EXHIBIT 4.18
EXECUTION COPY
SECOND PRIORITY COLLATERAL AGREEMENT dated
as of December 23, 2003, among LAND O'LAKES, INC.
(the "Company"), the SUBSIDIARIES LISTED IN SCHEDULE
I (together with any Subsidiary of the Company that
becomes a party to this Agreement pursuant to Section
7.16 hereof, the "Guarantors") and U.S. Bank National
Association, as Collateral Agent.
WITNESSETH:
WHEREAS, pursuant to the terms, conditions and provisions of
(a) the Indenture dated as of the date hereof (as amended, restated,
supplemented or otherwise modified from time to time, the "Indenture"), among
the Company, the Guarantors and U.S. Bank National Association, as trustee (the
"Trustee"), and (b) the Purchase Agreement dated as of December 12, 2003 (the
"Purchase Agreement"), among the Company, the Guarantors and X.X. Xxxxxx
Securities Inc. (the "Initial Purchasers"), the Company is issuing $175,000,000
aggregate principal amount of 9% Senior Secured Notes due 2010 and may issue,
from time to time, additional notes in accordance with the provisions of the
Indenture (collectively, the "Notes"), which will be guaranteed on a senior
secured basis by each of the Guarantors;
WHEREAS, pursuant to the Guarantee and Collateral Agreement
dated as of October 11, 2001 (as amended, supplemented or otherwise modified
from time to time, the "First Priority Collateral Agreement"), among the
Company, each of the subsidiaries of the Company party thereto or which becomes
a party thereto pursuant to the Credit Agreements referred to below (together
with the Company, each a "Credit Agreement Grantor" and, collectively, the
"Credit Agreement Grantors") and JPMorgan Chase Bank (formerly known as The
Chase Manhattan Bank), as collateral agent, the Credit Agreement Grantors have
granted to the Credit Facilities Collateral Agent (as defined below) a
first-priority lien and security interest in the Collateral (as defined below)
in connection with (i) the Credit Agreement dated as of October 11, 2001 (as
amended, supplemented or otherwise modified from time to time, the "Term Credit
Agreement") among the Company, the lenders party thereto and JPMorgan Chase Bank
(formerly known as The Chase Manhattan Bank), as administrative agent, and (ii)
the Amended and Restated Five-Year Credit Agreement dated as of October 11, 2001
(as amended, supplemented or otherwise modified from time to time, the
"Revolving Credit Agreement" and together with the Term Credit Agreement, the
"Credit Agreements"), among the Company, the lenders party thereto, JPMorgan
Chase Bank (formerly known as The Chase Manhattan Bank), as administrative
agent, and CoBank, ACB as co-administrative agent;
WHEREAS, the Company, the Collateral Agent and the Credit
Facilities Collateral Agent have entered into a Lien Subordination and
Intercreditor Agreement, dated as of the date hereof (the "Intercreditor
Agreement") together with the Guarantors,
pursuant to which the lien upon and security interest in the Collateral granted
by this Agreement are and shall be subordinated in all respects to the lien upon
and security interest in the Collateral granted pursuant to, and subject to the
terms and conditions of, the Senior Obligations Security Documents;
WHEREAS, each Grantor is executing and delivering this
Agreement pursuant to the terms of the Indenture to induce the Trustee to enter
into the Indenture and the Initial Purchasers to purchase the Notes; and
WHEREAS, each Grantor has duly authorized the execution,
delivery and performance of this Agreement.
NOW, THEREFORE, for and in consideration of the premises, and
of the mutual covenants herein contained, and in order to induce the Trustee to
enter into the Indenture and the Initial Purchasers to purchase the Notes, each
Grantor and the Collateral Agent, on behalf of itself and each Secured Party
(and each of their respective successors or assigns), hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Certain Defined Terms. (a) Capitalized terms
used in this Agreement and not otherwise defined herein have the meanings
specified in the Indenture. All terms defined in the New York UCC (as defined
herein) and not defined in this Agreement have the meanings specified therein;
the term "instrument" shall have the meaning specified in Article 9 of the New
York UCC.
(b) The rules of construction specified in Section 1.04 of the
Indenture also apply to this Agreement.
SECTION 1.02. Other Defined Terms. As used in this Agreement,
the following terms have the meanings specified below:
"Account Debtor" means any Person who is or who may become
obligated to any Grantor under, with respect to or on account of, an Account.
"Accounts" means all Accounts (as defined in the New York
Uniform Commercial Code) and Account Assets with respect to such Accounts,
including those related to the dairy businesses of the Grantors and payable to
such parties, including, but not limited to, accounts receivable generated from
the marketing and sale of milk, butter, cheese, cream products, dairy and
non-dairy spreads, whey, non-fat dry milk, cocoa, and other dairy or dairy
related products sold for consumer use, licensing fees relating to dairy
products and dairy related services, and the proceeds thereof, but specifically
excluding the CoBank Accounts and the Account Assets with respect to such CoBank
Accounts.
"Collateral" has the meaning assigned to such term in Section
4.01.
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"Copyright License" means any written agreement, now or
hereafter in effect, granting any right to any third party under any copyright
now or hereafter owned by any Grantor or that such Grantor otherwise has the
right to license, or granting any right to any Grantor under any copyright now
or hereafter owned by any third party, and all rights of such Grantor under any
such agreement.
"Copyrights" means all of the following now owned or hereafter
acquired by any Grantor: (a) all copyright rights in any work subject to the
copyright laws of the United States or any other country, whether as author,
assignee, transferee or otherwise, and (b) all registrations and applications
for registration of any such copyright in the United States or any other
country, including registrations, recordings, supplemental registrations and
pending applications for registration in the United States Copyright Office,
including those listed on Schedule III.
"Credit Agreements" has the meaning assigned to such term in
the preamble of this Agreement.
"Credit Facilities Collateral Agent" means JPMorgan Chase
Bank, in its capacity as collateral agent under the Credit Agreements and the
Credit Facilities Security Documents, and its successors in such capacity.
"Credit Facilities Security Documents" has the meaning
assigned to such term in the Intercreditor Agreement.
"Equipment" means all Equipment (as defined in the New York
UCC), but specifically excluding the following: (x) the (i) Niro Dryer (Asset
No. 216376), (ii) Niro Dryer (Asset No. 216392), (iii) Niro Dryer (Asset No.
216394), (iv) APV Evaporator (Asset No. 216391), (v) APV Evaporator (Asset No.
216435), (vi) APV Evaporator (Asset No. 216436), (vii) Simmon butter churn
(Asset No. 216461), (viii) Two Xxxxxxx Dryers - Carlisle Expansion (Asset No.
224922), and (ix) GEA Evaporator - Carlisle Expansion (Asset No. 226443) owned
by the Company and currently located at its Carlisle, Pennsylvania plant, (y)
any improvements, model conversions, additions, accessions, attachments,
replacements and substitutions of, for and to any of the foregoing, and (z) any
proceeds (as defined by the Pennsylvania Uniform Commercial Code) of the
foregoing.
"Equity Interests" means shares of capital stock, interests in
a cooperative corporation, partnership interests, membership interests in a
limited liability company, beneficial interests in a trust (other than any trust
subject to ERISA or non-qualified benefit plans) or other equity ownership
interests in a Person.
"Federal Securities Laws" has the meaning assigned to such
term in Section 5.04.
"First Priority Collateral Agreement" has the meaning assigned
to such term in the preamble of this Agreement.
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"General Intangibles" means all choses in action and causes of
action and all other intangible personal property of any Grantor of every kind
and nature (other than Accounts) now owned or hereafter acquired by any Grantor,
including corporate or other business records, indemnification claims, contract
rights (including rights under leases, whether entered into as lessor or lessee,
Hedging Agreements and other agreements), Intellectual Property, goodwill,
registrations, franchises, tax refund claims and any letter of credit,
guarantee, claim, security interest or other security held by or granted to any
Grantor to secure payment by an Account Debtor of any of the Accounts.
"Grantors" means the Company and the Guarantors.
"Guarantors" has the meaning assigned to such term in the
preamble of this Agreement.
"Hedging Agreement" means any interest rate protection
agreement, foreign currency exchange agreement, commodity price protection
agreement or other interest or currency exchange rate or commodity price hedging
arrangement.
"Indebtedness" has the meaning assigned to such term in the
Credit Agreements.
"Indenture" has the meaning assigned to such term in the
preamble of this Agreement.
"Indenture Documents" means the Indenture, the Notes, this
Agreement, the other Security Documents and the Intercreditor Agreement, as such
agreements may be amended, supplemented or otherwise modified from time to time.
"Initial Purchasers" has the meaning assigned to such term in
the preamble of this Agreement.
"Intellectual Property" means all intellectual and similar
property of any Grantor of every kind and nature now owned or hereafter acquired
by any Grantor, including inventions, designs, Patents, Copyrights, Licenses,
Trademarks, trade secrets, confidential or proprietary technical and business
information, know-how, show-how or other data or information, software and
databases and all embodiments or fixations thereof and related documentation,
registrations and franchises, and all additions, improvements and accessions to,
and books and records describing or used in connection with, any of the
foregoing.
"Intercreditor Agreement" has the meaning assigned to such
term in the preamble of this Agreement.
"License" means any Patent License, Trademark License,
Copyright License or other license or sublicense to which any Grantor is a
party, including those listed on Schedule III.
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"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional sale or other
title retention agreement or lease in the nature thereof).
"New York UCC" means the Uniform Commercial Code as from time
to time in effect in the State of New York.
"Non-Pledged Equity Interests" means Equity Interests owned by
any Grantor which do not constitute Pledged Collateral.
"Noteholders" means the holders of the Notes.
"Note Obligations" means all obligations of the Company and
the Guarantors under the Indenture, the Notes and the other Indenture Documents,
including obligations to the Trustee and the Collateral Agent, whether for
payment of principal of, interest (including additional interest, if any) or
premium on the Notes and all other monetary obligations of the Company and the
Guarantors under the Indenture, the Notes and the other Indenture Documents,
whether for fees, expenses, indemnification or otherwise.
"Notes" has the meaning assigned to such term in the preamble
of this Agreement.
"Patent License" means any written agreement, now or hereafter
in effect, granting to any third party any right to make, use or sell any
invention on which a patent, now or hereafter owned by any Grantor or that any
Grantor otherwise has the right to license, is in existence, or granting to any
Grantor any right to make, use or sell any invention on which a patent, now or
hereafter owned by any third party, is in existence, and all rights of any
Grantor under any such agreement.
"Patents" means all of the following now owned or hereafter
acquired by any Grantor: (a) all letters patent of the United States or any
other country, all registrations and recordings thereof, and all applications
for letters patent of the United States or any other country, including
registrations, recordings and pending applications in the United States Patent
and Trademark Office or any similar offices in any other country, including
those listed on Schedule III, and (b) all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.
"Perfection Certificate" means a certificate substantially in
the form of Annex II, completed and supplemented with the schedules and
attachments contemplated thereby, and duly executed by the chief financial
officer and the chief legal officer of the Company.
"Pledged Collateral" has the meaning assigned to such term in
Section 3.01.
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"Pledged Debt Securities" has the meaning assigned to such
term in Section 3.01.
"Pledged Securities" means any promissory notes, stock
certificates or other securities now or hereafter included in the Pledged
Collateral, including all certificates, instruments or other documents
representing or evidencing any Pledged Collateral.
"Pledged Stock" has the meaning assigned to such term in
Section 3.01.
"Pledgors" means the Company and the Guarantors.
"Proceeds" has the meaning specified in Section 9-102 of the
New York UCC.
"Purchase Agreement" has the meaning assigned to such term in
the preamble of this Agreement.
"Revolving Credit Agreement" has the meaning assigned to such
term in the preamble of this Agreement.
"Secured Parties" means, at any time, the Trustee, the
Collateral Agent and each other holder of, or obligee in respect of, any Note
Obligations outstanding at such time.
"Security Documents" means this Agreement and any other
document or instrument pursuant to which a Lien is granted by the Company or any
Guarantor to secure any Note Obligations or under which rights or remedies with
respect to such Lien are governed, as such agreements may be amended, modified
or supplemented from time to time.
"Security Interest" has the meaning assigned to such term in
Section 4.01.
"Seed" means crop seed (including, but not limited to, seed
for soybeans, corn, alfalfa, forage and turf grasses).
"Senior Collateral Agent" has the meaning assigned to such
term in the Intercreditor Agreement.
"Senior Obligations" has the meaning assigned to such term in
the Intercreditor Agreement.
"Senior Obligations Documents" means any Senior Obligations
Security Documents and any instrument or document under which any Senior
Obligations have been issued or incurred.
"Senior Obligations Security Documents" has the meaning
assigned to such term in the Intercreditor Agreement.
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"Term Credit Agreement" has the meaning assigned to such term
in the preamble of this Agreement.
"Trademark License" means any written agreement, now or
hereafter in effect, granting to any third party any right to use any trademark
now or hereafter owned by any Grantor or that any Grantor otherwise has the
right to license, or granting to any Grantor any right to use any trademark now
or hereafter owned by any third party, and all rights of any Grantor under any
such agreement.
"Trademarks" means all of the following now owned or hereafter
acquired by any Grantor: (a) all trademarks, service marks, trade names,
corporate names, company names, business names, fictitious business names, trade
styles, trade dress, logos, other source or business identifiers, designs and
general intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all registration and
recording applications filed in connection therewith, including registrations
and registration applications in the United States Patent and Trademark Office
or any similar offices in any State of the United States or any other country or
any political subdivision thereof, and all extensions or renewals thereof,
including those listed on Schedule III, (b) all goodwill associated therewith or
symbolized thereby and (c) all other assets, rights and interests that uniquely
reflect or embody such goodwill.
"Trustee" has the meaning assigned to such term in the
preamble of this Agreement.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date hereof.
ARTICLE II
Other Agreements
SECTION 2.01. Intercreditor Agreement. Notwithstanding any
other provision contained herein, this Agreement, the Liens created hereby and
the rights, remedies, duties and obligations provided for herein are subject in
all respects to the provisions of the Intercreditor Agreement and, to the extent
provided therein, the Senior Obligations Security Documents. In the event of any
conflict or inconsistency between the provisions of this Agreement and the
Intercreditor Agreement, the provisions of the Intercreditor Agreement shall
control.
SECTION 2.02. Indenture. In the event of any conflict or
inconsistency between the provisions of this Agreement and the Indenture, the
provisions of the Indenture shall control.
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ARTICLE III
Pledge of Securities
SECTION 3.01. Pledge. In accordance with, and to the extent
consistent with, the terms of the Intercreditor Agreement, as security for the
payment or performance, as the case may be, in full of the Note Obligations,
each Pledgor hereby assigns and pledges to the Collateral Agent, its successors
and assigns, for the benefit of the Secured Parties, and hereby grants to the
Collateral Agent, its successors and assigns, for the benefit of the Secured
Parties, a security interest in, all of such Pledgor's right, title and interest
in, to and under (a)(i) the Equity Interests owned by such Pledgor and listed on
Schedule II, (ii) all other Equity Interests of Farmland Feed (as defined in the
Credit Agreements) or any wholly owned Restricted Subsidiary of the Company or
Farmland Feed obtained by such Pledgor in the future which is required to be
pledged under this Agreement pursuant to Section 11.10(b) of the Indenture, and
(iii) all other Equity Interests obtained in the future by such Pledgor which
are pledged to secure any Senior Obligations, and in each case the certificates,
if any, representing all such Equity Interests (the "Pledged Stock"): provided
that the Pledged Stock shall not include (A) more than 65% of the issued and
outstanding Voting Stock of any Foreign Subsidiary, (B) the Capital Stock of LOL
Farmland Feed SPV, LLC or any other Securitization Vehicle, or (C) any Excluded
Securities; (b)(i) the debt securities owned by such Pledgor and listed opposite
the name of such Pledgor on Schedule II and (ii) any debt securities in the
future issued to such Pledgor which are pledged to secure any Senior
Obligations, and in each case the promissory notes and other instruments, if
any, evidencing such debt securities (the "Pledged Debt Securities"); (c) all
property of any nature not described in clause (a) or (b) above that may be
delivered to and held by a Senior Collateral Agent (or, after the Discharge of
Priority Lien Obligations, the Collateral Agent) pursuant to the terms of this
Section 3.01; (d) subject to Section 3.05, all payments of principal or
interest, dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of, in exchange for or
upon the conversion of, and all other Proceeds received in respect of, the
securities referred to in clauses (a) and (b) above; (e) subject to Section
3.05, all rights and privileges of such Pledgor with respect to the securities
and other property referred to in clauses (a), (b), (c) and (d) above; and (f)
all Proceeds of any of the foregoing (the items referred to in clauses (a)
through (f) above being collectively referred to as the "Pledged Collateral").
TO HAVE AND TO HOLD the Pledged Collateral, in accordance
with, and to the extent consistent with, the terms of the Intercreditor
Agreement, together with all right, title, interest, powers, privileges and
preferences pertaining or incidental thereto, unto the Collateral Agent, its
successors and assigns, for the ratable benefit of the Secured Parties, forever;
subject, however, to the terms, covenants and conditions hereinafter set forth.
SECTION 3.02. Delivery of the Pledged Collateral. (a) Each
Pledgor agrees promptly to deliver or cause to be delivered to a Senior
Collateral Agent (or, after the Discharge of Priority Lien Obligations, the
Collateral Agent) any and all Pledged Securities, unless such Pledged Securities
have previously been delivered to a Senior
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Collateral Agent (or, after the Discharge of Priority Lien Obligations, the
Collateral Agent).
(b) Each Pledgor will cause any Indebtedness for borrowed
money owed to such Pledgor by any Person to be evidenced by a duly executed
promissory note that is pledged and delivered to a Senior Collateral Agent (or,
after the Discharge of Priority Lien Obligations, the Collateral Agent) pursuant
to the terms hereof; provided that no promissory note shall be necessary in the
case of Indebtedness owing by the Company to any Restricted Subsidiary or by any
Restricted Subsidiary to any other Restricted Subsidiary or to the Company so
long as such Indebtedness, if ever represented by a promissory note, is pledged
pursuant to this Agreement. Notwithstanding the foregoing, all Indebtedness of
Subsidiaries (other than Restricted Subsidiaries) and third parties that is
owing to the Company or any Restricted Subsidiary shall be pledged pursuant to
this Agreement and a Senior Collateral Agent (or, after the Discharge of
Priority Lien Obligations, the Collateral Agent) shall have received all such
promissory notes, if any, together with instruments of transfer with respect
thereto endorsed in blank within ten days after the Closing Date; provided, that
if after ten days following the Closing Date, a promissory note which evidences
such Indebtedness is created or found, such promissory note will be pledged to a
Senior Collateral Agent (or, after the Discharge of Priority Lien Obligations,
the Collateral Agent), as set forth in this paragraph. For purposes of this
Section 3.02(b) only, the term "Restricted Subsidiary" shall have the meaning
ascribed thereto in the Credit Agreements.
(c) Upon delivery to a Senior Collateral Agent (or, after the
Discharge of Priority Lien Obligations, the Collateral Agent) (i) any Pledged
Securities shall be accompanied by stock powers duly executed in blank or other
instruments of transfer satisfactory to such Senior Collateral Agent (or, after
the Discharge of Priority Lien Obligations, the Collateral Agent) and by such
other instruments and documents as such Senior Collateral Agent (or, after the
Discharge of Priority Lien Obligations, the Collateral Agent) may reasonably
request and (ii) all other property comprising part of the Pledged Collateral
shall be accompanied by proper instruments of assignment duly executed by the
applicable Pledgor and such other instruments or documents as such Senior
Collateral Agent (or, after the Discharge of Priority Lien Obligations, the
Collateral Agent) may reasonably request. Each delivery of Pledged Securities
shall be accompanied by a schedule describing the securities, which schedule
shall be attached hereto as Schedule II and made a part hereof; provided that
failure to attach any such schedule hereto shall not affect the validity of such
pledge of such Pledged Securities. Each schedule so delivered shall supplement
any prior schedules so delivered.
SECTION 3.03. Representations, Warranties and Covenants. The
Pledgors jointly and severally represent, warrant and covenant to and with the
Collateral Agent, for the benefit of the Secured Parties, that:
(a) Schedule II correctly sets forth the percentage of the
issued and outstanding shares of each class of the capital stock of the
issuer thereof represented by such Pledged Stock and Schedule II sets
forth all Pledged Stock and Pledged Debt Securities pledged to the
Credit Facilities Collateral Agent as of
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the date hereof pursuant to the First Priority Collateral Agreement
except for the Equity Interests of LOL Farmland Feed SPV, LLC;
(b) the Pledged Stock and Pledged Debt Securities have been
duly and validly authorized and issued by the issuers thereof and (i)
in the case of Pledged Stock, are fully paid and nonassessable and (ii)
in the case of Pledged Debt Securities, are legal, valid and binding
obligations of the issuers thereof;
(c) except for the security interests granted hereunder and
Permitted Collateral Liens, each of the Pledgors (i) is and will
continue to be the direct owner, beneficially and of record, of the
Pledged Securities indicated on Schedule II as owned by such Pledgor,
(ii) holds the same free and clear of all Liens, (iii) will make no
assignment, pledge, hypothecation or transfer of, or create or permit
to exist any security interest in or other Lien on, the Pledged
Collateral, other than pursuant hereto, and (iv) subject to Section
3.05, will cause any and all Pledged Collateral, whether for value paid
by the Pledgor or otherwise, to be forthwith deposited with a Senior
Collateral Agent (or, after the Discharge of Priority Lien Obligations,
the Collateral Agent) and pledged or assigned hereunder; provided that
nothing herein shall prohibit a sale, assignment, transfer or other
disposition of the Pledged Collateral not prohibited by the Indenture;
(d) except for restrictions and limitations imposed by the
Indenture Documents, the Senior Obligations Documents, any Designated
Junior Obligations Security Documents (as defined in the Intercreditor
Agreement), any Designated Junior Obligations Governing Documents (as
defined in the Intercreditor Agreement) or securities laws generally or
Section 11.1 of the Limited Liability Company Agreement of Farmland
Feed, the Pledged Collateral is and will continue to be freely
transferable and assignable, and none of the Pledged Collateral is or
will be subject to any option, right of first refusal, shareholders
agreement, charter or by-law provisions or contractual restriction of
any nature that might prohibit, impair, delay or otherwise affect the
pledge of such Pledged Collateral hereunder, the sale or disposition
thereof pursuant hereto or the exercise by the Collateral Agent of
rights and remedies hereunder;
(e) each of the Pledgors (i) has the power and authority to
pledge the Pledged Collateral pledged by it hereunder in the manner
hereby done or contemplated and (ii) will defend its title or interest
thereto or therein against any and all Liens (other than Permitted
Collateral Liens), however arising, of all Persons whomsoever;
(f) no consent or approval of any Governmental Authority, any
securities exchange or any other Person was or is necessary to the
validity of the pledge effected hereby (other than such as have been
obtained and are in full force and effect);
(g) by virtue of the execution and delivery by the Pledgors of
this Agreement and the Intercreditor Agreement, upon delivery to a
Senior Collateral
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Agent (or, after the Discharge of Priority Lien Obligations, the
Collateral Agent) of the Pledged Securities (or, in the case of Pledged
Securities which are now in the possession of the Credit Facilities
Collateral Agent, upon the execution and delivery of the Intercreditor
Agreement) the Collateral Agent will obtain a legal, valid and
perfected lien upon and security interest in such Pledged Securities as
security for the payment and performance of the Note Obligations;
(h) the pledge effected hereby is effective to vest in the
Collateral Agent, for the benefit of the Secured Parties, the rights of
the Collateral Agent in the Pledged Collateral as set forth herein; and
(i) all Pledged Securities have been delivered to the Credit
Facilities Collateral Agent in accordance with Section 3.02.
SECTION 3.04. Registration in Nominee Name; Denominations.
Each Senior Collateral Agent (or, after the Discharge of Priority Lien
Obligations, the Collateral Agent), on behalf of the Secured Parties, shall have
the right (in its sole and absolute discretion) to hold the Pledged Securities
in its name as agent for the Noteholders, the name of its nominee (as pledgee or
as sub-agent) or the name of the applicable Pledgor, endorsed or assigned in
blank or in favor of such Senior Collateral Agent (or, after the Discharge of
Priority Lien Obligations, the Collateral Agent). Each Pledgor will promptly
give to the Collateral Agent copies of any notices or other communications
received by it with respect to Pledged Securities registered in the name of such
Pledgor. After the Discharge of Priority Lien Obligations, the Collateral Agent
shall at all times have the right to exchange the certificates representing
Pledged Securities for certificates of smaller or larger denominations for any
purpose consistent with this Agreement and the Intercreditor Agreement.
SECTION 3.05. Voting Rights: Dividends and Interest, etc. (a)
In accordance with, and to the extent consistent with, the terms of the
Intercreditor Agreement, unless and until an Event of Default shall have
occurred and be continuing and a Senior Collateral Agent (or, if after the
Discharge of Priority Lien Obligations, the Collateral Agent) shall have
notified the Pledgors that their rights under this Section are being suspended:
(i) Each Pledgor shall be entitled to exercise any and all
voting and/or other consensual rights and powers inuring to an owner of
Pledged Securities or any part thereof for any purpose consistent with
the terms of this Agreement and the Indenture Documents; provided that
such rights and powers shall not be exercised in any manner that could
materially and adversely affect the rights inuring to a holder of any
Pledged Securities or the rights and remedies of any of the Collateral
Agent or the other Secured Parties under this Agreement or the
Indenture Documents, or the ability of the Secured Parties to exercise
the same.
(ii) After the Discharge of Priority Lien Obligations, the
Collateral Agent shall execute and deliver to each Pledgor, or cause to
be executed and delivered to such Pledgor, all such proxies, powers of
attorney and other instruments as such
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Pledgor may reasonably request for the purpose of enabling such Pledgor
to exercise the voting and/or consensual rights and powers it is
entitled to exercise pursuant to subparagraph (i) above.
(iii) Each Pledgor shall be entitled to receive and retain any
and all dividends, interest, principal and other distributions paid on
or distributed in respect of the Pledged Securities to the extent and
only to the extent that such dividends, interest, principal and other
distributions are permitted by, and otherwise paid or distributed in
accordance with, the terms and conditions of the Indenture Documents
and applicable laws; provided that any noncash dividends, interest,
principal or other distributions that would constitute Pledged Stock or
Pledged Debt Securities, whether resulting from a subdivision,
combination or reclassification of the outstanding capital stock of the
issuer of any Pledged Securities or received in exchange for Pledged
Securities or any part thereof, or in redemption thereof, or as a
result of any merger, consolidation, acquisition or other exchange of
assets to which such issuer may be a party or otherwise, shall be and
become part of the Pledged Collateral, and, if received by any Pledgor,
shall not be commingled by such Pledgor with any of its other funds or
property but shall be held separate and apart therefrom, shall be held
in trust for the benefit of the Collateral Agent and shall be forthwith
delivered to a Senior Collateral Agent (or, after the Discharge of
Priority Lien Obligations, the Collateral Agent) in the same form as so
received (with any necessary endorsement).
(b) In accordance with, and to the extent consistent with, the
terms of the Intercreditor Agreement, upon the occurrence and during the
continuance of an Event of Default, after a Senior Collateral Agent (or, after
the Discharge of Priority Lien Obligations, the Collateral Agent) shall have
notified the Pledgors of the suspension of their rights under paragraph (a)(iii)
of this Section 3.05 (or, prior to the Discharge of Priority Lien Obligations,
under any comparable provision of any Senior Obligations Security Document),
then all rights of any Pledgor to dividends, interest, principal or other
distributions that such Pledgor is authorized to receive pursuant to paragraph
(a)(iii) of this Section 3.05 shall cease, and all such rights shall thereupon
become vested in such Senior Collateral Agent (or, after the Discharge of
Priority Lien Obligations, the Collateral Agent), which shall have the sole and
exclusive right and authority to receive and retain such dividends, interest,
principal or other distributions. All dividends, interest, principal or other
distributions received by any Pledgor contrary to the provisions of this Section
3.05 shall be held in trust for the benefit of the Collateral Agent, shall be
segregated from other property or funds of such Pledgor and shall be forthwith
delivered to a Senior Collateral Agent (or, after the Discharge of Priority Lien
Obligations, the Collateral Agent) upon demand in the same form as so received
(with any necessary endorsement). Any and all money and other property paid over
to or received by the Collateral Agent pursuant to the provisions of this
paragraph (b) shall, subject to the provisions of the Intercreditor Agreement,
be retained by the Collateral Agent in an account to be established by the
Collateral Agent upon receipt of such money or other property and shall be
applied in accordance with the provisions of Section 5.02. After all Events of
Default have been cured or waived, the Collateral Agent shall, within five
Business Days after all such Events of Default have been cured or waived, repay
to
12
each Pledgor (without interest) all dividends, interest, principal or other
distributions that such Pledgor would otherwise be permitted to retain pursuant
to the terms of paragraph (a)(iii) of this Section 3.05 and that remain in such
account.
(c) In accordance with, and to the extent consistent with, the
terms of the Intercreditor Agreement, upon the occurrence and during the
continuance of an Event of Default, after a Senior Collateral Agent (or, after
the Discharge of Priority Lien Obligations, the Collateral Agent) shall have
notified the Pledgors of the suspension of their rights under paragraph (a)(i)
of this Section 3.05 (or, prior to the Discharge of Priority Lien Obligations,
under any comparable provision of any Senior Obligations Security Document),
then all rights of any Pledgor to exercise the voting and consensual rights and
powers it is entitled to exercise pursuant to paragraph (a)(i) of this Section
3.05, and the obligations of the Collateral Agent under paragraph (a)(ii) of
this Section 3.05, shall cease, and all such rights shall thereupon become
vested in such Senior Collateral Agent (or, after the Discharge of Priority Lien
Obligations, the Collateral Agent), which shall have the sole and exclusive
right and authority to exercise such voting and consensual rights and powers;
provided that, and to the extent consistent with the Intercreditor Agreement,
after the Discharge of Priority Lien Obligations, unless otherwise directed by
holders of at least 25% in aggregate principal amount of the outstanding Notes,
the Collateral Agent shall have the right from time to time following and during
the continuance of an Event of Default to permit the Pledgors to exercise such
rights.
(d) Any notice given by a Senior Collateral Agent (or, after
the Discharge of Priority Lien Obligations, the Collateral Agent) to the
Pledgors suspending their rights under paragraph (a) of this Section 3.05 (i)
may be given by telephone if promptly confirmed in writing, (ii) may be given to
one or more of the Pledgors at the same or different times and (iii) may suspend
the rights of the Pledgors under paragraph (a)(i) or paragraph (a)(iii) in part
without suspending all such rights (as specified by such Senior Collateral Agent
(or, after the Discharge of Priority Lien Obligations, the Collateral Agent) in
its sole and absolute discretion) and without waiving or otherwise affecting the
right of such Senior Collateral Agent (or, after the Discharge of Priority Lien
Obligations, the Collateral Agent) to give additional notices from time to time
suspending other rights so long as an Event of Default has occurred and is
continuing.
ARTICLE IV
Security Interests in Personal Property
SECTION 4.01. Security Interest. (a) In accordance with, and
to the extent consistent with, the terms of the Intercreditor Agreement, as
security for the payment or performance, as the case may be, in full of the Note
Obligations, each Grantor hereby assigns and pledges to the Collateral Agent,
its successors and assigns, for the ratable benefit of the Secured Parties, and
hereby grants to the Collateral Agent, its successors and assigns, for the
ratable benefit of the Secured Parties, a security interest (the "Security
Interest"), in all right, title or interest now owned or at any time hereafter
acquired by such Grantor or in which such Grantor now has or at any time in the
future
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may acquire any right, title or interest in, to or under the following
(collectively, the "Collateral"):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Documents;
(iv) all Equipment;
(v) all General Intangibles (other than Non-Pledged Equity
Interests);
(vi) all Instruments;
(vii) all Inventory;
(viii) all Seed;
(ix) all Investment Property (other than Non-Pledged Equity
Interests);
(x) all books and records pertaining to the Collateral; and
(xi) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing and all collateral security
and guarantees given by any Person with respect to any of the
foregoing;
provided, however, that Collateral shall not include (i) CoBank Accounts and
Account Assets with respect to CoBank Accounts, or (ii) any right, title or
interest of any Grantor in, to or under any assets subject to any Liens securing
Indebtedness permitted under Section 4.03(b)(vii) of the Indenture, to the
extent the documents or instruments evidencing, governing or securing such Liens
prohibit the grant of other Liens on such assets or the right, title and
interest of such Grantor therein without the consent of the holder of such
Indebtedness and after such Grantor has used its commercially reasonable efforts
to obtain the consent of such holder, such consent has not been obtained.
(b) Each Grantor hereby irrevocably authorizes the Collateral
Agent at any time and from time to time to file in any relevant jurisdiction any
initial financing statements (including fixture filings) and amendments thereto
that contain the information required by Article 9 of the Uniform Commercial
Code of each applicable jurisdiction for the filing of any financing statement
or amendment, including (a) whether the Grantor is an organization, the type of
organization and any organizational identification number issued to the Grantor
and (b) in the case of a financing statement filed as a fixture filing or
covering Collateral constituting minerals or the like to be extracted or timber
to be cut, a sufficient description of the real property to which such
Collateral relates. The Grantor agrees to provide such information to the
Collateral Agent promptly upon request. The financing statements filed hereunder
may describe the Collateral as "all assets."
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Each Grantor also ratifies its authorization for the
Collateral Agent to file in any relevant jurisdiction any initial financing
statements or amendments thereto if filed prior to the date hereof.
In accordance with, and to the extent consistent with, the
terms of the Intercreditor Agreement, the Collateral Agent is further authorized
to file filings with the United States Patent and Trademark Office or United
States Copyright Office (or any successor office or any similar office in any
other country) or other documents for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Security Interest granted by each
Grantor, without the signature of any Grantor, and naming any Grantor or the
Grantors as debtors and the Collateral Agent as secured party, such filing to be
in substantially the form of Exhibits A-l, A-2 and A-3.
(c) The Security Interest is granted as security only and
shall not subject the Collateral Agent or any other Secured Party to, or in any
way alter or modify, any obligation or liability of any Grantor with respect to
or arising out of the Collateral.
SECTION 4.02. Representations and Warranties. The Grantors
jointly and severally represent and warrant to the Collateral Agent and the
Secured Parties that:
(a) each Grantor has good and valid rights in and title to the
Collateral with respect to which it has purported to grant a Security
Interest hereunder and has full power and authority to grant to the
Collateral Agent the Security Interest in such Collateral pursuant
hereto and to execute, deliver and perform its obligations in
accordance with the terms of this Agreement, without the consent or
approval of any other Person other than any consent or approval that
has been obtained or the absence of any consent or approval relating
only to immaterial portions of the Collateral;
(b) (i) the Perfection Certificate has been duly prepared,
completed and executed and the information set forth therein, including
the exact legal name of such Grantor, is correct and complete in all
material respects. Uniform Commercial Code financing statements
(including fixture filings, as applicable) or other appropriate
filings, recordings or registrations containing a description of the
Collateral have been prepared by the Collateral Agent based upon the
information provided to the Collateral Agent in the Perfection
Certificate for filing in each governmental, municipal or other office
specified in Schedule 2 to the Perfection Certificate, which are all
the filings, recordings and registrations (other than filings required
to be made in the United States Patent and Trademark Office and the
United States Copyright Office in order to perfect the Security
Interest in Collateral consisting of United States Patents, Trademarks
and Copyrights) that are necessary to publish notice of and protect the
validity of and to establish a legal, valid and perfected security
interest in favor of the Collateral Agent (for the ratable benefit of
the Secured Parties) in respect of all Collateral in which the Security
Interest may be perfected by filing, recording or registration in the
United States (or any political subdivision thereof) and its
territories and possessions, and no further or subsequent filing,
refiling, recording, rerecording,
15
registration or reregistration is necessary in any such jurisdiction
(other than the filing of the documents described in this Section
4.02(b)(i), and except as provided under applicable law with respect to
the filing of continuation statements); and (ii) each Grantor
represents and warrants that a fully executed agreement substantially
in the form of Exhibits X-x, X-0 and A-3 hereto and containing a
description of all Collateral consisting of Intellectual Property with
respect to United States Patents, United States registered Trademarks
(and Trademarks for which United States registration applications are
pending) and United States registered Copyrights, have been or, in the
case of United States registered Copyrights, will be, within one month
after the execution of this Agreement, delivered to the Collateral
Agent for recording by the United States Patent and Trademark Office
and the United States Copyright Office pursuant to 35 U.S.C. Section
261, 15 U.S.C. Section 1060 or 17 U.S.C. Section 205 and the
regulations thereunder, as applicable, and otherwise as may be required
pursuant to the laws of any other necessary jurisdiction, to protect
the validity of and to establish a legal, valid and perfected security
interest in favor of the Collateral Agent (for the ratable benefit of
the Secured Parties) in respect of all Collateral consisting of United
States Patents, United States Trademarks and Copyrights in which a
security interest may be perfected by filing, recording or registration
in the United States (or any political subdivision thereof) and its
territories and possessions, or in any other necessary jurisdiction,
and no further or subsequent filing, refiling, recording, rerecording,
registration or reregistration is necessary (other than the filing of
the documents described in Section 4.02(b)(i) and the recording of the
documents described in this Section 4.02(b)(ii) in accordance with
Section 4.02(c)(iii), and other than such actions as are necessary to
perfect the Security Interest with respect to any Collateral consisting
of Patents, Trademarks and Copyrights (or registration or application
for registration thereof) acquired or developed after the date hereof);
(c) the Security Interest constitutes (i) a legal and valid
security interest in all the Collateral securing the payment and
performance of the Note Obligations, (ii) subject to the filings
described in Section 4.02(b), a perfected security interest in all
Collateral in which a security interest may be perfected by filing,
recording or registering a financing statement or analogous document in
the United States (or any political subdivision thereof) and its
territories and possessions pursuant to the Uniform Commercial Code or
other applicable law in such jurisdictions and (iii) a security
interest that shall be perfected in all Collateral in which a security
interest may be perfected upon the receipt and recording of an
agreement in substantially the form of Exhibits X-x, X-0 and A-3 hereto
with the United States Patent and Trademark Office and the United
States Copyright Office, as applicable, within the three-month period
(commencing as of the date hereof) pursuant to 35 U.S.C. Section 261 or
15 U.S.C. Section 1060 or the one month period (commencing as of the
date hereof) pursuant to 17 U.S.C. Section 205 and otherwise as may be
required pursuant to the laws of any other necessary jurisdiction. The
Security Interest is prior to any other Lien on any of the Collateral,
other than Permitted Collateral Liens; and
16
(d) the Collateral is owned by the Grantors free and clear of
any Lien, except for Permitted Collateral Liens. None of the Grantors
has filed or consented to the filing of (i) any financing statement or
analogous document under the Uniform Commercial Code or any other
applicable laws covering any Collateral, (ii) any assignment in which
any Grantor assigns any Collateral or any security agreement or similar
instrument covering any Collateral with the United States Patent and
Trademark Office or the United States Copyright Office or (iii) any
assignment in which any Grantor assigns any Collateral or any security
agreement or similar instrument covering any Collateral with any
foreign governmental, municipal or other office, which financing
statement or analogous document, assignment, security agreement or
similar instrument is still in effect, except, in each case, for
Permitted Collateral Liens.
SECTION 4.03. Covenants. (a) Each Grantor agrees promptly to
notify the Collateral Agent in writing of any change (i) in its corporate name,
(ii) in the location of its chief executive office, any office in any
jurisdiction that has not adopted Revised Article 9 of the Uniform Commercial
Code in which it maintains books or records relating to Collateral owned by it
or at which Collateral owned by it is located (including the establishment of
any such new office or facility), (iii) in its identity or type of organization
or corporate structure, (iv) in its Federal Taxpayer Identification Number or
organizational identification number or (v) in its jurisdiction of organization.
Each Grantor agrees to promptly provide the Collateral Agent with certified
organizational documents reflecting any of the changes described in the
preceding sentence. Each Grantor agrees not to effect or permit any change
referred to in the first sentence of this paragraph unless all filings have been
made under the Uniform Commercial Code or otherwise that are required in order
for the Collateral Agent to continue at all times following such change to have
a valid, legal and perfected security interest in all the Collateral in which
the Security Interest can be perfected by filing, recording or registration in
the United States (or any political subdivision thereof). Each Grantor agrees
promptly to notify the Collateral Agent if any material portion of the
Collateral owned or held by such Grantor is damaged or destroyed.
(b) Each Grantor agrees to maintain, at its own cost and
expense, such complete and accurate records with respect to the Collateral owned
by it as is consistent with its current practices and in accordance with such
prudent and standard practices used in industries that are the same as or
similar to those in which such Grantor is engaged, but in any event to include
complete accounting records indicating all payments and proceeds received with
respect to any part of the Collateral, and, at such time or times as the
Collateral Agent may reasonably request, (but not more often than once per
calendar year in the absence of an Event of Default) promptly to prepare and
deliver to the Collateral Agent a duly certified schedule or schedules in form
and detail satisfactory to the Collateral Agent showing the identity, amount and
location of any and all Collateral.
(c) Each year, at the time of delivery of annual financial
statements with respect to the preceding fiscal year pursuant to the Indenture,
the Company shall deliver to the Collateral Agent a certificate executed by the
chief financial officer and the chief legal officer of the Company setting forth
the information required pursuant to Section 2
17
of the Perfection Certificate or confirming that there has been no change in
such information since the date of such certificate or the date of the most
recent certificate delivered pursuant to this Section 4.03(c). Each certificate
delivered pursuant to this Section 4.03 (c) shall identify in the format of
Schedule III all Intellectual Property of any Grantor in existence on the date
thereof and not then listed on such Schedules or previously so identified to the
Collateral Agent.
(d) Each Grantor shall, at its own expense, take any and all
actions necessary to defend title to the Collateral against all persons other
than the holders of Permitted Collateral Liens and to defend the Security
Interest of the Collateral Agent in the Collateral and the priority thereof
against any Lien other than Permitted Collateral Liens.
(e) Each Grantor agrees, at its own expense, to execute,
acknowledge, deliver and cause to be duly filed all such further instruments and
documents and take all such actions as the Collateral Agent, in accordance with,
and to the extent consistent with, the terms of the Intercreditor Agreement, may
from time to time reasonably request to better assure, preserve, protect and
perfect the Security Interest and the rights and remedies created hereby,
including the payment of any fees and taxes required in connection with the
execution and delivery of this Agreement, the granting of the Security Interest
and the filing of any financing statements (including fixture filings) or other
documents in connection herewith or therewith. If any amount payable under or in
connection with any of the Collateral shall be or become evidenced by any
promissory note or other instrument, such note or instrument shall be
immediately pledged and delivered to a Senior Collateral Agent (or, after the
Discharge of Priority Lien Obligations, the Collateral Agent), duly endorsed in
a manner satisfactory to such Senior Collateral Agent (or, after the Discharge
of Priority Lien Obligations, the Collateral Agent). If any limited liability
company membership interests or limited partnership interests held by any
Grantor shall become "securities" within the meaning of Sections 8- 102 and
8-103(c) of the New York UCC, any certificates evidencing such securities shall
immediately be pledged and delivered to a Senior Collateral Agent (or, after the
Discharge of Priority Lien Obligations, the Collateral Agent), duly endorsed in
a manner satisfactory to such Senior Collateral Agent (or, after the Discharge
of Priority Lien Obligations, the Collateral Agent).
Without limiting the generality of the foregoing, each Grantor
hereby authorizes the Collateral Agent, with prompt notice thereof to the
Grantors, to supplement this Agreement by supplementing Schedule III or adding
additional schedules hereto to specifically identify any asset or item that may
constitute Copyrights, Licenses, Patents or Trademarks.
(f) The Collateral Agent and such persons as the Collateral
Agent may reasonably designate shall have the right, at the Grantors' own cost
and expense, to inspect the Collateral, all records related thereto (and to make
extracts and copies from such records) and the premises upon which any of the
Collateral is located, to discuss the Grantors' affairs with the officers of the
Grantors and their independent accountants and to verify under reasonable
procedures the validity, amount, quality, quantity, value,
18
condition and status of, or any other matter relating to, the Collateral,
including, in the case of Accounts or Collateral in the possession of any third
person, by contacting Account Debtors or the third person possessing such
Collateral for the purpose of making such a verification (but not more often
than twice per calendar year in the absence of an Event of Default). The
Collateral Agent shall have the absolute right to share any information it gains
from such inspection or verification with any Secured Party.
(g) In accordance with, and to the extent consistent with, the
terms of the Intercreditor Agreement, at its option, the Collateral Agent may
discharge past due taxes, assessments, charges or fees not permitted under the
Credit Agreements (as defined in the Indenture) or Liens, security interests or
other encumbrances at any time levied or placed on the Collateral and not
permitted under the Indenture, and may pay for the maintenance and preservation
of the Collateral to the extent any Grantor fails to do so as required by the
Indenture or this Agreement, and each Grantor jointly and severally agrees to
reimburse the Collateral Agent on demand for any payment made or any expense
incurred by the Collateral Agent pursuant to the foregoing authorization;
provided, however, that nothing in this Section 4.03(g) shall be interpreted as
excusing any Grantor from the performance of, or imposing any obligation on the
Collateral Agent or any Secured Party to cure or perform any covenants or other
promises of any Grantor with respect to taxes, assessments, charges, fees,
liens, security interests or other encumbrances and maintenance as set forth
herein or in the other Indenture Documents.
(h) If at any time any Grantor shall take a security interest
in any property of an Account Debtor or any other person to secure payment and
performance of an Account having a value in excess of $1,000,000 (provided that
such dollar limitation shall not apply to any intercompany Indebtedness), such
Grantor shall promptly assign such security interest to a Senior Collateral
Agent (or, after the Discharge of Priority Lien Obligations, the Collateral
Agent). Such assignment need not be filed of public record unless necessary to
continue the perfected status of the security interest against creditors of and
transferees from the Account Debtor or other person granting the security
interest.
(i) Each Grantor shall remain liable to observe and perform
all the conditions and obligations to be observed and performed by it under each
contract, agreement or instrument relating to the Collateral, all in accordance
with the terms and conditions thereof, and each Grantor jointly and severally
agrees to indemnify and hold harmless the Collateral Agent and the Secured
Parties from and against any and all liability for such performance.
(j) None of the Grantors shall make or permit to be made an
assignment, pledge or hypothecation of the Collateral or shall grant any other
Lien in respect of the Collateral that would be prohibited by the Indenture.
None of the Grantors shall make or permit to be made any transfer of the
Collateral and each Grantor shall remain at all times in possession of all
material items of Collateral owned by it, except that (a) Inventory may be sold
in the ordinary course of business, (b) unless and (in accordance with, and to
the extent consistent with, the terms of the Intercreditor Agreement) until the
Collateral Agent shall notify the Grantors (which notice may be given by
telephone if promptly confirmed in writing) that an Event of Default shall have
occurred and be continuing and
19
that during the continuance thereof the Grantors shall not sell, convey, lease,
assign, transfer or otherwise dispose of any Collateral, the Grantors may use
and transfer or otherwise dispose of the Collateral in any lawful manner not
inconsistent with the provisions of this Agreement or any Indenture Document,
and (c) Inventory may be in the possession or control of a warehouseman, bailee,
agent or processor (subject to the terms of the next succeeding sentence).
Without limiting the generality of the foregoing, each Grantor agrees that it
shall use commercially reasonable efforts not to permit any Inventory to be in
the possession or control of any warehouseman, bailee, agent or processor at any
time unless such warehouseman, bailee, agent or processor shall have been
notified of the Security Interest and shall have acknowledged in writing, in
form and substance satisfactory to the Collateral Agent, that such bailee or
processor holds the Inventory for the benefit of the Collateral Agent subject to
the Security Interest and shall act upon the instructions of a Senior Collateral
Agent (or, after the Discharge of Priority Lien Obligations, the Collateral
Agent) without further consent from the Grantor, and that such warehouseman,
agent, bailee or processor further agrees to waive and release any Lien held by
it with respect to such Inventory, whether arising by operation of law or
otherwise; provided, however, that notwithstanding the foregoing, the
requirement to notify and obtain any acknowledgment or waiver from any
warehouseman, bailee, agent or processor of the Security Interest shall only
apply to such locations where Inventory is held where the value of such
Inventory exceeds $2,000,000, based on the highest value of such Inventory at
June 30 of the preceding fiscal year.
(k) None of the Grantors will, without the prior written
consent of a Senior Collateral Agent (or, after the Discharge of Priority Lien
Obligations, the Collateral Agent), grant any extension of the time of payment
of any Accounts included in the Collateral, compromise, compound or settle the
same for less than the full amount thereof, release, wholly or partly, any
person liable for the payment thereof or allow any credit or discount whatsoever
thereon, other than extensions, credits, discounts, compromises or settlements
granted or made in the ordinary course of business and consistent with its
current practices and in accordance with such prudent and standard practice used
in industries that are the same as or similar to those in which such Grantor is
engaged.
(l) The Grantors, at their own expense, shall maintain or
cause to be maintained insurance covering physical loss or damage to the
Inventory and Equipment with financially sound and reputable insurers and
against such risks as are customarily insured against by Persons engaged in the
same or similar business, and of such types and in such amounts as are
customarily carried under similar circumstances by such Persons. Subject to the
Intercreditor Agreement, each Grantor irrevocably makes, constitutes and
appoints the Collateral Agent (and all officers, employees or agents designated
by the Collateral Agent) as such Grantor's true and lawful agent (and
attorney-in-fact) for the purpose, during the continuance of an Event of
Default, of making, settling and adjusting claims in respect of Collateral under
policies of insurance, endorsing the name of such Grantor on any check, draft,
instrument or other item of payment for the proceeds of such policies of
insurance and for making all determinations and decisions with respect thereto.
Subject to the Intercreditor Agreement, in the event that any Grantor at any
time or times shall fail to obtain or maintain any of the policies of insurance
required hereby or
20
to pay any premium in whole or part relating thereto, the Collateral Agent may,
without waiving or releasing any obligation or liability of the Grantors
hereunder or any Event of Default, in its sole discretion, obtain and maintain
such policies of insurance and pay such premium and take any other actions with
respect thereto as the Collateral Agent deems advisable. Subject to the
Intercreditor Agreement, all sums disbursed by the Collateral Agent in
connection with this Section 4.03(1), including reasonable attorneys' fees,
court costs, expenses and other charges relating thereto, shall be payable, upon
demand, by the Grantors to the Collateral Agent and shall be additional Note
Obligations secured hereby.
(m) Each Grantor shall legend, in form and manner satisfactory
to the Collateral Agent, its Chattel Paper and its books, records and documents
evidencing or pertaining thereto with an appropriate reference to the fact that
such Chattel Paper have been assigned to the Collateral Agent for the benefit of
the Secured Parties and that the Collateral Agent has a security interest
therein.
SECTION 4.04. Other Actions. In order to further insure the
attachment, perfection and priority of, and the ability of the Collateral Agent
to enforce, the Collateral Agent's security interest in the Collateral, each
Grantor agrees, in each case at such Grantor's own expense and in accordance
with, and to the extent consistent with, the terms of the Intercreditor
Agreement, to take the following actions with respect to the following
Collateral:
(a) Instruments and Tangible Chattel Paper. If any Grantor
shall at any time hold or acquire any Instruments or Tangible Chattel
Paper, such Grantor shall forthwith endorse, assign and deliver the
same to a Senior Collateral Agent (or, after the Discharge of Priority
Lien Obligations, the Collateral Agent), accompanied by such
instruments of transfer or assignment duly executed in blank as such
Senior Collateral Agent (or, after the Discharge of Priority Lien
Obligations, the Collateral Agent) may from time to time specify.
(b) Investment Property. If any Grantor shall at any time hold
or acquire any certificated securities which constitute Collateral,
such Grantor shall forthwith endorse, assign and deliver the same to a
Senior Collateral Agent (or, after the Discharge of Priority Lien
Obligations, the Collateral Agent), accompanied by such instruments of
transfer or assignment duly executed in blank as such Senior Collateral
Agent (or, after the Discharge of Priority Lien Obligations, the
Collateral Agent) may from time to time specify. If any securities
which constitute Collateral now or hereafter acquired by any Grantor
are uncertificated and are issued to such Grantor or its nominee
directly by the issuer thereof, such Grantor shall immediately notify
each Senior Collateral Agent and the Collateral Agent thereof and, at
the request and option of a Senior Collateral Agent (or, after the
Discharge of Priority Lien Obligations, the Collateral Agent), pursuant
to an agreement in form and substance satisfactory to such Senior
Collateral Agent (or, after the Discharge of Priority Lien Obligations,
the Collateral Agent), either (a) cause the issuer to agree to comply
with instructions from such Senior Collateral Agent (or, after the
Discharge of Priority
21
Lien Obligations, the Collateral Agent) as to such securities, without
further consent of any Grantor or such nominee, or (b) arrange for such
Senior Collateral Agent (or, after the Discharge of Priority Lien
Obligations, the Collateral Agent) to become the registered owner of
the securities. The provisions of this paragraph shall not apply to any
financial assets credited to a securities account for which any Senior
Collateral Agent or the Collateral Agent is the securities
intermediary.
(c) Electronic Chattel Paper and Transferable Records. If any
Grantor at any time holds or acquires an interest in any electronic
chattel paper or any "transferable record," as that term is defined in
Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act, or in Section 16 of the Uniform Electronic Transactions
Act as in effect in any relevant jurisdiction, such Grantor shall
promptly notify each Senior Collateral Agent (or, after the Discharge
of Priority Lien Obligations, the Collateral Agent) thereof and, at the
request of a Senior Collateral Agent (or, after the Discharge of
Priority Lien Obligations, the Collateral Agent), shall take such
action as such Senior Collateral Agent (or, after the Discharge of
Priority Lien Obligations, the Collateral Agent) may reasonably request
to vest in such Senior Collateral Agent (or, after the Discharge of
Priority Lien Obligations, the Collateral Agent) control under New York
UCC Section 9-105 of such electronic chattel paper or control under
Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act or, as the case may be, Section 16 of the Uniform
Electronic Transactions Act, as so in effect in such jurisdiction, of
such transferable record.
SECTION 4.05. Covenants Regarding Patent, Trademark and
Copyright Collateral. (a) Each Grantor agrees that it will not, and will not
permit any of its licensees to, do any act, or omit to do any act, whereby any
Patent that is material to the conduct of such Grantor's business may become
invalidated or dedicated to the public, and agrees that it shall continue to
xxxx any products covered by any such Patent (other than Patents claiming a
process or method) with the relevant patent number as necessary and sufficient
to establish and preserve its maximum rights under applicable patent laws.
(b) Each Grantor (either itself or through its licensees or
its sublicensees) will, for each Registered Trademark material to the conduct of
such Grantor's business, (1) maintain such Trademark registration in full force
as long as the Trademark is being used, (2) maintain the quality of products and
services offered under such Trademark, (3) display such Trademark with notice of
Federal or foreign registration to the extent necessary and sufficient to
establish and preserve its maximum rights under applicable law and (4) not
knowingly use or knowingly permit the use of such Trademark in violation of any
third party rights.
(c) Each Grantor (either itself or through its licensees or
sublicensees) will, for each work covered by a material Copyright, continue to
publish, reproduce, display, adapt and distribute the work with appropriate
copyright notice as necessary and sufficient to establish and preserve its
maximum rights under applicable copyright laws.
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(d) Each Grantor shall notify the Collateral Agent immediately
if it knows or has reason to know that any Patent, Trademark or Copyright
material to the conduct of its business may become abandoned, lost or dedicated
to the public, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, United States Copyright Office or
any court or similar office of any country) regarding such Grantor's ownership
of any such Patent, Trademark or Copyright, its right to register the same, or
its right to keep and maintain the same.
(e) When any Grantor, either itself or through any agent,
employee, licensee or designee, files an application for any Patent, or an
application to register any trademark or copyright with the United States Patent
and Trademark Office or United States Copyright Office it will promptly inform
the Collateral Agent, and, in accordance with, and to the extent consistent
with, the terms of the Intercreditor Agreement, upon request of the Collateral
Agent, execute and deliver any and all agreements, instruments, documents and
papers as the Collateral Agent may request to evidence the Collateral Agent's
security interest in such Patent, Trademark or Copyright, and, in accordance
with, and to the extent consistent with, the terms of the Intercreditor
Agreement, each Grantor hereby appoints the Collateral Agent as its
attorney-in-fact to execute and file such writings for the foregoing purposes,
all acts of such attorney being hereby ratified and confirmed; such power, being
coupled with an interest, is irrevocable; provided, however that such power of
attorney may only be exercised in accordance with, and to the extent consistent
with, the terms of the Intercreditor Agreement following (i) such Grantor's
failure to take all necessary actions as set forth in this paragraph or (ii)
upon the occurrence and during the continuance of an Event of Default.
(f) Each Grantor will take all necessary steps that are
consistent with the practice in any proceeding before the United States Patent
and Trademark Office, United States Copyright Office or any office or agency in
any political subdivision of the United States to maintain and pursue each
material application relating to the Patents, Trademarks and/or Copyrights (and
to obtain the relevant grant or registration) and to maintain each issued Patent
and each registration of the Trademarks and Copyrights that is material to the
conduct of any Grantor's business, including timely filings of applications for
renewal, declarations of use, declarations of incontestability and payment of
maintenance fees, and, if consistent with good business judgment, to initiate
opposition, interference and cancelation proceedings against third parties.
(g) In the event that any Grantor has reason to believe that
any Collateral consisting of a Patent, Trademark or Copyright material to the
conduct of any Grantor's business has been or is about to be infringed,
misappropriated or diluted by a third party, such Grantor promptly shall notify
the Collateral Agent and shall, if consistent with good business judgment,
promptly xxx for infringement, misappropriation or dilution and to recover any
and all damages for such infringement, misappropriation or dilution, and take
such other actions as are appropriate under the circumstances to protect such
Collateral.
(h) Upon and during the continuance of an Event of Default,
each Grantor shall use its best efforts to obtain all requisite consents or
approvals by the licensor of
23
each Copyright License, Patent License or Trademark License to effect the
assignment of all such Grantor's right, title and interest thereunder to the
Collateral Agent or its designees for the benefit of the Secured Parties in
accordance with, and to the extent consistent with, the Intercreditor Agreement.
SECTION 4.06. Compliance with the TIA. To the extent
applicable, the Company will comply with TIA Section 314(b), relating to
opinions of counsel regarding the Lien and Security Interest created pursuant to
this Agreement and the other Indenture Documents.
ARTICLE V
Remedies
SECTION 5.01. Remedies upon Default. In accordance with, and
to the extent consistent with, the terms of the Intercreditor Agreement, upon
the occurrence and during the continuance of an Event of Default, each Grantor
agrees to deliver each item of Collateral to the Collateral Agent on demand, and
it is agreed that the Collateral Agent shall have the right to take any of or
all the following actions at the same or different times: (a) with respect to
any Collateral consisting of Intellectual Property, on demand, to cause the
Security Interest to become an assignment, transfer and conveyance of any of or
all such Collateral by the applicable Grantors to the Collateral Agent, or to
license or sublicense, whether general, special or otherwise, and whether on an
exclusive or nonexclusive basis, any such Collateral throughout the world on
such terms and conditions and in such manner as the Collateral Agent shall
determine (other than in violation of any then-existing licensing arrangements
to the extent that waivers cannot be obtained), and (b) with or without legal
process and with or without prior notice or demand for performance, to take
possession of the Collateral and without liability for trespass to enter any
premises where the Collateral may be located for the purpose of taking
possession of or removing the Collateral and, generally, to exercise any and all
rights afforded to a secured party under the Uniform Commercial Code or other
applicable law. Without limiting the generality of the foregoing, in accordance
with, and to the extent consistent with, the terms of the Intercreditor
Agreement, (i) each Grantor agrees that the Collateral Agent shall have the
right, subject to the mandatory requirements of applicable law, to sell or
otherwise dispose of all or any part of the Collateral or Pledged Collateral, at
public or private sale or at any broker's board or on any securities exchange,
for cash, upon credit or for future delivery as the Collateral Agent shall deem
appropriate and (ii) the Collateral Agent shall have the ability to direct the
Company to give its consent in connection with the sale, transfer or other
disposition of its membership interest in Farmland Feed. The Collateral Agent
shall be authorized at any such sale (if it deems it advisable to do so) to
restrict the prospective bidders or purchasers to persons who will represent and
agree that they are purchasing the Collateral or Pledged Collateral for their
own account for investment and not with a view to the distribution or sale
thereof, and upon consummation of any such sale the Collateral Agent shall have
the right to assign, transfer and deliver to the purchaser or purchasers thereof
the Collateral or Pledged Collateral so sold. Each such purchaser at any such
sale shall hold the property sold absolutely, free from any claim or right on
the part of any Grantor
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or Pledgor, and the Grantors and Pledgors hereby waive (to the extent permitted
by law) all rights of redemption, stay and appraisal which such Grantor or
Pledgor now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted.
In accordance with, and to the extent consistent with, the
terms of the Intercreditor Agreement, the Collateral Agent shall give the
Grantors and Pledgors 10 days' written notice (which each Grantor or Pledgor
agrees is reasonable notice within the meaning of Section 9-611 of the New York
UCC or its equivalent in other jurisdictions) of the Collateral Agent's
intention to make any sale of Collateral. Such notice, in the case of a public
sale, shall state the time and place for such sale and, in the case of a sale at
a broker's board or on a securities exchange, shall state the board or exchange
at which such sale is to be made and the day on which the Collateral or Pledged
Collateral, or portion thereof, will first be offered for sale at such board or
exchange. Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as the Collateral Agent may
fix and state in the notice (if any) of such sale. At any such sale, the
Collateral or Pledged Collateral, or portion thereof, to be sold may be sold in
one lot as an entirety or in separate parcels, as the Collateral Agent may (in
its sole and absolute discretion) determine. The Collateral Agent shall not be
obligated to make any sale of any Collateral or Pledged Collateral if it shall
determine not to do so, regardless of the fact that notice of sale of such
Collateral or Pledged Collateral shall have been given. The Collateral Agent
may, without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and place
fixed for sale, and such sale may, without further notice, be made at the time
and place to which the same was so adjourned. In case any sale of all or any
part of the Collateral or Pledged Collateral is made on credit or for future
delivery, the Collateral or Pledged Collateral so sold may be retained by the
Collateral Agent until the sale price is paid by the purchaser or purchasers
thereof, but the Collateral Agent shall not incur any liability in case any such
purchaser or purchasers shall fail to take up and pay for the Collateral or
Pledged Collateral so sold and, in case of any such failure, such Collateral or
Pledged Collateral may be sold again upon like notice. At any public (or, to the
extent permitted by law, private) sale made pursuant to this Section, any
Secured Party may bid for or purchase, free (to the extent permitted by law)
from any right of redemption, stay, valuation or appraisal on the part of any
Grantor or Pledgor (all said rights being also hereby waived and released to the
extent permitted by law), the Collateral or Pledged Collateral or any part
thereof offered for sale and may make payment on account thereof by using any
claim then due and payable to such Secured Party from any Grantor or Pledgor as
a credit against the purchase price, and such Secured Party may, upon compliance
with the terms of sale, hold, retain and dispose of such property without
further accountability to any Grantor or Pledgor therefor. For purposes hereof,
a written agreement to purchase the Collateral or Pledged Collateral or any
portion thereof shall be treated as a sale thereof; the Collateral Agent shall
be free to carry out such sale pursuant to such agreement and no Grantor or
Pledgor shall be entitled to the return of the Collateral or Pledged Collateral
or any portion thereof subject thereto, notwithstanding the fact that after the
Collateral Agent shall have entered into such an agreement all Events of Default
shall have been remedied and the Note Obligations paid in full. As an
alternative to exercising the power of sale herein
25
conferred upon it, in accordance with, and to the extent consistent with, the
terms of the Intercreditor Agreement, the Collateral Agent may proceed by a suit
or suits at law or in equity to foreclose this Agreement and to sell the
Collateral or Pledged Collateral or any portion thereof pursuant to a judgment
or decree of a court or courts having competent jurisdiction or pursuant to a
proceeding by a court-appointed receiver. Any sale pursuant to the provisions of
this Section 5.01 shall be deemed to conform to the commercially reasonable
standards as provided in Section 9-610(b) of the New York UCC or its equivalent
in other jurisdictions. The Collateral Agent recognizes that its ability to sell
membership interests or require the registration of such membership interests
pursuant to Section 5.05 of this Agreement is subject to Section 11.1 of the
Limited Liability Company Agreement of Farmland Feed in the case of Farmland
Feed and its subsidiaries.
Until the Collateral Agent shall have advised the Grantors to
the contrary, each Grantor shall, and the Collateral Agent hereby authorizes
each Grantor to, enforce and collect all amounts owing on the Inventory and
Accounts, for the benefit and on behalf of the Collateral Agent and the other
Secured Parties, provided, however, that such privilege may at the option of the
Collateral Agent be terminated upon the occurrence and during the continuance of
any Event of Default.
In accordance with, and to the extent consistent with, the
terms of the Intercreditor Agreement, upon the occurrence and during the
continuance of any Event of Default, the Collateral Agent shall have the right
to notify each Account Debtor of the occurrence of such Event of Default and
have the right to direct the payment of each Account Debtor away from each
Grantor's regular account and into an account established by the Collateral
Agent. Each Grantor agrees to use all reasonable efforts to cooperate with the
Collateral Agent and each Account Debtor to cause all payments on Accounts to be
paid directly into the account established by the Collateral Agent. In the event
any Grantor receives payments directly that otherwise should be paid to the
Collateral Agent, as provided herein, such Grantor will promptly remit such
amount to the Collateral Agent, subject to its obligations under any Senior
Obligations Security Documents.
SECTION 5.02. Application of Proceeds. In accordance with, and
to the extent consistent with, the terms of the Intercreditor Agreement (and
subject to the terms of any Other Intercreditor Agreements), the Collateral
Agent shall apply the proceeds of any collection or sale of Collateral or
Pledged Collateral, as well as any Collateral or Pledged Collateral consisting
of cash, as follows:
FIRST, to the payment of all costs and expenses incurred by
the Collateral Agent in connection with such collection or sale or
otherwise in connection with this Agreement or any other Indenture
Document, including all court costs and the fees and expenses of its
agents and legal counsel, the repayment of all advances made by the
Collateral Agent hereunder or under any other Indenture Document on
behalf of any Grantor or Pledgor and any other costs or expenses
incurred in connection with the exercise of any right or remedy
hereunder or under any other Indenture Document;
26
SECOND, to the payment in full of the Note Obligations (the
amounts so applied to be distributed among the Secured Parties pro rata
in accordance with the amounts of the Note Obligations owed to them on
the date of any such distribution) in the manner provided in the
Indenture; and
THIRD, to the Grantors and Pledgors, their successors or
assigns, or as a court of competent jurisdiction may otherwise direct.
In accordance with, and to the extent consistent with the Intercreditor
Agreement and the Indenture (and subject to the terms of any Other Intercreditor
Agreements), the Collateral Agent shall have absolute discretion as to the time
of application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of Collateral or Pledged Collateral by the Collateral
Agent (including pursuant to a power of sale granted by statute or under a
judicial proceeding), the receipt of the Collateral Agent or of the officer
making the sale shall be a sufficient discharge to the purchaser or purchasers
of the Collateral or Pledged Collateral so sold and such purchaser or purchasers
shall not be obligated to see to the application of any part of the purchase
money paid over to the Collateral Agent or such officer or be answerable in any
way for the misapplication thereof.
SECTION 5.03. Grant of License to Use Intellectual Property.
In accordance with, and to the extent consistent with the Intercreditor
Agreement and the Indenture, and for the purpose of enabling the Collateral
Agent to exercise rights and remedies under this Article at such time as the
Collateral Agent shall be lawfully entitled to exercise such rights and
remedies, each Grantor hereby grants to the Collateral Agent an irrevocable,
nonexclusive license but subject to the terms, conditions or restrictions of any
existing license (exercisable without payment of royalty or other compensation
to the Grantors) to use, license or sublicense any of the Collateral consisting
of Intellectual Property now owned or hereafter acquired by such Grantor, and
wherever the same may be located, and including in such license reasonable
access to all media in which any of the licensed items may be recorded or stored
and to all computer software and programs used for the compilation or printout
thereof. The use of such license by the Collateral Agent shall be exercised, at
the option of the Collateral Agent (after the Discharge of Priority Lien
Obligations), upon the occurrence and during the continuation of an Event of
Default; provided that any license, sublicense or other transaction entered into
by the Collateral Agent in accordance herewith shall be binding upon the
Grantors notwithstanding any subsequent cure of an Event of Default.
SECTION 5.04. Securities Act, etc. In view of the position of
the Pledgors in relation to the Pledged Securities, or because of other current
or future circumstances, a question may arise under the Securities Act of 1933,
as now or hereafter in effect, or any similar statute hereafter enacted
analogous in purpose or effect (such Act and any such similar statute as from
time to time in effect being called the "Federal Securities Laws") with respect
to any disposition of the Pledged Securities permitted hereunder. Each Pledgor
understands that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Collateral Agent if the Collateral Agent were
to attempt to dispose of all or any part of the Pledged Securities, and might
27
also limit the extent to which or the manner in which any subsequent transferee
of any Pledged Securities could dispose of the same. Similarly, there may be
other legal restrictions or limitations affecting the Collateral Agent in any
attempt to dispose of all or part of the Pledged Securities under applicable
Blue Sky or other state securities laws or similar laws analogous in purpose or
effect. Each Pledgor recognizes that in light of such restrictions and
limitations the Collateral Agent may, with respect to any sale of the Pledged
Securities, limit the purchasers to those who will agree, among other things, to
acquire such Pledged Securities for their own account, for investment, and not
with a view to the distribution or resale thereof. Each Pledgor acknowledges and
agrees that in light of such restrictions and limitations, the Collateral Agent,
in its sole and absolute discretion (a) may proceed to make such a sale whether
or not a registration statement for the purpose of registering such Pledged
Securities or part thereof shall have been filed under the Federal Securities
Laws and (b) may approach and negotiate with a single potential purchaser to
effect such sale. Each Pledgor acknowledges and agrees that any such sale might
result in prices and other terms less favorable to the seller than if such sale
were a public sale without such restrictions. In the event of any such sale, the
Collateral Agent shall incur no responsibility or liability for selling all or
any part of the Pledged Securities at a price that the Collateral Agent, in its
sole and absolute discretion, may in good xxxxx xxxx reasonable under the
circumstances, notwithstanding the possibility that a substantially higher price
might have been realized if the sale were deferred until after registration as
aforesaid or if more than a single purchaser were approached. The provisions of
this Section 5.04 will apply notwithstanding the existence of a public or
private market upon which the quotations or sales prices may exceed
substantially the price at which the Collateral Agent sells.
SECTION 5.05. Registration, etc. Each Pledgor agrees that,
upon the occurrence and during the continuance of an Event of Default hereunder,
if, in accordance with, and to the extent consistent with, the terms of the
Intercreditor Agreement, for any reason the Collateral Agent desires to sell any
of the Pledged Securities of the Company at a public sale, it will, at any time
and from time to time, upon the written request of the Collateral Agent, use its
commercially reasonable efforts to take or to cause the issuer of such Pledged
Securities to take such action and prepare, distribute and/or file such
documents, as are required or advisable in the reasonable opinion of counsel for
the Collateral Agent to permit the public sale of such Pledged Securities. Each
Pledgor further agrees to indemnify, defend and hold harmless the Collateral
Agent, each other Secured Party, any underwriter and their respective officers,
directors, affiliates and controlling persons from and against all loss,
liability, expenses, costs of counsel (including, without limitation, reasonable
fees and expenses to the Collateral Agent of legal counsel), and claims
(including the costs of investigation) that they may incur insofar as such loss,
liability, expense or claim arises out of or is based upon any alleged untrue
statement of a material fact contained in any prospectus (or any amendment or
supplement thereto) or in any notification or offering circular, or arises out
of or is based upon any alleged omission to state a material fact required to be
stated therein or necessary to make the statements in any thereof not
misleading, except insofar as the same may have been caused by any untrue
statement or omission based upon information furnished in writing to such
Pledgor or the issuer of such Pledged Securities by the Collateral Agent or any
other Secured Party expressly for use therein. Each
28
Pledgor further agrees, upon such written request referred to above, to use its
best efforts to qualify, file or register, or cause the issuer of such Pledged
Securities to qualify, file or register, any of the Pledged Securities under the
Blue Sky or other securities laws of such states as may be requested by the
Collateral Agent and keep effective, or cause to be kept effective, all such
qualifications, filings or registrations. Each Pledgor will bear all costs and
expenses of carrying out its obligations under this Section 5.05. Each Pledgor
acknowledges that there is no adequate remedy at law for failure by it to comply
with the provisions of this Section 5.05 and that such failure would not be
adequately compensable in damages, and therefor agrees that its agreements
contained in this Section 5.05 may be specifically enforced.
ARTICLE VI
Indemnity and Subrogation
SECTION 6.01. Indemnity and Subrogation. In addition to all
such rights of indemnity and subrogation as the Guarantor may have under
applicable law (but subject to Section 6.03), the Company agrees that in the
event any assets of any Guarantor shall be sold pursuant to any Security
Document to satisfy a claim of any Secured Party, the Company shall indemnify
such Guarantor in an amount equal to the greater of the book value or the fair
market value of the assets so sold.
SECTION 6.02. Contribution and Subrogation. Each Guarantor (a
"Contributing Guarantor"), agrees (subject to Section 6.03) that, in the event
any assets of any other Guarantor shall be sold pursuant to any Security
Document to satisfy a claim of any Secured Party and such other Guarantor (the
"Claiming Guarantor") shall not have been fully indemnified by the Company as
provided in Section 6.01, the Contributing Guarantor shall indemnify the
Claiming Guarantor in an amount equal to the greater of the book value or the
fair market value of such assets, in each case multiplied by a fraction of which
the numerator shall be the net worth of the Contributing Guarantor on the date
hereof and the denominator shall be the aggregate net worth of all the Guarantor
on the date hereof (or, in the case of any Guarantor becoming a party hereto
pursuant to Section 7.16, the date of the Supplement hereto executed and
delivered by such Guarantor). Any Contributing Guarantor making any payment to a
Claiming Guarantor pursuant to this Section 6.02 shall be subrogated to the
rights of such Claiming Guarantor under Section 6.01 to the extent of such
payment.
SECTION 6.03. Subordination. Notwithstanding any provision of
this Agreement to the contrary, all rights of the Guarantor under Sections 6.01
and 6.02 and all other rights of indemnity, contribution or subrogation under
applicable law or otherwise shall be fully subordinated to the indefeasible
payment in full in cash of the Note Obligations. No failure on the part of the
Company or any Guarantor to make the payments required by Sections 6.01 and 6.02
(or any other payments required under applicable law or otherwise) shall in any
respect limit the Note Obligations and liabilities of any Guarantor with respect
to its Note Obligations hereunder, and each Guarantor shall remain liable for
the full amount of the Note Obligations of such Guarantor hereunder.
29
ARTICLE VII
Miscellaneous
SECTION 7.01. Notices. All communications and notices
hereunder shall (except as otherwise expressly permitted herein) be in writing
and given as provided in Section 12.02 of the Indenture or, if to any Senior
Collateral Agent, as provided in the relevant Senior Obligations Documents. All
communications and notices hereunder to any Grantor other than the Company shall
be given to it in care of the Company.
SECTION 7.02. Security Interest Absolute. All rights of the
Collateral Agent hereunder, the Security Interest, the grant of a security
interest in the Pledged Collateral and all obligations of each Grantor and
Pledgor hereunder shall be absolute and unconditional irrespective of (a) any
lack of validity or enforceability of any Indenture Document, any agreement with
respect to any of the Note Obligations or any other agreement or instrument
relating to any of the foregoing, (b) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Note Obligations, or any
other amendment or waiver of or any consent to any departure from any Indenture
Document or any other agreement or instrument, (c) any exchange, release or
non-perfection of any Lien on other collateral, or any release or amendment or
waiver of or consent under or departure from any guarantee, securing or
guaranteeing all or any of the Note Obligations, or (d) any other circumstance
that might otherwise constitute a defense available to, or a discharge of, any
Grantor or Pledgor in respect of the Note Obligations or this Agreement.
SECTION 7.03. Survival of Agreement. All covenants,
agreements, representations and warranties made by the Grantors in the Indenture
Documents and in the certificates or other instruments delivered in connection
with or pursuant to any Indenture Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Indenture Documents, and the purchase and resale of the Notes by
the Initial Purchasers, regardless of any investigation made by any such other
party or on its behalf and notwithstanding that the Collateral Agent or the
Initial Purchasers may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any Note Obligations were incurred, and,
in the case of any covenant or agreement, shall continue in full force and
effect as long as any Note Obligation or any fee or any other amount payable
under this Agreement is outstanding and unpaid.
SECTION 7.04. Binding Effect; Several Agreement. This
Agreement shall become effective as to any Grantor when a counterpart hereof
executed on behalf of such Grantor shall have been delivered to the Collateral
Agent and a counterpart hereof shall have been executed on behalf of the
Collateral Agent, and thereafter shall be binding upon such Grantor and the
Collateral Agent and their respective successors and assigns, and shall inure to
the benefit of such Grantor, the Collateral Agent and the other Secured Parties
and their respective successors and assigns, except that no Grantor shall have
the right to assign or transfer its rights or obligations hereunder or any
interest herein (and any such assignment or transfer shall be void) except as
expressly
30
contemplated by this Agreement or the Indenture. This Agreement shall be
construed as a separate agreement with respect to each Grantor and may be
amended, modified, supplemented, waived or released with respect to any Grantor
without the approval of any other Grantor and without affecting the obligations
of any other Grantor hereunder.
SECTION 7.05. Successors and Assigns. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successor and assigns of such party; and all covenants,
promises and agreements by or on behalf of any Grantor or the Collateral Agent
that are contained in this Agreement shall bind and inure to the benefit of
their respective successors and assigns.
SECTION 7.06. Collateral Agent's Fees and Expenses;
Indemnification. (a) Each Grantor and each Pledgor jointly and severally agrees
to pay upon demand to the Collateral Agent the amount of any and all reasonable
expenses, including the reasonable fees, disbursements and other charges of its
counsel and of any experts or agents, which the Collateral Agent may incur in
connection with (i) the administration of this Agreement, (ii) the custody or
preservation of, or the sale of, collection from or other realization upon any
of the Collateral or Pledged Collateral, (iii) the exercise, enforcement or
protection of any of the rights of the Collateral Agent hereunder or (iv) the
failure of any Grantor or Pledgor to perform or observe any of the provisions
hereof.
(b) Without limitation of its indemnification obligations
under the other Indenture Documents, each Grantor and each Pledgor jointly and
severally agrees to indemnify the Collateral Agent, the Trustee, the Noteholders
and each Affiliate of the foregoing persons (each an "Indemnitee") against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the fees, charges and disbursements
of any counsel for any Indemnitee, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of, the execution,
delivery or performance of this Agreement or any claim, litigation,
investigation or proceeding relating hereto or to the Collateral or Pledged
Collateral, whether or not any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the bad faith, negligence or wilful misconduct of such Indemnitee.
(c) Any such amounts payable as provided hereunder shall be
additional Note Obligations secured hereby and by the other Security Documents.
The provisions of this Section 7.06 shall remain operative and in full force and
effect regardless of the termination of this Agreement or any other Indenture
Document, the consummation of the transactions contemplated hereby, the
repayment of any of the Note Obligations, the invalidity or unenforceability of
any term or provision of this Agreement, any other Indenture Document, or any
investigation made by or on behalf of the Collateral Agent or any other Secured
Party. All amounts due under this Section 7.06 shall be payable on written
demand therefor.
31
SECTION 7.07. Collateral Agent Appointed Attorney-in-Fact.
Each Grantor and each Pledgor hereby appoints the Collateral Agent the
attorney-in-fact of such Grantor or Pledgor for the purpose of carrying out the
provisions of this Agreement and taking any action and executing any instrument
that the Collateral Agent may deem necessary or advisable to accomplish the
purposes hereof, which appointment is irrevocable and coupled with an interest;
provided, however, that such power of attorney may only be exercised (i) to file
any UCC financing statements and continuation statements and (ii) following the
occurrence and during the continuance of an Event of Default. Without limiting
the generality of the foregoing, the Collateral Agent shall have the right, upon
the occurrence and during the continuance of an Event of Default, with full
power of substitution either in the Collateral Agent's name or in the name of
such Grantor or Pledgor (a) in the case of a Grantor (i) to receive, endorse,
assign and/or deliver any and all notes, acceptances, checks, drafts, money
orders or other evidences of payment relating to the Collateral or any part
thereof; (ii) to demand, collect, receive payment of, give receipt for and give
discharges and releases of all or any of the Collateral; (iii) to sign the name
of any Grantor on any invoice or xxxx of lading relating to any of the
Collateral; (iv) to send verifications of Accounts to any Account Debtor; (v) to
commence and prosecute any and all suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect or otherwise realize on
all or any of the Collateral or to enforce any rights in respect of any
Collateral; (vi) to settle, compromise, compound, adjust or defend any actions,
suits or proceedings relating to all or any of the Collateral; (vii) to notify,
or to require any Grantor to notify, Account Debtors to make payment directly to
the Collateral Agent; and (viii) to use, sell, assign, transfer, pledge, make
any agreement with respect to or otherwise deal with all or any of the
Collateral, and to do all other acts and things necessary to carry out the
purposes of this Agreement, as fully and completely as though the Collateral
Agent were the absolute owner of the Collateral for all purposes; and (b) in the
case of a Pledgor (i) to ask for, demand, xxx for, collect, receive and give
acquittance for any and all moneys due or to become due under and by virtue of
any Pledged Collateral; (ii) to endorse checks, drafts, orders and other
instruments for the payment of money payable to the Pledgor representing any
interest or dividend or other distribution payable in respect of the Pledged
Collateral or any part thereof or on account thereof and to give full discharge
of the same; (iii) to settle, compromise, prosecute or defend any action, claim
or proceeding with respect thereto; and (iv) to sell, assign, endorse, pledge,
transfer and to make any agreement respecting, or otherwise deal with, the same;
provided, however, that nothing herein contained shall be construed as requiring
or obligating the Collateral Agent to make any commitment or to make any inquiry
as to the nature or sufficiency of any payment received by the Collateral Agent,
or to present or file any claim or notice, or to take any action with respect to
the Collateral or the Pledged Collateral or any part thereof or the moneys due
or to become due in respect thereof or any property covered thereby. The
Collateral Agent and the other Secured Parties shall be accountable only for
amounts actually received as a result of the exercise of the powers granted to
them herein, and neither they nor their officers, directors, employees or agent
shall be responsible to any Grantor or Pledgor for any act or failure to act
hereunder, except for their own bad faith, negligence or wilful misconduct.
32
Notwithstanding anything in this Section 7.07 to the contrary, the
Collateral Agent agrees that it will not exercise any rights under the power of
attorney provided for in this Section 7.07 unless it does so in accordance with,
and to the extent consistent with, the terms of the Intercreditor Agreement.
SECTION 7.08. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 7.09. Waivers; Amendment, (a) No failure or delay by
the Collateral Agent or any Secured Party in exercising any right or power
hereunder or under any other Indenture Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Collateral Agent and any Secured
Party hereunder or under the other Indenture Documents are cumulative and are
not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of any Indenture Document or consent to any departure by
any Grantor therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except (i) in accordance with the Indenture, or (ii)
as otherwise provided in the Intercreditor Agreement.
SECTION 7.10. [Intentionally Omitted.]
SECTION 7.11. Severability. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 7.12. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute a single contract (subject to Section 7.04), and shall
become effective as provided in Section 7.04. Delivery of an executed signature
page to this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 7.13. Headings. Article and Section headings used
herein are for the purpose of reference only, are not part of this Agreement and
are not to affect the construction of, or to be taken into consideration in
interpreting, this Agreement.
SECTION 7.14. [Intentionally Omitted.]
33
SECTION 7.15. Termination or Release. Collateral shall be
released from the pledges and security interests created by this Agreement as
and to the extent provided in Article XI of the Indenture.
SECTION 7.16. Additional Guarantors. Pursuant to Section 4.12
of the Indenture, the Company is required to cause (a) at any time that any Bank
Indebtedness is outstanding, each Subsidiary of the Company that Incurs or
enters into a Guarantee of any Bank Indebtedness and (b) at any time that no
Bank Indebtedness is outstanding, each domestic and, to the extent no material
adverse tax consequences would result therefrom, foreign Restricted Subsidiary
of the Company that Incurs any Indebtedness to become a Subsidiary Guarantor
and, as promptly as practicable, execute and deliver Security Documents pursuant
to which its assets constituting Collateral will be pledged to secure its
Subsidiary Guaranty. Upon execution and delivery by the Collateral Agent and any
such Subsidiary of an instrument in the form of Annex I hereto, such Subsidiary
shall become a Grantor and Pledgor hereunder with the same force and effect as
if originally named as a Grantor and Pledgor herein. The execution and delivery
of any such instrument shall not require the consent of any other Grantor or
Pledgor hereunder. The rights and obligations of each Grantor and Pledgor
hereunder shall remain in full force and effect notwithstanding the addition of
any new Grantor and Pledgor as a party to this Agreement.
34
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
LAND O' LAKES, INC.,
by
________________________________
Name:
Title:
35
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
ACS STORES, LLC,
by
________________________________
Name:
Title:
36
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
ADVANCED BUSINESS CONCEPTS
INTERNATIONAL, LLC,
by
________________________________
Name:
Title:
37
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
AG2AG, LLC,
by
_____________________________________
Name:
Title:
38
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
AGRICULTURAL INDEMNITY
INSURANCE COMPANY,
by
_____________________________________
Name:
Title:
39
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
ALLIANCE MILK PRODUCTS, LLC,
by
_____________________________________
Name:
Title:
40
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
AMERICA'S COUNTRY STORES
HOLDINGS, LLC,
by
_____________________________________
Name:
Title:
41
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
AMERICA'S COUNTRY STORES, LLC,
by
_____________________________________
Name:
Title:
42
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
DIAMOND CROSS, LLC,
by
_____________________________________
Name:
Title:
43
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
FMR, INC.,
by
_____________________________________
Name:
Title:
44
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
FORAGE GENETICS, INC.,
by
_____________________________________
Name:
Title:
45
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
GOLDEN STATE FEEDS, LLC,
by
_____________________________________
Name:
Title:
46
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
GOLDEN VALLEY DAIRY PRODUCTS,
by
_____________________________________
Name:
Title:
47
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
L.L. OLDS SEED COMPANY,
by
_____________________________________
Name:
Title:
48
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
LAND O'LAKES FARMLAND
FEED LLC,
by
_____________________________________
Name:
Title:
49
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
LAND O'LAKES HOLDINGS, INC.,
by
_____________________________________
Name:
Title:
50
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
LAND O'LAKES INTERNATIONAL
DEVELOPMENT CORPORATION,
by
_____________________________________
Name:
Title:
51
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
LOL HOLDINGS II, INC.,
by
_____________________________________
Name:
Title:
52
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
LOL POWER LLC,
by
_____________________________________
Name:
Title:
53
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
MILK PRODUCTS, LLC,
by
_____________________________________
Name:
Title:
54
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
NORTH COAST FERTILIZER II, INC,
by
_____________________________________
Name:
Title:
55
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
NORTHWEST FOOD PRODUCTS
COMPANY, INC,
by
_____________________________________
Name:
Title:
56
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
NORTHWEST FOOD PRODUCTS
TRANSPORTATION, LLC,
by
_____________________________________
Name:
Title:
57
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
NUTRA-BLEND, LLC,
by
_____________________________________
Name:
Title:
58
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
PMI NUTRITION, LLC,
by
_____________________________________
Name:
Title:
59
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
PMI AGRICULTURE, L.L.C.,
by
_____________________________________
Name:
Title:
60
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
PMI NUTRITION INTERNATIONAL,
LLC,
by
_____________________________________
Name:
Title:
61
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
PURINA XXXXX, LLC,
by
_____________________________________
Name:
Title:
62
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
QC, INC.,
by
_____________________________________
Name:
Title:
63
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
QC HOLDINGS INC,
by
_____________________________________
Name:
Title:
64
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
QC INDUSTRIES INC,
by
_____________________________________
Name:
Title:
65
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
REALTY LOL, INC.,
by
_____________________________________
Name:
Title:
66
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
RESEARCH SEEDS, INC.,
by
_____________________________________
Name:
Title:
67
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
SEED RESEARCH INC.,
by
_____________________________________
Name:
Title:
68
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
XXXXXX PRODUCTS INC.,
by
_____________________________________
Name:
Title:
69
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
U.S. BANK NATIONAL ASSOCIATION,
as Collateral Agent,
by
_____________________________________
Name:
Title:
70
SCHEDULE I TO
THE SECOND PRIORITY
COLLATERAL AGREEMENT
SUBSIDIARIES
ACS Stores, LLC
Advanced Business Concepts International, LLC
AG2AG, LLC
Agricultural Indemnity Insurance Company
Alliance Milk Products, LLC
America's Country Stores Holdings, LLC
America's Country Stores, LLC
Diamond Cross, LLC
FMR, Inc.
Forage Genetics, Inc.
Golden State Feeds, LLC
Golden Valley Dairy Products
L.L. Olds Seed Company
Land O'Lakes Farmland Feed LLC
Land O'Lakes Holdings, Inc.
Land O'Lakes International Development Corporation
LOL Holdings II, Inc.
LOL Power, LLC
Milk Products, LLC
North Coast Fertilizer II, Inc.
Northwest Food Products Company, Inc.
Northwest Food Products Transportation LLC
Nutra-Blend, LLC
PMI Nutrition, LLC
PMI Agriculture, L.L.C.
PMI Nutrition International, LLC
Purina Xxxxx, LLC
QC, Inc.
QC Holdings Inc.
QC Industries, Inc.
Realty LOL, Inc.
Research Seeds, Inc.
Seed Research, Inc.
Xxxxxx Products, LLC
71
SCHEDULE II
TO THE SECOND PRIORITY
COLLATERAL AGREEMENT
EQUITY INTERESTS
Number and
Number of Registered Class of Percentage
Issuer Certificate Owner Shares of Shares
------ ----------- ----- ------ ---------
DEBT SECURITIES
Principal
Issuer Amount Date of Note Maturity Date
------ ------ ------------ -------------
72
SCHEDULE III TO
THE SECOND PRIORITY
COLLATERAL AGREEMENT
U.S. COPYRIGHTS OWNED BY [NAME OR GRANTOR]
[Make a separate page of Schedule III for each Grantor and state if no
copyrights are owned. List in numerical order by Registration No.]
U.S. Copyright Registrations
Title Reg. No. Author
----- -------- ------
Pending U.S. Copyright Applications for Registration
Title Author Class Date Filed
----- ------ ----- ----------
73
SCHEDULE III TO
THE SECOND PRIORITY
COLLATERAL AGREEMENT
Non-U.S. Copyright Registrations
[List in alphabetical order by country/
numerical order by Registration No. within each country]
Country Title Reg. No. Author
------- ----- -------- ------
Non-U.S. Pending Copyright Applications for Registration
[List in alphabetical order by country.]
Country Title Author Class Date Filed
------- ----- ------ ----- ----------
74
SCHEDULE III TO
THE SECOND PRIORITY
COLLATERAL AGREEMENT
LICENSES
[Make a separate page of Schedule III for each Grantor, and state if any Grantor
is not a party to a license/sublicense.]
PART I
LICENSES/SUBLICENSEES OF [NAME OF GRANTOR]
AS LICENSOR ON DATE HEREOF
A. Copyrights
[List U.S. copyrights in numerical order by Registration No. List non-U.S.
copyrights by country in alphabetical order with Registration Nos. within each
country in numerical order.]
U.S. Copyrights
Licensee Name Date of License/ Title of '
and Address Sublicense U.S. Copyright Author Reg. No.
----------- ---------- -------------- ------ --------
Non-U.S. Copyrights
Date of Title of
Licensee Name License/ Non-U.S.
Country and Address Sublicensee Copyrights Author Reg. No.
------- ----------- ----------- ---------- ------ --------
75
SCHEDULE III TO
THE SECOND PRIORITY
COLLATERAL AGREEMENT
B. Patents
[List U.S. patent nos. and U.S. patent application nos. in numerical order. List
non-U.S. patent nos. and non-U.S. application in alphabetical order by country,
with numbers within each country in numerical order.]
U.S. Patents
Licensee Name Date of License/
and Address Sublicense Issue Date Patent No.
----------- ---------- ---------- ----------
U.S. Patent Applications
Licensee Name Date of License/ Date
and Address Sublicense Filed Application No.
----------- ---------- ----- ---------------
Non-U.S. Patents
Licensee Name Date of License/ Issue Non-U.S.
Country and Address Sublicense Date Patent No.
------- ----------- ---------- ---- ----------
Non-U.S. Patent Applications
Licensee Name Date of License/ Date Application
Country and Address Sublicense Filed No.
------- ----------- ---------- ----- -----------
76
SCHEDULE III TO
THE SECOND PRIORITY
COLLATERAL AGREEMENT
C. Trademarks
[List U.S. trademark nos. and U.S. trademark application nos. in numerical
order. List non-U.S. trademark nos. and non-U.S. application nos. with trademark
nos. within each country in numerical order.]
U.S. Trademarks
Licensee Name Date of License/
and Address Sublicense U.S. Xxxx Reg. Date Reg. No.
----------- ---------- --------- --------- --------
U.S. Trademark Applications
Licensee Name Date of License/ Date Application
and Address Sublicense U.S. Xxxx Filed No.
----------- ---------- --------- ----- -----------
Non-U.S. Trademarks
Licensee Name Date of License/ Non-U.S.
Country and Address Sublicense Xxxx Reg. Date Reg. No.
------- ----------- ---------- ---- --------- --------
77
SCHEDULE III TO
THE SECOND PRIORITY
COLLATERAL AGREEMENT
Non-U.S. Trademark Applications
Licensee Name Date of License/ Non-U.S. Date Application
Country and Address Sublicense Xxxx Filed No.
------- ------------- ---------------- -------- ----- -----------
D. Others
Licensee Name Date of License Subject and
Address Sublicense Matter
------------- --------------- -----------
78
SCHEDULE III TO
THE SECOND PRIORITY
COLLATERAL AGREEMENT
PART 2
LICENSEES/SUBLICENSES OF [NAME OF GRANTOR]
AS LICENSEE ON DATE HEREOF
A. Copyrights
[List U.S. copyrights in numerical order by Registration No. List non-U.S.
copyrights by country in alphabetical order with Registration Nos. within each
country in numerical order.]
U.S. Copyrights
Licensor Name Date of License/ Title of
and Address Sublicense U.S. Copyright Author Reg. No.
------------- ---------------- -------------- ------ --------
Non-U.S. Copyrights
Date of Title of
Licensor Name License/ Non-U.S.
Country and Address Sublicensee Copyrights Author Reg. No.
------- ------------- ----------- ---------- ------ --------
79
SCHEDULE III TO
THE SECOND PRIORITY
COLLATERAL AGREEMENT
B. Patents
[List U.S. patent nos. and U.S. patent application nos. in numerical order. List
non-U.S. patent nos. and non-U.S. application in alphabetical order by country,
with numbers within each country in numerical order.]
U.S. Patents
Licensor Name Date of License/
and Address Sublicense Issue Date Patent No.
------------- ---------------- ---------- ----------
U.S. Patent Applications
Licensor Name Date of License/
and Address Sublicense Date Filed Application No.
------------- ---------------- ---------- ---------------
Non-U.S. Patents
Licensor Name Date of License/ Issue Non-U.S.
Country and Address Sublicense Date Patent No.
------- -------------- ---------------- ----- ----------
Non-U.S. Patent Applications
Licensor Name Date of License/ Date Application
Country and Address Sublicense Filed No.
------- -------------- ---------------- ----- ----------
80
SCHEDULE III TO
THE SECOND PRIORITY
COLLATERAL AGREEMENT
C. Trademarks
[List U.S. trademark nos. and U.S. trademark application nos. in numerical
order. List non-U.S. trademark nos. and non-U.S. application nos. with trademark
nos. within each country in numerical order.]
U.S. Trademarks
Licensor Name Date of License/
and Address Sublicense U.S. Xxxx Reg. Date Reg. No.
------------- ---------------- --------- --------- --------
U.S. Trademark Applications
Licensor Name Date of License/ Date Application
and Address Sublicense U.S. Xxxx Filed No.
------------- ---------------- --------- ----- -----------
Non-U.S. Trademarks
Licensor Name Date of License/ Non-U.S.
Country and Address Sublicense Xxxx Reg. Date Reg. No.
------- ------------- ---------------- -------- --------- --------
81
SCHEDULE III TO
THE SECOND PRIORITY
COLLATERAL AGREEMENT
Non-U.S. Trademark Applications
Licensor Name Date of License/ Non-U.S. Date Application
Country and Address Sublicense Xxxx Filed No.
------- ------------- ---------------- -------- ----- -----------
D. Others
Licensor Name Date of License Subject
and Address Sublicense Matter
------------- --------------- -------
82
SCHEDULE III TO
THE SECOND PRIORITY
COLLATERAL AGREEMENT
PATENTS OWNED BY [NAME OF GRANTOR]
[Make a separate page of Schedule III for each Grantor and state if no patents
are owned. List in numerical order by Patent No./Patent Application No.]
U.S. Patent Registrations
Patent Numbers Issue Date
-------------- ----------
U.S. Patent Applications
Patent Application No. Filing Date
---------------------- -----------
Non-U.S. Patent Registrations
[List in alphabetical order by country/numerical order by Patent No. within
each country]
Country Issue Date Patent No.
------- ---------- ----------
Non-U.S. Patent Applications
[List in alphabetical order by country/numerical order by Patent No. within
each country]
Country Filing Date Patent Application No.
------- ----------- ----------------------
83
SCHEDULE III TO
THE SECOND PRIORITY
COLLATERAL AGREEMENT
TRADEMARK/TRADE NAMES OWNED BY [NAME OF GRANTOR]
[Make a separate page of Schedule III for each Grantor and state if no
trademarks/trade names are owned. List in numerical order by trademark
registration/application no.]
U.S. Trademark Registrations
Xxxx Reg. Date Reg. No.
---- --------- --------
U.S. Trademark Applications
Xxxx Filing Date Application No.
---- ----------- ---------------
State Trademark Registration
[List in alphabetical order by state/numerical order by trademark no. within
each state]
State Xxxx Filing Date Application No.
----- ---- ----------- ---------------
Non-U.S. Trademark Registrations
[List in alphabetical order by country/numerical order by trademark no. within
each country]
Country Xxxx Reg. Date Reg. No.
------- ---- --------- --------
84
SCHEDULE III TO
THE SECOND PRIORITY
COLLATERAL AGREEMENT
Non-U.S. Trademark Applications
[List in alphabetical order by country/numerical order by application no.]
Country Xxxx Application Date Application No.
------- ---- ---------------- ---------------
Trade Names
Country(s) Where Used Trade Names
--------------------- -----------
85
ANNEX I
TO THE SECOND PRIORITY
COLLATERAL AGREEMENT
SUPPLEMENT NO. __ dated as of [ ], to the
Second Priority Collateral Agreement dated as of
December [ ], 2003, among LAND O'LAKES, INC., a
Minnesota cooperative corporation (the "Company"), [
], each subsidiary of the Company listed on Schedule
I thereto (each such subsidiary individually a
"Guarantor" and collectively, the "Guarantors" and
U.S. Bank National Association, a banking corporation
("U.S. Bank"), as collateral agent (in such capacity,
the "Collateral Agent") for the Secured Parties (as
defined herein).
A. Reference is made to (i) the Indenture dated as of December
23, 2003 (the "Indenture"), among Land O'Lakes, Inc., the Guarantors and U.S.
Bank National Association, as trustee, and (ii) the Lien Subordination and
Intercreditor Agreement dated as of December 23, 2003 (the "Intercreditor
Agreement"), among the Company, the Guarantors, JPMorgan Chase Bank and the
Collateral Agent.
B. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Second Priority
Collateral Agreement and the Indenture.
C. The Company and the Guarantors have entered into the Second
Priority Collateral Agreement in order to induce the Trustee to enter into the
Indenture and the Initial Purchasers to purchase the Notes. Section 7.16 of the
Second Priority Collateral Agreement provides that additional Subsidiaries of
the Company may become Grantors and Pledgors under the Second Priority
Collateral Agreement by execution and delivery of an instrument in the form of
this Supplement. The undersigned Subsidiary (the "New Guarantor") is executing
this Supplement in accordance with the requirements of the Indenture to become a
Grantor and Pledgor under the Second Priority Collateral Agreement as
consideration for the purchase of the Notes by the Initial Purchasers.
Accordingly, the Collateral Agent and the New Guarantor agree
as follows:
SECTION 1. In accordance with Section 7.16 of the Second
Priority Collateral Agreement, the New Guarantor by its signature below becomes
a Grantor and Pledgor under the Second Priority Collateral Agreement with the
same force and effect as if originally named therein as a Grantor and Pledgor
and the New Guarantor hereby (a) agrees to all the terms and provisions of the
Second Priority Collateral Agreement applicable to it as a Grantor and Pledgor
thereunder and (b) represents and warrants that the representations and
warranties made by it as a Grantor and Pledgor thereunder are true and correct
on and as of the date hereof. In furtherance of the foregoing, the New
Guarantor, as security for the payment and performance in full of the Note
Obligations
86
ANNEX I
TO THE SECOND PRIORITY
COLLATERAL AGREEMENT
(as defined in the Second Priority Collateral Agreement), does hereby create and
grant to the Collateral Agent, its successors and assigns, for the benefit of
the Secured Parties, a security interest in and lien on all of the New
Guarantor's right, title and interest in and to the Collateral (as defined in
the Second Priority Collateral Agreement) of the New Guarantor, subject to the
provisions of the Intercreditor Agreement (as provided in Section 2.01 of the
Second Priority Collateral Agreement). Each reference to a "Grantor" and
"Pledgor" in the Second Priority Collateral Agreement shall be deemed to include
the New Guarantor. The Second Priority Collateral Agreement is hereby
incorporated herein by reference.
SECTION 2. The New Guarantor represents and warrants to the
Collateral Agent and the other Secured Parties that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms
(subject to applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer, fraudulent conveyance or other similar laws affecting
creditors' rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law).
SECTION 3. This Supplement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Collateral
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Guarantor and the Collateral Agent.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.
SECTION 4. The New Guarantor hereby represents and warrants
that (a) set forth on Schedule I attached hereto is a true and correct schedule
of the location of any office in a jurisdiction that has not adopted Revised
Article 9 of the Uniform Commercial Code in which it maintains books and records
relating to the Collateral owned by it or which Collateral owned by it is
located, (b) the New Guarantor hereby represents and warrants that set forth on
Schedule II attached hereto is a true and correct schedule of all Pledged
Securities owned by such New Guarantor, and (c) set forth under its signature
hereto, is the true and correct legal name of the New Guarantor, its
jurisdiction of formation and the location of its chief executive office.
SECTION 5. Except as expressly supplemented hereby, the Second
Priority Collateral Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
87
ANNEX I
TO THE SECOND PRIORITY
COLLATERAL AGREEMENT
SECTION 7. In case any one or more of the provisions contained
in this Supplement should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and in the Second Priority Collateral Agreement shall not in
any way be affected or impaired thereby (it being understood that the invalidity
of a particular provision in a particular jurisdiction shall not in and of
itself affect the validity of such provision in any other jurisdiction). The
parties hereto shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 8. All communications and notices hereunder shall be
in writing and given as provided in Section 7.01 of the Second Priority
Collateral Agreement. All communications and notices hereunder to the New
Guarantor shall be given to it in care of the Company.
SECTION 9. The New Guarantor agrees to reimburse the
Collateral Agent for its reasonable out-of-pocket expenses in connection with
this Supplement, including the reasonable fees, other charges and disbursements
of counsel for the Collateral Agent.
IN WITNESS WHEREOF, the New Guarantor and the Collateral Agent
have duly executed this Supplement to the Second Priority Collateral Agreement
as of the day and year first above written.
[Name Of New Guarantor], a [_________]
by ____________________________
Name:
Title:
Address:
U.S. BANK NATIONAL ASSOCIATION,
as Collateral Agent,
by _____________________________
Name:
Title:
Address:
88
SCHEDULE I
TO SUPPLEMENT NO. ___ TO
THE SECOND PRIORITY
COLLATERAL AGREEMENT
LOCATION OF NEW COLLATERAL
Description Location
----------- --------
89
SCHEDULE II
TO SUPPLEMENT NO.___ TO
THE SECOND PRIORITY
COLLATERAL AGREEMENT
Pledged Securities of the New Guarantor
EQUITY SECURITIES
Number and
Number of Registered Class of Percentage
Issuer Certificate Owner Shares of Shares
------ ----------- ---------- ----------- ----------
DEBT SECURITIES
Principal
Issuer Amount Date of Note Maturity Date
------ --------- ------------ -------------
90
