EXHIBIT 10.17
AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
DATED AS OF DECEMBER 21, 2001
BETWEEN
MORNINGSTAR FOODS, INC,
as Seller,
AND
MORNINGSTAR RECEIVABLES CORP.,
as Buyer
AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
TABLE OF CONTENTS
Page
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ARTICLE I AMOUNTS AND TERMS OF THE PURCHASE......................................................2
Section 1.1 Purchase of Receivables.................................................2
Section 1.2 Payment for the Purchase................................................3
Section 1.3 Purchase Price Credit Adjustments.......................................5
Section 1.4 Payments and Computations, Etc..........................................6
Section 1.5 Transfer of Records.....................................................6
Section 1.6 Characterization........................................................7
ARTICLE II REPRESENTATIONS AND WARRANTIES.........................................................7
Section 2.1 Representations and Warranties of Morningstar...........................7
ARTICLE III CONDITIONS OF PURCHASE................................................................12
Section 3.1 Conditions Precedent to Purchase.......................................12
Section 3.2 Conditions Precedent to Subsequent Payments............................12
ARTICLE IV COVENANTS.............................................................................13
Section 4.1 Affirmative Covenants of the Originator................................13
Section 4.2 Negative Covenants.....................................................18
ARTICLE V TERMINATION EVENTS....................................................................19
Section 5.1 Termination Events.....................................................19
Section 5.2 Remedies...............................................................21
ARTICLE VI INDEMNIFICATION.......................................................................21
Section 6.1 Indemnities by Morningstar.............................................21
Section 6.2 Other Costs and Expenses...............................................24
ARTICLE VII MISCELLANEOUS.........................................................................24
Section 7.1 Waivers and Amendments.................................................24
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Page
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Section 7.2 Notices................................................................25
Section 7.3 Protection of Ownership Interests of Buyer.............................25
Section 7.4 Confidentiality........................................................26
Section 7.5 Bankruptcy Petition....................................................27
Section 7.6 Limitation of Liability................................................27
Section 7.7 CHOICE OF LAW..........................................................27
Section 7.8 CONSENT TO JURISDICTION................................................28
Section 7.9 WAIVER OF JURY TRIAL...................................................28
Section 7.10 Integration; Binding Effect; Survival of Terms.........................28
Section 7.11 Counterparts; Severability; Section References.........................29
Section 7.12 Confirmation and Ratification of Terms.................................29
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Exhibits and Schedules
Exhibit I - Definitions
Exhibit II - Principal Place of Business; Location(s) of Records;
Federal Employer Identification Number; Other Names
Exhibit III - Lock-Boxes; Collection Accounts; Collection Banks
Exhibit IV - Form of Compliance Certificate
Exhibit V - Credit and Collection Policies
Exhibit VI - [Intentionally Omitted.]
Exhibit VII - Form of Subordinated Transfer Note
Schedule A List of Documents to Be Delivered to Buyer Prior to
the Purchase
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AMENDED AND RESTATED
RECEIVABLES TRANSFER AGREEMENT
THIS AMENDED AND RESTATED RECEIVABLES TRANSFER AGREE MENT,
dated as of December 21, 2001, is by and between Morningstar Foods Inc., a
Delaware corporation ("Morningstar"), and Morningstar Receivables Corp., a
Delaware corporation, ("Buyer"). Unless defined elsewhere herein, capitalized
terms used in this Agreement shall have the meanings assigned to such terms in
Exhibit I hereto (or, if not defined in Exhibit I hereto, the meaning assigned
to such term in Exhibit I to the Purchase Agreement).
PRELIMINARY STATEMENTS
Morningstar and Buyer entered into that certain Receivables
Transfer Agree ment, dated as of June 30, 2000 (as amended, restated or
otherwise modified prior to the date hereof, the "Original Transfer
Agreement"), pursuant to which Morningstar sold and assigned to Buyer,
and Buyer purchased from Morningstar, all of Morningstar's right, title
and interest in and to Morningstar's Receivables, together with the
Related Security and Collections with respect thereto.
Morningstar desires to continue to sell and assign to Buyer,
and Buyer desires to continue to purchase Morningstar's Receivables and
the Related Security and Collections with respect thereto. Buyer
continues to own all Receivables of Morningstar outstanding as of the
close of business on the Business Day immediately prior to the date
hereof and previously conveyed pursuant to the Original Transfer
Agreement (such Receivables, the "Previously Sold Receivables").
Morningstar and Buyer intend the transactions contemplated
hereby to be true sales of the Receivables from Morningstar to Buyer,
providing Buyer with the full benefits of ownership of the Receivables,
and neither Morningstar nor Buyer intend these transactions to be, or
for any purpose (other than tax) to be characterized as, loans from
Buyer to Morningstar.
Following the purchase of Receivables from Morningstar, Buyer
will sell its interests therein and in the associated Related Security
and Collections pursuant to that certain Amended and Restated
Receivables Sale Agreement dated as of December 21, 2001 (as the same
may from time to time hereafter be amended, supplemented, restated or
otherwise modified, the "Sale Agreement") among Buyer, as an Originator
(as defined under the Sale Agreement), the other Originators named
therein, and Dairy Group Receivables, L.P. (f/k/a Suiza Receivables,
L.P., a Delaware limited partnership ("Dairy Group L.P.").
AMENDED AND RESTATED
RECEIVABLES TRANSFER AGREEMENT
Following the purchase of such Receivables from the
Originators, Dairy Group L.P. will sell undivided interests therein and
in the associated Related Security and Collections pursuant to that
certain Amended and Restated Receivables Purchase Agreement dated as of
December 21, 2001 (as the same may from time to time hereafter be
amended, supplemented, restated or otherwise modified, the "Purchase
Agreement") among Dairy Group, L.P., the Originators, as Servicers, the
Companies (as defined therein), the financial institutions from time to
time party thereto as "Financial Institutions" and Bank One, NA (Main
Office Chicago) or any successor agent appointed pursuant to the terms
of the Purchase Agreement, as agent for the Companies and such
Financial Institutions (in such capacity, the "Agent").
Morningstar and Buyer now desire to amend and restate the
Original Transfer Agreement in its entirety, subject to the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual agreements herein contained and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree that, subject to the satisfaction of the conditions set
forth in Section 3.1 hereof, the Original Transfer Agreement is hereby amended
and restated in its entirety to read as follows:
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASE
Section 1.1 Purchase of Receivables.
(a) Effective on the date hereof, in consideration
for the Purchase Price and upon the terms and subject to the conditions set
forth herein, Morningstar does hereby sell, assign, transfer, set-over and
otherwise convey to Buyer, without recourse (except to the extent expressly
provided herein), and Buyer does hereby purchase from Morningstar, all of
Morningstar's right, title and interest in and to all Receivables existing as of
the close of business on the Business Day immediately prior to the date hereof
other than the Previously Sold Receivables (which have been previously sold and
assigned to Buyer) and all Receivables thereafter arising through and including
the Termination Date, together, in each case, with all Related Security relating
thereto and all Collections thereof. In accordance with the preceding sentence,
on the date hereof Buyer shall acquire all of Morningstar's right, title and
interest in and to all Receivables existing as of the close of business on the
Business Day immediately prior to the date hereof (other than the Previously
Sold Receivables) and thereafter arising through and including the Termination
Date, together with all Related Security relating thereto and all Collections
thereof. Buyer shall be
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AMENDED AND RESTATED
RECEIVABLES TRANSFER AGREEMENT
obligated to pay the Purchase Price for the Receivables purchased hereunder in
accordance with Section 1.2. In connection with consummation of the Purchase
Price for any Receivables purchased hereunder, Buyer may request that
Morningstar deliver, and Morningstar shall deliver, such approvals, opinions,
information, reports or documents as Buyer may reasonably request.
(b) It is the intention of the parties hereto that
the Purchase of Receivables made hereunder shall constitute a sale, which sale
is absolute and irrevocable and provides Buyer with the full benefits of
ownership of the Receivables. Except for the Purchase Price Credits owed
pursuant to Section 1.3, the sale of Receivables hereunder is made without
recourse to Morningstar; provided, however, that (i) Morningstar shall be liable
to Buyer for all representations, warranties, covenants and indemnities made by
Morningstar pursuant to the terms of the Transaction Documents to which
Morningstar is a party, and (ii) such sale does not constitute and is not
intended to result in an assumption by Buyer or any assignee thereof of any
obligation of Morningstar or any other Person arising in connection with the
Receivables, the related Contracts and/or other Related Security or any other
obligations of Morningstar. In view of the intention of the parties hereto that
the Purchase of Receivables made hereunder shall constitute a sale of such
Receivables rather than loans secured thereby, Morningstar agrees that it will,
on or prior to the date hereof and in accordance with Section 4.1(e)(ii), xxxx
its master data processing records relating to the Receivables with a legend
acceptable to Buyer, Dairy Group L.P. (as Buyer's assignee) and to the Agent (as
Dairy Group L.P.'s assignee), evidencing that Buyer has purchased such
Receivables as provided in this Agreement and to note in its financial
statements that the Receivables have been sold to Buyer. Upon the request of
Buyer, Dairy Group L.P. (as Buyer's assignee) or the Agent (as Dairy Group
L.P.'s assignee), Morningstar will execute and file such financing or
continuation statements, or amendments thereto or assignments thereof, and such
other instruments or notices, as may be necessary or appropriate to perfect and
maintain the perfection of Buyer's ownership interest in the Receivables and the
Related Security and Collections with respect thereto, or as Buyer, Dairy Group
L.P. or the Agent (as Dairy Group L.P.'s assignee) may reasonably request.
Section 1.2 Payment for the Purchase.
(a) The Purchase Price for the Purchase of
Receivables in existence on the close of business on the Business Day
immediately preceding the date hereof (the "Initial Cutoff Date") shall be
payable in full by Buyer to Morningstar on the date hereof, and shall be paid to
Morningstar in the following manner:
(i) by delivery of immediately available
funds, to the extent of funds made available to Buyer in connection
with its
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AMENDED AND RESTATED
RECEIVABLES TRANSFER AGREEMENT
subsequent sale of an interest in such Receivables to Dairy Group L.P.
under the Sale Agreement; and
(ii) the balance, by delivery of the
proceeds of a subordinated revolving loan from Morningstar to Buyer (a
"Subordinated Transfer Loan") in an amount not to exceed the least of
(A) the remaining unpaid portion of such Purchase Price, (B) the
maximum Subordinated Loan that could be borrowed without rendering
Buyer's Net Worth less than the Required Capital Amount and (C) the
maximum Subordinated Transfer Loan that could be borrowed without
rendering the Net Value less than the aggregate outstanding principal
balance of the Subordinated Transfer Loans (including the Subordinated
Transfer Loan proposed to be made on such date). Morningstar is hereby
authorized by Buyer to endorse on the schedule attached to the
Subordinated Transfer Note an appropriate notation evidencing the date
and amount of each advance thereunder, as well as the date of each
payment with respect thereto, provided that the failure to make such
notation shall not affect any obligation of Buyer thereunder.
The Purchase Price for each Receivable coming into existence after the Initial
Cutoff Date shall be due and owing in full by Buyer to Morningstar or its
designee on the date each such Receivable came into existence (except that Buyer
may, with respect to any such Purchase Price, offset against such Purchase Price
any amounts owed by Morningstar to Buyer hereunder and which have become due but
remain unpaid) and shall be paid to Morningstar in the manner provided in the
following paragraphs (b), (c) and (d).
(b) With respect to any Receivables coming into
existence after the Initial Cutoff Date, on each Settlement Date, Buyer shall
pay the Purchase Price therefor in accordance with Section 1.2(d) and in the
following manner:
first, by delivery of immediately available funds, to
the extent of funds available to Buyer from its subsequent sale of an
interest in the Receivables to Dairy Group L.P. under the Sale
Agreement or other cash on hand; and
second, by delivery of the proceeds of a Subordinated
Transfer Loan, provided that the making of any such Subordinated
Transfer Loan shall be subject to the provisions set forth in Section
1.2(a)(ii).
Subject to the limitations set forth in Section 1.2(a)(ii), Morningstar
irrevocably agrees to advance each Subordinated Transfer Loan requested by Buyer
on or prior to the Termination Date. The Subordinated Transfer Loans shall be
evidenced by, and shall be payable in
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AMENDED AND RESTATED
RECEIVABLES TRANSFER AGREEMENT
accordance with the terms and provisions of the Subordinated Transfer Note and
shall be payable solely from funds which Buyer is not required under the Sale
Agreement to set aside for the benefit of, or otherwise pay over to, Dairy Group
L.P. (and its assigns).
(c) From and after the Termination Date, Morningstar
shall not be obligated to (but may, at its option), sell Receivables to Buyer.
(d) Although the Purchase Price for each Receivable
coming into existence after the Initial Cutoff Date shall be due and payable in
full by Buyer to Morningstar on the date such Receivable came into existence,
settlement of the Purchase Price between Buyer and Morningstar shall be effected
on a monthly basis on Settlement Dates with respect to all Receivables coming
into existence during the same Calculation Period and based on the information
contained in the Monthly Report delivered by the Servicers pursuant to Article
VIII of the Purchase Agreement for the Calculation Period then most recently
ended. Although settlement shall be effected on Settlement Dates, increases or
decreases in the amount owing under the Subordinated Transfer Note made pursuant
to Section 1.2(b) shall be deemed to have occurred and shall be effective as of
the last Business Day of the Calculation Period to which such settlement
relates.
Section 1.3 Purchase Price Credit Adjustments. If on any day:
(a) the Outstanding Balance of a Receivable is:
(i) reduced as a result of any defective
or rejected or returned goods or services, any discount, rebate or any
adjustment or otherwise by Morningstar (other than cash Collections on
account of the Receivables and other than Receivables that, consistent
with Morningstar's Credit and Collection Policy, have been written off
Morningstar's books as uncollectible other than as a result of any of
the other conditions or events set forth in this definition),
(ii) reduced or canceled as a result of
a setoff in respect of any claim by any Person (whether such claim
arises out of the same or a related transaction or an unrelated
transaction), or
(b) any of the representations and warranties set
forth in Article II are not true when made or deemed made with respect to any
Receivable, or
(c) any Contract with respect to any Receivable shall
fail to create a legal, valid and binding obligation of the related Obligor to
pay the Outstanding Balance of the Receivable created thereunder and any accrued
interest thereon,
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AMENDED AND RESTATED
RECEIVABLES TRANSFER AGREEMENT
then, in such event, Buyer shall be entitled to a credit (each, a "Purchase
Price Credit") against the Purchase Price otherwise payable hereunder to
Morningstar equal to (x) in the case of any Receivable reduced or cancelled
pursuant to clause (a) above, the amount of such reduction or cancellation and
(y) in all other cases, the Outstanding Balance of such Receivable (calculated
before giving effect to the applicable reduction or cancellation). If such
Purchase Price Credit exceeds the Original Balance of the Receivables coming
into existence on any day, then Morningstar shall pay the remaining amount of
such Purchase Price Credit in cash immediately, provided that if the Termination
Date has not occurred, Morningstar shall be allowed to deduct the remaining
amount of such Purchase Price Credit from any indebtedness owed to it under the
Subordinated Transfer Note.
Section 1.4 Payments and Computations, Etc. All amounts to be
paid or deposited by Buyer hereunder shall be paid or deposited in accordance
with the terms hereof on the day when due in immediately available funds to the
account of Morningstar as it may designate from time to time and at any time or
as Morningstar may otherwise direct. In the event that any payment owed by any
Person hereunder becomes due on a day that is not a Business Day, then such
payment shall be made on the next succeeding Business Day. If any Person fails
to pay any amount hereunder when due, such Person agrees to pay, on demand, the
Default Fee in respect thereof until paid in full; provided, however, that such
Default Fee shall not at any time exceed the maximum rate permitted by
applicable law. All computations of interest payable hereunder shall be made on
the basis of a year of 360 days for the actual number of days (including the
first but excluding the last day) elapsed.
Section 1.5 Transfer of Records.
(a) In connection with the Purchase of Receivables
hereunder, Morningstar hereby sells, transfers, assigns and otherwise conveys to
Buyer all of its right and title to and interest in the Records relating to all
Receivables sold hereunder, without the need for any further documentation in
connection with the Purchase. In connection with such transfer, Morningstar
hereby grants to each of Buyer, Dairy Group, L.P., the Agent and the Servicer of
the Receivables an irrevocable, non-exclusive license to use, without royalty or
payment of any kind, all software used by Morningstar to account for its
Receivables, to the extent necessary to administer such Receivables, whether
such software is owned by Morningstar or is owned by others and used by
Morningstar under license agreements with respect thereto, provided that should
the consent of any licensor of such software be required for the grant of the
license described herein, to be effective, Morningstar hereby agrees that upon
the request of Buyer, Dairy Group L.P., the Agent or the Servicer of the
Receivables, Morningstar will use its reasonable efforts to obtain the consent
of such third-party licensor. The license granted hereby shall be irrevocable
until the indefeasible
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AMENDED AND RESTATED
RECEIVABLES TRANSFER AGREEMENT
payment in full of the Aggregate Unpaids, and shall terminate on the date this
Agreement terminates in accordance with its terms.
(b) Morningstar (i) shall take such action requested
by Buyer (or its assigns), from time to time hereafter, that may be necessary or
appropriate to ensure that Buyer and its assigns under the Sale Agreement have
an enforceable ownership interest in the Records relating to the Receivables
purchased from Morningstar hereunder, and (ii) shall use its reasonable efforts
to ensure that Buyer, Dairy Group L.P., the Agent and any Servicer of the
Receivables each has an enforceable right (whether by license or sublicense or
otherwise) to use all of the computer software used to account for the
Receivables and/or to recreate such Records.
Section 1.6 Characterization. If, notwithstanding the
intention of the parties expressed in Section 1.1(b), any sale or contribution
by Morningstar to Buyer of Receivables hereunder shall be characterized as a
secured loan and not a sale or such sale shall for any reason be ineffective or
unenforceable, then this Agreement shall be deemed to constitute a security
agreement under the UCC and other applicable law. For this purpose and without
being in derogation of the parties' intention that the sale of Receivables
hereunder shall constitute a true sale thereof, Morningstar hereby grants to
Buyer a duly perfected security interest in all of Morningstar's right, title
and interest in, to and under all Receivables now existing and hereafter
arising, all Collections and Related Security with respect thereto, each
Lock-Box and Collection Account, all other rights and payments relating to the
Receivables and all proceeds of the foregoing to secure the prompt and complete
payment of a loan deemed to have been made in an amount equal to the Purchase
Price of the Receivables together with all other obligations of Morningstar
hereunder, which security interest shall be prior to all other Adverse Claims
thereto. Buyer and its assigns shall have, in addition to the rights and
remedies which they may have under this Agreement, all other rights and remedies
provided to a secured creditor under the UCC and other applicable law, which
rights and remedies shall be cumulative.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of Morningstar.
Morningstar hereby represents and warrants to Buyer on the date hereof, on the
date of the Purchase and on each date that any Receivable comes into existence
that:
(a) Corporate Existence and Power. Morningstar is a
corporation duly organized and validly existing in good standing under the laws
of its state of incorporation. Morningstar is duly qualified to do business and
is in good standing as a foreign corporation or entity, and has and holds all
corporate or other power and all governmental
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AMENDED AND RESTATED
RECEIVABLES TRANSFER AGREEMENT
licenses, authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is conducted except to the
extent that the failure to so qualify or hold could not reasonably be expected
to have a Material Adverse Effect.
(b) Power and Authority; Due Authorization, Execution
and Delivery. The execution and delivery by Morningstar of this Agreement and
each other Transaction Document to which it is a party, and the performance of
its obligations hereunder and thereunder and Morningstar's use of the proceeds
of the Purchase made hereunder, are within its corporate power and authority,
and have been duly authorized by all necessary corporate action on its part.
This Agreement and each other Transaction Document to which Morningstar is a
party has been duly executed and delivered by Morningstar.
(c) No Conflict. The execution and delivery by
Morningstar of this Agreement and each other Transaction Document to which it is
a party, and the performance of its obligations hereunder and thereunder do not
contravene or violate (i) its certificate or articles of incorporation or
by-laws or any shareholder agreements, voting trusts or similar arrangements
applicable to any of its authorized shares, (ii) any law, rule or regulation
applicable to it, (iii) any restrictions under any material agreement, contract
or instrument to which it is a party or by which it or any of its property is
bound, or (iv) any order, writ, judgment, award, injunction or decree binding on
or affecting it or its property, and do not result in the creation or imposition
of any Adverse Claim on its assets or its Subsidiaries (except as created
hereunder). No transaction contemplated hereby requires compliance with any bulk
sales act or similar law.
(d) Governmental Authorization. Other than the filing
of the financing statements required hereunder, no authorization or approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution and delivery by Morningstar of
this Agreement and each other Transaction Document to which it is a party and
the performance of its obligations hereunder and thereunder.
(e) Actions, Suits. There are no actions, suits or
proceedings pending, or to the best of Morningstar's knowledge, threatened,
against or affecting Morningstar, or any of its properties, in or before any
court, arbitrator or other body, that could reasonably be expected to have a
Material Adverse Effect. Morningstar is not in default with respect to any order
of any court, arbitrator or governmental body.
(f) Binding Effect. This Agreement and each other
Transaction Document to which Morningstar is a party constitute the legal, valid
and binding obligations of Morningstar enforceable against Morningstar in
accordance with their respective terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency,
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AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
reorganization or other similar laws relating to or limiting creditors' rights
generally and by general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law).
(g) Accuracy of Information. All information
heretofore furnished by Morningstar or any of its Affiliates to Buyer (or its
assigns) for purposes of or in connection with this Agreement, any of the other
Transaction Documents or any transaction contemplated hereby or thereby is, and
all such information hereafter furnished by Morningstar or any of its Affiliates
to Buyer (or its assigns) will be, true and accurate in every material respect
on the date such information is stated or certified and does not and will not
contain any material misstatement of fact or omit to state a material fact or
any fact necessary to make the statements contained therein not misleading in
light of the circumstances made or presented.
(h) Use of Proceeds. No proceeds of any Purchase
Price payment to Morningstar hereunder will be used (i) for a purpose that
violates, or would be inconsistent with, any law, rule or regulation applicable
to Morningstar or (ii) to acquire any security in any transaction which is
subject to Section 12, 13 or 14 of the Securities Exchange Act of 1934, as
amended.
(i) Good Title. Immediately prior to the Purchase
hereunder and upon the creation of each Receivable coming into existence after
the Initial Cut-Off Date, Morningstar (i) is the legal and beneficial owner of
the Receivables to be sold hereunder, and (ii) is the legal and beneficial owner
of the Related Security with respect thereto or possesses a valid and perfected
security interest therein, in each case, free and clear of any Adverse Claim,
except as created by the Transaction Documents. There have been duly filed all
financing statements or other similar instruments or documents necessary under
the UCC (or any comparable law) of all appropriate jurisdictions to perfect
Morningstar's ownership interest in each Receivable, the Collections and the
Related Security.
(j) Perfection. This Agreement, together with the
filing of the financing statements contemplated hereby, is effective to transfer
to Buyer (and Buyer shall acquire from Morningstar) (i) legal and equitable
title to, with the right to sell and encumber each Receivable existing or
hereafter arising, together with the Collections with respect thereto, and (ii)
all of Morningstar's right, title and interest in the Related Security
associated with each Receivable, in each case, free and clear of any Adverse
Claim, except as created by the Transactions Documents. There have been duly
filed all financing statements or other similar instruments or documents
necessary under the UCC (or any comparable law) of all appropriate jurisdictions
to perfect Buyer's ownership interest in the Receivables, the Related Security
and the Collections.
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AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
(k) Jurisdiction of Organization; Places of Business,
etc. Exhibit II correctly sets forth Morningstar's legal name, jurisdiction of
organization, Federal Employer's Identification Number and State Organizational
Identification Number. Morningstar's principal places of business and chief
executive office and the offices where it keeps all of its Records are located
at the address(es) listed on Exhibit II or such other locations of which Buyer
has been notified in accordance with Section 4.2(a) in jurisdictions where all
action required by Section 4.2(a) has been taken and completed. Morningstar has
not within the period of six months prior to the date hereof, (i) changed its
location (within the meaning of Section 9-307 of the UCC) or (ii) changed its
legal name, corporate structure or become a "new debtor" (within the meaning of
Section 9-102(a)(56) of the UCC) with respect to a currently effective security
agreement previously entered into by any other Person. Morningstar is a
"registered organization" (within the meaning of Section 9-102 of the UCC as in
effect in the applicable jurisdiction).
(l) Collections. The conditions and requirements set
forth in Section 4.1(j) have at all times been satisfied and duly performed. The
names and addresses of all Collection Banks, together with the account numbers
of the Collection Accounts of Morningstar at each Collection Bank and the post
office box number of each Lock-Box, are listed on Exhibit III. Morningstar has
not granted any Person, other than Buyer (and its assigns) dominion and control
of any Lock-Box or Collection Account, or the right to take dominion and control
or "control" (within the meaning of Section 9-104 of the UCC of all applicable
jurisdictions) of any such Lock-Box or Collection Account at a future time or
upon the occurrence of a future event.
(m) Material Adverse Effect. Since December 31, 1999,
no event has occurred that would have a Material Adverse Effect.
(n) Names. In the past five (5) years, Morningstar
has not used any corporate names, trade names or assumed names other than as
listed on Exhibit II.
(o) Not a Holding Company or an Investment Company.
Morningstar is not a "holding company" or a "subsidiary holding company" of a
"holding company" within the meaning of the Public Utility Holding Company Act
of 1935, as amended, or any successor statute. Morningstar is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or any successor statute.
(p) Compliance with Law. Morningstar has complied in
all respects with all applicable laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject, except
where the failure to so comply could not reasonably be expected to have a
Material Adverse Effect. Each Receivable, together with any Writing or Contract
related thereto, does not contravene any laws, rules or
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AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
regulations applicable thereto (including, without limitation, laws, rules and
regulations relating to truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices and
privacy), and no part of such Writing or Contract is in violation of any such
law, rule or regulation.
(q) Compliance with Credit and Collection Policies.
Morningstar has complied in all material respects with its Credit and Collection
Policy with regard to each Receivable and any related Writing or Contract, and
has not made any material change to such Credit and Collection Policy, except
such material change as to which Buyer (or its assigns) has been notified in
accordance with Section 4.1(a)(vii).
(r) Payments to Morningstar. With respect to each
Receivable transferred to Buyer by Morningstar hereunder, the Purchase Price
received by such Morningstar constitutes reasonably equivalent value in
consideration therefor and such transfer was not made for or on account of an
antecedent debt. No transfer by Morningstar of any Receivable hereunder is or
may be voidable under any section of the Bankruptcy Reform Act of 1978 (11
U.S.C. Sections 101 et seq.), as amended.
(s) Enforceability of Contracts. Each Contract, if
any, with respect to each Receivable sold by Morningstar hereunder is effective
to create, and has created, a legal, valid and binding obligation of the related
Obligor to pay the Outstanding Balance of the Receivable created thereunder and
any accrued interest thereon, enforceable against the Obligor in accordance with
its terms, except as such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws relating to or limiting
creditors' rights generally and by general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).
(t) Eligible Receivables. Each Receivable sold by
Morningstar hereunder and included at any time in the Net Receivables Balance as
an Eligible Receivable was, on the later to occur of the date of the Purchase
and the date it came into existence, an Eligible Receivable on such date.
(u) Accounting. The manner in which Morningstar
accounts for the transactions contemplated by this Agreement does not jeopardize
the true sale analysis.
(v) No Adverse Selection. To the extent that
Morningstar has retained Receivables that would be Eligible Receivables but
which have not been transferred to Buyer hereunder, Morningstar has not selected
those Receivables to be transferred hereunder in any manner that materially
adversely affects Buyer.
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AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
ARTICLE III
CONDITIONS OF PURCHASE
Section 3.1 Conditions Precedent to Purchase. The
effectiveness of this Agreement is subject to the conditions precedent that
Buyer shall have received on or before the Closing Date those documents listed
on Schedule A and all of the conditions to the effectiveness of the Purchase
Agreement and the Sale Agreement shall have been satisfied or waived in
accordance with the terms thereof.
Section 3.2 Conditions Precedent to Subsequent Payments.
Buyer's obligation to pay for Receivables coming into existence after the
Initial Cutoff Date shall be subject to the further conditions precedent that
the Facility Termination Date shall not have occurred; (b) Buyer (or its
assigns) shall have received such other approvals, opinions or documents as it
may reasonably request and (c) on the date such Receivable came into existence,
the following statements shall be true (and acceptance of the proceeds by
Morningstar of any payment for such Receivable shall be deemed a representation
and warranty by Morningstar that such statements are then true):
(i) the representations and warranties
of Morningstar set forth in Article II are true and correct on and as
of the date such Receivable came into existence as though made on and
as of such date; and
(ii) no event has occurred and is
continuing that will constitute a Termination Event or a Potential
Termination Event.
Notwithstanding the foregoing conditions precedent, upon payment of the Purchase
Price for any Receivable (whether by payment of cash, through an increase in the
amounts outstanding under the Subordinated Transfer Note, by offset of amounts
owed to Buyer and/or by offset of capital contributions), title to such
Receivable and the Related Security and Collections with respect thereto shall
vest in Buyer, whether or not the conditions precedent to Buyer's obligation to
pay for such Receivable were in fact satisfied. The failure of Morningstar to
satisfy any of the foregoing conditions precedent, however, shall give rise to a
right of Buyer to rescind the related purchase and direct Morningstar to pay to
Buyer an amount equal to the Purchase Price payment that shall have been made
with respect to any Receivables related thereto.
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AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
ARTICLE IV
COVENANTS
Section 4.1 Affirmative Covenants of the Originators. Until
the date on which this Agreement terminates in accordance with its terms,
Morningstar hereby covenants as set forth below:
(a) Financial Reporting. Morningstar will maintain,
for itself and each of its Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish to Buyer (and its assigns) to
the extent not furnished by Dairy Group, L.P. under the Purchase Agreement:
(i) Annual Reporting. Within 90 days
after the close of each of its fiscal years, audited, unqualified
consolidated financial statements (which shall include balance sheets,
statements of income and retained earnings and a statement of cash
flows) for Provider for such fiscal year certified in a manner
acceptable to Buyer by independent public accountants acceptable to
Buyer.
(ii) Quarterly Reporting. Within 45 days
after the close of the first three (3) quarterly periods of each of its
fiscal years, (A) consolidated balance sheets of Provider and its
Subsidiaries as at the close of each such period and (B) consolidated
statements of income and retained earnings and a statement of cash
flows for Provider for the period from the beginning of such fiscal
year to the end of the quarter.
(iii) Compliance Certificate. Together
with the financial statements required hereunder, a compliance
certificate in substantially the form of Exhibit IV signed by
Morningstar's Authorized Officer and dated the date of such annual
financial statement or such quarterly financial statement, as the case
may be.
(iv) Copies of Notices. Promptly upon
its receipt of any notice, request for consent, financial statements,
certification, report or other communication under or in connection
with any Transaction Document from any Person other than Buyer or the
Agent, copies of the same.
(v) Change in Credit and Collection
Policies. At least thirty (30) days prior to the effectiveness of any
material change in or material amendment to Morningstar's Credit and
Collection Policy, a
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AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
copy of such Credit and Collection Policy then in effect and a notice
(A) indicating such change or amendment, and (B) if such proposed
change or amendment would be reasonably likely to adversely affect the
collectibility of the Receivables or decrease the credit quality of any
newly created Receivables, requesting Buyer's consent thereto.
(vi) Other Information. Promptly, from
time to time, such other information, documents, records or reports
relating to the Receivables or the condition or operations, financial
or otherwise, of Morningstar as Buyer (or its assigns) may from time to
time reasonably request in order to protect the interests of Buyer (and
its assigns) under or as contemplated by this Agreement.
(b) Notices. Morningstar will notify Buyer (or its
assigns) in writing of any of the following promptly upon learning of the
occurrence thereof, describing the same and, if applicable, the steps being
taken with respect thereto:
(i) Termination Events or Potential
Termination Events. The occurrence of each Termination Event and each
Potential Termination Event, by a statement of an Authorized Officer of
Morningstar.
(ii) Judgment and Proceedings. The entry
of any judgment or decree against Morningstar or any of its
Subsidiaries if the aggregate amount of all judgments and decrees then
outstanding against Morningstar and its Subsidiaries that could
reasonably be expected to have a Material Adverse Effect, and the
institution of any litigation, arbitration proceeding or governmental
proceeding against Morningstar.
(iii) Material Adverse Effect. The
occurrence of any event or condition that has had, or could reasonably
be expected to have, a Material Adverse Effect.
(iv) Defaults Under Other Agreements.
The occurrence of a default or an event of default under any other
financing arrangement pursuant to which Morningstar is a debtor or an
obligor that could reasonably be expected to have a Material Adverse
Effect.
(c) Compliance with Laws and Preservation of
Corporate Existence. Morningstar will comply in all respects with all applicable
laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject if noncompliance with any such law, rule,
regulation, order, writ, judgment, injunction, decree
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AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
or award could reasonably be expected to have a Material Adverse Effect.
Morningstar will preserve and maintain its corporate existence, rights,
franchises and privileges in the jurisdiction of its incorporation, and qualify
and remain qualified in good standing as a foreign corporation in each
jurisdiction where its business is conducted, except where the failure to so
qualify or remain qualified could not reasonably be expected, either
individually or in the aggregate, to have a Material Adverse Effect.
(d) Audits. Morningstar will furnish to Buyer (or its
assigns) from time to time such information with respect to it and the
Receivables as Buyer (or its assigns) may reasonably request. Morningstar will,
from time to time during regular business hours as requested by Buyer (or its
assigns), upon reasonable notice, permit Buyer (or its assigns) or their
respective agents or representatives, (i) to examine and make copies of and
abstracts from all Records in the possession or under the control of Morningstar
relating to the Receivables and the Related Security, including, without
limitation, the related Writings or Contracts, and (ii) to visit the offices and
properties of Morningstar for the purpose of examining such materials described
in clause (i) above, and to discuss matters relating to Morningstar's financial
condition or the Receivables and the Related Security or Morningstar's
performance under any of the Transaction Documents or Morningstar's performance
under the Contracts and, in each case, with any of the officers or employees of
Morningstar having knowledge of such matters. All such examinations and visits
shall be at the sole cost of Morningstar; provided, however, that (i) for so
long as no Termination Event or Potential Termination Event shall have occurred
and be continuing and (ii) the result of the immediately preceding examination
and/or visit of Morningstar shall have been reasonably satisfactory to Buyer
(and its assigns), such cost shall be borne by Morningstar not more than once
per calendar year (although in no event shall the foregoing be construed to
limit Buyer (or its assigns) to one such examination and/or visit during such
calendar year period), provided that if Buyer (or the Agent as Buyer's assign or
its agents or representatives) fails to make any such examination and/or visit
during any calendar year period, any Financial Institution (as Buyer's assign)
or its agent or representatives may make such examination and/or visit in
Buyer's stead).
(e) Keeping and Marking of Records and Books.
(i) Morningstar 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
immediate identification of each new Receivable and all Collections of
and adjustments to each existing Receivable).
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AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
Morningstar will give Buyer (or its assigns) notice of any material
change in the administrative and operating procedures referred to in
the previous sentence.
(ii) Morningstar will (A) on or prior to
the date hereof, xxxx its master data processing records and other
books and records relating to the Receivables with a legend, acceptable
to Buyer (or its assigns), describing Buyer's ownership interests in
the Receivables, further describing Dairy Group L.P.'s ownership
interests in the Receivables and further describing the Purchaser
Interests of the Agent (on behalf of the Purchasers) under the Purchase
Agreement and (B) upon the request of Buyer (or its assigns) following
the occurrence and during the continuance of a Termination Event
hereunder, a Termination Event under the Sale Agreement or an
Amortization Event under the Purchase Agreement, (x) xxxx each Writing
or Contract with a legend describing Buyer's ownership interests in the
Receivables further describing Dairy Group L.P.'s ownership interests
in the Receivables and further describing the Purchaser Interests of
the Agent (on behalf of the Purchasers) and (y) deliver to Buyer (or
its assigns) all Writings and Contracts (including, without limitation,
all multiple originals of any such Writing or Contract) relating to the
Receivables.
(f) Compliance with Contracts and Credit and
Collection Policies. Morningstar will timely and fully (i) perform and comply
with all provisions, covenants and other promises required to be observed by it
under the Writings or Contracts related to the Receivables and (ii) comply in
all material respects with the Credit and Collection Policy in regard to each
Receivable and the related Writing or Contract.
(g) Ownership. Morningstar will take all necessary
action to establish and maintain, irrevocably in Buyer, (A) legal and equitable
title to the Receivables and the Collections and (B) all of Morningstar's right,
title and interest in the Related Security associated with the Receivables free
and clear of any Adverse Claims other than Adverse Claims in favor of Buyer (and
its assigns) (including, without limitation, the filing of all financing
statements or other similar instruments or documents necessary under the UCC (or
any comparable law) of all appropriate jurisdictions to perfect Buyer's interest
in such Receivables, Related Security and Collections and such other action to
perfect, protect or more fully evidence the interest of Buyer as Buyer (or its
assigns) may reasonably request).
(h) Purchasers' Reliance. Morningstar hereby
acknowledges that the Agent and the Purchasers are entering into the
transactions contemplated by the Purchase Agreement in reliance upon Buyer's
identity as a legal entity that is separate from
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AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
Morningstar and any Affiliates thereof. Therefore, from and after the date of
execution and delivery of this Agreement, Morningstar will take all reasonable
steps including, without limitation, all steps that Buyer or any assignee of
Buyer may from time to time reasonably request to maintain Buyer's identity as a
separate legal entity and to make it manifest to third parties that Buyer is an
entity with assets and liabilities distinct from those of Morningstar and any
Affiliates thereof and not just a division of Morningstar or any such Affiliate.
Without limiting the generality of the foregoing and in addition to the other
covenants set forth herein, Morningstar (i) will not hold itself out to third
parties as liable for the debts of Buyer nor purport to own the Receivables and
other assets acquired by Buyer, (ii) will observe all corporate formalities as a
distinct entity, (iii) will take all other actions necessary on its part to
ensure that Buyer is at all times in compliance with the covenants set forth in
Section 7.1(i) of the Purchase Agreement (other than sub- sections (F), (G) and
(M)) as though each reference to the "Seller" set forth therein were to Buyer
hereunder, (iv) will maintain its Certificate or Articles of Incorporation and
By-laws in conformity with this Agreement, such that it does not amend, restate,
supplement or otherwise modify its Certificate or Articles of Incorporation or
By-Laws in any respect that would impair its ability to comply with the terms or
provisions of any of the Transaction Documents to which it is a party and (v)
will cause all tax liabilities arising in connection with the transactions
contemplated herein or otherwise to be allocated between Morningstar and Buyer
on an arm's- length basis and in a manner consistent with the procedures set
forth in U.S. Treasury Regulations Sections 1.1502-33(d) and 1.1552-1.
(i) Collections. Morningstar will cause (1) all
proceeds from all Lock-Boxes to be directly deposited by a Collection Bank into
a Collection Account and (2) each Lock-Box and Collection Account to be subject
at all times to a Collection Account Agreement that is in full force and effect.
In the event any payments relating to Receivables are remitted directly to
Morningstar or any Affiliate of Morningstar, Morningstar will remit (or will
cause all such payments to be remitted) directly to a Collection Bank and
deposited into a Collection Account within two (2) Business Days following
receipt thereof and, at all times prior to such remittance, Morningstar will
itself hold or, if applicable, will cause such payments to be held in trust for
the exclusive benefit of Buyer and its assigns. Morningstar will transfer
exclusive ownership, dominion and control (including "control" within the
meaning of Section 9-104 of the UCC of all applicable jurisdictions) of each
Lock-Box and Collection Account to Buyer and, will not grant the right to take
dominion and control (including "control" within the meaning of Section 9-104 of
the UCC of all applicable jurisdictions) of any Lock-Box or Collection Account
at a future time or upon the occurrence of a future event to any Person, except
to Buyer (or its assigns) as contemplated by this Agreement and the Purchase
Agreement.
(j) Taxes. Morningstar will file all tax returns and
reports required by law to be filed by it and promptly pay all taxes and
governmental charges at any
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AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
time owing except for taxes not yet due or that are being diligently contested
in good faith by appropriate proceedings and that have been adequately reserved
against in accordance with GAAP. Morningstar will pay when due any taxes payable
in connection with the Receivables, exclusive of taxes on or measured by income
or gross receipts of Buyer and its assigns.
(k) Amendments to Existing Collection Account
Agreements. On or prior to the date that is 45 days after the date hereof,
Morningstar shall deliver to Buyer (and its assigns) duly executed amendments to
each of the Collection Account Agreements executed and delivered in connection
with the Original Transfer Agreement, each such amendment to be in form and
substance reasonably satisfactory to Buyer (and its assigns).
Section 4.2 Negative Covenants. Until the date on which this
Agreement terminates in accordance with its terms, Morningstar hereby covenants
that:
(a) Name Change, Jurisdiction of Organization,
Offices and Books of Account. Morningstar will not change its name, identity or
corporate or other organizational structure or jurisdiction of organization
(within the meaning of Sections 9-503 and/or 9-507 of the UCC of all applicable
jurisdictions) or relocate its chief executive office, principal place of
business or any office where Records are kept unless it shall have: (i) given
Buyer (or its assigns) at least thirty (30) days' prior written notice thereof
and (ii) delivered to Buyer (or its assigns) all financing statements,
instruments and other documents requested by Buyer (or its assigns) in
connection with such change or relocation.
(b) Change in Payment Instructions to Obligors.
Morningstar will not add or terminate any bank as a Collection Bank, or make any
change in the instructions to Obligors regarding payments to be made to any
Lock-Box or Collection Account, unless Buyer (or its assigns) shall have
received, at least ten (10) days before the proposed effective date therefor,
(i) written notice of such addition, termination or change and (ii) with respect
to the addition of a Collection Bank or a Collection Account or Lock-Box, an
executed Collection Account Agreement with respect to the new Collection Account
or Lock-Box; provided, however, that Morningstar may make changes in
instructions to Obligors regarding payments if such new instructions require
such Obligor to make payments to another existing Collection Account.
(c) Modifications to Writings, Contracts and Credit
and Collection Policy. Morningstar will not make any change to its Credit and
Collection Policy that could materially (either individually or in the
aggregate) adversely affect the collectibility of the Receivables or materially
(either individually or in the aggregate) decrease the credit quality of any
newly created Receivables. Except as otherwise permitted in its capacity as
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AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
Servicer pursuant to Article VIII of the Purchase Agreement, Morningstar will
not extend, amend or otherwise modify the terms of any Receivable or the Writing
or Contract related thereto other than in accordance with Morningstar's Credit
and Collection Policy.
(d) Sales, Liens. Morningstar will not sell, assign
(by operation of law or otherwise) or otherwise dispose of, or grant any option
with respect to, or create or suffer to exist any Adverse Claim upon (including,
without limitation, the filing of any financing statement) or with respect to,
any Receivable or any Related Security or Collections, or upon or with respect
to the Writing or Contract under which any Receivable arises, or any Lock-Box or
Collection Account, or assign any right to receive income with respect thereto
(other than, in each case, the creation of the interests therein in favor of
Buyer provided for herein), and Morningstar will defend the right, title and
interest of Buyer in, to and under any of the foregoing property, against all
claims of third parties claiming through or under Morningstar. Morningstar shall
not create or suffer to exist any mortgage, pledge, security interest,
encumbrance, lien, charge or other similar arrangement on any of its inventory
the financing or lease of which gives rise to any Receivable except in favor of
the Collateral Agent in accordance with the Xxxx Credit Agreement.
(e) No Adverse Selection. To the extent that
Morningstar has retained Receivables that would be Eligible Receivables but
which have not been transferred to Buyer hereunder, Morningstar will not select
those Receivables to be transferred hereunder in any manner that materially
adversely affects Buyer.
(f) Accounting for Purchase. Morningstar will not,
and will not permit any Affiliate to, account for (whether in financial
statements or otherwise) the transactions contemplated hereby in any manner
other than the sale of the Receivables and the Related Security to Buyer (other
than for tax purposes) or in any other respect account for or treat the
transactions contemplated hereby in any manner other than as a sale of the
Receivables. and the Related Security to Buyer (other than for tax purposes)
except to the extent that such transactions are not recognized on account of
consolidated financial reporting in accordance with GAAP.
ARTICLE V
TERMINATION EVENTS
Section 5.1 Termination Events. The occurrence of any one or
more of the following events shall constitute a Termination Event:
(a) Morningstar shall fail (i) to make any payment or
deposit of any amount consisting of principal required hereunder when due, or
(ii) to make any payment or deposit of any other amount required hereunder when
due and such failure shall
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AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
continue for two (2) consecutive Business Days or (iii) to perform or observe
any term, covenant or agreement set forth in Section 4.2 hereunder or (iv) to
perform or observe any term, covenant or agreement set forth in Section 4.1(a)
(iv) or (c) (second sentence only) hereunder (other than as referred to in
clauses (i), (ii) or (iii) of this paragraph (a)) or in any other Transaction
Document to which it is a party and such failure shall continue for thirty (30)
consecutive days or (v) to perform or observe any term, covenant or agreement
hereunder (other than as referred to in clauses (i), (ii), (iii) or (iv) of this
paragraph (a) or any other Transaction Document to which it is a party and such
failure shall continue for five (5) consecutive Business Days.
(b) Any representation, warranty, certification or
statement made by Morningstar in this Agreement, any other Transaction Document
to which it is a party or in any other document delivered pursuant hereto or
thereto shall prove to have been incorrect when made or deemed made.
(c) Failure of Morningstar to pay any Indebtedness
when due in excess of $50,000,000; or the default by Morningstar in the
performance of any term, provision or condition contained in any agreement under
which any such Indebtedness was created or is governed, the effect of which is
to cause, or to permit the holder or holders of such Indebtedness to cause, such
Indebtedness to become due prior to its stated maturity; or any such
Indebtedness of Morningstar shall be declared to be due and payable or required
to be prepaid (other than by a regularly scheduled payment) prior to the date of
maturity thereof.
(d) (i) Morningstar shall generally not pay its debts
as such debts become due or shall admit in writing its inability to pay its
debts generally or shall make a general assignment for the benefit of creditors;
or (ii) any proceeding shall be instituted by or against Morningstar seeking to
adjudicate it bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee or other similar official for it or any
substantial part of its property or (iii) Morningstar shall take any corporate
action to authorize any of the actions set forth in the foregoing clauses (i) or
(ii) of this subsection (d).
(e) A Change of Control shall occur with respect to
any Morningstar.
(f) One or more final judgments for the payment of
money in an amount in excess of $50,000,000, individually or in the aggregate,
shall be entered against Morningstar on claims not covered by insurance or as to
which the insurance carrier has
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AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
denied its responsibility, and such judgment shall continue unsatisfied and in
effect for thirty (30) consecutive days without a stay of execution.
Section 5.2 Remedies. Upon the occurrence and during the
continuation of a Termination Event, Buyer may take any of the following
actions: (i) declare the Termination Date to have occurred, whereupon the
Termination Date shall forthwith occur, without demand, protest or further
notice of any kind, all of which are hereby expressly waived by Morningstar;
provided, however, that upon the occurrence of a Termination Event described in
Section 5.1(d), or of an actual or deemed entry of an order for relief with
respect to Morningstar under the Federal Bankruptcy Code, the Termination Date
shall automatically occur, without demand, protest or any notice of any kind,
all of which are hereby expressly waived by Morningstar and (ii) to the fullest
extent permitted by applicable law, declare that the Default Fee shall accrue
with respect to any amounts then due and owing by Morningstar to Buyer. The
aforementioned rights and remedies shall be without limitation and shall be in
addition to all other rights and remedies of Buyer and its assigns otherwise
available under any other provision of this Agreement, by operation of law, at
equity or otherwise, all of which are hereby expressly preserved, including,
without limitation, all rights and remedies provided under the UCC, all of which
rights shall be cumulative.
ARTICLE VI
INDEMNIFICATION
Section 6.1 Indemnities by Morningstar. Without limiting any
other rights that Buyer may have hereunder or under applicable law, Morningstar
hereby agrees to indemnify (and pay upon demand to) Buyer and its assigns (and
their respective Affiliates), officers, directors and employees (each an
"Indemnified Party") from and against any and all damages, losses, claims,
taxes, liabilities, costs, expenses and for all other amounts payable, including
reasonable attorneys' fees (which attorneys may be employees of Buyer or any
such assign) and disbursements (all of the foregoing being collectively referred
to as "Indemnified Amounts") awarded against or incurred by any of them arising
out of or as a result of this Agreement or the acquisition, either directly or
indirectly, by Buyer of an interest in the Receivables or any Contract or
Writing, excluding, however:
(i) Indemnified Amounts to the extent a
final judgment of a court of competent jurisdiction holds that such
Indemnified Amounts resulted from gross negligence or willful
misconduct on the part of the Indemnified Party seeking
indemnification;
(ii) Indemnified Amounts to the extent
the same includes losses in respect of Receivables that are
uncollectible on
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AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
account of the insolvency, bankruptcy or lack of creditworthiness of
the related Obligor; or
(iii) franchise taxes and taxes imposed
by the jurisdiction in which such Indemnified Party's principal
executive office is located, on or measured by the overall net income
of such Indemnified Party to the extent that the computation of such
taxes is consistent with the characterization for income tax purposes
of the acquisition by the Purchasers of Purchaser Interests under the
Purchase Agreement as a loan or loans by the Purchasers to Buyer
secured by, among other things, the Receivables, the Related Security
and the Collections;
provided, however, that nothing contained in this sentence shall limit the
liability of Morningstar or limit the recourse of Buyer to Morningstar for
amounts otherwise specifically provided to be paid by Morningstar under the
terms of this Agreement. Without limiting the generality of the foregoing
indemnification, Morningstar shall indemnify Buyer for Indemnified Amounts
(including, without limitation, losses in respect of uncollectible receivables,
regardless of whether reimbursement therefor would constitute recourse to
Morningstar) relating to or resulting from:
(i) any representation or warranty made
by Morningstar (or any officers of Morningstar) under or in connection
with this Agreement, any other Transaction Document or any other
information or report delivered by Morningstar pursuant hereto or
thereto that shall have been false or incorrect when made or deemed
made;
(ii) the failure by Morningstar to
comply with any applicable law, rule or regulation with respect to any
Receivable or Writing or Contract related thereto, or the nonconformity
of any Receivable or Writing or Contract included therein with any such
applicable law, rule or regulation or any failure of Morningstar to
keep or perform any of its obligations, express or implied, with
respect to any Writing or Contract;
(iii) any failure of Morningstar to
perform its duties, covenants or other obligations in accordance with
the provisions of this Agreement or any other Transaction Document;
(iv) any products liability, personal
injury or damage, suit or other similar claim arising out of or in
connection with merchandise, insurance or services that are the subject
of any Writing or Contract or any Receivable;
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AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
(v) any dispute, claim, offset or
defense (other than discharge in bankruptcy of the Obligor) of the
Obligor to the payment of any Receivable (including, without
limitation, a defense based on such Receivable or the related Writing
or 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 merchandise or service
related to such Receivable or the furnishing or failure to furnish such
merchandise or services;
(vi) the commingling of Collections of
Receivables of Morningstar at any time with other funds;
(vii) any investigation, litigation or
proceeding related to or arising from this Agreement or any other
Transaction Document, the transactions contemplated hereby, the use of
the proceeds of any Purchase Price payment, the ownership of the
Receivables or any other investigation, litigation or proceeding
relating to Morningstar in which any Indemnified Party becomes involved
as a result of any of the transactions contemplated hereby;
(viii) any inability to litigate any
claim against any Obligor in respect of any Receivable as a result of
such Obligor being immune from civil and commercial law and suit on the
grounds of sovereignty or otherwise from any legal action, suit or
proceeding;
(ix) any Termination Event described in
Section 5.1(d);
(x) any failure to vest and maintain
vested in Buyer, or to transfer to Buyer, legal and equitable title to,
and ownership of, the Receivables and the Collections, and all of
Morningstar's right, title and interest in the Related Security
associated with the Receivables, in each case, free and clear of any
Adverse Claim;
(xi) the failure to have filed, or any
delay 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 Receivable and the Related Security
and Collections with respect thereto, and the proceeds of any thereof,
whether at the time of the Purchase or at any subsequent time;
23
AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
(xii) any action or omission by
Morningstar which reduces or impairs the rights of Buyer with respect
to any Receivable or the value of any such Receivable;
(xiii) any attempt by any Person to void
the Purchase hereunder under statutory provisions or common law or
equitable action; and
(xiv) the failure of any Receivable
included in the calculation of the Net Receivables Balance as an
Eligible Receivable to be an Eligible Receivable at the time so
included.
Section 6.2 Other Costs and Expenses. Morningstar shall be
liable for and shall pay on demand, to Buyer all costs and out-of-pocket
expenses in connection with the preparation, execution, delivery and
administration of this Agreement, the transactions contemplated hereby and the
other documents to be delivered hereunder. Morningstar shall pay to Buyer on
demand any and all costs and expenses of Buyer, if any, including reasonable
counsel fees and expenses in connection with the enforcement of this Agreement
against Morningstar and the other documents delivered hereunder and in
connection with any restructuring or workout of this Agreement or such
documents, or the administration of this Agreement following a Termination
Event.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Waivers and Amendments.
(a) No failure or delay on the part of Buyer (or its
assigns) in exercising any power, right or remedy under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or remedy preclude any other further exercise thereof or the
exercise of any other power, right or remedy. The rights and remedies herein
provided shall be cumulative and nonexclusive of any rights or remedies provided
by law. Any waiver of this Agreement shall be effective only in the specific
instance and for the specific purpose for which given.
(b) No provision of this Agreement may be amended,
supplemented, modified or waived except in writing signed by both Morningstar
and Buyer and, to the extent required under the Purchase Agreement, the Agent
and the Purchasers or the Required Purchasers.
24
AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
Section 7.2 Notices. All communications and notices provided
for hereunder shall be in writing (including bank wire, telecopy or electronic
facsimile transmission or similar writing) and shall be given to the other
parties hereto at their respective addresses or telecopy numbers set forth on
Schedule E to the Purchase Agreement or at such other address or telecopy number
as such Person may hereafter specify for the purpose of notice to each of the
other parties hereto. Each such notice or other communication shall be effective
if given by telecopy, upon the receipt thereof, if given by mail, three (3)
Business Days after the time such communication is deposited in the mail with
first class postage prepaid or if given by any other means, when received at the
address specified in this Section 7.2.
Section 7.3 Protection of Ownership Interests of Buyer.
(a) Morningstar agrees that from time to time, at its
expense, it will promptly execute and deliver all instruments and documents, and
take all actions, that may be necessary or desirable, or that Buyer (or its
assigns) may request, to perfect, protect or more fully evidence the interest of
Buyer hereunder and the Purchaser Interests, or to enable Buyer (or its assigns)
to exercise and enforce their rights and remedies hereunder. Without limiting
the foregoing, Morningstar will, upon the request of Buyer (or its assigns),
execute and file such financing or continuation statements, or amendments
thereto or assignments thereof, and such other instruments and documents, that
may be necessary or desirable, or that Buyer (or its assigns) may reasonably
request, to perfect, protect or evidence such interest of Buyer (or such
Purchaser Interests). At any time, Buyer (or its assigns) may, at Morningstar's
sole cost and expense, direct Morningstar to notify the Obligors of Receivables
of the ownership interests of Buyer under this Agreement and may also direct
that payments of all amounts due or that become due under any or all Receivables
be made directly to Buyer or its designee.
(b) If Morningstar fails to perform any of its
obligations hereunder, Buyer (or its assigns) may (but shall not be required to)
perform, or cause performance of, such obligations, and Buyer's (or such
assigns') costs and expenses incurred in connection therewith shall be payable
by Morningstar as provided in Section 6.2. Morningstar irrevocably authorizes
Buyer (and its assigns) at any time and from time to time in the sole discretion
of Buyer (or its assigns), and appoints Buyer (and its assigns) as its
attorney(ies)-in-fact, to act on behalf of Morningstar (i) to execute on behalf
of Morningstar as debtor and to file financing or continuation statements (and
amendments thereto and assignments thereof) necessary or desirable in Buyer's
(or its assigns') sole discretion to perfect and to maintain the
25
AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
perfection and priority of the interest of Buyer in the Receivables and (ii) to
file a carbon, photographic or other reproduction of this Agreement or any
financing statement with respect to the Receivables as a financing statement in
such offices as Buyer (or its assigns) in their sole discretion deem necessary
or desirable to perfect and to maintain the perfection and priority of Buyer's
interests in the Receivables. This appointment is coupled with an interest and
is irrevocable. The authorization set forth in the second sentence of this
Section 7.3(b) is intended to meet all requirements for authorization by a
debtor under Article 9 of any applicable enactment of the UCC, including without
limitation, Section 9-509 thereof.)
Section 7.4 Confidentiality.
(a) Morningstar shall maintain and shall cause each
of its employees and officers to maintain the confidentiality of this Agreement
and the other confidential or proprietary information with respect to the Agent
and each Purchaser and their respective businesses obtained by it or them in
connection with the structuring, negotiating and execution of the transactions
contemplated herein, except that Morningstar and its officers and employees may
disclose such information to Morningstar's external accountants and attorneys
and as required by any applicable law or order of any judicial or administrative
proceeding.
(b) Anything herein to the contrary notwithstanding,
Morningstar hereby consents to the disclosure of any nonpublic information with
respect to it (i) to Buyer, Dairy Group L.P., the Agent, the Financial
Institutions or the Companies by each other, (ii) by Buyer, the Agent or the
Purchasers to any prospective or actual assignee or participant of any of them
and (iii) by the Agent or any Purchaser to any rating agency, Funding Source,
Commercial Paper dealer or provider of a surety, guaranty or credit or liquidity
enhancement to any Company or any entity organized for the purpose of
purchasing, or making loans secured by, financial assets for which Bank One or
CLNY acts as the administrative agent and to any officers, directors, employees,
outside accountants and attorneys of any of the foregoing. In addition, the
Purchasers and the Agent may disclose any such nonpublic information pursuant to
any law, rule, regulation, direction, request or order of any judicial,
administrative or regulatory authority or proceedings (whether or not having the
force or effect of law).
(c) Buyer shall maintain and shall cause each of its
employees and officers to maintain the confidentiality of this Agreement and the
other confidential or proprietary information with respect to Morningstar, the
Obligors and their respective businesses obtained by it in connection with the
due diligence evaluations, structuring, negotiating and execution of the
Transaction Documents, and the consummation of the transactions contemplated
herein and any other activities of Buyer arising from or related to the
transactions contemplated herein provided, however, that each of Buyer and its
employees and officers shall be permitted to disclose such confidential or
proprietary information: (i) to the Agent and the other Purchasers, (ii) to any
prospective or actual assignee or participant of the Agent or the other
Purchasers who execute a confidentiality agreement for
26
AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
the benefit of Morningstar and Buyer on terms comparable to those required of
Buyer hereunder with respect to such disclosed information, (iii) to any rating
agency, Funding Source provider of a surety, guaranty or credit or liquidity
enhancement to any Company, (iv) to any officers, directors, employees, outside
accountants and attorneys of any of the foregoing, and (v) to the extent
required pursuant to any applicable law, rule, regulation, direction, request or
order of any judicial, administrative or regulatory authority or proceedings
with competent jurisdiction (whether or not having the force or effect of law)
so long as such required disclosure is made under seal to the extent permitted
by applicable law or by rule of court or other applicable body.
Section 7.5 Bankruptcy Petition. Morningstar and Buyer each
hereby covenants and agrees that, prior to the date that is one year and one day
after the payment in full of all outstanding senior indebtedness of any Funding
Source that is a special purpose bankruptcy remote entity or of any Company, it
will not institute against, or join any other Person in instituting against, any
such entity or any Company any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding under the laws
of the United States or any state of the United States.
(a) Morningstar hereby covenants and agrees that,
prior to the date that is one year and one day after the payment in full of all
outstanding obligations of Buyer under the Purchase Agreement, it will not
institute against, or join any other Person in instituting against, Buyer any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other similar proceeding under the laws of the United States or any state of
the United States.
Section 7.6 Limitation of Liability. Except with respect to
any claim arising out of the willful misconduct or gross negligence of any
Company, the Agent or any Financial Institution, no claim may be made by
Morningstar or any other Person against any Company, the Agent or any Financial
Institution or their respective Affiliates, directors, officers, employees,
attorneys or agents for any special, indirect, consequential or punitive damages
in respect of any claim for breach of contract or any other theory of liability
arising out of or related to the transactions contemplated by this Agreement, or
any act, omission or event occurring in connection therewith; and Morningstar
hereby waives, releases, and agrees not to xxx upon any claim for any such
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.
Section 7.7 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF
CONFLICTS) OF THE STATE OF
ILLINOIS.
27
AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
Section 7.8 CONSENT TO JURISDICTION. MORNINGSTAR HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR
ILLINOIS STATE COURT SITTING IN CHICAGO,
ILLINOIS IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED
BY MORNINGSTAR PURSUANT TO THIS AGREEMENT AND MORNINGSTAR HEREBY IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
LIMIT THE RIGHT OF BUYER (OR ITS ASSIGNS) TO BRING PROCEEDINGS AGAINST
MORNINGSTAR IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY
MORNINGSTAR AGAINST BUYER (OR ITS ASSIGNS) OR ANY AFFILIATE THEREOF INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY MORNINGSTAR PURSUANT
TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO,
ILLINOIS.
Section 7.9 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT
EXECUTED BY MORNINGSTAR PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP
ESTABLISHED HEREUNDER OR THEREUNDER.
Section 7.10 Integration; Binding Effect; Survival of Terms.
(a) This Agreement and each other Transaction
Document contain the final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and shall
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof superseding all prior oral or written understandings.
(b) This Agreement shall be binding upon and inure to
the benefit of Morningstar and Buyer, and their respective successors and
permitted assigns (including any trustee in bankruptcy). Morningstar may not
assign any of its rights and obligations hereunder or any interest herein
without the prior written consent of Buyer. Buyer may assign at any time its
rights and obligations hereunder and interests herein to any other
28
AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
Person without the consent of Morningstar. Without limiting the foregoing,
Morningstar acknowledges that Buyer, pursuant to the Sale Agreement, may assign
to Dairy Group L.P. its rights, remedies, powers and privileges hereunder and
that such rights, remedies, powers and privileges may be further assigned by
Dairy Group L.P. to the Agent for the benefit of the Purchasers and that the
Agent may further assign such rights, remedies, powers and privileges to the
extent permitted in the Purchase Agreement. Morningstar agrees that the Dairy
Group L.P., as the assignee of Buyer, and the Agent, as the assignee of Dairy
Group L.P. shall, subject to the terms of the Sale Agreement and the Purchase
Agreement, have the right to enforce this Agreement and to exercise directly all
of Buyer's rights and remedies under this Agreement (including, without
limitation, the right to give or withhold any consents or approvals of Buyer to
be given or withheld hereunder) and Morningstar agrees to cooperate fully with
Dairy Group L.P. and the Agent in the exercise of such rights and remedies. 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 terminated in accordance with its terms; provided, however, that the
rights and remedies with respect to (i) any breach of any representation and
warranty made by Morningstar pursuant to Article II; (ii) the indemnification
and payment provisions of Article VI; and (iii) Section 7.5 shall be continuing
and shall survive any termination of this Agreement.
Section 7.11 Counterparts; Severability; Section References.
This Agreement may be executed in any number of counterparts and by different
parties hereto in separate 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. Any provisions of this Agreement which are
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Unless otherwise
expressly indicated, all references herein to "Article," "Section," "Schedule"
or "Exhibit" shall mean articles and sections of, and schedules and exhibits to,
this Agreement.
Section 7.12 Confirmation and Ratification of Terms.
(a) Upon the effectiveness of this Agreement, each
reference to the Original Transfer Agreement in any other Transaction Document,
and any document, instrument or agreement executed and/or delivered in
connection with the Original Transfer Agreement or any other Transaction
Document, shall mean and be a reference to this Agreement.
(b) The other Transaction Documents and all
agreements, instruments and documents executed or delivered in connection with
the Original Transfer
29
AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
Agreement or any other Transaction Document shall each be deemed to be amended
to the extent necessary, if any, to give effect to the provisions of this
Agreement, as the same may be amended, modified, supplemented or restated from
time to time.
(c) The effect of this Agreement is to amend and
restate the Original Transfer Agreement in its entirety, and to the extent that
any rights, benefits or provisions in favor of Buyer (or its assigns) existed in
the Original Transfer Agreement and continue to exist in this Agreement without
any written waiver of any such rights, benefits or provisions prior to the date
hereof, then such rights, benefits or provisions are acknowledged to be and to
continue to be effective from and after June 30, 2000. This Agreement is not a
novation.
(d) The parties hereto agree and acknowledge that any
and all rights, remedies and payment provisions under the Original Transfer
Agreement, including, without limitation, any and all rights, remedies and
payment provisions with respect to (i) any representation and warranty made or
deemed to be made pursuant to the Original Transfer Agreement, or (ii) any
indemnification provision, shall continue and survive the execution and delivery
of this Agreement.
[SIGNATURE PAGE FOLLOWS]
30
AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their duly authorized officers as of
the date hereof.
MORNINGSTAR FOODS INC., as Seller
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
MORNINGSTAR RECEIVABLES CORP.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
EXHIBIT I
Definitions
This is Exhibit I to the Agreement (as hereinafter defined).
As used in the Agreement and the Exhibits, Schedules and Annexes thereto,
capitalized terms have the meanings set forth in this Exhibit I (such meanings
to be equally applicable to the singular and plural forms thereof). If a
capitalized term is used in the Agreement, or any Exhibit, Schedule or Annex
thereto, and not otherwise defined therein or in this Exhibit I, such term shall
have the meaning assigned thereto in Exhibit I to the Purchase Agreement.
"Agent" has the meaning set forth in the Preliminary
Statements to the Agreement.
"Agreement" means the Amended and Restated Receivables
Transfer Agreement, dated as of December 21, 2001, between the Morningstar and
Buyer, as the same may be amended, restated or otherwise modified.
"Buyer" has the meaning set forth in the preamble to the
Agreement.
"Calculation Period" means each calendar month or portion
thereof which elapses during the term of the Agreement. The first Calculation
Period shall commence on the Closing Date and the final Calculation Period shall
terminate on the Termination Date.
"Change of Control" means the acquisition by any Person, or
two or more Persons acting in concert, of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934) of 20% or more of the outstanding shares of
voting stock of Morningstar.
"Credit and Collection Policy" means Morningstar's credit and
collection policies and practices relating to Writings, Contracts and
Receivables existing on the date hereof and summarized in Exhibit V, as modified
from time to time in accordance with the Agreement.
"Default Fee" means a per annum rate of interest equal to the
sum of (i) the Prime Rate, plus (ii) 2% per annum.
"Dilutions" means, at any time, the aggregate amount of
reductions or cancellations described in Section 1.3(a) of the Agreement.
Exh. I-1
AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
"Discount Factor" means a percentage calculated to provide
Buyer with a reasonable return on its investment in the Receivables after taking
account of (i) the time value of money based upon the anticipated dates of
collection of the Receivables and the cost to Buyer of financing its investment
in the Receivables during such period and (ii) the risk of nonpayment by the
Obligors. Morningstar and Buyer may agree from time to time to change the
Discount Factor based on changes in one or more of the items affecting the
calculation thereof, provided that any change to the Discount Factor shall take
effect as of the commencement of a Calculation Period, shall apply only
prospectively and shall not affect the Purchase Price payment made prior to the
Calculation Period during which Morningstar and Buyer agree to make such change.
"Initial Cutoff Date" has the meaning set forth in Section
1.2(a).
"Material Adverse Effect" means a material adverse effect on
(i) the financial condition or operations of Morningstar and its Subsidiaries
taken as a whole, (ii) the ability of Morningstar to perform its obligations
under the Agreement or any other Transaction Document, (iii) the legality,
validity or enforceability of the Agreement or any other Transaction Document,
(iv) Morningstar's, Buyer's, Dairy Group L.P.'s, the Agent's or any Purchaser's
interest in the Receivables generally or in any significant portion of the
Receivables, the Related Security or Collections with respect thereto, or (v)
the collectibility of the Receivables generally or of any material portion of
the Receivables.
"Morningstar" has the meaning set forth in the preamble.
"Net Value" means, as of any date of determination, an amount
equal to the sum of (i) the aggregate Outstanding Balance of the Receivables at
such time, minus (ii) the sum of (A) the Aggregate Capital outstanding at such
time, plus (B) the Aggregate Reserves.
"Net Worth" means, with respect to as of the last Business Day
of each Calculation Period preceding any date of determination, the excess, if
any, of (a) the aggregate Outstanding Balance of the Receivables at such time,
over (b) the sum of (i) the Aggregate Capital outstanding at such time, plus
(ii) the aggregate outstanding principal balance of the Subordinated Transfer
Loans (including any Subordinated Transfer Loan proposed to be made on the date
of determination).
"Original Balance" means, with respect to any Receivable
coming into existence after the Initial Cutoff Date, the Outstanding Balance of
such Receivable on the date it was created.
"Original Transfer Agreement" has the meaning set forth in the
Preliminary Statements to the Agreement.
Exh. I-2
"Originator" has the meaning set forth in the Sale Agreement.
"Potential Termination Event" means an event which, with the
passage of time or the giving of notice, or both, would constitute a Termination
Event.
"Previously Sold Receivables" has the meaning set forth in the
Preliminary Statements to the Agreement.
"Purchase" means the purchase pursuant to Section 1.1(a) of
the Agreement by Buyer from Morningstar of the Receivables and the Related
Security and Collections related thereto, together with all related rights in
connection therewith.
"Purchase Agreement" has the meaning set forth in the
Preliminary Statements to the Agreement.
"Purchase Price" means, with respect to the Purchase from
Morningstar hereunder, the aggregate price to be paid by Buyer to Morningstar
for such Purchase in accordance with Section 1.2 of the Agreement for the
Receivables, Collections and Related Security being sold to Buyer, which price
shall equal on any date (i) the product of (x) the Outstanding Balance of such
Receivables on such date, multiplied by (y) one minus the Discount Factor in
effect on such date, minus (ii) any Purchase Price Credits to be credited
against the Purchase Price otherwise payable to Morningstar in accordance with
Section 1.3 of the Agreement.
"Purchase Price Credit" has the meaning set forth in Section
1.3 of the Agreement.
"Receivable" means all indebtedness and other obligations owed
to Morningstar (at the times it arises, and before giving effect to any transfer
or conveyance under the Agreement ) or Buyer (after giving effect to the
transfers under the Agreement) or in which Morningstar or Buyer has a security
interest or other interest, including, without limitation, any indebtedness,
obligation or interest constituting an account, chattel paper, instrument or
general intangible, arising in connection with the sale of goods or the
rendering of services by Morningstar, and further includes, without limitation,
the obligation to pay any Finance Charges with respect thereto. Indebtedness and
other rights and obligations arising from any one transaction, including,
without limitation, indebtedness and other rights and obligations represented by
an individual invoice, shall constitute a Receivable separate from a Receivable
consisting of the indebtedness and other rights and obligations arising from any
other transaction; provided, further, that any indebtedness, rights or
obligations referred to in the immediately preceding sentence shall be a
Receivable regardless or
Exh. I-3
AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
whether the account debtor or Morningstar treats such indebtedness, rights or
obligations as a separate payment obligation.
"Related Security" means, with respect to any Receivable:
(i) all of Morningstar's interest in the
inventory and goods (including returned or repossessed inventory or
goods), if any, the sale, financing or lease of which by Morningstar,
as applicable, gave rise to such Receivable, and all insurance
contracts with respect thereto,
(ii) all other security interests or
liens and property subject thereto from time to time, if any,
purporting to secure payment of such Receivable, whether pursuant to
the Writing or Contract related to such Receivable or otherwise,
together with all financing statements and security agreements
describing any collateral securing such Receivable,
(iii) all guaranties, letters of credit,
insurance, "supporting obligations" (within the meaning of Section
9-102(a) of the UCC of all applicable jurisdictions) and other
agreements or arrangements of whatever character from time to time
supporting or securing payment of such Receivable whether pursuant to
the Writing or Contract related to such Receivable or otherwise,
(iv) all service contracts and other
contracts and agreements associated with such Receivable,
(v) all Records related to such
Receivable,
(vi) all of Morningstar's right, title
and interest in each Lock-Box and each Collection Account, and
(vii) all proceeds of any of the
foregoing.
"Required Capital Amount" means, as of any date of
determination, the greater of (a) an amount equal to the sum of (i) the
twenty-four month rolling average of Dilutions, plus (ii) the result obtained in
the foregoing clause (i) of this definition, multiplied by 10% and
(b)$4,500,000.
Exh. I-4
AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
"Sale Agreement" has the meaning set forth in the Preliminary
Statements to the Agreement.
"Settlement Date" means, with respect to each Calculation
Period, the date that is the 5th Business Day of the month following such
Calculation Period.
"Subordinated Transfer Loan" has the meaning set forth in
Section 1.2(a) of the Agreement.
"Subordinated Transfer Note" means a promissory note in
substantially the form of Exhibit VII hereto as more fully described in Section
1.2 of the Agreement, as the same may be amended, restated, supplemented or
otherwise modified from time to time.
"Termination Date" means the earliest to occur of (i) the
Facility Termination Date, (ii) the Business Day immediately prior to the
occurrence of a Termination Event set forth in Section 5.1(d), (iii) the
Business Day specified in a written notice from Buyer to Morningstar following
the occurrence of any other Termination Event, and (iv) the date which is 15
Business Days after Buyer's receipt of written notice from Morningstar that it
wishes to terminate the facility evidenced by the Agreement.
"Termination Event" has the meaning set forth in Section 5.1
of the Agreement.
"Transaction Documents" means, collectively, this Agreement,
the Sale Agreement, each Collection Account Agreement, the Subordinated Transfer
Notes and all other instruments, documents and agreements executed and delivered
in connection herewith.
All accounting terms not specifically defined herein shall be
construed in accordance with GAAP. All terms used in Article 9 of the UCC in the
State of
Illinois, and not specifically defined herein, are used herein as
defined in such Article 9.
Exh. I-5
AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
EXHIBIT II
PLACES OF BUSINESS OF THE SELLER PARTIES;
LOCATIONS OF RECORDS;
FEDERAL EMPLOYER IDENTIFICATION NUMBER(S)
See Exhibit III to the Purchase Agreement
AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
EXHIBIT III
NAME OF COLLECTION BANKS; COLLECTION ACCOUNTS
See Exhibit IV to the Purchase Agreement
AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
EXHIBIT IV
Form of Compliance Certificate
This Compliance Certificate is furnished pursuant to that
certain Amended and Restated Receivables Transfer Agreement dated as of December
21, 2001, by and between MORNINGSTAR Foods Inc., a Delaware corporation
("Morningstar") and MORNINGSTAR RECEIVABLES CORP., a Delaware corporation
("Buyer") (the "Agreement"). Capitalized terms used and not otherwise defined
herein are used with the meanings attributed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected ______________ of Morningstar.
2. I have reviewed the terms of the Agreement and I have made,
or have caused to be made under my supervision, a detailed review of the
transactions and conditions of Morningstar and its Subsidiaries during the
accounting period covered by the attached financial statements.
3. The examinations described in paragraph 2 did not disclose,
and I have no knowledge of, the existence of any condition or event which
constitutes a Termination Event or a Potential Termination Event, as each such
term is defined under the Agreement, during or at the end of the accounting
period covered by the attached financial statements or as of the date of this
Certificate, except as set forth below.
4. Described below are the exceptions, if any, to paragraph 3
by listing, in detail, the nature of the condition or event, the period during
which it has existed and the action that Morningstar has taken, is taking, or
proposes to take with respect to each such condition or event:
5. As of the date hereof, the jurisdiction of Morningstar is
[_______] and Morningstar is a "registered organization" (within the meaning of
Section 9-102 of the UCC in effect in such applicable jurisdiction) and
Morningstar has not changed its jurisdiction of organization since the date of
the Agreement.
The foregoing certifications, together with the computations
set forth in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this day of , 20__.
By:
------------------------------
[Name]
AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
EXHIBIT V
Credit and Collection Policies
See Exhibit V to Receivables Sale Agreement.
AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
EXHIBIT VI
[Intentionally omitted.]
AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
EXHIBIT VII
Form of Subordinated Transfer Note
SUBORDINATED TRANSFER NOTE
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1. Note. FOR VALUE RECEIVED, the undersigned, Morningstar
Receivables Corp., a Delaware corporation ("Buyer"), hereby unconditionally
promises to pay to the order of Morningstar Foods Inc., a Delaware corporation
("Morningstar") in lawful money of the United States of America and in
immediately available funds, on the date following the Termination Date which is
one year and one day after the date on which (i) the Outstanding Balance of all
Receivables sold under the "Transfer Agreement" referred to below has been
reduced to zero and (ii) Morningstar has paid to Buyer all indemnities,
adjustments and other amounts which may be owed thereunder in connection with
the Purchases (the "Collection Date"), the aggregate unpaid principal sum
outstanding of all "Subordinated Transfer Loans" made from time to time by
Morningstar to Buyer pursuant to and in accordance with the terms of that
certain Amended and Restated Receivables Transfer Agreement dated as of December
21, 2001, by and between Morningstar and Buyer (as amended, restated,
supplemented or otherwise modified from time to time, the "Transfer Agreement").
Reference to Section 1.2 of the Transfer Agreement is hereby made for a
statement of the terms and conditions under which the loans evidenced hereby
have been and will be made. All terms which are capitalized and used herein and
which are not otherwise specifically defined herein shall have the meanings
ascribed to such terms in the Sale Agreement.
2. Interest. Buyer further promises to pay interest on the
outstanding unpaid principal amount hereof from the date hereof until payment in
full hereof at a rate equal to the Prime Rate; provided, however, that if Buyer
shall default in the payment of any principal hereof, Buyer promises to pay, on
demand, interest at the rate of the Prime Rate plus 2.00% per annum on any such
unpaid amounts, from the date such payment is due to the date of actual payment.
Interest shall be payable on the first Business Day of each month in arrears;
provided, however, that Buyer may elect on the date any interest payment is due
hereunder to defer such payment and upon such election the amount of interest
due but unpaid on such date shall constitute principal under this Subordinated
Transfer Note. The outstanding principal of any loan made under this
Subordinated Transfer Note shall be due and payable on the Collection Date and
may be repaid or prepaid at any time without premium or penalty.
3. Principal Payments. Morningstar is authorized and directed
by SPV to enter on the grid attached hereto, or, at its option, in its books and
records, the date and amount of
Exh. VII-1
AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
each loan made by it which is evidenced by this Subordinated Transfer Note and
the amount of each payment of principal made by Buyer, and absent manifest
error, such entries shall constitute prima facie evidence of the accuracy of the
information so entered; provided that neither the failure of ningstar to make
any such entry or any error therein shall expand, limit or affect the
obligations of Buyer hereunder.
4. Subordination. Morningstar shall have the right to receive,
and Buyer shall make, any and all payments relating to the loans made under this
Subordinated Transfer Note provided that, after giving effect to any such
payment, the aggregate Outstanding Balance of Receivables (as each such term is
defined in the Purchase Agreement hereinafter referred to) owned by Buyer at
such time exceeds the sum of (a) the Aggregate Unpaids (as defined in the
Purchase Agreement) outstanding at such time under the Purchase Agreement, plus
(b) the aggregate outstanding principal balance of all loans made under this
Subordinated Transfer Note. Morningstar hereby agrees that at any time during
which the conditions set forth in the proviso of the immediately preceding
sentence shall not be satisfied, Morningstar shall be subordinate in right of
payment to the prior payment of any indebtedness or obligation of Buyer owing to
the Dairy Group Receivables L.P. ("Dairy Group L.P.") and its assigns. The
subordination provisions contained herein are for the direct benefit of, and may
be enforced by, Dairy Group L.P., the Agent or any Purchasers and/or any of
their respective assignees (collectively, the "Senior Claimants") under that
certain Amended and Restated Receivables Purchase Agreement dated as of December
21, 2001, by and among Dairy Group L.P., the Servicers (as defined therein)
various "Purchasers" from time to time party thereto, and Bank One, NA (Main
Office Chicago), as the "Agent" (as amended, restated, supplemented or otherwise
modified from time to time, the "Purchase Agreement"). Until the date on which
all "Capital" outstanding under the Purchase Agreement has been repaid in full
and all other obligations of Buyer, Dairy Group L.P. and/or the Servicers
thereunder and under the "Fee Letters" referenced therein (all such obligations,
collectively, the "Senior Claim") have been indefeasibly paid and satisfied in
full, Morningstar shall not institute against Buyer any proceeding of the type
described in Section 5.1(d) of the Transfer Agreement unless and until the
Collection Date has occurred. Should any payment, distribution or security or
proceeds thereof be received by Morningstar in violation of this Section 4,
Morningstar agrees that such payment shall be segregated, received and held in
trust for the benefit of, and deemed to be the property of, and shall be
immediately paid over and delivered to the Agent for the benefit the Senior
Claimants.
5. Bankruptcy; Insolvency. Upon the occurrence of any
proceeding of the type described in Section 5.1(d) of the Transfer Agreement
involving Buyer as debtor, then and in any such event the Senior Claimants shall
receive payment in full of all amounts due or to become due on or in respect of
the Aggregate Capital and the Senior Claim (including "CP Costs" and "Yield" as
defined and as accruing under the Purchase Agreement after the commencement of
any such proceeding, whether or not any or all of such CP Costs or Yield is an
allowable claim in any such proceeding) before Morningstar is entitled to
receive payment on account of this
Exh. VII-2
AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
Subordinated Transfer Note, and to that end, any payment or distribution of
assets of Buyer of any kind or character, whether in cash, securities or other
property, in any applicable insolvency proceeding, which would otherwise be
payable to or deliverable upon or with respect to any or all indebtedness under
this Subordinated Transfer Note, is hereby assigned to and shall be paid or
delivered by the Person making such payment or delivery (whether a trustee in
bankruptcy, a receiver, custodian or liquidating trustee or otherwise) directly
to the Agent for application to, or as collateral for the payment of, the Senior
Claim until such Senior Claim shall have been paid in full and satisfied.
6. Amendments. This Subordinated Transfer Note shall not be
amended or modified except in accordance with Section 7.1 of the Transfer
Agreement. The terms of this Subordinated Transfer Note may not be amended or
otherwise modified without the prior written consent of the Agent for the
benefit of the Purchasers.
7. GOVERNING LAW. THIS SUBORDINATED TRANSFER NOTE HAS BEEN
MADE AND DELIVERED AT CHICAGO,
ILLINOIS, AND SHALL BE INTERPRETED AND THE RIGHTS
AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS AND
DECISIONS OF THE STATE OF
ILLINOIS. WHEREVER POSSIBLE EACH PROVISION OF THIS
SUBORDINATED TRANSFER NOTE SHALL BE INTERPRETED IN SUCH MANNER AS TO BE
EFFECTIVE AND VALID UNDER APPLICABLE LAW, BUT IF ANY PROVISION OF THIS
SUBORDINATED NOTE SHALL BE PROHIBITED BY OR INVALID UNDER APPLICABLE LAW, SUCH
PROVISION SHALL BE INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY,
WITHOUT INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS
OF THIS SUBORDINATED TRANSFER NOTE.
8. Waivers. All parties hereto, whether as makers, endorsers,
or otherwise, severally waive presentment for payment, demand, protest and
notice of dishonor. Morningstar additionally expressly waives all notice of the
acceptance by any Senior Claimant of the subordination and other provisions of
this Subordinated Transfer Note and expressly waives reliance by any Senior
Claimant upon the subordination and other provisions herein provided.
9. Assignment. This Subordinated Transfer Note may not be
assigned, pledged or otherwise transferred to any party other than Morningstar
without the prior written consent of the Agent, and any such attempted transfer
shall be void.
[SIGNATURE PAGE FOLLOWS]
Exh. VII-3
AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
MORNINGSTAR RECEIVABLES CORP.
By:
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Title:
Exh. VII-4
AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
Schedule
to
SUBORDINATED TRANSFER NOTE
SUBORDINATED TRANSFER LOANS AND PAYMENTS OF PRINCIPAL
Amount of Amount of Unpaid
Subordinated Principal Principal Notation made
Date Loan Paid Balance by
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Exh. VII-5
AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT
SCHEDULE A
DOCUMENTS TO BE DELIVERED TO BUYER
ON OR PRIOR TO THE PURCHASE
SEE PART I OF SCHEDULE B TO THE PURCHASE AGREEMENT.
