EXHIBIT 10.1
CREDIT AGREEMENT
(REVOLVING LOAN)
BY AND BETWEEN
COBANK, ACB,
AS LEAD ARRANGER, BOOK RUNNER, ADMINISTRATIVE AGENT AND BID AGENT
AND AS A SYNDICATION PARTY,
SUNTRUST BANK, COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A. "RABOBANK INTERNATIONAL", NEW YORK BRANCH,
AND BNP PARIBAS,
AS CO-SYNDICATION AGENTS AND AS SYNDICATION PARTIES,
U.S. BANK NATIONAL ASSOCIATION, DEERE CREDIT, INC., HARRIS TRUST
AND SAVINGS BANK, AND WELLS FARGO BANK, NATIONAL ASSOCIATION,
AS SENIOR-MANAGING AGENTS AND AS SYNDICATION PARTIES,
THE BANK OF TOKYO-MITSUBISHI, LTD., CHICAGO BRANCH, AND FORTIS
CAPITAL CORP.,
AS MANAGING AGENTS AND AS SYNDICATION PARTIES,
NATEXIS BANQUES POPULAIRES, AGFIRST FARM CREDIT BANK, CREDIT
AGRICOLE INDOSUEZ, BANK OF AMERICA, NATIONAL ASSOCIATION, AND
NATIONAL CITY BANK OF INDIANA,
AS SYNDICATION PARTIES,
AND
CENEX HARVEST STATES COOPERATIVES
DATED AS OF MAY 21, 2003
CREDIT AGREEMENT
(REVOLVING LOAN)
THIS AGREEMENT ("CREDIT AGREEMENT") is entered into as of the 21st day of
May 2003, by and between COBANK, ACB ("COBANK") for its own benefit as a
Syndication Party, and as the Administrative Agent for the benefit of the
present and future Syndication Parties (in that capacity "ADMINISTRATIVE
AGENT"), the Syndication Parties identified on Schedule 1 hereto, and CENEX
HARVEST STATES COOPERATIVES, a cooperative corporation formed under the laws of
the State of Minnesota, whose address is 5500 Cenex Drive, Inver Grove Heights,
Minnesota 55077 ("BORROWER").
ARTICLE 1. DEFINED TERMS
As used in this Credit Agreement, the following terms shall have the
meanings set forth below (and such meaning shall be equally applicable to both
the singular and plural form of the terms defined, as the context may require):
1.1 Additional Costs: shall have the meaning set forth in Section 17.12.
1.2 Adjusted Consolidated Funded Debt: All Consolidated Funded Debt of
Borrower and its Consolidated Subsidiaries, plus the net present value of
operating leases of Borrower and its Consolidated Subsidiaries as discounted by
a rate of 8.0% per annum.
1.3 Administrative Agent: shall initially mean CoBank, ACB.
1.4 Administrative Agent Office: shall mean the address set forth at
Subsection 17.4.2, as it may change from time to time by notice to all parties
to this Credit Agreement.
1.5 Advance: an advance of funds under either the 364-Day Facility or the
3-Year Facility.
1.6 Advance Date: a day (which shall be a Banking Day) on which an Advance
is made.
1.7 Advance Payment: shall have the meaning set forth in Section 16.1.
1.8 Affected Loans: shall have the meaning set forth in Subsection 6.2.3.
1.9 Affiliate: with respect to any Person means (a) a Subsidiary of such
Person, (b) any Person in which such Person, directly or indirectly, owns more
than five percent (5.0%) of the outstanding equity thereof, and (c) any Person
which, directly or indirectly, (i) owns more than five percent (5.0%) of the
outstanding equity of such Person, or (ii) has the power under ordinary
circumstances to control the management of such Person.
1.10 Aggregate Commitment: shall mean at any time the 364-Day Commitment
plus the 3-Year Commitment.
1.11 Amortization: the total amortization of Borrower and its Consolidated
Subsidiaries as measured in accordance with GAAP.
1.12 Annual Operating Budget: means the annual operating budget for
Borrower and its Subsidiaries in substantially the form of, and containing
substantially the same or similar information as set forth in, the Annual
Operating Budget (Business Plan) for Borrower and its Subsidiaries included in
the Confidential Information Memorandum dated March 2003 delivered to the
Syndication Parties prior to the Closing Date.
1.13 Anti-Terrorism Laws: shall have the meaning set forth in Subsection
10.24.1.
1.14 Applicable Lending Office: means, for each Syndication Party and for
each type of Advance, the lending office of such Syndication Party designated as
such for such type of Advance on its signature page hereof or in the applicable
Syndication Acquisition Agreement or such other office of such Syndication Party
as such Syndication Party may from time to time specify to the Administrative
Agent and Borrower as the office by which its Advances of such type are to be
made and maintained.
1.15 Authorized Officer: shall have the meaning set forth in Subsection
11.1.4.
1.16 Bank Debt: all amounts owing under the Note, fees, Borrower's
obligations to purchase Bank Equity Interests, Funding Losses and all interest,
expenses, charges and other amounts payable by Borrower pursuant to the Loan
Documents.
1.17 Banking Day: any day (a) other than a Saturday or Sunday and other
than a day which is a Federal legal holiday or a legal holiday for banks in the
States of Colorado, Minnesota, or New York, and (b) if such day relates to a
borrowing of, a payment or prepayment of principal of or interest on, a
continuation of or conversion into, or a LIBO Rate Period for, a LIBO Rate Loan,
or a notice by Borrower with respect to any such borrowing, payment, prepayment,
continuation, conversion, or LIBO Rate Period, on which dealings in U.S. Dollar
deposits are carried out in the London interbank market.
1.18 Bank Equity Interests: shall have the meaning set forth in Article 8
hereof.
1.19 Base Rate: a rate of interest per annum equal to the "prime rate" as
published from time to time in the Eastern Edition of the WALL STREET JOURNAL as
the average prime lending rate for seventy-five percent (75%) of the United
States' thirty (30) largest commercial banks, or if the WALL STREET JOURNAL
shall cease publication or cease publishing the "prime rate" on a regular basis,
such other regularly published average prime rate applicable to such commercial
banks as is acceptable to the Administrative Agent in its reasonable discretion,
with the consent of Borrower, which consent will not be unreasonably withheld
(provided that Borrower's consent shall not be required at any time there has
occurred and is continuing a Potential Default or an Event of Default).
1.20 Base Rate Loans: shall have the meaning set forth in Subsection 6.1.1.
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1.21 Bid: shall have the meaning set forth in Section 4.4.
1.22 Bid Agent: shall mean CoBank, ACB.
1.23 Bid Maturity Date: shall have the meaning set forth in Section 4.3.
1.24 Bid Request: shall have the meaning set forth in Section 4.3.
1.25 Bid Results Notice: shall have the meaning set forth in Section 4.4.
1.26 Bid Rate: shall have the meaning set forth in Section 4.4.
1.27 Bid Selection Notice: shall have the meaning set forth in Section 4.5.
1.28 Borrower's Account: shall mean Borrower's account #44070 at Wells
Fargo Bank, N.A., Minneapolis, Minnesota (ABA #091000019).
1.29 Borrower Benefit Plan: means (a) any "employee benefit plan", as such
term is defined in Section 3(3) of ERISA (including any "multiemployer plan" as
defined in Section 3(37) of ERISA); (b) any "multiple employer plan" within the
meaning of Section 413 of the Code; (c) any "multiple employer welfare
arrangement" within the meaning of Section 3(40) of ERISA; (d) a "voluntary
employees' beneficiary association" within the meaning of Section 501(a)(9) of
the Code; (e) a "welfare benefit fund" within the meaning of Section 419 of the
Code; or (f) any employee welfare benefit plan within the meaning of Section
3(1) of ERISA for the benefit of retired or former employees, which is
maintained by Borrower or in which Borrower participates or to which Borrower is
obligated to contribute.
1.30 Borrowing Notice: shall mean a 364-Day Borrowing Notice or a 3-Year
Borrowing Notice, as applicable.
1.31 Borrower Pension Plan: means each Borrower Benefit Plan that is an
"employee pension benefit plan" as defined in Section 3(2) of ERISA that is
intended to satisfy the requirements of Section 401(a) of the Code.
1.32 Capital Leases: means any lease of property (whether real, personal or
mixed) by a Person which has been or should be , in accordance with GAAP,
reflected on the balance sheet of such Person as a capital lease.
1.33 Cash Collateral Account: shall have the meaning set forth in Section
5.6.
1.34 CERCLA : shall have the meaning set forth in Section 1.62.
1.35 Change in Law: shall have the meaning set forth in Subsection 6.2.2.
1.36 Closing Date: that date, which must occur on or before May 21, 2003,
on which the Administrative Agent, the Bid Agent, the Syndication Parties, and
Borrower have executed all Loan Documents to which they are parties and on which
the conditions set forth in Section 11.1 of this Credit Agreement have been met.
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1.37 Code: means the Internal Revenue Code of 1986.
1.38 Committed LC Request: shall have the meaning set forth in Subsection
5.1.1.
1.39 Committed Letter of Credit: shall mean a letter of credit issued by
the Letter of Credit Bank pursuant to the provisions of Sections 5.1 and 5.2
hereof.
1.40 Committed Letter of Credit Fee: for any Fiscal Quarter of Borrower
shall be an amount equal to the 3-Year Margin in effect on the first day of such
Fiscal Quarter (a) multiplied by the undrawn face amount of each Committed
Letter of Credit for each day during such Fiscal Quarter, (b) divided by 360.
1.41 Committed 364-Day Advances: the principal amount of all 364-Day
Facility Advances which any Syndication Party is obligated to make as a result
of such Syndication Party having received a 364-Day Funding Notice pursuant to
Section 2.2 hereof, but which has not been funded.
1.42 Committed 3-Year Advances: the principal amount of all 3-Year Facility
Advances which any Syndication Party is obligated to make as a result of such
Syndication Party having received a 3-Year Funding Notice pursuant to Section
3.3 hereof, but which has not been funded.
1.43 Compliance Certificate: a certificate of the chief financial officer
of Borrower acceptable to the Administrative Agent and in the form attached
hereto as Exhibit 1.43.
1.44 Communications: shall have the meaning set forth in Subsection
17.16.1.
1.45 Consolidated Cash Flow: for any period, the sum of (a) earnings before
income taxes of Borrower and its Consolidated Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP; plus (b) amounts
that have been deducted in the determination of such earnings before income
taxes for such period for (i) Consolidated Interest Expense for such period,
(ii) Depreciation for such period, (iii) Amortization for such period, and (iv)
extraordinary and/or one-time non-cash losses for such period; minus (c) the
amounts that have been included in the determination of such earnings before
income taxes for such period for (i) extraordinary and/or one-time income, (ii)
non-cash patronage income, and (iii) non-cash equity earnings in joint ventures.
1.46 Consolidated Current Assets: the total current assets of Borrower and
its Consolidated Subsidiaries as measured in accordance with GAAP.
1.47 Consolidated Current Liabilities: the total current liabilities of
Borrower and its Consolidated Subsidiaries as measured in accordance with GAAP.
1.48 Consolidated Funded Debt: all indebtedness for borrowed money of the
Borrower and its Subsidiaries, that is classified as long term debt in
accordance with GAAP, and shall include Debt of such maturity created or assumed
by the Borrower or any Consolidated Subsidiary either directly or indirectly,
including obligations of such maturity secured by liens upon property
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of the Borrower or its Consolidated Subsidiaries and upon which such entity
customarily pays the interest, and all rental payments under capitalized leases
of such maturity.
1.49 Consolidated Interest Expense: for any period, all interest expense of
Borrower and its Consolidated Subsidiaries, as determined in accordance with
GAAP.
1.50 Consolidated Members' and Patrons' Equity: the amount of equity
accounts plus (or minus in the case of a deficit) the amount of surplus and
retained earnings accounts of Borrower and its Consolidated Subsidiaries and the
minority interest in Subsidiaries, provided that the total amount of intangible
assets of Borrower and its Consolidated Subsidiaries (including, without
limitation, unamortized debt discount and expense, deferred charges and
goodwill) included therein shall not exceed $30,000,000 (and to the extent such
intangible assets exceed $30,000,000.00, they will not be included in the
calculation of Consolidated Members' and Patrons' Equity); all as determined in
accordance with GAAP consistently applied.
1.51 Consolidated Subsidiary: (a) any Subsidiary whose accounts are
consolidated with those of Borrower in accordance with GAAP and (b) Ventura
Foods, LLC so long as the accounts thereof are required to be consolidated with
those of Borrower in accordance with GAAP.
1.52 Contributing Syndication Parties: shall have the meaning set forth in
Section 16.4.
1.53 Control Agreement: means a control agreement, in form and substance
satisfactory to the Administrative Agent, executed and delivered by Borrower,
the Administrative Agent, and the applicable securities intermediary with
respect to a Securities Account (as defined in the Colorado Uniform Commercial
Code) or bank with respect to a deposit account.
1.54 Converted LC: shall have the meaning set forth in Section 5.6.
1.55 Debt: means as to any Person: (a) indebtedness or liability of such
Person for borrowed money, or for the deferred purchase price of property or
services (including trade obligations); (b) obligations of such Person as lessee
under capital leases; (c) obligations of such Person arising under bankers' or
trade acceptance facilities; (d) all guarantees, endorsements (other than for
collection or deposit in the ordinary course of business), and other contingent
obligations of such Person to purchase any of the items included in this
definition, to provide funds for payment, to supply funds to invest in any other
Person, or otherwise to assure a creditor of another Person against loss
(without duplication) ; (e) all obligations secured by a lien on property owned
by such Person, whether or not the obligations have been assumed; and (f) all
obligations of such Person under any agreement providing for an interest rate
swap, cap, cap and floor, contingent participation or other hedging mechanisms
with respect to interest payable on any of the items described in this
definition.
1.56 Default Interest Rate: a rate of interest equal to 200 basis points in
excess of the Base Rate which would otherwise be applicable on the Loan.
1.57 Delinquency Interest: shall have the meaning set forth in Section
16.4.
1.58 Delinquent Amount: shall have the meaning set forth in Section 16.4.
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1.59 Delinquent Syndication Party: shall have the meaning set forth in
Section 16.4.
1.60 Depreciation: the total depreciation of Borrower and its Consolidated
Subsidiaries as measured in accordance with GAAP.
1.61 Embargoed Person: shall have the meaning set forth in Section 12.15.
1.62 Environmental Laws: any federal, state, or local law, statute,
ordinance, rule, regulation, administration order, or permit now in effect or
hereinafter enacted, pertaining to the public health, safety, industrial
hygiene, or the environmental conditions on, under or about any of the real
property interests of a Person, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 as amended, 42
U.S.C. 9601-9657 ("CERCLA") and the Resource Conservation and Recovery Act of
1976, 42 U.S.C. 6901-6987 ("RCRA").
1.63 Environmental Regulations: as defined in the definition of Hazardous
Substances.
1.64 ERISA: shall have the meaning set forth in Section 10.10.
1.65 ERISA Affiliate: means any corporation or trade or business which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as Borrower or is under common control (within the
meaning of Section 414(c) of the Code) with Borrower, provided, however, that
for purposes of provisions herein concerning minimum funding obligations
(imposed under Section 412 of the Code or Section 302 of ERISA), the term "ERISA
Affiliate" shall also include any entity required to be aggregated with Borrower
under Section 414(m) or 414(o) of the Code.
1.66 Event of Default: shall have the meaning set forth in Section 15.1.
1.67 Event of Syndication Default: shall have the meaning set forth in
Subsection 16.31.1.
1.68 Executive Order: shall have the meaning set forth in Subsection
10.24.1.
1.69 Existing Credit Agreement: shall mean (a) the Credit Agreement
(Revolving Credit) dated as of June 1, 1998 among Cenex Harvest States
Cooperatives as borrower, St. Paul Bank as co-syndication agent and as a
syndication party, CoBank as co-syndication agent, administrative agent, bid
agent, and syndication party and the other banks signatory thereto, as amended
by (i) the First Amendment to Credit Agreement (Revolving Loan) effective as of
May 28, 1999, by the Second Amendment to Credit Agreement (Revolving Loan) dated
as of May 23, 2000, by the Third Amendment to Credit Agreement (Revolving Loan)
dated as of May 23, 2001, by the Fourth Amendment to Credit Agreement (Revolving
Loan) dated as of May 22, 2002, and by the Fifth Amendment to Credit Agreement
(Revolving Loan) dated as of February 26, 2003; and (b) the promissory notes,
security documents, and other loan documents executed in connection with (a).
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1.70 Existing Letters of Credit: The Letters of Credit which have been
issued for the benefit of Borrower by one or more of the Syndication Parties and
which are outstanding on the Closing Date as listed on Exhibit 1.70 hereto.
1.71 Extended Duration LC: shall have the meaning set forth in Section 5.6.
1.72 Farm Credit System Institution: shall mean any Farm Credit Bank, any
Federal land bank association, any production credit association, the banks for
cooperatives, and such other institutions as may be a part of the Farm Credit
System and chartered by and subject to regulation by the Farm Credit
Administration.
1.73 Fiscal Quarter: each three (3) month period beginning on the first day
of each of the following months: September, December, March and June.
1.74 Fiscal Year: a year commencing on September 1 and ending on August 31.
1.75 Funded Debt: means, with respect to any Person, at any time, all Debt
of such Person in each case maturing by its terms more than one year after the
date of creation thereof, or which is renewable or extendible at the option of
such Person for a period ending more than one (1) year after the date of
creation thereof, and shall include Debt of such maturity created or assumed by
such Person either directly or indirectly, including obligations of such
maturity secured by liens upon property of such Person and upon which such
Person customarily pays the interest, and all obligations of such Person under
Capital Leases of such maturity, and the net present value of obligations under
Operating Leases as discounted by a rate of 8.0% per annum, and all obligations
to reimburse the Letter of Credit Bank or any Syndication Party with respect to
all Letters of Credit which support long-term debt, with expiration dates in
excess of one year from the date of issuance thereof.
1.76 Funding Losses: shall have the meaning set forth in Section 7.5.
1.77 Funding Loss Notice: shall have the meaning set forth in Section 7.5.
1.78 Funding Share: shall mean the amount of any Advance which each
Syndication Party is required to fund, which shall be determined as follows: (a)
for an Advance under the 364-Day Facility (other than pursuant to a Bid Advance
or an Overnight Advance), the amount of such Advance multiplied by such
Syndication Party's Individual 364-Day Pro Rata Share as of the date of the
364-Day Funding Notice for, but without giving effect to, such Advance; (b) for
an Advance under the 3-Year Facility (other than pursuant to a Bid Advance), the
amount of such Advance multiplied by such Syndication Party's Individual 3-Year
Pro Rata Share as of the date of the 3-Year Funding Notice for, but without
giving effect to, such Advance; (c) for an Advance under a Bid won by such
Syndication Party, the amount of such Bid; and (d) for an Overnight Advance, the
amount determined as provided in Section 4.10 hereof.
1.79 GAAP: generally accepted accounting principles in the United States of
America, as in effect from time to time.
1.80 Good Faith Contest: means the contest of an item if (a) the item is
diligently contested in good faith by appropriate proceedings timely instituted,
(b) either the item is (i)
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bonded or (ii) adequate reserves are established with respect to the contested
item if and to the extent required in accordance with GAAP, (c) during the
period of such contest, the enforcement of any contested item is effectively
stayed, and (d) the failure to pay or comply with the contested item could not
reasonably be expected to result in a Material Adverse Effect.
1.81 Governmental Authority: means any nation or government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
1.82 Hazardous Substances: dangerous, toxic or hazardous pollutants,
contaminants, chemicals, wastes, materials or substances, as defined in or
governed by the provisions of any Environmental Laws or any other federal, state
or local law, statute, code, ordinance, regulation, requirement or rule relating
thereto ("ENVIRONMENTAL REGULATIONS"), and also including urea formaldehyde,
polychlorinated biphenyls, asbestos, asbestos-containing materials, nuclear fuel
or waste, and petroleum products, or any other waste, material, substances,
pollutant or contaminant which would subject an owner of property to any
damages, penalties or liabilities under any applicable Environmental
Regulations.
1.83 Holdout Lender : shall have the meaning set forth in Section 16.33.
1.84 Indemnified Agency Parties: shall have the meaning set forth in
Section 16.20.
1.85 Indemnified Parties: shall have the meaning set forth in Section 14.1.
1.86 Individual Commitment: shall mean with respect to any Syndication
Party, its Individual 3-Year Commitment and/or its Individual 364-Day
Commitment, as applicable.
1.87 Individual 364-Day Commitment: shall mean with respect to any
Syndication Party the amount shown as its Individual 364-Day Commitment on
Schedule 1 hereto, subject to adjustment in the event of the sale of all or a
portion of a Syndication Interest in accordance with Section 16.28 hereof, or a
reduction in the 364-Day Commitment in accordance with Section 2.8 hereof.
1.88 Individual 3-Year Commitment: shall mean with respect to any
Syndication Party the amount shown as its Individual 3-Year Commitment on
Schedule 1 hereto, subject to adjustment in the event of the sale of all or a
portion of a Syndication Interest in accordance with Section 16.28 hereof, or a
reduction in the 3-Year Commitment in accordance with Section 3.8 hereof.
1.89 Individual 364-Day Lending Capacity: shall mean with respect to any
Syndication Party the amount at any time of its Individual 364-Day Commitment,
less its Individual Outstanding 364-Day Obligations.
1.90 Individual 3-Year Lending Capacity: shall mean with respect to any
Syndication Party the amount at any time of its Individual 3-Year Commitment,
less its Individual Outstanding 3-Year Obligations.
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1.91 Individual Outstanding 364-Day Obligations: shall mean with respect to
any Syndication Party the total at any time, without duplication, of (a) the
aggregate outstanding principal amount of all 364-Day Advances made by such
Syndication Party (including, without duplication, Overnight Advances made by
such Syndication Party in its capacity as an Overnight Lender), (b) the
aggregate outstanding principal amount of all 364-Day Bid Advances made by such
Syndication Party, and (c) all of such Syndication Party's Committed 364-Day
Advances.
1.92 Individual Outstanding 3-Year Obligations: shall mean with respect to
any Syndication Party the total at any time, without duplication, of (a) the
aggregate outstanding principal amount of all 3-Year Advances made by such
Syndication Party, (b) the aggregate outstanding principal amount of all 3-Year
Bid Advances made by such Syndication Party, (c) the undrawn face amount of all
outstanding Negotiated Letters of Credit as to which such Syndication Party is
the Issuing Syndication Party, (d) such Syndication Party's 3-Year Pro Rata
Share of the undrawn face amount of all outstanding Committed Letters of Credit;
and (e) all of such Syndication Party's Committed 3-Year Advances.
1.93 Individual 364-Day Pro Rata Share: shall mean with respect to any
Syndication Party a fraction, expressed as a percentage (rounded to 8 decimal
points), where the numerator is such Syndication Party's Individual 364-Day
Commitment less such Syndication Party's Individual Outstanding 364-Day
Obligations; and the denominator is the 364-Day Commitment less the sum of the
Individual Outstanding 364-Day Obligations of all of the Syndication Parties,
determined (a) in the case of LIBO Rate Loans, at 12:00 noon (Central time) on
the Banking Day Borrower delivers a 364-Day Borrowing Notice pursuant to which
Borrower requests such LIBOR Loan, and (b) in all other cases, 12:00 noon
(Central time) on the Banking Day Borrower delivers a 364-Day Borrowing Notice
or a Bid Request or requests a Letter of Credit under the 364-Day Facility.
1.94 Individual 3-Year Pro Rata Share: shall mean with respect to any
Syndication Party a fraction, expressed as a percentage (rounded to 8 decimal
points), where the numerator is such Syndication Party's Individual 3-Year
Commitment less such Syndication Party's Individual Outstanding 3-Year
Obligations; and the denominator is the 3-Year Commitment less the sum of the
Individual Outstanding 3-Year Obligations of all of the Syndication Parties,
determined (a) in the case of LIBO Rate Loans, at 12:00 noon (Central time) on
the Banking Day Borrower delivers a 3-Year Borrowing Notice pursuant to which
Borrower requests such LIBOR Loan, and (b) in all other cases, 12:00 noon
(Central time) on the Banking Day Borrower delivers a 3-Year Borrowing Notice or
requests a Letter of Credit under the 3-Year Facility.
1.95 Intellectual Property: shall have the meaning set forth in Section
10.18.
1.96 Investment: means, with respect to any Person, (a) any loan or advance
by such Person to any other Person, (b) the purchase or other acquisition by
such Person of any capital stock, obligations or securities of, or any capital
contribution to, or investment in, or the acquisition by such Person of all or
substantially all of the assets of, or any interest in, any other Person, (c)
any performance or standby letter of credit where (i) that Person has the
reimbursement obligation to the issuer, and (ii) the proceeds of such letter of
credit are to be used for the benefit of any other Person, (d) the agreement by
such Person to make funds available for the benefit of another Person to either
cover cost overruns incurred in connection with the construction of a project or
facility, or to fund a debt service reserve account, (e) the agreement by such
Person to
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assume, guarantee, endorse or otherwise be or become directly or contingently
responsible or liable for the obligations or debts of any other Person (other
than by endorsement for collection in the ordinary course of business), (f) an
agreement to purchase any obligations, stocks, assets, goods or services but
excluding an agreement to purchase any assets, goods or services entered into in
the ordinary course of business, (g) an agreement to supply or advance any
assets, goods or services not in the ordinary course of business, or (h) an
agreement to maintain or cause such Person to maintain a minimum working capital
or net worth or otherwise to assure the creditors of any Person against loss.
1.97 Issuance Fee: shall be, with respect to each Committed Letter of
Credit, the greater of (a) $2,500.00; or (b) the face amount of such Letter of
Credit multiplied by 20 basis points.
1.98 Issuing Syndication Party: shall have the meaning set forth in Section
5.3.
1.99 LC Commitment: shall be $75,000,000.00.
1.100 Letters of Credit: collectively all Committed Letters of Credit, and
all Negotiated Letters of Credit, outstanding at any time.
1.101 Letter of Credit Bank: CoBank, ACB.
1.102 LIBO Rate: the rate for deposits in U.S. dollars with maturities
comparable to the selected LIBO Rate Period as quoted by the British Bankers'
Association for the purpose of displaying London Interbank Offered Rates for
U.S. Dollar deposits, determined effective as of 11:00 A.M. (London Time) on the
day which is two (2) Banking Days prior to the first day of each LIBO Rate
Period, reserve adjusted for Regulation D on a demonstrated basis, with such
rate modified by adding the 364-Day Margin or the 3-Year Margin, depending on
whether the LIBO Rate Loan is being made under the 364-Day Facility or the
3-Year Facility, respectively.
1.103 LIBO Rate Loan: shall have the meaning set forth in Subsection 6.1.2.
1.104 LIBO Rate Period: shall have the meaning set forth in Subsection
6.1.2.
1.105 LIBO Request: shall have the meaning set forth in Subsection 6.1.2.
1.106 Licensing Laws: shall have the meaning set forth in Section 10.4.
1.107 Lien: means with respect to any asset any mortgage, deed of trust,
pledge, security interest, hypothecation, assignment for security purposes,
encumbrance, lien (statutory or other), or other security agreement or charge,
or encumbrance of any kind or nature whatsoever (including, without limitation,
any conditional sale, Capital Lease or other title retention agreement related
to such asset).
1.108 Loans: shall mean, collectively, all Bid Rate Advances, all Base Rate
Loans, all LIBO Rate Loans, and all Overnight Loans outstanding at any time.
1.109 Loan Documents: this Credit Agreement and the Notes.
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1.110 Material Adverse Effect: means a material adverse effect on (a) the
financial condition, results of operation, business or property of Borrower; or
(b) on the ability of Borrower to perform its obligations under this Credit
Agreement and the other Loan Documents; or (c) on the ability of the
Administrative Agent or the Syndication Parties to enforce their rights and
remedies against Borrower under the Loan Documents.
1.111 Material Agreements: all agreements of Borrower, the termination or
breach of which, based upon Borrower's knowledge as of the date of making any
representation with respect thereto, would have a Material Adverse Effect.
1.112 Multiemployer Plan: means a Plan meeting the definition of a
"multiemployer plan" in Section 3(37) of ERISA.
1.113 NCRA: shall have the meaning set forth in Section 13.5.
1.114 Negotiated LC Request: shall have the meaning set forth in Subsection
5.1.2.
1.115 Negotiated Letter of Credit: shall mean a letter of credit issued by
a Syndication Party pursuant to the provisions of Sections 5.1 and 5.3 hereof
and shall include all Existing Letters of Credit as to which such Syndication
Party was the Issuing Syndication Party.
1.116 Non-US Lender: shall have the meaning set forth in Section 16.32.
1.117 Note or Notes: the 364-Day Facility Notes and/or the 3-Year Facility
Notes, as applicable, and all amendments, renewals, substitutions and extensions
thereof.
1.118 OFAC: shall have the meaning set forth in Section 12.15.
1.119 Operating Lease: means any lease of property (whether real, personal
or mixed) by a Person under which such Person is lessee, other than a Capital
Lease.
1.120 Organization Documents: in the case of a corporation, its articles or
certificate of incorporation and bylaws; in the case of a partnership, its
partnership agreement and certificate of limited partnership, if applicable; in
the case of a limited liability company, its articles of organization and its
operating agreement.
1.121 Other List: shall have the meaning set forth in Section 12.15.
1.122 Overnight Advance: shall have the meaning set forth in Section 4.10.
1.123 Overnight Advance Request: shall have the meaning set forth in
Section 4.10.
1.124 Overnight Funding Commitment: shall mean $20,000,000.00.
1.125 Overnight Lender: shall mean CoBank.
1.126 Overnight Maturity Date: shall have the meaning set forth in Section
4.10.
1.127 Overnight Rate: shall have the meaning set forth in Section 4.10.
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1.128 Payment Account: shall have the meaning set forth in Section 16.11.
1.129 Payment Distribution: shall have the meaning set forth in Section
16.11.
1.130 PBGC: shall have the meaning set forth in Section 10.10.
1.131 Permitted Encumbrance: shall have the meaning set forth in Section
13.3.
1.132 Person: any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, cooperative association, institution, government or
governmental agency (whether national, federal, state, provincial, country,
city, municipal or otherwise, including without limitation, and instrumentality,
division, agency, body or department thereof), or other entity.
1.133 Plan: means any plan, agreement, arrangement or commitment which is
an employee benefit plan, as defined in Section 3(3) of ERISA, maintained by
Borrower or any Subsidiary or any ERISA Affiliate or with respect to which
Borrower or any Subsidiary or any ERISA Affiliate at any relevant time has any
liability or obligation to contribute.
1.134 Platform: shall have the meaning set forth in Subsection 17.16.2.
1.135 Potential Default: any event, other than an event described in
Section 15.1(a) hereof, which with the giving of notice or lapse of time, or
both, would become an Event of Default.
1.136 Primary Portal: shall have the meaning set forth in Subsection
17.16.2.
1.137 Prohibited Transaction: means any transaction prohibited under
Section 406 of ERISA or Section 4975 of the Code.
1.138 RCRA : shall have the meaning set forth in Section 1.62.
1.139 Regulatory Change: shall have the meaning set forth in Section 17.12.
1.140 Replacement Lender: shall have the meaning set forth in Section
16.33.
1.141 Reportable Event: means any of the events set forth in Section
4043(b) of ERISA or in the regulations thereunder.
1.142 Requested 364-Day Advance: shall mean the amount of Advance requested
by Borrower in any 364-Day Borrowing Notice.
1.143 Requested 3-Year Advance: shall mean the amount of Advance requested
by Borrower in any 3-Year Borrowing Notice.
1.144 Required Lenders: shall mean Syndication Parties (including Voting
Participants) whose aggregate Individual 364-Day Commitments and Individual
3-Year Commitments constitute fifty-one percent (51.0%) of the Aggregate
Commitment; provided that the number of Syndication Parties (including Voting
Participants) which constitute the Required Lenders must be
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the lesser of (i) all, or (ii) no fewer than three (3), if fewer than three (3)
Syndication Parties (including Voting Participants) would constitute fifty-one
percent (51.0%) of the aggregate Individual 364-Day Commitments and Individual
3-Year Commitments. Pursuant to Section 16.29 hereof, Voting Participants shall,
under the circumstances set forth therein, be entitled to voting rights and to
be included in determining whether certain action is being taken by the Required
Lenders.
1.145 Required License: shall have the meaning set forth in Section 10.09.
1.146 Restricted Subsidiary: shall mean those Subsidiaries identified on
Exhibit 1.146 hereto, as it may be amended from time to time with the prior
written consent of Borrower, the Administrative Agent and the Required Lenders.
1.147 SDN List: shall have the meaning set forth in Section 12.15.
1.148 Subsidiary: means with respect to any Person: (a) any corporation in
which such Person, directly or indirectly, (i) owns more than fifty percent
(50%) of the outstanding stock thereof, or (ii) has the power under ordinary
circumstances to elect at least a majority of the directors thereof, or (b) any
partnership, association, joint venture, limited liability company, or other
unincorporated organization or entity, other than Ventura Foods, LLC, with
respect to which such Person, (i) directly or indirectly owns more than fifty
percent (50%) of the equity interest thereof, or (ii) directly or indirectly
owns an equity interest in an amount sufficient to control the management
thereof. All of Borrower's Subsidiaries owned as of the Closing Date are set
forth on Exhibit 1.148 hereto.
1.149 Successor Agent: such Person as may be appointed as successor to the
rights and duties of the Administrative Agent as provided in Section 16.23 of
this Credit Agreement.
1.150 Syndication Acquisition Agreement: shall have the meaning set forth
in Section 16.28.
1.151 Syndication Interest: shall have the meaning set forth in Section
16.1.
1.152 Syndication Parties: shall mean those entities listed on Schedule 1
hereto as having an Individual 364-Day Commitment and/or an Individual 3-Year
Commitment, and such Persons as shall from time to time execute a Syndication
Acquisition Agreement substantially in the form of Exhibit 16.28 hereto
signifying their election to purchase all or a portion of the Syndication
Interest of any Syndication Party, in accordance with Section 16.28 hereof, and
to become a Syndication Party hereunder.
1.153 Syndication Party Advance Date: shall have the meaning set forth in
Section 16.2.
1.154 Term Loan Credit Agreement: shall mean that certain Credit Agreement
(Term Loan) dated as of June 1, 1998 by and between Borrower and St. Paul Bank,
as administrative agent for all syndication parties thereunder, and as a
syndication party thereunder, CoBank, and the other syndication parties set
forth on the signature pages thereto, as amended from time to time.
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1.155 364-Day Advance: shall have the meaning set forth in Subsection 2.1.
1.156 364-Day Availability Period: shall mean the period from the Closing
Date until the 364-Day Maturity Date.
1.157 364-Day Bid Advance: shall have the meaning set forth in Section 4.1.
1.158 364-Day Bid Loan: shall have the meaning set forth in Section 4.1.
1.159 364-Day Borrowing Notice: shall have the meaning set forth in Section
2.3.
1.160 364-Day Commitment: shall be $600,000,000.00, subject to reduction as
provided in Section 2.8 hereof.
1.161 364-Day Facility: shall mean the loan facility made available to
Borrower under Article 2 of this Agreement.
1.162 364-Day Facility Fee Factor: the 364-Day Facility Fee Factor
determined as set forth in Schedule 2 hereto and Section 6.6 hereof.
1.163 364-Day Facility Fee: shall have the meaning set forth in Subsection
6.5.1.
1.164 364-Day Facility Note(s): shall have the meaning set forth in Section
2.4.
1.165 364-Day Funding Notice: shall have the meaning set forth in Section
2.3.
1.166 364-Day Margin: the 364-Day Margin determined as set forth in
Schedule 2 hereto and Section 6.6 hereto.
1.167 364-Day Maturity Date: [May 20], 2004.
1.168 3-Year Advance: shall have the meaning set forth in Subsection 3.1.
1.169 3-Year Availability Period: shall mean the period from the Closing
Date until the 3-Year Maturity Date.
1.170 3-Year Bid Advance: shall have the meaning set forth in Section 4.2.
1.171 3-Year Bid Loan: shall have the meaning set forth in Section 4.2.
1.172 3-Year Borrowing Notice: shall have the meaning set forth in Section
3.3.
1.173 3-Year Commitment: shall be $100,000,000.00, subject to reduction as
provided in Section 3.8 hereof.
1.174 3-Year Facility: shall mean the loan facility made available to
Borrower under Article 3 of this Agreement.
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1.175 3-Year Facility Fee Factor: the 3-Year Facility Fee Factor determined
as set forth in Schedule 2 hereto and Section 6.6 hereof.
1.176 3-Year Facility Fee: shall have the meaning set forth in Subsection
6.5.2.
1.177 3-Year Facility Note: shall have the meaning set forth in Section
3.4.
1.178 3-Year Funding Notice: shall have the meaning set forth in Section
3.3.
1.179 3-Year Margin: the 3-Year Margin determined as set forth in Schedule
2 hereto and Section 6.6 hereto.
1.180 3-Year Maturity Date: [May 21], 2006.
1.181 Transfer: shall have the meaning set forth in Section 16.28.
1.182 Voting Participant : shall have the meaning set forth in Section
16.29.
1.183 Wire Instructions: shall have the meaning set forth in Section 16.30.
ARTICLE 2. 364-DAY FACILITY
2.1 364-Day Facility Loan. On the terms and conditions set forth in this
Credit Agreement, and so long as no Event of Default or Potential Default has
occurred (or if a Potential Default or an Event of Default has occurred, it has
been waived in writing by the Administrative Agent pursuant to the provisions of
Section 16.10 hereof), each of the Syndication Parties severally agrees to
advance funds under the 364-Day Facility (each a "364-DAY ADVANCE") upon receipt
of a 364-Day Funding Notice from time to time during the 364-Day Facility
Availability Period, subject to the following limits:
2.1.1 Individual Syndication Party 364-Day Commitment. No Syndication
Party shall be required or permitted to make a 364-Day Advance which would
exceed its Individual 364-Day Lending Capacity as in effect at the time of the
Administrative Agent's receipt of the 364-Day Borrowing Notice requesting such
Advance.
2.1.2 Individual Syndication Party 364-Day Pro Rata Share. No
Syndication Party shall be required or permitted to fund a 364-Day Advance under
the 364-Day Facility in excess of an amount equal to its Individual 364-Day Pro
Rata Share multiplied by the amount of the requested 364-Day Advance. Each
Syndication Party agrees to fund its Individual 364-Day Pro Rata Share of each
364-Day Advance, except as provided in Section 4.10 hereof regarding Overnight
Loans and in Article 4 hereof regarding 364-Day Bid Advances.
2.2 364-Day Commitment. Borrower shall not be entitled to request a 364-Day
Advance in an amount which, when added to the aggregate Individual Outstanding
364-Day Obligations of all Syndication Parties, would exceed the 364-Day
Commitment.
2.3 364-Day Borrowing Notice; Funding Notice. Borrower shall give the
Administrative Agent prior written notice by facsimile (effective upon receipt)
of each request for a 364-Day Advance (a) in the case of a Base Rate Loan, on or
before 11:00 A.M. (Central time) on
16
the day of making such Base Rate Loan, and (b) in the case of a LIBO Rate Loan,
on or before 11:00 A.M. (Central time) at least three (3) Banking Days prior to
the date of making such LIBO Rate Loan. Each notice must be in substantially the
form of Exhibit 2.3 hereto ("364-DAY BORROWING NOTICE") and must specify (w) the
amount of such 364-Day Advance, (x) the proposed date of making such 364-Day
Advance, (y) whether Borrower requests that the 364-Day Advance will bear
interest at (i) the Base Rate (the amount that is to bear interest at the Base
Rate must be a minimum of $10,000,000.00 and in incremental multiples of
$1,000,000.00) or (ii) the LIBO Rate (the amount that is to bear interest at the
LIBO Rate must be a minimum of $10,000,000.00 and in incremental multiples of
$1,000,000.00), and (z) in the case of a LIBO Rate Loan, the initial LIBO Rate
Period applicable thereto. The Administrative Agent shall, on or before 12:00
noon (Central time) of the same Banking Day, notify each Syndication Party
("364-DAY FUNDING NOTICE") of its receipt of each such 364-Day Borrowing Notice
and the amount of such Syndication Party's Funding Share thereunder. Not later
than 2:00 P.M. (Central time) on the date of a 364-Day Advance, each Syndication
Party will make available to the Administrative Agent at the Administrative
Agent's Office, in immediately available funds, such Syndication Party's Funding
Share of such 364-Day Advance. After the Administrative Agent's receipt of such
funds, but not later than 3:00 P.M. (Central time), and upon fulfillment of the
applicable conditions set forth in Article 11 hereof, the Administrative Agent
will make such 364-Day Advance available to Borrower, in immediately available
funds, and will transmit such funds by wire transfer to Borrower's Account.
2.4 364-Day Facility Promissory Notes. Borrower's obligations to each
Syndication Party under the 364-Day Facility, including Borrower's payment
obligations with respect to all 364-Day Advances made by such Syndication Party,
all Overnight Advances made by the Overnight Lender, and all 364-Day Bid
Advances made by each Syndication Party shall be evidenced by, and repaid with
interest in accordance with, a promissory note of Borrower in substantially the
form of Exhibit 2.4 hereto duly completed, in the stated maximum principal
amount equal to such Syndication Party's Individual 364-Day Facility Commitment,
dated the date of this Credit Agreement, payable to such Syndication Party for
the account of its Applicable Lending Office, and maturing as to principal on
the 364-Day Maturity Date (each a "364-DAY FACILITY NOTE" and collectively, the
"364-DAY FACILITY NOTES").
2.5 Syndication Party Records. Each Syndication Party shall record on its
books and records the amount of each 364-Day Advance (including Overnight
Advances with respect to those Syndication Parties which are also Overnight
Lenders), the rate and interest period applicable thereto, all payments of
principal and interest, and the principal balance from time to time outstanding.
Each Syndication Party's record thereof shall be prima facie evidence as to all
such amounts and shall be binding on Borrower absent manifest error.
Notwithstanding the foregoing, Borrower will never be required to pay to any
Syndication Party as principal more than the principal amount of the 364-Day
Advances, 364-Day Bid Advances, and Overnight Advances funded by such
Syndication Party.
2.6 Use of Proceeds. The proceeds of the 364-Day Advances will be used by
Borrower for refinancing the revolving credit indebtedness owed by Borrower
under the Existing Credit Agreement on the Closing Date, to fund working capital
requirements, and for general corporate purposes, and Borrower agrees not to
request or use such proceeds for any other purpose. Borrower will not, directly
or indirectly, use any part of such proceeds for the purpose of
17
purchasing or carrying any margin stock within the meaning of Regulation U of
the Board of Governors or to extend credit to any Person for the purpose of
purchasing or carrying any such margin stock.
2.7 Syndication Party Funding Failure. The failure of any Syndication Party
to fund its Funding Share of any requested 364-Day Advance or to fund any
364-Day Bid Advance to be made by it on the date specified for such Advance
shall not relieve any other Syndication Party of its obligation (if any) to fund
its Funding Share of any Advance on such date, but, except as provided in
Sections 4.7 and 4.11 hereof, no Syndication Party shall be responsible for the
failure of any other Syndication Party to make any Advance to be made by such
other Syndication Party.
2.8 Reduction of 364-Day Commitment. Borrower may, by written facsimile
notice to the Administrative Agent on or before 10:00 A.M. (Central time) on any
Banking Day, irrevocably reduce the 364-Day Commitment; provided that (a) such
reduction must be in multiples of one-million dollars ($1,000,000.00), and (b)
Borrower must simultaneously make any principal payment necessary (along with
any applicable Funding Losses on account of such principal payment) so that (i)
the aggregate amount of the Individual Outstanding 364-Day Obligations of all
Syndication Parties does not exceed the reduced 364-Day Commitment on the date
of such reduction, and (ii) the Individual Outstanding 364-Day Obligations owing
to any Syndication Party do not exceed the Individual 364-Day Commitment of that
Syndication Party (after reduction thereof in accordance with the following
sentence). In the event the 364-Day Commitment is reduced as provided in the
preceding sentence, then the Individual 364-Day Commitment of each Syndication
Party shall be reduced in the same proportion as the Individual 364-Day
Commitment of such Syndication Party bears to the 364-Day Commitment before such
reduction.
ARTICLE 3. 3-YEAR FACILITY
3.1 3-Year Facility Loan. On the terms and conditions set forth in this
Credit Agreement, and so long as no Event of Default or Potential Default has
occurred (or if a Potential Default or an Event of Default has occurred, it has
been waived in writing by the Administrative Agent pursuant to the provisions of
Section 16.10 hereof), each of the Syndication Parties severally agrees to
advance funds under the 3-Year Facility (each a "3-YEAR ADVANCE") upon receipt
of a 3-Year Funding Notice from time to time during the 3-Year Availability
Period, subject to the following limits:
3.1.1 Individual Syndication Party 3-Year Commitment. No Syndication
Party shall be required or permitted to make a 3-Year Advance which would exceed
its Individual 3-Year Lending Capacity as in effect at the time of the
Administrative Agent's receipt of the 3-Year Borrowing Notice requesting such
Advance.
3.1.2 Individual Syndication Party 3-Year Pro Rata Share. No
Syndication Party shall be required or permitted to fund a 3-Year Advance under
the 3-Year Facility in excess of an amount equal to its Individual 3-Year Pro
Rata Share multiplied by the amount of the requested 3-Year Advance. Each
Syndication Party agrees to fund its Individual 3-Year Pro Rata Share of each
3-Year Advance, except as provided in Article 4 hereof regarding 3-Year Bid
Advances.
18
3.2 3-Year Commitment. Borrower shall not be entitled to request a 3-Year
Advance in an amount which, when added to the aggregate Individual Outstanding
3-Year Obligations of all Syndication Parties, would exceed the 3-Year
Commitment.
3.3 3-Year Borrowing Notice. Borrower shall give the Administrative Agent
prior written notice by facsimile (effective upon receipt) of each request for a
3-Year Advance (a) in the case of a Base Rate Loan, on or before 11:00 A.M.
(Central time) on the day of making such Base Rate Loan, and (b) in the case of
a LIBO Rate Loan, on or before 11:00 A.M. (Central time) at least three (3)
Banking Days prior to the date of making such LIBO Rate Loan. Each notice must
be in substantially the form of Exhibit 3.3 hereto ("3-YEAR BORROWING NOTICE")
and must specify (w) the amount of such Advance, (x) the proposed date of making
such Advance, (y) whether Borrower requests that the Advance will bear interest
at (i) the Base Rate (the amount that is to bear interest at the Base Rate must
be a minimum of $10,000,000.00 and in incremental multiples of $1,000,000.00) or
(ii) the LIBO Rate (the amount that is to bear interest at the LIBO Rate must be
a minimum of $10,000,000.00 and in incremental multiples of $1,000,000.00), and
(z) in the case of a LIBO Rate Loan, the initial LIBO Rate Period applicable
thereto. The Administrative Agent shall, on or before 12:00 noon (Central time)
of the same Banking Day, notify each Syndication Party ("3-YEAR FUNDING NOTICE")
of its receipt of each such 3-Year Borrowing Notice and the amount of such
Syndication Party's Funding Share thereunder. Not later than 2:00 P.M. (Central
time) on the date of a 3-Year Advance, each Syndication Party will make
available to the Administrative Agent at the Administrative Agent's Office, in
immediately available funds, such Syndication Party's Funding Share of such
3-Year Advance. After the Administrative Agent's receipt of such funds, but not
later than 3:00 P.M. (Central time), and upon fulfillment of the applicable
conditions set forth in Article 11 hereof, the Administrative Agent will make
such 3-Year Advance available to Borrower, in immediately available funds, and
will transmit such funds by wire transfer to Borrower's Account.
3.4 3-Year Facility Promissory Notes. Borrower's obligations to each
Syndication Party under the 3-Year Facility, including Borrower's payment
obligations with respect to all 3-Year Facility Advances made by each
Syndication Party shall be evidenced by, and repaid with interest in accordance
with, a promissory note of Borrower in substantially the form of Exhibit 3.4
hereto duly completed, in the stated maximum principal amount equal to such
Syndication Party's Individual 3-Year Facility Commitment, dated the date such
Syndication Party becomes a Syndication Party, payable to such Syndication Party
for the account of its Applicable Lending Office, and maturing as to principal
on the 3-Year Maturity Date (each a "3-YEAR FACILITY NOTE" and collectively, the
"3-YEAR FACILITY NOTES").
3.5 Syndication Party Records. Each Syndication Party shall record on its
books and records the amount of each 3-Year Advance and any unreimbursed
obligations to such Syndication Party with respect to payments by such
Syndication Party under Negotiated Letters of Credit issued by such Syndication
Party made by it hereunder, the rate and interest period applicable thereto, all
payments of principal and interest, and the principal balance from time to time
outstanding. The Syndication Party's record thereof shall be prima facie
evidence as to all such amounts and shall be binding on Borrower absent manifest
error. Notwithstanding the foregoing, Borrower will never be required to pay as
principal more than the principal amount of the 3-Year Advances and 3-Year Bid
Advances funded by such Syndication Party and any
19
unreimbursed obligations to such Syndication Party with respect to payments by
such Syndication Party under Negotiated Letters of Credit issued by such
Syndication Party.
3.6 Use of Proceeds. The proceeds of the 3-Year Loans will be used by
Borrower for refinancing the revolving credit indebtedness owed by Borrower
under the Existing Credit Agreement on the Closing Date, to fund working capital
requirements, for general corporate purposes, and to support the issue of
Letters of Credit, and Borrower agrees not to request or use such proceeds for
any other purpose. Borrower will not, directly or indirectly, use any part of
such proceeds for the purpose of purchasing or carrying any margin stock within
the meaning of Regulation U of the Board of Governors or to extend credit to any
Person for the purpose of purchasing or carrying any such margin stock.
3.7 Syndication Party Funding Failure. The failure of any Syndication Party
to fund its Funding Share of any requested 3-Year Advance or 3-Year Bid Advance
to be made by it on the date specified for such Advance shall not relieve any
other Syndication Party of its obligation (if any) to fund its Funding Share of
any Advance on such date, but, except as provided in Sections 4.7 and 4.11
hereof, no Syndication Party shall be responsible for the failure of any other
Syndication Party to make any Advance to be made by such other Syndication
Party.
3.8 Reduction of 3-Year Commitment. Borrower may, by written facsimile
notice to the Administrative Agent on or before 10:00 A.M. (Central time) on any
Banking Day, irrevocably reduce the 3-Year Commitment; provided that (a) such
reduction must be in multiples of one-million dollars ($1,000,000.00), and (b)
Borrower must simultaneously make any principal payment necessary (along with
any applicable Funding Losses on account of such principal payment) so that (i)
the aggregate amount of the Individual Outstanding 3-Year Obligations of all
Syndication Parties does not exceed the reduced 3-Year Commitment on the date of
such reduction, and (ii) the Individual Outstanding 3-Year Obligations owing to
any Syndication Party do not exceed the Individual 3-Year Commitment of that
Syndication Party (after reduction thereof in accordance with the following
sentence). In the event the 3-Year Commitment is reduced as provided in the
preceding sentence, then the Individual 3-Year Commitment of each Syndication
Party shall be reduced in the same proportion as the Individual 3-Year
Commitment of such Syndication Party bears to the 3-Year Commitment before such
reduction.
ARTICLE 4. BID RATE FACILITY; OVERNIGHT FACILITY
4.1 364-Day Facility Bid Rate Loans. Subject to the terms and conditions of
this Agreement, including the procedures set forth in Article 4 hereof, and so
long as no Event of Default or Potential Default has occurred (or if a Potential
Default or an Event of Default has occurred, it has been waived in writing by
the Administrative Agent in accordance with the provisions of Section 16.10
hereof), each Syndication Party may in its sole discretion make Advances (each
Advance made by a Syndication Party pursuant to this Section a "364-DAY BID
ADVANCE" and the total of such Advances made by the Syndication Parties the
"364-DAY BID LOANS") to Borrower from time to time during the 364-Day Facility
Availability Period, provided that:
4.1.1 Individual 364-Day Commitment. No Syndication Party shall be
permitted to make a 364-Day Bid Rate Advance under the 364-Day Facility which,
when added to its aggregate
20
Individual Outstanding 364-Day Obligations, would exceed such Syndication
Party's Individual 364-Day Commitment.
4.1.2 364-Day Commitment. Borrower may not make a 364-Day Bid Request
in an amount which, when added to the aggregate Individual Outstanding 364-Day
Obligations of all Syndication Parties, would exceed the 364-Day Commitment.
4.1.3 Amounts. Each 364-Day Bid Request shall be in an amount at least
equal to five million dollars ($5,000,000) and in integral multiples of one
million dollars ($1,000,000), and each 364-Day Bid shall be in an amount at
least equal to one million dollars ($1,000,000) or the amount remaining under
the Individual 364-Day Commitment of the Syndication Party submitting such
364-Day Bid, if less. Each 364-Day Bid Advance made by a Syndication Party will
be in the amount of its Bids, or portions thereof, under the 364-Day Facility
that are accepted by Borrower in accordance with Section 4.5 hereof.
4.2 3-Year Facility Bid Rate Loans. Subject to the terms and conditions of
this Agreement, including the procedures set forth in Article 4 hereof, each
Syndication Party may in its sole discretion make Advances (each Advance made by
a Syndication Party pursuant to this Section a "3-YEAR BID ADVANCE" and the
total of such Advances made by the Syndication Parties the "3-YEAR BID LOANS")
to Borrower from time to time during the 3-Year Facility Availability Period,
provided that:
4.2.1 Individual 3-Year Commitment. No Syndication Party shall be
permitted to make a 3-Year Bid Rate Advance under the 3-Year Facility which,
when added to its aggregate Individual Outstanding 3-Year Obligations, would
exceed such Syndication Party's Individual 3-Year Commitment.
4.2.2 3-Year Commitment. Borrower may not make a 3-Year Bid Request in
an amount which, when added to the aggregate Individual Outstanding 3-Year
Obligations of all Syndication Parties, would exceed the 3-Year Commitment.
4.2.3 Amounts. Each 3-Year Bid Request shall be in an amount at least
equal to five million dollars ($5,000,000) and in integral multiples of one
million dollars ($1,000,000), and each 3-Year Bid shall be in an amount at least
equal to one million dollars ($1,000,000) or the amount remaining under the
Individual 3-Year Commitment of the Syndication Party submitting such 3-Year
Bid, if less. Each 3-Year Bid Advance made by a Syndication Party will be in the
amount of its Bids, or portions thereof, under the 3-Year Facility that are
accepted by Borrower in accordance with Section 4.5 hereof.
4.3 Bid Request. No more frequently than once each Banking Day, Borrower
may request offers from all Syndication Parties which have an Individual
Commitment in the Facility under which the offers are being requested, acting
severally and not jointly, to make Bid Advances under such Facility by giving
the Bid Agent notice by facsimile (effective upon receipt), substantially in the
form of Exhibit 4.3 hereto ("BID REQUEST") on or before 9:00 A.M. (Central time)
on the Banking Day the proposed Bid Loan is to be made. By 9:30 A.M. (Central
time) of the same Banking Day, the Bid Agent shall, by facsimile transmission,
send to all of the Syndication Parties eligible to receive a Bid Request a copy
of such Bid Request. Each Bid Request must specify (a) the Facility under which
the Bid Advances are being requested, (b) the
21
total amount of such requested Bid Advances, (c) the individual amount of each
requested Bid Advance with a different proposed Bid Maturity Date, (d) the
proposed Banking Day of making such Bid Advance (which shall be the same Banking
Day on which the Bid Request is submitted), and (e) the proposed maturity dates
for such Bid Advances (each a "BID MATURITY DATE") which must be Banking Days
and which must not extend (i) more than thirty (30) days beyond the 364-Day
Maturity Date or (ii) more than thirty (30) days beyond the 3-Year Maturity
Date, as applicable. Borrower may request offers to make more than one Bid Loan
(up to a maximum of five (5) Bid Loans in a single Bid Request for each of the
two Facilities), each with a different Bid Maturity Date, in a single Bid
Request.
4.4 Bid Procedure. Each Syndication Party with an Individual Commitment in
the Facility under which the Bid Request is made may, in its sole discretion,
submit to the Bid Agent a written quote, substantially in the form of Exhibit
4.4 hereto ("BID"), containing an offer or offers to make one or more Bid
Advances in a specified amount or amounts in response to such Bid Request (and
may elect to bid with respect to any or all Bid Advances with different Bid
Maturity Dates specified in the Bid Request); provided, however, each
Syndication Party is limited to one Bid submission per Bid Request (which may
cover more than one Bid Maturity Date) and a Syndication Party may not submit a
Bid in an amount in excess of such Syndication Party's Individual 364-Day
Lending Capacity or Individual 3-Year Lending Capacity, as applicable. A Bid may
set forth offers for up to five (5) separate Bid Rates for each of the
applicable Bid Advances, provided that each Bid shall specify the aggregate
principal amount of Bid Advances for all Bid Maturity Dates that the Syndication
Party submitting such Bid is willing to make at the interest rate or rates
specified in such Bid (each a "BID RATE") pursuant to such Bid. Each Bid by a
Syndication Party (other than by the Bid Agent acting in its capacity as a
Syndication Party) must be submitted to the Bid Agent by facsimile not later
than 10:15 A.M. (Central time) on the same Banking Day. The Bid Agent, in its
capacity as a Syndication Party, may submit Bids; provided such Bids must be
finalized not later than 10:00 A.M. (Central time) on the same Banking Day. Each
Bid shall be irrevocable. The Bid Agent shall disregard a Bid if it (a) is not
substantially in conformity with Exhibit 4.4 hereto, (b) contains qualifying or
conditional language, (c) proposes terms other than or in addition to those set
forth in the applicable Bid Request, or (d) arrives after the applicable time
set forth in this Section. By 10:30 A.M. (Central time) on the same Banking Day,
the Bid Agent shall send copies of all Bids to Borrower by facsimile ("BID
RESULTS NOTICE").
4.5 Bid Acceptance Procedure. Not later than 11:00 A.M. (Central time) on
the same Banking Day, Borrower shall provide to the Bid Agent by facsimile
notice, in the form of Exhibit 4.5 hereto, of its acceptance or rejection of
each of the Bids submitted to Borrower by the Bid Results Notice ("BID SELECTION
NOTICE"). In the case of each acceptance the Bid Selection Notice shall specify
the aggregate principal amount of Bid Advances for each of the Bids that are
accepted. Regardless of the amounts or interest rates bid by any Syndication
Party, Borrower may accept or decline any Bid in whole or in part, provided that
(a) the aggregate principal amount of Bid Advances accepted may not exceed the
applicable amount set forth in the related Bid Request, and (b) Borrower may not
accept any offer that fails to comply with this Article 4. Bids not accepted by
11:00 A.M. will be irrevocably deemed to have been rejected by Borrower. No
later than 12:00 noon (Central time) on the same Banking Day, the Bid Agent
shall send, by facsimile, a copy of such Bid Selection Notice to the
Administrative Agent and each Syndication Party which submitted a Bid.
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4.6 Bid Loan Funding. Not later than 2:00 P.M. (Central time) on the same
Banking Day, each Syndication Party that is to make one or more Bid Advances in
accordance with the Bid Selection Notice shall make available to the
Administrative Agent at the Administrative Agent's Office, in immediately
available funds, an amount sufficient to fund such Bid Advances. After the
Administrative Agent's receipt of such funds, but not later than 3:00 P.M.
(Central time), and upon fulfillment of the applicable conditions set forth in
Article 11 hereof, the Administrative Agent will make the proceeds of such Bid
Advances available to Borrower, in immediately available funds, and will
transmit such funds by wire transfer to Borrower's Account.
4.7 Syndication Party Funding Failure. In the event any Syndication Party
fails to make any requested 364-Day Bid Advance or 3-Year Bid Advance to be made
by it on the date specified for such Advance, the Administrative Agent (in that
capacity) will advance such funds to Borrower on behalf of such Syndication
Party in its role and capacity as the Administrative Agent, and therefore
notwithstanding limitations, if any, contained herein relating to the
Administrative Agent in its role as a Syndication Party, including its
Individual 364-Day Commitment, Individual 3-Year Commitment, Individual 364-Day
Lending Capacity, or Individual 3-Year Lending Capacity, as applicable. In the
event of the funding of any such Advance by the Administrative Agent, the
Syndication Party failing to fund such Advance will be treated as a Delinquent
Syndication Party under Section 16.4 hereof, and the Administrative Agent will
be treated as a Contributing Syndication Party under such Section.
4.8 364-Day Facility Bid Rate Loans - Bid Maturity Date Beyond 364-Day
Maturity Date. Notwithstanding any other provision in this Credit Agreement that
may be construed to the contrary, in the event that a Syndication Party, at its
sole discretion, makes a 364-Day Bid Advance to Borrower with a Bid Maturity
Date later than the 364-Day Maturity Date; and (a) (i) the 364-Day Maturity Date
is subsequently extended by amendment to this Credit Agreement; and (ii) such
Syndication Party does not renew its Individual 364-Day Commitment at a level at
least equal to the outstanding amount of such 364-Day Advance, then, in each
such case, such outstanding amount will be repaid by Borrower, and accepted by
such Syndication Party, on the 364-Day Maturity Date (as in effect prior to such
extension thereof) without any liability for Funding Losses on such amount; or
(b) the 364-Day Maturity Date is not subsequently extended by amendment to this
Credit Agreement, then, in each such case, such outstanding amount will be
repaid by Borrower in accordance with the terms of this Credit Agreement and
this Credit Agreement will be deemed to continue in force for the limited
purpose of facilitating such payments.
4.9 Failure to Implement Bid Process. In the event the Bid Agent fails to
hold an auction pursuant to a proper Bid Request, the Administrative Agent (in
that capacity) will make an Advance to Borrower on behalf of all Syndication
Parties (with such Advance allocated between the 364-Day Facility and the 3-Year
Facility in accordance with the allocations contained in the applicable Bid
Request), in the amount of each Bid Advance requested in such Bid Request to
bear interest at the then current Base Rate to be repaid out of proceeds of Bid
Advances on the next Banking Day, and will cause the Bid Agent to hold the
auction for such Bid Advances the following Banking Day.
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4.10 Overnight Advances. In addition to Borrower's right to request 364-Day
Bid Advances under Section 4.1 hereof, Borrower may, subject to the terms and
conditions of this Section, at any time before 2:30 P.M. (Central time) on a
Banking Day, request the Overnight Lender to make an Advance to Borrower under
the 364-Day Facility on the same Banking Day ("OVERNIGHT ADVANCE") in accordance
with the provisions of this Section. Each Banking Day by 10:30 A.M. (Central
time) the Overnight Lender shall notify Borrower of the interest rate
("OVERNIGHT RATE") that it will charge on all Overnight Advances made that
Banking Day. Borrower's request for an Overnight Advance ("OVERNIGHT ADVANCE
REQUEST") may be made orally or in writing by facsimile (if orally, shall be
confirmed in writing on the same Banking Day), must be directed to the Overnight
Lender, and must specify (a) the amount of such Advance, and (b) the date when
such Overnight Advance will be due and payable ("OVERNIGHT MATURITY DATE"),
which may not be later than the fifth Banking Day thereafter. If Borrower
submits an Overnight Advance Request, the Overnight Lender shall promptly, but
not later than 3:30 P.M. on the same Banking Day, fund such Overnight Advance
and advise the Administrative Agent in writing of the amount and Overnight
Maturity Date of such Overnight Advance. Each Overnight Advance shall bear
interest at the applicable Overnight Rate and shall be payable in full,
including interest, on the Overnight Maturity Date applicable to such Overnight
Advance. Such payment may, at Borrower's discretion, and subject to the
conditions of this Credit Agreement, be made by an Advance under the 364-Day
Facility or under the 3-Year Facility. Overnight Advances shall be made only by
the Overnight Lender. Borrower's entitlement to receive, and the Overnight
Lender's obligation to fund, any Overnight Advance shall be subject to the
conditions and limitations set forth in Section 2.1 hereof and applicable to
364-Day Advances generally, and, in addition, the aggregate outstanding
principal amount of all such Overnight Advances shall not at any time exceed the
Overnight Funding Commitment.
4.11 Overnight Lender Funding Failure. In the event the Overnight Lender
fails to make any requested Overnight Advance to be made by it on the date
specified for such Advance, the Administrative Agent (in that capacity) may, in
its sole and absolute discretion and in its role and capacity of the
Administrative Agent, advance such funds to Borrower on behalf of such Overnight
Lender, notwithstanding limitations, if any, contained herein relating to the
Administrative Agent in its role as a Syndication Party, including its
Individual 364-Day Commitment or Individual 364-Day Lending Capacity. In the
event of any such advance by the Administrative Agent, the Overnight Lender will
be treated as a Delinquent Syndication Party under Section 16.4 hereof, and the
Administrative Agent will be treated as a Contributing Syndication Party under
such Section.
ARTICLE 5. LETTER OF CREDIT FACILITY
5.1 Letter of Credit Request. On the terms and conditions set forth in this
Credit Agreement, and so long as no Event of Default or Potential Default has
occurred (or if a Potential Default or an Event of Default has occurred, it has
been waived in writing by the Administrative Agent in accordance with the
provisions of Section 16.10 hereof), Borrower may request the issuance of one or
more documentary letters of credit or standby letters of credit as Committed
Letters of Credit or as Negotiated Letters of Credit pursuant to the conditions
and limitations set forth below.
5.1.1 Request for Committed Letter of Credit. Borrower may request
issuance of a Committed Letter of Credit by providing, not later than 12:00 noon
(Central time) on a Banking
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Day, a written request therefore ("COMMITTED LC REQUEST") to the Administrative
Agent and the Letter of Credit Bank. The Committed LC Request shall set forth
(a) the face amount and expiry date, (b) the beneficiary, (c) the terms thereof,
and (d) such other information as the Letter of Credit Bank shall request.
Committed Letters of Credit shall be issued under the 3-Year Facility. In no
event may the expiry date be later than 364 days past the 3-Year Maturity Date.
5.1.2 Request for Negotiated Letter of Credit. Borrower may request
issuance of a Negotiated Letter of Credit by (a) providing, no later than 11:00
A.M. (Central time) on a Banking Day, written notice to the Administrative Agent
of (i) the face amount and expiry date of each Negotiated Letter of Credit which
Borrower desires be issued and (ii) the identity of the Syndication Party or
Parties from which Borrower intends to seek each such Negotiated Letter of
Credit; (b) receiving written or oral confirmation from the Administrative
Agent, to be provided no later than 11:30 A.M. (Central time), that each such
Syndication Party has sufficient Individual 3-Year Lending Capacity to issue
such Negotiated Letter(s) of Credit; and (c) following receipt of the
confirmation described in clause (b) above, but no later than 12:00 noon
(Central time), sending a written request ("NEGOTIATED LC REQUEST") to each such
Syndication Party requesting issuance of such Negotiated Letter(s) of Credit.
Such written request shall set forth (a) the face amount and expiry date, (b)
the beneficiary, (c) the terms thereof, and (d) such other information as any
such Syndication Party shall request. Negotiated Letters of Credit shall be
issued under the 3-Year Facility. In no event may the expiry date be later than
364 days past the 3-Year Maturity Date.
5.1.3 Purpose. Borrower may not request issuance of a Letter of Credit
for other than a purpose for which a 3-Year Advance could be requested under
Section 3.6 hereof.
5.1.4 Cash Collateral: In the event Borrower requests issuance or
reissuance of a Letter of Credit with an expiry date later than the 3-Year
Maturity Date, Borrower shall, as a condition precedent to the issuance or
reissuance of such Letter of Credit, comply with the requirements of Section 5.6
hereof.
5.1.5 Notification of the Administrative Agent Regarding Negotiated
Letters of Credit. No later than 3:00 P.M. (Central time) on the Banking Day of
issuance, reissuance, renewal, permanent reduction, or termination of a
Negotiated Letter of Credit, both Borrower and the Issuing Syndication Party
shall notify the Administrative Agent by facsimile of such fact, and the face
amount (including the reduced face amount, as applicable), expiry date, name of
beneficiary, and name of Issuing Syndication Party with respect to such
Negotiated Letter of Credit.
5.2 Committed Letters of Credit. No later than 1:00 P.M. (Central time) on
the Banking Day of the receipt by the Letter of Credit Bank of a Committed LC
Request, it shall, if it approves the form and substance thereof, issue the
requested Committed Letter of Credit for any expiry period from seven (7) days
to the earlier of (a) 364 days from the date of issuance or (b) 364 days past
the 3-Year Maturity Date, subject to the following:
5.2.1 Available Amount. The face amount of the requested Committed
Letter of Credit may not exceed the lesser of (a) the amount determined by
subtracting the aggregate Individual Outstanding 3-Year Obligations of all
Syndication Parties from the 3-Year Commitment, or (b) the amount determined by
subtracting the undrawn face amount of all Letters
25
of Credit and Existing Letters of Credit then outstanding (including any Letter
of Credit requested but not yet issued unless the Letter of Credit Bank has
declined to issue the Letter of Credit) from the LC Commitment.
5.2.2 Availability. Committed Letters of Credit may be requested for
issuance only during the 3-Year Availability Period.
5.2.3 Issuance Fee. Borrower shall pay at the time of the issuance or
reissuance of each Committed Letter of Credit the Issuance Fee therefore to be
distributed to the Letter of Credit Bank.
5.2.4 Treatment of Draws. Each draw under a Committed Letter of Credit
shall be funded by each of the Syndication Parties as an Advance under the
3-Year Facility in accordance with their respective Individual 3-Year Pro Rata
Share as of the date of such draw.
5.3 Negotiated Letters of Credit. Any Syndication Party may, in its sole
discretion, issue a Negotiated Letter of Credit ("ISSUING SYNDICATION PARTY")
for any expiry period from seven (7) days to a date which is 364 days past the
3-Year Maturity Date, upon such terms and conditions as Borrower and such
Issuing Syndication Party may agree; provided that (a) all Negotiated Letters of
Credit must be issued on a Banking Day, and may be issued no earlier than 11:30
A.M. and no later than 2:30 P.M. (Central time), and (b) the issuance of
Negotiated Letters of Credit shall also be subject to the following:
5.3.1 Available Amount. The face amount of the requested Negotiated
Letter of Credit may not exceed the lesser of (a) the amount determined by
subtracting the aggregate Individual Outstanding 3-Year Obligations of all
Syndication Parties from the 3-Year Commitment, (b) an amount which would exceed
the Issuing Syndication Party's Individual 3-Year Lending Capacity, or (c) the
amount determined by subtracting the undrawn face amount of all Letters of
Credit and Existing Letters of Credit then outstanding (including any Committed
Letter of Credit requested but not yet issued unless the Letter of Credit Bank
has declined to issue the Letter of Credit) from the LC Commitment. Prior to the
issuance of a Negotiated Letter of Credit, the Issuing Syndication Party shall
confirm with the Administrative Agent that the issuance of such Negotiated
Letter of Credit will not result in the limitations set forth in this Subsection
being exceeded.
5.3.2 Availability. Negotiated Letters of Credit may be requested for
issuance only during the 3-Year Availability Period.
5.3.3 Fees. Borrower will be required to pay only such fees as the
Issuing Syndication Party and Borrower agree upon in connection with each such
Negotiated Letter of Credit and all such fees shall be collected by, paid to,
and retained by the Issuing Syndication Party.
5.3.4 Treatment of Draws. Each draw under a Negotiated Letter of
Credit shall be treated as an Advance by the Issuing Syndication Party under the
3-Year Facility and shall bear interest at the Base Rate until paid in full.
2
5.4 Notice Regarding Negotiated Letters of Credit. No later than 3:00 P.M.
(Central time) on the Banking Day of issuance, reissuance, renewal, permanent
reduction, or termination of a Negotiated Letter of Credit, both Borrower and
the Issuing Syndication Party shall notify the Administrative Agent by facsimile
of such fact, and the face amount (including the reduced face amount, as
applicable), expiry date, name of beneficiary, and name of Issuing Syndication
Party with respect to such Negotiated Letter of Credit.
5.5 Existing Letters of Credit. Borrower and each Syndication Party agree
that each Existing Letter of Credit shall, as of the Closing Date, be deemed to
have been issued as a Negotiated Letter of Credit under the 3-Year Facility, and
that the actual issuer thereof, upon its execution of this Credit Agreement,
shall for all purposes be deemed to be the Issuing Syndication Party hereunder
with respect to each such Existing Letter of Credit.
5.6 Cash Collateral Account. Upon (a) the occurrence of either the 3-Year
Maturity Date or an Event of Default, or (b) the agreement of the Letter of
Credit Bank to issue or reissue a Committed Letter of Credit with an expiry date
beyond the 3-Year Maturity Date or the agreement of a Syndication Party to issue
or reissue a Negotiated Letter of Credit with, in either case, an expiry date
beyond the 3-Year Maturity Date (each such Letter of Credit an "EXTENDED
DURATION LC"), Borrower shall immediately (l) establish an account, if one has
not previously been established, with the Administrative Agent, or with such
other financial institution as shall be approved by the Required Lenders ("CASH
COLLATERAL ACCOUNT"); (m) deposit by wire transfer funds into such Cash
Collateral Account in an amount equal to (i) in the case of clause (a), the
undrawn face amount of all Letters of Credit then outstanding, or (ii) in the
case of clause (b), the face amount of such Extended Duration LC (except to the
extent previously deposited in the case of a reissuance); and (n) take such
action, including the execution and delivery (and, where requested, obtaining
the execution thereof by third parties) of security documents, Control
Agreements, financing statements, and/or such other documents as the
Administrative Agent may require, in order to grant to the Administrative Agent,
on behalf of the Syndication Parties, a first lien security interest on such
Cash Collateral Account and the funds on deposit therein. In the event that
Borrower fails or refuses to establish and fund the Cash Collateral Account as
required above, the Syndication Parties may, at their discretion, establish such
an account in the name of the Administrative Agent and fund such account by a
3-Year Advance in the same way that a draw under any such Letter of Credit would
be funded. Notwithstanding any other provision contained in this Credit
Agreement or any of the other Loan Documents, (x) draws made against any
Committed Letter of Credit that is an Extended Duration LC on or after the date
of funding of the Cash Collateral Account with respect to such Extended Duration
LC shall, at the sole discretion of the Letter of Credit Bank, be funded out of
the funds on deposit in the Cash Collateral Account rather than out of 3-Year
Advances; and (y) draws made against any Negotiated Letter of Credit that is an
Extended Duration LC on or after the date of funding of the Cash Collateral
Account with respect to such Extended Duration LC shall, at the sole discretion
of the Issuing Syndication Party, be funded out of the funds on deposit in the
Cash Collateral Account rather than as a 3-Year Advance by such Issuing
Syndication Party, to the extent that the funds on deposit in the Cash
Collateral Account are in excess of the undrawn face amount of all Committed
Letters of Credit that are Extended Duration LC's on such date. Any draw under
an Extended Duration LC funded as an Advance shall be repaid by Borrower no
later than the next Banking Day. Upon receiving proof satisfactory to the
Administrative Agent of the termination, reduction in amount, or expiration of
any Extended Duration LC, and unless the 3-Year Maturity Date has occurred or an
27
Event of Default has occurred and is continuing, and so long as there remains on
deposit in the Cash Collateral Account funds equal to the undrawn face amount of
all Extended Duration LC's which remain outstanding, the Administrative Agent
shall within a reasonable time after receiving a written request therefore from
Borrower, refund to Borrower an amount equal to the undrawn face amount of such
terminated or expired Extended Duration LC or the amount by which the undrawn
face amount of such Extended Duration LC has been reduced, as applicable. In the
event of the extension of the 3-Year Maturity Date to a date beyond the expiry
date of an Extended Duration LC, each Extended Duration LC whose expiry date is
no longer later than the 3-Year Maturity Date as so extended ( each hereinafter
referred to as a "CONVERTED LC"), shall no longer be deemed to be an Extended
Duration LC, and unless an Event of Default has occurred and is continuing, and
so long as there remains on deposit in the Cash Collateral Account funds equal
to the undrawn face amount of all Extended Duration LC's, excluding each such
Converted LC, the Administrative Agent shall within a reasonable time after
receipt of a written request therefore from Borrower (which Borrower may send at
any time after the effective date of such extension of the 3-Year Maturity
Date), refund to Borrower an amount equal to the undrawn face amount of each
such Converted LC.
5.7 Reimbursement Obligation Unconditional. All draws under the Letters of
Credit are absolutely, unconditionally, and irrevocably reimbursable by Borrower
and shall be funded as 3-Year Advances (or as provided otherwise in Section 5.6
hereof), notwithstanding:
(a) any lack of validity or enforceability of the Letter of
Credit, any of the documents referenced in the Letter of Credit, or any other
agreement or instrument related to any such documents;
(b) the existence of any claim, setoff, defense or other right
which Borrower may have at any time against the beneficiary or any transferee of
the Letter of Credit (or any person for whom the beneficiary or transferee may
be acting);
(c) any statement, draft, certificate, or any other document
presented under the Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect, or any statement therein being untrue or
inaccurate in any respect whatsoever or the draw certificate was otherwise
unauthorized, it being expressly understood and agreed by Borrower that neither
the Letter of Credit Bank nor any Syndication Party (including any Syndication
Party issuing a Negotiated Letter of Credit) shall have any liability on account
of any lack of authorization or forgery and any recovery from third parties on
account of such lack of authorization or such forgery shall be the sole
responsibility of Borrower; or
(d) the payment of a draw against presentation of a draft or
certificate which does not comply with the terms of the Letter of Credit, unless
such payment is made as a result of the gross negligence or willful misconduct
of the issuer of the Letter of Credit.
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ARTICLE 6. INTEREST AND FEES
6.1 Interest. Except as provided in Article 4 hereof, interest on all Loans
shall be calculated as follows:
6.1.1 Base Rate Option. Unless Borrower requests and receives a LIBO
Rate Loan pursuant to Subsection 6.1.2 hereof, the outstanding principal balance
under the 364-Day Facility Notes and the 3-Year Facility Notes shall bear
interest at the Base Rate (each a "BASE RATE LOAN"). Base Rate Loans must be in
minimum amounts of $10,000,000.00 and in incremental multiples of $1,000,000.00.
6.1.2 LIBO Rate Option. From time to time, and so long as no Event of
Default has occurred and is continuing, at the request of Borrower included in a
Borrowing Notice, all or any part of the outstanding principal balance under the
364-Day Facility Notes or the 3-Year Facility Notes may bear interest at the
LIBO Rate (each a "LIBO RATE LOAN"); provided that Borrower may have no more
than ten (10) LIBO Rate Loans outstanding at any time. To effect this option,
the Borrowing Notice must specify (a) the principal amount that is to bear
interest at the LIBO Rate, which must be a minimum of $10,000,000.00 and in
incremental multiples of $1,000,000.00 and (b) the period selected by Borrower
during which the LIBO Rate is to be applied ("LIBO RATE PERIOD"), which may be
any period of one, two, three, or six months, but must expire no later than the
364-Day Maturity Date or the 3-Year Maturity Date, as applicable. In addition,
Borrower may convert any Base Rate Loan to a LIBO Rate Loan, or continue a LIBO
Rate Loan, by making a written request therefore ("LIBO REQUEST") to the
Administrative Agent by facsimile at least three (3) Banking Days prior to the
first date of the LIBO Rate Period therefore, specifying (y) the principal
amount that is to bear interest at the LIBO Rate, which must be a minimum of
$10,000,000.00 and in incremental multiples of $1,000,000.00 and (z) the LIBO
Rate Period selected by Borrower during which the LIBO Rate is to be applied.
The Administrative Agent shall incur no liability in acting upon a request which
it believed in good faith had been made by a properly authorized employee of
Borrower. Following the expiration of the LIBO Rate Period for any LIBO Rate
Loan, interest shall automatically accrue at the Base Rate unless Borrower
requests and receives another LIBO Rate Loan as provided in this Subsection.
6.2 Additional Provisions for LIBO Rate Loans.
6.2.1 Limitation on LIBO Rate Loans. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of the LIBO Rate for any
LIBO Rate Period:
(a) The Administrative Agent determines (which determination
shall be conclusive) that quotations of interest rates in accordance with the
definition of LIBO Rate are not being provided in the relevant amounts or for
the relevant maturities for purposes of determining rates of interest for LIBO
Rate Loans as provided in this Credit Agreement; or
(b) any Syndication Party determines (which determination shall
be conclusive) that the relevant rates of interest referred to in the definition
of LIBO Rate upon the basis of which the rate of interest for LIBO Rate Loans
for such LIBO Rate Period is to be determined do not adequately cover the cost
to the Syndication Parties of making or maintaining such LIBO Rate Loans for
such LIBO Rate Period;
29
then the Administrative Agent shall give Borrower prompt notice thereof, and so
long as such condition remains in effect, in the case of clause (a) above, the
Syndication Parties, and in the case of clause (b) above, the Syndication Party
that makes the determination, shall be under no obligation to make LIBO Rate
Loans, convert Base Rate Loans into LIBO Rate Loans, or continue LIBO Rate
Loans, and Borrower shall, on the last days of the then current applicable LIBO
Rate Periods for the outstanding LIBO Rate Loans, either prepay such LIBO Rate
Loans or such LIBO Rate Loans shall automatically be converted into a Base Rate
Loan in accordance with Section 6.1 hereof.
6.2.2 LIBO Rate Loan Unlawful. If any law, treaty, rule, regulation or
determination of a court or governmental authority or any change therein or in
the interpretation or application thereof subsequent to the Closing Date (each,
a "CHANGE IN LAW") shall make it unlawful for any of the Syndication Parties to
(a) advance its Funding Share of any LIBO Rate Loan or (b) maintain its share of
all or any portion of the LIBO Rate Loans, each such Syndication Party shall
promptly, by telephone (in which case it must be promptly followed by a writing)
or facsimile, notify the Administrative Agent thereof, and of the reasons
therefor and the Administrative Agent shall promptly notify Borrower thereof and
shall provide a copy of such written notice to Borrower. In the former event,
any obligation of any such Syndication Party to make available its Funding Share
of any future LIBO Rate Loan shall immediately be canceled (and, in lieu thereof
shall be made as a Base Rate Loan), and in the latter event, any such unlawful
LIBO Rate Loans or portions thereof then outstanding shall be converted, at the
option of such Syndication Party, to a Base Rate Loan; provided, however, that
if any such Change in Law shall permit the LIBO Rate to remain in effect until
the expiration of the LIBO Rate Period applicable to any such unlawful LIBO Rate
Loan, then such LIBO Rate Loan shall continue in effect until the expiration of
such LIBO Rate Period. Upon the occurrence of any of the foregoing events on
account of any Change in Law, Borrower shall pay to the Administrative Agent
immediately upon demand such amounts as may be necessary to compensate any such
Syndication Party for any fees, charges, or other costs incurred or payable by
such Syndication Party as a result thereof and which are attributable to any
LIBO Rate Loan made available to Borrower hereunder, and any reasonable
allocation made by any such Syndication Party among its operations shall be
conclusive and binding upon Borrower absent manifest error.
6.2.3 Treatment of Affected Loans. If the obligations of any
Syndication Party to make or continue LIBO Rate Loans, or to convert Base Rate
Loans into LIBO Rate Loans, are suspended pursuant to Subsection 6.2.1 or 6.2.2
hereof (all LIBO Rate Loans so affected being herein called "AFFECTED LOANS"),
such Syndication Party's Affected Loans shall, on the last day(s) of the then
current LIBO Rate Period(s) for the Affected Loans (or, in the case of a
conversion required by Subsection 6.2.1 or 6.2.2, on such earlier date as such
Syndication Party may specify to Borrower), be automatically converted into Base
Rate Loans for the account of such Syndication Party. To the extent that such
Syndication Party's Affected Loans have been so converted, all payments and
prepayments of principal which would otherwise be applied to such Syndication
Party's Affected Loans shall be applied instead to its Base Rate Loans. All
Advances which would otherwise be made or continued by such Syndication Party as
LIBO Rate Loans shall be made or continued instead as Base Rate Loans, and all
Base Rate Loans of such Syndication Party which would otherwise be converted
into LIBO Rate Loans shall remain as Base Rate Loans.
30
6.3 Default Interest Rate. All past due payments on the Notes or of any
other Bank Debt (whether as a result of nonpayment by Borrower when due, at
maturity, or upon acceleration) shall bear interest at the Default Interest Rate
from and after the due date for the payment, or on the date of maturity or
acceleration, as the case may be.
6.4 Interest Calculation. Interest on Base Rate Loans shall be calculated
on the actual number of days the principal owing thereunder is outstanding with
the daily rate calculated on the basis of a year consisting of 365 or 366 days
(as applicable based on the date of calculating such interest). Interest on (a)
LIBO Rate Loans, (b) 364-Day Bid Loans, (c) 3-Year Bid Loans, and (d) Overnight
Loans shall be calculated on the actual number of days the principal owing
thereunder is outstanding with the daily rate calculated on the basis of a year
consisting of 360 days. In calculating interest, the Advance Date shall be
included and the date each payment is received shall be excluded.
6.5 Fees. Borrower shall pay or cause to be paid the following fees:
6.5.1 364-Day Facility Fee. A non-refundable fee ("364-DAY FACILITY
FEE") calculated in arrears as of the end of each of Borrower's Fiscal Quarters
following the Closing Date, until the Loan is paid in full, and the Syndication
Parties have no further obligation to make Advances hereunder. The 364-Day
Facility Fee for each such period shall be equal to (a) the average daily
364-Day Commitment in effect during such period, (b) multiplied by the average
daily 364-Day Facility Fee Factor in effect during such period, as converted to
a daily rate using a year of 360 days, (c) with the product there of being
further multiplied by the number of days in such period. The 364-Day Facility
Fee shall be payable to the Administrative Agent in arrears on the Banking Day
coinciding with, or immediately preceding the fifth day after the close of each
such Fiscal Quarter, for distribution to each Syndication Party in the ratio
that its Individual 364-Day Commitment bears to the 364-Day Commitment as
calculated by the Administrative Agent on the last day of each such period.
6.5.2 3-Year Facility Fee. A non-refundable fee ("3-YEAR FACILITY
FEE") calculated in arrears as of the end of each of Borrower's Fiscal Quarters
following the Closing Date, until the Loan is paid in full, all Letters of
Credit are canceled or have expired, and the Syndication Parties have no further
obligation to make Advances or issue Letters of Credit hereunder. The 3-Year
Facility Fee for each such period shall be equal to (a) the average daily 3-Year
Commitment in effect during such period, (b) multiplied by the average daily
3-Year Facility Fee Factor in effect during such period, as converted to a daily
rate using a year of 360 days, (c) with the product there of being further
multiplied by the number of days in such period. The 3-Year Facility Fee shall
be payable to the Administrative Agent in arrears on the Banking Day coinciding
with, or immediately preceding the fifth day after the close of each such Fiscal
Quarter, for distribution to each Syndication Party in the ratio that its
Individual 3-Year Commitment bears to the 3-Year Commitment as calculated by the
Administrative Agent on the last day of each such period.
6.5.3 Committed Letter of Credit Fee. Borrower shall pay the
non-refundable Committed Letter of Credit Fee calculated in arrears as of the
last day of each of Borrower's Fiscal Quarters. The Committed Letter of Credit
Fee shall be payable to the Administrative Agent in arrears on the Banking Day
coinciding with, or immediately preceding the fifth day after the close of each
of Borrower's Fiscal Quarters, for distribution to each Syndication Party in the
ratio
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that its Individual 3-Year Commitment bears to the 3-Year Commitment as
calculated by the Administrative Agent on the last day of each such period.
6.6 364-Day Margin; 3-Year Margin; 364-Day Facility Fee Factor; 3-Year
Facility Fee Factor . If the Compliance Certificate with respect to any Fiscal
Quarter is not received by the Administrative Agent by the date required as
provided in Subsections 12.2.1 and 12.2.2 hereof, the 364-Day Margin; the 3-Year
Margin; the 364-Day Facility Fee Factor; and the 3-Year Facility Fee Factor for
the period commencing on the first day of the Fiscal Quarter commencing
immediately after the Fiscal Quarter for which such Compliance Report was
required, shall be 112.5 basis points, 110.0 basis points, 22.5 basis points,
and 25.0 basis points, respectively for that entire Fiscal Quarter.
6.7 Special Interest Rates. Notwithstanding the provisions of Section 6.1
hereof, balances of each of the Advances set forth on Exhibit 6.7 hereto as "O/S
Balance" shall be treated as 3-Year Advances and shall bear interest at the "Int
Yield" set forth in such Exhibit to and including the "Mat Date" set forth in
such Exhibit. From and after the "Mat Date" for each such Advance, interest for
the unpaid balance of such Advance shall be determined in accordance with
Section 6.1 hereof.
ARTICLE 7. PAYMENTS; FUNDING LOSSES
7.1 Principal Payments. Principal shall be payable under the 364-Day
Facility on the 364-Day Maturity Date, and under the 3-Year Facility on the
3-Year Maturity Date; provided that (a) principal owing on all Bid Advances
shall be payable on the Bid Maturity Date as provided in the Bid under which
such Bid Advance was made, (b) principal owing on all Overnight Advances shall
be payable on the applicable Overnight Maturity Date, and (c) prepayments may be
made only as provided in Section 7.5 hereof.
7.2 Interest Payments. Interest shall be payable as follows: (a) interest
on Base Rate Loans shall be payable monthly in arrears on the first Banking Day
of the next month, (b) interest on LIBO Rate Loans shall be payable on the last
day of the LIBO Rate Period therefor unless the LIBO Rate Period is longer than
three (3) months, in which case interest shall also be payable on each three
month anniversary of the first day of the applicable LIBO Rate Period, (c)
interest on each Bid Rate Loan shall be payable on the Bid Maturity Date
therefor unless the Bid Maturity Date is more than ninety (90) days from the
date of the Advance under such Bid Rate Loan, in which case interest shall also
be payable every ninety (90) days from the date of the relevant Advance, (d)
interest on Overnight Advances shall be payable on the Overnight Maturity Date,
and (e) interest on all Loans then accrued and unpaid shall be payable on the
364-Day Maturity Date or 3-Year Maturity Date, as applicable.
7.3 Application of Principal Payments. Principal payments and prepayments
shall be applied (a) to principal amounts owing under the 364-Day Facility or
the 3-Year Facility, or to Overnight Advances as Borrower directs in writing
(provided that Bid Rate Loans under each Facility may not be prepaid), or (b) if
Borrower provides no specific direction, then to principal amounts owing under
the 364-Day Facility, the 3-Year Facility (other than Bid Rate Loans under the
two Facilities), and the Overnight Advances in the ratio of the amount of the
outstanding principal balance owed under each, divided by the principal balance
owed under all three (excluding Bid Rate Loan balances in both cases). In the
case of (a) and (b) and subject to the
32
provisions of such clauses, payments shall be applied first to Base Rate Loans
and then to LIBO Rate Loans unless Borrower directs otherwise in writing.
However, upon the occurrence and during the continuance of an Event of Default
or Potential Default, all payments shall be applied, first to fees, second to
interest, third to principal pro-rata to all Loans, fourth to the Cash
Collateral Account, and last to any other Bank Debt.
7.4 Manner of Payment. All payments, including prepayments, that Borrower
is required or permitted to make under the terms of this Credit Agreement and
the other Loan Documents shall be made to the Administrative Agent in
immediately available federal funds, to be received no later than 1:00 P.M.
Central time of the Banking Day on which such payment is due (or the following
Banking Day if such date is not a Banking Day) by wire transfer through Federal
Reserve Bank, Kansas City, Routing Number: 307088754, COBANK ENGWD (or to such
other account as the Administrative Agent may designate by notice).
7.4.1 Payments to Be Free and Clear. All sums payable by Borrower
under this Credit Agreement and the other Loan Documents shall be paid without
setoff or counterclaim and free and clear of, and without any deduction or
withholding on account of, any tax imposed, levied, collected, withheld or
assessed by or within the United States of America or any political subdivision
in or of the United States of America or any other jurisdiction from or to which
a payment is made by or on behalf of Borrower or by any federation or
organization of which the United States of America or any such jurisdiction is a
member at the time of payment (excluding taxes imposed on or measured by the net
income or net profits of the recipient of such payment, and franchise taxes
imposed in lieu thereof).
7.4.2 Grossing-up of Payments. If Borrower or any other Person is
required by law to make any deduction or withholding on account of any such tax
from any sum paid or payable by Borrower to the Administrative Agent or any
Syndication Party under any of the Loan Documents:
(a) Borrower shall notify the Administrative Agent of any such
requirement or any change in any such requirement as soon as Borrower becomes
aware of it;
(b) Borrower shall pay any such tax when such tax is due, such
payment to be made (if the liability to pay is imposed on Borrower) for its own
account or (if that liability is imposed on the Administrative Agent or such
Syndication Party, as the case may be) on behalf of and in the name of the
Administrative Agent or such Syndication Party;
(c) the sum payable by Borrower in respect of which the relevant
deduction, withholding or payment is required shall be increased to the extent
necessary to ensure that, after the making of that deduction, withholding or
payment, the Administrative Agent or such Syndication Party, as the case may be,
receives on the due date a net sum equal to what it would have received had no
such deduction, withholding or payment been required or made; and
(d) within thirty (30) days after paying any sum from which it is
required by law to make any deduction or withholding, and within thirty (30)
days after the due date of payment of any tax which it is required by clause (b)
above to pay, Borrower shall deliver to the Administrative Agent evidence
satisfactory to the other affected parties of such deduction, withholding or
payment and of the remittance thereof to the relevant taxing or other authority;
33
provided that no such additional amount shall be required to be paid to any
Syndication Party under clause (c) above except to the extent that any change
after the date on which such Syndication Party became a Syndication Party in any
such requirement for a deduction, withholding or payment as is mentioned therein
shall result in an increase in the rate of such deduction, withholding or
payment from that in effect at the date on which such Syndication Party became a
Syndication Party, in respect of payments to such Syndication Party
7.5 Voluntary Prepayments. Borrower shall have the right to prepay all or
any part of the outstanding principal balance under the Loans at any time in
integral multiples of $1,000,000.00 (or the entire outstanding balance, if less)
and subject to a $5,000,000.00 minimum prepayment on LIBO Rate Loans (or the
entire outstanding balance, if less), on any Banking Day; provided that (a) in
the event of prepayment of any LIBO Rate Loan, whether voluntary or on account
of acceleration (i) Borrower must provide three (3) Banking Days notice to the
Administrative Agent prior to making such prepayment, and (ii) Borrower must, at
the time of making such prepayment, pay all accrued but unpaid interest and all
Funding Losses applicable to such prepayment, and (b) Borrower shall not have
the right to prepay any Bid Loan before the applicable Bid Loan Maturity Date,
but if a Bid Loan is deemed prepaid on account of acceleration, Borrower must
pay all Funding Losses applicable to such prepayment. Principal amounts prepaid
may be reborrowed under the terms and conditions of this Credit Agreement.
"FUNDING LOSSES" shall be determined on an individual Syndication Party basis as
the amount which would result in such Syndication Party being made whole (on a
present value basis) for the actual or imputed funding losses (including,
without limitation, any loss, cost or expense incurred by reason of obtaining,
liquidating or employing deposits or other funds acquired by such Syndication
Party to fund or maintain such LIBO Rate Loan) incurred by such Syndication
Party as a result of such payment (regardless of whether the Syndication Party
actually funded with such deposits); provided that such amount shall in no event
be less than $300.00 with respect to any Syndication Party. In the event of any
such payment, each Syndication Party which had funded the LIBO Rate Loan being
paid shall, promptly after being notified of such payment, send written notice
("FUNDING LOSS NOTICE") to the Administrative Agent by facsimile setting forth
the amount of attributable Funding Losses and the method of calculating the
same. The Administrative Agent shall notify Borrower orally or in writing of the
amount of such Funding Losses. A determination by a Syndication Party as to the
amounts payable pursuant to this Section shall be conclusive absent manifest
error.
7.6 Distribution of Principal and Interest Payments. The Administrative
Agent shall distribute payments of principal and interest among the Syndication
Parties as follows:
7.6.1 Principal and Interest Payments on 364-Day Advances. Principal
and interest payments on 364-Day Advances shall be remitted to the Syndication
Parties which made the 364-Day Advance to which such payments are applied in the
ratio in which they funded such Advance.
7.6.2 Principal and Interest Payments on 3-Year Pro Rata Rate
Advances. Principal and interest payments on 3-Year Advances shall be remitted
to the Syndication Parties which made the 3-Year Advance to which such payments
are applied in the ratio in which they funded such Advance.
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7.6.3 Principal and Interest Payments on Bid Rate Advances. Principal
and interest payments on Bid Rate Advances shall be remitted to the Syndication
Party which made the Bid Rate Advance to which such payments are applied.
7.6.4 Principal and Interest Payments on Overnight Advances. Principal
and interest payments on Overnight Advances shall be remitted to the Overnight
Lender.
ARTICLE 8. BANK EQUITY INTERESTS
Borrower agrees to purchase such equity interests in CoBank ("BANK EQUITY
INTERESTS") as CoBank may from time to time require in accordance with its
bylaws and capital plans as applicable to cooperative borrowers generally. In
connection with the foregoing, Borrower hereby acknowledges receipt, prior to
the execution of this Credit Agreement, of the following with respect to CoBank
(a) the bylaws, (b) a written description of the terms and conditions under
which the Bank Equity Interests are issued, (c) the most recent annual report,
and if more recent than the latest annual report, the latest quarterly report.
CoBank reserves the right to sell participations under the provisions of Section
16.28 on a non-patronage basis.
ARTICLE 9. SECURITY
The obligations of Borrower under this Credit Agreement shall be unsecured,
except (a) with respect to the Cash Collateral Account as provided in Section
5.6, and (b) the statutory lien in favor of CoBank, but not any other
Syndication Parties, in the Bank Equity Interests.
ARTICLE 10. REPRESENTATIONS AND WARRANTIES
To induce the Syndication Parties to make the Loans and issue Negotiated
Letters of Credit, and the Letter of Credit Bank to issue Committed Letters of
Credit, and recognizing that the Syndication Parties, the Administrative Agent,
the Letter of Credit Bank, and the Bid Agent are relying thereon, Borrower
represents and warrants as follows:
10.1 Organization, Good Standing, Etc. Borrower: (a) is duly organized,
validly existing, and in good standing under the laws of its state of
incorporation; (b) qualifies as a cooperative association under the laws of its
state of incorporation; (c) is duly qualified to do business and is in good
standing in each jurisdiction in which the transaction of its business makes
such qualification necessary, except to the extent that the failure to so
qualify has not resulted in, and could not reasonably be expected to cause, a
Material Adverse Effect; and (d) has all authority and all requisite corporate
and legal power to own and operate its assets and to carry on its business, and
to enter into and perform the Loan Documents to which it is a party. Each
Subsidiary: (a) is duly organized, validly existing, and in good standing under
the laws of its state of incorporation; (b) is duly qualified to do business and
is in good standing in each jurisdiction in which the transaction of its
business makes such qualification necessary, except to the extent that the
failure to so qualify has not resulted in, and could not reasonably be expected
to cause, a Material Adverse Effect; and (c) has all authority and all requisite
corporate and legal power to own and operate its assets and to carry on its
business.
10.2 Corporate Authority, Due Authorization; Consents. Borrower has taken
all corporate action necessary to execute, deliver and perform its obligations
under the Loan
35
Documents to which it is a party and to pay off all amounts owing under the
Existing Credit Agreement. All consents or approvals of any Person which are
necessary for, or are required as a condition of Borrower's execution, delivery
and performance of and under the Loan Documents, have been obtained.
10.3 Litigation. Except as described on Exhibit 10.3 hereto, there are no
pending legal or governmental actions, proceedings or investigations to which
Borrower or any Subsidiary is a party or to which any property of Borrower or
any Subsidiary is subject which might reasonably be expected to result in any
Material Adverse Effect and, to Borrower's knowledge, no such actions or
proceedings are threatened or contemplated by any federal, state, county, or
city (or similar unit) governmental agency or any other Person.
10.4 No Violations. The execution, delivery and performance of its
obligations under the Loan Documents will not: (a) violate any provision of
Borrower's articles of incorporation or bylaws, or any law, rule, regulation
(including, without limitation, Regulations T, U, and X of the Board of
Governors of the Federal Reserve System), or any judgment, order or ruling of
any court or governmental agency; (b) violate, require consent under (except
such consent as has been obtained), conflict with, result in a breach of,
constitute a default under, or with the giving of notice or the expiration of
time or both, constitute a default under, any existing real estate mortgage,
indenture, lease, security agreement, contract, note, instrument or any other
agreements or documents binding on Borrower or affecting its property; or (c)
violate, conflict with, result in a breach of, constitute a default under, or
result in the loss of, or restriction of rights under, any Required License or
any order, law, rule, or regulation under or pursuant to which any Required
License was issued or is maintained ("LICENSING Laws").
10.5 Binding Agreement. Each of the Loan Documents to which Borrower is a
party is, or when executed and delivered, will be, the legal, valid and binding
obligation of Borrower, enforceable in accordance with its terms, subject only
to limitations on enforceability imposed by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting creditors' rights
generally and by general principles of equity.
10.6 Compliance with Laws. Borrower and each Subsidiary are in compliance
with all federal, state, and local laws, rules, regulations, ordinances, codes
and orders, including without limitation all Environmental Laws and all
Licensing Laws, with respect to which noncompliance could reasonably be expected
to result in a Material Adverse Effect.
10.7 Principal Place of Business; Place of Organization. Borrower's place
of business, or chief executive office if it has more than one place of
business, and the place where the records required by Section 12.1 hereof are
kept, is located at 5500 Cenex Drive, Inver Grove Heights, Minnesota 55077.
Borrower is a cooperative corporation formed under the laws of the State of
Minnesota.
10.8 Payment of Taxes. Except as shown on Exhibit 10.8 hereto, Borrower and
each Subsidiary have filed all required federal, state and local tax returns and
have paid all taxes as shown on such returns as they have become due, and have
paid when due all other taxes, assessments or impositions levied or assessed
against Borrower or any Subsidiary, or their business or properties, except
where the failure to make such filing or payment could not
36
reasonably be expected to result in a Material Adverse Effect. Exhibit 10.8
specifically indicates all such taxes, if any, which are subject to a Good Faith
Contest.
10.9 Licenses and Approvals. Borrower and each Subsidiary have ownership
of, or license to use, or have been issued, all trademarks, patents, copyrights,
franchises, certificates, approvals, permits, authorities, agreements, and
licenses which are used or necessary to permit it to own its properties and to
conduct the business as presently being conducted as to which the termination or
revocation thereof could reasonably be expected to have a Material Adverse
Effect ("REQUIRED LICENSES"). Each Required License is in full force and effect,
and there is no outstanding notice of cancellation or termination or, to
Borrower's knowledge, any threatened cancellation or termination in connection
therewith, nor has an event occurred with respect to any Required License which,
with the giving of notice or passage of time or both, could result in the
revocation or termination thereof or otherwise in any impairment of Borrower's
rights with respect thereto, which impairment could reasonably be expected to
have a Material Adverse Effect. No consent, permission, authorization, order, or
license of any governmental authority, is necessary in connection with the
execution, delivery, performance, or enforcement of and under the Loan Documents
to which Borrower is a party except such as have been obtained and are in full
force and effect.
10.10 Employee Benefit Plans. Exhibit 10.10 sets forth as of the Closing
Date a true and complete list of each Borrower Benefit Plan that is maintained
by Borrower or any of its Subsidiaries or in which Borrower or any of its
Subsidiaries participates or to which Borrower or any of its Subsidiaries is
obligated to contribute, in each case as of the Closing Date. Borrower and its
Subsidiaries are in compliance in all material respects with the Employee
Retirement Income Security Act of 1974, as amended, and the regulations
thereunder ("ERISA"), to the extent applicable to them, and have not received
any notice to the contrary from the Pension Benefit Guaranty Corporation
("PBGC").
10.11 Equity Investments. Borrower does not now own any stock or other
voting or equity interest, directly or indirectly, in any Person valued at the
greater of book value or market value at $5,000,000 or more, other than: (a) the
Bank Equity Interests, and (b) as set forth on Exhibit 10.11.
10.12 Title to Real and Personal Property. Borrower and each Subsidiary
have good and marketable title to, or valid leasehold interests in, all of their
material properties and assets, real and personal, including the properties and
assets and leasehold interests reflected in the financial statements of the
Borrower and its Subsidiaries referred to in Section 10.13 hereof, except (a)
any properties or assets disposed of in the ordinary course of business, and (b)
for defects in title and encumbrances which could not reasonably be expected to
result in a Material Adverse Effect; and none of the properties of Borrower or
any Restricted Subsidiary are subject to any Lien, except as permitted by
Section 13.3 hereof. All such property is in good operating condition and
repair, reasonable wear and tear excepted, and suitable in all material respects
for the purposes for which it is being utilized except where their failure to be
in good operating condition could not reasonably be expected to result in a
Material Adverse Effect. All of the leases of Borrower and each Subsidiary which
constitute Material Agreements are in full force and effect and afford Borrower
or such Subsidiary peaceful and undisturbed possession of the subject matter
thereof.
37
10.13 Financial Statements. The consolidated balance sheets of Borrower and
its Subsidiaries as of August 31, 2002, and the related consolidated statements
of operations, cash flows and consolidated statements of capital shares and
equities for the Fiscal Year then ended, and the accompanying footnotes,
together with the unqualified opinion thereon, dated October 18, 2002 of
PricewaterhouseCoopers LLP, independent certified public accountants, copies of
which have been furnished to the Administration Agent and the Syndication
Parties, fairly present in all material respects the consolidated financial
condition of Borrower and its Subsidiaries as at such dates and the results of
the consolidated operations of Borrower and its Subsidiaries for the periods
covered by such statements, all in accordance with GAAP consistently applied.
Since August 31, 2002, there has been no material adverse change in the
financial condition, results of operations, business or prospects of Borrower or
any of its Subsidiaries. As of the Closing Date, there are no liabilities of
Borrower or any of its Subsidiaries, fixed or contingent, which are material but
are not reflected in the financial statements of Borrower and its Subsidiaries
referred to above or referred to in the notes thereto, other than liabilities
arising in the ordinary course of business since August 31, 2002. No
information, exhibit, or report furnished by Borrower or any of its Subsidiaries
to the Administration Agent or the Syndication Parties in connection with the
negotiation of this Credit Agreement contained any material misstatement of fact
or omitted to state a material fact or any fact necessary to make the statements
contained therein not materially misleading in light of the circumstances in
which they were made and taken together with the other information, exhibits and
reports furnished to the Administration Agent and/or the Syndication Parties.
10.14 Environmental Compliance. Except as set forth on Exhibit 10.14
hereto, Borrower and each Subsidiary have obtained all permits, licenses and
other authorizations which are required under all applicable Environmental Laws,
except to the extent failure to have any such permit, license or authorization
could not reasonably be expected to result in a Material Adverse Effect. Except
as set forth on Exhibit 10.14 hereto, Borrower and each Subsidiary are in
compliance with all Environmental Laws and the terms and conditions of the
required permits, licenses and authorizations, and are also in compliance with
all other limitations, restrictions, obligations, schedules and timetables
contained in those Laws or contained in any plan, order, decree, judgment,
injunction, notice or demand letter issued, entered, promulgated or approved
thereunder, except to the extent, in each case, failure to comply has not
resulted in, and could not reasonably be expected to result in, a Material
Adverse Effect.
10.15 Fiscal Year. Each fiscal year of Borrower begins on September 1 of
each calendar year and ends on August 31 of the following calendar year.
10.16 Material Agreements. Neither Borrower nor, to Borrower's knowledge,
any other party to any Material Agreement, is in default thereunder, and no
facts exist which with the giving of notice or the passage of time, or both,
would constitute such a default.
10.17 Regulations U and X. No portion of any Advance will be used for the
purpose of purchasing, carrying, or making loans to finance the purchase of, any
"margin security" or "margin stock" as such terms are used in Regulations U or X
of the Board of Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and
224.
10.18 Trademarks, Tradenames, etc. Borrower owns or licenses all patents,
trademarks, trade names, service marks and copyrights (collectively,
"INTELLECTUAL PROPERTY") that it utilizes in
38
its business as presently being conducted and as anticipated to be conducted,
except where the failure to do so could not reasonably be expected to result in
a Material Adverse Effect on Borrower. Borrower is not a licensee under any
written license for any patent, trademark, tradename, service mark or copyright
other than shrinkwrap licenses for "off-the-shelf" software used by Borrower in
the conduct of its business. The Intellectual Property is in full force and
effect, and Borrower has taken or caused to be taken all action, necessary to
maintain the Intellectual Property in full force and effect and has not taken or
failed to take or cause to be taken any action which, with the giving of notice,
or the expiration of time, or both, could result in any such Intellectual
Property being revoked, invalidated, modified, or limited.
10.19 No Default on Outstanding Judgments or Orders. Borrower and each
Subsidiary have satisfied all judgments and Borrower and each Subsidiary are not
in default with respect to any judgment, writ, injunction, decree, rule or
regulation of any court, arbitrator or federal, state, municipal or other
Governmental Authority, commission, board, bureau, agency or instrumentality,
domestic or foreign, except to the extent such failure to satisfy any or all
such judgments or to be in such a default has not resulted in, and could not
reasonably be expected to result in, a Material Adverse Effect.
10.20 No Default in Other Agreements. Neither Borrower nor any Subsidiary
is a party to any indenture, loan or credit agreement or any lease or other
agreement or instrument or subject to any certificate of incorporation or
corporate restriction which has resulted in, or could reasonably be expected to
result in, a Material Adverse Effect. Neither Borrower nor any Subsidiary is in
default in any respect in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in any agreement or
instrument where such failure to perform, observe or fulfill has resulted in, or
could reasonably be expected to result in, a Material Adverse Effect.
10.21 Acts of God. Neither the business nor the properties of Borrower or
any Subsidiary are currently affected by any fire, explosion, accident, drought,
storm, hail, earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance) which has resulted in, or could
reasonably be expected to result in, a Material Adverse Effect.
10.22 Governmental Regulation. Neither Borrower nor any Subsidiary is
subject to regulation under the Public Utility Holding Company Act of 1935, the
Investment Company Act of 1940, the Interstate Commerce Act, the Federal Power
Act or any statute or regulation, in each case, limiting its ability to incur
indebtedness for money borrowed as contemplated hereby.
10.23 Labor Matters and Labor Agreements. Except as set forth in Exhibit
10.23 hereto: (a) As of the Closing Date, there are no collective bargaining
agreements or other labor agreements covering any employees of Borrower or any
Subsidiary the termination, cessation, or breach of which could reasonably be
expected to result in a Material Adverse Effect, and a true and correct copy of
each such agreement will be furnished to the Administrative Agent upon its
written request from time to time. (b) There is no organizing activity involving
Borrower pending or, to Borrower's knowledge, threatened by any labor union or
group of employees. (c) There are, to Borrower's knowledge, no representation
proceedings pending or threatened with the National Labor Relations Board, and
no labor organization or group of employees of Borrower has made a pending
demand for recognition. (d) There are no complaints or charges against Borrower
pending or, to Borrower's knowledge threatened to be filed with any federal,
state, local or foreign
39
court, governmental agency or arbitrator based on, arising out of, in connection
with, or otherwise relating to the employment or termination of employment by
Borrower of any individual. (e) There are no strikes or other labor disputes
against Borrower that are pending or, to Borrower's knowledge, threatened. (f)
Hours worked by and payment made to employees of Borrower or any Subsidiary have
not been in violation of the Fair Labor Standards Act (29 U.S.C. ss. 201 et
seq.) or any other applicable law dealing with such matters. The representations
made in clauses (b) through (f) of this Section are made with respect to those
occurrences described which could, considered in the aggregate, reasonably be
expected to have a Material Adverse Effect.
10.24 Anti-Terrorism Laws.
10.24.1 Violation of Law. Neither the Borrower nor, to the knowledge
of Borrower, any of its Subsidiaries, is in violation of any laws relating to
terrorism or money laundering ("ANTI-TERRORISM LAWS"), including Executive Order
No. 13224 on Terrorist Financing, effective September 24, 2001 ("EXECUTIVE
ORDER"), and the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law
107-56.
10.24.2 Classification. Neither Borrower nor, to the knowledge of
Borrower, any of its Subsidiaries, or their respective brokers or other agents
acting or benefiting in any capacity in connection with the Loans, is any of the
following:
(a) a Person or entity that is listed in the annex to, or is
otherwise subject to the provisions of, the Executive Order;
(b) a Person or entity owned or controlled by, or acting for or
on behalf of, any Person or entity that is listed in the annex to, or is
otherwise subject to the provisions of, the Executive Order;
(c) a Person or entity with which any Syndication Party is
prohibited from dealing or otherwise engaging in any transaction by any
Anti-Terrorism Law;
(d) a Person or entity that commits, threatens or conspires to
commit or supports "terrorism" as defined in the Executive Order; or
(e) a Person or entity that is named as a "specially designated
national and blocked person" on the most current list published by the U.S.
Treasury Department Office of Foreign Asset Control at its official website or
any replacement website or other replacement official publication of such list.
10.24.3 Conduct of Business. Neither Borrower nor to the knowledge of
Borrower, any of its brokers or other agents acting in any capacity in
connection with the Loans (a) conducts any business or engages in making or
receiving any contribution of funds, goods or services to or for the benefit of
any Person described in clause (b) of Subsection 10.24.2 above, (b) deals in, or
otherwise engages in any transaction relating to, any property or interests in
property blocked pursuant to the Executive Order, or (c) engages in or conspires
to engage in any transaction that evades or avoids, or has the purpose of
evading or avoiding, or attempts to violate, any of the prohibitions set forth
in any Anti-Terrorism Law.
40
10.25 Disclosure. The representations and warranties contained in this
Article 10 and in the other Loan Documents or in any financial statements
provided to the Administrative Agent do not contain any untrue statement of a
material fact or omit to state a material fact necessary to make such
representations or warranties not misleading; and all projections provided to
the Administrative Agent were prepared in good faith based on reasonable
assumptions.
ARTICLE 11. CONDITIONS TO ADVANCES
11.1 Conditions to Closing. The obligation of the Syndication Parties to
make any Advances or issue any Negotiated Letters of Credit, and the obligation
of the Letter of Credit Bank to issue any Committed Letters of Credit hereunder
are subject to satisfaction, in the sole discretion of the Administrative Agent
and the Syndication Parties (except that satisfaction of Subsection 11.1.6 shall
be determined in the reasonable discretion of the Administrative Agent and the
Syndication Parties), of each of the following conditions precedent:
11.1.1 Loan Documents. The Administrative Agent shall have received
duly executed originals of the Loan Documents.
11.1.2 Approvals. The Administrative Agent shall have received
evidence satisfactory to it that all consents and approvals of governmental
authorities and third parties which are with respect to Borrower, necessary for,
or required as a condition of: (a) the repayment of the amounts owed under the
Existing Credit Agreement; and (b) the validity and enforceability of the Loan
Documents to which it is a party.
11.1.3 Organizational Documents. The Administrative Agent shall have
received: (a) good standing certificate, dated no more than thirty (30) days
prior to the Closing Date, for Borrower for its state of incorporation; (b) a
copy of the articles of incorporation of Borrower certified by the Secretary of
State of its state of organization; and (c) a copy of the bylaws of Borrower,
certified as true and complete by the Secretary or Assistant Secretary of
Borrower.
11.1.4 Evidence of Corporate Action. The Administrative Agent shall
have received in form and substance satisfactory to the Administrative Agent:
(a) documents evidencing all corporate action taken by Borrower to authorize
(including the specific names and titles of the persons authorized to so act
(each an "AUTHORIZED OFFICER")) the execution, delivery and performance of the
Loan Documents to which it is a party, certified to be true and correct by the
Secretary or Assistant Secretary of Borrower; and (b) a certificate of the
Secretary or Assistant Secretary of Borrower, dated the Closing Date, certifying
the names and true signatures of the Authorized Officers.
11.1.5 Evidence of Insurance. Borrower shall have provided the
Administrative Agent with insurance certificates and such other evidence, in
form and substance satisfactory to the Administrative Agent, of all insurance
required to be maintained by it under the Loan Documents.
11.1.6 Appointment of Agent for Service. The Administrative Agent
shall have received evidence satisfactory to the Administrative Agent that
Borrower has appointed The Corporation Company to serve as its agent for service
of process at their Denver, Colorado office
41
(presently at 1675 Broadway), and that The Corporation Company has accepted such
appointment by Borrower.
11.1.7 No Material Change. No change shall have occurred in the
condition or operations of Borrower since August 31, 2002 which could reasonably
be expected to result in a Material Adverse Effect.
11.1.8 Fees and Expenses. Borrower shall have paid the Administrative
Agent, by wire transfer of immediately available federal funds all fees set
forth in Section 6.5 hereof and any other fees owing to the Administrative Agent
which are due on the Closing Date, and all expenses owing pursuant to Section
17.1 hereof.
11.1.9 Bank Equity Interest Purchase Obligation. Borrower shall have
purchased such Bank Equity Interests as CoBank may require pursuant to Article 8
hereof.
11.1.10 Opinion of Counsel. Borrower shall have provided a favorable
opinion of its counsel addressed to the Administrative Agent and each of the
present and future Syndication Parties, covering such matters as the
Administrative Agent may reasonably require.
11.1.11 Further Assurances. Borrower shall have provided and/or
executed and delivered to the Administrative Agent such further assignments,
documents or financing statements, in form and substance satisfactory to the
Administrative Agent, that Borrower is to execute and/or deliver pursuant to the
terms of the Loan Documents or as the Administrative Agent may reasonably
request.
11.2 Conditions to Advances and to Issuance of Letters of Credit. The
Syndication Parties' obligation to fund each Advance or to issue a Negotiated
Letter of Credit, and the obligation of the Letter of Credit Bank to issue
Committed Letters of Credit is subject to the satisfaction, in the sole
discretion of the Administrative Agent and the Syndication Parties, of each of
the following conditions precedent, as well as those set forth in Section 11.1
hereof, and each request by Borrower for an Advance or Letter of Credit shall
constitute a representation by Borrower, upon which the Administrative Agent may
rely, that the conditions set forth in Subsections 11.2.1 and 11.2.2 hereof have
been satisfied:
11.2.1 Cancellation of Existing Credit Agreement. All amounts owing
under the Existing Credit Agreement shall be paid in full and the Existing
Credit Agreement canceled and terminated by all parties thereto and all liens in
connection therewith released or terminated.
11.2.2 Default. As of the Advance Date or the issuance date of a
Letter of Credit, as the case may be, no Event of Default or Potential Default
shall have occurred and be continuing, and the disbursing of the amount of the
Advance requested shall not result in an Event of Default or Potential Default.
11.2.3 Representations and Warranties. The representations and
warranties of Borrower herein shall be true and correct in all material respects
on and as of the date on which the Advance is to be made or the Letter of Credit
is to be issued as though made on such date. Borrower shall have paid the
Administrative Agent, by wire transfer of immediately available U.S.
42
funds all fees set forth in Section 6.5 hereof which are then due and payable,
including all expenses owing pursuant to Section 17.1 hereof.
ARTICLE 12. AFFIRMATIVE COVENANTS
From and after the date of this Credit Agreement and until the Bank Debt is
indefeasibly paid in full, all Letters of Credit and Existing Letters of Credit
have expired, and the Syndication Parties have no obligation to make any Advance
or issue a Negotiated Letter of Credit, and the Letter of Credit Bank has no
obligation to issue any Committed Letters of Credit hereunder, Borrower agrees
that it will observe and comply with the following covenants for the benefit of
the Administrative Agent, the Syndication Parties, and the Letter of Credit
Bank:
12.1 Books and Records. Borrower shall at all times keep, and cause each
Subsidiary to keep, proper books of record and account, in which correct and
complete entries shall be made of all its dealings, in accordance with GAAP.
12.2 Reports and Notices. Borrower shall provide to the Administrative
Agent the following reports, information and notices:
12.2.1 Annual Financial Statements. As soon as available, but in no
event later than one hundred and twenty (120) days after the end of any Fiscal
Year of Borrower occurring during the term hereof one copy of the audit report
for such year and accompanying consolidated financial statements (including all
footnotes thereto), including a consolidated balance sheet, a consolidated
statement of earnings, a consolidated statement of capital, and a consolidated
statement of cash flow for the Borrower and its Subsidiaries, showing in
comparative form the figures for the previous Fiscal Year, all in reasonable
detail, prepared in conformance with GAAP consistently applied and certified
without qualification by PricewaterhouseCoopers, or other independent public
accountants of nationally recognized standing selected by the Borrower and
satisfactory to the Administrative Agent, and to be accompanied by a copy of the
management letter of such accountants addressed to the board of directors of
Borrower related to such annual audit; and annual financial statements of
Borrower. Delivery to the Administrative Agent within the time period specified
above of copies of Borrower's Annual Report on Form 10-K as prepared and filed
in accordance with the requirements of the Securities Exchange Commission shall
be deemed to satisfy the requirements of this Subsection if accompanied by the
required unqualified accountant's certification. Such annual financial
statements or Form 10-K's required pursuant to this Subsection shall be
accompanied by a Compliance Certificate signed by Borrower's Chief Financial
Officer or other officer of Borrower acceptable to the Administrative Agent.
12.2.2 Quarterly Financial Statements. As soon as available but in no
event more than forty-five (45) days after the end of each Fiscal Quarter
(except the last Fiscal Quarter of Borrower's Fiscal Year) the following
financial statements or other information concerning the operations of Borrower
and its Subsidiaries for such Fiscal Quarter, the Fiscal Year to date, and for
the corresponding periods of the preceding Fiscal Year, all prepared in
accordance with GAAP consistently applied: (a) a consolidated balance sheet, (b)
a consolidated summary of earnings, (c) a consolidated statement of cash flows,
and (d) such other statements as the Administrative Agent may reasonably
request. Delivery to the Administrative Agent within the time period specified
above of copies of Borrower's Quarterly Report on Form 10-Q as prepared and
filed in accordance with the requirements of the Securities Exchange Commission
shall be deemed to satisfy the
43
requirements of this Subsection other than clause (d) hereof. Such quarterly
financial statements or Form 10-Q's required pursuant to this Subsection shall
be accompanied by a Compliance Certificate signed by Borrower's Chief Financial
Officer or other officer of Borrower acceptable to the Administrative Agent
(subject to normal year end adjustments).
12.2.3 Notice of Default. As soon as the existence of any Event of
Default or Potential Default becomes known to any officer of Borrower, prompt
written notice of such Event of Default or Potential Default, the nature and
status thereof, and the action being taken or proposed to be taken with respect
thereto.
12.2.4 ERISA Reports. As soon as possible and in any event within
twenty (20) days after Borrower knows or has reason to know that any Reportable
Event or Prohibited Transaction has occurred with respect to any Plan or that
the PBGC or Borrower or any Subsidiary has instituted or will institute
proceedings under Title IV of ERISA to terminate any Plan, or that Borrower, any
Subsidiary or any ERISA Affiliate has completely or partially withdrawn from a
Multiemployer Plan, or that a Plan which is a Multiemployer Plan is in
reorganization (within the meaning of Section 4241 of ERISA), is insolvent
(within the meaning of Section 4245 of ERISA) or is terminating, a certificate
of Borrower's Chief Financial Officer setting forth details as to such
Reportable Event or Prohibited Transaction or Plan termination or withdrawal or
reorganization or insolvency and the action Borrower or such Subsidiary proposes
to take with respect thereto, provided, however, that notwithstanding the
foregoing, no reporting is required under this subsection (6) unless the
matter(s), individually or in the aggregate, result, or could be reasonably
expected to result, in aggregate obligations or liabilities of Borrower and/or
the Subsidiaries in excess of ten million dollars ($10,000,000).
12.2.5 Notice of Litigation. Promptly after the commencement thereof,
notice of all actions, suits, arbitration and any other proceedings before any
Governmental Authority, affecting Borrower or any Subsidiary which, if
determined adversely to Borrower or any Subsidiary, could reasonably be expected
to require Borrower or any Subsidiary to have to pay or deliver assets having a
value of ten million dollars ($10,000,000) or more (whether or not the claim is
covered by insurance) or could reasonably be expected to result in a Material
Adverse Effect.
12.2.6 Notice of Material Adverse Effect. Promptly after Borrower
obtains knowledge thereof, notice of any matter which, alone or when considered
together with other matters, has resulted or could reasonably be expected to
result in, a Material Adverse Effect.
12.2.7 Notice of Environmental Proceedings. Without limiting the
provisions of Subsection 12.2.5 hereof, promptly after Borrower's receipt
thereof, notice of the receipt of all pleadings, orders, complaints,
indictments, or other communication alleging a condition that may require
Borrower or any Subsidiary to undertake or to contribute to a cleanup or other
response under Environmental Regulations, or which seeks penalties, damages,
injunctive relief, or criminal sanctions related to alleged violations of such
laws, or which claims personal injury or property damage to any person as a
result of environmental factors or conditions or which, if adversely determined,
could reasonably be expected to have a Material Adverse Effect.
12.2.8 Regulatory and Other Notices. Promptly after Borrower's receipt
thereof, copies of any notices or other communications received from any
Governmental Authority with
44
respect to any matter or proceeding the effect of which could reasonably be
expected to have a Material Adverse Effect.
12.2.9 Adverse Action Regarding Required Licenses. As soon as Borrower
learns that any petition, action, investigation, notice of violation or apparent
liability, notice of forfeiture, order to show cause, complaint or proceeding is
pending, or, to the best of Borrower's knowledge, threatened, to seek to revoke,
cancel, suspend, modify, or limit any of the Required Licenses, prompt written
notice thereof and Borrower shall contest any such action in a Good Faith
Contest.
12.2.10 Budget. Promptly upon becoming available and in any event
within thirty (30) days after the beginning of each Fiscal Year, a copy of the
Annual Operating Budget for the next succeeding Fiscal Year and for each Fiscal
Year through the 3-Year Maturity Date approved by Borrower's board of directors,
together with the assumptions and projections on which such budget is based and
a copy of forecasts of operations and capital expenditures (including
investments) for each Fiscal Year; provided that the first such Annual Operating
Budget shall not be required until September 30, 2003. In addition, if any
material changes are made to such budget or projections or forecasts during the
year, then Borrower will furnish copies to the Administrative Agent of any such
changes promptly after such changes have been approved.
12.2.11 Additional Information. With reasonable promptness, such other
information respecting the condition or operations, financial or otherwise, of
Borrower or any Subsidiary as the Administrative Agent or any Syndication Party
may from time to time reasonably request.
12.3 Maintenance of Existence and Qualification. Borrower shall, and shall
cause each Subsidiary to, maintain its corporate existence in good standing
under the laws of its state of organization. Borrower shall, and shall cause
each Subsidiary to, qualify and remain qualified as a foreign corporation in
each jurisdiction in which such qualification is necessary in view of its
business, operations and properties except where the failure to so qualify has
not and could not reasonably be expected to result in a Material Adverse Effect.
12.4 Compliance with Legal Requirements and Agreements. Borrower shall, and
shall cause each Subsidiary to: (a) comply with all laws, rules, regulations and
orders applicable to Borrower (or such Subsidiary, as applicable) or its
business unless such failure to comply is the subject of a Good Faith Contest;
and (b) comply with all agreements, indentures, mortgages, and other instruments
to which it (or any Subsidiary, as applicable) is a party or by which it or any
of its (or any Subsidiary, or any of such Subsidiary's, as applicable) property
is bound; provided, however, that the failure of Borrower to comply with this
sentence in any instance not directly involving the Administrative Agent or a
Syndication Party shall not constitute an Event of Default unless such failure
could reasonably be expected to have a Material Adverse Effect.
12.5 Compliance with Environmental Laws. Without limiting the provisions of
Section 12.4 of this Credit Agreement, Borrower shall, and shall cause
Subsidiary to, comply in all material respects with, and take all reasonable
steps necessary to cause all persons occupying or present on any properties
owned or leased by Borrower (or any Subsidiary, as applicable) to comply with,
all Environmental Regulations, the failure to comply with which would have a
Material Adverse Effect or unless such failure to comply is the subject of a
Good Faith Contest.
45
12.6 Taxes. Borrower shall pay or cause to be paid, and shall cause each
Subsidiary to pay, when due all taxes, assessments, and other governmental
charges upon it, its income, its sales, its properties (or upon Subsidiary and
its income, sales, and properties, as applicable), and federal and state taxes
withheld from its (or Subsidiary's, as applicable) employees' earnings, unless
(a) the failure to pay such taxes, assessments, or other governmental charges
could not reasonably be expected to result in a Material Adverse Effect, or (b)
such taxes, assessments, or other governmental charges are the subject of a Good
Faith Contest and Borrower has established adequate reserves therefor in
accordance with GAAP.
12.7 Insurance. Borrower shall maintain, and cause each Subsidiary to
maintain, insurance with one or more financially sound and reputable insurance
carrier or carriers reasonably acceptable to the Administrative Agent, in such
amounts (including deductibles) and covering such risks (including fidelity
coverage) as are usually carried by companies engaged in the same or a similar
business and similarly situated, provided, however, that Borrower may, to the
extent permitted by Law, provide for appropriate self-insurance with respect to
workers' compensation. At the request of Administrative Agent, copies of all
policies (or such other proof of compliance with this Section as may be
reasonably satisfactory) shall be delivered to the Administrative Agent. All
such insurance policies shall contain a provision requiring at least ten (10)
days' notice to Borrower prior to any cancellation for non-payment of premiums
and at least forty-five (45) days' notice to Borrower of cancellation for any
other reason or of non-renewal. With respect to all such insurance policies,
Borrower shall provide the Administrative Agent with (a) within ten (10) days
after obtaining such knowledge, written notice of any material modification of
which it has knowledge; and (b) one or more certificates of insurance which
shall include the agreement of the broker/insuror representative providing such
certificates to provide to the Administrative Agent at least ten (10) days'
notice prior to any cancellation of any such insurance policies for non-payment
of premiums and at least forty-five (45) days' notice prior to cancellation of
any such insurance policies for any other reason, and of non-renewal or material
modification of any such insurance policies. No later than forty (40) days prior
to expiration, Borrower shall give the Administrative Agent (x) satisfactory
written evidence of renewal of all such policies with premiums paid, or (y) a
written report as to the steps being taken by Borrower to renew or replace all
such policies, provided that notwithstanding the receipt of such written report,
the Administrative Agent may at any time thereafter give Borrower written notice
to provide the Administrative Agent with such evidence as described in clause
(x), in which case Borrower must do so within ten (10) days of such notice.
Borrower agrees to pay all premiums on such insurance as they become due
(including grace periods), and will not permit any condition to exist which
would wholly or partially invalidate any insurance thereon.
12.8 Maintenance of Properties. Borrower shall maintain, keep and preserve,
and cause each Subsidiary to maintain, keep and preserve, all of its material
properties (tangible and intangible) necessary or used in the proper conduct of
its business in good working order and condition, ordinary wear and tear
excepted, and shall cause to be made all repairs, renewals, replacements,
betterments and improvements thereof, all as in the sole judgment of Borrower
may be reasonably necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times.
12.9 Payment of Liabilities. Borrower shall pay, and shall cause its
Subsidiaries to pay, all liabilities (including, without limitation: (a) any
indebtedness for borrowed money or for the
46
deferred purchase price of property or services; (b) any obligations under
leases which have or should have been characterized as Capital Leases; and (c)
any contingent liabilities, such as guaranties, for the obligations of others
relating to indebtedness for borrowed money or for the deferred purchase price
of property or services or relating to obligations under leases which have or
should have been characterized as Capital Leases) as they become due beyond any
period of grace under the instrument creating such liabilities, unless (with the
exception of the Bank Debt) (a) the failure to pay such liabilities within such
time period could not reasonably be expected to result in a Material Adverse
Effect, or (b) they are contested in good faith by appropriate actions or legal
proceedings, Borrower establishes adequate reserves therefor in accordance with
GAAP, and such contesting will not result in a Material Adverse Effect.
12.10 Inspection. Borrower shall permit, and cause its Subsidiaries to
permit, the Administrative Agent or any Syndication Party or their agents,
during normal business hours or at such other times as the parties may agree, to
inspect the assets and operations of Borrower and its Subsidiaries and to
examine, and make copies of or abstracts from, Borrower's properties, books, and
records, and to discuss the affairs, finances, operations, and accounts of
Borrower and its Subsidiaries with their respective officers, directors,
employees, and independent certified public accountants (and by this provision
Borrower authorizes said accountants to discuss with the Administrative Agent or
any Syndication Party or their agents the finances and affairs of Borrower);
provided, that, in the case of each meeting with the independent accountants
Borrower is given an opportunity to have a representative present at such
meeting.
12.11 Required Licenses; Permits; Intellectual Property; Etc. Borrower
shall duly and lawfully obtain and maintain in full force and effect, and shall
cause its Subsidiaries to obtain and maintain in full force and effect, all
Required Licenses and Intellectual Property as appropriate for the business
being conducted and properties owned by Borrower or such Subsidiaries at any
given time.
12.12 ERISA. Borrower shall make or cause to be made, and cause each
Subsidiary to make or cause to be made, all payments or contributions to all
Borrower Pension Plans covered by Title IV of ERISA, which are necessary to
enable those Borrower Pension Plans to continuously meet all minimum funding
standards or requirements.
12.13 Maintenance of Commodity Position. Borrower shall protect its
commodity inventory holdings or commitments to buy or sell commodities against
adverse price movements, including the taking of equal and opposite positions in
the cash and futures markets, to minimize losses and protect margins in
commodity production, storage, processing and marketing as is recognized as
financially sound and reputable by prudent business persons in the commodity
business.
12.14 Financial Covenants. Borrower shall maintain the following financial
covenants:
12.14.1 Working Capital. Borrower shall have at all times Consolidated
Current Assets minus Consolidated Current Liabilities of not less than
$200,000,000.
12.14.2 Consolidated Funded Debt to Consolidated Cash Flow. Borrower
shall have at all times and measured as of the end of each Fiscal Quarter, a
ratio of Consolidated
47
Funded Debt divided by Consolidated Cash Flow of no greater than 3.00 to 1.00 as
measured on the previous consecutive four Fiscal Quarters.
12.14.3 Adjusted Consolidated Funded Debt to Consolidated Members' and
Patrons' Equity. Borrower shall not permit the ratio of Adjusted Consolidated
Funded Debt to Consolidated Members' and Patrons' Equity to exceed at any time
..80 to 1.00.
12.15 Embargoed Person. At all times throughout the term of the Loans, (a)
none of the funds or assets of Borrower that are used to repay the Loans shall
constitute property of, or shall be beneficially owned directly or, to the
knowledge of Borrower, indirectly by, any Person subject to sanctions or trade
restrictions under United States law ("EMBARGOED PERSON" or "EMBARGOED PERSONS")
that is identified on (1) the "List of Specially Designated Nationals and
Blocked Persons" (the "SDN LIST") maintained by the Office of Foreign Assets
Control ("OFAC"), U.S. Department of the Treasury, and/or to the knowledge of
Borrower, as of the date thereof, based upon reasonable inquiry by Borrower, on
any other similar list ("OTHER LIST") maintained by OFAC pursuant to any
authorizing statute including, but not limited to, the International Emergency
Economic Powers Act, 50 U.S.C. ss.ss. 1701 et seq., The Trading with the Enemy
Act, 50 U.S.C. App. 1 et seq., and any Executive Order or regulation promulgated
thereunder, with the result that the investment in Borrower (whether directly or
indirectly), is prohibited by law, or the Loans made by the Syndication Parties
would be in violation of law, or (2) the Executive Order, any related enabling
legislation or any other similar Executive Orders, and (b) no Embargoed Person
shall have any direct interest, and to the knowledge of Borrower, as of the date
hereof, based upon reasonable inquiry by Borrower, indirect interest, of any
nature whatsoever in Borrower, with the result that the investment in Borrower
(whether directly or indirectly), is prohibited by law or the Loans are in
violation of law.
12.16 Anti-Money Laundering. At all times throughout the term of the Loans,
to the knowledge of Borrower, as of the date hereof, based upon reasonable
inquiry by Borrower, none of the funds of Borrower, that are used to repay the
Loans shall be derived from any unlawful activity, with the result that the
investment in Borrower (whether directly or indirectly), is prohibited by law or
the Loans would be in violation of law.
ARTICLE 13. NEGATIVE COVENANTS
From and after the date of this Credit Agreement until the Bank Debt is
indefeasibly paid in full, all Letters of Credit and Existing Letters of Credit
have expired or been fully drawn, the Syndication Parties have no obligation to
make any Advance or issue any Negotiated Letter of Credit, and the Letter of
Credit Bank has no obligation to issue any Committed Letters of Credit
hereunder, Borrower agrees that it will observe and comply with the following
covenants:
13.1 Borrowing. Borrower shall not (nor shall it permit any of its
Restricted Subsidiaries to) create, incur, assume or permit to exist, directly
or indirectly, any Debt, except for: (a) Debt of Borrower arising under this
Credit Agreement and the other Loan Documents; (b) trade payables arising in the
ordinary course of business; (c) Capital Leases in existence from time to time;
(d) current operating liabilities (other than for borrowed money) incurred in
the ordinary course of business; (e) unsecured Debt arising under uncommitted
lines of credit; provided that the maximum principal amount that may be
outstanding at any one time shall not exceed $50,000,000.00; (f) Debt in
existence on the date hereof as set forth in Exhibit 13.1
48
attached hereto; (g) unsecured long-term Debt; (h) Debt of Borrower incurred
pursuant to the Term Loan Credit Agreement; (i) documentary and standby letters
of credit issued at the request of Borrower or any Restricted Subsidiary by a
financial institution other than the Letter of Credit Bank or a Syndication
Party, provided the aggregate principal amount outstanding under such letters of
credit together with the undrawn face amount under all of the Letters of Credit
does not exceed $75,000,000, and provided further that the aggregate principal
amount outstanding under such letters of credit together with all 3-Year
Advances, the undrawn face amount of all the Letters of Credit and unreimbursed
obligations with respect to payments made under all the Letters of Credit shall
not exceed the 3-Year Commitment; and (j) such other Debt agreed upon in writing
between Borrower and the Syndication Parties.
13.2 No Other Businesses. Borrower shall not engage in any material
respects in any business activity or operations other than operations or
activities (a) in the agriculture industry, (b) in the food industry, or (c)
which are not substantially different from or are related to its present
business activities or operations.
13.3 Liens. Borrower shall not (nor shall it permit any of its Restricted
Subsidiaries to) create, incur, assume or suffer to exist any mortgage, pledge,
lien, charge or other encumbrance on, or any security interest in, any of its
real or personal properties (including, without limitation, leasehold interests,
leasehold improvements and any other interest in real property or fixtures), now
owned or hereafter acquired, except the following Liens ("PERMITTED
ENCUMBRANCES"):
(a) Liens for taxes or assessments or other charges or levies of
any Governmental Authority, that are not delinquent or if delinquent (i) are the
subject of a Good Faith Contest but in no event past the time when a penalty
would be incurred, and (ii) the aggregate amount of liabilities so secured
(including interest and penalties) does not exceed $10,000,000 at any one time
outstanding;
(b) Liens imposed by Law, such as mechanic's, worker's,
repairman's, miner's, agister's, attorney's, materialmen's, landlord's,
warehousemen's and carrier's Liens and other similar Liens which are securing
obligations incurred in the ordinary course of business for sums not yet due and
payable or if due and payable which are the subject of a Good Faith Contest;
(c) Liens under workers' compensation, unemployment insurance,
social security or similar legislation (other than ERISA), or to secure payments
of premiums for insurance purchased in the ordinary course of business, or to
secure the performance of tenders, statutory obligations, surety and appearance
bonds and bids, bonds for release of an attachment, stay of execution or
injunction, leases, government contracts, performance and return-of-money bonds
and other similar obligations, all of which are incurred in the ordinary course
of business of Borrower or the Restricted Subsidiary, as applicable, and not in
connection with the borrowing of money;
(d) Any attachment or judgment Lien, the time for appeal or
petition for rehearing of which shall not have expired or in respect of which
Borrower or the Restricted Subsidiary is protected in all material respects by
insurance or for the payment of which adequate reserves have been established,
provided that the execution or other enforcement of such Liens is effectively
stayed and the claims secured thereby are the subject of a Good Faith Contest,
and provided further that the aggregate amount of liabilities of Borrower and
its Restricted
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Subsidiaries so secured (including interest and penalties) shall not be in
excess of $10,000,000.00 at any one time outstanding;
(e) Easements, rights-of-way, restrictions, encroachments,
covenants, servitudes, zoning and other similar encumbrances which, in the
aggregate, do not materially interfere with the occupation, use and enjoyment by
Borrower or any Restricted Subsidiary of the property or assets encumbered
thereby in the normal course of its business or materially impair the value of
the property subject thereto;
(f) Liens arising in the ordinary course of business and created
in connection with amounts on deposit in charge card and like accounts (such as
Visa or MasterCard);
(g) Liens on land, buildings and equipment existing at the time
of their acquisition or Liens to secure the payment of all or any part of the
purchase price of such land, buildings or equipment or to secure Funded Debt
incurred prior to, at the time of, or within one-hundred eighty (180) days after
the acquisition of such property for the purpose of financing all or any part of
the purchase price thereof, provided that any such Liens shall not encumber any
other property of Borrower or its Restricted Subsidiaries;
(h) Liens assumed in connection with permitted mergers and
acquisitions, but only to the extent that such Liens shall secure only Funded
Debt and shall not encumber any other property of Borrower or any Restricted
Subsidiary;
(i) Liens on financed property created or incurred in connection
with leases, mortgages, conditional sales contracts, security interests or
arrangements for the retention of title entered into by Borrower or any of its
Restricted Subsidiaries to secure "industrial revenue bonds" as defined in
Section 103(b)(2) of the Code and treated as obligations described in
legislation similar to the provisions of said Sections of the Code enacted in
any State of the United States or Puerto Rico, which are issued to finance
property useful and intended to be used in carrying on the business of Borrower
or any of its Restricted Subsidiaries, provided that upon creation of any such
Lien Borrower or such Restricted Subsidiary shall incur Funded Debt secured
thereby in conformity with the provisions of Section 13.1 hereof;
(j) Liens on property or assets of a Restricted Subsidiary to
secure Debt of such Restricted Subsidiary to Borrower;
(k) Liens of CoBank and other cooperatives, respectively, on
Investments by Borrower in the stock, participation certificates, or allocated
reserves of CoBank or other cooperatives, respectively, owned by Borrower;
(l) All precautionary filings of financing statements under the
Uniform Commercial Code which cover property that is made available to or used
by Borrower or any Restricted Subsidiary pursuant to the terms of an Operating
Lease or Capital Lease;
(m) Liens securing its reimbursement obligations under any letter
of credit issued in connection with the acquisition of an asset; provided that
(i) the lien attaches only to such asset, and (ii) the lien is released upon
satisfaction of such reimbursement obligation; and
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(n) Liens to secure and provide credit support, up to a maximum
of $25,000,000.00, for regulated exchange or over-the-counter hedging
transactions.
13.4 Sale of Assets. Borrower shall not (nor shall it permit any of its
Restricted Subsidiaries to) sell, convey, assign, lease or otherwise transfer or
dispose of, voluntarily, by operation of law or otherwise, any material part of
its now owned or hereafter acquired assets during any twelve (12) month period
commencing September 1, 2002 and each September 1 thereafter, except: (a) the
sale of inventory, equipment and fixtures disposed of in the ordinary course of
business, (b) the sale or other disposition of assets no longer necessary or
useful for the conduct of its business, and (c) leases of assets to an entity in
which Borrower has at least a fifty-percent (50%) interest in ownership,
profits, and governance. For purposes of this Section, "material part" shall
mean ten percent (10%) or more of the lesser of the book value or the market
value of the assets of Borrower or such Restricted Subsidiary as shown on the
balance sheets thereof as of the August 31 immediately preceding each such
twelve (12) month measurement period.
13.5 Liabilities of Others. Borrower shall not (nor shall it permit any of
its Restricted Subsidiaries to) assume, guarantee, become liable as a surety,
endorse, contingently agree to purchase, or otherwise be or become liable,
directly or indirectly (including, but not limited to, by means of a maintenance
agreement, an asset or stock purchase agreement, or any other agreement designed
to ensure any creditor against loss), for or on account of the obligation of any
Person, except (a) by the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of the Borrower's or
any Restricted Subsidiary's business, (b) guarantees made from time to time,
whether in existence on the Closing Date or made subsequent thereto, by Borrower
and its Restricted Subsidiaries in the ordinary course of their respective
businesses with respect to the liabilities and obligations of Persons other than
National Cooperative Refinery Association ("NCRA"); provided, however, that the
aggregate amount of all indebtedness guaranteed under this clause (b) shall not
exceed $150,000,000.00 in the aggregate, and (c) guarantees made by Borrower
from time to time, whether in existence on the Closing Date or made subsequent
thereto, of liabilities and obligations of NCRA for Funded Debt of NCRA,
provided that the maximum amount of liabilities of NCRA guaranteed pursuant to
this clause (c), when added to the amount of Investments by Borrower pursuant to
clause (i) of Subsection 13.8 hereof, shall not exceed $125,000,000.00.
13.6 Loans. Borrower shall not (nor shall it permit any of its Restricted
Subsidiaries to) lend or advance money, credit, or property to any Person,
except for (a) loans to Restricted Subsidiaries; (b) trade credit extended in
the ordinary course of business and advances against the purchase price for the
purchase by Borrower of goods or services in the ordinary course of business;
(c) loans made by Borrower to its members on open account maintained by such
members with Borrower or made by Borrower to its members pursuant to its
Affiliate Financing CoBank Participation Program; and (d) loans made by Fin-Ag,
Inc. to agricultural producers, provided that at all times on and after May 21,
2003, the aggregate outstanding principal amount of all such loans retained by
Borrower and Fin-Ag, Inc. under clauses (c) and (d) of this Section shall not
exceed $110,000,000.00.
13.7 Merger; Acquisitions; Business Form; Etc. Borrower shall not (nor
shall it permit any of its Restricted Subsidiaries to) merge or consolidate with
any entity, or acquire all or substantially all of the assets of any person or
entity, or form or create any new Subsidiary (other
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than a Restricted Subsidiary formed by Borrower), change its business form from
a cooperative corporation, or commence operations under any other name,
organization, or entity, including any joint venture; provided, however,
(a) The foregoing shall not prevent any consolidation,
acquisition, or merger if after giving effect thereto:
(i) The book value of Borrower and its subsidiaries does not
increase due to all such mergers, consolidations or acquisitions by an
aggregate amount in excess of $100,000,000.00 in any Fiscal Year of
Borrower;
(ii) Borrower is the surviving entity; and
(iii) No Event of Default or Potential Default shall have
occurred and be continuing.
(b) The foregoing shall not prevent Borrower from forming or
creating any new Subsidiary provided:
(i) The Investment in such Subsidiary does not violate any
provision of Section 13.8 hereof; and
(ii) Such Subsidiary shall not acquire all or substantially
all of the assets of any Person except through an acquisition,
consolidation, or merger satisfying the requirements of clause (a) of
this Section.
13.8 Investments. Except for the purchase of Bank Equity Interests,
Borrower shall not (nor shall it permit any of its Restricted Subsidiaries to)
own, purchase or acquire any stock, obligations or securities of, or any other
interest in, or make any capital contribution to, or otherwise make an
Investment in, any Person, except that Borrower and the Restricted Subsidiaries
may own, purchase or acquire:
(a) commercial paper maturing not in excess of one year from the
date of acquisition and rated P1 by Moody's Investors Service, Inc. or A1 by
Standard & Poor's Corporation on the date of acquisition;
(b) certificates of deposit in North American commercial banks
rated C or better by Keefe, Bruyette & Woods, Inc. or 3 or better by Cates
Consulting Analysts, maturing not in excess of one year from the date of
acquisition;
(c) obligations of the United States government or any agency
thereof, the obligations of which are guaranteed by the United States
government, maturing, in each case, not in excess of one year from the date of
acquisition;
(d) repurchase agreements of any bank or trust company
incorporated under the laws of the United States of America or any state thereof
and fully secured by a pledge of obligations issued or fully and unconditionally
guaranteed by the United States government;
(e) Investments permitted under Sections 13.5, 13.6, and 13.7;
52
(f) Investments in Persons, which are not Restricted
Subsidiaries, identified, including the book value of each such Investment, on
Exhibit 13.8(f) hereto; provided that the amount of such Investment shall not
increase above the amount shown in Exhibit 13.8(f),except for (i) property and
cash contributions made between March 31, 2003 and the Closing Date and not
shown in Exhibit 13.8(f), and (ii) Investments made pursuant to clauses (h)
through (k) of this Section subsequent to the Closing Date;
(g) Investments (by Borrower) in the Restricted Subsidiaries;
(h) Investments in the form of non-cash patronage dividends in
any Person;
(i) Investments in NCRA in addition to (1) non-cash patronage
dividends, and (2) those Investments in NCRA by Borrower prior to the Closing
Date, as shown, by amount and date, on Exhibit 13.8(i) hereto, provided that the
maximum amount of Investments in NCRA subsequent to the Closing Date pursuant to
this clause (i), when added to the aggregate amount of obligations and
liabilities of NCRA guaranteed by Borrower pursuant to clause (c) of Subsection
13.5 hereof, shall not exceed $125,000,000.00;
(j) Investments in Ventura Foods, LLC in addition to those
Investments in Ventura Foods, LLC by Borrower prior to the Closing Date, as
shown, by amount and date, on Exhibit 13.8(j) hereto, provided that the maximum
amount of Investments in Ventura Foods, LLC subsequent to the Closing Date
pursuant to this clause (j) shall not exceed $75,000,000.00; and
(k) Investments, in addition to those permitted by clauses (a)
through (j) above, in an aggregate amount not exceeding $110,000,000.00.
13.9 Transactions With Related Parties. Borrower shall not purchase,
acquire, provide, or sell any equipment, other personal property, real property
or services from or to any Subsidiary (other than a Restricted Subsidiary),
except in the ordinary course and pursuant to the reasonable requirements of
Borrower's business and upon fair and reasonable terms no less favorable than
would be obtained by Borrower in a comparable arm's-length transaction with an
unrelated Person.
13.10 Patronage Refunds, etc. Borrower shall not, directly or indirectly,
in any Fiscal Year (a) declare or pay any cash patronage refunds to patrons or
members which in the aggregate exceed 20% of Borrower's consolidated net
patronage income for the Fiscal Year of Borrower preceding the Fiscal Year in
which such patronage refunds are to be paid, (b) directly or indirectly redeem
or otherwise retire its equity, or (c) make any cash distributions of any kind
or character in respect of its equity, unless, in the case of (a), (b), or (c),
(i) at the time of taking such action no Event of Default or Potential Default
exists hereunder and (ii) after giving effect thereto no Event of Default or
Potential Default would exist hereunder.
13.11 Change in Fiscal Year. Borrower shall not change its Fiscal Year from
a year ending on August 31 unless required to do so by the Internal Revenue
Service, in which case Borrower agrees to such amendment of the terms Fiscal
Quarter and Fiscal Year, as used herein, as the Administrative Agent reasonably
deems necessary.
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13.12 ERISA. Borrower shall not: (a) engage in or permit any transaction
which could result in a "prohibited transaction" (as such term is defined in
Section 406 of ERISA) or in the imposition of an excise tax pursuant to Section
4975 of the Code with respect to any Borrower Benefit Plan; (b) engage in or
permit any transaction or other event which could result in a "reportable
event"( as such term is defined in Section 4043 of ERISA) for any Borrower
Pension Plan; (c) fail to make full payment when due of all amounts which, under
the provisions of any Borrower Benefit Plan, Borrower is required to pay as
contributions thereto; (d) permit to exist any "accumulated funding deficiency"
(as such term is defined in Section 302 of ERISA) as of the end of any Fiscal
Year, in excess of $25,000,000.00, whether or not waived, with respect to any
Borrower Pension Plan; (e) fail to make any payments to any Multiemployer Plan
that Borrower may be required to make under any agreement relating to such
Multiemployer Plan or any law pertaining thereto; or (f) terminate any Borrower
Pension Plan in a manner which could result in the imposition of a lien on any
property of Borrower pursuant to Section 4068 of ERISA. Borrower shall not
terminate any Borrower Pension Plan so as to result in any liability to the
PBGC.
13.13 Anti-Terrorism Law. Borrower shall not (a) conduct any business or
engage in making or receiving any contribution of funds, goods or services to or
for the benefit of any Person described in Subsection 10.24.2 above, (b) deal
in, or otherwise engage in any transaction relating to, any property or
interests in property blocked pursuant to the Executive Order or any other
Anti-Terrorism Law, or (c) engage in or conspire to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in any Anti-Terrorism Law (and
Borrower shall deliver to the Administrative Agent any certification or other
evidence requested from time to time by the Administrative Agent in its
reasonable discretion, confirming Borrower' compliance with this Section).
ARTICLE 14. INDEMNIFICATION
14.1 General; Stamp Taxes; Intangibles Tax. Borrower agrees to indemnify
and hold the Administrative Agent and each Syndication Party and their
directors, officers, employees, agents, professional advisers and
representatives ("INDEMNIFIED PARTIES") harmless from and against any and all
claims, damages, losses, liabilities, costs or expenses whatsoever which the
Administrative Agent or any other Indemnified Party may incur (or which may be
claimed against any such Indemnified Party by any Person), including attorneys'
fees incurred by any Indemnified Party, arising out of or resulting from: (a)
the material inaccuracy of any representation or warranty of or with respect to
Borrower in this Credit Agreement or the other Loan Documents; (b) the material
failure of Borrower to perform or comply with any covenant or obligation of
Borrower under this Credit Agreement or the other Loan Documents; (c) the
exercise by the Administrative Agent of any right or remedy set forth in this
Credit Agreement or the other Loan Documents; or (d) all acts or omissions of
the beneficiary of any Letter of Credit, and for such purposes, such beneficiary
shall be deemed Borrower's agent; provided that Borrower shall have no
obligation to indemnify any Indemnified Party against claims, damages, losses,
liabilities, costs or expenses to the extent that a court of competent
jurisdiction renders a final non-appealable determination that the foregoing are
solely the result of the willful misconduct or gross negligence of such
Indemnified Party. In addition, Borrower agrees to indemnify and hold the
Indemnified Parties harmless from and against any and all claims, damages,
losses, liabilities, costs or expenses whatsoever which the Administrative Agent
or any other Indemnified Party may incur (or which
54
may be claimed against any such Indemnified Party by any Person), including
attorneys' fees incurred by any Indemnified Party, arising out of or resulting
from the imposition or nonpayment by Borrower of any stamp tax, intangibles tax,
or similar tax imposed by any state, including any amounts owing by virtue of
the assertion that the property valuation used to calculate any such tax was
understated. Borrower shall have the right to assume the defense of any claim as
would give rise to Borrower's indemnification obligation under this Section with
counsel of Borrower's choosing so long as such defense is being diligently and
properly conducted and Borrower shall establish to the Indemnified Party's
satisfaction that the amount of such claims are not, and will not be, material
in comparison to the liquid and unrestricted assets of Borrower available to
respond to any award which may be granted on account of such claim. So long as
the conditions of the preceding sentence are met, Indemnified Party shall have
no further right to reimbursement of attorneys' fees incurred thereafter. The
obligation to indemnify set forth in this Section shall survive the termination
of this Credit Agreement and other covenants.
14.2 Indemnification Relating to Hazardous Substances. Borrower shall not
locate, produce, treat, transport, incorporate, discharge, emit, release,
deposit or dispose of any Hazardous Substance in, upon, under, over or from any
property owned or held by Borrower, except in accordance with all Environmental
Regulations; Borrower shall not permit any Hazardous Substance to be located,
produced, treated, transported, incorporated, discharged, emitted, released,
deposited, disposed of or to escape in, upon, under, over or from any property
owned or held by Borrower, except in accordance with Environmental Regulations;
and Borrower shall comply with all Environmental Regulations which are
applicable to such property. Borrower shall indemnify the Indemnified Parties
against, and shall reimburse the Indemnified Parties for, any and all claims,
demands, judgments, penalties, liabilities, costs, damages and expenses,
including court costs and attorneys' fees incurred by the Indemnified Parties
(prior to trial, at trial and on appeal) in any action against or involving the
Indemnified Parties, resulting from any breach of the foregoing covenants in
this Section or the covenants in Section 12.5 hereof, or from the discovery of
any Hazardous Substance in, upon, under or over, or emanating from, such
property, it being the intent of Borrower and the Indemnified Parties that the
Indemnified Parties shall have no liability or responsibility for damage or
injury to human health, the environmental or natural resources caused by, for
abatement and/or clean-up of, or otherwise with respect to, Hazardous Substances
as the result of the Administrative Agent or any Syndication Party exercising
any of its rights or remedies with respect thereto, including but not limited to
becoming the owner thereof by foreclosure or conveyance in lieu of foreclosure
of a judgment lien; provided that such indemnification as it applies to the
exercise by the Administrative Agent or any Syndication Party of its rights or
remedies with respect to the Loan Documents shall not apply to claims arising
solely with respect to Hazardous Substances brought onto such property by the
Administrative Agent or such Syndication Party while engaged in activities other
than operations substantially the same as the operations previously conducted on
such property by Borrower. The foregoing covenants of this Section shall be
deemed continuing covenants for the benefit of the Indemnified Parties, and any
successors and assigns of the Indemnified Parties, including but not limited to,
any transferee of the title of the Administrative Agent or any Syndication Party
or any subsequent owner of the property, and shall survive the satisfaction or
release of any lien, any foreclosure of any lien and/or any acquisition of title
to the property or any part thereof by the Administrative Agent or any
Syndication Party, or anyone claiming by, through or under the Administrative
Agent or any Syndication Party or Borrower by deed in lieu of foreclosure or
otherwise. Any amounts covered by the foregoing indemnification shall bear
interest from the date incurred at the
55
Default Interest Rate, shall be payable on demand, and shall be secured by the
Security Documents. The indemnification and covenants of this Section shall
survive the termination of this Credit Agreement and other covenants.
ARTICLE 15. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
15.1 Events of Default. The occurrence of any of the following events (each
an "EVENT OF DEFAULT") shall, at the option of the Administrative Agent, make
the entire Bank Debt immediately due and payable (provided, that in the case of
an Event of Default under Subsection 15.1(f) all amounts owing under the Notes
and the other Loan Documents shall automatically and immediately become due and
payable without any action by or on behalf of the Administrative Agent), and the
Administrative Agent may exercise all rights and remedies for the collection of
any amounts outstanding hereunder and take whatever action it deems necessary to
secure itself, all without notice of default, presentment or demand for payment,
protest or notice of nonpayment or dishonor, or other notices or demands of any
kind or character:
(a) Failure of Borrower to pay (i) when due, whether by
acceleration or otherwise, any principal in accordance with this Credit
Agreement or the other Loan Documents, or (ii) within five (5) days of the date
when due, whether by acceleration or otherwise, any interest or amounts other
than principal in accordance with this Credit Agreement or the other Loan
Documents.
(b) Any representation or warranty set forth in any Loan
Document, any Borrowing Notice, any financial statements or reports or
projections or forecasts, or in connection with any transaction contemplated by
any such document, shall prove in any material respect to have been false or
misleading when made or furnished by Borrower.
(c) Any default by Borrower in the performance or compliance with
the covenants, promises, conditions or provisions of Sections 12.7 (only if such
default is with respect to the last sentence of such Section), 12.10, 12.14,
12.15, 12.16, 13.1, 13.4, 13.5, 13.7, 13.10, or 13.13 of this Credit Agreement;
provided that a default under Subsection 12.14.1 hereof shall not constitute an
Event of Default nor a Potential Default if Borrower is in compliance with such
Subsection within five (5) Banking Days after the earlier of (i) the date on
which Borrower discovers that it is not in compliance with such test, or (ii)
the date by which Borrower is required by Subsections 12.2.1 or 12.2.2 hereof to
provide quarterly or year-end financial statements and/or Compliance
Certificates to the Administrative Agent.
(d) Any default by Borrower in the performance or compliance with
the covenants, promises, conditions or provisions of Sections 12.2, 12.4, 12.5,
12.6, 12.7 (except as provided in clause (c) of this Section), 12.8, 12.9,
(except as provided in Section 15.1(e)), 12.11, 12.12, 12.13, 13.3, 13.6, 13.8,
13.9, or 13.11 of this Credit Agreement, and such failure continues for fifteen
(15) days after Borrower learns of such failure to comply, whether by Borrower's
own discovery or through notice from the Administrative Agent.
(e) The failure of Borrower to pay when due, or failure to
perform or observe any other obligation or condition with respect to any of the
following obligations to any Person, beyond any period of grace under the
instrument creating such obligation: (i) any indebtedness for borrowed money or
for the deferred purchase price of property or services,
56
(ii) any obligations under leases which have or should have been characterized
as Capital Leases, or (iii) any contingent liabilities, such as guaranties, for
the obligations of others relating to indebtedness for borrowed money or for the
deferred purchase price of property or services or relating to obligations under
leases which have or should have been characterized as Capital Leases; provided
that no such failure will be deemed to be an Event of Default hereunder unless
and until the aggregate amount owing under obligations with respect to which
such failures have occurred and are continuing is at least $10,000,000.00.
(f) Borrower applies for or consents to the appointment of a
trustee or receiver for any part of its properties; any bankruptcy,
reorganization, debt arrangement, dissolution or liquidation proceeding is
commenced or consented to by Borrower; or any application for appointment of a
receiver or a trustee, or any proceeding for bankruptcy, reorganization, debt
management or liquidation is filed for or commenced against Borrower, and is not
withdrawn or dismissed within sixty (60) days thereafter.
(g) Failure of Borrower to comply with any other provision of
this Credit Agreement or the other Loan Documents not constituting an Event of
Default under any of the preceding subparagraphs of this Section 15.1, and such
failure continues for thirty (30) days after Borrower learns of such failure to
comply, whether by Borrower's own discovery or through notice from the
Administrative Agent.
(h) The entry of one or more judgments in an aggregate amount in
excess of $5,000,000.00 against Borrower not stayed, discharged or paid within
thirty (30) days after entry.
(i) The occurrence of an "Event of Default" under the Term Loan
Credit Agreement.
15.2 No Advance. The Syndication Parties shall have no obligation to make
any Advance or issue any Negotiated Letter of Credit, and the Letter of Credit
Bank shall have no obligation to issue a Committed Letter of Credit if a
Potential Default or an Event of Default shall occur and be continuing.
15.3 Rights and Remedies. In addition to the remedies set forth in Section
15.1 and 15.2 hereof, upon the occurrence of an Event of Default, the
Administrative Agent shall be entitled to exercise, subject to the provisions of
Section 16.8 hereof, all the rights and remedies provided in the Loan Documents
and by any applicable law. Each and every right or remedy granted to the
Administrative Agent pursuant to this Credit Agreement and the other Loan
Documents, or allowed the Administrative Agent by law or equity, shall be
cumulative. Failure or delay on the part of the Administrative Agent to exercise
any such right or remedy shall not operate as a waiver thereof. Any single or
partial exercise by the Administrative Agent of any such right or remedy shall
not preclude any future exercise thereof or the exercise of any other right or
remedy.
ARTICLE 16. AGENCY AGREEMENT
16.1 Funding of Syndication Interest. Each Syndication Party, severally but
not jointly, hereby irrevocably agrees to fund its Funding Share of the Advances
("ADVANCE PAYMENT") as determined pursuant to the terms and conditions contained
herein and in particular, Articles 2, 3,
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4, and 5 hereof. Each Syndication Party's interest ("SYNDICATION INTEREST") in
each Advance hereunder shall be without recourse to the Administrative Agent or
any other Syndication Party and shall not be construed as a loan from any
Syndication Party to the Administrative Agent or any other Syndication Party.
16.2 Syndication Parties' Obligations to Remit Funds. Each Syndication
Party agrees to remit its Funding Share of each Advance to the Administrative
Agent as, and within the time deadlines ("SYNDICATION PARTY ADVANCE DATE"),
required in this Credit Agreement. Unless the Administrative Agent shall have
received notice from a Syndication Party prior to the date on which such
Syndication Party is to provide funds to the Administrative Agent for an Advance
to be made by such Syndication Party that such Syndication Party will not make
available to the Administrative Agent such funds, the Administrative Agent may
assume that such Syndication Party has made such funds available to the
Administrative Agent on the date of such Advance in accordance with the terms of
this Credit Agreement and the Administrative Agent in its sole discretion may,
but shall not be obligated to, in reliance upon such assumption, make available
to Borrower on such date a corresponding amount. If and to the extent such
Syndication Party shall not have made such funds available to the Administrative
Agent by 2:00 P.M. (Central time) on the Banking Day due, such Syndication Party
agrees to repay the Administrative Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date such amount is
made available to Borrower until the Banking Day such amount is repaid to the
Administrative Agent (assuming payment is received by the Administrative Agent
at or prior to 2:00 P.M. (Central time), and until the next Banking Day if
payment is not received until after 2:00 P.M.), at the customary rate set by the
Administrative Agent for the correction of errors among banks for three (3)
Banking Days and thereafter at the Base Rate. If such Syndication Party shall
repay to the Administrative Agent such corresponding amount, such amount so
repaid shall constitute such Syndication Party's Advance for purposes of this
Credit Agreement. If such Syndication Party does not pay such corresponding
amount forthwith upon the Administrative Agent's demand therefor, the
Administrative Agent shall promptly notify Borrower, and Borrower shall
immediately pay such corresponding amount to the Administrative Agent with the
interest thereon, for each day from the date such amount is made available to
Borrower until the date such amount is repaid to the Administrative Agent, at
the rate of interest applicable at the time to such Advance at the time.
16.3 Notices to Administrative Agent. On or prior to 3:00 P.M. (Central
time) on each Banking Day, each Syndication Party will provide the
Administrative Agent with the information required by Section 5.4 hereof
regarding each Negotiated Letter of Credit issued by such Syndication Party, and
all payments or reimbursements made to such Syndication Party on account of
Negotiated Letters of Credit on such Banking Day.
16.4 Syndication Party's Failure to Remit Funds. If a Syndication Party
("DELINQUENT SYNDICATION PARTY") fails to remit (a) its Funding Share, (b) its
364-Day Bid Advance, or (c) its 3-Year Bid Advance, in full by the date and time
required (the unpaid amount of any such payment being hereinafter referred to as
the "DELINQUENT AMOUNT"), in addition to any other remedies available hereunder,
any other Syndication Party or Syndication Parties may, but shall not be
obligated to, advance the Delinquent Amount (the Syndication Party or
Syndication Parties which advance such Delinquent Amount are referred to as the
"CONTRIBUTING SYNDICATION PARTIES"), in which case (a) the Delinquent Amount
which any Contributing Syndication Party advances shall
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be treated as a loan to the Delinquent Syndication Party and shall not be
counted in determining the Individual Outstanding 364-Day Obligations or
Individual Outstanding 3-Year Obligations, as applicable, of any Contributing
Syndication Party, and (b) the Delinquent Syndication Party shall be obligated
to pay to the Administrative Agent, for the account of the Contributing
Syndication Parties, interest on the Delinquent Amount at a rate of interest
equal to the rate of interest which Borrower is obligated to pay on the
Delinquent Amount plus 200 basis points ("DELINQUENCY INTEREST") until the
Delinquent Syndication Party remits the full Delinquent Amount and remits all
Delinquency Interest to the Administrative Agent, which will distribute such
payments to the Contributing Syndication Parties (pro rata based on the amount
of the Delinquent Amount which each of them (if more than one) advanced) on the
same Banking Day as such payments are received by the Administrative Agent if
received no later than 2:00 P.M. (Central time) or the next Banking Day if
received by the Administrative Agent thereafter. In addition, the Contributing
Syndication Parties shall be entitled to share, on the same pro rata basis, and
the Administrative Agent shall pay over to them, for application against
Delinquency Interest and the Delinquent Amount, the Delinquent Syndication
Party's Payment Distribution and any fee distributions or distributions made
under Section 16.11 hereof until the Delinquent Amount and all Delinquency
Interest have been paid in full. For voting purposes the Administrative Agent
shall readjust the Individual Commitments of such Delinquent Syndication Party
and the Contributing Syndication Parties from time to time first to reflect the
advance of the Delinquent Amount by the Contributing Syndication Parties, and
then to reflect the full or partial reimbursement to the Contributing
Syndication Parties of such Delinquent Amount. As between the Delinquent
Syndication Party and the Contributing Syndication Parties, the Delinquent
Syndication Party's interest in its Notes shall be deemed to have been partially
assigned to the Contributing Syndication Parties in the amount of the Delinquent
Amount and Delinquency Interest owing to the Contributing Syndication Parties
from time to time. This Section shall also be applicable to Advances funded by
the Administrative Agent (y) under Section 4.9 hereof, in which case the
Administrative Agent, in its capacity as such, shall be deemed to be the
Contributing Syndication Party, and (z) under Section 4.11 hereof, in which case
the Administrative Agent, in its capacity as such, shall be deemed to be the
Contributing Syndication Party and the Overnight Lender shall be deemed to be
the Delinquent Syndication Party. For the purposes of calculating interest owed
by a Delinquent Syndication Party, payments received on other than a Banking Day
shall be deemed to have been received on the next Banking Day, and payments
received after 2:00 P.M. (Central time) shall be deemed to have been received on
the next Banking Day.
16.5 Agency Appointment. Each of the Syndication Parties hereby designates
and appoints the Administrative Agent to act as agent to service and collect the
Loans and its respective Notes and to take such action on behalf of such
Syndication Party with respect to the Loans and such Notes, and to execute such
powers and to perform such duties, as specifically delegated or required herein,
as well as to exercise such powers and to perform such duties as are reasonably
incident thereto, and to receive and benefit from such fees and indemnifications
as are provided for or set forth herein, until such time as a successor is
appointed and qualified to act as the Administrative Agent.
16.6 Power and Authority of the Administrative Agent. Without limiting the
generality of the power and authority vested in the Administrative Agent
pursuant to Section 16.5 hereof, the power and authority vested in the
Administrative Agent includes, but is not limited to, the following:
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16.6.1 Advice. To solicit the advice and assistance of each of the
Syndication Parties and Voting Participants concerning the administration of the
Loans and the exercise by the Administrative Agent of its various rights,
remedies, powers, and discretions with respect thereto. As to any matters not
expressly provided for by this Credit Agreement or any other Loan Document, the
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder in accordance with instructions signed by all
of the Syndication Parties or the Required Lenders, as the case may be (and
including in each such case, Voting Participants), and any action taken or
failure to act pursuant thereto shall be binding on all of the Syndication
Parties, Voting Participants, and the Administrative Agent.
16.6.2 Documents. To execute, seal, acknowledge, and deliver as the
Administrative Agent, all such instruments as may be appropriate in connection
with the administration of the Loans and the exercise by the Administrative
Agent of its various rights with respect thereto.
16.6.3 Proceedings. To initiate, prosecute, defend, and to participate
in, actions and proceedings in its name as the Administrative Agent for the
ratable benefit of the Syndication Parties.
16.6.4 Retain Professionals. To retain attorneys, accountants, and
other professionals to provide advice and professional services to the
Administrative Agent, with their fees and expenses reimbursable to the
Administrative Agent by Syndication Parties pursuant to Section 16.19 hereof.
16.6.5 Incidental Powers. To exercise powers reasonably incident to
the Administrative Agent's discharge of its duties enumerated in Section 16.7
hereof.
16.7 Duties of the Administrative Agent. The duties of the Administrative
Agent hereunder shall consist of the following:
16.7.1 Possession of Documents. To safekeep one original of each of
the Loan Documents other than the Notes (which will be in the possession of the
Syndication Party named as payee therein).
16.7.2 Distribute Payments. To receive and distribute to the
Syndication Parties payments made by Borrower pursuant to the Loan Documents, as
provided in Article 7 hereof. Unless the Administrative Agent shall have
received notice from Borrower prior to the date on which any payment is due to
any Syndication Party hereunder that Borrower will not make such payment in
full, the Administrative Agent may assume that Borrower has made such payment in
full to the Administrative Agent on such date and the Administrative Agent in
its sole discretion may, but shall not be obligated to, in reliance upon such
assumption, cause to be distributed to each Syndication Party on such due date
an amount equal to the amount then due such Syndication Party. If and to the
extent Borrower shall not have so made such payment in full to the
Administrative Agent, each Syndication Party shall repay to the Administrative
Agent forthwith on demand such amount distributed to such Syndication Party
together with interest thereon, for each day from the date such amount is
distributed to such Syndication Party until the date such Syndication Party
repays such amount to the Administrative Agent at the customary rate set by the
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Administrative Agent for the correction of errors among banks for three (3)
Banking Days and thereafter at the Base Rate.
16.7.3 Loan Administration. Subject to the provisions of Section 16.10
hereof, to, on behalf of and for the ratable benefit of all Syndication Parties,
in accordance with customary banking practices, exercise all rights, powers,
privileges, and discretion to which the Administrative Agent is entitled to
administer the Loans, including, without limitation: (a) monitor all borrowing
activity, issuances of Letters of Credit, Individual Commitment balances, and
maturity dates of all LIBO Rate Loans; (b) monitor and report Credit Agreement
and covenant compliance, and coordinate required credit actions by the
Syndication Parties (including Voting Participants where applicable); (c) manage
the process for future waivers and amendments if modifications to the Credit
Agreement are required; and (d) administer, record, and process all assignments
to be made for the current and future Syndication Parties (including the
preparation of a revised Schedule 1 to replace the previous Schedule 1).
16.7.4 Determination of Individual Lending Capacity and Individual Pro
Rata Shares. The Administrative Agent shall (a) on or before 10:00 A.M. and
again at 12:30 P.M. (Central time) on each Banking Day calculate the respective
Individual 364-Day Lending Capacity and the respective Individual 3-Year Lending
Capacity of each Syndication Party, which 10:00 A.M. calculation shall be in
effect until 12:30 P.M. of the same Banking Day and which 12:30 P.M. calculation
shall be in effect until 10:00 A.M. of the next succeeding Banking Day; and (b)
on or before 12:00 noon (Central time) on each Banking Day calculate the
respective Individual 364-Day Pro Rata Share and the respective Individual
3-Year Pro Rata Share of each Syndication Party, which calculation shall be in
effect until 12:00 noon of the next succeeding Banking Day.
16.7.5 Forwarding of Information. The Administrative Agent shall,
within a reasonable time after receipt thereof, forward to the Syndication
Parties and Voting Participants notices and reports provided to the
Administrative Agent by Borrower pursuant to Section 12.2 hereof.
16.8 Action Upon Default. Each Syndication Party agrees that upon its
learning of any facts which would constitute a Potential Default or Event of
Default, it shall promptly notify the Administrative Agent by a writing
designated as a notice of default specifying in detail the nature of such facts
and default, and the Administrative Agent shall promptly send a copy of such
notice to all other Syndication Parties. The Administrative Agent shall be
entitled to assume that no Event of Default or Potential Default has occurred or
is continuing unless an officer thereof primarily responsible for the
Administrative Agent's duties as such with respect to the Loans or primarily
responsible for the credit relationship between the Administrative Agent and
Borrower has actual knowledge of facts which would result in or constitute a
Potential Default or Event of Default, or has received written notice from
Borrower of such fact, or has received written notice of default from a
Syndication Party. In the event the Administrative Agent has obtained actual
knowledge (in the manner described above) or received written notice of the
occurrence of a Potential Default or Event of Default as provided in the
preceding sentences, the Administrative Agent may, but is not required to
exercise or refrain from exercising any rights which may be available under the
Loan Documents or at law on account of such occurrence and shall be entitled to
use its discretion with respect to exercising or refraining from exercising any
such rights, unless and until the Administrative Agent has received specific
written instruction from the Required Lenders to refrain from exercising such
rights or to take specific designated action, in which case
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it shall follow such instruction; provided that the Administrative Agent shall
not be required to take any action which will subject it to personal liability,
or which is or may be contrary to any provision of the Loan Documents or
applicable law. The Administrative Agent shall not be subject to any liability
by reason of its acting or refraining from acting pursuant to any such
instruction.
16.8.1 Indemnification as Condition to Action. Except for action
expressly required of the Administrative Agent hereunder, the Administrative
Agent shall in all cases be fully justified in failing or refusing to act
hereunder unless it shall have received further assurances (which may include
cash collateral) of the indemnification obligations of the Syndication Parties
under Section 16.20 hereof in respect of any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
16.9 Bid Agent's Appointment, Power, Authority, Duties and Resignation or
Removal. Each of the Syndication Parties hereby designates and appoints the Bid
Agent to act as such and to take such action on behalf of such Syndication Party
with respect to the acceptance and processing of Bid Requests and Bids as
provided herein, as well as to exercise such powers and to perform such duties
as are reasonably incident thereto, and to receive and benefit from such fees
and indemnifications as are provided for or set forth herein, until such time as
a successor is appointed and qualified to act as the Bid Agent. The Bid Agent
shall have such duties as specified in this Credit Agreement. The resignation,
removal, and designation of a successor for, the Bid Agent shall be in
accordance with the procedures set forth in Section 16.23 hereof with respect to
the Administrative Agent.
16.10 Consent Required for Certain Actions. Notwithstanding the fact that
this Credit Agreement may otherwise provide that the Administrative Agent may
act at its discretion, the Administrative Agent may not take any of the
following actions (nor may the Syndication Parties take the action described in
Subsection 16.10.1(a)) with respect to, or under, the Loan Documents without the
prior written consent, given after notification by the Administrative Agent of
its intention to take any such action (or notification by such Syndication
Parties as are proposing the action described in Subsection 16.10.1(a) of their
intention to do so), of:
16.10.1 Unanimous. Each of the Syndication Parties and Voting
Participants before:
(a) Amending the definition of Required Lenders as set forth
herein or this Subsection 16.10.1; or
(b) Amending Section 7.6 hereof.
16.10.2 Facility Lenders.
(a) Each of the Syndication Parties and Voting Participants with
Individual 364-Day Commitments before:
(i) Agreeing to an increase in the 364-Day Commitment, or
any Syndication Party's share thereof, or an extension of the 364-Day
Maturity Date; or
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(ii) Agreeing to a reduction in the amount, or to a delay in
the due date, of any payment by Borrower of interest, principal, or
fees with respect to the 364-Day Facility; provided, however, this
restriction shall not apply to a delay in payment granted by the
Administrative Agent in the ordinary course of administration of the
Loans and the exercise of reasonable judgment, so long as such payment
delay does not exceed five (5) days.
(b) Each of the Syndication Parties and Voting Participants with
Individual 3-Year Commitments before:
(i) Agreeing to an increase in the 3-Year Commitment, or any
Syndication Party's share thereof, or an extension of the 3-Year
Maturity Date; or
(ii) Agreeing to a reduction in the amount, or to a delay in
the due date, of any payment by Borrower of interest, principal, or
fees with respect to the 3-Year Facility; provided, however, this
restriction shall not apply to a delay in payment granted by the
Administrative Agent in the ordinary course of administration of the
Loans and the exercise of reasonable judgment, so long as such payment
delay does not exceed five (5) days.
16.10.3 Required Lenders. The Required Lenders before:
(a) Consenting to any action, amendment, or granting any waiver
not covered in Subsections 16.10.1 or 16.10.2; or
(b) Agreeing to amend Article 16 of this Credit Agreement (other
than Subsections 16.10.1 or 16.10.2).
16.10.4 Action Without Vote. Notwithstanding any other provisions of
this Section, the Administrative Agent or, with respect to Subsection 16.10.4(b)
hereof, the Letter of Credit Bank and the Administrative Agent, may take the
following actions without obtaining the consent of the Syndication Parties or
the Voting Participants:
(a) Determining (i) whether the conditions to an Advance have
been met, and (ii) the amount of such Advance;
(b) Determining (i) whether the conditions and procedures as set
forth in Article 5 hereof for issuance of a Committed Letter of Credit have been
properly satisfied and (ii) the amount of such Letter of Credit;
(c) Determining whether the Bid Advance conditions and procedures
as set forth in Article 4 hereof have been properly satisfied.
16.10.5 Voting Participants. Under the circumstances set forth in
Section 16.29 hereof, each Voting Participant shall be accorded voting rights as
though such Person was a Syndication Party, and in such case the voting rights
of the Syndication Party from which such Voting Participant acquired its
participation interest shall be reduced accordingly.
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If no written consent or denial is received from a Syndication Party or a Voting
Participant within five (5) Banking Days after written notice of any proposed
action as described in this Section is delivered to such Syndication Party or
Voting Participant by the Administrative Agent, such Syndication Party or Voting
Participant shall be conclusively deemed to have consented thereto for the
purposes of this Section.
16.11 Distribution of Principal and Interest. The Administrative Agent will
receive and accept all payments (including prepayments) of principal and
interest made by Borrower on the Loans and the Notes and will hold all such
payments in trust for the benefit of all appropriate present and future
Syndication Parties, and, if requested in writing by the Required Lenders, in an
account segregated from the Administrative Agent's other funds and accounts
("PAYMENT ACCOUNT"). After the receipt by the Administrative Agent of any
payment representing interest or principal on the Loans, the Administrative
Agent shall remit to the appropriate (depending upon whether the payment was
made with respect to the 364-Day Facility and/or the 3-Year Facility)
Syndication Party its share of such payment as provided in Article 7 hereof,
("PAYMENT DISTRIBUTION") no later than 3:00 P.M. (Central time) on the same
Banking Day as such payment is received by the Administrative Agent if received
no later than 1:00 P.M. (Central time) or the next Banking Day if received by
the Administrative Agent thereafter. Any Syndication Party's rights to its
Payment Distribution shall be subject to the rights of any Contributing
Syndication Parties to such amounts as set forth in Section 16.4 hereof.
16.12 Distribution of Certain Amounts. The Administrative Agent shall (a)
receive and hold in trust for the benefit of all present and future Syndication
Parties, in the Payment Account and, if requested in writing by the Required
Lenders, segregated from the Administrative Agent's other funds and accounts and
(b) shall remit to the Syndication Parties, as indicated, the amounts described
below:
16.12.1 Funding Losses. To each Syndication Party the amount of any
Funding Losses paid by Borrower to the Administrative Agent in connection with a
prepayment of any portion of a LIBO Rate Loan or a Bid Loan, in accordance with
the Funding Loss Notice such Syndication Party provided to the Administrative
Agent, no later than 3:00 P.M. (Central time) on the same Banking Day that
payment of such Funding Losses is received by the Administrative Agent, if
received no later than 1:00 P.M. (Central time), or the next Banking Day if
received by the Administrative Agent thereafter.
16.12.2 Fees. To each Syndication Party its share of any 364-Day
Facility Fees and 3-Year Facility Fees paid by Borrower to the Administrative
Agent, no later than 3:00 P.M. (Central time) on the same Banking Day that
payment of such fees is received by the Administrative Agent, if received no
later than 1:00 P.M. (Central time), or the next Banking Day if received by the
Administrative Agent thereafter.
16.13 Possession of Loan Documents. The Loan Documents (other than the
Notes) shall be held by the Administrative Agent in its name, for the ratable
benefit of itself and the other Syndication Parties without preference or
priority.
16.14 Collateral Application. The Syndication Parties shall have no
interest in any other loans made to Borrower by any other Syndication Party
other than the Loans, or in any property taken as security for any other loan or
loans made to Borrower by any other Syndication Party, or
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in any property now or hereinafter in the possession or control of any other
Syndication Party, which may be or become security for the Loans solely by
reason of the provisions of a security instrument that would cause such security
instrument and the property covered thereby to secure generally all indebtedness
owing by Borrower to such other Syndication Party. Notwithstanding the
foregoing, to the extent such other Syndication Party applies such funds or the
proceeds of such property to reduction of one or more of the Loans, such other
Syndication Party shall share such funds or proceeds with all Syndication
Parties according to their respective Individual Commitments. In the event that
any Syndication Party shall obtain payment, whether partial or full, from any
source in respect of one or more of the Loans, including without limitation
payment by reason of the exercise of a right of offset, banker's lien, general
lien, or counterclaim, such Syndication Party shall promptly make such
adjustments (which may include payment in cash or the purchase of further
Syndication Interests or participations in the Loans) to the end that such
excess payment shall be shared with all other Syndication Parties in accordance
with their respective Individual Commitments. Notwithstanding any of the
foregoing provisions of this Section or Article 9 hereof, no Syndication Party
other than CoBank shall have any right to, or to the proceeds of, or any right
to the application to any amount owing to such Syndication Party hereunder of
any the proceeds of, any Bank Equity Interests issued to Borrower by CoBank or
on account of any statutory lien held by CoBank on such Bank Equity Interests.
16.15 Amounts Required to be Returned. If the Administrative Agent makes
any payment to a Syndication Party in anticipation of the receipt of final funds
from Borrower, and such funds are not received from Borrower, or if excess funds
are paid by the Administrative Agent to any Syndication Party as the result of a
miscalculation by the Administrative Agent, then such Syndication Party shall,
on demand of the Administrative Agent, forthwith return to the Administrative
Agent any such amounts, plus interest thereon (from the day such amounts were
transferred by the Administrative Agent to the Syndication Party to, but not
including, the day such amounts are returned by Syndication Party) at a rate per
annum equal to the customary rate set by the Administrative Agent for the
correction of errors among banks for three (3) Banking Days and thereafter at
the Base Rate. If the Administrative Agent is required at any time to return to
Borrower or a trustee, receiver, liquidator, custodian, or similar official any
portion of the payments made by Borrower to the Administrative Agent, whether
pursuant to any bankruptcy or insolvency law or otherwise, then each Syndication
Party shall, on demand of the Administrative Agent, forthwith return to the
Administrative Agent any such payments transferred to such Syndication Party by
the Administrative Agent but without interest or penalty (unless the
Administrative Agent is required to pay interest or penalty on such amounts to
the person recovering such payments).
16.16 Reports and Information to Syndication Parties. The Administrative
Agent shall use reasonable efforts to provide to the Syndication Parties, as
soon as practicable after actual knowledge thereof is acquired by an officer
thereof primarily responsible for the Administrative Agent's duties as such with
respect to the Loans or primarily responsible for the credit relationship
between the Administrative Agent and Borrower, any material factual information
which has a material adverse effect on the creditworthiness of Borrower, and
Borrower hereby authorizes such disclosure by the Administrative Agent to the
Syndication Parties (and by the Syndication Parties to any of their
participants). Failure of the Administrative Agent to provide the information
referred to in this Section or in Subsection 16.7.5 hereof shall not result in
any liability upon, or right to make a claim against, the Administrative Agent
except where a court of competent
65
jurisdiction renders a final non-appealable determination that such failure is a
result of the willful misconduct or gross negligence of the Administrative
Agent. Syndication Parties acknowledge and agree that all information and
reports received pursuant to this Credit Agreement will be received in
confidence in connection with their Syndication Interest, and that such
information and reports constitute confidential information and shall not,
without the prior written consent of the Administrative Agent or Borrower (which
consent will not be unreasonably withheld, provided that Borrower shall have no
consent rights upon the occurrence and during the continuance of an Event of
Default), be (a) disclosed to any third party (other than the Administrative
Agent, another Syndication Party or potential Syndication Party, or a
participant or potential participant in the interest of a Syndication Party,
which disclosure is hereby approved by Borrower), except pursuant to appropriate
legal or regulatory process, or (b) used by the Syndication Party except in
connection with the Loans and its Syndication Interest.
16.17 Standard of Care. The Administrative Agent shall not be liable to
Syndication Parties for any error in judgment or for any action taken or not
taken by the Administrative Agent or its agents, except to the extent that a
court of competent jurisdiction renders a final non-appealable determination
that any of the foregoing resulted from the gross negligence or willful
misconduct of the Administrative Agent. Subject to the preceding sentence, the
Administrative Agent will exercise the same care in administering the Loans and
the Loan Documents as it exercises for similar loans which it holds for its own
account and risk, and the Administrative Agent shall not have any further
responsibility to the Syndication Parties. Without limiting the foregoing, the
Administrative Agent may rely on the advice of counsel concerning legal matters
and on any written document it believes to be genuine and correct and to have
been signed or sent by the proper Person or Persons.
16.18 No Trust Relationship. Neither the execution of this Credit
Agreement, nor the sharing in the Loans, nor the holding of the Loan Documents
in its name by the Administrative Agent, nor the management and administration
of the Loans and Loan Documents by the Administrative Agent (including the
obligation to hold certain payments and proceeds in the Payment Account in trust
for the Syndication Parties), nor any other right, duty or obligation of the
Administrative Agent under or pursuant to this Credit Agreement is intended to
be or create, and none of the foregoing shall be construed to be or create, any
express, implied or constructive trust relationship between the Administrative
Agent and any Syndication Party. Each Syndication Party hereby agrees and
stipulates that the Administrative Agent is not acting as trustee for such
Syndication Party with respect to the Loans, this Credit Agreement, or any
aspect of either, or in any other respect.
16.19 Sharing of Costs and Expenses. To the extent not paid by Borrower,
each Syndication Party will promptly upon demand reimburse the Administrative
Agent for its proportionate share (based on the ratio of the total of its
Individual Commitments to the sum of the 364-Day Commitment and the 3-Year
Commitment), for all reasonable costs, disbursements, and expenses incurred by
the Administrative Agent on or after the date of this Credit Agreement for
legal, accounting, consulting, and other services rendered to the Administrative
Agent in its role as the Administrative Agent in the administration of the
Loans, interpreting the Loan Documents, and protecting, enforcing, or otherwise
exercising any rights, both before and after default by Borrower under the Loan
Documents, and including, without limitation, all costs and expenses incurred in
connection with any bankruptcy proceedings and the exercise of any remedies with
66
respect to the Cash Collateral Account or otherwise; provided, however, that the
costs and expenses to be shared in accordance with this Section shall not
include any costs or expenses incurred by the Administrative Agent solely as a
Syndication Party in connection with the Loans, nor to the Administrative
Agent's internal costs and expenses.
16.20 Syndication Parties' Indemnification of the Administrative Agent and
Bid Agent. Each of the Syndication Parties agree to indemnify the Administrative
Agent, including any Successor Agent, and the Bid Agent, and their respective
directors, officers, employees, agents, professional advisers and
representatives ("INDEMNIFIED AGENCY PARTIES"), (to the extent not reimbursed by
Borrower, and without in any way limiting the obligation of Borrower to do so),
ratably (based on the ratio of the total of its Individual Commitments to the
sum of the 364-Day Commitment and the 3-Year Commitment), from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever which
may at any time (including, without limitation, at any time following the
payment of the Loans and/or the expiration or termination of this Credit
Agreement) be imposed on, incurred by or asserted against the Administrative
Agent or the Bid Agent (or any of the Indemnified Agency Parties while acting
for the Administrative Agent or for any Successor Agent) in any way relating to
or arising out of this Credit Agreement or the Loan Documents, or the
performance of the duties of the Administrative Agent or the Bid Agent hereunder
or thereunder or any action taken or omitted while acting in the capacity of the
Administrative Agent or the Bid Agent under or in connection with any of the
foregoing; provided that the Syndication Parties shall not be liable for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of an
Indemnified Agency Party to the extent that a court of competent jurisdiction
renders a final non-appealable determination that the foregoing are the result
of the willful misconduct or gross negligence of such Indemnified Agency Party.
The agreements and obligations in this Section shall survive the payment of the
Loans and the expiration or termination of this Credit Agreement.
16.21 Books and Records. The Administrative Agent shall maintain such books
of account and records relating to the Loans as it maintains with respect to
other loans of similar type and amount, and which shall clearly and accurately
reflect the Syndication Interest of each Syndication Party. The Syndication
Parties, or their agents, may inspect such books of account and records at all
reasonable times during the Administrative Agent's regular business hours.
16.22 Administrative Agent Fee. The Administrative Agent and any Successor
Agent shall be entitled to such fee as agreed upon between Borrower and the
Administrative Agent for acting as the Administrative Agent.
16.23 The Administrative Agent's Resignation or Removal. The Administrative
Agent may resign at any time by giving at least sixty (60) days' prior written
notice of its intention to do so to each of the Syndication Parties and
Borrower. After the receipt of such notice, the Required Lenders shall appoint a
successor ("SUCCESSOR AGENT"). If (a) no Successor Agent shall have been so
appointed which is either (i) a Syndication Party, or (ii) if not a Syndication
Party, which is a Person approved by Borrower, such approval not to be
unreasonably withheld (provided that Borrower shall have no approval rights upon
the occurrence and during the continuance of an Event of Default), or (b) if
such Successor Agent has not accepted such appointment, in either case within
forty-five (45) days after the retiring Administrative Agent's giving of such
notice of resignation, then the retiring Administrative Agent may, after
consulting with, but without
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obtaining the approval of, Borrower, appoint a Successor Agent which shall be a
bank or a trust company organized under the laws of the United States of America
or any state thereof and having a combined capital, surplus and undivided profit
of at least $250,000,000. Any Administrative Agent may be removed upon the
written demand of the Required Lenders, which demand shall also appoint a
Successor Agent. Upon the appointment of a Successor Agent hereunder, (a) the
term "Administrative Agent" shall for all purposes of this Credit Agreement
thereafter mean such Successor Agent, and (b) the Successor Agent shall notify
Borrower of its identity and of the information called for in Subsection 17.4.2
hereof. After any retiring Administrative Agent's resignation hereunder as the
Administrative Agent, or the removal hereunder of any Administrative Agent, the
provisions of this Credit Agreement shall continue to inure to the benefit of
such Administrative Agent as to any actions taken or omitted to be taken by it
while it was the Administrative Agent under this Credit Agreement.
16.24 Representations and Warranties of All Parties. The Administrative
Agent, the Bid Agent, and each Syndication Party represents and warrants that:
(a) the execution and delivery of, and performance of its obligations under,
this Credit Agreement is within its power and has been duly authorized by all
necessary corporate and other action by it; (b) this Credit Agreement is in
compliance with all applicable laws and regulations promulgated under such laws
and does not conflict with nor constitute a breach of its charter or by-laws nor
any agreements by which it is bound, and does not violate any judgment, decree
or governmental or administrative order, rule or regulation applicable to it;
(c) no approval, authorization or other action by, or declaration to or filing
with, any governmental or administrative authority or any other Person is
required to be obtained or made by it in connection with the execution and
delivery of, and performance of its obligations under, this Credit Agreement;
and (d) this Credit Agreement has been duly executed by it, and constitutes the
legal, valid, and binding obligation of such Person, enforceable in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the rights of creditors generally and general equitable principles
(regardless of whether such enforceability is considered in a proceeding at law
or in equity). Each Syndication Party that is a state or national bank
represents and warrants that the act of entering into and performing its
obligations under this Credit Agreement has been approved by its board of
directors or its loan committee and such action was duly noted in the written
minutes of the meeting of such board or committee, and that it will, upon the
Administrative Agent's written request, furnish the Administrative Agent with a
certified copy of such minutes or an excerpt therefrom reflecting such approval.
16.25 Representations and Warranties of CoBank. Except as expressly set
forth in Section 16.24 hereof, CoBank, in its role as a Syndication Party and as
the Administrative Agent, makes no express or implied representation or warranty
and assumes no responsibilities with respect to the due authorization,
execution, or delivery of the Loan Documents; the accuracy of any information,
statements, or certificates provided by Borrower, the legality, validity, or
enforceability of the Loan Documents; the filing or recording of any document;
the collectibility of the Loans; the performance by Borrower of any of its
obligations under the Loan Documents; or the financial condition or solvency of
Borrower or any other party obligated with respect to the Loans or the Loan
Documents.
16.26 Syndication Parties' Independent Credit Analysis. Each Syndication
Party acknowledges receipt of true and correct copies of all Loan Documents
(other than any Note
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payable to another Syndication Party) from the Administrative Agent. Each
Syndication Party agrees and represents that it has relied upon its independent
review (a) of the Loan Documents, and (b) any information independently acquired
by such Syndication Party from Borrower or otherwise in making its decision to
acquire an interest in the Loans independently and without reliance on the
Administrative Agent. Each Syndication Party represents and warrants that it has
obtained such information as it deems necessary (including any information such
Syndication Party independently obtained from Borrower or others) prior to
making its decision to acquire an interest in the Loans. Each Syndication Party
further agrees and represents that it has made its own independent analysis and
appraisal of and investigation into each Borrower's authority, business,
operations, financial and other condition, creditworthiness, and ability to
perform its obligations under the Loan Documents and has relied on such review
in making its decision to acquire an interest in the Loans. Each Syndication
Party agrees that it will continue to rely solely upon its independent review of
the facts and circumstances related to Borrower, and without reliance upon the
Administrative Agent, in making future decisions with respect to all matters
under or in connection with the Loan Documents and the Loans. The Administrative
Agent assumes no responsibility for the financial condition of Borrower or for
the performance of Borrower's obligations under the Loan Documents. Except as
otherwise expressly provided herein, no Syndication Party shall have any duty or
responsibility to furnish to any other Syndication Parties any credit or other
information concerning Borrower which may come into its possession.
16.27 No Joint Venture or Partnership. Neither the execution of this Credit
Agreement, the sharing in the Loans, nor any agreement to share in payments or
losses arising as a result of this transaction is intended to be or to create,
and the foregoing shall not be construed to be, any partnership, joint venture
or other joint enterprise between the Administrative Agent and any Syndication
Party, nor between or among any of the Syndication Parties.
16.28 Purchase for Own Account; Restrictions on Transfer; Participations.
Each Syndication Party represents that it has acquired and is retaining its
interest in the Loans for its own account in the ordinary course of its banking
or financing business and not with a view toward the sale, distribution, further
participation, or transfer thereof. Each Syndication Party other than CoBank
agrees that it will not sell, assign, convey or otherwise dispose of
("TRANSFER") to any Person, or create or permit to exist any lien or security
interest on all or any part of its interest in the Loans, without the prior
written consent of the Administrative Agent and Borrower (which consent will not
be unreasonably withheld, provided that Borrower shall have no approval rights
upon the occurrence and during the continuance of an Event of Default); provided
that: (a) any such Transfer (except a Transfer to another Syndication Party or a
Transfer by CoBank) must be in a minimum amount of $5,000,000.00; (b) each
Syndication Party must maintain an Individual Commitment of no less than
$5,000,000.00, unless it Transfers its entire Syndication Interest; (c) the
transferee must execute an agreement substantially in the form of Exhibit 16.28
hereto ("SYNDICATION ACQUISITION AGREEMENT") and assume all of the transferor's
obligations hereunder and execute such documents as the Administrative Agent may
reasonably require; and (d) the Syndication Party making such Transfer must pay,
or cause the transferee to pay, the Administrative Agent an assignment fee of
$3,500.00. Any Syndication Party may participate any part of its interest in the
Loans to any Person with the prior written consent of the Administrative Agent
and Borrower (which consent will not be unreasonably withheld, provided that
Borrower shall have no approval rights upon the occurrence and during the
continuance of an Event of
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Default), provided that no such consent shall be required where the participant
is a Person at least fifty percent (50%) the equity interest in which is owned
by such Syndication Party or which owns at least fifty percent (50%) of the
equity interest in such Syndication Party or at least fifty percent (50%) of the
equity interest of which is owned by the same Person which owns at least fifty
percent (50%) of the equity interest of such Syndication Party, and each
Syndication Party understands and agrees that in the event of any such
participation: (x) its obligations hereunder will not change on account of such
participation; (y) the participant will have no rights under this Credit
Agreement, including, without limitation, voting rights (except as provided in
Section 16.29 hereof with respect to Voting Participants) or the right to
receive payments or distributions; and (z) the Administrative Agent shall
continue to deal directly with the Syndication Party with respect to the Loans
(including with respect to voting rights, except as provided in Section 16.29
hereof with respect to Voting Participants) as though no participation had been
granted and will not be obligated to deal directly with any participant (except
as provided in Section 16.29 hereof with respect to Voting Participants).
Notwithstanding any provision contained herein to the contrary, any Syndication
Party may at any time pledge or assign all or any portion of its interest in the
Loans to any Federal Reserve Bank or the Federal Farm Credit Bank in accordance
with applicable law. CoBank reserves the right to sell participations on a
non-patronage basis.
16.29 Certain Participants' Voting Rights. Any Farm Credit System
Institution which (a) has acquired and, at any time of determination maintains,
a participation interest in the minimum aggregate amount of $5,000,000.00 in a
particular Syndication Party's Syndication Interest; and (b) has been designated
in writing by such Syndication Party to the Administrative Agent as having such
entitlement (such designation to include for such participant, its name, contact
information, and dollar participation amount) (each a "VOTING PARTICIPANT"),
shall be entitled to vote (and such Syndication Party's voting rights shall be
correspondingly reduced), on a dollar basis, as if such Voting Participant were
a Syndication Party, on any matter requiring or allowing a Syndication Party, to
provide or withhold its consent, or to otherwise vote on any proposed action.
The voting rights of any Syndication Party so designating a Voting Participant
shall be reduced by an equivalent dollar amount.
16.30 Method of Making Payments. Payment and transfer of all amounts owing
or to be paid or remitted hereunder, including, without limitation, payment of
the Advance Payment by Syndication Parties, and distribution of principal or
interest payments or fees or other amounts by the Administrative Agent, shall be
by wire transfer in accordance with the instructions contained on Exhibit 16.30
hereto ("WIRE INSTRUCTIONS").
16.31 Events of Syndication Default/Remedies.
16.31.1 Syndication Party Default. Any of the following occurrences,
failures or acts, with respect to any of the Syndication Parties shall
constitute an "EVENT OF SYNDICATION DEFAULT" hereunder by such party: (a) if any
representation or warranty made by such party in this Credit Agreement shall be
found to have been untrue in any material respect; (b) if such party fails to
make any distributions or payments required under this Credit Agreement within
five (5) days of the date required; (c) if such party breaches any other
covenant, agreement, or provision of this Credit Agreement which breach shall
have continued uncured for a period of thirty (30) consecutive days after such
breach first occurs, unless a shorter period is required to avoid prejudicing
the rights and position of the other Syndication Parties; (d) if any agency
having
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supervisory authority over such party, or any creditors thereof, shall file a
petition to reorganize or liquidate such party pursuant to any applicable
federal or state law or regulation and such petition shall not be discharged or
denied within fifteen (15) days after the date on which it is filed; (e) if by
the order of a court of competent jurisdiction or by any appropriate supervisory
agency, a receiver, trustee or liquidator shall be appointed for such party or
for all or any material part of its property or if such party shall be declared
insolvent; or (f) if such party shall be dissolved, or shall make an assignment
for the benefit of its creditors, or shall file a petition seeking to take
advantage of any debtors' act, including the bankruptcy act, or shall admit in
writing its inability to pay its debts generally as they become due, or shall
consent to the appointment of a receiver or liquidator of all or any material
part of its property.
16.31.2 Remedies. Upon the occurrence of an Event of Syndication
Default, the non-defaulting Syndication Parties, acting by, or through the
direction of, a simple majority (determined based on the ratio of (a) the total
of their Individual Commitments to (b)(i) the sum of the 364-Day Commitment and
the 3-Year Commitment less (ii) the Individual Commitments of the defaulting
Syndication Party) of the non-defaulting Syndication Parties, may, in addition
to any other remedy specifically set forth in this Credit Agreement, have and
exercise any and all remedies available generally at law or equity, including
the right to damages and to specific performance.
16.32 Withholding Taxes. Each Syndication Party represents that under the
applicable law in effect as of the date it becomes a Syndication Party, it is
entitled to receive any payments to be made to it hereunder without the
withholding of any tax and will furnish to the Administrative Agent and to
Borrower such forms, certifications, statements and other documents as the
Administrative Agent or Borrower may request from time to time to evidence such
Syndication Party's exemption from the withholding of any tax imposed by any
jurisdiction or to enable the Administrative Agent or Borrower, as the case may
be, to comply with any applicable laws or regulations relating thereto. Without
limiting the effect of the foregoing, each Syndication Party that was not
created or organized under the laws of the United States of America or any state
or other political subdivision thereof ("NON-US LENDER"), shall, on the Closing
Date, or upon its becoming a Syndication Party (for Persons that were not
Syndication Parties on the Closing Date), furnish to the Administrative Agent
and Borrower two original copies of IRS Form W-8BEN, W-8ECI, 4224, or Form 1001,
as appropriate, (or any successor forms), or such other forms, certifications,
statements of exemption, or documents as may be required by the IRS or by the
Administrative Agent or Borrower, in their reasonable discretion, duly executed
and completed by such Syndication Party, to establish, and as evidence of, such
Syndication Party's exemption from the withholding of United States tax with
respect to any payments to such Syndication Party of interest or fees payable
under any of the Loan documents. Further, each Non-US Lender hereby agrees, from
time to time after the initial delivery by such Syndication Party of such forms,
whenever a lapse in time or change in circumstances renders such forms,
certificates or other evidence so delivered obsolete or inaccurate in any
material respect, that such Syndication Party shall promptly (a) deliver to the
Administrative Agent and to Borrower two original copies of renewals, amendments
or additional or successor forms, properly completed and duly executed by such
Syndication Party, together with any other certificate or statement of exemption
required in order to confirm or establish that such Syndication Party is not
subject to United States withholding tax with respect to payments to such
Syndication Party under the Loan Documents or (b) notify the Administrative
Agent and Borrower of its inability to deliver any such forms,
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certificates or other evidence. Notwithstanding anything herein to the contrary,
Borrower shall not be obligated to make any payments hereunder to such
Syndication Party until such Syndication Party shall have furnished to the
Administrative Agent and Borrower each requested form, certification, statement
or document.
16.33 Replacement of Holdout Lender. If any action to be taken by the
Syndication Parties or the Administrative Agent hereunder requires the unanimous
consent, authorization, or agreement of all Syndication Parties, and a
Syndication Party ("HOLDOUT LENDER") fails to give its consent, authorization,
or agreement, then the Administrative Agent, upon at least five (5) Banking Days
prior irrevocable notice to the Holdout Lender, may permanently replace the
Holdout Lender with one or more substitute Syndication Parties (each, a
"REPLACEMENT LENDER"), and the Holdout Lender shall have no right to refuse to
be replaced hereunder. Such notice to replace the Holdout Lender shall specify
an effective date for such replacement, which date shall not be later than
fifteen (15) Banking Days after the date such notice is given. Prior to the
effective date of such replacement, the Holdout Lender and each Replacement
Lender shall execute and deliver a Syndication Acquisition Agreement, subject
only to the Holdout Lender being repaid its full share of the outstanding Bank
Debt without any premium, discount, or penalty of any kind whatsoever. If the
Holdout Lender shall refuse or fail to execute and deliver any such Syndication
Acquisition Agreement prior to the effective date of such replacement, the
Holdout Lender shall be deemed to have executed and delivered such Syndication
Acquisition Agreement. The replacement of any Holdout Lender shall be made in
accordance with the terms of Section 16.28 hereof. Until such time as the
Replacement Lenders shall have acquired all of the Syndication Interest of the
Holdout Lender hereunder and under the other Loan Documents, the Holdout Lender
shall remain obligated to provide the Holdout Lender's Funding Share of
Advances.
16.34 Amendments Concerning Agency Function. Neither the Administrative
Agent nor the Bid Agent shall be bound by any waiver, amendment, supplement or
modification of this Credit Agreement or any other Loan Document which affects
its duties hereunder or thereunder unless it shall have given its prior written
consent thereto.
16.35 Further Assurances. The Administrative Agent and each Syndication
Party agree to take whatever steps and execute such documents as may be
reasonable and necessary to implement this Article 16 and to carry out fully the
intent thereof.
ARTICLE 17. MISCELLANEOUS
17.1 Costs and Expenses. To the extent permitted by law, Borrower agrees to
pay to the Administrative Agent and the Syndication Parties, on demand, all
out-of-pocket costs and expenses (a) incurred by the Administrative Agent
(including, without limitation, the reasonable fees and expenses of counsel
retained by the Administrative Agent, and including fees and expenses incurred
for consulting, appraisal, engineering, inspection, and environmental assessment
services) in connection with the preparation, negotiation, and execution of the
Loan Documents and the transactions contemplated thereby, and processing the
Borrowing Notices; and (b) incurred by the Administrative Agent or any
Syndication Party (including, without limitation, the reasonable fees and
expenses of counsel retained by the Administrative Agent and the Syndication
Parties) in connection with the enforcement or protection of the Syndication
Parties' rights under the Loan Documents upon the occurrence of an Event of
Default or upon the
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commencement of an action by Borrower against the Administrative Agent or any
Syndication Party, including without limitation collection of the Loan
(regardless of whether such enforcement or collection is by court action or
otherwise). Borrower shall not be obligated to pay the costs or expenses of any
Person whose only interest in the Loan is as a holder of a participation
interest. In addition, To the extent permitted by law, Borrower agrees to pay to
the Bid Agent, on demand, all out-of-pocket costs and expenses incurred by the
Bid Agent in connection with the processing of Bid Rate Loans, including the Bid
Requests, Bids, Bid Results Notices, and Bid Selection Notices and the
procedures related thereto.
17.2 Service of Process and Consent to Jurisdiction. Borrower and each
Syndication Party hereby agrees that any litigation with respect to this Credit
Agreement or to enforce any judgment obtained against such Person for breach of
this Credit Agreement or under the Notes or other Loan Documents may be brought
in the courts of the State of Colorado and in the United States District Court
for the District of Colorado (if applicable subject matter jurisdictional
requirements are present), as the Administrative Agent may elect; and, by
execution and delivery of this Credit Agreement, Borrower and each Syndication
Party irrevocably submits to such jurisdiction. With respect to litigation
concerning this Credit Agreement or under the Notes or other Loan Documents
within the jurisdiction of the courts of the State of Colorado or the United
States District Court for the District of Colorado, Borrower and each
Syndication Party hereby irrevocably appoints, until six (6) months after the
expiration of the 3-Year Maturity Date (as it may be extended at anytime), The
Corporation Company, or such other Person as it may designate to the
Administrative Agent, in each case with offices in Denver, Colorado and
otherwise reasonably acceptable to the Administrative Agent to serve as the
agent of Borrower or such Syndication Party to receive for and on its behalf at
such agent's Denver, Colorado office, service of process, which service may be
made by mailing a copy of any summons or other legal process to such Person in
care of such agent. Borrower and each Syndication Party agrees that it shall
maintain a duly appointed agent in Colorado for service of summons and other
legal process as long as it remains obligated under this Credit Agreement and
shall keep the Administrative Agent advised in writing of the identity and
location of such agent. The receipt by such agent and/or by Borrower or such
Syndication Party, as applicable, of such summons or other legal process in any
such litigation shall be deemed personal service and acceptance by Borrower or
such Syndication Party, as applicable, for all purposes of such litigation.
17.3 Jury Waiver. IT IS MUTUALLY AGREED BY AND BETWEEN THE ADMINISTRATIVE
AGENT, THE BID AGENT, EACH SYNDICATION PARTY, AND BORROWER THAT THEY EACH WAIVE
TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM BROUGHT BY ANY OF THEM
AGAINST ANY OTHER PARTY ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS CREDIT AGREEMENT, THE NOTES, OR THE OTHER LOAN DOCUMENTS.
17.4 Notices. All notices, requests and demands required or permitted under
the terms of this Credit Agreement shall be in writing and (a) shall be
addressed as set forth below or at such other address as either party shall
designate in writing, (b) shall be deemed to have been given or made: (i) if
delivered personally, immediately upon delivery, (ii) if by telex, telegram or
facsimile transmission, immediately upon sending and upon confirmation of
receipt, (iii) if by nationally recognized overnight courier service with
instructions to deliver the next Banking Day, one (1)
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Banking Day after sending, and (iv) if by United States Mail, certified mail,
return receipt requested, five (5) days after mailing.
17.4.1 Borrower:
Cenex Harvest States Cooperatives
5500 Cenex Drive
Inver Grove Heights, Minnesota 55077
FAX: (612) 451-4554
Attention: Vice President Finance
e-mail address: jschmitz@chsco-ops.com
with a copy to:
Cenex Harvest States Cooperatives
5500 Cenex Drive
Inver Grove Heights, Minnesota 55077
FAX: (612) 451-4554
Attention: General Counsel
e-mail address: dkastelic@chsco-ops.com
17.4.2 Administrative Agent:
CoBank, ACB
5500 South Quebec Street
Greenwood Village, Colorado 80111
FAX: (303) 694-5830
Attention: Administrative Agent
e-mail address: abahr@cobank.com
17.4.3 Bid Agent:
CoBank, ACB
5500 South Quebec Street
Greenwood Village, Colorado 80111
FAX: (303) 740-4100
Attention: Bid Agent
17.4.4 Syndication Parties:
See signature pages hereto.
17.5 Liability of Administrative Agent and Bid Agent. Neither the
Administrative Agent nor the Bid Agent shall have any liabilities or
responsibilities to Borrower or any Subsidiary on account of the failure of any
Syndication Party to perform its obligations hereunder or to any Syndication
Party on account of the failure of Borrower or any Subsidiary to perform their
respective obligations hereunder or under any other Loan Document.
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17.6 Successors and Assigns. This Credit Agreement shall be binding upon
and inure to the benefit of Borrower, the Administrative Agent, the Bid Agent,
and the Syndication Parties, and their respective successors and assigns, except
that Borrower may not assign or transfer its rights or obligations hereunder
without the prior written consent of all of the Syndication Parties.
17.7 Severability. The invalidity or unenforceability of any provision of
this Credit Agreement or the other Loan Documents shall not affect the remaining
portions of such documents or instruments; in case of such invalidity or
unenforceability, such documents or instruments shall be construed as if such
invalid or unenforceable provisions had not been included therein.
17.8 Entire Agreement. This Credit Agreement (together with all exhibits
hereto, which are incorporated herein by this reference) and the other Loan
Documents represent the entire understanding of the Administrative Agent, the
Bid Agent, each Syndication Party, and Borrower with respect to the subject
matter hereof and shall replace and supersede any previous agreements of the
parties with respect to the subject matter hereof.
17.9 Applicable Law. To the extent not governed by federal law, this Credit
Agreement and the other Loan Documents, and the rights and obligations of the
parties hereto and thereto shall be governed by and interpreted in accordance
with the internal laws of the State of Colorado, without giving effect to any
otherwise applicable rules concerning conflicts of law.
17.10 Captions. The captions or headings in this Credit Agreement and any
table of contents hereof are for convenience only and in no way define, limit or
describe the scope or intent of any provision of this Credit Agreement.
17.11 Complete Agreement; Amendments. THIS CREDIT AGREEMENT, THE NOTES, AND
THE OTHER LOAN DOCUMENTS ARE INTENDED BY THE PARTIES HERETO TO BE A COMPLETE AND
FINAL EXPRESSION OF THEIR AGREEMENT AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
ANY PRIOR OR CONTEMPORANEOUS ORAL AGREEMENT. THE ADMINISTRATIVE AGENT, THE BID
AGENT, EACH SYNDICATION PARTY, AND BORROWER ACKNOWLEDGE AND AGREE THAT NO
UNWRITTEN ORAL AGREEMENT EXISTS BETWEEN THEM WITH RESPECT TO THE SUBJECT MATTER
OF THIS AGREEMENT. This Credit Agreement may not be modified or amended unless
such modification or amendment is in writing and is signed by Borrower, the
Administrative Agent, the Bid Agent, and all Syndication Parties (and each
Syndication Party hereby agrees to execute any such amendment approved pursuant
to Section 16.10 hereof). Borrower agrees that it shall reimburse the
Administrative Agent for all fees and expenses incurred by the Administrative
Agent in retaining outside legal counsel in connection with any amendment or
modification to this Credit Agreement requested by Borrower.
17.12 Additional Costs of Maintaining Loan. Borrower shall pay to the
Administrative Agent from time to time such amounts as the Administrative Agent
may determine to be necessary to compensate any Syndication Party for any
increase in costs to such Syndication Party which the Administrative Agent
determines, based on information presented to it by such Syndication Party, are
attributable to such Syndication Party's making or maintaining an Advance
hereunder or its obligation to make such Advance, or any reduction in any amount
receivable by such Syndication Party under this Credit Agreement or the Notes
payable to it in respect to such Advance or such
75
obligation (such increases in costs and reductions in amounts receivable being
herein called "ADDITIONAL COSTS"), resulting from any change after the date of
this Credit Agreement in United States federal, state, municipal, or foreign
laws or regulations (including Regulation D of the Federal Reserve Board), or
the adoption or making after such date of any interpretations, directives, or
requirements applying to a class of banks including such Syndication Party of or
under any United States federal, state, municipal, or foreign laws or
regulations (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof ("REGULATORY CHANGE"), which: (a) changes the basis of
taxation of any amounts payable to such Syndication Party under this Credit
Agreement or the Notes payable to such Syndication Party in respect of such
Advance (other than taxes imposed on the overall net income of such Syndication
Party); or (b) imposes or modifies any reserve, special deposit, or similar
requirements relating to any extensions of credit or other assets of, or any
deposits with or other liabilities of, such Syndication Party; or (c) imposes
any other condition affecting this Credit Agreement or the Notes payable to such
Syndication Party (or any of such extensions of credit or liabilities). The
Administrative Agent will notify Borrower of any event occurring after the date
of this Credit Agreement which will entitle such Syndication Party to
compensation pursuant to this Section as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation. The
Administrative Agent shall include with such notice, a certificate from such
Syndication Party setting forth in reasonable detail the calculation of the
amount of such compensation. Determinations by the Administrative Agent for
purposes of this Section of the effect of any Regulatory Change on the costs of
such Syndication Party of making or maintaining an Advance or on amounts
receivable by such Syndication Party in respect of Advances, and of the
additional amounts required to compensate such Syndication Party in respect of
any Additional Costs, shall be conclusive absent manifest error, provided that
such determinations are made on a reasonable basis.
17.13 Capital Requirements. In the event that the introduction of or any
change in: (a) any law or regulation; or (b) the judicial, administrative, or
other governmental interpretation of any law or regulation; or (c) compliance by
any Syndication Party or any corporation controlling any such Syndication Party
with any guideline or request from any governmental authority (whether or not
having the force of law) has the effect of requiring an increase in the amount
of capital required or expected to be maintained by such Syndication Party or
any corporation controlling such Syndication Party, and such Syndication Party
certifies that such increase is based in any part upon such Syndication Party's
obligations hereunder with respect to the 364-Day Facility and/or the 3-Year
Facility, and other similar obligations, Borrower shall pay to such Syndication
Party such additional amount as shall be certified by such Syndication Party to
the Administrative Agent and to Borrower to be the net present value (discounted
at the Base Rate) of (a) the amount by which such increase in capital reduces
the rate of return on capital which such Syndication Party could have achieved
over the period remaining until the 364-Day Maturity Date or the 3-Year Maturity
Date, as applicable (depending upon which Facility or Facilities such claim to
increase costs is based), but for such introduction or change, (b) multiplied by
(i) such Syndication Party's Individual 364-Day Commitment or (ii) such
Syndication Party's Individual 3-Year Commitment, as applicable. The
Administrative Agent will notify Borrower of any event occurring after the date
of this Credit Agreement that will entitle any such Syndication Party to
compensation pursuant to this Section as promptly as practicable after it
obtains knowledge thereof and of such Syndication Party's determination to
request such compensation. The Administrative Agent shall include with such
notice, a certificate from such Syndication Party
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setting forth in reasonable detail the calculation of the amount of such
compensation. Determinations by any Syndication Party for purposes of this
Section of the effect of any increase in the amount of capital required to be
maintained by any such Syndication Party and of the amount of compensation owed
to any such Syndication Party under this Section shall be conclusive absent
manifest error, provided that such determinations are made on a reasonable
basis.
17.14 Replacement Notes. Upon receipt by Borrower of evidence satisfactory
to it of: (a) the loss, theft, destruction or mutilation of any Note, and (in
case of loss, theft or destruction) of the agreement of the Syndication Party to
which the Note was payable to indemnify Borrower, and upon surrender and
cancellation of such Note, if mutilated; or (b) the assignment by any
Syndication Party of its interest hereunder and the Notes relating thereto, or
any portion thereof, pursuant to this Credit Agreement, then Borrower will pay
any unpaid principal and interest (and Funding Losses, if applicable) then or
previously due and payable on such Notes and will (upon delivery of such Notes
for cancellation, unless covered by subparagraph (a) of this Section) deliver in
lieu of each such Note a new Note or, in the case of an assignment of a portion
of any such Syndication Party's Syndication Interest, new Notes, for any
remaining balance.
17.15 Patronage Payments. Borrower acknowledges and agrees that: (a) only
that portion of the Loan represented by CoBank's Individual 364-Day Pro Rata
Share and/or CoBank's Individual 3-Year Pro Rata Share which is retained by
CoBank for its own account is entitled to patronage distributions in accordance
with CoBank's bylaws and its practices and procedures related to patronage
distribution; and (b) any patronage, or similar, payments to which Borrower is
entitled on account its ownership of Bank Equity Interests or otherwise will not
be based on any portion of CoBank's interest in the Loans in which CoBank has at
any time granted a participation interest.
17.16 Direct Website Communications; Electronic Mail Communications
17.16.1 Delivery.
(a) Borrower hereby agrees that it will provide to the
Administrative Agent all information, documents and other materials that it is
obligated to furnish to the Administrative Agent pursuant to this Credit
Agreement and any other Loan Document, including, without limitation, all
notices, requests, financial statements, financial and other reports,
certificates and other information materials, but, subject to the provisions of
Subsection 17.16.3 hereof, excluding any such communication that (i) relates to
a request for a new, or a conversion of an existing, borrowing or other
extension of credit (including any election of an interest rate or interest
period relating thereto), (ii) relates to the payment of any principal or other
amount due under this Credit Agreement prior to the scheduled date therefor,
(iii) provides notice of any Potential Default or Event of Default under this
Credit Agreement or (iv) is required to be delivered to satisfy any condition
precedent to the effectiveness of this Credit Agreement and/or any borrowing,
issuance or reissuance of a Letter of Credit, or other extension of credit
hereunder (all such non-excluded communications collectively, the
"COMMUNICATIONS"), by transmitting the Communications in an electronic/soft
medium and in a format acceptable to the Administrative Agent as follows (A) all
financial statements to closing@cobank.com and (B) all other Communications to
mtousignant@cobank.com. In addition, Borrower agrees to continue to provide the
Communications to the Administrative Agent in the manner specified in this
Credit
77
Agreement but only to the extent requested by the Administrative Agent. Receipt
of the Communications by the Administrative Agent at the appropriate e-mail
address as set forth above shall constitute effective delivery of the
Communications to the Administrative Agent for purposes of this Credit Agreement
and any other Loan Documents. Nothing in this Section 17.16 shall prejudice the
right of the Administrative Agent or any Syndication Party to give any notice or
other communication pursuant to this Credit Agreement or any other Loan Document
in any other manner specified in this Credit Agreement or any other Loan
Document.
(b) Each Syndication Party agrees that receipt of e-mail
notification that such Communications have been posted pursuant to Subsection
17.16.2 below at the e-mail address(es) set forth beneath such Syndication
Party's name on its signature page hereto or pursuant to the notice provisions
of any Syndication Acquisition Agreement shall constitute effective delivery of
the Communications to such Syndication Party for purposes of this Credit
Agreement and any other Loan Document. Each Syndication Party further agrees to
notify the Administrative Agent in writing (including by electronic
communication) promptly of any change in its e-mail address or any extended
disruption in its internet delivery services.
17.16.2 Posting. Borrower further agrees that the Administrative Agent
may make the Communications available to the Syndication Parties by posting the
Communications on "Intralinks" ("PLATFORM"), the Administrative Agent's internet
delivery system that is part of Intralinks, Inc.'s primary web portal (the
"PRIMARY PORTAL"). The Primary Portal is secured with a dual firewall and a User
ID/Password Authorization System and the Platform is secured through a single
user per deal authorization method whereby each user may access the Platform
only on a deal-by-deal basis. Borrower acknowledges that the distribution of
Communications through an electronic medium is not necessarily secure and that
there are confidentiality and other risks associated with such distribution.
17.16.3 Additional Communications. The Administrative Agent reserves
the right and Borrower and each Syndication Party consents and agrees thereto,
to, upon written notice to Borrower and all Syndication Parties, implement and
require use of a secure system whereby any notices or other communications
required or permitted by this Credit Agreement, but which are not specifically
covered by Subsection 17.16.1 hereof, and including, without limitation,
Borrowing Notices, Funding Notices, Bid Requests, Bids, Bid Results Notices, Bid
Selection Notices, notices of Overnight Rates, Overnight Advance Requests, and
any communication described in clauses (i) through (iv) of Subsection 17.16.1(a)
hereof, shall be sent and received via electronic mail to the e-mail addresses
described in Subsection 17.16.1(b) hereof.
17.16.4 Disclaimer. The Communications transmitted pursuant to this
Section 17.16 and the Platform are provided "as is" and "as available." CoBank
does not warrant the accuracy, adequacy or completeness of the Communications or
the Platform and CoBank expressly disclaims liability for errors or omissions in
the Communications or the Platform. No warranty of any kind, express, implied or
statutory, including without limitation, any warranty of merchantability,
fitness for a particular purpose, non-infringement of third party rights or
freedom from viruses or other code defects, is made by CoBank in connection with
the Communications or the Platform.
78
17.16.5 Termination. The provisions of this Section 17.16 shall
automatically terminate on the date that CoBank, ACB ceases to be the
Administrative Agent under this Credit Agreement.
17.17 Mutual Release. Upon full indefeasible payment and satisfaction of
the Bank Debt and Notes and the other obligations contained in this Credit
Agreement, the parties, including Borrower, the Administrative Agent, the Bid
Agent, and each Syndication Party shall, except as provided in Article 14 hereof
and except with respect to Borrower's reimbursement obligation to the issuer of
each Letter of Credit with an expiry date beyond the 3-Year Maturity Date,
thereupon automatically each be fully, finally, and forever released and
discharged from any further claim, liability, or obligation in connection with
the Bank Debt.
17.18 Liberal Construction. This Credit Agreement constitutes a fully
negotiated agreement between commercially sophisticated parties, each assisted
by legal counsel, and shall not be construed and interpreted for or against any
party hereto.
17.19 Counterparts. This Credit Agreement may be executed by the parties
hereto in separate counterparts, each of which, when so executed and delivered,
shall be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all of the parties
hereto. Telefax or facsimile copies of documents or signature pages bearing
original signatures, and executed documents or signature pages delivered by
telefax or facsimile, shall, in each such instance, be deemed to be, and shall
constitute and be treated as, an original signed document or counterpart, as
applicable. Any party delivering an executed counterpart of this Credit
Agreement by telefacsimile also shall deliver an original executed counterpart
of this Credit Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Credit Agreement.
17.20 Confidentiality. Each Syndication Party shall maintain the
confidential nature of, and shall not use or disclose, any of Borrower's
financial information, confidential information or trade secrets without first
obtaining Borrower's written consent. Nothing in this Section shall require any
Syndication Party to obtain such consent after there is an Event of Default. The
obligations of the Syndication Parties shall in no event apply to: (a) providing
information about Borrower to any financial institution contemplated or
described in Sections 16.7, 16.16, and 16.28 hereof or to such Syndication
Party's parent holding company or any of such Syndication Party's Affiliates;
(b) any situation in which any Syndication Party is required by Law or required
by any Governmental Authority to disclose information; (c) providing information
to counsel to any Syndication Party in connection with the transactions
contemplated by the Loan Documents; (d) providing information to independent
auditors retained by the such Syndication Party; (e) any information that is in
or becomes part of the public domain otherwise than through a wrongful act of
such Syndication Party or any of its employees or agents thereof; (f) any
information that is in the possession of any Syndication Party prior to receipt
thereof from Borrower or any other Person known to such Syndication Party to be
acting on behalf of Borrower; (g) any information that is independently
developed by any Syndication Party; and (h) any information that is
79
disclosed to any Syndication Party by a third party that has no obligation of
confidentiality with respect to the information disclosed. A Syndication Party's
confidentiality requirements continue after it is no longer a Syndication Party
under this Credit Agreement. Notwithstanding any provision to the contrary in
this Credit Agreement, the Administrative Agent and each Syndication Party (and
each employee, representative, or other agent thereof) may disclose to any and
all Persons, without limitations of any kind, the tax treatment and tax
structure of the transaction described in this Credit Agreement and all
materials of any kind (including opinions or other tax analyses), if any, that
are provided to the Administrative Agent or such Syndication Party relating to
such tax treatment and tax structure. Nothing in the preceding sentence shall be
taken as an indication that such transaction would, but for such sentence, be
deemed to be a "reportable transaction" as defined in Treasury Regulation
Section 1.6011-4.
[SIGNATURE PAGES COMMENCE ON THE NEXT PAGE]
IN WITNESS WHEREOF, the parties have executed this Credit Agreement as of
the date first above written.
BORROWER:
CENEX HARVEST STATES COOPERATIVES, a
cooperative corporation formed under the
laws of the State of Minnesota
By:
-----------------------------------------
Name: John Schmitz
Title: Executive Vice President Finance and
Administration, and Chief Financial Officer
ADMINISTRATIVE AGENT:
COBANK, ACB
By:
-----------------------------------------
Name: Michael Tousignant
Title: Vice President
BID AGENT:
CoBANK, ACB
By:
-----------------------------------------
Name: Michael Tousignant
Title: Vice President
80
SYNDICATION PARTIES:
COBANK, ACB
By:
-----------------------------------------
Name: Michael Tousignant
Title: Vice President
Contact Name: Michael Tousignant
Title: Vice President
Address: 5500 South Quebec Street
Greenwood Village, CO 80111
Phone No.: 303/694-5838
Fax No.: 303/694-5830
E-mail: mtousignant@cobank.com
Individual 364-Day Commitment: $132,857,140.00
Individual 3-Year Commitment: $22,142,860.00
Payment Instructions:
CoBank, ACB
ABA No.: 307088754
Acct. Name: CoBank, ACB
Account No.: 22274433
Attn:
Reference: Cenex Harvest States
81
SYNDICATION PARTIES:
SUNTRUST BANK
By:
-----------------------------------------
Name: Michael Lapresi
Title:
Contact Name: Douglas O'Bryan
Title: Associate
Address: 303 Peachtree Street
Atlanta, GA 30308
Phone No.: 404/724-3163
Fax No.: 404/230-5305
E-mail: douglas.o'bryan@suntrust.com
Individual 364-Day Commitment: $50,571,429.00
Individual 3-Year Commitment: $8,428,571.00
Payment Instructions:
SunTrust Bank
ABA No.: 061000104
Acct. Name: Corporate Banking Operations
Support
Account No.: 9088000112
Reference: Cenex Harvest States
82
SYNDICATION PARTIES:
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK
B.A., "RABOBANK INTERNATIONAL" NEW YORK BRANCH
By:
-----------------------------------------
Name:
Title:
By:
-----------------------------------------
Name:
Title:
Contact Name: Peter Glawe
Title: Assistant Vice President - Credit Analyst
Address: 245 Park Avenue
New York, NY 10167
Phone No.: 312/408-8224
Fax No.: 312/408-8240
E-mail: peter.glawe@chi.rabobank.com
Individual 364-Day Commitment: $50,571,429.00
Individual 3-Year Commitment: $8,428,571.00
Payment Instructions:
Bank of New York
ABA No.: 021 000 018
Acct. Name: Rabobank Nederland
Account No.: 802-6002-533
Reference: Cenex Harvest
83
SYNDICATION PARTIES:
BNP PARIBAS
By:
-----------------------------------------
Name: Marcie Weiss
Title: Managing Director
By:
-----------------------------------------
Name: Guillaume de La Ville
Title: Vice President
Contact Name: Guillaume de La Ville
Title: Vice President
Address: 787 Seventh Avenue
New York, NY 10019
Phone No.: 212/841-2067
Fax No.: 212/841-2536
E-mail: guillaume.delaville@americas.bnpparibas.com
Individual 364-Day Commitment: $50,571,429.00
Individual 3-Year Commitment: $8,428,571.00
Payment Instructions:
BNP PARIBAS, NEW YORK
ABA No.: 026 007 689
Acct. Name: Loan Servicing Clearing Account
Account No.: 103130 00103
Reference: Cenex Harvest
84
SYNDICATION PARTIES:
U.S. BANK NATIONAL ASSOCIATION
By:
-----------------------------------------
Name: Kathi L. Hatch
Title: Assistant Vice President
Contact Name: Kathi L. Hatch
Title: Assistant Vice President
Address: 950 17th Street
Denver, CO 80202
Phone No.: 303/585-4926
Fax No.: 303/585-4732
E-mail: kathi.hatch@usbank.com
Individual 364-Day Commitment: $38,571,429.00
Individual 3-Year Commitment: $6,428,571.00
Payment Instructions:
U.S. Bank
ABA No.: 123000220
Acct. Name: PL-7 Commercial Loan
Servicing West
Account No.: 00340012160600
Reference: Participation Specialist, Loan
#6349061459-Cenex Harvest
85
SYNDICATION PARTIES:
DEERE CREDIT, INC.
By:
-----------------------------------------
Name: Jack Harris
Title: Manager Credit Operations/Administration
Contact Name: Jack Harris
Title: Manager Credit Operations/Administration
Address: 6400 NW 86th Street
P.O. Box 6650 - Dept. 140
Johnston, IA 50131-6650
Phone No.: 515/267-4349
Fax No.: 515/267-4020
E-mail: harrisjack@johndeere.com
Individual 364-Day Commitment: $38,571,429.00
Individual 3-Year Commitment: $6,428,571.00
Payment Instructions:
Bank One Chicago, IL
ABA No.: 071000013
Acct. Name: Deere Credit Services
Account No.: 51-52135
Reference: Cenex
86
SYNDICATION PARTIES:
HARRIS TRUST AND SAVINGS BANK
By:
-----------------------------------------
Name:
Title:
Contact Name: Robert H. Wolohan
Title: Vice President
Address: 111 West Monroe Street
Chicago, IL 60603
Phone No.: 312/461-6149
Fax No.: 312/293-4280
E-mail: Robert.wolohan@harrisbank.com
Individual 364-Day Commitment: $38,571,429.00
Individual 3-Year Commitment: $6,428,571.00
Payment Instructions:
Harris Trust and Savings Bank Chicago, IL
ABA No.: 071 000 288
Acct. Name: Harris Nesbitt
Account No.: 109 215 4 Credit Services
Reference: Cenex Harvest States Cooperative
Notify: Violetta Smith 461-3715
87
SYNDICATION PARTIES:
THE BANK OF TOKYO-MITSUBISHI, LTD.,
CHICAGO BRANCH
By:
-----------------------------------------
Name: Patrick McCue
Title: Vice President & Manager
Contact Name: Patrick McCue
Title: Vice President & Manager
Address: 227 West Monroe, Suite 2300
Chicago, IL 60606
Phone No.: 952/473-6110
Fax No.: 952/473-5152
E-mail: pmccue@btmna.com
Individual 364-Day Commitment: $29,142,857.00
Individual 3-Year Commitment: $4,857,143.00
Payment Instructions:
The Bank of Tokyo-Mitsubishi, Ltd., Chicago
Branch
ABA No.: 071002341
Acct. Name: The Bank of Tokyo-Misubishi,
Ltd., Chicago Branch
Account No.: 1525720230
Reference: Cenex Harvest States
88
SYNDICATION PARTIES:
FORTIS CAPITAL CORP.
By:
-----------------------------------------
Name: Edward Aldrich
Title: Director
Contact Name: Edward Aldrich
Title: Director
Address: 301 Tresser Boulevard
Stamford, CT 06901-3239
Phone No.: 203/705-5725
Fax No.: 203/705-5924
E-mail: Edward.Aldrich@fortiscapitalusa.com
Individual 364-Day Commitment: $29,142,857.00
Individual 3-Year Commitment: $4,857,143.00
Payment Instructions:
J.P. Morgan-Chase New York
ABA No.: 021-000-021
Acct. Name: Fortis Capital Corp.
Account No.: 001-1-624-418
Reference: GCG - Cenex Harvest States
89
SYNDICATION PARTIES:
NATEXIS BANQUES POPULAIRES
By:
-----------------------------------------
Name: Stephen Jendras
Title: Vice President
By:
-----------------------------------------
Name: Guillaume de Parscau
Title:
Contact Name: Stephen Jendras
Title: Vice President
Address: 1251 Avenue of the Americas
34th Floor
New York, NY 10020
Phone No.: 212/872-5157
Fax No.: 212/354-9095
E-mail: steve.jendras@nyc.nxlop.com
Individual 364-Day Commitment: $25,714,286.00
Individual 3-Year Commitment: $4,285,714.00
Payment Instructions:
Chase Manhattan Bank, New York, NY
ABA No.: 021-000-021
Acct. Name: In favor of Natexis Banques
Populaires
Account No.: 544-7-75330
Reference: For further credit to Cenex Harvest
States Account No. 101899
90
SYNDICATION PARTIES:
AGFIRST FARM CREDIT BANK
By:
-----------------------------------------
Name: Bruce B. Fortner
Title: Vice President
Contact Name: Bruce B. Fortner
Title: Vice President
Address: P.O. Box 1499
Columbia, SC 29202
Phone No.: 803/753-2452
Fax No.: 803/254-4219
E-mail: bfortner@agfirst.com
Individual 364-Day Commitment: $25,714,286.00
Individual 3-Year Commitment: $4,285,714.00
Payment Instructions:
AgFirst Farm Credit Bank
ABA No.: 053905974
Acct. Name: Beneficiary Field 4200
Account No.: 7993209210
Reference: Cenex
91
SYNDICATION PARTIES:
CREDIT AGRICOLE INDOSUEZ
By:
-----------------------------------------
Name: Theodore D. Tice
Title: Vice President & Relationship Manager
By:
-----------------------------------------
Name: Ray Falkenberg
Title:
Contact Name: Theodore D. Tice
Title: Vice President & Relationship Manager
Address: 55 E. Monroe Street
Chicago, IL 60603-5702
Phone No.: 312/917-7463
Fax No.: 312/372-3724
E-mail: ttice@us.ca-indosuez.com
Individual 364-Day Commitment: $21,428,571.00
Individual 3-Year Commitment: $3,571,429.00
Payment Instructions:
Citibank, New York, New York
ABA No.: 021-000-089
Acct. Name: Credit Agricole Indosuez -
Chicago Branch
Account No.: 36023853
Reference: Cenex Harvest States
92
SYNDICATION PARTIES:
BANK OF AMERICA, N.A.
By:
-----------------------------------------
Name: Rachel Li
Title: Vice President
Contact Name: Rachel Li
Title: Vice President
Address: 231 S. LaSalle Street
Chicago, IL 60697
Phone No.: 312/828-6279
Fax No.: 312/828-7393
E-mail: RACHEL.J.LI@bankofamerica.com
Individual 364-Day Commitment: $17,142,857.00
Individual 3-Year Commitment: $2,857,143.00
Payment Instructions:
Bank of America N.A.
ABA No.: 08-1000032
Acct. Name: Commercial Loan Service
Center, St. Louis, MO
Account No.: 109823-0001000
Reference: Attn: Torethia Merriwether
93
SYNDICATION PARTIES:
WELLS FARGO BANK, NATIONAL ASSOCIATION
By:
-----------------------------------------
Name:
Title:
Contact Name: Scott D. Bjelde
Title: Vice President/Sr. Banker
Address: Sixth & Marquette
MAC-N9305-031
Minneapolis, MN 55479
Phone No.: 612/667-6126
Fax No.: 612/667-2276
E-mail: Scott.D.Bjelde@wellsfargo.com
Individual 364-Day Commitment: $38,571,429.00
Individual 3-Year Commitment: $6,428,571.00
Payment Instructions:
Wells Fargo Bank, N.A.
ABA No.: 121-000-248
Acct. Name: MEMSYN/Commercial Banking
Service Center
Account No.: 0271-2507201
Reference: Cenex Harvest States
94
SYNDICATION PARTIES:
NATIONAL CITY BANK OF INDIANA
By:
-----------------------------------------
Name: Michael D. Hurst
Title: Senior Vice President
Contact Name: Michael D. Hurst
Title: Senior Vice President
Address: 101 W. Washington Street, Suite 200 E
Indianapolis, IN 46255
Phone No.: 317/267-3723
Fax No.: 317/267-7441
E-mail: Michael.Hurst@nationalcity.com
Individual 364-Day Commitment: $12,857,143.00
Individual 3-Year Commitment: $2,142,857.00
Payment Instructions:
National City Bank of Indiana
ABA No.: 074000065
Acct. Name: Cenex Harvest States
Account No.: GL 151804
Reference: Att: Commercial Loan
#1526986323
95
xxi
TABLE OF CONTENTS
ARTICLE 1. DEFINED TERMS......................................................2
1.1 Additional Costs......................................................2
1.2 Adjusted Consolidated Funded Debt.....................................2
1.3 Administrative Agent..................................................2
1.4 Administrative Agent Office...........................................2
1.5 Advance...............................................................2
1.6 Advance Date..........................................................2
1.7 Advance Payment.......................................................2
1.8 Affected Loans........................................................2
1.9 Affiliate.............................................................2
1.10 Aggregate Commitment.................................................3
1.11 Amortization.........................................................3
1.12 Annual Operating Budget..............................................3
1.13 Anti-Terrorism Laws..................................................3
1.14 Applicable Lending Office............................................3
1.15 Authorized Officer...................................................3
1.16 Bank Debt............................................................3
1.17 Banking Day..........................................................3
1.18 Bank Equity Interests................................................3
1.19 Base Rate............................................................3
1.20 Base Rate Loans......................................................3
1.21 Bid..................................................................4
1.22 Bid Agent............................................................4
1.23 Bid Maturity Date....................................................4
i
1.24 Bid Request..........................................................4
1.25 Bid Results Notice...................................................4
1.26 Bid Rate.............................................................4
1.27 Bid Selection Notice.................................................4
1.28 Borrower's Account...................................................4
1.29 Borrower Benefit Plan................................................4
1.30 Borrowing Notice.....................................................4
1.31 Borrower Pension Plan................................................4
1.32 Capital Leases.......................................................4
1.33 Cash Collateral Account..............................................4
1.34 CERCLA...............................................................4
1.35 Change in Law........................................................4
1.36 Closing Date.........................................................4
1.37 Code.................................................................5
1.38 Committed LC Request.................................................5
1.39 Committed Letter of Credit...........................................5
1.40 Committed Letter of Credit Fee.......................................5
1.41 Committed 364-Day Advances...........................................5
1.42 Committed 3-Year Advances............................................5
1.43 Compliance Certificate...............................................5
1.44 Communications.......................................................5
1.45 Consolidated Cash Flow...............................................5
1.46 Consolidated Current Assets..........................................5
1.47 Consolidated Current Liabilities.....................................5
1.48 Consolidated Funded Debt.............................................5
ii
1.49 Consolidated Interest Expense........................................6
1.50 Consolidated Members' and Patrons' Equity............................6
1.51 Consolidated Subsidiary..............................................6
1.52 Contributing Syndication Parties.....................................6
1.53 Control Agreement....................................................6
1.54 Converted LC.........................................................6
1.55 Debt.................................................................6
1.56 Default Interest Rate................................................6
1.57 Delinquency Interest.................................................6
1.58 Delinquent Amount....................................................6
1.59 Delinquent Syndication Party.........................................7
1.60 Depreciation.........................................................7
1.61 Embargoed Person.....................................................7
1.62 Environmental Laws...................................................7
1.63 Environmental Regulations............................................7
1.64 ERISA................................................................7
1.65 ERISA Affiliate......................................................7
1.66 Event of Default.....................................................7
1.67 Event of Syndication Default.........................................7
1.68 Executive Order......................................................7
1.69 Existing Credit Agreement............................................7
1.70 Existing Letters of Credit...........................................8
1.71 Extended Duration LC.................................................8
1.72 Farm Credit System Institution.......................................8
1.73 Fiscal Quarter.......................................................8
iii
1.74 Fiscal Year..........................................................8
1.75 Funded Debt..........................................................8
1.76 Funding Losses.......................................................8
1.77 Funding Loss Notice..................................................8
1.78 Funding Share........................................................8
1.79 GAAP.................................................................8
1.80 Good Faith Contest...................................................8
1.81 Governmental Authority...............................................9
1.82 Hazardous Substances.................................................9
1.83 Holdout Lender.......................................................9
1.84 Indemnified Agency Parties...........................................9
1.85 Indemnified Parties..................................................9
1.86 Individual Commitment................................................9
1.87 Individual 364-Day Commitment........................................9
1.88 Individual 3-Year Commitment.........................................9
1.89 Individual 364-Day Lending Capacity..................................9
1.90 Individual 3-Year Lending Capacity...................................9
1.91 Individual Outstanding 364-Day Obligations..........................10
1.92 Individual Outstanding 3-Year Obligations...........................10
1.93 Individual 364-Day Pro Rata Share...................................10
1.94 Individual 3-Year Pro Rata Share....................................10
1.95 Intellectual Property...............................................10
1.96 Investment..........................................................10
1.97 Issuance Fee........................................................11
1.98 Issuing Syndication Party...........................................11
iv
1.99 LC Commitment.......................................................11
1.100 Letters of Credit..................................................11
1.101 Letter of Credit Bank..............................................11
1.102 LIBO Rate..........................................................11
1.103 LIBO Rate Loan.....................................................11
1.104 LIBO Rate Period...................................................11
1.105 LIBO Request.......................................................11
1.106 Licensing Laws.....................................................11
1.107 Lien...............................................................11
1.108 Loans..............................................................11
1.109 Loan Documents.....................................................11
1.110 Material Adverse Effect............................................12
1.111 Material Agreements................................................12
1.112 Multiemployer Plan.................................................12
1.113 NCRA...............................................................12
1.114 Negotiated LC Request..............................................12
1.115 Negotiated Letter of Credit........................................12
1.116 Non-US Lender......................................................12
1.117 Note or Notes......................................................12
1.118 OFAC...............................................................12
1.119 Operating Lease....................................................12
1.120 Organization Documents.............................................12
1.121 Other List.........................................................12
1.122 Overnight Advance..................................................12
1.123 Overnight Advance Request..........................................12
v
1.124 Overnight Funding Commitment.......................................12
1.125 Overnight Lender...................................................12
1.126 Overnight Maturity Date............................................12
1.127 Overnight Rate.....................................................12
1.128 Payment Account....................................................13
1.129 Payment Distribution...............................................13
1.130 PBGC...............................................................13
1.131 Permitted Encumbrance..............................................13
1.132 Person.............................................................13
1.133 Plan...............................................................13
1.134 Platform...........................................................13
1.135 Potential Default..................................................13
1.136 Primary Portal.....................................................13
1.137 Prohibited Transaction.............................................13
1.138 RCRA...............................................................13
1.139 Regulatory Change..................................................13
1.140 Replacement Lender.................................................13
1.141 Reportable Event...................................................13
1.142 Requested 364-Day Advance..........................................13
1.143 Requested 3-Year Advance...........................................13
1.144 Required Lenders...................................................13
1.145 Required License...................................................14
1.146 Restricted Subsidiary..............................................14
1.147 SDN List...........................................................14
1.148 Subsidiary.........................................................14
vi
1.149 Successor Agent....................................................14
1.150 Syndication Acquisition Agreement..................................14
1.151 Syndication Interest...............................................14
1.152 Syndication Parties................................................14
1.153 Syndication Party Advance Date.....................................14
1.154 Term Loan Credit Agreement.........................................14
1.155 364-Day Advance....................................................15
1.156 364-Day Availability Period........................................15
1.157 364-Day Bid Advance................................................15
1.158 364-Day Bid Loan...................................................15
1.159 364-Day Borrowing Notice...........................................15
1.160 364-Day Commitment.................................................15
1.161 364-Day Facility...................................................15
1.162 364-Day Facility Fee Factor........................................15
1.163 364-Day Facility Fee...............................................15
1.164 364-Day Facility Note(s)...........................................15
1.165 364-Day Funding Notice.............................................15
1.166 364-Day Margin.....................................................15
1.167 364-Day Maturity Date..............................................15
1.168 3-Year Advance.....................................................15
1.169 3-Year Availability Period.........................................15
1.170 3-Year Bid Advance.................................................15
1.171 3-Year Bid Loan....................................................15
1.172 3-Year Borrowing Notice............................................15
1.173 3-Year Commitment..................................................15
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1.174 3-Year Facility....................................................15
1.175 3-Year Facility Fee Factor.........................................16
1.176 3-Year Facility Fee................................................16
1.177 3-Year Facility Note...............................................16
1.178 3-Year Funding Notice..............................................16
1.179 3-Year Margin......................................................16
1.180 3-Year Maturity Date...............................................16
1.181 Transfer...........................................................16
1.182 Voting Participant.................................................16
1.183 Wire Instructions..................................................16
ARTICLE 2. 364-DAY FACILITY..................................................16
2.1 364-Day Facility Loan................................................16
2.1.1 Individual Syndication Party 364-Day Commitment................16
2.1.2 Individual Syndication Party 364-Day Pro Rata Share............16
2.2 364-Day Commitment...................................................16
2.3 364-Day Borrowing Notice; Funding Notice.............................16
2.4 364-Day Facility Promissory Notes....................................17
2.5 Syndication Party Records............................................17
2.6 Use of Proceeds......................................................17
2.7 Syndication Party Funding Failure....................................18
2.8 Reduction of 364-Day Commitment......................................18
ARTICLE 3. 3-YEAR FACILITY...................................................18
3.1 3-Year Facility Loan.................................................18
3.1.1 Individual Syndication Party 3-Year Commitment.................18
3.1.2 Individual Syndication Party 3-Year Pro Rata Share.............18
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3.2 3-Year Commitment....................................................19
3.3 3-Year Borrowing Notice..............................................19
3.4 3-Year Facility Promissory Notes.....................................19
3.5 Syndication Party Records............................................19
3.6 Use of Proceeds......................................................20
3.7 Syndication Party Funding Failure....................................20
3.8 Reduction of 3-Year Commitment.......................................20
ARTICLE 4. BID RATE FACILITY; OVERNIGHT FACILITY.............................20
4.1 364-Day Facility Bid Rate Loans......................................20
4.1.1 Individual 364-Day Commitment..................................20
4.1.2 364-Day Commitment.............................................21
4.1.3 Amounts........................................................21
4.2 3-Year Facility Bid Rate Loans.......................................21
4.2.1 Individual 3-Year Commitment...................................21
4.2.2 3-Year Commitment..............................................21
4.2.3 Amounts........................................................21
4.3 Bid Request..........................................................21
4.4 Bid Procedure........................................................22
4.5 Bid Acceptance Procedure.............................................22
4.6 Bid Loan Funding.....................................................23
4.7 Syndication Party Funding Failure....................................23
4.8 364-Day Facility Bid Rate Loans - Bid Maturity Date Beyond
364-Day Maturity Date................................................23
4.9 Failure to Implement Bid Process.....................................23
4.10 Overnight Advances..................................................24
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4.11 Overnight Lender Funding Failure....................................24
ARTICLE 5. LETTER OF CREDIT FACILITY.........................................24
5.1 Letter of Credit Request.............................................24
5.1.1 Request for Committed Letter of Credit.........................24
5.1.2 Request for Negotiated Letter of Credit........................25
5.1.3 Purpose........................................................25
5.1.4 Cash Collateral................................................25
5.1.5 Notification of the Administrative Agent Regarding
Negotiated Letters of Credit...................................25
5.2 Committed Letters of Credit..........................................25
5.2.1 Available Amount...............................................25
5.2.2 Availability...................................................26
5.2.3 Treatment of Draws.............................................26
5.3 Negotiated Letters of Credit.........................................26
5.3.1 Available Amount...............................................26
5.3.2 Availability...................................................26
5.3.3 Fees...........................................................26
5.3.4 Treatment of Draws.............................................26
5.4 Notice Regarding Negotiated Letters of Credit........................27
5.5 Existing Letters of Credit...........................................27
5.6 Cash Collateral Account..............................................27
5.7 Reimbursement Obligation Unconditional...............................28
ARTICLE 6. INTEREST AND FEES.................................................29
6.1 Interest.............................................................29
6.1.1 Base Rate Option...............................................29
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6.1.2 LIBO Rate Option...............................................29
6.2 Additional Provisions for LIBO Rate Loans............................29
6.2.1 Limitation on LIBO Rate Loans..................................29
6.2.2 LIBO Rate Loan Unlawful........................................30
6.2.3 Treatment of Affected Loans....................................30
6.3 Default Interest Rate................................................31
6.4 Interest Calculation.................................................31
6.5 Fees.................................................................31
6.5.1 364-Day Facility Fee...........................................31
6.5.2 3-Year Facility Fee............................................31
6.5.3 Committed Letter of Credit Fee.................................31
6.6 364-Day Margin; 3-Year Margin; 364-Day Facility Fee Factor;
3-Year Facility Fee Factor...........................................32
6.7 Special Interest Rates...............................................32
ARTICLE 7. PAYMENTS; FUNDING LOSSES..........................................32
7.1 Principal Payments...................................................32
7.2 Interest Payments....................................................32
7.3 Application of Principal Payments....................................32
7.4 Manner of Payment....................................................33
7.4.1 Payments to Be Free and Clear..................................33
7.4.2 Grossing-up of Payments........................................33
7.5 Voluntary Prepayments................................................34
7.6 Distribution of Principal and Interest Payments......................34
7.6.1 Principal and Interest Payments on 364-Day Advances............34
7.6.2 Principal and Interest Payments on 3-Year
Pro Rata Rate Advances.........................................34
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7.6.3 Principal and Interest Payments on Bid Rate Advances...........35
7.6.4 Principal and Interest Payments on Overnight Advances..........35
ARTICLE 8. BANK EQUITY INTERESTS.............................................35
ARTICLE 9. SECURITY..........................................................35
ARTICLE 10. REPRESENTATIONS AND WARRANTIES...................................35
10.1 Organization, Good Standing, Etc....................................35
10.2 Corporate Authority, Due Authorization; Consents....................35
10.3 Litigation..........................................................36
10.4 No Violations.......................................................36
10.5 Binding Agreement...................................................36
10.6 Compliance with Laws................................................36
10.7 Principal Place of Business; Place of Organization..................36
10.8 Payment of Taxes....................................................36
10.9 Licenses and Approvals..............................................37
10.10 Employee Benefit Plans.............................................37
10.11 Equity Investments.................................................37
10.12 Title to Real and Personal Property................................37
10.13 Financial Statements...............................................38
10.14 Environmental Compliance...........................................38
10.15 Fiscal Year........................................................38
10.16 Material Agreements................................................38
10.17 Regulations U and X................................................38
10.18 Trademarks, Tradenames, etc........................................38
10.19 No Default on Outstanding Judgments or Orders......................39
10.20 No Default in Other Agreements.....................................39
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10.21 Acts of God........................................................39
10.22 Governmental Regulation............................................39
10.23 Labor Matters and Labor Agreements.................................39
10.24 Anti-Terrorism Laws................................................40
10.24.1 Violation of Law.............................................40
10.24.2 Classification...............................................40
10.24.3 Conduct of Business..........................................40
10.25 Disclosure.........................................................41
ARTICLE 11. CONDITIONS TO ADVANCES...........................................41
11.1 Conditions to Closing...............................................41
11.1.1 Loan Documents................................................41
11.1.2 Approvals.....................................................41
11.1.3 Organizational Documents......................................41
11.1.4 Evidence of Corporate Action..................................41
11.1.5 Evidence of Insurance.........................................41
11.1.6 Appointment of Agent for Service..............................41
11.1.7 No Material Change............................................42
11.1.8 Fees and Expenses.............................................42
11.1.9 Bank Equity Interest Purchase Obligation......................42
11.1.10 Opinion of Counsel...........................................42
11.1.11 Further Assurances...........................................42
11.2 Conditions to Advances and to Issuance of Letters of Credit.........42
11.2.1 Cancellation of Existing Credit Agreement.....................42
11.2.2 Default.......................................................42
11.2.3 Representations and Warranties................................42
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ARTICLE 12. AFFIRMATIVE COVENANTS............................................43
12.1 Books and Records...................................................43
12.2 Reports and Notices.................................................43
12.2.1 Annual Financial Statements...................................43
12.2.2 Quarterly Financial Statements................................43
12.2.3 Notice of Default.............................................44
12.2.4 ERISA Reports.................................................44
12.2.5 Notice of Litigation..........................................44
12.2.6 Notice of Material Adverse Effect.............................44
12.2.7 Notice of Environmental Proceedings...........................44
12.2.8 Regulatory and Other Notices..................................44
12.2.9 Adverse Action Regarding Required Licenses....................45
12.2.10 Budget.......................................................45
12.2.11 Additional Information.......................................45
12.3 Maintenance of Existence and Qualification..........................45
12.4 Compliance with Legal Requirements and Agreements...................45
12.5 Compliance with Environmental Laws..................................45
12.6 Taxes...............................................................46
12.7 Insurance...........................................................46
12.8 Maintenance of Properties...........................................46
12.9 Payment of Liabilities..............................................46
12.10 Inspection.........................................................47
12.11 Required Licenses; Permits; Intellectual Property; Etc.............47
12.12 ERISA..............................................................47
12.13 Maintenance of Commodity Position..................................47
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12.14 Financial Covenants................................................47
12.14.1 Working Capital..............................................47
12.14.2 Consolidated Funded Debt to Consolidated Cash Flow...........47
12.14.3 Adjusted Consolidated Funded Debt to Consolidated
Members' and Patrons' Equity.................................48
12.15 Embargoed Person...................................................48
12.16 Anti-Money Laundering..............................................48
ARTICLE 13. NEGATIVE COVENANTS...............................................48
13.1 Borrowing...........................................................48
13.2 No Other Businesses.................................................49
13.3 Liens...............................................................49
13.4 Sale of Assets......................................................51
13.5 Liabilities of Others...............................................51
13.6 Loans...............................................................51
13.7 Merger; Acquisitions; Business Form; Etc............................51
13.8 Investments.........................................................52
13.9 Transactions With Related Parties...................................53
13.10 Patronage Refunds, etc.............................................53
13.11 Change in Fiscal Year..............................................53
13.12 ERISA..............................................................54
13.13 Anti-Terrorism Law.................................................54
ARTICLE 14. INDEMNIFICATION..................................................54
14.1 General; Stamp Taxes; Intangibles Tax...............................54
14.2 Indemnification Relating to Hazardous Substances....................55
ARTICLE 15. EVENTS OF DEFAULT; RIGHTS AND REMEDIES...........................56
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15.1 Events of Default...................................................56
15.2 No Advance..........................................................57
15.3 Rights and Remedies.................................................57
ARTICLE 16. AGENCY AGREEMENT.................................................57
16.1 Funding of Syndication Interest.....................................57
16.2 Syndication Parties' Obligations to Remit Funds.....................58
16.3 Notices to Administrative Agent.....................................58
16.4 Syndication Party's Failure to Remit Funds..........................58
16.5 Agency Appointment..................................................59
16.6 Power and Authority of the Administrative Agent.....................59
16.6.1 Advice........................................................60
16.6.2 Documents.....................................................60
16.6.3 Proceedings...................................................60
16.6.4 Retain Professionals..........................................60
16.6.5 Incidental Powers.............................................60
16.7 Duties of the Administrative Agent..................................60
16.7.1 Possession of Documents.......................................60
16.7.2 Distribute Payments...........................................60
16.7.3 Loan Administration...........................................61
16.7.4 Determination of Individual Lending Capacity and
Individual Pro Rata Shares....................................61
16.7.5 Forwarding of Information.....................................61
16.8 Action Upon Default.................................................61
16.8.1 Indemnification as Condition to Action........................62
16.9 Bid Agent's Appointment, Power, Authority, Duties and
Resignation or Removal..............................................62
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16.10 Consent Required for Certain Actions...............................62
16.10.1 Unanimous....................................................62
16.10.2 Facility Lenders.............................................62
16.10.3 Required Lenders.............................................63
16.10.4 Action Without Vote..........................................63
16.10.5 Voting Participants..........................................63
16.11 Distribution of Principal and Interest.............................64
16.12 Distribution of Certain Amounts....................................64
16.12.1 Funding Losses...............................................64
16.12.2 Fees.........................................................64
16.13 Possession of Loan Documents.......................................64
16.14 Collateral Application.............................................64
16.15 Amounts Required to be Returned....................................65
16.16 Reports and Information to Syndication Parties.....................65
16.17 Standard of Care...................................................66
16.18 No Trust Relationship..............................................66
16.19 Sharing of Costs and Expenses......................................66
16.20 Syndication Parties' Indemnification of the
Administrative Agent and Bid Agent.................................67
16.21 Books and Records..................................................67
16.22 Administrative Agent Fee...........................................67
16.23 The Administrative Agent's Resignation or Removal..................67
16.24 Representations and Warranties of All Parties......................68
16.25 Representations and Warranties of CoBank...........................68
16.26 Syndication Parties' Independent Credit Analysis...................68
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16.27 No Joint Venture or Partnership....................................69
16.28 Purchase for Own Account; Restrictions on
Transfer; Participations...........................................69
16.29 Certain Participants' Voting Rights................................70
16.30 Method of Making Payments..........................................70
16.31 Events of Syndication Default/Remedies.............................70
16.31.1 Syndication Party Default....................................70
16.31.2 Remedies.....................................................71
16.32 Withholding Taxes..................................................71
16.33 Replacement of Holdout Lender......................................72
16.34 Amendments Concerning Agency Function..............................72
16.35 Further Assurances.................................................72
ARTICLE 17. MISCELLANEOUS....................................................72
17.1 Costs and Expenses..................................................72
17.2 Service of Process and Consent to Jurisdiction......................73
17.3 Jury Waiver.........................................................73
17.4 Notices.............................................................73
17.4.1 Borrower......................................................74
17.4.2 Administrative Agent..........................................74
17.4.3 Bid Agent.....................................................74
17.4.4 Syndication Parties...........................................74
17.5 Liability of Administrative Agent and Bid Agent.....................74
17.6 Successors and Assigns..............................................75
17.7 Severability........................................................75
17.8 Entire Agreement....................................................75
17.9 Applicable Law......................................................75
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17.10 Captions...........................................................75
17.11 Complete Agreement; Amendments.....................................75
17.12 Additional Costs of Maintaining Loan...............................75
17.13 Capital Requirements...............................................76
17.14 Replacement Notes..................................................77
17.15 Patronage Payments.................................................77
17.16 Direct Website Communications; Electronic Mail
Communications.....................................................77
17.16.1 Delivery.....................................................77
17.16.2 Posting......................................................78
17.16.3 Additional Communications....................................78
17.16.4 Disclaimer...................................................78
17.16.5 Termination..................................................79
17.17 Mutual Release.....................................................79
17.18 Liberal Construction...............................................79
17.19 Counterparts.......................................................79
17.20 Confidentiality....................................................79
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EXHIBITS
Exhibit 1.43 Compliance Certificate
Exhibit 1.70 Existing Letters of Credit
Exhibit 1.146 List of Restricted Subsidiaries
Exhibit 1.148 List of Subsidiaries
Exhibit 2.3 364-Day Borrowing Notice
Exhibit 2.4 364-Day Facility Note Form
Exhibit 3.3 3-Year Borrowing Notice
Exhibit 3.4 3-Year Facility Note Form
Exhibit 4.3 Bid Request Form (364-Day Facility)
Bid Request Form (3-Year Facility)
Exhibit 4.4 Bid Form (364-Day Facility)
Bid Form (3-Year Facility)
Exhibit 4.5 Bid Selection Notice (364-Day Facility)
Bid Selection Notice (3-Year Facility)
Exhibit 6.7 Special Interest Rates
Exhibit 10.3 Litigation
Exhibit 10.8 Payment of Taxes
Exhibit 10.10 Employee Benefit Plans
Exhibit 10.11 Equity Investments
Exhibit 10.14 Environmental Compliance
Exhibit 10.23 Labor Matters and Agreements
Exhibit 13.1 Existing Indebtedness
Exhibit 13.8(f) Existing Investments (excluding Restricted Subsidiaries)
xx
Exhibit 13.8(i) Investment in NCRA
Exhibit 13.8(j) Investment in Ventura Foods, LLC
Exhibit 16.28 Syndication Acquisition Agreement
Exhibit 16.30 Wire Instructions
Schedule 1 Syndication Parties and Individual Commitments
Schedule 2 Applicable Margins; Facility Fee Factors
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