THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT Dated as of September 4, 2007 By and Among LOL SPV, LLC As Seller, LAND O’LAKES, INC. As initial Servicer, COBANK, ACB, AND THE OTHER PURCHASERS FROM TIME TO TIME PARTY HERETO And COBANK, ACB,...
EXHIBIT
10.4
EXECUTION VERSION
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
RECEIVABLES PURCHASE AGREEMENT
Dated as of September 4, 2007
By and Among
LOL SPV, LLC
As Seller,
As Seller,
LAND O’LAKES, INC.
As initial Servicer,
As initial Servicer,
COBANK, ACB, AND THE OTHER
PURCHASERS FROM TIME TO TIME
PARTY HERETO
PURCHASERS FROM TIME TO TIME
PARTY HERETO
And
COBANK, ACB,
As Administrator
As Administrator
TABLE OF CONTENTS
Page | ||||
ARTICLE 1. PURCHASES AND REINVESTMENTS |
2 | |||
Section 1.1. Agreement to Purchase; Limits on Purchasers’ Obligations |
2 | |||
Section 1.2. Purchase Procedures; Assignment of Purchasers’ Interests |
2 | |||
Section 1.3. Reinvestments of Certain Collections; Payment of Remaining
Collections |
2 | |||
Section 1.4. Receivable Interest |
4 | |||
Section 1.5. Voluntary Termination or Reduction of Facility Limit |
4 | |||
Section 1.6. Facility Limit Increases |
4 | |||
ARTICLE 2. COMPUTATIONAL RULES |
6 | |||
Section 2.1. Computation of Capital |
6 | |||
Section 2.2. Computation of Concentration Limit |
6 | |||
Section 2.3. Computation of Earned Discount |
6 | |||
Section 2.4. Estimates of Earned Discount Rate, Fees, Etc |
7 | |||
ARTICLE 3. SETTLEMENTS |
7 | |||
Section 3.1. Purchase and Settlement Procedures |
7 | |||
Section 3.2. Deemed Collections; Reduction of Capital, Etc |
9 | |||
Section 3.3. Payments and Computations, Etc |
10 | |||
ARTICLE 4. FEES AND YIELD PROTECTION |
11 | |||
Section 4.1. Fees |
11 | |||
Section 4.2. Yield Protection |
11 | |||
Section 4.3. Funding Losses |
13 | |||
Section 4.4. Prepayments |
13 | |||
ARTICLE 5. CONDITIONS TO PURCHASES |
13 | |||
Section 5.1. Conditions Precedent to Initial Purchase and Effectiveness |
13 | |||
Section 5.2. Conditions Precedent to All Purchases and Reinvestments |
15 | |||
ARTICLE 6. REPRESENTATIONS AND WARRANTIES |
15 | |||
Section 6.1. Representations and Warranties of Seller |
15 | |||
Section 6.2. Representations and Warranties of Servicer |
18 | |||
ARTICLE 7. GENERAL COVENANTS |
19 | |||
Section 7.1. Affirmative Covenants |
19 |
Page | ||||
Section 7.2. Reporting Requirements |
22 | |||
Section 7.3. Negative Covenants |
23 | |||
Section 7.4. Separate Existence |
25 | |||
ARTICLE 8. ADMINISTRATION AND COLLECTION |
28 | |||
Section 8.1. Designation of Servicer and Sub-Servicers |
28 | |||
Section 8.2. Duties of Servicer |
29 | |||
Section 8.3. Rights of Administrator |
30 | |||
Section 8.4. Responsibilities of Seller |
31 | |||
Section 8.5. Further Action Evidencing Purchases and Reinvestments |
32 | |||
Section 8.6. Application of Collections |
33 | |||
ARTICLE 9. SECURITY INTEREST |
33 | |||
Section 9.1. Grant of Security Interest |
33 | |||
Section 9.2. Further Assurances |
33 | |||
Section 9.3. Remedies |
33 | |||
ARTICLE 10. TERMINATION EVENTS |
33 | |||
Section 10.1. Termination Events |
33 | |||
Section 10.2. Remedies |
36 | |||
ARTICLE 11. THE ADMINISTRATOR |
36 | |||
Section 11.1. Authorization |
36 | |||
Section 11.2. Administrator’s Reliance, Etc |
37 | |||
Section 11.3. CoBank and Affiliates |
37 | |||
ARTICLE 12. ASSIGNMENT OF AND PARTICIPATIONS IN PURCHASERS’ INTERESTS |
37 | |||
Section 12.1. Restrictions on Assignments; Impact on Patronage |
37 | |||
Section 12.2. Rights of Assignee |
38 | |||
Section 12.3. Participations |
38 | |||
ARTICLE 13. INDEMNIFICATION |
39 | |||
Section 13.1. Indemnities |
39 | |||
ARTICLE 14. MISCELLANEOUS |
41 | |||
Section 14.1. Amendments, Etc |
41 | |||
Section 14.2. Notices, Etc |
41 | |||
Section 14.3. No Waiver; Remedies |
42 |
Page | ||||||
Section 14.4. Binding Effect; Survival | 42 | |||||
Section 14.5. Costs, Expenses and Taxes | 42 | |||||
Section 14.6. No Proceedings | 43 | |||||
Section 14.7. Confidentiality of Program Information | 43 | |||||
Section 14.8. Confidentiality of Originator Information | 44 | |||||
Section 14.9. Captions and Cross References | 45 | |||||
Section 14.10. Integration | 46 | |||||
Section 14.11. Governing Law | 46 | |||||
Section 14.12. Waiver Of Jury Trial | 46 | |||||
Section 14.13. Consent To Jurisdiction; Waiver Of Immunities | 46 | |||||
Section 14.14. Execution in Counterparts | 47 | |||||
Section 14.15. No Recourse Against Other Parties | 47 | |||||
Section 14.16. Amendment and Restatement | 00 |
XXXXXXXX | ||||||
XXXXXXXX A
|
Definitions | |||||
Schedule I
|
Government Receivables (if any) | |||||
Schedule II
|
Contract Standards (if any) |
SCHEDULES | ||||||
Schedule 1
|
Purchasers and Pro Rata Shares | |||||
Schedule 6.1(m)
|
List of Offices of Seller where Records Are Kept | |||||
Schedule 6.1(n)
|
List of Lockbox Banks | |||||
Schedule 7.1(g)
|
Initial Credit and Collection Policies | |||||
Schedule 12.3(b)
|
Participants | |||||
Schedule 14.2
|
Notice Addresses |
EXHIBITS | ||||||
Exhibit 1.2(a)
|
Form of Purchase Notice | |||||
Exhibit 1.6(b)
|
Form of Purchase Increase Supplement | |||||
Exhibit 1.6(c)
|
Form of New Purchaser Supplement | |||||
Exhibit 3.1(a)-l
|
Form of Servicer Report | |||||
Exhibit 5.1(f)
|
Form of Lockbox Agreement | |||||
Exhibit 7.2(a)
|
Form of Monthly Report | |||||
Exhibit 7.4
|
Additional Corporate Separateness Assumptions, Statements and Representations |
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
RECEIVABLES PURCHASE AGREEMENT
Dated as of September 4, 2007
PREAMBLE
THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT, dated as of September 4, 2007,
(this “Agreement”), by and among LOL SPV, LLC, a Delaware limited liability company, as Seller
(“Seller”), LAND O’LAKES, INC., a Minnesota cooperative corporation (“LOL”), as initial Servicer
(“Servicer”), COBANK, ACB, a federally chartered instrumentality of the United States (“CoBank”),
and any other Persons that may, from time to time, be party hereto as Purchasers (each, a
“Purchaser”), and CoBank as administrator for the Purchasers (in such capacity, “Administrator”).
Unless otherwise indicated, capitalized terms used in this Agreement are defined in, and
interpretive rules that apply are contained in, Appendix A.
RECITALS
1. Seller is a limited-purpose, bankruptcy-remote Delaware limited liability company formed by
Land O’Lakes Purina Feed LLC (“Feed”), for the purpose of purchasing, and accepting contributions
of, Receivables and Related Rights (as defined in the Purchase and Sale Agreement) originated by
Feed and the other Originators in the ordinary course of their respective businesses. Feed owns
one hundred percent (100%) of the outstanding equity of Seller.
2. Seller, LOL, as “Servicer”, CoBank, in its capacity as administrator, and the various other
purchasers from time to time party thereto, are parties to the Second Amended and Restated
Receivables Purchase Agreement dated as of September 7, 2006 (as heretofore amended, supplemented
or otherwise modified, the “Existing Receivables Purchase Agreement”).
3. The parties hereto desire to amend and restate the Existing Receivables Purchase Agreement
on the terms and conditions set forth herein.
4. Seller has, and expects to have, Pool Receivables in which Seller intends to sell an
undivided interest. Seller has requested that the Purchasers, and each Purchaser has agreed that it
shall, subject to and upon the terms and conditions contained in this Agreement, engage in
purchases of their respective Pro Rata Shares of such undivided interest, referred to herein as the
Receivable Interest, from Seller from time to time during the term of this Agreement.
5. Seller and the Purchasers also desire that, subject to the terms and conditions of this
Agreement, certain of the daily Collections in respect of the Receivable
Interest be reinvested in Pool Receivables, which reinvestment shall constitute part of the
Receivable Interest.
6. LOL has been requested, and is willing, to act as initial Servicer.
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7. CoBank has been requested, and is willing, to act as Administrator.
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained,
the parties hereto agree as follows:
ARTICLE I. PURCHASES AND REINVESTMENTS
SECTION 1.1. Agreement to Purchase; Limits on Purchasers’ Obligations. Subject to and upon the
terms and conditions of this Agreement, from time to time prior to the Termination Date, (a) Seller
may request that each Purchaser, ratably in accordance with such Purchaser’s Pro Rata Share,
purchase from Seller an undivided ownership interest in the Pool Assets specified in each
applicable Purchase Notice and (b) each Purchaser severally agrees to purchase its respective Pro
Rata Share of such undivided ownership interest in the Pool Assets (each being a “Purchase”);
provided that no Purchase shall be funded by the Purchasers if, after giving effect thereto, either
(y) the then Capital would exceed an amount equal to $300,000,000, as such amount may be decreased
from time to time as provided in Section 1.5 or increased from time to time pursuant to Section 1.6
(the “Facility Limit”), or (z) the Receivable Interest would exceed 100% (the “Allocation Limit”);
and provided further that each Purchase made pursuant to this Section 1.1 shall require a funding
of Capital of at least $1,000,000.
SECTION 1.2. Purchase Procedures; Assignment of Purchasers’ Interests.
(a) Notice of Purchase. Each Purchase from Seller shall be made by the Purchasers upon notice
from Seller to the Administrator received by the Administrator not later than 2:00 P.M. (Denver,
Colorado time) on the Business Day next preceding the Business Day of such proposed Purchase (the
“Purchase Date”). Each such notice of a proposed Purchase shall be substantially in the form of
Exhibit 1.2(a) (each a “Purchase Notice”), and shall specify the desired amount of, and Purchase
Date for, such Purchase; provided, that Seller may give only one (1) Purchase Notice during any
7-day period, and such Purchase Notice must specify a Purchase amount of at least $1,000,000, or an
integral multiple of $100,000 in excess thereof.
(b) Funding of Purchases. On each Purchase Date, each Purchaser shall, upon satisfaction of
the applicable conditions set forth in Article V, fund such Purchase by making the full amount of
its Pro Rata Share of such Purchase available to Administrator at Administrator’s Office in
immediately available funds, and after receipt by Administrator of such funds, Administrator will
make such funds immediately available to Seller at such office.
(c) Sale of Receivable Interest. In consideration of the Capital funded by each Purchaser on
each Purchase Date, Seller hereby sells, assigns and transfers to Administrator, for the ratable
benefit of the Purchasers, the Receivable Interest.
SECTION 1.3. Reinvestments of Certain Collections; Payment of Remaining
Collections.
(a) On the close of business on each Business Day during the period from the date hereof until
the Termination Date, Servicer shall, out of all Collections received on such day:
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(i) determine the portion of Collections attributable on such day to the Receivable Interest
by multiplying (A) the amount of all Collections received on such day, times (B) the Receivable
Interest;
(ii) out of the portion of Collections allocated to the Receivable Interest pursuant to clause
(a)(i), (A) if a Termination Event shall have occurred and be continuing, set aside and deposit
into the Administrator’s Account in trust for the Purchasers or (B) in all other cases, otherwise
provide that the Servicer will have available to it on the next Settlement Date or as required by
Section 3.1(e), an amount equal to the sum of the estimated amount of Yield accrued and unpaid in
respect of the Capital (based on rate information provided by the Administrator pursuant to Section
2.4), the accrued Fees, all other amounts due to the Purchasers, Administrator, the Affected
Parties or the Indemnified Parties hereunder (other than the Capital) and the Purchasers’ Share of
the Servicer’s Fee (in each case, accrued through such day) and not so previously set aside and
deposited into the Administrator’s Account or its availability on the next Settlement Date provided
for (it being understood that for so long as no Termination Event is then continuing, Seller may
utilize funds to pay down notes owing to the Originators or invest funds with Land O’Lakes, Inc.);
(iii) apply the Collections allocated to the Receivable Interest pursuant to clause (a)(i),
and not set aside for its availability provided for pursuant to clause (ii), to the purchase from
Seller of ownership interests in Pool Assets (each such purchase being a “Reinvestment”); provided
that (A) if the Excess Amount exceeds zero, then Servicer shall not reinvest, but shall set aside
and deposit into the Administrator’s Account for the benefit of the Purchasers, a portion of such
Collections which, together with other Collections previously set aside and then so held, shall
equal the Excess Amount; and (B) if the conditions precedent to Reinvestment in Section 5.2 are not
satisfied, then Servicer shall not reinvest any of such Collections;
(iv) pay to Seller (A) the portion of Collections not allocated to the Receivable Interest
pursuant to clause (i), less the Seller’s Share of the Servicer’s Fee, (B) the amounts, if any, to
be made available to the Servicer on the next Settlement Date pursuant to clause (ii)(B) and (C)
the Collections applied to Reinvestment pursuant to clause (iii); and
(v) out of the portion of Collections not allocated to the Receivable Interest pursuant to
clause (i), pay to the Servicer the Seller’s Share of the Servicer’s Fee accrued through such day.
(b) Unreinvested and Undistributed Collections. Servicer shall set aside and deposit into the
Administrator’s Account in trust for the benefit of the Purchasers all Collections allocated to the
Receivables Interest which pursuant to clause (iii) of Section
1.3(a) may not be reinvested in Pool Assets. If, prior to the date when such Collections are
required to be paid to the Administrator pursuant to Section 3.1, the amount of Collections set
aside pursuant to clause (iii) of Section 1.3(a) exceeds the Excess Amount, if any, and the
conditions precedent to Reinvestment set forth in Section 5.2 are satisfied, then the Servicer
shall apply such Collections (or, if less, a portion of such Collections equal to the amount of
such excess) to the making of a
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Reinvestment. Seller may, in its sole discretion, at any time, sell or transfer Receivables it
identifies and determines to so sell or transfer for a sale or transfer price not less than the
fair market value of such Receivables at such time.
SECTION 1.4. Receivable Interest.
(a) Components of Receivable Interest. On any date, the Receivable Interest will represent
the Purchasers’ combined undivided percentage ownership interest in (i) all then-outstanding Pool
Receivables, (ii) all Related Security and Related Rights with respect to such Pool Receivables,
(iii) all of Seller’s right and claims under the Purchase and Sale Agreement, (iv) all Collections
with respect to, and other proceeds of, the foregoing as at such date, (v) all lockboxes and
lockbox or collection accounts into which Collections of Pool Receivables are or may be deposited,
and all investments therein, and (vi) all books and records (including computer disks, tapes and
software) evidencing or relating to any of the foregoing, in each case, whether now owned by Seller
or hereafter acquired or arising, and wherever located (all of the foregoing, collectively referred
to as “Pool Assets”).
(b) Computation of Receivable Interest. On any date, the “Receivable Interest” will be equal
to a percentage, expressed as the following fraction:
C + RR
NPB
NPB
where:
C | = | the then Capital; | ||||
RR | = | the then Required Reserves; and | ||||
NPB | = | the then Net Pool Balance; |
provided, however, that during the period from and after the Termination Date but prior to the
Final Payout Date, the Receivable Interest will be one hundred (100%), and that from and after the
Final Payout Date the Receivable Interest will be zero percent (0%).
(c) Frequency of Computation. The Receivable Interest shall be computed as of the Cut-Off Date
immediately preceding each Settlement Period. In addition, the Administrator may require Servicer
to provide a report in such form as may be designated by the Administrator for purposes of
computing the Receivable Interest as of any other date, and the Servicer agrees to do so within two
(2) Business Days after its receipt of the Administrator’s request.
SECTION 1.5. Voluntary Termination or Reduction of Facility Limit. Seller
may, upon at least thirty (30) days’ prior written notice to the Administrator or, at any time
following LOL’s receipt of a Successor Notice, immediately upon written notice to the
Administrator, terminate in whole or reduce in part the unused portion of the Facility Limit;
provided, that each partial reduction at the Facility Limit shall be in an amount equal to
$1,000,000 or an integral multiple of $100,000 in excess thereof.
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SECTION 1.6. Facility Limit Increases.
(a) Notwithstanding anything to the contrary contained in this Agreement, Seller may request
from time to time that the Facility Limit be increased (a “Facility Limit Increase”); provided that
(i) the aggregate amount of all Facility Limit Increases shall not exceed $50,000,000, (ii) a
Facility Limit Increase may occur not more than twice during the term of this Agreement, (iii) the
first Facility Limit Increase shall be in an amount not less than $25,000,000; and (iv) the second
Facility Limit Increase shall be in an amount that is the lesser of (A) $25,000,000 and (B)
$50,000,000 less the amount of the first Facility Limit Increase as provided in clause (iii). The
Seller may (y) request one or more of the Purchasers to fund Purchases in the amount of the
requested increase (which request shall be in writing and sent to the Administrator to forward to
such Purchasers) and/or (z) with the consent of the Administrator (which consent of the
Administrator shall not be unreasonably withheld or delayed), arrange for one or more banks or
financial institutions not a party hereto (a “New Purchaser”) to become parties to and Purchasers
under this Agreement. In no event may the amount of Purchases funded by any Purchaser be increased
without the prior written consent of such Purchaser. The failure of any Purchaser to respond to
Seller’s request for an increase shall be deemed a rejection by such Purchaser of Seller’s request.
The Facility Limit may not be increased if, at the time of any proposed increase hereunder, an
Unmatured Termination Event or a Termination Event has occurred and is continuing. Upon any
request by Seller to increase the Facility Limit, Seller shall be deemed to have represented and
warranted on and as of the date of such request that no Unmatured Termination Event or Termination
Event has occurred and is continuing.
(b) If any Purchaser is willing, in its sole and absolute discretion, to increase the amount
of Purchases funded by such Purchaser hereunder (such Purchaser hereinafter referred to as an
“Increasing Purchaser”), it shall enter into a written agreement to that effect with the Seller,
the Servicer and the Administrator, substantially in the form of Exhibit 1.6(b) (a “Purchase
Increase Supplement”), which agreement shall specify, among other things, the amount of additional
Purchases to be funded by Increasing Purchaser. Upon the effectiveness of such Purchase Increase
Supplement, Schedule 1 shall, without further action, be deemed to have been amended appropriately
to reflect the commitment of such Increasing Purchaser to make additional Purchases as set forth in
the Purchase Increase Supplement and the resulting Pro Rata Share of each Purchaser.
(c) Any New Purchaser that is willing to become a party hereto and a Purchaser hereunder (and
which arrangement to become a party hereto and a Purchaser hereunder has been consented to by the
Administrator pursuant to Section 1.6(a)) shall enter into a written agreement with the Seller, the
Servicer and the Administrator, substantially in the form of Exhibit 1.6(c) (a “New Purchaser
Supplement”), which agreement shall specify, among other things, the amount of Purchases to be
funded by such New Purchaser hereunder. When such New Purchaser becomes a Purchaser
hereunder as set forth in the New Purchaser Supplement, Schedule 1 shall, without further
action, be deemed to have been amended as appropriate to reflect the commitment of such New
Purchaser to make Purchases as set forth in the New Purchaser Supplement and the resulting Pro Rata
Share of each Purchaser. Upon the execution by the Administrator, the Seller and such New
Purchaser of such New Purchaser Supplement, such New Purchaser shall become and be deemed a party
hereto and a “Purchaser” hereunder for all
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purposes hereof and shall enjoy all rights and assume all obligations on the part of the Purchaser
set forth in this Agreement, and its commitment to fund Purchases shall be in the amount specified
in its New Purchaser Supplement.
(d) Upon the effectiveness of the increase in a Purchaser’s commitment to fund Purchasers
pursuant to paragraph (b) above or the commitment of a New Purchaser to fund Purchases pursuant to
paragraph (c) above and execution by an Increasing Purchaser of a Purchase Increase Supplement or
by a New Purchaser of a New Purchase Supplement, Purchases shall be funded by such Increasing
Purchaser or New Purchaser, and/or the Servicer shall make payments from Collections that would
otherwise be reinvested pursuant to Section 1.3(a) (notwithstanding the settlement procedures set
forth in Section 3.1(c)) to the Administrator, for the account of the Purchasers, as shall be
required to cause the amount of Purchases funded by each Purchaser (including each such Increasing
Purchaser and New Purchaser) to be proportional to such Purchaser’s Pro Rata Share after giving
effect to the increases contemplated by this
Section 1.6.
ARTICLE
II. COMPUTATIONAL RULES
SECTION 2.1. Computation of Capital. In making any determination of Capital, the following
rules shall apply:
(a) Capital shall not be considered reduced by any allocation, setting aside or distribution
of any portion of Collections unless such Collections shall have been actually delivered to the
Administrator, for the benefit of the Purchasers, pursuant hereto for application to the Capital;
and
(b) Capital shall not be considered reduced by any distribution of any portion of Collections
if at any time such distribution is rescinded or must otherwise be returned for any reason.
SECTION 2.2. Computation of Concentration Limit. Except as otherwise consented to in writing
in the sole reasonable discretion of the Administrator and the Required Purchasers, in the case of
any Obligor that is an Affiliate of any other Obligor, the Concentration Limit and the aggregate
Unpaid Balance of Pool Receivables of such Obligors shall be calculated as if such Obligors were
one Obligor.
SECTION 2.3. Computation of Earned Discount.
(a) Yield shall accrue on the outstanding Capital on each day during any Settlement Period at
the applicable Yield Rate. On each Settlement Date, the Seller shall
pay from Collections in accordance with Section 3.1 to the Administrator, for the account of
the Purchasers in accordance with their respective Pro Rata Shares, an amount equal to the accrued
and unpaid Yield with respect to the immediately preceding Settlement Period.
(b) In making any determination of Yield, the following rules shall apply:
(i) no provision of this Agreement shall require payment or permit the
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collection of Yield in excess of the maximum permitted by Applicable Law (it being agreed
that, if the Yield would be in excess of such maximum but for this provision, the amount of
Yield shall be reduced to the greatest amount that does not exceed such maximum); and
(ii) Yield for any period shall not be considered paid by any distribution if at any
time such distribution is rescinded or must otherwise be returned for any reason.
SECTION 2.4. Estimates of Earned Discount Rate, Fees, Etc. For purposes of determining the
amounts required to be set aside by Servicer pursuant to Section 1.3, the Administrator shall
notify Servicer from time to time of the Yield Rate applicable to the Capital as elected by Seller
and the rates at which Fees and other amounts are accruing hereunder. It is understood and agreed
that (i) the Yield Rate may change from time to time, (ii) certain rate information provided by the
Administrator to Servicer shall be based upon the Administrator’s good faith estimate, (iii) the
amount of Yield actually accrued with respect to the Capital during any Settlement Period may
exceed, or be less than, the amount set aside with respect thereto by Servicer, and (iv) the amount
of Fees or other payables accrued hereunder with respect to any Settlement Period may exceed, or be
less than, the amount set aside with respect thereto by Servicer. Failure to set aside any amount
so accrued shall not relieve Servicer of its obligation to remit Collections to the Administrator
with respect to such accrued amount, as and to the extent provided in Section 3.1. In the event
that prior to the commencement of any Settlement Period the Administrator shall determine that
adequate and reasonable methods do not exist for ascertaining the LIBOR Rate, then the Yield Rate
for such Settlement Period shall be the Alternate Base Rate.
ARTICLE III. SETTLEMENTS
SECTION 3.1. Purchase and Settlement Procedures. The parties hereto will take the following
actions with respect to each Purchase Date and each Settlement Date:
(a) Servicer Report. Except as provided in the next sentence with respect to the initial
Purchase hereunder, on or before the Business Day (each, a “Reporting Date”) preceding each
Settlement Date, as the case may be, Servicer shall deliver to the Administrator a report
containing the information described in Exhibit 3.1(a)-l (each, a “Servicer Report”).
Notwithstanding the foregoing, for administrative convenience in connection with the initial
Purchase hereunder, the initial Reporting Date shall be August 31, 2007, and the initial Purchase
Date shall occur on September 4, 2007 (the “Initial Purchase Date”).
(b) Yield, Fees and Other Amounts Due. Five (5) Business Days after the end
of each Settlement Period, the Administrator shall notify Servicer of (i) the amount of Yield
that will have accrued in respect of the Capital as of the Settlement Date relating to such
Settlement Period and (ii) all Fees and other amounts that will have accrued or otherwise have
become payable (other than Capital) by Seller under this Agreement on the next Settlement Date.
(c) Settlement Date Procedures — Reinvestment Period. On each Settlement Date prior to the
Termination Date, Servicer shall distribute from Collections set aside or applied (to the extent
applied in violation of the proviso to Section 1.3(a)(iii)) pursuant to Sections 1.3(a)(i)
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through
(iii) during the immediately preceding Settlement Period the following amounts in the
following order:
(1) to the Administrator, for the account of the Purchasers in accordance with their
respective Pro Rata Shares, an amount equal to the Yield accrued and unpaid during such
Settlement Period, plus any previously accrued Yield not paid on a prior Settlement Date or
pursuant to Section 3.1(e), which amount shall be distributed by the Administrator to the
Purchasers for application to such Yield;
(2) to the Administrator, an amount equal to the Fees accrued during such Settlement
Period, plus any previously accrued amounts described in this clause (2) not paid on a
prior Settlement Date or pursuant to Section 3.1(e), which amount shall be distributed by
the Administrator to all Persons to whom payable;
(3) to the Servicer, an amount equal to the Purchasers’ Share of the Servicer’s Fee accrued
during such Settlement Period, plus any previously accrued Purchasers’ Share of the
Servicer’s Fee not paid on a prior Settlement Date or pursuant to Section 3.1(e);
(4) to the Administrator, all other amounts (other than Capital) then due under this
Agreement or the other Transaction Documents to the Administrator, the Purchasers, the
Affected Parties or the Indemnified Parties; and
(5) to the Administrator, for the account of the Purchasers in accordance with their
respective Pro Rata Shares, an amount equal to the Excess Amount as of the Reporting Date,
if any, which amount shall be distributed by the Administrator to the Purchasers for
application to their respective Pro Rata Shares of the Capital.
On or as of any Purchase Date hereunder, the full amount of any such payments and/or distributions
required to be made on the next succeeding Settlement Date (as computed by the Administrator in its
reasonable judgment), shall, for purposes of any computations required pursuant to Section 5.2(b)
for determining Seller’s eligibility to effect any Purchase hereunder on such Purchase Date, be
given pro forma effect and be included in any such computations as if made prior to the Purchase
reflected in the applicable Purchase Notice.
(d) Settlement Period Procedure — Termination Period. On each Business Day during the
Termination Period, Servicer shall, immediately upon receipt or deemed receipt thereof, deposit in
a Lockbox Account, all Collections received or deemed received pursuant to Section 3.2 on such
Business Day and all Collections so received or deemed received during each Settlement Period
during the Termination Period shall be distributed by the Servicer or the Administrator (to the
extent that such funds are in its possession) on each Settlement Date in the following amounts and
in the following order:
(1) to the Administrator, for the account of the Purchasers in accordance with their
respective Pro Rata Shares, an amount equal to the Yield accrued during such Settlement
Period, plus any previously accrued Yield not paid on a prior Settlement Date, which amount
shall be distributed by the Administrator to the Purchasers for application to such Yield;
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(2) to the Administrator, an amount equal to the Fees accrued during such Settlement Period, plus
any previously accrued Fees not paid on a prior Settlement Date which amount shall be distributed
by Servicer to all Persons to whom payable;
(3) to the Servicer, an amount equal to the Purchasers’ Share of the Servicer’s Fee accrued during
such Settlement Period, plus any previously accrued Purchasers’ Share of the Servicer’s Fee not
paid on a prior Settlement Date;
(4) to the Administrator, for the account of the Purchasers in accordance with their respective Pro
Rata Shares, an amount equal to the remaining Purchasers’ Share of Collections, until the Capital
is reduced to zero, which amount shall be distributed by the Administrator to the Purchasers for
application to their respective Pro Rata Shares of the Capital;
(5) to the Administrator, all other amounts (other than Capital) then due under this Agreement and
the other Transaction Documents to the Administrator, the Purchasers, the Affected Parties or the
Indemnified Parties; and
(6) to the Seller, any remaining amounts.
(e) Delayed Payment. If on any day prior to the Termination Date, because
Collections during the relevant Settlement Period were less than the aggregate amounts payable,
Servicer does not make any payment otherwise required, the Servicer shall set aside and hold
Collections in respect of the Receivable Interest until sufficient amounts have been collected to
pay the shortfall and will on the next Business Day pay to the Administrator the amount of such
shortfall and no Reinvestment shall be permitted hereunder until such amount payable has been paid
in full.
SECTION
3.2. Deemed Collections; Reduction of Capital, Etc.
(a) Deemed Collections. If on any day (any of the events or circumstances described in the
succeeding clauses (i), (ii) or (iii) being referred to herein as a “Deemed Collection”):
(i) a Dilution occurs or the Unpaid Balance of any Pool Receivable is less than the amount
included in calculating the Net Pool Balance for purposes of any Servicer Report for any other
reason; or
(ii) any of the representations or warranties of Seller set forth in Section 6.1(k) or (o)
with respect to any Pool Receivable were not true when made with respect to any Pool Receivable, or
any of the representations or warranties of Seller set forth in Section
6.1(k) or (o) are no longer true with respect to any Pool Receivable; or
(iii) without duplication, Seller receives a Deemed Collection pursuant to the Purchase and
Sale Agreement;
then, on such day, Seller shall be deemed to have received a Collection of such Pool Receivable:
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(xi) in the case of clause (a)(i) above, in the amount of such Dilution or the
difference between the actual Unpaid Balance and the amount included in calculating such
Net Pool Balance, as applicable; and
(xii) in the case of clause (a)(ii) above, in the amount of the Unpaid Balance of such
Pool Receivable; and
(xiii) in the case of clause (a)(iii) above, in the amount of such Deemed Collection.
In the event that Seller has paid to the Administrator, for the account of the Purchasers, the
Purchasers’ Share of the Unpaid Balance of any Receivable pursuant to this Section 3.2(a), the
Seller shall acquire the Purchasers’ interest in such Receivable and all Related Rights with
respect thereto, without recourse, representation or warranty of any type or kind by the Purchaser.
(b) Seller’s Optional Reduction of Capital. Seller may at any time (but not more than once in
any seven (7)-day period) elect to reduce the Capital as follows:
(i) Seller shall give the Administrator at least two (2) Business Days’ prior written
notice of such reduction (including the amount of such proposed reduction and the proposed
date on which such reduction will commence);
(ii) on the proposed date of commencement of such reduction and on each day
thereafter, Servicer shall refrain from reinvesting Collections pursuant to Section 1.3
until the amount thereof not so reinvested shall equal the desired amount of reduction, and
(iii) Servicer shall deposit such Collections into the Administrator’s Account in
trust for the Purchasers, pending receipt by the Administrator of the full amount of such
requested Capital reduction, whereupon such funds shall be applied to so reduce the
Capital;
provided that,
(A) the amount of any such reduction shall be not less than $1,000,000 or an
integral multiple of $100,000 in excess thereof, and the Capital after giving
effect to such reduction shall be not less than $15,000,000 (unless Capital shall
thereby be reduced to zero); and
(B) Seller shall use reasonable efforts to attempt to choose a reduction
amount, and the date of commencement thereof, so that such reduction shall commence
and conclude in the same Settlement Period.
SECTION 3.3. Payments and Computations, Etc.
(a) Payments. All amounts to be paid or deposited by Seller or Servicer to the Administrator
or any other Person (other than to Seller or Servicer) hereunder (other than amounts payable under
Section 4.2) shall be paid or deposited in accordance with the terms hereof no later than 2:00 P.M.
(Denver, Colorado time) on the day when due (with written notice of such payment or deposit to be
given to the Administrator by not later than 11:00 A.M.
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(Denver, Colorado time) on such day) in lawful money of the United States of America in immediately
available funds to the Administrator at ABA# 000000000, account # 00000000; Attention: Feed (the
“Administrator’s Account”). Any and all payments by or on account of Seller hereunder or under any
other Transaction Document shall be made free and clear of, and without deduction for, any taxes or
other charges of any type or kind; provided that if Seller shall be required to deduct any taxes or
other charges of any type or kind from such payments, then (i) the sum payable shall be increased
as necessary so that after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrator or Purchaser (as the case may be)
receives an amount equal to the sum it would have received had no such deductions been made, (ii)
Seller shall make such deductions and (iii) Seller shall pay the full amount deducted to the
relevant Governmental Authority in accordance with Applicable Law.
(b) Late Payments. Seller or Servicer, as applicable, shall, to the extent permitted by law,
pay to the Purchasers or the Administrator, as the case may be, interest on all amounts not paid or
deposited by it when such amount is due hereunder at the Default Rate, payable on demand, provided,
however, that such interest shall not at any time exceed the maximum rate permitted by Applicable
Law.
(c) Method of Computation. All computations of Yield, interest and any fees payable hereunder
shall be made on the basis of a year of 360 days for the actual number of days (including the first
day but excluding the last day) elapsed.
ARTICLE IV. FEES AND YIELD PROTECTION
SECTION 4.1. Fees. (a) Seller shall pay to the Administrator and the Purchasers the Fees in
the amounts and at the times set forth in the fee letter, dated July 27, 2007, from the
Administrator (as amended or supplemented from time to time, the “Fee Letter”).
(b) During the period from and including the date hereof to the date on which the Termination
Period begins, a commitment fee (a “Commitment Fee”) shall be payable to the Administrator for the
account of Purchasers in accordance with their respective Pro Rata Shares, payable monthly in
arrears on each Settlement Date and computed at the rate of .200% per annum (20 basis points) on
the average amount of the difference between the Facility Limit and the amount of Capital during
each Settlement Period ending prior to the Settlement Date on which the Commitment Fee is paid,
commencing on the first such Settlement Date to occur after the date hereof.
SECTION 4.2. Yield Protection.
(a) If (i) Regulation D or (ii) any Regulatory Change occurring after the date hereof:
(A) shall subject an Affected Party or any of their interests to any tax, duty or
other charge with respect to any Receivable Interest owned by or funded by it, or any
obligations or right to make Purchases or Reinvestments or to provide funding therefor, or
shall change the basis of taxation of payments to the Affected Party of any Capital or
Yield owned by, owed to or funded in whole or
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in part by it or any other amounts due under this Agreement in respect of the
Receivable Interest owned by or funded by it or its obligations or rights, if any,
to make Purchases or Reinvestments or to provide funding therefor (except for
franchise taxes or changes in the rate of tax on the overall net income of such
Affected Party); or
(B) shall impose, modify or deem applicable any reserve (including, without
limitation, any reserve imposed by the Federal Reserve Board, special deposit,
compulsory loan or similar requirement against assets of any Affected Party,
deposits or obligations with or for the account of any Affected Party or with or
for the account of any affiliate (or entity deemed by the Federal Reserve Board to
be an affiliate) of any Affected Party, or credit extended by any Affected Party,
but excluding any reserve, special deposit or similar requirement included in the
determination of Yield; or
(C) shall change the amount of capital maintained or required or requested or
directed to be maintained by any Affected Party; or
(D) shall impose any other condition affecting any Receivable Interest owned
or funded in whole or in part by any Affected Party, or its obligations or rights,
if any, to make Purchases or Reinvestments or to provide funding therefor; or
(E) shall change the rate for, or the manner in which the Federal Deposit
Insurance Corporation (or a successor thereto) assesses, deposit insurance premiums
or similar charges;
and the result of any of the foregoing is;
(x) | to increase the cost to or to impose a cost on an Affected Party funding or making or maintaining any Purchases or Reinvestments, any purchases, reinvestments, or loans or other extensions of credit under any Transaction Document, or any commitment of such Affected Party with respect to any of the foregoing; | ||
(y) | to reduce the amount of any sum received or receivable by an Affected Party under this Agreement, or under any Transaction Document; or | ||
(z) | to reduce the rate of return on the capital of an Affected Party as a consequence of its obligations hereunder or under any Transaction Document or arising in connection herewith to a level below that which such Affected Party could otherwise have achieved; |
then within thirty (30) days after demand by such Affected Party (which demand shall be accompanied
by a statement setting forth in reasonable detail the basis for, calculation of, and amount of such
additional costs or reduced amount receivable; provided, however, that no Affected Party shall be
required to disclose any confidential or tax planning information in any such statement), Seller
shall pay directly to such Affected Party such additional amount or amounts as such Affected Party
reasonably determines will compensate such Affected Party for
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such additional or increased cost or such reduction, but without duplication of any other similar
additional amounts due under any other Transaction Document.
(b) Each Affected Party will use reasonable efforts to notify Seller and the Administrator as
soon as practicable after knowledge of the occurrence of any event of which it has knowledge which
will entitle such Affected Party to compensation pursuant to this Section 4.2; provided however,
that no failure to give or delay in giving such notification shall adversely affect the rights of
any Affected Party to such compensation and provided further, that no Affected Party shall be
entitled to such compensation retroactively for a period of more than ninety (90) days prior to the
date of such notice.
(c) In determining any amount provided for or referred to in this Section 4.2, an Affected
Party may use any reasonable averaging and attribution methods that it shall deem applicable. Any
Affected Party when making a claim under this Section 4.2 shall submit to Seller a statement as to
such increased cost or reduced return (including a calculation thereof in reasonable detail), which
statement shall, in the absence of demonstrable error, be conclusive and binding upon Seller.
SECTION 4.3. Funding Losses. In the event that any Affected Party shall incur any loss or
expense (including any LIBOR Rate breakage costs or any other loss or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such Affected Party to make
or maintain any funding with respect to the Receivable Interest) as a result of (i) any settlement
with respect to any portion of Capital funded by such Affected Party being made on any day other
than the scheduled last business day of an applicable Settlement Period with respect thereto, or
(ii) any Purchase not being made in accordance with a request therefor under Section 1.2, then,
immediately upon demand from the Administrator to Seller, Seller shall pay to the Administrator for
the account of such Affected Party, the amount of such loss or expense. Such written notice (which
shall include calculations in reasonable detail) shall, in the absence of demonstrable error, be
conclusive and binding upon the Seller.
SECTION 4.4. Prepayments. In the event the Seller desires to reduce the amount of Capital
outstanding on a date other than a Settlement Date other than as provided in Section 3.2(b), the
Seller may deliver the amount of such Capital to the Administrator, and the Administrator agrees to
invest the amount of such Capital as directed by the Seller for the period between the date of such
prepayment and the next succeeding Settlement Date. On the next succeeding Settlement Date,
interest and other amounts, if any, earned on the amount of Capital so invested at the direction of
the Seller will be credited toward any amounts due from the Seller on such next succeeding
Settlement Date. Notwithstanding the terms of this Section 4.4, the Seller shall remain liable (on
the next succeeding Settlement Date) for the amount, if any, by which the Yield accruing on the
outstanding Capital through the next succeeding Settlement Date exceeds the amount, if any, of
interest and other amounts earned upon investment of such
prepaid amounts by the Administrator (at the direction of the Seller) as aforesaid.
ARTICLE V. CONDITIONS TO PURCHASES
SECTION 5.1. Conditions Precedent to Initial Purchase and Effectiveness. Each of the initial
Purchase hereunder and the effectiveness of this Agreement is subject to the condition
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precedent that the Administrator shall have received, on or before the date of such Purchase, the
following, each (unless otherwise indicated) dated such date and in form and substance reasonably
satisfactory to the Administrator:
(a) Good standing (and foreign qualification, as applicable) certificates for each Originator
and Seller issued by the Secretaries of State of the jurisdictions of their incorporation or
formation and their respective principal places of business;
(b) A certificate of the Secretaries of LOL, Winfield and Seller in form and substance
reasonably satisfactory to the Administrator certifying (i) a copy of the resolutions of its Board
of Directors or Board of Managers, as applicable, approving this Agreement and the other
Transaction Documents to be delivered by it hereunder and the transactions contemplated hereby;
(ii) the names and true signatures of the officers authorized on its behalf to sign this Agreement
and the other Transaction Documents to be delivered by it hereunder (on which certificate the
Administrator and the Purchasers may conclusively rely until such time as the Administrator shall
receive from LOL, Winfield or Seller, as the case may be, a revised certificate meeting the
requirements of this subsection (b)); (iii) a copy of its by-laws, operating agreement or
equivalent organizational document(s); and (iv) all documents evidencing other necessary corporate
action and governmental approvals, if any, with respect to this Agreement and the other Transaction
Documents;
(c) The Certificate of Formation or the Certificate of Incorporation, as applicable, of LOL,
Seller and Winfield, duly certified by the Secretary of State of the jurisdiction of its formation,
as of a recent date reasonably acceptable to Administrator;
(d) A search report provided in writing to and approved by the Administrator, which approval
shall not be unreasonably withheld or delayed, listing all effective financing statements that name
any Originator or Seller as debtor or assignor and that are filed in the jurisdictions in which
filings of financing statements were made pursuant to the Existing Receivables Purchase Agreement
and in such other jurisdictions that Administrator shall reasonably request, together with copies
of such financing statements (none of which shall cover any Pool Assets, unless executed
termination statements and/or partial releases with respect thereto have been delivered to the
Administrator), and tax and judgment lien search reports from a Person reasonably satisfactory to
Servicer and the Administrator showing no evidence of such liens filed against any Originator or
Seller;
(e) A certificate of an officer of Seller identifying and affirming that all of the Lockbox
Agreements with the Lockbox Banks that were executed in connection with the Existing Receivables
Purchase Agreement, as well as any additional Lockbox Agreements with Lockbox Banks that have been
executed since the execution of the
Existing Receivables Purchase Agreement pursuant to Section 7.3(d) thereof, remain in full
force and effect and attaching certified copies of each such Lockbox Agreement;
(f) Favorable opinions of (i) in-house counsel to each of Servicer, Winfield and Seller as to
corporate authority and (ii) Faegre & Xxxxxx LLP, special counsel to each of the Originators and
Seller as to all other legal matters, in form and substance reasonably satisfactory to the
Administrator and its counsel;
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(g) Evidence of payment by the Seller of all accrued and unpaid Fees (including those
contemplated by the Fee Letter), all of the costs and expenses of this transaction accrued or
received prior to the date hereof, including, without limitation, attorneys’ fees of the
Administrator, plus such additional amounts of attorneys’ fees as shall constitute the
Administrator’s reasonable estimate of attorneys’ fees incurred or to be incurred by it through the
closing proceedings, including any such costs, fees and expenses payable in accordance with Section
14.5 as well as any similar accrued and unpaid amounts pursuant to the Existing Receivables
Purchase Agreement;
(h) An amendment to the Purchase and Sale Agreement, duly executed by the Originators and
Seller, and a copy of all documents required to be delivered thereunder; and
(i) Such other documents, certificates or opinions as the Administrator may reasonably
request.
SECTION 5.2. Conditions Precedent to All Purchases and Reinvestments. Each Purchase
(including the initial Purchase) and each Reinvestment hereunder, shall be subject to the further
conditions precedent that:
(a) in the case of each Purchase, the Servicer shall have delivered to the Administrator on or
prior to such Purchase, in form and substance satisfactory to the Administrator, a completed
Servicer Report with respect to the immediately preceding calendar month, dated within two (2)
Business Days prior to the date of such Purchase, together with such additional information as may
be reasonably requested by the Administrator;
(b) on the date of such Purchase or Reinvestment the following statements shall be true (and
Seller by accepting the amount of such Purchase or by receiving the proceeds of such Reinvestment
shall be deemed to have certified that):
(i) each of the representations and warranties contained in Article VI (including,
without limitation, all representations and warranties incorporated by reference herein and
made a part hereof pursuant to Section 6.3(a)), are true and correct in all material
respects as though made on and as of such date and shall be deemed to have been made on
such date (except that any such representation or warranty, which, by its express terms,
relates exclusively to an earlier date, shall be true and correct in all material respects
as of such earlier date);
(ii) no event has occurred and is continuing, or would result from such Purchase or
Reinvestment, that constitutes a Termination Event or Unmatured Termination Event;
(iii) after giving effect to each proposed Purchase or Reinvestment, Capital will not
exceed the Facility Limit and the Receivable Interest will not exceed the Allocation Limit;
and
(iv) the Termination Date shall not have occurred.
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ARTICLE VI. REPRESENTATIONS AND WARRANTIES
SECTION 6.1. Representations and Warranties of Seller. Seller represents and
warrants as follows:
(a) Organization and Good Standing. Seller has been duly organized and is validly
existing as a limited liability company in good standing under the laws of the State of Delaware,
with power and authority to own its properties and to conduct its business as such properties are
presently owned and such business is presently conducted, and had at all relevant times, and now
has, all necessary power, authority, and legal right to acquire and own the Pool Assets.
(b) Due Qualification. Seller is duly qualified to do business as a foreign limited
liability company in good standing, and has obtained all necessary licenses and approvals, in all
other jurisdictions in which the ownership or lease of property or the conduct of its business
requires such qualification, licenses or approvals, and except where the failure to so qualify or
have such licenses or approvals has not had, and could not reasonably be expected to have, a
Material Adverse Effect.
(c) Power and Authority; Due Authorization. Seller (i) has all necessary power,
authority and legal right to (A) execute and deliver this Agreement and the other Transaction
Documents to which it is a party, (B) carry out the terms of the Transaction Documents to which it
is a party, and (C) sell and assign the Receivable Interest on the terms and conditions herein
provided and (ii) has duly authorized by all necessary organizational action the execution,
delivery and performance of this Agreement and the other Transaction Documents to which it is a
party and the sale and assignment of the Receivable Interest on the terms and conditions herein
provided.
(d) Valid Transfer; Binding Obligations. This Agreement constitutes a valid transfer
and assignment of the Receivable Interest to the Administrator, for the benefit of Purchaser,
enforceable against creditors of, and purchasers from, Seller; and this Agreement constitutes, and
each other Transaction Document to be signed by Seller when duly executed and delivered will
constitute, a legal, valid and binding obligation of Seller enforceable in accordance with its
terms, except, in all cases, as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors’ rights generally and
by general principles of equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(e) No Violation. The consummation by Seller of the transactions contemplated by this
Agreement and the other Transaction Documents to which it is a party and the fulfillment of the
terms hereof and thereof will not (i) conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time or both) a default under, the
Seller’s certificate of formation or limited liability company agreement or any Contractual
Obligation of Seller, (ii) result in the creation or imposition of any Lien upon any of Seller’s
properties pursuant to the terms of any such Contractual Obligation, other than this Agreement and
the Purchase and Sale Agreement, or (iii) violate any Applicable Law as then in effect.
(f) No Proceedings. There is no litigation, proceeding or investigation pending or,
to
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the best of Seller’s knowledge, threatened, before any Governmental Authority or arbitrator (i)
asserting the invalidity of this Agreement or any other Transaction Document to which Seller is a
party, (ii) seeking to prevent the sale and assignment of the Receivable Interest or the
consummation of any of the other transactions contemplated by this Agreement or any other
Transaction Document, or (iii) seeking any determination or ruling that could reasonably be
expected to have a Material Adverse Effect.
(g) Bulk Sales Act. No transaction contemplated hereby requires compliance with any
bulk sales act or similar law.
(h) Government Approvals. No Governmental Action is required for the due execution,
delivery and performance by Seller of this Agreement or any other Transaction Document to which
Seller is a party, except for the filing of the UCC financing statements referred to in the
Existing Receivables Purchase Agreement, all of which were, at the time required in the Existing
Receivables Purchase Agreement, duly made and remain in full force and effect.
(i) Financial Condition. Since the date of Seller’s formation, there has been no
material adverse change in Seller’s financial condition, business, assets or operations.
(j) Margin Regulations. The use of all funds obtained by Seller under this Agreement
will not conflict with or contravene any of Regulations T and X promulgated by the Board of
Governors of the Federal Reserve System from time to time.
(k) Quality of Title. Each Pool Asset is legally and beneficially owned by Seller
free and clear of any Lien (other than any Lien arising solely as the result of any action taken by
the Purchasers or the Administrator); when the Purchasers make a Purchase or Reinvestment, the
Administrator shall have acquired, for the benefit of the Purchasers, a valid and enforceable
perfected first-priority undivided percentage ownership interest to the extent of the Receivable
Interest in each Pool Asset, free and clear of any Lien (other than any Lien arising solely as the
result of any action taken by the Purchasers or the Administrator), enforceable against any
creditor of, or purchaser from, Seller or any Originator; and no financing statement or other
instrument similar in effect covering any Pool Asset is on file in any recording office except such
as may be filed (i) in favor of an Originator in accordance with the Contracts, (ii) in favor of
Seller in accordance with the Purchase and Sale Agreement, or (iii) in favor of the Purchasers or
the Administrator in accordance with this Agreement or in connection with any Lien arising solely
as the result of any action taken by the Purchasers or the Administrator.
(l) Accurate Reports. No Servicer Report, Monthly Report or other information,
exhibit, financial statement, document, book, record or report furnished or to be furnished by or
on behalf of Seller to the Administrator or the Purchasers in connection with this Agreement or any
Transaction Document was or will be inaccurate in any material respect as of the date it was or
will be dated or (except as otherwise disclosed to the Administrator at such time) as of the date
so furnished, or contained or will contain any material misstatement of fact or omitted or will
omit to state a material fact or any fact necessary to make the statements contained therein not
materially misleading.
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(m) Offices. The principal place of business and chief executive office of Seller are
located at the address of Seller referred to in Section 14.2, and the offices at which Seller keeps
all its books, records and documents evidencing or relating to Pool Receivables are located at the
addresses specified in Schedule 6.1(m) (or at such other locations, notified to the Administrator
in accordance with Section 7.1(f), in jurisdictions where all action required by Section 8.5 has
been taken and completed).
(n) Lockbox Accounts. The names and addresses of all the Lockbox Banks, together with
the account numbers of the Lockbox Accounts of Seller at such Lockbox Banks, are specified in
Schedule 6.1(n) (or have been notified to the Administrator in accordance with Section 7.3(d)).
(o) Eligible Receivables. Each Receivable included in the Net Pool Balance as an
Eligible Receivable on the date of any Purchase, Reinvestment or other calculation of Net Pool
Balance shall be an Eligible Receivable on such date.
(p) Accounting Sale. The Seller has accounted for each sale of undivided percentage
ownership interests in Receivables in its books and financial statements as sales, consistent with
GAAP.
(q) Credit and Collection Policies. The Seller has complied in all material respects with the
applicable Credit and Collection Policy with regard to each Receivable.
(r) Legal Name. The Seller’s complete legal name is set forth in the preamble to this
Agreement, and the Seller does not use, and has not during the last six (6) years used, any other
corporate name, trade name, doing business name or fictitious name.
SECTION 6.2. Representations and Warranties of Servicer. Servicer hereby represents
and warrants as follows:
(a) Organization and Good Standing. Servicer has been duly organized and is validly
existing as a cooperative corporation in good standing under the laws of the State of Minnesota,
with full power and authority to own its properties and to conduct its business as such properties
are presently owned and such business is presently conducted.
(b) Due Qualification. Servicer is duly qualified to do business as a foreign
cooperative corporation in good standing, and has obtained all necessary licenses and approvals, in
all jurisdictions in which the ownership or lease of property or the conduct of its business
requires such qualification, licenses or approvals, except where the failure to so qualify or have
such licenses or approvals has not had, and could not reasonably be expected to have, a Material
Adverse Effect.
(c) Power and Authority; Due Authorization. Servicer (i) has all necessary power,
authority and legal right to (A) execute and deliver this Agreement and the other Transaction
Documents to which it is a party and (B) carry out the terms of the Transaction Documents to which
it is a party and (ii) has duly authorized by all necessary corporate action the execution,
delivery and performance of this Agreement and the other Transaction Documents to which it is
a party.
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(d) Binding Obligations. This Agreement constitutes, and each other Transaction
Document to be signed by Servicer when duly executed and delivered will constitute, a legal, valid
and binding obligation of Servicer, enforceable against Servicer in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency, reorganization or other similar
laws affecting the enforcement of creditors’ rights generally and by general principles of equity,
regardless of whether such enforceability is considered in a proceeding in equity or at law.
(e) No Violation. The consummation of the transactions contemplated by this Agreement
and the other Transaction Documents to which Servicer is a party and the fulfillment of the terms
hereof and thereof will not (i) conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time or both) a default under
Servicer’s charter, by-laws or any other organizational document or any Contractual Obligation of
Servicer, (ii) result in the creation or imposition of any Lien upon any of Servicer’s properties
pursuant to the terms of any such Contractual Obligation (other than any Lien created pursuant to
the Transaction Documents), or (iii) violate any Applicable Law as then in effect.
(f) No Proceedings. There is no litigation, proceeding or investigation pending or,
to the best of Servicer’s knowledge, threatened, before any Governmental Authority or arbitrator
(i) asserting the invalidity of this Agreement or any other Transaction Document to which Servicer
is a party, (ii) seeking to prevent the sale and assignment of the Receivable Interest or the
consummation of any of the other transactions contemplated by this Agreement or any other
Transaction Document, or (iii) seeking any determination or ruling that could reasonably be
expected to have a Material Adverse Effect.
(g) Government Approvals. No Governmental Action is required for the due execution,
delivery and performance by Servicer of this Agreement or any other Transaction Document to which
it is a party, other than the filing of the UCC financing statements referred to in the Existing
Receivables Purchase Agreement, and all filings, if any, necessary to comply with the
Xxxx-Xxxxx-Xxxxxx Antitrust Act, all of which, at the time required in the Existing Receivables
Purchase Agreement, were duly made and remain in full force and effect.
(h) Accurate Reports. No Servicer Report, no Monthly Report or other information,
exhibit, financial statement, document, book, record or report furnished or to be furnished by or
on behalf of Servicer to the Administrator or the Purchasers in connection with this Agreement or
any Transaction Document was or will be inaccurate in any material respect as of the date it was or
will be dated or (except as otherwise disclosed to the Administrator at such time) as of the date
so furnished, or contained or will contain any material misstatement of fact or omitted or will
omit to state a material fact or any fact necessary to make the statements contained therein not
materially misleading.
ARTICLE VII. GENERAL COVENANTS
SECTION 7.1. Affirmative Covenants. From the date hereof until the Final Payout
Date:
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(a) Compliance with Laws, Etc. Each of Seller and Servicer will comply in all
material respects with all Applicable Laws, including those with respect to the Pool Receivables
and the related Contracts, except where noncompliance could not reasonably be expected to have a
Material Adverse Effect.
(b) Preservation of Legal Existence. Each of Seller and Servicer will preserve and
maintain its legal existence, rights, franchises and privileges in the jurisdiction of its
formation, and qualify and remain qualified in good standing as a foreign limited liability
company, corporation, or other business entity, as the case may be, in each jurisdiction where the
failure to preserve and maintain such existence, rights, franchises, privileges and qualification
could reasonably be expected to have a Material Adverse Effect.
(c) Audits. (i) Each of Seller and Servicer will at any time and from time to time
during regular business hours, on at least five (5) Business Days’ prior notice unless a
Termination Event shall have occurred and be continuing, permit the Administrator or any of its
agents or representatives, (A) to examine and make copies of and abstracts from all books, records
and documents (including, without limitation, computer tapes and disks) in its possession or under
its control relating to Pool Assets, (B) to visit its offices and properties for the purpose of
examining such materials described in clause (i)(A) above, and to discuss matters relating to Pool
Assets or its performance hereunder with any of its officers or employees having knowledge of such
matters, and (C) to verify with officers and employees of Servicer, or directly with any Obligors
(but only with a representative of the Servicer present unless a Termination Event shall have
occurred and be continuing), the existence and amount of the Receivables; and (ii) without limiting
the provisions of clause (i) above, from time to time on request of Administrator on at least five
(5) Business Days prior notice, unless a Termination Event shall have occurred and be continuing,
permit certified public accountants or other auditors acceptable to the Administrator to conduct,
at the expense of Seller or Servicer, as the case may be, a review of its books and records with
respect to the Pool Receivables; provided, however that unless a Termination Event has occurred and
is continuing, Seller and/or Servicer shall not be obligated to pay for more than one (1) such
audit in any calendar year.
(d) Keeping of Records and Books of Account. Each of Seller and Servicer will
maintain and implement administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing Pool 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 Pool Assets (including, without
limitation, records adequate to permit the daily identification of each new Pool Receivable and all
Collections of and adjustments to each existing Pool Receivable).
(e) Performance and Compliance with Receivables and Contracts. Seller will, at its
expense, timely and fully perform and comply with (or cause an Originator to perform and comply
with pursuant to the Purchase and Sale Agreement) all provisions, covenants and other promises
required to be observed by it under the Contracts related to the Pool Receivables and all other
agreements related to such Pool Receivables, except where failure to do so would not materially and
adversely affect the validity, enforceability or collectibility of the related Pool Receivable.
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(f) Location of Records. Each of Seller and Servicer will keep its principal place of
business and chief executive office, and the offices where it keeps its records concerning the Pool
Receivables and all related Contracts and all other agreements related to such Pool Receivables
(and all original documents relating thereto), at its addresses referred to in Section 14.2 or,
upon thirty (30) days’ prior written notice to the Administrator, at such other locations in
jurisdictions where all action required by Section 8.5 shall have been taken and completed.
(g) Credit and Collection Policies. Attached as Schedule 7.1(g) are the Credit and
Collection Policies for each of the Originators. Each of Seller and Servicer, at its own expense,
will at all times timely and fully perform and comply in all material respects with, and LOL agrees
to so perform and comply with, each applicable Credit and Collection Policy in regard to each Pool
Receivable and the related Contracts.
(h) Collections. Each of Seller and Servicer will (i) instruct (A) all Obligors to
cause all Collections (which, for the avoidance of doubt, shall exclude any collections in respect
of any Reconveyed Receivable, retail receivable or other receivable of Seller, any Originator or
any other Person not included in the Receivable Pool) to be sent to either a Lockbox or Lockbox
Account that is the subject of a Lockbox Agreement (or, in the case of Xxxxx Fargo & Company
account number 4121577514, that shall be the subject of a Lockbox Agreement within thirty (30) days
following the date of this Agreement), unless otherwise requested by the Administrator pursuant to
Section 8.3(c)(ii), in which case the Obligors shall be instructed consistent with such request,
and (B) each Lockbox Bank or lockbox bank to deposit all such Collections directly into a Lockbox
Account that is the subject of a Lockbox Agreement (or, in the case of Xxxxx Fargo & Company
account number 4121577514, that shall be the subject of a Lockbox Agreement within thirty (30) days
following the date of this Agreement). In the event that Seller or Servicer receives Collections
directly from any Obligor, Seller or Servicer, as the case may be, shall deposit such Collections
in the form received into either the Collection Account or a Lockbox Account within two (2)
Business Days after receipt thereof or, on or after the Termination Date, immediately upon receipt.
(i) Quality of Title. Each of Seller and Servicer will take all action necessary or
desirable to establish and maintain a valid and enforceable perfected first-priority undivided
percentage ownership interest in favor of the Administrator, for the benefit of the Purchasers, to
the extent of the Receivable Interest in each Pool Asset, free and clear of any Lien (other than
any Lien arising solely as a result of any action taken by the Purchasers or the Administrator),
enforceable against any creditor of, or purchaser from, Seller or any Originator.
(j) Bank Equity Interests. (i) Each of Seller and Servicer agrees to purchase such
equity interests in CoBank (“Bank Equity Interests”) as CoBank may from time to time require in
accordance with its bylaws and capital plans as applicable to cooperative borrowers generally. In
connection with the foregoing, each of Seller and Servicer hereby acknowledges receipt, prior to
the execution of this Agreement, of the following with respect to CoBank:
(A) the bylaws of CoBank;
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(B) a written description of the terms and conditions under which the Bank
Equity Interests are issued; and
(C) the most recent annual report, and if more recent than the latest annual
report, the latest quarterly report.
(ii) CoBank reserves the right to sell participations and to make assignments of its
rights and duties hereunder in accordance with the provisions of Article XII on a
non-patronage basis. For the avoidance of doubt, none of the Purchasers (other than
CoBank) will have the benefit of or any rights in any Bank Equity Interests or proceeds
thereof.
SECTION 7.2. Reporting Requirements. From the date hereof until the Final Payout
Date:
(a) Monthly Reports. Not later than Noon (Denver, Colorado time) on the
20th day of each month (or, if such is not a Business Day, on the next succeeding Business
Day), Servicer will furnish to the Administrator a report (a “Monthly Report”), duly certified by
the principal financial officers of Seller and Servicer, with respect to the immediately preceding
month then ended in the form of, and addressing the matters contained in, Exhibit 7.2(a) hereto;
(b) Quarterly Financial Statements. As soon as available and, in any event within
forty-five (45) days after the end of each of the first three (3) quarters of each fiscal year,
Seller will furnish to the Administrator copies of (i) its financial statements, consisting of at
least a balance sheet as at the close of such quarter and statements of earnings for such quarter
and for the period from the beginning of the fiscal year to the close of such quarter, in each case
in conformity with GAAP (except for footnote disclosures), duly certified by the principal
financial officer of Seller and (ii) if not otherwise delivered to the Administrator pursuant to
the Purchase and Sale Agreement, the financial statements of LOL and its Subsidiaries prepared on a
consolidated basis, consisting of at least a balance sheet as at the close of such quarter and
statements of earnings for such quarter and for the period from the beginning of the fiscal year to
the close of such quarter, in each case in conformity with GAAP (except for footnote disclosures)
and fairly presenting the consolidated financial position and results of operations of LOL and its
Subsidiaries for such month and period, duly certified by the principal financial officer of LOL;
(c) Annual Financial Statements. As soon as available and, in any event within ninety
(90) days after the end of each fiscal year, Seller will furnish to the Administrator copies of (i)
its financial statements, consisting of at least a balance sheet of Seller for such year and
statements of earnings and cash flows, in each case in conformity with GAAP setting forth in each
case in comparative form corresponding figures from the preceding fiscal year, and (ii) if not
otherwise delivered to the Administrator pursuant to the Purchase and Sale Agreement, the
unqualified audited financial statements of LOL and its Subsidiaries prepared on a consolidated
basis, consisting of at least a balance sheet of LOL and its Subsidiaries for such year and
consolidated and consolidating statements of earnings and cash flows, in each case in conformity
with GAAP, setting forth in each case in comparative form corresponding consolidated figures from
the preceding fiscal year, with all such statements duly certified by independent certified
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public accountants of recognized standing selected by LOL, together with copies of any and all
letters, from such accountants to LOL’s Board of Directors or any committee thereof;
(d) Compliance Certificate. Together with each quarterly and annual financial
statement delivered in accordance with the preceding paragraphs, if not otherwise delivered to the
Administrator pursuant to the Purchase and Sale Agreement, Seller will furnish to the Administrator
the compliance certificate to be delivered to it pursuant to Section 6.1(i)(iii) of the Purchase
and Sale Agreement.
(e) Termination Events. Each of Seller and Servicer will furnish to the
Administrator, as soon as possible and in any event within two (2) Business Days after an officer
of Seller or Servicer obtains actual knowledge of the occurrence of each Termination Event and each
Unmatured Termination Event, a written statement of the principal financial officer or principal
accounting officer of Seller or Servicer, as the case may be, setting forth details of such event
and the action that Seller or Servicer, as the case may be, proposes to take with respect thereto;
(f) Material Adverse Effect; Litigation. Each of Seller and Servicer will furnish to
the Administrator, as soon as possible and, in any event within ten (10) Business Days after
Seller’s or LOL’s actual knowledge thereof, written notice of (i) the occurrence of any event or
condition which could reasonably be expected to have a Material Adverse Effect, (ii) without
limiting the foregoing clause (i), any litigation, investigation or proceeding which may exist at
any time which could be reasonably expected to have a Material Adverse Effect and (iii) any
material adverse development in previously disclosed litigation;
(g) Change in Credit and Collection Policies. Each of Seller and Servicer will
furnish to the Administrator, prior to its effective date, written notice of any material change in
any Credit and Collection Policy which changes shall be reasonably acceptable to the Administrator;
(h) Change in Name. Seller and Servicer will furnish to the Administrator, at least
thirty (30) days prior to any change in the Seller’s or Servicer’s name, location or any other
change requiring, or that might require, the amendment of UCC financing statements, a notice
setting forth such changes and the effective date thereof; and
(i) XX Xxxxxx Credit Documents; Other Information.
(i) To the extent not delivered to the Administrator pursuant to any other provision of
this Agreement or of the Purchase and Sale Agreement, Seller and LOL will, at all times
during which LOL is acting as an Originator or in any other capacity hereunder or under any
Transaction Document, request pursuant to Section 6.1(i)(v) of the Purchase and Sale
Agreement and deliver to the Administrator copies of all financial information and reports
delivered to the agent or the lenders under the XX Xxxxxx Credit Documents by or on behalf
of LOL pursuant to any such XX Xxxxxx Credit Document.
(ii) Each of Seller and Servicer will, at all times until the Final Payout Date,
furnish to the Administrator such other information with respect to the Receivables or the
condition or operations, financial or otherwise, of the Servicer or Seller or any Originator
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as the Administrator may from time to time reasonably request.
SECTION 7.3. Negative Covenants. From the date hereof until the Final Payout Date:
(a) Sales, Liens, Etc. Seller will not, except as otherwise provided herein or in the
Purchase and Sale Agreement, sell, assign (by operation of law or otherwise) or otherwise dispose
of, or create or suffer to exist any Lien (except for statutory Liens on all Bank Equity Interests
that Seller may now own or hereafter acquire or be allocated in CoBank) upon or with respect to,
any Pool Asset or any interest therein. For the avoidance of doubt, Feed shall be permitted to
pledge its membership interests in Seller to secure Feed’s obligations in respect of the XX Xxxxxx
Credit Documents.
(b) Extension or Amendment of Receivables. Neither Servicer nor Seller will, except
as otherwise expressly permitted in Section 8.2(c), extend, amend, defer or otherwise modify, or
permit Servicer to extend, amend or otherwise modify, the terms of any Pool Receivable; or amend,
modify or waive, or permit Servicer to amend, modify or waive, any term or condition of any
Contract related to a Pool Receivable.
(c) Change in Business or Credit and Collection Policies. Neither Servicer nor Seller
will make any change in the character of its business or in any Credit and Collection Policy, which
change could materially impair the collectibility of any Pool Receivable or otherwise materially
adversely affect the interests or remedies of the Administrator or the Purchasers under this
Agreement or any other Transaction Document.
(d) Change in Payment Instructions to Obligors. Neither Servicer nor Seller will add
or terminate any bank as a Lockbox Bank or a lockbox bank or any Lockbox Account or lockbox account
from those referenced on Schedule 6.1(n) or make any change, or permit any Lockbox Bank or lockbox
bank to make any change, in its instructions to Obligors regarding payments to be made to Seller or
Servicer or payments to be made to any Lockbox, Lockbox Bank, lockbox or lockbox bank, unless the
Administrator shall have received notice of such addition, termination or change and duly executed
copies of Lockbox Agreements with each new Lockbox Bank or with respect to each new Lockbox or
Lockbox Account, as the case may be, or given its prior written consent, not to be unreasonably
withheld, to such addition, termination or change. Within thirty (30) days of the date of this
Agreement, Servicer and Seller shall deliver to the Administrator an executed and effective copy of
a Lockbox Agreement with respect to Xxxxx Fargo & Company account number 4121577514.
(e) Mergers, Acquisitions, Sales, etc. Without the prior written consent of the
Administrator and the Required Purchasers, neither the Seller nor the Servicer will enter into any
merger or consolidation with or acquire all or substantially all of the capital stock or assets of
any Person (whether in one transaction or in a series of transactions), except that: (i) any
Person (other than the Seller or any Originator) may merge with and into the Servicer provided that
the Servicer is the surviving entity; or (ii) the Servicer may merge with or acquire all of the
capital stock of or all or substantially all of the assets of any other Person provided that the
Servicer is the surviving entity, provided that, in each such case, prior to and immediately after
giving effect thereto, no Termination Event or Unmatured Termination Event shall exist.
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(f) Deposits to Special Accounts. Neither Servicer nor Seller will deposit or
otherwise credit, or cause or permit to be so deposited or credited, to any Lockbox or Lockbox
Account cash or cash proceeds (including, without limitation, proceeds of any Reconveyed Receivable
or other receivable of Seller, any Originator or any other Person) other than Collections of Pool
Receivables.
(g) Other Businesses. Seller will not (i) engage in any business other than the
transactions contemplated by the Transaction Documents; (ii) incur any indebtedness, obligation,
liability or contingent obligation of any kind other than pursuant to this Agreement or the
Purchase and Sale Agreement (including the SPV Purchaser Notes issued pursuant thereto); or (iii)
form any new Subsidiary or make any investments in any other Person (except for investments in
CoBank to the extent required by Section 7.1(k)).
(h) Certificate of Formation; Purchase and Sale Agreement. Seller will not amend,
modify, terminate, revoke or waive any provision of its certificate of formation, limited liability
company agreement, any SPV Purchaser Note or the Purchase and Sale Agreement.
(i) Restricted Payments. Seller will not declare or make any dividend or other
distributions to any of its shareholders, redeem or purchase any of its capital stock or make any
loan or other payments to any of its shareholders or Affiliates (other than (1) payments of the
purchase price of Receivables and payments under the SPV Purchaser Notes, each as set forth in the
Purchase and Sale Agreement, (2) the turn-over of Collections of Reconveyed Receivables to Servicer
as set forth in the Purchase and Sale Agreement, (3) payment of the Servicer’s Fee so long as LOL
is the Servicer and (4) payment of reasonable management fees and reimbursement of reasonable
expenses of Servicer incurred in connection with managing Seller, so long as such fees and expenses
are in an amount not in excess of those that would be paid in a similar arms’-length transaction)
unless, in each case, no Termination Event or Unmatured Termination Event has occurred and is
continuing or would result therefrom.
(j) Change of Name or Location. Seller will not change its name or the location of
its principal place of business or chief executive office or its organizational structure, unless
Seller has given the Administrator at least thirty (30) days’ prior notice thereof, and has taken
all steps necessary or advisable under the UCC to continue the perfection and priority of the
Administrator’s and each Purchaser’s interest in the Pool Assets.
SECTION 7.4. Separate Existence. Each of Seller and Servicer hereby acknowledges and
agrees that the Purchasers and the Administrator are entering into the transactions contemplated by
this Agreement and the other Transaction Documents in reliance upon Seller’s identity as a legal
entity separate from Feed and the other Originators. Therefore, from and after the date hereof,
each of Seller and LOL shall take all steps specifically required by this Agreement or reasonably
required by the Required Purchasers or the Administrator to continue Seller’s identity as a
separate legal entity and to make it apparent to third Persons that Seller is an entity with assets
and liabilities distinct from those of Feed and the other Originators and any other Person, and is
not a division of Feed, any other Originator or any other Person. Without in any way limiting the
generality of the foregoing and in addition to and consistent with the other covenants set forth
herein, Seller and LOL shall take such actions as shall be required in order that:
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(a) Seller will be a limited purpose limited liability company whose primary activities are
restricted in its certificate of formation to purchasing or otherwise acquiring from Originators,
owning, holding, granting security interests, or selling interests, in Pool Assets, entering into
agreements for the selling and servicing of the Receivables Pool, and conducting such other
activities as it deems necessary or appropriate to carry out its primary activities. Seller shall
observe all company procedures required by it certificate of organization, its limited liability
company agreement and the limited liability law of the State of Delaware. All distributions of
Seller will be paid and declared in accordance with the law of the State of Delaware;
(b) Seller shall not engage in any business or activity, or incur any indebtedness or
liability other than as expressly permitted by the Transaction Documents;
(c) The business and affairs of Seller are and will be managed by or under the direction of
Seller’s Board of Managers. Seller at all times will ensure that the Board of Managers duly
authorizes all company actions requiring authorization by its Board of Managers. When necessary,
Seller will obtain proper authorization from Feed as its sole member for company action. The
officers and managers of Seller shall make decisions with respect to the business and daily
operations of Seller independent of and not dictated by Feed or any other Originator. In addition,
Seller shall ensure that its officers and managers will adhere to all statutes, rules, by-laws or
other obligations regarding conflicts of interest and participation in decision-making by officers
and managers who may have a conflict of interest with respect to the subject matter of the
decision;
(d) Not fewer than one (1) member of Seller’s Board of Managers shall be an Independent
Manager. The certificate of formation of Seller shall provide that (i) Seller’s Board of Managers
shall not approve, nor take any other action to cause the filing of, a voluntary bankruptcy
petition or a merger or dissolution with respect to Seller unless the Independent Manager shall
approve the taking of such action in writing prior to the taking of such action and (ii) such
provision cannot be amended without the prior written consent of the Independent Manager;
(e) The Independent Manager shall not at any time serve as a trustee in bankruptcy for Seller,
Feed, any other Originator or any other Affiliate thereof;
(f) Any employee, consultant or agent of Seller will be compensated from Seller’s funds for
services provided to Seller. Seller will not engage any agents other than its attorneys, auditors
and other professionals, and a Servicer as contemplated by this Agreement for the Receivables Pool,
which Servicer will be fully compensated for its services by payment of the Servicer’s Fee and a
manager, which manager will be fully compensated from Seller’s funds;
(g) Seller will not incur any material indirect or overhead expenses for items shared with
Feed (or any other Originator or Affiliate thereof) which are not reflected in the Servicer’s Fee.
To the extent, if any, that Seller (or any other Affiliate thereof) shares items of expenses not
reflected in the Servicer’s Fee or the manager’s fee, such as legal, auditing and other
professional services, such expenses will be allocated to the extent practical on the basis of
actual use or the value of services rendered, and otherwise on a basis reasonably related to the
actual use or the
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value of services rendered, it being understood that Feed shall pay all expenses relating to the
preparation, negotiation, execution and delivery of the Transaction Documents, including, without
limitation, legal and other fees;
(h) Seller will pay fair market rent for any office space shared with any Originator and a
fair share of any overhead costs. Seller’s operating expenses will not be paid by Feed, any other
Originator or any Affiliate thereof. Seller shall pay from its own separate assets all material
liabilities incurred by it, including the wages and salaries of its officers and all material
administrative expenses. Seller will reimburse the applicable Originator for its allocable
portions of any shared expenses;
(i) Seller will have its own stationery and an address and telephone number separate and
distinct from the address and telephone number of any of the Originators. Seller will continue to
conduct its business solely in its own name so as not to mislead others as to the identity of
Seller. All oral and written communications, including without limitation letters, invoices,
purchase orders, contracts, statements and applications, shall be made solely in the name of Seller
if related to Seller, or an Originator if related to such Originator, and shall not be made in the
name of Seller if related to an Originator or the name of an Originator if related to Seller;
(j) Seller maintains and will maintain separate corporate records, documents and books of
accounting from those of Feed, any other Originator or any other entity, and keeps and will keep
correct and complete books and records of account and minutes of the meetings and other proceedings
of its members and the Board of Managers;
(k) Seller will maintain separate financial statements from the Originators. All financial
statements of LOL, Feed or any Affiliate thereof that are Consolidated to include Seller will
contain appropriate footnotes or will otherwise disclose that (A) the Receivables and Related
Rights have been sold (or contributed) to Seller pursuant to the Purchase and Sale Agreement, and
(B) Seller is a separate entity with creditors who have received security interests in Seller’s
assets;
(l) Seller’s assets will be maintained in a manner that facilitates their identification and
segregation from those of Feed, any other Originator or any other Affiliate thereof;
(m) Seller will strictly observe corporate formalities in its dealings with Feed, the other
Originators or any Affiliates thereof, and funds or other assets of Seller will not be commingled
with those of Feed, any other Originator or any Affiliate thereof. Seller shall not maintain joint
bank accounts or other depository accounts to which Feed, any other Originator or any Affiliate
thereof (other than Feed in its capacity as Servicer) has independent access;
(n) Seller will maintain arms’-length relationships with Feed, each other Originator and any
Affiliate thereof. Any Person that renders or otherwise furnishes services to Seller will be
compensated by Seller at market rates for such services it renders or otherwise furnishes to
Seller. Neither Seller nor Feed will guaranty, assume any obligations of or will hold itself out
to be responsible for the debts of or the decisions or actions respecting the daily business and
affairs of (i) in the case of Seller, Feed or any other Originator and (ii) in the case of Feed,
Seller. Seller
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and Feed will immediately correct any known misrepresentation with respect to the foregoing, and
they will not operate or purport to operate as an integrated single economic unit with respect to
each other or in their dealing with any other entity; and
(o) Seller (i) will act solely in its own name and through its duly authorized officers or
agents in the conduct of its businesses, (ii) will take no action which may mislead third parties
as to the separate corporate identities and separate assets and liabilities of each Originator and
Seller, and (iii) will have and utilize its own invoices and letterhead separate from any
Originator.
Without limiting the foregoing, LOL and Seller agree to take all actions necessary to ensure
that the corporate separateness assumptions, statements and representations set forth in Exhibit
7.4 attached hereto are and shall at all times remain true and correct.
ARTICLE VIII. ADMINISTRATION AND COLLECTION
SECTION 8.1. Designation of Servicer and Sub-Servicers.
(a) LOL as Initial Servicer. The servicing, administering and collection of the Pool
Receivables shall be conducted by the Person designated as Servicer hereunder (the term
“Servicer”, as used herein, shall include any such successor Servicer) from time to time in
accordance with this Section 8.1. Until the Administrator gives to LOL a Successor Notice,
LOL is hereby designated as, and hereby agrees to perform the duties and obligations of, Servicer
pursuant to the terms hereof.
(b) Successor Notice; Servicer Transfer Events. Upon LOL’s receipt of notice from the
Administrator of the Administrator’s designation of a new Servicer (a “Successor Notice”),
LOL agrees that it will terminate its activities as Servicer hereunder in a manner that the
Administrator reasonably believes will facilitate the transition of the performance of such
activities to the new Servicer, and the new Servicer shall assume each and all of LOL’s obligations
to service and administer such Pool Receivables, on the terms and subject to the conditions herein
set forth, and LOL and each of the Sub-Servicers shall use its best efforts to assist the new
Servicer in assuming such obligations. The Administrator agrees not to give LOL a Successor Notice
until after the occurrence and during the continuance of a Servicer Default or a Termination Event
(any such Servicer Default or Termination Event being herein called a “Servicer Transfer
Event”), in which case such Successor Notice may be given at any time in the Administrator’s
discretion. Any successor Servicer designated by the Administrator pursuant to this Section
8.1 must be either: (1) CoBank or an Affiliate; (2) a recognized commercial entity that
regularly engages in the business of accounts receivable collections and servicing on a fee basis
or (3) so long as LOL does not object for substantial substantive commercial reasons, any other
Person named by CoBank.
(c) Resignation. LOL acknowledges that the Administrator and the Purchasers have
relied on LOL’s agreement to act as Servicer hereunder in making their decision to execute and
deliver this Agreement. Accordingly, LOL agrees that it will not voluntarily resign as Servicer.
(d) Subcontracts. Servicer may, with the prior consent of the Administrator,
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subcontract with any Person for servicing, administering or collecting the Pool Receivables (each,
a “Sub-Servicer”); provided that (i) such Sub-Servicer shall agree in writing to
perform the duties and obligations of the Servicer pursuant to the terms hereof; (ii) Servicer
shall remain primarily liable for the performance of the duties and obligations of Servicer
pursuant to the terms hereof, (iii) Seller, the Administrator and the Purchasers shall have the
right to look solely to the Servicer for performance, (iv) any such subcontract may be terminated
at the option of the Administrator upon the occurrence of a Servicer Transfer Event, but in any
event shall be terminated automatically and without necessity of additional notice in the event the
Administrator shall give to LOL a Successor Notice, and (v) Servicer shall, and by its execution
hereof does, unconditionally guaranty the payment and performance of any and all obligations and
liabilities of the Sub-Servicers (or any Sub-Servicer) and any other Person designated by the
Servicer under this Section 8.1(d) for servicing, administering or collecting the Pool
Receivables.
(e) Servicing Programs. In the event that Servicer uses any software program in
servicing the Pool Receivables that it licenses from a third party, Servicer shall use its
reasonable efforts to obtain whatever licenses or approvals are necessary to allow the
Administrator or the new Servicer to use such program.
SECTION 8.2. Duties of Servicer.
(a) Appointment; Duties in General. Each of Seller, the Purchasers and the
Administrator hereby appoints Servicer as its agent, as from time to time designated pursuant to
Section 8.1, to enforce its rights and interests in and under the Pool Assets. Servicer shall take
or cause to be taken all such actions as may be necessary or advisable to collect each Pool
Receivable from time to time, all in accordance with Applicable Law, with reasonable care and
diligence and in accordance with each applicable Credit and Collection Policy.
(b) Allocation of Collections; Segregation. Servicer shall set aside (or, if
applicable, otherwise provide for its availability on the next Settlement Date) for the account of
Seller and the Purchasers their respective Pro Rata Shares of the Collections of Pool Receivables
in accordance with Section 1.3. Servicer shall segregate and deposit in immediately
available funds into the Administrator’s Account, the Purchasers’ Share of Collections (to the
extent required to be deposited therein pursuant to Section 1.3), not later than the second
(2nd) Business Day following receipt by Servicer of such Collections.
(c) Modification of Receivables. So long as no Termination Event or Unmatured
Termination Event shall have occurred and be continuing, Servicer may (i) in accordance with any
applicable Credit and Collection Policy or with the Administrator’s prior written consent, extend
the time for payment of any Defaulted Receivable (but in no event to a date later than the time
periods specified in clause (n) of the definition of Eligible Receivables); provided that
the aggregate Unpaid Balance of all Pool Receivables that have been extended during any Settlement
Period, shall not exceed two percent (2%) of the aggregate Unpaid Balance of all Pool Receivables
as at the Cut-Off Date for such Settlement Period and (ii) adjust the Unpaid Balance of any
Receivable to reflect the reductions or cancellations described in the first sentence of
Section 3.2(a).
(d) Documents and Records. Seller shall deliver to Servicer, and Servicer shall hold
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in trust for Seller and the Purchasers in accordance with their respective interests, all
documents, instruments and records (including, without limitation, computer tapes or disks) that
evidence or relate to Pool Receivables.
(e) Servicer Reports; Certain Duties to Seller. Servicer shall prepare and timely
deliver to the Administrator the Servicer Reports and the Monthly Reports in accordance with
Sections 3.1(a) and 7.2(a), respectively. In addition, Servicer shall, as soon as
practicable following receipt, turn over to Seller the collections of any receivable which is not a
Pool Receivable. Seller hereby directs Servicer to pay any collections of any Reconveyed
Receivable directly to the related Originator to be applied pursuant to the Purchase and Sale
Agreement. Servicer shall, as soon as practicable upon demand, deliver to Seller copies of
documents, instruments and records in its possession that evidence or relate to Pool Receivables.
(f) Termination. Servicer’s authorization under this Agreement shall terminate upon
the Final Payout Date.
(g) Power of Attorney. Seller hereby grants to Servicer an irrevocable power of
attorney, with full power of substitution, coupled with an interest, to take in the name of Seller
all steps which are necessary or advisable to endorse, negotiate or otherwise realize on any
writing or other right of any kind held or transmitted by Seller or transmitted or received by the
Purchasers (whether or not from Seller) in connection with any Receivable. Notwithstanding
anything to the contrary contained herein, the Administrator may direct the Servicer to commence or
settle any legal action to enforce collection of any Pool Receivable or to foreclose upon or
repossess any Related Security; provided, however, that no such direction may be
given unless either (i) a Termination Event has occurred or (ii) the Administrator believes is good
faith that failure to commence, settle, or effect such legal action, foreclosure or repossession,
could adversely affect Receivables constituting a material portion of the Pool Receivables.
(h) Servicer Default. The occurrence of either of the following shall constitute a
“Servicer Default”:
(i) At any time while LOL is acting as Servicer hereunder, LOL shall fail to comply
with any of the financial covenants in the XX Xxxxxx Credit Documents on or as of any date
on or as of which such compliance is required under the applicable XX Xxxxxx Credit
Document(s), in each case as in effect on the Initial Purchase Date; or
(ii) An event of default shall occur under and continue to exist beyond any grace or
cure period applicable thereto under any instrument or agreement evidencing, securing or
providing for the issuance of indebtedness for borrowed money in excess of $10,000,000 (then
outstanding) of, or guaranteed by, LOL or any Subsidiary, which event of default is either a
payment default or has resulted in acceleration of the maturity of such indebtedness; or any
default under any agreement or instrument relating to the purchase of receivables at any one
time outstanding in excess of $10,000,000 of LOL or any Subsidiary thereof (other than this
Agreement), if the effect of such default is to terminate, or permit the termination of, the
commitment of any party to such agreement or instrument to purchase receivables or the right
of LOL or such Subsidiary to reinvest in receivables the principal amount paid by any party
to such agreement or instrument for
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an interest in receivables; or if Servicer (or any Sub-Servicer) shall fail to make any
payment in respect of any Indebtedness of Servicer (or any Sub-Servicer), as the case may
be, having a principal amount in excess of $10,000,000 as of the date of such failure, and
such failure to make such payment shall continue for more than the grace period, if any,
applicable thereto or otherwise shall entitle the holder of such Indebtedness to accelerate
the Servicer’s (or Sub-Servicer’s) obligations thereunder; or
(iii) An event or circumstance which would give rise to a Termination Event (as opposed
to an Unmatured Termination Event) shall have occurred and be continuing, regardless of
whether a Termination Event is declared.
SECTION 8.3. Rights of Administrator.
(a) Notice to Obligors. At any time after the occurrence and during the continuance
of a Termination Event or a LOL Downgrade, the Administrator may notify the Obligors of Pool
Receivables, or any of them, of the ownership of the Receivable Interest by the Administrator, for
the benefit of the Purchasers.
(b) Notice to Lockbox Banks. At any time following the earlier to occur of (i) the
occurrence and continuance of a Termination Event, and (ii) the commencement of the Termination
Period, the Administrator is hereby authorized to give notice to the Lockbox Banks, as provided in
the Lockbox Agreements, of the transfer to the Administrator of dominion and control over the
Lockboxes and Lockbox Accounts. Seller hereby transfers to the Administrator the exclusive
dominion and control over such Lockboxes and Lockbox Accounts, and shall take any further action
that the Administrator may reasonably request to effect such transfer. Any proceeds of Pool
Receivables received by the Seller, Servicer or any Sub-Servicer thereafter shall be sent
immediately to the Administrator.
(c) Rights on Servicer Transfer Event. At any time following the designation of a
Servicer other than LOL or another Originator pursuant to Section 8.1 or during the
occurrence and continuance of a LOL Downgrade:
(i) The Administrator may direct the Obligors of Pool Receivables, or any of them, to
pay all amounts payable under any Pool Receivable directly to the Administrator or its
designee;
(ii) Pursuant to Section 8.2(d)(ii) of the Purchase and Sale Agreement, the
Administrator may instruct the Originators to give notice of such ownership to each said
Obligor and direct that payments be made directly to the Administrator or its designee;
(iii) LOL and Seller shall, at the Administrator’s request, (A) assemble all of the
documents, instruments and other records (including, without limitation, computer programs
(subject to licensing restrictions), tapes and disks which evidence the Pool Receivables and
the related Contracts and Related Security, or which are otherwise necessary or desirable to
collect such Pool Receivables and make the same available to the Administrator at a place
selected by the Administrator, and (B) segregate all cash, checks and other instruments
received by it from time to time constituting Collections in
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a manner acceptable to the Administrator and promptly upon receipt, remit all such cash,
checks and instruments, duly endorsed or with duly executed instruments of transfer, to the
Administrator; and
(iv) Seller and each of the Purchasers hereby authorizes the Administrator, and grants
to the Administrator an irrevocable power of attorney, to take any and all steps in Seller’s
name and on behalf of Seller and the Purchasers which are necessary or desirable, in the
reasonable determination of the Administrator, to collect all amounts due under any and all
Pool Receivables including, without limitation, endorsing Seller’s name on checks and other
instruments representing Collections and enforcing such Pool Receivables and the related
Contracts.
SECTION 8.4. Responsibilities of Seller. Anything herein to the contrary
notwithstanding:
(a) Contracts. Seller shall perform, or cause an Originator to perform under the
Purchase and Sale Agreement, all of its obligations under the Contracts related to the Pool
Receivables and under the other agreements related thereto to the same extent as if the Receivable
Interest had not been sold hereunder, and the exercise by the Administrator or its designee of its
rights hereunder shall not relieve Seller from such obligations.
(b) Limitation of Liability. Neither the Administrator nor any of the Purchasers
shall have any obligation or liability with respect to any Pool Receivables, the related Contracts
or any other related agreements, nor shall any of them be obligated to perform any of the
obligations of Seller or any Originator thereunder.
SECTION 8.5. Further Action Evidencing Purchases and Reinvestments.
(a) Further Assurances. The Seller shall, at its expense, take all action necessary
or desirable to establish and maintain, free and clear of any Lien, a valid and enforceable
first-priority perfected undivided percentage ownership interest, to the extent of the Receivable
Interest, in the Pool Assets in favor of the Administrator, for the benefit of the Purchasers.
Without limiting the generality of the foregoing, Seller will, upon the request of the
Administrator or its designee, 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 evidence or perfect the interest described in the previous sentence.
(b) Data Processing Records. Each of LOL and Seller will xxxx its master data
processing records evidencing the Pool Receivables with a legend, acceptable to the Administrator,
evidencing that the Receivable Interest has been sold in accordance with this Agreement.
(c) Additional Financing Statements; Performance by Administrator. Seller hereby
authorizes the Administrator or its designee to file one or more financing or continuation
statements, and amendments thereto and assignments thereof, relative to all or any portion of the
Receivable Interest now existing or hereafter arising in the name of Seller. If Seller or LOL
fails to perform any of its agreements or obligations under this Agreement, the Administrator or
its
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designee may (but shall not be required to), after notice to Seller or LOL and a reasonable
opportunity for Seller or LOL to perform (unless immediate action is reasonably required to protect
the interests of the Administrator or the Purchasers), itself perform, or cause performance of,
such agreement or obligation, and the expenses of the Administrator or its designee incurred in
connection therewith shall be payable by Seller or LOL as the case may be.
(d) Continuation Statements; Opinion. Without limiting the generality of subsection
(c), Seller will, not earlier than six (6) months and not later than three (3) months prior to the
fifth (5th) anniversary of the date of filing of each financing statement filed pursuant
to this Agreement or the Existing Receivables Purchase Agreement or in connection with any Purchase
hereunder or thereunder, unless the Final Payout Date shall have occurred: (i) execute and deliver
and file or cause to be filed an appropriate continuation statement with respect to such financing
statement; and (ii) deliver or cause to be delivered to the Administrator an opinion of the counsel
for Seller, in form and substance reasonably satisfactory to the Administrator, confirming and
updating the opinion delivered pursuant to Section 5.1(f) with respect to perfection and otherwise
to an enforceable and perfected ownership or security interest, subject to no other liens of record
except as provided herein or otherwise permitted hereunder.
SECTION 8.6. Application of Collections. Any payment by an Obligor in respect of any
indebtedness owed by it to Seller shall, except as otherwise specified by such Obligor, required by
the underlying Contract or law or unless the Administrator instructs otherwise, be applied, first,
as a Collection of any Pool Receivable or Receivables then outstanding of such Obligor in the order
of the age of such Pool Receivables, starting with the oldest of such Pool Receivable and, second,
to any other indebtedness of such Obligor.
ARTICLE IX. SECURITY INTEREST
SECTION 9.1. Grant of Security Interest. To secure all obligations of Seller owing
to the Secured Parties arising in connection with this Agreement and each other Transaction
Document, whether now or hereafter existing, due or to become due, direct or indirect, or absolute
or contingent, including, without limitation, all Indemnified Amounts, payments on account of
Collections of Pool Receivables received or deemed to be received and fees due under the
Transaction Documents, Seller hereby assigns and grants to Administrator, for the benefit of the
Secured Parties, a security interest in all of Seller’s right, title and interest (including
specifically, but without limitation, any undivided interest retained by Seller hereunder) now or
hereafter existing in, to and under all the Pool Assets. In connection with the foregoing, Seller
hereby acknowledges and agrees that Administrator shall be entitled at any time to enforce the
Seller’s rights under the Purchase and Sale Agreement.
SECTION 9.2. Further Assurances. The provisions of Section 8.5 shall apply
to the security interest granted under Section 9.1 as well as to the Purchases,
Reinvestments and the Receivable Interest hereunder.
SECTION 9.3. Remedies. Upon the occurrence and during the continuance of a
Termination Event, the Administrator and the Purchasers shall have, with respect to the collateral
granted pursuant to Section 9.1, and in addition to all other rights and remedies available
to the
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Purchasers or the Administrator under this Agreement, each of the other Transaction Documents or
other Applicable Law, all the rights and remedies of a secured party upon default under the UCC.
ARTICLE X. TERMINATION EVENTS
SECTION 10.1. Termination Events. The following events shall be “Termination Events”
hereunder:
(a) (i) Servicer (if LOL or any Affiliate is the Servicer) or any Sub-Servicer shall fail to
perform or observe any material term, covenant or agreement that is an obligation of Servicer
hereunder (other than as referred to in clause (ii) next following) and such failure shall remain
unremedied for more than seven (7) Business Days, or (ii) Seller or Servicer (if LOL or Affiliate
is Servicer) shall fail to make any payment of Capital or Yield within two (2) Business Days, or,
in the case of any other payment or deposit required to be made by it hereunder, within five (5)
Business Days, of when first due and payable hereunder; or
(b) Any representation or warranty made or deemed to be made by Seller, LOL, individually or
in its capacity as Servicer, or any other Originator, under or in connection with this Agreement,
any other Transaction Document, or any Servicer Report, Monthly Report or other information or
report delivered pursuant hereto shall prove to have been false or incorrect in any material
respect when made and, but only to the extent such breached representation or warranty is
susceptible to cure, shall remain uncured for ten (10) Business Days; or
(c) Seller, LOL (other than in its capacity as Servicer) or any other Originator shall fail to
perform or observe any other term, covenant or agreement contained in (i) this Agreement; (ii) any
other Transaction Document or (iii) any other material agreement with, or other undertaking in
favor of, CoBank or any of the Purchasers, to be performed or observed on the part of Seller, LOL
or such Originator (as the case may be) and any such failure shall remain unremedied for fifteen
(15) Business Days after written notice thereof shall have been given by the Administrator, CoBank
or such Purchaser, as the case may be, to the applicable non-performing party (but, in the case of
clause (iii) only, only to the extent such failure would result in the occurrence of a Material
Adverse Effect); or
(d) Seller or any Originator shall fail to make any payment in respect of any Indebtedness
having an aggregate principal (or equivalent) amount in excess of $10,000,000, when and as the same
shall become due and payable (giving effect to any applicable grace or cure periods); or
(e) Any event or condition occurs that results in any Indebtedness of Seller or any Originator
having an aggregate principal (or equivalent) amount in excess of $10,000,000 becoming due prior to
its scheduled maturity or that requires the prepayment, repurchase, redemption or defeasance
thereof, prior to its scheduled maturity; or
(f) There shall occur a Servicer Default; or
(g) This Agreement or any Purchase or any Reinvestment pursuant to this Agreement
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shall for any reason (other than pursuant to the terms hereof) (i) cease to create, or the
Receivable Interest shall for any reason cease to be, a valid and enforceable perfected undivided
percentage ownership interest, to the extent of the Receivable Interest, in each Pool Asset, free
and clear of any other Lien or (ii) cease to create with respect to the items described in
Section 9.1, or the interest of the Administrator (for the benefit of the Purchasers) with
respect to such items shall cease to be, a valid and enforceable first-priority perfected security
interest, free and clear of any other Lien; or
(h) An Event of Bankruptcy shall have occurred and remain continuing with respect to
Seller, LOL, or any other Originator; or
(i) The 12-month rolling average Sales Based Dilution Ratio for any Cut-Off Date exceeds
twelve percent (12%); or
(j) The 12-month rolling average Sales Based Default Ratio for any Cut-Off Date exceeds six
percent (6%); or
(k) The monthly Sales Based Default Ratio for any Cut-Off Date exceeds ten percent
(10%); or
(l) On any Settlement Date or any Purchase Date, after giving effect to the payments or
distributions made (or, in the case of any Payment Date, after giving pro forma effect to such
payments or distributions to be made as of the next succeeding Settlement Date, as specified in
Section 3.1(c)) under Section 3.1(c), the Receivable Interest exceeds the
Allocation Limit; or
(m) The 12-month rolling average Sales Based Delinquency Ratio for any Cut-Off Date is
greater than six percent (6%); or
(n) The monthly Sales Based Delinquency Ratio for any Cut-Off Date exceeds ten percent
(10%); or
(o) There shall remain in force, undischarged, unsatisfied and unstayed, for more than five
(5) Business Days with respect to the Seller or thirty (30) days with respect to LOL or any other
Originator, as applicable, whether or not consecutive, any final judgment against the Seller, LOL
or any other Originator, or any of their respective properties or assets, that, individually or
taken together with all other final judgments so undischarged, unsatisfied and unstayed against any
such Person or Persons or any of their respective assets or properties has caused, or has a
reasonable possibility of causing, a Material Adverse Effect; or
(p) (a) LOL shall cease to own at least eighty percent (80%) of the equity interests in Feed,
(b) Feed shall cease to own at least eighty percent (80%) of the equity interests in Purina, (c)
Feed shall cease to own one hundred percent (100%) of the equity interests in Seller, (d) LOL shall
cease to own at least eighty percent (80%) of the equity interest in Winfield or (e) LOL subject
to a Change in Control; or
(q) The Internal Revenue Service shall file notice of a Lien pursuant to Section 6323 of the
Internal Revenue Code with regard to any of the assets of Seller, LOL or any other
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Originator and such Lien shall not have been stayed or bonded in a manner satisfactory in the sole
discretion of the Administrator, or released within ten (10) Business Days, or the Pension Benefit
Guaranty Corporation shall file notice of a Lien pursuant to Section 4068 of the Employee
Retirement Income Security Act of 1974 with regard to any of the assets of Seller, LOL or any other
Originator and such Lien shall not have been released within five (5) Business Days; or
(r) There shall exist any other event or occurrence that has caused, or could reasonably be
anticipated to cause, a Material Adverse Effect; or
(s) Seller’s net worth is less than $1,000,000 at any time; or
(t) The Credit Agreement described in the definition of “XX Xxxxxx Credit Documents,” or any
replacement credit facility acceptable to the Administrator, shall have been terminated or shall
otherwise cease to be in full force and effect; or
(u) Any Originator elects at any time not to sell or contribute Receivables to Seller in
accordance with Section 1.2(b) of the Purchase and Sale Agreement.
SECTION 10.2. Remedies.
(a) Optional Liquidation. Upon the occurrence of a Termination Event (other than a Termination
Event described in subsection (h) of Section 10.1), the Administrator shall, at the request, or may
with the consent, of the Required Purchasers, by notice to Seller, declare the Purchase Termination
Date to have occurred and the Termination Period to have commenced.
(b) Automatic Liquidation. Upon the occurrence of a Termination Event described in subsection
(h) of Section 10.1, the Purchase Termination Date shall occur and the Termination Period shall
commence automatically.
(c) Additional Remedies. Upon any Purchase Termination Date occurring pursuant to this Section
10.2, no Purchases or Reinvestments thereafter will be made, and the Administrator and each of the
Purchasers shall have, in addition to all other rights and remedies under this Agreement or
otherwise, all other rights and remedies provided under the UCC of each applicable jurisdiction and
other Applicable Law, which rights shall be cumulative.
ARTICLE XI. THE ADMINISTRATOR
SECTION 11.1. Authorization.
(a) The Administrator is authorized to take such action on behalf of each of the Purchasers
and to exercise all such powers as are hereunder and under any of the other Transaction Documents
and any related documents delegated to the Administrator, together with such powers as are
reasonably incident thereto; provided that no duties or responsibilities not expressly assumed
herein or therein shall be implied to have been assumed by the Administrator. In addition to the
foregoing, the Administrator is hereby expressly authorized and directed by each of the Purchasers
to enter into the Intercreditor Agreement for and on behalf of such purchaser.
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(b) The relationship between the Administrator and each of the Purchasers is that of an
independent contractor. The use of the term “Administrator” is for convenience only and is used to
describe, as a form of convention, the independent contractual relationship between the
Administrator and each of the Purchasers. Nothing contained in this Agreement nor the other
Transaction Documents shall be construed to create an agency, trust or other fiduciary relationship
between the Administrator and any of the Purchasers.
(c) As an independent contractor empowered by the Purchasers to exercise certain rights and
perform certain duties and responsibilities hereunder and under the other Transaction Documents,
the Administrator is nevertheless a “representative” of the Purchasers, as that term is defined in
Article 1 of the UCC, for purposes of actions for the benefit of the Purchasers and the
Administrator with respect to all collateral security and other matters contemplated by the
Transaction Documents that are or may be governed by or subject to the UCC. Such actions include
the designation of the Administrator as “secured party”, “mortgagee” or the like on all financing
statements and other documents and instruments, whether recorded or otherwise, relating to the
attachment, perfection, priority or enforcement of any security interests intended to secure the
payment or performance of any of the obligations arising under the Transaction Documents, all for
the benefit of the Purchasers and the Administrator.
(d) The Administrator may exercise its powers and execute its duties by or through employees
or agents and shall be entitled to take, and to rely on, advice of counsel concerning all matters
pertaining to its rights and duties under this Agreement and the other Transaction Documents. The
Administrator may utilize the services of such Persons as the Administrator in its sole discretion
may reasonably determine, and all reasonable fees and expenses of any such Persons shall be paid by
the Seller as contemplated by Section 14.5 hereof.
SECTION 11.2. Administrator’s Reliance, Etc. The Administrator and its directors, officers,
agents or employees shall not be liable for any action taken or omitted to be taken by it or them
under or in connection with the Transaction Documents (including, without limitation, the
servicing, administering or collecting of Pool Receivables as Servicer pursuant to Section 8.1),
except for its or their own gross negligence or willful misconduct. Without limiting the generality
of the foregoing, the Administrator: (a) may consult with legal counsel (including counsel for
Seller), independent certified public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (b) makes no warranty or representation to the
Purchasers or any other holder of any interest in Pool Receivables and shall not be responsible to
the Purchasers or any such other holder for any statements, warranties or representations made in
or in connection with any Transaction Document; (c) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or conditions of any
Transaction Document on the part of Seller, LOL, or any other Originator or to inspect the property
(including the books and records) of Seller, LOL, or any other Originator; (d) shall not be
responsible to the Purchasers or any other holder of any interest in Pool Receivables for the due
execution,
legality, validity, enforceability, genuineness, sufficiency or value of any Transaction
Document; and (e) shall incur no liability under or in respect of this
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Agreement by acting upon any notice (including notice by telephone), consent, certificate or other
instrument or writing (which may be by facsimile or telex) believed by it to be genuine and signed
or sent by the proper party or parties.
SECTION 11.3. CoBank and Affiliates. Each of Seller and LOL hereby acknowledges and agrees
that CoBank and any of its Affiliates may generally engage in any kind of business with Seller,
LOL, any other Originator or any Obligor, any of their respective Affiliates and any Person who may
do business with or own securities of Seller, LOL, any other Originator or any Obligor or any of
their respective Affiliates, all as if CoBank were not the Administrator, and without any duty to
account therefor to the Purchasers or any other holder of an interest in Pool Receivables.
ARTICLE XII. ASSIGNMENT OF AND PARTICIPATIONS IN PURCHASERS’
INTERESTS
INTERESTS
SECTION 12.1. Restrictions on Assignments; Impact on Patronage.
(a) (i) Neither Seller nor LOL may assign its rights, or delegate its duties, hereunder or any
interest herein without the prior written consent of the Administrator. No Purchaser may assign
its rights hereunder (although it may delegate its duties hereunder as expressly indicated herein)
or the Receivable Interest (or any portion thereof) to any Person without the prior written consent
of Seller, which consent shall not be unreasonably withheld or delayed; provided, however, that
upon written notice to Seller, the Servicer and the Administrator, any Purchaser may assign all of
its rights and interests in the Transaction Documents, together with all its interest in the
Receivable Interest, to (A) any other Purchaser or any Affiliate thereof, or (B) to any “bankruptcy
remote,” special purpose entity the business of which is administered by any other Purchaser or any
Affiliate thereof, so long as such entity has the ability to fund the Receivable Interest. If any
Purchaser notifies Seller and LOL that it has decided to assign its rights and delegate its duties
hereunder, in compliance with the foregoing provisions of this subsection (a)(i), Seller and LOL
hereby agree to enter into such amendments hereto and to the other Transaction Documents as the
Administrator may reasonably request to reflect such assignment and delegation.
(ii) With respect to any patronage payments, each of Seller and the Servicer
acknowledges and agrees that:
(A) only that portion of the Capital represented by CoBank’s individual Pro
Rata Share that is retained by CoBank for its own account is entitled to patronage
distributions in accordance with CoBank’s bylaws and its practices and procedures
related to patronage distributions; and
(B) any patronage, or similar, payments to which Seller or the Servicer is
entitled on account of its ownership of Bank Equity Interests or otherwise will not
be based on any portion of CoBank’s interest in the Capital in which CoBank has at
any time granted a participation interest.
(b) Seller agrees to advise the Administrator, within ten (10) Business Days after
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written notice to Seller, of any proposed assignment by any Purchaser of the Receivable Interest
(or any portion thereof) not otherwise permitted under Section 12.1(a) of Seller’s consent or
withholding of such assignment and, if Seller does not consent, the reasons therefor. If Seller
does not respond in such time period, Seller shall be deemed to have consented to such assignment.
All of the aforementioned assignments shall be upon such terms and conditions as such Purchaser and
the relevant assignee may mutually agree.
SECTION 12.2. Rights of Assignee. Upon the assignment by any Purchaser in accordance with
this Article XII, the assignee receiving such assignment shall have all of the rights of a
Purchaser with respect to the Transaction Documents and the Receivable Interest (or such portion
thereof as has been assigned).
SECTION 12.3. Participations.
(a) Each Purchaser may sell participations to one or more Persons in all or a portion of such
Purchaser’s rights and obligations under this Agreement and the other Transaction Documents;
provided that any such sale or participation shall not affect the rights and duties of the selling
Purchaser hereunder.
(b) All Persons (“Voting Participants”) who (i) have directly, purchased a participation
interest in the amount of $10,000,000.00 or more in a Purchaser’s Pro Rata Share of the Receivables
Interest and (ii) have been designated in writing to Seller, Servicer and the Administrator as
having such entitlement (as evidenced by their name and dollar participation amount appearing on
Schedule 12.3(b) hereto, as such Schedule 12.3(b) may be modified by the Administrator from time to
time), shall be entitled to vote (and such Purchaser’s voting rights shall be correspondingly
reduced), on a dollar basis, as if such participant were a Purchaser, on any matter requiring or
allowing a Purchaser to provide or withhold its consent, or to otherwise vote on any proposed
action.
ARTICLE XIII. INDEMNIFICATION
SECTION 13.1. Indemnities.
(a) General Indemnity by Seller. Without limiting any other rights that any such Person may
have hereunder or under Applicable Law, Seller hereby agrees to indemnify the Administrator, each
of the Purchasers, each of their respective Affiliates, and all successors, permitted transferees,
participants and permitted assigns and all officers, directors, shareholders, controlling persons,
employees and agents of any of the foregoing (each an “Indemnified Party”), within thirty (30) days
after demand, from and against any and all damages, losses, claims, liabilities and related costs
and expenses, including reasonable attorneys’ fees 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 relating to the Transaction Documents or the ownership or funding of the
Receivable Interest or in respect of any Receivable or any Contract, excluding, however, (i)
Indemnified Amounts to the extent resulting from gross negligence or willful misconduct on the part
of such Indemnified Party or (ii) Indemnified Amounts that have the effect of recourse for
non-payment of the Pool Receivables due to credit problems of the Obligors; provided that Seller
shall be liable to each Indemnified
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Party for all representations, warranties, covenants and indemnities made by Seller pursuant to the
terms of this Agreement. Without limiting the foregoing, Seller shall indemnify each Indemnified
Party for Indemnified Amounts arising out of or relating to:
(xi) the transfer by Seller of any interest in any Pool Receivable
other than the transfer of a Receivable Interest to the Administrator, for the
benefit of the Purchasers, pursuant to this Agreement and the grant of a
security interest to the Administrator pursuant to Section9.1;
(xii) any representation or warranty made by Seller under or in
connection with any Transaction Document, any Servicer Report, any Monthly
Report or any other information or report delivered by or on behalf of Seller
pursuant hereto, which shall have been false, incorrect or misleading in any
respect when made or deemed made;
(xiii) the failure by Seller to comply with any Applicable Law, or the
nonconformity of any Pool Receivable or the related Contract with any
Applicable Law;
(xiv) the failure to vest and maintain vested in the
Administrator, for the benefit of the Purchasers, an undivided percentage
ownership interest, to the extent of the Receivable Interest, in the Pool
Assets, free and clear of any Lien, other than a Lien arising solely as a
result of an act of any Purchaser or the Administrator, whether existing at
the time of any Purchase or Reinvestment of such Receivable Interest or at any
time thereafter;
(xv) any failure to file, 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 Pool
Assets, whether at the time of any Purchase or Reinvestment or at any time
thereafter;
(xvi) any dispute, claim, offset or defense (other than discharge
in bankruptcy or payment) of the Obligor to the payment of any Receivable
included in the Net Pool Balance (including, without limitation, a defense
based on such Receivable or the related Contract not being a legal, valid and
binding obligation of such obligor enforceable against it in accordance with
its terms), or any other claim resulting from the sale of the merchandise or
services related to such Receivable or the furnishing or failure to furnish
such merchandise or services;
(xvii) any failure of Seller to perform its duties or obligations in accordance
with this Agreement or any Transaction Document;
(xviii) any products liability claim arising out of or in connection with
merchandise or services that are the subject of any Pool Receivable;
(xix) any litigation, proceedings or investigation against Seller; or
(xx) any tax or governmental fee or charge (but not including
taxes upon or measured by net income or representing a franchise or
unincorporated business tax of such Person), all interest and penalties
thereon or with respect thereto, and all out-of-pocket costs and expenses,
including the reasonable fees and expenses of
counsel in defending against the same, which may arise by reason of the purchase or ownership of
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any Receivable Interest, or any other interest in the Pool Receivables or in any goods
which secure any such Pool Receivables.
(b) Indemnity by Servicer. Without limiting any other rights that any such Person may have
hereunder or under Applicable Law, Servicer hereby agrees to indemnify each Indemnified Party,
within thirty (30) days after demand, from and against any and all Indemnified Amounts awarded
against or incurred by any of them arising out of or relating to (i) any representation or warranty
made by Servicer under or in connection with any Transaction Document, any Servicer Report, any
Monthly Report or any other information or report delivered by or on behalf of Servicer pursuant
hereto, which shall have been false, incorrect or misleading in any material respect when made or
deemed made, (ii) the failure by Servicer to comply with any Applicable Law, (iii) the failure of
Servicer to perform its duties or obligations in accordance with this Agreement or any Transaction
Document or (iv) the commingling by Servicer or any Sub-Servicer of any Collections with other
funds.
(c) After-Tax Basis. Indemnification hereunder shall be in an amount necessary to make the
Indemnified Party whole after taking into account any tax consequences to the Indemnified Party
attributable to the receipt of the indemnity provided hereunder, including the effect of such tax
or refund on the amount of tax measured by net income or profits which is or was payable by the
Indemnified Party.
(d) Contribution. If for any reason the indemnification provided above in this Section 13.1
is unavailable to an Indemnified Party or is insufficient to hold an Indemnified Party harmless,
then Seller or Servicer, as the case may be, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits received by such Indemnified Party on the one
hand and Seller or Servicer, as the case may be, on the other hand but also the relative fault of
such Indemnified Party as well as any other relevant equitable considerations.
ARTICLE XIV. MISCELLANEOUS
SECTION 14.1. Amendments, Etc. No amendment or waiver of any provision of this Agreement nor
consent to any departure by any party therefrom shall in any event be effective unless the same
shall be in writing and signed by (a) Seller, the Administrator, Servicer and the Required
Purchasers (with respect to an amendment) or (b) the Administrator and the Required Purchasers
(with respect to a waiver or consent by them) or Seller and Servicer (with respect to a waiver or
consent by them), as the case may be, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided, that no waiver of a
Termination Event shall be effective unless in writing and signed by the Administrator and the
Required Purchasers. Notwithstanding the foregoing or any other provision of this Agreement or any
Transaction Document to the contrary, no amendment or waiver of any provision of this Agreement,
nor any consent to any departure by any party therefrom, that would, or the effect of which would
be to, (x) other than as provided in Section 1.6, increase the Facility Limit or otherwise increase
the amount of, or extend the duration of (other than as the result of any waiver duly made under
this Agreement with respect to
any Termination Event or other event or circumstance that would otherwise have given rise to
the Purchase Termination Date), any Purchaser’s commitment to make any Purchase hereunder;
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(y) decrease the Yield Rate or the amount of any Fees payable to any Purchaser under the
Transaction Documents or (z) modify the definition of, or otherwise limit or alter the matters
subject to approval by, the Required Purchasers, shall be effective unless consented to in writing
by each Purchaser affected thereby.
SECTION 14.2. Notices, Etc. All notices and other communications provided for hereunder
shall, unless otherwise stated herein, be in writing (including facsimile communication) and shall
be personally delivered or sent by overnight delivery by a nationally recognized overnight delivery
service, by courier, or by facsimile (confirmed with a copy sent by overnight delivery), to the
intended party at the address or facsimile number of such party set forth under its name on
Schedule 14.2 or at such other address or facsimile number as shall be designated by such party in
a written notice to the other parties hereto. All such notices and communications shall be
effective, (a) if personally delivered or sent by express mail or courier, when received, and (b)
if transmitted by facsimile, one-half Business Day after being sent, receipt confirmed by telephone
or electronic means.
SECTION 14.3. No Waiver; Remedies. No failure on the part of the Administrator, any Affected
Party, any Indemnified Party, any Purchaser or any other holder of the Receivable Interest (or any
portion thereof) to exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 14.4. Binding Effect; Survival. This Agreement shall be binding upon and inure to the
benefit of Seller, Servicer, the Administrator, the Purchasers and their respective successors and
permitted assigns, and the provisions of Section 4.2 and Article XIII shall inure to the benefit of
the Affected Parties and the Indemnified Parties, respectively, and their respective successors and
permitted assigns; provided, however, nothing in the foregoing shall be deemed to authorize any
assignment not permitted by Section 12.1.
This Agreement shall create and constitute the continuing obligations of the parties hereto in
accordance with its terms, and shall remain in full force and effect until the Final Payout Date.
The rights and remedies with respect to any breach of any representation or warranty made by Seller
or pursuant to Article VI and the indemnification and payment provisions of Article XIII and
Sections 4.2, 14.5, 14.6, 14.7, 14.8 and 14.15 shall be continuing and shall survive any
termination of this Agreement.
SECTION 14.5. Costs, Expenses and Taxes. In addition to its obligations under Article XIII,
Seller or, to the extent applicable, LOL agrees to pay within ten (10) Business Days after demand;
(a) all costs and expenses incurred (i) by the Administrator or any Purchaser, or their
respective Affiliates, in connection with the negotiation, preparation, execution and delivery of,
and (ii) by the Administrator, any Purchaser and their respective
Affiliates, in connection with the enforcement after the occurrence of a Termination Event
against Seller, LOL or the other Originators, as the case may be, of, or any actual or claimed
breach by Seller, LOL or any other
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Originator, as the case may be, of, this Agreement and the other Transaction Documents, including,
without limitation (A) the reasonable fees and expenses of counsel to any of such Persons incurred
in connection with any of the foregoing or in advising such Persons as to their respective rights
and remedies under any of the Transaction Documents, and (B) all reasonable out-of-pocket expenses
(including reasonable fees and expenses of independent accountants incurred in connection with any
review of Seller’s, LOL’s or any other Originator’s, as the case may be, books and records either
prior to the execution and delivery hereof or pursuant to Section 7.1(c) or otherwise); and
(b) all stamp and other taxes and fees payable or determined to be payable in connection with
the execution, delivery, filing and recording of this Agreement or the other Transaction Documents,
and agrees to indemnify each Indemnified Party against any liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes and fees.
SECTION 14.6. No Proceedings.
(a) Seller, Servicer, each Sub-Servicer and CoBank (individually and as Administrator) each
hereby agrees that it will not institute against any Purchaser, or join any other Person in
instituting against Purchaser, any insolvency proceeding (namely, any proceeding of the type
referred to in the definition of Event of Bankruptcy) so long as any Capital shall be outstanding
or there shall not have elapsed one (1) year plus one (1) day since the last day on which any such
Capital shall have been outstanding.
(b) This Section 14.6 shall survive termination of this Agreement.
SECTION 14.7. Confidentiality of Program Information.
(a) Confidential Information. Each party hereto acknowledges that CoBank regards the structure
of the transactions contemplated by this Agreement to be proprietary, and each such party severally
agrees that:
(i) it will not disclose without the prior consent of CoBank or as is required or
authorized by the Transaction Documents (other than to the directors, employees, agents,
auditors, counsel or affiliates (collectively, “representatives”) of such party, each of
whom shall be informed by such party of the confidential nature of the Program Information
(as defined below) and of the terms of this Section 14.7), (A) any information regarding
the pricing in, or copies of, this Agreement or any transaction contemplated hereby, (B)
any information regarding the organization, business or operations of the Purchasers
generally or the services performed by the Administrator for Purchaser, or (C) any
information which is furnished by CoBank to such party and which is designated by CoBank to
such party in writing or otherwise as confidential or not otherwise available to the
general public (the information referred to in clauses (A), (B) and (C) is collectively
referred to as the “Program Information”); provided, however, that such party may disclose
any such Program Information: (I) to any other party to this Agreement for the purposes
contemplated hereby, (II) as may be required by any Governmental Authority having or
claiming to have jurisdiction over such
party, (III) in order to comply with Applicable Law, including, without limitation, by
filing the
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Transaction Documents with the Securities and Exchange Commission (provided that none of
Seller or LOL shall file the Fee Letter, or, if required by Applicable Law to file the Fee
Letter, Seller or LOL, as the case may be, shall request confidential treatment therefor)
or (IV) subject to subsection (c), in the event such party is legally compelled (by
interrogatories, requests for information or copies, subpoena, civil investigative demand
or similar process) to disclose any such Program Information;
(ii) it will use the Program Information solely for the purposes of evaluating,
administering and enforcing the transactions contemplated by this Agreement and making any
necessary business judgments with respect thereto; and
(iii) it will, upon demand, return (and cause each of its representatives to return)
to CoBank, all documents or other written material (other than documents executed by such
party) received from CoBank, as the case may be, in connection with (a)(i)(B) or (C) above
and all copies thereof made by such party which contain the Program Information.
(b) Availability of Confidential Information. This Section 14.7 shall be inoperative as to
such portions of the Program Information which are or become generally available to the public or
such party on a nonconfidential basis from a source other than CoBank or were known to such party
on a nonconfidential basis prior to its disclosure by CoBank.
(c) Legal Compulsion to Disclose. In the event that any party or anyone to whom such party or
its representatives transmits the Program Information is requested or becomes legally compelled (by
interrogatories, requests for information or documents, subpoena, civil investigative demand or
similar process) to disclose any of the Program Information, such party will, to the extent that it
may legally do so,
(i) provide CoBank with prompt written notice so that CoBank may seek a protective
order or other appropriate remedy and/or waive compliance with the provisions of this
Section 14.7; and
(ii) unless CoBank waives compliance by such party with the provisions of this Section
14.7, make a timely objection to the request or confirmation to provide such Program
Information on the basis that such Program Information is confidential and subject to the
agreements contained in this Section 14.7.
In the event that such protective order or other remedy is not obtained, or CoBank waives
compliance with the provisions of this Section 14.7, such party will furnish only that portion of
the Program Information which (in such party’s good faith judgment) is legally required to be
furnished and will exercise reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded the Program Information.
(d) Survival. This Section 14.7 shall survive termination of this Agreement.
SECTION 14.8. Confidentiality of Originator Information.
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(a) Confidential Information. Each party hereto (including, without limitation, any successor
Servicer) acknowledges that the Originators regard certain information to be proprietary, and each
such party severally agrees that:
(i) it will not disclose without the prior consent of LOL, or as is required or
authorized by the Transaction Documents (other than to the directors, employees, agents,
auditors, counsel or affiliates (collectively, “representatives”) of such party, each of
whom shall be informed by such party of the confidential nature of the Originator
Information (as defined below) and of the terms of this Section 14.8), any information
which is furnished by LOL, any other Originator or any of their respective Subsidiaries to
such party and which is designated by the applicable Originator to such party in writing or
otherwise as confidential or not otherwise available to the general public (“Originator
Information”); provided, however, that such party may disclose (any such disclosure which
identifies any Originator to include a reference to the confidentiality provisions hereof)
any such Originator Information (A) to any other party to this Agreement for the purposes
contemplated hereby or any Person that might become a party to the Agreement as
contemplated by Article XII of this Agreement, (B) as may be required by any Governmental
Authority having or claiming to have jurisdiction over such party, (C) in order to comply
with any Applicable Law, (D) subject to subsection (c), in the event such party is legally
compelled (by interrogatories, requests for information or copies, subpoena, civil
investigative demand or similar process) to disclose any such Program Information or
Originator Information, and (E) to any Affected Party; and
(ii) it will use the Originator Information solely for the purposes of evaluating,
administering and enforcing the transactions contemplated by this Agreement and the
Transaction Documents and making any necessary business judgments with respect thereto.
(b) Availability of Confidential Information. This Section 14.8 shall be inoperative as to
such portions of the Originator Information which are or become generally available to the public
or such party on a nonconfidential basis from a source other than the applicable Originator were
known to such party on a nonconfidential basis prior to its disclosure by such Originator.
(c) Legal Compulsion to Disclose. In the event that any party or anyone to whom such party or
its representatives transmits the Originator Information is requested or becomes legally compelled
(by interrogatories, requests for information or documents, subpoena, civil investigative demand or
similar process) to disclose any of the Originator Information, such party will, to the extent that
it may legally do so,
(i) provide Seller with prompt written notice so that it can notify such Originator
and such Originator may seek a protective order or other appropriate remedy and/or waive
compliance with the provisions of this Section 14.8; and
(ii) unless Seller waives compliance by such party with the provisions of this Section
14.8, make a timely objection to the request or confirmation to provide such Originator
Information on the basis that such Originator Information is confidential and subject to
the agreements contained in this Section 14.8.
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In the event that such protective order or other remedy is not obtained, or Seller waives
compliance with the provisions of this Section 14.8, such party will furnish only that portion of
the Originator Information which (in such party’s good faith judgment) is legally required to be
furnished and will exercise reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded the Originator Information.
(d) Survival. This Section 14.8 shall survive termination of this Agreement.
SECTION 14.9. Captions and Cross References. The various captions (including, without
limitation, the table of contents) in this Agreement are provided solely for convenience of
reference and shall not affect the meaning or interpretation of any provision of this Agreement.
Unless otherwise indicated, references in this Agreement to any Section, Appendix, Schedule or
Exhibit are to such Section of or Appendix, Schedule or Exhibit to this Agreement, as the case may
be, and references in any Section, subsection, or clause to any subsection, clause or subclause are
to such subsection, clause or subclause of such Section, subsection or clause.
SECTION 14.10. Integration. This Agreement and the other Transaction Documents contain a final
and complete integration of all prior expressions by the parties hereto with respect to the subject
matter hereof and shall constitute the entire understanding among the parties hereto with respect
to the subject matter hereof, superseding all prior oral or written understandings.
SECTION 14.11. Governing Law. THIS AGREEMENT, INCLUDING THE RIGHTS AND DUTIES OF THE PARTIES
HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
COLORADO (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF), EXCEPT TO THE EXTENT
THAT THE PERFECTION OF THE INTERESTS OF THE ADMINISTRATOR IN THE POOL ASSETS IS GOVERNED BY THE
LAWS OF THE JURISDICTION OTHER THAN THE STATE OF COLORADO; AND, NOTWITHSTANDING THE FOREGOING,
PROVIDED THAT ALL MATTERS CONCERNING THE RIGHTS OF THE ADMINISTRATOR AND THE PURCHASERS IN THE
TRANSFERRED RECEIVABLES, AND MORE GENERALLY, THE ISSUE OF WHETHER THE TRANSFERS OF THE INTERSTS IN
THE RECEIVABLES AND RELATED RIGHTS CONTEMPLATED IN THIS AGREEMENT CONSTITUTE TRUE SALES OR ABSOLUTE
TRANSFERS, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF MINNESOTA.
SECTION 14.12. Waiver Of Jury Trial. EACH OF THE PARTIES HERETO HEREBY EXPRESSLY WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS
AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED
OR WHICH MAY BE IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING OR
OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT AND
AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT A JURY TRIAL.
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SECTION 14.13. Consent To Jurisdiction; Waiver Of Immunities. EACH OF LOL AND SELLER HEREBY
ACKNOWLEDGES AND AGREES THAT:
(a) IT HEREBY IRREVOCABLY (i) SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF ANY COLORADO OR
UNITED STATES FEDERAL COURT SITTING IN COLORADO, OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY TRANSACTION DOCUMENT; (ii) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE OR UNITED STATES FEDERAL COURT; (iii) WAIVES,
TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING; (iv) CONSENTS TO THE SERVICE OF ANY AND ALL
PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO SUCH PERSON AT
ITS ADDRESS SPECIFIED IN SECTION 14.2; AND (v) TO THE EXTENT ALLOWED BY LAW, AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS
SECTION 14.13 SHALL AFFECT THE ADMINISTRATOR’S OR ANY PURCHASER’S RIGHT TO SERVE LEGAL PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO BRING ANY ACTION OR PROCEEDING AGAINST ANY OF SELLER OR LOL
OR ITS OR THEIR PROPERTY IN THE COURTS OF ANY OTHER JURISDICTIONS.
(b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM THE JURISDICTION OF
ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO
JUDGMENT, ATTACHMENT IN AID TO EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, IT HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER OR IN
CONNECTION WITH THIS AGREEMENT.
SECTION 14.14. Execution in Counterparts. This Agreement may be executed in any number of
counterparts and by the 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.
SECTION 14.15. No Recourse Against Other Parties. No recourse under any obligation, covenant
or agreement of any Purchaser contained in this Agreement shall be had against any stockholder
(solely in its capacity as stockholder), employee, officer, director, member or incorporator of
such Purchaser, provided, however, that nothing in this Section 14.15 shall relieve any of the
foregoing Persons from any liability which such Person may otherwise have for his/her or its gross
negligence or willful misconduct.
SECTION 14.16. Purchase and Sale Agreement. Each of LOL and Seller hereby acknowledges and
agrees that (a) all references in the Purchase and Sale Agreement and the other Transaction
Documents to the Receivables Purchase Agreement shall be deemed to refer to this Agreement, as this
Agreement may be amended, modified or supplemented from time to
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time and (b) the Purchase and Sale Agreement remains in full force and effect and is hereby
ratified and confirmed.
[SIGNATURE PAGES FOLLOW ON NEXT PAGE]
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective
officers thereunto duly authorized, as of the date first above written.
LOL SPV, LLC, | ||||||
as Seller | ||||||
By: | /s/ Xxxxxx Xxxxxxx | |||||
Name Printed: Xxxxxx Xxxxxxx | ||||||
Title: Sr. Vice President & CFO | ||||||
LAND O’LAKES, INC., | ||||||
as initial Servicer | ||||||
By: | /s/ Xxxxxx Xxxxxxx | |||||
Name Printed: Xxxxxx Xxxxxxx | ||||||
Title: Sr. Vice President & CFO | ||||||
COBANK, ACB, as a Purchaser and as | ||||||
Administrator | ||||||
By: | /s/ Xxxxxxx Xxxxxxxxxx | |||||
Name Printed: Xxxxxxx Xxxxxxxxxx | ||||||
Title: VP | ||||||
[Signature Page to Third Amended and Restated Receivables Purchase Agreement]
APPENDIX A
DEFINITIONS
This is Appendix A to the Third Amended and Restated Receivables Purchase Agreement dated as
of September 4, 2007 (the “Agreement”), among LOL SPV, LLC, as Seller, Land O’Lakes, Inc., as
initial Servicer, CoBank, ACB, and the other Persons from time to time party thereto as Purchasers
(the “Purchasers”), and CoBank, ACB, as Administrator (as amended, supplemented or otherwise
modified from time to time, the “Agreement”). Unless otherwise indicated, all Section, Exhibit and
Schedule references in this Appendix are to Sections of and Exhibits and Schedules to the
Agreement.
A. Defined Terms. As used in the Agreement, unless the context requires a different meaning,
the following terms have the meanings indicated below:
“Accounts” means all “accounts” as defined in the UCC.
“Administrator” has the meaning set forth in the preamble.
“Administrator’s Account” has the meaning set forth in Section 3.3(a).
“Administrator’s Office” means the office of the Administrator at 0000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000, or such other address as shall be designated by the
Administrator in writing to Seller and Purchasers.
“Affected Party” means each of the Purchasers, any assignee or participant of any Purchaser,
CoBank, any successor to CoBank as Administrator, and any sub-agent of the Administrator.
“Affiliate” when used with respect to a Person means any other Person, directly or indirectly,
controlling, controlled by, or under common control with such Person, except, when used with
respect to the Seller, Affiliate shall mean Feed, each of the other Originators and all
Subsidiaries of Feed or any other Originator.
“Allocation Limit” has the meaning set forth in Section 1.1.
“Alternate Base Rate” means, on any date, a fluctuating annual rate of interest equal to the
greatest of (a) the prime rate announced by CoBank as its “prime rate” in effect on such day, (b)
the Base CD Rate in effect on such day plus one percent (1%) and (c) the Federal Funds Effective
Rate in effect on such day plus one-half of one percent (1/2 of 1%). Any change in the Alternate
Base Rate due to a change in the prime rate, the Base CD Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the prime rate, the Base
CD Rate or the Federal Funds Effective Rate, respectively. The Alternate Base Rate, whether or not
determined by reference to the prime rate, is not necessarily intended
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to be the lowest rate of interest determined or offered by CoBank in connection with extensions of
credit.
“Applicable Law” means all existing and future applicable laws, rules, regulations (including
proposed, temporary and final income tax regulations), statutes, treaties, codes, ordinances,
permits, certificates, orders and licenses of and interpretations by any Governmental Authority,
and applicable judgments, decrees, injunctions, writs, orders or like action of any court,
arbitrator or other administrative, judicial or quasi-judicial tribunal or agency of competent
jurisdiction.
“Assessment Rate” means, for any day, the annual assessment rate in effect on such day that is
payable by a member of the Bank Insurance Fund classified as “well-capitalized” and within
supervisory subgroup “B” (or a comparable successor risk classification) within the meaning of 12
C.F.R. Part 327 (or any successor provision) to the Federal Deposit Insurance Corporation for
insurance by such Corporation of time deposits made in dollars at the offices of such member in the
United States; provided that if, as a result of any change in any law, rule or regulation, it is no
longer possible to determine the Assessment Rate as aforesaid, then the Assessment Rate shall be
such annual rate as shall be determined by the Administrator to be representative of the cost of
such insurance to the Purchasers.
“Bank Equity Interest” is defined in Section 7.1(k).
“Base CD Rate” means the sum of (a) the Three-Month Secondary CD Rate multiplied by the
Statutory Reserve Rate plus (b) the Assessment Rate.
“Business Day” means a day other than a Saturday or a Sunday on which both (a) the
Administrator at its principal office in Greenwood Village, Colorado is open for business and (b)
commercial banks in New York, New York and Greenwood Village, Colorado are not authorized or
required to be closed for business.
“Capital” means at any time with respect to the Receivable Interest an amount equal to (a) the
aggregate of the amounts theretofore paid to Seller for Purchases pursuant to Section 1.1, less (b)
the aggregate amount of Collections theretofore received and actually distributed to the Purchasers
on account of the Capital pursuant to Section 3.1.
“Capitalized Lease Obligation” means any Indebtedness represented by obligations under a lease
that is required to be capitalized for financial reporting purposes in accordance with GAAP.
“Change in Control” means the acquisition of ownership, directly or indirectly, beneficially
or of record, by any Person or group (within the meaning of the Exchange Act and the rules of the
Securities and Exchange Commission thereunder as in effect on the date hereof), of membership
interests representing more than 50% of the aggregate ordinary voting power represented by all
outstanding membership interests of LOL.
“CoBank” has the meaning set forth in the preamble.
\
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“Collections” means, with respect to any Pool Receivable, all funds that either (a) are
received by Seller, Servicer, an Originator or any other Person from or on behalf of the related
Obligors in payment of any amounts owed (including, without limitation, purchase prices, finance
charges, interest and all other charges) in respect of such Receivable, or applied to such amounts
owed by such Obligors (including, without limitation, insurance payments that Seller, an Originator
or Servicer applies in the ordinary course of its business to amounts owed in respect of such
Receivable and net proceeds of sale or other disposition of repossessed goods or other collateral
or property of the Obligor or any other party directly or indirectly liable for payment of such
Receivable and available to be applied thereon), or (b) are deemed to have been received by Seller
or any other Person as a Collection pursuant to Section 3.2.
“Commitment Fee” has the meaning set forth in Section 4.1(b).
“Concentration Limit” for any Obligor at any time means an amount equal to (i) the aggregate
Unpaid Balance of all Eligible Receivables at such time, times (ii) four percent (4.0%). Any
amounts of Eligible Receivables of any Obligor above the limit specified above will be deemed
“Excess Concentrations”.
“Consolidated” means the consolidation in accordance with GAAP of the accounts or other items
as to which such term applies.
“Contract” means a contract between an Originator and any Person, or an invoice from an
Originator to any Person, or any purchase order from any Person to an Originator pursuant to or
under which such Person shall be obligated to make payments to an Originator. A “related” Contract
with respect to the Receivables means a Contract under which Receivables in the Receivables Pool
arise, which evidence such Receivables, or which is relevant to the collection or enforcement of
such Receivables.
“Contractual Obligation” with respect to any Person, means any provision of any securities
issued by such Person or any indenture, mortgage, deed of trust, or material contract, undertaking,
agreement, instrument or other document to which such Person is party or by which it or any of its
property is bound or is subject.
“CPP Receivables” means receivables described in clause (iv) of the definition of
“Receivables.”
“Credit and Collection Policy” means, with respect to each Originator, those credit and
collection policies and practices set forth on Schedule 7.1(g), relating to Contracts and
Receivables of such Originator, as modified without violating Section 7.3(c).
“Cross-Aging Policy” means an exclusion of Receivables of a particular Obligor that otherwise
constitute Eligible Receivables in the event that more than fifty percent (50%) of such Obligor’s
outstanding Receivables are Delinquent Receivables.
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“Current Assets” at any date means the amount at which all of the current assets of a Person
would be properly classified as current assets on a balance sheet at such date in accordance with
GAAP, except that amounts due from Affiliates, investments in Affiliates and prepaid expenses shall
be excluded therefrom.
“Cut-Off Date” means the Friday of each calendar week.
“Days Sales Outstanding” means, at any date of determination, the prior month’s Sales divided
by current month’s collections, times 30.
“Dairy Receivables” means Receivables described in clause (iii) of the definition of
“Receivables.”
“Deemed Collection” has the meaning set forth in Section 3.2.
“Default Rate” shall mean, at any date of determination, a rate equal to the then applicable
Yield Rate, plus two percent (2%) per annum; provided, that in no event shall the Default Rate
exceed the maximum rate permissible under any Applicable Law (the “Maximum Rate”) and to the extent
that application of the first clause of this definition would cause the rate to exceed the Maximum
Rate, the rate payable shall be limited to the Maximum Rate.
“Defaulted Receivable” means: (a) a Receivable as to which any payment, or part thereof,
remains unpaid for more than sixty (60) days from the original due date, (b) as to which the
Obligor thereof is the subject of an Event of Bankruptcy, or (c) that has been charged off the
Seller’s or the applicable Obligor’s books as uncollectible or otherwise deferred or extended,
other than in accordance with the applicable Credit and Collection Policy or with the
Administrator’s prior written consent.
“Delinquent Receivable” means a Receivable that is not a Defaulted Receivable and as to which
any payment, or part thereof, remains unpaid for more than thirty (30) days after the original due
date for such payment.
“Dilution” means any credit, adjustment, rebate, refund or setoff with respect to any
Receivable granted or allowed by Seller or any Originator.
“Dilution Reserve” means, at any time, an amount equal to the sum of (i) forty percent (40%)
of the Net Pool Balance attributable to Seed Receivables and (ii) (A) the Net Pool Balance
attributable to Feed Receivables and Dairy Receivables at such time times (B) the Dynamic Dilution
Reserve Percentage; where
Dynamic Dilution Reserve Percentage is calculated as:
SF x ED, where:
SF = (a) 1.0 times or (b) in the event that the Sales-Based Dilution Ratio attributable to
Feed Receivables and Dairy Receivables for the month ending on the most recent
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Cut-Off Date is greater than or equal to twenty percent (20%), 1.5 times; provided, however, that
is such case the Dynamic Dilution Reserve Percentage shall be capped at twenty percent (20%); and
ED | = | Expected Dilution which, expressed as a percentage, shall be calculated as the 12-month rolling average Sales-Based Dilution Ratio attributable to Feed Receivables and Dairy Receivables. |
“Dollars” means dollars in lawful money of the United States of America.
“Eligible Receivable” means, at any time, a Receivable:
(a) that is originated by an Originator in the ordinary course of its business;
(b) that constitutes an “account,” and is not a “general intangible,” or evidenced by a note
or other “instrument” or “chattel paper,” as each such term is defined in the UCC;
(c) the Obligor of which is (i) located in the United States, (ii) not in default of any
indebtedness owed to any Purchaser, (iii) not an Affiliate of Seller or any Originator, but only to
the extent that such Receivables referred to in this clause (iii) are in excess of seven percent
(7%) of the aggregate Unpaid Balance of Pool Receivables and (iv) not a Governmental Authority,
except as specified on Schedule I, as amended and in effect from time to time;
(d) that was purchased or otherwise acquired by Seller pursuant to the Purchase and Sale
Agreement and which was designated by the related Originator as an “Eligible Receivable” pursuant
to the Purchase and Sale Agreement;
(e) that is neither a Defaulted Receivable nor a Delinquent Receivable;
(f) that is not excluded pursuant to the Cross-Aging Policy;
(g) with respect to which the warranty of Seller in Section 6.1(k) is true and correct and as
to which there exists no asserted dispute, offset or claim by the Obligor or any other Person;
(h) the sale or assignment of which, or of an undivided interest in which, does not contravene
or conflict with Applicable Law, or require the consent of the Obligor or any other Person;
(i) that is denominated and payable only in Dollars in the United States;
(j) that arises under a Contract with payment and other terms relating to the validity or
collectibility of the Receivables thereunder complying in all respects with the standards therefor
in Schedule II (or as otherwise consented to by the Administrator in writing), which has been duly
authorized by the parties thereto and that, together with such Receivable, is
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in full force and effect and constitutes the legal, valid and binding obligation of the Obligor of
such Receivable enforceable against such Obligor in accordance with its terms and is not subject to
any defense whatsoever (other than discharge in bankruptcy and payment);
(k) that, together with the Contract related thereto, does not contravene in any material
respect any Applicable Law and with respect to which neither the Originator nor, to the
Originator’s knowledge, any other party to the Contract related thereto is in violation of any
Applicable Law;
(l) that satisfies all material applicable requirements of the applicable Credit and
Collection Policy;
(m) as to which the original payment terms have not been altered, extended or modified;
(n) the Unpaid Balance of which is payable either (i) within sixty (60) days or less from the
invoice date in the case of Feed Receivables, Dairy Receivables and CPP Receivables (other than CPP
Receivables covered by clause (iii)), (ii) within two hundred and forty (240) days or less from the
invoice date for Seed Receivables or (iii) within at least sixty-one (61) days but not more than
three hundred thirty-five (335) days from the invoice date, in the case of up to eighty-five
percent (85%) of CPP Receivables;
(o) that represents a bona fide obligation arising from the completion of the sale and
delivery of products or provision of services specified in the definition of “Receivables” and that
do not represent an invoice in advance of such completion;
(p) that are not subject to any contingent performance requirements of the Seller or the
related Originator unless such requirements are guaranteed or insured by third parties acceptable
to the Administrator;
(q) in which the Administrator’s security interest, for the benefit of the Purchasers, has
been perfected; and
(r) that relates to the feed, seed, dairy or crop protection product business, but not the
swine business, of the related Originator.
“Event of Bankruptcy” shall be deemed to have occurred with respect to a Person if either:
(a) any case or other proceeding shall be commenced, without the application or consent of
such Person, in any court, seeking the liquidation, reorganization, debt arrangement, dissolution,
winding up, or composition or readjustment of debts of such Person, the appointment of a trustee,
receiver, custodian, liquidator, assignee, sequestrator or the like for such Person or all or
substantially all of its assets, or any similar action with respect to such Person under any law
relating to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of
debts, and such case or proceeding shall continue undismissed, or
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unstayed and in effect, for a period of at least sixty (60) consecutive days; or an order for
relief in respect of such Person shall be entered in an involuntary case under the federal
bankruptcy laws or other similar laws now or hereafter in effect and shall either not be contested
or shall remain undismissed for sixty (60) consecutive days; or
(b) such Person shall commence a voluntary case or other proceeding under any applicable
bankruptcy, insolvency, reorganization, debt arrangement, dissolution or other similar law now or
hereafter in effect, or shall consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar official) for such Person
or for any substantial part of its property, or shall make any general assignment for the benefit
of creditors, or shall fail to, or admit in writing its inability to, pay its debts generally as
they become due, or, if a corporation or similar entity, its board of directors shall vote to
implement any of the foregoing.
“Excess Amount” as of any date, means the amount, if any, by which the sum of the Capital,
plus the Required Reserves on such date exceeds the Net Pool Balance, as most recently calculated.
“Excess Concentrations” has the meaning set forth in the definition of “Concentration Limit”.
“Exchange Act” means the Securities and Exchange Act of 1934, as amended.
“Existing Receivables Purchase Agreement” has the meaning set forth in the recitals.
“Facility Limit” has the meaning set forth in Section 1.1.
“Facility Limit Increase” has the meaning set forth in Section 1.6(a).
“Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if necessary, to the
next 1/100 of 1%) of the quotations for such day for such transactions received by the
Administrator from three Federal funds brokers of recognized standing selected by it.
“Federal Reserve Board” means the Board of Governors of the Federal Reserve System, or any
successor thereto or to the functions thereof.
“Feed” has the meaning set forth in the recitals.
“Feed Receivables” means Receivables described in clause (i) of the definition of
“Receivables.”
“Fee Letter” has the meaning set forth in Section 4.1(a).
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“Fees” means any and all fees payable to or for the account of the Administrator or the
Purchasers pursuant to the Fee Letter or this Agreement (including, without limitation, the
Commitment Fee), which fees, unless otherwise specified in the Fee Letter with respect to fees
addressed there, shall be payable upon, and shall accrue in respect of the Settlement Period ending
upon, each Settlement Date.
“Final Payout Date” means the date following the Termination Date on which the Capital shall
have been reduced to zero and all other amounts payable by Seller to the Purchasers, the
Administrator, the Affected Parties and the Indemnified Parties under the Transaction Documents
shall have been indefeasibly paid in full.
“Floor Reserve” means, at any time, an amount equal to the Net Pool Balance at such time,
times fifteen percent (15%).
“GAAP” means generally accepted accounting principles as in effect in the United States from
time to time and consistently applied.
“Governmental Action” means all permits, authorizations, registrations, consents, approvals,
waivers, exceptions, variances, orders, judgments, decrees, licenses, exemptions, publications,
filings, notices to and declaration of or with, or required by, any Governmental Authority, or
required by any Applicable Law.
“Governmental Authority” means any foreign or domestic federal, state, county, municipal or
other governmental or regulatory authority, agency, board, body, commission, instrumentality, court
or any political subdivision thereof.
“Increasing Purchaser” has the meaning set forth in Section 1.6(b).
“Indebtedness” as applied to a Person means, without duplication, all items which in
accordance with GAAP would be included in determining total liabilities as shown on the liability
side of a balance sheet of such Person as at the date as of which Indebtedness is to be determined,
including, without limitation,
(i) Capitalized Lease Obligations;
(ii) all obligations of other Persons which such Person has guaranteed;
(iii) all reimbursement obligations in connection with letters of credit or letter of
credit guaranties issued for the account of such Person, and
(iv) in the case of LOL and its Subsidiaries (without duplication), all obligations
under (or permitted under) the XX Xxxxxx Credit Documents, as in effect on the Initial
Purchase Date.
“Indemnified
Amounts” has the meaning set forth in Section 13.1.
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“Indemnified
Party” has the meaning set forth in Section 13.1.
“Independent Director” shall mean an individual who is not, and never was, (1) a member,
stockholder, director, officer, employee, Affiliate, customer or supplier of, or an individual that
has received any benefit (excluding, however, any compensation received in such individual’s
capacity as Independent Director) in any form whatever from, or an individual who has provided any
service (excluding, however, any service provided by such individual in such individual’s capacity
as Independent Director) in any form whatever to, Feed or any of its subsidiaries or Affiliates, or
(2) an individual owning beneficially, directly or indirectly, any interest in Feed, or a
stockholder, director, officer, employee, Affiliate, customer or supplier thereof, or an individual
who has received any direct economic benefit (excluding, however, any compensation received in such
individual’s capacity as Independent Director) in any form whatever from, or an individual who has
provided any service (excluding, however, any service provided by such individual in such
individual’s capacity as Independent Director) in any form whatever to, such beneficial owner or
any of such beneficial owner’s Affiliates, or (3) an individual who is a relative or spouse of an
individual described in clause (1) or (2) above.
“Initial Purchase Date” has the meaning set forth in Section 3.1(a),
“XX Xxxxxx Credit Documents” means the Amended and Restated Five-Year Credit Agreement dated
as of August 29, 2006, among LOL, the lenders party thereto, XX Xxxxxx Xxxxx Bank, N.A., as
Administrative Agent and Collateral Agent, and CoBank, as Co-Administrative Agent, together with
the various agreements, instruments and documents executed and delivered in connection therewith,
and as amended, amended and restated, supplemented or otherwise modified from time to time.
“LIBOR” means, with respect to the initial Settlement Period the rate of interest (expressed
as an annual rate and rounded upwards, if necessary, to the nearest 1/16th of 1%) at which deposits
in Dollars would be offered by principal London offices of banks at approximately 11:00 A.M.
(London time) on the first day of the Settlement Period or portion thereof for the period from that
day to the next Settlement Date. For periods which extend from one Settlement Date to the next
Settlement Date, the applicable rate will be the one-month LIBOR rate which appears on page 3750 of
the Dow Xxxxx Market Service (formerly known as Telerate) as of 9:00 A.M. (Denver, Colorado time)
or as soon thereafter as practicable. For periods which begin on a day other than a Settlement
Date, the applicable rate will be the rate equal to the average (rounded up to the nearest 1/16th
of 1%) of the rates shown on the display referred to as the “LIBOR” page (or any display
substituted therefor) of the Dow Xxxxx Market Service matrix (presently page 5) for a period of
time from that day to the next Settlement Date. The determination of the applicable LIBOR rate by
the Administrator shall be conclusive in the absence of demonstrable error.
“LIBOR Business Day” means a day of the year on which dealings are carried on in the London
interbank market and banks are open for business in London and are not required or authorized to
close in Xxxxxxxxx Xxxxxxx, Xxxxxxxx xx Xxx Xxxx Xxxx.
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“LIBOR Rate” means, with respect to any Settlement Period and any portion of the Capital, a
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) determined pursuant to
the following formula:
LIBOR Rate | = | LIBOR | ||||||
1 - LIBOR Reserve Percentage |
“LIBOR Reserve Percentage” means, with respect to any Settlement Period, the then maximum
reserve percentage (expressed as a decimal, rounded upward to the nearest 1/100th of 1%) prescribed
by the Federal Reserve Board for determining the maximum reserve requirements applicable to
“Eurocurrency Liabilities” pursuant to Regulation D having a term comparable to such Settlement
Period.
“Lien” means any mortgage, lien, pledge, encumbrance, charge, title retention or other
security interest of any kind, whether arising under a security agreement, mortgage, deed of trust,
assignment, pledge or financing statement or arising as a matter of law, judicial process or
otherwise.
“Liquidation Fee” means, for each day in any Settlement Period following the occurrence of a
Termination Event, the amount, if any, by which:
(a) the additional Yield (calculated without taking into account any Liquidation Fee) which
would have accrued on the reductions of Capital during such Settlement Period (as so computed) if
such reductions had not been made, exceeds
(b) the income, if any, received by the Purchasers from investing the proceeds of such
reductions of Capital.
“Lockbox” means any post office box to which Collections of Pool Receivables are sent.
“Lockbox Account” means any bank account to which Collections of Pool Receivables are sent or
deposited that is the subject of an executed and effective Seller Lockbox Agreement.
“Lockbox Agreement” means a letter agreement, in substantially the form of Exhibit 5.1(f) or
otherwise in form and substance acceptable to the Administrator, among Seller, the applicable
Originator(s) (if any) and the applicable Lockbox Bank.
“Lockbox Bank” means any of the banks holding one or more Lockbox Accounts for receiving
Collections from Pool Receivables.
“LOL” has the meaning set forth in the preamble.
“LOL Downgrade” means that LOL’s long-term secured senior debt rating is rated below B+ or the
equivalent by both Xxxxx’x Investor Service, Inc. and Standard & Poor’s Ratings Services or is so
rated by one of these rating agencies if such debt is not then rated by the other rating agency.
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“Loss Reserve” means at any time, an amount equal to the Net Pool Balance at such time, times
the Dynamic Loss Reserve Percentage, where:
Dynamic Loss Reserve Percentage means a percentage calculated as the product of: (i) the Loss Ratio, times; (ii) the Stress Factor, where: |
Loss Ratio | = | the most recent 12-month rolling average Sales-Based Default Ratio; | ||||
Stress Factor | = | 1.0 x. |
“Material Adverse Effect” with respect to any event or circumstance, means
(a) a material adverse effect on:
(i) the business, financial condition, assets, or operations of LOL. Feed and their
Subsidiaries, taken as a whole;
(ii) the ability of Servicer, Seller or any Originator to perform its obligations under
this Agreement or any other Transaction Document;
(iii) the validity, enforceability or collectibility of this Agreement or any other
Transaction Document or the validity, enforceability or collectibility of the
Receivables, taken as a whole; or
(iv) the status, existence, perfection, priority or enforceability of the
Administrator’s or any Purchaser’s interest in the Pool Assets; or
(b) the occurrence of any event or circumstance that constitutes an Originator Material
Adverse Effect under the Purchase and Sale Agreement.
“Monthly Report” has the meaning set forth in Section 7.2(a).
“Net Pool Balance” at any time means an amount equal to (i) the aggregate Unpaid Balance of
the Eligible Receivables in the Receivables Pool at such time, minus (ii) the aggregate amount of
Excess Concentrations.
“New Purchaser” has the meaning set forth in Section 1.6(a).
“New Purchaser Supplement” has the meaning set forth in Section 1.6(c).
“Obligor” means a Person obligated to make payments with respect to a Receivable, including
any guarantor thereof.
“Originator Information” has the meaning set forth in Section 14.8(a)(i).
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“Originator(s)” means LOL, Feed, Purina, Winfield or any other Person which is or at any time
hereafter becomes a party to the Purchase and Sale Agreement, in its capacity as an originator of
Receivables.
“Person” means an individual, partnership, limited liability partnership, corporation
(including a business trust), joint stock company, trust, unincorporated association, joint
venture, limited liability company, government or any agency or political subdivision thereof or
any other entity.
“Pool Assets” has the meaning set forth in Section 1.4(a).
“Pool Receivable” means a Receivable in the Receivables Pool.
“Pro Rata Share” means, with respect to any amount, the percentage set forth next to each
Purchaser’s name on Schedule 1 from time to time, representing such Purchaser’s percentage interest
in the overall amount of the Purchasers’ Share.
“Program Information” has the meaning set forth in Section 14.7(a)(i).
“Property” or “Properties” means any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible.
“Purchase” has the meaning set forth in Section 1.1.
“Purchase and Sale Agreement” means the Purchase and Sale Agreement, dated as of December 18,
2001, as amended by a First Amendment to Purchase and Sale Agreement dated as of March 31, 2004, by
a Second Amendment to Purchase and Sale Agreement dated as of October 22, 2004, by a Third
Amendment to Purchase and Sale Agreement dated as of September 7, 2006 and by a Fourth Amendment to
Purchase and Sale Agreement dated as of the date hereof, among the Originators as the
“Originators”, LOL as the initial “Servicer” and Seller as the “Purchaser” under such Agreement, as
the same may be amended, amended and restated, supplemented or otherwise modified from time to
time.
“Purchase Date” has the meaning set forth in Section 1.2(a).
“Purchase Increase Supplement” has the meaning set forth in Section 1.6(b).
“Purchase Notice” has the meaning set forth in Section 1.1.
“Purchase Termination Date” means that day:
(a) the Administrator declares a Purchase Termination Date in a notice to Seller in
accordance with Section 10.2(a); or
(b) in accordance with Section 10.2(b), becomes the Purchase Termination Date
automatically.
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“Purchaser” has the meaning set forth in the preamble.
“Purchasers’ Share” of any amount means the then Receivable Interest, expressed as a
percentage, (but not greater than 100%), times such amount.
“Purina” means Purina Xxxxx, LLC, a Delaware limited liability company.
“Receivables” means (i) Accounts related to the feed businesses of the Originators, including,
but not limited to, Accounts generated from the sale of animal feed and feed ingredients, soybean
meal, premixes, non-grain and protein ingredients, grains, vitamins, minerals, branded feed
products, complete feed products, milk replacer products, feed additives, animal health products,
farm supply products, toll milling services and other feed related services and the proceeds
thereof, (ii) Accounts related to the seed business of LOL including, but not limited to, Accounts
generated from the sale of Seed, licensing fees and seed related services and the proceeds thereof,
(iii) Accounts related to the dairy business of the Originators, including but not limited to
retail and commercial Accounts generated from the sale of fluid milk, and (iv) Accounts related to
the crop protection product business of the Originators. Indebtedness and other obligations arising
from any one transaction, including, without limitation, indebtedness and other obligations
represented by an individual invoice or agreement, shall constitute a Receivable separate from a
Receivable consisting of the indebtedness and other obligations arising from any other transaction.
“Receivable Interest” means an undivided ownership interest determined from time to time as
provided in Section 1.4(b) in all Pool Assets.
“Receivables Pool” means at any time all then outstanding Receivables, other than Reconveyed
Receivables.
“Reconveyed Receivable” means any Receivable for which the related Originator has paid the
full Unpaid Balance pursuant to the Purchase and Sale Agreement.
“Regulation D” means Regulation D of the Federal Reserve Board, or any other regulation of the
Federal Reserve Board that prescribes reserve requirements applicable to nonpersonal time deposits
or “Eurocurrency Liabilities” as presently defined in Regulation D, as in effect from time to time.
“Regulatory Change” means, relative to any Affected Party:
(a) any change in (or the adoption, implementation, change in phase-in or commencement of
effectiveness of) any
(i) United States federal, state or local law or foreign law applicable to such Affected
Party, including, without limitation, with respect to the scope, calculation, application, creation
or modification of any national, state or local tax or government charge or imposition of any type
or kind;
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(ii) regulation, interpretation, directive, requirement or request (whether or not having the
force of law) applicable to such Affected Party of (A) any court, government authority charged with
the interpretation or administration of any law referred to in clause (i) above or of (B) any
fiscal, monetary or other authority having jurisdiction over such Affected Party; or
(iii) GAAP or regulatory accounting principles applicable to such Affected Party and affecting
the application to such Affected Party of any law, regulation, interpretation, directive,
requirement or request referred to in clause (i) or (ii) above; or
(b) any change in the application to such Affected Party of any existing law, regulation,
interpretation, directive, requirement, request or accounting principles referred to in clause (i),
(ii) or (iii) above.
“Reinvestment” has the meaning set forth in Section 1.3(a)(iii).
“Related Rights” has the meaning set forth in the Purchase and Sale Agreement.
“Related Security” means, with respect to any Pool Receivable: (a) all of Seller’s or the
related Originator’s right, title and interest in and to all Contracts that relate to such Pool
Receivable; (b) all security interests or liens and property subject thereto from time to time
purporting to secure payment of such Pool Receivable, whether pursuant to the Contract related to
such Pool Receivable or otherwise; (c) all UCC financing statements covering any collateral
securing payment of such Pool Receivable; (d) all guarantees and other agreements or arrangements
of whatever character from time to time supporting or securing payment of such Pool Receivable whether pursuant
to the Contract related to such Pool Receivable or otherwise; and (e) all of Seller’s and Feed’s
interest in the merchandise (including returned merchandise), if any, relating to the sale that
gave rise to such Pool Receivable.
“Reporting Date” has the meaning set forth in Section 3.1(a).
“Required Purchasers” means those Purchasers at any time holding Pro Rata Shares constituting,
in the aggregate, not less than fifty-one percent (51%) of the overall amount of the Purchasers’
Share.
“Required Reserves” means, at any time, an amount equal the greater of (i) the Loss Reserve
plus the Dilution Reserve plus the Yield Reserve, and (ii) the Floor Reserve, in each case as most
recently calculated.
“Sales” means sales of the Originators which generate Receivables.
“Sales-Based Default Ratio” means, as of any Cut-Off Date, the ratio, expressed as a
percentage, of (i) the aggregate Unpaid Balance of all Defaulted Receivables for the month ending
on such Cut-Off Date, divided by (ii) the average monthly Sales over the preceding
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twelve (12) months; provided, however, that for the first twelve months following the date of this
Agreement, with respect to CPP Receivables generated by Winfield, for purposes of calculating (x)
the average monthly Sales pursuant to this clause (ii) and (y) compliance with Section 10.1(j),
only Sales by Winfield of CPP Receivables since the date of this Agreement shall be considered,
notwithstanding the fact that such period shall be less than twelve (12) months.
“Sales-Based Delinquency Ratio” means, as of any Cut-Off Date, the ratio, expressed as a
percentage, of (i) the aggregate Unpaid Balance of all Delinquent Receivables for the month ending
on such Cut-off Date, divided by (ii) the average monthly Sales over the preceding twelve (12)
months; provided, however, that for the first twelve months following the date of this Agreement,
with respect to CPP Receivables generated by Winfield, for purposes of calculating (x) the average
monthly Sales of pursuant to this clause (ii) and (y) compliance with Section 10.1(m), only Sales
by Winfield of CPP Receivables since the date of this Agreement shall be considered,
notwithstanding the fact that such period shall be less than twelve (12) months.
“Sales-Based Dilution Ratio” means as of any Cut-Off Date, the ratio, expressed as a
percentage, of (i) the aggregate reduction attributable to Dilutions occurring in the Unpaid
Balance of all Pool Receivables, which Dilutions were granted during the month ending on such
Cut-Off Date, divided by (ii) the xxxxxxxx for the month immediately preceding the month ending as
of such Cut-Off Date; provided, however, that for the first twelve months following the date of
this Agreement, with respect to CPP Receivables generated by Winfield, for purposes of calculating
compliance with Section 10.1(i), only Sales by Winfield of CPP Receivables since the date of this
Agreement shall be considered, notwithstanding the fact that such period shall be less than twelve
(12) months.
“Scheduled Termination Date” means August 29, 2011.
“Secured Parties” means each Purchaser, the Administrator, the Indemnified Parties and the
Affected Parties.
“Security” shall have the meaning as in Section 2(l) of the Securities Act of 1933, as
amended.
“Seed” means crop seed (including, but not limited to, seed for soybeans, corn, alfalfa,
forage and turf grasses).
“Seed Receivables” means Receivables described in clause (ii) of the definition of
“Receivables.”
“Seller” has the meaning set forth in the preamble.
“Seller’s Share” of any amount means (x) 100% minus the Receivable Interest (but such
Receivable Interest shall not be greater than 100%) times (y) such amount.
“Servicer” has the meaning set forth in Section 8.1(a).
-16-
“Servicer
Default” has the meaning set forth in
Section 8.2(h).
“Servicer
Report” has the meaning set forth in Section 3.1.
“Servicer
Transfer Event” has the meaning set forth in Section 8.1(b).
“Servicer’s Fee” means, for each day, an amount equal to (x) the Servicer’s Fee Rate,
times (y) the aggregate Unpaid Balance of all Pool Receivables at the close of business on such
day, times (z) 1/360, provided, however, that if at any time the Servicer is not LOL, CoBank or any
of their respective Affiliates, the Servicer’s Fee shall be a commercially reasonable rate as
agreed between the Administrator and the Servicer.
“Servicer’s
Fee Rate” means 0.50% per annum.
“Settlement Date” shall mean the twentieth (20th) day of each calendar
month (or, if any such twentieth (20th) day is not a Business Day, “Settlement Date”
shall mean the immediately succeeding Business Day).
“Settlement Period” shall mean, initially, the period beginning on the date of
Purchase of such Receivable Interest and ending on and including the last day of the calendar month
in which the date of such Purchase occurs, and thereafter, each successive period commencing on the
first day of each calendar month during the term of this Agreement and ending on the last day of
such calendar month during the term of this Agreement.
“SPV Purchaser Notes” has the meaning set forth in the Purchase and Sale Agreement.
“Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of
which is the number one and the denominator of which is the number one minus the aggregate of the
maximum reserve percentages (including any marginal, special, emergency or supplemental reserves)
expressed as a decimal established by the Federal Reserve Board or other Governmental Authority to
which the Administrator or any Purchaser is subject with respect to the Base CD Rate, for new
negotiable nonpersonal time deposits in dollars of over $100,000 with maturities approximately
equal to three months. The Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
“Sub-Servicer”
has the meaning set forth in Section 8.1(d).
“Subsidiary” means a corporation or other Person of which LOL and/or its other
Subsidiaries own, directly or indirectly, such number of outstanding shares as have more than
fifty-one percent (51%) of the ordinary voting power for the election of directors.
“Successor
Notice” has the meaning set forth in Section 8.1(b).
“Termination Date” means the earlier to occur of: (a) the Purchase Termination Date;
and (b) the Scheduled Termination Date.
-17-
“Termination
Event” has the meaning set forth in Section 10.1.
“Termination Period” means the period from and including the earlier to occur of the
Termination Date or the date of occurrence of a Termination Event, through the Final Payout Date.
“Three-Month Secondary CD Rate” means, for any day, the secondary market rate for
three-month certificates of deposit reported as being in effect on such day (or, if such day is not
a Business Day, the next preceding Business Day) by the Federal Reserve Board through the public
information telephone line of the Federal Reserve Bank of New York (which rate will, under the
current practices of the Federal Reserve Board, be published in Federal Reserve Statistical Release
H.15 (519) during the week following such day) or, if such rate is not so reported on such day or
such next preceding Business Day, the average of the secondary market quotations for three-month
certificates of deposit of major money center banks in New York City received at approximately
10:00 A.M., New York City time, on such day ( or, if such day is not a Business Day, on the next
preceding Business Day) by the Administrator from three negotiable certificate of deposit dealers
of recognized standing selected by it.
“Transaction Documents” means this Agreement, the Lockbox Agreements, the Purchase and
Sale Agreement, any Credit and Collection Policy, the Fee Letter and other documents to be executed
and delivered in connection herewith.
“UCC” means the Uniform Commercial Code as from time to time in effect in the
applicable jurisdiction or jurisdictions.
“Unmatured Termination Event” means any event which, with the giving of notice or
lapse of time, or both, would become a Termination Event.
“Unpaid Balance” of any Receivable means at any time the unpaid principal amount
thereof.
“Voting Participant” has the meaning set forth in Section 12.3(b).
“Winfield” means Winfield Solutions, LLC, a Delaware limited liability company.
“Yield” means for any Settlement Period:
C x YR x ED + LF
360
where:
C
|
= | the daily average (calculated at the close of business each day) of the Capital during such Settlement Period, | ||
YR
|
= | the Yield Rate for such Settlement Period, and |
-18-
ED
|
= | the actual number of days elapsed during such Settlement Period. | ||
LF
|
= | the Liquidation Fee, if any, during such Settlement Period. |
“Yield Rate” means for any Settlement Period, as Seller may elect upon written notice
to Administrator delivered not later than the third (3rd) Business Day prior to the
commencement of any such Settlement Period.
(a) the
sum of (x) the LIBOR Rate, plus eighty-seven and a half (87.5) basis points; or
(b) the Alternate Base Rate;
provided,
however, that (i) in the event the LIBOR Rate shall not be available or cannot reasonably
be determined by the Administrator for any reason or any present or future law, regulation, treaty
or directive or the interpretation or application thereof shall make it unlawful for any Purchaser
to calculate Yield on its Capital based on the LIBOR Rate, then upon the delivery of written notice
to the Administrator and the Seller to that effect, the Yield Rate shall be the Alternate Base Rate
unless and until the Administrator and the Seller is notified in writing to the contrary and (ii)
on any day during a Settlement Period when any Termination Event shall have occurred and be
continuing, the Yield Rate for the Capital shall mean the Default Rate.
“Yield Reserve” means, at any time, an amount equal to the product of (i) (the Yield
Rate plus the Servicer’s Fee Rate) divided by 360; (ii) the Days Sales Outstanding; and (iii) the
Stress Factor of 1.0 x.
B. Other Terms. 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 Colorado,
and not specifically defined herein, are used herein as defined in such Article 9.
C. Computation of Time Periods. Unless otherwise stated in this Agreement, in the
computation of a period of time from a specified date to a later specified date, the word “from”
means “from and including” and the words “to” and “until” each means “to but excluding”.
D. Interpretation. In each Transaction Document, unless a clear contrary intention
appears:
(i) the
singular number includes the plural number and vice versa;
(ii) reference to any Person includes such Person’s successors and assigns but, if
applicable, only if such successors and assigns are permitted by the Transaction
Documents, and reference to a Person in a particular capacity excludes such Person
in any other capacity or individually;
(iii) reference to any gender includes each other gender;
-19-
(iv) reference to any agreement (including any Transaction Document), document or
instrument means such agreement, document or instrument as amended, supplemented or
modified and in effect from time to time in accordance with the terms thereof and, if
applicable, the terms of the other Transaction Documents and reference to any promissory
note includes any promissory note which is an extension or renewal thereof or a substitute
or replacement therefor; and
(v) reference to any Applicable Law means such Applicable Law as amended, modified,
codified, replaced or reenacted, in whole or in part, and in effect from time to time,
including rules and regulations promulgated thereunder and reference to any section or
other provision of any Applicable Law means that provision of such Applicable Law from time
to time in effect and constituting the substantive amendment, modification, codification,
replacement or reenactment of such section or other provision.
Schedule I
Government Contracts
None
(a) Schedule II
Contract Standards
None
Schedule 1
Purchasers and Pro Rata Shares
Purchaser | Pro Rata Share | Facility Limit | ||||||
CoBank, ACB
|
100 | % | $ | 300,000,000 | ||||
TOTAL
|
100 | % | $ | 300,000,000 | ||||
Schedule 6.1(m)
List of Offices of Seller
Where Records Are Kept
Where Records Are Kept
0000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Xxxxx Xxxxx, XX 00000
Schedule 6.1(n)
List of Lockbox Banks
Bank | Location | Account | |||||
Xxxxx Fargo & Company
|
Minneapolis, MN | 2391446909 | |||||
Xxxxx Fargo & Company
|
Minneapolis, MN | 2391445901 | |||||
Xxxxx Fargo & Company
|
Minneapolis, MN | 2391454580 | |||||
Xxxxx Fargo & Company
|
Minneapolis, MN | 4121577514 | |||||
Xxxxx Fargo Bank, MN
|
Minneapolis, MN | 4030012942 | |||||
PNC Bank
|
Pittsburgh, PA | 8550541334 | |||||
Bank of America
|
Chicago, IL | 8188201691 | |||||
Bank of America
|
Dallas, TX | 180389890 | |||||
Bank of America
|
San Francisco, CA | 8666024262 | |||||
Bank of America
|
Chicago, IL | 8666513747 | |||||
Bank of America
|
Chicago, IL | 0000000000 |
Schedule 7.1(g)
Credit and Collection Policies
Schedule 12.3(b)
Participants
Participant | Amount of Participation | |
CoBank
|
$150 million | |
US AgBank
|
$30 million | |
FCB Texas
|
$25 million | |
FCS WNY
|
$20 million | |
NWFCS
|
$20 million | |
Commercial Finance Group
|
$15 million | |
FSCA
|
$10 million | |
First Pioneer
|
$10 million | |
Greenstone
|
$10 million | |
AgStar
|
$10 million | |
Total
|
$300 million |
Schedule 14.2
Addresses
A. LOL SPV, LLC |
0000 Xxxxxx Xxxx X Xxxx
Xxxxxxxxx, XX 00000 |
Attention: Xxxxxxxx Xxxxxxxx |
Telephone: 000-000-0000 |
Facsimile: 000-000-0000 |
With a copy to: |
Land O’Lakes, Inc. |
0000 Xxxxxxxxx Xxx. Xxxxx
Xxxxx Xxxxx, XX 00000 |
Attention: Xxxxx Xxxxxxx |
Telephone: 000-000-0000 |
Facsimile: 000-000-0000 |
B. Land O’Lakes Purina Feed LLC |
0000 Xxxxxx Xxxx X Xxxx
Xxxxxxxxx, XX 00000 |
Attention: Xxxx Xxxxxx |
Telephone: 000-000-0000 |
Facsimile: 000-000-0000 |
With a copy to: |
Land O’Lakes, Inc. |
0000 Xxxxxxxxx Xxx. Xxxxx
Xxxxx Xxxxx, XX 00000 |
Attention: Xxxxx Xxxxxxx |
Telephone: 000-000-0000 |
Facsimile: 000-000-0000 |
C. Land O’Lakes, Inc. |
0000 Xxxxxxxxx Xxx. Xxxxx
Xxxxx Xxxxx, XX 00000 |
Attention: Xxxxx Xxxxxxx |
Telephone: 000-000-0000 |
Facsimile: 000-000-0000 |
X. Xxxxxxxx Solutions, LLC |
0000 Xxxxxx Xxxx X Xxxx
Xxxxxxxxx, XX 00000 |
Attention: Xxxxx Xxxxxxx |
Telephone: 000-000-0000 |
Facsimile: 000-000-0000 |
-2-
E. CoBank, ACB |
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxxxx, XX 00000 |
Attention: Xxxxxxx Xxxxxxxxxx |
Telephone: 000-000-0000 |
Facsimile: 000-000-0000 |
Exhibit 1.2(a)
Form of Purchase Notice
[DATE]
CoBank, ACB, as Administrator
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxxxx
Vice President — Corporate Finance
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxxxx
Vice President — Corporate Finance
Re: | Third Amended and Restated Receivables Purchase Agreement dated as of September 4, 2007 among LOL SPV, LLC, as Seller, Land O’Lakes, Inc., as initial Servicer, the Purchasers as defined therein and CoBank, ACB, as Administrator for the Purchasers (the “Agreement”) |
Ladies and Gentlemen:
This Notice is delivered to you pursuant to Section 1.02 of the Agreement. Unless
otherwise defined herein or the context otherwise requires, all capitalized terms used herein will
have the respective meanings assigned to them in the Agreement.
The
Seller hereby requests that a Purchase in the amount of
$
(the “Purchase Price”) be made by the Purchasers on
,
___1/ (the “Purchase
Date”).
The Seller hereby certifies and warrants that on the date hereof and as of the Purchase Date
(and the Seller, by accepting the payment of the Purchase Price on the Purchase Date relating to
such Purchase, will be deemed to have certified that), (i) the representations and warranties of
the Seller contained in Section 6.01 of the Agreement are true and correct in all material
respects as though made on and as of the date hereof and as of the Purchase Date, (ii) the Seller
is in compliance with the covenants set forth in Article VII of the Agreement and (iii) all
applicable conditions precedent to the Purchase have been fully satisfied.
The Seller agrees that if, prior to the time that the Purchase requested hereby is made, any
matter certified to herein will not be true and correct at such time as if then made, it will
immediately so notify each Purchaser and the Administrator.
Please credit the proceeds of the requested Purchase to the account(s) indicated below:
Amount to be | ||||||||
Bank | Credited | Account Name | Account No. |
1/ | Insert date that is at least two (2) Business Days following the date of this notice. |
-2-
$ | ||||||
ABA# |
The Seller has caused this notice to be executed and delivered, and the certifications and
warranties contained herein to be made, by its duly authorized
officer this ___ day of , ___.
LOL SPV, LLC | ||||||||
By: | ||||||||
Name: | ||||||||
Title: | ||||||||
Phone No.: | ||||||||
Fax No.: | ||||||||
Exhibit 3.1(a)-1
Form of Servicer Report
-2-
![(FORM)](https://www.sec.gov/Archives/edgar/data/1032562/000095013707017198/c21482c2148201.gif)
LOL SPV, LLC |
Servicer Report |
Date of Report Report Month I. AGING AND AVERAGE MATURITY CALCULATION Agings as a % of Current Receivables and Receivables 1-30 Days Days Past Due $ Agings Receivables Past Due-Aging Based on Invoice Date Current 0.0% 1-30 Days 0.0% 0 — 60 Days 31-60 Days 0.0% 61 — 120 Days 61-90 Days 0.0% Over 120 Day Over 90 Days 0.0% Total Total Receivables 100.0% (1) Total Receivables Exclusions: |
(2) Receivables — over 30 days past due (3) Receivables — over 60 Days past invoice date (4) Government Receivable (5) AR not in USD and/or obligor not located in the US (6) Defaulted Receivables — Obligor bankruptcy or chargoff as uncollectable (7) Other Receivables being Excluded (Receivables, other than Feed, Seed, Dairy or CPP) (8) Subject to 50% Cross-Aging Policy (9) Other Receivables being Excluded (TBD) $- |
Exceptions: |
(10) Receivables — Seed long-dated receivables between 61-240 days past invoice date (11) Receivables — 85% of CPP long-dated receivables between 61-335 days past invoice date (12) Government Receivables — specified on Schedule I $- |
(13) Eligible Receivables [(1) — (2) — (3) — (4) — (5) — (6) -(7) -(8) -(9) + (10) +(11) + (12)] (14) Total Eligible Receivables From Affiliates (15) Total Eligible Receivables Including Affiliates [(13) + (14)] (16) Affiliate Receivables limit (7% of eligible affiliate receivables) (17) Total Affiliate Receivables to be included (<= 7%) (18) Excess Concentration per Obligor (4% of Eligible Receivables) (19) Total Excess Concentration $- |
(20) Net Pool Balance [(13) + (17) — (19)] II. COMPLIANCE REVIEW (21) Twelve Month Rolling Average Default Ratio (22) Twelve Month Rolling Average Default Ratio (not to exceed 6%) (23) Twelve Month Rolling Average Delinquency Ratio (24) Twelve Month Rolling Average Delinquency Ratio (not to exceed 6%) (25) Twelve Month Rolling Average Dilution Ratio (26) Twelve Month Rolling Average Dilution Ratio (not to exceed 12%) (27) Monthly Default Ratio (28) Monthly Default Ratio Covenant (not to exceed 10%) (29) Monthly Delinquency Ratio (30) Monthly Delinquency Ratio Covenant (not to exceed 10%) III. RESERVE CALCULATIONS Yield Reserve Calculation |
(31) Yield Rate [LIBO Rate + .875%] (32) Servicer’s Fee Rate |
(33) Yield Reserve [({(31) + (32)}/360)*Days Sales Outstanding*Stress Factor 1.0* (20)] $- |
Dilution Reserve Calculation |
(34) Total Seed Receivables Net Pool Balance $- |
(35) Seed Dilution Reserve (40%) 40% $- |
(36) Net Pool Balance (excluding Seed) $- |
(37) Dynamic Dilution Reserve Percentage (Feed/Dairy/CPP) (38) Dilution Reserve [(35) + (36) * (37)] $- |
Loss Reserve Calculation |
(39) Net Pool Balance $- |
(40) Dynamic Loss Reserve Percentage (41) Loss Reserve [(39) * (40)] $- |
Required Reserve Calculation |
(42) Loss Reserve + Dilution Reserve + Yield Reserve [(33) + (38) + (41)] $- |
(43) Floor Reserve (Floor Reserve Percentage * Net Pool Balance [15% * (20)]) $- |
(44) The greater of (42) or (43) $- |
(45) Required Reserve [(44) + Credit and Collection Policy Reserve Rate {(0% * (20)}] $- |
IV. CAPITAL SUMMARY (46) Capital Outstanding $- |
(47) Minimum Net Pool Balance {Capital Outstanding + Required Reserve [(45) + (46)]} $- |
(48) Excess Amount {Minimum Net Pool Balance — Net Pool Balance [(20) — (47)]} $- |
(49) AR Securitization Capacity $300,000,000 |
(50) Additional Borrowing Availability $- |
The undersigned hereby represents and warrants that this Servicer Report is a true and accurate accounting with respect to the Receivable Purchase Program, amended and restated, as of September 4, 2007. Land O’Lakes Farmland Feed LLC, LOL Seed Division, LOL Dairy Foods Division and Winfield |
Name Date |
Title |
Exhibit 5.1(f)
Form of Lockbox Agreement
[Letterhead of LOL SPV, LLC]
LOCKBOX AGREEMENT
, 2006
[Name and Address of
LockBox Bank]
Ladies and Gentlemen:
Reference
is made to our Account No. (the “Lockbox Account”) and Lockbox No.
(the “Lockbox”) maintained with you in our name. Pursuant to a Third Amended and
Restated Receivables Purchase Agreement dated as of September 4, 2007, among LOL SPV, LLC (“SPV”),
as Seller, Land O’Lakes, Inc., as initial Servicer, the Purchasers as defined therein (as so
defined, the “Purchasers”), and CoBank, ACB, as administrator (the “Administrator”), SPV has sold
and/or may hereafter sell to the Administrator, for the benefit of the Purchasers and their
assigns, one or more undivided percentage interests in accounts, chattel paper, instruments or
general intangibles of SPV (collectively, “Receivables”) with respect to which payments are or may
hereafter be made to the Lockbox for deposit into the Lockbox Account, and has granted to the
Administrator, for the benefit of the Purchasers and their assigns, a security interest in such
Receivables, the Lockbox, the Lockbox Account, amounts on deposit therein and related property.
Your execution of this letter agreement is a condition precedent to our continued maintenance of
the Lockbox and Lockbox Account with you.
We hereby transfer, subject to the terms and conditions contained herein, effective as of the
date of this letter, exclusive ownership, dominion and control of the Lockbox and the Lockbox
Account to the Administrator on behalf of the Purchasers and their assigns. The Administrator, by
execution below, confirms its ownership, dominion and control of the Lockbox and Lockbox Account,
and instructs you that, prior to the receipt by you of notice from the Administrator, which notice
may be in the form attached hereto as Exhibit A or in any other form that gives you reasonable
notice, you shall be authorized to continue to act on our instructions, or upon our authorization,
on the instructions of an officer of SPV, provided that, unless otherwise instructed by the
Administrator, you shall cause all checks, drafts or other items received or collected by you in
the Lockbox to be deposited into the Lockbox Account. After receipt by you of notice from the
Administrator, you will act only upon the instructions from the Administrator.
-2-
We hereby irrecoverably instruct you, at all times from and after the date of your receipt of
notice from the Administrator as described above, to make all payments to be made by you out of or
in connection with the Lockbox Account directly to the Administrator, at its address set forth
below its signature hereto or as the Administrator otherwise notifies you, for the account of the
Purchasers, at ABA # , Account # , or otherwise in accordance with the instructions
of the Administrator.
We also hereby notify you that the Administrator shall at all times be irrevocably entitled to
exercise in our place and stead any and all rights in respect of or in connection with the Lockbox
and Lockbox Account, including, without limitation, (a) after the date of your receipt of notice
from the Administrator as described above, the right to specify when payments are to be made out of
or in connection with the Lockbox Account and (b) the right to require preparation of duplicate
monthly bank statements on the Lockbox Account for the Administrator’s audit purposes and mailing
of such statements directly to an address specified by the Administrator.
Notice from the Administrator may be personally served or sent by facsimile, nationally
recognized overnight delivery service or courier, to the address or facsimile number set forth
under your signature to this letter agreement (or to such other address or facsimile number as to
which you shall notify the Administrator in writing). If notice is given by facsimile, it will be
deemed to have been received when the notice is sent and the receipt is confirmed by telephone or
other electronic means. All other notices will be deemed to have been received when actually
received.
By executing this letter agreement, you acknowledge and consent to the existence of the
Administrator’s ownership and control of the Lockbox and Lockbox Account and the Administrator’s
security interest in the Lockbox and Lockbox Account and amounts from time to time received,
collected or on deposit therein and agree that from the date hereof the Lockbox and Lockbox Account
shall be maintained by you for the benefit of, and items and amounts from time to time therein
shall be held by you as agent for, the Administrator on the terms provided herein. The Lockbox
Account is to be titled “LOL SPV, LLC and CoBank, ACB as the Administrator for the Purchasers and
their assigns, as their interests may appear”. Except as otherwise provided in this letter
agreement, items and payments received, collected or on deposit in the Lockbox and Lockbox Account
are to be processed in accordance with the standard procedures currently in effect. All service
charges and fees with respect to the Lockbox and Lockbox Account shall continue to be payable by us
as under the arrangements currently in effect.
By executing this letter agreement, you (i) irrevocably waive and agree not to assert, claim
or endeavor to exercise, irrevocably bar and estop yourself from asserting, claiming or exercising,
and acknowledge that you have not heretofore received a notice, writ, order or any form of legal
process from any other person or entity asserting, claiming or exercising, any right of set-off,
banker’s lien or other purported form of claim with respect to the Lockbox and Lockbox Account or
any items or funds from time to
time therein and (ii) covenant and agree with the Purchasers and the Administrator that you will
not institute against, or join any other person or entity in instituting against us any bankruptcy,
reorganization, arrangement, insolvency or liquidation or similar proceedings under the laws of the
United States or any state of the
-0-
Xxxxxx Xxxxxx. Except for your right to payment of your service charges and fees and to make
deductions for returned items, you shall have no rights in the Lockbox or Lockbox Account or any
items or funds therein. To the extent you may ever have such rights, you hereby expressly
subordinate all such rights to all rights of the Administrator.
You may terminate this letter agreement by canceling the Lockbox and Lockbox Account
maintained with you, which cancellation and termination shall become effective only upon thirty
days’ prior written notice thereof from you to the Administrator. Incoming mail or wire transfers
to the Lockbox or Lockbox Account received after such cancellation shall be forwarded in accordance
with the Administrator’s instructions. This letter agreement may also be terminated upon written
notice to you by the Administrator stating that the Receivables Purchase Agreement pursuant to
which this letter agreement was obtained is no longer in effect. Except as otherwise provided in
this paragraph, this letter agreement may not be terminated or amended without the prior written
consent of the Administrator. This letter agreement may be executed in any number of counterparts,
and by the parties hereto on 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.
-4-
Please acknowledge your agreement to the terms set forth in this letter agreement by signing
the two copies of this letter agreement enclosed herewith in the space provided below, sending one
such signed copy to the Administrator at its address provided above and returning the other signed
copy to us.
Very truly yours,
LOL SPV, LLC
By:
______________________________________
Name Printed: ______________________________
Title: _____________________________________
Name Printed: ______________________________
Title: _____________________________________
Acknowledged and agreed to as of the date first
written above:
written above:
COBANK, ACB, as Purchaser and as Administrator
By:
______________________________________
Name Printed: ______________________________
Title: _____________________________________
Name Printed: ______________________________
Title: _____________________________________
, as Lockbox Bank
By:
______________________________________
Name Printed: ______________________________
Title: _____________________________________
Name Printed: ______________________________
Title: _____________________________________
Address for Notice:
Attention:
_________________________________
Tel. No.: __________________________________
Facsimile No.: ______________________________
Tel. No.: __________________________________
Facsimile No.: ______________________________
Exhibit A
[Letterhead of CoBank, ACB]
[Lockbox Name and Address]
Re: | LOL SPV, LLC Lockbox No. (the “Lockbox”) and Lockbox Account No. (the “Lockbox Account”) |
Ladies and Gentlemen:
Reference
is made to the letter agreement dated
,
200 ___ (the “Letter Agreement”) among
LOL SPV, LLC, the undersigned, as Purchaser and Administrator and you concerning the
above-described Lockbox and Lockbox Account. We hereby give you notice that, in accordance with
our ownership and control of the Lockbox and Lockbox Account as provided in the Letter Agreement,
you shall hereafter accept instructions only from the undersigned.
We hereby instruct you to make all payments to be made by you out of or in connection with the
Account directly to the undersigned, at our address set forth above, for the account of the
Purchasers (ABA no. , account no. ).
[other instructions]
Very truly yours,
COBANK, ACB, as Administrator
By:
_________________________________
Name: _______________________________
Title: ________________________________
Name: _______________________________
Title: ________________________________
cc: LOL SPV, LLC
Exhibit 7.2(a)
Form of Monthly Report
Exhibit 7.4
Factual Assumptions Contained In
True Sale And Non-Consolidation Opinion (“Opinion Letter”)
True Sale And Non-Consolidation Opinion (“Opinion Letter”)
The following assumptions, representations and statements are contained in the Opinion Letter and
are relied upon by the opinion giver. Terms not defined in the foregoing Agreement shall have the
meaning given them in the Opinion Letter.
Substantive Consolidation:
1. Organization. The Seller is a Delaware limited liability company and maintains good
standing under the laws of the State of Delaware.
2. Procedures Observed. The Seller observes and shall observe all company procedures required
by the Certificate of Formation, its limited liability company agreement and the limited liability
company law of the State of Delaware. All distributions of the Seller will be paid and declared in
accordance with the law of the State of Delaware.
3. Management. The business and affairs of the Seller are and will be managed by or under the
direction of the Board of Managers. The Seller at all times ensures and will ensure that the Board
of Managers duly authorizes all company actions requiring authorization by its Board of Managers.
When necessary, the Seller obtains and will obtain proper authorization from Feed as its sole
member for company action. The officers and managers of the Seller shall make decisions with
respect to the business and daily operations of the Seller independent of and not dictated by Feed,
LOL, Winfield or Purina (each an “LOL Company” and collectively, the “LOL Companies.” In addition,
the Seller’s officers and managers will adhere to all statutes, rules, by-laws or other obligations
regarding conflicts of interest and participation in decision-making by officers and managers who
may have a conflict of interest with respect to the subject matter of the decision.
4. Independent Managers. As required by the Certificate of Organization, the Board of
Managers includes and will include at least one “Independent Manager” (as that term is defined in
the Certificate of Organization).
5. Records. The Seller maintains and will maintain separate corporate records, documents and
books of accounting from those of Feed, any other LOL Company or any other entity, and keeps and
will keep correct and complete books and records of account and minutes of the meetings and other
proceedings of its members and the Board of Managers.
6. Offices. The Seller will pay fair market rent for any office space shared with an
Originator and a fair share of any overhead costs. The Seller has an address and telephone number
separate and distinct from the address and telephone number of any of the LOL Companies.
7. Identifiable Assets. The Seller’s assets will not be commingled with those of any LOL
Company, and the Seller maintains and shall maintain separate bank accounts and books of
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account from those of the LOL Companies. The separate assets and liabilities of the Seller are
readily distinguishable from those of the LOL Companies, and the separate assets and liabilities of
the Seller and the LOL Companies can be quickly and inexpensively identified and ascertained.
8. Capitalization. On the date hereof, each of Feed and the Seller is solvent, has adequate
capital to carry on its business, and intends to and believes that it will be able to pay its debts
as they mature. Neither Feed nor the Seller intends to, or believes that it will, engage in any
business for which its respective capitalization would not be adequate. None of the transactions
described in the Transaction Documents is being entered into with the intent to hinder, defraud or
delay any of the creditors of Feed or the Seller.
9. Expenses. The Seller shall pay from its own separate assets all material liabilities
incurred by it, including the wages and salaries of its officers and all material administrative
expenses. The Seller will reimburse Feed or the applicable LOL Company for its allocable portions
of any shared expenses.
10. Conduct. The Seller conducts and will continue to conduct its business solely in its own
name so as not to mislead others as to the identity of the Seller. All oral and written
communications, including without limitation letters, invoices, purchase orders, contracts,
statements and applications, are made solely in the name of the Seller if related to the Seller,
and are not made in the name of the Seller if related to an LOL Company or the name of an LOL
Company if related to the Seller.
11. Intercompany Claims. The Seller has not guaranteed any obligations of any LOL Company.
The Seller will not guaranty or assume any obligations of any LOL Company. There is no
intercompany debt between the Seller and any LOL Company other than the SPV Purchaser Notes and
debts incurred in connection with their respective obligations to each other under the Purchase
Agreement. The Seller will not lend funds or extend credit to any LOL Company other than pursuant
to the Purchase Agreement in connection with the purchase of Receivables thereunder.
12. Reliance by Others. The Seller (i) acts and will act solely in its own name and through
its duly authorized officers or agents in the conduct of its businesses, (ii) will take no action
which may mislead third parties as to the separate corporate identities and separate assets and
liabilities of each LOL Company and the Seller, and (iii) will have and utilize its own invoices
and letterhead separate from any LOL Company.
13. Disclosure of the Transactions. The Seller will maintain separate financial statements
from the LOL Companies. However, the Seller and certain affiliated entities may utilize
consolidated financial statements for certain tax and reporting purposes. Any consolidated
financial statements of the Seller will disclose, through appropriate footnotes or otherwise, the
separate corporate existence of the Seller, that the Receivables have been sold or contributed to
the Seller pursuant to the Purchase Agreement, and the interests of the Seller in the Receivables.
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14. Fairness of Transactions. The management of Feed and the Seller have determined that the
ownership of the Seller by Feed and the limited purposes of the Seller are in the best interests of
Feed and the Seller.
15. Transaction Documents. The Seller will comply with the Transaction Documents in
accordance with their respective terms, in all respects material to this opinion, and the
Transaction Documents will not be modified in any material way except as provided for therein. The
resolutions, agreements and other instruments regarding the transactions contemplated by the
Transaction Documents will be continuously maintained as official records of the Seller. In
addition to, and consistent with the foregoing, the Seller will not take any actions that are
inconsistent with the terms of, or expectations of the Seller’s creditors with respect to the
Transaction Documents or any of the foregoing assumptions.
16. Reliance of the Purchasers. The Administrator and the Purchasers are relying on the
separate credit of the Seller in entering into and performing under the terms of the Transaction
Documents to which each is a party (except to the extent that any LOL Company has separate
obligations under the Transaction Documents) and may be materially harmed by a failure to respect
the separate corporate existence of the Seller.
17. Business Purpose. The sole business purpose of the Seller is to acquire Receivables from
the Originators and to sell undivided interests in such Receivables pursuant to the Receivables
Purchase Agreement. The Seller does not conduct business with any entity other than the
Originators, as Originators, Servicer or Sub-Servicers, as the case may be, the Lockbox Banks, the
Administrator, the Purchasers and the parties to certain agreements related to the Transaction
Documents.