Exhibit 10.16
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CREDIT AGREEMENT
DATED AS OF OCTOBER 7, 2003,
AMONG
PENFORD CORPORATION,
as the U.S. Borrower,
PENFORD AUSTRALIA LIMITED AND PENFORD HOLDINGS PTY. LIMITED
as the Australian Borrowers,
THE GUARANTORS FROM TIME TO TIME PARTIES HERETO,
THE LENDERS FROM TIME TO TIME PARTIES HERETO,
AND
HARRIS TRUST AND SAVINGS BANK,
as Administrative Agent
AND
ANZ CAPEL COURT LIMITED,
as Australian Trustee
AND
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED,
as Australian Agent
AND
BMO NESBITT BURNS,
as Lead Arranger
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TABLE OF CONTENTS
SECTION HEADING PAGE
SECTION 1. THE U.S. CREDIT FACILITIES............................................................ 1
Section 1.1. U.S. Term Loan Commitments............................................................ 1
Section 1.2. U.S. Revolving Credit Commitments..................................................... 1
Section 1.3. U.S. Letters of Credit................................................................ 2
Section 1.4. Applicable Interest Rates............................................................. 4
Section 1.5. Minimum Borrowing Amounts; Maximum Eurodollar Loans................................... 5
Section 1.6. Manner of Borrowing Loans and Designating Applicable Interest Rates................... 5
Section 1.7. Interest Periods...................................................................... 7
Section 1.8 Maturity of Loans..................................................................... 8
Section 1.9. Default Rate.......................................................................... 9
Section 1.10. The Notes............................................................................. 10
Section 1.11. Funding Indemnity..................................................................... 11
Section 1.12. U.S. Swing Loans...................................................................... 11
SECTION 2. FEES, PREPAYMENTS, TERMINATION OF COMMITMENTS, PLACE AND APPLICATION OF PAYMENTS,
SUBSTITUTION OF LENDERS, AND APPOINTMENT OF AGENT FOR BORROWERS....................... 13
Section 2.1. Fees.................................................................................. 13
Section 2.2. Prepayments........................................................................... 14
Section 2.3. Commitment Terminations............................................................... 17
Section 2.4. Place and Application of Payments..................................................... 18
Section 2.5. Substitution of Lenders............................................................... 19
SECTION 3. THE COLLATERAL AND GUARANTIES......................................................... 19
Section 3.1. Collateral............................................................................ 19
Section 3.2. Liens on Real Property................................................................ 20
Section 3.3. Guaranties............................................................................ 21
Section 3.4. Further Assurances.................................................................... 21
SECTION 4. DEFINITIONS; INTERPRETATION........................................................... 22
Section 4.1. Definitions........................................................................... 22
Section 4.2. Interpretation........................................................................ 43
Section 4.3. Change in Accounting Principles....................................................... 44
SECTION 5. REPRESENTATIONS AND WARRANTIES........................................................ 44
Section 5.1. Organization and Qualification........................................................ 44
Section 5.2. Subsidiaries.......................................................................... 44
Section 5.3. Authority and Validity of Obligations................................................. 45
Section 5.4. Use of Proceeds; Margin Stock......................................................... 46
Section 5.5. Financial Reports..................................................................... 46
Section 5.6. No Material Adverse Change............................................................ 46
Section 5.7. Full Disclosure....................................................................... 46
Section 5.8. Trademarks, Franchises, and Licenses.................................................. 47
Section 5.9. Governmental Authority and Licensing.................................................. 47
Section 5.10. Good Title............................................................................ 47
Section 5.11. Litigation and Other Controversies.................................................... 47
Section 5.12. Taxes................................................................................. 47
Section 5.13. Approvals............................................................................. 47
Section 5.14. Affiliate Transactions................................................................ 48
Section 5.15. Investment Company; Public Utility Holding Company.................................... 48
Section 5.16. ERISA................................................................................. 48
Section 5.17. Compliance with Laws.................................................................. 48
Section 5.18. Other Agreements...................................................................... 49
Section 5.19. Solvency.............................................................................. 49
Section 5.20. No Default............................................................................ 49
Section 5.21. Not a Trustee......................................................................... 49
Section 5.22. Benefit............................................................................... 49
Section 5.23. Indebtedness for Borrowed Money....................................................... 50
Section 5.24. No Immunity........................................................................... 50
Section 5.25. Copies of Documents................................................................... 50
Section 5.26. Own Enquiries......................................................................... 50
Section 5.27. Insurance............................................................................. 50
Section 5.28. No Related Bodies Corporate........................................................... 50
Section 5.29. Permanent Establishment in Australia.................................................. 50
Section 5.30. Native Title.......................................................................... 50
Section 5.31. Stamp Duty............................................................................ 50
SECTION 6. CONDITIONS PRECEDENT.................................................................. 50
Section 6.1. All Credit Events..................................................................... 51
Section 6.2. Initial Credit Event.................................................................. 52
Section 6.3. Post-Closing Items.................................................................... 55
SECTION 7. COVENANTS............................................................................. 56
Section 7.1. Maintenance of Business............................................................... 56
Section 7.2. Maintenance of Properties............................................................. 56
Section 7.3. Taxes and Assessments................................................................. 57
Section 7.4. Insurance............................................................................. 57
Section 7.5. Financial Reports..................................................................... 57
Section 7.6. Inspection............................................................................ 59
Section 7.7. Borrowings and Guaranties............................................................. 59
Section 7.8. Liens................................................................................. 60
Section 7.9. Investments, Acquisitions, Loans and Advances......................................... 61
Section 7.10. Mergers, Consolidations and Sales..................................................... 62
Section 7.11. Maintenance of Subsidiaries........................................................... 63
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Section 7.12. Dividends and Certain Other Restricted Payments....................................... 63
Section 7.13. ERISA................................................................................. 63
Section 7.14. Compliance with Laws.................................................................. 64
Section 7.15. Burdensome Contracts With Affiliates.................................................. 65
Section 7.16. No Changes in Fiscal Year............................................................. 65
Section 7.17. Subsidiaries.......................................................................... 65
Section 7.18. Change in the Nature of Business...................................................... 65
Section 7.19. Use of Loan Proceeds.................................................................. 65
Section 7.20. No Restrictions....................................................................... 65
Section 7.21. Subordinated Debt..................................................................... 66
Section 7.22. Financial Covenants................................................................... 66
Section 7.23. Accounting Records.................................................................... 66
Section 7.24. Conduct of Business................................................................... 66
Section 7.25. No Default Certificate................................................................ 67
Section 7.26. Certain Authorization................................................................. 67
Section 7.27. Notice of Incorrect Representation.................................................... 67
Section 7.28. No Default............................................................................ 67
Section 7.29. Material Australian Documents......................................................... 67
Section 7.30. Native Title.......................................................................... 67
Section 7.31. Material Adverse Effect............................................................... 67
Section 7.32. Title Retention....................................................................... 68
Section 7.33. Deposit............................................................................... 68
Section 7.34. Constituent Documents................................................................. 68
SECTION 8. EVENTS OF DEFAULT AND REMEDIES........................................................ 68
Section 8.1. Events of Default..................................................................... 68
Section 8.2. Non-Bankruptcy Defaults............................................................... 71
Section 8.3. Bankruptcy Defaults................................................................... 71
Section 8.4. Collateral for Undrawn Letters of Credit.............................................. 71
Section 8.5. Notice of Default..................................................................... 72
Section 8.6. Expenses.............................................................................. 72
SECTION 9. CHANGE IN CIRCUMSTANCES............................................................... 72
Section 9.1. Change of Law......................................................................... 72
Section 9.2. Unavailability of Deposits or Inability to Ascertain, or Inadequacy of, LIBOR......... 73
Section 9.3. Increased Cost and Reduced Return..................................................... 73
Section 9.4. Lending Offices....................................................................... 75
Section 9.5. Discretion of U.S. Lender as to Manner of Funding..................................... 75
SECTION 10. THE ADMINISTRATIVE AGENT.............................................................. 75
Section 10.1. Appointment and Authorization of Administrative Agent................................. 75
Section 10.2. Administrative Agent and its Affiliates............................................... 75
Section 10.3. Action by Administrative Agent........................................................ 76
Section 10.4. Consultation with Experts............................................................. 76
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Section 10.5. Liability of Administrative Agent; Credit Decision.................................... 76
Section 10.6. Indemnity............................................................................. 77
Section 10.7. Resignation of Administrative Agent and Successor Administrative Agent................ 77
Section 10.8. U.S. L/C Issuers...................................................................... 78
Section 10.9. Hedging Liability and Funds Transfer and Deposit Account Liability Arrangements....... 78
Section 10.10. Designation of Additional Agents...................................................... 79
Section 10.11. Authorization to Release or Subordinate or Limit Liens................................ 79
SECTION 11. THE GUARANTEES........................................................................ 79
Section 11.1. The Guarantees........................................................................ 79
Section 11.2. Guarantee Unconditional............................................................... 80
Section 11.3. Discharge Only upon Payment in Full; Reinstatement in Certain Circumstances........... 80
Section 11.4. Subrogation........................................................................... 81
Section 11.5. Waivers............................................................................... 81
Section 11.6. Limit on Recovery..................................................................... 81
Section 11.7. Stay of Acceleration.................................................................. 81
Section 11.8. Benefit to Guarantors................................................................. 81
Section 11.9. Guarantor Covenants................................................................... 82
SECTION 12. MISCELLANEOUS......................................................................... 82
Section 12.1. Withholding Taxes..................................................................... 82
Section 12.2. No Waiver, Cumulative Remedies........................................................ 83
Section 12.3. Non-Business Days..................................................................... 83
Section 12.4. Documentary Taxes..................................................................... 83
Section 12.5. Survival of Representations........................................................... 83
Section 12.6. Survival of Indemnities............................................................... 84
Section 12.7. Sharing of Set-Off.................................................................... 84
Section 12.8. Notices............................................................................... 84
Section 12.9. Counterparts.......................................................................... 85
Section 12.10. Successors and Assigns................................................................ 85
Section 12.11. Participants.......................................................................... 85
Section 12.12. Assignments........................................................................... 85
Section 12.13. Amendments............................................................................ 86
Section 12.14. Headings.............................................................................. 87
Section 12.15. Costs and Expenses; Indemnification................................................... 87
Section 12.16. Set-off............................................................................... 89
Section 12.17. Entire Agreement...................................................................... 89
Section 12.18. Governing Law......................................................................... 89
Section 12.19. Severability of Provisions............................................................ 89
Section 12.20. Excess Interest....................................................................... 89
Section 12.21. Construction.......................................................................... 90
Section 12.22. Lender's Obligations Several.......................................................... 90
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Section 12.23. Submission to Jurisdiction; Waiver of Jury Trial...................................... 90
Section 12.23. Australian Trustee.................................................................... 90
EXHIBIT A -- Notice of Payment Request
EXHIBIT B -- Notice of Borrowing
EXHIBIT C -- Notice of Continuation/Conversion
EXHIBIT D-1 -- U.S. Term Note
EXHIBIT D-2 -- U.S. Revolving Note
EXHIBIT D-3 -- U.S. Swing Note
EXHIBIT E -- Compliance Certificate
EXHIBIT F -- Additional Guarantor Supplement
EXHIBIT G -- Assignment and Acceptance
EXHIBIT H -- Opinion of U.S. Counsel
SCHEDULE 1 -- Commitments
SCHEDULE 5.2 -- Subsidiaries
SCHEDULE 7.9 -- Existing Investments
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CREDIT AGREEMENT
This Credit Agreement is entered into as of October 7, 2003, by and
among PENFORD CORPORATION, a Washington corporation ("PenCorp" or the "U.S.
Borrower") and PENFORD AUSTRALIA LIMITED ACN 003 780 229 and PENFORD HOLDINGS
PTY. LIMITED ACN 094 279 339 ("Penford Holdings" and, together with Penford
Australia Limited, individually, an "Australian Borrower" and collectively the
"Australian Borrowers", the Australian Borrowers and together with the U.S.
Borrower, collectively, the "Borrowers," and, individually, a "Borrower"), the
direct and indirect Subsidiaries of the Borrowers from time to time party to
this Agreement, as Guarantors, the several financial institutions from time to
time party to this Agreement, as U.S. Lenders, Australia and New Zealand Banking
Group Limited ABN 11 005 357 522, as Australian Lender, and in its capacity as
the appointed agent of debenture holders under the Debenture Trust Deed and as
"Agent" under the Syndicated Facility Agreement (in each such capacity,
"Australian Agent"), ANZ CAPEL COURT LIMITED ABN 30 004 768 807 in its capacity
as "Trustee" under the Debenture Trust Deed and in its capacity as "Security
Trustee" under the Security Trust Deed (in each such capacity, "Australian
Trustee") and HARRIS TRUST AND SAVINGS BANK as Administrative Agent as provided
herein. All capitalized terms used herein without definition shall have the same
meanings herein as such terms are defined in Section 4.1 hereof.
PRELIMINARY STATEMENT
The Borrowers have requested, and the U.S. Lenders and the Australian
Lender have agreed to extend, certain credit facilities on the terms and
conditions of this Agreement and the Australian Credit Agreements.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. THE U.S. CREDIT FACILITIES.
Section 1.1. U.S. Term Loan Commitments. Subject to the terms and
conditions hereof, each U.S. Lender, by its acceptance hereof, severally agrees
to make a loan (individually a "U.S. Term Loan" and collectively for all the
U.S. Lenders the "U.S. Term Loans") in U.S. Dollars to the U.S. Borrower in the
amount of such U.S. Lender's U.S. Term Loan Commitment. The U.S. Term Loans
shall be advanced in a single Borrowing on the Closing Date and shall be made
ratably by the U.S. Lenders in proportion to their respective U.S. Term Loan
Percentages. As provided in Section 1.6(a) hereof, the U.S. Borrower may elect
that the U.S. Term Loans be outstanding as Base Rate Loans or Eurodollar Loans.
No amount repaid or prepaid on any U.S. Term Loan may be borrowed again.
Section 1.2. U.S. Revolving Credit Commitments. Subject to the terms
and conditions hereof, each U.S. Lender, by its acceptance hereof, severally
agrees to make a loan or loans (individually a "U.S. Revolving Loan" and
collectively the "U.S. Revolving Loans") in U.S.
Dollars to the U.S. Borrower from time to time on a revolving basis up to the
amount of such U.S. Lender's U.S. Revolving Credit Commitment, subject to any
reductions thereof pursuant to the terms hereof, before the Revolving Credit
Termination Date. The sum of the aggregate principal amount of U.S. Revolving
Loans, U.S. Swing Loans, and U.S. L/C Obligations at any time outstanding shall
not exceed the U.S. Revolving Credit Commitments in effect at such time. Each
Borrowing of U.S. Revolving Loans shall be made ratably by the U.S. Lenders in
proportion to their respective U.S. Revolver Percentages. As provided in Section
1.6(a) hereof, the U.S. Borrower may elect that each Borrowing of U.S. Revolving
Loans be either Base Rate Loans or Eurodollar Loans. U.S. Revolving Loans may be
repaid and the principal amount thereof reborrowed before the Revolving Credit
Termination Date, subject to the terms and conditions hereof.
Section 1.3. U.S. Letters of Credit. (a) General Terms. Subject to the
terms and conditions hereof, as part of the U.S. Revolving Credit, the U.S. L/C
Issuer shall issue standby and commercial letters of credit (each a "U.S. Letter
of Credit") for the U.S. Borrower's account or for the account of the U.S.
Borrower and one or more of its Subsidiaries in an aggregate undrawn face amount
up to the U.S. L/C Sublimit. Each U.S. Letter of Credit shall be issued by the
U.S. L/C Issuer, but each U.S. Lender shall be obligated to reimburse the U.S.
L/C Issuer for such U.S. Lender's U.S. Revolver Percentage of the amount of each
drawing thereunder and, accordingly, each U.S. Letter of Credit shall constitute
usage of the U.S. Revolving Credit Commitment of each U.S. Lender pro rata in an
amount equal to its U.S. Revolver Percentage of the U.S. L/C Obligations then
outstanding.
(b) Applications. At any time before the Revolving Credit
Termination Date, the U.S. L/C Issuer shall, at the request of the U.S.
Borrower, issue one or more U.S. Letters of Credit in U.S. Dollars, in a form
satisfactory to the U.S. L/C Issuer, with expiration dates no later than the
earlier of 12 months from the date of issuance (or which are cancelable not
later than 12 months from the date of issuance and each renewal) or 30 days
prior to the Revolving Credit Termination Date, in an aggregate face amount as
set forth above, upon the receipt of an application duly executed by the U.S.
Borrower and, if such U.S. Letter of Credit is for the account of one of its
Subsidiaries, such Subsidiary for the relevant U.S. Letter of Credit in the form
then customarily prescribed by the U.S. L/C Issuer for the U.S. Letter of Credit
requested (each an "Application"). Notwithstanding anything contained in any
Application to the contrary: (i) the U.S. Borrower shall pay fees in connection
with each U.S. Letter of Credit as set forth in Section 2.1 hereof, (ii) except
as otherwise provided in Section 2.2 hereof, before the occurrence of a Default
or an Event of Default, the U.S. L/C Issuer will not call for the funding by the
U.S. Borrower of any amount under a U.S. Letter of Credit before being presented
with a drawing thereunder, and (iii) if the U.S. L/C Issuer is not timely
reimbursed for the amount of any drawing under a U.S. Letter of Credit on the
date such drawing is paid, the obligation of the U.S. Borrower to reimburse the
U.S. L/C Issuer for the amount of such drawing shall bear interest (which the
U.S. Borrower hereby promises to pay) from and after the date such drawing is
paid at a rate per annum equal to the sum of 2.0% plus the Applicable Margin
plus the Base Rate from time to time in effect (computed on the basis of a year
of 365 or 366 days, as the case may be, and the actual number of days elapsed).
If the U.S. L/C Issuer issues any U.S. Letter of Credit with an expiration date
that is automatically extended unless the U.S. L/C Issuer gives notice that the
expiration date will not so extend beyond its then scheduled expiration date,
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unless the Required Lenders instruct the U.S. L/C Issuer otherwise, the U.S. L/C
Issuer will give such notice of non-renewal before the time necessary to prevent
such automatic extension if before such required notice date: (i) the expiration
date of such U.S. Letter of Credit if so extended would be after the Revolving
Credit Termination Date, (ii) the U.S. Revolving Credit Commitments have been
terminated, or (iii) a Default or an Event of Default exists and the
Administrative Agent, at the request or with the consent of the Required
Lenders, has given the U.S. L/C Issuer instructions not to so permit the
extension of the expiration date of such U.S. Letter of Credit. The U.S. L/C
Issuer agrees to issue amendments to the U.S. Letter(s) of Credit increasing the
amount, or extending the expiration date, thereof at the request of the U.S.
Borrower subject to the conditions of Section 6 hereof and the other terms of
this Section 1.3.
(c) The Reimbursement Obligations. Subject to Section 1.3(b)
hereof, the obligation of the U.S. Borrower to reimburse the U.S. L/C Issuer for
all drawings under a U.S. Letter of Credit (a "Reimbursement Obligation") shall
be governed by the Application related to such U.S. Letter of Credit, except
that reimbursement shall be made by no later than 12:00 Noon (Chicago time) on
the date when each drawing is to be paid if the U.S. Borrower has been informed
of such drawing by the U.S. L/C Issuer on or before 11:00 a.m. (Chicago time) on
the date when such drawing is to be paid or, if notice of such drawing is given
to the U.S. Borrower after 11:00 a.m. (Chicago time) on the date when such
drawing is to be paid, by the end of such day, in immediately available funds at
the Administrative Agent's principal office in Chicago, Illinois or such other
office as the Administrative Agent may designate in writing to the U.S. Borrower
(who shall thereafter cause to be distributed to the U.S. L/C Issuer such
amount(s) in like funds). If the U.S. Borrower does not make any such
reimbursement payment on the date due and the U.S. Participating Lenders fund
their participations therein in the manner set forth in Section 1.3(d) below,
then all payments thereafter received by the Administrative Agent in discharge
of any of the relevant Reimbursement Obligations shall be distributed in
accordance with Section 1.3(d) below.
(d) The U.S. Participating Interests. Each U.S. Lender (other than
the U.S. Lender acting as U.S. L/C Issuer in issuing the relevant U.S. Letter of
Credit), by its acceptance hereof, severally agrees to purchase from the U.S.
L/C Issuer, and the U.S. L/C Issuer hereby agrees to sell to each such U.S.
Lender (a "U.S. Participating Lender"), an undivided percentage participating
interest (a "U.S. Participating Interest"), to the extent of its U.S. Revolver
Percentage, in each U.S. Letter of Credit issued by, and each Reimbursement
Obligation owed to, the U.S. L/C Issuer. Upon any failure by the U.S. Borrower
to pay any Reimbursement Obligation at the time required on the date the related
drawing is to be paid, as set forth in Section 1.3(c) above, or if the U.S. L/C
Issuer is required at any time to return to the U.S. Borrower or to a trustee,
receiver, liquidator, custodian or other Person any portion of any payment of
any Reimbursement Obligation, each U.S. Participating Lender shall, not later
than the Business Day it receives a certificate in the form of Exhibit A hereto
from the U.S. L/C Issuer (with a copy to the Administrative Agent) to such
effect, if such certificate is received before 1:00 p.m. (Chicago time), or not
later than 1:00 p.m. (Chicago time) the following Business Day, if such
certificate is received after such time, pay to the Administrative Agent for the
account of the U.S. L/C Issuer an amount equal to such U.S. Participating
Lender's U.S. Revolver Percentage of such unpaid or recaptured Reimbursement
Obligation together with interest on such amount accrued from the date the
related payment was made by the U.S. L/C
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Issuer to the date of such payment by such U.S. Participating Lender at a rate
per annum equal to: (i) from the date the related payment was made by the U.S.
L/C Issuer to the date two (2) Business Days after payment by such U.S.
Participating Lender is due hereunder, the Federal Funds Rate for each such day
and (ii) from the date two (2) Business Days after the date such payment is due
from such U.S. Participating Lender to the date such payment is made by such
U.S. Participating Lender, the Base Rate in effect for each such day. Each such
U.S. Participating Lender shall thereafter be entitled to receive its U.S.
Revolver Percentage of each payment received in respect of the relevant
Reimbursement Obligation and of interest paid thereon, with the U.S. L/C Issuer
retaining its U.S. Revolver Percentage thereof as a U.S. Lender hereunder.
The several obligations of the U.S. Participating Lenders to the U.S.
L/C Issuer under this Section 1.3 shall be absolute, irrevocable and
unconditional under any and all circumstances whatsoever and shall not be
subject to any set-off, counterclaim or defense to payment which any U.S.
Participating Lender may have or have had against the U.S. Borrower, the U.S.
L/C Issuer, the Administrative Agent, any U.S. Lender or any other Person
whatsoever. Without limiting the generality of the foregoing, such obligations
shall not be affected by any Default or Event of Default or by any reduction or
termination of any Commitment of any U.S. Lender, and each payment by a U.S.
Participating Lender under this Section 1.3 shall be made without any offset,
abatement, withholding or reduction whatsoever.
(e) Indemnification. The U.S. Participating Lenders shall, to the
extent of their respective U.S. Revolver Percentages, indemnify the U.S. L/C
Issuer (to the extent not reimbursed by the U.S. Borrower) against any cost,
expense (including reasonable counsel fees and disbursements), claim, demand,
action, loss or liability (except such as result from the U.S. L/C Issuer's
gross negligence or willful misconduct) that the U.S. L/C Issuer may suffer or
incur in connection with any U.S. Letter of Credit issued by it. The obligations
of the U.S. Participating Lenders under this Section 1.3(e) and all other parts
of this Section 1.3 shall survive termination of this Agreement and of all
Applications, U.S. Letters of Credit, and all drafts and other documents
presented in connection with drawings thereunder.
(f) Manner of Requesting a U.S. Letter of Credit. The U.S.
Borrower shall provide at least five (5) Business Days' advance written notice
to the Administrative Agent of each request for the issuance of a U.S. Letter of
Credit, such notice in each case to be accompanied by a Application for such
U.S. Letter of Credit properly completed and executed by the U.S. Borrower and,
in the case of an extension or an increase in the amount of a U.S. Letter of
Credit, a written request therefor, in a form acceptable to the Administrative
Agent and the U.S. L/C Issuer, in each case, together with the fees called for
by this Agreement. The Administrative Agent shall promptly notify the U.S. L/C
Issuer of the Administrative Agent's receipt of each such notice and the U.S.
L/C Issuer shall promptly notify the Administrative Agent and the U.S. Lenders
of the issuance of the U.S. Letter of Credit so requested.
Section 1.4. Applicable Interest Rates. (a) Base Rate Loans. Each Base
Rate Loan made or maintained by a U.S. Lender shall bear interest during each
Interest Period it is outstanding (computed on the basis of a year of 365 or 366
days, as the case may be, and the actual days elapsed) on the unpaid principal
amount thereof from the date such Loan is
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advanced, continued or created by conversion from a Eurodollar Loan until
maturity (whether by acceleration or otherwise) at a rate per annum equal to the
sum of the Applicable Margin plus the Base Rate from time to time in effect,
payable on the last day of its Interest Period and at maturity (whether by
acceleration or otherwise).
(b) Eurodollar Loans. Each Eurodollar Loan made or maintained by a
U.S. Lender shall bear interest during each Interest Period it is outstanding
(computed on the basis of a year of 360 days and actual days elapsed) on the
unpaid principal amount thereof from the date such Loan is advanced, continued
or created by conversion from a Base Rate Loan until maturity (whether by
acceleration or otherwise) at a rate per annum equal to the sum of the
Applicable Margin plus the Adjusted LIBOR applicable for such Interest Period,
payable on the last day of the Interest Period and at maturity (whether by
acceleration or otherwise), and, if the applicable Interest Period is longer
than three months, on each day occurring every three months after the
commencement of such Interest Period.
(c) Rate Determinations. The Administrative Agent shall determine
each interest rate applicable to the Loans made in U.S. Dollars and the
Reimbursement Obligations hereunder, and its determination thereof shall be
conclusive and binding except in the case of manifest error.
Section 1.5. Minimum Borrowing Amounts; Maximum Eurodollar Loans. Each
Borrowing of Base Rate Loans advanced under a Credit denominated in U.S. Dollars
shall be in an amount not less than $250,000, or such greater amount which is an
integral multiple of $50,000. Each Borrowing of Eurodollar Loans advanced,
continued or converted under a Credit denominated in U.S. Dollars shall be in an
amount equal to $500,000 or such greater amount which is an integral multiple of
$100,000. Without the Administrative Agent's consent, there shall not be more
than 10 Borrowings of Eurodollar Loans outstanding under a Credit denominated in
U.S. Dollars at any one time.
Section 1.6. Manner of Borrowing Loans and Designating Applicable
Interest Rates. (a) Notice to the Administrative Agent. The U.S. Borrower shall
give notice to the Administrative Agent by no later than 1:00 p.m. (Chicago
time): (i) at least 3 Business Days before the date on which the U.S. Borrower
requests the U.S. Lenders to advance a Borrowing of Eurodollar Loans and (ii) on
the date the U.S. Borrower requests the U.S. Lenders to advance a Borrowing of
Base Rate Loans. The Loans included in each Borrowing shall bear interest
initially at the type of rate specified in such notice of a new Borrowing.
Thereafter, the U.S. Borrower may from time to time elect to change or continue
the type of interest rate borne by each Borrowing or, subject to Section 1.5's
minimum amount requirement for each outstanding Borrowing, a portion thereof, as
follows: (i) if such Borrowing is of Eurodollar Loans, on the last day of the
Interest Period applicable thereto, the U.S. Borrower may continue part or all
of such Borrowing as Eurodollar Loans or convert part or all of such Borrowing
into Base Rate Loans or (ii) if such Borrowing is of Base Rate Loans, on any
Business Day, the U.S. Borrower may convert all or part of such Borrowing into
Eurodollar Loans for an Interest Period or Interest Periods specified by the
U.S. Borrower. The U.S. Borrower shall give all such notices requesting the
advance, continuation or conversion of a Borrowing to the Administrative Agent
by telephone or telecopy (which notice shall be irrevocable once given and, if
by telephone, shall be promptly confirmed in writing), substantially in the form
attached hereto as Exhibit B (Notice
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of Borrowing) or Exhibit C (Notice of Continuation/Conversion), as applicable,
or in such other form acceptable to the Administrative Agent. Notice of the
continuation of a Borrowing of Eurodollar Loans for an additional Interest
Period or of the conversion of part or all of a Borrowing of Base Rate Loans
into Eurodollar Loans must be given by no later than 1:00 p.m. (Chicago time) at
least 3 Business Days before the date of the requested continuation or
conversion. All such notices concerning the advance, continuation or conversion
of a Borrowing shall specify the date of the requested advance, continuation or
conversion of a Borrowing (which shall be a Business Day), the amount of the
requested Borrowing to be advanced, continued or converted, the type of Loans to
comprise such new, continued or converted Borrowing and, if such Borrowing is to
be comprised of Eurodollar Loans, the Interest Period applicable thereto. The
U.S. Borrower agrees that the Administrative Agent may rely on any such
telephonic or telecopy notice given by any person the Administrative Agent in
good faith believes is an Authorized Representative without the necessity of
independent investigation and, in the event any such notice by telephone
conflicts with any written confirmation, such telephonic notice shall govern if
the Administrative Agent has acted in reliance thereon.
(b) Notice to the U.S. Lenders. The Administrative Agent shall
give prompt telephonic or telecopy notice to each U.S. Lender of any notice from
the U.S. Borrower received pursuant to Section 1.6(a) above and, if such notice
requests the U.S. Lenders to make Eurodollar Loans, the Administrative Agent
shall give notice to the U.S. Borrower and each U.S. Lender by like means of the
interest rate applicable thereto promptly after the Administrative Agent has
made such determination.
(c) U.S. Borrower's Failure to Notify; Automatic Continuations and
Conversions. Any outstanding Borrowing of Base Rate Loans shall automatically be
continued for an additional Interest Period on the last day of its then current
Interest Period unless the U.S. Borrower has notified the Administrative Agent
within the period required by Section 1.6(a) that the U.S. Borrower intends to
convert such Borrowing, subject to Section 6.1 hereof, into a Borrowing of
Eurodollar Loans or such Borrowing is prepaid in accordance with Section 2.2(a).
If the U.S. Borrower fail to give notice pursuant to Section 1.6(a) above of the
continuation or conversion of any outstanding principal amount of a Borrowing of
Eurodollar Loans before the last day of its then current Interest Period within
the period required by Section 1.6(a) or, whether or not such notice has been
given, one or more of the conditions set forth in Section 6.1 for the
continuation or conversion of a Borrowing of Eurodollar Loans would not be
satisfied, and such Borrowing is not prepaid in accordance with Section 2.2(a),
such Borrowing shall automatically be converted into a Borrowing of Base Rate
Loans. In the event the U.S. Borrower fails to give notice pursuant to Section
1.6(a) above of a Borrowing equal to the amount of a Reimbursement Obligation
and has not notified the Administrative Agent by 1:00 p.m. (Chicago time) on the
day such Reimbursement Obligation becomes due that it intends to repay such
Reimbursement Obligation through funds not borrowed under this Agreement, the
U.S. Borrower shall be deemed to have requested a Borrowing of Base Rate Loans
under the Revolving Credit (or, at the option of the Administrative Agent, under
the U.S. Swing Line) on such day in the amount of the Reimbursement Obligation
then due, which Borrowing shall be applied to pay the Reimbursement Obligation
then due.
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(d) Disbursement of Loans. Not later than 2:00 p.m. (Chicago time)
on the date of any requested advance of a new Borrowing, subject to Section 6
hereof, each U.S. Lender shall make available its Loan comprising part of such
Borrowing in funds immediately available at the principal office of the
Administrative Agent in Chicago, Illinois. The Administrative Agent shall make
the proceeds of each new Borrowing available to the U.S. Borrower at the
Administrative Agent's principal office in Chicago, Illinois.
(e) Administrative Agent Reliance on U.S. Lender Funding. Unless
the Administrative Agent shall have been notified by a U.S. Lender prior to (or,
in the case of a Borrowing of Base Rate Loans, by 2:00 p.m. (Chicago time) on)
the date on which such U.S. Lender is scheduled to make payment to the
Administrative Agent of the proceeds of a Loan (which notice shall be effective
upon receipt) that such U.S. Lender does not intend to make such payment, the
Administrative Agent may assume that such U.S. Lender has made such payment when
due and the Administrative Agent may in reliance upon such assumption (but shall
not be required to) make available to the U.S. Borrower the proceeds of the Loan
to be made by such U.S. Lender and, if any U.S. Lender has not in fact made such
payment to the Administrative Agent, such U.S. Lender shall, on demand, pay to
the Administrative Agent the amount made available to the U.S. Borrower
attributable to such U.S. Lender together with interest thereon in respect of
each day during the period commencing on the date such amount was made available
to the U.S. Borrower and ending on (but excluding) the date such U.S. Lender
pays such amount to the Administrative Agent at a rate per annum equal to: (i)
from the date the related advance was made by the Administrative Agent to the
date two (2) Business Days after payment by such U.S. Lender is due hereunder,
the Federal Funds Rate for each such day and (ii) from the date two (2) Business
Days after the date such payment is due from such U.S. Lender to the date such
payment is made by such U.S. Lender, the Base Rate in effect for each such day.
If such amount is not received from such U.S. Lender by the Administrative Agent
immediately upon demand, the U.S. Borrower will, on demand, repay to the
Administrative Agent the proceeds of the Loan attributable to such U.S. Lender
with interest thereon at a rate per annum equal to the interest rate applicable
to the relevant Loan, but without such payment being considered a payment or
prepayment of a Loan under Section 1.11 hereof so that the U.S. Borrower will
have no liability under such Section with respect to such payment.
Section 1.7. Interest Periods. As provided in Sections 1.6(a) and 1.12
hereof with respect to any Borrowing made pursuant to Section 1 hereof, at the
time of each request to advance, continue or create by conversion a Borrowing of
Eurodollar Loans or U.S. Swing Loans, the U.S. Borrower shall select an Interest
Period applicable to such Loans from among the available options. With respect
to any Borrowing made pursuant to Section 1 hereof, the term "Interest Period"
means the period commencing on the date a Borrowing of Loans is advanced,
continued or created by conversion and ending: (a) in the case of Base Rate
Loans, on the last day of the calendar quarter (i.e., the last day of March,
June, September or December, as applicable) in which such Borrowing is advanced,
continued or created by conversion (or on the last day of the following calendar
quarter if such Loan is advanced, continued or created by conversion on the last
day of a calendar quarter) and (b) in the case of a Eurodollar Loan, 1, 2, 3 or
6 months thereafter, and (c) in the case of a U.S. Swing Loan, on the date 1 to
5 days thereafter as mutually agreed to by the U.S. Borrower and the
Administrative Agent; provided, however, that:
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(a) any Interest Period for a Borrowing of U.S. Revolving
Loans or U.S. Swing Loans consisting of Base Rate Loans that otherwise
would end after the Revolving Credit Termination Date shall end on the
Revolving Credit Termination Date, and any Interest Period for a
Borrowing of U.S. Term Loans consisting of Base Rate Loans that
otherwise would end after the final maturity date of the U.S. Term
Loans shall end on the final maturity date of the U.S. Term Loans;
(b) no Interest Period with respect to any portion of the
U.S. Revolving Loans or U.S. Swing Loans shall extend beyond the
Revolving Credit Termination Date, no Interest Period with respect to
any portion of the U.S. Term Loans shall extend beyond the final
maturity date of the U.S. Term Loans;
(c) no Interest Period with respect to any portion of the
U.S. Term Loans consisting of Eurodollar Loans shall extend beyond a
date on which any U.S. Borrower is required to make a scheduled payment
of principal on the U.S. Term Loans, unless the sum of (a) the
aggregate principal amount of U.S. Term Loans that are Base Rate Loans
plus (b) the aggregate principal amount of U.S. Term Loans that are
Eurodollar Loans with Interest Periods expiring on or before such date
equals or exceeds the principal amount to be paid on the U.S. Term
Loans on such payment date;
(d) whenever the last day of any Interest Period would
otherwise be a day that is not a Business Day, the last day of such
Interest Period shall be extended to the next succeeding Business Day,
provided that, if such extension would cause the last day of an
Interest Period for a Borrowing of Eurodollar Loans to occur in the
following calendar month, the last day of such Interest Period shall be
the immediately preceding Business Day; and
(e) for purposes of determining an Interest Period for a
Borrowing of Eurodollar Loans, a month means a period starting on one
day in a calendar month and ending on the numerically corresponding day
in the next calendar month; provided, however, that if there is no
numerically corresponding day in the month in which such an Interest
Period is to end or if such an Interest Period begins on the last
Business Day of a calendar month, then such Interest Period shall end
on the last Business Day of the calendar month in which such Interest
Period is to end.
Section 1.8. Maturity of Loans. (a) Scheduled Payments of U.S. Term
Loans. The U.S. Borrower shall make principal payments on the U.S. Term Loans in
installments on the last day of each March, June, September, and December in
each year, commencing with the calendar quarter ending December 31, 2003, with
the amount of each such principal installment to equal the amount set forth in
Column B below shown opposite of the relevant due date as set forth in Column A
below:
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COLUMN A COLUMN B
SCHEDULED PRINCIPAL
PAYMENT DATE PAYMENT ON U.S. TERM LOANS
12/31/03 $ 800,000
03/31/04 $ 800,000
6/30/04 $ 800,000
9/30/04 $ 800,000
12/31/04 $1,000,000
3/31/05 $1,000,000
6/30/05 $1,000,000
9/30/05 $1,000,000
12/31/05 $1,200,000
3/31/06 $1,200,000
6/30/06 $1,200,000
9/30/06 $1,200,000
12/31/06 $1,200,000
3/31/07 $1,200,000
6/30/07 $1,200,000
9/30/07 $1,200,000
12/31/07 $1,200,000
3/31/08 $1,200,000
6/30/08 $1,200,000
9/30/08 $1,200,000
, it being agreed that the final payment of both principal and interest not
sooner paid on the U.S. Term Loans shall be due and payable on October 7, 2008,
the final maturity thereof. Each such principal payment shall be applied to the
U.S. Lenders holding the U.S. Term Loans pro rata based upon their U.S. Term
Loan Percentages.
(b) U.S. Revolving Loans and U.S. Swing Loans. Each U.S. Revolving
Loan and U.S. Swing Loan, both for principal and interest not sooner paid, shall
mature and become due and payable by the U.S. Borrower on the Revolving Credit
Termination Date.
Section 1.9. Default Rate. Notwithstanding anything to the contrary
contained in Section 1.4 hereof, while any Event of Default exists or after
acceleration, the U.S. Borrower shall pay interest (after as well as before
entry of judgment thereon to the extent permitted by law) on the principal
amount of all Loans owing by it at a rate per annum equal to:
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(a) for any Base Rate Loan or any U.S. Swing Loan bearing
interest based on the Base Rate, the sum of 2.0% plus the Applicable
Margin plus the Base Rate from time to time in effect; and
(b) for any Eurodollar Loan or any U.S. Swing Loan
bearing interest at the Administrative Agent's Quoted Rate, the sum of
2.0% plus the rate of interest in effect thereon at the time of such
default until the end of the Interest Period applicable thereto and,
thereafter, at a rate per annum equal to the sum of 2.0% plus the
Applicable Margin for Base Rate Loans plus the Base Rate from time to
time in effect;
provided, however, that in the absence of acceleration, any adjustments pursuant
to this Section shall be made at the election of the Administrative Agent,
acting at the request or with the consent of the Required Lenders, with written
notice to the U.S. Borrower. While any Event of Default exists or after
acceleration, interest shall be paid on demand of the Administrative Agent at
the request or with the consent of the Required Lenders.
Section 1.10. The Notes. (a) The U.S. Term Loan made to the U.S.
Borrower by a U.S. Lender shall be evidenced by a single promissory note of the
U.S. Borrower issued to such U.S. Lender in the form of Exhibit D-1 hereto. Each
such promissory note is hereinafter referred to as a "U.S. Term Note" and
collectively such promissory notes are referred to as the "U.S. Term Notes."
(b) The U.S. Revolving Loans made to the U.S. Borrower by a U.S.
Lender shall be evidenced by a single promissory note of the U.S. Borrower
issued to such U.S. Lender in the form of Exhibit D-2 hereto. Each such
promissory note is hereinafter referred to as a "U.S. Revolving Note" and
collectively such promissory notes are referred to as the "U.S. Revolving
Notes."
(c) The U.S. Swing Loans made to the U.S. Borrower by the
Administrative Agent shall be evidenced by a single promissory note of the U.S.
Borrower issued to the Administrative Agent in the form of Exhibit D-3 hereto.
Such promissory note is hereinafter referred to as the "U.S. Swing Note."
(d) Each U.S. Lender shall record on its books and records or on a
schedule to its appropriate Note the amount of each Loan advanced, continued or
converted by it, all payments of principal and interest and the principal
balance from time to time outstanding thereon, the type of such Loan, and, for
any Eurodollar Loan or U.S. Swing Loan, the Interest Period and the interest
rate applicable thereto. The record thereof, whether shown on such books and
records of a U.S. Lender or on a schedule to the relevant Note, shall be prima
facie evidence as to all such matters; provided, however, that the failure of
any U.S. Lender to record any of the foregoing or any error in any such record
shall not limit or otherwise affect the obligation of the U.S. Borrower to repay
all Loans made to it hereunder together with accrued interest thereon. At the
request of any U.S. Lender and upon such U.S. Lender tendering to the U.S.
Borrower the appropriate Note to be replaced, the U.S. Borrower shall furnish a
new Note to such U.S. Lender to replace any outstanding Note, and at such time
the first notation appearing on a schedule on
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the reverse side of, or attached to, such Note shall set forth the aggregate
unpaid principal amount of all Loans, if any, then outstanding thereon.
Section 1.11. Funding Indemnity. If any U.S. Lender shall incur any
loss, cost or expense (including, without limitation, any loss of profit, and
any loss, cost or expense incurred by reason of the liquidation or re-employment
of deposits or other funds acquired by such U.S. Lender to fund or maintain any
Eurodollar Loan or U.S. Swing Loan or the relending or reinvesting of such
deposits or amounts paid or prepaid to such U.S. Lender) as a result of:
(a) any payment, prepayment or conversion of a Eurodollar
Loan or U.S. Swing Loan on a date other than the last day of its
Interest Period,
(b) any failure (because of a failure to meet the
conditions of Section 6 or otherwise) by the U.S. Borrower to borrow or
continue a Eurodollar Loan or U.S. Swing Loan, or to convert a Base
Rate Loan into a Eurodollar Loan or U.S. Swing Loan, on the date
specified in a notice given pursuant to Section 1.6(a) or 1.12 hereof,
(c) any failure by the U.S. Borrower to make any payment
of principal on any Eurodollar Loan or U.S. Swing Loan when due
(whether by acceleration or otherwise), or
(d) any acceleration of the maturity of a Eurodollar Loan
or U.S. Swing Loan as a result of the occurrence of any Event of
Default hereunder,
then, upon the demand of such U.S. Lender, the U.S. Borrower shall pay
to such U.S. Lender such amount as will reimburse such U.S. Lender for
such loss, cost or expense. If any U.S. Lender makes such a claim for
compensation, it shall provide to the U.S. Borrower, with a copy to the
Administrative Agent, a certificate setting forth the amount of such
loss, cost or expense in reasonable detail (including an explanation of
the basis for and the computation of such loss, cost or expense) and
the amounts shown on such certificate shall be conclusive if reasonably
determined.
Section 1.12. U.S. Swing Loans. (a) Generally. Subject to the terms and
conditions hereof, as part of the U.S. Revolving Credit, the Administrative
Agent agrees to make loans to the U.S. Borrower under the U.S. Swing Line
(individually a "U.S. Swing Loan" and collectively the "U.S. Swing Loans") which
shall not in the aggregate at any time outstanding exceed the U.S. Swing Line
Sublimit. The U.S. Swing Loans may be availed of the U.S. Borrower from time to
time and Borrowings thereunder may be repaid and used again during the period
ending on the Revolving Credit Termination Date; provided that each U.S. Swing
Loan must be repaid on the last day of the Interest Period applicable thereto.
Each U.S. Swing Loan shall be in a minimum amount of $100,000 or such greater
amount which is an integral multiple of $50,000.
(b) Interest on U.S. Swing Loans. Each U.S. Swing Loan shall bear
interest until maturity (whether by acceleration or otherwise) at a rate per
annum equal to (i) the sum of the Base Rate plus the Applicable Margin for Base
Rate Loans under the U.S. Revolving Credit as from time to time in effect
(computed on the basis of a year of 365 or 366 days, as the case may
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be, for the actual number of days elapsed) or (ii) the Administrative Agent's
Quoted Rate (computed on the basis of a year of 360 days for the actual number
of days elapsed). Interest on each U.S. Swing Loan shall be due and payable
prior to such maturity on the last day of each Interest Period applicable
thereto.
(c) Requests for U.S. Swing Loans. The U.S. Borrower shall give
the Administrative Agent prior notice (which may be written or oral) no later
than (x) 12:00 Noon (Chicago time) on the date upon which the U.S. Borrower
requests that any U.S. Swing Loan be made at the Administrative Agent's Quoted
Rate and (y) 3:00 p.m. (Chicago time) on the date upon which the U.S. Borrower
requests that any U.S. Swing Loan be at the Base Rate, of the amount and date of
such U.S. Swing Loan, and the Interest Period requested therefor. Within 30
minutes after receiving such notice, the Administrative Agent shall in its
discretion quote an interest rate to the U.S. Borrower at which the
Administrative Agent would be willing to make such U.S. Swing Loan available to
the U.S. Borrower for the Interest Period so requested (the rate so quoted for a
given Interest Period being herein referred to as "Administrative Agent's Quoted
Rate"). The U.S. Borrower acknowledges and agrees that the interest rate quote
is given for immediate and irrevocable acceptance. If the U.S. Borrower does not
so immediately accept the Administrative Agent's Quoted Rate for the full amount
requested by the U.S. Borrower for such U.S. Swing Loan, the Administrative
Agent's Quoted Rate shall be deemed immediately withdrawn and such U.S. Swing
Loan shall bear interest at the rate per annum determined by adding the
Applicable Margin for Base Rate Loans under the U.S. Revolving Credit to the
Base Rate as from time to time in effect. If the U.S. Borrower requests that a
U.S. Swing Loan at the Base Rate, such U.S. Swing Loan shall bear interest at
the rate per annum determined by adding the Applicable Margin for Base Rate
Loans under the U.S. Revolving Credit to the Base Rate as from time to time in
effect. Subject to the terms and conditions hereof, the proceeds of such U.S.
Swing Loan shall be made available to the U.S. Borrower on the date so requested
at the offices of the Administrative Agent in Chicago, Illinois. Anything
contained in the foregoing to the contrary notwithstanding (i) the obligation of
the Administrative Agent to make U.S. Swing Loans shall be subject to all of the
terms and conditions of this Agreement and (ii) the Administrative Agent shall
not be obligated to make more than one U.S. Swing Loan during any one day.
(d) Refunding Loans. In its sole and absolute discretion, the
Administrative Agent may at any time, on behalf of the U.S. Borrower (which
hereby irrevocably authorizes the Administrative Agent to act on its behalf for
such purpose) and with notice to the U.S. Borrower, request each U.S. Lender to
make a U.S. Revolving Loan in the form of a Base Rate Loan in an amount equal to
such U.S. Lender's U.S. Revolver Percentage of the amount of the U.S. Swing
Loans outstanding on the date such notice is given. Unless an Event of Default
described in Section 8.1(j) or 8.1(k) exists with respect to the U.S. Borrower,
regardless of the existence of any other Event of Default, each U.S. Lender
shall make the proceeds of its requested U.S. Revolving Loan available to the
Administrative Agent, in immediately available funds, at the Administrative
Agent's principal office in Chicago, Illinois, before 12:00 Noon (Chicago time)
on the Business Day following the day such notice is given. The proceeds of such
Borrowing of U.S. Revolving Loans shall be immediately applied to repay the
outstanding U.S. Swing Loans.
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(e) Participations. If any U.S. Lender refuses or otherwise fails
to make a U.S. Revolving Loan when requested by the Administrative Agent
pursuant to Section 1.12(d) above (because an Event of Default described in
Section 8.1(j) or 8.1(k) exists with respect to the U.S. Borrower or otherwise),
such U.S. Lender will, by the time and in the manner such U.S. Revolving Loan
was to have been funded to the Administrative Agent, purchase from the
Administrative Agent an undivided participating interest in the outstanding U.S.
Swing Loans in an amount equal to its U.S. Revolver Percentage of the aggregate
principal amount of U.S. Swing Loans that were to have been repaid with such
U.S. Revolving Loans. Each U.S. Lender that so purchases a participation in a
U.S. Swing Loan shall thereafter be entitled to receive its U.S. Revolver
Percentage of each payment of principal received on the U.S. Swing Loan and of
interest received thereon accruing from the date such U.S. Lender funded to the
Administrative Agent its participation in such Loan. The several obligations of
the U.S. Lenders under this Section shall be absolute, irrevocable and
unconditional under any and all circumstances whatsoever and shall not be
subject to any set-off, counterclaim or defense to payment which any U.S. Lender
may have or have had against the U.S. Borrower, any other U.S. Lender or any
other Person whatever. Without limiting the generality of the foregoing, such
obligations shall not be affected by any Default or Event of Default or by any
reduction or termination of the Commitments of any U.S. Lender, and each payment
made by a U.S. Lender under this Section shall be made without any offset,
abatement, withholding or reduction whatsoever.
SECTION 2. FEES, PREPAYMENTS, TERMINATION OF COMMITMENTS, PLACE AND APPLICATION
OF PAYMENTS, SUBSTITUTION OF LENDERS, AND APPOINTMENT OF AGENT FOR
BORROWERS.
Section 2.1. Fees. (a) U.S. Revolving Credit Commitment Fee. The U.S.
Borrower shall pay to the Administrative Agent for the ratable account of the
U.S. Lenders in accordance with their U.S. Revolver Percentages a commitment fee
at the rate per annum equal to the Applicable Margin (computed on the basis of a
year of 360 days and the actual number of days elapsed) on the average daily
Unused U.S. Revolving Credit Commitments. Such commitment fee shall be payable
quarter-annually in arrears on the last day of each March, June, September, and
December in each year (commencing on December 31, 2003) and on the Revolving
Credit Termination Date, unless the U.S. Revolving Credit Commitments are
terminated in whole on an earlier date, in which event the commitment fee for
the period to the date of such termination in whole shall be paid on the date of
such termination.
(b) U.S. Letter of Credit Fees. On the date of issuance or
extension, or increase in the amount, of any U.S. Letter of Credit pursuant to
Section 1.3 hereof, the U.S. Borrower shall pay to the U.S. L/C Issuer for its
own account an issuance fee equal to 0.125% of the face amount of (or of the
increase in the face amount of) such U.S. Letter of Credit. Quarterly in
arrears, on the last day of each March, June, September, and December,
commencing on December 31, 2003, the U.S. Borrower shall pay to the
Administrative Agent, for the ratable benefit of the U.S. Lenders in accordance
with their U.S. Revolver Percentages, a letter of credit fee at a rate per annum
equal to the Applicable Margin (computed on the basis of a year of 360 days and
the actual number of days elapsed) in effect during each day of such quarter
applied to the daily average face amount of U.S. Letters of Credit outstanding
during such quarter. In addition, the U.S. Borrower shall pay to the U.S. L/C
Issuer for its own account the U.S. L/C Issuer's standard
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drawing, negotiation, amendment, and other administrative fees for each U.S.
Letter of Credit. Such standard fees referred to in the preceding sentence may
be established by the U.S. L/C Issuer from time to time.
(c) Administrative Agent Fees. The U.S. Borrower shall pay to the
Administrative Agent, for its own use and benefit, the fees agreed to between
the Administrative Agent and the U.S. Borrower in a fee letter dated October 7,
2003, or as otherwise agreed to in writing between them.
(d) Audit Fees. The U.S. Borrower shall pay to the Administrative
Agent for its own use and benefit charges for audits of the Collateral performed
by the Administrative Agent or its agents or representatives in such amounts as
the Administrative Agent may from time to time request (the Administrative Agent
acknowledging and agreeing that such charges shall be computed in the same
manner as it at the time customarily uses for the assessment of charges for
similar collateral audits); provided, however, that in the absence of any
Default and Event of Default, the U.S. Borrower shall not be required to pay the
Administrative Agent for more than one (1) such audit per calendar year.
Section 2.2. Prepayments. (a) Optional. The U.S. Borrower shall have
the privilege of prepaying without premium or penalty (except as set forth in
Section 1.11 hereof below) and in whole or in part (but, if in part, then: (i)
if such Borrowing is of Base Rate Loans, in an amount not less than $250,000,
(ii) if such Borrowing is of Eurodollar Loans, in an amount not less than
$250,000, and (iii) in each case, in an amount such that the minimum amount
required for a Borrowing pursuant to Sections 1.5 and 1.12 hereof remains
outstanding) any Borrowing of Eurodollar Loans at any time upon three (3)
Business Days' prior notice to the Administrative Agent by the U.S. Borrowers
or, in the case of a Borrowing of Base Rate Loans, notice delivered to the
Administrative Agent by the U.S. Borrower no later than 1:00 p.m. (Chicago time)
on the date of such prepayment. Each such prepayment to be made by the payment
of the principal amount to be prepaid and, in the case of any U.S. Term Loans or
Eurodollar Loans or U.S. Swing Loans, accrued interest thereon to the date fixed
for prepayment plus any amounts due the Lenders under Section 1.11.
(b) Mandatory. (i) If the U.S. Borrower or any Domestic Subsidiary
shall at any time or from time to time make or agree to make a Disposition or
shall suffer an Event of Loss resulting in Net Cash Proceeds in excess of
$1,000,000 individually or on a cumulative basis in any fiscal year of the
Borrowers, then (x) the U.S. Borrower shall promptly notify the Administrative
Agent of such proposed Disposition or Event of Loss (including the amount of the
estimated Net Cash Proceeds to be received by the U.S. Borrower or such
Subsidiary in respect thereof) and (y) promptly upon receipt by the U.S.
Borrower or such Subsidiary of the Net Cash Proceeds of such Disposition or
Event of Loss, the U.S. Borrower shall prepay the U.S. Term Loans (or all
outstanding Loans and U.S. L/C Obligations if an Event of Default exists) in an
aggregate amount equal to 100% of the amount of all such Net Cash Proceeds;
provided that in the case of each Disposition and Event of Loss, if the U.S.
Borrower states in its notice of such event that the U.S. Borrower or the
applicable Subsidiary intends to reinvest, within 180 days of the applicable
Disposition or receipt of Net Cash Proceeds from an Event of Loss, the Net Cash
Proceeds thereof in assets for use in the ordinary course of the U.S. Borrower's
or the applicable
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Subsidiary's business as then conducted, then so long as no Default or Event of
Default then exists, the U.S. Borrower shall not be required to make a mandatory
prepayment under this Section in respect of such Net Cash Proceeds to the extent
such Net Cash Proceeds are actually reinvested in such assets with such 180-day
period. Promptly after the end of such 180-day period, the U.S. Borrower shall
notify the Administrative Agent whether the U.S. Borrower or such Subsidiary has
reinvested such Net Cash Proceeds in such assets, and to the extent such Net
Cash Proceeds have not been so reinvested, the U.S. Borrower shall promptly
prepay the U.S. Term Loans (or all outstanding Loans and U.S. L/C Obligations if
an Event of Default exists) in the amount of such Net Cash Proceeds not so
reinvested. The amount of each such prepayment shall be applied on a ratable
basis among the relevant outstanding Obligations based on the principal amounts
thereof. If the Administrative Agent or the Required Lenders so request, all
proceeds of such Disposition or Event of Loss shall be deposited with the
Administrative Agent and held by it in the Collateral Account. So long as no
Default or Event of Default exists, the Administrative Agent is authorized to
disburse amounts representing such proceeds from the Collateral Account to or at
the U.S. Borrower's direction for application to or reimbursement for the costs
of replacing, rebuilding or restoring such Property.
(ii) If the Australian Borrower or any Subsidiary thereof shall at
any time or from time to time make or agree to make a Disposition or shall
suffer an Event of Loss resulting in Net Cash Proceeds in excess of $1,000,000
individually or on a cumulative basis in any fiscal year of the Borrowers, then
(x) the Australian Borrower shall promptly notify the Administrative Agent and
the Australian Lender of such proposed Disposition or Event of Loss (including
the amount of the estimated Net Cash Proceeds to be received by the Australian
Borrower or such Subsidiary in respect thereof) and (y) promptly upon receipt by
the Australian Borrower or such Subsidiary of the Net Cash Proceeds of such
Disposition or Event of Loss, Penford Holdings shall prepay the Australian Term
Loans (or all outstanding indebtedness, liabilities and obligations of the
Australian Borrowers under the Australian Credit Agreements if an Event of
Default exists) in an aggregate amount equal to 100% of the amount of all such
Net Cash Proceeds; provided that in the case of each Disposition and Event of
Loss, if the Australian Borrower states in its notice of such event that the
Australian Borrower or the applicable Subsidiary intends to reinvest, within 180
days of the applicable Disposition or receipt of Net Cash Proceeds from an Event
of Loss, the Net Cash Proceeds thereof in assets for use in the ordinary course
of the Australian Borrower's or the applicable Subsidiary's business as then
conducted, then so long as no Default or Event of Default then exists, Penford
Holdings shall not be required to make a mandatory prepayment under this Section
in respect of such Net Cash Proceeds to the extent such Net Cash Proceeds are
actually reinvested in such assets with such 180-day period. Promptly after the
end of such 180-day period, the Australian Borrower shall notify the
Administrative Agent and the Australian Lender whether the Australian Borrower
or such Subsidiary has reinvested such Net Cash Proceeds in such assets, and to
the extent such Net Cash Proceeds have not been so reinvested, Penford Holdings
shall promptly prepay the Australian Term Loans (or all outstanding
indebtedness, liabilities and obligations of the Australian Borrowers under the
Australian Credit Agreements if an Event of Default exists) in the amount of
such Net Cash Proceeds not so reinvested. The amount of each such prepayment
shall be applied on a ratable basis among the relevant outstanding Obligations
based on the principal amounts thereof. If the Administrative Agent, the
Australian Lender or the Required Lenders so request, all proceeds of such
Disposition or Event of Loss shall be deposited with the Australian Lender or
another bank
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or financial institution nominated by the Australian Lender and held by it in an
account of the Australian Borrower subject to a charge of, the Australian Lender
(the "Australian Collateral Account"). The Australian Borrower must take all
action and execute all documents reasonably required by the Australian Lender
for the purpose of taking and perfecting such security over the Australian
Collateral Account, and grant to the Australian Lender the right to operate the
Australian Collateral Account for the following purpose. So long as no Default
or Event of Default exists, the Australian Lender is authorized to operate the
Australian Collateral Account by withdrawing and disbursing amounts representing
such proceeds from the Australian Collateral Account to or at the Australian
Borrower's direction for application to or reimbursement for the costs of
replacing, rebuilding or restoring such Property.
(iii) If after the Closing Date the U.S. Borrower or any Subsidiary
shall issue new equity securities (whether common or preferred stock or
otherwise), other than equity securities issued in connection with the exercise
of employee stock options and capital stock issued to the seller of an Acquired
Business in connection with an Acquisition permitted hereby, the U.S. Borrower
shall promptly notify the Administrative Agent of the estimated Net Cash
Proceeds of such issuance to be received by or for the account of the U.S.
Borrower or such Subsidiary in respect thereof. Promptly upon receipt by the
U.S. Borrower or such Subsidiary of Net Cash Proceeds of such issuance, the U.S.
Borrower shall prepay the U.S. Term Loans and, on behalf of Penford Holdings,
the Australian Term Loan in an aggregate amount equal to 100% (or 50% if the
U.S. Borrower's Total Senior Funded Debt/EBITDA Ratio was less than 2.0 to 1.0
for two consecutive quarters immediately preceding the date of such required
payment) of the amount of such Net Cash Proceeds. The amount of each such
prepayment shall be applied on a ratable basis among the relevant outstanding
Obligations based on the principal amounts thereof. The U.S. Borrower
acknowledges that its performance hereunder shall not limit the rights and
remedies of the Lenders for any breach of Section 7.11 (Maintenance of
Subsidiaries) or Section 8.1(i) (Change of Control) hereof or any other terms of
the Loan Documents.
(iv) If after the Closing Date any Borrower or any Subsidiary shall
issue any Indebtedness for Borrowed Money, other than Indebtedness for Borrowed
Money permitted by Section 7.7(a)-(d) hereof, the U.S. Borrower shall promptly
notify the Administrative Agent of the estimated Net Cash Proceeds of such
issuance to be received by or for the account of such Borrower or such
Subsidiary in respect thereof. Promptly upon receipt by the U.S. Borrower or
such Subsidiary of Net Cash Proceeds of such issuance, the U.S. Borrower shall
prepay the U.S. Term Loans and, on behalf of Penford Holdings, the Australian
Term Loan in an aggregate amount equal to 100% of the amount of such Net Cash
Proceeds. The amount of each such prepayment shall be applied on a ratable basis
among the relevant outstanding Obligations based on the principal amounts
thereof. Each of the Borrowers acknowledges that its performance hereunder shall
not limit the rights and remedies of the Lenders for any breach of Section 7.7
hereof or any other terms of the Loan Documents.
(v) Within 90 days after the close of each year, beginning August
31, 2004, the U.S. Borrower shall prepay the U.S. Term Loans and, on behalf of
Penford Holdings, Australian Term Loan by an amount equal to 50% (the "Excess
Cash Flow Percentage") of Excess Cash Flow of the U.S. Borrower and its
Subsidiaries for the most recently completed fiscal year of the U.S. Borrower;
provided, however, if the U.S. Borrower's Total Senior Funded Debt/EBITDA Ratio
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is less than 2.0 to 1.0 for two consecutive quarters, then the Excess Cash Flow
Percentage shall be deemed to be 0% until such time as the U.S. Borrower's Total
Senior Funded Debt/EBITDA Ratio equals or exceeds 2.0 to 1.0. The amount of each
such prepayment shall be applied on a ratable basis among the relevant
outstanding Obligations based on the principal amounts thereof.
(vi) The U.S. Borrower shall, on each date the U.S. Revolving
Credit Commitments are reduced pursuant to Section 2.3 hereof, prepay the U.S.
Revolving Loans, U.S. Swing Loans, and, if necessary, prefund the U.S. L/C
Obligations by the amount, if any, necessary to reduce the sum of the aggregate
principal amount of U.S. Revolving Loans, U.S. Swing Loans, and U.S. L/C
Obligations then outstanding to the amount to which the U.S. Revolving Credit
Commitments have been so reduced.
(c) The Administrative Agent will promptly advise each Lender of
any notice of prepayment it receives from the U.S. Borrower. Any amount of U.S.
Revolving Loans and U.S. Swing Loans paid or prepaid before the Revolving Credit
Termination Date may, subject to the terms and conditions of this Agreement, be
borrowed, repaid and borrowed again. No amount of the U.S. Term Loans paid or
prepaid may be reborrowed, and, in the case of any partial prepayment, such
prepayment shall be applied to the relevant Loans in the reverse order of
maturity on a ratable basis among all remaining payments on the relevant Loans
based on the principal amounts thereof.
(d) Unless the applicable Borrower otherwise direct, prepayments
of Loans made in U.S. Dollars under Section 2.2(b) shall be applied first to
Borrowings of Base Rate Loans until payment in full thereof with any balance
applied to Borrowings of Eurodollar Loans in the order in which their Interest
Periods expire. Each prepayment of Loans under Section 2.2(b) shall be made by
the payment of the principal amount to be prepaid and, in the case of any U.S.
Term Loans or Eurodollar Loans or U.S. Swing Loans or Australian Term Loan,
accrued interest thereon to the date of prepayment together with any amounts due
the Lenders under Section 1.11 hereof. Each prefunding of U.S. L/C Obligations
shall be made in accordance with Section 8.4 hereof.
Section 2.3. Commitment Terminations. (a) Optional U.S. Revolving
Credit Terminations. The U.S. Borrower shall have the right at any time and from
time to time, upon five (5) Business Days' prior written notice to the
Administrative Agent (or such shorter time period agreed to by the
Administrative Agent), to terminate the U.S. Revolving Credit Commitments
without premium or penalty and in whole or in part, any partial termination to
be (i) in an amount not less than $1,000,000 and (ii) allocated ratably among
the U.S. Lenders in proportion to their respective U.S. Revolver Percentages,
provided that the U.S. Revolving Credit Commitments may not be reduced to an
amount less than the sum of the aggregate principal amount of U.S. Revolving
Loans, U.S. Swing Loans, and U.S. L/C Obligations then outstanding. Any
termination of the U.S. Revolving Credit Commitments below the U.S. L/C Sublimit
or U.S. Swing Line Sublimit then in effect shall reduce the U.S. L/C Sublimit
and U.S. Swing Line Sublimit, as applicable, by a like amount. The
Administrative Agent shall give prompt notice to each U.S. Lender of any such
termination of the U.S. Revolving Credit Commitments.
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(b) Mandatory Revolving Credit Termination. If at any time Net
Cash Proceeds or Excess Cash Flow remain after the prepayment of the U.S. Term
Loans in full pursuant to Section 2.2(b) hereof, the U.S. Revolving Credit
Commitments shall ratably terminate by an amount equal to 100% of such excess
proceeds.
(c) Any termination of the Commitments pursuant to this Section
2.3 may not be reinstated.
Section 2.4. Place and Application of Payments. All payments of
principal of and interest on the Loans made in U.S. Dollars and the
Reimbursement Obligations, and of all other Obligations payable by the U.S.
Borrower under this Agreement and the other Loan Documents, shall be made by the
U.S. Borrower to the Administrative Agent by no later than 12:00 Noon (Chicago
time) on the due date thereof at the office of the Administrative Agent in
Chicago, Illinois (or such other location as the Administrative Agent may
designate to the U.S. Borrower) for the benefit of the Lenders entitled thereto.
Any payments received after such time shall be deemed to have been received by
the Administrative Agent on the next Business Day. All such payments shall be
made in the case of U.S. Dollars, in immediately available funds at the place of
payment, in each case without set-off or counterclaim. The Administrative Agent
will promptly thereafter cause to be distributed like funds relating to the
payment of principal or interest on Loans and on Reimbursement Obligations in
which the U.S. Lenders have purchased U.S. Participating Interests ratably to
the Lenders and like funds relating to the payment of any other amount payable
to any Lender to such Lender, in each case to be applied in accordance with the
terms of this Agreement.
Anything contained herein to the contrary notwithstanding, all payments
and collections received in respect of the Obligations of the U.S. Borrower and
all proceeds of the Collateral provided by the U.S. Borrower and the U.S.
Guarantors received, in each instance, by the Administrative Agent or any of the
Lenders after the occurrence and during the continuation of an Event of Default,
shall be remitted to the Administrative Agent and distributed as follows:
(a) first, to the payment of any outstanding costs and
expenses incurred by the Administrative Agent, and any security trustee
therefor, in monitoring, verifying, protecting, preserving or enforcing
the Liens on the Collateral, in protecting, preserving or enforcing
rights under the Loan Documents, and in any event all costs and
expenses of a character which the U.S. Borrower has agreed to pay the
Administrative Agent under Section 12.15 hereof (such funds to be
retained by the Administrative Agent for its own account unless it has
previously been reimbursed for such costs and expenses by the Lenders,
in which event such amounts shall be remitted to the Lenders to
reimburse them for payments theretofore made to the Administrative
Agent);
(b) second, to the payment of principal and interest on
the U.S. Swing Notes until paid in full;
(c) third, to the payment of any outstanding interest and
fees due under the Loan Documents to be allocated pro rata in
accordance with the aggregate unpaid amounts owing to each holder
thereof;
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(d) fourth, to the payment of principal on the Notes,
unpaid Reimbursement Obligations, together with amounts to be held by
the Administrative Agent as collateral security for any outstanding
U.S. L/C Obligations pursuant to Section 8.4 hereof (until the
Administrative Agent is holding an amount of cash equal to the then
outstanding amount of all such U.S. L/C Obligations), the payment of
the principal of the indebtedness, obligations and liabilities
(including without limitation the Australian Reimbursement Obligations)
arising under the Australian Credit Agreements, and Hedging Liability,
the aggregate amount paid to, or held as collateral security for, the
Lenders and, in the case of Hedging Liability, their Affiliates to be
allocated pro rata in accordance with the aggregate unpaid amounts
owing to each holder thereof;
(e) fifth, to the payment of all other unpaid Obligations
and all other indebtedness, obligations, and liabilities of the U.S.
Borrower and its Subsidiaries secured by the Collateral Documents
(including, without limitation, Funds Transfer and Deposit Account
Liability and the Guarantors' obligations under Section 11 of this
Agreement) to be allocated pro rata in accordance with the aggregate
unpaid amounts owing to each holder thereof; and
(f) sixth, to the U.S. Borrower or whoever else may be
lawfully entitled thereto.
Section 2.5. Substitution of Lenders. Upon the receipt by the U.S.
Borrower of (a) a claim from any U.S. Lender for compensation under Section 9.3
or 12.1 hereof, (b) notice by any U.S. Lender to the U.S. Borrower of any
illegality pursuant to Section 9.1 hereof or (c) in the event any U.S. Lender is
in default in any material respect with respect to its obligations under the
Loan Documents (any such Lender referred to in clause (a), (b) or (c) above
being hereinafter referred to as an "Affected Lender"), the U.S. Borrower may,
in addition to any other rights the U.S. Borrower may have hereunder or under
applicable law, require, at its expense, any such Affected Lender to assign, at
par plus accrued interest and fees, without recourse, all of its interest,
rights, and obligations hereunder (including all of its Commitments and the
Loans and participation interests in Letters of Credit and other amounts at any
time owing to it hereunder and the other Loan Documents) to a bank or other
institutional Lender specified by the U.S. Borrower, provided that (i) such
assignment shall not conflict with or violate any law, rule or regulation or
order of any court or other governmental authority, (ii) the U.S. Borrower shall
have received the written consent of the Administrative Agent, which consent
shall not be unreasonably withheld, to such assignment, (iii) the U.S. Borrower
shall have paid to the Affected Lender all monies (together with amounts due
such Affected Lender under Section 1.11 hereof as if the Loans owing to it were
prepaid rather than assigned) other than such principal, interest, and fees
accrued and owing to it hereunder, and (iv) the assignment is entered into in
accordance with the other requirements of Section 12.12 hereof.
SECTION 3. THE COLLATERAL AND GUARANTIES.
Section 3.1. Collateral. Obligations, Hedging Liability, and Funds
Transfer and Deposit Account Liability. All of the Obligations, Hedging
Liability, and Funds Transfer and Deposit Account Liability of the U.S. Borrower
and the Guarantors shall be secured by (a) valid,
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perfected and enforceable Liens on all right, title, and interest of the U.S.
Borrower and its Domestic Subsidiaries in all capital stock and other equity
interests held by such Person in each of its Domestic Subsidiaries, whether now
owned or hereafter formed or acquired, and all proceeds thereof, (b) valid,
perfected and enforceable Liens on all right, title, and interest of the U.S.
Borrower and its Domestic Subsidiaries in 65% of the capital stock and other
equity interests held by such Person in Penford Holdings, whether now owned or
hereafter formed or acquired, and all proceeds thereof, and (c) valid,
perfected, and enforceable Liens on all right, title, and interest of the U.S.
Borrower and its Domestic Subsidiaries in all personal property, fixtures, and
real estate, whether now owned or hereafter acquired or arising, and all
proceeds thereof; provided, however, that: (i) until a Default or Event of
Default has occurred and is continuing and thereafter until otherwise required
by the Administrative Agent or the Required Lenders, Liens on local petty cash
deposit accounts maintained by the U.S. Borrower and its Domestic Subsidiaries
in proximity to their operations need not be perfected provided that the total
amount on deposit at any one time not so perfected shall not exceed $500,000 in
the aggregate and Liens on payroll accounts maintained by the U.S. Borrower and
its Domestic Subsidiaries need not be perfected provided the total amount on
deposit at any time does not exceed the current amount of their payroll
obligations, (ii) until an Event of Default has occurred and is continuing and
thereafter until otherwise required by the Administrative Agent or the Required
Lenders, Liens on vehicles of the U.S. Borrower and its Domestic Subsidiaries
which are subject to a certificate of title law need not be perfected provided
that the total value of such property at any one time not so perfected shall not
exceed $500,000 in the aggregate, and (iii) until an Event of Default has
occurred and is continuing and thereafter until otherwise required by the
Administrative Agent or the Required Lenders, Liens need not be granted or
perfected on (A) Property of the U.S. Borrower and its Domestic Subsidiaries
(other than Property which is being pledged pursuant to the U.S. Security
Agreement) located outside of the United States of America or Property as to
which the grant or perfection of a Lien thereon would not be governed by the
laws of the United States of America or any State thereof, provided that the
aggregate net book value of such Property at any one time not so encumbered does
not exceed $500,000 in the aggregate and (B) goods in transit outside of the
United States of America in the ordinary course of business. The Borrowers and
the Guarantors acknowledge and agree that each Lien on the Collateral shall be
granted by the U.S. Borrower and its Domestic Subsidiaries to the Administrative
Agent for the benefit of the holder of the Obligations, the Hedging Liability,
and the Funds Transfer and Deposit Account Liability and shall be a valid and
perfected first priority Lien subject only to Liens permitted by Section 7.8
hereof, in each case pursuant to one or more Collateral Documents from such
Persons, each in form and substance satisfactory to the Administrative Agent.
Section 3.2. Liens on Real Property. (a) In the event that the U.S.
Borrower or any Domestic Subsidiary own or hereafter acquire any real property,
the U.S. Borrower shall, or shall cause such Domestic Subsidiary to, execute and
deliver to the Administrative Agent (or a security trustee therefor) a mortgage
or deed of trust acceptable in form and substance to the Administrative Agent
for the purpose of granting to the Administrative Agent a Lien on such real
property to secure the Obligations, Hedging Liability, and Funds Transfer and
Deposit Account Liability, shall pay all taxes, costs, and expenses incurred by
the Administrative Agent in recording such mortgage or deed of trust, and shall
supply to the Administrative Agent at the U.S. Borrower's cost and expense a
survey, environmental report, hazard insurance policy,
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appraisal report, and a mortgagee's policy of title insurance from a title
insurer acceptable to the Administrative Agent insuring the validity of such
mortgage or deed of trust and its status as a first Lien (subject to Liens
permitted by this Agreement) on the real property encumbered thereby and such
other instrument, documents, certificates, and opinions reasonably required by
the Administrative Agent in connection therewith.
(b) In the event that any Australian Borrower or any of its
Subsidiaries own or hereafter acquire any real property, such Australian
Borrower shall, or shall cause such Subsidiary to, execute and deliver to the
Australian Lender (or a security trustee therefor) a mortgage or deed of trust
acceptable in form and substance to the Australian Lender for the purpose of
granting to the Australian Lender (or a security trustee therefor) a Lien on
such real property to secure the Obligations, Hedging Liability, and Funds
Transfer and Deposit Account Liability of the Australian Borrowers and their
Subsidiaries, shall pay all taxes, duties, costs, and expenses incurred by the
Australian Lender (or a security trustee therefor) in recording, stamping and
registering such mortgage or deed of trust, and shall supply to the Australian
Lender at such Australian Borrower's cost and expense a survey, environmental
report, hazard insurance policy, appraisal report, and a mortgagee's policy of
title insurance from a title insurer acceptable to the Australian Lender
insuring the validity of such mortgage or deed of trust and its status as a
first Lien (subject to Liens permitted by this Agreement) on the real property
encumbered thereby and such other instrument, documents, certificates, and
opinions reasonably required by the Australian Lender in connection therewith.
Section 3.3. Guaranties. The payment and performance of (a) the
Obligations, Hedging Liability, and Funds Transfer and Deposit Account Liability
of the U.S. Borrower and its Domestic Subsidiaries shall at all times be
guaranteed by each direct and indirect Domestic Subsidiary of the U.S. Borrower,
and (b) the Obligations, Hedging Liability, and Funds Transfer and Deposit
Account Liability of the Australian Borrowers and their Subsidiaries shall at
all times be guaranteed by (i) the U.S. Borrower, each direct and indirect
Domestic Subsidiary of the U.S. Borrower, in each case pursuant to Section 11
hereof or pursuant to one or more guaranty agreements in form and substance
acceptable to the Administrative Agent, as the same may be amended, modified or
supplemented from time to time (individually a "Guaranty" and collectively the
"Guaranties"), and (ii) by Penford New Zealand Limited pursuant to the New
Zealand Securities.
Section 3.4. Further Assurances. (a) Each Borrower agrees that it
shall, and shall cause each Subsidiary to, from time to time at the request of
the Administrative Agent or the Required Lenders, execute and deliver such
documents and do such acts and things as the Administrative Agent or the
Required Lenders may reasonably request in order to provide for or perfect or
protect such Liens on the Collateral to be provided by it.
(b) In the event the U.S. Borrower or any of its Domestic
Subsidiaries form or acquire any other Domestic Subsidiary after the date
hereof, unless the Required Lenders otherwise agree, the U.S. Borrower shall (A)
cause such Domestic Subsidiary to execute such Collateral Documents and deliver
such other instruments, documents, certificates and opinions as the
Administrative Agent may reasonably request, (B) cause such Domestic Subsidiary
to execute a Guaranty and (C) cause such Domestic Subsidiary to deliver
documentation similar to that
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described in Section 7.2(a) and Section 7.2(c) relating to the authorization
for, execution and delivery of, and validity of such Domestic Subsidiary's
obligations under the Loan Documents to which it is a party in form and
substance satisfactory to the Required Lenders, in each case to the extent
contemplated under Sections 3.1 and 3.2 hereof had such newly-formed or acquired
Subsidiary existed as of the Closing Date.
(c) In the event any Australian Borrower or any of its
Subsidiaries form or acquire any other Subsidiary after the date hereof, unless
the Required Lenders otherwise agree, such Australian Borrower shall (A) cause
such Subsidiary to execute such Collateral Documents and deliver such other
instruments, documents, certificates and opinions as the Administrative Agent
may reasonably request, (B) cause such Subsidiary to execute a Guaranty of the
Australian Borrowers' Obligations and (C) cause such Subsidiary to deliver
documentation similar to that described in Section 7.2(a) and Section 7.2(c)
relating to the authorization for, execution and delivery of, and validity of
such Subsidiary's obligations under the Loan Documents to which it is a party in
form and substance satisfactory to the Required Lenders, in each case to the
extent contemplated under Sections 3.1 and 3.2 hereof had such newly-formed or
acquired Subsidiary existed as of the Closing Date.
SECTION 4. DEFINITIONS; INTERPRETATION.
Section 4.1. Definitions. The following terms when used herein shall
have the following meanings:
"Acquired Business" means the entity or assets acquired by a Borrower
or a Subsidiary in an Acquisition, whether before or after the date hereof.
"Acquisition" means any transaction or series of related transactions
for the purpose of or resulting, directly or indirectly, in (a) the acquisition
of all or substantially all of the assets of a Person, or of any business or
division of a Person, (b) the acquisition of in excess of 50% of the capital
stock, partnership interests, membership interests or equity of any Person
(other than a Person that is a Subsidiary), or otherwise causing any Person to
become a Subsidiary, or (c) a merger or consolidation or any other combination
with another Person (other than a Person that is a Subsidiary) provided that the
applicable Borrower or the applicable Subsidiary is the surviving entity.
"Adjusted LIBOR" means, for any Borrowing of Eurodollar Loans, a rate
per annum determined in accordance with the following formula:
Adjusted LIBOR = LIBOR
---------------------------------
1 - Eurodollar Reserve Percentage
"Administrative Agent" means Harris Trust and Savings Bank and any
successor pursuant to Section 10.7 hereof.
"Administrative Agent's Quoted Rate" is defined in Section 1.12(c)
hereof.
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"Affiliate" means any Person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, another Person.
A Person shall be deemed to control another Person for the purposes of this
definition if such Person possesses, directly or indirectly, the power to
direct, or cause the direction of, the management and policies of the other
Person, whether through the ownership of voting securities, common directors,
trustees or officers, by contract or otherwise; provided that, in any event for
purposes of this definition, any Person that owns, directly or indirectly, 5% or
more of the securities having the ordinary voting power for the election of
directors or governing body of a corporation or 5% or more of the partnership or
other ownership interest of any other Person (other than as a limited partner of
such other Person) will be deemed to control such corporation or other Person.
"Agreement" means this Credit Agreement, as the same may be amended,
modified, restated or supplemented from time to time pursuant to the terms
hereof.
"Applicable Margin" means, with respect to Loans, Reimbursement
Obligations, and the commitment fees and letter of credit fees payable under
Section 2.1 hereof until the first Pricing Date, the rates per annum shown
opposite Level III below and thereafter from one Pricing Date to the next the
Applicable Margin means the rates per annum determined in accordance with the
following schedule:
APPLICABLE
APPLICABLE MARGIN FOR
MARGIN FOR BASE EURODOLLAR
RATE LOANS UNDER LOANS UNDER
REVOLVING REVOLVING
CREDITS AND TERM CREDITS AND
TOTAL FUNDED CREDITS AND TERM CREDITS APPLICABLE
DEBT RATIO FOR REIMBURSEMENT AND LETTER OF MARGIN FOR
SUCH PRICING OBLIGATIONS SHALL CREDIT FEES COMMITMENT
LEVEL DATE BE: SHALL BE: FEES SHALL BE:
IV Greater than 3.0 1.00% 2.50% 0.50%
to 1.0
III Less than or 0.75% 2.25% 0.50%
equal to 3.0 to
1.0, but greater
than 2.5 to 1.0
II Less than or 0.50% 2.00% 0.40%
equal to 2.5 to
1.0, but greater
than 2.0 to 1.0
I Less than or 0.25% 1.75% 0.40%
equal to 2.0 to
1.0
For purposes hereof, the term "Pricing Date" means, for any fiscal quarter of
the U.S. Borrower ending on or after November 30, 2003, the date on which the
Administrative Agent is in receipt of the U.S. Borrower's most recent financial
statements (and, in the case of the year-end financial statements, audit report)
for the fiscal quarter then ended, pursuant to
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Section 7.5 hereof. The Applicable Margin shall be established based on the
Total Funded Debt Ratio for the most recently completed fiscal quarter and the
Applicable Margin established on a Pricing Date shall remain in effect until the
next Pricing Date. If the U.S. Borrower has not delivered their financial
statements by the date such financial statements (and, in the case of the
year-end financial statements, audit report) are required to be delivered under
Section 7.5 hereof, until such financial statements and audit report are
delivered, the Applicable Margin shall be the highest Applicable Margin (i.e.,
the Total Funded Debt Ratio shall be deemed to be greater than 3.0 to 1.0). If
the U.S. Borrower subsequently delivers such financial statements before the
next Pricing Date, the Applicable Margin established by such late delivered
financial statements shall take effect from the date of delivery until the next
Pricing Date. In all other circumstances, the Applicable Margin established by
such financial statements shall be in effect from the Pricing Date that occurs
immediately after the end of the fiscal quarter covered by such financial
statements until the next Pricing Date. Each determination of the Applicable
Margin made by the Administrative Agent in accordance with the foregoing shall
be conclusive and binding on the U.S. Borrower and the Lenders if reasonably
determined.
"Application" is defined in Section 1.3(b) hereof.
"Australian Amendatory Documents" means the Deed of Amendment
(Debenture Trust Deed) and the Deed of Amendment (Syndicated Facility
Agreement).
"Australian Borrower" and "Australian Borrowers" are defined in the
introductory paragraph of this Agreement.
"Australian Collateral Documents" means (i) the Debenture Trust
Collateral Documents, (ii) the Security Trust Collateral Documents, and any
further assurance provided under any of the foregoing, Section 3.4 of this
Agreement or an Australian Credit Agreement.
"Australian Credit Agreements" means any of (a) the Debenture Trust
Deed, (b) the Subscription Agreement, (c) any debentures issued under the
Debenture Trust Deed pursuant to the Subscription Agreement, (d) the Letters of
Offer and (e) the Syndicated Facility Agreement, as the context requires and as
the same may be amended, modified, supplemented, replaced or restated from time
to time, and "Australian Credit Agreements" refers to all of them.
"Australian Dollars" or "AUS $" means the lawful currency of the
Commonwealth of Australia.
"Australian Dollar Equivalent" means with respect to amounts in U.S.
Dollars, the amount of Australian Dollars which would be realized by converting
U.S. Dollars into Australian Dollars in the spot market at the exchange rate
quoted by the Administrative Agent, at approximately 11:00 a.m. (London time)
two Business Days prior to the date on which a computation thereof is required
to be made, to major banks in the interbank foreign exchange market for the
purchase of Australian Dollars for U.S. Dollars.
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"Australian Lender" means Australia and New Zealand Banking Group
Limited and each other "Debenture Holder" under the Debenture Trust Deed and
each other "Participant" under the Syndicated Facility Agreement as therein
defined.
"Australian Loan Documents" means the Australian Credit Agreements, the
Australian Amendatory Documents and the Australian Collateral Documents.
"Australian Reimbursement Obligations" means, with respect to any
Australian Borrower, such Australian Borrower's obligations to reimburse the
Australian Lender for any acceptance issued or overdraft created pursuant to the
Syndicated Facility Agreement.
"Australian Term Loan" means the loan made to Penford Holdings by the
Australian Lender, on the terms of the Debenture Trust Deed, through its
subscription for one or more debentures pursuant to the Subscription Agreement.
"Authorized Representative" means in relation to the Borrowers those
persons shown on the list of officers provided by each Borrower, pursuant to
Section 6.2 hereof or on any update of any such list provided by each Borrower
to the Administrative Agent, or any further or different officers of each
Borrower so named by any Authorized Representative of such Borrower in a written
notice to the Administrative Agent.
"Base Rate" means with respect to Credit extended in U.S. Dollars, for
any day the greater of: (i) the rate of interest announced or otherwise
established by the Administrative Agent from time to time as its prime
commercial rate as in effect on such day, with any change in the Base Rate
resulting from a change in said prime commercial rate to be effective as of the
date of the relevant change in said prime commercial rate (it being acknowledged
and agreed that such rate may not be the Administrative Agent's best or lowest
rate) and (ii) the sum of (x) the rate determined by the Administrative Agent to
be the average (rounded upward, if necessary, to the next higher 1/100 of 1%) of
the rates per annum quoted to the Administrative Agent at approximately 10:00
a.m. (Chicago time) (or as soon thereafter as is practicable) on such day (or,
if such day is not a Business Day, on the immediately preceding Business Day) by
two or more Federal funds brokers selected by the Administrative Agent for sale
to the Administrative Agent at face value of Federal funds in the secondary
market in an amount equal or comparable to the principal amount owed to the
Administrative Agent for which such rate is being determined, plus (y) 1/2 of
1%.
"Base Rate Loan" means a Loan bearing interest at a rate specified in
Section 1.4(a) hereof.
"Borrower" means the U.S. Borrower and, for purposes of Sections 4, 5,
6, 7, 8 and 11 hereof, each Australian Borrower.
"Borrowing" means the total of Loans of a single type advanced,
continued for an additional Interest Period, or converted from a different type
into such type by the applicable Lenders under a Credit on a single date and, in
the case of Eurodollar Loans, for a single Interest Period. Borrowings of Loans
are made and maintained ratably from each of the Lenders under a
-25-
Credit according to their Percentages of such Credit. A Borrowing is "advanced"
on the day the Lenders advance funds comprising such Borrowing to the U.S.
Borrower, is "continued" on the date a new Interest Period for the same type of
Loans commences for such Borrowing, and is "converted" when such Borrowing is
changed from one type of Loans to the other, all as requested by the U.S.
Borrower pursuant to Section 1.6(a) hereof. Borrowings of U.S. Swing Loans are
made by the Administrative Agent in accordance with the procedures set forth in
Section 1.12 hereof.
"Business Day" means (a) if the applicable Business Day relates to the
borrowing or payment of a Loan or Reimbursement Obligation denominated in U.S.
Dollars or is addressed to the Administrative Agent, any day (other than a
Saturday or Sunday) on which banks are not authorized or required to close in
Chicago, Illinois or Englewood, Colorado, and, if the applicable Business Day
relates to the advance or continuation of, or conversion into, or payment of a
Eurodollar Loan, on which banks are dealing in U.S. Dollar deposits in the
interbank eurodollar market in London, England and Nassau, Bahamas, and (b) if
the applicable Business Day relates to the borrowing or payment of any
indebtedness or Australian Reimbursement Obligation denominated in Australian
Dollars or is addressed to the Australian Lender, any "Business Day" as defined
in the Debenture Trust Deed.
"Capital Expenditures" means, with respect to any Person for any
period, the aggregate amount of all expenditures (whether paid in cash or
accrued as a liability) by such Person during that period for the acquisition or
leasing (pursuant to a Capital Lease) of fixed or capital assets or additions to
property, plant, or equipment (including replacements, capitalized repairs, and
improvements) which should be capitalized on the balance sheet of such Person in
accordance with GAAP.
"Capital Lease" means any lease of Property, which in accordance with
GAAP is required to be capitalized on the balance sheet of the lessee.
"Capitalized Lease Obligation" means, for any Person, the amount of the
liability shown on the balance sheet of such Person in respect of a Capital
Lease determined in accordance with GAAP.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. Sections 9601 et seq., and any future
amendments.
"Change of Control" means any of (a) the acquisition by an "person" or
"group" (as such terms are used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) at any time of beneficial ownership of 40% or
more of the outstanding capital stock or other equity interest of the Borrowers
on a fully-diluted basis, (b) the failure of individuals who are members of the
board of directors (or similar governing body) of the Borrowers on the Closing
Date (together with any new or replacement directors whose initial nomination
for election was approved by a majority of the directors who were either
directors on the Closing Date or previously so approved) to constitute a
majority of the board of directors (or similar governing body) of the Borrowers,
or (c) any "Change of Control" (or words of like import), as
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defined in any agreement or indenture relating to any issue of Indebtedness for
Borrowed Money of any Borrower or any Subsidiary shall occur.
"Closing Date" means the date of this Agreement or such later Business
Day upon which each condition described in Section 6.2 shall be satisfied or
waived in a manner acceptable to the Administrative Agent in its discretion.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto.
"Collateral" means (i) with respect to the Obligations denominated in
U.S. Dollars, all properties, rights, interests, and privileges from time to
time subject to the Liens granted to the Administrative Agent, or any security
trustee therefor, by the Collateral Documents to secure such Obligations and
(ii) with respect to the indebtedness, liabilities and obligations of the
Australian Borrowers and their Subsidiaries under the Australian Loan Documents,
all properties, rights, interests, and privileges from time to time subject to
the Liens granted to the Australian Lender, or any security trustee therefor, by
the Australian Collateral Documents or the Liens granted to the Administrative
Agent, or any security trustee therefor, by the Collateral Documents, to secure
such indebtedness, liabilities and obligations.
"Collateral Account" is defined in Section 8.4 hereof.
"Collateral Documents" means the Mortgages, the Australian Collateral
Documents, the U.S. Security Agreement, the U.S. Memorandum of Deposit and all
other mortgages, deeds of trust, security agreements, pledge agreements,
assignments, financing statements and other documents as shall from time to time
secure or relate to the Obligations, the Hedging Liability, and the Funds
Transfer and Deposit Account Liability or any part thereof.
"Commitments" means the U.S. Revolving Credit Commitments and the U.S.
Term Loan Commitments.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with any of the Borrowers, are treated as a
single employer under Section 414 of the Code.
"Controller" has the meaning it has in the Corporations Act.
"Corporations Act" means the Corporations Act 2001 of the Commonwealth
of Australia
"Credit" means any of the U.S. Revolving Credit, the U.S. Swing Line or
the U.S. Term Credit.
"Credit Event" means the advancing of any Loan, the continuation of or
conversion into a Eurodollar Loan, the issuance of, or extension of the
expiration date or increase in the amount of, any U.S. Letter of Credit, the
creation of overdraft or the acceptance and issuance of any bill
-27-
pursuant to the Syndicated Facility Agreement or the issuance of any debentures
pursuant to the Debenture Trust Deed.
"Damages" means all damages including, without limitation, punitive
damages, liabilities, costs, expenses, losses, diminutions in value, fines,
penalties, demands, claims, cost recovery actions, lawsuits, administrative
proceedings, orders, response action, removal and remedial costs, compliance
costs, investigation expenses, consultant fees, attorneys' and paralegals' fees
and litigation expenses.
"Debenture Trust Collateral Documents" means, as the same may be
amended, restated, supplemented, modified or replaced from time to time, (i) the
Penford Debenture Trust Guarantee and Indemnity dated 15 November 2000 from
Penford Australia Limited on account of Penford Holdings in favour of ANZ Capel
Court Limited, (ii) the Penford Debenture Trust Fixed and Floating Charge dated
15 November 2000 granted by Penford Holdings in favour of ANZ Capel Court
Limited over its present and future assets in New South Wales and Victoria,
(iii) the Penford Debenture Trust Future Asset Charge dated 15 November 2000
granted by Penford Holdings in favour of ANZ Capel Court Limited over its future
assets outside New South Wales and Victoria and over its present assets in the
Australian Capital Territory and the Northern Territory, (iv) the Penford
Debenture Trust Fixed and Floating Charge dated 15 November 2000 granted by
Penford Australia Limited in favour of ANZ Capel Court Limited over its present
and future assets in New South Wales and Victoria, (v) the Penford Debenture
Trust Fixed and Floating Charge dated 15 November 2000 granted by Penford
Australia Limited in favour of ANZ Capel Court Limited over its present assets
outside New South Wales and Victoria limited to $3,000,000, (vi) the Penford
Debenture Trust Future Asset Charge dated 15 November 2000 granted by Penford
Australia Limited in favour of ANZ Capel Court Limited over its future assets
outside New South Wales and Victoria and over its present assets in the
Australian Capital Territory and the Northern Territory, (vii) the Debenture
Trust Mortgages, (viii) the New Zealand Securities, (ix) the Second Deed of
Guarantee and Indemnity and (x) the Second Australian Memorandum of Deposit.
"Debenture Trust Deed" means the deed so entitled dated 15 November
2000 between Penford Holdings as "Issuer" and ANZ Capel Court Limited as
"Trustee", as amended by deeds of variation dated 22 June 2001 and 22 August
2001 and the Deed of Amendment (Debenture Trust Deed), and as the same may be
amended, restated, supplemented, modified or replaced from time to time.
"Debenture Trust Mortgages" means (i) the Penford Debenture Trust New
South Wales Real Property Act Mortgage between Penford Australia Limited and ANZ
Capel Court Limited over Certificate of Title Folio Identifiers 11/777128,
1/712114, Volume 5824 Folio 13, A/371305, B/371305, 1/881132, 3/873641,
42/719840, 34/826572 and 35/826572, (ii) the Penford Debenture Trust New South
Wales Real Property Act Mortgage between Penford Australia Limited and ANZ Capel
Court Limited over Certificate of Title Folio Identifiers 5/999939, 6/999939,
37/826572, 36/826572, 1/196504, 1/161043, A/164721, 2/162236, 3/162236, 4/607266
and Volume 6605 Folio 139 and (iii) the Penford Debenture Trust New South Wales
Old System Mortgage between Penford Australia Limited and ANZ Capel Court
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Limited over Book 3834 No 598, Book 3834 No 603, Book 3834 No 599 and Book 3834
No 597.
"Deed of Amendment (Debenture Trust Deed)" means the deed so entitled
dated on or about the date of this Agreement between Penford Holdings as
"Issuer", ANZ Capel Court Limited as "Trustee", Australia and New Zealand
Banking Group Limited as "Agent", "Administrative Lender" and "Debenture Holder"
and Penford Australia Limited and Penford New Zealand Limited as "Consent
Parties".
"Deed of Amendment (Syndicated Facility Agreement)" means the deed so
entitled dated on or about the date of this Agreement between Penford Australia
Limited as "Borrower", ANZ Capel Court Limited as "Security Trustee", Australia
and New Zealand Banking Group Limited as "Agent", "Administrative Lender" and
"Participant" and Penford Holdings and Penford New Zealand Limited as "Consent
Parties".
"Default" means any event or condition the occurrence of which would,
with the passage of time or the giving of notice, or any combination of the
foregoing, constitute an Event of Default.
"Disposition" means the sale, lease, conveyance or other disposition of
Property, other than sales or other dispositions expressly permitted under
Section 7.10 hereof.
"Domestic Subsidiary" means each Subsidiary of the U.S. Borrower which
is organized under the laws of the United States of America or any State
thereof.
"EBITDA" means, with reference to any period, Net Income for such
period plus the sum of all amounts deducted in arriving at such Net Income
amount in respect of (a) Interest Expense for such period, (b) federal, state,
and local income taxes for such period, and (c) depreciation of fixed assets and
amortization of intangible assets for such period, plus (minus) any non-cash
losses (gains) but only to the extent such losses (gains) have not become a cash
loss (or gain).
"Eligible Line of Business" means any business engaged in as of the
date of this Agreement by the Borrowers or any of their Subsidiaries or any
substantially similar business engaged in after the date of this Agreement.
"Environmental Claim" means any investigation, notice, violation,
demand, allegation, action, suit, injunction, judgment, order, consent decree,
penalty, fine, lien, proceeding or claim (whether administrative, judicial or
private in nature) arising (a) pursuant to, or in connection with an actual or
alleged violation of, any Environmental Law, (b) in connection with any
Hazardous Material, (c) from any abatement, removal, remedial, corrective or
response action in connection with a Hazardous Material, Environmental Law or
order of a governmental authority or (d) from any actual or alleged damage,
injury, threat or harm to health, safety, natural resources or the environment.
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"Environmental Law" means any current or future Legal Requirement
pertaining to (a) the protection of health, safety and the indoor or outdoor
environment, (b) the conservation, management or use of natural resources and
wildlife, (c) the protection or use of surface water or groundwater, (d) the
management, manufacture, possession, presence, use, generation, transportation,
treatment, storage, disposal, Release, threatened Release, abatement, removal,
remediation or handling of, or exposure to, any Hazardous Material or (e)
pollution (including any Release to air, land, surface water or groundwater),
and any amendment, rule, regulation, order or directive issued thereunder.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute thereto.
"Eurodollar Loan" means a Loan bearing interest at the rate specified
in Section 1.4(b) hereof.
"Eurodollar Reserve Percentage" means, with respect to Credit extended
in U.S. Dollars for any Borrowing of Eurodollar Loans, the daily average for the
applicable Interest Period of the maximum rate, expressed as a decimal, at which
reserves (including, without limitation, any supplemental, marginal, and
emergency reserves) are imposed during such Interest Period by the Board of
Governors of the Federal Reserve System (or any successor) on "eurocurrency
liabilities," as defined in such Board's Regulation D (or in respect of any
other category of liabilities that includes deposits by reference to which the
interest rate on Eurodollar Loans is determined or any category of extensions of
credit or other assets that include loans by non-United States offices of any
U.S. Lender to United States residents), subject to any amendments of such
reserve requirement by such Board or its successor, taking into account any
transitional adjustments thereto, and for purposes of this definition, the
Eurodollar Loans shall be deemed to be "eurocurrency liabilities" as defined in
Regulation D without benefit or credit for any prorations, exemptions or offsets
under Regulation D.
"Event of Default" means any event or condition identified as such in
Section 8.1 hereof.
"Event of Loss" means, with respect to any Property, any of the
following: (a) any loss, destruction or damage of such Property or (b) any
condemnation, seizure, or taking, by exercise of the power of eminent domain or
otherwise, of such Property, or confiscation of such Property or the requisition
of the use of such Property.
"Excess Cash Flow" means, with respect to any period, the amount (if
any) by which (a) EBITDA during such period exceeds (b) the sum of (i) Interest
Expense for such period paid in cash, (ii) all federal, state and local income
taxes paid or payable by the U.S. Borrower and its Subsidiaries in cash during
such period, plus (iii) the aggregate amount of payments required to be made by
the U.S. Borrower and its Subsidiaries in cash during such period in respect of
all principal on all Indebtedness for Borrowed Money (whether at maturity, as a
result of mandatory sinking fund redemption, mandatory prepayment, acceleration
or otherwise, but excluding payments made on the Revolving Credit and
prepayments of the U.S. Term Loans and the Australian Term Loans made out of
Excess Cash Flow), (iv) all Restricted Payments made by the U.S. Borrower during
such period in cash, plus (v) the aggregate amount of Capital Expenditures
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incurred by the U.S. Borrower and its Subsidiaries during such period, plus
(minus) (vi) additions (reductions) to non-cash working capital of the U.S.
Borrower and its Subsidiaries for such period.
"Federal Funds Rate" means the fluctuating interest rate per annum
described in part (x) of clause (ii) of the definition of Base Rate.
"First Australian Memorandum of Deposit" means the deed so entitled
dated on or about the date of this Agreement between the U.S. Borrower and ANZ
Capel Court Limited in its capacity as "Security Trustee" under the Security
Trust Deed.
"First Deed of Guarantee and Indemnity" means the deed poll so entitled
dated on or about the date of this Agreement by the U.S. Borrower and its
Domestic Subsidiaries.
"Fixed Charges" means, with reference to any period, the sum of (a) all
scheduled payments of principal to be made during the twelve month period
following such period with respect to Indebtedness for Borrowed Money of the
U.S. Borrower and its Subsidiaries, plus (b) Interest Expense paid in cash for
such period, plus (c) all Restricted Payments made by the U.S. Borrower during
such period in cash, plus (d) federal, state, and local income taxes paid or
payable by the U.S. Borrower and its Subsidiaries in cash during such period.
"Foreign Subsidiary" means each Subsidiary of the U.S. Borrower which
(a) is organized under the laws of a jurisdiction other than the United States
of America or any state thereof, (b) conducts substantially all of its business
outside of the United States of America, and (c) has substantially all of its
assets outside of the United States of America.
"Funds Transfer and Deposit Account Liability" means the liability of
the Borrowers or any of their Subsidiaries owing to any of the Lenders, or any
Affiliates of such Lenders, arising out of (a) the execution or processing of
electronic transfers of funds by automatic clearing house transfer, wire
transfer or otherwise to or from the deposit accounts of the Borrowers and/or
any Subsidiary now or hereafter maintained with any of the Lenders or their
Affiliates, (b) the acceptance for deposit or the honoring for payment of any
check, draft or other item with respect to any such deposit accounts, and (c)
any other deposit, disbursement, and cash management services afforded to the
Borrowers or any such Subsidiary by any of such Lenders or their Affiliates.
"GAAP" means (a) in relation to the U.S. Borrower or any Subsidiary
thereof, generally accepted accounting principles set forth from time to time in
the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination, and (b) in relation to any Australian Borrower and any Subsidiary
thereof, generally accepted accounting principles, standards and practices in
the jurisdiction of incorporation of that Borrower or Subsidiary.
"Guarantor" and "Guarantors" each is defined in Section 11.1 hereof.
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"Guaranty" and "Guaranties" each is defined in Section 3.3 hereof.
"Hazardous Material" means any substance, chemical, compound, product,
solid, gas, liquid, waste, byproduct, pollutant, contaminant or material which
is hazardous or toxic, and includes, without limitation, (a) asbestos,
polychlorinated biphenyls and petroleum (including crude oil or any fraction
thereof) and (b) any material classified or regulated as "hazardous" or "toxic"
or words of like import pursuant to an Environmental Law.
"Hazardous Material Activity" means any activity, event or occurrence
involving a Hazardous Material, including, without limitation, the manufacture,
possession, presence, use, generation, transportation, treatment, storage,
disposal, Release, threatened Release, abatement, removal, remediation, handling
of or corrective or response action to any Hazardous Material.
"Hedging Liability" means the liability of any of the Borrowers or any
Subsidiary to any of the Lenders, or any Affiliates of such Lenders, in respect
of any interest rate, foreign currency, and/or commodity swap, exchange, cap,
collar, floor, forward, future or option agreement, or any other similar
interest rate, currency or commodity hedging arrangement, as any such Borrower
or such Subsidiary, as the case may be, may from time to time enter into with
any one or more of the Lenders party to this Agreement or their Affiliates.
"Hostile Acquisition" means the acquisition of the capital stock or
other equity interests of a Person through a tender offer or similar
solicitation of the owners of such capital stock or other equity interests which
has not been approved (prior to the consummation of such acquisition) by
resolutions of the Board of Directors of such Person or by similar action if
such Person is not a corporation, and as to which such approval has not been
withdrawn.
"Indebtedness for Borrowed Money" means for any Person (without
duplication) (a) all indebtedness of such Person for borrowed money, whether
current or funded, or secured or unsecured, (b) all indebtedness for the
deferred purchase price of Property or services, (c) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to Property acquired by such Person (even though the rights and remedies
of the seller or Lender under such agreement in the event of a default are
limited to repossession or sale of such Property), (d) all indebtedness secured
by a purchase money mortgage or other Lien to secure all or part of the purchase
price of Property subject to such mortgage or Lien, (e) all obligations under
leases which shall have been or must be, in accordance with GAAP, recorded as
Capital Leases in respect of which such Person is liable as lessee, (f) any
counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby
or documentary letter of credit or any other instrument issued by a bank or
financial institution, (g) such Person's net mark-to-market exposure under all
agreements of such person evidencing Hedging Liability, (h) any indebtedness,
whether or not assumed, secured by Liens on Property acquired by such Person at
the time of acquisition thereof, (i) any shares which are expressed to be
redeemable and (j) any liability in respect of any guarantee or indemnity for
any of the items referred to above; it being understood that the term
"Indebtedness for Borrowed Money" shall not include trade payables arising in
the ordinary course of business.
"Intercompany Indebtedness" is defined in Section 7.7 hereof.
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"Intercreditor Agreement" means the Intercreditor Agreement dated as of
October 7, 2003, among the Administrative Agent, the Lenders, the Australian
Lender and the Australian Trustee, as the same may be supplemented, amended,
restated and otherwise modified from time to time.
"Interest Expense" means, with reference to any period, the sum of all
interest charges (including imputed interest charges with respect to Capitalized
Lease Obligations and all amortization of debt discount and expense) of the U.S.
Borrower and its Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP.
"Interest Period" is defined in Section 1.7 hereof.
"Legal Requirement" means any treaty, convention, statute, law,
regulation, ordinance, license, permit, governmental approval, injunction,
judgment, order, consent decree or other requirement of any governmental
authority, whether federal, state, or local.
"Lenders" means and includes the U.S. Lenders and for purposes of the
definitions of the terms "Funds Transfer and Deposit Account Liability",
"Hedging Liability", "Material Adverse Effect" and "Required Lenders" contained
in this Section 4.1, and Sections 2.2(b), 5, 6, 7, 8, 10, 11 and 12 hereof
(other than Sections 12.1, 12.11 and 12.12 hereof), the Australian Lender.
"Lending Office" is defined in Section 9.4 hereof.
"Letters of Offer" means, that certain Letter of Offer issued to
Penford Australia Limited A.B.N. 48 003 780 229, dated 2 November 2000, by
Australia and New Zealand Banking Group Limited ABN 11 005 357 522.
"LIBOR" means, with respect to Credit extended in U.S. Dollars for an
Interest Period for a Borrowing of Eurodollar Loans, (a) the LIBOR Index Rate
for such Interest Period, if such rate is available, and (b) if the LIBOR Index
Rate cannot be determined, the arithmetic average of the rates of interest per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) at which
deposits in U.S. Dollars in immediately available funds are offered to the
Administrative Agent at 11:00 a.m. (London, England time) two (2) Business Days
before the beginning of such Interest Period by three (3) or more major banks in
the interbank eurodollar market selected by the Administrative Agent for
delivery on the first day of and for a period equal to such Interest Period and
in an amount equal or comparable to the principal amount of the Eurodollar Loan
scheduled to be made by the Administrative Agent as part of such Borrowing.
"LIBOR Index Rate" means, with respect to Credit extended in U.S.
Dollars for any Interest Period, the rate per annum (rounded upwards, if
necessary, to the next higher one hundred-thousandth of a percentage point) for
deposits in U.S. Dollars for a period equal to such Interest Period, which
appears on the Telerate Page 3750 (or any replacement page therefore) as of
11:00 a.m. (London, England time) on the day two (2) Business Days before the
commencement of such Interest Period.
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"Lien" means any mortgage, lien, security interest, pledge, charge or
encumbrance of any kind in respect of any Property, including the interests of a
vendor or lessor under any conditional sale, Capital Lease or other title
retention arrangement.
"Loan" means any U.S. Revolving Loan, U.S. Swing Loan or U.S. Term
Loan, whether outstanding as a Base Rate Loan or Eurodollar Loan or otherwise,
each of which is a "type" of Loan hereunder, and for purposes of the definition
of the term "Required Lenders" contained in Section 4.1, and Sections 2.2(d),
5.4, 6, and 8 hereof, a loan issued pursuant to the Australian Credit
Agreements.
"Loan Documents" means this Agreement, the Notes, the Applications, the
Collateral Documents, the Guaranties, the Australian Loan Documents, and each
other instrument or document to be delivered hereunder or thereunder or
otherwise in connection therewith.
"Material Adverse Effect" means (a) a material adverse change in, or
material adverse effect upon, the operations, business, Property, condition
(financial or otherwise) or prospects of any Borrower or of the Borrowers and
their Subsidiaries taken as a whole, (b) a material impairment of the ability of
any Borrower or any Subsidiary to perform its material obligations under any
Loan Document or (c) a material adverse effect upon (i) the legality, validity,
binding effect or enforceability against any Borrower or any Subsidiary of any
Loan Document or the rights and remedies of the Administrative Agent, the
Australian Agent, the Australian Trustee or and the Lenders thereunder or (ii)
the perfection or priority of any Lien granted under any Collateral Document.
"Material Australian Document" means any of (a) the Resistant Starch
Deed dated 27 November 2002 between Penford Holdings Pty Limited (ABN 81 094 279
339), Penford Australia Limited (ABN 48 003 780 229), Goodman Fielder
Ingredients Limited (ABN 11 000 147 580), Goodman Fielder Limited (ABN 44 000
003 958), Quality Bakers Australia Limited (ABN 45 004 205 449), The Uncle Tobys
Company Limited (ABN 76 000 008 962), GF Group Services Pty Limited (ABN 22 003
889 962) and National Starch & Chemical Pty Limited (ABN 37 000 351 806), (b)
the Hi-maize Access Deed dated 29 August 2000 between Penford Holdings, Penford
Australia Limited, Quality Bakers Australia Limited and Goodman Fielder Limited
(c) the letter of offer dated 26 September 2000 by BNP Pacific (Australia)
Limited to Penford Australia Limited, and (d) Manufacturing and Supply Agreement
made as of November 2002 between National Starch & Chemical Pty Ltd. And Penford
Australia Limited, as the same may be amended, modified, supplemented, replaced
or restated from time to time, and "Material Australian Documents" refers to all
of them.
"Moody's" means Moody's Investors Service, Inc.
"Mortgages" means, collectively, (x) each Mortgage and Security
Agreement with Assignment of Rents, each Deed of Trust and Security Agreement
with Assignment of Rents, each Leasehold Mortgage and Security Agreement with
Assignment of Rents, and each Leasehold Deed of Trust and Security Agreement
with Assignment of Rents between the U.S. Borrower or the relevant Domestic
Subsidiary and the Administrative Agent relating to such Person's real property
owned or leased, as applicable, as of the Closing Date and located in the
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states of Iowa, Colorado, Idaho, Washington and Wisconsin, (y) each mortgage
granted pursuant to the Debenture Trust Mortgages, the Security Trust Mortgages
and the New Zealand real property Mortgage from Penford New Zealand Limited
(formerly known as Starch New Zealand Limited) over Certificates of Title
2116/96, 2116/97 and 29B/718 (North Auckland Registry) and (z) any other
mortgages or deeds of trust delivered to the Administrative Agent pursuant to
Section 3.2 hereof or to the Australian Lender or a security trustee therefor
pursuant to Section 3.2 hereof or any Australian Credit Agreement, as the same
may be amended, modified, supplemented or restated from time to time.
"Net Cash Proceeds" means, as applicable, (a) with respect to any
Disposition by a Person, cash and cash equivalent proceeds received by or for
such Person's account, net of (i) reasonable direct costs relating to such
Disposition and (ii) sale, use or other transactional taxes paid or payable by
such Person as a direct result of such Disposition, (b) with respect to any
Event of Loss of a Person, cash and cash equivalent proceeds received by or for
such Person's account (whether as a result of payments made under any applicable
insurance policy therefor or in connection with condemnation proceedings or
otherwise), net of reasonable direct costs incurred in connection with the
collection of such proceeds, awards or other payments, but excluding in any
event proceeds received under any business interruption insurance and any tax
benefits (including tax credits and abatements) received in connection with any
condemnation or seizure of Property for a governmental authority, and (c) with
respect to any offering of equity securities of a Person or the issuance of any
Indebtedness for Borrowed Money by a Person, cash and cash equivalent proceeds
received by or for such Person's account, net of reasonable legal, underwriting,
and other fees and expenses incurred as a direct result thereof.
"Net Income" means, with reference to any period, the net income (or
net loss) of the U.S. Borrower and its Subsidiaries for such period computed on
a consolidated basis in accordance with GAAP; provided that there shall be
excluded from Net Income (a) the net income (or net loss) of any Person accrued
prior to the date it becomes a Subsidiary of, or has merged into or consolidated
with, the U.S. Borrower or another Subsidiary, and (b) the net income (or net
loss) of any Person (other than a Subsidiary) in which the U.S. Borrower or any
of its Subsidiaries has an equity interest, except to the extent of the amount
of dividends or other distributions actually paid to the U.S. Borrower or any of
its Subsidiaries during such period.
"Net Worth" means, for any Person and at any time the same is to be
determined, total shareholder's equity (including capital stock, additional
paid-in capital, and retained earnings after deducting treasury stock) which
would appear on the balance sheet of such Person in accordance with GAAP.
"New Zealand Securities" means (i) the Guarantee and Indemnity from
Penford New Zealand Limited (formerly known as Starch New Zealand Limited) on
account of Penford Holdings and Penford Australia Limited in favour of ANZ Capel
Court Limited, (ii) the Fixed and Floating Charge dated 15 November 2000 granted
by Penford New Zealand Limited (formerly known as Starch New Zealand Limited) in
favour of ANZ Capel Court Limited over all its present and future assets and
(iii) the New Zealand real property Mortgage from Penford New Zealand Limited
(formerly known as Starch New Zealand Limited) over Certificates of
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Title 2116/96, 2116/97 and 29B/718 (North Auckland Registry), as the same may be
amended, restated, supplemented, modified or replaced from time to time.
"Non-Voting Equity" shall mean issued and outstanding shares of each
class of capital stock or other ownership interest not entitled to vote (within
the meaning of Treas. Reg., Section 1.956-2(c)(2).
"Notes" means and includes the U.S. Revolving Notes, the U.S. Swing
Note and the U.S. Term Notes.
"NZ Dollar Equivalent" means with respect to amounts in U.S. Dollars,
the amount of New Zealand Dollars which would be realized by converting U.S.
Dollars into New Zealand Dollars in the spot market at the exchange rate quoted
by the Administrative Agent, at approximately 11:00 a.m. (London time) two
Business Days prior to the date on which a computation thereof is required to be
made, to major banks in the interbank foreign exchange market for the purchase
of New Zealand Dollars for U.S. Dollars.
"NZ Subsidiary" is defined in Section 6.2(e) hereof.
"Obligations" means all obligations of the U.S. Borrower to pay
principal and interest on the Loans, all Reimbursement Obligations owing under
the Applications, all fees and charges payable hereunder, and all other payment
obligations of the Borrowers or any of their Subsidiaries arising under or in
relation to any Loan Document, including, without limitation, all payment
obligations and Australian Reimbursement Obligations with respect to all
indebtedness, liabilities and obligations of the Australian Borrowers or any
Subsidiary under the Australian Loan Documents, in each case whether now
existing or hereafter arising, due or to become due, direct or indirect,
absolute or contingent, and howsoever evidenced, held or acquired.
"Overdraft Facility" has the meaning given to that term in the
Syndicated Facility Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or any Person
succeeding to any or all of its functions under ERISA.
"Penford Holdings" is defined in the introductory paragraph hereof.
"Percentage" means for any Lender its U.S. Revolver Percentage or the
U.S. Term Loan Percentage, as applicable.
"Permitted Acquisition" means any Acquisition with respect to which all
of the following conditions shall have been satisfied:
(a) the Acquired Business is in an Eligible Line of
Business and has its primary operations within the United States of
America, Australia, New Zealand or, with the prior written consent of
the Administrative Agent, any other country acceptable to the
Administrative Agent;
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(b) the Acquisition shall not be a Hostile Acquisition;
(c) the financial statements of the Acquired Business
shall have been audited by one of the "Big Three" accounting firms or
by another independent accounting firm of national or regional repute
or otherwise reasonably satisfactory to the Administrative Agent, or if
such financial statements have not been audited by such an accounting
firm, (i) such financial statements shall have been approved by the
Administrative Agent and (ii) the Acquired Business has undergone a
successful so-called businessman's review by one of the "Big Three"
accounting firms as part of the Borrowers' due diligence on the
Acquisition;
(d) the Total Consideration for the Acquired Business,
when taken together with the Total Consideration for all Acquired
Businesses acquired during the immediately preceding 12-month period,
does not exceed $50,000,000 (or the Australian Dollar Equivalent or NZ
Dollar Equivalent) in the aggregate;
(e) the Borrowers shall have notified the Administrative
Agent and Lenders not less than 30 days prior to any such Acquisition
and furnished to the Administrative Agent and Lenders at such time
reasonable details as to such Acquisition (including sources and uses
of funds therefor), and 3-year historical financial information and
3-year pro forma financial forecasts of the Acquired Business on a
stand alone basis as well as of the Borrowers on a consolidated basis
after giving effect to the Acquisition and covenant compliance
calculations reasonably satisfactory to the Administrative Agent;
(f) if a new Subsidiary is formed or acquired as a result
of or in connection with the Acquisition, the U.S. Borrower shall have
complied with the requirements of Section 3 hereof in connection
therewith and, if applicable, the relevant Australian Borrower shall
have complied with the terms and conditions of the Australian Loan
Documents;
(g) after giving effect to the Acquisition, no Default or
Event of Default shall exist, including with respect to the covenants
contained in Section 7.22 on a pro forma basis; and
(h) after giving effect to the Acquisition, the amount of
the Unused U.S. Revolving Credit Commitments shall be not less than
$5,000,000.
"Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization or any other
entity or organization, including a government or agency or political
subdivision thereof.
"Plan" means any employee pension benefit plan covered by Title IV of
ERISA or subject to the minimum funding standards under Section 412 of the Code
that either (a) is maintained by a member of the Controlled Group for employees
of a member of the Controlled Group or (b) is maintained pursuant to a
collective bargaining agreement or any other arrangement under which more than
one employer makes contributions and to which a member
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of the Controlled Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made contributions.
"Premises" means the real property owned or leased by any Borrower or
any Subsidiary, including without limitation the real property and improvements
thereon owned by any Borrower or any Subsidiary subject to the Lien of the
Mortgages or any other Collateral Documents.
"Property" means, as to any Person, all types of real, personal,
tangible, intangible or mixed property owned by such Person whether or not
included in the most recent balance sheet of such Person and its subsidiaries
under GAAP.
"RCRA" means the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976 and Hazardous and Solid Waste Amendments
of 1984, 42 U.S.C. Sections 6901 et seq., and any future amendments.
"Reimbursement Obligation" is defined in Section 1.3(c) hereof.
"Related Body Corporate" of a body corporate (within the meaning of the
Corporations Act) means a body corporate of the first body corporate under
section 50 of the Corporations Act.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, migration, dumping, or
disposing into the indoor or outdoor environment, including, without limitation,
the abandonment or discarding of barrels, drums, containers, tanks or other
receptacles containing or previously containing any Hazardous Material.
"Required Lenders" means, as of the date of determination thereof,
Lenders whose U.S. Dollar Equivalent amount of the outstanding Loans, interests
in Letters of Credit, interests in any accepted (and unmatured) bills under the
Syndicated Facility Agreement and overdrafts under the Overdraft Facility,
unused commitments to extend credit to or for the account of any Australian
Borrower under any Australian Credit Agreement and Unused U.S. Revolving Credit
Commitments as of such date constitute more than 66-2/3% of the sum of the U.S.
Dollar Equivalent of the total outstanding Loans, interests in Letters of
Credit, unused commitments to extend credit to or for the account of any
Australian Borrower under any Australian Credit Agreement and Unused U.S.
Revolving Credit Commitments of the Lenders as of such date.
"Restricted Payments" is defined in Section 7.12.
"Revolving Credit Termination Date" means October 7, 2006, or such
earlier date on which the U.S. Revolving Credit Commitments are terminated in
whole pursuant to Section 2.3, 8.2 or 8.3 hereof.
"S&P" means Standard & Poor's Ratings Services Group, a division of The
McGraw-Hill Companies, Inc.
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"Scheme of Arrangement" has the meaning it has in the Corporations Act.
"Second Australian Memorandum of Deposit" means the deed so entitled
dated on or about the date of this Agreement between the U.S. Borrower and ANZ
Capel Court Limited in its capacity as "Trustee" under the Debenture Trust Deed.
"Second Deed of Guarantee and Indemnity" means the deed poll so
entitled dated on or about the date of this Agreement by the U.S. Borrower and
its Domestic Subsidiaries.
"Security Trust Collateral Documents" means, as the same may be
amended, restated, supplemented, modified or replaced from time to time, (i) the
Penford Security Trust Guarantee and Indemnity dated 15 November 2000 from
Penford Holdings on account of Penford Australia Limited in favour of ANZ Capel
Court Limited, (ii) the Penford Security Trust Fixed and Floating Charge dated
15 November 2000 granted by Penford Australia Limited in favour of ANZ Capel
Court Limited over all its present and future assets other than assets in the
Australian Capital Territory and the Northern Territory, (iii) the Penford
Security Trust Fixed and Floating Charge dated 15 November 2000 granted by
Penford Australia Limited in favour of ANZ Capel Court Limited over all its
present and future assets in the Australian Capital Territory and the Northern
Territory, (iv) the Penford Security Trust Fixed and Floating Charge dated 15
November 2000 granted by Penford Holdings in favour of ANZ Capel Court Limited
over all its present and future assets, (v) the Security Trust Mortgages, (vi)
the New Zealand Securities, (vii) the First Deed of Guarantee and Indemnity and
(viii) the First Australian Memorandum of Deposit.
"Security Trust Deed" means the deed so entitled dated 15 November 2000
between Penford Australia Limited as "Chargor" and ANZ Capel Court Limited as
"Security Trustee".
"Security Trust Mortgages" means, as the same may be amended, restated,
supplemented, modified or replaced from time to time, (i) the Penford Security
Trust New South Wales Real Property Act Mortgage between Penford Australia
Limited and ANZ Capel Court Limited over Certificate of Title Folio Identifiers
11/777128, 1/712114, Volume 5824 Folio 13, A/371305, B/371305, 1/881132,
3/873641, 42/719840, 34/826572 and 35/826572, (ii) the Penford Security Trust
New South Wales Real Property Act Mortgage between Penford Australia Limited and
ANZ Capel Court Limited over Certificate of Title Folio Identifiers 5/999939,
6/999939, 37/826572, 36/826572, 1/196504, 1/161043, A/164721, 2/162236,
3/162236, 4/607266 and Volume 6605 Folio 139 and (iii) the Penford Security
Trust New South Wales Old System Mortgage between Penford Australia Limited and
ANZ Capel Court Limited over Book 3834 No 598, Book 3834 No 603, Book 3834 No
599 and Book 3834 No 597.
"Subordinated Debt" means Indebtedness for Borrowed Money owing to any
Person on terms and conditions, and in such amounts, acceptable to the
Administrative Agent and the Required Lenders and which is subordinated in right
of payment to the prior payment in full of the Obligations pursuant to written
subordination provisions approved in writing by the Administrative Agent and the
Required Lenders.
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"Subscription Agreement" means the agreement so entitled dated on or
about the date of this Agreement between Penford Holdings as "Issuer" and the
Australian Lender as "Subscriber".
"Subsidiary" means, as to any particular parent corporation or
organization, any other corporation or organization more than 50% of the
outstanding Voting Stock of which is at the time directly or indirectly owned by
such parent corporation or organization or by any one or more other entities
which are themselves subsidiaries of such parent corporation or organization.
Unless otherwise expressly noted herein, the term "Subsidiary" means a
Subsidiary of the applicable Borrower or of any of its direct or indirect
Subsidiaries.
"Syndicated Facility Agreement" means the agreement so entitled dated
15 November 2000 between Penford Australia Limited as "Borrower" and the
Australian Lender as "Agent" and "Participant", as amended by deeds of variation
dated 22 June 2001 and 22 August 2001 and the Deed of Amendment (Syndicated
Facility Agreement) and, as the same may be amended, restated, supplemented,
modified or replaced from time to time.
"Telerate Page 3750" means the display designated as "Page 3750" on the
Telerate Service (or such other page as may replace Page 3750 on that service or
such other service as may be nominated by the British Bankers' Association as
the information vendor for the purpose of displaying British Bankers'
Association Interest Settlement Rates for U.S. Dollar deposits).
"Total Consideration" means the total amount (but without duplication)
of (a) cash paid in connection with any Acquisition, plus (b) indebtedness
payable to the seller in connection with such Acquisition, plus (c) the fair
market value of any equity securities, including any warrants or options
therefor, delivered in connection with any Acquisition, plus (d) the present
value of covenants not to compete entered into in connection with such
Acquisition or other future payments which are required to be made over a period
of time and are not contingent upon the Borrowers or their Subsidiary meeting
financial performance objectives (exclusive of salaries paid in the ordinary
course of business) (discounted at the Base Rate), but only to the extent not
included in clause (a), (b) or (c) above, plus (e) the amount of indebtedness
assumed in connection with such Acquisition.
"Total Funded Debt" means, at any time the same is to be determined,
the sum (but without duplication) of (a) all Indebtedness for Borrowed Money of
the U.S. Borrower and its Subsidiaries at such time, plus (b) all Indebtedness
for Borrowed Money of any other Person which is directly or indirectly
guaranteed by the U.S. Borrower or any of its Subsidiaries or which the U.S.
Borrower or any of its Subsidiaries has agreed (contingently or otherwise) to
purchase or otherwise acquire or in respect of which any Borrower or any of its
Subsidiaries has otherwise assured a creditor against loss plus (c) the maximum
amount available to be drawn under all letters of credit issued for the account
of such Person and all unpaid drawings in respect of such letters of credit.
"Total Funded Debt Ratio" is defined in Section 7.23 hereto.
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"Total Senior Funded Debt" means, at any time the same is to be
determined, Total Funded Debt at such time minus the principal balance of
Subordinated Debt of the Borrowers.
"Total Senior Funded Debt/EBITDA Ratio" means, as of the last day of
any fiscal quarter of the U.S. Borrower, the ratio of Total Senior Funded Debt
of the U.S. Borrower and its Subsidiaries as of the last day of such fiscal
quarter to EBITDA of the U.S. Borrower and its Subsidiaries for the period of
four fiscal quarters then ended.
"Unfunded Vested Liabilities" means, for any Plan at any time, the
amount (if any) by which the present value of all vested nonforfeitable accrued
benefits under such Plan exceeds the fair market value of all Plan assets
allocable to such benefits, all determined as of the then most recent valuation
date for such Plan, but only to the extent that such excess represents a
potential liability of a member of the Controlled Group to the PBGC or the Plan
under Title IV of ERISA.
"Unused U.S. Revolving Credit Commitments" means, at any time, the
difference between the U.S. Revolving Credit Commitments then in effect and the
aggregate outstanding principal amount of U.S. Revolving Loans and U.S. L/C
Obligations, provided that U.S. Swing Loans outstanding from time to time shall
be deemed to reduce the Unused U.S. Revolving Credit Commitment of the
Administrative Agent for purposes of computing the commitment fee under Section
2.1(a) hereof.
"U.S. Borrower" is defined in the introductory paragraph of this
Agreement.
"U.S. Dollars" and "$" each means the lawful currency of the United
States of America.
"U.S. Dollar Equivalent" means (x) with respect to amounts in
Australian Dollars, the amount of U.S. Dollars which would be realized by
converting Australian Dollars into U.S. Dollars in the spot market at the
exchange rate quoted by the Administrative Agent, at approximately 11:00 a.m.
(London time) two Business Days prior to the date on which a computation thereof
is required to be made, to major banks in the interbank foreign exchange market
for the purchase of U.S. Dollars for Australian Dollars and (y) with respect to
amounts U.S. Dollars, such amount.
"U.S. Memorandum of Deposit" means the deed entitled U.S. Memorandum of
Deposit dated on or about the date of this Agreement between the U.S. Borrower
and the Administrative Agent, as the same may be amended, restated,
supplemented, modified or replaced from time to time.
"U.S. L/C Issuer" means Harris Trust and Savings Bank.
"U.S. L/C Obligations" means the aggregate undrawn face amounts of all
outstanding U.S. Letters of Credit and all unpaid Reimbursement Obligations.
"U.S. L/C Sublimit" means $10,000,000, as reduced pursuant to the terms
hereof.
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"U.S. Lenders" means and includes Harris Trust and Savings Bank and the
other financial institutions from time to time party to this Agreement,
including each assignee U.S. Lender pursuant to Section 12.12 hereof.
"U.S. Participating Interest" is defined in Section 1.3(d) hereof.
"U.S. Participating Lender" is defined in Section 1.3(d) hereof.
"U.S. Revolver Percentage" means, for each U.S. Lender, the percentage
of the U.S. Revolving Credit Commitments represented by such U.S. Lender's U.S.
Revolving Credit Commitment or, if the U.S. Revolving Credit Commitments have
been terminated, the percentage held by such U.S. Lender (including through
participation interests in Reimbursement Obligations) of the aggregate principal
amount of all U.S. Revolving Loans and U.S. L/C Obligations then outstanding.
"U.S. Revolving Credit" means the credit facility for making U.S.
Revolving Loans and issuing U.S. Letters of Credit described in Sections 1.2 and
1.3 hereof.
"U.S. Revolving Credit Commitment" means, as to any U.S. Lender, the
obligation of such U.S. Lender to make U.S. Revolving Loans and to participate
in U.S. Letters of Credit issued for the account of the U.S. Borrower hereunder
in an aggregate principal or face amount at any one time outstanding not to
exceed the amount set forth opposite such U.S. Lender's name on Schedule 1
attached hereto and made a part hereof, as the same may be reduced or modified
at any time or from time to time pursuant to the terms hereof. The U.S. Borrower
and the U.S. Lenders acknowledge and agree that the U.S. Revolving Credit
Commitments of the U.S. Lenders aggregate $40,000,000 on the date hereof.
"U.S. Revolving Loan" is defined in Section 1.2 hereof and, as so
defined, includes a Base Rate Loan or a Eurodollar Loan, each of which is a
"type" of U.S. Revolving Loan hereunder.
"U.S. Revolving Note" is defined in Section 1.10 hereof.
"U.S. Security Agreement" means that certain U.S. Security Agreement
dated the date of this Agreement among the U.S. Borrower and its Domestic
Subsidiaries and the Administrative Agent, as the same may be amended, modified,
supplemented or restated from time to time.
"U.S. Swing Line" means the credit facility for making one or more U.S.
Swing Loans described in Section 1.12 hereof.
"U.S. Swing Line Sublimit" means $5,000,000, as reduced pursuant to the
terms hereof.
"U.S. Swing Loan" and "U.S. Swing Loans" each is defined in Section
1.12 hereof.
"U.S. Swing Note" is defined in Section 1.10 hereof.
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"U.S. Term Credit" means the credit facility for the U.S. Term Loans
described in Section 1.1(a) hereof.
"U.S. Term Loan" is defined in Section 1.1(a) hereof and, as so
defined, includes a Base Rate Loan or a Eurodollar Loan, each of which is a
"type" of U.S. Term Loan hereunder.
"U.S. Term Loan Commitment" means, as to any U.S. Lender, the
obligation of such U.S. Lender to make its U.S. Term Loan on the Closing Date in
the principal amount not to exceed the amount set forth opposite such U.S.
Lender's name on Schedule 1 attached hereto and made a part hereof. The U.S.
Borrower and the U.S. Lenders acknowledge and agree that the U.S. Term Loan
Commitments of the U.S. Lenders aggregate $40,000,000 on the date hereof.
"U.S. Term Loan Percentage" means, for each U.S. Lender, the percentage
of the U.S. Term Loan Commitments represented by such U.S. Lender's U.S. Term
Loan Commitment or, if the U.S. Term Loan Commitments have been terminated or
have expired, the percentage held by such U.S. Lender of the aggregate principal
amount of all U.S. Term Loans then outstanding.
"U.S. Term Note" is defined in Section 1.10 hereof.
"Voting Equity" shall mean the issued and outstanding shares of each
class of capital stock or other ownership interests entitled to vote (within the
meaning of Treas. Reg. Section 1.956-2(c)(2).
"Voting Stock" of any Person means capital stock or other equity
interests of any class or classes (however designated) having ordinary power for
the election of directors or other similar governing body of such Person, other
than stock or other equity interests having such power only by reason of the
happening of a contingency.
"Welfare Plan" means a "welfare plan" as defined in Section 3(1) of
ERISA.
"Wholly-owned Subsidiary" means a Subsidiary of which all of the issued
and outstanding shares of capital stock (other than directors' qualifying shares
as required by law) or other equity interests are owned by the Borrowers and/or
one or more Wholly-owned Subsidiaries within the meaning of this definition.
Section 4.2. Interpretation. The foregoing definitions are equally
applicable to both the singular and plural forms of the terms defined. The words
"hereof", "herein", and "hereunder" and words of like import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. All references to time of day herein are references
to Chicago, Illinois, time unless otherwise specifically provided. Where the
character or amount of any asset or liability or item of income or expense is
required to be determined or any consolidation or other accounting computation
is required to be made for the purposes of this Agreement, it shall be done in
accordance with GAAP except where such principles are inconsistent with the
specific provisions of this Agreement.
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Section 4.3. Change in Accounting Principles. If, after the date of
this Agreement, there shall occur any change in GAAP from those used in the
preparation of the financial statements referred to in Section 5.5 hereof and
such change shall result in a change in the method of calculation of any
financial covenant, standard or term found in this Agreement, the Borrowers or
the Required Lenders may by notice to the Lenders and the Borrowers,
respectively, require that the Lenders and the Borrowers negotiate in good faith
to amend such covenants, standards, and term so as equitably to reflect such
change in accounting principles, with the desired result being that the criteria
for evaluating the financial condition of the Borrowers and their Subsidiaries
shall be the same as if such change had not been made. No delay by the Borrowers
or the Required Lenders in requiring such negotiation shall limit their right to
so require such a negotiation at any time after such a change in accounting
principles. Until any such covenant, standard, or term is amended in accordance
with this Section 4.3, financial covenants shall be computed and determined in
accordance with GAAP in effect prior to such change in accounting principles.
Without limiting the generality of the foregoing, the Borrowers shall neither be
deemed to be in compliance with any financial covenant hereunder nor out of
compliance with any financial covenant hereunder if such state of compliance or
noncompliance, as the case may be, would not exist but for the occurrence of a
change in accounting principles after the date hereof.
SECTION 5. REPRESENTATIONS AND WARRANTIES.
The U.S. Borrower represents and warrants to the Administrative Agent
and the Lenders, and each Australian Borrower represents and warrants to the
Administrative Agent, the Australian Agent, the Australian Trustee and the
Lenders as to itself and its Subsidiaries, as follows:
Section 5.1. Organization and Qualification. (a) The U.S. Borrower is
duly organized, validly existing and in good standing as a corporation under the
laws of the State of Washington. The U.S. Borrower has full and adequate power
to own its Property and conduct its business as now conducted, and is duly
licensed or qualified and in good standing in each jurisdiction in which the
nature of the business conducted by it or the nature of the Property owned or
leased by it requires such licensing or qualifying, except where the failure to
do so would not have a Material Adverse Effect.
(b) Penford Holdings has been incorporated as a proprietary
company limited by shares, and Penford Australia Limited has been incorporated
as a public company limited by shares, in each case in accordance with the laws
of the Commonwealth of Australia. The Australian Borrowers are validly existing
under those laws and have power and authority to carry on their businesses as
they are now being conducted. The Australian Borrowers have full and adequate
power to own their Property and are duly licensed or qualified in each
jurisdiction in which the nature of the business conducted by them or the nature
of the Property owned or leased by them requires such licensing or qualifying,
except where the failure to do so would not have a Material Adverse Effect.
Section 5.2. Subsidiaries. Each Subsidiary is duly incorporated (or
otherwise organized if such Subsidiary is not a corporation), validly existing
and in good standing (to the extent the
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concept of good standing is applicable) under the laws of the jurisdiction in
which it is incorporated or organized, as the case may be, has full and adequate
power to own its Property and conduct its business as now conducted, and is duly
licensed or qualified and in good standing (to the extent the concept of good
standing is applicable in such jurisdiction) in each jurisdiction in which the
nature of the business conducted by it or the nature of the Property owned or
leased by it requires such licensing or qualifying, except where the failure to
do so would not have a Material Adverse Effect. Schedule 5.2 hereto identifies
each Subsidiary, the jurisdiction of its incorporation or organization, as the
case may be, the percentage of issued and outstanding shares of each class of
its capital stock or other equity interests owned by any Borrower and its other
Subsidiaries and, if such percentage is not 100% (excluding, if applicable,
directors' qualifying shares as required by law), a description of each class of
its authorized capital stock and other equity interests and the number of shares
of each class issued and outstanding. All of the outstanding shares of capital
stock and other equity interests of each Subsidiary are validly issued and
outstanding and fully paid and nonassessable and all such shares and other
equity interests indicated on Schedule 5.2 as owned by any Borrower or another
Subsidiary are owned, beneficially and of record, by such Borrower or such
Subsidiary free and clear of all Liens other than the Liens granted in favor of
the Administrative Agent or the Australian Lender (or any security trustee
therefor), as the case may be, pursuant to the Collateral Documents. There are
no outstanding commitments or other obligations of any Subsidiary to issue, and
no options, warrants or other rights of any Person to acquire, any shares of any
class of capital stock or other equity interests of any Subsidiary.
Section 5.3. Authority and Validity of Obligations. Each Borrower has
full right and authority to enter into this Agreement, the other Loan Documents
and the Material Australian Documents executed by it, to make the borrowings
herein provided for or under the other Loan Documents, to issue the Notes in
evidence thereof, to grant to the Administrative Agent or the Australian Lender
(or any security trustee therefor), as the case may be, the Liens described in
the Collateral Documents, and to perform all of its obligations hereunder and
under the other Loan Documents and the Material Australian Documents executed by
it. Each Subsidiary has full right and authority to enter into the Loan
Documents executed by it, to guarantee the Obligations, Hedging Liability, and
Funds Transfer and Deposit Account Liability, to grant to the Administrative
Agent or the Australian Lender (or any security trustee therefor), as the case
may be, the Liens described in the Collateral Documents executed by such Person,
and to perform all of its obligations under the Loan Documents executed by it.
The Loan Documents delivered by the Borrowers and by each Subsidiary and the
Material Australian Documents to which one or more Australian Borrowers is a
party have been duly authorized, executed, and delivered by such Person and
constitute valid and binding obligations of such Person enforceable against it
in accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance or similar laws affecting
creditors' rights generally and general principles of equity (regardless of
whether the application of such principles is considered in a proceeding in
equity or at law); and this Agreement, the other Loan Documents and the Material
Australian Documents do not, nor does the performance or observance by the
Borrowers or any Subsidiary of any of the matters and things herein or therein
provided for, (a) contravene or constitute a default under any provision of law
or any judgment, injunction, order or decree binding upon any Borrower or any
Subsidiary or any provision of the organizational documents (e.g., charter,
articles of incorporation or by-laws, articles of
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association or operating agreement, partnership agreement or other similar
document) of any Borrower or any Subsidiary, (b) contravene or constitute a
default under any covenant, indenture or agreement of or affecting any Borrower
or any Subsidiary or any of its Property, in each case where such contravention
or default, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect or (c) result in the creation or imposition of
any Lien on any Property of any Borrower or any Subsidiary other than the Liens
granted in favor of the Administrative Agent or the Australian Lender (or any
security trustee therefor) pursuant to the Collateral Documents.
Section 5.4. Use of Proceeds; Margin Stock. The Borrowers shall use the
proceeds of the Loans to refinance existing indebtedness, for their general
working capital purposes, to finance capital expenditures and for such other
legal and proper purposes as are consistent with all applicable laws. Neither of
the Borrowers nor any Subsidiary is engaged in the business of extending credit
for the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System), and no
part of the proceeds of any Loan or any other extension of credit made hereunder
will be used to purchase or carry any such margin stock or to extend credit to
others for the purpose of purchasing or carrying any such margin stock. Margin
stock (as hereinabove defined) constitutes less than 25% of the assets of each
Borrower and its Subsidiaries which are subject to any limitation on sale,
pledge or other restriction hereunder.
Section 5.5. Financial Reports. The consolidated balance sheet of the
Borrowers and their Subsidiaries as at August 30, 2002, and the related
consolidated statements of income, retained earnings and cash flows of the
Borrowers and their Subsidiaries for the fiscal year then ended, and
accompanying notes thereto, which financial statements are accompanied by the
audit report of Ernst & Young, LLP, independent public accountants, and the
unaudited interim consolidated balance sheet of the Borrowers and their
Subsidiaries as at May 31, 2003, and the related consolidated statements of
income, retained earnings and cash flows of the Borrowers and their Subsidiaries
for the three (3) months then ended, heretofore furnished to the Administrative
Agent and the Lenders, fairly present the consolidated financial condition of
the Borrowers and their Subsidiaries as at said dates and the consolidated
results of their operations and cash flows for the periods then ended in
conformity with GAAP applied on a consistent basis and disclose or reflect all
its actual and contingent liabilities at that date. Neither of the Borrowers nor
any Subsidiary has contingent liabilities which are material to it other than as
indicated on such financial statements or, with respect to future periods, on
the financial statements furnished pursuant to Section 7.5 hereof.
Section 5.6. No Material Adverse Change. Since August 31, 2002, there
has been no Material Adverse Effect.
Section 5.7. Full Disclosure. The statements and information furnished
to the Administrative Agent and the Lenders in connection with the negotiation
of this Agreement and the other Loan Documents and the commitments by the
Lenders to provide all or part of the financing contemplated hereby or by the
other Loan Documents do not contain any untrue statements of a material fact or
omit a material fact necessary to make the material statements contained herein
or therein not misleading, the Administrative Agent and the Lenders
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acknowledging that as to any projections furnished to the Administrative Agent
and the Lenders, the Borrowers only represent that the same were prepared on the
basis of information and estimates the Borrowers believed to be reasonable.
Section 5.8. Trademarks, Franchises, and Licenses. The Borrowers and
their Subsidiaries own, possess, or have the right to use all necessary patents,
licenses, franchises, trademarks, trade names, trade styles, copyrights, trade
secrets, know how, and confidential commercial and proprietary information to
conduct their businesses as now conducted, without known conflict with any
patent, license, franchise, trademark, trade name, trade style, copyright or
other proprietary right of any other Person.
Section 5.9. Governmental Authority and Licensing. The Borrowers and
their Subsidiaries have received all licenses, permits, and approvals of all
federal, state, and local governmental authorities, if any, necessary to conduct
their businesses, in each case where the failure to obtain or maintain the same
could reasonably be expected to have a Material Adverse Effect. No investigation
or proceeding which, if adversely determined, could reasonably be expected to
result in revocation or denial of any material license, permit or approval is
pending or, to the knowledge of the Borrowers, threatened.
Section 5.10. Good Title. The Borrowers and their Subsidiaries have
good and defensible title (or valid leasehold interests) to their assets as
reflected on the most recent consolidated balance sheet of the Borrowers and
their Subsidiaries furnished to the Administrative Agent and the Lenders (except
for sales of assets in the ordinary course of business), subject to no Liens
other than such thereof as are permitted by Section 7.8 hereof.
Section 5.11. Litigation and Other Controversies. There is no
litigation or governmental or arbitration proceeding or labor controversy
pending, nor to the knowledge of the Borrowers threatened, against any Borrower
or any Subsidiary or any of its assets which if adversely determined,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
Section 5.12. Taxes. All tax returns required to be filed by each of
the Borrowers or any Subsidiary in any jurisdiction have, in fact, been filed,
and all taxes, assessments, fees, and other governmental charges upon the
Borrowers or any of their Subsidiaries or upon any of their Property, income or
franchises, which are shown to be due and payable in such returns, have been
paid, except such taxes, assessments, fees and governmental charges, if any, as
are being contested in good faith and by appropriate proceedings which prevent
enforcement of the matter under contest and as to which adequate reserves
established in accordance with GAAP have been provided. The Borrowers do not
know of any proposed additional tax assessment against the Borrowers or against
any of their Subsidiaries for which adequate provisions in accordance with GAAP
have not been made on their accounts. Adequate provisions in accordance with
GAAP for taxes on the books of each of the Borrowers and each Subsidiary have
been made for all open years, and for the current fiscal period.
Section 5.13. Approvals. No authorization, consent, license or
exemption from, or filing or registration with, any court or governmental
department, agency or instrumentality, nor any
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approval or consent of any other Person, is or will be necessary to the valid
execution, delivery or performance by the Borrowers or any Subsidiary of any
Loan Document, except for such approvals which have been obtained prior to the
date of this Agreement and remain in full force and effect.
Section 5.14. Affiliate Transactions. (a) Neither the U.S. Borrower nor
any Domestic Subsidiary is a party to any contracts or agreements with any of
its Affiliates (other than with Wholly-owned Subsidiaries) on terms and
conditions which are less favorable to the Borrowers or such Subsidiary than
would be usual and customary in similar contracts or agreements between Persons
not affiliated with each other.
(b) No Australian Borrower or any Subsidiary of an Australian
Borrower has contravened or will contravene Section 208 or Section 209 of the
Corporations Act by entering into any Loan Document or participating in any
transaction in connection with a Loan Document.
Section 5.15. Investment Company; Public Utility Holding Company.
Neither of the Borrowers nor any Subsidiary is an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "public utility holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
Section 5.16. ERISA. Each of the Borrowers and each other member of
their Controlled Group has fulfilled its obligations under the minimum funding
standards of and is in compliance in all material respects with ERISA and the
Code to the extent applicable to it and has not incurred any liability to the
PBGC or a Plan under Title IV of ERISA other than a liability to the PBGC for
premiums under Section 4007 of ERISA. Neither of the Borrowers nor any
Subsidiary has any contingent liabilities with respect to any post-retirement
benefits under a Welfare Plan, other than liability for continuation coverage
described in article 6 of Title I of ERISA.
Section 5.17. Compliance with Laws. (a) The Borrowers and their
Subsidiaries are in compliance with the requirements of all federal, state and
local laws, rules and regulations applicable to or pertaining to their Property
or business operations (including, without limitation, the Occupational Safety
and Health Act of 1970, the Americans with Disabilities Act of 1990, and laws
and regulations establishing quality criteria and standards for air, water, land
and toxic or hazardous wastes and substances), where any such non-compliance,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(b) Without limiting the representations and warranties set forth
in Section 5.17(a) above, except for such matters, individually or in the
aggregate, which could not reasonably be expected to result in a Material
Adverse Effect, each Borrower represents and warrants that: (i) such Borrower
and its Subsidiaries, and each of their Premises, comply in all material
respects with all applicable Environmental Laws; (ii) such Borrower and its
Subsidiaries have obtained all governmental approvals required for their
operations and each of their Premises by any applicable Environmental Law; (iii)
such Borrower and its Subsidiaries have not, and such
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Borrower has no knowledge of any other Person who has, caused any Release,
threatened Release or disposal of any Hazardous Material at, on, about, or off
any of their Premises in any material quantity and, to the knowledge of such
Borrower, none of its Premises are adversely affected by any Release, threatened
Release or disposal of a Hazardous Material originating or emanating from any
other property; (iv) none of its Premises contain and have contained any: (1)
underground storage tank, (2) material amounts of asbestos containing building
material, (3) landfills or dumps, (4) hazardous waste management facility as
defined pursuant to RCRA or any comparable state law or any Environmental Law of
any jurisdiction in which any of such Borrower's or Subsidiary's assets are
located, or (5) site on or nominated for the National Priority List promulgated
pursuant to CERCLA or any state remedial priority list promulgated or published
pursuant to any comparable state law; (v) such Borrower and its Subsidiaries
have not used a material quantity of any Hazardous Material and have conducted
no Hazardous Material Activity at any of their Premises except in compliance
with applicable Environmental Laws; (vi) such Borrower and its Subsidiaries have
no material liability for response or corrective action, natural resource damage
or other harm pursuant to CERCLA, RCRA, any comparable state law or any
Environmental Law of any jurisdiction in which any of such Borrower's or
Subsidiary's assets are located; (vii) such Borrower and its Subsidiaries are
not subject to, have no notice or knowledge of and are not required to give any
notice of any Environmental Claim involving such Borrower or its Subsidiary or
any of their Premises, and there are no conditions or occurrences at any of
their Premises which could reasonably be anticipated to form the basis for an
Environmental Claim against such Borrower or its Subsidiary or any of their
Premises which if adversely determined would have a Material Adverse Effect;
(viii) none of its Premises are subject to any, and such Borrower has no
knowledge of any imminent, restriction on the ownership, occupancy, use or
transferability of its Premises in connection with any (1) Environmental Law or
(2) Release, threatened Release or disposal of a Hazardous Material; and (ix)
there are no conditions or circumstances at any of its Premises which pose an
unreasonable risk to the environment or the health or safety of Persons.
Section 5.18. Other Agreements. Neither of the Borrowers nor any
Subsidiary is in default under the terms of any covenant, indenture or agreement
of or affecting such Person or any of its Property, which default if uncured
could reasonably be expected to have a Material Adverse Effect.
Section 5.19. Solvency. The Borrowers and their Subsidiaries,
individually and collectively, are solvent, able to pay their debts as they
become due, and have sufficient capital to carry on their business and all
businesses in which they are about to engage.
Section 5.20. No Default. No Default or Event of Default has occurred
and is continuing.
Section 5.21. Not a Trustee. The Borrowers and their Subsidiaries do
not enter, and have not entered, into any Loan Document as trustee.
Section 5.22. Benefit. Each Borrower and each Subsidiary has benefited
or will benefit by entering into the Loan Documents and the Material Australian
Documents to which it is a party.
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Section 5.23. Indebtedness for Borrowed Money. No Borrower or
Subsidiary has incurred any Indebtedness for Borrowed Money in breach of this
Agreement.
Section 5.24. No Immunity. No Borrower nor any Subsidiary has immunity
from the jurisdiction of a court or from legal process, and no property of any
such Person is immune from suit or execution.
Section 5.25. Copies of Documents. All copies of documents provided by
the Australian Borrowers and their Subsidiaries to the Administrative Agent are
true and complete and the original documents are in full force and effect.
Section 5.26. Own Enquiries. The Borrowers and the Subsidiaries have
relied on their own investigations and enquiries regarding the transactions
contemplated by the Loan Documents and have not relied on any information,
advice or opinion (including information, advice or opinions regarding interest
rates, hedging arrangements or exchange rates) given or offered by or on behalf
of the Administrative Agent or the Lenders even if in answer to any enquiry by
or for it.
Section 5.27. Insurance. The Borrowers and the Subsidiaries have
complied with their obligations under this Agreement and the other Loan
Documents to insure and maintain insurance.
Section 5.28. No Related Bodies Corporate. The Australian Borrowers
have no Related Bodies Corporate other than those previously notified in writing
to the Administrative Agent.
Section 5.29. Permanent Establishment in Australia. The U.S. Borrower
does not have, and does not intend to establish, a "permanent establishment" in
Australia within the meaning of the Australia/Netherlands Double Taxation
Agreement dated 17 March 1976 (as amended by the Protocol dated 17 March 1976
and the Protocol dated 13 June 1986).
Section 5.30. Native Title. The Australian Borrowers are not aware of
any actual or potential native title claim or interest in relation to any
Premises which, if it were successful, would have a Material Adverse Effect.
Section 5.31. Stamp Duty. The Australian Collateral Documents have been
duly stamped as required by all applicable laws.
Notwithstanding anything in this Section 5 to the contrary, each
Australian Borrower makes no representations or warranties with respect to the
representations and warranties contained in Sections 5.1(a), 5.6, 5.14(a), 5.16,
and 5.29 hereof.
SECTION 6. CONDITIONS PRECEDENT.
The obligation of each Lender to advance, continue or convert any Loan
(other than the continuation of, or conversion into, a Base Rate Loan) or of the
U.S. L/C Issuer to issue, extend the expiration date (including by not giving
notice of non-renewal) of or increase the amount of
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any U.S. Letter of Credit under this Agreement and the obligation of the
Australian Lender to purchase any debenture pursuant to the Subscription
Agreement or create any overdraft or accept any bill under the Syndicated
Facility Agreement, shall be subject to the following conditions precedent:
Section 6.1. All Credit Events. At the time of each Credit Event
hereunder or under the Australian Credit Agreements:
(a) each of the representations and warranties set forth
herein and in the other Loan Documents shall be and remain true and
correct as of said time, except to the extent the same expressly relate
to an earlier date;
(b) the Borrowers and each Subsidiary shall be in
compliance with all of the terms and conditions hereof and of the other
Loan Documents, and no Default or Event of Default shall have occurred
and be continuing or would occur as a result of such Credit Event or
from the application of the proceeds therefrom;
(c) in the case of a Borrowing under this Agreement, the
Administrative Agent shall have received the notice required by Section
1.6 hereof, in the case of the issuance of (i) any U.S. Letter of
Credit the U.S. L/C Issuer shall have received a duly completed
Application for such U.S. Letter of Credit together with any fees
called for by Section 2.1 hereof, and, in the case of an extension or
increase in the amount of a U.S. Letter of Credit, a written request
therefor in a form acceptable to the U.S. L/C Issuer together with fees
called for by Section 2.1 hereof;
(d) in the case of a Credit Event under the Syndicated
Facility Agreement, Penford Australia Limited shall have satisfied, to
the Australian Agent's satisfaction, each condition precedent set out
in clause 6.2 of the Syndicated Facility Agreement; and
(e) such Credit Event shall not violate any order,
judgment or decree of any court or other authority or any provision of
law or regulation applicable to the Administrative Agent, the
Australian Agent, the Australian Trustee or any Lender (including,
without limitation, Regulation U of the Board of Governors of the
Federal Reserve System) as then in effect.
Each request for a Borrowing hereunder, each request for a "Drawing"
under the Syndicated Facility Agreement as therein defined, each advance under
the Overdraft Facility, the issue of an "Issue Notice" under the Debenture Trust
Deed as therein defined and each request for the issuance of, increase in the
amount of, or extension of the expiration date of, a U.S. Letter of Credit shall
be deemed to be a representation and warranty by the Borrowers on the date on
such Credit Event as to the facts specified in subsections (a) through (d), both
inclusive, of this Section.
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Section 6.2. Initial Credit Event. Before or concurrently with the
first Credit Event to occur following the execution and delivery of this
Agreement by the Borrowers:
(a) the Administrative Agent shall have received for each
Lender the favorable written opinions of (i) Preston, Gates & Ellis,
LLP, counsel to the U.S. Borrower and each Domestic Subsidiary, in
substantially the forms of Exhibit H hereto, and otherwise in form and
substance satisfactory to the Required Lenders, (ii) Mallesons Stephen
Jaques, special Australian counsel to the Lenders, in form and
substance satisfactory to the Required Lenders, and (iii) Chapman
Tripp, special New Zealand counsel to the Lenders, in form and
substance satisfactory to the Required Lenders;
(b) the Administrative Agent shall have received for each
Lender (i) certified copies of resolutions of the Board of Directors
(or comparable authorizing documents) of the U.S. Borrower authorizing
the execution, delivery and performance of this Agreement and such
Borrower's Notes (if applicable), indicating the authorized signers of
this Agreement and such Borrower's Notes (if applicable) and all other
documents relating thereto and the specimen signatures of such signers
and (ii) copies of such Borrower's Certificate of Incorporation and
by-laws (or other comparable constituent documents) certified by the
Secretary or other appropriate officer of such Borrower together with
(if available in the relevant jurisdiction) a certificate of good
standing (or similar document) certified by the appropriate
governmental officer in the jurisdiction of such Borrower's
organization;
(c) the Administrative Agent shall have received for each
Lender, in respect of each Australian Borrower (i) a certified extract
of the minutes of a meeting of the Board of Directors of the Australian
Borrower evidencing resolutions authorizing its execution, delivery and
performance of the Relevant Documents to which it is a party and
providing confirmations regarding, among other things, directors'
self-interested transactions, corporate benefit, solvency, financial
assistance and related party transactions, and indicating the
authorized signers of the Relevant Documents to which it is a party and
all other documents relating thereto, (ii) a copy of the specimen
signatures of such signers, certified by a director or company
secretary of the Australian Borrower, (iii) a certified copy of each
document which evidences any other necessary corporate or other action
of the Australian Borrower in connection with the Relevant Documents to
which it is a party, (iv) a certified copy of the power of attorney
under which the Relevant Documents to which the Australian Borrower is
a party were or are to be signed on its behalf, together with evidence
of registration, where registration is required by applicable laws, (v)
a copy of the Australian Borrower's certificate of incorporation and
constituent documents certified by a director or company secretary of
the Australian Borrower, and for the purposes of this paragraph (c),
"Relevant Documents" means this Agreement, the Australian Amendatory
Documents, the Subscription Agreement, the Intercreditor Agreement and
any other Loan Document or related notice, certificate or other
document to be executed by or on behalf of an Australian Borrower on or
about the date of this Agreement;
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(d) the Administrative Agent shall have received for each
Lender a certified copy of a special resolution of Penford Holdings
[passed under section 249B of the Corporations Act] (in a form
reasonably satisfactory to the Administrative Agent and the Australian
Agent) to amend its constituent documents in relation to the
registration of share transfers and other matters affecting security
over shares in the company;
(e) the Administrative Agent shall have received for each
Lender (i) certified copies of resolutions of the Board of Directors of
each Subsidiary (other than each Subsidiary incorporated in New Zealand
(each an "NZ Subsidiary")) authorizing its execution, delivery and
performance of the Loan Documents to which it is a party, indicating
the authorized signers of the Loan Documents to which it is a party and
all other documents relating thereto and the specimen signatures of
such signers and (ii) copies of such Subsidiary's Certificate or
Articles of Incorporation and by-laws (or analogous organizational
documents) certified by the Secretary or other appropriate officer of
such Subsidiary together with, to the extent customarily issued, a
certificate of good standing certified by the appropriate governmental
officer in the jurisdiction of such Subsidiary's organization and (iii)
for each NZ Subsidiary a certificate signed by a director of the NZ
Subsidiary confirming the passage of resolutions of the Board of
Directors of the NZ Subsidiary covering the matters referred to in
Section 6.2(e)(i) in relation to the NZ Subsidiary, providing
confirmations regarding, among other things, directors' self-interested
transactions, major transactions, corporate benefit, solvency and
financial assistance, and confirming that all the shareholders of the
NZ Subsidiary have resolved to ratify the entry into, and performance
of, the Loan Documents to which that NZ Subsidiary is a party, by the
NZ Subsidiary;
(f) the Administrative Agent shall have received for each
Lender (i) this Agreement duly executed by the Borrowers, each Domestic
Subsidiary and the Lenders, (ii) the Australian Amendatory Documents,
the Subscription Agreement, the First Deed of Guarantee and Indemnity,
the Second Deed of Guarantee and Indemnity, the First Australian
Memorandum of Deposit and the Second Australian Memorandum of Deposit,
each duly executed by each party thereto and (iii) copies, certified as
true, correct and complete by the secretary or assistant secretary of
the U.S. Borrower, of the other Australian Loan Documents;
(g) all conditions precedent under the Australian
Amendatory Documents and the Subscription Agreement shall have been
satisfied to the satisfaction of the Administrative Agent and the
Australian Agent;
(h) the Administrative Agent shall have received for each
applicable Lender such Lender's duly executed Notes of the U.S.
Borrower dated the date hereof and otherwise in compliance with the
provisions of Section 1.10 hereof;
(i) the Administrative Agent shall have received the
Mortgages identified in clause (x) of such defined term, the U.S.
Security Agreement and the U.S. Memorandum of Deposit duly executed by
the applicable Borrowers and their Subsidiaries, together with (i)
original stock certificates or other similar instruments or securities
representing
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(x) all of the issued and outstanding shares of capital stock or other
equity interests in each Domestic Subsidiary (ii) stock powers for the
Collateral consisting of the stock or other equity interest in each
Domestic Subsidiary executed in blank and undated, (iii) UCC financing
statements to be filed against each U.S. Borrower and each Domestic
Subsidiary, as debtor, in favor of the Administrative Agent, as secured
party and (iv) patent, trademark, and copyright collateral assignments
to the extent requested by the Administrative Agent;
(j) the Administrative Agent shall have received a report
of an independent firm of environmental engineers acceptable to the
Administrative Agent concerning the environmental hazards and matters
with respect to the parcels of real property subject to the Lien of the
Mortgages identified in clause (x) of such defined term, together with
a reliance letter thereon acceptable to the Administrative Agent;
(k) the Administrative Agent having received for itself
and the Australian Trustee, three copies of the constitution of Penford
Holdings, certified by an authorized officer of the U.S. Borrower;
(l) the Administrative Agent shall have received evidence
of insurance required to be maintained under the Loan Documents, naming
the Administrative Agent or the Australian Trustee (as applicable) as
mortgagee, loss payee and additional insured;
(m) the Administrative Agent shall have received for each
Lender copies of the certificates of good standing for the U.S.
Borrower and each Subsidiary (other than the Australian Borrowers and
each NZ Subsidiary), dated no earlier than 30 days prior to the date
hereof from the office of the secretary of the state of its
incorporation or organization and of each state in which it is
qualified to do business as a foreign corporation or organization;
(n) the Administrative Agent shall have received for each
Lender a list of the Borrowers' Authorized Representatives;
(o) the Administrative Agent shall have received for
itself and for the Lenders the initial fees owed to them;
(p) each Lender shall have received such evaluations and
certifications as it may reasonably require (including a compliance
certificate in the forms attached hereto as Exhibit E containing
calculations of the compliance calculations of the financial covenants
as of the date of this Agreement) in order to satisfy itself as to the
value of the Collateral, the financial condition of the Borrowers and
their Subsidiaries, and the lack of material contingent liabilities of
the Borrowers and their Subsidiaries;
(q) the Administrative Agent shall have received
financing statement, tax, and judgment lien search results against the
Property of the U.S. Borrowers and each Domestic Subsidiary evidencing
the absence of Liens on its Property except as permitted by Section 7.8
hereof;
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(r) the Administrative Agent shall have received pay-off
and lien release letters from secured creditors of the Borrowers and
each Subsidiary setting forth, among other things, the total amount of
indebtedness outstanding and owing to them (or outstanding letters of
credit issued for the account of the Borrowers or any Subsidiary) and
containing an undertaking to cause to be delivered to the
Administrative Agent UCC termination statements and any other lien
release instruments necessary to release their Liens on the assets of
the Borrowers and each Subsidiary, which pay-off and lien release
letters shall be in form and substance acceptable to the Administrative
Agent;
(s) the Administrative Agent shall have received for the
account of the Lenders such other agreements, instruments, resolutions,
documents (including documents relating to tax and regulatory maters),
certificates, information and opinions as the Administrative Agent, the
Australian Agent or the Australian Trustee may reasonably request;
(t) the Administrative Agent shall have received evidence
satisfactory thereto that, as of May 31, 2003, (x) the Borrowers' pro
forma EBITDA for the four fiscal quarters then ended is not less than
$30,000,000 and (y) the Total Funded Debt Ratio is not greater than
2.75 to 1.0;
(u) the Administrative Agent shall have (i) received the
three year projections of the Borrowers in form and substance
satisfactory to the Lenders and (ii) conducted a satisfactory review of
the August 31, 2002 audited financial statements and commentary of the
Borrowers;
(v) the Borrowers shall have paid the Administrative
Agent all fees and expenses of United States, Australia and New Zealand
counsel to the Administrative Agent for which an invoice has been
submitted to the Borrowers; and
(w) the Administrative Agent shall have received for each
Lender a duly executed Intercreditor Agreement.
Section 6.3. Post-Closing Items. (a) Within 90 days from the date
hereof, the following additional conditions must also be satisfied:
(i) the U.S. Borrower shall have delivered to the
Administrative Agent landlord waiver agreements and warehouse
agreements from each landlord of leased premises and each warehouse in
which any Collateral is kept, all of which are to be satisfactory in
form and substance to the Administrative Agent;
(ii) the U.S. Borrower shall use its best efforts to
obtain from the landlord of the Premises located in Englewood, Colorado
the consent thereof to the grant of a mortgage lien in favor of the
Administrative Agent with respect to such Premises, and upon obtaining
such consent, the U.S. Borrower or Penford Products Co., as applicable,
shall grant and deliver a leasehold mortgage in favor of the
Administrative Agent in form and substance acceptable thereto;
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(iii) the Administrative Agent shall have received a
mortgagee's title insurance policy (or a prepaid binding commitment
therefor) in form and substance acceptable to the Administrative Agent
from a title insurance company acceptable to the Administrative Agent
in the aggregate amount of $50,000,000 insuring the Lien of the
Mortgages identified in clause (x) of such defined term to be valid
first priority Liens subject to no defects or objections which are
unacceptable to the Administrative Agent, together with such
endorsements as the Administrative Agent may require;
(iv) the Administrative Agent shall have received a survey
in form and substance acceptable to the Administrative Agent prepared
by a licensed surveyor on each parcel of real property subject to the
Lien of the Mortgages identified in clause (x) of such defined term,
which survey shall also state whether or not any portion of the real
property is in a federally designated flood hazard area;
(v) each Australian Borrower shall have provided evidence
of insurance required to be maintained by it or its Subsidiaries under
the Australian Loan Documents, with evidence that the interest of the
Australian Trustee is endorsed on the policy or, where required by the
Australian Trustee under and in accordance with the Australian Loan
Documents, in the name of the Australian Trustee and the relevant
Australian Borrower or Subsidiary; and
(vi) deposit account, securities account, and commodity
account control agreements to the extent requested by the
Administrative Agent.
(b) Failure to satisfy any of such conditions of this Section 6.3
by the deadline applicable thereto shall constitute an Event of Default
hereunder.
SECTION 7. COVENANTS.
The Borrowers agree that, so long as any credit is available to or in
use by the Borrowers hereunder or under the Australian Credit Agreements, except
to the extent compliance in any case or cases is waived in writing pursuant to
the terms of Section 12.13 hereof:
Section 7.1. Maintenance of Business. The Borrowers shall, and shall
cause each Subsidiary to, preserve and maintain its existence and registration
in the place of its registration at the date of this Agreement, except as
otherwise provided in Section 7.10(c) hereof. The Borrowers shall, and shall
cause each Subsidiary to, preserve and keep in force and effect all licenses,
permits, consents, authorizations, exemptions, except as otherwise provided in
Section 7.10(c) hereof. The Borrowers shall, and shall cause each Subsidiary to,
preserve and keep in force and effect all licenses, permits, franchises,
approvals, patents, trademarks, trade names, trade styles, copyrights, and other
proprietary rights necessary to the proper conduct of its business where the
failure to do so could reasonably be expected to have a Material Adverse Effect.
Section 7.2. Maintenance of Properties. The Borrowers shall, and shall
cause each Subsidiary to, maintain, preserve, and keep its property, plant, and
equipment in good repair,
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working order and condition (ordinary wear and tear excepted), and shall from
time to time make all needful and proper repairs, renewals, replacements,
additions, and betterments thereto so that at all times the efficiency thereof
shall be fully preserved and maintained, except to the extent that, in the
reasonable business judgment of such Person, any such Property is no longer
necessary for the proper conduct of the business of such Person.
Section 7.3. Taxes and Assessments. The Borrowers shall duly pay and
discharge, and shall cause each Subsidiary to duly pay and discharge, all taxes,
rates, assessments, fees, and governmental charges upon or against it or its
Property, in each case before the same become delinquent and before penalties
accrue thereon, unless and to the extent that the same are being contested in
good faith and by appropriate proceedings which prevent enforcement of the
matter under contest and adequate reserves are provided therefor.
Section 7.4. Insurance. The Borrowers shall insure and keep insured,
and shall cause each Subsidiary to insure and keep insured, with reputable, good
and responsible insurance companies, all insurable Property owned by it which is
of a character usually insured by Persons similarly situated and operating like
Properties against loss or damage from such hazards and risks, and in such
amounts, as are insured by Persons similarly situated and operating like
Properties; and the Borrowers shall insure, and shall cause each Subsidiary to
insure, such other hazards and risks (including, without limitation, employers'
and public liability risks) with reputable, good and responsible insurance
companies as and to the extent usually insured by Persons similarly situated and
conducting similar businesses. The Borrowers shall in any event maintain, and
cause each Subsidiary to maintain, insurance on the Collateral to the extent
required by the Collateral Documents. The Borrowers shall, upon the request of
the Administrative Agent, furnish to the Administrative Agent, the Australian
Agent, the Australian Trustee and the Lenders a certificate setting forth in
summary form the nature and extent of the insurance maintained pursuant to this
Section or any other Loan Document.
Section 7.5. Financial Reports. The Borrowers shall, and shall cause
each Subsidiary to, maintain a standard system of accounting in accordance with
GAAP and shall furnish to the Administrative Agent, each Lender, the Australian
Trustee, and each of their duly authorized representatives such information
respecting the business and financial condition of the Borrowers and each
Subsidiary as the Administrative Agent, such Lender or the Australian Trustee
may reasonably request; and without any request, shall furnish to the
Administrative Agent, the Australian Trustee, and the Lenders:
(a) as soon as available, and in any event within
forty-five (45) days after the close of each of the first three (3)
fiscal quarters of each fiscal year of the Borrowers, a copy of the
consolidated and consolidating balance sheet of the Borrowers and their
Subsidiaries as of the last day of such fiscal quarter and the
consolidated and consolidating statements of income, retained earnings,
and cash flows of the Borrowers and their Subsidiaries for the fiscal
quarter and for the fiscal year to date period then ended, each in
reasonable detail showing in comparative form the figures for the
corresponding date and period in the previous fiscal year, prepared by
the Borrowers in accordance with GAAP (subject to the absence of
footnote disclosures and year end audit
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adjustments) and certified to by its chief financial officer or another
officer of the Borrowers acceptable to the Administrative Agent;
(b) as soon as available, and in any event within ninety
(90) days after the close of each fiscal year of the Borrowers, a copy
of the consolidated and consolidating balance sheet of the Borrowers
and their Subsidiaries as of the last day of the fiscal year then ended
and the consolidated and consolidating statements of income, retained
earnings, and cash flows of the Borrowers and their Subsidiaries for
the fiscal year then ended, and accompanying notes thereto, each in
reasonable detail showing in comparative form the figures for the
previous fiscal year, accompanied in the case of the consolidated
financial statements by an unqualified opinion of Ernst & Young, LLP or
another firm of independent public accountants of recognized national
or international standing, selected by the Borrowers and reasonably
satisfactory to the Administrative Agent and the Required Lenders, to
the effect that the consolidated financial statements have been
prepared in accordance with GAAP and present fairly in accordance with
GAAP the consolidated financial condition of the Borrowers and their
Subsidiaries as of the close of such fiscal year and the results of
their operations and cash flows for the fiscal year then ended and that
an examination of such accounts in connection with such financial
statements has been made in accordance with generally accepted auditing
standards and, accordingly, such examination included such tests of the
accounting records and such other auditing procedures as were
considered necessary in the circumstances;
(c) within the period provided in subsection (b) above,
the written statement of the accountants who certified the audit report
thereby required that in the course of their audit they have obtained
no knowledge of any Default or Event of Default, or, if such
accountants have obtained knowledge of any such Default or Event of
Default, they shall disclose in such statement the nature and period of
the existence thereof;
(d) promptly after receipt thereof, any additional
written reports, management letters or other detailed information
contained in writing concerning significant aspects of the Borrowers'
or any Subsidiary's operations and financial affairs given to it by its
independent public accountants;
(e) promptly after the sending or filing thereof, copies
of each financial statement, report, notice or proxy statement sent by
the Borrowers or any Subsidiary to their stockholders or other equity
holders, and copies of each annual return, regular, periodic or special
report, registration statement, investment statement or prospectus
(including all Form 10-K, Form 10-Q and Form 8-K reports) or equivalent
documents filed by the Borrowers or any Subsidiary with any securities
exchange, the Securities and Exchange Commission or any successor
agency;
(f) promptly after receipt thereof, a copy of each audit
made by any regulatory agency of the books and records of any Borrower
or any Subsidiary or of notice of any material noncompliance with any
applicable law, regulation or guideline relating to any Borrowers or
any Subsidiary, or its business;
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(g) as soon as available, and in any event within
forty-five (45) days after the end of each fiscal year of the
Borrowers, a copy of the Borrowers' consolidated and consolidating
operating budget for the following fiscal year, such operating budget
to show the Borrowers' projected consolidated and consolidating
revenues, expenses and balance sheet on a quarter-by-quarter basis,
such operating budget to be in reasonable detail prepared by the
Borrowers and in form satisfactory to the Administrative Agent and the
Required Lenders (which shall include a summary of all assumptions made
in preparing such operating budget);
(h) notice of any Scheme of Arrangement affecting any
Borrower or Subsidiary or any Changes in Control;
(i) promptly after knowledge thereof shall have come to
the attention of any responsible officer of the Borrowers, written
notice of (i) any threatened or pending litigation or governmental or
arbitration proceeding or labor controversy against the Borrowers or
any Subsidiary which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect, (ii) the occurrence of any
Default or Event of Default hereunder and (iii) the occurrence of any
event described as an "Event of Default" under any other Loan Document;
and
(j) with each of the financial statements furnished to
the Lenders pursuant to subsections (a) and (b) above, a written
certificate in the form attached hereto as Exhibit E signed by the
chief financial officer of the Borrowers or another officer of the
Borrowers acceptable to the Administrative Agent to the effect that to
the best of such officer's knowledge and belief no Default or Event of
Default has occurred during the period covered by such statements or,
if any such Default or Event of Default has occurred during such
period, setting forth a description of such Default or Event of Default
and specifying the action, if any, taken by the Borrowers or any
Subsidiary to remedy the same, such certificate to also set forth the
calculations supporting such statements in respect of Section 7.22.
Section 7.6. Inspection. Each Borrower shall, and shall cause each
Subsidiary to, permit the Administrative Agent, each Lender, the Australian
Trustee and each of their duly authorized representatives and agents to visit
and inspect any of its Property, corporate books, and financial records, to
examine and make copies of its books of accounts and other financial records,
and to discuss its affairs, finances, and accounts with, and to be advised as to
the same by, its officers, employees and independent public accountants (and by
this provision the Borrowers hereby authorizes such accountants to discuss with
the Administrative Agent, such Lenders and the Australian Trustee the finances
and affairs of the Borrowers and their Subsidiaries) at such reasonable times
and intervals as the Administrative Agent, any such Lender or the Australian
Trustee may designate and, so long as no Event of Default exists, with
reasonable prior notice to the Borrowers and except as provided in Section
2.1(d) hereof and the Australian Loan Documents, at no cost to the Borrowers.
Section 7.7. Borrowings and Guaranties. Each Borrower shall not, nor
shall it permit any Subsidiary to, issue, incur, assume, create or have
outstanding any Indebtedness for
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Borrowed Money, or be or become liable as endorser, guarantor, surety or
otherwise for any debt, obligation or undertaking of any other Person, or
otherwise agree to provide funds for payment of the obligations of another, or
supply funds thereto or invest therein or otherwise assure a creditor of another
against loss, or apply for or become liable to the issuer of a letter of credit
which supports an obligation of another, or subordinate any claim or demand it
may have to the claim or demand of any other Person; provided, however, that the
foregoing shall not restrict nor operate to prevent:
(a) the Obligations, Hedging Liability, and Funds
Transfer and Deposit Account Liability of the Borrowers and their
Subsidiaries owing to the Administrative Agent, the Australian Agent,
the Australian Trustee and the Lenders (and their Affiliates);
(b) purchase money indebtedness and Capitalized Lease
Obligations of the Borrowers and their Subsidiaries in an amount not to
exceed $5,000,000 (or the Australian Dollar Equivalent or NZ Dollar
Equivalent) in the aggregate at any one time outstanding;
(c) obligations of the Borrowers arising out of interest
rate and foreign currency hedging agreements entered into with
financial institutions in the ordinary course of business;
(d) endorsement of items for deposit or collection of
commercial paper received in the ordinary course of business;
(e) indebtedness from time to time owing by any
Subsidiary to any Borrower (the "Intercompany Indebtedness"); and
(f) unsecured indebtedness of the Borrowers and their
Subsidiaries not otherwise permitted by this Section in an amount not
to exceed $10,000,000 (or the Australian Dollar Equivalent or NZ Dollar
Equivalent) in the aggregate at any one time outstanding.
Section 7.8. Liens. No Borrower shall, nor shall it permit any
Subsidiary to, create, incur or permit to exist any Lien of any kind on any
Property owned by any such Person; provided, however, that the foregoing shall
not apply to nor operate to prevent:
(a) Liens arising by statute in connection with worker's
compensation, unemployment insurance, old age benefits, social security
obligations, taxes, assessments, statutory obligations or other similar
charges (other than Liens arising under ERISA), good faith cash
deposits in connection with tenders, contracts or leases to which the
Borrowers or any Subsidiary are a party or other cash deposits required
to be made in the ordinary course of business, provided in each case
that the obligation is not for borrowed money and that the obligation
secured is not overdue or, if overdue, is being contested in good faith
by appropriate proceedings which prevent enforcement of the matter
under contest and adequate reserves have been established therefor;
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(b) mechanics', workmen's, materialmen's, landlords',
carriers' or other similar Liens arising in the ordinary course of
business with respect to obligations which are not due or which are
being contested in good faith by appropriate proceedings which prevent
enforcement of the matter under contest;
(c) judgment liens and judicial attachment liens not
constituting an Event of Default under Section 8.1(g) hereof and the
pledge of assets for the purpose of securing an appeal, stay or
discharge in the course of any legal proceeding, provided that the
aggregate amount of such judgment liens and attachments and liabilities
of the Borrowers and their Subsidiaries secured by a pledge of assets
permitted under this subsection, including interest and penalties
thereon, if any, shall not be in excess of $2,000,000 (or the
Australian Dollar Equivalent or NZ Dollar Equivalent) at any one time
outstanding;
(d) Liens on property of the Borrowers or any Subsidiary
created solely for the purpose of securing indebtedness permitted by
Section 7.7(b) hereof, representing or incurred to finance the purchase
price of Property, provided that no such Lien shall extend to or cover
other Property of the Borrowers or such Subsidiary other than the
respective Property so acquired, and the principal amount of
indebtedness secured by any such Lien shall at no time exceed the
purchase price of such Property, as reduced by repayments of principal
thereon;
(e) any interest or title of a lessor under any operating
lease;
(f) easements, rights-of-way, restrictions, and other
similar encumbrances against real property incurred in the ordinary
course of business which, in the aggregate, are not substantial in
amount and which do not materially detract from the value of the
Property subject thereto or materially interfere with the ordinary
conduct of the business of the Borrowers or any Subsidiary; and
(g) the Liens granted in favor of the Administrative
Agent and the Australian Trustee pursuant to the Collateral Documents.
Section 7.9. Investments, Acquisitions, Loans and Advances. No Borrower
shall, nor shall it permit any Subsidiary to, directly or indirectly, make,
retain or have outstanding any investments (whether through purchase of stock or
obligations or otherwise) in, or loans or advances to, any other Person, or
acquire all or any substantial part of the assets or business of any other
Person or division thereof; provided, however, that the foregoing shall not
apply to nor operate to prevent:
(a) investments in direct obligations of the United
States of America or of any agency or instrumentality thereof whose
obligations constitute full faith and credit obligations of the United
States of America, provided that any such obligations shall mature
within one year of the date of issuance thereof;
(b) investments in commercial paper rated at least P-1 by
Moody's and at least A-1 by S&P maturing within one year of the date of
issuance thereof;
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(c) investments in certificates of deposit issued by any
Lender or by any United States commercial bank having capital and
surplus of not less than $100,000,000 which have a maturity of one year
or less;
(d) investments in repurchase obligations with a term of
not more than seven (7) days for underlying securities of the types
described in subsection (a) above entered into with any bank meeting
the qualifications specified in subsection (c) above, provided all such
agreements require physical delivery of the securities securing such
repurchase agreement, except those delivered through the Federal
Reserve Book Entry System;
(e) investments in money market funds that invest solely,
and which are restricted by their respective charters to invest solely,
in investments of the type described in the immediately preceding
subsections (a), (b), (c), and (d) above;
(f) each Borrower's investments from time to time in its
Subsidiaries, and investment made from time to time by a Subsidiary in
one or more of its Subsidiaries;
(g) intercompany advances made (in compliance with
Section 208 of the Corporations Act, where applicable) from time to
time from any Borrower to the other Borrower or to any one or more of
its Subsidiaries in the ordinary course of business to finance working
capital needs;
(h) Permitted Acquisitions;
(i) investments identified on Schedule 7.9 hereof; and
(j) other investments, loans, and advances in addition to
those otherwise permitted by this Section in an amount not to exceed
$10,000,000 (or the Australian Dollar Equivalent or NZ Dollar
Equivalent) in the aggregate at any one time outstanding.
In determining the amount of investments, acquisitions, loans, and advances
permitted under this Section, investments and acquisitions shall always be taken
at the original cost thereof (regardless of any subsequent appreciation or
depreciation therein), and loans and advances shall be taken at the principal
amount thereof then remaining unpaid.
Section 7.10. Mergers, Consolidations and Sales. No Borrower shall, nor
shall it permit any Subsidiary to, be a party to any merger, demerger,
consolidation, amalgamation, corporate reconstruction or Scheme of Arrangement,
or sell, transfer, lease or otherwise dispose of all or any part of its
Property, including any disposition of Property as part of a sale and leaseback
transaction, or in any event sell or discount (with or without recourse) any of
its notes or accounts receivable; provided, however, that so long as no Default
or Event of Default exists this Section shall not apply to nor operate to
prevent:
(a) the sale or lease of inventory in the ordinary course
of business, including without limitation, the sale of products to
National Starch & Chemical Pty. Ltd pursuant to any Material Australian
Document;
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(b) the sale, transfer, lease or other disposition of
Property of the Borrowers and their Subsidiaries to one another in the
ordinary course of its business;
(c) the merger of any Subsidiary with and into any
Borrower or any other Subsidiary, provided that, in the case of any
merger involving any Borrower, such Borrower is the corporation
surviving the merger;
(d) the sale of delinquent notes or accounts receivable
in the ordinary course of business for purposes of collection only (and
not for the purpose of any bulk sale or securitization transaction);
(e) the sale, transfer or other disposition of any
tangible personal property that, in the reasonable business judgment of
the Borrowers or their Subsidiary, has become obsolete or worn out, and
which is disposed of in the ordinary course of business; and
(f) the sale, transfer, lease or other disposition of
Property of the Borrowers or any Subsidiary (including any disposition
of Property as part of a sale and leaseback transaction) aggregating
for the Borrowers and their Subsidiaries in an amount not to exceed
$5,000,000 (or the Australian Dollar Equivalent or NZ Dollar
Equivalent) during any fiscal year of the Borrowers.
Section 7.11. Maintenance of Subsidiaries. No Borrower shall assign,
sell or transfer, nor shall it permit any Subsidiary to issue, assign, sell or
transfer, any shares of capital stock or other equity interests of a Subsidiary;
and, for the avoidance of doubt, Penford Holdings shall not issue shares of
capital stock or other equity interests; provided, however, that the foregoing
shall not operate to prevent (a) Liens on the capital stock or other equity
interests of Subsidiaries granted to the Administrative Agent or the Australian
Trustee pursuant to the Collateral Documents, (b) the issuance, sale, and
transfer to any person of any shares of capital stock of a Subsidiary solely for
the purpose of qualifying, and to the extent legally necessary to qualify, such
person as a director of such Subsidiary, and (c) any transaction permitted by
Section 7.10(c) above.
Section 7.12. Dividends and Certain Other Restricted Payments. No
Borrower shall, nor shall it permit any Subsidiary to, (a) declare or pay any
dividends on or make any other distributions in respect of any class or series
of its capital stock or other equity interests or (b) directly or indirectly
purchase, redeem, or otherwise acquire or retire any of its capital stock or
other equity interests or any warrants, options, or similar instruments to
acquire the same (collectively, "Restricted Payments"); provided, however, that
the foregoing shall not operate to prevent (i) the making of any Restricted
Payments by the U.S. Borrower so long as no Default or Event of Default shall
exist both before and after giving effect thereto and the aggregate amount
thereof does not exceed $8,000,000 in any fiscal year of the Borrower, and (ii)
the making of dividends or distributions by any Wholly-owned Subsidiary of any
Borrower to its parent corporation.
Section 7.13. ERISA. The U.S. Borrower shall, and shall cause each
Domestic Subsidiary to, promptly pay and discharge all obligations and
liabilities arising under ERISA of a character
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which if unpaid or unperformed could reasonably be expected to result in the
imposition of a Lien against any of its Property. The U.S. Borrower shall, and
shall cause each Domestic Subsidiary to, promptly notify the Administrative
Agent and each Lender of: (a) the occurrence of any reportable event (as defined
in ERISA) with respect to a Plan, (b) receipt of any notice from the PBGC of its
intention to seek termination of any Plan or appointment of a trustee therefor,
(c) its intention to terminate or withdraw from any Plan, and (d) the occurrence
of any event with respect to any Plan which would result in the incurrence by
the U.S. Borrower or any Domestic Subsidiary of any material liability, fine or
penalty, or any material increase in the contingent liability of the U.S.
Borrower or any Domestic Subsidiary with respect to any post-retirement Welfare
Plan benefit.
Section 7.14. Compliance with Laws. (a) Each Borrower shall, and shall
cause each Subsidiary to, comply in all respects with the requirements of all
federal, state, and local laws, rules, regulations, ordinances and orders
applicable to or pertaining to it, its Property or its business operations,
where any such non-compliance, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect or result in a Lien
upon any of its Property.
(b) Without limiting the agreements set forth in Section 7.14(a)
above, the Borrowers shall, and shall cause each Subsidiary to, at all times, do
the following to the extent the failure to do so, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect: (i)
comply in all material respects with, and maintain each of the Premises in
compliance in all material respects with, all applicable Environmental Laws;
(ii) require that each tenant and subtenant, if any, of any of the Premises or
any part thereof comply in all material respects with all applicable
Environmental Laws; (iii) obtain and maintain in full force and effect all
material governmental approvals required by any applicable Environmental Law for
operations at each of the Premises; (iv) cure any material violation by it or at
any of the Premises of applicable Environmental Laws; (v) not allow the presence
or operation at any of the Premises of any (1) landfill or dump or (2) hazardous
waste management facility or solid waste disposal facility as defined pursuant
to RCRA or any comparable state law or law of any other jurisdiction; (vi) not
manufacture, use, generate, transport, treat, store, release, dispose or handle
any Hazardous Material at any of the Premises except in the ordinary course of
its business and in compliance with applicable Environmental Law; (vii) within
10 Business Days notify the Administrative Agent in writing of and provide any
reasonably requested documents upon learning of any of the following in
connection with the Borrowers or any Subsidiary or any of the Premises: (1) any
material liability for response or corrective action, natural resource damage or
other harm pursuant to CERCLA, RCRA or any comparable state law or law of any
other jurisdiction; (2) any material Environmental Claim; (3) any material
violation of an Environmental Law or material Release, threatened Release or
disposal of a Hazardous Material; (4) any restriction on the ownership,
occupancy, use or transferability arising pursuant to any (x) Release,
threatened Release or disposal of a Hazardous Material or (y) Environmental Law;
or (5) any environmental, natural resource, health or safety condition, which
could reasonably be expected to have a Material Adverse Effect; (viii) conduct
at its expense any investigation, study, sampling, testing, abatement, cleanup,
removal, remediation or other response action necessary to remove, remediate,
clean up or abate any material Release, threatened Release or disposal of a
Hazardous Material as required by any applicable Environmental Law; (ix) abide
by and observe
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any restrictions on the use of the Premises imposed by any governmental
authority as set forth in a deed or other instrument affecting the Borrowers' or
any Subsidiary's interest therein; (x) promptly provide or otherwise make
available to the Administrative Agent any reasonably requested environmental
record concerning the Premises which the Borrowers or any Subsidiary possesses
or can reasonably obtain; and (xi) perform, satisfy, and implement any operation
or maintenance actions required by any governmental authority or Environmental
Law, or included in any no further action letter or covenant not to sue issued
by any governmental authority under any Environmental Law.
Section 7.15. Burdensome Contracts With Affiliates. No Borrower shall,
nor shall it permit any Subsidiary to, enter into any contract, agreement or
business arrangement with any of its Affiliates (other than with Wholly-owned
Subsidiaries) on terms and conditions which are less favorable to such Borrower
or such Subsidiary than would be usual and customary in similar contracts,
agreements or business arrangements between Persons not affiliated with each
other.
Section 7.16. No Changes in Fiscal Year. The fiscal year of the
Borrowers and their Subsidiaries ends on August 31 of each year; and the
Borrowers shall not, nor shall they permit any Subsidiary to, change its fiscal
year from its present basis.
Section 7.17. Subsidiaries. (a) Formation. Promptly upon the formation
or acquisition of any Subsidiary, the Borrowers shall provide the Administrative
Agent and the Lenders notice thereof and timely comply with the requirements of
Section 3 hereof (at which time Schedule 5.2 shall be deemed amended to include
reference to such Subsidiary).
(b) Inactive Subsidiary. The U.S. Borrower shall not permit
Penford Export Corporation to engage in any operations, conduct any business or
own any assets having an aggregate value in excess of $50,000.
Section 7.18. Change in the Nature of Business. No Borrower shall, nor
shall it permit any Subsidiary to, engage in any business or activity if as a
result the general nature of the business of such Borrower or any Subsidiary
would be changed in any material respect from the general nature of the business
engaged in by it as of the Closing Date.
Section 7.19. Use of Loan Proceeds. The Borrowers shall use the credit
extended under this Agreement and the Australian Credit Agreements solely for
the purposes set forth in, or otherwise permitted by, Section 5.4 hereof.
Section 7.20. No Restrictions. Except as provided herein, no Borrower
shall, nor shall it permit any Subsidiary to, directly or indirectly create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of the Borrowers or any
Subsidiary to: (a) pay dividends or make any other distribution on any
Subsidiary's capital stock or other equity interests owned by any Borrower or
any other Subsidiary, (b) pay any indebtedness owed to any Borrower or any other
Subsidiary, (c) make loans or advances to any Borrower or any other Subsidiary,
(d) transfer any of its Property to any Borrower or any other Subsidiary or (e)
guarantee the Obligations and/or grant Liens on its assets to the Administrative
Agent or the Australian Trustee as required by the Loan Documents.
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Section 7.21. Subordinated Debt. No Borrower shall, nor shall it permit
any Subsidiary to, amend or modify any of the terms or conditions relating to
any Subordinated Debt, or make any voluntary prepayment thereof, or effect any
voluntary redemption thereof, or make any payment on account of Subordinated
Debt which is prohibited under the terms of any instrument or agreement
subordinating the same to the Obligations.
Section 7.22. Financial Covenants. (a) Total Funded Debt Ratio. The
Borrowers shall not, as of the last day of each fiscal quarter of the Borrowers
ending during the periods specified below, permit the ratio of (a) Total Funded
Debt to (b) EBITDA for the four calendar fiscal quarters of the Borrowers then
ended (the "Total Funded Debt Ratio") to be more than:
TOTAL FUNDED DEBT RATIO
FROM AND INCLUDING TO AND INCLUDING SHALL NOT BE MORE THAN:
the date hereof May 31, 2004 3.25 TO 1.0
August 31, 2004 May 31, 2005 3.00 TO 1.0
August 31, 2005 At all times thereafter 2.75 TO 1.0
(b) Fixed Charge Coverage Ratio. As of the last day of each fiscal
quarter of the Borrowers, the Borrowers shall maintain a ratio of (a) EBITDA for
the four fiscal quarters of the Borrowers then ended to (b) Fixed Charges for
the same four fiscal quarters then ended of not less than 1.5 to 1.0.
(c) Leverage Ratio. The Borrowers shall not, as of the last day of
any fiscal quarter of the Borrowers, permit the ratio of (a) Total Funded Debt
at such time to (b) the sum of Total Funded Debt and Net Worth at such time to
be more than 0.60 to 1.0.
(d) Capital Expenditures. The Borrowers shall not, nor shall they
permit any of their Subsidiaries to, incur Capital Expenditures (but excluding
Capital Expenditures made with the Net Cash Proceeds of any Event of Loss as
permitted by Section 2.2(b)(i) hereof and Capital Expenditures made with the
proceeds of grants from governmental entities) in an amount in excess of
$20,000,000 (or the Australian Dollar Equivalent or NZ Dollar Equivalent) in the
aggregate during any fiscal year; provided, however, for any fiscal year when
Total Senior Funded Debt/EBITDA Ratio is less than 2.0 to 1.0 for each fiscal
quarter of such fiscal year, Capital Expenditures for such year shall not exceed
$25,000,000 (or the Australian Dollar Equivalent or NZ Dollar Equivalent) for
such fiscal year.
Section 7.23. Accounting Records. Each Borrower shall keep proper
accounting records and ensure that each of its Subsidiaries does the same.
Section 7.24. Conduct of Business. Each Borrower shall conduct its
business (including collecting debts owed to it) in a proper, orderly and
efficient manner and ensure that each of its Subsidiaries does the same.
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Section 7.25. No Default Certificate. Each Borrower shall on request
from the Administrative Agent, give the Administrative Agent a certificate
signed by two of its directors which states whether a Default or Event of
Default continues unremedied.
Section 7.26. Certain Authorization. Each Borrower shall and shall
ensure that its Subsidiaries shall obtain, renew on time and comply with the
terms of each authorization necessary for it to enter into the Loan Documents to
which it is a party, to comply with its obligations and exercise its rights
under them and to allow them to be enforced.
Section 7.27. Notice of Incorrect Representation. Each Borrower shall
notify the Administrative Agent if any representation or warranty made, or taken
to be made, by it or on its behalf in connection with a Loan Document is found
to have been incorrect or misleading when made or taken to be made.
Section 7.28. No Default. The Australian Borrower shall and shall cause
each of its Subsidiaries to do everything necessary to ensure that no Default or
Event of Default with respect to it occurs.
Section 7.29. Material Australian Documents. The Australian Borrowers
shall (a) comply with the material terms of, and take all reasonable action, and
all action reasonably required by the Australian Trustee, to enforce, the
Material Australian Documents if failure to do so would have a Material Adverse
Effect; (b) notify the Australian Agent, with reasonable details, as soon as
either of them becomes aware of (i) any material notice given or received under
a Material Australian Document, (ii) any material default or dispute under a
Material Australian Document, (iii) any termination (except in accordance with
its terms) or rescission of a Material Australian Document, or (iv) any event or
circumstance which entitles a party to terminate (other than upon its stated
termination date) or rescind a Material Australian Document if the event or
circumstance would have a Material Adverse Effect; and (c) not, without the
prior consent of the Australian Trustee, (i) materially vary, amend or change,
or agree to any material variation, amendment or change in (other than an
assignment or transfer by a sub-lessee to another party of the same or better
reputation and credit standing), any Material Australian Document, (ii)
terminate (except on its stated Termination Date) or rescind any Material
Australian Document, (iii) waive any material requirement of any Material
Australian Document, or (iv) do or permit, or fail to do, any act which would
render any Material Australian Document if doing so would have a Material
Adverse Effect liable to forfeiture or cancellation and the effect would be to
cause a Material Adverse Effect.
Section 7.30. Native Title. The Australian Borrowers shall notify the
Australian Agent, with reasonable details, as soon as either of them becomes
aware of any native title claim being proposed or made, or any native title
interest being asserted or claimed, in respect of any Premises.
Section 7.31. Material Adverse Effect. The Borrowers shall notify the
Administrative Agent, with reasonable details, as soon as any of them becomes
aware of any event or circumstance which has or is likely to have a Material
Adverse Effect.
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Section 7.32. Title Retention. The Australian Borrowers shall not, and
shall ensure that their Subsidiaries do not, without the prior consent of the
Australian Trustee, acquire assets which would otherwise become subject to the
Australian Collateral Documents on title retention terms except in the ordinary
course of its day-to-day trading.
Section 7.33. Deposit. The Australian Borrowers shall not, and shall
ensure that their Subsidiaries do not, deposit money with a person if the money
is not repayable until satisfaction of an obligation owed to the person.
Section 7.34. Constituent Documents. The Australian Borrowers shall
not, and shall ensure that their Subsidiaries do not, change their constituent
documents in any way.
SECTION 8. EVENTS OF DEFAULT AND REMEDIES.
Section 8.1. Events of Default. Any one or more of the following shall
constitute an "Event of Default" hereunder:
(a) (i) default in the payment when due of all or any
part of the principal of any Note or all or any part of the "Secured
Money" under the Debenture Trust Deed or the Syndicated Facility
Agreement as therein defined (whether at the stated maturity thereof or
at any other time provided for in this Agreement or the Australian
Credit Agreements) or of any Reimbursement Obligation or Australian
Reimbursement Obligation (whether at the stated maturity thereof or at
any other time provided for in this Agreement or the Australian Credit
Agreements) or of any Reimbursement Obligation or (ii) default for a
period of three (3) Business Days in the payment of any interest or any
fee or other Obligation payable hereunder or under any other Loan
Document;
(b) default in the observance or performance of any
covenant set forth in Sections 7.1, 7.5, 7.7, 7.8, 7.9, 7.10, 7.11,
7.12, 7.17, 7.18, 7.21 or 7.22 hereof or of any provision in any Loan
Document dealing with the use, disposition or remittance of the
proceeds of Collateral or requiring the maintenance of insurance
thereon;
(c) default in the observance or performance of any other
provision hereof or of any other Loan Document which is not remedied
within thirty (30) days after the earlier of (i) the date on which such
failure shall first become known to any officer of the Borrowers or
(ii) written notice thereof is given to the Borrowers by the
Administrative Agent;
(d) any representation or warranty made herein or in any
other Loan Document or in any certificate furnished to the
Administrative Agent or the Lenders pursuant hereto or thereto or in
connection with any transaction contemplated hereby or thereby proves
untrue or misleading in any material respect as of the date of the
issuance or making or deemed making thereof;
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(e) any event occurs or condition exists (other than
those described in subsections (a) through (d) above) which is
specified as an event of default under any of the other Loan Documents
which have not been cured or waived within any applicable cure period,
or any of the Loan Documents or Material Australian Documents shall for
any reason not be or shall cease to be in full force and effect or is
declared to be, in whole or part, unenforceable, voidable or null and
void, or any of the Collateral Documents shall for any reason fail to
create a valid and perfected first priority Lien in favor of the
Administrative Agent or the Australian Trustee in any Collateral
purported to be covered thereby except as expressly permitted by the
terms thereof, or any Borrower or Subsidiary takes any action for the
purpose of terminating, repudiating or rescinding any Loan Document
executed by it or any of its obligations thereunder;
(f) default shall occur under any Indebtedness for
Borrowed Money (other than the Intercompany Indebtedness) issued,
assumed or guaranteed by any Borrower or any Subsidiary aggregating in
excess of $2,000,000 (or the Australian Dollar Equivalent or NZ Dollar
Equivalent), or under any indenture, agreement or other instrument
under which the same may be issued, and such default shall continue for
a period of time sufficient to permit the acceleration of the maturity
of any such Indebtedness for Borrowed Money (whether or not such
maturity is in fact accelerated), or any such Indebtedness for Borrowed
Money shall not be paid when due (whether by demand, lapse of time,
acceleration or otherwise);
(g) any judgment or judgments, writ or writs or warrant
or warrants of attachment, or any similar process or processes, shall
be entered or filed against any Borrower or any Subsidiary, or against
any of its Property, in an aggregate amount in excess of $2,000,000 (or
the Australian Dollar Equivalent or NZ Dollar Equivalent) (except to
the extent covered by insurance with respect to which the insurer has
not denied liability therefor), and which remains undischarged,
unvacated, unbonded or unstayed for a period of thirty (30) days;
(h) the U.S. Borrower or any Domestic Subsidiary, or any
member of its Controlled Group, shall fail to pay when due an amount or
amounts aggregating in excess of $1,000,000 which it shall have become
liable to pay to the PBGC or to a Plan under Title IV of ERISA; or
notice of intent to terminate a Plan or Plans having aggregate Unfunded
Vested Liabilities in excess of $1,000,000 (collectively, a "Material
Plan") shall be filed under Title IV of ERISA by the U.S. Borrower or
any Domestic Subsidiary, or any other member of its Controlled Group,
any plan administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate or to
cause a trustee to be appointed to administer any Material Plan or a
proceeding shall be instituted by a fiduciary of any Material Plan
against the U.S. Borrower or any Domestic Subsidiary, or any member of
its Controlled Group, to enforce Section 515 or 4219(c)(5) of ERISA and
such proceeding shall not have been dismissed within thirty (30) days
thereafter; or a condition shall exist by reason of which the PBGC
would be entitled to obtain a decree adjudicating that any Material
Plan must be terminated;
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(i) any Change of Control shall occur;
(j) any Borrower or any Subsidiary shall (i) have entered
involuntarily against it an order for relief under the United States
Bankruptcy Code, as amended, or be (or have stated that it is)
insolvent (as defined in the Corporations Act), (ii) not pay, or admit
in writing its inability to pay, or stop or suspend the payment of its
debts generally as they become due, (iii) make an assignment or enter
into an arrangement or composition with or for the benefit of creditors
generally or any class of them, (iv) apply for, seek, consent to or
acquiesce in, the appointment of an administrator, receiver, receiver
and manager, controller (as defined in the Corporations Act),
custodian, trustee, examiner, liquidator, provisional liquidator,
statutory manager or similar official for it or any substantial part of
its Property, (v) institute any proceeding seeking to have entered
against it an order for relief under the United States Bankruptcy Code,
as amended, or any other order under the laws of another jurisdiction
having substantially similar effect, to adjudicate it insolvent, or
seeking dissolution, winding up, liquidation, reorganization,
arrangement, adjustment or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors or fail to file an answer or other pleading denying the
material allegations of any such proceeding filed against it, (vi) take
any action in furtherance of any matter described in parts (i) through
(v) above, or (vii) fail to contest in good faith any appointment or
proceeding described in Section 8.1(k) hereof;
(k) an administrator, custodian, receiver, receiver and
manager, controller (as defined in the Corporations Act, trustee,
examiner, liquidator, provisional liquidator, statutory manager or
similar official shall be appointed for any Borrower or any Subsidiary,
or any substantial part of any of its Property, or a proceeding
described in Section 8.1(j)(v) shall be instituted against any Borrower
or any Subsidiary, and such appointment continues undischarged or such
proceeding continues undismissed or unstayed for a period of sixty (60)
days;
(l) an Australian Borrower or Subsidiary is the subject
of an event described in section 459C(2) or section 585 of the
Corporations Act, or it makes a statement from which the Administrative
Agent reasonably deduces it is so subject;
(m) a step is taken under Part 5A.1 of the Corporations
Act to deregister an Australian Borrower or Subsidiary;
(n) an Australian Borrower which is a party to a Material
Australian Document fails to comply with any material obligation under
it or an event of default by it (however described) after the expiry of
any applicable grace period occurs under it which would have a Material
Adverse Effect;
(o) a circumstance specified in section 461 of the
Corporations Act occurs with respect to an Australian Borrower or
Subsidiary;
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(p) an Australian Borrower or Subsidiary, without the
consent of the Australian Trustee, (i) takes action to reduce its share
capital (other than by redeeming redeemable preference shares) or to
buy back its shares, or (ii) passes a resolution of a type referred to
in section 254N(1) or 260B of the Corporations Act, or a meeting to
consider such a resolution is summoned or convened; or
(q) a circumstance specified in section 461 of the
Corporations Act occurs with respect to an Australian Borrower or
Subsidiary.
Section 8.2. Non-Bankruptcy Defaults. When any Event of Default other
than those described in subsection (j), (k) or (l) of Section 8.1 hereof has
occurred and is continuing, the Administrative Agent shall, by written notice to
the Borrowers: (a) if so directed by the Required Lenders, terminate the
remaining Commitments and all other obligations of the Lenders hereunder on the
date stated in such notice (which may be the date thereof); (b) if so directed
by the Required Lenders, declare the principal of and the accrued interest on
all outstanding Notes to be forthwith due and payable and thereupon all
outstanding Notes, including both principal and interest thereon, shall be and
become immediately due and payable together with all other amounts payable under
the Loan Documents without further demand, presentment, protest or notice of any
kind; and (c) if so directed by the Required Lenders, demand that the Borrowers
immediately pay to the Administrative Agent the full amount then available for
drawing under each or any U.S. Letter of Credit, and the Borrowers agree to
immediately make such payment and acknowledges and agrees that the Lenders would
not have an adequate remedy at law for failure by the Borrowers to honor any
such demand and that the Administrative Agent, for the benefit of the Lenders,
shall have the right to require the Borrowers to specifically perform such
undertaking whether or not any drawings or other demands for payment have been
made under any U.S. Letter of Credit. The Administrative Agent, after giving
notice to the Borrowers pursuant to Section 8.1(c) or this Section 8.2, shall
also promptly send a copy of such notice to the other Lenders and the Australian
Trustee but the failure to do so shall not impair or annul the effect of such
notice.
Section 8.3. Bankruptcy Defaults. When any Event of Default described
in subsections (j), (k) or (l) of Section 8.1 hereof has occurred and is
continuing, then all outstanding Notes shall immediately become due and payable
together with all other amounts payable under the Loan Documents without
presentment, demand, protest or notice of any kind, the obligation of the
Lenders to extend further credit pursuant to any of the terms hereof shall
immediately terminate and the Borrowers shall immediately pay to the
Administrative Agent the full amount then available for drawing under all
outstanding Letters of Credit, the Borrowers acknowledging and agreeing that the
Lenders would not have an adequate remedy at law for failure by the Borrowers to
honor any such demand and that the Lenders, and the Administrative Agent on
their behalf, shall have the right to require the Borrowers to specifically
perform such undertaking whether or not any draws or other demands for payment
have been made under any of the Letters of Credit.
Section 8.4. Collateral for Undrawn Letters of Credit. (a) If the
prepayment of the amount available for drawing under any or all outstanding U.S.
Letters of Credit is required under Section 2.2(b) or under Section 8.2 or 8.3
above, the U.S. Borrower shall forthwith pay the
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amount required to be so prepaid, to be held by the Administrative Agent as
provided in subsection (b) below.
(b) All amounts prepaid pursuant to subsection (a) above shall be
held by the Administrative Agent in one or more separate collateral accounts
(each such account, and the credit balances, properties, and any investments
from time to time held therein, and any substitutions for such account, any
certificate of deposit or other instrument evidencing any of the foregoing and
all proceeds of and earnings on any of the foregoing being collectively called
the "Collateral Account") as security for, and for application by the
Administrative Agent (to the extent available) to, the reimbursement of any
payment under any U.S. Letter of Credit then or thereafter made by the
Administrative Agent, and to the payment of the unpaid balance of any other
Obligations denominated in U.S. Dollars. The Collateral Account shall be held in
the name of and subject to the exclusive dominion and control of the
Administrative Agent for the benefit of the Administrative Agent, the U.S.
Lenders, and the U.S. L/C Issuers. If and when requested by the U.S. Borrower,
the Administrative Agent shall invest funds held in the Collateral Account from
time to time in direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America with a remaining maturity of one year or less, provided that the
Administrative Agent is irrevocably authorized to sell investments held in the
Collateral Account when and as required to make payments out of the Collateral
Account for application to amounts due and owing from the U.S. Borrower to the
U.S. L/C Issuers, the Administrative Agent or the U.S. Lenders; provided,
however, that if (i) the U.S. Borrower shall have made payment of all such
obligations referred to in subsection (a) above, (ii) all relevant preference or
other disgorgement periods relating to the receipt of such payments have passed,
and (iii) no Letters of Credit, Commitments, Loans or other Obligations remain
outstanding hereunder, then the Administrative Agent shall release to the U.S.
Borrower any remaining amounts held in the Collateral Account.
Section 8.5. Notice of Default. The Administrative Agent shall give
notice to the Borrowers under Section 8.1 hereof promptly upon being requested
to do so by any Lender and shall thereupon notify all the Lenders and the
Australian Trustee thereof.
Section 8.6. Expenses. The Borrowers agree to pay to the Administrative
Agent and each Lender, and any other holder of any Note outstanding hereunder,
all costs and expenses reasonably incurred or paid by the Administrative Agent
and such Lender or any such holder, including reasonable attorneys' fees and
court costs, in connection with any Default or Event of Default by the Borrowers
hereunder or in connection with the enforcement of any of the Loan Documents
(including all such costs and expenses incurred in connection with any
proceeding under the United States Bankruptcy Code involving the Borrowers or
any Subsidiary as a debtor thereunder).
SECTION 9. CHANGE IN CIRCUMSTANCES.
Section 9.1. Change of Law. Notwithstanding any other provisions of
this Agreement or any Note, if at any time any change in applicable law or
regulation or in the interpretation thereof makes it unlawful for any U.S.
Lender to make or continue to maintain any Eurodollar Loans in the relevant
currency or to perform its obligations as contemplated hereby, such U.S. Lender
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shall promptly give notice thereof to the U.S. Borrower and such U.S. Lender's
obligations to make or maintain Eurodollar Loans under this Agreement shall be
suspended until it is no longer unlawful for such U.S. Lender to make or
maintain Eurodollar Loans in such currency. The U.S. Borrower shall prepay on
demand the outstanding principal amount of any such affected Eurodollar Loans,
together with all interest accrued thereon and all other amounts then due and
payable to such U.S. Lender under this Agreement; provided, however, subject to
all of the terms and conditions of this Agreement, the U.S. Borrower may then
elect to borrow the principal amount of the affected Eurodollar Loans from such
U.S. Lender by means of Base Rate Loans from such U.S. Lender, which Base Rate
Loans shall not be made ratably by the U.S. Lender but only from such affected
U.S. Lender.
Section 9.2. Unavailability of Deposits or Inability to Ascertain, or
Inadequacy of, LIBOR. If on or prior to the first day of any Interest Period for
any Borrowing of Eurodollar Loans:
(a) the Administrative Agent determines that deposits in
the applicable currency (in the applicable amounts) are not being
offered to it in the interbank eurodollar market for such Interest
Period, or that by reason of circumstances affecting the interbank
eurodollar market adequate and reasonable means do not exist for
ascertaining the applicable LIBOR, or
(b) the Required Lenders advise the Administrative Agent
that (i) LIBOR as determined by the Administrative Agent will not
adequately and fairly reflect the cost to such U.S. Lenders of funding
their Eurodollar Loans for such Interest Period or (ii) that the making
or funding of Eurodollar Loans become impracticable,
then the Administrative Agent shall forthwith give notice thereof to the U.S.
Borrower and the U.S. Lenders, whereupon until the Administrative Agent notifies
the U.S. Borrower that the circumstances giving rise to such suspension no
longer exist, the obligations of the U.S. Lenders to make Eurodollar Loans shall
be suspended.
Section 9.3. Increased Cost and Reduced Return. (a) If, on or after the
date hereof, the adoption of any applicable law, rule or regulation, or any
change therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any U.S. Lender (or
its Lending Office) with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency:
(i) shall subject any U.S. Lender (or its Lending Office)
to any tax, duty or other charge with respect to its Eurodollar Loans,
its Notes, its Letter(s) of Credit, or its participation in any
thereof, any Reimbursement Obligations owed to it or its obligation to
make Eurodollar Loans, issue a U.S. Letter of Credit, or to participate
therein, or shall change the basis of taxation of payments to any U.S.
Lender (or its Lending Office) of the principal of or interest on its
Eurodollar Loans, Letter(s) of Credit, or participations therein or any
other amounts due under this Agreement or any other Loan Document in
respect of its Eurodollar Loans, Letter(s) of Credit, any participation
therein, any
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Reimbursement Obligations owed to it, or its obligation to make
Eurodollar Loans, or issue a U.S. Letter of Credit, or acquire
participations therein (except for changes in the rate of tax on the
overall net income of such U.S. Lender or its Lending Office imposed by
the jurisdiction in which such U.S. Lender's principal executive office
or Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal
Reserve System, but excluding with respect to any Eurodollar Loans any
such requirement included in an applicable Eurodollar Reserve
Percentage) against assets of, deposits with or for the account of, or
credit extended by, any U.S. Lender (or its Lending Office) or shall
impose on any U.S. Lender (or its Lending Office) or on the interbank
market any other condition affecting its Eurodollar Loans, its Notes,
its Letter(s) of Credit, or its participation in any thereof, any
Reimbursement Obligation owed to it, or its obligation to make
Eurodollar Loans, or to issue a U.S. Letter of Credit, or to
participate therein;
and the result of any of the foregoing is to increase the cost to such U.S.
Lender (or its Lending Office) of making or maintaining any Eurodollar Loan,
issuing or maintaining a U.S. Letter of Credit, or participating therein, or to
reduce the amount of any sum received or receivable by such U.S. Lender (or its
Lending Office) under this Agreement or under any other Loan Document with
respect thereto, by an amount deemed by such U.S. Lender to be material, then,
within fifteen (15) days after demand by such U.S. Lender (with a copy to the
Administrative Agent), the U.S. Borrower shall be obligated to pay to such U.S.
Lender such additional amount or amounts as will compensate such U.S. Lender for
such increased cost or reduction.
(b) If, after the date hereof, any U.S. Lender or the
Administrative Agent shall have determined that the adoption of any applicable
law, rule or regulation regarding capital adequacy, or any change therein, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any U.S. Lender (or its Lending Office)
or any corporation controlling such U.S. Lender with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has had the effect of reducing the
rate of return on such U.S. Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such U.S.
Lender or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such U.S. Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such U.S.
Lender to be material, then from time to time, within fifteen (15) days after
demand by such U.S. Lender (with a copy to the Administrative Agent), the U.S.
Borrower shall pay to such U.S. Lender such additional amount or amounts as will
compensate such U.S. Lender for such reduction.
(c) A certificate of a U.S. Lender claiming compensation under
this Section 9.3 and setting forth the additional amount or amounts to be paid
to it hereunder shall be conclusive if reasonably determined. In determining
such amount, such U.S. Lender may use any reasonable averaging and attribution
methods.
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Section 9.4. Lending Offices. Each U.S. Lender may, at its option,
elect to make its Loans hereunder at the branch, office or affiliate specified
on the appropriate signature page hereof (each a "Lending Office") for each type
of Loan available hereunder or at such other of its branches, offices or
affiliates as it may from time to time elect and designate in a written notice
to the U.S. Borrower and the Administrative Agent. To the extent reasonably
possible, a U.S. Lender shall designate an alternative branch or funding office
with respect to its Eurodollar Loans to reduce any liability of the U.S.
Borrower to such U.S. Lender under Section 9.3 hereof or to avoid the
unavailability of Eurodollar Loans under Section 9.2 hereof, so long as such
designation is not otherwise disadvantageous to the U.S. Lender.
Section 9.5. Discretion of U.S. Lender as to Manner of Funding.
Notwithstanding any other provision of this Agreement, each U.S. Lender shall be
entitled to fund and maintain its funding of all or any part of its Loans in any
manner it sees fit, it being understood, however, that for the purposes of this
Agreement all determinations hereunder with respect to Eurodollar Loans shall be
made as if each U.S. Lender had actually funded and maintained each Eurodollar
Loan through the purchase of deposits in the applicable currency in the
interbank eurodollar market having a maturity corresponding to such Loan's
Interest Period, denominated in the relevant currency and bearing an interest
rate equal to LIBOR for such Interest Period.
SECTION 10. THE ADMINISTRATIVE AGENT.
Section 10.1. Appointment and Authorization of Administrative Agent.
Each Lender hereby appoints Harris Trust and Savings Bank as the Administrative
Agent under the Loan Documents and hereby authorizes the Administrative Agent to
take such action as Administrative Agent on its behalf and to exercise such
powers under the Loan Documents as are delegated to the Administrative Agent by
the terms thereof, together with such powers as are reasonably incidental
thereto. Without limiting the foregoing, the Administrative Agent is hereby
authorized to execute and deliver on behalf of the Lenders the Collateral
Documents. The Lenders expressly agree that the Administrative Agent is not
acting as a fiduciary of the Lenders in respect of the Loan Documents, the
Borrowers or otherwise, and nothing herein or in any of the other Loan Documents
shall result in any duties or obligations on the Administrative Agent or any of
the Lenders except as expressly set forth herein.
Section 10.2. Administrative Agent and its Affiliates. The
Administrative Agent shall have the same rights and powers under this Agreement
and the other Loan Documents as any other Lender and may exercise or refrain
from exercising such rights and power as though it were not the Administrative
Agent, and the Administrative Agent and its affiliates may accept deposits from,
lend money to, and generally engage in any kind of business with any Borrower or
any Affiliate of any Borrower as if it were not the Administrative Agent under
the Loan Documents. The term "Lender" as used herein and in all other Loan
Documents, unless the context otherwise clearly requires, includes the
Administrative Agent in its individual capacity as a Lender. References in
Section 1 hereof to the Administrative Agent's Loans, or to the amount owing to
the Administrative Agent for which an interest rate is being determined, refer
to the Administrative Agent in its individual capacity as a Lender.
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Section 10.3. Action by Administrative Agent. If the Administrative
Agent receives from the Borrowers a written notice of an Event of Default
pursuant to Section 7.5 hereof, the Administrative Agent shall promptly give
each of the Lenders and the Australian Trustee written notice thereof. The
obligations of the Administrative Agent under the Loan Documents are only those
expressly set forth therein. Without limiting the generality of the foregoing,
the Administrative Agent shall not be required to take any action hereunder with
respect to any Default or Event of Default, except as expressly provided in
Sections 8.2 and 8.5. Upon the occurrence of an Event of Default, the
Administrative Agent shall take such action to enforce the Liens granted to the
Administrative Agent on the Collateral and to preserve and protect the
Collateral as may be directed by the Required Lenders. Unless and until the
Required Lenders give such direction, the Administrative Agent may (but shall
not be obligated to) take or refrain from taking such actions as it deems
appropriate and in the best interest of all the Lenders. In no event, however,
shall the Administrative Agent be required to take any action in violation of
applicable law or of any provision of any Loan Document, and the Administrative
Agent shall in all cases be fully justified in failing or refusing to act
hereunder or under any other Loan Document unless it first receives any further
assurances of its indemnification from the Lenders that it may require,
including prepayment of any related expenses and any other protection it
requires against any and all costs, expense, and liability which may be incurred
by it by reason of taking or continuing to take any such action. The
Administrative Agent shall be entitled to assume that no Default or Event of
Default exists unless notified in writing to the contrary by a Lender, the
Australian Trustee or the Borrowers. In all cases in which the Loan Documents do
not require the Administrative Agent to take specific action, the Administrative
Agent shall be fully justified in using its discretion in failing to take or in
taking any action thereunder. Any instructions of the Required Lenders, or of
any other group of Lenders called for under the specific provisions of the Loan
Documents, shall be binding upon all the Lenders and the holders of the
Obligations. The Australian Lender agrees that it shall not give the Australian
Trustee any instruction that is contrary to any instructions of the Required
Lenders (or such other group of Lenders, as the case may be) to the
Administrative Agent, and that it shall give the Australian Trustee instructions
that are consistent with the instructions of the Required Lenders (or such other
group of Lenders, as the case may be) to the Administrative Agent. The
Australian Trustee is not required to inquire as to whether the instructions
given to it by the Australian Lender are consistent with the instructions of the
Required Lenders (or such other group of Lenders, as the case may be) to the
Administrative Agent.
Section 10.4. Consultation with Experts. The Administrative Agent may
consult with legal counsel, independent public accountants, and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such counsel,
accountants or experts. In no event, however shall the proceeds of any
Australian collateral be applied to the payment of any of the U.S. Borrower's
Obligations.
Section 10.5. Liability of Administrative Agent; Credit Decision.
Neither the Administrative Agent nor any of its directors, officers, agents or
employees shall be liable for any action taken or not taken by it in connection
with the Loan Documents: (i) with the consent or at the request of the Required
Lenders or (ii) in the absence of its own gross negligence or willful
misconduct. Neither the Administrative Agent nor any of its directors, officers,
agents or employees shall be responsible for or have any duty to ascertain,
inquire into or verify: (i) any
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statement, warranty or representation made in connection with this Agreement,
any other Loan Document or any Credit Event; (ii) the performance or observance
of any of the covenants or agreements of the Borrowers or any Subsidiary
contained herein or in any other Loan Document; (iii) the satisfaction of any
condition specified in Section 6 hereof, except receipt of items required to be
delivered to the Administrative Agent; or (iv) the validity, effectiveness,
genuineness, enforceability, perfection, value, worth or collectibility hereof
or of any other Loan Document or of any other documents or writing furnished in
connection with any Loan Document or of any Collateral; and the Administrative
Agent makes no representation of any kind or character with respect to any such
matter mentioned in this sentence. The Administrative Agent may execute any of
its duties under any of the Loan Documents by or through employees, agents, and
attorneys-in-fact and shall not be answerable to the Lenders, the Borrowers, or
any other Person for the default or misconduct of any such agents or
attorneys-in-fact selected with reasonable care. The Administrative Agent shall
not incur any liability by acting in reliance upon any notice, consent,
certificate, other document or statement (whether written or oral) believed by
it to be genuine or to be sent by the proper party or parties. In particular and
without limiting any of the foregoing, the Administrative Agent shall have no
responsibility for confirming the accuracy of any compliance certificate or
other document or instrument received by it under the Loan Documents. The
Administrative Agent may treat the payee of any Note as the holder thereof until
written notice of transfer shall have been filed with the Administrative Agent
signed by such payee in form satisfactory to the Administrative Agent. Each
Lender acknowledges that it has independently and without reliance on the
Administrative Agent, any other Lender or the Australian Trustee, and based upon
such information, investigations and inquiries as it deems appropriate, made its
own credit analysis and decision to extend credit to the Borrowers in the manner
set forth in the Loan Documents. It shall be the responsibility of each Lender
to keep itself informed as to the creditworthiness of the Borrowers and their
Subsidiaries, and neither the Administrative Agent nor the Australian Trustee
shall have any liability to any Lender with respect thereto.
Section 10.6. Indemnity. The Lenders shall ratably, in accordance with
their respective Percentages, indemnify and hold the Administrative Agent, and
its directors, officers, employees, agents, and representatives harmless from
and against any liabilities, losses, costs or expenses suffered or incurred by
it under any Loan Document or in connection with the transactions contemplated
thereby, regardless of when asserted or arising, except to the extent they are
promptly reimbursed for the same by the Borrowers and except to the extent that
any event giving rise to a claim was caused by the gross negligence or willful
misconduct of the party seeking to be indemnified. The obligations of the
Lenders under this Section shall survive termination of this Agreement. The
Administrative Agent shall be entitled to offset amounts received for the
account of a Lender under this Agreement against unpaid amounts due from such
Lender to the Administrative Agent hereunder (whether as fundings of
participations, indemnities or otherwise), but shall not be entitled to offset
against amounts owed to the Administrative Agent by any Lender arising outside
of this Agreement and the other Loan Documents.
Section 10.7. Resignation of Administrative Agent and Successor
Administrative Agent. The Administrative Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrowers. Upon any such
resignation of the Administrative Agent, the Required
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Lenders shall have the right to appoint a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Administrative Agent's giving of notice of resignation then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which may be any Lender hereunder or any commercial bank
organized under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $200,000,000. Upon the
acceptance of its appointment as the Administrative Agent hereunder, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights and duties of the retiring Administrative Agent under the Loan
Documents, and the retiring Administrative Agent shall be discharged from its
duties and obligations thereunder. After any retiring Administrative Agent's
resignation hereunder as Administrative Agent, the provisions of this Section 10
and all protective provisions of the other Loan Documents shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent, but no successor Administrative Agent shall in any event
be liable or responsible for any actions of its predecessor. If the
Administrative Agent resigns and no successor is appointed, the rights and
obligations of such Administrative Agent shall be automatically assumed by the
Required Lenders and (i) the Borrowers shall be directed to make all payments
due each Lender hereunder directly to such Lender and (ii) the Administrative
Agent's rights in the Collateral Documents shall be assigned without
representation, recourse or warranty to the Lenders as their interests may
appear.
Section 10.8. U.S. L/C Issuers. The U.S. L/C Issuer shall act on behalf
of the Lenders with respect to any U.S. Letters of Credit issued by it and the
documents associated therewith. The U.S. L/C Issuer shall have all of the
benefits and immunities (i) provided to the Administrative Agent in this Section
10 with respect to any acts taken or omissions suffered by the U.S. L/C Issuer
in connection with U.S. Letters of Credit issued by it or proposed to be issued
by it and the Applications pertaining to such U.S. Letters of Credit as fully as
if the term "Administrative Agent", as used in this Section 10, included the
U.S. L/C Issuer with respect to such acts or omissions and (ii) as additionally
provided in this Agreement with respect to such U.S. L/C Issuer.
Section 10.9. Hedging Liability and Funds Transfer and Deposit Account
Liability Arrangements. By virtue of a Lender's execution of this Agreement or
an assignment agreement pursuant to Section 12.12 hereof, as the case may be,
any Affiliate of such Lender with whom any Borrower or any Subsidiary has
entered into an agreement creating Hedging Liability or Funds Transfer and
Deposit Account Liability shall be deemed a Lender party hereto for purposes of
any reference in a Loan Document to the parties for whom the Administrative
Agent is acting, it being understood and agreed that the rights and benefits of
such Affiliate under the Loan Documents consist exclusively of such Affiliate's
right to share in payments and collections out of the Collateral and the
Guaranties as more fully set forth in Section 2.2 hereof, and subject to the
limitations on sharing of Australian collateral and guaranties as described in
other provisions of the Loan Documents. In connection with any such distribution
of payments and collections, the Administrative Agent shall be entitled to
assume no amounts are due to any Lender or its Affiliate with respect to Hedging
Liability or Funds Transfer and Deposit Account
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Liability unless such Lender has notified the Agent in writing of the amount of
any such liability owed to it or its Affiliate prior to such distribution.
Section 10.10. Designation of Additional Agents. The Administrative
Agent shall have the continuing right, for purposes hereof, at any time and from
time to time to designate one or more of the Lenders (and/or its or their
Affiliates) as "syndication agents," "documentation agents," "arrangers," or
other designations for purposes hereto, but such designation shall have no
substantive effect, and such Lenders and their Affiliates shall have no
additional powers, duties or responsibilities as a result thereof.
Section 10.11. Authorization to Release or Subordinate or Limit Liens.
The Administrative Agent is hereby irrevocably authorized by each of the Lenders
to (a) release any Lien covering any Collateral that is sold, transferred, or
otherwise disposed of in accordance with the terms and conditions of this
Agreement and the relevant Collateral Documents (including a sale, transfer, or
disposition permitted by the terms of Section 7.10 hereof or which has otherwise
been consented to in accordance with Section 12.13 hereof), (b) release or
subordinate any Lien on Collateral consisting of goods financed with purchase
money indebtedness or under a Capital Lease to the extent such purchase money
indebtedness or Capitalized Lease Obligation, and the Lien securing the same,
are permitted by Sections 7.7(b) and 7.8(d) hereof, and (c) to reduce or limit
the amount of the indebtedness secured by any particular item of Collateral to
an amount not less than the estimated value thereof to the extent necessary to
reduce mortgage registry, filing and similar tax.
SECTION 11. THE GUARANTEES.
Section 11.1. The Guarantees. To induce the Lenders to provide the
credits described herein and in consideration of benefits expected to accrue to
each of the Borrowers by reason of the Commitments and for other good and
valuable consideration, receipt of which is hereby acknowledged, the U.S.
Borrower and each Domestic Subsidiary of the U.S. Borrower (including any
Subsidiary formed or acquired after the Closing Date and becoming a party hereto
by executing an Additional Guarantor Supplement in the form attached hereto as
Exhibit F or such other form acceptable to the Administrative Agent, the U.S.
Borrower and each such Subsidiary individually a "Guarantor" and collectively,
the "Guarantors") hereby unconditionally and irrevocably guarantee jointly and
severally to the Administrative Agent, the Lenders, and their Affiliates, the
due and punctual payment of all present and future Obligations, Hedging
Liability, and Funds Transfer and Deposit Account Liability, including, but not
limited to, the due and punctual payment of principal of and interest on the
Notes, the Reimbursement Obligations, and the due and punctual payment of all
other Obligations now or hereafter owed by the U.S. Borrower under the Loan
Documents as and when the same shall become due and payable, whether at stated
maturity, by acceleration, or otherwise, according to the terms hereof and
thereof. In case of failure by any Borrower punctually to pay any Obligations,
Hedging Liability, or Funds Transfer and Deposit Account Liability guaranteed
hereby, each of the other Guarantors of such Borrower's Obligations hereby
unconditionally agrees to make such payment or to cause such payment to be made
punctually as and when the same shall become due and payable, whether at stated
maturity, by acceleration, or otherwise, and as if such payment were made by the
relevant Borrower.
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Section 11.2. Guarantee Unconditional. The obligations of each
Guarantor under this Section 11 shall be unconditional and absolute and, without
limiting the generality of the foregoing, shall not be released, discharged, or
otherwise affected by:
(a) any extension, renewal, settlement, compromise,
waiver, or release in respect of any obligation of any Borrower or of
any other guarantor under this Agreement or any other Loan Document or
by operation of law or otherwise;
(b) any modification or amendment of or supplement to
this Agreement or any other Loan Document;
(c) any change in the corporate existence, structure, or
ownership of, or any insolvency, bankruptcy, reorganization, or other
similar proceeding affecting, any Borrower, any other guarantor, or any
of their respective assets, or any resulting release or discharge of
any obligation of any Borrower or of any other guarantor contained in
any Loan Document;
(d) the existence of any claim, set-off, or other rights
which any Borrower or any other guarantor may have at any time against
the Administrative Agent, any Lender, or any other Person, whether or
not arising in connection herewith;
(e) any failure to assert, or any assertion of, any claim
or demand or any exercise of, or failure to exercise, any rights or
remedies against any Borrower, any other guarantor, or any other Person
or Property;
(f) any application of any sums by whomsoever paid or
howsoever realized to any obligation of any Borrower, regardless of
what obligations of the Borrowers remain unpaid;
(g) any invalidity or unenforceability relating to or
against any Borrower or any other guarantor for any reason of this
Agreement or of any other Loan Document or any provision of applicable
law or regulation purporting to prohibit the payment by any Borrower or
any other guarantor of the principal of or interest on any Note or any
Reimbursement Obligation or any other amount payable under the Loan
Documents; or
(h) any other act or omission to act or delay of any kind
by the Administrative Agent, any Lender, or any other Person or any
other circumstance whatsoever that might, but for the provisions of
this paragraph, constitute a legal or equitable discharge of the
obligations of any Guarantor under this Section 11.
Section 11.3. Discharge Only upon Payment in Full; Reinstatement in
Certain Circumstances. Each Guarantor's obligations under this Section 11 shall
remain in full force and effect until the Commitments are terminated, all
Letters of Credit have expired, and the principal of and interest on the Notes
and all other amounts payable by any Borrower and the Guarantors under this
Agreement and all other Loan Documents and, if then outstanding and unpaid, all
Hedging Liability and Funds Transfer and Deposit Account Liability shall have
been paid in full.
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If at any time any payment of the principal of or interest on any Note or any
Reimbursement Obligation or any other amount payable by any Borrower or any
Guarantor under the Loan Documents is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy, or reorganization of any Borrower or
of any Guarantor, or otherwise, each Guarantor's obligations under this Section
11 with respect to such payment shall be reinstated at such time as though such
payment had become due but had not been made at such time.
Section 11.4. Subrogation. Each Guarantor agrees it will not exercise
any rights which it may acquire by way of subrogation by any payment made
hereunder, or otherwise, until all the Obligations, Hedging Liability, and Funds
Transfer and Deposit Account Liability shall have been paid in full subsequent
to the termination of all the Commitments and expiration of all Letters of
Credit. If any amount shall be paid to a Guarantor on account of such
subrogation rights at any time prior to the later of (x) the payment in full of
the Obligations, Hedging Liability, and Funds Transfer and Deposit Account
Liability and all other amounts payable by any Borrower hereunder and the other
Loan Documents and (y) the termination of the Commitments and expiration of all
Letters of Credit, such amount shall be held in trust for the benefit of the
Administrative Agent and the Lenders and shall forthwith be paid to the
Administrative Agent for the benefit of the Lenders or be credited and applied
upon the Obligations, Hedging Liability, and Funds Transfer and Deposit Account
Liability, whether matured or unmatured, in accordance with the terms of this
Agreement.
Section 11.5. Waivers. Each Guarantor irrevocably waives acceptance
hereof, presentment, demand, protest, and any notice not provided for herein, as
well as any requirement that at any time any action be taken by the
Administrative Agent, any Lender, or any other Person against any Borrower,
another guarantor, or any other Person.
Section 11.6. Limit on Recovery. Notwithstanding any other provision
hereof, the right of recovery against each Guarantor under this Section 11 shall
not exceed $1.00 less than the lowest amount which would render such Guarantor's
obligations under this Section 11 void or voidable under applicable law,
including, without limitation, fraudulent conveyance law.
Section 11.7. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by any Borrower under this Agreement or any other
Loan Document, or under any agreement establishing Hedging Liability or Funds
Transfer and Deposit Account Liability, is stayed upon the insolvency,
bankruptcy or reorganization of such Borrower, all such amounts otherwise
subject to acceleration under the terms of this Agreement or the other Loan
Documents, or under any agreement establishing Hedging Liability or Funds
Transfer and Deposit Account Liability, shall nonetheless be payable by the
Guarantors hereunder forthwith on demand by the Administrative Agent made at the
request of the Required Lenders.
Section 11.8. Benefit to Guarantors. All of the Guarantors are engaged
in related businesses and integrated to such an extent that the financial
strength and flexibility of each Guarantor has a direct impact on the success of
each other Guarantor. Each Guarantor will derive substantial direct and indirect
benefit from the extension of credit hereunder.
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Section 11.9. Guarantor Covenants. Each Guarantor shall take such
action as the Borrowers are required by this Agreement to cause such Guarantor
to take, and shall refrain from taking such action as the Borrowers are required
by this Agreement to prohibit such Guarantor from taking.
SECTION 12. MISCELLANEOUS.
Section 12.1. Withholding Taxes. (a) Payments Free of Withholding.
Except as otherwise required by law and subject to Section 12.1(b) hereof, each
payment by the Borrowers under this Agreement or the other Loan Documents shall
be made without withholding for or on account of any present or future taxes
(other than overall net income taxes on the recipient) imposed by or within the
jurisdiction in which the Borrowers are domiciled, any jurisdiction from which
the Borrowers make any payment, or (in each case) any political subdivision or
taxing authority thereof or therein. If any such withholding is so required, the
Borrowers shall make the withholding, pay the amount withheld to the appropriate
governmental authority before penalties attach thereto or interest accrues
thereon and forthwith pay such additional amount as may be necessary to ensure
that the net amount actually received by each Lender and the Administrative
Agent free and clear of such taxes (including such taxes on such additional
amount) is equal to the amount which that Lender or the Administrative Agent (as
the case may be) would have received had such withholding not been made. If the
Administrative Agent or any Lender pays any amount in respect of any such taxes,
penalties or interest, the Borrowers shall reimburse the Administrative Agent or
such Lender for that payment on demand in the currency in which such payment was
made. If the Borrowers pay any such taxes, penalties or interest, it shall
deliver official tax receipts evidencing that payment or certified copies
thereof to the Lender or Administrative Agent on whose account such withholding
was made (with a copy to the Administrative Agent if not the recipient of the
original) on or before the thirtieth day after payment.
(b) U.S. Withholding Tax Exemptions. Each Lender that is not a
United States person (as such term is defined in Section 7701(a)(30) of the
Code) shall submit to the Borrowers and the Administrative Agent on or before
the date the initial Credit Event is made hereunder or, if later, the date such
financial institution becomes a Lender hereunder, two duly completed and signed
copies of (i) either Form W-8 BEN (relating to such Lender and entitling it to a
complete exemption from withholding under the Code on all amounts to be received
by such Lender, including fees, pursuant to the Loan Documents and the
Obligations) or Form W-8 ECI (relating to all amounts to be received by such
Lender, including fees, pursuant to the Loan Documents and the Obligations) of
the United States Internal Revenue Service or (ii) solely if such Lender is
claiming exemption from United States withholding tax under Section 871(h) or
881(c) of the Code with respect to payments of "portfolio interest", a Form W-8
BEN, or any successor form prescribed by the Internal Revenue Service, and a
certificate representing that such Lender is not a bank for purposes of Section
881(c) of the Code, is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Code) of any Borrower and is not a controlled
foreign corporation related to any Borrower (within the meaning of Section
864(d)(4) of the Code). Thereafter and from time to time, each Lender shall
submit to the Borrowers and the Administrative Agent such additional duly
completed and signed copies of one or the other of such Forms (or such successor
forms as shall be adopted from time to time by the relevant
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United States taxing authorities) and such other certificates as may be (i)
requested by the Borrowers in a written notice, directly or through the
Administrative Agent, to such Lender and (ii) required under then-current United
States law or regulations to avoid or reduce United States withholding taxes on
payments in respect of all amounts to be received by such Lender, including
fees, pursuant to the Loan Documents or the Obligations. Upon the request of the
Borrowers or the Administrative Agent, each Lender that is a United States
person (as such term is defined in Section 7701(a)(30) of the Code) shall submit
to the Borrowers and the Administrative Agent a certificate to the effect that
it is such a United States person.
(c) Inability of Lender to Submit Forms. If any Lender determines,
as a result of any change in applicable law, regulation or treaty, or in any
official application or interpretation thereof, that it is unable to submit to
the Borrowers or the Administrative Agent any form or certificate that such
Lender is obligated to submit pursuant to subsection (b) of this Section 12.1 or
that such Lender is required to withdraw or cancel any such form or certificate
previously submitted or any such form or certificate otherwise becomes
ineffective or inaccurate, such Lender shall promptly notify the Borrowers and
Administrative Agent of such fact and the Lender shall to that extent not be
obligated to provide any such form or certificate and will be entitled to
withdraw or cancel any affected form or certificate, as applicable.
Section 12.2. No Waiver, Cumulative Remedies. No delay or failure on
the part of the Administrative Agent or any Lender or on the part of the holder
or holders of any of the Obligations in the exercise of any power or right under
any Loan Document shall operate as a waiver thereof or as an acquiescence in any
default, nor shall any single or partial exercise of any power or right preclude
any other or further exercise thereof or the exercise of any other power or
right. The rights and remedies hereunder of the Administrative Agent, the
Lenders and of the holder or holders of any of the Obligations are cumulative
to, and not exclusive of, any rights or remedies which any of them would
otherwise have.
Section 12.3. Non-Business Days. If any payment hereunder becomes due
and payable on a day which is not a Business Day, the due date of such payment
shall be extended to the next succeeding Business Day on which date such payment
shall be due and payable. In the case of any payment of principal falling due on
a day which is not a Business Day, interest on such principal amount shall
continue to accrue during such extension at the rate per annum then in effect,
which accrued amount shall be due and payable on the next scheduled date for the
payment of interest.
Section 12.4. Documentary Taxes. The Borrowers agree to pay on demand
any documentary, stamp or similar taxes payable in respect of this Agreement or
any other Loan Document, including interest and penalties, in the event any such
taxes are assessed, irrespective of when such assessment is made and whether or
not any credit is then in use or available hereunder.
Section 12.5. Survival of Representations. All representations and
warranties made herein or in any other Loan Document or in certificates given
pursuant hereto or thereto shall survive the execution and delivery of this
Agreement and the other Loan Documents, and shall
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continue in full force and effect with respect to the date as of which they were
made as long as any credit is in use or available hereunder.
Section 12.6. Survival of Indemnities. All indemnities and other
provisions relative to reimbursement to the Lenders of amounts sufficient to
protect the yield of the Lenders with respect to the Loans and Letters of
Credit, including, but not limited to, Sections 1.11, 9.3, and 12.15 hereof,
shall survive the termination of this Agreement and the other Loan Documents and
the payment of the Obligations.
Section 12.7. Sharing of Set-Off. Each U.S. Lender agrees with each
other U.S. Lender a party hereto that if such U.S. Lender shall receive and
retain any payment, whether by set-off or application of deposit balances or
otherwise, on any of the Loans or Reimbursement Obligations in excess of its
ratable share of payments on all such Obligations then outstanding to the U.S.
Lenders, then such U.S. Lender shall purchase for cash at face value, but
without recourse, ratably from each of the other U.S. Lenders such amount of the
Loans or Reimbursement Obligations, or participations therein, held by each such
other U.S. Lenders (or interest therein) as shall be necessary to cause such
U.S. Lender to share such excess payment ratably with all the other U.S.
Lenders; provided, however, that if any such purchase is made by any U.S.
Lender, and if such excess payment or part thereof is thereafter recovered from
such purchasing U.S. Lender, the related purchases from the other U.S. Lenders
shall be rescinded ratably and the purchase price restored as to the portion of
such excess payment so recovered, but without interest. For purposes of this
Section, amounts owed to or recovered by the U.S. L/C Issuer in connection with
Reimbursement Obligations in which U.S. Lenders have been required to fund their
participation shall be treated as amounts owed to or recovered by the U.S. L/C
Issuer as a U.S. Lender hereunder.
Section 12.8. Notices. Except as otherwise specified herein, all
notices hereunder and under the other Loan Documents shall be in writing
(including, without limitation, notice by telecopy) and shall be given to the
relevant party at its address or telecopier number set forth below, or such
other address or telecopier number as such party may hereafter specify by notice
to the Administrative Agent and the Borrowers given by courier, by United States
certified or registered mail, by telecopy or by other telecommunication device
capable of creating a written record of such notice and its receipt. Notices
under the Loan Documents to the Lenders and the Administrative Agent shall be
addressed to their respective addresses or telecopier numbers set forth on the
signature pages hereof, and to the Borrowers to:
c/o Penford Corporation
7094 South Revere Parkway
Englewood, Colorado 80112
Attention: Chief Financial Officer
Telephone: (303) 649-1900
Telecopy: (303) 649-1700
Each such notice, request or other communication shall be effective (i) if given
by telecopier, when such telecopy is transmitted to the telecopier number
specified in this Section or on the signature pages hereof and a confirmation of
such telecopy has been received by the sender,
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(ii) if given by mail, five (5) days after such communication is deposited in
the mail, certified or registered with return receipt requested, addressed as
aforesaid or (iii) if given by any other means, when delivered at the addresses
specified in this Section or on the signature pages hereof; provided that any
notice given pursuant to Section 1 hereof shall be effective only upon receipt.
Any notice given to the Lenders shall also be given to the Australian Trustee.
Section 12.9. Counterparts. This Agreement may be executed in any
number of counterparts, and by the different parties hereto on separate
counterpart signature pages, and all such counterparts taken together shall be
deemed to constitute one and the same instrument.
Section 12.10. Successors and Assigns. This Agreement shall be binding
upon the Borrowers and the Guarantors and their successors and assigns, and
shall inure to the benefit of the Administrative Agent and each of the Lenders
and the benefit of their respective successors and assigns, including any
subsequent holder of any of the Obligations. The Borrowers and the Guarantors
may not assign any of their rights or obligations under any Loan Document
without the written consent of all of the Lenders.
Section 12.11. Participants. Each Lender shall have the right at its
own cost to grant participations (to be evidenced by one or more agreements or
certificates of participation) in the Loans made and Reimbursement Obligations
and/or Commitments held by such Lender at any time and from time to time to one
or more other Persons; provided that no such participation shall relieve any
Lender of any of its obligations under this Agreement, and, provided, further
that no such participant shall have any rights under this Agreement except as
provided in this Section, and the Administrative Agent shall have no obligation
or responsibility to such participant. Any agreement pursuant to which such
participation is granted shall provide that the granting Lender shall retain the
sole right and responsibility to enforce the obligations of the Borrowers under
this Agreement and the other Loan Documents including, without limitation, the
right to approve any amendment, modification or waiver of any provision of the
Loan Documents, except that such agreement may provide that such Lender will not
agree to any modification, amendment or waiver of the Loan Documents that would
reduce the amount of or postpone any fixed date for payment of any Obligation in
which such participant has an interest. Any party to which such a participation
has been granted shall have the benefits of Section 1.11 and Section 9.3 hereof.
The Borrowers authorize each Lender to disclose to any participant or
prospective participant under this Section any financial or other information
pertaining to the Borrowers or any Subsidiary thereof, provided that such
participant or prospective participant shall have agreed in writing prior to its
receipt of such information to maintain all such information confidential and
not to disclose such information to any other Person except any such information
(a) that has become generally available to the public, (b) if required or
appropriate in any report, statement or testimony submitted to any regulatory
body having or claiming to have jurisdiction over such Lender, (c) if required
or appropriate in response to any summons or subpoena or in connection with any
litigation or (d) in order to comply with any law, order, regulation or ruling
applicable to such Lender.
Section 12.12. Assignments. (a) Each Lender shall have the right at any
time, with the prior consent of the Administrative Agent and, so long as no
Event of Default then exists, the Borrowers (which consent of the Borrowers
shall not be unreasonably withheld) to sell, assign,
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transfer or negotiate all or any part of its rights and obligations under the
Loan Documents (including, without limitation, the indebtedness evidenced by the
Notes then held by such assigning Lender, together with an equivalent percentage
of its obligation to make Loans and participate in Letters of Credit) to one or
more commercial banks or other financial institutions or investors, provided
that, unless otherwise agreed to by the Administrative Agent, such assignment
shall be of a fixed percentage (and not by its terms of varying percentage) of
the assigning Lender's rights and obligations under the Loan Documents;
provided, however, that in order to make any such assignment (i) unless the
assigning Lender is assigning all of its Commitments, outstanding Loans and
interests in Letters of Credit Obligations, the assigning Lender shall retain at
least $5,000,000 in unused Commitments, outstanding Loans and interests in
Letters of Credit, (ii) the assignee Lender shall have Commitments, outstanding
Loans and interests in Letters of Credit of at least $5,000,000, (iii) each such
assignment shall be evidenced by a written agreement (substantially in the form
attached hereto as Exhibit G or in such other form acceptable to the
Administrative Agent) executed by such assigning Lender, such assignee Lender or
Lenders, the Administrative Agent and, if required as provided above, the
Borrowers, which agreement shall specify in each instance the portion of the
Obligations which are to be assigned to the assignee Lender and the portion of
the Commitments of the assigning Lender to be assumed by the assignee Lender,
and (iv) the assigning Lender shall pay to the Administrative Agent a processing
fee of $3,500 and any out-of-pocket attorneys' fees and expenses incurred by the
Administrative Agent in connection with any such assignment agreement. Any such
assignee shall become a Lender for all purposes hereunder to the extent of the
rights and obligations under the Loan Documents it assumes and the assigning
Lender shall be released from its obligations, and will have released its
rights, under the Loan Documents to the extent of such assignment. The address
for notices to such assignee Lender shall be as specified in the assignment
agreement executed by it. Promptly upon the effectiveness of any such assignment
agreement, the Borrowers shall execute and deliver replacement Notes to the
assignee Lender and the assigning Lender in the respective amounts of their
Commitments (or assigned principal amounts, as applicable) after giving effect
to the reduction occasioned by such assignment (all such Notes to constitute
"Notes" for all purposes of the Loan Documents), and the assignee Lender shall
thereafter surrender to the Borrowers its old Notes. The Borrowers authorize
each Lender to disclose to any purchaser or prospective purchaser of an interest
in the Loans and interest in Letters of Credit owed to it or its Commitments
under this Section any financial or other information pertaining to the
Borrowers or any Subsidiary thereof.
(b) Any Lender may at any time pledge or grant a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including any such pledge or grant to a Federal Reserve Bank,
and this Section shall not apply to any such pledge or grant of a security
interest; provided that no such pledge or grant of a security interest shall
release a Lender from any of its obligations hereunder or substitute any such
pledgee or secured party for such Lender as a party hereto; provided further,
however, the right of any such pledgee or grantee (other than any Federal
Reserve Bank) to further transfer all or any portion of the rights pledged or
granted to it, whether by means of foreclosure or otherwise, shall be at all
times subject to the terms of this Agreement.
Section 12.13. Amendments. Any provision of this Agreement or the other
Loan Documents may be amended or waived if, but only if, such amendment or
waiver is in writing
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and is signed by (a) the Borrowers, (b) the Required Lenders, (c) if the rights
or duties of the Administrative Agent are affected thereby, the Administrative
Agent, (d) if the rights or duties of the Australian Agent are affected thereby,
the Australian Agent, and (e) if the rights or duties of the Australian Trustee
are affected thereby, the Australian Trustee; provided that:
(i) no amendment or waiver pursuant to this Section 12.13
shall (A) increase any Commitment of any Lender without the consent
of such Lender or (B) reduce the amount of or postpone the date for
any scheduled payment of any principal of or interest on any Loan or
of any Reimbursement Obligation or of any fee payable hereunder
without the consent of the Lender to which such payment is owing or
which has committed to make such Loan or U.S. Letter of Credit (or
participate therein) hereunder; and
(ii) no amendment or waiver pursuant to this Section 12.13
shall, unless signed by each Lender, increase the aggregate
Commitments of the Lenders, change the definitions of Revolving
Credit Termination Date or Required Lenders, change the provisions
of this Section 12.13, release any material guarantor or any
substantial part of the Collateral (except as otherwise provided for
in the Loan Documents), or affect the number of Lenders required to
take any action hereunder or under any other Loan Document.
Section 12.14. Headings. Section headings used in this Agreement are
for reference only and shall not affect the construction of this Agreement.
Section 12.15. Costs and Expenses; Indemnification. (a) The Borrowers
agree to pay all reasonable costs and expenses of the Administrative Agent in
connection with the preparation, negotiation, syndication, and administration of
the Loan Documents, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent, in connection with the
preparation and execution of the Loan Documents, and any amendment, waiver or
consent related thereto, whether or not the transactions contemplated herein are
consummated, together with any fees and charges suffered or incurred by the
Administrative Agent in connection with periodic environmental audits, fixed
asset appraisals, title insurance policies, collateral filing fees and lien
searches. The Borrowers further agree to indemnify the Administrative Agent,
each Lender, and their respective directors, officers, employees, agents,
financial advisors, and consultants against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all reasonable expenses of litigation or preparation therefor, whether or not
the indemnified Person is a party thereto, or any settlement arrangement arising
from or relating to any such litigation) which any of them may pay or incur
arising out of or relating to any Loan Document or any of the transactions
contemplated thereby or the direct or indirect application or proposed
application of the proceeds of any Loan or U.S. Letter of Credit, other than
those which arise from the gross negligence or willful misconduct of the party
claiming indemnification. The Borrowers, upon demand by the Administrative Agent
or a Lender at any time, shall reimburse the Administrative Agent or such Lender
for any legal or other expenses incurred in connection with investigating or
defending against any of the foregoing (including any settlement costs relating
to the foregoing) except if the same is directly
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due to the gross negligence or willful misconduct of the party to be
indemnified. The obligations of the Borrowers under this Section shall survive
the termination of this Agreement.
(b) The Borrowers unconditionally agree to forever indemnify,
defend and hold harmless, and covenant not to sue for any claim for contribution
against, the Administrative Agent and the Lenders for any damages, costs, loss
or expense, including without limitation, response, remedial or removal costs,
arising out of any of the following: (i) any presence, release, threatened
release or disposal of any hazardous or toxic substance or petroleum by any
Borrower or any Subsidiary or otherwise occurring on or with respect to its
Property (whether owned or leased), (ii) the operation or violation of any
environmental law, whether federal, state, or local, and any regulations
promulgated thereunder, by any Borrower or any Subsidiary or otherwise occurring
on or with respect to its Property (whether owned or leased), (iii) any claim
for personal injury or property damage in connection with any Borrower or any
Subsidiary or otherwise occurring on or with respect to its Property (whether
owned or leased), and (iv) the inaccuracy or breach of any environmental
representation, warranty or covenant by any Borrower or any Subsidiary made
herein or in any other Loan Document evidencing or securing any Obligations or
setting forth terms and conditions applicable thereto or otherwise relating
thereto, except for damages arising from the willful misconduct or gross
negligence of the party claiming indemnification. This indemnification shall
survive the payment and satisfaction of all Obligations and the termination of
this Agreement, and shall remain in force beyond the expiration of any
applicable statute of limitations and payment or satisfaction in full of any
single claim under this indemnification. This indemnification shall be binding
upon the successors and assigns of the Borrowers and shall inure to the benefit
of Administrative Agent and the Lenders directors, officers, employees, agents,
and collateral trustees, and their successors and assigns.
(c) The U.S Borrower hereby agrees to indemnify the Administrative
Agent and each Lender for the full amount of Indemnified Taxes (including,
without limitation, any Indemnified Taxes imposed on amounts payable under this
Section) paid by the Administrative Agent or such Lender in respect of payments
of any Obligations, Hedging Liability or Funds Transfer and Deposit Account
Liability to or for the account of any Lender or the Administrative Agent
hereunder or under any of the Loan Documents and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto.
Payments due under this indemnification shall be made within 30 days of the date
the Administrative Agent or such Lender makes demand therefor. For purposes of
this Section, the term "Indemnified Taxes" means any and all present or future
taxes, duties, levies, imposts, deductions, charges or withholdings, and any and
all liabilities with respect to the foregoing imposed by the Commonwealth of
Australia or New Zealand or any authority thereof or therein, but excluding, in
the case of each Lender or applicable lending installation and the
Administrative Agent, taxes imposed on its overall net income, franchise, and
doing business taxes imposed on it, (i) by the jurisdiction under the laws of
which such Lender or the Administrative Agent is incorporated or organized, (ii)
by the jurisdiction in which the Administrative Agent's or such Lender's
principal executive office or such Lender's applicable lending installation is
located, or (iii) as a result of any connection between such Lender or the
Administrative Agent, as applicable, and the Commonwealth of Australia or New
Zealand, as applicable.
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Section 12.16. Set-off. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
upon the occurrence of any Event of Default, each Lender and each subsequent
holder of any Obligation is hereby authorized by the Borrowers and each
Guarantor at any time or from time to time, without notice to the Borrowers or
such Guarantor or to any other Person, any such notice being hereby expressly
waived, to set-off and to appropriate and to apply any and all deposits (general
or special, including, but not limited to, indebtedness evidenced by
certificates of deposit, whether matured or unmatured, but not including trust
accounts, and in whatever currency denominated) and any other indebtedness at
any time held or owing by that Lender or that subsequent holder to or for the
credit or the account of the Borrowers or such Guarantor, whether or not
matured, against and on account of the Obligations of the Borrowers or such
Guarantor to that Lender or that subsequent holder under the Loan Documents,
including, but not limited to, all claims of any nature or description arising
out of or connected with the Loan Documents, irrespective of whether or not (a)
that Lender or that subsequent holder shall have made any demand hereunder or
(b) the principal of or the interest on the Loans or Notes and other amounts due
hereunder shall have become due and payable pursuant to Section 8 and although
said obligations and liabilities, or any of them, may be contingent or
unmatured.
Section 12.17. Entire Agreement. The Loan Documents constitute the
entire understanding of the parties thereto with respect to the subject matter
thereof and any prior agreements, whether written or oral, with respect thereto
are superseded hereby.
Section 12.18. Governing Law. This Agreement and the other Loan
Documents, and the rights and duties of the parties hereto, shall be governed by
and construed and determined in accordance with the internal laws of the State
of Illinois.
Section 12.19. Severability of Provisions. Any provision of any Loan
Document which is unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction. All rights, remedies
and powers provided in this Agreement and the other Loan Documents may be
exercised only to the extent that the exercise thereof does not violate any
applicable mandatory provisions of law, and all the provisions of this Agreement
and other Loan Documents are intended to be subject to all applicable mandatory
provisions of law which may be controlling and to be limited to the extent
necessary so that they will not render this Agreement or the other Loan
Documents invalid or unenforceable.
Section 12.20. Excess Interest. Notwithstanding any provision to the
contrary contained herein or in any other Loan Document, no such provision shall
require the payment or permit the collection of any amount of interest in excess
of the maximum amount of interest permitted by applicable law to be charged for
the use or detention, or the forbearance in the collection, of all or any
portion of the Loans or other obligations outstanding under this Agreement or
any other Loan Document ("Excess Interest"). If any Excess Interest is provided
for, or is adjudicated to be provided for, herein or in any other Loan Document,
then in such event (a) the provisions of this Section shall govern and control,
(b) neither of the Borrowers nor any guarantor or endorser shall be obligated to
pay any Excess Interest, (c) any Excess Interest that the Administrative
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Agent or any Lender may have received hereunder shall, at the option of the
Administrative Agent, be (i) applied as a credit against the then outstanding
principal amount of Obligations hereunder and accrued and unpaid interest
thereon (not to exceed the maximum amount permitted by applicable law), (ii)
refunded to the Borrowers, or (iii) any combination of the foregoing, (d) the
interest rate payable hereunder or under any other Loan Document shall be
automatically subject to reduction to the maximum lawful contract rate allowed
under applicable usury laws (the "Maximum Rate"), and this Agreement and the
other Loan Documents shall be deemed to have been, and shall be, reformed and
modified to reflect such reduction in the relevant interest rate, and (e)
neither of the Borrowers nor any guarantor or endorser shall have any action
against the Administrative Agent or any Lender for any damages whatsoever
arising out of the payment or collection of any Excess Interest. Notwithstanding
the foregoing, if for any period of time interest on any of Borrowers'
Obligations is calculated at the Maximum Rate rather than the applicable rate
under this Agreement, and thereafter such applicable rate becomes less than the
Maximum Rate, the rate of interest payable on the Borrowers' Obligations shall
remain at the Maximum Rate until the Lenders have received the amount of
interest which such Lenders would have received during such period on the
Borrowers' Obligations had the rate of interest not been limited to the Maximum
Rate during such period.
Section 12.21. Construction. NOTHING CONTAINED HEREIN SHALL BE DEEMED
OR CONSTRUED TO PERMIT ANY ACT OR OMISSION WHICH IS PROHIBITED BY THE TERMS OF
ANY OF THE OTHER LOAN DOCUMENTS, THE COVENANTS AND AGREEMENTS CONTAINED HEREIN
BEING IN ADDITION TO AND NOT IN SUBSTITUTION FOR THE COVENANTS AND AGREEMENTS
CONTAINED IN THE OTHER LOAN DOCUMENTS.
Section 12.22. Lender's Obligations Several. The obligations of the
Lenders hereunder are several and not joint. Nothing contained in this Agreement
and no action taken by the Lenders pursuant hereto shall be deemed to constitute
the Lenders a partnership, association, joint venture or other entity.
Section 12.23. Submission to Jurisdiction; Waiver of Jury Trial. The
Borrowers and the Guarantors hereby submit to the nonexclusive jurisdiction of
the United States District Court for the Northern District of Illinois and of
any Illinois State court sitting in the City of Chicago for purposes of all
legal proceedings arising out of or relating to this Agreement, the other Loan
Documents or the transactions contemplated hereby or thereby. The Borrowers and
the Guarantors irrevocably waive, to the fullest extent permitted by law, any
objection which they may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum. THE
BORROWERS, THE GUARANTORS, THE ADMINISTRATIVE AGENT, AND THE LENDERS HEREBY
IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
THEREBY.
Section 12.24. Australian Trustee.
(a) Australian Trustee's Capacity. The Australian Trustee enters
into this Agreement in its capacity as trustee of the Penford Debenture Trust
and the Penford Security Trust.
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(b) Australian Trustee Acts as Nominee. Notwithstanding any other
provision of this Agreement, each party to this Agreement (other than the
Australian Trustee) acknowledges that:
(i) the Australian Trustee (in its capacity as trustee of
the Penford Debenture Trust): (x) holds the benefit of this Agreement
for the benefit of the Debenture Holders; (y) is bound to act on the
instructions of the Debenture Holders pursuant to the terms of the
Debenture Trust Deed; and (z) in the absence of such instructions from
the Debenture Holders or where a force majeure event exists, the
Australian Trustee is not bound to act.
(ii) the Australian Trustee (in its capacity as trustee of
the Penford Security Trust): (x) holds the benefit of this Agreement
for the benefit of the Beneficiaries; (y) is bound to act on the
instructions of the Beneficiaries pursuant to the terms of the Security
Trust Deed; and (z) in the absence of such instructions from the
Beneficiaries or where a force majeure event exists, the Australian
Trustee is not bound to act.
(c) Duties Limited. The obligations, duties and responsibilities
of the Australian Trustee (in its capacity as trustee of the Penford Debenture
Trust) are limited to those expressly set out in the Debenture Trust Deed and
this Agreement. The obligations, duties and responsibilities of the Australian
Trustee (in its capacity as trustee of the Penford Security Trust) are limited
to those expressly set out in the Security Trust Deed and this Agreement.
(d) Acknowledge Indemnity. It is acknowledged that:
(i) the Australian Trustee (in its capacity as trustee of
the Penford Debenture Trust) is entitled to be indemnified for its
actions under this Agreement: (x) out of the assets of the Penford
Debenture Trust; and (y) by the Debenture Holders, except where the
Australian Trustee has been guilty of fraud, willful misconduct or
gross negligence; and
(ii) the Australian Trustee (in its capacity as trustee of
the Penford Security Trust) is entitled to be indemnified for its
actions under this Agreement: (x) out of the assets of the Penford
Security Trust; and (y) by the Beneficiaries, except where the
Australian Trustee has been guilty of fraud, willful misconduct or
gross negligence.
(e) Limits on Liability. (i) Subject to Section 12.24(e)(ii)
hereof, each party to this Agreement (other than the Australian Trustee)
acknowledges and agrees that: (x) the Australian Trustee's liability under this
Agreement is limited to its ability to be indemnified in the manner set out in
Section 12.24(d) hereof; and (y) it will not have any recourse to the Australian
Trustee beyond that for which the Australian Trustee is entitled to be so
indemnified as contemplated by Section 12.24(d) hereof.
(ii) The limitation of liability set out in Section
12.24(e)(i) hereof will not apply where the Australian Trustee has been
guilty of fraud, willful misconduct or gross negligence.
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(f) Assignment by Australian Trustee. (i) Each party to this
Agreement (other than the Australian Trustee) acknowledges and agrees that the
Australian Trustee may assign its rights and novate or otherwise transfer its
obligations under this Agreement to any replacement trustee that is appointed
under the Debenture Trust Deed or the Security Trust Deed.
(ii) Each party to this Agreement (other than the Australian
Trustee) agrees that it will enter into a novation deed with any replacement
trustee that is appointed under the Debenture Trust Deed or the Security Trust
Deed (in a form acceptable to the Australian Trustee and the replacement
trustee).
(g) Definitions. For purposes of this Section 12.24, the following
terms shall be defined as follows:
"Debenture Holder" has the same meaning as in the Debenture Trust Deed.
"Beneficiary" has the same meaning as in the Security Trust Deed.
"Penford Debenture Trust" means the trust constituted under the Debenture Trust
Deed.
"Penford Security Trust" means the trust constituted under the Security
Trust Deed.
[SIGNATURE PAGES TO FOLLOW]
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This Agreement is entered into between us for the uses and purposes
hereinabove set forth as of the date first above written.
"U.S. BORROWER"
PENFORD CORPORATION
By /s/ Steven O. Cordier
-------------------------------------
Name Steven O. Cordier
Title Vice President and Chief
Financial Officer
"AUSTRALIAN BORROWERS"
PENFORD AUSTRALIA LIMITED
By /s/ Steven O. Cordier
-------------------------------------
Name Steven O. Cordier
Title Director
PENFORD HOLDINGS PTY. LIMITED
By /s/ Steven O. Cordier
-------------------------------------
Name Steven O. Cordier
Title Director
"GUARANTORS"
PENFORD PRODUCTS CO.
By /s/ Steven O. Cordier
-------------------------------------
Name Steven O. Cordier
Title Vice President and Chief
Financial Officer
[Signature Page to Credit Agreement]
"U.S. LENDERS"
HARRIS TRUST AND SAVINGS BANK, in its
individual capacity as a Lender, as
U.S. L/C Issuer, and as
Administrative Agent
By /s/ Karen L. Knudsen
-------------------------------------
Name Karen L. Knudsen
Title Vice President
Address:
111 West Monroe Street
Chicago, Illinois 60603
Attention: Food Group
Telecopy: (312) 765-8095
Telephone: (312) 461-3776
WELLS FARGO BANK, N.A.
By /s/ Catherine M. Jones
-------------------------------------
Name Catherine M. Jones
Title Vice President
Address:
WELLS FARGO BANK, N.A.
1740 Broadway Mac# C7301-031
Denver, CO 80274
Attention: Catherine M. Jones
Telecopy: (303) 863-6670
Telephone: (303) 863-5070
U.S. BANK NATIONAL ASSOCIATION
By /s/ Kenneth D. Brown
-------------------------------------
Name Kenneth D. Brown
Title Vice President
Address:
918-17th St., 4th Floor
Denver, CO 80202
Attention: Kenneth D. Brown
Telecopy: (303) 585-6935
Telephone: (303) 585-4202
[Signature Page to Credit Agreement]
LASALLE BANK NATIONAL ASSOCIATION
By /s/ Keith J. Cable
-------------------------------------
Name Keith J. Cable
Title Assistant Vice President
Address:
135 S. LaSalle Bank
Suite 1110
Chicago, IL 60603
Attention: Keith J. Cable
Telecopy: (312) 904-6242
Telephone: (312) 904-7621
COOPERATIVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND," NEW YORK BRANCH
By /s/ Edward J. Peyser
-------------------------------------
Name Edward J. Peyser
Title Managing Director
By /s/ Eric Hurshman
-------------------------------------
Name Eric Hurshman
Title Executive Director
Address:
300 South Wacker Drive
Suite 3500
Chicago, IL 60606
Attention: Brad Peterson
Telecopy: (312) 408-8240
Telephone: (312) 408-8222
[Signature Page to Credit Agreement]
"AUSTRALIAN LENDER"
AUSTRALIA AND NEW ZEALAND BANKING
GROUP LIMITED, in its individual
capacity as Australian Lender and as
Australian Agent
By /s/ Steve Breslin
-------------------------------------
Name Steve Breslin
Title Associate Director/ Attorney
Address:
1/20 Martin Place
Sydney NSW 2000
Australia
Attention: James Arnold/Steve Breslin
Telecopy: +61 2 9227 1334
Telephone: +61 2 9227 1348 or
+61 2 9227 1219
ANZ CAPEL COURT LIMITED, as Australian
Trustee
By /s/ Kirsten Ludlow
-------------------------------------
Name Kirsten Ludlow
Title Attorney
Address:
Level 2
20 Martin Place
Sydney NSW 2000
Australia
Attention: Kirsten Ludlow
Telecopy: +61 2 9227 1031
Telephone: +61 2 9227 1354
[Signature Page to Credit Agreement]
EXHIBIT A
NOTICE OF PAYMENT REQUEST
[Date]
[Name of Lender]
[Address]
Attention:
Reference is made to the Credit Agreement, dated as of October 7, 2003,
among Penford Corporation, Penford Australia Limited, Penford Holdings Pty.
Limited, the Lenders party thereto, Harris Trust and Savings Bank, as
Administrative Agent and the other parties named therein (the "Credit
Agreement"). Capitalized terms used herein and not defined herein have the
meanings assigned to them in the Credit Agreement.
[The U.S. Borrower has failed to pay Reimbursement Obligation in the
amount of $____________. Your U.S. Revolver Percentage of the unpaid
Reimbursement Obligation is $___________] or [______________________ has been
required to return a payment by the U.S. Borrower of a Reimbursement Obligation
in the amount of $_______________. Your U.S. Revolver Percentage of the returned
Reimbursement Obligation is $_______________.]
Very truly yours,
HARRIS TRUST AND SAVINGS BANK,
as U.S. L/C Issuer
By _____________________________________
Name__________________________________
Title_________________________________
EXHIBIT B
NOTICE OF BORROWING
Date: _________, 20__
To: Harris Trust and Savings Bank, as Administrative Agent for the Lenders
parties to the Credit Agreement dated as of October 7, 2003 (as
extended, renewed, amended or restated from time to time, the "Credit
Agreement"), among Penford Corporation, Penford Australia Limited,
Penford Holdings Pty. Limited, certain Lenders which are signatories
thereto, Harris Trust and Savings Bank, as Administrative Agent, and
the other parties named therein.
Ladies and Gentlemen:
The undersigned refers to the Credit Agreement, the terms defined
therein being used herein as therein defined, and hereby gives you notice
irrevocably, pursuant to Section 1.6 of the Credit Agreement, as applicable, of
the Borrowing specified below:
1. The Business Day of the proposed Borrowing is
___________, ____.
2. The aggregate amount of the proposed Borrowing is
$______________.
3. The Borrowing is being advanced under the [U.S.
REVOLVING] [U.S. TERM] Credit.
4. The Borrowing is to be comprised of $___________ of
[BASE RATE] [EURODOLLAR] Loans.
[5. THE DURATION OF THE INTEREST PERIOD FOR THE
EURODOLLAR LOANS INCLUDED IN THE BORROWING SHALL BE ____________
MONTHS.]
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the proposed Borrowing,
before and after giving effect thereto and to the application of the proceeds
therefrom:
(a) the representations and warranties of the Borrowers
contained in Section 5 of the Credit Agreement are true and correct as
though made on and as of such date (except to the extent such
representations and warranties relate to an earlier date, in which case
they are true and correct as of such date); and
(b) no Default or Event of Default has occurred and is
continuing or would result from such proposed Borrowing.
PENFORD CORPORATION
By______________________________________
Name__________________________________
Title_________________________________
B-2
EXHIBIT C
NOTICE OF CONTINUATION/CONVERSION
Date: ____________, 20__
To: Harris Trust and Savings Bank, as Administrative Agent for the Lenders
parties to the Credit Agreement dated as of October 7, 2003 (as
extended, renewed, amended or restated from time to time, the "Credit
Agreement"), among Penford Corporation, Penford Australia Limited,
Penford Holdings Pty. Limited, certain Lenders which are signatories
thereto, Harris Trust and Savings Bank, as Administrative Agent and the
other parties named therein.
Ladies and Gentlemen:
The undersigned refers to the Credit Agreement, the terms defined
therein being used herein as therein defined, and hereby gives you notice
irrevocably, pursuant to Section 1.6 of the Credit Agreement, as applicable, of
the [CONVERSION] [CONTINUATION] of the Loans specified herein, that:
1. The conversion/continuation Date is __________, ____.
2. The aggregate amount of the [U.S. REVOLVING] [U.S.
TERM] Loans to be [CONVERTED] [CONTINUED] is $______________.
3. The Loans are to be [CONVERTED INTO] [CONTINUED AS]
[EURODOLLAR] [BASE RATE] Loans.
4. [IF APPLICABLE:] The duration of the Interest Period
for the [U.S. REVOLVING] [U.S. TERM] Loans included in the [CONVERSION]
[CONTINUATION] shall be ________ months.
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the proposed conversion/continuation
date, before and after giving effect thereto and to the application of the
proceeds therefrom:
(a) the representations and warranties of the Borrowers
contained in Section 5 of the Credit Agreement are true and correct as
though made on and as of such date (except to the extent such
representations and warranties relate to an earlier date, in which case
they are true and correct as of such date); provided, however, that
this condition shall not apply to the conversion of an outstanding
Eurodollar Loan to a Base Rate Loan; and
(b) no Default or Event of Default has occurred and is
continuing, or would result from such proposed [CONVERSION]
[CONTINUATION].
PENFORD CORPORATION
By _____________________________________
Name__________________________________
Title_________________________________
C-2
EXHIBIT D-1
U.S. TERM NOTE
U.S. $_______________ ____________, 20__
FOR VALUE RECEIVED, the undersigned, PENFORD CORPORATION, a Washington
corporation (the "U.S. Borrower"), hereby promises to pay to the order of
_________________________ (the "U.S. Lender") at the principal office of Harris
Trust and Savings Bank, as Administrative Agent, in Chicago, Illinois, in
immediately available funds, the principal sum of ___________________ Dollars
($__________) or, if less, the aggregate unpaid principal amount of all U.S.
Term Loans made or maintained by the U.S. Lender to the U.S. Borrower pursuant
to the Credit Agreement, in installments in the amounts called for by Section
1.8(a) of the Credit Agreement, commencing on December 31, 2003, together with
interest on the principal amount of such U.S. Term Loan from time to time
outstanding hereunder at the rates, and payable in the manner and on the dates,
specified in the Credit Agreement.
This Note is one of the U.S. Term Notes referred to in the Credit
Agreement dated as of October 7, 2003, among the U.S. Borrower, Penford
Australia Limited, Penford Holdings Pty. Limited, Harris Trust and Savings Bank,
as Administrative Agent, the Lenders party thereto and the other parties named
therein (the "Credit Agreement"), and this Note and the holder hereof are
entitled to all the benefits and security provided for thereby or referred to
therein, to which Credit Agreement reference is hereby made for a statement
thereof. All defined terms used in this Note, except terms otherwise defined
herein, shall have the same meaning as in the Credit Agreement. This Note shall
be governed by and construed in accordance with the internal laws of the State
of Illinois.
Voluntary prepayments may be made hereon, certain prepayments are
required to be made hereon, and this Note may be declared due prior to the
expressed maturity hereof, all in the events, on the terms and in the manner as
provided for in the Credit Agreement.
The U.S. Borrower hereby waives demand, presentment, protest or notice
of any kind hereunder.
PENFORD CORPORATION
By______________________________________
Name__________________________________
Title_________________________________
EXHIBIT D-2
U.S. REVOLVING NOTE
U.S. $_______________ ____________, 20__
FOR VALUE RECEIVED, the undersigned, PENFORD CORPORATION, a Washington
corporation (the "U.S. Borrower"), hereby promises to pay to the order of
____________________ (the "U.S. Lender") on the Revolving Credit Termination
Date of the hereinafter defined Credit Agreement, at the principal office of
Harris Trust and Savings Bank, as Administrative Agent, in Chicago, Illinois, in
immediately available funds, the principal sum of ___________________ Dollars
($__________) or, if less, the aggregate unpaid principal amount of all U.S.
Revolving Loans made by the U.S. Lender to the U.S. Borrower pursuant to the
Credit Agreement, together with interest on the principal amount of each U.S.
Revolving Loan from time to time outstanding hereunder at the rates, and payable
in the manner and on the dates, specified in the Credit Agreement.
This Note is one of the U.S. Revolving Notes referred to in the Credit
Agreement dated as of October 7, 2003, among the U.S. Borrower, Penford
Australia Limited, Penford Holdings Pty. Limited, Harris Trust and Savings Bank,
as Administrative Agent, the Lenders party thereto and the other parties named
therein (the "Credit Agreement"), and this Note and the holder hereof are
entitled to all the benefits and security provided for thereby or referred to
therein, to which Credit Agreement reference is hereby made for a statement
thereof. All defined terms used in this Note, except terms otherwise defined
herein, shall have the same meaning as in the Credit Agreement. This Note shall
be governed by and construed in accordance with the internal laws of the State
of Illinois.
Voluntary prepayments may be made hereon, certain prepayments are
required to be made hereon, and this Note may be declared due prior to the
expressed maturity hereof, all in the events, on the terms and in the manner as
provided for in the Credit Agreement.
The U.S. Borrower hereby waives demand, presentment, protest or notice
of any kind hereunder.
PENFORD CORPORATION
By______________________________________
Name__________________________________
Title_________________________________
EXHIBIT D-3
U.S. SWING NOTE
U.S. $_____________ ____________, 20__
FOR VALUE RECEIVED, the undersigned, PENFORD CORPORATION, a Washington
corporation (the "U.S. Borrower"), hereby promises to pay to the order of
___________________ (the "U.S. Lender") on the Revolving Credit Termination Date
of the hereinafter defined Credit Agreement, at the principal office of Harris
Trust and Savings Bank, as Administrative Agent, in Chicago, Illinois, in
immediately available funds, the principal sum of ________________________
Dollars ($___________) or, if less, the aggregate unpaid principal amount of all
U.S. Swing Loans made by the U.S. Lender to the U.S. Borrower pursuant to the
Credit Agreement, together with interest on the principal amount of each U.S.
Swing Loan from time to time outstanding hereunder at the rates, and payable in
the manner and on the dates, specified in the Credit Agreement.
This Note is the U.S. Swing Note referred to in the Credit Agreement
dated as of October 7, 2003, among the U.S. Borrower, Penford Australia Limited,
Penford Holdings Pty. Limited, the Guarantors party thereto, the Lenders party
thereto, Harris Trust and Savings Bank, as Administrative Agent for the Lenders
and the other parties named therein (the "Credit Agreement"), and this Note and
the holder hereof are entitled to all the benefits and security provided for
thereby or referred to therein, to which Credit Agreement reference is hereby
made for a statement thereof. All defined terms used in this Note, except terms
otherwise defined herein, shall have the same meaning as in the Credit
Agreement. This Note shall be governed by and construed in accordance with the
internal laws of the State of Illinois.
Voluntary prepayments may be made hereon, certain prepayments are
required to be made hereon, and this Note may be declared due prior to the
expressed maturity hereof, all in the events, on the terms and in the manner as
provided for in the Credit Agreement.
The U.S. Borrower hereby waives demand, presentment, protest or notice
of any kind hereunder.
PENFORD CORPORATION
By______________________________________
Name__________________________________
Title_________________________________
EXHIBIT E
PENFORD CORPORATION, PENFORD AUSTRALIA LIMITED AND
PENFORD HOLDINGS PTY. LIMITED
COMPLIANCE CERTIFICATE
To: Harris Trust and Savings Bank, as
Administrative Agent under, and the
Lenders party to, the Credit Agreement
described below
This Compliance Certificate is furnished to the Administrative Agent
and the Lenders pursuant to that certain Credit Agreement dated as of October 7,
2003, among us, Penford Australia Limited, Penford Holdings Pty. Limited, and
the other parties named therein (the "Credit Agreement"). Unless otherwise
defined herein, the terms used in this Compliance Certificate have the meanings
ascribed thereto in the Credit Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected ____________ of Penford Corporation;
2. I have reviewed the terms of the Credit Agreement and I have
made, or have caused to be made under my supervision, a detailed review of the
transactions and conditions of the Borrowers and their Subsidiaries during the
accounting period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose,
and I have no knowledge of, the existence of any condition or the occurrence of
any event which constitutes a Default or Event of Default during or at the end
of the accounting period covered by the attached financial statements or as of
the date of this Compliance Certificate, except as set forth below;
4. The financial statements required by Section 7.5 of the Credit
Agreement and being furnished to you concurrently with this Compliance
Certificate are true, correct and complete as of the date and for the periods
covered thereby; and
5. The Schedule I hereto sets forth financial data and
computations evidencing the Borrowers' compliance with certain covenants of the
Credit Agreement, all of which data and computations are, to the best of my
knowledge, true, complete and correct and have been made in accordance with the
relevant Sections of the Credit Agreement.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrowers have taken, are taking, or propose to
take with respect to each such condition or event:
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this ______ day of
__________________ 20__.
PENFORD CORPORATION, as agent on behalf
of the Borrowers
By______________________________________
Name__________________________________
Title_________________________________
E-2
SCHEDULE I
TO COMPLIANCE CERTIFICATE
PENFORD CORPORATION, PENFORD AUSTRALIA LIMITED AND
PENFORD HOLDINGS PTY. LIMITED
COMPLIANCE CALCULATIONS
FOR CREDIT AGREEMENT DATED AS OF OCTOBER 7, 2003
CALCULATIONS AS OF _____________, 20___
A. Total Senior Funded Debt to EBITDA
1. Total Funded Debt $___________
2. Subordinated Debt $___________
3. Line A1 minus A2 (Total Senior Funded Debt) $___________
4. Net Income for past 4 quarters $___________
5. Interest Expense for past 4 quarters $___________
6. Income taxes for past 4 quarters $___________
7. Depreciation and Amortization Expense for past 4 quarters $___________
8. Non-cash Loss (Gain) realized on sale/disposition of assets [Loss shall $___________
be identified by a positive number; Gains shall be identified by a
negative number]
9. Sum of Lines A4, A5, A6, A7 and A8 ("EBITDA") $___________
10. Ratio of Line A3 to A9 ____:1.0
11. Line A10 ratio must not exceed ____:1.0
12. The Borrowers are in compliance (circle yes or no) yes/no
B. Total Funded Debt Ratio (Section 7.22(a))
1. Total Funded Debt (Line A1 above) $___________
2. EBITDA (Line A9 above) $___________
3. Ratio of Line B1 to B2 ____:1.0
4. Line B3 ratio must not exceed ____:1.0
5. The Borrowers are in compliance (circle yes or no) yes/no
C. Fixed Charge Coverage Ratio (Section 7.22(b))
1. EBITDA (Line A9 above) $___________
2. Scheduled principal payments due within next 4 quarters $___________
3. Interest Expense for past 4 quarters paid in cash $___________
4. Restricted Payments for past 4 quarters made in cash $___________
5. Income taxes for 4 quarters paid in cash $___________
6. Sum of Lines C2, C3, C4, and C5 $___________
7. Ratio of Line C1 to Line C6 ____:1.0
8. Line C7 ratio must not be less than ____:1.0
9. The Borrowers are in compliance (circle yes or no) yes/no
D. Leverage Ratio (Section 7.22(c))
1. Total Funded Debt (Line A1 above) $___________
2. Net Worth $___________
3. Ratio of Line D1 to the sum of Line D1 and D2 ____:1.0
4. Line D3 ratio must not be less than ____:1.0
5. The Borrowers are in compliance (circle yes or no) yes/no
E. Capital Expenditures (Section 7.22(d))
1. Year-to-date Capital Expenditures $___________
2. Maximum permitted amount $___________
3. The Borrowers are in compliance (circle yes or no) yes/no
F. Australian Outstandings
1. Revolving loans under the Australian Credit Agreement $___________
2. Acceptances under the Australian Credit Agreement
3. Letters of credit under the relevant Australian Credit Agreement $___________
4. Term loans under the Australian Credit Agreement $___________
-2-
EXHIBIT F
ADDITIONAL GUARANTOR SUPPLEMENT
______________, 20__
Harris Trust and Savings Bank, as Administrative
Agent for the Lenders named in the Credit
Agreement dated as of October 7, 2003, among
Penford Corporation, Penford Australia Limited,
Penford Holdings Pty. Limited, as the Borrowers,
the Guarantors referred to therein, the Lenders
from time to time party thereto, the Administrative
Agent and the other parties named therein (the
"Credit Agreement")
Ladies and Gentlemen:
Reference is made to the Credit Agreement described above. Terms not
defined herein which are defined in the Credit Agreement shall have for the
purposes hereof the meaning provided therein.
The undersigned, [NAME OF SUBSIDIARY GUARANTOR], a [JURISDICTION OF
INCORPORATION OR ORGANIZATION] hereby elects to be a "Guarantor" for all
purposes of the Credit Agreement, effective from the date hereof. The
undersigned confirms that the representations and warranties set forth in
Section 5 of the Credit Agreement are true and correct as to the undersigned as
of the date hereof and the undersigned shall comply with each of the covenants
set forth in Section 7 of the Credit Agreement applicable to it.
Without limiting the generality of the foregoing, the undersigned
hereby agrees to perform all the obligations of a Guarantor under, and to be
bound in all respects by the terms of, the Credit Agreement, including without
limitation Section 11 thereof, to the same extent and with the same force and
effect as if the undersigned were a signatory party thereto.
The undersigned acknowledges that this Agreement shall be effective
upon its execution and delivery by the undersigned to the Administrative Agent,
and it shall not be necessary for the Administrative Agent or any Lender, or any
of their Affiliates entitled to the benefits hereof, to execute this Agreement
or any other acceptance hereof. This Agreement shall be construed in accordance
with and governed by the internal laws of the State of Illinois.
Very truly yours,
[NAME OF SUBSIDIARY GUARANTOR]
By _______________________________
Name____________________________
Title___________________________
EXHIBIT G
ASSIGNMENT AND ACCEPTANCE
Dated _____________, 20__
Reference is made to the Credit Agreement dated as of October 7, 2003
(the "Credit Agreement") among PENFORD CORPORATION, PENFORD AUSTRALIA LIMITED,
PENFORD HOLDINGS PTY. LIMITED, the Lenders (as defined in the Credit Agreement),
Harris Trust and Savings Bank, as Administrative Agent for the Lenders (the
"Administrative Agent") and the other parties named therein. Terms defined in
the Credit Agreement are used herein with the same meaning.
______________________________________________________ (the "Assignor")
and _________________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the
Assignee, and the Assignee hereby purchases and assumes from the
Assignor, a _______% interest in and to all of the Assignor's rights
and obligations under the Credit Agreement as of the Effective Date (as
defined below), including, without limitation, such percentage interest
in the Assignor's Commitments as in effect on the Effective Date and
the Loans, if any, owing to the Assignor on the Effective Date and the
Assignor's Percentage of any outstanding U.S. L/C Obligations.
2. The Assignor (i) represents and warrants that as of
the date hereof (A) its U.S. Revolving Credit Commitment is
$_______________ and its U.S. Term Loan Commitment is $__________, (B)
the aggregate outstanding U.S. Dollar Equivalent principal amount of
Loans made by it under the Credit Agreement that have not been repaid
is $___________ ($____________ of U.S. Revolving Loans and $__________
of U.S. Term Loans), and a description of the interest rates and
interest periods of such Loans is attached as Annex 1 hereto, and (C)
the aggregate principal amount of Assignor's Percentage of outstanding
U.S. L/C Obligations is $___________; (ii) represents and warrants that
it is the legal and beneficial owner of the interest being assigned by
it hereunder and that such interest is free and clear of any adverse
claim, lien, or encumbrance of any kind; (iii) makes no representation
or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with
the Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant
thereto; and (iv) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Borrower
or its Subsidiary or the performance or observance by any Borrower or
its Subsidiary of any of their respective obligations under the Credit
Agreement or any other instrument or document furnished pursuant
thereto.
3. The Assignee (i) confirms that it has received a copy
of the Credit Agreement, together with copies of the most recent
financial statements delivered to the
Lenders pursuant to Section 7.5(a) and (b) thereof and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and
Acceptance; (ii) agrees that it will, independently and without
reliance upon the Administrative Agent, the Assignor or any other
Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement; (iii) appoints
and authorizes the Administrative Agent to take such action as
Administrative Agent on its behalf and to exercise such powers under
the Credit Agreement and the other Loan Documents as are delegated to
the Administrative Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (iv) agrees that it will
perform in accordance with their terms all of the obligations which by
the terms of the Credit Agreement are required to be performed by it as
a Lender; and (v) specifies as its lending office (and address for
notices) the offices set forth beneath its name on the signature pages
hereof.
4. As consideration for the assignment and sale
contemplated in Annex 1 hereof, the Assignee shall pay to the Assignor
on the Effective Date in Federal funds an amount agreed upon by the
Assignor and the Assignee. It is understood that commitment and/or
letter of credit fees accrued to the Effective Date with respect to the
interest assigned hereby are for the account of the Assignor and such
fees accruing from and including the date hereof are for the account of
the Assignee. Each of the Assignor and the Assignee hereby agrees that
if it receives any amount under the Credit Agreement which is for the
account of the other party hereto, it shall receive the same for the
account of such other party to the extent of such other party's
interest therein and shall promptly pay the same to such other party.
5. The effective date for this Assignment and Acceptance
shall be ___________, (the "Effective Date"). Following the execution
of this Assignment and Acceptance, it will be delivered to the
Administrative Agent for acceptance and recording by the Administrative
Agent and, if required, the relevant Borrower.
6. Upon such acceptance and recording, as of the
Effective Date, (i) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and
(ii) the Assignor shall, to the extent provided in this Assignment and
Acceptance, relinquish its rights and be released from its obligations
under the Credit Agreement.
7. Upon such acceptance and recording, from and after
the Effective Date, the Administrative Agent shall make all payments
under the Credit Agreement in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and
commitment fees with respect thereto) to the Assignee. The Assignor and
Assignee shall make all appropriate adjustments in payments under the
Credit Agreement for periods prior to the Effective Date directly
between themselves.
8. In accordance with Section 12.12 of the Credit
Agreement, the Assignor and the Assignee request and direct that the
Administrative Agent prepare and cause the
G-2
relevant Borrower to execute and deliver to the Assignee the relevant
Notes payable to the Assignee in the amount of its Commitments and new
Notes to the Assignor in the amount of its Commitments after giving
effect to this assignment.
9. This Assignment and Acceptance shall be governed by,
and construed in accordance with, the laws of the State of Illinois.
[Assignor Lender]
By __________________________________
Name_______________________________
Title______________________________
[Assignee Lender]
By __________________________________
Name_______________________________
Title______________________________
Lending office (and address for notices):
Accepted and consented this
____ day of _________, 20__
PENFORD CORPORATION, as agent
on behalf of the Borrowers
By____________________________________
Name_______________________________
Title______________________________
Accepted and consented to by the
Administrative Agent this
____ day of _________, 20__
HARRIS TRUST AND SAVINGS BANK,
as Administrative Agent
By____________________________________
Name_______________________________
Title______________________________
G-3
EXHIBIT H
U.S. BORROWER'S OPINION OF COUNSEL
EXHIBIT I
OPINION OF AUSTRALIAN COUNSEL
SCHEDULE 1
COMMITMENTS
U.S. REVOLVING U.S. SWING
U.S. TERM LOAN CREDIT LINE
NAME OF LENDER COMMITMENT COMMITMENT COMMITMENT
Harris Trust and Savings $ 12,500,000 $ 12,500,000 $5,000,000
Bank
Wells Fargo Bank, N.A. $ 8,750,000 $ 8,750,000 $ 0
U.S. Bank National $ 6,250,000 $ 6,250,000 $ 0
Association
LaSalle Bank National $ 6,250,000 $ 6,250,000 $ 0
Association
Rabobank Nederland $ 6,250,000 $ 6,250,000 $ 0
TOTAL $ 40,000,000 $ 40,000,000 $5,000,000
SCHEDULE 6.2
SUBSIDIARIES
JURISDICTION OF PERCENTAGE
NAME ORGANIZATION OWNERSHIP OWNER
1. Penford Products Co. Delaware 100% U.S. Borrower
2. Penford Holdings Pty. Ltd. New South Wales, 100% U.S. Borrower
Australia
3. Penford Australia Limited New South Wales, 100% Penford Holdings Pty. Ltd.
Australia
4. Penford New Zealand Limited New Zealand 100% Penford Australia Limited
5. Penford Export Corporation U.S. Virgin Islands 100% U.S. Borrower
SCHEDULE 7.9
EXISTING INVESTMENTS
Eoscene Corporation
Plantic Technologies, Ltd.