
of such person.
. INSURANCE. The Corporation shall have the power and authority
to purchase and maintain insurance or another arrangement on behalf of
any person who is or was a Director, officer, employee or agent of the
Corporation, or who is or was serving at the request of the Corporation
as a director, officer, partner, venturer, proprietor, trustee, employee,
agent, or similar functionary of another foreign or domestic corporation,
partnership, joint venture, sole proprietorship, trust, employee benefit
plan or other enterprise, against any liability, claim, damage, loss or
risk asserted against such person and incurred by such person in any such
capacity or arising out of the status of such person as such,
irrespective of whether the Corporation would have the power to indemnify
and hold such person harmless against such liability under the provisions
hereof. If the insurance or other arrangement is with a person or entity
that is not regularly engaged in the business of providing insurance
coverage, the insurance or arrangement may provide for payment of a
liability with respect to which the Corporation would not have the power
to indemnify the person only if including coverage for the additional
liability has been approved by the stockholders of the Corporation.
Without limiting the power of the Corporation to procure or maintain any
kind of insurance or other arrangement, the Corporation may, for the
benefit of persons indemnified by the Corporation, (1) create a trust
fund; (2) establish any form of self-insurance; (3) secure its indemnity
obligation by grant of a security interest or other lien on the assets of
the Corporation; or (4) establish a letter of credit, guaranty, or surety
arrangement. The insurance or other arrangement may be procured,
maintained, or established within the Corporation or with any insurer or
other person deemed appropriate by the Board of Directors regardless of
whether all or part of the stock or other securities of the insurer or
other person are owned in whole or part by the Corporation. In the
absence of fraud, the judgment of the Board of Directors as to the terms
and conditions of the insurance or other arrangement and the identity of
the insurer or other person participating in the arrangement shall be
conclusive and the insurance or arrangement shall not be voidable and
shall not subject the Directors approving the insurance or arrangement to
liability, on any ground, regardless of whether the Directors
participating in the approval is a beneficiary of the insurance or
arrangement.
. NOTICE. Any indemnification or advance of expenses to a
present or former Director or officer of the Corporation in accordance
with this Article 6 shall be reported in writing to the stockholders of
the Corporation with or before the notice or waiver of notice of the next
stockholders' meeting or with or before the next submission of a consent
to action without a meeting and, in any case, within the next twelve
month period immediately following the indemnification or advance.
ARTICLE
STOCK CERTIFICATES AND TRANSFER REGULATIONS
. DESCRIPTION OF CERTIFICATES. The shares of the capital stock
of the Corporation shall be represented by certificates in the form
approved by the Board of Directors and signed in the name of the
Corporation by the Chairman of the Board, Chief Executive Officer,
Executive President, Chief Operating Officer, President or a Vice
President and the Secretary or an Assistant Secretary of the Corporation,
and sealed with the seal of the Corporation or a facsimile thereof. Each
certificate shall state on the face thereof the name of the holder, the
number and class of shares, the par value of shares covered thereby or a
statement that such shares are without par value, and such other matters
as are required by law. At such time as the Corporation may be
authorized to issue shares of more than one class, every certificate
shall set forth upon the face or back of such certificate a statement of
the designations, preferences, limitations and relative rights of the
shares of each class authorized to be issued, as required by the laws of
the State of Delaware, or may state that the Corporation will furnish a
copy of such statement without charge to the holder of such certificate
upon receipt of a written request therefor from such holder.
. ENTITLEMENT TO CERTIFICATES. Every holder of the capital stock
in the Corporation shall be entitled to have a certificate signed in the
name of the Corporation by the Chairman of the Board, Chief Executive
Officer, Executive President, Chief Operating Officer, President or a
Vice President and the Secretary or an Assistant Secretary of the
Corporation, certifying the class of capital stock and the number of
shares represented thereby as owned or held by such stockholder in the
Corporation.
. SIGNATURES. The signatures of the Chairman of the Board, Chief
Executive Officer, Executive President, Chief Operating Officer,
President, Vice President, Secretary or Assistant Secretary upon a
certificate may be facsimiles. In case any officer or officers who have
signed, or whose facsimile signature or signatures have been placed upon
any such certificate or certificates, shall cease to serve as such
officer or officers of the Corporation, whether because of death,
resignation, removal or otherwise, before such certificate or
certificates are issued and delivered by the Corporation, such
certificate or certificates may nevertheless be adopted by the
Corporation and be issued and delivered with the same effect as though
the person or persons who signed such certificate or certificates or
whose facsimile signature or signatures have been used thereon had not
ceased to serve as such officer or officers of the Corporation.
. ISSUANCE OF CERTIFICATES. Certificates evidencing shares of
its capital stock (both treasury and authorized but unissued) may be
issued for such consideration (not less than par value, except for
treasury shares which may be issued for such consideration) and to such
persons as the Board of Directors may determine from time to time.
Shares shall not be issued until the full amount of the consideration,
fixed as provided by law, has been paid.
. PAYMENT FOR SHARES. Consideration for the issuance of shares
shall be paid, valued and allocated as follows:
() CONSIDERATION. The consideration for the issuance of
shares shall consist of money paid, labor done (including services
actually performed for the Corporation), or property (tangible or
intangible) actually received. Neither promissory notes nor the
promise of future services shall constitute payment of consideration
for shares.
() VALUATION. In the absence of fraud in the transaction,
the determination of the Board of Directors as to the value of
consideration received shall be conclusive.
() EFFECT. When consideration, fixed as provided by law, has
been paid, the shares shall be deemed to have been issued and shall
be considered fully paid and nonassessable.
() ALLOCATION OF CONSIDERATION. The consideration received
for shares shall be allocated by the Board of Directors, in
accordance with law, between the stated capital and capital surplus
accounts.
. SUBSCRIPTIONS. Unless otherwise provided in the subscription
agreement, subscriptions of shares, whether made before or after
organization of the Corporation, shall be paid in full in such
installments and at such times as shall be determined by the Board of
Directors. Any call made by the Board of Directors for payment on
subscriptions shall be uniform as to all shares of the same class and
series. In case of default in the payment of any installment or call
when payment is due, the Corporation may proceed to collect the amount
due in the same manner as any debt due to the Corporation.
. RECORD DATE. For the purpose of determining stockholders
entitled to notice of or to vote at any meeting of stockholders, or any
adjournment thereof, or entitled to receive a distribution by the
Corporation (other than a distribution involving a purchase or redemption
by the Corporation of any of its own shares) or a share dividend, or in
order to make a determination of stockholders for any other proper
purpose, the Board of Directors may fix a record date for any such
determination of stockholders, which record date shall not precede the
date upon which the resolution fixing the record date is adopted by the
Board of Directors, and which record date shall not be more than sixty
(60) days, and in the case of a meeting of stockholders, not less than
ten (10) days prior to the date on which the particular action requiring
such determination of stockholders is to be taken. If no record date is
fixed for the determination of stockholders entitled to notice of or to
vote at a meeting of stockholders, or stockholders entitled to receive a
distribution (other than a distribution involving a purchase or
redemption by the Corporation of any of its own shares) or a share
dividend, the date before the date on which notice of the meeting is
mailed or the date on which the resolution of the Board of Directors
declaring such distribution or share dividend is adopted, as the case may
be, shall be the record date for such determination of stockholders.
When a determination of stockholders entitled to vote at any meeting of
stockholders has been made as provided in this Section, such
determination shall be applied to any adjournment thereof.
. REGISTERED OWNERS. Prior to due presentment for registration
of transfer of a certificate evidencing shares of the capital stock of
the Corporation in the manner set forth in Section 7.10 hereof, the
Corporation shall be entitled to recognize the person registered as the
owner of such shares on its books (or the books of its duly appointed
transfer agent, as the case may be) as the person exclusively entitled to
vote, to receive notices and dividends with respect to, and otherwise
exercise all rights and powers relative to such shares; and the
Corporation shall not be bound or otherwise obligated to recognize any
claim, direct or indirect, legal or equitable, to such shares by any
other person, whether or not it shall have actual, express or other
notice thereof, except as otherwise provided by the laws of Delaware.
. LOST, STOLEN OR DESTROYED CERTIFICATES. The Corporation shall
issue a new certificate in place of any certificate for shares previously
issued if the registered owner of the certificate satisfies the following
conditions:
() PROOF OF LOSS. Submits proof in affidavit form
satisfactory to the Corporation that such certificate has been lost,
destroyed or wrongfully taken;
() TIMELY REQUEST. Requests the issuance of a new
certificate before the Corporation has notice that the certificate
has been acquired by a purchaser for value in good faith and without
notice of an adverse claim;
() BOND. Gives a bond in such form, and with such surety or
sureties, with fixed or open penalty, as the Corporation may direct,
to indemnify the Corporation (and its transfer agent and registrar,
if any) against any claim that may be made or otherwise asserted by
virtue of the alleged loss, destruction, or theft of such
certificate or certificates; and
() OTHER REQUIREMENTS. Satisfies any other reasonable
requirements imposed by the Corporation.
In the event a certificate has been lost, apparently destroyed or
wrongfully taken, and the registered owner of record fails to notify the
Corporation within a reasonable time after he has notice of such loss,
destruction, or wrongful taking, and the Corporation registers a transfer
(in the manner hereinbelow set forth) of the shares represented by the
certificate before receiving such notification, such prior registered
owner of record shall be precluded from making any claim against the
Corporation for the transfer required hereunder or for a new certificate.
. REGISTRATION OF TRANSFERS. Subject to the provisions hereof,
the Corporation shall register the transfer of a certificate evidencing
shares of its capital stock presented to it for transfer if:
() ENDORSEMENT. Upon surrender of the certificate to the
Corporation (or its transfer agent, as the case may be) for
transfer, the certificate (or an appended stock power) is properly
endorsed by the registered owner, or by his duly authorized legal
representative or attorney-in-fact, with proper written evidence of
the authority and appointment of such representative, if any,
accompanying the certificate;
() GUARANTY AND EFFECTIVENESS OF SIGNATURE. The signature of
such registered owner or his legal representative or attorney-in-
fact, as the case may be, has been guaranteed by a national banking
association or member of the New York Stock Exchange, and reasonable
assurance in a form satisfactory to the Corporation is given that
such endorsements are genuine and effective;
() ADVERSE CLAIMS. The Corporation has no notice of an
adverse claim or has otherwise discharged any duty to inquire into
such a claim;
() COLLECTION OF TAXES. Any applicable law (local, state or
federal) relating to the collection of taxes relative to the
transaction has been complied with; and
() ADDITIONAL REQUIREMENTS SATISFIED. Such additional
conditions and documentation as the Corporation (or its transfer
agent, as the case may be) shall reasonably require, including
without limitation thereto, the delivery with the surrender of such
stock certificate or certificates of proper evidence of succession,
assignment or other authority to obtain transfer thereof, as the
circumstances may require, and such legal opinions with reference to
the requested transfer as shall be required by the Corporation (or
its transfer agent) pursuant to the provisions of these Bylaws and
applicable law, shall have been satisfied.
. RESTRICTIONS ON TRANSFER AND LEGENDS ON CERTIFICATES.
() SHARES IN CLASSES OR SERIES. If the Corporation is
authorized to issue shares of more than one class, the certificate
shall set forth, either on the face or back of the certificate, a
full or summary statement of all of the designations, preferences,
limitations, and relative rights of the shares of each such class
and, if the Corporation is authorized to issue any preferred or
special class in series, the variations in the relative rights and
preferences of the shares of each such series so far as the same
have been fixed and determined, and the authority of the Board of
Directors to fix and determine the relative rights and preferences
of subsequent series. In lieu of providing such a statement in full
on the certificate, a statement on the face or back of the
certificate may provide that the Corporation will furnish such
information to any stockholder without charge upon written request
to the Corporation at its principal place of business or registered
office and that copies of the information are on file in the office
of the Secretary of State.
() RESTRICTION ON TRANSFER. Any restrictions imposed by the
Corporation on the sale or other disposition of its shares and on
the transfer thereof must be copied at length or in summary form on
the face, or so copied on the back and referred to on the face, of
each certificate representing shares to which the restriction
applies. The certificate may however state on the face or back that
such a restriction exists pursuant to a specified document and that
the Corporation will furnish a copy of the document to the holder of
the certificate without charge upon written request to the
Corporation at its principal place of business.
() UNREGISTERED SECURITIES. Any security of the Corporation,
including, among others, any certificate evidencing shares of the
capital stock of the Corporation or warrants to purchase shares of
capital stock of the Corporation, which is issued to any person
without registration under the Securities Act of 1933, as amended,
or the Blue Sky laws of any state, shall not be transferable until
the Corporation has been furnished with a legal opinion of counsel
with reference thereto, satisfactory in form and content to the
Corporation and its counsel, to the effect that such sale, transfer
or pledge does not involve a violation of the Securities Act of
1933, as amended, or the Blue Sky laws of any state having
jurisdiction. The certificate representing the security shall bear
substantially the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAW BUT HAVE
BEEN ACQUIRED FOR THE PRIVATE INVESTMENT OF THE HOLDER
HEREOF AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED UNTIL
EITHER (i) A REGISTRATION STATEMENT UNDER SUCH SECURITIES
ACT OR SUCH APPLICABLE STATE SECURITIES LAWS SHALL HAVE
BECOME EFFECTIVE WITH REGARD THERETO, OR (ii) THE
CORPORATION SHALL HAVE RECEIVED AN OPINION OF COUNSEL
ACCEPTABLE TO THE CORPORATION AND ITS COUNSEL THAT
REGISTRATION UNDER SUCH SECURITIES ACT OR SUCH APPLICABLE
STATE SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH
SUCH PROPOSED OFFER, SALE OR TRANSFER.
ARTICLE
GENERAL PROVISIONS
. DIVIDENDS. Subject to the provisions of the General
Corporation Law of Delaware, as amended, and the Certificate of
Incorporation, dividends of the Corporation shall be declared and paid
pursuant to the following regulations:
() DECLARATION AND PAYMENT. Dividends on the issued and
outstanding shares of capital stock of the Corporation may be
declared by the Board of Directors at any regular or special meeting
and may be paid in cash, in property, or in shares of capital stock.
Such declaration and payment shall be at the discretion of the Board
of Directors.
() RECORD DATE. The Board of Directors may fix in advance a
record date for the purpose of determining stockholders entitled to
receive payment of any dividend, such record date to be not more
than sixty (60) days prior to the payment date of such dividend, or
the Board of Directors may close the stock transfer books for such
purpose for a period of not more than sixty (60) days prior to the
payment date of such dividend. In the absence of action by the
Board of Directors, the date upon which the Board of Directors adopt
the resolution declaring such dividend shall be the record date.
. RESERVES. There may be created by resolution of the Board of
Directors out of the surplus of the Corporation such reserve or reserves
as the Board of Directors from time to time, in its discretion, think
proper to provide for contingencies, or to repair or maintain any
property of the Corporation, or for such other purposes as the Board of
Directors shall think beneficial to the Corporation, and the Board of
Directors may modify or abolish any such reserve in the manner in which
it was created.
. BOOKS AND RECORDS. The Corporation shall maintain correct and
complete books and records of account and shall prepare and maintain
minutes of the proceedings of its stockholders, its Board of Directors
and each committee of its Board of Directors. The Corporation shall keep
at its registered office or principal place of business, or at the office
of its transfer agent or registrar, a record of original issuance of
shares issued by the Corporation and a record of each transfer of those
shares that have been presented to the Corporation for registration or
transfer. Such records shall contain the names and addresses of all past
and present stockholders and the number and class of the shares issued by
the Corporation held by each.
. ANNUAL STATEMENT. The Board of Directors shall present at or
before each annual meeting of stockholders a full and clear statement of
the business and financial condition of the Corporation, including a
reasonably detailed balance sheet and income statement under current
date.
. CONTRACTS AND NEGOTIABLE INSTRUMENTS. Except as otherwise
provided by law or these Bylaws, any contract or other instrument
relative to the business of the Corporation may be executed and delivered
in the name of the Corporation and on its behalf by the Chairman of the
Board, Chief Executive Officer, Executive President, Chief Operating
Officer or President of the Corporation. The Board of Directors may
authorize any other officer or agent of the Corporation to enter into any
contract or execute and deliver any contract in the name and on behalf of
the Corporation, and such authority may be general or confined to
specific instances as the Board of Directors may determine by resolution.
All bills, notes, checks or other instruments for the payment of money
shall be signed or countersigned by such officer, officers, agent or
agents and in such manner as are permitted by these Bylaws and/or as,
from time to time, may be prescribed by resolution of the Board of
Directors. Unless authorized to do so by these Bylaws or by the Board of
Directors, no officer, agent or employee shall have any power or
authority to bind the Corporation by any contract or engagement, or to
pledge its credit, or to render it liable pecuniarily for any purpose or
to any amount.
. FISCAL YEAR. The fiscal year of the Corporation shall end on
the Saturday closest to September 30.
. CORPORATE SEAL. The Corporation seal shall be in such form as
may be determined by the Board of Directors. The seal may be used by
causing it or a facsimile thereof to be impressed or affixed or in any
manner reproduced.
. RESIGNATIONS. Any Director, officer or agent may resign his
office or position with the Corporation by delivering written notice
thereof to the Chairman of the Board, Chief Executive Officer, Executive
President, Chief Operating Officer, President or Secretary. Such
resignation shall be effective at the time specified therein, or
immediately upon delivery if no time is specified. Unless otherwise
specified therein, an acceptance of such resignation shall not be a
necessary prerequisite of its effectiveness.
. AMENDMENT OF BYLAWS. These Bylaws may be altered, amended, or
repealed and new Bylaws adopted at any meeting of the Board of Directors
or stockholders at which a quorum is present, by the affirmative vote of
a majority of the Directors or stockholders, as the case may be, present
at such meeting, provided notice of the proposed alteration, amendment,
or repeal be contained in the notice of such meeting.
. CONSTRUCTION. Whenever the context so requires herein, the
masculine shall include the feminine and neuter, and the singular shall
include the plural, and conversely. If any portion or provision of these
Bylaws shall be held invalid or inoperative, then, so far as is
reasonable and possible: (1) the remainder of these Bylaws shall be
considered valid and operative, and (2) effect shall be given to the
intent manifested by the portion or provision held invalid or
inoperative.
. TELEPHONE MEETINGS. Stockholders, Directors or members of any
committee may hold any meeting of such stockholders, Directors or
committee by means of conference telephone or similar communications
equipment which permits all persons participating in the meeting to hear
each other and actions taken at such meetings shall have the same force
and effect as if taken at a meeting at which persons were present and
voting in person. The Secretary of the Corporation shall prepare a
memorandum of the action taken at any such telephonic meeting.
. TABLE OF CONTENTS; CAPTIONS. The table of contents and
captions used in these Bylaws have been inserted for administrative
convenience only and do not constitute matter to be construed in
interpretation.
IN DUE CERTIFICATION WHEREOF, the undersigned, being the Secretary
of PILGRIM'S PRIDE CORPORATION, confirms the adoption and approval of the
foregoing Bylaws, effective as of the _______ day of December, 1996.
___________________________________
CLIFFORD E. BUTLER,
Secretary
AMENDED AND RESTATED
CORPORATE BYLAWS
OF
PILGRIM'S PRIDE CORPORATION
(A DELAWARE CORPORATION)
* * * * *
TABLE OF CONTENTS
AMENDED AND RESTATED
CORPORATE BYLAWS OF
PILGRIM'S PRIDE CORPORATION
(a Delaware corporation)
SECTION SUBJECT MATTER PAGE
ARTICLE : NAME AND OFFICES
. Name ................................................1
. Registered Office and Agent..........................1
() Registered Office...............................1
() Registered Agent................................1
() Change of Registered Office or Agent............1
. Other Offices........................................2
ARTICLE : STOCKHOLDERS
. Place of Meetings....................................2
. Annual Meetings......................................2
. Special Meetings.....................................2
. Notice ..............................................2
. Voting List..........................................3
. Quorum 4
. Requisite Vote.......................................4
. Withdrawal of Quorum.................................5
. Voting at Meetings...................................5
() Voting Power....................................5
() Exercise of Voting Power; Proxies...............5
() Election of Directors...........................5
. Record Date..........................................6
. Action Without Meetings..............................6
. Record Date for Action Without Meeting...............7
. Preemptive Rights....................................8
ARTICLE : DIRECTORS
. Management Powers....................................8
. Number and Qualification.............................9
. Election and Term....................................9
. Voting on Directors..................................9
. Vacancies and New Directorships......................9
. Removal 10
. Meetings 10
() Place...........................................10
() Annual Meeting..................................11
() Regular Meetings................................11
() Special Meetings................................11
() Notice and Waiver of Notice.....................11
() Quorum..........................................11
() Requisite Vote..................................11
. Action Without Meetings..............................12
. Committees...........................................12
() Designation and Appointment.....................12
() Members; Alternate Members; Term................12
() Authority.......................................12
() Records.........................................12
() Change in Number................................12
() Vacancies.......................................13
() Removal.........................................13
() Meetings........................................13
() Quorum; Requisite Vote..........................13
() Compensation....................................13
() Action Without Meetings.........................13
() Responsibility..................................13
. Compensation.........................................13
. Maintenance of Records...............................14
. Interested Directors and Officers....................14
ARTICLE : NOTICES
. Method of Notice.....................................15
. Waiver 15
ARTICLE : OFFICERS AND AGENTS
. Designation..........................................16
. Election of Officers.................................16
. Qualifications.......................................16
. Term of Office.......................................16
. Authority 17
. Removal 17
. Vacancies 17
. Compensation.........................................17
. Chairman of the Board................................17
. Vice Chairman........................................18
. Chief Executive Officer..............................18
. Executive President..................................19
. Chief Operating Officer..............................19
. President 19
. Vice Presidents......................................20
. Secretary 20
. Assistant Secretaries................................21
. Treasurer 21
. Assistant Treasurers.................................22
ARTICLE : INDEMNIFICATION
. Mandatory Indemnification............................22
. Determination of Indemnification.....................23
. Advance of Expenses..................................24
. Permissive Indemnification...........................25
. Nature of Indemnification............................25
. Insurance 25
. Notice 27
ARTICLE : STOCK CERTIFICATES AND
TRANSFER REGULATIONS
. Description of Certificates..........................27
. Entitlement to Certificates..........................28
. Signatures...........................................28
. Issuance of Certificates.............................28
. Payment for Shares...................................29
() Consideration...................................29
() Valuation.......................................29
() Effect..........................................29
() Allocation of Consideration.....................29
. Subscriptions........................................29
. Record Date..........................................29
. Registered Owners....................................30
. Lost, Stolen or Destroyed Certificates...............31
() Proof of Loss...................................31
() Timely Request..................................31
() Bond............................................31
() Other Requirements..............................31
. Registration of Transfers............................31
() Endorsement.....................................31
() Guaranty and Effectiveness of Signature.........32
() Adverse Claim...................................32
() Collection of Taxes.............................32
() Additional Requirements Satisfied...............32
. Restrictions on Transfers and Legends
on Certificates......................................32
() Shares in Classes or Series.....................32
() Restriction on Transfer.........................32
() Unregistered Securities.........................33
ARTICLE : GENERAL PROVISIONS
. Dividends 33
() Declaration and Payment.........................34
() Record Date.....................................34
. Reserves 34
. Books and Records....................................34
. Annual Statement.....................................35
. Contracts and Negotiable Instruments.................35
. Fiscal Year..........................................35
. Corporate Seal.......................................36
. Resignations.........................................36
. Amendment of Bylaws..................................36
. Construction.........................................36
. Telephone Meetings...................................36
. Table of Contents; Captions..........................37
AMENDED AND RESTATED
CORPORATE BYLAWS
OF
PILGRIM'S PRIDE CORPORATION
(a Delaware Corporation)
ARTICLE
NAME AND OFFICES
. NAME. The name of the Corporation is PILGRIM'S PRIDE
CORPORATION, hereinafter referred to as the "Corporation."
. REGISTERED OFFICE AND AGENT. The Corporation shall establish,
designate and continuously maintain a registered office and agent in the
State of Delaware, subject to the following provisions:
() REGISTERED OFFICE. The Corporation shall establish and
continuously maintain in the State of Delaware a registered office
which may be, but need not be, the same as its place of business.
() REGISTERED AGENT. The Corporation shall designate and
continuously maintain in the State of Delaware a registered agent,
which agent may be either an individual resident of the State of
Delaware whose business office is identical with such registered
office, or a domestic corporation or a foreign corporation
authorized to transact business in the State of Delaware, having a
business office identical with such registered office.
() CHANGE OF REGISTERED OFFICE OR AGENT. The Corporation may
change its registered office or change its registered agent, or
both, upon the filing in the Office of the Secretary of State of
Delaware of a statement setting forth the facts required by law, and
executed for the Corporation by its Executive President, President,
a Vice President or other duly authorized officer.
. OTHER OFFICES. The Corporation may also have offices at such
other places within and without the State of Delaware as the Board of
Directors may, from time to time, determine the business of the
Corporation may require.
ARTICLE
STOCKHOLDERS
. PLACE OF MEETINGS. Each meeting of the stockholders of the
Corporation is to be held at the principal offices of the Corporation or
at such other place, either within or without the State of Delaware, as
may be specified in the notice of the meeting or in a duly executed
waiver of notice thereof.
. ANNUAL MEETINGS. The annual meeting of the stockholders for
the election of Directors and for the transaction of such other business
as may properly come before the meeting shall be held within one hundred
twenty (120) days after the close of the fiscal year of the Corporation
on a day during such period to be selected by the Board of Directors;
provided, however, that the failure to hold the annual meeting within the
designated period of time or on the designated date shall not work a
forfeiture or dissolution of the Corporation.
. SPECIAL MEETINGS. Special meetings of the stockholders, for
any purpose or purposes, may be called by the Board of Directors,
Chairman of the Board, Chief Executive Officer, Executive President or
President. The notice of a special meeting shall state the purpose or
purposes of the proposed meeting and the business to be transacted at any
such special meeting of stockholders, and shall be limited to the
purposes stated in the notice therefor.
. NOTICE. Written or printed notice of the meeting stating the
place, day and hour of the meeting, and in the case of a special meeting,
the purpose or purposes for which the meeting is called, shall be
delivered not less than ten (10) nor more than sixty (60) days before the
date of the meeting, either personally or by mail, by or at the direction
of the Board of Directors, Chairman of the Board, Chief Executive
Officer, Executive President, President, or Secretary, to each
stockholder of record entitled to vote at such meeting as determined in
accordance with the provisions of Section 2.10 hereof. If mailed, such
notice shall be deemed to be delivered when deposited in the United
States Mail, with postage thereon prepaid, addressed to the stockholder
entitled thereto at his address as it appears on the stock transfer books
of the Corporation.
. VOTING LIST. The officer or agent having charge and custody of
the stock transfer books of the Corporation, shall prepare, at least ten
(10) days before each meeting of stockholders, a complete list of the
stockholders entitled to vote at such meeting, arranged in alphabetical
order and showing the address of each stockholder and the number of
shares having voting privileges registered in the name of each
stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary
business hours for a period of not less than ten (10) days prior to such
meeting either at the principal office of the Corporation or at a place
within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the
place where the meeting is to be held. Such list shall also be produced
and kept open at the time and place of the meeting and shall be subject
to the inspection of any stockholder during the entire time of the
meeting. The original stock ledger or transfer book, or a duplicate
thereof, shall be prima facie evidence as to identity of the stockholders
entitled to examine such list or stock ledger or transfer book and to
vote at any such meeting of the stockholders. The failure to comply with
the requirements of this Section shall not affect the validity of any
action taken at said meeting.
. QUORUM. The holders of a majority of the shares of the capital
stock issued and outstanding and entitled to vote thereat, represented in
person or by proxy, shall be requisite and shall constitute a quorum at
all meetings of the stockholders for the transaction of business except
as otherwise provided by statute, the Certificate of Incorporation or
these Bylaws. If, however, such quorum shall not be present or
represented at any such meeting of the stockholders, the stockholders
entitled to vote thereat, present in person, or represented by proxy,
shall have the power to adjourn the meeting, from time to time, without
notice other than announcement at the meeting, until a quorum shall be
present or represented. At such reconvened meeting at which a quorum
shall be present or represented, any business may be transacted which
might have been transacted at the meeting as originally notified. If the
adjournment is for more than thirty (30) days, or if after the
adjournment a new record date is fixed for the reconvened meeting, a
notice of said meeting shall be given to each stockholder entitled to
vote at said meeting.
. REQUISITE VOTE. If a quorum is present at any meeting, the
vote of the holders of a majority of the outstanding shares of capital
stock having voting power, present in person or represented by proxy,
shall determine any question brought before such meeting, unless the
question is one upon which, by express provision of the Certificate of
Incorporation or of these Bylaws, a different vote shall be required, in
which case such express provision shall govern and control the
determination of such question.
. WITHDRAWAL OF QUORUM. If a quorum is present at the time of
commencement of any meeting, the stockholders present at such duly
convened meeting may continue to transact any business which may properly
come before said meeting until adjournment thereof, notwithstanding the
withdrawal from such meeting of sufficient holders of the shares of
capital stock entitled to vote thereat to leave less than a quorum
remaining.
. VOTING AT MEETING. Voting at meetings of stockholders shall be
conducted and exercised subject to the following procedures and
regulations:
() VOTING POWER. In the exercise of voting power with
respect to each matter properly submitted to a vote at any meeting
of stockholders, each holder of the capital stock of the Corporation
having voting power shall be entitled to one (1) vote for each such
share held in his name on the books of the Corporation, except to
the extent otherwise specified by the Certificate of Incorporation
or Certificate of Designations pertaining to a series of preferred
stock.
() EXERCISE OF VOTING POWER; PROXIES. Each stockholder
entitled to vote at a meeting or to express consent or dissent to
corporate action in writing without a meeting may vote either in
person or authorize another person or persons to act for him by
proxy duly appointed by instrument in writing subscribed by such
stockholder or by his duly authorized attorney-in-fact; provided,
however, no such appointment of proxy shall be valid, voted or acted
upon after the expiration of three (3) years from the date of
execution of such written instrument of appointment, unless
otherwise stated therein. A proxy shall be revocable unless
expressly designated therein as irrevocable and coupled with an
interest. Proxies coupled with an interest include the appointment
as proxy of: (a) a pledgee; (b) a person who purchased or agreed to
purchase or owns or holds an option to purchase the shares voted;
(c) a creditor of the Corporation who extended its credit under
terms requiring the appointment; (d) an employee of the Corporation
whose employment contract requires the appointment; or (e) a party
to a voting agreement created under Section 218 of the General
Corporation Law of Delaware, as amended. Each proxy shall be filed
with the Secretary of the Corporation prior to or at the time of the
meeting. Any vote may be taken by voice vote or by show of hands
unless someone entitled to vote at the meeting objects, in which
case written ballots shall be used.
() ELECTION OF DIRECTORS. In all elections of Directors
cumulative voting shall be prohibited.
. RECORD DATE. As more specifically provided in Article 7,
Section 7.7 hereof, the Board of Directors may fix in advance a record
date for the purpose of determining stockholders entitled to notice of or
to vote at a meeting of stockholders, which record date shall not precede
the date upon which the resolution fixing the record date is adopted by
the Board of Directors, and which record date shall not be less than ten
(10) nor more than sixty (60) days prior to such meeting. In the absence
of any action by the Board of Directors fixing the record date, the
record date for determining stockholders entitled to notice of or to vote
at a meeting of stockholders shall be at the close of business on the day
before the day on which notice of the meeting is given, or, if notice is
waived, at the close of business on the day before the meeting is held.
. ACTION WITHOUT MEETINGS. Any action permitted or required to
be taken at a meeting of the stockholders of the Corporation may be taken
without a meeting, without prior notice, and without a vote, if a consent
or consents in writing, setting forth the action so taken, shall be
signed by the holder or holders of the outstanding stock having not less
than the minimum number of votes that would be necessary to authorize or
take such action at a meeting at which all shares entitled to vote
thereon were present and voted, and such written consent shall have the
same force and effect as the requisite vote of the stockholders thereon.
Any such executed written consent, or an executed counterpart thereof,
shall be placed in the minute book of the Corporation. Every written
consent shall bear the date of signature of each stockholder who signs
the consent. No written consent shall be effective to take the action
that is the subject of the consent unless, within sixty (60) days after
the date of the earliest dated consent delivered to the Corporation in
the manner required under Section 2.12 hereof, a consent or consents
signed by the holders of the minimum number of shares of the capital
stock issued and outstanding and entitled to vote on and approve the
action that is the subject of the consent are delivered to the
Corporation. Prompt notice of the taking of any action by stockholders
without a meeting by less than unanimous written consent shall be given
to those stockholders who did not consent in writing to the action.
. RECORD DATE FOR ACTION WITHOUT MEETINGS. Unless a record date
shall have previously been fixed or determined by the Board of Directors
as provided in Section 2.10 hereof, whenever action by stockholders is
proposed to be taken by consent in writing without a meeting of
stockholders, the Board of Directors may fix a record date for the
purpose of determining stockholders entitled to consent to that action,
which record date shall not precede, and shall not be more than ten (10)
days after, the date upon which the resolution fixing the record date is
adopted by the Board of Directors. If no record date has been fixed by
the Board of Directors and the prior action of the Board of Directors is
not required by statute or the Certificate of Incorporation, the record
date for determining stockholders entitled to consent to corporate action
in writing without a meeting shall be the first date on which a signed
written consent setting forth the action taken or proposed to be taken is
delivered to the Corporation by delivery to its registered office, its
principal place of business, or an officer or agent of the Corporation
having custody of the books in which proceedings of meetings of
stockholders are recorded. Delivery shall be by hand or by certified or
registered mail, return receipt requested. Delivery to the Corporation's
principal place of business shall be addressed to the Executive President
or principal executive officer of the Corporation. If no record date
shall have been fixed by the Board of Directors and prior action of the
Board of Directors is required by statute, the record date for
determining stockholders entitled to consent to corporate action in
writing without a meeting shall be at the close of business on the day on
which the Board of Directors adopts a resolution taking such prior
action.
. PREEMPTIVE RIGHTS. No holder of shares of capital stock of the
Corporation shall, as such holder, have any right to purchase or
subscribe for any capital stock of any class which the Corporation may
issue or sell, whether or not exchangeable for any capital stock of the
Corporation of any class or classes, whether issued out of unissued
shares authorized by the Certificate of Incorporation, as amended, or out
of shares of capital stock of the Corporation acquired by it after the
issue thereof; nor shall any holder of shares of capital stock of the
Corporation, as such holder, have any right to purchase, acquire or
subscribe for any securities which the Corporation may issue or sell
whether or not convertible into or exchangeable for shares of capital
stock of the Corporation of any class or classes, and whether or not any
such securities have attached or appurtenant thereto warrants, options or
other instruments which entitle the holders thereof to purchase, acquire
or subscribe for shares of capital stock of any class or classes.
ARTICLE
DIRECTORS
. MANAGEMENT POWERS. The powers of the Corporation shall be
exercised by or under the authority of, and the business and affairs of
the Corporation shall be managed under the direction of, its Board of
Directors which may exercise all such powers of the Corporation and do
all such lawful acts and things as are not by statute, the Certificate of
Incorporation or these Bylaws directed or required to be exercised or
done by the stockholders.
. NUMBER AND QUALIFICATION. The Board of Directors shall consist
of not less than one (1) member. The number of Directors shall initially
be fixed by the incorporator and thereafter from time to time by the
Board of Directors. Directors need not be residents of the State of
Delaware nor stockholders of the Corporation. Each Director shall
qualify as a Director following election as such by agreeing to act or
acting in such capacity. The number of Directors shall be fixed, and may
be increased or decreased, from time to time by resolution of the Board
of Directors without the necessity of a written amendment to the Bylaws
of the Corporation; provided, however, no decrease shall have the effect
of shortening the term of any incumbent Director.
. ELECTION AND TERM. Members of the Board of Directors shall
hold office until the annual meeting of the stockholders of the
Corporation and until their successors shall have been elected and
qualified. At the annual meeting of stockholders, the stockholders
entitled to vote in an election of Directors shall elect Directors to
hold office until the next succeeding annual meeting of the stockholders.
Each Director shall hold office for the term for which he is elected, and
until his successor shall be elected and qualified or until his death,
resignation or removal, if earlier.
. VOTING ON DIRECTORS. Directors shall be elected by the vote of
the holders of a plurality of the shares entitled to vote in the election
of Directors and represented in person or by proxy at a meeting of
stockholders at which a quorum is present. Cumulative voting in the
election of Directors is expressly prohibited.
. VACANCIES AND NEW DIRECTORSHIPS. Vacancies and newly created
directorships resulting from any increase in the authorized number of
Directors elected by all the stockholders having the right to vote as a
single class may be filled by the affirmative vote of a majority of the
Directors then in office, although less than a quorum, or by a sole
remaining Director, or by the requisite vote of the stockholders at an
annual meeting of the stockholders or at a special meeting of the
stockholders called for that purpose, and the Directors so elected shall
hold office until their successors are elected and qualified. If the
holders of any class or classes of stock or series of stock of the
Corporation are entitled to elect one or more Directors by the
Certificate of Incorporation or Certificate of Designations applicable to
such class or series, vacancies and newly created directorships of such
class or classes or series may be filled by a majority of the Directors
elected by such class or classes or series thereof then in office, or by
a sole remaining Director so elected, and the Directors so elected shall
hold office until the next election of the class for which such Directors
shall have been chosen, and until their successors shall be elected and
qualified. For purposes of these Bylaws, a "vacancy" shall be defined as
an unfilled directorship arising by virtue of the death, resignation or
removal of a Director theretofore duly elected to serve in such capacity
in accordance with the relevant provisions of these Bylaws.
. REMOVAL. Any Director may be removed either for or without
cause at any duly convened special or annual meeting of stockholders, by
the affirmative vote of a majority in number of shares of the
stockholders present in person or by proxy at any meeting and entitled to
vote for the election of such Director, provided notice of intention to
act upon such matter shall have been given in the notice calling such
meeting.
. MEETINGS. The meetings of the Board of Directors shall be held
and conducted subject to the following regulations:
() PLACE. Meetings of the Board of Directors of the
Corporation, annual, regular or special, are to be held at the
principal office or place of business of the Corporation, or such
other place, either within or without the State of Delaware, as may
be specified in the respective notices, or waivers of notice,
thereof.
() ANNUAL MEETING. The Board of Directors shall meet each
year immediately after the annual meeting of the stockholders, at
the place where such meeting of the stockholders has been held
(either within or without the State of Delaware), for the purpose of
organization, election of officers, and consideration of any other
business that may properly be brought before the meeting. No notice
of any kind to either old or new members of the Board of Directors
for such annual meeting shall be required.
() REGULAR MEETINGS. Regular meetings of the Board of
Directors may be held without notice at such time and at such place
or places as shall from time to time be determined and designated by
the Board.
() SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by the Chairman of the Board, Chief
Executive Officer, Executive President or President of the
Corporation on notice of two (2) days to each Director either
personally or by mail or by telegram, telex or facsimile
transmission and delivery. Special meetings of the Board of
Directors shall be called by the Chairman of the Board, Executive
President or Secretary in like manner and on like notice on the
written request of two (2) Directors.
() NOTICE AND WAIVER OF NOTICE. Attendance of a Director at
any meeting shall constitute a waiver of notice of such meeting,
except where a Director attends for the express purpose of objecting
to the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be transacted
at, nor the purpose of, any regular meeting of the Board of
Directors need be specified in the notice or waiver of notice of
such meeting.
() QUORUM. At all meetings of the Board of Directors, a
majority of the number of Directors shall constitute a quorum for
the transaction of business, unless a greater number is required by
law or by the Certificate of Incorporation. If a quorum shall not
be present at any meeting of Directors, the Directors present
thereat may adjourn the meeting, from time to time, without notice
other than announcement at the meeting, until a quorum shall be
present.
() REQUISITE VOTE. The act of a majority of the Directors
present at any meeting at which a quorum is present shall be the act
of the Board of Directors unless the act of a greater number is
required by statute, the Certificate of Incorporation or these
Bylaws.
. ACTION WITHOUT MEETINGS. Unless otherwise restricted by the
Certificate of Incorporation or these Bylaws, any action required or
permitted by law to be taken at any meeting of the Board of Directors, or
any committee thereof, may be taken without a meeting, if prior to such
action a written consent thereto is signed by all members of the Board or
of such committee, as the case may be, and such written consent is filed
in the minutes or proceedings of the Board of Directors or committee.
. COMMITTEES. Committees designated and appointed by the Board
of Directors shall function subject to and in accordance with the
following regulations and procedures:
() DESIGNATION AND APPOINTMENT. The Board of Directors may,
by resolution adopted by a majority of the entire Board, designate
and appoint one or more committees under such name or names and for
such purpose or function as may be deemed appropriate.
() MEMBERS; ALTERNATE MEMBERS; TERMS. Each committee thus
designated and appointed shall consist of one or more of the
Directors of the Corporation, one of whom, in the case of the
Executive Committee, shall be the Chief Executive Officer of the
Company. The Board of Directors may designate one or more of its
members as alternate members of any committee, who may, subject to
any limitations imposed by the entire Board, replace absent or
disqualified members at any meeting of that committee. The members
or alternate members of any such committee shall serve at the
pleasure of and subject to the discretion of the Board of Directors.
() AUTHORITY. Each committee, to the extent provided in the
resolution of the Board creating same, shall have and may exercise
such of the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation as the
Board of Directors may direct and delegate, except, however, those
matters which are required by statute to be reserved unto or acted
upon by the entire Board of Directors.
() RECORDS. Each such committee shall keep and maintain
regular records or minutes of its meetings and report the same to
the Board of Directors when required.
() CHANGE IN NUMBER. The number of members or alternate
members of any committee appointed by the Board of Directors, as
herein provided, may be increased or decreased (but not below two)
from time to time by appropriate resolution adopted by a majority of
the entire Board of Directors.
() VACANCIES. Vacancies in the membership of any committee
designated and appointed hereunder shall be filled by the Board of
Directors, at a regular or special meeting of the Board of
Directors, in a manner consistent with the provisions of this
Section 3.9.
() REMOVAL. Any member or alternate member of any committee
appointed hereunder may be removed by the Board of Directors by the
affirmative vote of a majority of the entire Board, whenever in its
judgment the best interests of the Corporation will be served
thereby.
() MEETINGS. The time, place and notice (if any) of
committee meetings shall be determined by the members of such
committee.
() QUORUM; REQUISITE VOTE. At meetings of any committee
appointed hereunder, a majority of the number of members designated
by the Board of Directors shall constitute a quorum for the
transaction of business. The act of a majority of the members and
alternate members of the committee present at any meeting at which a
quorum is present shall be the act of such committee, except as
otherwise specifically provided by statute, the Certificate of
Incorporation or these Bylaws. If a quorum is not present at a
meeting of such committee, the members of such committee present may
adjourn the meeting from time to time, without notice other than an
announcement at the meeting, until a quorum is present.
() COMPENSATION. Appropriate compensation for members and
alternate members of any committee appointed pursuant to the
authority hereof may be authorized by the action of a majority of
the entire Board of Directors pursuant to the provisions of Section
3.10 hereof.
() ACTION WITHOUT MEETINGS. Any action required or permitted
to be taken at a meeting of any committee may be taken without a
meeting if a consent in writing, setting forth the action so taken,
is signed by all members of such committee. Such consent shall have
the same force and effect as a unanimous vote at a meeting. The
signed consent, or a signed copy, shall become a part of the record
of such committee.
() RESPONSIBILITY. Notwithstanding any provision to the
contrary herein, the designation and appointment of a committee and
the delegation of authority to it shall not operate to relieve the
Board of Directors, or any member thereof, of any responsibility
imposed upon it or him by law.
. COMPENSATION. By appropriate resolution of the Board of
Directors, the Directors may be reimbursed their expenses, if any, of
attendance at each meeting of the Board of Directors and may be paid a
fixed sum (as determined from time to time by the vote of a majority of
the Directors then in office) for attendance at each meeting of the Board
of Directors or a stated salary as Director, or both. No such payment
shall preclude any Director from serving the Corporation in another
capacity and receiving compensation therefor. Members of special or
standing committees may, by appropriate resolution of the Board of
Directors, be allowed similar reimbursement of expenses and compensation
for attending committee meetings.
. MAINTENANCE OF RECORDS. The Directors may keep the books and
records of the Corporation, except such as are required by law to be kept
within the State, outside the State of Delaware or at such place or
places as they may, from time to time, determine.
. INTERESTED DIRECTORS AND OFFICERS. No contract or other
transaction between the Corporation and one or more of its Directors or
officers, or between the Corporation and any firm of which one or more of
its Directors or officers are members or employees, or in which they are
interested, or between the Corporation and any corporation or association
of which one or more of its Directors or officers are stockholders,
members, directors, officers, or employees, or in which they are
interested, shall be void or voidable solely for this reason, or solely
because of the presence of such Director or Directors or officer or
officers at the meeting of the Board of Directors of the Corporation,
which acts upon, or in reference to, such contract, or transaction, if
(a) the material facts of such relationship or interest shall be
disclosed or known to the Board of Directors and the Board of Directors
shall, nevertheless in good faith, authorize, approve and ratify such
contract or transaction by a vote of a majority of the Directors present,
such interested Director or Directors to be counted in determining
whether a quorum is present, but not to be counted in calculating the
majority of such quorum necessary to carry such vote; (b) the material
facts of such relationship or interest as to the contract or transaction
are disclosed or are known to the stockholders entitled to vote thereon,
and the contract or transaction is specifically approved in good faith by
the vote of the stockholders; or (c) the contract or transaction is fair
to the Corporation as of the time it is authorized, approved or ratified
by the Board of Directors, a committee thereof or the stockholders. The
provisions of this Section shall not be construed to invalidate any
contract or other transaction which would otherwise be valid under the
common and statutory law applicable thereto.
ARTICLE
NOTICES
. METHOD OF NOTICE. Whenever under the provisions of the General
Corporation Law of Delaware or of the Certificate of Incorporation or of
these Bylaws, notice is required to be given to any Director or
stockholder, it shall not be construed to mean personal notice, but such
notice may be given in writing and delivered personally, through the
United States mail, by a recognized delivery service (such as Federal
Express) or by means of telegram, telex or facsimile transmission,
addressed to such Director or stockholder, at his address or telex or
facsimile transmission number, as the case may be, as it appears on the
records of the Corporation, with postage and fees thereon prepaid. Such
notice shall be deemed to be given at the time when the same shall be
deposited in the United States Mail or with an express delivery service
or when transmitted by telex or facsimile transmission or personally
delivered, as the case may be.
. WAIVER. Whenever any notice whatever is required to be given
under the provisions of the General Corporation Law of Delaware or under
the provisions of the Certificate of Incorporation or these Bylaws, a
waiver thereof in writing signed by the person or persons entitled to
such notice, whether before or after the time stated therein, shall be
deemed equivalent to the giving of such notice. Attendance by such
person or persons, whether in person or by proxy, at any meeting
requiring notice shall constitute a waiver of notice of such meeting,
except where such person attends the meeting for the express purpose of
objecting to the transaction of any business because the meeting is not
lawfully called or convened.
ARTICLE
OFFICERS AND AGENTS
. DESIGNATION. The officers of the Corporation shall be chosen
by the Board of Directors and shall consist of the offices of:
() Chairman of the Board, Chief Executive Officer, Executive
President, President, Vice President, Treasurer and Secretary; and
() Such other offices and officers (including one or more
additional Vice Presidents) and assistant officers and agents as the
Board of Directors shall deem necessary.
. ELECTION OF OFFICERS. Each officer designated in Section
5.1(a) hereof shall be elected by the Board of Directors on the
expiration of the term of office of such officer, as herein provided, or
whenever a vacancy exists in such office. Each officer or agent
designated in Section 5.1(b) above may be elected by the Board of
Directors at any meeting.
. QUALIFICATIONS. No officer or agent need be a stockholder of
the Corporation or a resident of Delaware. No officer or agent is
required to be a Director, except the Chairman of the Board. Any two or
more offices may be held by the same person.
. TERM OF OFFICE. Unless otherwise specified by the Board of
Directors at the time of election or appointment, or by the express
provisions of an employment contract approved by the Board, the term of
office of each officer and each agent shall expire on the date of the
first meeting of the Board of Directors next following the annual meeting
of stockholders each year. Each such officer or agent, unless elected or
appointed to an additional term, shall serve until the expiration of the
term of his office or, if earlier, his death, resignation or removal.
. AUTHORITY. Officers and agents shall have such authority and
perform such duties in the management of the Corporation as are provided
in these Bylaws or as may be determined by resolution of the Board of
Directors not inconsistent with these Bylaws.
. REMOVAL. Any officer or agent elected or appointed by the
Board of Directors may be removed with or without cause by the Board of
Directors whenever in its judgment the best interests of the Corporation
will be served thereby. Such removal shall be without prejudice to the
contract rights, if any, of the person so removed. Election or
appointment of an officer or agent shall not of itself create contract
rights.
. VACANCIES. Any vacancy occurring in any office of the
Corporation (by death, resignation, removal or otherwise) shall be filled
by the Board of Directors.
. COMPENSATION. The compensation of all officers and agents of
the Corporation shall be fixed from time to time by the Board of
Directors.
. CHAIRMAN OF THE BOARD. The Chairman of the Board shall be
chosen from among the Directors. The Chairman of the Board shall have
the power to call special meetings of the stockholders and of the
Directors for any purpose or purposes, and he shall preside at all
meetings of the Board of Directors, unless he shall be absent or unless
he shall, at his election, designate the Vice Chairman, if one is
elected, to preside in his stead. The Chairman of the Board shall advise
and counsel the Chief Executive Officer and other officers of the
Corporation and shall exercise such powers and perform such duties as
shall be assigned to or required by him from time to time by the Board of
Directors.
. VICE CHAIRMAN. The Vice Chairman, if one is elected, shall
have the power to call special meetings of the stockholders and of the
Directors for any purpose or purposes, and, in the absence of the
Chairman of the Board, the Vice Chairman shall preside at all meetings of
the Board of Directors unless he shall be absent. The Vice Chairman
shall advise and counsel the other officers of the Corporation and shall
exercise such powers and perform such duties as shall be assigned to or
required of him from time to time by the Board of Directors.
. CHIEF EXECUTIVE OFFICER. Subject to the supervision of the
Board of Directors, the Chief Executive Officer shall have general
supervision, management, direction and control of the business and
affairs of the Corporation and shall see that all orders and resolutions
of the Board of Directors are carried into effect. The Chief Executive
Officer shall execute bonds, mortgages and other contracts requiring a
seal, under the seal of the Corporation, except where required or
permitted by law to be otherwise executed and except where the execution
thereof shall be expressly delegated by the Board of Directors to some
other officer or agent of the Corporation. The Chief Executive Officer
shall preside at all meetings of the stockholders and, in the absence of
the Chairman of the Board and the Vice Chairman, at all meetings of the
Board of Directors. The Chief Executive Officer shall be ex officio a
member of the Executive Committee, if any, of the Board of Directors.
The Chief Executive Officer shall have the general powers and duties of
management usually vested in the office of chief executive officer of a
corporation and shall perform such other duties and possess such other
authority and powers as the Board of Directors may from time to time
prescribe.
. EXECUTIVE PRESIDENT. In the absence or disability of the Chief
Executive Officer, the Executive President shall perform all of the
duties of the Chief Executive Officer and when so acting shall have all
the powers and be subject to all the restrictions upon the Chief
Executive Officer, including the power to sign all instruments and to
take all actions which the Chief Executive Officer is authorized to
perform by the Board of Directors or the Bylaws. The Executive President
shall have the general powers and duties usually vested in the office of
president of a corporation and shall perform such other duties and
possess such other authority and powers as the Board of Directors may
from time to time prescribe or as the Chief Executive Officer may from
time to time delegate. In the event no individual is elected to the
office of Chief Operating Officer, the Executive President shall have the
powers and perform the duties of the Chief Operating Officer.
. CHIEF OPERATING OFFICER. Subject to the supervision of the
Executive President, the Chief Operating Officer, if one is elected,
shall have general supervision of the day to day operations of the
Corporation. The Chief Operating Officer shall be ex officio a member of
the Executive Committee, if any, of the Board of Directors. The Chief
Operating Officer shall have the general powers and duties of management
usually vested in the office of chief operating officer of a corporation
and shall perform such other duties and possess such other authority and
powers as the Board of Directors may from time to time prescribe.
. PRESIDENT. In the absence or disability of the Executive
President, the President shall perform all of the duties of the Executive
President and when so acting shall have all the powers and be subject to
all the restrictions upon the Executive President, including the power to
sign all instruments and to take all actions which the Executive
President is authorized to perform by the Board of Directors or the
Bylaws. The President shall have the general powers and duties vested in
the office of President as the Board of Directors may from time to time
prescribe or as the Chief Executive Officer may from time to time
delegate.
. VICE PRESIDENTS. The Vice President, or if there shall be more
than one, the Vice Presidents in the order determined by the requisite
vote of the Board of Directors, shall, in the prolonged absence or
disability of the President, perform the duties and exercise the powers
of the President and shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe or as
the Chief Executive Officer may from time to time delegate. The Board of
Directors may designate one or more Vice Presidents as Executive Vice
Presidents or Senior Vice Presidents.
. SECRETARY. The Secretary shall attend all meetings of the
Board of Directors and all meetings of the stockholders of the
Corporation and record all proceedings of the meetings of the Corporation
and of the Board of Directors in a book to be maintained for that purpose
and shall perform like duties for the standing committees when required.
The Secretary shall give, or cause to be given, notice of all meetings of
the stockholders and special meetings of the Board of Directors, and
shall perform such other duties as may be prescribed by the Board of
Directors, Chairman of the Board, Chief Executive Officer, Executive
President or President. The Secretary shall have custody of the
corporate seal of the Corporation, and he, or an Assistant Secretary,
shall have authority to affix the same to any instrument requiring it and
when so affixed, it may be attested by his signature or by the signature
of such Assistant Secretary. The Board of Directors may give general
authority to any other officer to affix the seal of the Corporation and
to attest the affixing by his signature.
. ASSISTANT SECRETARIES. The Assistant Secretary, or if there be
more than one, the Assistant Secretaries in the order determined by the
Board of Directors, shall in the absence or disability of the Secretary,
perform the duties and exercise the powers of the Secretary and shall
perform such other duties and have such other powers as the Board of
Directors may from time to time prescribe or as the Chief Executive
Officer may from time to time delegate.
. TREASURER. The Treasurer shall be the chief financial officer
of the Corporation and shall have the custody of the corporate funds and
securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and shall deposit all
moneys and other valuable effects in the name and to the credit of the
Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as
may be ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the Chief Executive Officer (and
Chairman of the Board, if one is elected) and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an
account of all his transactions as Treasurer and of the financial
condition of the Corporation. If required by the Board of Directors, the
Treasurer shall give the Corporation a bond in such sum and with such
surety or sureties as shall be satisfactory to the Board of Directors for
the faithful performance of the duties of his office and for the
restoration to the Corporation, in case of his death, resignation,
retirement or removal from office, of all books, papers, vouchers, money,
and other property of whatever kind in his possession or under his
control owned by the Corporation. The Treasurer shall perform such other
duties and have such other authority and powers as the Board of Directors
may from time to time prescribe or as the Chief Executive Officer may
from time to time delegate.
. ASSISTANT TREASURERS. The Assistant Treasurer, or, if there
shall be more than one, the Assistant Treasurers in the order determined
by the Board of Directors, shall, in the absence or disability of the
Treasurer, perform the duties and exercise the powers of the Treasurer
and shall perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe or as the Chief
Executive Officer may from time to time delegate.
ARTICLE
INDEMNIFICATION
. MANDATORY INDEMNIFICATION. Each person who was or is made a
party or is threatened to be made a party, or who was or is a witness
without being named a party, to any threatened, pending or completed
action, claim, suit or proceeding, whether civil, criminal,
administrative or investigative, any appeal in such an action, suit or
proceeding, and any inquiry or investigation that could lead to such an
action, suit or proceeding (a "Proceeding"), by reason of the fact that
such individual is or was a Director or officer of the Corporation, or
while a Director or officer of the Corporation is or was serving at the
request of the Corporation as a director, officer, partner, venturer,
proprietor, trustee, employee, agent or similar functionary of another
corporation, partnership, trust, employee benefit plan or other
enterprise, shall be indemnified and held harmless by the Corporation
from and against any judgments, penalties (including excise taxes),
fines, amounts paid in settlement and reasonable expenses (including
court costs and attorneys' fees) actually incurred by such person in
connection with such Proceeding if it is determined that he acted in good
faith and reasonably believed (i) in the case of conduct in his official
capacity on behalf of the Corporation that his conduct was in the
Corporation's best interests, (ii) in all other cases, that his conduct
was not opposed to the best interests of the Corporation, and (iii) with
respect to any Proceeding which is a criminal action, that he had no
reasonable cause to believe his conduct was unlawful; provided, however,
that in the event a determination is made that such person is liable to
the Corporation or is found liable on the basis that personal benefit was
improperly received by such person, the indemnification is limited to
reasonable expenses actually incurred by such person in connection with
the Proceeding and shall not be made in respect of any Proceeding in
which such person shall have been found liable for willful or intentional
misconduct in the performance of his duty to the Corporation. The
termination of any Proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of
itself be determinative of whether the person did not act in good faith
and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any
Proceeding which is a criminal action, had reasonable cause to believe
that his conduct was unlawful. A person shall be deemed to have been
found liable in respect of any claim, issue or matter only after the
person shall have been so adjudged by a court of competent jurisdiction
after exhaustion of all appeals therefrom.
. DETERMINATION OF INDEMNIFICATION. Any indemnification under
the foregoing Section 6.1 (unless ordered by a court of competent
jurisdiction) shall be made by the Corporation only upon a determination
that indemnification of such person is proper in the circumstances by
virtue of the fact that it shall have been determined that such person
has met the applicable standard of conduct. Such determination shall be
made (1) by a majority vote of a quorum consisting of Directors who at
the time of the vote are not named defendants or respondents in the
Proceeding; (2) if such quorum cannot be obtained, by a majority vote of
a committee of the Board of Directors, designated to act in the matter by
a majority of all Directors, consisting of two or more Directors who at
the time of the vote are not named defendants or respondents in the
Proceeding; (3) by special legal counsel (in a written opinion) selected
by the Board of Directors or a committee of the Board by a vote as set
forth in Subsection (1) or (2) of this Section, or, if such quorum cannot
be established, by a majority vote of all Directors (in which Directors
who are named defendants or respondents in the Proceeding may
participate); or (4) by the stockholders of the Corporation in a vote
that excludes the shares held by Directors who are named defendants or
respondents in the Proceeding.
. ADVANCE OF EXPENSES. Reasonable expenses, including court
costs and attorneys' fees, incurred by a person who was or is a witness
or who was or is named as a defendant or respondent in a Proceeding, by
reason of the fact that such individual is or was a Director or officer
of the Corporation, or while a Director or officer of the Corporation is
or was serving at the request of the Corporation as a director, officer,
partner, venturer, proprietor, trustee, employee, agent or similar
functionary of another corporation, partnership, trust, employee benefit
plan or other enterprise, shall be paid by the Corporation at reasonable
intervals in advance of the final disposition of such Proceeding, and
without the determination set forth in Section 6.2, upon receipt by the
Corporation of a written affirmation by such person of his good faith
belief that he has met the standard of conduct necessary for
indemnification under this Article 6, and a written undertaking by or on
behalf of such person to repay the amount paid or reimbursed by the
Corporation if it is ultimately determined that he is not entitled to be
indemnified by the Corporation as authorized in this Article 6. Such
written undertaking shall be an unlimited obligation of such person and
it may be accepted without reference to financial ability to make
repayment.
. PERMISSIVE INDEMNIFICATION. The Board of Directors of the
Corporation may authorize the Corporation to indemnify employees or
agents of the Corporation, and to advance the reasonable expenses of such
persons, to the same extent, following the same determinations and upon
the same conditions as are required for the indemnification of and
advancement of expenses to Directors and officers of the Corporation.
. NATURE OF INDEMNIFICATION. The indemnification and advancement
of expenses provided hereunder shall not be deemed exclusive of any other
rights to which those seeking indemnification may be entitled under the
Certificate of Incorporation, these Bylaws, any agreement, vote of
stockholders or disinterested Directors or otherwise, both as to actions
taken in an official capacity and as to actions taken in any other
capacity while holding such office, shall continue as to a person who has
ceased to be a Director, officer, employee or agent of the Corporation
and shall inure to the benefit of the heirs, executors and administrators
of such person.
. INSURANCE. The Corporation shall have the power and authority
to purchase and maintain insurance or another arrangement on behalf of
any person who is or was a Director, officer, employee or agent of the
Corporation, or who is or was serving at the request of the Corporation
as a director, officer, partner, venturer, proprietor, trustee, employee,
agent, or similar functionary of another foreign or domestic corporation,
partnership, joint venture, sole proprietorship, trust, employee benefit
plan or other enterprise, against any liability, claim, damage, loss or
risk asserted against such person and incurred by such person in any such
capacity or arising out of the status of such person as such,
irrespective of whether the Corporation would have the power to indemnify
and hold such person harmless against such liability under the provisions
hereof. If the insurance or other arrangement is with a person or entity
that is not regularly engaged in the business of providing insurance
coverage, the insurance or arrangement may provide for payment of a
liability with respect to which the Corporation would not have the power
to indemnify the person only if including coverage for the additional
liability has been approved by the stockholders of the Corporation.
Without limiting the power of the Corporation to procure or maintain any
kind of insurance or other arrangement, the Corporation may, for the
benefit of persons indemnified by the Corporation, (1) create a trust
fund; (2) establish any form of self-insurance; (3) secure its indemnity
obligation by grant of a security interest or other lien on the assets of
the Corporation; or (4) establish a letter of credit, guaranty, or surety
arrangement. The insurance or other arrangement may be procured,
maintained, or established within the Corporation or with any insurer or
other person deemed appropriate by the Board of Directors regardless of
whether all or part of the stock or other securities of the insurer or
other person are owned in whole or part by the Corporation. In the
absence of fraud, the judgment of the Board of Directors as to the terms
and conditions of the insurance or other arrangement and the identity of
the insurer or other person participating in the arrangement shall be
conclusive and the insurance or arrangement shall not be voidable and
shall not subject the Directors approving the insurance or arrangement to
liability, on any ground, regardless of whether the Directors
participating in the approval is a beneficiary of the insurance or
arrangement.
. NOTICE. Any indemnification or advance of expenses to a
present or former Director or officer of the Corporation in accordance
with this Article 6 shall be reported in writing to the stockholders of
the Corporation with or before the notice or waiver of notice of the next
stockholders' meeting or with or before the next submission of a consent
to action without a meeting and, in any case, within the next twelve
month period immediately following the indemnification or advance.
ARTICLE
STOCK CERTIFICATES AND TRANSFER REGULATIONS
. DESCRIPTION OF CERTIFICATES. The shares of the capital stock
of the Corporation shall be represented by certificates in the form
approved by the Board of Directors and signed in the name of the
Corporation by the Chairman of the Board, Chief Executive Officer,
Executive President, Chief Operating Officer, President or a Vice
President and the Secretary or an Assistant Secretary of the Corporation,
and sealed with the seal of the Corporation or a facsimile thereof. Each
certificate shall state on the face thereof the name of the holder, the
number and class of shares, the par value of shares covered thereby or a
statement that such shares are without par value, and such other matters
as are required by law. At such time as the Corporation may be
authorized to issue shares of more than one class, every certificate
shall set forth upon the face or back of such certificate a statement of
the designations, preferences, limitations and relative rights of the
shares of each class authorized to be issued, as required by the laws of
the State of Delaware, or may state that the Corporation will furnish a
copy of such statement without charge to the holder of such certificate
upon receipt of a written request therefor from such holder.
. ENTITLEMENT TO CERTIFICATES. Every holder of the capital stock
in the Corporation shall be entitled to have a certificate signed in the
name of the Corporation by the Chairman of the Board, Chief Executive
Officer, Executive President, Chief Operating Officer, President or a
Vice President and the Secretary or an Assistant Secretary of the
Corporation, certifying the class of capital stock and the number of
shares represented thereby as owned or held by such stockholder in the
Corporation.
. SIGNATURES. The signatures of the Chairman of the Board, Chief
Executive Officer, Executive President, Chief Operating Officer,
President, Vice President, Secretary or Assistant Secretary upon a
certificate may be facsimiles. In case any officer or officers who have
signed, or whose facsimile signature or signatures have been placed upon
any such certificate or certificates, shall cease to serve as such
officer or officers of the Corporation, whether because of death,
resignation, removal or otherwise, before such certificate or
certificates are issued and delivered by the Corporation, such
certificate or certificates may nevertheless be adopted by the
Corporation and be issued and delivered with the same effect as though
the person or persons who signed such certificate or certificates or
whose facsimile signature or signatures have been used thereon had not
ceased to serve as such officer or officers of the Corporation.
. ISSUANCE OF CERTIFICATES. Certificates evidencing shares of
its capital stock (both treasury and authorized but unissued) may be
issued for such consideration (not less than par value, except for
treasury shares which may be issued for such consideration) and to such
persons as the Board of Directors may determine from time to time.
Shares shall not be issued until the full amount of the consideration,
fixed as provided by law, has been paid.
. PAYMENT FOR SHARES. Consideration for the issuance of shares
shall be paid, valued and allocated as follows:
() CONSIDERATION. The consideration for the issuance of
shares shall consist of money paid, labor done (including services
actually performed for the Corporation), or property (tangible or
intangible) actually received. Neither promissory notes nor the
promise of future services shall constitute payment of consideration
for shares.
() VALUATION. In the absence of fraud in the transaction,
the determination of the Board of Directors as to the value of
consideration received shall be conclusive.
() EFFECT. When consideration, fixed as provided by law, has
been paid, the shares shall be deemed to have been issued and shall
be considered fully paid and nonassessable.
() ALLOCATION OF CONSIDERATION. The consideration received
for shares shall be allocated by the Board of Directors, in
accordance with law, between the stated capital and capital surplus
accounts.
. SUBSCRIPTIONS. Unless otherwise provided in the subscription
agreement, subscriptions of shares, whether made before or after
organization of the Corporation, shall be paid in full in such
installments and at such times as shall be determined by the Board of
Directors. Any call made by the Board of Directors for payment on
subscriptions shall be uniform as to all shares of the same class and
series. In case of default in the payment of any installment or call
when payment is due, the Corporation may proceed to collect the amount
due in the same manner as any debt due to the Corporation.
. RECORD DATE. For the purpose of determining stockholders
entitled to notice of or to vote at any meeting of stockholders, or any
adjournment thereof, or entitled to receive a distribution by the
Corporation (other than a distribution involving a purchase or redemption
by the Corporation of any of its own shares) or a share dividend, or in
order to make a determination of stockholders for any other proper
purpose, the Board of Directors may fix a record date for any such
determination of stockholders, which record date shall not precede the
date upon which the resolution fixing the record date is adopted by the
Board of Directors, and which record date shall not be more than sixty
(60) days, and in the case of a meeting of stockholders, not less than
ten (10) days prior to the date on which the particular action requiring
such determination of stockholders is to be taken. If no record date is
fixed for the determination of stockholders entitled to notice of or to
vote at a meeting of stockholders, or stockholders entitled to receive a
distribution (other than a distribution involving a purchase or
redemption by the Corporation of any of its own shares) or a share
dividend, the date before the date on which notice of the meeting is
mailed or the date on which the resolution of the Board of Directors
declaring such distribution or share dividend is adopted, as the case may
be, shall be the record date for such determination of stockholders.
When a determination of stockholders entitled to vote at any meeting of
stockholders has been made as provided in this Section, such
determination shall be applied to any adjournment thereof.
. REGISTERED OWNERS. Prior to due presentment for registration
of transfer of a certificate evidencing shares of the capital stock of
the Corporation in the manner set forth in Section 7.10 hereof, the
Corporation shall be entitled to recognize the person registered as the
owner of such shares on its books (or the books of its duly appointed
transfer agent, as the case may be) as the person exclusively entitled to
vote, to receive notices and dividends with respect to, and otherwise
exercise all rights and powers relative to such shares; and the
Corporation shall not be bound or otherwise obligated to recognize any
claim, direct or indirect, legal or equitable, to such shares by any
other person, whether or not it shall have actual, express or other
notice thereof, except as otherwise provided by the laws of Delaware.
. LOST, STOLEN OR DESTROYED CERTIFICATES. The Corporation shall
issue a new certificate in place of any certificate for shares previously
issued if the registered owner of the certificate satisfies the following
conditions:
() PROOF OF LOSS. Submits proof in affidavit form
satisfactory to the Corporation that such certificate has been lost,
destroyed or wrongfully taken;
() TIMELY REQUEST. Requests the issuance of a new
certificate before the Corporation has notice that the certificate
has been acquired by a purchaser for value in good faith and without
notice of an adverse claim;
() BOND. Gives a bond in such form, and with such surety or
sureties, with fixed or open penalty, as the Corporation may direct,
to indemnify the Corporation (and its transfer agent and registrar,
if any) against any claim that may be made or otherwise asserted by
virtue of the alleged loss, destruction, or theft of such
certificate or certificates; and
() OTHER REQUIREMENTS. Satisfies any other reasonable
requirements imposed by the Corporation.
In the event a certificate has been lost, apparently destroyed or
wrongfully taken, and the registered owner of record fails to notify the
Corporation within a reasonable time after he has notice of such loss,
destruction, or wrongful taking, and the Corporation registers a transfer
(in the manner hereinbelow set forth) of the shares represented by the
certificate before receiving such notification, such prior registered
owner of record shall be precluded from making any claim against the
Corporation for the transfer required hereunder or for a new certificate.
. REGISTRATION OF TRANSFERS. Subject to the provisions hereof,
the Corporation shall register the transfer of a certificate evidencing
shares of its capital stock presented to it for transfer if:
() ENDORSEMENT. Upon surrender of the certificate to the
Corporation (or its transfer agent, as the case may be) for
transfer, the certificate (or an appended stock power) is properly
endorsed by the registered owner, or by his duly authorized legal
representative or attorney-in-fact, with proper written evidence of
the authority and appointment of such representative, if any,
accompanying the certificate;
() GUARANTY AND EFFECTIVENESS OF SIGNATURE. The signature of
such registered owner or his legal representative or attorney-in-
fact, as the case may be, has been guaranteed by a national banking
association or member of the New York Stock Exchange, and reasonable
assurance in a form satisfactory to the Corporation is given that
such endorsements are genuine and effective;
() ADVERSE CLAIMS. The Corporation has no notice of an
adverse claim or has otherwise discharged any duty to inquire into
such a claim;
() COLLECTION OF TAXES. Any applicable law (local, state or
federal) relating to the collection of taxes relative to the
transaction has been complied with; and
() ADDITIONAL REQUIREMENTS SATISFIED. Such additional
conditions and documentation as the Corporation (or its transfer
agent, as the case may be) shall reasonably require, including
without limitation thereto, the delivery with the surrender of such
stock certificate or certificates of proper evidence of succession,
assignment or other authority to obtain transfer thereof, as the
circumstances may require, and such legal opinions with reference to
the requested transfer as shall be required by the Corporation (or
its transfer agent) pursuant to the provisions of these Bylaws and
applicable law, shall have been satisfied.
. RESTRICTIONS ON TRANSFER AND LEGENDS ON CERTIFICATES.
() SHARES IN CLASSES OR SERIES. If the Corporation is
authorized to issue shares of more than one class, the certificate
shall set forth, either on the face or back of the certificate, a
full or summary statement of all of the designations, preferences,
limitations, and relative rights of the shares of each such class
and, if the Corporation is authorized to issue any preferred or
special class in series, the variations in the relative rights and
preferences of the shares of each such series so far as the same
have been fixed and determined, and the authority of the Board of
Directors to fix and determine the relative rights and preferences
of subsequent series. In lieu of providing such a statement in full
on the certificate, a statement on the face or back of the
certificate may provide that the Corporation will furnish such
information to any stockholder without charge upon written request
to the Corporation at its principal place of business or registered
office and that copies of the information are on file in the office
of the Secretary of State.
() RESTRICTION ON TRANSFER. Any restrictions imposed by the
Corporation on the sale or other disposition of its shares and on
the transfer thereof must be copied at length or in summary form on
the face, or so copied on the back and referred to on the face, of
each certificate representing shares to which the restriction
applies. The certificate may however state on the face or back that
such a restriction exists pursuant to a specified document and that
the Corporation will furnish a copy of the document to the holder of
the certificate without charge upon written request to the
Corporation at its principal place of business.
() UNREGISTERED SECURITIES. Any security of the Corporation,
including, among others, any certificate evidencing shares of the
capital stock of the Corporation or warrants to purchase shares of
capital stock of the Corporation, which is issued to any person
without registration under the Securities Act of 1933, as amended,
or the Blue Sky laws of any state, shall not be transferable until
the Corporation has been furnished with a legal opinion of counsel
with reference thereto, satisfactory in form and content to the
Corporation and its counsel, to the effect that such sale, transfer
or pledge does not involve a violation of the Securities Act of
1933, as amended, or the Blue Sky laws of any state having
jurisdiction. The certificate representing the security shall bear
substantially the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAW BUT HAVE
BEEN ACQUIRED FOR THE PRIVATE INVESTMENT OF THE HOLDER
HEREOF AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED UNTIL
EITHER (i) A REGISTRATION STATEMENT UNDER SUCH SECURITIES
ACT OR SUCH APPLICABLE STATE SECURITIES LAWS SHALL HAVE
BECOME EFFECTIVE WITH REGARD THERETO, OR (ii) THE
CORPORATION SHALL HAVE RECEIVED AN OPINION OF COUNSEL
ACCEPTABLE TO THE CORPORATION AND ITS COUNSEL THAT
REGISTRATION UNDER SUCH SECURITIES ACT OR SUCH APPLICABLE
STATE SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH
SUCH PROPOSED OFFER, SALE OR TRANSFER.
ARTICLE
GENERAL PROVISIONS
. DIVIDENDS. Subject to the provisions of the General
Corporation Law of Delaware, as amended, and the Certificate of
Incorporation, dividends of the Corporation shall be declared and paid
pursuant to the following regulations:
() DECLARATION AND PAYMENT. Dividends on the issued and
outstanding shares of capital stock of the Corporation may be
declared by the Board of Directors at any regular or special meeting
and may be paid in cash, in property, or in shares of capital stock.
Such declaration and payment shall be at the discretion of the Board
of Directors.
() RECORD DATE. The Board of Directors may fix in advance a
record date for the purpose of determining stockholders entitled to
receive payment of any dividend, such record date to be not more
than sixty (60) days prior to the payment date of such dividend, or
the Board of Directors may close the stock transfer books for such
purpose for a period of not more than sixty (60) days prior to the
payment date of such dividend. In the absence of action by the
Board of Directors, the date upon which the Board of Directors adopt
the resolution declaring such dividend shall be the record date.
. RESERVES. There may be created by resolution of the Board of
Directors out of the surplus of the Corporation such reserve or reserves
as the Board of Directors from time to time, in its discretion, think
proper to provide for contingencies, or to repair or maintain any
property of the Corporation, or for such other purposes as the Board of
Directors shall think beneficial to the Corporation, and the Board of
Directors may modify or abolish any such reserve in the manner in which
it was created.
. BOOKS AND RECORDS. The Corporation shall maintain correct and
complete books and records of account and shall prepare and maintain
minutes of the proceedings of its stockholders, its Board of Directors
and each committee of its Board of Directors. The Corporation shall keep
at its registered office or principal place of business, or at the office
of its transfer agent or registrar, a record of original issuance of
shares issued by the Corporation and a record of each transfer of those
shares that have been presented to the Corporation for registration or
transfer. Such records shall contain the names and addresses of all past
and present stockholders and the number and class of the shares issued by
the Corporation held by each.
. ANNUAL STATEMENT. The Board of Directors shall present at or
before each annual meeting of stockholders a full and clear statement of
the business and financial condition of the Corporation, including a
reasonably detailed balance sheet and income statement under current
date.
. CONTRACTS AND NEGOTIABLE INSTRUMENTS. Except as otherwise
provided by law or these Bylaws, any contract or other instrument
relative to the business of the Corporation may be executed and delivered
in the name of the Corporation and on its behalf by the Chairman of the
Board, Chief Executive Officer, Executive President, Chief Operating
Officer or President of the Corporation. The Board of Directors may
authorize any other officer or agent of the Corporation to enter into any
contract or execute and deliver any contract in the name and on behalf of
the Corporation, and such authority may be general or confined to
specific instances as the Board of Directors may determine by resolution.
All bills, notes, checks or other instruments for the payment of money
shall be signed or countersigned by such officer, officers, agent or
agents and in such manner as are permitted by these Bylaws and/or as,
from time to time, may be prescribed by resolution of the Board of
Directors. Unless authorized to do so by these Bylaws or by the Board of
Directors, no officer, agent or employee shall have any power or
authority to bind the Corporation by any contract or engagement, or to
pledge its credit, or to render it liable pecuniarily for any purpose or
to any amount.
. FISCAL YEAR. The fiscal year of the Corporation shall end on
the Saturday closest to September 30.
. CORPORATE SEAL. The Corporation seal shall be in such form as
may be determined by the Board of Directors. The seal may be used by
causing it or a facsimile thereof to be impressed or affixed or in any
manner reproduced.
. RESIGNATIONS. Any Director, officer or agent may resign his
office or position with the Corporation by delivering written notice
thereof to the Chairman of the Board, Chief Executive Officer, Executive
President, Chief Operating Officer, President or Secretary. Such
resignation shall be effective at the time specified therein, or
immediately upon delivery if no time is specified. Unless otherwise
specified therein, an acceptance of such resignation shall not be a
necessary prerequisite of its effectiveness.
. AMENDMENT OF BYLAWS. These Bylaws may be altered, amended, or
repealed and new Bylaws adopted at any meeting of the Board of Directors
or stockholders at which a quorum is present, by the affirmative vote of
a majority of the Directors or stockholders, as the case may be, present
at such meeting, provided notice of the proposed alteration, amendment,
or repeal be contained in the notice of such meeting.
. CONSTRUCTION. Whenever the context so requires herein, the
masculine shall include the feminine and neuter, and the singular shall
include the plural, and conversely. If any portion or provision of these
Bylaws shall be held invalid or inoperative, then, so far as is
reasonable and possible: (1) the remainder of these Bylaws shall be
considered valid and operative, and (2) effect shall be given to the
intent manifested by the portion or provision held invalid or
inoperative.
. TELEPHONE MEETINGS. Stockholders, Directors or members of any
committee may hold any meeting of such stockholders, Directors or
committee by means of conference telephone or similar communications
equipment which permits all persons participating in the meeting to hear
each other and actions taken at such meetings shall have the same force
and effect as if taken at a meeting at which persons were present and
voting in person. The Secretary of the Corporation shall prepare a
memorandum of the action taken at any such telephonic meeting.
. TABLE OF CONTENTS; CAPTIONS. The table of contents and
captions used in these Bylaws have been inserted for administrative
convenience only and do not constitute matter to be construed in
interpretation.
IN DUE CERTIFICATION WHEREOF, the undersigned, being the Secretary
of PILGRIM'S PRIDE CORPORATION, confirms the adoption and approval of the
foregoing Bylaws, effective as of the _______ day of December, 1996.
___________________________________
CLIFFORD E. BUTLER,
Secretary
PILGRIM'S PRIDE CORPORATION
and
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY and
SIGNATURE 1A (CAYMAN), LTD.
AMENDED AND RESTATED
NOTE PURCHASE AGREEMENT
Dated April 14, 1997
$85,000,000 Notes
TABLE OF CONTENTS
ARTICLE PAGE
EXHIBITS
A-1 Form of Fixed Note
A-2 Form of Floating Note
B Form of Texas Deed of Trust and Security Agreement
C Receipt of Funds
D Closing Certificate
E Form of Guaranty Agreement
F Officer's Certificate
AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
This Amended and Restated Note Purchase Agreement (this "Agreement")
dated April 14, 1997, by and between John Hancock Mutual Life Insurance
Company ("Hancock"), Signature 1A (Cayman), Ltd. ("Signature") (Hancock and
Signature are individually referred to as a "Purchaser" and collectively,
"Purchasers") and Pilgrim's Pride Corporation, a Delaware corporation (the
"Company").
R E C I T A L S :
WHEREAS, the Company previously sold to Hancock its 7.21% Fixed Rate
Note in the aggregate principal amount of $50,000,000 (the "1996 Note")
pursuant to a Note Purchase Agreement dated February 15, 1996 (the
"Original Note Purchase Agreement") between Hancock and the Company;
WHEREAS, in connection with the Green Acre Acquisition (as defined
herein), the Company will assume $7,238,195 of notes payable to Hancock and
desires to amend and restate such notes by the issuance of new fixed rate
notes to Hancock;
WHEREAS, the Company desires to issue and sell to Purchasers an
additional $27,761,805 of its notes for the purpose of financing the Green
Acre Acquisition and for future expansion; and
WHEREAS, the parties desire to amend and restate the Original Note
Purchase Agreement in its entirety pursuant to the terms and conditions of
this Agreement.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements set forth in this Agreement, the parties to this Agreement
mutually agree as follows:
ARTICLE .."
DEFINITIONS
.. DEFINED TERMS... DEFINED TERMS." As used herein the following
terms have the following respective meanings:
ACQUIRED PROPERTY: the meaning specified in Section 9.4.
ADDITIONAL FIXED NOTES: the meaning specified in Section 2.5.
ADDITIONAL FLOATING NOTES: the meaning specified in Section 2.5.
ADDITIONAL NOTES: collectively, the Additional Fixed Notes and
Additional Floating Notes, if any.
ADVERSE ENVIRONMENTAL IMPACT: the meaning specified in Section 11.1.
AFFILIATE: with respect to any Person, (a) any other Person directly
or indirectly controlling, controlled by or under direct or indirect common
control with, such Person, or (b) any director, officer, partner or
employee of such Person. A Person shall be deemed to control another
Person if such Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of such other
Person, whether through the ownership of voting securities, by contract or
otherwise. The term "control" shall mean the possession, direct or
indirect, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise, and shall in any event include the
ownership or power to vote ten percent (10%) or more of the outstanding
equity interests of such other Person. For purposes hereof, Archer Daniels
Midland Company ("ADM") shall not be deemed an Affiliate of the Company so
long as ADM does not own or control more than twenty percent (20%) of the
outstanding stock of the Company.
APPRAISED VALUE: The appraised value of the Mortgaged Properties, as
determined by Bryan A. Carrell, MIA, or such other appraiser selected by
Purchasers.
BANKRUPTCY CODE: the meaning provided in Section 14.1(f).
BUSINESS DAY: any day on which national banks are open in Dallas,
Texas and Boston, Massachusetts.
CALLED PRINCIPAL: with respect to any Fixed Note, the principal of
such Fixed Note that is to be prepaid pursuant to Section 8.2 or is
declared to be immediately due and payable pursuant to Article 14, as the
context requires.
CAPITAL EXPENDITURES: for any period, expenditures (including,
without limitation, the aggregate amount of Capital Lease Obligations
incurred during such period) made by the Company or any Subsidiary to
acquire or construct fixed assets, plant and equipment (including renewals,
improvements and replacements, but excluding repairs) during such period
computed in accordance with GAAP.
CAPITAL LEASE OBLIGATIONS: all obligations to pay rent or other
amounts under a lease of (or other agreement conveying the right to use)
Property to the extent such obligations are required to be classified and
accounted for as a capital lease on a balance sheet under GAAP, and for
purposes of this Agreement, the amount of such obligation shall be the
capitalized amount thereof, determined in accordance with GAAP.
CERTIFICATE: the meaning specified in Section 4.1(d).
CLOSING: the meaning specified in Article 3.
CLOSING DATE: the meaning specified in Article 3.
CODE: the Internal Revenue Code of 1986, as amended from time to
time.
COLLATERAL: the Mortgaged Properties and the properties described in
the Financing Statements.
COLLATERAL AGREEMENTS: the Security Documents, the Financing
Statements, the Receipt of Funds, the Certificate and all other documents
and instruments that may be executed or delivered hereunder or in
connection herewith.
COMMISSION: the Securities and Exchange Commission or any other
Federal agency at the time administering the Securities Act.
COMPANY: Pilgrim's Pride Corporation, a Delaware corporation, or any
successor thereto by merger, consolidation, or otherwise.
CONSOLIDATED INTEREST EXPENSE: for any period, the aggregate
consolidated interest expense of the Company and the Subsidiaries for such
period, as determined in accordance with GAAP (minus, to the extent
included therein, any interest expense not paid or payable in cash)
including, without limitation (and without duplication in any instance),
(a) all interest paid on Debt of the Company and the Subsidiaries, (b) all
commissions, discounts and other fees and charges owed with respect to
letters of credit and banker's acceptances allocable to or amortized over
such period, (c) net costs under Interest Rate Agreements and (d) the
portion of any amount payable under Capital Lease Obligations that is, in
accordance with GAAP, allocable to interest expense.
CONSOLIDATED NET INCOME: for any period means all amounts which, in
conformity with GAAP, would be included under net income (or deficit) on a
consolidated income statement of the Company and the Subsidiaries for such
period, after deducting all operating expenses, provisions for all taxes
and reserves (including, but not limited to, reserves for deferred income
taxes), and all other proper deductions, all in conformity with GAAP.
CONSOLIDATED WORKING CAPITAL: total Current Assets less Current
Liabilities of the Company and its Subsidiaries on a consolidated basis.
CURRENT ASSETS: the consolidated assets of the Company and its
Subsidiaries which can be readily converted into cash within one year and
all other assets deemed current assets in accordance with GAAP.
CURRENT LIABILITIES: Debt, trade payables, accrued expenses and other
obligations which must be satisfied or have maturities within one year,
including the outstanding balance of the Company's revolving credit
facility which may be due and payable within one year.
DEBT: (a) indebtedness for borrowed money, including long-term and
short-term debt, obligations and liabilities secured by any Lien existing
on property owned subject to such Lien, whether or not the indebtedness,
obligation or liability secured thereby shall have been assumed, and (b)
all guarantees given by such Person (other than with respect to the
Company, guarantees of trade payables of Pilgrim's Pride-Mexico).
DEFAULT RATE: an amount equal to the applicable interest rate for
each Note plus two percent (2%), but not to exceed the Highest Lawful Rate.
DISCOUNTED VALUE: with respect to the Called Principal of any Fixed
Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due
dates to the Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount factor
(applied on a semiannual basis) equal to the Reinvestment Yield with
respect to such Called Principal.
EBITDA: for any period, shall mean consolidated net income of the
Company and the Subsidiaries after restoring amounts deducted for
depreciation, amortization, interest expense and taxes.
ELIGIBLE SUBSIDIARY: any corporation or other legal entity organized
under the laws of a state of the United States and located entirely within
the United States and 100% of all equity interests of which is owned by the
Company either directly or through another Eligible Subsidiary.
ENVIRONMENTAL ACTIVITY: the meaning specified in Section 11.1.
ENVIRONMENTAL CERTIFICATE: the meaning specified in Section 4.1(o).
ENVIRONMENTAL CONDITION: the meaning specified in Section 11.1.
ENVIRONMENTAL DAMAGES: the meaning specified in Section 11.1.
ENVIRONMENTAL LAWS: the meaning specified in Section 11.1.
ERISA: the Employee Retirement Income Security Act of 1974, as
amended from time to time.
EVENT OF DEFAULT: the meaning specified in Section 14.1.
EXCHANGE ACT: the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission thereunder, all as the same
shall be in effect at the time.
FINANCIAL STATEMENTS: the meaning specified in Section 5.3.
FINANCING STATEMENTS: the meaning specified in Section 4.1(d).
FISCAL YEAR: the fiscal year of the Company for purposes of
Article 9.
FIXED CHARGE COVERAGE RATIO: the ratio of (A) EBITDA plus total lease
payments relating to non-cancelable operating leases (other than payments
under Capital Lease Obligations) to (B) the sum of (i) Consolidated
Interest Expense, (ii) total lease payments relating to non-cancelable
operating leases (other than Capital Lease Obligations), (iii) principal
payments due on or scheduled mandatory redemptions of Debt (including the
Notes) within one year, whether or not actually paid and (iv) the current
portion of Capital Lease Obligations, all determined on a consolidated
basis for the Company and its Subsidiaries.
FIXED NOTES: the 1997 Fixed-A Note, the 1997 Fixed-B Note and any
Additional Fixed Notes.
FLOATING NOTES: the 1997 Floating Notes and any Additional Floating
Notes.
GAAP: generally accepted accounting principles as set forth from time
to time in the opinions of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements of the Financial
Accounting Standards Board or in such opinions and statements of such other
entities as shall be approved by a significant segment of the accounting
profession.
GOVERNMENTAL AUTHORITY: any nation or government, any state or other
political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to any government.
GREEN ACRE: Green Acre Foods, Inc., a Texas corporation.
GREEN ACRE ACQUISITION: the acquisition by the Company of certain
assets from Green Acre, as contemplated by the Green Acre Purchase
Agreement.
GREEN ACRE NOTES: collectively, the Green Acre A Note and the Green
Acre B Note.
GREEN ACRE A NOTE: the Promissory Note dated April 26, 1990 in the
original principal amount of $16,000,000 issued by Green Acre and Green
Acre Farms, Inc. that is being assumed by the Company pursuant to the Green
Acre Acquisition.
GREEN ACRE B NOTE: the Promissory Note dated December 11, 1990 in the
original principal amount of $3,300,000 issued by Green Acre and Green Acre
Farms, Inc. that is being assumed by the Company pursuant to the Green Acre
Acquisition.
GREEN ACRE PURCHASE AGREEMENT: the Asset Purchase Agreement dated as
of February 21, 1997 between the Company and Green Acre, as delivered to
Purchasers.
HAZARDOUS SUBSTANCES: the meaning specified in Section 11.1.
HIGHEST LAWFUL RATE: the meaning specified in Section 16.4.
INDEMNIFIED PARTY: the meaning specified in Section 11.2.
INTEREST PERIOD: with respect to the Floating Notes, a period
commencing (i) in the case of the initial Interest Period thereunder, on
the Closing Date (with respect to the 1997 Floating Notes) or the date of
issuance thereof (with respect to any Additional Floating Notes) or (ii) in
the case of subsequent Interest Periods thereunder, on the termination date
of the immediately preceding Interest Period applicable thereto in the case
of a rollover to a new Interest Period in accordance with Section 7.2, and
ending in each case three months, six months or one year thereafter as the
Company shall select in accordance with Section 7.2; provided, however,
that (A) any Interest Period that would otherwise end on a day that is not
a LIBOR Business Day shall be extended to the next succeeding LIBOR
Business Day unless such next succeeding LIBOR Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding LIBOR Business Day and (B) any Interest Period that would
otherwise end after the Maturity Date shall end on the Maturity Date.
INTEREST RATE AGREEMENT: any interest rate protection agreement,
interest rate future, interest rate option, interest rate swap, interest
rate cap or other interest rate hedge or arrangement under which the
Company or any of the Subsidiaries is a party or a beneficiary.
INTEREST RATE SET WINDOW: the period of time not more than ten (10)
days nor less than five (5) days prior to the commencement of each Interest
Period.
INVESTMENT: any direct or indirect purchase or other acquisition by a
Person of stock or other securities of any other Person, or any direct or
indirect loan, advance or capital contribution by a Person to any other
Person, including all indebtedness and accounts receivable from such other
Person that did not arise from sales to such other Person in the ordinary
course of business.
LAW: the meaning specified in Section 11.4(c).
LIBOR BUSINESS DAY: a Business Day on which dealings in dollars are
carried out in the London interbank eurodollar market.
LIBOR PREMIUM: with respect to any Floating Note, a premium of (i)
three percent (3%) of the principal amount prepaid, if the prepayment
occurs on or before the date that is two years following the date of
issuance of such Floating Note, (ii) two percent (2%) of the principal
amount prepaid, if the prepayment occurs after the date that is two years
following and on or before the date that is three years following the date
of issuance of such Floating Note, and (iii) one percent (1%) of the
principal amount prepaid, if the prepayment occurs after the date that is
three years following and on or before the date that is four years
following the date of issuance of such Floating Note.
LIBOR RATE: for any Interest Period in effect under the Floating
Notes, the rate announced in THE WALL STREET JOURNAL (Northeast Edition) as
the London Interbank Offered Rates (LIBOR) for a period of corresponding
duration.
LIEN: with respect to any Property, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
Property. For purposes of this Agreement, a Person shall be deemed to own,
subject to a Lien, any Property that it has acquired or holds subject to
the interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement (other than an operating
lease) relating to such Property.
MAKE-WHOLE PREMIUM: with respect to any Fixed Note (including any
Floating Note that becomes a Fixed Note pursuant to the Company's election
to fix the interest rate thereunder in accordance with Section 7.3), a
premium equal to the excess, if any, of the Discounted Value of the Called
Principal of such Fixed Note over the sum of (i) such Called Principal plus
(ii) interest accrued thereon as of (including interest due on) the
Settlement Date with respect to such Called Principal. The Make-Whole
Premium shall in no event be less than zero.
MATERIAL ADVERSE EFFECT: a material adverse effect on the business,
operations, affairs, condition, properties or prospects of the Company, or
the ability of the Company to perform its obligations hereunder or under
the Collateral Agreements.
MATURITY DATE: February 28, 2006 or March 1, 2003, as provided in
Sections 7.4 and 8.1(f) or such earlier date upon which the maturity of
the Notes is accelerated pursuant to Section 14.2.
MOODY'S: Moody's Investors Services, Inc.
MORTGAGED PROPERTIES: the aggregate of all properties pledged,
conveyed and encumbered under or pursuant to the Security Documents.
NET TANGIBLE ASSETS: total consolidated assets of the Company and its
Subsidiaries less consolidated intangible assets of the Company and its
Subsidiaries such as goodwill, patents and similar assets that would be of
an intangible nature in accordance with GAAP.
1997 FIXED-A NOTE: the meaning specified in Section 2.2.
1997 FIXED-B NOTE: the meaning specified in Section 2.2.
1997 FLOATING NOTES: the meaning specified in Section 2.3.
1996 NOTE: the Company's 7.21% Fixed Rate Note in the original
principal amount of $50,000,000 issued to Hancock pursuant to the Original
Note Purchase Agreement.
1997 NOTES: collectively, the 1997 Fixed-A Note, the 1997 Fixed-B
Note and the 1997 Floating Notes.
NOTES: collectively, the 1996 Note, the 1997 Notes and the Additional
Notes, if any.
OFFICERS' CERTIFICATE: a certificate executed by the Chief Financial
Officer of the Company.
ORIGINAL SECURITY DOCUMENTS: the Texas Deed of Trust and Security
Agreement, the Arkansas Mortgage and Security Agreement and the Assignment
of Leases, each dated February 15, 1996, that were executed and delivered
by the Company pursuant to the Original Note Purchase Agreement.
PBGC: the Pension Benefit Guaranty Corporation or any governmental
authority succeeding to any of its functions.
PAYMENT DATE: the first day of each calendar month, but if such day
is not a Business Day, the first Business Day of such month.
PERMITTED EXCEPTIONS: those Liens permitted under the Security
Documents.
PERMITTED INVESTMENTS: (a) direct obligations of the United States,
or of any agency thereof, or obligations guaranteed as to principal and
interest by the United States, or of any agency thereof, in either case
maturing not more than one year from the date of acquisition thereof; (b)
direct obligations issued by any state of the United States or any
political subdivision of any such state or any public instrumentality
thereof maturing within one year from the date of the acquisition thereof
and, at the time of such acquisition, having the highest rating obtainable
from either S&P or Moody's; (c) certificates of deposit issued by any bank
or trust company organized under the laws of the United States or any state
thereof and having capital, surplus and undivided profits of at least
$50,000,000, maturing not more than six months from the date of acquisition
thereof; (d) commercial paper rated A-1 or better or P-1 or better by S&P
or Moody's, respectively, maturing not more than six months from the date
of acquisition thereof; and (e) Eurodollar time deposits having a maturity
of less than six months purchased directly from any such bank (whether such
deposit is with such bank or any other such bank). Notwithstanding the
foregoing, the Company shall be permitted to have collected balances with
First State Bank of Pittsburg, Pittsburg, Texas, in an amount not to exceed
at any time 80% of such Bank's capital base.
PERSON: a corporation, an association, a partnership, an
organization, a business, an individual, a government or political
subdivision thereof or a governmental agency.
PILGRIM'S PRIDE-MEXICO: Pilgrim's Pride S.A. de C.V., a Mexican
corporation and a wholly owned subsidiary of the Company.
PLAN: an "employee pension benefit plan" (as defined in Section 3(2)
of ERISA) that is or has been established or maintained, or to which
contributions are or have been made, by the Company or any of the
Subsidiaries or any Related Person with respect to any of them, or an
employee pension benefit plan as to which the Company or any of the
Subsidiaries or any Related Person with respect to any of them, would be
treated as a contributory sponsor under Section 4069 of ERISA if it were to
be terminated.
POTENTIAL EVENT OF DEFAULT: a default that, with notice or lapse of
time or both, becomes an Event of Default.
PREMIUM: a LIBOR Premium or a Make-Whole Premium, as the case may be.
PROPERTY: any right or interest in or to property of any kind
whatsoever, whether real, personal (including, without limitation, cash) or
mixed and whether tangible or intangible.
PURCHASERS: Hancock and Signature and their respective successors and
assigns.
RECEIPT OF FUNDS: the meaning specified in Section 4.1(d).
REINVESTMENT YIELD: with respect to the Called Principal of any Fixed
Note, the yield to maturity implied by (a) the yields reported, as of 10:00
a.m. (New York City time) on the Business Day next preceding the Settlement
Date with respect to such Called Principal, on the display designated as
"Page 5" on the Telerate Service (or such other display as may replace Page
5 on the Telerate Service) for actively traded U.S. Treasury securities
having a maturity equal to the Remaining Life of such Called Principal as
of such Settlement Date, plus 100 basis points or (b) if such yields shall
not be reported as of such time or the yields reported as of such time
shall not be ascertainable, the Treasury Constant Maturity Series yields
reported, for the latest day for which such yields shall have been so
reported as of the Business Day next preceding the Settlement Date with
respect to such Called Principal, in Federal Reserve Statistical Release
H.15 (519) (or any comparable successor publication) for actively traded
U.S. Treasury securities having a constant maturity equal to the Remaining
Life of such Called Principal as of such Settlement Date, plus 100 basis
points. Such implied yield shall be determined, if necessary, by (x)
converting U.S. Treasury bill quotations to bond-equivalent yields in
accordance with accepted financial practice and (y) interpolating linearly
between reported yields.
RELATED PERSON: as to any Person, either (a) any corporation or trade
or business that is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the Code) as such Person, or
(b) is under common control (within the meaning of Section 414(c) of the
Code) with such Person, or (c) is a member of any affiliated service group
(within the meaning of Section 414(m) of the Code) that includes such
Person, or (d) is otherwise treated as part of the controlled group that
includes such Person (within the meaning of Section 414(o) of the Code).
RELEASE: the meaning specified in Section 11.1.
REMAINING LIFE: with respect to the Called Principal of any Fixed
Note, the number of years (calculated to the nearest one-twelfth year) that
will elapse between the Settlement Date with respect to such Called
Principal and the scheduled due date of such Remaining Scheduled Payment.
REMAINING SCHEDULED PAYMENTS: with respect to the Called Principal of
any Fixed Note, all payments of such Called Principal and interest thereon
that would be due on or after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to
its scheduled due date.
REPORTABLE QUANTITY: the meaning specified in Section 11.1
RESPONSIBLE OFFICER: the Executive President, the Secretary, the
Treasurer, the Chief Executive Officer, the Chief Operating Officer or the
Chief Financial Officer of the Company.
S&P: Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc.
SCHEDULE OF INFORMATION FOR PAYMENT AND NOTICES: the meaning
specified in Article 13.
SECURED DEBT: all indebtedness for borrowed money or evidenced by a
bond, debenture, note or similar evidence of indebtedness, which is secured
by a Lien on any assets of the Company or any Subsidiary or any shares of
stock or Debt of any Subsidiary.
SECURITIES ACT: the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
SECURITY DOCUMENTS: the Original Security Documents and the documents
delivered pursuant to clauses (i), (ii), and (iii) of Section 4.1(d).
SETTLEMENT DATE: with respect to the Called Principal of any Fixed
Note, the date on which such Called Principal is to be prepaid pursuant to
Section 8.2 or is declared to be immediately due and payable pursuant to
Article 14.
SPECIAL COUNSEL: Locke Purnell Rain Harrell (A Professional
Corporation), as special counsel to Purchasers in connection with this
Agreement.
STOCK: all shares, options, warrants, interests, participations or
other equity equivalents (regardless of how designated) of a corporation or
equivalent entity whether voting or nonvoting, including, without
limitation, common stock, preferred stock, or any other "equity security"
(as such term is defined in Rule 3(a)11-1 of the General Rules and
Regulations promulgated by the Commission under the Exchange Act).
SUBORDINATED DEBT: all Debt of the Company that by its terms is
subordinated to any other Debt.
SUBSIDIARY: any corporation or other entity of which more than 50% of
the outstanding voting shares are at the time owned (either alone or
through Subsidiaries or together with Subsidiaries) by the Company or
another Subsidiary.
TOTAL LIABILITIES: total consolidated liabilities of the Company and
its Subsidiaries as shown on its annual audited balance sheet, determined
in accordance with GAAP.
UNFUNDED CURRENT LIABILITY: as to any Plan, the amount, if any, by
which the actuarial present value of the accumulated plan benefits under
the Plan as of the close of its most recent plan year, determined in
accordance with Statement of Financial Accounting Standards No. 35, based
upon the actuarial assumptions used by the Plan's actuary in the most
recent annual valuation of the Plan, exceeds the fair market value of the
assets allocable thereto, determined in accordance with Section 412 of the
Code.
WELFARE PLAN: an employee welfare benefit plan (as defined in
Section 3(1) of ERISA) or a group health plan (as defined in
Section 4980B(g)(2) of the Code) which is or has been established or
maintained, or to which contributions are or have been made, by the Company
or any of the Subsidiaries or any Related Person with respect to any of
them.
.. MISCELLANEOUS... MISCELLANEOUS." References herein to an
"Exhibit" or "Schedule" are, unless otherwise specified, to one of the
exhibits or schedules attached to this Agreement, and references herein to
a "Section" are, unless otherwise specified, to one of the Sections of this
Agreement. As used in this Agreement, the words "herein," "hereof,"
"hereby," and "hereunder" refer to this Agreement as a whole and not to any
particular Section or subdivision of this Agreement. References herein to
masculine or neuter are construed to include masculine, feminine or neuter,
where applicable, and references herein to singular include plural and to
plural include singular, where applicable.
ARTICLE .."
THE NOTES
.. ISSUANCE OF 1996 NOTE... ISSUANCE OF 1996 NOTE." The Company
previously issued and sold to Hancock $50,000,000 aggregate principal
amount of its 7.21% Fixed Rate Note pursuant to the Original Note Purchase
Agreement. The 1996 Note shall continue to remain outstanding in
accordance with the terms of this Agreement and shall be payable as set
forth in Articles 7 and 8 hereof.
.. AUTHORIZATION OF 1997 FIXED-A NOTE AND 1997 FIXED-B NOTE...
AUTHORIZATION OF 1997 FIXED-A NOTE AND 1997 FIXED-B NOTE." In connection
with the Green Acre Acquisition, the Company assumed from Green Acre Foods,
Inc. the Green Acre Notes. The Company has authorized the issue and sale
of (i) $5,624,071.72 aggregate principal amount of its 9.39% Fixed Rate
Note (together with all notes issued in substitution or exchange therefor
pursuant to Article 12, the "1997 Fixed-A Note") in modification and
renewal of (and not a novation of) the Green Acre A Note and
(ii) $1,614,122.43 aggregate principal amount of its 9.45% Fixed Rate Note
(together with all notes issued in substitution or exchange therefor
pursuant to Article 12, (the "1997 Fixed-B Note") in modification and
renewal of (and not a novation of) the Green Acre B Note. Each of the 1997
Fixed-A Note and the 1997 Fixed-B Note will bear interest on the unpaid
principal balance thereof from the date of the Note as prescribed herein,
payable as set forth in Articles 7 and 8, will mature on February 28, 2006
and will be substantially in the form of EXHIBIT A-1.
.. AUTHORIZATION OF 1997 FLOATING NOTES... AUTHORIZATION OF 1997
FLOATING NOTES." The Company has authorized the issue and sale of
$12,761,805 aggregate principal amount of its Floating Rate Notes (together
with all notes issued in substitution or exchange therefor pursuant to
Article 12, the "1997 Floating Notes") pursuant to this Agreement. The
1997 Floating Notes will bear interest on the unpaid principal balance
thereof from the date of such Notes as prescribed herein, payable as set
forth in Articles 7 and 8, will mature on February 28, 2006 and will be
substantially in the form of EXHIBIT A-2.
.. SALE AND PURCHASE OF 1997 NOTES... SALE AND PURCHASE OF 1997
NOTES." The Company will issue and sell to Purchasers and, subject to the
terms and conditions hereof, at the Closing provided for in Article 3,
(i) Hancock will accept the 1997 Fixed-A Note and 1997 Fixed-B Note in
modification and renewal of the Green Acre Notes and (ii) Purchasers will
purchase from the Company, $12,761,805 aggregate principal amount of the
1997 Floating Notes in the proportions indicated on SCHEDULE I attached
hereto.
.. SALE AND PURCHASE OF ADDITIONAL NOTES... SALE AND PURCHASE OF
ADDITIONAL NOTES."
() The Company has authorized the issue and sale from time to
time of up to an additional $15,000,000 of its notes, consisting of
fixed rate notes (together with all notes issued in substitution or
exchange therefor pursuant to Article 12, the "Additional Fixed
Notes") and floating rate notes (together with all notes issued in
substitution or exchange therefor pursuant to Article 12, the
"Additional Floating Notes") pursuant to this Agreement. Each
Additional Note will be in the amount of $5,000,000 (or at Purchasers'
option, such smaller denominations that in the aggregate equal
$5,000,000), will bear interest on the unpaid principal balance
thereof from the date of the Note as prescribed herein, payable as set
forth in Articles 7 and 8, will mature on February 28, 2006 and will
be substantially in the form of EXHIBIT A-1 (in the case of Additional
Fixed Notes) or EXHIBIT A-2 (in the case of Additional Floating
Notes).
() The Company shall give Purchasers not less than ten (10)
Business Days prior written notice of its intent to issue and sell to
Purchasers an Additional Note, which at the Company's option may be
either an Additional Fixed Note or an Additional Floating Note. Each
Additional Note shall be in the amount of $5,000,000 (or allocated
between Purchasers as they direct). Each Additional Note shall be
issued and sold prior to April 1, 1999.
ARTICLE .."
CLOSING
The closing of the sale of the 1997 Notes to Purchasers (the
"Closing") shall take place at the offices of Locke Purnell Rain Harrell (A
Professional Corporation), 2200 Ross Avenue, Suite 2200, Dallas, Texas
75201, at 10:00 a.m. Dallas, Texas time (with funding to occur no later
than 12:00 p.m. Eastern time), on such date as the parties may mutually
agree (the "Closing Date"). At the Closing, the Company will deliver to
each Purchaser the 1997 Notes in the form of a single Note or Notes as
prescribed by each such Purchaser, dated the Closing Date and registered in
such Purchaser's name (or the name of its nominee), against delivery by
such Purchaser to the Company of immediately available funds in the
aggregate amount of the purchase price therefor in the case of the 1997
Floating Notes.
ARTICLE .."
CONDITIONS TO CLOSING
.. CONDITIONS TO PURCHASE OF 1997 NOTES.. CONDITIONS TO PURCHASE OF
1997 NOTES". Hancock's obligation to accept the 1997 Fixed-A Note and the
1997 Fixed-B Note in modification and renewal of the Green Acre Notes and
each Purchaser's obligation to purchase the 1997 Floating Notes is subject
to the fulfillment to such Purchaser's satisfaction, at or prior to the
Closing, of the following conditions:
() OPINION OF COUNSEL. Purchaser shall have received an
opinion, dated the Closing Date and satisfactory in form and substance
to Purchaser, from (i) Godwin & Carlton, A Professional Corporation,
counsel for the Company, and (ii) Special Counsel covering such
matters relevant to the transactions contemplated hereby as Purchaser
may reasonably request.
() REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties of the Company contained in this
Agreement shall be true and correct at the time of Closing as if made
at and as of such time, and the Company shall have complied with all
agreements and covenants hereunder required to be performed by the
Company on or prior to the time of Closing.
() NOTES. The 1997 Notes (with appropriate insertions) to be
issued to and accepted by Purchaser, shall have been duly executed by
the Company and delivered to Purchaser and shall be in full force and
effect and no term or condition thereof shall have been amended,
modified or waived, except with the prior written consent of Purchaser
and the Company.
() COLLATERAL AGREEMENTS.
() The Texas Deed of Trust and Security Agreement
substantially in the form of EXHIBIT B shall have been duly
executed and delivered by the Company for the benefit of
Purchaser and the registered holders from time to time of the
Notes, the beneficiary named in the Security Documents and shall
be in full force and effect.
() Amendments to the Original Security Documents (in which
the 1997 Notes and the Additional Notes are added as additional
obligations to be secured under the Original Security Documents)
shall have been duly executed and delivered by the Company for
the benefit of Purchaser and the registered holders from time to
time of the Notes and shall be in full force and effect.
() UCC-1 Financing Statements (the "Financing Statements")
shall have been duly executed and delivered by the Company.
() A Receipt of Funds, substantially in the form of
EXHIBIT C (the "Receipt of Funds"), shall have been duly executed
and delivered by the Company and shall be in full force and
effect.
() A certificate, substantially in the form of EXHIBIT D
(the "Certificate"), shall have been duly executed and delivered
by the Company and shall be in full force and effect.
() RECORDINGS, FILINGS AND PRIORITY. Except as waived in
writing by Purchaser, all recordings and filings of or with respect to
the Security Documents and the Financing Statements shall have been
duly made and all other instruments relating thereto shall have been
duly executed, delivered and recorded or filed, in all such places as
may be required by law, or as may be deemed necessary or desirable by
Special Counsel, in order to establish, protect and perfect as of the
Closing Date the interests and rights (and the priority thereof)
created or intended to be created thereby. The Lien of the Security
Documents and Financing Statements shall constitute a first Lien of
record on and a first security interest of record in the Mortgaged
Properties, subject only to the Permitted Exceptions.
() TITLE INSURANCE; SURVEY. Purchaser shall have received
(i) a mortgagee policy of title insurance with respect to the
Mortgaged Properties in the form promulgated in the State of Texas,
issued by a title underwriter acceptable to Purchaser, and containing
affirmative coverages and reinsurance arrangements and agreements
satisfactory in form and substance to Purchaser and Special Counsel,
insuring in the amount of approximately $35,000,000, Purchaser's
interest under the Security Documents as the holder of a valid first
lien of record on the Mortgaged Properties or, in the case of leased
properties, a valid first Lien on the Company's leasehold interest,
subject only to the Permitted Exceptions, containing no exception as
to creditors' rights, and containing affirmative zoning endorsements,
affirmative coverage as to claims and liens of mechanics and
materialmen, affirmative endorsements as to claims relating to the
environmental conditions of the Mortgaged Properties, and such other
affirmative conditions and coverages as are available and as Purchaser
may request, all satisfactory in substance and form to Purchaser and
Special Counsel; (ii) reports of Uniform Commercial Code searches in
the Uniform Commercial Code central filing office of the Secretary of
State of Texas issued by the State of Texas, and such other evidence
concerning Uniform Commercial Code filings as is requested by
Purchaser, in each case reasonably satisfactory in form and substance
to Purchaser and Special Counsel; (iii) a report of a tax and judgment
lien search in the recording district of each county or similar
jurisdiction where each of the Mortgaged Properties is located,
satisfactory in form and substance to Purchaser and Special Counsel;
and (iv) surveys of each part of the Mortgaged Properties as Purchaser
shall approve in accordance with ALTA/ACSM Class A standards and
certificates.
() COMPLIANCE WITH SECURITIES LAWS. The offering and sale of
the 1997 Notes to be issued at the Closing shall have complied with
all applicable requirements of federal and state securities laws, and
Purchaser shall have received evidence thereof reasonably satisfactory
to Purchaser and Special Counsel.
() PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated hereby
and all documents and instruments incident to such transactions shall
be reasonably satisfactory to Purchaser and Special Counsel, and
Purchaser and Special Counsel shall have received an original executed
counterpart of this Agreement, and all such other counterpart
originals or certified or other copies of such documents as Purchaser
or Special Counsel may reasonably request.
() NO EVENT OF DEFAULT OR POTENTIAL EVENT OF DEFAULT. There
shall not exist and, upon consummation of the transactions
contemplated hereby, there shall not exist any Event of Default or
Potential Event of Default.
() PAYMENT OF CLOSING FEES. The Company shall have paid the
reasonable fees, expenses and disbursements of Special Counsel and
special local counsel that are reflected in statements of such counsel
rendered prior to or on the Closing Date, without limitation on the
Company's obligation to pay any additional fees and disbursements of
all such counsel pursuant to Article 15.
() ORIGINAL DOCUMENTS. Purchaser shall have received an
original executed counterpart of the Notes, the Security Documents,
the Financing Statements, the Receipt of Funds, the Certificate, and
the title insurance policies and surveys referred to in
Section 4.1(f).
() LOAN TO APPRAISED VALUES. The Appraised Value of the
Mortgaged Properties shall be not less than $114,000,000.
() INSURANCE. Purchaser shall have received certificates
reasonably satisfactory to Purchaser as to, or copies of, all
insurance policies required by the Security Documents.
() DUE DILIGENCE. The results of any due diligence review of
the Company and the Subsidiaries and their respective Properties,
businesses, operations, affairs, results of operations, financial
condition and prospects and the proposed organizational, legal and tax
aspects of the proposed transactions, performed by or on behalf of
Purchaser shall be reasonably satisfactory to Purchaser and Special
Counsel.
() ENVIRONMENTAL MATTERS. The Company shall have delivered to
Purchaser a Phase I environmental assessment (either recently
completed at the request of Purchaser or previously completed for the
Company or to be completed together with updated reports with respect
thereto), addressed to Purchaser, in form and substance acceptable to
Purchaser and prepared by Law Engineering, Inc. (the "Environmental
Certificate"), to the effect that, except as otherwise disclosed in
writing, (i) all current activities at the Mortgaged Properties that
are acquired in the Green Acre Acquisition comply in all respects with
applicable requirements of any governmental authority relating to air
or water pollution, hazardous substance or waste management and
disposal, or other Environmental Laws, and (ii) none of the Mortgaged
Properties that are acquired in the Green Acre Acquisition is impacted
by Hazardous Substances in any respect that would require
investigation, reporting, monitoring, cleanup or other response under
current law.
() GUARANTY. Purchaser shall have received a Guaranty
Agreement substantially in the form of EXHIBIT E, executed by
Lonnie A. Pilgrim with respect to the Company's obligations under the
Notes.
.. CONDITIONS TO PURCHASE OF ADDITIONAL NOTES.. CONDITIONS TO
PURCHASE OF ADDITIONAL NOTES". Each Purchaser's obligation to purchase
each Additional Note is subject to the fulfillment to Purchaser's
satisfaction prior to each such purchase of an Additional Note, of the
following conditions:
() REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties of the Company contained in this
Agreement shall be true and correct at the time of the purchase of
each Additional Note, as if made at and as of such time, and the
Company shall have complied with all agreements and covenants
hereunder required to be performed at or prior to the purchase of such
Additional Note.
() NOTES. The Additional Note, in the form and substance of
EXHIBIT A-1 (in the case of an Additional Fixed Note) or EXHIBIT A-2
(in the case of an Additional Floating Note) (with appropriate
insertions) to be issued to and accepted by Purchaser, shall have been
duly executed and delivered to Purchaser by the Company and shall be
in full force and effect and no term or condition thereof shall have
been amended, modified or waived, except with the prior written
consent of Purchaser and the Company.
() COMPLIANCE WITH SECURITIES LAWS. The offering and sale of
each Additional Note to be issued shall have complied with all
applicable requirements of federal and state securities laws, and
Purchaser shall have received evidence thereof reasonably satisfactory
to Purchaser and Special Counsel.
() NO EVENT OF DEFAULT OR POTENTIAL EVENT OF DEFAULT. There
shall not exist and, upon consummation of the transactions
contemplated hereby, there shall not exist any Event of Default or
Potential Event of Default.
() EVIDENCE OF EXPANSION EXPENDITURES. The Company shall have
provided documentation satisfactory to Purchaser evidencing
expenditures made by the Company in an aggregate amount of not less
than $5,000,000 (exclusive of expenditures made with respect to
previously issued Notes) for expansion of the Company's facilities.
ARTICLE .."
REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY
The Company represents and warrants to Purchasers as follows:
.. ORGANIZATION, STANDING, ETC.. ORGANIZATION, STANDING, ETC". The
Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all requisite
power and authority (i) to own and operate its properties, (ii) to carry on
its business as now conducted and as proposed to be conducted, (iii) to
enter into this Agreement, the Security Documents and each of the other
Collateral Agreements, (iv) to issue and sell the Notes, and (v) to carry
out the terms of this Agreement, the Notes, the Security Documents and each
of the other Collateral Agreements. This Agreement, the Notes, the
Security Documents and the other Collateral Agreements have been duly
executed and delivered and are valid and binding agreements of the Company,
enforceable in accordance with their terms, except as enforceability may be
subject to and limited by applicable principles of equity and by
bankruptcy, reorganization, moratorium, insolvency or other similar laws
from time-to-time in effect affecting the enforcement of creditors' rights
generally.
.. QUALIFICATION... QUALIFICATION." The Company is duly qualified
and in good standing as a foreign corporation authorized to do business in
each jurisdiction in which the nature of its activities or the character of
the properties it owns or leases makes such qualification necessary. Set
forth on SCHEDULE 5.2 is a list of each jurisdiction in which the Company
owns Property or otherwise conducts business, other than those
jurisdictions where the failure to qualify would not have a Material
Adverse Effect.
.. BUSINESS AND FINANCIAL STATEMENTS... BUSINESS AND FINANCIAL
STATEMENTS." The Company has delivered to Purchasers true, complete and
correct copies of the Company's audited consolidated financial statements
for the Fiscal Year ended September 30, 1996, and the unaudited financial
statements for the three months ended December 30, 1996 (collectively, the
"Financial Statements"). The Financial Statements have been prepared in
accordance with GAAP (except that the unaudited financial statements
contain no footnotes) applied on a consistent basis throughout the periods
specified and present fairly the historical financial positions of the
Company as of the respective dates and for the respective periods
specified.
.. ADVERSE CHANGES... ADVERSE CHANGES." There has been no Material
Adverse Effect on the Company since September 30, 1996.
.. TAX RETURNS AND PAYMENTS... TAX RETURNS AND PAYMENTS." The
Company is a corporation subject to United States federal income taxation.
The Company has timely and accurately filed all tax returns required by law
to be filed by it and has paid all taxes, assessments and other
governmental charges levied upon it or any of its properties, assets,
income or franchises that are due and payable, other than those presently
being contested in good faith by appropriate proceedings diligently
conducted for which such reserves and other appropriate provision as are
required by GAAP have been made. There are no material tax Liens upon any
of the assets of the Company except for statutory liens in respect of taxes
or assessments the payment of which is not yet delinquent. If the Company
is contesting any such tax or assessment in accordance with this
Section 5.5, the Company has disclosed to Purchasers, in writing, the
nature and extent of such contest.
.. DEBT... DEBT." Other than the Notes and the indebtedness
disclosed in the Financial Statements or as listed on SCHEDULE 5.6, the
Company has no secured or unsecured Debt outstanding. Other than as
provided in this Agreement and the Collateral Agreements, or in the
instruments or agreements listed on SCHEDULE 5.6, no instrument or
agreement applicable to or binding on the Company contains any restrictions
on the incurrence by the Company of any Debt.
.. TITLE TO PROPERTIES AND ASSETS; LIENS... TITLE TO PROPERTIES AND
ASSETS; LIENS." The Company has good and marketable fee title to all the
real property purported to be owned by it and good and marketable title to
all other property and assets purported to be owned by it, free and clear
of all Liens, except for Liens and other matters that constitute Permitted
Exceptions. At the time of the Closing and upon giving effect to the
transactions contemplated hereby, and except for the Permitted Exceptions,
(a) no currently effective financing statement under the Uniform Commercial
Code that names the Company as debtor or lessee will be on file in any
jurisdiction in which the Company owns or leases real or personal property
or in which the inventory of the Company is located or in any other
jurisdiction, (b) neither the Company nor any Subsidiary has signed any
currently effective financing statement or any currently effective security
agreement authorizing any secured party thereunder to file any such
financing statement, except (i) as required to perfect the Liens created by
the Collateral Agreements, (ii) as listed on SCHEDULE 5.7, or (iii) as
evidenced by any Permitted Exception, and (c) the personal property
comprising any portion of the Mortgaged Properties is free and clear of any
and all purchase money security interests and other Liens.
.. LITIGATION... LITIGATION." Except as set forth on SCHEDULE 5.8,
there is no action, proceeding or investigation pending or, to the best
knowledge of the Company, threatened (or any basis therefor known to the
Company) against the Company or any of its Subsidiaries or any of their
respective Properties which is not adequately covered by insurance, which
if adversely determined, could have a Material Adverse Effect.
.. COMPLIANCE WITH COLLATERAL AGREEMENTS... COMPLIANCE WITH
COLLATERAL AGREEMENTS." The Company has performed and complied in all
material respects with every term, covenant, condition and provision of the
Collateral Agreements to be performed or complied with by the Company on or
prior to the date hereof, every representation or warranty of the Company
contained in the Collateral Agreements is true and correct in all material
respects on and as of the date hereof, and no default or Event of Default
(as any such term may be defined in the Collateral Agreements) has occurred
and is continuing (without regard to any applicable cure period) under the
Collateral Agreements.
.. COMPLIANCE WITH OTHER INSTRUMENTS... COMPLIANCE WITH OTHER
INSTRUMENTS." The Company (a) is not in violation of any term of any
agreement or instrument to which it is a party or by which it is bound, or
of any applicable law, ordinance, rule or regulation of any governmental
authority, or of any applicable order, judgment or decree of any court,
arbitrator or governmental authority (including, without limitation, any
such law, ordinance, rule, regulation, order, judgment or decree relating
to environmental protection or pollution control, occupational health and
safety standards and controls, consumer protection or equal employment
practice requirements), the consequence of any of which violations would,
with reasonable probability, result in a Material Adverse Effect; and (b)
is not in violation of any term of its Certificate of Incorporation or
Bylaws. Neither the execution, delivery and performance of this Agreement,
any Collateral Agreement, or the Notes nor the consummation of the
transactions contemplated hereby or thereby will result in any violation of
or be in conflict with or constitute a default under any such term or
result in the creation of (or impose any obligation on the Company to
create) any Lien upon any of the properties of the Company pursuant to any
such term. There are no such terms in the aforementioned documents that,
either in any individual case or in the aggregate, materially and adversely
affect the business, operations, affairs, condition or properties of the
Company, including the Mortgaged Properties.
.. GOVERNMENTAL CONSENTS... GOVERNMENTAL CONSENTS." Other than
those that have been duly obtained and are in full force and effect (copies
of which have been delivered to Purchaser or Special Counsel) and any
filings contemplated by the Security Documents and the Financing Statements
(which filings will be made promptly after Closing), no consent, approval
or authorization of, or declaration or filing with, any governmental
authority on the part of the Company is currently required for the valid
execution and delivery of this Agreement or any Collateral Agreement, or
the consummation of the transactions contemplated hereby or thereby, or the
valid offer, issue, sale and delivery of the Notes pursuant to this
Agreement.
.. PERMITS AND LICENSES... PERMITS AND LICENSES." Except for any
failure to obtain or recover permits and licenses that could not reasonably
be expected to have a Material Adverse Effect, the Company has all permits
and licenses necessary for the operation of its business as presently
conducted.
.. FEDERAL RESERVE REGULATIONS... FEDERAL RESERVE REGULATIONS." The
Company will not use any of the proceeds of the sale of the Notes for the
purpose, whether immediate, incidental or ultimate, of buying any "margin
stock" or of maintaining, reducing or retiring any indebtedness originally
incurred to purchase a stock that is currently any "margin stock," or for
any other purpose that might constitute this transaction a "purpose
credit," in each case within the meaning of Regulation G of the Board of
Governors of the Federal Reserve System (12 C.F.R. 207, as amended), or
otherwise take or permit to be taken any action that would involve a
violation of such Regulation G or of Regulation T (12 C.F.R. 220, as
amended), Regulation U (12 C.F.R. 221, as amended) or Regulation X (12
C.F.R. 224, as amended) or any other regulation of such board. No
indebtedness being reduced or retired out of the proceeds of the sale of
the Notes was incurred for the purpose of purchasing or carrying any such
"margin stock," and the Company does not own and has no present intention
of acquiring any such "margin stock."
.. STATUS UNDER CERTAIN FEDERAL STATUTES... STATUS UNDER CERTAIN
FEDERAL STATUTES." The Company is not (a) a "holding company" or a
"subsidiary company" of a "holding company," or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding company," as
such terms are defined in the Public Utility Holding Company Act of 1935,
as amended, (b) a "public utility," as such term is defined in the Federal
Power Act, as amended, (c) an "investment company," or a company
"controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended, or (d) a "rail carrier," or a
"person controlled by or affiliated with a rail carrier," within the
meaning of Title 49, U.S.C., or a "carrier" to which 49 U.S.C.
' 11301(b)(1) is applicable.
.. COMPLIANCE WITH ERISA... COMPLIANCE WITH ERISA."
() Each Plan that is or has been maintained for employees of
the Company or any of the Subsidiaries, or any Related Person with
respect to any of them, or to which the Company or any of the
Subsidiaries, or any Related Person with respect to any of them, has
made or was required to make contributions has been administered in
material compliance with its terms and all applicable statutes
(including but not limited to ERISA and the Code, and all regulations
and interpretations thereunder). No reportable event (as defined in
Section 4043 of ERISA and regulations issued thereunder) has occurred
with respect to any Plan that is a defined benefit plan (as defined in
Section 3(35) of ERISA and regulations issued thereunder) and subject
to Title IV of ERISA ("Title IV Plan"). No material liability to the
PBGC has been incurred, or is expected to be incurred, by the Company
or any of the Subsidiaries or any Related Person with respect to any
Title IV Plan. The PBGC has not instituted any proceedings, and there
exists no event or condition that would constitute grounds for
institution of proceedings, against the Company, the Subsidiaries or
any Related Person by the PBGC to terminate any Title IV Plan under
Section 4042 of ERISA. No case, matter or action with respect to any
Plan, pursuant to any federal or state law, has been brought, is
pending or is threatened, against the Company or any of the
Subsidiaries or any Related Person with respect to any of them, or any
officer, director or employee of any of them, or any fiduciary of any
Plan.
() No Title IV Plan had an accumulated funding deficiency (as
such term is defined in Section 302 of ERISA and regulations issued
thereunder) as of the last day of the most recent plan year of such
Plan ended prior to the date hereof. All contributions payable to
each qualified Plan of the Company or any of the Subsidiaries (that is
an employee pension benefit plan as defined in Section 3(2) of ERISA
and regulations issued thereunder and that is intended to meet the
qualification requirements of the Code ("Qualified Plan")), for all
benefits earned or other liabilities accrued through the end of the
latest plan year for such Qualified Plan, determined in accordance
with the terms and conditions of such Qualified Plan, ERISA and the
Code, have been paid or otherwise provided for, and to the extent
unpaid are reflected in the pro forma consolidated balance sheet of
the Company. No waiver of the minimum funding standard requirements
of Section 302 of ERISA and Section 412 of the Code has been obtained,
applied for or is contemplated with respect to any Title IV Plan.
() None of the Company or any of the Subsidiaries nor any
Related Person with respect to any of them, is or has been a
contributor to any multi-employer plan within the meaning of
Section 3(37) of ERISA and regulations issued thereunder.
() The execution and delivery of this Agreement and the
Collateral Agreements, the issue of the Notes hereunder and the
consummation of the transactions contemplated hereby will not involve
any transaction that is subject to the prohibitions of Section 406 of
ERISA or in connection with which a tax would be imposed pursuant to
Section 4975 of the Code.
() No Lien imposed under Section 412(n) of the Code exists in
favor of any Plan upon any property belonging to the Company or any of
the Subsidiaries, or any Related Person of any of them.
.. DISCLOSURE... DISCLOSURE." Neither this Agreement, the Financial
Statements nor any other document, certificate or instrument delivered to
Purchasers by or on behalf of the Company in connection with the
transactions contemplated hereby, when all such documents, certificates and
instruments are taken as a whole, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make
the statements contained herein or therein not misleading. There is no
fact actually known to the Company that may have a Material Adverse Effect
that has not been set forth herein or in the other documents, certificates
and instruments delivered to Purchasers by or on behalf of the Company
specifically for use in connection with the transactions contemplated
hereby.
.. USE OF PROCEEDS... USE OF PROCEEDS." The Company will apply the
proceeds of the sale of the 1997-C Notes to consummate the Green Acre
Acquisition and for general corporate purposes and will use the proceeds of
the sale of Additional Notes, if any, for expansion of its facilities.
.. SOLVENCY OF THE COMPANY... SOLVENCY OF THE COMPANY." The fair
saleable value of the business and assets of the Company, upon giving
effect to the transactions contemplated hereby, will be in excess of the
amount that will be required to pay the probable liabilities of the Company
(including contingent, subordinated, unmatured and unliquidated
liabilities) on existing debts as they may become absolute and matured.
The Company, upon giving effect to the transactions contemplated hereby,
will not be engaged in any business or transaction, or about to engage in
any business or transaction, for which the Company has an unreasonably
small capital, and the Company has no intent (a) to hinder, delay or
defraud any entity to which it is, or will become, on or after the Closing
Date, indebted, or (b) to incur debts that would be beyond its ability to
pay as they mature.
.. ENVIRONMENTAL MATTERS.. ENVIRONMENTAL MATTERS". The Company has
been complying with, and is in compliance with, all Environmental Laws in
each jurisdiction where it is presently doing business except for failures
to comply which would not have a Material Adverse Effect. To the best
knowledge of the Company, none of the Mortgaged Properties is impacted by
Hazardous Substances in any respect that would require investigation,
reporting, monitoring, cleanup or other response under any Environmental
Law.
.. BROKERS... BROKERS." The Company represents that it has not
dealt with any brokers or finders in connection with the transactions
contemplated by this Agreement.
.. NO DEFAULTS... NO DEFAULTS." At the time of the Closing, there
exists no Event of Default or Potential Event of Default.
ARTICLE .."
REPRESENTATIONS AND WARRANTIES RELATING
TO SECURITY FOR THE NOTES
The Company represents and warrants to Purchasers as follows:
.. EASEMENTS AND UTILITY SERVICES... EASEMENTS AND UTILITY
SERVICES." The Company has all easements and other rights, including those
for use, maintenance, repair and replacement of and access to structures,
facilities or space for support, mechanical systems, roads, utilities
(including electricity, gas, water, sewer disposal, telephone and CATV) and
any other private or municipal improvements, services and facilities
necessary or appropriate to the proper operation, repair, maintenance,
occupancy or use of the Mortgaged Properties as currently being and
proposed to be used.
.. CONTRACTS... CONTRACTS." There are no service (other than
utility) or construction contracts currently outstanding relating to any
part of the Mortgaged Properties providing for payment in excess of
$100,000 per year, per contract (but not in excess of $1,000,000 in the
aggregate), except those contracts that are set forth on SCHEDULE 6.2 and
have been delivered to Purchaser, nor have any labor or materials been
supplied to the Mortgaged Properties, other than in the ordinary course of
business, that have not been fully paid for.
.. PERMITS... PERMITS." There are no permits, licenses,
certificates or approvals that are required to occupy or operate (except as
specified in Section 5.8) any part of the Mortgaged Properties as presently
operated, except those permits, licenses, certificates and approvals that
are set forth on SCHEDULE 6.3 and have been delivered to Purchasers.
.. REPORTS OF ENGINEERS... REPORTS OF ENGINEERS." The Company does
not possess and is not aware of any reports of engineers, architects or
other Persons relating to any part of the Mortgaged Properties, except
those reports that are set forth on SCHEDULE 6.4 and have been delivered to
Purchasers.
.. PLANS AND SPECIFICATIONS... PLANS AND SPECIFICATIONS." The
Company does not possess and is not aware of any plans and specifications
relating to any part of the Mortgaged Properties, except those plans and
specifications that are set forth on SCHEDULE 6.5 and that will be
delivered to Purchasers upon request.
.. SOIL REPORTS... SOIL REPORTS." There are no soil reports in the
possession of the Company or its Affiliates relating to any part of the
Mortgaged Properties.
.. ZONING... ZONING." The Mortgaged Properties that constitutes
real property are zoned in the manner that permits the use of the Mortgaged
Properties as currently being and proposed to be used by the Company and
its Subsidiaries.
.. CERTIFICATES OF OCCUPANCY... CERTIFICATES OF OCCUPANCY." A
certificate of occupancy or similar permit has been issued by the
appropriate governmental authority for each of the Mortgaged Properties
that constitutes improvements to real property that permits the occupancy
of the Mortgaged Properties as currently or proposed to be occupied by the
Company.
ARTICLE .."
INTEREST RATE PROVISIONS
.. INTEREST ON FIXED NOTES... INTEREST ON FIXED NOTES."
() Interest on the outstanding principal balance of the 1996
Note shall accrue at the lesser of (i) 7.21% per annum or (ii) the
Highest Lawful Rate, and shall be due and payable in accordance with
Section 8.1.
() Interest on the outstanding principal balance of the 1997
Fixed-A Note shall accrue at the lesser of (i) 9.39% per annum or
(ii) the Highest Lawful Rate, and shall be due and payable in
accordance with Section 8.1.
() Interest on the outstanding principal balance of the 1997
Fixed-B Note shall accrue at the lesser of (i) 9.45% per annum or
(ii) the Highest Lawful Rate, and shall be due and payable in
accordance with Section 8.1.
() In the event the Company elects to issue an Additional Fixed
Note pursuant to Section 2.5, not more than thirty (30) nor less than
ten (10) days prior to the issuance of such Additional Fixed Note, the
Company shall give written notice thereof to Purchasers, at which
point the parties shall determine the interest rate applicable to such
Additional Fixed Note. Interest on the outstanding principal balance
of such Additional Fixed Note shall accrue at the lesser of (i) the
then-prevailing Reinvestment Yield plus 100 basis points or (ii) the
Highest Lawful Rate, and shall be due and payable in accordance with
Section 8.1.
() Interest on the unpaid principal of the Fixed Notes shall be
calculated on the basis of the actual days elapsed in a year
consisting of 360 days.
.. INTEREST ON FLOATING NOTES.. INTEREST ON FLOATING NOTES".
() Interest on the outstanding principal balance of the Floating
Notes shall accrue at an interest rate per annum during the applicable
Interest Period equal to the lesser of (i) the LIBOR Rate plus 2% or
(ii) the Highest Lawful Rate. Interest on the Floating Notes accrued
during a calendar month shall be due and payable in accordance with
Section 8.1. Interest on the unpaid principal of the Floating Notes
shall be calculated on the basis of the actual days elapsed in a year
consisting of 360 days.
() Not more than ten days nor less than five days prior to
Closing and during each Interest Rate Set Window, the Company shall
notify Purchasers of its selection of the duration of the immediately
following Interest Period with respect to the Floating Notes then
outstanding, which may be three months, six months or one year (the
"Interest Option Notice"). The duration of the Interest Period
selected shall be the same for all Floating Notes with the same date
of issuance. The Interest Option Notice must be in writing and may be
sent via telecopy, with the originally executed copy delivered to
Purchasers immediately thereafter. The LIBOR Rate for the following
Interest Period shall be the applicable rate for a period of
corresponding duration announced in THE WALL STREET JOURNAL (Northeast
Edition) on the first Business Day following receipt of the Interest
Option Notice.
() In connection with determining the applicable LIBOR Rate for
the following Interest Period, Purchasers shall calculate the
principal and interest payments due on the Floating Notes during such
Interest Period, as required under Section 8.1(d) or (e), and shall
provide such amount to the Company.
.. INTEREST RATE LOCK... INTEREST RATE LOCK." With respect to the
Floating Notes, during any Interest Rate Set Window prior to March 1, 2003,
the Company shall have the option to permanently set the interest rate on
the Floating Notes. The Company shall provide notice to Purchasers of its
desire to set the rate and Purchasers shall promptly thereafter notify the
Company of the then prevailing fixed interest rates (based on Purchasers'
interest rate spreads and the average remaining life of the Floating Notes)
(the "Fixed Rate"). If the Company elects to have the Floating Notes
accrue interest at the Fixed Rate, the Company shall so notify Purchasers
in the Interest Option Notice (which election shall be irrevocable) and
immediately following the then current Interest Period, the Floating Notes
shall thereafter accrue interest at the Fixed Rate, and the Floating Notes
shall for all purposes be deemed Fixed Notes. Any such election shall be
with respect to any or all of the then outstanding Floating Notes and shall
be made in full and not in part. Purchasers shall recompute the principal
and interest payments required under Section 8.1(d) or (e) based on the
outstanding principal balance on the Floating Notes and the Fixed Rate, and
the Company shall thereafter make principal and interest payments on such
Notes equal to such amount.
.. RESETTING OF INTEREST RATES.. RESETTING OF INTEREST RATES".
During the period of time not more than ten (10) days nor less than five
(5) days prior to March 1, 2003, provided that (i) no Event of Default or
Potential Event of Default has occurred and is continuing, and
(ii) Purchasers own the Notes at such time, Purchasers and the Company
shall in good faith attempt to reset the interest rate on any or all of the
Fixed Notes (including those Floating Notes for which a Fixed Rate has been
set in accordance with Section 7.3) and the interest rate spread on the
Floating Notes. The parties shall consider Purchasers' then-current
interest rate spreads (based on average remaining life of the Notes), the
then-current financial condition of the Company and then-current market
conditions when attempting to agree upon new rates. If the parties agree
upon new rates, they shall promptly execute an amendment to this Agreement
and the Company shall execute and deliver to Purchasers new notes
reflecting the new rates. In the event that the parties are unable to
reasonably agree upon new rates for any or all of the Fixed Notes or the
spread on the Floating Notes by March 1, 2003, (i) such Fixed Notes for
which a new rate is not agreed upon will become immediately due and payable
and (ii) the Floating Notes to the extent a new spread is not agreed to
will become due and payable at the conclusion of the then-existing Interest
Period, and the Company shall be required to pay all principal and accrued
interest thereon on such date. If the Company is obligated to prepay any
of the Fixed Notes or Floating Notes pursuant to this Section 7.4, no Make-
Whole Premium or LIBOR Premium, as the case may be, shall be due and owing
on such Fixed Notes or Floating Notes that are prepaid on March 1, 2003 (or
at the conclusion of the Interest Period, as provided in this Section 7.4).
Purchasers shall have no liability to the Company in the event the parties
are unable to agree upon new rates pursuant to this Section 7.4.
.. PAST DUE PAYMENTS.. PAST DUE PAYMENTS". All payments of
principal and, to the extent permitted by law, the applicable Premium (if
any) and interest on or in respect of any Note or this Agreement that are
not made when due shall bear interest at the Default Rate from the date due
and payable to the date paid. Any payment in respect of any other
obligation or amount payable hereunder that is not paid when due shall bear
interest at the Default Rate from the date due and payable to the date
paid.
ARTICLE .."
PAYMENT OF NOTES
.. REQUIRED PAYMENTS OF NOTES.. REQUIRED PAYMENTS OF NOTES".
() On each Payment Date while the 1996 Note is outstanding, the
Company shall make a payment on the 1996 Note, in cash, in an amount
equal to $455,304.80, which payment shall consist of principal and
accrued interest.
() On May 1, 1997, the Company shall pay all accrued and unpaid
interest on the 1997 Fixed-A Note. On each Payment Date thereafter
while the 1997 Fixed-A Note is outstanding, commencing June 1, 1997,
the Company shall make a payment on the 1997 Fixed-A Note, in cash, in
an amount equal to $61,839.41, which payment shall consist of
principal and accrued interest.
() On May 1, 1997, the Company shall pay all accrued and unpaid
interest on the 1997 Fixed-B Note. On each Payment Date thereafter
while the 1997 Fixed-B Note is outstanding, commencing June 1, 1997,
the Company shall make a payment on the 1997 Fixed-B Note, in cash, in
an amount equal to $23,860.11, which payment shall consist of
principal and accrued interest.
() On May 1, 1997, the Company shall pay all accrued and unpaid
interest on the 1997 Floating Notes. On each Payment Date thereafter
while the 1997 Floating Notes are outstanding, commencing June 1,
1997, the Company shall make a payment on the 1997 Floating Notes, in
cash, in an aggregate amount equal to $70,898.92 of principal plus
accrued and unpaid interest thereon. Each such payment shall be
allocated pro rata among the 1997 Floating Notes then outstanding.
() Upon the issuance of any Additional Fixed Notes or
Additional Floating Notes, Purchasers shall calculate the principal
and interest due on each Payment Date based on a fifteen (15) year
amortization. On each Payment Date following the issuance of such
Additional Note, the Company shall make a payment on such Additional
Note, in cash, in an amount equal to the payment calculated by
Purchasers for such Additional Note, which shall consist of principal
and accrued interest.
() If the interest rates on the Fixed Notes are reset in
accordance with Section 7.4, Purchasers shall recompute the monthly
principal and interest payments for each such Fixed Note, and the
Company shall thereafter be required to make payments equal to such
recomputed amount. On the Maturity Date, the entire outstanding
principal balance of all the Notes, together with interest accrued
thereon, shall be due and payable. Notwithstanding the foregoing, the
entire outstanding balance of all Fixed Notes (to the extent the
interest rate is not reset in accordance with Section 7.3) and all
Floating Notes (to the extent a Fixed Rate is not set in accordance
with Section 7.3 or a new interest rate spread is not agreed to in
accordance with Section 7.3) together with interest accrued thereon,
shall be due and payable on March 1, 2003, with respect to the Fixed
Notes, or at the conclusion of the then-existing Interest Period, with
respect to the Floating Notes.
() If at any time the outstanding principal balance of the
remaining Notes exceeds 75% of the Appraised Value, the Company shall
immediately make a prepayment of principal of the Notes (together with
accrued interest thereon) in an amount such that following the
prepayment, the outstanding principal balance is less than or equal to
75% of the Appraised Value. The prepayment shall be applied pro rata
among all of the Notes at the time outstanding.
() No partial prepayment of the Notes pursuant to Section 8.2
shall relieve the Company from its obligation to make the payments
required under this Section 8.1, except to the extent that the
outstanding principal balance of the Notes is less than the amount of
the scheduled payment otherwise due under this Section 8.1.
.. OPTIONAL PREPAYMENTS OF NOTES; ALLOCATIONS... OPTIONAL
PREPAYMENTS OF NOTES; ALLOCATIONS."
() At any time or from time to time, the Company is hereby
granted the right, at its option, upon notice as provided in
Section 8.3, to prepay all or any part (in integral multiples of
principal of $100,000) of the Fixed Notes, which prepayment shall be
applied pro rata among all of the Fixed Notes at the time outstanding
and shall be applied to the outstanding principal amount thereof in
the inverse order of maturity.
() From time to time from and after the date that is one year
following the date of issuance of any Floating Note, the Company shall
have the right, at its option, upon notice as provided in Section 8.3,
to prepay all or any part (in integral multiples of $100,000) of such
Floating Notes, which prepayment be applied to the outstanding
principal amount in the inverse order of maturity.
() Each such prepayment shall include the principal amount of
the Notes so prepaid, plus interest accrued thereon to the date of
payment, plus the Premium described in Section 8.2(b) (based on such
principal amount so prepaid). In the case of each partial prepayment
of the Notes, the principal amount of the Notes to be prepaid shall be
allocated among all of the Notes at the time outstanding (to the
extent such Note may be prepaid) in proportion, as nearly as
practicable, to the respective unpaid principal amounts thereof not
theretofore called for prepayment, rounded upward to the nearest
$1,000 for each Note, with adjustments to the extent practicable, to
compensate for any prior prepayments not made exactly in such
proportion.
() Any prepayment of the Fixed Notes shall be subject to and
include the Make-Whole Premium. Any prepayment of the Floating Notes
shall be subject to and include the LIBOR Premium. Notwithstanding
the foregoing, no Premium shall be due if (i) any of the Fixed Notes
are prepaid in full on March 1, 2003, (ii) any of the Notes are
prepaid pursuant to Section 7.4 as a result of the Company and
Purchasers being unable to agree upon mutually acceptable interest
rates or interest rate spreads or (iii) if any of the Notes are
prepaid pursuant to Section 8.1(g).
.. NOTICE OF PREPAYMENTS; OFFICERS' CERTIFICATE... NOTICE OF
PREPAYMENTS; OFFICERS' CERTIFICATE." The Company will give each registered
holder of any Note written notice of each prepayment of the Notes under
Section 8.2 not less than thirty (30) days and not more than sixty (60)
days prior to the date fixed for such prepayment, which notice shall be
irrevocable. Each such notice and each such prepayment shall be
accompanied by an Officers' Certificate (a) stating the principal amount
and serial number of each Note to be prepaid and the principal amount
thereof to be prepaid; (b) stating the proposed date of prepayment; (c)
stating the accrued interest on each such Note to such date to be paid in
accordance with Section 8.4; and (d) estimating the applicable Premium
required under Section 8.2 (calculated as of the date of such prepayment
and proffered solely as an estimate of the Premium due upon prepayment) and
setting forth the method of determination and calculations used in
computing such Premium, accompanied by a copy of the Statistical
Release H.15(519) (or other source of market data) used in determining the
United States Treasury Yield.
.. MATURITY; SURRENDER... MATURITY; SURRENDER." In the case of each
prepayment of the Notes, the principal amount of each Note to be prepaid
shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such
date and the Premium payable, if any. From and after such date, unless the
Company shall fail to pay such principal amount when so due and payable,
together with the interest and Premium, if any, as aforesaid, interest on
such principal amount shall cease to accrue. Any Note paid or prepaid in
full shall be surrendered to the Company and canceled and shall not be
reissued, and no Note shall be issued in lieu of any prepaid principal
amount of any Note.
ARTICLE .."
ACCOUNTING, REPORTING AND INSPECTION COVENANTS
OF THE COMPANY
From the date hereof through the Closing and thereafter so long as any
Note shall be outstanding, the Company will perform and comply with each of
the following covenants:
.. ACCOUNTING... ACCOUNTING." The Company will maintain a system of
accounting established and administered in accordance with GAAP and will
accrue all such liabilities as shall be required by GAAP.
.. FINANCIAL STATEMENTS AND OTHER INFORMATION... FINANCIAL
STATEMENTS AND OTHER INFORMATION." The Company will deliver (in duplicate)
to each Purchaser (except as hereinafter provided) so long as such
Purchaser or Purchaser's nominee shall hold any Note, and to each other
registered holder of a Note:
() within ninety (90) days after the end of each Fiscal Year,
the balance sheet of the Company as of the end of such Fiscal Year and
the related statements of income and retained earnings and of cash
flows of the Company for such Fiscal Year, setting forth in each case
in comparative form the figures for the previous Fiscal Year, all in
reasonable detail and (i) accompanied by the report thereon of any
independent public accountants of recognized national standing
selected by the Company, which report shall state that (v) such
financial statements present fairly the financial position of the
Company as of the dates indicated and the results of its operations
and cash flows for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years (except as otherwise
specified in the report), and (w) the audit by such accountants in
connection with such financial statements has been made in accordance
with generally accepted accounting principles, (ii) accompanied by a
written statement of such accountants that without any independent
investigation except that conducted in the ordinary course of their
audit, the accountants do not have knowledge of the existence of any
condition or event that constitutes an Event of Default or Potential
Event of Default, or, if any such condition or event existed or
exists, specifying the nature and period of existence thereof, and
(iii) certified by the chief financial officer of the Company as
presenting fairly, in accordance with GAAP, applied (except as
specifically set forth therein) on a basis consistent with such prior
fiscal periods, the information contained therein;
() within forty-five (45) days after the end of the first three
fiscal quarters of each Fiscal Year, the balance sheet of the Company
as of the end of such fiscal quarter and the related statements of
income and of cash flows of the Company for such fiscal quarter and
for the portion of the Fiscal Year from the first day of such Fiscal
Year through the end of such fiscal quarter, setting forth in each
case in comparative form the figures for the corresponding periods in
the previous Fiscal Year, all in reasonable detail and certified by
the chief financial officer of the Company as presenting fairly, in
accordance with GAAP, applied (except as specifically set forth
therein) on a basis consistent with such prior fiscal periods, the
information contained therein;
() together with each delivery of financial statements pursuant
to subsections (a) or (b) above, an officer's certificate in the form
of EXHIBIT F (i) showing in detail the determination of the ratios and
other financial calculations specified in Sections 10.1 through 10.7
during the accounting period covered by such financial statements,
(ii) stating that the signer has reviewed the terms hereof and of the
Notes and has made, or caused to be made under his supervision, a
review of the transactions and condition of the Company during the
accounting period covered by such financial statements and that such
review has not disclosed the existence during or at the end of such
accounting period, and that the signer does not have knowledge of the
existence as of the date of such officer's certificate, of any
condition or event that constitutes an Event of Default or Potential
Event of Default, or, if any such condition or event existed or
exists, specifying the nature and period of existence thereof and what
action the Company has taken or is taking or proposes to take with
respect thereto; and (iii) if not specified in the related financial
statements being delivered pursuant to subsection (a) above,
specifying the aggregate amount of interest and rentals received or
accrued by the Company, and the aggregate amount of depreciation,
depletion and amortization charged on the books of the Company during
the accounting period covered by such financial statements;
() promptly upon receipt thereof, copies of all reports
submitted to the Company by independent public accountants in
connection with each annual audit, or special audit (if any) of the
books of the Company made by such accountants, including, without
limitation, any comment letter submitted to management by such
accountants in connection with their annual audit;
() promptly upon their becoming available, copies of all press
releases and other statements made available generally by the Company
to the public concerning material developments in the business of the
Company;
() within five (5) days of any Responsible Officer of the
Company obtaining knowledge of any condition or event that constitutes
an Event of Default or Potential Event of Default, or that the
registered holder of any Note has given any notice or taken any other
action with respect to a claimed Event of Default or Potential Event
of Default under this Agreement or that any person has given notice to
the Company or taken any other action with respect to a claimed
default or event or condition of the type referred to in Article 14,
an Officers' Certificate describing the same and the period of
existence thereof and specifying what action the Company has taken, is
taking and proposes to take with respect thereto;
() promptly upon (and in any event within ten (10) Business
Days of) any Responsible Officer of the Company obtaining knowledge of
the occurrence of any (i) "reportable event," as such term is defined
in Section 4043 of ERISA, or (ii) "prohibited transaction," as such
term is defined in Section 4975 of the Code, that is not exempt by law
or ruling in connection with any Plan relating to the Company or any
trust created thereunder, a written notice specifying the nature
thereof, what action the Company has taken, is taking and proposes to
take with respect thereto, and any action taken or threatened by the
Internal Revenue Service or the PBGC with respect thereto, provided
that, with respect to the occurrence of any "reportable event" as to
which the PBGC has waived the 30-day reporting requirement, such
written notice need not be given;
() immediately upon the occurrence of any of the following
events, an Officers' Certificate describing such event: (i) the
Certificate of Incorporation or Bylaws of the Company shall have been
amended or the Company shall have changed its jurisdiction of
organization; or (ii) the Company shall have changed its name or shall
do business under any name other than as set forth on SCHEDULE 9.2; or
(iii) the Company shall have changed its principal place of business
or its chief executive offices; or (iv) the Company shall have become
a party to any suit, action or proceeding that, if adversely
determined, would have a Material Adverse Effect or in which the
projected settlement amount involved therein could equal $3,000,000 or
more (in addition to any insurance coverage); or (v) the Company shall
have opened or closed any material place of business; or (vi) there
shall occur any strike, walkout, work stoppage or other material
employee disruption relating to any of the Mortgaged Properties, or
the expiration of any labor contract affecting any of the Mortgaged
Properties (unless there exists a new labor contract in substitution
therefor) that reasonably could be expected to have a Material Adverse
Effect; or (vii) the Company shall have obtained knowledge that any of
its insurance policies or any insurance policies affecting any of the
Mortgaged Properties will be canceled or not renewed (unless there
exists a similar insurance policy in substitution therefor);
() promptly (i) upon receipt thereof, copies of any notices to
the Company from any federal or state administrative agency relating
to any order, ruling, statute or other law or regulation that would,
with reasonable probability, have a Material Adverse Effect; and
(ii) following filing with the Commission, any reports or statements
filed with the Commission;
() promptly upon receipt thereof, copies of any notice
delivered pursuant to Article 14; and
() with reasonable promptness, such other information and data
with respect to the Company as from time to time may be reasonably
requested by any registered holder of a Note, including, without
limitation, any projections or business plans prepared by or for the
Company.
.. INSPECTION.. INSPECTION". The Company will permit, subject to
rights of parties in possession, any authorized representatives designated
by a Purchaser, so long as such Purchaser or its nominee shall hold any
Notes, or designated by any other registered holder of any Notes, without
expense to the Company, at such reasonable times and as often as may be
reasonably requested, to (a) visit and inspect the Mortgaged Properties,
including its books of account, and (b) upon the prior written consent of
the Company, which consent shall not be unreasonably withheld, discuss the
Company's affairs, finances and accounts with the Company's directors,
officers and independent public accountants (and by this provision the
Company authorizes such directors, officers and accountants to discuss with
such representatives the affairs, finances and accounts of the Company,
whether or not an officer or other representative of the Company is
present, provided that the Company shall receive notice of any such meeting
and be given a reasonable opportunity to have a representative attend).
.. ACQUIRED REAL PROPERTY... ACQUIRED REAL PROPERTY." The Company
shall deliver to each Purchaser so long as such Purchaser or Purchaser's
nominee shall hold any Note, and to each other registered holder of a Note,
upon request of a Purchaser or any other registered holder of a Note, but
in any event not less than ninety (90) days after the end of each Fiscal
Year of the Company, a list and description of all real property purchased
or newly leased by the Company during the period specified in such request
or the past Fiscal Year, as applicable, that is to be used for any new
processing plant, hatchery or feed mill in which an existing processing
plant, hatchery or feed mill on any Mortgaged Property is to be shut down
or operations are to be substantially decreased ("Acquired Property"), and,
unless otherwise specified in this Agreement or by the registered holder or
registered holders (other than the Company or any Affiliate) of the Notes,
the Company shall execute and deliver a deed of trust or mortgage and
assignment of leases and rents, substantially in form and substance
satisfactory to Purchasers, (with any changes to such form of mortgage as
appropriate in the applicable jurisdiction and as requested by a Purchaser
or Purchaser's nominee or any registered holder of a Note other than the
Company or any of the Company's Affiliates), to Purchasers or a mortgage
trustee, for the benefit of Purchasers so long as a Purchaser or a
Purchaser's nominee shall hold any Note, and to each other registered
holder of a Note or a mortgage trustee, for the benefit of each such other
holder, granting a first Lien of record on and a first security interest in
the Acquired Property, subject only to existing Liens, the Permitted
Exceptions, and any purchase money Liens incurred by the Company in
connection with the acquisition of any Acquired Property, and the Acquired
Property shall thereafter be part of the Mortgaged Properties. The Company
shall permit each Purchaser so long as such Purchaser or Purchaser's
nominee shall hold any Note, and each other registered holder of a Note,
the right to inspect any Acquired Property and to conduct such other
investigation and due diligence with respect to any Acquired Property that
such Purchaser or such other registered holder deems necessary, and to the
extent the proposed acquisition is in excess of $3,000,000, the Company
shall pay all reasonable costs of Purchasers or such other registered
holder in inspecting any Acquired Property and conducting such
investigation, including, without limitation, any costs of an environmental
consulting firm and attorneys' fees.
ARTICLE .."
BUSINESS AND FINANCIAL COVENANTS OF THE COMPANY
So long as any Note shall be outstanding, the Company will perform and
comply, and will cause each Subsidiary (other than Pilgrim's Pride-Mexico
and any other Subsidiary located or doing business in Mexico or Central or
South America) to perform and comply, as applicable, with each of the
following covenants:
.. ASSET RATIO... ASSET RATIO." The Company shall at all times
maintain a ratio of Net Tangible Assets to Total Liabilities of not less
than 1.30:1.
.. CONSOLIDATED NET WORTH... CONSOLIDATED NET WORTH." The Company
shall at all times maintain a Consolidated Net Worth of not less than
$125,000,000, as increased from time to time by (i) the net proceeds of any
Stock of the Company or any Subsidiary issued and sold to third Persons,
(ii) the amount of Subordinated Debt of the Company or any Subsidiary owed
by third parties converted into or exchanged for Stock of the Company or
any Subsidiary, and (iii) 25% of the Company's annual positive Consolidated
Net Income, if any.
.. CONSOLIDATED WORKING CAPITAL... CONSOLIDATED WORKING CAPITAL."
The Company and its Subsidiaries shall at all times maintain Consolidated
Working Capital of not less than $40,000,000.
.. CURRENT RATIO... CURRENT RATIO." The Company shall at all times
maintain a ratio on a consolidated basis of Current Assets to Current
Liabilities of not less that 1.25:1.
.. FIXED CHARGE COVERAGE... FIXED CHARGE COVERAGE." The Company
shall at all times maintain for the period of eight consecutive fiscal
quarters then ended on a consolidated basis a Fixed Charge Coverage Ratio
of not less than 1.40:1.
.. CAPITAL EXPENDITURES... CAPITAL EXPENDITURES." The Company and
its Subsidiaries shall not incur Capital Expenditures in excess of
$37,227,600 in the aggregate for Fiscal Year 1997 (excluding the Capital
Expenditures incurred pursuant to the Green Acre Acquisition and related
expansion). Thereafter, the limitation on Capital Expenditures shall be
115% of the Company's consolidated total depreciation and amortization for
the immediately preceding Fiscal Year, as reflected on the Company's
consolidated audited financial statements for such Fiscal Year (excluding
Capital Expenditures incurred in expansion of the facilities acquired in
the Green Acre Acquisition). Any unused portion of the maximum permitted
amount of Capital Expenditures (up to $5,000,000 per Fiscal Year) may be
carried over to the next succeeding Fiscal Year, but not thereafter.
.. LIENS... LIENS." The Company will not, and will not permit any
Subsidiary to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of the Company
or such Subsidiary, whether now owned or held or hereafter acquired, or any
income or profits therefrom, other than (a) the Liens and security
interests created to secure the Notes, (b) Liens that constitute Permitted
Exceptions, (c) any Lien on any property acquired, constructed or improved
by the Company after Closing and created contemporaneously with or within
12 months of such acquisition, construction or improvement to secure Debt
incurred to provide for all or a portion of the purchase price of such
property as acquired, constructed or improved, (d) Liens on property of the
Company in favor of the United States of America or any political
subdivision thereof to secure partial payments pursuant to any contract,
(e) pledges or deposits to secure obligations under worker's compensation
laws or similar judgments thereunder that are not currently dischargeable,
and pledges, deposits, performance bonds or similar security interests in
connection with bids, tenders, contracts and leases to which the Company is
a party (all of which are in the ordinary course of business and which do
not relate to indebtedness of the Company), (f) Liens for taxes,
assessments or governmental charges not then due and delinquent or the
validity of which is being contested in good faith and a bond or other
security satisfactory to Purchaser has been posted by the Company, (g)
Liens arising in connection with court proceedings, provided the execution
of such Liens is effectively stayed and such Liens are contested in good
faith and a bond or other security satisfactory to Purchaser has been
posted by the Company, (h) Liens arising in the ordinary course of business
(including easements and similar encumbrances) that are not incurred in
connection with the borrowing of money, provided that such Liens do not
materially interfere with the conduct of the business of the Company,
(i) inchoate Liens, (j) any Lien resulting from renewing, extending or
refunding outstanding Secured Debt provided that the principal amount of
the Debt secured thereby is not increased and the Lien is not extended to
any other property, (k) Liens on assets (other than the Collateral) to
secure Debt provided that no Event of Default or Potential Event of Default
exists or would result therefrom; and (m) Liens on Collateral acquired
after the date hereof to secure financing from the Texas Capital Fund Real
Estate Development Program in an amount not to exceed $5,000,000 (and by
this provision, Purchaser agrees to execute a subordination agreement or
partial release with respect to such Lien, in a form satisfactory to
Purchaser).
.. INVESTMENTS; DEBT; GUARANTEES.
() The Company shall not, and shall not permit any Subsidiary
to, directly or indirectly, make or own any Investment other than
Permitted Investments, except that the Company or a Subsidiary may
(i) purchase or own assets or stock and other securities of a
Subsidiary; (ii) make loans to officers, directors, stockholders,
employees or Subsidiaries to the extent that following such loan, no
Event of Default or Potential Event of Default would exist; (iii) make
investments, payments, loans and capital contributions to entities
other than Subsidiaries to the extent such Investment is made from the
net cash proceeds received by the Company from the issuance of
additional shares of capital stock or other securities subsequently
converted into capital stock; (iv) consummate the Green Acre
Acquisition on the terms set forth in the Green Acre Purchase
Agreement; and (v) acquire all or substantially all of the Property of
any Person or acquire substantially as an entirety the business of any
other Person if the aggregate fair market value of all consideration
paid or payable by the Company in all such acquisitions made in any
Fiscal Year does not exceed 3% of Net Tangible Assets, as determined
at the conclusion of the fiscal month immediately preceding the date
of the proposed acquisition (excluding the Green Acre Acquisition).
() The Company shall not, and shall not permit any Subsidiary
to, directly or indirectly, create, assume, incur, or guarantee any
Debt except (i) to the extent that following the creation, assumption,
incurrence or guarantee of such Debt, no Event of Default or Potential
Event of Default would exist, and (ii) the Company may guarantee the
trade payables of Pilgrim's Pride-Mexico.
.. RESTRICTED PAYMENTS... RESTRICTED PAYMENTS." The Company shall
not, and shall not permit any Subsidiary to, directly or indirectly,
(i) redeem, purchase, or otherwise acquire for value any shares of the
Company's capital stock, except out of the net cash proceeds received by
the Company after Closing from the issuance of additional shares of capital
stock or other securities subsequently converted into capital stock, or
(ii) declare or pay any dividends or any other distributions (other than
dividends payable in shares of capital stock of the Company) on any shares
of the Company's capital stock after Closing in excess of $2,300,000 in the
aggregate in any Fiscal Year.
.. LEASES... LEASES." The Company shall not, and shall not permit
any Subsidiary to, incur non-cancelable non-Capitalized Lease Obligations
or sale and leaseback transactions if the aggregate annual amount of all
minimum or guaranteed net rentals payable under such leases would exceed 4%
of Consolidated Net Tangible Assets (as determined immediately preceding
the execution of such lease).
.. CONSOLIDATION, MERGER AND SALE OF SUBSTANTIALLY ALL ASSETS...
CONSOLIDATION, MERGER AND SALE OF SUBSTANTIALLY ALL ASSETS." The Company
shall not, and shall not permit any Subsidiary to, directly or indirectly,
(a) consolidate with or merge into any other Person or permit any other
Person to consolidate with or merge into it (other than a consolidation or
merger between (i) the Company and an Eligible Subsidiary, and
(ii) Eligible Subsidiaries or any Subsidiary located or doing business in
Mexico or Central or South America); or (b) sell, transfer, lease, abandon
or otherwise dispose of all or substantially all of its assets in a single
or series of related transactions.
.. FORMATION OF SUBSIDIARIES.. FORMATION OF SUBSIDIARIES". Without
the prior written consent of Purchasers, which consent shall not be
unreasonably withheld, the Company shall not, and shall not permit any of
its existing Subsidiaries to, directly or indirectly, form or acquire any
new Subsidiaries other than Eligible Subsidiaries and Subsidiaries located
or doing business in Mexico or Central or South America or Eastern Europe.
The Company shall promptly give Purchasers written notice of the formation
of any Eligible Subsidiary or any Subsidiary located or doing business in
Mexico or Central or South America or Eastern Europe, but in any event
within ten (10) days following formation thereof.
.. INTERESTED PARTY TRANSACTIONS... INTERESTED PARTY TRANSACTIONS."
The Company shall not, nor permit any Subsidiary to, conduct any
transactions with any Affiliate on terms that are not fair and reasonable
and not materially less favorable to the Company or such Subsidiary than it
would obtain in a comparable arm's-length transaction with a Person not an
Affiliate other than ongoing transactions with Affiliates of a similar
nature to those disclosed in the Company's Proxy Statement relating to its
Fiscal Year-end September 30, 1996.
.. EXISTENCE... EXISTENCE." The Company will, or will cause to be
done, all things necessary to, and cause each Subsidiary to, preserve, keep
and maintain in full force and effect its corporate existence, rights
(charter and statutory), franchises and authority to do business and the
corporate existence, rights (charter and statutory), franchises and
authority to do business of each of the Subsidiaries, except for such
matters that would not result in a Material Adverse Effect.
.. PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION... PAYMENT OF
TAXES AND CLAIMS; TAX CONSOLIDATION." The Company will, and cause the
Subsidiaries to, pay and cause to be paid all taxes, assessments and other
governmental charges imposed upon it or any of its properties or assets or
in respect of any of the franchises, business, income or profits of the
Company before any penalty or interest accrues thereon, and all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums that have become due and payable and that by law have or
might become a Lien upon any of the properties or assets of the Company,
provided that no such charge or claim need be paid if being contested in
good faith by appropriate proceedings promptly initiated and diligently
conducted, such bonds or escrows are in place as registered holders of the
Notes at the time shall request, and if such reserves or other appropriate
provision, if any, as shall be required by GAAP shall have been made
therefor. The Company will not file or permit the filing of any
consolidated income tax return with any Person (other than a Subsidiary).
.. COMPLIANCE WITH LAWS... COMPLIANCE WITH LAWS." The Company will,
and will cause its Subsidiaries to, comply with all laws, statutes, rules,
regulations and ordinances of any Governmental Authority of a material
nature applicable to the Company or any Subsidiary.
.. COMPLIANCE WITH ERISA... COMPLIANCE WITH ERISA." The Company
will not, and will not permit any employee benefit plan (as that term is
defined in Section 3 of ERISA) maintained by the Company, any Subsidiary or
any Related Person to (a) engage in any "prohibited transaction" as such
term is defined in Section 4975 of the Code, as amended from time to time,
which is likely to result in a liability for such Person; (b) incur any
"accumulated funding deficiency", as such term is defined in Section 302 of
ERISA, whether or not waived which is likely to result in a liability of
such Person; or (c) terminate any such benefit plan in a manner which could
result in the imposition of a lien or encumbrance on the assets of such
Person pursuant to Section 4068 of ERISA.
.. MAINTENANCE OF PROPERTIES; INSURANCE... MAINTENANCE OF
PROPERTIES; INSURANCE." The Company will maintain or cause to be
maintained in good repair, working order and condition (reasonable wear and
tear excepted) all properties used or useful in, and deemed material to,
the business of the Company or any Subsidiary and from time to time will
make or cause to be made all appropriate repairs, renewals and replacements
thereof. The Company will maintain or cause to be maintained, with
financially sound and reputable insurers, insurance with respect to the
properties and business of the Company and its Subsidiaries, against loss
or damage of the kinds customarily insured against by companies of
established reputation engaged in the same or similar business and
similarly situated, of such types and in such amounts as are customarily
carried under similar circumstances by such other companies. In any event,
the Company shall, at a minimum, comply with all maintenance, insurance and
similar requirements under the Security Documents.
.. TITLE... TITLE."
() As of the Closing Date and upon giving effect to the
transactions contemplated hereby, except Liens and other matters that
may constitute Permitted Exceptions, the Company will have good (and,
with respect to non-leasehold real property, indefeasible) title to
all of its properties and assets that are material to its business as
presently conducted and as proposed to be conducted and none of such
properties or assets will be subject to any Liens, other than
Permitted Exceptions. As of the Closing Date and upon giving effect
to the transactions contemplated hereby, the Company will have good
(and, with respect to non-leasehold real property, indefeasible) fee
simple title to the Mortgaged Properties subject only to the Permitted
Exceptions.
() The Company acknowledges that its predecessor in title
acquired title to certain real property (which is part of the
Mortgaged Properties) described as Lots 1 through 3, Block 10 and
Lots 5 through 7, Block 11, all in Park Addition to the City of
DeQueen, Arkansas, a 2.78 acre tract and a 2.05 acre tract in
Section 31, Township 8 South, Range 31 West, DeQueen, Arkansas, and
part of a 36.50 acre tract lying NE 1/4 NW 1/4 of Section 31, Township
8 South, Range 31 West, DeQueen, Arkansas (collectively, the "DEQUEEN
PROPERTY"), through a Tax Deed from the State of Arkansas, and that
such Tax Deed may not have extinguished the claim or interest in title
to the DeQueen Property (the "TITLE CLAIM") by certain heirs of such
predecessor in title. The Company covenants to Purchasers that until
the Title Claim is resolved in favor of the Company, and any exception
to title pertaining thereto, as may be reflected in the title policy
referred to in Section 4.6 hereof, is deleted by endorsement to such
policy, and evidence of same is furnished to Purchasers, without the
prior written consent of Purchasers, no improvements shall be
constructed on the DeQueen Property that are essential to the
operation of the Company's processing plant in DeQueen, Arkansas.
.. CONDUCT OF BUSINESS... CONDUCT OF BUSINESS." The Company will
not, and will not permit any Subsidiary to, engage in any business other
than businesses engaged in by the Company on the date hereof, other
businesses or activities substantially similar or related thereto, and
other lines of business consented to by the registered holders of the Notes
and businesses that are not material to the Company or its business or
operations.
.. CAPITAL IMPROVEMENTS... CAPITAL IMPROVEMENTS." Subject to the
limitations of Section 10.7, the Company and the Subsidiaries shall incur
not less than $3,000,000 in the aggregate per Fiscal Year for capital
improvements and repair and maintenance of the Collateral.
.. SALE OF ASSETS.. SALE OF ASSETS". The Company shall not, and
shall not permit any Subsidiary to, sell, lease, transfer, or otherwise
dispose of Collateral in excess of 5% of the lower of the book value or
fair market value of the Company's total assets.
ARTICLE .."
ENVIRONMENTAL MATTERS
.. DEFINITIONS... DEFINITIONS." As used in this Article 11, the
following terms shall be defined as indicated:
() "ACQUISITION DATE," with respect to any portion of the
Mortgaged Properties, means the date on which Purchaser or the
registered holder of any Note becomes an owner of such portion of the
Mortgaged Properties.
() "ADVERSE ENVIRONMENTAL IMPACT" means (i) a Release of a
Hazardous Substance in a Reportable Quantity or (ii) any material
adverse impact on human health, livestock or the quality of any
Property.
() "ENVIRONMENTAL ACTIVITY" shall mean any storage, holding,
manufacture, emission, discharge, generation, processing, treatment,
abatement, removal, disposition, handling, transportation or disposal,
or any actual or threatened release of any "Hazardous Substances"
from, under, into or on the Mortgaged Properties or otherwise relating
to the Mortgaged Properties, including but not limited to (i) the
migration or emanation of "Hazardous Substances" from the Mortgaged
Properties onto or into the environment beyond the physical boundaries
of the Mortgaged Properties; (ii) the off-site disposal of Hazardous
Substances from the Mortgaged Properties; and (iii) any of the
previously described activities occurring in connection with ambient
air, surface and subsurface soil conditions, and all surface and
subsurface waters.
() "ENVIRONMENTAL CONDITION" shall mean (i) the presence or
existence in, on, at, or under the Mortgaged Properties of any
Hazardous Substances, "industrial or solid waste," as that term is
defined under the Environmental Laws, and (ii) the presence or
existence in, on, at, or under the environment beyond the physical
boundaries of the Mortgaged Properties of any Hazardous Substances,
that migrated or emanated from the Mortgaged Properties.
() "ENVIRONMENTAL DAMAGES" means all claims, judgments,
damages, losses, penalties, fines, liabilities (including strict
liability), encumbrances, liens, costs and expenses of investigation
and defense of any claim, whether or not such is ultimately defeated,
and of any settlement of judgment, of whatever kind or nature,
contingent or otherwise, matured or unmatured, foreseeable or
unforeseeable, including without limitation reasonable attorneys' fees
and disbursements and consultants' fees, any of which are incurred at
any time, and including, but not limited to (i) damages for personal
injury, or injury to property or natural resources occurring upon or
off of the Mortgaged Properties, foreseeable or unforeseeable,
including, without limitation, lost profits, consequential damages,
the cost of demolition, redesign and rebuilding of any improvements on
real property, and interest and penalties as allowed by law;
(ii) diminution in the value of the Mortgaged Properties, and damages
for the loss of or restriction on the use of or adverse impact on the
marketing of rentable or usable space or of any amenity of the
Mortgaged Properties; (iii) reasonable fees incurred for the services
of consultants, contractors, experts, laboratories and all other
reasonable costs incurred in connection with the investigation,
remediation, removal, or disposal of Hazardous Substances or violation
of the Environmental Laws, including, but not limited to, the
preparation of any feasibility studies or reports or the performance
of any response, cleanup, remediation, removal, abatement,
containment, closure, restoration, disposal, or monitoring work
required by and in conformity with any federal, state or local
governmental agency or political subdivision, or reasonably necessary
to make full economic use of the Mortgaged Properties or any other
property or otherwise expended in connection with such conditions, and
including, without limitation, any reasonable attorneys' fees, costs
and expenses incurred in connection with any of the foregoing or in
enforcing this Agreement or collecting any sums due hereunder; and
(iv) liability to any person or entity to indemnify such person or
entity for costs expended in connection with the items referenced in
this subsection (d).
() "ENVIRONMENTAL LAWS" means all federal, state or local laws,
rules or regulations pertaining to the protection of human health or
the environment, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C.
' 9601, ET SEQ.), the Resource Conservation and Recovery Act (42
U.S.C. ' 6901, ET SEQ.), the Federal Clean Air Act (42 U.S.C. ' 7401,
ET SEQ.), and the Federal Clean Water Act (42 U.S.C. ' 1251, ET SEQ.),
each as amended from time to time, and regulations and rules issued
thereunder.
() "HAZARDOUS SUBSTANCES" means (i) any "hazardous substance,"
as such term is defined in either the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (42 U.S.C. ' 9601 ET
SEQ.) and the regulations promulgated thereunder (as amended,
"CERCLA"); (ii) any "hazardous waste," as such term is defined in the
Resource Conservation and Recovery Act of 1976 (42 U.S.C. ' 6901 ET
SEQ.) and the regulations promulgated thereunder (as amended, "RCRA");
(iii) any substances or materials listed as hazardous or toxic in the
United States Department of Transportation Table, as amended from time
to time; (iv) asbestos in any form or any asbestos containing
materials; (v) polychlorinated biphenyls ("PCB's"); (vi) any explosive
or radioactive materials; (vii) hydrocarbons, petroleum products, or
any derivative thereof; or (viii) any other chemical, material or
substance that is regulated as hazardous or toxic or exposure to which
is prohibited, limited or regulated by any federal, state, county,
regional, local or other governmental authority or that, even if not
so regulated, poses a material threat to the health and safety of the
occupants or livestock of the Mortgaged Properties or the owners or
occupants of property adjacent thereto.
() "RELEASE" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching,
dumping or disposing into the environment (including, without
limitation, the abandonment or discarding of barrels, containers or
other receptacles containing any Hazardous Substance).
() "REPORTABLE QUANTITY" means that quantity of a material as
set forth in 40 C.F.R. Part 302 or the quantity of a material that is
sufficient to trigger a remediation, response, closure or notification
obligation under applicable Environmental Laws.
.. INDEMNIFICATION... INDEMNIFICATION."
() Subject to subsections (b) and (c) below, notwithstanding
any provision in this Agreement or any Collateral Agreement limiting
or negating the Company's liability, the Company shall protect,
indemnify, save harmless and defend Purchasers and each present and
former registered holder (or beneficial holder through participation
or otherwise) of a Note and their respective past, present and future
officers, directors, shareholders, partners, employees, agents,
contractors, tenants and representatives (individually, an
"Indemnified Party," and collectively, the "Indemnified Parties") from
and against any and all Environmental Damages imposed upon, suffered
or incurred by or asserted against any Indemnified Party or the
Mortgaged Properties arising in any manner in connection with the
existence of an Environmental Condition at the Mortgaged Properties or
the occurrence of any Environmental Activity at the Mortgaged
Properties, whether arising, occurring, or in existence during or
prior to the Company's ownership or operation of the Mortgaged
Properties, whether arising, occurring, or in existence prior to the
issuance of the Notes or at any time thereafter, whether arising,
occurring, or in existence before, during or after enforcement of the
rights and remedies of Purchaser or any other registered holder of a
Note upon default and whether or not the Company is responsible
therefor, including, without limitation, the violation of
Environmental Laws, or any representations, warranties or covenants
contained herein, any imposition by any governmental authority of any
lien or so-called "super priority lien" upon the Mortgaged Properties,
cleanup costs, liability for personal injury or property damage or
damage to the environment and any fines, penalties and punitive
damages with respect thereto. An Indemnified Party may elect to
conduct its own defense through counsel of its own choice, and the
Company agrees to pay the reasonable fees and expenses of such counsel
for conducting such defense but only if an Indemnified Party
determines in good faith that the conduct of its defense by the
Company could be materially prejudicial to the Indemnified Party's
interests. THESE PROVISIONS ARE INTENDED TO INDEMNIFY THE INDEMNIFIED
PARTIES AGAINST (i) THE RESULTS OF THEIR OWN NEGLIGENCE AND (ii) ANY
STRICT LIABILITY IMPOSED ON THE INDEMNIFIED PARTIES.
() Notwithstanding the foregoing, the Company's obligations
hereunder shall not apply with respect to an Environmental Condition
or Environmental Activity arising for the first time after the
Acquisition Date unless such Environmental Condition or Environmental
Activity is caused by the Company or its contractors, agents or
representatives after the Acquisition Date or arose out of an
Environmental Condition or Environmental Activity, whether caused by
the Company or not, occurring or existing prior to the Acquisition
Date. For purposes of this Agreement, the Company shall bear the
burden of proving when an Environmental Condition or Environmental
Activity occurred or existed. In addition, any Hazardous Substances
located upon, about or beneath the Mortgaged Properties or having
migrated to or from the Mortgaged Properties shall be presumed to have
been present prior to the Acquisition Date unless the Company can
demonstrate (i) that a portion of the Hazardous Substances were
introduced to the Mortgaged Properties after the Acquisition Date and
were not introduced by the Company, and (ii) the Environmental Damages
are divisible between the portion of the Hazardous Substances
introduced before and after the Acquisition Date. If the Company can
demonstrate both conditions, then its indemnity shall not extend to
the portion of any divisible Environmental Damages attributable to
Hazardous Substances introduced to the Mortgaged Properties after the
Acquisition Date by parties other than the Company.
() In no event shall the provisions of this Agreement be deemed
to constitute a waiver of, or to be in lieu of, any right or claim,
including without limitation any right of contribution or other right
of recovery that any person entitled to enforce this Agreement might
otherwise have against the Company under the Environmental Laws.
.. AGREEMENT TO REMEDIATE... AGREEMENT TO REMEDIATE."
Notwithstanding the obligation of the Company to indemnify the Indemnified
Parties pursuant to this Agreement, the Company shall upon demand of the
registered holders (other than the Company or any Affiliate) of, in the
aggregate, sixty-six and two-thirds percent (66-2/3%) or more in principal
amount of the Notes at the time outstanding (excluding any Notes directly
or indirectly owned by the Company or any Affiliate), and at the sole cost
and expense of the Company, promptly take all actions in connection with an
Environmental Condition or Environmental Activity causing an Adverse
Environmental Impact that are required by any governmental agency or by
Environmental Laws. Such actions shall include, but not be limited to, the
investigation of the Environmental Condition of the Mortgaged Properties,
the preparation of any feasibility studies, reports or remedial plans, and
the performance of any cleanup, remediation, containment, operation,
maintenance, monitoring or restoration work, whether on or off of the
Mortgaged Properties. All such work shall be performed by one or more
qualified and experienced contractors, selected by the Company. The
Company shall proceed continuously and diligently with such investigatory
and remedial actions, provided that in all cases such actions shall be in
accordance with all applicable requirements of the appropriate governmental
agencies. Any such actions shall be performed in a good, safe and
workmanlike manner and shall minimize any impact on the business conducted
at the Mortgaged Properties. The Company shall pay all costs in connection
with such investigatory and remedial activities, including but not limited
to all power and utility costs, and any and all taxes or fees that may be
applicable to such activities. The Company shall promptly provide to
Purchasers and the registered holder of any Note copies of testing results
and reports that are generated in connection with the above activities.
Promptly upon completion of such investigation and remediation, the Company
shall permanently seal or cap all monitoring wells and test holes to
industrial standards as required by the Environmental Laws, remove all
associated equipment, and restore the Mortgaged Properties to the maximum
extent possible, which shall include, without limitation, the repair of any
material surface damage, including paving, and the repair, restoration or
reconstruction of any damaged improvements caused by such investigation or
remediation.
.. COVENANTS... COVENANTS."
() The Company shall during its ownership or operation of the
Mortgaged Properties (i) comply with all Environmental Laws relating
to the Mortgaged Properties and the ownership or operation of the
Mortgaged Properties, and not engage in or permit others to engage in
any Environmental Activity in violation of the Environmental Laws;
(ii) establish and maintain, as required by the Environmental Laws,
policies, procedures and programs to monitor and assure compliance
with the Environmental Laws relating to the Mortgaged Properties or
the ownership or operation of the Mortgaged Properties and provide an
Indemnified Party upon request with evidence of the existence and
implementation of these policies, procedures, and programs; (iii)
deliver to Purchasers and the registered holder of any Note within
fifteen (15) days following the occurrence of any such event, written
notice of the discovery by the Company of any event, the occurrence of
which would render any representation or warranty contained in
Section 6.2 incorrect if made at the time of such discovery; (iv)
promptly comply with Environmental Laws requiring the remediation,
abatement, removal, treatment or disposal of Hazardous Substances or
remediation of an Environmental Condition; (v) cause any party who
occupies the Mortgaged Properties to comply with this Section 11.4;
and (vi) not cause or suffer any liens to be recorded against or
imposed against any of the Mortgaged Properties as a result of an
Environmental Condition or Environmental Activity and which liens
violate the terms of Section 14.1(g). The Company shall work
diligently to complete all investigations of Environmental Issues
needed to make such a determination, shall correct any violation of
Environmental Laws identified, and shall remediate any Adverse
Environmental Impact in the manner described in Section 11.3. The
Company acknowledges and agrees that these Environmental Issues and
any Environmental Damages related to them are within the scope of the
indemnification obligation of Section 11.2.
() The Company hereby represents and warrants to Purchasers
that it engaged ROWEnvironmental to investigate each of the
environmental issues (the "Environmental Issues") identified on
EXHIBIT G to the Original Note Purchase Agreement in the manner and
within the time periods described in such EXHIBIT G and provided
Purchaser with a written report that concluded none of the issues
represented a violation of Environmental Laws or an Adverse
Environmental Impact.
() The Company hereby acknowledges that it has received the
results of a subsurface investigation conducted by Law Engineering and
Environmental Services, Inc. ("Law") in connection with the "Green
Acres Hatchery and Feed Mill" in Center, Shelby County, Texas (the
"Feed Mill") and specifically acknowledges receipt of a letter report
from Law, dated April 4, 1997, entitled "Revised Letter Report
Concerning Cost Estimates, Green Acres Feed Mill, 1102 Logansport
Street, Center, Shelby County, Texas 75935, Law Project 60360-6-5829-
02 & 03-916" ("Law Letter Report"). The Company agrees that, at the
closing of the Green Acre Acquisition, the Company will require Green
Acre to enter into an Environmental Escrow Agreement with the Company,
in a form reasonably acceptable to Purchasers, which shall include the
following provisions: (i) Green Acre shall place the amount of
$110,000 in escrow ("Escrow") with Harris Trust and Savings Bank
("Escrow Agent"); (ii) Green Acre shall perform a response action in
connection with the Environmental Conditions that are now known or may
be encountered during further investigation or remediation in
connection with "Area 1" and "Area 2" as defined in the Law Letter
Report; (iii) the response action shall commence on or prior to the
closing of the Green Acre Acquisition and Green Acre shall perform the
response action in compliance with all of the requirements of Section
11.3 of this Agreement that are binding on the Company; (iv) the
response action shall be deemed to be completed upon the receipt from
the Texas Natural Resource Conservation Commission ("TNRCC") of a
letter or certificate stating that the TNRCC is satisfied with the
response action performed and that no further activity is required
("Regulatory Closure"); (v) the Escrow shall be released to Green Acre
upon the receipt by the Company of reasonable evidence of Regulatory
Closure; (vi) the Escrow shall be forfeited to the Company in the
event of a default by Green Acre under the Environmental Escrow
Agreement, but shall remain in escrow with the Escrow Agent until
Regulatory Closure is attained at which time it will be released to
the Company upon the written consent of Purchasers; and (vii) the
forfeiture of the Escrow to the Company shall not release any rights
that the Company has against Green Acre for in connection with any
Environmental Condition. The Company further covenants that the
Company shall be liable to the Purchasers for the performance of the
obligations of Green Acre under the Environmental Escrow Agreement and
that a breach by Green Acre of the Environmental Escrow Agreement, if
not cured by the Company within a reasonable time of the Company's
knowledge of the breach, shall be an Event of Default.
.. SITE ASSESSMENTS... SITE ASSESSMENTS." The registered holders
(other than the Company or any Affiliate) of, in the aggregate, a majority
of the principal amount of the Notes at the time outstanding (excluding any
Notes directly or indirectly owned by the Company or any Affiliate) (by its
officers, employees and agents, as applicable) at any time and from time to
time, either prior to or after the occurrence of an Event of Default, may
contract for the services of persons (the "Site Reviewers") to perform
environmental site assessments ("Site Assessments") on the Mortgaged
Properties for the purpose of determining whether there exists on the
Mortgaged Properties any Environmental Condition or Environmental Activity,
or other ownership or operation of the Mortgaged Properties that is in
violation of Environmental Laws or could reasonably be expected to result
in Environmental Damages. The Site Assessments may be performed at any
time or times, upon reasonable notice, and under reasonable conditions
established by the Company that do not unreasonably impede the performance
of the Site Assessments. The Company hereby grants, and shall cause any
tenant to grant, to an Indemnified Party, its agents, attorneys, employees,
consultants, and contractors and the Site Reviewers, an irrevocable license
and authorization to enter upon and inspect the Mortgaged Properties and
perform such tests, including without limitation, subsurface testing, soil
and ground water testing, and other tests that may physically invade the
Mortgaged Properties, as the registered holders (other than the Company or
any Affiliate) of, in the aggregate, a majority of the principal amount of
the Notes at the time outstanding (excluding any Notes directly or
indirectly owned by the Company or any Affiliate), in their sole
discretion, determine is necessary to protect their liens, assignments,
and/or security interests in the Mortgaged Properties. The Company will
supply to the Site Reviewers such historical and operational information
regarding the Mortgaged Properties as may be reasonably requested by the
Site Reviewers to facilitate the Site Assessments and will make reasonably
available for meetings with the Site Reviewers appropriate personnel having
knowledge of such matters. On request, Purchaser (if it shall remain the
holder of any Notes) or any registered holder of any Note shall make the
results of such Site Assessments fully available to the Company within a
reasonable period of time after such request, and the Company (prior to an
Event of Default) may at its election participate under reasonable
procedures in the direction of such Site Assessments and the description of
tasks of the Site Reviewers. The cost of performing such Site Assessments
shall be paid by the Company upon demand of the registered holders (other
than the Company or any Affiliate) of, in the aggregate, a majority of the
principal amount of the Notes at the time outstanding (excluding any Notes
directly or indirectly owned by the Company or any Affiliate).
.. DEFAULT; REMEDIES; SUBROGATION... DEFAULT; REMEDIES;
SUBROGATION." If the Company fails to proceed with any removal or
remediation of Hazardous Substances causing any Adverse Environmental
Impact required by Environmental Laws or to comply with Environmental Laws
or otherwise fails to perform its obligations under this Article 11, at the
option of the registered holders (other than the Company or any Affiliate)
of, in the aggregate, a majority of the principal amount of the Notes at
the time outstanding (excluding any Notes directly or indirectly owned by
the Company or any Affiliate), such registered holders may, but shall not
be obligated to, do whatever is reasonable and in conformity with the
Environmental Laws at the Company's sole cost and expense to remove or
remediate such Hazardous Substances causing an Adverse Environmental Impact
or otherwise comply with Environmental Laws, and the indemnity provided in
11.2 hereof shall cover all such reasonable and necessary costs and
expenses and shall be payable by the Company on demand. Without in any way
limiting or affecting the Company's liability hereunder, Purchasers and
each registered holder of a Note shall be subrogated to any rights the
Company may have under any indemnifications from or agreements entered into
with any present, future or former owners, tenants, occupants or other
users of the Mortgaged Properties.
.. SURVIVAL... SURVIVAL." The obligations of the Company under this
Article 11 shall survive any payment of the Notes, any discharge,
satisfaction, release or assignment of any Security Document, the discharge
of the Company's obligations under the Collateral Agreements, any transfer
of the Mortgaged Properties or any part thereof, any exercise of remedies
by Purchaser or the registered holder of any Notes, including, without
limitation, the appointment of a receiver, any foreclosure of the Security
Documents or any transfer of the Mortgaged Properties (or any part thereof)
by deed in lieu of foreclosure, any investigation or any information that
may be obtained by Purchasers or the registered holder of any Notes before
or after the Acquisition Date, and any other event or circumstance
whatsoever.
.. CONFLICTS.. CONFLICTS". In the event of any conflict between the
terms of this Article 11 and those contained in the Mortgages, the terms
hereof shall control.
ARTICLE .."
REGISTRATION, TRANSFER, AND SUBSTITUTION OF NOTES
.. NOTE REGISTER; OWNERSHIP OF NOTES... NOTE REGISTER; OWNERSHIP OF
NOTES." The Company will keep at its principal office a register in which
the Company will provide for the registration of the Notes and the
registration of transfers of the Notes. The Company may treat the Person
in whose name any Note is registered on such register as the owner thereof
for the purpose of receiving payment of the principal of and the applicable
Premium, if any, and interest on such Note and for all other purposes,
whether or not such Note shall be overdue, and the Company shall not be
affected by any notice to the contrary.
.. TRANSFER AND EXCHANGE OF NOTES... TRANSFER AND EXCHANGE OF
NOTES." Upon surrender of any Note for registration of transfer or for
exchange to the Company at its principal office, at the expense of the
transferring parties, the Company will execute and the Company will
authenticate and deliver in exchange therefor a new Note or Notes in
denominations, as requested by the registered holder or transferee, which
aggregate the unpaid principal amount of such surrendered Note. Each such
new Note shall be registered in the name of such Person as such registered
holder or transferee may request, shall be dated so that there will be no
loss of interest on such surrendered Note and shall be otherwise of like
tenor.
.. REPLACEMENT OF NOTES... REPLACEMENT OF NOTES." Upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of any Note and, in the case of any such loss,
theft or destruction, upon delivery of an indemnity agreement reasonably
satisfactory to the Company from the registered holder of such Note and
financial information reasonably satisfactory to the Company verifying such
registered holder's ability to provide such indemnification, or in the case
of any such mutilation, upon the surrender of such Note for cancellation to
the Company at its principal office, at the expense of the party requesting
replacement, the Company will execute, authenticate and deliver, in lieu
thereof, a new Note of like tenor, dated so that there will be no loss of
interest on such lost, stolen, destroyed or mutilated Note. Any Note in
lieu of which any such new Note has been executed and delivered by the
Company shall not be deemed to be an outstanding Note for any purpose
hereof.
ARTICLE .."
PAYMENTS ON NOTES
So long as a Purchaser or its nominee shall hold any Note, the Company
will pay all sums becoming due on such Note for principal, the applicable
Premium, if any, and interest in immediately available funds by the method
and at the address specified for such purpose in the Schedule of
Information for Payment and Notices at the end hereof (the "Schedule of
Information for Payment and Notices"), or by such other method or at such
other address as a Purchaser shall have specified from time to time to the
Company in writing for such purpose, without the presentation or surrender
of such Note or the making of any notation thereon, except that any Note
paid or prepaid in full shall be surrendered to the Company for
cancellation at its principal office. Prior to any sale or other
disposition of any Note held by a Purchaser or its nominee, such Purchaser
will, at its election, either (a) endorse thereon the amount of principal
paid thereon and the last date to which interest has been paid thereon, or
(b) surrender such Note to the Company in exchange for a new Note or Notes
pursuant to Section 12.2. The Company will afford the benefits of this
Article 13 to any registered holder of a Note that has made the same
agreement relating to such Note as a Purchaser have made in this
Article 13.
ARTICLE .."
EVENTS OF DEFAULT AND ACCELERATION
.. EVENTS OF DEFAULT.. EVENTS OF DEFAULT". The occurrence of any of
the following conditions or events shall constitute an "Event of Default"
under this Agreement:
() PAYMENTS. The Company shall default in the payment when due
of any principal, Premium, if any, or interest on any Note (whether
the same becomes due and payable at maturity, by declaration or
otherwise) or any other amounts owing hereunder; or
() REPRESENTATIONS, ETC. Any representation or warranty made
in writing by or on behalf of the Company herein or in any Collateral
Agreement or in any statement or certificate delivered or required to
be delivered pursuant hereto or thereto shall prove to be untrue in
any material respect on the date as of which made or deemed made; or
() BREACH OF CERTAIN COVENANTS. The Company shall default in
the due performance or observance by it of any term, covenant or
agreement contained in Section 10.7 (to the extent such default could
reasonably be expected to have a Material Adverse Effect or adversely
affect Purchaser's rights in the Collateral), 10.8, 10.9, 10.11,
10.12, 10.13, 10.14, 10.19(b) or 10.20; or
() BREACH OF OTHER COVENANTS. The Company shall default in the
due performance or observance by it of any term, covenant or agreement
(other than those referred to in subsections (a), (b) or (c) of this
Section 14.1) contained in this Agreement and such default shall
continue unremedied for a period of at least 30 calendar days after
the earlier of (x) written notice to the defaulting party by any
registered holder of a Note or (y) a Responsible Officer has knowledge
of such default; or
() DEFAULT UNDER OTHER AGREEMENTS. (i) The Company shall
default in the payment when due of any principal of or interest on any
Debt (which Debt is in an aggregate principal amount of $2,000,000 or
more) and such default shall not be waived or cured within any
applicable grace or cure period; or (ii) the maturity of any Debt of
the Company in an aggregate principal amount of $2,000,000 or more
shall be accelerated or subject to acceleration due to a default
thereunder; or
() BANKRUPTCY, ETC. The Company shall commence a voluntary
case concerning itself under title 11 of the United States Code
entitled "Bankruptcy", as now or hereafter in effect, or any successor
statute thereto (the "Bankruptcy Code"); or an involuntary case is
commenced against the Company under the Bankruptcy Code and the
petition is not controverted within 10 Business Days, or is not
dismissed within 60 days, after commencement of the case; or a
custodian (as defined in the Bankruptcy Code) is appointed for, or
takes charge of, all or substantially all of the property of the
Company; or the Company commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the
Company; or there is commenced against the Company any such proceeding
which remains undismissed for a period of 60 days; or the Company is
adjudicated insolvent or bankrupt; or any order of relief or other
order approving any such case or proceeding is entered; or the Company
suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed
for a period of 60 days; or the Company makes a general assignment for
the benefit of creditors; or any corporate action is taken by the
Company for the purpose of effecting any of the foregoing; or
() ERISA. (i) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof or a
waiver of such standard or extension of any amortization period is
sought or granted under Section 412 of the Code, any Plan is, shall
have been or is reasonably likely to be terminated or the subject of
termination proceedings under ERISA, any Plan shall have an Unfunded
Current Liability, the Company or any Related Person has incurred or
is reasonably likely to incur a liability to or on account of a Plan
under Section 405, 409, 502(i), 501(1), 515, 4062, 4063, 4064, 4069,
4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of the Code, or
the Company or any Related Person has incurred or is reasonably likely
to incur liabilities pursuant to one or more employee welfare benefit
plan that provide benefits to retired employees or other former
employees (other than as required by Section 601 of ERISA); and
(ii) there shall result from any event or events described in clause
(i) of this subsection (f) the imposition or granting of a Lien, or a
liability or a material risk of incurring a liability; and (iii) any
Lien or liability referred to in clause (ii) of this subsection (f)
could reasonably be expected to have a Material Adverse Effect; or
() JUDGMENTS. There shall remain in force, undischarged,
unsatisfied, unstayed and unbonded, for more than 60 days, any final
judgment entered against any one or more of the Company which is not
funded by insurance in due course in accordance with applicable
insurance coverage, from which no further appeal may be taken and
which, with other outstanding undischarged, unsatisfied, unstayed and
unbonded final judgments against such Person not funded by insurance
in due course in accordance with applicable insurance coverage,
exceeds $5,000,000 in the aggregate.
.. ACCELERATION... ACCELERATION."
() Upon the occurrence of any Event of Default described in
Section 14.1(f), the unpaid principal amount of and accrued interest
on the Notes shall automatically become due and payable, and there
shall also be due and payable the applicable Premium in respect of the
unpaid principal amount of the Notes, all without presentment, demand,
protest, notice of intent to accelerate, notice of acceleration, or
any other notice of any kind, which are hereby waived.
() Upon the occurrence of any Event of Default other than as
described in Section 14.1(f), any registered holder or registered
holders (other than the Company or any Affiliate thereof) of, in the
aggregate, fifty-one percent (51%) or more in principal amount of the
Notes at the time outstanding (excluding any Notes directly or
indirectly owned by the Company or any Affiliate) may at any time
(unless all defaults shall theretofore have been remedied and all
costs and expenses including, without limitation, reasonable
attorneys' fees and expenses incurred by or on behalf of the
registered holders of the Notes by reason thereof shall have been paid
in full by the Company) at its or their option, by written notice or
notices to the Company, declare all the Notes to be due and payable,
whereupon the same shall forthwith mature and become due and payable,
together with interest accrued thereon, and there shall also be due
and payable the applicable Premium in respect of the principal amount
of the Notes so declared due and payable, all without presentment,
demand, protest, notice of intent to accelerate, notice of
acceleration, or any other notice of any kind (except as otherwise
specifically provided herein), which are hereby waived. The Company
acknowledges that Purchasers purchased the Notes on the basis and
assumption that Purchasers and the registered holders from time to
time of the Notes would receive the payments of principal and/or
interest set forth in Section 2.1 and Articles 7 and 8 hereof for the
full term of the Notes; therefore, whenever the maturity of the Notes
has been accelerated by reason of an Event of Default, a tender of the
amount necessary to satisfy any part or all of the indebtedness
represented by the Notes paid at any time following such Event of
Default and prior to a foreclosure or trustee's sale shall be deemed a
voluntary prepayment, and such payment shall include the applicable
Premium. Similarly, any purchase at a foreclosure sale or a trustee's
sale shall be deemed a voluntary prepayment, and the registered
holders of the Notes shall, to the extent permitted by law, receive
out of the proceeds of such sale, in addition to all other amounts to
which they are entitled, the applicable Premium.
.. REMEDIES... REMEDIES." If any Event of Default shall occur and
be continuing, the registered holder of any Note at the time outstanding
may proceed to protect and enforce the rights available to such registered
holder at law, in equity, by statute or otherwise, whether for the specific
performance of any agreement contained herein or, in the case of any
registered holder of Notes, in such Note, or for an injunction against a
violation of any of the terms hereof or thereof, or in aid of the exercise
of any power granted hereby or thereby or by law or otherwise. In case of
a default in the payment of any principal of or applicable Premium, if any,
or interest on any Note, the Company will pay to the registered holder
thereof such further amount as shall be sufficient to cover the costs and
expenses of collection, including, without limitation, reasonable
attorneys' fees, expenses and disbursements incurred in connection
therewith. No course of dealing and no delay on the part of any registered
holder of any Note in exercising any right, power or remedy shall operate
as a waiver thereof or otherwise prejudice such registered holder's rights,
powers or remedies except as expressly provided for herein. No right,
power or remedy conferred hereby upon any registered holder of any Note or
by any Note upon any registered holder thereof shall be exclusive of any
other right, power or remedy referred to herein or therein or now or
hereafter available at law, in equity, by statute or otherwise. Subject to
Section 14.2(b), any registered holder or registered holders (other than
the Company or any Affiliate) of, in the aggregate, a majority in principal
amount of the Notes at the time outstanding (excluding any Notes directly
or indirectly owned by the Company or any Affiliate) may at any time pursue
any remedies available under this Agreement or any of the Collateral
Agreements.
ARTICLE .."
EXPENSES
The Company will pay all reasonable expenses in connection with the
negotiation, execution and delivery, performance and enforcement, and
amendment or waiver of any terms or provisions of this Agreement, any
Collateral Agreement, and the Notes, including, without limitation: (a)
the cost and expenses of preparing and reproducing this Agreement, the
Collateral Agreements and the Notes, of furnishing all opinions of Special
Counsel, Purchasers' special local counsel, and counsel for the Company
(including any opinions requested by Special Counsel as to any legal matter
arising hereunder) and all certificates on behalf of the Company and of the
Company's performance of and compliance with all agreements and conditions
contained therein on its part to be performed or complied with; (b) the
cost of delivering to each Purchaser's principal office, insured to such
Purchaser's satisfaction, the Notes sold to each Purchaser hereunder; (c)
the reasonable out-of pocket expenses and reasonable fees, expenses and
disbursements of Special Counsel and Purchaser's special local counsel in
connection with any amendments or waivers hereunder; and (d) the cost and
expense related to title insurance and charges, survey, environmental
audit, engineering and architect fees, recording fees, and real estate
taxes contemplated herein or in the Collateral Agreements. The Company
also will pay, and will save each Purchaser and each registered holder of
any Notes harmless from, (i) all claims in respect of the fees of any
brokers and finders, except those engaged by such Purchaser, and (ii) any
and all liabilities with respect to any taxes (including interest and
penalties), other than federal income taxes, that may be payable in respect
of (A) the execution and delivery hereof and of the Collateral Agreements,
(B) the issue of the Notes hereunder, and (C) any amendment or waiver under
or in respect hereof, of any Collateral Agreement or of the Notes.
ARTICLE .."
MISCELLANEOUS
.. SURVIVAL... SURVIVAL." All representations, warranties and
covenants contained herein, in the Notes and in any other Collateral
Agreement or made in writing by or on behalf of the Company in connection
with the transactions contemplated hereby and thereby shall survive the
execution and delivery hereof, any investigation at any time made by a
Purchaser or on such Purchaser's behalf, the purchase of the Notes
hereunder, or any disposition or payment of the Notes. All statements
contained in any certificate delivered by or on behalf of the Company
pursuant hereto or in connection with the transactions contemplated hereby
shall be deemed representations and warranties of the Company hereunder.
.. AMENDMENTS AND WAIVERS... AMENDMENTS AND WAIVERS." Any term
hereof or of the Notes may be amended (with written consent of the
Company), and the observance of any term hereof or of the Notes may be
waived (either generally or in a particular instance and either
retroactively or prospectively), only upon the written consent of the
registered holder or registered holders (other than the Company or any
Affiliate) of, in the aggregate, sixty-six and two-thirds percent (66-2/3%)
or more in principal amount of the Notes at the time outstanding (excluding
any Notes directly or indirectly owned by the Company or any Affiliate),
provided that without the prior written consent of the registered holders
of all the Notes at the time outstanding (excluding any Notes directly or
indirectly owned by the Company or any Affiliate), no such amendment or
waiver shall (a) extend the fixed maturity or reduce the amount or extend
the time of payment of any principal or premium payable (whether as an
installment or upon any prepayment) on any Note of such class; (b) reduce
the percentage set forth above of the principal amount of the Notes, the
registered holders of which are required to consent to any amendment or
waiver set forth in such subdivision; or (c) change the percentage of the
principal amount of the Notes, the registered holders of which may declare
the Notes to be due and payable as provided in Section 14.2. Any amendment
or waiver effected in accordance with this Section 16.2 shall be binding
upon each registered holder of any Note, at the time outstanding, each
future registered holder of any Note, and the Company.
.. INDEMNIFICATION.. INDEMNIFICATION". The Company will indemnify
and hold harmless each Indemnified Party from and against any and all
losses, claims, damages and liabilities, joint or several (including all
reasonable legal fees or other expenses reasonably incurred by any
Indemnified Party in connection with the preparation for or defense of any
pending or threatened claim, action or proceeding, whether or not resulting
in any liability), to which such Indemnified Party may become subject
(whether or not such Indemnified Party is a party thereto) under any
applicable federal or state law or otherwise caused by or arising out of,
or allegedly caused by or arising out of, this Agreement, any Collateral
Agreement, or any transaction contemplated hereby, other than losses,
claims, damages or liabilities resulting from any grossly negligent or
unlawful act by Indemnified Party seeking indemnification hereunder. THESE
PROVISIONS ARE INTENDED TO INDEMNIFY THE INDEMNIFIED PARTIES AGAINST THE
RESULTS OF THEIR OWN NEGLIGENCE.
Promptly after receipt by an Indemnified Party of notice of any claim,
action or proceeding with respect to which an Indemnified Party is entitled
to indemnity hereunder, such Indemnified Party will notify the Company of
such claim or the commencement of such action or proceeding, provided that
the failure of an Indemnified Party to give notice as provided herein shall
not relieve the Company of its obligations under this Section 16.3 with
respect to such Indemnified Party, except to the extent that the Company is
actually prejudiced by such failure. The Company will assume the defense
of such claim, action or proceeding and will employ counsel satisfactory to
the Indemnified Party and will pay the fees and expenses of such counsel.
Notwithstanding the preceding sentence, the Indemnified Party will be
entitled, at the expense of the Company, to employ counsel separate from
counsel for the Company, and for any other party in such action, if the
Indemnified Party reasonably determines that a conflict of interest or
other reasonable basis exists that makes representation by counsel chosen
by the Company not advisable. If an Indemnified Party appears as a witness
in any action or proceeding brought against the Company or any of its
Affiliates (or any of their partners, officers, directors or employees) in
which an Indemnified Party is not named as a defendant, the Company agrees
to reimburse such Indemnified Party for all out-of-pocket expenses incurred
by it (including fees and expenses of counsel) in connection with the
appearance as a witness. The Indemnified Party shall settle no claim or
take any other action prejudicing the Company's defense without the consent
of the Company, which consent will not be unreasonably withheld or delayed.
Purchaser agrees to reasonably cooperate with the Company in the defense of
any such action or proceeding.
.. USURY NOT INTENDED... USURY NOT INTENDED." The Company, Purchasers
and all other registered holders of any Notes intend
to conform strictly to the usury laws in force that apply to the transactions
evidenced or contemplated hereby. Accordingly, all agreements among the
Company, Purchasers, and any other registered holder of any Notes, whether
now existing or hereafter arising and whether written or oral, are hereby
limited so that in no contingency, whether by reason of acceleration of the
maturity of the Notes, or otherwise, shall the interest (and all other sums
that are deemed to be interest) contracted for, charged, received, paid
or agreed to be paid exceed the Highest Lawful Rate (as defined below).
The Company and Purchasers stipulate and agree that the terms and provisions
contained in this Agreement and the Collateral Agreements are not intended to
and shall never be construed to create a contract to pay for the use,
forbearance or detention of money an amount in excess of the maximum amount
permitted to be charged by applicable law, if any.
Anything in this Agreement or the Collateral Agreements to the
contrary notwithstanding, neither the Company nor any other party now or
hereafter becoming liable for payment of the Notes shall ever be required
to pay interest on or with respect to the Notes or any other obligation
hereunder at a rate in excess of the Highest Lawful Rate, and if the
effective rate of interest that would otherwise be payable under this
Agreement or on or with respect to the Notes would exceed the Highest
Lawful Rate, or if the registered holders of such Notes or obligation shall
receive anything of value that is deemed or determined to constitute
interest that would increase the effective rate of interest payable under
this Agreement or on or with respect to the Notes or the Collateral
Agreements to a rate in excess of the Highest Lawful Rate, then (a) the
amount of interest that would otherwise be payable under this Agreement,
the Notes or the Collateral Agreements shall be reduced to the amount
allowed at the Highest Lawful Rate under applicable law, and (b) any
unearned interest paid by the Company or any interest paid by the Company
in excess of the Highest Lawful Rate shall, at the option of the registered
holders of the Notes, be either refunded to the Company or credited on the
principal of such Notes. It is further agreed that, without limitation of
the foregoing, all calculations of the rate of interest contracted for,
charged or received by any registered holder of the Notes, or under this
Agreement, that are made for the purpose of determining whether such rate
exceeds the Highest Lawful Rate, shall be made, to the extent permitted by
applicable law (now or, to the extent permitted by law, hereafter enacted)
governing the Highest Lawful Rate, by (i) characterizing any nonprincipal
payment as an expense, fee or premium rather than as interest, and
(ii) amortizing, prorating, allocating and spreading in equal parts during
the period of the full term of the Notes (including the period of any
renewal or extension thereof), all interest at any time contracted for,
charged or received by such registered holder in connection therewith. As
used in this Section 16.4, the term "Highest Lawful Rate" means the maximum
nonusurious rate of interest permitted from time to time to be contracted
for, taken, charged or received with respect to the Notes by the registered
holders thereof, under applicable law as in effect with respect to this
Agreement or the Notes.
.. NOTICES... NOTICES."
() For all purposes under this Agreement, the address of the
Company shall be P.O. Box 93, 110 South Texas Street, Pittsburg, Texas
75686, Attention: Richard Cogdill, Chief Financial Officer, telecopy
no. 903-855-4934 and for each Purchaser shall be the address set forth
on the Schedule of Information for Payment and Notices or such other
address of which all such Persons have received ten (10) days prior
written notice.
() Any notice, demand, request or report required or permitted
to be given or made to the Company or a Purchaser under this Agreement
shall be in writing and shall be deemed given or made when delivered
in person, when sent if by overnight courier or telecopy (if followed
by hard copy) or five (5) Business Days after the date when sent by
United States registered or certified mail to any such Person at its
address referenced in Section 16.5(a) above.
.. REPRODUCTION OF DOCUMENTS... REPRODUCTION OF DOCUMENTS." This
Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by Purchasers at the Closing (except the
Notes themselves), and (c) financial statements, certificates and other
information previously or hereafter furnished to Purchasers, may be
reproduced by a Purchaser or the registered holder of any Notes by any
photographic, photostatic, microfilm, microcard, miniature photographic or
other similar process and a Purchaser or the registered holder of any Notes
may destroy any original document so reproduced. The Company agrees and
stipulates that any such reproduction shall be admissible in evidence as
the original itself in any judicial or administrative proceeding (whether
or not the original is in existence and whether or not such reproduction
was made by a Purchaser or the registered holder of any Notes in the
regular course of business) and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
.. SUCCESSORS AND ASSIGNS... SUCCESSORS AND ASSIGNS."
(a) This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns
of the parties hereto, whether so expressed or not, and shall inure to
the benefit of and be enforceable by any registered holder or
registered holders from time to time of any Notes. The
representations, warranties and covenants of the Company hereunder are
intended to be for the benefit of, and inure to, all registered
holders from time to time of any of the Notes.
(b) The Company acknowledges that Purchasers intend to
participate all or a portion of the Notes to one or more of such
Purchasers' Affiliates and that all of the representations,
warranties, covenants and agreements of the Company shall be for the
benefit of Purchasers' Affiliates as well as Purchaser.
.. ENTIRE AGREEMENT.. ENTIRE AGREEMENT". THIS WRITTEN AGREEMENT
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
.. GOVERNING LAW... GOVERNING LAW." THIS AGREEMENT AND THE NOTES
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF TEXAS (WITHOUT REGARD TO ITS CONFLICT OF LAW PROVISIONS).
.. INVALID PROVISIONS... INVALID PROVISIONS." If any provision
hereof or any application thereof shall be invalid or unenforceable, the
remainder hereof and any other application of such provision shall not be
affected thereby.
.. HEADINGS... HEADINGS." The Table of Contents and Section
headings herein are for purposes of reference only and shall not constitute
a part hereof.
.. COUNTERPARTS... COUNTERPARTS." This Agreement may be executed in
any number of counterparts, each of which shall be an original, but all of
which together shall constitute one instrument.
.. FURTHER ACTION.. FURTHER ACTION". The parties shall execute all
documents, provide all information, and take or refrain from taking all
actions as may be necessary or appropriate to achieve the purposes of this
Agreement.
.. CREDITORS.. CREDITORS". None of the provisions of this Agreement
shall be for the benefit of or enforceable by any creditors of the Company,
except as otherwise expressly provided herein.
.. WAIVER.. WAIVER". No failure by any party to insist upon the
strict performance of any covenant, duty, agreement, or condition of this
Agreement or to exercise any right or remedy consequent upon a breach
thereof shall constitute a waiver of any such breach or any other covenant,
duty, agreement, or condition. No single or partial exercise of any power
or right shall preclude any other or further exercise thereof or the
exercise of any other power or right. No waiver by a party of any right
hereunder or of any default by another shall be binding upon such party
unless in writing.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
PILGRIM'S PRIDE CORPORATION
By:
Name: Clifford Butler
Title: Executive President
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
By:
Name:
Title:
SIGNATURE 1A (CAYMAN), LTD.
By: John Hancock Mutual Life Insurance Company,
Portfolio Advisor
By:
Name:
Title:
AGREEMENT BETWEEN PILGRIM'S PRIDE CORPORATION
AND CERTAIN SRAREHOLDERS
AGREEMENT MADE this 28th day of November, 1996, by, between and among
LONNIE A. PILGRIM, LONNIE KEN PILGRIM, GRETA PILGRIM OWENS, and PATRICK
WAYNE PILGRIM (herein singly called "Shareholder" and collectively
called "Shareholders"), and PILGRIM'S PRIDE CORPORATION, a Delaware
corporation with its principal offices at 110 South Texas Street,
Pittsburg, Texas (herein called the "Company").
PRELIMINARY STATEMENT
In order to meet its continuing business needs, the Company will incur
after the date of this Agreement certain indebtedness by reason of credit
extended to it by certain creditors who will require one or more of the
Shareholders to guarantee such indebtedness as a condition to extending such
credit ("Guaranteed Indebtedness").
As a condition to any Shareholder's being contingently liable as a
Guarantor on any Guaranteed Indebtedness all of the Shareholders require
that all Shareholders shall be liable ratably with their shares in the
Company for each such Guaranteed Indebtedness either as a Guarantor or as
an Indemnitor of such Shareholders who are Guarantors and that the Company
shall pay each Shareholder a reasonable fee for such guaranty or indemnity
undertaking.
AGREEMENT
In consideration of the premises and the mutual covenants contained
herein it is understood and agreed to by the parties hereto as follows:
1. GUARANTY OF GUARANTEED INDEBTEDNESS.
1.01. GUARANTY. In reliance upon the representations and warranties
herein and subject to the terms and conditions hereof, during the term of this
Agreement any Shareholder shall, when required by the Company, guarantee any
Eligible Indebtedness to be incurred by the Company in form and substance
satisfactory to the related creditor ("Guaranty"). Any Eligible
Indebtedness so guaranteed is herein referred to as "Guaranteed Indebtedness."
1.02. ELIGIBLE INDEBTEDNESS. The term "Eligible indebtedness" shall
mean any indebtedness to be incurred by the Company after the date of this
Agreement and required by its business needs by reason of credit to be extended
to the Company by a creditor who shall require one or more of the Shareholders
to guarantee such indebtedness as a condition to extending such credit
to the Company. For purposes of this Agreement a resolution by the
Board of Directors that such indebtedness is required by the business needs of
the Company shall be binding and conclusive upon all parties to this Agreement.
1.03. CONDITION PRECEDENT TO ISSUANCE OF GUARANTY. No Shareholder
shall be required to issue a Guaranty until they have been furnished a
certificate of the Secretary of the Company certifying (i) the Eligible
Indebtedness (including the maximum amount of indebtedness, the name of the
creditor and the terms and conditions thereof) to be so guaranteed; (ii) a
resolution of the Board of Directors of the Company authorizing the Company to
incur the Eligible Indebtedness; and (iii) the principal amount of all
Guaranteed Indebtedness then outstanding.
1
2. INDEMNIFICATION OF GUARANTOR.
2.01. INDEMNITY. All Shareholders shall indemnify a Shareholder
who issues a Guaranty ("Guarantor") against all loss, cost and expense
(including reasonable attorneys' fees) which Guarantor shall incur with the
respect to the Guaranty ("Total Indemnified Amount"); provided, however, that
each Shareholder's liability of indemnity hereunder shall be several and shall
be limited to an amount which is equal to that proportion of the Total
Indemnified Amount as the shares of Common Stock of the Company owned of record
or beneficially by such Shareholder on the date of issuance of such Guaranty
shall bear to the shares of Common Stock of the Company owned of record or
beneficially by all Shareholders (including Guarantor) on the date of issuance
of the Guaranty ("Indemnity"). Any Shareholder who is contingently
liable on an Indemnity is herein referred to as "Indemnitor".
2.02. TERMINATION OF INDEMNITY. Notwithstanding the termination
of this Agreement an Indemnity with respect to a Guaranty which shall have
been issued shall continue until (i) the related Guaranteed Indebtedness shall
have been paid in full by the Company; or (ii) the Guarantor shall have been
released from the Guaranty by the creditor; or (iii) the Indemnity shall have
been discharged in full by payment required of the Shareholders under the
Indemnity or otherwise, whichever shall first occur ("Indemnity Termination
Date").
3. GUARANTY OR INDEMNITY FEE.
3.01. GENERAL. So long as a Guaranty shall be outstanding the
Company shall pay a fee to each Shareholder for the undertaking herein
by such Shareholder under a Guaranty issued on or after the date of this
Agreement or an Indemnity covering such Guaranty computed and subject to
limitations as provided herein ("Fee").
3.02. DETERMINATION AND PAYMENT OF FEES ATTRIBUTABLE TO EACH
SHAREHOLDER. The total Fees which shall accrue with respect to any calendar
quarter shall be an amount equal to 1/4th of a percent multiplied by the
average daily balance of the principal amount of Guaranteed Indebtedness
outstanding during such calendar quarter. The total Fees for a particular
calendar quarter shall be apportioned among the Shareholders in the
proportion that they share the contingent liability of such Guaranteed
Indebtedness, however, in no event will a guaranteeing Shareholder receive less
than 5-percent of the allocable fee. For this purpose contingent liability
shall be determined under Section 2.01 hereof except that each Guarantor's
liability shall be deemed an Indemnity and shall be limited to such amount as
such Guarantor would be contingently liable as an Indemnitor rather than a
Guarantor. All Fees shall be paid quarterly within 45 days after the end of
each calendar quarter.
4. REPRESENTATIONS AND WARRANTIES.
4.01. Representations and Warranties of Company. Company represents and
warrant to the Shareholders that:
(a) GUARANTIES REQUIRED BY CREDITORS. Certain creditors or
proposed creditors of the Company (including certain lessors) have
advised the Company that they will not extend credit to the Company
after the date of this Agreement without the Guaranty of Lonnie A.
Pilgrim, or other Shareholders of the Company.
(b) CREDIT REQUIRED BY THE BUSINESS NEEDS OF COMPANY. All
Guaranteed Indebtedness will be required by the business needs of the
Company.
4.02. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS. Each
Shareholder represents and warrants to the other Shareholder and to the Company
that:
(a) CONDITION TO CONTINGENT LIABILITY. As a condition to
such Shareholder's being contingently liable with respect to his
Guaranty or Indemnity herein such Shareholder requires (i) that all
of the Shareholders shall be liable contingently as provided in this
Agreement (either as a Guarantor or as an Indemnitor of such
Shareholders who are Guarantors) ratably with their shares in the
Company for each such Guaranteed Indebtedness; and (ii) that the Company
shall pay each such Shareholder a reasonable fee for such undertaking'
as Guarantor or Indemnitor.
(b) SHARE OWNERSHIP . Each Shareholder now owns of record or
beneficially such number of shares, $1 par value, of Common Stock of the
Company as is set forth opposite his signature subscribed at the end of
this Agreement.
4.03. REPRESENTATIONS OF PARTIES AS TO REASONABLENESS OF FEES. Each
party hereto represents that the amount of Fees to be paid to each Shareholder
as provided herein is reasonable under the circumstances.
5. MISCELLANEOUS.
5.01. PRIOR AGREEMENT. This Agreement shall supersede any obligation to
issue a Guaranty in the future or any Indemnity with respect to such future
Guaranty as shall have been required by any such prior Agreement among
Shareholders.
5.02. NOTICES. All communications and notices hereunder shall be in
writing and shall be mailed or delivered to the respective Shareholder at
their addresses as appear herein below in this Agreement or to the Company at
its mailing address, P.O. Box 93, Pittsburg, Texas 75686 or delivered to its
principal office, 110 South Texas Street, Pittsburg, Texas. The Company or
any Shareholder may change it or his address where all communications and
notices may be sent hereunder by addressing notice of such change in the manner
above provided.
5.03. EXPENSES. Inasmuch as this Agreement is for the primary
benefit of the Company, the Company shall pay all counsel fees and other
expenses incurred in connection with the preparation and execution of this
Agreement.
5.04. SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. All
representations, warranties and covenants made by each Shareholder or the
Company herein or in any certificate or other instrument delivered by and
pursuant hereto or in connection herewith, shall be deemed to have been relied
upon by all parties hereto, and shall survive throughout the term of this
Agreement and for two years thereafter regardless of any investigation made by
or on behalf of any party hereto.
5.05. CONTROLLING LAW. The validity of this Agreement shall be
governed by the laws of the State of Texas, and this Agreement shall be
construed and in force in accordance with the laws of the State of Texas.
5.06. BENEFIT. This Agreement shall be binding upon and inure to the
benefit of (i) any successor of the Company by statutory merger or
consolidation; and (ii) the estates of the respective Shareholders except
that the death of a Shareholder shall discharge such deceased Shareholder's
obligation to either issue a Guaranty or incur an Indemnity, with respect to
Eligible Indebtedness to be incurred after such Shareholder's death but nothing
herein shall affect such deceased Shareholder's obligation of Guaranty or
Indemnity with respect to Guaranteed Indebtedness incurred prior to his death.
5.07. PERFORMANCE. Time is of the essence in this Agreement. All
obligations of any party are performable in Camp County, Texas.
5.08. ENTIRE AGREEMENT. This instrument contains the entire Agreement
between the parties hereto with the respect to the transactions contemplated
herein. No modification, alteration or amendment to this Agreement nor any
waiver of any provision hereof shall be valid or effective unless in writing
and executed by all parties hereto.
5.09. SEVERABILITY. If any part of this Agreement is judicially held
to be invalid, unenforceable or void, such holding shall not have the effect of
invalidating or voiding the remainder of this Agreement not so declared, or
any part thereof, the parties hereby agreeing that the part or parts so held
to be invalid, unenforceable or void shall be deemed to have been
stricken here from with the same force and effect as if such part or parts had
never been included herein.
5.10. TERMINATION OF AGREEMENT.
(a) GENERAL. Unless sooner terminated by the consent of
all the parties hereto this Agreement shall terminate upon the earlier
of:
(1) NOTICE EXPIRATION OF TIME. Expiration of 10 years
after the date of this Agreement.
(2) NOTICE BY MAJORITY OF SHAREHOLDERS. Expiration of 30
days after a majority in interest of the Shareholders shall have
given written notice to the Company to such effect on or after
January 1, 1997.
(3) DEATH OF MAJORITY IN INTEREST OF SHAREHOLDERS. Upon
the death of any Shareholder if immediately after such death
less than a majority in interest of the Shareholders shall then
be living.
(b) DETERMINATION OF MAJORITY IN INTEREST. The respective
interests of the Shareholders for purposes of determining a "majority in
interest" shall be determined on the basis of their respective ownership
of record and beneficially of shares of Common Stock of the Company at
the particular time in question.
(c) EFFECT OF TERMINATION. Upon the termination of this
Agreement the obligations of all parties hereto shall then be
discharged in full except that all Guaranties and Indemnities then
outstanding shall remain in full force according to their respective
terms and conditions, and the Company shall pay the Fees to the
Shareholders with respect to Guaranteed Indebtedness outstanding
after termination as provided in Article 3.
This Agreement is signed and delivered on the date and year first above
set forth in multiple counterparts each of which shall be an original.
2
Attest PILGRIM'S PRIDE CORPORATION
By:
Assistant Secretary Chief Financial Officer
SHAREHOLDERS
Shares Now Owned
Name of Record Or
(SIGNATURES) ADDRESS BENEFICIALLY
PO Box 93 16,648,727
Lonnie A. Pilgrim Pittsburg, TX 75686
Patty Pilgrim (wife ofLonnie A. Pilgrim)
Lonnie Ken Pilgrim Pittsburg, TX 75686 375,500
Greta Pilgrim Owens 375,500
370,982
Patrick Wayne Pilgrim
17,770,709
AIRCRAFT LEASE EXTENSION AGREEMENT
Re: Aircraft Lease Agreement dated November 15, 1984 between B.P.
Leasing Co. (L.A. Pilgrim, Individually) "LESSOR" and Pilgrim's Pride
Corporation (formerly Pilgrim Industries, Inc.) "LESSEE".
Although the above referenced lease states a term of 4-years to November
15, 1988, and was previously extended 4-years to November 15, 1992, it is
agreed that effective November 15, 1992, the referenced lease will be
automatically renewed on an annual basis unless otherwise notified in
writing by Lessor or Lessee 90-days prior to such annual renewal period.
LESSOR LESSEE
Lonnie A. Pilgrim Clifford E. Butler
dba B.P. Leasing Co. Pilgrim's Pride Corporation
Executive President
BROILER GROWER CONTRACT
This contract entered into between Pilgrim's Pride
Corporation, and Lonnie Pilgrim (Grower Name)
hereinafter called, Pilgrim Farm 30 (Farm Name)
and Grower respectively, this 6th day of May, 1997 for
about 192,000 chickens per batch. Beginning with sales
January 12, 1997, this contract will remain in effect
from batch to batch ofbroilers until such time that
either party notifies the other of plans to discontinue
this agreement.
1. Pilgrim will furnish baby chicks, feed, medication, vaccines, catchers,
loaders, and will haul the grown birds.
2. Grower will furnish housing, equipment (must include a sanitary method of
dead bird disposal), feed tank that has a O.S.H.A. approved ladder, labor
(including labor to help unload and place chicks under brooders, and also to
make houses ready for catching and loading), litter, utilities, heat and
other essentials, amount and type to be prescribed by Pilgrim. In event
grower does not furnish labor for placing chicks or preparing house for
catching and loading, he will be charged a minumum of $10.00 per house plus
$1.00 per thousand. This will be charged to his personal account rather than
formula cost.
3. Grower agrees to dispose of all dead birds and poultry house litter in
accordance with federal, state and local laws, rules and regulations.
4. Grower will make ready the house and equipment, clean the house, and do
other things necessary as prescribed by Pilgrim, before receiving the baby
chicks.
5. A Pilgrim serviceman, or other agent, shall have the right to enter
premises of grower where said chickens are located, to check with grower and
inspect said chickens and environmental conditions to see that reasonable
care is given chickens. Grower agrees to follow growing program as
instructed by Pilgrim's servicemen.
6. Grower must provide an all weather road to feed tanks and chick delivery
doors. Wrecker bill will be charged to grower's personal account.
7. Title to the chickens and all feed and medication remains the property of
Pilgrim at all times.
8. Grower agrees that in the event he calls and reports his tank empty and
ready for L.D. feed; yet there is still feed in tank when truck arrives, and
the feed has to be returned to the Mill, there will be a $25.00 charge made
to his personal account and withheld from his settlement.
9. Pilgrim will market chickens when and where it appears to be the best
advantage. Pilgrim will receive proceeds from sale of chickens.
10. Grower will follow the program prescribed by Pilgrim in getting birds ready
for catch. In the event program is not followed, $100 will be charged to
personal account for each house in which program was not followed.
11. Grower agrees to report to the dispatcher, at the Feed Mill, on the morning
following the movement of all birds, as to the amount of feed left. Please
report even if all tanks are empty, so accounting can start processing your
settlement.
12. In times of adverse weather conditions, such as extreme cold, grower agrees
to make a special effort to minimize death losses from lack of heat, lack of
cooling and lack of water.
13. Grower agrees to have no other poultry, fowl or ratites other than those
that are property of Pilgrim's.
14. Grower agrees not to use any herbicide or pesticide, in or around chicken
houses, unless such use is approved by a Pilgrim's serviceman. Grower also
agrees not to use any feeds or medication unless supplied by Pilgrim and to
use shavings only from Pilgrim's approved suppliers.
15. It is expressly understood and agreed by the parties that each is an
independent contractor and that neither party, its agent or employees, shall
be considered to be the employees or the agent of the other party for any
purpose whatsoever.
16. All chickens on each farm will be settled as one unit regardless of the
number of houses. If all houses are not sold within the same week,
settlement will be made in accordance with the sale of the last house.
17. Payment to the grower will be as follows:
(a) Each week the formula cost will be calculated for each Grower selling
that week. An average cost will be calculated for the week by dividing the
total costs of all growers (excluding company employees and poultry service
contractors) by their net pounds. Any Grower with a formula cost exceeding
the average by 1.80 cents or more will be removed from the group and the
average recalculated.
The Grower's payment per net lb. will be computed using 4.30 cents per
pound as the base pay. If the Grower's cost is less than average, the
payment will be 4.30 cents plus the deviation from average. If the Grower's
cost is greater than average he will receive 4.30 cents minus the deviation
from average.
For example, a Grower that has a 0.30 cents below average cost will get
0.30 cents added to the base pay. If the cost was 0.30 cents above average
this cost would be subtracted from the base pay down to our minimum of
3.25 cents per pound.
Beginning with the fourth Monday in October the Grower will receive an
additional fuel supplement payment according to the following schedule:
CHICKS FUEL SUPPLEMENT CHICKS FUEL SUPPLEMENT
PLACED PER 1000 HEAD CAPACITY PLACED PER 1000 HEAD CAPACITY
1st Week $ 7 14th Week $20
2nd Week $ 9 15th Week $20
3rdWeek $11 16th Week $20
4thWeek $13 17th Week $19
5th Week $15 18th Week $17
6th Week $17 19th Week $15
7th Week $19 20th Week $13
8th Week $20 21st Week $11
9th Week $20 22nd Week $ 9
10th Week $20 23rd Week $ 7
11th Week $20 24th Week $ 6
12th Week $20 25th Week $ 5
13th Week $20 26th Week $ 4
(b) In order to figure formula cost per lb., the following price schedule
will be used:
Feed, 8.5 cents per lb.; chicks 16.00 cents each; medication, cost + 10%.
The net weight (scale weight minus condemned) will be used in calculating
formula cost per lb. As technological advances are made, it will be necessary
to re-evaluate formula cost.
(c) Condemnation for all causes other than bruises, cadavers,
contamination, overscald, and without viscera will be deducted from scale
weight. It will be calculated by using the average weight for the lot
multiplied by the total number of condemned birds, other than those
condemned for the causes mentioned above in this paragraph. This weight plus
inflammatory process parts x 126% plus 1/2 the weight of other condemned
parts multiplied by 126% will be the condemned weight.
(d) Settlements will be made on Friday following the previous week's close.
For example, on the week closing January 18, 1997 settlements will be mailed
on January 24,1997.
18. An accounts payable to Pilgrim is authorized to be deducted from the Grower
payment, unless other arrangements have been made.
19. This contract is between Pilgrim's and grower for this farm only and is not
transferable to other farms belonging to same grower nor to another party
for this farm.
Pilgrim's Pride Corporation has engaged a group of banks to provide
financing for the poultry covered by this Agreement. In furtherance
of this financing, ................. is to take control of such poultry,
and the undersigned Grower has been appointed agent as for
........................for this purpose, in accordance with the Field
Agent Agreement attached hereto. The terms and conditions of
this Field Agent Agreement are hereby incorporated by reference in this
agreement and, to the extent inconsistent, take precedence. In no event
may Pilgrim's Pride
Corporation remove any poultry from Grower's premises without written
authorization from
We, the undersigned, agree to carry out the above contract.
PILGRIM'S PRIDE CORPORATION GROWER
By: \s\Rodney Reed \s\ Lonnie Pilgrim
PILGRIM'S PRIDE CORPORATION
Light Breed
Commercial Egg Grower Contract
This contract entered into between Pilgrim's Pride Corporation and Pilgrim
Poultry G. P., hereinafter called Pilgrim's and grower, respectively,
this 7th day of May, 1997 for about 1,500,000 pullets for the production
of commercial eggs. This agreement shall be automatically extended from one
year to the next unless canceled by either party with six (6) months notice.
1. Pilgrim's will furnish the chickens, feed, medication, vaccines,
disinfectant, insecticide for bird treatment, labor for beak trim when
necessary, and other items necessary for production of said flock.
2. Grower will furnish housing, equipment, labor, utilities, other
essentials and keep accurate records. Amount and type will be prescribed
by Pilgrim's. (It is understood that this will include an approved egg
handling and storage room equipped with an approved temperature and
humidity control, a method of sanitary disposal of birds and will keep no
other birds on farm.)
3. Grower will make ready the house and equipment, clean the house, and do
other things necessary, as prescribed by Pilgrim's, before receiving the
birds.
4. The producer agrees to notify Pilgrim's of any emergency, unusual
conditions, situation or irregularity concerning the flock. Pilgrim's is
authorized to use their best judgment in remedying as far as possible the
condition or conditions, even to the extent of disposing of the entire
flock.
5. Grower agrees to select, separate and cull the eggs produced by this
flock, in accordance with requirements and specifications of Pilgrim's .
6. Eggs shall be cleaned and/or oiled only by methods approved by Pilgrim's.
7. Grower must provide all-weather roads to feed tanks and catch-out doors.
8. Title to the chickens and all feed and medication remain the property
of Pilgrim's at all times.
9. Pilgrim's will move or market chickens and /or eggs when and where it
appears to be the best advantage. Pilgrim's will receive proceeds from
sale of chickens and/or eggs.
10.In times of adverse weather conditions, such as extreme heat and cold,
grower agrees to make a special effort to minimize death losses from lack
of heat, lack of cooling and/or lack of water.
11.A Pilgrim serviceman or other agent shall have the right at anytime to
enter the premises of grower where said birds are located and check with
grower, inspect said chickens and environmental conditions, to see that
reasonable care is being given chickens.
Grower agrees to follow growing programs as instructed by Pilgrim's
servicemen. This is understood to mean all management, vaccination,
worming, medication, and other recommendations.
12. It is expressly understood and agreed by the parties that each is an
independent contractor and that neither party, its agents or employees,
shall be considered to be the employees or the agents of the other party
for any purpose whatsoever.
13. Contract pay will be made in accordance with Schedule A attached.
We, the undersigned, agree to carry out the above Contract.
PILGRIM'S PRIDE CORPORATION GROWER
\s\ Terry Wright \s\ Lonnie Pilgrim
________________________________ ____________________________________
SCHEDULE A
1. The grower shall receive a pullet grower payment of $0.0116 per bird per
week from the time the birds are placed in the grower's house until the
grower pay for egg production is equal to or greater than the pullet
payment. In cases where hens are force molted, beginning when the feed is
first withdrawn, a payment of $0.0242 per hen per week for all hens
reaching 50% production after the molt has been completed. Payment will
be made on the basis of paragraph 1 or 2, whichever is greater. The pay
will be made on a monthly basis.
2. Grower payment after birds reach 50% production shall be on a monthly
basis as follows: Pilgrim's accounting period ends at midnight Saturday
and consists of two (2) four-week months and one (1) five-week month for
each three (3) calendar months, the five week months being March, June,
September and December. Payment will be made within ten (10) days after
the period ends.
A. Grade A or better quality eggs $0.075 per dozen
B. Undergrades $0.020 per dozen
C. If eggs are sold ungraded, payment will be made on previous egg
pick up when eggs were graded.
D. Molted Flocks will be paid an additional $0.0232 per dozen .
3. After the flock is marketed and sufficient time has elapsed to complete
calculations, a bonus shall be paid as follows:
A. Bonus for Feed Conversion:
POUNDS FEED/DOZ. PAYMENT/DOZ
3.20 - 3.29 $0.0250
3.30 - 3.39 $0.0225
3.40 - 3.49 $0.0200
3.50 - 3.59 $0.0175
3.60 - 3.69 $0.0150
3.70 - 3.79 $0.0125
3.80 - 3.89 $0.0090
3.90 - 3.99 $0.0060
4.00 - 4.09 $0.0045
4.10 - 4.19 $0.0030
4.20 - 4.29 $0.0015
B. Bonus based on Eggs per Hen Houses:
EGGS/HEN HOUSED PAYMENT/DOZ
265 $0.0100
260 $0.0080
255 $0.0060
250 $0.0050
245 $0.0040
240 $0.0030
235 $0.0020
230 $0.0010
It is understood that no more than one bonus will be payable under
paragraph 3-A and no more than one bonus under paragraph 3-B.
4. Bonus calculations will be made on a period of 52 weeks after the birds
reach 50% production. These calculations will be made on a per flock
basis. The bonus calculations will be made on total eggs received by
Pilgrim's provided they run 90% Grade A. If the eggs for the entire
period run below 90% Grade A, all undergrades in excess of 10% will be
subtracted from total eggs received before bonus calculations are made.
Revised May 5, 1997
AMENDED
AGREEMENT
This Agreement dated October 15, 1996 amends the previous agreement
dated January 4, 1994 and is between Pilgrim's Pride Corporation, a
Delaware Corporation (hereafter called "PPC") and Pilgrim Poultry, G.P.
(hereinafter called "PPGP") covering purchases of baby chicks, feed
medication, accounting and flock services from PPC at fair market value and
also covering PPGP sales of live broilers to PPC at fair market value.
The term of this agreement is from October 15, 1996 until December
31, 1997 and is automatically renewable for each subsequent one calendar
year period thereafter unless terminated by either party in writing. The
effective date of such termination notice will be 90 days from the date of
mailing of such notice.
Fair Market Value is agreed as follows initially, but may be revised
from time to time subject to agreement between the parties in order to more
accurately arrive at Fair Market Value;
BABY CHICKS PURCHASED FROM PPC
105% of PPC average year-to-date cost using latest figures
available at the time.
BROILER FEED PURCHASED FROM PPC
$15.00 per ton above PPC Pittsburg Mill ingredient cost delivered
to farm.
MEDICATION PURCHASED FROM PPC
10% markup over PPC cost.
ACCOUNTING SERVICE FURNISHED BY PPC
$200 per month for all record keeping and monthly financial
statements.
FLOCK SERVICE
Compensation included in Broiler Feed markup.
LIVE BROILERS SOLD TO PPC
To be sold to PPC at the quoted weekly Georgia dock dressed quote
less 14.50 cents processing, hauling and catching allowance times
73% yield allowance to equal live equivalent market times good
live pounds based on farm weight less DOA's and condemned.
PAYMENT TERMS
60 days of invoice date from both parties.
In testimony whereof, the parties of this agreement have hereto set
their hands in duplicate, the day and year above written.
PILGRIM'S PRIDE CORPORATION PILGRIM POULTRY, G.P.
\s\ Clifford E. Butler \s\ Lonnie "Bo" Pilgrim
_____________________________ __________________________
Clifford E. Butler Lonnie "Bo" Pilgrim
Chief Financial Officer Proprietor
STATE OF TEXAS
COUNTY OF CAMP
Before me, the undersigned authority, on this day personally
appeared Clifford E. Butler, Chief Financial Officer, Pilgrim's Pride
Corporation and Lonnie "Bo" Pilgrim, Proprietor, Pilgrim Poultry, G.P.
known to me to be the persons whose names are subscribed to the
foregoing instrument, and acknowledged to me and executed the same
for the purpose and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE
on this 15th day of October, 1996.
\s\ J. H. Nears, Jr.
__________________________
Notary Public Camp County, Texas
PILGRIM'S PRIDE CORPORATION
HEAVY BREED
BREEDER HEN GROWER CONTRACT
This contract entered into between Pilgrim's Pride Corporation and LONNIE "BO"
PILGRIM (FM44,FM45,FM46), hereinafter called Pilgrim's and grower,
respectively, this 7TH day of MAY , 1997, for about 24,000 pullets
and 2,400 cockerels necessary to mate with said pullets for the production of
hatching eggs.
1. Pilgrim's will furnish the chickens, feed, medication, vaccines, labor for
blood testing and debeaking,
and other items necessary for production of a flock.
2. Grower will furnish housing, equipment, labor, litter, utilities, other
essentials, and keep accurate
records. Amount and type will be prescribed by Pilgrim's. This will also
include an approved egg
storage room equipped to control temperature and humidity.
3. Grower agrees to dispose of all dead birds and poultry house litter in
accordance with all federal,
state, and local laws, rules, and regulations.
4. Grower agrees to have no other poultry, fowl, or ratites other than those
that are property of Pilgrim's.
5. Grower will make ready the house and equipment, clean the house, and do
other things necessary, as
prescribed by Pilgrim's, before receiving the birds.
6. In order to assure a better job of spraying the house and floor,
Pilgrim's will furnish equipment and
labor for this operation. In addition, Pilgrim's will pay for one-half of
the cost of material for spraying
house and floor. Total charges to grower will not exceed $4.00 per 1,000
square foot of floor space.
7. Grower agrees to not administer any medications at any time to a flock
unless otherwise
recommended by the Company's service representative; and to abide by all
FDA rules and
regulations concerning the use of medications to said flock, and to abide
by all rules and regulations
of the FDA and EPA concerning the use of pesticides, insecticides or any
other chemical which may
be applied to the premises to which a flock may be in contact.
8. A Pilgrim's serviceman or other agent shall have the right at any time to
enter the premises of grower
where said birds are located and check with grower, inspect said chickens
and environmental
conditions, to see that reasonable care is being given chickens. Grower
agrees to follow growing
programs as instructed by Pilgrim's servicemen. This is understood to
mean all management,
vaccination, worming, medication, and other recommendations.
9. Grower shall allow Pilgrim's authorized tester to test a flock for any
disease or organism that would
make a flock undesirable for production of hatching eggs.
10. The grower agrees to notify Pilgrim's of any emergency, unusual
conditions, situations or irregularity
concerning a flock. Pilgrim's is authorized to use their best judgment
in remedying so far as
possible the condition or conditions, even to the extent of disposing of a
entire flock.
11. ALL EGGS, both hatching eggs and cull eggs, are the property of Pilgrim's
and are not to be sold or used
in any manner by grower at any time.
12. Grower agrees to grade, select, separate and cull the eggs produced by
this flock, in accordance with
requirements and specifications of Pilgrim's, and make eggs available for
pick up in separate
containers of the type directed. Hatching eggs (Class 1) shall weigh 21
ounces and up per dozen,
excluding double yolks. They shall be uniform as to size and shape, and
be free from any cracks, dirt,
thin shells, weak ends, or any deformity or irregularity. Eggs shall be
separated in accordance with
the following classes:
CLASS 1 - 21 ounces per dozen and up, excluding double yolks, and of the
quality mentioned above
in this paragraph for hatching eggs.
CLASS 2 - Cull eggs excluding double yolks
CLASS 3 - Double yolk eggs
CRACKED, EXTREMELY DIRTY, SOFT SHELL, AND EXTREMELY SMALL EGGS ARE TO BE
DESTROYED AT THE FARM.
13. Eggs shall be cleaned and/or sanitized only by methods approved by
Pilgrim's.
14. Grower must provide all-weather roads to feed tanks and catchout doors.
15. Title to the chickens, all feed, and medication remain the property of
Pilgrim's at all times.
16. Pilgrim will move or market chickens and/or eggs when and where it appears
to be the best
advantage. Pilgrim's will receive proceeds from sale of chickens and/or
eggs.
17. In times of adverse weather conditions, such as extreme heat and extreme
cold grower agrees to make
a special effort to minimize death losses from lack of heat, lack of
cooling and/or lack of water.
18. It is expressly understood and agreed by the parties that each is an
independent contractor, and that
neither party, its agents or employees, shall be considered to be the
employees or agents of the other
party for any purpose whatsoever.
19. All chickens on a farm will be settled as one unit regardless of the
number of houses.
20. A grower payment of 3.00 cents per bird per week will be made from the
time birds are moved into
breeder house until the payment based on paragraph 21 equals or exceeds
this payment. In no case
will payment be made on both paragraphs 20 and 21 at the same time.
21. This contract is non-transferable and shall remain in effect until
such time as either party gives the
other party fourteen (14) days notice of their desire to terminate the
contract.
22. An accounts payable to Pilgrim's is authorized to be deducted from
the Grower payment, unless
there arrangements have been made. Pilgrim's Pride Corporation
has engaged a group of banks to
provide financing for the poultry covered by this Agreement.
23. Grower payment after the birds are in production shall be on a
weekly basis in accordance with
Schedule A attached.
PILGRIM'S PRIDE CORPORATION GROWER
\s\ William Bussell \s\ Lonnie Pilgrim
by:_____________________________ _________________________________
Schedule A
1. CLASS 1 EGGS - 29.25 cents PER DOZEN for conventional type houses
with fans and foggers. An
additional 2 cents PER DOZEN will be paid for evaporative cooled houses.
Evaporative cooling
must be operational by May 15th each summer and is to be operated as
directed by Pilgrim=s
representative. If evaporative cooled houses are not operated as
directed, grower will be paid 29.25
cents per dozen.
2. CLASS 2 EGGS - 6 cents PER DOZEN
3. CLASS 3 EGGS - 3 cents PER DOZEN
4. After a flock is marketed and sufficient time has elapsed to complete
calculations, a bonus shall be
paid on hatchability of Class 1 eggs.
Average % Salable Chicks Bonus payment per
HATCHED FROM ALL CLASS 1 EGGS SET* DOZEN CLASS 1 EGGS
83.00 - 83.99 0.50 cents
84.00 - 84.99 1.00 cents
85.00 - 85.99 1.50 cents
86.00 - 86.99 2.25 cents
87.00 - 87.99 3.00 cents
88.00 and above 4.00 cents
5. An additional bonus shall be paid grower after a flock is sold, and
sufficient time has elapsed to
complete calculations based on number of Class 1 eggs produced per hen
housed - calculated on 98%
of the females moved to the farm. For bonus calculation purposes, 98% of
the females moved is
__________________. For each egg per hen housed over and above 140,
grower shall receive an
additional 1.00 cent per egg.
6. A feed conversion bonus shall be paid grower after the flock is sold, and
sufficient time has elapsed
to complete calculations, based on pounds of feed per dozen of Class 1
eggs. This schedule is as
follows:
Pounds of Feed Bonus
PER DOZEN CLASS 1 PER DOZEN CLASS 1
7.01 - 7.25 1.00 cents
6.76 - 7.00 1.25 cents
6.51 - 6.75 1.50 cents
6.26 - 6.50 1.75 cents
6.01 - 6.25 2.00 cents
5.76 - 6.00 2.25 cents
Below 5.75 2.50 cents
page 2-Schedule A
1. Bonus calculations will be made on a period not to exceed 36 weeks
after birds of flock have reached
50%production. If birds are sold early due to excessive egg inventory,
projections will be made based on a standard production curve, and this
will be used as a basis for paying bonus on number of hatching eggs.
However, birds sold early due to a disease condition will not have any
bonuses paid.
No bonuses will be paid on flocks that do not produce at least 90%
of the 140 Class 1 eggs shown in
paragraph (23) above 126 (Class I eggs per hen housed).