EXHIBIT 10.43
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PURCHASE CONTRACT
among
CALIFORNIA ECONOMIC DEVELOPMENT
FINANCING AUTHORITY,
TREASURER OF THE STATE OF CALIFORNIA
and
DAIN RAUSCHER INCORPORATED
Dated October 6, 1998
Relating to
$4,000,000
California Economic Development Financing Authority
Variable Rate Demand
Industrial Development Revenue Bonds, Series 1998
(Provena Foods Inc. Project)
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PURCHASE CONTRACT
$4,000,000
California Economic Development Financing Authority
Variable Rate Demand
Industrial Development Revenue Bonds, Series 1998
(Provena Foods Inc. Project)
October 6, 1998
California Economic Development Financing Authority
801 K Street, Suite 1700
Sacramento, California 95814
The Honorable Matt Fong
Treasurer of the State of California
915 Capitol Mall, Room 110
Sacramento, California 95814
Ladies and Gentlemen:
1. Dain Rauscher Incorporated (the "Underwriter") offers to enter into
this purchase contract (this "Purchase Contract") with the California Economic
Development Financing Authority (the "Authority") and the Treasurer of the State
of California, solely in his capacity as agent of sale for the Authority (the
"Treasurer"), which upon the Authority's and the Treasurer's acceptance hereof
will be binding upon the Authority, the Treasurer and the Underwriter. This
offer is made subject to the Authority's and Treasurer's acceptance by execution
of this Purchase Contract and approval by Provena Foods Inc., a California
corporation (the "Borrower") and their delivery of same to the Underwriter at or
before 9:00 p.m., New York time, today. Delivered to you herewith as Exhibit A,
is the Letter of Representation, dated the date hereof (the "Letter of
Representation"), under which the Borrower makes certain representations and
undertakes certain obligations with respect to this Purchase Contract.
2. Upon the terms and conditions and upon the basis of the
representations, warranties and covenants hereinafter set forth, the Underwriter
hereby agrees to purchase from the Authority and the Treasurer for offering to
the public, and the Authority and the Treasurer hereby agree to sell to the
Underwriter for such purpose, at an interest rate to be determined in accordance
with the terms of the Indenture (hereinafter defined), all (but not less than
all) of $4,000,000 aggregate principal amount of the Authority's Variable Rate
Demand Industrial Development Revenue Bonds, Series 1998 (Provena Foods Inc.
Project), dated as of the date of delivery thereof (the "Bonds"). The purchase
price of the Bonds shall be 100% of the principal amount of the Bonds.
3. The Bonds shall be otherwise as described in, and shall be issued
and secured under the provisions of, the Indenture of Trust, dated as of October
1, 1998 (the "Indenture"), by
and between the Authority and U.S. Bank Trust National Association, as trustee
(the "Trustee"). The proceeds of sale of the Bonds will be loaned to the
Borrower pursuant to the Loan Agreement (as hereinafter defined) and will be
applied by the Borrower to defray the Borrower's cost of the acquisition,
construction and improving of a manufacturing facility (the "Project"). The
Project is further described in the Loan Agreement, dated as of October 1, 1998
(the "Loan Agreement"), between the Authority and the Borrower. The Bonds will
be secured by an irrevocable direct pay letter of credit (the "Letter of
Credit") issued by Comerica Bank-California (the "Bank"), pursuant to the
Reimbursement Agreement, dated as of October 1, 1998 (the "Reimbursement
Agreement"), between the Bank and the Borrower.
The Bonds are more fully described in the Official Statement relating to the
Bonds, dated October 6, 1998 (the "Official Statement").
4. The Underwriter agrees to make a bona fide public offering of all the
Bonds at par, plus interest accrued thereon, if any, to the date of delivery.
The Bonds may be offered and sold to certain dealers (including the Underwriter
and other dealers depositing such Bonds into investment trusts) at a price or at
prices lower than such public offering price.
5. As soon as practicable after the execution of this Purchase Contract by
the Authority, but no later than the Closing, the Authority shall deliver or use
its best efforts to cause to be delivered to the Underwriter manually executed
originals of the documents listed below in subparagraphs (a), (b), (d), (e) and
(g), a copy of the document listed below in subparagraph (c) and certified
copies of the documents listed below in subparagraph (f):
(a) the Indenture;
(b) the Reimbursement Agreement;
(c) the Letter of Credit, issued by the Bank in favor of the Trustee in an
amount equal to at least the principal amount of the Bonds and 45 days'
interest thereon calculated at the rate of 12% on the basis of a 365/366 day
year ;
(d) the Loan Agreement;
(e) the Tax Regulatory Agreement, dated as of October 1, 1998 (the "Tax
Regulatory Agreement"), among the Authority, the Borrower and the Trustee;
(f) (i) the resolution of the Authority, adopted on January 28, 1998,
expressing the Authority's intention to issue the Bonds and to reimburse
certain expenditures incurred by the Borrower from proceeds of the Bonds,
certified by the Secretary of the Authority, (ii) the resolution of the
Authority, adopted on September 1, 1998, authorizing the issuance, sale and
delivery of the Bonds and the execution and delivery of the Indenture, the
Loan Agreement, the Tax Regulatory Agreement and this Purchase Contract,
certified by the Secretary of the Authority, and (iii) the resolution of the
California Infrastructure and Economic Development Bank (the "Infrastructure
Bank"), adopted September 1, 1998, approving the issuance of the Bonds by the
Authority, certified by the Secretary of the Infrastructure Bank; and
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(g) the Official Statement.
By execution of this Purchase Contract, the Authority consents to the use by
the Underwriter of all of the above documents and the information contained
therein in connection with the public offering of the Bonds.
6. The Authority represents and warrants to the Underwriter that:
(a) The Authority is a body public and corporate, and a public
instrumentality of the State of California (the "State"), organized and
existing under the laws of the State, specifically Section 15710 et seq. of
the California Government Code, as amended, with all necessary power and
authority to issue the Bonds and to enter into the Loan Agreement for the
purpose of promoting and encouraging commerce and industry, and generally to
foster economic development in the State; to enter into the Indenture, the Tax
Regulatory Agreement and this Purchase Contract; to issue, sell and deliver
the Bonds to the Underwriter as provided herein; and to carry out and
consummate all other transactions contemplated by each of the aforesaid
documents.
(b) The Authority has duly authorized, by all appropriate action, and
complied with all provisions of law with respect to, the execution and
delivery of the Indenture, the Loan Agreement, the Tax Regulatory Agreement
and this Purchase Contract and the issuance, sale, execution and delivery of
the Bonds.
(c) When delivered to and paid for by the Underwriter in accordance with
the terms of this Purchase Contract and the Indenture, the Bonds will have
been duly and validly authorized, executed, authenticated, issued and
delivered by the Authority and will constitute legal, valid and binding
limited obligations of the Authority enforceable in accordance with their
terms, subject to applicable bankruptcy, insolvency or other laws affecting
creditors' rights and remedies, and will be entitled to the benefits of the
Indenture.
(d) The execution and delivery of the Bonds, the Indenture, the Loan
Agreement, the Tax Regulatory Agreement and this Purchase Contract, and
compliance with the provisions thereof, do not and will not conflict with, or
constitute on the part of the Authority a violation of, breach of or default
under any indenture, mortgage, deed of trust, resolution, note agreement or
other agreement or instrument to which the Authority is a party or by which
the Authority is bound, or, to its knowledge, any constitutional provision or
statute of the State or of the United States of America, any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over the Authority or any of its activities or properties; and all consents of
any governmental authority of the State or of the United States of America
required in connection with the issuance or sale of the Bonds by the Authority
have been obtained; provided, however, that no representation is made
concerning compliance with the federal securities laws or the securities or
"Blue Sky" laws of the various states.
(e) There is no action, suit, proceeding, inquiry or investigation, at
law or in equity, or before or by any court or governmental agency or body
pending or, to the best
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of its knowledge, threatened against or affecting the Authority, nor to the
best of its knowledge is there any basis therefor, wherein an unfavorable
decision, ruling or finding would materially adversely affect the transactions
contemplated by this Purchase Contract, the Indenture, the Loan Agreement or
the Tax Regulatory Agreement, or which, in any way, would adversely affect the
validity or enforceability of the Bonds, the Indenture, the Loan Agreement,
the Tax Regulatory Agreement or this Purchase Contract or any other agreement
or instrument to which the Authority is a party, used or contemplated for use
in the consummation of the transactions contemplated by this Purchase
Contract, the Indenture, the Loan Agreement or the Tax Regulatory Agreement.
(f) The Authority will not take or omit to take any action which action
or omission will in any way cause the proceeds from the sale of the Bonds to
be applied in a manner contrary to that provided for in the Indenture.
(g) The Authority has reviewed the statements contained in the Official
Statement relating to the Authority under the caption "THE AUTHORITY" and such
statements, insofar as they are within the knowledge of the Authority, are
true and correct and fairly summarize the matters encompassed thereby to the
extent such matters are described therein. If between the date of this
Purchase Contract and the date of the Closing (as hereinafter defined) any
event shall occur which, in the opinion of the Authority, might or would cause
the Official Statement as then supplemented or amended to contain, with
respect to statements contained in the Official Statement relating to the
Authority under the caption "THE AUTHORITY," any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, the Authority shall notify the Underwriter, and if in
the opinion of the Authority or the Underwriter such event requires the
preparation and publication of a supplement or amendment to the Official
Statement, the Authority, at the expense of the Borrower, will supplement or
amend the Official Statement in a form and in a manner approved by the
Underwriter.
7. At 11:00 a.m., New York time, on October 7, 1998, or at such other time or
on such earlier or later business day as shall have been mutually agreed upon by
the Authority, the Borrower and the Underwriter, the Authority will deliver or
cause to be delivered to the Underwriter the Bonds, in definitive fully
registered form, duly executed and authenticated, at a place in New York, New
York, to be mutually agreed upon by the Authority and the Underwriter. The
Authority will deliver or cause to be delivered to the Underwriter in Pasadena,
California, at such time and on such date and at a place to be mutually agreed
upon by the Authority, the Borrower and the Underwriter, the closing documents
mentioned in Paragraph 8(d) hereof. The Underwriter will accept such delivery
and pay the purchase price of the Bonds as set forth in Paragraph 2 hereof, by a
Federal Funds check or wire transfer to the order of "U.S. Bank Trust National
Association, as Trustee" unless the Authority shall otherwise direct. This
payment and delivery is herein called the "Closing." The Bonds will be delivered
in authorized denominations as set forth in the Indenture and registered in the
name of CEDE & Co., as nominee of The Depository Trust Company or in such other
names as the Underwriter shall have requested. The Bonds will be made available
to the Underwriter for checking and
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packaging by the Underwriter at least one business day before the Closing at a
place to be mutually agreed upon by the Authority and the Underwriter.
8. The Underwriter's obligations hereunder to purchase and pay for the Bonds
shall be subject to the performance by the Authority of the obligations to be
performed by it hereunder at or prior to the Closing, to the performance by the
Borrower of the obligations and agreements to be performed by the Borrower at or
prior to the Closing under the Letter of Representation and to the accuracy in
all material respects of the representations and warranties of the Authority
contained herein and of the Borrower contained in the Letter of Representation,
as of the date hereof and as of the Closing, and shall also be subject to the
following conditions:
(a) At the time of the Closing (i) the Indenture, the Letter of Credit,
the Loan Agreement, the Reimbursement Agreement, the Tax Regulatory Agreement
and the Letter of Representation shall be in full force and effect, and shall
not have been amended, modified or supplemented except as may have been agreed
to in writing by the Underwriter; and (ii) the Authority shall perform or have
performed all of its obligations required under or specified in this Purchase
Contract to be performed at or prior to the Closing.
(b) The Bonds shall have been duly authorized, executed and authenticated
in accordance with the provisions of the Indenture.
(c) The Underwriter may terminate this Purchase Contract by notification
to the Authority if at any time subsequent to the date hereof and at or prior to
the Closing (i) legislation shall have been enacted by the United States or
shall have been reported out of committee or being considered by any committee
of the Congress of the United States, or a decision shall have been rendered by
a court of the United States or the Tax Court of the United States, or a ruling
shall have been made or a regulation or a temporary regulation shall have been
proposed or made or any other release or announcement shall have been made by
the Treasury Department of the United States or the Internal Revenue Service,
with respect to federal taxation upon revenues or other income or payments of
the general character to be derived by the State or upon interest received on
obligations of the general character of the Bonds, which in the reasonable
opinion of the Underwriter materially adversely affects the market for the
Bonds; (ii) there shall have occurred any new outbreak of hostilities or any
national or international calamity or crisis, the effect of such outbreak,
calamity or crisis being such as could cause a major disruption in the debt
markets and as, in the reasonable judgment of the Underwriter, would make it
impracticable for it to market the Bonds or to enforce contracts for the sale of
the Bonds; (iii) there shall be in force a general suspension of trading on The
New York Stock Exchange, Inc., or minimum or maximum prices for trading shall
have been fixed and be in force, or maximum ranges for prices for securities
shall have been required and be in force on The New York Stock Exchange, Inc.,
whether by virtue of a determination by that exchange or by order of the
Securities and Exchange Commission or any other governmental authority having
jurisdiction; (iv) a general banking moratorium shall have been declared by
federal, New York, or California authorities having jurisdiction and be in
force; or (v) any event shall have occurred or shall exist which makes untrue or
incorrect, as of such time, in any material respect, any material statement or
information
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contained in the Official Statement or which is not reflected in the Official
Statement, but should be reflected therein in order to make such material
statements and information contained therein not misleading as of such time.
(d) At or prior to the Closing, the Underwriter shall receive the
following documents:
(i) The approving opinion of Kutak Rock ("Bond Counsel"), relating
to the Bonds, dated the date of the Closing, in the form set forth as
Appendix A to the Official Statement, together with a letter of Bond
Counsel, dated the date of the Closing and addressed to the Underwriter
stating that the Underwriter may rely on such opinion.
(ii) The supplemental opinion of Bond Counsel dated the date
of the Closing and addressed to the Underwriter, to the effect that:
(A) this Purchase Contract has been duly authorized, executed
and delivered by the Authority and, assuming due authorization,
execution and delivery by the Underwriter and approval by the
Borrower, is a valid and binding agreement of the Authority, subject
to laws relating to bankruptcy, insolvency, reorganization or
creditors' rights generally and to the application of equitable
principles;
(B) the statements contained in the Official Statement in the
sections thereof entitled: "DESCRIPTION OF THE BONDS," "SECURITY FOR
THE BONDS," "THE LOAN AGREEMENT," "THE INDENTURE" and "TAX MATTERS"
insofar as such statements purport to summarize certain provisions of
the Bonds, the Loan Agreement or the Indenture, and Bond Counsel's
opinion concerning certain tax matters relating to the Bonds are
accurate in all material respects; and
(C) the Bonds are not subject to the registration requirements
of the Securities Act of 1933, as amended, and the Indenture is exempt
from qualification as an indenture pursuant to the Trust Indenture Act
of 1939, as amended.
(iii) The opinion of counsel to the Borrower, which may be rendered
by one or more firms acceptable to the Authority and the Underwriter,
dated the date of the closing and in form and substance acceptable to the
Authority and the Underwriter.
(iv) A certificate dated the date of the Closing of the Chair of the
Authority, or the Chair's designee, to the effect that as of such date,
(A) no litigation is pending or, to his knowledge, threatened in any court
(1) challenging the creation, organization or existence of the Authority,
(2) seeking to restrain or enjoin the issuance or delivery of any of the
Bonds, or the collection of revenues or other moneys pledged or to be
pledged to pay the principal of and interest on
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the Bonds, or in any way contesting or affecting the validity of the Bonds
or the Indenture or the collection of revenues or other moneys or the
pledge thereof, or contesting the powers of the Authority to issue the
Bonds or to enter into the Indenture, (3) in any way contesting or
affecting the validity of the Loan Agreement, the Tax Regulatory Agreement
or this Purchase Contract, or contesting the powers of the Authority to
enter into or to execute and deliver the Loan Agreement, the Tax
Regulatory Agreement or this Purchase Contract, (B) the representations
and warranties of the Authority contained herein are true and correct in
all material respects on and as of the date of the Closing as if made on
the date of the Closing; and (C) to the best of his knowledge, no event
affecting the Authority has occurred since the date of the Official
Statement which has not been disclosed therein or by supplement or
amendment thereto and which should be disclosed in the Official Statement
for the purpose for which it is to be used or which it is necessary to
disclose therein in order to make the statements and information therein
not misleading in any material respect.
(v) An opinion, dated the date of the Closing and addressed to the
Underwriter, the Authority, Bond Counsel and Standard & Poor's Ratings
Services ("Standard & Poor's") of counsel to the Bank in form and
substance acceptable to the Underwriter, the Authority, Bond Counsel and
Standard & Poor's.
(vi) A certificate of an authorized officer of the Bank, dated the
date of the Closing, to the effect that the information under the captions
"THE BANK" and "THE LETTER OF CREDIT AND THE REIMBURSEMENT AGREEMENT" in
the Official Statement does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
made under such caption, in light of the circumstances under which they
were made, not misleading.
(vii) A certificate of the Borrower, dated the date of the Closing and
signed by an authorized officer of the Borrower, acting solely in his
official capacity, to the effect that (A) since the date hereof no
material and adverse change has occurred in the financial position or
results of operations of the Borrower; (B) the Borrower has not, since the
date hereof, incurred any material liabilities other than in the ordinary
course of business or as set forth in or contemplated by the Official
Statement; (C) no event affecting the Borrower has occurred since the date
of the Official Statement which should be disclosed in the Official
Statement for the purpose for which it is to be used or which is necessary
to be disclosed therein in order to make the statements and information
therein in light of the circumstances under which they are made not
misleading as of the date of Closing; and (D) the representations and
warranties included in the Letter of Representation are true and correct
in all material respects as of the date of the Closing, and all
obligations to be performed by the Borrower under the Letter of
Representation on or prior to the date of the Closing have been performed.
(viii) The Official Statement signed on behalf of the Authority.
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(ix) Executed counterparts of the Indenture, the Loan Agreement,
the Remarketing Agreement, the Reimbursement Agreement and the Tax
Regulatory Agreement and specimens of the Letter of Credit and the Bonds.
(x) Copies of the resolutions or other documents of the Borrower
authorizing the execution and delivery of the Loan Agreement, the
Reimbursement Agreement, the Remarketing Agreement, the Letter of
Representations and the Tax Regulatory Agreement, certified by the
Secretary or an Assistant Secretary of the Borrower as having been duly
adopted and being in full force and effect.
(xi) Copies of the resolutions of the Authority authorizing the
issuance of the Bonds, the use of the Official Statement and authorizing
or approving the execution and delivery of the documents to which the
Authority is a party, certified by the Secretary of the Authority, as
having been duly adopted and being in full force and effect.
(xii) A certificate of a duly authorized officer of the Authority
satisfactory to the Underwriter, dated the date of Closing, stating that
such officer is charged, either alone or with others, with the
responsibility for issuing the Bonds; setting forth, in the manner
permitted by the Treasury Regulations and the Internal Revenue Code of
1986 (the "Code"), the reasonable expectations of the Authority as of such
date as to the use of proceeds of the Bonds and of any other funds of the
Authority pledged or expected to be used to pay principal or purchase
price of, premium, if any, or interest on the Bonds and the facts and
estimates on which such expectations are based; and stating that, to the
best of the knowledge and belief of the certifying officer, the
Authority's expectations are reasonable, which certification may be made
in reliance upon a similar certification, dated the date of the Closing,
furnished to such person for such purpose by a duly authorized officer or
attorneys-in-fact of the Borrower satisfactory to the Underwriter.
(xiii) An opinion of counsel to the Authority, dated the date of the
Closing, addressed to the Underwriter, the Trustee and Bond Counsel, in
form and substance acceptable to the Underwriter, the Trustee and Bond
Counsel.
(xiv) The letter from Standard & Poor's indicating the rating for
the Bonds which is not lower than "A/A-1."
(xv) Evidence satisfactory to the Underwriter that the Bonds have
been approved by the Governor of the State or other appropriate official
or governing body, after a public hearing thereon held after reasonable
public notice in accordance with Section 147(f) of the Code.
(xvi) Evidence of the filing, as required by Section 149(e) of the
Code, of Form 8038.
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(xvii) A certified copy of the resolution of the California Debt
Limit Allocation Committee granting the Authority a portion of the State's
volume cap for the Bonds equal to at least the amount of the Bonds
purchased pursuant to this Purchase Contract.
(xviii) Such additional certificates, instruments and other documents
as the Underwriter reasonably may deem necessary to evidence the truth and
accuracy as of the time of the Closing of the representations of the
Authority, the Borrower and the Bank and the due performance or
satisfaction by the Authority, the Borrower and the Bank at or prior to
such time of all agreements then to be performed and all conditions then
to be satisfied by the Authority, the Borrower and the Bank.
If the Authority shall be unable to satisfy the conditions contained in this
Purchase Contract, or if the obligations of the Underwriter shall be terminated
for any reason permitted by this Purchase Contract, this Purchase Contract shall
terminate and neither the Underwriter nor the Authority shall be under further
obligation hereunder, except as set forth in Paragraph 10.
9. The Authority covenants with the Underwriter to cooperate with it and the
Borrower in qualifying the Bonds for offer and sale under the securities or
"Blue Sky" laws of such States as the Underwriter may request; provided that in
no event shall the Authority be obligated to take any action which would subject
it to general service of process in any State where it is not now so subject. It
is understood that the Authority is not responsible for compliance with or the
consequences of failure to comply with applicable "Blue Sky" laws.
10. (a) The Underwriter shall be under no obligation to pay any expenses
incident to the performance of the Authority's obligations hereunder,
including but not limited to (i) the cost of printing and delivering and
preparation for printing or other reproduction of the Indenture, the Letter
of Credit, the Loan Agreement, the Reimbursement Agreement, this Purchase
Contract, the Letter of Representation, the Remarketing Agreement and the
Official Statement; (ii) the fees and disbursements of Bond Counsel, the
Trustee, counsel to the Authority and any experts or consultants retained by
the Authority or the Borrower; (iii) the fees and disbursements of the Bank
and its counsel and (iv) the fees of Standard & Poor's. The costs and
expenses set forth in the immediately preceding sentence shall be paid out of
the proceeds of the Bonds, or other available funds of the Borrower in
accordance with the Indenture or if the Bonds are not delivered to the
Underwriter by the Authority (unless such delivery be prevented by the
Underwriter's default hereunder, in which event the Underwriter shall pay
such costs and expenses as and for liquidated damages hereunder), shall be
paid by the Borrower pursuant to the Letter of Representation.
(b) The Underwriter shall pay (i) all advertising expenses in connection
with the public offering of the Bonds and (ii) all other expenses incurred by
it in connection with the public offering and distribution of the Bonds.
11. Any notice or other communication to be given to the Authority under this
Purchase Contract may be given by delivering the same in writing at its address
set forth above,
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addressed Attention: Chair, and any such notice or other communication to be
given to the Underwriter may be given by delivering the same to Dain Rauscher
Incorporated, One Market Plaza, 1100 Steuart Street Tower, San Francisco,
California 94105, Attention: Public Finance Department. All notices or
communications hereunder by any party shall be given and served upon each other
party.
12. This Purchase Contract shall constitute the entire agreement between the
Authority, the Treasurer and the Underwriter and is made solely for the benefit
of the Authority, the Borrower and the Underwriter (including the successors or
assigns of the Underwriter). No other person shall acquire or have any rights
hereunder or by virtue hereof. All representations, warranties and agreements of
the Authority in this Purchase Contract shall remain operative and in full force
and effect, regardless of (a) any investigation made by or on behalf of the
Underwriter, (b) the delivery of any payment for the Bonds hereunder and (c) any
termination of this Purchase Contract. The parties hereto agree to cooperate
prior and subsequent to the Closing to take such actions as shall be necessary
or desirable in connection with securing the rating of the Bonds by Standard &
Poor's.
13. This Purchase Contract may not be amended without the written consent of
the Authority, the Treasurer, the Underwriter and the Borrower.
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14. The validity, interpretation and performance of this Purchase Contract
shall be governed by the laws of the State of California.
DAIN RAUSCHER INCORPORATED
By /s/ Illegible Signature
---------------------------------
Authorized Signatory
CALIFORNIA ECONOMIC DEVELOPMENT
FINANCING AUTHORITY
By /s/ Christopher S. Holben
---------------------------------
Christopher S. Holben
Attest:
By /s/ Blake Fowler
----------------------
Blake Fowler
OFFICE OF THE STATE TREASURER
By /s/ Illegible Signature
---------------------------------
Deputy Treasurer
Agreed to and Approved by:
PROVENA FOODS INC.
By /s/ Thomas J. Muloney
----------------------
Authorized Signatory
[Signature Page to Purchase Contract]
EXHIBIT A
LETTER OF REPRESENTATION
October 6, 1998
California Economic Development Financing Authority
801 K Street, Suite 1700
Sacramento, California 95814
The Honorable Matt Fong
Treasurer of the State of California
915 Capitol Mall, Room 110
Sacramento, California 95814
Dain Rauscher Incorporated
One Market Plaza
110 Steuart Street Tower
San Francisco, California 94105
Ladies and Gentlemen:
Pursuant to a purchase contract dated the date hereof (the "Purchase
Contract"), with Dain Rauscher Incorporated (the "Underwriter"), which the
undersigned (the "Borrower") has approved, the California Economic Development
Financing Authority (the "Authority") and the Treasurer of the State of
California propose to sell $4,000,000 aggregate principal amount of the
Authority's Variable Rate Demand Industrial Development Revenue Bonds, Series
1998 (Provena Foods Inc. Project) (the "Bonds"). The offering of the Bonds is
described in an Official Statement, dated October 6, 1998 (the "Official
Statement").
Certain revenues and other moneys received by the Authority pursuant or
with respect to the Loan Agreement, dated as of October 1, 1998 (the "Loan
Agreement"), between the Authority and the Borrower will be pledged to secure
the payment of the Bonds, including the interest thereon pursuant to an
Indenture of Trust, dated as of October 1, 1998 (the Indenture"), between the
Authority and U.S. Bank Trust National Association, as trustee (the "Trustee"),
relating to the Bonds. In addition, the Bonds shall be payable from funds drawn
under an irrevocable direct pay letter of credit (the "Letter of Credit") issued
by Comerica Bank-California (the "Bank"), pursuant to a Reimbursement Agreement,
dated as of October 1, 1998 (the "Reimbursement Agreement"), between the
Borrower and the Bank.
In order to induce you to enter into the Purchase Contract and to make the
sale and purchase and reoffering of the Bonds therein contemplated, the Borrower
hereby represents, warrants and agrees with each of you as follows:
(a) The Borrower is a corporation, organized and validly existing
under the laws of the State of California, has full legal right, power and
authority to enter into this Letter of Representation, the Loan Agreement,
the Reimbursement Agreement and the Remarketing Agreement, to approve the
Purchase Contract and to carry out and consummate all transactions
contemplated by this Letter of Representation, the Loan Agreement, the
Reimbursement Agreement, the Remarketing Agreement, the Tax Regulatory
Agreement and the Purchase Contract and by proper action has duly
authorized the execution and delivery of this Letter of Representation, the
Loan Agreement, the Reimbursement Agreement, the Tax Regulatory Agreement
and the Remarketing Agreement and the approval of the Purchase Contract.
(b) The officer of the Borrower executing this Letter of
Representation, the Loan Agreement, the Reimbursement Agreement and the
Remarketing Agreement and approving the Purchase Contract is duly and
properly authorized to execute the same.
(c) The Purchase Contract has been duly approved by, and this Letter
of Representation, the Loan Agreement, the Reimbursement Agreement, the Tax
Regulatory Agreement and the Remarketing Agreement have been duly
authorized, executed and delivered by the Borrower. The Loan Agreement,
when assigned to the Trustee pursuant to the Indenture, will constitute the
legal, valid and binding obligation of the Borrower to the Trustee
enforceable against the Borrower in accordance with its terms for the
benefit of the owners of the Bonds; except as enforcement of the Loan
Agreement may be limited by bankruptcy, insolvency, moratorium,
reorganization, fraudulent conveyance laws, laws affecting the enforcement
of creditors rights, the application of equitable principles and judicial
discretion, and by the covenant of good faith and fair dealing which may be
implied by law into contracts. This Letter of Representation, the
Reimbursement Agreement, the Remarketing Agreement and the Tax Regulatory
Agreement and any rights of the Authority and obligations of the Borrower
under the Loan Agreement not so assigned to the Trustee will constitute the
legal, valid and binding agreements of the Borrower enforceable against the
Borrower in accordance with their respective terms; except as enforcement
of each of the above-named documents may be limited by bankruptcy,
insolvency, moratorium, reorganization, fraudulent conveyance laws, laws
affecting the enforcement of creditors rights, the application of equitable
principles and judicial discretion, and by the covenant of good faith and
fair dealing which may be implied by law into contracts.
(d) The Borrower is not in any material way in breach of or default
under (i) any applicable law or administrative regulation of the State of
California or the United States or any applicable judgment or decree or
(ii) any material loan agreement, indenture, bond, note, resolution,
agreement or other instrument to which it is a party or is otherwise
subject, and no event has occurred and is continuing which, with the
passage of time or the giving of notice or both, would constitute an event
of default under any such instrument.
(e) The approval of the Purchase Contract and the Official Statement;
the execution and delivery of the Loan Agreement, the Reimbursement
Agreement, the Tax Regulatory Agreement, the Remarketing Agreement and this
Letter of Representation; the
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consummation of the transactions herein and therein contemplated; and the
fulfillment of or compliance with the terms and conditions hereof and
thereof will not conflict with or constitute a violation or breach of or
default (with due notice or the passage of time or both) under the
Borrower's Organization Documents (as defined in the Indenture), or any
applicable law or administrative rule or regulation, or any applicable
court or administrative decree or order, or, to the knowledge of the
Borrower, any indenture, mortgage, deed of trust, loan agreement, lease,
contract or other agreement or instrument to which it is a party or by
which it or its properties are otherwise subject or bound, or result in the
creation or imposition of any prohibited lien, charge or encumbrance of any
nature whatsoever upon any of the Borrower's assets, which conflict,
violation, breach, default, lien, charge or encumbrance might have
consequences that would materially and adversely affect the consummation of
the transactions contemplated by the Purchase Contract, the Indenture, the
Loan Agreement, the Reimbursement Agreement, the Remarketing Agreement, the
Tax Regulatory Agreement, this Letter of Representation or the Official
Statement or the financial condition, assets, properties or operations of
the Borrower.
(f) No consent or approval of any trustee or holder of any
indebtedness of the Borrower, and no consent, permission, authorization,
order or license of, or filing or registration with, any governmental
authority (except in connection with Blue Sky proceedings) is necessary in
connection with the execution and delivery of this Letter of
Representation, the Loan Agreement, the Reimbursement Agreement, the Tax
Regulatory Agreement or the Remarketing Agreement; the approval of the
Purchase Contract; or the consummation of any transaction therein or herein
contemplated on the part of the Borrower, except as have been obtained or
made and as are in full force and effect or, as appropriate, will be in
full force and effect at the Closing. The Borrower makes no representation
as to any approvals or actions as may be required under any state Blue Sky
or federal securities laws.
(g) There is no action, suit, proceeding, inquiry or investigation
before or by any court or federal, state, municipal or other government
authority pending or, to the knowledge of the Borrower, threatened against
or affecting the Borrower or its assets, properties or operations which, if
determined adversely to the Borrower or the interests thereof, would have a
material and adverse effect upon the consummation of the transactions
contemplated by or the validity of the Purchase Contract, the Loan
Agreement, the Reimbursement Agreement, the Remarketing Agreement, the Tax
Regulatory Agreement, this Letter of Representation or the Official
Statement or upon the financial condition, assets, properties or operations
of the Borrower, and the Borrower is not in default with respect to any
order or decree of any court or any order, regulation or demand of any
federal, state, municipal or other governmental authority, which default
would materially and adversely affect the consummation of the transactions
contemplated by the Purchase Contract, the Loan Agreement, the
Reimbursement Agreement, the Remarketing Agreement, the Tax Regulatory
Agreement, this Letter of Representation, the Official Statement or the
financial condition, assets, properties or operations of the Borrower.
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(h) The Borrower has obtained or will obtain all variances from
applicable zoning ordinances and has obtained or will obtain in due course
all building permits and easements or licenses for the acquisition,
construction and equipping of the Project (as said term is defined in the
Indenture), to the extent and as such Project is described in the Official
Statement, and such variances, permits, easements and licenses constitute
all approvals required for the Project; and the Project should not be
subject to change by any administrative or judicial body so as to
materially affect such acquisition and construction. The Project has
complied with the requirements of the California Environmental Quality Act.
(i) The Borrower hereby agrees to pay the expenses described in
Paragraph 10(a) of the Purchase Contract, and to pay any expenses incurred
in amending or supplementing the Official Statement pursuant to the
Purchase Contract.
(j) As of the date hereof, the Official Statement, as amended or
supplemented pursuant to the Purchase Contract or this Letter of
Representation, if applicable, does not and will not contain as of the
Closing any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(k) If between the date hereof and the date of the Closing any event
shall occur which might or would cause the Official Statement, as then
supplemented or amended, to contain an untrue statement of a material fact
or to omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, the Borrower shall notify the
Authority and the Underwriter and if in the opinion of the Borrower, the
Authority or the Underwriter such event requires the preparation and
publication of a supplement or amendment to the Official Statement, the
Authority will request the Borrower to cause the Official Statement to be
amended or supplemented in a form and in a manner approved by the
Underwriter.
(l) After the Closing, the Borrower (i) will not participate in the
issuance of any amendment of or supplement to the Official Statement to
which, after being furnished with a copy, the Underwriter or the Authority
shall reasonably object in writing or which shall be disapproved by counsel
for the Underwriter or the Authority and (ii) if any event relating to or
affecting the Authority or the Borrower or its present or proposed
facilities shall occur as a result of which it is necessary, in the opinion
of counsel for the Underwriter or the Authority, to amend or supplement the
Official Statement in order to make the Official Statement not misleading
in the light of the circumstances existing at the time it is delivered to a
purchaser, forthwith prepare and furnish to the Underwriter and the
Authority (at the expense of the Borrower) a reasonable number of copies of
an amendment of or supplement to the Official Statement (in form and
substance satisfactory to counsel for the Underwriter and counsel to the
Authority) which will amend or supplement the Official Statement so that it
will not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances existing at the time the Official Statement is
delivered to purchaser, not misleading. For the purposes of this
subsection, the Authority
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and the Borrower will furnish such information as the Underwriter may from
time to time reasonably request.
(m) The Borrower agrees to indemnify and hold harmless the Authority
and the Underwriter and each person, if any, who controls (as such term is
defined in Section 15 of the Securities Act of 1933, as amended) the
Authority and the Underwriter and their officers, agents, employees,
advisors and attorneys against any and all judgments, losses, claims,
damages, liabilities and expenses (i) arising out of any statement or
information in the Official Statement, relating to the Borrower and the
Project, that is or is alleged to be untrue or incorrect in any material
respect or the omission or alleged omission therefrom of any statement or
information that should be stated therein or that is necessary to make the
statements therein relating to the Borrower and the Project not misleading
in any material respect, and (ii) to the extent of the aggregate amount
paid in settlement of any litigation commenced or threatened arising from a
claim based upon any such untrue statement or omission if such settlement
is effected with the written consent of the Borrower. In case any claim
shall be made or action brought against the Authority or the Underwriter or
any controlling person based upon the Official Statement for which
indemnity may be sought against the Borrower, as provided above, such party
shall promptly notify the Borrower in writing setting forth the particulars
of such claim or action and the Borrower shall assume the defense thereof,
including the retaining of counsel acceptable to such party and the payment
of all expenses. The Authority and the Underwriter or any such controlling
person shall have the right to retain separate counsel in any such action
and to participate in the defense thereof but shall bear the fees and
expenses of such counsel unless (A) the Borrower shall have specifically
authorized the retaining of such counsel or (B) the parties to such suit
include such Underwriter or controlling person or persons, and the Borrower
and such Underwriter or controlling person or persons have been advised by
such counsel that one or more legal defenses may be available to it or them
which may not be available to the Borrower, in which case the Borrower
shall not be entitled to assume the defense of such suit notwithstanding
its obligation to bear the fees and expenses of such counsel.
(n) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Paragraph (m)
hereof is applicable but for any reason is held to be unavailable from the
Borrower, the Borrower and the Underwriter shall contribute to the
aggregate losses, claims, damages and liabilities (including any
investigation, legal and other expenses incurred in connection with, and
any amount paid in settlement of, any action, suit or proceeding or any
claims asserted, but after deducting any contribution received by the
Borrower from persons who control the Borrower within the meaning of
Section 20 of the Securities Exchange Act of 1934 and Section 15 of the
Securities Act of 1933, as amended (collectively, the "Securities Acts"),
to which the Borrower and the Underwriter may be subject in such
proportions that the Underwriter are responsible for that portion
represented by the percentage that the underwriting discount or fee
received by the Underwriter bears to the offering price of the Bonds and
the Borrower is responsible for the balance; provided, however, that (i) in
no case shall the Underwriter be responsible for any amount in excess of
the underwriting fee or discount applicable to the Bonds purchased by such
Underwriter pursuant to the Purchase
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Contract and (ii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act of 1933, as
amended) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this
Paragraph (n), each person, if any, who controls the Underwriter within
the meaning of the Securities Acts, shall have the same rights to
contribution as the Underwriter, and each person, if any, who controls
the Borrower within the meaning of the Securities Acts shall have the
same rights to contribution as the Borrower, subject in each case to
clauses (i) and (ii) of this Paragraph (n). Any party entitled to
contribution will, promptly after receipt of notice of commencement of
any action, suit or proceeding against such party in respect of which a
claim for contribution may be made against another party or parties under
this Paragraph (n), notify such party or parties from whom contribution
may be sought, but the omission to so notify such party from whom
contribution may be sought shall not relieve the party or parties from
whom contribution may be sought from any other obligation it or they may
have hereunder or otherwise than under this Paragraph (n). No party shall
be liable for contribution with respect to any action or claims settled
without its consent.
The representations, warranties, agreements and indemnities herein shall
survive the Closing under the Purchase Contract and any investigation made by or
on behalf of the Authority and the Underwriter or any person who controls the
Authority or the Underwriter of any matters described in or related to the
transactions contemplated hereby and by the Purchase Contract, the Official
Statement, the Loan Agreement, the Remarketing Agreement and the Indenture.
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This Letter of Representation shall be binding upon the Borrower and shall
inure solely to the benefit of the Authority, the Underwriter and, to the extent
set forth herein, persons controlling the Authority and the Underwriter, and
their respective officers, employees, agents, advisors, attorneys and personal
representatives, successors and assigns, and no other person or firm shall
acquire or have any right under or by virtue of this Letter of Representation.
Very truly yours,
PROVENA FOODS INC.
By /s/ Thomas J. Mulaney
-------------------------
Authorized Signatory
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