AG SERVICES OF AMERICA, INC.
EXHIBIT 10.18
AMENDED AND RESTATED LOAN AGREEMENT
DATED MARCH 12, 1997
-23-
THIRD AMENDED AND RESTATED LOAN AGREEMENT
By and Among
AG SERVICES OF AMERICA, INC.
as Borrower
and
THE FINANCIAL INSTITUTIONS
FROM TIME TO TIME
PARTIES HERETO
as the Banks
and
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.
"Rabobank Nederland", New York Branch,
as Administrative Agent for the Banks and as Collateral Agent
Dated as of March 12, 1997
________________________________________
TABLE OF CONTENTS
Section
Page
ARTICLE I DEFINITIONS. . . . . . . . . . . . . . . . . . . . . .1
Section 1.01 Accounting Principles. . . . . . . . . . . . . . .1
Section 1.02 Defined Terms. . . . . . . . . . . . . . . . . . .2
ARTICLE II AMOUNT AND TERMS OF LINE OF CREDIT . . . . . . . . 17
Section 2.01 Line of Credit Facility. . . . . . . . . . . . . 17
Section 2.02 Line of Credit Note. . . . . . . . . . . . . . . 18
Section 2.03 Principal. . . . . . . . . . . . . . . . . . . . 18
Section 2.04 Interest . . . . . . . . . . . . . . . . . . . . 19
Section 2.05 Notice of Advance Requests . . . . . . . . . . . 20
Section 2.06 Advances . . . . . . . . . . . . . . . . . . . . 21
Section 2.07 Use of Proceeds. . . . . . . . . . . . . . . . . 22
Section 2.08 Line of Credit Facility Fee. . . . . . . . . . . 22
Section 2.09 Calculation of Interest; Maximum Lawful Rates. . 22
Section 2.10 Notice of Changes in Base Rate . . . . . . . . . 22
Section 2.11 Funding and Disbursements. . . . . . . . . . . . 23
Section 2.12 Payments . . . . . . . . . . . . . . . . . . . . 23
Section 2.13 Application of Payments. . . . . . . . . . . . . 24
Section 2.14 Non-Receipt of Funds by Administrative Agent . . 24
Section 2.15 Increased Cost . . . . . . . . . . . . . . . . . 25
Section 2.16 Risk-Based Capital . . . . . . . . . . . . . . . 26
Section 2.17 Funding Loss Indemnification . . . . . . . . . . 26
Section 2.18 Survival . . . . . . . . . . . . . . . . . . . . 27
Section 2.19 Pro Rata Treatment . . . . . . . . . . . . . . . 27
ARTICLE III COLLATERAL . . . . . . . . . . . . . . . . . . . . 27
Section 3.01 Security Interests . . . . . . . . . . . . . . . 27
Section 3.02 Security Agreement; Collateral Documents . . . . 28
Section 3.03 Collateral Defined; Priority. . . . . . . . . . . 29
Section 3.04 Customer Loans and Security Interests and Liens Securing Customer
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 3.05 Custodian. . . . . . . . . . . . . . . . . . . . 29
Section 3.06 Release of Lien Upon Sale or Contribution of Acquired Customer
Advance . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 3.07 Collateral Monitoring and Audits. . . . . . . . . 30
ARTICLE IV REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . 31
Section 4.01 Corporate Existence. . . . . . . . . . . . . . . 31
Section 4.02 Corporate Powers and Authorization . . . . . . . 31
Section 4.03 Other Agreements; Defaults . . . . . . . . . . . 31
Section 4.04 Financial Statements . . . . . . . . . . . . . . 31
Section 4.05 Financial Condition. . . . . . . . . . . . . . . 32
Section 4.06 Properties and Assets. . . . . . . . . . . . . . 32
Section 4.07 Actions and Proceedings. . . . . . . . . . . . . 32
Section 4.08 Tax Returns and Taxes. . . . . . . . . . . . . . 32
Section 4.09 Assumed Names. . . . . . . . . . . . . . . . . . 32
Section 4.10 No Defaults. . . . . . . . . . . . . . . . . . . 33
Section 4.11 Compliance with Laws . . . . . . . . . . . . . . 33
Section 4.12 No Misrepresentation . . . . . . . . . . . . . . 33
Section 4.13 Legally Enforceable Loan Documents . . . . . . . 33
Section 4.14 Subsidiaries . . . . . . . . . . . . . . . . . . 33
Section 4.15 Hazardous Waste and Toxic Substance Storage. . . 33
Section 4.16 Use of Property. . . . . . . . . . . . . . . . . 33
Section 4.17 Licenses and Permits . . . . . . . . . . . . . . 33
Section 4.18 Borrower's Chief Executive Office. . . . . . . . 34
Section 4.19 Ownership of Collateral. . . . . . . . . . . . . 34
Section 4.20 Liens Under Collateral Documents . . . . . . . . 34
Section 4.21 Casualties Affecting Business or Property. . . . 34
Section 4.22 ERISA. . . . . . . . . . . . . . . . . . . . . . 34
Section 4.23 Use of Loan Proceeds . . . . . . . . . . . . . . 35
Section 4.24 Consents . . . . . . . . . . . . . . . . . . . . 35
Section 4.25 Borrowing Base . . . . . . . . . . . . . . . . . 35
ARTICLE V [INTENTIONALLY OMITTED]. . . . . . . . . . . . . . . 35
ARTICLE VI CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . 35
Section 6.01 Conditions Precedent to Initial Advances . . . . 35
Section 6.02 Conditions Precedent to All Advances . . . . . . 38
Section 6.03 Waiver of Conditions Precedent . . . . . . . . . 39
ARTICLE VII AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . 40
Section 7.01 Corporate Existence. . . . . . . . . . . . . . . 40
Section 7.02 Insurance. . . . . . . . . . . . . . . . . . . . 40
Section 7.03 Reporting Requirements . . . . . . . . . . . . . 40
Section 7.04 Taxes and Claims . . . . . . . . . . . . . . . . 41
Section 7.05 Accounts Receivable; Inventory Sales . . . . . . 41
Section 7.06 Maintenance of Property. . . . . . . . . . . . . 41
Section 7.07 Books and Records; Inspections and Examinations. 41
Section 7.08 Environmental. . . . . . . . . . . . . . . . . . 42
Section 7.09 Compliance with Laws . . . . . . . . . . . . . . 42
ARTICLE VIII NEGATIVE COVENANTS OF BORROWER. . . . . . . . . . 42
Section 8.01 Indebtedness . . . . . . . . . . . . . . . . . . 42
Section 8.02 Liens. . . . . . . . . . . . . . . . . . . . . . 43
Section 8.03 Guarantees and Indemnification . . . . . . . . . 43
Section 8.04 Subsidiaries and Affiliates. . . . . . . . . . . 44
Section 8.05 Mergers and Consolidations . . . . . . . . . . . 44
Section 8.06 Investments and Advances . . . . . . . . . . . . 44
Section 8.07 [Intentionally Omitted.] . . . . . . . . . . . . 44
Section 8.08 Misstatements or Omissions . . . . . . . . . . . 44
Section 8.09 Transactions with Affiliates . . . . . . . . . . 45
Section 8.10 Loans, Advances, Compensation and Fees . . . . . 45
Section 8.11 Accounting Principles; Fiscal Year; Tax Year . . 45
Section 8.12 Sale of Assets . . . . . . . . . . . . . . . . . 45
Section 8.13 Payments on Indebtedness . . . . . . . . . . . . 45
Section 8.14 ERISA Compliance . . . . . . . . . . . . . . . . 45
Section 8.15 Nature of Business . . . . . . . . . . . . . . . 46
Section 8.16 Prepayment of Subordinated Indebtedness. . . . . 46
ARTICLE IX [INTENTIONALLY OMITTED] . . . . . . . . . . . . . . 46
ARTICLE X EVENTS OF DEFAULT; RIGHTS AND REMEDIES . . . . . . . 46
Section 10.01 Events of Default. . . . . . . . . . . . . . . . 46
Section 10.02 Rights and Remedies. . . . . . . . . . . . . . . 49
ARTICLE XI EXPENSES AND COSTS. . . . . . . . . . . . . . . . . 51
ARTICLE XII THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT AND
THE CUSTODIAN; AND INTERCREDITOR PROVISIONS . . . . . . . 51
Section 12.01 Appointment and Authorization. . . . . . . . . . 51
Section 12.02 Administrative Agent and Collateral Agent. . . . 52
Section 12.03 Action by Administrative Agent, Collateral Agent and52
Section 12.04 Consultation with Experts. . . . . . . . . . . . 52
Section 12.05 Liability of Administrative Agent, Collateral Agent and
Custodian 53
Section 12.06 Indemnification. . . . . . . . . . . . . . . . . 53
Section 12.07 Reimbursement from Payments. . . . . . . . . . . 54
Section 12.08 Sharing of Loan Payments . . . . . . . . . . . . 54
Section 12.09 Resignation of Administrative Agent, Collateral Agent or54
Section 12.10 Right of Purchase. . . . . . . . . . . . . . . . 55
Section 12.11 [Intentionally Omitted.] . . . . . . . . . . . . 56
Section 12.12 Withholding Tax. . . . . . . . . . . . . . . . . 56
Section 12.13 Borrowers Not a Beneficiary. . . . . . . . . . . 56
Section 12.14 Survival of Provisions . . . . . . . . . . . . . 56
Section 12.15 Defaults . . . . . . . . . . . . . . . . . . . . 57
ARTICLE XIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . 57
Section 13.01 Section Headings . . . . . . . . . . . . . . . . 57
Section 13.02 Notices. . . . . . . . . . . . . . . . . . . . . 57
Section 13.03 Survival of Covenants and Representations. . . . 57
Section 13.04 Governing Law; Consent to Jurisdiction; Jury Trial Waiver58
Section 13.05 Waivers; Amendments; and Releases. . . . . . . . 58
Section 13.06 Entire Agreement . . . . . . . . . . . . . . . . 60
Section 13.07 Amendments to Prior Loan Agreement . . . . . . . 60
Section 13.08 Counterparts . . . . . . . . . . . . . . . . . . 60
Section 13.09 Contact with Borrower's Independent Accountants. 60
Section 13.10 Severability; Rights Cumulative. . . . . . . . . 60
Section 13.11 Usury Savings Clause . . . . . . . . . . . . . . 60
Section 13.12 Indemnification by Borrower. . . . . . . . . . . 61
Section 13.13 Independent Credit Decisions . . . . . . . . . . 61
Section 13.14 Sale or Assignment; Addition of Banks. . . . . . 61
Section 13.15 Participations . . . . . . . . . . . . . . . . . 63
Section 13.16 Confidentiality. . . . . . . . . . . . . . . . . 64
Section 13.17 Acknowledgment of Receipt. . . . . . . . . . . . 64
THIRD AMENDED AND RESTATED LOAN AGREEMENT
THIS THIRD AMENDED AND RESTATED LOAN AGREEMENT is entered into
as of March 12, 1997, (the "Loan Agreement") by and among AG SERVICES OF
AMERICA, INC., an Iowa corporation (the "Borrower"); THE FINANCIAL
INSTITUTIONS parties hereto from time to time as lenders (each, a Bank and
collectively, the Banks), and COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "Rabobank Nederland", New York Branch ("Rabobank"), as
agent for the Banks hereunder (in such capacity, the Administrative Agent)
R E C I T A L S:
The Borrower, Rabobank and other financial institutions entered into a Second
Amended and Restated Loan Agreement, dated as of April 15, 1996 (as amended from
time to time, the Prior Loan Agreement). The Borrower has agreed to sell
certain Customer Advances to Ag Acceptance Corporation pursuant to a Asset
Securitization Purchase and Contribution Agreement, dated as of March 12, 1997,
and intends to use the proceeds to pay in full the Borrowers indebtedness
currently outstanding under the Prior Loan Agreement. In connection with the
sale of Customer Advances and the payment of its indebtedness under the Prior
Loan Agreement, the Borrower desires to reduce the aggregate commitments under
the Prior Loan Agreement and to modify and amend the terms and conditions of the
credit facilities under the Prior Loan Agreement. This Loan Agreement is to be
substituted for the Prior Loan Agreement so that on and after the date hereof
the terms and conditions of this Loan Agreement shall govern the credit
facilities initially established under the Prior Loan Agreement and all
credit facilities to be established in favor of, and all credit facilities to be
extended to, the Borrower by the Banks. Without limiting the generality of the
foregoing, the Prior Loan Agreement is amended hereby to decrease the line of
credit facility thereunder to an aggregate maximum amount of $8,500,000.00.
Accordingly, upon satisfaction of the conditions precedent to effectiveness
set forth herein, the Prior Loan Agreement, shall be amended and as so
amended shall be restated in their entirety to read as herein provided.
NOW, THEREFORE, in consideration of the above premises and other good and
valuable consideration, the sum and sufficiency of which is hereby acknowledged,
the parties hereto mutually agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Accounting Principles. Except as otherwise stated herein,
all accounting terms not specifically defined herein shall be construed in
accordance with generally accepted accounting principles in effect in the
United States of America from the date hereof, applied on a consistent basis.
Whenever the character or amount of any asset or liability or item of income
or expense is required to be determined, or any other accounting computation
is required to be made, for purposes of this Loan Agreement and any
Exhibit hereto, such determination or calculation shall, to the extent
applicable and except as otherwise specified in this Loan Agreement or such
Exhibit, be made in accordance with generally accepted accounting principles
in effect in the United States of America from the date hereof, applied on a
consistent basis.
Section 1.02 Defined Terms. In addition to any other terms defined
elsewhere herein, for purposes hereof, the following terms shall have the
following meanings (terms defined in the singular to have the same meaning
when used in the plural and vice versa):
"Acceleration" shall mean the declaration of all Indebtedness of the
Borrower hereunder to be immediately due and payable following an Event
of Default in accordance with the provisions of Section 10.02(b) hereof.
"Accumulated Funding Deficiencies" shall mean an "accumulated funding
deficiency" as set forth in Section 412(a) of the Code.
"Acquired Customer Advance" shall mean any Customer Advance (or portion
thereof) contributed by the Borrower to the capital of Ag Acceptance
pursuant to the Asset Securitization Purchase and Contribution Agreement
or purchased from the Borrower pursuant to the Asset Securitization
Purchase and Contribution Agreement.
"Additional Costs" shall have the meaning attributed to it in Section 2.15
hereof.
"Adjustment Date" shall have the meaning attributed it in Section 13.14
hereof.
"Administrative Agent" shall mean Rabobank in its capacity as agent for
the Banks hereunder.
"Advance" shall mean a group of Line of Credit Loans of a single Type made
by the Banks on a single date and as to which a single Interest Period
is in effect.
"Affiliate" means any Person (a) which directly or indirectly controls,
or is controlled by, or is under common control with, the Borrower or a
Subsidiary of the Borrower; (b) which directly or indirectly
beneficially owns or holds seven percent (7%) or more of any class of
voting stock of the Borrower or any Subsidiary of the Borrower; or
(c) seven percent (7%) or more of the voting stock of which is directly
or indirectly beneficially owned or held by the Borrower or a
Subsidiary of the Borrower.
Ag Acceptance shall mean Ag Acceptance Corporation, a Delaware
corporation and the purchaser under the Asset Securitization Purchase and
Contribution Agreement and the borrower under the Asset Securitization
Credit Agreement.
"Applicable Percentage" shall mean, as to any Bank as of any date of
determination, the percentage equivalent (expressed as a decimal, rounded
to the ninth decimal place) as of such date of such Bank's Line of Credit
Commitment divided by the Total Line of Credit Commitment as of such date.
"Applicant" shall have the meaning attributed in Section 13.14 hereof.
"Asset Securitization Custodial Agreement" shall mean the Custodial
Agreement, dated as of March 12, 1997, by and among the Borrower, Ag
Acceptance, CapMAC, Triple-A and Norwest Trust, as the same may be
amended, supplemented or otherwise modified from time to time with and
subject to the prior approval and consent of the Administrative Agent and
the Majority Banks.
"Asset Securitization Credit Agreement" shall mean the Credit Agreement,
dated as of March 12, 1997, by and among Ag Acceptance, the Borrower,
Triple-A, CapMAC and CFS, as the same may be amended, supplemented or
otherwise modified from time to time with and subject to the prior approval
and consent of the Administrative Agent and the Majority Banks.
"Asset Securitization Documents" shall mean the Asset Securitization Credit
Agreement, the Asset Securitization Purchase and Contribution Agreement,
the Asset Securitization Custodial Agreement, the Asset Securitization
Liquidity Security Agreement, the Asset Securitization Liquidity Agreement
and the Asset Securitization Insurance Agreement.
"Asset Securitization Insurance Agreement" shall mean the Insurance
Agreement, dated as of March 12, 1997, by and among CapMAC, CapMAC
in its capacity as Collateral Agent under the Asset Securitization Credit
Agreement, CFS, in its capacity as administrative agent under the Asset
Securitization Credit Agreement, Triple-A and Rabobank, in its capacity as
liquidity agent under the Asset Securitization Liquidity Agreement, as the
same may be amended, supplemented or otherwise modified from time to
time with and subject to the prior approval and consent of the
Administrative Agent and the Majority Banks.
Asset Securitization Liquidity Collateral Agent shall mean Rabobank in its
capacity as liquidity collateral agent under the Asset Securitization
Liquidity Security Agreement.
Asset Securitization Liquidity Agreement shall mean the Liquidity
Agreement, dated as of March 12, 1997, by and among Triple-A, the
Liquidity Banks and Rabobank as the liquidity agent thereunder, as the same
may be amended, supplemented or otherwise modified from time to time with
and subject to the prior approval and consent of the Administrative
Agent and the Majority Banks.
"Asset Securitization Liquidity Security Agreement" shall mean the
Liquidity Security Agreement, dated as of March 12, 1997, by and among
Triple-A, CapMac and Rabobank as liquidity agent and as liquidity
collateral agent thereunder, as the same may be amended, supplemented or
otherwise modified from time to time with and subject to the prior
approval and consent of the Administrative Agent and the Majority Banks.
"Asset Securitization Purchase and Contribution Agreement" shall mean the
Asset Securitization Purchase and Contribution Agreement, dated as of March
12, 1997, by and among Ag Acceptance and the Borrower, as the same may
be amended, supplemented or otherwise modified from time to time with and
subject to the prior approval and consent of the Administrative Agent
and the Majority Banks.
"Assignment Certificate" shall have the meaning attributed to it in Section
13.14 hereof.
"Base Rate" shall mean the rate of interest equal to prime rate
announced by Rabobank in New York, New York from time to time as its
prime base or reference rate, whether or not such rate is the lowest
rate offered by Rabobank to its borrowers.
"Base Rate Loan" shall mean any Line of Credit Loan bearing interest at a
rate determined by reference to the Base Rate.
"Borrowing Base" shall have the meaning attributed to it in the Asset
Securitization Credit Agreement.
"Borrowing Base Certificate" shall mean a report substantially in the form
of Exhibit E to the Asset Securitization Credit Agreement.
"Borrowing Base Deficit" shall mean, at any time, the amount, if any, by
which the then outstanding principal amount of the Loan exceeds the Line of
Credit Borrowing Base then in effect.
"Borrowing Date" shall mean each Business Day selected by the Borrower as
the date on which it will obtain an Advance.
"Business Day(s)" shall mean any day on which each Bank's commercial
lending department is open for business and, in addition, if any
determination of a "Business Day" shall relate to a Fixed Rate Loan or
the determination of the LIBO Rate, a day on which dealings in U.S.
dollar deposits are carried on in the London interbank Eurodollar market.
"Capitalized Leases" shall mean all leases which have been or should be
capitalized on the books of the Borrower in accordance with generally
accepted accounting principles consistently applied.
"CapMAC" shall mean Capital Markets Assurance Corporation, a New York
stock insurance company.
"CFS" shall mean CapMAC Financial Services, Inc.
"Change in Control" shall happen or occur either: (a) when more than 82.0%
of the Borrower's outstanding voting stock is owned or Controlled in the
aggregate by any Person or Persons who are not members of the Management
Group or (b) immediately upon transfer (whether by gift, sale, exchange,
will, intestate succession or otherwise or in connection with or
pursuant to a dissolution of marriage) in one or more transfers of more
than 82.0% in the aggregate of the Borrower's outstanding voting stock
to any Person or Persons who are not members of the Management Group.
"Classification Report" shall have the meaning attributed to it in Section
7.03(d) hereof.
"Clean-Down Period" shall mean the period in each calendar year beginning
on June 1 and ending on the next succeeding August 31 or the Maturity Date.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.
"Collateral" shall have the meaning attributed to it in Section 3.03
hereof.
"Collateral Agent" shall mean the Person serving as the collateral agent
under the Security Agreement.
"Collateral Documents" shall mean the Security Agreement, the Financing
Statements, the Prior Financing Statements, the Custodial Agreement,
each as amended, modified or restated from time to time in accordance
with the provisions thereof; and all other documents, instruments and
agreements which a Bank deems reasonably necessary to vest or fully
perfect the Liens in the Collateral.
"Commitment" shall mean each Bank's obligation to make Line of Credit
Loans to the Borrower hereunder.
"Compliance Certificate" shall have the meaning attributed to it in Section
7.03(e) hereof.
Consolidated EBT shall have the meaning attributed to it in the Asset
Securitization Credit Agreement.
Consolidated Net Income shall have the meaning attributed to it in the
Asset Securitization Credit Agreement.
Consolidated Net Worth shall have the meaning attributed to it in the
Asset Securitization Credit Agreement.
Consolidated Pre-Tax Income shall have the meaning attributed to it in the
Asset Securitization Credit Agreement.
"Control" or "Controlled By" shall mean the possession, direct or indirect,
of the power to direct or cause the direction of the management and
policies of the Person, whether through the ownership of voting
securities, by contract or otherwise.
"Credit Agreement" shall have the meaning attributed to it in Recital A
hereof.
"Credit Policy" shall mean the Ag Services Credit and Collection Policy
attached hereto as Exhibit A.
"Crop Insurance" shall mean all of a Customer's right and interest in any
indemnity payments payable to such Customer under such Customer's crop-
hail insurance or multiple peril crop insurance issued either directly
through the Federal Crop Insurance Corporation or private insurance
companies participating in the Federal Crop Insurance Program.
"Custodial Agreement" shall mean the Custodial Agreement in the form of
Exhibit B attached hereto by and among the Borrower, the Collateral Agent
and the Custodian which shall amend and restate the Prior Custodial
Agreement.
"Custodian" shall mean Norwest Bank Iowa, National Association, or a
successor as custodian under the Custodial Agreement.
"Customer" shall mean, with respect to each Customer Loan, the borrower(s)
or the account debtor(s) obligated to make payments in respect of the
advances arising under such Customer Loan.
"Customer Advance" shall mean an advance made to a Customer in respect of
a Customer Loan, together with interest accrued thereon and owing under the
related Customer Loan Documents and the right arising under such Customer
Loan Documents to receive any payment or any funds from or on behalf of
such Customer, whether or not earned by performance, whether constituting
an account, chattel paper, instrument, general intangibles or otherwise.
"Customer Collateral" shall mean the collateral and Property in which a
Lien has been granted, or which has been assigned, to the Borrower to
secure payment of a Customer Loan or other Indebtedness owed to the
Borrower by a Customer, including, without limitation (a) all of the
Borrower's right, title and interest in and to the payments to be made
by the Customer and any other rights which are assignable under the
related Customer Loan Documents, (b) all security interests or liens and
property subject thereto from time to time purporting to secure payment
of such Customer Loan, whether pursuant to the Customer Loan Documents
related to such Customer Loan or otherwise, including, without
limitation, all interest in Crop Insurance with respect to such
property, (c) all Records, (d) guaranties and other agreements or
arrangements of whatever character from time to time supporting or securing
payment of such Customer Loan whether pursuant to the Customer Loan
Documents related to such Customer Loan or otherwise, and (e) all rights
under warranties, indemnities, insurance with respect to the Customer
Loans, the related Customer Loan Documents or other Customer Collateral
described above.
"Customer Financing Statement" shall mean each financing statement naming
the Borrower as secured party and the Customer as debtor filed with each
state or county Governmental Body at which a financing statement must be
filed in order to perfect a Lien in any Customer Collateral.
"Customer Loan" shall mean each advance or loan receivable arising from the
extension of credit by the Borrower to a borrower or account debtor in the
ordinary course of the Borrower's business other than a loan which has been
sold to Ag Acceptance pursuant to the Asset Securitization Purchase and
Contribution Agreement and not reacquired by the Borrower.
"Customer Loan Documents" shall mean, with respect to any Customer Loan,
the related Customer Note, the Customer Security Agreement, the related
Customer Financing Statements, and any related loan agreement, mortgage,
assignment of indemnity, financing statement or other documents,
instruments, certificates or assignments (including amendments or
modifications thereof) executed by the Customers thereof or by another
Person on the Customer's behalf in respect of such Customer Loan,
including, without limitation, general or limited guaranties.
"Customer Note" shall mean a promissory note payable to the order of the
Borrower executed by a Customer which evidences a Customer Loan made to
such Customer.
"Customer Security Agreement" shall mean an agricultural security agreement
in form and content previously approved by the Administrative Agent
executed by a Customer in favor of the Borrower.
"Default" shall mean an Event of Default or any event which with the giving
of notice, the passage of time, or both would constitute an Event of
Default.
"Default Fee" shall have the meaning attributed to it in Section 2.20
hereof.
"Default Rate" shall mean the per annum rate of interest equal to the Base
Rate plus five percent (5.0%).
"Default Ratio" shall have the meaning attributed to it in the Asset
Securitization Credit Agreement.
"Effective Date" shall mean the date upon which all of the conditions
precedent set forth in Section 6.01 hereof shall have been fulfilled.
"Eligible Advance" shall have the meaning attributed to it in the Asset
Securitization Credit Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules, regulations and rulings issued thereunder, as from
time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
which together with the Borrower would be treated as a single employer
under Section 414 of the Internal Revenue Code of 1986, as amended.
"Event of Default" shall have the meaning attributed to it in Section 10.01
hereof.
"Fed Funds Rate" shall mean as to any Interest Period or any other
period of determination, an interest rate per annum equal for each day
during such period to the rate per annum at which Rabobank, as a branch
of a foreign bank, in its sole discretion, can acquire federal funds in
the interbank term federal funds market in New York City through brokers
of recognized standing for such day (or, if such day is not a Business
Day, for the next preceding Business Day).
"Fed Funds Rate Loan" shall mean any Line of Credit Loan bearing interest
at a rate determined by reference to the Fed Funds Rate.
"Federal Crop Insurance Program" shall mean the crop-hail or multi-peril
crop insurance program established and offered in accordance with the
Federal Crop Insurance Act, as amended.
"Financing Statement" shall mean a financing statement of the Borrower,
naming the Borrower as debtor and the Collateral Agent as secured party, in
the form of Exhibit C attached hereto (completed with appropriate
insertions), with appropriate changes thereto to reflect the
requirements of state or local law or form differences.
"Fiscal Year" shall mean the annual period of the Borrower from March 1 of
each year to the last day of February of the next year.
"Fixed Rate" shall mean, in respect of a Fixed Rate Loan for a particular
Interest Period, the LIBO Rate applicable to such Fixed Rate Loan during
such Interest Period.
"Fixed Rate Loan" shall mean each Line of Credit Loan bearing interest
determined by reference to the LIBO Rate.
"Governmental Body" shall mean any foreign, federal, state, municipal,
local or other government, or any department, commission, board, bureau,
agency, public authority, official or instrumentality thereof or any
court or arbitrator.
"Indebtedness" means all items of indebtedness, obligations or
liabilities of a Person, whether matured or unmatured, liquidated or
unliquidated, direct or contingent, joint or several, including, without
limitation: (a) all indebtedness and obligations to pay money
guaranteed, directly or indirectly, in any manner, or endorsed (other
than for collection or deposit in the ordinary course of business) or
discounted with recourse; and (b) all indebtedness and obligations to
pay money guaranteed, directly or indirectly, through agreements,
contingent or otherwise: (i) to purchase such indebtedness or
obligations; or (ii) to purchase, sell or lease (as lessee or lessor)
property, products, materials or supplies or to purchase or sell
services, primarily for the purpose of enabling the debtor to make
payment of such indebtedness or obligation or to assure the owner of the
indebtedness against loss; or (iii) to supply funds to or in any other
manner invest in the debtor; and (c) all indebtedness and obligations to
pay money secured by (or for which the holder of such indebtedness or
the obligee has a right, contingent or otherwise, to be secured by) any
mortgage, deed of trust, pledge, Lien, security interest or other charge
or encumbrance upon property owned or acquired by such Person subject
thereto, whether or not the indebtedness or obligations secured thereby
have been assumed; and (d) all indebtedness and obligations to pay money as
the lessee of property, real or personal, or services under leases that, in
accordance with generally accepted accounting principles consistently
applied, should not be reflected or capitalized on the lessee's balance
sheet; and (e) all indebtedness and obligations to pay money as the
lessee of property, real or personal, under leases that, in accordance
with generally accepted accounting principles consistently applied are,
or are required to be, capitalized for financial reporting purposes; and
(f) all indebtedness and obligations under letters of credit, under
acceptance facilities, in respect of interest rate protection agreements
or in respect of unfunded vested benefits under Plans covered by ERISA;
and (g) all indebtedness or liability for borrowed money, bonds, bills,
promissory notes and instruments.
"Intercreditor Agreement" shall mean the Intercreditor Agreement of even
date herewith between the Collateral Agent and CapMAC, as the same may be
amended, supplemented or otherwise modified from time to time.
"Interest Period" shall mean (a) as to any Advance comprised of Fixed Rate
Loans, the period commencing on the date such Advance is made, or on the
last day of the immediately preceding Interest Period applicable to such
Advance, as the case may be, and ending, on the numerically corresponding
day (or if there is no numerically corresponding day, on the last day)
in the calendar month that is 1, 2 or 3 months thereafter, as the
Borrower may select, and (b) as to any Advance comprised of Variable
Rate Loans, the period commencing on the date such Advance is made or on
the last day of the immediately preceding Interest Period applicable to
such Advance, as the case may be and ending on the earlier to occur of
(i) the date such Advance is converted to or refinanced as a Fixed Rate
Loan or as a Variable Rate Loan whose interest rate is determined by
reference to a different Type of Variable Rate or (ii) the Termination
Date; provided, however, (x) each Interest Period applicable to an
Advance comprised of Fixed Rate Loans that commences on the last
Business Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar
month) shall end on the last Business Day of the appropriate subsequent
calendar month; (y) no Interest Period may extend beyond the Line of Credit
Maturity Date; and (z) if an Interest Period would end on a day that is
not a Business Day, such Interest Period shall be extended to the next
Business Day unless such Business Day would fall in the next calendar
month, in which event such Interest Period shall end on the immediately
preceding Business Day.
"Lending Office" shall mean, with respect to each Bank, the office of such
Bank specified as its lending office for the relevant Type of Advance or
Line of Credit Loan opposite its name on Schedule I hereto or in the
Assignment Certificate, pursuant to which said Bank became a Bank
hereunder in accordance with the provisions of Section 13.14.
"LIBO Rate" shall mean, for any Interest Period, with respect to each Fixed
Rate Loan, the rate per annum (rounded upwards, if necessary, to the
nearest 1/16th of 1%) determined by the Administrative Agent to be equal
to the quotient of (a) the London Interbank Offered Rate for such Fixed
Rate Loan for such Interest Period divided by (b) one (1.00) minus the
applicable percentage (expressed as a decimal) prescribed by the Board
of Governors of the Federal Reserve System (or any successor thereto)
for determining the maximum reserve requirements applicable to
eurodollar fundings (currently referred to as "Eurocurrency Liabilities"
in Regulation D) or any other maximum reserve requirements applicable to
a member bank of the Federal Reserve System with respect to such
eurodollar fundings.
"Lien" shall mean any mortgage, pledge, assignment, Lien, charge,
encumbrance or security interest of any kind or nature, or the interest of
a vendor or lessor under any conditional sale agreement, leases which
have been or should be capitalized in accordance with United States
generally accepted accounting principles or other title retention
agreement.
"Line of Credit Advance" shall mean the aggregate amount of all Advances
made by the Banks on the same Borrowing Date.
"Line of Credit Borrowing Base" shall mean (a) on each date of
determination during the months of March, April, May, June, July,
August, September and October of each Fiscal Year, (i) an amount equal
to the positive difference between the Borrowing Base on such date minus
(ii) the aggregate principal amount of Triple-A Loans outstanding on
such date and (b) on each date of determination during the months of
March, November, December, January and February of each Fiscal Year, an
amount equal to the positive difference between (iii) seventy-five
percent (75.0%) of Net Aggregate Eligible Advances on such date minus
(iv) the aggregate principal amount of Triple-A Loans outstanding on
such date.
"Line of Credit Commitment" shall mean, at any time with respect to a Bank,
the principal amount set forth beside such Bank's name under the heading
Line of Credit Commitment on Schedule I hereto or on the signature page
of the Assignment Certificate pursuant to which such Bank became a Bank
hereunder in accordance with the provisions of Section 13.14.
"Line of Credit Facility Fee" shall have the meaning attributed to it in
Section 2.08 hereof.
"Line of Credit Loan" shall mean each revolving loan made by a Bank to the
Borrower pursuant to Section 2.01 hereof. Each Line of Credit Loan
shall be a Fixed Rate Loan, a Base Rate Loan or a Fed Funds Rate Loan.
"Line of Credit Maturity Date" shall mean February 28, 1998.
"Line of Credit Note" shall have the meaning attributed to it in Section
2.02 hereof.
"Loan" shall mean the aggregate of all outstanding Line of Credit Loans
of the Banks.
"Loan Agreement" shall mean this Third Amended and Restated Loan
Agreement, dated as of March 12, 1997, among the Borrower, the Banks and
the Administrative Agent, as the same may be amended, modified, restated or
supplemented from time to time in accordance with the provisions hereof.
"Loan Document(s)" shall mean each of the Loan Agreement, each Note, each
Collateral Document, the Intercreditor Agreement, each Subordination
Agreement and each other document, agreement or instrument to be issued or
contemplated hereunder, as amended, modified or restated from time to time
in accordance with the provisions thereof.
"Loan Fees" shall mean the Line of Credit Facility Fee and each Default
Fee.
"Loan Loss Reserve" as of the date of determination shall mean the loan
loss reserve as described in, and maintained by the Borrower in
accordance with, the Credit Policy.
"London Interbank Offered Rate" shall mean, for any Interest Period, the
annual rate per annum equal to the annual rate (rounded upwards if
necessary, to the nearest 1/16th of 1.0%) determined by the
Administrative Agent to be the average rate at which U.S. dollar
deposits are offered by Rabobank at or about 11:00 a.m. (London time) to
major banks in the London interbank eurodollar market two Business Days
before the first day of such Interest Period in an amount approximately
equal to the amount for which a LIBO Rate is to be fixed and maturing at
the end of such Interest Period.
"Majority Banks" means, at any time, one or more of the Banks holding at
least 66 2/3% of the Loans outstanding at such time, or, if there are no
Loans outstanding at such time, one or more of the Banks having Stated
Line of Credit Commitments aggregating at least 66 2/3% of the Total
Stated Line of Credit Commitment at such time.
"Management Group" shall mean any one or more of Xxxxx X. Xxxxxxxx, Xx.,
Xxxxxx X. Xxxxxx and Xxxxx X. Xxxxxxxx.
"Maturity Date" shall mean March 9, 1998.
"Multiemployer Plan" shall mean a plan described in Section 4001(a)(3) of
ERISA which covers employees of Borrower or any ERISA Affiliate.
"Net Aggregate Eligible Advances" shall have the meaning attributed to
it in the Asset Securitization Credit Agreement.
"Norwest Trust" shall mean Norwest Bank Iowa, National Association.
"Note(s)" shall mean each Line of Credit Note and each promissory note
executed and accepted by a Bank in substitution, amendment, modification,
renewal, extension or replacement of or for any Line of Credit Note.
"Operating Account" means each separate operating account established by
the Borrower with a Customer at any time and from time to time and any
two or more operating accounts established by the Borrower with
different Persons at any time and from time to time which operating
accounts are managed or operated by a Customer as a single management
farming operation.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Borrower Liens" shall mean the Liens permitted under Section
8.02 hereof.
"Permitted Customer Liens" shall mean Liens against a Customer's crops
which are by statute granted priority over the Borrower's Lien in such
crops or which such Indebtedness to others which the Borrower has
deducted in setting the credit limit for such Customer.
"Person" shall include natural persons, corporations, limited liability
companies, limited liability partnerships, business trusts, associations,
companies and partnerships.
"Plan" shall mean any employee benefit plan, pension plan or trust which is
covered by Title IV of ERISA, or subject to the minimum funding standards
under Section 412 of the Internal Revenue Code of 1986 and is either (a)
maintained by the Borrower or employees of the Borrower or (b) maintained
pursuant to a collective bargaining agreement or any other arrangement
under which more than one employer makes contributions and to which the
Borrower is then making or accruing an obligation to make contributions
or has within the preceding five (5) plan years made contributions or
(c) a plan established, maintained or to which contributions have been
made by Borrower or any ERISA affiliate. Without limiting the
generality of the foregoing, "Plan" shall include any Multiemployer Plan.
Prior Banks shall mean each of the financial institutions other than
Rabobank who are parties to the Prior Loan Agreement.
"Prior Custodial Agreement" shall mean the Amended and Restated Collateral
and Borrowing Base Monitoring Agreement, dated as of April 15, 1996, by
and among Rabobank, the Prior Banks and Norwest Trust, as amended from
time to time.
"Prior Financing Statement" shall mean the following Financing Statements
filed with the Iowa Secretary of State:
Original Number Date of Original Filing
K109186 April 13, 1990
K377499 July 29, 1992
K528886 March 4, 1994
K734082 May 6, 1996
"Prior Loan Document(s)" shall mean each of the Credit Agreement, each
Prior Financing Statement, the Prior Security Agreement and the Prior
Custodial Agreement.
"Prior Security Agreement" shall mean the Amended and Restated Security
Agreement, dated April 15, 1996, executed by the Borrower in favor of the
Collateral Agent, as amended from time to time.
"Prohibited Transaction" shall mean a "prohibited transaction" as set
forth in Section 406 of ERISA or Section 4975 of the Code.
"Property" shall mean all type of real, personal or mixed property and all
types of tangible or intangible property.
"Provision for Doubtful Notes" as of the date of determination shall
mean the amount as of such date, which in accordance with the generally
accepted accounting principles used in the preparation of the audited
financial statements referred to in Section 4.05 hereof, would properly
be included in the provision for doubtful notes in the income statement
of the Borrower.
"Records" shall mean all Customer Loan Documents and other documents,
books, credit files, records and other information (including crop
limitation, computer programs, tapes, disks, punch cards, data
processing software and related property and rights) maintained with
respect to Customer Loans and their related Customers.
"Regulations A, D, G, U and X" shall mean Regulations A, D, G, U and X
of the Board of Governors of the Federal Reserve System as amended or
supplemented from time to time.
"Regulatory Change" shall have the meaning attributed to it in Section
2.15.
"Remarketing Ratio" shall have the meaning attributed to it in the Asset
Securitization Credit Agreement.
"Reportable Event" shall mean a "reportable event" as set forth in Section
4043 of ERISA.
"Security Agreement" shall mean the Security Agreement in the form of
Exhibit D attached hereto by and between the Borrower and the Collateral
Agent which shall amend and restate the Prior Security Agreement.
"Seller Note" shall mean the promissory note of Ag Acceptance executed in
favor of the Borrower evidencing the revolving loan and advances made by
the Borrower to Asset Securitization Purchase and Contribution
Agreement, as the same may be amended, supplemented or otherwise
modified from time to time with and subject to the prior approval and
consent of the Administrative Agent and the Majority Banks, together
with all substitutions therefor and replacements thereof.
"Servicer's Daily Report" shall mean the report substantially in the
form of Exhibit E to the Asset Securitization Credit Agreement furnished
to Triple-A by the Borrower pursuant to Section 6.01 of the Asset
Securitization Credit Agreement.
"Subordinated Indebtedness" shall mean Indebtedness of the Borrower, the
repayment of which is subordinated to the Line of Credit Loans pursuant
to a Subordination Agreement.
"Subordination Agreement" shall mean any subordination agreement (and all
amendments thereto) pursuant to which Subordinated Indebtedness has been
subordinated by a creditor of the Borrower in a manner and on terms
satisfactory to the Banks.
"Subsidiary" shall mean, as to any Person, any corporation, or other
entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other
Persons performing similar functions are at the time directly or
indirectly owned by such Person.
"Termination Date" shall mean the earliest of (a) the Line of Credit
Maturity Date or (b) the date on which the Commitments are terminated
pursuant to Section 10.02(a) hereof.
"Triple-A" shall mean Triple-A One Funding Corporation, a Delaware
corporation.
"Triple-A Loans" shall mean, as of any date of determination the aggregate
principal amount of all loans made by Triple-A to Ag Acceptance under the
Asset Securitization Credit Agreement which are outstanding on such date.
"Type", when used in respect of an Advance or Line of Credit Loan, shall
refer to the Rate by reference to which interest on such Advance or Line of
Credit Loan is determined. For purposes hereof, the term "Rate" shall
include the LIBO Rate, the Base Rate or the Fed Funds Rate.
"Variable Rate" means the Base Rate or the Fed Funds Rate.
"Variable Rate Loan" shall mean a Base Rate Loan or a Fed Funds Rate Loan.
ARTICLE II
AMOUNT AND TERMS OF LINE OF CREDIT
Section 2.01 Line of Credit Facility. (a) Line of Credit. Subject
to the terms and conditions hereof, a line of credit arrangement is
established by the Banks in favor of the Borrower (the "Line of Credit")
whereby each Bank agrees, severally and not jointly, to make line of credit
loans to the Borrower on such Borrowing Dates as the Borrower shall select on
a prorata basis as to each Advance requested by the Borrower on such Borrowing
Date determined by such Bank's Applicable Percentage in an amount up to but
not exceeding the Line of Credit Commitment of such Bank; provided, however,
that the Banks will not be required and shall have no obligation to make any
Line of Credit Loan (i) so long as a Default or Event of Default has occurred
and is continuing or (ii) if an Acceleration has occurred; provided further,
however, that immediately after giving effect to each such Advance, the
aggregate outstanding principal amount of the Loan shall not exceed the lesser
of the Line of Credit Borrowing Base or the Total Line of Credit Commitment.
(b) Advances. Each Line of Credit Loan made by a Bank on a Borrowing Date
shall be in an amount equal to such Bank's Applicable Percentage of each
Advance to be made to the Borrower on such Borrowing Date. No Bank shall
have any obligation to make any Line of Credit Loan after the Line of Credit
Maturity Date or after such obligation is sooner terminated or cancelled by
the Banks pursuant to the rights afforded them herein. Within such limits,
the Borrower may, within the limits of this Section 2.01, and subject to
Article VI hereof, borrow, repay pursuant to Section 2.03(b) hereof and
reborrow funds under this Section 2.01. Notwithstanding any other provision
of this Agreement, in no event shall any Bank be obligated to make a Line of
Credit Loan if immediately thereafter the aggregate outstanding principal
amount of all of such Bank's Line of Credit Loans would exceed the lesser of
such Bank's then applicable Line of Credit Commitment or such Bank's
Applicable Percentage of the Line of Credit Borrowing Base. Each Advance
shall be comprised of Variable Rate Loans or Fixed Rate Loans as specified by
the Borrower in the notice of advance request given pursuant to Section 2.06.
The Advances comprising each Line of Credit Advance shall be in an aggregate
principal amount that is an integral multiple of $50,000 and not less than
$1,000,000.00 in the case of an Advance comprised of Fixed Rate Loans or
$250,000.00 in the case of an Advance comprised of Variable Rate Loans, or,
an aggregate principal amount equal to an amount which will utilize in full
the Total Line of Credit Commitment. The failure by any Bank to make any
Line of Credit Loan on the specified Borrowing Date shall not relieve any
other Bank of its obligation (if any) to make its own Line of Credit Loan on
such Borrowing Date, but no Bank shall be responsible for the failure of any
other Bank to make the Line of Credit Loan of such other Bank.
Section 2.02 Line of Credit Note. The Line of Credit Loans made by each
Bank shall be evidenced by a properly executed promissory note of the Borrower
substantially in the form of Exhibit E attached hereto (completed with
appropriate insertions), payable to the order of such Bank in a stated
principal amount equal to such Bank's Stated Line of Credit Commitment Amount
(each such promissory note and each modification, extension or replacement
thereof or substitution therefor shall hereinafter be called the "Line of
Credit Note"). Each Bank is hereby authorized to record the date, Type, and
amount of each Line of Credit Loan made by such Bank, each continuation
thereof, each conversion of all or a portion thereof to another Type, the
date and amount of each payment or prepayment of principal thereof and, in
the case of Fixed Rate Loans, the length of each Interest Period with respect
thereto, on the schedule annexed to and constituting a part of its Line of
Credit Note, and any such recordation shall constitute prima facie evidence
of the accuracy of the information so recorded; provided, however, that the
failure to make any such recordation shall not affect the obligations of the
Borrower hereunder or under any Line of Credit Note.
Section 2.03 Principal.
(a) Mandatory Repayments.
(i) General. The Borrower shall be obligated to make a principal
repayment of the Loan on each Business Day in an amount equal to the
Borrowing Base Deficit on such Business Day, together with accrued interest
on such principal amount repaid through the date of payment. The entire
aggregate outstanding principal of each Bank's Line of Credit Loans and each
Bank's Line of Credit Note shall be due and payable in full on the
Termination Date. Mandatory principal repayments shall be applied first to
Advances comprised of Variable Rate Loans. If a mandatory principal
repayment is applied to Advances comprised of Fixed Rate Loans on a date
other than the last day of the Interest Period therefor, the Borrower shall
pay to each Bank an amount sufficient to compensate such Bank for any loss,
cost or expenses incurred by such Bank as provided in Section 2.17 hereof.
(ii) Clean-Down Period Reductions. The Borrower agrees to reduce the
aggregate outstanding principal balance of the Loan to Zero Dollars ($0.00)
for a period of 10 consecutive Business Days during each Clean-Down Period.
The Borrower agrees not to increase or extend the terms of its Indebtedness
to trade creditors solely to satisfy the foregoing requirement unless such
increase or extension is made in the normal course of the Borrower's credit
arrangements with its trade creditors.
(b) Optional Prepayments. The Borrower shall have the right to prepay
all or a portion of the Loan at any time upon notice to the Administrative
Agent, prior to the time payment is made, on the date of prepayment in the
case of Variable Rate Loans and upon notice to the Administrative Agent given
no later than 12:00 noon (New York City time) on the third Business Day prior
to the date of prepayment in the case of Fixed Rate Loans, which notice shall
specify the Advance being prepaid, the aggregate amount thereof to be
prepaid, and the date of prepayment. Any repayment of an Advance shall be in an
aggregate principal amount which is an integral multiple of $50,000.00 and
not less than $1,000,000.00 in the case of an Advance comprised of Fixed Rate
Loans or $250,000.00 in the case of an Advance comprised of Variable Rate
Loans or in either case an amount sufficient to repay the outstanding
principal amount of such Advance. If a prepayment of an Advance comprised of
Fixed Rate Loans is made on a date other than the last day of the Interest
Period therefor, the Borrower shall pay to each Bank an amount sufficient to
compensate such Bank for any loss, cost or expenses incurred by such Bank as
provided in Section 2.17 hereof. Amounts prepaid may be reborrowed as
permitted under Section 2.01, subject to the provisions of Section 6.02 hereof.
(c) Loss Indemnification. The provisions of Section 2.17 hereof shall
apply to each mandatory repayment and optional prepayment of any Fixed Rate
Loan.
Section 2.04 Interest.
(a) Rate Prior to Delinquency. (i) Subject to the provisions of
Section 2.04(b), each Advance comprised of Base Rate Loans shall bear
interest at a rate per annum equal to the Base Rate. The interest rate on
Advances comprised of Base Rate Loans shall change as and when the Base Rate
changes, effective as of the opening of business on the day on which such
change in the Base Rate becomes effective.
(ii) Subject to the provisions of Section 2.04(b), each Advance
comprised of Fed Funds Rate Loans shall bear interest at a rate per annum
equal to the Fed Funds Rate plus a two percent (2.00%). The interest rate on
Advances comprised of said Fed Funds Rate Loans shall change as and when the
Fed Funds Rate changes, effective as of the opening of business on the day in
which such change in the Fed Funds Rate becomes effective.
(iii)Subject to the provisions of Section 2.04(b), each Advance
comprised of LIBOR Loans shall bear interest at a rate per annum equal to the
LIBO Rate for the Interest Period in effect for such Advance plus one and
one-half percent (1.50%).
(iv) Interest on each Advance shall accrue from and including the first
day of an Interest Period to but excluding the last day of such Interest
Period or the day such Advance is paid in full if such day is other than the
last day of such Interest Period.
(b) Default Rate. Any principal of or interest on a Line of Credit
Loan not paid when due (whether at maturity, by acceleration or otherwise)
shall, from the due date therefrom until paid, bear interest at a rate per
annum (computed on the same basis as a Base Rate Loan) equal to the Default
Rate. The Default Rate shall increase or decrease, without limit, as and
when the Base Rate changes, effective as of the opening of business on the day
on which such change in the Base Rate becomes effective.
(c) Required Payments. Interest on each Advance comprised of Fixed
Rate Loans shall be due and payable on the last day of the Interest Period
applicable to such Advance or the day such Advance is paid in full if such
day is other than the last day of such Interest Period. Interest on each
Advance comprised of Variable Rate Loans shall be due and payable on the
first day of each month and on the day such Advance is paid in full. If in
accordance with the foregoing interest on any Advance would be due and
payable on a day which is not a Business Day, such interest shall be due and
payable on the next Business Day, however, interest shall continue to accrue
until paid. Accrued and unpaid interest on all Advances shall be due and
payable on the Termination Date.
Section 2.05 Notice of Advance Requests. (a) Variable Rate Loans or
Fixed Rate Loans. The Borrower shall give the Administrative Agent written
or telecopy notice (or telephone notice promptly confirmed in writing or by
telecopy): (a) in the case of an Advance comprised of either Base Rate Loans
or Fed Funds Rate Loans not later than 11:00 a.m. (New York City time) on the
Borrowing Date of such proposed Advance, and (b) in the case of an Advance
comprised of Fixed Rate Loans, not later than 11:00 a.m. (New York City time)
three Business Days before the Borrowing Date of such proposed Advance,
specifying in each such notice: (i) whether such Advance is to be comprised
of Fixed Rate Loans, Base Rate Loans or Fed Funds Rate Loans and if such
Advance is to be comprised of Fixed Rate Loans, the Interest Period with
respect thereto, and (ii) the date such Advance is to be made and the amount
thereof. Each notice shall be accompanied by a Borrowing Base Certificate
setting forth supporting documentation and information as of the Business
Day before the date of such notice, signed and dated by an appropriate
corporate officer.
The Administrative Agent shall promptly notify each Bank of such notice. If no
election as to the Type of Advance is made in any such notice, then the
requested Advance shall be comprised of Base Rate Loans. If no Interest
Period with respect to any Advance to be comprised of Fixed Rate Loans is
specified in any such notice, then the Interest Period shall be of one
month's duration. If the Borrower shall not have given notice in accordance
with this Section 2.05 of its election to refinance an Advance prior to the
end of the Interest Period in effect for such Advance, then the Borrower
shall (unless such Advance is repaid at the end of such Interest Period) be
deemed to have given notice of an election to refinance such Advance with
Advances comprised of Base Rate Loans. The Fixed Rate applicable to each
Fixed Rate Loan shall be determined by the Administrative Agent and such
determinations shall be conclusive absent manifest error. The Administrative
Agent shall promptly notify the Banks of the numerical rate of interest
applicable to each Line of Credit Loan and each change in a Variable Rate
applicable to any Variable Rate Loans outstanding.
(b) Alternate Rate of Interest. Notwithstanding anything to the contrary
herein, if the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that quotations of interest rate for the
relevant deposits referred to in the definition of LIBO Rate or the London
Interbank Offered Rate are not being provided in the relevant amounts or for
the relative maturities for purposes of determining the rate of interest on
Advances to be comprised of Fixed Rate Loans for any proposed Interest Period as
provided in this Agreement, then the Administrative Agent shall forthwith give
notice thereof to the Borrower, whereupon (i) the obligation of the Banks to
make Fixed Rate Loans shall be suspended until the Administrative Agent
notifies the Borrower that the circumstances giving rise to such suspension
no longer exist, (ii) such Advances for such proposed Interest Period shall
not be made as Fixed Rate Loans and, until the circumstances giving rise to
such suspension no longer exist, any request by the Borrower for any Advance
comprised of Fixed Rate Loans shall be deemed to be a request for Base Rate
Loans, and (iii) the Borrower shall repay in full the then outstanding
principal amount of each Fixed Rate Loan, together with accrued interest
thereon, on the last day of the then current Interest Period applicable to
such Fixed Rate Loan.
Section 2.06 Advances. Each Advance shall be comprised of Fixed Rate
Loans, Base Rate Loans or Fed Funds Rate Loans as the Borrower may request
pursuant to Section 2.05 hereof. The Borrower may refinance all or any part of
any Advance with an Advance of the same or a different Type, subject, in each
case, to the conditions and limitations set forth in this Agreement. Any
Advance or portion thereof refinanced in accordance with the foregoing shall
be deemed to be repaid or prepaid in accordance with Section 2.03, with the
proceeds of a new Advance and the proceeds of the new Advance, to the extent
they do not exceed the principal amount of the Advance being refinanced, shall
not be paid by the Banks to the Administrative Agent or by the Administrative
Agent to the Borrower pursuant to Section 2.11 hereof. Notwithstanding any
other provision of this Agreement, the Borrower shall not be entitled to
request any Advance if the Interest Period requested with respect thereto
would end after the Maturity Date applicable thereto.
Section 2.07 Use of Proceeds. Proceeds of the Line of Credit Advances
shall be used for the Borrower's working capital.
Section 2.08 Line of Credit Facility Fee. The Borrower agrees to pay
the Administrative Agent, for the pro rata benefit of each Bank based on
their Applicable Percentages, a non-refundable fee (the "Line of Credit
Facility Fee") equal to one-eighth percent (0.125%) of the daily amount by
which the Total Line of Credit Commitment exceeds the average daily
outstanding principal balance of the Loan from the Effective Date hereof in
the case of each Bank that is a signatory hereto and from the effective date
specified in the Assignment Certificate pursuant to which such Bank became a
Bank in accordance with Section 13.14 in the case of each other Bank until
the Termination Date. The Line of Credit Facility Fee shall be payable on the
last day of each fiscal quarter of the Borrower, in arrears, during the
term of such Bank's Line of Credit Commitment. No portion of any Line of
Credit Facility fee paid to the Administrative Agent shall be refunded for
any reason, irrespective of the occurrence of the Termination Date prior to
February 28, 1998. Upon receipt of any Line of Credit Facility Fee, the
Administrative Agent shall promptly thereafter distribute to each Bank an
amount equal to such Bank's Applicable Percentage of such Line of Credit
Facility Fee paid to the Administrative Agent.
Section 2.09 Calculation of Interest; Maximum Lawful Rates. All
interest and fees charged hereunder with respect to all Line of Credit
Advances, Line of Credit Loans and the Line of Credit Facility Fees and each
Line of Credit Note shall be calculated based on a year of 360 days and the
actual number of days elapsed. If at any time the interest rate hereunder
or under any Line of Credit Note exceeds the highest lawful rate, interest
shall accrue at the highest lawful rate. If any payment by or on behalf of
the Borrower is received after 2:00 p.m. (New York City time) on any Business
Day, it will be deemed to be received on the next succeeding Business Day.
If the time for payment of any amount hereunder is extended by operation of
law or otherwise, interest shall continue to accrue for such extended period.
Section 2.10 Notice of Changes in Base Rate. During the effective
period of this Agreement, the Administrative Agent shall promptly advise
Borrower of changes in the Base Rate; provided, however, that the failure
to give such advice or the failure to give such advice promptly shall not
affect the obligation of the Borrower to pay interest in accordance with
the terms of any Line of Credit Note and of this Agreement.
Section 2.11 Funding and Disbursements. Not later than 2:00 p.m. (New
York City time) on the Borrowing Date of any Advance requested by
the Borrower in accordance with Section 2.05, each Bank shall make available
to the Administrative Agent at New York, New York, in immediately available
funds, such Bank's share of each requested Advance to be made on such
Borrowing Date. After the Administrative Agent's receipt of such funds and
upon fulfillment of all the applicable conditions precedent set forth in
Article VI, the Administrative Agent shall make the requested Advance
available to the Borrower in immediately available funds not later than
3:00 p.m. (New York City time) on the Borrowing Date of the requested Advance
by crediting the amount thereof to the Borrower's account maintained with the
Administrative Agent; provided, however, if and to the extent that any Bank
fails to timely make all or any portion of its share of a requested Advance
available to the Administrative Agent in immediately available funds prior
to 2:00p.m. (New York City time) on the Borrowing Date or if the
Administrative Agent reasonably believes such Bank may not honor its
commitment to fund its share of a requested Advance, the Administrative Agent
shall not be required to disburse such portion of the Advance until it has
been actually received by the Administrative Agent. The Administrative Agent
may, but shall not be obligated to, make the entire amount of such requested
Advance available to the Borrower notwithstanding the failure of any Bank to
timely fund its respective share of the requested Advance to be made on a
Borrowing Date. The Agent shall promptly notify each Bank if any Bank does
not honor its commitment to fund its share of a required Advance.
Section 2.12 Payments. During the effective period of this Agreement
and prior to the applicable interest payment date, the Administrative Agent
shall send an interest statement to the Borrower specifying the amount of
interest due to each Bank on such payment date. The Borrower shall make
each payment under this Agreement and each Loan Document not later than
12:00 noon (New York City time) on the date when due in United States
dollars to the Administrative Agent for the account of the Administrative
Agent and the Banks, as the case may be, in immediately available funds. All
payments made shall be made or remitted to the Administrative Agent. In the
event any Bank at any time receives a payment made in respect of principal,
interest, fees, costs or expenses on account or in respect of any Loans in
excess of its proportionate share thereof, such Bank shall, promptly upon
receipt thereof, remit such payment to the Administrative Agent in like funds.
The Administrative Agent, upon receipt of immediately available funds with
respect to any payment made to the Administrative Agent, shall promptly cause
such payment to be distributed to the appropriate Bank or Banks in the amounts
necessary so that such Bank or Banks receive their appropriate proportionate
share. The Borrower hereby authorizes each. Bank to charge the Borrower's
account maintained with such Bank in order to cause the timely payment of
amounts due hereunder to be made (subject to sufficient funds being
available in such account for such purpose). Any and all payments by the
Borrower hereunder or under any Loan Document shall be made free and clear
of and without deduction for any set off or counterclaim or any and all current
or future taxes, levies, imports, deductions, charges or withholdings and
any and all liabilities with respect thereto. If any such amounts otherwise
payable by the Borrower are directly asserted against the Administrative Agent
or any Bank, the Administrative Agent or Bank, as the case may be, may pay
such amount and the Borrower promptly shall reimburse the Administrative Agent
or such Bank to the full extent of the amount paid.
Section 2.13 Application of Payments. Mandatory payments of a Loan
made in the absence of an Acceleration shall be applied first, to accrued
and unpaid interest due on the Loan, and second, to principal on the Loan.
Unless otherwise specified by the Borrower at the time the prepayment is
made and except as otherwise provided herein, prepayments shall be applied
first, to accrued and unpaid interest due on the portion of the Loan
comprised of Variable Rate Loans, second, to principal of the portion of
the Loan comprised of Variable Rate Loans, third, to accrued and unpaid
interest due on the portion of the Loan comprised of Fixed Rate Loans,
fourth, to any prepayment penalties due under Section 2.03(b), fifth, to
rincipal of the portion of the Loan comprised of Fixed Rate Loans and
sixth, to unpaid and accrued interest on the Loan, whether or not then due.
Each Bank agrees that in computing such Bank's portion of any Line of Credit
Advance to be made hereunder or the portion of any payment to be allocated to
such Bank hereunder, the Administrative Agent may, in its sole discretion,
round each Bank's portion of such payment to the next higher or lower whole
dollar amount. Amounts paid by the Borrower pursuant to Sections 2.15,
2.16 or 2.17 or Article XI shall be remitted to the Administrative Agent or
the Banks entitled thereto.
Section 2.14 Non-Receipt of Funds by Administrative Agent. Unless the
Administrative Agent shall have received written or telephonic notice from
a Bank prior to 1:00 p.m. (New York City time) on the Borrowing Date on which
such Bank is to provide to the Administrative Agent for an Advance to be
made by such Bank that such Bank will not make available to the
Administrative Agent such funds, the Administrative Agent may assume that
such Bank has made such funds available to the Administrative Agent on the
Borrowing Date of such Advance in accordance with Section 2.11 and the
Administrative Agent, in its sole discretion, may, but shall not be
obligated to, in reliance upon such assumption, make available to the
Borrower on such Borrowing Date a corresponding amount. If such Bank
shall pay to the Administrative Agent such corresponding amount, such amount
so paid shall constitute such Bank's Advance for purposes of this Agreement.
If such Bank does not make such amount available to the Administrative
Agent, such Bank shall pay to the Administrative Agent, on demand, such
amount with interest thereon at a rate equal to the daily average Fed Funds
Rate for the period until such Bank makes such amount immediately available
to the Administrative Agent. A certificate of the Administrative Agent
submitted to any Bank with respect to any amounts owing under this
subsection shall be conclusive in the absence of manifest error. If such
Bank does not pay such amount forthwith upon demand therefor by the
Administrative Agent, the Administrative Agent shall promptly notify the
Borrower and the Borrower shall immediately pay such amount to the
Administrative Agent, with interest thereon as provided in the immediately
preceding sentence. The Administrative Agent will promptly notify the
Borrower of any notice the Administrative Agent receives from a Bank that
such Bank will not make funds available to the Administrative Agent on any
Borrowing Date.
Section 2.15 Increased Cost. From time to time upon notice to the
Borrower from a Bank (with a copy to the Administrative Agent) the Borrower
shall pay to the Administrative Agent for the account of the applicable Bank
such amounts as any Bank may determine to be reasonably necessary to
compensate such Bank for any increased costs incurred by such Bank which
such Bank determines are attributable to its making or maintaining any Line
of Credit Loans hereunder or its obligation to make any such Line of Credit
Loans hereunder, or any reduction in any amount receivable by such Bank under
this Agreement or its Line of Credit Note in respect of any such Line of
Credit Loans or such obligation (such increases in costs or reductions in
amounts receivable being herein called "Additional Costs"), resulting
solely from any change after the date of this Agreement in U.S., federal,
state, municipal, or foreign laws or regulations (including Regulation D), or
the adoption or making after such date of any interpretations, directives,
or requirements (whether or not having the force of law) applying to a class
of banks including such Bank of or under U.S. federal, state, municipal,
or foreign laws or regulations by any court or governmental or monetary
authority charged with the interpretation or administration thereof
("Regulatory Change"), which: (a) changes the basis of taxation of any
amounts payable to such Bank under this Agreement or its Line of Credit
Note in respect of any of such Line of Credit Loans (other than taxes
imposed on the overall net income of such Bank for any of such Loans by the
jurisdiction where the Principal Office is located); or (b) imposes or
modifies any reserve, special deposit, compulsory loan, or similar
requirements relating to any extensions of credit or other assets of, or
any deposits with or other liabilities of, such Bank (including any of
such Line of Credit Loans); or (c) imposes any other condition affecting
this Agreement or its Line of Credit Note (or any of such extensions of
credit or liabilities). Such Bank will notify the Borrower (with a copy
to the Administrative Agent) of any event occurring after the date of
this Agreement which will entitle such Bank to compensation pursuant to
this Section 2.15 as promptly as practicable after it obtains knowledge
thereof and determines to request such compensation. Determinations by any
Bank for purposes of this Section 2.15 of the effect of any Regulatory
Change on its costsof making or maintaining Line of Credit Loans or on
amounts receivable by it in respect of Line of Credit Loans and of the
additional amounts required to compensate any such Bank in respect of any
Additional Costs shall be conclusive in the absence of demonstrable error,
provided that such determinations by such Bank are reasonable and provided
further that written notice of such determinations shall have been given to
the Borrower by such Bank setting forth in reasonable detail the reasons or
basis for such determinations and the additional amounts required to be
paid. The payment of the additional amounts required hereunder shall be
made by the Borrower immediately on the date any Bank gives the required
notice to the Borrower.
Section 2.16 Risk-Based Capital. In the event that any Bank determines
that (a) compliance with any law or regulation or any judicial,
administrative, or other governmental interpretation of any law or
regulation or (b) compliance by such Bank or any corporation controlling
such Bank with any guideline or request from any central bank or other
Governmental Body (whether or not having the force of law) has the effect of
requiring an increase in the amount of capital required or expected to be
maintained by such Bank or corporation controlling such Bank, and such
Bank determines that such increase is based in part or in whole upon its Line
of Credit Loans or its obligations hereunder, or other similar obligations,
the Borrower shall pay to the Administrative Agent, for the account of the
applicable Bank, such additional amount as shall be certified by the Bank to
be the amount allocable to such Bank's obligations to the Borrower
hereunder which is reasonably necessary in the determination of the Bank
to compensate such Bank or any corporation controlling such Bank for any
reduction in the rate of return on its capital, taking into account such
Bank's or corporation's policies with regard to capital adequacy. Such
Bank will notify the Borrower (with a copy to the Administrative Agent and
each other Bank) of any event occurring after the date of this Agreement
that will entitle such Bank to compensation pursuant to this Section 2.16
as promptly as practicable after it obtains knowledge thereof and
determines to request such compensation. Determinations by any Bank for
purposes of this Section 2.16 of the effect of any increase in the amount
of capital required to be maintained by such Bank and of the amount
allocable to such Bank's obligations to the Borrower hereunder shall be
conclusive in the absence of demonstrable error, provided that such
determinations by such Bank are reasonable and provided further that
written notice of such determinations shall have been given to the Borrower
by such Bank setting forth inreasonable detail the reasons or basis for such
determinations and the additional amounts required to be paid. The payment
of the additional amounts required hereunder shall be made by the Borrower
within 30 days after the date any Bank gives the required notice to the
Borrower.
Section 2.17 Funding Loss Indemnification. Upon notice to the
Borrower from a Bank (with a copy to the Administrative Agent) the Borrower
shall pay to the Administrative Agent for the account of the applicable
Bank, such amount or amounts as shall be sufficient to compensate it for
any loss, cost, or expense incurred as a result of:
(a) Any repayment or prepayment of a Fixed Rate Loan on a date other
than the last day of the Interest Period for such Loan including, but not
limited to (i) mandatory payments pursuant to Sections 2.03(d) or (ii)
acceleration of the Loans by the Administrative Agent pursuant to Section
10.02; or
(b) Any failure by the Borrower to borrow, renew or convert an Advance
on the date for borrowing, renewal or conversion, as the case may be,
specified in the relevant notice under Sections 2.05 or 2.06, as the case
may be; or
(c) Any default in payment of the principal amount of any Line of
Credit Loan or any part thereof or interest accrued thereon, as and when
due and payable or failure by the Borrower to repay any Line of Credit Loan
on the date specified on the notice of repayment given pursuant to Section
2.03(b), including, in each such case, any loss or reasonable expense
sustained or incurred or to be sustained or incurred in liquidating or
employing deposits from third parties acquired to effect or maintain
any portion of such Line of Credit Loan. Determinations by any Bank for
purposes of this Section 2.17 of the amount or amounts sufficient to
compensate such Bank shall be conclusive in the absence of demonstrable
error, provided that such determinations by such Bank are reasonable and
provided further that written notice of such determinations shall have
been given to the Borrower by such Bank setting forth in reasonable detail
the reasons or basis for such determinations and the additional amounts
required to be paid. The payment of the additional amounts required
hereunder shall be made by the Borrower within 30 days after the date any
Bank gives the required notice to the Borrower.
Section 2.18 Survival. The Borrower's agreements and obligations
under Sections 2.12, 2.15, 2.16 and 2.17 shall survive the payment of all
Line of Credit Loans hereunder.
Section 2.19 Pro Rata Treatment. Except as otherwise specifically
provided herein, each Line of Credit Loan, each payment or prepayment of
principal of the Loan, each payment of interest on the Loan, each payment
of the Line of Credit Fee and a Default Fee, each conversion into, or out
of, and renewals of, Fixed Rate Loans shall be allocated pro rata among
the Banks in accordance with each Bank's Applicable Percentage. Each Bank
agrees that in computing such amount of any Line of Credit Loan to be made
by such Bank or any payment to be allocated to such Bank hereunder, the
Administrative Agent may, in its discretion, round the dollar amount of
each Bank's Line of Credit Loan to the next higher or lower whole dollar
amount.
ARTICLE III
COLLATERAL
Section 3.01 Security Interests. In order to induce each Bank to
execute this Loan Agreement and to make Line of Credit Loans to the
Borrower hereunder, and as security for the repayment of all present and
future Indebtedness hereunder of the Borrower to the Administrative Agent
and each Bank, the Borrower hereby (a) grants the Collateral Agent for the
ratable benefit of each Bank, a Lien in all of the Borrower's right,
title and interest in and to the following, whether now owned or hereafter
arising or acquired: (i) all Customer Advances and related Customer
Collateral, (ii) all of the Borrower's inventory, now owned or hereafter
acquired, (iii) all of the Borrower's accounts, now existing or
hereafter arising, together with all security therefor and all business
records, computer records and software relative to its accounts, (iv) all
of the Borrower's interest, now existing or hereafter arising, in goods
and inventory, the sale or lease of which gives rise to any accounts, (v)
all of the Borrower's chattel paper, documents and instruments, now existing
or hereafter arising, together with all security therefor, (vi) all of the
Borrower's general intangibles (including, without limitation, the
Borrower's rights (but not its obligations) undereach of the Asset
Securitization Documents), now owned or hereafter acquired, together with
all security therefor, (vii) of the Borrower's equipment now owned or
hereafter acquired, (viii) of the Borrower's trademarks, royalties,
tradenames, trade secrets, patent applications, licenses and patents now
existing or hereafter arising or acquired, (ix) all of the issued and
outstanding shares of capital stock of Ag Acceptance, together with
all warrants, options and other rights to acquire any shares of such
capital stock (the "Pledged Shares"), (x) the Seller Note, and (xi) the
proceeds, accessories, attachments, parts, repairs, replacements,
substitutions, products and accessions of and to all of the foregoing; and
(b) assigns, transfers and sets over to the Administrative Agent, for
the ratable benefit of each Bank, all of the Borrower's right, title and
interest in and to, and grants each Bank a Lien in all amounts that may
be owing from time to time by such Bank to the Borrower, including, without
limitation, any balance or share belonging to the Borrower of any deposit
or other account with such Bank, which Lien shall be independent of any
right of setoff which any Bank may have. The foregoing grant of a Lien
and assignment shall be in addition to and supplemental of, and not in
limitation, substitution or restriction of, any grant of a Lien or any
assignment made under any other Loan Document and shall not affect or
impair the Lien or priority of the Collateral Documents and the Collateral
subject thereto or the Indebtedness secured thereby.
Section 3.02 Security Agreement; Collateral Documents. It is the
intention and understanding of the Administrative Agent, each Bank and
the Borrower that the Liens and security interests in the collateral
granted under the Prior Security Agreement (and its predecessor security
agreements) shall secure the Borrower's obligations to the Administrative
Agent and each Bank in respect of (a) the loans and commitments under the
Prior Loan Agreement, as amended, decreased, modified and restated
hereunder and (b) all present and future Indebtedness of the Borrower to
the Administrative Agent and to each Bank hereunder and the Loan Documents.
In confirmation of such intention and understanding, the Borrower shall
execute and deliver to the Collateral Agent, for the ratable benefit of
each Bank, the Security Agreement and further agrees to execute and deliver
to the Collateral Agent financing statements and such further documents
or instruments and to take such further action from time to time as may
be reasonably necessary to vest and fully perfect the Liens in the
Collateral (as defined herein) granted hereunder and under the Security
Agreement as prior perfected first Liens therein. The Security Agreement
shall be executed and delivered in amendment, modification and restatement
of the Prior Security Agreement. Nothing herein contained shall in any
manner affect or impair the priority of the Liens created and provided
for by the Prior Security Agreement.
Section 3.03 Collateral Defined; Priority. As used in this Agreement,
"Collateral" shall refer to all Property of the Borrower with respect to
which a Lien is granted hereunder, under the Security Agreement, under
any Loan Document and under any other document, instrument or agreement
contemplated by this Agreement or executed pursuant to the requirements
hereof. All Liens at any time granted hereunder, under the Prior Security
Agreement, under the Security Agreement, under any other Loan Document and
under any other document, instrument or agreement contemplated by this
Agreement or executed pursuant to the requirements hereof shall be prior
and superior in right to all other Liens in the Collateral and Persons.
Section 3.04 Customer Loans and Security Interests and Liens Securing
Customer Notes. Each Customer Loan will be established and each
Customer Advance will be made in substantial accordance with the Credit
Policy. The Borrower agrees to comply in all material respects with the
Credit Policy with regard to each Customer Loan, Customer Advance and
Customer Loan Documents. The Liens, assignments and security interests in
Customer Collateral which secure Customer Notes or other Indebtedness
owed to the Borrower by a Customer shall be perfected Liens and security
interests in such Customer Collateral and the Borrower shall take all
action from time to time as may be reasonably necessary to maintain such
Liens, assignments and security interests securing such Customer Notes
and other Indebtedness as perfected Liens, assignments and security
interests in such Customer Collateral in accordance with the Credit Policy.
Section 3.05 Custodian.Within five (5) Business Days after the
approval of a Customer Loan, of any documents, instruments and agreements
evidencing or otherwise relating to any Customer Advance or related
Customer Collateral received by any of the Borrower, the Borrower shall
deliver directly to the Custodian for the benefit of the Collateral Agent
pursuant to the Custodial Agreement the original Customer Note relating
to such Customer Loan, together with copies of all other Customer Loan
Documents. The Borrower hereby irrevocably appoints the Collateral Agent
the Borrower's attorney-in-fact, with full authority in the place and
stead of the Borrower and in the name of the Borrower or otherwise, from
time to time in the Collateral Agent's discretion after the occurrence of
a Default, to take any action and to execute any instrument which the
Collateral Agent may deem necessary or advisable to accomplish the
purposes of this Loan Agreement and, without limiting the foregoing:
(a) to ask, demand, collect, xxx for, recover, compromise, receive and
give acquittance and receipts for monies due and to become due under or
in connection with any Collateral; (b) to receive, endorse to the
Collateral Agent or any other Person, and collect any Customer Notes,
drafts or other instruments, documents and chattel paper, in connection
therewith; and (c) to execute and file of record any assignment of any
mortgage, deed of trust or financing statement comprising a Customer
Loan Document and to file any claims or take any action or institute any
proceedings which the Collateral Agent may deem necessary or desirable
for the collection of any of the Collateral or otherwise to enforce
compliance with the terms and conditions of any Collateral or the rights
of the Collateral Agent with respect to any other Collateral. The
Custodian shall hold, maintain and keep custody of all such Customer
Notes and related Customer Loan Documents for the benefit of the
Collateral Agent on behalf of the Banks pursuant to the Custodial
Agreement. The Borrower shall cause the Custodian to deliver to the
Collateral Agent a notice from the Custodian confirming that the Custodian
has received the Customer Notes and related Customer Loan Documents.
The Borrower shall deliver to the Custodian the Pledged Shares, together
with all certificates representing Shares of Pledged Shares, and the Seller
Note. All expenses and costs incurred by the Banks or the Collateral
Agent in connection with the services performed by the Custodian pursuant
to the Custodial Agreement shall be repaid to the Banks or the Collateral
Agent on demand.
Section 3.06 Release of Lien Upon Sale or Contribution of Acquired
Customer Advance. The Borrower may assign or sell any Acquired Customer
Advances to Ag Acceptance pursuant to the Asset Securitization Purchase
and Contribution Agreement. Upon any such assignment or sale of all or
any portion of the Acquired Customer Advances, the Lien of the Collateral
Agent in such Acquired Customer Advances so sold or assigned, and all
related Property with respect to such Acquired Customer Advances shall,
immediately upon the assignment or sale of such Acquired Customer Advances
and without any further action on the part of the Collateral Agent, be
released except to the extent of the interest of the Collateral Agent
in the proceeds of such assignment or sale.
Section 3.07 Collateral Monitoring and Audits.
(a) Custodian. Norwest Trust shall serve as agent and custodian for
the Collateral Agent pursuant to the Custodial Agreement.
(b) Collateral Audits. Administrative Agent may perform audits
of the Borrower's loan portfolio, Borrowing Base and the Collateral at
such times and on such terms and conditions as the Administrative Agent
may deem appropriate and the Administrative Agent may perform an audit
of the Borrower's loan portfolio, Borrowing Base and Collateral during
normal business hours and as often as the Administrative Agent may reasonably
request.
(c) Costs of Collateral Monitoring. All reasonable expenses and costs
incurred by the Administrative Agent in connection with (i) the audits
as prescribed in Section 3.07(b) shall be repaid to the Administrative
Agent by the Borrower on demand (provided that, prior to the occurrence
of a Default, the Borrower shall be required to pay the costs and expenses
incurred in connection with no more than two audits conducted during any
calendar year) and (ii) the services performed by the Custodian pursuant
to the Custodial Agreement shall be repaid to the Custodian by the
Borrower on demand.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to execute this Agreement and make Advances
to the Borrower, the Borrower hereby represents and warrants that:
Section 4.01 Corporate Existence. The Borrower is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Iowa, has the power and authority to own its Properties and assets and
to carry on its business as now being conducted, and is qualified or is
in the process of becoming qualified to do business in every jurisdiction
wherein such qualification is necessary.
Section 4.02 Corporate Powers and Authorization. The Borrower has
the power to execute, deliver and perform this Loan Agreement and each
Loan Document to which the Borrower is a party and the execution and
delivery of this Loan Agreement and each Loan Document to which the
Borrower is a party have each been duly authorized by all required
corporate action.
Section 4.03 Other Agreements; Defaults. The entry into and
performance of the terms hereof and each Loan Document will not violate
any provision of law, any order of any Governmental Body, the articles of
incorporation or bylaws of the Borrower (and any amendments thereto), or
any provision of any indenture, agreement, or other instrument to which
the Borrower is a party or by which the Borrower is bound. The Borrower
is not in default in any respect in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained
in any agreement or instrument material to its business.
Section 4.04 Financial Statements. The unaudited financial
statements of the Borrower as of and for the period ended November 30,
1996, previously furnished to the Administrative Agent fairly presented
the financial condition of the Borrower as of the dates thereof and the
results of its operations and its cash flow for the period then ended in
accordance with United States generally accepted accounting principles
consistently applied. The financial statements of the Borrower, when
and as furnished pursuant to this Agreement, shall be correct and
complete; shall fairly present the financial condition of the Borrower as
of the dates thereof, and the results of operations and cash flow for the
periods then ended; all balance sheets contained therein shall show
all known liabilities, direct or contingent, of the Borrower as of the
date thereof; and each financial statement shall be prepared in accordance
with United States generally accepted accounting principles
consistently applied. Each financial statement of the Borrower, when
prepared and furnished to the Banks or the Administrative Agent pursuant
to this Agreement, shall reflect all Properties and assets of the Borrower
as of the date thereof and the Borrower shall have good and marketable title
to all such Property and assets reflected in such financial statements
furnished to Banks or the Administrative Agent.
Section 4.05 Financial Condition. Except as noted in the unaudited
financial statements of the Borrower as of and for the period ended
November 30, 1996, previously furnished to the Banks, there has been
no material adverse change in the business, Properties or condition
(financial or otherwise) of the Borrower since February 29, 1996, the
date of the most recent audited financial statements of the Borrower
previously furnished to the Banks. The Borrower has no unusual long
term or contingent liabilities which are not disclosed in financial
statements or the notes thereto.
Section 4.06 Properties and Assets. The Borrower now has and will
maintain good and marketable title to all of its Properties and assets
reflected in the financial statements referred to in Section 4.05 herein
except for (a) assets subject to Capitalized Leases and (b) such assets
as have been disposed of since the date of such statements as no longer
used or useful in the conduct of its business, or as have been disposed
of in the ordinary course of business, and all such Properties and assets
are free and clear of all Liens other than the lessor's interest in such
Capitalized Leases and Permitted Borrower Liens.
Section 4.07 Actions and Proceedings. Except as otherwise
disclosed in Schedule 4.07 attached hereto to the Borrower's knowledge:
(a) there are no actions, suits or proceedings pending or, to the
Borrower's knowledge, threatened against or affecting the Borrower at law
or in equity, or before or by any Governmental Body which will or may
result in any material adverse change in the business operations,
prospects, Properties or assets of the Borrower; (b) the Borrower is
not in default with respect to any judgment, order, writ, injunction,
decree, rule or regulation of any Governmental Body; and (c) there
are no actions, suits, proceedings pending or, to the Borrower's
knowledge, threatened, seeking to enforce or seeking to establish
liability under any federal, state, municipal or local environmental,
hazardous waste or substance, toxic substance or underground storage law
or regulation which is pending or threatened against or affecting the
Borrower or any Collateral, at law or in equity, before or by any
Governmental Body.
Section 4.08 Tax Returns and Taxes. The Borrower has filed,
or caused to be filed, all federal, state, and local tax returns which
are required to be filed and said returns are correct; and has paid
or caused to be paid all taxes as shown on said returns and any
assessment received to the extent that such taxes have become due.
The Borrower does not know of any actual or proposed tax assessment
or any basis therefor and no extension of time for the assessment of
deficiencies in any federal or state tax has been granted to the Borrower.
Section 4.09 Assumed Names. The Borrower has not conducted its
business under any assumed name or tradename other than "Ag Services
Insurance".
Section 4.10 No Defaults. To the best of the Borrower's knowledge,
the Borrower is not in default with respect to any of its existing
Indebtedness, obligations or liabilities, whether matured or unmatured,
liquidated or unliquidated, direct or contingent, or joint and several.
Section 4.11 Compliance with Laws. The Borrower has materially
complied with all laws with respect to (i) any restrictions, specifications
or other requirements pertaining to products manufactured or sold by the
Borrower or to services rendered by the Borrower, (ii) the conduct of the
Borrower's business, and (iii) the use, maintenance and operation of real
and personal Properties owned or leased by the Borrower in the conduct
of the business of the Borrower where the failure to so comply would have
a materially adverse effect on the business, Properties or condition
(financial or otherwise) of the Borrower.
Section 4.12 No Misrepresentation. No representation, statement,
factual information or warranty made by or on behalf of the Borrower to
any Bank (whether contained herein or in any certificate or other document
furnished by or on behalf of the Borrower pursuant hereto) contains any
untrue statement of material fact or omits to state any material fact
necessary to make such representation, statement, factual information or
warranty not misleading in light of the circumstances under which it
was made.
Section 4.13 Legally Enforceable Loan Documents. This Loan
Agreement, the Collateral Documents, the Notes, the Loan Documents to which
the Borrower is a party and all other documents and instruments required
under this Agreement are, or when executed and delivered will be, valid,
binding and enforceable in accordance with their respective terms.
Section 4.14 Subsidiaries. The Borrower owns no Subsidiaries
other than Ag Acceptance.
Section 4.15 Hazardous Waste and Toxic Substance Storage. To the
best of its knowledge, no hazardous waste or substance or toxic substance
has been stored, used or disposed of on any Property owned or leased by
the Borrower.
Section 4.16 Use of Property. To the best of its knowledge, none of
the Property of the Borrower has been used as a hazardous waste substance
or toxic substance disposal site, as a landfill or a dump and the real
estate owned or leased by the Borrower is in compliance with all federal,
state, local and municipal environmental, hazardous waste or substance,
toxic substance and underground storage laws and regulations.
Section 4.17 Licenses and Permits. The Borrower has procured and is
now in possession of all licenses, qualifications or permits required by
federal, state or local laws which, if not procured, would have a material
adverse effect (a) on the operation of its business in one or more
jurisdictions wherein it is now conducting or proposes to conduct a
material portion of its business or (b) on the ability of the Borrower to
collect the Eligible Receivables and other payment obligations of its
customers or account debtors which are a part of the Collateral.
Section 4.18 Borrower's Chief Executive Office. The Borrower's chief
executive office is located in Cedar Falls, Iowa.
Section 4.19 Ownership of Collateral. The Borrower will be the
owner of all the Collateral covered from time to time by this Loan
Agreement and the Collateral Documents, free and clear of all Liens and
options, except for Permitted Borrower Liens and except for sales and
contributions of Acquired Customer Advances made in accordance with
the Asset Securitization Purchase and Contribution Agreement.
Section 4.20 Liens Under Collateral Documents. From and after
the filing of each Financing Statement, this Loan Agreement and the
Security Agreement will create valid and prior perfected first Liens
in the Collateral covered thereby, enforceable against the Borrower
and all third parties securing the payment of all Indebtedness purported
to be secured thereby and all filings and other actions necessary or
desirable to perfect and protect such Liens, as requested by any Bank,
will have been duly taken.
Section 4.21 Casualties Affecting Business or Property. As of the
date hereof, and to its actual knowledge, neither the business nor the
Property of the Borrower has been materially and adversely affected by
any fire, explosion, accident, drought, storm, hail, earthquake, embargo,
act of God or of the public enemy or other casualty (whether or not
covered by insurance).
Section 4.22 ERISA. The Borrower is in compliance in all material
respects with all applicable provisions of ERISA. Neither a Reportable
Event nor a Prohibited Transaction has occurred and is continuing with
respect to any Plan; no notice of intent to terminate a Plan has been
filed nor has any Plan been terminated; no circumstances exist which
constitute grounds under Section 4042 of ERISA entitling the PBGC to
institute proceedings to terminate, or appoint a trustee to administer,
a Plan, nor has the PBGC instituted any such proceedings; to its actual
knowledge, neither the Borrower nor any ERISA affiliate has completely or
partially withdrawn under Section 4201 or 4204 of ERISA from a Multi-
employer Plan; to its actual knowledge, the borrower and each ERISA
Affiliate have met their minimum funding requirements under ERISA with
respect to all of their Plans and the present fair market value of all Plan
assets exceeds the present vale of all vested benefits under each Plan, as
determined on the most recent evaluation date of the Plan and in accordance
with the provisions of ERISA and the regulations thereunder for calculating
the potential liability of the Borrower or any ERISA Affiliate to PBGC or
the Plan under title IV of ERISA; neither the Borrower nor any ERISA
Affiliate has incurred any liability to the PBGC under ERISA in connection
with the termination of any Plan.
Section 4.23 Use of Loan Proceeds. The Borrower will use the proceeds of
the Loans for the Borrower's working capital. The Borrower will not,
directly or indirectly, use any part of such proceeds for the purpose of
purchasing or carrying any margin stock within the meaning of Regulation U of
the Board of Governors of the Federal Reserve System or to extend credit to
any Person for the purpose of purchasing or carrying any such margin stock,
or for any purpose which violates, or is inconsistent with, Regulation X of
such Board of Governors.
Section 4.24 Consents. Except for such consents, acknowledgments and
agreements delivered by the Borrower pursuant to Section 6.01(k) hereof, if
any, each of which is in full force and effect, no consent, approval or
authorization of or declaration, registration or filing with any
Governmental Body or any nongovernmental Person or entity, including,
without limitation, any creditor, lessor or stockholder of the Borrower,
is requiredon the part of the Borrower in connection with the execution,
delivery and performance of this Loan Agreement, the Notes and the Loan
Documents or transactions contemplated hereby or as a condition to the
legality, validity or enforceability of this Loan Agreement, the Notes or
any of the Loan Documents.
Section 4.25 Borrowing Base. Unless otherwise represented in the
Servicer's Daily Report, each Acquired Customer Advance is, as of the date
it is acquired by or contributed to Ag Acceptance, and unless otherwise
reflect in a Servicer's Daily Report delivered to the Administrative
Agent, an Eligible Advance. The computations of the Borrowing Base set
forth in each Borrowing Base Certificate are true and correct.
ARTICLE V
[INTENTIONALLY OMITTED]
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01 Conditions Precedent to Initial Advances. No Bank shall
be required to make its initial Line of Credit Loan hereunder unless prior
to or concurrently with the date of each Line of Credit Loan the following
conditions exist:
(a) Articles of Incorporation and Bylaws. The Banks shall have
received copies of the current Articles of Incorporation and Bylaws of the
Borrower and all amendments thereto as such exist on the date hereof,
certified by an appropriate corporate officer and, immediately upon any
change or amendment, a copy of such change or amendment certified
by an appropriate corporate officer specifying each such change.
(b) Corporate Resolutions. The Banks shall have received copies of
(i) resolutions of the Board of directors of the Borrower, certified by
its President, Secretary or Assistant Secretary, authorizing the execution
of this Agreement and each Loan Document and (ii) all documents evidencing
other necessary corporate action in connection with the Borrower's
execution of this Agreement and Loan Documents and the performance of
the agreements thereunder.
(c) Incumbency Certificate. The Banks shall have received a
certificate of the Secretary of the Borrower certifying the names and
true signatures of the officers of the Borrower authorized to sign the
Loan Documents and other documents to be delivered by the Borrower under
any Loan Document.
(d) Loan Agreement. The Banks shall have received this Agreement, duly
executed by all the parties hereto.
(e) Notes. Each Bank shall have received each Note payable to it,
duly executed by the Borrower, and shall have confirmed to the
Administrative Agent its receipt of each such Note.
(f) Collateral Documents. The Banks shall have received the Security
Agreement and each Collateral Document duly executed by each of the parties
thereto, together with:
(i) acknowledgment copies of Financing Statements, duly filed under the
Uniform Commercial Code of all jurisdictions as may be necessary or, in the
opinion of the Banks, desirable or required to perfect the Liens created h
ereby or by the Security Agreement,
(ii) certified copies of Request for Information or Copies
(form UCC-11), or equivalent reports, listing the Financing Statements
referred to in paragraph (i) above and all other effective financing
statements that name the Borrower as debtor and that are filed in the
jurisdictions referred to in paragraph (i) above, together with copies
of such other financing statements (none of which shall cover the Collateral
purported to be covered by the Security Agreement unless subordinated to
Liens therein in favor of the Banks pursuant to a Subordination Agreement),
(iii)evidence of the completion of all other recordings and
filings as may be necessary or, in the opinion of the Banks, desirable
or required to perfect the Liens created by the Loan Documents,
(iv) evidence of the insurance required by the terms of the
Loan Documents,
(v) written confirmation from the Custodian of delivery to it
of each Customer Note included as part of the Borrowing Base reflected
in the Borrowing Base Certificate furnished to the Banks pursuant to
Section 6.01(1) hereof and the Pledged Shares and the Seller Note, and
(vi) evidence that all other actions necessary or, in the opinion
of the Banks, required or reasonably desirable to perfect and protect the
Liens created by the Loan Documents as prior perfected first Liens have
been taken.
(g) Loan Documents and Other Documents. The Banks shall have received
each Loan Document duly executed, accepted, consulted to or acknowledged
by or on behalf of each and every party thereto and, where appropriate,
duly recorded or filed with the appropriate Governmental Body.
(h) Other Documents and Action. All documents delivered hereunder and
all actions taken by any party hereto provided for hereunder shall be
satisfactory as to form and substance to counsel for each Bank and the
Administrative Agent.
(i) Reimbursement of Recording Fees and Expenses. All fees, expenses
and amounts required under Article X hereof to be paid by the Borrower in
connection with the preparation, negotiation, review and administration of
this Agreement and each Loan Document shall have been reimbursed and paid
to the Banks.
(j) Loan Fees. The Administrative Agent and the Banks shall each
have received the Line of Credit Facility Fee and the Administrative Agent's
fee required under Section 12.11.
(k) Other Consents and Agreements. The Banks shall have received such
consents, acknowledgments and agreements of lessors, consignees of the
Borrower and other third parties as the Banks may, in their sole discretion,
request.
(l) Borrowing Base Certificate. The Banks shall have received a
Borrowing Base Certificate dated and completed with information as of the
date preceding the initial Borrowing Date, duly executed and completed by
the Borrower.
(m) Opinion of Borrower's Counsel. The Banks shall have received the
favorable written opinion of legal counsel to the Borrower in the form of
Exhibit F attached hereto.
(n) Closing Certificate. The Banks shall have received certificates,
signed by the Vice President of the Borrower, to the effect that (i) there
has not occurred thereon or prior thereto any adverse material change in the
financial position of the Borrower, reflected by the warranties and
representations made in Article IV hereof; (ii) no Event of Default
hereunder has occurred or is continuing nor has any event occurred or is
continuing which, but for the lapse of time, or service of notice or both,
would constitute an Event of Default hereunder; (iii) all Customer Notes
which serve as a basis for Eligible Receivables included in the Borrowing
Base Certificate delivered to the Administrative Agent pursuant to Section
6.01(l) hereof have been delivered to the Collateral Agent; (iv) the Liens
in Customer Collateral required as security for Customer Notes have been
granted to the Borrower and are validly and properly perfected first Liens
in favor of the Borrower; and (v) the representations and warranties set forth
in Article VI hereof and in Section 3.01 of the Security Agreement are true
and correct on or at the time with the same force and effect as though the
representations and warranties had been made as of such time, except to the
extent such representations and warranties expressly relate to an earlier
date.
(o) Financial Statements. The Banks shall have received all financial
statements provided for in this Agreement, including, without limitation,
the unaudited financial statements of the Borrower as of and for the period
ended November 30, 1996.
(p) Credit Policy. The Banks shall have received a copy of the Credit
Policy accompanied by a certificate of the Borrower that the Credit Policy
has not been modified or changed and is then in effect.
(q) Subordination Agreements. The Banks shall have received executed
Subordination Agreements from each secured party holding a Lien in the
Collateral permitted under Section 8.02(i) hereof.
(r) Asset Securitization Documents. The Banks shall have received
copies of each Asset Securitization Document duly executed by each of the
parties thereto, and the Banks shall have received satisfactory confirmation
and evidence that all conditions precedent to the effectiveness of each
Asset Securitization Document shall have occurred and that the Asset
Securitization Documents have all become effective.
(s) Assignment and Acceptance Certificate. The Administrative Agent
shall have received, in form and consent satisfactory to the Administrative
Agent, from each of the Prior Banks assigning to Rabobank the entire
Commitment under the Prior Loan Agreement of such Prior Bank upon payment of
the entire amount of the Borrower's Indebtedness to such Prior Bank under the
Prior Loan Agreement.
Section 6.02 Conditions Precedent to All Advances. The obligation of
each Bank to make each Advance (including its initial Advance) shall be
subject to the further conditions set forth below (which shall be in addition
to and not in limitation of any other conditions set forth elsewhere herein):
(a) Compliance. Both before and after giving effect to such Advance
(i) the Borrower shall be in compliance with all the terms, covenants and
conditions hereof and of the Loan Documents, (ii) there shall exist no
Default, (iii) the representations and warranties contained herein and in
the Loan Documents to which the Borrower is a party shall be true and
correct with the same effect as through such representations and warranties
had been made on the date an advance is to be made, (iv) all conditions
precedent specified in Section 6.01 hereof shall have been fulfilled, and
(v) the aggregate outstanding principal amount of the Loan shall not exceed
the then applicable Total Line of Credit Commitment.
(b) Representations. The following statements shall be true:
(i) The representations and warranties of the Borrower contained
in the Loan Documents are correct on and as of the date of such Advance as
though made on and as of such date, except to the extent that departures
therefrom shall theretofore have been agreed to in writing by the Banks; and
(ii) No event has occurred and is continuing, or would result
from such Advance, that constitutes a Default.
In the case of each Advance other than the initial Advance hereunder, each
request for an Advance shall be deemed to be a certification by the Borrower
as to the matters set forth in clauses (i) and (ii) above as of the date
of such request.
(c) Other Consents and Approvals. The Banks shall have received
such consents, approvals, documents or opinions as either Bank shall
reasonably request.
(d) Borrowing Base Certificate and Borrowing Base Evaluation Report.
The Administrative Agent shall have received a completed Borrowing Base
Certificate in connection with each Advance request as required under
Section 2.05(a) hereof.
Section 6.03 Waiver of Conditions Precedent. All conditions and
requirements of this Agreement relating to the obligations of the Banks
to make any Advance (including, without limitation, the conditions set forth
in Section 6.01 and Section 6.02 hereof) are for the sole benefit of the
Banks; and no other Person (including, without limitation, the Borrower)
shall have the right to rely on the making of any Line of Credit Loan as
any evidence, indication or confirmation that any or all of such conditions
or requirements have been satisfied or that any such conditions precedent
or requirements have not been waived at any time. The Majority Banks shall
have the absolute right, in their sole discretion and subject to the
provisions of Section 13.05 hereof, to waive any such condition or
requirement, without notice to or approval of any Person, which is a
condition precedent to making any Advance. Any such waiver shall be
subject to such terms and conditions as may be required by the Majority Banks.
ARTICLE VII
AFFIRMATIVE COVENANTS
From the date hereof, until payment in full of the principal and
interest on the Notes and of all other Indebtedness and liabilities of the
borrower hereunder to each Bank and the termination of all Commitments,
the Borrower covenants and agrees that it will:
Section 7.01 Corporate Existence. Do or cause to be done all things
necessary to preserve and keep in full force and effect its existence,
rights, and franchises, and to comply with all laws applicable thereto;
conduct and operate its business substantially as it exists on the date
hereof; and from time to time make, or cause to be made, all needful and
proper repairs, renewals and replacements, betterments and improvements
so that the business carried on by it may be properly and advantageously
conducted at all times.
Section 7.02 Insurance. Maintain insurance with responsible companies,
satisfactory to the Banks, in such amounts and against such risks as Bank
may reasonably require with each Bank or the Collateral Agent for the
ratable benefit of the Banks named as co-insured as its interest may appear;
supply the Banks with evidence of such insurance as any Bank may reasonably
request; and cause each insurance policy that secures any Collateral to be
endorsed or otherwise amended to include a lender's loss payable endorsement
in form and substance reasonably satisfactory to the Banks and to name the
Collateral Agent as an additional insured.
Section 7.03 Reporting Requirements. Furnish to the Administrative
Agent:
(a) Copies of all reports, documents, certificates and other written
information required to be furnished to Triple-A, CapMAC or CFS
(individually or in agency capacity) by the Borrower or Ag Acceptance under
any Asset Securitization Document, including, without limitation, each
Servicer's Daily Report, each Settlement Report (as defined in the Asset
Securitization Credit Agreement), the certificate of the servicing officer
required to be furnished to CapMAC or CFS under Section 6.01(c) of the Asset
Securitization Credit Agreement and the Officer's Certificate required to
be furnished to CapMAC or CFS under Section 6.01(d) of the Asset
Securitization Credit Agreement, at the same time such reports, documents,
certificates and other written information are furnished to CapMAC or CFS.
The Administrative Agent and each Bank shall be entitled to rely on such
reports, documents, certificates and other written information and the
representations and certifications made therein to the same extent that
CapMAC or CFS may rely thereon.
(b) Within 30 days after the end of each quarter, a classification
report, in form, content and substance satisfactory to the Administrative
Agent and each Bank, setting forth information and supporting documentation
with respect to the classification status of the Customer Loans and Acquired
Customer Advances as of the last day of such month.
(c) Promptly after request therefor by any Bank, such other
information regarding the operations, business affairs and financial
condition of the Borrower as any Bank may reasonably request.
Section 7.04 Taxes and Claims. Duly pay and discharge, or cause to
be paid and discharged, all taxes, assessments and other governmental
charges imposed upon it or upon its Properties or any part thereof, or upon
the income or profits therefrom, as well as all claims for labor, materials
or supplies which if unpaid might by law become a Lien or charge upon any
Property of the Borrower, provided the Borrower shall not be required to
(a) pay any tax, assessment or other charge or (b) discharge or remove a
Lien, encumbrance or charge so long as the Borrower shall contest, in good
faith, the existence, amount or validity thereof, the amount of damages
caused thereby or the extent of its liability therefor by appropriate
proceeding which shall operate during the pendency thereof to prevent (i) the
collection of, or other realization upon the tax, assessment, charge, lien
or encumbrance so contested, (ii) the sale, forfeiture or loss of any
Property of the Borrower and (iii) any interference with the use or
occupancy of any Property of the Borrower and provided the Borrower shall
have maintained adequate reserves therefor in accordance with United States
generally accepted accounting principles.
Section 7.05 Accounts Receivable; Inventory Sales. Collect its
accounts receivable and sell or lease its inventory only in the ordinary
course of its business.
Section 7.06 Maintenance of Property. Maintain its inventory,
equipment and other properties in good condition and repair (normal wear
and tear excepted) and pay and discharge and cause to be paid and discharged
when due, all costs and repairs or maintenance of the same and cause to be
paid all rental or mortgage payments due on such real estate. The Borrower
hereby agrees that, in the event it fails to pay or cause to be paid any
such payment, any Bank may do so, and the Borrower will reimburse such Bank
for such payment immediately upon request therefor.
Section 7.07 Books and Records; Inspections and Examinations. Keep
accurate books of record and account for itself in accordance with United
States generally accepted accounting principles consistently applied and,
upon request of any Bank, will give any representative of any Bank access
during normal business hours to, and permit such representative to examine,
copy or make extracts from, any and all such books, records and documents
in its possession, to conduct audits of the Borrower's loan portfolio,
Borrowing Base and Collateral, to inspect any of its properties and to
discuss with its principal officers, all at such times and as often as it
may reasonably request.
Section 7.08 Environmental. At all times comply with all applicable
environmental, hazardous waste or substance, toxic substance and underground
storage laws and regulations and will obtain any permits, licenses or
similar authorizations to construct, occupy, operate or use any buildings,
improvements, fixtures or equipment forming a part of the real estate at any
time owned or leased by the Borrower or any of its other real property by
reason of any applicable environmental, hazardous waste or substance, toxic
substance or underground storage laws or regulations, and will not knowingly
permit the real estate at any time owned or leased by the Borrower or any
of its property to be used to store or dispose of any hazardous waste or
substance, toxic substances or any solid waste and will take all steps
necessary to insure that no hazardous waste or substances, toxic substances
or solid wastes are disposed of or otherwise released on or to the real
estate at any time owned or leased by the Borrower.
Section 7.09 Compliance with Laws. Comply with the requirements of
applicable laws, rules, regulations and orders of any Governmental Body,
provided the Borrower shall not be required to comply with any statute, law,
rule, regulation, ordinance or order of any Governmental Body so long as
the Borrower shall contest, in good faith, the existence, amount or
validity thereof, the amount of damages caused thereby or the extent of
its liability therefor by appropriate proceedings which shall operate during
pendency thereof to prevent (i) the collection of, or other realization upon
any tax, assessment, charge, lien or encumbrance so conducted, (ii) the
sale, forfeiture or loss of any Property of the Borrower, and (iii) any
interference with the use or occupancy of any Property of the Borrower and
provided the Borrower shall have maintained adequate reserves therefor in
accordance with United States generally accepted accounting principles
consistently applied.
ARTICLE VIII
NEGATIVE COVENANTS OF BORROWER
From the date hereof, until payment in full of the principal and
interest on the Notes, and of all other Indebtedness and liabilities of the
Borrower hereunder to each Bank and the termination of all Commitments,
Borrower covenants and agrees that it will not:
Section 8.01 Indebtedness. Incur, permit to remain outstanding,
assume or in any way become committed for any Indebtedness other than:
(a) Indebtedness incurred hereunder, (b) trade debt Indebtedness to trade
creditors incurred by it in the usual and ordinary course of its business
and on terms customarily extended by such trade creditors in the ordinary
course of their business, (c) Subordinated Indebtedness and (d) Indebtedness
otherwise permitted under Section 8.03 hereof.
Section 8.02 Liens. Incur, create, assume or suffer to exist any
Lien of any nature whatsoever on any Property or assets, now or hereafter
owned by it other than (a) Liens arising under workers' compensation,
unemployment insurance and social security laws; (b) Liens, deposits or
pledges to secure the performance of contracts, statutory obligations or
surety on appeal bonds, or to secure indemnity, performance or other similar
bonds arising in the ordinary course of its business; (c) Liens imposed by
law, such as carriers', warehousemen's, mechanics', materialmens', vendors'
and Landlords' Liens incurred in good faith in the ordinary course of its
business with respect to obligations not then delinquent or that are being
contested in good faith by appropriate proceedings and for which adequate
reserves have been established by the Borrower; (d) Liens arising out of a
judgment or award (i) the validity of which is being currently and
diligently contested on a timely basis in good faith by appropriate
proceedings (provided that the enforcement of any Liens arising out of such
proceedings shall be stayed during such proceedings), and (ii) for which
adequate reserves shall have been established; (e) Liens against real
property for taxes or assessments or other governmental charges or levies,
not yet due and payable or delinquent or, if due and payable or delinquent,
which are being contested in good faith by appropriate proceedings and
for which adequate reserves have been established by the Borrower; (f)
purchase money Liens in Property (other than Inventory or Receivables)
acquired or held in the ordinary course of business to secure the purchase
price of such Property or to secure Indebtedness incurred solely for the
purpose of financing the acquisition of such Property by the Borrower,
provided that (i) such purchase money Liens secure Indebtedness permitted
under Section 8.01(b) hereof, (ii) the Indebtedness secured thereby does
not exceed 100% of the lesser of the cost or fair market value of such
Property at the time of such acquisition, (iii) such purchase money Liens
are incurred, and the Indebtedness secured thereby is created, within 30
days after such acquisition, and (iv) each purchase money Lien attaches
only to the Property so acquired and secures only the Indebtedness incurred
to finance the acquisition of such Property; (g) Liens securing the
Indebtedness to the Banks incurred hereunder; (h) Liens securing
Subordinated Indebtedness; and (i) Liens in Customer Loans and Related
Security granted to secure the Borrowers obligation as servicer under the
Asset Securitization Credit Agreement; provided in the case of each Lien
described in clause (a), (b), (c), (d), (h) and (i), which attaches to any
Collateral, such Lien is subordinate and inferior to the Lien in the
Collateral granted to the Banks hereunder or under any Collateral Document.
Section 8.03 Guarantees and Indemnification. Assume, guarantee,
endorse, pledge its credit or otherwise in any way become or be responsible
or liable, directly or indirectly, for any obligation of any other Person
except for: (a) the endorsement of negotiable instruments in the ordinary
course of business, (b) indemnity agreements in favor of its officers or
directors and (c) indemnity agreements in favor of any payor of a negotiable
instrument made payable to the Borrower in substitution for a prior
negotiable instrument made payable to the Borrower and another Person,
provided the aggregate amount of the Borrower's indemnification obligations
otherwise permitted under this Section 8.03(c) shall at no time exceed
$200,000.
Section 8.04 Subsidiaries and Affiliates. Form, acquire, establish or
incorporate any Subsidiary or Affiliate other than Ag Acceptance.
Section 8.05 Mergers and Consolidations. Consolidate with or merge
into, or with, any other corporation or Person; change its corporate name;
dissolve, wind-up or liquidate; discontinue any substantial portion of its
business; sell, transfer, assign or lease or otherwise dispose of any
substantial part of its assets other than in the ordinary course of its
business; to sell or otherwise dispose of any notes or accounts receivables
or Indebtedness owed to the Borrower from any account debtor or any assets
or Properties necessary or desirable for proper conduct of its business;
or agree to do any of the foregoing, except for sales and other dispositions
of assets permitted under Section 8.12 hereof.
Section 8.06 Investments and Advances. Purchase for cash any stock,
other securities or evidence of indebtedness of, make any investment or
acquire any interest whatsoever in, make any loan or advances to, or acquire
any substantial part of any assets or stock of any Person except (a) direct
obligations of the United States or any agency thereon with maturities of
one year or less from the date of acquisition, (b) repurchase agreements of
a bank which at the time of investment or purchase has capital in excess of
$50,000,000, which are fully collateralized or secured by a properly
perfected first Lien in or pledge of direct obligations of the United States
or any agency thereof, (c) certificates of deposit of a bank which at the
time of investment or purchase has capital in excess of
$50,000,000, (d) temporary advances to employees permitted under Section 8.10
hereof, (e)Eligible Receivables evidenced by Customer Notes, (f) investments
in assets acquired in loan collection actions or proceedings to enforce
payment of Indebtedness owed to the Borrower in which the Borrower uses cash
to retain title to such assets, and (g) a purchase or acquisition for cash of
an entity or assets beyond the normal course of the Borrower's business
effected with the consent and approval of the Board of Directors or other
active governing body of such entity or seller of such assets, and with the
duly obtained approval of such shareholders or other holders of equity
interests of such entity or seller of such assets may be required to obtain,
so long as (i) the aggregate amount invested or paid in connection
with all such purchases and acquisitions shall at no time exceed
$5,000,000.00 and (ii)immediately prior to and after the consummation of such
purchase or acquisition no Default shall exist.
Section 8.07 [Intentionally Omitted.]
Section 8.08 Misstatements or Omissions. Furnish the Administrative
Agent or any Bank any certificates or document that will contain any untrue
statement or material fact or that will omit to state any material fact
necessary to make it not misleading in light of the circumstances under which
it was made.
Section 8.09 Transactions with Affiliates. Enter into or permit to
remain in effect of outstanding any transaction, including, without
limitation, the purchase, sale, lease or exchange of property, the rendering
of any service, or the making of any loan or advance to any Affiliate, except
in the ordinary course of business and pursuant to the reasonable
requirements of the business of the Borrower and the Affiliate and upon terms
found by the Board of Directors of the Borrower to be fair and reasonable and
no less favorable to the Borrower than would obtain in a comparable
arm's-length transaction with a Person not an Affiliate.
Section 8.10 Loans, Advances, Compensation and Fees. Pay any
unreasonable or excessive bonuses, fees, salaries or wages or compensation or
make any loans or advances in any form to any of its employees, officers or
directors except forreasonable and necessary temporary advances made to
employees in the ordinary course and furtherance of the Borrower's business.
Section 8.11 Accounting Principles; Fiscal Year; Tax Year. Make any
significant change in accounting treatment or reporting practices or change
its Fiscal Year for financial reporting purposes or change its tax year.
Section 8.12 Sale of Assets. Sell, exchange, lease, assign, transfer
or otherwise dispose of any Property to any Person, except: (a) inventory
disposed in the ordinary course of business, (b) the sale or other
disposition of assets no longer used or useful in the conduct of its
business and (c) sales of Customer Loans and Related Security made pursuant
to the Asset Securitization Purchase and Contribution Agreement.
Section 8.13 Payments on Indebtedness. Make any payments with respect
to principal or interest on any of its Indebtedness to Persons other than
the Banks prior to the stated maturity or other due date thereof or prior
to the due date of any scheduled installment thereof except that the
Borrower make any prepayment on its Indebtedness permitted under
Section 8.01(b) prior to the occurrence of a Default.
Section 8.14 ERISA Compliance. Permit (a) any Plan to (1) engage
in any Prohibited Transaction, (ii) incur any Accumulated Funding Deficiency
whether or not waived, or (iii) terminate any Plan in a manner which would
result in the imposition of a Lien on the Property of the Borrower pursuant
to Section 4068 of ERISA; or (b) permit the present value of all vested
benefits under any Plan to exceed the present fair market of the
assets of such Plan.
Section 8.15 Nature of Business. Change the nature of the business
in which it is presently engaged; nor will the Borrower purchase or invest
in, directly or indirectly, any substantial amount of assets or Property
other than assets or Property useful and to be used in its business as
presently conducted.
Section 8.16 Prepayment of Subordinated Indebtedness. Prepay any
of its Subordinated Indebtedness, exercise any option or right of redemption
of any Subordinated Indebtedness, modify or enter into any agreement as a
result of which the terms of payment thereof or of any Indebtedness to
Persons other than the Banks which is otherwise permitted under Section 8.01
are waived and modified or pay, redeem or repurchase any Subordinated
Indebtedness contrary to the original terms of such Subordinated Indebtedness.
ARTICLE IX
[INTENTIONALLY OMITTED]
ARTICLE X
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
Section 10.01 Events of Default. The occurrence of any one or more
of the following events shall be an "Event of Default" hereunder:
(a) Misrepresentations. Any representation or warranty of the Borrower
knowingly made herein or under any Loan Document shall prove to be false or
misleading in any material respect when made; or any report, certificate,
financial statement or other document or instrument furnished by the
Borrower in connection with this Loan Agreement or any Advance hereunder
shall prove to be false or misleading in any material respect.
(b) Principal Payment Defaults. Default in the payment of the
principal of any Loan or Note as and when due and payable.
(c) Other Payment Defaults. Default in the payment of interest on
any Loan or Note or any fees, costs or expenses required to be made under
this Loan Agreement or any Loan Document as and when due and payable and
such default shall continue unremedied for a period of 10 days.
(d) Covenant Default. The Borrower shall default in the due observance
or performance of any covenant, condition or agreement contained in this
Loan Agreement and such default shall continue unremedied for a period of
10 days.
(e) Loan Document Default. The Borrower shall default in the due
observance or performance of any covenant, condition or agreement contained
in any Loan Document to which the Borrower is a party or any event of
default under any Loan Document shall occur and such default shall continue
unremedied for a period of 3 days.
(f) Other Defaults. Default by the Borrower shall occur with respect
to any agreement, obligation or Indebtedness of the Borrower to or with a
Person and such default shall continue for more than a period of grace, if
any, specified therein.
(g) Insolvency Proceedings; Bankruptcy. The Borrower shall become
insolvent or apply for or consent to the appointment of a receiver, trustee
or liquidator, or shall admit in writing its inability to pay its debts as
they mature, or shall make a general assignment for the benefit of creditors
or be adjudicated a bankrupt or insolvent, or file a voluntary petition
in bankruptcy, or a petition or answer seeking reorganization or an
arrangement with creditors to take advantage of any bankruptcy,
reorganization, insolvency, readjustment of debt, dissolution or
liquidation law or statute; or an order, judgment or decree shall be
entered without the application, approval or consent of the debtor by any
court of competent jurisdiction approving a petition seeking a
reorganization of the Borrower or of all or a substantial part of the
properties or assets of the Borrower or appointing a receiver, trustee
or liquidator for the Borrower, and such order, judgment or decree shall
continue unstayed and in effect for any period of 30 days.
(h) Judgments. Final judgment for the payment of money in excess of
$1,000,000 shall be rendered against the Borrower and (i) the same shall not
be fully covered by insurance and the same shall remain undischarged for a
period of 30 consecutive days during which execution shall not be
effectively stayed or (ii) enforcement proceedings shall have been initiated.
(i) Adverse Changes. Any change in the financial condition of the
Borrower shall occur which would have a materially adverse effect on the
ability of the Borrower to repay any Note hereunder.
(j) Invalid Obligations or Liens. Any Loan Document or any other
instrument or document to be issued or contemplated hereunder fails to be a
valid act or obligation of the Borrower or any other legal entity or Person,
as the case may be, in accordance with its terms or any Liens granted by
Borrower in Collateral shall be invalid, unenforceable or unperfected.
(k) Change in Control. A Change in Control shall occur.
(l) ERISA. If any of the following events shall occur or exist with
respect to the Borrower or any Plan: (i) any Prohibited Transactions shall
occur; (ii) any Reportable Event shall occur with respect to any Plan; (iii)
the filing under Section 4041 of ERISA of a notice of intent to terminate
a Plan or the termination of any Plan; (iv) any event or circumstance
exists which might constitute grounds entitling the PBGC to institute
proceedings under Section 4042 of ERISA or the termination of, or for the
appointment of a trustee to administer, any Plan or the institution by the
PBGC of any such proceedings; or (v) any complete or partial withdrawal
under Sections 4201 or 4204 of ERISA from a Plan or the reorganization,
insolvency or termination of any Plan; complete or partial withdrawal from
any Plan; any transaction set forth in Section 406 of ERISA or Section 4975
of the Internal Revenue Code of 1986, as amended, shall occur; notice of
intent to terminate any Plan shall be filed, or any such Plan shall be
terminated; or circumstances shall exist which constitute grounds entitling
the pension benefit guaranty corporation or any successor entity (the "PBGC")
to institute proceedings to terminate any pension plan which is covered by
Title IV of ERISA or the PBGC shall institute such proceedings, and in each
case above, such event or condition, together with all other such events or
conditions, if any, could subject the Borrower to any tax, penalty or other
liability to a Plan, the PBGC or otherwise (or any combination thereof)
which in the aggregate may exceed Two Hundred Thousand Dollars ($200,000).
(m) Acceleration of Other Indebtedness. Any Indebtedness of the
Borrower shall become due before its stated maturity, whether by
acceleration, demand, mandatory prepayment or otherwise, or shall become
due by its terms and shall not be promptly paid.
(n) Default under Asset Securitization Documents. An event of default
or termination event (however defined) shall occur under any Asset
Securitization Document.
(o) Default Ratio or Remarketing Ratio. As of any date of
determination, either of the following shall have occurred; (i) the Default
Ratio shall exceed ten percent (10.0%) or (ii) the Remarketing Ratio shall
exceed thirty percent (30.0%).
(p) Dividends. The Borrower shall pay or declare any dividend or other
distribution with respect to its capital stock after giving effect to which,
the aggregate amount of dividends made in such fiscal year would exceed 10%
of Consolidated Net Income.
(q) Consolidated Pre-Tax Margin and Consolidated Net Worth. (i) As of
the end of any of the first three fiscal quarters of any Fiscal Year or for
any Fiscal Year, the Borrower's Consolidated Pre-Tax Margin shall be less
than two percent (2.0%), or (ii)as of the end of any fiscal quarter of any
Fiscal Year, the Borrower's Consolidated Net Worth shall be less than
$35,000,000.
(r) Certain Amendments, Modifications and Waivers. The Borrower shall
amend or modify its Articles of Incorporation or By-Laws or the reserve
percentages or of classification sections of the Credit Policy or there shall
be an amendment, modification or waiver of, or waiver of any non-compliance
with, any provision of any Asset Securitization Document or the Seller Note
made without the prior written consent of the Administrative Agent and the
Majority Banks.
Section 10.02 Rights and Remedies.
(a) Termination of Commitments. Upon the occurrence of a Default, the
Administrative Agent may (with the consent of the Majority Banks), and upon
the request of the Majority Banks shall, declare all Commitments to be
terminated, whereupon the same shall forthwith terminate.
(b) Acceleration. Upon the occurrence of and during the continuance
of an Event of Default (other than an Event of Default specified in Section
10.01(f) hereof), the Administrative Agent may (with the consent of the
Majority Banks), and upon the request of the Majority Banks shall, declare
all Indebtedness of the Borrower to each Bank hereunder and each Note to be
forthwith due and payable, whereupon all Indebtedness to each Bank
hereunder and each Note, both as to principal and interest, shall become
and be forthwith due and payable, without presentment, demand, protest or
other notice of any kind to the Borrower, all of which are expressly
waived, anything contained herein or in any Loan Document or any other
agreement, document or instrument to be issued or contemplated hereunder
to the contrary notwithstanding. Upon the occurrence of an Event of Default
specified in Section 10.01(f) hereof there shall be an automatic termination
of all Commitments and acceleration of all Indebtedness of Borrower to the
Banks with the same force and effect as a declaration by Administrative
Agent as above provided.
(c) Protection and Enforcement of Rights. Upon the acceleration of any
Indebtedness as provided in Section 10.02(b) hereof, each Bank may proceed
to protect and enforce its rights either by suit or action in law or equity
or by other appropriate proceedings, whether for the specific performance
(to the extent permitted by applicable law or equitable principles) of any
covenant or agreement contained in this Loan Agreement, any Loan Document,
any other agreement, document or instrument to be issued or contemplated
hereunder, any note or any instrument evidencing any Indebtedness of the
Borrower, or in aid of the exercise of any power granted in this Loan
Agreement, any Loan Document, any other agreement, document or instrument
to be issued or contemplated hereunder, any note or any such instrument
evidencing any Indebtedness of the Borrower, and may proceed to enforce
the payment of each Note and all other Indebtedness of the Borrower to such
Bank and may enforce any other legal or equitable right which such Bank may
have hereunder, under any Note, any Loan Document, or any other agreement,
document or instrument to be issued or contemplated hereunder. The
foregoing provision is an addition to and not a limitation of any right that
any Bank may have under any other agreement, document, or instrument.
(d) Right of Setoff; Direct Payment. Upon the occurrence and during the
continuance of any Event of Default, each Bank is hereby authorized at any
time and from time to time, without notice to the Borrower (any such notice
being expressly waived by the Borrower), to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by such Bank to or for
the credit or the account of the Borrower against any and all of the
Indebtedness of the Borrower now or hereafter existing under this Loan
Agreement or such Bank's Note or any other Loan Document, irrespective of
whether or not the Administrative Agent or such Bank shall have made any
demand under this Agreement or such Bank's Note or such other Loan Document
and although such obligations may be unmatured. Each Bank agrees
promptly to notify the Borrower (with a copy to the Administrative Agent)
after any such setoff and application, provided that the failure to give
such notice shall not affect the validity of such set off and application.
The rights of each Bank under this Section 10.02(d) are in addition to other
rights and remedies (including, without limitation, other rights of
setoff) which each such Bank may have.
(e) Application of Amounts Received. In the event that any Note shall
have been declared due and payable pursuant to the provisions of this
Section 10.02, the Banks and the Borrower agree that any funds received
from or on behalf of the Borrower by the Administrative Agent or any of the
Banks (whether as proceeds of, or realization on, Collateral or otherwise)
shall be remitted to the Administrative Agent, and shall be applied by the
Administrative Agent in payment of the costs, expenses and Indebtedness in
the following manner and order: (i) first, to reimburse the Administrative
Agent and the Banks for any Loan Fees, expenses and costs which the Borrower
is obligated to pay as set forth in Article XI and which have not been
reimbursed at the time application of funds is to be made; (ii) second, to
the payment pro rata based on the Applicable Percentage, according
to the aggregate unpaid principal balance of each Bank's share of all Loans,
of interest then due on such Loans; (iii) third, to the payment pro rata
based on the Applicable Percentage
according to the aggregate unpaid principal balance of each Bank's share of
all Loans of the principal amount of each Bank's share of Advances until the
principal amount of the Loans shall have been repaid in full; (iv) fourth,
to the payment pro rata based on the Applicable Percentage of all other
amounts due to the Banks hereunder and under the Loan Documents (including
any prepayment penalties then due); and (v) fifth, any remaining funds
shall be returned to the Person legally entitled thereto after satisfaction
of all of the Borrower's Obligations hereunder.
(f) Waiver of Defaults. Except as otherwise specifically provided
by the provisions of Section 13.05 hereof or any other provision hereof,
the Administrative Agent may (with the consent of the Majority Banks), and
shall, if requested by the Majority Banks, by written notice to the
Borrower, at any time and from time to time, waive in whole or in part,
absolutely or conditionally, any Event of Default which shall have occurred
hereunder, or under any Note. Any such waiver shall be for such period and
subject to such conditions or limitations as shall be specified in any such
notice. In the case of any such waiver, the rights and obligations of the
Borrower and the Banks under the Loan Documents shall be otherwise
unaffected, and any Event of Default so waived shall be deemed to be cured
and not continuing to the extent and on the conditions or limitations set
forth in such waiver, but no such waiver shall extend to any subsequent or
other Event of Default, or impair any right, remedy or power consequent
upon any such other Event of Default.
ARTICLE XI
EXPENSES AND COSTS
The Borrower agrees to pay Faegre & Xxxxxx LLP fees of $10,000.00
plus all of their reasonable costs, expenses and related charges paid or
incurred as counsel to the Administrative Agent and the Collateral Agent
(including all long distance telephone charges, overnight delivery charges
and other out-of-pocket expenses and charges) in connection with the
preparation, negotiation, execution and delivery of this Loan Agreement and
the Loan Documents executed in connection with this Loan Agreement. The
Borrower agrees to pay on demand (a) all reasonable fees, costs, expenses
and related charges incurred by the Administrative Agent, and the
Collateral Agent in connection with the preparation, negotiation,
execution, delivery and administration of any amendments, waivers or
consents to this Loan Agreement or any other Loan Document, including,
without limitation, counsel fees and costs, expenses and related charges of
counsel for the Administrative Agent and the Collateral Agent with respect
thereto (including all long distance charges, overnight delivery charges
and other out-of-pocket expenses, costs and charges) and with respect to
advising the Administrative Agent and the Collateral Agent as to its rights
and remedies under the Loan Agreement and the other Loan Documents and (b)
all reasonable fees, costs, expenses and related charges, if any, (including
counsel fees, and costs, expenses and related charges of counsel) in
connection with the enforcement or preservation of the rights and remedies
of each of the Administrative Agent, the Collateral Agent and each Bank
under this Loan Agreement and the other Loan Documents (including all long
distance charges, overnight delivery charges and other out-of-pocket
expenses, costs and charges).
ARTICLE XII
THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT AND
THE CUSTODIAN; AND INTERCREDITOR PROVISIONS
Section 12.01 Appointment and Authorization. Each Bank appoints and
authorizes Rabobank to take such action as Administrative Agent and
Collateral Agent on behalf of such Bank and appoints and authorizes Norwest
Trust to take such action as Custodian on behalf of such Bank and to
exercise such powers under the Agreement, each Note, and each Loan Document
as are delegated to the Administrative Agent, the Collateral Agent or the
Custodian, as the case may be, by the terms hereof or thereof, together with
all such powers as are reasonably incidental thereto, subject, however, to
Section 10.02 hereof. The duties of the Administrative Agent, the
Collateral Agent and the Custodian shall be mechanical and administrative
in nature and neither the Administrative Agent, the Collateral Agent nor
the Custodian shall, by reason of this Loan Agreement or any Loan
Document, be a trustee or fiduciary for any Bank. Neither the
Administrative Agent, the Collateral Agent nor the Custodian shall have any
duties or responsibilities except those expressly set forth herein or in
the Loan Documents. As to any matters not expressly provided for by the
Agreement or the Loan Documents (including, without limitation,
enforcement or collection of any Note), neither the Administrative Agent, the
Collateral Agent nor the Custodian shall be required to exercise any
discretion or take any action, but shall be required to act or refrain
from acting (and shall be fully protected in so acting or so refraining
from acting) upon the instructions of the Majority Banks (or by all Banks
if the consent or approval of all Banks is otherwise required herein or in
any Loan Document), and such instructions shall be binding upon the Banks
and all holders of the Notes; provided, however, that neither the
Administrative Agent, the Collateral Agent nor the Custodian shall
be required to take any action which exposes the Administrative Agent to
personal liability or which is contrary to the Agreement, any Loan Document
or applicable law.
Section 12.02 Administrative Agent and Collateral Agent. Rabobank
shall have the same rights and powers under this Loan Agreement and the Loan
Document as each Bank and may exercise or refrain from exercising such
rights and powers the same as though it were not the Administrative Agent or
the Collateral Agent.
Section 12.03 Action by Administrative Agent, Collateral Agent and
Custodian. Neither the Administrative Agent, the Collateral Agent nor
the Custodian is under any duty to take any discretionary action permitted
to be taken by it pursuant to the provisions hereof or of the Security
Agreement or the Custodial Agreement, as the case may be, unless it shall be
requested to do so by the Majority Banks (or by all Banks if the consent or
approval of all Banks is otherwise required herein or in the Security
Agreement or the Custodial Agreement, as the case may be), except that the
Administrative Agent may undertake routine servicing activities in
respect of the Loans at any time and from time to time without the
consent of any Bank and each Bank authorizes the Administrative Agent
to undertake such routine servicing activities. The Administrative Agent,
the Collateral Agent and the Custodian shall in all cases be fully protected
in acting, or refraining from acting, in accordance with written
instructions signed by the Majority Banks (or by all Banks if the
consent or approval of all Banks is otherwise required herein or
in the Security Agreement or the Custodial Agreement, as the case may be)
and, except as otherwise specifically provided herein or in the Security
Agreement or the Custodial Agreement, as the case may be, such instructions
and any action or inaction pursuant thereto shall be binding on all the
Banks.
Section 12.04 Consultation with Experts. The Administrative Agent, the
Collateral Agent and the Custodian may consult with legal counsel,
independent public accountants and other experts selected by it with
reasonable care 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 selected by it with reasonable care.
Section 12.05 Liability of Administrative Agent, Collateral Agent and
Custodian. Neither the Administrative Agent, the Collateral Agent nor the
Custodian nor any of its directors, officers, agents, or employees shall
be liable for any action taken or omitted to be taken by it or them under
or in connection with its duties as Administrative Agent, Collateral Agent
or Custodian, as the case may be, in the absence of its or their own
gross negligence or willful misconduct, or be responsible for any
statement, warranty or representation herein or the contents of any
document delivered in connection herewith, or be required to ascertain or
to ascertain or to make any inquiry concerning the performance or observance
by the Borrower of any of the terms, conditions, covenants or agreements
contained in the Agreement or any Loan Document. Without limiting the
generality of the foregoing, the Administrative Agent, the Collateral Agent
and the Custodian (a) may treat the payee of any Note as the holder thereof
until the Administrative Agent, the Collateral Agent or the Custodian, as
the case may be, receives written notice of the assignment or transfer
thereof signed by such payee and in form satisfactory to the Administrative
Agent, the Collateral Agent or the Custodian, as the case may be; (b) may
consult with legal (including counsel for the Borrower), independent public
accountants, and other experts selected by it and shall not be liable
for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants, or experts
selected by it with reasonable care; (c) shall not be responsible for
any representation or warranty made by the Borrower or any other Person
made in or in connection with the Agreement or any Loan Document and,
without limiting the generality of the foregoing, neither the Administrative
Agent, the Collateral Agent nor the Custodian makes any representation or
warranty as to the Borrower, any financial statement submitted by or for
the Borrower, or any risk of loss with respect to any Advance; (d) shall
have no duty to ascertain or inquire as to the performance or observance by
the Borrower of any of the terms, covenants, agreements or conditions
contained in any Loan Documents, or to inspect the Property (including
the books and records) of the Borrower except that the Administrative Agent
shall be obligated to make reasonable inquiry of the Borrower concerning the
Borrower's operations, business affairs and financial conditions if
requested to do so, in writing, by any Bank; (e) shall bear no
responsibility to any Bank for the due execution, legality, validity,
enforceability, genuineness, perfection, sufficiency, or value of the
Agreement, any other instrument or document furnished pursuant hereto or any
Collateral; and (f) shall incur no liability under or in respect of this
Loan Agreement by acting upon any notice, consent, certificate, or other
instrument or writing (which may be sent by telegram, telex, facsimile
transmission or similar writing) believed by it to be genuine and signed
or sent by the proper party or parties. Each Bank has independently
evaluated all aspects of the transactions contemplated by the Loan Documents.
Section 12.06 Indemnification. Each Bank agrees to indemnify the
Administrative Agent, the Collateral Agent and the Custodian (to the extent
not reimbursed by the Borrower) against any cost, expense (including counsel
fees and disbursements), claim, demand, action, loss or liability
(except such as result from the gross negligence or willful misconduct
of the Administrative Agent, Collateral Agent or Custodian, as the case
may be) that the Administrative Agent, Collateral Agent or Custodian
may suffer or incur in connection with the Agreement or the Loan Documents
or any action taken or omitted by it under the Agreement or under any Loan
Document with such indemnity to be limited by the next sentence of this
Section 12.06. Liability for all such costs, expenses, claims, demands,
actions, losses and liabilities shall be allocated pro rata among the
Banks based on their respective Applicable Percentages.
Section 12.07 Reimbursement from Payments. The Administrative Agent
may apply any payments received from the Borrower, the Collateral Agent or
any other Person first to reimburse itself, the Collateral Agent or the
Custodian for the costs, expenses, claims, demands, actions, losses and
liabilities (a) which are subject to indemnification by a Bank under
Section 12.06 herein, (b) which are reimbursable by the Borrower under
Article XI hereof or (c) which are subject to indemnification by the
Borrower under Section 13.12 hereof.
Section 12.08 Sharing of Loan Payments. Except as otherwise
specifically provided herein (i) each Bank shall be responsible for funding
its share of each Advance and (ii) each Bank shall be entitled to its share
of each payment received from the Borrower for application to, and any
proceeds of Collateral securing, the Loans as provided for herein. Each
Bank agrees that if it shall, by exercising any right of set off or
counterclaim or otherwise, receive payment of a proportion of the aggregate
amount of principal and interest due with respect to any Loan which is
greater than the amount to which, as between the Banks, it is entitled
hereunder, the Bank receiving such greater payment shall pay over to the
Administrative Agent, for distribution among the Banks, such amount as
is necessary so that each Bank shall receive the share of principal and
interest that it would have received had the original payment been made
to the Administrative Agent for distribution in accordance herewith;
provided, that nothing in this Section shall impair the right of any Bank
to exercise any right of set off or counterclaim it may have against the
Borrower. The Banks shall make such arrangements among themselves such as,
for example, the purchase of participations in the Line of Credit Loans of
each Bank in order to effectuate the foregoing provision.
Section 12.09 Resignation of Administrative Agent, Collateral Agent or
Custodian. The Administrative Agent, Collateral Agent or the Custodian
may, and at the request of all the Banks (other than a Bank which is then
serving as Administrative Agent, Collateral Agent or Custodian, as the case
may be) shall, resign upon 30 days' prior written notice thereof to the
Banks and the Borrower. Upon any such resignation the Majority Banks
shall appoint a successor Administrative Agent, Collateral Agent or
Custodian, as the case may be, from among the Banks. Upon the acceptance of
its appointment as successor Administrative Agent hereunder, its appointment
as successor Collateral Agent under the Security Agreement or its
appointment as successor Custodian under the Custodian, as the case may
be, such successor agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring
Administrative Agent, Collateral Agent or Custodian, as the case may be,
and such retiring agent shall be discharged from its duties and obligations
under this Agreement, the Security Agreement or the Custodial Agreement,
as the case may be. If no Administrative Agent, Collateral Agent or
Custodian, as the case may be, shall have been so appointed by the Majority
Banks and shall have accepted such appointment within 30 days after giving
of notice of the retiring agent's resignation as Administrative Agent,
Collateral Agent or Custodian, as the case may be, the retiring agent's
resignation shall nevertheless thereupon become effective, the respective
appointment, powers and duties of the retiring agent as Administrative
Agent, Collateral Agent or Custodian, as the case may be, shall be
terminated and the Banks shall perform all of the duties of the
Administrative Agent, the Collateral Agent or the Custodian, as the case
may be, until such time, if any, as the Majority Banks appoint a successor
agent as provided above. All parties hereto agree to execute any
instruments or documents reasonably required to evidence the appointment of
a new Administrative Agent hereunder, the appointment of a new Collateral
Agent under the Security Agreement or the appointment of a new Custodian
under the Custodian. Notwithstanding the foregoing or anything to the
contrary contained in this Agreement, the resignation of the Custodian shall
take effect only upon the appointment of a successor Custodian by the
Majority Banks (with the consent of the Collateral Agent) and the delivery
of an instrument signed by such successor Custodian accepting such
appointment.
Section 12.10 Right of Purchase. Upon the occurrence of an Event of
Default hereunder and the inability of the Banks to agree upon an
appropriate course of action, each Bank agrees that, upon the written
request of one or more of the other Banks, it shall sell and convey, without
recourse, its entire interest in its Line of Credit Loans, the Loan
Documents, and the Collateral to such other Bank or Banks for an amount
equal to (i) all principal plus accrued and unpaid interest due on any Note
held by it plus (ii) all unpaid fees due it plus (iii) all unpaid
Indebtedness owed to the selling Bank by the Borrower arising out of, or
pursuant to, this Loan Agreement or the transactions contemplated thereby
and shall thereupon transfer its rights and duties, if any, as
Administrative Agent hereunder, as Collateral Agent under the Security
Agreement, if any, and as Custodian under the Custodian to such other
Bank or Banks. If two or more Banks desire to purchase the interests of
another Bank or Banks, then the selling Bank or Banks shall sell and convey,
without recourse, their entire interest in their Line of Credit Loans, the
Loan Documents and the Collateral to such other Bank or Banks, respectively,
based on the Applicable Percentages of such other Bank or Banks. Payment
from the purchasing Bank or Banks for such rights must be made in same day
funds contemporaneously with the transfer of such rights and property from
the selling Bank or Banks. Notwithstanding the foregoing, if each Bank
desires to purchase the interests of the other Banks, then this Section
12.10 shall be deemed null and void.
Section 12.11 [Intentionally Omitted.]
Section 12.12 Withholding Tax. If any Bank is a "foreign corporation,
partnership or trust" within the meaning of the Code and such Bank claims
exemption from, or reduction of, United States withholding tax under Section
1441 or 1442 of the Code, such Bank agrees with and in favor of the
Administrative Agent, to deliver to the Administrative Agent (a) if such
Bank claims an exemption from, or reduction of, withholding tax under a
United States tax treaty, two properly completed and executed copies of
Internal Revenue Service Form 1001 before the payment of any interest in the
first calendar year and before the payment of any interest in each third
succeeding calendar year during which interest may be paid hereunder, (b)
if such Bank claims that interest paid hereunder is exempt from United
States withholding tax because it is effectively connected with a
United States trade or business of such Bank, two properly completed and
executed copies of Internal Revenue Service Form 4224 before the payment
of any interest is due in the first taxable year of such Bank and in
each succeeding taxable year of such Bank during which interest may be paid
hereunder and (c) such other form or forms as may be required under the
Code or other laws of the United States as a condition to exemption from,
or reduction of, United States withholding tax. Such Bank shall amend any
such form or evidence from time to time whenever such amendment is necessary
to assure that such form or evidence remains accurate, complete and not
misleading and shall furnish to the Borrower two copies of such Internal
Revenue Service forms as and when required to be furnished to the
Administrative Agent under this Section. Promptly upon notice from any
Person (a "Withholding Agent") of any determination by the Internal Revenue
Service that any payment previously made under the Agreement by a
Withholding Agent to any Bank was subject to United States income tax
withholding when made, such Bank shall pay to such Withholding Agent the
excess of the aggregate amount required to have been withheld from such
payments, together with any applicable penalties and interest, over the
aggregate amount, if any, actually withheld by such Withholding Agent. The
obligations of the Banks under this Section 12.12 to a Withholding Agent
shall survive the payment of all Loans and obligations owed to any Bank
hereunder, the termination of this Loan Agreement and the resignation
or replacement of any Administrative Agent, Collateral Agent or Custodian.
Section 12.13 Borrowers Not a Beneficiary. The agreements in this
Article XII are solely between the Banks, the Administrative Agent, the
Collateral Agent and the Custodian, and the Borrower shall not be considered
a party to or the beneficiary of any such agreements. However, the
Borrower hereby consents to all of the provisions of this Article XII.
Section 12.14 Survival of Provisions. The provisions of this
Article XII shall survive the payment of the Loans and the termination of t
he Agreement and shall inure to the benefit of each Person who has at any
time served as Administrative Agent under the Agreement, Collateral Agent
under the Security Agreement or Custodian under the Custodian, as the case
may be, including after the resignation or replacement of such Person
as the Administrative Agent, Collateral Agent or Custodian, as the case
may be, as to any actions taken or omitted to be taken by such Person while
it was Administrative Agent, Collateral Agent or Custodian, as the case
may be.
Section 12.15 Defaults. The Administrative Agent shall not be
deemed to have knowledge of the occurrence of a Default or an Event of
Default (other than under Sections 10.01(b) or 10.01(c) hereof unless the
Administrative Agent has received notice from a Bank or the Borrower
specifying the occurrence of such Default or Event of Default. In the
event that the Agent receives such a notice of the occurrence of a Default
or an Event of Default, the Agent shall give prompt notice thereof to
the Banks. Unless and until the Administrative Agent shall have received
a request from the Majority Banks to take action under Section 10.02
following the occurrence of a Default, the Administrative Agent may
take any action, or refrain from taking any action, with respect to
such Default as it shall deem advisable in the best interest of the Banks.
ARTICLE XIII
MISCELLANEOUS
Section 13.01 Section Headings. Section headings or captions used
herein are inserted only as a matter of convenience and only for reference
and in no way define, limit the scope of intent of any Section, nor in any
way affect this Loan Agreement.
Section 13.02 Notices. Any notice or other communication required or
permitted to be given to any party shall be given in writing (including
communication by facsimile copy) and mailed, transmitted, or delivered, as to
each party hereto, at its address and/or the number set forth under its name
on Schedule I hereto or specified in such party's Assignment Certificate
pursuant to which such Bank became a Bank hereunder in accordance with the
provisions of Section 13.14 or at such other address or number as shall be
designated by such party in a written notice to the other parties hereto.
All such notices and communications shall be effective, upon receipt, or in
the face or (a) notice by mail, five days after being deposited in the United
States Mail, certified mail, postage prepaid, or (b) notice by facsimile
copy, showing machine confirmation of delivery made or verbal communication
of receipt is obtained.
Section 13.03 Survival of Covenants and Representations. All covenants,
agreements, representations and warranties made herein and in the
certificates delivered pursuant hereto shall survive the making by the Banks
of the Loans herein contemplated, and shall continue in full force and
effect so long as any of the Loans are outstanding and unpaid. Whenever in
this Loan Agreement any of the parties hereto is referred to, such
references shall be deemed to include the successors and assigns of
such party, and all covenants, promises and agreements by or on behalf
of the Borrower which are contained herein may be assigned by each
Bank and all such covenants, promises and agreements shall bind and
inure to the benefit of the successors and assigns of such Bank.
Section 13.04 Governing Law; Consent to Jurisdiction; Jury Trial Waiver.
This Loan Agreement, each Note, and each other Loan Document shall be
construed in accordance with and governed by the laws of the State of New
York without regard to conflicts of law principles. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS LOAN AGREEMENT, ANY NOTE, ANY LOAN DOCUMENT
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE CUSTODIAN AND
THE BANKS CONSENTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO
THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE
BORROWER, THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE
CUSTODIAN AND THE BANKS IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON-CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDINGS IN SUCH
JURISDICTION IN RESPECT TO THIS AGREEMENT, ANY NOTE OR DOCUMENT
RELATED HERETO. THE BORROWER, THE ADMINISTRATIVE AGENT, THE
COLLATERAL AGENT, THE CUSTODIAN AND THE BANKS EACH WAIVE
PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS
WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK
LAW AND WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR
COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY,
ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE
LOAN DOCUMENTS. NO OFFICER OF ANY BANK OR OF THE ADMINISTRATIVE
AGENT HAS AUTHORITY TO WAIVE, CONDITION OR MODIFY THIS PROVISION.
Section 13.05 Waivers; Amendments; and Releases. (a) No failure or
delay of the Administrative Agent, Collateral Agent or any Bank in
exercising any power or right hereunder or under any Loan Document shall
operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and
remedies of the Administrative Agent, the Collateral Agent, the Custodian
and the Banks hereunder and under the other Loan Documents are cumulative
and are not exclusive of any rights or remedies that they would otherwise
have. No waiver of any provision hereof or of any other Loan Document
or consent to any departure by the Borrower therefrom shall in any event
be effective unless the same shall be permitted by paragraph (b) below, and
then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. No notice or demand on the Borrower
in any case shall entitle the Borrower to any other or further notice
or demand in similar or other circumstances.
(b) No amendment, modification, termination or waiver of any provision
hereof or of any Loan Document to which the Borrower is a party, nor consent
to any departure by the Borrower from any provision hereof or of any Loan
Document to which the Borrower is a party, shall in any event be effective
unless the same shall be in writing and signed by the Majority Banks, or
in the case of any Collateral Document the same shall be in writing
and signed by the Collateral Agent and consented to by the Majority
Banks, and then such amendment, modification, termination, waiver or consent
shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such agreement,
amendment, modification, termination, waiver or consent shall (i) decrease
the principal amount of, or extend the final maturity date or date for
the payment of any interest on any Loan, or waive or excuse any such
payment or any part thereof, or decrease the rate of interest on any
Line of Credit Loan, or reduce any fees payable to any Bank hereunder,
without the prior written consent of each Bank, (ii) increase or extend the
Commitment of any Bank or subject any Bank, to any additional obligations
or decrease the stated rate at which any fees are calculated without the
prior written consent of each Bank, (iii) amend, waive, modify or change
the Applicable Percentage of any Bank without the prior written consent of
each Bank, (iv) amend, waive or modify the provisions of Section 2.03(a),
the provisions of Section 2.13, the provisions of Section 10.02, the
provisions of this Section 13.05, the definition of "Majority Banks" or
any provision of Article III, in each case, without the prior written
consent of each Bank, (v) release any material part of the Collateral
under any Loan Document, amend in any material respect any Collateral
Document, without the prior written consent of each Bank or (vi) waive any
of the conditions precedent specified in Article VI hereof without the
prior written consent of each Bank; provided, further, that (A) no such
agreement, amendment, modification, termination, waiver or consent shall
amend, modify, waive or otherwise affect the rights or duties of the
Administrative Agent hereunder without the prior written consent of the
Administrative Agent, (B) no such agreement, amendment, modification,
termination, waiver or consent shall amend, modify, waive or otherwise
affect the rights or duties of the Collateral Agent hereunder or under the
Security Agreement without the prior written consent of the Collateral
Agent and (C) no such agreement, amendment, modification, termination waiver
or consent shall amend, modify, waive or otherwise affect the rights or
duties of the Custodian hereunder or under the Custodial Agreement without
the prior written consent of the Custodian. Each Bank and each holder of a
Note shall be bound by any waiver, amendment or modification authorized by
this Section 13.05 regardless of whether its Note shall have been marked
to make reference thereto, and any consent by any Bank or holder of a Note
pursuant to this Section 13.05 shall bind any person subsequently
acquiring a Note from it, whether or not such Note shall have been so
marked. Nothing herein shall require any such marking, and each Bank
hereby waives any requirement of applicable law to so xxxx any Note.
Section 13.06 Entire Agreement. This Loan Agreement and the Loan
Documents represent the entire agreement of the parties hereto, with
respect to the matters set forth herein and supersede all oral statements
and prior writings with respect thereto. In instances where the provisions
of this Agreement and any other Loan Document conflict, the provisions
hereof (as amended from time to time in accordance with Section 13.05
hereof) shall control.
Section 13.07 Amendments to Prior Loan Agreement. This Loan Agreement
amends the Prior Loan Agreement to read as set forth herein. As so amended
and restated, the Prior Loan Agreement is hereby ratified and confirmed in
all respects.
Section 13.08 Counterparts. This Loan Agreement may be executed
in two or more counterparts and has different parties hereto in separate
counterparts, each of which when so executed shall constitute an original
instrument, but all of which together shall constitute one and the same
instrument.
Section 13.09 Contact with Borrower's Independent Accountants. The
Borrower hereby authorizes the Banks, at any time and from time to time
while any Loans are outstanding, upon prior notice to the Borrower to make
direct contact with the independent accountants of the Borrower and to
obtain any information about the affairs of the Borrower that may be
available to such independent accountants.
Section 13.10 Severability; Rights Cumulative. In the event any
clause or provision hereof or of any Loan Document conflicts with
applicable law such conflict shall not affect other provisions of such
Loan Document which can be given effect without the conflicting provision
and to this end the provisions of each Loan Document are declared to
be severable. All rights and remedies provided for herein or in any
other Loan Document or which Banks may have otherwise, at law or in equity,
shall be distinct, separate, and cumulative and may be exercised
concurrently, independently or successively in any order whatsoever, and
as often as the occasion therefor arises.
Section 13.11 Usury Savings Clause. All agreements herein and in
the Loan Documents are expressly limited so that in no contingency or event
whatsoever, either by reason of advancement or acceleration of maturity
of the obligations then owing hereunder or under any Loan Document, or
otherwise, shall the amount paid or agreed to be paid thereunder for the
use, forbearance or detention of money exceed the highest lawful rate
permitted under applicable usury laws. If, from any circumstance
whatsoever, fulfillment of any provision hereof or of any Loan Document,
at the time performance of such provision shall be due, shall involve
transcending the limit of validity prescribed by law that a court
of competent jurisdiction may deem applicable thereto then, ipso
facto, the obligation to be fulfilled shall be reduced to the limit of
such validity and if, from any circumstance whatsoever, a Bank shall
ever receive as interest an amount which would exceed the highest lawful
rate, the receipt of such excess shall be deemed a mistake and shall be
cancelled automatically or, if theretofore paid, such excess shall be
credited against the principal amount of the obligations then owing under
any Loan Document to which the same may lawfully be credited, and any
portion of such excess not capable of being so credited shall be rebated
to the Borrower.
Section 13.12 Indemnification by Borrower. The Borrower hereby
agrees to defend, indemnify and hold each Bank, the Collateral Agent, the
Custodian and the Administrative Agent harmless from and against any and
all claims made by, damages to, judgments in favor of and penalties or
fines owed to any Person who is not a party hereto or to any Loan Document
(including, without limitation, any Governmental Body), together with
all costs and expenses incurred in connection with any of the foregoing
(including attorneys' fees and court costs now or hereafter arising from
the aforesaid enforcement of this clause, including the allocated cost of
in-house counsel) arising directly or indirectly from (a) the activities
of the Borrower and its Subsidiaries, and their respective predecessors
in interest, (b) any contractual relationship between (i) the Borrower,
any of its Subsidiaries or their respective predecessors in interests and
(ii) any third party, or (c) the violation of any environmental protection,
health or safety law, whether such claims were asserted by any Governmental
Body or any other Person, or (d) the execution or delivery hereof or of any
other Loan Document or any agreement or instrument contemplated thereby,
the performance by the parties thereto of the respective obligations
thereunder or the consummation of the transactions contemplated thereby.
The Borrower's obligation under this Section 13.12 shall survive the
termination of the Agreement and the payment of all loans and obligations
owed to any Bank hereunder.
Section 13.13 Independent Credit Decisions. Each Bank acknowledges
that it has, independently and without reliance upon the Agent or any other
Bank and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into
this Loan Agreement. Each Bank also acknowledges that it will,
independently and without reliance upon the Administrative Agent or
any other Bank 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 hereunder. Except for notices, reports
and other documents and information expressly required to be furnished
to the Banks by the Administrative Agent hereunder, the Administrative
Agent shall have no duty, responsibility to provide any Bank with any
credit or any other information concerning the affairs, financial
condition or business of the Borrower or any of its Subsidiaries (or any of
their Affiliates) which may come into the possession of the Administrative
Agent.
Section 13.14 Sale or Assignment; Addition of Banks. Except as
permitted under the terms and conditions of this Section 13.14 or, with
respect to participations, under Section 13.15, no Bank may sell, assign
or transfer its rights or obligations under this Agreement or its interest
in any Note. Any Bank, at any time upon at least two (2) business Days'
prior written notice to the Administrative Agent and the Borrower (unless
the Agent and the Borrower consent to a shorter period of time), may assign
all or a portion (provided such portion is not less than $1,000,000) of
such Bank's Note, Line of Credit Loan, and Commitment to a domestic or
foreign commercial bank (having a branch office in the United States),
an insurance company or other financial institution (an "Applicant") on
any date (the "Adjustment Date") selected by such Bank, but only so long
as the Borrower at all times other than during the continuance of an Event
of Default and the Administrative Agent shall have provided its prior
written approval of such proposed Applicant, which prior written approval
will not be unreasonably withheld. Upon receipt of such approval and to
confirm the status of each additional Bank as a party to this Agreement and
to evidence the assignment in accordance herewith:
(a) the Administrative Agent, the Borrower, the assigning Bank and
such Applicant shall, on or before the Adjustment Date, execute and deliver
to the Administrative Agent an Assignment Certificate in substantially the
form of Exhibit G attached hereto (an "Assignment Certificate");
(b) the Borrower will execute and deliver to the Administrative Agent,
for delivery by the Administrative Agent in accordance with the terms of
the Assignment Certificate, (i) new Notes payable to the order of the
Applicant in amounts corresponding to the applicable Commitment acquired by
such Applicant and (ii) new Notes payable to the order of the assigning
Bank in amounts corresponding to the retained Commitment. Such new Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of the Notes to be replaced by such new Notes, shall be dated the
effective date of such assignment and shall otherwise be in the form of the
Notes to be replaced thereby. Such new Notes shall be issued in
substitution for, but not in satisfaction or payment of, the Notes being
replaced purposes of this Agreement and
(c) the assigning Bank shall pay to the Administrative Agent an
administrative fee of $5,000.
Upon the execution and delivery of such Assignment Certificate and
such new Notes, and effective as of the effective date thereof (i) this
Agreement shall be deemed to be amended to the extent, and only to the
extent, necessary to reflect the addition of such additional Bank and
the resulting adjustment of the Applicable Percentages and Stated Line
of Credit Commitments arising therefrom, (ii) the assigning Bank shall be
relieved of all obligations hereunder to the extent of the reduction of
the assigning Bank's Applicable Percentage, and (iii) the Applicant shall
become a party hereto and shall be entitled to all rights, benefits and
privileges accorded to a Bank herein and in each other Loan Document
or other document or instrument executed pursuant hereto and subject to all
obligations of a Bank hereunder, including, without limitation, the right
to approve or disapprove actions which, in accordance with the terms hereof,
require the approval of the Majority Banks or all Banks. The Commitment
allocated to each Assignee shall reduce such Commitments protanto. Promptly
after the execution of any Assignment Certificate, a copy thereof shall be
delivered by the Administrative Agent to each Bank and to the Borrower.
In order to facilitate the addition of additional Banks hereto, the
Borrower and the Banks shall cooperate fully with the Administrative
Agent in connection therewith and shall provide all reasonable assistance
requested by the Administrative Agent relating thereto, including, without
limitation, the furnishing of such written materials and financial
information regarding the Borrower as the Administrative Agent may
reasonably request, the execution of such documents as the Administrative
Agent may reasonably request with respect thereto, and the participation
by officers of the Borrower, and the Banks in a meeting or teleconference
call with any Applicant upon the request of the Agent.
Section 13.15 Participations. In addition by the rights granted
under Section 13.14, any Bank may grant participations in all or any portion
of its Line of Credit Loans, Note and Commitment to any domestic or
foreign commercial bank (having a branch office in the United States),
insurance company, financial institution or affiliate of such Bank, but
only so long as the Administrative Agent shall have provided its prior
written approval of such proposed participant, which prior written approval
shall not be unreasonably withheld; provided, however, that (i) the
Originating Bank's obligations under this Agreement shall remain unchanged,
(ii) the Originating Bank shall remain solely responsible for the
performance of such obligations, (iii) the Borrower and the Administrative
Agent shall continue to deal solely and directly with the Originating
Bank in connection with the Originating Bank's rights obligations hereunder
and the other Loan Documents, (iv) the Originating Bank shall retain
for its own account at least 10.0% of its Line of Credit Loans,
and (v) no Bank shall transfer or grant any participation interest under
which the Participant shall have rights to approve any amendment to, or
any consent or waiver with respect to, the Loan Agreement or any other Loan
Document, except to the extent such amendment, consent or waiver would
result in or have the effect of increasing the Commitment of the Originating
Bank, changing the amount or frequency of payment of principal, interest
or fees due hereunder, amending this Section 13.14, releasing any material
portion of the Collateral, or extending the maturity of any Line of Credit
Loan in which the Participant has purchased a participation interest. In
the case of any such participation, the Participant shall not have any
rights under this Agreement, or any of the other Loan Documents, and all
amounts payable by the Borrower hereunder shall be determined as if such
Bank had not sold such participation; except that, if amounts outstanding
under this Agreement are due and unpaid, or shall have been declared or
shall have become due and payable upon the occurrence of an Event of
Default, each Participant shall be deemed to have the right of set-off
in respect of its participation interest in amounts owing under this
Agreement to the same extent as if the amount of its participating
interest were owing directly to it as a Bank hereunder. The Borrower
acknowledges and agrees that any Participant may rely upon, and possess
all rights under, any opinions, certificates, or other instruments or
documents delivered under or in connection with any Loan Documents.
Notwithstanding any other provision set forth herein or in any Loan
Document, any Bank may at any time create a security interest in all or any
portion of its rights hereunder (including, without limitation, the Line of
Credit Loans owing to it and the Note held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors
of the Federal Reserve System.
Section 13.16 Confidentiality. Unless otherwise required by
applicable law, or of any court or administrative agency, or otherwise
by any Governmental Body, the Administrative Agent, the Collateral
Agent and each Bank agrees to maintain the confidentiality, in its
communications with third parties and otherwise, of any information
regarding Borrower or the transactions contemplated by the Loan
Documents which is obtained in connection with this Loan Agreement and which
has been identified by the Borrower as confidential in nature (which
identification shall be in writing) (the Confidential Material); provided,
however, that the Confidential Material may be disclosed to third parties to
the extent such disclosure is (a) required in connection with the exercise of
any remedy hereunder or under any Loan Document, (b) to any actual or
proposed participant or assignee of or part of its rights hereunder which has
agreed in writing to be bound by the provisions of this Section, (c) to any
other Bank or (d) to any Governmental Body relating to any Bank made in
compliance with any guideline or request from such Governmental Body (whether
or not having the force of law); provided further, however, that (i) this Loan
Agreement and the Loan Documents may be disclosed to effective legal counsel and
independent auditors of the Administrative Agent, the Collateral Agent and
the Banks, (ii) neither the Administrative Agent, the Collateral Agent nor
the Banks shall have any obligation of confidentiality in respect of any
information which may be generally available to the public or becomes
available to the public through no fault of such Person.
Section 13.17 Acknowledgment of Receipt. The Borrower acknowledges
receipt of a copy of each Loan Document and each other document and agreement
executed by a debtor in connection hereunder or with the Indebtedness
to a Bank hereunder.
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS
AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY
THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS
OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN
CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE
THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN
AGREEMENT.
IN WITNESS WHEREOF, the Borrower, each Bank and the Administrative Agent
have caused this Agreement to be duly executed by their duly authorized
officers, all as of the day and year first above written.
AG SERVICES OF AMERICA, INC.
(Borrower)
By: _______________________________
Name: _______________________
Title: ________________________
By: _______________________________
Name: _______________________
Title: ________________________
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK, B.A.,
"RABOBANK NEDERLAND",
NEW YORK BRANCH
(Administrative Agent)
By: _______________________________
Name: _______________________
Title: ________________________
By: _______________________________
Name: _______________________
Title: ________________________
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK, B.A.,
"RABOBANK NEDERLAND",
NEW YORK BRANCH
(Bank)
By: _______________________________
Name: _______________________
Title: ________________________
By: _______________________________
Name: _______________________
Title: ________________________
AG SERVICES OF AMERICA, INC.
EXHIBIT 10.19
MARCH 12, 1997 CREDIT AGREEMENT
-24-
CREDIT AGREEMENT
Dated as of March 12, 1997
among
AG ACCEPTANCE CORPORATION
as Borrower
AG SERVICES OF AMERICA, INC.
as Servicer
TRIPLE-A ONE FUNDING CORPORATION
CAPMAC FINANCIAL SERVICES, INC.
as Administrative Agent
and
CAPITAL MARKETS ASSURANCE CORPORATION
as Collateral Agent
TABLE OF CONTENTS
Page
Section
ARTICLE IDEFINITIONS
SECTION 1.01 Certain Definitions. . . . . . . . . . . .-2-
SECTION 1.02. Accounting Terms . . . . . . . . . . . . -32-
SECTION 1.03. Other Terms. . . . . . . . . . . . . . . -32-
SECTION 1.04. Computation of Time Periods. . . . . . . -33-
ARTICLE IITHE TRIPLE-A LOANS
SECTION 2.01. The Triple-A Loans . . . . . . . . . . . -33-
SECTION 2.02. Note.. . . . . . . . . . . . . . . . . . -33-
SECTION 2.03. Making the Triple-A Loans. . . . . . . . -34-
SECTION 2.04. Reduction of Facility Limit. . . . . . . -35-
SECTION 2.05. Repayments; Manner of Payment
and Prepayment . . . . . . . . . . . . . -36-
SECTION 2.06. Interest on Triple-A Loans;
Default Interest . . . . . . . . . . . . -36-
SECTION 2.07. Voluntary and Mandatory Prepayment
of Triple-A Loans. . . . . . . . . . . . -37-
SECTION 2.08. Compensation . . . . . . . . . . . . . . -38-
SECTION 2.09. Increased Costs, Capital Adequacy. . . . -39-
SECTION 2.10. Taxes. . . . . . . . . . . . . . . . . . -40-
SECTION 2.11. Fees . . . . . . . . . . . . . . . . . . -42-
ARTICLE IIICONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to this
Agreement and the Initial Borrowing. . -42-
SECTION 3.02. Conditions Precedent to
Each Borrowing.. . . . . . . . . . . . . -43-
ARTICLE IVREPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties
of the Borrower. . . . . . . . . . . . . -44-
SECTION 4.02. Representations and Warranties
Regarding the Collateral . . . . . . . . -54-
ARTICLE VGENERAL COVENANTS
SECTION 5.01. Affirmative Covenants of the Borrower. . -55-
SECTION 5.02. Negative Covenants of the Borrower.. . . -63-
ARTICLE VIREPORTING REQUIREMENTS
SECTION 6.01. Reporting Requirements of the Servicer . -68-
SECTION 6.02. Additional Servicer Reporting
Requirements . . . . . . . . . . . . . . -70-
SECTION 6.03. Miscellaneous Borrower and
Servicer Reporting Requirements. . . . . -71-
ARTICLE VIISECURITY INTEREST
SECTION 7.01. Grant of Primary Lien. . . . . . . . . . -73-
SECTION 7.02. Continuing Liability of the Borrower . . -74-
SECTION 7.03. Filings; Further Assurances. . . . . . . -75-
SECTION 7.04. Place of Business; Change of Name. . . . -76-
SECTION 7.05. Lock-Box Accounts. . . . . . . . . . . . -77-
SECTION 7.06. Collection Account.. . . . . . . . . . . -77-
SECTION 7.07. Preservation of Rights in Collateral.. . -81-
SECTION 7.08. Rights Not Exclusive.. . . . . . . . . . -81-
SECTION 7.09. No Waiver. . . . . . . . . . . . . . . . -82-
ARTICLE VIIISERVICING AND ADMINISTRATION OF
ACQUIRED ADVANCES AND LOAN DOCUMENTS
SECTION 8.01. Responsibility for Loan
Document Administration. . . . . . . . . -82-
SECTION 8.02. Standard of Care . . . . . . . . . . . . -82-
SECTION 8.03. Records. . . . . . . . . . . . . . . . . -83-
SECTION 8.04. Inspection . . . . . . . . . . . . . . . -83-
SECTION 8.05. Enforcement. . . . . . . . . . . . . . . -84-
SECTION 8.06. Collateral Agent to Cooperate. . . . . . -85-
SECTION 8.07. Other Matters Relating to the Servicer . -85-
SECTION 8.08. Servicer Insurance Coverage. . . . . . . -86-
SECTION 8.09. Servicing Compensation . . . . . . . . . -86-
SECTION 8.10. Costs and Expenses . . . . . . . . . . . -86-
SECTION 8.11. Servicer Representations and
Warranties . . . . . . . . . . . . . . . -87-
SECTION 8.12. Additional Covenants of the Servicer . . -88-
SECTION 8.13. The Servicer not to Resign . . . . . . . -90-
SECTION 8.14. Merger or Consolidation of,
or Assumption of the Obligations
of Servicer. . . . . . . . . . . . . . . -90-
SECTION 8.15. Examination of Records . . . . . . . . . -91-
ARTICLE IXEVENTS OF DEFAULT; REMEDIES
SECTION 9.01. Events of Default. . . . . . . . . . . . -91-
SECTION 9.02. Remedies . . . . . . . . . . . . . . . . -94-
ARTICLE XSERVICER DEFAULTS
SECTION 10.01. Servicer Defaults . . . . . . . . . . . -95-
SECTION 10.02. Appointment of Successor. . . . . . . . -99-
SECTION 10.03. Certain Matters Affecting
the Successor Servicer. . . . . . . . .-100-
ARTICLE XIINDEMNITIES
SECTION 11.01. Liabilities to Obligors . . . . . . . .-101-
SECTION 11.02. Tax Indemnification . . . . . . . . . .-101-
SECTION 11.03. Servicer's Indemnities. . . . . . . . .-101-
SECTION 11.04. Borrower's Indemnities. . . . . . . . .-102-
SECTION 11.05. Operation of Indemnities. . . . . . . .-104-
ARTICLE XIITHE COLLATERAL AGENT
SECTION 12.01. Authorization and Action. . . . . . . .-104-
SECTION 12.02. Delegation of Duties. . . . . . . . . .-105-
SECTION 12.03. Exculpatory Provisions. . . . . . . . .-105-
SECTION 12.04. Reliance by Collateral Agent. . . . . .-106-
SECTION 12.05. Notice of Events of Default; Etc. . . .-106-
SECTION 12.06. Non-Reliance on Collateral Agent
and Other Secured Creditors . . . . . .-107-
SECTION 12.07. Reimbursement and Indemnification.. . .-107-
SECTION 12.08. Collateral Agent in Its
Individual Capacity . . . . . . . . . .-108-
SECTION 12.09. Successor Collateral Agents.. . . . . .-108-
SECTION 12.10. UCC Filings and Title Certificates. . .-109-
ARTICLE XIIIMISCELLANEOUS
SECTION 13.01. Amendments, Etc.. . . . . . . . . . . .-109-
SECTION 13.02. Notices, Etc. . . . . . . . . . . . . .-109-
SECTION 13.03. No Waiver; Remedies . . . . . . . . . .-110-
SECTION 13.04. Binding Effect; Assignability;
Termination . . . . . . . . . . . . . .-110-
SECTION 13.05. Release of Collateral . . . . . . . . .-111-
SECTION 13.06. GOVERNING LAW . . . . . . . . . . . . .-112-
SECTION 13.07. CONSENT TO JURISDICTION;
WAIVER OF JURY TRIAL. . . . . . . . . .-112-
SECTION 13.08. Costs, Expenses and Taxes . . . . . . .-112-
SECTION 13.09. Limitations on Payments . . . . . . . .-114-
SECTION 13.10. Execution in Counterparts;
Severability. . . . . . . . . . . . . .-114-
SECTION 13.11. No Bankruptcy Petition Against
Triple-A. . . . . . . . . . . . . . . .-114-
SECTION 13.12. Further Assurances. . . . . . . . . . .-114-
SECTION 13.13. Captions and Cross References . . . . .-114-
EXHIBITS
EXHIBIT A Form of Notice of Borrowing
EXHIBIT B Credit and Collection Policy
EXHIBIT C Forms of Loan Documents
EXHIBIT D Form of Lock-Box Agreement
EXHIBIT E Form of Servicer's Daily Report
EXHIBIT F Form of Settlement Report
EXHIBIT G Form of Administrative Services Agreement
EXHIBIT H Form of Triple-A Note
EXHIBIT I List of Closing Documents
EXHIBIT J List of Credit Factors
SCHEDULES
Schedule 4.01(l) List of Lock-Box Banks and Lock-Box Accounts
CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of March 12, 1997 (the
"Credit Agreement"), among AG ACCEPTANCE CORPORATION, a Delaware
corporation (the "Borrower"), TRIPLE-A ONE FUNDING CORPORATION, a
Delaware corporation ("Triple-A"), AG SERVICES OF AMERICA, INC.,
a Iowa corporation ("Ag Services"), in its capacity as Servicer
hereunder (in such capacity, the "Servicer"), CAPMAC FINANCIAL
SERVICES, INC. ("CFS"), as Administrative Agent (the
"Administrative Agent") and CAPITAL MARKETS ASSURANCE
CORPORATION, a New York insurance company ("CapMAC"), as
Collateral Agent (the "Collateral Agent").
W I T N E S S E T H:
WHEREAS, pursuant to the Purchase and Contribution
Agreement, the Borrower has agreed to purchase and otherwise
acquire certain Advances and other Acquired Assets from time to
time from Ag Services and Ag Services has agreed to act as
initial Servicer of the Acquired Assets; and
WHEREAS, the Borrower has requested that Triple-A make
the Triple-A Loans to the Borrower, the proceeds of which shall
be used to purchase such Advances and other Acquired Assets from
Ag Services in accordance with the terms of the Purchase and
Contribution Agreement; and
WHEREAS, Triple-A will fund such Triple-A Loans by
(i) the issuance of Transaction Commercial Paper Notes or (ii) if
Triple-A is unable for any reason to issue Commercial Paper
Notes, by borrowing under the Liquidity Agreement, dated as of
the date hereof, among Triple-A, the Liquidity Banks and the
Liquidity Agent; and
WHEREAS, as a condition precedent to the foregoing
Triple-A Loans, the Borrower has agreed to grant a security
interest in favor of the Collateral Agent, for the benefit of
each of the Collateral Agent, the Administrative Agent, Triple-A,
and the Surety, in all of its right, title and interest in, to
and under the Collateral as described herein, in order to secure
the Obligations as described herein; and
WHEREAS, as a further condition precedent to the making
of Triple-A Loans, pursuant to the terms of the Insurance
Agreement among the Surety, the Liquidity Agent, the Borrower and
Triple-A, the Surety has agreed to issue the Surety Bonds to
guarantee repayment of the Triple-A Loans and advances to Triple-
A made by the Liquidity Banks under the Liquidity Agreement; and
WHEREAS, subject to the terms and conditions set forth
herein, Triple-A is willing to make the Triple-A Loans to the
Borrower, the Surety has agreed to issue the Surety Bonds and Ag
Services has agreed to act as Servicer hereunder;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Certain Definitions. As used in this
Credit Agreement, the Triple-A Note or any certificate or other
document made or delivered pursuant hereto or thereto, the
capitalized terms used herein and therein shall, unless otherwise
defined herein or therein, have the meanings set forth below.
"Acquired Assets" means (i) all Purchased Assets and
(ii) all Contributed Assets.
"Acquired Advance" means any Purchased Advance or
Contributed Advance.
"Administrative Agent" means CFS in its capacity as
"Administrative Agent" for Triple-A.
"Administrative Services Agreement" means the
Administrative Services Agreement, dated as of the date hereof
entered into among Ag Services and the Borrower, in substantially
the form of Exhibit G hereto, as the same may be amended,
supplemented or otherwise modified from time to time in
accordance with the terms hereof.
"Advance" means an advance made to an Obligor in
respect of a Loan, together with interest accrued thereon and
owing under the related Loan Documents and the right arising
under such Loan Documents to receive any payment or any funds
from or on behalf of such Obligor, whether or not earned by
performance, whether constituting an account, chattel paper,
instrument, general intangible or otherwise.
"Affected Person" has the meaning assigned to such term
in Section 2.10 hereof.
"Affiliate" means, with respect to any Person, a
Person: (i) that directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common
control with, such Person; (ii) that beneficially owns or holds
10% or more of any class of the voting stock (or, in the case of
a Person that is not a corporation, 10% or more of the equity
interest) of such Person; or (iii) 10% or more of the voting
stock (or, in the case of a Person that is not a corporation, 10%
or more of the equity interest) of which is beneficially owned or
held, directly or indirectly, by such Person. The term "control"
means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting stock or an
equity interest, by contract, or otherwise.
"Aggregate Crop Concentration Limit Excess" means, at
any time, the aggregate of the separate Crop Concentration Limit
Excesses for each Crop at such time.
"Aggregate Concentration Limit Excess" means, at any
time, the sum of (without duplication) (A) the Aggregate Crop
Concentration Limit Excess at such time, plus (B) the Aggregate
Geographical Concentration Limit Excess at such time, plus (C)
the Due Date Concentration Limit Excess at such time, plus (D)
the Fixed Rate Concentration Limit Excess at such time, plus (E)
the DIP Financing Concentration Limit Excess at such time, plus
(F) the Aggregate Obligor Concentration Limit Excess at such
time.
"Aggregate Geographical Concentration Limit Excess"
means, at any time, the aggregate of the separate Geographical
Concentration Limit Excesses at such time.
"Aggregate Obligor Concentration Limit Excess" means,
at any time, the aggregate of the separate Obligor Concentration
Limit Excesses for each Obligor at such time.
"Agreement Accounting Principles" Contribution
Agreement.
"Assignment of Indemnity" means an assignment of an
Obligor's right, title and interest in Crop Insurance, executed
by such Obligor, which when accepted by the insurer, satisfies
the conditions necessary for a valid and effective assignment
pursuant to C.F.R. Section 401.8, or such successor regulations.
"Assignment of Payment" means an assignment of an
Obligor's right, title and interest in and to entitlements and
payments due or to become due in accordance with or under
applicable government programs, which satisfies the conditions
necessary for a valid and effective assignment pursuant
applicable laws and regulations of the appropriate Governmental
Authority.
"Authorized Officer" means, with respect to any
corporation or similar legal association, any president, vice
president, assistant vice president, director, managing director,
treasurer, assistant treasurer, chief financial officer, chief
underwriting officer, chief accounting officer, secretary, or
assistant secretary or any other such officer or Person
customarily performing functions similar to those performed by
the above designated officers.
"Bankruptcy Code" means Title 11 of the United States
Code (11 U.S.C. Section 101 et seq.), as amended from time to
time, or any successor statute.
"Base Rate" means a fluctuating interest rate per annum
equal to the higher of (i) the rate of interest published in the
New York edition of the Wall Street Journal as the prime rate,
or, in the event that no such rate is published, the rate of
interest announced by the Liquidity Agent in New York, New York,
from time to time as its base rate, whether or not such rate is
the lowest rate offered by such institution to its corporate
borrowers and (ii) 1/2 of one percent per annum above the Federal
Funds Rate.
"Base Rate Advance" means a Liquidity Advance which
bears interest at the Base Rate.
"Benefit Plan" means a defined benefit plan as defined
in Section 3(35) of ERISA (other than a Multiemployer Plan) in
respect of which Ag Services or any ERISA Affiliate thereof is,
or at any time within the immediately preceding six (6) years
was, an "employer" as defined in Section 3(5) of ERISA.
"Borrower" means Ag Acceptance Corporation, a Delaware
corporation.
"Borrowing" means a borrowing of Triple-A Loans
hereunder.
"Borrowing Base" means, at any time, an amount equal to
the lesser of:
(i) the sum of:
(A) the Net Aggregate Eligible Advances at such time,
minus
(B) the Loss Reserve at such time, minus
(C) the Servicing Reserve at such time, minus
(D) the Interest Reserve at such time, minus
(E) the Dilution Reserve at such time, minus
(F) the Liquidation Reserve at such time; or
(ii) the sum of (a) the Net Aggregate Eligible Advances at
such time minus (b) 17% of the Greatest Amount of Eligible
Advances at such time.
"Borrowing Base Shortfall" means, at any time, the
amount, if any, by which the then outstanding principal amount of
the Triple-A Loans exceeds the Borrowing Base then in effect.
"Borrowing Date" means, with respect to any Borrowing,
the date on which such Borrowing is funded.
"Business Day" means any day other than a Saturday,
Sunday or public holiday or the equivalent for banks in New York
City; provided that, when used in connection with any Eurodollar
Rate Advance or other matters concerning the Eurodollar Rate, the
term "Business Day" means any such day on which dealings are
carried on in the London interbank market and on which banks are
open for business in London, England.
"CapMAC" means Capital Markets Assurance Corporation, a
New York stock insurance company.
"Carrying Costs" means, at any time, the aggregate
amount of (i) all accrued and unpaid interest (exclusive of
interest on the Triple-A Loans), fees, premiums and other
expenses owing by the Borrower to Triple-A, the Collateral Agent,
the Dealer, the Surety, the Servicer, the Administrative Agent or
the Custodian (including, without limitation, all fees owed under
the Fee Letter, collateral audit fees and expenses, the Servicing
Fee, the compensation owing to any Successor Servicer pursuant to
Section 10.02(c) hereof, the CP Dealer Fees and the Surety Bond
Premium) plus (ii) all accrued and unpaid ordinary course
operating expenses incurred by the Borrower (including rent,
salaries, professional fees and expenses incurred in connection
therewith); provided that in the event that any such expenses are
the subject of allocations made pursuant to the Administrative
Services Agreement, "Carrying Costs" shall include such expenses
only to the extent allocated to the account of the Borrower
thereunder.
"CERCLA" means the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended.
"Collateral" has the meaning assigned to such term in
Section 7.01 hereof.
"Collection Account" has the meaning assigned to such
term in Section 7.06 hereof.
"Collection Account Agreement" means the Collection
Account Agreement dated as of the date hereof, among the
Collection Account Bank, the Servicer and the Collateral Agent,
as the same may be amended, supplemented or otherwise modified
from time to time in accordance with the terms hereof.
"Collection Account Bank" means the bank at which the
Collection Account is maintained.
"Collateral Agent" means CapMAC in its capacity as
"Collateral Agent" for itself and Triple-A pursuant hereto, and
any successor Collateral Agent acting in such capacity.
"Collection Date" means the earliest date following the
Termination Date on which each of the following described events
has occurred: (i) the aggregate outstanding principal amount of
Triple-A Loans have been paid in full and in cash, (ii) each of
Triple-A, the Collateral Agent, the Administrative Agent, CFS,
CapMAC and the Surety has received all interest, fees and other
amounts payable to such Person under the Credit Agreement and the
other Facility Documents, (iii) the Surety Bonds have been
released and discharged and (iv) all other Obligations
outstanding under the Credit Agreement and the other Facility
Documents have been paid in full and in cash. Notwithstanding
anything herein or elsewhere to the contrary, in the event that
any payment (or any part thereof), release or discharge referred
to in the foregoing sentence is subsequently invalidated,
declared to be fraudulent or preferential or set aside and
required to be repaid to any person (or to the estate, trustee or
receiver for any such Person), or otherwise reversed or rescinded
(as the case may be), under any bankruptcy law, state or federal
law, common law or equitable cause, then the "Collection Date"
shall be deemed not to have occurred for any purpose of this
Agreement, and any rights, remedies, obligations and liabilities
in existence prior to the occurrence of any Collection Date which
were terminated or which otherwise ceased to exist as a result of
or in connection with the occurrence of a Collection Date
hereunder, shall be reinstated and continued in full force and
effect as of the date such initial payment, release or discharge
occurred, and shall continue until such later time as the
"Collection Date" occurs again pursuant to the terms of the first
sentence of this definition.
"Collections" means, with respect to any Acquired
Advance, all cash collections and other cash proceeds of such
Acquired Advance, including, without limitation, all cash
proceeds of Related Security with respect to such Acquired
Advance, including, without limitation, (i) all payments or
recoveries made to the Collection Account or the Lock-Box
Accounts or received by the Borrower or the Servicer in respect
of such Advance, (ii) all payments under any insurance policies
relating to such Advance and any Related Security, (iii) all
payments representing a disposition of Related Security relating
to such Advance, (iv) all payments by Ag Services to the Borrower
pursuant to its indemnities under the Purchase and Contribution
Agreement and relating to such Advance and (v) all Collections of
such Advance deemed to have been received pursuant to Section 2.6
of the Purchase and Contribution Agreement.
"Commercial Paper Notes" means the short-term
promissory notes of Triple-A denominated in dollars, and issued
from time to time, including, without limitation, the Transaction
Commercial Paper Notes.
"Consolidated EBT" means, for any period, the sum of
the amounts for such period of (i) Consolidated Net Income, plus
(ii) charges against income for foreign, federal, state and local
taxes to the extent deducted in computing Consolidated Net
Income, minus (iii) the amount of extraordinary gains over
extraordinary losses to the extent that such amount is included
in the calculation of Consolidated Net Income.
"Consolidated Net Income" means, for any period, the
consolidated net income (or loss) of Ag Services and its
Subsidiaries for such period determined in accordance with
Agreement Accounting Principles.
"Consolidated Net Worth" means, as of any date of
determination, the consolidated shareholders' equity of Ag
Services and its Subsidiaries determined in accordance with
Agreement Accounting Principles.
"Consolidated Pre-Tax Margin" means, for any period,
the ratio (expressed as a percentage) computed by dividing (a)
Consolidated EBT for such period by (b) the consolidated gross
revenues of Ag Services and its Subsidiaries determined in
accordance with Agreement Accounting Principles.
"Contributed Advance" means any Advance (or portion
thereof) contributed by Ag Services to the capital of the
Borrower pursuant to the Purchase and Contribution Agreement.
"Contributed Assets" means all Contributed Advances,
all Related Security and other property relating thereto in which
the Borrower has acquired an interest as a result of a
contribution to its capital by Ag Services pursuant to Section
2.2 of the Purchase and Contribution Agreement; provided that
"Contributed Assets" shall exclude the right under the related
Loan Documents to make any Advances thereunder, which right and
related interest in such Loan Documents shall be retained by Ag
Services.
"CP Dealer Fee" means, on any day, the fees payable to
the Dealer in respect of any Transaction Commercial Paper Notes.
"CP Disruption" means the inability of Triple-A, at any
time, whether as a result of a prohibition or any other event or
circumstance whatsoever, to raise funds through the issuance of
its commercial paper notes (whether or not constituting
Transaction Commercial Paper Notes) in the United States
commercial paper market.
"Credit Agreement" has the meaning given to such term
in the first paragraph hereof.
"Credit and Collection Policy" means the Credit and
Collection Policy of Ag Services, a copy of which is attached
hereto as Exhibit B, as the same may be amended from time to time
in accordance with the provisions of Section 5.02(c) hereof.
"Credit Factor" means the advance rates (expressed as
percentages) applicable to various Crops as set forth on Exhibit
J hereto.
"Credit Factor Adjustment" means, at any time, an
amount equal the aggregate of the following amounts computed as
follows for each Obligor of an Eligible Advance: the excess of
(i) the outstanding Principal Balances of Eligible Advances (if
any) extended to an Obligor over (ii) the credit limit for such
Obligor (as determined pursuant to the Credit and Collection
Policy) recomputed using the applicable Credit Factor(s).
"Crop" means any crop that is insurable under Crop
Insurance and such other crops approved in writing by the
Administrative Agent.
"Crop Concentration Limits" means, at any time, with
respect to the acres of a particular Crop financed by Eligible
Advances included in Acquired Assets at such time, an amount
equal to the percentage listed opposite such Crop multiplied by
the aggregate outstanding Principal Balances of Eligible Advances
included in Acquired Assets at such time:
% of Eligible
Crop Advances
Corn 75%
Soybeans 50%
Cotton 10%
Wheat 25%
Rice 10%
Other 25%
"Crop Concentration Limit Excess" means, at any time,
with respect to a Crop, the amount (if any) by which the
aggregate outstanding Principal Balances of Eligible Advances
included in Acquired Assets used to finance such Crop, exceeds
the Crop Concentration Limit for such Crop at such time.
"Crop Insurance" means all of an Obligor's right, title
and interest in any indemnity payments in respect of such
Obligor's agricultural crop insurance issued pursuant to the
Federal Crop Insurance Program.
"Custodial Agreement" means that Custodial Agreement,
dated as of the date hereof, among Ag Services, the Borrower, the
Collateral Agent, Triple-A and Norwest Trust - Des Moines as
"Custodian", as the same may be amended, supplemented or
otherwise modified from time to time thereafter in accordance
with the terms hereof.
"Custodian" means, at any time, the "Custodian" under
the Custodial Agreement at such time.
"Dealer" or "Commercial Paper Dealer" Any dealer or
placement agent of the Commercial Paper Notes.
"Debt" of any Person means (a) indebtedness of such
Person for borrowed money, (b) obligations of such Person
evidenced by bonds, debentures, notes or other similar
instruments, (c) obligations of such Person to pay the deferred
purchase price of property or services, (d) obligations of such
Person as lessee under leases which have been or should be, in
accordance with GAAP recorded as capital leases, (e) obligations
secured by any lien or other charge upon property or assets owned
by such Person, even though such Person has not assumed or become
liable for the payment of such obligations, (f) reimbursement
obligations under letters of credit, (g) obligations of such
Person under direct or indirect guaranties in respect of, and
obligations (contingent or otherwise) to purchase or otherwise
acquire, or otherwise assure a creditor against loss in respect
of, indebtedness or obligations of others of the types referred
to in clauses (a) through (f) above, and (h) liabilities in
respect of unfunded vested benefits under plans covered by Title
IV of the Employee Retirement Income Security Act of 1974, as
amended.
"Debtor Relief Laws" means the Bankruptcy Code and all
other applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency,
reorganization, suspension of payments, or similar debtor relief
laws from time to time in effect affecting the rights of
creditors generally.
"Default Ratio" means the ratio (expressed as a
percentage) computed as of any day by dividing:
(a) (without duplication) the sum of the aggregate
outstanding Principal Balances of Acquired Advances in
respect of Loans on such date that have become Defaulted
Loans or Delinquent Loans in the immediately preceding 12
month period;
by
(b) the Greatest Amount of Eligible Advances on such date.
"Defaulted Loan" means any Loan (i) with respect to
which any required payment or portion thereof remains unpaid more
than 10 months past the original Due Date therefor, or (ii) which
has been, or which pursuant to the Credit and Collection Policy
should be, written off as uncollectible.
"Delinquent Loan" means any Loan which is not a
Defaulted Loan or a Remarketing Loan, and with respect to which
any required payment or portion thereof remains unpaid after the
original Due Date therefor.
"Depository Institution" means a depository institution
or trust company, incorporated under the laws of the United
States or any State thereof, that is subject to supervision and
examination by federal and/or state banking authorities.
"Dilution Factors" means, with respect to the Acquired
Advances, any credits, rebates, freight charges, discounts,
allowances, disputes, chargebacks, returned or repossessed goods,
inventory transfers, allowances for early payments and other
allowances or adjustments granted in accordance with the Seller's
usual practices.
"Dilution Ratio" means the ratio (expressed as a per-
centage) determined in respect of a calendar year, computed as of
the last day of such calendar year (or with respect to the then
current year, as of the last day of each calendar month of such
year) by dividing:
(a) the sum of the five (5) highest monthly totals (or all
monthly totals if such computation is made prior to the end
of June of the then current calendar year) of reductions in
the principal balance of the Acquired Advances as a result
of any of the Dilution Factors;
by
(b) the Greatest Amount of Net Eligible Advances for such
calendar year (or with respect to the then current year, the
greatest of (x) the Greatest Amount of Net Eligible Advances
on such date and (y) the aggregate outstanding Principal
Balance of Eligible Advances included in Acquired Advances
at such time minus the aggregate outstanding Principal
Balance of Remarketing Loans included in Acquired Assets at
such time).
"Dilution Reserve" means, at any time, two (2) times
the product of (i) the Greatest Amount of Net Eligible Advances
at such time and (ii) the greatest of the Dilution Ratio at such
time and the Dilution Ratios for the two immediately preceding
calendar years.
"DIP Financing Limit" means, at any time, the product
of (i) 5% and (ii) the aggregate outstanding Principal Balances
of Eligible Advances at such time.
"DIP Financing Concentration Limit Excess" means, at
any time, the amount (if any) by which (i) the aggregate
outstanding Principal Balances of Eligible Advances to Obligors
that are debtors-in-possession (under Chapter 11, 12 or 13 of the
Bankruptcy Code) and in respect of which a bankruptcy court has
granted approval of a postpetition first priority security
interest in the Related Security at such time exceeds (ii) the
DIP Financing Concentration Limit at such time.
"DOL" means the United States Department of Labor and
any successor department or agency.
"Due Date" means, with respect to any Loan, the
original stated maturity for such Loan; provided that, in no
event shall the Due Date be more than 18 months from the date of
the Note evidencing such Loan and the related Advances.
"Due Date Concentration Limit" means, at any time, the
product of (i) 5% and (ii) the aggregate outstanding Principal
Balances of Eligible Advances at such time.
"Due Date Concentration Limit Excess" means, at any
time, the amount (if any) by which (i) the aggregate outstanding
Principal Balances of Eligible Advances with Due Dates other than
(a) January 15 or January 31 of the year following the fall
harvest in respect of which the Loan and such related Advances
were made or (b) with respect to any Loan made to finance a
winter wheat crop, September 15 of the year of the harvest in
respect of which the Loan and such related Advances were made
exceeds (ii) the Due Date Concentration Limit at such time.
"Effective Date" means the date on which the conditions
set forth in Section 3.01 hereof shall have been satisfied.
"Eligible Advance" means, at any time, an Advance in
respect of a Loan:
(i) which is currently owing under a Note which has
been duly authorized and which, together with the related
Loan Documents, is in full force and effect and constitutes
the legal, valid and binding obligation of the Obligor of
such Advance to pay the outstanding principal amount of such
Advance and interest thereon, and the related Loan Documents
are enforceable against such Obligor in accordance with
their respective terms except as limited by Debtor Relief
Laws and except as such enforceability may be limited by
general provisions of equity;
(ii) which arose in the ordinary course of business of
Ag Services, under Loan Documents substantially in the form
of Exhibit C hereto, the performance of which have been
completed by Ag Services and by all other parties other than
the Obligor, and all advances, goods or services in
connection therewith have been delivered to or performed for
the Obligor;
(iii) which is not in respect of a Delinquent Loan or a
Defaulted Loan and in respect of which (except with respect
to a Remarketing Loan) no material default exists (whether
matured or otherwise), and with respect thereto there is not
then in effect any waiver by Ag Services of any (a) material
default with respect to the applicable Loan or (b) any event
or circumstance that would, with notice, the passage of
time, or both, become a material default with respect to the
related Loan;
(iv) the Obligor of which is not the Obligor of any
Defaulted Loans;
(v) the Obligor of which is not a Governmental
Authority;
(vi) which, together with the Loan Documents related
thereto, is an "account", a "general intangible", "chattel
paper" or an "instrument" within the meaning of the UCC of
all jurisdictions which govern the perfection of the
Borrower's interest therein;
(vii) with respect to which all material consents,
licenses, approvals or authorizations of, or registrations
or declarations with, any Governmental Authority required to
be obtained, effected or given in connection with the making
of such Advance have been duly obtained, effected or given
and are in full force and effect;
(viii) the Obligor of which is not an Affiliate of any of
the parties hereto;
(ix) the Obligor of which is organized in and a
resident of the United States;
(x) which is denominated and payable only in United
States Dollars in the United States;
(xi) which is due in a single installment of principal
and interest on the Due Date for the applicable Loan;
(xii) which bears interest either (a) at a fluctuating
per annum rate equal to or in excess of the prime rate as
reported in the Midwestern edition of the Wall Street
Journal as in effect from time to time (or, if less, the
maximum non-usurious rate), or (b) in respect of Obligors
who are residents of Arkansas, at a fixed interest rate per
annum which, as of the date of the Note, is equal to or in
excess of the prime rate as reported in the Midwestern
edition of the Wall Street Journal as in effect on such date
(or, if less, the maximum non-usurious rate);
(xiii) which, together with the Loan Documents related
thereto, does not contravene in any material respect any
laws, rules or regulations applicable thereto (including,
without limitation, laws, rules and regulations relating to
usury, truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection
practices and privacy) and with respect to which no party to
the Loan Documents related thereto is in material violation
of any such law, rule or regulation in any respect;
(xiv) which is prepayable without penalty and, together
with the related Loan Documents and Related Security, is
fully assignable;
(xv) which has been originated pursuant to and
satisfies in all material respects all applicable
requirements of the Credit and Collection Policy;
(xvi) with respect to which only one current original
Note exists, which Note has been delivered to the Custodian;
(xvii) which is secured by a perfected security interest
in the Related Security (including, without limitation, the
related Assignment of Payment, if any, but exclusive of the
Assignment of Indemnity) in favor of the Borrower, which
security interest has the priority required for such
security interest in the related Loan Documents and the
Credit and Collection Policy;
(xviii) which has not been compromised, adjusted or
similarly modified and is not subject to any Obligor Claims
whatsoever and which did not arise pursuant to Loan
Documents giving the Obligor an explicit right of offset;
(xix) which was made under the existing Loan
Documents, which Loan Documents have not been modified for
negative credit reasons, except as agreed to by the
Administrative Agent;
(xx) with respect to which the Loan Documents are
complete in accordance with the Credit and Collection
Policy;
(xxi) which was not classified by Ag Services as
"doubtful" or "loss" under the Credit and Collection Policy
at the time of Purchase by the Borrower;
(xxii) the Obligor of which has been notified of the
transfer pursuant to the Purchase and Contribution Agreement
and the pledge under this Agreement;
(xxiii) which is free and clear of any Lien (other than
the Primary Lien and Permitted Encumbrances) and in which
(i) the Borrower has a valid ownership interest (which
ownership interest, to the extent it constitutes a security
interest under the UCC, shall be perfected and of first
priority) and (ii) the Collateral Agent has a first priority
perfected security interest; and
(xxiv) as to which the Administrative Agent has not
notified the Servicer or the Borrower that the
Administrative Agent has determined, in its sole discretion,
that such Loan is not acceptable for eligibility hereunder.
"Eligible Depository Institution" means a Depository
Institution, the short term unsecured senior indebtedness of
which is rated at least A-1 by S&P and P-1 by Moody's.
"Environmental Laws" means all applicable federal,
state or local statutes, laws, ordinances, codes, rules,
regulations and guidelines (including consent decrees and
administrative orders) relating to public health and safety and
protection of the environment.
"ERISA" means the U.S. Employee Retirement Income
Security Act of 1974, as amended from time to time, and any
successor statute.
"ERISA Affiliate" means any (i) corporation which is a
member of the same controlled group of corporations (within the
meaning of Section 414(b) of the IRC) as Ag Services or the
Borrower; (ii) partnership or other trade or business (whether or
not incorporated) under common control (within the meaning of
Section 414(c) of the IRC) with Ag Services, or the Borrower or
(iii) member of the same affiliated service group (within the
meaning of Section 414(m) of the IRC) as Ag Services or the
Borrower, any corporation described in clause (i) above or any
partnership or other trade or business described in clause (ii)
above.
"Eurocurrency Liabilities" has the meaning assigned to
that term in Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Eurodollar Rate" means for a Eurodollar Rate Advance
and the relevant Interest Period, an interest rate per annum
determined by the Liquidity Agent equal to the quotient of
(i) the rate at which the London Branch of Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland", would offer
deposits in United States dollars to leading banks in the London
interbank market for a period equal to such Interest Period and
in a principal amount comparable to the relevant amount to be
financed hereunder at or about 11:00 A.M. (London time) on the
second Business Day before (and for value on) the first day of
such Interest Period, divided by (ii) one minus the Eurodollar
Reserve Percentage (expressed as a decimal) applicable to that
Interest Period.
"Eurodollar Rate Advance" means a Liquidity Advance
which bears interest at a rate per annum calculated by reference
to the Eurodollar Rate.
"Eurodollar Reserve Percentage" means, for an Interest
Period for any Eurodollar Rate Advance, the reserve percentage
applicable during such Interest Period (or, if more than one such
percentage shall be so applicable, the daily average of such
percentages for those days in such Interest Period during which
any such percentage shall be so applicable) equal to the maximum
aggregate reserve requirements (including, without limitation,
any emergency, supplemental or other marginal reserve
requirement) specified under regulations issued from time to time
by the Board of Governors of the Federal Reserve System (or any
successor) and then applicable to liabilities or assets
consisting of or including Eurocurrency Liabilities having a term
equal to such Interest Period.
"Event of Default" has the meaning assigned to such
term in Section 9.01 hereof.
"Face Amount" means (i) with respect to any Commercial
Paper Notes issued on a discount basis, the face amount of any
such Commercial Paper Notes and (ii) with respect to any Commer-
cial Paper Notes issued on an interest-bearing basis, the sum of
the principal amount thereof and the amount of all interest
stated to accrue thereon through the stated maturity date.
"Facility Documents" means, collectively, the Purchase
and Contribution Agreement, the Seller Note, the Credit
Agreement, the Triple-A Note, the Custodial Agreement, the Lock-
Box Agreements, the Collection Account Agreement, the Insurance
Agreement, the Surety Bonds, the Liquidity Agreement, the
Liquidity Note, the Liquidity Security Agreement, the Administra-
tive Services Agreement, the Financing Statements, and all other
agreements, documents and instruments delivered pursuant thereto
or in connection therewith.
"Facility Limit" means $135,000,000, as such amount may
be reduced pursuant to Section 2.04.
"Federal Crop Insurance Program" means the agricultural
crop insurance program established pursuant to the Federal Crop
Insurance Act, as amended.
"Federal Funds Rate" means, for any day, the
fluctuating interest rate per annum at which the Liquidity Agent,
as a branch of a foreign bank, in its sole discretion, can
acquire funds in the New York City interbank market or other
funding sources available to the Liquidity Agent, through brokers
of recognized standing, for a period and in an amount comparable
to the period and amount requested by the Borrower.
"Fee Letter" means that certain Fee Letter Agreement,
dated as of the date hereof, among Ag Services, the Borrower,
Triple-A, and CFS, individually and as the Administrative Agent
and CapMAC, individually and as the Collateral Agent, as the same
may be amended, supplemented or otherwise modified from time to
time in accordance with the terms hereof.
"Financing Statements" means, collectively, the UCC-1
financing statements, and the UCC-2 and UCC-3 amendment, partial
release, termination, extension and assignment statements, to be
executed and delivered in connection with any of the transactions
contemplated hereby or any of the other Facility Documents
(including, without limitation, the financing statements
identified on Exhibit I hereto or otherwise referred to in
Section 3.02(c) hereof).
"Fixed Rate Concentration Limit" means, at any time,
the product of (i) 5% and (ii) the aggregate outstanding
Principal Balances of Eligible Advances at such time.
"Fixed Rate Concentration Limit Excess" means, at any
time, the amount (if any) by which the aggregate outstanding
Principal Balances of Eligible Advances which bear interest at a
fixed rate exceeds the Fixed Rate Concentration Limit at such
time.
"GAAP" means generally accepted accounting principles
that are (i) consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its
predecessors, as in effect from time to time, and (ii)
consistently applied with past financial statements of Ag
Services and its Subsidiaries adopting the same principles,
provided that a certified public accountant would, insofar as the
use of such accounting principles is pertinent, be in a position
to deliver an unqualified opinion (other than a qualification
regarding changes in generally accepted accounting principles) as
to financial statements in which such principles have been
properly applied.
"Geographical Concentration Limits" means, at any time,
with respect to the acres of Crops in any single state, any five
states in the aggregate and in the "South Region" (as defined in
the Credit and Collection Policy) financed by Eligible Advances
included in Acquired Assets at such time, an amount equal to the
percentage listed opposite such state(s)/region multiplied by the
aggregate outstanding Principal Balances of Eligible Advances
included in Acquired Assets at such time:
% of Eligible
Category Advances
Any single state 20%
Any five state in
the aggregate 70%
South Region 12%
"Geographical Concentration Limit Excess" means, at any
time, with respect to any single state, any five states in the
aggregate and in the "South Region" (as defined in the Credit and
Collection Policy), the amount (if any) by which the aggregate
outstanding Principal Balances of Eligible Advances included in
Acquired Assets extended to finance Crops in such
state(s)/region, exceeds the Geographical Concentration Limit for
such state(s)/region at such time.
"Governmental Authority" means any country or nation,
any political subdivision, state or municipality of such country
or nation, and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining
to government of any country or nation or political subdivision
thereof.
"Grant" "Granted" or "Granting" means, as to any asset
or property, to pledge, assign and grant, to have pledged,
assigned and granted, or the act of so pledging, assigning or
granting (as the case may be) a security interest in such asset
or property. A "Grant" of any Advance, any Loan Document or any
instrument, agreement, account or other item of Collateral shall
include all rights, powers and options of the Granting party
thereunder or with respect thereto, including without limitation
the immediate and continuing right to claim, collect, receive and
give receipt for principal, interest and other payments in
respect of such Advance, principal and interest payments and
receipts in respect of the Permitted Investments, insurance
proceeds, purchase prices and all other moneys payable thereunder
and all income, proceeds, products, rents and profits thereof, to
give and receive notices and other communications, to make
waivers or other agreements, to exercise all such rights and
options, to bring proceedings in the name of the Granting party
or otherwise, and generally to do and receive anything which the
Granting party is or may be entitled to do or receive thereunder
or with respect thereto.
"Greatest Amount of Eligible Advances" means, as of any
date of determination, an amount equal to the highest aggregate
outstanding Principal Balance of Eligible Advances included in
Acquired Assets on any single day during the immediately
preceding 14 month period.
"Greatest Amount of Net Eligible Advances" means, as of
any date of determination, an amount equal to (a) the Greatest
Amount of Eligible Advances on such date minus (b) the aggregate
outstanding Principal Balance of Remarketing Loans included in
Acquired Assets on the date applicable to the amount determined
in clause (a) hereof.
"Hazardous Material" means: (a) any "hazardous
substance", as defined by CERCLA; (b) any "hazardous waste", as
defined by the Resource Conservation and Recovery Act, 42 U.S.C.
Section 690, et seq., as amended; (c) any petroleum product; or
(d) any pollutant or contaminant or hazardous, dangerous or
toxic chemical, material or substance within the meaning of any
Environmental Laws.
"Indemnified Amounts" has the meaning assigned to such
term in Section 11.04 hereof.
"Indemnified Party" has the meaning assigned to such
term in Section 11.04 hereof.
"Insolvency Event" means, with respect to a specified
Person, (a) the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of such Person or
any substantial part of its property in an involuntary case under
any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or the filing of a petition against such
Person in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, which
case remains unstayed and undismissed within 60 days of such
filing, or the appointing of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such
Person or for any substantial part of its property which
appointment is not dismissed within 60 days of such appointment,
or the ordering of the winding-up or liquidation of such Person's
business; or (b) the commencement by such Person of a voluntary
case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or the consent by such Person to
the entry of an order for relief in an involuntary case under any
such law, or the consent by such Person to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official for such Person or for
any substantial part of its property, or the making by such
Person of any general assignment for the benefit of creditors, or
the failure by such Person generally to pay its debts as such
debts become due or the admission by such Person of its inability
to pay its debts generally as they become due.
"Insolvency Proceeding" means any proceeding of the
sort described in the definition of Insolvency Event.
"Insurance Agreement" means that certain Insurance and
Indemnity Agreement, dated as of the date hereof, among Triple-A,
the Borrower, the Liquidity Agent, CFS, as the Administrative
Agent and CapMAC, as the Collateral Agent, as the same may be
amended, supplemented or otherwise modified from time to time in
accordance with the terms hereof.
"Interest Payment Date" means, with respect to any
Triple-A Loan, the last day of the Interest Period then
applicable to such Triple-A Loan.
"Interest Period" means, with respect to any Triple-A
Loan, commencing on the date such Triple-A Loan is advanced until
the Interest Payment Date therefor, and thereafter commencing on
the last day of the then existing Interest Period for such
Triple-A Loan until the next Interest Payment Date therefor, a
period selected by the Administrative Agent and notified to the
Borrower in accordance with Section 2.03(b) hereof. Such
Interest Period shall be:
(i) if such Triple-A Loan is funded through the
issuance of Transaction Commercial Paper Notes, a period of
from 1 to 270 days;
(ii) if such Triple-A Loan is funded through Base Rate
Advances, a period of from 1 to 30 days;
(iii) if such Triple-A Loan is funded through
Eurodollar Rate Advances, a period of one, two, three or six
months;
provided, however, that
(x) whenever the last day of an Interest Period would
otherwise occur on a day other than a Business Day, the last
day of such Interest Period shall be extended to occur on
the next succeeding Business Day, except with respect to an
Interest Period described in clause (iii) above and such
Interest Period would otherwise have ended in the next
succeeding calendar month, in which case the last day of
such Interest Period shall be deemed to occur on the
immediately preceding Business Day;
(y) whenever an Interest Period described in clause
(iii) above commences on the last Business Day in a month or
on a date for which there is no numerically corresponding
day in the month in which such Interest Period would
otherwise end, the last day of such Interest Period shall
occur on the last Business Day of the month in which such
Interest Period ends; and
(z) no Interest Period described in clause (iii) above
may end later than the Scheduled Termination Date or the
Scheduled Liquidity Commitment Termination Date.
"Interest Reserve" means at any time, an amount equal
to four (4) times the product of (i) the aggregate outstanding
principal amount of Triple-A Loans on the last Business Day of
the immediately preceding February (or, if such date of
determination is the last Business Day of February, the aggregate
outstanding principal amount of Triple-A Loans at such time), and
(ii) the greatest of the three interest rates described in
Section 2.06(a) at such time.
"IRC" means the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute.
"IRS" means the Internal Revenue Service of the United
States of America.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or other), preference, priority or other security
agreement or preferential arrangement of any kind or nature
whatsoever, including, without limitation, any conditional sale
or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing
and the filing of any financing statement under the Uniform
Commercial Code (other than any such financing statement filed
for informational purposes only) or comparable law of any
jurisdiction to evidence any of the foregoing.
"Liquidation Costs" means, with respect to any Acquired
Advance, the aggregate costs, expenses and other amounts (net of
recoveries) paid to or retained by third parties in connection
with the liquidation of Related Security related to such Acquired
Advance.
"Liquidation Reserve" means, at any time, the greater
of (x) an amount equal to 2% of the Greatest Amount of Net
Eligible Advances at such time and (y) an amount equal to two (2)
times the greatest amount of annual Liquidation Costs computed
for all Acquired Advances for the three immediately preceding
calendar years.
"Liquidity Advance" means an advance funded to Triple-A
under the Liquidity Agreement.
"Liquidity Agent" has the meaning specified in the
Liquidity Agreement.
"Liquidity Agreement" means that certain Liquidity
Agreement dated as of the date hereof, by and among Triple-A, the
Liquidity Banks parties thereto and the Liquidity Agent, as the
same may be amended, supplemented or otherwise modified from time
to time hereafter.
"Liquidity Banks" means the parties to the Liquidity
Agreement specified as "Liquidity Banks" thereunder.
"Liquidity Note" has the meaning assigned to such term
in the Liquidity Agreement.
"Liquidity Security Agreement" means that certain
Liquidity Security Agreement dated as of the date hereof, by and
among Triple-A, CapMAC and the Liquidity Agent, in its capacity
as such and its separate capacity as "Liquidity Collateral
Agent", as the same may be amended, supplemented or otherwise
modified from time to time.
"Loan" shall mean a loan receivable evidenced by a Note
and comprised of one or more discretionary advances shown on the
records of Ag Services as of the Effective Date, and from time to
time thereafter, arising from the extension of credit to an
Obligor by Ag Services in the ordinary course of its business
(exclusive of any loan receivables in respect of "seed financing"
or "intermediate loans" as such terms are generally used in the
Credit and Collection Policy), and shall include, without
limitation, all monies due or owing and all Collections and other
amounts received from time to time with respect to such loan
receivable and all proceeds (including, without limitation,
"proceeds" as defined in the UCC of the jurisdiction the law of
which governs the perfection of the interest on the Loans subject
to this Agreement) thereof.
"Loan Document" means, with respect to any Loan, the
related Note and any related loan agreement, security agreement,
mortgage, Assignment of Indemnity, financing statements and other
documents, instruments, certificates or assignments (including
amendments or modifications thereof) executed by the Obligor
thereof or by another Person on the Obligor's behalf in respect
of such Loan and related Note, including, without limitation,
general or limited guaranties.
"Lock-Box Account" means an account maintained at a
Lock-Box Bank, subject to a Lock-Box Agreement, for the purpose
of receiving Collections.
"Lock-Box Agreement" means an agreement, in substan-
tially the form of Exhibit D hereto, among the Borrower, the
Collateral Agent, and the applicable Lock-Box Bank (and if
required by the Collateral Agent, the Servicer) which agreement
sets forth the rights of the Collateral Agent, the Borrower and
the applicable Lock-Box Bank with respect to the disposition and
application of the Collections received into the applicable Lock-
Box Account, including, without limitation, the right of the
Collateral Agent to direct the Lock-Box Bank to remit all
Collections directly to the Collateral Agent.
"Lock-Box Bank" means any of the banks holding one or
more lock-box or xxxxxxxx deposit accounts for receiving and/or
holding Collections from the Advances.
"Loss Reserve" means, at any time, an amount equal to
the greatest of:
(i) an amount equal to the product of (a) the Greatest
Amount of Eligible Advances at such time and (b) the greater
of (x) the average of the three (3) Loss Reserve Ratios
calculated as of December 1st of the three immediately
preceding years, and (y) the most recently calculated Loss
Reserve Ratio;
(ii) an amount equal to the product of (a) the Greatest
Amount of Eligible Advances at such time and (b) three (3)
times the average of the following ratios (computed as of
the most recent February 1st (the "Target Date")) for each
of the three (3) twelve month periods (each a "Computation
Period") which end on February 1st of the Computation
Periods that are 5, 6 and 7 years, respectively, prior to
the Target Date (each such year a "Reference Year"): for
each Reference Year, the ratio (expressed as a percentage)
computed by dividing:
(I) the sum of:
(a) the aggregate outstanding Principal Balances
of Acquired Advances in respect of Loans whose Due Date
occurred during such Reference Year, but were unpaid on
the fifth anniversary of February 1st of such Reference
Year (the "Measurement Date") plus
(b) the Principal Balance of Acquired Advances
with Due Dates in such Reference Year that were written
off as uncollectible on or prior to such Measurement
Date;
by
(II) the Greatest Amount of Net Eligible Advances on
February 1st of such Reference Year; and
(iii) five (5) times the Obligor Concentration Limit at
such time.
"Loss Reserve Ratio" means the ratio (expressed as a
percentage) computed as of any day by dividing:
(a) (without duplication) the sum of:
(i) the aggregate outstanding Principal Balances of
Acquired Advances in respect of Loans that were Defaulted
Loans as of the immediately preceding December 1st, plus
(ii) the aggregate outstanding Principal Balances of
Acquired Advances in respect of Loans on such day that would
have become Defaulted Loans as of the immediately preceding
December 1st if such Loans had not become Defaulted Loans
during the twelve month period immediately preceding such
December 1st, plus
(iii) the aggregate outstanding Principal Balances of
Acquired Advances in respect of Loans that became Defaulted
Loans during the 12 month period immediately preceding such
day;
by
(b) the Greatest Amount of Net Eligible Advances on
February 1st of the year that includes the immediately
preceding December 1st.
"Material Adverse Effect" means, with respect to any
event or circumstance, a material adverse effect on
(a) the business, properties, operations, profits,
prospects, or condition (financial or otherwise) of Ag
Services and its Subsidiaries (taken as a whole), the
Borrower, Triple-A, the Surety, the Collateral Agent or the
Administrative Agent;
(b) the ability of any of the Servicer, the Borrower
or Ag Services to perform its respective obligations under
any of the Facility Documents to which it is a party;
(c) the validity or enforceability of, or collecti-
bility of amounts payable under, the Credit Agreement, the
Purchase and Contribution Agreement or any other Facility
Document;
(d) the status, existence, perfection or priority of
(i) the Primary Lien, (ii) the Borrower's interest in and
title to the Collateral, or (iii) Ag Services' interest in
the Acquired Assets, in each case free of any Lien (other
than the Primary Lien and the Permitted Encumbrances);
(e) the value, validity, enforceability or collecti-
bility of the Triple-A Loans, the Loan Documents, or any of
the other Collateral (as applicable).
"Maturity Date" means the earliest to occur of (i)
Scheduled Termination Date, (ii) the date on which all amounts
owing under Triple-A Loans hereunder are accelerated and become
due and payable pursuant to Section 9.02 hereof, and (iii) the
date on which all amounts of principal and interest then
outstanding under the Triple-A Loans would be required to be
repaid as a result of application of amounts on deposit in the
Collection Account pursuant to Section 7.06 hereof.
"Moody's" means Xxxxx'x Investors Service, Inc., and
any successor thereto.
"Multiemployer Plan" means a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA which is, or within the
immediately preceding six (6) years was, contributed to by either
the Seller or any ERISA Affiliate.
"Net Aggregate Eligible Advances" means, at any time,
the aggregate outstanding Principal Balance of the Eligible
Advances included in Acquired Assets at such time minus the
Aggregate Concentration Limit Excesses at such time minus the
Credit Factor Adjustment at such time.
"Note" means any promissory note evidencing the
indebtedness of an Obligor under a Loan and each Advance made in
respect thereof, together with any modifications thereto.
"Notice of Borrowing" has the meaning assigned to such
term in Section 2.03(a) hereof.
"Obligations" means all present and future indebtedness
and other liabilities and obligations (howsoever created, arising
or evidenced, whether direct or indirect, absolute or contingent,
or due or to become due) of the Borrower to Triple-A, the Col-
lateral Agent, the Administrative Agent, the Surety and/or the
Indemnified Parties, arising under or in connection with the
Credit Agreement, the Triple-A Note, the Fee Letter, the
Insurance Agreement and any other Facility Documents to which it
is a party or the transactions contemplated thereby and shall
include, without limitation, all liability for principal of and
interest on the Triple-A Loans, prepayment premiums, closing
fees, audit fees, expense reimbursements, indemnifications, and
other amounts due or to become due under the Facility Documents,
including, without limitation, interest, premiums, fees and other
obligations that accrue after the commencement of an Insolvency
Proceeding (in each case whether or not allowed as a claim in
such Insolvency Proceeding).
"Obligor" means, with respect to any Loan, the Person
or Persons obligated to make payments in respect of the Advances
arising thereunder (including, without limitation, any co-signer
or guarantor for a Person so obligated).
"Obligor Concentration Limit" means for any Obligor at
any time, 1.5% of the Greatest Amount of Eligible Advances at
such time; provided, however, the Concentration Limit shall be
calculated as if such Obligor and all of such Obligor's
Affiliates were one Obligor.
"Obligor Concentration Limit Excess" means, at any
time, with respect to an Obligor, the amount (if any) by which
the aggregate outstanding Principal Balances of Eligible Advances
to such Obligor included in Acquired Advances exceeds the Obligor
Concentration Limit.
"Obligor Claim" means any dispute, claim, offset or
defense of the Obligor of a Loan, including, without limitation,
the defense of usury, or any other claim of such Obligor against
or adjustment to such Loan resulting from the transaction out of
which such Loan arose or any related or unrelated transaction.
"Officer's Certificate" means a certificate signed by
the President, any Senior Vice President or the Treasurer of the
Borrower or the Servicer, as the case may be.
"Opinion of Counsel" means a written opinion of
independent counsel reasonably acceptable to the Collateral
Agent, in form and substance satisfactory to the Collateral
Agent, which independent counsel may be regular outside counsel
for the Borrower, the Servicer or the Collateral Agent.
"Other Parties" has the meaning assigned to such term
in Section 12.01 hereof.
"Other Taxes" has the meaning assigned to such term in
Section 2.10(b) hereof.
"PBGC" means the Pension Benefit Guaranty Corporation
and any Person succeeding to the functions thereof.
"Permitted Encumbrances" means, with respect to any
Related Security constituting Crops, (a) Liens against such Crops
which are by statute granted priority over the Lien granted to Ag
Services pursuant to the Loan Documents, or (b) which secure Debt
to Persons other than parties hereto which have been deducted by
Ag Services in setting the credit limit for the related Obligor.
"Permitted Investments" means (i) securities issued or
directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having
maturities on or before the first Settlement Date after the date
of acquisition; (ii) demand deposits, time deposits and
certificates of deposit having maturities on or before the first
Settlement Date after the date of acquisition, maintained with or
issued by any commercial bank having capital and surplus in
excess of $500,000,000 and having a short term senior unsecured
debt rating of at least A-1 by S&P, and at least P-1 by Moody's;
(iii) repurchase agreements having maturities on or before the
first Settlement Date after the date of acquisition for
underlying securities of the types described in clauses (i) and
(ii) above or clause (iv) below and/or overnight time deposits in
either case with any Eligible Depositary Institution; (iv)
commercial paper maturing on or before the first Settlement Date
after the date of acquisition and having a short term senior
unsecured debt rating of at least A-1 by S&P, and at least P-1 by
Moody's; and (v) freely redeemable shares in money market funds
which invest solely in obligations, bankers' acceptances,
certificates of deposit, repurchase agreements and commercial
paper of the types described in clauses (i) through (iv) above,
without regard to the limitations as to the maturity of such
obligations, bankers' acceptances, certificates of deposit,
repurchase agreements or commercial paper set forth in such
clauses, which money market funds are rated at least AAm or AAm-g
by S&P and Aa1 by Moody's.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust, unin-
corporated association, limited liability company, joint venture,
government (or any agency or political subdivision thereof) or
other entity.
"Plan" means an employee benefit plan defined in Sec-
tion 3(3) of ERISA in respect of which the Seller or any ERISA
Affiliate is, or within the immediately preceding six years was,
an "employer" as defined in Section 3(5) of ERISA.
"Plan Insolvency" shall mean, with respect to any
Multiemployer Plan, the condition that such Plan is insolvent
within the meaning of Section 4245 of ERISA.
"Primary Custodial Documents" has the meaning assigned
to such term in Section 5.01(k)(ii) hereof.
"Primary Lien" has the meaning assigned to such term in
Section 7.01 hereof.
"Principal Balance" means, with respect to an Advance,
and as of a date of determination, the unpaid principal balance
of such Advance on such date.
"Program Fees" has the meaning assigned to such term in
the Fee Agreement.
"Purchase" means a purchase (whether by means of cash
payment or otherwise) of Acquired Assets by the Borrower from Ag
Services pursuant to Section 2.2 of the Purchase and Contribution
Agreement.
"Purchase and Contribution Agreement" means that
certain Purchase and Contribution Agreement, dated as of the date
hereof by and among Ag Services and the Borrower, as the same may
be amended, supplemented or otherwise modified from time to time
in accordance with the terms hereof.
"Purchase Price" means the applicable purchase price to
be paid by Borrower to Ag Services under and as defined in
Section 2.2(b) of the Purchase and Contribution Agreement.
"Purchased Advance" means any Advance (or portion
thereof) purchased by the Borrower pursuant to the Purchase and
Contribution Agreement.
"Purchased Assets" means all Purchased Advances,
Related Security and other property relating thereto in which the
Borrower has purchased an interest pursuant to Section 2.2 of the
Purchase and Contribution Agreement; provided that "Purchased
Assets" shall exclude the right under the related Loan Documents
to make any Advances thereunder, which right and related interest
in such Loan Documents shall be retained by Ag Services.
"Records" means all Loan Documents and other documents,
books, credit files, records and other information (including,
without limitation, computer programs, tapes, discs, punch cards,
data processing software and related property and rights)
maintained with respect to Loans and the related Obligors.
"Related Security" means, with respect to any Advance,
(i) all of Ag Services' and/or the Borrower's right, title and
interest in and to the payments to be made by the Obligor and any
other rights which are assignable under the related Loan
Documents; (ii) all security interests or liens and property
subject thereto from time to time purporting to secure payment of
such Advance, whether pursuant to the Loan Documents related to
such Advance or otherwise, including without limitation, all
interests in Crop Insurance with respect to such property; (iii)
all Records; (iv) guarantees and other agreements or arrangements
of whatever character from time to time supporting or securing
payment of such Advance whether pursuant to the Loan Documents
related to such Advance or otherwise; (v) in the case of the
Borrower, all of its right, title and interest in and to the
Purchase and Contribution Agreement and (vi) all rights under
warranties, indemnities, or insurance with respect to the
Advances, related Loan Documents or other Related Security
described above, including without limitation any such
warranties, indemnities made by Ag Services under the Purchase
and Contribution Agreement.
"Remarketing Loan" means a Loan (i) which is not a
Defaulted Loan, (ii) which remains unpaid in whole or part after
the Due Date for such Loan, (iii) which, on or prior to the Due
Date for such Loan, the Borrower has elected to classify such
Loan as a "Remarketing Loan", and (iv) with respect to which, on
or prior to the date that is four weeks after the Due Date for
such Loan, the Borrower or the Servicer has notified the Obligor
thereof that such Loan is past due and that the Borrower's
election not to demand payment of such Loan at the time of such
notice neither constitutes an extension of the Due Date nor a
waiver of the Borrower's right to demand immediate payment.
"Remarketing Ratio" means the ratio (expressed as a
percentage) computed as of any day by dividing (a) the sum of the
aggregate Principal Balances of Remarketing Loans on the
immediately preceding February 1st by (b) the Greatest Amount of
Eligible Advances.
"Reorganization" means, with respect to any
Multiemployer Plan, the condition that such Plan is in
reorganization within the meaning of Section 4241 of ERISA.
"Reportable Event" means any of the events described in
Section 4043 of ERISA.
"Scheduled Liquidity Commitment Termination Date" has
the meaning assigned to that term in the Liquidity Agreement.
"Scheduled Termination Date" means the fifth
anniversary of the Effective Date; provided that if such date is
not a Business Day then the "Scheduled Termination Date" shall be
the immediately preceding Business Day.
"Secured Creditors" has the meaning assigned to such
term in Section 12.01 hereof.
"Seller" means Ag Services.
"Seller Note" has the meaning assigned to such term in
Section 2.2 of the Purchase and Contribution Agreement.
"Servicer" means Ag Services, until any Servicer
Transfer hereunder, and thereafter means the new Servicer
appointed pursuant to Article IX hereof.
"Servicer Default" means the defaults specified in
Section 10.01 hereof.
"Servicer's Daily Report" has the meaning specified in
Section 6.01(a) hereof.
"Servicer Termination Notice" shall have the meaning
specified in Section 10.01 hereof.
"Servicer Transfer" means the transfer specified in
Section 10.01 hereof.
"Servicing Fee" has the meaning assigned to that term
in Section 8.09 hereof.
"Servicing Fee Percentage" has the meaning assigned to
that term in Section 8.09 hereof.
"Servicing Officer" means any officer of the Servicer
involved in, or responsible for, the administration and servicing
of the Loan Documents whose name appears on a list of servicing
officers furnished to the Collateral Agent by the Servicer, as
such list may be amended from time to time.
"Servicing Reserve" means, as of any date of
determination, an amount equal to the product of (i) one percent
(1%) multiplied by (ii) the Greatest Amount of Eligible Advances
on such date.
"Settlement Date" means with respect to each calendar
month, the fifth Business Day of the immediately succeeding
month.
"Settlement Report" means a report, in substantially
the form of Exhibit F hereto, furnished by the Servicer to the
Collateral Agent pursuant to Section 6.01(b) hereof.
"S&P" means Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc., and any successor
thereto.
"Subsidiary" means, as to any Person, any corporation
or other entity of which securities or other ownership interests
having ordinary voting power to elect a majority of the Board of
Directors or other Persons performing similar functions are at
the time directly or indirectly owned by such Person.
"Successor Servicer" means the Servicer appointed
pursuant to Section 6.9 of the Purchase and Contribution
Agreement.
"Surety" means CapMAC.
"Surety Bonds" means the Surety Bonds for the benefit
of Triple-A and the Liquidity Banks issued by the Surety from
time to time under the Insurance Agreement.
"Taxes" has the meaning assigned to such term in
Section 2.10(a) hereof.
"Termination Date" means the earliest to occur of the
following events: (i) the Scheduled Termination Date, (ii) the
occurrence of an Event of Default described in Section 9.01(g)
hereof, (iii) the declaration by the Collateral Agent of the
occurrence of the "Termination Date" in the event of the
occurrence of any Event of Default other than an Event of Default
described in Section 9.01(g) hereof and (iv) the termination of
the commitments of the Liquidity Banks under the Liquidity
Agreement.
"Termination Event" has the meaning specified in
Section 6.1 of the Purchase and Contribution Agreement.
"Transaction Commercial Paper Notes" means the
Commercial Paper Notes issued by Triple-A in connection with the
transactions contemplated by the Facility Documents, including
any portion of such short-term promissory notes that are
identified on the books and records of Triple-A as issued in
respect of the transactions contemplated by the Facility
Documents.
"Triple-A" means Triple-A One Funding Corporation, a
Delaware corporation.
"Triple-A Loan" has the meaning assigned to such term
in Section 2.01 hereof.
"Triple-A Note" has the meaning assigned to such term
in Section 2.02 hereof.
"UCC" means the Uniform Commercial Code as from time to
time in effect in the State of New York, except that, with
respect to the perfection or priority of any security interest
created under the Uniform Commercial Code, the term "UCC" means
the Uniform Commercial Code as in effect in the jurisdiction
whose law governs the perfection and effect of perfection or non-
perfection of such security interest.
"Unmatured Event of Default" means any event which,
with the giving of notice or the passage of time or both, would
constitute an Event of Default.
"Unmatured Servicer Default" means any event which,
with the giving of notice or the passage of time or both, would
constitute a Servicer Default.
"Unmatured Termination Event" means any event which,
with the giving of notice or the passage of time or both, would
constitute a Termination Event.
SECTION 1.02. Accounting Terms. As used herein, in
the Triple-A Note and in any certificate or other document made
or delivered pursuant hereto and thereto, accounting terms not
otherwise defined herein and accounting terms partly defined
herein to the extent not defined, shall have the respective
meanings given to them under GAAP.
SECTION 1.03. Other Terms. (a) All other undefined
terms contained in this Credit Agreement shall, unless the
context indicates otherwise, have the meanings provided for by
the UCC to the extent the same are used or defined therein.
(b) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Credit Agreement shall
refer to this Credit Agreement as a whole, as amended, restated,
supplemented or otherwise modified from time to time after the
date hereof, and not to any particular provision of this Credit
Agreement, and Section, subsection, Schedule and Exhibit
references are to this Credit Agreement unless otherwise
specified.
(c) Capitalized terms used herein and in the Triple-A
Note shall be equally applicable to both the singular and plural
forms of such terms.
SECTION 1.04. Computation of Time Periods. In this
Credit Agreement, in the computation of periods of time from a
specified date to a later specified date, the word "from" shall
mean "from and including" and the words "to" and "until" shall
each mean "to but excluding."
ARTICLE II
THE TRIPLE-A LOANS
SECTION 2.01. The Triple-A Loans. (a) Subject to the
terms and conditions hereof, Triple-A agrees to make loans
("Triple-A Loans") from time to time during the period from the
Effective Date to the Termination Date, in an aggregate
outstanding principal amount not to exceed at any time the least
of (i) the Facility Limit in effect at such time, (ii) the
Borrowing Base in effect at such time, and (iii) the aggregate
principal amount of advances and unused commitments of the
Liquidity Banks under the Liquidity Agreement. Notwithstanding
anything in this Agreement to the contrary, under no circum-
stances shall Triple-A make any Triple-A Loan if, after giving
effect thereto, a Borrowing Base Shortfall would exist.
(b) The Borrowing Base in effect on any date shall be
determined by reference to the most recent Servicer's Daily
Report delivered by the Servicer to Triple-A in accordance with
Section 6.01 hereof, as adjusted to reflect additional Eligible
Advances to be funded by the Borrower on the date of any Proposed
Borrowing.
(c) All of the Triple-A Loans shall mature, and become
due and payable, on the Maturity Date.
SECTION 2.02. Note. All of the Triple-A Loans shall
be evidenced by a promissory note in the form attached hereto as
Exhibit H (the "Triple-A Note") appropriately completed, duly
executed and delivered on behalf of the Borrower and payable to
the order of Triple-A. The Borrowing Date and principal amount
of each Triple-A Loan, the interest rate and Interest Period
applicable thereto and each repayment or prepayment of principal
thereof shall be recorded in Triple-A's internal records and,
prior to any transfer of the Triple-A Note, on the grid schedule
annexed thereto, and the Borrower hereby authorizes Triple-A (or
the Administrative Agent on behalf of Triple-A) to make such re-
cordation; provided, however, that the failure of Triple-A to set
forth any or all of such information on such schedule or any
error in such schedule shall not in any manner affect the obliga-
tion of the Borrower to repay the Triple-A Loans in accordance
with the terms hereof and of the Triple-A Note. Such updated
grid schedules, or other proper records maintained by Triple-A
(or by the Administrative Agent on behalf of Triple-A) in lieu
thereof, shall be presumptively correct evidence of the Triple-A
Loans made by Triple-A to the Borrower. The aggregate
outstanding principal amount of the Triple-A Loans at any time
shall be the aggregate principal amount owing on the Triple-A
Note at such time.
SECTION 2.03. Making the Triple-A Loans.
(a) Notice of Borrowing. Whenever the Borrower wishes
to make a Borrowing hereunder of Triple-A Loans, it shall deliver
to Triple-A a notice ("Notice of Borrowing") in substantially the
form of Exhibit A hereto no later than 2:30 P.M. (New York City
time) on the Business Day immediately prior to the proposed Bor-
rowing Date; provided that, if the Borrower requests that the
Borrowing be funded with the proceeds of Eurodollar Rate
Advances, such notice shall be given not later than 11:00 A.M.
(New York City time) at least three (3) Business Days prior to
the proposed Borrowing Date. Each Notice of Borrowing shall be
by telephone or facsimile transmission (in the case of any such
notice by telephone, confirmed immediately in writing) and shall
specify therein the proposed (1) Borrowing Date of such
Borrowing, which shall be a Business Day, (2) aggregate amount of
such Borrowing requested (which amount shall be equal to $200,000
or an integral multiple of $100,000 in excess thereof and (3)
Interest Period relating thereto and the proposed principal
amount of each Triple-A Loan to be allocated to each Interest
Period. Each Notice of Borrowing shall be irrevocable and
binding on the Borrower.
(b) Selection of Interest Periods. Upon receiving each
Notice of Borrowing, the Administrative Agent shall, following
its review of the Borrower's proposal, promptly inform the
Borrower if one or more of the Interest Periods requested in such
notice are not acceptable, and, in such event, select (in the
exercise of its sole discretion) the Interest Periods for the
Triple-A Loan thereby requested; provided, however, that the
Administrative Agent shall use reasonable efforts to select
Interest Periods which approximately match the duration of those
requested by the Borrower. At least one Business Day prior to
the last day of each Interest Period for any Triple-A Loan, the
Borrower shall request new Interest Periods for all Triple-A
Loans, or any portions thereof, the Interest Periods of which are
then ending and which are not to be prepaid as provided in
Section 2.07 below; provided that, in the case of any Interest
Period for a Triple-A Loan for which interest is requested to be
determined by reference to the Eurodollar Rate, such request
shall be given not later than 11:00 A.M. (New York City time) at
least three (3) Business Days prior to the last day of the
relevant Interest Period; and provided further that the portion
of any Triple-A Loan assigned to an Interest Period shall not be
less than $200,000. The Administrative Agent shall, on the date
of any Borrowing hereunder and, so long as such Triple-A Loan is
outstanding, on the first day of each successive Interest Period
for such Triple-A Loan, notify the Collateral Agent and the
Borrower of the duration of the relevant Interest Period and the
interest rate which will be applicable to the Triple-A Loans
during such Interest Period as described in Section 2.06 below.
Any Interest Period that commences before the Termination Date
and would otherwise end on a date occurring after the Termination
Date shall end on the Termination Date and the duration of any
Interest Period that commences on or after the Termination Date
shall be of such duration as shall be selected by the
Administrative Agent. In addition, if a CP Disruption shall have
occurred and be continuing, Triple-A, or the Administrative Agent
on its behalf, may, upon notice to the Borrower, terminate any
Interest Period then in effect if Triple-A has funded the Triple-
A Loan allocated to such Interest Period by issuing Transaction
Commercial Paper Notes. All outstanding Triple-A Loans (and all
outstanding portions thereof) shall be assigned an Interest
Period at all times, which Interest Periods will be limited as
set forth in the definition thereof.
(c) Funding. Triple-A shall on the proposed Borrowing
Date of each Borrowing, subject to satisfaction of the applicable
conditions set forth in Article III and the limitations set forth
in Section 2.01, make available to the Borrower a wire transfer
of such funds to the Borrower in accordance with the Borrower's
written wire transfer instructions.
SECTION 2.04. Reduction of Facility Limit. The
Borrower shall have the right, at any time upon at least three
(3) Business Days' notice to Triple-A, to terminate in whole or
reduce in part the unused portion of the Facility Limit in a
minimum amount of $1,000,000 and increments of $1,000,000 in
excess thereof; provided, that (i) in no event shall the Facility
Limit be reduced to less than the aggregate principal amount of
the Triple-A Loans then outstanding and (ii) the Facility Limit
may not be reduced to an amount less than $25,000,000 unless the
Facility is terminated in full. Any such termination shall be
without premium or penalty of any kind, except for any
indemnification which may be owed in connection with such
termination pursuant to Section 2.08.
SECTION 2.05. Repayments; Manner of Payment and
Prepayment. Each of the Triple-A Loans shall be payable in full
on the Maturity Date. Each payment hereunder or prepayment of
principal of and interest on the Triple-A Note and each payment
of fees, premiums, indemnities and all other amounts payable by
the Borrower hereunder shall be made by the Borrower in
immediately available funds to the Person to which such payment
is owed not later than 11:30 A.M. (New York City time) on the
date on which payable. Payments received by a required recipient
hereunder after such time shall be deemed to have been received
on the next Business Day. All payments by the Borrower under
this Credit Agreement and the Triple-A Note shall be made without
setoff, deduction or counterclaim and the Borrower agrees to pay
on demand any present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies which
arise from any payment made hereunder or under the Triple-A Note
or from the execution, delivery or registration of, or otherwise
with respect to, this Credit Agreement or the Triple-A Note.
Whenever any payment to be made hereunder or under the Triple-A
Note shall be stated to be due on a day which is not a Business
Day, the due date thereof shall be extended to the next
applicable Business Day and interest shall be payable at the
applicable rate during such extension; provided, that if such
extension would cause payment of interest on or principal of any
Eurodollar Loan to be made in the next following month, such
payment shall be made on the next preceding Business Day.
SECTION 2.06. Interest on Triple-A Loans; Default
Interest.
(a) The Borrower shall pay to Triple-A, as interest on
the Triple-A Loans outstanding, the following amounts on the
following dates:
(i) on any Interest Payment Date for Triple-A
Loans being funded or maintained through the issuance
of Transaction Commercial Paper Notes, interest on such
Triple-A Loans in an amount equal to the imputed
interest on such maturing Transaction Commercial Paper
Notes plus the CP Dealer Fee on any such maturing
Transaction Commercial Paper Notes;
(ii) on any Interest Payment Date for Triple-A
Loans funded or maintained through the making of Base
Rate Advances under the Liquidity Agreement, accrued
and unpaid interest on such Triple-A Loans at a per
annum rate equal to the Base Rate, computed on the
basis of the actual number of days elapsed over a year
of 365 (or 366, as the case may be) days; and
(iii) on any Interest Payment Date, and, if the related
Interest Period is longer than three months, on each three
month anniversary of the first day of such Interest Period
that occurs prior to such Interest Payment Date, for Triple-
A Loans funded or maintained through the making of
Eurodollar Rate Advances under the Liquidity Agreement,
accrued and unpaid interest on such Triple-A Loans at a per
annum rate equal to the Eurodollar Rate plus the following
"Margin" then in effect as specified in the following table,
computed on the basis of the actual number of days elapsed
over a year of 360 days:
(b) From and after the due date of any Triple-A Loan
until such Triple-A Loan is paid in full, the Borrower shall pay
interest to Triple-A, payable on demand, on the outstanding
principal amount of such Triple-A Loan for each day until paid in
full at a per annum rate equal to two percent (2%) plus the
otherwise applicable rate under Section 2.06(a) for such Triple-A
Loan for such day.
SECTION 2.07. Voluntary and Mandatory Prepayment of
Triple-A Loans. (a) The Borrower shall have the right on any
Business Day and from time to time to prepay any Triple-A Loans,
in whole or in part, upon at least two Business Days' written
notice to the Administrative Agent, which notice shall specify
the proposed prepayment date and the amount of such prepayment,
provided that (i) any partial prepayment shall be equal to an
integral multiple of $100,000; (ii) the Borrower shall, in
connection with any such prepayment, indemnify Triple-A and hold
Triple-A harmless from any funding loss pursuant to the terms of
Section 2.08, and (iii) any such voluntary prepayment, to the
extent made with funds on deposit in the Collection Account,
shall be made subject to the provisions of Section 7.06. If any
such notice is given, the amount specified in such notice shall
be presumed correct absent manifest error and shall be due and
payable on the date specified therein. Each notice of prepayment
shall be irrevocable and binding on the Borrower.
(b) On each Interest Payment Date, the Borrower shall
be obligated to make principal repayments of the Triple-A Loans
in an amount equal to the Borrowing Base Shortfall, if any, then
in effect.
To the extent any such repayments are made with funds
on deposit in the Collection Account, such repayments shall be
subject to the provisions of Section 7.06.
(c) On each Business Day from and after the
Termination Date, the Borrower shall be obligated to make
principal repayments of the Triple-A Loans in an amount equal to
the lesser of (i) the aggregate amount of funds remaining on
deposit in the Collection Account on such day (other than any
funds retained in the Collection Account in respect of Carrying
Costs then accrued and unpaid to the extent required under
Section 7.06(d)) after giving effect to the required applications
of such funds pursuant to clauses (i) through (iii) of Section
7.06(d), and (ii) the then outstanding principal balance of the
Triple-A Loans.
(d) In the event of any prepayment or repayment of a
Triple-A Loan or any portion thereof on any date other than the
last day of the Interest Period applicable thereto, the Borrower
shall indemnify Triple-A and hold Triple-A harmless from any
funding loss (in an amount equal to the amount of interest
Triple-A would have received but for such prepayment through the
last day of the relevant Interest Period less the interest earned
on investing such funds) and expense which Triple-A may sustain
or incur as consequence of such prepayment in accordance with
Section 2.08.
SECTION 2.08. Compensation. The Borrower shall
compensate Triple-A, upon its written request, for all losses,
expenses and liabilities, including, without limitation, any
indemnification payments owed by Triple-A pursuant to the
Liquidity Agreement, on account of any liquidation or
reemployment of deposits or other funds acquired by such party to
make, fund or maintain a Triple-A Loan hereunder, (i) if for any
reason the funding of any Triple-A Loan does not occur on a date
specified therefor in the Notice of Borrowing; (ii) if for any
reason any payment, prepayment or conversion of principal of any
Triple-A Loan occurs on a date which is not the last day of the
Interest Period for such Triple-A Loan or (iii) as a consequence
of any required prepayment of any Triple-A Loan or required
conversion of any Eurodollar Rate Advance prior to the last day
of the Interest Period for the relevant Triple-A Loan. Any
request for compensation under this Section 2.08 shall be
accompanied by a copy of a statement from Triple-A or the
Administrative Agent on its behalf setting forth in reasonable
detail the basis for requesting compensation and the
determination of the amount thereof in such statement shall be
conclusive and binding for all purposes, absent manifest error.
SECTION 2.09. Increased Costs, Capital Adequacy.
(a) If, after the date hereof due to either (i) the
introduction of or any change in or to the interpretation of any
law or regulation by the governmental authority that promulgated
or administers compliance with such law or regulation (other than
laws or regulations with respect to income taxes or any change by
way of imposition or increase of reserve requirements included in
the Eurodollar Reserve Percentage) or (ii) the compliance with
any guideline or request from any central bank or other fiscal,
monetary or governmental authority, rating agency or similar
agency (whether or not having the force of law), and taking into
account the obligations of the Liquidity Banks under the
Liquidity Agreement, the obligations of CapMAC under the Surety
Bonds and/or the Insurance Agreement and otherwise in connection
with Triple-A's asset-supported financing business, any reserve
or deposit or similar requirement shall be imposed, modified or
deemed applicable or, any basis of taxation shall be changed or
any other condition shall be imposed, and there shall be any
increase in the cost to Triple-A (either directly or indirectly
through any increase in the costs to the Liquidity Banks or
CapMAC) of (i) making, funding, or maintaining Triple-A Loans or
in the cost to Triple-A of agreeing to make, fund, or maintain
Triple-A Loans (including the reduction of any sum received or
amount of principal or interest receivable under the Equity
Advances), or of (ii) issuing, or making, funding or maintaining
any payments under, the Surety Bonds or the Insurance Agreement,
then, in any such case, the Borrower shall from time to time,
upon demand by Triple-A or CapMAC (as the case may be), by the
submission of the certificate described below, pay to Triple-A or
CapMAC (as the case may be), additional amounts sufficient to
compensate Triple-A or CapMAC (as the case may be), for such
increased cost. A certificate setting forth in reasonable detail
the amount of such increased cost submitted to the Borrower by
Triple-A or CapMAC (as the case may be), or the Administrative
Agent on behalf of Triple-A shall be conclusive and binding for
all purposes, absent manifest error.
(b) If any of Triple-A, CapMAC, or any Liquidity Bank
determines that compliance with any law or regulation or any
guideline or request or any written interpretation from any
central bank or other fiscal, monetary or governmental authority,
rating agency or similar agency (whether or not having the force
of law) which is introduced, implemented or received by Triple-A,
CapMAC or such Liquidity Bank after the date hereof, affects or
would affect capital adequacy or the amount of capital required
or expected to be maintained by Triple-A, CapMAC or such
Liquidity Bank or any corporation controlling Triple-A, CapMAC or
such Liquidity Bank and that the amount of such capital is
increased by or based upon the Triple-A Loans or the existence of
this Credit Agreement, the Surety Bonds or the Insurance
Agreement or upon the Liquidity Advances or such Liquidity Bank's
commitment to lend under the Liquidity Agreement and other
commitments of that type, or has or would have the effect of
reducing such Person's rate of return on capital, then, upon
demand by Triple-A, the Administrative Agent on its behalf, or
CapMAC (as the case may be), by the submission of the certificate
described below, the Borrower shall pay to Triple-A or CapMAC (as
the case may be), from time to time as specified by Triple-A or
CapMAC (as the case may be), additional amounts sufficient to
compensate Triple-A, the relevant Liquidity Bank or CapMAC (as
the case may be), in the light of such circumstances, to the
extent that Triple-A or CapMAC (as the case may be) reasonably
determines such increase in capital to be allocable to the
Triple-A Loans or the existence of this Credit Agreement, the
Surety Bonds or the Insurance Agreement or any such Liquidity
Bank's commitment to lend under the Liquidity Agreement and other
commitments of that type, or to the extent that Triple-A owes
compensation to CapMAC or to a Liquidity Bank in respect of or on
account of such events. A certificate setting forth in
reasonable detail such amounts submitted to the Borrower by
Triple-A or the Administrative Agent on its behalf, or (as the
case may be), shall be conclusive and binding for all purposes,
absent manifest error.
SECTION 2.10. Taxes. (a) All payments made by the
Borrower under this Credit Agreement, the Insurance Agreement and
the Triple-A Note shall be made free and clear of, and without
deduction or withholding for or on account of, any present or
future taxes, levies, imposts, duties, charges, fees, deductions
or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any governmental authority having taxing
authority, excluding net income taxes and franchise taxes
(imposed in lieu of income taxes) imposed on Triple-A or CapMAC
as a result of any present or former connection between the
jurisdiction of the government or taxing authority imposing such
tax or any political subdivision or taxing authority thereof or
therein and Triple-A or CapMAC (excluding a connection arising
solely from Triple-A or CapMAC having executed, delivered or
performed its obligations or received a payment under, or
enforced, this Credit Agreement, the Triple-A Note or any other
Facility Document to which Triple-A or CapMAC is a party) (all
such non-excluded taxes, levies, imposts, duties, charges, fees,
deductions and withholdings being hereinafter called "Taxes").
If any Taxes are required to be withheld from any amounts payable
to or under the Triple-A Note, (i) the sum payable shall be
increased as may be necessary so that, after making all required
deductions (including deductions applicable to additional sums
payable under this Section 2.10), Triple-A or CapMAC receives an
amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such
deductions, and (iii) the Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, the Borrower agrees to pay any
present or future stamp or documentary taxes or any other excise
or property taxes, charges, or similar levies that arise from any
payment made hereunder or from the execution, delivery or regis-
tration of, or otherwise with respect to, this Credit Agreement
or the Insurance Agreement (hereinafter "Other Taxes").
(c) The Borrower will indemnify Triple-A or CapMAC for
the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction
on amounts payable under this Section 2.10) paid by Triple-A or
CapMAC and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. Whenever
any Taxes are payable by the Borrower, as promptly as possible
thereafter the Borrower shall send to each of Triple-A and CapMAC
a certified copy of an original official receipt received by the
Borrower showing payment thereof. If the Borrower fails to pay
any Taxes when due to the appropriate taxing authority or fails
to remit to Triple-A the required receipts or other required
documentary evidence, the Borrower shall indemnify each of
Triple-A and CapMAC for any incremental Taxes, interest or
penalties that Triple-A and/or CapMAC is legally required to pay
as a result of any such failure.
(d) If, in connection with an agreement or other
document providing liquidity support, credit enhancement or other
similar support to Triple-A, its Affiliates, successors or
assigns (each, an "Affected Person") (whether directly or through
a participation) in connection with this Credit Agreement or the
funding or maintenance of purchases of Acquired Assets hereunder,
such Affected Person is required to compensate a bank or other
financial institution in respect of taxes under circumstances
similar to those described in this Section 2.10, then upon demand
by such Affected Person, the Borrower shall pay to such Affected
Person such additional amount or amounts as may be necessary to
pay such provider of liquidity support, credit enhancement or
other similar support the amounts due or to reimburse such
Affected Person for any amounts paid by it.
(e) The agreements in this Section 2.10 shall survive
the termination of this Credit Agreement, the Insurance Agreement
and the payment of the Triple-A Note.
SECTION 2.11. Fees. In further consideration of the
Triple-A Loans to be made hereunder, the Borrower agrees to pay
to CapMAC and Triple-A, all fees specified in the Fee Letter,
which fees will be due and payable at the times and in the manner
set forth in the Fee Letter.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to this Agreement
and the Initial Borrowing. The effectiveness of this Agreement
and the agreement of Triple-A to make the initial Triple-A Loan
hereunder is subject to satisfaction of each of the following
conditions precedent:
(a) Each of the Administrative Agent, the Collateral
Agent and Triple-A shall have received all of the documents,
covenants, authorizations, agreements and instruments described
on the List of Closing Documents attached as Exhibit I hereto,
each in form and substance satisfactory to the Administrative
Agent, and in each case where applicable (x) duly executed by
each of the parties thereto, (y) to the extent required in
Exhibit I, duly filed with the appropriate filing officer or
other governmental authority of the listed jurisdiction, as
evidenced by an appropriate acknowledgment evidencing that such
filing is of record, and (z) dated and/or certified (as appli-
cable) as of a date reasonably acceptable to the Administrative
Agent;
(b) All fees and expenses due and owing under the
Facility Documents (including, without limitation, all fees and
expenses payable under the Fee Letter entered into in connection
with this Credit Agreement) shall have been paid;
(c) Each of the Collateral Agent, the Administrative
Agent, Triple-A and the Surety shall have received such other
approvals, documents or opinions as it may reasonably request;
and
(d) Each of S&P and Xxxxx'x shall have delivered
written confirmation to the Administrative Agent to the effect
that the consummation of this Credit Agreement will not result in
the reduction or withdrawal of their respective ratings of the
Commercial Paper Notes.
SECTION 3.02. Conditions Precedent to Each Borrowing.
The agreement of Triple-A to make any Triple-A Loan hereunder
(including, without limitation, the initial Triple-A Loan) shall
be subject to satisfaction of each of the following conditions
precedent:
(a) Each of the Administrative Agent, the Collateral
Agent and Triple-A shall have received:
(i) a Settlement Report dated as of the most
recent Settlement Date;
(ii) a timely Notice of Borrowing, appropriately
filled-out by the Borrower;
(iii) a Servicer's Daily Report, appropriately
filled-out by the Servicer as of the Borrowing Date
(after giving effect to such Borrowing and to the
application of the proceeds therefrom); and
(iv) such other approvals or documents as the
Administrative Agent may reasonably request in
connection with the contemplated Borrowing;
(b) on the Borrowing Date of such Borrowing, before and
after giving effect to such Borrowing, and to the application of
the proceeds from such Borrowing, the following statements shall
be true (and each of the giving of the applicable Notice of
Borrowing and the acceptance by the Borrower of the proceeds of
such Borrowing shall constitute a representation and warranty by
the Borrower that on the Borrowing Date of such Borrowing, before
and after giving effect thereto and to the application of the
proceeds therefrom, such statements are true):
(i) the representations and warranties contained in
Article IV and all representations and warranties of the
Seller in the Purchase and Contribution Agreement are true
and accurate as of such Borrowing Date in all material
respects with the same force and effect as though such
representations and warranties had been made as of such
date;
(ii) no event has occurred and is continuing, or
would result from such Borrowing, which constitutes an
Event of Default, Unmatured Event of Default, Servicer
Default or Unmatured Servicer Default, and there is no
Termination Date currently in effect;
(iii) there exists no Borrowing Base Shortfall;
and
(iv) (A) the proceeds of such Triple-A Loan shall be
used (1) to acquire Advances or (2) to otherwise fund costs
and expenses to be paid under the terms of the Facility
Documents in connection with the transactions contemplated
by the Purchase and Contribution Agreement, and (B) all
conditions to such funding or acquisition under the Purchase
and Contribution Agreement on such date have been satisfied;
(c) No event or circumstance having a Material Adverse
Effect shall have occurred; and
(d) The aggregate commitments under the Liquidity
Agreement shall equal or exceed the outstanding principal balance
of all Triple-A Loans (after giving effect to the contemplated
Borrowing).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
Borrower. The Borrower represents and warrants to each of
Triple-A, the Collateral Agent, the Administrative Agent and the
Surety that:
(a) Due Incorporation and Good Standing. The Borrower
is a corporation duly organized, validly existing and in good
standing under the laws of the state of Delaware, and has full
corporate power, authority and legal right to own its properties
and conduct its business as such properties are presently owned
and such business is presently conducted, and to execute, deliver
and perform its obligations under each of the Facility Documents
to which it is a party. The Borrower is duly qualified to do
business and is in good standing as a foreign corporation, and
has obtained all necessary licenses and approvals in each
jurisdiction in which failure to qualify or to obtain such
licenses and approvals would render any Acquired Advance or
related Loan Document unenforceable by the Borrower or would
otherwise have a Material Adverse Effect.
(b) Due Authorization and No Conflict. The execution,
delivery and performance by the Borrower of each of the Facility
Documents to which it is a party, and the consummation of each of
the transactions contemplated hereby and thereby, including the
acquisition of the Advances under the Purchase and Contribution
Agreement and the Grants contemplated hereunder, have in all
cases been duly authorized by the Borrower by all necessary
corporate action, and do not contravene (i) the Borrower's
charter or by-laws, (ii) any law, rule or regulation applicable
to the Borrower, (iii) any contractual restriction contained in
any indenture, loan or credit agreement, lease, mortgage, deed of
trust, security agreement, bond, note, or other agreement or
instrument binding on or affecting the Borrower or its property
or (iv) any order, writ, judgment, award, injunction or decree
binding on or affecting the Borrower or its property (except
where such contravention would not have a Material Adverse
Effect), and do not, except as otherwise expressly contemplated
hereunder and except with respect to Permitted Encumbrances on
Related Security acquired by the Borrower, result in or require
the creation of any Lien upon or with respect to any of its
properties; and no transaction contemplated hereby requires
compliance with any bulk sales act or similar law.
(c) Governmental and Other Consents. All approvals,
authorizations, consents, orders or other actions of, and all
registration, qualification, designation, declaration, notice to
or filing with, any Person or of any governmental body or
official required in connection with the execution and delivery
of any of the Facility Documents to which the Borrower is a
party, the consummation of the transactions contemplated hereby
or thereby, the performance of and the compliance with the terms
hereof or thereof, have been obtained, except where the failure
so to do would not have a Material Adverse Effect.
(d) Enforceability of Facility Documents. Each of the
Facility Documents to which the Borrower is a party have been
duly and validly executed and delivered by the Borrower and
constitute the legal, valid and binding obligation of the
Borrower, enforceable in accordance with their respective terms,
except as enforceability may be subject to or limited by Debtor
Relief Laws or by general principles of equity (whether
considered in a suit at law or in equity).
(e) No Litigation. There are no proceedings or
investigations pending or, to the best knowledge of the Borrower,
threatened against the Borrower before any court, regulatory
body, administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Credit
Agreement or any of the other Facility Documents, (ii) seeking to
prevent the consummation of any of the transactions contemplated
by this Credit Agreement or any of the other Facility Documents,
(iii) seeking any determination or ruling that would adversely
affect the performance by the Borrower of its obligations under
this Credit Agreement or any of the other Facility Documents,
(iv) seeking any determination or ruling that would adversely
affect the validity or enforceability of this Credit Agreement or
any of the other Facility Documents, or (v) seeking any
determination or ruling that would, if adversely determined, be
reasonably likely to have a Materially Adverse Affect.
(f) Use of Proceeds. All proceeds of any Triple-A
Loan shall be used by the Borrower exclusively to fund a Purchase
of Advances from the Seller under the Purchase and Contribution
Agreement, or to otherwise fund costs and expenses permitted to
be paid under the terms of the Facility Documents in connection
with the transactions contemplated to take place hereunder.
(g) Perfection of Security Interests in Collateral.
(i) Upon the making of each Triple-A Loan, the
Collateral Agent has a legal, valid, and enforceable
Lien upon all the Collateral and a first priority
perfected security interest in all Collateral in which
a security interest can be created under Article 9 of
the UCC, as security for the repayment of the
Obligations, which Lien upon and security interest in
the Collateral is free and clear of all Liens (other
than with respect to any Related Security, any
Permitted Encumbrances);
(ii) The Borrower has good and valid title to
(and, to the extent that Article 9 of the UCC is
applicable to the Borrower's acquisition thereof under
the Purchase and Contribution Agreement, a valid and
perfected security interest in) the Collateral, which
interest in and title to the Collateral is free and
clear of all Liens (other than the Primary Lien and any
Permitted Encumbrances); and
(iii) No effective financing statement or other
instrument similar in effect that covers all or part of any
Collateral or any interest therein is on file in any
recording office except such as may be filed (A) in favor of
the Purchaser pursuant to the Purchase and Contribution
Agreement, and (B) in favor of the Collateral Agent, for the
benefit of the Secured Creditors, in accordance with this
Credit Agreement or otherwise filed by or at the direction
of the Collateral Agent.
(h) Accuracy of Information. All certificates,
reports, financial statements and similar writings furnished by
or on behalf of the Borrower to Triple-A, the Collateral Agent,
or the Administrative Agent at any time pursuant to any
requirement of, or in response to any request of any such party
under this Credit Agreement or any other Facility Document or any
transaction contemplated hereby or thereby, have been, and all
such certificates, reports, financial statements and similar
writings hereafter furnished by the Borrower to such parties will
be, true and accurate in every respect material to the transac-
tions contemplated hereby on the date as of which any such
certificate, report, financial statement or similar writing was
or will be delivered, and shall not omit to state any material
facts or any facts necessary to make the statements contained
therein not materially misleading.
(i) Governmental Regulations. The Borrower is not (1)
an "investment company" or a company controlled by an "investment
company" registered or required to be registered under or the
Investment Company Act of 1940, as amended, (2) a "public utility
company" or a "holding company," a "subsidiary company" or an
"affiliate" of any public utility company within the meaning of
Section 2(a)(5), 2(a)(7), 2(a)(8) or 2(a)(11) of the Public
Utility Holding Company Act of 1935, as amended, or (3) otherwise
subject to any other federal or state statute or regulation
limiting its ability to incur or pay indebtedness.
(j) Margin Regulations. The Borrower is not engaged,
principally or as one of its important activities, in the
business of extending credit for the purpose of "purchasing" or
"carrying" any "margin stock" (as each of the quoted terms is
defined or used in any of Regulations G, T, U or X of the Board
of Governors of the Federal Reserve System, as in effect from
time to time). No part of the proceeds of any of the Triple-A
Loans has been used for so purchasing or carrying margin stock or
for any purpose which violates, or which would be inconsistent
with, the provisions of any of Regulations G, T, U or X of the
Board of Governors of the Federal Reserve System, as in effect
from time to time.
(k) Location of Chief Executive Office and Records.
The principal place of business and chief executive office of the
Borrower is located at the address set forth below its name on
the signature pages hereof, and the offices where the Borrower's
Records are maintained are listed on signature pages hereto, and
the Borrower does not operate its business or maintain the
Records at any other location (provided that, at any time after
the Effective Date, upon 30 days' prior written notice to the
Collateral Agent, the Borrower may relocate its principal place
of business and chief executive office, and/or the office where
the Borrower maintains all of its Records, to such other
locations within the United States where all action required by
Section 7.04 shall have been taken and completed).
(l) Lock-Box Accounts. The account numbers of all
Lock-Box Accounts, together with the names, addresses, ABA
numbers and names of contact persons of all the Lock-Box Banks
maintaining such Lock-Box Accounts are specified in Schedule
4.01(l). From and after the Effective Date, none of Ag Services
or the Borrower shall have any rights, title and/or interest
(except for Ag Services' right as Servicer) in or to any of the
Lock-Box Accounts and maintain no lock-box accounts in their own
names for the collection of payments in respect of any Advances.
The Borrower has no other lock-box accounts for the collection of
the Advances except for the Lock-Box Accounts.
(m) No Trade Names. Since the date of its formation,
the Borrower has not (i) been known by any legal name other than
its corporate name as of the date hereof, (ii) been the subject
of any merger or other corporate reorganization that resulted in
a change of name, identity or corporate structure, or (iii) used
any trade names, fictitious names, assumed names or "doing
business as" names other than its actual corporate name.
(n) Separate Identity. The Borrower is operated as an
entity separate from Ag Services and Ag Services' other
Affiliates and:
(i) has its own board of directors;
(ii) has at least two independent directors, each
of which (A) is reasonably acceptable to Triple-A and
not a direct, indirect or beneficial stockholder,
officer, director, employee, affiliate, associate,
customer or supplier of any of Ag Services or any of Ag
Services' other Affiliates or relative of any thereof,
nor a trustee in bankruptcy for any thereof and (B) is
an individual with at least three years' prior
experience in transactions involving the securitization
of financial assets, and prior experience as an
independent director for a corporation (other than the
Borrower) whose charter documents require the unanimous
consent of all independent directors before such
corporation could file a bankruptcy proceeding or
consent to the institution of bankruptcy proceedings
against it;
(iii) maintains its assets in a manner which
facilitates their identification and segregation from
those of its Affiliates, has a separate telephone
number from that of Ag Services and any of Ag Services'
other Affiliates and has separately leased office space
for the maintenance of its Records;
(iv) has all office furniture, fixtures and
equipment necessary to operate its business and such
furniture, fixtures, and equipment are either owned by
the Borrower or leased pursuant to written leases;
(v) conducts all intercompany transactions with
each of Ag Services and Ag Services' other Affiliates
on terms which the Borrower reasonably believes to be
on an arm's-length basis;
(vi) has not guaranteed any obligation of any of
Ag Services or any of Ag Services' other Affiliates,
nor has it had any of its obligations guaranteed by any
such entities and has not held itself out as
responsible for debts of any such entity or for the
decisions or actions with respect to the business and
affairs of any such entity;
(vii) has not permitted the commingling or pooling
of its funds or other assets with the assets of any of
Ag Services or any of Ag Services' other Affiliates
(other than in respect of items of payment which are
not material in the aggregate and which have been
mistakenly forwarded by an Obligor directly to Ag
Services or any of Ag Services' other Affiliates);
(viii) has separate deposit and other bank
accounts to which neither Ag Services (except in its
capacity as Servicer) nor any of Ag Services' other
Affiliates has any access and does not at any time pool
any of its funds with those of Ag Services or any of Ag
Services' other Affiliates;
(ix) maintains financial records which are
separate from those of Ag Services or any of Ag
Services' other Affiliates;
(x) compensates all employees, consultants and
agents, or reimburses Ag Services from the Borrower's
own funds, for services provided to the Borrower by
such employees, consultants and agents other than the
services covered under the terms of the Administrative
Services Agreement;
(xi) has agreed with Ag Services pursuant to the
terms of the Administrative Services Agreement to
allocate among themselves shared corporate operating
services and expenses which are not reflected in the
Servicing Fee (including, without limitation, the
services of shared employees, consultants and agents,
and reasonable legal and auditing expenses) on the
basis of actual use or the value of services rendered,
and otherwise on a basis reasonably related to actual
use or the value of services rendered;
(xii) pays for its own account any incidental
administrative costs and expenses not covered under the
terms of the Administrative Services Agreement;
(xiii) conducts all of its business (whether in
writing or orally) solely in its own name;
(xiv) is not, except with respect to insurance
policies concerning the Acquired Assets and/or the
other Collateral and covering any liability which may
be incurred in connection with ownership of any
Acquired Assets, directly or indirectly, named as a
direct or contingent beneficiary or loss payee on any
insurance policy covering the property of Ag Services
or any of Ag Services' other Affiliates and has entered
into no agreement to be named as such a beneficiary or
payee;
(xv) acknowledges that Triple-A, the
Administrative Agent, the Collateral Agent, the Surety,
the Liquidity Agent and the Liquidity Banks are
entering into the transactions contemplated by this
Credit Agreement and the other Facility Documents in
reliance on the Borrower's identity as a separate legal
entity from Ag Services and each of Ag Services' other
Affiliates; and
(xvi) practices and adheres to corporate formali-
ties such as complying with its By-laws and corporate
resolutions and the holding of regularly scheduled
board of directors meetings.
(o) Subsidiaries. The Borrower has no Subsidiaries
and does not own or hold, directly or indirectly, any capital
stock or equity security of, or any equity interest in, any
Person.
(p) Facility Documents. The Purchase and Contribution
Agreement is the only agreement pursuant to which the Borrower
purchases or otherwise acquires Advances or otherwise acquires
any rights under any Loan Documents. The Borrower has furnished
to Triple-A true, correct and complete copies of each Facility
Document to which the Borrower is a party, each of which is in
full force and effect. Neither the Borrower nor any Affiliate
thereof is in default of any of its obligations thereunder in any
material respect. Upon each Purchase pursuant to the Purchase
and Contribution Agreement the Borrower shall be the lawful owner
of, and have good title to, each Advance so purchased or
otherwise acquired and all of the Collateral relating thereto,
free and clear of any Liens (other than the Primary Lien and any
Permitted Encumbrances). All such Advances and other Collateral
are purchased or otherwise acquired without recourse to the
Seller except as described in the Purchase and Contribution
Agreement. The Purchases by the Borrower under the Purchase and
Contribution Agreement constitute valid and true sales and
transfers for consideration (and not merely a pledge of assets
for security purposes), enforceable against creditors of Ag
Services and no Advances or related Collateral, whether purchased
from or contributed by Ag Services, shall constitute property of
Ag Services.
(q) Business. Since its incorporation, the Borrower
has conducted no business other than the execution, delivery and
performance of the Facility Documents contemplated hereby, the
purchase of Advances thereunder and such other activities as are
incidental to the foregoing. The Borrower has incurred no Debt
except that expressly incurred hereunder and under the other
Facility Documents.
(r) Ownership of the Borrower. One hundred percent
(100%) of the outstanding capital stock of the Borrower is
directly owned (both beneficially and of record) by Ag Services.
Such stock is validly issued, fully paid and nonassessable and
there are no options, warrants or other rights to acquire capital
stock from the Borrower.
(s) Taxes. The Borrower has filed or caused to be
filed all Federal, state and local tax returns which are required
to be filed by it, and has paid or caused to be paid all taxes
shown to be due and payable on such returns or on any assessments
received by it, other than any taxes or assessments, the validity
of which are being contested in good faith by appropriate
proceedings and with respect to which the Borrower has set aside
adequate reserves on its books in accordance with GAAP and which
proceedings have not given rise to any Lien.
(t) Solvency. The Borrower, both prior to and after
giving effect to each Borrowing, (i) is not "insolvent" (as such
term is defined in 101(32)(A) of the Bankruptcy Code); (ii) is
able to pay its debts as they become due; and (iii) does not have
unreasonably small capital for the business in which it is
engaged or for any business or transaction in which it is about
to engage. All Purchases and contributions under the Purchase
and Contribution Agreement constitute true transfers for
reasonably equivalent value given to Ag Services, and shall not
be voidable under any preference or fraudulent conveyance laws.
(u) Reporting and Accounting Treatment. For reporting
and accounting purposes, and in its books of account and records,
the Borrower will treat each Purchase of any Advance pursuant to
the Purchase and Contribution Agreement as a purchase of, or
absolute assignment of, Ag Services' full right, title and
ownership interest in each such Advance, and the Borrower has not
in any other manner accounted for or treated the transactions.
All Acquired Advances and related Collateral shall be at all
times represented in the financial statements and records of the
Borrower as accounts receivable or amounts owed from Obligors in
accordance with GAAP consistently applied by the Seller.
(v) ERISA. There has been no (i) occurrence or
expected occurrence of any Reportable Event with respect to any
Plan of the Borrower or any ERISA Affiliate, or any withdrawal
from, or the termination, Reorganization or Plan Insolvency of
any Multiemployer Plan, or (ii) institution of proceedings or the
taking of any other action by PBGC or the Borrower or any ERISA
Affiliates or any such Multiemployer Plan with respect to the
withdrawal from, or the termination, Reorganization or Plan
Insolvency of, any such Plan.
(w) No Material Adverse Change. The financial
statements delivered to the Borrower by Ag Services under the
Purchase and Contribution Agreement fairly present the assets,
liabilities and financial condition of Ag Services and its
Subsidiaries as of August 31, 1996 and February 29, 1996 and
fairly present the results of operations of Ag Services and its
Subsidiaries for the fiscal year or six-month period, as
applicable, then ended and the other periods therein referred to,
all in accordance with GAAP consistently applied for such periods
(subject to normal year-end adjustments in the case of the
February 29, 1996 statements), and, since February 29, 1996,
there has been no material adverse change in the financial
condition, operations and/or business of Ag Services nor any
other event or circumstance which has had a Material Adverse
Effect.
(x) Insurance. The Borrower maintains insurance as is
reasonably customary and advisable for companies in the business
of owning Advances and the related Collateral and has caused Ag
Services to name it and the Collateral Agent as loss payee on all
insurance policies maintained by Ag Services which relate to or
otherwise provide casualty and liability coverage with respect to
Acquired Assets and any Related Security relating thereto.
(y) Credit and Collection Policy. The copy of the
Credit and Collection Policy delivered pursuant to Section 5.01
is a true and complete copy thereof.
(z) Environmental. To the best of the Borrower's
knowledge,
(i) There have been no past (other than as disclosed
to the Purchaser, the Administrative Agent and the
Collateral Agent prior to the Effective Date), and there are
no pending or threatened
(A) claims, complaints, notices or requests for
information received by the Borrower or any of its
Affiliates with respect to any alleged violation of any
Environmental Law in relation to any Related Security or any
real property owned or leased by the Borrower or any of its
Affiliates, or
(B) claims, complaints, notices or requests for
information to the Borrower or any of its Affiliates
regarding potential liability under any Environmental Law in
relation to any Related Security or any real property owned
or leased by the Borrower or any of its Affiliates;
(ii) there have been no releases (as defined in
CERCLA) of Hazardous Materials at, on or under any property
constituting Related Security or any real property owned or
leased by the Borrower or any of its Affiliates;
(iii) the Borrower and its Affiliates have been issued
and are in material compliance with all permits,
certificates, approvals, licenses and other authorizations
relating to environmental matters and necessary or desirable
in relation to any real property owned or leased by the
Borrower or any of its Affiliates;
(iv) there are no underground storage tanks, active or
abandoned, on or under any real property owned or leased by
the Borrower or any of its Affiliates that contain or have
contained any Hazardous Material;
(v) no conditions exist, at, on or under any real
property owned or leased by the Borrower or any of its
Affiliates which, with the passage of time, or the giving of
notice or both, would give rise to liability under any
Environmental Law,
The representations and warranties of the Borrower set
forth in this Section 4.01 shall be deemed to be remade, without
further act by any Person, on and as of the Effective Date and
each Borrowing Date. The representations and warranties set
forth in this Section 4.01 shall survive the Grant of the
Collateral by the Borrower to the Collateral Agent.
SECTION 4.02. Representations and Warranties Regarding
the Collateral. The Borrower represents and warrants to each of
Triple-A, the Collateral Agent, the Administrative Agent and the
Surety, as to each Acquired Advance, the related Loan Documents:
(a) Eligibility. Unless otherwise represented in the
Daily Servicer's Report as of the applicable date of acquisition
or creation, such Advance is, as of the date it is acquired or
otherwise created, and on each Business Day thereafter unless
otherwise reflected in a Servicer's Daily Report or Settlement
Report delivered to the Collateral Agent, an Eligible Advance.
(b) Origination. Each Eligible Advance was originated
by Ag Services in the ordinary course of its business and was
purchased or otherwise acquired by the Borrower from Ag Services
pursuant to the terms of the Purchase and Contribution Agreement,
in the ordinary course of their respective businesses in a
transaction constituting a "true sale".
(c) Lawful Assignment. No Eligible Advance nor any
related Loan Document was originated in nor is subject to the
laws of any jurisdiction the laws of which would make unlawful
the transfer of such Eligible Advance or Loan Documents under the
Purchase and Contribution Agreement or the Grant of any interest
therein under this Credit Agreement.
(d) Compliance with Law. The requirements of any
federal, state or local law (including, without limitation,
usury, truth in lending and equal credit opportunity laws)
applicable to each Eligible Advance and Loan Document have been
complied with.
(e) Loan Documents in Force. The Loan Documents in
respect of each Eligible Advance are in full force and effect and
have not been satisfied in whole or in part, or rescinded.
(f) Form. The Loan Documents in respect of each
Eligible Advance were executed in substantially the form of Loan
Documents attached hereto as Exhibit C (as such Exhibit C may be
amended from time to time with the consdvances arising under such
Loan Documents.
All of the representations and warranties of the
Borrower set forth in this Section 4.02 shall be deemed to be
made on the Effective Date and on each Borrowing Date.
ARTICLE V
GENERAL COVENANTS
SECTION 5.01. Affirmative Covenants of the Borrower.
From the Effective Date until the later of the Termination Date
or the Collection Date, the Borrower shall, unless the Collateral
Agent shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply in all material
respects with all applicable laws, rules, regulations and orders
with respect to it, its business and properties, and all Loan
Documents and Facility Documents to which it is a party.
(b) Preservation of Corporate Existence. Preserve and
maintain its corporate existence, rights, franchises and privil-
eges in the jurisdiction of its incorporation, and qualify and
remain qualified in good standing as a foreign corporation, and
maintain all necessary licenses and approvals, in each
jurisdiction, except where the failure to preserve and maintain
such existence, rights, franchises, privileges, qualifications,
licenses and approvals would not have a Material Adverse Effect.
(c) Audits. At any time and from time to time during
regular business hours, permit the Collateral Agent, or its
agents or representatives, access
(i) to the offices and properties of the Borrower
(including, without limitation, any repository used by the
Borrower, or the Servicer on the Borrower's behalf, to store
the computer tapes or other computer records constituting
the Servicer's Daily Report), in order to examine and make
copies of and abstracts from all books, correspondence and
Records of the Borrower as appropriate to verify the
Borrower's compliance with this Credit Agreement, the
Purchase and Contribution Agreement, any other Facility
Documents to which it is a party and any other agreement
contemplated hereby or thereby, and the Collateral Agent
and/or its agent and their representatives may examine and
audit the same, and make photocopies and computer tape or
other computer replicas thereof (as appropriate), and
Borrower agrees to render to the Collateral Agent and/or its
agent and representatives, at Borrower's cost and expense,
such clerical and other assistance as may be reasonably
requested with regard thereto; and
(ii) to the officers or employees of the Borrower in
order to discuss matters relating to the Collateral or the
Borrower's performance hereunder with any of the officers or
employees of the Borrower having knowledge of such matters.
The number and frequency of any such audits shall be limited to
such number and frequency as shall be reasonable in the exercise
of the Collateral Agent's reasonable commercial judgment. Each
such audit shall be at the sole expense of the Borrower (subject
to the Borrower's right under the Purchase and Contribution
Agreement to recover such expenses from the Seller). The
Collateral Agent and its agents and representatives shall also
have the right to discuss the Borrower's affairs with the
officers and employees of the Borrower and Borrower's independent
accountants and to verify under appropriate procedures the
validity, amount, quality, quantity, value and condition of, or
any other matter relating to, the Collateral.
(d) Keeping of Records and Books of Account. Maintain
and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing the
Acquired Advances, Loan Documents and other Related Security in
the event of the destruction or loss of the originals thereof)
and keep and maintain, all documents, books, records and other
information reasonably necessary or advisable for the collection
of all such Advances, Loan Documents and other Related Security
(including, without limitation, records adequate to permit the
daily identification of all Collections with respect to, and
adjustments of amounts payable under, each Advance).
(e) Performance and Compliance with Advances and Loan
Documents. At its expense, timely and fully perform and comply,
in all material respects, with all provisions, covenants and
other promises required to be observed by it under the Loan
Documents.
(f) Credit and Collection Policy. Comply in all
material respects with the Credit and Collection Policy in regard
to each Loan Document and Advance and the related Collateral.
(g) Collections. From and after the occurrence of a
Termination Event, instruct all Obligors to send all Collections
directly to a Lock-Box Account in accordance with the procedures
described in Section 7.05. If the Borrower, the Servicer or Ag
Services shall receive any Collections in form suitable for
deposit, the Borrower shall hold, or shall cause the Servicer or
Ag Services (as the case may be) to hold, such Collections in
trust for the benefit of the Collateral Agent and deposit such
Collections into the Collection Account, or from and after the
occurrence of a Termination Event deposit such Collections into a
Lock-Box Account, in either case, for application in accordance
with Section 7.05 within two Business Days following receipt
thereof; provided that prior to the Termination Date, if the
Borrower, the Servicer or Ag Services receives any Collections
under any insurance policies relating to any Acquired Advance
and/or any Related Security, and Ag Services elects not to remit,
or requests the Borrower or the Servicer not to remit such
Collections to the Collection Account solely in an effort to
avoid prejudice to any dispute relating to the insurance claim by
the related Obligor, the Borrower shall not be deemed to be in
violation of this provision as a result of such failure if Ag
Services deposits the amount of such Collections to the
Collection Account upon the earlier of its receipt of a waiver
from the related insurance company or the date required pursuant
to Section 2.6 of the Purchase and Contribution Agreement. If the
amount of any Collection is in excess of the aggregate amount
owed by the related Obligor, the Borrower shall remit, or shall
cause the Servicer to remit such excess amount to the appropriate
party within seven days of receipt of such excess amount pursuant
to Section 7.06(c)(i) hereof.
(h) Compliance with ERISA. Comply in all material
respects with the provisions of ERISA, the IRC, and all other
applicable laws, and the regulations and interpretations
thereunder.
(i) Legal Opinion. On or before May 31st in each
calendar year commencing with 1997, the Borrower shall furnish to
the Collateral Agent an Opinion of Counsel stating that, in the
opinion of such counsel, such action has been taken with respect
to the execution, recording, filing, re-recording and refiling of
any financing statements, continuation statements or other
requisite documents as is necessary to maintain a perfected
security interest in the Collateral created under the Purchase
and Contribution Agreement or by this Credit Agreement (to the
extent that Article 9 of the UCC is applicable to the sale of
such Collateral under the Purchase and Contribution Agreement or
the creation under this Agreement of a security interest in such
Collateral) and reciting the details of such action or stating
that in the opinion of such counsel no such action is necessary
to maintain such Liens. Such Opinion of Counsel shall also
describe the recording, filing, rerecording and refiling of any
financing statements, continuation statements or other requisite
documents that will, in the opinion of such counsel, be required
to maintain any such perfected security interests until May 31st
in the following calendar year.
(j) No Release. The Borrower shall not take any
action and shall use its best efforts not to permit any action to
be taken by others that would release any Person from any of such
Person's covenants or obligations under any Loan Documents or
other document, instrument or agreement included in the
Collateral, or which would result in the amendment,
hypothecation, subordination, termination or discharge of, or
impair the validity or effectiveness of, any such Loan Document
or other document, instrument or agreement, except as expressly
provided in this Credit Agreement or such other instrument or
document.
(k) Custodian.
(i) Within five (5) Business Days after the
effective date of any documents, instruments and agreements
evidencing or otherwise relating to any Acquired Advance or
related Collateral received by any of the Borrower or Ag
Services, the Borrower shall deliver or cause to be
delivered directly to the Custodian for the benefit of the
Collateral Agent pursuant to the Custodial Agreement:
(a) the original Note relating to each such
Advance duly endorsed by the Seller (directly on
such Note or by means of an allonge to such Note)
in blank or in the name of the Borrower, with all
prior and intervening endorsements showing a
complete chain of endorsement to the Seller;
(b) the executed agricultural security agreement
duly executed by the Obligor, as debtor, granting a
security interest in favor of Ag Services, as secured
party, in the property of the Obligor securing the
Note;
(c) a copy of the related Assignment of Indemnity
duly executed by the Obligor, together with a Statement
of Insurance, substantially in the form included in
Exhibit C hereto, appropriately completed and duly
executed by an agent of the insurer;
(e) a copy of the related Assignment of Payment
(substantially in the form included in Exhibit C
hereto) applicable to each county in which Crops
constituting Related Security are located, duly
executed by the Obligor with respect to each Obligor
where such Assignment of Payment has been relied on as
collateral for the Note of such Obligor in determining
whether or not to extend the Loan to such Obligor
evidenced by such Note;
(f) copies of each financing statement filed with
the appropriate state or county office as necessary to
perfect the security interest (to the extent such
security interest can be perfected by filing a
financing statement) granted pursuant to the security
agreement described in clause (b) above;
(g) if received, warehouse receipts and other
documents (negotiable and non-negotiable), if any,
issued for storage of Crops which secure the Note; and
(h) executed originals or copies of the other Loan
Documents related to such Advances included in such
Purchase.
The Custodian shall hold, maintain and keep custody of all
such Notes, Loan Documents, Crop Insurance policies,
Assignments of Crop Insurance and other documentation for
the benefit of the Collateral Agent in a secure, fire proof
location at its storage facility, as set forth in the
Custodial Agreement.
(ii) The Custodian shall at all times maintain
control of the Notes, Loan Documents, Crop Insurance
policies, Assignments of Crop Insurance and other documents
described in clause (i) above (the "Primary Custodial
Documents") for the benefit of the Collateral Agent on
behalf of Triple-A and the Surety pursuant to the Custodial
Agreement. Each of Ag Services and the Borrower may access
the Primary Custodial Documents at the Custodian's location
only for the purposes and upon the terms and conditions set
forth herein and in the Custodial Agreement.
(iii) The Borrower shall at all times comply with
the terms of, and its obligations under, the Custodial
Agreement, and shall not enter into any modification,
amendment or supplement of or to, and shall not terminate,
the Custodial Agreement, without the Collateral Agent's
prior written consent.
(iv) The Borrower shall deliver, or cause the
Custodian to deliver, to the Servicer, the Administrative
Agent and the Collateral Agent, a notice from the Custodian
in substantially the form of Exhibit A to the Custodial
Agreement confirming that the Custodian has received the
Primary Loan Documents for each Acquired Advance within five
(5) Business Days after such Primary Loan Documents are
required to be delivered to the Custodian pursuant to
Section 5.01(k)(i) hereof.
(l) Separate Identity. Take all actions required to
maintain the Borrower's status as a separate legal entity.
Without limiting the foregoing, the Borrower shall:
(i) conduct all of its business, and make all communi-
cations to third parties (including all invoices (if any),
letters, checks and other instruments) solely in its own
name (and not as a division of any other Person), and
require that its employees, if any, when conducting its
business identify themselves as such and not as employees of
any other Affiliate of the Borrower (including, without
limitation, by means of providing appropriate employees with
business or identification cards identifying such employees
as the Borrower's employees);
(ii) compensate all employees, consultants and agents
directly or indirectly through reimbursement of the Seller,
from the Borrower's bank accounts, for services provided to
the Borrower by such employees, consultants and agents
(except to the extent provided under the Administrative
Services Agreement) and, to the extent any employee,
consultant or agent of the Borrower is also an employee,
consultant or agent of any Affiliate of the Borrower,
allocate the compensation of such employee, consultant or
agent between the Borrower and such Affiliate on a basis
which reflects the respective services rendered to the
Borrower and such Affiliate;
(iii) (A) pay its own incidental administrative costs
and expenses not covered under the terms of the Administra-
tive Services Agreement, from its own funds, (B) allocate
all other shared overhead expenses (including, without
limitation, telephone and other utility charges, the
services of shared employees, consultants and agents, and
reasonable legal and auditing expenses) which are not
reflected in the Servicing Fee, and other items of cost and
expense shared between the Borrower and any Affiliate,
pursuant to the terms of the Administrative Services
Agreement, on the basis of actual use to the extent
practicable and, to the extent such allocation is not
practicable, on a basis reasonably related to actual use or
the value of services rendered, and (C) allocate taxes on
the basis set forth in the Administrative Services
Agreement;
(iv) at all times have at least two "Independent
Directors", both of which satisfy the requirements set forth
in Section 4.01(n)(ii) hereof and under the Borrower's
Certificate of Incorporation, and have at least one officer
responsible for managing its day-to-day business and manage
such business by or under the direction of its board of
directors;
(v) maintain its books and records separate from those
of any Affiliate;
(vi) prepare its financial statements separately from
those of its Affiliates and use its best efforts to ensure
that any consolidated financial statements of Ag Services
have notes to the effect that the Borrower is a separate
corporate entity whose creditors have a claim on its assets
prior to those assets becoming available to its equity
holders and therefore to any creditors of Ag Services;
(vii) not commingle its funds or other assets with
those of any of its Affiliates (other than in respect of
items of payment which are not material in the aggregate and
which have been mistakenly forwarded by an Obligor directly
to Ag Services or any of its other Affiliates), and not to
hold its assets in any manner that would create an
appearance that such assets belong to Ag Services or any
such Affiliate, not maintain bank accounts or other
depository accounts to which Ag Services or any such
Affiliate is an account party, into which Ag Services or any
such Affiliate makes deposits or from which Ag Services or
any such Affiliate has the power to make withdrawals, and
not act as an agent or representative of Ag Services or any
of its Affiliates in any capacity;
(viii) not permit any of its Affiliates to pay the
Borrower's operating expenses (except pursuant to allocation
arrangements that comply with the requirements of subsection
(ii) or (iii) of this Section 5.01(l) or pursuant to the
terms of the Purchase and Contribution Agreement);
(ix) not guarantee any obligation of any of its
Affiliates nor have any of its obligations guaranteed by any
such Affiliate, (either directly or by seeking credit based
on the assets of such Affiliate) or otherwise hold itself
out as responsible for the debts of any Affiliate;
(x) maintain at all times stationery and a telephone
number separate from that of any Affiliate and which
telephone number will be answered in its own name, and have
all its officers and employees conduct all of its business
solely in its own name;
(xi) hold regular meetings of its board of directors
in accordance with the provisions of its Certificate of
Incorporation and otherwise take such actions as are
necessary on its part to ensure that all corporate
procedures required by its Certificate of Incorporation and
by-laws are duly and validly taken;
(xii) maintain a separate office from the offices of
any of its Affiliates and identify such office by a sign in
its own name;
(xiii) not advance funds or other assets to, or commit
to advance funds or other assets to (other than by way of
payments in respect of a Purchase under the Purchase and
Contribution Agreement), or accept funds from (other than by
way of contributions to capital) Ag Services or any of its
other Affiliates for any purpose or transaction (other than
in compliance with the provisions of Section 5.02(j) with
respect to transactions with Affiliates), or permit Ag
Services or any of its other Affiliates to be involved in
the management of the Borrower;
(xiv) respond to any inquiries with respect to
ownership of an Advance by stating that it is the owner of
such Advance, and that an interest in such Advance has been
Granted to the Collateral Agent for the benefit of itself,
the Administrative Agent, Triple-A and the Surety;
(xv) on or before May 31 of each year, beginning in
1997, deliver to the Collateral Agent an Officer's
Certificate stating that Borrower has, during the preceding
year, observed all of the requisite corporate formalities
and conducted its business and operations in such a manner
as required for the Borrower to maintain its separate
corporate existence from any other entity; and
(xvi) take such other actions as are necessary on its
part to ensure that the facts and assumptions set forth in
the non-consolidation opinion described in the List of
Closing Documents attached as Exhibit I remain true and
correct at all times.
(m) Computer Files. Xxxx or cause to be marked each
Advance in its computer files to indicate the interest of the
Collateral Agent in such Advance and other Related Property
relating thereto.
(n) Taxes. File or cause to be filed, and cause each
of its Affiliates with whom it shares consolidated tax liability
to file, all federal, state and local tax returns which are
required to be filed by it, except where the failure to file such
returns could not reasonably be expected to have a Material
Adverse Effect, or which could otherwise be reasonably expected
to expose the Borrower to a material liability. The Borrower
shall pay or cause to be paid all taxes shown to be due and
payable on such returns or on any assessments received by it,
other than any taxes or assessments, the validity of which are
being contested in good faith by appropriate proceedings and with
respect to which the Borrower or the applicable Affiliate shall
have set aside adequate reserves on its books in accordance with
GAAP, and which proceedings could not reasonably be expected to
have a Material Adverse Effect, or which could otherwise be
reasonably expected to expose the Borrower to a material
liability.
(o) Facility Documents. Comply in all material
respects with the terms of, employ the procedures outlined in and
enforce the obligations of Ag Services under the Purchase and
Contribution Agreement, and all of the other Facility Documents
to which the Borrower is a party, and take all such action to
such end as may be from time to time reasonably requested by the
Collateral Agent, maintain all Facility Documents to which the
Borrower is a party in full force and effect and make to Ag
Services such reasonable demands and requests for information and
reports or for action as the Borrower is entitled to make
thereunder and as may be from time to time reasonably requested
by the Collateral Agent.
(p) Segregation of Collections. Prevent the deposit
into any of the Lock-Box Accounts or the Collection Account of
any funds other than Collections in respect of the Advances
(provided that this covenant shall not have been breached to the
extent that items other than Collections, which are not material
in the aggregate, have been mistakenly forwarded by an Obligor
directly to any of the Lock-Box Accounts or the Collection
Account) and, to the extent that any such funds are nevertheless
deposited into any of such Lock-Box Accounts or the Collection
Account, promptly identify any such funds to the Servicer for
segregation and remittance to the owner thereof. In furtherance
of the foregoing, the Borrower shall (or shall cause the Servicer
to) promptly file all required notices under the Food Securities
Act of 1985 (or any successor statute) in respect of its
interests in the Related Security relating to all Acquired
Advances.
(q) Insurance. Maintain insurance with respect to all
of its property and maintain liability insurance so that the
representations and warranties set forth in Section 4.01(x) shall
remain true and correct at all times.
SECTION 5.02. Negative Covenants of the Borrower.
From the Effective Date until the later of the Termination Date
or the Collection Date, the Borrower shall not, without the prior
written consent of the Collateral Agent:
(a) Sales, Liens, Etc. Against Advances and Related
Security. Sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist, any Lien
(other than the Primary Lien and any Permitted Encumbrances) upon
or with respect to, any Acquired Advance or any other Collateral,
or any interests in either thereof, or upon or with respect to
the Collection Account or any Lock-Box Account, or assign any
right to receive income in respect thereof. The Borrower shall
immediately notify the Collateral Agent of the existence of any
Lien on any Advance or any other Collateral, and the Borrower
shall defend the right, title and interest of each of the
Borrower and the Collateral Agent in, to and under the Advances
and all other Collateral, against all claims of third parties.
(b) Extension or Amendment of Loan Document Terms.
Extend, amend, waive or otherwise modify the terms of any Advance
or related Loan Documents, or permit the rescission or
cancellation of any Advance or related Loan Documents, whether
for any reason relating to a negative change in the related
Obligor's creditworthiness or inability to make any payment under
any such Advance or otherwise, except for: (i) extensions of any
past-due Advances entered into by the Servicer in order to
maximize Collections thereof and (ii) amendments entered into in
accordance with the Credit and Collection Policy, which do not
reduce the amount or interest rate or extend the maturity of
required payments; provided that no such amendments described
above shall (x) modify, in any manner adverse to the Borrower,
the provisions of the Loan Documents relating to assignability,
indemnification, the rights of the Collateral Agent to demand
payment thereunder, or (y) otherwise affect or impair in any
material respect the rights of the Borrower or the Collateral
Agent to receive payment under the applicable Loan Documents.
(c) Change in Business or Credit and Collection
Policy. Make any change in the character of its business or in
the Credit and Collection Policy, or, unless previously approved
by the Surety in writing, deviate from the requirements thereof,
which change or deviation would, in either case, in the sole
discretion of CapMAC, impair the value or collectibility of any
Advance in any amount which is material.
(d) Change in Payment Instructions to Obligors. Add
or terminate any bank as a Lock-Box Bank from those listed in
Schedule 4.01(l) or make any change in its instructions to
Obligors regarding payments to be made to any Lock-Box Account at
a Lock-Box Bank, unless the Collateral Agent shall have received
(i) 30 days' prior notice of such addition, termination or
change; (ii) written confirmation from the Borrower that after
the effectiveness of any such termination, there shall be at
least one (1) Lock Box Account in existence; and (iii) prior to
the effective date of such addition, termination or change,
(x) executed copies of Lock-Box Agreements executed by each new
Lock-Box Bank, the Borrower, and the Collateral Agent (and, at
the option of the Collateral Agent, the Servicer) and (y) copies
of all agreements and documents signed by either the Borrower or
the respective Lock-Box Bank with respect to any new Lock-Box
Account.
(e) Stock, Merger, Consolidation, Etc. Sell any
shares of any class of its capital stock to any Person (other
than Ag Services) or consolidate with or merge into or with any
other corporation, or purchase or otherwise acquire all or
substantially all of the assets or capital stock, or other
ownership interest of, any Person or sell, transfer, lease or
otherwise dispose of all or substantially all of its assets to
any Person, except for the granting of the Primary Lien as
expressly permitted under the terms of this Credit Agreement.
(f) Change in Corporate Name, etc. Make any change to
its corporate name, or use any trade names, fictitious names,
assumed names or "doing business as" names.
(g) ERISA Matters. (i) Engage or permit any ERISA
Affiliate to engage in any prohibited transaction for which an
exemption is not available or has not previously been obtained
from the DOL; (ii) permit to exist any accumulated funding
deficiency, as defined in Section 302(a) of ERISA and Section
412(a) of the IRC, or funding deficiency with respect to any
Benefit Plan other than a Multiemployer Plan; (iii) fail to make
any payments to any Multiemployer Plan that the Borrower or any
ERISA Affiliate may be required to make under the agreement
relating to such Multiemployer Plan or any law pertaining
thereto; (iv) terminate any Benefit Plan so as to result in any
liability; or (v) permit to exist any occurrence of any
reportable event described in Title IV of ERISA which represents
a material risk of a liability of the Borrower or any ERISA
Affiliate under ERISA or the IRC.
(h) Debt. Create, incur, assume or suffer to exist
any Debt except for (i) Debt to Triple-A, the Administrative
Agent, the Collateral Agent or the Surety expressly contemplated
hereunder and (ii) Debt to the Surety under the Insurance
Agreement.
(i) Guarantees. Guarantee, endorse or otherwise be or
become contingently liable (including by agreement to maintain
balance sheet tests) in connection with the obligations of any
other Person, except endorsements of negotiable instruments for
collection in the ordinary course of business and reimbursement
or indemnification obligations in favor of Triple-A, the
Collateral Agent, the Surety or any Liquidity Bank as provided
for under this Credit Agreement.
(j) Limitation on Transactions with Affiliates. Enter
into, or be a party to any transaction with any Affiliate, except
for:
(i) the transactions contemplated hereby, by the
Purchase and Contribution Agreement;
(ii) transactions related to the allocation of
shared overhead expenses or taxes as described in
clause (iii) of Section 5.01(l) or transactions
otherwise evidenced by the Administrative Services
Agreement; and
(iii) to the extent not otherwise prohibited
under this Credit Agreement, other transactions in the
nature of employment contracts and directors' fees,
upon fair and reasonable terms materially no less
favorable to the Borrower than would be obtained in a
comparable arm's-length transaction with a Person not
an Affiliate.
(k) Facility Documents. Except as otherwise permitted
under Section 13.01, (a) terminate, amend or otherwise modify any
Facility Document to which it is a party, or grant any waiver or
consent thereunder or (b) exercise any discretionary rights
granted to the Borrower under the Purchase and Contribution
Agreement pursuant to provisions thereof providing for certain
actions to be taken "with the consent of the Purchaser",
"acceptable to the Purchaser" as "specified by the Purchaser",
"in the reasonable judgment of the Purchaser" or similar
provisions (it being understood that inaction by the Borrower
shall not be considered to be an exercise of such discretionary
rights).
(l) Charter and By-Laws. Amend or otherwise modify
its Certificate of Incorporation or By-laws in any manner which
requires the consent of an "Independent Director" (as defined in
the Borrower's Certificate of Incorporation).
(m) Lines of Business. Conduct any business other
than that described in Section 4.01(q), or enter into any
transaction with any Person which is not contemplated by or
incidental to the performance of its obligations under the
Facility Documents to which it is a party.
(n) Accounting Treatment. Prepare any financial
statements or other statements, (subject to the rules under GAAP
for consolidated financial reporting and any tax filings made on
a consolidated basis with those of Ag Services) which shall
account for the Acquired Advances as property of Ag Services or
otherwise account for the purchase transactions contemplated by
the Purchase and Contribution Agreement in any manner other than
as the sale to the Borrower of, or a capital contribution of, the
Acquired Advances purported to be transferred by the Seller
thereunder.
(o) Limitation on Loan and Investments. Make or
suffer to exist any loans or advances to, or extend any credit
to, or make any investments (by way of transfer of property,
contributions to capital, purchase of stock or securities or
evidences of indebtedness, acquisition of the business or assets,
or otherwise) in, any Affiliate or any other Person (including,
without limitation, any officer, employee or shareholder) except
for (i) Permitted Investments and (ii) the purchase of Advances
pursuant to the terms of the Purchase and Contribution Agreement.
(p) Restricted Payments. Pay or declare any dividend
or other distribution with respect to its capital stock, or make
any payment on account of the purchase, redemption or other
acquisition or retirement of its capital stock or any warrant,
option or other right to acquire any such capital stock, either
directly or indirectly (any such distribution or payment being a
"Restricted Payment") if, either before or immediately after
giving effect to such declaration, payment or distribution of
such Restricted Payment (A) a Borrowing Base Shortfall or Event
of Default shall have occurred and be continuing, or (B) the
Borrower (1) would be "insolvent" (as such term is defined in
101(32)(A) of the Bankruptcy Code), (2) would be unable to pay
its debts as they become due, or (3) would have unreasonably
small capital for the business in which it is engaged or for any
business or transaction in which it is about to engage. In
addition to the foregoing, the Borrower shall not make any
Restricted Payment during the period commencing on the
Termination Date and continuing until the Collection Date.
(q) Net Worth. At all times maintain a positive net
worth (as defined under generally accepted accounting
principles).
ARTICLE VI
REPORTING REQUIREMENTS
SECTION 6.01. Reporting Requirements of the Servicer.
From the Effective Date until the later of the Termination Date
or the Collection Date, the Servicer shall, unless the Collateral
Agent shall otherwise consent in writing, furnish to the
Collateral Agent, or a designated agent or repository therefor as
identified hereinbelow or as otherwise notified by the Collateral
Agent to the Servicer, and with respect to Sections 6.01(b), (c),
(e), (f) and (g) hereof, furnish to the Liquidity Agent:
(a) Daily Reports. By not later than 2:30 p.m. (New
York time), on each Business Day on which either (i) a Borrowing
shall have been requested to occur and/or (ii) the Borrower or
the Servicer is requesting a release of funds from the Collection
Account under clause (iv) or (vii) of Section 7.06(c), a report
substantially in the form of Exhibit E, by facsimile, containing
such information with respect to daily Collections and other
performance criteria concerning the Collateral, and in such
format, as the Collateral Agent may reasonably request from time
to time (each such report being referred to herein as a
"Servicer's Daily Report"). Any transmission or other delivery
of each Servicer's Daily Report to the Collateral Agent, or a
repository therefor, as the case may be, shall be deemed to be a
representation and warranty by the Servicer to the Collateral
Agent that the information contained therein is true and correct
in all material respects.
(b) Settlement Reports. By not later than 10:00 a.m.
(New York time) on each Settlement Date, a report substantially
in the form of Exhibit F (each such report being referred to
herein as a "Settlement Report"), appropriately filled-out,
containing current information with respect to the then most
recently concluded month. Any transmission of such report to the
Collateral Agent shall be deemed to be a representation and
warranty by the Servicer to the Collateral Agent that the
information contained therein is true and correct in all material
respects.
(c) Certificate of Servicing Officer. Simultaneously
with the delivery of the Settlement Report, as contemplated in
the form thereof, a certificate of a Servicing Officer,
certifying the accuracy of such report and that no Event of
Default or Unmatured Event of Default has occurred, or if such
event has occurred and is continuing, specifying the event and
its status.
(d) Other Data. At the request of the Collateral
Agent, such underlying data in respect of the Acquired Advances,
in addition to the data described in Sections 6.01(a), (b) and
(c) above, as can be generated by the Servicer's existing data
processing system without undue modification or expense.
(e) Annual Servicer's Certificate. On or before May
31 of each calendar year, beginning in 1997, an Officer's
Certificate stating that (i) a review of the activities of the
Servicer during the preceding fiscal year (or, in the case of the
first such Officer's Certificate, the period since the Effective
Date) and of its performance under this Credit Agreement was made
under the supervision of the officer signing such certificate and
(ii) to the best of such Servicing Officer's knowledge, based on
such review, the Servicer has fully performed all of its
obligations under this Credit Agreement throughout such year, or,
if there has been a default in the performance of any such
obligation, specifying each such default known to such officer
and the nature and status thereof.
(f) Annual Report of Accountants. On or before May 31
of each calendar year, beginning in 1997, a report prepared and
delivered by a firm of nationally recognized independent public
accountants (who may also render other services to the Servicer,
the Borrower or Ag Services), or any other accounting or auditing
firm acceptable to the Collateral Agent, which report shall
contain (A) a report relative to the servicing of the Acquired
Advances, on internal control policies and procedures placed in
operation by the Servicer and tests of operating effectiveness in
accordance with Statement of Auditing Standards No. 70,
Processing of Transactions by Service Organizations and (B) a
report on agreed-upon procedures in accordance with Statement on
Standards for Attestation Engagements No. 4, Agreed-Upon
Procedures Engagements, comparing amounts set forth in the
Servicer's Daily Reports and Settlement Reports to supporting
underlying documentation with the specific procedures and the
adequacy thereof being agreed to by the Servicer and the Lender.
(g) Servicer Default. As soon as possible and in any
event (A) within three Business Days after a Servicing Officer
becomes aware of the occurrence of a Servicer Default or
Unmatured Servicer Default, the statement of the chief financial
officer or chief accounting officer or other Servicing Officer
setting forth details of such Servicer Default or Unmatured
Servicer Default, and the action which the Servicer has taken and
proposes to take with respect thereto, and (B) within three
Business Days after a Servicing Officer becomes aware of the
occurrence thereof, notice of any other event, development or
information which is reasonably likely to materially and
adversely affect the ability of the Servicer to perform its
obligations under this Credit Agreement.
In the event that Ag Services is no longer acting as
Servicer, any Successor Servicer appointed and acting pursuant to
Section 10.02 shall deliver or make available to the Borrower and
Ag Services each certificate and report required to be prepared,
forwarded or delivered thereafter pursuant to the provisions of
this Section 6.01(g).
(h) Officer's Certificate of Acknowledgment of
Assignments of Indemnity. As soon as possible and in any event
not later than October 15th of each year as of the immediately
preceding October 1st, an Officer's Certificate by an officer of
the Borrower certifying the percentage of Eligible Advances for
the related crop year for which either (x) written acceptance of
the related Assignment of Indemnity or (y) other written evidence
that the Borrower has been named loss payee under the related
Crop Insurance have been received from the related insurer.
SECTION 6.02. Additional Servicer Reporting
Requirements. From the Effective Date until the later of the
Termination Date or the Collection Date, the Servicer shall, for
so long as the Servicer is an Affiliate of the Borrower (and
thereafter, the Borrower shall), unless the Collateral Agent
shall otherwise consent in writing, furnish to the Collateral
Agent:
(a) as soon as available, and in any event not later
than the earlier of (i) 50 days following the end of each
quarterly accounting period or (ii) 10 days following the filing
of a Form 10-Q, if any, with the Securities and Exchange
Commission, unaudited consolidated statements of income and cash
flows for Ag Services and its Subsidiaries for the period from
the beginning of the current fiscal year to the end of such
quarterly period, and a consolidated balance sheet of Ag Services
and its Subsidiaries as at the end of such quarterly period,
setting forth in each case figures for the corresponding period
in the preceding fiscal year, all in reasonable detail and
certified by the authorized financial officer of Ag Services, as
applicable, subject to changes resulting from normal year-end
adjustments, together with a statement from such officer setting
forth in reasonable detail and certifying such calculations as
are necessary for the Borrower to determine whether an Event of
Default with respect to the financial performance of Ag Services
shall have occurred and be continuing;
(b) as soon as practicable, and in any event not later
than the earlier of (i) 95 days following the end of each annual
accounting period or (ii) within 10 days following the filing of
a Form 10-K, if any, with the Securities and Exchange Commission
audited consolidated statements of income and cash flows for Ag
Services and its Subsidiaries for such year, and a consolidated
balance sheet of Ag Services and its Subsidiaries as at the end
of such year, setting forth in each case corresponding figures
from the preceding annual financial statements, all in reasonable
detail and certified by a firm of nationally recognized
independent public accountants;
(c) to the extent not covered in subsections (a) and
(b) above, as soon as practicable and in any event within ten
(10) days after such filing, any financial reports filed by Ag
Services with the Securities and Exchange Commission.
SECTION 6.03. Miscellaneous Borrower and Servicer
Reporting Requirements. From the Effective Date until the later
of the Termination Date or the Collection Date, the Servicer
shall, for so long as the Servicer is an Affiliate of the
Borrower (and thereafter, the Borrower shall), unless the
Collateral Agent shall otherwise consent in writing, furnish to
the Collateral Agent, and with respect to Sections 6.03(d), (f)
and (g) hereof, furnish to the Liquidity Agent:
(a) as soon as available, and in any event not later
than 50 days following the end of each quarterly accounting
period, unaudited consolidated statements of income and cash
flows for the Borrower for the period from the beginning of the
current fiscal year to the end of such quarterly period, and an
unaudited consolidated balance sheet of the Borrower as at the
end of such quarterly period, setting forth in each case figures
for the corresponding period in the preceding fiscal year (if
any), all in reasonable detail and certified by the chief
financial officer of the Borrower, subject to changes resulting
from normal year-end adjustments;
(b) as soon as practicable, and in any event not later
than 95 days following the end of each annual accounting period,
audited consolidated statements of income and cash flows for the
Borrower for such year, and a consolidated balance sheet of the
Borrower and its subsidiaries as at the end of such year, setting
forth in each case corresponding figures from the preceding
annual financial statements (if any), all in reasonable detail
and certified by a firm of nationally recognized independent
public accountants;
(c) to the extent not already delivered to the
Collateral Agent pursuant to the terms of this Agreement,
promptly upon receipt thereof, copies of (i) all financial
statements delivered to the Borrower by Ag Services pursuant to
the Purchase and Contribution Agreement, and (ii) all other
reports and other written information not specified above which
are required to be delivered by Ag Services (individually or as
Servicer) to the Borrower pursuant to the terms of the Purchase
and Contribution Agreement;
(d) as soon as possible and in any event within five
Business Days after the occurrence of each Event of Default or
Unmatured Event of Default, the statement of the chief financial
officer of the Borrower setting forth details of such Event of
Default or Unmatured Event of Default and the action which the
Borrower proposes to take with respect thereto;
(e) promptly after the filing or receiving thereof,
copies of all reports and notices with respect to any Reportable
Event defined in Article IV of ERISA which the Borrower or any
Affiliate files under ERISA with the IRS or the PBGC or the DOL
or which the Borrower receives from the PBGC;
(f) as soon as possible and in any event within two
Business Days after an Authorized Officer of the Borrower has
knowledge thereof, written notice that describes in reasonable
detail any event or occurrence which, individually or in the
aggregate for all such events or occurrences, has had, or that
the Seller, in its reasonable good faith judgment determines
could reasonably be expected to have, a Material Adverse Effect;
(g) as soon as possible and in any event within two
Business Days after an Authorized Officer of the Borrower has
knowledge thereof, written notice of (i) any litigation,
investigation or proceeding of the type described in Section
4.1(f) of the Purchase and Contribution Agreement or in Section
4.01(e) hereof not previously disclosed to the Collateral Agent
and (ii) any material adverse development that has occurred with
respect to any such previously disclosed litigation,
investigation or proceeding;
(h) together with the financial statements to be
delivered under clauses (a) and (b) above, a certificate of the
chief executive officer or chief financial officer of the
Borrower to the effect that no Event of Default or Unmatured
Event of Default shall have occurred and be continuing or, if any
such event shall have occurred and be continuing, specifying in
reasonable detail the nature thereof and the action taken or
proposed to be taken with respect thereto; and
(i) promptly, from time to time, such other
information, documents, records or reports respecting the
Collateral or the condition or operations, financial or
otherwise, of the Borrower or Ag Services in each case as the
Collateral Agent or Triple-A may from time to time reasonably
request.
ARTICLE VII
SECURITY INTEREST
SECTION 7.01. Grant of Primary Lien. To secure the
prompt and complete payment when due of the Obligations and the
timely performance by the Borrower of all of the covenants and
obligations to be performed by it pursuant to this Credit
Agreement and the other Facility Documents in favor of any of the
Collateral Agent, the Administrative Agent, Triple-A and/or the
Surety, the Borrower hereby assigns and pledges to the Collateral
Agent and grants to the Collateral Agent, for the benefit of the
Collateral Agent, the Administrative Agent, Triple-A, and the
Surety a security interest (the "Primary Lien") in all of the
Borrower's right, title and interest in, to and under all
property and all interests in property of the Borrower of any
kind or nature, whether tangible or intangible, whether real or
personal, and whether now owned or existing or hereafter arising
or acquired and wheresoever located (collectively, the
"Collateral"), including, without limitation, the following
property and interests in property:
(a) all Advances;
(b) all Related Security relating to such Advances;
(c) the Purchase and Contribution Agreement,
including, without limitation, all monies due and to
become due to the Borrower from Ag Services under or in
connection therewith;
(d) all Records, including, without limitation, all
software, books, records and documents used to account for
the Advances and related Loan Documents, and all relevant
licenses and sublicenses relating to any such software
(including, without limitation, all such rights arising
under software and related licenses transferred to the
Borrower by Ag Services pursuant to the Purchase and
Contribution Agreement);
(e) the Collection Account and all other bank and
similar accounts established, in whole or in part, for the
benefit of any of the Borrower, the Collateral Agent, the
Administrative Agent, Triple-A and/or the Surety, all funds
held therein or in such other accounts, all financial
assets, investment property and other investments from time
to time on deposit, or made with proceeds, in any such
accounts, and all income arising from such funds held in any
such accounts or from such financial assets, investment
property and other investments;
(f) all lock boxes, Lock-Box Accounts, and all
other bank and similar accounts into which Collections
in respect of the Advances are or are intended to be
deposited, and all funds held therein or in such other
accounts;
(g) all certificates and instruments if any, from time
to time representing or evidencing any of the foregoing
property described in clauses (a) through (f) above;
(h) any Acquired Assets, accounts, inventory, general
intangibles, chattel paper, contract rights, investment
property, financial assets, instruments and documents, to
the extent not described in any of clauses (a) through (g)
above;
(i) all proceeds of the foregoing property
described in clauses (a) through (h) above, and all
interest, dividends, cash, instruments, financial
assets, investment property and other property from
time to time received, receivable or otherwise
distributed in respect of, or in exchange for or on
account of the sale or other disposition of, any or all
of the then existing Collateral, and including all
payments under any insurance policies relating to the
foregoing property (whether or not any of Triple-A, the
Surety or the Collateral Agent is the loss payee
thereof) or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise
with respect to any of the Collateral; and
(j) all other monies or property of the Borrower
coming into the actual possession, custody or control
of the Collateral Agent, the Administrative Agent, the
Surety or Triple-A (whether for safekeeping, deposit,
custody, pledge, transmission, collection or
otherwise).
SECTION 7.02. Continuing Liability of the Borrower.
The security interests described above are granted as security
only and shall not subject any of the Collateral Agent, the
Administrative Agent, Triple-A or the Surety or their respective
assigns to, or transfer or in any way affect or modify, any
obligation or liability of the Borrower with respect to, any of
the Collateral or any transaction in connection therewith. None
of the Collateral Agent, the Administrative Agent, Triple-A or
the Surety, or their respective assigns, shall be required or
obligated in any manner to make any inquiry as to the nature or
sufficiency of any payment received by it or the sufficiency of
any performance by any party under any such obligation, or to
make any payment or present or file any claim, or to take any
action to collect or enforce any performance or the payment of
any amount thereunder to which any such Person may be entitled at
any time.
SECTION 7.03. Filings; Further Assurances.
(a) On or prior to the Effective Date, the Borrower
shall have caused, at its sole expense, the UCC-1 financing
statements, assignments thereof and other items referred to in
the Closing List set forth in Exhibit I hereto as items which are
required to be filed or recorded, to be so filed or recorded in
the appropriate offices, and shall have caused evidence of such
filings to be delivered to the Collateral Agent.
(b) The Borrower shall, at its sole expense, from time
to time prepare, execute and deliver, or cause to be prepared,
executed and delivered, all such financing statements,
continuation statements, instruments of further assurance and
other instruments, in such forms, and shall take such other
actions, as shall be required by the Collateral Agent or as the
Collateral Agent otherwise deems necessary or advisable to
perfect the security interest of the Collateral Agent in the
Collateral. The Servicer agrees, at its sole expense, to
cooperate with and assist the Borrower in taking any such action
(whether at the request of the Borrower or the Collateral Agent).
Without limiting the foregoing, the Borrower shall from time to
time, at its sole expense, execute, file, deliver and record all
such supplements and amendments hereto and all such financing
statements, continuation statements, instruments of further
assurance, or other statements, specific assignments or other
instruments or documents and take any other action that either of
the Servicer or the Collateral Agent deems necessary or advisable
to: (i) Grant more effectively all or any portion of the
Collateral; (ii) maintain or preserve the Liens Granted hereunder
(and the priority thereof) or carry out more effectively the
purposes hereof; (iii) perfect, publish notice of, or protect the
validity of any Grant made or to be made pursuant to this Credit
Agreement; (iv) enforce any of the Advances or related Loan
Documents or any of the other Collateral (including, without
limitation, by cooperating with the Collateral Agent, at the
expense of the Borrower, in filing and recording such UCC
financing statements against such Obligors as the Collateral
Agent shall deem necessary or advisable from time to time); (v)
preserve and defend title to any Advances, related Loan Documents
and all or any other part of the Collateral, and the rights of
the Collateral Agent in such Advances, Loan Documents or other
Collateral, against the claims of all Persons and parties; or
(vi) pay any and all taxes levied or assessed upon all or any
part of the Collateral. The Borrower hereby designates the
Servicer its agent and attorney-in-fact to execute, upon the
Borrower's failure to do so, any financing statement,
continuation statement or other instrument required pursuant to
this Section 7.03 to maintain the Liens and security interests
granted hereunder with respect to the Collateral.
(c) The Borrower shall, within five Business Days
after acquiring an interest in any Advance, deliver the original
copy of all Primary Custodial Documents relating thereto to the
Custodian, in suitable form for transfer by delivery, or
accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to
the Collateral Agent. In the event that the Borrower receives
any other instrument which, in either event, evidences an Advance
or other Collateral, the Borrower shall deliver such instrument
to the Custodian on behalf of the Collateral Agent, the
Administrative Agent, Triple-A and/or the Surety within five
Business Days after the Borrower's receipt thereof, in suitable
form for transfer by delivery, or accompanied by duly executed
instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Collateral Agent.
(d) The Borrower hereby authorizes the Collateral
Agent, and gives the Collateral Agent its irrevocable power of
attorney (which authorization is coupled with an interest and is
irrevocable), in the name of the Borrower or otherwise, to
execute, deliver, file and record any financing statement, con-
tinuation statement, specific assignment or other writing or
paper and to take any other action that the Collateral Agent in
its sole discretion may deem necessary or appropriate to further
perfect the security interests created hereby. The Borrower
agrees that a carbon, photographic, photostatic, or other
reproduction of this Credit Agreement or of a financing statement
is sufficient as a financing statement where permitted by
applicable law. Any expenses incurred by the Collateral Agent
pursuant to the exercise of its rights under this Section 7.03(d)
shall be for the sole account and responsibility of the Borrower,
and shall constitute "Carrying Costs" payable by the Borrower
hereunder.
SECTION 7.04. Place of Business; Change of Name. As
of the date hereof, the chief executive office of the Borrower
and principal place of business and the location where the
Borrower maintains all Records relating to the Acquired Advances
and the other Collateral is listed below the Borrower's name on
the signature pages hereof. The Borrower will not (x) change its
principal place of business or chief executive office from such
location, (y) change its name, identity or corporate structure or
(z) change the location of its Records relating to the Collateral
such location, unless in any such event the Borrower shall have
given the Collateral Agent at least thirty (30) days' prior
written notice thereof and shall have taken all action necessary
or reasonably requested by the Collateral Agent to amend its
existing financing statements and continuation statements so that
they are not misleading and to file additional financing state-
ments in all applicable jurisdictions to perfect the Primary Lien
of the Collateral Agent on behalf of itself, the Administrative
Agent, Triple-A, and the Surety in all of the Collateral.
SECTION 7.05. Lock-Box Accounts. (a) The Borrower has
established and shall maintain a system of operations, accounts
and instructions with respect to the Obligors and Lock-Box
Accounts at the Lock-Box Banks as described in Sections 4.01(l),
5.01(g), 5.01(p) and 5.02(d) and shall establish and maintain the
Collection Account as provided in Section 7.06.
(b) All funds received in the Lock-Box Accounts and the
Collection Account shall be held in trust for the benefit of the
Collateral Agent, the Administrative Agent, Triple-A and the
Surety and none of Ag Services or the Borrower, nor any Person
claiming by, through or under Ag Services or the Borrower, shall
have any control over the use of, or any right to withdraw any
item or amount from, any Lock-Box Account or Collection Account,
except in the case of Ag Services acting in its capacity as the
Servicer to the extent expressly provided in this Agreement. The
Collateral Agent on behalf of Triple-A and the Surety is hereby
irrevocably authorized and empowered, as the Borrower's attorney-
in-fact, to endorse any item deposited in any Lock-Box Account or
the Collection Account, requiring the endorsement of the
Borrower, which authorization is coupled with an interest and is
irrevocable.
(c) The taxpayer identification number associated with
the Lock-Box Accounts shall be that of the Borrower and the
Borrower will report for federal, state and local income tax
purposes the income, if any, earned on funds in any such bank
accounts. The Collateral Agent shall, except as provided in
Section 7.06(b) hereof, have the sole and exclusive right to
withdraw or order a transfer of funds from the Lock-Box Accounts
and the Collection Account, in all events in accordance with the
foregoing terms and provisions of this Section 7.05 and the
information most recently delivered to the Collateral Agent
pursuant to Section 6.01.
SECTION 7.06. Collection Account. (a) On or prior to
the Effective Date, the Borrower shall establish and maintain, or
cause to be established and maintained, for the sole and
exclusive benefit of the Collateral Agent on behalf of the
Collateral Agent, the Administrative Agent, Triple-A and the
Surety, and their respective assigns, a cash collateral account
(the "Collection Account"). The Collection Account shall be a
special purpose segregated account, designated as the "Capital
Markets Assurance Corporation Collateral Agent Collection
Account", maintained in a segregated trust account in the trust
department of a Depository Institution, and shall be under the
sole dominion and control of, and in the name of, the Collateral
Agent, acting on behalf of itself, the Administrative Agent,
Triple-A and the Surety.
(b) All funds held in the Collection Account,
including investment earnings thereon, may be invested in
Permitted Investments at the direction of the Servicer; provided,
however, that from and after the Termination Date, the Collateral
Agent shall have the sole right to further restrict the
maturities of any Permitted Investments held in the Collection
Account and to direct the withdrawal or liquidation of any such
Permitted Investments, to be used solely for the purposes and in
the order of priority set forth at Section 7.06(d). The taxpayer
identification number associated with the Collection Account
shall be that of the Borrower and the Borrower will report for
federal, state and local income tax purposes the income, if any,
earned on funds in the Collection Account. The Collateral Agent
shall have the sole and exclusive right to withdraw or order a
transfer of funds from the Collection Account, in all events in
accordance with the terms and provisions of this Section 7.06 and
the information most recently delivered to the Collateral Agent
pursuant to Section 6.01; provided, however, that the Collateral
Agent shall, pursuant to the terms of the Collection Account
Agreement, and absent further instructions to the Collection
Account Bank to the contrary from the Collateral Agent (which
instructions the Collateral Agent may give at any time), permit
the Servicer to make withdrawals or order transfers of funds from
the Collection Account, in all events in accordance with the
provisions of this Section 7.06 and the information most recently
delivered pursuant to Section 6.01.
(c) All funds in the Collection Account shall be held
in trust for the benefit of the Collateral Agent, the
Administrative Agent, Triple-A and the Surety and, except as
otherwise provided in Section 7.06(d) below with respect to all
periods from and after the Termination Date, shall be used on
each Business Day solely for the following purposes and in the
following order of priority:
(i) To pay to any Obligor or any other Person all
amounts due to such Obligor or other Person which have been
deposited to the Collection Account as part of a remittance
of Collections, but which do not constitute Collections;
(ii) To pay the following amounts which are then due
and payable in the following order of priority: (A)
interest on the Triple-A Loans (including in any such amount
the accrued and unpaid CP Dealer Fee then due and payable);
(B) any fees specified in the Fee Letter; (C) any expenses
of the Collateral Agent; and (D) any Servicing Fee;
(iii) To be retained in the Collection Account to
the extent of any Borrowing Base Shortfall, except to
the extent used to make voluntary prepayments of
Triple-A Loans as provided in clause (vi) below;
(iv) To pay the Purchase Price of any Eligible Advances
pursuant to the terms of the Purchase and Contribution
Agreement;
(v) To pay any other Obligations (including, without
limitation, the outstanding principal amount of Triple-A
Loans) which may be due and payable at such time;
(vi) To make any voluntary prepayments of the
Triple-A Loans as provided in Section 2.07(a), upon the
direction of the Borrower;
(vii) All remaining amounts to be remitted to the
Borrower for any purposes not otherwise prohibited under
this Agreement, including, without limitation, the payment
of any and all tax or other obligations under the
Administrative Services Agreement not previously paid for
and the payment of corporate dividends in each case to the
extent the making of such payment at such time would not be
otherwise prohibited by this Agreement.
It shall be a precondition to the release of funds to the
Borrower pursuant to clause (vii) that it shall have delivered a
Servicer's Daily Report to the Collateral Agent, provided
however, that if the Servicer fails to deliver such report for
any reason, then after consultation with the Collateral Agent,
funds may, at the direction of the Servicer, be transferred to
the Borrower for the purpose of acquiring additional Eligible
Advances as described in clause (iv) above. All payments to be
made under any clause or sub-clause set forth above shall be made
before any payments to be made under any clauses or sub-clauses
of lower priority may be made. If, on any such Business Day, the
funds on deposit in the Collection Account and available for
withdrawal under clause (i), any of subclauses (A) through (D) of
clause (ii) or under any other clause are less than the amount of
the due and unpaid obligations described in such sub-clause or
clause, as applicable, such available funds shall be allocated to
the Persons to whom such obligations are owed ratably according
to the respective amounts owed.
(d) On each Business Day from and after the
Termination Date, notwithstanding anything herein or elsewhere to
the contrary, funds shall be withdrawn on any day from the
Collection Account solely upon direction of the Collateral Agent
to be used solely for the following purposes and in the following
order of priority:
(i) To pay any accrued and unpaid Servicing Fee then
due and payable to a Person other than Ag Services, the
Borrower or any Affiliate thereof (together with any accrued
and unpaid additional compensation then due and payable to a
Successor Servicer as agreed to between the Collateral Agent
and the Successor Servicer in accordance with Section
10.02(c)), and to be retained in the Collection Account to
the extent such fee (or such additional compensation) is
accrued but not then due and payable;
(ii) To pay any accrued and unpaid expenses of the
Collateral Agent then due and payable, and to be retained in
the Collection Account to the extent such amount is accrued
but not then due and payable;
(iii) To pay any accrued and unpaid interest on the
Triple-A Loans (including any accrued and unpaid CP
dealer fees) then due and payable, and to be retained
in the Collection Account to the extent such amount is
accrued but not then due and payable;
(iv) To repay the principal amount of any Triple-A
Loans then outstanding;
(v) To pay any other accrued and unpaid Obligations
which have not been paid pursuant to clauses (i)
through (iv) above (except in respect of clauses (vi)
and (vii) below);
(vi) To pay any other accrued and unpaid Carrying
Costs which are due and payable but have not been paid
pursuant to clauses (i) through (v) above (except with
respect to the Carrying Costs described in clause (vii)
below), and to be retained in the Collection Account to
the extent such amounts are accrued but not then due
and payable;
(vii) To pay any accrued and unpaid Servicing Fee owed to
any of Ag Services or any Affiliate thereof; and
(viii) To be remitted to the Borrower or as otherwise
required by law.
All payments to be made under any clause or sub-clause set forth
above shall be made before any payments to be made under any
clauses or sub-clauses of lower priority may be made. If, on any
such Business Day, the funds on deposit in the Collection Account
and available for withdrawal under any clause above are less than
the amount of the due and payable obligations described in such
clause, such available funds shall be allocated to the Persons to
whom such obligations are owed ratably according to the
respective amounts owed.
SECTION 7.07. Preservation of Rights in Collateral.
Except as herein otherwise expressly provided, neither the
Collateral Agent nor Triple-A shall be obligated to take any
steps necessary to preserve any rights in any of the Collateral
or to preserve any rights therein against prior parties, and the
Borrower agrees to take such steps. In any case, each of the
Collateral Agent and Triple-A shall be deemed to have exercised
reasonable care if it shall have taken such steps for the care
and preservation of the Collateral as the Borrower may have
reasonably requested either of the Collateral Agent or Triple-A
to take, and the omission of the Collateral Agent or Triple-A to
take any action not requested by the Borrower shall not be deemed
a failure to exercise reasonable care. No segregation or
specific allocation by any of the Collateral Agent or Triple-A of
specified items of Collateral against any liability of the
Borrower shall waive or affect any security interest in or lien
against other items of Collateral or any of the Collateral
Agent's or Triple-A's options, powers or rights under this Credit
Agreement or otherwise arising.
SECTION 7.08. Rights Not Exclusive. The Collateral
Agent's and Triple-A's respective rights, powers, privileges and
immunities specified in or arising under this Credit Agreement
are in addition to any heretofore or at any time hereafter
otherwise created or arising, whether by statute or rule of law
or contract. Each of the Collateral Agent and Triple-A is
expressly given the right and power, in furtherance of any right,
power or privilege herein specified or which the Collateral Agent
or Triple-A may otherwise have, to execute and file or record
endorsements, assignments and other instruments of conveyance or
transfer, as well as financing statements, in the name of the
Borrower with respect to documents, property and interests
relating to any property of the Borrower in which the Collateral
Agent has a security interest or standing in the name of the
Borrower or belonging to the Borrower which may at any time come
into the possession or control of the Collateral Agent or Triple-
A by virtue of this Credit Agreement. Each of the Collateral
Agent and Triple-A is also authorized to file any financing
statement without the Borrower's signature to the extent
permitted by applicable law.
SECTION 7.09. No Waiver. Failure or delay on the part
of any of the Collateral Agent or Triple-A to exercise or enforce
any of its rights, powers or privileges hereunder, or to require
strict compliance with the terms hereof in one or more instances,
shall not constitute a waiver or relinquishment thereof. None of
such rights, powers, privileges and immunities shall be deemed
waived unless each of Triple-A and the Collateral Agent shall
have signed a waiver thereof and, unless expressly stated
therein, no such waiver shall be effective as to any transaction
which occurs after the date of such waiver nor as to the
continuance of any breach of the terms hereof after such date.
ARTICLE VIII
SERVICING AND ADMINISTRATION OF ACQUIRED ADVANCES AND LOAN
DOCUMENTS
SECTION 8.01. Responsibility for Loan Document
Administration. The Servicer shall manage, administer, service
and make collections on the Acquired Advances and related Loan
Documents and perform or cause to be performed all contractual
and customary undertakings of the holder of the Loan Documents to
the Obligors, on behalf of Triple-A, the Administrative Agent,
the Collateral Agent, the Surety and the Borrower (provided that
nothing herein or in any of the other Facility Documents shall
constitute, or be deemed to constitute, an acceptance or
assumption on the part of any of Triple-A, the Administrative
Agent, the Collateral Agent or the Surety of any obligations
arising under the Loan Documents whatsoever, whether in favor of
the Obligor thereof or any other Person).
The Collateral Agent, at the request of a Servicing
Officer, shall furnish the Servicer with any reasonable documents
or take any action reasonably requested, which is necessary or
appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder. Ag Services is hereby appointed
the Servicer until such time as any Servicer Transfer shall be
effected under Article VIII.
SECTION 8.02. Standard of Care. In managing,
administering, servicing and making collections on the Loan
Documents pursuant to this Agreement, the Servicer will exercise
that degree of skill and care consistent with the Credit and
Collection Policy.
SECTION 8.03. Records. The Servicer shall, during the
period it is Servicer hereunder, maintain such books of account,
computer data files and other Records as will enable the
Collateral Agent to determine the status of each Acquired Advance
and will enable each Acquired Advance and related Loan Documents
to be serviced, in accordance with the terms of this Agreement,
by a Successor Servicer following a Service Transfer.
SECTION 8.04. Inspection.
(a) Inspection of Servicer. Each of the Borrower,
Triple-A, the Administrative Agent and the Collateral Agent, and
their respective representatives shall at all times upon
reasonable prior notice have full and reasonable access during
regular business hours to all offices and Records of the Servicer
(wheresoever located, including, without limitation, any
repository used by the Servicer on the Borrower's behalf, to
store the computer tapes constituting the Servicer's Daily
Report), as appropriate to verify the Servicer's compliance with
this Agreement, and each of the Borrower, Triple-A, the
Administrative Agent, the Collateral Agent and the Surety and
their representatives may examine and audit the same, and make
photocopies and computer tape replicas thereof, and the Servicer
agrees to render to the Borrower, Triple-A, the Administrative
Agent, the Collateral Agent and the Surety and their
representatives, at the Servicer's cost and expense, such
clerical and other assistance as may be reasonably requested with
regard thereto. The Borrower, Triple-A, the Administrative
Agent, the Collateral Agent and the Surety and their respective
representatives shall also have the right to discuss the
Servicer's affairs with the officers of the Servicer and the
Servicer's independent accountants and to verify under
appropriate procedures the validity, amount, quality, quantity,
value and condition of, or any other matter relating to, the
Collateral. The number and frequency of any such audits shall be
limited to such number and frequency as shall be reasonable in
the exercise of the Collateral Agent's reasonable commercial
judgment. Each such audit shall be at the sole expense of the
Borrower (subject to the Borrower's right under the Purchase and
Contribution Agreement to recover such expenses from Ag
Services).
(b) Confidential Information. Each of the parties
hereto agrees that, to the extent that any information obtained
by any of Triple-A, the Surety, the Administrative Agent and the
Collateral Agent or any of their respective representatives
pursuant to Section 8.04(a) shall be Confidential Information,
such Person may only disclose such Confidential Information to
(i) such Person's and its Affiliates' directors, officers,
employees, agents, trustees and professional consultants, (ii)
any assignee or participant, or proposed assignee or participant
with respect to all or any part of such Person's interests with
respect to all or any part of the transactions contemplated
hereby and by the other Facility Documents, (iv) any governmental
authority having jurisdiction over such Person, (v) any rating
agency, (vi) any credit enhancer, provider of reinsurance,
provider of a letter of credit or provider of liquidity, or
prospective credit enhancer, provider of reinsurance, provider of
a letter of credit or provider of liquidity with respect to all
or any part of the transactions contemplated hereby and by the
other Facility Documents, (viii) any other Person to which such
delivery or disclosure may be necessary or appropriate (1) in
compliance with any law, rule, regulation or order applicable to
such Person (2) in response to any subpoena or other legal
process, (3) in connection with any litigation to which such
Person is or may become a party, (4) in order to protect such
Person's rights, title and interest in and to the Collateral and
in the transactions contemplated hereby and by the other Facility
Documents, or (5) as required by law or regulation in connection
with the sale of securities of any such Person.
SECTION 8.05. Enforcement.
(a) The Servicer will, consistent with Section 8.02,
act with respect to the Acquired Advances and related Loan
Documents in such manner as will maximize the receipt of
Collections in respect of such Acquired Advances and related Loan
Documents.
(b) The Servicer may xxx to enforce or collect upon
Acquired Advances, in its own name, if possible, or as agent for
the Borrower; provided that the Servicer may not name the
Collateral Agent, Triple-A or the Surety as a party to any such
litigation without each such party's prior written consent.
(c) The Servicer, upon obtaining the prior written
consent of the Collateral Agent, may grant to the Obligor on any
Loan Document any rebate, refund or adjustment out of the
Collection Account that the Servicer in good faith believes is
required as a matter of law; provided that, on any Business Day
on which such rebate, refund or adjustment is to be paid
hereunder, such rebate, refund or adjustment shall only be paid
to the extent of funds otherwise available for distribution from
the Collection Account pursuant to Section 7.06(c)(vii) or
Section 7.06(d)(viii), as applicable.
(d) The Servicer will not permit any modification,
amendment, waiver, rescission or cancellation of any Acquired
Advance or related Loan Documents by the Obligor, whether for any
reason relating to a negative change in the related Obligor's
creditworthiness or inability to make any payment under a
Acquired Advance or related Loan Documents or otherwise, without
the prior written consent of the Collateral Agent; provided,
however, that the following modifications may be made to a
Acquired Advance from time to time without the necessity of
obtaining such consent: extensions of any past due Acquired
Advances which are intended to maximize Collections thereof and
(ii) amendments, entered into in accordance with the Credit and
Collection Policy, which do not reduce the amount of required
payments.
SECTION 8.06. Collateral Agent to Cooperate. Upon
request of a Servicing Officer, but subject to all other
provisions hereof, the Collateral Agent shall perform such other
acts as are reasonably requested by the Servicer (including,
without limitation, the execution of documents) and otherwise
cooperate with the Servicer upon the reasonable request of the
Servicer in enforcement of rights and remedies of each of Triple-
A, the Surety, the Collateral Agent and the Administrative Agent
with respect to the Acquired Advances and the Loan Documents.
SECTION 8.07. Other Matters Relating to the Servicer.
The Servicer is hereby authorized and empowered (i) to make
withdrawals from time to time from the Collection Account when
specifically permitted pursuant to the terms of Section 7.06 and
the Collection Account Agreement, but only to the extent that the
Collateral Agent has not otherwise instructed the Collection
Account Bank in accordance with the terms hereof and of the
Collection Account Agreement, (ii) to advise the Collateral Agent
in connection with the amount of permitted withdrawals from the
Collection Account in accordance with the provisions hereof,
(iii) to the extent permitted pursuant to the other terms and
conditions of this Agreement, to execute and deliver, on behalf
of the Borrower, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all
other comparable instruments, with respect to the Acquired
Advances and Loan Documents and, after the delinquency of any
Acquired Advance and to the extent permitted under and in
compliance with applicable law and regulations, to commence
enforcement proceedings with respect to such Acquired Advance
including, without limitation, the exercise of rights under any
power-of-attorney granted in any Loan Document or other document
executed in connection therewith and (iv) to make any filings,
reports, notices, applications, registrations with, and to seek
any authorization from the Securities and Exchange Commission and
any state securities authority on behalf of the Borrower as may
be necessary or advisable to comply with any federal or state
securities or reporting requirements laws.
SECTION 8.08. Servicer Insurance Coverage. The
Servicer shall maintain, and shall cause Ag Services to maintain,
fidelity insurance insuring the Collateral Agent's, the
Administrative Agent's, Triple-A's and the Surety's respective
risks against losses through wrongdoing of the Servicer's or Ag
Services' officers and employees involved in the servicing of
Loan Documents covering such actions and in an amount no less
than $1,000,000 per occurrence and naming the Collateral Agent,
for the benefit of itself, the Administrative Agent, Triple-A and
the Surety, as an additional named insured. Each such insurance
policy required pursuant to this Section 8.08 shall provide for
written notice to the Collateral Agent by the insurer at least 30
days prior to the cancellation of such insurance. Evidence
reasonably satisfactory to the Collateral Agent of all renewals
or replacements necessary to maintain such insurance from time to
time in force shall be delivered by the Servicer to the
Collateral Agent prior to the expiration date of the then current
insurance policy.
SECTION 8.09. Servicing Compensation. As compensation
for its servicing activities hereunder, the Servicer shall be
entitled to receive, on each Settlement Date, the servicing fee
(the "Servicing Fee")in an amount equal to 1.00% (the "Servicing
Fee Percentage") times the outstanding principal balance of
Triple-A Loans under the Credit Agreement as of the last day of
the prior calendar month times a fraction, the numerator of which
is the number of actual days elapsed in such calendar month and
the denominator of which equals 360. In the event of the
appointment of a Successor Servicer, the Servicing Fee and the
Servicing Fee Percentage may be adjusted as required by such
Successor Servicer and as agreed to by the Borrower and the
Collateral Agent.
SECTION 8.10. Costs and Expenses. (a) The costs and
expenses incurred by the Servicer in carrying out its duties
hereunder, including without limitation the fees and expenses
incurred in connection with the enforcement of Acquired Advances,
shall be paid by the Servicer and the Servicer shall not be
entitled to reimbursement hereunder.
(b) The Servicer agrees to pay all reasonable costs
and disbursements in connection with the perfection and
maintenance of perfection, as against all third parties, of all
of the right, title and interest of each of the Collateral Agent,
the Administrative Agent, Triple-A and the Surety, in and to the
Collateral to the extent that such payments and disbursements are
not made by the Borrower in accordance with Section 7.03.
SECTION 8.11. Servicer Representations and Warranties.
Ag Services, as initial Servicer, hereby makes, and each
Successor Servicer by acceptance of its appointment hereunder
shall make, the following representations and warranties, (1) in
the case of the initial Servicer, as of the Effective Date and
(2) in the case of any Successor Servicer, the date of such
appointment, to each of Triple-A, the Collateral Agent, the
Administrative Agent and the Surety:
(a) Due Incorporation and Good Standing. The Servicer
is a corporation (or, in the case of any Successor Servicer, a
corporation or Depository Institution) duly organized, validly
existing and in good standing under the applicable laws of its
jurisdiction of organization or incorporation and has, in all
material respects, full corporate power and authority and legal
right to own its properties and conduct its business (including
the servicing of Loan Documents) as such properties are presently
owned and such business is presently conducted, and to execute,
deliver and perform its obligations under each of the Facility
Documents to which it is a party. The Servicer is duly qualified
to do business and is in good standing as a foreign corporation,
and has obtained all necessary licenses and approvals in each
jurisdiction in which the servicing of the Acquired Advances and
Loan Documents in accordance with the terms of this Credit
Agreement requires such qualification, except where failure to
qualify or to obtain such licenses and approvals would not have a
Material Adverse Effect.
(b) Due Authorization and No Conflict. The execution,
delivery and performance by the Servicer of each of the Facility
Documents to which it is a party, and the consummation of each of
the transactions contemplated hereby and thereby, have in all
cases been duly authorized by the Servicer by all necessary
corporate action, and do not contravene (i) the Servicer's
charter or by-laws, (ii) any law, rule or regulation applicable
to the Servicer, (iii) any contractual restriction contained in
any indenture, loan or credit agreement, lease, mortgage,
security agreement, bond, note, or other agreement or instrument
binding on or affecting the Servicer or its property or (iv) any
order, writ, judgment, award, injunction or decree binding on or
affecting the Servicer or its property. Each of the Facility
Documents to which the Servicer is a party have been duly
executed and delivered on behalf of the Servicer.
(c) Governmental and Other Consents. All approvals,
authorizations, consents, orders or other actions of, and all
registration, qualification, designation, declaration, notice to
or filing with, any Person or of any governmental body or
official required in connection with the execution and delivery
by the Servicer of any of the Facility Documents to which it is a
party, the consummation of the transactions contemplated hereby
or thereby, the performance of and the compliance with the terms
hereof or thereof, have been obtained, except where the failure
to do so would not have a Material Adverse Effect.
(d) Enforceability of Facility Documents. Each of the
Facility Documents to which the Servicer is a party have been
duly and validly executed and delivered by the Servicer and
constitute the legal, valid and binding obligation of the
Servicer enforceable in accordance with their respective terms,
except as enforceability may be subject to or limited by Debtor
Relief Laws or by general principles of equity (whether
considered in a suit at law or in equity).
(e) No Litigation. There are no proceedings or
investigations pending or, to the best knowledge of the Servicer,
threatened against the Servicer before any court, regulatory
body, administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Credit
Agreement or any of the other Facility Documents, (ii) seeking to
prevent the consummation of any of the transactions contemplated
by this Credit Agreement or any of the other Facility Documents,
(iii) seeking any determination or ruling that would adversely
affect the performance by the Servicer of its obligations under
this Credit Agreement or any of the other Facility Documents,
(iv) seeking any determination or ruling that would adversely
affect the validity or enforceability of this Credit Agreement or
any of the other Facility Documents, or (v) seeking any
determination or ruling that would, if adversely determined, be
reasonably likely to have a Material Adverse Effect.
(f) Daily Reports and Other Reports. Each Servicer's
Daily Report, Settlement Report, and any other report or
certificate delivered by the Servicer pursuant to this Credit
Agreement shall be true and correct in all material respects as
of the date such report or certificate is delivered.
(g) Servicer Default. No Servicer Default has
occurred and is continuing.
The representations and warranties set forth in this
Section 8.11 shall survive the Grant of Collateral to the
Collateral Agent. Upon a discovery by the Borrower, the Servicer
or the Collateral Agent of a material breach of any of the
foregoing representations and warranties, the party discovering
such breach shall give prompt written notice to the other such
parties.
SECTION 8.12. Additional Covenants of the Servicer.
From the Effective Date until the later of the Termination Date
or the Collection Date, unless the Collateral Agent shall
otherwise consent in writing:
(a) Change in Payment Instructions to Obligors. The
Servicer shall not add or terminate any bank as a Lock-Box Bank
from those listed in Schedule 4.01(l) or make any change in its
instructions to Obligors regarding payments to be made to any
Lock-Box Bank, unless the Collateral Agent shall have received
(i) 30 Business Days' prior notice of such addition, termination
or change and (ii) prior to the effective date of such addition,
termination or change, (x) executed copies of Lock-Box Agreements
executed by each new Lock-Box Bank, the Borrower and the
Collateral Agent (and, at the option of the Collateral Agent, the
Servicer) and (y) copies of all agreements and documents signed
by either the Borrower or the respective Lock-Box Bank with
respect to any new Lock-Box Account.
(b) Collections. Subject to the proviso set forth in
Section 5.01(g) hereof, if the Servicer shall receive any
Collections, the Servicer shall hold such Collections in trust
for the benefit of the Collateral Agent and if such Collections
are in a form suitable for deposit, deposit such Collections into
a Lock-Box Account or the Collection Account within two Business
Days following Borrower's receipt thereof, and (ii) if Ag
Services or the Borrower receives any Collections, the Servicer
shall cause Ag Services or the Borrower, as the case may be, to
hold such Collections in trust for the benefit of the Collateral
Agent and deliver such Collections to the Servicer for deposit,
or deposit such Collections into a Lock-Box Account or the
Collection Account within two Business Days following such
Person's receipt thereof.
(c) Compliance with Requirements of Law. The Servicer
shall maintain in effect all qualifications required under all
relevant laws, rules, regulations and orders in order to service
each Acquired Advance and Loan Document and shall comply in all
material respects with all applicable laws, rules, regulations
and orders with respect to it, its business and properties, and
the servicing of the Acquired Advances and Loan Documents.
(d) Protection of Rights. The Servicer shall take no
action which would impair in any material respect the rights of
any of the Collateral Agent, the Administrative Agent, Triple-A
or the Surety, in the Collateral.
(e) Credit and Collection Policy. The Servicer shall
comply in all material respects with the Credit and Collection
Policy in regard to each Acquired Advance and each Loan Document.
(f) Notice to Obligors. From and after the occurrence
of an Event of Default, the Servicer shall ensure that the
Obligor of each Acquired Advance shall have been instructed to
remit payments thereunder directly to a Lock-Box Account.
(g) Relocation of Servicer. The Servicer shall give
the Collateral Agent at least 30 days prior written notice of any
relocation of any office from which it services Acquired Advances
or keeps records concerning the Acquired Advances or related Loan
Documents or of its principal place of business and chief
executive office and whether, as a result of such relocation, the
applicable provisions of the UCC would require the filing of any
amendment of any previously filed financing or continuation
statement or of any new financing statement and shall file such
financing statement or amendments as may be necessary to continue
the perfection of the Collateral Agent's security interests in
the Collateral and the proceeds thereof. The Servicer shall at
all times maintain each office from which it services Acquired
Advances or related Loan Documents and its principal place of
business and chief executive office within the United States of
America.
(h) Segregation of Collections. The Servicer shall
prevent the deposit into any of the Lock-Box Accounts or
Collection Account of any funds other than Collections in respect
of the Acquired Advances and, to the extent that any such funds
are nevertheless deposited into any of such Lock-Box Accounts or
the Collection Account, promptly segregate such funds and provide
for the remittance of such funds to the owner thereof.
SECTION 8.13. The Servicer not to Resign. The
Servicer shall not resign from the obligations and duties hereby
imposed on it hereunder except upon determination that (i) the
performance of its duties hereunder is no longer permissible
under applicable law and (ii) there is no reasonable action which
can be taken to make the performance of its duties hereunder
permissible under applicable law. Any such determination
permitting the resignation of the Servicer pursuant to clause (i)
hereof shall be evidenced by an Opinion of Counsel to such effect
delivered to the Collateral Agent. No such resignation shall be
effective until a Successor Servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance
with Section 10.02 hereof.
SECTION 8.14. Merger or Consolidation of, or
Assumption of the Obligations of Servicer.
The Servicer shall not consolidate with or merge into
any other corporation or convey or transfer its properties and
assets substantially as an entirety to any Person, unless:
(i) the corporation formed by such consolidation
or into which the Servicer is merged or the Person
which acquires by conveyance or transfer the properties
and assets of the Servicer substantially as an entirety
shall be a corporation organized and existing under the
laws of the United States of America or any state or
the District of Columbia and, if the Servicer is not
the surviving entity, shall expressly assume by an
agreement supplemental hereto, executed and delivered
to the Collateral Agent in form satisfactory to the
Collateral Agent, the performance of every covenant and
obligation of the Servicer hereunder;
(ii) the Servicer has delivered to the Collateral
Agent an Officer's Certificate and an Opinion of
Counsel each stating that such consolidation, merger,
conveyance or transfer and such supplemental agreement
comply with this Section 8.14, and all conditions prec-
edent provided for herein relating to such transaction
have been satisfied;
(iii) the Collateral Agent shall have each
expressly approved such merger, consolidation,
conveyance or transfer; and
(iv) immediately prior to and after the consumma-
tion of such merger, consolidation, conveyance or
transfer, no event which, with notice or passage of
time or both, would become a Servicer Default under the
terms of this Agreement shall have occurred and be
continuing.
SECTION 8.15. Examination of Records. Each of the
Borrower and the Servicer shall clearly and unambiguously
identify each Acquired Advance and each Loan Document in its
respective computer or other records to reflect that such
Acquired Advance and all of the Borrower's rights under such
Acquired Advances and Loan Documents have been Granted to the
Collateral Agent pursuant to this Agreement.
ARTICLE IX
EVENTS OF DEFAULT; REMEDIES
SECTION 9.01. Events of Default. Each of the
following events shall constitute an "Event of Default" within
the meaning of this Credit Agreement:
(a) The occurrence of any Servicer Default described
in Section 10.01; or
(b) The Borrower, the Servicer (if the Servicer is Ag
Services or any Affiliate thereof) or Ag Services shall fail to
make any payment or deposit to be made by it when due hereunder,
or any retention in the Collection Account pursuant to Section
7.06 when required hereunder, and, solely in the case of any such
payments, deposits or retentions, which do not constitute
payments or deposits of principal or interest on the Triple-A
Loans, such failure shall remain unremedied for three Business
Days after written notice from the Collateral Agent; or
(c) The Borrower (i) shall fail to perform or observe
any term, covenant or agreement contained in Xxxxxxx 0.00(x),
(x), (x), (x), (x), (x), (x), (x), (o), or (p), or (ii) shall
fail to perform or observe any other term, covenant or agreement
contained in Sections 5.01 or 5.02 which failure described in
this clause (ii) shall remain unremedied for five Business Days
after written notice from the Collateral Agent; or
(d) Any representation or warranty made or deemed to
be made by the Borrower, or any of its officers or employees,
under or in connection with this Credit Agreement, any other
Facility Document, any Servicer's Daily Report, Settlement Report
or other information or report delivered pursuant hereto, shall
prove to have been false or incorrect in any material respect
when made or deemed made; or
(e) The Borrower shall fail to perform or observe any
other term, covenant or agreement contained in this Credit
Agreement or in any other Facility Document on its part to be
performed or observed and any such failure shall remain
unremedied for ten Business Days after written notice from the
Collateral Agent; or
(f) The Borrower shall cease or otherwise fail to have
a good and valid title to (or, to the extent Article 9 is
applicable to the Borrower's acquisition thereof, a valid
perfected security interest in) the Collateral; or the Primary
Lien shall, for any reason, cease or otherwise fail to be a valid
and perfected Lien on, and, to the extent Article 9 applies
thereto, a first priority security interest in, the Collateral in
favor of the Collateral Agent; or
(g) (i) An Insolvency Event shall occur with respect
to any of the Borrower or Ag Services; or (ii) either of the
Borrower or Ag Services shall take any corporate action to
authorize the filing of any such Insolvency Proceeding; or
(h) As of the close of business on any Business Day,
there shall exist any Borrowing Base Shortfall which shall have
not been cured within two Business Days after the date such
shortfall has been determined to exist; or
(i) Ag Services shall cease to own 100% of the issued
and outstanding stock of the Borrower; or
(j) There shall have occurred, since the Effective
Date, in the reasonable judgment of the Collateral Agent, a
material adverse change in the operations, management or
financial condition of Ag Services or the Borrower or there shall
have occurred any event which materially and adversely affects
the collectibility of the Acquired Advances generally or the
ability of the Borrower to perform hereunder; or
(k) Borrower shall become (1) an "investment company"
within the meaning of the Investment Company Act of 1940, as
amended, or under the control of such an "investment company",
(2) a "public utility company" or a "holding company," a
"subsidiary company" or an "affiliate" of any public utility
company within the meaning of Section 2(a)(5), 2(a)(7), 2(a)(8)
or 2(a)(11) of the Public Utility Holding Company Act of 1935, or
(3) otherwise subject to any other federal or state statute or
regulation limiting its ability to incur or pay indebtedness; or
(l) There shall have occurred a "Termination Event"
under the Purchase and Contribution Agreement; or
(m) Either of Triple-A or the Surety shall reasonably
determine that continuation of this Credit Agreement will impose
a material adverse regulatory or rating agency impact on Triple-A
or the Surety, as the case may be provided that, at the
Borrower's request, Triple-A or the Surety shall demonstrate the
basis for such determination; or
(n) There shall have occurred a "Liquidity Commitment
Termination Date" under the Liquidity Agreement; or
(o) As of any date of determination, either of the
following shall have occurred: (i) the Default Ratio shall exceed
ten percent (10.0%) or (ii) the Remarketing Ratio shall exceed
thirty percent (30.0%); or
(p) Ag Services shall pay or declare any dividend or
other distribution with respect to its capital stock after giving
effect to which, the aggregate amount of dividends made in such
fiscal year would exceed 10% of Consolidated Net Income; or
(q) The excess of (x) the per annum interest rate
(calculated on a weighted average basis) accruing at any time in
respect of outstanding Acquired Advances over (y) the sum of (i)
the per annum interest rate (calculated on a weighted average
basis) then accruing under Section 2.06 in respect of the Triple-
A Loans, plus (ii) the Servicing Fee Percentage, plus (iii) the
Program Fees, shall be less than one percent (1.0%); or
(r) (i) As of the end of any of the first three fiscal
quarters of any year or for any fiscal year, Ag Services'
Consolidated Pre-Tax Margin shall be less than two percent
(2.0%), or (ii) as of the end of any fiscal quarter, Ag Services'
Consolidated Net Worth shall be less than $35,000,000; or
(s) The Borrower or Ag Services shall fail to pay any
principal of or interest on any Debt having a principal amount of
$50,000 or greater in the case of the Borrower, or $250,000 or
greater in the case of Ag Services, when the same becomes due and
payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) and such failure shall con-
tinue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Debt; or any other
default under any agreement or instrument relating to any such
Debt of Ag Services or any other event, shall occur and shall
continue after the applicable grace period, if any, specified in
such agreement or instrument if the effect of such default or
event is to accelerate, or to permit the acceleration of, the
maturity of such Debt; or any such Debt shall be declared to be
due and payable or required to be prepaid (other than by a
regularly scheduled required prepayment) prior to the stated
maturity thereof; or
(t) The percentage certified to pursuant to Section
6.01(h) hereof shall be less than 95%; or
(u) The Surety shall have a long-term debt rating of A
or lower by S&P or A-2 or lower by Xxxxx'x.
SECTION 9.02. Remedies. During the existence of an
Event of Default, the Collateral Agent on behalf of itself,
Triple-A, the Administrative Agent and the Surety may, by written
notice to the Borrower, take any or all of the following actions,
at the same or different times: (i) declare the Termination Date
to have occurred; (ii) declare the Obligations then accrued and
unpaid to be immediately due and payable; (iii) pursue any other
legal or equitable remedy available under this Credit Agreement
or any of the other Facility Documents; (iv) exercise any rights
and remedies of a secured party under Article 9 of the UCC or
under any other applicable laws, rules or regulations, which
rights and remedies shall be cumulative to those provided for
under this Credit Agreement and the other Facility Documents; and
(v) obtain from the Custodian such original copies of the Primary
Custodial Documents as it may reasonably request for the purpose
of preserving rights hereunder or undertaking enforcement against
an Obligor; provided, however, that in the case of any event
described in Section 9.01(g) above with respect to the Borrower,
then, automatically upon the occurrence of such event without
presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived by the Borrower, anything
contained herein or in the Triple-A Note to the contrary notwith-
standing and the Obligations then accrued and unpaid shall be
immediately due and payable and the Termination Date shall be
deemed to have occurred automatically; provided, further that in
the case of any event described in Section 9.01(u) above, the
Collateral Agent shall declare the Termination Date to have
occurred only upon the written direction of the Liquidity Agent.
The rights and remedies of a secured party which may be
exercised by the Collateral Agent pursuant to clause (iv) of this
Section 9.02 shall include, without limitation, the right to (x)
identify and engage a Successor Servicer to act as Servicer for
the Acquired Advances and Loan Documents in the event of a
Servicer Default in accordance with the provisions of Section
10.02, and (y) without notice except as specified below solicit
and accept bids for and sell the Collateral or any part thereof
in one or more parcels at a public or private sale, at any
exchange, broker's board or at any of the Collateral Agent's
offices or elsewhere, for cash, on credit or for future delivery,
and upon such other terms as the Collateral Agent may deem
commercially reasonable. Each of the Borrower and the Servicer
agrees that, to the extent notice of sale shall be required by
law, five Business Days' notice to the Borrower of the time and
place of any public sale or the time after which any private sale
is to be made shall constitute reasonable notification and that
it shall be commercially reasonable for the Collateral Agent to
sell the Collateral on an as-is where-is basis, without
representation or warranty of any kind. The Collateral Agent
shall not be obligated to make any sale of Collateral regardless
of notice of sale having been given and may adjourn any public or
private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.
ARTICLE X
SERVICER DEFAULTS
SECTION 10.01. Servicer Defaults. If any one of the
following events (a "Servicer Default") shall occur and be
continuing:
(a) any failure by the Servicer (i) to deliver any
information to the Collateral Agent required pursuant to Section
6.01(f) on or before the date such information is required to be
given under the terms of this Credit Agreement and such failure
shall remain unremedied for three Business Days after written
notice from the Collateral Agent, (ii) to deliver any other
information or reports to the Collateral Agent required pursuant
to Section 6.01 (including, without limitation, the failure to
deliver any Servicer's Daily Report or Settlement Report) on or
before the date such information, Servicer's Daily Report or
Settlement Report is required to be given or made under the terms
of this Credit Agreement and such failure shall (in the case of
any report other than a Servicer's Daily Report or Settlement
Report) remain unremedied for ten Business Days after written
notice from the Collateral Agent, or (iii) to make any payment,
transfer or deposit on or before the date such payment, transfer
or deposit is required to be made under the terms of this Credit
Agreement or any of the other Facility Documents to which it is a
party; or
(b) any failure on the part of the Servicer duly to
observe or perform any other covenants or agreements of the
Servicer set forth in this Credit Agreement or any of the other
Facility Documents to which it is a party, which failure
continues unremedied for a period of ten days after the date on
which written notice thereof, requiring the same to be remedied,
shall have been given to the Servicer by the Collateral Agent, or
to the Servicer and the Collateral Agent by any of the
Administrative Agent, the Surety, or Triple-A; or the Servicer
shall assign its duties under this Credit Agreement or under any
of the other Facility Documents to which it is a party, except as
permitted in accordance with the terms of Sections 10.02 and
13.04; or
(c) any representation, warranty or certification made
by the Servicer in this Agreement or any other Facility Document
to which it is a party or in any certificate delivered pursuant
to this Credit Agreement or any other Facility Document to which
it is a party shall prove to have been incorrect in any material
respect when made; or
(d) the Servicer shall become subject to an Insolvency
Event; or
(e) a final judgment is rendered against Ag Services
while acting as Servicer in an amount greater than $1,000,000
and, within 30 days after entry thereof, such judgment is not
discharged or execution thereof stayed pending appeal, or within
10 days after the expiration of any such stay, such judgment is
not discharged; or
(f) the Servicer or any Affiliate of the Servicer
shall fail to pay any principal of or premium or interest on any
Debt for which the Servicer is liable (whether as a primary or
secondary party) if the aggregate principal amount of such Debt
is $250,000 or more, when the same becomes due and payable
(whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) and such failure shall
continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Debt; or any other
default under any agreement or instrument relating to any such
Debt or any other event, shall occur and shall continue after the
applicable grace period, if any, specified in such agreement or
instrument if the effect of such default or event is to
accelerate, or to permit the acceleration of, the maturity of
such Debt; or any such Debt shall be declared to be due and
payable or required to be prepaid (other than by a regularly
scheduled required prepayment) prior to the stated maturity
thereof; or
(g) if the Servicer is Ag Services or an Affiliate of
Ag Services, the occurrence of any Event of Default specified in
Section 9.01(l) or (r); or
(h) any of the Collateral Agent, the Administrative
Agent, Triple-A or the Surety (A) shall receive notice from the
Servicer that the Servicer is no longer able to discharge its
duties under this Agreement or (B) shall determine, in their
respective reasonable judgment and based upon published reports
(including wire services), which they reasonably believe in good
faith to be reliable, that the Servicer (1) has experienced a
material adverse change in its business, assets, liabilities,
operations, or financial condition, (2) has defaulted on any of
its material obligations (other than those included in this
Agreement), or (3) has ceased to conduct its business in the
ordinary course; or
(i) the Servicer shall fail to comply in any material
respect with the Credit and Collection Policy in the performance
of its duties hereunder;
THEN, so long as such Servicer Default shall not have been
remedied, the Collateral Agent by notice given in writing to the
Servicer (a "Servicer Termination Notice"), may at the request
and shall at the direction of Triple-A or the Surety (and in
either case, with the consent of the Liquidity Agent) terminate
all of the rights and obligations of the Servicer as Servicer
under this Agreement (such termination being herein called a
"Servicer Transfer"). After receipt by the Servicer of such
Termination Notice, all authority and power of the Servicer under
this Agreement shall pass to and be vested in the Successor
Servicer appointed pursuant to Section 10.02; and, without
limitation, the Collateral Agent is hereby authorized and
empowered (upon the failure of the Servicer to cooperate) to
execute and deliver, on behalf of the Servicer, as attorney-in-
fact or otherwise, all documents and other instruments upon the
failure of the Servicer to execute or deliver such documents or
instruments, and to do and accomplish all other acts or things
necessary or appropriate to effect the purposes of such transfer
of servicing rights.
The Servicer agrees to cooperate with the Collateral
Agent and such Successor Servicer in effecting the termination of
the responsibilities and rights of the Servicer to conduct
servicing hereunder, including, without limitation, the transfer
to such Successor Servicer of all authority of the Servicer to
service the Acquired Advances and Loan Documents provided for
under this Agreement, including, without limitation, all
authority over any Collections which shall on the date of
transfer be held by the Servicer for deposit or withdrawal in a
Lock-Box Account or the Collection Account or which shall
thereafter be received by the Servicer with respect to the
Acquired Advances and Loan Documents, and in assisting the
Successor Servicer in enforcing all rights under this Agreement
including, without limitation, allowing the Successor Servicer's
personnel access to the Servicer's premises for the purpose of
collecting payments on the Acquired Advances and Loan Documents.
The Servicer shall promptly transfer its electronic records
relating to the Acquired Advances and Loan Documents to the
Successor Servicer in such electronic form as the Successor
Servicer may reasonably request and shall promptly transfer to
the Successor Servicer all other Records and necessary for the
continued servicing of the Acquired Advances and Loan Documents
in the manner and at such times as the Successor Servicer shall
reasonably request. The Servicer shall allow the Successor
Servicer access to the Servicer's officers and employees. To the
extent that compliance with this Section 10.01 shall require the
Servicer to disclose to the Successor Servicer information of any
kind which the Servicer reasonably deems to be confidential, the
Successor Servicer shall be required to enter into such customary
licensing and confidentiality agreements as the Servicer shall
deem necessary to protect its interest and as shall be
satisfactory in form and substance to the Successor Servicer.
The Servicer hereby consents to the entry against it of an order
for preliminary, temporary or permanent injunctive relief by any
court of competent jurisdiction, to ensure compliance by the
Servicer with the provisions of this paragraph.
SECTION 10.02. Appointment of Successor.
(a) Appointment. On and after the receipt by the
Servicer of a Servicer Termination Notice pursuant to Section
10.01, or any permitted resignation of the Servicer pursuant to
Section 8.13, the Servicer shall continue to perform all
servicing functions under this Agreement until the date specified
in the Servicer Termination Notice or otherwise specified by the
Collateral Agent in writing or, if no such date is specified in
such Servicer Termination Notice, or otherwise specified by the
Collateral Agent, until a date mutually agreed upon by the
Servicer and the Collateral Agent. The Collateral Agent, with
the consent of the Liquidity Agent, shall as promptly as possible
after the giving of a Termination Notice appoint a successor
Servicer (in any case, the "Successor Servicer") and such
Successor Servicer shall accept its appointment by a written
assumption in a form acceptable to the Collateral Agent. The
Collateral Agent hereby agrees to act as Successor Servicer if no
alternative Successor Servicer is available and willing to act;
provided however that the Collateral Agent shall have no
liability whatsoever for declining to act as Successor Servicer
if and when any such request is made.
(b) Duties and Obligations of Successor Servicer.
Upon its appointment, the Successor Servicer shall be the suc-
cessor in all respects to the Servicer with respect to servicing
functions under this Credit Agreement and shall be subject to all
the responsibilities and duties relating thereto placed on the
Servicer by the terms and provisions hereof, and all references
in this Credit Agreement to the Servicer shall be deemed to refer
to the Successor Servicer.
(c) Compensation of Successor Servicer. In connection
with such appointment and assumption, the Collateral Agent may
make such arrangements for the compensation of the Successor
Servicer out of Collections as it and such Successor Servicer
shall agree.
(d) Termination of Servicer's Authority. All
authority and power granted to any Successor Servicer under this
Agreement shall automatically cease and terminate upon
termination of this Agreement pursuant to Section 13.04, and
shall pass to and be vested in the Borrower and, without
limitation, the Borrower is hereby authorized and empowered to
execute and deliver, on behalf of the Successor Servicer, as
attorney-in-fact or otherwise, all documents and other
instruments, and to do and accomplish all other acts or things
necessary or appropriate to effect the purposes of such transfer
of servicing rights upon termination of this Agreement. The
Successor Servicer shall cooperate with the Borrower in effecting
the termination of the responsibilities and rights of the
Successor Servicer to conduct servicing on the Acquired Advances
and related Loan Documents. The Successor Servicer shall
transfer its electronic records relating to the Acquired Advances
and Loan Documents to the Borrower in such electronic form as the
Borrower may reasonably request and shall transfer all other
records, correspondence and documents relating to the Acquired
Advances and Loan Documents to the Borrower in the manner and at
such times as the Borrower shall reasonably request. To the
extent that compliance with this Section 10.02 shall require the
Successor Servicer to disclose the information of any kind which
the Successor Servicer deems to be confidential, the Borrower
shall be required to enter into such customary licensing and
confidentiality agreements as the Successor Servicer shall deem
necessary to protect its interests and as shall be reasonably
satisfactory in form and substance to the Borrower.
SECTION 10.03. Certain Matters Affecting the Successor
Servicer. The Successor Servicer hereunder shall be entitled to
the following rights, remedies, and protections in carrying out
its duties as Servicer hereunder: (i) the Successor Servicer
shall not be liable for any act or omission in carrying out its
duties, in the absence of its negligence, bad faith or willful
misconduct; (ii) the Successor Servicer may rely on and be fully
protected in acting or refraining from acting in accordance with
any resolution, certificate, letter, statement, instrument,
opinion, report, notice, request, consent order, appraisal, bond,
or other document received by it which it has reason to believe
is genuine and signed or presented to it by a proper party; (iii)
the Successor Servicer may consult with counsel, and any opinion
from such counsel (so long as such counsel is not an employee of
the Successor Servicer or an Affiliate of the Successor Servicer)
shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by the Successor
Servicer in good faith in accordance with such opinion; and (iv)
the Successor Servicer shall not be required to expend or risk
its own funds for extraordinary expenses or otherwise incur
extraordinary financial liability in the performance of its
duties hereunder if it reasonably believes that the repayment of
such funds or adequate indemnity against such risk or liability
is not reasonably assured to it (which assurance shall be deemed
to have been given by an unsecured indemnity agreement from an
institutional investor having a long term unsecured indebtedness
rating of at least A or its equivalent from either of S&P or
Xxxxx'x). The reference to extraordinary expenses and
liabilities in clause (iv) of the preceding sentence refers to
the out-of-pocket costs and expenses, including any attorneys'
fees and expenses, incurred in connection with suits against
Obligors for the enforcement of Acquired Advances, together with
the risk of any liabilities or counterclaims which could be
incurred in connection therewith.
ARTICLE XI
INDEMNITIES
SECTION 11.01. Liabilities to Obligors. No obligation
or liability to any Obligor or any other Person arising under or
in connection with any of the Loan Documents or any other
documents entered into in connection therewith is intended to be
assumed by any of the Collateral Agent, the Administrative Agent,
Triple-A or the Surety under or as a result of this Credit
Agreement, any of the other Facility Documents and the
transactions contemplated hereby and thereby, and, to the maximum
extent permitted by law, each of the Collateral Agent, the
Administrative Agent, Triple-A and the Surety expressly disclaim
any such obligation and liability.
SECTION 11.02. Tax Indemnification. The Borrower
agrees to pay, and to indemnify, defend and hold harmless each of
the Collateral Agent, the Administrative Agent, Triple-A and the
Surety from any taxes which may at any time be asserted with
respect to the Borrower's Purchase of any Acquired Advances, or
any Grant of the Collateral to the Collateral Agent, including,
without limitation, any sales, transfer, mortgage, gross
receipts, general corporation, personal property, privilege or
license taxes (but not including any federal, state or other
income taxes arising out of distributions in respect of the
Triple-A Loans, other than any such income taxes imposed by a
jurisdiction in which the indemnified person is not otherwise
subject to tax on its income) and costs, expenses and reasonable
counsel fees in defending against the same.
SECTION 11.03. Servicer's Indemnities. The Servicer
shall defend and indemnify each of the Borrower, the Collateral
Agent, the Administrative Agent, Triple-A, the Surety, their
respective officers, directors, employees and agents and any of
their respective successors and permitted assigns, against any
and all costs, expenses, losses, damages, claims and liabilities,
including reasonable fees and expenses of counsel and expenses of
litigation, in respect of any action taken, or failure to take
any action by the Servicer (but not by any predecessor Servicer)
with respect to this Credit Agreement, any other Facility
Document, any Acquired Advance or any Loan Document; provided,
however, that if a Successor Servicer is acting as Servicer, such
indemnity shall apply only in respect of any grossly negligent
action taken, or grossly negligent failure to take any action, or
reckless disregard of duties hereunder, or bad faith or willful
misconduct by such Successor Servicer. This indemnity shall
survive any Servicer Transfer (but a Servicer's obligations under
this Section 11.03 shall not relate to any actions or failures to
act of any Successor Servicer after a Servicer Transfer).
SECTION 11.04. Borrower's Indemnities. (a) Without
limiting any other rights which any of the Collateral Agent, the
Administrative Agent, Triple-A, the Surety, their respective
officers, directors, employees and agents or any of their
respective successors and assigns (each, an "Indemnified Party")
may have hereunder or under applicable law, the Borrower hereby
agrees to defend and indemnify each Indemnified Party from and
against any and all costs, expenses, losses, damages, claims and
liabilities (including reasonable attorneys' fees) (all of the
foregoing being collectively referred to as "Indemnified
Amounts") arising out of or resulting from this Credit Agreement,
any other Facility Document, or any transaction contemplated
hereby or thereby, or from any action taken, or failure to take
any action by the Borrower with respect to this Credit Agreement,
or any other Facility Document, including, but not limited to,
any and all costs, expenses, losses, damages, claims and
liabilities, including reasonable fees and expenses of counsel
and expenses of litigation, arising as a result of or otherwise
in connection with:
(i) the failure of the Borrower to deliver to the
Custodian all original copies of each Primary Custodial
Document;
(ii) any breach by the Borrower of any of its
representations, warranties, covenants or other obligations
under this Credit Agreement or any other Facility Document;
(iii) the failure to vest in the Borrower good and valid
title to (or, to the extent Article 9 of the UCC is
applicable to the Borrower's acquisition thereof, a first
priority perfected security interest in) the Collateral,
free and clear of any Lien (other than the Primary Lien and
Permitted Encumbrances), or the failure to vest in the
Collateral Agent perfected security interests in the
Collateral for the benefit of the Collateral Agent, the
Administrative Agent, Triple-A and the Surety, in each case
free and clear of any Lien (other than Permitted
Encumbrances);
(iv) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or docu-
ments under the UCC of any applicable jurisdiction or other
applicable laws with respect to perfection of interests in
any Collateral;
(v) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to
the payment of any Acquired Advance (including, without
limitation, a defense based on such Acquired Advance, this
Credit Agreement or any other Facility Document not being a
legal, valid and binding obligation of the Obligor thereof,
enforceable against it in accordance with its terms), or any
other claim resulting from the sale or Grant of a Acquired
Advance, this Credit Agreement or any other Facility
Document;
(vii) any products liability, consumer liability,
personal injury, any related claim by any third party, or
other claim arising out of or in connection with any
Acquired Advance, Related Security, this Credit Agreement or
any other Facility Document;
(viii) the commingling of Collections at any time with
any other funds;
(ix) any failure of Ag Services or the Borrower to
perform its duties or obligations in accordance with
applicable law;
(x) any action or omission by Ag Services or the
Borrower, reducing or impairing the rights of the Collateral
Agent with respect to any Acquired Advance, or the value of
any Acquired Advance (including, without limitation, any
cancellation or modification of any Acquired Advance by Ag
Services or the Borrower;
(xi) any investigation, litigation or proceeding
related to this Credit Agreement or the use of proceeds of
the Triple-A Loans or in respect of any Acquired Advance; or
(xii) any environmental liability which may arise or be
incurred (including, without limitation, with respect to
investigation, laboratory and consultants' fees) by reason
of the ownership of, or any Lien on, any Acquired Asset or
other Collateral;
excluding, however, (a) Indemnified Amounts to the extent
resulting from gross negligence or willful misconduct on the part
of such Indemnified party, (b) recourse for uncollectible
Acquired Advances or (c) any income or franchise taxes (or any
interest, penalties or additions to tax with respect thereto)
incurred by such Indemnified Party arising out of or as a result
of this Credit Agreement or the interest Granted hereunder in any
Collateral.
(b) If any Indemnified Party is required to compensate
any provider of liquidity support, credit enhancement or other
similar support in connection with this Credit Agreement or the
funding or maintenance of purchases of Acquired Assets hereunder
as a result of any event or circumstance similar to those
described in clauses (a)(i) through (a)(xii) above, then upon
demand by such Indemnified Party, the Borrower shall pay to such
Indemnified Party such additional amount or amounts as may be
necessary to pay such provider of liquidity support, credit
enhancement or other similar support the amounts due or to
otherwise reimburse such Indemnified Party for any amounts paid
by it.
SECTION 11.05. Operation of Indemnities. Any indemni-
fication under this Article XI shall include, without limitation,
reasonable fees and expenses of counsel and expenses of
litigation. If the Servicer has made any indemnity payments to
any of the Borrower, the Collateral Agent, the Administrative
Agent, Triple-A or the Surety pursuant to this Article XI and if
any such Indemnified Party thereafter collects any of such amount
from others, each such Indemnified Party shall promptly repay
such amounts collected to the Servicer without interest.
Notwithstanding anything to the contrary in this Agreement,
solely for purposes of the indemnification obligations set forth
in Section 11.04, any representations, warranties and covenants
made by the Borrower in this Agreement or by the Borrower or the
Seller in any other Facility Documents which are qualified by or
limited to events or circumstances which have, or are reasonably
likely to have, given rise to a Material Adverse Effect, or which
are otherwise qualified or limited by concepts of materiality,
shall not be deemed to be so qualified or limited.
ARTICLE XII
THE COLLATERAL AGENT
SECTION 12.01. Authorization and Action. Each of
CapMAC, the Administrative Agent, Triple-A and the Surety
(collectively with their respective successors and assigns, the
"Secured Creditors") hereby designates and appoints CapMAC as
"Collateral Agent" under this Credit Agreement and each of the
other Facility Documents, and authorizes the Collateral Agent to
take such actions as agent on its behalf and to exercise such
powers as are delegated to the Collateral Agent by the terms of
the Facility Documents, together with such powers as are
reasonably incidental thereto. The Collateral Agent shall not
have any duties or responsibilities, except those expressly set
forth in the Facility Documents. In addition, the Collateral
Agent shall not have any fiduciary relationship with any Person,
and no implied covenants, functions, responsibilities, duties,
obligations or liabilities on the part of the Collateral Agent
shall be read into the Facility Documents or otherwise exist for
the Collateral Agent. The provisions of this Article XII govern
the relationship between the Collateral Agent and the Secured
Creditors and are solely for the benefit of the Collateral Agent
and the Secured Creditors, and none of the Borrower, the
Servicer, or Ag Services (collectively, the "Other Parties")
shall have any rights as a third-party beneficiary or otherwise
under any of the provisions of this Article XII. In performing
its functions and duties under the Facility Documents, the
Collateral Agent shall act solely as agent for the Secured
Creditors and does not assume nor shall be deemed to have assumed
any obligation or relationship of trust or agency with or for any
of the Other Parties or any of their respective successors or
assigns. The Collateral Agent shall not be required to take any
action which exposes the Collateral Agent to personal liability
or which is contrary to the terms of any of the Facility
Documents or applicable law. The appointment and authority of
the Collateral Agent under the Facility Documents shall terminate
on the Collection Date.
SECTION 12.02. Delegation of Duties. The Collateral
Agent may execute any of its duties under the Facility Documents
by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all matters pertaining to such
duties. The Collateral Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
SECTION 12.03. Exculpatory Provisions. Neither the
Collateral Agent nor any of its directors, officers, agents or
employees shall be (i) liable for any action lawfully taken or
omitted to be taken by it or them or any Person described in
Section 12.02 under or in connection with the Facility Documents
(except for its, their or such Person's own gross negligence or
willful misconduct), or (ii) responsible in any manner to any of
the Secured Creditors for any recitals, statements,
representations or warranties made by any of the Other Parties
contained in any of the Facility Documents or in any certificate,
report, statement or other document referred to or provided for
in, or received under or in connection with, any of the Facility
Documents or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of the Facility Documents or any
other document furnished in connection therewith, or for any
failure of any of the Other Parties to perform its respective
obligations thereunder, or for any failure of any Obligor to
perform its obligations under any Loan Document, or for the
satisfaction of any conditions specified in Article III of this
Credit Agreement. The Collateral Agent shall not be under any
obligation to any Secured Creditor to ascertain or to inquire as
to the observance or performance of any of the agreements or
covenants contained in, or conditions of, the Facility Documents,
or to inspect the properties, books or records of any of the
Other Parties. This Section 12.03 is intended solely to govern
the relationship between the Collateral Agent, on the one hand,
and the Secured Creditors, on the other.
SECTION 12.04. Reliance by Collateral Agent. The
Collateral Agent shall in all cases be entitled to rely, and
shall be fully protected in relying, upon any note, writing,
resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, facsimile, telex or teletype message,
statement, order or other document or conversation believed by it
to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to any of
the Other Parties), independent accountants and other experts
selected by the Collateral Agent. The Collateral Agent shall in
all cases be fully justified in failing or refusing to take any
action under any of the Facility Documents or any other document
furnished in connection therewith unless it shall first receive
such advice or concurrence of the Secured Creditors or all of
them, as applicable, as it deems appropriate or it shall first be
indemnified to its satisfaction by the Secured Creditors against
any and all liability, cost and expense which may be incurred by
it by reason of taking or continuing to take any such action.
The Collateral Agent shall in all cases be fully protected in
acting, or in refraining from acting, under the Facility
Documents, in accordance with a request of Triple-A made pursuant
to the Facility Documents.
SECTION 12.05. Notice of Events of Default; Etc. The
Collateral Agent shall not be deemed to have knowledge or notice
of the occurrence of any Event of Default, Servicer Default,
Unmatured Event of Default or Unmatured Servicer Default unless
the Collateral Agent has received notice from a Secured Creditor
or one of the Other Parties referring to this Credit Agreement,
stating that any Event of Default, Servicer Default, Unmatured
Event of Default or Unmatured Servicer Default, has occurred
hereunder and describing such Event of Default, Servicer Default,
Unmatured Event of Default or Unmatured Servicer Default. The
Collateral Agent shall take such action with respect to such
Event of Default, Servicer Default, Unmatured Event of Default or
Unmatured Servicer Default as shall be directed by all of the
Secured Creditors; provided that unless and until the Collateral
Agent shall have received such directions, the Collateral Agent
may (but shall not be obligated to) take such action, or refrain
from taking such action, with respect to such Event of Default,
Servicer Default, Unmatured Event of Default or Unmatured
Servicer Default as the Collateral Agent shall deem advisable and
in the best interests of the Secured Creditors.
SECTION 12.06. Non-Reliance on Collateral Agent and
Other Secured Creditors. Each Secured Creditor expressly
acknowledges that neither the Collateral Agent, nor any of its
officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representations or warranties to it and
that no act by the Collateral Agent hereafter taken, including,
without limitation, any review of the affairs of any of the Other
Parties, shall be deemed to constitute any representation or
warranty by the Collateral Agent. Each Secured Creditor
represents and warrants to the Collateral Agent that it has,
independently and without reliance upon the Collateral Agent or
any other Secured Creditor and based on such documents and
information as it has deemed appropriate, made its own appraisal
of and investigation into the Acquired Advances, Loan Documents,
and the business, operations, property, prospects, financial and
other conditions and creditworthiness of the Other Parties, and
made its own decision to enter into this Credit Agreement and any
of the other Facility Documents to which it is a party. Each
Secured Creditor also represents that it will, independently and
without reliance upon the Collateral Agent or any other Secured
Creditor, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action
under this Credit Agreement and any of the other Facility
Documents, and to make such investigation as it deems necessary
to inform itself as to the Acquired Advances, Loan Documents, and
the business, operations, property, prospects, financial and
other condition and creditworthiness of each of the Other
Parties. The Collateral Agent shall not have any duty or
responsibility to provide any Secured Creditor with any credit or
other information concerning the Acquired Advances, Loan
Documents or the business, operations, property, prospects,
financial and other condition or creditworthiness of the Other
Parties which may come into the possession of the Collateral
Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
SECTION 12.07. Reimbursement and Indemnification.
Each of the Secured Creditors agrees to reimburse and indemnify
the Collateral Agent and its officers, directors, employees,
representatives and agents ratably according to their pro rata
shares of outstanding Obligations, to the extent not paid or
reimbursed by the Other Parties (i) for any amounts for which the
Collateral Agent, acting in its capacity as Collateral Agent
hereunder, is entitled to reimbursement by the Other Parties
hereunder and (ii) for any other expenses incurred by the
Collateral Agent, in its capacity as Collateral Agent and acting
on behalf of the Secured Creditors, in connection with the
administration and enforcement of the Facility Documents, the
Loan Documents, and any of the other Collateral.
SECTION 12.08. Collateral Agent in Its Individual
Capacity. Each of the Collateral Agent, the Surety and Triple-A
and each of its respective Affiliates may make loans to, accept
deposits from and generally engage in any kind of business with
the Other Parties or any Affiliate of the Other Parties as though
the Collateral Agent, the Surety or Triple-A were not the
Collateral Agent, the Surety or Triple-A hereunder, respectively.
With respect to the transactions contemplated pursuant to the
Facility Documents, CapMAC as the Collateral Agent shall have the
same rights and powers under the Facility Documents as any other
Secured Creditor and may exercise the same as though it were not
the Collateral Agent, and the terms "Secured Creditor," and
"Secured Creditors" shall include CapMAC as the Collateral Agent
in its individual capacity.
SECTION 12.09. Successor Collateral Agents. The
Collateral Agent may, upon thirty (30) days' notice to the
Borrower and each of the Secured Creditors, and the Collateral
Agent shall, upon the direction of all of the Secured Creditors
resign as Collateral Agent. If the Collateral Agent shall resign
as Collateral Agent under the Facility Documents, then the
Secured Creditors during such thirty (30) day period shall
appoint a successor agent, which successor agent shall (so long
as no Event of Default has occurred and is continuing), be
approved by the Borrower, such approval not to be unreasonably
withheld or delayed. Upon any such appointment, such successor
agent shall succeed to the rights, powers and duties of the
Collateral Agent and the term "Collateral Agent" shall mean such
successor agent, effective upon its appointment, and the former
Collateral Agent's rights, powers and duties as Collateral Agent
shall be terminated, without any other or further act or deed on
the part of such former Collateral Agent or any of the parties to
this Credit Agreement. If for any reason no successor Collateral
Agent is appointed by Triple-A during such thirty (30) day
period, then effective upon the termination of such thirty (30)
day period, the Secured Creditors shall perform all of the duties
of the Collateral Agent under the Facility Documents and the
Borrower shall make all payments in respect of the Obligations
directly to the applicable Secured Creditor and for all purposes
shall deal directly with the Secured Creditors. After any
retiring Collateral Agent's resignation hereunder as Collateral
Agent, the provisions of this Article XII shall inure to its
benefit as to any actions taken or omitted to be taken by it
while it was Collateral Agent under the Facility Documents.
SECTION 12.10. UCC Filings and Title Certificates.
The Secured Creditors and the Other Parties expressly recognize
and agree (x) that the Collateral Agent may be listed as the
secured party of record on the various Uniform Commercial Code
filings and any other assignments or recordations required to be
made under this Credit Agreement in order to perfect the
collateral assignments from the Borrower to the Secured Creditors
of security interests in the Collateral, and (y) that such
listings shall be for administrative convenience only in creating
a record or nominee secured party to take certain actions under
the Facility Documents on behalf of one or more of the Secured
Creditors and that such listing will not affect in any way the
respective status of the Secured Creditors as the beneficial
owners of their respective security interests in the Collateral.
In addition, such listings shall impose no duties on the
Collateral Agent other than those expressly and specifically
undertaken in accordance with the provisions of this Article XII.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01. Amendments, Etc. No amendment to or
waiver of any provision of this Credit Agreement nor consent to
any departure by the Borrower or the Servicer, shall in any event
be effective unless the same shall be in writing and signed by
(i) the Collateral Agent, the Administrative Agent, Triple-A and
the Surety, the Borrower and the Servicer (with respect to an
amendment) or (ii) the Collateral Agent, the Administrative
Agent, Triple-A and the Surety, (with respect to a waiver or
consent by any of them), the Borrower (with respect to a waiver
or consent by it), or the Servicer (with respect to a waiver or
consent by it), as the case may be, and then such waiver or
consent shall be effective only in the specific instance and for
the specific purpose for which given. This Credit Agreement and
the other Facility Documents collectively contain a final and
complete integration of all prior expressions by the parties
hereto with respect to the subject matter hereof and collectively
shall constitute the entire agreement (together with their
respective exhibits) among the parties hereto with respect to the
subject matter hereof, superseding all prior oral or written
understandings (except such understandings as are set forth in
the Fee Letter).
SECTION 13.02. Notices, Etc. All notices and other
communications provided for hereunder shall, unless otherwise
stated herein, be in writing (including telex communication and
communication by facsimile copy) and mailed, telexed, transmitted
or delivered, as to each party hereto, at its address (or number,
as the case may be) set forth under its name on the signature
pages hereof or at such other address (or number) as shall be
designated by such party in a written notice to the other parties
hereto; provided that, in the case of notices to the Collateral
Agent, all Servicer's Daily Reports and Settlement Reports shall
be directed to the attention of "Data Administration" and all
notices of Events of Default, or Unmatured Events of Default
shall be directed to the attention of the "Head of Exposure
Management". All such notices and communications shall be
effective upon receipt, or in the case of delivery by mail, five
days after being deposited in the mails, or, in the case of
notice by telex, when telexed against receipt of answer back, or
in the case of notice by facsimile copy, when verbal
communication of receipt is obtained, in each case addressed as
aforesaid, except that notices and communications pursuant to
Article II shall not be effective until received.
SECTION 13.03. No Waiver; Remedies. No failure on the
part of any of the Collateral Agent, the Administrative Agent,
Triple-A or the Surety to exercise, and no delay in exercising,
any right hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any right hereunder preclude
any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 13.04. Binding Effect; Assignability;
Termination. This Credit Agreement shall be binding upon the
Borrower, the Servicer, Ag Services, Triple-A, the Collateral
Agent, the Administrative Agent and the Surety and their respec-
tive successors and permitted assigns (which successors of the
Borrower shall include a trustee in bankruptcy), and shall inure
to the benefit of each such Person, and each of their respective
successors and permitted assigns. Except for the assignment
pursuant to and in connection with the Third Amended and Restated
Loan Agreement of even date herewith among Ag Services, the
financial institutions from time to time party thereto as "Banks"
and Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A.,
"Rabobank Nederland", New York Branch as "Administrative Agent"
and "Collateral Agent" thereunder, to which Triple-A and the
Collateral Agent hereby consent, none of the Borrower, the
Servicer or Ag Services may assign any of its rights or
obligations hereunder or any interest herein without the prior
written consent of Triple-A and the Collateral Agent. Each of
the Collateral Agent, the Administrative Agent and the Surety may
assign at any time its rights and obligations hereunder and
interests herein to any other Person without the consent of the
Borrower or the Servicer, and Triple-A may at any time assign its
rights and obligations hereunder and interests herein to any
other Person with the prior consent of the Borrower, which
consent shall not be unreasonably withheld. Without limiting the
foregoing, the Borrower hereby acknowledges that Triple-A has
agreed pursuant to the Liquidity Agreement, the Liquidity
Security Agreement and certain related agreements that, subject
to the restrictions set forth therein, and under certain
circumstances as described therein, certain parties providing
credit enhancement and/or liquidity for Triple-A in connection
with the Credit Agreement (including, without limitation, the
"Liquidity Collateral Agent" under the Liquidity Security
Agreement), shall be entitled to exercise Triple-A's rights under
this Credit Agreement and in addition, shall constitute third-
party beneficiaries of this Credit Agreement. The Borrower
hereby consents to the foregoing and agrees to cooperate with any
such Person electing to exercise Triple-A's rights under this
Credit Agreement.
This Credit Agreement shall create and constitute the
continuing obligations of the parties hereto in accordance with
its terms, and shall remain in full force and effect until such
time, after the Termination Date, as the Collection Date shall
occur; provided, however, that the rights and remedies with
respect to any breach of any representations, warranties or
covenants made by any of the Borrower, the Servicer, or Ag
Services and the indemnification and payment provisions hereof
(including, without limitation, the indemnification and payment
provisions of each of the Borrower, the Servicer and Ag Services
under Sections 11.02, 11.03, 11.04 and 13.08), shall be
continuing and shall survive any termination of this Credit
Agreement; provided further, however, that to the extent that a
payment, transfer or deposit is made by or on behalf of any of
the Borrower, the Servicer, or Ag Services, to any of the
Collateral Agent, the Administrative Agent, Triple-A or the
Surety, which payment, transfer or deposit (or any part thereof)
is subsequently invalidated, declared to be fraudulent or
preferential or set aside and required to be repaid to any of the
Borrower, the Servicer or Ag Services, or its respective estate,
trustee or receiver or any other Person, under any bankruptcy
law, state or federal law, common law or equitable cause, then to
the extent of such repayment, the agreements hereunder in respect
of such Obligations or part thereof which had been so repaid,
shall be reinstated and continued in full force and effect as of
the date such initial payment, transfer or deposit occurred.
SECTION 13.05. Release of Collateral. Upon the
termination of this Credit Agreement pursuant to Section 13.04,
the Collateral Agent shall release all liens and assign to the
Borrower (without recourse, representation or warranty) all
right, title and interest of the Collateral Agent in and to the
Collateral, and all proceeds thereof. The Collateral Agent shall
execute and deliver such instruments of assignment, in each case
without recourse, as shall be reasonably requested by Borrower to
release the security interests of the Collateral Agent in the
Collateral.
SECTION 13.06. GOVERNING LAW. THIS CREDIT AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY
OR PERFECTION OF THE INTERESTS OF THE COLLATERAL AGENT IN THE
COLLATERAL OR REMEDIES HEREUNDER OR THEREUNDER, IN RESPECT
THEREOF, ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN
THE STATE OF NEW YORK.
SECTION 13.07. CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL. EACH OF THE BORROWER, THE SERVICER, AND AG SERVICES HEREBY
AGREES TO THE JURISDICTION OF ANY FEDERAL COURT LOCATED WITHIN
THE STATE OF NEW YORK, AND WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE
MADE BY REGISTERED MAIL DIRECTED TO THE APPLICABLE PARTY AT THE
ADDRESS SET FORTH ON THE SIGNATURE PAGE HEREOF AND SERVICE SO
MADE SHALL BE DEEMED TO BE COMPLETED FIVE (5) DAYS AFTER THE SAME
SHALL HAVE BEEN DEPOSITED IN THE U.S. MAILS, POSTAGE PREPAID AND
BY SERVICE UPON CT CORPORATION SYSTEM, 0000 XXXXXXXX, XXX XXXX,
XXX XXXX 00000, WHICH THE SELLER HEREBY IRREVOCABLY APPOINTS AS
ITS AGENT FOR THE PURPOSE OF ACCEPTING SERVICE OF PROCESS. EACH
OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE BETWEEN OR AMONG THE PARTIES HERETO,
OR ANY OF THEM, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH
THIS CREDIT AGREEMENT. INSTEAD, ANY DISPUTE RESOLVED IN COURT
WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY. WITH RESPECT
TO THE FOREGOING CONSENT TO JURISDICTION, EACH OF THE BORROWER
AND AG SERVICES HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON
CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED
HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE
RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS
SECTION 13.07 SHALL AFFECT THE RIGHT OF TRIPLE-A OR THE
COLLATERAL AGENT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR AFFECT THE RIGHT OF TRIPLE-A OR THE
COLLATERAL AGENT TO BRING ANY ACTION OR PROCEEDING AGAINST ANY OF
THE BORROWER OR AG SERVICES OR ITS RESPECTIVE PROPERTY IN THE
COURTS OF ANY OTHER JURISDICTION.
SECTION 13.08. Costs, Expenses and Taxes. (a) The
Borrower agrees to pay on demand
(x) subject to certain agreements with respect to
limitations on the fees and out-of-pocket expenses of
counsel for Triple-A, the Collateral Agent, the
Administrative Agent and the Surety with respect the
preparation, execution and delivery of this Credit Agreement
and the related documents, all reasonable costs and expenses
in connection with the preparation, execution, delivery and
administration (including periodic auditing fees as provided
for in Section 5.01(c), and any requested amendments,
waivers or consents) of this Credit Agreement and the other
documents to be delivered hereunder, including, without
limitation, the reasonable fees and out-of-pocket expenses
of counsel for Triple-A, the Collateral Agent, the
Administrative Agent and the Surety with respect thereto and
with respect to advising Triple-A, the Collateral Agent, the
Administrative Agent and the Surety as to its rights and
remedies under this Credit Agreement, the other Facility
Documents, and the other agreements to be delivered
hereunder and thereunder, and
(y) all reasonable costs and expenses, if any (includ-
ing reasonable counsel fees and expenses), in connection
with the enforcement or preservation of the rights and
remedies of each of Triple-A, the Collateral Agent, the
Administrative Agent and the Surety under this Credit
Agreement, the other Facility Documents and the other
agreements and documents to be delivered hereunder and
thereunder.
(b) The Borrower agrees to pay, indemnify and hold
each of Triple-A, the Collateral Agent, the Administrative Agent,
the Surety and their respective officers, directors, employees
and agents harmless from and against any and all stamp, sales,
excise and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and
recording of this Credit Agreement, the other Facility Documents
and the other agreements, instruments and documents to be
delivered hereunder and thereunder, and agrees to indemnify each
of Triple-A, the Collateral Agent, the Administrative Agent, the
Surety, their respective officers, directors, employees and
agents and their respective assignees against any liabilities
with respect to or resulting from any delay in paying or omission
to pay such taxes and fees.
(c) The Borrower agrees to pay, indemnify and hold
each of Triple-A, the Collateral Agent, the Administrative Agent,
the Surety and their respective officers, directors, employees
and agents harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery,
enforcement, performance, administration and management of this
Credit Agreement, the other Facility Documents and the other
agreements and documents to be delivered hereunder and thereunder
(all the foregoing, collectively, the "indemnified amounts"),
provided that the Borrower shall have no obligation hereunder to
any of Triple-A, the Collateral Agent, the Administrative Agent
and the Surety with respect to indemnified amounts arising from
the gross negligence or willful misconduct of any of Triple-A,
the Collateral Agent, the Administrative Agent and the Surety.
SECTION 13.09. Limitations on Payments. Notwithstand-
ing anything herein or elsewhere to the contrary, the Borrower's
obligations to make payments hereunder, or under any of the other
Facility Documents, to the extent that a source of any such
payment is the Collection Account and/or the funds or investments
maintained therein, shall be subject in all events to the
limitations on permitted payment dates and the designation of
payment priorities set forth in Section 7.06.
SECTION 13.10. Execution in Counterparts;
Severability. This Credit Agreement may be executed in any
number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be
deemed to be an original and all of which when taken together
shall constitute one and the same agreement. In case any
provision in or obligation under this Credit Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions
or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired
thereby.
SECTION 13.11. No Bankruptcy Petition Against
Triple-A. Each of the Borrower, Ag Services, the Servicer, the
Collateral Agent and the Administrative Agent covenants and
agrees that it will not institute against Triple-A, or join any
other Person in instituting against Triple-A, any Insolvency
Proceeding under bankruptcy law or under any similar federal or
state law.
SECTION 13.12. Further Assurances. Each of the
Borrower and Ag Services covenants and agrees to do and perform,
from time to time, any and all acts and to execute any and all
further instruments required or reasonably requested by the
Collateral Agent more fully to effect the purposes of this Credit
Agreement, including, without limitation, the execution of any
financing statements or continuation statements relating to the
Collateral for filing under the provisions of the UCC of any
applicable jurisdiction.
SECTION 13.13. Captions and Cross References. The
various captions (including, without limitation, the table of
contents) in this Agreement are provided solely for convenience
of reference and shall not affect the meaning or interpretation
of any provision of this Agreement. IN WITNESS WHEREOF, the parties
below have caused this Credit Agreement to be duly executed by their duly
authorized officers and delivered as of the day and year first above
written.
AG ACCEPTANCE CORPORATION
By:_____________________________________
Title:_______________________
Address: X.X. Xxx 000
0000 Xxxx Xxxxx Xxxxxx
Xxxxx Xxxxx, Xxxx 00000
Attn: Xxxx Xxxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
AG SERVICES OF AMERICA, INC.
By:_____________________________________
Title:_______________________
Address: X.X. Xxx 000
0000 Xxxx Xxxxx Xxxxxx
Xxxxx Xxxxx, Xxxx 00000
Attn: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
TRIPLE-A ONE FUNDING CORPORATION
By: Capital Markets Assurance
Corporation, is Attorney-in-Fact
By: ____________________________________
Title:_______________________
Address: 000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Exposure Management
- Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
CAPITAL MARKETS ASSURANCE CORPORATION
By: ____________________________________
Title: Vice President
Address: 000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Exposure Management
- Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
CAPMAC FINANCIAL SERVICES, INC.
By: ____________________________________
Title: Vice President
Address: 000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Exposure Management
- Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
AG SERVICES OF AMERICA, INC.
EXHIBIT 10.20
PURCHASE AND CONTRIBUTION AGREEMENT
DATED MARCH 12, 1997
-25-
PURCHASE AND CONTRIBUTION AGREEMENT
Dated as of March 12, 1997
Between
AG ACCEPTANCE CORPORATION
as the Purchaser
and
AG SERVICES OF AMERICA, INC.
as the Seller
TABLE OF CONTENTS
Section Page
ARTICLE IDEFINITIONS
SECTION 1.1. Certain Defined Terms. . . . . . . . . . . . 1
SECTION 1.2. Other Terms. . . . . . . . . . . . . . . . . 2
SECTION 1.3. Computation of Time Periods. . . . . . . . . 2
ARTICLE IIAMOUNTS AND TERMS OF THEPURCHASES AND CONTRIBUTIONS
SECTION 2.1. Agreement to Sell and Contribute . . . . . . 2
SECTION 2.2. Initial Purchase; Payment for Purchases. . . 3
SECTION 2.3. Purchases of Purchased Assets. . . . . . . . 5
SECTION 2.4. Servicing of Loan Documents. . . . . . . . . 5
SECTION 2.5. Transfer of Records. . . . . . . . . . . . . 5
SECTION 2.6. Collections; Deemed Collections. . . . . . . 6
SECTION 2.7. No Assumption. . . . . . . . . . . . . . . . 8
SECTION 2.8. No Recourse. . . . . . . . . . . . . . . . . 8
SECTION 2.9. True Sales . . . . . . . . . . . . . . . . . 8
SECTION 2.10. Payments and Computations, Etc. . . . . . . 8
SECTION 2.11. Perfection of Liens; Further Assurances . . 9
ARTICLE IIICONDITIONS OF PURCHASES
SECTION 3.1. Conditions Precedent to Initial Purchase . . 9
SECTION 3.2. Conditions Precedent to All Purchases. . . .10
SECTION 3.3. Effect of Payment of Purchase Price. . . . .10
ARTICLE IVREPRESENTATIONS AND WARRANTIES
SECTION 4.1. Representations and Warranties of the
Seller. . . . . . . . . . . . . . . . . . .10
SECTION 4.2. Representations and Warranties
Concerning the Acquired Assets. . . . . . .19
ARTICLE VGENERAL COVENANTS OF THE SELLER
SECTION 5.1. Affirmative Covenants of the Seller. . . . .20
SECTION 5.2. Reporting Requirements of the Seller . . . .26
SECTION 5.3. Negative Covenants of the Seller . . . . . .28
ARTICLE VIADDITIONAL RIGHTS AND OBLIGATIONS INRESPECT OF THE
ACQUIRED ASSETS
SECTION 6.1. Rights of the Purchaser. . . . . . . . . . .30
SECTION 6.2. Further Action Evidencing Transfers. . . . .31
SECTION 6.3. Responsibilities of the Seller . . . . . . .32
SECTION 6.4. Application of Collections . . . . . . . . .32
SECTION 6.5. Power of Attorney Relating to Loan
Documents . . . . . . . . . . . . . . . . .32
ARTICLE VIITERMINATION EVENTS
SECTION 7.1. Termination Event. . . . . . . . . . . . . .33
ARTICLE VIIIINDEMNIFICATION
SECTION 8.1. Indemnities by the Seller. . . . . . . . . .34
SECTION 8.2. Operation of Indemnities . . . . . . . . . .36
ARTICLE IXMISCELLANEOUS
SECTION 9.1. Amendments, Etc. . . . . . . . . . . . . . .36
SECTION 9.2. Notices, Etc.. . . . . . . . . . . . . . . .36
SECTION 9.3. No Waiver; Remedies. . . . . . . . . . . . .37
SECTION 9.4. Binding Effect; Assignability. . . . . . . .37
SECTION 9.5. GOVERNING LAW. . . . . . . . . . . . . . . .39
SECTION 9.6. CONSENT TO JURISDICTION; WAIVER OF
JURY TRIAL. . . . . . . . . . . . . . . . .39
SECTION 9.7. Costs, Expenses and Taxes. . . . . . . . . .39
SECTION 9.8. Execution in Counterparts; Severability. . .40
SECTION 9.9. No Proceedings . . . . . . . . . . . . . . .40
SECTION 9.10. Captions and Cross References . . . . . . .41
LIST OF EXHIBITS
EXHIBIT A Form of Settlement Report
EXHIBIT B Description of Credit and Collection Policy
EXHIBIT C Form of Seller Note
EXHIBIT D List of Offices of Seller where Records Are Kept
EXHIBIT E Form of Lock-Box Agreement
EXHIBIT F List of Lock-Box Banks
EXHIBIT G Trade Names and Assumed Names
EXHIBIT H List of Computer Software
PURCHASE AND CONTRIBUTION AGREEMENT
THIS PURCHASE AND CONTRIBUTION AGREEMENT (this
"Agreement"), dated as of March 12, 1997 is made by and between
AG SERVICES OF AMERICA, INC., an Iowa corporation, as seller ("Ag
Services" or the "Seller"), and AG ACCEPTANCE CORPORATION, a
Delaware corporation (the "Purchaser"), as purchaser.
WHEREAS, pursuant to Loan Documents with various
Obligors, the Seller has made certain Advances pursuant to such
Loan Documents and may hereafter, from time to time, make further
Advances;
WHEREAS, the Seller wishes to sell such Advances, and
the Related Security that it now owns and from time to time
hereafter will own to the Purchaser, and the Purchaser is
willing, on the terms and subject to the conditions contained in
this Agreement, to purchase such Advances and the Related
Security relating thereto from the Seller from time to time; and
WHEREAS, in connection with the foregoing transactions,
the Purchaser is entering into a Credit Agreement, dated as of
even date herewith (as the same may be amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"),
among the Purchaser, Ag Services as Servicer (the "Servicer"),
Triple-A One Funding Corporation ("Triple-A"), CapMAC Financial
Services, Inc. ("CFS"), as Administrative Agent (the
"Administrative Agent") and Capital Markets Assurance
Corporation, a New York insurance company ("CapMAC") as
Collateral Agent (the "Collateral Agent"), pursuant to which,
among other things, Triple-A has agreed to provide funding for
the Purchaser's purchases hereunder and Ag Services has agreed to
act as Servicer for the Acquired Advances acquired by the
Purchaser under or in connection with this Agreement;
NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Defined Terms. (a) As used in
this Agreement, capitalized terms used herein shall, unless
otherwise defined herein, have the meanings assigned to them in
the Credit Agreement referred to above.
(b) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision
of this Agreement, and Section, subsection, Schedule and Exhibit
references are to Sections, subsections, Schedules and Exhibits
of this Agreement unless otherwise specified.
SECTION 1.2. Other Terms. All accounting terms not
specifically defined herein shall be construed in accordance with
GAAP. All terms used in Article 9 of the UCC in the State of New
York, and not specifically defined herein, are used herein as
defined in such Article 9.
SECTION 1.3. Computation of Time Periods. Unless
otherwise stated in this Agreement, in the computation of a
period of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and
"until" each means "to but excluding."
ARTICLE II
AMOUNTS AND TERMS OF THE
PURCHASES AND CONTRIBUTIONS
SECTION 2.1. Agreement to Sell and Contribute. (a)
On the terms and conditions hereinafter set forth, the Purchaser
agrees to purchase and the Seller agrees to sell, all of the
Seller's right, title and interest in and to certain Advances
originated by the Seller. The Purchaser shall make the initial
Purchase hereunder on the Effective Date by purchasing from the
Seller all Eligible Advances of the Seller existing as of the
close of business on the Business Day immediately prior to the
Effective Date, together with all of the Related Security
relating to such Advances, all Collections with respect to, and
other proceeds of, such Advances. The Seller shall transfer to
the Purchaser as a contribution to the capital of the Purchaser,
all Advances (other than those described in the immediately
preceding sentence), together with all of the Related Security
relating to such Advances, all Collections with respect to, and
other proceeds of, such Advances, existing as of the close of
business on the business Day immediately prior to the Effective
Date with respect to Loans with original Due Dates of September
1, 1996 or later. On each Business Day after the initial
Purchase until the occurrence of the Termination Date, the
Purchaser shall acquire all Advances originated by the Seller
which have not been previously purchased or contributed
hereunder, together with all of the Related Security relating to
such Advances and all Collections with respect to and other
proceeds of such Advances. Prior to making any Purchase
hereunder, the Purchaser may request of any Seller, and the
Seller shall deliver, such approvals, opinions, information,
reports or documents as the Purchaser may reasonably request.
(b) It is the intent of the Seller and the Purchaser
that the transfer by the Seller to the Purchaser of the Acquired
Assets constitute a sale, in part, and a contribution to capital,
in part, which sales and contributions are absolute and
irrevocable, without recourse except as otherwise provided in
this Agreement, and will provide the Purchaser with full
ownership of the Acquired Assets. Each of Seller and the
Purchaser hereby agrees to treat such transfer as a sale and a
contribution for tax, reporting and accounting purposes (except
to the extent that such transfer is not recognized due to the
reporting of taxes on a consolidated basis where applicable and
the application of consolidated financial reporting principles
under GAAP). The Seller agrees to respond to any inquiries with
respect to the transfer hereunder by confirming the sale and
contribution of the Advances and the Related Security to the
Purchaser, and to note on its financial statements that such
Advances and the Related Security have been sold and/or
contributed to the Purchaser.
SECTION 2.2. Initial Purchase; Payment for Purchases.
(a) The initial Purchase shall be made on the Effective Date or
on such later date mutually agreeable to the parties hereto as
set forth in a notice requesting such Purchase received by the
Purchaser at least one Business Day before the date of such
initial Purchase (the date of the initial Purchase and each
subsequent Purchase being hereinafter referred as a "Purchase
Date").
(b) The purchase price (the "Purchase Price") for each
Advance (together with the other related Purchased Assets) shall
be 100% of the Principal Balance of each such Advance on the
Purchase Date therefor, except that the Purchaser may, with
respect to any Purchase, offset against such Purchase Price any
unpaid amounts owing hereunder from the Seller to the Purchaser
and the Seller may treat a portion of the Principal Balance of
new Advances as a contribution to the capital of the Purchaser.
The Seller may, on the Purchase Date of the initial Purchase
hereunder and on any other Purchase Date, elect to designate all
or a portion of the Advances proposed to be transferred to the
Purchaser on such date as a capital contribution to the
Purchaser. In such event, the Purchase Price payable with
respect to such Purchase shall be reduced by the aggregate
Principal Balance of the contributed Advances; provided, however,
that Advances (and the other related Contributed Assets)
contributed to the Purchaser as capital shall otherwise
constitute Acquired Assets for purposes of this Agreement.
(c) The Purchaser shall pay the Purchase Price for the
Advances (together with the other related Purchased Assets) sold
by the Seller under this Agreement on the Purchase Date therefor.
On each Purchase Date, the Purchaser shall, upon satisfaction of
the applicable conditions set forth in Article III, make avail-
able to the Seller the Purchase Price, in cash in same day funds.
(d) All invoices and monthly statements delivered to
each Obligor of an Acquired Advance shall include a written
notice informing each such Obligor that Advances outstanding
thereunder have been assigned by the Seller to the Purchaser
under this Agreement and that a security interest in such
Advances has been granted by the Purchaser to the Collateral
Agent under the Credit Agreement.
(e) If, on any day, the amount of cash available to
the Purchaser under the Credit Agreement is less than the
Purchase Price owing for all Purchases of Advances to be made on
such day, then the Purchaser may, by notice to the Seller, elect
to pay such remaining part of the Purchase Price by borrowing a
revolving loan (each a "Seller Loan") and the Seller shall have
irrevocably agreed to advance, and shall be deemed to have
advanced, a Seller Loan in the amount so specified by the
Purchaser; provided, however, that the Purchaser may not make any
such election and the Seller shall not have any obligation to
extend any Seller Loans to the Purchaser if, as a result thereof,
the aggregate unpaid principal amount of all of the Seller Loans
would exceed the lesser of (i) 8% of the outstanding principal
amount of Triple-A Loans at such time or (ii) the aggregate
outstanding Principal Balance of Acquired Advances at such time
minus the aggregate outstanding principal amount of Triple-A
Loans at such time minus the Loss Reserve at such time minus the
Interest Reserve at such time.
(f) The Seller Loans advanced by the Seller shall be
evidenced by, and payable in accordance with the terms and
provisions of, a promissory note (as the same may be amended,
modified or supplemented from time to time, together with all
replacements thereof and substitutions therefor, the "Seller
Note") payable to the Seller in the form of Exhibit C attached
hereto. On each Business Day, to the extent that the Purchaser
receives either Collections or proceeds from any Triple-A Loans
under the Credit Agreement which, in any case, it is not required
to hold in trust for, or remit to, the Collateral Agent or the
Servicer pursuant to the Credit Agreement, then the Purchaser
shall remit such funds to the Seller (net of any funds needed to
pay existing expenses which are then accrued and unpaid) in the
following order of priority and application: first to pay the
Purchase Price owed on such date, and second to pay amounts owed
by Purchaser to the Seller under the Seller Note.
(g) The Seller Loans shall, subject to the terms of the
Seller Note, be subordinated to the prior right and payment in
full of all recourse obligations of the Purchaser under the
Credit Agreement.
SECTION 2.3. Purchases of Purchased Assets. Although
the Purchaser may from time to time purchase or receive a capital
contribution of Advances, the Seller shall remain obligated
(i) to perform, or cause to be performed, all of the obligations
of the originator under the related Loan Documents (and the
exercise by the Purchaser of any of its rights thereunder or
hereunder shall not relieve the Seller of such obligations) and
(ii) to pay or cause to be paid, when due any taxes, including
without limitation, sales, excise and personal property taxes
payable in connection with the Advances, unless the payment of
such taxes in being contested in good faith and by appropriate
proceedings; provided, that, the Purchaser shall have the right
to exercise any of the rights of the Seller under any such
Advance.
SECTION 2.4. Servicing of Loan Documents. Consistent
with the Purchaser's ownership, as between the parties to this
Agreement, of all Acquired Advances and other Acquired Assets,
and subject to the terms of the Loan Documents and the rights of
the Servicer under the Credit Agreement, the Purchaser shall have
the sole right to service, administer and collect all Acquired
Advances and other Related Security, to assign such right and to
delegate such right to others. In consideration of the
Purchaser's purchase of the Purchased Assets, and as more fully
set forth in Section 9.4, the Seller hereby acknowledges and
agrees that the Purchaser shall assign to the Collateral Agent
for the benefit of the Secured Creditors the rights and interests
granted by the Seller to the Purchaser hereunder and that the
Purchaser and the Collateral Agent have agreed for the Seller, at
least initially, to service the Acquired Assets. The Seller
agrees to cooperate fully with the Servicer, the Purchaser and
the Collateral Agent in the exercise of such rights.
SECTION 2.5. Transfer of Records. (a) The transfer
of Acquired Assets hereunder shall include the transfer to the
Purchaser of all of the Seller's right and title to and interest
in the Records relating to such Acquired Assets, which transfer
shall be effected automatically on the Purchase Date for such
Acquired Assets without any further documentation. In connection
with such transfer, the Seller hereby grants to the Purchaser an
irrevocable, non-exclusive license to use, without royalty or
payment of any kind, all software used by the Seller to account
for the Advances and the Loan Documents to the extent necessary
to administer the Acquired Assets, whether such software is owned
by the Seller or is owned by others and used by the Seller under
license agreements with respect thereto, such use to be subject
to the terms and conditions of any such license agreements with
third parties where applicable. The license granted hereby shall
be irrevocable, and shall terminate on the date on which the
aggregate Principal Balances shall have been reduced to zero.
(b) The Seller shall take such action requested by the
Purchaser, from time to time hereafter, that may be necessary or
appropriate to ensure that the Purchaser and its assigns have (i)
an enforceable ownership interest in the Records relating to the
Acquired Assets and (ii) an enforceable right (whether by license
or sublicense or otherwise) to use all of the computer software
used to account for the Acquired Assets and/or to recreate such
Records, such use to be subject to the terms and conditions of
any license agreements with third parties pursuant to which the
Seller has the right to use the applicable computer software.
SECTION 2.6. Collections; Deemed Collections. (a) Any
Collections of Acquired Advances received (or deemed to have been
received) by the Seller shall be held by the Seller in trust for
the benefit of the Purchaser. If such Collections are in a form
suitable for deposit, the Seller shall deposit such Collections
directly into the Collection Account or otherwise remit such
Collections directly to the Servicer, in either case, within two
Business Days of Seller's receipt (or deemed receipt) thereof.
(b) If on any day the Principal Balance of any Advance
is either (i) reduced or adjusted as a result of any defective,
rejected, returned or repossessed merchandise, any defective or
rejected services, or any discount or any other adjustment made
or performed by the Seller or any other Person, or (ii) reduced
or canceled as a result of a setoff in respect of any claim by
the Obligor thereof against the Seller or any other Person
(whether such claim arises out of the same or a related
transaction or an unrelated transaction), the Seller shall be
deemed to have received on such day a Collection in respect of
such Advance in the amount of such reduction, cancellation or
adjustment. If any Collections in respect of any Acquired
Advance is received by the Seller, the Servicer or the Purchaser
and such Collections fail to be in form suitable for deposit, and
such failure continues until the earlier to occur of (i) the
Termination Date hereunder or (ii) 30 days after such Person's
receipt thereof, the Seller shall be deemed to have received on
such day a Collection in respect of such Advance in the amount of
such Collections applicable to such Acquired Advance.
Notwithstanding the foregoing to the contrary, if, prior to the
receipt of any Collections, the Seller, the Servicer or Purchaser
is in possession of an order from a court exercising jurisdiction
over such Collections and such Person is required pursuant to
such order to return such Collections, such Collections shall not
be deemed to have been received for the purposes of this
Agreement or the other Facility Documents. If any Collections in
respect of any Acquired Advance is received by the Seller, the
Servicer or the Purchaser in a form suitable for deposit, any
portion of which represents the proceeds of any insurance claim
by the related Obligor, the Seller may request that such
Collections not be remitted to the Collection Account pursuant to
Section 2.6(a) hereof if such request is solely in an effort not
to prejudice the status of any insurance claim by the related
Obligor; provided that if such Collections have not been
deposited to the Collection on or before the earlier to occur of
(i) the Termination Date hereunder or (ii) 30 days after such
Person's receipt thereof, the Seller shall be deemed to have
received onspect of such Advance in the amount of such
Collections applicable to such Acquired Advance. If on any day
any of the representations or warranties of Section 4.1(h) is no
longer true with respect to an Advance or if the Seller has
breached its obligations under Section 5.1(j), then the Seller
shall be deemed to have received on such day a Collection of such
Advance as follows: (x) if such representation, warranty or
covenant relates to the non-existence of any Lien, the Seller
shall be deemed to have received a Collection of such Advance in
the dollar amount of the Liens attaching thereto and (y) if such
representation or warranty relates to the validity or perfection
of the transfer of such Advance under this Agreement or the
perfection of the Purchaser's security interest in any Related
Security as against the Obligor thereunder, then the Seller be
deemed to have received a Collection of such Advance in an amount
equal to the Principal Balance thereof. To the extent that any
such deemed Collection reduces the Principal Balance of such
Advance to zero, then, upon the Seller's payment to the Purchaser
of such deemed Collection, the Purchaser shall re-assign to the
Seller all of its right, title and interest in and to the
relevant Advance, the Loan Documents under which such Advance
arose and the Related Security relating thereto.
(c) On or prior to each Settlement Date the Seller
shall prepare and forward to the Purchaser, a Settlement Report
as of the close of business of the Seller on the last day of the
immediately preceding month, in substantially the form set forth
in Exhibit A.
SECTION 2.7. No Assumption. The sales and purchases
of Acquired Assets from the Seller do not constitute and are not
intended to result in a creation or an assumption by the
Purchaser of any obligation of the Seller or any other Person in
connection with the Advances or the other Acquired Assets or
under the related Loan Documents or any other agreement or
instrument relating thereto, including, without limitation, any
obligation to any Obligors. No such obligation or liability is
intended to be assumed by the Purchaser hereunder, and any such
assumption is expressly disclaimed.
SECTION 2.8. No Recourse. Except as specifically
provided in this Agreement, the sale and purchase of the Acquired
Assets from the Seller and the acquisition of any other Acquired
Assets under this Agreement shall be without recourse to the
Seller; provided that the Seller shall be liable to the Purchaser
for all representations, warranties, covenants and indemnities
made by it pursuant to the terms of this Agreement (it being
understood that such representations, warranties, covenants and
indemnities do not create any recourse to the Seller on account
of the inability of an Obligor to pay an Advance due to credit
reasons relating to such Obligor).
SECTION 2.9. True Sales. The Seller and the Purchaser
intend the transfers of Purchased Assets and Contributed Assets
hereunder to be true sales by the Seller to the Purchaser that
are absolute and irrevocable and that such transfers provide the
Purchaser with the full benefits of ownership of the Acquired
Assets, and neither the Seller nor the Purchaser intends the
transactions contemplated hereunder to be, or for any purpose to
be characterized as, loans from the Purchaser to the Seller.
SECTION 2.10. Payments and Computations, Etc. Except
as otherwise provided herein, all amounts to be paid or deposited
by the Seller or the Servicer to the Purchaser hereunder shall be
paid or deposited in accordance with the terms hereof no later
than 11:00 A.M. (New York City time) on the day when due in
lawful money of the United States of America in immediately
available funds to an account that the Purchaser or the
Collateral Agent shall from time to time specify in writing. In
the event that any payment becomes due on a date which is not a
Business Day, then such payment shall be made on the next
succeeding Business Day. The Seller shall, to the extent per-
mitted by law, pay to the Purchaser interest on all amounts not
paid or deposited when due hereunder (whether owing by the Seller
individually or as Servicer) at 2% per annum above the Base Rate,
payable on demand; provided, however, that such interest rate
shall not at any time exceed the maximum rate permitted by
applicable law. All computations of interest and other fees
hereunder shall be made on the basis of a year of 360 days for
the actual number of days (including the first but excluding the
last day) elapsed.
SECTION 2.11. Perfection of Liens; Further Assurances.
Upon the request of the Purchaser, the Seller shall, at its
expense, promptly execute and deliver all further instruments and
documents, and take all further action (including, without
limitation, the execution and filing of such financing or
continuation statements, or amendments thereto or assignments
thereof), that may be necessary or desirable, or that the
Purchaser may request, in order to (i) perfect and protect any
security interest granted or purported to be granted by an
Obligor under any Loan Document and (ii) perfect and protect any
ownership or security interest granted or purported to be granted
to the Purchaser hereunder or (iii) to enable the Purchaser to
exercise and enforce its rights and remedies hereunder with
respect to any Acquired Assets. The Seller hereby authorizes the
Purchaser to file one or more financing or continuation
statements, and amendments thereto and assignments thereof,
relative to all or any part of the Acquired Assets now existing
or hereafter arising without the signature of the Seller where
permitted by law. A carbon, photographic or other reproduction
of this Agreement or any financing statement covering the
Acquired Assets or any part thereof shall be sufficient as a
financing statement. The Seller will furnish to the Purchaser
from time to time statements and schedules further identifying
and describing the Acquired Assets and such other reports in
connection with the Acquired Assets as the Purchaser may
reasonably request, all in reasonable detail.
ARTICLE III
CONDITIONS OF PURCHASES
SECTION 3.1. Conditions Precedent to Initial Purchase.
The initial Purchase hereunder is subject to the conditions
precedent that, on or before the Effective Date, (i) each of the
conditions precedent to the execution, delivery and effectiveness
of the Credit Agreement (other than a condition precedent
relating to the effectiveness of this Agreement) shall have been
satisfied or waived, (ii) each of the parties hereto shall have
received an original copy of this Agreement duly executed by each
of the parties hereto and (iii) in addition to the capital
contributions expressly contemplated under Section 2.1(b) the
Purchaser shall have received (unless otherwise indicated)
sufficient capital in the form of cash in the amount necessary to
fund all fees and expenses then due and owing under the Credit
Agreement.
SECTION 3.2. Conditions Precedent to All Purchases.
Each Purchase (including the initial Purchase) by the Purchaser
from the Seller shall be subject to the further conditions
precedent that (a) with respect to any such Purchase, on or prior
to the date of such Purchase, the Seller shall have delivered to
the Purchaser in form and substance satisfactory to the
Purchaser, a completed Settlement Report as of the end of the
immediately preceding calendar month and containing such
additional information as may be reasonably requested by the
Purchaser; (b) on the date of such Purchase the following
statements shall be true and the Seller by accepting the cash
portion of the Purchase Price shall be deemed to have certified
that:
(i) The representations and warranties contained
in Section 4.1 are correct on and as of such day as
though made on and as of such date and
(ii) No event has occurred and is continuing, or
would result from such Purchase which constitutes a
Termination Event or would constitute a Termination
Event but for the requirement that notice be given or
time elapse or both;
and (c) the Purchaser shall have received such other approvals or
documents as the Purchaser may reasonably request.
SECTION 3.3. Effect of Payment of Purchase Price.
Upon the payment of the Purchase Price for any Purchase, (whether
in cash or through a capital contribution), title to the related
Acquired Assets shall vest in the Purchaser, whether or not the
conditions precedent to such Purchase were in fact satisfied;
provided, however, that the Purchaser shall not be deemed to have
waived any claim it may have under this Agreement for the failure
by the Seller in fact to satisfy any such condition precedent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. Representations and Warranties of the
Seller. In order to induce the Purchaser to enter into this
Agreement and to make purchases hereunder, the Seller hereby
makes the representations and warranties set forth in this
Section 4.1, in each case on and as of the date hereof, on and as
of the Effective Date and on the date of each Purchase hereunder.
(a) Due Incorporation and Good Standing. The Seller
and each of its Subsidiaries (other than the Purchaser as to whom
no such representation is made) is a corporation duly
incorporated, validly existing and in good standing under the
laws of the jurisdiction named at the beginning hereof and is
duly qualified to do business, and is in good standing, in every
jurisdiction in which the nature of its business requires it to
be so qualified, except where the failure to be so qualified
would not have a Material Adverse Effect on (i) the interests
hereunder of the Purchaser or any of its assignees, (ii) the
collectibility of any Advance, (iii) the business, properties,
operations, prospects, profits or condition (financial or
otherwise) of the Seller or any of its Subsidiaries or (iv) the
ability of the Seller or any or its Subsidiaries (individually or
as Servicer) to perform its obligations hereunder.
(b) Due Authorization and No Conflict. The execution,
delivery and performance by the Seller of this Agreement and all
agreements, instruments and documents to be delivered hereunder,
and the transactions contemplated hereby and thereby, including
the sales and contributions of the Acquired Assets hereunder, are
within the Seller's corporate powers, have been duly authorized
by all necessary corporate action, do not contravene (i) the
Seller's charter or by-laws, (ii) any law, rule or regulation
applicable to the Seller, (iii) any contractual restriction
contained in any material indenture, loan or credit agreement,
lease, mortgage, security agreement, bond, note, or other agree-
ment or instrument binding on or affecting the Seller or its
property or (iv) any order, writ, judgment, award, injunction or
decree binding on or affecting the Seller or its Subsidiaries or
its property (except where such contravention would not have a
Material Adverse Effect), and do not result in or require the
creation of any Lien upon or with respect to any of its proper-
ties (other than in favor of the Purchaser as contemplated
hereunder); and no transaction contemplated hereby requires
compliance with any bulk sales act or similar law.
(c) Governmental and Other Consents. Except for the
filing of financing statements pursuant to the UCC required to
perfect the sales of accounts and chattel paper under this
Agreement and the security interests granted under the Credit
Agreement or under the other Facility Documents and except for
consents under certain contractual agreements which have been
obtained, no authorization, consent, approval or other action by,
and no registration, qualification, designation, declaration,
notice to or filing with, any governmental authority or other
Person is or will be necessary in connection with the execution
and delivery of this Agreement or any other Facility Document to
which the Seller is a party, or any of the other documents
contemplated hereby or thereby, consummation of the transactions
herein or therein contemplated, or performance of or compliance
with the terms and conditions hereof or thereof, to ensure the
legality, validity or enforceability hereof or thereof.
(d) Enforceability of Facility Documents. Each of the
Facility Documents to which the Seller is a party have been duly
and validly executed and delivered by the Seller and constitute
the legal, valid and binding obligations of the Seller enforce-
able against the Seller in accordance with their respective
terms, except as enforceability may be limited by Debtor Relief
Laws or by general principles of equity (whether considered in a
suit at law or in equity).
(e) Financial Statements. (i) The consolidated
balance sheets of the Seller and its consolidated Subsidiaries at
February 29, 1996, and the related statements of income, retained
earnings and cash flows of the Seller and its consolidated
Subsidiaries for the fiscal year then ended, certified by
certified by nationally recognized independent public
accountants, and for the six-month period ending August 31, 1996,
fairly present the results of operations of the Seller and its
Subsidiaries for the fiscal year ended February 29, 1996 and for
the six month period ended August 31, 1996, and the other periods
therein referred to, all in accordance with GAAP consistently
applied for such periods (subject to normal year end adjustments
in the case of the February 29, 1996 statements), and since
February 29, 1996, there has been no material adverse change in
the financial condition, operations and/or business of the Seller
nor any other event or circumstance which has had a Material
Adverse Effect. Neither the Seller nor any of its Subsidiaries
has any material liabilities or obligations other than those
disclosed in the financial statements referred to above or for
which adequate reserves are reflected in such financial
statements.
(f) No Litigation. There are no proceedings or
investigations pending or, or to the best knowledge of the Seller
threatened, against or affecting the Seller or any of its
Subsidiaries, or the property of the Seller or any of its
Subsidiaries, in any court, regulatory body, administrative
agency, or other tribunal or governmental instrumentality (i)
asserting the invalidity of this Agreement or any of the other
Facility Documents, (ii) seeking to prevent the consummation of
any of the transactions contemplated by this Agreement or any of
the other Facility Documents, (iii) seeking any determination or
ruling that would adversely affect the performance by the Seller
of its obligations under this Agreement or any of the other
Facility Documents, (iv) seeking any determination or ruling that
would adversely affect the validity or enforceability of this
Agreement or any of the other Facility Documents or of the
transactions contemplated hereby and thereby, or (v) seeking any
determination or ruling that would, if adversely determined, be
reasonably likely to have a Material Adverse Effect.
(g) Use of Proceeds. No proceeds of any Purchase will
be used by the Seller to acquire any security in any transaction
which is subject to Section 13 or 14 of the Securities Exchange
Act of 1934, as amended.
(h) Perfection of Interest in Acquired Assets.
(i) Immediately prior to each Purchaser's Purchase
and/or acquisition of each Acquired Asset hereunder, the
Seller is or will be the lawful owner of, and have good
title to, such Acquired Asset free and clear of any Lien
(other than, with respect to Related Security, any Permitted
Encumbrance); and the Seller shall have made all filings and
shall have taken all other action under applicable law in
each relevant jurisdiction in order to protect and perfect
the ownership interest of the Purchaser and its successors
in all the Acquired Assets enforceable against creditors of,
and purchasers from, the Seller.
(ii) Upon each Purchase and/or acquisition by the
Purchaser of Acquired Assets hereunder, the Purchaser shall
have acquired good and valid title to and, to the extent
that Article 9 of the UCC is applicable to the Purchaser's
acquisition of any such interest, a valid and perfected
security interest in each acquired Advance and in the
Related Security, the other Acquired Assets and Collections
and with respect thereto, in each case free and clear of any
Lien (other than, with respect to Related Security, any
Permitted Encumbrance).
(iii) All Purchases of Advances and related Acquired
Assets constitute true and valid sales, and all Purchases
and contributions of Advances and related Acquired Assets
constitute true and valid transfers and assignments of all
of Seller's right, title and interest in, to and under such
Acquired Assets (and not merely a pledge of such Advances
and related Acquired Assets for security purposes),
enforceable against creditors of the Seller and no such
Acquired Assets shall constitute property of the Seller.
(iv) No effective financing statement or other
instrument similar in effect covering any Advance, the
Related Security, Collections or the other Acquired Assets
shall at any time be on file in any recording office except
such as may be filed in favor of the Purchaser (or its
assignees) in accordance with this Agreement.
(i) Accuracy of Information. All certificates,
reports, financial statements and similar writings furnished by
or on behalf of the Seller to the Purchaser or any assignee
thereof at any time pursuant to any requirement of, or in
response to any request of any such party under this Agreement or
any other Facility Document or any transaction contemplated
hereby or thereby, have been, and all such certificates, reports,
financial statements and similar writings hereafter furnished by
the Seller to such parties will be, true and accurate in every
respect material to the transactions contemplated hereby on the
date as of which any such certificate, report, financial state-
ment or similar writing was or will be delivered, and shall not
omit to state any material facts or any facts necessary to make
the statements contained therein not materially misleading.
(j) Location of Chief Executive Office and Records.
The principal place of business and chief executive office of the
Seller is located at its address set forth on the signature pages
hereof, and all other offices where the Seller maintains any
Records are listed on Exhibit D hereto. The Seller does not
operate its business or maintain the Records at any other
locations (provided that, at any time after the Effective Date,
upon 30 days' prior written notice to the Purchaser, the Seller
may relocate its principal place of business and chief executive
office, and/or the offices where the Seller maintains any of its
Records, to such other locations within the United States where
all action required by Section 5.1(f) shall have been taken and
completed).
(k) Lock-Box Accounts. The Purchaser shall have the
right to direct each Obligor with respect to an Advance that
constitutes a portion of Acquired Assets to remit payment on the
Advances directly to a Lock-Box Account. From and after the
Effective Date, the Seller will have no right, title and/or
interest to any of the Lock-Box Accounts and will maintain no
lock-box accounts in its own name for the collection of such
Advances. The account numbers of all Lock-Box Accounts, together
with the names and addresses of all the Lock-Box Banks
maintaining such Lock-Box Accounts, are specified in Exhibit F.
(l) No Trade Names. Except as described in Exhibit G,
the Seller has no trade names, fictitious names, assumed names or
"doing business as" names.
(m) Separate Identity. The Seller:
(i) acknowledges that the Purchaser is required to
be operated as an entity separate from Ag Services and
Ag Services' other Affiliates in accordance with the
requirements set forth in Section 4.01(n) of the Credit
Agreement;
(ii) confirms that it has taken all appropriate
action on its part as a shareholder to cause the
Purchaser to satisfy such requirements;
(iii) maintains its assets and those of its other
Affiliates in a manner which facilitates their
identification and segregation from those of the
Purchaser;
(iv) conducts and causes its Affiliates to conduct
all intercompany transactions with the Purchaser on
terms which the Seller reasonably believes to be on an
arm's-length basis;
(v) has not guaranteed, and has not allowed its
other Affiliates to guarantee, any obligation of the
Purchaser nor has it had any of its or their obli-
gations guaranteed by the Purchaser and neither the
Seller nor any such other Affiliate has held itself out
as responsible for debts of the Purchaser or (except
for actions by the Seller in its capacity as Servicer
under the Credit Agreement) for the decisions or
actions with respect to the business and affairs of the
Purchaser;
(vi) has not permitted the funds and assets of it
and its other Affiliates to be commingled or pooled
with the funds and assets of the Purchaser (other than
in respect of items of payment which are not material
in the aggregate and which have been mistakenly
forwarded by an Obligor directly to Ag Services or any
of Ag Services' other Affiliates);
(vii) except in its capacity as Servicer under the
Credit Agreement, has no access to the Purchaser's
deposit and other bank accounts;
(viii) maintains financial records which are
separate from those of the Purchaser;
(ix) has agreed with the Purchaser pursuant to the
terms of the Administrative Services Agreement to
allocate among themselves shared corporate operating
services and expenses which are not reflected in the
Servicing Fee (including, without limitation, the
services of shared employees, consultants and agents,
and reasonable legal and auditing expenses) on the
basis of actual use or the value of services rendered,
and otherwise on a basis reasonably related to actual
use or the value of services rendered;
(x) has not paid any incidental administrative
costs and expenses of the Purchaser not covered under
the terms of the Administrative Services Agreement;
(xi) has not, directly or indirectly, named the
Purchaser as a direct or contingent beneficiary or loss
payee on any insurance policy covering the property of
Ag Services or any of Ag Services' other Affiliates and
has entered into no agreement to name the Purchaser as
such a beneficiary or payee;
(xii) acknowledges that Triple-A, the
Administrative Agent, the Collateral Agent, the Surety,
and the Liquidity Banks are entering into the
transactions contemplated by the Credit Agreement and
the other Facility Documents in reliance on the
Purchaser's identity as a separate legal entity from Ag
Services and each of Ag Services' other Affiliates; and
(xiii) practices and adheres to all corporate
formalities required to be observed on its part as a
shareholder of the Purchaser.
(n) Taxes. The Seller has filed or caused to be filed
all Federal, state and local tax returns which are required to be
filed by it, and has paid or caused to be paid all taxes shown to
be due and payable on such returns or on any assessments received
by it, other than any taxes or assessments, the validity of which
are being contested in good faith by appropriate proceedings and
with respect to which the Seller has set aside adequate reserves
on its books in accordance with GAAP and which have not given
rise to any Liens.
(o) Solvency. The Seller (i) is not "insolvent" (as
such term is defined in 101(32)(A) of the Bankruptcy Code, (ii)
is able to pay its debts as they mature; and (iii) does not have
unreasonably small capital for the business in which it is
engaged or for any business or transaction in which it is about
to engage.
(p) No Fraudulent Conveyance. The transactions
contemplated by this Agreement and by each of the Facility
Documents are being consummated by the Seller in furtherance of
the Seller's ordinary business, with no contemplation of
insolvency and with no intent to hinder, delay or defraud any of
its present or future creditors. By its receipt of the Purchase
Prices hereunder and its ownership of the capital stock of the
Purchaser, the Seller shall have received reasonably equivalent
value for the Acquired Assets sold or otherwise conveyed to the
Purchaser under this Agreement.
(q) Software. Attached as Exhibit H is a list of all
computer software used by the Seller to administer the Advances
and other Acquired Assets. Each of the Purchaser and the
Collateral Agent, as assignee of the Purchaser, has (or will
have, concurrently with the effectiveness hereof) an enforceable
right (whether by license, sublicense or assignment) to use all
of the computer software used to account for the Acquired Assets
to the extent necessary to administer the Advances and other
Acquired Assets, such use to be subject to the terms and
conditions of any license agreement for such software between the
Seller and any third parties where applicable.
(r) Other Debt. The Seller is not in default under
any material indenture, loan or credit agreement with respect to
any Debt, the effect of which is to cause, or which would, with
the giving of notice of the lapse of time or both, permit the
holder or holders thereof to cause, such Debt to become due prior
to its stated maturity.
(s) Governmental Regulations. The Seller is not (1)
an "investment company" or a company controlled by an "investment
company" registered or required to be registered under or the
Investment Company Act of 1940, as amended, (2) a "public utility
company" or a "holding company," a "subsidiary company" or an
"affiliate" of any public utility company within the meaning of
Section 2(a)(5), 2(a)(7), 2(a)(8) or 2(a)(11) of the Public
Utility Holding Company Act of 1935, as amended, or (3) otherwise
subject to any other federal or state statute or regulation
limiting its ability or those of its Subsidiaries to incur or pay
indebtedness.
(t) ERISA. Neither the Seller nor any of its ERISA
Affiliates maintains, contributes to or has any obligation to
contribute to any Plan which could reasonably be expected to,
individually or in the aggregate, materially adversely affect the
ability of the Seller to perform its obligations under this Agrhe
Purchaser to any material liability under ERISA. No accumulated
or waived funding deficiency (as defined in Section 302(a)(2) of
ERISA or Section 412(a) of the Internal Revenue Code) exists with
respect to any Benefit Plan, and the Seller has not failed to
satisfy the minimum funding requirements under ERISA or the
Internal Revenue Code with respect to any Benefit Plan. Neither
the Seller nor any of its ERISA Affiliates has incurred any
liability to or on account of a Benefit Plan or Multiemployer
Plan pursuant to Section 515, 4062, 4063, 4064, 4201 or 4204 of
ERISA or expects to incur any liability under any of the
foregoing sections on account of the termination of participation
in or contributions to any such Plan or Multiemployer Plan.
(u) Margin Regulations. The Seller is not engaged,
principally or as one of its important activities, in the
business of extending credit for the purpose of "purchasing" or
"carrying" any "margin stock" (as each of the quoted terms is
defined or used in any of Regulations G, T, U or X of the Board
of Governors of the Federal Reserve System, as in effect from
time to time). No part of the proceeds of any of Purchase Price
has been used for so purchasing or carrying margin stock or for
any purpose which violates, or which would be inconsistent with,
the provisions of any of Regulations G, T, U or X of the Board of
Governors of the Federal Reserve System, as in effect from time
to time.
(v) Ownership of the Purchaser. The Seller directly
owns one hundred percent (100%) of the outstanding capital stock
of the Purchaser, has not sold its interest in such capital stock
and, except in connection with pledges of such capital stock
approved by the Collateral Agent in accordance with Section
5.3(k) hereof, has not granted any options or other rights to any
Person to acquire such capital stock from the Seller.
(w) Insurance. The Seller maintains insurance as is
reasonably customary and advisable for companies in the business
of making Advances and has named the Purchaser as loss payee on
all insurance policies maintained by it which relate to or
otherwise provide casualty and liability coverage with respect to
any Acquired Assets.
(x) Credit and Collection Policy. The copy of the
Credit and Collection Policy of the Seller delivered pursuant to
Section 5.1 is a true and complete copy thereof.
(y) Environmental. To the best of the Seller's
knowledge,
(i) There have been no past (other than as disclosed
to the Purchaser, the Administrative Agent and the
Collateral Agent prior to the Effective Date) and there are
no pending or threatened
(A) claims, complaints, notices or requests for
information received by the Seller or any of its
Subsidiaries or Affiliates with respect to any alleged
violation of any Environmental Law in relation to any
Related Security, or
(B) claims, complaints, notices or requests for
information to the Seller or any of its Subsidiaries or
Affiliates regarding potential liability under any
Environmental Law in relation to any Related Security;
(ii) there have been no releases (as defined in
CERCLA) of Hazardous Materials at, on or under any property
constituting Related Security;
(iii) the Seller and its Subsidiaries and Affiliates
have been issued and are in material compliance with all
permits, certificates, approvals, licenses and other
authorizations relating to environmental matters and
necessary or desirable in relation to any Related Security;
(iv) there are no underground storage tanks, active or
abandoned, on or under any Related Security that contain or
have contained any Hazardous Material;
(v) no conditions exist, at, on or under any Related
Security, with the passage of time, or the giving of notice
or both, would give rise to liability under any
Environmental Law.
(z) Reporting and Accounting Treatment. For reporting
and accounting purposes, and in its books of account and records,
the Seller will treat all Acquired Assets as the Purchaser's own
property and will cause any consolidated financial statements
prepared on its behalf to contain footnotes or other appropriate
disclosures to the effect that the Purchaser is a separate
corporate entity whose creditors have a claim on its assets prior
to those assets becoming available to its equity holders and
therefore to any creditors of Ag Services.
SECTION 4.2. Representations and Warranties Concerning
the Acquired Assets. The Seller hereby represents and warrants
with respect to each Advance, on and as of the Effective Date and
on and as of each date of each Purchase hereunder, and with
respect to the related Loan Documents, that:
(a) Eligibility. (i) On the Effective Date, each
Advance included in the Acquired Assets is, unless otherwise
identified to the Purchaser, an Eligible Advance, (ii) as of the
date of Purchase, each Advance which the Seller transfers to the
Purchaser to hereunder is, unless otherwise identified to the
Purchaser, an Eligible Advance and (iii) each such Advance
referred to in clauses (i) and (ii) above is, on each Business
Day thereafter unless otherwise identified to the Purchaser and
Servicer, an Eligible Advance.
(b) Origination. Each Eligible Advance was originated
by Ag Services in the ordinary course of its business.
(c) Lawful Assignment. No Eligible Advance nor any
related Loan Document was originated in nor is subject to the
laws of any jurisdiction the laws of which would make unlawful
the transfer of such Eligible Advance or Loan Document under this
Agreement or the grant by the Purchaser of any security interest
therein under the Credit Agreement.
(d) Compliance with Law. The requirements of any
federal, state or local law (including, without limitation,
usury, truth in lending and equal credit opportunity laws)
applicable to each Eligible Advance and Loan Documents have been
complied with.
(e) Loan Documents in Force. The Loan Documents in
respect of each Eligible Advance are in full force and effect and
have not been satisfied in whole or in part, or rescinded.
(f) Form/Governing Law. The Loan Documents in respect
of each Eligible Advance were executed in substantially one of
the forms attached to the Credit Agreement as Exhibit C thereto
except for changes required by apARTICLE V
GENERAL COVENANTS OF THE SELLER
SECTION 5.1. Affirmative Covenants of the Seller. From
the Effective Date until the later of the Termination Date or the
Collection Date, the Seller will, unless the Purchaser shall
otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply, and cause each
of its Subsidiaries to comply, in all material respects with all
applicable laws, rules, regulations and orders with respect to
it, its business and properties and all Advances and related Loan
Documents and Facility Documents to which it is a party.
(b) Preservation of Corporate Existence. Preserve and
maintain its corporate existence, rights, franchises and privil-
eges in the jurisdiction of its incorporation, and qualify and
remain qualified in good standing as a foreign corporation in
each jurisdiction except where the failure to preserve and
maintain such existence, rights, franchises, privileges and
qualifications would not materially adversely affect (i) the
interests hereunder of the Purchaser, (ii) the collectibility of
any Acquired Asset (or any portion thereof), (iii) the business,
properties, operations, prospects, profits or condition
(financial or otherwise) condition of the Seller or (iv) the
ability of the Seller (individually or as Servicer) to perform
its obligations hereunder and under the other Facility Documents
to which it is a party.
(c) Audits. At any time and from time to time upon
prior written notice to the Seller and during regular business
hours, permit the Purchaser and its designees (including the
Collateral Agent), or their respective agents or representatives,
(i) to examine and make copies of and abstracts from all Records,
and (ii) to visit the offices and properties of the Seller for
the purpose of examining such Records, and to discuss matters
relating to the Advances or the Seller's performance hereunder
with any of the officers or employees of the Seller having
knowledge of such matters. Each such audit shall be at the sole
expense of the Seller.
(d) Keeping of Records and Books of Account. Maintain
and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing the
Advances in the event of the destruction of the originals
thereof) and keep and maintain, all documents, books, records and
other information reasonably necessary or advisable for the
collection of all Advances (including, without limitation,
records adequate to permit the daily identification of all
Collections of and adjustments to each Advance).
(e) Performance and Compliance with Advances and Loan
Documents. At its expense timely and fully perform and comply,
in all material respects, with all material provisions, covenants
and other promises required to be observed by it under the Loan
Documents.
(f) Location of Records. Keep its chief place of
business and chief executive office, and the offices where it
keeps the Records, at the address(es) of the Seller referred to
in Section 4.1(j), or, in any such case, upon 30 days' prior
written notice to the Purchaser, at such other locations within
the United States where all action required by Section 2.11 shall
have been taken and completed.
(g) Credit and Collection Policies. Comply in all
material respects with its Credit and Collection Policy attached
hereto as Exhibit B in regard to each Advance and the related
Loan Documents.
(h) Collections. At the direction of the Purchaser,
instruct all Obligors to cause all Collections to be deposited
directly to a Lock-Box Account and if the Seller shall receive
any Collections (including, without limitation, any Collections
deemed to have been received pursuant to Section 2.6), the Seller
shall hold such Collections in trust for the benefit of the
Purchaser and remit such Collections to the Purchaser by
depositing such Collections into the Collection Account or a
Lock-Box Account, if such Collections are in a form suitable for
deposit, otherwise by remitting such Collections in the form
received, to the Servicer, in either case, within one Business
Day following Seller's receipt thereof.
(i) Compliance with ERISA. Establish, maintain and
operate all Plans to comply in all material respects with the
provisions of ERISA, the IRC, and all other applicable laws, and
the regulations and interpretations thereunder.
(j) Perfected Security Interest under Loan Documents.
Take such action with respect to each Advance as is necessary to
ensure that the Purchaser maintains, as against the Obligor
thereunder, a perfected security interest in any Related Security
relating thereto free and clear of Liens (other than Permitted
Encumbrances).
(k) Maintenance of Insurance. Maintain insurance
with respect to all of its property and maintain liability
insurance so that the representations and warranties set forth in
Section 4.1(w) shall remain true and correct at all times.
(l) Separate Identity. Take all actions required to
maintain the Purchaser's status as a separate legal entity.
Without limiting the foregoing, the Seller shall:
(i) except in its capacity as Servicer under the Credit
Agreement and to the extent provided thereunder, not conduct
any business of the Purchaser, nor make any communications
to third parties (including all invoices (if any), letters,
checks and other instruments) on behalf of the Purchaser in
the name of the Seller or any other Affiliate, nor refer to
the Purchaser as a division; and require that its employees,
if any, when conducting the business of the Purchaser,
identify themselves as such and not as employees of the
Seller or any other Affiliate of the Seller (including,
without limitation, by means of providing appropriate
employees with business or identification cards identifying
such employees as the Purchaser's employees);
(ii) not compensate, and not allow any of its other
Affiliates to compensate, any employees, consultants or
agents of the Purchaser directly or indirectly except to the
extent provided under the Administrative Services Agreement
and, to the extent any employee, consultant or agent of the
Seller is also an employee, consultant or agent of any
Affiliate of the Purchaser, allocate the compensation of
such employee, consultant or agent between the Seller and
the Purchaser on a basis which reflects the respective
services rendered to the Seller and the Purchaser (provided
that any fees and expenses payable to the Custodian under
the Custodial Agreement shall be the responsibility of the
Servicer to be paid out of its Servicing Fee);
(iii) (A) not, and not allow any of its other
Affiliates to, pay the Purchaser's incidental administrative
costs and expenses not covered under the terms of the
Administrative Services Agreement, (B) allocate, and cause
all of its other Affiliates to allocate, all other shared
overhead expenses (including, without limitation, telephone
and other utility charges, the services of shared employees,
consultants and agents, and reasonable legal and auditing
expenses) which are not reflected in the Servicing Fee, and
other items of cost and expense shared between the Seller
and the Purchaser, pursuant to the terms of the
Administrative Services Agreement, on the basis of actual
use to the extent practicable and, to the extent such
allocation is not practicable, on a basis reasonably related
to actual use or the value of services rendered, and (C)
allocate, and cause all of its other Affiliates to allocate,
taxes on the basis set forth in the Administrative Services
Agreement;
(iv) take all actions reasonably required on its part
to assure that the Purchaser has at all times at least two
"Independent Directors" as required under the Credit
Agreement, and has at least one officer responsible for
managing its day-to-day business by or under the direction
of its board of directors;
(v) maintain its, and cause each of its other
Affiliates to maintain their, books and records separate
from those of the Purchaser;
(vi) ensure that any consolidated financial statements
of Ag Services have notes to the effect that the Purchaser
is a separate corporate entity whose creditors have a claim
on its assets prior to those assets becoming available to
its equity holders and therefore to any creditors of Ag
Services;
(vii) not commingle, nor permit any of its other
Affiliates to commingle, any of their funds or other assets
with those of the Purchaser (other than in respect of items
of payment which are not material in the aggregate and which
have been mistakenly forwarded by an Obligor directly to Ag
Services or any of its other Affiliates), and not to hold
any Acquired Assets in any manner that would create an
appearance that such assets belong to Ag Services or any
such Affiliate, not become an account party to any bank
accounts or other depository accounts of the Purchaser nor
make any deposits or withdrawals from any such accounts;
(viii) not pay, nor permit any of its other Affiliates
to pay, the Purchaser's operating expenses (except pursuant
to allocation arrangements that comply with the requirements
of subsection (ii) or (iii) of this Section 5.1(l));
(ix) not guarantee, nor permit any of its other
Affiliates to guarantee, any obligation of the Purchaser
nor have any of its or their obligations guaranteed by the
Purchaser;
(x) otherwise take such actions as are necessary on its
part to ensure that all corporate procedures required by the
Purchaser's Certificate of Incorporation and by-laws are
duly and validly taken;
(xi) not, and not permit any of its other Affiliates
to, advance funds or other assets to, or commit to advance
funds or other assets to the Purchaser (other than by way of
payments in respect of a Purchase under this Agreement,
contribution to capital or the payment of other obligations
owed to the Purchaser hereunder;
(xii) respond to any inquiries with respect to
ownership of an Acquired Asset by stating that the Purchaser
is the owner of such Acquired Asset, and that an interest in
such Acquired Asset has been granted to the Collateral Agent
for the benefit of itself, the Administrative Agent, Triple-
A and the Surety;
(xiii) on or before May 31 of each year, beginning in
1997, deliver to the Collateral Agent as assignee of the
Purchaser an Officer's Certificate stating that the Seller
has, during the preceding year, observed all of the
requisite corporate formalities and conducted its business
and operations in such a manner as required for the
Purchaser to maintain its separate corporate existence from
any other entity; and
(xiv) take such other actions as are necessary on its
part to ensure that the facts and assumptions set forth in
the non-consolidation opinion rendered in connection with
Credit Agreement remain true and correct at all times.
(m) Taxes. File or cause to be filed, and cause each
of its Subsidiaries with whom it shares consolidated tax liabil-
ity to file, all federal, state and local tax returns which are
required to be filed by it, except where the failure to file such
returns could not reasonably be expected to have a material
adverse effect on the collectibility of any Acquired Assets (or
any portion thereof) or the ability of the Seller to perform its
obligations hereunder or under any other Facility Document to
which it is a party or which could otherwise be reasonably
expected to expose the Purchaser to a material liability. The
Seller shall pay or cause to be paid all taxes shown to be due
and payable on such returns or on any assessments received by it,
other than any taxes or assessments, the validity of which are
being contested in good faith by appropriate proceedings and with
respect to which the Seller or the applicable subsidiary shall
have set aside adequate reserves on its books in accordance with
GAAP and which proceedings could not reasonably be expected to
have a material adverse effect on the collectibility of any
Acquired Assets or the ability of the Seller to perform its
obligations hereunder or under any other Facility Document to
which it is a party or which could otherwise be reasonably
expected to expose the Purchaser to a material liability.
(n) Segregation of Collections. Prevent the deposit
into any Collection Account or Lock-Box Accounts of any funds
other than Collections in respect of the Acquired Assets and, to
the extent that any such funds are nevertheless deposited into
any of such accounts, promptly identify any such funds to the
Servicer for segregation and remittance to the owner thereof.
(o) Custodian. Within five (5) Business Days after
each Purchase or other transfer of Acquired Assets by the Seller
to the Purchaser, the Seller shall deliver the Primary Custodial
Documents (or cause to be delivered) directly to the Custodian
for the benefit of the Collateral Agent pursuant to the Custodial
Agreement. The Custodian shall hold, maintain and keep custody
of all such Loan Documents and other documentation as more fully
described in the Credit Agreement and the Custodial Agreement.
The Seller shall at all times comply with the terms of, and its
obligations under, the Custodial Agreement, and shall not enter
into any modification, amendment or supplement of or to, and
shall not terminate, the Custodial Agreement without the
Purchaser's prior written consent.
(p) No Release. The Seller shall not take any action
and shall use its best efforts not to permit any action to be
taken by others that would release any Person from any of such
Person's covenants or obligations under any Contract or other
document, instrument or agreement included in the Acquired
Assets, or which would result in the amendment, hypothecation,
subordination, termination or discharge of, or impair the
validity or effectiveness of, any such Contract or other
document, instrument or agreement, except as expressly provided
in this Agreement, the Credit Agreement or such other instrument
or document.
SECTION 5.2. Reporting Requirements of the Seller.
From the Effective Date until the later of the Termination Date
or the Collection Date, the Seller will, unless the Purchaser
shall otherwise consent in writing, furnish to the Purchaser:
(a) as soon as available, and in any event not later
than the earlier of (i) 50 days following the end of each
quarterly accounting period or (ii) 10 days following the filing
of a Form 10-Q, if any, with the Securities and Exchange
Commission, unaudited consolidated statements of income and cash
flows for Ag Services and its Subsidiaries for the period from
the beginning of the current fiscal year to the end of such
quarterly period, and a consolidated balance sheet of
Subsidiaries as at the end of such quarterly period, setting
forth in each case figures for the corresponding period in the
preceding fiscal year, all in reasonable detail and certified by
the authorized financial officer of Ag Services, as applicable,
subject to changes resulting from normal year-end adjustments,
together with a statement from such officer setting forth in
reasonable detail and certifying such calculations as are
necessary for the Purchaser to determine whether a Termination
Event under Section 7.1(h) of this Agreement with respect to the
financial performance of Ag Services shall have occurred and be
continuing;
(b) as soon as practicable, and in any event not later
than the earlier of (i) 95 days following the end of each annual
accounting period or (ii) within 10 days following the filing of
a Form 10-K, if any, with the Securities and Exchange Commission
audited consolidated statements of income and cash flows for Ag
Services and its Subsidiaries for such year, and a consolidated
balance sheet of Subsidiaries as at the end of such year, setting
forth in each case corresponding figures from the preceding
annual financial statements, all in reasonable detail and
certified by a firm of nationally recognized independent public
accountants;
(c) to the extent not covered in subsections (a) and
(b) above, as soon as practicable and in any event within ten
(10) days after such filing, any financial reports filed by Ag
Services with the Securities and Exchange Commission;
(d) as soon as possible and in any event within five
Business Days after the occurrence of each Termination Event or
Unmatured Termination Event, the statement of the chief financial
officer of the Seller setting forth details of such Termination
Event or Unmatured Termination Event and the action which the
Seller proposes to take with respect thereto;
(e) promptly after the filing or receiving thereof,
copies of all reports and notices with respect to any Reportable
Event defined in Article IV of ERISA which the Seller or any
Affiliate files under ERISA with the IRS or the PBGC or the DOL
or which the Seller receives from the PBGC;
(f) as soon as possible and in any event within two
Business Days after an Authorized Officer of the Seller has
knowledge thereof, written notice that describes in reasonable
detail any event or occurrence which, individually or in the
aggregate for all such events or occurrences, has had, or that
the Seller, in its reasonable good faith judgment determines
could reasonably be expected to have, a Material Adverse Effect;
(g) as soon as possible and in any event within two
Business Days after an Authorized Officer of the Seller has
knowledge thereof, written notice of (i) any litigation,
investigation or proceeding of the type described in Section
4.1(f) not previously disclosed to the Purchaser and (ii) any
material adverse development that has occurred with respect to
any such previously disclosed litigation, investigation or
proceeding;
(h) as soon as possible and in any event within ten
(10) Business Days after receipt thereof by an Authorized Officer
of the Seller, notice and copies of all written claims,
complaints, notices, actions, proceedings, requests for
information or inquiries relating to compliance with
Environmental Laws in relation to the Related Security;
(i) together with the financial statements to be
delivered under clauses (a) and (b) above, a certificate of the
chief executive officer or chief financial officer of the Seller
to the effect that no Termination Event or Unmatured Termination
Event shall have occurred and be continuing or, if any such event
shall have occurred and be continuing, specifying in reasonable
detail the nature thereof and the action taken or proposed to be
taken with respect thereto; and
(j) promptly, from time to time, such other
information, documents, records or reports respecting the
Acquired Assets or the condition or operations, financial or
otherwise, of the Seller, in each case as the Purchaser may from
time to time reasonably request.
SECTION 5.3. Negative Covenants of the Seller. From
the Effective Date until the later of the Termination Date or the
Collection Date, the Seller will not, without the written consent
of the Purchaser:
(a) Sales, Liens, Etc. Against Advances and Acquired
Assets. Sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist, any Lien
(other than the Primary Lien and any Permitted Encumbrances) upon
or with respect to, any Acquired Advance or other Acquired Asset,
or any interests therein, or upon or with respect to any Lock-Box
Account or Collection Account, or assign any right to receive
income in respect thereof. The Seller shall immediately notify
the Purchaser of the existence of any Lien on any Acquired
Advance or any other Acquired Asset (other than the Primary Lien
or a Permitted Encumbrance), and the Seller shall defend the
right, title and interest of the Purchaser and its assigns in, to
and under the Acquired Advances and all other Acquired Assets,
against all claims of third parties (other than those created by
the Purchaser under the Credit Agreement).
(b) Extension or Amendment of Advances. Extend, amend
or otherwise modify, the terms of any Advance, or amend, modify
or waive, any term or condition of any Loan Document related
thereto, except to the extent that the Seller, in its capacity as
Servicer, may make such amendments in accordance with the Credit
and Collection Policy or as otherwise permitted under Article VI
hereof.
(c) Change in Business or Credit and Collection
Policy. Without the prior written consent of the Collateral
Agent, make any material change in the character of its business
or make any change in the Credit and Collection Policy, which
change would, in either case, impair the collectibility of any
Acquired Assets or allow for the origination of Advances under
credit standards less stringent than those applicable to Advances
originated prior to either such change.
(d) Change in Payment Instructions to Obligors. (i)
Make any change in such instructions to Obligors regarding
payments to be made to the Purchaser or payments to be made to
any Lock-Box Bank or (ii) add or terminate any bank as a Lock-Box
Bank from those listed in Exhibit F unless the Purchaser shall
have received (A) ten Business Days' prior notice of such
addition, termination or change and (B) prior to the effective
date of such addition, termination or change, (x) executed copies
of Lock-Box Agreements executed by each new Lock-Box Bank and
(y) copies of all agreements and documents signed by the Seller
or the respective Lock-Box Bank with respect to any new Lock-Box
Account.
(e) Merger Etc. Sell any shares of any class of the
Purchaser's capital stock to any Person or consolidate with or
merge into or with any other corporation, or purchase or
otherwise acquire all or substantially all of the assets or
capital stock, or other ownership interest of, any Person or
sell, transfer, lease or otherwise dispose of all or
substantially all of its assets to any Person, except for the
sale of Purchased Assets under this Agreement.
(f) Change in Location; Change in Corporate Name. The
Seller will not (x) change its principal place of business or
chief executive office from the location referred to in such
Section 9.2 hereof, (y) change its name, identity or corporate
structure or (z) change the location of its Records relating to
the Collateral from the locations listed on Exhibit D, unless in
any such event the Seller shall have given the Purchaser at least
thirty (30) days' prior written notice thereof and shall have
taken all action necessary or reasonably requested by the
Purchaser to amend its existing financing statements and
continuation statements (whether filed hereunder or under the
Credit Agreement in favor of the Collateral Agent) so that they
are not misleading and to file additional financing statements in
all applicable jurisdictions to perfect the Liens of the
Collateral Agent on behalf of itself, the Administrative Agent,
Triple-A and the Surety in all of the Acquired Assets in which a
Lien has been Granted under the Credit Agreement.
(g) ERISA Matters. (i) Engage or permit any ERISA
Affiliate to engage in any prohibited transaction for which an
exemption is not available or has not previously been obtained
from the DOL; (ii) permit to exist any accumulated funding
deficiency, as defined in Section 302(a) of ERISA and Section
412(a) of the IRC, or funding deficiency with respect to any
Benefit Plan other than a Multiemployer Plan; (iii) fail to make
any payments to any Multiemployer Plan that the Seller or any
ERISA Affiliate may be required to make under the agreement
relating to such Multiemployer Plan or any law pertaining
thereto; (iv) terminate any Benefit Plan so as to result in any
liability; or (v) permit to exist any occurrence of any
reportable event described in Title IV of ERISA which represents
a material risk of a liability of the Seller or any ERISA
Affiliate under ERISA or the IRC.
(h) Accounting Treatment. Prepare any financial
statements or other statements which shall account for the
transactions contemplated by this Agreement in any manner other
than as the sale of, or a capital contribution of, the Acquired
Assets by the Seller to the Purchaser (it being understood that
non-recognition of such transaction due to the application of
consolidated financial reporting principles under GAAP or the
filing of tax returns on a consolidated basis shall not
constitute a violation of this covenant).
(i) Certificate of Incorporation. Cause the Purchaser
to amend its Certificate of Incorporation or By-laws in any
manner which would require the consent of the Purchaser's
independent director or directors, without the Collateral Agent's
prior written consent.
(j) Pledge of Capital Stock of the Purchaser. Without
the prior written consent of the Collateral Agent, pledge or
otherwise assign any interest in the capital stock of the
Purchaser.
ARTICLE VI
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE ACQUIRED ASSETS
SECTION 6.1. Rights of the Purchaser. With respect to
the Acquired Assets, at any time:
(a) The Purchaser may notify the Obligors of the
Advances, or any of them, of the Purchaser's ownership
interest in Acquired Assets and direct such Obligors,
or any of them, that payment of all amounts payable
under any Advance be made directly to the Purchaser or
its designee (including, without limitation, the
Collateral Agent).
(b) The Seller shall, at the Collateral Agent's
or Purchaser's request and at the Seller's expense,
from and after the Termination Date direct that
payments be made directly to the Purchaser or its
designee (including, without limitation, the Collateral
Agent).
(c) The Seller shall, at the Purchaser's request,
assemble all Records which the Purchaser reasonably
believes are necessary or appropriate for the
administration and enforcement of the Acquired Assets,
and shall promptly make the same available to the
Purchaser at a place selected by the Purchaser or its
designee.
(d) The Seller hereby authorizes the Purchaser and
the Collateral Agent to take any and all steps in the
Seller's name and on behalf of the Seller necessary or
desirable, in the determination of the Purchaser and/or
the Collateral Agent, to collect all amounts due under
any and all Acquired Assets or related Advances,
including, without limitation, endorsing the Seller's
name on checks and other instruments representing
Collections and enforcing such Advances and the related
Loan Documents.
(e) The Purchaser shall have no obligation to account
for, to replace, to substitute or to return any Acquired
Asset to the Seller. Except for payments of the Purchase
Price specifically provided for in this Agreement, the
Purchaser shall have no obligation to account for, or to
return, Collections, or any interest collected pursuant
thereto, to the Seller.
(f) The Purchaser shall have the unrestricted right to
further assign, transfer, deliver, hypothecate, subdivide or
otherwise deal with the Acquired Assets, and all of the
Purchaser's right, title and interest in, to and under this
Agreement, on whatever terms the Purchaser shall determine,
whether pursuant to the Credit Agreement or otherwise.
(g) As between the Seller and the Purchaser, the
Purchaser shall have the sole right to retain any gains or
profits created by buying, selling or holding the Acquired
Assets.
SECTION 6.2. Further Action Evidencing Transfers. The
Seller agrees that from time to time, at its expense, it will
promptly execute and deliver all further instruments and docu-
ments, and take all further action that the Purchaser may
reasonably request in order to perfect, protect or more fully
evidence the Purchaser's interest in the Acquired Assets, or to
enable the Purchaser to exercise or enforce any of its rights
hereunder or under any related document. Without limiting the
generality of the foregoing, the Seller will xxxx its master data
processing records evidencing such Acquired Assets with a legend,
acceptable to the Purchaser, evidencing that the Purchaser has
acquired an ownership interest therein as provided in this Agree-
ment and, upon the request of the Purchaser, will execute and
file such financing or continuation statements, or amendments
thereto or assignments thereof, and such other instruments or
notices, as may be necessary or appropriate or as the Purchaser
may reasonably request. The Seller hereby authorizes the
Purchaser to file one or more financing or continuation state-
ments, and amendments thereto and assignments thereof, relative
to all or any of the Acquired Assets now existing or hereafter
arising without the signature of the Seller where permitted by
law. A carbon, photographic or other reproduction of this
Agreement or any financing statement covering the Acquired
Assets, or any part thereof, shall be sufficient as a financing
statement. If the Seller fails to perform any of its agreements
or obligations under this Agreement, the Purchaser may (but shall
not be required to) itself perform, or cause performance of, such
agreement or obligation, and the expenses of the Purchaser
incurred in connection therewith shall be payable by the Seller
upon the Purchaser's demand therefor; provided, however, prior to
the Termination Date, prior to taking any such action, the
Purchaser shall give notice of such intention to the Seller and
provide the Seller with a reasonable opportunity to take such
action itself.
SECTION 6.3. Responsibilities of the Seller. Anything
herein to the contrary notwithstanding, the Seller shall
(i) perform all of its obligations under the Loan Documents
relating to the Acquired Assets to the same extent as if such
Loan Documents had not been transferred to the Purchaser
hereunder, and the exercise by the Purchaser or its assigns of
their respective rights hereunder shall not relieve Seller from
such obligations and (ii) pay when due any taxes, including
without limitation, sales, excise and personal property taxes
payable in connection with the Acquired Assets, unless the Seller
is contesting the payment of such taxes in good faith and by
appropriate proceedings and with respect to which no Lien has
been asserted or filed.
SECTION 6.4. Application of Collections. Any payment
by an Obligor in respect of any Advance of such Obligor included
in the Acquired Assets or other indebtedness owed by it to the
Seller shall, except as otherwise specified by such Obligor or
otherwise required by contract or law, be applied, first, as a
Collection of such Advance and second, to any other indebtedness
of such Obligor to the Seller.
SECTION 6.5. Power of Attorney Relating to Loan
Documents. The Seller hereby grants to the Purchaser an
irrevocable power of attorney, with full power of substitution,
coupled with an interest, at any time upon and after the
Termination Date, to terminate on behalf of the Seller any Loan
Document, in accordance with the terms thereof, with an Obligor
that is an Obligor with respect to any Acquired Assets.
ARTICLE VII
TERMINATION EVENTS
SECTION 7.1. Termination Event. If any of the
following events ("Events of Termination") shall occur:
(a) The occurrence of a Servicer Default; or
(b) The Seller shall fail to forward or make any
payment or deposit to be made by it when due hereunder,
which failure shall remain unremedied for three Business
Days after written notice from the Purchaser; or
(c) The Seller (i) shall fail to perform or observe
any term, covenant or agreement contained in Section 5.3(a),
5.3(d), 5.3(e), or 5.3(i), or (ii) shall fail to perform or
observe any other term, covenant or agreement contained in
Sections 5.1 or 5.3 which failure described in this clause
(ii) shall remain unremedied for five Business Days after
written notice from the Purchaser; or
(d) Any representation or warranty made or deemed to
be made by the Seller or any of its officers or employees,
under or in connection with this Agreement or any other
Facility Document, shall prove to have been false or
incorrect in any material respect when made or deemed made;
or
(e) The Seller shall fail to perform or observe any
other term, covenant or agreement contained in this
Agreement or in any other Facility Document on its part to
be performed or observed and any such failure shall remain
unremedied for five Business Days after written notice from
the Purchaser; or
(f) The Purchaser shall cease or otherwise fail to
have good and valid title to (or, to the extent that Article
9 of the UCC is applicable to the Purchaser's acquisition
thereof, a valid perfected security interest in) the
Acquired Assets; or
(g) (i) An Insolvency Event shall occur with respect
to the Seller or any of its Subsidiaries; or (ii) either of
the Seller or any of its Subsidiaries shall take any
corporate action to authorize the filing of any such
Insolvency Proceeding; or
(h) Any "Event of Default" shall occur under the
Credit Agreement;
then, and in any such event, the Purchaser may by notice to the
Seller declare the Termination Date to have occurred, except
that, in the case of any event described in clause (i) of
subsection (g) above, the Termination Date shall be deemed to
have occurred automatically upon the occurrence of such event.
Upon any such declaration or automatic occurrence, the Purchaser
shall have, in addition to all other rights and remedies under
this Agreement or otherwise, all other rights and remedies
provided under the UCC of the applicable jurisdiction and other
applicable laws, which rights shall be cumulative.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1. Indemnities by the Seller. Without
limiting any other rights which the Purchaser may have hereunder
or under applicable law, the Seller hereby agrees to defend and
indemnify the Purchaser, its successors and assigns, and their
respective officers, directors, employees and agents (each, an
"Indemnified Party") from and against any and all costs,
expenses, losses, damages, claims and liabilities (including
reasonable attorneys' fees) (all of the foregoing being
collectively referred to as "Indemnified Amounts") arising out of
or resulting from this Agreement, any other Facility Document, or
any transaction contemplated hereby or thereby, or from any
action taken, or failure to take any action by the Seller with
respect to this Agreement or any other Facility Document,
including, but not limited to, any and all costs, expenses,
losses, damages, claims and liabilities, including reasonable
fees and expenses of counsel and expenses of litigation, arising
as a result of or otherwise in connection with:
(i) any breach by the Seller of any of its
representations, warranties, covenants or other obligations
under this Agreement or any other Facility Document;
(ii) the failure to vest in the Purchaser good and
valid title to (or, to the extent Article 9 of the UCC is
applicable to the Purchaser's acquisition thereof, a first
priority perfected ownership interest in) the Acquired
Assets, free and clear of any Lien created by or through the
Seller (other than Permitted Encumbrances and any Liens
created by the Purchaser under the Credit Agreement);
(iii) the failure to have filed, or any delay in
filing, financing statements or other similar instruments or
documents under the UCC of any applicable jurisdiction or
other applicable laws with respect to perfection of the
Purchaser's interests in any Acquired Assets;
(iv) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to
the payment of any Advance (including, without limitation, a
defense based on such Advance not being a legal, valid and
binding obligation of the Obligor thereof, enforceable
against it in accordance with its terms), or any other claim
resulting from the sale of an Advance;
(v) any products liability, consumer liability,
personal injury, any related claim by any third party, or
other claim arising out of or in connection with any
Advance, Related Security, this Agreement or any other
Facility Document;
(vi) the commingling of Collections at any time with
any other funds;
(vii) any failure of the Seller to perform its duties
or obligations in accordance with applicable law;
(viii) any action or omission by the Seller, reducing
or impairing the rights of the Purchaser with respect to any
Advance, or the value of any Advance (including, without
limitation, any cancellation or modification of any Advance
by the Seller);
(ix) any investigation, litigation or proceeding
related to this Agreement or the use of proceeds of the
Purchase Price or in respect of any Advance; or
(x) any environmental liability which may arise or be
incurred (including, without limitation, with respect to
investigation, laboratory and consultants' fees) by reason
of the ownership of, or any Lien on, any Related Security or
other Collateral; or
(xi) any taxes which may at any time be asserted with
respect to the Purchase of any Advances by the Purchaser, or
any Grant by the Purchaser of an interest in any Acquired
Assets to the Collateral Agent, including, without
limitation, any sales, transfer, mortgage, gross receipts,
general corporation, personal property, privilege or license
taxes and costs, expenses and reasonable counsel fees in
defending against the same;
excluding, however, (a) Indemnified Amounts to the extent
resulting from gross negligence or willful misconduct on the part
of such Indemnified Party, (b) recourse for uncollectible
Advances or (c) any income or franchise taxes (or any interest,
penalties or additions to tax with respect thereto) incurred by
the Purchaser arising out of or as a result of this Agreement.
SECTION 8.2. Operation of Indemnities. Any indemnifi-
cation under this Article VIII shall include, without limitation,
reasonable fees and expenses of counsel and expenses of
litigation. If the Seller has made any indemnity payments to the
Purchaser pursuant to this Article VIII and if the Purchaser
thereafter collects any of such amounts from any other party to
whom it has forwarded such payments, the Purchaser shall promptly
repay such amounts collected to the Seller without interest.
Notwithstanding anything to the contrary in this Agreement,
solely for purposes of the indemnification obligations set forth
in Section 8.1, any representations, warranties and covenants
made by the Seller in this Agreement or the other Facility
Documents which are qualified by or limited to events or
circumstances which have, or are reasonably likely to have,
given rise to a Material Adverse Effect, or which are otherwise
qualified or limited by concepts of materiality, shall not be
deemed to be so qualified or limited.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Amendments, Etc. No amendment to or
waiver of any provision of this Agreement nor consent to any
departure by the Seller shall in any event be effective unless
the same shall be in writing and signed by (i) the parties hereto
and the Collateral Agent (with respect to an amendment) or
(ii) the Purchaser and the Collateral Agent (with respect to a
waiver or consent by the Purchaser) or the Seller (with respect
to a waiver or consent by it), as the case may be, and then such
waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. This
Agreement contains a final and complete integration of all prior
expressions by the parties hereto with respect to the subject
matter hereof and shall constitute the entire agreement (together
with the exhibits hereto) among the parties hereto with respect
to the subject matter hereof, superseding all prior oral or
written understandings.
SECTION 9.2. Notices, Etc. All notices and other
communications provided for hereunder shall, unless otherwise
stated herein, be in writing (including telex communication and
communication by facsimile copy) and mailed, telexed, transmitted
or delivered, as to each party hereto, at its address set forth
under its name on the signature pages hereof or at such other
address as shall be designated by such party in a written notice
to the other parties hereto. All such notices and communications
shall be effective, upon receipt, or in the case of delivery by
mail, five days after being deposited in the mails, or, in the
case of notice by telex, when telexed against receipt of answer
back, or in the case of notice by facsimile copy, when verbal
communication of receipt is obtained, in each case addressed as
aforesaid, except that notices and communications pursuant to
Article II shall not be effective until received.
SECTION 9.3. No Waiver; Remedies. No failure on the
part of the Purchaser to exercise, and no delay in exercising,
any right hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any right hereunder preclude
any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 9.4. Binding Effect; Assignability. (a) This
Agreement shall be binding upon the Seller, the Purchaser and
their respective successors and permitted assigns (which
successors and assigns shall include a trustee in bankruptcy),
and shall inure to the benefit of each such Person, and each of
their respective successors and permitted assigns. The Seller
may not delegate any of its obligations hereunder or any interest
herein without the prior written consent of the Purchaser. The
Purchaser may at any time assign all or any portion of its rights
and obligations hereunder without the prior written consent of
the Seller.
(b) Without limiting the foregoing, the Seller hereby
acknowledges that, contemporaneously herewith, the Purchaser is
Granting, assigning, setting over and otherwise conveying to the
Collateral Agent as security all of the Purchaser's right, title
and interest in, to and under the Acquired Assets, this Agreement
and all of the other Facility Documents to which the Seller is a
party and all of the Purchaser's rights, remedies, powers and
privileges, and all claims of the Purchaser against the Seller,
under or with respect to this Agreement and the other Facility
Documents (whether arising pursuant to the terms of this
Agreement or otherwise available at law or in equity), including,
without limitation, (i) the right to determine whether or not a
Termination Event or Unmatured Termination Event has occurred and
is continuing, (ii) the right of the Purchaser, at any time, to
receive all notices hereunder and to enforce this Agreement
against the Seller and the obligations of the Seller hereunder,
(iii) the right to appoint a successor to the Servicer at the
times and upon the conditions set forth in the Credit Agreement,
and (iv) the right, at any time, to give or withhold any and all
consents, requests, notices, directions, approvals, demands,
extensions or waivers under or with respect to this Agreement,
any other Facility Documents or any obligations of the Seller
hereunder and thereunder, all of which rights, remedies, powers,
privileges and claims may be exercised and/or enforcedsame extent
as the Purchaser may do. The Seller further acknowledges that
Triple-A has assigned to the providers of liquidity support to
Triple-A, the right to exercise, in the place and stead of the
Purchaser or Triple-A (as applicable), certain of the actions and
rights of such Person under this Agreement and under certain
related documents, instruments and agreements, and the parties
hereto irrevocably consent to any such assignments. The Seller
acknowledges and agrees that, as assignees of the Purchaser's
rights hereunder, the Collateral Agent, Triple-A, the Surety and
the Administrative Agent are third party beneficiaries of this
Agreement and the other Facility Documents to which the Seller is
a party, and may rely on the Seller's representations, warranties
and indemnities made herein and therein as if made directly to
them, including without limitation, the indemnities made in
Section 9.7.
(c) The Seller hereby agrees (i) to execute all
agreements, instruments and documents, and to take all other
action, that the Purchaser or the Collateral Agent reasonably
determines is necessary or appropriate to evidence its consent
described in paragraph (b) above and (ii) to give to the
Collateral Agent, at the time and in the manner given to the
Purchaser, copies of all notices, consents, requests and other
writings to be given to the Purchaser by the Seller under this
Agreement. To the extent that the Seller has granted Purchaser
any powers of attorney under this Agreement, the Seller agrees
that the Collateral Agent may exercise all such powers of
attorney on behalf of the Purchaser as provided in the Credit
Agreement and the Seller agrees to cooperate fully with the
Collateral Agent in the exercise of such rights.
(d) This Agreement shall create and constitute the
continuing obligations of the parties hereto in accordance with
its terms, and shall remain in full force and effect until such
time, after the Termination Date, as the Collection Date shall
occur; provided, however, that the rights and remedies with
respect to any breach of any representations, warranties or
covenants made by the Seller, and the indemnification and payment
provisions of Article VIII and Section 9.7, shall be continuing
and shall survive any termination of this Agreement; provided
further, however, that to the extent that a payment, transfer or
deposit is made by or on behalf of the Seller to the Purchaser
which payment, transfer or deposit (or any part thereof) is
subsequently invalidated, declared to be fraudulent or
preferential or set aside and required to be repaid to any of the
Seller or its respective estate, trustee or receiver or any other
Person, under any bankruptcy law, state or federal law, common
law or equitable cause, then to the extent of such repayment, all
rights and obligations of the parties hereunder in respect of
such payment, transfer or deposit shall be reinstated and con-
tinued in full force and effect as if such initial payment,
transfer or deposit had never been made.
SECTION 9.5. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY OR
PERFECTION OF THE INTERESTS OF THE PURCHASER IN THE ACQUIRED
ASSETS OR REMEDIES HEREUNDER OR THEREUNDER, IN RESPECT THEREOF,
ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE
OF NEW YORK.
SECTION 9.6. CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL. THE SELLER HEREBY AGREES TO THE JURISDICTION OF ANY
FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK, AND WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT
ALL SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED
TO THE SELLER AT THE ADDRESS SET FORTH ON THE SIGNATURE PAGE
HEREOF AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE
(5) DAYS AFTER THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S.
MAILS, POSTAGE PREPAID, AND, BY SERVICE UPON CT CORPORATION
SYSTEM, 0000 XXXXXXXX, XXX XXXX, XXX XXXX 00000, WHICH THE SELLER
HEREBY IRREVOCABLY APPOINTS AS ITS AGENT FOR THE PURPOSE OF
ACCEPTING SERVICE OF PROCESS. THE SELLER HEREBY WAIVES ANY RIGHT
TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE SELLER AND
THE PURCHASER ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH
THIS AGREEMENT. INSTEAD, ANY DISPUTE RESOLVED IN COURT WILL BE
RESOLVED IN A BENCH TRIAL WITHOUT A JURY. WITH RESPECT TO THE
FOREGOING CONSENT TO JURISDICTION, THE SELLER HEREBY WAIVES ANY
OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO
VENUE OF ANY ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION 9.6 SHALL
AFFECT THE RIGHT OF THE PURCHASER TO SERVE LEGAL PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF THE
PURCHASER TO BRING ANY ACTION OR PROCEEDING AGAINST THE SELLER OR
ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.
SECTION 9.7. Costs, Expenses and Taxes. (a) In
addition to the rights of indemnification under Article VIII
hereof, subject to certain agreements with respect to limitations
on the fees and out-of-pocket expenses of counsel for Triple-A,
the Collateral Agent, the Administrative Agent and the Surety
with respect the preparation, execution and delivery of this
Agreement and the related documents, the Seller agrees to pay on
demand all reasonable costs and expenses in connection with the
preparation, execution, delivery and administration (including
periodic auditing and any requested amendments, waivers or
consents) of this Agreement and the other documents to be deliv-
ered hereunder, including, without limitation, the reasonable
fees and out-of-pocket expenses of counsel for the Purchaser (and
the Collateral Agent) with respect thereto and with respect to
advising the Purchaser (and the Collateral Agent) as to its
rights and remedies under this Agreement, and the other
agreements executed pursuant hereto and all costs and expenses,
if any (including reasonable counsel fees and expenses), in
connection with the enforcement of this Agreement and the other
agreements and documents to be delivered hereunder.
(b) In addition, the Seller shall pay any and all
stamp, sales, excise and other taxes and fees payable or
determined to be payable in connection with the execution,
delivery, filing and recording of this Agreement or the other
agreements and documents to be delivered hereunder, and agrees to
indemnify the Purchaser and its assignees against any liabilities
with respect to or resulting from any delay in paying or omission
to pay such taxes and fees.
SECTION 9.8. Execution in Counterparts; Severability.
This Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all
of which when taken together shall constitute one and the same
agreement. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the
remaining provisions or obligations, or of such provision or
obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 9.9. No Proceedings. (a) The Seller hereby
covenants and agrees that it will not institute against the
Purchaser any Insolvency Proceeding so long as the Collection
Date shall not have occurred or there shall not have elapsed one
year plus one day since the Collection Date. The foregoing shall
not limit the right of the Seller to file any claim in or
otherwise take any action with respect to any Insolvency
Proceeding that was instituted against the Purchaser by any
Person other than the Seller or an Affiliate of the Seller.
(b) The Seller hereby agrees that it will not
institute against Triple-A, or join any other Person in
instituting against Triple-A, any Insolvency Proceeding so long
as any commercial paper issued by Triple-A shall be outstanding
or there shall not have elapsed one year plus one day since the
last day on which any such commercial paper shall have been
outstanding. The foregoing shall not limit the right of the
Seller to file any claim in or otherwise take any action with
respect to any Insolvency Proceeding that was instituted against
Triple-A by any Person other than the Seller or an Affiliate of
the Seller.
SECTION 9.10. Captions and Cross References. The
various captions (including, without limitation, the table of
contents) in this Agreement are provided solely for convenience
of reference and shall not affect the meaning or interpretation
of any provision of this Agreement.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
SELLER/SERVICER: AG SERVICES OF AMERICA, INC.
By:________________________________
Name:
Title:
Address: X.X. Xxx 000
0000 Xxxx Xxxxx Xxxxxx
Xxxxx Xxxxx, Xxxx 00000
Attn: Xxxx Xxxxxxxx
PURCHASER: AG ACCEPTANCE CORPORATION
By:________________________________
Name:
Title:
Address: X.X. Xxx 000
0000 Xxxx Xxxxx Xxxxxx
Xxxxx Xxxxx, Xxxx 00000
Attn: Xxxx Xxxxxxxxxxx
