EXHIBIT 10.2(a)
REVOLVING CREDIT AGREEMENT
DATED AS OF JANUARY 12, 1999
by and among
SOUTHERN STATES COOPERATIVE, INCORPORATED
as Borrower,
the Banks referred to herein,
as Lenders,
COBANK, ACB,
as Administrative Agent and Documentation Agent
FIRST UNION NATIONAL BANK and NATIONSBANK, N.A.,
as Syndication Agents,
CRESTAR BANK and WACHOVIA BANK, N.A., as Co-Agents
and
NATIONSBANC XXXXXXXXXX SECURITIES LLC,
as Lead Arranger
TABLE OF CONTENTS
ARTICLE I DEFINITIONS..................................................... 1
SECTION 1.01. Definitions............................................ 1
SECTION 1.02. Accounting Terms....................................... 13
ARTICLE II AMOUNT AND TERMS OF LOANS...................................... 13
SECTION 2.01. The Commitments....................................... 13
SECTION 2.02. Notice and Manner of Borrowing........................ 15
SECTION 2.03. Interest.............................................. 17
SECTION 2.04. Conversions and Renewals.............................. 18
SECTION 2.05. Minimum Amounts....................................... 19
SECTION 2.06. Principal Payments.................................... 19
SECTION 2.07. Fees.................................................. 20
SECTION 2.08. Notes................................................. 20
SECTION 2.09. Use of Proceeds....................................... 20
SECTION 2.10. Method of Payment; Limitation on Set Off and Tax
Withholding........................................... 21
SECTION 2.11. Indemnity............................................. 22
SECTION 2.12. Additional Costs...................................... 22
SECTION 2.13. Limitation on Types of Advances....................... 23
SECTION 2.14. Illegality............................................ 24
SECTION 2.15. Treatment of Affected Loans........................... 24
SECTION 2.16. Capital Adequacy...................................... 24
SECTION 2.17. Investment in CoBank.................................. 25
SECTION 2.18. Reduction of Commitments.............................. 25
ARTICLE III CONDITIONS PRECEDENT.......................................... 26
SECTION 3.01. Conditions Precedent to Initial Use of the Commitments
on and after the Closing Date......................... 26
SECTION 3.02. Conditions Precedent to Each Loan..................... 29
SECTION 3.03. Deemed Representation................................. 29
ARTICLE IV REPRESENTATIONS AND WARRANTIES................................. 30
SECTION 4.01. Incorporation, Good Standing, and Due Qualification... 30
SECTION 4.02. Corporate Power and Authority......................... 30
SECTION 4.03. Legally Enforceable Agreement......................... 30
SECTION 4.04. Financial Statements.................................. 30
SECTION 4.05. Labor Disputes and Acts of God........................ 31
SECTION 4.06. Other Agreements...................................... 31
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SECTION 4.07. Litigation............................................ 31
SECTION 4.08. No Defaults on Outstanding Judgments or Orders........ 31
SECTION 4.09. Ownership and Liens................................... 32
SECTION 4.10. Subsidiaries, Affiliates, and Ownership of Stock...... 32
SECTION 4.11. ERISA................................................. 32
SECTION 4.12. Operation of Business................................. 32
SECTION 4.13. Taxes................................................. 32
SECTION 4.14. Compliance With Laws.................................. 32
SECTION 4.15. Existing Obligors; Existing Debt and Guarantees....... 33
SECTION 4.16. Directors, Executive Officers, Principal Shareholders. 33
SECTION 4.17. Year 2000 Compliance.................................. 33
SECTION 4.18. Margin Stock.......................................... 33
SECTION 4.19. Government Regulation................................. 34
ARTICLE V AFFIRMATIVE COVENANTS........................................... 34
SECTION 5.01. Maintenance of Existence.............................. 34
SECTION 5.02. Maintenance of Records................................ 34
SECTION 5.03. Maintenance of Properties............................. 34
SECTION 5.04. Conduct of Business................................... 34
SECTION 5.05. Maintenance of Insurance.............................. 34
SECTION 5.06. Compliance with Laws.................................. 35
SECTION 5.07. Right of Inspection................................... 35
SECTION 5.08. Employee Benefit Plans................................ 35
SECTION 5.09. Eligibility, Etc...................................... 35
SECTION 5.10. Reporting Requirements................................ 35
SECTION 5.11. Year 2000 Preparation................................. 37
ARTICLE VI NEGATIVE COVENANTS............................................. 37
SECTION 6.01. Liens................................................. 37
SECTION 6.02. Mergers, Etc.......................................... 39
SECTION 6.03. Sale of Assets........................................ 39
SECTION 6.04. Investments........................................... 40
SECTION 6.05. Guarantees, Etc....................................... 40
SECTION 6.06. Transactions with Affiliates.......................... 40
SECTION 6.07. Financing Services and Contributed Capital Agreements. 40
SECTION 6.08. Fiscal Year........................................... 41
SECTION 6.09. Leases................................................ 41
SECTION 6.10. Prohibition on Amendment of Certain Agreements, etc... 41
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ARTICLE VII FINANCIAL COVENANTS........................................... 41
SECTION 7.01. Maximum Consolidated Funded Debt to Capitalization.... 41
SECTION 7.02. Minimum Tangible Net Worth............................ 41
SECTION 7.03. Consolidated Cash Flow to Consolidated Interest Expense
and Distributions..................................... 42
ARTICLE VIII EVENTS OF DEFAULT............................................ 42
SECTION 8.01. Events of Default..................................... 42
SECTION 8.02. Remedies.............................................. 44
ARTICLE IX AGENTS......................................................... 45
SECTION 9.01. Authorization and Action.............................. 45
SECTION 9.02. Liability of Agent.................................... 45
SECTION 9.03. Rights of Each Agent as a Bank........................ 46
SECTION 9.04. Independent Credit Decisions.......................... 46
SECTION 9.05. Indemnification....................................... 46
SECTION 9.06. Successor Agents...................................... 47
SECTION 9.07. Sharing of Payments, Etc.............................. 47
SECTION 9.08. Liability of Agents................................... 48
SECTION 9.09. Notices to Agent...................................... 48
SECTION 9.10. Defaults.............................................. 48
SECTION 9.11. Monthly Reports....................................... 48
SECTION 9.12. Withholding Taxes..................................... 48
ARTICLE X MISCELLANEOUS................................................... 49
SECTION 10.01. Amendments, Etc...................................... 49
SECTION 10.02. Notices, Etc......................................... 49
SECTION 10.03. No Waiver............................................ 49
SECTION 10.04. Assignment; Participation............................ 50
SECTION 10.05. Costs, Expenses and Taxes............................ 51
SECTION 10.06. Integration.......................................... 52
SECTION 10.07. Indemnity............................................ 52
SECTION 10.08. Governing Law........................................ 52
SECTION 10.09. Consent to Jurisdiction.............................. 52
SECTION 10.10. Severability of Provisions........................... 53
SECTION 10.11. Usury................................................ 53
SECTION 10.12. Counterparts......................................... 53
SECTION 10.13. Headings............................................. 53
SECTION 10.14. Jury Trial Waiver.................................... 54
SECTION 10.15. Consents; Terminations, etc.......................... 54
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Exhibits
Exhibit A - Form of Revolving Credit Borrowing Notice
Exhibit B - Form of Bid Rate Loan Quote
Exhibit C - Form of Bid Rate Loan Notice of Borrowing
Exhibit D - Form of Notice of Rescission
Exhibit E - Bank Notice Profile
Exhibit F-1 - Form of Note for Base Rate Loans and LIBOR Loans
Exhibit F-2 - Form of Note for Bid Rate Loans
Exhibit G - Form of Opinion of Company Counsel
Exhibit H - Form of Assignment and Assumption Agreement
Exhibit I - Financing Services and Contributed Capital Agreements
Schedules
Schedule 3.01(M) - Other Credit Facilities
Schedule 4.10 - Subsidiaries, Affiliates, and Ownership of Stock
Schedule 4.15 - Existing Obligors; Existing Debt
Schedule 6.01 - Existing Liens
Schedule 6.04 - Permitted Investments
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REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT is entered into as of January 12, 1999, among
SOUTHERN STATES COOPERATIVE, INCORPORATED, a Virginia agricultural cooperative
corporation ("Company"), CoBANK, ACB in its individual capacity ("CoBank"), as
Bank and in its capacity as Administrative Agent and Documentation Agent, FIRST
UNION NATIONAL BANK ("First Union"), as Bank and in its capacity as Syndication
Agent, NATIONSBANK, N.A. ("NationsBank"), as Bank and in its capacity as
Syndication Agent, NATIONSBANC XXXXXXXXXX SECURITIES LLC, in its capacity as
Lead Arranger, and FMB BANK, as Bank, COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as Bank,
BANQUE NATIONALE de PARIS (CHICAGO Branch), as Bank, CRESTAR BANK, as Bank and
in its capacity as Co-Agent, DG BANK DEUTSCHE GENOSSENSCHAFTSBANK AG CAYMAN
ISLANDS BRANCH, as Bank, WACHOVIA BANK, N.A., as Bank and in its capacity as
Co-Agent.
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions. For purposes of this Agreement:
"Additional Costs" has the meaning specified in Section 2.12.
"Administrative Agent" shall mean CoBank or any successor appointed
pursuant to Section 9.06 hereof.
"Affected Loans" has the meaning specified in Section 2.15.
"Affiliate" shall mean any Person: (1) directly or indirectly controlling,
controlled by, or under common control with, the Company; (2) which directly or
indirectly beneficially owns or holds five percent (5%) or more of any class of
voting stock of the Company; or (3) five percent (5%) or more of whose voting
stock, membership interest or other equity interest is directly or indirectly
beneficially owned or held by the Company; but managed local cooperatives are
not Affiliates of the Company. The term "control" means the possession, directly
or indirectly, 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.
"Agents" shall mean, collectively, the Administrative Agent, the
Documentation Agent and the Syndication Agents.
"Agreement" shall mean this Revolving Credit Agreement, as amended,
supplemented or modified from time to time.
"Aggregate Commitments" shall mean the aggregate amount of the Banks'
Commitments hereunder, as such amount may be reduced at any time or from time to
time pursuant to this Agreement. On the Closing Date, the Aggregate Commitments
shall be Two Hundred Million Dollars ($200,000,000.00).
"Applicable Lending Office" shall mean, for each Bank and for each type of
Loan, the lending office of such Bank designated as such for such type of Loan
on the signature pages hereof or in the applicable Assignment and Assumption
Agreement or such other office of such Bank as such Bank may from time to time
specify to the Administrative Agent and the Company as the office by which its
Loans of such type are to be made and maintained.
"Applicable Margin" shall mean, for any day, the rate per annum set forth
below, it being understood that the Applicable Margin for (i) Base Rate Loans
shall be the percentage set forth under the column "Base Rate Applicable
Margin", and (ii) LIBOR Loans shall be the percentage set forth under the column
"LIBOR Applicable Margin".
The Applicable Margin shall be determined by reference to the Company's
corporate ratings provided by Standard & Poor's and Moody's as set forth below:
-------------------------------------------------------------------------------
Pricing Standard & Poor's/Moody's LIBOR Applicable Base Rate
Level Corporate Ratings* Margin Applicable Margin
-------------------------------------------------------------------------------
I BBB+/Baa1 or higher 0.450% 0.000%
-------------------------------------------------------------------------------
II BBB/Baa2 0.575% 0.000%
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III BBB-/Baa3 0.800% 0.000%
-------------------------------------------------------------------------------
IV BB+/Ba1 0.950% 0.250%
-------------------------------------------------------------------------------
V BB/Ba2 or lower 1.000% 0.375%
-------------------------------------------------------------------------------
*In the event of a split rating between Standard & Poor's and Moody's, the lower
rating will determine the Applicable Margin.
The Applicable Margin shall be determined and adjusted on the date of each
change in the Company's corporate rating. Adjustments in the Applicable Margin
shall be effective as to all Base Rate Loans and LIBOR Loans, existing and
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prospective, from the date of adjustment. The Company shall provide the
Administrative Agent with written notice of any change in the corporate ratings
of the Company within ten (10) Business Days after the Company becomes aware of
or receives notice of such change.
"Assignee" has the meaning specified in Section 10.04 hereof.
"Assignment and Assumption Agreement" shall mean an agreement in the form
attached hereto as Exhibit H acceptable to the Company and the Administrative
Agent pursuant to which a Bank assigns and an Assignee assumes rights and
obligations in accordance with Section 10.04.
"Bank" or "Banks" shall mean one or more of the banks listed in the first
paragraph of this Agreement and all Assignees which qualify as a "Bank" under
Section 10.04 hereof.
"Base Rate" shall mean, for any day, the higher of (a) the Federal Funds
Rate plus one half of one percent (0.50%), or (b) the Prime Rate.
"Base Rate Loan" shall mean a Loan bearing interest with reference to the
Base Rate.
"Bid Rate Loan" shall mean a Loan bearing interest at a specified fixed
rate quoted by a Bank pursuant to Section 2.02(C) hereof.
"Bid Rate Maturity Date" has the meaning specified in Section 2.02(C)
hereof.
"Bridge Loan Agreement" shall mean the Term Loan Credit Agreement dated as
of October 9, 1998, by and among the Company, the lenders identified therein and
NationsBank, as administrative agent for the lenders, and First Union and
CoBank, as co-agents.
"Bridge Loan Facility" shall mean the $225,000,000 term loan credit
facility made available to the Company pursuant to the Bridge Loan Agreement.
"Business Day" shall mean: (1) any day other than a Saturday, Sunday, or
other day on which commercial banks are not authorized to do business or are
required to close in Denver, Colorado, New York, New York, or Richmond,
Virginia; and (2) whenever such day relates to a LIBOR Loan, LIBOR Interest
Period, or notice with respect to a LIBOR Loan, a day on which dealings in U.S.
dollar deposits are also carried out in the London interbank market.
"Capital Lease" shall mean all leases which have been or should be
capitalized on the books of the lessee in accordance with GAAP.
"Capitalization" shall mean Consolidated Funded Debt plus Tangible Net
Worth.
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"Cash Equivalents" means (a) securities issued or directly and fully
guaranteed or insured by the United States or any agency or instrumentality
thereof with maturities of not more than twelve months from the date of
acquisition, (b) U.S. dollar time deposits, certificates of deposit, "money
market" accounts or money market mutual funds, and repurchase agreements
relating to direct obligations of the United States with, and commercial paper,
fixed rate notes and loan participations (with maturities of up to 270 days for
any such loan participations) issued by, either (i) a Lender or (ii) a domestic
commercial bank with a short term commercial paper rating of at least A-1 by S&P
or P-1 by Moody's, (c) commercial paper and fixed rate notes issued by a
domestic commercial bank that does not have ratings required under clause (b) of
this definition with maturities of up to 60 days in an aggregate amount not to
exceed $7,500,000, (e) obligations of any domestic Governmental Authority with
respect to which interest is exempt from federal income tax with a long term
rating of at least AA- by S&P or Aa-3 by Moody's, and (f) "low floaters"
(industrial revenue bonds issued as floating rate notes or bonds and backed by a
stand-by letter of credit issued by a Lender or a domestic commercial bank
having the ratings required under clause (b) of this definition).
"Closing Date" shall mean the date of this Agreement.
"CoBank" has the meaning set forth in the preamble hereto.
"Code" shall mean the Internal Revenue Code of 1986 as amended from time
to time, and the regulations and published interpretations promulgated
thereunder.
"Commitment" shall mean each Bank's obligation to make Loans to the
Company pursuant to Section 2.01 hereof, as modified as provided in Section
10.04 hereof or as may be reduced as provided in Section 2.18.
"Company" shall mean Southern States Cooperative, Incorporated.
"Consolidated Cash Flow" shall mean, for any period, the sum of:
(a) savings before income taxes of the Company and its consolidated
Subsidiaries, calculated in accordance with GAAP; plus
(b) Consolidated Interest Expense paid or accrued during such period, to
the extent and only to the extent that such amount was deducted in determining
savings before income taxes of the Company and its consolidated Subsidiaries
calculated in accordance with GAAP; plus
(c) the aggregate amount of Depreciation and amortization during such
period, to the extent and only to the extent that such amount was deducted in
5
determining savings before income taxes of the Company and its consolidated
Subsidiaries calculated in accordance with GAAP; minus
(d) one-time gains of greater than $1,000,000 during such period of four
consecutive fiscal quarters; minus
(e) extraordinary income during such period, to the extent and only to the
extent that such income was included in determining savings before income taxes
of the Company and its consolidated Subsidiaries calculated in accordance with
GAAP.
"Consolidated Funded Debt" shall mean at any time, without duplication,
(1) all indebtedness or liability for borrowed money, or for the deferred
purchase price of property or services (excluding trade obligations and accrued
expenses), of the Company and its consolidated Subsidiaries; (2) all obligations
of the Company and its consolidated Subsidiaries as lessee under Capital Leases;
(3) all obligations of the Company and its consolidated Subsidiaries under
letters of credit; (4) all obligations of the Company and its consolidated
Subsidiaries arising under bankers' or trade acceptance facilities; (5) all
obligations of the Company and its consolidated Subsidiaries secured by any Lien
on property owned by such Person, whether or not the obligations have been
assumed, and (6) all obligations of the Company and its consolidated
Subsidiaries under Guarantees. "Consolidated Funded Debt" shall not include (i)
any obligations of the Company to any of its customers under any of the
following programs of the Company, in each case, as in effect on the date hereof
(the "Programs"): "Payment Plus"; "Preferred Payment Plan"; "Deferred Payment
Plan"; and "Prepayment Bonus Credit", provided, however, that any reimbursement
obligations of the Company or any of its consolidated Subsidiaries in respect of
any letters of credit issued in connection with, or in support of the Company's
obligations under, any of the Programs, shall be included as "Consolidated
Funded Debt" hereunder, or (ii) any junior subordinated debentures issued by the
Company in connection with the issuance of any Junior Preferred Securities.
"Consolidated Interest Expense" shall mean, for any period, all interest
expense of the Company and its consolidated Subsidiaries (net of any CoBank
patronage refunds), as determined in accordance with GAAP.
"Continuing Credit Facilities" has the meaning specified in Section
3.01(M) hereof.
"Credit Facility" shall mean the revolving loan credit facility extended
to the Company pursuant to Section 2.01 hereof in the aggregate principal amount
not to exceed the Aggregate Commitments.
"Debt" shall mean without duplication (1) indebtedness or liability for
borrowed money, or for the deferred purchase price of property or services
6
(excluding trade obligations and accrued expenses); (2) obligations as lessee
under Capital Leases; (3) obligations under letters of credit; (4) all
obligations arising under bankers' or trade acceptance facilities; (5) all
obligations secured by any Lien on property owned by such Person, whether or not
the obligations have been assumed, and (6) obligations under Guarantees. "Debt"
shall not include any obligations of the Company to any of its customers under
any of the following programs of the Company, in each case, as in effect on the
date hereof (the "Programs"): "Payment Plus"; "Preferred Payment Plan";
"Deferred Payment Plan"; and "Prepayment Bonus Credit", provided, however, that
any reimbursement obligations of the Company in respect of any letters of credit
issued in connection with, or in support of the Company's obligations under, any
of the Programs, shall be included as "Debt" hereunder.
"Depreciation" shall mean, for any period, total depreciation of the
Company and its consolidated Subsidiaries, as determined in accordance with
GAAP.
"Distributions" shall mean, for any period, all distributions made on all
issues of common stock, preferred stock and Junior Preferred Securities.
"Documentation Agent" shall mean CoBank or any successor appointed
pursuant to Section 9.06 hereof.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and published interpretations
promulgated thereunder.
"ERISA Affiliate" shall mean any corporation or trade or business which is
a member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Company or is under common control (within
the meaning of Section 414(c) of the Code) with the Company; provided, however,
that for purposes of provisions herein concerning minimum funding obligations
(imposed under Section 412 of the Code or Section 302 of ERISA), the term "ERISA
Affiliate" shall also include any entity required to be aggregated with the
Company under Section 414(m) or 414 (o) of the Code.
"Event of Default" shall mean any of the events specified in Section 8.01
hereof.
"Existing Obligor" shall mean a Person as of the Closing Date in which the
Company has an Investment or is obligated or committed to make an Investment, or
which has obligations which are, in whole or part, guaranteed by the Company or
which the Company is obligated or committed, in whole or part, to guarantee.
"Facility Fee Percentage" shall mean, for any day, the rate per annum
determined by reference to the Company's corporate ratings provided by Standard
& Poor's and Moody's as set forth below:
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-------------------------------------------------------------
Pricing Standard & Poor's/Moody's Facility Fee
Level Corporate Ratings* Percentage
-------------------------------------------------------------
I BBB+/Baa1 or higher 0.150%
-------------------------------------------------------------
II BBB/Baa2 0.175%
-------------------------------------------------------------
III BBB-/Baa3 0.200%
-------------------------------------------------------------
IV BB+/Ba1 0.300%
-------------------------------------------------------------
V BB/Ba2 or lower 0.375%
-------------------------------------------------------------
*In the event of a split rating between Standard & Poor's and Moody's, the lower
rating will determine the Facility Fee Percentage.
The Facility Fee Percentage shall be determined and adjusted on the date
of each change in the Company's corporate rating. Adjustments in the Facility
Fee Percentage shall be effective from the date of any adjustment in rating. The
Company shall provide the Administrative Agent with written notice of any change
in the corporate ratings of the Company within ten (10) Business Days after the
Company becomes aware of or receives notice of such change.
"Federal Funds Rate" shall mean, for any day, the rate of interest per
annum (rounded upward, if necessary, to the nearest whole multiple of 1/100 of
1%) equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published by the Federal Reserve Bank of New York on the
Business Day next succeeding such day, provided that (A) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day and (B) if no such rate is so
published on the next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to the Administrative Agent on such day on
such transactions as determined by the Administrative Agent.
"Financing Services and Contributed Capital Agreements" shall mean (a) the
Fourth Amended and Restated Financing Services and Contributed Capital Agreement
dated as of January 12, 1999, between the Company and Statesman, attached hereto
as Exhibit I, and (b) the Financing Services and Contributed Capital Agreement
dated as of April 1, 1998, between the Company and MLCC, attached hereto as
Exhibit I, in each case, as such agreements may be amended, supplemented,
restated or otherwise modified from time to time upon the prior written consent
of the Banks in accordance herewith.
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"First Union" has the meaning set forth in the preamble hereto.
"GAAP" means generally accepted accounting principles in the United
States.
"GoldKist" shall mean Gold Xxxx Inc.
"GoldKist Acquisition Agreement" shall mean that certain Asset Purchase
Agreement dated as of July 23, 1998, between the Company and GoldKist, as
amended, supplemented or otherwise modified prior to the date of this Agreement.
"GoldKist Commitment Letter" shall mean that certain Commitment Letter and
related term sheet dated as of October 13, 1998, between the Company and
GoldKist.
"Governmental Authority" shall mean any nation or government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guarantees" shall have the meaning set forth in Section 6.05 hereof.
"Interest Period" shall mean, with respect to any LIBOR Loan, the period
commencing on the date such Loan is made and ending, as the Company may select
pursuant to either Section 2.02(B) or 2.04 hereof, on the numerically
corresponding day in the first, second, third, or sixth calendar month
thereafter, except that (1) if the Interest Period would end on a day that is
not a Business Day, then such Interest Period shall be extended to the next
Business Day unless such Business Day would fall in the next calendar month, in
which case the Interest Period shall end on the immediately preceding Business
Day; and (2) each such Interest Period that commences on the last Business Day
of a calendar month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall end on the
last Business Day of the appropriate subsequent calendar month.
"Investment" shall have the meaning set forth in Section 6.04 hereof.
"Junior Preferred Securities" shall mean mandatorily redeemable capital
securities or preferred securities issued by the Company, any Subsidiary of the
Company or any other Person whose financial statements are consolidated with
those of the Company from time to time, in each case, upon terms and conditions
satisfactory to the Agents, the Lead Arranger and their respective counsel.
"Law" means any applicable foreign, federal, state or local statute, law,
rule, regulation, ordinance, order, code, policy or rule of common law, now or
hereafter in effect, and any judicial or administrative interpretation thereof
by a Governmental Authority, including any judicial or administrative order,
consent decree or judgment.
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"Lead Arranger" shall mean NationsBanc Xxxxxxxxxx Securities LLC in its
capacity as sole and exclusive lead arranger for the Credit Facility.
"LIBOR Base Rate" shall mean a rate for deposits in U.S. dollars, with
maturities comparable to the selected LIBOR Interest Period, that appears on the
display designated as page "3750" of the Telerate Service (or such other page as
may replace page 3750 of that service or such other service or services as may
be nominated by the British Bankers' Association for the purpose of displaying
London interbank offered rates for U.S. dollar deposits), determined as of 1:00
p.m. (New York time), two (2) Business Days prior to the commencement of such
Interest Period.
"LIBOR Loan" shall mean a Loan bearing interest with reference to the
LIBOR Rate.
"LIBOR Rate" shall mean, for each LIBOR Loan, the rate per annum (rounded
upwards, if necessary, to the nearest 1/1000 of 1%) determined by the
Administrative Agent to be equal to the quotient of (1) the LIBOR Base Rate for
such LIBOR Loan for such Interest Period divided by (2) one minus the LIBOR
Reserve Requirement for such Interest Period.
"LIBOR Reserve Requirement" means, for any LIBOR Loan, the average actual
rate at which reserves (including any marginal, supplemental, or emergency
reserves) are required to be maintained during the Interest Period for such
LIBOR Loan under Regulation D by member banks of the Federal Reserve System in
New York City with deposits exceeding One Billion Dollars ($1,000,000,000)
against "Eurocurrency Liabilities" (as such term is used in Regulation D).
Without limiting the effect of the foregoing, but without duplication, the LIBOR
Reserve Requirement shall also reflect any other reserves required to be
maintained by such member banks by reason of any Regulatory Change against (1)
any category of liabilities which includes deposits by reference to which the
LIBOR Base Rate is to be determined; or (2) any category of extensions of credit
or other assets which include LIBOR Loans.
"Lien" means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment for security purposes, deposit arrangement,
encumbrance, lien (statutory or other), or other security agreement, charge, or
encumbrance of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of any financing statement under the Uniform Commercial Code or comparable Law
of any jurisdiction to evidence any of the foregoing).
"Loan Documents" shall mean this Agreement, the Notes, and any other
(present or future) documentation as may be executed by the parties with respect
to this transaction all as may be amended or restated from time to time.
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"Loans" shall mean the loans made by the Banks pursuant to this Agreement.
"Master Loan Agreement" shall mean that certain Master Loan Agreement
dated as of February 1, 1997, between the Company and CoBank, as amended,
supplemented or otherwise modified from time to time.
"Material Adverse Effect" means a material adverse effect on the
properties, business, assets, prospects, operations or condition (financial or
otherwise) of the Company and its Subsidiaries, taken as a whole, or the ability
of the Company to perform its obligations under the Loan Documents to which it
is a party.
"MLCC" shall mean Michigan Livestock Credit Corporation.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" shall mean a Plan described in Section 4001(a)(3) of
ERISA.
"NationsBank" has the meaning set forth in the preamble hereto.
"Net Income" shall mean, with respect to the Company, for any period and
without duplication, net income (or loss) for such period determined in
accordance with GAAP, currently reported as "net savings" in the Company's
financial statements.
"Notes" shall mean the promissory notes described in Section 2.08 hereof.
"Pay Proceeds Letter" has the meaning specified in Section 3.01(R) hereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Investments" means (i) cash and Cash Equivalents, (ii)
investments and loans existing on the Closing Date identified on Schedule 6.04,
(iii) investments, loans and advances in wholly-owned Subsidiaries of the
Company, (iv) loans and advances to officers and directors (other than loans
described in clause (ix)) in an aggregate amount up to $2,000,000 at any time
outstanding, (v) loans and investments made pursuant to the requirements of the
Financing Services and Contributed Capital Agreements, (vi) investments in
CoBank, (vii) investments in Southern States Insurance Exchange, Inc., suppliers
11
or lenders, in each case, solely as a result of volume or patronage refunds
arising in the ordinary course of business, (viii) investments in or received
from customers in connection with collection of amounts owing to the Company or
its Subsidiaries so long as the aggregate amount of all such investments does
not at any time exceed $7,500,000 and (ix) loans to customers in the ordinary
course of business.
"Person" shall mean an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture,
Governmental Authority, or other entity of whatever nature.
"Plan" shall mean a pension plan which is covered by Title IV of ERISA and
in respect of which the Company or an ERISA Affiliate is an "employer" as
defined in Section 3(5) of ERISA.
"Potential Default" shall mean the occurrence of an event which, with the
giving of notice and/or the passage of time, would become an Event of Default.
"Prime Rate" means, for any day, the rate defined as the "prime rate," as
published from time to time in the Eastern Edition of the Wall Street Journal as
the base rate on corporate loans posted by at least seventy-five percent (75%)
of the United States' thirty (30) largest banks, or if the Wall Street Journal
shall cease publication or cease publishing the "prime rate" on a regular basis,
such other regularly published average prime rate applicable to such commercial
banks as is acceptable to the Administrative Agent in its reasonable discretion.
"Prohibited Transaction" shall mean any transaction set forth in Section
406 of ERISA or Section 4975 of the Code, as each may be amended from time to
time.
"Rabobank Letter of Credit" shall mean that certain Irrevocable Letter of
Credit No. SB14112, dated October 13, 1998, issued by Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland", New York Branch in favor
of the Company in the amount of $100,000,000.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as amended from time to time.
"Regulatory Change" shall mean, with respect to any Bank, any change after
the date of this Agreement in any Law (including Regulation D), including any
change resulting from the adoption or making after such date of any
interpretations, directives, or requests applying to a class of banks including
such Bank, of or under Law (whether or not having the force of law) by any court
or governmental or monetary authority charged with the interpretation or
administration thereof.
"Reportable Event" shall mean any of the events set forth in Section 4043
of ERISA.
"Requisite Banks" shall mean Banks holding at least 66_% of the aggregate
Commitments made by the Banks hereunder, provided however that if (1) there are
12
at least three Banks and (2) the Requisite Banks is composed only of the
Administrative Agent then one additional Bank will also be required to
constitute the Requisite Banks.
"Standard & Poor's" shall mean Standard & Poor's Ratings Group, a division
of McGraw Hill, Inc.
"Statesman" shall mean Statesman Financial Corporation.
"Statesman Credit Facility" shall mean a syndicated revolving credit
facility in the aggregate principal amount of up to $250,000,000.00 for
Statesman which one or more Banks are party to as lenders.
"Statesman Term Sheet" shall mean the Commitment Letter and Summary of
Terms and Conditions dated November 20, 1998, by and among Statesman, the Agents
and the Lead Arranger in connection with the Statesman Credit Facility.
"Subsidiary" shall mean, as to any Person, any corporation, partnership,
limited liability company, association or other business entity of which shares
of stock (or equivalent ownership or controlling interest) having ordinary
voting power to elect a majority of the board of directors or other managers
thereof are at the time owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person.
"Syndication Agents" shall mean First Union and NationsBank or any
successors appointed pursuant to Section 9.06 hereof.
"Tangible Net Worth" shall mean at any time the sum, without duplication,
of the following for the Company:
(a) Redeemable preferred stock as reflected on Company's consolidated
balance sheet prepared in accordance with GAAP; plus
(b) Capital stock as reflected on Company's consolidated balance sheet
prepared in accordance with GAAP; plus
(c) patrons' equity as reflected on Company's consolidated balance sheet
prepared in accordance with GAAP; plus
(d) the amount available for drawing under the Rabobank Letter of Credit;
plus
(e) the net cash proceeds received by the Company from any issuance of
Junior Preferred Securities; minus
13
(f) the sum of the following (without duplication of deductions in respect
of items already deducted in arriving at stockholders' and patrons' equity): (i)
the book value of all assets which would be treated as intangibles under GAAP,
including without limitation trademarks, trade names, copyrights, and patents
and unamortized debt discount and expense, to the extent that the aggregate book
value of all such assets exceeds $150,000; (ii) any goodwill; and (iii) any
write-up in book value of assets resulting from a revaluation thereof, not in
accordance with GAAP, subsequent to the Closing Date.
"Term Sheet" has the meaning specified in Section 2.07 hereof.
"Termination Date" shall mean January 11, 2002 or such later date as may
otherwise be agreed to by the Company, the Agents and each of the Banks
(provided, however, that none of the Agents or the Banks shall be under any
obligation to extend the Termination Date).
"Total Exposure" shall mean, as to any Person and at any point in time,
the sum of: (1) all Investments made by the Company in such Person; (2) the
amount of any additional Investments which the Company is obligated or committed
to make in such Person; (3) the amount of all obligations of such Person which
the Company has guaranteed; and (4) the amount of any additional obligations of
such Person which the Company is obligated or committed to guarantee.
"Unused Commitment" shall mean at any time, with respect to any Bank, the
amount by which such Bank's Commitment exceeds the sum of the total aggregate
outstanding principal amount of such Bank's Loans, but in any event not less
than zero.
SECTION 1.02 Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP consistent with those
applied in the preparation of the annual financial statements referred to in
Section 4.04, and all financial data submitted pursuant to this Agreement shall
be prepared in accordance with such principles.
ARTICLE II
AMOUNT AND TERMS OF LOANS
SECTION 2.01. The Commitments. On the terms and conditions set forth in
this Agreement, each Bank severally agrees to make Loans to the Company from
time to time during the period commencing on the date hereof and ending on (but
not including) the Termination Date, in an aggregate principal amount not to
exceed, at any one time outstanding, the amount set forth opposite such Bank's
name below (such Bank's "Commitment"):
14
Name of Bank Amount
------------ ------
CoBank, ACB $62,222,222.22
First Union National Bank $26,666,666.67
NationsBank, N.A. $27,777,777.78
FMB Bank $5,555,555.55
Cooperatieve Centrale Raiffeisen-
Boerenleenbank B.A., "Rabobank Nederland",
New York Branch $11,111,111.11
Banque Nationale de Paris (Chicago Branch) $11,111,111.11
Crestar Bank $26,666,666.67
DG Bank Deutsche Genossenschaftsbank
AG Cayman Islands Branch $6,666,666.67
Wachovia Bank, N.A. $22,222,222.22
TOTAL $200,000,000.00
===============
Provided, however, with respect to Bid Rate Loans each Bank may, but is not
required to, make a Loan in excess of its Commitment. In no event will the
aggregate amount of Loans outstanding, including Bid Rate Loans, at any one time
exceed the Aggregate Commitments.
Within the limits of each Bank's Commitment, and in the case of Bid Rate Loans
for amounts exceeding each Bank's Commitment, the Company may borrow, prepay
pursuant to Section 2.06 hereof, and reborrow. Loans may be outstanding
hereunder as Base Rate Loans, LIBOR Loans, or Bid Rate Loans, or any combination
thereof, as selected by the Company pursuant to Section 2.02 hereof. Base Rate
Loans and LIBOR Loans shall be made by the Banks ratably in proportion to their
projected Unused Commitments as of the date such Loans are to be made. For the
purposes of this Section 2.01 and Section 2.02(C), such Unused Commitments shall
be projected by determining the Unused Commitment of each Bank as of 12:00 noon,
Eastern time on the Business Day on which the Company delivers its notice
requesting a Loan and (x) reducing the amount of such Bank's Unused Commitment
by the sum of (i) the amount if any of any Bid Rate Loans which it has offered
to make on or before the date such new Loan is to be made and which offer the
Company has accepted plus (ii) the amount if any of Base Rate Loans and LIBOR
Loans which the Company has requested and which such Bank will be obligated to
fund on or before the date such new Loan is to be made and (y) increasing the
amount of such Bank's Unused Commitment by the sum of (i) the amount, if any, of
any Base Rate Loans or LIBOR Loans owing to such Bank for which the Company has
15
given notice that it will prepay on or before the date such new Loan is to be
made, plus (ii) the amount if any of any Bid Rate Loans owing to such Bank which
are payable on or before the date such new Loan is to be made. A Bank with
Loans, including Bid Rate Loans, equal to or exceeding its Commitment will be
deemed to have no available Unused Commitment for purposes of ratably
apportioning Base Rate Loans and LIBOR Loans. Bid Rate Loans shall be made by
the applicable Banks in the amount of their respective bids, which may exceed
each respective Bank's Commitment, that are accepted by the Company pursuant to
Section 2.02(C) hereof. The obligations of each Bank hereunder are several (and
not joint and several) and the failure of any Bank to perform hereunder shall
not result in liability to any other Bank or increase the Commitment of any
other Bank.
SECTION 2.02 Notice and Manner of Borrowing. The Company shall give notice
of its intent to borrow hereunder in accordance with the following procedures:
(A) Base Rate Loans. In the event the Company desires a Base Rate
Loan, it shall furnish to the Administrative Agent notice of that fact and of
the amount of the Loan no later than 12:30 p.m. Eastern time on the date such
Loan is to be made. Such notice shall be in the form attached hereto as Exhibit
A.
(B) LIBOR Loans. In the event the Company desires a LIBOR Loan, it
shall furnish notice of that fact to the Administrative Agent no later than
12:30 p.m. Eastern time three Business Days prior to the date such Loan is to be
made. Such notice shall be in the form of Exhibit A hereto and shall specify the
amount of the Loan, the date the Loan is to be made, and the Interest Period
applicable thereto. The Interest Period may, at the Company's option, be either
one month, two months, three months, or six months. If on any given day the
Company desires more than one LIBOR Loan having different Interest Periods, it
may so specify in its notice. The Interest Period may, at the Company's option,
extend beyond the Termination Date provided that (i) no Bank is thereby required
to extend the Termination Date or renew this Agreement and (ii) if any Bank does
not, in its sole discretion, extend, renew, or otherwise continue its commitment
on or before the Termination Date then the balance of all LIBOR Loans made by
the terminating Bank will be due and payable on the Termination Date and the
Company will pay all costs relating to prepayment of LIBOR Loans as set forth in
Section 2.11.
(C) Bid Rate Loans. In the event the Company desires a Bid Rate
Loan, it shall notify each of the Banks of such fact by 11:00 a.m. Eastern time
on the date such Loan is proposed to be made. Such notice shall be in the form
of Exhibit A or by telephone confirmed in writing in the form of Exhibit A and
shall specify the amount of the Loan and the proposed maturity date for such
Loan, which maturity date shall not in any event exceed the date which is two
16
hundred seventy (270) days from the date of the making of such Bid Rate Loan
(the "Bid Rate Maturity Date"). If the Company desires more than one Bid Rate
Loan with different Bid Rate Maturity Dates, it may so request in its notice.
However, the maximum number of amounts and Bid Rate Maturities for which bids
may be sought on any day may not exceed five and the Company may not solicit
bids from the Banks for Bid Rate Loans more than three times per week. In the
event a Bank, in its sole discretion in each instance, desires to bid on one or
more of the Bid Rate Loans or on a part of one or more of such Loans, it shall,
on or before 11:45 a.m. Eastern time on the day that a Bid Rate Loan is to be
made notify the Company of such fact in the form attached hereto as Exhibit B or
by telephone confirmed in writing in the form of Exhibit B. No Bank may bid more
than three times per week. With respect to Bid Rate Loans, no Bank may bid an
amount which exceeds the projected aggregate Unused Commitments of all of the
Banks, calculated as provided in Section 2.01. The Company shall disregard any
quote which is received late. If the Company desires to accept one or more of
the bids, it shall furnish notice of such fact to the Bank or Banks that made
the bids that were accepted by the Company by 12:30 p.m. Eastern time on the day
the bids were made. Such notice shall be in the form of Exhibit C hereto or by
telephone confirmed in writing in the form of Exhibit C, and a copy thereof
shall be provided to the Administrative Agent provided that the copy submitted
to the Administrative Agent shall not include bid rates or loan pricing
information. The Interest Period may, at the Company's option, extend beyond the
Termination Date provided that (i) no Bank is thereby required to extend the
Termination Date or renew this Agreement and (ii) if any Bank does not, in its
sole discretion, extend, renew, or otherwise continue its commitment on or
before the Termination Date then the balance of all Bid Rate Loans made by the
terminating Bank will be due and payable on the Termination Date and the Company
will pay all costs relating to prepayment of Bid Rate Loans as set forth in
Section 2.11.
Notwithstanding the above, if any Bank gives the Company notice that the Bank
does not intend to make Bid Rate Loans in excess of the Bank's Commitment then,
until such time as the Bank rescinds such notice, the Company will not be
required to notify the subject Bank with respect to Bid Rate Loans that would
exceed the Bank's Commitment. The notice and rescission described in this
paragraph must be in writing, substantially in the form of Exhibit D, and will
be effective three (3) Business Days after receipt.
All notices by the Company to any Bank provided for above shall be sent by
facsimile or if agreed to by the recipient Bank, by e-mail to the e-mail address
specified by such Bank, and shall be effective only upon receipt. Notices to the
Banks shall be directed as provided in the Bank notice profile attached as
Exhibit E. All notices by any Bank to the Company provided for above shall be
sent by facsimile or by e-mail to the Company at the e-mail address specified on
the signature page for the Company, and shall be effective only upon receipt.
Not later than 3:00 p.m. Eastern time on the date (which must be a Business Day)
a Loan is to be made: (i) each Bank, in the case of a Base Rate or LIBOR Loan,
shall make available directly to the Company its share of the Loan; and (ii) the
Bank or Banks whose bid(s) were accepted shall, in the case of Bid Rate Loans,
make available directly to the Company the principal amount of the Bid Rate Loan
which such Bank or Banks agreed to make. The Administrative Agent shall notify
17
each Bank of its pro rata share of each Base Rate or LIBOR Loan. Such notice
shall be given by facsimile no later than 1:00 p.m. Eastern time on, in the case
of each Base Rate Loan, the date such Loan is to be made and, in the case of
each LIBOR Loan, the date that is three Business Days prior to the date such
Loan is to be made. Loans will be made available either by credit to an account
maintained by the Company with the Bank or by wire transfer to: (a) such account
or accounts as may be authorized on forms supplied by the Bank; or (b) in the
absence of such authorization, to Crestar Bank, ABA No. 000000000, account of
Southern States Cooperative, Incorporated Account No. 0000000 or such
replacement account as the Company shall specify by notice to each of the Banks.
SECTION 2.03 Interest.
(A) Rates. The Company agrees to pay interest to each Bank on the
outstanding principal balance of such Bank's Loans at a rate per annum as
follows:
(1) For a Base Rate Loan, at a rate equal at all times to the
Base Rate plus the Applicable Margin. Any change in the Base Rate shall be
effective as of the opening of business on the day on which such change in the
Base Rate becomes effective.
(2) For a LIBOR Loan, at a rate equal to the LIBOR Rate plus
the Applicable Margin.
(3) For a Bid Rate Loan, at the specified fixed rate quoted by
the Bank making such Loan and accepted by the Company.
(B) Calculation and Payment. Interest shall be calculated on the
actual number of days each Loan is outstanding on the basis of a year consisting
of 360 days. In calculating interest, the date each Loan is made shall be
included and the date each Loan is repaid shall, if received before 3:00 p.m.
Eastern time, be excluded. Interest shall be payable in immediately available
funds directly to each Bank as follows:
(1) For each Base Rate Loan, monthly in arrears on the 10th
calendar day of the following month and on the Termination Date.
(2) For each LIBOR Loan, on the last day of the Interest
Period applicable thereto and, in the case of an Interest Period greater than
three months, at three-month intervals after the first day of such Interest
Period.
(3) For each Bid Rate Loan on the Bid Rate Maturity Date.
18
(C) Default Rate. Any principal, interest or other amounts not paid
when due (whether at maturity, by acceleration, or otherwise) shall bear
interest thereafter until paid in full, payable on demand, at a rate per annum
equal to:
(1) For any such amount payable in respect of a Base Rate Loan
and for all other amounts payable hereunder other than in respect of a LIBOR
Loan or a Bid Rate Loan from the time of default in payment of such amount and
thereafter at a rate equal to the Base Rate plus the Applicable Margin plus 1
and 50/100ths of 1%;
(2) For any such amount payable in respect of a LIBOR Loan, at
a rate equal to the LIBOR Rate plus the Applicable Margin plus 2% from the time
of default in payment of such amount until the end of the then current Interest
Period therefor, and thereafter at a rate equal to the Base Rate plus 1 and
50/100ths of 1%;
(3) For any such amount payable in respect of a Bid Rate Loan,
at a rate equal to the rate quoted by the Bank making such Loan and accepted by
the Company plus 2% from the time of default in payment of such amount until the
Bid Rate Maturity Date, and thereafter at a rate equal to the Base Rate plus 1
and 50/100ths of 1%.
SECTION 2.04 Conversions and Renewals. Subject to Section 2.05 hereof and
provided no Potential Default or Event of Default has occurred and is
continuing, the Company shall have the right, on three Business Day's prior
notice to the Administrative Agent (which notice shall be sent by facsimile and
shall be effective upon receipt), to convert any Base Rate Loan into a LIBOR
Loan or to continue any LIBOR Loan. Such notice must be received by the
Administrative Agent no later than 12:30 p.m. Eastern time and shall state (i)
the amount to be converted or continued; (ii) the date the conversion is to be
effective (which date must be a Business Day); and (iii) the Interest Period
applicable thereto (which period must expire on or prior to the Termination
Date; provided, however, that such Interest Period may, at the Company's option,
extend beyond the Termination Date provided further that (i) no Bank is thereby
required to extend the Termination Date or renew this Agreement and (ii) if any
Bank does not, in its sole discretion, extend, renew, or otherwise continue its
commitment on or before the Termination Date then the balance of all LIBOR Loans
made by the terminating Bank will be due and payable on the Termination Date and
the Company will pay all costs relating to prepayment of LIBOR Loans as set
forth in Section 2.11.). The Administrative Agent shall promptly send a copy of
such notice to each Bank. Any LIBOR Loan which is not continued as provided
above shall, on the last day of the Interest Period applicable thereto,
automatically be converted to a Base Rate Loan. Bid Rate Loans may not be
converted and may not be continued unless; (a) the Company requests bids
pursuant to Section 2.02(C) hereof; (b) the Bank that made the Bid Rate Loan
bids on the new Loan request; and (c) the Company accepts such bid. Unless
continued in that manner, each Bid Rate Loan shall be repaid on the Bid Rate
Maturity Date; and if for any reason such Loan is not repaid on such date, then
such Loan shall bear interest until repaid at the rate set forth in Section
2.03(C) hereof.
19
SECTION 2.05 Minimum Amounts. Each Loan and each conversion or
continuation thereof shall be in an amount at least equal to $3,000,000 and in
integral multiples of $1,000,000; provided, however, that Bid Rate Loans made by
any Bank may be in an amount equal to the lesser of $3,000,000 or that Bank's
Unused Commitment at the time that Bank furnishes its bid.
SECTION 2.06 Principal Payments.
(A) Voluntary Prepayments. The Company may prepay Base Rate or LIBOR
Loans, but not Bid Rate Loans. In the event the Company desires to prepay any
LIBOR or Base Rate Loan, it shall furnish to each Bank written or facsimile
notice of that fact (which notice shall be effective upon receipt and
irrevocable) by: (i) in the case of Base Rate Loans, 11:30 a.m. Eastern time on
the date such Loan is to be prepaid; and (ii) in the case of LIBOR Loans, 11:30
a.m. Eastern time two Business Days prior to the date such Loan is to be
prepaid. To the extent so authorized, prepayments may be made in whole (with
accrued interest to the date of prepayment), or in part (without accrued
interest); provided, however, that: (i) partial prepayments must be in a minimum
amount of $1,000,000 with amounts in excess thereof in increments of $100,000,
and the portion of the Loan not prepaid must meet the minimum requirements of
Section 2.05 hereof; and (ii) in the event the Company prepays any LIBOR Loan
prior to the last day of the Interest Period applicable thereto, the Company
must compensate the Bank receiving the prepayment in the manner set forth in
Section 2.11 hereof. All payments of principal and fees contemplated herein
shall be made directly to each Bank in the same proportion that each Bank
contributed to the Loan when it was made.
(B) Mandatory Payments. The Company shall repay the outstanding principal
amount of all Loans in full, together with all accrued but unpaid interest
thereon and all other amounts due and owing hereunder and under the other Loan
Documents, on the Termination Date, provided, however that the Company shall not
be obligated to pay on the Termination Date the principal of, or any accrued and
unpaid interest on, any LIBOR Loan or Bid Rate Loan, the Interest Period of
which extends beyond the Termination Date, made by any Bank that has extended,
renewed or otherwise continued its commitment as provided in Section 2.02(B),
Section 2.02(C) or Section 2.04 hereof. If at any time the outstanding principal
amount of all Loans exceeds the Aggregate Commitments, the Company shall repay
such excess, provided, that any repayment of outstanding Bid Rate Loans shall be
made after the Company has first repaid any and all outstanding LIBOR Loans and
Base Rate Loans. Each repayment pursuant to the immediately preceding sentence
shall be accompanied by any amount required to be paid pursuant to Section 2.11.
20
SECTION 2.07 Fees.
(A) In order to compensate the Administrative Agent and the
Documentation Agent for its obligations hereunder, the Company agrees to pay to
(i) the Administrative Agent, for its own account, the annual administration
fees set forth in the Commitment Letter and Summary of Terms and Conditions
dated November 20, 1998 (collectively, the "Term Sheet"), by and among the
Company, Statesman, the Agents and the Lead Arranger, which fees shall be
payable in equal quarterly installments at the end of each fiscal quarter of the
Company, with the first such installment due and payable on March 31, 1999, and
(ii) the Lead Arranger, for its own account, the fees set forth in the fee
letter dated November 20, 1998 (the "Lead Arranger Fee Letter"), between Lead
Arranger and the Company at the times specified therein for payment; provided
that the terms of the Term Sheet and the Lead Arranger Fee Letter shall not be
incorporated herein except as to the amount of fees payable to the Agent and the
Lead Arranger and the time of payment as contemplated herein and therein.
(B) The Company shall pay to each Bank a facility fee in an amount
equal to, for each Bank, the Facility Fee Percentage of the amount of that
Bank's Commitment from and after the Closing Date to the Termination Date
whether or not there is usage under the facility. The facility fee will be
accrued and payable quarterly in arrears (calculated on a 360-day basis), with
the first such payment due and payable on March 31, 1999.
SECTION 2.08. Notes. All Loans made by each Bank under this Agreement
shall be evidenced by, and repaid with interest in accordance with a promissory
note of the Company in substantially the form of Exhibit F-1 attached hereto for
Base Rate Loans and LIBOR Loans and a promissory note in substantially the form
of Exhibit F-2 attached hereto for Bid Rate Loans, in each case, duly completed,
dated the date such Bank becomes a Bank, in the amount of such Bank's
Commitment, and payable to such Bank (collectively, the "Notes"). Each Bank is
hereby authorized to endorse on the schedule attached to the Note held by it the
date and amount of each Loan, the type of Loan, the applicable Interest Period,
and, in the case of Bid Rate Loans, the interest rate on and the Bid Rate
Maturity Date of the Loan, and each conversion, continuation, and payment of
principal amount received by such Bank, provided, however, that the failure to
make such notation shall not limit or otherwise affect the obligations of the
Company under this Agreement or the Note held by such Bank. Each Bank agrees
that prior to the assignment of any Note, it will endorse the schedule attached
to its Note. The records of the Bank reflecting such endorsements shall, in the
absence of manifest error, be conclusive as to the outstanding principal amount
of all Loans owed to the Bank.
SECTION 2.09. Use of Proceeds. The proceeds of the Loans will be used by
the Company (a) on the Closing Date to refinance up to (but not more than)
$118,313,487 in aggregate principal amount of indebtedness incurred by the
Company under the Bridge Loan Facility (the "Bridge Loan Refinancing"), (b)
refinance certain other existing indebtedness of the Company, and (c) to provide
financing for working capital and permitted capital expenditures of the Company,
including the payment of consideration for acquisitions permitted by this
21
Agreement and the payment of fees and expenses incurred in connection with the
transactions contemplated hereby. The Company shall not, directly or indirectly,
use any part of the proceeds of any Loan to: (i) refinance or repay all or any
portion of principal indebtedness incurred by the Company under the Bridge Loan
Facility other than in connection with (I) the Bridge Loan Refinancing, and (II)
the repayment of principal under the Bridge Loan Facility in an amount equal to
the lesser of (x) the actual amount of all underwriting discounts, fees and
commissions, if any, paid in cash by the Company after the Closing Date from the
gross proceeds of any and all issuances of Junior Preferred Securities occurring
after the Closing Date, and (y) an amount equal to the product of 0.035 times
the gross proceeds of any and all issuances of Junior Preferred Securities
occurring after the Closing Date; or (ii) for the purpose of purchasing or
carrying any margin stock within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System or to extend credit to any Person for
the purpose of purchasing or carrying any such margin stock, or for any purpose
which violates, or is inconsistent with, Regulation X of such Board of
Governors.
SECTION 2.10 Method of Payment; Limitation on Set Off and Tax
Withholding.
(A) Method of Payment. The Company shall make each payment under
this Agreement and the Notes not later than 3:00 p.m. Eastern time on the date
when due in lawful money of the United States and in immediately available
funds. The Company hereby authorizes each Bank, if and to the extent payment is
not made when due, to charge from time to time against any account of the
Company with such Bank any amount so due. If any payment date is stated to be
due on a day which is not a Business Day, then such payment shall be made on the
next succeeding Business Day, and such extension of time shall be included in
the computation of the payment of interest.
(B) Limitation on Set Off and Tax Withholding. Without limiting any
other provision of this Agreement, all payments (including, without limitation,
principal, interest and/or fees) made under or pursuant to this Agreement or any
Note shall be made by the Company without regard to any rights of set off or
counterclaim and in such amounts as may be necessary in order that all such
payments (after deduction or withholding for or on account of any present or
future taxes, levies, imposts, duties or other charges of whatsoever nature
imposed by any governmental authority, other than any tax on or measured by the
net income of a Bank pursuant to the income tax laws of the United States or of
the jurisdictions where such Bank's principal office is located (collectively,
"Taxes")) shall not be less than the amounts otherwise specified to be paid
under this Agreement and/or the Notes. If the Company is required by law to make
any deduction or withholding on account of Taxes from any payment due hereunder
(principal, interest or otherwise), then the amount payable will be increased to
such amount which, after deduction from such increased amount of all amounts
22
required to be deducted or withheld therefrom, will not be less than the amount
otherwise due and payable. Without prejudice to the foregoing, if any Bank or
the Administrative Agent is required to make any payment on account of Taxes,
the Company will, upon notification by the Bank or the Administrative Agent,
promptly indemnify such person against such Taxes together with any interest,
penalties and expenses payable or incurred in connection therewith.
SECTION 2.11. Indemnity. The Company shall indemnify each Bank against any
loss, cost or expense which such Bank may sustain or incur as a consequence of
(a) any failure by the Company to borrow or to continue, convert or extend any
Loan hereunder after notice of such borrowing, continuing, conversion or
extension has been given pursuant to Section 2.02, or 2.04, or (b) any payment,
prepayment or conversion by the Company of a LIBOR Loan or Bid Rate Loan
required by any other provision of this Agreement or otherwise made or deemed
made on a date other than the last day of the Interest Period or the Bid Rate
Maturity Date applicable thereto. In the case of any such event, the Company
shall, upon demand by such Bank (with a copy of such demand to the
Administrative Agent), pay to such Bank any amounts required to compensate such
Bank for any reasonable loss, cost or expense which such Bank may incur as a
result of such action or inaction by the Company, including, without limitation,
any reasonable loss, cost, or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Bank to fund or maintain
such Loan or proposed Loan. Each determination by a Bank under this Section 2.11
shall be in good faith and shall be conclusive absent manifest error.
SECTION 2.12. Additional Costs. The Company shall pay directly to each
Bank within fifteen (15) days of a request for payment under this Section 2.12,
such amounts as such Bank may determine in good faith to be necessary to
compensate it for any increased costs which such Bank determines are
attributable to its making or maintaining any LIBOR Loan, or its obligation to
convert any Base Rate Loan to a LIBOR Loan hereunder, or any reduction in any
amount receivable by such Bank hereunder in respect of any such LIBOR Loan or
such obligation (such increases in costs and reductions in amounts receivable
being herein called "Additional Costs"), resulting from any Regulatory Change
which:
(A) Changes the basis of taxation of any amounts payable to such
Bank under this Agreement or the Notes in respect of any such LIBOR Loan (other
than changes in the rate of income tax imposed on such Bank or its Applicable
Lending Office by the jurisdiction in which such Bank has its principal office
or such Applicable Lending Office); or
(B) Imposes or modifies any reserve, special deposit, deposit
insurance or assessment, minimum capital, capital ratio or similar requirements
relating to any extensions of credit of the type specified herein which is not
included in the computation of "LIBOR Rate" provided that the Company shall have
no obligation to pay any such amount to any Bank unless such Bank shall have
provided the Company with written notice of such Regulatory Change and a
detailed computation of the interest rate change within thirty (30) days of when
the Bank becomes aware of such Regulatory Change.
23
Without limiting the effect of the provisions of the first paragraph of
this Section 2.12, in the event that, by reason of any Regulatory Change, any
Bank either (1) incurs Additional Costs based on or measured by the excess above
a specified level of the amount of a category of deposits or other liabilities
of such Bank which includes deposits by reference to which the LIBOR Loan is
determined as provided in this Agreement or a category of extensions of credit
or other assets of such Bank which includes loans based on the LIBOR Loan; or
(2) becomes subject to restrictions on the amount of such a category of
liabilities or assets which it may hold, then, if such Bank so elects by notice
to the Company (with a copy to the Administrative Agent), the obligation of such
Bank to make or continue, or to convert Base Rate Loans into LIBOR Loans, shall
be suspended until such Regulatory Change ceases to be in effect (in which case
the provisions of Section 2.15 hereof shall be applicable).
Each Bank agrees to allocate increased costs charged to the Company pursuant to
this Section 2.12 among its similarly situated borrowers in good faith and on an
equitable basis.
Determinations and allocations by such Bank for purposes of this Section
2.12 of the effect of any Regulatory Change pursuant to the first or second
paragraph of this Section 2.12, on its costs or rate of return of maintaining
the LIBOR Loans or on amounts receivable by it in respect of the LIBOR Loans,
and the amounts required to compensate such Bank under this Section 2.12, shall
be conclusive absent manifest error.
SECTION 2.13. Limitation on Types of Advances. Anything herein to the
contrary notwithstanding, if, on or prior to the determination of the LIBOR
Rate for any Interest Period:
(A) The Administrative Agent determines (which determination shall
be conclusive) that quotations of interest rates in the definition of "LIBOR
Base Rate" in Section 1.01 hereof are not being provided for the relevant
maturities for purposes of determining rates of interest for LIBOR Loans, as
provided in this Agreement; or
(B) Any Bank determines (which determination shall be conclusive)
that the relevant rates of interest referred to in the definition of "LIBOR Base
Rate" in Section 1.01 hereof, upon the basis of which the rate of interest for
LIBOR Loans for such Interest Period is to be determined, do not adequately
cover all the LIBOR funding costs to such Bank of making or maintaining such
LIBOR Loan for such Interest Period (and such Bank shall provide written notice
and justification of its determination to Administrative Agent which can be
shared with the Company);
24
then the Administrative Agent shall give the Company prompt notice thereof, and
so long as such condition remains in effect, in the case of subsection (A)
above, the Banks, and in the case of subsection (B) above, the Bank that makes
the determination, shall be under no obligation to make LIBOR Loans, convert
Base Rate Loans into LIBOR Loans, or continue LIBOR Loans, and the Company
shall, without penalty, on the last day of the then current applicable Interest
Period for each outstanding LIBOR Loan, either prepay such LIBOR Loan owing to
such Bank, or convert such LIBOR Loan into a Base Rate Loan in accordance with
Section 2.04.
SECTION 2.14. Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Bank or its Applicable
Lending Office to honor its obligation to make or maintain LIBOR Loans hereunder
or convert Base Rate Loans into LIBOR Loans, then such Bank shall promptly
notify the Administrative Agent and the Company thereof and such Bank's
obligation to make or continue, or to convert Base Rate Loans into, LIBOR Loans,
shall be suspended until such time as such Bank may again make and maintain
LIBOR Loans (in which case the provisions of Section 2.15 hereof shall be
applicable).
SECTION 2.15. Treatment of Affected Loans. If the obligations of any Bank
to make or continue LIBOR Loans, or to convert Base Rate Loans into LIBOR Loans
are suspended pursuant to Sections 2.12, 2.13 or 2.14 hereof (Loans so affected
being herein called "Affected Loans"), such Bank's Affected Loans shall be
automatically converted into Base Rate Loans on the last day(s) of then current
Interest Period(s) for the Affected Loans (or, in the case of a conversion
required as a result of Section 2.14, on such earlier date as such Bank may
specify to the Company if in such Bank's judgment such conversion is necessary
to comply with such change in Law).
To the extent that such Bank's Affected Loans have been so converted, all
payments and prepayments of principal which would otherwise be applied to such
Bank's Affected Loans shall be applied instead to its Base Rate Loans. All Loans
which would otherwise be made or continued by such Bank as LIBOR Loans shall be
made or continued instead as Base Rate Loans and, all Base Rate Loans of such
Bank which would otherwise be converted into LIBOR Loans shall remain as Base
Rate Loans.
SECTION 2.16. Capital Adequacy. If any Bank shall have determined that,
after the date hereof, the adoption of any applicable Law regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank, or
comparable agency charged with the interpretation or administration thereof, or
any request or directive regarding capital adequacy (whether or not having the
force of Law) of any such Governmental Authority, central bank, or comparable
agency, has or would have the effect of reducing the rate of return on capital
of such Bank (or its parent) as a consequence of such Bank's obligations
hereunder to a level below that which such Bank (or its parent) could have
achieved but for such adoption, change, request, or directive (taking into
consideration its policies with respect to capital adequacy existing on the date
of this Agreement) by an amount deemed by such Bank to be material, then from
time to time, within fifteen (15) days after written demand by such Bank (with a
25
copy to the Administrative Agent), the Company shall pay to such Bank such
additional amount or amounts as will compensate such Bank (or its parent) for
such reduction. A certificate of any Bank claiming compensation under this
Section shall be conclusive in the absence of manifest error.
SECTION 2.17. Investment in CoBank. The Company agrees to make such
investment in CoBank as may from time to time be required in accordance with the
Farm Credit Act of 1971, as amended, the regulations of the Farm Credit
Administration, the bylaws of CoBank, and the capital plan of CoBank as adopted
by CoBank's board of directors, all as may be amended from time to time.
CoBank's pro rata share of the Loans and other obligations due to CoBank shall
be secured by a statutory first lien on all equity which the Company may now own
or hereafter acquire in CoBank. Such equity shall not, however, constitute
security for the obligations due to any other Bank. CoBank shall not be
obligated to set off or otherwise apply such equities to the Company's
obligations to CoBank.
SECTION 2.18. Reduction of Commitments. Upon at least five (5) calendar
days prior written notice to the Administrative Agent, the Company shall have
the right, without premium or penalty, to terminate the Commitments, in whole or
in part, provided that:
(A) (i) Any such termination shall apply to ratably and permanently
reduce the Commitment of each Bank, (ii) no voluntary prepayment of Bid Rate
Loans will be permitted, (iii) any partial termination shall be in an aggregate
amount of at least $10,000,000 and integral multiples of $5,000,000 in excess
thereof, (iv) after a partial termination of Commitments, any Bank with Bid Rate
Loans outstanding in excess of its reduced Commitment will be deemed to have
made a Bid Rate Loan in excess of its Commitment as provided in Section 2.01,
(v) to the extent a prepayment results from a whole or partial termination of
the Commitments, the Company will pay all costs relating to prepayment of a
LIBOR Loan as set forth in Section 2.11 and (vi) the Company shall comply with
the provisions of Section 2.06(B); and
(B) If after a partial termination of the Commitments, one or more
Banks has outstanding Base Rate Loans and LIBOR Loans, in the aggregate, in
excess of the such Bank's reduced Commitment then the Company shall reduce, by
prepayment, the subject Base Rate Loans and LIBOR Loans to the amount of such
Bank's Commitment on the effective date of any such partial termination; and
(C) If after a partial termination of the Commitments, no Bank has
outstanding Base Rate Loans and LIBOR Loans, in the aggregate, in excess of the
Bank's reduced Commitment, then, unless otherwise required under Section
2.06(B), no prepayment shall be required by the Company in connection with such
partial termination of the Commitments.
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(D) Upon a reduction in the Commitments, the facility fee, as
described in Section 2.07, will be determined based on the reduced Commitments
and, accordingly, the facility fee for each Bank will be reduced.
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.01. Conditions Precedent to Initial Use of the Commitments on
and after the Closing Date. The obligation of the Banks on or after the Closing
Date to make the initial Loans is subject to the conditions precedent that the
Administrative Agent shall have received on or before the Closing Date each of
the following documents, in form and substance satisfactory to the
Administrative Agent, each Bank and their respective counsel, and each of the
following requirements shall have been fulfilled:
(A) Evidence of Due Organization and all Corporate Actions by the
Company. A certificate of the Secretary or Assistant Secretary of the Company
dated the Closing Date, attesting to the certificate of incorporation of the
Company and all amendments thereto, to the amended bylaws of the Company, and to
all corporate actions taken by the Company, including resolutions of its board
of directors, authorizing the execution, delivery, and performance of the Loan
Documents, and each document to be delivered pursuant to the Loan Documents.
(B) Incumbency and Signature Certificate of the Company. A
certificate of the Secretary or Assistant Secretary of the Company, dated the
Closing Date, certifying the names and true signatures of the officers of the
Company authorized to sign the Loan Documents, and any documents to be delivered
pursuant to the Loan Documents.
(C) Good Standing Certificate of the Company. A certificate, dated
within ten (10) Business Days of the Closing Date, from the Secretary of State
(or other appropriate official) of the jurisdiction of incorporation of the
Company certifying as to the due incorporation and good standing of the Company.
(D) Notes. The Notes for each Bank, duly executed by the Company.
(E) Opinion of Counsel for Company. A favorable opinion of Xxxx &
Valentine, L.L.P., counsel for the Company, dated the Closing Date substantially
in the form of Exhibit G.
27
(F) Payment of Fees. Payment in full to the Agents of all fees
required to be paid as of such date pursuant to the terms of the Term Sheet,
this Agreement and any other Loan Document. Payment in full to the Lead
Arranger, for its own account, of all fees required to be paid as of such date
pursuant to the terms of the Lead Arranger Fee Letter at the times specified
therein for payment.
(G) Officer's Certificate. The following statements shall be true
and the Administrative Agent shall have received a certificate signed by a duly
authorized officer of the Company dated the Closing Date stating that:
(1) The representations and warranties contained in this
Agreement are, as of the Closing Date, as though made on and as of such date,
correct in all material respects; and
(2) No Potential Default or Event of Default has occurred and
is continuing.
(H) Due Diligence and Additional Documentation. The Agents shall
have received and reviewed all requested information and documents necessary for
the completion of their due diligence review of the Company, and the results of
such due diligence review shall be satisfactory to each of the Agents. The
Company shall have obtained and executed and delivered to the Administrative
Agent, such other approvals, opinions, or documents as any Bank may reasonably
request.
(I) No Material Adverse Change. Since June 30, 1998, there shall not
have occurred any material adverse change in the condition (financial or
otherwise), operations, properties, assets, business, liabilities (actual or
contingent) or prospects of the Company or any of its Subsidiaries, taken as a
whole, or any event or condition that has had or could be reasonably expected to
have a Material Adverse Effect. There shall not have occurred any material
disruption of or material adverse change in financial, banking or capital market
conditions that, in the sole judgment of the Agents or the Lead Arranger, could
materially impair the syndication of the Credit Facility.
(J) Absence of Litigation. No litigation by any Person or
Governmental Authority shall be pending or threatened against the Company (i)
with respect to the Credit Facility or any of the Loan Documents executed in
connection therewith or the transactions contemplated thereby, or (ii) which
could reasonably be expected to have a Material Adverse Effect.
28
(K) Minimum Rating. The Company shall have achieved a corporate
rating of BB+ or better from Standard & Poor's and Ba1or better from Xxxxx'x,
such rating shall then be in effect and no downgrading shall have occurred in
such rating by either of such rating agencies.
(L) Additional Documentation; Financial Statements. Such other
approvals, opinions, or documents as the Agents or any Bank may reasonably
request. The Agents and each Bank shall have received recent annual and interim
financial statements and other financial information with respect to the Company
and its consolidated Subsidiaries, in each case, prepared in accordance with
GAAP. Without limitation of the foregoing, the Agents and each Bank shall have
received (A) audited consolidated financial statements for the Company and its
consolidated Subsidiaries for the fiscal year ended June 30, 1998, and (B)
unaudited consolidated financial statements for the Company and its consolidated
Subsidiaries for the fiscal quarter ended September 30, 1998 and the five-month
period ended November 30, 1998.
(M) Other Credit Facilities. The Company shall have terminated the
line of credit facilities in place prior to the Closing Date as set forth on
Schedule 3.01(M) hereto and all obligations of the Company under such line of
credit facilities shall have been paid in full, except for the following line of
credit facilities which shall not be terminated, but shall remain outstanding in
accordance with their terms (the "Continuing Credit Facilities"): (i) that the
line of credit provided by CoBank to the Company pursuant to that certain
Consolidating Supplement (designated as Loan No. E131TO2) to the Master Loan
Agreement dated February 1, 1997, by and between CoBank and the Company; (ii)
that certain Line of Credit Agreement No. S-4308 dated January 29, 1992,
provided by CoBank to the Company, in the amount of $10,000,000; (iii) that
certain Loan Agreement No. T-4391 dated January 18, 1994, provided by Xxxxxx,
Inc. to the Company, in the amount of $3,000,000; and (iv) the overnight line of
credit currently provided by Crestar Bank to the Company. Without limiting the
foregoing, prior to or simultaneously with any funding of the initial Loans, the
Administrative Agent shall have received evidence in form and substance
reasonably satisfactory to the Administrative Agent, that with the proceeds of
the initial Loans $118,313,487 in aggregate principal amount of indebtedness
incurred by the Company under the Bridge Loan Facility evidenced by the Bridge
Loan Agreement and any loan documents executed by the Company in connection
therewith has been paid.
(N) Amendment to Bridge Loan Agreement. The Company and the other
parties to the Bridge Loan Agreement shall have entered into an amendment, in
form and substance satisfactory to the Agents and the Banks (the "Bridge Loan
Amendment"), pursuant to which effective as of the Closing Date: (i) the
aggregate term loan commitment of the lenders thereunder shall be reduced to a
principal amount not to exceed the amount available for drawing under the
Rabobank Letter of Credit (after giving effect to the prepayment required to be
made on the Closing Date pursuant to Section 3.01(M) of this Agreement), and
29
(ii) the Company shall be required to repay (without penalty) the principal
amount of any outstanding term loans under the Bridge Loan Agreement with the
entire proceeds from any draws at any time, and from time to time, made under
the Rabobank Letter of Credit. The Agents shall have received a copy of the
fully executed Bridge Loan Amendment.
(O) Financing Services and Contributed Capital Agreements. The
Financing Services and Contributed Capital Agreements shall be in full force and
effect and shall be in form and substance satisfactory to the Agents, the Lead
Arranger and their respective legal counsel.
(P) Satisfaction of Conditions to the Closing of the Statesman
Credit Facility. All of the conditions precedent to the closing of, and the
initial funding of any loans under, the Statesman Credit Facility as described
in the Statesman Term Sheet shall have been satisfied in full.
(Q) Lending Commitments. The Company and Statesman shall have
received lending commitments from financial institutions satisfactory to the
Agents of not less than $400,000,000 in the aggregate for this Credit Facility
and the Statesman Credit Facility.
(R) Pay Proceeds Letter. The Company shall have executed and
delivered to the Administrative Agent and each Bank a pay proceeds letter dated
the Closing Date (the "Pay Proceeds Letter"), in form and substance satisfactory
to the Administrative Agent and the Banks.
SECTION 3.02. Conditions Precedent to Each Loan. The obligations of
the Banks to make each Loan after the Closing Date shall be subject to the
further conditions precedent that on the date of providing such Loan;
(A) The following statements shall be true:
(1) All the representations and warranties contained in
Article IV of this Agreement, and each of the other Loan Documents are, as of
the date of such Loan, correct; and
(2) No Potential Default or Event of Default has occurred and
is continuing hereunder or would result from providing such Loan;
(B) Appropriate notices with respect to funding have been made to
either the Banks or the Administrative Agent as appropriate.
SECTION 3.03. Deemed Representation. Each request for a Loan and
acceptance by the Company of any proceeds of such Loan, as the case may be,
shall constitute a representation and warranty that on the date of each request
30
and on the date each Loan is made or issued: (1) all of the representations and
warranties contained in Article IV of this Agreement and the other Loan
Documents are correct and (2) no Potential Default or Event of Default has
occurred and is continuing hereunder or would result from such Loan.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to each Bank that:
SECTION 4.01. Incorporation, Good Standing, and Due Qualification. The
Company is duly incorporated, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation; has the corporate power and
authority to own its assets and to transact the business in which it is now
engaged or proposed to be engaged in; and is duly qualified as a foreign
corporation and in good standing under the laws of each other jurisdiction in
which such qualification is required.
SECTION 4.02. Corporate Power and Authority. The execution, delivery, and
performance by the Company of the Loan Documents have been duly authorized by
all necessary corporate action and do not and will not (1) require any consent
or approval of the stockholders of the Company, of any Governmental Authority or
of any other Person; (2) contravene the Company's charter or bylaws; (3) violate
any provision of any Law, order, writ, judgment, injunction, decree,
determination, or award presently in effect having applicability to the Company;
(4) result in a breach of or constitute a default under any indenture or loan or
credit agreement or any other agreement, lease, or instrument to which the
Company is a party or by which it or its properties may be bound or affected;
(5) except as contemplated by this Agreement, result in or require the creation
or imposition of any Lien, upon or with respect to any of the properties now
owned or hereafter acquired by the Company; or (6) cause the Company to be in
default under any such Law, order, writ, judgment, injunction, decree,
determination, or award or any such indenture, agreement, lease, or instrument.
SECTION 4.03. Legally Enforceable Agreement. This Agreement and each of
the other Loan Documents are legal, valid, and binding obligations of the
Company, enforceable against the Company in accordance with their respective
terms, except to the extent that such enforcement may be limited by applicable
bankruptcy, insolvency, and other similar laws affecting creditors' rights
generally.
SECTION 4.04. Financial Statements. The audited balance sheet of the
Company and its consolidated Subsidiaries as of June 30, 1998, and the related
statements of operations, patrons' equity, and cash flows of the Company and its
consolidated Subsidiaries for the fiscal year then ended, and the accompanying
footnotes, together with the opinion thereon, dated August 31, 1998 (except as
31
to note 19, for which the date is October 13, 1998), of PricewaterhouseCoopers
LLP, independent certified public accountants, the unaudited balance sheet of
the Company and its consolidated Subsidiaries as of September 30, 1998 and
November 30, 1998, and the related statements of operations of the Company and
its consolidated Subsidiaries for the periods then ended, copies of which have
been furnished to each Bank, in each case, are complete and fairly present the
financial condition of the Company and its consolidated Subsidiaries as of such
date and the results of the operations of the Company and its consolidated
Subsidiaries for the period covered by such statements, all in accordance with
GAAP (except that the interim financial statements for the quarterly period
ending September 30, 1998 and for the five-month period ended November 30, 1998
are subject to year-end adjustments) consistently applied, and since June 30,
1998, there has been no material adverse change in the financial condition of
the Company and its consolidated Subsidiaries. There are no liabilities of the
Company and its consolidated Subsidiaries, fixed or contingent, which are
material but are not reflected in the financial statements or in the notes
thereto. No information, exhibit, or report furnished by the Company to any Bank
in connection with the negotiation of this Agreement contained any material
misstatement of fact or omitted to state a material fact or any fact necessary
to make the statement contained therein not materially misleading.
SECTION 4.05. Labor Disputes and Acts of God. Neither the business nor the
properties of the Company are affected by any fire, explosion, accident, strike,
lockout, or other labor dispute, drought, storm, hail, earthquake, embargo, act
of God or of the public enemy, or other casualty (whether or not covered by
insurance), which has resulted in or might reasonably be expected to result in a
material adverse change in the business properties, assets, operations, or
condition, financial or otherwise, of the Company.
SECTION 4.06. Other Agreements. The Company is not a party to any
indenture, loan or credit agreement, or to any lease or other agreement or
instrument, or subject to any charter or corporate restriction, which could have
a Material Adverse Effect. The Company is not in default in any respect in the
performance, observance, or fulfillment of any of the obligations, covenants, or
conditions contained in any agreement or instrument material to its business to
which the Company is a party.
SECTION 4.07. Litigation. To the knowledge of the executive officers of
the Company, there are no pending or threatened actions or proceedings against
or affecting the Company before any court, governmental agency, or arbitrator,
which might reasonably be expected to, in any one case or in the aggregate,
materially adversely affect the financial condition of the Company or the
ability of the Company to perform its obligation under the Loan Documents.
SECTION 4.08. No Defaults on Outstanding Judgments or Orders. The Company
has satisfied all judgments in excess of $1,000,000 (not covered by insurance),
and the Company is not in default with respect to any judgment, writ,
injunction, decree, rule, or regulation of any court, arbitrator, or federal,
32
state, municipal, or other Governmental Authority, commission, board, bureau,
agency, or instrumentality, domestic or foreign which might reasonably be
expected to result in a material adverse change in the business prospects or
financial condition of the Company.
SECTION 4.09. Ownership and Liens. The Company has title to, or valid
leasehold interests in, all of its properties and assets, real and personal,
including the properties and assets and leasehold interests reflected in the
financial statements referred to in Section 4.04 (other than any properties or
assets disposed of in the ordinary course of business), and none of the
properties and assets owned by the Company and none of its leasehold interests
are subject to any Lien, except such as may be permitted pursuant to Section
6.01 of this Agreement.
SECTION 4.10. Subsidiaries, Affiliates, and Ownership of Stock. On the
date hereof, the Company does not have any Subsidiaries other than as described
in Schedule 4.10. Set forth in Schedule 4.10 is a complete and accurate list of
the Subsidiaries and Affiliates of the Company, showing the jurisdiction of
incorporation or formation of each and showing the percentage of the Company's
ownership of the outstanding stock or other interest of each Subsidiary and
Affiliate. All of the outstanding capital stock or other ownership interest of
each Subsidiary and Affiliate owned by the Company has been validly issued, is
fully paid and nonassessable, and is owned by the Company free and clear of all
Liens except for those Liens permitted under Section 6.01 hereof.
SECTION 4.11. ERISA. The Company is in compliance in all material respects
with all applicable provisions of ERISA. Neither a Reportable Event nor a
Prohibited Transaction has occurred and is continuing with respect to any Plan;
no notice of intent to terminate a Plan has been filed, nor has any Plan been
terminated; no circumstances exist which constitute grounds entitling the PBGC
to institute proceedings to terminate, or appoint a trustee to administer, a
Plan, nor has the PBGC instituted any such proceedings; neither the Company nor
any ERISA Affiliate has any liability arising from the complete or partial
withdrawal from a Multiemployer Plan, the Company and each ERISA Affiliate have
met their minimum funding requirements under ERISA with respect to all of their
Plans and the present value of all vested benefits under each Plan does not
exceed the fair market value of all Plan assets allocable to such benefits, as
determined on the most recent valuation date of the Plan and in accordance with
the provisions of ERISA; and neither the Company nor any ERISA Affiliate has
incurred any liability to the PBGC under ERISA.
SECTION 4.12. Operation of Business. The Company possesses all material
licenses, permits, franchises, patents, copyrights, trademarks, and trade names,
or rights thereto, to conduct its business substantially as now conducted and as
presently proposed to be conducted, and the Company is not in violation of any
rights of others with respect to any of the foregoing.
33
SECTION 4.13. Taxes. The Company has filed all tax returns (federal,
state, and local) required to be filed and has paid all taxes, assessments, and
governmental charges and levies shown thereon to be due, including interest and
penalties.
SECTION 4.14. Compliance With Laws. The Company has duly complied in all
material respects with all applicable Laws. Without limiting the foregoing, the
Company has duly complied in all material respects with, and its businesses,
operations, assets, equipment, property, leaseholds, or other facilities are in
compliance in all material respects with, the provisions of all federal, state,
and local environmental, health, and safety Laws. The Company has been issued
all federal, state, and local permits, licenses, certificates, and approvals
required in any material respect for the operation of its business.
SECTION 4.15. Existing Obligors; Existing Debt and Guarantees. Set forth
in Schedule 4.15 is a complete and accurate list of (i) all Existing Obligors
and the Total Exposure of the Company with respect to each such Obligor, (ii)
all Debt of the Company (which schedule shall identify the nature of such Debt,
the name of the lender, the principal amount outstanding and whether or not such
Debt is secured), and (iii) all Guarantees of the Company (which schedule shall
identify the nature of such Guarantees, the beneficiaries of such Guarantees,
the amount of the obligation guaranteed thereunder and whether or not the
obligations of the guarantors under such Guarantees are secured), in each case,
as of the date of this Agreement.
SECTION 4.16. Directors, Executive Officers, Principal Shareholders. No
director, executive officer or principal shareholder of the Company or any
Affiliate is a director, executive officer or principal shareholder of any Bank
except for Xxxxx Xxxxxxxx, who is a director of Crestar Bank, Xxxxx X. Xxxxxx
who is a director of the Company and Xxxxxxx Xxxxx who is a director of the
Company and CoBank. For the purposes hereof the terms "director", "executive
officer", and "principal shareholder" (when used with reference to any Bank)
have the respective meanings assigned thereto in Regulation O issued by the
Board of Governors of the Federal Reserve System.
SECTION 4.17. Year 2000 Compliance. The Company has (i) initiated a review
and assessment of all areas within its business and operations (including those
affected by suppliers, vendors and customers) that could be adversely affected
by the "Year 2000 Problem" (that is, the risk that computer applications used by
the Company (or its suppliers, vendors and customers) may be unable to recognize
and perform properly date-sensitive functions involving certain dates prior to,
on and after December 31, 1999), (ii) developed a plan and timeline for
addressing the Year 2000 Problem on a timely basis, and (iii) to date,
implemented that plan in accordance with the timetable. Based on the foregoing,
the Company believes that all computer applications (including those of its
34
suppliers, vendors and customers) that are material to its business and
operations are reasonably expected on a timely basis to be able to perform
properly date-sensitive functions for all dates before and after January 1, 2000
(that is, be "Year 2000 compliant"), except to the extent that a failure to do
so could not reasonably be expected to have a Material Adverse Effect.
SECTION 4.18. Margin Stock. The Company is not engaged principally or as
one of its significant activities in the business of extending credit for the
purpose of "purchasing" or "carrying" any "margin stock" (as each such term is
defined or used in Regulation U of the Board of Governors of the Federal Reserve
System). The Company will not, directly or indirectly, use any part of the
proceeds of the Loans for the purpose of purchasing or carrying any margin stock
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System or to extend credit to any Person for the purpose of purchasing
or carrying any such margin stock, or for any purpose which violates, or is
inconsistent with, Regulation X of such Board of Governors.
SECTION 4.19. Government Regulation. The Company is not an "investment
company" or a company "controlled" by an "investment company" (as each such term
is defined or used in the Investment Company Act of 1940, as amended) and the
Company is not, nor after giving effect to any Loan will it be, a "Holding
Company" or a "Subsidiary Company" of a "Holding Company" or an "Affiliate" of a
"Holding Company" within the respective meanings of each of the quoted terms of
the Public Utility Holding Company Act of 1935 as amended, or any other
applicable Law which materially limits its ability to incur or consummate the
transactions contemplated hereby.
ARTICLE V
AFFIRMATIVE COVENANTS
So long as any of the Notes shall remain unpaid, or any Bank shall have
any Commitment hereunder, or any other amount is owing by the Company to any
Bank hereunder, the Company will:
SECTION 5.01. Maintenance of Existence. Preserve and maintain its
corporate existence and good standing in the jurisdiction of its incorporation,
and qualify and remain qualified, as a foreign corporation in each jurisdiction
in which such qualification is required.
SECTION 5.02. Maintenance of Records. Keep adequate records and books of
account, in which complete entries will be made in accordance with GAAP
consistently applied, reflecting all financial transactions of the Company.
35
SECTION 5.03. Maintenance of Properties. Maintain and preserve all of its
properties (tangible and intangible) that are necessary or useful in the proper
conduct of its business in good working order and condition, ordinary wear and
tear excepted.
SECTION 5.04. Conduct of Business. Continue to engage in a business of the
same general type as conducted by it on the date of this Agreement, or
reasonably related thereto, or as contemplated by the Financing Services and
Contributed Capital Agreements.
SECTION 5.05 Maintenance of Insurance. Maintain insurance with financially
sound and reputable insurance companies or associations in such amounts and
covering such risks as are usually carried by companies engaged in the same or a
similar business and similarly situated.
SECTION 5.06. Compliance with Laws. Comply in all material respects with
all applicable Laws. Without limiting the foregoing, the Company will: (i)
comply in all material respects, and cause all Persons occupying or present on
any of its properties to so comply, with all applicable environmental, health
and safety Laws; and (ii) pay before the same become delinquent all taxes,
assessments, and governmental charges imposed upon it or its property, except to
the extent provided in Section 6.01(C) hereof.
SECTION 5.07. Right of Inspection. At any reasonable time and from time to
time, upon reasonable notice, permit any Agent, any Bank or any agent or
representative thereof to examine and make copies of and abstracts from its
records and books of account, visit its properties and discuss its affairs,
finances, and accounts with any of its respective officers, directors and
independent accountants.
SECTION 5.08. Employee Benefit Plans. Make or cause to be made all
payments or contributions to all Plans covered by Title IV of ERISA which are
necessary to enable those Plans to continuously meet all minimum funding
standards or requirements.
SECTION 5.09. Eligibility, Etc. Maintain its eligibility to borrow
from CoBank and purchase such equity in CoBank as provided in Section 2.17
hereof.
SECTION 5.10. Reporting Requirements. Furnish to the Administrative
Agent for distribution to each of the Banks:
(A) Quarterly Financial Statements. As soon as available, and in any
event within 45 days after each fiscal quarter end of the Company (other than
June), a balance sheet of the Company and its consolidated Subsidiaries as of
the end of such fiscal quarter, and related consolidated statements of
operations of the Company and its consolidated Subsidiaries for the period
commencing at the end of the previous fiscal year and ending with the end of
36
such fiscal quarter, all in reasonable detail and stating in comparative form
the respective figures for the corresponding date and period in the previous
fiscal year and all prepared in accordance with GAAP consistently applied and
certified by the chief financial officer of the Company (subject to year-end
adjustments).
(B) Annual Financial Statements. As soon as available and in any event
within 90 days after the end of each fiscal year of the Company, a balance sheet
of the Company and its consolidated Subsidiaries as of the end of such fiscal
year, and related consolidated statements of operations, patrons' equity, and
cash flows of the Company and its consolidated Subsidiaries for such fiscal
year, all in reasonable detail and stating in comparative form the respective
figures for the corresponding date and period in the prior fiscal year and all
prepared in accordance with GAAP consistently applied and, audited in accordance
with generally accepted auditing standards by, and accompanied by, an opinion
thereon acceptable to the Administrative Agent from independent accountants
selected by the Company and of recognized national standing.
(C) Certificate of No Default. Together with each of the statements
furnished under Subsection 5.10(A) and (B) hereof, a certificate of the chief
financial officer of the Company (a) certifying that to the best of such
officer's knowledge, no Potential Default or Event of Default has occurred and
is continuing, or if a Potential Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof and the action which is
proposed to be taken with respect thereto; and (b) containing computations
demonstrating compliance with the covenants contained in Article VII hereof.
(D) Notice of Litigation. Promptly after the commencement thereof,
notice of all actions, suits, and proceedings before any court or governmental
department, commission, board, bureau, agency, or instrumentality, domestic or
foreign, affecting the Company which, if determined adversely to the Company,
might reasonably be expected to have a Material Adverse Effect.
(E) Notice of Environmental Matters. Promptly after receipt thereof,
notice of the receipt of all pleadings, orders, complaints, indictments, or any
other communications alleging a condition that may require the Company to
undertake or to contribute to a cleanup or other response under environmental
Laws, or which seeks penalties, damages, injunctive relief, or criminal
sanctions relating to alleged violations of such Laws, or which claims personal
injury or property damage to any person as a result of environmental factors or
conditions; provided, however, that the Company shall not be required to furnish
notice of any of the foregoing unless the allegation made, remedy sought, or
claim made, if determined adversely to the Company, might reasonably be expected
to have a Material Adverse Effect.
37
(F) Notice of Potential Defaults and Events of Default. As soon as
possible and in any event within fifteen (15) days after the occurrence of each
Potential Default or Event of Default, a written notice setting forth the
details of such Potential Default or Event of Default and the action which is
proposed to be taken by the Company with respect thereto.
(G) Annual Budgets. Promptly upon becoming available, but in no
event later than 90 days after each fiscal year end, a copy of the Company's
annual operating budget approved by the Company's board of directors, together
with the assumptions and projections upon which the budget is based, in each
case, consistent with the form of annual operating budget for the Company
provided to the Administrative Agent prior to the date of this Agreement. In
addition, if any material changes are made to such budget during the year, then
the Company will furnish copies of any such changes promptly after such changes
have been approved by the Company's board of directors.
(H) General Information; SEC Filings. With reasonable promptness,
such other information and financial reports respecting the condition or
operations, financial or otherwise, of the Company as any Bank may from time to
time reasonably request. All filings of regular and special reports by the
Company with the Securities and Exchange Commission and all annual and quarterly
reports and notices of meetings and proxy information provided by the Company to
its equity holders.
(I) Management Reports, etc. Promptly after receipt thereof, copies
of any management report submitted to the Company or its board of directors by
its independent public accountants in connection with their auditing function
and any management responses thereto.
(J) Notice of Other Credit Arrangements. The Company will promptly,
and in any event within fifteen (15) days, notify the Administrative Agent of
the amount, terms, and conditions of any credit facilities extended or otherwise
made available to the Company that exceed $5,000,000 in the aggregate. Provided,
however, any such notice to the Administrative Agent will not include pricing
and interest rate terms with respect to the subject credit facilities. Notice
will not be required with respect to: (A) Debt of the Company under this
Agreement; (B) Debt incurred prior to the Closing Date and disclosed on Schedule
4.15; and (C) uncommitted short term debt of the Company in an amount not to
exceed $10,000,000 at any one time outstanding.
SECTION 5.11. Year 2000 Preparation. The Company shall take all action
necessary to assure that Company's computer-based systems are able to operate
and effectively process data including dates prior to, on and after December 31,
1999. At the request of the Administrative Agent, the Company shall provide the
Administrative Agent and the Banks assurances reasonably satisfactory to the
Administrative Agent and the Banks of the Company's compliance with this Section
5.11.
38
ARTICLE VI
NEGATIVE COVENANTS
So long as any of the Notes shall remain unpaid, or any Bank shall have
any Commitment hereunder, or any other amount is owing by the Company to any
Bank hereunder, the Company will not:
SECTION 6.01. Liens. Create, incur, assume, or suffer to exist any
Lien upon or with respect to any or its properties now owned or hereafter
acquired, except:
(A) Liens existing on the date of this Agreement listed on Schedule
6.01.
(B) Liens in favor of CoBank on all equity which the Company may now
own or hereafter acquire in CoBank to secure obligations of the Company to
CoBank.
(C) Liens for taxes or assessments or other government charges or
levies if not yet delinquent or, if delinquent: (i) are being contested in good
faith by appropriate proceedings; (ii) for which appropriate reserves have been
established in accordance with GAAP; and (iii) the amount secured (including
interest and penalties) does not exceed $1,000,000.
(D) Liens imposed by Law in favor of mechanics, material suppliers,
landlords, warehouses, carriers, and similar entities, securing obligations
incurred in the ordinary course of business which are not past due for more than
30 days or which are being contested in good faith by appropriate proceedings
and for which appropriate reserves have been established in accordance with
GAAP.
(E) Liens under workers' compensation, unemployment insurance,
Social Security, or similar legislation (other than ERISA).
(F) Liens, deposits, or pledges to secure the performance of bids,
tenders, contracts (other than contracts for the payment of money), and like
obligations which arise in the ordinary course of business of the Company as
conducted on the date hereof.
(G) Judgment and other similar Liens not constituting an Event of
Default under Section 8.01(G) hereof.
(H) Easements, rights-of-way, restrictions, and other similar
encumbrances which, in the aggregate, do not materially interfere with the
39
occupation, use, and enjoyment by the Company of the property or assets
encumbered thereby in the normal course of its business and materially impair
the value of the property subject thereto.
(I) Purchase-money Liens on any real property, fixtures, and
equipment hereafter acquired or the assumption of any Lien on real property,
fixtures, and equipment existing at the time of such acquisition (and not
created in contemplation of such acquisition), or Liens incurred in connection
with any Capital Lease; provided that:
(1) Any property subject to any of the foregoing is acquired by
the Company in the ordinary course of its business and the Lien on any such
property attaches to such asset concurrently or within ninety (90) days after
the acquisition thereof or completion of construction thereof;
(2) The obligation secured by any such Lien shall not exceed
100% of the lesser of the cost or the fair market value of such property as of
the time of acquisition or construction of the property covered thereby;
(3) Each such Lien shall attach only to the property so
acquired or constructed and fixed improvements thereon; and
(4) Such acquisition is not prohibited under Section 6.02
hereof.
(J) Liens not otherwise permitted by clauses (A) through (I),
inclusive, of this Section 6.01, provided that the aggregate amount of
obligations secured by such Liens does not at any time exceed $2,500,000.
SECTION 6.02. Mergers, Etc. Wind up, liquidate or dissolve itself,
reorganize, merge or consolidate with or into, or convey, sell, assign,
transfer, lease, or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to any Person, or acquire all or substantially all
of the assets or the business of any Person, except (1) for capital expenditures
made in the ordinary course of business of the Company, and (2) for acquisitions
so long as the aggregate cash and non-cash consideration paid, directly or
indirectly, by the Company (including, without limitation, any indebtedness
assumed by the Company)for all such acquisitions in any fiscal year of the
Company does not exceed $10,000,000.
SECTION 6.03. Sale of Assets. Sell, lease, assign, transfer, or otherwise
dispose of any of its now owned or hereafter acquired assets (including, without
limitation, receivables, and leasehold interests), except (i) sales, leases or
other dispositions of assets in the ordinary course of its business, (ii) sales
and other dispositions of assets as provided in the Financing Services and
Contributed Capital Agreements, (iii) the sale of obsolete assets or assets no
longer used or useful in the business, provided that the net proceeds from any
and all such sales of assets are reinvested in assets of the Company that are
used or useful in the business of the Company as conducted in accordance with
40
Section 5.04, (iv) sales of assets other than pursuant to clauses (i), (ii) and
(iii) above with an aggregate value not to exceed $10,000,000 in any year, and
(v) sales and other dispositions of certain assets acquired from GoldKist in an
aggregate amount not to exceed $30,000,000. In connection with any sale or other
disposition, or series of related sales or other dispositions, of assets of the
type referred to in clause (v) above in an aggregate amount of $10,000,000 or
more, the Company shall provide the Administrative Agent with a report
describing in reasonable detail the assets which are the subject of such sale or
other disposition (or series of related sales or other dispositions) by not
later than 30 days after the date of such sale or other disposition (or series
of related sales or dispositions).
SECTION 6.04. Investments. Except as otherwise provided herein, make loans
to, advances to, capital contributions or investments in any Person
("Investments") except Permitted Investments; provided, however, that
transactions contemplated under the Financing Services and Contributed Capital
Agreements and transactions in the normal course of business of the Company as
currently conducted shall not be deemed to be, or be deemed to result in,
Investments.
SECTION 6.05. Guarantees, Etc. Assume, guarantee, endorse, or otherwise be
or become directly or contingently responsible or liable (including, but not
limited to, by an agreement to purchase any obligation, stock, assets, goods, or
services, or to supply or advance any funds, assets, goods, or services, or an
agreement to maintain or cause such Person to maintain a minimum working capital
or net worth or otherwise to assure the creditors of any Person against loss),
for obligations of any Person (collectively, "Guarantees"), except: (1) by the
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business; (2) Guarantees of the
obligations of any Person, provided that the Total Exposure of the Company in
respect of all such Guarantees may not exceed $7,500,000 at any one time in the
aggregate; (3) any liability contemplated by the Financing Services and
Contributed Capital Agreements; (4) any Guarantee of the payment of any capital
securities constituting Junior Preferred Securities out of funds held by the
issuer of such capital securities, provided that such Guarantee is subordinated
in right of payment to the Loans and all other obligations of the Company
hereunder and upon terms and conditions satisfactory to the Agents and their
respective counsel.
SECTION 6.06. Transactions with Affiliates. Enter into any transaction,
including, without limitation, the making of any Investments or Guarantees, the
purchase, sale, or exchange of property or the rendering of any service, with
any Affiliate, except for (1) transactions in the ordinary course of business of
the Company with one or more of Statesman, MLCC and Xxxxxx, Inc., and pursuant
to the reasonable requirements of its business and upon fair and reasonable
terms no less favorable to the Company than would obtain in a comparable
arm's-length transaction with a Person not an Affiliate and (2) transactions
41
involving the purchase or placement of insurance with Southern States Insurance
Exchange, Inc. Provided, however, the Company may engage in transactions in the
normal course of business as contemplated by the Financing Services and
Contributed Capital Agreements.
SECTION 6.07. Financing Services and Contributed Capital Agreements.
Without the prior written consent of Banks holding at least 75% of the aggregate
Commitments (provided, however, that if (1) there are at least three Banks and
(2) the Administrative Agent holds 75% of the aggregate Commitments then the
consent of one additional Bank will also be required), the Company shall not
modify, amend, terminate, fail to maintain, breach, waive, or otherwise make any
change to or fail to comply with the terms of the Financing Services and
Contributed Capital Agreements.
SECTION 6.08. Fiscal Year. Change its current fiscal year end date.
SECTION 6.09. Leases. Become a lessee under any operating lease if, after
giving effect thereto, the total lease expenses of the Company thereunder,
together with the total lease expenses of the Company, as lessee, under all
other operating leases then in effect, would exceed $30,000,000 in the aggregate
for any fiscal year of the Company.
SECTION 6.10. Prohibition on Amendment of Certain Agreements, etc. (a)
Consent to, or enter into, any instrument, document or agreement which would
result in the amendment, modification, waiver or termination of all or any of
the provisions of the GoldKist Commitment Letter, the GoldKist Acquisition
Agreement or the Rabobank Letter of Credit, (b) release GoldKist from any of its
material obligations under the GoldKist Commitment Letter and the GoldKist
Acquisition Agreement, nor shall the Company fail to perform any of its material
obligations under the GoldKist Commitment Letter and the GoldKist Acquisition
Agreement, or (c) consent to, or enter into, any instrument or agreement (other
than the Bridge Loan Amendment) which would result in the amendment,
modification, waiver or termination of all or any of the provisions of the
Bridge Loan Agreement, without the prior written consent of Banks, provided that
nothing in this Section 6.10 shall be construed as prohibiting (i) the required
repayment of the Company's obligations pursuant to the terms of Sections 2.09
and 3.01(M) or (N) hereof and the Bridge Loan Agreement as amended by the Bridge
Loan Amendment, or making of any draw requests by the Company under the Rabobank
Letter of Credit, or (ii) any reduction in the face amount of the Rabobank
Letter of Credit so long as after giving effect to any such reduction the face
amount of such Letter of Credit available for drawing is not less than (x) an
amount equal to the purchase price of the Junior Preferred Securities which
Goldkist is then or thereafter obligated to purchase pursuant to the Goldkist
Commitment Letter as in effect on the date hereof, or (y) the aggregate term
loan commitment of the lenders under the Bridge Loan Agreement as of the date of
any such proposed reduction.
42
ARTICLE VII
FINANCIAL COVENANTS
So long as any of the Notes shall remain unpaid, or any Bank shall have
any Commitment hereunder, or any other amount is owing by the Company to any
Bank hereunder:
SECTION 7.01. Maximum Consolidated Funded Debt to Capitalization. The
Company shall not permit at any time, and as determined at the end of each
fiscal quarter, the ratio of Consolidated Funded Debt to Capitalization as of
such date to exceed 0.50 to 1.00.
SECTION 7.02. Minimum Tangible Net Worth. The Company shall not
permit at any time, and as determined at the end of each fiscal quarter,
Tangible Net Worth to be less than the sum of:
(a) $256,000,000; plus
(b) an amount equal to the sum, for each fiscal year of the Company ending
subsequent to the Closing Date, of the greater of:
(i) zero dollars ($0); and
(ii) twenty-five percent (25%) of the Net Income of the
Company for each such fiscal year.
SECTION 7.03. Consolidated Cash Flow to Consolidated Interest Expense and
Distributions. As determined at the end of each fiscal quarter, the Company
shall not permit the ratio of (a) Consolidated Cash Flow for the period of four
(4) consecutive fiscal quarters ending on or immediately prior to such date to
(b) Consolidated Interest Expense paid or accrued during such period plus
Distributions made during such period, to be less than 1.50 to 1.00.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.01. Events of Default. Each of the following events shall
be an "Event of Default":
(A) The Company shall fail to make any payment of principal when due
and payable. The Company shall fail to make any payment of interest, fees or any
other amounts hereunder or under any other Loan Document and such failure shall
not be cured within five (5) days of the applicable due date.
43
(B) Any representation or warranty made or deemed made by the
Company in this Agreement, any other Loan Document, or any certificate,
document, opinion, or financial or other statement furnished at any time under
or in connection with any Loan Document, shall prove to have been incorrect,
incomplete, or misleading in any material respect on or as of the date made or
deemed made.
(C) The Company shall fail to perform or observe any term, covenant,
or agreement contained in Article V hereof (other than Sections 5.05 or 5.10(F))
and such failure continues for 15 calendar days after the occurrence thereof,
provided that no Event of Default shall occur as a result of any failure of the
Company to qualify or to maintain its qualification as a foreign corporation as
required by Section 5.01 or as a result of any failure of the Company to comply
with applicable Laws as required by Section 5.06 until 15 days after an
executive officer of the Company has knowledge of such failure.
(D) The Company shall fail to comply with Sections 5.05 or 5.10(F)
hereof or shall fail to perform or observe any other term, covenant, or
agreement contained herein or in any Loan Document to which it is a party.
(E) The Company shall: (a) fail to pay any Debt (other than Debt
arising hereunder) to CoBank or any other Bank, or any interest or premium
thereon, when due (after giving effect to any applicable grace period); (b) fail
to pay any Debt (other than Debt arising hereunder or to CoBank or any other
Bank) in excess of $5,000,000 of the Company, or any interest or premium
thereon, when due (after giving effect to any applicable grace period); or (c)
fail to perform or observe any term, covenant, or condition on its part to be
performed or observed under any agreement or instrument relating to any Debt
referred to in (a) or (b) above when required to be performed or observed, if
the effect of such failure to perform or observe is to accelerate, or to permit
the acceleration of the maturity of such Debt (with respect to (b) above Debt
must exceed $5,000,000), whether or not such Debt is actually accelerated.
(F) The Company (a) shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as such debts become due;
or (b) shall make an assignment for the benefit of creditors, or petition or
apply to any tribunal for the appointment of a custodian, receiver, or trustee
for it or a substantial part of its assets; or (c) shall commence any proceeding
under any bankruptcy, reorganization, arrangement, readjustment of debt,
dissolution, or liquidation law or statute of any jurisdiction; or (d) shall
have had any such petition or application filed or any such proceeding commenced
against it in which an order for relief is entered or an adjudication or
appointment is made, and which remains undismissed for a period of 60 days or
more; or (e) shall take any corporate action indicating its consent to, approval
of, or acquiescence in any such petition, application, proceeding, or order for
44
relief or the appointment of a custodian, receiver, or trustee for all or any
substantial part of its properties; or (f) shall suffer any such custodianship,
receivership, or trusteeship to continue undischarged for a period of 60 days or
more.
(G) One or more judgments, decrees, or orders for the payment of
money in excess of $2,500,000 in the aggregate (not covered by insurance) shall
be rendered against the Company, and such judgments, decrees, or orders shall
continue unsatisfied and in effect for a period of 30 consecutive days without
being vacated, discharged, satisfied, or stayed or bonded pending appeal.
(H) Any of the following events shall occur or exist with respect to
the Company and any ERISA Affiliate under ERISA: any Reportable Event shall
occur; complete or partial withdrawal from any Multiemployer Plan shall take
place; any Prohibited Transaction shall occur; a notice of intent to terminate a
Plan shall be filed, or a Plan shall be terminated; or circumstances shall exist
which constitute grounds entitling the PBGC to institute proceedings to
terminate a Plan, or the PBGC shall institute such proceedings; and in each case
above, such event or condition, together with all other events or conditions, if
any, could subject the Company or any ERISA Affiliate to any tax, penalty, or
other liability which in the aggregate may exceed $1,000,000.
(I) The Financing Services and Contributed Capital Agreements shall,
at any time after execution, cease to be in full force and effect, or shall be
revoked or declared null and void, or the validity or enforceability thereof
shall be contested by the Company, or the Company shall deny any further
liability or obligation thereunder, or shall breach or otherwise fail to
perform its obligations thereunder, or any representation or warranty set forth
therein shall be breached.
(J) If there is a material adverse change in the financial condition
of the Company or the ability of the Company to carry out its obligations under
the Loan Documents.
(K) If the Company fails to promptly use one hundred percent (100%)
of the net proceeds received from the issuance of any Junior Preferred
Securities to repay the principal of any outstanding loans made to the Company
under the Bridge Loan Facility in accordance with Section 3.3(b)(ii) of the
Bridge Loan Agreement as in effect on the date hereof.
(L) The Company shall fail to maintain its existence as a Virginia
agricultural cooperative corporation.
SECTION 8.02. Remedies. If any Event of Default shall occur and be
continuing, the Administrative Agent shall upon the request of the Requisite
Banks, by notice to the Company; (1) declare the Commitments to be terminated,
whereupon the same shall forthwith terminate; (2) declare the outstanding Notes,
all interest thereon, and all other amounts payable under this Agreement and all
other Loan Documents to be forthwith due and payable, whereupon the Notes, all
45
such interest, and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest, or further notice of any kind,
all of which are hereby expressly waived by the Company; (3) exercise any
remedies provided in any of the Loan Documents; and/or (4) exercise any rights
and remedies provided by Law; provided, however, that upon the occurrence of an
Event of Default referred to in Section 8.01(F), the Commitments shall
automatically terminate and the outstanding Notes and any other amounts payable
under this Agreement or any of the Loan Documents, and all interest on any of
the foregoing, shall be forthwith due and payable without presentment, demand,
protest, or further notice of any kind, all of which are hereby expressly waived
by the Company. The parties hereto agree that all payments made by the Company
after the occurrence of an Event of Default which is not expressly waived in
accordance with the terms of this Agreement will be applied ratably to each Bank
based on the proportion that each Bank's outstanding Loans bears to the total of
such Loans.
ARTICLE IX
AGENTS
SECTION 9.01. Authorization and Action. Each Bank hereby irrevocably
appoints and authorizes (a) the Administrative Agent to act as its agent
hereunder and under any other Loan Document with such powers as are specifically
delegated to the Administrative Agent by the terms of this Agreement and any
other Loan Document together with such other powers as are reasonably incidental
thereto, (b) the Documentation Agent to act as its agent hereunder and under any
other Loan Document with such powers as are specifically delegated to the
Documentation Agent by the terms of this Agreement and any other Loan Document
together with such other powers as are reasonably incidental thereto, and (c)
the Syndication Agents to act as its agents hereunder and under any other Loan
Document with such powers as are specifically delegated to the Syndication
Agents by the terms of this Agreement and any other Loan Document together with
such other powers as are reasonably incidental thereto. The duties of the Agents
and the Lead Arranger shall be mechanical and administrative in nature and none
of the Agents or the Lead Arranger shall by reason of this Agreement be a
trustee or fiduciary for any Bank. The Agents and the Lead Arranger shall have
no duties or responsibilities except those expressly set forth herein. As to any
matters not expressly provided for by this Agreement (including, without
limitation, enforcement or collection of the Notes), none of the Agents or the
Lead Arranger shall be required to exercise any discretion or take any action,
but shall be required to act or to refrain from acting (and shall be fully
protected in so acting or so refraining from acting) upon the instructions of
the Requisite Banks, and such instructions shall be binding upon all Banks and
all holders of Notes; provided, however, that none of the Agents or the Lead
Arranger shall be required to take any action which exposes the Agents or the
Lead Arranger to personal liability or which is contrary to this Agreement or
46
applicable Law. The Company shall pay any fees agreed to by the Company and the
Agents and the Company and the Lead Arranger with respect to the Agents' or Lead
Arranger's services hereunder and in connection with the syndication of this
Credit Facility.
SECTION 9.02. Liability of Agent. Neither the Agents, the Lead Arranger
nor any of their respective directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by them under or in
connection with this Agreement in the absence of their own gross negligence or
willful misconduct. Without limitation of the generality of the foregoing, the
Administrative Agent: (1) may treat the payee of any Note as the holder thereof
until the Administrative Agent receives written notice of the assignment or
transfer thereof signed by such payee and in form satisfactory to the
Administrative Agent; (2) may consult with legal counsel (including counsel for
the Company), independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants, or
experts; (3) makes no warranty or representation to any Bank and shall not be
responsible to any Bank for any recitals, statements, warranties, or
representations made in this Agreement and any other Loan Document or in any
certificate or other document or instrument referred to or provided for in, or
received under, this Agreement or any other Loan Document; (4) shall not have
any duty to ascertain or to inquire as to the performance or observance of any
of the terms, covenants, or conditions of this Agreement on the part of the
Company, or to inspect the property (including the books and records) of the
Company; (5) shall not be responsible to any Bank for the due execution,
legality, validity, enforceability, genuineness, perfection, sufficiency, or
value of this Agreement or any other instrument or document furnished pursuant
thereto or for the failure of the Company to comply with the terms hereof or any
other Loan Document; and (6) shall incur no liability under or in respect of
this Agreement by acting upon any notice, consent, certificate, or other
instrument or writing (which may be sent by telegram, telex, or facsimile
transmission) believed by it to be genuine and signed or sent by the proper
parties.
SECTION 9.03. Rights of Each Agent as a Bank. With respect to its
Commitment, the Loans made by it and the Note issued to it, each Agent shall
have the same rights and powers under this Agreement as any other Bank and may
exercise the same as though it were not an Agent hereunder; and the term "Bank"
or "Banks" shall, unless otherwise expressly indicated, include each Agent in
its individual capacity. Each Agent and its affiliates may accept deposits from,
lend money to, act as trustee under the indentures of, and generally engage in
any kind of business with the Company, and any Person who may do business with
or own securities of the Company or any of its Subsidiaries or Affiliates, all
as if such Agent was not an Agent and without any duty to account therefor to
the Banks.
SECTION 9.04. Independent Credit Decisions. Each Bank acknowledges that it
has, independently and without reliance upon the Agents, the Lead Arranger or
any other Bank and based on such documents and information as it has deemed
appropriate, conducted its own investigation into the affairs of the Company and
made its own credit analysis and decision to enter into this Agreement. Each
Bank also acknowledges that it will, independently and without reliance upon the
Agents, the Lead Arranger or any other Bank and based on such documents and
47
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement. Except for
notices, reports and other documents and information expressly required to be
furnished to the Banks by the Administrative Agent hereunder, the Agents shall
have no duty or responsibility to provide any Bank with any credit or other
information concerning the affairs, financial condition or business of the
Company (or any of its Affiliates) which may come into the possession of any
Agent or any of its Affiliates.
SECTION 9.05. Indemnification. The Banks agree to indemnify each Agent and
the Lead Arranger (to the extent not reimbursed by the Company), ratably
according to the respective amounts of their Commitments, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against any Agent
or the Lead Arranger in any way relating to or arising out of this Agreement,
any Loan Document, or any action taken or omitted by any Agent or the Lead
Arranger under this Agreement or any Loan Document, provided that no Bank shall
be liable for any portion of any of the foregoing resulting from any Agent's or
the Lead Arranger's gross negligence or willful misconduct. Without limitation
of the foregoing, each Bank agrees to reimburse the Administrative Agent (to the
extent not reimbursed by the Company) promptly upon demand for its ratable share
of any out-of-pocket expenses (including counsel fees) incurred by the
Administrative Agent in connection with the preparation, administration, or
enforcement of, or legal advice in respect of rights or responsibilities under,
this Agreement. Provided however, the Banks will not be required to reimburse
the Administrative Agent for: (1) the initial costs associated with the loan
closing, including preparation of documentation; and (2) routine administrative
duties.
SECTION 9.06. Successor Agents. The Administrative Agent may resign at any
time by giving at least 60 days' prior written notice thereof to the Banks and
the Company and may be removed at any time with cause by the Requisite Banks.
The Agents (other than the Administrative Agent) may resign at any time by
giving notice thereof to the Banks and the Company and may be removed at any
time with cause by the Requisite Banks. Upon any such resignation or removal of
the Administrative Agent, the Requisite Banks shall have the right, with the
approval of the Company, which approval will not be unreasonably withheld, to
appoint a successor Administrative Agent which shall be a commercial bank or
member of the Farm Credit System organized under the laws of the United States
or any state thereof and have equity capital of at least $500,000,000. If no
successor Administrative Agent shall have been so appointed by the Requisite
Banks, and shall have accepted such appointment, within 30 days after the
Administrative Agent shall have given notice of resignation or the Requisite
Banks' removal of the retiring Administrative Agent, then the retiring
Administrative Agent may, on behalf of the Banks, appoint a successor
Administrative Agent, which must be located within the United States. Upon the
48
acceptance of any appointment as the Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations under this Agreement.
After the resignation or removal of any Agent hereunder, the provisions of this
Article IX shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was an Agent under this Agreement.
SECTION 9.07. Sharing of Payments, Etc. If any Bank shall obtain any
payment in respect of the obligations of the Company under this Agreement and
the other Loan Documents (whether voluntary, involuntary, through the exercise
of any right of setoff, or otherwise) in excess of its ratable share of payments
obtained by all the Banks, such Bank shall purchase from the other Banks such
participations in the Loans as shall be necessary to cause such purchasing Bank
to share the excess payment ratably with each of the other Banks; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from such purchasing Bank, such purchase of Loans from each Bank
shall, to the extent necessary to ratably share the amount recovered, be
rescinded and each Bank shall repay to the purchasing Bank the purchase price of
any interest or other amount paid or payable by the purchasing Bank in respect
of the total amount so recovered. The Company agrees that any Bank so purchasing
a participation from another Bank pursuant to this Section 9.07 may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of setoff) with respect to such participation as fully as if such Bank
were the direct creditor of the Company in the amount of such participation.
SECTION 9.08. Liability of Agents. None of the Agents or the Lead Arranger
shall have any liabilities or responsibilities to the Company or any of its
Affiliates on account of the failure of any Bank to perform its obligations
hereunder or to any Bank on account of the failure of the Company or any of its
Affiliates to perform their respective obligations hereunder or any other Loan
Document.
SECTION 9.09. Notices to Agent. On or prior to 4:00 p.m. Eastern time on
each Business Day, each Bank will notify the Administrative Agent of each Loan
made by such Bank on such day and all payments or prepayments of Loans received
by such Bank on such day.
SECTION 9.10. Defaults. None of the Agents shall be deemed to have
knowledge of the occurrence of a Potential Default or Event of Default (except
with respect to a default in payment of principal, interest, and fees required
to be paid to an Agent in its individual capacity as a Bank or for the account
of the Banks) unless an Agent has received notice from a Bank or the Company
specifying such Potential Default or Event of Default and stating that such
notice is a "Notice of Default." In the event that an Agent receives such a
Notice of Default, such Agent shall give prompt notice thereof to the Banks. The
Administrative Agent shall take such action with respect to such Potential
Default or Event of Default which is continuing as shall be directed by the
Requisite Banks; provided that, unless and until the Administrative Agent shall
49
have received such directions, the Administrative Agent may take such action, or
refrain from taking such action, with respect to such Potential Default or Event
of Default as it shall deem advisable and in the best interest of the Banks; and
provided further that the Administrative Agent shall not be required to take any
such action which it determines to be contrary to Law.
SECTION 9.11. Monthly Reports. Within fifteen (15) days of the end of each
month the Administrative Agent will send to the Company and each Bank a report
for the prior month indicating as of the end of such month all Loans provided by
the Banks.
SECTION 9.12. Withholding Taxes. Each Bank represents that it is entitled
to receive any payments to be made to it hereunder without the withholding of
any tax and will furnish to the Administrative Agent and to the Company such
forms, certifications, statements, and other documents as the Administrative
Agent or the Company may request from time to time to evidence such Bank's
exemption from the withholding of any tax imposed by any jurisdiction or to
enable the Administrative Agent or the Company, as the case may be, to comply
with any applicable Laws relating thereto. Without limiting the effect of the
foregoing, if any Bank is not created or organized under the Laws of the United
States of America or any state thereof, such Bank will furnish to the
Administrative Agent and the Company Form 4224 or Form 1001 of the Internal
Revenue Service, or such other forms, certifications, statements, or documents,
duly executed and completed by such Bank as evidence of such Bank's exemption
from the withholding of United States tax with respect thereto.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Amendments, Etc. No amendment, modification, termination,
or waiver of any provision of this Agreement or of any other Loan Document nor
consent to any departure by the Company herefrom or therefrom shall in any event
be effective unless the same shall be in writing and signed by the
Administrative Agent and the Requisite Banks (provided that the required consent
or approval of the Administrative Agent may not be unreasonably withheld), and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no amendment,
waiver or consent shall, unless in writing and signed by all the Banks, do any
of the following: (1) waive any of the conditions precedent specified in Section
3.01 hereof; (2) increase the Commitment of any Bank; (3) reduce the principal
of, or interest on, the Notes, or the facility fees or any other amount due
hereunder or under any Loan Document; (4) postpone any date fixed for any
payment of principal of, or interest on, the Notes, or the facility fees or any
other amount due hereunder or under any Loan Document; (5) change the percentage
of the Commitments or of the aggregate unpaid principal amount of the Notes or
the number of Banks which shall be required for the Banks or any of them to act
hereunder; or (6) amend, modify or waive any provision of this Section 10.01.
50
SECTION 10.02. Notices, Etc. All notices and other communications provided
for under this Agreement and under the other Loan Documents shall be in writing
(including facsimile transmissions) and mailed, transmitted or delivered to the
parties at the addresses shown next to each party's signature hereto or, as to
each party, at such other address as shall be designated by such party in a
written notice to all other parties complying as to delivery with the terms of
this Section 10.02. Except as is otherwise provided in this Agreement, all such
notices and communications shall be effective when deposited in the mail or,
with respect to any facsimile transmission, when sent with confirmation of
transmission received by the sending party, addressed as aforesaid, except that
notices to the Administrative Agent shall not be effective until received.
SECTION 10.03. No Waiver. No failure or delay on the part of any Bank or
the Administrative Agent in exercising any right, power, or remedy hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right, power, or remedy preclude any other or further exercise thereof
or the exercise of any other right, power, or remedy hereunder. The rights and
remedies provided herein are cumulative, and are not exclusive of any other
rights, powers, privileges, or remedies, now or hereafter existing, at law or in
equity or otherwise.
SECTION 10.04. Assignment; Participation. This Agreement shall be binding
upon, and shall inure to the benefit of, the Company, the Administrative Agent,
the Banks and their respective successors and permitted assigns. The Company may
not assign or transfer its rights or obligations hereunder. Any Bank may at any
time grant to one or more banks or other Persons (each a "Participant")
participating interests in its portion of the Loans. In no event shall a
Participant constitute a Bank for purposes hereof, except that any Participant
that is chartered under the Farm Credit Act of 1971, as amended, shall be deemed
to be a Bank hereunder solely for purposes of voting rights. In the event of any
such grant by a Bank of a participating interest to a Participant, whether or
not upon notice to the Company and the Administrative Agent, such Bank shall
remain responsible for the performance of its obligations hereunder, and the
Company and the Administrative Agent shall continue to deal solely and directly
with such Bank in connection with such Bank's rights and obligations hereunder.
Any agreement pursuant to which any Bank may grant such a participating interest
shall provide that such Bank shall retain the sole right and responsibility to
enforce the obligations of the Company hereunder and under any other Loan
Document including, without limitation, the right to approve any amendment,
modification, or waiver of any provision of this Agreement or any other Loan
Document; provided that such participation agreement may provide that such Bank
will not agree to any modification, amendment, or waiver of this Agreement
described in the proviso in Section 10.01 without the consent of the
Participant. All Loans that are made by CoBank and that are retained for its own
51
account and are not included in any grants of participation interests shall be
entitled to patronage distributions in accordance with the bylaws of CoBank and
its practices and procedures related to patronage distributions. Accordingly,
all Loans that are included in a grant of participation interest of CoBank shall
not be entitled to patronage distributions.
Any Bank may at any time assign to one or more banks or other Persons
(each an "Assignee") a proportionate part of all of its rights and obligations
under this Agreement and its Note, and such Assignee shall assume such rights
and obligations, pursuant to an Assignment and Assumption Agreement executed by
such Assignee and the Bank, in substantially the form of Exhibit H, with and
subject to the consent of the Administrative Agent and the Company (which
consent of the Company and the Administrative Agent will not be unreasonably
withheld or delayed) provided, that: (1) during the occurrence and continuance
of any Potential Default or Event of Default neither the consent of the
Administrative Agent nor the consent of the Company shall be required for such
assignment; (2) if the Assignee of any Bank is an affiliate of such Bank,
neither the consent of the Administrative Agent nor the consent of the Company
shall be required for such assignment; (3) the minimum amount that may be
assigned shall be $10,000,000, except in the case of any assignment of a Bank's
entire Commitment or in the case of any assignment from one Bank to another
Bank; (4) the assigning Bank or Assignee shall pay the Administrative Agent a
processing and recordation fee of Three Thousand Five Hundred Dollars ($3,500),
except in the case of any assignment from one Bank to another Bank; and (5) no
assignment shall be made hereunder unless in conjunction therewith the assigning
Bank shall have assigned a proportionate part (based upon the percentage of the
assigning Bank's aggregate Commitment being assigned hereunder) of all of its
rights and obligations as lender under the Statesman Credit Facility. Upon
execution and delivery of such instrument and payment by such Assignee to the
assigning Bank of an amount equal to the purchase price agreed between the Bank
and such Assignee, such Assignee shall be a Bank under this Agreement and shall
have all the rights and obligations of a Bank with the Commitments as set forth
in such Assignment and Assumption Agreement, and the assigning Bank shall be
released from its obligations hereunder to a corresponding extent, and no
further consent or action by any party shall be required. Upon the consummation
of any assignment pursuant to this paragraph, a new Note or Notes shall be
issued by the Company. If the Assignee is not incorporated under the laws of the
United States of America or a state thereof, it shall, prior to the first date
on which interest or fees are payable hereunder for its account, deliver to the
Company and the Administrative Agent certification as to exemption from
deduction or withholding of any United States federal income taxes in accordance
with Section 9.12.
Any Bank may at any time assign all or any portion of its rights under
this Agreement and its Note to a Federal Reserve Bank. No such assignment shall
release the transferor Bank from its obligations hereunder.
The Company agrees to provide all assistance reasonably requested by a
Bank to enable such Bank either to sell participations in or make assignments of
its portion of the Loans as permitted by this Section 10.04. The Banks will not
disclose any confidential information about the Company to any potential
assignee or participant without the consent of the Administrative Agent and the
Company, which consent will not be unreasonably withheld by the Company.
52
SECTION 10.05. Costs, Expenses and Taxes. The Company agrees to pay on
demand all costs and expenses incurred by the Agents and the Lead Arranger in
connection with the preparation, execution, delivery and filing of the Loan
Documents, and of any amendment, modification, or supplement to the Loan
Documents, Agents' and Lead Arranger's due diligence review of the Company, and
the syndication of this Credit Facility, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel (including, without
duplication, the allocated cost of any internal legal counsel used by such
Persons in lieu of outside counsel) for each Agent and the Lead Arranger
incurred in connection with advising the Agents, the Lead Arranger or any of the
Banks as to their rights and responsibilities hereunder or under any Loan
Document. The Company also agrees to pay all such costs and expenses, including
court costs and all reasonable fees and expenses of counsel (including, without
duplication, the allocated cost of internal legal counsel used by such Persons
in lieu of outside counsel), incurred by the Administrative Agent and the Banks
in connection with enforcement of the Loan Documents, or any amendment,
modification, or supplement thereto, whether by negotiation, legal proceedings,
or otherwise, and to pay after an Event of Default all reasonable fees and
expenses of counsel (including, without duplication, the allocated cost of
internal legal counsel used by such Persons in lieu of outside counsel) retained
by the Administrative Agent and each Bank incurred in connection with the
enforcement and collection of the Loan Documents. In addition, the Company shall
pay any and all stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing, and recording of any
of the Loan Documents and the other documents to be delivered under any such
Loan Documents, and agrees to hold each Agent, the Lead Arranger and each of the
Banks harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or failing to pay such taxes and fees. The
provisions of this Section 10.05, Section 2.10, Section 2.12 and Section 2.16
shall survive the termination of this Agreement.
SECTION 10.06. Integration. This Agreement and the Loan Documents contain
the entire agreement between the parties relating to the subject matter hereof
and supersede all oral statements and prior writings with respect thereto.
SECTION 10.07. Indemnity. In addition to the payment of expenses pursuant
to Section 10.05 hereof, the Company hereby agrees to defend, indemnify and hold
each Agent, the Lead Arranger, each Bank and each of the respective officers,
directors, employees, agents and affiliates of each of them harmless from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever (including, without duplication, attorney fees and the
allocated cost of internal legal counsel used by such Persons in lieu of outside
counsel) arising directly or indirectly from (a) the activities of the Company,
its predecessors in interest, (b) the exercise by the Agents, the Lead Arranger
53
or the Banks of any right or remedy granted to them under this Agreement or any
of the other Loan Documents, (c) any claim, and the prosecution or defense
thereof, arising out of or in any way relating to or arising out of this
Agreement, any Loan Document, the Banks' agreement to make Loans or the use or
intended use of the proceeds of any of the Loans hereunder, (d) the collection
or enforcement of the obligations of the Company hereunder or under any other
Loan Document, or (e) arising directly or indirectly from the violation of any
environmental protection, health or safety Law, whether such claims are asserted
by any governmental agency or any other person. This indemnity shall survive
termination of this Agreement; provided, that the Company shall have no
obligation to indemnify any Person for losses, claims, damages, liabilities or
other expenses resulting from the gross negligence or willful misconduct of such
Person.
SECTION 10.08. Governing Law. Except to the extent governed by applicable
Federal Law, this Agreement and the Notes shall be governed by, and construed in
accordance with, the Laws of the Commonwealth of Virginia.
SECTION 10.09. Consent to Jurisdiction. THE COMPANY HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF ANY COMMONWEALTH OF VIRGINIA OR UNITED STATES
FEDERAL COURT SITTING IN THE COMMONWEALTH OF VIRGINIA OVER ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES, OR ANY OTHER
LOAN DOCUMENT, AND THE COMPANY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH
COMMONWEALTH OF VIRGINIA OR FEDERAL COURT. THE COMPANY IRREVOCABLY CONSENTS TO
THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES OF SUCH PROCESS TO THE COMPANY AT ITS ADDRESSES SPECIFIED IN
SECTION 10.02. THE COMPANY AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. THE COMPANY FURTHER
WAIVES ANY OBJECTION TO AN ACTION OR PROCEEDING IN SUCH STATE ON THE BASIS OF
FORUM NON CONVENIENS. NOTHING IN THIS SECTION 10.09 SHALL AFFECT THE RIGHT OF
ANY BANK TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT
THE RIGHT OF ANY BANK TO BRING ANY ACTION OR PROCEEDING AGAINST THE COMPANY OR
ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.
SECTION 10.10. Severability of Provisions. Any provision of any Loan
Document which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
54
unenforceability without invalidating the remaining provisions of such Loan
Document or affecting the validity or enforceability of such provision in any
other jurisdiction.
SECTION 10.11. Usury. Anything herein to the contrary notwithstanding, the
obligations of the Company under this Agreement and the Notes to each Bank shall
be subject to the limitation that payments of interest shall not be required to
that Bank to the extent that receipt thereof would be contrary to provisions of
Law applicable to that Bank limiting rates of interest which may be charged or
collected by such Bank.
SECTION 10.12. Counterparts. This Agreement may be executed in any number
of counterparts and by different parties to this Agreement in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same Agreement.
SECTION 10.13. Headings. Article and Section headings in the Loan
Documents are included in such Loan Documents for the convenience of reference
only and shall not constitute a part of the applicable Loan Documents for any
other purpose.
SECTION 10.14. Jury Trial Waiver. THE COMPANY AND EACH BANK HEREBY WAIVE
TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM, WHETHER IN
CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATED TO
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS. NO OFFICER OF ANY BANK OR OF THE
AGENTS HAS AUTHORITY TO WAIVE, CONDITION, OR MODIFY THIS PROVISION.
SECTION 10.15. Consents; Terminations, etc. Each Bank that is a party to
this Agreement hereby consents to the extent required under any agreement
between the Bank and the Company, to the Company entering into this Agreement
and obtaining the credit provided under this Agreement. The Company and each
Bank that is a party to any agreement (as amended or supplemented) listed in
Schedule 3.01(M) hereby agrees that all such agreements (other than any such
agreements evidencing the Continuing Credit Facilities and the Continuing Bid
Rate Loans (defined below)), will terminate upon the payment of the proceeds of
the initial Loan(s) funded on the Closing Date in accordance with the Pay
Proceeds Letter. Notwithstanding the foregoing, certain existing loans made by
CoBank to the Company and identified on Schedule 3.01(M) hereto (the "Continuing
Bid Rate Loans") shall remain outstanding and be deemed to be Bid Rate Loans
under this Agreement for all purposes, and shall be subject to all of the terms
and conditions of this Agreement and the other Loan Documents applicable to Bid
Rate Loans, except that each such Continuing Bid Rate Loan shall be deemed to be
55
made solely by CoBank, shall bear interest at the interest rate applicable to
such loan immediately prior to the effectiveness of this Agreement until the end
of its stated interest period, and shall be due and payable on the date
specified as the maturity date for such loan.
[Remainder of page intentionally blank; next page is signature page]
56
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first written.
THE COMPANY:
SOUTHERN STATES COOPERATIVE, INCORPORATED
0000 Xxxx Xxxxx Xx.
By: /s/ Xxxxxxxx X. Xxxxxxx Xxxxxxxx, XX 00000
-------------------------- Fax: 000.000.0000
Title: Sr. Vice President & Treasurer X.X. Xxx 00000
------------------------------ Xxxxxxxx, XX 00000
E-mail Address: Xxx.Xxxxxxx@xxxxxx.xxx
(Signature Page 1 for Southern States Cooperative Revolving Credit Agreement)
THE AGENTS, LEAD ARRANGER AND BANKS:
COBANK, ACB, as Administrative Agent,
Documentation Agent and Bank 0000 X. Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Fax: 000-000-0000
By: /s/ Xxxx X'Xxxxxxxx P.O. Box 5110
-------------------------------- Xxxxxx, XX 00000
Title: Vice President Attention: Xxxx X'Xxxxxxxx
-----------------------------
(Signature Page 2 for Southern States Cooperative Revolving Credit Agreement)
FIRST UNION NATIONAL BANK,
as Syndication Agent and Bank 0 Xxxxx 0xx Xxxxxx
Xxxxx Xxxxx, Mail Code XX-0000
Xxxxxxxx, XX 00000
By: /s/ Xxxxxx McCuchard Fax: (000) 000-0000
--------------------------------
Title: Vice President
-----------------------------
(Signature Page 3 for Southern States Cooperative Revolving Credit Agreement)
NATIONSBANK, N.A., as Syndication Agent
and Bank 000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, XX 00000
By: /s/ Xxxxxxx X. Xxxxxx Fax: 000-000-0000
----------------------------------
Xxxxxxx X. Xxxxxxx
Title: Vice President
-------------------------------
(Signature Page 4 for Southern States Cooperative Revolving Credit Agreement)
NATIONSBANC XXXXXXXXXX 000 Xxxxx XxXxxxx Xxxxxx
SECURITIES LLC, as Lead Arranger Xxxxxxx, XX 00000
Fax: 000-000-0000
By: /s/
-------------------------------------
Title: Vice President
----------------------------------
(Signature Page 5 for Southern States Cooperative Revolving Credit Agreement)
FMB BANK, 00 Xxxxx Xxxxxxx Xxxxxx
as Bank Mail Code 101-744
Xxxxxxxxx, XX 00000
Fax: 000-000-0000
By: /s/ Xxxxx Xxxxxxx Xxxxxxxxxxx
-----------------------------------
Xxxxx Xxxxxxx Xxxxxxxxxxx
Title: Vice President
--------------------------------
(Signature Page 6 for Southern States Cooperative Revolving Credit Agreement)
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH, as Bank
Funding and payment notices to:
By: /s/
--------------------------------- C/O Rabo Support Services, Inc.
Title: X.X. 00 Xxxxxxxx Xxxxx, 16th Floor
----------------------------- Xxxxxx Xxxx, XX 00000
By: /s/ Attention: Corporate Services
--------------------------------- Fax: 000.000.0000
Title:
------------------------------
All other notices:
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: 000.000.0000
(Signature Page 7 for Southern States Cooperative Revolving Credit Agreement)
BANQUE NATIONALE de PARIS 000 Xxxxx XxXxxxx Xxxxxx
(XXXXXXX BRANCH), as Bank Xxxxxxx, XX 00000
Fax: 000-000-0000
By: /s/ Xxxxxx Xxxxxx du Bocage
----------------------------------
Xxxxxx Xxxxxx du Xxxxxx
Title: Executive Vice President & General Manager
-------------------------------------------
(Signature Page 8 for Southern States Cooperative Revolving Credit Agreement)
CRESTAR BANK, 000 Xxxx Xxxx Xxxxxx, 00xx Floor
as Co-Agent and Bank Xxxxxxxx, XX 00000
Fax: 000-000-0000
By: /s/
------------------------------------
Title: S.V.P.
---------------------------------
(Signature Page 9 for Southern States Cooperative Revolving Credit Agreement)
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK
AG CAYMAN ISLANDS BRANCH, as Bank
000 Xxxxxxxxx Xxxxxx, X.X. Xxxxx 0000
By: /s/ Xxxx X. Xxxxxx Xxxxxxx, XX 00000
------------------------------- Fax: 000-000-0000
Xxxx X. Xxxxxx
Title: Vice President
----------------------------
By: /s/ Xxxxx Xxxx Xxxxxx, Jr.
-------------------------------
Xxxxx Xxxx Xxxxxx, Jr.
Title: Vice President
----------------------------
(Signature Page 10 for Southern States Cooperative Revolving Credit Agreement)
WACHOVIA BANK, N.A., 0000 Xxxx Xxxx Xxxxxx, 0xx Xxxxx
as Co-Agent and Bank Xxxxxxxx, XX 00000
Fax: 000-000-0000
Attention: Xxxxx Xxxxx
By: /s/ Xxxxxxxxxxx X. Xxxxx
----------------------------------
Xxxxxxxxxxx X. Xxxxx
Title: Senior Vice President
--------------------------------
Exhibit A
REVOLVING CREDIT BORROWING NOTICE
To: [Insert names of Banks and contact persons]
From: Southern States Cooperative, Incorporated (the "Company")
Date: _____________________________
Pursuant to Section 2.02 of the Revolving Credit Agreement dated as of January
___, 1999, the Company hereby gives notice of its intent to (1) borrow in
accordance with the terms set forth in A through C below; or (2) convert or
continue an existing Loan, as set forth in D below. Capitalized terms used
herein but not otherwise specifically defined shall have the meanings ascribed
to such terms in the Revolving Credit Agreement.
A. Base Rate Loan
Amount of Loan Date of Loan
-------------- ------------
$---------------------- ---------------------
B. LIBOR Loan(s)
Amount of Loan(s) Date of Loan(s) * Interest Period(s)**
----------------- ----------------- --------------------
$--------------------- -------------------- ------------------
$--------------------- -------------------- ------------------
* At least three Business Day's prior notice must be given.
** One month, two months, three months or six months
C. Bid Rate Loan
------------------------------------------------------------------------
Bid Rate Maturity
Amount of Loan(s) Date of Loan(s) Date(s)
----------------- --------------- ------------------
$------------------- ------------------- ---------------------
$------------------- ------------------- ---------------------
$------------------- ------------------- ---------------------
$------------------- ------------------- ---------------------
$------------------- ------------------- ---------------------
D. Conversions and Continuations
Convert Base Rate Loan(s) Effective Interest
to LIBOR Loan(s) Continue LIBOR Loan(s) Date(s)* Period(s)**
------------------------- ---------------------- --------- -----------
$--------------------- --------------------- --------- ---------
$---------------------- --------------------- --------- ---------
* At least three Business Day's prior notice must be given.
** One month, two months, three months or six months
The submission of this Notice is and shall be deemed a certification by the
Company that:
(a) The obligations of the Company as set forth in the Revolving
Credit Agreement and the other Loan Documents are valid, binding and enforceable
obligations of the Company as of the date hereof, both before and after giving
effect to the Loan requested herein, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar state
or federal debtor relief laws from time to time in effect which affect the
enforcement of creditors' rights in general and the availability of equitable
remedies;
(b) All of the conditions applicable to the Loan requested herein as
set forth in the Revolving Credit Agreement have been satisfied as of the date
hereof and will remain satisfied to the date of such Loan;
(c) All of the representations and warranties contained in Article
IV of the Revolving Credit Agreement and the other Loan Documents are correct;
and
(d) No Potential Default or Event of Default has occurred and is
continuing or would result from such Loan.
IN WITNESS WHEREOF, the undersigned has executed this Notice as of the
date first written.
SOUTHERN STATES COOPERATIVE, INCORPORATED
By: ______________________________________________
Name: ______________________________________________
Title: ______________________________________________
Exhibit B
BID RATE LOAN QUOTE
To: Southern States Cooperative, Incorporated (the "Company")
From: [Name of Bank]
Date: ________________________
In response to the Revolving Credit Borrowing Notice of the Company dated the
date hereof, and pursuant to Section 2.02 of the Revolving Credit Agreement,
dated as of January ___, 1999, we hereby make the following Bid Rate Loan
quote(s) on the following terms:
Bid Rate
Amount of Loan(s) Maturity Date(s) Bid Rate(s)*
----------------- ---------------- -----------
$------------------- --------------------- ------------------
$------------------- --------------------- ------------------
$------------------- --------------------- ------------------
$------------------- --------------------- ------------------
$------------------- --------------------- ------------------
* Specify rate of interest per annum (to the nearest 1/1000 of 1%).
This bid expires at 12:30 p.m. (Eastern time) if not accepted in whole or in
part by the Company on or before such time.
[NAME OF BANK]
By: ________________________________________
Name: ________________________________________
Title ________________________________________
1
Exhibit C
BID RATE LOAN NOTICE OF BORROWING
To: [Name of Bank]
Attention:
From: Southern States Cooperative, Incorporated (the "Company")
Date: ________________________
Pursuant to Section 2.02 of the Revolving Credit Agreement dated as of January
___, 1999, the Company hereby accepts your offer, set forth in your Bid Rate
Loan Quote dated the date hereof, in the following principal amount(s) for the
following period(s) and at the following Rate(s):
Bid Rate Bid Rate(s)
Amount of Loan(s) Maturity Date(s) Quoted
----------------- ---------------- ------
$------------------- --------------------- ------------------
$------------------- --------------------- ------------------
$------------------- --------------------- ------------------
$------------------- --------------------- ------------------
$------------------- --------------------- ------------------
SOUTHERN STATES COOPERATIVE, INCORPORATED
By: ________________________________________
Name: ________________________________________
Title ________________________________________
2
Exhibit D
(Bid Rate Notices + Intentions Regarding Bids over Commitment)
[Bank Letterhead]
[Date]
Southern States Cooperative, Incorporated
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
[Notice of intention not to bid over Commitment]
Gentlemen:
Please accept this letter as notice provided under Section 2.02 of the Revolving
Credit Agreement dated January ___, 1999. [Bank] does not intend to make Bid
Rate Loans in excess of its Commitment and, accordingly, Southern States is not
required to give [Bank] notice of such Bid Rate Loans.
This notice is effective three (3) days after receipt and will remain in effect
until it is rescinded.
[Signature]
******************************************************************************
[Date]
Southern States Cooperative, Incorporated
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
[Rescission of notice]
Gentlemen:
Please accept this letter as a rescission of [Bank's] previous notice provided
under Section 2.02 of the Revolving Credit Agreement dated January ___, 1999.
[Bank] now intends to make Bid Rate Loans in excess of its Commitment and,
accordingly, Southern States is required to give [Bank] notice of such Bid Rate
Loans.
This rescission is effective three (3) days after receipt.
[Signature]
Exhibit E
Bank Notice Profile
(Information for contacting Banks relating to borrowing notices.)
Bank Name: CoBank, ACB
Address: 0000 X. Xxxxxx Xx., Xxxxxxxxx, XX 00000
X.X. Xxx 0000, Xxxxxx, XX 00000
Attention: Xxxx X'Xxxxxxxx
Telephone Number: 000-000-0000
Fax: 000-000-0000
Backup for contact Person:
Special Instructions:
Bank Name: First Union National Bank
Address: 0 Xxxxx 0xx Xxxxxx
0xx Xxxxx, Mail Code XX-0000
Xxxxxxxx, XX 00000
Telephone Number:
Fax: 000-000-0000
Contact Person:
Backup for contact Person:
Special Instructions:
Bank Name: NationsBank, N.A.
Address: 000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, XX 00000
Telephone Number: 000-000-0000
Fax: 000-000-0000
Contact Person: Xxxxxxxxx Xxxxx
Backup for contact Person:
Special Instructions:
Bank Name: FMB Bank
Address: 00 Xxxxx Xxxxxxx Xxxxxx
Mail Code 101-744
Xxxxxxxxx, XX 00000
Telephone Number:
Fax: 000-000-0000
Contact Person:
Backup for contact Person:
Special Instructions:
Bank Name: Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank
Nederland",
New York Branch
Address: c/o Rabo Support Services, Inc.
00 Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxx Xxxx, XX 00000
Attention: Corporate Services
Telephone Number:
Fax: 000-000-0000
Backup for contact Person:
Special Instructions: For funding and payment notices forward correspondences
to the address above. For all other notices: 000 Xxxx Xxxxxx, Xxx Xxxx, XX
00000, Fax: 000-000-0000.
Bank Name: Banque Nationale de Paris (Chicago Branch)
Address: 000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Telephone Number:
Fax: 000-000-0000
Contact Person:
Backup for contact Person:
Special Instructions:
Bank Name: Crestar Bank
Address: 000 Xxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, XX 00000
Telephone Number:
Fax: 000-000-0000
Contact Person:
Backup for contact Person:
Special Instructions:
Bank Name: DG Bank Deutsche Genossenschaftsbank, AG Cayman Islands Branch
Address: 000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxx, XX 00000
Telephone Number:
Fax: 000-000-0000
Contact Person:
Backup for contact Person:
Special Instructions:
Bank Name: Wachovia Bank, N.A.
Address: 000 Xxxxx Xxxx Xxxxxx
00xx Xxxxx
Xxxxxxx-Xxxxx, XX 00000
Attention: Xxxxxxx Xxx
Telephone Number: 000-000-0000
Fax: 000-000-0000
E-mail address: Xxxxxxx.Xxx@Xxxxxxxx.xxx
Backup for contact Person: Xxxxx Xxxxx
0000 Xxxx Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, XX 00000
E-mail address: Xxxxx.Xxxxx@Xxxxxxxx.xxx
Telephone Number: 000-000-0000
Fax: 000-000-0000
Special Instructions:
Exhibit F-1
REVOLVING CREDIT NOTE
$____________________________ Richmond, Virginia
January ___, 1999
FOR VALUE RECEIVED, Southern States Cooperative, Incorporated, a
Virginia agricultural cooperative corporation (the "Borrower"), HEREBY PROMISES
TO PAY to the order of ____________________ ____________________ ("Bank") at its
office, located at ____________________________________, for the account of its
appropriate Applicable Lending Office, the principal sum of __________________
Dollars ($_______________), or the aggregate unpaid principal amount of all
advances under all Loans (as defined in the Revolving Credit Agreement referred
to below) other than Bid Rate Loans made by Bank to the Borrower pursuant to
Sections 2.01 and 2.02 of the Revolving Credit Agreement (including amounts in
excess of the amount shown above), in lawful money of the United States of
America and in immediately available funds, on the Termination Date. The
Borrower also promises to pay interest on the unpaid principal balance of the
Loans for the period such balance is outstanding, at said office for the account
of said Applicable Lending Office, in like money, at the rates of interest
provided in the Revolving Credit Agreement, at the times and calculated in the
manner set forth in Section 2.03(B) of the Revolving Credit Agreement. Any
amount of principal hereof which is not paid when due, whether at stated
maturity, by acceleration, or otherwise, shall bear interest from the date when
due until said principal amount is paid in full, payable on demand, at a rate
per annum equal at all times to the rate set forth in Section 2.03(C) of the
Revolving Credit Agreement.
The Borrower hereby authorizes the Bank to endorse on the schedule
annexed to this Note: (i) the amount and type of all Loans; (ii) in the case of
LIBOR Loans, the applicable Interest Periods; and (iii) all continuations,
conversions and payments of principal amounts in respect of such Loans, provided
however, that the failure to make such notation with respect to any Loan or
payment shall not limit or otherwise affect the obligation of the Borrower under
the Revolving Credit Agreement or this Note. The records of the Bank reflecting
such endorsements shall, in the absence of manifest error, be conclusive as to
the outstanding principal amount of all Loans owed to the Bank.
This is one of the Notes referred to in that certain Revolving
Credit Agreement (as amended, restated or supplemented from time to time, the
"Revolving Credit Agreement") dated as of January ___, 1999, among the Borrower,
CoBank, ACB, as Bank and in its capacity as Administrative Agent and
Documentation Agent, First Union National Bank, as Bank and in its capacity as
Syndication Agent, NationsBank, N.A., as Bank and in its capacity as Syndication
Agent, NationsBanc Xxxxxxxxxx Securities LLC, in its capacity as Lead Arranger,
and the financial institutions as are, or may from time to time become, parties
thereto as "Banks" (the "Banks"), to evidence the Loans (other than Bid Rate
Loans) made by the Bank thereunder.
All Capitalized terms used herein and not defined herein shall have
the meanings given to them in the Revolving Credit Agreement.
The Revolving Credit Agreement provides for the acceleration of the
maturity of principal upon the occurrence of an Event of Default and for
prepayments on the terms and conditions specified therein.
The Borrower hereby waives presentment, notice of dishonor, protest
and any other notice with respect to this Note.
Subject to the terms and qualifications of the Revolving Credit
Agreement, the Borrower hereby agrees to pay on demand all reasonable costs and
expenses actually incurred in collecting the Borrower's obligations hereunder or
in enforcing or attempting to enforce any of the Bank's rights hereunder in each
case after the occurrence and during the continuance of an Event of Default,
including, but not limited to, reasonable attorneys' fees and expenses if
collected by or through an attorney, whether or not suit is filed.
This Note shall be governed by, and interpreted and construed in
accordance with, the laws of the Commonwealth of Virginia, provided, that, as to
the maximum rate of interest which may be charged or collected if the Laws
applicable to the Bank permit it to charge or collect a higher rate than the
Laws of the Commonwealth of Virginia, then such Laws applicable to the Bank
shall apply to the Bank under this Note.
IN WITNESS WHEREOF, the undersigned has caused this Note to be
executed by its officer thereunto duly authorized, as of the date first written.
SOUTHERN STATES COOPERATIVE, INCORPORATED
By: __________________________________________
Name: ________________________________________
Title: _______________________________________
2
SCHEDULE TO REVOLVING CREDIT NOTE
REVOLVING CREDIT LOANS (BASE Rate Loans and/or LIBOR Loans)
Date
Revolving
Credit
Loan Unpaid
Made, Type of Amount of Principal Name of
Continued Revolving Revolving Applicable Amount of Balance of Person
Converted Credit Credit Interest Principal Revolving Making
or Paid Loan Loan Period Prepaid Credit Note Notation
---------- ----------- ----------- ------------ ----------- ----------- ---------
---------- ----------- ----------- ------------ ----------- ----------- ---------
---------- ----------- ----------- ------------ ----------- ----------- ---------
---------- ----------- ----------- ------------ ----------- ----------- ---------
---------- ----------- ----------- ------------ ----------- ----------- ---------
---------- ----------- ----------- ------------ ----------- ----------- ---------
---------- ----------- ----------- ------------ ----------- ----------- ---------
---------- ----------- ----------- ------------ ----------- ----------- ---------
---------- ----------- ----------- ------------ ----------- ----------- ---------
Exhibit F-2
REVOLVING CREDIT NOTE
Richmond, Virginia
January ___, 1999
FOR VALUE RECEIVED, Southern States Cooperative, Incorporated, a Virginia
agricultural cooperative corporation (the "Borrower"), HEREBY PROMISES TO PAY to
the order of ____________________ ____________________ ("Bank") at its office,
located at ____________________________________, for the account of its
appropriate Applicable Lending Office, the principal sum equal to the aggregate
unpaid principal amount of all advances under all Bid Rate Loans (as defined in
the Revolving Credit Agreement referred to below) made by Bank to the Borrower
pursuant to Sections 2.01 and 2.02 of the Revolving Credit Agreement (including
amounts in excess of the amount shown above), in lawful money of the United
States of America and in immediately available funds on such Loan's Bid Rate
Maturity Date. The Borrower also promises to pay interest on the unpaid
principal balance of the Loans for the period such balance is outstanding, at
said office for the account of said Applicable Lending Office, in like money, at
the rates of interest provided on the schedule annexed to this Note, at the
times and calculated in the manner set forth in Section 2.03(B) of the Revolving
Credit Agreement. Any amount of principal hereof which is not paid when due,
whether at stated maturity, by acceleration, or otherwise, shall bear interest
from the date when due until said principal amount is paid in full, payable on
demand, at a rate per annum equal at all times to the rate set forth in Section
2.03(C) of the Revolving Credit Agreement.
The Borrower hereby authorizes the Bank to endorse on the schedule
annexed to this Note: (i) the applicable rates and Bid Rate Maturity Dates; and
(ii) all continuations, conversions and payments of principal amounts in respect
of such Loans, provided however, that the failure to make such notation with
respect to any Loan or payment shall not limit or otherwise affect the
obligation of the Borrower under the Revolving Credit Agreement or this Note.
The records of the Bank reflecting such endorsements shall, in the absence of
manifest error, be conclusive as to the outstanding principal amount of all
Loans owed to the Bank.
This is one of the Notes referred to in that certain Revolving
Credit Agreement (as amended, restated or supplemented from time to time, the
"Revolving Credit Agreement") dated as of January ___, 1999, among the Borrower,
CoBank, ACB, as Bank and in its capacity as Administrative Agent and
Documentation Agent, First Union National Bank, as Bank and in its capacity as
Syndication Agent, NationsBank, N.A., as Bank and in its capacity as Syndication
1
Agent, NationsBanc Xxxxxxxxxx Securities LLC, in its capacity as Lead Arranger,
and the financial institutions as are, or may from time to time become, parties
thereto as "Banks" (the "Banks"), to evidence the Bid Rate Loans made by the
Bank thereunder.
All Capitalized terms used herein and not defined herein shall have
the meanings given to them in the Revolving Credit Agreement.
The Revolving Credit Agreement provides for the acceleration of the
maturity of principal upon the occurrence of an Event of Default and for
prepayments on the terms and conditions specified therein.
The Borrower hereby waives presentment, notice of dishonor, protest
and any other notice with respect to this Note.
Subject to the terms and qualifications of the Revolving Credit Agreement,
the Borrower hereby agrees to pay on demand all reasonable costs and expenses
actually incurred in collecting the Borrower's obligations hereunder or in
enforcing or attempting to enforce any of the Bank's rights hereunder in each
case after the occurrence and during the continuance of an Event of Default,
including, but not limited to, reasonable attorneys' fees and expenses if
collected by or through an attorney, whether or not suit is filed.
This Note shall be governed by, and interpreted and construed in
accordance with, the laws of the Commonwealth of Virginia, provided, that, as to
the maximum rate of interest which may be charged or collected if the Laws
applicable to the Bank permit it to charge or collect a higher rate than the
Laws of the Commonwealth of Virginia, then such Laws applicable to the Bank
shall apply to the Bank under this Note.
IN WITNESS WHEREOF, the undersigned has caused this Note to be
executed by its officer thereunto duly authorized, as of the date first written.
SOUTHERN STATES COOPERATIVE, INCORPORATED
By: ____________________________________________
Name: __________________________________________
Title: _________________________________________
2
SCHEDULE TO REVOLVING CREDIT NOTE
BID RATE LOANS
Date
Bid Rate
Loan Amount Interest Name of
Made of Bid Rate for Bid Rate Amount of Person
Continued, Rate Bid Rate Maturity Principal Making
or Paid Loan Loan Date Repaid Notation
---------- ----------- ----------- ------------ -----------
---------- ----------- ----------- ------------ -----------
---------- ----------- ----------- ------------ -----------
---------- ----------- ----------- ------------ -----------
---------- ----------- ----------- ------------ -----------
---------- ----------- ----------- ------------ -----------
---------- ----------- ----------- ------------ -----------
---------- ----------- ----------- ------------ -----------
3
Exhibit G
FORM OF OPINION OF COMPANY COUNSEL
[Xxxx & Valentine, L.L.P. Letterhead]
January 12, 1999
TO THE PERSONS LISTED ON SCHEDULE 1
Re: $200,000,000 Revolving Credit Agreement with
Southern States Cooperative, Incorporated
Ladies and Gentlemen:
We have acted as counsel for Southern States Cooperative, Incorporated
(the "Company") in connection with the preparation, execution, and delivery of
the Revolving Credit Agreement dated as of January 12, 1999 (the "Credit
Agreement"), among the Company, CoBank, ACB, in its individual capacity, as Bank
and in its capacity as Administrative Agent and Documentation Agent, First Union
National Bank, as Bank and in its capacity as Syndication Agent, NationsBank,
N.A., as Bank and in its capacity as Syndication Agent, NationsBanc Xxxxxxxxxx
Securities LLC, in its capacity as Lead Arranger, and FMB Bank, as Bank,
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "RaboBank Nederland", New
York Branch, as Bank, Banque Nationale de Paris (Chicago Branch), as Bank,
Crestar Bank, as Bank and in its capacity as Co-Agent, DG Bank Deutsche
Genossenschaftsbank AG Cayman Islands Branch, as Bank, and Wachovia Bank, N.A.,
as Bank and in its capacity as Co-Agent. This opinion is being furnished to you
at the request of the Company pursuant to Section 3.01(E) of the Credit
Agreement. Capitalized terms used herein which are not defined herein shall have
the meanings assigned to such terms in the Credit Agreement.
For purposes of this opinion, we have examined, among other things:
(a) the Credit Agreement and the Notes, each dated the date hereof, issued
by the Company to the Banks (the "Notes");
(b) the Fourth Amended and Restated Financing Services and Contributed
Capital Agreement dated the date hereof between the Company and Statesman
Financial Corporation (together with the Credit Agreement and the Notes referred
to herein collectively as the "Financing Documents"); and
4
(c) documents furnished by the Company pursuant to Section 3.01 of the
Credit Agreement, including the Articles of Incorporation and Bylaws of the
Company and all amendments thereto.
For purposes of the opinions expressed below, we have assumed (i) the
authenticity of all documents submitted to us as originals, (ii) the conformity
to the originals of all documents submitted as certified or photostatic copies
and the authenticity of the originals; (iii) the legal capacity of natural
persons, and (iv) the due authorization, execution and delivery of all documents
by all parties (other than the Company) and the validity and binding effect
thereof on such parties.
Based upon the foregoing and subject to the qualifications hereinafter set
forth, we are of the opinion that:
1. The Company is an agricultural cooperative corporation duly
incorporated and validly existing under the laws of the Commonwealth of Virginia
and has all corporate power required to carry on its business as now conducted.
2. The execution, delivery, and performance by the Company of the
Financing Documents are within the Company's corporate power and have been duly
authorized by all necessary corporate action.
3. The Financing Documents have been duly executed and delivered on behalf
of the Company, and constitute the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their respective
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforceability of
creditors' rights generally and by general equitable principles whether
enforcement is sought by proceedings in equity or at law.
4. The execution, delivery and performance by the Company of the Financing
Documents (i) require no action by or in respect of, or filing with, any
governmental body, agency or official; (ii) do not contravene or constitute
(with or without the giving of notice or lapse of time or both) a default under
any provision of applicable law or regulation, the Articles of Incorporation or
Bylaws of the Company, or to our knowledge, any agreement, judgment, injunction,
order, decree or other instrument known to us and binding upon the Company; and
(iii) to our knowledge do not result in the creation or imposition of any Lien
on any asset of the Company (other than Liens in favor of CoBank on any equity
interest of the Company in CoBank).
5. To our knowledge, there are no actions or proceedings against the
Company pending before any court, governmental authority, regulatory body, or
arbitrator: (a) with respect to the Financing Documents; (b) which could have a
material adverse effect on the ability of the Company to conduct its business as
presently conducted; or (c) which individually seeks or could reasonably be
expected to seek in excess of $1,000,000 from the Company.
We express no opinion as to those provisions of the Financing Documents
which purport to make oral amendments and waivers ineffective, and we express no
opinion as to those provisions of the Financing Documents which would waive the
right of the Company to object to venue.
5
The opinion and statements expressed herein are subject to the following
qualifications:
The opinions and statements expressed herein are restricted to matters
governed by the laws of the United States of America and the laws of the
Commonwealth of Virginia.
We express no opinion with respect to any instrument or document other
than instruments or documents referred to above.
The opinions expressed herein are effective as of the date hereof. No
expansion of the opinions may be made by implication or otherwise. We express no
opinions other than as herein expressly set forth. We do not undertake to advise
you of any matter within the scope of this letter that comes to our attention
after the date of this letter and disclaim any responsibility to advise you of
any further changes in law or fact that may affect the opinions set forth
herein.
This letter is rendered to you in connection with the transactions
described above and may not be relied upon by any other person, or participant,
or by you in any other context or for any other purpose. It may not be referred
to in whole or in part nor may copies thereof be furnished or delivered to any
other person without our prior written consent, except that you may furnish
copies hereof: (i) to prospective and actual parties (including Participants and
Assignees) to the financing transactions contemplated by the Financing
Documents; (ii) to your respective independent auditors, attorneys, and other
advisors; (iii) to any governmental authority having jurisdiction over you; (iv)
pursuant to any order or legal process of any court of competent jurisdiction or
any governmental agency; and (v) in connection with any legal action arising out
of any of the Financing Documents or the transactions contemplated thereby.
Very truly yours,
6
SCHEDULE 1
CoBank, ACB, as Administrative Agent, Cooperatieve Centrale Raiffeisen-
Documentation Agent and Bank Boerenleenbank B.A., "RaboBank
X.X. Xxx 0000 Xxxxxxxxx"
Xxxxxx, Xxxxxxxx 00000 New York Branch
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
First Union National Bank, Banque Nationale de Paris (Chicago
as Syndication Agent and Bank Branch)
0 Xxxxx 0xx Xxxxxx, 0xx Xxxxx 000 Xxxxx XxXxxxx Xxxxxx
Mail Code VA-3260 Xxxxxxx, Xxxxxxxx 00000
Xxxxxxxx Xxxxxxxx 00000
NationsBank, N.A., as Syndication Crestar Bank
Agent and Bank 000 Xxxx Xxxx Xxxxxx, 00xx Floor
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx Xxxxxxxx, Xxxxxxxx 00000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
NationsBanc Xxxxxxxxxx Securities LLC, DG Bank Deutsche Genossenschaftsbank
as Lead Arranger AG Cayman Islands Branch
0000 Xxxxx XxXxxxx Xxxxxx 000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000 Xxxxxxx, Xxxxxxx 00000
FMB Bank Wachovia Bank, N.A.
00 Xxxxx Xxxxxxx Xxxxxx 0000 Xxxx Xxxx Xxxxxx, 0xx Xxxxx
Mail Code 101-744 Xxxxxxxx, Xxxxxxxx 00000
Xxxxxxxxx, Xxxxxxxx 00000
Exhibit H
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT dated as of _______ __, among
_______________, (the "Assignor"), _______________ (the "Assignee"), Southern
States Cooperative, Incorporated (the "Company"), and CoBank, ACB ("CoBank"), in
its capacity as Administrative Agent.
PRELIMINARY STATEMENTS
1. This Assignment and Assumption Agreement (the "Agreement") relates to
the Revolving Credit Agreement (as amended from time to time, the "Credit
Agreement") dated as of January ___, 1999, originally among the Company, CoBank,
First Union National Bank, NationsBank, N.A., _________ and each other lender
which may thereafter execute and deliver an Assignment and Assumption Agreement
pursuant to the Credit Agreement (each a "Bank" and, collectively, the "Banks"),
CoBank, as Administrative Agent and Documentation Agent, First Union National
Bank, as Syndication Agent, NationsBank, N.A., as Syndication Agent, and
NationsBanc Xxxxxxxxxx Securities LLC, as Lead Arranger. All capitalized terms
not otherwise defined herein shall have the respective meanings set forth in the
Credit Agreement.
2. Subject to the terms and conditions set forth in the Credit Agreement,
the Assignor (a) is required to make Base Rate Loans and LIBOR Loans from time
to time to the Company and (b) may in its sole discretion make Bid Rate Loans
from time to time to the Company.
3. Base Rate Loans made to the Company by the Assignor under the Credit
Agreement in the aggregate principal amount of ______________ Dollars
($_________) are outstanding at the commencement of business on the date hereof.
This Agreement shall become effective prior to any Base Rate Loans made on the
date hereof.
4. LIBOR Loans made to the Company by the Assignor under the Credit
Agreement in the aggregate principal amount of ______________ Dollars
($_________) are outstanding at the commencement of business on the date hereof.
This Agreement shall become effective prior to any LIBOR Loans made on the date
hereof.
5. Bid Rate Loans made to the Company by the Assignor under the Credit
Agreement in the aggregate principal amount of ______________ Dollars
($_________) are outstanding at the commencement of business on the date hereof.
The amount and Bid Rate Maturity Date for each of the Assignor's Bid Rate Loans
is set forth in Exhibit A attached hereto. This Agreement shall become effective
prior to any Bid Rate Loans made on the date hereof.
6. The Assignor desires to assign to the Assignee a proportionate share of
all of the rights of the Assignor under the Credit Agreement as follows:
a) a __ % interest in all outstanding Base Rate Loans (such percentage
equaling $______ at the commencement of business on the date hereof);
b) a __ % interest in all outstanding LIBOR Loans (such percentage equaling
$______ at the commencement of business on the date hereof);
c) a __ % interest in all outstanding Bid Rate Loans (such percentage
equaling $______ at the commencement of business on the date hereof); and
d) a __ % of the Assignor's Commitment ("Assigned Commitment") (such
percentage equaling $______ at the commencement of business on the date hereof).
The Assignee desires to accept assignment of such rights and assume the
corresponding obligations from the Assignor on such terms. The assigned Loans
described in clause (a) through (c) above are, collectively, referred to as the
"Assigned Loans".
NOW THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:
SECTION 1. Assignment. The Assignor hereby assigns to the Assignee all of
the rights of the Assignor under the Credit Agreement in and to the Assigned
Commitment and the Assigned Loans (together with interest accrued thereon to the
date of this Agreement), and the Assignee hereby accepts such assignment from
the Assignor and assumes all of the obligations of the Assignor under the Credit
Agreement in and to the Assigned Commitment. Upon the execution and delivery
hereof by the Assignor, the Assignee, the Company (to the extent required) and
the Administrative Agent (to the extent required) and the payment of the amount
specified in Section 2 required to be paid on the date hereof (a) the Assignee
shall, as of the commencement of business on the date hereof, succeed to the
rights and be obligated to perform the obligations of a Bank under the Credit
Agreement with a Commitment in an amount equal to the Assigned Commitment and
with Loans in a principal amount equal to the Assigned Loans, and (b) the
Commitment and the Loans of the Assignor shall, as of the commencement of
business on the date hereof, be reduced correspondingly and the Assignor
released from its obligations under the Credit Agreement to the extent such
obligations have been assumed by the Assignee. The assignment provided for
herein shall be without recourse to the Assignor, except that Assignor warrants
that it (i) is the legal and beneficial owner of the Assigned Loans, (ii) owns
the Assigned Loans free and clear of any Liens and (iii) has the right to make
the assignments contemplated by this Agreement.
SECTION 2. Payments. As consideration for the assignment and sale
contemplated in Section 1 hereof, the Assignee shall pay to the Assignor on the
date hereof in immediately available funds an amount equal to ________________
Dollars ($__________) in principal. It is understood that interest and
commitment fees and other fees payable to the Assignor under the Credit
Agreement accrued to but not including the date hereof are for the account of
the Assignor and such interest and fees accruing from and including the date
hereof are for the account of the Assignee. Each of the Assignor and the
Assignee hereby agrees that if it receives any amount under the Credit Agreement
which is for the account of the other party hereto, it shall receive the same
for the account of such other party to the extent of such other party's interest
therein and shall promptly pay the same to such other party.
SECTION 3. Consent of the Company and the Administrative Agent. This
Agreement is conditioned upon the consent of the Company and the Administrative
Agent pursuant to Section 10.04 of the Credit Agreement (unless consent is not
required pursuant to Section 10.04). The execution of this Agreement by the
Company and the Administrative Agent is evidence of such consent. Pursuant to
Section 10.04 of the Credit Agreement, the Company has agreed to execute and
deliver (1) to the Assignee a new Note or Notes payable to the order of the
Assignee to evidence the assignment and assumption provided for herein and (2)
to the Assignor, in substitution for its existing Note or Notes, a new Note or
Notes resulting from the Assignment payable to the order of the Assignor to
evidence the assignment and assumption provided for herein.
SECTION 4. Non-Reliance on Assignor. The Assignor makes no representation
or warranty in connection with, and shall have no responsibility with respect
to, the solvency, financial condition, or statements of the Company or any other
party to any Loan Document, or the validity and enforceability of the
obligations of the Company or any other party to a Loan Document in respect of
the Credit Agreement, any Note, or any other Loan Document. The Assignee
acknowledges that it has, independently and without reliance on the Assignor,
the Agents or the Lead Arranger and based on such documents and information as
it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement and will continue to be responsible for making its own
independent appraisal of the business affairs and financial condition of the
Company and the other parties to the Loan Documents.
SECTION 5. Certification of Exemption. [For Banks not organized under the
Laws of the United States.] As soon as possible, but in any event prior to the
date on which interest or fees are payable under the Credit Agreement, Assignee
agrees to provide to the Administrative Agent and the Company Form 4224 or Form
1001 of the Internal Revenue Service, or such other forms, certifications,
statements or documents, duly executed and completed by the Assignee, as
evidence of Assignee's exemption from the withholding of United States tax with
respect thereto.
SECTION 6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Virginia.
SECTION 7. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered to by their duly authorized officers as of the date first above
written.
Exhibit I
AMENDMENT TO FINANCING SERVICES AND
CONTRIBUTED CAPITAL AGREEMENT
This AMENDMENT TO FINANCING SERVICES AND CONTRIBUTED CAPITAL AGREEMENT
(the "Amendment") is made as of this 6th day of November, 0000, xxxxxxx XXXXXXXX
XXXXXX COOPERATIVE, INCORPORATED (the "Cooperative"), a Virginia corporation,
and MICHIGAN LIVESTOCK CREDIT CORPORATION ("MLCC"), a Virginia corporation.
The parties hereto are parties to a Financing Services and Contributed
Capital Agreement dated as of the 1st day of April, 1998 (the "Agreement") and
desire to amend the provisions of Section 13.03 of the Agreement.
Accordingly, the parties hereto agree that Section 13.03 is amended to
read as follows:
SECTION 13.03. REDEMPTION OF CLASS X PREFERRED STOCK. MLCC covenants
and agrees that if on any TAPOS Determination Date the amount of MLCC
Class X Preferred Stock held by the Cooperative exceeds the Minimum
Class X Investment computed as of such date, it will, subject to the
provisions of Section 13.04, upon written demand by the Cooperative
redeem for cash at its par value those shares held by the Cooperative
which are in excess of the Minimum Class X Investment determined as of
such date, provided that MLCC will not repurchase any MLCC Class X
Preferred Stock if at the time MLCC is indebted (as therein defined)
under the Revolving Credit Agreement (the "Credit Agreement") dated as
of November 6, 1998 by and among MLCC, the Lenders identified therein
and CoBank, as Agent or has the right to borrow under the Credit
Agreement, and if the ratio of the total Debt of MLCC to the sum of
its total Debt and its Net Worth (as such terms are defined in the
Credit Agreement) is greater than 0.5 to 1 or if such ratio would be
greater than 0.5 to 1 after such repurchase.
PRIOR AGREEMENT
---------------
Except as otherwise expressly amended by this Amendment, the Agreement is
and shall continue to be in full force and effect in accordance with its terms.
The Cooperative and MLCC further covenant and agree that each reference in any
agreement or other document to the Agreement shall be deemed to refer to the
Agreement as amended by this Amendment and as it may be amended from time to
time hereafter.
This Amendment shall be governed by and construed and be interpreted in
accordance with the laws of the Commonwealth of Virginia.
IN WITNESS WHEREOF, SOUTHERN STATES COOPERATIVE, INCORPORATED and MICHIGAN
LIVESTOCK CREDIT CORPORATION have caused this Amendment to be executed by their
duly authorized officers all as of the date first above written.
SOUTHERN STATES COOPERATIVE,
INCORPORATED
By:
---------------------------------------
Its:
---------------------------------------
MICHIGAN LIVESTOCK CREDIT CORPORATION
By:
---------------------------------------
Its:
---------------------------------------
FOURTH AMENDED AND RESTATED
FINANCING SERVICES AND CONTRIBUTED CAPITAL AGREEMENT
FOURTH AMENDED AND RESTATED FINANCING SERVICES AND CONTRIBUTED CAPITAL
AGREEMENT ("Agreement") dated as of the _____ day of January, 0000, xxxxxxx
XXXXXXXX XXXXXX COOPERATIVE, INCORPORATED (the "Cooperative"), a Virginia
corporation, and STATESMAN FINANCIAL CORPORATION ("Statesman"), a Virginia
corporation.
Cooperative desires from time to time to sell to Statesman certain
accounts receivable owing to it, certain installment sales contracts and certain
Crop Time Notes, and Statesman is interested in purchasing such receivables,
installment sales contracts and Crop Time Notes. The parties desire to set forth
the terms and conditions upon which such sales may be made. The Cooperative also
desires to have Statesman issue from time to time credit cards to customers of
the Cooperative and its Local Cooperatives and Dealerships, to extend from time
to time asset based financing, agricultural production loans and term loans to
customers of the Cooperative pursuant to separate agreements to be entered into
between each such customer and Statesman and to lease personal property from
time to time to customers of the Cooperative, Local Cooperatives and
Dealerships. Therefore, the parties hereto agree as follows:
ARTICLE I
---------
DEFINITIONS AND ACCOUNTING TERMS
--------------------------------
SECTION 1.01. DEFINED TERMS. As used in this Agreement, the following
terms have the following meanings (terms defined in the singular to have the
same meaning when used in the plural and vice versa):
"Accounts Receivable - Local Cooperative" means the amounts advanced by
the Cooperative to a Local Cooperative and owing from time to time from such
Local Cooperative to the Cooperative.
"Agreement" means this Fourth Amended and Restated Financing Services and
Contributed Capital Agreement, as it may be amended, supplemented, or modified
from time to time.
"Agricultural Production Loan" means to loan for a term of not more than
one year, the proceeds of which are used to raise crops or livestock.
"Approved Contracts" means those Installment Sales Contracts arising out
of the sale of goods by a Retail Service or a customer of the Cooperative which
have been approved in advance by Statesman as evidenced by a Statesman Approval
Number.
"Approved Notes" means those Crop Time Notes arising out of the sale of
goods and services by the Cooperative which have been approved in advance by
Statesman.
"Asset Based Financing" means financing of a Dealership by Statesman
secured by accounts receivable, inventory, equipment, including rolling stock,
real estate and other fixed assets, or any of such items.
"Average Total Delinquency Percentage" means with respect to each of
Retail Accounts, Grain Marketing Accounts and Accounts Receivable - Local
Cooperatives (each a "type" of Receivable) that percentage determined by
dividing the average total delinquent Receivables of that type (including any
Receivables of that type sold to Statesman which are delinquent), measured as of
the last day of each calendar month, for the twelve-month period ending on the
last Business Day of the calendar month preceding a settlement date by the
average total Receivables of that type owing the Cooperative (including those
sold to Statesman), measured as of the last day of each calendar month, for the
same twelve-month period. "Average Total Delinquency Percentage" means with
respect to Wholesale Accounts that percentage determined by dividing the average
total delinquent Wholesale Accounts (including any Wholesale Accounts sold to
Statesman which are delinquent), measured as of the last day of each calendar
month, for the twelve-month period ending on the last Business Day of the
calendar month preceding the date of determination by the average total
Wholesale Accounts owing the Cooperative (including those sold to Statesman),
measured as of the last day of each calendar month, for the same twelve-month
period.
"Average Total Delinquency Percentage Variance" means with respect to each
of Retail Accounts, Grain Marketing Accounts and Accounts Receivable Local
Cooperatives (each a "type" of Receivable) the difference, regardless of which
is greater, between (i) the Average Total Delinquency Percentage for that type
of Receivables computed as of the last Business Day of the calendar month
preceding any settlement date and (ii) the percentage obtained by dividing the
total delinquent Receivables of that type (including Receivables of that type
sold to Statesman which are delinquent) on such date by the total Receivables of
that type (including those sold to Statesman) on such date. "Average Total
Delinquency Percentage Variance" means with respect to Wholesale Accounts the
difference, regardless of which is greater, between (i) the Average Total
Delinquency Percentage for Wholesale Accounts computed as of the last Business
Day of the calendar month preceding the date of determination and (ii) the
percentage obtained by dividing the total delinquent Wholesale Accounts
(including Wholesale Accounts sold to Statesman which are delinquent) on such
date by the total Wholesale Accounts (including those sold to Statesman) on such
date.
"Balances Owed" means the net amount payable to the Cooperative on
Receivables as a result of goods sold or services performed, or both, after
adjustment for all rebates, credits and all other adjustments made by the
Cooperative on all Purchased Receivables.
"Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banks in Richmond, Virginia, are authorized or required to
close under applicable law.
"Collateral" means any property which is subject to a purchase money
security interest securing the obligations of the obligor on a Purchased
Contract or a Purchased Note.
"Crop Time Notes" means promissory notes of Customers of the Cooperative
evidencing amounts due for the purchase of goods and services from the
Cooperative, which are payable in one year or less.
"Customer of the Cooperative" means a member of the Cooperative or other
Person who purchases goods or services from the Cooperative.
"Dealership" means any wholesale customer of the Cooperative which has
purchased merchandise or products from the Cooperative for resale to its
customers and shall include a private dealer of the Cooperative but shall not
include a Retail Service or a Local Cooperative.
"Default" means any of the events specified in Article X, whether or not
any requirement for the giving of notice or the lapse of time, or both, has been
satisfied.
"Dispute" has the meaning set forth in Section 4.06.
"Eligible Contracts" means Installment Sales Contracts arising out of the
sale of goods by Retail Services or a customer of the Cooperative other than
Approved Contracts which Statesman has determined to purchase from the
Cooperative.
"Eligible Notes" means Crop Time Notes other than Approved Notes which
Statesman has determined to purchase from the Cooperative.
"Eligible Receivables" means Receivables which Statesman has determined to
purchase from the Cooperative.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and published interpretations
thereof.
"Event of Default" means any of the events specified in Section 10.01,
provided that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"GAAP" means generally accepted accounting principles consistently applied
with respect to a corporation conducting a business the same as or similar to
that of the Cooperative and its Subsidiaries, if any, as in effect from time to
time.
"Grain Marketing Accounts" means amounts owed to the Cooperative for the
purchase of grain commodities, whether evidenced by open account, note, or
otherwise or any combination thereof.
"Headquarters" means the office of Statesman at 6606 West Broad Street,
Post Office Box 25567, Xxxxxxxx, Xxxxxxxx 00000.
"Historical Charge Off Percentage" means with respect to each of Retail
Accounts, Grain Marketing Accounts and Accounts Receivable - Local Cooperatives
(each a "type" of Receivable) that percentage which is obtained by dividing (a)
the sum of (i) gross bad debt expense of the Cooperative for Receivables of that
type for any fiscal year and (ii) the gross bad debt expense of Statesman for
such fiscal year for Receivables of that type purchased from the Cooperative by
(b) the total dollar volume for sales which generate Receivables of that type
(whether cash or non-cash) of the Cooperative for such fiscal year.
"Independent Cooperative" means a cooperative which is not a Local
Cooperative.
"Installment Sales Contract" means a written agreement providing for the
deferred payment of the purchase price of goods sold in the ordinary course of
business.
"Installment Sales Financing" means the purchasing by Statesman of chattel
paper (as defined in Article 9 of the Uniform Commercial Code of Virginia)
arising out of a sale of merchandise by a Retail Service, Local Cooperative or
Dealership.
"Leases" means contracts for the lease of personal property for a fixed
period of time by Statesman to the Cooperative, a Local Cooperative, a
Dealership or a customer of any.
"Lien" means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), charge or encumbrance of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the Uniform
Commercial Code of Virginia or comparable law of any jurisdiction to evidence
any of the foregoing).
"Local Cooperative" means any corporation which is managed by the
Cooperative under a management agreement or contract.
"Loan" means an Agricultural Production Loan, a Term Loan, an asset based
loan or any substantially similar extension of credit now or hereafter made by
Statesman to a Customer of the Cooperative or other Person.
"Manufacturer" means the original equipment manufacturer of goods offered
for sale by the Cooperative.
"Multiemployer Plan" means a Plan described in Section 4001(a)(3) of ERISA
which covers employees of the Cooperative or to which the Cooperative is or may
be required to make contributions under ERISA.
"Net Balance" means with respect to an Installment Sales Contract, the
outstanding balance owing on such Installment Sales Contract including any
applicable late charges but exclusive of any unearned finance charges as
provided for in such Installment Sales Contract and means with respect to a Crop
Time Note, the outstanding principal balance owing on such Crop Time Note and
all accrued and unpaid interest thereon.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
governmental authority, or other entity of whatever nature.
"Plan" means any employee welfare plan established or maintained by the
Cooperative or to which the Cooperative has made contributions in the past or
may in the future be required to make contributions under ERISA.
"Prohibited Transaction" means any transaction set forth in Section 406 of
ERISA or Section 4975 of the Internal Revenue Code of 1986, as amended from time
to time.
"Purchased Contracts" means Approved Contracts and Eligible Contracts
which have been purchased by Statesman from the Cooperative or a customer of the
Cooperative.
"Purchased Notes" means Approved Notes and Eligible Notes which have been
purchased by Statesman from the Cooperative.
"Purchased Receivables" means Eligible Receivables which have been
purchased by Statesman from the Cooperative.
"Purchased Wholesale Accounts" means Wholesale Accounts which have been
purchased by Statesman from the Cooperative.
"Receivables" means the amounts owing the Cooperative from time to time
for the sale of goods or the performance of services in the ordinary course of
business and shall include Retail Accounts, Grain Marketing Accounts, and
Accounts Receivable - Local Cooperatives.
"Receivables Certificate" means the certificate referred to in Section
2.03(1).
"Reserve Account" means the account established under the provisions of
Section 2.04.
"Retail Accounts" means amounts owing the Cooperative arising out of the
sale in the ordinary course of business of goods and services by Retail Services
or by stores which were then owned and operated by Gold Xxxx Inc., which amounts
are not evidenced by Installment Sales Contracts.
"Retail Service" means any retail store owned and operated by the
Cooperative.
"Southern States Credit Card Program" means the program of Statesman to
approve revolving or open-end credit in specific amounts for individual
customers of the Cooperative, Local Cooperatives and Dealerships, to extend
credit to such customers for the purchase of goods from the Cooperative, Local
Cooperatives and Dealerships and to settle periodically with the Cooperative,
Local Cooperatives and Dealerships for purchases made by customers pursuant to
that program, as such program may exist from time to time.
"Statesman Approval Number" means a number given by Statesman to a Retail
Service to evidence that a particular Installment Sales Contract is an Approved
Contract.
"Subsidiary" means any corporation the majority of the voting shares of
which at the time are owned directly or indirectly by the Cooperative and/or by
one or more Subsidiaries of the Cooperative.
"Term Loan" means a secured loan with the principal amortized over a
period of 5 to 7 years, the proceeds of which are used for agricultural
production.
"Termination Date" means that date on which certain obligations of the
parties hereunder may be terminated as provided in Section 11.04.
"Wholesale Accounts" means any obligation arising out of the sale of goods
or the performance of services in the ordinary course of business which is not
an Account Receivable - Local Cooperative, Grain Marketing Account, or Retail
Account.
"Wholesale Reserve Account" means the account established under the
provisions of Section 4.04.
ARTICLE II
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ACCOUNTS RECEIVABLE FINANCING
-----------------------------
SECTION 2.01. PURCHASE OF RECEIVABLES. Statesman may from time to time,
at its option upon the terms and subject to the conditions contained in this
Agreement, purchase Receivables from the Cooperative, provided that Statesman
has determined in its sole and absolute discretion that such Receivables are
acceptable to it (which acceptable Receivables are herein referred to as the
"Eligible Receivables"), and in no event shall Statesman purchase Receivables if
after such purchase the aggregate amount owing on all Receivables purchased by
Statesman from the Cooperative shall exceed TWO HUNDRED MILLION DOLLARS
($200,000,000). All such purchases shall be made without recourse to the
Cooperative except so far as Statesman shall have the right to make charges to
the Reserve Account as provided in Section 2.05, and nothing contained herein
shall obligate Statesman to purchase any Receivables.
SECTION 2.02. OFFER TO SELL. The Cooperative may from time to time offer
to sell Receivables to Statesman as herein provided, but, except as the parties
may otherwise agree, no Receivable from any obligor shall be sold unless all
accounts owing from such obligor to the Cooperative are sold, and no Retail
Account arising out of a sale at any Retail Service shall be sold unless all
Retail Accounts arising out of sales at such Retail Service are sold.
SECTION 2.03. PROCEDURES.
(1) Prior to 11:00 a.m. (Richmond, Virginia, time) on the tenth Business
Day of each month, or such later day as may be agreed to by Statesman, the
Cooperative shall deliver to Statesman by hand or send by telecopy a certificate
substantially in the form of Exhibit A attached hereto (a "Receivables
Certificate") with the blanks therein appropriately completed and reflecting the
following information for the preceding month:
(a) the amount of all Receivables arising out of sales of goods or
services during the preceding month, if any, which were sold by the Cooperative
to Statesman as of the end of such preceding month;
(b) Receivables which were previously sold to Statesman under the
provisions of this Article II showing the outstanding balances as of the last
day of the preceding month in the aggregate for Retail Accounts, Grain Marketing
Accounts and Accounts Receivable - Local Cooperatives;
(c) Receivables which were previously sold to Statesman pursuant to
this Article II upon which there was any change in the outstanding balance
during such month, and all debits and credits thereon, including without
limitation payments and other remittances by or on behalf of the account
obligor, credits, rebates and adjustments, showing in the aggregate for Retail
Accounts, Grain Marketing Accounts and Accounts Receivable - Local Cooperatives
the prior balance, the amount and nature of adjustments and the balance as of
the last day of the preceding month;
(d) the Cooperative shall promptly make available to Statesman, at
Statesman's request, listings of accounts with balances and other referenced
amounts by obligor that are referred to in Sections 2.03(1)(a), (b) and (c).
(2) Not later than 11:00 a.m. (Richmond, Virginia, time) on the fifth
Business Day after receipt by Statesman of the Receivables Certificate,
Statesman shall pay to the Cooperative the amount by which (a) the aggregate
outstanding balance on each Receivable it has purchased exceeds (b) the Purchase
Discount (as herein defined) and the amount, if any, to be placed in the Reserve
Account pursuant to Section 2.04, provided, however, that Statesman may choose
not to pay for any Receivable evidenced by a promissory note or other instrument
unless such note or other instrument has been endorsed and delivered to
Statesman.
(3) Promptly upon delivery of the certificate described in Section
2.03(1), the Cooperative shall assign and transfer as provided in such
certificate those Receivables Statesman is purchasing and all proceeds thereof,
cash or non-cash.
(4) (a) For purposes of this Article II, the Purchase Discount for Retail
Accounts shall be the product obtained by multiplying the outstanding balance of
the Retail Accounts being purchased by (i) the average Historical Charge Off
Percentage of the Cooperative for Retail Accounts for the three preceding fiscal
years times (ii) the sum of 1 plus the Average Total Delinquency Percentage
Variance for Retail Accounts, plus the anticipated interest charges for the
current month relating to the outstanding purchased Retail Accounts. Such amount
shall be computed according to the following formula:
Discount = Retail Accounts being purchased x [(aHCO%) x (1 + ADV)] +
AIC
where
aHCO% = average Historical Charge Off Percentage for Retail Accounts
for the three preceding fiscal years which for purposes of
this calculation shall not be less than 0.35% or such other
percentage as may be from time to time agreed to by the
Cooperative and Statesman.
ADV = Average Total Delinquency Percentage Variance for Retail
Accounts.
AIC = the anticipated interest charges for the current month for
borrowings relating to outstanding Retail Accounts purchased
by Statesman.
(b) For purposes of this Article II, the Purchase Discount for Grain
Marketing Accounts shall be the product obtained by multiplying the outstanding
balance of the Grain Marketing Accounts being purchased by (i) the average
Historical Charge Off Percentage of the Cooperative for Grain Marketing Accounts
for the three preceding fiscal years times (ii) the sum of 1 plus the Average
Total Delinquency Percentage Variance for Grain Marketing Accounts, plus the
anticipated interest charges for the current month relating to the outstanding
purchased Grain Marketing Accounts. Such amount shall be computed according to
the following formula:
Discount = Grain Marketing Accounts being purchased x [(aHCO%) x (1 +
ADV)] + AIC
where
aHCO% = average Historical Charge Off Percentage for Grain Marketing
Accounts for the three preceding fiscal years which for
purposes of this calculation shall not be less than 0.15% or
such other percentage as may be from time to time agreed to by
the Cooperative and Statesman.
ADV = Average Total Delinquency Percentage Variance for Grain
Marketing Accounts.
AIC = the anticipated interest charges for the current month for
borrowings relating to outstanding Grain Marketing Accounts
purchased by Statesman.
(c) For purposes of this Article II, the Purchase Discount for
Accounts Receivable - Local Cooperatives shall be the product obtained by
multiplying the outstanding balance of the Accounts Receivable - Local
Cooperatives being purchased by (i) the average Historical Charge Off Percentage
of the Cooperative for Accounts Receivable - Local Cooperatives for the three
preceding fiscal years times (ii) the sum of 1 plus the Average Total
Delinquency Percentage Variance for Accounts Receivable - Local Cooperatives,
plus the anticipated interest charges for the current month relating to the
outstanding purchased Accounts Receivable - Local Cooperatives. Such amount
shall be computed according to the following formula:
Discount = Accounts Receivable - Local Cooperatives being purchased x
[(aHCO%) x (1 + ADV)] + AIC
where
aHCO% = average Historical Charge Off Percentage for Accounts
Receivable - Local Cooperatives for the three preceding fiscal
years which for purposes of this calculation shall not be less
than .05% or such other percentage as may be from time to time
agreed to by the Cooperative and Statesman.
ADV = Average Total Delinquency Percentage Variance for Accounts
Receivable - Local Cooperatives.
AIC = the anticipated interest charges for the current month for
borrowings relating to outstanding Accounts Receivable Local
Cooperatives purchased by Statesman.
Notwithstanding anything to the contrary contained in this Agreement, a
portion of such purchase price shall be placed in the reserve account described
in Section 2.04.
SECTION 2.04. RESERVE ACCOUNT. Statesman shall place in a reserve account
(the "Reserve Account") an amount not to exceed one-eighth of one percent
(0.125%) of the aggregate outstanding balance on each Receivable it elects to
purchase, provided, however, that in no event shall any additional amount be
deducted from the Purchase Price paid to the Cooperative or placed in the
Reserve Account if the aggregate amount in the Reserve Account is equal to or
greater than one quarter of one percent (0.25%) of the aggregate unpaid balance
of all Receivables which Statesman has purchased from the Cooperative (including
the Receivables being paid for on such date). Funds in the Reserve Account need
not be segregated from other funds of Statesman. If at the end of any fiscal
year of Statesman, the balance in the Reserve Account after charges to the
Reserve Account as permitted in Section 2.05 is greater than one-eighth of one
percent (0.125%) of the balance owing on Receivables which Statesman has
purchased from the Cooperative, no Event of Default shall have occurred and be
continuing and no obligation of the Cooperative to Statesman is then due and
payable, Statesman will upon request of the Cooperative remit such excess to the
Cooperative.
SECTION 2.05. CHARGES TO RESERVE ACCOUNT. Statesman may in its sole and
absolute discretion charge losses on Purchased Receivables related to Credit
Risk (as defined in Section 4.06) against the Reserve Account. Statesman agrees
to add to the Reserve Account the amount received as a recovery less associated
collection costs on any Purchased Receivables which were previously charged to
the Reserve Account. Statesman shall notify the Cooperative promptly in writing
of any such reduction in the Reserve Account. As of the end of each month,
Statesman will provide the Cooperative with a report of transactions in the
Reserve Account during such month showing the balance in such account as of the
end of such month.
SECTION 2.06. PAYMENTS FROM THE COOPERATIVE. Monthly with the delivery of
each Receivables Certificate the Cooperative shall remit to Statesman in
immediately available funds an amount equal to the sum of (i) all payments
received by the Cooperative during the preceding month on Purchased Receivables,
(ii) all rebates or credits on any Purchased Receivable allowed by the
Cooperative during the preceding month, and (iii) all other adjustments made by
the Cooperative on any Purchased Receivable during such month which resulted in
a reduction of the amount owing thereon, minus any proceeds the Cooperative has
collected on Purchased Receivables and paid to Statesman since the delivery of
the previous Receivables Certificate.
SECTION 2.07. METHOD OF PAYMENT. All payments from the Cooperative to
Statesman under the terms of this Agreement shall be made to Statesman in
immediately available funds in Richmond, Virginia. Whenever any payment is
scheduled to be made on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day.
SECTION 2.08. FACILITY FEES FOR PURCHASE OF RECEIVABLES. The Cooperative
will pay to Statesman by the tenth Business Day of each month, or such later day
as may be agreed to by Statesman, a Facility Fee in such amount as shall be
agreed upon from time to time by the Cooperative and Statesman.
SECTION 2.09. COLLECTION OF RECEIVABLES. Statesman hereby authorizes the
Cooperative to collect Purchased Receivables, subject to direction and control,
but Statesman may, without cause or notice, curtail or terminate said authority
at any time. Upon receipt of all checks, drafts, cash and other remittance in
payments of or on account of the Purchased Receivables, the Cooperative will
account to Statesman for such proceeds as herein provided. The Cooperative will
endorse all checks, drafts and other items evidencing such proceeds where
necessary to permit collection of such items, which endorsement Statesman is
also hereby authorized to make, as attorney-in-fact on behalf of the
Cooperative.
The Cooperative will pay all proceeds it collects on Purchased Receivables
to Statesman monthly no later than the tenth Business Day of each month or at
such other intervals as Statesman may from time to time request.
If the Cooperative receives any promissory note or other instrument (other
than a check) in payment of or on account of any Purchased Receivable, it will
immediately endorse the same and deliver it to Statesman.
Within ten (10) days of receipt of a written request of Statesman, the
Cooperative will notify the obligor on each Purchased Receivable to make
payments to Statesman at its Headquarters or at such other address as Statesman
shall have furnished to the Cooperative in writing and shall promptly deliver to
Statesman all proceeds of any Purchased Receivables then held by the
Cooperative. From and after receipt of such request, the Cooperative will
promptly forward to Statesman all checks, drafts, cash and other remittances
received by it in payment of or on account of any Purchased Receivable.
If the Cooperative shall fail to notify account obligors to make payments
to Statesman as herein provided, and in any event upon the occurrence of an
Event of Default, Statesman may so notify such account obligors.
SECTION 2.10. REPURCHASE OF RECEIVABLES. If the Cooperative shall at any
time determine not to sell to Statesman the Retail Accounts arising out of sales
made at any Retail Service, the Cooperative will with the consent of Statesman
promptly repurchase from Statesman all Retail Accounts arising out of sales made
at such Retail Service which Statesman has previously purchased from it. The
purchase price for such Retail Accounts will be the Balances Owed on the Retail
Accounts giving credit for all payments received by Statesman to the date of
sale to the Cooperative.
ARTICLE III
-----------
INSTALLMENT SALES FINANCING
---------------------------
SECTION 3.01. GENERAL. Statesman will from time to time, upon the terms
and subject to the conditions contained in this Agreement, purchase from the
Cooperative Approved Contracts. Statesman may from time to time, at its option,
purchase from the Cooperative other Installment Sales Contracts arising out of
the sale of goods by Retail Services as provided in Section 3.03. Nothing
contained herein shall obligate Statesman to purchase any Installment Sales
Contract other than those Installment Sales Contracts which have been approved
in advance by Statesman as evidenced by a Statesman Approval Number (which
contracts are herein referred to as "Approved Contracts").
SECTION 3.02. NON-RECOURSE PURCHASES. Statesman will from time to time
upon the terms and subject to the conditions contained in this Agreement,
purchase Approved Contracts from the Cooperative. Such purchases shall be
without recourse to the Cooperative except as specifically provided for herein.
SECTION 3.03. FULL RECOURSE OPTION.
(1) Statesman may from time to time, at its option upon the terms and
subject to the conditions contained in this Agreement, purchase from the
Cooperative Installments Sales Contracts arising out of the sales of goods by
Retail Services, which Installment Sales Contracts Statesman has determined in
its sole and absolute discretion to be acceptable (which contracts are herein
referred to as "Eligible Contracts"), notwithstanding the fact that such
contracts have not been previously approved by Statesman and do not bear an
appropriate Statesman Approval Number. All purchases of such contracts shall be
subject to full recourse to the Cooperative as provided in paragraph (2) of this
Section 3.03.
(2) If any installment on any Installment Sales Contract purchased under
the provisions of this Section 3.03 is not paid within ninety (90) days of the
date it is scheduled to be paid, upon written demand by Statesman, the
Cooperative will repurchase such contract immediately for its Net Balance.
SECTION 3.04. PURCHASE PRICE; DELIVERY OF PURCHASED CONTRACTS. The
purchase price for Approved Contracts and Eligible Contracts shall be the Net
Balance or such other amount as may from time to time be agreed to in writing by
the Cooperative and Statesman. Upon receipt of an Approved Contract or Eligible
Contract duly endorsed and all related credit information, and the satisfaction
of all the conditions set forth in Article VI hereof, provided no Event of
Default shall have occurred and be continuing, and provided Statesman shall not
then be entitled to require that the Cooperative repurchase Purchased Contracts
under the provisions of Section 3.03 hereof, Statesman shall pay the Cooperative
in cash the purchase price for each such Approved Contract or Eligible Contract.
Promptly thereafter, the Cooperative will notify each obligor on each such
Purchased Contract to make all future payments to Statesman at its Headquarters.
The Cooperative authorizes Statesman to insert its name, or the name of any
other assignee, in the space provided therefor in the assignment clause of all
Purchased Contracts and to return to the Cooperative all Installment Sales
Contracts not purchased. Statesman will identify in writing those contracts it
agrees to purchase and will return those contracts it declines to purchase. The
Cooperative is authorized to cancel the endorsement on each Installment Sales
Contract which Statesman does not purchase.
SECTION 3.05. WARRANTIES.
(1) By the delivery and sale of each such Installment Sales Contract under
the provisions of Section 3.02 or Section 3.03, the Cooperative warrants to
Statesman that:
(a) It has good title to such Installment Sales Contract or is
authorized to obtain payment on behalf of one who has good title and the sale
and transfer thereof are otherwise rightful;
(b) Each such Installment Sales Contract is a binding obligation
arising from the sale of merchandise by a Retail Service in the ordinary course
of business as described in the contract to a person or entity specified therein
as the obligor and constitutes the valid and legally binding obligation of such
obligor enforceable in accordance with its terms; such contract states the full
agreement of the parties and arises out of legally sufficient consideration;
(c) All signatures on such Installment Sales Contract are genuine or
authorized and all obligors thereon have the capacity to execute such contract;
(d) Such Installment Sales Contract has not been materially altered;
(e) No obligor on such Installment Sales Contract has any defense,
set off or counterclaim against the Cooperative which is good against it;
(f) The conduct of the Cooperative in making the sale out of which
each contract arose was in all material respects in compliance with all
applicable laws and was not induced by fraud, false or misleading
representations or any other manner of unfair or deceptive trade practices or
other unlawful conduct;
(g) All credit information concerning the obligors on such contracts
was obtained and recorded in strict compliance with all applicable state and
federal laws, and the Cooperative has no reason to believe that any such
information is false, misleading or incomplete in any respect;
(h) All current credit information with respect to such obligors has
been accurately reported to Statesman;
(i) The Installment Sales Contract forms provided by Statesman have
not been altered, modified or supplemented in any respect;
(j) All information required to be disclosed in such forms has been
accurately recorded therein and the Cooperative has complied with the
Truth-in-Lending Act and all other applicable disclosure laws, federal and
state;
(k) No fee has been charged with respect to any contract and no such
contract includes any deferred payment price or other charge which violates any
applicable usury law or consumer protection law;
(l) Such Installment Sales Contract contains all of the terms and
conditions of the agreement between the Cooperative and the obligors with
respect to such purchase and the Cooperative has not entered into any other
agreement with any obligor with respect to such contract and has not waived or
agreed to waive any term or condition contained in the form or taken any other
action which might result in any constructive or implied waiver or modification
thereof;
(m) Each down payment shown in each Installment Sales Contract has
actually been received in cash from the obligors or a person paying such amount
on behalf of the obligors and no part thereof has been directly or indirectly
advanced by the Cooperative;
(n) Each trade-in shown in each Installment Sales Contract has
actually been delivered to the Cooperative and the amount recorded in the
contract accurately reflects the agreed value thereof;
(o) All aspects of the sale have been in strict compliance with all
applicable consumer protection acts and regulations, including without
limitation the Truth-in-Lending Act, the Equal Credit Opportunity Act and any
applicable state law;
(p) All applicants for credit have been given all notices required
by applicable law;
(q) The Cooperative has no knowledge of any insolvency proceeding
involving any party obligated on such Installment Sales Contract; and
(r) Such Installment Sales Contract is not subject to any claim,
lien, security interest, charge or other encumbrance in favor of any one other
than the Cooperative and Statesman, and the Cooperative has not offered such
Contract for sale to any purchaser other than Statesman.
(2) The Cooperative further represents and warrants that it is and shall
be solvent at the time of each sale of any Installment Sales Contract.
SECTION 3.06. REMEDIES OF STATESMAN WITH RESPECT TO INSTALLMENT SALES
CONTRACTS PURCHASED UNDER THE PROVISIONS OF THIS ARTICLE THREE.
(1) Breach of Warranty. If any warranty made by the Cooperative under the
provisions of Section 3.05 of this Agreement shall prove to have been false in
any material respect as it relates to any Purchased Contract, the Cooperative
covenants and agrees promptly upon written demand by Statesman to purchase such
Purchased Contract for the Net Balance in immediately available funds. Statesman
covenants and agrees that upon receipt of such payment it will cancel the
endorsement and deliver such Purchased Contract to the Cooperative at the
address stated in Section 11.07 of this Agreement. Statesman represents and
warrants to the Cooperative with respect to each such Installment Sales Contract
that the Net Balance paid to it is the Net Balance of such contract and that
except as disclosed in a writing accompanying such contract, Statesman has not
released any party to such contract from its obligation thereunder, released any
security interest directly securing such contract or consented to any reduction
in the amount owing thereon or the extension of the due date for any payment or
installment thereunder. Such transfer from Statesman to the Cooperative will be
without recourse and except as provided in the immediately preceding sentence,
without representation or warranty of any nature or type.
(2) Determination of Breach. For the purpose of determining whether or not
any warranty made by the Cooperative under the provisions of Section 3.05 was
false and that the Cooperative is therefore obliged to repurchase any Purchased
Contract, the Cooperative shall be bound by a written statement of an officer of
Statesman that in the reasonable judgment of Statesman it has determined that
any obligor under any Purchased Contract has refused to make any scheduled
payment under such contract because of any fact which has been represented as
otherwise by the Cooperative to Statesman under the provisions of Section 3.05
hereof.
SECTION 3.07. CONTRACT FORMS. Statesman will provide and the Cooperative
will use forms of contracts and credit applications previously approved by
Statesman. In the event Statesman determines that any previously approved form
should not be used, it will so advise the Cooperative and the Cooperative will
discontinue any use of such form.
SECTION 3.08. PAYMENTS. The Cooperative will cause each Retail Service on
the day of receipt of any payment on any Purchased Contract to report such
payment to Statesman at its Headquarters. The Cooperative covenants and agrees
that all payments received by it on Purchased Contracts will be charged to the
Cooperative's intercompany accounts payable to Statesman and paid to Statesman
in collected funds no less frequently than every five (5) business days. In the
event the Cooperative shall fail to endorse any check or other item when
necessary to permit its collection, Statesman is authorized, as its
attorney-in-fact to make such endorsement on behalf of the Cooperative.
SECTION 3.09. OBLIGOR COMPLAINTS AND RETURNED MERCHANDISE.
(1) The Cooperative shall, within three (3) Business Days of its receipt,
provide Statesman with a copy of any written complaint from any obligor(s)
relating to any Purchased Contract or any merchandise or service purchased
thereunder;
(2) If the purchaser under any Purchased Contract returns merchandise, for
any reason, within 10 days from the date of the sale, the Cooperative will fully
reimburse such purchaser for any down payment and immediately repurchase the
Purchased Contract from Statesman for its Net Balance.
SECTION 3.10. MODIFICATIONS, EXTENSIONS. Statesman may, without affecting
the agreements of the Cooperative herein, change, modify, extend or renew the
dates and amounts of the periodic installment payments in any Purchased
Contract.
SECTION 3.11. WARRANTY, SERVICE, OR SIMILAR AGREEMENTS. The Cooperative
covenants and agrees to indemnify and hold Statesman harmless from any and all
losses arising out of the breach of any performance or extended warranties and
all service or similar agreements made by Manufacturer, the Cooperative, or any
other Person relating to merchandise which is the subject of any Purchased
Contract, even if any such warranty, service, or similar agreements are not
immediately effective. Unless such agreement expressly provides otherwise, the
Cooperative agrees to provide repairs and service to the purchaser of the
merchandise at its usual rates of charge.
SECTION 3.12. REPOSSESSION.
(1) The Cooperative will, at Statesman's request, act as its agent in the
repossession of any property described in any Purchased Contract in accordance
with all applicable laws and in that capacity take certain actions, including
the transportation of the property from its location to the Cooperative's place
of business, repair and restoration of the property to a marketable condition,
and storage, without storage fee. Statesman will compensate the Cooperative for
its reasonable actual costs in such transportation, repair, and restoration,
except as covered by an extended warranty or service agreement. In the event
Statesman directs the Cooperative on its behalf to sell the property, it will
pay the Cooperative such commission as is agreed upon from time to time by the
Cooperative and Statesman and as evidenced by Statesman's letter. The
Cooperative agrees to sell said property in accordance with the applicable
provisions of the Uniform Commercial Code, as it may be amended from time to
time, and other applicable law.
(2) Where an extended warranty or service agreement is included in the
sales contract purchased, the Cooperative hereby agrees to perform at its
expense or have performed such warranty or service work under the terms of such
extended warranty or service agreement. A pro rata refund will be paid in cash
to Statesman of the unearned identifiable charge assessed for the extended
warranty or service agreement, which will then be credited to any balance due on
such Purchased Contract.
ARTICLE IIIA
------------
CREDIT CARD FINANCING
---------------------
Section 3A.01. Approval of Customer's Credit. Statesman agrees to review
information on customers of the Cooperative, Local Cooperatives and Dealerships
recorded on its Statesman Revolving Credit Card Application and Agreement forms
and submitted to it by the Cooperative, a Local Cooperative or a Dealership and
to approve extending open-end or revolving credit to such customers in a
specific dollar amount or to deny such credit.
Section 3A.02. Purchases By Credit Card Customers. After Statesman has
approved the credit of a customer in the Southern States Credit Card Program, so
long as the customer pays his or her account in accordance with the terms
thereof established from time to time by Statesman and otherwise complies with
the terms thereof and is not bankrupt or insolvent, Statesman will extend credit
to such customer up to the preapproved dollar limit for the purchase of goods
and services from the Cooperative, a Local Cooperative or a Dealership.
Section 3A.03. Approval of Requests to Change Credit. Statesman agrees
upon request of the Cooperative, a Local Cooperative or a Dealership to review
information on customers of the Cooperative, such Local Cooperative or such
Dealership and to approve changing the amount of open-end or revolving credit
for such customers to a specific dollar amount or to deny such change.
Section 3A.04. Settlement for Purchases. Statesman will periodically
settle with the Cooperative and each Local Cooperative and Dealership for
purchases made from the Cooperative or such Local Cooperative or Dealership, as
the case may be, under the Southern States Credit Card Program by periodically
crediting to the Cooperative or such Local Cooperative or Dealership, as the
case may be, the aggregate amount of such purchases since the last settlement
date, net of the applicable merchant's discount as may be agreed to from time to
time by the Cooperative or such Local Cooperative or Dealership, as the case may
be, and Statesman. All sales under the Southern States Credit Card Program made
in accordance with the instructions provided from time to time by Statesman to
the Cooperative, the Local Cooperatives and the Dealerships will be without
recourse. Statesman may, however, require the Cooperative, a Local Cooperative
or a Dealership to reimburse it for certain purchases as may be agreed to from
time to time by Statesman and the Cooperative, such Local Cooperative or such
Dealership. The parties acknowledge and agree that in the event of any conflict
between the terms hereof and any other agreement between the parties or between
Statesman and a Local Cooperative or a Dealership with respect to such rights
and obligations, the terms of the other agreement shall govern.
ARTICLE IIIB
------------
ASSET BASED FINANCING
---------------------
SECTION 3B.01. GENERAL. From time to time at the request of the
Cooperative, Statesman may extend asset based financing to customers of the
Cooperative. Such financing shall be extended pursuant to separate agreements to
be entered into between each such customer and Statesman.
SECTION 3B.02. TERMS AND CONDITIONS. Nothing contained herein shall
obligate Statesman to extend any asset based financing to any person. All
decisions with respect to asset based financing shall be made by Statesman in
its sole discretion, subject to such agreements as Statesman may enter into from
time to time with its asset based borrowers.
ARTICLE IIIC
------------
PERSONAL PROPERTY LEASING
-------------------------
SECTION 3C.01. LEASES TO THE COOPERATIVE. Statesman will from time to time
lease computers, computer equipment and other equipment to the Cooperative,
which equipment may be subleased by the Cooperative to others. Such leases shall
be on such terms and conditions as may be agreed to from time to time by
Statesman and the Cooperative and will be evidenced by lease agreements between
Statesman and the Cooperative.
SECTION 3C.02. APPROVAL OF CUSTOMER'S CREDIT. Statesman agrees to review
information on customers of the Cooperative, Local Cooperatives and Dealerships
recorded on its Statesman application forms for the lease of liquid propane
tanks (or other personal property then being leased by Statesman) and submitted
to it by the Cooperative, a Local Cooperative or a Dealership and to approve
leasing such property to such customers or to determine not to lease such
property.
SECTION 3C.03. PAYMENT FOR LEASED PROPERTY. If Statesman approves the
lease of personal property to customers of the Cooperative, a Local Cooperative
or a Dealer, it will promptly notify the Cooperative or the Local Cooperative or
Dealership which requested such lease, and if it has received a properly
completed Lease Agreement appropriately signed by the customer and the
Cooperative, the Local Cooperative or the Dealership, as the case may be, it
will remit to the Cooperative, or to the Local Cooperative or Dealership which
requested such lease the invoice price of the leased equipment.
SECTION 3C.04. COLLECTION OF RENT. The Cooperative, or the Local
Cooperative or Dealership which requested the lease will serve as the agent of
Statesman in the collection of the monthly rent due under the lease and will
remit to Statesman monthly from the proceeds of liquid propane sold to the
lessee the monthly rentals due under the lease.
ARTICLE IIID
------------
AGRICULTURAL PRODUCTION LOANS
-----------------------------
SECTION 3D.01. GENERAL. Statesman may from time to time extend
Agricultural Production Loans to customers of the Cooperative and other Persons.
Such financing shall be extended pursuant to separate agreements to be entered
into between each such Person and Statesman.
SECTION 3D.02. TERMS AND CONDITIONS. Nothing contained herein shall
obligate Statesman to extend any Agricultural Production Loan to any person. All
decisions with respect to Agricultural Production Loans shall be made by
Statesman in its sole discretion, subject to such agreements as Statesman may
enter into from time to time with its Agricultural Production Loan borrowers.
ARTICLE IIIE
------------
CROP TIME NOTES
---------------
SECTION 3E.01. GENERAL. Statesman will from time to time, upon the terms
and subject to the conditions contained in this Agreement, purchase from the
Cooperative Crop Time Notes which have been approved by Statesman. Nothing
contained herein shall obligate Statesman to purchase any Crop Time Note other
than those Crop Time Notes which have been approved in advance by Statesman
(which Notes are herein referred to as "Approved Notes").
SECTION 3E.02. NON-RECOURSE PURCHASES. The purchase of Crop Time Notes
under this Agreement shall be without recourse to the Cooperative except as
specifically provided for herein.
SECTION 3E.03. FULL RECOURSE OPTION.
(1) Statesman may from time to time, at its option upon the terms and
subject to the conditions contained in this Agreement, purchase from the
Cooperative Crop Time Notes arising out of the sales of goods or the providing
of services by the Cooperative, which Crop Time Notes Statesman has determined
in its sole and absolute discretion to be acceptable (which Notes are herein
referred to as "Eligible Notes"), notwithstanding the fact that such Notes have
not been previously approved by Statesman. All purchases of such Notes shall be
subject to full recourse to the Cooperative as provided in paragraph (2) of this
Section 3E.03.
(2) If any Crop Time Note purchased under the provisions of this Section
3E.03 is not paid within ninety (90) days of the date it is scheduled to be
paid, upon written demand by Statesman, the Cooperative will repurchase such
Note immediately for its Net Balance.
SECTION 3E.04 PURCHASE PRICE; DELIVERY OF PURCHASED NOTES. The purchase
price for Approved Notes and Eligible Notes shall be the Net Balance or such
other amount as may from time to time be agreed to in writing by the Cooperative
and Statesman. Upon receipt of an Approved Note or Eligible Note duly endorsed
and all related credit information, and the satisfaction of all the conditions
set forth in Article VI hereof, provided no Event of Default shall have occurred
and be continuing, and provided Statesman shall not then be entitled to require
that the Cooperative repurchase Eligible Notes under the provisions of Section
3E.03 hereof, Statesman shall pay the Cooperative in cash the purchase price for
each such Approved Note or Eligible Note. Promptly thereafter, the Cooperative
will notify each obligor on each such Crop Time Note to make all future payments
to Statesman at its Headquarters. The Cooperative authorizes Statesman to insert
its name, or the name of any other assignee, in the space provided therefor in
the assignment clause of all Crop Time Notes it has purchased and to return to
the Cooperative all Crop Time Notes not purchased. Statesman will identify in
writing those Notes it agrees to purchase and will return those Notes it
declines to purchase. The Cooperative is authorized to cancel the endorsement on
each Crop Time Note which Statesman does not purchase.
SECTION 3E.05. WARRANTIES.
(1) By the delivery and sale of each such Crop Time Note under the
provisions of Section 3E.02 or Section 3E.03, the Cooperative warrants to
Statesman that:
(a) It has good title to such Crop Time Note or is authorized to
obtain payment on behalf of one who has good title and the sale and transfer
thereof are otherwise rightful;
(b) Each such Crop Time Note is a binding obligation arising from
the sale of merchandise or services by the Cooperative in the ordinary course of
business as described in the Note to a person or entity specified therein as the
obligor and constitutes the valid and legally binding obligation of such obligor
enforceable in accordance with its terms; such Note states the full agreement of
the parties and arises out of legally sufficient consideration;
(c) All signatures on such Crop Time Note are genuine or authorized
and all obligors thereon have the capacity to execute such Note;
(d) Such Crop Time Note has not been materially altered;
(e) No obligor on such Crop Time Note has any defense, set off or
counterclaim against the Cooperative which is good against it;
(f) The conduct of the Cooperative in making the sale out of which
each Note arose was in all material respects in compliance with all applicable
laws and was not induced by fraud, false or misleading representations or any
other manner of unfair or deceptive trade practices or other unlawful conduct;
(g) All credit information concerning the obligors on such Notes was
obtained and recorded in strict compliance with all applicable state and federal
laws, and the Cooperative has no reason to believe that any such information is
false, misleading or incomplete in any respect;
(h) All current credit information with respect to such obligors has
been accurately reported to Statesman;
(i) The Crop Time Note forms provided by Statesman have not been
altered, modified or supplemented in any respect;
(j) All information required to be disclosed in such forms has been
accurately recorded therein and to the extent applicable, the Cooperative has
complied with the Truth-in-Lending Act and all other applicable disclosure laws,
federal and state;
(k) No fee has been charged with respect to any Note and no such
Note includes any deferred payment price or other charge which violates any
applicable usury law or consumer protection law;
(l) Such Crop Time Note contains all of the terms and conditions of
the obligation of the obligors evidenced thereby and the Cooperative has not
entered into any other agreement with the obligor with respect to such Note and
has not waived or agreed to waive any term or condition contained in the form or
taken any other action which might result in any constructive or implied waiver
or modification thereof;
(m) All aspects of the sale out of which such Crop Time Note arose
have been in strict compliance with all applicable consumer protection acts and
regulations, including without limitation the Truth-in-Lending Act, the Equal
Credit Opportunity Act and any applicable state law;
(n) All applicants for credit have been given all notices required
by applicable law;
(o) The Cooperative has no knowledge of any insolvency proceeding
involving any party obligated on such Crop Time Note; and
(p) Such Crop Time Note is not subject to any claim, lien, security
interest, charge or other encumbrance in favor of any one other than the
Cooperative and Statesman, and the Cooperative has not offered such Note for
sale to any purchaser other than Statesman.
(2) The Cooperative further represents and warrants that it is and shall
be solvent at the time of each sale of any Crop Time Note.
SECTION 3E.06. REMEDIES OF STATESMAN WITH RESPECT TO CROP TIME NOTES
PURCHASED UNDER THE PROVISIONS OF THIS ARTICLE THREE.
(1) Breach of Warranty. If any warranty made by the Cooperative under the
provisions of Section 3E.05 of this Agreement shall prove to have been false in
any material respect as it relates to any Purchased Note, the Cooperative
covenants and agrees promptly upon written demand by Statesman to purchase such
Purchased Note for the Net Balance in immediately available funds. Statesman
covenants and agrees that upon receipt of such payment it will cancel the
endorsement and deliver such Purchased Note to the Cooperative at the address
stated in Section 11.07 of this Agreement. Statesman represents and warrants to
the Cooperative with respect to each such Crop Time Note that the Net Balance
paid to it is the Net Balance of such Note and that except as disclosed in a
writing accompanying such Note, Statesman has not released any party to such
Note from its obligation thereunder, released any security interest directly
securing such Note or consented to any reduction in the amount owing thereon or
the extension of the due date for any payment or installment thereunder. Such
transfer from Statesman to the Cooperative will be without recourse and except
as provided in the immediately preceding sentence, without representation or
warranty of any nature or type.
(2) Determination of Breach. For the purpose of determining whether or not
any warranty made by the Cooperative under the provisions of Section 3E.05 was
false and that the Cooperative is therefore obliged to repurchase any Purchased
Note, the Cooperative shall be bound by a written statement of an officer of
Statesman that in the reasonable judgment of Statesman it has determined that
any obligor under any Purchased Note has refused to make any scheduled payment
under such Note because of any fact which has been represented as otherwise by
the Cooperative to Statesman under the provisions of Section 3E.05 hereof.
SECTION 3E.07. NOTE FORMS. Statesman will provide and the Cooperative will
use forms of Crop Time Notes and credit applications previously approved by
Statesman. In the event Statesman determines that any previously approved form
should not be used, it will so advise the Cooperative and the Cooperative will
discontinue any use of such form.
SECTION 3E.08. PAYMENTS. The Cooperative will on the day of receipt of any
payment on any Purchased Note forward such payment to Statesman at its
Headquarters. In the event the Cooperative shall fail to endorse any check or
other item when necessary to permit its collection, Statesman is authorized, as
its attorney-in-fact to make such endorsement on behalf of the Cooperative.
SECTION 3E.09. OBLIGOR COMPLAINTS AND RETURNED MERCHANDISE.
(1) The Cooperative shall, within three (3) Business Days of its receipt,
provide Statesman with a copy of any written complaint from any obligor relating
to any Purchased Note or any merchandise or service purchased thereunder;
(2) If the obligor on any Purchased Note returns merchandise, for any
reason, within 10 days from the date of the sale, the Cooperative will fully
reimburse such obligor for any down payment and immediately repurchase the
Purchased Note from Statesman for its Net Balance.
SECTION 3E.10. MODIFICATIONS, EXTENSIONS. Statesman may, without
affecting the agreements of the Cooperative herein, change, modify, extend or
renew the dates and amounts of any scheduled payment on any Purchased Note.
SECTION 3E.11. REMEDIES.
Statesman may exercise such remedies with respect to the enforcement of
the Purchased Notes as it may deem appropriate. The Cooperative will cooperate
with Statesman in the enforcement of the Purchased Notes.
ARTICLE IIIF
------------
TERM LOANS
----------
SECTION 3F.01. GENERAL. Statesman may from time to time extend Term Loans
to Customers of the Cooperative and other Persons. Such loans shall be extended
pursuant to separate agreements to be entered into between each such Person and
Statesman.
SECTION 3F.02. TERMS AND CONDITIONS. Nothing contained herein shall
obligate Statesman to extend any Term Loan to any person. All decisions with
respect to Term Loans shall be made by Statesman in its sole discretion, subject
to such agreements as Statesman may enter into from time to time with its Term
Loan borrowers.
ARTICLE IV
----------
FINANCING WHOLESALE ACCOUNTS
----------------------------
SECTION 4.01. PURCHASE OF WHOLESALE ACCOUNTS. Statesman shall from time
to time, upon the terms and subject to the conditions contained in this
Agreement, purchase Wholesale Accounts from the Cooperative, provided that
Statesman has determined in its sole and absolute discretion that such Wholesale
Accounts are acceptable to it and as to which approval has not been withdrawn by
Statesman as provided below. All such purchases shall be made without recourse
to the Cooperative except as provided in Sections 4.09 and 4.11 and except so
far as Statesman shall have the right to make charges to the Wholesale Reserve
Account as provided in Section 4.05.
SECTION 4.02. REPAYMENT TERMS OFFERED ON CREDIT SALES. The Cooperative
agrees to provide Statesman with a comprehensive list of all credit repayment
plans (the "Repayment Terms") which it plans to offer to Cooperative Wholesale
Account customers. Statesman will review the Repayment Terms to be offered prior
to their implementation by the Cooperative and will advise the Cooperative of
its acceptance of the proposed Repayment Terms. Statesman will purchase only
those invoices which are in conformity with the preestablished Repayment Terms
which have been approved by Statesman. The Cooperative will not make any changes
in the Repayment Terms offered to the Wholesale Account customers without first
obtaining Statesman's written approval.
The requested credit line, anticipated sales volume, financial
information, credit application and any other information which Statesman in its
sole discretion may request shall be obtained by the Cooperative, and each and
every sale to Wholesale Accounts shall be made only in accordance with the
Statesman approved Repayment Terms and the Statesman Approval, which may be
withdrawn at any time before actual delivery of merchandise or rendition of
services to the customer.
SECTION 4.03. PROCEDURES.
(1) Prior to the generation of new receivables, the Cooperative will
provide to Statesman information concerning customers to which the Cooperative
plans to sell merchandise or render a service which will result in the creation
of a Wholesale Account. Statesman will review the information and determine in
its sole and absolute discretion the terms under which the Cooperative may sell
to the customer such that Statesman will purchase the resulting Wholesale
Account (the "Statesman Approval"). Any customer which has been approved by
Statesman will hereinafter be referred to as an "Approved Wholesale Account."
Statesman will notify the Cooperative in writing of its decision.
(2) Not later than 10:00 a.m. (Richmond, Virginia, time) on each Business
Day, the Cooperative will provide to Statesman information on Approved Wholesale
Accounts being offered to Statesman for purchase. This information shall include
all information which Statesman may reasonably request and shall be in a form
satisfactory to Statesman.
(3) Not later than 12 noon (Richmond, Virginia, time) on the same Business
Day, Statesman will confirm to the Cooperative those Approved Wholesale Accounts
it is purchasing and will prepare and deliver its check drawn on Crestar Bank,
Richmond, Virginia, or other bank satisfactory to the Cooperative, or make an
ACH transfer or wire transfer, for the face amount of the Wholesale Accounts
which Statesman is purchasing less any amount to be placed in the Wholesale
Reserve Account pursuant to Section 4.04 and less the Purchase Discount for
Wholesale Accounts. Statesman may choose not to pay for any Wholesale Account
evidenced by a promissory note or other instrument unless such note or other
instrument has been endorsed and delivered to Statesman.
(4) For purposes of this Article IV, the Purchase Discount for Wholesale
Accounts shall be the product obtained by multiplying the outstanding balance of
the Wholesale Accounts being purchased by (i) the average Historical Charge Off
Percentage of the Cooperative for Wholesale Accounts for the three preceding
fiscal years times (ii) the sum of 1 plus the Average Total Delinquency
Percentage Variance for Wholesale Accounts, plus the anticipated net interest
charges for the current month relating to the outstanding purchased Wholesale
Accounts. Such amount shall be computed according to the following formula:
Discount = Wholesale Accounts being purchased x [(aHCO%) x (1 + ADV)] +
AIC
where
aHCO% = average Historical Charge Off Percentage for Wholesale
Accounts for the three preceding fiscal years which for
purposes of this calculation shall not be less than .35% or
such other percentage as may be from time to time agreed to
by the Cooperative and Statesman.
ADV = Average Total Delinquency Percentage Variance for Wholesale
Accounts.
AIC = the amount by which the anticipated interest charges for the
current month for borrowings relating to outstanding
Wholesale Accounts purchased by Statesman exceed the finance
charges anticipated to be collected during such month by
Statesman on Wholesale Accounts.
(5) Upon receipt of such payment, the Cooperative shall sell, assign, and
convey to Statesman and without any further action on its part, shall be deemed
to have sold, assigned and conveyed to Statesman each such Approved Wholesale
Account, and all of the Cooperative's interest in the goods represented by such
Wholesale Accounts and in all goods that may be returned by customers obligated
on such Wholesale Accounts, all its rights as an unpaid vendor or lienor, all
its rights of stoppage in transit, replevin and reclamation relating thereto,
all its rights in and to all security therefor and guarantees thereof, and
guarantees thereto, all of its rights against third parties with respect
thereto, and all other proceeds thereof, cash or non-cash. Any goods so
recovered or returned shall be segregated in a manner acceptable to Statesman
and held for Statesman's account as owner. The Cooperative shall notify
Statesman promptly of all such returned or recovered goods.
(6) Statesman may at any time and from time to time revoke the Statesman
Approval with respect to any customer of the Cooperative or reduce the amount of
Wholesale Accounts owing from such customer which it will purchase from the
Cooperative or change the Repayment Term approved for such customer. It will
promptly notify the Cooperative of its decision to revoke the Statesman Approval
for any Wholesale Account, or to reduce the amount of such Account or change
terms and Statesman shall not be obligated to purchase any Wholesale Account
arising out of the delivery of any merchandise to or the commencement of any
service for such obligor which occurs after such notice is given to the
Cooperative except as Statesman shall have otherwise agreed. The revocation or
alteration of the Statesman Approval with respect to a customer shall not affect
the right of the Cooperative to extend credit for merchandise or services to any
customer, but all payments received from such customer shall be applied to
earliest invoices first, and payments shall be applied to invoices included in
Wholesale Accounts purchased by Statesman before they are applied to invoices
arising after the revocation or alteration of the Statesman Approval with
respect to such customer or the reduction of the amount of credit approved for
such customer.
SECTION 4.04. WHOLESALE RESERVE ACCOUNT. Statesman shall place in a
reserve account (the "Wholesale Reserve Account") an amount not to exceed
one-eighth of one percent (0.125%) of the aggregate outstanding balance on each
invoice it elects to purchase, provided, however that in no event shall any
additional amount be deducted from the amount paid to the Cooperative under this
Article IV or placed in the Wholesale Reserve Account if the aggregate amount in
the Wholesale Reserve Account is equal to or greater than one quarter of one
percent (0.25%) of the aggregate unpaid balance of all Wholesale Accounts which
Statesman has purchased from the Cooperative (including the invoices being
purchased on such date). Funds in the Wholesale Reserve Account need not be
segregated from other funds of Statesman. If at the end of any fiscal year of
Statesman, the balance in the Wholesale Reserve Account after charges to the
Reserve Account as provided in Section 4.05 is greater than one-eighth of one
percent (0.125%) of the balance owing on Wholesale Accounts which Statesman has
purchased from the Cooperative, no Event of Default shall have occurred and be
continuing and no obligation of the Cooperative to Statesman is then due and
payable, Statesman will upon request of the Cooperative remit such excess to the
Cooperative.
SECTION 4.05. CHARGES TO WHOLESALE RESERVE ACCOUNT. Statesman may in its
sole and absolute discretion charge losses on Purchased Wholesale Accounts
related to Credit Risk as set forth in Section 4.06 against the Wholesale
Reserve Account. Statesman agrees to add to the Wholesale Reserve Account the
amount received as a recovery less associated collection costs on any purchased
Wholesale Accounts which were previously charged to the Wholesale Reserve
Account. Statesman shall notify the Cooperative promptly in writing of any such
reduction in the Wholesale Reserve Account. As of the end of each month,
Statesman will provide the Cooperative with a report of transactions in the
Wholesale Reserve Account during such month showing the balance in such account
as of the end of such month.
SECTION 4.06. CREDIT RISK. On all Purchased Wholesale Accounts, Statesman
agrees to assume any loss which is due solely to the financial inability of the
customer to pay at maturity (the "Credit Risk") unless the representation
contained in paragraph (l)(i) of Section 4.10 was not true at the time Statesman
purchased such Wholesale Account, provided the customer has received and
accepted the goods and/or services which gave rise to such Purchased wholesale
Account without any Dispute. The term "Dispute" shall mean any dispute,
deduction, claim, offset, defense or counterclaim of any kind, including,
without limitation, any dispute relating to goods or services already paid for
or relating to any obligation to the Cooperative other than the Wholesale
Account on which payment is being withheld.
SECTION 4.07. FACILITY FEE FOR PURCHASED WHOLESALE ACCOUNTS. The
Cooperative will pay to Statesman by the tenth Business Day of each month, or
such later day as may be agreed to by Statesman, a Facility Fee in such amount
as shall be agreed upon from time to time by the Cooperative and Statesman.
SECTION 4.08. PAYMENTS FROM THE COOPERATIVE. If any remittances on
Wholesale Accounts which have been purchased by Statesman are made directly to
the Cooperative, the Cooperative shall immediately deliver them to Statesman in
Richmond, Virginia, in precisely the form received, and until they are so
delivered they shall be held in trust by the Cooperative for the benefit of
Statesman.
SECTION 4.09. DISPUTES. The Cooperative will promptly notify Statesman of
and settle at the Cooperative's cost and expense, including attorneys' fees, all
Disputes relating to Wholesale Accounts which Statesman has purchased. However,
if any Dispute is not settled by the Cooperative within sixty days after the
invoice date or within such shorter period as Statesman may determine, Statesman
may settle, compromise or litigate such Dispute in Statesman's or the
Cooperative's name upon such terms as Statesman in Statesman's sole discretion
may deem advisable and for the Cooperative's account and risk. Statesman may
also at its discretion and without notice to the Cooperative take possession of
and sell any returned goods at such prices and upon such terms as Statesman
deems advisable. The Cooperative shall promptly pay to Statesman any deficiency,
and all costs and expenses, including attorneys' fees, resulting from any such
Dispute, and if the Cooperative fails to pay such amount, Statesman may deduct
it from any payment it is required to make to the Cooperative under the terms of
this Agreement.
SECTION 4.10. WARRANTIES.
(1) With respect to each Approved Wholesale Account which the Cooperative
offers to sell under this Article IV, the Cooperative warrants to Statesman
that:
(a) It has good title to such Wholesale Account, there is no
restriction on its sale and transfer and the sale and transfer thereof is
otherwise rightful;
(b) Such Wholesale Account is a binding obligation arising from the
sale of merchandise or the provision of a service by the Cooperative in the
ordinary course of business, as described in the invoice relating to such
transaction, to a person or entity specified therein as the obligor, arises out
of legally sufficient consideration, and constitutes the valid and legally
binding obligation of such obligor enforceable in accordance with its terms;
(c) No invoice has been materially altered;
(d) The obligor on such Wholesale Account has no defense, set off or
counterclaim against the Cooperative which is good against it;
(e) The conduct of the Cooperative in making the sale or sales out
of which such Wholesale Account arose was in all material respects in compliance
with all applicable laws and was not induced by fraud, false or misleading
representations or any other manner of unfair or deceptive trade practices or
other unlawful conduct;
(f) All credit information concerning the obligor on such Wholesale
Account was obtained and recorded in strict compliance with all applicable state
and federal laws, and the Cooperative has no reason to believe that any such
information is false, misleading or incomplete in any respect;
(g) All current credit information with respect to such obligor has
been accurately reported to Statesman;
(h) The terms and conditions of the agreement between the
Cooperative and the obligor with respect to such Wholesale Account, including
the Repayment Terms, are not materially different from those approved by
Statesman for such obligor, and the Cooperative has not amended or waived or
agreed to amend or waive any such term or condition or taken any other action
which might result in any constructive or implied waiver or modification
thereof;
(i) The Cooperative has no knowledge of any insolvency proceeding
involving the obligor on such Wholesale Account; and
(j) Such Wholesale Account is not subject to any claim, lien,
security interest, charge or other encumbrance in favor of any one other than
the Cooperative and Statesman, and the Cooperative has not offered such
Wholesale Account for sale to any purchaser other than Statesman.
(2) The Cooperative further represents and warrants that it is and shall
be solvent at the time of each sale of Wholesale Accounts.
SECTION 4.11. REMEDIES OF STATESMAN WITH RESPECT TO WHOLESALE ACCOUNTS
PURCHASED UNDER THE PROVISIONS OF THIS ARTICLE FOUR.
(1) Breach of Warranty. If any warranty made by the Cooperative under the
provisions of Section 4.10 of this Agreement shall prove to have been false in
any material respect as it relates to any Wholesale Account purchased by
Statesman, the Cooperative covenants and agrees promptly upon written demand by
Statesman to purchase such Wholesale Account for the net balance owing thereon,
including accrued interest, in immediately available funds. Statesman covenants
and agrees that upon receipt of such payment it will promptly transfer and
assign such Wholesale Account and all proceeds thereof to the Cooperative.
Statesman represents and warrants to the Cooperative with respect to each such
Wholesale Account it sells back to the Cooperative that the net balance paid to
it is the net balance owing on such Wholesale Account and that except as
disclosed in a writing at the time of such sale, Statesman has not released the
obligor thereon of its obligation thereunder, or consented to any reduction in
the amount owing thereon or the extension of the due date for any payment or
installment thereunder. Such transfer from Statesman to the Cooperative will be
without recourse and except as provided in the immediately preceding sentence,
without representation or warranty of any nature or type.
(2) Determination of Breach. For the purpose of determining whether or not
any warranty made by the Cooperative under the provisions of Section 4.10 was
false and that the Cooperative is therefore obliged to repurchase any Wholesale
Account, the Cooperative shall be bound by a written statement of an officer of
Statesman that in the reasonable judgment of Statesman it has determined that
any obligor under any Wholesale Account has refused to make any scheduled
payment under such contract because of any fact which has been represented as
otherwise by the Cooperative to Statesman under the provisions of Section 4.10
hereof.
SECTION 4.12. WHOLESALE ACCOUNTS WHICH ARE NOT APPROVED. Statesman may
from time to time purchase Wholesale Accounts other than Approved Wholesale
Accounts at such price as may from time to time be agreed to by the parties
hereto. Except for the price and the absence of any obligation of Statesman to
purchase such Wholesale Accounts, and to the extent the parties may otherwise
agree at the time of such sale, all aspects of such sales shall be similar to
the sales of Approved Wholesale Accounts.
SECTION 4.13. NOTICE TO OBLIGORS; STATEMENTS. Statesman may notify the
obligor on each Wholesale Account that Statesman purchases from the Cooperative
that such account has been purchased by Statesman and that all payments with
respect to such Wholesale Accounts and inquiries with respect thereto should be
addressed to Statesman at its address. Such notice may at the option of
Statesman be given in the name of the Cooperative or of Statesman. Thereafter,
Statesman will maintain the records with respect to each such account and send
appropriate statements to each obligor thereon.
ARTICLE V
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REPRESENTATIONS AND WARRANTIES
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To induce Statesman to purchase Receivables, Installment Sales Contracts,
Wholesale Accounts and Crop Time Notes from it and to make Loans to Customers of
the Cooperative, the Cooperative represents and warrants to Statesman as
follows:
SECTION 5.01. SUBSIDIARIES. The Cooperative has the following
Subsidiaries and none others:
Name of Subsidiary Percentage Owned by Cooperative
------------------ -------------------------------
AgriLand Exchange, Inc. 100%
Mountain State Greenhouses, Inc. 100%
SSC Insurance Agency, Inc. 100%
Southern States Holdings, Inc. 100%
Southern States Underwriters, Inc. 100%
Virginia Seed Service, Inc. 100%
Xxxxxx, Inc. 100%
SECTION 5.02. GOOD STANDING. Each of the Cooperative and its Subsidiaries
is a corporation organized and existing in good standing under the laws of its
respective jurisdiction of incorporation and each has the corporate power to own
its property and to carry on its business as now being conducted and is duly
qualified to do business and is in good standing in each jurisdiction in which
the character of the properties owned by it therein or in which the transaction
of its business makes such qualification necessary.
SECTION 5.03. CORPORATE AUTHORITY. The Cooperative has full power and
authority to enter into this Agreement, to sell Receivables, Approved Contracts,
Eligible Contracts, Wholesale Accounts and Crop Time Notes, to execute and
deliver Receivables Certificates and instruments conveying such Receivables,
contracts and notes, to endorse contracts and notes and to incur the obligations
provided for herein, all of which have been duly authorized by all proper and
necessary corporate action. No consent or approval of stockholders or of any
public authority is required as a condition to the validity of this Agreement or
the sale of any Receivable, Installment Sales Contract, Wholesale Account or
Crop Time Note.
SECTION 5.04. BINDING AGREEMENTS. This Agreement constitutes, and each
endorsement by the Cooperative of a Purchased Contract, when made and such
Purchased Contract is delivered pursuant hereto for value received, will
constitute, the valid and legally binding obligations of the Cooperative
enforceable against the Cooperative in accordance with its terms.
SECTION 5.05. LITIGATION. There are no proceedings pending or, so far as
the officers of the Cooperative know, threatened before any court or
administrative agency that, in the opinion of the officers of the Cooperative,
will materially adversely affect the financial condition or operations of the
Cooperative or any of its Subsidiaries.
SECTION 5.06. NO CONFLICTING AGREEMENTS. There is no charter, bylaw or
preference stock provision of the Cooperative or any of its Subsidiaries and no
provision of any existing mortgage, indenture, contract or agreement binding on
the Cooperative or any of its Subsidiaries or affecting their respective
properties that would conflict with or in any way prevent the execution,
delivery or carrying out of the terms of this Agreement or the sale or transfer
of any Receivable, Installment Sales Contract, Wholesale Account or Crop Time
Note.
SECTION 5.07. BALANCE SHEET. The consolidated balance sheet of the
Cooperative and its Subsidiaries as of June 30, 1998, and the related
consolidated statements of operations, patrons' equity and of cash flows for the
period then ended certified by PricewaterhouseCoopers L.L.P., and the unaudited
consolidated balance sheet of the Cooperative and its Subsidiaries as of
September 30, 1998, and the related statement of operations for the period then
ended, heretofore delivered to Statesman, are complete and correct and fairly
present the financial condition of the Cooperative and its Subsidiaries and the
results of their operations and transactions in their surplus accounts as of the
dates and for the periods referred to therein and have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the period involved. There are no liabilities, direct or
indirect, fixed or contingent of the Cooperative or any of its Subsidiaries as
of the dates of such balance sheets that are not reflected therein or in the
notes thereto. There has been no material adverse change in the financial
condition or operations of the Cooperative since the dates of those balance
sheets, and there has been no other material adverse change in the Cooperative.
SECTION 5.08. LICENSES. The Cooperative has all licenses necessary or
desirable for it to conduct its businesses as presently being conducted and such
businesses are in compliance with all applicable laws in all material respects.
SECTION 5.09. EMPLOYEE BENEFIT PENSION PLANS. No fact, including but not
limited to, any Reportable Event as defined in Section 4043 of ERISA, exists in
connection with any employee benefit pension plan of the Cooperative covered by
said Act, which might constitute grounds for the termination of any such plan by
the PBGC or for the appointment of any trustee to administer any such plan by
the appropriate United States District Court.
SECTION 5.10. RECEIVABLES FREE OF LIENS. Except as the Cooperative has
expressly disclosed to Statesmen in writing, no Receivable is subject to any
mortgage, pledge, security interest or other lien or encumbrance of any kind.
ARTICLE VI
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CONDITIONS
----------
The Cooperative will not offer to sell any Receivables, Installment Sales
Contracts, Wholesale Accounts or Crop Time Notes to Statesman unless:
SECTION 6.01. LEGAL MATTERS. It shall have satisfied any legal concerns
reported to the Cooperative by Statesman or its counsel with respect to the
purchase of any Receivable, Installment Sales Contract, Wholesale Account or
Crop Time Note.
SECTION 6.02. EVIDENCE OF CORPORATE ACTION. Statesman shall have received
certified copies of papers evidencing all corporate action taken by the
Cooperative to authorize this Agreement and the sale of Receivables, Installment
Sales Contracts, Wholesale Accounts and Crop Time Notes, and such other papers
as Statesman may reasonably require.
SECTION 6.03. REPRESENTATIONS AND WARRANTIES. Each of the representations
and warranties set forth in Article V hereof shall be true and correct as of the
date of such offer, except to the extent they relate solely to an earlier date.
SECTION 6.04. ABSENCE OF DEFAULTS. No Default or Event of Default shall
have occurred and be continuing.
SECTION 6.05. CERTIFICATE OF INCUMBENCY. The Cooperative shall have
delivered to Statesman in a form satisfactory to Statesman a list setting forth
the names and signatures of each officer or employee of the Cooperative who is
authorized to sign Receivables Certificates, to transfer Receivables and to
transfer and endorse Installment Sales Contracts and Crop Time Notes, together
with the signature of such person.
SECTION 6.06. FINANCING STATEMENTS. Statesman shall have received
receipted copies of financing statements in appropriate form and showing they
have been filed in the appropriate offices to satisfy the filing requirements of
the applicable Uniform Commercial Code relating to the sale of accounts.
SECTION 6.07. OPINION OF COUNSEL FOR THE COOPERATIVE. Statesman shall have
received a favorable written opinion of counsel for the Cooperative dated as of
the date of the first purchase of Receivables, Installment Sales Contracts or
Wholesale Accounts hereunder, and, if so requested by Statesman, annually
thereafter, as to all matters referred to in Article V, except Sections 5.07,
5.08 and 5.09, that financing statements in the appropriate form have been filed
in the appropriate offices in which to file financing statements for any
Receivables sold by the Cooperative and stating that as of the date of such
opinion the indices to financing statements in such offices do not disclose any
financing statements of record showing the Cooperative or any of its
Subsidiaries as debtor and including a description of any accounts, contract
rights, general intangibles or other rights to the payment of money of such
debtor.
SECTION 6.08. CREDIT STANDARDS. The Cooperative shall have delivered to
Statesman a written statement of its then current standards for extending credit
to its customers and its collection policy for Receivables, Installment Sales
Contracts, Wholesale Accounts and Crop Time Notes, together with any applicable
additions thereto, deletions therefrom or modifications thereof.
ARTICLE VII
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AFFIRMATIVE COVENANTS
---------------------
The Cooperative covenants and agrees with Statesman that so long as the
Cooperative may offer to sell Receivables, Installment Sales Contracts,
Wholesale Accounts or Crop Time Notes to Statesman hereunder and until payment
in full of all Purchased Receivables, Purchased Contracts, Purchased Wholesale
Accounts and Purchased Notes and performance of all other obligations of the
Cooperative hereunder, the Cooperative will:
SECTION 7.01. FINANCIAL STATEMENTS. Furnish to Statesman (i) as soon as
available, but in no event more than forty-five (45) days after the end of each
quarterly period in each of its fiscal years, a consolidated balance sheet of
the Cooperative and its Subsidiaries as of the close of such quarter and a
consolidated statement of operations to the close of such quarter, certified by
the chief financial officer of the Cooperative and accompanied by a certificate
of that officer stating whether any event has occurred that constitutes an Event
of Default hereunder or that would constitute such an Event of Default with the
giving of notice or the lapse of time, or both, and, if so, stating the facts
with respect thereto; (ii) as soon as available, but in no event more than
ninety (90) days after the close of each of the Cooperative's fiscal years, a
copy of the annual audit report of the Cooperative in reasonable detail,
substantially similar to the financial statements referred to in Section 5.07
above, prepared in accordance with generally accepted accounting principles
applied on a basis consistent with that of the preceding year and certified by
PricewaterhouseCoopers L.L.P. or other independent certified public accountants
of recognized national standing, which report shall include a consolidated
balance sheet of the Cooperative and its Subsidiaries as of the end of such
fiscal year, consolidated statements of operations, patrons' equity and of cash
flows for such fiscal year, accompanied by a certificate of said accountants
stating whether any event existed as of the end of such fiscal year that
constituted a Default or an Event of Default hereunder; (iii) promptly upon
their becoming available, copies of all financial statements, reports, notices,
and proxy statements sent by the Cooperative to patrons or stockholders and of
all regular, periodic and special reports or any registration statement filed by
the Cooperative or any of its Subsidiaries with any securities exchange or with
the Securities and Exchange Commission or any governmental authority succeeding
to any or all of the functions of the Securities and Exchange Commission; and
(iv) such additional information, reports, or statements, including interim
financial statements, as Statesman may from time to time reasonably request. The
Cooperative will also upon request permit Statesman and its agents to inspect
its books and records.
SECTION 7.02. TAXES. Pay and discharge all taxes, assessments, and
governmental charges upon it, its income, and its properties prior to the date
on which penalties are attached thereto, unless and to the extent only that such
taxes, assessments, and governmental charges shall be contested by it in good
faith and by appropriate proceedings, and the Cooperative shall have set aside
on its books adequate reserves with respect to any such tax, assessment or
charge so contested.
SECTION 7.03. BUSINESS PLAN. Furnish to Statesman as soon as available,
but in any event within 120 days after the Cooperative's new fiscal year, a copy
of the Cooperative's new fiscal year business plan which will contain, but not
be limited to, projected balance sheets, profit and loss statements, changes in
cash flow each prepared in accordance with generally accepted accounting
principles consistently applied, estimated usage of indebtedness, and
assumptions utilized in preparing the business plan.
SECTION 7.04. PAYMENT OF OBLIGATIONS. Pay and discharge at or before their
maturity all its indebtedness and other obligations and liabilities, except when
the same may be contested in good faith and by appropriate proceedings, and the
Cooperative shall have set aside on its books adequate reserves with respect to
any such obligation or liability.
SECTION 7.05. INSURANCE. Maintain adequate insurance with responsible
companies satisfactory to Statesman in such amounts and against such risks as is
customarily carried by owners of similar businesses and property.
SECTION 7.06. CORPORATE EXISTENCE, LICENSES, PERMITS, ETC. Maintain its
corporate existence in good standing and maintain all permits and licenses
necessary or desirable for the conduct of its business.
SECTION 7.07. PROPERTIES. Maintain, preserve, and protect all franchises
and trade names and preserve all the remainder of its property used or useful in
the conduct of its business and keep the same in good repair, working order, and
condition, and from time to time make or cause to be made all necessary and
proper repairs, renewals, replacements, betterments, and improvements thereto so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times, and permit Statesman and its agents to
enter upon and inspect such properties.
SECTION 7.08. EMPLOYEE BENEFIT PENSION PLANS. Promptly during each year,
pay contributions that in the judgment of the chief executive and chief
financial officers of the Cooperative after reasonable inquiry are believed
adequate to meet at least the minimum funding standards set forth in Sections
302 through 305 of ERISA, with respect to each employee benefit plan of the
Cooperative, if any, covered by that Act; file each annual report required to be
filed pursuant to Section 103 of ERISA in connection with each such plan for
each year; and notify Statesman within ten (10) days of the occurrence of a
Reportable Event (as defined in Section 4043 of ERISA) that might constitute
grounds for termination of any such plan by PBGC or for the appointment by the
appropriate United States District Court of a trustee to administer any such
plan, provided that nothing contained herein shall prohibit the Cooperative from
terminating any such plan if it has theretofore complied with the provisions of
this Section.
SECTION 7.09. COMPLIANCE WITH LAWS. The Cooperative shall not knowingly be
in violation of any laws, ordinances, governmental rules and regulations
(collectively "Laws") to which it is subject and will not knowingly fail to
obtain any licenses, permits, franchises or other governmental authorizations
necessary to the ownership of its property or to the conduct of its business,
which violation or failure to obtain might materially adversely affect the
business, profit, operations, or condition (financial or otherwise) of the
Cooperative, provided, however, that the Cooperative shall be deemed to have
complied with this provision so long as it is contesting in good faith and by
the appropriate proceedings the violation of any such law and has set aside on
its books adequate reserves in respect thereof, if so required, in accordance
with generally accepted accounting principles. Without limiting the foregoing,
the Cooperative agrees to comply, and to cause all persons occupying, leasing or
renting any properties of the Cooperative to comply with all laws relating to
environmental protection.
SECTION 7.10. RECORD RETENTION. Retain records of compliance with all
applicable consumer protection laws and the log of any complaints for the longer
of twenty-five (25) months or any time period required by applicable law.
SECTION 7.11. BOOKS AND RECORDS. Maintain complete and accurate books and
records with respect to all transactions with all account obligors of Purchased
Receivables and Purchased Wholesale Accounts and all parties obligated on
Purchased Contracts and Purchased Notes, including without limitation records of
all sales, deliveries, charges, payments, discounts, allowances and other
credits, make such records available for inspection by Statesman and its agents
at all reasonable times and upon request of Statesman deliver the same to
Statesman at its Headquarters.
SECTION 7.12. COOPERATION. The Cooperative will cooperate with Statesman
in all reasonable respects in collecting any Receivables, Installment Sales
Contracts or Wholesale Accounts or Crop Time Notes which Statesman has acquired
from the Cooperative, but nothing contained herein shall obligate the
Cooperative to incur any out of pocket expenses.
ARTICLE VIII
------------
NEGATIVE COVENANTS
------------------
The Cooperative covenants and agrees with Statesman that so long as the
Cooperative may offer to sell Receivables, Installment Sales Contracts,
Wholesale Accounts or Crop Time Notes to Statesman hereunder and until payment
in full of all Purchased Receivables, Purchased Contracts, Purchased Wholesale
Accounts and Purchased Notes and performance of all other obligations of the
Cooperative hereunder, without the written consent of Statesman, the Cooperative
will not:
SECTION 8.01. MORTGAGES AND PLEDGES. Create, incur, assume, or suffer to
exist any mortgage, pledge, lien, or other encumbrance of any kind upon, or any
security interest in, any of its property or assets, whether now owned or
hereafter acquired, except (i) liens for taxes not yet delinquent or being
contested in good faith and by appropriate proceedings; (ii) liens in connection
with workers' compensation, unemployment insurance, or other social security
obligations; (iii) deposits or pledges to secure bids, tenders, contracts (other
than contracts for the payment of money), leases, statutory obligations, surety
or appeal bonds, and other obligations of like nature arising in the ordinary
course of business; (iv) mechanic's, xxxxxxx'x, materialman's, landlord's,
carrier's, or other like liens arising in the ordinary course of business with
respect to obligations that are not due or that are being contested in good
faith; (v) those mortgages, pledges, liens, and encumbrances reflected in the
financial statements referred to in Section 5.07 above; (vi) mortgages, pledges,
liens, and encumbrances in favor of Statesman; (vii) zoning restrictions,
easements, licenses, restrictions on the use of real property or minor
irregularities in the title thereto, which do not, in the opinion of the
Cooperative, materially impair the use of such property in the operation of the
business of the Cooperative or the value of such property for the purposes of
such business; and (viii) any mortgage, encumbrance or other lien upon, or
security interest in, any property hereafter acquired by the Cooperative created
contemporaneously with such acquisition to secure or provide for the payment or
financing of any part of the purchase price thereof, or the assumption of any
mortgage, encumbrance or lien upon, or security interest in, any such property
hereafter acquired existing at the time of such acquisition, or the acquisition
of any such property subject to any mortgage, encumbrance or other lien or
security interest without the assumption thereof, provided that each such
mortgage, encumbrance, lien or security interest shall attach only to the
property so acquired and fixed improvements thereon. Nothing contained in this
Section 8.01 shall prohibit the Cooperative from entering into any lease
required to be capitalized by generally accepted accounting principles in
accordance with the Financial Accounting Standards Board Statement No. 13
(Accounting for Leases) in effect on the date of this Agreement, provided such
lease is not otherwise prohibited by the terms of this Agreement.
SECTION 8.02. MERGER, ACQUISITION OR SALE OF ASSETS. (1) Enter into any
merger or consolidation with, or acquire all or substantially all of the assets
of, any person, firm, joint venture, or corporation, unless the Cooperative is
the surviving corporation and upon the consummation of its merger the net worth
of the surviving corporation is not less than the net worth of the Cooperative
prior to the merger and there shall exist no Event of Default, provided,
however, that in the case of any merger of a Local Cooperative, as defined in
Article I - Section 1.01, the Cooperative's Chief Financial Officer shall
certify to Statesman Financial Corporation that the Cooperative has Net Worth in
an amount not less than 95% of the Net Worth of the Cooperative immediately
prior to such merger and no event shall have occurred or condition exist which
with the giving of notice or lapse of time, or both, would constitute such an
Event of Default, or (2) sell, lease, or otherwise dispose of all or
substantially all of its assets except in the ordinary course of its business.
SECTION 8.03. CHANGES IN NAME; LOCATION. Without giving Statesman at least
sixty (60) days prior written notice, change its name, its principal place of
business or the place in which it may keep its records relating to Receivables,
Installment Sales Contracts and Wholesale Accounts.
SECTION 8.04. AMENDMENT OF PAYMENT TERMS. Amend or modify any Purchased
Receivable, Purchased Contract or Purchased Wholesale Account or consent to the
extension of the time of any payment or release of any collateral securing the
obligation of the obligor or otherwise waive any term or condition of such
Purchased Receivable, Purchased Contract or Purchased Wholesale Account except
to the extent the Cooperative may deem appropriate to facilitate the ultimate
collection of such obligation.
SECTION 8.05. CREDIT STANDARDS; COLLECTION POLICY. Amend in any material
respect its standards for extending credit to its customers or its collection
policy for Receivables, Installment Sales Contracts, Wholesale Accounts and Crop
Time Notes; or make any other amendment or modification to such standards or
policy without having given Statesman not less than ten (10) days prior written
notice thereof.
ARTICLE IX
-----------
CONTRIBUTED CAPITAL PLAN
------------------------
SECTION 9.01. DEFINITIONS. As used in this Article the following terms
shall have the following definitions:
"Contributed Capital Rate" means the ratio of debt to tangible net worth
which institutional lenders extending credit to Statesman require it to maintain
from time to time, whether such ratio is stated as an affirmative or negative
covenant, and in the event Statesman is required to maintain different ratios on
different dates, "Contributed Capital Rate" means the ratio which is in effect
on the applicable TAPOS Determination Date.
"Determination Period" or "Determination Periods" means the calendar
month, the six calendar month period and the twelve calendar month period
immediately preceding the TAPOS Determination Date.
"Minimum Class A Investment" means the number of shares of Statesman Class
A Preferred Stock determined by Statesman as follows:
MI = (HT/(PV x R)) - RE
where
MI = Minimum Class A Investment (stated at the par value).
HT = the highest TAPOS computed for the Cooperative during any of
the three Determination Periods.
PV = the par value of one share of the Statesman Class A
Preferred Stock.
R = the Contributed Capital Rate, expressed as a decimal.
RE = As of the TAPOS Determination Date (x) the product of (i)
the percentage of the total outstanding common stock of
Statesman held by the Cooperative and (ii) the sum of
Statesman's Retained Earnings and Paid In Capital divided by
(y) the par value of Class A Preferred Stock.
If the Minimum Class A Investment computed using this formula is a
fraction, it will be rounded upward to the next whole number of shares.
"TAPOS" means calculated total program outstanding as determined by
Statesman for each of the three Determination Periods according to the following
formula:
TAPOS = RPP + NR + ISF + PN + WA + LN + CCR + L + NBC - SAP
where
RPP = average Purchased Receivables previously purchased and
outstanding during such Determination Period.
NR = Eligible Receivables tendered for purchase subsequent to the
end of the previous Determination Period.
ISF = average net Purchased Contracts outstanding during such
Determination Period.
PN = average net Purchased Notes outstanding during such
Determination Period.
WA = average net Purchased Wholesale Accounts outstanding during
such Determination Period.
LN = average Loans outstanding during such Determination Period.
CCR = average amount outstanding on accounts of customers of the
Cooperative, Local Cooperatives and Dealerships under the
Southern States Credit Card Program during such Determination
Period.
L = average Leases outstanding to the Cooperative, Local
Cooperatives, Dealerships and customers of any of them during
such Determination Period.
NBC = average investment (stated at par value) which Statesman was
required to maintain in CoBank ACB (formerly the National Bank
for Cooperatives) during such Determination Period in support
of Cooperative related borrowings.
SAP = average outstanding Class A Preferred Stock of Statesman
held by the Cooperative during such Determination Period
(stated at the par value).
In the computation for a Determination Period of one month, the amounts of
RPP, ISF, PN, WA, LN, CCR, L, NBC, TD and SAP as of the last Business Day of
such calendar month shall be used as the average for such month. In computations
for other Determination Periods, the average for each such amount shall be
computed using the outstanding amounts as of the last Business Day of each month
in such Determination Period.
"TAPOS Determination Date" means the date during each calendar month on
which the month-end calculation is made to determine the amount due.
SECTION 9.02. PURCHASE OF STOCK. Upon the delivery to Statesman of the
first Receivables Certificate hereunder the Cooperative will purchase Statesman
Class A Preferred Stock with such par value as will cause it to have a Minimum
Class A Investment in Statesman Class A Preferred Stock and on each TAPOS
Determination Date thereafter it will acquire such additional Statesman Class A
Preferred Stock if any as may be necessary for it to maintain a Minimum Class A
Investment.
SECTION 9.03. REDEMPTION OF CLASS A PREFERRED STOCK. Statesman covenants
and agrees that if on any TAPOS Determination Date the amount of Statesman Class
A Preferred Stock held by the Cooperative exceeds the Minimum Class A Investment
computed as of such date, it will, subject to the provisions of Section 9.04,
upon written demand by the Cooperative redeem for cash at its par value those
shares held by the Cooperative which are in excess of the Minimum Class A
Investment determined as of such date. The Cooperative covenants and agrees that
notwithstanding the provisions contained in paragraph (v) of subsection 5(b) of
Article II of the Articles of Incorporation of Statesman the Cooperative shall
not have any right to redeem shares held by it except as provided herein.
SECTION 9.04. CUMULATIVE OBLIGATIONS. The obligation of the Cooperative
hereunder to purchase Statesman Class A Preferred Stock shall be in addition to
any other undertaking the Cooperative may have entered into or may hereafter
enter into to purchase such stock as a result of Asset Based Financing or
Installment Sales Financing provided by Statesman to any Local Cooperative,
Independent Cooperative or Dealership of the Cooperative or any lease financing
by Statesman for the Cooperative, and the obligations of the Cooperative to
purchase Statesman Class A Preferred Stock under, or as a condition to, each
such financing arrangement shall be cumulative.
ARTICLE X
---------
EVENTS OF DEFAULT
-----------------
SECTION 10.01. Each of the following shall constitute an "Event of
Default" hereunder:
(a) Default shall be made in the payment of any amount payable
hereunder, when and as the same becomes due and payable, whether at the stated
maturity thereof or by acceleration or otherwise; or
(b) Default shall be made in the due observance or performance of
any other term, covenant, or agreement contained in this Agreement; or
(c) Any representation or warranty made by the Cooperative herein,
or in any Receivables Certificate or any statement or representation made in any
other certificate, report, or opinion delivered pursuant hereto shall prove to
have been incorrect in any material respect when made; or
(d) The Cooperative or any Subsidiary of the Cooperative shall
become insolvent or unable to meet its obligations as they mature, make an
assignment for the benefit of creditors, consent to the appointment of a trustee
or a receiver, or admit in writing its inability to pay its debts as they
mature; or
(e) A trustee or receiver shall be appointed for the Cooperative or
any Subsidiary of the Cooperative or for a substantial part of its properties
without the consent of the Cooperative or such Subsidiary and not be discharged
within thirty (30) days; or
(f) Bankruptcy, reorganization, arrangement, insolvency, or
liquidation proceedings shall be instituted by or against the Cooperative or any
Subsidiary of the Cooperative, and, if instituted against it, be consented to by
the Cooperative or such Subsidiary or remain undismissed for a period of thirty
(30) days; or
(g) Any default shall be made with respect to any obligation for the
payment of borrowed money of the Cooperative or any Subsidiary of the
Cooperative when due or the performance of any other obligation incurred in
connection with any indebtedness for borrowed money of the Cooperative or any
Subsidiary of the Cooperative, if the effect of such default is to accelerate
the maturity of such indebtedness; or
(h) Any final judgment for the payment of money in excess of ONE
HUNDRED THOUSAND DOLLARS ($100,000.00) which in the opinion of Statesman is not
adequately insured or indemnified against shall be rendered against the
Cooperative or any Subsidiary of the Cooperative and the same shall remain
undischarged for a period of thirty (30) days during which time execution shall
not be effectively stayed; or
(i) Any substantial part of the properties of the Cooperative or any
Subsidiary of the Cooperative shall be sequestered or attached and shall not
have been returned to the possession of the Cooperative or such Subsidiary or
released from such attachment within thirty (30) days; or
(j) The occurrence of a Reportable Event as defined in Section 4043
of ERISA which might constitute grounds for termination of any employee benefit
plan of the Cooperative or any Subsidiary of the Cooperative covered by ERISA by
PBGC or grounds for the appointment by the appropriate United States District
Court of a trustee to administer any such plan; or
(k) Complete or partial withdrawal under Section 4201 or 4204 of
ERISA from a Multiemployer Plan by any other party which is or may be required
under the provisions of ERISA to make a contribution to such Plan, except as a
result of the merger of such party with the Cooperative.
Upon the occurrence and continuation of any Event of Default, Statesman
may, by notice to the Cooperative take any or all of the following actions: (i)
terminate any obligation it may have to review any Receivables, Installment
Sales Contract, Wholesale Account or Crop Time Note tendered to it, (ii)
terminate any obligation it may otherwise have to purchase any Eligible
Receivable, any Approved Contract, any Eligible Contract, any Wholesale Account,
any Approved Note or any Eligible Note, (iii) terminate any obligation it may
have to repay to the Cooperative any part of the Reserve Account so long as any
Purchased Receivable shall remain unpaid, and (iv) terminate any obligation it
may have to repay to the Cooperative any part of the Wholesale Reserve Account
so long as any Purchased Wholesale Account shall remain unpaid.
ARTICLE XI
----------
MISCELLANEOUS
-------------
SECTION 11.01. INDEMNIFICATION.
(a) The Cooperative shall indemnify Statesman, its officers,
directors, agents and employees and hold them and each of them harmless from and
against all loss, cost, damage, and expense, including reasonable attorney fees,
at any time incurred:
(1) because of any liability of the Cooperative, Manufacturer,
or any other Person (other than Statesman) related to any merchandise which is
the subject of any sale or to any service performed or goods furnished by the
Cooperative, Manufacturer, or any other Person or entity in connection with any
sale out of which any Purchased Receivable, Purchased Contract, Purchased
Wholesale Account or Purchased Note arose, including, but not limited to,
services performed under any warranty or other agreement obligating the
Cooperative, Manufacturer, or other Person or entity to perform such services or
furnish goods; or
(2) because of any liability of the Cooperative for any action
at any time taken or not taken by the Cooperative.
(b) The Cooperative covenants and agrees to indemnify Statesman, its
officers, directors, agent and employees and hold them and each of them harmless
from and against all loss, cost, damage, and expense, including reasonable
attorneys' fees, at any time incurred by them or any of them because of any
violation of state or Federal law or regulation by the Cooperative or other
illegal or actionable conduct resulting from acts or omissions by the
Cooperative or its agents in connection with the sale of merchandise, providing
of services or extension of credit.
SECTION 11.02. NOTICES.
(a) By Statesman. In consideration of the Agreement of the
Cooperative to make a capital investment in Statesman based upon the amount of
asset based loans made by Statesman to customers of the Cooperative, Statesman
covenants and agrees to use its best efforts to notify the Cooperative promptly
in the event it terminates its agreement to extend asset based financing to any
Dealership of the Cooperative (as defined in the Agreement), if it gives any
notice to any such Dealership of any event of default under the terms of any
financing agreement between such Dealership and Statesman, if any such
Dealership defaults in the payment of any obligation for principal or interest
owing to Statesman and such default continues for a period of ten (10) days or
more, or if any officer of Statesman has knowledge that any condition exists or
event has occurred with respect to such Dealership which constitutes grounds for
the termination by Statesman of its financing arrangements with such Dealership
or which would constitute such grounds with the giving of notice or lapse of
time or both.
(b) By Cooperative. In consideration of the agreement by Statesman
to provide the Cooperative with such notices, the Cooperative covenants and
agrees it will promptly notify Statesman upon the occurrence of any of the
following events: the Cooperative puts any such Dealership on C.O.D. or
otherwise limits sales to such Dealership, or terminates any existing agreement
between the Cooperative and any such Dealership; any such Dealership makes any
material misrepresentation to the Cooperative; there is a material change in the
management or ownership of such Dealership; any material adverse change occurs
in the financial condition or operations of such Dealership; or if to the
knowledge of any executive officer of the Cooperative an event of default has
occurred under any agreement between any such Dealership and the Cooperative or
any condition exists or event has occurred which with the giving of notice or
lapse of time or both would constitute such an Event of Default.
SECTION 11.03. FAILURE TO RECORD SECURITY INSTRUMENT. No failure
(intentional or inadvertent) by Statesman to file any financing statement
relating to a security instrument (whether conditional sales contract, chattel
mortgage, or security agreement) contained in or arising out of any Eligible
Contract or any Receivable shall impair or void the obligations of the
Cooperative hereunder.
SECTION 11.04. TERMINATION. This Agreement may be terminated by either
party hereto by giving the other party ninety days (90) prior written notice of
such termination prior to any anniversary date of this Agreement. No such
termination shall affect any rights of the parties accruing up to the date of
final payment of all Purchased Contracts, Purchased Receivables, Purchased
Wholesale Accounts, Purchased Notes and Southern States Credit Card Program
outstandings previously purchased or relieve the Cooperative from ownership
requirements for Statesman Class A Preferred Stock as required in Section 9.02.
SECTION 11.05. SUCCESSORS. The covenants, representations, and agreements
herein set forth shall be binding upon the parties hereto and their successors
and assigns.
SECTION 11.06. AMENDMENTS, ETC. No amendment, modification, termination,
or waiver of any provision of this Agreement shall in any event be effective
unless the same shall be in writing and signed by Statesman, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 11.07. NOTICES, ETC. All notices and other communications
provided for under this Agreement shall be in writing and mailed, faxed,
telegraphed or delivered, if to the Cooperative at its address at:
SOUTHERN STATES COOPERATIVE, INCORPORATED
0000 XXXX XXXXX XXXXXX (ZIP 23230)
POST XXXXXX XXX 00000
XXXXXXXX, XXXXXXXX 00000
ATTENTION: XX. X. X. XXXXXXX
and if to Statesman, at its address at
STATESMAN FINANCIAL CORPORATION
0000 XXXX XXXXX XXXXXX (ZIP 23230)
XXXX XXXXXX XXX 00000
XXXXXXXX, XXXXXXXX 00000
ATTENTION: XX. XXXX X. XXXXXX
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party complying as to delivery with the terms
of this Section 11.07. All such notices and communications shall, when mailed,
be effective when deposited addressed as aforesaid.
SECTION 11.08. SEVERABILITY OF PROVISIONS. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 11.09. HEADINGS. Article and Section headings in this Agreement
are included in such Agreement for the convenience of reference only and shall
not constitute a part of the Agreement for any other purpose.
SECTION 11.10. GOVERNING LAW. This Agreement shall be construed in
accordance with and governed by the laws of the Commonwealth of Virginia.
SECTION 11.11. SURVIVAL. All warranties, representations and covenants
made by the Cooperative herein, or in any agreement referred to herein or on any
certificate, document or other instrument delivered by it or on its behalf under
this Agreement, shall be considered to have been relied upon by Statesman and
shall survive the delivery to Statesman of the Receivables, Purchased Contracts,
Purchased Wholesale Accounts and Purchased Notes purchased pursuant hereto
regardless of any investigation made by Statesman or on its behalf. All
statements in any such certificate or other instrument shall constitute
warranties and representations by the Cooperative hereunder. Except as otherwise
expressly provided herein, all covenants made by the Cooperative hereunder or
under any other agreement or instrument shall be deemed continuing until the
Purchased Contracts, Purchased Receivables, Purchased Wholesale Accounts and
Purchased Notes and all other liabilities and obligations of the Cooperative to
Statesman are satisfied in full.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers as of the date first above written.
SOUTHERN STATES COOPERATIVE,
INCORPORATED
ATTEST: By:
---------------------------------------
-------------------------- Title:
---------------------------------------
STATESMAN FINANCIAL CORPORATION
ATTEST: By:
-----------------------------------
------------------------------- Title:
---------------------------------
FIRST AMENDMENT
TO
REVOLVING CREDIT AGREEMENT
THIS FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT is made as of February
3, 1999 by and among SOUTHERN STATES COOPERATIVE, INCORPORATED (the "Company"),
COBANK, ACB in its individual capacity as a Bank and in its capacity as
Administrative Agent and Documentation Agent, FIRST UNION NATIONAL BANK, as a
Bank and in its capacity as Syndication Agent, NATIONSBANK, N.A., as a Bank and
in its capacity as Syndication Agent, FMB BANK, as a Bank, COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as a
Bank, BANQUE NATIONALE de PARIS (CHICAGO Branch), as a Bank, CRESTAR BANK, as a
Bank and in its capacity as Co-Agent, DG BANK DEUTSCHE GENOSSENSCHAFTSBANK AG
CAYMAN ISLANDS BRANCH, as a Bank, WACHOVIA BANK, N.A., as a Bank and in its
capacity as Co-Agent.
RECITALS
A. As of January 12, 1999, the Banks entered into a Revolving Credit
Agreement ("Credit Agreement") with the Company.
B. The parties hereto desire to amend the Credit Agreement to provide (i)
that certain indebtedness of the Company be excluded from the definition of
"Consolidated Funded Debt" set forth in the Credit Agreement and (ii) that the
Company be permitted to amend or modify certain terms and conditions of the
Goldkist Acquisition Agreement (as defined in the Credit Agreement), all as
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein, the parties hereto hereby agree as follows:
1. Definition of Consolidated Funded Debt. The definition of "Consolidated
Funded Debt" set forth in Section 1.01 of the Credit Agreement is amended and
restated in its entirety as follows:
"Consolidated Funded Debt" shall mean at any time, without
duplication, (1) all indebtedness or liability for borrowed money, or for
the deferred purchase price of property or services (excluding trade
obligations and accrued expenses), of the Company and its consolidated
Subsidiaries; (2) all obligations of the Company and its consolidated
Subsidiaries as lessee under Capital Leases; (3) all obligations of the
Company and its consolidated Subsidiaries under letters of credit; (4) all
obligations of the Company and its consolidated Subsidiaries arising under
bankers' or trade acceptance facilities; (5) all obligations of the
Company and its consolidated Subsidiaries secured by any Lien on property
owned by such Person, whether or not the obligations have been assumed,
and (6) all obligations of the Company and its consolidated Subsidiaries
under Guarantees. "Consolidated Funded Debt" shall not include (i) any
obligations of the Company to any of its customers under any of the
following programs of the Company, in each case, as in effect on the date
hereof (the "Programs"): "Payment Plus"; "Preferred Payment Plan";
"Deferred Payment Plan"; and "Prepayment Bonus Credit", provided, however,
that any reimbursement obligations of the Company or any of its
consolidated Subsidiaries in respect of any letters of credit issued in
connection with, or in support of the Company's obligations under, any of
the Programs, shall be included as "Consolidated Funded Debt" hereunder,
(ii) any junior subordinated debentures issued by the Company in
connection with the issuance of any Junior Preferred Securities, or (iii)
the principal balance outstanding under the Bridge Loan Agreement from
time to time."
2. Amendment to Section 6.10. Section 6.10 of the Credit Agreement
is amended and restated in its entirety as follows:
"SECTION 6.10. Prohibition on Amendment of Certain Agreements,
etc. (a) Consent to, or enter into, any instrument, document or agreement
which would result in the amendment, modification, waiver or termination
of all or any of the provisions of the GoldKist Commitment Letter, the
GoldKist Acquisition Agreement or the Rabobank Letter of Credit, provided,
that the Company may amend or modify those provisions of the Goldkist
Acquisition Agreement pertaining to the time periods and the methods for
resolving discrepancies in the final purchase price of the purchased
assets, (b) release GoldKist from any of its material obligations under
the GoldKist Commitment Letter and the GoldKist Acquisition Agreement (as
the same may be amended as permitted under subsection 6.10 (a) above), nor
shall the Company fail to perform any of its material obligations under
the GoldKist Commitment Letter and the GoldKist Acquisition Agreement (as
the same may be amended as permitted under subsection 6.10 (a) above), or
(c) consent to, or enter into, any instrument or agreement (other than the
Bridge Loan Amendment) which would result in the amendment, modification,
waiver or termination of all or any of the provisions of the Bridge Loan
Agreement, without the prior written consent of Banks, provided that
nothing in this Section 6.10 shall be construed as prohibiting (i) the
required repayment of the Company's obligations pursuant to the terms of
Sections 2.09 and 3.01(M) or (N) hereof and the Bridge Loan Agreement as
amended by the Bridge Loan Amendment, or making of any draw requests by
the Company under the Rabobank Letter of Credit, or (ii) any reduction in
the face amount of the Rabobank Letter of Credit so long as after giving
effect to any such reduction the face amount of such Letter of Credit
available for drawing is not less than (x) an amount equal to the purchase
price of the Junior Preferred Securities which Goldkist is then or
thereafter obligated to purchase pursuant to the Goldkist Commitment
Letter as in effect on the date hereof, or (y) the aggregate term loan
commitment of the lenders under the Bridge Loan Agreement as of the date
of any such proposed reduction."
3. Effective Date of Amendment. This Amendment shall become effective on
the date the Administrative Agent receives an original or facsimile copy of this
Amendment (or original or facsimile counterparts thereof) duly executed by the
Company and the Requisite Banks. Upon this Amendment becoming effective, the
Administrative Agent will notify each party hereto in writing and will provide
copies of all documentation in connection herewith.
4. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia.
5. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties to this Amendment in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
6. Confirmation. To the extent not expressly modified hereby, all terms
and conditions of the Credit Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
be executed by their respective officers thereunto duly authorized, as of the
date first written.
THE COMPANY:
SOUTHERN STATES COOPERATIVE, INCORPORATED
0000 Xxxx Xxxxx Xx.
By: /s/ Xxxxxxxx Xxxxxxx Xxxxxxxx, XX 00000
-------------------------- Fax: 000.000.0000
Title: Senior Vice President & Treasurer P.O. Box 25567
--------------------------------- Xxxxxxxx, XX 00000
E-mail Address:
THE AGENTS, LEAD ARRANGER AND BANKS:
COBANK, ACB, as Administrative Agent,
Documentation Agent and Bank 0000 X. Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Fax: 000-000-0000
By: /s/ Xxxx X. Xxxxxxxx P.O. Box 5110
----------------------------- Xxxxxx, XX 00000
Title: Vice President Attention: Xxxx X'Xxxxxxxx
--------------------------
(Signature Page for First Amendment to Southern States Cooperative Revolving
Credit Agreement dated as of January 12, 1999)
FIRST UNION NATIONAL BANK,
as Syndication Agent and Bank 0 Xxxxx 0xx Xxxxxx
Xxxxx Xxxxx, Mail Code XX-0000
Xxxxxxxx, XX 00000
By: /s/ Fax: (000) 000-0000
----------------------------------
Title: SVP
-------------------------------
(Signature Page for First Amendment to Southern States Cooperative Revolving
Credit Agreement dated as of January 12, 1999)
NATIONSBANK, N.A., as Syndication Agent
and Bank
---------------
---------------
---------------
---------------
By: /s/ Xxxxxxx X. Xxxxxxx Fax:
--------------------------------- -----------
Title: Vice President
------------------------------
(Signature Page for First Amendment to Southern States Cooperative Revolving
Credit Agreement dated as of January 12, 1999)
FMB BANK, 00 Xxxxx Xxxxxxx Xxxxxx
as Bank Mail Code 101-744
Xxxxxxxxx, XX 00000
Fax: 000-000-0000
By: /s/ Xxxxx Xxxxxx Xxxxxxxxxxx
----------------------------
Title: Vice President
--------------------------
(Signature Page for First Amendment to Southern States Cooperative Revolving
Credit Agreement dated as of January 12, 1999)
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH, as Bank
Funding and payment notices to:
By:/s/ Xxxx X. Breckhoven
-----------------------
Title: Vice President C/O Rabo Support Services, Inc.
------------------- 00 Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxx Xxxx, XX 00000
By: /s/ Attention: Corporate Services
---------------------- Fax: 000.000.0000
Title:
-------------------
All other notices:
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: 000.000.0000
(Signature Page for First Amendment to Southern States Cooperative Revolving
Credit Agreement dated as of January 12, 1999)
BANQUE NATIONALE de PARIS 000 Xxxxx XxXxxxx Xxxxxx
(XXXXXXX BRANCH), as Bank Xxxxxxx, XX 00000
Fax: 000-000-0000
By: /s/
----------------------------------
Title: Executive Vice President & General Manager
------------------------------------------
(Signature Page for First Amendment to Southern States Cooperative Revolving
Credit Agreement dated as of January 12, 1999)
CRESTAR BANK, 000 Xxxx Xxxx Xxxxxx, 00xx Floor
as Co-Agent and Bank Xxxxxxxx, XX 00000
Fax: 000-000-0000
By: /s/
--------------------------
Title: S.V.P.
----------------------
(Signature Page for First Amendment to Southern States Cooperative Revolving
Credit Agreement dated as of January 12, 1999)
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK
AG CAYMAN ISLANDS BRANCH, as Bank
By: /s/ Xxxx X. Xxxxxx 000 Xxxxxxxxx Xxxxxx, X.X. Xxxxx 0000
------------------ Xxxxxxx, XX 00000
Fax: 000-000-0000
Title: Vice President
--------------
By: /s/ Xxxxx X. Xxxxx, CPA
-----------------------
Title: Vice President
--------------------
(Signature Page for First Amendment to Southern States Cooperative Revolving
Credit Agreement dated as of January 12, 1999)
WACHOVIA BANK, N.A., 0000 Xxxx Xxxx Xxxxxx, 0xx Xxxxx
as Co-Agent and Bank Xxxxxxxx, XX 00000
Fax: 000-000-0000
Attention: Xxxxx Xxxxx
By: /s/ Xxxxxxxxxxx X. Xxxxx
-----------------------------
Title: Senior Vice President
---------------------------
(Signature Page for First Amendment to Southern States Cooperative Revolving
Credit Agreement dated as of January 12, 1999)
