Exhibit 10.17
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PURCHASE AND SALE AGREEMENT
Dated as of December 18, 2001
By and Among
LAND O'LAKES, INC.,
LAND O'LAKES FARMLAND FEED LLC AND
PURINA XXXXX, LLC,
AS ORIGINATORS,
LAND O'LAKES FARMLAND FEED LLC,
AS INITIAL SERVICER,
AND
LOL FARMLAND FEED SPV, LLC,
AS THE SPV PURCHASER
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TABLE OF CONTENTS
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ARTICLE I: AMOUNTS AND TERMS OF THE PURCHASES.................................................................2
Section 1.1 Agreement to Purchase and Sell.........................................................2
Section 1.2 Timing of Purchases and Contributions..................................................3
Section 1.3 No Recourse............................................................................4
Section 1.4 True Sales.............................................................................5
Section 1.5 Consideration for Purchases............................................................5
ARTICLE II: CALCULATION OF PURCHASE PRICE.....................................................................6
Section 2.1 Calculation of Purchase Price..........................................................6
ARTICLE III: PAYMENT OF PURCHASE PRICE........................................................................8
Section 3.1 The Initial Purchase Price Payment.....................................................8
Section 3.2 Purchase Price Payments; SPV Purchaser Notes...........................................9
Section 3.3 Deemed Collections, Etc................................................................10
Section 3.4 Payments and Computations, Etc.........................................................11
ARTICLE IV: CONDITIONS TO PURCHASES...........................................................................11
Section 4.1 Conditions Precedent to Initial Purchase...............................................11
Section 4.2 Conditions Precedent to All Purchases..................................................14
Section 4.3 Certification as to Representations and Warranties.....................................14
Section 4.4 Effect of Payment of Purchase Price....................................................14
ARTICLE V: REPRESENTATIONS AND WARRANTIES.....................................................................15
Section 5.1 Representations and Warranties.........................................................15
ARTICLE VI: COVENANTS.........................................................................................19
Section 6.1 Affirmative Covenants..................................................................19
Section 6.2 Negative Covenants.....................................................................23
Section 6.3 Separate Existence.....................................................................24
ARTICLE VII: INDEMNIFICATION..................................................................................27
Section 7.1 Indemnities by the Originators.........................................................27
Section 7.2 Contribution...........................................................................30
Section 7.3 After-Tax Basis........................................................................30
ARTICLE VIII: ADMINISTRATION AND COLLECTIONS; ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF THE POOL
RECEIVABLES...................................................................................................30
Section 8.1 Servicing of Pool Receivables and Related Rights.......................................30
Section 8.2 Rights of the Initial Purchaser; Enforcement Rights....................................31
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Section 8.3 Responsibilities of the Originators....................................................32
Section 8.4 Further Action Evidencing Purchases....................................................33
ARTICLE IX: MISCELLANEOUS.....................................................................................34
Section 9.1 Amendments, Etc........................................................................34
Section 9.2 Notices, Etc...........................................................................34
Section 9.3 Acknowledgment and Consent.............................................................34
Section 9.4 Binding Effect; Assignability..........................................................35
Section 9.5 Costs, Expenses and Taxes..............................................................36
Section 9.6 No Proceedings; Limitation on Payments.................................................36
Section 9.7 GOVERNING LAW AND JURISDICTION.........................................................37
Section 9.8 Execution in Counterparts..............................................................37
Section 9.9 Survival of Termination................................................................37
Section 9.10 WAIVER OF JURY TRIAL...................................................................37
Section 9.11 Entire Agreement.......................................................................38
Section 9.12 Headings...............................................................................38
Section 9.13 Subordination of Obligations of SPV Purchaser..........................................38
Section 9.14 CoBank and Affiliates..................................................................41
Section 9.15 Confidentiality of Program Information.................................................41
DEFINITIONS.............................................................................................1
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APPENDIX
Appendix A (P&S) Definitions
SCHEDULES
Schedule 6.2 Lockbox Banks and Lockbox Accounts
Schedule 9.2 Legal Names and Addresses
EXHIBITS
Exhibit A Form of Purchase Report
Exhibit B Form of SPV Purchaser Note
Exhibit C Corporate Separateness Assumptions, Statements and
Representations
PURCHASE AND SALE AGREEMENT
Dated as of December 18, 2001
PREAMBLE
PURCHASE AND SALE AGREEMENT, dated as of December 18, 2001 (this
"Agreement"), by and between LAND O'LAKES, INC., a Minnesota cooperative
corporation ("LOL"), LAND O'LAKES FARMLAND FEED LLC, a Delaware limited
liability company ("Feed"), and PURINA XXXXX, LLC, a Delaware limited liability
company ("Purina"), as originators (each an "Originator" and collectively, the
"Originators") Feed, as initial Servicer, and LOL Farmland Feed SPV, LLC, a
Delaware limited liability company, as purchaser (the "SPV Purchaser"). Unless
otherwise indicated, capitalized terms used in this Agreement are defined in,
and the interpretative rules that apply are contained in, Appendix A (P&S)
attached hereto.
RECITALS
1. The SPV Purchaser is a limited purpose bankruptcy-remote Delaware
limited liability company, all of the issued and outstanding membership
interests of which are wholly-owned by Feed.
2. The SPV Purchaser has been formed for the sole purpose of purchasing
(and otherwise receiving) and selling the Receivables and Related Rights
originated by the Originators and engaging in related and incidental
transactions and purposes in the ordinary course of their businesses, and sold
by the Originators or contributed by Feed to the SPV Purchaser pursuant to this
Agreement.
3. Each of the Originators (other than Feed) wishes to sell, and Feed
wishes to sell and/or contribute, all of the Receivables and Related Rights that
it now owns, and from time to time hereafter will own or that it will from time
to time hereafter originate in the ordinary course of their respective
businesses, to the SPV Purchaser, and the SPV Purchaser is willing, on the terms
and subject to the conditions contained in this Agreement, to purchase or
acquire all such Receivables and Related Rights from the Originators.
4. The SPV Purchaser has entered into the Receivables Purchase
Agreement, pursuant to which, among other things, the SPV Purchaser may sell to
the Administrator, for the benefit of the Purchasers (collectively, the
"Purchaser"), undivided interests in the Receivables and Related Rights.
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NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties hereto agree as follows:
ARTICLE I: AMOUNTS AND TERMS OF THE PURCHASES
SECTION 1.1 Agreement to Purchase and Sell.
(a) On the terms and conditions hereinafter set forth, and in
consideration of the payment of the Purchase Price, to the extent not
contributed pursuant to Section 1.1(b), each of the Originators agrees to sell
to the SPV Purchaser, and the SPV Purchaser agrees to purchase from such
Originator, at the times set forth in Section 1.2, but prior to the Sale
Termination Date, all of such Originator's right, title, and interest in, to and
under:
(i) each Receivable (other than Initial Contributed
Receivables) of such Originator that existed and was owing to such
Originator as of the close of such Originator's business on the Initial
Cut-Off Date;
(ii) each Receivable originated by such Originator in the
ordinary course of its business from the close of such Originator's
business on the Initial Cut-Off Date, to and including the Sale
Termination Date;
(iii) all rights to, but not the obligations under, all
related Contracts and all Related Rights and Related Security with
respect to all Receivables described in paragraphs (i) and (ii) above;
(iv) all monies due or to become due with respect to the
foregoing;
(v) all books and records related to any of the foregoing;
(vi) all amounts on deposit in any lockbox account maintained
by such Originator to the extent constituting or representing items
described in paragraph (vii) below;
(vii) all Collections in respect of, and other proceeds (as
defined in the UCC) of, Receivables of such Originator or any other of
the foregoing received on or after the Initial Cut-Off Date, including,
without limitation, all funds which either are received by such
Originator, the SPV Purchaser or the Servicer or any Sub-Servicer from
or on behalf of the Obligors in payment of any amounts owed (including,
without limitation, finance charges, interest and all other charges) in
respect of Receivables, or are applied to such amounts owed by the
Obligors (including, without limitation, insurance payments, if any,
that such Originator or the Servicer or any Sub-Servicer
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applies in the ordinary course of its business to amounts owed in
respect of any Receivable and net proceeds of sale or other disposition
of repossessed goods or other collateral or property of the Obligors or
any other party directly or indirectly liable for payment of such
Receivable and available to be applied thereon).
All purchases and capital contributions hereunder shall be made without recourse
(except as otherwise provided in Section 1.3), but shall be made pursuant to and
in reliance upon the representations, warranties and covenants of the
Originators contained herein and of the Originators set forth in each of the
other Transaction Documents. The proceeds and rights and related security
described in subsections (iii) through (vii) of this Section 1.1(a) and in the
immediately preceding sentence are herein collectively referred to as the
"Related Rights".
(b) Agreement to Contribute. In consideration of the capital
stock of the SPV Purchaser issued to Feed, Feed agrees to contribute, and does
hereby contribute to the SPV Purchaser, and the SPV Purchaser agrees to accept,
and does hereby accept, from Feed, on the Initial Purchase Date, all of Feed's,
right, title and interest in, to and under (i) Receivables, and the Related
Rights with respect thereto, existing on the Initial Cut-Off Date, starting with
Receivables that do not constitute Eligible Receivables, such that the aggregate
Unpaid Balance of all such Receivables shall be as close as possible to, but not
less than $1,000,000 (the "Initial Contributed Receivables"), and (ii) from time
to time thereafter such Receivables, and the Related Rights with respect
thereto, that are indicated in a report given to the SPV Purchaser on the
Business Day following the origination thereof as having been contributed by
Feed to the capital of the SPV Purchaser (collectively, together with the
Initial Contributed Receivables, the "Contributed Receivables"). Feed agrees to
contribute, and does hereby contribute to the SPV Purchaser effective as of the
time set forth in Section 1.2, and the SPV Purchaser does hereby accept from
Feed, all of the Originators' right, title and interest in, to and under the
Initial Contributed Receivables and all other Contributed Receivables
contributed to the SPV Purchaser from time to time.
SECTION 1.2 Timing of Purchases and Contributions.
(a) Initial Purchase Date Purchase; No Liens or Claims on
Receivables or Related Rights. On the Initial Purchase Date under the
Receivables Purchase Agreement, each of the Originators shall sell to the SPV
Purchaser, and the SPV Purchaser shall purchase, pursuant to Section 1.1, such
Originator's entire right, title and interest in, to and under (i) each
Receivable (other than Receivables designated on the Purchase Report as Initial
Contributed Receivables) that existed and was owing to such Originator as of the
close of such Originator's business on the Initial Cut-Off Date, and (ii) all
Related Rights with respect thereto. Each Originator agrees, acknowledges,
confirms and covenants that the Receivables
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purchased by the SPV Purchaser hereunder on the Initial Purchase Date from such
Originator shall be owned by the SPV Purchaser, free and clear of any Lien or
claim of such Originator or any other party or Person, except any Lien arising
hereunder or under the Receivables Purchase Agreement.
(b) Regular Purchases and Contributions. After the Initial
Purchase Date and continuing until the Sale Termination Date, each Receivable
described in Section 1.1(a)(ii) hereof, and all the Related Rights with respect
thereto, created or originated by each Originator shall be sold, or in the case
of Contributed Receivables only, contributed, by such Originator to the SPV
Purchaser (without any further act or action) immediately upon such Originator's
origination thereof (except as provided below). All such Receivables, other than
Contributed Receivables, shall be sold to the SPV Purchaser on such date of
creation or, in the case of Receivables generated from the Initial Cut-Off Date
through the Initial Purchase Date, as of the day immediately following the
Initial Purchase Date, and all such Receivables which constitute Contributed
Receivables shall be contributed by Feed to the SPV Purchaser on such date. Each
Originator agrees, acknowledges, confirms and covenants that the Receivables
purchased by, or, in the case of Feed only, contributed to, the SPV Purchaser
hereunder after the Initial Purchase Date shall be owned by the SPV Purchaser,
free and clear of any Lien or claim of such Originator or any other party or
Person, except any Lien arising hereunder or under the Receivables Purchase
Agreement. Notwithstanding the preceding provisions, if on any day prior to the
Termination Date, Reinvestments with respect to Collections shall not be
permitted pursuant to the Receivables Purchase Agreement, each Originator may
elect not to sell or contribute to the SPV Purchaser its respective Receivables
on such day.
SECTION 1.3 No Recourse. The purchase and sale and contribution of
Receivables and Related Rights under this Agreement shall be without recourse to
the related Originator with respect to the collectibility of any Receivable;
provided that each Originator shall be liable to the SPV Purchaser for all
representations, warranties, covenants and indemnities made by such Originator
pursuant to the terms of this Agreement in connection with such Receivable, it
being understood that no Originator shall have any liability on account of the
failure of the Obligor to make any payment in respect of a Receivable for
reasons not related to such breaches of representations, warranties, covenants
and indemnities.
SECTION 1.4 True Sales.
(a) Each of the SPV Purchaser and each Originator intends the
transactions hereunder to constitute absolute and irrevocable true sales (or in
the case of Contributed Receivables, conveyances in the form of capital
contributions) of Receivables and the Related Rights by such Originator to the
SPV Purchaser providing the SPV Purchaser with the full risks and benefits of
ownership thereof,
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and no party hereto intends the transactions contemplated hereunder to be, or
for any purpose to be characterized as, a loan from or through the SPV Purchaser
to any Originator. In connection therewith, the SPV Purchaser and each
Originator agrees to treat the transfers of the Receivables as sales of the
Receivables by such Originator and purchases of the Receivables by the SPV
Purchaser (or, in the case of Contributed Receivables, as capital contributions)
for all purposes under GAAP.
(b) In case the conveyance of Receivables and Related Rights
by any Originator hereunder is at any time characterized by a court or other
Governmental Authority as a loan rather than a sale or contribution, each of the
Originators does hereby grant to the SPV Purchaser, effective as of the date
hereof, a security interest in any and all of such Originator's right, title and
interest in, to and under all of the Receivables and Related Rights originated
by such Originator, whether now or hereafter owned, existing or arising. Such
security interest shall secure all of such Originator's obligations (monetary or
otherwise) under this Agreement, whether now or hereafter existing or arising,
due or to become due, direct or indirect, absolute or contingent, including,
without limitation, loans to the Originators in the amount of the Purchase
Price. The SPV Purchaser shall have, with respect to the property described in
this Section 1.4(b), and in addition to all the other rights and remedies
available to the SPV Purchaser under this Agreement, the other Transaction
Documents and applicable law, all the rights and remedies of a secured party
under the UCC, and this Agreement shall constitute a security agreement under
Applicable Law.
SECTION 1.5 Consideration for Purchases. On the terms and subject to
the conditions set forth in this Agreement, the SPV Purchaser agrees to make all
Purchase Price payments to the Originators in accordance with Article III.
ARTICLE II: CALCULATION OF PURCHASE PRICE
SECTION 2.1 Calculation of Purchase Price.
(a) On each Reporting Date (commencing with the first Reporting Date
following the Initial Purchase Date), the Servicer shall deliver to the SPV
Purchaser, the Administrator and the Originators a report in substantially the
form of Exhibit A (each such report being herein called a "Purchase Report")
with respect to the SPV Purchaser's purchases of Receivables from the respective
Originators
(i) that arose on or prior to the Initial Cut-Off Date (in the
case of the first Purchase Report to be delivered hereunder), or
(ii) that arose during the Settlement Period immediately
preceding such Reporting Date (in the case of each successive Purchase Report).
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The Originators agree that they will promptly provide all necessary information
to the Servicer to enable the Servicer to develop and deliver each Purchase
Report in a timely manner.
(b) Each Purchase Report shall designate (i) the Originator that
originated each such Receivable and (ii) by Originator, the amount of such
Receivables that were Eligible Receivables on the date of origination (or, in
the case of Receivables transferred or contributed on the Initial Purchase Date,
on the Initial Purchase Date), and (iii) in the case of Feed only, the
Receivables, if any, which are Contributed Receivables (or, on the Initial
Purchase Date, Initial Contributed Receivables).
(c) The "Purchase Price" (to be paid proportionately to each Originator
in accordance with the terms of Article III) for the Receivables and the Related
Rights shall be determined in accordance with the following formula:
PP = AUB - (AUB X FMVD)
where:
PP = Purchase Price (to be paid to each
Originator in accordance with the terms of
Article III) as calculated on the relevant
Business Day;
AUB = either (i) for purposes of calculating the
Purchase Price on the Initial Purchase Date,
the aggregate Unpaid Balance of all
Receivables that existed and were owing to
the respective Originators as measured as at
the Initial Cut-Off Date less, in the case
of Feed only, an amount equal to the sum of
the aggregate Unpaid Balance of all Initial
Contributed Receivables, or (ii) for
purposes of calculating the Purchase Price
for Receivables on each Business Day
thereafter, the aggregate Unpaid Balance of
the Receivables described in Section
1.1(a)(ii) hereof that were generated by the
related Originator on the immediately
preceding Business Day, less, in the case of
Feed only, an amount equal to the sum of the
aggregate Unpaid Balance of all Receivables
designated as Contributed Receivables, if
any, indicated on the related Purchase
Report; and
FMVD = "Fair Market Value Discount Factor" on the
determination date, which is the sum of the
Loss Discount and the Cost
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Discount, in each case as calculated on the
most recent Reporting Date as set forth in
the definitions below.
"Cost Discount" as measured on the Initial Purchase Date or any
Reporting Date means a percentage determined in accordance with the following
formula:
CD = (TD/360) x CR
where:
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CD = the Cost Discount as measured on such date;
TD = the Days Sales Outstanding, as set forth in the most
recent Purchase Report; and
CR = the Cost Rate as measured on such Reporting Date.
"Cost Rate" as measured on the Initial Purchase Date or any Reporting
Date means a per annum percentage rate equal to the sum of (i) LIBOR for the
Initial Purchase Date or the related Settlement Period, as the case may be, plus
(ii) one hundred seventy-five (175) basis points.
"Days Sales Outstanding" means, at any date of determination, (i) the
Sales as of the end of the second (2nd) preceding month divided by the
Collections for the preceding month multiplied by (ii) thirty (30).
"Loss Discount" as measured on the Initial Purchase Date or any
Reporting Date means the ratio, expressed as a percentage, of (i) the losses
(i.e. write-offs to the bad debt reserve or other write-offs consistent with the
applicable Credit and Collection Policy, in each case, net of recoveries)
recognized for all Receivables during the period equal to twelve (12) months
ending on the Cut-Off Date immediately preceding the Initial Purchase Date or
such Reporting Date, as the case may be, divided by (ii) the Collections on all
Receivables received during such period.
ARTICLE III: PAYMENT OF PURCHASE PRICE
SECTION 3.1 The Initial Purchase Price Payment.
(a) On or prior to the Initial Purchase Date, the SPV
Purchaser shall pay the Purchase Price for the purchases to be made from each of
the Originators, with respect to the Receivables of such Originator existing on
or prior to the Initial Cut-Off Date (i) in cash in an amount equal to the
amount received by the SPV Purchaser from the Purchaser under the Receivables
Purchase Agreement
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as of the Initial Purchase Date in connection with the first Purchase made
pursuant to the Receivables Purchase Agreement attributable to such Receivables,
and (ii) by the issuance of a subordinated promissory note in the form of
Exhibit B to this Agreement payable to the order of such Originator in the
initial principal amount equal to the remainder of the Purchase Price then owing
to such Originator after subtracting the amount paid in cash (each such
promissory note, as it may be amended, supplemented, endorsed or otherwise
modified from time to time, together with any promissory notes issued from time
to time in substitution therefor or renewal thereof in accordance with the
Transaction Documents, being called an "SPV Purchaser Note" and, collectively,
with the SPV Purchaser Notes issued to the other Originators, the "SPV Purchaser
Notes"), which SPV Purchaser Note shall, in accordance with its terms, be
subordinated to all interests in Receivables and Related Rights and all
obligations of the SPV Purchaser of any nature, whether now or hereafter
arising, under or in connection with the Receivables Purchase Agreement.
(b) The Servicer shall hold the SPV Purchaser Notes for the
benefit of the respective Originators and shall make all appropriate
record-keeping entries with respect to the SPV Purchaser Notes or otherwise to
reflect payments on and adjustments of the SPV Purchaser Notes. The Servicer's
books and records shall constitute rebuttable presumptive evidence of the
principal amount of and accrued and unpaid interest on each of the SPV Purchaser
Notes at any time. Each of the Originators hereby irrevocably authorizes the
Servicer to xxxx its SPV Purchaser Notes "CANCELED" and to return such SPV
Purchaser Notes to the SPV Purchaser upon the full and final payment thereof
after the Sale Termination Date.
SECTION 3.2 Purchase Price Payments; SPV Purchaser Notes.
(a) On each Business Day occurring after the Initial Purchase
Date until the termination of this Agreement pursuant to Section 9.4, on the
terms and subject to the conditions of this Agreement, the SPV Purchaser shall
pay to each of the Originators the Purchase Price for the Receivables and
Related Rights purchased from such Originator during the immediately preceding
Business Day, from monies held by or on behalf of the SPV Purchaser (including,
without limitation, any investments made on the preceding Business Day pursuant
to clause (iii) below) solely to the extent that such monies do not constitute
Collections that are required to be segregated and held by the Servicer or
distributed to the Administrator or the Purchasers pursuant to the Receivables
Purchase Agreement on the next Settlement Date or required to be paid to the
Servicer as the Servicer's Fee on the next Settlement Date, or otherwise
necessary to pay current expenses of the SPV Purchaser (in its reasonable
discretion) (such available monies, the "Available Funds"), as follows:
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(i) first, by paying to such Originator the Purchase Price due
pursuant to Section 2.1 by depositing into such account as such
Originator shall specify immediately available funds equal to the
Purchase Price; provided, however, that if Available Funds are
insufficient to pay each of the Originators the entire Purchase Price
due on such day, the Available Funds shall be allocated among the
Originators pro rata based on the Purchase Price owing to each of them
on such Business Day;
(ii) second, if the Available Funds exceed the Purchase Price
for Receivables and Related Rights purchased from the Originators on
such Business Day, such excess shall be applied to reduce accrued
interest and then to the outstanding principal amount of such
Originator's SPV Purchaser Note until each outstanding balance has been
reduced to zero; provided, however, that if such excess Available Funds
are insufficient to reduce the outstanding balance of each of the
Originators' SPV Purchaser Notes to zero, such excess Available Funds
shall be allocated among the Originators pro rata based on the
outstanding principal balances of their respective SPV Purchaser Notes;
and
(iii) third, any Available Funds remaining after application
thereof pursuant to clauses (i) and (ii) above, shall be invested at
the direction of the Servicer on behalf of the SPV Purchaser in
investments with maturities not later than the next succeeding Business
Day.
(b) To the extent that any portion of the Purchase Price with respect
to all Receivables and Related Rights sold by an Originator to the SPV Purchaser
hereunder that arose during the previous Business Day remains unpaid after
giving effect to the foregoing clause (a), the principal amount outstanding
under the SPV Purchaser Note issued to such Originator automatically shall be
increased in an amount equal to such remaining Purchase Price.
(c) To the extent that (i) the amount due pursuant to Section 2.1 with
respect to all Receivables and Related Rights sold by an Originator to the SPV
Purchaser hereunder that arose during the corresponding Settlement Period is
exceeded by (ii) the amount paid to such Originator during such Settlement
Period pursuant to the foregoing sentences for such Receivables, such excess
shall be treated as a reduction in the principal amount of the SPV Purchaser
Note issued to such Originator, effective as of the last day of the related
Settlement Period.
SECTION 3.3 Deemed Collections, Etc.
(a) If on any day the Unpaid Balance of any Receivable owed by
an Obligor is reduced or adjusted as a result of any Dilution, the related
Originator shall deliver to the Servicer in same day, immediately available
funds an amount
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equal to the amount of such Dilution, provided, however, that prior to the Sale
Termination Date, such amount may be paid by a reduction to the portion of the
Purchase Price to be paid in Available Funds to such Originator on the next
Business Day (but not by less than the amount of Purchase Price owing), with any
shortfall to be paid in cash;
(b) if on any day any of the representations or warranties in
Sections 5.1(i) and (t) hereof was not true with respect to any Receivable as of
the date it was sold hereunder (each such Receivable, an "Ineligible
Receivable"), the related Originator shall deliver to the Servicer in same day
funds an amount equal to the lesser of the Purchase Price or the Unpaid Balance
of such Receivable for application by the Servicer to the same extent as if
Collections in respect thereof had actually been received on such date,
provided, however, that prior to the Sale Termination Date, such amount may be
paid by a reduction to the portion of the Purchase Price to be paid in Available
Funds to such Originator on the next Business Day (but not by less than the
amount of Purchase Price owing), with any shortfall to be paid in cash;
(c) except as provided in paragraph (a) or (b) of this Section
3.3, or as otherwise required by Applicable Law or the relevant Contract or as
otherwise specified by such Obligor, all Collections received from an Obligor of
any Receivables shall be applied to the Receivables of such Obligor in the order
of the age of such Receivables, starting with the oldest such Receivable, unless
such Obligor designates in writing its payment for application to specific
Receivables; and
(d) in the event that an Originator has paid (by effecting a
Purchase Price reduction or otherwise) to the SPV Purchaser the full Purchase
Price or Unpaid Balance (as applicable) of any Receivable pursuant to this
Section 3.3, the SPV Purchaser shall reconvey such Receivable and all Related
Rights with respect thereto to such Originator, without recourse, representation
or warranty, but free and clear of all Liens created by the SPV Purchaser; such
Reconveyed Receivables and all Related Rights shall no longer constitute Pool
Receivables or otherwise be subject to the terms of this Agreement (including
any obligation to turn over Collections with respect thereto).
SECTION 3.4 Payments and Computations, Etc.
(a) All amounts to be paid or deposited by an Originator or
the Servicer hereunder shall be paid or deposited no later than 2:00 P.M.
(Denver, Colorado time) on the day when due in same day, immediately available
funds. All amounts received after 2:00 P.M. (Denver, Colorado time) will be
deemed to have been received on the immediately succeeding Business Day.
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(b) Each Originator shall, to the extent permitted by law, pay
interest on any amount not paid or deposited by such Originator (whether as
Servicer, or otherwise) when due hereunder, at the Default Rate, payable on
demand, provided, however that such interest shall not at any time exceed the
maximum rate permitted by Applicable Law.
(c) All computations of interest under Section 3.4(b) and all
computations of the Purchase Price, fees, and other amounts hereunder shall be
made on the basis of a 360-day year and actual days elapsed. Whenever any
payment or deposit to be made hereunder shall be due on a day other than a
Business Day, such payment or deposit shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
such payment or deposit.
ARTICLE IV: CONDITIONS TO PURCHASES
SECTION 4.1 Conditions Precedent to Initial Purchase. The initial
purchase of Receivables and Related Rights under this Agreement is subject to
the condition precedent that the SPV Purchaser shall have received each of the
following (with copies to the Administrator), on or before the date of such
purchase, each in form and substance (including the date thereof) reasonably
satisfactory to the SPV Purchaser and the Administrator:
(a) The Receivables Purchase Agreement shall have been duly
executed by the parties thereto, and evidence reasonably satisfactory to the SPV
Purchaser shall have been provided that all conditions precedent to the initial
purchase of an undivided interest thereunder (other than any condition relating
to the effectiveness of the purchase commitment under this Agreement) shall have
been met;
(b) A certificate of the Secretary of each Originator
certifying (i) a copy of the resolutions of its Board of Directors (or
equivalent governing authority) approving this Agreement and the other
Transaction Documents to be delivered by it in connection herewith and the
transactions contemplated hereby; (ii) the names and true signatures of the
officers authorized on its behalf to sign this Agreement and the other
Transaction Documents to be delivered by it in connection herewith (on which
certificate the Administrator and the SPV Purchaser may conclusively rely until
such time as the Administrator shall receive from such Originator a revised
certificate meeting the requirements of this subsection (b)); (iii) a copy of
its by-laws, operating agreement or equivalent organizational document(s); and
(iv) all documents evidencing other necessary action and governmental approvals,
if any, with respect to this Agreement and the other Transaction Documents to
which it is a party;
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(c) Acknowledgment copies or time-stamped receipt copies, of
the proper financing statements (Form UCC-1) filed on or prior to the date of
the initial purchase hereunder, naming each Originator, as the debtor and
seller, and the SPV Purchaser as the secured party and purchaser and naming the
Administrator, for the benefit of the Purchasers under the Receivables Purchase
Agreement, as assignee of the SPV Purchaser of the Receivables and the Related
Rights of such Originator transferred hereunder, or other similar instruments or
documents, as may be necessary or, in Servicer's or the Administrator's
reasonable opinion, desirable under the UCC or any comparable law of all
appropriate jurisdictions to perfect the SPV Purchaser's ownership interest in
all Receivables and Related Rights in which an ownership interest may be
assigned to it thereunder or hereunder;
(d) A search report provided in writing to and approved by the
Administrator, listing all effective financing statements that name any
Originator as debtor or assignor and that are filed in the jurisdictions in
which filings were made pursuant to subsection (c) above and in such other
jurisdictions that the Administrator shall reasonably request, together with
copies of such financing statements (none of which shall cover any Pool Assets,
unless executed termination statements and/or partial releases with respect
thereto have been delivered to the Administrator), and tax and judgment lien
search reports from a Person satisfactory to Servicer and the Administrator
showing no evidence of such liens filed against any Originator;
(e) A pro forma Purchase Report, prepared in respect of the
proposed initial purchase hereunder, assuming an Initial Cut-Off Date of
December 7, 2001;
(f) An SPV Purchaser Note in favor of each of the Originators,
duly executed by the SPV Purchaser;
(g) Favorable opinions of (x) Faegre & Xxxxxx LLP, special
counsel to the Originators, as to true sale, non-substantive consolidation,
perfection and other matters and (y) Xxxx Xxxxxxxx, internal counsel to the
Originators as to corporate authority, in form and substance reasonably
acceptable to the Administrator and its counsel;
(h) A certificate from an officer of each Originator to the
effect that such Originator has taken all steps necessary to ensure that there
shall be placed on the Receivables books and records of such Originator
(including electronic tapes and data processing reports) the following legend
(or the substantive equivalent thereof):
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THE RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD OR CONTRIBUTED TO LOL
FARMLAND FEED SPV, LLC, PURSUANT TO A PURCHASE AND SALE AGREEMENT,
DATED AS OF DECEMBER 18, 2001, AS AMENDED FROM TIME TO TIME, BY AND
BETWEEN LOL FARMLAND FEED SPV, LLC, LAND O'LAKES, INC., LAND O'LAKES
FARMLAND FEED LLC, AND PURINA XXXXX, LLC; AN OWNERSHIP AND SECURITY
INTEREST IN THE RECEIVABLES DESCRIBED HEREIN HAS BEEN GRANTED AND
ASSIGNED TO COBANK, ACB, AS ADMINISTRATOR, PURSUANT TO A RECEIVABLES
PURCHASE AGREEMENT DATED AS OF DECEMBER 18, 2001, BY AND AMONG LOL
FARMLAND FEED SPV, LLC (AS ORIGINATOR), LAND O'LAKES FARMLAND FEED LLC
(AS INITIAL SERVICER), COBANK, ACB, AND THE OTHER PURCHASERS FROM TIME
TO TIME PARTY THEREOF; AND COBANK, ACB (AS ADMINISTRATOR);
(i) Good standing (and foreign qualification, as applicable)
certificates for each of the Originators issued by the Secretaries of State of
the jurisdictions of their incorporation or formation and the respective
principal places of business;
(j) Evidence of the payoff of the bridge loan governed by the
provisions of the Bridge Loan Credit Agreement and the release of all related
security interests and termination of all related UCC financing statements; and
(k) Such other agreements, instruments, UCC financing
statements, certificates, opinions and other documents as the SPV Purchaser or
the Administrator may reasonably request.
SECTION 4.2 Conditions Precedent to All Purchases. Each purchase under
this Agreement is subject to the condition precedent that the agreement of each
Originator to sell Receivables and Related Rights, and the agreement of the SPV
Purchaser to purchase Receivables and Related Rights, shall not have terminated
pursuant to Section 9.4 of this Agreement, and shall be subject further to the
conditions precedent that:
(a) in the case of each purchase, the Servicer shall have
delivered to the SPV Purchaser on or prior to such purchase, a completed
Purchase Report with respect to the immediately preceding calendar month, dated
within two (2) Business Days prior to such purchase, together with such
additional information as may be reasonably requested by the SPV Purchaser or
the Administrator; and
(b) the representations and warranties contained in (i)
Article V and (ii) the Chase Credit Documents, in accordance with the terms and
conditions specified in the Chase Credit Documents therefor (all of which
representations and
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warranties are incorporated herein by reference and made a part hereof) are
correct on and as of such day as though made on and as of such day and shall be
deemed to have been made on such day (except that any such representation or
warranty that is expressly stated as being made only as of a specified earlier
date shall be true and correct in all material respects as of such earlier
date).
SECTION 4.3 Certification as to Representations and Warranties. Each
Originator, by accepting the Purchase Price (whether in cash or by an increase
in the principal amount outstanding under its SPV Purchaser Note) paid for each
purchase of Receivables and Related Rights of such Originator on any day, shall
be deemed to have certified that its representations and warranties contained in
Article V and the Chase Credit Documents (to the extent specified in Section
4.2(b) above) are true and correct on and as of such day, with the same effect
as though made on and as of such day (except that any such representation or
warranty that is expressly stated as being made only as of a specified earlier
date shall be true and correct in all material respects as of such earlier
date).
SECTION 4.4 Effect of Payment of Purchase Price. Upon the payment of
the Purchase Price (whether in cash or by an increase in the principal amount
outstanding under a SPV Purchaser Note) for any purchase of Receivables and
Related Rights, title to such Receivables and Related Rights shall vest in the
SPV Purchaser, whether or not the conditions precedent to such purchase were in
fact satisfied; provided that the SPV Purchaser shall not be deemed to have
waived any claim it may have under this Agreement for the failure by any
Originator in fact to satisfy any such condition precedent.
ARTICLE V: REPRESENTATIONS AND WARRANTIES
SECTION 5.1 Representations and Warranties. In order to induce the SPV
Purchaser to enter into this Agreement and to make purchases hereunder, each
Originator hereby severally represents and warrants as follows:
(a) Organization and Good Standing. Such Originator has been
duly organized, is validly existing as a limited liability company or
corporation, as applicable, in good standing in its state of organization, with
power and authority to own its properties and to conduct its business as such
properties are presently owned and such business is presently conducted, and had
at all relevant times, and now has, all necessary power, authority and legal
right to sell and/or contribute the Receivables and Related Rights to be sold
and/or contributed pursuant to this Agreement.
(b) Due Qualification. Such Originator is duly qualified to do
business as a foreign limited liability company or corporation in good standing,
and
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has obtained all necessary licenses and approvals, in all jurisdictions in which
the ownership or lease of property or the conduct of its business requires such
qualification, licenses or approvals except where the failure to so qualify or
have such licenses or approvals has not had, and could not reasonably be
expected to have, an Originator Material Adverse Effect.
(c) Power and Authority; Due Authorization. Such Originator
(i) has all necessary power, authority and legal right to (A) execute and
deliver this Agreement and the other Transaction Documents to which it is a
party, (B) carry out the terms of the Transaction Documents to which it is a
party, and (C) sell and assign its Receivables and Related Rights on the terms
and conditions herein provided and (ii) has duly authorized by all necessary
action the execution, delivery and performance of this Agreement and the other
Transaction Documents to which it is a party, and the sale and/or contribution
of the Receivables and Related Rights to be sold and/or contributed by it
pursuant to the terms and conditions hereof.
(d) Binding Obligations. This Agreement constitutes, and each
other Transaction Document to be signed by such Originator when duly executed
and delivered will constitute, a legal, valid and binding obligation of such
Originator, enforceable in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether such enforceability is considered in
a proceeding in equity or at law.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the other Transaction Documents to which such
Originator is a party and the fulfillment of the terms hereof and thereof will
not (i) conflict with, result in any breach of any of the terms and provisions
of, or constitute (with or without notice or lapse of time or both) a default
under such Originator's certificate of formation or operating agreement or any
Contractual Obligation of such Originator, (ii) result in the creation or
imposition of any Lien upon such Originator's properties pursuant to the terms
of any such Contractual Obligation, other than this Agreement and the
Receivables Purchase Agreement, or (iii) violate any Applicable Law as then in
effect.
(f) No Proceedings. There is no litigation, proceeding or
investigation pending or, to the best of such Originator's knowledge,
threatened, before any Governmental Authority or arbitrator (i) asserting the
invalidity of this Agreement or any other Transaction Document to which such
Originator is a party, (ii) seeking to prevent the sale and assignment of the
Receivables and Related Rights, the collectibility of the Receivables or the
consummation of any of the other transactions contemplated by this Agreement or
any other Transaction Document,
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or (iii) seeking any determination or ruling that could reasonably be expected
to have an Originator Material Adverse Effect.
(g) Government Approvals. No Governmental Action is required
for the due execution, delivery and performance by such Originator of this
Agreement or any other Transaction Document to which it is a party except for
the filing of the UCC financing statements referred to in Article IV, all of
which at the time required in Article IV, shall have been duly made and shall be
in full force and effect.
(h) Securities Exchange Act. No proceeds of any purchase will
be used to acquire any equity security of a class which is or is required to be
registered pursuant to Section 12 of the Securities Exchange Act of 1934.
(i) Quality of Title; Valid Sale; Etc. Upon its creation and
at the time of its sale or, in the case of Feed only, contribution to the SPV
Purchaser under this Agreement, it is the legal and beneficial owner of each of
the Receivables and the Related Rights originated by it free and clear of any
Lien or other claim (including, without limitation, any Lien or other claim in
favor of or by such Originator, or any Obligor or any other Person, whether or
not asserting any such Lien or claim through or on behalf of such Originator or
any Obligor except for the Lien of this Agreement and the Receivables Purchase
Agreement); and upon each purchase or contribution the SPV Purchaser shall
acquire a valid and enforceable perfected first priority ownership interest in
each such Receivable then existing or thereafter arising and in the Related
Rights with respect thereto, free and clear of any Lien, except for the Lien of
this Agreement and the Receivables Purchase Agreement, enforceable against all
creditors of, and purchasers from, such Originator and each of the other
Originators. Each Receivable originated by it constitutes an "account" as such
term is defined in the UCC. No financing statement or other instrument similar
in effect covering any Receivable originated by it or Related Rights with
respect thereto is on file in any recording office, except those filed in favor
of (i) the SPV Purchaser pursuant to this Agreement, and (ii) the Administrator
pursuant to the Receivables Purchase Agreement.
(j) Accuracy of Information. Each Purchase Report and each
other report, exhibit, financial statement, document, book, record or item of
information furnished or to be furnished at any time by or on behalf of it to
the SPV Purchaser or the Administrator in connection with this Agreement or any
other Transaction Document is or will be accurate in all material respects as of
its date or (except as otherwise disclosed to the Administrator at such time) as
of the date so furnished, and no such item contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary in order to make the statements contained therein, in the light of the
circumstances under which they were made, not materially misleading.
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(k) Offices, etc. The jurisdiction of formation or
incorporation and the principal place of business and chief executive office for
the last five years of such Originator are located at the respective addresses
of such Originator referred to in Section 9.2, and the offices at which such
Originator keeps all its respective books, records and documents evidencing or
relating to Receivables are the jurisdictions and located at the addresses of
such Originator referred to in Section 9.2 (or at such other locations, notified
to the Administrator in accordance with Section 6.1(e), in jurisdictions where
all action required by Section 8.4 has been taken and completed).
(l) Bulk Sales Act. No transaction contemplated hereby
requires compliance with any bulk sales act or similar law.
(m) Margin Regulations. The use of all funds obtained by such
Originator under this Agreement or any other Transaction Document will not
conflict with or contravene any of Regulations T or X promulgated by the Board
of Governors of the Federal Reserve System from time to time.
(n) Maintenance of Books and Records. It has accounted for
each transfer of Receivables and Related Rights in its books and financial
statements as sales (or capital contributions), consistent with GAAP.
(o) Credit and Collection Policies. It has complied, and
caused all Sub-Servicers to comply, in all material respects with the applicable
Credit and Collection Policy with regard to origination (and servicing, with
respect to the initial Receivables) of each Receivable.
(p) Solvency. It is not "insolvent," and at the time of (and
immediately after) each sale or contribution pursuant to this Agreement it shall
not be "insolvent," as such term is defined in Section 101(32)(A) of the United
States Bankruptcy Reform Act of 1978 (11 U.S.C.ss.101, et seq.), as amended.
(q) Compliance with Transaction Documents. Feed, as Servicer
and in each other capacity contemplated for it under the Transaction Documents,
has complied, and caused all Sub-Servicers to comply with all of the terms,
covenants and agreements contained in this Agreement and the other Transaction
Documents applicable to it.
(r) Legal Name. Such Originator's complete legal name is as
set forth on Schedule 9.2, and, except as otherwise noted on Schedule 9.2, such
Originator does not use and has not during the last six (6) years used any other
legal name, trade name, doing business name or fictitious name.
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(s) Investment Company Act. It is not, and is not controlled
by, an "investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended.
(t) Eligible Receivables. Each Receivable sold or, in the case
of Feed only, contributed by it to the SPV Purchaser hereunder that is
designated as an Eligible Receivable on a Purchase Report shall have in fact
been an Eligible Receivable on the date of the sale or contribution thereof
under this Agreement.
(u) No Purchase Termination Events. No event has occurred and
is continuing, or would result from a purchase or contribution, in respect of
the Receivables or Related Rights or from the application of proceeds therefrom,
which constitutes a Termination Event.
(v) Financial Condition. The financial statements delivered to
the SPV Purchaser by each of the Originators on or as of the Initial Purchase
Date fairly present the consolidated financial condition, business and
operations of such Originators and their respective consolidated Subsidiaries as
at such date. There is no intercompany debt between the SPV Purchaser and any
Originator other than the SPV Purchaser Notes and debts incurred in connection
with their respective obligations to each other under this Agreement.
(w) Representations and Warranties in Chase Credit Documents.
Each of the representations and warranties contained in the Chase Credit
Documents as originally in effect on the Initial Purchase Date (all of which
representations and warranties, as so in effect, are incorporated herein by
reference and made a part hereof as if expressly stated herein) are true and
correct in all respects (subject to materiality, as, but only to the extent,
provided in the Chase Credit Documents) (except to the extent that any such
representation or warranty, by its express terms, relates exclusively to an
earlier date or to a one-time event or state of facts no longer existing).
(x) Covenants in Chase Credit Documents. Each of the
Originators is in full compliance with its respective covenants contained in the
Chase Credit Documents as originally in effect on the Initial Purchase Date
(subject to materiality, as, but only to the extent, provided in the Chase
Credit Documents) (all of which covenants, as so in effect, are incorporated
herein by reference and made a part hereof as if expressly stated herein).
ARTICLE VI: COVENANTS
SECTION 6.1 Affirmative Covenants. From the date hereof until
termination of this Agreement in accordance with Section 9.4 hereof:
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(a) Compliance with Laws, Etc. Each Originator will comply in
all material respects with all Applicable Laws, including those with respect to
the Receivables and the related Contracts, except where noncompliance could not
reasonably be expected to have an Originator Material Adverse Effect.
(b) Preservation of Legal Existence. Each Originator will
preserve and maintain its legal existence, rights, franchises and privileges in
the jurisdiction of its formation, and qualify and remain qualified in good
standing as a foreign limited liability company in each jurisdiction where the
failure to preserve and maintain such existence, rights, franchises, privileges
and qualification could reasonably be expected to have an Originator Material
Adverse Effect.
(c) Audits. (i) Each Originator will at any time and from time
to time during regular business hours, on at least five (5) Business Days' prior
notice, unless a Termination Event shall have occurred and be continuing, permit
the Administrator or any of its agents or representatives, (A) to examine and
make copies of and abstracts from all books, records and documents (including,
without limitation, computer tapes and disks) in its possession or under its
control relating to Receivables, (B) to visit its offices and properties for the
purpose of examining such materials described in clause (i)(A) above, and to
discuss matters relating to Receivables or its performance hereunder with any of
its officers or employees having knowledge of such matters, and (C) to verify
with officers and employees of any Originator or Servicer, or directly with
Obligors (but only with a representative of the applicable Originator present
unless a Termination Event shall have occurred and be continuing), the existence
and amount of the Receivables; and (ii) without limiting the provisions of
clause (i) above, from time to time on request of the Administrator on at least
five (5) Business Days prior notice, unless a Termination Event shall have
occurred and be continuing, permit certified public accountants or other
auditors acceptable to the Administrator to conduct, at such Originator's
expense, a review of its books and records with respect to the Receivables;
provided, however that unless a Termination Event has occurred and is
continuing, such Originator shall not be obligated to pay for more than one (1)
such audit during a rolling 6-month period during the 12-month period following
the Initial Purchase Date, or one (1) such audit in any calendar year
thereafter.
(d) Keeping of Records and Books of Account. Each Originator
will maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing Receivables in the
event of the destruction of the originals thereof), and keep and maintain all
documents, books, records and other information reasonably necessary or
advisable for the collection of all Receivables (including, without limitation,
records adequate to permit the daily identification of each new Receivable and
all Collections of and adjustments to each existing Receivable).
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(e) Location of Records; Jurisdiction of Organization. Each
Originator will keep its jurisdiction of organization and its principal place of
business and chief executive office, and the offices where it keeps its records
concerning the Receivables and all related Contracts and all other agreements
related to such Receivables (and all original documents relating thereto), at
the jurisdiction and its address(es) referred to in Section 9.2 or, upon thirty
(30) days' prior written notice to the Administrator, at such other locations in
jurisdictions where all action required by Section 8.4 shall have been taken and
completed.
(f) Credit and Collection Policies. Each Originator, at its
own expense, will timely and fully perform and comply in all material respects
with each applicable Credit and Collection Policy in regard to origination of
each Receivable and the related Contracts.
(g) Collections. On or before the Initial Purchase Date, each
Originator will instruct (i) all Obligors to cause all Collections to be sent to
a Lockbox that is the subject of a Lockbox Agreement and (ii) each Lockbox Bank
to deposit all Collections directly into a Lockbox Account that is the subject
of a Lockbox Agreement. In the event that any Originator receives Collections
directly from any Obligor, such Originator shall deposit such Collections into a
Lockbox Account within two (2) Business Days of receipt thereof.
(h) Covenants in Chase Credit Documents. Each Originator shall
comply fully with each of the applicable covenants contained in the Chase Credit
Documents, as in effect on the Initial Purchase Date (all of which covenants, as
so in effect, are incorporated herein by reference and made a part hereof).
(i) Reporting Requirements.
(i) Quarterly Financial Statements. As soon as
available and, in any event within forty-five (45) days after
the end of each of the first three (3) quarters of each fiscal
year, LOL will furnish to the SPV Purchaser and the
Administrator copies of the financial statements of LOL and
its Subsidiaries prepared on a consolidated basis, consisting
of at least a balance sheet as at the close of such quarter
and statements of earnings for such quarter and for the period
from the beginning of the fiscal year to the close of such
quarter, in each case in conformity with GAAP (except for
footnote disclosures) and fairly presenting the consolidated
financial position and results of operations of LOL and its
Subsidiaries for such month and period, duly certified by the
principal financial officer of LOL;
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(ii) Annual Financial Statements. As soon as
available and, in any event within ninety (90) days after the
end of each fiscal year, LOL will furnish to the SPV Purchaser
and the Administrator copies of the unqualified audited
financial statements of LOL and its Subsidiaries prepared on a
consolidated basis, consisting of at least a balance sheet of
LOL and its Subsidiaries for such year and consolidated and
consolidating statements of earnings and cash flows, in each
case in conformity with GAAP, setting forth in each case in
comparative form corresponding consolidated figures from the
preceding fiscal year, with all such statements duly certified
by independent certified public accountants of recognized
standing selected by LOL, together with copies of any and all
letters, from such accountants to LOL's Board of Directors or
any committee thereof;
(iii) Compliance Certificate. Together with each
quarterly and annual financial statement delivered in
accordance with the preceding paragraphs, LOL will furnish to
the SPV Purchaser and the Administrator a certificate as to
compliance with the financial covenants referred to in Section
6.1(h), executed by the principal financial officer of LOL;
(iv) Material Adverse Effect; Litigation. Each
Originator will furnish to the SPV Purchaser and the
Administrator, as soon as possible and, in any event within
ten (10) Business Days after its actual knowledge thereof,
written notice of (i) the occurrence of any event or condition
which could reasonably be expected to have a Material Adverse
Effect, (ii) without limiting the foregoing clause (i), any
litigation, investigation or proceeding which may exist at any
time which could be reasonably expected to have a Material
Adverse Effect and (iii) any material adverse development in
previously disclosed litigation.
(v) Chase Credit Documents. To the extent not
delivered pursuant to any other provision of this Agreement,
LOL will deliver to the SPV Purchaser and the Administrator
copies of all financial information and reports delivered to
the agent of the lenders under the Chase Credit Documents by
or on behalf of LOL pursuant to any such Chase Credit
Documents.
(vi) Identification of Receivables. As of the
purchase date for each Receivable, the records of each
Originator and the SPV Purchaser will be clearly and
unambiguously marked to show that the Receivables are owned by
the SPV Purchaser. The computer records of each of the
Originators storing essential information on the
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Receivables and similar assets of such Originator will be
appropriately coded to reflect a sale (or capital
contribution) of the Receivables to the SPV Purchaser. In
addition, if a third party, including a potential buyer of the
Receivables, inquires, each Originator will promptly indicate
that the Receivables have been sold to the SPV Purchaser, and
no Originator will claim any ownership interest in the
Receivables.
(vii) Disclosure of the Transaction. The financial
statements of the Originators and the SPV Purchaser will
disclose the effects of the transactions under this Agreement
and the Receivables Purchase Agreement in accordance with
GAAP.
(viii) Notice to Creditors and Potential Bona Fide
Purchasers. Each of the Originators will report on its
financial records the transfer of the Receivables made by it
as a sale (or in the case of Feed, a sale or capital
contribution) under GAAP. Any GAAP financial statements, to
the extent prepared on a consolidated basis for an Originator
and its consolidated subsidiaries, will be appropriately
footnoted or will otherwise disclose that the Receivables have
been sold (or contributed) to the SPV Purchaser. For purposes
of GAAP, the financial records of the SPV Purchaser will
report the transfers as the purchase (or addition to capital)
of Receivables from the Originators.
SECTION 6.2 Negative Covenants. From the Initial Purchase Date until
termination of this Agreement in accordance with Section 9.4 hereof:
(a) Sales, Liens, Etc. No Originator will, except as otherwise
expressly permitted herein or in any other Transaction Document, sell, assign
(by operation of law or otherwise) or otherwise dispose of, or create or suffer
to exist any Lien upon or with respect to, any Receivable or any interest
therein.
(b) Extension or Amendment of Receivables. No Originator,
except Feed, as the Servicer, as expressly permitted in Section 8.2(c) of the
Receivables Purchase Agreement, will extend, amend, defer or otherwise modify,
or permit any Sub-Servicer to extend, amend, defer or otherwise modify, the
terms of any Receivable; or amend, modify or waive, or permit any Sub-Servicer
to amend, modify or waive, any term or condition of any Contract related to a
Receivable.
(c) Change in Business or Credit and Collection Policy. No
Originator will make any change in the character of its business or in any
Credit and Collection Policy, which change could impair the collectibility of
any Receivable or otherwise adversely affect the interests or remedies of the
Administrator, Purchasers under the Receivables Purchase Agreement or the SPV
Purchaser under this Agreement or any other Transaction Document.
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(d) Change in Payment Instructions to Obligors. No Originator
will, add or terminate any bank as a Lockbox Bank or any Lockbox Account from
those referenced on Schedule 6.2 or make any change, or permit any Subsidiary to
make any change, in its instructions to Obligors regarding payments to be made
to the SPV Purchaser or Servicer or payments to be made to any such Lockbox
Bank, unless the Administrator shall have either received notice of such
addition, termination or change and duly executed copies of Lockbox Agreements
with each new Lockbox Bank or with respect to each new Lockbox Account, as the
case may be, or given its prior written consent, not to be unreasonably
withheld, to such addition, termination or change.
(e) Mergers, Acquisitions, Sales, etc. (i) Without the prior
written consent of the Required Purchasers under the Receivables Purchase
Agreement, each of the Originators will not enter into any merger or
consolidation with or acquire all or substantially all of the capital stock or
other equity interests or assets of any Person (whether in one transaction or in
a series of transactions), except that: (i) any Person (other than the SPV
Purchaser or any Originator) may merge with and into any Originator, provided
that such Originator is the surviving legal entity; or (ii) LOL or any
Originator may merge with or acquire all of the capital stock or other equity
interests of or all or substantially all of the assets of any other Person
provided that LOL or such Originator is the surviving entity, provided that, in
each such case, prior to and immediately after giving effect thereto, no
Termination Event or Unmatured Termination Event shall exist.
(f) Deposits to Special Accounts. Each of the Originators will
not, and will not permit any Subsidiary to, deposit or otherwise credit, or
cause or permit to be so deposited or credited, to any Lockbox Account cash or
cash proceeds (including without limitation, proceeds or any Reconveyed
Receivable or other receivable of any Originator, or any other Person) other
than Collections of Pool Receivables.
SECTION 6.3 Separate Existence. Each of the Originators and the SPV
Purchaser hereby acknowledges that the Purchasers and the Administrator are
entering into the transactions contemplated by this Agreement and the other
Transaction Documents in reliance upon the SPV Purchaser's identity as a legal
entity separate from each of the Originators. Therefore, from and after the date
hereof, each of the Originators shall, take all steps necessary to continue the
SPV Purchaser's identity as a separate legal entity and to make it apparent to
third Persons that the SPV Purchaser is an entity with assets and liabilities
distinct from those of each of the Originators and any other Person, and is not
a division of any Originator or any other Person. Without limiting the
foregoing, each of the Originators and the SPV Purchaser agrees that:
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(a) The SPV Purchaser will be a limited purpose limited
liability company whose primary activities are restricted in its certificate of
formation to purchasing or otherwise acquiring from Originators, owning,
holding, granting security interests, or selling interests, in Pool Assets,
entering into agreements for the selling and servicing of the Receivables Pool,
and conducting such other activities as it deems necessary or appropriate to
carry out its primary activities. The SPV Purchaser shall observe all company
procedures required by the Certificate of Organization, its limited liability
company agreement and the limited liability law of the State of Delaware. All
distributions of the SPV Purchaser will be paid and declared in accordance with
the law of the State of Delaware;
(b) The SPV Purchaser shall not engage in any business or
activity, or incur any indebtedness or liability other than as expressly
permitted by the Transaction Documents;
(c) The business and affairs of the SPV Purchaser are and will
be managed by or under the direction of the SPV Purchaser's Board of Managers.
The SPV Purchaser at all times will ensure that the Board of Managers duly
authorizes all company actions requiring authorization by its Board of Managers.
When necessary, the SPV Purchaser will obtain proper authorization from Feed as
its sole member for company action. The officers and managers of the SPV
Purchaser shall make decisions with respect to the business and daily operations
of the SPV Purchaser independent of and not dictated by Feed or any other
Originator. In addition, the SPV Purchaser shall ensure that its officers and
managers will adhere to all statutes, rules, by-laws or other obligations
regarding conflicts of interest and participation in decision-making by officers
and managers who may have a conflict of interest with respect to the subject
matter of the decision;
(d) Not fewer than one (1) member of the SPV Purchaser's Board
of Managers shall be an Independent Manager. The certificate of formation of the
SPV Purchaser shall provide that (i) the SPV Purchaser's Board of Managers shall
not approve, nor take any other action to cause the filing of, a voluntary
bankruptcy petition or a merger or dissolution with respect to the SPV Purchaser
unless the Independent Manager shall approve the taking of such action in
writing prior to the taking of such action and (ii) such provision cannot be
amended without the prior written consent of the Independent Manager;
(e) The Independent Manager shall not at any time serve as a
trustee in bankruptcy for the SPV Purchaser, Feed, any other Originator or any
other Affiliate thereof;
(f) Any employee, consultant or agent of the SPV Purchaser
will be compensated from the SPV Purchaser's funds for services provided to the
SPV Purchaser. The SPV Purchaser will not engage any agents other than its
attorneys,
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auditors and other professionals, and a Servicer as contemplated by the RPA for
the Receivables Pool, which Servicer will be fully compensated for its services
by payment of the Servicer's Fee and a manager, which manager will be fully
compensated from the SPV Purchaser's funds;
(g) The SPV Purchaser will not incur any material indirect or
overhead expenses for items shared with Feed (or any other Originator or
Affiliate thereof) which are not reflected in the Servicer's Fee. To the extent,
if any, that the SPV Purchaser (or any other Affiliate thereof) shares items of
expenses not reflected in the Servicer's Fee or the manager's fee, such as
legal, auditing and other professional services, such expenses will be allocated
to the extent practical on the basis of actual use or the value of services
rendered, and otherwise on a basis reasonably related to the actual use or the
value of services rendered, it being understood that Feed shall pay all expenses
relating to the preparation, negotiation, execution and delivery of the
Transaction Documents, including, without limitation, legal and other fees;
(h) The SPV Purchaser will pay fair market rent for any office
space shared with any Originator and a fair share of any overhead costs. The SPV
Purchaser's operating expenses will not be paid by Feed, any other Originator or
any Affiliate thereof. The SPV Purchaser shall pay from its own separate assets
all material liabilities incurred by it, including the wages and salaries of its
officers and all material administrative expenses. The SPV Purchaser will
reimburse the applicable Originator for its allocable portions of any shared
expenses;
(i) The SPV Purchaser will have its own stationery and an
address and telephone number separate and distinct from the address and
telephone number of any of the Originators. The SPV Purchaser will continue to
conduct its business solely in its own name so as not to mislead others as to
the identity of the SPV Purchaser. All oral and written communications,
including without limitation letters, invoices, purchase orders, contracts,
statements and applications, shall be made solely in the name of the SPV
Purchaser if related to the SPV Purchaser, or an Originator if related to such
Originator, and shall not be made in the name of the SPV Purchaser if related to
an Originator or the name of an Originator if related to the SPV Purchaser;
(j) The SPV Purchaser maintains and will maintain separate
corporate records, documents and books of accounting from those of Feed, any
other Originator or any other entity, and keeps and will keep correct and
complete books and records of account and minutes of the meetings and other
proceedings of its members and the Board of Managers;
(k) The SPV Purchaser will maintain separate financial
statements from the Originators. All financial statements of LOL, Feed, or any
Affiliate thereof
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that are Consolidated to include the SPV Purchaser will contain appropriate
footnotes or will otherwise disclose that (A) the Receivables and Related Rights
have been sold (or contributed) to the SPV Purchaser pursuant to this Agreement,
and (B) the SPV Purchaser is a separate entity with creditors who have received
security interests in the SPV Purchaser's assets;
(l) The SPV Purchaser's assets will be maintained in a manner
that facilitates their identification and segregation from those of Feed, any
other Originator or any other Affiliate thereof;
(m) The SPV Purchaser will strictly observe corporate
formalities in its dealings with Feed, the other Originators or any Affiliates
thereof, and funds or other assets of the SPV Purchaser will not be commingled
with those of Feed, any other Originator or any Affiliate thereof. The SPV
Purchaser shall not maintain joint bank accounts or other depository accounts to
which Feed, any other Originator or any Affiliate thereof (other than Feed in
its capacity as Servicer) has independent access;
(n) The SPV Purchaser will maintain arms'-length relationships
with Feed, each other Originator and any Affiliate thereof. Any Person that
renders or otherwise furnishes services to the SPV Purchaser will be compensated
by the SPV Purchaser at market rates for such services it renders or otherwise
furnishes to the SPV Purchaser. Neither the SPV Purchaser, Feed nor any other
Originator will guaranty, assume any obligations of or will hold itself out to
be responsible for the debts of or the decisions or actions respecting the daily
business and affairs of (i) in the case of the SPV Purchaser, Feed or any other
Originator and (ii) in the case of Feed and each other Originator, the SPV
Purchaser. The SPV Purchaser, Feed and the others Originators will immediately
correct any known misrepresentation with respect to the foregoing, and they will
not operate or purport to operate as an integrated single economic unit with
respect to each other or in their dealing with any other entity; and
(o) The SPV Purchaser (i) will act solely in its own name and
through its duly authorized officers or agents in the conduct of its businesses,
(ii) will take no action which may mislead third parties as to the separate
corporate identities and separate assets and liabilities of each Originator and
the SPV Purchaser, and (iii) will have and utilize its own invoices and
letterhead separate from any Originator. No Originator shall (a) hold itself out
as having agreed to pay or become liable for the debts of the SPV Purchaser, (b)
operate or purport to operate as an integrated, single economic unit with the
SPV Purchaser, or (c) seek or obtain credit from or incur any obligation to any
third party based upon the assets of the SPV Purchaser. No Originator shall
identify the SPV Purchaser as a division or department of itself or any other
Originator.
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Without limiting the foregoing, each of the Originators and the SPV
Purchaser agrees to take all actions necessary to ensure that the corporate
separateness assumptions, statements and representations set forth in Exhibit C
attached hereto are and shall at all times remain true and correct.
ARTICLE VII: INDEMNIFICATION
SECTION 7.1 Indemnities by the Originators . Without limiting any other
rights which the SPV Purchaser, each of its permitted assigns, and each of their
respective officers, directors, employees and agents (each of the foregoing
Persons being individually called a "Sale Indemnified Party") may have hereunder
or under Applicable Law, but subject to the provisions of Section 1.3, each
Originator hereby severally agrees to indemnify the SPV Purchaser and each Sale
Indemnified Party, within thirty (30) days after demand, from and against any
and all damages, losses, claims, judgments, liabilities and related costs and
expenses, including reasonable attorneys' fees and disbursements (all of the
foregoing collectively being called "Sale Indemnified Amounts") awarded against
or incurred by any of them arising out of or resulting from this Agreement
(whether directly or indirectly) as it relates to such Originator or the use of
proceeds of purchases or the ownership of any Receivable or Related Rights
originated by such Originator, excluding, however, (a) Sale Indemnified Amounts
to the extent resulting from gross negligence or willful misconduct on the part
of the SPV Purchaser or such Sale Indemnified Party or (b) Sale Indemnified
Amounts which have the effect of recourse for non-payment of the Receivables due
to credit problems of the Obligors. Without limiting the foregoing, each
Originator shall indemnify the SPV Purchaser and each Sale Indemnified Party for
Sale Indemnified Amounts related to such Originator and arising out of or
relating to:
(i) the transfer by such Originator of an interest in any
Receivable or Related Rights to any Person other than the SPV Purchaser
pursuant to this Agreement, or the granting of any security interest or
other Lien in any Receivable or Related Rights to any Person other than
the SPV Purchaser, the Administrator and/or the Purchasers under the
Receivables Purchase Agreement, in each case, under the applicable
Transaction Documents;
(ii) the failure of any information contained in any Purchase
Report or otherwise provided by such Originator to the SPV Purchaser,
the Purchasers under the Receivables Purchase Agreement, the
Administrator or any other Servicer or Sub-Servicer with respect to
Receivables or this Agreement to be true, correct and complete;
(iii) the failure of any representation or warranty or
statement made or deemed made by such Originator (or any of its
officers) under or in
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connection with this Agreement to have been true, correct and not
misleading in any respect when made or deemed made;
(iv) the failure by such Originator to comply with any
Applicable Law, or the failure of any Receivable or Related Rights to
conform to any such Applicable Law;
(v) the failure to vest and maintain vested in the SPV
Purchaser a valid and enforceable perfected first-priority ownership
interest in each Receivable of such Originator at any time existing and
the Related Rights with respect thereto, free and clear of any Lien,
other than a Lien arising solely as a result of an act of the SPV
Purchaser, the Purchasers under the Receivables Purchase Agreement, or
the Administrator (in each case, in accordance with the applicable
Transaction Documents), whether existing as the time of purchase or
contribution of such Receivable or at any time thereafter;
(vi) the failure of such Originator to have filed, or any
delay by such Originator in filing, financing statements or other
similar instruments or documents under the UCC of any applicable
jurisdiction or other applicable laws with respect to any Receivables
and the Related Rights in respect thereof, whether at the time of any
purchase or contribution or at any time thereafter;
(vii) any dispute, claim, offset or defense (other than
discharge in bankruptcy or payment) of the Obligor to the payment of
any Receivable (including, without limitation, a defense based on such
Receivable or the related Contract not being a legal, valid and binding
obligation of such Obligor enforceable against it in accordance with
its terms), or any other claim resulting from the sale of the goods or
services related to such Receivable or the furnishing or failure to
furnish such merchandise or services;
(viii) any failure of such Originator to perform its duties or
obligations in accordance with the provisions hereof or under any
Transaction Document;
(ix) any products liability or other claim, investigation,
litigation or proceeding arising out of or in connection with
merchandise or services which are the subject of any Receivable;
(x) the commingling of Collections of Pool Receivables at any
time with other funds;
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(xi) any investigation, litigation or proceeding (x) against
such Originator or the SPV Purchaser or (y) related to this Agreement
or the use of proceeds of purchases or the ownership of any Receivable
or Related Rights;
(xii) any tax or governmental fee or charge (but not including
taxes upon or measured by net income or representing a franchise or
unincorporated business tax on such Sale Indemnified Party), all
interest and penalties thereon or with respect thereto, and all
out-of-pocket costs and expenses, including the reasonable fees and
expenses of counsel in defending against the same, which may arise by
reason of the purchase or ownership of the Receivables generated by any
Originator or any Related Rights connected with any such Receivables;
or
(xiii) any requirement that all or a portion of the sales,
contributions or distributions made to the SPV Purchaser pursuant to
this Agreement shall be rescinded or otherwise must be returned to such
Originator for any reason other than credit issues relating to any
Obligor.
SECTION 7.2 Contribution. If for any reason the indemnification
provided above in Section 7.1 (and subject to the exceptions set forth therein)
is unavailable to the SPV Purchaser or a Sale Indemnified Party or is
insufficient to hold the SPV Purchaser or a Sale Indemnified Party harmless,
then the applicable Originator shall contribute to the maximum amount of Sale
Indemnified Amounts payable or paid by the SPV Purchaser or such Sale
Indemnified Party in such proportion as is appropriate to reflect not only the
relative benefits received by the SPV Purchaser or such Sale Indemnified Party,
on the one hand, and such Originator, on the other hand, but also the relative
fault of such Sale Indemnified Party (if any) and such Originator and any other
relevant equitable considerations.
SECTION 7.3 After-Tax Basis. Indemnification hereunder shall be in an
amount necessary to make the Sale Indemnified Party whole after taking into
account any tax consequences to the Sale Indemnified Party attributable to the
receipt of the indemnity provided hereunder, including the effect of such tax or
refund on the amount of tax measured by net income or profits which is or was
payable by the Sale Indemnified Party.
ARTICLE VIII: ADMINISTRATION AND COLLECTIONS;
ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF THE
RECEIVABLES
SECTION 8.1 Servicing of Receivables and Related Rights. Consistent
with the SPV Purchaser's ownership of the Receivables and the Related Rights,
the
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SPV Purchaser shall have the sole right to service, administer and collect the
Receivables, to assign such right and to delegate such right to others. In
consideration of the SPV Purchaser's purchase of the Receivables and the Related
Rights, each Originator agrees to cooperate fully with the SPV Purchaser to
facilitate the full and proper performance of such duties and obligations for
the benefit of the SPV Purchaser, the Purchasers, and the Administrator. To the
extent that the SPV Purchaser, individually or through the Servicer, has granted
or grants powers of attorney to the Administrator, each Originator hereby grants
a corresponding power of attorney on the same terms to the SPV Purchaser. Each
Originator hereby acknowledges and agrees that the SPV Purchaser, in all of its
capacities, shall assign to the Administrator, for the benefit of the Purchasers
and the Administrator such powers of attorney and other rights and interests
granted by such Originator to the SPV Purchaser hereunder, and agrees to
cooperate fully with the Administrator in the exercise of such rights. The
Servicer at any time designated as Servicer under the Receivables Purchase
Agreement shall be the Servicer hereunder.
SECTION 8.2 Rights of the SPV Purchaser; Enforcement Rights.
(a) Except as otherwise provided in Section 3.3(e), the SPV
Purchaser shall have no obligation to account for, to replace, to substitute or
to return any Receivables and Related Rights to any Originator. Except as
otherwise provided in Section 3.3(e), the SPV Purchaser shall have no obligation
to account for, or to return to any Originator, Collections, or any interest or
other finance charge collected pursuant thereto, without regard to whether such
Collections and charges are in excess of the Purchase Price for such Receivables
and Related Rights.
(b) The SPV Purchaser shall have the unrestricted right to
further assign, transfer, deliver, hypothecate, subdivide or otherwise deal with
the Receivables and Related Rights, and all of the SPV Purchaser's right, title
and interest in, to and under this Agreement, on whatever terms the SPV
Purchaser shall determine, pursuant to the Receivables Purchase Agreement or
otherwise.
(c) The SPV Purchaser shall have the sole right to retain any
gains or profits created by buying, selling or holding the Receivables and
Related Rights and, except as expressly set forth in the Transaction Documents,
shall have the sole risk of and responsibility for losses or damages created by
such buying, selling or holding.
(d) Each of the Originators acknowledges that at any time
following the designation of a Servicer (other than Feed) in accordance with the
Receivables Purchase Agreement or during the occurrence and continuance of a LOL
Downgrade:
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(i) the Administrator may direct the Obligors of Receivables
to pay all amounts payable under any Receivable be made directly to the
Administrator or its designee;
(ii) the Administrator may instruct the Originators to give
notice to each Obligor of the SPV Purchaser's interest in the
Receivables or the interest of the Purchasers under the Receivables
Purchase Agreement in Receivables, which notice shall direct that
payments with respect to Receivables be made directly to the
Administrator or its designee, and, upon such instruction from the
Administrator, each of the Originators shall give such notice at its
expense; provided, that if any Originator fails to so notify each
Obligor, the Administrator may so notify the Obligors; and
(iii) the Administrator may request the Originators to, and
upon such request each of the Originators shall, (A) assemble all of
the documents, instruments and other records deemed by the
Administrator in its reasonable discretion to be necessary or desirable
to collect the Receivables and the Related Rights (including, without
limitation, computer programs (subject to licensing restrictions),
tapes and disks), and make the same available to the Administrator or
its designee at a place selected by the Administrator, and (B)
segregate all cash, checks and other instruments received by it from
time to time constituting Collections with respect to the Receivables
in a manner acceptable to the Administrator and, promptly upon receipt,
remit all such cash, checks and instruments, duly endorsed or with duly
executed instruments of transfer, to the Administrator or its designee.
(e) Each of the Originators hereby authorizes the SPV
Purchaser, and irrevocably appoints the SPV Purchaser as its attorney-in-fact
with full power of substitution and with full authority in the place and stead
of such Originator, which appointment is coupled with an interest, to take any
and all steps in the name of such Originator and on behalf of such Originator
necessary or desirable, in the determination of the SPV Purchaser, to collect
any and all amounts or portions thereof due under any and all Receivables or
Related Rights originated by such Originator, including, without limitation,
endorsing the name of such Originator on checks and other instruments
representing Collections and enforcing such Receivables and Related Rights.
SECTION 8.3 Responsibilities of the Originators. Anything herein to the
contrary notwithstanding:
(a) Each of the Originators agrees to deliver (and to
immediately notify the Servicer (if not Feed) that it has delivered) directly to
the Collection Account or any Lockbox Account (for the SPV Purchaser's account),
within two (2) Business Days of receipt thereof or, if a Termination Event shall
have occurred and
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be continuing or the Termination Period shall have commenced, immediately upon
receipt thereof, any Collections that it receives, in the form so received, and
agrees that all Collections shall be deemed to be received in trust for the SPV
Purchaser and shall be maintained and segregated separate and apart from all
other funds and moneys of such Originator until delivery of the Collections to
the Collection Account or such Lockbox Account;
(b) Each of the Originators agrees to instruct (i) all
Obligors to cause all Collections to be sent either to a Lockbox that is the
subject of a Lockbox Agreement and (ii) each Lockbox Bank or lockbox bank to
deposit all Collections directly into a Lockbox Account that is the subject of a
Lockbox Agreement.
(c) Each of the Originators shall (i) perform all of its
obligations hereunder and the Contracts related to the Receivables and Related
Rights (and under its agreements with any lockbox banks) to the same extent as
if the Receivables and Related Rights had not been sold or contributed hereunder
(subject to the terms and conditions of this Agreement and the other Transaction
Documents), and the exercise by the SPV Purchaser or its designee or assignee of
the SPV Purchaser's rights hereunder or in connection herewith shall not relieve
such Originator from such obligations and (ii) pay when due any taxes,
including, without limitation, any sales taxes payable in connection with the
Receivables and their creation and satisfaction. Notwithstanding anything to the
contrary in this Agreement, none of the SPV Purchaser, the Administrator or the
Purchasers under the Receivables Purchase Agreement shall have any obligation or
liability with respect to any Receivable or Related Rights nor shall any of them
be obligated to perform any of the obligations of any Originator under any of
the foregoing.
SECTION 8.4 Further Action Evidencing Purchases. Each of the
Originators agrees that from time to time, at its expense, it will promptly
execute and deliver all further instruments and documents, and take all further
action reasonably necessary or advisable, in order to perfect, protect or more
fully evidence the purchase of the Receivables and the Related Rights by the SPV
Purchaser hereunder, or to enable the SPV Purchaser to exercise or enforce any
of its rights hereunder or under any other Transaction Document. Each of the
Originators further agrees from time to time, at its expense, promptly to take
all action that the SPV Purchaser, the Servicer or the Administrator may
reasonably request in order to perfect, protect or more fully evidence such
purchase of the Receivables and the Related Rights or to enable the SPV
Purchaser or the Purchasers (as assignees of the SPV Purchaser) or the
Administrator to exercise or enforce any of its or their respective rights
hereunder or under any other Transaction Document in respect of the Receivables
and the Related Rights. Without limiting the generality of the foregoing each of
the Originators will, upon the request of the Administrator or its designee:
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(a) execute and file such financing or continuation
statements, or amendments thereto or assignments thereof, and such other
instruments or notices, as the SPV Purchaser or the Administrator may reasonably
determine to be necessary or appropriate; and
(b) to the extent reasonably practicable, xxxx the master data
processing records evidencing the Receivables and, if requested by the SPV
Purchaser or the Administrator, legend the related Contracts, to reflect the
sale of the Receivables and Related Rights pursuant to this Agreement and the
Receivables Purchase Agreement.
Each of the Originators hereby authorizes the SPV Purchaser or its
designee or assignee to file one or more financing or continuation statements,
and amendments thereto and assignments thereof, relative to all or any of the
Receivables and Related Rights of such Originator, in each case, whether now
existing or hereafter generated. If an Originator fails to perform any of its
agreements or obligations under this Agreement, the SPV Purchaser or its
designee or assignee may (but shall not be required to) itself perform, or cause
performance of, such agreement or obligation, and the reasonable expenses of the
SPV Purchaser or its designee or assignee incurred in connection therewith shall
be payable by such Originator under Section 7.1.
ARTICLE IX: MISCELLANEOUS
SECTION 9.1 Amendments, Etc. No amendment or waiver of any provision of
this Agreement or consent to any departure by any Originator therefrom shall be
effective unless in a writing signed by the SPV Purchaser, and consented to in
writing by the Administrator (acting at the request of the Required Purchasers),
and any such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. No failure on the part of the SPV
Purchaser or the Administrator to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right.
SECTION 9.2 Notices, Etc. All notices and other communications provided
for hereunder shall, unless otherwise expressly stated herein, be in writing
(including facsimile communication) and shall be personally delivered or sent by
certified mail, postage prepaid, or by facsimile, to the intended party at the
address or facsimile number of such party set forth under its name on Schedule
9.2 hereto or at such other address or Telex or facsimile number as shall be
designated by such party in a written notice to the other parties hereto. All
such notices and communications shall be effective, (a) if personally delivered,
when received, (b) if
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sent by certified mail, two (2) Business Days after having been deposited in the
mail, postage prepaid, (c) if sent by overnight courier, one (1) Business Day
after having been given to such courier, and (d) if transmitted by facsimile,
when sent, receipt confirmed by telephone or electronic means.
SECTION 9.3 Acknowledgment and Consent.
(a) Each of the Originators acknowledges that,
contemporaneously herewith or at any time hereafter, the SPV Purchaser is
assigning or will assign to the Administrator, for the benefit of the
Purchasers, pursuant to the Receivables Purchase Agreement, one or more
undivided interests in all of the SPV Purchaser's rights, title and interest in,
to and under the Receivables and Related Rights, and all of the SPV Purchaser's
right, title and interest in, to and under this Agreement, it being understood
that such assignment shall not relieve any party hereto from (or require the
Purchasers or the Administrator to undertake) the performance of any term,
covenant or agreement on the part of any Originator to be performed or observed
under or in connection with this Agreement. Each of the Originators hereby
consents to such assignments, including, without limitation, the assignment by
the SPV Purchaser of (i) the right of the SPV Purchaser, at any time, to enforce
this Agreement against such Originator, (ii) the right to appoint a successor to
the Servicer as set forth in the Receivables Purchase Agreement, (iii) the
right, at any time, to give or withhold any and all consents, requests, notices,
directions, approvals, demands, extensions or waivers under or with respect to
this Agreement, any other Transaction Document or the obligations in respect of
such Originator hereunder or thereunder to the same extent as the SPV Purchaser
may do, and all of the SPV Purchaser's rights, remedies, powers and privileges,
and all claims of the SPV Purchaser against such Originator, under or with
respect to this Agreement and the other Transaction Documents (whether arising
pursuant to the terms of this Agreement or otherwise available at law or in
equity). Each of the parties hereto acknowledges and agrees that the Purchasers,
the Administrator and the other Indemnified Parties are third party
beneficiaries of the rights of the SPV Purchaser arising hereunder and under the
other Transaction Documents to which any Originator is a party.
(b) Each of the Originators hereby agrees to execute all
agreements, instruments and documents, and to take all other action, that the
SPV Purchaser or the Administrator determines is necessary or reasonably
desirable to evidence its consent described in Section 9.3(a).
(c) Each of the Originators hereby acknowledges that its
obligations to the Purchasers and the Administrator as assignees of the SPV
Purchaser are and shall be, to the extent permitted by Applicable Law or not
prohibited by any order of any court or administrative or regulatory authority,
absolute and unconditional under any and all circumstances and shall be
unaffected
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by any claims, offsets or other defenses such Originator may have against the
SPV Purchaser, and such Originator agrees that it shall not assert or interpose
any such claims, offsets or defenses as a defense to its performance of its
obligations under the Transaction Documents to which it is a party.
SECTION 9.4 Binding Effect; Assignability. This Agreement shall be
binding upon and inure to the benefit of the SPV Purchaser, each Originator and
their respective successors and permitted assigns. No Originator may assign its
rights hereunder or any interest herein without the prior written consent of the
SPV Purchaser, or the Administrator acting at the request of the Purchasers;
except as described in Section 9.3, the SPV Purchaser may not assign its rights
hereunder or any interest herein without the prior written consent of each
Originator, or the Administrator acting at the request of the Purchasers. This
Agreement shall create and constitute the continuing obligations of the parties
hereto in accordance with its terms, and shall remain in full force and effect
until the date after the Sale Termination Date on which each Originator has
received indefeasible payment in full for all of its Receivables and Related
Rights conveyed pursuant to Section 1.1 hereof and has paid and performed all of
its obligations hereunder in full. The rights and remedies with respect to any
breach of any representation and warranty made by any Originator pursuant to
Article V shall be continuing and shall survive any termination of this
Agreement.
SECTION 9.5 Costs, Expenses and Taxes. In addition to the rights of
indemnification granted under Article VII, each Originator, jointly and
severally, agree to pay, within three (3) Business Days after demand, all costs
and expenses in connection with the preparation, execution, delivery and
administration (including, without limitation, but subject to the proviso to
Section 6.1(c), periodic auditing of Receivables) of this Agreement and the
other Transaction Documents, and any amendment, modification or waiver of or
consent to any of the foregoing, including, without limitation, attorneys' fees
for the Administrator, the SPV Purchaser and their respective Affiliates and
agents with respect thereto and with respect to advising the Administrator, the
SPV Purchaser and their respective Affiliates and agents as to their rights and
remedies under this Agreement and the other Transaction Documents, and all costs
and expenses, if any (including, without limitation, reasonable attorneys' fees
(including the allocated fees of in-house counsel)), of the Administrator, the
SPV Purchaser and their respective Affiliates and agents, in connection with the
enforcement of this Agreement and the other Transaction Documents.
SECTION 9.6 No Proceedings; Limitation on Payments. Each of the
Originators hereby agrees that it will not, and will not permit any of its
affiliates to, institute against, or join or encourage or support any other
Person in instituting against, the SPV Purchaser or any Purchaser any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding,
or other proceeding under any
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federal or state bankruptcy or similar law, for one year and one day after all
outstanding Capital under the Receivables Purchase Agreement has been paid in
full. The foregoing shall not limit any Originator's right to file any claim in
or otherwise take any action with respect to any insolvency proceeding that was
instituted by any Person other than an Originator.
SECTION 9.7 GOVERNING LAW AND JURISDICTION.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF MINNESOTA (WITHOUT GIVING EFFECT TO
THE CONFLICT OF LAWS PRINCIPLES THEREOF).
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF COLORADO OR ANY UNITED
STATES FEDERAL COURT SITTING IN COLORADO, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OF THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES
HERETO IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY TRANSACTION DOCUMENT. EACH PARTY HERETO WAIVES PERSONAL SERVICE
OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY COLORADO LAW.
SECTION 9.8 Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and all of which when taken together shall constitute one and the
same agreement.
SECTION 9.9 Survival of Termination. The provisions of Section 1.4,
Article VII, Section 9.3, Section 9.5, Section 9.6, Section 9.7, Section 9.10,
Section 9.15 and this Section 9.9 shall survive any termination of this
Agreement.
SECTION 9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES ITS
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR
OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF
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THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT
CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH PARTY HERETO AGREES THAT ANY SUCH CLAIM
OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, EACH OF THE PARTIES HERETO FURTHER AGREES THAT ITS
RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO
ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART,
TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
SECTION 9.11 Entire Agreement. This Agreement and the other Transaction
Documents embodies the entire agreement and understanding of the parties hereto,
and supersedes all prior or contemporaneous agreements and understandings of
such Persons, verbal or written, relating to the subject matter hereof and
thereof. The Exhibits, Schedules and Appendices to this Agreement shall be
deemed incorporated by reference into this Agreement as if set forth herein.
SECTION 9.12 Headings. The captions and headings of this Agreement and
in any Exhibit, Schedule or Appendix hereto are for convenience of reference
only and shall not affect the interpretation hereof or thereof.
SECTION 9.13 Subordination of Obligations of SPV Purchaser. Each of the
SPV Purchaser and the Originators covenants and agrees that the payment of all
Junior Liabilities and the exercise of any right or remedy in respect thereof
are hereby expressly and fully subordinated in right of payment to the payment
and performance of the Senior Interests to the extent and in the manner set
forth in the following clauses of this Section:
(a) No payment or other distribution of the SPV Purchaser's
assets of any kind or character, whether in cash, securities, or other rights or
property, shall be made on account of the Junior Liabilities except to the
extent such payment or other distribution is permitted under the Receivables
Purchase Agreement or Section 3.1(a)(i) and 3.2(a) of this Agreement;
(b) (i) In the event of any Event of Bankruptcy involving the
SPV Purchaser, and (ii) on and after the occurrence of the Sale Termination
Date, the Senior Interests shall first be indefeasibly paid and performed in
full and in cash before any Originator shall be entitled to receive and to
retain any payment or distribution in respect of the Junior Liabilities owing to
it. In order to implement the foregoing: (A) all payments and distributions of
any kind or character after the Event of Bankruptcy or Sale Termination Date in
respect of the Junior Liabilities to
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which any Originator would be entitled except for this subsection 9.13(b) shall
be made directly to the Administrator (for the benefit of the Senior Interest
Holders); and (B) each of the Originators hereby irrevocably agrees that the
Administrator, in the name of any Originator or otherwise, may demand, xxx for,
collect, receive and receipt for any and all such payments or distributions, and
file, prove and vote or consent in any such proceeding with respect to any and
all claims of such Originator relating to the Junior Liabilities owing to it, in
each case until the Senior Interests shall have been indefeasibly paid and
performed in full and in cash.
(c) In the event that any of the Originators receives any
payment or other distribution of any kind or character from the SPV Purchaser or
from any other source whatsoever, in respect of the Junior Liabilities owing to
it, other than as expressly permitted by the terms of this Agreement and the
Receivables Purchase Agreement, such payment or other distribution shall be
received in trust for the Senior Interest Holders and shall be turned over by
such Originator to the Administrator (for the benefit of the Senior Interest
Holders) forthwith until the Senior Interests have been indefeasibly paid in
full and in cash. All payments and distributions received by the Administrator
pursuant to this Section 9.13 in respect of the Junior Liabilities, to the
extent received in or converted into cash, may be applied by the Administrator
(for the benefit of the Senior Interest Holders) first to the payment of any and
all reasonable expenses (including, without limitation, reasonable attorneys'
fees and other legal expenses) paid or incurred by the Administrator or the
Senior Interest Holders in enforcing these Subordination Provisions, or in
endeavoring to collect or realize upon the Junior Liabilities, and any balance
thereof shall, solely as between such Originator and the Senior Interest
Holders, be applied by the Administrator toward the payment of the Senior
Interests in a manner determined by the Administrator to be in accordance with
the Receivables Purchase Agreement; but as between the SPV Purchaser and its
creditors other than the Originators, no such payments or distributions of any
kind or character shall be deemed to be payments or distributions in respect of
the Senior Interests.
(d) These Subordination Provisions are intended solely for the
purpose of defining the relative rights of the Originators, on the one hand, and
the Senior Interest Holders, on the other hand. Nothing contained in the
Subordination Provisions or elsewhere in this Agreement is intended to or shall
impair, as between the SPV Purchaser and the Originators, the SPV Purchaser's
obligation, which is unconditional and absolute, to pay the Junior Liabilities
as and when the same shall become due and payable in accordance with the terms
hereof or to affect the relative rights of the Originators and creditors of the
SPV Purchaser (other than the Senior Interest Holders).
(e) None of the Originators shall, until the Senior Interests
have been finally and indefeasibly paid and performed in full and in cash, (i)
cancel,
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xxxxx, xxxxxxx, transfer or assign, or commence legal proceedings to enforce or
collect, or subordinate to any obligation of the SPV Purchaser, howsoever
created, arising or evidenced, whether direct or indirect, absolute or
contingent, or now or hereafter existing, or due or to become due, other than
the Senior Interests, the Junior Liabilities, or any rights in respect thereof
or (ii) convert the Junior Liabilities into an equity interest in the SPV
Purchaser, unless, in the case of each of clauses (i) and (ii) above, such
Originator shall have received the prior written consent of the Administrator in
each instance.
(f) None of the Originators shall, without the advance written
consent of the Administrator, commence, or join with any other Person in
commencing, any proceedings related to an Event of Bankruptcy with respect to
the SPV Purchaser until at least one year and one day shall have passed since
the Senior Interests shall have been finally and indefeasibly paid and performed
in full and in cash.
(g) If, at any time, any payment (in whole or in part) made
with respect to any Senior Interest is rescinded or must be restored or returned
by a Senior Interest Holder (whether in connection with any Event of Bankruptcy
or otherwise), these Subordination Provisions shall continue to be effective or
shall be reinstated, as the case may be, as though such payment had not been
made.
(h) Each of the Senior Interest Holders may, from time to
time, at its sole discretion, without notice to any of Originators, and without
waiving any of its rights under these Subordination Provisions, take any or all
of the following actions: (i) retain or obtain an interest in any property to
secure any of the Senior Interests; (ii) retain or obtain the primary or
secondary obligations of any other Obligor or Obligors with respect to any of
the Senior Interests; (iii) extend or renew for one or more periods (whether or
not longer than the original period), alter or exchange any of the Senior
Interests, or release or compromise any obligation of any nature with respect to
any of the Senior Interests; (iv) amend, supplement, extend or otherwise modify
any Transaction Document; and (v) release its security interest in, or
surrender, release or permit any substitution or exchange for all or any part of
any rights or property securing any of the Senior Interests, or extend or renew
for one or more periods (whether or not longer than the original period), or
release, compromise, alter or exchange any obligations of any nature of any
obligor with respect to any such rights or property.
(i) Each of the Originators hereby waives: (i) notice of
acceptance of these Subordination Provisions by any of the Senior Interest
Holders; (ii) notice of the existence, creation, non-payment or non-performance
of all or any of the Senior Interests; and (iii) all diligence in enforcement,
collection or protection of, or realization upon the Senior Interests, or any
thereof, or any security therefor.
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(j) These Subordination Provisions constitute a continuing
offer from the SPV Purchaser to all Persons who become the holders of, or who
continue to hold, Senior Interests; and these Subordination Provisions are made
for the benefit of the Senior Interest Holders, and the Administrator may
proceed to enforce such provisions on behalf of each of such Persons.
SECTION 9.14 CoBank and Affiliates. Each of the Originators hereby
acknowledges and agrees that CoBank and any of its Affiliates may generally
engage in any kind of business with any Originator or any Obligor, any of their
respective Affiliates and any Person who may do business with or own securities
of any Originator or any Obligor or any of their respective Affiliates, all as
if CoBank were not the Administrator under the Receivables Purchase Agreement.
SECTION 9.15 Confidentiality of Program Information.
(a) Confidential Information. Each party hereto acknowledges
that CoBank regards the structure of the transactions contemplated by the
Receivables Purchase Agreement to be proprietary, and each such party severally
agrees that:
(i) it will not disclose without the prior consent of CoBank
or as is required or authorized by the Transaction Documents (other
than to the directors, employees, agents, auditors, counsel or
affiliates (collectively, "representatives") of such party, each of
whom shall be informed by such party of the confidential nature of the
Program Information (as defined below) and of the terms of this Section
9.15), (A) any information regarding the pricing in, or copies of, the
Receivables Purchase Agreement or any transaction contemplated hereby,
(B) any information regarding the organization, business or operations
of the Purchasers generally or the services performed by the
Administrator for Purchaser, or (C) any information which is furnished
by CoBank to such party and which is designated by CoBank to such party
in writing or otherwise as confidential or not otherwise available to
the general public (the information referred to in clauses (A), (B) and
(C) is collectively referred to as the "Program Information");
provided, however, that such party may disclose any such Program
Information: (I) to any other party to this Agreement for the purposes
contemplated hereby, (II) as may be required by any Governmental
Authority having or claiming to have jurisdiction over such party,
(III) in order to comply with Applicable Law, including, without
limitation, by filing the Transaction Documents with the Securities and
Exchange Commission (provided that none of the SPV Purchaser or any
Originator shall file the Fee Letter, or, if required by Applicable Law
to file the Fee Letter, the SPV Purchaser or such Originator, as the
case may be, shall request confidential treatment therefor) or (IV)
subject to subsection (c), in the event such party is legally compelled
(by interrogatories, requests for information or copies,
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subpoena, civil investigative demand or similar process) to disclose
any such Program Information;
(ii) it will use the Program Information solely for the
purposes of evaluating, administering and enforcing the transactions
contemplated by this Agreement and making any necessary business
judgments with respect thereto; and
(iii) it will, upon demand, return (and cause each of its
representatives to return) to CoBank, all documents or other written
material (other than documents executed by such party) received from
CoBank, as the case may be, in connection with (a)(i)(B) or (C) above
and all copies thereof made by such party which contain the Program
Information.
(b) Availability of Confidential Information. This Section
9.15 shall be inoperative as to such portions of the Program Information which
are or become generally available to the public or such party on a
nonconfidential basis from a source other than CoBank or were known to such
party on a nonconfidential basis prior to its disclosure by CoBank.
(c) Legal Compulsion to Disclose. In the event that any party
or anyone to whom such party or its representatives transmits the Program
Information is requested or becomes legally compelled (by interrogatories,
requests for information or documents, subpoena, civil investigative demand or
similar process) to disclose any of the Program Information, such party will, to
the extent that it may legally do so,
(i) provide CoBank with prompt written notice so that CoBank
may seek a protective order or other appropriate remedy and/or waive
compliance with the provisions of this Section 9.15; and
(ii) unless CoBank waives compliance by such party with the
provisions of this Section 9.15, make a timely objection to the request
or confirmation to provide such Program Information on the basis that
such Program Information is confidential and subject to the agreements
contained in this Section 9.15.
In the event that such protective order or other remedy is not obtained, or
CoBank waives compliance with the provisions of this Section 9.15, such party
will furnish only that portion of the Program Information which (in such party's
good faith judgment) is legally required to be furnished and will exercise
reasonable efforts to obtain reliable assurance that confidential treatment will
be accorded the Program Information.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
LAND O'LAKES, INC. as Originator
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxx
---------------------------------
Title: Chief Financial Officer
--------------------------------
LAND O'LAKES FARMLAND FEED LLC,
as Originator and as initial Servicer
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxx
---------------------------------
Title: Chief Financial Officer
--------------------------------
PURINA XXXXX, LLC, as Originator
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxx
---------------------------------
Title: Chief Financial Officer
--------------------------------
LOL Farmland Feed SPV, LLC, as SPV
Purchaser
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxx
---------------------------------
Title: Chief Financial Officer
--------------------------------
APPENDIX A (P&S)
DEFINITIONS
This is Appendix A (P&S) to the Purchase and Sale Agreement dated as of
December 18, 2001, by and between Land O'Lakes, Inc., a Minnesota cooperative
corporation ("LOL"), Land O'Lakes Farmland Feed LLC, a Delaware limited
liability company ("Feed"), and Purina Xxxxx, LLC, a Delaware limited liability
company ("Purina," and collectively with LOL and Feed, the "Originators"), as
Originators, Land O'Lakes Farmland Feed LLC, as initial Servicer, and LOL
Farmland Feed SPV, LLC, a Delaware limited liability company, as purchaser.
Unless otherwise defined herein or the context otherwise requires, certain terms
and interpretative rules that are used throughout this Agreement (including the
Exhibits hereto) are defined in Appendix A to the Receivables Purchase
Agreement, dated as of even date herewith, by and among the SPV Purchaser, as
Originator, Feed, as initial Servicer, CoBank, ACB, a federally chartered
instrumentality of the United States ("CoBank"), and the other Purchasers (as
defined therein) party thereto, and CoBank, as Administrator (as the same may be
amended, modified or supplemented from time to time, the "Receivables Purchase
Agreement"). Any reference to "this Agreement" or "the Purchase and Sale
Agreement," including any such reference in any Exhibit, Schedule or Appendix
hereto, shall mean this Agreement in its entirety, including the Exhibits,
Schedules and Appendices and other attachments hereto, as amended, modified or
supplemented from time to time in accordance with the terms hereof.
"Available Funds" shall have the meaning assigned to such term in
Section 3.2(a)(i) hereof.
"Contributed Receivables" shall have the meaning assigned to such term
in Section 1.1(b) hereof.
"Cost Discount" shall have the meaning assigned to such term in Section
2.1 hereof.
"Cost Rate" shall have the meaning assigned to such term in Section 2.1
hereof.
"Deemed Collection" means amounts payable by an Originator pursuant to
Section 3.3 hereof.
"Fair Market Value Discount Factor" shall have the meaning assigned to
such term in Section 2.1(c) hereof.
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"Final Maturity Date" means the first Business Day that falls one (1)
year and one (1) day after the later of (a) the Sale Termination Date and (b)
the Final Payout Date.
"Ineligible Receivable" shall have the meaning assigned to such term in
Section 3.3(b) hereof.
"Initial Contributed Receivables" shall have the meaning assigned to
such term in Section 1.1(b) hereof.
"Initial Cut-Off Date" means the second (2nd) Business Day immediately
preceding the Initial Purchase Date.
"Junior Liabilities" means all obligations of the SPV Purchaser to the
Originators under the SPV Purchaser Notes or under this Agreement and the other
Transaction Documents, except for the obligation to pay the Purchase Price
pursuant to Section 3.1(a)(i) and 3.2(a)(i) and the Servicer's Fee.
"Loss Discount" shall have the meaning assigned to such term in Section
2.1 hereof.
"Originator Material Adverse Effect" means, with respect to any event
or circumstance:
(i) an effect on the assets, business, financial condition or
operations of any Originator and its Subsidiaries, taken as a whole,
which could reasonably be expected to have a material adverse effect on
the creditworthiness of any Originator;
(ii) a material adverse effect on the ability of any Originator to
perform any obligations under this Agreement or any other Transaction
Document to which any Originator is a party;
(iii) a material adverse effect on the validity or enforceability as
against any Originator of this Agreement or any other Transaction
Document to which any Originator is a party;
(iv) a material adverse effect on the status, existence, perfection,
priority or enforceability of the SPV Purchaser's interest in the
Receivables Pool and the Related Rights; or
(v) a material adverse effect on the validity, enforceability or
collectibility of a material portion of the Receivables Pool.
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"Payment Day" means (i) the date hereof and (ii) each Business Day
thereafter that an Originator is open for business.
"Purchase Price" shall have the meaning assigned to such term in
Section 2.1(c) hereof.
"Purchase Report" shall have the meaning assigned to such term in
Section 2.1(a) hereof.
"Purchaser" shall have the meaning assigned to such term in paragraph 4
of the Recitals.
"Receivables Purchase Agreement" means the Receivables Purchase
Agreement dated as of the date hereof among the SPV Purchaser, as seller, Feed,
as initial Servicer, the Purchasers and the Administrator.
"Related Rights" shall have the meaning assigned to such term in
Section 1.1(a) hereof.
"Sale Indemnified Amounts" shall have the meaning assigned to such term
in Section 7.1 hereof.
"Sale Indemnified Party" shall have the meaning assigned to such term
in Section 7.1 hereof.
"Sale Termination Date" shall be the earliest of (i) an Event of
Bankruptcy involving the Purchaser or (ii) the Termination Date under the
Receivables Purchase Agreement.
"Senior Interests" means (a) the undivided percentage ownership
interests acquired by the Administrator for the benefit of the Purchasers
pursuant to the Receivables Purchase Agreement, (b) all obligations of the SPV
Purchaser to the Senior Interest Holders, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now or hereafter
existing, or due or to become due on or before the Final Maturity Date, (c) any
and all Yield, interest, fees, costs or other amounts in connection with of the
foregoing, including, without limitation, accruing or incurred and payable (even
if actual payment is prevented by operation of law or any claim therefor is not
allowed or allowable in the related case or proceeding) after the occurrence of
an Event of Bankruptcy.
"Senior Interest Holders" means, collectively, the Purchasers, the
Administrator and the other Indemnified Parties.
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"SPV Purchaser Note(s)" shall have the meaning assigned to such term in
Section 3.1(a).
"Subordination Provisions" means, collectively, clauses (a) through
(j), inclusive, of Section 9.13.
"Transaction Documents" means this Agreement, the Lockbox Agreements
and any Credit and Collection Policy.
"Yield Rate Percentage" shall be equal to a fraction (expressed as a
percentage) (x) the numerator of which is the sum of the products obtained by
multiplying (A) each Earned Discount Rate applicable to any portion of the Asset
Interest as of the first day of such Settlement Period, times (B) the amount of
the Capital (or portion thereof) to which such Yield Rate applied on such first
day, and (y) the denominator of which is the Capital on such first day.
Schedule 6.2
List of Lockbox Banks
Bank Address Account
---- ------- -------
Xxxxx Fargo & Company Minneapolis, MN #2391446909
(SPV Purchaser)
Xxxxx Fargo & Company Minneapolis, MN #2391445901
(SPV Purchaser)
Xxxxx Fargo & Company Minneapolis, MN #2391454580
(SPV Purchaser)
Bank One Chicago, IL #5816173
(SPV Purchaser)
US Bank Denver, CO #194311040214
(SPV Purchaser)
Firstar St. Louis, MO #4346850136
(SPV Purchaser)
The Chase Manhattan Bank Houston, TX #00101434059
(SPV Purchaser)
Schedule 9.2
Addresses
Land O'Lakes, Inc.
X.X. Xxx 00000
Xx. Xxxx, XX 00000-0000
Attention: Xxxx Xxxxxxxx, MS 2500
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Land O'Lakes Farmland Feed LLC
0000 Xxx Xxx Xxxx
Xxxxx Xxxxx, XX 00000
Attention: Xxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Purina Xxxxx, LLC
0000 Xxx Xxx Xxxx
Xxxxx Xxxxx, XX 00000
Attention: Xxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
LOL Farmland Feed SPV, LLC
0000 Xxx Xxx Xxxx, Xxxxx 000
Xxxxx Xxxxx, XX 00000
Attention: Xxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Land O'Lakes, Inc.
X.X. Xxx 00000
Xx. Xxxx, XX 00000-0000
Attention: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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Exhibit A
Form of Purchase Report
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Exhibit B
Form of SPV Purchaser Note
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Exhibit C
Corporate Separateness Assumptions, Statements and Representations
True Sale:
1. The Originators and the SPV Purchaser. LOL is a Minnesota
cooperative corporation and each of Farmland Feed, Purina and the SPV Purchaser
is a Delaware limited liability company. Each of the Originators is engaged in
the business of selling animal feed and related products and services and the
business of selling swine and swine related services. LOL is engaged in the
business of selling crop seed and related services. In connection with their
respective businesses, the Originators are engaged in the business of
originating, selling, financing and servicing receivables. The SPV Purchaser is
in the business of purchasing Receivables and selling undivided interests in the
purchased Receivables.
2. The Receivables. Prior to the transfer of any Receivables
to the SPV Purchaser, each of the Originators will have originated or acquired
the Receivables free and clear of any liens, claims or encumbrances other than a
lien in favor of CoBank, which will be released as to the Receivables prior to
their transfer to the SPV Purchaser. The Transaction Documents correctly
describe the Receivables.
3. Sale and Purchase or Contribution of the Receivables.
Pursuant to the Purchase Agreement, on the Initial Purchase Date each Originator
will transfer to the SPV Purchaser all of its right, title and interest in the
Receivables existing on the Initial Cut-Off Date (other than the Initial
Contributed Receivables). On each subsequent Purchase Date, the Purchase
Agreement provides that each Originator will transfer all its right, title and
interest in each Receivable originated by such Originator in the ordinary course
of its business immediately upon origination thereof, except that Receivables
generated from the Initial Cut-Off Date through the Initial Purchase Date will
be transferred on the day immediately following the Initial Purchase Date. The
Originators may suspend transfers of Receivables to the SPV Purchaser in
circumstances where the Servicer would be precluded from making a Reinvestment
under the RPA.
4. Payment of Purchase Price. In consideration for the
transfer of the Receivables (other than Contributed Receivables), on each
Payment Date, the SPV Purchaser will pay to each Originator, in immediately
available funds, the Purchase Price for the Receivables transferred by it (other
than the Contributed Receivables). The Purchase
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Price represents the fair market value for the Receivables (other than the
Contributed Receivables).
5. SPV Purchaser Notes. The SPV Purchaser will apply Available
Funds remaining on any Business Day after payment of the Purchase Price for
Receivables to pay principal and accrued interest on the SPV Purchaser Notes.
The Originators and the SPV Purchaser believe, based on historical default rates
with respect to the Originators' receivables similar to the Receivables, that
the Available Funds will be sufficient to pay all interest and principal on the
SPV Purchaser Notes. The Originators' businesses are seasonal in nature in that
Sales (and therefore the origination of Receivables) are often concentrated in
one part of the calendar year. The Originators believe that over the course of
any one-year period, increases to the SPV Purchaser Notes will be at least equal
to reductions of the principal amounts of the SPV Purchaser Notes.
6. Intent of the Parties; Treatment of the Transaction. The
Purchase Agreement provides, and it is the intent of each of the Originators and
the SPV Purchaser, that the transfers of the Receivables from each Originator to
the SPV Purchaser constitute absolute and irrevocable true sales of such
Receivables from such Originator to the SPV Purchaser (or in the case of
Contributed Receivables, conveyances in the form of capital contributions from
Farmland Feed to the SPV Purchaser). Each of the Originators and the SPV
Purchaser will treat the transfers of the Receivables as sales of the
Receivables by such Originator and purchases of the Receivables by the SPV
Purchaser (or, in the case of Contributed Receivables, as capital contributions)
for all purposes under generally accepted accounting principles ("GAAP").
7. Complete, Irrevocable Transfer. Except as described below
with respect to permitted modifications to a Receivable that may be agreed to by
Farmland Feed in its capacity as Servicer (or Purina or Corporate Credit in
their respective capacities as Sub-Servicer), each of the Originators will
transfer all control and title over the Receivables to the SPV Purchaser.
8. No Recourse. The transfer of the Receivables to the SPV
Purchaser is without recourse to the applicable Originator with respect to the
collectibility of the Receivables.
9. Identification of Receivables as Being Owned by the SPV
Purchaser. As of the purchase date for each Receivable, the records of each
Originator and the SPV Purchaser will be clearly and unambiguously marked to
show that the Receivables are owned by the SPV Purchaser.
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10. Disclosure of the Transaction. The financial statements of
the Originators and the SPV Purchaser will disclose the effects of the
Transaction as a sale (or capital contribution, as applicable) in accordance
with GAAP.
11. Fairness of Transaction. The management of each of the
Originators and the SPV Purchaser have each determined that the ownership of the
SPV Purchaser by Farmland Feed, the limited purposes of the SPV Purchaser and
the transfer of the Receivables from such Originator to the SPV Purchaser
pursuant to the Purchase Agreement are in the best interests of such Originator
and the SPV Purchaser.
12. Collectibility of Receivables. None of the Originators
will make any representations or warranties to the SPV Purchaser or its assigns
as to the collectibility of the Receivables, the solvency of the Obligors or any
guarantors, endorsers, co-makers or assuming parties on the Receivables, except
for those representations and warranties set forth in Sections 5.1(i) and 5.1(t)
of the Purchase Agreement as to compliance with the Credit and Collection
Policies and status as Eligible Receivables of Receivables identified on a
Purchase Report as such by the related Originator.
13. No Right to Surplus, Repurchase or Retransfer. Under the
terms of the Purchase Agreement, the Originators do not have the right to
receive any proceeds allocable to any Receivable other than the Purchase Price.
The Originators have no right or obligation to repurchase from the SPV
Purchaser, nor does the SPV Purchaser have any obligation to retransfer to any
Originator, any Receivable transferred to the SPV Purchaser (except as required
by Section 3.3(b) of the Purchase Agreement if an Originator breaches certain
representations and warranties to the SPV Purchaser with respect to the
Receivables).
14. Notice to Creditors and Potential Bona Fide Purchasers.
Each of the Originators will report on its financial records the transfer of the
Receivables made by it as a sale (or in the case of Farmland Feed, a sale or
capital contribution) under GAAP. Any GAAP financial statements, to the extent
prepared on a consolidated basis for an Originator and its consolidated
subsidiaries, will be appropriately footnoted or will otherwise disclose that
the Receivables have been sold (or contributed) to the SPV Purchaser. For
purposes of GAAP, the financial records of the SPV Purchaser will report the
Transaction as the purchase (or addition to capital) of Receivables from the
Originators. The computer records of each of the Originators storing essential
information on the Receivables and similar assets of such Originator will be
appropriately coded to reflect a sale (or capital contribution) of the
Receivables to the SPV Purchaser. In addition, if a third
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party, including a potential buyer of the Receivables, inquires, each Originator
will promptly indicate that the Receivables have been sold to the SPV Purchaser,
and no Originator will claim any ownership interest in the Receivables.
15. No Post-Sale Adjustment. No provision exists in the
Purchase Agreement (except with respect to Receivables that are subject to a
reduction or adjustment as a result of Dilution and the obligation to repurchase
Ineligible Receivables) for any modification of the Purchase Price after the
applicable Purchase Date with respect to a given Receivable.
16. No Recourse for Defaults. No Originator has guaranteed to
the SPV Purchaser or any assignee of or purchaser from to the SPV Purchaser, the
payment of any Receivable pursuant to the terms of the Purchase Agreement or any
other agreement. No Originator is obligated to repurchase from the SPV Purchaser
any Receivable in default, unless such default is attributable to a breach of
its representations and warranties with respect to such Receivable under the
Purchase Agreement.
17. Servicing of Receivables. The Servicer's Fee that Farmland
Feed will receive for servicing the Receivables is fair market compensation for
Farmland Feed's duties and obligations as Servicer. The fees that will be paid
to Corporate Credit and Purina as Sub-Servicers are fair market compensation for
their respective duties as Sub-Servicers. If a Servicer Transfer Event occurs,
the Administrator may terminate Farmland Feed as Servicer and replace Farmland
Feed with a successor Servicer and also terminate Corporate Credit and Purina as
Sub-Servicers. The ability on the part of Farmland Feed, Corporate Credit or
Purina, as applicable, to extend the time for payment of any Defaulted
Receivable in accordance with the applicable Credit and Collection Policies and
Section 8.2(c) of the RPA, and adjust the Unpaid Balance of any Receivable to
reflect the reductions and cancellations in Section 3.2(a) for Dilution or
breach of representations and certain warranties is consistent with the
delegation to a third party servicer for consideration of the day-to-day
administration of receivables that are not owned by such third party.
18. Reliance of the SPV Purchaser and the Purchasers. Each of
the SPV Purchaser and the Purchasers have relied on the nature of the transfers
of the Receivables from the Originators to the SPV Purchaser as "true sales" (or
capital contributions) in entering into and performing their obligations under
the Transaction Documents.
Substantive Consolidation:
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1. Organization. LOL is a Minnesota cooperative corporation and each of
Farmland Feed, Purina and the SPV Purchaser is a Delaware limited liability
company. LOL maintains good standing under the laws of the State of Minnesota
and Feed, Purina and the SPV Purchaser maintain good standing under the laws of
the State of Delaware.
2. Procedures Observed. The SPV Purchaser observes and shall observe
all company procedures required by the Certificate of Organization, its limited
liability company agreement and the limited liability company law of the State
of Delaware. All distributions of the SPV Purchaser will be paid and declared in
accordance with the law of the State of Delaware.
3. Management. The business and affairs of the SPV Purchaser are and
will be managed by or under the direction of the Board of Managers. The SPV
Purchaser at all times ensures and will ensure that the Board of Managers duly
authorizes all company actions requiring authorization by its Board of Managers.
When necessary, the SPV Purchaser obtains and will obtain proper authorization
from Farmland Feed as its sole member for company action. The officers and
managers of the SPV Purchaser shall make decisions with respect to the business
and daily operations of the SPV Purchaser independent of and not dictated by
Farmland Feed, LOL or Purina (each an "LOL Company" and collectively, the "LOL
Companies." In addition, the SPV Purchaser's officers and managers will adhere
to all statutes, rules, by-laws or other obligations regarding conflicts of
interest and participation in decision-making by officers and managers who may
have a conflict of interest with respect to the subject matter of the decision.
4. Independent Managers. As required by the Certificate of
Organization, the Board of Managers includes and will include at least one
"Independent Manager" (as that term is defined in the Certificate of
Organization).
5. Records. The SPV Purchaser maintains and will maintain separate
corporate records, documents and books of accounting from those of Feed, any
other LOL Company or any other entity, and keeps and will keep correct and
complete books and records of account and minutes of the meetings and other
proceedings of its members and the Board of Managers.
6. Offices. The SPV Purchaser will pay fair market rent for any office
space shared with an Originator and a fair share of any overhead costs. The SPV
Purchaser has an address and telephone number separate and distinct from the
address and telephone number of any of the LOL Companies.
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7. Identifiable Assets. The SPV Purchaser's assets will not be
commingled with those of any LOL Company, and the SPV Purchaser maintains and
shall maintain separate bank accounts and books of account from those of the LOL
Companies. The separate assets and liabilities of the SPV Purchaser are readily
distinguishable from those of the LOL Companies, and the separate assets and
liabilities of the SPV Purchaser and the LOL Companies can be quickly and
inexpensively identified and ascertained.
8. Capitalization. On the Initial Purchase Date, Farmland Feed will
capitalize the SPV Purchaser with approximately $1,000,000.00 in Initial
Contributed Receivables. In addition, pursuant to the Purchase Agreement, from
time to time Farmland Feed may designate additional Receivables transfers to the
SPV Purchaser as capital contributions. On the date hereof, each of the LOL
Companies and the SPV Purchaser is solvent, has adequate capital to carry on its
business, and intends to and believes that it will be able to pay its debts as
they mature. Neither any LOL Company nor the SPV Purchaser intends to, or
believes that it will, engage in any business for which its respective
capitalization would not be adequate. None of the transactions described in the
Transaction Documents is being entered into with the intent to hinder, defraud
or delay any of the creditors of any LOL Company or the SPV Purchaser.
9. Expenses. The SPV Purchaser shall pay from its own separate assets
all material liabilities incurred by it, including the wages and salaries of its
officers and all material administrative expenses. The SPV Purchaser will
reimburse Farmland Feed or the applicable LOL Company for its allocable portions
of any shared expenses.
10. Conduct. The SPV Purchaser conducts and will continue to conduct
its business solely in its own name so as not to mislead others as to the
identity of the SPV Purchaser. All oral and written communications, including
without limitation letters, invoices, purchase orders, contracts, statements and
applications, are made solely in the name of the SPV Purchaser if related to the
SPV Purchaser, or an LOL Company if related to such LOL Company, and are not
made in the name of the SPV Purchaser if related to an LOL Company or the name
of an LOL Company if related to the SPV Purchaser.
11. Intercompany Claims. None of the LOL Companies has guaranteed any
obligations of the SPV Purchaser, and the SPV Purchaser has not guaranteed any
obligations of any LOL Company. The SPV Purchaser will not guaranty or assume
any obligations of any LOL Company. There is no intercompany debt between the
SPV Purchaser and any LOL Company other than the SPV Purchaser Notes and debts
incurred in
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connection with their respective obligations to each other under the Purchase
Agreement. The SPV Purchaser will not lend funds or extend credit to any LOL
Company other than pursuant to the Purchase Agreement in connection with the
purchase of Receivables thereunder.
12. Reliance by Others. The SPV Purchaser (i) acts and will act solely
in its own name and through its duly authorized officers or agents in the
conduct of its businesses, (ii) will take no action which may mislead third
parties as to the separate corporate identities and separate assets and
liabilities of each LOL Company and the SPV Purchaser, and (iii) will have and
utilize its own invoices and letterhead separate from any LOL Company. No LOL
Company has (a) held itself out as having agreed to pay or become liable for the
debts of the SPV Purchaser, (b) operated or purported to operate as an
integrated, single economic unit with the SPV Purchaser, or (c) sought or
obtained credit from or incurred any obligation to any third party based upon
the assets of the SPV Purchaser, and no LOL Company will do any of those things
in the future. No LOL Company will identify the SPV Purchaser as a division or
department of itself or any other LOL Company.
13. Disclosure of the Transactions. The SPV Purchaser will maintain
separate financial statements from the LOL Companies. However, the LOL
Companies, the SPV Purchaser and certain affiliated entities may utilize
consolidated financial statements for certain tax and reporting purposes. Any
consolidated financial statements of any of the LOL Companies and the SPV
Purchaser will disclose, through appropriate footnotes or otherwise, the
separate corporate existence of the SPV Purchaser, that the Receivables have
been sold or contributed to the SPV Purchaser pursuant to the Purchase
Agreement, and the interests of the SPV Purchaser in the Receivables.
14. Fairness of Transactions. The management of Farmland Feed and the
SPV Purchaser have determined that the ownership of the SPV Purchaser by
Farmland Feed and the limited purposes of the SPV Purchaser are in the best
interests of Farmland Feed and the SPV Purchaser.
15. Transaction Documents. The SPV Purchaser and each LOL Company will
comply with the Transaction Documents in accordance with their respective terms,
in all respects material to this opinion, and the Transaction Documents will not
be modified in any material way except as provided for therein. The resolutions,
agreements and other instruments regarding the transactions contemplated by the
Transaction Documents will be continuously maintained as official records of
each of the SPV Purchaser and each LOL Company. In addition to, and consistent
with the foregoing, neither the SPV Purchaser nor any LOL Company will take any
actions that
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are inconsistent with the terms of, or expectations of the SPV Purchaser's or
such LOL Company's creditors with respect to the Transaction Documents or any of
the foregoing assumptions.
16. Reliance of the Purchasers. The Administrator and the Purchasers
are relying on the separate credit of the SPV Purchaser in entering into and
performing under the terms of the Transaction Documents to which each is a party
(except to the extent that any LOL Company has separate obligations under the
Transaction Documents) and may be materially harmed by a failure to respect the
separate corporate existence of the SPV Purchaser.
