Exhibit 4.1
EXECUTION COPY
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CREDIT AGREEMENT
dated as of
October 11, 2001
among
LAND O'LAKES, INC.,
as Borrower
The Lenders Party Hereto
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
---------------------------
X.X. XXXXXX SECURITIES INC.,
as Sole Lead Arranger and Bookrunner
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TABLE OF CONTENTS
ARTICLE I
Definitions
SECTION 1.01. Defined Terms.............................................................................1
SECTION 1.02. Classification of Loans and Borrowings...................................................28
SECTION 1.03. Terms Generally..........................................................................29
SECTION 1.04. Accounting Terms; GAAP...................................................................29
ARTICLE II
The Credits
SECTION 2.01. Commitments..............................................................................30
SECTION 2.02. Loans and Borrowings.....................................................................30
SECTION 2.03. Requests for Borrowings..................................................................31
SECTION 2.04. Funding of Borrowings....................................................................32
SECTION 2.05. Interest Elections.......................................................................32
SECTION 2.06. Termination and Reduction of Commitments.................................................34
SECTION 2.07. Repayment of Loans; Evidence of Debt.....................................................34
SECTION 2.08. Amortization of Term Loans...............................................................35
SECTION 2.09. Prepayment of Loans......................................................................37
SECTION 2.10. Fees.....................................................................................39
SECTION 2.11. Interest.................................................................................40
SECTION 2.12. Alternate Rate of Interest...............................................................41
SECTION 2.13. Increased Costs..........................................................................41
SECTION 2.14. Break Funding Payments...................................................................42
SECTION 2.15. Taxes....................................................................................43
SECTION 2.16. Payments Generally; Pro Rata Treatment;
Sharing of Set-offs......................................................................44
SECTION 2.17. Mitigation Obligations; Replacement of
Lenders..................................................................................46
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers.....................................................................47
SECTION 3.02. Authorization; Enforceability............................................................48
SECTION 3.03. Governmental Approvals; No Conflicts.....................................................48
SECTION 3.04. Financial Condition; No Material Adverse
Change...................................................................................48
SECTION 3.05. Properties...............................................................................49
SECTION 3.06. Litigation and Environmental Matters.....................................................50
SECTION 3.07. Compliance with Laws and Agreements......................................................50
SECTION 3.08. Investment and Holding Company Status....................................................51
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SECTION 3.09. Taxes....................................................................................51
SECTION 3.10. ERISA....................................................................................51
SECTION 3.11. Disclosure...............................................................................51
SECTION 3.12. Subsidiaries.............................................................................52
SECTION 3.13. Insurance................................................................................52
SECTION 3.14. Labor Matters............................................................................52
SECTION 3.15. Solvency.................................................................................52
ARTICLE IV
Conditions
SECTION 4.01. Effective Date...........................................................................53
SECTION 4.02. Each Credit Event........................................................................56
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements and Other
Information..............................................................................56
SECTION 5.02. Notices of Material Events...............................................................59
SECTION 5.03. Information Regarding Collateral.........................................................59
SECTION 5.04. Existence; Conduct of Business...........................................................60
SECTION 5.05. Payment of Obligations...................................................................60
SECTION 5.06. Maintenance of Properties................................................................60
SECTION 5.07. Insurance................................................................................61
SECTION 5.08. Casualty and Condemnation................................................................61
SECTION 5.09. Books and Records; Inspection and Audit
Rights...................................................................................61
SECTION 5.10. Compliance with Laws.....................................................................61
SECTION 5.11. Use of Proceeds..........................................................................62
SECTION 5.12. Additional Subsidiaries..................................................................62
SECTION 5.13. Further Assurances.......................................................................62
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness; Certain Equity Securities..................................................63
SECTION 6.02. Liens....................................................................................65
SECTION 6.03. Fundamental Changes......................................................................67
SECTION 6.04. Investments, Loans, Advances, Guarantees
and Acquisitions.........................................................................67
SECTION 6.05. Asset Sales..............................................................................69
SECTION 6.06. Sale and Leaseback Transactions..........................................................71
SECTION 6.07. Hedging Agreements.......................................................................71
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SECTION 6.08. Restricted Payments; Certain Payments of
Indebtedness.............................................................................71
SECTION 6.09. Transactions with Affiliates.............................................................73
SECTION 6.10. Restrictive Agreements...................................................................73
SECTION 6.11. Amendment of Material Documents..........................................................74
SECTION 6.12. Interest Expense Coverage Ratio..........................................................74
SECTION 6.13. Leverage Ratio...........................................................................74
ARTICLE VII
Events of Default
ARTICLE VIII
The Agent
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices..................................................................................81
SECTION 9.02. Waivers; Amendments......................................................................81
SECTION 9.03. Expenses; Indemnity; Damage Waiver.......................................................83
SECTION 9.04. Successors and Assigns...................................................................85
SECTION 9.05. Survival.................................................................................88
SECTION 9.06. Counterparts; Integration; Effectiveness.................................................89
SECTION 9.07. Severability.............................................................................89
SECTION 9.08. Right of Setoff..........................................................................90
SECTION 9.09. Governing Law; Jurisdiction; Consent to
Service of Process.......................................................................90
SECTION 9.10. WAIVER OF JURY TRIAL.....................................................................91
SECTION 9.11. Headings.................................................................................91
SECTION 9.12. Confidentiality..........................................................................91
SECTION 9.13. Interest Rate Limitation.................................................................92
SCHEDULES:
Schedule 1.01(a) -- Subsidiary Loan Parties
Schedule 1.01(b) -- Mortgaged Property
Schedule 2.01 -- Lenders
Schedule 3.05 -- Owned and Leased Real Property
Schedule 3.06 -- Disclosed Matters
Schedule 3.12 -- Subsidiaries
Schedule 3.13 -- Insurance
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.04 -- Existing Investments
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Schedule 6.05 -- Asset Sales
Schedule 6.10 -- Restrictive Agreements
EXHIBITS:
Exhibit A -- Form of Assignment and Acceptance
Exhibit B-1 -- Form of Opinion of Borrower's Outside Counsel
Exhibit B-2 -- Form of Opinion of Borrower's General Counsel
Exhibit B-3 -- Form of Opinion of Borrower's Local Counsel
Exhibit C -- Form of Mortgage
Exhibit D -- Guarantee and Collateral Agreement
Exhibit E -- Perfection Certificate
Exhibit F -- Form of Promissory Note
CREDIT AGREEMENT dated as of October 11,
2001 among LAND O'LAKES, INC., the LENDERS
party hereto, and THE CHASE MANHATTAN BANK,
as Administrative Agent.
The parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"Account Assets" means, collectively, with respect to Accounts
or CoBank Accounts (as defined in the Collateral Agreement), as the case may be,
all such Accounts or CoBank Accounts, together with (a) all right, title and
interest in and to all contracts that relate to any of such accounts; (b) all
security interests or liens and property subject thereto from time to time
purporting to secure payment of any of such accounts, whether pursuant to the
contracts related to such accounts or otherwise; (c) all UCC financing
statements covering any collateral securing payment of any of such accounts; (d)
all guarantees and other agreements or arrangements of whatever character from
time to time supporting or securing payment of any of such accounts whether
pursuant to the contracts related to any of such accounts or otherwise; (e) all
interest in the merchandise, goods, products or other property (including any
that is returned), if any, the sale of which gave rise to any of such accounts;
and (f) all proceeds of the foregoing.
"Acquisition" means (i) the contribution or loans by the
Borrower to a newly formed Wholly Owned Subsidiary ("Holding Co. II") of cash
sufficient to consummate the merger described in clause (ii) below; (ii) the
acquisition by Holding Co. II of all the issued and outstanding equity interests
of PMI, for cash in the approximate amount of $243,400,000, effected through a
merger of a newly formed Wholly Owned Subsidiary of Holding Co. II with and into
PMI in accordance with the terms of the Acquisition Documents; (iii) the
conversion of PMI and certain of its subsidiaries into limited liability
companies; and (iv) the contribution
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by Holding Co. II of its 100% membership interest in the converted PMI to
Farmland Feed in exchange for a membership interest in Farmland Feed, as a
result of which the Borrower will increase its percentage interest in Farmland
Feed (direct and indirect) from approximately 74% to 92%.
"Acquisition Documents" means the Agreement and Plan of Merger
dated as of June 17, 2001, between the Borrower, certain of its subsidiaries and
PMI, and any other agreement, instrument or other document to be entered into or
delivered by, between or among such parties and any of their respective
Affiliates in connection with the Acquisition, as each such agreement,
instrument or document may be amended, modified or supplemented from time to
time in accordance with the terms thereof or hereof.
"Adjusted LIBO Rate" means, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means The Chase Manhattan Bank, in its
capacity as administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"Agent" means, The Chase Manhattan Bank in its capacities as
Administrative Agent and Collateral Agent under the Loan Documents.
"Alternate Base Rate" means, for any day, a rate per annum
equal to the greater of (a) the Prime Rate in effect on such day, and (b) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in
the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Percentage" means, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's Commitment. If
the Commitments have
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terminated or expired, the Applicable Percentages shall be determined based upon
the respective amounts of the Lenders' outstanding Loans, giving effect to any
assignments.
"Applicable Rate" means, for any day with respect to (i) any
Eurodollar Tranche B Term Loan, 3.50% per annum, (ii) any ABR Tranche B Term
Loan, 2.50% per annum, and (iii) any Eurodollar Tranche A Term Loan, ABR Tranche
A Term Loan, Eurodollar Tranche C Term Loan or ABR Tranche C Term Loan, as the
case may be, the applicable rate per annum set forth below under the caption
"ABR Spread" or "Eurodollar Spread", as the case may be, based upon the ratings
by Moody's and S&P, respectively, applicable on such date to the Index Debt:
EURODOLLAR
TRANCHE A AND INDEX DEBT SPREAD
TRANCHE C TERM RATINGS (BPS PER ABR SPREAD
FACILITY (S&P/MOODY'S) ANNUM) (BPS PER ANNUM)
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Category 1 BBB/Baa2 or 2.00% 1.00%
better
Category 2 BBB-/Baa3 2.25% 1.25%
Category 3 BB+/Ba1 2.50% 1.50%
Category 4 BB/Ba2 or 2.75% 1.75%
below
For purposes of the foregoing, (i) if either Moody's or S&P
shall not have in effect a rating for the Index Debt (other than by reason of
the circumstances referred to in the last sentence of this definition), then
such rating agency shall be deemed to have established a rating of BB/Ba2 or
below; (ii) if the ratings established or deemed to have been established by
Moody's and S&P for the Index Debt shall fall within different Categories, the
Applicable Rate shall be based on the higher of the two ratings unless one of
the two ratings is two or more Categories lower than the other; in which case
the Applicable Rate shall be determined by reference to the Category next above
that of the lower of the two ratings; and (iii) if the ratings established or
deemed to have been established by Moody's and S&P for the Index Debt shall be
changed (other than as a result of a change in the rating system of Moody's or
S&P), such change shall be effective as of the date on which it is first
announced by the applicable rating agency. Each change in the Applicable Rate
shall apply during the period commencing on the effective date of such change
and ending on the date immediately preceding the
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effective date of the next such change. If the rating system of Moody's or S&P
shall change, or if either such rating agency shall cease to be in the business
of rating corporate debt obligations, the Borrower and the Lenders shall
negotiate in good faith to amend this definition to reflect such changed rating
system or the unavailability of ratings from such rating agency and, pending the
effectiveness of any such amendment, the Applicable Rate shall be determined by
reference to the rating most recently in effect prior to such change or
cessation.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.
"Attributable Debt" means, on any date, in respect of any
lease of the Borrower or any Restricted Subsidiary entered into as part of a
sale and leaseback transaction subject to Section 6.06, (i) if such lease is a
Capital Lease Obligation, the capitalized amount thereof that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP,
and (ii) if such lease is not a Capital Lease Obligation, the capitalized amount
of the remaining lease payments under such lease that would appear on a balance
sheet of such Person prepared as of such date in accordance with GAAP if such
lease were accounted for as a Capital Lease Obligation.
"Board" means the Board of Governors of the Federal Reserve
System of the United States of America.
"Borrower" means Land O'Lakes, Inc., a Minnesota
cooperative corporation.
"Borrowing" means Loans of the same Class and Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect.
"Borrowing Request" means a request by the Borrower for a
Borrowing in accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed; provided that, when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude
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any day on which banks are not open for dealings in dollar deposits in the
London interbank market.
"Capital Expenditures" means, for any period (without
duplication), (a) the additions to property, plant and equipment and other
capital expenditures of the Borrower and its consolidated Subsidiaries that are
(or would be) set forth in a consolidated statement of cash flows of the
Borrower for such period prepared in accordance with GAAP and (b) Capital Lease
Obligations incurred by the Borrower and its consolidated Subsidiaries during
such period.
"Capital Lease Obligations" of any Person means the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Capital Securities" means the trust preferred securities in
aggregate face amount of up to $200,000,000 issued on March 25, 1998, pursuant
to the Indenture dated as of March 25, 1998, between the Borrower and Wilmington
Trust Company.
"Change in Control" means the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission thereunder as in effect on the date hereof),
of membership interests representing more than 50% of the aggregate ordinary
voting power represented by all outstanding membership interests of the
Borrower.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender (or,
for purposes of Section 2.13(b), by any lending office of such Lender or by such
Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"Class", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans
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comprising such Borrowing, are Tranche A Term Loans, Tranche B Term Loans or
Tranche C Term Loans and, when used in reference to any Commitment, refers to
whether such Commitment is a Tranche A Commitment, Tranche B Commitment or a
Tranche C Commitment.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"CoBank" means CoBank, ACB, a federally chartered
instrumentality of the United States.
"CoBank Receivables Loan Agreement" means the Credit Agreement
dated as of October 11, 2001 between the Borrower and CoBank.
"Collateral" means any and all "Collateral", as defined in any
applicable Security Document.
"Collateral Agent" means The Chase Manhattan Bank in its
capacity as collateral agent for the Lenders under the Security Documents.
"Collateral Agreement" means the Guarantee and Collateral
Agreement among the Borrower, the Subsidiary Loan Parties and the Agent,
substantially in the form of Exhibit D.
"Collateral and Guarantee Requirement" means the requirement
that:
(a) the Agent shall have received from each Loan Party either
(i) a counterpart of the Collateral Agreement duly executed and
delivered on behalf of such Loan Party or (ii) in the case of any
Person that becomes a Loan Party after the Effective Date, a supplement
to the Collateral Agreement, in the form specified therein, duly
executed and delivered on behalf of such Loan Party;
(b) all outstanding Equity Interests in each Restricted
Subsidiary (other than any Restricted Subsidiary that is a
Securitization Vehicle) owned by or on behalf of any Loan Party shall
have been pledged pursuant to the Collateral Agreement (except that the
Loan Parties shall not be required to pledge more than 65% of the
outstanding voting Equity Interests of any Foreign Restricted
Subsidiary that is not a Loan Party) and the Agent shall have received
certificates or other instruments representing all such Equity
Interests,
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together with stock powers or other instruments of transfer with
respect thereto endorsed in blank;
(c) subject to Section 5.13(c), all Indebtedness of the
Borrower and each Subsidiary that is owing to any Loan Party shall be
evidenced by a promissory note and shall have been pledged pursuant to
the Collateral Agreement and the Agent shall have received all such
promissory notes, together with instruments of transfer with respect
thereto endorsed in blank; provided that no promissory note shall be
necessary in the case of Indebtedness owing by the Borrower to any
Restricted Subsidiary or by any Restricted Subsidiary to any other
Restricted Subsidiary or to the Borrower so long as such Indebtedness,
if ever represented by a promissory note, is pledged pursuant to the
Collateral Agreement.
(d) all documents and instruments, including Uniform
Commercial Code financing statements, required by law or reasonably
requested by the Agent to be filed, registered or recorded to create
the Liens intended to be created by the Collateral Agreement and
perfect such Liens to the extent required by, and with the priority
required by, the Collateral Agreement, shall have been filed,
registered or recorded or delivered to the Agent for filing,
registration or recording;
(e) the Agent shall have received (i) counterparts of a
Mortgage with respect to each Mortgaged Property duly executed and
delivered by the record owner of such Mortgaged Property, (ii) a policy
or policies of title insurance issued by a nationally recognized title
insurance company insuring the Lien of each such Mortgage as a valid
first Lien on the Mortgaged Property described therein, free of any
other Liens except as expressly permitted by Section 6.02, together
with such endorsements, coinsurance and reinsurance as the Agent or the
Required Lenders may reasonably request, and (iii) such surveys,
abstracts, appraisals, legal opinions and other documents as the Agent
or the Required Lenders may reasonably request with respect to any such
Mortgage or Mortgaged Property; and
(f) each Loan Party shall have obtained all consents and
approvals required to be obtained by it in connection with the
execution and delivery of all Security Documents to which it is a
party, the performance of its obligations thereunder and the granting
by it of the Liens thereunder.
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"Commitment" means a Tranche A Commitment, Tranche B
Commitment, Tranche C Commitment or any combination thereof (as the context
requires).
"Consolidated Cash Interest Expense" means, for any period,
the excess of (a) the sum (without duplication) of (i) the interest expense
(including imputed interest expense in respect of Capital Lease Obligations) of
the Borrower and the Restricted Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP, (ii) the amount of dividends paid in
respect of the Capital Securities during such fiscal period, plus (iii) any cash
payments made during such period in respect of obligations referred to in clause
(b)(iii) below that were amortized or accrued in a previous period, minus (b)
the sum (without duplication) of (i) interest income of the Borrower and the
Restricted Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP, (ii) to the extent included in such consolidated interest
expense for such period, non-cash amounts attributable to amortization of
financing costs paid in a previous period, plus (iii) to the extent included in
such consolidated interest expense for such period, non-cash amounts
attributable to amortization of debt discounts or accrued interest payable in
kind for such period.
"Consolidated EBITDA" means, for any period, Consolidated Net
Income for such period plus (a) without duplication and to the extent deducted
in determining such Consolidated Net Income, the sum of (i) consolidated
interest expense for such period, (ii) consolidated income tax expense for such
period, (iii) all amounts attributable to depreciation and amortization for such
period and (iv) all non-cash non-recurring charges during such period (it being
understood that charges shall be deemed non-cash charges until the period that
cash disbursements attributable to such charges are made, at which point such
charges shall be deemed cash charges), and minus (b) without duplication and to
the extent added to revenues in determining Consolidated Net Income for such
period, all non-cash nonrecurring gains during such period (it being understood
that non-cash nonrecurring gains shall be deemed non-cash gains until the period
that cash receipts attributable to such gains are received, at which point such
gains shall be deemed cash gains), all as determined on a consolidated basis
with respect to the Borrower and the Restricted Subsidiaries in accordance with
GAAP.
"Consolidated Net Income" means, for any period, the net
income or loss of the Borrower and the Restricted Subsidiaries for such period
determined on a consolidated
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basis in accordance with GAAP; it being understood that Consolidated Net Income
shall not include (a) the income or loss of any Subsidiary other than a
Restricted Subsidiary or other investment held by the Borrower or any Restricted
Subsidiary, except to the extent of the amount of dividends or other
distributions actually paid to the Borrower or any Restricted Subsidiary during
such period, and (b) the income or loss of any Person accrued prior to the date
it becomes a Restricted Subsidiary or is merged into or consolidated with the
Borrower or any Restricted Subsidiary or the date that such Person's assets are
acquired by the Borrower or any Restricted Subsidiary.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
"Default" means any event or condition which constitutes an
Event of Default or which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings
and the environmental matters disclosed in Schedule 3.06.
"dollars" or "$" refers to lawful money of the
United States of America.
"Effective Date" means the date on which the conditions
specified in Section 4.01 are satisfied (or waived in accordance with Section
9.02).
"Environmental Laws" means all laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation,
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use, handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.
"Equity Interests" means shares of capital stock, interests in
a cooperative corporation, partnership interests, membership interests in a
limited liability company, beneficial interests in a trust (other than any trust
subject to ERISA or non-qualified pension benefit plans) or other equity
ownership interests in a Person.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Borrower or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
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"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in
Article VII.
"Excess Cash Flow" means, in respect of any fiscal year, the
sum (without duplication) of:
(a) Consolidated Net Income (or loss) for such fiscal year,
adjusted to exclude any gains or losses attributable to Prepayment
Events; plus
(b) depreciation, amortization and other non-cash charges or
losses deducted in determining such Consolidated Net Income (or loss)
for such fiscal year; plus
(c) the sum of (i) the amount, if any, by which Net Working
Capital decreased during such fiscal year plus (ii) the net amount, if
any, by which the consolidated deferred revenues of the Borrower and
the Restricted Subsidiaries increased during such fiscal year; minus
(d) the sum of (i) any non-cash gains included in determining
such Consolidated Net Income (or loss) for such fiscal year plus (ii)
the amount, if any, by which Net Working Capital increased during such
fiscal year plus (iii) the net amount, if any, by which the
consolidated deferred revenues of the Borrower and the Restricted
Subsidiaries decreased during such fiscal year; minus
(e) the sum of (i) Capital Expenditures for such fiscal year
(except to the extent attributable to the incurrence of Capital Lease
Obligations or otherwise financed by incurring Long-Term Indebtedness)
plus (ii) cash consideration paid during such fiscal year to make
acquisitions (except to the extent financed by incurring Long-Term
Indebtedness); minus
(f) the aggregate principal amount of Long-Term Indebtedness
permanently repaid or prepaid by the Borrower and the Restricted
Subsidiaries during such fiscal year, excluding, (i) Term Loans prepaid
pursuant to Section 2.09(b) or (c), (ii) repayments of revolving credit
indebtedness to the extent such amounts could be reborrowed under
revolving credit facilities, and
12
(iii) repayments or prepayments of Long-Term Indebtedness financed by
incurring other Long-Term Indebtedness; minus
(g) the aggregate principal amount of all cash payments of
patronage dividends, revolvements, redemptions and similar restricted
payments, in each case other than any such payments prohibited by this
Agreement.
"Excluded Taxes" means, with respect to the Administrative
Agent, any Lender or any other recipient of any payment to be made by or on
account of any obligation of the Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction described in clause (a) above and (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Borrower
under Section 2.17(b)), any withholding tax that (i) is in effect and would
apply to amounts payable to such Foreign Lender at the time such Foreign Lender
becomes a party to this Agreement (or designates a new lending office), except
to the extent that such Foreign Lender (or its assignor, if any) was entitled,
at the time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to any withholding tax
pursuant to Section 2.15(a), or (ii) is attributable to such Foreign Lender's
failure to comply with Section 2.15(e).
"Existing Five-Year Credit Agreement" means the Borrower's
Amended and Restated Five-Year Credit Agreement, dated as of June 28, 1999,
among the Borrower, the lenders party thereto and The Chase Manhattan Bank as
syndication agent and CoBank, ACB as administrative agent.
"Existing 364-Day Credit Agreement" means the Borrower's
364-Day Credit Agreement dated as of June 25, 2001, among the Borrower, the
lenders party thereto and The Chase Manhattan Bank as syndication agent and
CoBank, ACB as administrative agent.
"Farmland Feed" means Land O' Lakes Farmland Feed LLC.
13
"Federal Funds Effective Rate" means, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"Financial Officer" means the chief financial officer,
principal accounting officer, treasurer or controller of the Borrower.
"Financing Transactions" means (a) the execution, delivery and
performance by each Loan Party of the Loan Documents to which it is to be a
party, the borrowing of Loans and of the loans under the Related Credit Facility
and the use of the proceeds thereof and (b) the execution, delivery and
performance by each Loan Party of the Senior Notes Documents to which it is to
be a party, the issuance of the Senior Notes and the use of the proceeds
thereof.
"Foreign Lender" means any Lender that is organized under the
laws of a jurisdiction other than that in which the Borrower is located. For
purposes of this definition, the United States of America, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"Foreign Subsidiary" means any Subsidiary that is organized
under the laws of a jurisdiction other than the United States of America or any
State thereof or the District of Columbia.
"GAAP" means generally accepted accounting principles in the
United States of America.
"Governmental Authority" means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the
14
guarantor guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation of any other Person (the "primary obligor") in
any manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other obligation or
to purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness or other obligation
of the payment thereof, (c) to maintain working capital, equity capital or any
other financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation or (d)
as an account party in respect of any letter of credit or letter of guaranty
issued to support such Indebtedness or obligation; provided, that the term
Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business.
"Hazardous Materials" means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
"Hedging Agreement" means any interest rate protection
agreement, foreign currency exchange agreement, commodity price protection
agreement or other interest or currency exchange rate or commodity price hedging
arrangement.
"Indebtedness" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not
15
the Indebtedness secured thereby has been assumed, (g) all Guarantees by such
Person of Indebtedness of others, (h) all Capital Lease Obligations of such
Person, (i) all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of credit and letters of guaranty, (j) all
obligations, contingent or otherwise, of such Person in respect of bankers'
acceptances, and (k) all obligations in respect of Third Party Securities issued
by such Person in Securitizations (regardless of whether denominated as equity
or debt securities). The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such Person
is a general partner) to the extent such Person is liable therefor as a result
of such Person's ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness provide that such Person is
not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Index Debt" means senior, secured, long-term indebtedness for
borrowed money of the Borrower under this Agreement or the Related Credit
Facility.
"Information Memorandum" means the Confidential Information
Memorandum dated July, 2001 relating to the Borrower and the Transactions.
"Interest Election Request" means a request by the Borrower to
convert or continue a Borrowing in accordance with Section 2.05.
"Interest Payment Date" means (a) with respect to any ABR
Loan, the last day of each March, June, September and December and (b) with
respect to any Eurodollar Loan, the last day of the Interest Period applicable
to the Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months' duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months' duration after the first day of such Interest Period.
"Interest Period" means, with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the Borrower may elect; provided, that (a) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended
16
to the next succeeding Business Day unless such next succeeding Business Day
would fall in the next calendar month, in which case such Interest Period shall
end on the next preceding Business Day and (b) any Interest Period that
commences on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the last calendar month of such
Interest Period) shall end on the last Business Day of the last calendar month
of such Interest Period. For purposes hereof, the date of a Borrowing initially
shall be the date on which such Borrowing is made and thereafter shall be the
effective date of the most recent conversion or continuation of such Borrowing.
"Joint Venture" means any entity in respect of which the
Borrower or a Restricted Subsidiary owns significant Equity Interests and
actively participates in significant business decisions, which, in any case, is
not a Wholly Owned Subsidiary.
"Lenders" means the Persons listed on Schedule 2.01 and any
other Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.
"Leverage Ratio" means, on any date, the ratio of (a) Total
Indebtedness as of such date to (b) Consolidated EBITDA for the most recent
period of four consecutive fiscal quarters of the Borrower ended on or prior to
such date.
"LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, the rate appearing on Page 3750 of the Telerate Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m.,
17
London time, two Business Days prior to the commencement of such Interest
Period.
"Lien" means, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset, (b) the interest of a vendor or a lessor under
any conditional sale agreement, capital lease or title retention agreement (or
any financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan Documents" means this Agreement, the Collateral
Agreement and the other Security Documents.
"Loan Parties" means the Borrower and the Subsidiary Loan
Parties.
"Loans" means the loans made by the Lenders to the Borrower
pursuant to this Agreement.
"LOL Finance" means LOL Finance Co., a Wholly Owned Subsidiary
of the Borrower.
"Long-Term Indebtedness" means any Indebtedness that, in
accordance with GAAP, constitutes (or, when incurred, constituted) a long-term
liability.
"Material Adverse Effect" means a material adverse effect on
(a) the business, operations, assets, properties, liabilities or condition,
financial or otherwise, of the Borrower and the Subsidiaries, taken as a whole,
or, prior to consummation of the Acquisition, of PMI and its Subsidiaries, taken
as a whole, (b) the ability of the Loan Parties, taken as a whole, to perform
any of their material obligations under any Loan Document or (c) the rights of
or benefits available to the Lenders under any Loan Document.
"Material Indebtedness" means Indebtedness (regardless of
amount) under the Related Credit Facility and other Indebtedness (other than the
Loans and all Indebtedness issued by a Securitization Vehicle), or obligations
in respect of one or more Hedging Agreements, of any one or more of the Borrower
and its Restricted Subsidiaries in an aggregate principal amount exceeding
$10,000,000. For purposes of determining Material Indebtedness, the "principal
amount" of the obligations of the Borrower or any Restricted Subsidiary in
respect of any Hedging Agreement at any time shall be the maximum aggregate
18
amount (giving effect to any netting agreements) that the Borrower or such
Restricted Subsidiary would be required to pay if such Hedging Agreement were
terminated at such time.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Mortgage" means a mortgage, deed of trust, assignment of
leases and rents, leasehold mortgage or other security document granting a Lien
on any Mortgaged Property to secure the Obligations. Each Mortgage shall be
reasonably satisfactory in form and substance to the Collateral Agent.
"Mortgaged Property" means, initially, each parcel of real
property and the improvements thereto owned by a Loan Party and identified on
Schedule 1.01(b), and includes each other parcel of real property and
improvements thereto with respect to which a Mortgage is granted pursuant to
Section 5.12 or 5.13.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Patronage Income" means net earnings of the Borrower from
member-patron business, reduced by an amount equal to such percentage from zero
to 15% as determined by the Board of Directors in advance of the beginning of
each fiscal year.
"Net Proceeds" means, with respect to any event (a) the cash
proceeds received in respect of such event including (i) any cash received in
respect of any non-cash proceeds, but only as and when received, (ii) in the
case of a casualty, insurance proceeds, and (iii) in the case of a condemnation
or similar event, condemnation awards and similar payments, net of (b) the sum
of (i) all reasonable fees and out-of-pocket expenses paid by the Borrower and
the Restricted Subsidiaries to third parties (other than Affiliates) in
connection with such event (including, without limitation, in the case of the
issuance of Indebtedness, underwriting discounts and commissions), (ii) in the
case of a sale, transfer or other disposition of an asset (including pursuant to
a sale and leaseback transaction or a casualty or a condemnation or similar
proceeding), the amount of all payments required to be made by the Borrower and
the Restricted Subsidiaries as a result of such event to repay Indebtedness
(other than Loans) secured by such asset or otherwise subject to mandatory
prepayment as a result of such event, and (iii) the amount of all taxes paid (or
reasonably estimated to be payable) by the Borrower and the Restricted
Subsidiaries, and the amount
19
of any reserves established by the Borrower and the Restricted Subsidiaries to
fund contingent liabilities reasonably estimated to be payable, in each case
during the year that such event occurred or the next succeeding year and that
are directly attributable to such event (as determined reasonably and in good
faith by the chief financial officer of the Borrower). Notwithstanding the
foregoing, in the case of a Prepayment Event referred to in clause (d) of the
definition of "Prepayment Event", the Borrower and the Restricted Subsidiaries
will be deemed at the time of any issuance by the relevant Securitization
Vehicle of Third Party Securities to have received Net Proceeds in an amount
equal to the Net Proceeds to the Securitization Vehicle from such issuance of
Third Party Securities and will not be deemed to have received Net Proceeds in
connection with ongoing sales of accounts receivable (including Account Assets)
or inventory to such Securitization Vehicle that are purchased by it with the
proceeds from collections of receivables or from ordinary course sales of
inventory, in each case previously purchased by it pursuant to such
Securitization.
"Net Working Capital" means, at any date, (a) the consolidated
current assets of the Borrower and the Restricted Subsidiaries as of such date
(excluding cash and Permitted Investments) minus (b) the consolidated current
liabilities of the Borrower and the Restricted Subsidiaries as of such date
(excluding current liabilities in respect of Indebtedness). Net Working Capital
at any date may be a positive or negative number. Net Working Capital increases
when it becomes more positive or less negative and decreases when it becomes
less positive or more negative.
"Obligations" means (a) the due and punctual payment by the
Borrower of (i) the principal of and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise and (ii) all other monetary
obligations of the Borrower to any of the Secured Parties (as defined in the
Collateral Agreement) under the Collateral Agreement or this Agreement and each
of the other Loan Documents, including fees, costs, expenses and indemnities,
whether primary, secondary, direct, contingent, fixed or otherwise (including
monetary obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), (b) the due and punctual performance of all other
obligations of the
20
Borrower under or pursuant this Agreement and each of the other Loan Documents,
(c) the due and punctual payment and performance of all the obligations of each
other Loan Party under or pursuant to this Agreement and each of the other Loan
Documents and (d) the due and punctual payment and performance of all
obligations of each Loan Party under each Hedging Agreement that (i) is in
effect on the Effective Date with a counterparty that is a Lender or an
Affiliate of a Lender as of the Effective Date or (ii) is entered into after the
Effective Date with any counterparty that is a Lender or an Affiliate of a
Lender at the time such Hedging Agreement is entered into.
"Other Taxes" means any and all present or future recording,
stamp, documentary, excise, transfer, sales, property or similar taxes, charges
or levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
"PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA and any successor entity performing similar functions.
"Perfection Certificate" means a certificate in the form of
Exhibit E or any other form approved by the Collateral Agent.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are
being contested in compliance with Section 5.05;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the
ordinary course of business and securing obligations that are not
overdue by more than 30 days or are being contested in compliance with
Section 5.05;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment
insurance and other social security laws or regulations;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case
in the ordinary course of business;
21
(e) judgment liens in respect of judgments that do not
constitute an Event of Default under clause (k) of Article VII; and
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do
not materially adversely affect the value of the property, taken as a
whole, or interfere with the ordinary conduct of business of the
Borrower or any Restricted Subsidiary;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America),
in each case maturing within one year from the date of acquisition
thereof;
(b) investments in commercial paper maturing within 270 days
from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from
Xxxxx'x;
(c) investments in certificates of deposit, banker's
acceptances and time deposits (provided that such certificates of
deposit, banker's acceptances and time deposits are rated at least A by
S&P or at least A2 by Xxxxx'x) maturing within 180 days from the date
of acquisition thereof issued or guaranteed by or placed with any
domestic office of any commercial bank organized under the laws of the
United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than
$500,000,000;
(d) fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria
described in clause (c) above; and
(e) shares of money market mutual or similar funds
which invest exclusively in assets satisfying the
22
requirements of clauses (a) through (d) of this definition.
"Person" means any natural person, corporation, limited
liability company, trust, joint venture, association, cooperative association,
company, partnership, Governmental Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"PMI" means Purina Xxxxx, Inc., a Delaware corporation, and
any successor company to PMI as a result of the Acquisition or related
transactions, including any transferee of substantially all the assets of PMI.
"Prepayment Event" means:
(a) any sale, transfer or other disposition (including
pursuant to a Sale-Leaseback Transaction) of any property or asset of
the Borrower or any Restricted Subsidiary (including any Equity
Interest in a Subsidiary or Joint Venture) and any return of capital to
the Borrower or any Restricted Subsidiary of all or any portion of its
investment in any Joint Venture, other than (i) dispositions described
in clauses (a), (b), (c), (f), (g) and (h) of Section 6.05, (ii)
transactions referred to in clause (d) below, which shall not be deemed
to be Prepayment Events under this clause (a), and (iii) other
dispositions (except Securitizations) resulting in aggregate Net
Proceeds not exceeding $5,000,000 during any fiscal year of the
Borrower;
(b) any casualty or other insured damage to, or any taking
under power of eminent domain or by condemnation or similar proceeding
of, any property or asset of the Borrower or any Subsidiary Loan Party,
but only to the extent that the Net Proceeds therefrom have not been
applied to repair, restore or replace such property or asset within 270
days after such event;
(c) the receipt by the Borrower or any Subsidiary Loan Party
of any dividend or distribution from any Joint Venture that is
designated or otherwise identifiable as a dividend or distribution of
any
23
portion of the proceeds to such Joint Venture (or subsidiary thereof)
of a sale or disposition of any of its assets or properties, a casualty
or condemnation affecting its assets or properties or any similar event
or of the issuance of any Equity Interest in such Joint Venture to a
person other than the Borrower or a Restricted Subsidiary;
(d) any sale, transfer or other disposition of inventory or
accounts receivable (including Account Assets) in a Securitization or
the issuance by a Securitization Vehicle that is a Restricted
Subsidiary of any Third Party Securities (except to the extent the Net
Proceeds thereof are used to refinance outstanding Third Party
Securities of such Securitization Vehicle); or
(e) until such time as the Tranche C Term Loans have been paid
in full, the incurrence by the Borrower or any Restricted Subsidiary of
(i) Net Proceeds in an amount of up to $250,000,000 from the issuance
of the Senior Notes or (ii) Net Proceeds from the incurrence of any
other Indebtedness other than Indebtedness permitted by Section
6.01(a).
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by The Chase Manhattan Bank as its prime rate in
effect at its principal office in New York City; each change in the Prime Rate
shall be effective from and including the date such change is publicly announced
as being effective.
"Register" has the meaning set forth in Section 9.04.
"Related Credit Facility" means the Borrower's Amended and
Restated Five-Year Credit Agreement dated as of June 28, 1999, as amended and
restated as of the date of this Agreement.
"Related Parties" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having Term
Loans (or, prior to the Effective Date, Commitments) representing more than 50%
of the sum of the outstanding Term Loans (or, prior to the Effective Date,
Commitments) at such time.
24
"Restricted Payment" means any dividend or other distribution
(whether in cash, securities or other property, but other than a dividend or
distribution in respect of the Capital Securities), including any cash patronage
refunds, redemptions or revolvements to patrons or members, with respect to any
shares of any class of capital stock or other Equity Interest of, or cooperative
membership interest or accounts with, the Borrower or any Restricted Subsidiary,
or any payment (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
revolvement, acquisition, cancelation or termination of any such shares of
capital stock, other equity interest or cooperative membership interest of the
Borrower or any option, warrant or other right to acquire any such shares of
capital stock, other Equity Interest or cooperative membership interest of the
Borrower.
"Restricted Subsidiaries" means (i) Farmland Feed and (ii)
each existing and subsequently acquired or organized domestic and foreign direct
or indirect Wholly Owned Subsidiary of the Borrower, Farmland Feed or PMI.
"S&P" means Standard & Poor's.
"Sale-Leaseback Transaction" means any arrangement whereby the
Borrower or a Restricted Subsidiary shall sell or transfer any property, real or
personal, used or useful in its business, whether now owned or hereinafter
acquired, and thereafter rent or lease such property or other property that it
intends to use for substantially the same purpose or purposes as the property
sold or transferred; provided that any such arrangement entered into within 90
days after the acquisition, construction or substantial improvement of the
subject property shall not be deemed to be a "Sale-Leaseback Transaction".
"Securitization" means the transfer and sale by the Borrower
or the Restricted Subsidiaries of accounts receivable (including Account Assets)
or inventory to a special purpose trust, partnership, limited liability company
or similar entity formed for the purpose of acquiring and financing such assets
(a "Securitization Vehicle"), which Securitization Vehicle finances the
acquisition of such assets (i) with proceeds from the issuance of Third Party
Securities, (ii) with Sellers' Retained Interests and (iii) with proceeds from
the sale or collection of accounts receivable (including Account Assets) or
inventory previously purchased by such Securitization Vehicle.
25
"Securitization Vehicle" means a special purpose trust,
partnership, limited liability company or similar entity formed at the direction
of the Borrower for the purpose of effecting one or more Securitizations which,
in connection therewith, issues Third Party Securities.
"Security Documents" means the Collateral Agreement, the
Mortgages and each other security agreement or other instrument or document
executed and delivered pursuant to Section 5.12 or 5.13 to secure any of the
Obligations.
"Sellers' Retained Interests" means the debt or equity
interests held by the Borrower or any Restricted Subsidiary in a Securitization
Vehicle to which accounts receivable (including Account Assets) or inventory of
the Borrower and the Restricted Subsidiaries have been transferred in a
Securitization, including any such debt or equity received in consideration for
the assets transferred.
"Senior Notes" means the unsecured Senior Notes to be issued
by the Borrower in the aggregate principal amount of up to $300,000,000 and the
Indebtedness represented thereby.
"Senior Note Documents" means the indenture under which the
Senior Notes are issued and all other instruments, agreements and other
documents evidencing or governing the Senior Notes or rights in respect thereof.
"Statutory Reserve Rate" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate (without duplication) of the maximum
reserve percentages (including any marginal, special, emergency or supplemental
reserves) expressed as a decimal established by the Board to which the
Administrative Agent is subject for eurocurrency funding (currently referred to
as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"subsidiary" means, with respect to any Person (the "parent")
at any date, any corporation, limited
26
liability company, partnership, association or other entity the accounts of
which would be consolidated with those of the parent in the parent's
consolidated financial statements if such financial statements were prepared in
accordance with GAAP as of such date, as well as any other corporation, limited
liability company, partnership, association or other entity (a) of which
securities or other ownership interests representing more than 50% of the equity
or more than 50% of the ordinary voting power or, in the case of a partnership,
more than 50% of the general partnership interests are, as of such date, owned,
controlled or held, or (b) that is, as of such date, otherwise Controlled, by
the parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower.
"Subsidiary Loan Party" means each Restricted Subsidiary other
than (i) LOL Finance and its Wholly Owned Subsidiaries and (ii) Foreign
Subsidiaries. The Restricted Subsidiaries and the Subsidiary Loan Parties on the
Effective Date are identified on Schedule 1.01(a).
"Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Term Loans" means Tranche A Term Loans, Tranche B Term Loans
and the Tranche C Term Loans.
"Third Party Securities" means, with respect to any
Securitization, notes, bonds or other debt instruments, beneficial interests in
a trust, undivided ownership interests or other securities issued for cash
consideration by the relevant Securitization Vehicle to banks, investors or
other financing sources (other than the Borrower and its Subsidiaries) the
proceeds of which are used to finance, in whole or part, the purchase by such
Securitization Vehicle of accounts receivable (including Account Assets) or
inventory in a Securitization.
"Total Indebtedness" means, as of any date, the aggregate
principal amount of Indebtedness of the Borrower and the Restricted Subsidiaries
outstanding as of such date, in the amount that would be reflected on a
consolidated balance sheet of the Borrower and the Restricted Subsidiaries
prepared as of such date in accordance with GAAP; provided that "Total
Indebtedness" shall not include the Capital Securities.
27
"Tranche A Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make a Tranche A Term Loan hereunder on
the Effective Date, expressed as an amount representing the maximum principal
amount of the Tranche A Term Loan to be made by such Lender hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.06 and (b)
reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 9.04. The initial amount of each Lender's Tranche A
Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Tranche A Commitment, as
applicable. The initial aggregate amount of the Lenders' Tranche A Commitments
is $325,000,000.
"Tranche A Lender" means a Lender with a Tranche A Commitment
or an outstanding Tranche A Term Loan.
"Tranche A Maturity Date" means October 11, 2006.
"Tranche A Term Loan" means a Loan made pursuant to clause (a)
of Section 2.01.
"Tranche B Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make a Tranche B Term Loan hereunder on
the Effective Date, expressed as an amount representing the maximum principal
amount of the Tranche B Term Loan to be made by such Lender hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.06 and (b)
reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 9.04. The initial amount of each Lender's Tranche B
Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Tranche B Commitment, as
applicable. The initial aggregate amount of the Lenders' Tranche B Commitments
is $250,000,000.
"Tranche B Lender" means a Lender with a Tranche B Commitment
or an outstanding Tranche B Term Loan.
"Tranche B Maturity Date" means October 11, 2008.
"Tranche B Term Loan" means a Loan made pursuant to clause (b)
of Section 2.01.
"Tranche C Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make a Tranche C Term Loan hereunder on
the Effective Date, expressed as an amount representing the maximum principal
amount of the Tranche C Term Loan to be made by such Lender
28
hereunder, as such commitment may be (a) reduced from time to time pursuant to
Section 2.06 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04. The initial amount of
each Lender's Tranche C Commitment is set forth on Schedule 2.01, or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
Tranche C Commitment, as applicable. The initial aggregate amount of the
Lenders' Tranche C Commitments is $250,000,000.
"Tranche C Lender" means a Lender with a Tranche C Commitment
or an outstanding Tranche C Term Loan.
"Tranche C Maturity Date" means April 11, 2003.
"Tranche C Term Loan" means a Loan made pursuant to clause (c)
of Section 2.01.
"Transactions" means the Acquisition and the Financing
Transactions.
"Type", when used in reference to any Loan or Borrowing,
refers to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the Adjusted LIBO Rate or the
Alternate Base Rate.
"Wholly Owned Subsidiary" of any Person shall mean a
subsidiary of such Person of which securities or other ownership interests
(except for directors' qualifying shares and other de minimis amounts of
outstanding securities or ownership interests) representing 100% of the ordinary
voting power or 100% of the general partnership interests are, at the time any
determination is being made, owned, controlled or held by such Person or one or
more Wholly Owned subsidiaries of such Person or by such Person and one or more
Wholly Owned subsidiaries of such Person.
"Withdrawal Liability" means liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For
purposes of this Agreement, Loans may be classified and referred to by Class
(e.g., a "Tranche A Term Loan") or by Type (e.g., a "Eurodollar Loan") or by
Class and Type (e.g., a "Eurodollar Tranche A Term Loan"). Borrowings also may
be classified and referred to by Class (e.g., a "Tranche A Term Borrowing") or
by Type (e.g., a
29
"Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar Tranche A Term
Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any definition of or reference to any statute herein shall be construed as
referring to such statute as amended, or otherwise revised or replaced, (c) any
reference herein to any Person shall be construed to include such Person's
successors and assigns, (d) the words "herein", "hereof" and "hereunder", and
words of similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, (e) all references herein
to Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement and (f)
the words "asset" and "property" shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such
30
provision amended in accordance herewith. Any reference made herein or in any
other Loan Document to consolidated financial statements of the Borrower and the
Restricted Subsidiaries shall mean financial statements of the Borrower in which
the assets and operations of the Restricted Subsidiaries, but not Joint Ventures
or Subsidiaries that are not Restricted Subsidiaries, are consolidated with
those of the Borrower and such Joint Ventures and unrestricted Subsidiaries are
accounted for as investments.
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions
set forth herein, each Lender agrees (a) to make a Tranche A Term Loan to the
Borrower on the Effective Date in a principal amount not exceeding its Tranche A
Commitment, (b) to make a Tranche B Term Loan to the Borrower on the Effective
Date in a principal amount not exceeding its Tranche B Commitment and (c) to
make a Tranche C Term Loan to the Borrower on the Effective Date in a principal
amount not exceeding its Tranche C Commitment, as the same may be reduced on or
prior to the Effective Date pursuant to Section 2.06(b). Amounts repaid in
respect of Term Loans may not be reborrowed.
SECTION 2.02. Loans and Borrowings. (a) Each Loan shall be
made as part of a Borrowing consisting of Loans of the same Class and Type made
by the Lenders ratably in accordance with their respective Commitments of the
applicable Class. The failure of any Lender to make any Loan required to be made
by it shall not relieve any other Lender of its obligations hereunder; provided
that the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender's failure to make Loans as required.
(b) Subject to Section 2.12, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request in
accordance herewith. Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement.
(c) At the commencement of each Interest Period for any
Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000
31
and not less than $10,000,000. Borrowings of more than one Type may be
outstanding at the same time; provided that there shall not at any time be more
than a total of 20 Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Tranche A Maturity Date, Tranche B Maturity Date or Tranche C Maturity
Date, as applicable.
SECTION 2.03. Requests for Borrowings. To request a Borrowing,
the Borrower shall notify the Administrative Agent of such request by telephone
(a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York
City time, three Business Days before the date of the proposed Borrowing or (b)
in the case of an ABR Borrowing, not later than 10:00 a.m., New York City time,
on the date of the proposed Borrowing. Each such telephonic Borrowing Request
shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Borrowing Request in a form
approved by the Administrative Agent and signed by the Borrower. Each such
telephonic and written Borrowing Request shall specify the following information
in compliance with Section 2.02:
(i) whether the requested Borrowing is to be a Tranche A
Term Borrowing, Tranche B Term Borrowing or Tranche C Term Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) the date of such Borrowing, which shall be a
Business Day;
(iv) whether such Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing;
(v) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period"; and
(vi) the location and number of the Borrower's account to
which funds are to be disbursed, which shall comply with the
requirements of Section 2.04.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If
32
no Interest Period is specified with respect to any requested Eurodollar
Borrowing, then the Borrower shall be deemed to have selected an Interest Period
of one month's duration. Promptly following receipt of a Borrowing Request in
accordance with this Section, the Administrative Agent shall advise each Lender
of the details thereof and of the amount of such Lender's Loan to be made as
part of the requested Borrowing.
SECTION 2.04. Funding of Borrowings. (a) Each Lender shall
make each Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds by 1:00 p.m., New York City time, to the
account of the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders. The Administrative Agent will make such Loans
available to the Borrower by promptly crediting the amounts so received, in like
funds, to such account of the Borrower as the Borrower shall designate in the
applicable Borrowing Request.
(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the Borrower,
the interest rate applicable to ABR Loans. If such Lender pays such amount to
the Administrative Agent, then such amount shall constitute such Lender's Loan
included in such Borrowing.
SECTION 2.05. Interest Elections. (a) Each Borrowing initially
shall be of the Type specified in the applicable Borrowing Request and, in the
case of a Eurodollar Borrowing, shall have an initial Interest Period as
specified in such Borrowing Request. Thereafter, the Borrower may elect to
convert such Borrowing to a different
33
Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing,
may elect Interest Periods therefor, all as provided in this Section. The
Borrower may elect different options with respect to different portions of the
affected Borrowing, in which case each such portion shall be allocated ratably
among the Lenders holding the Loans comprising such Borrowing, and the Loans
comprising each such portion shall be considered a separate Borrowing.
(b) To make an election pursuant to this Section, the Borrower
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.03. Each such
telephonic Interest Election Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
Interest Election Request in a form approved by the Administrative Agent and
signed by the Borrower.
(c) Each telephonic and written Interest Election Request
shall specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each
34
Lender of the details thereof and of such Lender's portion of each resulting
Borrowing.
(e) If the Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing and the Administrative Agent,
at the request of the Required Lenders, so notifies the Borrower, then, so long
as an Event of Default is continuing (i) no outstanding Borrowing may be
converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.
SECTION 2.06. Termination and Reduction of Commitments. (a)
Unless previously terminated, (i) the Tranche A Commitments, Tranche B
Commitments and Tranche C Commitments shall terminate at 5:00 p.m., New York
City time, on the Effective Date.
(b) In the event the Senior Notes are issued on or prior to
the Effective Date, the Tranche C Commitments will automatically be reduced, at
the time of such issuance, by an amount equal to the aggregate Net Proceeds from
the issuance of the Senior Notes (and the amount of the Tranche C Commitments
subject to such reduction may not be utilized on the Closing Date), and any
excess shall be applied as set forth in the Related Credit Facility.
(c) The Borrower may at any time terminate, or from time to
time reduce, the Commitments of any Class; provided that (i) each reduction of
the Commitments of any Class shall be in an amount that is an integral multiple
of $1,000,000 and not less than $5,000,000.
(d) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (c) of this
Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable. Any termination or
reduction of the Commitments of any Class shall be permanent. Each reduction of
the Commitments of
35
any Class shall be made ratably among the Lenders in accordance with their
respective Commitments of such Class.
SECTION 2.07. Repayment of Loans; Evidence of Debt. (a) The
Borrower hereby unconditionally promises to pay to the Administrative Agent for
the account of each Lender the then unpaid principal amount of each Term Loan of
such Lender as provided in Section 2.08.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which
it shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans of any Class made by it
be evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent. Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.04) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).
SECTION 2.08. Amortization of Term Loans. (a) Subject to
adjustment pursuant to paragraph (d) of this
36
Section, the Borrower shall repay Tranche A Term Borrowings in 16 consecutive
quarterly installments, payable on the date that is one year after the Effective
Date and on each successive date thereafter which is three months after the
preceding installment date, in the aggregate principal amount set forth below
for each installment:
Installment Amount
1-8 $16,250,000
9-16 $24,375,000
(b) Subject to adjustment pursuant to paragraph (d) of this
Section, the Borrower shall repay Tranche B Term Borrowings in 24 consecutive
quarterly installments, payable on the date that is one year after the Effective
Date and on each successive date thereafter which is three months after the
preceding installment date, in the aggregate principal amount set forth below
for each installment:
Installment Amount
1-23 $750,000
24 $232,750,000
(c) To the extent not previously paid, (i) all Tranche A Term
Loans shall be due and payable on the Tranche A Maturity Date, (ii) all Tranche
B Term Loans shall be due and payable on the Tranche B Maturity Date and (iii)
all Tranche C Term Loans shall be due and payable on the Tranche C Maturity
Date.
(d) Any prepayment of a Tranche A Term Borrowing or Tranche B
Term Borrowing shall be applied to reduce the subsequent scheduled repayments of
the Borrowings of such Class to be made pursuant to this Section ratably;
provided that any prepayment made pursuant to Section 2.09(b) or (c) shall, if
the Borrower so elects in its notice given pursuant to Section 2.09(f), be
applied, first, to reduce all or any portion of the scheduled repayments of the
Borrowings of such Class to be made pursuant to this Section during the 12-month
period commencing on the prepayment date, ratably or in direct order of maturity
at the Borrower's option, until such scheduled repayments have been eliminated,
and, thereafter ratably to the remaining scheduled repayments of Borrowings of
such Class. If the initial aggregate amount of the Lenders' Term Commitments of
any Class exceeds the aggregate principal amount of Term Loans of such Class
that are made on the Effective Date,
37
then the scheduled repayments of Borrowings of such Class to be made pursuant to
this Section shall be reduced ratably by an aggregate amount equal to such
excess. Repayments and prepayments of Borrowings shall be accompanied by accrued
interest on the amount repaid or prepaid, plus amounts due under Section 2.14,
if any.
SECTION 2.09. Prepayment of Loans. (a) The Borrower shall have
the right at any time and from time to time to prepay any Borrowing in whole or
in part, subject to the requirements of this Section.
(b) In the event and on each occasion that any Net Proceeds
are received by or on behalf of the Borrower or any Restricted Subsidiary in
respect of any Prepayment Event, the Borrower shall, within five Business Days
after such Net Proceeds are received, prepay Borrowings in an aggregate amount
equal to such Net Proceeds; provided that, in the case of any event described in
clause (a) of the definition of the term Prepayment Event, if the Borrower shall
deliver to the Administrative Agent a certificate of a Financial Officer to the
effect that the Borrower and the Subsidiaries intend to apply the Net Proceeds
from such event (or a portion thereof specified in such certificate), within 270
days after receipt of such Net Proceeds, to acquire real property, equipment or
other tangible assets to be used in the business of the Borrower and the
Subsidiaries (or in the case of Net Proceeds received by LOL Finance or its
Subsidiaries, to acquire loan assets in the ordinary course of its financing
business), and certifying that no Event of Default has occurred and is
continuing, then no prepayment shall be required pursuant to this paragraph in
respect of the Net Proceeds in respect of such event (or the portion of such Net
Proceeds specified in such certificate, if applicable) except to the extent of
any such Net Proceeds therefrom that have not been so applied by the end of such
270-day period, at which time a prepayment shall be required in an amount equal
to such Net Proceeds that have not been so applied; provided however, that
notwithstanding the foregoing, (i) cumulative Net Proceeds in excess of
$75,000,000 from any Securitization shall be applied (A) first, to the repayment
of borrowings under the Related Credit Facility until a cumulative aggregate of
$25,000,000 of such borrowings (or if less, all such outstanding borrowings)
have been paid and (B) thereafter, to the prepayment of Term Loans and (ii) any
Net Proceeds in excess of $250,000,000 from the issuance of the Senior Notes
will be applied to the reduction of the drawn borrowing under the Related Credit
Facility.
38
(c) Following the end of each fiscal year of the Borrower,
commencing with the fiscal year ending December 31, 2001, the Borrower shall
prepay Borrowings in an aggregate amount equal to 50% of Excess Cash Flow for
such fiscal year. Each prepayment pursuant to this paragraph shall be made on or
before the date on which financial statements are delivered pursuant to Section
5.01(a) with respect to the fiscal year for which Excess Cash Flow is being
calculated (and in any event within 90 days after the end of such fiscal year).
(d) Each mandatory and voluntary prepayment will be allocated
first to the Tranche C Term Borrowings, until such Borrowings have been paid in
full, and then to the Tranche A Term Borrowings and the Tranche B Term
Borrowings, pro rata in accordance with the outstanding amounts thereof, subject
to the provisions of Section 2.09(e) regarding the rights of Tranche B Lenders
to turn down mandatory prepayments under certain circumstances.
(e) Prior to any optional or mandatory prepayment of
Borrowings hereunder, the Borrower shall select (subject to paragraph (d) above)
the Borrowing or Borrowings to be prepaid and shall specify such selection in
the notice of such prepayment pursuant to paragraph (f) of this Section. In the
event of any optional or mandatory prepayment of Borrowings made at a time when
Borrowings of more than one Class remain outstanding, the Borrower shall select
Borrowings to be prepaid so that the aggregate amount of such prepayment is
allocated first, to Tranche C Term Borrowings, until all such Borrowings have
been paid in full, and thereafter to the Tranche A Term Borrowings and Tranche B
Term Borrowings pro rata based on the aggregate principal amount of outstanding
Borrowings of each such Class; provided that, to the extent Tranche A Term
Borrowings are outstanding, any Tranche B Lender may elect, by notice to the
Administrative Agent by telephone (confirmed by telecopy) at least one Business
Day prior to the prepayment date, to decline all or any portion of any
prepayment of its Tranche B Term Loans pursuant to this Section (other than an
optional prepayment pursuant to paragraph (a) of this Section, which may not be
declined), in which case the aggregate amount of the prepayment that would have
been applied to prepay Tranche B Term Borrowings but was so declined shall be
applied to prepay Tranche A Term Borrowings (provided that such elections will
be effective only to the extent of the outstanding Tranche A Term Borrowings
available to be prepaid).
(f) The Borrower shall notify the Administrative Agent by
telephone (confirmed by telecopy) of any prepayment
39
hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later
than 11:00 a.m., New York City time, three Business Days before the date of
prepayment and (ii) in the case of prepayment of an ABR Borrowing, not later
than 10:00 a.m., New York City time, on the same Business Day as the date of
prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date, the principal amount of each Borrowing or portion thereof to be
prepaid and, in the case of a mandatory prepayment, a reasonably detailed
calculation of the amount of such prepayment. Promptly following receipt of any
such notice, the Administrative Agent shall advise the Lenders of the contents
thereof. Each partial prepayment of any Borrowing shall be in an amount that
would be permitted in the case of an advance of a Borrowing of the same Type as
provided in Section 2.02, except as necessary to apply fully the required amount
of a mandatory prepayment. Each prepayment of a Borrowing shall be applied
ratably to the Loans included in the prepaid Borrowing. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.08.
SECTION 2.10. Fees. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee, equal to
0.25% per annum of the daily unused amount of each Tranche A Commitment and
Tranche B Commitment and a fee equal to 0.125% per annum of the daily unused
amount of each Tranche C Commitment of such Lender during the period from and
including the date of this Agreement to but excluding the earlier of the
Effective Date and the date on which such Commitment terminates. Accrued
commitment fees shall be payable in arrears in the case of commitment fees in
respect of the Tranche A Term Commitments, Tranche B Term Commitments and
Tranche C Term Commitments on the Effective Date or any earlier date on which
such Commitments terminate. All commitment fees shall be computed on the basis
of a year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(b) All voluntary and mandatory prepayments of Tranche B Term
Loans made prior to the third anniversary of the Effective Date shall be
accompanied by payment by the Borrower of a prepayment fee equal to (i) 3.0% of
the aggregate amount of any such prepayment made on or before the first
anniversary of the Effective Date, (ii) 2.0% of the aggregate amount of any such
prepayment made after such first anniversary but on or before the second
anniversary of the Effective Date and (iii) 1.0% of the aggregate amount of any
such prepayment made after such second anniversary but on or before the third
anniversary of the Effective Date.
40
(c) The Borrower agrees to pay to the Administrative Agent,
for its own account, fees payable in the amounts and at the times separately
agreed upon between the Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to the Administrative Agent for distribution, in
the case of commitment fees and prepayment fees, to the Lenders entitled
thereto. Fees paid shall not be refundable under any circumstances.
SECTION 2.11. Interest. (a) The Loans comprising each ABR
Borrowing shall bear interest at the Alternate Base Rate plus the Applicable
Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate.
(c) Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by the Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration or
otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of
any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the
preceding paragraphs of this Section and (ii) in the case of any other amount,
2% plus the rate applicable to ABR Loans as provided in paragraph (a) of this
Section.
(d) Accrued interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan; provided that (i) interest accrued
pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in
the event of any repayment or prepayment of any Loan, accrued interest on the
principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.
(e) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable
41
for the actual number of days elapsed (including the first day but excluding the
last day). The applicable Alternate Base Rate or Adjusted LIBO Rate shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
SECTION 2.12. Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining the Adjusted LIBO Rate for such
Interest Period; or
(b) the Administrative Agent is advised by the Required
Lenders that the Adjusted LIBO Rate for such Interest Period will not
adequately and fairly reflect the cost to such Lenders of making or
maintaining their Loans included in such Borrowing for such Interest
Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
SECTION 2.13. Increased Costs. (a) If any Change in Law
shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate); or
(ii) impose on any Lender or the London interbank market any
other condition affecting this Agreement or Eurodollar Loans made by
such Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or to
42
reduce the amount of any sum received or receivable by such Lender hereunder
(whether of principal, interest or otherwise), then the Borrower will pay to
such Lender such additional amount or amounts as will compensate such Lender for
such additional costs incurred or reduction suffered.
(b) If any Lender determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of return
on such Lender's capital or on the capital of such Lender's holding company as a
consequence of this Agreement or the Loans made by, such Lender, to a level
below that which such Lender or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount or
amounts necessary to compensate such Lender or such Lender's holding company as
specified in paragraph (a) or (b) of this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.
(d) Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender's right to demand such compensation; provided that the Borrower shall not
be required to compensate a Lender pursuant to this Section for any increased
costs or reductions incurred more than 270 days prior to the date that such
Lender notifies the Borrower of the Change in Law giving rise to such increased
costs or reductions and of such Lender's intention to claim compensation
therefor; provided further that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the 270-day period referred
to above shall be extended to include the period of retroactive effect thereof.
SECTION 2.14. Break Funding Payments. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of Default
but excluding any payment pursuant to Section 2.04(b)), (b) the conversion of
any Eurodollar Loan other than on the last day of the Interest Period applicable
thereto, (c) the failure to borrow, convert, continue or
43
prepay any Term Loan on the date specified in any notice delivered pursuant
hereto, or (d) the assignment of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto as a result of a request by the
Borrower pursuant to Section 2.17, then, in any such event, the Borrower shall
compensate each Lender for the loss, cost and expense attributable to such
event. In the case of a Eurodollar Loan, such loss, cost or expense to any
Lender shall be deemed to include an amount determined by such Lender to be the
excess, if any, of (i) the amount of interest which would have accrued on the
principal amount of such Loan had such event not occurred, at the Adjusted LIBO
Rate that would have been applicable to such Loan, for the period from the date
of such event to the last day of the then current Interest Period therefor (or,
in the case of a failure to borrow, convert or continue, for the period that
would have been the Interest Period for such Loan), over (ii) the amount of
interest which would accrue on such principal amount for such period at the
interest rate which such Lender would bid were it to bid, at the commencement of
such period, for dollar deposits of a comparable amount and period from other
banks in the eurodollar market. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.
SECTION 2.15. Taxes. (a) Any and all payments by or on account
of any obligation of the Borrower hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any Indemnified Taxes
or Other Taxes; provided that if the Borrower shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent or Lender (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent and
each Lender within 10 days after
44
written demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes paid by the Administrative Agent or such Lender, as the case may be, on or
with respect to any payment by or on account of any obligation of the Borrower
hereunder or under any other Loan Document (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to the Borrower by a Lender or by the Administrative Agent on its own behalf or
on behalf of a Lender shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from
or reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable
law or reasonably requested by the Borrower as will permit such payments to be
made without withholding or at a reduced rate, provided that such Foreign Lender
has received written notice from the Borrower advising it of the availability of
such exemption or reduction and supplying all applicable documentation.
SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing
of Set-offs. (a) The Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest, or
fees, or of amounts payable under Section 2.13, 2.14 or 2.15, or otherwise)
prior to the time expressly required hereunder or under such other Loan Document
for such payment (or, if no such time is expressly required, prior to 12:00
noon, New York City time), on the date when due, in immediately available funds,
without set-off or counterclaim. Any amounts received after such time on any
45
date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent at
its offices at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, except that payments
pursuant to Sections 2.13, 2.14, 2.15 and 9.03 shall be made directly to the
Persons entitled thereto and payments pursuant to other Loan Documents shall be
made to the Persons specified therein. The Administrative Agent shall distribute
any such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof. If any payment under
any Loan Document shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, in the case
of any payment accruing interest, interest thereon shall be payable for the
period of such extension. All payments under each Loan Document shall be made in
dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
interest and fees then due hereunder, such funds shall be applied (i) first,
towards payment of interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, towards payment of principal then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Term Loans resulting in such Lender receiving payment of
a greater proportion of the aggregate amount of its Term Loans and accrued
interest thereon than the proportion received by any other Lender, then the
Lender receiving such greater proportion shall purchase (for cash at face value)
participations in the Term Loans of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Term Loans; provided that (i) if any such participations are
purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
46
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee or
participant, other than to the Borrower or any Restricted Subsidiary or
Affiliate thereof (as to which the provisions of this paragraph shall apply).
The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.
(d) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders that the Borrower will not
make such payment, the Administrative Agent may assume that the Borrower has
made such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to the Lenders the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders severally
agrees to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to
be made by it pursuant to Section 2.04(b), 2.16(d) or 9.03(c), then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender's obligations under
such Sections until all such unsatisfied obligations are fully paid.
SECTION 2.17. Mitigation Obligations; Replacement of Lenders.
(a) If any Lender requests compensation under Section 2.13, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.15, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such
47
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.13 or 2.15, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) If any Lender requests compensation under Section 2.13, or
if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.15,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent, which
consent shall not unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts) and (iii)
in the case of any such assignment resulting from a claim for compensation under
Section 2.13 or payments required to be made pursuant to Section 2.15, such
assignment will result in a material reduction in such compensation or payments.
A Lender shall not be required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to the Lenders that:
SECTION 3.01. Organization; Powers. Each of the Borrower and
the Restricted Subsidiaries is duly organized, validly existing and in good
standing under the laws of the
48
jurisdiction of its organization, has all requisite power and authority to carry
on its business as now conducted and, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required.
SECTION 3.02. Authorization; Enforceability. The Transactions
to be entered into by each Loan Party are within such Loan Party's corporate or
other powers and have been duly authorized by all necessary action, including,
if required, stockholder or member action. This Agreement has been duly executed
and delivered by the Borrower and constitutes, and each other Loan Document to
which any Loan Party is to be a party, when executed and delivered by such Loan
Party, will constitute, a legal, valid and binding obligation of the Borrower or
such Loan Party (as the case may be), enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except such as
have been obtained or made and are in full force and effect and except filings
necessary to perfect Liens created under the Loan Documents, (b) will not
violate any applicable law or regulation or the charter, by-laws or other
organizational documents of the Borrower or any of its Restricted Subsidiaries
or any order of any Governmental Authority, (c) will not violate or result in a
default under any material indenture, agreement or other instrument binding upon
the Borrower or any of the Subsidiaries or its assets, or give rise to a right
thereunder to require any material payment to be made by the Borrower or any of
the Subsidiaries, and (d) except for Disclosed Matters, will not result in the
creation or imposition of any Lien on any asset of the Borrower or any of its
Restricted Subsidiaries, except Liens created under the Loan Documents.
SECTION 3.04. Financial Condition; No Material Adverse Change.
(a) The Borrower has heretofore furnished to the Lenders its consolidated
balance sheet and consolidated statements of operations, equities and cash flows
(i) as of and for the fiscal year ended December 31, 2000, reported on by KPMG
LLP, independent public
49
accountants, and (ii) as of and for the fiscal quarter and the portion of the
fiscal year ended June 30, 2001, certified by its chief financial officer. Such
financial statements present fairly, in all material respects, the financial
position and results of operations and cash flows of the Borrower and its
consolidated Subsidiaries as of such dates and for such periods in accordance
with GAAP, subject to year-end audit adjustments and the absence of footnotes in
the case of the statements referred to in clause (ii) above.
(b) The Borrower has heretofore furnished to the Lenders a pro
forma consolidated balance sheet of the Borrower and the Restricted Subsidiaries
as of June 30, 2001, prepared giving effect to the Transactions as if the
Transactions had occurred on such date. Such pro forma consolidated balance
sheet (i) has been prepared in good faith based on the same assumptions used to
prepare the pro forma financial statements included in the Information
Memorandum (which assumptions are believed by the Borrower to be reasonable),
(ii) is based on the best information available to the Borrower after due
inquiry, (iii) accurately reflects all adjustments necessary to give effect to
the Transactions and (iv) presents fairly, in all material respects, the pro
forma financial position of the Borrower and the Restricted Subsidiaries as of
June 30, 2001 as if the Transactions had occurred on such date.
(c) Except as disclosed in the financial statements referred
to above or the notes thereto or in the Information Memorandum and except for
the Disclosed Matters, after giving effect to the Transactions, none of the
Borrower or its Restricted Subsidiaries has, as of the Effective Date, any
material contingent liabilities, unusual long-term commitments or significant
unrealized losses.
(d) Since December 31, 2000, there has been no material
adverse change in the business, operations, assets, properties, liabilities or
condition, financial or otherwise, of the Borrower and the Restricted
Subsidiaries, taken as a whole.
SECTION 3.05. Properties. (a) Each of the Borrower and the
Restricted Subsidiaries has good title to, or valid leasehold interests in, all
its real and personal property material to its business (including its Mortgaged
Properties), except for Liens permitted by Section 6.02
(b) Each of the Borrower and its Restricted Subsidiaries owns,
or is licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual
50
property material to its business, and the use thereof by the Borrower and the
Restricted Subsidiaries does not infringe upon the rights of any other Person,
except for any such infringements that, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect.
(c) Schedule 3.05 sets forth the address of each real property
that is owned or leased by the Borrower or any of the Subsidiary Loan Parties as
of the Effective Date after giving effect to the Transactions.
(d) As of the Effective Date, neither the Borrower nor any of
the Restricted Subsidiaries has received notice of, or has knowledge of, any
pending or contemplated condemnation proceeding affecting any Mortgaged Property
or any sale or disposition thereof in lieu of condemnation. Neither any
Mortgaged Property nor any interest therein is subject to any right of first
refusal, option or other contractual right to purchase such Mortgaged Property
or interest therein.
SECTION 3.06. Litigation and Environmental Matters. (a) There
are no actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of its Subsidiaries (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) that involve any of the Loan Documents or the Transactions.
(b) Except for the Disclosed Matters and except with respect
to any other matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, neither the
Borrower nor any of its Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has become subject to
any Environmental Liability, (iii) has received notice of any claim with respect
to any Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
(c) Since the date of this Agreement, there has been no change
in the status of the Disclosed Matters that, individually or in the aggregate,
has resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
51
SECTION 3.07. Compliance with Laws and Agreements. Each of the
Borrower and its Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.
SECTION 3.08. Investment and Holding Company Status. Neither
the Borrower nor any of its Subsidiaries is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940
or (b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. Each of the Borrower and its Subsidiaries
has timely filed or caused to be filed all Tax returns and reports required to
have been filed and has paid or caused to be paid all Taxes required to have
been paid by it, except (a) any Taxes that are being contested in good faith by
appropriate proceedings and for which the Borrower or such Subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such ERISA
Events for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect. The present value of all
accumulated benefit obligations under each Plan (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did not, as
of the date of the most recent financial statements reflecting such amounts,
exceed by more than $6,000,000 the fair market value of the assets of such Plan.
SECTION 3.11. Disclosure. The Borrower has disclosed to the
Lenders all agreements, instruments and corporate or other restrictions to which
the Borrower or any of the Restricted Subsidiaries is subject, and all other
matters known to any of them, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. Neither the
Information Memorandum nor any of the other reports, financial statements,
certificates or other information furnished by or on behalf of any Loan Party to
the Administrative Agent or any Lender
52
in connection with the negotiation of this Agreement or any other Loan Document
or delivered hereunder or thereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that,
with respect to projected financial information, the Borrower represent only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time.
SECTION 3.12. Subsidiaries. Schedule 3.12 sets forth the name
of, and the ownership interest of the Borrower in, each Subsidiary of the
Borrower and identifies each Subsidiary that is a Subsidiary Loan Party, in each
case as of the Effective Date.
SECTION 3.13. Insurance. Schedule 3.13 sets forth a
description of all insurance maintained by or on behalf of the Borrower and the
Restricted Subsidiaries as of the Effective Date. As of the Effective Date, all
premiums in respect of such insurance have been paid. The Borrower believes that
the insurance maintained by or on behalf of the Borrower and the Restricted
Subsidiaries is adequate.
SECTION 3.14. Labor Matters. Except as, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect: (a) as of
the Effective Date, there are no strikes, lockouts or slowdowns against the
Borrower or any Restricted Subsidiary pending or, to the knowledge of the
Borrower, threatened, (b) all payments due from the Borrower or any Restricted
Subsidiary, or for which any claim may be made against the Borrower or any
Restricted Subsidiary, on account of wages and employee health and welfare
insurance and other benefits, have been paid or accrued as a liability on the
books of the Borrower or such Restricted Subsidiary and (c) the consummation of
the Transactions will not give rise to any right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement
to which the Borrower or any Restricted Subsidiary is bound.
SECTION 3.15. Solvency. Immediately after the consummation of
the Transactions to occur on the Effective Date and immediately following the
making of each Loan made on the Effective Date and after giving effect to the
application of the proceeds of such Loans and to the rights of subrogation and
contribution under the Subsidiary Loan Parties' guarantee of the Obligations,
(a) the fair value of the assets of each Loan Party, at a fair valuation, will
exceed its debts and liabilities, subordinated, contingent
53
or otherwise; (b) the present fair saleable value of the property of each Loan
Party will be greater than the amount that will be required to pay the probable
liability of its debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute and matured; (c)
each Loan Party will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured; and (d) each Loan Party will not have unreasonably small capital with
which to conduct the business in which it is engaged as such business is now
conducted and is proposed to be conducted following the Effective Date.
SECTION 3.16. Patronage Payments. All claims by members for
cash payments of patronage dividends, revolvements and redemptions under
applicable laws, including the Bankruptcy Code and Rules, are claims in respect
of equity interests and will rank junior in right of payment to all Obligations
under this Agreement.
ARTICLE IV
Conditions
SECTION 4.01. Effective Date. The obligations of the Lenders
to make Loans hereunder shall not become effective until the date on which each
of the following conditions is satisfied (or waived in accordance with Section
9.02):
(a) The Administrative Agent (or its counsel) shall have
received from each party hereto either (i) a counterpart of this
Agreement signed on behalf of such party or (ii) written evidence
reasonably satisfactory to the Administrative Agent (which may include
telecopy transmission of a signed signature page of this Agreement)
that such party has signed a counterpart of this Agreement.
(b) The Administrative Agent shall have received a favorable
written opinion (addressed to the Administrative Agent and the Lenders
and dated the Effective Date) of each of (i) Faegre & Xxxxxx LLP,
outside counsel for the Borrower, substantially in the form of Exhibit
B-1, (ii) Xxxx Xxxxxx, general counsel for the Borrower, substantially
in the form of Exhibit B-2, and (iii) to the extent requested by the
Administrative Agent, local counsel in each jurisdiction where a
Mortgaged Property is located, substantially in the form of Exhibit
B-3, and, in the
54
case of each such opinion required by this paragraph, covering such
other matters relating to the Loan Parties, the Loan Documents or the
Transactions as the Required Lenders shall reasonably request. The
Borrower hereby requests such counsel to deliver such opinions.
(c) The Administrative Agent shall have received such
documents and certificates as the Administrative Agent or its counsel
may reasonably request relating to the organization, existence and good
standing of each Loan Party, the authorization of the Transactions and
any other legal matters relating to the Loan Parties, the Loan
Documents or the Transactions, all in form and substance reasonably
satisfactory to the Administrative Agent and its counsel.
(d) The Administrative Agent shall have received a
certificate, dated the Effective Date and signed by the President, a
Vice President or a Financial Officer of the Borrower, confirming
compliance with the conditions set forth in paragraphs (a) and (b) of
Section 4.02.
(e) The Administrative Agent shall have received all fees and
other amounts due and payable on or prior to the Effective Date,
including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses (including fees, charges and disbursements of
counsel) required to be reimbursed or paid by any Loan Party hereunder
or under any other Loan Document.
(f) The Collateral and Guarantee Requirement shall have been
satisfied and the Agent shall have received a completed Perfection
Certificate dated the Effective Date and signed by an executive officer
or Financial Officer of the Borrower, together with all attachments
contemplated thereby, including the results of a search of the Uniform
Commercial Code (or equivalent) filings made with respect to the Loan
Parties in the jurisdictions contemplated by the Perfection Certificate
and copies of the financing statements (or similar documents) disclosed
by such search and evidence reasonably satisfactory to the Agent that
the Liens indicated by such financing statements (or similar documents)
are permitted by Section 6.02 or have been released.
(g) The Administrative Agent shall have received evidence that
the insurance required by Section 5.07 and the Security Documents is in
effect.
55
(h) All consents and approvals required to be obtained from
any Governmental Authority or other Person in connection with the
Acquisition shall have been obtained, except to the extent that the
failure to obtain such approval or consent would not result in a
Material Adverse Effect, and all applicable waiting periods and appeal
periods shall have expired, in each case without the imposition of any
materially burdensome conditions. The Acquisition shall have been, or
substantially simultaneously with the initial funding of Loans on the
Effective Date shall be, consummated in accordance with the Acquisition
Documents and applicable law, without any amendment to or waiver of any
material terms or conditions of the Acquisition Documents not approved
by the Required Lenders. The Administrative Agent shall have received
copies of the Acquisition Documents and all certificates, opinions and
other documents delivered thereunder, certified by a Financial Officer
as complete and correct.
(i) The Lenders shall have received a pro forma consolidated
balance sheet of the Borrower and the Restricted Subsidiaries as of
June 30, 2001, reflecting all pro forma adjustments as if the
Transactions had been consummated on such date, and such pro forma
consolidated balance sheet shall be consistent in all material respects
with the forecasts and other information previously provided to the
Lenders. After giving effect to the Transactions, neither the Borrower
nor any of the Restricted Subsidiaries shall have outstanding any
shares of preferred stock or any Indebtedness, other than (i)
Indebtedness incurred under the Loan Documents and under the Related
Credit Facility, (ii) the Senior Notes, if any, (iii) up to
$200,000,000 of Capital Securities and (iv) Indebtedness under the
CoBank Receivables Loan Agreement not exceeding $75,000,000, (v) other
Indebtedness (excluding Indebtedness to Subsidiary Loan Parties) set
forth on Schedule 6.01 not exceeding $186,000,000 in the aggregate and
(vi) the Borrower's outstanding preferred stock referred to in Section
6.08(a)(iii). The aggregate amount of fees and expenses (including
underwriting discounts and commissions) payable or otherwise borne by
the Borrower and the Restricted Subsidiaries in connection with the
Transactions shall not exceed $40,000,000.
(j) The Existing 364-Day Credit Agreement shall have been
terminated and all amounts outstanding thereunder repaid. The Related
Credit Facility shall
56
have been executed and delivered and shall be in full force and effect.
(k) The CoBank Receivables Loan Agreement shall have been
executed and delivered and $75,000,000 of proceeds of borrowings
thereunder shall have been used to pay a portion of the purchase price
for the Acquisition.
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) at or prior to 5:00 p.m., New York City time, on
December 31, 2001 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time).
SECTION 4.02. Each Credit Event. The obligation of each Lender
to make a Loan on the occasion of any Borrowing is subject to receipt of the
request therefor in accordance herewith and to the satisfaction of the following
conditions:
(a) The representations and warranties of each Loan Party set
forth in the Loan Documents shall be true and correct in all material
respects on and as of the date of such Borrowing.
(b) At the time of and immediately after giving effect to such
Borrowing, no Default shall have occurred and be continuing.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date thereof as to the matters specified in paragraphs (a)
and (b) of this Section.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full, the Borrower covenants and agrees with the Lenders that:
57
SECTION 5.01. Financial Statements and Other Information. The Borrower
will furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year of the
Borrower, an audited combined balance sheet of the Borrower and the
Restricted Subsidiaries and related statements of operations, equities
and cash flows as of the end of and for such year, setting forth in
each case in comparative form the figures for the previous fiscal year,
all reported on by KPMG LLP or other independent public accountants of
recognized national standing (without a "going concern" or like
qualification or exception and without any qualification or exception
as to the scope of such audit) to the effect that such combined
financial statements present fairly in all material respects the
financial condition and results of operations of the Borrower and the
Restricted Subsidiaries on a combined basis in accordance with GAAP
consistently applied; provided that so long as the Borrower (i) files
an annual Form 10-K with the Securities and Exchange Commission, and
(ii) such Form 10-K contains financial statements, opinions or
certificates required by the foregoing provisions, the delivery of such
Form 10-K shall satisfy the requirement of this Section 5.01(a);
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year of the Borrower, an unaudited
combined balance sheet of the Borrower and the Restricted Subsidiaries
and related statements of operations, equities and cash flows as of the
end of and for such fiscal quarter and the then elapsed portion of the
fiscal year, setting forth in each case in comparative form the figures
for the corresponding period or periods of (or, in the case of the
balance sheet, as of the end of) the previous fiscal year, all
certified by one of its Financial Officers as presenting fairly in all
material respects the financial condition and results of operations of
the Borrower and the Restricted Subsidiaries on a combined basis in
accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes; provided that so long
as the Borrower (i) files a quarterly form 10-Q with the Securities and
Exchange Commission, and (ii) such Form 10-Q contains financial
statements, opinions or certificates required by the foregoing
provisions, the delivery of such Form 10-Q shall satisfy the
requirement of this Section 5.01(b);
58
(c) concurrently with any delivery of financial statements
under clause (a) or (b) above, a certificate of a Financial Officer of
the Borrower (i) certifying as to whether a Default has occurred and,
if a Default has occurred, specifying the details thereof and any
action taken or proposed to be taken with respect thereto, (ii) setting
forth reasonably detailed calculations demonstrating compliance with
Sections 6.12 and 6.13, (iii) stating whether any change in GAAP or in
the application thereof has occurred since the date of the Borrower's
audited financial statements referred to in Section 3.04 and, if any
such change has occurred, specifying the effect of such change on the
financial statements accompanying such certificate, (iv) identifying
any Restricted Subsidiary formed or acquired since the end of the
previous fiscal quarter, (v) identifying any parcels of real property
or improvements thereto with a value exceeding $2,000,000 that have
been acquired by any Loan Party since the end of the previous fiscal
quarter, (vi) identifying any changes of the type described in Section
5.03(a) that have not been previously reported by the Borrower, (vii)
identifying any acquisitions of going concerns and Joint Ventures that
have been consummated since the end of the previous fiscal quarter,
including the date on which each such acquisition or Joint Venture was
consummated and the consideration therefor, (viii) identifying any
material Intellectual Property (as defined in the Collateral Agreement)
with respect to which a notice is required to be delivered under the
Collateral Agreement and has not been previously delivered and (ix)
identifying any Prepayment Events that have occurred since the end of
the previous fiscal quarter and setting forth a reasonably detailed
calculation of the Net Proceeds received from Prepayment Events since
the end of such previous fiscal quarter;
(d) concurrently with any delivery of financial statements
under clause (a) above, a certificate of the accounting firm that
reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial
statements of any Default (which certificate may be limited to the
extent required by accounting rules or guidelines);
(e) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials
filed by the Borrower or any Restricted Subsidiary with the
59
Securities and Exchange Commission, or any Governmental Authority
succeeding to any or all of the functions of said Commission, or with
any national securities exchange, or distributed by the Borrower to its
shareholders generally, as the case may be; and
(f) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of the Borrower or any Restricted Subsidiary, or compliance
with the terms of any Loan Document, as the Administrative Agent or any
Lender may reasonably request.
SECTION 5.02. Notices of Material Events. The Borrower will
furnish to the Administrative Agent and each Lender prompt written notice of the
following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority
against or affecting the Borrower or any Affiliate thereof as to which
there is a reasonable possibility of an adverse determination and
which, if adversely determined, could reasonably be expected to result
in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, could reasonably be
expected to result in a Material Adverse Effect; and
(d) any other development that results in, or could reasonably
be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. Information Regarding Collateral. (a) The
Borrower will furnish to the Administrative Agent prompt written notice of any
change (i) in any Loan Party's corporate name or in the ownership of its
properties, (ii) in the location of any Loan Party's chief executive office, any
office in any jurisdiction that has not adopted Revised Article 9 of the Uniform
Commercial Code in which it maintains books or records relating to Collateral
owned by it or at which Collateral owned by it is located (including
60
the establishment of any such new office or facility), (iii) in any Loan Party's
identity or corporate structure or (iv) in any Loan Party's Federal Taxpayer
Identification Number or organization number, if any, assigned by the
jurisdiction under the laws of which it is organized. The Borrower agrees not to
effect or permit any change referred to in the preceding sentence unless all
filings have been made under the Uniform Commercial Code or otherwise that are
required in order for the Administrative Agent to continue at all times
following such change to have a valid, legal and perfected security interest in
all the Collateral in which a security interest can be perfected by filing. The
Borrower also agrees promptly to notify the Administrative Agent if any material
portion of the Collateral is damaged or destroyed.
(b) Each year, at the time of delivery of annual financial
statements with respect to the preceding fiscal year pursuant to clause (a) of
Section 5.01, the Borrower shall deliver to the Administrative Agent a
certificate of a Financial Officer and the chief legal officer of the Borrower
setting forth the information required pursuant to Section 2 of the Perfection
Certificate or confirming that there has been no change in such information
since the date of the Perfection Certificate delivered on the Effective Date or
the date of the most recent certificate delivered pursuant to this Section.
SECTION 5.04. Existence; Conduct of Business. The Borrower
will, and will cause each of its Restricted Subsidiaries to, do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence and the rights, licenses, permits, privileges, franchises,
patents, copyrights, trademarks and trade names material to the conduct of its
business; provided that the foregoing shall not prohibit any merger,
consolidation, liquidation or dissolution permitted under Section 6.03.
SECTION 5.05. Payment of Obligations. The Borrower will, and
will cause each of its Restricted Subsidiaries to, pay its obligations,
including Tax liabilities, before the same shall become delinquent or in
default, except where (a) the validity or amount thereof is being contested in
good faith by appropriate proceedings, (b) the Borrower or such Restricted
Subsidiary has set aside on its books adequate reserves with respect thereto in
accordance with GAAP, and (c) the failure to make payment pending such contest
could not reasonably be expected to result in a Material Adverse Effect;
provided that any
61
failure to pay Indebtedness shall only constitute an Event of Default as
provided in Article VII.
SECTION 5.06. Maintenance of Properties. The Borrower will,
and will cause each of its Restricted Subsidiaries to, keep and maintain all
property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted.
SECTION 5.07. Insurance. The Borrower will, and will cause
each of its Restricted Subsidiaries to, maintain, with financially sound and
reputable insurance companies (a) insurance in such amounts (with no greater
risk retention) and against such risks as are customarily maintained by
companies of established repute engaged in the same or similar businesses
operating in the same or similar locations and (b) all insurance required to be
maintained pursuant to the Security Documents. The Borrower will furnish to the
Lenders, upon request of the Administrative Agent, information in reasonable
detail as to the insurance so maintained.
SECTION 5.08. Casualty and Condemnation. The Borrower (a) will
furnish to the Administrative Agent and the Lenders prompt written notice of any
casualty or other insured damage to any material portion of any Collateral or
the commencement of any action or proceeding for the taking of any Collateral or
any part thereof or interest therein under power of eminent domain or by
condemnation or similar proceeding and (b) will ensure that the Net Proceeds of
any such event (whether in the form of insurance proceeds, condemnation awards
or otherwise) are collected and applied in accordance with the applicable
provisions hereof and of the Security Documents.
SECTION 5.09. Books and Records; Inspection and Audit Rights.
The Borrower will, and will cause each of its Restricted Subsidiaries to, keep
proper books of record and account in which full, true and correct entries are
made of all dealings and transactions in relation to its business and
activities. The Borrower will, and will cause each of its Restricted
Subsidiaries to, permit (subject to the provisions of Section 9.12) any
representatives designated by the Administrative Agent or any Lender, upon
reasonable prior notice, to visit and inspect its properties, to examine and
make extracts from its books and records, and to discuss its affairs, finances
and condition with its officers and independent accountants, all at such
reasonable times and as often as reasonably requested.
62
SECTION 5.10. Compliance with Laws. The Borrower will, and
will cause each of its Subsidiaries to, comply with all laws, rules, regulations
and orders of any Governmental Authority applicable to it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 5.11. Use of Proceeds. The proceeds of the Term Loans,
together with the proceeds of any Senior Notes, will be used only for the
payment of (a) amounts payable under the Acquisition Documents as consideration
for the Acquisition, (b) fees and expenses payable in connection with the
Transactions, (c) to refinance existing indebtedness of PMI and the Borrower and
(d) to refinance or repay borrowings outstanding under the Existing Five-Year
Credit Agreement and the Existing 364-Day Credit Agreement. No part of the
proceeds of any Loan will be used, whether directly or indirectly, for any
purpose that entails a violation of any of the Regulations of the Board,
including Regulations U and X.
SECTION 5.12. Additional Subsidiaries. If any additional
Restricted Subsidiary is formed or acquired after the Effective Date, the
Borrower will, within ten Business Days after such Restricted Subsidiary is
formed or acquired, notify the Administrative Agent and the Lenders thereof and
within fifteen Business Days after such Restricted Subsidiary is formed or
acquired, cause the Collateral and Guarantee Requirement to be satisfied with
respect to such Restricted Subsidiary (if it is a Subsidiary Loan Party) and
with respect to any Equity Interest in or Indebtedness of such Restricted
Subsidiary owned by or on behalf of any Loan Party. Notwithstanding the
foregoing, upon the occurrence of any Restricted Subsidiary changing its
corporate form after the Effective Date in connection with the Acquisition, the
Borrower will within one Business Day after such change occurs notify the
Administrative Agent and the Lenders thereof of such change in corporate form in
order for the Administrative Agent to file all necessary Uniform Commercial Code
financing statements with respect to such entity and the Borrower will within
ten Business Days after such change occurs provide the Administrative Agent with
such documents, agreements and undertakings as it may reasonably request
evidencing the continued satisfaction of the Guarantee and Collateral
Requirement with respect to such entity.
SECTION 5.13. Further Assurances. (a) The Borrower will, and
will cause each Subsidiary Loan Party to, execute any and all further documents,
financing statements,
63
agreements and instruments, and take all such further actions (including the
filing and recording of financing statements, fixture filings, mortgages, deeds
of trust and other documents), which may be required under any applicable law,
or which the Agent or the Required Lenders may reasonably request, to cause the
Collateral and Guarantee Requirement to be and remain satisfied, all at the
expense of the Loan Parties. The Borrower also agrees to provide to the Agent,
from time to time upon request, evidence reasonably satisfactory to the Agent to
enable the Agent to confirm the perfection and priority of the Liens created or
intended to be created by the Security Documents.
(b) If any material assets (including any real property or
improvements thereto or any interest therein having a fair market value
(including fixtures) of $2,000,000 or more, but excluding Collateral of a type
not otherwise covered by the Security Documents) are acquired by the Borrower or
any Subsidiary Loan Party after the Effective Date (other than assets
constituting Collateral under the Collateral Agreement that become subject to
the Lien of the Collateral Agreement upon acquisition thereof), the Borrower
will notify the Agent and the Lenders thereof, and, if reasonably requested by
the Agent or the Required Lenders, the Borrower will cause such assets to be
subjected to a Lien securing the Obligations and will take, and cause the
Subsidiary Loan Parties to take, such actions as shall be necessary or
reasonably requested by the Agent to grant and perfect such Liens, including
actions described in paragraph (a) of this Section, all at the expense of the
Loan Parties.
(c) The Borrower and the Restricted Subsidiaries shall, not
later than the tenth day after the Effective Date, deliver to the Collateral
Agent all promissory notes and other instruments in their possession evidencing
Indebtedness of Subsidiaries (other than Restricted Subsidiaries) and third
parties that is owing to the Borrower or any Restricted Subsidiary, together
with instruments of transfer with respect thereto endorsed in blank. In the
event that any promissory notes or other instruments evidencing Indebtedness of
Subsidiaries (other than Restricted Subsidiaries) or third parties in existence
on the Effective Date come into the Borrower' s or a Restricted Subsidiary's
possession after the Effective Date, or in the event that promissory notes
evidencing any additional Indebtedness of Subsidiaries (other than Restricted
Subsidiaries) or third parties is held by the Borrower or its Restricted
Subsidiaries after the Effective Date, such promissory notes or other
instruments shall be promptly delivered to the Collateral Agent and pledged
under
64
the Collateral Agreement. The Borrower agrees that no promissory notes or other
instruments evidencing Indebtedness of Subsidiaries or third parties owed to the
Borrower or any Restricted Subsidiary shall ever be held by any Person other
than the Borrower, a Restricted Subsidiary or the Collateral Agent.
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the
principal of and interest on each Loan and all fees payable hereunder have been
paid in full, the Borrower covenants and agrees with the Lenders that:
SECTION 6.01. Indebtedness; Certain Equity Securities. (a) The
Borrower will not, and will not permit any Restricted Subsidiary to, create,
incur, assume or permit to exist any Indebtedness or Attributable Debt, except:
(i) Indebtedness created under the Loan Documents;
(ii) Indebtedness under the Related Credit Facility in an
aggregate amount not in excess of $250,000,000 at any time outstanding;
(iii) the Senior Notes in an aggregate amount not in excess of
$300,000,000 at any time outstanding;
(iv) the Capital Securities in an aggregate amount not in
excess of $200,000,000 at any time outstanding;
(v) Indebtedness existing on the date hereof and set forth in
Schedule 6.01 and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount
thereof or result in an earlier maturity date or decreased weighted
average life thereof;
(vi) Indebtedness of the Borrower to any Subsidiary and of any
Subsidiary to the Borrower or any other Subsidiary; provided that
Indebtedness of any Subsidiary that is not a Loan Party to the Borrower
or any Subsidiary Loan Party shall be subject to Section 6.04;
(vii) Guarantees by the Borrower of Indebtedness of any
Subsidiary and by any Subsidiary of Indebtedness of any other
Subsidiary; provided that Guarantees by the
65
Borrower or any Subsidiary Loan Party of Indebtedness of any Subsidiary
that is not a Loan Party shall be subject to Section 6.04;
(viii) Indebtedness of the Borrower or any Restricted
Subsidiary incurred to finance the acquisition, construction or
improvement of any fixed or capital assets, including Capital Lease
Obligations and any Indebtedness assumed in connection with the
acquisition of any such assets or secured by a Lien on any such assets
prior to the acquisition thereof, and extensions, renewals and
replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof or result in an earlier maturity
date or decreased weighted average life thereof; provided that such
Indebtedness is incurred prior to or within 90 days after such
acquisition or the completion of such construction or improvement;
(ix) (i) Indebtedness and (ii) Attributable Debt in respect of
Sale-Leaseback Transactions, not in excess of $75,000,000 in the
aggregate at any time outstanding;
(x) (i) Indebtedness of Restricted Subsidiaries that are
Securitization Vehicles in respect of Third Party Securities in an
aggregate amount not in excess of $200,000,000 at any time outstanding
minus the then outstanding principal amount of Indebtedness under the
CoBank Receivables Loan Agreement and (ii) Indebtedness of the Borrower
and Restricted Subsidiaries consisting solely of Liens on their
Sellers' Retained Interests in connection with Securitizations
permitted by Section 6.04 securing obligations in respect of Third
Party Securities in an aggregate amount not in excess of $200,000,000
at any time outstanding minus the then outstanding principal amount of
Indebtedness under the CoBank Receivables Loan Agreement; and
(xi) Indebtedness of LOL Finance and its Wholly Owned
Subsidiaries incurred in the ordinary course of business to finance
their assets; provided that such Indebtedness (x) is not Guaranteed by
the Borrower or any other Restricted Subsidiaries, except to the extent
permitted pursuant to clause (vii) above and (y) does not exceed
$100,000,000 at any time outstanding.
(b) The Borrower will not permit any Restricted Subsidiary to
issue any preferred stock or other preferred Equity Interests.
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SECTION 6.02. Liens. (a) The Borrower will not, and will not
permit any Restricted Subsidiary to, create, incur, assume or permit to exist
any Lien on any property or asset now owned or hereafter acquired by it, or
assign or sell any income or revenues (including accounts receivable) or rights
in respect of any thereof, except:
(i) Liens created under the Loan Documents;
(ii) Permitted Encumbrances;
(iii) any Lien on any property or asset of the Borrower or any
Restricted Subsidiary existing on the date hereof and set forth in
Schedule 6.02; provided that (i) such Lien shall not apply to any other
property or asset of the Borrower or any Restricted Subsidiary and (ii)
such Lien shall secure only those obligations which it secures on the
date hereof and extensions, renewals and replacements thereof that do
not increase the outstanding principal amount thereof;
(iv) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Restricted Subsidiary or
existing on any property or asset of any Person that becomes a
Restricted Subsidiary after the date hereof prior to the time such
Person becomes a Restricted Subsidiary; provided that (A) such Lien is
not created in contemplation of or in connection with such acquisition
or such Person becoming a Restricted Subsidiary , as the case may be,
(B) such Lien shall not apply to any other property or assets of the
Borrower or any Restricted Subsidiary and (C) such Lien shall secure
only those obligations which it secures on the date of such acquisition
or the date such Person becomes a Restricted Subsidiary, as the case
may be and extensions, renewals and replacements thereof that do not
increase the outstanding principal amount thereof;
(v) Liens on fixed or capital assets acquired, constructed or
improved by the Borrower or any Restricted Subsidiary; provided that
(A) such security interests secure Indebtedness permitted by clause
(viii) of Section 6.01(a), (B) such security interests and the
Indebtedness secured thereby are incurred prior to or within 90 days
after such acquisition or the completion of such construction or
improvement, (C) the Indebtedness secured thereby does not exceed 100%
of the cost of acquiring, constructing or improving such fixed or
capital assets and (D) such security interests shall not apply to any
other
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property or assets of the Borrower or any Restricted Subsidiary;
(vi) Liens of CoBank on investments by the Borrower in the
stock, participation certificates, or allocated reserves of CoBank
owned by the Borrower;
(vii) Liens not expressly permitted by clauses (i) through
(vi) above; provided that the sum, without duplication, of (x) the
aggregate principal amount of Indebtedness secured by Liens permitted
by this clause (vii) and (y) the Attributable Debt permitted by Section
6.06, does not at any time exceed $75,000,000;
(viii) Liens on Sellers' Retained Interests incurred in
connection with Securitizations permitted by Section 6.01(a) and 6.04
securing obligations in respect of Third Party Securities in an
aggregate amount at any time outstanding not in excess of $200,000,000
less the aggregate principal amount of Indebtedness under the CoBank
Receivables Loan Agreement; provided, however, that recourse to such
Sellers' Retained Interests is limited in a manner customary for
similar securitization transactions and the ratio of the amount of such
Sellers' Retained Interests to the amount of such Third Party
Securities is not significantly greater than the ratio of sellers'
retained interests to the financed portion of assets in similar
securitization transactions;
(ix) Liens on assets of Restricted Subsidiaries that are
Securitization Vehicles securing Indebtedness of such Securitization
Vehicles permitted by Section 6.01(a)(x)(i); and
(x) Liens on loan assets of LOL Finance and its Wholly Owned
Subsidiaries incurred in the ordinary course of business and securing
Indebtedness incurred pursuant to Section 6.01(a)(xi).
SECTION 6.03. Fundamental Changes. (a) The Borrower will not,
nor will it permit any Restricted Subsidiary to, merge into or consolidate with
any other Person, or permit any other Person to merge into or consolidate with
it, or liquidate or dissolve, except that, if at the time thereof and
immediately after giving effect thereto no Default shall have occurred and be
continuing (i) any Person may merge into the Borrower in a transaction in which
the Borrower is the surviving corporation, (ii) any Person may merge with or
into any Restricted Subsidiary in a transaction in which the surviving entity is
or becomes a
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Wholly Owned Restricted Subsidiary and a Subsidiary Loan Party; provided that
any such merger involving a Person that is not a Wholly Owned Restricted
Subsidiary immediately prior to such merger shall not be permitted unless also
permitted by Section 6.04 and (iii) any Restricted Subsidiary may liquidate or
dissolve if the Borrower determines in good faith that such liquidation or
dissolution is in the best interests of the Borrower and is not materially
disadvantageous to the Lenders.
(b) The Borrower will not, and will not permit any of its
Restricted Subsidiaries to, engage to any material extent in any business other
than businesses of the type conducted by the Borrower and its Restricted
Subsidiaries on the date of execution of this Agreement and businesses
reasonably related thereto. The Borrower will not permit LOL Finance or any
subsidiary of LOL Finance to engage in any business other than the making of
loans to third parties to finance their operations, their purchases of goods or
services, or the construction of facilities and activities directly related to
the funding and sale of such loans.
SECTION 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions. The Borrower will not, and will not permit any of its Restricted
Subsidiaries to, purchase, hold or acquire (including pursuant to any merger
with any Person that was not a Wholly Owned Restricted Subsidiary prior to such
merger) any Equity Interests in or evidences of indebtedness or other securities
(including any option, warrant or other right to acquire any of the foregoing)
of, make or permit to exist any loans or advances to, Guarantee any obligations
of, or make or permit to exist any investment or any other interest in, any
other Person, or purchase or otherwise acquire (in one transaction or a series
of transactions) any assets of any other Person constituting a business unit,
except:
(a) the Acquisition;
(b) Permitted Investments;
(c) investments existing on the date hereof and set forth on
Schedule 6.04;
(d) investments by the Borrower and the Restricted
Subsidiaries in Equity Interests in Subsidiary Loan Parties; provided
that any such Equity Interests held by a Loan Party shall be pledged
pursuant to the Collateral Agreement;
69
(e) loans or advances made by the Borrower to any Subsidiary
and made by any Restricted Subsidiary to the Borrower or any other
Subsidiary; provided that (i) any such loans and advances made by a
Loan Party shall be pledged pursuant to the Collateral Agreement and
(ii) the amount of such loans and advances made after the date hereof
by Loan Parties to Subsidiaries that are not Loan Parties, including to
LOL Finance and its subsidiaries, shall be subject to the limitation
set forth in clause (m) below;
(f) Guarantees constituting Indebtedness permitted by Section
6.01; provided that the aggregate principal amount of Indebtedness of
Subsidiaries that are not Loan Parties (including LOL Finance and its
subsidiaries) that is Guaranteed after the date hereof by Loan Parties
shall be subject to the limitation set forth in clause (m) below;
(g) investments in Equity Interests of CoBank required to be
made in accordance with CoBank's bylaws and capital plans applicable to
cooperative borrowers generally;
(h) investments consisting of non-cash consideration received
in connection with sales of assets permitted by Section 6.05;
(i) investments consisting of Sellers' Retained Interests in
Securitizations permitted by Section 6.05;
(j) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes
with, customers and suppliers, in each case in the ordinary course of
business;
(k) acquisitions of Persons that, upon consummation of such
acquisitions, become Subsidiary Loan Parties or are merged into the
Borrower in a transaction permitted by Section 6.03, provided that the
consideration for such acquisitions consists solely of Equity Interests
and obligations of the Borrower to pay patronage and revolvements;
(l) investments by LOL Finance and its Wholly Owned
Subsidiaries consisting of loans made or acquired by them in the
ordinary course of business not in excess of $100,000,000 in the
aggregate at any time outstanding (excluding the amount of any such
loans sold (including by way of participation sales) in a
70
non-recourse sale transaction as permitted by Section 6.05(h); and
(m) other investments by the Borrower and the Restricted
Subsidiaries not otherwise permitted hereby, provided that the
aggregate amount of all such investments, together with the aggregate
amount of loans and advances to, and Guarantees of Indebtedness of,
Subsidiaries that are not Loan Parties (including LOL Finance and its
subsidiaries), made by Loan Parties pursuant to clauses (e) and (f)
above, shall not exceed $50,000,000 at any time outstanding.
SECTION 6.05. Asset Sales. The Borrower will not, and will not
permit any of the Restricted Subsidiaries to, sell, transfer, lease or otherwise
dispose of any asset, including any Equity Interest owned by it, nor will the
Borrower permit any of the Restricted Subsidiaries to issue any additional
Equity Interest in such Restricted Subsidiary, except:
(a) sales of inventory, used or surplus equipment
and Permitted Investments in the ordinary course of
business;
(b) sales, transfers and dispositions to the Borrower or a
Subsidiary; provided that (i) any such sales, transfers or dispositions
involving a Subsidiary that is not a Loan Party shall be made in
compliance with Section 6.09 and (ii) the cumulative aggregate fair
market value of sales, transfers and dispositions to Subsidiaries that
are not a Loan Party (other than for cash consideration) shall not
exceed $50,000,000;
(c) sales, transfers or other dispositions of the following:
(i) the Borrower's swine production facilities located in Beaver
County, Oklahoma, (ii) the Borrower's interest in Malta Cleyton; (iii)
the Borrower's or its Restricted Subsidiaries sale of certain feed
xxxxx as set forth in Schedule 6.05(a) and (iv) certain other asset
sales or Equity Interest dispositions in progress on the date hereof as
set forth on Schedule 6.05(b);
(d) sales, transfers and other dispositions of assets (other
than sales, transfers or dispositions of less than 100% of the Equity
Interests in a Restricted Subsidiary owned by the Borrower and the
Restricted Subsidiaries) that are not permitted by any other clause of
this Section; provided that (i) the aggregate fair market value of all
assets sold, transferred or
71
otherwise disposed of in reliance upon this clause (d) shall not exceed
$50,000,000 during any fiscal year of the Borrower and (ii) for
purposes of clause (i), the fair market value of Equity Interests in a
Restricted Subsidiary shall in any event be deemed to be at least equal
to the sum of the purchase price and all Indebtedness of such
Restricted Subsidiary transferred as part of, or other Indebtedness
assumed by the transferee or its Affiliates in connection with, such
sale, transfer or disposition;
(e) the sale to one or more Securitization Vehicles of
accounts receivable (including Account Assets) or inventory in
Securitizations, provided that (i) each such Securitization is effected
on market terms, (ii) the aggregate amount of Third Party Securities in
respect of all such Securitizations does not exceed $200,000,000 at any
time outstanding and (iii) an amount equal to the Net Proceeds from
each such Securitization is applied to the mandatory repayment of Loans
in accordance with Sections 2.09(b) and (d);
(f) issuances of Equity Interests of Restricted Subsidiaries
that are pledged under the Security Documents;
(g) cash lease payments in respect of leases of surplus
warehouse and office space entered into in the ordinary course of
business on arms length terms; and
(h) the sale by LOL Finance in the ordinary course of its
business of (i) loans made in the ordinary course of business and (ii)
participations in loans made in the ordinary course of business,
provided that the amount of such participations shall not exceed
$75,000,000 in the aggregate at any time outstanding;
provided that all sales, transfers, leases and other dispositions permitted
hereby (other than those among Loan Parties permitted by clause (b) above) shall
be made for fair value and for at least 80% cash consideration, provided further
that non-cash consideration in excess of 20% of the consideration for any such
sales, transfers, leases and other dispositions may be received in an aggregate
cumulative amount not in excess of $50,000,000 in fair value.
SECTION 6.06 Sale and Leaseback Transactions. The Borrower will not,
and will not permit any Restricted
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Subsidiary to, enter into any Sale-Leaseback Transaction except:
(a) Sale-Leaseback Transactions to which the Borrower or any
Restricted Subsidiary is a party as of the date hereof; and
(b) other Sale-Leaseback Transactions; provided that the sum,
without duplication, of (i) the aggregate principal amount of
Indebtedness secured by Liens permitted by Section 6.02(vii) and (ii)
the aggregate Attributable Debt in respect of Sale-Leaseback
Transactions permitted by this clause (b), does not at any time exceed
$75,000,000.
SECTION 6.07. Hedging Agreements. The Borrower will not, and
will not permit any of its Restricted Subsidiaries to, enter into any Hedging
Agreement, other than Hedging Agreements entered into in the ordinary course of
business to hedge or mitigate risks to which the Borrower or any Restricted
Subsidiary is exposed in the conduct of its business or the management of its
liabilities.
SECTION 6.08. Restricted Payments; Certain Payments of
Indebtedness. (a) The Borrower will not, nor will it permit any Restricted
Subsidiary to, declare or make, or agree to pay or make, directly or indirectly,
any Restricted Payment, or incur any obligation (contingent or otherwise) to do
so, except:
(i) Restricted Subsidiaries may declare and pay dividends
ratably with respect to their capital stock;
(ii) the Borrower may make Restricted Payments consisting of
cash payments of patronage dividends and of revolvements and
redemptions of equity (x) so long as no Default has occurred and is
continuing, (I) until such time as the Index Debt ratings of S&P and
Xxxxx'x are BBB- or better and Baa3 or better, respectively, in an
aggregate cumulative amount with respect to all such payments made on
or after January 1, 2001, not in excess of 50% of cumulative
Consolidated Net Income from and after January 1, 2000 (taken as a
single accounting period and excluding, in the computation thereof, up
to $51,000,000 of losses relating to the Acquisition recognized in the
fiscal year ending December 31, 2001) and (II) when the Index Debt
ratings of S&P and Xxxxx'x are investment grade, in an amount paid in
any fiscal year which, when taken together with the aggregate amount of
repurchases of Senior Notes pursuant to Section 6.08(b)(ii) in such
fiscal year, is
73
not in excess of 100% of Consolidated Net Income for the immediately
preceding fiscal year; and (y) if a Default has occurred and is
continuing, in the minimum amount necessary to permit each allocation
of the Borrower's patronage earnings to a member to be deemed a
"qualified written notice of allocation" as defined in Section
1388(c)(1) of the Internal Revenue Code; and
(iii) the Borrower may pay dividends not exceeding $100,000
per annum with respect to its preferred stock issued and outstanding as
of the Closing Date in accordance with the terms thereof on the Closing
Date .
(b) The Borrower will not permit any Restricted Subsidiary to,
make or agree to pay or make, directly or indirectly, any payment or other
distribution (whether in cash, securities or other property) of or in respect of
principal of or interest on any Indebtedness, any indebtedness owed to the trust
entity that has issued the Capital Securities, or any payment or other
distribution (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancelation or termination of any Indebtedness, except:
(i) payment of Indebtedness created under the Loan
Documents and the Related Credit Facility;
(ii) payment of regularly scheduled interest and principal
payments as and when due in respect of any Indebtedness, other than
payments in respect of the Capital Securities prohibited by the
subordination provisions thereof;
(iii) mandatory payments by a Securitization Vehicle
on Third Party Securities;
(iv) purchases of Senior Notes; provided that (i) the
Borrower's Index Debt ratings of S&P and Xxxxx'x are BBB- or better and
Baa3 or better, respectively, at the time of any such purchase, (ii)
the amount of such purchases in any fiscal year, when aggregated with
all Restricted Payments made pursuant to Section 6.08(a)(ii)(II) in
such fiscal year, does not equal more than 100% of Consolidated Net
Income for the immediately preceding fiscal year and (iii) no Default
exists at the time of any such purchase;
74
(v) refinancings of Indebtedness to the extent permitted by
Section 6.01; and
(vi) payment of secured Indebtedness that becomes due as a
result of the voluntary sale or transfer of the property or assets
securing such Indebtedness.
SECTION 6.09. Transactions with Affiliates. The Borrower will
not, and will not permit any Restricted Subsidiary to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any
of its Affiliates, except (a) transactions in the ordinary course of business
that are at prices and on terms and conditions not less favorable to the
Borrower or such Restricted Subsidiary than could be obtained on an arm's-length
basis from unrelated third parties, (b) transactions between or among the
Borrower and the Subsidiary Loan Parties not involving any other Affiliate, (c)
any Restricted Payment permitted by Section 6.08 and (d) Securitizations
permitted by Sections 6.01 and 6.02.
SECTION 6.10. Restrictive Agreements. The Borrower will not,
and will not permit any Restricted Subsidiary to, directly or indirectly, enter
into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (a) the ability of the
Borrower or any Restricted Subsidiary to create, incur or permit to exist any
Lien upon any of its property or assets, or (b) the ability of any Restricted
Subsidiary to pay dividends or other distributions with respect to any shares of
its capital stock or to make or repay loans or advances to the Borrower or any
other Restricted Subsidiary or to Guarantee Indebtedness of the Borrower or any
other Restricted Subsidiary; provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by law, by any Loan Document, by the Related
Credit Facility, by the Senior Note Documents or by the CoBank Receivables Loan
Agreement (provided that the restrictions in the CoBank Receivables Loan
Agreement are no more restrictive than those contained in this Agreement), (ii)
the foregoing shall not apply to restrictions and conditions existing on the
date hereof identified on Schedule 6.10 (but shall apply to any amendment or
modification expanding the scope of, any such restriction or condition), (iii)
the foregoing shall not apply to customary restrictions and conditions contained
in agreements relating to the sale of a Restricted Subsidiary pending such sale,
provided such restrictions and conditions apply only to the Restricted
Subsidiary that is to be sold and such sale is
75
permitted hereunder, (iv) clause (a) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness, (v) clause (a)
of the foregoing shall not apply to customary provisions in leases restricting
the assignment thereof and (vi) the foregoing shall not apply to agreements
governing permitted Indebtedness and loan participation agreements permitted by
Section 6.05(h) of LOL Finance or its Wholly Owned Subsidiaries so long as any
restrictions therein apply only to LOL Finance and/or its subsidiaries.
SECTION 6.11. Amendment of Material Documents. The Borrower
will not, and will not permit any Restricted Subsidiary to, amend, modify or
waive any of its rights under (a) any agreement governing Material Indebtedness
(including the CoBank Receivables Loan Agreement, but excluding the Related
Credit Facility) or (b) its certificate of incorporation, by-laws or other
organizational documents that, in any case referred to in clause (a) or (b),
could reasonably be expected to be adverse in any significant respect to the
interests of the Lenders.
SECTION 6.12. Interest Expense Coverage Ratio. The Borrower
will not permit the ratio of (a) Consolidated EBITDA to (b) Consolidated Cash
Interest Expense, for any period of four consecutive fiscal quarters to be less
than 2.50 to 1.00.
SECTION 6.13. Leverage Ratio. The Borrower will not permit the
Leverage Ratio as of any date during any period set forth below to exceed the
ratio set forth opposite such period:
Period Ratio
------ -----
October 11, 2001 through 4.75 to 1.00
October 11, 2002
October 11, 2002 through 4.25 to 1.00
October 11, 2003
October 11, 2003 and 3.75 to 1.00
thereafter
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ARTICLE VII
Events of Default
If any of the following events ("Events of Default") shall
occur:
(a) the Borrower shall fail to pay any principal of any Loan
when and as the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or
any fee or any other amount (other than an amount referred to in clause
(a) of this Article) payable under this Agreement or any other Loan
Document, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of five days;
(c) any representation or warranty made or deemed made by or
on behalf of the Borrower or any Restricted Subsidiary in or in
connection with any Loan Document or any amendment or modification
thereof or waiver thereunder, or in any report, certificate, financial
statement or other document furnished pursuant to or in connection with
any Loan Document or any amendment or modification thereof or waiver
thereunder, shall prove to have been incorrect in any material respect
when made or deemed made;
(d) the Borrower shall fail to observe or perform any
covenant, condition or agreement contained in Section 5.02, 5.04 (with
respect to the existence of the Borrower), 5.11 or 5.13(c) or in
Article VI;
(e) any Loan Party shall fail to observe or perform any
covenant, condition or agreement contained in any Loan Document (other
than those specified in clause (a), (b) or (d) of this Article), and
such failure shall continue unremedied for a period of 30 days after
notice thereof from the Administrative Agent to the Borrower (which
notice will be given at the request of any Lender);
(f) the Borrower or any Restricted Subsidiary shall fail to
make any payment (whether of principal or interest and regardless of
amount) in respect of any Material Indebtedness, when and as the same
shall become due and payable;
77
(g) (i) an "Event of Default" occurs under the Related Credit
Facility or (ii) any event or condition occurs that results in any
Material Indebtedness becoming due prior to its scheduled maturity or
that enables or permits the holder or holders of any Material
Indebtedness or any trustee or agent on its or their behalf to cause
any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; provided that this clause (g) shall not apply to secured
Indebtedness that becomes due as a result of the voluntary sale or
transfer of the property or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Borrower or any
Restricted Subsidiary or its debts, or of a substantial part of its
assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Restricted
Subsidiary or for a substantial part of its assets, and, in any such
case, such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing
shall be entered;
(i) the Borrower or any Restricted Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition
described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Restricted
Subsidiary or for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in
any such proceeding, (v) make a general assignment for the benefit of
creditors or (vi) adopt any resolutions for the purpose of effecting
any of the foregoing;
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(j) the Borrower or any Restricted Subsidiary shall become
unable, admit in writing its inability or fail generally to pay its
debts as they become due;
(k) one or more judgments for the payment of money in an
aggregate amount in excess of $10,000,000 shall be rendered against the
Borrower, any Restricted Subsidiary or any combination thereof and the
same shall remain undischarged for a period of 30 consecutive days
during which execution shall not be effectively stayed, or any action
shall be legally taken by a judgment creditor to attach or levy upon
any assets of the Borrower or any Restricted Subsidiary to enforce any
such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other ERISA Events
that have occurred, could reasonably be expected to result in a
Material Adverse Effect;
(m)any Guarantee or Lien purported to be created under any
Security Document shall cease to be, or shall be asserted by any Loan
Party not to be, a valid Guarantee or a perfected Lien on any material
Collateral, with the priority required by the applicable Security
Document, except (i) as a result of the sale or other disposition of
the applicable Collateral or the release of the applicable Loan Party
in a transaction permitted under the Loan Documents or (ii) as a result
of the Administrative Agent's failure to file any necessary
continuation statements or to maintain possession of any stock
certificates, promissory notes or other instruments delivered to it
under the Collateral Agreement; or
(n) a Change in Control shall occur;
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and
79
payable, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower; and in case of any event with
respect to the Borrower described in clause (h) or (i) of this Article, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower.
ARTICLE VIII
The Agent
Each of the Lenders hereby irrevocably appoints the Agent as
its agent and authorizes the Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Agent by the terms of the Loan
Documents, together with such actions and powers as are reasonably incidental
thereto.
The bank serving as the Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Agent, and such bank and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Borrower or any Subsidiary or other Affiliate thereof
as if it were not the Agent hereunder.
The Agent shall not have any duties or obligations except
those expressly set forth in the Loan Documents. Without limiting the generality
of the foregoing, (a) the Agent shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(b) the Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by the Loan Documents that the Agent is required to
exercise in writing by the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 9.02), and (c) except as expressly set forth in the Loan Documents, the
Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Borrower or any of
80
its Subsidiaries that is communicated to or obtained by the bank serving as
Agent or any of its Affiliates in any capacity. The Agent shall not be liable
for any action taken or not taken by it with the consent or at the request of
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 9.02) or in the
absence of its own gross negligence or wilful misconduct. The Agent shall not be
deemed not to have knowledge of any Default unless and until written notice
thereof is given to the Agent by the Borrower or a Lender, and the Agent shall
not be responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with any Loan
Document, (ii) the contents of any certificate, report or other document
delivered thereunder or in connection therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth in any Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of any Loan Document or any other agreement, instrument or document,
or (v) the satisfaction of any condition set forth in Article IV or elsewhere in
any Loan Document, other than to confirm receipt of items expressly required to
be delivered to the Agent.
The Agent shall be entitled to rely upon, and shall not incur
any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Agent also may rely
upon any statement made to it orally or by telephone and believed by it to be
made by the proper Person, and shall not incur any liability for relying
thereon. The Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.
The Agent may perform any and all its duties and exercise its
rights and powers by or through any one or more sub-agents appointed by the
Agent. The Agent and any such sub-agent may perform any and all its duties and
exercise its rights and powers through their respective Related Parties. The
exculpatory provisions of the preceding paragraphs shall apply to any such
sub-agent and to the Related Parties of each Agent and any such sub-agent, and
shall apply to their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities as Agent.
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Subject to the appointment and acceptance of a successor Agent
as provided in this paragraph, the Agent may resign at any time by notifying the
Lenders and the Borrower. Upon any such resignation, the Required Lenders shall
have the right, in consultation with the Borrower, to appoint a successor. If no
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Agent gives notice
of its resignation, then the retiring Agent may, on behalf of the Lenders
appoint a successor Agent which shall be a bank with an office in New York, New
York, or an Affiliate of any such bank. Upon the acceptance of its appointment
as Agent hereunder by a successor, such successor shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Borrower to a successor Agent shall be the
same as those payable to its predecessor unless otherwise agreed between the
Borrower and such successor. After the Agent's resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for the
benefit of such retiring Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while it was acting as Agent.
Each Lender acknowledges that it has, independently and
without reliance upon the Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or related agreement
or any document furnished hereunder or thereunder.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
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(a) if to the Borrower, to it at Land O' Lakes, Inc., 0000
Xxxxxxxxx Xxxxxx Xxxxx, Xxxxx Xxxx, XX 00000, Attention of Treasurer
(Telecopy No. 651-481-2086);
(b) if to the Administrative Agent, to The Chase Manhattan
Bank, Loan and Agency Services Group, One Chase Xxxxxxxxx Xxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxxx Xxxxxx (Telecopy
No. (000) 000-0000), with a copy to The Chase Manhattan Bank, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxx Xxxxxxx (Telecopy
No. (000) 000-0000);
(c) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by
the Agent or any Lender in exercising any right or power hereunder or under any
other Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Agent and the Lenders hereunder and under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of any Loan Document or
consent to any departure by any Loan Party therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan shall not be construed as a waiver of any
Default, regardless of whether the Agent or any Lender may have had notice or
knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or, in the
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case of any other Loan Document, pursuant to an agreement or agreements in
writing entered into by the Agent and the Loan Party or Loan Parties that are
parties thereto, in each case with the consent of the Required Lenders; provided
that no such agreement shall (i) increase the Commitment of any Lender without
the written consent of such Lender, (ii) reduce the principal amount of any Loan
or reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the
maturity of any Loan, or any scheduled date of payment of the principal amount
of any Loan under Section 2.08, or any date for the payment of any interest or
fees payable hereunder, or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date of expiration of any Commitment, without
the written consent of each Lender affected thereby, (iv) change Section 2.16(b)
or (c) in a manner that would alter the pro rata sharing of payments required
thereby, without the written consent of each Lender, (v) change any of the
provisions of this Section or the percentage set forth in the definition of
"Required Lenders" or any other provision of any Loan Document specifying the
number or percentage of Lenders (or Lenders of any Class) required to waive,
amend or modify any rights thereunder or make any determination or grant any
consent thereunder, without the written consent of each Lender (or each Lender
of such Class, as the case may be), (vi) release any Subsidiary Loan Party from
its Guarantee under the Collateral Agreement (except as expressly provided in
the Collateral Agreement), or limit its liability in respect of such Guarantee,
without the written consent of each Lender, (vii) release all or substantially
all of the Collateral from the Liens of the Security Documents, without the
written consent of each Lender, (viii) change any provisions of any Loan
Document in a manner that by its terms adversely affects the rights in respect
of payments due to Lenders holding Loans of any Class differently than those
holding Loans of any other Class, without the written consent of Lenders holding
a majority in interest of the outstanding Loans and unused Commitments of each
affected Class or (ix) change the rights of the Tranche B Lenders to decline
mandatory prepayments as provided in Section 2.09, without the written consent
of Tranche B Lenders holding a majority of the outstanding Tranche B Loans;
provided further that (A) no such agreement shall amend, modify or otherwise
affect the rights or duties of the Agent without the prior written consent of
the Agent and (B) any waiver, amendment or modification of this Agreement that
by its terms affects the rights or duties under this Agreement of the Lenders of
any Class (but not the Lenders of the other Classes) may be effected by an
agreement or agreements in writing entered into by the
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Borrower and requisite percentage in interest of the affected Class of Lenders
that would be required to consent thereto under this Section if such Class of
Lenders were the only Class of Lenders hereunder at the time. Notwithstanding
the foregoing, any provision of this Agreement may be amended by an agreement in
writing entered into by the Borrower, the Required Lenders and the Agent if (i)
by the terms of such agreement the Commitment of each Lender not consenting to
the amendment provided for therein shall terminate upon the effectiveness of
such amendment and (ii) at the time such amendment becomes effective, each
Lender not consenting thereto receives payment in full of the principal of and
interest accrued on each Loan made by it and all other amounts owing to it or
accrued for its account under this Agreement. Notwithstanding the foregoing, the
Agent and the Borrower may at any time enter into an amendment hereto which
increases the Applicable Rate with respect to the Tranche C Term Loans, and such
amendment will be effective without the consent of any Lenders.
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
Agent and its Affiliates, including the reasonable fees, charges and
disbursements of counsel for the Agent, in connection with the syndication of
the credit facilities provided for herein, the preparation and administration of
the Loan Documents or any amendments, modifications or waivers of the provisions
thereof (whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the
Administrative Agent or any Lender, including the reasonable fees, charges and
disbursements of any counsel for the Administrative Agent or any Lender, in
connection with the enforcement or protection of its rights in connection with
the Loan Documents, including its rights under this Section, or in connection
with the Loans made hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans.
(b) The Borrower shall indemnify the Agent and each Lender,
and each Related Party of any of the foregoing Persons (each such Person being
called an "Indemnitee") against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related expenses, including the
reasonable fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the execution or delivery of any Loan Document or
any other agreement or instrument contemplated hereby, the performance by the
parties to the Loan Documents
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of their respective obligations thereunder or the consummation of the
Transactions or any other transactions contemplated hereby, (ii) any Loan or the
use of the proceeds therefrom, (iii) any actual or alleged presence or release
of Hazardous Materials on or from any Mortgaged Property or any other property
currently or formerly owned or operated by the Borrower or any of its
Subsidiaries, or any Environmental Liability related in any way to the Borrower
or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or wilful
misconduct of such Indemnitee (it being understood that the violation by a
Lender or the Agent of any applicable law or regulation shall constitute gross
negligence); provided, further, that the fees, disbursements and other charges
of counsel with respect to any claim, litigation or proceeding shall be limited
to one firm of counsel in each relevant jurisdiction to jointly represent all
such Indemnitees, so long as (i) no conflict or potential conflict exists as a
result of such joint representation and (ii) no Indemnitee has reasonably
concluded that there may be legal defenses available to it that are different
from or in addition to those available to the other Indemnitees.
(c) To the extent that the Borrower fails to pay any amount
required to be paid by it to the Administrative Agent under paragraph (a) or (b)
of this Section, each Lender severally agrees to pay to the Administrative Agent
such Lender's pro rata share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent in its capacity as such. For purposes hereof, a
Lender's "pro rata share" shall be determined based upon its share of the sum of
the outstanding Term Loans or unused Commitments at the time.
(d) To the extent permitted by applicable law, the Borrower
shall not assert, and hereby waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in
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connection with, or as a result of, this Agreement or any agreement or
instrument contemplated hereby, the Transactions, any Loan or the use of the
proceeds thereof. No Indemnitee shall be liable for the use by others of
Information (as defined in Section 9.12) or other materials obtained through
electronic telecommunications or other information transmission systems
(including as a result of any misdirected facsimile transmission); provided,
that (except in the case of a misdirected facsimile transmission) such
indemnified person shall have taken reasonable precautions to ensure, or shall
have made reasonable investigation to believe in, the reliability of such
transmission system.
(e) All amounts due under this Section shall be payable
promptly after written demand therefor.
SECTION 9.04. Successors and Assigns. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby, except that
the Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrower without such consent shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided that
(i) except in the case of an assignment to a Lender or an Affiliate of a Lender,
each of the Borrower and the Administrative Agent must give their prior written
consent to such assignment (which consent shall not be unreasonably withheld),
(ii) except in the case of an assignment to a Lender or an Affiliate of a Lender
or an assignment of the entire remaining amount of the assigning Lender's
Commitment or Loans, the amount of the Commitment or Loans of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 (or $1,000,000 in the
case of Tranche B Term Loans) unless each of the Borrower and the Administrative
Agent otherwise consent, (iii) each partial
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assignment shall be made as an assignment of a proportionate part of all the
assigning Lender's rights and obligations under this Agreement, except that this
clause (iii) shall not be construed to prohibit the assignment of a
proportionate part of all the assigning Lender's rights and obligations in
respect of one Class of Commitments or Loans, (iv) the parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment
and Acceptance, together with a processing and recordation fee of $3,500, and
(v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; and provided further that
any consent of the Borrower otherwise required under this paragraph shall not be
required if an Event of Default under clause (h) or (i) of Article VII has
occurred and is continuing. Subject to acceptance and recording thereof pursuant
to paragraph (d) of this Section, from and after the effective date specified in
each Assignment and Acceptance the assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such Assignment and Acceptance,
have the rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of the
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.13, 2.14, 2.15 and 9.03). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an
agent of the Borrower, shall maintain at one of its offices in The City of New
York a copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the Commitment
of, and principal amount of the Loans owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive, and the Borrower, the Administrative Agent and the Lenders
may treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower and any Lender,
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at any reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
(a "Participant") in all or a portion of such Lender's rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans
owing to it); provided that (i) such Lender's obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii) the
Borrower, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce the Loan Documents and to approve any amendment,
modification or waiver of any provision of the Loan Documents; provided that
such agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such Participant.
Subject to paragraph (f) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.13, 2.14 and 2.15 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section. To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 9.08 as
though it were a Lender, provided such Participant agrees to be subject to
Section 2.16(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.13 or 2.15 than the applicable Lender would have been
entitled to receive
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with respect to the participation sold to such Participant, unless the sale of
the participation to such Participant is made with the Borrower's prior written
consent. A Participant that would be a Foreign Lender if it were a Lender shall
not be entitled to the benefits of Section 2.15 unless the Borrower is notified
of the participation sold to such Participant and such Participant agrees, for
the benefit of the Borrower, to comply with Section 2.15(e) as though it were a
Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
SECTION 9.05. Survival. All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Administrative Agent or any Lender may have had
notice or knowledge of any Default or incorrect representation or warranty at
the time any credit is extended hereunder, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
fee or any other amount payable under this Agreement is outstanding and unpaid
and so long as the Commitments have not expired or terminated. The provisions of
Sections 2.13, 2.14, 2.15 and 9.03 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans and the Commitments or the
termination of this Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement,
the other Loan Documents
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and any separate letter agreements with respect to fees payable to the
Administrative Agent constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other obligations at
any time owing by such Lender or Affiliate to or for the credit or the account
of the Borrower against any of and all the obligations of the Borrower now or
hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff) which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service
of Process. (a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally
submits, for itself and its property, to the
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nonexclusive jurisdiction of the Supreme Court of the State of New York sitting
in New York County and of the United States District Court of the Southern
District of New York, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to any Loan Document, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York State or, to
the extent permitted by law, in such Federal court. Each of the parties hereto
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. Nothing in this Agreement or any other Loan
Document shall affect any right that the Administrative Agent or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement or
any other Loan Document against the Borrower or its properties in the courts of
any jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any other
Loan Document in any court referred to in paragraph (b) of this Section. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.01. Nothing
in this Agreement or any other Loan Document will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
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ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Administrative
Agent and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory or insurance authority, (c) to the extent
required by applicable laws or regulations or by any subpoena or similar legal
process, (d) to any other party to this Agreement, (e) in connection with the
exercise of any remedies hereunder or any suit, action or proceeding relating to
this Agreement or any other Loan Document or the enforcement of rights hereunder
or thereunder, (f) subject to an agreement containing provisions substantially
the same as those of this Section, to any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement, (g) with the consent of the Borrower or (h) to the extent
such Information (i) becomes publicly available other than as a result of a
breach of this Section or (ii) becomes available to the Administrative Agent or
any Lender on a nonconfidential basis from a source other than the Borrower;
provided, that the disclosing party shall use reasonable efforts under the
circumstances, to the extent permitted by law, to notify the Borrower prior to,
or as soon as practicable thereafter, of any disclosure made pursuant to clauses
(b) or (c) above. For the purposes of this Section. For the purposes of this
Section, "Information" means all information received from the Borrower relating
to the Borrower or its business, other than any such information that is
available to the Administrative Agent or any Lender on a nonconfidential basis
prior to disclosure by the Borrower. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
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SECTION 9.13. Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts which are treated as
interest on such Loan under applicable law (collectively the "Charges"), shall
exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
SIGNATURE PAGE TO THE LAND O'LAKES, INC. TERM CREDIT AGREEMENT DATED AS OF
OCTOBER 2001.
LAND O'LAKES, INC., BANK: AgFirst Farm Credit Bank
by: /s/ Xxx Xxxxxxx by: /s/ Xxxx X. Xxxxxxxx Xx.
----------------------------- -----------------------------
Name: Xxx Xxxxxxx Name: Xxxx X. Xxxxxxxx Xx.
Title: Senior Vice President & Title: Vice President
Chief Financial
Officer
---------------------------------
THE CHASE MANHATTAN BANK, by:
individually and as Administrative -----------------------------
Agent, Name:
Title:
by: /s/ Xxxxxx Xxxxxxxxx
-----------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Vice President
BANK: CoBank, ACB BANK: Bank of Communications,
New York Branch
by: /s/ Xxxxx Xxxxxx
-----------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
n/a
---------------------------------
by:
-----------------------------
Name:
Title:
95
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
SIGNATURE PAGE TO THE LAND O'LAKES, INC. TERM CREDIT AGREEMENT DATED AS OF
OCTOBER 2001.
BANK: LAGUNA FUNDING TRUST BANK: ING (U.S.) CAPITAL LLC
by: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
---------------------------------
by:
-----------------------------
Name:
Title:
BANK: STANWICH LOAN FUNDING LLC BANK: KZH ING-2 LLC
by: /s/ Xxx X. Xxxxxx by: /s/ Xxxxx Xxx
-------------------------------- -----------------------------
Name: Xxx X. Xxxxxx Name: Xxxxx Xxx
Title: Asst. Vice President Title: Authorized Agent
-----------------------------------
by:
-------------------------------
Name:
Title:
BANK: KZH ING-1 LLC BANK: KZH RIVERSIDE LLC
by: /s/ Xxxxx Xxx by:
------------------------------- -----------------------------
Name: Xxxxx Xxx
Title: Authorized Agent
96
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
SIGNATURE PAGE TO THE LAND O'LAKES, INC. TERM CREDIT AGREEMENT DATED AS OF
OCTOBER 2001.
BANK: KZH ING-3 LLC XXXXXXXXXXX SENIOR FLOATING RATE FUND
by: /s/ Xxxxx Xxxxxx
-----------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
---------------------------------
by:
-----------------------------
Name:
Title:
BANK: KZH SHOSHONE LLC BANK: PROTECTIVE LIFE INSURANCE
COMPANY
by: /s/ Xxxxx Xxx by: /s/ Xxxxx X. Xxxxxxxx
------------------------------ -----------------------------
Name: Xxxxx Xxx Name: Xxxxx X. Xxxxxxxx
Title: Authorized Agent Title: Assistant Vice
President
---------------------------------
by: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Vice President
BANK: METROPOLITAN LIFE INSURANCE BANK: COOPERATIVE CENTRALE
COMPANY RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK
INTERNATIONAL", NEW YORK BRANCH
by: /s/ Xxxxx X. Xxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Director
----------------------------------
by:
------------------------------
Name:
Title:
97
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
SIGNATURE PAGE TO THE LAND O'LAKES, INC. TERM CREDIT AGREEMENT DATED AS OF
OCTOBER 2001.
Name: Xxx Xxxxx
98
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
SIGNATURE PAGE TO THE LAND O'LAKES, INC. TERM CREDIT AGREEMENT DATED AS OF
OCTOBER 2001.
BANK: PRINCIPAL LIFE INSURANCE COMPANY BANK: THE BANK OF TOKYO-MITSUBISHI,
LTD., CHICAGO BRANCH
by: /s/ Xxxxxxx XxXxx
-----------------------------
Name: Xxxxxxx XxXxx
Title: Vice President &
Manager
---------------------------------
by:
----------------------------
Name:
Title:
BANK: SunTrust Bank BANK: XXXXX FARGO BANK, NATIONAL
ASSOCIATION
by: /s/ Xxxx X. Xxxxxx
------------------------------
Name: Xxxx X. Xxxxxx
Title: Director
----------------------------------
by:
------------------------------
Name:
Title:
99
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
SIGNATURE PAGE TO THE LAND O'LAKES, INC. TERM CREDIT AGREEMENT DATED AS OF
OCTOBER 2001.
BANK: U.S. BANK NATIONAL ASSOCIATION
