Exhibit 4.1
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CREDIT AGREEMENT
DATED AS OF NOVEMBER 24, 2003
by and among
UNITED AGRI PRODUCTS, INC. and
UNITED AGRI PRODUCTS CANADA INC.
as Borrowers
and
THE OTHER PERSONS PARTY HERETO THAT ARE
DESIGNATED AS CREDIT PARTIES
and
GENERAL ELECTRIC CAPITAL CORPORATION
as Agent, L/C Issuer and a Lender
and
GE CANADA FINANCE INC.
as Canadian Agent
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
as Lenders
and
GECC CAPITAL MARKETS GROUP, INC.
as Co-Lead Arranger
and
UBS SECURITIES LLC
as Co-Lead Arranger
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TABLE OF CONTENTS
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SECTION 1. AMOUNTS AND TERMS OF LOANS.........................................2
1.1 Loans..............................................................2
1.2 Interest and Applicable Margins....................................8
1.3 Fees, Costs and Expenses..........................................13
1.4 Payments..........................................................14
1.5 Prepayments.......................................................15
1.6 Maturity..........................................................16
1.7 Eligible Accounts.................................................16
1.8 Eligible Inventory................................................19
1.9 Loan Accounts.....................................................21
1.10 Yield Protection; Illegality......................................21
1.11 Taxes.............................................................22
1.12 Borrower Representative...........................................24
1.13 Conversion to Dollars.............................................24
1.14 Judgment Currency; Contractual Currency...........................25
1.15 Canadian Revolving Loan Refunding.................................26
1.16 Joint and Several Obligations.....................................27
SECTION 2. AFFIRMATIVE COVENANTS.............................................27
2.1 Compliance With Laws and Contractual Obligations..................27
2.2 Insurance; Damage to or Destruction of Collateral.................28
2.3 Inspection; Lender Meeting........................................29
2.4 Organizational Existence..........................................29
2.5 Environmental Matters.............................................30
2.6 Landlords' Agreements, Mortgagee Agreements, Bailee Letters and
Real Estate Purchases.............................................31
2.7 Conduct of Business...............................................31
2.8 Maintenance of Accounts...........................................32
2.9 Canadian Pension and Benefit Plans................................32
2.10 Supplier Rebates..................................................33
2.11 Further Assurances................................................33
SECTION 3. NEGATIVE COVENANTS................................................34
3.1 Indebtedness......................................................34
3.2 Liens and Related Matters.........................................36
3.3 Investments.......................................................37
3.4 Contingent Obligations............................................39
3.5 Restricted Payments...............................................41
3.6 Restriction on Fundamental Changes................................42
3.7 Disposal of Assets or Subsidiary Stock............................45
3.8 Transactions with Affiliates. ...................................45
3.9 Conduct of Business...............................................46
3.10 [Intentionally omitted.]..........................................46
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3.11 Fiscal Year.......................................................46
3.12 Press Release; Public Offering Materials..........................46
3.13 Subsidiaries......................................................47
3.14 Bank Accounts.....................................................47
3.15 Hazardous Materials...............................................47
3.16 ERISA.............................................................47
3.17 Sale-Leasebacks...................................................47
3.18 Prepayments of Other Indebtedness.................................48
3.19 Inactive Subsidiaries.............................................48
SECTION 4. FINANCIAL COVENANTS/REPORTING.....................................48
4.1 Minimum EBITDA....................................................48
4.2 Minimum Fixed Charge Coverage Ratio...............................48
4.3 Financial Statements and Other Reports............................48
4.4 Accounting Terms; Utilization of GAAP for Purposes of Calculations
Under Agreement...................................................52
SECTION 5. REPRESENTATIONS AND WARRANTIES....................................52
5.1 Disclosure........................................................52
5.2 No Material Adverse Effect........................................53
5.3 No Conflict.......................................................53
5.4 Organization, Powers, Capitalization and Good Standing............53
5.5 Financial Statements and Projections..............................54
5.6 Intellectual Property.............................................54
5.7 Investigations, Audits, Etc.......................................55
5.8 Employee Matters..................................................55
5.9 Solvency..........................................................55
5.10 Litigation; Adverse Facts.........................................55
5.11 Use of Proceeds; Margin Regulations...............................55
5.12 Ownership of Property; Liens......................................56
5.13 Environmental Matters.............................................56
5.14 ERISA And Canadian Pension And Benefit Plans......................58
5.15 Brokers...........................................................59
5.16 Deposit and Disbursement Accounts.................................59
5.17 Agreements and Other Documents....................................59
5.18 Insurance.........................................................59
5.19 Acquisition Agreement.............................................59
5.20 Taxes and Tax Returns.............................................60
SECTION 6. DEFAULT, RIGHTS AND REMEDIES......................................61
6.1 Event of Default..................................................61
6.2 Suspension or Termination of Commitments..........................63
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6.3 Acceleration and other Remedies...................................63
6.4 Performance by Agent..............................................64
6.5 Application of Proceeds...........................................64
SECTION 7. CONDITIONS TO LOANS...............................................65
7.1 Conditions to Initial Loans.......................................65
7.2 Conditions to All Loans...........................................66
SECTION 8. ASSIGNMENT AND PARTICIPATION......................................67
8.1 Assignment and Participations.....................................67
8.2 Agent.............................................................70
8.3 Set Off and Sharing of Payments...................................75
8.4 Disbursement of Funds.............................................75
8.5 Disbursements of Advances; Payment........................... ....76
SECTION 9. MISCELLANEOUS.....................................................79
9.1 Indemnities.......................................................79
9.2 Amendments and Waivers............................................79
9.3 Notices...........................................................80
9.4 Failure or Indulgence Not Waiver; Remedies Cumulative.............82
9.5 Marshaling; Payments Set Aside....................................82
9.6 Severability......................................................82
9.7 Lenders' Obligations Several; Independent Nature of Lenders'
Rights............................................................82
9.8 Headings..........................................................82
9.9 Applicable Law....................................................83
9.10 Successors and Assigns............................................83
9.11 No Fiduciary Relationship; Limited Liability......................83
9.12 Construction......................................................83
9.13 Confidentiality...................................................83
9.14 CONSENT TO JURISDICTION...........................................84
9.15 WAIVER OF JURY TRIAL..............................................84
9.16 Survival of Warranties and Certain Agreements.....................85
9.17 Entire Agreement..................................................85
9.18 Counterparts; Effectiveness.......................................85
9.19 Replacement of Lenders............................................85
9.20 Delivery of Termination Statements and Mortgage Releases..........87
9.21 English Language..................................................87
SECTION 10. CROSS-GUARANTY....................................................87
10.1 Cross-Guaranty....................................................87
10.2 Waivers by Borrowers..............................................88
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10.3 Benefit of Guaranty...............................................88
10.4 Waiver of Subrogation, Etc........................................88
10.5 Election of Remedies..............................................88
10.6 Liability Cumulative..............................................89
10.7 Canadian Borrower and Its Wholly-Owned Subsidiaries...............89
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INDEX OF APPENDICES
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Annexes
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Annex A - Definitions
Annex B - Pro Rata Shares and Commitment Amounts
Annex C - Closing Checklist
Annex D - Pro Forma
Annex E - Lenders' Bank Accounts
Exhibits
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Exhibit 1.1(a)(i) - Notice of Revolving Credit Advance
Exhibit 1.1(a)(iii) - Revolving Note
Exhibit 1.1(b) - Swing Line Note
Exhibit 1.2(e) - Notice of Continuation/Conversion
Exhibit 2.6(a) - Form of Landlord Agreement
Exhibit 2.6(b) - Form of Bailee Letter
Exhibit 2.6(c) - Form of Mortgagee Waiver
Exhibit 2.11(b) - Form of Mortgage/Deed of Trust
Exhibit 4.3(d) - Form of Borrowing Base Certificate
Exhibit 4.3(k) - Compliance Certificate
Exhibit 8.1 - Assignment Agreement
Disclosure Schedules
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Schedule 2.7 - Corporate and Trade Names
Schedule 3.1 - Indebtedness
Schedule 3.2 - Liens
Schedule 3.3 - Investments
Schedule 3.4 - Contingent Obligations
Schedule 3.8 - Affiliate Transactions
Schedule 5.4(a) - Jurisdictions of Organization and Qualifications
Schedule 5.4(b) - Capitalization
Schedule 5.6 - Intellectual Property
Schedule 5.7 - Investigations and Audits
Schedule 5.8 - Employee Matters
Schedule 5.10 - Litigation
Schedule 5.11 - Use of Proceeds
Schedule 5.12 - Real Estate
Schedule 5.13 - Environmental Matters
Schedule 5.14(a) - ERISA
Schedule 5.14(b) - Canadian Benefit Plans and Canadian Pension Plans
Schedule 5.16 - Deposit and Disbursement Accounts
Schedule 5.17 - Agreements and Other Documents
Schedule 5.18 - Insurance
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CREDIT AGREEMENT
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This CREDIT AGREEMENT is dated as of November 24, 2003 and entered
into by and among UNITED AGRI PRODUCTS, INC., a Delaware corporation ("UAP" or
"U.S. Borrower"), UNITED AGRI PRODUCTS CANADA INC., an entity organized under
the federal laws of Canada ("Canadian Borrower") (U.S. Borrower and Canadian
Borrower are sometimes referred to herein as the "Borrowers" and individually as
a "Borrower"), the other persons designated as "Credit Parties" on the signature
pages hereof, the financial institutions who are or hereafter become parties to
this Agreement as Lenders, GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware
corporation (in its individual capacity "GE Capital"), as the initial L/C Issuer
and as Agent and GE CANADA FINANCE INC., an entity organized under the federal
laws of Canada (in its individual capacity "GE Canada"), as Canadian Agent.
R E C I T A L S:
- - - - - - - -
WHEREAS, Borrowers desire that Lenders extend a revolving credit
facility to Borrowers to fund a portion of the Acquisition (as hereinafter
defined), to provide working capital financing for Borrowers and their
Subsidiaries and to provide funds for other general corporate purposes of
Borrowers and their Subsidiaries; and
WHEREAS, U.S. Borrower desires to secure all of its Obligations (as
hereinafter defined) under the Loan Documents (as hereinafter defined) by
granting to Agent, for the benefit of Agent and Lenders, a security interest in
and lien upon substantially all of its personal property and certain real
property; and
WHEREAS, Canadian Borrower desires to secure all of its own (but not
other) Obligations under the Loan Documents by granting to Canadian Agent, for
the benefit of Canadian Agent and Lenders, a security interest in and lien upon
substantially all of its personal property and certain real property; and
WHEREAS, UAP Holding Corp., a Delaware corporation that owns all of
the Stock of UAP ("Holdings") is willing to guaranty all of the Obligations and
to pledge to Agent, for the benefit of Agent and Lenders, all of the Stock of
UAP to secure the Obligations; and
WHEREAS, each of U.S. Borrower's Wholly-Owned Domestic Subsidiaries is
willing to guaranty all of the Obligations of Borrowers and to grant to Agent,
for the benefit of Agent and Lenders, a security interest in and lien upon
substantially all of its personal property and certain real property to secure
the Obligations; and
WHEREAS, each of Canadian Borrower's Wholly-Owned Domestic
Subsidiaries is willing to guaranty all of the Obligations of Canadian Borrower
and to grant to Agent, for the benefit of Canadian Agent, a security interest in
and lien upon substantially all of its personal property and certain real
property to secure the Obligations of Canadian Borrower; and
WHEREAS, all capitalized terms herein shall have the meanings ascribed
thereto in Annex A hereto which is incorporated herein by reference.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrowers, Credit Parties, Lenders
and Agent agree as follows:
SECTION 1.
AMOUNTS AND TERMS OF LOANS
--------------------------
1.1 Loans. Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of Borrowers and the other
Credit Parties contained herein:
(a) Revolving Loans.
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(i) Subject to the terms and conditions hereof, each Lender
agrees, severally and not jointly, to make available to U.S. Borrower from time
to time until the Commitment Termination Date its Pro Rata Share of advances
(each a "U.S. Revolving Credit Advance") requested by U.S. Borrower. The Pro
Rata Share of the U.S. Revolving Loan of any Lender (including, without
duplication, Swing Line Loans) shall not at any time exceed its separate
Revolving Loan Commitment. U.S. Revolving Credit Advances may be repaid and
reborrowed from time to time until the Commitment Termination Date; provided,
that the amount of any U.S. Revolving Credit Advance to be made at any time
shall not exceed U.S. Borrowing Availability. The U.S. Revolving Loan shall be
repaid in full on the Commitment Termination Date. If at any time the
outstanding U.S. Revolving Loan (including the Swing Line Loan) exceeds the U.S.
Borrowing Base, plus, if applicable, the Maximum In-Season Overadvance (such
excess, a "U.S. Overadvance"), Lenders shall not be obligated to make U.S.
Revolving Credit Advances and no additional Letters of Credit shall be issued.
The U.S. Revolving Loan must be repaid and/or Letters of Credit cash
collateralized in an amount sufficient to eliminate any such U.S. Overadvance (a
"U.S. Pay Down") within 15 days following notice by Agent to Borrower
Representative that such U.S. Overadvance has occurred or will occur as a result
of the imposition of Reserves or changes in the criteria set forth in Sections
1.7 or 1.8 which make less credit available. In all other cases, such U.S. Pay
Down must occur immediately.
(ii) Subject to the terms and conditions hereof, Canadian Agent
agrees to make available to Canadian Borrower from time to time until the
Commitment Termination Date advances (each a "Canadian Revolving Credit
Advance") requested by Borrower Representative on behalf of Canadian Borrower
hereunder in Dollars or Canadian Dollars. Canadian Revolving Credit Advances may
be repaid and reborrowed from time to time until the Commitment Termination
Date; provided, that the amount of any Canadian Revolving Credit Advance to be
made at any time shall not exceed Canadian Borrowing Availability. The Canadian
Revolving Loan shall be repaid in full on the Commitment Termination Date. If at
any time the outstanding Canadian Revolving Loan exceeds the Canadian Borrowing
Base (such excess, a "Canadian Overadvance"), Canadian Agent shall not be
obligated to make Canadian Revolving Credit Advances. The Canadian Revolving
Loan must be repaid in an amount
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sufficient to eliminate any such Canadian Overadvance (a "Canadian Pay Down")
within 15 days following notice by Canadian Agent to Borrower Representative
that such Canadian Overadvance has occurred or will occur as a result of the
imposition of Reserves or changes in the criteria set forth in Sections 1.7 or
1.8 which make less credit available. In all other cases, such Canadian Pay Down
must occur immediately.
(iii) Revolving Loans which are Index Rate Loans may be requested
in any amount with one (1) Business Day's prior written notice required for
funding requests equal to or greater than $5,000,000 or the Dollar Equivalent
thereof. For funding requests for such Loans less than $5,000,000 or the Dollar
Equivalent thereof, written notice must be provided by 1:00 p.m. (New York time)
on the Business Day on which the Loan is to be made. All LIBOR Loans require
three (3) Business Days' prior written notice. Written notices for funding
requests shall be in the form attached as Exhibit 1.1(a)(i) ("Notice of
Revolving Credit Advance"). U.S. Borrower shall execute and deliver to each
Lender which requests such execution and delivery a note to evidence the
Revolving Loan Commitment of that Lender. Canadian Borrower shall execute and
deliver to Canadian Agent a note to evidence the Canadian Revolving Loan. Each
note shall be in the principal amount of the Revolving Loan Commitment of the
applicable Lender, dated the Closing Date and substantially in the form of
Exhibit 1.1(a)(iii) (each a "Revolving Note" and, collectively, the "Revolving
Notes").
(iv) Subject to the terms and conditions hereof and the terms of
the GE Capital Fee Letter, Agent severally agrees to make available to U.S.
Borrower from time to time prior to the Commitment Termination Date, in-season
overadvances ("In-Season Overadvances") requested by U.S. Borrower. In-Season
Overadvances may be repaid and reborrowed from time to time until the Commitment
Termination Date. In-Season Overadvances (i) shall not exceed in the aggregate
at any one time outstanding the lesser of (x) the book value of all Eligible
Accounts (without giving effect to Reserves), Eligible Inventory (without giving
effect to Reserves) and Equipment multiplied by .05 or (y) $25,000,000 (the
"Maximum In-Season Overadvance"), (ii) shall only be drawn against if the
outstanding balance of the U.S. Revolving Loan would otherwise equal or exceed
the U.S. Borrowing Base, (iii) subject to Section 6.5, shall be paid prior to
payment of the principal balance of the remainder of the U.S. Revolving Loan and
the Canadian Revolving Loan, and (iv) subject to Section 6.5, shall be paid in
full on December 31/st/ of each year, commencing on December 31, 2004, and on
the Commitment Termination Date.
(b) Swing Line Facility.
-------------------
(i) Agent shall notify the Swing Line Lender upon Agent's
receipt of any Notice of Revolving Credit Advance. Subject to the terms and
conditions hereof, the Swing Line Lender shall make available from time to time
until the Commitment Termination Date advances (each, a "Swing Line Advance") in
accordance with any such notice. Swing Line Advances shall not be used to fund
In-Season Overadvances. The provisions of this Section 1.1(b) shall not relieve
Lenders of their obligations to make U.S. Revolving Credit Advances under
Section 1.1(a), provided, that if the Swing Line Lender makes a Swing Line
Advance pursuant to any such notice, such Swing Line Advance shall be in lieu of
any U.S. Revolving
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Credit Advance that otherwise may be made by Lenders pursuant to such notice.
The aggregate amount of Swing Line Advances outstanding shall not exceed at any
time the lesser of (A) the Swing Line Commitment and (B) U.S. Borrowing
Availability ("Swing Line Availability"). Until the Commitment Termination Date,
U.S. Borrower may from time to time borrow, repay and reborrow under this
Section 1.1(b). Each Swing Line Advance shall be made pursuant to a Notice of
Revolving Credit Advance delivered by U.S. Borrower to Agent in accordance with
Section 1.1(a). Unless the Swing Line Lender has received at least one (1)
Business Day's prior written notice from Requisite Lenders instructing it not to
make a Swing Line Advance, the Swing Line Lender shall, notwithstanding the
failure of any condition precedent set forth in Section 7.2, be entitled to fund
that Swing Line Advance, and to have each Lender make U.S. Revolving Credit
Advances in accordance with Section 1.1(b)(iii) or purchase participating
interests in accordance with Section 1.1(b)(iv). Notwithstanding any other
provision of this Agreement or the other Loan Documents, the Swing Line Loan
shall constitute an Index Rate Loan. U.S. Borrower shall repay the aggregate
outstanding principal amount of the Swing Line Loan upon demand therefor by
Agent. The entire unpaid balance of the Swing Line Loan and all other
noncontingent Obligations shall be immediately due and payable in full in
immediately available funds on the Commitment Termination Date if not sooner
paid in full.
(ii) U.S. Borrower shall execute and deliver to the Swing Line
Lender a promissory note to evidence the Swing Line Commitment. Such note shall
be in the principal amount of the Swing Line Commitment of the Swing Line
Lender, dated the Closing Date and substantially in the form of Exhibit 1.1(b)
(the "Swing Line Note"). The Swing Line Note shall represent the obligation of
U.S. Borrower to pay the amount of the Swing Line Commitment or, if less, the
aggregate unpaid principal amount of all Swing Line Advances made to U.S.
Borrower together with interest thereon as prescribed in Section 1.2.
(iii) The Swing Line Lender, at any time and from time to time in
its sole and absolute discretion but no less frequently than once weekly, shall
on behalf of U.S. Borrower (and U.S. Borrower hereby irrevocably authorizes the
Swing Line Lender to so act on its behalf) request each Lender (including the
Swing Line Lender but excluding GE Canada) to make a U.S. Revolving Credit
Advance to U.S. Borrower (which shall be an Index Rate Loan) in an amount equal
to that Lender's Pro Rata Share of the principal amount of the U.S. Borrower's
Swing Line Loan (the "Refunded Swing Line Loan") outstanding on the date such
notice is given. Unless any of the events described in Sections 6.1(f) and
6.1(g) has occurred (in which event the procedures of Section 1.1(b)(iv) shall
apply) and regardless of whether the conditions precedent set forth in this
Agreement to the making of a Revolving Credit Advance are then satisfied, each
Lender shall disburse directly to Agent, its Pro Rata Share of a U.S. Revolving
Credit Advance on behalf of the Swing Line Lender, prior to 3:00 p.m. (New York
time), in immediately available funds on the Business Day next succeeding the
date that notice is given. The proceeds of those U.S. Revolving Credit Advances
shall be immediately paid to the Swing Line Lender and applied to repay the
Refunded Swing Line Loan of the U.S. Borrower.
(iv) If, prior to refunding a Swing Line Loan with a U.S.
Revolving Credit Advance pursuant to Section 1.1(b)(iii), one of the events
described in Sections 6.1(f) or 6.1(g) has occurred, then, subject to the
provisions of Section 1.1(b)(v) below, each Lender
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(excluding GE Canada) shall, on the date such U.S. Revolving Credit Advance was
to have been made for the benefit of the U.S. Borrower, purchase from the Swing
Line Lender an undivided participation interest in the Swing Line Loan to U.S.
Borrower in an amount equal to its Pro Rata Share of such Swing Line Loan. Upon
request, each Lender (excluding GE Canada) shall promptly transfer to the Swing
Line Lender, in immediately available funds, the amount of its participation
interest.
(v) Each Lender's obligation to make U.S. Revolving Credit
Advances in accordance with Section 1.1(b)(iii) and to purchase participation
interests in accordance with Section 1.1(b)(iv) shall be absolute and
unconditional and shall not be affected by any circumstance, including (A) any
setoff, counterclaim, recoupment, defense or other right that such Lender may
have against the Swing Line Lender, U.S. Borrower or any other Person for any
reason whatsoever; (B) the occurrence or continuance of any Default or Event of
Default; (C) any inability of U.S. Borrower to satisfy the conditions precedent
to borrowing set forth in this Agreement at any time or (D) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing. Swing Line Lender shall be entitled to recover, on demand, from
each Lender (excluding GE Canada) the amounts required pursuant to Sections
1.1.(b)(iii) or 1.1(b)(iv), as the case may be. If any Lender does not make
available such amounts to Agent or the Swing Line Lender, as applicable, the
Swing Line Lender shall be entitled to recover, on demand, such amount on demand
from such Lender, together with interest thereon for each day from the date of
non-payment until such amount is paid in full at the Federal Funds Rate for the
first two Business Days and at the Index Rate thereafter.
(c) Letters of Credit. The U.S. Revolving Loan Commitment may, in
addition to advances under the U.S. Revolving Loan, be utilized, upon the
request of U.S. Borrower, for the issuance of Letters of Credit. Immediately
upon the issuance by an L/C Issuer of a Letter of Credit, and without further
action on the part of Agent or any of the Lenders, each Lender (excluding GE
Canada) shall be deemed to have purchased from such L/C Issuer a participation
in such Letter of Credit (or in its obligation under a risk participation
agreement with respect thereto) equal to such Lender's Pro Rata Share of the
aggregate amount available to be drawn under such Letter of Credit.
(i) Maximum Amount. The aggregate amount of Letter of Credit
Obligations with respect to all Letters of Credit outstanding at any time shall
not exceed $50,000,000 (the "L/C Sublimit").
(ii) Reimbursement. U.S. Borrower shall be irrevocably and
unconditionally obligated forthwith without presentment, demand, protest or
other formalities of any kind (including for purposes of Section 10), to
reimburse any L/C Issuer on demand in immediately available funds for any
amounts paid by such L/C Issuer with respect to a Letter of Credit, including
all reimbursement payments, Fees, Charges, costs and expenses paid by such L/C
Issuer. U.S. Borrower hereby authorizes and directs Agent, at Agent's option, to
debit U.S. Borrower's account (by increasing the outstanding principal balance
of the U.S. Revolving Credit Advances) in the amount of any payment made by an
L/C Issuer with respect to any Letter of Credit. All amounts paid by an L/C
Issuer with respect to any Letter of Credit that are
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not immediately repaid by U.S. Borrower with the proceeds of a U.S. Revolving
Credit Advance or otherwise shall bear interest at the interest rate applicable
to the U.S. Revolving Loans which are Index Rate Loans plus, at the election of
Agent or Requisite Lenders, an additional two percent (2.00%) per annum. Each
Lender agrees to fund its Pro Rata Share of any U.S. Revolving Loan made
pursuant to this Section 1.1(c)(ii). In the event Agent elects not to debit U.S.
Borrower's account and U.S. Borrower fails to reimburse an L/C Issuer in full on
the date of any payment in respect of a Letter of Credit, Agent shall promptly
notify each Lender of the amount of such unreimbursed payment and the accrued
interest thereon and each Lender, on the next Business Day prior to 3:00 p.m.
(New York time), shall deliver to Agent an amount equal to its Pro Rata Share
thereof in same day funds. Each Lender hereby absolutely and unconditionally
agrees to pay to the L/C Issuer upon demand by the L/C Issuer such Lender's Pro
Rata Share of each payment made by the L/C Issuer in respect of a Letter of
Credit and not immediately reimbursed by U.S. Borrower or satisfied through a
debit of U.S. Borrower's account. Each Lender acknowledges and agrees that its
obligations pursuant to this subsection in respect of Letters of Credit are
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including setoff, counterclaim, the occurrence and continuance of a
Default or an Event of Default or any failure by U.S. Borrower to satisfy any of
the conditions set forth in Section 7.2. If any Lender fails to make available
to the L/C Issuer the amount of such Lender's Pro Rata Share of any payments
made by the L/C Issuer in respect of a Letter of Credit as provided in this
Section 1.1(c)(ii), the L/C Issuer shall be entitled to recover such amount on
demand from such Lender together with interest at the Index Rate.
(iii) Request for Letters of Credit. U.S. Borrower shall give
Agent at least three (3) Business Days' prior written notice specifying the date
a Letter of Credit is requested to be issued, the amount and the name and
address of the beneficiary and a description of the transactions proposed to be
supported thereby. If Agent informs U.S. Borrower that the L/C Issuer cannot
issue the requested Letter of Credit directly, U.S. Borrower may request that
L/C Issuer arrange for the issuance of the requested Letter of Credit under a
risk participation agreement with another financial institution reasonably
acceptable to Agent, L/C Issuer and U.S. Borrower. The issuance of any Letter of
Credit under this Agreement shall be subject to the conditions that the Letter
of Credit is in a form, is for an amount and contains such terms and conditions
as are reasonably satisfactory to the L/C Issuer and, in the case of standby
letters of credit, Agent. The initial notice requesting the issuance of a Letter
of Credit shall be accompanied by the form of the Letter of Credit and the
Master Standby Agreement, and an application for a letter of credit, if any,
then required by the L/C Issuer completed in a manner satisfactory to such L/C
Issuer. If any provision of any application or reimbursement agreement is
inconsistent with the terms of this Agreement, then the provisions of this
Agreement, to the extent of such inconsistency, shall control.
(iv) Expiration Dates of Letters of Credit. The expiration date
of each Letter of Credit shall be on a date which is not later than the earlier
of (a) one year from its date of issuance or (b) the thirtieth (30/th/) day
prior to the date set forth in clause (a) of the definition of the term
Commitment Termination Date. Notwithstanding the foregoing, a Letter of Credit
may provide for automatic extensions of its expiration date for one (1) or more
successive one (1) year periods provided that the L/C Issuer has the right to
terminate such Letter of Credit on
6
each such annual expiration date and no renewal term may extend the term of the
Letter of Credit to a date that is later than the thirtieth (30th) day prior to
the date set forth in clause (a) of the definition of the term Commitment
Termination Date. The L/C Issuer may elect not to renew any such Letter of
Credit and, upon direction by Agent or Requisite Lenders, shall not renew any
such Letter of Credit at any time during the continuance of an Event of Default;
provided, that in the case of a direction by Agent or Requisite Lenders, the L/C
Issuer receives such directions prior to the date notice of non-renewal is
required to be given by the L/C Issuer and the L/C Issuer has had a reasonable
period of time to act on such notice.
(v) Obligations Absolute. The obligation of U.S. Borrower to
reimburse the L/C Issuer, Agent and Lenders for payments made in respect of
Letters of Credit issued by the L/C Issuer shall be unconditional and
irrevocable and shall be paid under all circumstances strictly in accordance
with the terms of this Agreement, including the following circumstances: (a) any
lack of validity or enforceability of any Letter of Credit; (b) any amendment or
waiver of or any consent or departure from all or any of the provisions of any
Letter of Credit or any Loan Document; (c) the existence of any claim, set-off,
defense or other right which U.S. Borrower, any of its Subsidiaries or
Affiliates or any other Person may at any time have against any beneficiary of
any Letter of Credit, Agent, any L/C Issuer, any Lender or any other Person,
whether in connection with this Agreement, any other Loan Document or any other
related or unrelated agreements or transactions; (d) any draft or other document
presented under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; (e) payment under any Letter of Credit against
presentation of a draft or other document that does not substantially comply
with the terms of such Letter of Credit; or (f) any other act or omission to act
or delay of any kind of any L/C Issuer, Agent, any Lender or any other Person or
any other event or circumstance whatsoever that might, but for the provisions of
this Section 1.1(c)(v), constitute a legal or equitable discharge of Borrowers'
obligations hereunder. However, the foregoing shall not be construed to excuse
an L/C Issuer from liability to U.S. Borrower to the extent of any direct
damages (as opposed to consequential damages, with U.S. Borrower hereby waiving
all claims for any consequential damages to the extent permitted by applicable
law) suffered by U.S. Borrower that are subject to indemnification under the
Master Standby Agreement or the Master Documentary Agreement.
(vi) Obligations of L/C Issuers. Each L/C Issuer (other than GE
Capital) hereby agrees that it will not issue a Letter of Credit hereunder until
it has provided Agent with written notice specifying the amount and intended
issuance date of such Letter of Credit and Agent has returned a written
acknowledgment of such notice to L/C Issuer. Each L/C Issuer (other than GE
Capital) further agrees to provide to Agent: (a) a copy of each Letter of Credit
issued by such L/C Issuer promptly after its issuance; (b) a weekly report
summarizing available amounts under Letters of Credit issued by such L/C Issuer,
the dates and amounts of any draws under such Letters of Credit, the effective
date of any increase or decrease in the face amount of any Letters of Credit
during such week and the amount of any unreimbursed draws under such Letters of
Credit; and (c) such additional information reasonably requested by Agent from
time to time with respect to the Letters of Credit issued by such L/C Issuer.
Without limiting the generality of the foregoing, it is expressly understood and
agreed by U.S. Borrower
7
that the absolute and unconditional obligation of U.S. Borrower to Agent and
Lenders hereunder to reimburse payments made under a Letter of Credit will not
be excused by the gross negligence or willful misconduct of the L/C Issuer.
However, the foregoing shall not be construed to excuse an L/C Issuer from
liability to U.S. Borrower to the extent of any direct damages (as opposed to
consequential damages, with U.S. Borrower hereby waiving all claims for any
consequential damages to the extent permitted by applicable law) suffered by
U.S. Borrower that are subject to indemnification under the Master Standby
Agreement or the Master Documentary Agreement
(d) Funding Authorization.
(i) The proceeds of all U.S. Revolving Credit Advances
(including In-Season Overadvances) and Swing Line Advances made pursuant to this
Agreement subsequent to the Closing Date are to be funded by Agent by wire
transfer to the account designated by U.S. Borrower below with respect to the
U.S. Revolving Loan (the "U.S. Disbursement Account"):
Bank: Bank of America
ABA No.: ▇▇▇▇▇▇▇▇▇
Account No.: 3752198636
Reference: United Agri Products, Inc.
(ii) The proceeds of all Canadian Revolving Credit Advances made
pursuant to this Agreement subsequent to the Closing Date are to be funded by
Canadian Agent by wire transfer to the account designated by Borrower
Representative to Canadian Agent in writing with respect to the Canadian
Revolving Loan (the "Canadian Disbursement Account").
Borrower Representative shall provide Agents with written notice of any change
in the foregoing instructions at least three (3) Business Days before the
desired effective date of such change.
1.2 Interest and Applicable Margins.
-------------------------------
(a) Borrowers shall pay interest (i) with respect to the U.S.
Revolving Credit Advances, to Agent, for the ratable benefit of Lenders (except
with respect to In-Season Overadvances, all interest on which shall be paid to
Agent solely for its own account) (ii) with respect to the Canadian Revolving
Credit Advances, to Canadian Agent, and (iii) with respect to the Swing Line
Advances, to Agent, for the benefit of the Swing Line Lender, in each case in
accordance with the various Loans being made by each Lender, in arrears on each
applicable Interest Payment Date, at the following rates: (i) with respect to
the Revolving Credit Advances (excluding In-Season Overadvances) which are
designated as Index Rate Loans (and for all other interest-bearing Obligations
not otherwise set forth below), the Index Rate plus the Applicable Revolver
Index Margin per annum or, with respect to Revolving Credit Advances (excluding
In-Season Overadvances) which are designated as LIBOR Loans, at the election of,
with respect to U.S. Revolving Credit Advances, U.S. Borrower, and with respect
to Canadian Revolving Credit Advances, Borrower Representative, the applicable
LIBOR Rate plus the Applicable Revolver LIBOR Margin per annum; (ii) with
respect to Revolving Credit Advances which are In-Season Overadvances and which
are designated as Index Rate Loans, the Index Rate plus the Applicable
8
In-Season Overadvance Index Margin per annum or, with respect to Revolving
Credit Advances which are In-Season Overadvances and which are designated as
LIBOR Loans, at the election of, with respect to U.S. Revolving Credit Advances,
U.S. Borrower, and with respect to Canadian Revolving Credit Advances, Borrower
Representative, the applicable LIBOR Rate plus the Applicable In-Season
Overadvance LIBOR Margin per annum and (iii) with respect to the Swing Line
Loan, the Index Rate plus the Applicable Revolver Index Margin per annum.
The Applicable Margins are as follows:
Applicable Revolver Index Margin 1.50%
Applicable Revolver LIBOR Margin 2.75%
Applicable In-Season Overadvance Index Margin 2.75%
Applicable In-Season Overadvance LIBOR Margin 4.00%
Applicable Unused Line Fee Margin 0.50%
The Applicable Margins (other than the Applicable In-Season
Overadvance Margins) shall be adjusted (up or down) prospectively on a quarterly
basis as determined by Borrowers' and their Subsidiaries' consolidated financial
performance, commencing with the first day of the first calendar month that
occurs more than one (1) day after delivery of Holdings' annual, audited
Financial Statements to Lenders for the Fiscal Year ending on or after February
22, 2004. Adjustments in Applicable Margins will be determined by reference to
the following grids:
--------------------------------------------------------------------------------
Level of
If the Leverage Ratio is: Applicable Margins:
--------------------------------------------------------------------------------
*** 3.00 Level I
--------------------------------------------------------------------------------
***3.50, but ** 3.00 Level II
--------------------------------------------------------------------------------
**3.50 Level III
--------------------------------------------------------------------------------
** denotes more than
*** denotes less than or equal to
--------------------------------------------------------------------------------
Applicable Margins
--------------------------------------------------------------------------------
Level I Level II Level III
--------------------------------------------------------------------------------
Applicable Revolver Index Margin 1.00% 1.25% 1.50%
--------------------------------------------------------------------------------
Applicable Revolver LIBOR Margin 2.25% 2.50% 2.75%
--------------------------------------------------------------------------------
Applicable Unused Line Fee Margin 0.25% 0.375% 0.50%
--------------------------------------------------------------------------------
All adjustments in the Applicable Margins subsequent to the delivery
of Holdings' annual, audited Financial Statements to Lenders for the Fiscal Year
ending on or after February 22, 2004, shall be implemented quarterly on a
prospective basis, for each calendar month commencing at least one (1) day after
the date of delivery to Lenders of the quarterly
9
unaudited Financial Statements evidencing the need for an adjustment.
Concurrently with the delivery of those Financial Statements, Borrower
Representative shall deliver to Agents and Lenders a certificate, signed by its
chief financial officer, setting forth in reasonable detail the basis for the
continuance of, or any change in, the Applicable Margins. Failure to timely
deliver such Financial Statements shall, in addition to any other remedy
provided for in this Agreement, result in an increase in the Applicable Margins
to the highest level set forth in the foregoing grid, until the first day of the
first calendar month following the delivery of those Financial Statements
demonstrating that such an increase is not required. If any Event of Default has
occurred and is continuing at the time any reduction in the Applicable Margins
is to be implemented, that reduction shall be deferred until the first day of
the first calendar month following the date on which all Events of Default are
waived or cured.
(b) If any payment on any Loan becomes due and payable on a day other
than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day (except as set forth in the definition of LIBOR Period)
and, with respect to payments of principal, interest thereon shall be payable at
the then applicable rate during such extension.
(c) All computations of Fees calculated on a per annum basis and
interest shall be made by Agents on the basis of a 360-day year, in each case
for the actual number of days occurring in the period for which such Fees and
interest are payable. The Index Rate is a floating rate determined for each day.
Each determination by Agents of an interest rate and Fees hereunder shall be
final, binding and conclusive on Borrowers, absent manifest error.
(d) So long as an Event of Default has occurred and is continuing
under Section 6.1(a), (f) or (g) and without notice of any kind, or so long as
any other Event of Default has occurred and is continuing and at the election of
(i) with respect to the Canadian Revolving Credit Advances, Canadian Agent or
(ii) with respect to the U.S. Revolving Credit Advances (including, without
limitation, the In-Season Overadvances) and the Swing Line Advances, Agent (or,
in either case, upon the written request of Requisite Lenders) confirmed by
written notice from the Agent or Canadian Agent, as applicable, to Borrower
Representative, subject to applicable law, the interest rates applicable to the
Advances and the Letter of Credit Fee shall each be increased by two percentage
points (2%) per annum above the rates of interest or Letter of Credit Fee
otherwise applicable hereunder ("Default Rate"), and all outstanding Obligations
shall bear interest at the Default Rate applicable to such Obligations. Interest
and Letter of Credit Fees at the Default Rate shall accrue from the initial date
of such Event of Default until that Event of Default is cured or waived and
shall be payable upon demand, but in any event, shall be payable on the next
regularly scheduled payment date set forth herein for such Obligation.
(e) U.S. Borrower, with respect to U.S. Revolving Credit Advances and
U.S. Revolving Loans, and Borrower Representative, with respect to Canadian
Revolving Credit Advances and Canadian Revolving Loans, shall have the option to
(i) request that any Revolving Credit Advance be made as a LIBOR Loan, (ii)
convert at any time all or any part of outstanding Advances (other than the
Swing Line Loan) from Index Rate Loans to LIBOR Loans, (iii) convert any LIBOR
Loan to an Index Rate Loan, subject to payment of the LIBOR
10
Breakage Cost in accordance with Section 1.3(d) if such conversion is made prior
to the expiration of the LIBOR Period applicable thereto, or (iv) continue all
or any portion of any Advance (other than Swing Line Advances) as a LIBOR Loan
upon the expiration of the applicable LIBOR Period and the succeeding LIBOR
Period of that continued LIBOR Loan shall commence on the first day after the
last day of the LIBOR Period of the LIBOR Loan to be continued. Any LIBOR Loan
or group of LIBOR Loans having the same proposed LIBOR Period to be made or
continued as, or converted into, a LIBOR Loan must be in a minimum amount of
$5,000,000 or the Dollar Equivalent thereof and integral multiples of $500,000
or the Dollar Equivalent thereof in excess of such amount. Any such election
must be made by 1:00 p.m. (New York time) on the 3rd Business Day prior to (1)
the date of any proposed Revolving Credit Advance which is to bear interest at
the LIBOR Rate, (2) the end of each LIBOR Period with respect to any LIBOR Loans
to be continued as such, or (3) the date on which U.S. Borrower or Borrower
Representative, as applicable, wishes to convert any Index Rate Loan to a LIBOR
Loan for a LIBOR Period designated by U.S. Borrower or Borrower Representative
in such election. If no election is received with respect to a LIBOR Loan by
1:00 p.m. (New York time) on the 3rd Business Day prior to the end of the LIBOR
Period with respect thereto, that LIBOR Loan shall be converted to an Index Rate
Loan at the end of its LIBOR Period. Borrower Representative must make such
election by notice to Canadian Agent and U.S. Borrower must make such election
by notice to Agent, in either case, in writing, by fax or overnight courier. In
the case of any conversion or continuation, such election must be made pursuant
to a written notice (a "Notice of Conversion/Continuation") in the form of
Exhibit 1.2(e). No Advance shall be made, converted into or continued as a LIBOR
Loan, if an Event of Default has occurred and is continuing and (i) with respect
to the Canadian Revolving Credit Advances, Canadian Agent or (ii) with respect
to the U.S. Revolving Credit Advances (including, without limitation, In-Season
Overadvances), Agent or, in either case, Requisite Lenders have determined not
to make or continue any Advance as a LIBOR Loan as a result thereof. No Advance
may be made as or converted into a LIBOR Loan until 45 days after the Closing
Date.
(f) Notwithstanding anything to the contrary set forth in this
Section 1.2, if a court of competent jurisdiction determines in a final order
that the rate of interest payable hereunder exceeds the highest rate of interest
permissible under law (the "Maximum Lawful Rate"), then so long as the Maximum
Lawful Rate would be so exceeded, the rate of interest payable hereunder shall
be equal to the Maximum Lawful Rate; provided, however, that if at any time
thereafter the rate of interest payable hereunder is less than the Maximum
Lawful Rate, Borrowers shall continue to pay interest hereunder at the Maximum
Lawful Rate until such time as the total interest received by (i) with respect
to the Canadian Revolving Credit Advances, Canadian Agent, on behalf of Lenders,
or (ii) with respect to the U.S. Revolving Credit Advances (including, without
limitation, In-Season Overadvances) and Swing Line Advances, Agent, on behalf of
Lenders, is equal to the total interest that would have been received had the
interest rate payable hereunder been (but for the operation of this paragraph)
the interest rate payable since the Closing Date as otherwise provided in this
Agreement. Thereafter, interest hereunder shall be paid at the rate(s) of
interest and in the manner provided in Sections 1.2(a) through (e), unless and
until the rate of interest again exceeds the Maximum Lawful Rate, and at
11
that time this paragraph shall again apply. In no event shall the total interest
received by any Lender pursuant to the terms hereof exceed the amount that such
Lender could lawfully have received had the interest due hereunder been
calculated for the full term hereof at the Maximum Lawful Rate. If the Maximum
Lawful Rate is calculated pursuant to this paragraph, such interest shall be
calculated at a daily rate equal to the Maximum Lawful Rate divided by the
number of days in the year in which such calculation is made. If,
notwithstanding the provisions of this Section 1.2(f), a court of competent
jurisdiction shall determine by a final, non-appealable order that a Lender has
received interest hereunder in excess of the Maximum Lawful Rate, Agent or
Canadian Agent, as applicable, shall, to the extent permitted by applicable law,
promptly apply such excess as specified in Section 6.5 and thereafter shall
refund any excess to Borrowers or as such court of competent jurisdiction may
otherwise order.
(g) If any provision of this Agreement or any of the other Loan
Documents would obligate Canadian Borrower to make any payment of interest with
respect to the Obligations or other amount payable to Canadian Agent or any
Lender in an amount or calculated at a rate which would be prohibited by law or
would result in a receipt by the Canadian Agent or such Lender of interest with
respect to the Obligations at a criminal rate (as such terms are construed under
the Criminal Code (Canada)) then, notwithstanding such provision, such amount or
rates shall be deemed to have been adjusted with retroactive effect to the
maximum amount or rate of interest, as the case may be, as would not be so
prohibited by law or so result in a receipt by the Canadian Agent or such Lender
of interest with respect to the Obligations at a criminal rate, such adjustment
to be effected, to the extent necessary, as follows: (1) first, by reducing the
amount or rates of interest required to be paid to the Canadian Agent or the
affected Lender under this Section 1.2(g); and (2) thereafter, by reducing any
fees, commissions, premiums and other amounts required to be paid to the
Canadian Agent or the affected Lender which would constitute interest with
respect to the Obligations for purposes of Section 347 of the Criminal Code
(Canada). Notwithstanding the foregoing, and after giving effect to all
adjustments contemplated thereby, if Canadian Agent or any Lender shall have
received an amount in excess of the maximum permitted by that section of the
Criminal Code (Canada), then Canadian Borrower shall be entitled, by notice in
writing to the Canadian Agent or the affected Lender, to obtain reimbursement
from the Canadian Agent or such Lender in an amount equal to such excess, and
pending such reimbursement, such amount shall be deemed to be an amount payable
by the Canadian Agent or such Lender to Canadian Borrower. Any amount or rate of
interest under the Obligations referred to in this Section 1.2(g) shall be
determined in accordance with generally accepted actuarial practices and
principles as an effective annual rate of interest over the term that any
Canadian Revolving Credit Advances remain outstanding on the assumption that any
charges, fees or expenses that fall within the meaning of "interest" (as defined
in the Criminal Code (Canada)) shall, if they relate to a specific period of
time, be pro-rated over that period of time and otherwise be pro-rated over the
period from the Closing Date to the Termination Date (with reference to the
Canadian Revolving Loan) and, in the event of a dispute, a certificate of a
Fellow of the Canadian Institute of Actuaries appointed by the Canadian Agent
shall be conclusive for the purposes of such determination.
(h) For purposes of disclosure pursuant to the Interest Act (Canada),
the annual rates of interest or fees to which the rates of interest or fees
provided in this Agreement
12
and the other Loan Documents (and stated herein or therein, as applicable, to be
computed on the basis of a 360 day year or any other period of time less than a
calendar year) are equivalent to the rates so determined multiplied by the
actual number of days in the applicable calendar year and divided by 360 or such
other period of time, respectively.
(i) Interest, Unused Line Fees and Letter of Credit Fees shall be
payable solely in the currency in which the underlying Loan is made or Letter of
Credit is issued.
1.3 Fees, Costs and Expenses.
------------------------
(a) Fee Letter. Borrowers shall pay to GE Capital, individually, the
Fees specified in that certain fee letter dated as of the date hereof among
Borrowers and GE Capital (the "GE Capital Fee Letter"), at the times specified
for payment therein.
(b) Unused Line Fee. As additional compensation for the Lenders
(excluding GE Canada), U.S. Borrower shall pay to Agent, for the ratable benefit
of such Lenders, in arrears, on the first Business Day of each month prior to
the Commitment Termination Date and on the Commitment Termination Date, a fee
(the "Unused Line Fee") for Borrowers' non-use of available funds in an amount
equal to the Applicable Unused Line Fee Margin per annum multiplied by the
difference between (x) the Maximum Amount (as it may be reduced from time to
time) and (y) the average for the preceding month (or partial month) of the
daily closing balance of the Revolving Loans (including, without duplication,
Swing Line Loans) outstanding during the period for which such Fee is due.
(c) Letter of Credit Fee. U.S. Borrower agrees to pay to Agent for
the benefit of Lenders, as compensation to Lenders for Letter of Credit
Obligations incurred hereunder, (i) all costs and expenses incurred by Agent or
any Lender on account of such Letter of Credit Obligations, and (ii) for each
month during which any Letter of Credit Obligation shall remain outstanding, a
fee (the "Letter of Credit Fee") in an amount equal to the average daily undrawn
face amount of all Letter of Credit Obligations outstanding during such month
multiplied by a per annum rate equal to the Applicable Revolver LIBOR Margin
from time to time in effect. Such fee shall be paid to Agent for the benefit of
the Lenders in arrears, on the first Business Day of each month and on the
Commitment Termination Date. In addition, U.S. Borrower shall pay to any L/C
Issuer, on demand, such fees (including all per annum fees), charges and
expenses of such L/C Issuer in respect of the issuance, negotiation, acceptance,
amendment, transfer and payment of such Letter of Credit or otherwise payable
pursuant to the application and related documentation under which such Letter of
Credit is issued.
(d) LIBOR Breakage Cost. Upon (i) any default by any Borrower in
making any borrowing of, conversion into or continuation of any LIBOR Loan
following Borrower Representative's or U.S. Borrower's, as applicable, delivery
to Agents of any LIBOR Loan request in respect thereof or (ii) any payment of a
LIBOR Loan on any day that is not the last day of the LIBOR Period applicable
thereto (regardless of the source of such prepayment and whether voluntary, by
acceleration or otherwise), Borrowers shall pay (i) with respect to the Canadian
Revolving Credit Advances, Canadian Agent or (ii) with respect to the U.S.
Revolving
13
Credit Advances (including, without limitation, In-Season Overadvances), Agent,
for the benefit of all Lenders that funded or were prepared to fund any such
LIBOR Loan, the LIBOR Breakage Cost (if any) actually incurred by such Lender.
(e) Expenses and Attorneys' Fees. U.S. Borrower agrees to promptly
pay all reasonable, out-of-pocket fees, charges, costs and expenses (including
reasonable attorneys' fees and expenses) incurred by Agents in connection with
any matters contemplated by or arising out of the Loan Documents, in connection
with the examination, review, due diligence investigation, documentation,
negotiation, closing and syndication of the transactions contemplated herein and
in connection with the continued administration of the Loan Documents including
any amendments, modifications, consents and waivers. U.S. Borrower agrees to
promptly pay all reasonable, out-of-pocket fees, charges, costs and expenses
(including fees, charges, costs and expenses of attorneys, auditors (whether
internal or external), appraisers, consultants and advisors) incurred by Agent
in connection with any amendment, waiver, consent with respect to the Loan
Documents, Event of Default, work-out or action to enforce any Loan Document or
to collect any payments due from Borrowers or any other Credit Party. In
addition, in connection with any work-out or action to enforce any Loan Document
or to collect any payments due from Borrowers or any other Credit Party, U.S.
Borrower agrees to promptly pay all reasonable, out-of-pocket fees, charges,
costs and expenses incurred by Lenders for one (1) counsel acting for all
Lenders other than Agents. All fees, charges, costs and expenses for which
Borrowers are responsible under this Section 1.3(e) shall be deemed part of the
Obligations when incurred, payable upon presentation of reasonable documentation
of such amounts or summaries thereof and secured by the Collateral.
(f) Fronting Fees and Participation Fees. When and as interest is
collected on the Canadian Revolving Loan and until the Canadian Revolving Loan
is refunded in accordance with Section 1.15, Canadian Agent shall, subject to
applicable law, retain a fee (the "Fronting Fee") equal to 1/8/th/ of one
percent (0.125%) of the outstanding principal balance of the Canadian Revolving
Loan, at such time, and Canadian Agent shall pay to each Lender (other than
Agent) a participation fee (a "Participation Fee") equal to such Lender's Pro
Rata Share of that portion of the interest collected equal to the sum of
Applicable Margins then in effect with respect to the Canadian Revolving Loan
for the relevant LIBOR Period or other interest payment period, plus any Default
Rate then in effect, less such Lender's Pro Rata Share of the Fronting Fee. If
Canadian Borrower pays less than all of the interest then due and owing by it
for any period, that portion of the interest equating to the Participation Fee
shall be deemed to be the last portion of interest paid or to be paid.
1.4 Payments. All payments by Borrowers of the Obligations shall be
without deduction, defense, setoff or counterclaim and shall be made in same day
funds and delivered to (i) with respect to the Canadian Revolving Loan, Canadian
Agent or (ii) with respect to the U.S. Revolving Loan, Agent, for the benefit of
Agent and Lenders, as applicable, by wire transfer to the following account or
such other place as Agent may from time to time designate in writing
(collectively, the "Revolving Loan Account"):
(a) the U.S. Revolving Loan:
14
ABA No. ▇▇▇-▇▇▇-▇▇▇
Account Number ▇▇▇-▇▇▇-▇▇
Deutsche Bank Trust Company Americas
Jersey City, New Jersey
ACCOUNT NAME: GECC/CAF DEPOSITORY
Reference: CFN 5339
(b) with respect to the Canadian Revolving Loan:
Transit Number 00002
Bank Number 003
Account Number ▇▇▇▇▇▇▇
Royal Bank of Canada
Toronto, Ontario
ACCOUNT NAME: GECCI - Commercial Finance
Reference: United Agri Products, Inc.
Good funds received by Agents before 2:00 p.m. (New York time) on a Business Day
shall be deemed received on that Business Day; good funds received by Agents
after 2:00 p.m. (New York time) on a Business Day, shall be deemed to have been
received on the next Business Day. Whenever any payment to be made hereunder
shall be stated to be due on a day that is not a Business Day, the payment may
be made on the next succeeding Business Day and such extension of time shall be
included in the computation of the amount of interest and Fees due hereunder.
U.S. Borrower hereby authorizes Lenders to make U.S. Revolving Credit
Advances or Swing Line Advances and Canadian Borrower hereby authorizes Canadian
Agent to make Canadian Revolving Credit Advances, in each case on the basis of
their Pro Rata Shares, for the payment of interest, Fees and expenses
reimbursable hereunder and, solely with respect to U.S. Borrower, Letter of
Credit reimbursement obligations and any amounts required to be deposited with
respect to outstanding Letter of Credit Obligations pursuant to Sections 1.5(b)
or 6.3.
1.5 Prepayments.
-----------
(a) Voluntary Reduction of the Revolving Loan Commitment. At any
time, Borrowers may permanently reduce the Revolving Loan Commitment without
premium or penalty subject to the payment of LIBOR Breakage Costs, if
applicable; provided, however, that the Revolving Loan Commitment may not be
permanently reduced to less than the outstanding balance of the Revolving Loan
as of the date of such reduction (determined after giving effect to all
prepayments and repayments made on such date). Any reduction of the Revolving
Loan Commitment shall not result in a pro rata or any other reduction of the
Canadian Sub-Limit, the L/C Sublimit or the Swing Line Commitment unless so
designated by Borrower Representative. In addition, Borrowers may, at any time
terminate the Revolving Loan Commitment on at least ten (10) Business Days'
prior written notice to Agents, which termination may be revoked or
15
deferred by Borrowers; provided, that upon such termination, all Loans and other
Obligations shall be immediately due and payable in full and all Letter of
Credit Obligations shall be cash collateralized or otherwise satisfied in
accordance with this Agreement.
(b) Letter of Credit Obligations. In the event any Letters of Credit
are outstanding at the time that the Revolving Loan Commitment is terminated,
U.S. Borrower shall (1) deposit with Agent for the benefit of all Lenders cash
in an amount equal to 103% of the aggregate outstanding Letter of Credit
Obligations to be available to Agent to reimburse payments of drafts drawn under
such Letters of Credit and pay any Fees and expenses related thereto and (2)
prepay the fee payable under Section 1.3(c) with respect to such Letters of
Credit for the full remaining terms of such Letters of Credit. Upon termination
of any such Letter of Credit, the unearned portion of such prepaid fee
attributable to such Letter of Credit shall be refunded to U.S. Borrower.
1.6 Maturity. All of the Obligations shall become due and payable as
otherwise set forth herein, but in any event all of the remaining Obligations
shall become due and payable upon termination of this Agreement. Until all
Obligations have been fully paid and satisfied (other than contingent
indemnification obligations to the extent no unsatisfied claim has been
asserted), the Revolving Loan Commitment has been terminated and all Letters of
Credit have been terminated or otherwise secured to the satisfaction of Agents,
Agents shall be entitled to retain the security interests in the Collateral
granted under the Collateral Documents and the ability to exercise all rights
and remedies available to them under the Loan Documents and applicable laws.
Notwithstanding anything contained in this Agreement to the contrary, upon any
termination of the Revolving Loan Commitment, all of the Obligations shall be
due and payable.
1.7 Eligible Accounts. All of the Accounts owned by each Credit Party and
reflected in the most recent Borrowing Base Certificate delivered by each
Borrower to Agents shall be "Eligible Accounts" for purposes of this Agreement,
except any Account to which any of the exclusionary criteria set forth below
applies. Agent, with respect to all Credit Parties other than Canadian Borrower
and its Wholly-Owned Subsidiaries, and Canadian Agent, with respect to the
Canadian Borrower and its Wholly-Owned Subsidiaries, shall have the right to
establish or modify or eliminate Reserves against Eligible Accounts from time to
time in its reasonable credit judgment (as to Reserves imposed after the Closing
Date, based on its analysis of facts or events first occurring, or first
discovered by Agent or Canadian Agent, after the Closing Date). In addition,
Agent, with respect to all Credit Parties other than Canadian Borrower and its
Wholly-Owned Subsidiaries, and Canadian Agent, with respect to Canadian Borrower
and its Wholly-Owned Subsidiaries, reserves the right, at any time and from time
to time after the Closing Date, to adjust any of the criteria set forth below
and to establish new criteria in its reasonable credit judgment (based on its
analysis of material facts or events first occurring, or first discovered by
Agent or Canadian Agent, after the Closing Date) subject to the approval of
Supermajority Lenders in the case of adjustments or new criteria which have the
effect of making more credit available. Agent and Canadian Agent acknowledge
that as of the Closing Date they do not know of any circumstance or condition
with respect to the Accounts that would require the imposition
16
of a Reserve which has not been imposed as of the Closing Date. Eligible
Accounts shall not include any Account of any Credit Party:
(a) that does not arise from the sale of goods or the performance of
services by such Credit Party in the ordinary course of its business;
(b) (i) upon which such Credit Party's right to receive payment is
not absolute or is contingent upon the fulfillment of any condition whatsoever
or (ii) as to which such Credit Party is not able to bring suit or otherwise
enforce its remedies against the Account Debtor through judicial process, or
(iii) if the Account represents a progress billing consisting of an invoice for
goods sold or used or services rendered pursuant to a contract under which the
Account Debtor's obligation to pay that invoice is subject to such Credit
Party's completion of further performance under such contract or is subject to
the equitable lien of a surety bond issuer;
(c) to the extent of customer allowances or to the extent that any
defense, counterclaim, setoff or dispute is asserted as to such Account;
(d) that is not a true and correct statement of bona fide
indebtedness incurred in the amount of the Account for merchandise sold to or
services rendered and accepted by the applicable Account Debtor;
(e) with respect to which an invoice has not been sent to the
applicable Account Debtor;
(f) that (i) is not owned by such Credit Party or (ii) is subject to
any right, claim, security interest or other interest of any other Person, other
than Liens in favor of Agent (or, in the case of Canadian Borrower and its
Wholly-Owned Subsidiaries, Canadian Agent), on behalf of itself and the Lenders;
(g) that arises from a sale to any director, officer, other employee
or Affiliate of any Credit Party, or to any entity that has any common officer
or director with any Credit Party;
(h) that is the obligation of an Account Debtor that is the United
States or Canadian government (including, without limitation, Her Majesty the
Queen in Right of Canada) or a political subdivision thereof, or any state,
province, county or municipality or department, agency or instrumentality
thereof unless Agent (or, in the case of Canadian Borrower and its Wholly-Owned
Subsidiaries, Canadian Agent), in its sole discretion, has agreed to the
contrary in writing and such Credit Party, if necessary or desirable, has
complied with respect to such obligation with the Federal Assignment of Claims
Act of 1940, the Financial Administration Act (Canada) or any other applicable
state, province, county or municipal law restricting the assignment thereof with
respect to such obligation;
(i) that is the obligation of an Account Debtor located in a foreign
country other than Canada unless payment thereof is assured by a letter of
credit assigned and delivered
17
to Agent (or, in the case of Canadian Borrower and its Wholly-Owned
Subsidiaries, Canadian Agent), satisfactory to it as to form, amount and issuer;
(j) to the extent such Credit Party or any Subsidiary thereof is
liable for goods sold, deposits made or services rendered by the applicable
Account Debtor to such Credit Party or any Subsidiary thereof but only to the
extent of the potential offset;
(k) that arises with respect to goods that are delivered on a
▇▇▇▇-and-hold, cash-on-delivery basis or placed on consignment, guaranteed sale
or other terms by reason of which the payment by the Account Debtor is or may be
conditional;
(l) that is in default based on of any of the following criteria:
(i) the Account (other than an Extended Account) is not paid
within the earlier of: 60 days following its due date or 90 days following its
original invoice date;
(ii) the Account is an Extended Account and is not paid within
60 days following its due date;
(iii) the Account Debtor obligated upon such Account suspends
business, makes a general assignment for the benefit of creditors or fails to
pay its debts generally as they come due or is otherwise insolvent; or
(iv) a petition or assignment or an application for an order to
stay a proceeding is filed by or against any Account Debtor obligated upon such
Account under any bankruptcy law or any other federal, state, provincial or
foreign (including any Canadian federal or provincial) receivership, insolvency
relief or other Insolvency Laws;
(m) that is the obligation of an Account Debtor if 50% or more of the
Dollar amount of all Accounts owing by that Account Debtor are ineligible under
the other criteria set forth in this Section 1.7;
(n) with respect to Accounts of U.S. Borrower, as to which Agent's
Lien thereon, on behalf of itself, Canadian Agent and Lenders or with respect to
Accounts of Canadian Borrower, as to which Canadian Agent's Lien thereon, on
behalf of itself and Lenders, is not a first priority perfected Lien, subject
to, in the case of Canadian Borrower and its Subsidiaries, Prior Claims that are
unregistered and secure amounts that are not yet due and payable;
(o) to the extent such Account is evidenced by a judgment, Instrument
or Chattel Paper;
(p) to the extent such Account exceeds, together with other Accounts
owing by that Account Debtor, any credit limit established by the Credit
Parties' credit policies; or
18
(q) that is payable in any currency other than Dollars or, with
respect to any account of Canadian Borrower or any of its Wholly-Owned
Subsidiaries, Canadian Dollars.
1.8 Eligible Inventory. All of the Inventory owned by each Credit Party
and reflected in the most recent Borrowing Base Certificate delivered by each
Borrower to Agents shall be "Eligible Inventory" for purposes of this Agreement,
except any Inventory to which any of the exclusionary criteria set forth below
applies. Agent, with respect to all Credit Parties other than Canadian Borrower
and its Wholly-Owned Subsidiaries, and Canadian Agent, with respect to the
Canadian Borrower and its Wholly-Owned Subsidiaries, shall have the right to
establish or modify or eliminate Reserves against Eligible Inventory from time
to time in its reasonable credit judgment (as to Reserves imposed after the
Closing Date, based on its analysis of facts or events first occurring, or first
discovered by Agent or Canadian Agent, after the Closing Date). In addition,
Agent, with respect to all Credit Parties other than Canadian Borrower and its
Wholly-Owned Subsidiaries, and Canadian Agent, with respect to Canadian Borrower
and its Wholly-Owned Subsidiaries, reserves the right, at any time and from time
to time after the Closing Date, to adjust any of the criteria set forth below
and to establish new criteria in its reasonable credit judgment (based on its
analysis of material facts or events first occurring, or first discovered by
Agent or Canadian Agent, after the Closing Date), subject to the approval of
Supermajority Lenders in the case of adjustments or new criteria which have the
effect of making more credit available. Agent and Canadian Agent acknowledge
that as of the Closing Date they do not know of any circumstance or condition
with respect to the Inventory that would require the imposition of a Reserve
which has not been imposed as of the Closing Date. Eligible Inventory shall not
include any Inventory of any Credit Party that:
(a) is not owned by such Credit Party free and clear of all Liens and
rights of any other Person (including the rights of a purchaser that has made
progress payments and the rights of a surety that has issued a bond to assure
such Credit Party's performance with respect to that Inventory), except the
Liens in favor of Agent (or, in the case of Canadian Borrower and its
Wholly-Owned Subsidiaries, Canadian Agent) on behalf of itself and the
applicable Lenders and Permitted Encumbrances described in clauses (a), (b), (c)
and (e) of such defined term;
(b) (i) is not located on premises owned, leased or rented by such
Credit Party (or a consignee, bailee or warehouseman of a Credit Party) and set
forth on Schedule 5.12 (as it may be updated from time to time by delivery of a
new Schedule 5.12 by Borrower Representative to Agent), (ii) is stored at a
leased location, unless Agent (or, in the case of Canadian Borrower and its
Wholly-Owned Subsidiaries, Canadian Agent) has given its prior consent thereto
and unless (x) a landlord waiver has been delivered to such Agent in accordance
with Section 2.6, or (y) Reserves have been established with respect thereto
pursuant to Section 2.6, (iii) is stored with a bailee or warehouseman unless an
acknowledged bailee letter has been received by Agent (or, in the case of
Canadian Borrower and its Wholly-Owned Subsidiaries, Canadian Agent) in
accordance with Section 2.6 or Reserves have been established with respect
thereto pursuant to Section 2.6, (iv) is located at a location owned by a Credit
Party subject to a mortgage in favor of a lender other than Agent (or, in the
case of Canadian Borrower and its Wholly-Owned Subsidiaries, Canadian Agent),
unless a mortgagee waiver has been delivered to such Agent in accordance with
Section 2.6 or Reserves have been established with respect
19
thereto pursuant to Section 2.6, or (v) is located at any site if the aggregate
book value of Inventory at any such location is less than $100,000 or the Dollar
Equivalent thereof;
(c) is placed on consignment by a Credit Party or is in transit,
except for (i) Inventory in transit between domestic locations of Credit Parties
and (ii) consigned Inventory as to which the applicable Credit Party has taken
all steps necessary to perfect its ownership interest in such consigned
Inventory against claims by the consignee and secured creditors of the
consignee;
(d) is covered by a negotiable document of title, unless such
document has been delivered to Agent (or, in the case of Canadian Borrower and
its Wholly-Owned Subsidiaries, Canadian Agent), with all necessary endorsements,
free and clear of all Liens except those in favor such Agent and the Lenders;
(e) is excess, obsolete, unsaleable, shopworn, seconds, damaged or
unfit for sale;
(f) consists of display items or packing or shipping materials,
manufacturing supplies, work-in-process Inventory or replacement parts;
(g) is not of a type held for sale in the ordinary course of such
Credit Party's business;
(h) is not subject to a first priority lien in favor of Agent (or, in
the case of Canadian Borrower and its Wholly-Owned Subsidiaries, Canadian
Agent), on behalf of itself and the Lenders, subject to Permitted Encumbrances,
or does not otherwise conform to the representations or warranties pertaining to
Inventory set forth in the Loan Documents;
(i) consists of any costs associated with "freight-in" charges;
(j) consists of Hazardous Materials or goods that can be transported
or sold only with licenses that are not readily available, excluding any
inventory products (including FIFRA regulated products, insecticides,
herbicides, pesticides, fungicides and rodenticides) carried by the Credit
Parties as of the Closing Date and new or additional inventory products
consisting of "next generation" versions of such products or consistent with the
general scope and type of such products;
(k) is not covered by casualty insurance reasonably acceptable to
Agent (or, in the case of Canadian Borrower and its Wholly-Owned Subsidiaries,
Canadian Agent); or
(l) is subject to any licensing, patent, royalty, trademark, trade
name or copyright agreements with any third parties which would require any
consent of any third party for the sale or disposition of that Inventory (which
consent has not been obtained) or the payment of any monies to any third party
upon such sale or other disposition (to the extent of such monies).
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1.9 Loan Accounts. Agent shall maintain a loan account (the "Loan
Account") on its books to record: all Advances, all payments made by Borrowers,
and all other debits and credits as provided in this Agreement with respect to
the Loans or any other Obligations. All entries in the Loan Account shall be
made in accordance with Agent's customary accounting practices as in effect from
time to time. The balance in the Loan Account, as recorded on Agent's most
recent printout or other written statement, shall, absent manifest error, be
presumptive evidence of the amounts due and owing to Agents and Lenders by
Borrowers; provided, that any failure to so record or any error in so recording
shall not limit or otherwise affect any Borrower's duty to pay the Obligations.
Agent shall render to Borrower Representative a monthly accounting of
transactions with respect to the Loans setting forth the balance of the Loan
Account as to each Borrower for the immediately preceding month. Unless Borrower
Representative notifies Agent in writing of any objection to any such accounting
(specifically describing the basis for such objection), within thirty (30) days
after the date thereof, each and every such accounting shall, absent manifest
error, be deemed final, binding and conclusive on Borrowers in all respects as
to all matters reflected therein. Only those items expressly objected to in such
notice shall be deemed to be disputed by Borrowers. Notwithstanding any
provision herein contained to the contrary, any Lender may elect (which election
may be revoked) to dispense with the issuance of Notes to that Lender and may
rely on the Loan Account as evidence of the amount of Obligations from time to
time owing to it.
1.10 Yield Protection; Illegality.
(a) Capital Adequacy and Other Adjustments. In the event that any
Lender shall have determined that the adoption after the date hereof of any law,
treaty, governmental (or quasi-governmental) rule, regulation, guideline or
order regarding capital adequacy, reserve requirements or similar requirements
or compliance by any Lender or any corporation controlling such Lender with any
request or directive regarding capital adequacy, reserve requirements or similar
requirements (whether or not having the force of law and whether or not failure
to comply therewith would be unlawful) from any central bank or governmental
agency or body having jurisdiction does or shall have the effect of increasing
the amount of capital, reserves or other funds required to be maintained by such
Lender or any corporation controlling such Lender and thereby reducing the rate
of return on such Lender's or such corporation's capital as a consequence of its
obligations hereunder, then U.S. Borrower or Canadian Borrower shall from time
to time within fifteen (15) days after notice and demand from such Lender
(together with the certificate referred to in the next sentence and with a copy
to Agent (or, in the case of Canadian Borrower, Canadian Agent)) pay to such
Agent, for the account of such Lender, additional amounts sufficient to
compensate such Lender for such reduction. A certificate as to the amount of
such cost and showing the basis of the computation of such cost submitted by
such Lender to Borrower Representative and such Agent or Canadian Agent, as
applicable, shall, absent manifest error, be final, conclusive and binding for
all purposes.
(b) Increased LIBOR Funding Costs; Illegality. Notwithstanding
anything to the contrary contained herein, if the introduction of or any change
in any law, rule, regulation, treaty or directive (or any change in the
interpretation thereof) shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender to
21
agree to make or to make or to continue to fund or maintain any LIBOR Loan,
then, unless that Lender is able to make or to continue to fund or to maintain
such LIBOR Loan at another branch or office of that Lender without, in that
Lender's opinion, adversely affecting it or its Loans or the income obtained
therefrom, on notice thereof and demand therefor by such Lender to Borrower
Representative through Agent (or, in the case of Canadian Borrower, Canadian
Agent), (i) the obligation of such Lender to agree to make or to make or to
continue to fund or maintain LIBOR Loans shall terminate and (ii) (A) in the
case of a Lender, U.S. Borrower and (B) in the case of Canadian Agent, Canadian
Borrower, shall forthwith prepay in full all outstanding LIBOR Loans owing by
such Borrower to such Lender or Canadian Agent, as applicable, together with
interest accrued thereon, unless U.S. Borrower and/or Borrower Representative,
as applicable, within five (5) Business Days after the delivery of such notice
and demand, converts all LIBOR Loans into Index Rate Loans. If, after the date
hereof, the introduction of, change in or interpretation of any law, rule,
regulation, treaty or directive would impose or increase reserve requirements
(other than as taken into account in the definition of LIBOR) or otherwise
increase the cost to any Lender of making or maintaining a LIBOR Loan, then (i)
in the case of a Lender, U.S. Borrower or (ii) in the case of Canadian Agent,
Canadian Borrower shall from time to time within fifteen (15) days after notice
and demand from Agent (or, in the case of Canadian Borrower, Canadian Agent), to
Borrower Representative (together with the certificate referred to in the next
sentence) pay to such Agent, for the account of all such affected Lenders,
additional amounts sufficient to compensate such Lenders for such increased
cost. A certificate as to the amount of such cost and showing the basis of the
computation of such cost submitted by such Agent on behalf of all such affected
Lenders to Borrower Representative shall, absent manifest error, be final,
conclusive and binding for all purposes.
1.11 Taxes.
(a) No Deductions. Any and all payments or reimbursements made
hereunder (including any payments made pursuant to Section 10) shall be made in
Dollars or Canadian Dollars, as applicable, free and clear of and without
deduction for any and all Charges, taxes, levies, imposts, deductions or
withholdings, and all liabilities with respect thereto of any nature whatsoever
imposed by any taxing authority, excluding franchise or capital taxes and taxes
to the extent imposed on Agent's, Canadian Agent's or a Lender's income as a
result of a present or former connection between such Agent or Lender and the
jurisdiction of the governmental authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from such Agent or such Lender having executed,
delivered or performed its obligations or received a payment under, or enforced,
this Agreement) (all such excluded taxes, "Excluded Taxes"). If any Borrower
shall be required by law to deduct any such amounts from or in respect of any
sum payable hereunder to any Lender, Agent or Canadian Agent, then the sum
payable hereunder shall be increased as may be necessary so that, after making
all required deductions and withholdings, such Lender, Agent or Canadian Agent
receives an amount equal to the sum it would have received had no such
deductions been made.
(b) Changes in Tax Laws. In the event that, subsequent to the
Closing Date, (1) any changes in any existing law, regulation, treaty or
directive or in the interpretation or application thereof, (2) any new law,
regulation, treaty or directive enacted or any interpretation
22
or application thereof, or (3) compliance by Agents or any Lender with any
request or directive (whether or not having the force of law) from any
Governmental Authority, does or shall subject Agent, Canadian Agent or any
Lender to any tax of any kind whatsoever (other than Excluded Taxes) with
respect to this Agreement, the other Loan Documents or any Loans made or Letters
of Credit issued hereunder (except for changes in the rate of tax on the overall
net income of such Agent, Canadian Agent or such Lender) and the result of any
of the foregoing is to increase the cost to either Agent, Canadian Agent or any
such Lender of issuing any Letter of Credit or making or continuing any Loan
hereunder, as the case may be, or to reduce any amount receivable hereunder,
then, in any such case, (i) U.S. Borrower in the case of Agent or a Lender or
(ii) Canadian Borrower in the case of Canadian Agent, shall promptly pay to
Agent, Canadian Agent or such Lender, as applicable, upon its demand, any
additional amounts necessary to compensate Agent, Canadian Agent or such Lender,
on an after-tax basis, for such additional cost or reduced amount receivable, as
determined by Agent, Canadian Agent or such Lender with respect to this
Agreement or the other Loan Documents. If Agent, Canadian Agent or such Lender
becomes entitled to claim any additional amounts pursuant to this Section
1.11(b), it shall promptly notify Borrower Representative of the event by reason
of which Agent, Canadian Agent or such Lender has become so entitled. A
certificate as to any additional amounts payable pursuant to the foregoing
sentence submitted by Agent, Canadian Agent or such Lender to Borrower
Representative (with a copy to Agent or Canadian Agent, as applicable) shall,
absent manifest error, be final, conclusive and binding for all purposes.
(c) Certificate of Exemptions. Each Lender shall provide to Borrower
Representative and Agent, a properly completed and executed IRS Form W-8BEN or
Form W-8ECI or other applicable form, certificate or document prescribed by the
IRS of the United States or other applicable taxing authority certifying as to
such Lender's entitlement to a complete exemption with respect to payments to be
made to such Lender under this Agreement and under the Notes (a "Certificate of
Exemption"). Prior to becoming a Lender under this Agreement and within fifteen
(15) days after a reasonable written request of Borrower Representative or
Agent, from time to time thereafter, each Lender that becomes a Lender under
this Agreement shall provide a Certificate of Exemption to Borrower
Representative and Agent. If a Lender does not provide a Certificate of
Exemption to Borrower Representative and Agent, within the time periods set
forth in the preceding sentence, Borrowers shall withhold taxes from payments to
such Lender at the applicable statutory rates and Borrowers shall not be
required to pay any additional amounts as a result of such withholding;
provided, that all such withholding shall cease upon delivery by such Lender of
a Certificate of Exemption to Borrower Representative and Agent. Notwithstanding
anything to the contrary in this Section 1.11(c), the provisions of this Section
1.11(c) shall not apply to a Lender, and any payments to such Lender, that arise
out of or relate to a refunding of the Canadian Revolving Loan as described in
Section 1.15
(d) Participation Fee. Notwithstanding anything to the contrary in
this Agreement (including Section 1.11(c)), to the extent that any portion of
the Participation Fee is payable to a Lender that is not a resident of Canada
for purposes of the tax imposed pursuant to Part XIII of the Income Tax Act
(Canada) or any successor provision thereto (a "Non-Resident Canadian
Participant"), Canadian Agent shall deduct and remit such tax to the Receiver
General
23
for Canada within the time payable by law, and shall increase such portion of
the Participation Fee as may be necessary so that after all required deductions
of such tax are made, the Non-Resident Canadian Participant receives an amount
equal to the sum it would have received had no such deductions been made. The
Canadian Borrower shall forthwith on demand remit to the Canadian Agent the full
amount of the aforesaid increase.
(e) Mitigation. If a Borrower is required to pay additional amounts
to or for the account of any Lender pursuant to this Section 1.11 as a result of
a change in law or treaty occurring after such Lender first became a party to
this Agreement, then such Lender will, at the request of the Borrower, change
the jurisdiction of its applicable lending office if such change (i) will
eliminate or reduce any such additional payment which may thereafter accrue and
(ii) is, in such Lender's sole discretion, determined not to be materially
disadvantageous or cause unreasonable hardship to such Lender; provided, that
fees, charges, costs or expenses that are related to such change shall be borne
by the Borrower on behalf of a Lender, and the mere existence of such expenses,
fees or costs shall not be deemed to be materially disadvantageous or cause
undue hardship to the Lender.
1.12 Borrower Representative. Canadian Borrower hereby designates Borrower
Representative as its representative and agent on its behalf for the purposes of
issuing Notices of Revolving Credit Advances and Notices of
Conversion/Continuation, giving instructions with respect to the disbursement of
the proceeds of the Loans, selecting interest rate options, giving and receiving
all other notices and consents hereunder or under any of the other Loan
Documents and taking all other actions (including in respect of compliance with
covenants) on behalf of Canadian Borrower under the Loan Documents. Agent,
Canadian Agent and each Lender may regard any notice or other communication
pursuant to any Loan Document from Borrower Representative as a notice or
communication from all Borrowers. Each warranty, covenant, agreement and
undertaking made on its behalf by Borrower Representative shall be deemed for
all purposes to have been made by such Borrower and shall be binding upon and
enforceable against such Borrower to the same extent as it if the same had been
made directly by such Borrower.
1.13 Conversion to Dollars.
(a) All valuations or computations of monetary amounts set forth in
this Agreement shall include the Dollar Equivalent of amounts in Canadian
Dollars. In connection with all Dollar amounts set forth in this Agreement, and
the U.S. Borrowing Base and Canadian Borrowing Base calculations, all Canadian
Dollars shall be converted to Dollars in accordance with the following
procedure:
(i) Conversions to Dollars shall occur in accordance with the
prevailing exchange rate, as published in The Wall Street Journal on the date of
conversion (or, if the date of conversion is not a day on which The Wall Street
Journal is published, as published in the most recent edition of The Wall Street
Journal) as the rate in effect on the Business Day prior to the date of
publication. If The Wall Street Journal shall cease to publish exchange rates
for
24
Canadian Dollars, the Agent shall determine the prevailing exchange rate in its
reasonable credit judgment.
(ii) For the purpose of determining whether repayments must be
made under Section 1.1(a)(i) or 1.1(a)(ii) on a date other than the Commitment
Termination Date, outstanding Loans denominated in Canadian Dollars and the
Canadian Borrowing Base shall be marked to market on a (a) monthly basis as long
as Aggregate Borrowing Availability (determined using the exchange rates in
effect on the most recent date of conversion prior to the date of determination)
equals or exceeds $10,000,000, (b) weekly basis as long as Aggregate Borrowing
Availability (determined using the exchange rates in effect on the most recent
date of conversion prior to the date of determination) equals or exceeds
$5,000,000 but is less than $10,000,000, and (c) on a daily basis as long as
Aggregate Borrowing Availability (determined using the exchange rates in effect
on the most recent date of conversion prior to the date of determination) is
less than $5,000,000, in each case as of the last Business Day of such period
and taking into account in each case the Dollar Equivalent of all Loans
outstanding in Canadian Dollars and of the Canadian Borrowing Base.
(b) Unless otherwise specifically set forth in this Agreement,
monetary amounts shall be in Dollars.
1.14 Judgment Currency; Contractual Currency.
(a) If, for the purpose of obtaining or enforcing judgment against
any Borrower in any court in any jurisdiction, it becomes necessary to convert
into any other currency (such other currency being hereinafter in this Section
1.14 referred to as the "Judgment Currency") an amount due under any Loan
Document in any currency (the "Obligation Currency") other than the Judgment
Currency, the conversion shall be made at the rate of exchange prevailing on the
Business Day immediately preceding (i) the date of actual payment of the amount
due, in the case of any proceeding in the courts of any jurisdiction that will
give effect to such conversion being made on such date, or (ii) the date on
which the judgment is given, in the case of any proceeding in the courts of any
other jurisdiction (the applicable date as of which such conversion is made
pursuant to this Section 1.14 being hereinafter in this Section 1.14 referred to
as the "Judgment Conversion Date").
(b) If, in the case of any proceeding in the court of any
jurisdiction referred to in Section 1.14(a), there is a change in the rate of
exchange prevailing between the Judgment Conversion Date and the date of actual
receipt for value of the amount due, the applicable Borrower shall pay such
additional amount (if any, but in any event not a lesser amount) as may be
necessary to ensure that the amount actually received in the Judgment Currency,
when converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation Currency which could have been purchased
with the amount of the Judgment Currency stipulated in the judgment or judicial
order at the rate of exchange prevailing on the Judgment Conversion Date. Any
amount due from a Borrower under this Section 1.14(b) shall be due as a separate
debt and shall not be affected by judgment being obtained for any other amounts
due under or in respect of any of the Loan Documents.
25
(c) The term "rate of exchange" in this Section 1.14 means the rate
of exchange at which Agents would, on the relevant date at or about 12:00 noon
(New York time), be prepared to sell the Obligation Currency against the
Judgment Currency.
(d) Any amount received or recovered by Agents in respect of any sum
expressed to be due to them (whether for itself or as trustee for any other
person) from any Borrower under this Agreement or under any of the other Loan
Documents in a currency other than the currency (the "contractual currency") in
which such sum is so expressed to be due (whether as a result of, or from the
enforcement of, any judgment or order of a court or tribunal of any
jurisdiction, the winding-up of a Borrower or otherwise) shall only constitute a
discharge of such Borrower to the extent of the amount of the contractual
currency that such Agent is able, in accordance with its usual practice, to
purchase with the amount of the currency so received or recovered on the date of
receipt or recovery (or, if later, the first date on which such purchase is
practicable). If the amount of the contractual currency so purchased is less
than the amount of the contractual currency so expressed to be due, such
Borrower shall indemnify such Agent against any loss sustained by it as a
result, including the cost of making any such purchase.
1.15 Canadian Revolving Loan Refunding.
(a) If any Event of Default has occurred and is continuing, Canadian
Agent may, in its sole and absolute discretion, direct that the Canadian
Revolving Loan owing to it be refunded by delivering a notice (with such detail
as Agent shall request, a "Notice of Canadian Revolving Loan Refunding") to
Agent. Upon receipt of such notice, Agent shall promptly give notice of the
contents thereof to the Lenders and, unless an Event of Default described in
Section 6.1(f) or (g) shall have occurred, to Borrower Representative. Each such
Notice of Canadian Revolving Loan Refunding shall be deemed to constitute
delivery of a notice to Agent requesting each Lender to fund its undivided
Participating Interest in the outstanding Canadian Revolving Loan whereupon each
Lender other than Agent shall fund its Pro Rata Share of the outstanding
Canadian Revolving Loan. Each Lender other than Agent shall immediately transfer
to Canadian Agent, in immediately available funds, the amount of its
Participating Interest in the same currency as the underlying Canadian Revolving
Loan then outstanding as advanced by Canadian Agent.
(b) Whenever, at any time after a Lender has funded its Pro Rata
Share of the outstanding Canadian Revolving Loan, Canadian Agent receives any
payment on account thereof, Canadian Agent will distribute to Agent for delivery
to each Lender other than Agent its Participating Interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender's Participating Interest was outstanding and
funded); provided, however, that in the event that such payment received by
Canadian Agent is required to be returned, such Lender will return to Canadian
Agent any portion thereof previously delivered by Canadian Agent to it. For
purposes of Section 1.11, any interest distributed by Canadian Agent to a Lender
shall be deemed to have been paid by the Canadian Borrower.
26
(c) Each Lender's obligation to fund its Pro Rata Share of the
outstanding Canadian Revolving Loan referred to in this Section 1.15 shall be
absolute and unconditional and shall not be affected by any circumstances,
including, without limitation, (i) any set-off, counterclaim, recoupment,
defense or other right which such Lender or any Borrower may have against
Canadian Agent, any Lender, any Borrower or any other Person for any reason
whatsoever, (ii) the occurrence or continuance of a Default or Event of Default,
(iii) any adverse change in the condition (financial or otherwise) of any
Borrower, (iv) any breach of this Agreement or any other Loan Document by any
Borrower, any Guarantor, any Subsidiary or any other Lender, or (v) any other
circumstances, happening or event whatsoever, whether or not similar to any of
the foregoing.
1.16 Joint and Several Obligations. Notwithstanding any other provision
contained in this Agreement or any other Loan Document, if a "secured creditor"
(as that term is defined under the Bankruptcy and Insolvency Act (Canada)) is
determined by a court of competent jurisdiction not to include a Person to whom
obligations are owed on a joint or joint and several basis, then Canadian
Borrower's Obligations (and the Obligations of Access and Canadian Borrower's
and Access's respective Subsidiaries), to the extent such Obligations are
secured, only shall be several obligations and not joint or joint and several
obligations.
SECTION 2.
AFFIRMATIVE COVENANTS
---------------------
Each Credit Party executing this Agreement jointly and severally
agrees as to all Credit Parties that from and after the date hereof and until
the Termination Date:
2.1 Compliance With Laws and Contractual Obligations. Each Credit Party
will (a) comply with and shall cause each of its Subsidiaries to comply with (i)
the requirements of all applicable laws, rules, regulations and orders of any
Governmental Authority (including, without limitation, laws, rules, regulations
and orders relating to taxes, employer and employee contributions, securities,
employee retirement and welfare benefits, environmental protection matters and
employee health and safety) as now in effect and which may be imposed in the
future in all jurisdictions in which any Credit Party or any of its Subsidiaries
is now doing business or may hereafter be doing business and (ii) the
obligations, covenants and conditions contained in all Contractual Obligations
of such Credit Party or any of its Subsidiaries, in either case, other than
those laws, rules, regulations, orders and provisions of such Contractual
Obligations the noncompliance with which could not be reasonably expected to
have, either individually or in the aggregate, a Material Adverse Effect, and
(b) maintain or obtain and shall cause each of its Subsidiaries to maintain or
obtain all licenses, qualifications and permits now held or hereafter required
to be held by such Credit Party or any of its Subsidiaries, for which the loss,
suspension, revocation or failure to obtain or renew, could reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect. Credit Parties shall give prior written notice to Agent if they elect to
discontinue any license, permit or qualification required under FIFRA or any
similar state law. This Section 2.1 shall not preclude any Credit Party or its
Subsidiaries from contesting any taxes or other payments, if they are being
diligently contested
27
in good faith in a manner which stays enforcement thereof and if appropriate
expense provisions have been recorded in conformity with GAAP, subject to
Section 3.2. Each Credit Party represents and warrants that it (i) is in
compliance and each of its Subsidiaries is in compliance with the requirements
of all applicable laws, rules, regulations and orders of any Governmental
Authority and the obligations, covenants and conditions contained in all
Contractual Obligations other than those laws, rules, regulations, orders and
provisions of such Contractual Obligations the noncompliance with which could
not be reasonably expected to have, either individually or in the aggregate, a
Material Adverse Effect, and (ii) maintains and each of its Subsidiaries
maintains all licenses, qualifications and permits referred to above.
2.2 Insurance; Damage to or Destruction of Collateral.
(a) The Credit Parties shall, at their sole cost and expense,
maintain the policies of insurance described on Schedule 5.18 as in effect on
the date hereof or otherwise maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of the Credit Parties as may customarily be
carried or maintained under similar circumstances by corporations of established
reputation engaged in similar businesses, in each case in such amounts (giving
effect to self-insurance of liabilities), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for
corporations similarly situated in the industry. Such policies of insurance (or
the loss payable and additional insured endorsements delivered to Agent (or, in
the case of Canadian Borrower, Canadian Agent)) shall contain provisions
pursuant to which the insurer agrees to provide 30 days prior written notice to
Agent (or, in the case of Canadian Borrower, Canadian Agent) in the event of any
non-renewal, cancellation or amendment of any such insurance policy (other than
for non-payment of premium, in which case 10 days notice shall be given). If any
Credit Party at any time or times hereafter shall fail to obtain or maintain any
of the policies of insurance required above or to pay all premiums relating
thereto, Agent (or, in the case of Canadian Borrower, Canadian Agent) may at any
time or times thereafter obtain and maintain such policies of insurance and pay
such premiums and take any other action with respect thereto that Agent (or, in
the case of Canadian Borrower, Canadian Agent) deems advisable. Agent (or, in
the case of Canadian Borrower, Canadian Agent) shall have no obligation to
obtain insurance for any Credit Party or pay any premiums therefor. By doing so,
Agent (or, in the case of Canadian Borrower, Canadian Agent) shall not be deemed
to have waived any Default or Event of Default arising from any Credit Party's
failure to maintain such insurance or pay any premiums therefor. All sums so
disbursed, including reasonable attorneys' fees, court costs and other charges
related thereto, shall be payable on demand by U.S. Borrower to Agent (or, in
the case of Canadian Borrower, Canadian Agent) and shall be additional
Obligations hereunder secured by the Collateral. No Credit Party shall be
required to obtain "war risk" or anti-terrorism insurance with respect to any
aircraft owned or leased by it.
(b) Each Credit Party shall deliver to Agent (or, in the case of
Canadian Borrower and its Subsidiaries, Canadian Agent), in form and substance
reasonably satisfactory to Agent (or, in the case of Canadian Borrower and its
Subsidiaries, Canadian Agent),
28
endorsements to (i) all "All Risk" and business interruption insurance naming
Agent (or, in the case of Canadian Borrower and its Subsidiaries, Canadian
Agent), on behalf of itself and Lenders, as loss payee, and (ii) all general
liability and other liability policies naming Agent (or, in the case of Canadian
Borrower and its Subsidiaries, Canadian Agent), on behalf of itself and Lenders,
as additional insureds. Each Borrower shall promptly notify Agent (or, in the
case of Canadian Borrower, Canadian Agent) of any loss, damage, or destruction
to the Collateral in the amount of $500,000 or the Dollar Equivalent thereof or
more, whether or not covered by insurance. Credit Parties other than Canadian
Borrower and its Subsidiaries shall apply the proceeds of such casualty
insurance to the outstanding balance of the U.S. Revolving Loan. Canadian
Borrower and its Subsidiaries shall apply the proceeds of such casualty
insurance to the outstanding balance of the Canadian Revolving Loan. The
Revolving Loan Commitment shall not be reduced as a result of any such payments.
2.3 Inspection; Lender Meeting. Each Credit Party shall, upon five (5)
Business Days' notice, permit any authorized representatives of Agent (or, in
the case of Canadian Borrower, Canadian Agent) to visit, audit and inspect any
of the properties of such Credit Party and its Subsidiaries, including its and
their financial and accounting records, and to make copies and take extracts
therefrom, and to discuss its and their affairs, finances and business with its
and their officers and certified public accountants, at such reasonable times
during normal business hours and without undue disruption to the business of the
Credit Parties as often as may be reasonably requested (a "Collateral Audit");
provided, that so long as no Event of Default has occurred and is continuing and
Aggregate Borrowing Availability equals or exceeds $40,000,000, Agent shall not
conduct more than three Collateral Audits per year. So long as an Event of
Default has occurred and is continuing, such Collateral Audits may be conducted
on one Business Day's notice. Representatives of each Lender (at such Lender's
expense) will be permitted to accompany representatives of Agent or Canadian
Agent, as applicable, during each visit, inspection and discussion referred to
in the immediately preceding sentence. Without in any way limiting the
foregoing, each Credit Party will participate and will cause key management
personnel of each Credit Party and its Subsidiaries to participate in a meeting
with Agent (or, in the case of Canadian Borrower, Canadian Agent) and Lenders at
least once during each year, which meeting shall be held at such time and such
place as may be reasonably requested by Agent (or, in the case of Canadian
Borrower, Canadian Agent). In addition, Borrowers agree to reimburse Agents in
connection with up to three Collateral Audits per year (or more if an Event of
Default has occurred and is continuing or Aggregate Borrowing Availability is
less than $40,000,000) for: (i) the actual out-of-pocket costs (including fees
and expenses) of such Collateral Audit if a third party auditor is retained to
conduct such audit or (ii) field audit charges of $750 per diem per auditor plus
actual out-of-pocket expenses if Agent's or Canadian Agent's in-house auditors
conduct such Collateral Audit; provided, that so long as no Default or Event of
Default shall have occurred and be continuing, such Collateral Audit expenses
shall not exceed $50,000 per year; provided further that Canadian Borrower shall
not be responsible for any such charges, fees and expenses incurred with respect
to U.S. Borrower.
2.4 Organizational Existence. Except as otherwise permitted by Section
3.6, each Credit Party will and will cause its Subsidiaries to at all times
preserve and keep in full force and effect (a) its organizational existence and
(b) all rights and franchises material to its business.
29
2.5 Environmental Matters. Each Credit Party shall and shall cause each
Person within its control to: (a) conduct its operations and keep and maintain
its Real Estate in compliance with all Environmental Laws and Environmental
Permits other than noncompliance that could not reasonably be expected to have a
Material Adverse Effect; (b) implement any and all investigation, remediation,
removal and response actions that are appropriate or necessary to maintain, in
all material respects, the value and marketability of the Real Estate (based on
continued commercial or industrial use as part of the Credit Parties' business
or a similar business to that conducted on the Closing Date) or to otherwise
comply with Environmental Laws and Environmental Permits pertaining to the
presence, generation, treatment, storage, use, disposal, transportation or
Release of any Hazardous Material on, at, in, under, above, to, from or about
any of its Real Estate other than noncompliance that could not reasonably be
expected to have a Material Adverse Effect; (c) notify Agent (or, in the case of
Canadian Borrower, Canadian Agent) promptly after such Credit Party or any
Person within its control becomes aware of any violation of Environmental Laws
or Environmental Permits or any Release on, at, in, under, above, to, from or
about any Real Estate that is reasonably likely to result in Environmental
Liabilities to a Credit Party or its Subsidiaries in excess of $100,000 or the
Dollar Equivalent thereof; and (d) promptly forward to Agent (or, in the case of
Canadian Borrower, Canadian Agent) a copy of any order, notice, request for
information or any communication or report received by such Credit Party or any
Person within its control in connection with any such violation or Release or
any other matter relating to any Environmental Laws or Environmental Permits
that could reasonably be expected to result in Environmental Liabilities in
excess of $100,000 or the Dollar Equivalent thereof, in each case whether or not
the Environmental Protection Agency or any Governmental Authority has taken or
threatened any action in connection with any such violation, Release or other
matter. Subject to limitations imposed by Governmental Authorities, if Agent
(or, in the case of Canadian Borrower, Canadian Agent) at any time has a
reasonable basis to believe that there may be a violation of any Environmental
Laws or Environmental Permits by any Credit Party or any Person under its
control or any Environmental Liability arising thereunder, or a Release of
Hazardous Materials on, at, in, under, above, to, from or about any of its Real
Estate, that, in each case, could reasonably be expected to have a Material
Adverse Effect, then each Credit Party and its Subsidiaries shall, upon Agent's
(or, in the case of Canadian Borrower, Canadian Agent's) written request (i)
cause the performance of such environmental audits including subsurface sampling
of soil and groundwater, and preparation of such environmental reports, at
Borrowers' expense, as Agent (or, in the case of Canadian Borrower, Canadian
Agent) may from time to time reasonably request, which shall be conducted by
reputable environmental consulting firms reasonably acceptable to Agent (or, in
the case of Canadian Borrower, Canadian Agent) and shall be in form and
substance reasonably acceptable to Agent (or, in the case of Canadian Borrower,
Canadian Agent), and (ii) permit Agent (or, in the case of Canadian Borrower,
Canadian Agent) or its representatives to have access to all Real Estate for the
purpose of conducting such environmental audits and testing as Agent (or, in the
case of Canadian Borrower, Canadian Agent) deems appropriate, including
subsurface sampling of soil and groundwater. Borrowers shall reimburse Agent
(or, in the case of Canadian Borrower, Canadian Agent) for the costs of such
audits and tests and the same will constitute a part of the Obligations secured
hereunder; provided, that Canadian Borrower shall not be responsible for the
costs of any audits or tests
30
incurred with respect to U.S. Borrower. Borrowers further agree to reimburse
Agent for the actual out-of-pocket costs (including fees and expenses) of a
third party examiner retained to conduct one field examination per year (or more
if a Default or Event of Default shall have occurred and be continuing) to
determine Borrowers' compliance with FIFRA; provided, that so long as no Default
or Event of Default shall have occurred and be continuing, such audit expenses
shall not exceed $50,000 per year or the Dollar Equivalent thereof; provided
further that Canadian Borrower shall not be responsible for any such charges,
fees and expenses incurred with respect to U.S. Borrower.
2.6 Landlords' Agreements, Mortgagee Agreements, Bailee Letters and Real
Estate Purchases Each Credit Party shall use reasonable efforts to obtain a
landlord's agreement, mortgagee agreement or bailee letter, as applicable, from
the lessor of each leased property, mortgagee of owned property or bailee with
respect to any warehouse, processor or converter facility or other location
where Collateral is stored or located, which agreement or letter shall be
reasonably satisfactory in form and substance to Agent (or, in the case of
Canadian Borrower, Canadian Agent). With respect to such locations or warehouse
space leased or owned as of the Closing Date and thereafter, if Agent (or, in
the case of Canadian Borrower, Canadian Agent) has not received a landlord or
mortgagee agreement or bailee letter reasonably satisfactory in form and
substance as of the Closing Date (or, if later, as of the date such location is
acquired or leased), the Eligible Inventory at that location shall, in Agent's
(or, in the case of Canadian Borrower, Canadian Agent's) discretion, be subject
to such Reserves as may be established by Agent (or, in the case of Canadian
Borrower and its Wholly-Owned Domestic Subsidiaries, Canadian Agent) in
accordance with the Compendium of Commercial Finance Law published by the
Commercial Finance Association, as updated from time to time. After the Closing
Date, no real property or warehouse space shall be leased by any Credit Party or
its Subsidiary and no Inventory shall be shipped to a processor or converter
under arrangements established after the Closing Date without the prior written
consent of Agent (or, in the case of Canadian Borrower, Canadian Agent), which
consent shall not be unreasonably withheld or delayed, but in Agent's (or, in
the case of Canadian Borrower, Canadian Agent's) reasonable credit judgment, may
be conditioned upon the exclusion from the Borrowing Base of Eligible Inventory
at that location, the establishment of Reserves, or unless and until a
satisfactory landlord agreement or bailee letter, as appropriate, shall first
have been obtained with respect to such location. For purposes hereof, it is
acknowledged that a landlord agreement substantially in the form of Exhibit
2.6(a), a bailee letter substantially in the form of Exhibit 2.6(b) or a
mortgagee agreement substantially in the form of Exhibit 2.6(c), as applicable,
shall be deemed to be satisfactory for purposes of complying with Section 2.6.
Borrower Representative shall promptly notify Agent if any lease for a leased
location where Eligible Inventory with a book value in excess of $500,000 is
located is terminated or is threatened to be terminated.
2.7 Conduct of Business. Each Credit Party shall at all times maintain,
preserve and protect all of its material assets and properties used or useful in
the conduct of its business in its good faith judgment, and keep the same in
good repair, working order and condition in all material respects (taking into
consideration ordinary wear and tear) and from time to time make, or cause to be
made, all necessary or appropriate repairs, replacements and improvements
thereto consistent with industry practices; and transact business only in such
corporate and trade names
31
as are set forth in Schedule 2.7 or otherwise disclosed to Agent from time to
time pursuant to the Collateral Documents.
2.8 Maintenance of Accounts. If an Account owing to Canadian Borrower or
its Wholly-Owned Subsidiaries includes a charge for any tax payable to any
Governmental Authority, Canadian Agent is authorized, in its sole discretion, to
pay the amount thereof to the proper taxing authority for the account of the
Canadian Borrower and to charge Canadian Borrower therefor, except for taxes
that (i) are being contested in good faith with reasonable diligence and by
appropriate proceedings and with respect to which Canadian Borrower maintains
reasonable reserves on its books therefor and (ii) would not reasonably be
expected to result in any Lien other than a Permitted Encumbrance.
Notwithstanding the foregoing, if the Canadian Agent releases to Canadian
Borrower an amount in respect of goods and services taxes and sales taxes that
are included in each Account, Canadian Borrower shall immediately remit such
amount to the proper taxing authority and, if requested by the Canadian Agent,
provide the Canadian Agent with a receipt therefor. In no event shall Agents (or
the fonde de pouvoir, as the case may be) or any Lender be liable for any taxes
to any Government Authority that may be due by Borrowers.
2.9 Canadian Pension and Benefit Plans. For each existing Canadian Pension
Plan of Canadian Borrower or any of its Subsidiaries, Canadian Borrower or
Subsidiary, as applicable, shall ensure that such plan retains its registered
status under and is administered in a timely manner in all material respects in
accordance with the applicable pension plan text, funding agreement, the ITA and
all other applicable laws, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
(i) For each Canadian Pension Plan hereafter adopted by
Canadian Borrower or any of its Subsidiaries which is required to be registered
under the ITA or any other applicable laws, that Canadian Borrower or
Subsidiary, as applicable, shall use its best efforts to seek and receive
confirmation in writing from the applicable governmental authorities to the
effect that such plan is unconditionally registered under the ITA and such other
applicable laws, except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
(ii) For each existing and hereafter adopted Canadian Pension
Plan and Canadian Benefit Plan of Canadian Borrower or any of its Subsidiaries,
Canadian Borrower or Subsidiary, as applicable, shall in a timely fashion
perform in all material respects all obligations (including fiduciary, funding,
investment and administration obligations) required to be performed in
connection with such plan and the funding media therefor, except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.
(iii) Each Borrower and each Subsidiary of such Borrower shall
deliver to Canadian Agent, if requested by Canadian Agent, promptly after the
filing thereof by such Borrower or Subsidiary, as applicable, with any
applicable governmental authority, copies of each annual and other return,
report or valuation with respect to each Canadian Pension Plan of such Borrower
or Subsidiary, as applicable.
32
(iv) Each Credit Party shall deliver to Canadian Agent promptly
after receipt thereof, a copy of any direction, order, notice, ruling or opinion
that any Credit Party may receive from any applicable Governmental Authority
with respect to any Canadian Pension Plan; and notification within 30 days of
any increases having a cost to any Credit Party in excess of $250,000 per annum
or the Dollar Equivalent thereof, in the benefits of any existing Canadian
Pension Plan or Canadian Benefit Plan, or the establishment of any new Canadian
Pension Plan or Canadian Benefit Plan, or the commencement of contributions to
any such plan to which such Credit Party was not previously contributing.
2.10 Supplier Rebates. Borrowers shall promptly notify Agents of any
material reduction in, or change in the timing of the payment of, any material
Supplier Rebate.
2.11 Further Assurances.
(a) Each Credit Party shall, from time to time, execute such
guaranties, financing statements, documents, security agreements and reports as
Agent, Canadian Agent or Requisite Lenders at any time may reasonably request to
evidence, perfect or otherwise implement the guaranties and security for
repayment of the Obligations contemplated by the Loan Documents.
(b) In the event any Credit Party acquires a fee interest in real
property after the Closing Date, and such fee interest has a fair market value
in excess of $1,000,000 or the Dollar Equivalent thereof at the time when it is
acquired, such Credit Party shall deliver to Agent (or, in the case of Canadian
Borrower, Canadian Agent) a fully executed mortgage or deed of trust over such
real property in substantially the form attached hereto as Exhibit 2.11(b)
(subject to any state law requirements) or in such other form as may be in form
and substance satisfactory to Agent (or, in the case of Canadian Borrower,
Canadian Agent) in its reasonable credit judgment and, in addition to delivering
such mortgage or deed of trust, for any real property in which any Credit Party
acquires a fee interest which is used as a blending or manufacturing facility,
such Credit Party shall also deliver to Agent such mortgagee title insurance
policies, surveys, appraisals, evidence of insurance, legal opinions,
environmental assessments and other documents and certificates as shall be
required by Agent (or, in the case of Canadian Borrower, Canadian Agent) in its
reasonable credit judgment.
(c) Each Credit Party shall, within ten (10) Business Days after any
Person becomes a Subsidiary of such Credit Party (provided that this shall not
be construed to constitute consent by any of the Lenders to any transaction
referred to above which is not expressly permitted by the terms of this
Agreement), (i) cause such Person to guaranty the Obligations (or, in the case
of a Canadian Subsidiary, the Obligations solely of the Canadian Borrower) and
to grant to Agent (or, in the case of Canadian Borrower, Canadian Agent), for
the benefit of Agent (or, in the case of Canadian Borrower, Canadian Agent) and
Lenders, a security interest in the real, personal and mixed property of such
Person to secure the Obligations (or, in the case of a Canadian Subsidiary, the
Obligations solely of the Canadian Borrower and (ii) pledge, or cause to be
pledged, to Agent (or, in the case of pledges of Stock by Canadian Borrower or
any of its Subsidiaries, Canadian Agent), for the benefit of Agent (or, in the
case of pledges of Stock by
33
Canadian Borrower or any of its Subsidiaries, Canadian Agent) and Lenders, all
of the Stock of such Person to secure the Obligations (or, in the case of
pledges of Stock by Canadian Borrower or any of its Subsidiaries, the
Obligations solely of the Canadian Borrower); provided that if such Person is
not a direct or indirect Domestic Subsidiary of U.S. Borrower or Canadian
Borrower, such Person shall not be obligated to guaranty the Obligations or
grant to the Agent a security interest in the real, personal and mixed property
of such Person to secure the Obligations and the pledge of such Person's Stock
to Agent shall be limited to 66% of the voting Stock and 100% of the non-voting
Stock of such Person. The documentation for such guaranty, security and pledge
shall be substantially similar to the Loan Documents executed concurrently
herewith with such modifications as are reasonably requested by Agent, but all
such documentation shall be substantially the same in form, scope and substance
as the corresponding Loan Documents delivered as of the Closing Date.
Furthermore, limitations on perfection of Liens on real estate consistent with
those applied as of the Closing Date will continue to be applied.
SECTION 3.
NEGATIVE COVENANTS
For purposes of this Section 3, each reference to Agent shall be
deemed to refer to (i) in the case of Canadian Borrower, Canadian Agent and (ii)
in the case of any other Credit Party, Agent. Each Credit Party executing this
Agreement jointly and severally agrees as to all Credit Parties that from and
after the date hereof until the Termination Date:
3.1 Indebtedness. The Credit Parties shall not and shall not cause or
permit their Subsidiaries directly or indirectly to create, incur, assume, or
otherwise become or remain directly or indirectly liable with respect to any
Indebtedness (other than pursuant to a Contingent Obligation permitted under
Section 3.4) except:
(a) the Obligations;
(b) Indebtedness consisting of intercompany loans and advances made
by any Borrower to any Credit Party (other than Holdings and any Inactive
Subsidiary) or by any such Credit Party to any other Credit Party; provided,
that, except in the case of Indebtedness described in Section 3.5(b)(ii): (i)
such intercompany loans shall not be evidenced by promissory notes; (ii)
Borrowers shall record all intercompany transactions on their books and records
in a manner reasonably satisfactory to Agent (or, if Canadian Borrower is payee,
Canadian Agent); (iii) at the time any such intercompany loan or advance is made
by such Borrower or Credit Party and after giving effect thereto, such Borrower
or Credit Party shall be Solvent; and (iv) the aggregate balance of all such
intercompany loans owing to U.S. Borrower and its Wholly-Owned Domestic
Subsidiaries by Canadian Borrower and its Domestic Subsidiaries together with
the aggregate cash equity contributions by U.S. Borrower to Canadian Borrower
(net of distributions by Canadian Borrower to U.S. Borrower) after the Closing
Date and permitted by Section 3.3(l) shall not exceed $25,000,000 or the Dollar
Equivalent thereof at any time;
34
(c) unsecured Indebtedness of U.S. Borrower and the Guarantors under
the Bridge Loan Agreement ("Bridge Loan Agreement") dated as of the Closing Date
among U.S. Borrower, UBS Securities LLC, as Arranger, UBS AG, Stamford Branch as
Administrative Agent and the other parties thereto, in an aggregate principal
amount of up to $225,000,000 plus additional principal amounts paid in kind in
lieu of cash (the "Bridge Loans"), and any refinancings of such Indebtedness
(including, without limitation, by the issuance of the "Exchange Notes"
referenced in the Bridge Loan Agreement or by the issuance of other senior or
subordinated notes); provided, that any such refinancing indebtedness (i) shall
not have a maturity shorter than seven and one-half years, (ii) shall have an
interest rate no greater than 13% per annum, of which no more than 11.5% per
annum may be payable in cash (in each case, without giving effect to any default
rate) and (iii) shall be in a principal amount not to exceed $225,000,000, plus
additional principal amounts payable in kind in lieu of cash from time to time,
unless such incurrence is otherwise permitted by another exception in this
Agreement.
(d) Indebtedness not to exceed $15,000,000 or the Dollar Equivalent
thereof (in addition to the Indebtedness described in clause (e) or (l) below)
in the aggregate at any time outstanding secured by purchase money Liens or
incurred with respect to Capital Leases or synthetic leases;
(e) Indebtedness outstanding on the Closing Date and listed on
Schedule 3.1 (as reduced by any repayments thereof before, on or after the
Closing Date), without giving effect to any subsequent extension, renewal or
refinancing thereof;
(f) Indebtedness under (i) Interest Rate Agreements entered into to
protect any Borrower or Subsidiary thereof against fluctuations in interest
rates in respect of Indebtedness otherwise permitted under this Agreement or
(ii) other hedging agreements providing protection against fluctuations in
currency values or commodity prices in connection with any Borrower's or any of
its Subsidiaries' operations, so long as management of such Borrower or such
Subsidiary, as the case may be, has determined that the entering into of any
such hedging agreement is a bona fide hedging activity (and is not for
speculative purposes);
(g) Indebtedness of any Borrower or any of its Subsidiaries that may
be deemed to exist in connection with the Acquisition Agreement and the Related
Transactions Documents or acquisition agreements with respect to Permitted
Acquisitions consisting of earn-outs, working capital adjustments or
indemnities;
(h) Indebtedness with respect to performance bonds, surety bonds,
appeal bonds or customs bonds required in the ordinary course of business or in
connection with the enforcement of rights or claims of any Borrower or any of
its Subsidiaries or in connection with judgments that do not result in a Default
or an Event of Default, provided that the aggregate outstanding amount of all
such performance bonds, surety bonds, appeal bonds and customs bonds permitted
by this clause (h) shall not at any time exceed $15,000,000;
(i) any other unsecured Subordinated Debt not to exceed $50,000,000
in the aggregate at any time outstanding;
35
(j) unsecured, subordinated high yield notes, the proceeds of which
are used solely to repay the Revolving Loans and which result in the reduction
of the Revolving Loan Commitment on a dollar-for-dollar basis;
(k) Permitted Acquisition Debt; provided that after giving effect to
the incurrence thereof, on a pro forma basis as of the most recently ended
Fiscal Quarter preceding the proposed date of incurrence, the Leverage Ratio
would not have exceeded 5.0 to 1.0;
(l) Indebtedness incurred in connection with sale-leasebacks
permitted under Section 3.17;
(m) Indebtedness of any Borrower or any of its Subsidiaries under any
commodity hedge agreement, foreign exchange contract, currency swap agreement,
interest rate swap, cap or collar agreement or other similar agreement or
arrangement designed to alter the risks arising from fluctuations in commodity
prices, currency values or interest rates, in each case whether contingent or
matured, so long as such agreement is not speculative in nature;
(n) Indebtedness of any Borrower or any of its Subsidiaries arising
in connection with the third-party financing of insurance premiums in the
ordinary course of business not to exceed $15,000,000 at any time outstanding;
(o) other unsecured Indebtedness in an amount not to exceed
$10,000,000;
(p) Indebtedness incurred by Holdings;
(q) Indebtedness described in Section 3.5(b)(ii); and
(r) refinancings, refundings, extensions and renewals of the
foregoing that do not accelerate the scheduled dates for payment thereof,
increase the principal amounts thereof, materially increase the interest rates
applicable thereto or enhance the collateral therefor or priority thereof.
3.2 Liens and Related Matters.
-------------------------
(a) No Liens. The Credit Parties shall not and shall not cause or
permit their Subsidiaries to directly or indirectly create, incur, assume or
permit to exist any Lien on or with respect to any property or asset of such
Credit Party or any such Subsidiary, whether now owned or hereafter acquired, or
any income or profits therefrom, except Permitted Encumbrances (including,
without limitation, those Liens constituting Permitted Encumbrances existing on
the date hereof and renewals and extensions thereof, as set forth on Schedule
3.2).
(b) No Negative Pledges; No Restrictions on Subsidiary Distributions
to Borrowers. Except as provided herein, the Credit Parties shall not and shall
not cause or permit their Subsidiaries to directly or indirectly create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any such Subsidiary to:
(1) create or assume any Lien upon its properties or assets, whether now owned
or
36
hereafter acquired; (2) pay dividends or make any other distribution on any of
such Subsidiary's Stock owned by any Borrower or any other Subsidiary; (3) pay
any Indebtedness owed to any Borrower or any other Subsidiary; (4) make loans or
advances to any Borrower or any other Subsidiary; or (5) transfer any of its
property or assets to any Borrower or any other Subsidiary; in each case except
for such encumbrances or restrictions existing under or by reason of (i)
applicable law, (ii) this Agreement and the other Loan Documents, (iii)
provisions restricting subletting or assignment of any lease governing a
leasehold interest of any Borrower or a Subsidiary of any Borrower entered into
in the ordinary course of business and consistent with past practices, (iv)
provisions restricting assignment of any contract entered into by any Borrower
or any Subsidiary of any Borrower in the ordinary course of business or in
connection with the Acquisition (including, without limitation, the Acquisition
Agreement and the agreements, documents and instruments contemplated thereby) or
any Permitted Acquisition, (v) customary provisions restricting the assignment
of licensing agreements, management agreements or franchise agreements entered
into by any Borrower or any of its Subsidiaries in the ordinary course of
business, (vi) restrictions applicable to either of the Existing Joint Ventures,
(vii) any restriction or encumbrance with respect to a Subsidiary imposed
pursuant to an agreement which has been entered into for the sale or disposition
of all or substantially all of the equity interests or assets of such
Subsidiary, so long as such sale or disposition of all or substantially all of
the equity interests or assets of such Subsidiary is permitted under this
Agreement, (viii) the documentation prepared in connection with the issuance of
the Senior Notes and refinancings thereof, so long as such restrictions are not
materially more restrictive than those existing prior to the refinancing,
provided, that such encumbrances or restrictions are no more restrictive than
those limitations contained herein, (ix) restrictions contained in agreements
governing Indebtedness that do not restrict Agent's and Lenders' ability to
obtain first priority perfected Liens on the assets of any Credit Party, subject
to Permitted Encumbrances and do not restrict the payment of the Loans and the
other Obligations, (x) restrictions on the transfer of assets securing purchase
money obligations, industrial revenue bonds and Capital Lease Obligations
otherwise permitted under this Agreement, (xi) restrictions on the transfer of
assets pursuant to executory contracts for the sale thereof, (xii) for Permitted
Encumbrances of the type specified in clause (f) of the definition thereof and
(xiii) restrictions on cash or other deposits under contracts for the purchase
of Inventory or Equipment entered into in the ordinary course of business.
3.3 Investments. The Credit Parties shall not and shall not cause or
permit their Subsidiaries to directly or indirectly make or own any Investment
in any Person except:
(a) Borrowers and their Subsidiaries may make and own Investments in
Cash Equivalents subject to Control Agreements in favor of Agent (or, in the
case of Canadian Borrower, Canadian Agent);
(b) Credit Parties may make intercompany loans to other Credit
Parties to the extent permitted under Section 3.1 and Holdings and its
Subsidiaries may be holders of Indebtedness described in Section 3.5(b)(ii);
37
(c) Borrowers and their Subsidiaries may make loans and advances to
employees for moving, entertainment, travel and other similar expenses in the
ordinary course of business and for the purchase of common Stock and options not
to exceed $5,000,000 or the Dollar Equivalent thereof in the aggregate at any
time outstanding;
(d) Borrowers and their Subsidiaries may acquire and hold receivables
owing to any of them, if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms (including
the dating of receivables) of any such Borrower or any such Subsidiary;
(e) Borrowers and their Subsidiaries may acquire and own investments
(including debt obligations and equity securities) received in connection with
the bankruptcy or reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business;
(f) Interest Rate Agreements and other hedging agreements entered
into in compliance with Section 3.1 shall be permitted;
(g) Investments in existence on the Closing Date and listed on
Schedule 3.3 shall be permitted, without giving effect to any additions thereto
or replacements thereof, it being understood that any additional Investments
made with respect to such existing Investments shall be permitted only if
independently permitted under the other provisions of this Section 3.3;
(h) Holdings, any Borrower or any Subsidiary of Holdings or any
Borrower may acquire and hold obligations of one or more officers or other
employees of Holdings or any Borrower or any Subsidiary of Holdings or any
Borrower in connection with such officers' or employees' acquisition of shares
of Holdings common Stock, so long as no cash is actually advanced by Holdings or
any Borrower or any Subsidiary of Holdings or any Borrower to such officers or
employees in connection with the acquisition of any such obligations;
(i) any Borrower and any of its Wholly-Owned Domestic Subsidiaries
may make Permitted Acquisitions;
(j) Borrowers and their Subsidiaries may own the Stock of their
respective Subsidiaries in existence on the Closing Date (after giving effect to
the Related Transactions) or created or acquired in accordance with the terms of
this Agreement (so long as all amounts invested in such Subsidiaries are
independently justified under another provision of this Section 3.3);
(k) Borrowers and their Subsidiaries may make advances in the form of
a prepayment of expenses, so long as such expenses were incurred in the ordinary
course of business and are being paid in accordance with customary trade terms
of such Borrower or such Subsidiary;
38
(l) (i) any Credit Party may make cash equity contributions to any
other Credit Party that is a Wholly-Owned Domestic Subsidiary of the Person
making such contribution other than Inactive Subsidiaries and (ii) any Credit
Party may make non-cash equity contributions to any other Credit Party that is a
Wholly-Owned Subsidiary of the Credit Party making such contribution other than
Inactive Subsidiaries, so long as any security interest granted to the Agent for
the benefit of Lenders in any assets so contributed (or in any deposit accounts
or securities accounts in which such assets are held) shall remain in full force
and effect and be perfected (to at least the same extent as in effect
immediately prior to such contribution) and all actions required to maintain
said perfected status have been taken; provided, that the aggregate cash equity
contributions by U.S. Borrower to Canadian Borrower (net of distributions by
Canadian Borrower to U.S. Borrower) after the Closing Date together with the
intercompany loans permitted under Section 3.1(b)(iv) shall not exceed
$25,000,000 or the Dollar Equivalent thereof at any time;
(m) Investments in joint ventures, including increased Investments in
Existing Joint Ventures, not to exceed $25,000,000 in the aggregate; provided
that Credit Parties shall promptly take all steps reasonably necessary to enable
Agent to obtain perfected Liens on that portion of the Stock of any joint
venture owned by a Credit Party and formed after the Closing Date;
(n) Investments in promissory notes and other evidence of
Indebtedness received as partial consideration for any Asset Dispositions
permitted under Section 3.7; and
(o) other Investments which may be made subject to the conditions
applicable to Permitted Distributions set forth in Section 3.5(d); provided,
that, the aggregate amount of such Investments (net of returns on such
Investments), as of any date of determination, shall not exceed the amount of
Permitted Distributions permitted pursuant to Section 3.5(d), shall reduce the
amount of Permitted Distributions which may be made pursuant to Section 3.5(d)
and the amount of Subordinated Debt which may be prepaid pursuant to Section
3.18 on a dollar-for-dollar basis, and Credit Parties shall promptly take all
steps reasonably necessary to enable Agent to obtain first priority perfected
Liens on such Investments, including the Stock of any joint venture owned or
acquired by a Credit Party.
3.4 Contingent Obligations. The Credit Parties shall not and shall not
cause or permit their Subsidiaries to directly or indirectly create or become or
be liable with respect to any Contingent Obligation except:
(a) Letter of Credit Obligations;
(b) those resulting from endorsement of negotiable instruments for
collection in the ordinary course of business;
(c) those existing on the Closing Date and described in Schedule 3.4;
39
(d) those arising under indemnity agreements to title insurers to
cause such title insurers to issue to Agent (or, in the case of Canadian
Borrower, Canadian Agent) mortgagee title insurance policies;
(e) those arising under Interest Rate Agreements or other hedging
agreements entered into in compliance with Section 3.1;
(f) those incurred with respect to Indebtedness permitted by Section
3.1; provided, that any such Contingent Obligation is subordinated to the
Obligations to the same extent as the Indebtedness to which it relates is
subordinated to the Obligations and the Credit Parties other than Holdings
shall not incur Contingent Obligations with respect to Indebtedness
incurred by Holdings pursuant to Section 3.1(p);
(g) Contingent Obligations of (x) any Borrower or any of its
Subsidiaries as a guarantor of the lessee under any lease pursuant to which
any of its Wholly-Owned Subsidiaries is the lessee so long as such lease is
otherwise permitted under this Agreement, (y) any Borrower or any of its
Subsidiaries as a guarantor of any Capital Lease Obligation to which a
joint venture is a party or any contract entered into by such joint venture
in the ordinary course of business, provided that the maximum liability of
such Borrower or any of its Subsidiaries in respect of any obligations as
described pursuant to this clause (y) is permitted as an Investment on such
date pursuant to the requirements of this Agreement, and (z) any Borrower
or any of its Subsidiaries, which Contingent Obligations may be deemed to
exist in connection with agreements (including, without limitation, the
Acquisition Agreement and the Related Transactions Documents) relating to
the Acquisition or Permitted Acquisitions or transactions permitted under
Section 3.7 (including any obligation to pay the purchase price therefor
and any indemnification, purchase price adjustments and similar
obligations);
(h) Contingent Obligations with respect to performance bonds, surety
bonds, appeal bonds or customs bonds required in the ordinary course of
business or in connection with the enforcement of rights or claims of any
Borrower or any of its Subsidiaries or in connection with judgments that do
not result in an Event of Default, provided that the aggregate outstanding
amount of all such performance bonds, surety bonds, appeal bonds and
customs bonds permitted by this clause (g) shall not at any time exceed
$15,000,000 or the Dollar Equivalent thereof;
(i) any other Contingent Obligations not expressly permitted by
clauses (a) through (h) above, so long as any such other Contingent
Obligations, in the aggregate at any time outstanding, do not exceed
$10,000,000 or the Dollar Equivalent thereof; and
(j) refinancings, refundings, extensions and renewals and/or
replacements of any of the above which do not accelerate the scheduled
dates for payment thereof, increase the amounts thereof, materially
increase any interest rate or fees applicable thereto or enhance the
collateral therefor or priority thereof.
40
3.5 Restricted Payments. The Credit Parties shall not and shall not cause
or permit their Subsidiaries to directly or indirectly declare, order, pay, make
or set apart any sum for any Restricted Payment, except that:
(a) U.S. Borrower may make payments and distributions (i) to Holdings
that are used by Holdings to pay federal and state income taxes (including
used by Holdings to compensate a Subsidiary for the use of a tax benefit by
the Holdings tax group) then due and owing, franchise taxes and other
similar licensing expenses incurred in the ordinary course of business,
professional fees, audit expenses and other expenses related to the
maintenance of Holdings as a holding company or that (ii) U.S. Borrower or
Holdings is required to pay pursuant to the terms of the Acquisition
Agreement and the Ancillary Agreements (as such term is defined in the
Acquisition Agreement), the Management Consulting Agreement (subject to
Section 3.8(f)) or applicable law; provided, that such Borrower's aggregate
contribution to taxes as a result of the filing of a consolidated or
combined return by Holdings shall not be greater, nor the aggregate receipt
of tax benefits less, than they would have been had such Borrower not filed
a consolidated or combined return with Holdings;
(b) (i) Wholly-Owned Subsidiaries of a Borrower may make Restricted
Payments to such Borrower and/or to the parent company of the respective
Subsidiary and (ii) Canadian Subsidiaries of Holdings may make Restricted
Payments to Holdings or any of its U.S. Subsidiaries and/or to the direct
or indirect parent company of the respective Canadian Subsidiary,
including, without limitation, Restricted Payments in the form of
promissory notes or other debt obligations with respect to which any
Canadian Subsidiary of Holdings is the obligor;
(c) Borrowers may make Restricted Payments to Holdings to permit
Holdings to repurchase Stock of Holdings owned by employees of Borrowers or
their Subsidiaries whose employment has terminated; provided, that such
Restricted Payments shall not exceed $2,500,000 in any Fiscal Year plus a
carry-forward of unused amounts from prior years or $12,500,000 in the
aggregate;
(d) Borrowers and Holdings may make Restricted Payments not expressly
permitted by clauses (a) through (d) above ("Permitted Distributions") at
any time after May 24, 2004; provided, that (i) at no time shall the
aggregate amount of such Permitted Distributions (without duplication)
exceed $25,000,000, plus up to 50% of the cumulative positive Consolidated
Net Income (net of losses) of the Borrowers and their Subsidiaries since
the Closing Date plus the net amount of cash invested in the Stock of
Holdings since the Closing Date (less Investments pursuant to Section
3.3(o) and prepayments or repurchases of Senior Notes or Subordinated Debt
pursuant to Section 3.18), (ii) Aggregate Borrowing Availability both
immediately prior to and immediately following any such Permitted
Distribution shall be no less than $40,000,000 and (iii) at the time of any
such Permitted Distribution, no Event of Default shall have occurred and be
continuing or would result after giving effect to such Permitted
Distribution; and
41
(e) any Subsidiary of any Credit Party that is not a Wholly-Owned
Subsidiary may make Restricted Payments to its shareholders or partners
generally, so long as the Borrower or the Subsidiary that owns the equity
interest or interests in the Subsidiary making such Restricted Payments
receives at least its proportionate share thereof (based upon its relative
holdings of equity interest in the Subsidiary making such Restricted
Payments and taking into account the relative preferences, if any, of the
various classes of equity interests in such Subsidiary or the terms of any
agreements applicable thereto).
3.6 Restriction on Fundamental Changes. (I) The Credit Parties shall not
and shall not cause or permit their Subsidiaries to directly or indirectly: (A)
amend, modify or waive any term or provision of its organizational documents,
including its articles of incorporation, certificates of designations pertaining
to preferred stock, by-laws, partnership agreement or operating agreement in a
manner which would aversely affect Agent and Lenders in any material respect
unless required by law; (B) enter into any transaction of merger or
consolidation except, upon not less than five (5) Business Days' prior written
notice to Agent (or, in the case of Canadian Borrower and its Subsidiaries,
Canadian Agent), any Wholly-Owned Subsidiary (other than Canadian Borrower) of a
Borrower may be merged with or into such Borrower (provided, that such Borrower
is the surviving entity) or be merged or consolidated with or into any other
Wholly-Owned Subsidiary of such Borrower; (C) liquidate, wind-up or dissolve
itself (or suffer any liquidation or dissolution) except, upon not less than
five (5) Business Days' prior written notice to Agent (or, in the case of
Canadian Borrower and its Subsidiaries, Canadian Agent), any Wholly-Owned
Subsidiary (other than Canadian Borrower) of a Borrower may liquidate, wind-up
or dissolve itself (or suffer any liquidation or dissolution) into such Borrower
or any other Wholly-Owned Subsidiary of such Borrower; or (D) acquire by
purchase or otherwise all or any substantial part of the business or assets of
any Person other than another Credit Party.
(II) Notwithstanding the foregoing, any Borrower or a Domestic
Wholly-Owned Subsidiary thereof that is a Credit Party may acquire all or
substantially all of the assets of any Person (a "Target") or operating division
of a Target or 100% of the outstanding stock of any Target or cause any Target
to be merged with it or liquidated, wound-up or dissolved into it subject to
compliance with the following conditions (in each case, a "Permitted
Acquisition"):
(a) Agent shall receive at least fourteen (14) days' prior written
notice of such proposed Permitted Acquisition, which notice shall include a
reasonably detailed description of such proposed Permitted Acquisition;
(b) such Permitted Acquisition shall only involve assets comprising a
business or those assets of a business of the type engaged in by Borrowers as of
the Closing Date or otherwise permitted under Section 3.9;
(c) such Permitted Acquisition shall be consensual and shall have
been approved by the Target's board of directors;
42
(d) no additional Indebtedness or Contingent Obligations shall be
incurred, assumed or otherwise be reflected on a consolidated balance sheet of
Borrowers and Target after giving effect to such Permitted Acquisition, except
(i) industrial revenue bonds, pollution control bonds and other tax-exempt
financing, Capital Leases, installment purchase Indebtedness and term loans, in
each case secured solely by Fixtures, Equipment and/or Real Estate, and not
incurred in anticipation of such Permitted Acquisition ("Permitted Acquisition
Debt") and (ii) Loans made hereunder;
(e) the sum of all amounts payable in connection with all Permitted
Acquisitions (including, without duplication, all earn-outs, working capital
adjustments, transaction costs and all Permitted Acquisition Debt, and
Contingent Obligations incurred or assumed in connection therewith or otherwise
reflected on a consolidated balance sheet of Borrowers and Target) shall not
exceed (i) $50,000,000 in the aggregate per year or (ii) more than (A)
$25,000,000 in the aggregate per year and (B) $50,000,000 in the aggregate
during the term of this Agreement, for International Acquisitions and Canadian
Acquisitions collectively;
(f) the business and assets acquired in such Permitted Acquisition
shall be free and clear of all Liens (other than Permitted Encumbrances);
(g) (i) prior to or within ten (10) Business Days after the closing
of any U.S. Acquisition, Agent will be granted Liens in accordance with Section
2.11 in substantially all of the assets acquired pursuant thereto or in all or
substantially all of the assets of the Target, all of the Stock of Target (in a
stock purchase or merger resulting in a new Subsidiary) shall have been pledged
to Agent, and Target (in a Stock purchase or merger resulting in a new
Subsidiary) shall have become a Guarantor and a Credit Party hereunder;
(ii) prior to or within ten (10) Business Days after the closing
of any Canadian Acquisition, Canadian Agent will be granted Liens in accordance
with Section 2.11 in substantially all of the assets acquired pursuant thereto
or in all or substantially all of the assets of the Target, all of the Stock of
Target (in a stock purchase or merger resulting in a new Subsidiary) shall have
been pledged to Canadian Agent, and Target (in a Stock purchase or merger
resulting in a new Subsidiary) shall have become a Guarantor (with respect to
the Canadian Loans only) and a Credit Party hereunder; and
(iii) prior to or within ten (10) Business Days after the closing
of any International Acquisition, the Credit Party making such acquisition shall
pledge to Agent 66% of the voting stock and 100% of the nonvoting Stock of the
Target;
(h) Concurrently with delivery of the notice referred to in clause
(a) above, Borrowers shall have delivered to Agent, in form and substance
reasonably satisfactory to Agent:
(i) a pro forma consolidated balance sheet, income statement,
cash flow statement and Borrowing Availability summary of Holdings and its
Subsidiaries (the "Acquisition Pro Forma"), based on the most recent monthly
financial statements, which shall be complete and shall fairly present in all
material respects the assets, liabilities, financial condition
43
and results of operations of Holdings and its Subsidiaries in accordance with
GAAP consistently applied, but taking into account such Permitted Acquisition
and the funding of all Loans in connection therewith, and such Acquisition Pro
Forma and the Acquisition Projections (as hereinafter defined) shall reflect
that (w) Borrowers would have been in compliance with Sections 4.1 and 4.2 (as
if Aggregate Borrowing Availability had been less than $40,000,000) after giving
effect to such Permitted Acquisition and all Indebtedness incurred or assumed in
connection therewith (as if such Permitted Acquisition had occurred on the first
day of the relevant 12-month measuring period preceding the Permitted
Acquisition), (x) Aggregate Borrowing Availability (excluding that portion of
Aggregate Borrowing Availability provided by the In-Season Overadvance and
excluding any portion of the Revolving Loans constituting utilization of the
In-Season Overadvance) at any time during the 365-day period preceding the
consummation of such Permitted Acquisition would not have been less than
$60,000,000 as if such Permitted Acquisition had occurred on the first day of
such 365-day period), (y) Aggregate Borrowing Availability (excluding that
portion of Aggregate Borrowing Availability provided by the In-Season
Overadvance) is not projected to be less than $60,000,000 at any time during the
365-day period following the consummation of such Permitted Acquisition on a pro
forma basis and (z) on a pro forma basis, no Event of Default has occurred and
is continuing or would result after giving effect to such Permitted Acquisition;
provided, that if the aggregate purchase price for any Permitted Acquisition is
less than $25,000,000, the Acquisition Pro Forma shall be limited to a pro forma
summary of Aggregate Borrowing Availability for the preceding one-year period
and the tests set forth in clause (w) above need not be met;
(ii) updated projections of Aggregate Borrowing Availability
covering the one-year period commencing on the date of such Permitted
Acquisition on a month-by-month basis (the "Acquisition Projections"), taking
into account such Permitted Acquisition;
(iii) if such Permitted Acquisition includes owned or leased real
estate, a phase I environmental audit with respect to the Target in scope and
substance consistent with the environmental audits delivered prior to the
Closing Date demonstrating that Target and its assets are not subject to any
material Environmental Liabilities; provided, that a phase I environmental audit
shall be required only if the relevant Credit Parties are not adequately
indemnified against such material Environmental Liabilities by a credit-worthy
indemnitor; and
(iv) a certificate of the chief financial officer of Borrower
Representative to the effect that: (x) the Acquisition Pro Forma fairly presents
in all material respects the financial condition of Holdings and its
Subsidiaries (on a consolidated basis) as of the date thereof after giving
effect to the Permitted Acquisition or, for Permitted Acquisitions with an
aggregate purchase price less than $25,000,000, reasonable retrospective
projections of Aggregate Borrowing Availability; and (y) the Acquisition
Projections are reasonable projections of Aggregate Borrowing Availability;
(i) at least 5 days prior to the date of such Permitted Acquisition,
Agent shall have received drafts of the acquisition agreement and related
agreements and instruments, and the final versions of such acquisition agreement
and related agreements and instruments shall not be materially more adverse to
the Credit Parties, taken as a whole, than the drafts received,
44
unless Agent receives updated drafts at least 5 days prior to the date of such
Permitted Acquisition; and
(j) at the time of such Permitted Acquisition and immediately after
giving effect thereto, no Default or Event of Default shall have occurred and be
continuing.
Notwithstanding the foregoing, the Accounts and Inventory of the
Target shall not be included in Eligible Accounts and Eligible Inventory until
Agent has received a reasonably satisfactory Collateral Audit report and
Appraisal with respect thereto. Further notwithstanding the foregoing, with
respect to any single Permitted Acquisition for which the aggregate purchase
price is less than $5,000,000, the conditions set forth in clauses (a),
(h)(except for sub-clause (iii) of (h)) and (i) need not be complied with. For
purposes of calculating the aggregate purchase price in connection with any
Permitted Acquisition, any Stock of Holdings used as consideration shall be
excluded.
3.7 Disposal of Assets or Subsidiary Stock. The Credit Parties shall not
and shall not cause or permit their Subsidiaries to directly or indirectly
convey, sell, lease, sublease, transfer or otherwise dispose of, or grant any
Person an option to acquire, in one transaction or a series of related
transactions, any of its property, business or assets, whether now owned or
hereafter acquired, except for (a) transactions not constituting Asset
Dispositions, (b) dispositions of equipment that is obsolete, uneconomic or no
longer useful (in each case in the reasonable opinion of such Credit Party), (c)
transactions between a Credit Party and another Credit Party, (d) transactions
permitted under Section 3.17 and (e) other Asset Dispositions by any Credit
Party (excluding sales of Accounts and Stock of any Subsidiary) if all of the
following conditions are met: (i) the aggregate market value of assets sold or
otherwise disposed of in any Fiscal Year does not exceed $20,000,000 or the
Dollar Equivalent thereof; (ii) the consideration received is at least equal to
the fair market value of such assets; (iii) the consideration received is cash
or Cash Equivalents for at least 75% of the sale price and promissory notes for
the balance; (iv) after giving effect to the Asset Disposition, Borrowers are in
compliance with all other terms and conditions of this Agreement; and (v) no
Event of Default then exists or would result from such Asset Disposition.
3.8 Transactions with Affiliates. The Credit Parties shall not and shall
not cause or permit their Subsidiaries to directly or indirectly enter into or
permit to exist any transaction (including the purchase, sale, lease or exchange
of any property or the rendering of any management, consulting, investment
banking, advisory or other similar services) with any Affiliate or with any
director, officer or employee of any Credit Party, except (a) as set forth on
Schedule 3.8, (b) transactions pursuant to the reasonable requirements of the
business of any such Credit Party or any of its Subsidiaries and upon fair and
reasonable terms which, to the extent such transactions involve payments or
asset transfers in excess of $500,000 in a single transaction or series of
transactions, are fully disclosed to Agent (or, in the case of Canadian
Borrower, Canadian Agent) and are no less favorable to any such Credit Party or
any of its Subsidiaries than would be obtained in a comparable arm's length
transaction with a Person that is not an Affiliate, (c) payment of reasonable
compensation to officers and employees for services actually rendered to any
such Credit Party or any of its Subsidiaries, (d) payment of
45
customary director's fees, (e) the Acquisition and transactions consummated
pursuant to the Acquisition, (f) the payment to Apollo pursuant to the
Management Consulting Agreement of management fees in connection with management
services provided to Holdings and its Subsidiaries and advisory fees in
connection with the Acquisition and Permitted Acquisitions and the reasonable
out-of-pocket expenses of Apollo incurred in connection with management services
or acquisition advice, in an aggregate amount not to exceed the amounts
specified in the Management Consulting Agreement as in effect on the date hereof
per Fiscal Year payable (i) in the case of management fees, quarterly on a pro
rata basis, (ii) in the case of advisory fees, after the closing of the
Acquisition or any Permitted Acquisition, and (iii) in the case of expenses, at
the time when such expenses are incurred; provided, that no such payments may be
made if an Event of Default has occurred and is continuing at the time of such
payment or would occur as a result thereof; provided, however, that, if any
portion of such management fees or advisory fees is not paid pursuant to the
foregoing proviso, such management fees or advisory fees shall be payable to
Apollo upon the waiver or cure of such Event of Default, (g) transactions
between a Credit Party and another Credit Party other than an Inactive
Subsidiary and subject to the limitations herein regarding transactions between
U.S. Borrower and its Subsidiaries and Canadian Borrower and its Subsidiaries,
(h) transactions between Affiliates and Holdings with respect to the Stock of
Holdings not otherwise prohibited hereunder and (i) Restricted Payments
permitted by Section 3.5.
3.9 Conduct of Business. The Credit Parties shall not and shall not cause
or permit their Subsidiaries to directly or indirectly engage in any business
other than businesses engaged in as of the Closing Date and businesses
reasonably related thereto which would not materially adversely affect (i) the
ability of Agent and Lenders to sell or otherwise dispose of the Collateral or
(ii) the Credit Parties' potential Environmental Liabilities.
3.10 [Intentionally omitted.]
---------------------
3.11 Fiscal Year. No Credit Party shall change its Fiscal Year or permit
any of its Subsidiaries to change their respective fiscal years; provided, that
upon thirty (30) days' prior notice to Agent the Credit Parties may change their
Fiscal Year (such change to be applicable to all Credit Parties included in
consolidated financial reporting under GAAP); provided further, that (i) such
change does not defer the delivery of audited financial statements required
hereunder by more than one Fiscal Quarter and (ii) Borrowers shall deliver such
financial information (including reconciliations if required under GAAP) as
Agent may reasonably request with respect to such change in Fiscal Year.
3.12 Press Release; Public Offering Materials. Each Credit Party executing
this Agreement agrees that it will not issue any press release or similar public
statement using the name of GE Capital or GE Capital Canada or their Affiliates
without at least two (2) Business Days' prior notice to GE Capital or GE Capital
Canada and without the prior written consent of GE Capital (which consent shall
not be unreasonably withheld or delayed and shall be deemed given if no
objection is made within such two (2) Business Day period). For purposes of
clarification, no such notice or consent is required with respect to any filing
with any
46
Government Authority required by applicable law. Each Credit Party consents to
the publication by Agents or any Lender of a tombstone or similar advertising
material relating to the financing transactions contemplated by this Agreement.
Agents or such Lender shall provide a draft of any such tombstone or similar
advertising material to each Credit Party for review and comment prior to the
publication thereof. Agents reserve the right to provide to industry trade
organizations information necessary and customary for inclusion in league table
measurements.
3.13 Subsidiaries. The Credit Parties may form new Subsidiaries subject to
compliance with Section 2.11(c) hereof.
3.14 Bank Accounts. The Credit Parties shall not and shall not cause or
permit their Subsidiaries to establish any new bank accounts without prior
written notice to Agent (or, in the case of Canadian Borrower, Canadian Agent)
and unless Agent (or, in the case of Canadian Borrower, Canadian Agent) and the
bank at which the account is to be opened enter into a tri-party agreement
regarding such bank account pursuant to which such bank acknowledges the
security interest of Agent (or, in the case of Canadian Borrower, Canadian
Agent) in such bank account, agrees to comply with instructions originated by
Agent (or, in the case of Canadian Borrower, Canadian Agent) directing
disposition of the funds in the bank account without further consent from such
Credit Party or Subsidiary, and agrees to limit any security interest the bank
may have in the bank account on terms satisfactory to Agent (or, in the case of
Canadian Borrower, Canadian Agent) in its reasonable credit judgment and
consistent with similar agreements entered into as of the Closing Date with
respect to bank accounts. All Credit Parties shall deposit all proceeds of
Collateral only in bank accounts subject to such tri-party agreements.
3.15 Hazardous Materials. The Credit Parties shall not and shall not cause
or permit their Subsidiaries to cause or permit a Release of any Hazardous
Material on, at, in, under, above, to, from or about any of the Real Estate
where such Release would (a) violate in any respect, or form the basis for any
Environmental Liabilities by the Credit Parties or any of their Subsidiaries
under, any Environmental Laws or Environmental Permits or (b) otherwise
adversely impact the value or marketability of any of the Real Estate or any of
the Collateral for commercial or industrial uses substantially similar to those
conducted on the Closing Date, other than such violations or Environmental
Liabilities that could not reasonably be expected to have a Material Adverse
Effect.
3.16 ERISA. The Credit Parties shall not and shall not cause or permit any
ERISA Affiliate to, cause or permit to occur an ERISA Event to the extent such
ERISA Event could reasonably be expected to have a Material Adverse Effect.
3.17 Sale-Leasebacks. The Credit Parties shall not and shall not cause or
permit any of their Subsidiaries to engage in any sale-leaseback, lease in-lease
out transaction or similar transaction involving any of its assets, other than
sale-leaseback transactions, lease in-lease out transactions and similar
transactions resulting in the incurrence of not more than $15,000,000 of
Indebtedness.
47
3.18 Prepayments of Other Indebtedness. The Credit Parties shall not,
directly or indirectly, voluntarily purchase, redeem, defease or prepay any
principal of, premium, if any, interest or other amount payable in respect of
the Senior Notes or any Subordinated Debt other than with the proceeds of the
issuance of Stock or with the proceeds of a refinancing permitted under Section
3.1(r), except that Senior Notes or Subordinated Debt may be prepaid or
repurchased subject to the conditions applicable to Permitted Distributions set
forth in Section 3.5(d); provided, that the aggregate amount of such repurchases
or prepayments, as of any date of determination, shall not exceed the amount of
Permitted Distributions permitted pursuant to Section 3.5(d) and shall reduce
the amount of Permitted Distributions which may be made pursuant to Section
3.5(d) and the amount of Investments permitted pursuant to Section 3.3(o) on a
dollar-for-dollar basis.
3.19 Inactive Subsidiaries. Notwithstanding any provision herein contained
to the contrary, the Inactive Subsidiaries shall not (i) incur any Indebtedness
other than guarantees of the Obligations and the Senior Notes or (ii) accept
transfers of assets from any other Credit Party.
SECTION 4.
FINANCIAL COVENANTS/REPORTING
-----------------------------
Borrowers covenant and agree that from and after the date hereof until
the Termination Date, Borrowers shall perform and comply with, and shall cause
each of the other Credit Parties to perform and comply with, all covenants in
this Section 4 applicable to such Person.
4.1 Minimum EBITDA. So long as Aggregate Borrowing Availability is less
than $40,000,000, Holdings and its Subsidiaries shall have EBITDA of at least
$70,000,000, measured as of the last day of each month for the trailing twelve
months then ended.
4.2 Minimum Fixed Charge Coverage Ratio. So long as Aggregate Borrowing
Availability is less than $40,000,000, Holdings and its Subsidiaries shall
maintain a Fixed Charge Coverage Ratio of not less than 1.1 to 1.0, measured as
of the last day of each month for the trailing twelve months then ended.
4.3 Financial Statements and Other Reports. Holdings and Borrowers will
maintain, and cause each of their Subsidiaries to maintain, a system of
accounting established and administered in accordance with sound business
practices to permit preparation of Financial Statements in conformity with GAAP
(it being understood that monthly and interim Financial Statements are not
required to have footnote disclosures). Borrower Representative will deliver
each of the Financial Statements and other reports described below to Agents
(and each Lender in the case of the Financial Statements and other reports
described in Sections (4.3)(a), (b), (d), (f), (g), (h), and (k)).
48
(a) Monthly Financials. As soon as available and in any event within
thirty (30) days after the end of each month (including the last month of
Borrowers' Fiscal Year), Borrower Representative will deliver (1) the
consolidated balance sheets of Borrowers and their Subsidiaries, as at the end
of such month, and the related consolidated statements of income, stockholders'
equity and cash flow for such month and for the period from the beginning of the
then current Fiscal Year of Borrower to the end of such month, (2) a report
setting forth in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the corresponding figures
from the most recent Projections for the current Fiscal Year delivered pursuant
to Section 4.3(f) and (3) a schedule of the outstanding Indebtedness for
borrowed money of Borrowers and their Subsidiaries describing in reasonable
detail each such debt issue or loan outstanding and the principal amount and
amount of accrued and unpaid interest with respect to each such debt issue or
loan.
(b) Year-End Financials. As soon as available and in any event within
ninety (90) days after the end of each Fiscal Year of Borrowers, Borrower
Representative will deliver (1) the consolidated and consolidating balance
sheets of Borrowers and their Subsidiaries, as at the end of such year, and the
related consolidated and consolidating statements of income, stockholders'
equity and cash flow for such Fiscal Year, (2) a schedule of the outstanding
Indebtedness for borrowed money of Borrowers and their Subsidiaries describing
in reasonable detail each such debt issue or loan outstanding and the principal
amount and amount of accrued and unpaid interest with respect to each such debt
issue or loan and (3) a report with respect to the consolidated Financial
Statements from a firm of Certified Public Accountants selected by Borrowers and
reasonably acceptable to Agents, which report shall be prepared in accordance
with Statement of Auditing Standards No. 58 (the "Statement") "Reports on
Audited Financial Statements" and such report shall be "Unqualified" as to going
concern and scope of audit (as such term is defined in such Statement).
(c) Accountants' Reports. Promptly upon receipt thereof, Borrower
Representative will deliver, if such accountants consent to such delivery,
copies of all significant reports submitted by Borrowers' firm of certified
public accountants in connection with each annual, interim or special audit or
review of any type of the Financial Statements or related internal control
systems of Borrowers or their Subsidiaries made by such accountants, including
any comment letter submitted by such accountants to management in connection
with their services.
(d) Additional Deliveries. Borrower Representative shall deliver:
(i) To Agent, no later than seven (7) Business Days after the
end of each Fiscal Month (or more frequently if requested by Agent while an
Event of Default has occurred and is continuing) (together with a copy of any of
the following reports requested by Agent in writing after the Closing Date), a
Borrowing Base Certificate with respect to each Borrower, accompanied by items
(A) through (C) below and such other supporting detail and documentation as
shall be requested by Agent (or, in the case of Canadian Borrower, Canadian
Agent) in its reasonable credit judgment (in substantially the same form as
Exhibit 4.3(d), with appropriate attachments) (the "Borrowing Base
Certificate"); provided, that if Aggregate
49
Borrowing Availability is less than $100,000,000 after January 1, 2004, the
Borrowing Base Certificates shall instead be delivered by Borrower
Representative to Agent (or, in the case of Canadian Borrower, to Canadian
Agent), at Agent's (or, in the case of Canadian Borrower, Canadian Agent's)
request, no later than Noon (New York time) on Wednesday of each week (each of
which shall be prepared by Borrowers as of the last day of the immediately
preceding week):
(A) with respect to each Credit Party, in conjunction with
each Borrowing Base Certificate, a summary of Inventory by location and type
with a supporting perpetual Inventory report;
(B) with respect to each Credit Party, in conjunction with
each Borrowing Base Certificate, a monthly trial balance showing Accounts
outstanding aged from due date as follows: current, 1 to 30 days past due and 31
to 60 days past due or more; and
(C) a collateral report indicating additions and reductions
(cash and non-cash) with respect to accounts of each Borrower.
All Borrowing Base Certificate calculations shall be made in Dollars, in the
case of calculations of the U.S. Borrowing Base, and in Canadian Dollars, in the
case of the Canadian Borrowing Base; provided, that the Canadian Borrowing Base
shall be converted to Dollars from time to time in accordance with Section 1.13
at the exchange rates most recently quoted by Agent in accordance with such
Section 1.13.
(ii) If requested by Agent, to Agent, (or, in the case of
Canadian Borrower, Canadian Agent) a list of any applications for the
registration of any Patent, Trademark or Copyright filed by any Credit Party
with the United States Patent and Trademark Office, the United States Copyright
Office, the Canadian Industrial Design Office, the Canadian Patent Office, the
Canadian Intellectual Property Office, the Canadian Copyright Office or any
similar office or agency in the prior Fiscal Quarter.
(e) Appraisals; Inspections. Within 60 days prior to June 30/th/ of
each year and December 31/st/ of each year, Borrower Representative (or in the
case of Canadian Borrower, Canadian Agent) shall deliver to Agent an Appraisal
of Borrowers' Inventory; provided, that the mid-year Appraisal shall be a
desktop appraisal so long as no Event of Default has occurred and is continuing.
(f) Projections. As soon as available and in any event no later than
the last day of each of Borrowers' Fiscal Years, Borrower Representative will
deliver Projections of Holdings and its Subsidiaries for the forthcoming fiscal
year, month by month.
(g) SEC Filings and Press Releases. Promptly upon their becoming
available, Borrower Representative will deliver copies of (1) all Financial
Statements, reports, notices and proxy statements sent or made available by
Holdings, Borrowers or any of their Subsidiaries to their Stockholders, (2) all
regular and periodic reports and all registration statements and
50
prospectuses, if any, filed by Holdings, Borrowers or any of their Subsidiaries
with any securities exchange or with the Securities and Exchange Commission, any
Governmental Authority or any private regulatory authority, and (3) all press
releases and other statements made available by Holdings, Borrowers or any of
their Subsidiaries to the public concerning developments in the business of any
such Person.
(h) Events of Default, Etc. Promptly upon any senior executive
officer of any Credit Party obtaining knowledge of any of the following events
or conditions, Borrower Representative shall deliver copies of all notices given
or received by such Borrower or Holdings or any of their Subsidiaries with
respect to any such event or condition and a certificate of Borrower
Representative's chief executive officer specifying the nature and period of
existence of such event or condition and what action Holdings, Borrowers or any
of their Subsidiaries has taken, is taking and proposes to take with respect
thereto: (1) any condition or event that constitutes an Event of Default or
Default; (2) any notice that any Person has given to any Borrower or any of
their Subsidiaries or any other action taken with respect to a claimed default
or event or condition of the type referred to in Section 6.1(b); or (3) any
event or condition that has had a Material Adverse Effect.
(i) Litigation. Promptly upon any officer of any Credit Party
obtaining knowledge of (1) the institution of any action, charge, claim, demand,
suit, proceeding, petition, governmental investigation or arbitration now
pending or, to the best knowledge of such Credit Party after due inquiry,
threatened against or affecting any Credit Party or any of its Subsidiaries or
any property of any Credit Party or any of its Subsidiaries ("Litigation") not
previously disclosed by Borrower Representative to Agent (or, in the case of
Canadian Borrower, Canadian Agent) or (2) any material development in any
action, suit, proceeding, governmental investigation or arbitration at any time
pending against or affecting any Credit Party or any property of any Credit
Party which, in each case, could reasonably be expected to have a Material
Adverse Effect, Borrower Representative will promptly give notice thereof to
Agent (or, in the case of Canadian Borrower, Canadian Agent) and, subject to
protecting privileges, provide such other information as may be reasonably
available to them without violating any contractual confidentiality obligation
applicable to the Credit Parties to enable Agent (or, in the case of Canadian
Borrower, Canadian Agent) and its counsel to evaluate such matter.
(j) Notice of Corporate and other Changes. Borrower Representative
shall provide prompt written notice of any Subsidiary created or acquired by any
Credit Party or any of its Subsidiaries after the Closing Date, such notice, in
each case, to identify the applicable jurisdictions, capital structures or
Subsidiaries, as applicable. The foregoing notice requirement shall not be
construed to constitute consent by any of the Lenders to any transaction
referred to above which is not expressly permitted by the terms of this
Agreement.
(k) Compliance Certificate. Together with each delivery of Financial
Statements of Holdings and its Subsidiaries pursuant to Sections 4.3(a) and (b),
Borrowers will deliver a fully and properly completed Compliance Certificate (in
substantially the same form as Exhibit 4.3(k) (the "Compliance Certificate")
signed by Borrower Representative's chief executive officer or chief financial
officer.
51
(l) Other Information. With reasonable promptness, Borrower
Representative will deliver such other information and data with respect to any
Credit Party or any Subsidiary of any Credit Party as from time to time may be
reasonably requested by Agent.
4.4 Accounting Terms; Utilization of GAAP for Purposes of Calculations
Under Agreement. For purposes of this Agreement, all accounting terms not
otherwise defined herein shall have the meanings assigned to such terms in
conformity with GAAP. Financial statements and other information furnished to
Agents pursuant to Section 4.3 or any other section (unless specifically
indicated otherwise) shall be prepared in accordance with GAAP as in effect at
the time of such preparation; provided, that no Accounting Change shall affect
financial covenants, standards or terms in this Agreement; provided further that
Borrowers shall prepare footnotes to the Financial Statements required to be
delivered hereunder that show the differences between the Financial Statements
delivered (which reflect such Accounting Changes) and the basis for calculating
financial covenant compliance (without reflecting such Accounting Changes). All
such adjustments described in clause (c) of the definition of the term
Accounting Changes resulting from expenditures made subsequent to the Closing
Date (including capitalization of costs and expenses or payment of pre-Closing
Date liabilities) shall be treated as expenses in the period the expenditures
are made.
SECTION 5.
REPRESENTATIONS AND WARRANTIES
------------------------------
To induce Agents and Lenders to enter into the Loan Documents, to make
Advances and to issue or cause to be issued Letters of Credit, Borrowers and the
other Credit Parties executing this Agreement, represent, warrant and covenant
to Agents and each Lender that the following statements are, and immediately
after giving effect to the Related Transactions will be, true, correct and
complete with respect to all Credit Parties (including Acquisition Co., UAP's
predecessor company, for purposes of this Section 5), as applicable:
5.1 Disclosure. No representation or warranty of Acquisition Co. or any
Credit Party contained in this Agreement, the Financial Statements referred to
in Section 5.5, the other Related Transactions Documents or any other document,
certificate or written statement furnished to Agents or any Lender by or on
behalf of any such Person for use in connection with the Loan Documents or the
Related Transactions Documents, taken as a whole, contains any untrue statement
of a material fact or omitted, omits or will omit to state a material fact
necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were made.
Projections from time to time delivered hereunder are or will be based upon the
estimates and assumptions stated therein, all of which Borrowers believed at the
time of delivery to be reasonable and fair in light of current conditions and
current facts known to Borrowers as of such delivery date, and reflect
Borrowers' good faith and reasonable estimates of the future financial
performance of Borrowers and of the other information projected therein for the
period set forth therein. Such Projections are not a guaranty of future
performance and actual results may differ from those set forth in such
Projections.
52
5.2 No Material Adverse Effect. Since February 28, 2003 there have been no
events or changes in facts or circumstances affecting Acquisition Co. or any
Credit Party or any of its Subsidiaries which individually or in the aggregate
have had a Material Adverse Effect and that have not been disclosed herein or in
the attached Disclosure Schedules.
5.3 No Conflict. The consummation of the Related Transactions does not and
will not violate or conflict with any laws, rules, regulations or orders of any
Governmental Authority or violate, conflict with, result in a breach of, or
constitute a default (with due notice or lapse of time or both) under any
Contractual Obligation or organizational documents of Acquisition Co. or any
Credit Party or any of its Subsidiaries except if such violations, conflicts,
breaches or defaults could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.
5.4 Organization, Powers, Capitalization and Good Standing.
(a) Organization and Powers. Each of the Credit Parties and each of
their Subsidiaries is and, immediately prior to the consummation of the Related
Transactions, Acquisition Co. was, duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization and qualified to do
business in all states where such qualification is required except where failure
to be so qualified could not reasonably be expected to have a Material Adverse
Effect. The jurisdiction of organization and all jurisdictions in which each
Credit Party is qualified to do business are set forth on Schedule 5.4(a). Each
of the Credit Parties and each of their Subsidiaries has and, immediately prior
to the consummation of the Related Transactions, Acquisition Co. had, all
requisite organizational power and authority to own and operate its properties,
to carry on its business as now conducted and proposed to be conducted, to enter
into each Related Transactions Document to which it is a party and to incur the
Obligations, grant liens and security interests in the Collateral and carry out
the Related Transactions, subject to specific representations set forth herein
regarding ERISA, Environmental Laws, tax and other laws, Credit Parties are in
compliance with all applicable provisions of law, except where the failure to
comply, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
(b) Capitalization. As of the Closing Date: (i) the authorized Stock
of each of the Credit Parties and each of their Subsidiaries is as set forth on
Schedule 5.4(b); (ii) all issued and outstanding Stock of each of the Credit
Parties and each of their Subsidiaries is duly authorized and validly issued,
fully paid, nonassessable, free and clear of all Liens other than those in favor
of Agents for the benefit of Agents and Lenders, and such Stock was issued in
compliance with all applicable state, federal and foreign laws concerning the
issuance of securities; (iii) the identity of the holders of the Stock of each
of the Credit Parties and each of their Subsidiaries and the percentage of their
fully-diluted ownership of the Stock of each of the Credit Parties and each of
their Subsidiaries is set forth on Schedule 5.4(b); and (iv) no Stock of any
Credit Party or any of their Subsidiaries, other than those described above, are
issued and outstanding. Except as provided in Schedule 5.4(b), as of the Closing
Date, there are no preemptive or other outstanding rights, options, warrants,
conversion rights or similar
53
agreements or understandings for the purchase or acquisition from any Credit
Party or any of their Subsidiaries of any Stock of any such entity.
(c) Binding Obligation. This Agreement is, and the other Related
Transactions Documents when executed and delivered will be, the legally valid
and binding obligations of the applicable Credit Parties thereto, each
enforceable against each of such Credit Parties, as applicable, in accordance
with their respective terms except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles relating to enforceability.
5.5 Financial Statements and Projections. All Financial Statements
concerning Holdings, Borrowers and their Subsidiaries which have been or will
hereafter be furnished to Agents pursuant to this Agreement, including those
listed below, have been or will be prepared in accordance with GAAP consistently
applied (except as disclosed therein) and do or will present fairly the
financial condition of the entities covered thereby as at the dates thereof and
the results of their operations for the periods then ended, subject to, in the
case of unaudited Financial Statements, the absence of footnotes and audit and
normal year-end adjustments.
(a) The consolidated balance sheets at February 28, 2003 and the
related statement of income of Borrowers and their subsidiaries, for the
Fiscal Year then ended, audited by Deloitte & Touche LLP.
(b) The consolidated balance sheet at October 19, 2003 and the
related statement of income of Borrowers and their subsidiaries for the
eight (8) months then ended.
The Projections delivered on or prior to the Closing Date and the updated
Projections delivered pursuant to Section 4.4(f) are or will be based upon the
estimates and assumptions stated therein, all of which Borrowers believed at the
time of delivery to be reasonable and fair in light of current conditions and
current facts known to Borrowers as of such delivery date, and reflect
Borrowers' good faith and reasonable estimates of the future financial
performance of Borrowers and of the other information projected therein for the
period set forth therein. Such Projections are not a guaranty of future
performance and actual results may differ from those set forth in such
Projections.
5.6 Intellectual Property. Each of the Credit Parties and its Subsidiaries
owns, is licensed to use or otherwise has the right to use, all Intellectual
Property used in or necessary for the conduct of its business as currently
conducted that is material to the condition (financial or other), business or
operations of such Credit Party and its Subsidiaries. Schedule 5.6 includes a
list of (i) the registration (or patent) for each registered item of
Intellectual Property (or patent) owned by the Credit Parties and material to
the condition (financial or other), business or operations of such Credit Party
and its Subsidiaries, (ii) the application for the registration (or patent) for
each item of Intellectual Property for which an application for registration (or
patent) is pending and owned by the Credit Parties and material to the condition
(financial or other), business or operations of such Credit Party and its
Subsidiaries, and (iii) each license or other
54
agreement under which the Intellectual Property of a third-party is licensed by
the Credit Parties and material to the condition (financial or other), business
or operations of such Credit Party and its Subsidiaries, other than normal and
routine off-the-shelf software license agreements. Except as set forth on
Schedule 5.6, all such material Intellectual Property that is owned by the
Credit Parties and their subsidiaries is duly and properly registered, filed or
issued in the appropriate office and jurisdictions for such registrations,
filings or issuances. Except as set forth on Schedule 5.6, all such material
Intellectual Property that the Credit Parties or their Subsidiaries are licensed
to use or otherwise have the right to use is used pursuant to a valid license
agreement in full force and effect. No Credit Party has received any written
notice or claim of infringement which could reasonably be expected to be
materially adverse to the Credit Parties by or from any other Person with
respect to any material Intellectual Property, with the exception of those
claims set forth on Schedule 5.6.
5.7 Investigations, Audits, Etc. As of the Closing Date, except as set
forth on Schedule 5.7, no Credit Party or any of their Subsidiaries is the
subject of any review or audit by the IRS or any governmental investigation
concerning the violation or possible violation of any law.
5.8 Employee Matters. Except as set forth on Schedule 5.8, (a) no Credit
Party or Subsidiary of a Credit Party nor any of their respective employees is
subject to any collective bargaining agreement, (b) no petition for
certification or union election is pending with respect to the employees of any
Credit Party or any of their Subsidiaries and no union or collective bargaining
unit has sought such certification or recognition with respect to the employees
of any Credit Party or any of their Subsidiaries, (c) there are no strikes,
slowdowns, work stoppages or controversies pending or, to the best knowledge of
any Credit Party after due inquiry, threatened between any Credit Party or any
of their Subsidiaries and its respective employees, other than employee
grievances arising in the ordinary course of business which could not reasonably
be expected to have, either individually or in the aggregate, a Material Adverse
Effect and (d) hours worked by and payment made to employees of each Credit
Party and each of their Subsidiaries comply with the Fair Labor Standards Act
and each other federal, state, provincial, local or foreign law applicable to
such matters, except, in each case, for any non-compliance arising in the
ordinary course of business that can be resolved in the ordinary course of
business without material liability to any Credit Party or any of its
Subsidiaries and without materially adversely affecting the business of any
Credit Party or any of its Subsidiaries. Except as set forth on Schedule 5.8,
neither Borrower nor any of its Subsidiaries is party to an employment contract.
5.9 Solvency. Each of the Credit Parties and its Subsidiaries is Solvent.
5.10 Litigation; Adverse Facts. Except as set forth on Schedule 5.10, there
are no judgments outstanding against any Credit Party or any of its Subsidiaries
or affecting any property of any Credit Party or any of its Subsidiaries, nor is
there any Litigation pending, or to the best knowledge of any Credit Party
threatened, against any Credit Party or any of its Subsidiaries which could
reasonably be expected to result in any Material Adverse Effect.
5.11 Use of Proceeds; Margin Regulations.
55
(a) No part of the proceeds of any Loan will be used for "buying" or
"carrying" "margin stock" within the respective meanings of such terms under
Regulation U of the Board of Governors of the Federal Reserve System as now and
from time to time hereafter in effect or for any other purpose that violates the
provisions of the regulations of the Board of Governors of the Federal Reserve
System. If requested by Agent, each Credit Party will furnish to Agent and each
Lender a statement to the foregoing effect in conformity with the requirements
of FR Form G-3 or FR Form U-1, as applicable, referred to in Regulation U.
(b) Borrowers shall utilize the proceeds of the Loans solely for the
Acquisition (and to pay any related transaction expenses), for Permitted
Acquisitions, and for the financing of Borrowers' working capital and general
corporate needs. Schedule 5.11 contains a description of Borrowers' sources and
uses of funds as of the Closing Date, including Loans and Letter of Credit
Obligations to be made or incurred on that date, and a funds flow memorandum
detailing how funds from each source are to be transferred for particular uses.
5.12 Ownership of Property; Liens. As of the Closing Date, the real estate
("Real Estate") listed in Schedule 5.12 constitutes materially all of the real
property owned, leased, subleased, or used by any Credit Party or any of its
Subsidiaries. Each of the Credit Parties and each of its Subsidiaries owns good
and marketable fee simple title to all of its owned Real Estate, and valid
leasehold interests in all of its leased Real Estate, all as described on
Schedule 5.12, and, to the extent requested in writing by Agent or Canadian
Agent, copies of all such leases or a summary of terms thereof reasonably
satisfactory to Agent (or, in the case of Canadian Borrower, Canadian Agent)
have been delivered to Agent (or, in the case of Canadian Borrower, Canadian
Agent). Schedule 5.12 further describes any Real Estate with respect to which
any Credit Party or any of its Subsidiaries is a lessor or sublessor as of the
Closing Date. Each of the Credit Parties and each of its Subsidiaries also has
good and marketable title to, or valid leasehold interests in, all of its
personal property and assets. As of the Closing Date, none of the properties and
assets of any Credit Party or any of its Subsidiaries are subject to any Liens
other than Permitted Encumbrances, and there are no facts, circumstances or
conditions known to any Borrower that are reasonably likely to result in any
Liens (including Liens arising under Environmental Laws) other than Permitted
Encumbrances against the properties or assets of any Credit Party or any of its
Subsidiaries. Schedule 5.12 also describes any purchase options, rights of first
refusal or other similar contractual rights pertaining to any Real Estate that
is material to the business of the Credit Parties. As of the Closing Date, no
material portion of the Real Estate has suffered any material damage by fire or
other casualty loss that has not heretofore been repaired and restored in all
material respects to its original condition or otherwise remedied or is
currently being repaired or otherwise remedied. As of the Closing Date, all
material permits required to have been issued to enable the Real Estate to be
occupied pursuant to laws in all material respects and used for all of the
purposes for which it is currently occupied and used have been lawfully issued
and are in full force and effect.
5.13 Environmental Matters.
(a) Except as set forth in Schedule 5.13, as of the Closing Date: (i)
the real property owned, leased or subleased by any Credit Party or any of its
Subsidiaries is free of
56
contamination from any Hazardous Material except for such contamination that
could not reasonably be expected to impact materially and adversely the value or
marketability of such Real Estate (based on continued commercial or industrial
use as part of the Credit Parties' business or a similar business to that
conducted on the Closing Date) and that could not reasonably be expected to
result in Environmental Liabilities of the Credit Parties or their Subsidiaries
in excess of $500,000 or the Dollar Equivalent thereof in the aggregate; (ii) no
Credit Party and no Subsidiary of a Credit Party has caused or suffered to occur
any Release of Hazardous Materials on, at, in, under, above, to, from or about
any of their Real Estate; (iii) the Credit Parties and their Subsidiaries are
and have been in compliance with all Environmental Laws, except for such
noncompliance that could not reasonably be expected to result in Environmental
Liabilities of the Credit Parties or their Subsidiaries in excess of $500,000 or
the Dollar Equivalent thereof in the aggregate; (iv) the Credit Parties and
their Subsidiaries have obtained, and are in compliance with, all Environmental
Permits required by Environmental Laws for the operations of their respective
businesses as presently conducted, except where the failure to so obtain or
comply with such Environmental Permits could not reasonably be expected to
result in Environmental Liabilities of the Credit Parties or their Subsidiaries
in excess of $500,000 or the Dollar Equivalent thereof in the aggregate, and all
such Environmental Permits are valid, uncontested and in good standing; (v) no
Credit Party and no Subsidiary of a Credit Party is involved in operations or
knows of any facts, circumstances or conditions, including any Releases of
Hazardous Materials, that are likely to result in any Environmental Liabilities
of such Credit Party or Subsidiary which could reasonably be expected to be in
excess of $500,000 or the Dollar Equivalent thereof in the aggregate, and no
Credit Party or Subsidiary of a Credit Party has permitted any current or former
tenant or occupant of the Real Estate to engage in any such operations; (vi)
there is no Litigation arising under or related to any Environmental Laws,
Environmental Permits or Hazardous Material that seeks damages, penalties,
fines, costs or expenses in excess of $500,000 or the Dollar Equivalent thereof
in the aggregate or injunctive relief against, or that alleges criminal
misconduct by any Credit Party or any Subsidiary of a Credit Party; (vii) no
notice has been received by any Credit Party or any Subsidiary of a Credit Party
identifying any of them as a "potentially responsible party" or requesting
information under CERCLA or analogous state statutes, Canadian federal or
provincial statutes, and to the knowledge of the Credit Parties, there are no
facts, circumstances or conditions that may result in any of the Credit Parties
or their Subsidiaries being identified as a "potentially responsible party"
under CERCLA or analogous state statutes, Canadian federal or provincial
statutes; and (viii) the Credit Parties have provided to Agent (or, in the case
of Canadian Borrower, Canadian Agent) copies of all existing, non-privileged,
Phase One or Phase Two environmental reports, environmental compliance reviews
or audits, or documents of similar scope and content, material unresolved
notices of violation, pending complaints, and pending orders pertaining to
actual or potential Environmental Liabilities, in each case relating to any of
the Credit Parties or their subsidiaries, and in each case in the possession,
custody or control of Apollo Management, L.P.
(b) Each Credit Party hereby acknowledges and agrees that Agent (or,
in the case of Canadian Borrower, Canadian Agent) (i) is not now, and has not
ever been, in control of any of the Real Estate or affairs of such Credit Party
or its Subsidiaries, and (ii) does not have the
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capacity through the provisions of the Loan Documents or otherwise to influence
any Credit Party's or its Subsidiaries' conduct with respect to the ownership,
operation or management of any of their Real Estate or compliance with
Environmental Laws or Environmental Permits.
5.14 ERISA And Canadian Pension And Benefit Plans.
(a) Schedule 5.14(a) lists and separately identifies all Title IV
Plans, Multiemployer Plans, ESOPs and Retiree Welfare Plans. Copies of all Plans
listed on Schedule 5.14(a), together with a copy of the latest form IRS/DOL
5500-Series for each such Plan have been delivered to Agent. Except for failures
to comply which individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect: (i) each Plan is in compliance with
the applicable provisions of ERISA and the IRC and (ii) neither any Credit Party
nor ERISA Affiliate has engaged in a "prohibited transaction," as defined in
Section 406 of ERISA and Section 4975 of the IRC, in connection with any Plan,
that would subject any Credit Party to a material tax on prohibited transactions
imposed by Section 502(i) of ERISA or Section 4975 of the IRC. No Credit Party
nor any ERISA Affiliate has failed to make any contribution or pay any amount
due as required by either Section 412 of the IRC or Section 302 of ERISA or the
terms of any such Title IV Plan in excess of $500,000.
(b) Except as set forth in Schedule 5.14(a): (i) no Title IV Plan has
an Unfunded Pension Liability in excess of $10,000,000; (ii) no ERISA Event or
event described in Section 4062(e) of ERISA with respect to any Title IV Plan
has occurred or is reasonably expected to occur which could reasonably be
expected to result in liability to a Credit Party in excess of $500,000; (iii)
there are no pending, or to the knowledge of any Borrower, threatened claims
(other than claims for benefits in the normal course), sanctions, actions or
lawsuits, asserted or instituted against any Plan or any Person as fiduciary or
sponsor of any Plan which could reasonably be expected to result in a Material
Adverse Effect; (iv) no Credit Party or ERISA Affiliate has incurred or
reasonably expects to incur any liability as a result of a complete or partial
withdrawal from a Multiemployer Plan which could reasonably be expected to
result in a Material Adverse Effect; (v) within the last five years no Title IV
Plan of any Credit Party or ERISA Affiliate has been terminated, whether or not
in a "standard termination" as that term is used in Section 404(b)(1) of ERISA,
nor has any Title IV Plan of any Credit Party or ERISA Affiliate (determined at
any time within the past five years) with Unfunded Pension Liabilities been
transferred outside of the "controlled group" (within the meaning of Section
4001(a)(14) of ERISA) of any Credit Party or ERISA Affiliate which could
reasonably be expected to result in a Material Adverse Effect and (vi) except in
the case of any eligible individual account plan as defined in ERISA Section
407(d)(3), Stock of all Credit Parties and their ERISA Affiliates makes up, in
the aggregate, no more than 10% of fair market value of the assets of any Plan
measured on the basis of fair market value as of the latest valuation date of
any Plan.
(c) Schedule 5.14(b) lists all Canadian Benefit Plans and Canadian
Pension Plans. All Canadian Benefit Plans (other than, for greater certainty,
universal plans created by and to which any Credit Party is obligated to
contribute by statute) and Canadian Pension Plans adopted by any Credit Party
have been made available to Agent and Canadian Agent. The Canadian Pension Plans
are duly registered under the ITA and all other applicable laws which
58
require registration and no event has occurred which is reasonably likely to
cause the loss of such registered status. All material obligations of any Credit
Party (including fiduciary, funding, investment and administration obligations)
required to be performed in connection with the Canadian Pension Plans and the
funding agreements therefor have been performed in a timely fashion. There have
been no improper withdrawals or applications of the assets of the Canadian
Pension Plans or the Canadian Benefit Plans. There are no outstanding disputes
concerning the assets of the Canadian Pension Plans or the Canadian Benefit
Plans. Each of the Canadian Pension Plans is fully funded on a solvency basis
(using actuarial methods and assumptions which are consistent with the
valuations last filed with the applicable Governmental Authorities and which are
consistent with generally accepted actuarial principles). Neither Canadian
Borrower, nor Access nor their Domestic Subsidiaries employs any employees
outside of Canada.
5.15 Brokers. No broker or finder acting on behalf of any Credit Party or
Affiliate thereof brought about the obtaining, making or closing of the Loans or
the Related Transactions, and no Credit Party or Affiliate thereof has any
obligation to any Person in respect of any finder's or brokerage fees in
connection therewith.
5.16 Deposit and Disbursement Accounts. Schedule 5.16 lists all banks and
other financial institutions at which any Credit Party maintains deposit or
other accounts as of the Closing Date, including any Disbursement Accounts, and
Schedule 5.16 correctly identifies the name, address and telephone number of
each depository, the name in which the account is held, a description of the
purpose of the account, and the complete account number therefor.
5.17 Agreements and Other Documents. As of the Closing Date, each Credit
Party has provided to Agents or their counsel, on behalf of Lenders, accurate
and complete copies (or summaries) of all of the following agreements or
documents to which it is subject and each of which is listed in Schedule 5.17:
supply agreements and purchase agreements not terminable by such Credit Party
within sixty (60) days following written notice issued by such Credit Party and
involving transactions in excess of $1,000,000 or the Dollar Equivalent thereof
per annum; leases of Equipment having a remaining term of one year or longer and
requiring aggregate rental and other payments in excess of $500,000 or the
Dollar Equivalent thereof per annum; licenses and permits held by the Credit
Parties, the absence of which could reasonably be expected to have a Material
Adverse Effect; instruments and documents evidencing any Indebtedness or
Guaranteed Indebtedness of such Credit Party and any Lien granted by such Credit
Party with respect thereto; and instruments and agreements evidencing the
issuance of any equity securities, warrants, rights or options to purchase
equity securities of such Credit Party.
5.18 Insurance. Schedule 5.18 lists all insurance policies of any nature
maintained, as of the Closing Date, for current occurrences by each Credit
Party, as well as a summary of the key business terms of each such policy such
as deductibles, coverage limits and term of policy.
5.19 Acquisition Agreement. As of the Closing Date, Borrowers have
delivered to Agent a complete and correct copy of the Acquisition Agreement
(including all schedules,
59
exhibits, amendments, supplements, modifications, assignments and all other
documents delivered pursuant thereto or in connection therewith). No Credit
Party and, to the knowledge of Borrower, no other Person party thereto, is in
default in the performance or compliance with any provisions thereof. The
Acquisition Agreement complies in all material respects with, and the
Acquisition will on the Closing Date be consummated in all material respects in
accordance with, all applicable laws. The Acquisition Agreement is in full force
and effect as of the Closing Date and has not been terminated, rescinded or
withdrawn. All requisite approvals by Governmental Authorities having
jurisdiction over Seller, any Credit Party and other Persons referenced therein,
with respect to the transactions contemplated by the Acquisition Agreement, have
been obtained, and no such approvals impose any material adverse conditions to
the consummation of the transactions contemplated by the Acquisition Agreement
or to the conduct by any Credit Party of its business thereafter. To the best of
each Borrower's knowledge, none of the Seller's representations or warranties in
the Acquisition Agreement contain any untrue statement of a material fact or
omit any fact necessary to make the statements therein not misleading.
5.20 Taxes and Tax Returns.
(a) As of the Closing Date, (i) all Tax Returns required to be filed
by the Credit Parties have been timely and properly filed and (ii) all taxes for
which a notice of assessment or collection has been received (other than amounts
being contested in good faith by appropriate proceedings), have been paid except
for any such filings, payments or accruals which would not have a Material
Adverse Effect. No Governmental Authority has asserted any claim for taxes, or
to any Credit Party's knowledge, has threatened to assert any claim for taxes
that (A) are not indemnified by Seller and (B) that would, if paid by a Credit
Party, have a Material Adverse Effect. All taxes required by law to be withheld
or collected and remitted (including, without limitation, income, tax, Canada
Pension Plan and Quebec Pension Plan contributions, unemployment insurance and
▇▇▇▇▇▇▇'▇ compensation premiums) with respect to the Credit Parties have been
withheld or collected and paid to the appropriate Governmental Authorities (or
are properly being held for such payment), except for amounts which would not
have a Material Adverse Effect.
(b) None of the Credit Parties has been notified that either the IRS,
the Canada Customs and Revenue Agency or any other Governmental Authority has
raised any adjustments or intends to raise such adjustments, in connection with
any Tax Return of the Credit Parties, which adjustments would have a Material
Adverse Effect.
(c) None of the Credit Parties is a party to, is bound by, or has any
obligation under, any tax sharing agreement, tax indemnification agreement or
similar contract or arrangement, excluding leases entered into in the ordinary
course of business and sales contracts, that, either individually or in the
aggregate, could have a Material Adverse Effect.
(d) Each of Canadian Borrower and Access is a registrant for the
purposes of the Excise Tax Act (Canada) having registration number 87 543 1603
RT 001 and 88 639 9849 RC 001, respectively, and is not a financial institution
within the meaning of the Excise Tax Act
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(Canada). None of the Credit Parties (excluding Canadian Borrower and Access) is
a registrant for the purposes of the Excise Tax Act (Canada). None of the Credit
Parties (excluding Canadian Borrower and Access) has made any election under the
Excise Tax Act (Canada).
SECTION 6.
DEFAULT, RIGHTS AND REMEDIES
----------------------------
6.1 Event of Default. "Event of Default" shall mean the occurrence or
existence of any one or more of the following:
(a) Payment. (1) Failure to pay any installment or other payment of
principal of any Loan when due, or to repay Revolving Loans to reduce their
balance to the maximum amount of Revolving Loans then permitted to be
outstanding or to reimburse any L/C Issuer for any payment made by such L/C
Issuer under or in respect of any Letter of Credit when due or (2) failure to
pay, within three (3) Business Days after the due date, any interest on any Loan
or any other amount due under this Agreement or any of the other Loan Documents;
or
(b) Default in Other Agreements. (1) Any Credit Party or any of its
Subsidiaries fails to pay when due or within any applicable grace period any
principal or interest on Indebtedness (other than the Loans) or any Contingent
Obligations or (2) breach or default of any Credit Party or any of its
Subsidiaries, or the occurrence of any condition or event, with respect to any
Indebtedness (other than the Loans) or any Contingent Obligations, if the effect
of such failure to pay or such breach, default or occurrence is to cause or to
permit the holder or holders then to cause, Indebtedness and/or Contingent
Obligations having an individual principal amount in excess of $5,000,000 or the
Dollar Equivalent thereof or having an aggregate principal amount in excess of
$10,000,000 or the Dollar Equivalent thereof to become or be declared due prior
to their stated maturity or to take enforcement action with respect thereto; or
(c) Breach of Certain Provisions; Breach of Warranty. Failure of any
Credit Party to (i) perform or comply with any term or condition contained in
Section 2.4(a) as to Borrowers only, Sections 2.11(c), 3, 4.1, 4.2 or 4.3(h)(1);
or (ii) perform, keep or observe any of the provisions of Section 2.3 or Section
4.3(d)(i) solely with respect to Borrowing Base Certificates, and solely with
respect to Section 2.3 and Section 4.3(d)(i), such failure shall remain
unremedied for fifteen (15) days or more; or
(d) Borrowing Base Certificate; Breach of Warranty. Any information
contained in any Borrowing Base Certificate or any representation or warranty
herein or in any Loan Document or in any written statement, report, financial
statement or certificate (other than a Borrowing Base Certificate) made or
delivered to Agent, Canadian Agent or any Lender by any Credit Party is untrue
or incorrect in any material respect (without duplication of materiality
qualifiers contained therein) as of the date when made or deemed made; or
(e) Other Defaults Under Loan Documents. Any Credit Party defaults in
the performance of or compliance with any term contained in this Agreement or
the other Loan Documents (other than occurrences described in other provisions
of this Section 6.1 for which a
61
different grace or cure period is specified, or for which no cure period is
specified and which constitute immediate Events of Default) and such default is
not remedied or waived within thirty (30) days after the earlier of (1) receipt
by Borrower Representative of notice from either Agent or Requisite Lenders of
such default or (2) actual knowledge of a senior executive officer of any
Borrower or any other Credit Party of such default; or
(f) Involuntary Bankruptcy; Appointment of Receiver, Etc. (1) A court
enters a decree or order for relief with respect to any Credit Party in an
involuntary case under the Bankruptcy Code or any other Insolvency Law, which
decree or order is not stayed or other similar relief is not granted under any
applicable federal or state law; or (2) the continuance of any of the following
events for sixty (60) days unless dismissed, bonded or discharged: (a) an
involuntary case is commenced against any Credit Party, under any Insolvency
Law; or (b) a decree or order of a court for the appointment of a receiver,
interim receiver, receiver and manager, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over any Credit Party, or over
all or a substantial part of its property, is entered; or (c) a receiver,
interim receiver, receiver and manager, trustee or other custodian is appointed
without the consent of a Credit Party, for all or a substantial part of the
property of the Credit Party; or
(g) Voluntary Bankruptcy; Appointment of Receiver, Etc. (1) any
Credit Party commences a voluntary case under the Bankruptcy Code or any other
Insolvency Law, or consents to the entry of an order for relief in an
involuntary case or to the conversion of an involuntary case to a voluntary case
under any such law or consents to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a substantial part of its
property; or (2) any Credit Party makes any assignment for the benefit of
creditors; or (3) any Credit Party fails to pay its debts as they become due or
admits in writing its present or prospective inability to pay its debts as they
become due; or (4) the board of directors of any Credit Party adopts any
resolution or otherwise authorizes action to approve any of the actions referred
to in this Section 6.1(g); or
(h) Judgment and Attachments. Any money judgment, writ or warrant of
attachment, or similar process (other than those described elsewhere in this
Section 6.1) involving (1) an amount in any individual case in excess of
$5,000,000 or the Dollar Equivalent thereof or (2) an amount in the aggregate at
any time in excess of $10,000,000 or the Dollar Equivalent thereof (in either
case to the extent not adequately covered by insurance in Agent's (or, in the
case of Canadian Borrower, Canadian Agent's) sole discretion as to which the
insurance company has acknowledged coverage) is entered or filed against one or
more of the Credit Parties or any of their respective assets and remains
undischarged, unvacated, unbonded or unstayed for a period of thirty (30) days
or in any event later than five (5) Business Days prior to the date of any
proposed sale thereunder; or
(i) Dissolution. Any order, judgment or decree is entered against any
Credit Party other than an Inactive Subsidiary decreeing the dissolution or
split up of such Credit Party and such order remains undischarged or unstayed
for a period in excess of thirty (30) days; or
62
(j) Invalidity of Loan Documents. Any of the Loan Documents for any
reason, other than a partial or full release in accordance with the terms
thereof, ceases to be in full force and effect or is declared to be null and
void, or any Credit Party denies that it has any further liability under any
Loan Documents to which it is party, or gives notice to such effect; or
(k) Change of Control. A Change of Control occurs.
6.2 Suspension or Termination of Commitments. Upon the occurrence of any
Event of Default, Agents may, and at the request of Requisite Lenders, Agents
shall, without notice or demand, immediately suspend or terminate all or any
portion of Lenders' obligations to make additional Loans or issue or cause to be
issued Letters of Credit under the Revolving Loan Commitment.
6.3 Acceleration and other Remedies. Upon the occurrence of any Event of
Default described in Sections 6.1(f) or 6.1(g), the Commitments shall be
immediately terminated and all of the Obligations, including the Revolving
Loans, shall automatically become immediately due and payable, without
presentment, demand, protest, notice of intent to accelerate, notice of
acceleration or other requirements of any kind, all of which are hereby
expressly waived (including for purposes of Section 10) by Borrowers, and the
Commitments shall thereupon terminate. Upon the occurrence and during the
continuance of any other Event of Default, Agents may, and at the request of the
Requisite Lenders, Agents shall, by written notice to Borrower Representative
(a) reduce the aggregate amount of the Commitments from time to time, (b)
declare all or any portion of the Loans and all or any portion of the other
Obligations to be, and the same shall forthwith become, immediately due and
payable together with accrued interest thereon ("Acceleration of the
Obligations"), (c) terminate all or any portion of the obligations of Agents,
L/C Issuers and Lenders to make Revolving Credit Advances and issue Letters of
Credit, (d) demand that U.S. Borrower immediately deliver cash to Agent for the
benefit of L/C Issuers (and U.S. Borrower shall then immediately so deliver) in
an amount equal to 103% of the aggregate outstanding Letter of Credit
Obligations, (e) require that Credit Parties deliver to Agent (or, in the case
of Supplemental Real Estate owned by Canadian Borrower, Canadian Agent) a fully
executed Mortgage over each parcel of Supplemental Real Estate in form and
substance satisfactory to Agent (or, in the case of Supplemental Real Estate
owned by Canadian Borrower, Canadian Agent), together with such title insurance
policies, surveys, appraisals, evidence of insurance, legal opinions,
environmental assessments and other documents and certificates as shall be
required by Agent (or, in the case of Supplemental Real Estate owned by Canadian
Borrower, Canadian Agent) (and Credit Parties shall use commercially reasonable
efforts to deliver the foregoing within 30 days) and (f) exercise any other
remedies which may be available under the Loan Documents or applicable law.
Borrowers hereby grant to Agent, for the benefit of L/C Issuers and each Lender
with a participation in any Letters of Credit then outstanding, a security
interest in such cash collateral to secure all of the Letter of Credit
Obligations. Any such cash collateral shall be made available by Agent to L/C
Issuers to reimburse L/C Issuers for payments of drafts drawn under such Letters
of Credit and any Fees, Charges and expenses of L/C Issuers with respect to such
Letters of Credit and the unused portion thereof, after all such Letters of
Credit shall have expired or been fully drawn upon, shall be applied to repay
any other Obligations. After all such Letters of Credit shall have
63
expired or been fully drawn upon and all Obligations shall have been satisfied
and paid in full, the balance, if any, of such cash collateral shall be returned
to Borrowers. Borrowers shall from time to time execute and deliver to Agent
such further documents and instruments as Agent may request with respect to such
cash collateral.
6.4 Performance by Agent. So long as an Event of Default has occurred and
is continuing, if any Credit Party shall fail to perform any covenant, duty or
agreement contained in any of the Loan Documents, Agent (or, in the case of
Canadian Borrower, Canadian Agent) may perform or attempt to perform such
covenant, duty or agreement on behalf of such Credit Party after the expiration
of any cure or grace periods set forth herein to the extent necessary to protect
the Collateral, the value thereof or the priority of Agent's Liens therein. In
such event, such Credit Party shall, at the request of Agent (or, in the case of
Canadian Borrower, Canadian Agent), promptly pay any amount reasonably expended
by Agent (or, in the case of Canadian Borrower, Canadian Agent) in such
performance or attempted performance to Agent (or, in the case of Canadian
Borrower, Canadian Agent), together with interest thereon at the highest rate of
interest in effect upon the occurrence of an Event of Default as specified in
Section 1.2(d) from the date of such expenditure until paid. Notwithstanding the
foregoing, it is expressly agreed that Agent (or, in the case of Canadian
Borrower, Canadian Agent) shall not have any liability or responsibility for the
performance of any obligation of any Credit Party under this Agreement or any
other Loan Document.
6.5 Application of Proceeds. Notwithstanding anything to the contrary
contained in this Agreement, upon the occurrence and during the continuance of
an Event of Default, Borrowers irrevocably waive the right to direct the
application of any and all payments at any time or times thereafter received by
Agents from or on behalf of Borrowers, and Agent (or, in the case of Canadian
Borrower, Canadian Agent) shall have the continuing and exclusive right to apply
and to reapply any and all payments received at any time or times after the
occurrence and during the continuance of an Event of Default against the
Obligations in such manner as Agent (or, in the case of Canadian Borrower,
Canadian Agent) may deem advisable notwithstanding any previous application by
Agent (or, in the case of Canadian Borrower, Canadian Agent). Following
Acceleration of the Obligations, all payments received with respect to the
Obligations, including the proceeds of any sale of, or other realization upon,
all or any part of the Collateral shall be applied: first, to all Fees, costs
and expenses incurred by or owing to Agent (or, in the case of Canadian
Borrower, Canadian Agent) and reimbursable by Credit Parties pursuant to this
Agreement or the other Loan Documents; second, to accrued and unpaid Fees owing
to Lenders and interest on the Obligations (including any interest which but for
the provisions of the Insolvency Laws, would have accrued on such amounts, but
excluding Fees and interest with respect to the In-Season Overadvance); third,
to the principal amount of the Revolving Loans, including the cash
collateralization of the Letter of Credit Obligations as set forth above (other
than the principal balance of In-Season Overadvances); fourth, to accrued and
unpaid Fees and interest with respect to the outstanding In-Season Overadvances;
fifth, to the principal amount of outstanding In-Season Overadvances; and sixth
to any other obligations of Borrowers owing to Agents or any Lender under the
Loan Documents. Any balance remaining shall be delivered to Borrowers or to
whomever may be lawfully entitled to receive such balance or as a court of
competent jurisdiction may direct.
64
SECTION 7.
CONDITIONS TO LOANS
-------------------
The obligations of Lenders and L/C Issuers to make Loans and to issue
or cause to be issued Letters of Credit are subject to satisfaction of all of
the applicable conditions set forth below.
7.1 Conditions to Initial Loans. The obligations of Lenders and L/C
Issuers to make the initial Loans and to issue or cause to be issued Letters of
Credit on the Closing Date are, in addition to being subject to the satisfaction
of the conditions precedent specified in Section 7.2, subject to the completion
of the following conditions in a manner, unless specifically set forth
otherwise, reasonably satisfactory to Agents in their sole discretion:
(a) Closing Checklist. Except as otherwise provided in the
Post-Closing Matters Agreement, the Credit Parties shall deliver all documents
listed on, take all actions set forth on and satisfy all other conditions
precedent listed on the Closing Checklist attached hereto as Annex C, all in
form and substance, or in a manner, satisfactory to Agents and Lenders;
(b) Acquisition. The aggregate purchase price for the Acquisition
(inclusive of all fees and expenses of Agents and Lenders shall not exceed
$610,000,000;
(c) Acquisition Agreement. As of the Closing Date, no material
modifications to the Acquisition Agreement or Transition Services Agreements
adverse to Holdings, Borrowers or Agents shall have occurred since October 30,
2003 and the conditions precedent therein to the Acquisition shall have been met
or waived in a manner not adverse to Agents. The disclosure schedules and
exhibits to the Acquisition Agreement and the Ancillary Agreements (as such term
is defined in the Acquisition Agreement) shall all be reasonably satisfactory to
Agents;
(d) Consummation of Related Transactions. The Related Transactions
shall, on the Closing Date, be consummated in accordance with the terms of the
Related Transactions Documents simultaneously with the making of the initial
Loans and the issuance of the Letters of Credit to be issued on the Closing
Date;
(e) Corporate Structure; Solvency. The corporate structure of the
Credit Parties shall not have been modified from the structure disclosed to
Agents as of October 30, 2003 in any respect that is materially adverse to the
interests of the Agents. Agents shall have received a third party opinion both
in form and substance and by Valuation Research, Inc. opining that the Borrowers
(giving effect to the Related Transactions) are Solvent;
(f) Approvals. Agents shall have received satisfactory evidence that
the Credit Parties have obtained all required consents and approvals of all
Persons, including, without limitation, all requisite Governmental Authorities,
to the execution, delivery and performance of this Agreement and the other Loan
Documents and the consummation of the Related Transactions;
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(g) Opening Availability. After giving effect to the payment of, or
the creation of a Reserve for, all fees and expenses related to the Related
Transactions, no more than $260,000,000 in Revolving Loans will be drawn as of
the Closing Date. The Eligible Accounts and Eligible Inventory supporting the
initial U.S. Revolving Credit Advance, the initial Canadian Revolving Credit
Advance and the initial Letter of Credit Obligations incurred and the amount of
the Reserves to be established on the Closing Date shall be sufficient in value,
as reasonably determined by Agents, to provide Borrowers with Aggregate
Borrowing Availability, after giving effect to the initial U.S. Revolving Credit
Advance, the initial Canadian Revolving Credit Advance, the incurrence of any
initial Letter of Credit Obligations and the consummation of the Related
Transactions of at least $50,000,000;
(h) Financial Statements. Agents shall have received and approved the
unaudited consolidated and consolidating balance sheets of Borrowers and their
Subsidiaries, as at the end of September and October 2003, and the related
consolidated and consolidating statements of income, stockholders' equity and
cash flow for such months; and
(i) Litigation. No action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before any court,
governmental agency or legislative body which could reasonably be expected to
have a Materially Adverse Effect upon the financial condition of the Borrowers
or their Subsidiaries or the Collateral.
7.2 Conditions to All Loans. Except as otherwise expressly provided
herein, no Lender or L/C Issuer shall be obligated to fund any Advance or incur
any Letter of Credit Obligation, if, as of the date thereof (the "Funding
Date"):
(a) (i) any representation or warranty by any Credit Party contained
herein or in any other Loan Document is untrue or incorrect in any material
respect (without duplication of any materiality qualifier contained therein) as
of such date, except to the extent that such representation or warranty
expressly relates to an earlier date, and (ii) Agent (or, in the case of
Canadian Borrower, Canadian Agent) or Requisite Lenders have determined not to
make such Advance or incur such Letter of Credit Obligation as a result of the
fact that such warranty or representation is untrue or incorrect;
(b) (i) any Default or Event of Default has occurred and is
continuing or would result after giving effect to any Advance (or the incurrence
of any Letter of Credit Obligation), and (ii) Agent (or, in the case of Canadian
Borrower, Canadian Agent) or Requisite Lenders shall have determined not to make
any Advance or incur any Letter of Credit Obligation as a result of that Default
or Event of Default;
(c) after giving effect to any Advance (or the incurrence of any
Letter of Credit Obligation), (i) the outstanding amount of the aggregate U.S.
Revolving Loan would exceed remaining U.S. Borrowing Availability or (ii) the
outstanding amount of the Canadian Revolving Loan would exceed the remaining
Canadian Borrowing Availability; or
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(d) after giving effect to any Advance (or the incurrence of any
Letter of Credit Obligation), Aggregate Borrowing Availability would be less
than $40,000,000 or the Dollar Equivalent thereof and Borrowers shall have not
delivered to Agents a Compliance Certificate demonstrating that EBITDA and the
Fixed Charge Coverage Ratio were at least $70,000,000 or the Dollar Equivalent
thereof and 1.1 to 1.0, respectively, as of the last day of the month ending 30
or fewer days prior to the proposed date of such Advance or the incurrence of
such Letter of Credit Obligation.
The request and acceptance by any Borrower of the proceeds of any Advance, the
incurrence of any Letter of Credit Obligations or the conversion or continuation
of any Loan into, or as, a LIBOR Loan shall be deemed to constitute, as of the
date thereof, (i) a representation and warranty by Borrowers that the conditions
in this Section 7.2 have been satisfied and (ii) a reaffirmation by Borrowers
(other than Canadian Borrower) of the cross guaranty provisions set forth in
Section 10 and of the granting and continuance of Agent's (or, in the case of
Canadian Borrower, Canadian Agent's) Liens, on behalf of itself and Lenders,
pursuant to the Collateral Documents.
SECTION 8.
ASSIGNMENT AND PARTICIPATION
8.1 Assignment and Participations.
(a) Subject to the terms of this Section 8.1, any Lender may make an
assignment to a Qualified Assignee of, or sale of participations in, at any time
or times, the Loan Documents, Loans, Letter of Credit Obligations and any
Commitment or any portion thereof or interest therein, including any Lender's
rights, title, interests, remedies, powers or duties thereunder. Any assignment
by a Lender shall: (i) require the consent of Agent (which consent shall not be
unreasonably withheld or delayed with respect to a Qualified Assignee) and the
execution of an assignment agreement substantially in the form attached hereto
as Exhibit 8.1 and otherwise in form and substance reasonably satisfactory to,
and acknowledged by, Agent (an "Assignment Agreement"); (ii) be conditioned on
such assignee Lender representing to the assigning Lender and Agent, that it is
purchasing the applicable Loans to be assigned to it for its own account, for
investment purposes and not with a view to the distribution thereof; (iii) after
giving effect to any such partial assignment, the assignee Lender shall have
Commitments in an amount at least equal to $3,000,000 and the assigning Lender
shall have retained Commitments in an amount at least equal to $3,000,000; (iv)
require a payment to Agent of an assignment fee of $3,500; (v) be on a pro rata
basis among all U.S. Revolving Loans, Canadian Revolving Credit Advances and
Participating Interests of the Assigning Lender and (vi) so long as no Event of
Default has occurred and is continuing, require the consent of Borrower
Representative, which shall not be unreasonably withheld or delayed and shall be
deemed granted if not objected to within five (5) Business Days following notice
thereof to Borrower Representative. Notwithstanding the above, Agent or Canadian
Agent, as applicable, may in its sole and absolute discretion permit any
assignment by a Lender to a Person or Persons that are not Qualified Assignees;
provided that, so long as no Event of Default has occurred and is continuing,
such
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assignment shall also require the Borrower Representative's consent, which
consent shall not be unreasonably withheld or delayed. If, after giving effect
to any assignment by GE Capital in its capacity as a Lender hereunder, its
Revolving Loan Commitment is less than $25,000,000, it shall be obligated to
assign its entire Swing Line Commitment to another Lender, which assignment
shall, so long as no Event of Default has occurred and is continuing, require
the consent of Borrower Representative, which consent shall not be unreasonably
withheld or delayed and shall be deemed granted if not objected to within five
(5) Business Days following notice thereof to Borrower Representative. In the
case of an assignment by a Lender under this Section 8.1, the assignee shall
have, to the extent of such assignment, the same rights, benefits and
obligations as all other Lenders hereunder. The assigning Lender shall be
relieved of its obligations hereunder with respect to its Commitments or
assigned portion thereof from and after the date of such assignment. Borrowers
hereby acknowledge and agree that any assignment shall give rise to a direct
obligation of Borrowers to the assignee and that the assignee shall be
considered to be a "Lender." In all instances, each Lender's liability to make
Loans hereunder shall be several and not joint and shall be limited to such
Lender's Pro Rata Share of the applicable Commitment. In the event Agent or
Canadian Agent or any Lender assigns or otherwise transfers all or any part of
the Obligations, Agent or Canadian Agent, as applicable, or any such Lender
shall so notify Borrowers and Borrowers shall, upon the request of Agent or
Canadian Agent, as applicable, or such Lender, execute new Notes in exchange for
the Notes, if any, being assigned. Notwithstanding the foregoing provisions of
this Section 8.1(a), (x) any Lender may at any time pledge the Obligations held
by it and such Lender's rights under this Agreement and the other Loan Documents
to a Federal Reserve Bank, (y) any Lender that is an investment fund may assign
the Obligations held by it and such Lender's rights under this Agreement and the
other Loan Documents to another investment fund managed by the same investment
advisor or pledge such Obligations and rights to trustee for the benefit of its
investors and (z) any Lender may assign the Obligations to an Affiliate of such
Lender or to a Person that is a Lender prior to the date of such assignment.
(b) Any participation by a Lender of all or any part of its
Commitments shall be made with the understanding that all amounts payable by
Borrowers hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action hereunder
except actions directly affecting (i) any reduction in the principal amount of,
or interest rate or Fees payable with respect to, any Loan in which such holder
participates, (ii) any extension of the scheduled amortization of the principal
amount of any Loan in which such holder participates or the final maturity date
thereof, and (iii) any release of all or substantially all of the Collateral
(other than in accordance with the terms of this Agreement, the Collateral
Documents or the other Loan Documents). Solely for purposes of Sections 1.10,
1.11, 8.3 and 9.1, Borrowers acknowledge and agree that a participation shall
give rise to a direct obligation of Borrowers to the participant and the
participant shall be considered to be a "Lender." Except as set forth in the
preceding sentence no Borrower or any other Credit Party shall have any
obligation or duty to any participant. Neither Agents nor any Lender (other than
the Lender selling a participation) shall have any duty to any participant and
may continue to deal solely with the Lender selling a participation as if no
such sale had occurred. The provisions of this
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Section 8.1(b) do not apply to the Participating Interests or the Lenders or
their Affiliates in their capacity as holders of the Participating Interests.
Any participation sold by a Lender or a participant shall be on a pro rata basis
among all Revolving Loans and Participating Interests.
(c) Except as expressly provided in this Section 8.1, no Lender
shall, as between Borrowers and that Lender, or Agent or Canadian Agent, as
applicable, and that Lender, be relieved of any of its obligations hereunder as
a result of any sale, assignment, transfer or negotiation of, or granting of
participation in, all or any part of the Loans, the Notes or other Obligations
owed to such Lender.
(d) In connection with the primary syndication of the Loans to occur
within 90 days after the Closing Date, each Credit Party shall assist each
Lender permitted to sell assignments or participations under this Section 8.1 as
required to enable the assigning or selling Lender to effect any such assignment
or participation, including the execution and delivery of any and all
agreements, notes and other documents and instruments as shall be reasonably
requested and the prompt preparation of informational materials for, and the
participation of management in meetings with, potential assignees or
participants, all on a reasonable timetable established by Agent or Canadian
Agent, as applicable, in its sole discretion. Each Credit Party executing this
Agreement shall certify the correctness, completeness and accuracy of all
descriptions of the Credit Parties and their respective affairs contained in any
selling materials provided by it and all other information provided by it and
included in such materials, except that any Projections delivered by Borrowers
shall only be certified by Borrowers as having been prepared by Borrowers in
compliance with the representations contained in Section 5.5. Agent or Canadian
Agent, as applicable, shall maintain, on behalf of Borrowers, in its offices
located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ (or, in the case of
Canadian Agent, ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ) a "register" for recording
the name, address, commitment and Loans owing to each Lender. The entries in
such register shall be presumptive evidence of the amounts due and owing to each
Lender in the absence of manifest error. Borrowers, Agents and each Lender may
treat each Person whose name is recorded in such register pursuant to the terms
hereof as a Lender for all purposes of this Agreement. The register described
herein shall be available for inspection by Borrower and any Lender, at any
reasonable time upon reasonable prior notice.
(e) A Lender may furnish any information concerning Credit Parties in
the possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants); provided that such Lender
shall obtain from assignees or participants confidentiality covenants
substantially equivalent to those contained in Section 9.13.
(f) So long as no Event of Default has occurred and is continuing, no
Lender shall assign or sell participations in any portion of its Loans or
Commitments to a potential Lender or participant, if, as of the date of the
proposed assignment or sale, the assignee Lender or participant would be subject
to capital adequacy or similar requirements under Section 1.10(a), increased
costs or an inability to fund LIBOR Loans under Section 1.10(b), or withholding
taxes in accordance with Section 1.11.
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8.2 Agent.
(a) Appointment. GE Capital is hereby appointed to act on behalf of
all Lenders and Canadian Agent with respect to the administration of Loans made
to U.S. Borrower and to act as agent on behalf of all Lenders and Canadian Agent
with respect to Collateral of U.S. Borrower and its Domestic Subsidiaries under
this Agreement and the other Loan Documents. GE Canada is hereby appointed to
act as Canadian Agent on behalf of all Lenders with respect to the
administration of all Loans made to Canadian Borrower and with respect to all
Collateral of Canadian Borrower, Access and their Domestic Subsidiaries under
this Agreement and the other Loan Documents. Each Lender hereby irrevocably
authorizes Agent (or, in the case of the Canadian Revolving Loan, Canadian
Agent) to execute and deliver the Collateral Documents and to take such action
or to refrain from taking such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers as are set
forth herein or therein, together with such other powers as are reasonably
incidental thereto. Agent and Canadian Agent are authorized and empowered to
amend, modify, or waive any provisions of this Agreement or the other Loan
Documents on behalf of Lenders subject to the requirement that certain of
Lenders' consent be obtained in certain instances as provided in this Section
8.2 and Section 9.2. The provisions of this Section 8.2 are solely for the
benefit of Agents and Lenders and neither Borrowers nor any other Credit Party
shall have any rights as a third party beneficiary of any of the provisions
hereof. In performing its functions and duties under this Agreement, Agent shall
act solely as agent of Lenders and Canadian Agent and does not assume and shall
not be deemed to have assumed any obligation toward or relationship of agency or
trust with or for Borrowers or any other Credit Party. In performing its
functions and duties under this Agreement, Canadian Agent shall act solely as
agent of Lenders and does not assume and shall not be deemed to have assumed any
obligation toward or relationship of agency or trust with or for Borrowers or
any other Credit Party. Agents may perform any of their duties hereunder, or
under the Loan Documents, by or through its agents or employees.
(b) Nature of Duties. The duties of Agents shall be mechanical and
administrative in nature. Agents shall not have by reason of this Agreement a
fiduciary relationship in respect of any Lender. Nothing in this Agreement or
any of the Loan Documents, express or implied, is intended to or shall be
construed to impose upon Agents any obligations in respect of this Agreement or
any of the Loan Documents except as expressly set forth herein or therein. Each
Lender shall make its own independent investigation of the financial condition
and affairs of each Credit Party in connection with the extension of credit
hereunder and shall make its own appraisal of the creditworthiness of each
Credit Party, and Agents shall have no duty or responsibility, either initially
or on a continuing basis, to provide any Lender with any credit or other
information with respect thereto (other than as expressly required herein). If
Agent or Canadian Agent seeks the consent or approval of any Lenders to the
taking or refraining from taking any action hereunder, then Agent or Canadian
Agent, as applicable, shall send notice thereof to each Lender. Agent or
Canadian Agent, as applicable, shall promptly notify each Lender any time that
the Requisite Lenders or Supermajority Lenders have instructed Agent or Canadian
Agent, as applicable, to act or refrain from acting pursuant hereto.
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(c) Rights, Exculpation, Etc. Neither Agents nor any of their
officers, directors, employees or agents shall be liable to any Lender for any
action taken or omitted by them hereunder or under any of the Loan Documents, or
in connection herewith or therewith, except that Agents shall be liable to the
extent of their own gross negligence or willful misconduct as determined by a
final non-appealable order by a court of competent jurisdiction. Agents shall
not be liable for any apportionment or distribution of payments made by it in
good faith and if any such apportionment or distribution is subsequently
determined to have been made in error the sole recourse of any Lender to whom
payment was due but not made, shall be to recover from other Lenders any payment
in excess of the amount to which they are determined to be entitled (and such
other Lenders hereby agree to return to such Lender any such erroneous payments
received by them). In no event shall Agents be liable for punitive, special,
consequential, incidental, exemplary or other similar damages. In performing
their functions and duties hereunder, Agents shall exercise the same care which
they would in dealing with loans for their own accounts, but neither Agents nor
any of their agents or representatives shall be responsible to any Lender for
any recitals, statements, representations or warranties herein or for the
execution, effectiveness, genuineness, validity, enforceability, collectibility,
or sufficiency of this Agreement or any of the Loan Documents or the
transactions contemplated thereby, or for the financial condition of any Credit
Party. Agents shall not be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this
Agreement or any of the Loan Documents or the financial condition of any Credit
Party, or the existence or possible existence of any Default or Event of
Default. Agents may at any time request instructions from Requisite Lenders,
Supermajority Lenders or all affected Lenders with respect to any actions or
approvals which by the terms of this Agreement or of any of the Loan Documents
they are permitted or required to take or to grant. If such instructions are
promptly requested, Agents shall be absolutely entitled to refrain from taking
any action or to withhold any approval and shall not be under any liability
whatsoever to any Person for refraining from any action or withholding any
approval under any of the Loan Documents until they shall have received such
instructions from the Requisite Lenders, Supermajority Lenders or such other
portion of the Lenders as shall be prescribed by this Agreement. Without
limiting the foregoing, no Lender shall have any right of action whatsoever
against Agents as a result of Agents acting or refraining from acting under this
Agreement or any of the other Loan Documents in accordance with the instructions
of Requisite Lenders, Supermajority Lenders or all affected Lenders, as
applicable; and, notwithstanding the instructions of Requisite Lenders,
Supermajority Lenders or all affected Lenders, as applicable, Agents shall have
no obligation to take any action if they believe, in good faith, that such
action is deemed to be illegal by Agents or exposes Agents to any liability for
which they have not received satisfactory indemnification.
(d) Quebec. Without limiting any of the foregoing provisions in favor
of Agent or Canadian Agent, for the purposes of holding any security granted by
any Credit Party pursuant to the laws of the Province of Quebec, including any
deed of hypothec, debenture, bond or other title of indebtedness and debenture
or bond pledge agreements, Canadian Agent is hereby appointed to act as the
Person holding an irrevocable power of attorney (fonde de pouvoir) pursuant to
article 2692 of the Civil Code of Quebec to act on behalf of each present and
future Lender. By executing an Assignment Agreement, each future Lender shall be
deemed
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to ratify the power of attorney (fonde de pouvoir) granted herein. Canadian
Agent agrees to act in such capacity. Each party hereto agrees that,
notwithstanding Section 32 of an Act respecting the Special Powers of Legal
Persons (Quebec), Canadian Agent may, as the Person holding the power of
attorney of Lenders, acquire and or be the pledgee of any debentures, bonds or
other titles of indebtedness secured by any hypothec granted by any Credit Party
to the Canadian Agent pursuant to the laws of the Province of Quebec.
(e) Reliance. Agents shall be entitled to rely, and shall be fully
protected in relying, upon any written or oral notices, statements,
certificates, orders or other documents or any telephone message or other
communication (including any writing, telex, fax or telegram) believed by them
in good faith to be genuine and correct and to have been signed, sent or made by
the proper Person, and with respect to all matters pertaining to this Agreement
or any of the Loan Documents and its duties hereunder or thereunder. Agents
shall be entitled to rely upon the advice of legal counsel, independent
accountants, and other experts selected by Agents in their sole discretion.
(f) Indemnification. Lenders will reimburse and indemnify Agents for
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including, without limitation,
attorneys' fees and expenses), advances or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against Agents in
any way relating to or arising out of this Agreement or any of the Loan
Documents or any action taken or omitted by Agents under this Agreement or any
of the Loan Documents, in proportion to each Lender's Pro Rata Share, but only
to the extent that any of the foregoing is not reimbursed by Borrowers;
provided, however, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses, advances or disbursements to the extent resulting from Agents'
gross negligence or willful misconduct as determined by a final non-appealable
order by a court of competent jurisdiction. If any indemnity furnished to Agents
for any purpose shall, in the opinion of Agents, be insufficient or become
impaired, Agents may call for additional indemnity and cease, or not commence,
to do the acts indemnified against even if so directed by the Requisite Lenders,
Supermajority Lenders or such other portion of the Lenders as shall be
prescribed by this Agreement until such additional indemnity is furnished. The
obligations of Lenders under this Section 8.2(f) shall survive the payment in
full of the Obligations and the termination of this Agreement.
(g) GE Capital and GE Canada Individually. With respect to their
Commitments hereunder, GE Capital and GE Canada shall have and may exercise the
same rights and powers hereunder and is subject to the same obligations and
liabilities as and to the extent set forth herein for any other Lender. The
terms "Lenders", "Requisite Lenders", "Supermajority Lenders" or any similar
terms shall, unless the context clearly otherwise indicates, include GE Capital
and GE Canada in their individual capacities as Lenders or one of the Requisite
Lenders or Supermajority Lenders. GE Capital and GE Canada, either directly or
through strategic affiliations, may lend money to, acquire equity or other
ownership interests in, provide advisory services to and generally engage in any
kind of banking, trust or other business with any Credit Party as if they were
not acting as Agents pursuant hereto and without any duty
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to account therefor to Lenders. GE Capital and GE Canada, either directly or
through strategic affiliations, may accept fees and other consideration from any
Credit Party for services in connection with this Agreement or otherwise without
having to account for the same to Lenders.
(h) Successor Agent.
(i) Resignation. Either Agent may resign from the performance
of all its agency functions and duties hereunder at any time by giving at least
thirty (30) Business Days' prior written notice to Borrower Representative and
Lenders. Such resignation shall take effect upon the acceptance by a successor
Agent of appointment pursuant to clause (ii) below or as otherwise provided in
clause (ii) below.
(ii) Appointment of Successor. Upon any such notice of
resignation pursuant to clause (i) above, Requisite Lenders shall appoint a
successor Agent or Canadian Agent, as applicable, which, unless an Event of
Default has occurred and is continuing, shall be reasonably acceptable to
Borrowers (or, in the case of Canadian Agent, Canadian Borrower). If a successor
Agent or Canadian Agent, as applicable, shall not have been so appointed within
the thirty (30) Business Day period referred to in clause (i) above, the
retiring Agent or Canadian Agent, as applicable, upon notice to Borrower
Representative, shall then appoint a successor Agent or Canadian Agent, as
applicable, who shall serve as Agent or Canadian Agent, as applicable, until
such time, if any, as Requisite Lenders appoint a successor Agent or Canadian
Agent, as applicable, as provided above.
(iii) Successor Agent. Upon the acceptance of any appointment as
Agent or Canadian Agent, as applicable, under the Loan Documents by a successor
Agent or Canadian Agent, as applicable, such successor Agent or Canadian Agent,
as applicable, shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent or Canadian Agent, as
applicable, and the retiring Agent or Canadian Agent, as applicable, shall be
discharged from its duties and obligations under the Loan Documents. After any
retiring Agent's or Canadian Agent's, as applicable, resignation as Agent or
Canadian Agent, as applicable, the provisions of this Section 8.2 shall continue
to inure to its benefit as to any actions taken or omitted to be taken by it in
its capacity as Agent or Canadian Agent, as applicable.
(i) Collateral Matters.
(i) Release of Collateral. Lenders hereby irrevocably authorize
each of Agent and Canadian Agent, at its option and in its discretion, to
release any Lien granted to or held by Agent or Canadian Agent upon any
Collateral (x) upon termination of the Commitments and payment and satisfaction
of all Obligations (other than contingent indemnification obligations to the
extent no claims giving rise thereto have been asserted) or (y) constituting
property being sold or disposed of if Borrowers (or any of them) certify to
Agent or Canadian Agent, as applicable, that the sale or disposition is made in
compliance with the provisions of this Agreement (and Agent or Canadian Agent,
as applicable, may rely in good faith conclusively on any such certificate,
without further inquiry).
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(ii) Confirmation of Authority; Execution of Releases. Without
in any manner limiting Agent's or Canadian Agent's authority to act without any
specific or further authorization or consent by Lenders (as set forth in Section
8.2(h)(i)), each Lender agrees to confirm in writing, upon request by Agent or
Canadian Agent or Borrower Representative, the authority to release any
Collateral conferred upon Agent or Canadian Agent under clauses (x) and (y) of
Section 8.2(h)(i). Upon receipt by Agent or Canadian Agent of any required
confirmation from the Requisite Lenders of its authority to release any
particular item or types of Collateral, and upon at least ten (10) Business
Days' prior written request by Borrower Representative, Agent or Canadian Agent
shall (and is hereby irrevocably authorized by Lenders to) execute such
documents as may be necessary to evidence the release of the Liens granted to
Agent or Canadian Agent upon such Collateral; provided, however, that (x) Agent
or Canadian Agent shall not be required to execute any such document on terms
which, in Agent's or Canadian Agent's opinion, would expose Agent or Canadian
Agent to liability or create any obligation or entail any consequence other than
the release of such Liens without recourse or warranty, and (y) such release
shall not in any manner discharge, affect or impair the Obligations or any Liens
upon (or obligations of any Credit Party, in respect of), all interests retained
by any Credit Party, including the proceeds of any sale, all of which shall
continue to constitute part of the Collateral.
(iii) Absence of Duty. Agents shall have no obligation whatsoever
to any Lender or any other Person to assure that the property covered by the
Collateral Documents exists or is owned by Borrowers or any other Credit Party
or is cared for, protected or insured or has been encumbered or that the Liens
granted to Agents have been properly or sufficiently or lawfully created,
perfected, protected or enforced or are entitled to any particular priority, or
to exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to Agents in this Section 8.2(h) or
in any of the Loan Documents, it being understood and agreed that in respect of
the property covered by the Collateral Documents or any act, omission or event
related thereto, Agents may act in any manner they may deem appropriate, in
their discretion, given Agents' own interest in property covered by the
Collateral Documents as one of the Lenders and that Agents shall have no duty or
liability whatsoever to any of the other Lenders, provided that Agents shall
exercise the same care which they would in dealing with loans for its own
account.
(j) Agency for Perfection. Agents and each Lender hereby appoint each
other Lender as agent for the purpose of perfecting Agents' security interest in
assets which, in accordance with the Code or PPSA in any applicable
jurisdiction, can be perfected by possession or control. Should any Lender
(other than Agent or Canadian Agent) obtain possession or control of any such
assets, such Lender shall notify Agents thereof, and, promptly upon Agents'
request therefor, shall deliver such assets to Agent or Canadian Agent, as
appropriate, or in accordance with Agents' instructions or transfer control to
Agent or Canadian Agent in accordance with Agents' instructions. Each Lender
agrees that it will not have any right individually to enforce or seek to
enforce any Collateral Document or to realize upon any collateral security for
the Loans unless instructed to do so by Agents in writing, it being understood
and agreed that such rights and remedies may be exercised only by Agents.
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(k) Notice of Default. Agents shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default except with
respect to defaults in the payment of principal, interest and Fees required to
be paid to Agent (or in the case of Canadian Borrower, Canadian Agent) for the
account of Lenders unless Agent or Canadian Agent shall have received written
notice from a Lender or Borrower Representative referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default." Agents will use reasonable efforts to notify each Lender of
its receipt of any such notice. Agents shall take such action with respect to
such Default or Event of Default as may be requested by Requisite Lenders in
accordance with Section 6. Unless and until Agents have received any such
request, Agents may (but shall not be obligated to) take such action, or refrain
from taking such action, with respect to such Default or Event of Default as
they shall deem advisable or in the best interests of Lenders.
(l) Lender Actions Against Collateral. Each Lender agrees that it
will not take any action, nor institute any actions or proceedings, with respect
to the Loans, against any Borrower or any Credit Party hereunder or under the
other Loan Documents or against any of the Real Estate encumbered by Mortgages
without the consent of the Requisite Lenders. With respect to any action by
Agents to enforce the rights and remedies of Agents and the Lenders under this
Agreement and the other Loan Documents, each Lender hereby consents to the
jurisdiction of the court in which such action is maintained, and agrees to
deliver its Notes to Agent or Canadian Agent to the extent necessary to enforce
the rights and remedies of Agents for the benefit of the Lenders under the
Mortgages in accordance with the provisions hereof.
8.3 Set Off and Sharing of Payments. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, during the continuance of any Event of Default, each Lender is hereby
authorized by Borrowers at any time or from time to time, with reasonably prompt
subsequent notice to Borrower Representative (any prior or contemporaneous
notice being hereby expressly waived) to set off and to appropriate and to apply
any and all (A) balances held by such Lender at any of its offices for the
account of any Borrower or any of its Subsidiaries (regardless of whether such
balances are then due to Borrower or its Subsidiaries), and (B) other property
at any time held or owing by such Lender to or for the credit or for the account
of any Borrower or any of its Subsidiaries, against and on account of any of the
Obligations; except that no Lender shall exercise any such right without the
prior written consent of Agent or Canadian Agent. Any Lender exercising a right
to set off shall purchase for cash (and the other Lenders shall sell) interests
in each of such other Lender's Pro Rata Share of the Obligations as would be
necessary to cause all Lenders to share the amount so set off with each other
Lender in accordance with their respective Pro Rata Shares. Borrowers agree, to
the fullest extent permitted by law, that any Lender may exercise its right to
set off with respect to amounts in excess of its Pro Rata Share of the
Obligations and upon doing so shall deliver such amount so set off to the Agent
(or in the case of Canadian Borrower, Canadian Agent) for the benefit of all
Lenders in accordance with their Pro Rata Shares.
8.4 Disbursement of Funds. Each Borrower hereby irrevocably authorizes
Agent or Canadian Agent, as applicable, to disburse the proceeds of each Loan
requested, or deemed to be requested, under Section 1.1 as follows (i) the
proceeds of each U.S. Revolving Credit Advance
75
shall be disbursed by Agent in Dollars, as requested by U.S. Borrower and (ii)
by Canadian Agent in Dollars or Canadian Dollars, as requested by Borrower
Representative on behalf of the Canadian Borrower. Each Lender shall reimburse
Agent after the Canadian Loan Refunding Date on demand for all funds disbursed
on its behalf by Agent or Canadian Agent, as applicable, or if Agent so
requests, each Lender will remit to Agent or Canadian Agent, as applicable, its
Pro Rata Share of any Loan before Agent or Canadian Agent, as applicable,
disburses same to Borrowers. If Agent or Canadian Agent, as applicable, elects
to require that each Lender make funds available to Agent or Canadian Agent, as
applicable, prior to a disbursement by Agent or Canadian Agent, as applicable,
to Borrowers, Agent or Canadian Agent, as applicable, shall advise each Lender
by telephone or fax of the amount of such Lender's Pro Rata Share of the Loan
requested by Borrower Representative or U.S. Borrower, as applicable, or no
later than 1:00 p.m. (New York time) on the Funding Date applicable thereto, and
each such Lender shall pay Agent or Canadian Agent, as applicable, such Lender's
Pro Rata Share of such requested Loan, in same day funds, by wire transfer to
Agent's or Canadian Agent's account on such Funding Date. If any Lender fails to
pay the amount of its Pro Rata Share within one (1) Business Day after Agent's
or Canadian Agent's demand, Agent or Canadian Agent, as applicable, shall
promptly notify Borrower Representative, and Borrowers shall immediately repay
such amount to Agent or Canadian Agent, as applicable. Any repayment required
pursuant to this Section 8.4 shall be without premium or penalty. Nothing in
this Section 8.4 or elsewhere in this Agreement or the other Loan Documents,
including the provisions of Section 8.5, shall be deemed to require Agent or
Canadian Agent, as applicable, to advance funds on behalf of any Lender or to
relieve any Lender from its obligation to fulfill its commitments hereunder or
to prejudice any rights that Agent or Canadian Agent, as applicable, or
Borrowers may have against any Lender as a result of any default by such Lender
hereunder.
8.5 Disbursements of Advances; Payment.
(a) Advances; Payments.
(i) Lenders shall refund or participate in the Swing Line Loan
in accordance with clauses (iii) and (iv) of Section 1.1(b). If the Swing Line
Lender declines to make a Swing Line Loan or if Swing Line Availability is zero,
Agent shall notify Lenders promptly after receipt of a Notice of Revolving
Credit Advance and in any event prior to 1:00 p.m. (New York time) on the date
such Notice of a Revolving Credit Advance is received, by fax, telephone or
other similar form of transmission. Each Lender shall make the amount of such
Lender's Pro Rata Share of such U.S. Revolving Credit Advance available to Agent
in same day funds by wire transfer to Agent's account as set forth in Section
1.1(d) not later than 3:00 p.m. (New York time) on the requested Funding Date in
the case of an Index Rate Loan and not later than 11:00 a.m. (New York time) on
the requested Funding Date in the case of a LIBOR Loan. After receipt of such
wire transfers (or, in the Agent's sole discretion, before receipt of such wire
transfers), subject to the terms hereof, Agent shall make the requested
Revolving Credit Advance to U.S. Borrower as designated by U.S. Borrower in the
Notice of Revolving Credit Advance. All payments by each Lender shall be made
without setoff, counterclaim or deduction of any kind. If Revolving Loans are
provided to Canadian Borrower after the Canadian Loan Refunding Date, Canadian
Agent shall notify Lenders promptly after receipt of a Notice of
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Revolving Credit Advance requesting a Revolving Credit Advance for Canadian
Borrower and in any event prior to 1:00 p.m. (New York time) on the date such
Notice of Revolving Credit Advance is received by fax, telephone or other
similar form of transmission. Each Lender shall make available to Canadian Agent
such Lender's Pro Rata Share of such Canadian Revolving Credit Advance in same
day funds by wire transfer to Canadian Agent's account as set forth in Section
1.1(d) not later than 3:00 p.m. (New York time) on the requested Funding Date in
the case of an Index Rate Loan and not later than 11:00 a.m. (New York time) on
the requested Funding Date in the case of a LIBOR Loan. After receipt of such
wire transfers (or, in the Canadian Agent's sole discretion, before receipt of
such wire transfers), subject to the terms hereof, Canadian Agent shall make the
requested Canadian Revolving Credit Advance to Canadian Borrower as designated
by Borrower Representative in the Notice of Revolving Credit Advance. All
payments by each Lender shall be made without setoff, counterclaim or deduction
of any kind.
(ii) At least once each calendar week or more frequently at
Agent's election (each, a "Settlement Date"), Agent shall advise each Lender by
telephone or fax of the amount of such Lender's Pro Rata Share of principal,
interest and Fees paid for the benefit of Lenders with respect to the U.S.
Revolving Loan. Provided that each Lender has funded all payments and Advances
required to be made by it and purchased all participations, including, without
limitation, Participating Interests, required to be purchased by it under this
Agreement and the other Loan Documents as of such Settlement Date, Agent shall
pay to each Lender such Lender's Pro Rata Share of principal, interest and Fees
paid by U.S. Borrower since the previous Settlement Date for the benefit of such
Lender on the U.S. Revolving Loan held by it. Such payments shall be made by
wire transfer to such Lender's account (as specified by such Lender in Annex E
or the applicable Assignment Agreement) not later than 2:00 p.m. (New York time)
on the next Business Day following each Settlement Date. To the extent that any
Lender (a "Non-Funding Lender") has failed to fund all such payments and
Advances or failed to fund the purchase of all such participations, Agent shall
be entitled to set off the funding shortfall against that Non-Funding Lender's
Pro Rata Share of all payments received from U.S. Borrower. Prior to the
Canadian Loan Refunding Date, Canadian Agent shall send by wire transfer to each
Lender its Participation Fee within one Business Day after the corresponding
interest payment has been received by it from Canadian Borrower. From and after
the Canadian Loan Refunding Date, the weekly settlement procedures set forth
above with respect to Agent and the U.S. Revolving Loan shall also apply and
shall be deemed to refer, mutatis mutandis, to Canadian Agent and the Canadian
Revolving Loan.
(b) Availability of Lender's Pro Rata Share. Agents may assume that
each Lender will make its Pro Rata Share of each U.S. Revolving Credit Advance
available to Agent on each Funding Date. If such Pro Rata Share is not, in fact,
paid to Agent by such Lender when due, Agent will be entitled to recover such
amount on demand from such Lender without setoff, counterclaim or deduction of
any kind. If any Lender fails to pay the amount of its Pro Rata Share forthwith
upon Agent's demand, Agent shall promptly notify Borrower Representative and
U.S. Borrower shall immediately repay such amount to Agent. Nothing in this
Section 8.5(b) or elsewhere in this Agreement or the other Loan Documents shall
be deemed to require Agent to advance funds on behalf of any Lender or to
relieve any Lender from its obligation to fulfill its
77
Commitments hereunder or to prejudice any rights that U.S. Borrower may have
against any Lender as a result of any default by such Lender hereunder. To the
extent that Agent advances funds to U.S. Borrower on behalf of any Lender and is
not reimbursed therefor on the same Business Day as such Advance is made, Agent
shall be entitled to retain for its account all interest accrued on such Advance
until reimbursed by the applicable Lender.
(c) Return of Payments.
(i) If Agent pays an amount to a Lender under this Agreement in
the belief or expectation that a related payment has been or will be received by
Agent from U.S. Borrower and such related payment is not received by Agent, then
Agent will be entitled to recover such amount from such Lender on demand without
setoff, counterclaim or deduction of any kind.
(ii) If Agent determines at any time that any amount received by
Agent under this Agreement must be returned to U.S. Borrower or paid to any
other Person pursuant to any insolvency law or otherwise, then, notwithstanding
any other term or condition of this Agreement or any other Loan Document, Agent
will not be required to distribute any portion thereof to any Lender. In
addition, each Lender will repay to Agent on demand any portion of such amount
that Agent has distributed to such Lender, together with interest at such rate,
if any, as Agent is required to pay to U.S. Borrower or such other Person,
without setoff, counterclaim or deduction of any kind.
(d) Non-Funding Lenders. The failure of any Non-Funding Lender to
make any Revolving Credit Advance or any payment required by it hereunder, or to
purchase any participation in any Swing Line Loan or Participating Interest to
be made or purchased by it on the date specified therefor shall not relieve any
other Lender (each such other Lender, an "Other Lender") of its obligations to
make such Advance or purchase such participation on such date, but neither any
Other Lender nor Agent shall be responsible for the failure of any Non-Funding
Lender to make an Advance, purchase a participation or Participating Interest or
make any other payment required hereunder. Notwithstanding anything set forth
herein to the contrary, a Non-Funding Lender shall not have any voting or
consent rights under or with respect to any Loan Document or constitute a
"Lender" (or be included in the calculation of "Requisite Lenders" or
"Supermajority Lenders" hereunder) for any voting or consent rights under or
with respect to any Loan Document.
(e) Canadian Loan Refunding Date. From and after the Canadian Loan
Refunding Date, the provisions of Sections 8.5(b) and 8.5(c) with respect to
Agent, U.S. Revolving Credit Advances and U.S. Borrower shall also apply and
shall be deemed to refer, mutatis mutandis, to Canadian Agent, Canadian
Revolving Credit Advances and Canadian Borrower.
(f) Dissemination of Information. Agents shall use reasonable efforts
to provide Lenders with any notice of Default or Event of Default received by
Agents from, or delivered by Agents to, any Credit Party, with notice of any
Event of Default of which Agents
78
have actually become aware and with notice of any action taken by Agent
following any Event of Default; provided, that Agents shall not be liable to any
Lender for any failure to do so.
(g) Actions in Concert. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement or the Notes (including exercising any rights of setoff) without first
obtaining the prior written consent of Agents or Requisite Lenders, it being the
intent of Lenders that any such action to protect or enforce rights under this
Agreement and the Notes shall be taken in concert and at the direction or with
the consent of Agents or Requisite Lenders. Agents are authorized to issue all
notices to be issued by or on behalf of the Lenders with respect to any
Subordinated Debt.
SECTION 9.
MISCELLANEOUS
-------------
9.1 Indemnities. Borrowers agree, jointly and severally, to indemnify,
pay, and hold Agents, each Lender, each L/C Issuer and their respective
officers, directors, employees, agents, and attorneys (the "Indemnitees")
harmless from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs and expenses (including all
reasonable fees and expenses of counsel to such Indemnitees) of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against the
Indemnitee as a result of such Indemnitees being a party to this Agreement or
the transactions consummated pursuant to this Agreement or otherwise relating to
any of the Related Transactions; provided that Borrowers shall have no
obligation to an Indemnitee hereunder with respect to liabilities to the extent
resulting from the gross negligence or willful misconduct of that Indemnitee as
determined by a court of competent jurisdiction. If and to the extent that the
foregoing undertaking may be unenforceable for any reason, Borrowers agree to
make the maximum contribution to the payment and satisfaction thereof which is
permissible under applicable law.
9.2 Amendments and Waivers.
(a) Except for actions expressly permitted to be taken by Agents, no
amendment, modification, termination or waiver of any provision of this
Agreement or any other Loan Document, or any consent to any departure by any
Credit Party therefrom, shall in any event be effective unless the same shall be
in writing and signed by Borrowers, and by Requisite Lenders, Supermajority
Lenders or all affected Lenders, as applicable. Except as set forth in clauses
(b) and (c) below, all such amendments, modifications, terminations or waivers
requiring the consent of any Lenders shall require the written consent of
Requisite Lenders.
(b) No amendment, modification, termination or waiver of or consent
with respect to any provision of this Agreement that increases the percentage
advance rates set forth in the definition of the U.S. Borrowing Base or Canadian
Borrowing Base, or that makes less restrictive the nondiscretionary criteria for
exclusion from Eligible Accounts and Eligible Inventory set forth in Sections
1.7 and 1.8, shall be effective unless the same shall be in writing and signed
by Agent, with respect to the U.S. Borrowing Base, or Canadian Agent, with
respect
79
to the Canadian Borrowing Base, or both Agents with respect to the criteria in
Sections 1.7 and 1.8, Supermajority Lenders and Borrowers.
(c) No amendment, modification, termination or waiver shall, unless
in writing and signed by Agent (or Canadian Agent in the case of the Canadian
Revolving Loan) and each Lender directly affected thereby: (i) increase the
principal amount of any Lender's Commitment (which action shall be deemed to
directly affect all Lenders); (ii) reduce the principal of, rate of interest on
or Fees payable with respect to any Loan or Letter of Credit Obligations of any
affected Lender; (iii) extend or waive any scheduled payment date or final
maturity date of the principal amount of any Loan of any affected Lender; (iv)
waive, forgive, defer, extend or postpone any payment of interest or Fees as to
any affected Lender (which action shall be deemed only to affect those Lenders
to whom such payments are made); (v) release any Guaranty or, except as
otherwise permitted in Section 3.7, release Collateral with a book value
exceeding 5% of the book value of all assets in the aggregate in any one (1)
year (which action shall be deemed to directly affect all Lenders); (vi) change
the percentage of the Commitments or of the aggregate unpaid principal amount of
the Loans that shall be required for Lenders or any of them to take any action
hereunder; and (vii) amend or waive this Section 9.2 or the definitions of the
terms "Requisite Lenders" or "Supermajority Lenders" insofar as such definitions
affect the substance of this Section 9.2. Furthermore, no amendment,
modification, termination or waiver affecting the rights or duties of Agent or
L/C Issuers under this Agreement or any other Loan Document shall be effective
unless in writing and signed by Agent or L/C Issuers, as the case may be, in
addition to Lenders required hereinabove to take such action. Each amendment,
modification, termination or waiver shall be effective only in the specific
instance and for the specific purpose for which it was given. No amendment,
modification, termination or waiver shall be required for Agent or Canadian
Agent, as applicable, to take additional Collateral pursuant to any Loan
Document. No amendment, modification, termination or waiver of any provision of
any Note shall be effective without the written concurrence of the holder of
that Note. No notice to or demand on any Credit Party in any case shall entitle
such Credit Party or any other Credit Party to any other or further notice or
demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 9.2
shall be binding upon each holder of the Notes at the time outstanding and each
future holder of the Notes.
9.3 Notices. Any notice or other communication required shall be in
writing addressed to the respective party as set forth below and may be
personally served, telecopied, sent by overnight courier service or U.S. mail
(if such communication is initiated in the United States) or with Canada Post
(if such communication is initiated in Canada) and shall be deemed to have been
given: (a) if delivered in person, when delivered; (b) if delivered by fax, on
the date of transmission if transmitted on a Business Day before 4:00 p.m. New
York Time; (c) if delivered by overnight courier, one (1) Business Day after
delivery to the courier properly addressed; or (d) if delivered by U.S. mail or
Canada Post, four (4) Business Days after deposit with postage prepaid and
properly addressed.
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Notices shall be addressed as follows:
If to Borrower Representative: United Agri Products, Inc.
▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: Senior Financial Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: APOLLO MANAGEMENT, L.P.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Agent or GE Capital: GENERAL ELECTRIC CORPORATION
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: United Agri Products,
Inc. Account Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Canadian Agent GE CANADA FINANCE INC.
or GE Canada: c/o General Electric Capital
Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: United Agri Products,
Inc. Account Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
In each case, with a copy to: GENERAL ELECTRIC CAPITAL
CORPORATION
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇
ATTN: Corporate Counsel
Commercial Finance - Equity
Sponsor Group
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and
GENERAL ELECTRIC CAPITAL
CORPORATION
81
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ATTN: Corporate Counsel
Commercial Finance - Equity
Sponsor Group
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to a Lender: To the address set forth on the
signature page hereto or in the
applicable Assignment Agreement
9.4 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or
delay on the part of Agents or any Lender to exercise, nor any partial exercise
of, any power, right or privilege hereunder or under any other Loan Documents
shall impair such power, right, or privilege or be construed to be a waiver of
any Default or Event of Default. All rights and remedies existing hereunder or
under any other Loan Document are cumulative to and not exclusive of any rights
or remedies otherwise available.
9.5 Marshaling; Payments Set Aside. Neither Agents nor any Lender shall be
under any obligation to marshal any assets in payment of any or all of the
Obligations. To the extent that Borrowers make payment(s) or Agents enforce
their Liens or Agents or any Lender exercises their right of set-off, and such
payment(s) or the proceeds of such enforcement or set-off is subsequently
invalidated, declared to be fraudulent or preferential, set aside, or required
to be repaid by anyone, then to the extent of such recovery, the Obligations or
part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor, shall be revived and continued in full force and effect as if
such payment had not been made or such enforcement or set-off had not occurred.
9.6 Severability. The invalidity, illegality, or unenforceability in any
jurisdiction of any provision under the Loan Documents shall not affect or
impair the remaining provisions in the Loan Documents.
9.7 Lenders' Obligations Several; Independent Nature of Lenders' Rights.
The obligations of each Lender, Agent and Canadian Agent hereunder is several
and not joint and no Lender shall be responsible for the obligation or
commitment of any other Lender hereunder. In the event that any Lender at any
time should fail to make a Loan as herein provided, the Lenders, or any of them,
at their sole option, may make the Loan that was to have been made by the Lender
so failing to make such Loan. Nothing contained in any Loan Document and no
action taken by Agent or any Lender pursuant hereto or thereto shall be deemed
to constitute Lenders to be a partnership, an association, a joint venture or
any other kind of entity. The amounts payable at any time hereunder to each
Lender shall be a separate and independent debt.
9.8 Headings. Section and subsection headings are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purposes or be given substantive effect.
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9.9 Applicable Law. THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS
WHICH DOES NOT EXPRESSLY SET FORTH APPLICABLE LAW SHALL BE GOVERNED BY AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.
9.10 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
except that Borrowers may not assign their rights or obligations hereunder
without the written consent of all Lenders.
9.11 No Fiduciary Relationship; Limited Liability. No provision in the Loan
Documents and no course of dealing between the parties shall be deemed to create
any fiduciary duty owing to Borrowers by Agents or any Lender. Borrowers agree
that neither Agents nor any Lender shall have liability to Borrowers (whether
sounding in tort, contract or otherwise) for losses suffered by Borrowers in
connection with, arising out of, or in any way related to the transactions
contemplated and the relationship established by the Loan Documents, or any act,
omission or event occurring in connection therewith, unless and to the extent
that it is determined that such losses resulted from the gross negligence or
willful misconduct of the party from which recovery is sought as determined by a
final non-appealable order by a court of competent jurisdiction. Neither Agents
nor any Lender shall have any liability with respect to, and Borrowers hereby
waive, release and agree not to ▇▇▇ for, any special, indirect or consequential
damages suffered by Borrowers in connection with, arising out of, or in any way
related to the Loan Documents or the transactions contemplated thereby.
9.12 Construction. Agents, each Lender, Borrowers and each other Credit
Party acknowledge that each of them has had the benefit of legal counsel of its
own choice and has been afforded an opportunity to review the Loan Documents
with its legal counsel and that the Loan Documents shall be construed as if
jointly drafted by Agents, each Lender, Borrowers and each other Credit Party.
9.13 Confidentiality. Agents and each Lender agree to exercise their best
efforts to keep confidential any non-public information delivered pursuant to
the Loan Documents and identified as such by Borrowers and not to disclose such
information to Persons other than to potential assignees or participants or to
Persons employed by or engaged by Agents, a Lender or a Lender's assignees or
participants including attorneys, auditors, professional consultants, rating
agencies, insurance industry associations and portfolio management services. The
confidentiality provisions contained in this Section 9.13 shall not apply to
disclosures (i) required to be made by Agents or any Lender to any regulatory or
governmental agency or pursuant to legal process or (ii) consisting of general
portfolio information that does not identify Borrowers. The obligations of
Agents and Lenders under this Section 9.13 shall supersede and replace the
obligations of Agents and Lenders under any confidentiality agreement in respect
of this financing executed and delivered by Agents or any Lender prior to the
date hereof. Notwithstanding anything to the contrary set forth herein or in any
other agreement to which the parties hereto are parties or by which they are
bound, the obligations of confidentiality contained herein and therein, as they
relate to the transactions contemplated by this Agreement, shall not
83
apply to the federal tax structure or federal tax treatment of the transactions
contemplated by this Agreement, and each party hereto (and any employee,
representative, or agent of any party hereto) may disclose to any and all
persons, without limitation of any kind, the federal tax structure and federal
tax treatment of the transactions contemplated by this Agreement. The preceding
sentence is intended to cause the transaction contemplated by this Agreement to
be treated as not having been offered under conditions of confidentiality for
purposes of Section 1.6011-4(b)(3) (or any successor provision) of the Treasury
Regulations promulgated under Section 6011 of the IRC, and shall be construed in
a manner consistent with such purpose. In addition, each party hereto
acknowledges that it has no proprietary or exclusive rights to the federal tax
structure of the transaction contemplated by this Agreement or any federal tax
matter or federal tax idea related to the transaction contemplated by this
Agreement.
9.14 CONSENT TO JURISDICTION. BORROWERS AND CREDIT PARTIES HEREBY CONSENT
TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN NEW YORK
COUNTY, STATE OF NEW YORK AND IRREVOCABLY AGREE THAT, SUBJECT TO AGENTS'
ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS.
BORROWERS AND CREDIT PARTIES EXPRESSLY SUBMIT AND CONSENT TO THE JURISDICTION OF
THE AFORESAID COURTS AND WAIVE ANY DEFENSE OF FORUM NON CONVENIENS. BORROWERS
AND CREDIT PARTIES HEREBY WAIVE PERSONAL SERVICE OF ANY AND ALL PROCESS AND
AGREE THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON BORROWERS AND CREDIT
PARTIES BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO
BORROWER REPRESENTATIVE, AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND SERVICE
SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED; PROVIDED
FURTHER THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE
THE AGENTS FROM BRINGING SUIT OR OTHER LEGAL ACTION IN ANY JURISDICTION OR TO
REALIZE ON COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS OR TO ENFORCE
ANY JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE AGENTS.
9.15 WAIVER OF JURY TRIAL. BORROWERS, CREDIT PARTIES, AGENTS AND EACH
LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS. BORROWERS, CREDIT PARTIES, AGENTS AND EACH LENDER ACKNOWLEDGE THAT
THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
EACH HAS RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED
FUTURE DEALINGS. BORROWERS, CREDIT PARTIES, AGENTS AND EACH LENDER WARRANT AND
REPRESENT THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH
LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS.
84
9.16 Survival of Warranties and Certain Agreements. All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement, the making of the Loans, issuances of Letters of
Credit and the execution and delivery of the Notes. Notwithstanding anything in
this Agreement or implied by law to the contrary, the agreements of Borrowers
set forth in Sections 1.3(e), 1.10, 1.11 and 9.1 shall survive the repayment of
the Obligations and the termination of this Agreement.
9.17 Entire Agreement. This Agreement, the Notes and the other Loan
Documents embody the entire agreement among the parties hereto and supersede all
prior commitments, agreements, representations, and understandings, whether oral
or written, relating to the subject matter hereof, and may not be contradicted
or varied by evidence of prior, contemporaneous, or subsequent oral agreements
or discussions of the parties hereto. All Exhibits, Disclosure Schedules and
Annexes referred to herein are incorporated in this Agreement by reference and
constitute a part of this Agreement.
9.18 Counterparts; Effectiveness. This Agreement and any amendments,
waivers, consents or supplements may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all of which
counterparts together shall constitute but one in the same instrument. This
Agreement shall become effective upon the execution of a counterpart hereof by
each of the parties hereto.
9.19 Replacement of Lenders.
(a) Within fifteen (15) days after receipt by Borrower Representative
of written notice and demand from any Lender for payment pursuant to Section
1.10 or 1.11 or, as provided in this Section 9.19(a), in the case of certain
refusals by any Lender to consent to certain proposed amendments, modifications,
terminations or waivers with respect to this Agreement that have been approved
by Requisite Lenders, Supermajority Lenders or all affected Lenders, as
applicable (any such Lender demanding such payment or refusing to so consent
being referred to herein as an "Affected Lender"), Borrowers may, at their
option, notify Agent (or, in the case of Canadian Borrower, Canadian Agent) and
such Affected Lender of its intention to do one of the following:
(i) Borrowers may obtain, at Borrowers' expense, a replacement
Lender ("Replacement Lender") for such Affected Lender, which Replacement Lender
shall be reasonably satisfactory to Agent (or, in the case of Canadian Borrower,
Canadian Agent). In the event Borrowers obtain a Replacement Lender that will
purchase all outstanding Obligations owed to such Affected Lender and assume its
Commitments hereunder within ninety (90) days following notice of Borrowers'
intention to do so, the Affected Lender shall sell and assign all of its rights
and delegate all of its obligations under this Agreement to such Replacement
Lender in accordance with the provisions of Section 8.1, provided, that
Borrowers have reimbursed such Affected Lender for any administrative fee
payable pursuant to Section 8.1 and, in any case where such replacement occurs
as the result of a demand for payment pursuant to Section 1.10 or
85
1.11, paid all amounts required to be paid to such Affected Lender pursuant to
Section 1.10 or 1.11 through the date of such sale and assignment; or
(ii) Borrowers may, with Agent's (or, in the case of Canadian
Borrower, Canadian Agent) consent, prepay in full all outstanding Obligations
owed to such Affected Lender and terminate such Affected Lender's Pro Rata Share
of the Revolving Loan Commitments, in which case the Revolving Loan Commitments
will be reduced by the amount of such Pro Rata Share. Borrowers shall, within
ninety (90) days following notice of their intention to do so, prepay in full
all outstanding Obligations owed to such Affected Lender (including, in any case
where such prepayment occurs as the result of a demand for payment for increased
costs, such Affected Lender's increased costs for which it is entitled to
reimbursement under this Agreement through the date of such prepayment), and
terminate such Affected Lender's obligations under the Revolving Loan
Commitment.
(b) In the case of a Non-Funding Lender pursuant to Section 8.5(d),
at Borrower Representative's request, Agent or a Person acceptable to Agent
shall have the right with Agent's consent and in Agent's sole discretion (but
shall have no obligation) to purchase from any Non-Funding Lender, and each
Non-Funding Lender agrees that it shall, at Agent's request, sell and assign to
Agent or such Person, all of the Loans, Participating Interests and Commitments
of that Non-Funding Lender for an amount equal to the principal balance of all
Loans held by such Non-Funding Lender and all accrued interest and Fees with
respect thereto through the date of sale, such purchase and sale to be
consummated pursuant to an executed Assignment Agreement.
(c) If, in connection with any proposed amendment, modification,
waiver or termination pursuant to Section 9.2 (a "Proposed Change"):
(i) requiring the consent of all affected Lenders, the consent
of Requisite Lenders is obtained, but the consent of other Lenders whose consent
is required is not obtained (any such Lender whose consent is not obtained as
described in this clause (i) and in clauses (ii) and (iii) below being referred
to as a "Non-Consenting Lender"),
(ii) requiring the consent of Supermajority Lenders, the consent
of Requisite Lenders is obtained, but the consent of Supermajority Lenders is
not obtained,
(iii) requiring the consent of Requisite Lenders, the consent of
Lenders holding 51% or more of the aggregate Commitments is obtained, but the
consent of Requisite Lenders is not obtained,
then, so long as Agent is not a Non-Consenting Lender, at Borrower
Representative's request Agent, or a Person reasonably acceptable to Agent,
shall have the right with Agent's consent and in Agent's sole discretion (but
shall have no obligation) to purchase from such Non-Consenting Lenders, and such
Non-Consenting Lenders agree that they shall, upon Agent's request, sell and
assign to Agent or such Person, all of the Loans and Commitments of such
Non-Consenting Lenders for an amount equal to the principal balance of all Loans
held by the Non-Consenting
86
Lenders and all accrued interest and Fees with respect thereto through the date
of sale, such purchase and sale to be consummated pursuant to an executed
Assignment Agreement.
9.20 Delivery of Termination Statements and Mortgage Releases. Upon payment
in full in cash and performance of all of the Obligations (other than
indemnification Obligations), termination of the Commitments and a release of
all claims against Agents and Lenders, and so long as no suits, actions
proceedings, or claims are pending or threatened against any Indemnitee
asserting any damages, losses or liabilities that are indemnified liabilities
hereunder, Agents shall deliver to Borrower Representative termination
statements, mortgage releases and other documents necessary or appropriate to
evidence the termination of the Liens securing payment of the Obligations. In
addition, in connection with any transaction permitted under Sections 3.7 or
3.17, the Agent or Canadian Agent, as applicable, shall promptly release its
Liens on all assets sold, conveyed, leased, subleased, transferred or otherwise
disposed of in accordance with such sections.
9.21 English Language. The parties hereby confirm their express wish that
this Agreement and all documents and agreements directly and indirectly related
thereto, including notices, be drawn up in English only. Les parties
reconnaissent leur volonte express que la presente convention ainsi que tous les
documents et conventions qui s'y rattachent directement ou indirectement, y
compris ▇▇▇ ▇▇▇▇, soient rediges en langue anglaise seulement.
SECTION 10.
CROSS-GUARANTY
--------------
10.1 Cross-Guaranty. U.S. Borrower hereby agrees that it is liable for, and
hereby absolutely and unconditionally guarantees to Agent and Lenders and their
respective successors and assigns, the full and prompt payment (whether at
stated maturity, by acceleration or otherwise) and performance of, all
Obligations owed or hereafter owing to Agent and Lenders by Canadian Borrower.
U.S. Borrower agrees that its guaranty obligation hereunder is a continuing
guaranty of payment and performance and not of collection, that its obligations
under this Section 10 shall not be discharged until payment and performance, in
full, of the Obligations guaranteed hereunder has occurred, and that its
obligations under this Section 10 shall be absolute and unconditional,
irrespective of, and unaffected by,
(a) the genuineness, validity, regularity, enforceability or any
future amendment of, or change in, this Agreement, any other Loan Document or
any other agreement, document or instrument to which any Borrower is or may
become a party;
(b) the absence of any action to enforce this Agreement (including
this Section 10) or any other Loan Document or the waiver or consent by Agent
and Lenders with respect to any of the provisions thereof;
(c) the existence, value or condition of, or failure to perfect its
Lien against, any security for the Obligations or any action, or the absence of
any action, by Agent and Lenders in respect thereof (including the release of
any such security);
87
(d) the insolvency of any Credit Party; or
(e) any other action or circumstances that might otherwise constitute
a legal or equitable discharge or defense of a surety or guarantor.
U.S. Borrower shall be regarded, and shall be in the same position, as principal
debtor with respect to the Obligations guaranteed hereunder.
10.2 Waivers by U.S. Borrower. U.S. Borrower expressly waives all rights it
may have now or in the future under any statute, or at common law, or at law or
in equity, or otherwise, to compel Agent or Lenders to marshal assets or to
proceed in respect of the Obligations guaranteed hereunder against any other
Credit Party, any other party or against any security for the payment and
performance of the Obligations guaranteed hereunder before proceeding against,
or as a condition to proceeding against, U.S. Borrower. It is agreed among each
Borrower, Agent and Lenders that the foregoing waivers are of the essence of the
transaction contemplated by this Agreement and the other Loan Documents and
that, but for the provisions of this Section 10 and such waivers, Agent and
Lenders would decline to enter into this Agreement. U.S. Borrower also expressly
waives the benefits of division and discussion under the Civil Code of Quebec.
10.3 Benefit of Guaranty. U.S. Borrower agrees that the provisions of this
Section 10 are for the benefit of Agent and Lenders and their respective
successors, transferees, endorsees and assigns, and nothing herein contained
shall impair, as between any Credit Party and Agent or Lenders, the obligations
of any Credit Party under the Loan Documents.
10.4 Waiver of Subrogation, Etc. Notwithstanding anything to the contrary
in this Agreement or in any other Loan Document, U.S. Borrower hereby expressly
and irrevocably waives any and all rights at law or in equity to subrogation,
reimbursement, exoneration, contribution, indemnification or set off and any and
all defenses available to a surety, guarantor or accommodation co-obligor. U.S.
Borrower acknowledges and agrees that this waiver is intended to benefit Agent
and Lenders and shall not limit or otherwise affect U.S. Borrower's liability
hereunder or the enforceability of this Section 10, and that Agent, Lenders and
their respective successors and assigns are intended third party beneficiaries
of the waivers and agreements set forth in this Section 10.4.
10.5 Election of Remedies. If Agent or any Lender may, under applicable
law, proceed to realize its benefits under any of the Loan Documents giving
Agent or such Lender a Lien upon any Collateral, whether owned by U.S. Borrower
or by any other Person, either by judicial foreclosure or by non-judicial sale
or enforcement, Agent or any Lender may, at its sole option, determine which of
its remedies or rights it may pursue without affecting any of its rights and
remedies under this Section 10. If, in the exercise of any of its rights and
remedies, Agent or any Lender shall forfeit any of its rights or remedies,
including its right to enter a deficiency judgment against U.S. Borrower or any
other Person, whether because of any applicable laws pertaining to "election of
remedies" or the like, U.S. Borrower hereby consents to such action by Agent or
such Lender and waives any claim based upon such action, even if such action by
88
Agent or such Lender shall result in a full or partial loss of any rights of
subrogation that U.S. Borrower might otherwise have had but for such action by
Agent or such Lender. Any election of remedies that results in the denial or
impairment of the right of Agent or any Lender to seek a deficiency judgment
against any other Person shall not impair any other Borrower's obligation to pay
the full amount of the Obligations (subject to Section 10.7, in the case of
Canadian Borrower and its Subsidiaries). In the event Agent or any Lender shall
bid at any foreclosure or trustee's sale or at any private sale permitted by law
or the Loan Documents, Agent or such Lender may bid all or less than the amount
of the Obligations guaranteed hereunder and the amount of such bid need not be
paid by Agent or such Lender but shall be credited against the Obligations
guaranteed hereunder. The amount of the successful bid at any such sale, whether
Agent, Lender or any other party is the successful bidder, shall be conclusively
deemed to be the fair market value of the Collateral and the difference between
such bid amount and the remaining balance of the Obligations guaranteed
hereunder shall be conclusively deemed to be the amount of the Obligations
guaranteed under this Section 10, notwithstanding that any present or future law
or court decision or ruling may have the effect of reducing the amount of any
deficiency claim to which Agent or any Lender might otherwise be entitled but
for such bidding at any such sale.
10.6 Liability Cumulative. The liability of U.S. Borrower under this
Section 10 is in addition to and shall be cumulative with all liabilities of
U.S. Borrower to Agent and Lenders under this Agreement and the other Loan
Documents to which U.S. Borrower is a party or in respect of any Obligations or
obligation of Canadian Borrower, without any limitation as to amount, unless the
instrument or agreement evidencing or creating such other liability specifically
provides to the contrary.
10.7 Canadian Borrower and Its Subsidiaries. Notwithstanding any provision
contained in this Section 10 to the contrary, none of Canadian Borrower, Access
or any other Credit Party organized under the laws of Canada or any Province
thereof are guarantors of the Obligations of the U.S. Borrower or otherwise
obligated or liable for any of the Obligations other than those related to or
arising from the Canadian Revolving Loan and those covenants, representations
and warranties, agreements and other terms and conditions set forth herein and
in the other Loan Documents applicable to Canadian Borrower, Access or such
other Canadian Credit Party, or their respective assets or operations.
(Signature pages follow)
89
Witness the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
BORROWERS:
----------
UNITED AGRI PRODUCTS CANADA, INC.,
as Canadian Borrower
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
UNITED AGRI PRODUCTS, INC., as U.S.
Borrower
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
S-1
CREDIT PARTIES:
---------------
UAP HOLDING CORP.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
AG-CHEM, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
▇▇▇▇▇▇ CHEMICALS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
UAP 23, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
CROPMATE COMPANY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
CSK ENTERPRISES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
S-2
GAC 26, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
GROWER SERVICE CORPORATION
(NEW YORK)
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
HACO, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
LOVELAND INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
LOVELAND PRODUCTS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
MIDWEST AGRICULTURE WAREHOUSE CO.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
S-3
▇▇▇▇▇▇▇ CHEMICAL CO.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
PLATTE CHEMICAL CO.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
PUEBLO CHEMICAL & SUPPLY CO.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
RAVAN PRODUCTS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
S.E. ENTERPRISES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
SNAKE RIVER CHEMICALS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
S-4
TRANSBAS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
TRI-RIVER CHEMICAL COMPANY, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
TRI-STATE CHEMICALS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
TRI-STATE DELTA CHEMICALS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
UAP RECEIVABLES CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
UAP 22, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
S-5
UAP/GA AG-CHEM, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
UAPLP, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
UNITED AGRI PRODUCTS - FLORIDA, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
UNITED AGRI PRODUCTS FINANCIAL
SERVICES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
VERDICON, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
YVC, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
UAP 27, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
S-6
GENMARKS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
2326396 Canada, Inc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
S-7
AGENTS:
-------
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent, an L/C Issuer and a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Its Duly Authorized Signatory
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
GE CANADA FINANCE INC., as Canadian
Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Its Duly Authorized Signatory
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
S-8
LENDERS:
--------
UBS LOAN FINANCE LLC, as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. Saint
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Saint
Title: Associate Director
Banking Products Services, U.S.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Associate Director
Banking Products Services, US
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
S-9
ANNEX A
to
CREDIT AGREEMENT
----------------
DEFINITIONS
-----------
Capitalized terms used in the Loan Documents shall have (unless
otherwise provided elsewhere in the Loan Documents) the following respective
meanings and all references to Sections, Exhibits, Schedules or Annexes in the
following definitions shall refer to Sections, Exhibits, Disclosure Schedules or
Annexes of or to the Agreement:
"Acceleration of the Obligations" has the meaning ascribed to it in
Section 6.3.
"Access" means 2326396 Canada Inc., an entity organized under the
federal laws of Canada.
"Access Guaranty" means the Guaranty of even date herewith executed by
Access in favor of Canadian Agent, on behalf of itself and Lenders.
"Account Debtor" means any Person who may become obligated to any
Credit Party under, with respect to, or on account of, an Account, Chattel Paper
or General Intangibles (including a payment intangible).
"Accounting Changes" means: (a) changes in accounting principles
required by GAAP and implemented by Holdings or any of its Subsidiaries; (b)
changes in accounting principles recommended by Borrowers' certified public
accountants and implemented by any Borrower; and (c) changes in carrying value
of any Borrower's or any of its Subsidiaries' assets, liabilities or equity
accounts resulting from (i) the application of purchase accounting principles
(FASB 141 and EITF 88-16 and FASB 109) to the Related Transactions or (ii) as
the result of any other adjustments that, in each case, were applicable to, but
not included in, the Pro Forma.
"Accounts" means all "accounts," as such term is defined in the Code
or the PPSA or "claims," as such term is defined under the Civil Code of Quebec,
now owned or hereafter acquired by any Credit Party, including (a) all accounts
receivable, other receivables, book debts and other forms of obligations (other
than forms of obligations evidenced by Chattel Paper or Instruments), (including
any such obligations that may be characterized as an account or contract right
under the Code, PPSA or Civil Code of Quebec), (b) all of each Credit Party's
rights in, to and under all purchase orders or receipts for goods or services,
(c) all of each Credit Party's rights to any goods represented by any of the
foregoing (including unpaid sellers' rights of rescission, replevin, reclamation
and stoppage in transit and rights to returned, reclaimed or repossessed goods),
(d) all rights to payment due to any Credit Party for property sold, leased,
licensed, assigned or otherwise disposed of, for a policy of insurance issued or
to be issued, for a secondary obligation incurred or to be incurred, for energy
provided or to be provided, for the use or hire of a vessel under a charter or
other contract, arising out of the use of a credit card or charge card, or for
services rendered or to be rendered by such Credit Party or in connection with
any other transaction (whether or not yet earned by performance on the part of
such Credit
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Party), (e) all healthcare insurance receivables, and (f) all collateral
security of any kind, now or hereafter in existence, given by any Account Debtor
or other Person with respect to any of the foregoing.
"Acquisition" means the purchase by Holdings from Seller pursuant to
the Acquisition Agreement.
"Acquisition Pro Forma" has the meaning ascribed to it in Section 3.6.
"Acquisition Projections" has the meaning ascribed to it in Section
3.6.
"Acquisition Agreement" means that certain Stock Purchase Agreement
dated as of October 29, 2003 by and among Holdings, ConAgra Foods, Inc. and UAP.
"Acquisition Co." means UAP Acquisition Corp., a Delaware corporation.
"Advances" means any U.S. Revolving Credit Advance (including
In-Season Overadvances), Canadian Revolving Credit Advance or Swing Line
Advance, as the context may require.
"Affected Lender" has the meaning ascribed to it in Section 9.19(a).
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and officers of such Person), controlled by, or under direct or indirect common
control with, such Person; provided, however, that for purposes of Section 3.8,
an Affiliate of the Borrower shall include any Person that directly or
indirectly owns more than 5% of any class of the capital stock of Holdings and
any officer or director of the Borrower or any such Person. Notwithstanding the
foregoing, ConAgra Foods, Inc., shall not be deemed to be an Affiliate of any
Credit Party or any Subsidiary of a Credit Party so long as ConAgra Foods, Inc.,
does not own at any time an aggregate amount greater than 15% of the outstanding
capital stock of UAP entitled to vote in the election of directors. For the
purposes of this definition, "control" of a Person shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of its
management or policies, whether through the ownership of voting securities, by
contract or otherwise; provided, however, that the term "Affiliate" shall
specifically exclude Agent and each Lender.
"Agent" means GE Capital in its capacity as Agent for itself, the
Lenders and as agent for Canadian Agent, or its successor appointed pursuant to
Section 8.2.
"Agents" means Agent and Canadian Agent.
"Aggregate Borrowing Availability" means as of any date of
determination the sum of Canadian Borrowing Availability and U.S. Borrowing
Availability.
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"Agreement" means this Credit Agreement (including all schedules,
subschedules, annexes and exhibits hereto), as the same may be amended,
supplemented, restated or otherwise modified from time to time.
"Allocable Amount" has the meaning ascribed to it in Section 10.7.
"Applicable In-Season Overadvance Index Margin" means the per annum
interest rate payable in addition to the Index Rate applicable to In-Season
Overadvances, as determined by reference to Section 1.2(a).
"Applicable In-Season Overadvance LIBOR Margin" means the per annum
interest rate payable in addition to the LIBOR Rate applicable to In-Season
Overadvances, as determined by reference to Section 1.2(a).
"Applicable In-Season Overadvance Margins" means the Applicable
In-Season Overadvance LIBOR Margin and Applicable In-Season Overadvance Index
Margin.
"Applicable Margins" means collectively the Applicable Revolver Index
Margin, the Applicable Revolver LIBOR Margin, the Applicable In-Season
Overadvance Margins and the Applicable Unused Line Fee Margin.
"Applicable Revolver Index Margin" means the per annum interest rate
margin from time to time in effect and payable in addition to the Index Rate
applicable to the Revolving Credit Advances (other than In-Season Overadvances),
as determined by reference to Section 1.2(a).
"Applicable Revolver LIBOR Margin" means the per annum interest rate
from time to time in effect and payable in addition to the LIBOR Rate applicable
to the Revolving Credit Advances (other than In-Season Overadvances), as
determined by reference to Section 1.2(a).
"Applicable Unused Line Fee Margin" means the per annum fee, from time
to time in effect, payable in respect of Borrowers' non-use of committed funds
pursuant to Section 1.3(b), which fee is determined by reference to Section
1.2(a).
"Apollo" means Apollo Management V, L.P., a Delaware limited
partnership and its Affiliates.
"Appraisal" means an appraisal delivered by Borrower Representative to
Agent prior to the Closing Date and semi-annually thereafter pursuant to Section
4.3(e) setting forth the Net Orderly Liquidation Value of Inventory of each
Borrower, in form and substance and prepared by an independent appraiser
reasonably acceptable to Agent.
"Asset Disposition" means the disposition, whether by sale, lease,
transfer or otherwise, of (a) any of the Stock or other equity or ownership
interest of any of Borrowers' Subsidiaries or (b) any or all of the assets of
Borrowers or any of their Subsidiaries, in each case
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other than: (1) sales of Inventory in the ordinary course of business, (2)
customary sales, assignments and other dispositions of delinquent Accounts and
payment rights for collection, (3) sales, assignments or other dispositions of
other assets so long as the purchase price of the assets sold, assigned or
otherwise disposed of is less than $1,000,000 or the Dollar Equivalent thereof
in the aggregate in any Fiscal Year and (4) sales, transfers and other
dispositions from a Credit Party to another Credit Party other than an Inactive
Subsidiary.
"Assignment Agreement" has the meaning ascribed to it in Section
8.1(a).
"Bankruptcy Code" means the provisions of Title 11 of the United
States Code, 11 U.S.C. Sections 101 et seq., Insolvency Laws or other applicable
bankruptcy, insolvency or similar laws.
"Borrowers" has the meaning ascribed to it in the Preamble.
"Borrower Representative" means UAP in its capacity as Borrower
Representative pursuant to the provisions of Section 1.12.
"Borrowing Base Certificate" has the meaning ascribed to it in Section
4.3(d).
"Bridge Loans" has the meaning ascribed to it in Section 3.1(c).
"Bridge Loan Documents" means the Bridge Loan Agreement and each other
instrument or agreement executed and delivered in connection therewith.
"Bridge Loan Agreement" has the meaning ascribed to it in Section
3.1(c).
"Business Day" means any day that is not a Saturday, a Sunday or a day
on which banks are required or permitted to be closed in the State of New York,
or with respect to Canadian Revolving Loan, the Province of Ontario, and in
reference to LIBOR Loans shall mean any such day that is also a LIBOR Business
Day.
"Canadian Acquisitions" means a subcategory of Permitted Acquisitions
involving assets, at least 90% of which are located in Canada, or a Target that
is organized under the laws of Canada or some political subdivision thereof at
least 90% of the assets of which are located in Canada.
"Canadian Agent" means GE Canada.
"Canadian Benefit Plans" means all material employee benefit plans,
programs or arrangements of any nature or kind whatsoever that are not Canadian
Pension Plans and are maintained or contributed to by, or to which there is or
may be an obligation to contribute by, Canadian Borrower or its Subsidiaries in
respect of their employees or former employees in Canada.
"Canadian Borrower" has the meaning ascribed to it in the Preamble.
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"Canadian Borrowing Availability" means as of any date of
determination the lesser of (i) the Canadian Sub-Limit or (ii) the Dollar
Equivalent of the Canadian Borrowing Base, in each case, less the sum of (a) the
Dollar Equivalent of the Canadian Revolving Loan then outstanding, and (b) the
amount of the U.S. Revolving Loan outstanding in excess of $480,000,000.
"Canadian Borrowing Base" means, as of any date of determination by
Agent, from time to time, an amount equal to the sum at such time of:
(a) 85% of the book value of Canadian Borrower's and its Wholly-Owned
Domestic Subsidiaries' Eligible Accounts (other than Extended Accounts) at
such time;
(b) 75% of the book value of Canadian Borrower's and its Wholly-Owned
Domestic Subsidiaries' Eligible Extended Accounts; and
(c) the lesser of (i) 55% (65% during the period from April 1 to July
31 of each year) of the book value of such Canadian Borrower's and its
Wholly-Owned Domestic Subsidiaries' Eligible Inventory valued at the lower
of cost (determined on a first-in, first-out basis) or market or (ii) 85%
multiplied by the most recently determined Net Orderly Liquidation Value
Factor multiplied by the book value of Canadian Borrower's and its
Wholly-Owned Domestic Subsidiaries' Eligible Inventory.
"Canadian Disbursement Account" has the meaning ascribed to it in
Section 1.1(d).
"Canadian Dollars" means the lawful currency of the country of Canada.
"Canadian Loan Refunding Date" means the date of any Notice of
Canadian Revolving Loan Refunding.
"Canadian Overadvance" has the meaning ascribed to it in Section
1.1(a)(ii).
"Canadian Pay Down" has the meaning ascribed to it in Section
1.1(a)(ii).
"Canadian Pension Plans" means all plans, programs or arrangements
which are considered to be a pension plan for the purposes of any applicable
pension benefits standards or tax statute and/or regulation in Canada
established, maintained or contributed to by, or to which there is or may be an
obligation to contribute by, Canadian Borrower or its Subsidiaries in respect of
their Canadian employees or former employees but does not include the Canada
Pension Plan or Quebec Pension Plan maintained by the Government of Canada or
Quebec, respectively.
"Canadian Revolving Loan" means, at any time, the aggregate amount of
Canadian Revolving Credit Advances outstanding to Canadian Borrower.
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"Canadian Revolving Credit Advance" has the meaning ascribed to it in
Section 1.1(a)(ii).
"Canadian Security Agreement" means that Security Agreement of even
date herewith entered into by and among Canadian Agent, on behalf of itself and
Lenders, Access and Canadian Borrower.
"Canadian Sub-Limit" means the sum of $20,000,000.
"Capital Expenditures" means, with respect to any Person, all
expenditures (by the expenditure of cash or the incurrence of Indebtedness) by
such Person during any measuring period for any fixed assets or improvements or
for replacements, substitutions or additions thereto that have a useful life of
more than one year and that are required to be capitalized under GAAP, excluding
any amounts spent on the Acquisition or other Permitted Acquisitions.
"Capital Lease" means, with respect to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee that, in
accordance with GAAP, would be required to be classified and accounted for as a
capital lease on a balance sheet of such Person.
"Capital Lease Obligation" means, with respect to any Capital Lease of
any Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.
"Cash Equivalents" means: (i) marketable securities (A) issued or
directly and unconditionally guaranteed as to interest and principal by the
United States or Canadian government or (B) issued by any agency of the United
States or Canadian government the obligations of which are backed by the full
faith and credit of the United States or Canada, in each case maturing within
one (1) year after acquisition thereof; (ii) marketable direct obligations
issued by any state or territory of the United States of America or any province
or territory of Canada or any political subdivision of any such state, or
province or any public instrumentality thereof, in each case maturing within one
year after acquisition thereof and having, at the time of acquisition, a rating
of at least A-1 from S&P or at least P-1 from ▇▇▇▇▇'▇; (iii) commercial paper
maturing no more than one year from the date of acquisition and, at the time of
acquisition, having a rating of at least A-1 from S&P or at least P-1 from
▇▇▇▇▇'▇; (iv) certificates of deposit or bankers' acceptances issued or accepted
by any Lender or by any commercial bank organized under the laws of the United
States of America or any state thereof or the District of Columbia or Canada or
any province or territory thereof that is at least (A) "adequately capitalized"
(or the equivalent, in each case as defined in the regulations of its primary
banking regulator) and (B) has Tier 1 capital (or the equivalent, in each case
as defined in such regulations) of not less than $250,000,000 or the Dollar
Equivalent thereof, in each case maturing within one year after issuance or
acceptance thereof; and (v) shares of any money market mutual or similar funds
that (A) has substantially all of its assets invested continuously in the types
of investments referred to in clauses (i) through (iv) above, (B) has net assets
of not
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less than $500,000,000 or the Dollar Equivalent thereof and (C) has the highest
rating obtainable from either S&P or ▇▇▇▇▇'▇.
"Certificate of Exemption" has the meaning ascribed to it in Section
1.11(c).
"Change of Control" means (i) prior to a Qualified Public Offering,
any event, transaction or occurrence as a result of which (a) Permitted Holders
cease to own and control all of the economic and voting rights associated with
ownership of more than fifty percent (50%) of the outstanding Stock of Holdings
on a fully-diluted basis (excluding from "Stock" for purposes of this
calculation the preferred stock issued to Seller on the Closing Date (and any
dividends accruing thereon)) or (b) Holdings ceases to own and control (directly
or indirectly) all of the economic and voting rights associated with all of the
outstanding Stock of UAP and Canadian Borrower or (ii) after a Qualified Public
Offering, any event, transaction or occurrence as a result of which (a) any
Person or "group" (within the meaning of Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, as in effect on the Closing Date), other than
Permitted Holders, shall have acquired beneficial ownership of 35% or more on a
fully-diluted basis of the economic and/or voting rights associated with
ownership of Holdings' Stock and Permitted Holders shall own less than such
Person or "group" on a fully-diluted basis of the economic and voting rights
associated with ownership of Holdings' Stock (excluding from "Stock" for
purposes of this calculation the preferred stock issued to Seller on the Closing
Date (and any dividends accruing thereon)) or (b) Holdings ceases to own and
control (directly or indirectly) all of the economic and voting rights
associated with all of the outstanding Stock of UAP and Canadian Borrower.
"Charges" means all federal, state, provincial, county, city,
municipal, local, foreign or other governmental taxes (including premiums and
other amounts owed to the PBGC at the time due and payable), levies,
assessments, charges, liens, claims or encumbrances upon or relating to (a) the
Collateral, (b) the Obligations, (c) the employees, payroll, income or gross
receipts of any Credit Party, (d) any Credit Party's ownership or use of any
properties or other assets, or (e) any other aspect of any Credit Party's
business.
"Chattel Paper" means any "chattel paper," as such term is defined in
the Code or PPSA, including electronic chattel paper, now owned or hereafter
acquired by any Credit Party, wherever located.
"Closing Checklist" means the schedule, including all appendices,
exhibits or schedules thereto, listing certain documents and information to be
delivered in connection with the Agreement, the other Loan Documents and the
transactions contemplated thereunder, substantially in the form attached hereto
as Annex C.
"Closing Date" means November 24, 2003.
"Code" means the Uniform Commercial Code as the same may, from time to
time, be enacted and in effect in the State of New York; provided, that to the
extent that the Code is used to define any term herein or in any Loan Document
and such term is defined differently
A-7
in different Articles or Divisions of the Code, the definition of such term
contained in Article or Division 9 shall govern; provided further, that in the
event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of, or remedies with respect to, Agent's,
Canadian Agent's or any Lender's Lien on any Collateral is governed by the
Uniform Commercial Code or foreign personal property security laws as enacted
and in effect in a jurisdiction other than the State of New York, the term
"Code" shall mean the Uniform Commercial Code or such foreign personal property
security laws as enacted and in effect in such other jurisdiction solely for
purposes of the provisions thereof relating to such attachment, perfection,
priority or remedies and for purposes of definitions related to such provisions;
provided further, that if such foreign personal property security laws do not
contain a definition that is used in another Loan Document, the definition that
is used in such other Loan Document shall have the meaning given to it in the
Code as though the references to the words "or such foreign personal property
security laws" in the second proviso of this definition do not exist.
"Collateral" means the property covered by the Security Agreement, the
Mortgages and the other Collateral Documents and any other property, real or
personal, tangible or intangible, now existing or hereafter acquired, that may
at any time be or become subject to a security interest or Lien in favor of
Agent, on behalf of itself and Lenders, to secure the Obligations or any portion
thereof.
"Collateral Audit" has the meaning ascribed to it in Section 2.3.
"Collateral Documents" means the Security Agreement, the Canadian
Security Agreement, the Pledge Agreements, the Guaranties, the Mortgages, the
Patent Security Agreements, the Trademark Security Agreements, the Copyright
Security Agreements and all similar agreements entered into guaranteeing payment
of, or granting a Lien upon property as security for payment of, the Obligations
or any portion thereof.
"Commitment Termination Date" means the earliest of (a) November 24,
2008, (b) the date of termination of Lenders' obligations to make Advances and
to incur Letter of Credit Obligations or permit existing Loans to remain
outstanding pursuant to Section 6.3, and (c) the date of (i) payment in full by
Borrowers of the Loans, (ii) the cancellation and return (or stand-by guarantee)
of all Letters of Credit or the cash collateralization of all Letter of Credit
Obligations pursuant to Section 1.5(b), and (iii) the permanent reduction of the
Commitments to zero dollars ($0).
"Commitments" means (a) as to any Lender, such Lender's Revolving Loan
Commitment as set forth on Annex B to the Agreement or in the most recent
Assignment Agreement executed by such Lender and (b) as to all Lenders, the
aggregate of all Lenders' Revolving Loan Commitments, which aggregate commitment
shall be Five Hundred Million and No/100 Dollars ($500,000,000) on the Closing
Date, as such Commitments may be reduced, amortized or adjusted from time to
time in accordance with the Agreement.
"Compliance Certificate" has the meaning ascribed to it in Section
4.3(k).
"Consolidated Net Income" means, with respect to any specified Person
for
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any period, the aggregate of the Net Income of such Person and its Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP;
provided that: (1) the Net Income (if positive) of any Person that is accounted
for by the equity method of accounting will be included only to the extent of
the amount of dividends or similar distributions paid in cash (or to the extent
converted into cash) to the specified Person or a Wholly-Owned Subsidiary of the
Person; (2) (a) the Net Income (but not loss) of any Subsidiary of the specified
Person will, in each case, be excluded to the extent that the declaration or
payment of dividends or similar distributions by that Subsidiary of that Net
Income is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Subsidiary or its stockholders, unless such restrictions with respect to the
declaration or payment of dividends or similar distributions have been legally
waived; (3) the cumulative effect of a change in accounting principles will be
excluded; (4) any non-cash impairment charges resulting from the application of
Statement of Financial Accounting Standards No. 142 shall be excluded; (5) any
non-cash compensation expense realized from grants of stock appreciation or
similar rights, stock options or other rights to officers, directors and
employees of such Person or any of its Subsidiaries shall be excluded; and (6)
accruals and reserves that are established within twelve months after the
Closing Date and that are so required to be established in accordance with GAAP
shall be excluded.
"Contingent Obligation" means, as applied to any Person, any direct or
indirect liability of that Person: (i) with respect to Guaranteed Indebtedness
and with respect to any Indebtedness, lease, dividend or other obligation of
another Person if the purpose or intent of the Person incurring such liability,
or the effect thereof, is to provide assurance to the obligee of such liability
that such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto; (ii) with
respect to any letter of credit issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement of drawings; (iii) under
any foreign exchange contract, currency swap agreement, interest rate swap
agreement or other similar agreement or arrangement designed to alter the risks
of that Person arising from fluctuations in currency values or interest rates,
(iv) any agreement, contract or transaction involving commodity options or
future contracts, (v) to make take-or-pay or similar payments if required
regardless of nonperformance by any other party or parties to an agreement, or
(vi) pursuant to any agreement to purchase, repurchase or otherwise acquire any
obligation or any property constituting security therefor, to provide funds for
the payment or discharge of such obligation or to maintain the solvency,
financial condition or any balance sheet item or level of income of another. The
amount of any Contingent Obligation shall be equal to the amount of the
obligation so guaranteed or otherwise supported or, if not a fixed and
determined amount, the maximum amount so guaranteed.
"Contractual Obligations" means, as applied to any Person, any
indenture, mortgage, deed of trust, contract, undertaking, agreement or other
instrument to which that Person is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject including
the Related Transactions Documents.
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"Control Agreement" means an agreement between Agent and (i) the
issuer of uncertificated securities with respect to uncertificated securities in
the name of any Credit Party, (ii) a securities intermediary with respect to
securities, whether certificated or uncertificated, securities entitlements and
other financial assets held in a securities account in the name of any Credit
Party, (iii) a futures commission merchant or clearing house, as applicable,
with respect to commodity accounts and commodity contracts held by any Credit
Party, whereby, among other things, the issuer, securities intermediary or
futures commission merchant limits any security interest in the applicable
financial assets in a manner reasonably satisfactory to Agent, acknowledges the
Lien of Agent, on behalf of itself and Lenders, on such financial assets, and
agrees to follow the instructions or entitlement orders of Agent without further
consent by the affected Credit Party.
"Copyright License" means any and all rights nor owned or hereafter
acquired by any Credit Party under any written agreement granting any right to
use any Copyright or Copyright registration.
"Copyright Security Agreements" means the Copyright Security
Agreements made in favor of Agent, on behalf of itself and Lenders or Canadian
Agent on behalf of itself and Lenders, by each applicable Credit Party.
"Copyrights" means all of the following now owned or hereafter adopted
or acquired by any Credit Party: (a) all copyrights and General Intangibles of
like nature (whether registered or unregistered), all registrations and
recordings thereof, and all applications in connection therewith, including all
registrations, recordings and applications in the United States Copyright Office
or in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof; and (b) all
reissues, extensions or renewals thereof.
"Credit Parties" means Holdings, Borrowers, and each Wholly-Owned
Domestic Subsidiary (i) which executes a Guaranty or this Agreement as a
Borrower, (ii) which grants a Lien on all or substantially all of its assets to
secure the Obligations and (iii) all of the Stock of which has been pledged to
secure all or part of the Obligations.
"Customer Deposit Reserve" for any Borrower means a reserve against
Eligible Inventory in an amount equal to the product of (A) the positive excess,
if any, of (w) deposits by customers of such Borrower and its Wholly-Owned
Domestic Subsidiaries (other than Inactive Subsidiaries) for the future purchase
of Inventory over (x) ineligible Accounts of such Borrower and its Wholly-Owned
Domestic Subsidiaries (other than Inactive Subsidiaries) under Section 1.7(j)
with respect to such customers for such deposits (to the extent actually
determined and deducted from Eligible Accounts of such Borrower and its
Wholly-Owned Domestic Subsidiaries (other than Inactive Subsidiaries)) and (B)
the percentage equal to (y) 100% minus (z) the Gross Margin for the Borrowers
and their Subsidiaries for the most recent trailing twelve-month period for
which monthly financial statements are available on or prior to the date of
determination.
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"Default" means any event that, with the passage of time or notice or
both, would, unless cured or waived, become an Event of Default.
"Default Rate" has the meaning ascribed to it in Section 1.2(d).
"Design" means the following now owned or hereafter acquired by any
Credit Party: (a) all industrial designs, design patents, other designs and
intangibles of like nature (whether registered or unregistered) now owned or
existing or hereafter adopted or acquired, all registrations and recordings
thereof and all applications in connection therewith, including all
registrations, recordings and applications in the Canadian Industrial Designs
Office or any similar office in any country and all records thereof and (b) all
reissues, extensions or renewals thereof.
"Design License" means rights under any written agreement now owned or
hereafter acquired by any Credit Party granting any right to use any Design.
"Disclosure Schedules" means the Schedules prepared by Borrowers and
denominated as Schedules 2.1 through A in the index to the Agreement.
"Documents" means any "document," as such term is defined in the Code,
including electronic documents, now owned or hereafter acquired by any Credit
Party, wherever located.
"Dollar Equivalent" means the amount of Dollars as of any date of
determination into which Canadian Dollars shall be converted in accordance with
Section 1.13(a).
"Dollars" or "$" means lawful currency of the United States of
America.
"Domestic Subsidiary" means, (i) with respect to U.S. Borrower or a
Domestic Subsidiary of U.S. Borrower, any direct Subsidiary of U.S. Borrower or
of a Domestic Subsidiary of U.S. Borrower, that, in either case, is incorporated
(or otherwise formed) under the laws of the United States of America, any State
thereof or the District of Columbia and (ii) with respect to Canadian Borrower
or a Domestic Subsidiary of Canadian Borrower, any direct Subsidiary of Canadian
Borrower or of a Domestic Subsidiary of Canadian Borrower that, in either case,
is incorporated (or otherwise formed) under the laws of Canada or any province
or territory of Canada.
"EBITDA" means, with respect to any Person for any fiscal period,
without duplication, an amount equal to (a) net income of such Person and its
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP, minus (without duplication) (b) the sum of (i) income tax credits,
(ii) interest income, (iii) gain from extraordinary items for such period (net
of losses from extraordinary items), (iv) any aggregate net gain during such
period arising from the sale, exchange or other disposition of capital assets by
such Person (including any fixed assets, whether tangible or intangible, all
inventory sold in conjunction with the disposition of fixed assets and all
securities), (v) any other non-cash gains and (vi) expenditures pursuant to the
last sentence of Section 4.4 of the Credit Agreement
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applicable to, but not included on, the Pro Forma, including expenditures made
in connection with the Related Transactions and payment of liabilities on the
Closing Date, plus (c) the sum of (i) any provision for taxes based on income or
profits of such Person, (ii) Interest Expense, (iii) depreciation and
amortization for such period, (iv) amortized debt discount for such period, (v)
any aggregate net loss during such period arising from the sale, exchange or
other disposition of capital assets of such Person (including any fixed assets,
whether tangible or intangible, all Inventory sold in conjunction with the
disposition of fixed assets and all securities), (vi) any costs (including,
without limitation, severance costs) incurred in the transition of Borrowers and
their Subsidiaries from Subsidiaries of ConAgra Foods, Inc. to independent
operating companies, (vii) any accruals, reserves, and income adjustments
required under GAAP during the first twelve months following the Acquisition,
(viii) expenses and adjustments related to the Related Transactions, provided
that such expenses were included in the Pro Forma, or disclosed in any notes
thereto, (ix) any rent accrued during such period under synthetic leases, (x)
losses from extraordinary items for such period (net of gains from extraordinary
items), in each case to the extent included in the calculation of consolidated
net income of such Person for such period in accordance with GAAP, and (xi) any
other non-cash losses (excluding non-cash losses resulting from write-downs,
write-offs or reserves taken with respect to Accounts or Inventory). For
purposes of this definition, the following items shall be excluded (without
duplication) in determining consolidated net income of a Person: (1) the income
(or deficit) of any other Person accrued prior to the date it became a
Subsidiary of, or was merged or consolidated into, such Person or any of such
Person's Subsidiaries; (2) the income (or deficit) of any other Person (other
than a Subsidiary) in which such Person has an ownership interest or that is
accounted for on the equity method of accounting, except to the extent any such
income has actually been received by such Person in the form of cash dividends
or distributions; (3) the undistributed earnings of any Subsidiary of such
Person to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms of
any contractual obligation or requirement of law applicable to such Subsidiary;
(4) any restoration to income of any contingency reserve, except to the extent
that provision for such reserve was made out of income accrued during such
period; (5) any write-up of any asset; (6) any net gain from the collection of
the proceeds of life insurance policies; (7) any net gain arising from the
acquisition of any securities, or the extinguishment, under GAAP, of any
Indebtedness, of such Person; (8) the amount of any deduction to consolidated
net income as the result of any grant to any members of the management of such
Person of any Stock; (9) any non-cash impairment changes resulting from the
application of Statement of Financial Accounting Standards No. 142; (10) any
deferred credit representing the excess of equity in any Subsidiary of such
Person at the date of acquisition of such Subsidiary over the cost to such
Person of the investment in such Subsidiary and (11) non-recurring gains,
losses, income or expenses, subject to Item 10(e) of Regulation S-K, adopted by
the Securities and Exchange Commission and provided that with respect to any
nonrecurring loss or expense, the Borrowers shall deliver to Agent officers'
certificates specifying and quantifying each item thereof. Notwithstanding any
provision of this definition to the contrary, normal accruals of Supplier
Rebates shall be included in EBITDA. In addition, EBITDA will be calculated
giving effect to clauses (1)-(5) of the last sentence of the definition of Fixed
Charge Coverage Ratio.
"Eligible Accounts" has the meaning ascribed to it in Section 1.7.
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"Eligible Extended Accounts" means Extended Accounts that otherwise
meet all criteria to be Eligible Accounts.
"Eligible Inventory" has the meaning ascribed to it in Section 1.8.
"Environmental Laws" means all applicable federal, state, provincial,
local and foreign laws, statutes, ordinances, codes, rules, standards,
orders-in-council and regulations, now or hereafter in effect, and any
applicable judicial or administrative interpretation thereof, including any
applicable judicial or administrative order, consent decree, order or judgment,
imposing liability or standards of conduct for or relating to the regulation and
protection of human health, safety, the environment and natural resources
(including ambient air, surface water, groundwater, wetlands, land surface or
subsurface strata, wildlife, aquatic species and vegetation). Environmental Laws
include, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. Sections 9601 et seq.)
("CERCLA"); the Hazardous Materials Transportation Authorization Act of 1994 (49
U.S.C. Sections 5101 et seq.); the Federal Insecticide, Fungicide, and
Rodenticide Act (7 U.S.C. Sections 136 et seq.)("FIFRA"); the Solid Waste
Disposal Act (42 U.S.C. Sections 6901 et seq.); the Toxic Substance Control Act
(15 U.S.C. Sections 2601 et seq.); the Food Quality Protection Act of 1996 (7
U.S.C. Sections 136 et seq.); the Resource Conservation and Recovery Act of 1976
(42 U.S.C. Section 6901 et seq.); the Oil Pollution Act of 1990 (33 U.S.C.
Sections 2701 et seq.); the Clean Air Act (42 U.S.C. Sections 7401 et seq.); the
Federal Water Pollution Control Act (33 U.S.C. Sections 1251 et seq.); the
Occupational Safety and Health Act (29 U.S.C. Sections 651 et seq.); the Safe
Drinking Water Act (42 U.S.C. Sections 300(f) et seq.); the Pest Control Product
Act (Canada); the Fertilizers Act (Canada); the Seeds Act (Canada); the
Pesticides Act (Ontario); the Environmental Protection Act (Ontario); the
Ontario Water Resources Act, and any and all regulations promulgated thereunder
and all analogous state, provincial, local and foreign counterparts or
equivalents and any transfer of ownership notification or approval statutes.
"Environmental Liabilities" means, with respect to any Person, all
liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws, Environmental Permits, or in connection
with any Release or threatened Release or presence of a Hazardous Material
whether on, at, in, under, from or about or in the vicinity of any real or
personal property.
"Environmental Permits" means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.
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"Equipment" means all "equipment," as such term is defined in the Code
or the PPSA, as applicable, now owned or hereafter acquired by any Credit Party,
wherever located and, in any event, including all such Credit Party's machinery
and equipment, including processing equipment, conveyors, machine tools, data
processing and computer equipment, including embedded software and peripheral
equipment and all engineering, processing and manufacturing equipment, office
machinery, furniture, materials handling equipment, tools, attachments,
accessories, automotive equipment, trailers, trucks, forklifts, molds, dies,
stamps, motor vehicles, rolling stock and other equipment of every kind and
nature, trade fixtures and fixtures not forming a part of real property,
together with all additions and accessions thereto, replacements therefor, all
parts therefor, all substitutes for any of the foregoing, fuel therefor, and all
manuals, drawings, instructions, warranties and rights with respect thereto, and
all products and proceeds thereof and condemnation awards and insurance proceeds
with respect thereto.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any regulations promulgated thereunder.
"ERISA Affiliate" means, with respect to any Credit Party, any trade
or business (whether or not incorporated) that, together with such Credit Party,
are treated as a single employer within the meaning of Sections 414(b), (c), (m)
or (o) of the IRC.
"ERISA Event" means, with respect to any Credit Party or any ERISA
Affiliate, (a) any event described in Section 4043(c) of ERISA with respect to a
Title IV Plan (other than an event for which notice is waived under applicable
regulations); (b) the withdrawal of any Credit Party or ERISA Affiliate from a
Title IV Plan subject to Section 4063 of ERISA during a plan year in which it
was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (c) the
filing of a notice of intent to terminate a Title IV Plan or the treatment of a
plan amendment as a termination under Section 4041 of ERISA; (d) the institution
of proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC;
(e) the failure by any Credit Party or ERISA Affiliate to make when due required
contributions to a Multiemployer Plan or Title IV Plan unless such failure is
cured within 30 days; (f) any other event or condition that might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Title IV Plan or
Multiemployer Plan or for the imposition of liability under Section 4069 or
4212(c) of ERISA; (g) the termination of a Multiemployer Plan under Section
4041A of ERISA or the reorganization or insolvency of a Multiemployer Plan under
Section 4241 or 4245 of ERISA; (h) the loss of a Qualified Plan's qualification
or tax exempt status; or (i) the termination of a Plan described in Section 4064
of ERISA.
"ESOP" means a Plan that is intended to satisfy the requirements of
Section 4975(e)(7) of the IRC.
"Event of Default" has the meaning ascribed to it in Section 6.1.
"Excluded Taxes" has the meaning ascribed to it in Section 1.11.
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"Existing Joint Ventures" means Albamoral Ag, LLC, a Delaware limited
liability company and UAP Timberland, L.L.C., a Delaware limited liability
company.
"Extended Account" means any Account the payment terms of which
provide that payment is not due within 60 days after the original date of the
invoice with respect to such Account.
"Fair Labor Standards Act" means the Fair Labor Standards Act, 29
U.S.C. Section 201 et seq.
"Federal Funds Rate" means, for any day, a floating rate equal to the
weighted average of the rates on overnight federal funds transactions among
members of the Federal Reserve System, as determined by Agent in its sole
discretion, which determination shall be final, binding and conclusive (absent
manifest error).
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System.
"Fees" means any and all fees payable to Agents or any Lender pursuant
to the Agreement or any of the other Loan Documents.
"Financial Statements" means the consolidated and consolidating income
statements, statements of cash flows and balance sheets of Holdings, Borrowers
and their Subsidiaries delivered in accordance with Section 4.3.
"Fiscal Month" means any of the monthly accounting periods of
Borrowers.
"Fiscal Quarter" means any of the quarterly accounting periods of
Borrowers, ending on each three-month anniversary of the end of a Fiscal Year.
"Fiscal Year" means any of the annual accounting periods of Borrowers
ending on a date set forth in the table below or on such other date as Borrowers
may select in accordance with Section 3.11.
Fiscal Year Last Day of Fiscal Year
----------- -----------------------
2004 February 22, 2004
2005 February 27, 2005
2006 February 26, 2006
2007 February 25, 2007
2008 February 24, 2008
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Fiscal Year Last Day of Fiscal Year
----------- -----------------------
2009 February 22, 2009
"Fixed Charges" means, with respect to any Person for any fiscal
period, (a) the aggregate of all Interest Expense paid or payable in cash during
such period, plus (b) scheduled payments of principal with respect to all
Indebtedness during such period, plus (c) any management fees paid to Apollo
pursuant to the Management Consulting Agreement during such period.
"Fixed Charge Coverage Ratio" means, with respect to any Person for
any fiscal period, the ratio of (i) EBITDA, plus to the extent deducted in the
calculation of EBITDA for such period, any management fees paid to Apollo
pursuant to the Management Consulting Agreement, minus income and franchise
taxes paid in cash during such period, minus the unfinanced portion of Capital
Expenditures made during such period to (ii) Fixed Charges.
In the event that the specified Person or any of its Subsidiaries
incurs, assumes, guarantees, repays, repurchases, redeems, defeases or
otherwise discharges any Indebtedness (other than ordinary working capital
borrowings) or issues, repurchases or redeems preferred stock subsequent to
the commencement of the period for which the Fixed Charge Coverage Ratio is
being calculated and on or prior to the date on which the event for which
the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio will be
calculated giving pro forma effect to such incurrence, assumption,
guarantee, repayment, repurchase, redemption, defeasance or other discharge
of Indebtedness, or such issuance, repurchase or redemption of preferred
stock, and the use of the proceeds therefrom, as if the same had occurred
at the beginning of the applicable reference period.
In addition, for purposes of calculating the Fixed Charge Coverage
Ratio and EBITDA:
(1) acquisitions that have been made by the specified Person or any of its
Subsidiaries, including through mergers or consolidations, or any
Person or any of its Subsidiaries acquired by the specified Person or
any of its Subsidiaries, and including any related financing
transactions and including increases in ownership of Subsidiaries,
during the reference period or subsequent to such reference period and
on or prior to the Calculation Date will be given pro forma effect
(including any pro forma expense and cost reductions, adjustments and
other operating improvements or synergies both achieved by such Person
during such period as a result of the acquisition and to be achieved
by such Person as a result of the acquisition, all as determined in
good faith by a responsible financial or accounting officer, to the
extent that Borrower Representative
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delivers to Agent (a) a certificate of such officer setting forth such
expense and cost reductions, adjustments and other operating
improvements or synergies and (b) information and calculations
supporting in reasonable detail such estimated expense and cost
reductions, adjustments and other operating improvements or synergies)
as if they had occurred on the first day of the reference period;
(2) the EBITDA attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses (and ownership
interests therein) disposed of prior to the Calculation Date, will be
excluded;
(3) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses (and
ownership interests therein) disposed of prior to the Calculation
Date, will be excluded, but only to the extent that the obligations
giving rise to such Fixed Charges will not be obligations of the
specified Person or any of its Subsidiaries following the Calculation
Date;
(4) any Person that is a Subsidiary on the Calculation Date will be deemed
to have been a Subsidiary at all times during such reference period;
and
(5) any Person that is not a Subsidiary on the Calculation Date will be
deemed not to have been a Subsidiary at any time during such reference
period.
"Fixtures" means all "fixtures" as such term is defined in the Code
and all fixtures, facilities and equipment howsoever affixed or attached to real
property, now owned or hereafter acquired by any Credit Party.
"Fronting Fee" has the meaning ascribed to it in Section 1.3(f).
"Funded Debt" means, with respect to any Person, without duplication,
all Indebtedness for borrowed money evidenced by notes, bonds, debentures, or
similar evidences of Indebtedness and that by its terms matures more than one
year from, or is directly or indirectly renewable or extendible at such Person's
option under a revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of more than one year from the date of
creation thereof, and specifically including Capital Lease Obligations, current
maturities of long-term debt, revolving credit and short-term debt extendible
beyond one year at the option of the debtor, and also including, in the case of
Borrowers, the Obligations (including Letter of Credit Obligations).
"Funding Date" has the meaning ascribed to it in Section 7.2.
"GAAP" means generally accepted accounting principles in the United
States of America, consistently applied.
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"GE Capital" has the meaning ascribed to it in the Preamble.
"GE Canada" has the meaning ascribed to it in the Preamble.
"GE Capital Fee Letter" has the meaning ascribed to it in Section
1.3(a).
"General Intangibles" means "general intangibles," as such term is
defined in the Code and "intangibles" as defined in the PPSA, now owned or
hereafter acquired by any Credit Party, including all right, title and interest
that such Credit Party may now or hereafter have in or under any Contractual
Obligation, all payment intangibles, customer lists, Licenses, Copyrights,
Trademarks, Patents, and all applications therefor and reissues, extensions or
renewals thereof, rights in Intellectual Property, interests in partnerships,
joint ventures and other business associations, licenses, permits, copyrights,
trade secrets, proprietary or confidential information, inventions (whether or
not patented or patentable), technical information, procedures, designs,
knowledge, know-how, software, data bases, data, skill, expertise, experience,
processes, models, drawings, materials and records, goodwill (including the
goodwill associated with any Trademark or Trademark License), all rights and
claims in or under insurance policies (including insurance for fire, damage,
loss and casualty, whether covering personal property, real property, tangible
rights or intangible rights, all liability, life, key man and business
interruption insurance, and all unearned premiums), uncertificated securities,
chooses in action, deposit, checking and other bank accounts, rights to receive
tax refunds and other payments, rights to receive dividends, distributions,
cash, Instruments and other property in respect of or in exchange for pledged
Stock and Investment Property, rights of indemnification, all books and records,
correspondence, credit files, invoices and other papers, including all tapes,
cards, computer runs and other papers and documents in the possession or under
the control of such Credit Party or any computer bureau or service company from
time to time acting for such Credit Party.
"Goods" means any "goods," as such term is defined in the Code or
PPSA, as applicable, now owned or hereafter acquired by any Credit Party,
wherever located, including embedded software to the extent included in "goods"
as defined in the Code, manufactured homes, standing timber that is cut and
removed for sale and unborn young of animals.
"Governmental Authority" means any nation or government, any state,
province or other political subdivision thereof, and any agency, department or
other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Gross Margin" means, as to the Borrowers and their Subsidiaries, for
any period, gross profit as a percentage of net sales for such period.
"Guaranteed Indebtedness" means, as to any Person, any obligation of
such Person guaranteeing, providing comfort or otherwise supporting any
Indebtedness, lease, dividend, or other obligation ("primary obligation") of any
other Person (the "primary obligor") in any manner, including any obligation or
arrangement of such Person to (a) purchase or repurchase any such primary
obligation, (b) advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of
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the primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet condition of the primary obligor, (c) purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation, (d) protect the beneficiary of such arrangement from
loss (other than product warranties given in the ordinary course of business) or
(e) indemnify the owner of such primary obligation against loss in respect
thereof. The amount of any Guaranteed Indebtedness at any time shall be deemed
to be an amount equal to the lesser at such time of (x) the stated or
determinable amount of the primary obligation in respect of which such
Guaranteed Indebtedness is incurred and (y) the maximum amount for which such
Person may be liable pursuant to the terms of the instrument embodying such
Guaranteed Indebtedness, or, if not stated or determinable, the maximum
reasonably anticipated liability (assuming full performance) in respect thereof.
"Guaranties" means, collectively, the Holdings Guaranty, the
Subsidiary Guaranty, the Access Guaranty and any other guaranty executed by any
Guarantor in favor of Agent and Lenders in respect of the Obligations.
"Guarantor Payment" has the meaning ascribed to it on Section 10.7.
"Guarantors" means Holdings, each direct or indirect Subsidiary of
Holdings that is not a Borrower, and each other Person, if any, that executes a
guaranty or other similar agreement in favor of Agent (or Canadian Agent), for
itself and the ratable benefit of Lenders, in connection with the transactions
contemplated by the Agreement and the other Loan Documents.
"Hazardous Material" means any substance, material or waste that is
regulated by, or forms the basis of liability now or hereafter under, any
Environmental Laws, including any material or substance that is (a) defined as a
"solid waste," "hazardous waste," "hazardous material," "hazardous substance,"
"dangerous goods," "extremely hazardous waste," "restricted hazardous waste,"
"pollutant," "contaminant," "hazardous constituent," "special waste," "toxic
substance" or other similar term or phrase under any Environmental Laws, or (b)
petroleum or any fraction or by-product thereof, asbestos, polychlorinated
biphenyls (PCB's), or any radioactive substance.
"Holdings" has the meaning ascribed thereto in the recitals to the
Agreement.
"Holdings Guaranty" means the guaranty of even date herewith executed
by Holdings in favor of Agent, on behalf of itself and Lenders.
"Holdings Pledge Agreement" means the Pledge Agreement of even date
herewith executed by Holdings in favor of Agent, on behalf of itself and
Lenders, pledging the Stock of UAP.
"Inactive Subsidiaries" means UAP 23, Inc., a Delaware corporation,
CSK Enterprises, Inc., a Delaware corporation, GAC 26, Inc., a Nebraska
corporation, UAP 27, Inc., a Delaware corporation, Ravan Products, Inc., a
Georgia corporation, S.E. Enterprises, Inc., a Delaware corporation, UAP
Receivables Corporation, a Delaware corporation, UAP 22, Inc., a
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Texas corporation, UAPLP, Inc., a Delaware corporation, United Agri Products
Financial Services, Inc., a Colorado corporation and YVC, Inc., a Montana
corporation.
"In-Season Overadvance" has the meaning ascribed to it in Section
1.1(a)(iv).
"In-Season Overadvance Amount" means the sum of In-Season Overadvances
outstanding to U.S. Borrower; provided that the aggregate sum of In-Season
Overadvances outstanding to U.S. Borrower shall not at any time exceed the
Maximum In-Season Overadvance.
"Indebtedness" means, with respect to any Person, without duplication
(a) all indebtedness of such Person for borrowed money or for the deferred
purchase price of property payment for which is deferred six (6) months or more,
but excluding obligations to trade creditors incurred in the ordinary course of
business that are unsecured and not overdue by more than six (6) months unless
being contested in good faith, (b) all reimbursement and other obligations with
respect to letters of credit, bankers' acceptances and surety bonds, whether or
not matured, (c) all obligations evidenced by notes, bonds, debentures or
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all Capital Lease Obligations and the present
value (discounted at the Index Rate as in effect on the Closing Date) of future
rental payments under all synthetic leases, (f) all obligations of such Person
under commodity purchase or option agreements or other commodity price hedging
arrangements, in each case whether contingent or matured, (g) all obligations of
such Person under any foreign exchange contract, currency swap agreement,
interest rate swap, cap or collar agreement or other similar agreement or
arrangement designed to alter the risks of that Person arising from fluctuations
in currency values or interest rates, in each case whether contingent or
matured, (h) all Indebtedness referred to above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon or in property or other assets (including accounts
and contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness, (i) "earnouts"
and similar payment obligations, and (j) the Obligations. Notwithstanding the
foregoing, however, Indebtedness shall not include (i) any obligations under the
Acquisition Agreement or any agreement, instrument or other document attached
thereto as an exhibit or schedule (including, without limitation, the Transition
Services Agreements, the Letter Agreement regarding Apollo repurchase
obligations, the Letter Agreement regarding ConAgra's limited preemptive rights,
the Indemnification Agreement, Fertilizer Supply Agreement, International Supply
Agreement, Buyer Release, and Seller Release) to pay Supplier Rebates or
estimated or final purchase price adjustments to ConAgra Foods, Inc. or any of
its Affiliates, (ii) advances to U.S. Borrower, Canadian Borrower or any of
their respective Subsidiaries by their respective customers in the ordinary
course of business or (iii) competitive allowances given by U.S. Borrower,
Canadian Borrower or any of their respective Subsidiaries to their respective
customers in the ordinary course of business.
"Indemnitees" has the meaning ascribed to it in Section 9.1.
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"Index Rate" means, for any day, a floating rate equal to the higher
of (i) the rate publicly quoted from time to time by The Wall Street Journal as
the "base rate on corporate loans posted by at least 75% of the nation's 30
largest banks" (or, if The Wall Street Journal ceases quoting a base rate of the
type described, the highest per annum rate of interest published by the Federal
Reserve Board in Federal Reserve statistical release H.15 (519) entitled
"Selected Interest Rates" as the Bank prime loan rate or its equivalent), and
(ii) the Federal Funds Rate plus 50 basis points per annum. Each change in any
interest rate provided for in the Agreement based upon the Index Rate shall take
effect at the time of such change in the Index Rate.
"Index Rate Loan" means a Loan or portion thereof bearing interest by
reference to the Index Rate.
"Insolvency Laws" means any of the Bankruptcy Code, the Bankruptcy and
Insolvency Act (Canada), and the Companies Creditors' Arrangement Act (Canada),
each as now and hereafter in effect, any successors to such statutes and any
other applicable insolvency or other similar law of any jurisdiction including,
without limitation, any law of any jurisdiction permitting a debtor to obtain a
stay or a compromise of the claims of its creditors against it.
"Instruments" means all "instruments," as such term is defined in the
Code or PPSA, as applicable, now owned or hereafter acquired by any Credit
Party, wherever located, and, in any event, including all certificated
securities, all certificates of deposit, and all promissory notes and other
evidences of indebtedness, other than instruments that constitute, or are a part
of a group of writings that constitute, Chattel Paper.
"Intellectual Property" means any and all Licenses, Patents, Designs,
Copyrights, Trademarks, and the goodwill associated with such Trademarks, trade
secrets and customer lists.
"Intercompany Notes" has the meaning ascribed to it in Section 3.1.
"Interest Expense" means, with respect to any Person for any fiscal
period, interest expense (whether cash or non-cash) deducted in the
determination of Consolidated Net Income, including interest expense with
respect to any Funded Debt of such Person and interest expense for the relevant
period that has been capitalized on the balance sheet of such Person, less the
sum of (a) amortization of capitalized fees and expenses incurred with respect
to the Related Transactions included in interest expense during such period, (b)
amortization of any original discount attributable to any Funded Debt or
warrants included in interest expense during such period and (c) interest paid
in kind and included in interest expense during such period.
"Interest Payment Date" means (a) as to any Index Rate Loan, the first
Business Day of each month to occur while such Loan is outstanding, and (b) as
to any LIBOR Loan, the last day of the applicable LIBOR Period; provided that in
the case of any LIBOR Period greater than three months in duration, interest
shall be payable at three month intervals and on the last day of such LIBOR
Period; and provided further that, in addition to the foregoing, each of (x) the
date upon which all of the Commitments have been terminated and the Loans have
been paid in full and (y) the Commitment Termination Date shall be deemed to be
an "Interest Payment Date" with respect to any interest that has then accrued
under the Agreement.
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"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or similar agreement
or arrangement designed to protect Borrowers against fluctuations in interest
rates entered into between Borrowers and any third party.
"International Acquisition" means any Permitted Acquisition other than
a U.S. Acquisition or Canadian Acquisition.
"Inventory" means any "inventory," as such term is defined in the Code
or PPSA, as applicable, now owned or hereafter acquired by any Credit Party,
wherever located, including inventory, merchandise, goods and other personal
property that are held by or on behalf of any Credit Party for sale or lease or
are furnished or are to be furnished under a contract of service, or that
constitute raw materials, work in process, finished goods, returned goods,
supplies or materials of any kind, nature or description used or consumed or to
be used or consumed in such Credit Party's business or in the processing,
production, packaging, promotion, delivery or shipping of the same, including
all supplies and embedded software.
"Investment" means (i) any direct or indirect purchase or other
acquisition by Borrowers or any of their Subsidiaries of any Stock, or other
ownership interest in, any other Person, and (ii) any direct or indirect loan,
advance or capital contribution by Borrowers or any of their Subsidiaries to any
other Person, including all indebtedness and accounts receivable from that other
Person that are not current assets or did not arise from sales to that other
Person in the ordinary course of business.
"Investment Property" means all "investment property," as such term is
defined in the Code and "securities" as defined in the PPSA, now owned or
hereafter acquired by any Credit Party, wherever located, including: (i) all
securities, whether certificated or uncertificated, including stocks, bonds,
interests in limited liability companies, partnership interests, treasuries,
certificates of deposit, and mutual fund shares; (ii) all securities
entitlements of any Credit Party, including the rights of such Credit Party to
any securities account and the financial assets held by a securities
intermediary in such securities account and any free credit balance or other
money owing by any securities intermediary with respect to that account; (iii)
all securities accounts of any Credit Party; (iv) all commodity contracts of any
Credit Party; and (v) all commodity accounts held by any Credit Party.
"IRC" means the Internal Revenue Code of 1986, as amended, and all
regulations promulgated thereunder.
"IRS" means the Internal Revenue Service.
"ITA" means the Income Tax Act (Canada) as the same may from time to
time be in effect.
"Judgment Conversion Date" has the meaning ascribed to it in Section
1.14.
"Judgment Currency" has the meaning ascribed to it in Section 1.14.
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"L/C Issuer" means GE Capital or a Subsidiary thereof or a bank or
other legally authorized Person selected by or acceptable to Agent in its sole
discretion, in such Person's capacity as an issuer of Letters of Credit
hereunder.
"L/C Sublimit" has the meaning ascribed to it in Section 1.1(c)(i).
"Lenders" means GE Capital, GE Capital Canada, their respective
successors under Section 8.2(h), the other Lenders named on the signature pages
of the Agreement, their respective successors, and, if any Lender shall assign
all or any portion of the Obligations in accordance with Section 8.1, such term
shall include any such assignee of such Lender and such assignee's successors.
"Letters of Credit" means documentary or standby letters of credit
issued for the account of Borrowers by L/C Issuers, and bankers' acceptances
issued by Borrowers, for which Agent and Lenders have incurred Letter of Credit
Obligations.
"Letter of Credit Fee" has the meaning ascribed to it in Section
1.3(c).
"Letter of Credit Obligations" means all outstanding obligations
incurred by Agent and Lenders at the request of Borrower Representative, whether
direct or indirect, contingent or otherwise, due or not due, in connection with
the issuance of Letters of Credit by L/C Issuers or the purchase of a
participation as set forth in Section 1.1(c) with respect to any Letter of
Credit. The amount of such Letter of Credit Obligations shall equal the maximum
amount that may be payable by Agent and Lenders thereupon or pursuant thereto.
"Leverage Ratio" means, with respect to Borrowers and their
Subsidiaries, on a consolidated basis, the ratio of (a) Funded Debt as of any
date of determination (including the average daily closing balance of the
Revolving Loans for the twelve months preceding and including any date of
determination), to (b) the sum of EBITDA.
"LIBOR Breakage Cost" means an amount equal to the amount of any
losses, expenses, liabilities (including, without limitation, any loss
(including interest paid) and lost opportunity cost (excluding loss of
Applicable Margins) in connection with the re-employment of such funds) that any
Lender may sustain as a result of (i) any default by any Borrower in making any
borrowing of, conversion into or continuation of any LIBOR Loan following
Borrower Representative's or U.S. Borrower's, as applicable, delivery to Agent
of any LIBOR Loan request in respect thereof or (ii) any payment of a LIBOR Loan
on any day that is not the last day of the LIBOR Period applicable thereto
(regardless of the source of such prepayment and whether voluntary, by
acceleration or otherwise). For purposes of calculating amounts payable to a
Lender under Section 1.3(e), each Lender shall be deemed to have actually funded
its relevant LIBOR Loan through the purchase of a deposit bearing interest at
LIBOR in an amount equal to the amount of that LIBOR Loan and having a maturity
and repricing characteristics comparable to the relevant LIBOR Period; provided,
however, that each Lender may fund each of its LIBOR Loans in any manner it sees
fit, and the foregoing assumption shall be utilized only for the calculation of
amounts payable under Section 1.3(e).
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"LIBOR Business Day" means a Business Day on which banks in the City
of London are generally open for interbank or foreign exchange transactions.
"LIBOR Loans" means a Loan or any portion thereof bearing interest by
reference to the LIBOR Rate.
"LIBOR Period" means, with respect to any LIBOR Loan, each period
commencing on a LIBOR Business Day selected by Borrower Representative or U.S.
Borrower, as applicable, pursuant to the Agreement and ending one, two, three or
six months thereafter, as selected by Borrower Representative's or U.S.
Borrower's, as applicable, irrevocable notice to Agent as set forth in Section
1.2(e); provided that the foregoing provision relating to LIBOR Periods is
subject to the following:
(a) if any LIBOR Period would otherwise end on a day that is not a
LIBOR Business Day, such LIBOR Period shall be extended to the next
succeeding LIBOR Business Day unless the result of such extension would be
to carry such LIBOR Period into another calendar month in which event such
LIBOR Period shall end on the immediately preceding LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond the date set
forth in clause (a) of the definition of "Commitment Termination Date"
shall end two (2) LIBOR Business Days prior to such date;
(c) any LIBOR Period that begins on the last LIBOR Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such LIBOR Period) shall end on the
last LIBOR Business Day of a calendar month;
(d) Borrower Representative or U.S. Borrower, as applicable, shall
select LIBOR Periods so as not to require a payment or prepayment of any
LIBOR Loan during a LIBOR Period for such Loan; and
(e) Borrower Representative or U.S. Borrower, as applicable, shall
select LIBOR Periods so that there shall be no more than 7 separate LIBOR
Loans in existence at any one time.
"LIBOR Rate" means for each LIBOR Period, a rate of interest
determined by Agent equal to:
(a) the offered rate for deposits in United States Dollars for the
applicable LIBOR Period that appears on Telerate Page 3750 as of 11:00 a.m.
(London time), on the second full LIBOR Business Day next preceding the
first day of such LIBOR Period (unless such date is not a Business Day, in
which event the next succeeding Business Day will be used); divided by
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(b) a number equal to 1.0 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day that is two (2) LIBOR Business Days prior
to the beginning of such LIBOR Period (including basic, supplemental,
marginal and emergency reserves under any regulations of the Federal
Reserve Board or other Governmental Authority having jurisdiction with
respect thereto, as now and from time to time in effect) for Eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in Regulation
D of the Federal Reserve Board that are required to be maintained by a
member bank of the Federal Reserve System.
If such interest rates shall cease to be available from Telerate News
Service, the LIBOR Rate shall be determined from such financial reporting
service or other information as shall be available to Agent (or Canadian Agent
in the case of Canadian Revolving Loan).
"License" means any Copyright License, Patent License, Design License,
Trademark License or other license of rights or interests now held or hereafter
acquired by any Credit Party.
"Lien" means any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any lease
or title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of, or agreement to
give, any financing statement perfecting a security interest under the Code, the
PPSA or comparable law of any jurisdiction).
"Litigation" has the meaning ascribed to it in Section 4.3(i).
"Loan Account" as the meaning ascribed to it in Section 1.9.
"Loan Documents" means the Agreement, the Notes, the Collateral
Documents, the GE Capital Fee Letter and all other agreements, instruments,
documents and certificates identified in the Closing Checklist executed and
delivered to, or in favor of, Agent, Canadian Agent or any Lenders and including
all other pledges, powers of attorney, consents, assignments, contracts,
notices, and all other written matter whether heretofore, now or hereafter
executed by or on behalf of any Credit Party, or any employee of any Credit
Party, and delivered to Agent, Canadian Agent or any Lender in connection with
the Agreement or the transactions contemplated thereby. Any reference in the
Agreement or any other Loan Document to a Loan Document shall include all
appendices, exhibits or schedules thereto, and all amendments, restatements,
supplements or other modifications thereto, and shall refer to the Agreement or
such Loan Document as the same may be in effect at any and all times such
reference becomes operative.
"Loans" means the Canadian Revolving Loan, the U.S. Revolving Loan and
the Swing Line Loan.
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"Management Consulting Agreement" means that certain Management
Consulting Agreement dated as of November 21, 2003, between the Acquisition Co.
and Apollo Management V, L.P., as in existence as of the Closing Date, and as
amended, restated, supplemented, extended, renewed or otherwise modified from
time to time thereafter.
"Master Documentary Agreement" means that certain Master Agreement for
Documentary Letters of Credit Terms and Conditions dated as of the date hereof
among General Electric Capital Corporation as L/C Issuer and U.S. Borrower.
"Master Standby Agreement" means that certain Master Agreement for
Standby Letters of Credit Terms and Conditions dated as of the date hereof among
General Electric Capital Corporation as L/C Issuer and U.S. Borrower.
"Material Adverse Effect" means a material adverse effect on (a) the
financial condition of the Credit Parties, taken as a whole or (b) the
Collateral, taken as a whole.
"Maximum Amount" means, as of any date of determination, an amount
equal to the Revolving Loan Commitment of all Lenders as of that date.
"Maximum In-Season Overadvance" has the meaning ascribed to it in
Section 1.1(a)(iv).
"Maximum Lawful Rate" has the meaning ascribed to it in Section
1.2(f).
"▇▇▇▇▇'▇" means ▇▇▇▇▇'▇ Investor's Services, Inc.
"Mortgages" means each of the mortgages, deeds of trust, leasehold
mortgages, leasehold deeds of trust, collateral assignments of leases or other
real estate security documents delivered by any Credit Party to Agent on behalf
of itself and Lenders or Canadian Agent on behalf of itself and Lenders with
respect to the Real Estate.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA, and to which any Credit Party or ERISA Affiliate is
making, is obligated to make or has made or been obligated to make,
contributions on behalf of participants who are or were employed by any of them.
"Net Income" means, with respect to any specified Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however: (1) any
gain or loss, together with any related provision for taxes on such gain or
loss, realized in connection with: (a) any Asset Disposition; or (b) without
duplication, the disposition of any securities by such Person or any of its
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Subsidiaries; and (2) any extraordinary gain or loss and any nonrecurring
gains, losses, income or expenses (including, without limitation, expenses
related to the Related Transactions and any severance and transition expenses
incurred as a direct result of the transition of the Borrowers and their
Subsidiaries to independent operating companies in connection with the Related
Transactions),
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in each case together with any related provision for taxes on such items;
provided, that with respect to any such nonrecurring loss or expense, the
Borrower Representative delivers to the Agent an officer's certificate
specifying and quantifying such item.
"Net Orderly Liquidation Value" means, with respect to Inventory, the
orderly liquidation value, if any, of such Inventory (less estimated liquidation
expenses, taking into account, without duplication, the regulatory costs (if
any) of selling Inventory that includes FIFRA registered inventory that may be
sold only to licensed distributors), as determined by reference to the most
recent Appraisal thereof delivered to Agent pursuant to Section 4.3(e), which is
reasonably satisfactory to Agent.
"Net Orderly Liquidation Value Factor" means the ratio of the Net
Orderly Liquidation Value of Inventory to the book value of Inventory, expressed
as a percentage based on a comparison of the book value of Inventory to the Net
Orderly Liquidation Value thereof as the date of the Appraisal most recently
received prior to any date of determination. The Net Orderly Liquidation Value
Factor shall be determined as of the Closing Date based on the Appraisal
delivered prior to the Closing Date and shall be updated semi-annually as new
Appraisals are received.
"Non-Consenting Lender" has the meaning ascribed to it in Section
9.19(c).
"Non-Funding Lender" has the meaning ascribed to it in Section 8.5(a).
"Non-Resident Canadian Participant" has the meaning ascribed to it in
Section 1.11(d).
"Notes" means, collectively, the Revolving Notes and the Swing Line
Note.
"Notice of Canadian Revolving Loan Refunding" has the meaning ascribed
to it in Section 1.15.
"Notice of Conversion/Continuation" has the meaning ascribed to it in
Section 1.2(e).
"Notice of Revolving Credit Advance" has the meaning ascribed to it in
Section 1.1(a).
"Obligation Currency" has the meaning ascribed to it in Section 1.14.
"Obligations" means all loans, advances, debts, liabilities and
obligations, for the performance of covenants, tasks or duties or for payment of
monetary amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable), including
obligations pursuant to Letter of Credit Obligations, owing by any Credit Party
to Agent, Canadian Agent (or fonde de pouvoir, as the case may be) or any
Lender, and all covenants and duties regarding such amounts, of any kind or
nature, present or future, whether or not evidenced by any note, agreement or
other instrument, arising under the
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Agreement or any of the other Loan Documents. This term includes all principal,
interest (including all interest that accrues after the commencement of any case
or proceeding by or against any Credit Party in bankruptcy or any similar
proceeding, whether or not allowed in such case or proceeding), Fees, Charges,
expenses, attorneys' fees and any other sum chargeable to any Credit Party under
the Agreement or any of the other Loan Documents.
"Other Lender" has the meaning ascribed to it in Section 8.5(d).
"Participating Interest" means, with respect to each Lender, such
Lender's obligation to fund its Pro Rata Share of the Canadian Revolving Loan as
set forth in Section 1.15.
"Participation Fee" has the meaning ascribed to it in Section 1.3(f).
"Patent License" means rights under any written agreement now owned or
hereafter acquired by any Credit Party granting any right with respect to any
invention on which a Patent is in existence.
"Patent Security Agreements" means the Patent Security Agreements made
in favor of Agent, on behalf of itself and Lenders or Canadian Agent on behalf
of itself and Lenders, by each applicable Credit Party.
"Patents" means all of the following in which any Credit Party now
holds or hereafter acquires any interest: (a) all letters patent of the United
States or any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or of any other country,
including registrations, recordings and applications in the United States Patent
and Trademark Office or in any similar office or agency of the United States,
any State, the Canadian Patent Office or any other country, and (b) all
reissues, continuations, continuations-in-part or extensions thereof.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means a Plan described in Section 3(2) of ERISA.
"Permitted Acquisition" has the meaning ascribed to it in Section 3.6.
"Permitted Acquisition Debt" has the meaning ascribed to it in Section
3.6.
"Permitted Distributions" has the meaning ascribed to it in Section
3.5.
"Permitted Encumbrances" means the following encumbrances: (a) Liens
for taxes, assessments or governmental charges or levies not yet due and payable
or Liens for taxes, assessments or governmental charges or levies being
contested in good faith and by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP, excluding federal income
tax Liens and Liens in favor of the PBGC under ERISA; (b) Liens in respect of
property or assets of the Borrower or any of its Subsidiaries imposed by law
which
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were incurred in the ordinary course of business and which have not arisen to
secure Indebtedness for borrowed money, such as carriers', materialmen's,
warehousemen's and mechanics' Liens, statutory and common law landlord's Liens,
and other similar Liens arising in the ordinary course of business, and which
either (1) do not in the aggregate materially detract from the value of such
property or assets or materially impair the use thereof in the operation of the
business of the Borrower or any of its Subsidiaries or (2) are being contested
in good faith by appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or asset subject to such Lien;
(c) Liens created by or pursuant to this Agreement, the Collateral Documents or
the other Loan Documents; (d) Liens in existence on the Closing Date which are
listed, and the property subject thereto described, on Schedule 3.2, without
giving effect to any extensions or renewals thereof; (e) Liens arising from
judgments, decrees, awards or attachments in circumstances not constituting an
Event of Default, provided that the amount of cash and property (determined on a
fair market value basis) deposited or delivered to secure the respective
judgment or decree or subject to attachment shall not exceed $10,000,000 or the
Dollar Equivalent thereof in the aggregate at any time; (f) Liens (other than
any Lien imposed by ERISA) (1) incurred or deposits made in the ordinary course
of business in connection with general insurance maintained by the Borrower and
its Subsidiaries, (2) incurred or deposits made in the ordinary course of
business of the Borrower and its Subsidiaries in connection with workers'
compensation, unemployment insurance and other types of social security, (3) to
secure the performance by the Borrower and its Subsidiaries of tenders,
statutory obligations (other than excise taxes), surety, stay, customs and
appeal bonds, statutory bonds, bids, leases, government contracts, trade
contracts, performance and return of money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money) to the extent
incurred in the ordinary course of business, (4) to secure the performance by
the Borrower and its Subsidiaries of leases of Real Property, to the extent
incurred or made in the ordinary course of business consistent with past
practices, and (5) other deposits not to exceed $10,000,000 in the aggregate;
(g) licenses, sublicenses, leases or subleases granted to third Persons in the
ordinary course of business not interfering in any material respect with the
business of the Borrower or any of its Subsidiaries; (h) easements,
rights-of-way, restrictions, minor defects or irregularities in title,
encroachments and other similar charges or encumbrances, in each case not
securing Indebtedness and not interfering in any material respect with the
ordinary conduct of the business of the Borrower or any of its Subsidiaries; (i)
Liens arising from precautionary UCC financing statements regarding operating
leases; (j) Liens created pursuant to or in connection with leases or Capital
Leases permitted pursuant to this Agreement, provided that (1) such Liens only
serve to secure the payment of rent or Indebtedness arising under such leases or
Capital Leases and (2) the Liens encumbering the assets leased or purported to
be leased under such leases or Capital Leases do not encumber any other assets
of the Borrower or any of its Subsidiaries (other than letters of credit,
payment undertaking agreements, guaranteed investment contracts, deposits of
cash or Cash Equivalents and other credit support arrangements, in each case
having an aggregate value not exceeding the fair market value of the assets
leased or purported to be leased under such leases or Capital Leases (each of
such values determined at the time when the lease agreement relating to the
relevant lease or Capital Lease is signed and delivered)); (k) (1) those liens,
encumbrances, hypothecs and other matters affecting title to any Real Property
and found reasonably acceptable by the Agent or insured against by title
insurance, (2) as to any particular Real Property at any time, such easements,
encroachments, covenants, rights of way, minor
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defects, irregularities or encumbrances on title which could not reasonably be
expected to materially impair such Real Property for the purpose for which it is
held by the mortgagor or grantor thereof, or the lien or hypothec held by the
Agent, (3) zoning and other municipal ordinances which are not violated in any
material respect by the existing improvements and the present use made by the
mortgagor or grantor thereof of the premises, (4) general real estate taxes and
assessments not yet delinquent, (5) any Lien that would be disclosed on a true,
correct and complete survey of the Real Property that does not materially affect
the use or enjoyment of the Real Property as it is currently being used, and (6)
such other similar items as the Agent may consent to (such consent not to be
unreasonably withheld); (l) Liens arising pursuant to purchase money mortgages
or security interests securing Indebtedness representing the purchase price (or
financing of the purchase price within 90 days after the respective purchase) of
assets acquired after the Closing Date, provided that (1) any such Liens attach
only to the assets so purchased, upgrades thereon and, if the asset so purchased
is an upgrade, the original asset itself (and such other assets financed by the
same financing source), (2) the Indebtedness (other than Indebtedness incurred
from the same financing source to purchase other assets and excluding
Indebtedness representing obligations to pay installation and delivery charges
for the property so purchased) secured by any such Lien does not exceed 100% of
the lesser of the fair market value or the purchase price of the property being
purchased at the time of the incurrence of such Indebtedness and (3) the
Indebtedness secured thereby is permitted to be incurred pursuant to this
Agreement; (m) Liens on property or assets acquired pursuant to a Permitted
Acquisition, or on property or assets of a Subsidiary of the Borrower in
existence at the time such Subsidiary is acquired pursuant to a Permitted
Acquisition; provided, that (1) any Indebtedness that is secured by such Liens
is permitted to exist hereunder, and (2) such Liens are not incurred in
connection with, or in contemplation or anticipation of, such Permitted
Acquisition and do not attach to any other asset of the Borrower or any of its
Subsidiaries; (n) Liens arising out of consignment or similar arrangements for
the sale of goods entered into by the Borrower or any of its Subsidiaries in the
ordinary course of business; (o) additional Liens incurred by the Borrower and
its Subsidiaries, so long as the value of the property subject to such Liens,
and the Indebtedness and other obligations secured thereby, do not exceed
$10,000,000 or the Dollar Equivalent thereof at any one time outstanding; and
(p) Liens securing Indebtedness or leases that refinance, refund, extend, renew
and/or replace Indebtedness or leases secured by Liens described in clauses (a)
through (o) above.
"Permitted Holders" means Apollo and any "group" (within the meaning
of Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as in effect
on the Closing Date) of which Apollo (or any Person falling within the
definition of "Apollo") is part.
"Person" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, institution, public benefit corporation, other entity or
government (whether federal, state, provincial, county, city, municipal, local,
foreign, or otherwise, including any instrumentality, division, agency, body or
department thereof).
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"Plan" means, at any time, an "employee benefit plan," as defined in
Section 3(3) of ERISA, that any Credit Party or ERISA Affiliate maintains,
contributes to or has an obligation to contribute to on behalf of participants
who are or were employed by any Credit Party.
"Pledge Agreements" means the Holdings Pledge Agreement, the UAP
Pledge Agreement, the Subsidiary Pledge Agreement and any other pledge agreement
entered into after the Closing Date by any Credit Party.
"Post-Closing Matters Agreement" means that certain Post-Closing
Matters Agreement dated as of the date hereof by and among Borrowers, the other
Credit Parties and Agents.
"PPSA" means the Personal Property Security Act (Ontario) and the
regulations thereunder, as from time to time in effect, provided, however, if
attachment, perfection or priority of Canadian Agent's security interests in any
Collateral are governed by the personal property security laws of any
jurisdiction other than Ontario, PPSA shall mean those personal property
security laws in such other jurisdiction for the purposes of the provisions
hereof relating to such attachment, perfection or priority and for the
definitions related to such provisions.
"Prior Claims" means all Liens created by applicable law (in contrast
with Liens voluntarily granted) which rank or are capable of ranking prior or
pari passu with the Canadian Agent's security interests (or the applicable
equivalent of such Liens) against all or part of the Collateral, including for
amounts owing for vacation pay, employee deductions and contributions, goods and
services taxes, sales taxes, harmonized sales taxes, realty taxes, business
taxes, workers' compensation, Quebec corporate taxes, pension plan or fund
obligations and overdue rents.
"Pro Forma" means the Unaudited Pro Forma Condensed Combined Financial
Data, including the related disclosures and footnotes, as presented in the U.S.
Borrower's draft Preliminary Offering Memorandum dated November 24, 2003.
"Pro Rata Share" means with respect to all matters relating to any
Lender (a) with respect to the Loans, the percentage obtained by dividing (i)
the aggregate Commitments of that Lender (including Participating Interests) by
(ii) the aggregate Commitments of all Lenders (including Participating
Interests), and (b) with respect to all Loans on and after the Commitment
Termination Date, the percentage obtained by dividing (i) the aggregate
outstanding principal balance of the Loans held by that Lender, by (ii) the
outstanding principal balance of the Loans held by all Lenders, as such
percentages may be adjusted by assignments pursuant to Section 8.1. GE Capital's
Pro Rata Share shall be deemed to include that portion of the Canadian Revolving
Loan held by GE Canada in which other Lenders do not hold Participating
Interests.
"Projections" means Credit Parties' forecasted consolidated: (a)
balance sheets; (b) profit and loss statements; (c) cash flow statements; (d)
capitalization statements and (e) Aggregate Borrowing Availability, consistent
with the historical Financial Statements of Credit Parties, together with
appropriate supporting details and a statement of underlying assumptions.
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"Proposed Change" has the meaning ascribed to it in Section 9.19(c).
"Qualified Assignee" means (a) any Lender, any Affiliate of any Lender
and, with respect to any Lender that is an investment fund that invests in
commercial loans, any other investment fund that invests in commercial loans and
that is managed or advised by the same investment advisor as such Lender or by
an Affiliate of such investment advisor, (b) any commercial bank, savings and
loan association or savings bank or any other entity which is an "accredited
investor" (as defined in Regulation D under the Securities Act of 1933) which
extends credit or buys loans as one of its businesses, including insurance
companies, mutual funds, lease financing companies and commercial finance
companies, in each case, which has a rating of BBB or higher from S&P and a
rating of Baa2 or higher from ▇▇▇▇▇'▇ at the date that it becomes a Lender and
which, through its applicable lending office, is capable of lending to the
applicable Borrowers without the imposition of any withholding or similar taxes
and (c) with respect to any Canadian Lender (i) any Canadian Lender, any
Affiliate of any Canadian Lender and, with respect to any Canadian Lender that
is an investment fund that invests in commercial loans, any other investment
fund that invests in commercial loans and that is managed or advised by the same
investment advisor as such Canadian Lender or by an Affiliate of such investment
advisor, and (ii) any commercial bank or other entity existing under the laws of
Canada or a province thereof that engages in the lending of money in Canada,
provided that so long as no Event of Default has occurred and is continuing,
each Person described under clause (i) or (ii) shall not be a non-resident of
Canada or shall be deemed to be a resident in Canada (which may be under Section
212 (13.3) of the ITA), in each case, for the purpose of the ITA in respect of
amounts paid or credited under this Agreement or such Person shall not be
entitled to receive Canadian withholding tax gross-up payments under Section
1.11 in respect of interest, fees or other consideration paid in respect of the
credit made available under the Canadian Revolving Loan to Canadian Borrower;
provided that no Person determined by Agent to be acting in the capacity of a
vulture fund or distressed debt purchaser shall be a Qualified Assignee and no
Person or Affiliate of such Person (other than a Person that is already a
Lender) holding Subordinated Debt or Stock issued by any Credit Party shall be a
Qualified Assignee.
"Qualified Plan" means a Pension Plan that is intended to be
tax-qualified under Section 401(a) of the IRC.
"Qualified Public Offering" means a firm commitment underwritten
public offering of common stock of Holdings pursuant to a registration statement
under the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder pursuant to which both (i) the proceeds (prior to
deducting any underwriters' discounts and commissions) equal or exceed $100.0
million and (ii) upon consummation of such offering, such common stock is listed
on the New York Stock Exchange or another national securities exchange or
authorized to be quoted and/or listed on the Nasdaq National Market.
"Real Estate" has the meaning ascribed to it in Section 5.12.
"Refunded Swing Line Loan" has the meaning ascribed to it in Section
1.1(b)(iii).
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"Related Transactions" means (i) the initial borrowing under the
Revolving Loan on the Closing Date, (ii) the Acquisition, (iii) the receipt by
Borrowers of not less than $175,000,000 in cash proceeds from the Bridge Loan or
the Senior Notes (subject to a dollar-for-dollar reduction for each dollar in
excess of $180,000,000 received by Holdings on the Closing Date in exchange for
the issuance of its Stock), (iv) the receipt by Holdings of (a) not less than
$120,000,000 in cash proceeds from the issuance of common Stock to Apollo, the
management of UAP and third parties other than Seller (no more than $10,000,000
of which may be rollover equity from management's equity interest in UAP) and
(b) not less than $60,000,000 from the issuance of preferred Stock to the
Seller, (v) the payment of all Fees, costs and expenses associated with all of
the foregoing and (vi) the execution and delivery of all of the Related
Transactions Documents.
"Related Transactions Documents" means the Loan Documents, the
Acquisition Agreement, the Bridge Loan Documents, the Senior Notes and all other
agreements or instruments executed in connection with the Related Transactions.
"Release" means any release, threatened release, spill, emission,
leaking, pumping, pouring, emitting, emptying, escape, injection, deposit,
disposal, discharge, dispersal, dumping, leaching or migration of Hazardous
Material in the indoor or outdoor environment, including the movement of
Hazardous Material through or in the air, soil, surface water, ground water or
property.
"Replacement Lender" has the meaning ascribed to it in Section
9.19(a).
"Requisite Lenders" means Lenders having (a) more than 66 2/3% of the
Commitments of all Lenders, or (b) if the Commitments have been terminated, more
than 66 2/3% of the aggregate outstanding amount of the Loans, including
Participating Interests; provided that so long as there are more than three
Lenders, Requisite Lenders shall also include Agent and at least two other
Lenders.
"Reserves" means, such reserves against Eligible Accounts or Eligible
Inventory that Agent (or, in the case of Eligible Accounts or Eligible Inventory
owned by Canadian Borrower and its Wholly-Owned Domestic Subsidiaries, Canadian
Agent) may, in its reasonable credit judgment (as to Reserves imposed after the
Closing Date, based on its analysis of facts or events first occurring, or first
discovered by Agent or Canadian Agent after the Closing Date), establish from
time to time upon at least five (5) days' notice to Borrower Representative
(without duplication of ineligible items and without duplication of reserves
deducted in computing book value). Credit Parties acknowledge that as of the
Closing Date Agent has imposed (i) a Reserve equal to 5% of the book value of
Eligible Inventory, which Reserve may be reversed when Agent is reasonably
satisfied with the quality of the Credit Parties' Collateral reporting systems
and (ii) Customer Deposit Reserves and Reserves for dilution, sales tax
accruals, landlord Liens (not to exceed, for any landlord lien, the book value
of Eligible Inventory encumbered by such Lien) and short payments, each of which
is deemed to be a reasonable exercise of Agent's (or Canadian Agent's) credit
judgment.
A-33
"Restricted Payment" means, with respect to any Credit Party (a) the
declaration or payment of any dividend or the incurrence of any liability to
make any other payment or distribution of cash or other property or assets in
respect of Stock; (b) any payment on account of the purchase, redemption,
defeasance, sinking fund or other retirement of such Credit Party's Stock or any
other payment or distribution made in respect thereof, either directly or
indirectly; (c) any payment or prepayment of principal of, premium, if any, or
interest, fees or other charges on or with respect to, and any redemption,
purchase, retirement, defeasance, sinking fund or similar payment and any claim
for rescission with respect to, any Subordinated Debt; and (d) any payment made
to redeem, purchase, repurchase or retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire Stock of such Credit
Party now or hereafter outstanding; provided, however, that dividends by
issuances of Stock, Stock splits, and other payments, distributions and
transfers consisting of Stock of any Credit Party (including, without
limitation, the issuance of warrants or options and the delivery of Stock upon
the exercise of warrants or options) shall not constitute Restricted Payments.
"Retiree Welfare Plan" means, at any time, a Welfare Plan that
provides for material continuing coverage or benefits for any participant or any
beneficiary of a participant after such participant's termination of employment,
other than continuation coverage provided pursuant to Section 4980B of the IRC
and at the sole expense of the participant or the beneficiary of the
participant.
"Revolving Credit Advances" means Canadian Revolving Credit Advances
and U.S. Revolving Credit Advances.
"Revolving Loan Accounts" has the meaning ascribed to it in Section
1.4.
"Revolving Loans" means, at any time, the sum of the outstanding U.S.
Revolving Loan and the Canadian Revolving Loan.
"Revolving Loan Commitment" means (a) as to any Lender, the commitment
of such Lender to make its Pro Rata Share of Revolving Credit Advances (or fund
its Participating Interest) or, solely with respect Lenders, incur its Pro Rata
Share of Letter of Credit Obligations (including, in the case of the Swing Line
Lender, its commitment to make Swing Line Advances as a portion of its Revolving
Loan Commitment) as set forth on Annex B or in the most recent Assignment
Agreement, if any, executed by such Lender and (b) as to all Lenders, the
aggregate commitment of all Lenders to make the Revolving Credit Advances
(including, in the case of the Swing Line Lender, Swing Line Advances) or,
solely with respect to Lenders, incur Letter of Credit Obligations, which
aggregate commitment shall be Five Hundred Million and No/100 Dollars
($500,000,000) on the Closing Date, as such amount may be adjusted, if at all,
from time to time in accordance with this Agreement.
"Revolving Notes" has the meaning ascribed to it in Section 1.1(a).
"S&P" means Standard & Poor's Ratings Services, a division of the
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
A-34
"Security Agreement" means the Security Agreement of even date
herewith entered into by and among Agent, on behalf of itself and Lenders, and
each Credit Party that is a signatory thereto.
"Seller" means ConAgra Foods, Inc. (or affiliates thereof).
"Senior Notes" means those certain unsecured Senior Notes due not
earlier than the sixth anniversary of the Closing Date issued by UAP in an
aggregate original principal amount of up to $225,000,000, or, prior to being
refinanced by the unsecured Senior Notes, each of the bridge loans made pursuant
to that certain Bridge Loan Agreement, dated as of the Closing Date, among the
U.S. Borrower, certain guarantors, the lenders from time to time party thereto,
UBS Securities LLC, as arranger, and UBS AG, Stamford Branch, as administrative
agent, and each of the "Exchange Notes" as defined in such agreement.
"Settlement Date" has the meaning ascribed to it in Section
8.5(a)(ii).
"Software" means all "software" as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party, other than software
embedded in any category of Goods, including all computer programs and all
supporting information provided in connection with a transaction related to any
program.
"Solvent" means (a) with respect to any Person organized under the
laws of the United States or any state thereof, on a particular date, that on
such date (i) the fair value of the property of such Person is greater than the
total amount of liabilities, including subordinated and contingent liabilities,
of such Person; (ii) the present fair saleable value of the assets of such
Person is not less than the amount that will be required to pay the probable
liability of such Person on its debts and liabilities, including subordinated
and contingent liabilities as they become absolute and matured; (iii) such
Person does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (iv) such Person is not engaged in a business or transaction, and is
not about to engage in a business or transaction, for which such Person's
property would constitute an unreasonably small capital and (b) with respect to
any Person on a particular date that is subject to the Insolvency Laws of
Canada, that on such date (i) the property of such Person is sufficient, if
disposed of at a fairly conducted sale under legal process, to enable payment of
all its obligations, due and accruing due, (ii) the property of such Person is,
at a fair valuation, greater than the total amount of liabilities, including
contingent liabilities, of such Person, (iii) such Person has not ceased paying
its current obligations in the ordinary course of business as they generally
become due, and (iv) such Person is not for any reason unable to meet its
obligations as they generally become due. The amount of contingent liabilities
(such as Litigation, guaranties and pension plan liabilities) at any time shall
be computed as the amount that, in light of all the facts and circumstances
existing at the time, represents the amount that can be reasonably be expected
to become an actual or matured liability.
"Statement" has the meaning ascribed to it in Section 4.3(b).
A-35
"Stock" means all shares, options, warrants, general or limited
partnership interests, membership interests or other equivalents (regardless of
how designated) of or in a corporation, partnership, limited liability company
or equivalent entity whether voting or nonvoting, including common stock,
preferred stock or any other "equity security" (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934).
"Stockholder" means, with respect to any Person, each holder of Stock
of such Person.
"Subordinated Debt" means Indebtedness of any Credit Party on terms
and conditions and subordinated to the Obligations in a manner and form (i) with
respect to high yield senior subordinated notes, which is consistent with
typical subordination provisions in indentures for such notes and (ii) with
respect to any other subordinated Indebtedness, subordinated in a manner and
form reasonably satisfactory to Agent and Requisite Lenders in their sole
discretion, as to right and time of payment and as to any other rights and
remedies thereunder.
"Subsidiary" means, with respect to any Person, (a) any corporation of
which an aggregate of more than 50% of the outstanding Stock having ordinary
voting power to elect a majority of the board of directors of such corporation
(irrespective of whether, at the time, Stock of any other class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of 50% or more of such Stock whether by proxy, agreement,
operation of law or otherwise, and (b) any partnership or limited liability
company in which such Person and/or one or more Subsidiaries of such Person
shall have an interest (whether in the form of voting or participation in
profits or capital contribution) of more than 50% or of which any such Person is
a general partner or may exercise the powers of a general partner. Unless the
context otherwise requires, each reference to a Subsidiary shall be a reference
to a Subsidiary of a Borrower. Notwithstanding any fact or circumstance to the
contrary, Access shall be treated as a Wholly-Owned Domestic Subsidiary of
Canadian Borrower for all purposes of this Agreement and the other Loan
Documents.
"Subsidiary Guaranty" means the Subsidiary Guaranty of even date
herewith executed by one or more Subsidiaries of Borrowers in favor of Agent, on
behalf of itself and Lenders.
"Subsidiary Pledge Agreements" means collectively (i) the Pledge
Agreement of even date herewith executed by GAC 26, Inc., a Nebraska corporation
in favor of Agent, on behalf of itself and Lenders, pledging all Stock of UAP
27, Inc., a Delaware corporation and (ii) the Pledge Agreement of even date
herewith executed by Loveland Products, Inc., a Colorado corporation in favor of
Agent, on behalf of itself and Lenders, pledging all Stock of Genmarks, Inc., a
Delaware corporation.
A-36
"Supermajority Lenders" means Lenders having (a) 80% or more of the
Revolving Loan Commitments of all Lenders, or (b) if the Revolving Loan
Commitments have been terminated, 80% or more of the aggregate outstanding
amount of the Revolving Loan (with the Swing Line Loan being attributed to the
Lender making such Loan).
"Supplemental Real Estate" means that Real Estate for which the Credit
Parties have not delivered to Agent a Mortgage on the Closing Date.
"Supplier Rebates" means rebates received by Credit Parties from
suppliers of Inventory in the ordinary course of business.
"Swing Line Advance" has the meaning ascribed to it in Section 1.1(b).
"Swing Line Availability" has the meaning ascribed to it in Section
1.1(b).
"Swing Line Commitment" means the commitment of the Swing Line Lender
to make Swing Line Advances as set forth on Annex B to the Agreement, which
commitment constitutes a subfacility of the Revolving Loan Commitment of the
Swing Line Lender.
"Swing Line Lender" means GE Capital.
"Swing Line Loan" means at any time, the aggregate amount of Swing
Line Advances outstanding to U.S. Borrower.
"Swing Line Note" has the meaning ascribed to it in Section 1.1(b).
"Target" has the meaning ascribed to it in Section 3.6.
"Tax Return" means any report, return, statement or other information
required, or permitted, by law to be filed or supplied to a Governmental
Authority (or otherwise so filed or supplied) in connection with any taxes and
all claims for refunds of taxes.
"Termination Date" means the date on which (a) the Loans have been
repaid in full, (b) all other Obligations under the Agreement and the other Loan
Documents have been completely discharged, (c) all Letter of Credit Obligations
have been cash collateralized in the amount set forth in Section 1.5(b),
cancelled or backed by standby letters of credit acceptable to Agent and (d) no
Borrower shall have any further right to borrow any monies under the Agreement.
"Title IV Plan" means a Pension Plan (other than a Multiemployer
Plan), that is covered by Title IV of ERISA, and that any Credit Party or ERISA
Affiliate maintains, contributes to or has an obligation to contribute to on
behalf of participants who are or were employed by any of them.
A-37
"Trademark Security Agreements" means the Trademark Security
Agreements made in favor of Agent, on behalf of itself and Lenders or Canadian
Agent on behalf of itself and Lenders, by each applicable Credit Party.
"Trademark License" means rights under any written agreement now owned
or hereafter acquired by any Credit Party granting any right to use any
Trademark.
"Trademarks" means all of the following now owned or hereafter adopted
or acquired by any Credit Party: (a) all trademarks, trade names, corporate
names, business names, trade styles, service marks, logos, internet domain
names, other source or business identifiers, prints and labels on which any of
the foregoing have appeared or appear, designs and general intangibles of like
nature (whether registered or unregistered), all registrations and recordings
thereof, and all applications in connection therewith, including registrations,
recordings and applications in the United States Patent and Trademark Office or
in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof; (b) all
reissues, extensions or renewals thereof; and (c) all goodwill associated with
or symbolized by any of the foregoing.
"Transition Services Agreements" means (i) that certain Seller
Transition Services Agreement dated as of the date hereof by and among ConAgra
Foods, Inc., a Delaware corporation, Holdings, UAP and the other companies
listed on the signature pages thereto and (ii) that certain Buyer Transition
Services Agreement dated as of the date hereof by and between ConAgra Foods,
Inc., a Delaware corporation and Holdings.
"UAP" has the meaning ascribed to it in the Preamble.
"UAP Pledge Agreement" means the Pledge Agreement of even date
herewith executed by UAP in favor of Agent, on behalf of itself and Lenders or
Canadian Agent on behalf of itself and Lenders, pledging all Stock of its
Subsidiaries, if any, and all Intercompany Notes owing to or held by it.
"U.S. Acquisitions" means a subcategory of Permitted Acquisitions
involving assets, at least 90% of which are located in the United States, or a
Target that is organized under the laws of the United States or some political
subdivision thereof at least 90% of the assets of which are located in the
United States.
"U.S. Borrower" has the meaning ascribed to it in the Preamble.
"U.S. Borrowing Availability" means as of any date of determination
the lesser of (i) the Maximum Amount, less the Dollar Equivalent of the Canadian
Revolving Loan then outstanding or (ii) the U.S. Borrowing Base, plus, if
applicable, the Maximum In-Season Overadvance, in each case, less the U.S.
Revolving Loan then outstanding (including, without duplication, the outstanding
balance of Letter of Credit Obligations, the Swing Line Loan and the In-Season
Overadvance Amount).
A-38
"U.S. Borrowing Base" means, as of any date of determination by Agent,
from time to time, an amount equal to the sum at such time of:
(a) 85% of the book value of U.S. Borrower's and its Wholly-Owned
Domestic Subsidiaries' (other than Inactive Subsidiaries) Eligible Accounts
(other than Extended Accounts) at such time;
(b) 75% of the book value of U.S. Borrower's and its Wholly-Owned
Domestic Subsidiaries' (other than Inactive Subsidiaries) Eligible Extended
Accounts; and
(c) the lesser of (i) 55% (65% during the period from April 1 to July
31 of each year) of the book value of U.S. Borrower's and its Wholly-Owned
Domestic Subsidiaries' (other than Inactive Subsidiaries) Eligible
Inventory valued at the lower of cost (determined on a first-in, first-out
basis) or market or (ii) 85% multiplied by the most recently determined Net
Orderly Liquidation Value Factor multiplied by the book value of U.S.
Borrower's and its Wholly-Owned Domestic Subsidiaries' (other than Inactive
Subsidiaries) Eligible Inventory.
"U.S. Disbursement Account" has the meaning ascribed to it in Section
1.1(d).
"U.S. Overadvance" has the meaning ascribed to it in Section
1.1(a)(i).
"U.S. Pay Down" has the meaning ascribed to it in Section 1.1(a)(i).
"U.S. Revolving Credit Advance" has the meaning ascribed to it in
Section 1.1(a)(i).
"U.S. Revolving Loan" means, at any time, the sum of (i) the aggregate
amount of U.S. Revolving Credit Advances outstanding to U.S. Borrower (including
Swing Line Advances) plus (ii) the aggregate Letter of Credit Obligations
incurred on behalf of U.S. Borrower. Unless the context otherwise requires,
references to the outstanding principal balance of the U.S. Revolving Loan shall
include the outstanding balance of Letter of Credit Obligations.
"Unfunded Pension Liability" means, at any time, the aggregate amount,
if any, of the sum of (a) the amount by which the present value of all accrued
benefits under each Title IV Plan exceeds the fair market value of all assets of
such Title IV Plan allocable to such benefits in accordance with Title IV of
ERISA, all determined as of the most recent valuation date for each such Title
IV Plan using the actuarial assumptions for funding purposes in effect under
such Title IV Plan, and (b) for a period of 5 years following a transaction
which might reasonably be expected to be covered by Section 4069 of ERISA, the
liabilities (whether or not accrued) that could be avoided by any Credit Party
or any ERISA Affiliate as a result of such transaction.
"Unused Line Fee" has the meaning ascribed to it in Section 1.3.
"Welfare Plan" means a Plan described in Section 3(1) of ERISA.
A-39
"Wholly-Owned" means, as to a Subsidiary of any Person, that 100% of
the Stock of such Subsidiary is at the time owned by such Person and/or one or
more Wholly-Owned Subsidiaries of such Person.
Rules of construction with respect to accounting terms used in the
Agreement or the other Loan Documents shall be as set forth or referred to in
this Annex A. All other undefined terms contained in any of the Loan Documents
shall, unless the context indicates otherwise, have the meanings provided for by
the Code to the extent the same are used or defined therein; in the event that
any term is defined differently in different Articles or Divisions of the Code,
the definition contained in Article or Division 9 shall control. Unless
otherwise specified, references in the Agreement or any of the Appendices to a
Section, subsection or clause refer to such Section, subsection or clause as
contained in the Agreement. The words "herein," "hereof" and "hereunder" and
other words of similar import refer to the Agreement as a whole, including all
Annexes, Exhibits and Disclosure Schedules, as the same may from time to time be
amended, restated, modified or supplemented, and not to any particular section,
subsection or clause contained in the Agreement or any such Annex, Exhibit or
Disclosure Schedule.
Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter genders. The words "including", "includes" and
"include" shall be deemed to be followed by the words "without limitation"; the
word "or" is not exclusive; references to Persons include their respective
successors and assigns (to the extent and only to the extent permitted by the
Loan Documents) or, in the case of governmental Persons, Persons succeeding to
the relevant functions of such Persons; and all references to statutes and
related regulations shall include any amendments of the same and any successor
statutes and regulations. Whenever any provision in any Loan Document refers to
the knowledge (or an analogous phrase) of any Credit Party, such words are
intended to signify that such Credit Party has actual knowledge or awareness of
a particular fact or circumstance or that such Credit Party, if it had exercised
reasonable diligence, would have known or been aware of such fact or
circumstance.
A-40
ANNEX B (from Annex A - Commitments definition)
--------------------------------
to
CREDIT AGREEMENT
----------------
PRO RATA SHARES AND COMMITMENT AMOUNTS
Revolving Loan Commitment Lender(s)
-------------------------------------------------- -----------------------
$350,000,000/1/ GE Capital, as a Lender
(including a Swing Line Commitment of $25,000,000)
$150,000,000/2/ UBS Loan Finance LLC
----------
/1/ Including, in the case of GE Capital, that portion of the $20,000,000
Canadian Revolving Loan to be funded by GE Canada that is not covered
by Participating Interests held by other Lenders.
/2/ Including its' Pro Rate share (representing its Participating Interest) of
the $20,000,000 Canadian Revolving Loan.
EXHIBIT 4.3(d)
BORROWING BASE CERTIFICATE
[BORROWER]
Date: ___________, ______
This Certificate is given by ____________________ ("Borrower")
pursuant to subsection 4.3(d) of that certain Credit Agreement dated as of
November 24, 2003 among Borrower, the other Person named therein as a Borrower,
the other Credit Parties party thereto, the Lenders from time to time party
thereto, General Electric Capital Corporation, as Agent and GE Canada Finance
Inc. as Canadian Agent (as such agreement may have been amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement").
Capitalized terms used herein without definition shall have the meanings set
forth in the Credit Agreement.
The undersigned is duly authorized to execute and deliver this
Certificate on behalf of, in such officer's official capacity, Borrower. By
executing this Certificate such officer hereby certifies to Agent and Lenders,
in such officer's official capacity, that:
(a) Attached hereto as Schedule 1 is a calculation of the proposed
Borrowing Base for Borrower as of the above date;
(b) Based on such schedule, the proposed Borrowing Base as of the
above date is:
$__________________ or the Dollar Equivalent thereof
(c) Attached hereto as Schedule II is a summary of all Accounts and
Inventory that do not meet the eligibility criteria in Sections
1.7 and 1.8 of the Credit Agreement.
IN WITNESS WHEREOF, Borrower has caused this Certificate to be
executed by its ________________ this ____ day of ___________, ____.
[BORROWER]
By:
-----------------------------------
Its:
-----------------------------------
-45-
Schedule 1
To Exhibit 4.3(d)
BORROWING BASE CERTIFICATE OF
[BORROWER]
BORROWING BASE CALCULATION
---------------------------------------------------------------------------------------------
Canadian Aggregate
U.S. Borrowing Borrowing Borrowing
Availability Availability Availability
----------------------------------------------
Accounts
Accounts (a):
Add: Prepayments (to the extent
included in the above)
----------------------------------------------
Total Accounts $ 0 $ 0 $ 0
==============================================
Less Ineligible Accounts:
Accounts/Extended Accounts
Over 60 past due
Cross aging --
Customer allowances --
Intercompany accounts --
Short payment accounts --
UAP Timberland accounts --
Government accounts --
Foreign accounts --
Finance charges --
Employee accounts --
Bankrupt accounts --
Restructured/Doubtful accounts --
Tolling accounts --
▇▇▇▇ and hold accounts --
Sales tax accrual --
-46-
Unreconciled Differences --
Access Warehouse accounts --
Customer advances --
Other Reserves --
Other ineligibles included in Section 1.7
and not reflected above --
----------------------------------------------
Total Ineligibles -- -- --
----------------------------------------------
Total Eligible Accounts $ 0 $ 0 $ 0
Less Extended Term Accounts --
----------------------------------------------
Total Non-Extended Term Accounts -- -- --
Less Dilution Reserve -- -- --
----------------------------------------------
Non-Extended Term Accounts less
Dilution -- -- --
Advance Rate 85% 85% 85%
----------------------------------------------
Available Non-Extended Term Accounts -- -- --
==============================================
Extended Term Accounts -- -- --
Less Dilution Reserve -- -- --
----------------------------------------------
Extended Term Accounts less Dilution -- -- --
Advance Rate 75% 75% 75%
----------------------------------------------
Available Extended Term Accounts -- -- --
==============================================
Total Extended and Non Extended Accounts
Availability $ 0 $ 0 $ 0
==============================================
Inventory
Inventory (b) $ 0
Add: Negative Inventory (to the extent not
included above) --
Add: In-Transit Inventory (to the extent not
included above) --
Add: Consignment Accrual
--
----------------------------------------------
Total Inventory $ 0 $ 0 $ 0
==============================================
Less Ineligible Inventory:
Obsolete/ slow moving Inventory
-47-
Shrink reserve --
Consigned Inventory from vendor --
Work-In-Process Inventory --
Packaging Inventory --
Supplies/spare parts Inventory --
Tolling inventory --
Rework/damaged inventory (Canada) --
Reconciling items --
Manufacturing variances --
Inventory at Locations less than $100,000 --
Rent Reserves (Section 2.6) --
Other Reserves --
Other ineligibles included in Section 1.8 --
Customer Advances --
----------------------------------------------
Total Ineligible Inventory -- -- --
----------------------------------------------
Total Eligible Inventory -- -- --
Advance Rate 55% 55% 55%
----------------------------------------------
Book Available Inventory -- -- --
Less: 5% of Total Eligible Inventory -- -- --
----------------------------------------------
(1) Net Book Available Inventory -- -- --
==============================================
Inventory -- -- --
Less: Work-In-Process -- -- --
Less: Packaging -- -- --
----------------------------------------------
Eligible Liquidation Inventory -- -- --
Net Orderly Liquidation Factor 60.9% 60.9% 60.9%
----------------------------------------------
Recovery Value -- -- --
----------------------------------------------
-48-
(2) 85% Multiplied times the Recovery Value -- -- --
==============================================
Inventory Availability (Lesser of (1) or (2)
above) $ 0 $ 0 $ 0
==============================================
Total Borrowing Base (Accounts Availability
plus Inventory Availability) $ 0 $ 0 $ 0
==============================================
-49-
EXHIBIT 4.3(k)
COMPLIANCE CERTIFICATE
BORROWER REPRESENTATIVE
Date: __________, _____
This Certificate is given by United Agri Products, Inc., a Delaware
corporation, in its capacity as Borrower Representative, pursuant to Section
4.3(k) of that certain Credit Agreement dated as of November 24, 2003 among
Borrowers, the other Credit Parties party thereto, the Lenders from time to time
party thereto, General Electric Capital Corporation, as Agent, and GE Canada
Finance Inc., as Canadian Agent (as such agreement may have been amended,
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"). Capitalized terms used herein without definition shall have the
meanings set forth in the Credit Agreement.
The undersigned is duly authorized to execute and deliver this
Certificate on behalf of Borrower Representative. By executing this Certificate
such officer hereby certifies to Agent, Canadian Agent and Lenders in such
officer's official capacity, that:
(a) the financial statements delivered with this Certificate in
accordance with Section 4.3(a) and/or 4.3(b) of the Credit Agreement fairly
present in all material respects the results of operations and financial
condition of Holdings, Borrowers and/or their Subsidiaries as of the dates of
such financial statements;
(b) I have reviewed the terms of the Credit Agreement and have made,
or caused to be made under my supervision, a review in reasonable detail of the
transactions and conditions of the Credit Parties during the accounting period
covered by such financial statements;
(c) such review has not disclosed the existence during or at the end
of such accounting period, and I have no knowledge of the existence as of the
date hereof, of any condition or event that constitutes a Default or an Event of
Default, except as set forth on Schedule 1 hereto, which includes a description
of the nature and period of existence of such Default or an Event of Default and
what action Borrower has taken, is taking and proposes to take with respect
thereto;
(d) except as set forth on Schedule 1 hereto, Borrowers are in
compliance with the covenants contained in Sections 3.1, 3.3, 3.4, 3.5, 3.7 and
3.8 and Sections 4.1 and 4.2 of the Credit Agreement, as demonstrated on
Schedule 1 hereto;
(e) except as set forth on Schedule 2 hereto, subsequent to the date
of the most recent Compliance Certificate submitted by Borrower Representative
pursuant to Section 4.3(k) of the Credit Agreement, no Credit Party has (i)
changed its name as it
-50-
appears in official filings in the jurisdiction of its organization, (ii)
changed its chief executive office, principal place of business, corporate
offices, warehouses or locations at which Collateral is held or stored, or the
location of its records concerning Collateral, (iii) changed the type of entity
that it is, (iv) changed (or has had changed) its organization identification
number, if any, issued by its jurisdiction of organization, (v) changed its
jurisdiction of organization, (vi) changed the end of its Fiscal Year, or (vii)
formed any new Subsidiary or entered into any partnership or joint venture with
any other Person; and
(f) except as set forth on Schedule 3 hereto, subsequent to the date
of the most recent Compliance Certificate submitted by Borrower Representative
pursuant to Section 4.3(k) of the Credit Agreement, there has been no event
which would alter any of the disclosures set forth on Schedule 5.4(b) of the
Credit Agreement.
IN WITNESS WHEREOF, Borrower Representative has caused this
Certificate to be executed by its __________________ this ____ day of
___________, ____.
UNITED AGRI PRODUCTS, INC., as Borrower
Representative
By
-----------------------------------
Its
-----------------------------------
-51-
SCHEDULE 1
Exhibit 4.3(k)
ALL AMOUNTS IN EXHIBIT 4.3(K) ARE WITHOUT DUPLICATION AND, UNLESS OTHERWISE
INDICATED, ARE CALCULATED FOR HOLDINGS AND ITS SUBSIDIARIES ON A CONSOLIDATED
BASIS
INDEBTEDNESS
(Section 3.1)
Intercompany loans owing to U.S. Borrower and its Wholly-Owned Domestic
Subsidiaries by Canadian Borrower and its Domestic Subsidiaries:
Actual in the aggregate $______________
Permitted in the aggregate $ 25,000,000
Cash equity contributions by U.S. Borrower
to Canadian Borrower $______________
Total $______________
In Compliance Yes/No
Unsecured Indebtedness of Borrowers pursuant to the Bridge Loans and
refinancings thereof:
Actual in the aggregate $______________
Permitted in the aggregate $ 225,000,000
In Compliance Yes/No
Indebtedness secured by purchase money Liens or incurred with respect to Capital
Leases:
Actual in the aggregate $______________
Permitted in the aggregate $ 15,000,000
In Compliance Yes/No
Performance bonds, surety bonds, appeal bonds and customs bonds:
Actual in the aggregate $______________
Permitted in the aggregate $ 15,000,000
In Compliance Yes/No
Indebtedness of any Borrower or any of its Subsidiaries arising in connection
with the third-party financing of insurance premiums in the ordinary course of
business:
-1-
Actual in the aggregate $______________
Permitted in the aggregate $ 15,000,000
In Compliance Yes/No
Other unsecured Indebtedness:
Actual in the aggregate $______________
Permitted in the aggregate $ 10,000,000
In Compliance Yes/No
Unsecured Subordinated Debt:
Actual in the aggregate $______________
Permitted in the aggregate $ 50,000,000
In Compliance Yes/No
-2-
INVESTMENTS
(Section 3.3)
Loans and advances to employees for moving, traveling and other similar expenses
in the ordinary course of business:
Actual in the aggregate $______________
Permitted in the aggregate $ 5,000,000
In Compliance Yes/No
Cash equity contributions by U.S. Borrower to Canadian Borrower:
Actual in the aggregate $______________
Intercompany loans owing to U.S. Borrower
and its Wholly-Owned Domestic Subsidiaries
by Canadian Borrower and its Domestic
Subsidiaries $______________
Total $______________
Total Permitted $ 25,000,000
In Compliance Yes/No
Investments in joint ventures, including increased Investments in Existing Joint
Ventures
Actual in the aggregate $______________
Permitted in the aggregate $ 25,000,000
In Compliance Yes/No
Investments described in Section 3.3(o)
Starting Amount $ 25,000,000
Plus 50% of cumulative positive
Consolidated Net Income since the Closing
Date $______________
Plus the net amount of cash invested in the
Stock of Holdings since the Closing Date $______________
-3-
Less Permitted Distributions pursuant to
Section 3.5(d) and prepayments or
repurchases of Senior Notes or Subordinated
Debt pursuant to Section 3.18 $______________
Amount of Investments described in
Section 3.3(o) $______________
Total $______________
In Compliance Yes/No
-4-
CONTINGENT OBLIGATIONS
(Section 3.4)
Contingent Obligations with respect to performance bonds, surety bonds, appeal
bonds or customs bonds required in the ordinary course of business:
Actual in the aggregate $______________
Permitted in the aggregate $ 15,000,000
In Compliance Yes/No
Other Contingent Obligations not otherwise permitted in Sections 3.4(a)
through (h):
Actual in the aggregate $______________
Permitted in the aggregate $ 10,000,000
In Compliance Yes/No
-5-
RESTRICTED JUNIOR PAYMENTS
(Section 3.5)
Payments to Holdings to permit Holdings to repurchase Stock of Holdings owned by
employees of Borrowers or their Subsidiaries whose employment has terminated:
Actual during current Fiscal Year $______________
Permitted during current Fiscal Year [$_____________]
In Compliance Yes/No
Actual in the aggregate $______________
Permitted in the aggregate [$_____________]
In Compliance Yes/No
Permitted Distributions
Starting amount $ 25,000,000
Plus 50% of cumulative positive
Consolidated Net Income since the Closing
Date $______________
Plus the net amount of cash invested in the
Stock of Holdings since the Closing Date $______________
Less Investments pursuant to Section 3.3(o)
and prepayments or repurchases of Senior
Notes or Subordinated Debt pursuant to
Section 3.18 $______________
Total $______________
Amount of Permitted Distributions $______________
In Compliance Yes/No
Dividends to Holdings to Repurchase Stock
Actual $______________
Permitted $______________
In Compliance Yes/No
-6-
DISPOSAL OF ASSETS
(Section 3.7)
Describe any Asset Dispositions made during the period (list each transaction by
market value of assets sold):
_________________________________________________ $______________
_________________________________________________ $______________
_________________________________________________ $______________
_________________________________________________ $______________
Permitted Asset Dispositions in a single transaction or
series of related transactions (asset market value) $______________
In Compliance Yes/No
Aggregate market value of Asset Dispositions in Fiscal Year $______________
Permitted aggregate market value of Asset Dispositions in
Fiscal Year $______________
In Compliance Yes/No
Percentage of proceeds in form of cash or Cash Equivalents _______________%
Percentage required compliance 75%
Percentage of Proceeds in form of promissory note(s) _______________%
Percent required (balance of proceeds) _______________%
In Compliance Yes/No
* Repeat above for each Asset Disposition or group of
Asset Dispositions
-7-
SALE-LEASEBACKS
(Section 3.17)
Sale-leaseback transactions, lease in-lease out transactions and similar
transactions
Actual in the aggregate $______________
Permitted in the aggregate $ 15,000,000
In Compliance Yes/No
-8-
PREPAYMENTS OF SENIOR NOTES AND SUBORDINATED DEBT
(Section 3.18)
Starting amount $ 25,000,000
Plus 50% of cumulative positive
Consolidated Net Income since the Closing
Date $______________
Plus the net amount of cash invested in
the Stock of Holdings since the Closing
Date $______________
Less Permitted Distributions pursuant to
Section 3.5(d) and Investments described
in Section 3.3(o) $______________
Total $______________
Prepayments of Senior Notes $______________
Prepayments of Subordinated Debt $______________
Total $______________
In Compliance Yes/No
-9-
MINIMUM EBITDA
(Section 4.1)
Aggregate Borrowing Availability $______________
EBITDA covenant applicable Yes/No
If yes, EBITDA measured as of the last day of the most
recent month for the 12-month period then ended $______________
In Compliance (>= $70,000,000) Yes/No
-10-
MINIMUM FIXED CHARGE COVERAGE RATIO
(Section 4.2)
Aggregate Borrowing Availability $______________
Minimum Fixed Charge Coverage Ratio covenant applicable Yes/No
If yes, Fixed Charge Coverage Ratio measured as of the last
day of the most recent month for the 12-month period then
ended ______ : ______
In Compliance (>= 1.1 to 1.0) Yes/No
-11-
CONDITIONS OR EVENTS WHICH CONSTITUTE A DEFAULT OR
EVENT OF DEFAULT
[If any condition or event exists that constitutes a Default or Event of
Default, specify nature and period of existence and what action Borrowers have
taken, is taking or proposes to take with respect thereto; if no condition or
event exists, state "None."]
-12-
SCHEDULE 2
Exhibit 4.3(k)
ORGANIZATION/LOCATION CHANGES
[If any Credit Party has (i) changed its name as it appears in official filings
in the state of its organization, (ii) changed its chief executive office,
principal place of business, corporate offices, warehouses or locations at which
Collateral is held or stored, or the location of its records concerning
Collateral, (iii) changed the type of entity that it is, (iv) changed (or has
had changed) its organization identification number, if any, issued by its
jurisdiction or organization, (v) changed its jurisdiction of organization, (vi)
changed the end of its Fiscal Year, or (vii) formed any new Subsidiary or
entered into any partnership or joint venture with any Person, such change shall
be specified below; if no such change has been made, state "None."]
SCHEDULE 3
Exhibit 4.3(k)
CAPITALIZATION CHANGES
[If with respect to any Credit Party there has been a change in authorized
Stock, issued and outstanding Stock or the identity of the holders of any Stock,
or if with respect to any Credit Party there has been a change pertaining to
preemptive rights or any other outstanding rights, options, warrants, conversion
rights or similar agreements or understandings for the purchase or acquisition
of any Stock, such change shall be set forth below; if no such change has
occurred, state "None."]
EXHIBIT 1.1(a)(i)
to
CREDIT AGREEMENT
----------------
FORM OF NOTICE OF REVOLVING CREDIT ADVANCE
__________, _____
General Electric Capital Corporation,
for itself, as Lender, and as Agent
for Lenders
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: United Agri Products, Inc.
Account Manager
Ladies and Gentlemen:
The undersigned, United Agri Products, Inc., in its capacity as
[Borrower Representative/U.S. Borrower] refers to the Credit Agreement, dated as
of November 24, 2003 (the "Credit Agreement," the terms defined therein being
used herein as therein defined), by and among the undersigned, the other Credit
Parties signatory thereto, General Electric Capital Corporation for itself, as a
Lender, and as Agent, GE Canada Finance Inc., for itself, as a Lender, and as
Canadian Agent, and the other Lenders, and hereby gives you notice, irrevocably,
pursuant to Section 1.1(a) of the Credit Agreement, that the undersigned hereby
requests a Revolving Credit Advance under the Credit Agreement, and in that
connection sets forth below the information relating to such Revolving Credit
Advance as required by Section 1.1(a) of the Credit Agreement:
(i) The date of the requested Revolving Credit Advance is
__________, ____.
(ii) The aggregate amount of the requested Revolving Credit Advance
is $____________.
(iii) The requested Revolving Credit Advance is [an Index Rate Loan]
[a LIBOR Loan with a LIBOR Period of ________].
(iv) The requested Revolving Credit Advance is to be sent to:
[Name of Bank]
[City of Bank]
Beneficiary:
Account No.: [number]
ABA No.: [number]
Attn: [name]
[Borrower Representative/U.S. Borrower] hereby certifies that all of
the following statements are true and correct in all material respects on the
date hereof, and will be true in all material respects on the date of the
requested Revolving Credit Advance, before and after giving effect to the
requested Revolving Credit Advance: [(i) no representation or warranty by any
Credit Party contained in the Credit Agreement or in any other Loan Document is
untrue or incorrect in any material respect (without duplication of any
materiality qualifier contained therein) as of such date, except to the extent
that such representation or warranty expressly relates to an earlier date,]
[(ii) no Default or Event of Default has occurred and is continuing or would
result after giving effect to the requested Revolving Credit Advance,] [(iii)]
after giving effect to the requested Revolving Credit Advance, [the outstanding
amount of the aggregate U.S. Revolving Loan will not exceed remaining U.S.
Borrowing Availability/ the outstanding amount of the Canadian Revolving Loan
will not exceed the remaining Canadian Borrowing Availability] and [(iv)] after
giving effect to the requested Revolving Credit Advance, Aggregate Borrowing
Availability will not be less than $40,000,000 or the Dollar Equivalent thereof
or Borrowers have delivered to Agents a Compliance Certificate demonstrating
that EBITDA and the Fixed Charge Coverage Ratio were at least $70,000,000 or the
Dollar Equivalent thereof and 1.1 to 1.0, respectively, as of the last day of
the month ending 30 or fewer days prior to the proposed date of the requested
Revolving Credit Advance. [Clauses (i) and/or (ii) may be adjusted or deleted;
provided, however, that Agent (or in the case of Canadian Borrower, Canadian
Agent) or Requisite Lenders may require clause (i) and/or (ii) as a condition to
funding pursuant to Section 7.2 of the Credit Agreement].
UNITED AGRI PRODUCTS, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT 1.1(a)(iii)
to
CREDIT AGREEMENT
----------------
FORM OF REVOLVING NOTE
(Multi-Borrower)
Chicago, Illinois
$500,000,000.00/3/
FOR VALUE RECEIVED, each of the undersigned (each individually a
"Borrower" and collectively, the "Borrowers"), HEREBY PROMISES TO PAY to the
order of _______________________ ("Lender"), at the offices of GENERAL ELECTRIC
CAPITAL CORPORATION, a Delaware corporation, as Agent for Lenders ("Agent"), at
its address at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at
such other place as Agent may designate from time to time in writing, in lawful
money of the United States of America and in immediately available funds, the
amount of FIVE HUNDRED MILLION DOLLARS AND NO CENTS ($500,000,000.00) or, if
less, the aggregate unpaid amount of all Revolving Credit Advances made to the
undersigned under the "Credit Agreement" (as hereinafter defined). All
capitalized terms used but not otherwise defined herein have the meanings given
to them in the Credit Agreement or in Annex A thereto.
This Revolving Note is one of the Revolving Notes issued pursuant to
that certain Credit Agreement dated as of November ___, 2003 by and among
Borrowers, the other Persons named therein as Credit Parties, Agent, Lender and
the other Persons signatory thereto from time to time as Lenders (including all
annexes, exhibits and schedules thereto, and as from time to time amended,
restated, supplemented or otherwise modified, the "Credit Agreement"), and is
entitled to the benefit and security of the Credit Agreement, the Security
Agreement and all of the other Loan Documents referred to therein. Reference is
hereby made to the Credit Agreement for a statement of all of the terms and
conditions under which the Loans evidenced hereby are made and are to be repaid.
The date and amount of each Revolving Credit Advance made by Lenders to
Borrowers, the rates of interest applicable thereto and each payment made on
account of the principal thereof, shall be recorded by Agent on its books;
provided that the failure of Agent to make any such recordation shall not affect
the obligations of Borrowers to make a payment when due of any amount owing
under the Credit Agreement or this Revolving Note in respect of the Revolving
Credit Advances made by Lender to Borrowers.
The principal amount of the indebtedness evidenced hereby shall be
payable in the amounts and on the dates specified in the Credit Agreement, the
terms of which are hereby incorporated herein by reference. Interest thereon
shall be paid until such principal amount is paid in full at such interest rates
and at such times, and pursuant to such calculations, as are specified in the
Credit Agreement. The terms of the Credit Agreement are hereby incorporated
herein by reference.
----------
/3/ In the case of Canadian Borrower, the Dollar Equivalent of $20,000,000.
If any payment on this Revolving Note becomes due and payable on a day
other than a Business Day, the payment thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.
Upon and after the occurrence of any Event of Default, this Revolving
Note may, as provided in the Credit Agreement, and without presentment, demand,
protest, notice of intent to accelerate, notice of acceleration or other legal
requirement of any kind (all of which are hereby expressly waived by Borrowers),
be declared, and immediately shall become, due and payable.
Time is of the essence of this Revolving Note.
Except as provided in the Credit Agreement, this Revolving Note may
not be assigned by Lender to any Person.
THIS REVOLVING NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES.
----------------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT 1.1(b)
to
CREDIT AGREEMENT
----------------
FORM OF SWING LINE NOTE
(Multi-Borrower)
Chicago, Illinois
$___,___,____________ __, ____
FOR VALUE RECEIVED, each of the undersigned (each individually a
"Borrower" and collectively, the "Borrowers"), HEREBY PROMISES TO PAY to the
order of GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation ("Swing
Line Lender") at the offices of GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware
corporation, as Agent (in such capacity, the "Agent") at the Agent's address at
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other
place as Agent may designate from time to time in writing, in lawful money of
the United States of America and in immediately available funds, the amount of
___________________ DOLLARS AND NO CENTS ($___,___,___) or, if less, the
aggregate unpaid amount of all Swing Line Advances made to the undersigned under
the "Credit Agreement" (as hereinafter defined). All capitalized terms used but
not otherwise defined herein have the meanings given to them in the Credit
Agreement or in Annex A thereto.
This Swing Line Note is issued pursuant to that certain Credit
Agreement dated as of November ___, 2003 by and among Borrowers, the other
Persons named therein as Credit Parties, Agent, Swing Line Lender and the other
Persons signatory thereto from time to time as Lenders (including all annexes,
exhibits and schedules thereto and as from time to time amended, restated,
supplemented or otherwise modified, the "Credit Agreement"), and is entitled to
the benefit and security of the Credit Agreement, the Security Agreement and all
of the other Loan Documents. Reference is hereby made to the Credit Agreement
for a statement of all of the terms and conditions under which the Loans
evidenced hereby are made and are to be repaid. The date and amount of each
Swing Line Advance made by Swing Line Lender to Borrowers, the rate of interest
applicable thereto and each payment made on account of the principal thereof,
shall be recorded by Agent on its books; provided that the failure of Agent to
make any such recordation shall not affect the obligations of Borrowers to make
a payment when due of any amount owing under the Credit Agreement or this Swing
Line Note in respect of the Swing Line Advances made by Swing Line Lender to
Borrowers.
The principal amount of the indebtedness evidenced hereby shall be
payable in the amounts and on the dates specified in the Credit Agreement, the
terms of which are hereby incorporated herein by reference. Interest thereon
shall be paid until such principal amount is paid in full at such interest rates
and at such times, and pursuant to such calculations, as are specified in the
Credit Agreement. The terms of the Credit Agreement are hereby incorporated
herein by reference.
If any payment on this Swing Line Note becomes due and payable on a
day other than a Business Day, the payment thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.
Upon and after the occurrence of any Event of Default, this Swing Line
Note may, as provided in the Credit Agreement, and without presentment, demand,
protest, notice of intent to accelerate, notice of acceleration or other legal
requirement of any kind (all of which are hereby expressly waived by Borrowers),
be declared, and immediately shall become, due and payable.
Time is of the essence of this Swing Line Note.
Except as provided in the Credit Agreement, this Swing Line Note may
not be assigned by Lender to any Person.
THIS SWING LINE NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES.
----------------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT 1.2(e)
to
CREDIT AGREEMENT
----------------
FORM OF NOTICE OF CONVERSION/CONTINUATION
Reference is made to that certain Credit Agreement dated as of
November 24, 2003 by and among the undersigned in its capacity as [Borrower
Representative/U.S. Borrower], the other Person named therein as a Borrower, the
other Persons named therein as Credit Parties, General Electric Capital
Corporation ("Agent"), GE Canada Finance Inc. and the Lenders from time to time
signatory thereto (including all annexes, exhibits or schedules thereto, and as
from time to time amended, restated, supplemented or otherwise modified, the
"Credit Agreement"). Capitalized terms used herein without definition are so
used as defined in the Credit Agreement.
[Borrower Representative/U.S. Borrower] hereby gives irrevocable
notice, pursuant to Section 1.2(e) of the Credit Agreement, of its request to:
[(a) on [ date ] convert $[________]of the aggregate outstanding
principal amount of the [_______] Loan, bearing interest at the [________] Rate,
into a(n) [________] Loan [and, in the case of a LIBOR Loan, having a LIBOR
Period of [_____] month(s);]
[(b) on [ date ] continue $[________]of the aggregate outstanding
principal amount of the [_______] Loan, bearing interest at the LIBOR Rate, as a
LIBOR Loan having a LIBOR Period of [_____] month(s)].
[Borrower Representative/U.S. Borrower] certifies that the conversion
and/or continuation of the Loans requested above is for the separate accounts of
[Canadian Borrower/U.S. Borrower] in the following amount: $_______________.
[Borrower Representative/U.S. Borrower] hereby (i) certifies that all
of the following statements are true and correct in all material respects on the
date hereof, and will be true in all material respects on the date of the
requested conversion/continuation, before and after giving effect thereto: [(a)
no representation or warranty by any Credit Party contained in the Credit
Agreement or in any other Loan Document is untrue or incorrect in any material
respect (without duplication of any materiality qualifier contained therein) as
of such date, except to the extent that such representation or warranty
expressly relates to an earlier date,] [(b) no Default or Event of Default has
occurred and is continuing or would result after giving effect to the requested
conversion/continuation,] [(c)] after giving effect to the requested
conversion/continuation, [the outstanding amount of the aggregate U.S. Revolving
Loan will not exceed remaining U.S. Borrowing Availability/ the outstanding
amount of the Canadian Revolving Loan will not exceed the remaining Canadian
Borrowing Availability] and [(d)] after giving effect to the requested
conversion/continuation, Aggregate Borrowing Availability will not be less than
$40,000,000 or the Dollar Equivalent thereof or Borrowers have delivered to
Agents a Compliance Certificate demonstrating that EBITDA and the Fixed Charge
Coverage
Ratio were at least $70,000,000 or the Dollar Equivalent thereof and 1.1 to 1.0,
respectively, as of the last day of the month ending 30 or fewer days prior to
the proposed date of the requested conversion/continuation [Clauses (a) and/or
(b) may be adjusted or deleted; provided, however, that Agent (or in the case of
Canadian Borrower, Canadian Agent) or Requisite Lenders may require clause (a)
and/or (b) as a condition to funding pursuant to Section 7.2 of the Credit
Agreement] and (ii) reaffirms [the cross-guaranty provisions set forth in
Section 10 of the Credit Agreement and] the granting and continuance of
[Canadian] Agent's Liens, on behalf of itself and Lenders, pursuant to the
Collateral Documents.
UNITED AGRI PRODUCTS, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT 8.1
to
CREDIT AGREEMENT
----------------
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Agreement") is made as of ___________
__, ____ by and between __________________________________ ("Assignor Lender")
and ________________________ ("Assignee Lender") and acknowledged and consented
to by GENERAL ELECTRIC CAPITAL CORPORATION, as agent ("Agent"). All capitalized
terms used in this Agreement and not otherwise defined herein will have the
respective meanings set forth in the Credit Agreement as hereinafter defined.
RECITALS:
--------
WHEREAS, ___________________, a _________ corporation, ______________,
a __________ corporation, and ____________, a _________ corporation ("Credit
Parties"), Agent, Assignor Lender and other Persons signatory thereto as Lenders
have entered into that certain Credit Agreement dated as of November ___, 2003
(as amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement") pursuant to which Assignor Lender has agreed to make certain
Loans to, and incur certain Letter of Credit Obligations for, Borrowers;
WHEREAS, Assignor Lender desires to assign to Assignee Lender [all/a
portion] of its interest in the Loans (as described below), the Letter of Credit
Obligations and the Collateral and to delegate to Assignee Lender [all/a
portion] of its Commitments and other duties with respect to such Loans, Letter
of Credit Obligations and Collateral;
WHEREAS, Assignee Lender desires to become a Lender under the Credit
Agreement and to accept such assignment and delegation from Assignor Lender; and
WHEREAS, Assignee Lender desires to appoint Agent to serve as agent
for Assignee Lender under the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions, and covenants herein contained, Assignor Lender and Assignee Lender
agree as follows:
1. ASSIGNMENT, DELEGATION, AND ACCEPTANCE
1.1 Assignment. Assignor Lender hereby transfers and assigns to Assignee
Lender, without recourse and without representations or warranties of any kind
(except as set forth in Section 3.2), [all/such percentage] of Assignor Lender's
right, title, and interest in the Loans, Letter of Credit Obligations, Loan
Documents and the Collateral as will result in Assignee Lender having as of the
Effective Date (as hereinafter defined) a Pro Rata Share thereof, as follows:
Assignee Lender's Loans Principal Amount Pro Rata Share
----------------------- ---------------- --------------
Revolving Loan $_______________ _____%
1.2 Delegation. Assignor Lender hereby irrevocably assigns and delegates
to Assignee Lender [all/a portion] of its Commitments and its other duties and
obligations as a Lender under the Loan Documents equivalent to the Pro Rata
Shares set forth above.
1.3 Acceptance by Assignee Lender. By its execution of this Agreement,
Assignee Lender irrevocably purchases, assumes and accepts such assignment and
delegation and agrees to be a Lender with respect to the delegated interest
under the Loan Documents and to be bound by the terms and conditions thereof. By
its execution of this Agreement, Assignor Lender agrees, to the extent provided
herein, to relinquish its rights and be released from its obligations and duties
under the Credit Agreement.
1.4 Effective Date. Such assignment and delegation by Assignor Lender and
acceptance by Assignee Lender will be effective and Assignee Lender will become
a Lender under the Loan Documents as of [the date of this Agreement][_____ __,
____] ("Effective Date") and upon payment of the Assigned Amount and the
Assignment Fee (as each term is defined below). [Interest and Fees accrued prior
to the Effective Date are for the account of Assignor Lender, and Interest and
Fees accrued from and after the Effective Date are for the account of Assignee
Lender.]
2. INITIAL PAYMENT AND DELIVERY OF NOTES
2.1 Payment of the Assigned Amount. Assignee Lender will pay to Assignor
Lender, in immediately available funds, not later than 12:00 noon (New York
time) on the Effective Date, an amount equal to its Pro Rata Share of the then
outstanding principal amount of the Loans as set forth above in Section 1.1
[together with accrued interest, fees and other amounts as set forth on Schedule
2.1] (the "Assigned Amount").
2.2 Payment of Assignment Fee. [Assignor Lender and/or Assignee Lender]
will pay to Agent, for its own account in immediately available funds, not later
than 12:00 noon (New York time) on the Effective Date, the assignment fee in the
amount of $3,500 (the "Assignment Fee") as required pursuant to Section 8.1(a)
of the Credit Agreement.
2.3 Execution and Delivery of Notes. Following payment of the Assigned
Amount and the Assignment Fee, Assignor Lender will deliver to Agent the Notes
previously delivered to Assignor Lender for redelivery to Borrowers and Agent
will obtain from Borrowers for delivery to [Assignor Lender and] Assignee
Lender, new executed Notes evidencing Assignee Lender's [and Assignor Lender's
respective] Pro Rata Share[s] in the Loans after giving effect to the assignment
described in Section 1. Each new Note will be issued in the aggregate maximum
principal amount of the [applicable] Commitment [of the Lender to whom such Note
is issued] OR [the Assignee Lender].
3. REPRESENTATIONS, WARRANTIES AND COVENANTS
3.1 Assignee Lender's Representations, Warranties and Covenants. Assignee
Lender hereby represents, warrants, and covenants the following to Assignor
Lender and Agent:
(a) This Agreement is a legal, valid, and binding agreement of
Assignee Lender, enforceable according to its terms;
(b) The execution and performance by Assignee Lender of its duties
and obligations under this Agreement and the Loan Documents will not require any
registration with, notice to, or consent or approval by any Governmental
Authority;
(c) Assignee Lender is familiar with transactions of the kind and
scope reflected in the Loan Documents and in this Agreement;
(d) Assignee Lender has made its own independent investigation and
appraisal of the financial condition and affairs of each Credit Party, has
conducted its own evaluation of the Loans and Letter of Credit Obligations, the
Loan Documents and each Credit Party's creditworthiness, has made its decision
to become a Lender to Borrowers under the Credit Agreement independently and
without reliance upon Assignor Lender or Agent, and will continue to do so;
(e) Assignee Lender is entering into this Agreement in the ordinary
course of its business, and is acquiring its interest in the Loans and Letter of
Credit Obligations for its own account and not with a view to or for sale in
connection with any subsequent distribution; provided, however, that at all
times the distribution of Assignee Lender's property shall, subject to the terms
of the Credit Agreement, be and remain within its control;
(f) No future assignment or participation granted by Assignee Lender
pursuant to Section 8.1 of the Credit Agreement will require Assignor Lender,
Agent, or Borrower to file any registration statement with the Securities and
Exchange Commission or to apply to qualify under the blue sky laws of any state;
(g) Assignee Lender has no loans to, written or oral agreements with,
or equity or other ownership interest in any Credit Party;
(h) Assignee Lender will not enter into any written or oral agreement
with, or acquire any equity or other ownership interest in, any Credit Party
without the prior written consent of Agent; and
(i) As of the Effective Date, Assignee Lender (i) is entitled to
receive payments of principal and interest in respect of the Obligations without
deduction for or on account of any taxes imposed by the United States of America
or any political subdivision
thereof [, (ii) is not subject to capital adequacy or similar requirements under
Section 1.10(a) of the Credit Agreement, (iii) does not require the payment of
any increased costs under Section 1.10(b) of the Credit Agreement, and (iv) is
not unable to fund LIBOR Loans under Section 1.10(b) of the Credit Agreement, ]
and Assignee Lender will indemnify Agent from and against all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, or
expenses that result from Assignee Lender's failure to fulfill its obligations
under the terms of Section 1.11(c) of the Credit Agreement [or from any other
inaccuracy in the foregoing].
3.2 Assignor Lender's Representations, Warranties and Covenants. Assignor
Lender hereby represents, warrants and covenants the following to Assignee
Lender:
(a) Assignor Lender is the legal and beneficial owner of the Assigned
Amount;
(b) This Agreement is a legal, valid and binding agreement of
Assignor Lender, enforceable according to its terms;
(c) The execution and performance by Assignor Lender of its duties
and obligations under this Agreement and the Loan Documents will not require any
registration with, notice to or consent or approval by any Governmental
Authority;
(d) Assignor Lender has full power and authority, and has taken all
action necessary to execute and deliver this Agreement and to fulfill the
obligations hereunder and to consummate the transactions contemplated hereby;
(e) Assignor Lender is the legal and beneficial owner of the
interests being assigned hereby, free and clear of any adverse claim, lien,
encumbrance, security interest, restriction on transfer, purchase option, call
or similar right of a third party; and
(f) This Assignment by Assignor Lender to Assignee Lender complies,
in all material respects, with the terms of the Loan Documents.
4. LIMITATIONS OF LIABILITY
Neither Assignor Lender (except as provided in Section 3.2) nor Agent
makes any representations or warranties of any kind, nor assumes any
responsibility or liability whatsoever, with regard to (a) the Loan Documents or
any other document or instrument furnished pursuant thereto or the Loans, Letter
of Credit Obligations or other Obligations, (b) the creation, validity,
genuineness, enforceability, sufficiency, value or collectibility of any of
them, (c) the amount, value or existence of the Collateral, (d) the perfection
or priority of any Lien upon the Collateral, or (e) the financial condition of
any Credit Party or other obligor or the performance or observance by any Credit
Party of its obligations under any of the Loan Documents. Neither Assignor
Lender nor Agent has or will have any duty, either initially or on a continuing
basis, to make any investigation, evaluation, appraisal of, or any
responsibility or liability with respect to the accuracy or completeness of, any
information provided to Assignee Lender which has been provided to Assignor
Lender or Agent by any Credit Party. Nothing in this Agreement or in the
Loan Documents shall impose upon the Assignor Lender or Agent any fiduciary
relationship in respect of the Assignee Lender.
5. FAILURE TO ENFORCE
No failure or delay on the part of Agent or Assignor Lender in the
exercise of any power, right, or privilege hereunder or under any Loan Document
will impair such power, right, or privilege or be construed to be a waiver of
any default or acquiescence therein. No single or partial exercise of any such
power, right, or privilege will preclude further exercise thereof or of any
other right, power, or privilege. All rights and remedies existing under this
Agreement are cumulative with, and not exclusive of, any rights or remedies
otherwise available.
6. NOTICES
Unless otherwise specifically provided herein, any notice or other
communication required or permitted to be given will be in writing and addressed
to the respective party as set forth below its signature hereunder, or to such
other address as the party may designate in writing to the other.
7. AMENDMENTS AND WAIVERS
No amendment, modification, termination, or waiver of any provision of
this Agreement will be effective without the written concurrence of Assignor
Lender, Agent and Assignee Lender.
8. SEVERABILITY
Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law. In
the event any provision of this Agreement is or is held to be invalid, illegal,
or unenforceable under applicable law, such provision will be ineffective only
to the extent of such invalidity, illegality, or unenforceability, without
invalidating the remainder of such provision or the remaining provisions of the
Agreement. In addition, in the event any provision of or obligation under this
Agreement is or is held to be invalid, illegal, or unenforceable in any
jurisdiction, the validity, legality, and enforceability of the remaining
provisions or obligations in any other jurisdictions will not in any way be
affected or impaired thereby.
9. SECTION TITLES
Section and Subsection titles in this Agreement are included for
convenience of reference only, do not constitute a part of this Agreement for
any other purpose, and have no substantive effect.
10. SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
11. APPLICABLE LAW
THIS AGREEMENT WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
THAT STATE.
12. COUNTERPARTS
This Agreement and any amendments, waivers, consents, or supplements
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which, when so executed and delivered, will be
deemed an original and all of which shall together constitute one and the same
instrument.
[Signature page follows]
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first written above.
ASSIGNEE LENDER: ASSIGNOR LENDER:
--------------------------------------- ---------------------------------------
By: By:
-------------------------------- --------------------------------
Title: Title:
-------------------------------- --------------------------------
Notice Address: Notice Address:
--------------------------------------- ---------------------------------------
--------------------------------------- ---------------------------------------
--------------------------------------- ---------------------------------------
ACKNOWLEDGED AND CONSENTED TO:
GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent
By:
--------------------------------
Title:
--------------------------------
UNITED AGRI PRODUCTS, INC.,
as Borrower Representative
By:
--------------------------------
Title:
--------------------------------
SCHEDULE 2.1
Assignor Lender's Loans
Principal Amount
----------------
Revolving Loan $
-------------------
Subtotal $
-------------------
Accrued Interest $
-------------------
Unused Line Fee $
===================
Other + or -$ $
-------------------
Total $
===================
All determined as of the Effective Date.