EXHIBIT 10.16
EXECUTION COPY
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AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
Dated as of March 31, 2004
By and Among
LOL FARMLAND FEED SPV, LLC
AS SELLER,
LAND O'LAKES FARMLAND FEED LLC
AS INITIAL SERVICER,
COBANK, ACB, AND THE OTHER
PURCHASERS FROM TIME TO TIME
PARTY HERETO
And
COBANK, ACB,
AS ADMINISTRATOR
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TABLE OF CONTENTS
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ARTICLE I. PURCHASES AND REINVESTMENTS ............................................... 2
SECTION 1.1 Agreement to Purchase; Limits on Purchasers'
Obligations .................................................. 2
SECTION 1.2 Purchase Procedures; Assignment of Purchasers'
Interests .................................................... 2
SECTION 1.3 Reinvestments of Certain Collections; Payment of
Remaining Collections ........................................ 3
SECTION 1.4 Receivable Interest ...................................................... 4
SECTION 1.5 Voluntary Termination or Reduction of Facility
Limit ........................................................ 5
ARTICLE II. COMPUTATIONAL RULES ...................................................... 5
SECTION 2.1 Computation of Capital ........................................... 5
SECTION 2.2. Computation of Concentration Limit .............................. 6
SECTION 2.3. Computation of Earned Discount .................................. 6
SECTION 2.4 Estimates of Earned Discount Rate, Fees, Etc ..................... 6
ARTICLE III. SETTLEMENTS ............................................................. 7
SECTION 3.1. Purchase and Settlement Procedures .............................. 7
SECTION 3.2. Deemed Collections; Reduction of Capital, Etc ................... 9
SECTION 3.3. Payments and Computations, Etc .................................. 11
ARTICLE IV. FEES AND YIELD PROTECTION ................................................ 11
SECTION 4.1. Fees ............................................................ 11
SECTION 4.2. Yield Protection ................................................ 12
SECTION 4.3. Funding Losses .................................................. 14
SECTION 4.4. Prepayments ..................................................... 14
ARTICLE V. CONDITIONS TO PURCHASES ................................................... 14
SECTION 5.1. Conditions Precedent to Initial Purchase and Effectiveness....... 14
SECTION 5.2. Conditions Precedent to All Purchases and
Reinvestments ................................................ 17
ARTICLE VI. REPRESENTATIONS AND WARRANTIES ........................................... 17
SECTION 6.1. Representations and Warranties of Seller ........................ 17
SECTION 6.2. Representations and Warranties of Servicer ...................... 20
ARTICLE VII. GENERAL COVENANTS ....................................................... 22
SECTION 7.1. Affirmative Covenants ................................................... 22
SECTION 7.2. Reporting Requirements .................................................. 25
SECTION 7.3. Negative Covenants ...................................................... 27
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SECTION 7.4. Separate Existence ....................................... 29
ARTICLE VIII. ADMINISTRATION AND COLLECTION ................................... 32
SECTION 8.1. Designation of Servicer and Sub-Servicers ................ 32
SECTION 8.2. Duties of Servicer ....................................... 33
SECTION 8.3. Rights of Administrator .................................. 36
SECTION 8.4. Responsibilities of Seller ............................... 37
SECTION 8.5. Further Action Evidencing Purchases and
Reinvestments ......................................... 37
SECTION 8.6. Application of Collections ............................... 38
ARTICLE IX. SECURITY INTEREST ................................................. 38
SECTION 9.1. Grant of Security Interest ............................... 38
SECTION 9.2. Further Assurances ....................................... 39
SECTION 9.3. Remedies ................................................. 39
ARTICLE X. TERMINATION EVENTS ................................................. 39
SECTION 10.1. Termination Events ...................................... 39
SECTION 10.2. Remedies ................................................ 42
ARTICLE XI. THE ADMINISTRATOR ................................................. 42
SECTION 11.1. Authorization ........................................... 42
SECTION 11.2. Administrator's Reliance, Etc ........................... 43
SECTION 11.3. CoBank and Affiliates ................................... 44
ARTICLE XII. ASSIGNMENT OF AND PARTICIPATIONS IN
PURCHASERS' INTERESTS ......................................................... 44
SECTION 12.1. Restrictions on Assignments; Impact on
Patronage ............................................. 44
SECTION 12.2. Rights of Assignee ...................................... 45
ARTICLE XIII. INDEMNIFICATION ................................................. 45
SECTION 13.1. Indemnities ............................................. 45
ARTICLE XIV. MISCELLANEOUS .................................................... 48
SECTION 14.1. Amendments, Etc ......................................... 48
SECTION 14.2. Notices, Etc ............................................ 48
SECTION 14.3. No Waiver; Remedies ..................................... 49
SECTION 14.4. Binding Effect; Survival ................................ 49
SECTION 14.5. Costs, Expenses and Taxes ............................... 49
SECTION 14.6. No Proceedings .......................................... 50
SECTION 14.7. Confidentiality of Program Information .................. 50
SECTION 14.8. Confidentiality of Originator Information ............... 52
SECTION 14.9. Captions and Cross References ........................... 53
SECTION 14.10. Integration ............................................ 54
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SECTION 14.11. Governing Law .......................................... 54
SECTION 14.12. Waiver Of Jury Trial ................................... 54
SECTION 14.13. Consent To Jurisdiction; Waiver Of Immunities .......... 54
SECTION 14.14. Execution in Counterparts .............................. 55
SECTION 14.15. No Recourse Against Other Parties ...................... 00
XXXXXXXX
XXXXXXXX A Definitions
Schedule I Government Receivables (if any)
Schedule II Contract Standards (if any)
SCHEDULES
Schedule 1 Purchasers and Pro Rata Shares
Schedule 6.1(m) List of Offices of Seller where Records Are Kept
Schedule 6.1(n) List of Lockbox Banks
Schedule 7.1(g) Initial Credit and Collection Policies
Schedule 14.2 Notice Addresses
EXHIBITS
Exhibit 1.2(a) Form of Purchase Notice
Exhibit 3.1(a)-l Form of Servicer Report
Exhibit 5.1(f) Form of Lockbox Agreement
Exhibit 7.2(a) Form of Weekly Report
Exhibit 7.4 Additional Corporate Separateness Assumptions,
Statements and Representations
AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
Dated as of March 31, 2004
PREAMBLE
AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT, dated as of March
31, 2004, (this "Agreement"), by and among LOL FARMLAND FEED SPV, LLC, a
Delaware limited liability company, as Seller ("Seller"), LAND O'LAKES FARMLAND
FEED LLC, a Delaware limited liability company ("Feed"), as initial Servicer
("Servicer"), COBANK, ACB, a federally chartered instrumentality of the United
States ("CoBank"), and any other Persons that may, from time to time, be party
hereto as Purchasers (each, a "Purchaser"), and CoBank as administrator for the
Purchasers (in such capacity, "Administrator"). Unless otherwise indicated,
capitalized terms used in this Agreement are defined in, and interpretive rules
that apply are contained in, Appendix A.
RECITALS
1. Seller is a limited-purpose, bankruptcy-remote Delaware limited
liability company formed by Feed, for the purpose of purchasing, and accepting
contributions of, Receivables and Related Rights (as defined in the Purchase and
Sale Agreement) originated by Feed and the other Originators in the ordinary
course of their respective businesses. Feed owns one hundred percent (100%) of
the outstanding equity of Seller.
2. Seller, Feed, as "Servicer", CoBank, in its capacity as
administrator, and the various other purchasers from time to time party thereto,
are parties to the
Receivables Purchase Agreement dated as of December 18, 2001
(as heretofore amended, supplemented or otherwise modified, the "Existing
Receivables Purchase Agreement").
3. The parties hereto desire to amend and restate the Existing
Receivables Purchase Agreement on the terms and conditions set forth herein.
4. Seller has, and expects to have, Pool Receivables in which Seller
intends to sell an undivided interest. Seller has requested that the Purchasers,
and each Purchaser has agreed that it shall, subject to and upon the terms and
conditions contained in this Agreement, engage in purchases of their respective
Pro Rata Shares of such undivided interest, referred to herein as the Receivable
Interest, from Seller from time to time during the term of this Agreement.
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5. Seller and the Purchasers also desire that, subject to the terms and
conditions of this Agreement, certain of the daily Collections in respect of the
Receivable Interest be reinvested in Pool Receivables, which reinvestment shall
constitute part of the Receivable Interest.
6. Feed has been requested, and is willing, to act as initial Servicer.
7. CoBank has been requested, and is willing, to act as Administrator.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I. PURCHASES AND REINVESTMENTS
SECTION 1.1 AGREEMENT TO PURCHASE; LIMITS ON PURCHASERS' OBLIGATIONS.
Subject to and upon the terms and conditions of this Agreement, from time to
time prior to the Termination Date, (a) Seller may request that each Purchaser,
ratably in accordance with such Purchaser's Pro Rata Share, purchase from Seller
an undivided ownership interest in the Pool Assets specified in each applicable
Purchase Notice and (b) each Purchaser severally agrees to purchase its
respective Pro Rata Share of such undivided ownership interest in the Pool
Assets (each being a "Purchase"); provided that no Purchase shall be funded by
the Purchasers if, after giving effect thereto, either (y) the then Capital
would exceed an amount equal to $200,000,000, as such amount may be decreased
from time to time as provided in Section 1.5 (the "Facility Limit"), or (z) the
Receivable Interest would exceed 100% (the "Allocation Limit"); and provided
further that each Purchase made pursuant to this Section 1.1 shall require a
funding of Capital of at least $1,000,000.
SECTION 1.2 PURCHASE PROCEDURES; ASSIGNMENT OF PURCHASERS' INTERESTS.
(a) Notice of Purchase. Each Purchase from Seller shall be made by the
Purchasers upon notice from Seller to the Administrator received by the
Administrator not later than 2:00 P.M. (Denver,
Colorado time) on the Business
Day next preceding the Business Day of such proposed Purchase (the "Purchase
Date"). Each such notice of a proposed Purchase shall be substantially in the
form of Exhibit 1.2(a) (each a "Purchase Notice"), and shall specify the desired
amount of, and Purchase Date for, such Purchase; provided, that Seller may give
only one (1) Purchase Notice during any 7-day period, and such Purchase Notice
must specify a Purchase amount of at least $1,000,000, or an integral multiple
of $100,000 in excess thereof.
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(b) Funding of Purchases. On each Purchase Date, each Purchaser shall,
upon satisfaction of the applicable conditions set forth in Article V, fund such
Purchase by making the full amount of its Pro Rata Share of such Purchase
available to Administrator at Administrator's Office in immediately available
funds, after receipt by Administrator of such funds, Administrator will make
such funds immediately available to Seller at such office.
(c) Sale of Receivable Interest. In consideration of the Capital funded
by Purchaser on each Purchase Date, Seller hereby sells, assigns and transfers
to Administrator, for the ratable benefit of the Purchasers, the Receivable
Interest.
SECTION 1.3 REINVESTMENTS OF CERTAIN COLLECTIONS; PAYMENT OF REMAINING
COLLECTIONS.
(a) On the close of business on each Business Day during the period
from date hereof until the Termination Date, Servicer shall, out of all
Collections received on such day:
(i) determine the portion of Collections attributable on such
day to the Receivable Interest by multiplying (A) the amount of all
Collections received on such day, times (B) the Receivable Interest;
(ii) out of the portion of Collections allocated to the
Receivable Interest pursuant to clause (a)(i), (A) if a Termination
Event shall have occurred and be continuing, set aside and deposit into
the Administrator's Account in trust for the Purchasers or (B) in all
other cases, otherwise provide that the Servicer will have available to
it on the next Settlement Date or as required by Section 3.1(e), an
amount equal to the sum of the estimated amount of Yield accrued and
unpaid in respect of the Capital (based on rate information provided by
the Administrator pursuant to Section 2.4), the accrued Fees, all other
amounts due to the Purchasers, Administrator, the Affected Parties or
the Indemnified Parties hereunder (other than the Capital) and the
Purchasers' Share of the Servicer's Fee (in each case, accrued through
such day) and not so previously set aside and deposited into the
Administrator's Account or its availability on the next Settlement Date
provided for;
(iii) apply the Collections allocated to the Receivable
Interest pursuant to clause (a)(i), and not set aside or its
availability provided for pursuant to clause (ii), to the purchase from
Seller of ownership interests in Pool Assets (each such purchase being
a "Reinvestment"); provided that (A) if the Excess Amount exceeds zero,
then Servicer shall not reinvest, but shall set aside and deposit into
the Administrator's Account for the benefit of the Purchasers, a
portion of such Collections which, together with other
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Collections previously set aside and then so held, shall equal the
Excess Amount; and (B) if the conditions precedent to Reinvestment in
Section 5.2 are not satisfied, then Servicer shall not reinvest any of
such Collections;
(iv) pay to Seller (A) the portion of Collections not
allocated to the Receivable Interest pursuant to clause (i), less the
Seller's Share of the Servicer's Fee, (B) the amounts, if any, to be
made available to the Servicer on the next Settlement Date pursuant to
clause (ii)(B) and (C) the Collections applied to Reinvestment pursuant
to clause (iii); and
(v) out of the portion of Collections not allocated to the
Receivable Interest pursuant to clause (i), pay to the Servicer the
Seller's Share of the Servicer's Fee accrued through such day.
(b) Unreinvested and Undistributed Collections. Servicer shall set
aside and deposit into the Administrator's Account in trust for the benefit of
the Purchasers all Collections allocated to the Receivables Interest which
pursuant to clause (iii) of Section 1.3(a) may not be reinvested in Pool Assets.
If, prior to the date when such Collections are required to be paid to the
Administrator pursuant to Section 3.1, the amount of Collections set aside
pursuant to clause (iii) of Section 1.3(a) exceeds the Excess Amount, if any,
and the conditions precedent to Reinvestment set forth in Section 5.2 are
satisfied, then the Servicer shall apply such Collections (or, if less, a
portion of such Collections equal to the amount of such excess) to the making of
a Reinvestment.
SECTION 1.4 RECEIVABLE INTEREST.
(a) Components of Receivable Interest. On any date, the Receivable
Interest will represent the Purchasers' combined undivided percentage ownership
interest in (i) all then-outstanding Pool Receivables, (ii) all Related Security
and Related Rights with respect to such Pool Receivables, (iii) all of Seller's
right and claims under the Purchase and Sale Agreement, (iv) all Collections
with respect to, and other proceeds of, the foregoing as at such date, (v) all
lockboxes and lockbox or collection accounts into which Collections of Pool
Receivables are or may be deposited, and all investments therein, and (vi) all
books and records (including computer disks, tapes and software) evidencing or
relating to any of the foregoing, in each case, whether now owned by Seller or
hereafter acquired or arising, and wherever located (all of the foregoing,
collectively referred to as "Pool Assets").
(b) Computation of Receivable Interest. On any date, the "Receivable
Interest" will be equal to a percentage, expressed as the following fraction:
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C + RR
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NPB
where:
C = the then Capital;
RR = the then Required Reserves; and
NPB = the then Net Pool Balance;
provided, however, that during the period from and after the Termination Date
but prior to the Final Payout Date, the Receivable Interest will be one hundred
(100%), and that from and after the Final Payout Date the Receivable Interest
will be zero percent (0%).
(c) Frequency of Computation. The Receivable Interest shall be computed
as of the Cut-Off Date immediately preceding each Settlement Period. In
addition, the Administrator may require Servicer to provide a report in such
form as may be designated by the Administrator for purposes of computing the
Receivable Interest as of any other date, and the Servicer agrees to do so
within two (2) Business Days after its receipt of the Administrator's request.
SECTION 1.5 VOLUNTARY TERMINATION OR REDUCTION OF FACILITY LIMIT.
Seller may, upon at least thirty (30) days' prior written notice to the
Administrator or, at any time following Feed's receipt of a Successor Notice,
immediately upon written notice to the Administrator, terminate in whole or
reduce in part the unused portion of the Facility Limit; provided, that each
partial reduction at the Facility Limit shall be in an amount equal to
$1,000,000 or an integral multiple of $100,000 in excess thereof.
ARTICLE II. COMPUTATIONAL RULES
SECTION 2.1 COMPUTATION OF CAPITAL. In making any determination of
Capital, the following rules shall apply:
(a) Capital shall not be considered reduced by any allocation, setting
aside or distribution of any portion of Collections unless such Collections
shall have been actually delivered to the Administrator, for the benefit of the
Purchasers, pursuant hereto for application to the Capital; and
(b) Capital shall not be considered reduced by any distribution of any
portion of Collections if at any time such distribution is rescinded or must
otherwise be returned for any reason.
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SECTION 2.2. COMPUTATION OF CONCENTRATION LIMIT. Except as otherwise
consented to in writing in the sole reasonable discretion of the Administrator
and the Required Purchasers, in the case of any Obligor that is an Affiliate of
any other Obligor, the Concentration Limit and the aggregate Unpaid Balance of
Pool Receivables of such Obligors shall be calculated as if such Obligors were
one Obligor.
SECTION 2.3. COMPUTATION OF EARNED DISCOUNT.
(a) Yield shall accrue on the outstanding Capital on each day during
any Settlement Period at the applicable Yield Rate. On each Settlement Date, the
Seller shall pay from Collections in accordance with Section 3.1 to the
Administrator, for the account of the Purchasers in accordance with their
respective Pro Rata Shares, an amount equal to the accrued and unpaid Yield with
respect to the immediately preceding Settlement Period.
(b) In making any determination of Yield, the following rules shall
apply:
(i) no provision of this Agreement shall require payment or
permit the collection of Yield in excess of the maximum permitted by Applicable
Law (it being agreed that, if the Yield would be in excess of such maximum but
for this provision, the amount of Yield shall be reduced to the greatest amount
that does not exceed such maximum); and
(ii) Yield for any period shall not be considered paid by any
distribution if at any time such distribution is rescinded or must otherwise be
returned for any reason.
SECTION 2.4 ESTIMATES OF EARNED DISCOUNT RATE, FEES, ETC. For purposes
of determining the amounts required to be set aside by Servicer pursuant to
Section 1.3, the Administrator shall notify Servicer from time to time of the
Yield Rate applicable to the Capital as elected by Seller and the rates at which
Fees and other amounts are accruing hereunder. It is understood and agreed that
(i) the Yield Rate may change from time to time, (ii) certain rate information
provided by the Administrator to Servicer shall be based upon the
Administrator's good faith estimate, (iii) the amount of Yield actually accrued
with respect to the Capital during any Settlement Period may exceed, or be less
than, the amount set aside with respect thereto by Servicer, and (iv) the amount
of Fees or other payables accrued hereunder with respect to any Settlement
Period may exceed, or be less than, the amount set aside with respect thereto by
Servicer. Failure to set aside any amount so accrued shall not relieve Servicer
of its obligation to remit Collections to the Administrator with respect to such
accrued amount, as and to the extent provided in Section 3.1. In the event that
prior to the commencement of any Settlement Period the Administrator shall
determine that adequate and reasonable
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methods do not exist for ascertaining the LIBOR Rate, then the Yield Rate for
such Settlement Period shall be the Alternate Base Rate.
ARTICLE III. SETTLEMENTS
SECTION 3.1. PURCHASE AND SETTLEMENT PROCEDURES. The parties hereto
will take the following actions with respect to each Purchase Date and each
Settlement Date:
(a) Servicer Report. Except as provided in the next sentence with
respect to the initial Purchase hereunder, on or before the Business Day (each,
a "Reporting Date") preceding each Settlement Date, as the case may be, Servicer
shall deliver to the Administrator a report containing the information described
in Exhibit 3.1(a)-l (each, a "Servicer Report"). Notwithstanding the foregoing,
for administrative convenience in connection with the initial Purchase
hereunder, the initial Reporting Date shall be February 27, 2004, and the
initial Purchase Date shall occur on March 31, 2004 (the "Initial Purchase
Date").
(b) Yield, Fees and Other Amounts Due. Five (5) Business Days after the
end of each Settlement Period, the Administrator shall notify Servicer of (i)
the amount of Yield that will have accrued in respect of the Capital as of the
Settlement Date relating to such Settlement Period and (ii) all Fees and other
amounts that will have accrued or otherwise have become payable (other than
Capital) by Seller under this Agreement on the next Settlement Date.
(c) Settlement Date Procedures - Reinvestment Period. On each
Settlement Date prior to the Termination Date, Servicer shall distribute from
Collections set aside or applied (to the extent applied in violation of the
proviso to Section 1.3(a)(iii)) pursuant to Sections 1.3(a)(i) through (iii)
during the immediately preceding Settlement Period the following amounts in the
following order:
(1) to the Administrator, for the account of the Purchasers in
accordance with their respective Pro Rata Shares, an amount equal to
the Yield accrued and unpaid during such Settlement Period, plus any
previously accrued Yield not paid on a prior Settlement Date or
pursuant to Section 3.1(e), which amount shall be distributed by the
Administrator to the Purchasers for application to such Yield;
(2) to the Administrator, an amount equal to the Fees accrued during
such Settlement Period, plus any previously accrued amounts described
in this clause (2) not paid on a prior Settlement Date or pursuant to
Section 3.1(e), which amount shall be distributed by the Administrator
to all Persons to whom payable;
(3) to the Servicer, an amount equal to the Purchasers' Share of the
Servicer's Fee accrued during such Settlement Period, plus any
previously accrued Purchasers' Share of the Servicer's Fee not paid on
a prior Settlement Date or pursuant to Section 3.1(e);
(4) to the Administrator, all other amounts (other than Capital) then
due under this Agreement or the other Transaction Documents to the
Administrator, the Purchasers, the Affected Parties or the Indemnified
Parties; and
(5) to the Administrator, for the account of the Purchasers in
accordance with their respective Pro Rata Shares, an amount equal to
the Excess Amount as of the Reporting Date, if any, which amount shall
be distributed by the Administrator to the Purchasers for application
to their respective Pro Rata Shares of the Capital.
On or as of any Purchase Date hereunder, the full amount of any such payments
and/or distributions required to be made on the next succeeding Settlement Date
(as computed by the Administrator in its reasonable judgment), shall, for
purposes of any computations required pursuant to Section 5.2(b) for determining
Seller's eligibility to effect any Purchase hereunder on such Purchase Date, be
given pro forma effect and be included in any such computations as if made prior
to the Purchase reflected in the applicable Purchase Notice.
(d) Settlement Period Procedure - Termination Period. On each Business
Day during the Termination Period, Servicer shall, immediately upon receipt or
deemed receipt thereof, deposit in a Lockbox Account, all Collections received
or deemed received pursuant to Section 3.2 on such Business Day and all
Collections so received or deemed received during each Settlement Period during
the Termination Period shall be distributed by the Servicer or the Administrator
(to the extent that such funds are in its possession) on each Settlement Date in
the following amounts and in the following order:
(1) to the Administrator, for the account of the Purchasers in
accordance with their respective Pro Rata Shares, an amount equal to
the Yield accrued during such Settlement Period, plus any previously
accrued Yield not paid on a prior Settlement Date, which amount shall
be distributed by the Administrator to the Purchasers for application
to such Yield;
(2) to the Administrator, an amount equal to the Fees accrued during
such Settlement Period, plus any previously accrued Fees not paid on a
prior Settlement Date which amount shall be distributed by Servicer to
all Persons to whom payable;
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(3) to the Servicer, an amount equal to the Purchasers' Share of the
Servicer's Fee accrued during such Settlement Period, plus any
previously accrued Purchasers' Share of the Servicer's Fee not paid on
a prior Settlement Date;
(4) to the Administrator, for the account of the Purchasers in
accordance with their respective Pro Rata Shares, an amount equal to
the remaining Purchasers' Share of Collections, until the Capital is
reduced to zero, which amount shall be distributed by the Administrator
to the Purchasers for application to their respective Pro Rata Shares
of the Capital;
(5) to the Administrator, all other amounts (other than Capital) then
due under this Agreement and the other Transaction Documents to the
Administrator, the Purchasers, the Affected Parties or the Indemnified
Parties; and
(6) to the Seller, any remaining amounts.
(e) Delayed Payment. If on any day prior to the Termination Date,
because Collections during the relevant Settlement Period were less than the
aggregate amounts payable, Servicer does not make any payment otherwise
required, the Servicer shall set aside and hold Collections in respect of the
Receivable Interest until sufficient amounts have been collected to pay the
shortfall and will on the next Business Day pay to the Administrator the amount
of such shortfall and no Reinvestment shall be permitted hereunder until such
amount payable has been paid in full.
SECTION 3.2. DEEMED COLLECTIONS; REDUCTION OF CAPITAL, ETC.
(a) Deemed Collections. If on any day (any of the events or
circumstances described in the succeeding clauses (i), (ii) or (iii) being
referred to herein as a "Deemed Collection"):
(i) a Dilution occurs or the Unpaid Balance of any Pool Receivable is
less than the amount included in calculating the Net Pool Balance for
purposes of any Servicer Report for any other reason; or
(ii) any of the representations or warranties of Seller set forth in
Section 6.1(k) or (o) with respect to any Pool Receivable were not true
when made with respect to any Pool Receivable, or any of the
representations or warranties of Seller set forth in Section 6.1(k) or
(o) are no longer true with respect to any Pool Receivable; or
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(iii) without duplication, Seller receives a Deemed Collection pursuant
to the Purchase and Sale Agreement;
then, on such day, Seller shall be deemed to have received a Collection
of such Pool Receivable:
(xi) in the case of clause (a)(i) above, in the amount of such
Dilution or the difference between the actual Unpaid Balance
and the amount included in calculating such Net Pool Balance,
as applicable; and
(xii) in the case of clause (a)(ii) above, in the amount of the
Unpaid Balance of such Pool Receivable; and
(xiii) in the case of clause (a)(iii) above, in the amount of such
Deemed Collection.
In the event that Seller has paid to the Administrator, for the account of the
Purchasers, the Purchasers' Share of the Unpaid Balance of any Receivable
pursuant to this Section 3.2(a), the Seller shall acquire the Purchasers'
interest in such Receivable and all Related Rights with respect thereto, without
recourse, representation or warranty of any type or kind by the Purchaser.
(b) Seller's Optional Reduction of Capital. Seller may at any time (but
not more than once in any seven (7)-day period) elect to reduce the Capital as
follows:
(i) Seller shall give the Administrator at least two (2) Business Days'
prior written notice of such reduction (including the amount of such
proposed reduction and the proposed date on which such reduction will
commence);
(ii) on the proposed date of commencement of such reduction and on each
day thereafter, Servicer shall refrain from reinvesting Collections
pursuant to Section 1.3 until the amount thereof not so reinvested
shall equal the desired amount of reduction, and
(iii) Servicer shall deposit such Collections into the Administrator's
Account in trust for the Purchasers, pending receipt by the
Administrator of the full amount of such requested Capital reduction,
whereupon such funds shall be applied to so reduce the Capital;
provided that,
(A) the amount of any such reduction shall be not
less than $1,000,000 or an integral multiple of $100,000 in
excess thereof, and
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the Capital after giving effect to such reduction shall be not
less than $15,000,000 (unless Capital shall thereby be reduced
to zero); and
(B) Seller shall use reasonable efforts to attempt to
choose a reduction amount, and the date of commencement
thereof, so that such reduction shall commence and conclude in
the same Settlement Period.
SECTION 3.3. PAYMENTS AND COMPUTATIONS, ETC.
(a) Payments. All amounts to be paid or deposited by Seller or Servicer
to the Administrator or any other Person (other than to Seller or Servicer)
hereunder (other than amounts payable under Section 4.2) shall be paid or
deposited in accordance with the terms hereof no later than 2:00 P.M. (Denver,
Colorado time) on the day when due (with written notice of such payment or
deposit to be given to the Administrator by not later than 11:00 A.M. (Denver,
Colorado time) on such day) in lawful money of the United States of America in
immediately available funds to the Administrator at ABA# 000000000, account #
00000000; Attention: Feed (the "Administrator's Account"). Any and all payments
by or on account of Seller hereunder or under any other Transaction Document
shall be made free and clear of, and without deduction for, any taxes or other
charges of any type or kind; provided that if Seller shall be required to deduct
any taxes or other charges of any type or kind from such payments, then (i) the
sum payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section) the Administrator or Purchaser (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) Seller shall make such deductions and (iii) Seller shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
Applicable Law.
(b) Late Payments. Seller or Servicer, as applicable, shall, to the
extent permitted by law, pay to the Purchasers or the Administrator, as the case
may be, interest on all amounts not paid or deposited by it when such amount is
due hereunder at the Default Rate, payable on demand, provided, however, that
such interest shall not at any time exceed the maximum rate permitted by
Applicable Law.
(c) Method of Computation. All computations of Yield, interest and any
fees payable hereunder shall be made on the basis of a year of 360 days for the
actual number of days (including the first day but excluding the last day)
elapsed.
ARTICLE IV. FEES AND YIELD PROTECTION
SECTION 4.1. FEES. (a) Seller shall pay to the Administrator and the
Purchasers the Fees in the amounts and at the times set forth in the fee letter,
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dated September 23, 2003, from the Administrator (as amended or supplemented
from time to time, the "Fee Letter").
(b) During the period from and including the date hereof to the date on
which the Termination Period begins, a commitment fee (a "Commitment Fee") shall
be payable to the Administrator for the account of Purchasers in accordance with
their respective Pro Rata Shares, payable monthly in arrears on each Settlement
Date and computed at the rate of .375% per annum (37.5 basis points) on the
average amount of the difference between the Facility Limit and the amount of
Capital during each Settlement Period ending prior to the Settlement Date on
which the Commitment Fee is paid, commencing on the first such Settlement Date
to occur after the date hereof.
SECTION 4.2. YIELD PROTECTION.
(a) If (i) Regulation D or (ii) any Regulatory Change occurring after
the date hereof:
(A) shall subject an Affected Party or any of their
interests to any tax, duty or other charge with respect to any
Receivable Interest owned by or funded by it, or any
obligations or right to make Purchases or Reinvestments or to
provide funding therefor, or shall change the basis of
taxation of payments to the Affected Party of any Capital or
Yield owned by, owed to or funded in whole or in part by it or
any other amounts due under this Agreement in respect of the
Receivable Interest owned by or funded by it or its
obligations or rights, if any, to make Purchases or
Reinvestments or to provide funding therefor (except for
franchise taxes or changes in the rate of tax on the overall
net income of such Affected Party); or
(B) shall impose, modify or deem applicable any
reserve (including, without limitation, any reserve imposed by
the Federal Reserve Board, special deposit, compulsory loan or
similar requirement against assets of any Affected Party,
deposits or obligations with or for the account of any
Affected Party or with or for the account of any affiliate (or
entity deemed by the Federal Reserve Board to be an affiliate)
of any Affected Party, or credit extended by any Affected
Party, but excluding any reserve, special deposit or similar
requirement included in the determination of Yield; or
(C) shall change the amount of capital maintained or
required or requested or directed to be maintained by any
Affected Party; or
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(D) shall impose any other condition affecting any
Receivable Interest owned or funded in whole or in part by any
Affected Party, or its obligations or rights, if any, to make
Purchases or Reinvestments or to provide funding therefor; or
(E) shall change the rate for, or the manner in which
the Federal Deposit Insurance Corporation (or a successor
thereto) assesses, deposit insurance premiums or similar
charges;
and the result of any of the foregoing is;
(x) to increase the cost to or to impose a cost on an
Affected Party funding or making or maintaining any
Purchases or Reinvestments, any purchases,
reinvestments, or loans or other extensions of credit
under any Transaction Document, or any commitment of
such Affected Party with respect to any of the
foregoing;
(y) to reduce the amount of any sum received or
receivable by an Affected Party under this Agreement,
or under any Transaction Document; or
(z) to reduce the rate of return on the capital of an
Affected Party as a consequence of its obligations
hereunder or under any Transaction Document or
arising in connection herewith to a level below that
which such Affected Party could otherwise have
achieved;
then within thirty (30) days after demand by such Affected Party (which demand
shall be accompanied by a statement setting forth in reasonable detail the basis
for, calculation of, and amount of such additional costs or reduced amount
receivable; provided, however, that no Affected Party shall be required to
disclose any confidential or tax planning information in any such statement),
Seller shall pay directly to such Affected Party such additional amount or
amounts as such Affected Party reasonably determines will compensate such
Affected Party for such additional or increased cost or such reduction, but
without duplication of any other similar additional amounts due under any other
Transaction Document.
(b) Each Affected Party will use reasonable efforts to notify Seller
and the Administrator as soon as practicable after knowledge of the occurrence
of any event of which it has knowledge which will entitle such Affected Party to
compensation pursuant to this Section 4.2; provided however, that no failure to
give or delay in giving such notification shall adversely affect the rights of
any Affected Party to such compensation and provided further, that no Affected
Party shall be entitled to
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such compensation retroactively for a period of more than ninety (90) days prior
to the date of such notice.
(c) In determining any amount provided for or referred to in this
Section 4.2, an Affected Party may use any reasonable averaging and attribution
methods that it shall deem applicable. Any Affected Party when making a claim
under this Section 4.2 shall submit to Seller a statement as to such increased
cost or reduced return (including a calculation thereof in reasonable detail),
which statement shall, in the absence of demonstrable error, be conclusive and
binding upon Seller.
SECTION 4.3. FUNDING LOSSES. In the event that any Affected Party shall
incur any loss or expense (including any LIBOR Rate breakage costs or any other
loss or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Affected Party to make or maintain any
funding with respect to the Receivable Interest) as a result of (i) any
settlement with respect to any portion of Capital funded by such Affected Party
being made on any day other than the scheduled last business day of an
applicable Settlement Period with respect thereto, or (ii) any Purchase not
being made in accordance with a request therefor under Section 1.2, then,
immediately upon demand from the Administrator to Seller, Seller shall pay to
the Administrator for the account of such Affected Party, the amount of such
loss or expense. Such written notice (which shall include calculations in
reasonable detail) shall, in the absence of demonstrable error, be conclusive
and binding upon the Seller.
SECTION 4.4. PREPAYMENTS. In the event the Seller desires to reduce the
amount of Capital outstanding on a date other than a Settlement Date other than
as provided in Section 3.2(b), the Seller may deliver the amount of such Capital
to the Administrator, and the Administrator agrees to invest the amount of such
Capital as directed by the Seller for the period between the date of such
prepayment and the next succeeding Settlement Date. On the next succeeding
Settlement Date, interest and other amounts, if any, earned on the amount of
Capital so invested at the direction of the Seller will be credited toward any
amounts due from the Seller on such next succeeding Settlement Date.
Notwithstanding the terms of this Section 4.4, the Seller shall remain liable
(on the next succeeding Settlement Date) for the amount, if any, by which the
Yield accruing on the outstanding Capital through the next succeeding Settlement
Date exceeds the amount, if any, of interest and other amounts earned upon
investment of such prepaid amounts by the Administrator (at the direction of the
Seller) as aforesaid.
ARTICLE V. CONDITIONS TO PURCHASES
SECTION 5.1. CONDITIONS PRECEDENT TO INITIAL PURCHASE AND
EFFECTIVENESS. Each of the initial Purchase hereunder and the effectiveness of
this Agreement is subject to the condition precedent that the Administrator
shall have
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received, on or before the date of such Purchase, the following, each (unless
otherwise indicated) dated such date and in form and substance reasonably
satisfactory to the Administrator:
(a) Good standing (and foreign qualification, as applicable)
certificates for each Originator and Seller issued by the Secretaries of State
of the jurisdictions of their incorporation or formation and their respective
principal places of business;
(b) A certificate of the Secretaries of Feed and Seller in form and
substance reasonably satisfactory to the Administrator certifying (i) a copy of
the resolutions of its Board of Directors approving this Agreement and the other
Transaction Documents to be delivered by it hereunder and the transactions
contemplated hereby; (ii) the names and true signatures of the officers
authorized on its behalf to sign this Agreement and the other Transaction
Documents to be delivered by it hereunder (on which certificate the
Administrator and the Purchasers may conclusively rely until such time as the
Administrator shall receive from Feed or Seller, as the case may be, a revised
certificate meeting the requirements of this subsection (b)); (iii) a copy of
its by-laws, operating agreement or equivalent organizational document(s); and
(iv) all documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to this Agreement and the other Transaction
Documents;
(c) The Certificate of Formation of each of Seller and Feed, duly
certified by the Secretary of State of the jurisdiction of its formation, as of
a recent date reasonably acceptable to Administrator;
(d) Acknowledgment copies or time-stamped receipt copies, of proper
financing statements (Form UCC-1) or amendments to existing UCC-1's (Form UCC-3)
filed in connection with the Existing
Receivables Purchase Agreement, filed
prior to the date of the initial Purchase, naming (i) each of the Originators as
the debtor and seller of Receivables, Seller as the secured party and purchaser
and Administrator, for the benefit of the Purchasers, as the assignee, and (ii)
Seller as the debtor and seller of Receivables or an undivided interest therein
and Administrator, for the benefit of the Purchasers, as the secured party and
purchaser, or other, similar instruments or documents, as may be necessary or,
in the opinion of the Administrator, desirable under the UCC or any comparable
law of all appropriate jurisdictions to perfect Seller's and the Purchasers'
interests in the Pool Assets, all of which financing statements the
Administrator is hereby authorized to file;
(e) A search report provided in writing to and approved by the
Administrator, which approval shall not be unreasonably withheld or delayed,
listing all effective financing statements that name any Originator or Seller as
debtor or assignor and that are filed in the jurisdictions in which filings were
made
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pursuant to subsection (d) above and in such other jurisdictions that
Administrator shall reasonably request, together with copies of such financing
statements (none of which shall cover any Pool Assets, unless executed
termination statements and/or partial releases with respect thereto have been
delivered to the Administrator), and tax and judgment lien search reports from a
Person reasonably satisfactory to Servicer and the Administrator showing no
evidence of such liens filed against any Originator or Seller;
(f) Duly executed copies of the Lockbox Agreements with the Lockbox
Banks in form and substance reasonably satisfactory to the Administrator;
(g) Favorable opinions of (i) in-house counsel to each of Servicer and
Seller as to corporate authority and (ii) Faegre & Xxxxxx LLP, special counsel
to each of the Originators and Seller as to all other legal matters, in form and
substance reasonably satisfactory to the Administrator and its counsel;
(h) Such powers of attorney as the Administrator shall reasonably
request to enable the Administrator to collect all amounts due under any and all
Pool Assets;
(i) A pro forma Servicer Report, assuming a Cut-Off Date of February
27, 2004;
(j) Reasonably satisfactory results of a review and audit, conducted by
CoBank, of the Originators' (as deemed necessary by the Administrator)
collection, operating and reporting systems, Credit and Collection Policy,
historical receivables data and accounts, including reasonably satisfactory
results of a review of the Originators' operating locations and reasonably
satisfactory review and approval of the Eligible Receivables in existence on the
date of the initial Purchase;
(k) Evidence of payment by the Seller out of the proceeds of the
initial Purchase of all accrued and unpaid Fees (including those contemplated by
the Fee Letter), all of the costs and expenses of this transaction accrued or
received prior to the date hereof, including, without limitation, attorneys'
fees of the Administrator, plus such additional amounts of attorneys' fees as
shall constitute the Administrator's reasonable estimate of attorneys' fees
incurred or to be incurred by it through the closing proceedings, including any
such costs, fees and expenses payable in accordance with Section 14.5;
(l) The Purchase and Sale Agreement, duly executed by the Originators
and Seller, and a copy of all documents required to be delivered thereunder; and
(m) Such other documents, certificates or opinions as the Administrator
may reasonably request.
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SECTION 5.2. CONDITIONS PRECEDENT TO ALL PURCHASES AND REINVESTMENTS.
Each Purchase (including the initial Purchase) and each Reinvestment hereunder,
shall be subject to the further conditions precedent that:
(a) in the case of each Purchase, the Servicer shall have delivered to
the Administrator on or prior to such Purchase, in form and substance
satisfactory to the Administrator, a completed Servicer Report with respect to
the immediately preceding calendar month, dated within two (2) Business Days
prior to the date of such Purchase, together with such additional information as
may be reasonably requested by the Administrator;
(b) on the date of such Purchase or Reinvestment the following
statements shall be true (and Seller by accepting the amount of such Purchase or
by receiving the proceeds of such Reinvestment shall be deemed to have certified
that):
(i) each of the representations and warranties contained in Article VI
(including, without limitation, all representations and warranties
incorporated by reference herein and made a part hereof pursuant to
Section 6.3(a)), are true and correct in all material respects as
though made on and as of such date and shall be deemed to have been
made on such date (except that any such representation or warranty,
which, by its express terms, relates exclusively to an earlier date,
shall be true and correct in all material respects as of such earlier
date);
(ii) no event has occurred and is continuing, or would result from such
Purchase or Reinvestment, that constitutes a Termination Event or
Unmatured Termination Event;
(iii) after giving effect to each proposed Purchase or Reinvestment,
Capital will not exceed the Facility Limit and the Receivable Interest
will not exceed the Allocation Limit; and
(iv) the Termination Date shall not have occurred.
ARTICLE VI. REPRESENTATIONS AND WARRANTIES
SECTION 6.1. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller
represents and warrants as follows:
(a) Organization and Good Standing. Seller has been duly organized and
is validly existing as a limited liability company in good standing under the
laws of the State of Delaware, with power and authority to own its properties
and to conduct its business as such properties are presently owned and such
business is
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presently conducted, and had at all relevant times, and now has, all necessary
power, authority, and legal right to acquire and own the Pool Assets.
(b) Due Qualification. Seller is duly qualified to do business as a
foreign limited liability company in good standing, and has obtained all
necessary licenses and approvals, in all other jurisdictions in which the
ownership or lease of property or the conduct of its business requires such
qualification, licenses or approvals, and except where the failure to so qualify
or have such licenses or approvals has not had, and could not reasonably be
expected to have, a Material Adverse Effect.
(c) Power and Authority; Due Authorization. Seller (i) has all
necessary power, authority and legal right to (A) execute and deliver this
Agreement and the other Transaction Documents to which it is a party, (2) carry
out the terms of the Transaction Documents to which it is a party, and (C) sell
and assign the Receivable Interest on the terms and conditions herein provided
and (ii) has duly authorized by all necessary organizational action the
execution, delivery and performance of this Agreement and the other Transaction
Documents to which it is a party and the sale and assignment of the Receivable
Interest on the terms and conditions herein provided.
(d) Valid Transfer; Binding Obligations. This Agreement constitutes a
valid transfer and assignment of the Receivable Interest to the Administrator,
for the benefit of Purchaser, enforceable against creditors of, and purchasers
from, Seller; and this Agreement constitutes, and each other Transaction
Document to be signed by Seller when duly executed and delivered will
constitute, a legal, valid and binding obligation of Seller enforceable in
accordance with its terms, except, in all cases, as enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether such enforceability is considered in
a proceeding in equity or at law.
(e) No Violation. The consummation by Seller of the transactions
contemplated by this Agreement and the other Transaction Documents to which it
is a party and the fulfillment of the terms hereof and thereof will not (i)
conflict with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default under,
the Seller's certificate of formation or limited liability company agreement or
any Contractual Obligation of Seller, (ii) result in the creation or imposition
of any Lien upon any of Seller's properties pursuant to the terms of any such
Contractual Obligation, other than this Agreement and the Purchase and Sale
Agreement, or (iii) violate any Applicable Law as then in effect.
(f) No Proceedings. There is no litigation, proceeding or investigation
pending or, to the best of Seller's knowledge, threatened, before any
Governmental
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Authority or arbitrator (i) asserting the invalidity of this Agreement or any
other Transaction Document to which Seller is a party, (ii) seeking to prevent
the sale and assignment of the Receivable Interest or the consummation of any of
the other transactions contemplated by this Agreement or any other Transaction
Document, or (iii) seeking any determination or ruling that could reasonably be
expected to have a Material Adverse Effect.
(g) Bulk Sales Act. No transaction contemplated hereby requires
compliance with any bulk sales act or similar law.
(h) Government Approvals. No Governmental Action is required for the
due execution, delivery and performance by Seller of this Agreement or any other
Transaction Document to which Seller is a party, except for the filing of the
UCC financing statements referred to in Article V, all of which, at the time
required in Article V, shall have been duly made and shall be in full force and
effect.
(i) Financial Condition. Since the date of Seller's formation, there
has been no material adverse change in Seller's financial condition, business,
assets or operations.
(j) Margin Regulations. The use of all funds obtained by Seller under
this Agreement will not conflict with or contravene any of Regulations T and X
promulgated by the Board of Governors of the Federal Reserve System from time to
time.
(k) Quality of Title. Each Pool Asset is legally and beneficially owned
by Seller free and clear of any Lien (other than any Lien arising solely as the
result of any action taken by the Purchasers or the Administrator); when the
Purchasers make a Purchase or Reinvestment, the Administrator shall have
acquired, for the benefit of the Purchasers, a valid and enforceable perfected
first-priority undivided percentage ownership interest to the extent of the
Receivable Interest in each Pool Asset, free and clear of any Lien (other than
any Lien arising solely as the result of any action taken by the Purchasers or
the Administrator), enforceable against any creditor of, or purchaser from,
Seller or any Originator; and no financing statement or other instrument similar
in effect covering any Pool Asset is on file in any recording office except such
as may be filed (i) in favor of an Originator in accordance with the Contracts,
(ii) in favor of Seller in accordance with the Purchase and Sale Agreement, or
(iii) in favor of the Purchasers or the Administrator in accordance with this
Agreement or in connection with any Lien arising solely as the result of any
action taken by the Purchasers or the Administrator.
(l) Accurate Reports. No Servicer Report, Weekly Report or other
information, exhibit, financial statement, document, book, record or report
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furnished or to be furnished by or on behalf of Seller to the Administrator or
the Purchasers in connection with this Agreement or any Transaction Document was
or will be inaccurate in any material respect as of the date it was or will be
dated or (except as otherwise disclosed to the Administrator at such time) as of
the date so furnished, or contained or will contain any material misstatement of
fact or omitted or will omit to state a material fact or any fact necessary to
make the statements contained therein not materially misleading.
(m) Offices. The principal place of business and chief executive office
of Seller are located at the address of Seller referred to in Section 14.2, and
the offices at which Seller keeps all its books, records and documents
evidencing or relating to Pool Receivables are located at the addresses
specified in Schedule 6.1(m) (or at such other locations, notified to the
Administrator in accordance with Section 7.1(f), in jurisdictions where all
action required by Section 8.5 has been taken and completed).
(n) Lockbox Accounts. The names and addresses of all the Lockbox Banks,
together with the account numbers of the Lockbox Accounts of Seller at such
Lockbox Banks, are specified in Schedule 6.1(n) (or have been notified to the
Administrator in accordance with Section 7.3(d)).
(o) Eligible Receivables. Each Receivable included in the Net Pool
Balance as an Eligible Receivable on the date of any Purchase, Reinvestment or
other calculation of Net Pool Balance shall be an Eligible Receivable on such
date.
(p) Accounting Sale. The Seller has accounted for each sale of
undivided percentage ownership interests in Receivables in its books and
financial statements as sales, consistent with GAAP.
(q) Credit and Collection Policies. The Seller has complied in all
material respects with the applicable Credit and Collection Policy with regard
to each Receivable.
(r) Legal Name. The Seller's complete legal name is set forth in the
preamble to this Agreement, and the Seller does not use, and has not during the
last six (6) years used, any other corporate name, trade name, doing business
name or fictitious name.
SECTION 6.2. REPRESENTATIONS AND WARRANTIES OF SERVICER. Servicer
hereby represents and warrants as follows:
(a) Organization and Good Standing. Servicer has been duly organized
and is validly existing as a cooperative corporation in good standing under the
laws
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of the State of its formation, with full power and authority to own its
properties and to conduct its business as such properties are presently owned
and such business is presently conducted.
(b) Due Qualification. Servicer is duly qualified to do business as a
foreign cooperative corporation in good standing, and has obtained all necessary
licenses and approvals, in all jurisdictions in which the ownership or lease of
property or the conduct of its business requires such qualification, licenses or
approvals, except where the failure to so qualify or have such licenses or
approvals has not had, and could not reasonably be expected to have, a Material
Adverse Effect.
(c) Power and Authority; Due Authorization. Servicer (i) has all
necessary power, authority and legal right to (A) execute and deliver this
Agreement and the other Transaction Documents to which it is a party and (B)
carry out the terms of the Transaction Documents to which it is a party and (ii)
has duly authorized by all necessary corporate action the execution, delivery
and performance of this Agreement and the other Transaction Documents to which
it is a party.
(d) Binding Obligations. This Agreement constitutes, and each other
Transaction Document to be signed by Servicer when duly executed and delivered
will constitute, a legal, valid and binding obligation of Servicer, enforceable
against Servicer in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether such enforceability is considered in
a proceeding in equity or at law.
(e) No Violation. The consummation of the transactions contemplated by
this Agreement and the other Transaction Documents to which Servicer is a party
and the fulfillment of the terms hereof and thereof will not (i) conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time or both) a default under Servicer's charter,
by-laws or any other organizational document or any Contractual Obligation of
Servicer, (ii) result in the creation or imposition of any Lien upon any of
Servicer's properties pursuant to the terms of any such Contractual Obligation
(other than any Lien created pursuant to the Transaction Documents), or (iii)
violate any Applicable Law as then in effect.
(f) No Proceedings. There is no litigation, proceeding or investigation
pending or, to the best of Servicer's knowledge, threatened, before any
Governmental Authority or arbitrator (i) asserting the invalidity of this
Agreement or any other Transaction Document to which Servicer is a party, (ii)
seeking to prevent the sale and assignment of the Receivable Interest or the
consummation of
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any of the other transactions contemplated by this Agreement or any other
Transaction Document, or (iii) seeking any determination or ruling that could
reasonably be expected to have a Material Adverse Effect.
(g) Government Approvals. No Governmental Action is required for the
due execution, delivery and performance by Servicer of this Agreement or any
other Transaction Document to which it is a party, other than the filing of the
UCC financing statements referred to in Article V, and all filings, if any,
necessary to comply with the Xxxx-Xxxxx-Xxxxxx Antitrust Act, all of which, at
the time required in Article V, shall have been duly made and shall be in full
force and effect.
(h) Accurate Reports. No Servicer Report, no Weekly Report or other
information, exhibit, financial statement, document, book, record or report
furnished or to be furnished by or on behalf of Servicer to the Administrator or
the Purchasers in connection with this Agreement or any Transaction Document was
or will be inaccurate in any material respect as of the date it was or will be
dated or (except as otherwise disclosed to the Administrator at such time) as of
the date so furnished, or contained or will contain any material misstatement of
fact or omitted or will omit to state a material fact or any fact necessary to
make the statements contained therein not materially misleading.
ARTICLE VII. GENERAL COVENANTS
SECTION 7.1. AFFIRMATIVE COVENANTS. From the date hereof until the
Final Payout Date:
(a) Compliance with Laws, Etc. Each of Seller and Servicer will comply
in all material respects with all Applicable Laws, including those with respect
to the Pool Receivables and the related Contracts, except where noncompliance
could not reasonably be expected to have a Material Adverse Effect.
(b) Preservation of Legal Existence. Each of Seller and Servicer will
preserve and maintain its legal existence, rights, franchises and privileges in
the jurisdiction of its formation, and qualify and remain qualified in good
standing as a foreign limited liability company, corporation, or other business
entity, as the case may be, in each jurisdiction where the failure to preserve
and maintain such existence, rights, franchises, privileges and qualification
could reasonably be expected to have a Material Adverse Effect.
(c) Audits. (i) Each of Seller and Servicer will at any time and from
time to time during regular business hours, on at least five (5) Business Day's
prior notice unless a Termination Event shall have occurred and be continuing,
permit the Administrator or any of its agents or representatives, (A) to examine
and make
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copies of and abstracts from all books, records and documents (including,
without limitation, computer tapes and disks) in its possession or under its
control relating to Pool Assets, (B) to visit its offices and properties for the
purpose of examining such materials described in clause (i)(A) above, and to
discuss matters relating to Pool Assets or its performance hereunder with any of
its officers or employees having knowledge of such matters, and (C) to verify
with officers and employees of Servicer, or directly with any Obligors (but only
with a representative of the Servicer present unless a Termination Event shall
have occurred and be continuing), the existence and amount of the Receivables;
and (ii) without limiting the provisions of clause (i) above, from time to time
on request of Administrator on at least five (5) Business Days prior notice,
unless a Termination Event shall have occurred and be continuing, permit
certified public accountants or other auditors acceptable to the Administrator
to conduct, at the expense of Seller or Servicer, as the case may be, a review
of its books and records with respect to the Pool Receivables; provided, however
that unless a Termination Event has occurred and is continuing, Seller and/or
Servicer shall not be obligated to pay for more than two (2) such audits in any
calendar year.
(d) Keeping of Records and Books of Account. Each of Seller and
Servicer will maintain and implement administrative and operating procedures
(including, without limitation, an ability to recreate records evidencing Pool
Receivables in the event of the destruction of the originals thereof), and keep
and maintain all documents, books, records and other information reasonably
necessary or advisable for the collection of all Pool Assets (including, without
limitation, records adequate to permit the daily identification of each new Pool
Receivable and all Collections of and adjustments to each existing Pool
Receivable).
(e) Performance and Compliance with Receivables and Contracts. Seller
will, at its expense, timely and fully perform and comply with (or cause an
Originator to perform and comply with pursuant to the Purchase and Sale
Agreement) all provisions, covenants and other promises required to be observed
by it under the Contracts related to the Pool Receivables and all other
agreements related to such Pool Receivables, except where failure to do so would
not materially and adversely affect the validity, enforceability or
collectibility of the related Pool Receivable.
(f) Location of Records. Each of Seller and Servicer will keep its
principal place of business and chief executive office, and the offices where it
keeps its records concerning the Pool Receivables and all related Contracts and
all other agreements related to such Pool Receivables (and all original
documents relating thereto), at its addresses referred to in Section 14.2 or,
upon thirty (30) days' prior written notice to the Administrator, at such other
locations in jurisdictions where all action required by Section 8.5 shall have
been taken and completed.
(g) Credit and Collection Policies. Attached as Schedule 7.1(g) are the
Credit and Collection Policies for each of the Originators. Each of Seller and
Servicer, at its own expense, will at all times timely and fully perform and
comply in all material respects with, and Feed agrees to so perform and comply
with, each applicable Credit and Collection Policy in regard to each Pool
Receivable and the related Contracts.
(h) Collections. Each of Seller and Servicer will (i) instruct (A) all
Obligors to cause all Collections (which, for the avoidance of doubt, shall
exclude any collections in respect of any Reconveyed Receivable, retail
receivable or other receivable of Seller, any Originator or any other Person not
included in the Receivable Pool) to be sent to either a Lockbox or Lockbox
Account that is the subject of a Lockbox Agreement, unless otherwise requested
by the Administrator pursuant to Section 8.3(c)(ii), in which case the Obligors
shall be instructed consistent with such request, and (B) each Lockbox Bank or
lockbox bank to deposit all such Collections directly into a Lockbox Account
that is the subject of a Lockbox Agreement. In the event that Seller or Servicer
receives Collections directly from any Obligor, Seller or Servicer, as the case
may be, shall deposit such Collections in the form received into either the
Collection Account or a Lockbox Account within two (2) Business Days after
receipt thereof or, on or after the Termination Date, immediately upon receipt.
(i) Quality of Title. Each of Seller and Servicer will take all action
necessary or desirable to establish and maintain a valid and enforceable
perfected first-priority undivided percentage ownership interest in favor of the
Administrator, for the benefit of the Purchasers, to the extent of the
Receivable Interest in each Pool Asset, free and clear of any Lien (other than
any Lien arising solely as a result of any action taken by the Purchasers or the
Administrator), enforceable against any creditor of, or purchaser from, Seller
or any Originator.
(j) Bank Equity Interests. (i) Each of Seller and Servicer agrees to
purchase such equity interests in CoBank ("Bank Equity Interests") as CoBank may
from time to time require in accordance with its bylaws and capital plans as
applicable to cooperative borrowers generally. In connection with the foregoing,
each of Seller and Servicer hereby acknowledges receipt, prior to the execution
of this Agreement, of the following with respect to CoBank:
(A) the bylaws of CoBank;
(B) a written description of the terms and conditions under which the
Bank Equity Interests are issued; and
(C) the most recent annual report, and if more recent than the latest
annual report, the latest quarterly report.
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(ii) CoBank reserves the right to sell participations and to make
assignments of its rights and duties hereunder in accordance with the provisions
of Article XII on a non-patronage basis. For the avoidance of doubt, none of the
Purchasers (other than CoBank) will have the benefit of or any rights in any
Bank Equity Interests or proceeds thereof.
SECTION 7.2. REPORTING REQUIREMENTS. From the date hereof until the
Final Payout Date:
(a) Weekly Reports. Not later than Noon (Denver,
Colorado time) on each
Tuesday (or, if such is not a Business Day, on the next succeeding Business
Day), Servicer will furnish to the Administrator a report (a "Weekly Report"),
duly certified by the principal financial officers of Seller and Servicer, with
respect to the immediately preceding week then ended in the form of, and
addressing the matters contained in, Exhibit 7.2(a) hereto;
(b) Quarterly Financial Statements. As soon as available and, in any
event within forty-five (45) days after the end of each of the first three (3)
quarters of each fiscal year, Seller will furnish to the Administrator copies of
(i) its financial statements, consisting of at least a balance sheet as at the
close of such quarter and statements of earnings for such quarter and for the
period from the beginning of the fiscal year to the close of such quarter, in
each case in conformity with GAAP (except for footnote disclosures), duly
certified by the principal financial officer of Seller and (ii) if not otherwise
delivered to the Administrator pursuant to the Purchase and Sale Agreement, the
financial statements of LOL and its Subsidiaries prepared on a consolidated
basis, consisting of at least a balance sheet as at the close of such quarter
and statements of earnings for such quarter and for the period from the
beginning of the fiscal year to the close of such quarter, in each case in
conformity with GAAP (except for footnote disclosures) and fairly presenting the
consolidated financial position and results of operations of LOL and its
Subsidiaries for such month and period, duly certified by the principal
financial officer of LOL;
(c) Annual Financial Statements. As soon as available and, in any event
within ninety (90) days after the end of each fiscal year, Seller will furnish
to the Administrator copies of (i) its financial statements, consisting of at
least a balance sheet of Seller for such year and statements of earnings and
cash flows, in each case in conformity with GAAP setting forth in each case in
comparative form corresponding figures from the preceding fiscal year, and (ii)
if not otherwise delivered to the Administrator pursuant to the Purchase and
Sale Agreement, the unqualified audited financial statements of LOL and its
Subsidiaries prepared on a consolidated basis, consisting of at least a balance
sheet of LOL and its Subsidiaries for such year and consolidated and
consolidating statements of earnings and cash flows, in each case in conformity
with GAAP, setting forth in each case in
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comparative form corresponding consolidated figures from the preceding fiscal
year, with all such statements duly certified by independent certified public
accountants of recognized standing selected by LOL, together with copies of any
and all letters, from such accountants to LOL's Board of Directors or any
committee thereof;
(d) Compliance Certificate. Together with each quarterly and annual
financial statement delivered in accordance with the preceding paragraphs, if
not otherwise delivered to the Administrator pursuant to the Purchase and Sale
Agreement, Seller will furnish to the Administrator the compliance certificate
to be delivered to it pursuant to Section 6.1(i)(iii) of the Purchase and Sale
Agreement.
(e) Termination Events. Each of Seller and Servicer will furnish to the
Administrator, as soon as possible and in any event within two (2) Business Days
after an officer of Seller or Servicer obtains actual knowledge of the
occurrence of each Termination Event and each Unmatured Termination Event, a
written statement of the principal financial officer or principal accounting
officer of Seller or Servicer, as the case may be, setting forth details of such
event and the action that Seller or Servicer, as the case may be, proposes to
take with respect thereto;
(f) Material Adverse Effect; Litigation. Each of Seller and Servicer
will furnish to the Administrator, as soon as possible and, in any event within
ten (10) Business Days after Seller's or Feed's actual knowledge thereof,
written notice of (i) the occurrence of any event or condition which could
reasonably be expected to have a Material Adverse Effect, (ii) without limiting
the foregoing clause (i), any litigation, investigation or proceeding which may
exist at any time which could be reasonably expected to have a Material Adverse
Effect and (iii) any material adverse development in previously disclosed
litigation;
(g) Change in Credit and Collection Policies. Each of Seller and
Servicer will furnish to the Administrator, prior to its effective date, written
notice of any material change in any Credit and Collection Policy which changes
shall be reasonably acceptable to the Administrator;
(h) Change in Name. Seller and Servicer will furnish to the
Administrator, at least thirty (30) days prior to any change in the Seller's or
Servicer's name, location or any other change requiring, or that might require,
the amendment of UCC financing statements, a notice setting forth such changes
and the effective date thereof; and
(i) XX Xxxxxx Credit Documents; Other Information. (A) To the extent
not delivered to the Administrator pursuant to any other provision of this
Agreement or of the Purchase and Sale Agreement, Seller will, at all times
during which LOL is acting as an Originator or in any other capacity hereunder
or under any Transaction Document, request pursuant to Section 6.1(i)(v) of the
Purchase
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and Sale Agreement and deliver to the Administrator copies of all financial
information and reports delivered to the agent or the lenders under the XX
Xxxxxx Credit Documents by or on behalf of LOL pursuant to any such XX Xxxxxx
Credit Document.
(B) Each of Seller and Servicer will, at all times until the Final
Payout Date, furnish to the Administrator such other information with respect to
the Receivables or the condition or operations, financial or otherwise, of the
Servicer or Seller or any Originator as the Administrator may from time to time
reasonably request.
SECTION 7.3. NEGATIVE COVENANTS. From the date hereof until the Final
Payout Date:
(a) Sales, Liens, Etc. Seller will not, except as otherwise provided
herein or in the Purchase and Sale Agreement, sell, assign (by operation of law
or otherwise) or otherwise dispose of, or create or suffer to exist any Lien
(except for statutory Liens on all Bank Equity Interests that Seller may now own
or hereafter acquire or be allocated in CoBank) upon or with respect to, any
Pool Asset or any interest therein. For the avoidance of doubt, Feed shall be
permitted to pledge its membership interests in Seller to secure Feed's
obligations in respect of the XX Xxxxxx Credit Documents.
(b) Extension or Amendment of Receivables. Neither Servicer nor Seller
will, except as otherwise expressly permitted in Section 8.2(c), extend, amend,
defer or otherwise modify, or permit Servicer to extend, amend or otherwise
modify, the terms of any Pool Receivable; or amend, modify or waive, or permit
Servicer to amend, modify or waive, any term or condition of any Contract
related to a Pool Receivable.
(c) Change in Business or Credit and Collection Policies. Neither
Servicer nor Seller will make any change in the character of its business or in
any Credit and Collection Policy, which change could materially impair the
collectibility of any Pool Receivable or otherwise materially adversely affect
the interests or remedies of the Administrator or the Purchasers under this
Agreement or any other Transaction Document.
(d) Change in Payment Instructions to Obligors. Neither Servicer nor
Seller will add or terminate any bank as a Lockbox Bank or a lockbox bank or any
Lockbox Account or lockbox account from those referenced on Schedule 6.1(n) or
make any change, or permit any Lockbox Bank or lockbox bank to make any change,
in its instructions to Obligors regarding payments to be made to Seller or
Servicer or payments to be made to any Lockbox, Lockbox Bank, lockbox or lockbox
bank, unless the Administrator shall have received notice of such addition,
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termination or change and duly executed copies of Lockbox Agreements with each
new Lockbox Bank or with respect to each new Lockbox or Lockbox Account, as the
case may be, or given its prior written consent, not to be unreasonably
withheld, to such addition, termination or change.
(e) Mergers, Acquisitions, Sales, etc. Without the prior written
consent of the Administrator and the Required Purchasers, neither the Seller nor
the Servicer will enter into any merger or consolidation with or acquire all or
substantially all of the capital stock or assets of any Person (whether in one
transaction or in a series of transactions), except that: (i) any Person (other
than the Seller or any Originator) may merge with and into the Servicer provided
that the Servicer is the surviving entity; or (ii) the Servicer may merge with
or acquire all of the capital stock of or all or substantially all of the assets
of any other Person provided that the Servicer is the surviving entity, provided
that, in each such case, prior to and immediately after giving effect thereto,
no Termination Event or Unmatured Termination Event shall exist.
(f) Deposits to Special Accounts. Neither Servicer nor Seller will
deposit or otherwise credit, or cause or permit to be so deposited or credited,
to any Lockbox or Lockbox Account cash or cash proceeds (including, without
limitation, proceeds of any Reconveyed Receivable or other receivable of Seller,
any Originator or any other Person) other than Collections of Pool Receivables.
(g) Other Businesses. Seller will not (i) engage in any business other
than the transactions contemplated by the Transaction Documents; (ii) incur any
indebtedness, obligation, liability or contingent obligation of any kind other
than pursuant to this Agreement or the Purchase and Sale Agreement (including
the SPV Purchaser Notes issued pursuant thereto); or (iii) form any new
Subsidiary or make any investments in any other Person (except for investments
in CoBank to the extent required by Section 7.1(k)).
(h) Certificate of Formation; Purchase and Sale Agreement. Seller will
not amend, modify, terminate, revoke or waive any provision of its certificate
of formation, limited liability company agreement, any SPV Purchaser Note or the
Purchase and Sale Agreement.
(i) Restricted Payments. Seller will not declare or make any dividend
or other distributions to any of its shareholders, redeem or purchase any of its
capital stock or make any loan or other payments to any of its shareholders or
Affiliates (other than (1) payments of the purchase price of Receivables and
payments under the SPV Purchaser Notes, each as set forth in the Purchase and
Sale Agreement, (2) the turn-over of Collections of Reconveyed Receivables to
Servicer as set forth in the Purchase and Sale Agreement, (3) payment of the
Servicer's Fee so long as Feed is the Servicer and (4) payment of reasonable
management fees and reimbursement of
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reasonable expenses of Servicer incurred in connection with managing Seller, so
long as such fees and expenses are in an amount not in excess of those that
would be paid in a similar arms'-length transaction) unless, in each case, no
Termination Event or Unmatured Termination Event has occurred and is continuing
or would result therefrom.
(j) Change of Name or Location. Seller will not change its name or the
location of its principal place of business or chief executive office or its
organizational structure, unless Seller has given the Administrator at least
thirty (30) days' prior notice thereof, and has taken all steps necessary or
advisable under the UCC to continue the perfection and priority of the
Administrator's and each Purchaser's interest in the Pool Assets.
SECTION 7.4. SEPARATE EXISTENCE. Each of Seller and Servicer hereby
acknowledges and agrees that the Purchasers and the Administrator are entering
into the transactions contemplated by this Agreement and the other Transaction
Documents in reliance upon Seller's identity as a legal entity separate from
Feed and the other Originators. Therefore, from and after the date hereof, each
of Seller and Feed shall take all steps specifically required by this Agreement
or reasonably required by the Required Purchasers or the Administrator to
continue Seller's identity as a separate legal entity and to make it apparent to
third Persons that Seller is an entity with assets and liabilities distinct from
those of Feed and the other Originators and any other Person, and is not a
division of Feed, any other Originator or any other Person. Without in any way
limiting the generality of the foregoing and in addition to and consistent with
the other covenants set forth herein, Seller and Feed shall take such actions as
shall be required in order that:
(a) Seller will be a limited purpose limited liability company
whose primary activities are restricted in its certificate of formation to
purchasing or otherwise acquiring from Originators, owning, holding, granting
security interests, or selling interests, in Pool Assets, entering into
agreements for the selling and servicing of the Receivables Pool, and conducting
such other activities as it deems necessary or appropriate to carry out its
primary activities. Seller shall observe all company procedures required by it
certificate of organization, its limited liability company agreement and the
limited liability law of the State of Delaware. All distributions of Seller will
be paid and declared in accordance with the law of the State of Delaware;
(b) Seller shall not engage in any business or activity, or
incur any indebtedness or liability other than as expressly permitted by the
Transaction Documents;
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(c) The business and affairs of Seller are and will be managed
by or under the direction of Seller's Board of Managers. Seller at all times
will ensure that the Board of Managers duly authorizes all company actions
requiring authorization by its Board of Managers. When necessary, Seller will
obtain proper authorization from Feed as its sole member for company action. The
officers and managers of Seller shall make decisions with respect to the
business and daily operations of Seller independent of and not dictated by Feed
or any other Originator. In addition, Seller shall ensure that its officers and
managers will adhere to all statutes, rules, by-laws or other obligations
regarding conflicts of interest and participation in decision-making by officers
and managers who may have a conflict of interest with respect to the subject
matter of the decision;
(d) Not fewer than one (1) member of Seller's Board of
Managers shall be an Independent Manager. The certificate of formation of Seller
shall provide that (i) Seller's Board of Managers shall not approve, nor take
any other action to cause the filing of, a voluntary bankruptcy petition or a
merger or dissolution with respect to Seller unless the Independent Manager
shall approve the taking of such action in writing prior to the taking of such
action and (ii) such provision cannot be amended without the prior written
consent of the Independent Manager;
(e) The Independent Manager shall not at any time serve as a
trustee in bankruptcy for Seller, Feed, any other Originator or any other
Affiliate thereof;
(f) Any employee, consultant or agent of Seller will be
compensated from Seller's funds for services provided to Seller. Seller will not
engage any agents other than its attorneys, auditors and other professionals,
and a Servicer as contemplated by this Agreement for the Receivables Pool, which
Servicer will be fully compensated for its services by payment of the Servicer's
Fee and a manager, which manager will be fully compensated from Seller's funds;
(g) Seller will not incur any material indirect or overhead
expenses for items shared with Feed (or any other Originator or Affiliate
thereof) which are not reflected in the Servicer's Fee. To the extent, if any,
that Seller (or any other Affiliate thereof) shares items of expenses not
reflected in the Servicer's Fee or the manager's fee, such as legal, auditing
and other professional services, such expenses will be allocated to the extent
practical on the basis of actual use or the value of services rendered, and
otherwise on a basis reasonably related to the actual use or the value of
services rendered, it being understood that Feed shall pay all expenses relating
to the preparation, negotiation, execution and delivery of the Transaction
Documents, including, without limitation, legal and other fees;
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(h) Seller will pay fair market rent for any office space
shared with any Originator and a fair share of any overhead costs. Seller's
operating expenses will not be paid by Feed, any other Originator or any
Affiliate thereof. Seller shall pay from its own separate assets all material
liabilities incurred by it, including the wages and salaries of its officers and
all material administrative expenses. Seller will reimburse the applicable
Originator for its allocable portions of any shared expenses;
(i) Seller will have its own stationery and an address and
telephone number separate and distinct from the address and telephone number of
any of the Originators. Seller will continue to conduct its business solely in
its own name so as not to mislead others as to the identity of Seller. All oral
and written communications, including without limitation letters, invoices,
purchase orders, contracts, statements and applications, shall be made solely in
the name of Seller if related to Seller, or an Originator if related to such
Originator, and shall not be made in the name of Seller if related to an
Originator or the name of an Originator if related to Seller;
(j) Seller maintains and will maintain separate corporate
records, documents and books of accounting from those of Feed, any other
Originator or any other entity, and keeps and will keep correct and complete
books and records of account and minutes of the meetings and other proceedings
of its members and the Board of Managers;
(k) Seller will maintain separate financial statements from
the Originators. All financial statements of LOL, Feed or any Affiliate thereof
that are Consolidated to include Seller will contain appropriate footnotes or
will otherwise disclose that (A) the Receivables and Related Rights have been
sold (or contributed) to Seller pursuant to the Purchase and Sale Agreement, and
(B) Seller is a separate entity with creditors who have received security
interests in Seller's assets;
(l) Seller's assets will be maintained in a manner that
facilitates their identification and segregation from those of Feed, any other
Originator or any other Affiliate thereof;
(m) Seller will strictly observe corporate formalities in its
dealings with Feed, the other Originators or any Affiliates thereof, and funds
or other assets of Seller will not be commingled with those of Feed, any other
Originator or any Affiliate thereof. Seller shall not maintain joint bank
accounts or other depository accounts to which Feed, any other Originator or any
Affiliate thereof (other than Feed in its capacity as Servicer) has independent
access;
(n) Seller will maintain arms'-length relationships with Feed,
each other Originator and any Affiliate thereof. Any Person that renders or
otherwise
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furnishes services to Seller will be compensated by Seller at market rates for
such services it renders or otherwise furnishes to Seller. Neither Seller nor
Feed will guaranty, assume any obligations of or will hold itself out to be
responsible for the debts of or the decisions or actions respecting the daily
business and affairs of (i) in the case of Seller, Feed or any other Originator
and (ii) in the case of Feed, Seller. Seller and Feed will immediately correct
any known misrepresentation with respect to the foregoing, and they will not
operate or purport to operate as an integrated single economic unit with respect
to each other or in their dealing with any other entity; and
(o) Seller (i) will act solely in its own name and through its
duly authorized officers or agents in the conduct of its businesses, (ii) will
take no action which may mislead third parties as to the separate corporate
identities and separate assets and liabilities of each Originator and Seller,
and (iii) will have and utilize its own invoices and letterhead separate from
any Originator.
Without limiting the foregoing, Feed and Seller agree to take all
actions necessary to ensure that the corporate separateness assumptions,
statements and representations set forth in Exhibit 7.4 attached hereto are and
shall at all times remain true and correct.
ARTICLE VIII. ADMINISTRATION AND COLLECTION
SECTION 8.1. DESIGNATION OF SERVICER AND SUB-SERVICERS.
(a) Feed as Initial Servicer. The servicing, administering and
collection of the Pool Receivables shall be conducted by the Person designated
as Servicer hereunder (the term "Servicer", as used herein, shall include any
such successor Servicer) from time to time in accordance with this Section 8.1.
Until the Administrator gives to Feed a Successor Notice, Feed is hereby
designated as, and hereby agrees to perform the duties and obligations of,
Servicer pursuant to the terms hereof. By execution hereof, the Servicer hereby
designates each of Collection Corp, Purina Xxxxx and LOL, and each of Collection
Corp, Purina Xxxxx and LOL hereby accepts its designation as, a Sub-Servicer.
(b) Successor Notice; Servicer Transfer Events. Upon Feed's receipt of
notice from the Administrator of the Administrator's designation of a new
Servicer (a "Successor Notice"), Feed agrees that it will terminate its
activities as Servicer hereunder in a manner that the Administrator reasonably
believes will facilitate the transition of the performance of such activities to
the new Servicer, and the new Servicer shall assume each and all of Feed's
obligations to service and administer such Pool Receivables, on the terms and
subject to the conditions herein set forth, and Feed and each of the
Sub-Servicers shall use its best efforts to assist the new Servicer in assuming
such obligations. The Administrator agrees not to give Feed a
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Successor Notice until after the occurrence and during the continuance of a
Servicer Default or a Termination Event (any such Servicer Default or
Termination Event being herein called a "Servicer Transfer Event"), in which
case such Successor Notice may be given at any time in the Administrator's
discretion. Any successor Servicer designated by the Administrator pursuant to
this Section 8.1 must be either: (1) CoBank or an Affiliate; (2) a recognized
commercial entity that regularly engages in the business of accounts receivable
collections and servicing on a fee basis or (3) so long as Feed does not object
for substantial substantive commercial reasons, any other Person named by
CoBank.
(c) Resignation. Feed acknowledges that the Administrator and the
Purchasers have relied on Feed's agreement to act as Servicer hereunder in
making their decision to execute and deliver this Agreement. Accordingly, Feed
agrees that it will not voluntarily resign as Servicer.
(d) Subcontracts. Servicer may, with the prior consent of the
Administrator, subcontract with any Person for servicing, administering or
collecting the Pool Receivables (each, a "Sub-Servicer"); provided that (i) such
Sub-Servicer shall agree in writing to perform the duties and obligations of the
Servicer pursuant to the terms hereof; (ii) Servicer shall remain primarily
liable for the performance of the duties and obligations of Servicer pursuant to
the terms hereof, (iii) Seller, the Administrator and the Purchasers shall have
the right to look solely to the Servicer for performance, (iv) any such
subcontract may be terminated at the option of the Administrator upon the
occurrence of a Servicer Transfer Event, but in any event shall be terminated
automatically and without necessity of additional notice in the event the
Administrator shall give to Feed a Successor Notice, and (v) Servicer shall, and
by its execution hereof does, unconditionally guaranty the payment and
performance of any and all obligations and liabilities of the Sub-Servicers (or
any Sub-Servicer) and any other Person designated by the Servicer under this
Section 8.1(d) for servicing, administering or collecting the Pool Receivables.
(e) Servicing Programs. In the event that Servicer uses any software
program in servicing the Pool Receivables that it licenses from a third party,
Servicer shall use its reasonable efforts to obtain whatever licenses or
approvals are necessary to allow the Administrator or the new Servicer to use
such program.
SECTION 8.2. DUTIES OF SERVICER.
(a) Appointment; Duties in General. Each of Seller, the Purchasers and
the Administrator hereby appoints Servicer as its agent, as from time to time
designated pursuant to Section 8.1, to enforce its rights and interests in and
under the Pool Assets. Servicer shall take or cause to be taken all such actions
as may be necessary or advisable to collect each Pool Receivable from time to
time, all in
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accordance with Applicable Law, with reasonable care and diligence and in
accordance with each applicable Credit and Collection Policy.
(b) Allocation of Collections; Segregation. Servicer shall set aside
(or, if applicable, otherwise provide for its availability on the next
Settlement Date) for the account of Seller and the Purchasers their respective
Pro Rata Shares of the Collections of Pool Receivables in accordance with
Section 1.3. Servicer shall segregate and deposit in immediately available funds
into the Administrator's Account, the Purchasers' Share of Collections (to the
extent required to be deposited therein pursuant to Section 1.3), not later than
the second (2nd) Business Day following receipt by Servicer of such Collections.
(c) Modification of Receivables. So long as no Termination Event or
Unmatured Termination Event shall have occurred and be continuing, Servicer may
(i) in accordance with any applicable Credit and Collection Policy or with the
Administrator's prior written consent, extend the time for payment of any
Defaulted Receivable (but in no event to a date later than sixty (60) days from
the date of the original invoice) provided that the aggregate Unpaid Balance of
all Pool Receivables that have been extended during any Settlement Period, shall
not exceed two percent (2%) of the aggregate Unpaid Balance of all Pool
Receivables as at the CutOff Date for such Settlement Period and (ii) adjust the
Unpaid Balance of any Receivable to reflect the reductions or cancellations
described in the first sentence of Section 3.2(a).
(d) Documents and Records. Seller shall deliver to Servicer, and
Servicer shall hold in trust for Seller and the Purchasers in accordance with
their respective interests, all documents, instruments and records (including,
without limitation, computer tapes or disks) that evidence or relate to Pool
Receivables.
(e) Servicer Reports; Certain Duties to Seller. Servicer shall prepare
and timely deliver to the Administrator the Servicer Reports and the Weekly
Reports in accordance with Sections 3.1(a) and 7.2(a), respectively. In
addition, Servicer shall, as soon as practicable following receipt, turn over to
Seller the collections of any receivable which is not a Pool Receivable. Seller
hereby directs Servicer to pay any collections of any Reconveyed Receivable
directly to the related Originator to be applied pursuant to the Purchase and
Sale Agreement. Servicer shall, as soon as practicable upon demand, deliver to
Seller copies of documents, instruments and records in its possession that
evidence or relate to Pool Receivables.
(f) Termination. Servicer's authorization under this Agreement shall
terminate upon the Final Payout Date.
(g) Power of Attorney. Seller hereby grants to Servicer an irrevocable
power of attorney, with full power of substitution, coupled with an interest, to
take
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in the name of Seller all steps which are necessary or advisable to endorse,
negotiate or otherwise realize on any writing or other right of any kind held or
transmitted by Seller or transmitted or received by the Purchasers (whether or
not from Seller) in connection with any Receivable. Notwithstanding anything to
the contrary contained herein, the Administrator may direct the Servicer to
commence or settle any legal action to enforce collection of any Pool Receivable
or to foreclose upon or repossess any Related Security; provided, however, that
no such direction may be given unless either (i) a Termination Event has
occurred or (ii) the Administrator believes is good faith that failure to
commence, settle, or effect such legal action, foreclosure or repossession,
could adversely affect Receivables constituting a material portion of the Pool
Receivables.
(h) Servicer Default. The occurrence of either of the following shall
constitute a "Servicer Default":
(i) At any time while Feed is acting as Servicer hereunder, LOL shall
fail to comply with any of the financial covenants in the XX Xxxxxx
Credit Documents on or as of any date on or as of which such compliance
is required under the applicable XX Xxxxxx Credit Document(s), in each
case as in effect on the Initial Purchase Date; or
(ii) An event of default shall occur under and continue to exist beyond
any grace or cure period applicable thereto under any instrument or
agreement evidencing, securing or providing for the issuance of
indebtedness for borrowed money in excess of $10,000,000 (then
outstanding) of, or guaranteed by, LOL or any Subsidiary, which event
of default is either a payment default or has resulted in acceleration
of the maturity of such indebtedness; or any default under any
agreement or instrument relating to the purchase of receivables at any
one time outstanding in excess of $10,000,000 of LOL or any Subsidiary
thereof (other than this Agreement), if the effect of such default is
to terminate, or permit the termination of, the commitment of any party
to such agreement or instrument to purchase receivables or the right of
LOL or such Subsidiary to reinvest in receivables the principal amount
paid by any party to such agreement or instrument for an interest in
receivables; or if Servicer (or any Sub-Servicer) shall fail to make
any payment in respect of any Indebtedness of Servicer (or any
Sub-Servicer), as the case may be, having a principal amount in excess
of $10,000,000 as of the date of such failure, and such failure to make
such payment shall continue for more than the grace period, if any,
applicable thereto or otherwise shall entitle the holder of such
Indebtedness to accelerate the Servicer's (or Sub-Servicer's)
obligations thereunder; or
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(iii) An event or circumstance which would give rise to a Termination
Event (as opposed to an Unmatured Termination Event) shall have
occurred and be continuing, regardless of whether a Termination Event
is declared.
SECTION 8.3. RIGHTS OF ADMINISTRATOR.
(a) Notice to Obligors. At any time after the occurrence and during the
continuance of a Termination Event or a LOL Downgrade, the Administrator may
notify the Obligors of Pool Receivables, or any of them, of the ownership of the
Receivable Interest by the Administrator, for the benefit of the Purchasers.
(b) Notice to Lockbox Banks. At any time following the earlier to occur
of (i) the occurrence and continuance of a Termination Event, and (ii) the
commencement of the Termination Period, the Administrator is hereby authorized
to give notice to the Lockbox Banks, as provided in the Lockbox Agreements, of
the transfer to the Administrator of dominion and control over the Lockboxes and
Lockbox Accounts. Seller hereby transfers to the Administrator the exclusive
dominion and control over such Lockboxes and Lockbox Accounts, and shall take
any further action that the Administrator may reasonably request to effect such
transfer. Any proceeds of Pool Receivables received by the Seller, Servicer or
any Sub-Servicer thereafter shall be sent immediately to the Administrator.
(c) Rights on Servicer Transfer Event. At any time following the
designation of a Servicer other than Feed or another Originator pursuant to
Section 8.1 or during the occurrence and continuance of a LOL Downgrade:
(i) The Administrator may direct the Obligors of Pool Receivables, or
any of them, to pay all amounts payable under any Pool Receivable
directly to the Administrator or its designee;
(ii) Pursuant to Section 8.2(d)(ii) of the Purchase and Sale Agreement,
the Administrator may instruct the Originators to give notice of such
ownership to each said Obligor and direct that payments be made
directly to the Administrator or its designee;
(iii) Feed and Seller shall, at the Administrator's request, (A)
assemble all of the documents, instruments and other records
(including, without limitation, computer programs (subject to licensing
restrictions), tapes and disks which evidence the Pool Receivables and
the related Contracts and Related Security, or which are otherwise
necessary or desirable to collect such Pool Receivables and make the
same available to the Administrator at a place selected by the
Administrator, and (B) segregate all cash, checks and other instruments
received by it from time to time constituting Collections in a manner
acceptable to the Administrator and promptly upon receipt, remit
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all such cash, checks and instruments, duly endorsed or with duly
executed instruments of transfer, to the Administrator; and
(iv) Seller and each of the Purchasers hereby authorizes the
Administrator, and grants to the Administrator an irrevocable power of
attorney, to take any and all steps in Seller's name and on behalf of
Seller and the Purchasers which are necessary or desirable, in the
reasonable determination of the Administrator, to collect all amounts
due under any and all Pool Receivables including, without limitation,
endorsing Seller's name on checks and other instruments representing
Collections and enforcing such Pool Receivables and the related
Contracts.
SECTION 8.4. RESPONSIBILITIES OF SELLER. Anything herein to the
contrary notwithstanding:
(a) Contracts. Seller shall perform, or cause an Originator to perform
under the Purchase and Sale Agreement, all of its obligations under the
Contracts related to the Pool Receivables and under the other agreements related
thereto to the same extent as if the Receivable Interest had not been sold
hereunder, and the exercise by the Administrator or its designee of its rights
hereunder shall not relieve Seller from such obligations.
(b) Limitation of Liability. Neither the Administrator nor any of the
Purchasers shall have any obligation or liability with respect to any Pool
Receivables, the related Contracts or any other related agreements, nor shall
any of them be obligated to perform any of the obligations of Seller or any
Originator thereunder.
SECTION 8.5. FURTHER ACTION EVIDENCING PURCHASES AND REINVESTMENTS.
(a) Further Assurances. The Seller shall, at its expense, take all
action necessary or desirable to establish and maintain, free and clear of any
Lien, a valid and enforceable first-priority perfected undivided percentage
ownership interest, to the extent of the Receivable Interest, in the Pool Assets
in favor of the Administrator, for the benefit of the Purchasers. Without
limiting the generality of the foregoing, Seller will, upon the request of the
Administrator or its designee, execute and file such financing or continuation
statements, or amendments thereto or assignments thereof, and such other
instruments or notices, as may be necessary or appropriate to evidence or
perfect the interest described in the previous sentence.
(b) Data Processing Records. Each of Feed and Seller will xxxx its
master data processing records evidencing the Pool Receivables with a legend,
acceptable to
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the Administrator, evidencing that the Receivable Interest has been sold in
accordance with this Agreement.
(c) Additional Financing Statements; Performance by Administrator.
Seller hereby authorizes the Administrator or its designee to file one or more
financing or continuation statements, and amendments thereto and assignments
thereof, relative to all or any portion of the Receivable Interest now existing
or hereafter arising in the name of Seller. If Seller or Feed fails to perform
any of its agreements or obligations under this Agreement, the Administrator or
its designee may (but shall not be required to), after notice to Seller or Feed
and a reasonable opportunity for Seller or Feed to perform (unless immediate
action is reasonably required to protect the interests of the Administrator or
the Purchasers), itself perform, or cause performance of, such agreement or
obligation, and the expenses of the Administrator or its designee incurred in
connection therewith shall be payable by Seller or Feed as the case may be.
(d) Continuation Statements; Opinion. Without limiting the generality
of subsection (c), Seller will, not earlier than six (6) months and not later
than three (3) months prior to the fifth (5th) anniversary of the date of filing
of each financing statement referred to in Section 5.1(d) (or any other
financing statement filed pursuant to this Agreement or in connection with any
Purchase hereunder), unless the Final Payout Date shall have occurred: (i)
execute and deliver and file or cause to be filed an appropriate continuation
statement with respect to such financing statement; and (ii) deliver or cause to
be delivered to the Administrator an opinion of the counsel for Seller, in form
and substance reasonably satisfactory to the Administrator, confirming and
updating the opinion delivered pursuant to Section 5.1(g) with respect to
perfection and otherwise to an enforceable and perfected ownership or security
interest, subject to no other liens of record except as provided herein or
otherwise permitted hereunder.
SECTION 8.6. APPLICATION OF COLLECTIONS. Any payment by an Obligor in
respect of any indebtedness owed by it to Seller shall, except as otherwise
specified by such Obligor, required by the underlying Contract or law or unless
the Administrator instructs otherwise, be applied, first, as a Collection of any
Pool Receivable or Receivables then outstanding of such Obligor in the order of
the age of such Pool Receivables, starting with the oldest of such Pool
Receivable and, second, to any other indebtedness of such Obligor.
ARTICLE IX. SECURITY INTEREST
SECTION 9.1. GRANT OF SECURITY INTEREST. To secure all obligations of
Seller owing to the Secured Parties arising in connection with this Agreement
and each other Transaction Document, whether now or hereafter existing, due or
to become due, direct or indirect, or absolute or contingent, including, without
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limitation, all Indemnified Amounts, payments on account of Collections of Pool
Receivables received or deemed to be received and fees due under the Transaction
Documents, Seller hereby assigns and grants to Administrator, for the benefit of
the Secured Parties, a security interest in all of Seller's right, title and
interest (including specifically, but without limitation, any undivided interest
retained by Seller hereunder) now or hereafter existing in, to and under all the
Pool Assets. In connection with the foregoing, Seller hereby acknowledges and
agrees that Administrator shall be entitled at any time to enforce the Seller's
rights under the Purchase and Sale Agreement.
SECTION 9.2. FURTHER ASSURANCES. The provisions of Section 8.5 shall
apply to the security interest granted under Section 9.1 as well as to the
Purchases, Reinvestments and the Receivable Interest hereunder.
SECTION 9.3. REMEDIES. Upon the occurrence and during the continuance
of a Termination Event, the Administrator and the Purchasers shall have, with
respect to the collateral granted pursuant to Section 9.1, and in addition to
all other rights and remedies available to the Purchasers or the Administrator
under this Agreement, each of the other Transaction Documents or other
Applicable Law, all the rights and remedies of a secured party upon default
under the UCC.
ARTICLE X. TERMINATION EVENTS
SECTION 10.1. TERMINATION EVENTS. The following events shall be
"Termination Events" hereunder:
(a) (i) Servicer (if Feed or any Affiliate is the Servicer) or any
Sub-Servicer shall fail to perform or observe any material term, covenant or
agreement that is an obligation of Servicer hereunder (other than as referred to
in clause (ii) next following) and such failure shall remain unremedied for more
than seven (7) Business Days, or (ii) Seller or Servicer (if Feed or its
Affiliate is Servicer) shall fail to make any payment of Capital or Yield within
two (2) Business Days, or, in the case of any other payment or deposit required
to be made by it hereunder, within five (5) Business Days, of when first due and
payable hereunder; or
(b) Any representation or warranty made or deemed to be made by Seller,
Feed, individually or in its capacity as Servicer, or any other Originator,
under or in connection with this Agreement, any other Transaction Document, or
any Servicer Report, Weekly Report or other information or report delivered
pursuant hereto shall prove to have been false or incorrect in any material
respect when made and, but only to the extent such breached representation or
warranty is susceptible to cure, shall remain uncured for ten (10) Business
Days; or
(c) Seller, Feed (other than in its capacity as Servicer) or any other
Originator shall fail to perform or observe any other term, covenant or
agreement
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contained in (i) this Agreement; (ii) any other Transaction Document or (iii)
any other material agreement with, or other undertaking in favor of, CoBank or
any of the Purchasers, to be performed or observed on the part of Seller, Feed
or such Originator (as the case may be) and any such failure shall remain
unremedied for fifteen (15) Business Days after written notice thereof shall
have been given by the Administrator, CoBank or such Purchaser, as the case may
be, to the applicable non-performing party; or
(d) Seller or any Originator shall fail to make any payment in respect
of any Indebtedness having an aggregate principal (or equivalent) amount in
excess of $10,000,000, when and as the same shall become due and payable (giving
effect to any applicable grace or cure periods); or
(e) Any event or condition occurs that results in any Indebtedness of
Seller or any Originator having an aggregate principal (or equivalent) amount in
excess of $10,000,000 becoming due prior to its scheduled maturity or that
requires the prepayment, repurchase, redemption or defeasance thereof, prior to
its scheduled maturity; or
(f) There shall occur a Servicer Default; or
(g) This Agreement or any Purchase or any Reinvestment pursuant to this
Agreement shall for any reason (other than pursuant to the terms hereof) (i)
cease to create, or the Receivable Interest shall for any reason cease to be, a
valid and enforceable perfected undivided percentage ownership interest, to the
extent of the Receivable Interest, in each Pool Asset, free and clear of any
other Lien or (ii) cease to create with respect to the items described in
Section 9.1, or the interest of the Administrator (for the benefit of the
Purchasers) with respect to such items shall cease to be, a valid and
enforceable first-priority perfected security interest, free and clear of any
other Lien; or
(h) An Event of Bankruptcy shall have occurred and remain continuing
with respect to Seller, Feed, or any other Originator; or
(i) The 12-month rolling average Sales Based Dilution Ratio for any
CutOff Date exceeds ten percent (10%); or
(j) The 12-month rolling average Sales Based Default Ratio for any
CutOff Date exceeds six percent (6%); or
(k) The monthly Sales Based Default Ratio for any Cut-Off Date exceeds
ten percent (10%); or
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(l) On any Settlement Date or any Purchase Date, after giving effect to
the payments or distributions made (or, in the case of any Payment Date, after
giving pro forma effect to such payments or distributions to be made as of the
next succeeding Settlement Date, as specified in Section 3.1(c)) under Section
3.1(c), the Receivable Interest exceeds the Allocation Limit; or
(m) The 12-month rolling average Sales Based Delinquency Ratio for any
Cut-Off Date is greater than six percent (6%); or
(n) The monthly Sales Based Delinquency Ratio for any Cut-Off Date
exceeds ten percent (10%); or
(o) There shall remain in force, undischarged, unsatisfied and
unstayed, for more than five (5) Business Days with respect to the Seller or
thirty (30) days with respect to Feed or any other Originator, as applicable,
whether or not consecutive, any final judgment against the Seller, Feed or any
other Originator, or any of their respective properties or assets, that,
individually or taken together with all other final judgments so undischarged,
unsatisfied and unstayed against any such Person or Persons or any of their
respective assets or properties has caused, or has a reasonable possibility of
causing, a Material Adverse Effect; or
(p) (a) LOL shall cease to own at least eighty percent (80%) of the
equity interests in Feed, (b) Feed shall cease to own at least eighty percent
(80%) of the equity interests in Purina, (c) Feed shall cease to own one hundred
percent (100%) of the equity interests in Seller, or (d) LOL is subject to a
Change in Control; or
(q) The Internal Revenue Service shall file notice of a Lien pursuant
to Section 6323 of the Internal Revenue Code with regard to any of the assets of
Seller or Feed and such Lien shall not have been stayed or bonded in a manner
satisfactory in the sole discretion of the Administrator, or released within ten
(10) Business Days, or the Pension Benefit Guaranty Corporation shall file
notice of a Lien pursuant to Section 4068 of the Employee Retirement Income
Security Act of 1974 with regard to any of the assets of Seller or Feed and such
Lien shall not have been released within five (5) Business Days; or
(r) There shall exist any other event or occurrence that has caused, or
could reasonably be anticipated to cause, a Material Adverse Effect; or
(s) Seller's net worth is less than $1,000,000 at any time; or
(t) Either of the Credit Agreements described in the definition of "XX
Xxxxxx Credit Documents," or any replacement credit facility acceptable to the
Administrator, shall have been terminated or shall otherwise cease to be in full
force and effect; or
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(u) Any Originator elects at any time not to sell or contribute
Receivables to Seller in accordance with Section 1.2(b) of the Purchase and Sale
Agreement.
SECTION 10.2. REMEDIES.
(a) Optional Liquidation. Upon the occurrence of a Termination Event
(other than a Termination Event described in subsection (h) of Section 10.1),
the Administrator shall, at the request, or may with the consent, of the
Required Purchasers, by notice to Seller, declare the Purchase Termination Date
to have occurred and the Termination Period to have commenced.
(b) Automatic Liquidation. Upon the occurrence of a Termination Event
described in subsection (h) of Section 10.1, the Purchase Termination Date shall
occur and the Termination Period shall commence automatically.
(c) Additional Remedies. Upon any Purchase Termination Date occurring
pursuant to this Section 10.2, no Purchases or Reinvestments thereafter will be
made, and the Administrator and each of the Purchasers shall have, in addition
to all other rights and remedies under this Agreement or otherwise, all other
rights and remedies provided under the UCC of each applicable jurisdiction and
other Applicable Law, which rights shall be cumulative.
ARTICLE XI. THE ADMINISTRATOR
SECTION 11.1. AUTHORIZATION.
(a) The Administrator is authorized to take such action on behalf of
each of the Purchasers and to exercise all such powers as are hereunder and
under any of the other Transaction Documents and any related documents delegated
to the Administrator, together with such powers as are reasonably incident
thereto; provided that no duties or responsibilities not expressly assumed
herein or therein shall be implied to have been assumed by the Administrator. In
addition to the foregoing, the Administrator is hereby expressly authorized and
directed by each of the Purchasers to enter into the Intercreditor Agreement for
and on behalf of such Purchaser.
(b) The relationship between the Administrator and each of the
Purchasers is that of an independent contractor. The use of the term
"Administrator" is for convenience only and is used to describe, as a form of
convention, the independent contractual relationship between the Administrator
and each of the Purchasers. Nothing contained in this Agreement nor the other
Transaction Documents shall be construed to create an agency, trust or other
fiduciary relationship between the Administrator and any of the Purchasers.
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(c) As an independent contractor empowered by the Purchasers to
exercise certain rights and perform certain duties and responsibilities
hereunder and under the other Transaction Documents, the Administrator is
nevertheless a "representative" of the Purchasers, as that term is defined in
Article 1 of the UCC, for purposes of actions for the benefit of the Purchasers
and the Administrator with respect to all collateral security and other matters
contemplated by the Transaction Documents that are or may be governed by or
subject to the UCC. Such actions include the designation of the Administrator as
"secured party", "mortgagee" or the like on all financing statements and other
documents and instruments, whether recorded or otherwise, relating to the
attachment, perfection, priority or enforcement of any security interests
intended to secure the payment or performance of any of the obligations arising
under the Transaction Documents, all for the benefit of the Purchasers and the
Administrator.
(d) The Administrator may exercise its powers and execute its duties by
or through employees or agents and shall be entitled to take, and to rely on,
advice of counsel concerning all matters pertaining to its rights and duties
under this Agreement and the other Transaction Documents. The Administrator may
utilize the services of such Persons as the Administrator in its sole discretion
may reasonably determine, and all reasonable fees and expenses of any such
Persons shall be paid by the Seller as contemplated by Section 14.5 hereof.
SECTION 11.2. ADMINISTRATOR'S RELIANCE, ETC. The Administrator and its
directors, officers, agents or employees shall not be liable for any action
taken or omitted to be taken by it or them under or in connection with the
Transaction Documents (including, without limitation, the servicing,
administering or collecting of Pool Receivables as Servicer pursuant to Section
8.1), except for its or their own gross negligence or willful misconduct.
Without limiting the generality of the foregoing, the Administrator: (a) may
consult with legal counsel (including counsel for Seller), independent certified
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (b) makes no warranty or
representation to the Purchasers or any other holder of any interest in Pool
Receivables and shall not be responsible to the Purchasers or any such other
holder for any statements, warranties or representations made in or in
connection with any Transaction Document; (c) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of any Transaction Document on the part of Seller, Feed,
or any other Originator or to inspect the property (including the books and
records) of Seller, Feed, or any other Originator; (d) shall not be responsible
to the Purchasers or any other holder of any interest in Pool Receivables for
the due execution, legality, validity, enforceability, genuineness, sufficiency
or value of any Transaction Document; and (e) shall incur no liability under or
in respect of this Agreement by acting upon any notice (including notice by
telephone), consent, certificate or other
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instrument or writing (which may be by facsimile or telex) believed by it to be
genuine and signed or sent by the proper party or parties.
SECTION 11.3. COBANK AND AFFILIATES. Each of Seller and Feed hereby
acknowledges and agrees that CoBank and any of its Affiliates may generally
engage in any kind of business with Seller, Feed, any other Originator or any
Obligor, any of their respective Affiliates and any Person who may do business
with or own securities of Seller, Feed, any other Originator or any Obligor or
any of their respective Affiliates, all as if CoBank were not the Administrator,
and without any duty to account therefor to the Purchasers or any other holder
of an interest in Pool Receivables.
ARTICLE XII. ASSIGNMENT OF AND PARTICIPATIONS IN
PURCHASERS' INTERESTS
SECTION 12.1. RESTRICTIONS ON ASSIGNMENTS; IMPACT ON PATRONAGE.
(a) (i) Neither Seller nor Feed may assign its rights, or delegate its
duties, hereunder or any interest herein without the prior written consent of
the Administrator. No Purchaser may assign its rights hereunder (although it may
delegate its duties hereunder as expressly indicated herein) or the Receivable
Interest (or any portion thereof) to any Person without the prior written
consent of Seller, which consent shall not be unreasonably withheld or delayed;
provided, however, that upon written notice to Seller, the Servicer and the
Administrator, any Purchaser may assign all of its rights and interests in the
Transaction Documents, together with all its interest in the Receivable
Interest, to (A) any other Purchaser or any Affiliate thereof, or (B) to any
"bankruptcy remote," special purpose entity the business of which is
administered by any other Purchaser or any Affiliate thereof, so long as such
entity has the ability to fund the Receivable Interest. If any Purchaser
notifies Seller and Feed that it has decided to assign its rights and delegate
its duties hereunder, in compliance with the foregoing provisions of this
subsection (a)(i), Seller and Feed hereby agree to enter into such amendments
hereto and to the other Transaction Documents as the Administrator may
reasonably request to reflect such assignment and delegation.
(ii) With respect to any patronage payments, each of Seller and the
Servicer acknowledges and agrees that:
(A) only that portion of the Capital represented by CoBank's
individual Pro Rata Share that is retained by CoBank for its own account is
entitled to patronage distributions in accordance with CoBank's bylaws and its
practices and procedures related to patronage distributions; and
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(B) any patronage, or similar, payments to which Seller or the
Servicer is entitled on account of its ownership of Bank Equity Interests or
otherwise will not be based on any portion of CoBank's interest in the Capital
in which CoBank has at any time granted a participation interest.
(b) Seller agrees to advise the Administrator, within ten (10) Business
Days after written notice to Seller, of any proposed assignment by any Purchaser
of the Receivable Interest (or any portion thereof) not otherwise permitted
under Section 12.1(a) of Seller's consent or withholding of such assignment and,
if Seller does not consent, the reasons therefor. If Seller does not respond in
such time period, Seller shall be deemed to have consented to such assignment.
All of the aforementioned assignments shall be upon such terms and conditions as
such Purchaser and the relevant assignee may mutually agree.
SECTION 12.2. RIGHTS OF ASSIGNEE. Upon the assignment by any Purchaser
in accordance with this Article XII, the assignee receiving such assignment
shall have all of the rights of a Purchaser with respect to the Transaction
Documents and the Receivable Interest (or such portion thereof as has been
assigned).
SECTION 12.3. PARTICIPATIONS.
(a) Each Purchaser may sell participations to one or more Persons in
all or a portion of such Purchaser's rights and obligations under this Agreement
and the other Transaction Documents; provided that any such sale or
participation shall not affect the rights and duties of the selling Purchaser
hereunder.
(b) All Persons ("Voting Participants") who (a) have directly,
purchased a participation interest in the amount of $10,000,000.00 or more in a
Purchaser's Pro Rata Share of the Receivables Interest and (b) have been
designated in writing to Seller, Servicer and the Administrator as having such
entitlement (as evidenced by their name and dollar participation amount
appearing on Schedule 12.3(b) hereto, as such Schedule 12.3(b) may be modified
by the Administrator from time to time), shall be entitled to vote (and such
Purchaser's voting rights shall be correspondingly reduced), on a dollar basis,
as if such participant were a Purchaser, on any matter requiring or allowing a
Purchaser to provide or withhold its consent, or to otherwise vote on any
proposed action.
ARTICLE XIII. INDEMNIFICATION
SECTION 13.1. INDEMNITIES.
(a) General Indemnity by Seller. Without limiting any other rights that
any such Person may have hereunder or under Applicable Law, Seller hereby agrees
to indemnify the Administrator, each of the Purchasers, each of their
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respective Affiliates, and all successors, permitted transferees, participants
and permitted assigns and all officers, directors, shareholders, controlling
persons, employees and agents of any of the foregoing (each an "Indemnified
Party"), within thirty (30) days after demand, from and against any and all
damages, losses, claims, liabilities and related costs and expenses, including
reasonable attorneys' fees and disbursements (all of the foregoing being
collectively referred to as "Indemnified Amounts") awarded against or incurred
by any of them arising out of or relating to the Transaction Documents or the
ownership or funding of the Receivable Interest or in respect of any Receivable
or any Contract, excluding, however, (i) Indemnified Amounts to the extent
resulting from gross negligence or willful misconduct on the part of such
Indemnified Party or (ii) Indemnified Amounts that have the effect of recourse
for non-payment of the Pool Receivables due to credit problems of the Obligors;
provided that Seller shall be liable to each Indemnified Party for all
representations, warranties, covenants and indemnities made by Seller pursuant
to the terms of this Agreement. Without limiting the foregoing, Seller shall
indemnify each Indemnified Party for Indemnified Amounts arising out of or
relating to:
(xi) the transfer by Seller of any interest in any Pool Receivable
other than the transfer of a Receivable Interest to the Administrator,
for the benefit of the Purchasers, pursuant to this Agreement and the
grant of a security interest to the Administrator pursuant to Section
9.1;
(xii) any representation or warranty made by Seller under or in
connection with any Transaction Document, any Servicer Report, any
Weekly Report or any other information or report delivered by or on
behalf of Seller pursuant hereto, which shall have been false,
incorrect or misleading in any respect when made or deemed made;
(xiii) the failure by Seller to comply with any Applicable Law, or the
nonconformity of any Pool Receivable or the related Contract with any
Applicable Law;
(xiv) the failure to vest and maintain vested in the Administrator, for
the benefit of the Purchasers, an undivided percentage ownership
interest, to the extent of the Receivable Interest, in the Pool Assets,
free and clear of any Lien, other than a Lien arising solely as a
result of an act of any Purchaser or the Administrator, whether
existing at the time of any Purchase or Reinvestment of such Receivable
Interest or at any time thereafter;
(xv) any failure to file, or any delay in filing, financing statements
or other similar instruments or documents under the UCC of any
applicable jurisdiction or other applicable laws with respect to any
Pool Assets, whether at the time of any Purchase or Reinvestment or at
any time thereafter;
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(xvi) any dispute, claim, offset or defense (other than discharge in
bankruptcy or payment) of the Obligor to the payment of any Receivable
included in the Net Pool Balance (including, without limitation, a
defense based on such Receivable or the related Contract not being a
legal, valid and binding obligation of such obligor enforceable against
it in accordance with its terms), or any other claim resulting from the
sale of the merchandise or services related to such Receivable or the
furnishing or failure to furnish such merchandise or services;
(xvii) any failure of Seller to perform its duties or obligations in
accordance with this Agreement or any Transaction Document;
(xviii) any products liability claim arising out of or in connection
with merchandise or services that are the subject of any Pool
Receivable;
(xix) any litigation, proceedings or investigation against Seller; or
(xx) any tax or governmental fee or charge (but not including taxes
upon or measured by net income or representing a franchise or
unincorporated business tax of such Person), all interest and penalties
thereon or with respect thereto, and all out-of-pocket costs and
expenses, including the reasonable fees and expenses of counsel in
defending against the same, which may arise by reason of the purchase
or ownership of any Receivable Interest, or any other interest in the
Pool Receivables or in any goods which secure any such Pool
Receivables.
(b) Indemnity by Servicer. Without limiting any other rights that any
such Person may have hereunder or under Applicable Law, Servicer hereby agrees
to indemnify each Indemnified Party, within thirty (30) days after demand, from
and against any and all Indemnified Amounts awarded against or incurred by any
of them arising out of or relating to (i) any representation or warranty made by
Servicer under or in connection with any Transaction Document, any Servicer
Report, any Weekly Report or any other information or report delivered by or on
behalf of Servicer pursuant hereto, which shall have been false, incorrect or
misleading in any material respect when made or deemed made, (ii) the failure by
Servicer to comply with any Applicable Law, (iii) the failure of Servicer to
perform its duties or obligations in accordance with this Agreement or any
Transaction Document or (iv) the commingling by Servicer or any Sub-Servicer of
any Collections with other funds.
(c) After-Tax Basis. Indemnification hereunder shall be in an amount
necessary to make the Indemnified Party whole after taking into account any tax
consequences to the Indemnified Party attributable to the receipt of the
indemnity provided hereunder, including the effect of such tax or refund on the
amount of tax
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measured by net income or profits which is or was payable by the Indemnified
Party.
(d) Contribution. If for any reason the indemnification provided above
in this Section 13.1 is unavailable to an Indemnified Party or is insufficient
to hold an Indemnified Party harmless, then Seller or Servicer, as the case may
be, shall contribute to the amount paid or payable by such Indemnified Party as
a result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits received by such
Indemnified Party on the one hand and Seller or Servicer, as the case may be, on
the other hand but also the relative fault of such Indemnified Party as well as
any other relevant equitable considerations.
ARTICLE XIV. MISCELLANEOUS
SECTION 14.1. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement nor consent to any departure by any party therefrom shall in
any event be effective unless the same shall be in writing and signed by (a)
Seller, the Administrator, Servicer and the Required Purchasers (with respect to
an amendment) or (b) the Administrator and the Required Purchasers (with respect
to a waiver or consent by them) or Seller and Servicer (with respect to a waiver
or consent by them), as the case may be, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided, that no waiver of a Termination Event shall be effective
unless in writing and signed by the Administrator and the Required Purchasers.
Notwithstanding the foregoing or any other provision of this Agreement or any
Transaction Document to the contrary, no amendment or waiver of any provision of
this Agreement, nor any consent to any departure by any party therefrom, that
would, or the effect of which would be to, (x) increase the Facility Limit or
otherwise increase the amount of, or extend the duration of (other than as the
result of any waiver duly made under this Agreement with respect to any
Termination Event or other event or circumstance that would otherwise have given
rise to the Purchase Termination Date), any Purchaser's commitment to make any
Purchase hereunder; (y) decrease the Yield Rate or the amount of any Fees
payable to any Purchaser under the Transaction Documents or (z) modify the
definition of, or otherwise limit or alter the matters subject to approval by,
the Required Purchasers, shall be effective unless consented to in writing by
each Purchaser affected thereby.
SECTION 14.2. NOTICES, ETC. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including facsimile communication) and shall be personally delivered or sent by
overnight delivery by a nationally recognized overnight delivery service, by
courier, or by facsimile (confirmed with a copy sent by overnight delivery), to
the intended party at the address or facsimile number of such party set forth
under its name on
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Schedule 14.2 or at such other address or facsimile number as shall be
designated by such party in a written notice to the other parties hereto. All
such notices and communications shall be effective, (a) if personally delivered
or sent by express mail or courier, when received, and (b) if transmitted by
facsimile, one-half Business Day after being sent, receipt confirmed by
telephone or electronic means.
SECTION 14.3. NO WAIVER; REMEDIES. No failure on the part of the
Administrator, any Affected Party, any Indemnified Party, any Purchaser or any
other holder of the Receivable Interest (or any portion thereof) to exercise,
and no delay in exercising, any right hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 14.4. BINDING EFFECT; SURVIVAL. This Agreement shall be binding
upon and inure to the benefit of Seller, Servicer, the Administrator, the
Purchasers and their respective successors and permitted assigns, and the
provisions of Section 4.2 and Article XIII shall inure to the benefit of the
Affected Parties and the Indemnified Parties, respectively, and their respective
successors and permitted assigns; provided, however, nothing in the foregoing
shall be deemed to authorize any assignment not permitted by Section 12.1.
This Agreement shall create and constitute the continuing obligations
of the parties hereto in accordance with its terms, and shall remain in full
force and effect until the Final Payout Date. The rights and remedies with
respect to any breach of any representation or warranty made by Seller or
pursuant to Article VI and the indemnification and payment provisions of Article
XIII and Sections 4.2, 14.5, 14.6, 14.7, 14.8 and 14.15 shall be continuing and
shall survive any termination of this Agreement.
SECTION 14.5. COSTS, EXPENSES AND TAXES. In addition to its obligations
under Article XIII, Seller or, to the extent applicable, Feed agrees to pay
within ten (10) Business Days after demand;
(a) all costs and expenses incurred (i) by the Administrator or any
Purchaser, or their respective Affiliates, in connection with the negotiation,
preparation, execution and delivery of, and (ii) by the Administrator, any
Purchaser and their respective Affiliates, in connection with the enforcement
after the occurrence of a Termination Event against Seller, Feed or the other
Originators, as the case may be, of, or any actual or claimed breach by Seller,
Feed or any other Originator, as the case may be, of, this Agreement and the
other Transaction Documents, including, without limitation (A) the reasonable
fees and expenses of counsel to any of such Persons incurred in connection with
any of the foregoing or in advising such Persons as to their respective rights
and remedies under any of the Transaction Documents, and (B) all reasonable
out-of-pocket expenses (including
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reasonable fees and expenses of independent accountants incurred in connection
with any review of Seller's, Feed's or any other Originator's, as the case may
be, books and records either prior to the execution and delivery hereof or
pursuant to Section 7.1(c) or otherwise); and
(b) all stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and recording of this
Agreement or the other Transaction Documents, and agrees to indemnify each
Indemnified Party against any liabilities with respect to or resulting from any
delay in paying or omission to pay such taxes and fees.
SECTION 14.6. NO PROCEEDINGS.
(a) Seller, Servicer, each Sub-Servicer and CoBank (individually and as
Administrator) each hereby agrees that it will not institute against any
Purchaser, or join any other Person in instituting against Purchaser, any
insolvency proceeding (namely, any proceeding of the type referred to in the
definition of Event of Bankruptcy) so long as any Capital shall be outstanding
or there shall not have elapsed one (1) year plus one (1) day since the last day
on which any such Capital shall have been outstanding.
(b) This Section 14.6 shall survive termination of this Agreement.
SECTION 14.7. CONFIDENTIALITY OF PROGRAM INFORMATION.
(a) Confidential Information. Each party hereto acknowledges that
CoBank regards the structure of the transactions contemplated by this Agreement
to be proprietary, and each such party severally agrees that:
(i) it will not disclose without the prior consent of CoBank or as is
required or authorized by the Transaction Documents (other than to the
directors, employees, agents, auditors, counsel or affiliates
(collectively, "representatives") of such party, each of whom shall be
informed by such party of the confidential nature of the Program
Information (as defined below) and of the terms of this Section 14.7),
(A) any information regarding the pricing in, or copies of, this
Agreement or any transaction contemplated hereby, (B) any information
regarding the organization, business or operations of the Purchasers
generally or the services performed by the Administrator for Purchaser,
or (C) any information which is furnished by CoBank to such party and
which is designated by CoBank to such party in writing or otherwise as
confidential or not otherwise available to the general public (the
information referred to in clauses (A), (B) and (C) is collectively
referred to as the "Program Information"); provided, however, that such
party may disclose any such Program Information: (I) to any other party
to this
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Agreement for the purposes contemplated hereby, (II) as may be required
by any Governmental Authority having or claiming to have jurisdiction
over such party, (III) in order to comply with Applicable Law,
including, without limitation, by filing the Transaction Documents with
the Securities and Exchange Commission (provided that none of Seller or
Feed shall file the Fee Letter, or, if required by Applicable Law to
file the Fee Letter, Seller or Feed, as the case may be, shall request
confidential treatment therefor) or (IV) subject to subsection (c), in
the event such party is legally compelled (by interrogatories, requests
for information or copies, subpoena, civil investigative demand or
similar process) to disclose any such Program Information;
(ii) it will use the Program Information solely for the purposes of
evaluating, administering and enforcing the transactions contemplated
by this Agreement and making any necessary business judgments with
respect thereto; and
(iii) it will, upon demand, return (and cause each of its
representatives to return) to CoBank, all documents or other written
material (other than documents executed by such party) received from
CoBank, as the case may be, in connection with (a)(i)(B) or (C) above
and all copies thereof made by such party which contain the Program
Information.
(b) Availability of Confidential Information. This Section 14.7 shall
be inoperative as to such portions of the Program Information which are or
become generally available to the public or such party on a nonconfidential
basis from a source other than CoBank or were known to such party on a
nonconfidential basis prior to its disclosure by CoBank.
(c) Legal Compulsion to Disclose. In the event that any party or anyone
to whom such party or its representatives transmits the Program Information is
requested or becomes legally compelled (by interrogatories, requests for
information or documents, subpoena, civil investigative demand or similar
process) to disclose any of the Program Information, such party will, to the
extent that it may legally do so,
(i) provide CoBank with prompt written notice so that CoBank may seek a
protective order or other appropriate remedy and/or waive compliance
with the provisions of this Section 14.7; and
(ii) unless CoBank waives compliance by such party with the provisions
of this Section 14.7, make a timely objection to the request or
confirmation to provide such Program Information on the basis that such
Program
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Information is confidential and subject to the agreements contained in
this Section 14.7.
In the event that such protective order or other remedy is not obtained, or
CoBank waives compliance with the provisions of this Section 14.7, such party
will furnish only that portion of the Program Information which (in such party's
good faith judgment) is legally required to be furnished and will exercise
reasonable efforts to obtain reliable assurance that confidential treatment will
be accorded the Program Information.
(d) Survival. This Section 14.7 shall survive termination of this
Agreement.
SECTION 14.8. CONFIDENTIALITY OF ORIGINATOR INFORMATION.
(a) Confidential Information. Each party hereto (including, without
limitation, any successor Servicer) acknowledges that the Originators regard
certain information to be proprietary, and each such party severally agrees
that:
(i) it will not disclose without the prior consent of Feed, or as is
required or authorized by the Transaction Documents (other than to the
directors, employees, agents, auditors, counsel or affiliates
(collectively, "representatives") of such party, each of whom shall be
informed by such party of the confidential nature of the Originator
Information (as defined below) and of the terms of this Section 14.8),
any information which is furnished by Feed, any other Originator or any
of their respective Subsidiaries to such party and which is designated
by the applicable Originator to such party in writing or otherwise as
confidential or not otherwise available to the general public
("Originator Information"); provided, however, that such party may
disclose (any such disclosure which identifies any Originator to
include a reference to the confidentiality provisions hereof) any such
Originator Information (A) to any other party to this Agreement for the
purposes contemplated hereby or any Person that might become a party to
the Agreement as contemplated by Article XII of this Agreement, (B) as
may be required by any Governmental Authority having or claiming to
have jurisdiction over such party, (C) in order to comply with any
Applicable Law, (D) subject to subsection (c), in the event such party
is legally compelled (by interrogatories, requests for information or
copies, subpoena, civil investigative demand or similar process) to
disclose any such Program Information or Originator Information, and
(E) to any Affected Party; and
(ii) it will use the Originator Information solely for the purposes of
evaluating, administering and enforcing the transactions contemplated
by
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this Agreement and the Transaction Documents and making any necessary
business judgments with respect thereto.
(b) Availability of Confidential Information. This Section 14.8 shall
be inoperative as to such portions of the Originator Information which are or
become generally available to the public or such party on a nonconfidential
basis from a source other than the applicable Originator were known to such
party on a nonconfidential basis prior to its disclosure by such Originator.
(c) Legal Compulsion to Disclose. In the event that any party or anyone
to whom such party or its representatives transmits the Originator Information
is requested or becomes legally compelled (by interrogatories, requests for
information or documents, subpoena, civil investigative demand or similar
process) to disclose any of the Originator Information, such party will, to the
extent that it may legally do so,
(i) provide Seller with prompt written notice so that it can notify
such Originator and such Originator may seek a protective order or
other appropriate remedy and/or waive compliance with the provisions of
this Section 14.8; and
(ii) unless Seller waives compliance by such party with the provisions
of this Section 14.8, make a timely objection to the request or
confirmation to provide such Originator Information on the basis that
such Originator Information is confidential and subject to the
agreements contained in this Section 14.8.
In the event that such protective order or other remedy is not obtained, or
Seller waives compliance with the provisions of this Section 14.8, such party
will furnish only that portion of the Originator Information which (in such
party's good faith judgment) is legally required to be furnished and will
exercise reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded the Originator Information.
(d) Survival. This Section 14.8 shall survive termination of this
Agreement.
SECTION 14.9. CAPTIONS AND CROSS REFERENCES. The various captions
(including, without limitation, the table of contents) in this Agreement are
provided solely for convenience of reference and shall not affect the meaning or
interpretation of any provision of this Agreement. Unless otherwise indicated,
references in this Agreement to any Section, Appendix, Schedule or Exhibit are
to such Section of or Appendix, Schedule or Exhibit to this Agreement, as the
case may be, and references in any Section, subsection, or clause to any
subsection, clause or
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subclause are to such subsection, clause or subclause of such Section,
subsection or clause.
SECTION 14.10. INTEGRATION. This Agreement and the other Transaction
Documents contain a final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and shall
constitute the entire understanding among the parties hereto with respect to the
subject matter hereof, superseding all prior oral or written understandings.
SECTION 14.11. GOVERNING LAW. THIS AGREEMENT, INCLUDING THE RIGHTS AND
DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF
COLORADO (WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF), EXCEPT TO THE EXTENT THAT THE PERFECTION
OF THE INTERESTS OF THE ADMINISTRATOR IN THE POOL ASSETS IS GOVERNED BY THE LAWS
OF THE JURISDICTION OTHER THAN THE STATE OF
COLORADO; AND, NOTWITHSTANDING THE
FOREGOING, PROVIDED THAT ALL MATTERS CONCERNING THE RIGHTS OF THE ADMINISTRATOR
AND THE PURCHASERS IN THE TRANSFERRED RECEIVABLES, AND MORE GENERALLY, THE ISSUE
OF WHETHER THE TRANSFERS OF THE INTERESTS IN THE RECEIVABLES AND RELATED RIGHTS
CONTEMPLATED IN THIS AGREEMENT CONSTITUTE TRUE SALES OR ABSOLUTE TRANSFERS,
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF MINNESOTA.
SECTION 14.12. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY OTHER TRANSACTION
DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED OR WHICH MAY
BE IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING
OR OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT A JURY TRIAL.
SECTION 14.13. CONSENT TO JURISDICTION; WAIVER OF IMMUNITIES. EACH OF
FEED AND SELLER HEREBY ACKNOWLEDGES AND AGREES THAT:
(a) IT HEREBY IRREVOCABLY (i) SUBMITS TO THE NONEXCLUSIVE JURISDICTION
OF ANY
COLORADO OR UNITED STATES FEDERAL COURT SITTING IN
COLORADO, OVER ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY TRANSACTION
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DOCUMENT; (ii) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN SUCH STATE OR UNITED STATES FEDERAL COURT; (iii)
WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING; (iv) CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO SUCH PERSON AT
ITS ADDRESS SPECIFIED IN SECTION 14.2; AND (v) TO THE EXTENT ALLOWED BY LAW,
AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS SECTION 14.13 SHALL AFFECT
THE ADMINISTRATOR'S OR ANY PURCHASER'S RIGHT TO SERVE LEGAL PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO BRING ANY ACTION OR PROCEEDING AGAINST ANY OF
SELLER OR FEED OR ITS OR THEIR PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTIONS.
(b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY
FROM THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH
SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID TO EXECUTION,
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, IT HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER OR IN
CONNECTION WITH THIS AGREEMENT.
SECTION 14.14. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by the different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
agreement.
SECTION 14.15. NO RECOURSE AGAINST OTHER PARTIES. No recourse under any
obligation, covenant or agreement of any Purchaser contained in this Agreement
shall be had against any stockholder (solely in its capacity as stockholder),
employee, officer, director, member or incorporator of such Purchaser, provided,
however, that nothing in this Section 14.15 shall relieve any of the foregoing
Persons from any liability which such Person may otherwise have for his/her or
its gross negligence or willful misconduct.
[SIGNATURE PAGES FOLLOW ON NEXT PAGE]
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
LOL FARMLAND FEED SPV, LLC,
as Seller
By: /s/ XXXXXX XXXXXXX
-------------------------------
Name Printed: Xxxxxx Xxxxxxx
---------------------
Title: Chief Financial Officer
----------------------------
LAND O'LAKES FARMLAND FEED LLC,
as initial Servicer
By: /s/ XXXXXX XXXXXXX
-------------------------------
Name Printed: Xxxxxx Xxxxxxx
---------------------
Title: Chief Financial Officer
----------------------------
COBANK, ACB, as a Purchaser and as
Administrator
By:
-------------------------------
Name Printed:
---------------------
Title:
----------------------------
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
LOL FARMLAND FEED SPV, LLC,
as Seller
By:
-------------------------------
Name Printed:
---------------------
Title:
----------------------------
LAND O'LAKES FARMLAND FEED LLC,
as initial Servicer
By:
-------------------------------
Name Printed:
---------------------
Title:
----------------------------
COBANK, ACB, as a Purchaser and as
Administrator
By: /s/ XXXXXXX XXXXXXXXXX
-------------------------------
Name Printed: Xxxxxxx Xxxxxxxxxx
---------------------
Title: Vice President
----------------------------
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CORPORATE CREDIT, LLC, as Sub-
Servicer
By: /s/ XXXXXX XXXXXXX
-------------------------------
Name Printed: Xxxxxx Xxxxxxx
---------------------
Title: President
----------------------------
PURINA XXXXX, LLC, as Sub-Servicer
By: /s/ XXXXXX XXXXXXX
-------------------------------
Name Printed: Xxxxxx Xxxxxxx
---------------------
Title: Senior VP and CFO
----------------------------
LAND O'LAKES INC., as Sub-Servicer
By: /s/ XXXXXX XXXXXXX
-------------------------------
Name Printed: Xxxxxx Xxxxxxx
---------------------
Title: Senior VP and CFO
----------------------------
EXECUTION COPY
APPENDIX A
DEFINITIONS
This is Appendix A to the Amended and Restated
Receivables Purchase
Agreement dated as of March 31, 2004 (the "Agreement"), among LOL Farmland Feed
SPV, LLC, as Seller, Land O'Lakes Farmland Feed LLC, as initial Servicer,
CoBank, ACB, and the other Persons from time to time party thereto as Purchasers
(the "Purchasers"), and CoBank, ACB, as Administrator (as amended, supplemented
or otherwise modified from time to time, the "Agreement"). Unless otherwise
indicated, all Section, Exhibit and Schedule references in this Appendix are to
Sections of and Exhibits and Schedules to the Agreement.
A. Defined Terms. As used in the Agreement, unless the context requires
a different meaning, the following terms have the meanings indicated below:
"Accounts" means all "accounts" as defined in the UCC.
"Administrator" has the meaning set forth in the preamble.
"Administrator's Account" has the meaning set forth in Section 3.3(a).
"Administrator's Office" means the office of the Administrator at 0000
Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000, or such other address as
shall be designated by the Administrator in writing to Seller and Purchasers.
"Affected Party" means each of the Purchasers, any assignee or
participant of any Purchaser, CoBank, any successor to CoBank as Administrator,
and any subagent of the Administrator.
"Affiliate" when used with respect to a Person means any other Person,
directly or indirectly, controlling, controlled by, or under common control with
such Person, except, when used with respect to the Seller, Affiliate shall mean
Feed, each of the other Originators and all Subsidiaries of Feed or any other
Originator.
"Allocation Limit" has the meaning set forth in Section 1.1.
"Alternate Base Rate" means, on any date, a fluctuating annual rate of
interest equal to the greatest of (a) the prime rate announced by CoBank as its
"prime rate" in effect on such day, (b) the Base CD Rate in effect on such day
plus one percent (1%) and (c) the Federal Funds Effective Rate in effect on such
day plus
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one-half of one percent (1/2 of 1%). Any change in the Alternate Base Rate due
to a change in the prime rate, the Base CD Rate or the Federal Funds Effective
Rate shall be effective from and including the effective date of such change in
the prime rate, the Base CD Rate or the Federal Funds Effective Rate,
respectively. The Alternate Base Rate, whether or not determined by reference to
the prime rate, is not necessarily intended to be the lowest rate of interest
determined or offered by CoBank in connection with extensions of credit.
"Applicable Law" means all existing and future applicable laws, rules,
regulations (including proposed, temporary and final income tax regulations),
statutes, treaties, codes, ordinances, permits, certificates, orders and
licenses of and interpretations by any Governmental Authority, and applicable
judgments, decrees, injunctions, writs, orders or like action of any court,
arbitrator or other administrative, judicial or quasi-judicial tribunal or
agency of competent jurisdiction.
"Assessment Rate" means, for any day, the annual assessment rate in
effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
for insurance by such Corporation of time deposits made in dollars at the
offices of such member in the United States; provided that if, as a result of
any change in any law, rule or regulation, it is no longer possible to determine
the Assessment Rate as aforesaid, then the Assessment Rate shall be such annual
rate as shall be determined by the Administrator to be representative of the
cost of such insurance to the Purchasers.
"Bank Equity Interest" is defined in Section 7.1(k).
"Base CD Rate" means the sum of (a) the Three-Month Secondary CD Rate
multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Business Day" means a day other than a Saturday or a Sunday on which
both (a) the Administrator at its principal office in Greenwood Village,
Colorado is open for business and (b) commercial banks in New York, New York and
Greenwood Village,
Colorado are not authorized or required to be closed for
business.
"Capital" means at any time with respect to the Receivable Interest an
amount equal to (a) the aggregate of the amounts theretofore paid to Seller for
Purchases pursuant to Section 1.1, less (b) the aggregate amount of Collections
theretofore received and actually distributed to the Purchasers on account of
the Capital pursuant to Section 3.1.
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"Capitalized Lease Obligation" means any Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.
"Change in Control" means the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Exchange Act and the rules of the Securities and Exchange
Commission thereunder as in effect on the date hereof), of membership interests
representing more than 50% of the aggregate ordinary voting power represented by
all outstanding membership interests of LOL.
"CoBank" has the meaning set forth in the preamble.
"Collection Corp" means Corporate Credit, LLC, a Delaware limited
liability company.
"Collections" means, with respect to any Pool Receivable, all funds
that either (a) are received by Seller, Servicer, an Originator or any other
Person from or on behalf of the related Obligors in payment of any amounts owed
(including, without limitation, purchase prices, finance charges, interest and
all other charges) in respect of such Receivable, or applied to such amounts
owed by such Obligors (including, without limitation, insurance payments that
Seller, an Originator or Servicer applies in the ordinary course of its business
to amounts owed in respect of such Receivable and net proceeds of sale or other
disposition of repossessed goods or other collateral or property of the Obligor
or any other party directly or indirectly liable for payment of such Receivable
and available to be applied thereon), or (b) are deemed to have been received by
Seller or any other Person as a Collection pursuant to Section 3.2.
"Commitment Fee" has the meaning set forth in Section 4.1(b).
"Concentration Limit" for any Obligor at any time means an amount equal
to (i) the aggregate Unpaid Balance of all Eligible Receivables at such time,
times (ii) four percent (4.0%). Any amounts of Eligible Receivables of any
Obligor above the limit specified above will be deemed "Excess Concentrations".
"Consolidated" means the consolidation in accordance with GAAP of the
accounts or other items as to which such term applies.
"Contract" means a contract between an Originator and any Person, or an
invoice from an Originator to any Person, or any purchase order from any Person
to an Originator pursuant to or under which such Person shall be obligated to
make payments to an Originator. A "related" Contract with respect to the
Receivables means a Contract under which Receivables in the Receivables Pool
arise, which
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evidence such Receivables, or which is relevant to the collection or enforcement
of such Receivables.
"Contractual Obligation" with respect to any Person, means any
provision of any securities issued by such Person or any indenture, mortgage,
deed of trust, or material contract, undertaking, agreement, instrument or other
document to which such Person is party or by which it or any of its property is
bound or is subject.
"Credit and Collection Policy" means, with respect to each Originator,
those credit and collection policies and practices set forth on Schedule 7.1(g),
relating to Contracts and Receivables of such Originator, as modified without
violating Section 7.3(c).
"Cross-Aging Policy" means an exclusion of Receivables of a particular
Obligor that otherwise constitute Eligible Receivables in the event that more
than fifty percent (50%) of such Obligor's outstanding Receivables are
Delinquent Receivables.
"Current Assets" at any date means the amount at which all of the
current assets of a Person would be properly classified as current assets on a
balance sheet at such date in accordance with GAAP, except that amounts due from
Affiliates, investments in Affiliates and prepaid expenses shall be excluded
therefrom.
"Cut-Off Date" means the Friday of each calendar week.
"Days Sales Outstanding" means, at any date of determination, the prior
month's Sales divided by current month's collections, times 30.
"Dairy Receivables" means Receivables described in clause (iii) of the
definition of "Receivables."
"Deemed Collection" has the meaning set forth in Section 3.2.
"Default Rate" shall mean, at any date of determination, a rate equal
to the then applicable Yield Rate, plus two percent (2%) per annum; provided,
that in no event shall the Default Rate exceed the maximum rate permissible
under any Applicable Law (the "Maximum Rate") and to the extent that application
of the first clause of this definition would cause the rate to exceed the
Maximum Rate, the rate payable shall be limited to the Maximum Rate.
"Defaulted Receivable" means: (a) a Receivable as to which any payment,
or part thereof, remains unpaid for more than sixty (60) days from the original
due date, (b) as to which the Obligor thereof is the subject of an Event of
Bankruptcy, or (c) that has been charged off the Seller's or the applicable
Obligor's books as
-5-
uncollectible or otherwise deferred or extended, other than in accordance with
the applicable Credit and Collection Policy or with the Administrator's prior
written consent.
"Delinquent Receivable" means a Receivable that is not a Defaulted
Receivable and as to which any payment, or part thereof, remains unpaid for more
than thirty (30) days after the original due date for such payment.
"Dilution" means any credit, adjustment, rebate, refund or setoff with
respect to any Receivable granted or allowed by Seller or any Originator.
"Dilution Reserve" means, at any time, an amount equal to the sum of
(i) forty percent (40%) of the Net Pool Balance attributable to Seed Receivables
and (ii) (A) the Net Pool Balance attributable to Feed Receivables and Dairy
Receivables at such time times (B) the Dynamic Dilution Reserve Percentage;
where
Dynamic Dilution Reserve Percentage is calculated as:
SF x ED, where:
SF = (a) 1.0 times or (b) in the event that the Sales-Based
Dilution Ratio attributable to Feed Receivables and Dairy Receivables for the
month ending on the most recent Cut-Off Date is greater than or equal to twenty
percent (20%), 1.5 times; provided, however, that is such case the Dynamic
Dilution Reserve Percentage shall be capped at twenty percent (20%); and
ED = Expected Dilution which, expressed as a percentage, shall
be calculated as the 12-month rolling average Sales-Based Dilution Ratio
attributable to Feed Receivables and Dairy Receivables.
"Dollars" means dollars in lawful money of the United States of
America.
"Eligible Receivable" means, at any time, a Receivable:
(a) that is originated by an Originator in the ordinary course
of its business;
(b) that constitutes an "account," and is not a "general
intangible," or evidenced by a note or other "instrument" or "chattel paper," as
each such term is defined in the UCC;
(c) the Obligor of which is (i) located in the United States,
(ii) not in default of any indebtedness owed to any Purchaser, (iii) not an
Affiliate of Seller or
-6-
any Originator, but only to the extent that such Receivables referred to in this
clause (iii) are in excess of seven percent (7%) of the aggregate Unpaid Balance
of Pool Receivables and (iv) not a Governmental Authority, except as specified
on Schedule I, as amended and in effect from time to time;
(d) that was purchased or otherwise acquired by Seller
pursuant to the Purchase and Sale Agreement and which was designated by the
related Originator as an "Eligible Receivable" pursuant to the Purchase and Sale
Agreement;
(e) that is neither a Defaulted Receivable nor a Delinquent
Receivable;
(f) that is not excluded pursuant to the Cross-Aging Policy;
(g) with respect to which the warranty of Seller in Section
6.1(k) is true and correct and as to which there exists no asserted dispute,
offset or claim by the Obligor or any other Person;
(h) the sale or assignment of which, or of an undivided
interest in which, does not contravene or conflict with Applicable Law, or
require the consent of the Obligor or any other Person;
(i) that is denominated and payable only in Dollars in the
United States;
(j) that arises under a Contract with payment and other terms
relating to the validity or collectibility of the Receivables thereunder
complying in all respects with the standards therefor in Schedule II (or as
otherwise consented to by the Administrator in writing), which has been duly
authorized by the parties thereto and that, together with such Receivable, is in
full force and effect and constitutes the legal, valid and binding obligation of
the Obligor of such Receivable enforceable against such Obligor in accordance
with its terms and is not subject to any defense whatsoever (other than
discharge in bankruptcy and payment);
(k) that, together with the Contract related thereto, does not
contravene in any material respect any Applicable Law and with respect to which
neither the Originator nor, to the Originator's knowledge, any other party to
the Contract related thereto is in violation of any Applicable Law;
(l) that satisfies all material applicable requirements of the
applicable Credit and Collection Policy;
-7-
(m) as to which the original payment terms have not been
altered, extended or modified;
(n) the Unpaid Balance of which is payable either (i) within
sixty (60) days or less from the invoice date in the case of Feed Receivables
and Dairy Receivables or (ii) within two hundred and forty (240) days or less
from the invoice date for Seed Receivables;
(o) that represents a bona fide obligation arising from the
completion of the sale and delivery of products or provision of services
specified in the definition of "Receivables" and that do not represent an
invoice in advance of such completion;
(p) that are not subject to any contingent performance
requirements of the Seller or the related Originator unless such requirements
are guaranteed or insured by third parties acceptable to the Administrator;
(q) in which the Administrator's security interest, for the
benefit of the Purchasers, has been perfected; and
(r) that relates to the feed, seed or dairy business, but not
the swine business, of the related Originator.
"Event of Bankruptcy" shall be deemed to have occurred with respect to
a Person if either:
(a) any case or other proceeding shall be commenced, without
the application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding up, or
composition or readjustment of debts of such Person, the appointment of a
trustee, receiver, custodian, liquidator, assignee, sequestrator or the like for
such Person or all or substantially all of its assets, or any similar action
with respect to such Person under any law relating to bankruptcy, insolvency,
reorganization, winding up or composition or adjustment of debts, and such case
or proceeding shall continue undismissed, or unstayed and in effect, for a
period of at least sixty (60) consecutive days; or an order for relief in
respect of such Person shall be entered in an involuntary case under the federal
bankruptcy laws or other similar laws now or hereafter in effect and shall
either not be contested or shall remain undismissed for sixty (60) consecutive
days; or
(b) such Person shall commence a voluntary case or other
proceeding under any applicable bankruptcy, insolvency, reorganization, debt
arrangement, dissolution or other similar law now or hereafter in effect, or
shall consent to the appointment of or taking possession by a receiver,
liquidator,
-8-
assignee, trustee, custodian, sequestrator (or other similar official) for such
Person or for any substantial part of its property, or shall make any general
assignment for the benefit of creditors, or shall fail to, or admit in writing
its inability to, pay its debts generally as they become due, or, if a
corporation or similar entity, its board of directors shall vote to implement
any of the foregoing.
"Excess Amount" as of any date, means the amount, if any, by which the
sum of the Capital, plus the Required Reserves on such date exceeds the Net Pool
Balance, as most recently calculated.
"Excess Concentrations" has the meaning set forth in the definition of
"Concentration Limit".
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended.
"Existing
Receivables Purchase Agreement" has the meaning set forth in
the recitals.
"Facility Limit" has the meaning set forth in Section 1.1.
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrator from three Federal funds brokers of
recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto or to the functions thereof.
"Feed" has the meaning set forth in the preamble.
"Feed Receivables" means Receivables described in clause (i) of the
definition of "Receivables."
"Fee Letter" has the meaning set forth in Section 4.1(a).
"Fees" means any and all fees payable to or for the account of the
Administrator or the Purchasers pursuant to the Fee Letter or this Agreement
(including, without limitation, the Commitment Fee), which fees, unless
otherwise specified in the Fee Letter with respect to fees addressed there,
shall be payable
-9-
upon, and shall accrue in respect of the Settlement Period ending upon, each
Settlement Date.
"Final Payout Date" means the date following the Termination Date on
which the Capital shall have been reduced to zero and all other amounts payable
by Seller to the Purchasers, the Administrator, the Affected Parties and the
Indemnified Parties under the Transaction Documents shall have been indefeasibly
paid in full.
"Floor Reserve" means, at any time, an amount equal to the Net Pool
Balance at such time, times fifteen percent (15%).
"GAAP" means generally accepted accounting principles as in effect in
the United States from time to time and consistently applied.
"Governmental Action" means all permits, authorizations, registrations,
consents, approvals, waivers, exceptions, variances, orders, judgements,
decrees, licenses, exemptions, publications, filings, notices to and declaration
of or with, or required by, any Governmental Authority, or required by any
Applicable Law.
"Governmental Authority" means any foreign or domestic federal, state,
county, municipal or other governmental or regulatory authority, agency, board,
body, commission, instrumentality, court or any political subdivision thereof.
"Indebtedness" as applied to a Person means, without duplication, all
items which in accordance with GAAP would be included in determining total
liabilities as shown on the liability side of a balance sheet of such Person as
at the date as of which Indebtedness is to be determined, including, without
limitation,
(i) Capitalized Lease Obligations;
(ii) all obligations of other Persons which such Person has
guaranteed;
(iii) all reimbursement obligations in connection with letters
of credit or letter of credit guaranties issued for the
account of such Person, and
(iv) in the case of LOL and its Subsidiaries (without
duplication), all obligations under (or permitted under) the
XX Xxxxxx Credit Documents, as in effect on the Initial
Purchase Date.
"Indemnified Amounts" has the meaning set forth in Section 13.1.
"Indemnified Party" has the meaning set forth in Section 13.1.
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"Independent Director" shall mean an individual who is not, and never
was, (1) a member, stockholder, director, officer, employee, Affiliate, customer
or supplier of, or an individual that has received any benefit (excluding,
however, any compensation received in such individual's capacity as Independent
Director) in any form whatever from, or an individual who has provided any
service (excluding, however, any service provided by such individual in such
individual's capacity as Independent Director) in any form whatever to, Feed or
any of its subsidiaries or Affiliates, or (2) an individual owning beneficially,
directly or indirectly, any interest in Feed, or a stockholder, director,
officer, employee, Affiliate, customer or supplier thereof, or an individual who
has received any direct economic benefit (excluding, however, any compensation
received in such individual's capacity as Independent Director) in any form
whatever from, or an individual who has provided any service (excluding,
however, any service provided by such individual in such individual's capacity
as Independent Director) in any form whatever to, such beneficial owner or any
of such beneficial owner's Affiliates, or (3) an individual who is a relative or
spouse of an individual described in clause (1) or (2) above.
"Initial Purchase Date" has the meaning set forth in Section 3.1(a),
"XX Xxxxxx Credit Documents" means (i) the Credit Agreement dated as of
October 11, 2001, by and among LOL, as Borrower, the several Lenders party
thereto, and XX Xxxxxx Chase Bank, as Administrative Agent , and (ii) the
Amended and Restated Five-Year Credit Agreement dated as of October 11, 2001,
among LOL, the lenders party thereto, XX Xxxxxx Xxxxx Bank, as Administrative
Agent, and CoBank, as Collateral Agent, in each case together with the various
agreements, instruments and documents executed and delivered in connection
therewith, and in each case as amended, amended and restated, supplemented or
otherwise modified from time to time.
"LIBOR" means, with respect to the initial Settlement Period the rate
of interest (expressed as an annual rate and rounded upwards, if necessary, to
the nearest 1/16th of 1%) at which deposits in Dollars would be offered by
principal London offices of banks at approximately 11:00 A.M. (London time) on
the first day of the Settlement Period or portion thereof for the period from
that day to the next Settlement Date. For periods which extend from one
Settlement Date to the next Settlement Date, the applicable rate will be the
one-month LIBOR rate which appears on Telerate page 3750 as of 9:00 A.M.
(Denver, Colorado time) or as soon thereafter as practicable. For periods which
begin on a day other than a Settlement Date, the applicable rate will be the
rate equal to the average (rounded up to the nearest 1/16th of 1%) of the rates
shown on the display referred to as the "LIBOR" page (or any display substituted
therefor) of the Telerate matrix (presently page 5) for a period of time from
that day to the next Settlement Date. The determination
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of the applicable LIBOR rate by the Administrator shall be conclusive in the
absence of demonstrable error.
"LIBOR Business Day" means a day of the year on which dealings are
carried on in the London interbank market and banks are open for business in
London and are not required or authorized to close in Xxxxxxxxx Xxxxxxx,
Xxxxxxxx xx Xxx Xxxx Xxxx.
"LIBOR Rate" means, with respect to any Settlement Period and any
portion of the Capital, a rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) determined pursuant to the following formula:
LIBOR Rate = LIBOR
-----
1 - LIBOR Reserve Percentage
"LIBOR Reserve Percentage" means, with respect to any Settlement
Period, the then maximum reserve percentage (expressed as a decimal, rounded
upward to the nearest 1/100th of 1%) prescribed by the Federal Reserve Board for
determining the maximum reserve requirements applicable to "Eurocurrency
Liabilities" pursuant to Regulation D having a term comparable to such
Settlement Period.
"Lien" means any mortgage, lien, pledge, encumbrance, charge, title
retention or other security interest of any kind, whether arising under a
security agreement, mortgage, deed of trust, assignment, pledge or financing
statement or arising as a matter of law, judicial process or otherwise.
"Liquidation Fee" means, for each day in any Settlement Period
following the occurrence of a Termination Event, the amount, if any, by which:
(a) the additional Yield (calculated without taking into
account any Liquidation Fee) which would have accrued on the reductions of
Capital during such Settlement Period (as so computed) if such reductions had
not been made, exceeds
(b) the income, if any, received by the Purchasers from
investing the proceeds of such reductions of Capital.
"Lockbox" means any post office box to which Collections of Pool
Receivables are sent.
"Lockbox Account" means any bank account to which Collections of Pool
Receivables are sent or deposited that is the subject of an executed and
effective Seller Lockbox Agreement.
-12-
"Lockbox Agreement" means a letter agreement, in substantially the form
of Exhibit 5.1(f) or otherwise in form and substance acceptable to the
Administrator, among Seller, the applicable Originator(s) (if any) and the
applicable Lockbox Bank.
"Lockbox Bank" means any of the banks holding one or more Lockbox
Accounts for receiving Collections from Pool Receivables.
"LOL" means Land O'Lakes, Inc., a Minnesota cooperative corporation.
"LOL Downgrade" means that LOL's long-term secured senior debt rating
is rated below B+ or the equivalent by both Xxxxx'x Investor Service, Inc. and
Standard & Poor's Ratings Services or is so rated by one of these rating
agencies if such debt is not then rated by the other rating agency.
"Loss Reserve" means at any time, an amount equal to the Net Pool
Balance at such time, times the Dynamic Loss Reserve Percentage, where:
Dynamic Loss Reserve Percentage means a percentage calculated
as the product of: (i) the Loss Ratio, times; (ii) the Stress Factor, where:
Loss Ratio = the most recent 12-month rolling average
Sales-Based Default Ratio;
Stress Factor = 1.0 x.
"Material Adverse Effect" with respect to any event or circumstance,
means
(a) a material adverse effect on:
(i) the business, financial condition, assets, or operations
of LOL. Feed and their Subsidiaries, taken as a whole;
(ii) the ability of Servicer, Seller or any Originator to
perform its obligations under this Agreement or any other
Transaction Document;
(iii) the validity, enforceability or collectibility of this
Agreement or any other Transaction Document or the validity,
enforceability or collectibility of the Receivables, taken as
a whole; or
(iv) the status, existence, perfection, priority or
enforceability of the Administrator's or any Purchaser's
interest in the Pool Assets; or
(b) the occurrence of any event or circumstance that constitutes an
Originator Material Adverse Effect under the Purchase and Sale Agreement.
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"Net Pool Balance" at any time means an amount equal to (i) the
aggregate Unpaid Balance of the Eligible Receivables in the Receivables Pool at
such time, minus (ii) the aggregate amount of Excess Concentrations.
"Obligor" means a Person obligated to make payments with respect to a
Receivable, including any guarantor thereof.
"Originator Information" has the meaning set forth in Section
14.8(a)(i).
"Originator(s)" means LOL, Feed, Purina Xxxxx, LLC or any other Person
which is or at any time hereafter becomes a party to the Purchase and Sale
Agreement, in its capacity as an originator of Receivables.
"Person" means an individual, partnership, limited liability
partnership, corporation (including a business trust), joint stock company,
trust, unincorporated association, joint venture, limited liability company,
government or any agency or political subdivision thereof or any other entity.
"Pool Assets" has the meaning set forth in Section 1.4(a).
"Pool Receivable" means a Receivable in the Receivables Pool.
"Pro Rata Share" means, with respect to any amount, the percentage set
forth next to each Purchaser's name on Schedule 1 from time to time,
representing such Purchaser's percentage interest in the overall amount of the
Purchasers' Share.
"Program Information" has the meaning set forth in Section 14.7(a)(i).
"Property" or "Properties" means any interest in any kind of property
or asset, whether real, personal or mixed, or tangible or intangible.
"Purchase" has the meaning set forth in Section 1.1.
"Purchase and Sale Agreement" means the Purchase and Sale Agreement,
dated as of December 18, 2001, as amended by a First Amendment to Purchase and
Sale Agreement dated as of the date hereof, between the Originators as the
"Originators", LOL as the initial "Servicer" and Seller as the "Purchaser" under
such Agreement, as the same may be amended, amended and restated, supplemented
or otherwise modified from time to time.
"Purchase Date" has the meaning set forth in Section 1.2(a).
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"Xxxxxxxx Xxxxxx" has the meaning set forth in Section 1.1.
"Purchase Termination Date" means that day:
(a) the Administrator declares a Purchase Termination Date in
a notice to Seller in accordance with Section 10.2(a); or
(b) in accordance with Section 10.2(b), becomes the Purchase
Termination Date automatically.
"Purchaser" has the meaning set forth in the preamble.
"Purchasers' Share" of any amount means the then Receivable Interest,
expressed as a percentage, (but not greater than 100%), times such amount.
"Receivables" means (i) Accounts related to the feed businesses of the
Originators, including, but not limited to, Accounts generated from the sale of
animal feed and feed ingredients, soybean meal, premixes, non-grain and protein
ingredients, grains, vitamins, minerals, branded feed products, complete feed
products, milk replacer products, feed additives, animal health products, farm
supply products, toll milling services and other feed related services and the
proceeds thereof, (ii) Accounts related to the seed business of LOL including,
but not limited to, Accounts generated from the sale of Seed, licensing fees and
seed related services and the proceeds thereof, and (iii) Accounts related to
the dairy business of the Originators, including but not limited to retail and
commercial Accounts generated from the sale of fluid milk, and (iv) Accounts
related to the swine businesses of the Originators, including, but not limited
to, Accounts generated from the sale of swine and swine related services and the
proceeds thereof; provided, however, that "Receivables" related to the swine
businesses of LOL and Feed shall not include any such right to payment where
payments have been sent to a lockbox or lockbox account other than (a) the
Corporate Credit, LLC lockbox #7402 located at Xxxxx Fargo Bank, (b) the
Corporate Credit, LLC account #635-0000000, (c) LOL's lockbox #7792 located at
Xxxxx Fargo Bank or (d) LOL's account #2391445901 at Xxxxx Fargo Bank.
Indebtedness and other obligations arising from any one transaction, including,
without limitation, indebtedness and other obligations represented by an
individual invoice or agreement, shall constitute a Receivable separate from a
Receivable consisting of the indebtedness and other obligations arising from any
other transaction.
"Receivable Interest" means an undivided ownership interest determined
from time to time as provided in Section 1.4(b) in all Pool Assets.
"Receivables Pool" means at any time all then outstanding Receivables,
other than Reconveyed Receivables.
-15-
"Reconveyed Receivable" means any Receivable for which the related
Originator has paid the full Unpaid Balance pursuant to the Purchase and Sale
Agreement.
"Regulation D" means Regulation D of the Federal Reserve Board, or any
other regulation of the Federal Reserve Board that prescribes reserve
requirements applicable to nonpersonal time deposits or "Eurocurrency
Liabilities" as presently defined in Regulation D, as in effect from time to
time.
"Regulatory Change" means, relative to any Affected Party:
(a) any change in (or the adoption, implementation, change in
phase-in or commencement of effectiveness of) any
(i) United States federal, state or local law or
foreign law applicable to such Affected Party, including,
without limitation, with respect to the scope, calculation,
application, creation or modification of any national, state
or local tax or government charge or imposition of any type or
kind;
(ii) regulation, interpretation, directive,
requirement or request (whether or not having the force of
law) applicable to such Affected Party of (A) any court,
government authority charged with the interpretation or
administration of any law referred to in clause (i) above or
of (B) any fiscal, monetary or other authority having
jurisdiction over such Affected Party; or
(iii) GAAP or regulatory accounting principles
applicable to such Affected Party and affecting the
application to such Affected Party of any law, regulation,
interpretation, directive, requirement or request referred to
in clause (i) or (ii) above; or
(b) any change in the application to such Affected Party of
any existing law, regulation, interpretation, directive, requirement, request or
accounting principles referred to in clause (i), (ii) or (iii) above.
"Reinvestment" has the meaning set forth in Section 1.3(a)(iii).
"Related Rights" has the meaning set forth in the Purchase and Sale
Agreement.
"Related Security" means, with respect to any Pool Receivable: (a) all
of Seller's or the related Originator's right, title and interest in and to all
Contracts
-16-
that relate to such Pool Receivable; (b) all security interests or liens and
property subject thereto from time to time purporting to secure payment of such
Pool Receivable, whether pursuant to the Contract related to such Pool
Receivable or otherwise; (c) all UCC financing statements covering any
collateral securing payment of such Pool Receivable; (d) all guarantees and
other agreements or arrangements of whatever character from time to time
supporting or securing payment of such Pool Receivable whether pursuant to the
Contract related to such Pool Receivable or otherwise; and (e) all of Seller's
and Feed's interest in the merchandise (including returned merchandise), if any,
relating to the sale that gave rise to such Pool Receivable.
"Reporting Date" has the meaning set forth in Section 3.1(a).
"Required Purchasers" means those Purchasers at any time holding Pro
Rata Shares constituting, in the aggregate, not less than fifty-one percent
(51%) of the overall amount of the Purchasers' Share.
"Required Reserves" means, at any time, an amount equal the greater of
(i) the Loss Reserve plus the Dilution Reserve plus the Yield Reserve, and (ii)
the Floor Reserve, in each case as most recently calculated.
"Sales" means sales of the Originators which generate Receivables.
"Sales-Based Default Ratio" means, as of any Cut-Off Date, the ratio,
expressed as a percentage, of (i) the aggregate Unpaid Balance of all Defaulted
Receivables for the month ending on such Cut-Off Date, divided by (ii) the
average monthly Sales over the preceding twelve (12) months.
"Sales-Based Delinquency Ratio" means, as of any Cut-Off Date, the
ratio, expressed as a percentage, of (i) the aggregate Unpaid Balance of all
Delinquent Receivables for the month ending on such Cut-off Date, divided by
(ii) the average monthly Sales over the preceding twelve (12) months.
"Sales-Based Dilution Ratio" means as of any Cut-Off Date, the ratio,
expressed as a percentage, of (i) the aggregate reduction attributable to
Dilutions occurring in the Unpaid Balance of all Pool Receivables, which
Dilutions were granted during the month ending on such Cut-Off Date, divided by
(ii) the xxxxxxxx for the month immediately preceding the month ending as of
such Cut-Off Date.
"Scheduled Termination Date" means January 13, 2007.
"Secured Parties" means each Purchaser, the Administrator, the
Indemnified Parties and the Affected Parties.
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"Security" shall have the meaning as in Section 2(l) of the Securities
Act of 1933, as amended.
"Seed" means crop seed (including, but not limited to, seed for
soybeans, corn, alfalfa, forage and turf grasses).
"Seed Receivables" means Receivables described in clause (ii) of the
definition of "Receivables."
"Seller" has the meaning set forth in the preamble.
"Seller's Share" of any amount means (x) 100% minus the Receivable
Interest (but such Receivable Interest shall not be greater than 100%) times (y)
such amount.
"Servicer" has the meaning set forth in Section 8.1(a).
"Servicer Default" has the meaning set forth in Section 8.2(h).
"Servicer Report" has the meaning set forth in Section 3.1.
"Servicer Transfer Event" has the meaning set forth in Section 8.1(b).
"Servicer's Fee" means, for each day, an amount equal to (x) the
Servicer's Fee Rate, times (y) the aggregate Unpaid Balance of all Pool
Receivables at the close of business on such day, times (z) 1/360, provided,
however, that if at any time the Servicer is not LOL, CoBank or any of their
respective Affiliates, the Servicer's Fee shall be a commercially reasonable
rate as agreed between the Administrator and the Servicer.
"Servicer's Fee Rate" means 0.50% per annum.
"Settlement Date" shall mean the twentieth (20th) day of each calendar
month (or, if any such twentieth (20th) day is not a Business Day, "Settlement
Date" shall mean the immediately succeeding Business Day).
"Settlement Period" shall mean, initially, the period beginning on the
date of Purchase of such Receivable Interest and ending on and including the
last day of the calendar month in which the date of such Purchase occurs, and
thereafter, each successive period commencing on the first day of each calendar
month during the term of this Agreement and ending on the last day of such
calendar month during the term of this Agreement.
-18-
"SPV Purchaser Notes" has the meaning set forth in the Purchase and
Sale Agreement.
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Federal Reserve Board or other Governmental Authority to
which the Administrator or any Purchaser is subject with respect to the Base CD
Rate, for new negotiable nonpersonal time deposits in dollars of over $100,000
with maturities approximately equal to three months. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"Sub-Servicer" has the meaning set forth in Section 8.1(d).
"Subsidiary" means a corporation or other Person of which LOL and/or
its other Subsidiaries own, directly or indirectly, such number of outstanding
shares as have more than fifty-one percent (51%) of the ordinary voting power
for the election of directors.
"Successor Notice" has the meaning set forth in Section 8.1(b).
"Termination Date" means the earlier to occur of: (a) the Purchase
Termination Date; and (b) the Scheduled Termination Date.
"Termination Event" has the meaning set forth in Section 10.1.
"Termination Period" means the period from and including the earlier to
occur of the Termination Date or the date of occurrence of a Termination Event,
through the Final Payout Date.
"Three-Month Secondary CD Rate" means, for any day, the secondary
market rate for three-month certificates of deposit reported as being in effect
on such day (or, if such day is not a Business Day, the next preceding Business
Day) by the Federal Reserve Board through the public information telephone line
of the Federal Reserve Bank of New York (which rate will, under the current
practices of the Federal Reserve Board, be published in Federal Reserve
Statistical Release H.15 (519) during the week following such day) or, if such
rate is not so reported on such day or such next preceding Business Day, the
average of the secondary market quotations for three-month certificates of
deposit of major money center banks in New York City received at approximately
10:00 A.M., New York City time, on such day ( or, if such day is not a Business
Day, on the next preceding Business Day) by
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the Administrator from three negotiable certificate of deposit dealers of
recognized standing selected by it.
"Transaction Documents" means this Agreement, the Lockbox Agreements,
the Purchase and Sale Agreement, any Credit and Collection Policy, the Fee
Letter and other documents to be executed and delivered in connection herewith.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the applicable jurisdiction or jurisdictions.
"Unmatured Termination Event" means any event which, with the giving of
notice or lapse of time, or both, would become a Termination Event.
"Unpaid Balance" of any Receivable means at any time the unpaid
principal amount thereof.
"Voting Participant" has the meaning set forth in Section 12.3(b).
"Weekly Report" has the meaning set forth in Section 7.2(a).
"Yield" means for any Settlement Period:
C x YR x ED + LF
----------------
360
where:
C = the daily average (calculated at the close of
business each day) of the Capital during such
Settlement Period,
YR = the Yield Rate for such Settlement Period, and
ED = the actual number of days elapsed during such
Settlement Period.
LF = the Liquidation Fee, if any, during such Settlement
Period.
"Yield Rate" means for any Settlement Period, as Seller may elect upon
written notice to Administrator delivered not later than the third (3rd)
Business Day prior to the commencement of any such Settlement Period.
(a) the sum of (x) the LIBOR Rate, plus one hundred
thirty-seven and a half (137.5) basis points; or
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(b) the Alternate Base Rate;
provided, however, that (i) in the event the LIBOR Rate shall not be available
or cannot reasonably be determined by the Administrator for any reason or any
present or future law, regulation, treaty or directive or the interpretation or
application thereof shall make it unlawful for any Purchaser to calculate Yield
on its Capital based on the LIBOR Rate, then upon the delivery of written notice
to the Administrator and the Seller to that effect, the Yield Rate shall be the
Alternate Base Rate unless and until the Administrator and the Seller is
notified in writing to the contrary and (ii) on any day during a Settlement
Period when any Termination Event shall have occurred and be continuing, the
Yield Rate for the Capital shall mean the Default Rate.
"Yield Reserve" means, at any time, an amount equal to the product of
(i) (the Yield Rate plus the Servicer's Fee Rate) divided by 360; (ii) the Days
Sales Outstanding; and (iii) the Stress Factor of 1.0 x.
B. Other Terms. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP. All terms used in Article 9 of the
UCC in the State of Colorado, and not specifically defined herein, are used
herein as defined in such Article 9.
C. Computation of Time Periods. Unless otherwise stated in this
Agreement, in the computation of a period of time from a specified date to a
later specified date, the word "from" means "from and including" and the words
"to" and "until" each means "to but excluding".
D. Interpretation. In each Transaction Document, unless a clear
contrary intention appears:
(i) the singular number includes the plural number and vice
versa;
(ii) reference to any Person includes such Person's successors
and assigns but, if applicable, only if such successors and
assigns are permitted by the Transaction Documents, and
reference to a Person in a particular capacity excludes such
Person in any other capacity or individually;
(iii) reference to any gender includes each other gender;
(iv) reference to any agreement (including any Transaction
Document), document or instrument means such agreement,
document or instrument as amended, supplemented or modified
and in effect from time to time in accordance with the terms
thereof and, if
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applicable, the terms of the other Transaction Documents and
reference to any promissory note includes any promissory note
which is an extension or renewal thereof or a substitute or
replacement therefor; and
(v) reference to any Applicable Law means such Applicable Law
as amended, modified, codified, replaced or reenacted, in
whole or in part, and in effect from time to time, including
rules and regulations promulgated thereunder and reference to
any section or other provision of any Applicable Law means
that provision of such Applicable Law from time to time in
effect and constituting the substantive amendment,
modification, codification, replacement or reenactment of such
section or other provision.
Schedule I
Government Contracts
None
Schedule II
Contract Standards
None
Schedule 1
Purchasers and Pro Rata Shares
Purchaser Pro Rata Share Facility Limit
--------- -------------- --------------
CoBank, ACB 100% $200,000,000
Total 100% $200,000,000
Schedule 6.1(m)
List of Offices of Seller
Where Records Are Kept
0000 Xxxxxx Xxxx X Xxxx
Xxxxxxxxx, XX 00000
Schedule 6.1(n)
List of Lockbox Banks
Bank Address Account
---- ------- -------
Xxxxx Fargo & Company Minneapolis, MN #2391446909
(SPV Purchaser)
Xxxxx Fargo & Company Minneapolis, MN #2391445901
(SPV Purchaser)
Xxxxx Fargo & Company Minneapolis, MN #2391454580
(SPV Purchaser)
Xxxxx Fargo Bank, Minnesota Minneapolis, MN #4030012942
(SPV Purchaser)
PNC Bank Pittsburgh, PA #8550541334
(SPV Purchaser)
Bank of America Chicago, IL #8188201691
(SPV Purchaser)
Bank of America Dallas, TX #180389890
(SPV Purchaser)
Schedule 7.1(g)
Credit and Collection Policies
Schedule 12.3(b)
Participants
PARTICIPANT AMOUNT OF PARTICIPATION
CoBank $94 million
US AgBank $20 million
Commercial Finance Group $15 million
AgStar $15 million
NWFCS $15 million
FCB Texas $14 million
FCS WNY $10 million
American Ag Credit $10 million
Greenstone $5 million
FCS Maine $2 million
Total $200 million
Schedule 14.2
Addresses
A. LOL FARMLAND FEED SPV, LLC
0000 Xxxxxx Xxxx X Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
With a copy to:
LAND O'LAKES, INC.
0000 Xxxxxxxxx Xxx. Xxxxx
Xxxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
B. LAND O'LAKES FARMLAND FEED LLC
0000 Xxxxxx Xxxx X Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
With a copy to:
LAND O'LAKES, INC.
0000 Xxxxxxxxx Xxx. Xxxxx
Xxxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
C. LAND O'LAKES, INC.
0000 Xxxxxxxxx Xxx. Xxxxx
Xxxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
D. COBANK, ACB
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Exhibit 1.2(a)
Form of Purchase Notice
[DATE]
CoBank, ACB, as Administrator
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxxxx
Vice President - Corporate Finance
Re: Amended and Restated
Receivables Purchase Agreement dated as
of March 31, 2004 among LOL Farmland Feed SPV, LLC, as Seller,
Land O'Lakes Farmland Feed LLC, as initial Servicer, the
Purchasers as defined therein and Cobank, ACB, as
Administrator for the Purchasers (the "Agreement")
Ladies and Gentlemen:
This Notice is delivered to you pursuant to Section 1.02 of the
Agreement. Unless otherwise defined herein or the context otherwise requires,
all capitalized terms used herein will have the respective meanings assigned to
them in the Agreement.
The Seller hereby requests that a Purchase in the amount of
$___________ (the "Purchase Price") be made by the Purchasers on _____________,
_____ 1/ (the "Purchase Date").
The Seller hereby certifies and warrants that on the date hereof and as
of the Purchase Date (and the Seller, by accepting the payment of the Purchase
Price on the Purchase Date relating to such Purchase, will be deemed to have
certified that), (i) the representations and warranties of the Seller contained
in Section 6.01 of the Agreement are true and correct in all material respects
as though made on and as of the date hereof and as of the Purchase Date, (ii)
the Seller is in compliance with the covenants set forth in Article VII of the
Agreement and (iii) all applicable conditions precedent to the Purchase have
been fully satisfied.
The Seller agrees that if, prior to the time that the Purchase
requested hereby is made, any matter certified to herein will not be true and
correct at such
----------
1/ Insert date that is at least two (2) Business Days following the
date of this notice.
-2-
time as if then made, it will immediately so notify each Purchaser and the
Administrator.
Please credit the proceeds of the requested Purchase to the account(s)
indicated below:
Amount to be
Bank Credited Account Name Account No.
---- ------------- ------------ -----------
$
------------- ------------ ------------ -----------
ABA#
--------
The Seller has caused this notice to be executed and delivered, and the
certifications and warranties contained herein to be made, by its duly
authorized officer this ____ day of ____________, _____.
LOL Farmland Feed SPV, LLC
By:
------------------------------
Name:
---------------------------
Title:
--------------------------
Phone No.:
----------------------
Fax No.:
-----------------------
Exhibit 3.1(a)-1
Form of Servicer Report
Exhibit 5.1(f)
Form of Lockbox Agreement
[LETTERHEAD OF LOL FARMLAND FEED SPV, LLC]
LOCKBOX AGREEMENT
____________ ___, 2004
[NAME AND ADDRESS OF
LOCKBOX BANK]
Ladies and Gentlemen:
Reference is made to our Account No. ________ (the "Lockbox Account")
and Lockbox No. _________ (the "Lockbox") maintained with you in our name.
Pursuant to an Amended and Restated Receivables Purchase Agreement dated as of
March 31, 2004, among LOL Farmland Feed SPV, LLC ("SPV"), as Seller, Land
O'Lakes Farmland Feed LLC, as initial Servicer, the Purchasers as defined
therein (as so defined, the "Purchasers"), and CoBank, ACB, as administrator
(the "Administrator"), SPV has sold and/or may hereafter sell to the
Administrator, for the benefit of the Purchasers and their assigns, one or more
undivided percentage interests in accounts, chattel paper, instruments or
general intangibles of SPV (collectively, "Receivables") with respect to which
payments are or may hereafter be made to the Lockbox for deposit into the
Lockbox Account, and has granted to the Administrator, for the benefit of the
Purchasers and their assigns, a security interest in such Receivables, the
Lockbox, the Lockbox Account, amounts on deposit therein and related property.
Your execution of this letter agreement is a condition precedent to our
continued maintenance of the Lockbox and Lockbox Account with you.
We hereby transfer, subject to the terms and conditions contained
herein, effective as of the date of this letter, exclusive ownership, dominion
and control of the Lockbox and the Lockbox Account to the Administrator on
behalf of the Purchasers and their assigns. The Administrator, by execution
below, confirms its ownership, dominion and control of the Lockbox and Lockbox
Account, and instructs you that, prior to the receipt by you of notice from the
Administrator, which notice may be in the form attached hereto as Exhibit A or
in any other form that gives you reasonable notice, you shall be authorized to
continue to act on our instructions, or upon our authorization, on the
instructions of an officer of SPV, provided that,
-2-
unless otherwise instructed by the Administrator, you shall cause all checks,
drafts or other items received or collected by you in the Lockbox to be
deposited into the Lockbox Account. After receipt by you of notice from the
Administrator, you will act only upon the instructions from the Administrator.
We hereby irrecoverably instruct you, at all times from and after the
date of your receipt of notice from the Administrator as described above, to
make all payments to be made by you out of or in connection with the Lockbox
Account directly to the Administrator, at its address set forth below its
signature hereto or as the Administrator otherwise notifies you, for the account
of the Purchasers, at ABA #_________, Account # ________, or otherwise in
accordance with the instructions of the Administrator.
We also hereby notify you that the Administrator shall at all times be
irrevocably entitled to exercise in our place and stead any and all rights in
respect of or in connection with the Lockbox and Lockbox Account, including,
without limitation, (a) after the date of your receipt of notice from the
Administrator as described above, the right to specify when payments are to be
made out of or in connection with the Lockbox Account and (b) the right to
require preparation of duplicate monthly bank statements on the Lockbox Account
for the Administrator's audit purposes and mailing of such statements directly
to an address specified by the Administrator.
Notice from the Administrator may be personally served or sent by
facsimile, nationally recognized overnight delivery service or courier, to the
address or facsimile number set forth under your signature to this letter
agreement (or to such other address or facsimile number as to which you shall
notify the Administrator in writing). If notice is given by facsimile, it will
be deemed to have been received when the notice is sent and the receipt is
confirmed by telephone or other electronic means. All other notices will be
deemed to have been received when actually received.
By executing this letter agreement, you acknowledge and consent to the
existence of the Administrator's ownership and control of the Lockbox and
Lockbox Account and the Administrator's security interest in the Lockbox and
Lockbox Account and amounts from time to time received, collected or on deposit
therein and agree that from the date hereof the Lockbox and Lockbox Account
shall be maintained by you for the benefit of, and items and amounts from time
to time therein shall be held by you as agent for, the Administrator on the
terms provided herein. The Lockbox Account is to be titled "LOL Farmland Feed
SPV, LLC and CoBank, ACB as the Administrator for the Purchasers and their
assigns, as their interests may appear". Except as otherwise provided in this
letter agreement, items and payments received, collected or on deposit in the
Lockbox and Lockbox Account are to be processed in accordance with the standard
procedures currently in effect.
-3-
All service charges and fees with respect to the Lockbox and Lockbox Account
shall continue to be payable by us as under the arrangements currently in
effect.
By executing this letter agreement, you (i) irrevocably waive and agree
not to assert, claim or endeavor to exercise, irrevocably bar and estop yourself
from asserting, claiming or exercising, and acknowledge that you have not
heretofore received a notice, writ, order or any form of legal process from any
other person or entity asserting, claiming or exercising, any right of set-off,
banker's lien or other purported form of claim with respect to the Lockbox and
Lockbox Account or any items or funds from time to time therein and (ii)
covenant and agree with the Purchasers and the Administrator that you will not
institute against, or join any other person or entity in instituting against us
any bankruptcy, reorganization, arrangement, insolvency or liquidation or
similar proceedings under the laws of the United States or any state of the
United States. Except for your right to payment of your service charges and fees
and to make deductions for returned items, you shall have no rights in the
Lockbox or Lockbox Account or any items or funds therein. To the extent you may
ever have such rights, you hereby expressly subordinate all such rights to all
rights of the Administrator.
You may terminate this letter agreement by canceling the Lockbox and
Lockbox Account maintained with you, which cancellation and termination shall
become effective only upon thirty days' prior written notice thereof from you to
the Administrator. Incoming mail or wire transfers to the Lockbox or Lockbox
Account received after such cancellation shall be forwarded in accordance with
the Administrator's instructions. This letter agreement may also be terminated
upon written notice to you by the Administrator stating that the Receivables
Purchase Agreement pursuant to which this letter agreement was obtained is no
longer in effect. Except as otherwise provided in this paragraph, this letter
agreement may not be terminated or amended without the prior written consent of
the Administrator. This letter agreement may be executed in any number of
counterparts, and by the parties hereto on separate counterparts, each of which
when so executed shall be deemed to be an original and all of which when taken
together shall constitute one and the same agreement.
-4-
Please acknowledge your agreement to the terms set forth in this letter
agreement by signing the two copies of this letter agreement enclosed herewith
in the space provided below, sending one such signed copy to the Administrator
at its address provided above and returning the other signed copy to us.
Very truly yours,
LOL Farmland Feed SPV, LLC
By:
----------------------------
Name Printed:
-------------------
Title:
-------------------------
Acknowledged and agreed to as of the date
first written above:
COBANK, ACB, as Purchaser and as
Administrator
By:
----------------------------
Name Printed:
-------------------
Title:
-------------------------
, as Lockbox Bank
--------------
By:
----------------------------
Name Printed:
-------------------
Title:
-------------------------
Address for Notice:
--------------------------------
--------------------------------
--------------------------------
Attention:
----------------------
Tel. No.:
-----------------------
Facsimile No.:
-----------------
Exhibit A
[LETTERHEAD OF COBANK, ACB]
[LOCKBOX NAME AND ADDRESS]
Re: LOL Farmland Feed SPV, LLC
Lockbox No. _______ (the "Lockbox") and
Lockbox Account No. ____________ (the "Lockbox Account")
Ladies and Gentlemen:
Reference is made to the letter agreement dated March 31, 2004 (the
"Letter Agreement") among LOL Farmland Feed SPV, LLC, the undersigned, as
Purchaser and Administrator and you concerning the above-described Lockbox and
Lockbox Account. We hereby give you notice that, in accordance with our
ownership and control of the Lockbox and Lockbox Account as provided in the
Letter Agreement, you shall hereafter accept instructions only from the
undersigned.
We hereby instruct you to make all payments to be made by you out of or
in connection with the Account directly to the undersigned, at our address set
forth above, for the account of the Purchasers (ABA no._________, account no.
________).
[OTHER INSTRUCTIONS]
Very truly yours,
COBANK, ACB, as Administrator
By:
---------------------------------
Name:
------------------------------
Title:
------------------------------
cc: LOL Farmland Feed SPV, LLC
Exhibit 7.2(a)
Form of Weekly Report
Exhibit 7.4
Factual Assumptions Contained In
True Sale And Non-Consolidation Opinion ("Opinion Letter")
The following assumptions, representations and statements are contained in the
Opinion Letter and are relied upon by the opinion giver. Terms not defined in
the foregoing Agreement shall have the meaning given them in the Opinion Letter.
Substantive Consolidation:
1. Organization. The Seller is a Delaware limited liability company and
maintains good standing under the laws of the State of Delaware.
2. Procedures Observed. The Seller observes and shall observe all
company procedures required by the Certificate of Organization, its limited
liability company agreement and the limited liability company law of the State
of Delaware. All distributions of the Seller will be paid and declared in
accordance with the law of the State of Delaware.
3. Management. The business and affairs of the Seller are and will be
managed by or under the direction of the Board of Managers. The Seller at all
times ensures and will ensure that the Board of Managers duly authorizes all
company actions requiring authorization by its Board of Managers. When
necessary, the Seller obtains and will obtain proper authorization from Feed as
its sole member for company action. The officers and managers of the Seller
shall make decisions with respect to the business and daily operations of the
Seller independent of and not dictated by Feed, LOL or Purina (each an "LOL
Company" and collectively, the "LOL Companies." In addition, the Seller's
officers and managers will adhere to all statutes, rules, by-laws or other
obligations regarding conflicts of interest and participation in decision-making
by officers and managers who may have a conflict of interest with respect to the
subject matter of the decision.
4. Independent Managers. As required by the Certificate of
Organization, the Board of Managers includes and will include at least one
"Independent Manager" (as that term is defined in the Certificate of
Organization).
5. Records. The Seller maintains and will maintain separate corporate
records, documents and books of accounting from those of Feed, any other LOL
Company or any other entity, and keeps and will keep correct and complete books
and records of account and minutes of the meetings and other proceedings of its
members and the Board of Managers.
-2-
6. Offices. The Seller will pay fair market rent for any office space
shared with an Originator and a fair share of any overhead costs. The Seller has
an address and telephone number separate and distinct from the address and
telephone number of any of the LOL Companies.
7. Identifiable Assets. The Seller's assets will not be commingled with
those of any LOL Company, and the Seller maintains and shall maintain separate
bank accounts and books of account from those of the LOL Companies. The separate
assets and liabilities of the Seller are readily distinguishable from those of
the LOL Companies, and the separate assets and liabilities of the Seller and the
LOL Companies can be quickly and inexpensively identified and ascertained.
8. Capitalization. On the date hereof, each of Feed and the Seller is
solvent, has adequate capital to carry on its business, and intends to and
believes that it will be able to pay its debts as they mature. Neither Feed nor
the Seller intends to, or believes that it will, engage in any business for
which its respective capitalization would not be adequate. None of the
transactions described in the Transaction Documents is being entered into with
the intent to hinder, defraud or delay any of the creditors of Feed or the
Seller.
9. Expenses. The Seller shall pay from its own separate assets all
material liabilities incurred by it, including the wages and salaries of its
officers and all material administrative expenses. The Seller will reimburse
Feed or the applicable LOL Company for its allocable portions of any shared
expenses.
10. Conduct. The Seller conducts and will continue to conduct its
business solely in its own name so as not to mislead others as to the identity
of the Seller. All oral and written communications, including without limitation
letters, invoices, purchase orders, contracts, statements and applications, are
made solely in the name of the Seller if related to the Seller, and are not made
in the name of the Seller if related to an LOL Company or the name of an LOL
Company if related to the Seller.
11. Intercompany Claims. The Seller has not guaranteed any obligations
of any LOL Company. The Seller will not guaranty or assume any obligations of
any LOL Company. There is no intercompany debt between the Seller and any LOL
Company other than the SPV Purchaser Notes and debts incurred in connection with
their respective obligations to each other under the Purchase Agreement. The
Seller will not lend funds or extend credit to any LOL Company other than
pursuant to the Purchase Agreement in connection with the purchase of
Receivables thereunder.
12. Reliance by Others. The Seller (i) acts and will act solely in its
own name and through its duly authorized officers or agents in the conduct of
its businesses, (ii) will take no action which may mislead third parties as to
the
-3-
separate corporate identities and separate assets and liabilities of each LOL
Company and the Seller, and (iii) will have and utilize its own invoices and
letterhead separate from any LOL Company.
13. Disclosure of the Transactions. The Seller will maintain separate
financial statements from the LOL Companies. However, the Seller and certain
affiliated entities may utilize consolidated financial statements for certain
tax and reporting purposes. Any consolidated financial statements of the Seller
will disclose, through appropriate footnotes or otherwise, the separate
corporate existence of the Seller, that the Receivables have been sold or
contributed to the Seller pursuant to the Purchase Agreement, and the interests
of the Seller in the Receivables.
14. Fairness of Transactions. The management of Feed and the Seller
have determined that the ownership of the Seller by Feed and the limited
purposes of the Seller are in the best interests of Feed and the Seller.
15. Transaction Documents. The Seller will comply with the Transaction
Documents in accordance with their respective terms, in all respects material to
this opinion, and the Transaction Documents will not be modified in any material
way except as provided for therein. The resolutions, agreements and other
instruments regarding the transactions contemplated by the Transaction Documents
will be continuously maintained as official records of the Seller. In addition
to, and consistent with the foregoing, the Seller will not take any actions that
are inconsistent with the terms of, or expectations of the Seller's creditors
with respect to the Transaction Documents or any of the foregoing assumptions.
16. Reliance of the Purchasers. The Administrator and the Purchasers
are relying on the separate credit of the Seller in entering into and performing
under the terms of the Transaction Documents to which each is a party (except to
the extent that any LOL Company has separate obligations under the Transaction
Documents) and may be materially harmed by a failure to respect the separate
corporate existence of the Seller.
17. Business Purpose. The sole business purpose of the Seller is to
acquire Receivables from the Originators and to sell undivided interests in such
Receivables pursuant to the Receivables Purchase Agreement. The Seller does not
conduct business with any entity other than the Originators, Feed (as Servicer),
Corporate Credit (as Sub-Servicer), Purina (as Sub-Servicer), the Lockbox Banks,
the Administrator, the Purchasers and the parties to certain agreements related
to the Transaction Documents.
