EXHIBIT B-10-(i)(3)
SECOND AMENDMENT TO
CREDIT AGREEMENT
This Second Amendment to Credit Agreement (this "Second
Amendment"), dated as of October 13, 1998, is made and entered
into by and among GOLD XXXX INC., a cooperative marketing
association organized and existing under the laws of the State
of Georgia (the "Borrower"), various banks and other lending
institutions as are, or may from time to time become, parties
hereto (collectively, the "Lenders" and individually, a
"Lender"), and COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK
B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH ("Rabobank") as
Agent for the Lenders.
W I T N E S S E T H:
WHEREAS, the parties hereto are parties to that certain
Credit Agreement, dated as of August 4, 1998, as amended by
that First Amendment to Credit Agreement dated as of October
13, 1998 (and as may be further amended, supplemented or
otherwise modified from time to time, the "Credit Agreement");
WHEREAS, the Borrower has requested that the Agent and
the Lenders (i) permit the Borrower to sell certain assets to
Southern States Cooperative, (ii) permit the Borrower to
purchase the SSC Securities (as defined below) and (iii)
provide for the issuance of the Letter of Credit (as defined
below) to support certain obligations of the Borrower incurred
in connection with the purchase of the SSC Securities;
WHEREAS, the Agent and the Lenders are willing to permit
the foregoing actions of the Borrower and to provide for the
issuance of the Letter of Credit on the terms and conditions
set forth herein; and
NOW, THEREFORE, in consideration of the premises and for
other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties
hereto agree as follows:
Section 1. Amendments. The terms of the Credit
Agreement are hereby amended as follows:
(1) Additions to Section 1.1. Section 1.1 of the Credit
Agreement is amended by adding thereto the following defined
terms:
"Additional Collateral" shall have the meaning given
thereto in Section 6.17
"Additional Collateral Value" shall mean (i) prior
to the Appraisal Date, 50% of the aggregate insured value
of the Additional Collateral and (ii) after the Appraisal
Date, 70% of the Appraised Value of the Additional
Collateral; provided, however, (a) in the event that the
Borrower fails to provide the appraisals required
pursuant to Section 6.18, "Additional Collateral Value"
shall mean 0, and (b) in the event that the Appraised
Value as set forth in the appraisals required pursuant to
Section 6.18 is less than $105,000,000, "Additional
Collateral Value" shall mean 70% of such lesser Appraised
Value.
"Appraisal Date" shall mean the date which is sixty
days after the Second Amendment Closing Date
"Appraised Value" shall have the meaning given
thereto in Section 6.18.
"Authority" means any Federal, state or local
governmental authority, central bank or any agency or
instrumentality thereof.
"Borrowing Base Increase" shall mean (a) the lesser
of (i) $75,000,000 and (ii) the Additional Collateral
Value minus (b) the sum of, without duplication, (i) the
amount of all prepayments required pursuant to Section
3.1(f)(iii) plus (ii) the amount of all other prepayments
of the L/C Loan plus (iii) in the event of a termination
of the Letter of Credit (other than as a result of a draw
of the full stated amount thereunder), the remaining
amount of the Borrowing Base Increase.
"Commitment Share" means, for any Lender, the
percentage that such Lender's Revolving Credit Commitment
bears to the aggregate Revolving Credit Commitments of
all the Lenders.
"Default Rate" means a rate per annum equal to the
Base Rate plus two percent (2%).
"Issuing Bank" means Rabobank in its capacity as the
issuer of the Letter of Credit.
"L/C Loan" means the Revolving Loan made pursuant to
Section 2A.5(iii) and any refunding, continuation or
conversion thereof pursuant to Section 3.6.
"Letter of Credit" shall mean a commercial stand-by
letter of credit in the form attached to this Second
Amendment as Exhibit A issued on the Second Amendment
Closing Date by the Issuing Bank for the account of the
Borrower pursuant to Article 2A in the face amount of
$100,000,000.
"Letter of Credit Fee" shall have the meaning given
thereto in Section 2A.8.
"Letter of Credit Obligations" shall mean, at any
particular time, the sum of (a) the Reimbursement
Obligations at such time and (b) the aggregate maximum
amount available for drawing under the Letter of Credit
at such time.
"Letter of Credit Application Agreement" shall mean,
with respect to the Letter of Credit, such form of
application therefor (whether in a single or several
documents) as the Issuing Bank may employ in the ordinary
course of business for its own account.
"Reimbursement Obligations" means the reimbursement
or repayment obligations of the Borrower to the Issuing
Bank pursuant to Section 2A.5 with respect to the Letter
of Credit.
"Second Amendment Closing Date" shall mean the later
of (i) October 13, 1998 or (ii) the date as of which all
conditions precedent to the effectiveness of this Second
Amendment have been satisfied or waived by the Agent, the
Issuing Bank and the Lenders.
"Second Escrow Agreement" shall mean an escrow
agreement executed and delivered by the Borrower pursuant
to which the Agent is authorized and directed to file
Real Property Mortgages upon Real Property to satisfy the
requirements of Section 6.18.
"SSC Securities" means the $40,000,000 Series B
Cumulative Redeemable Preferred Stock and the $60,000,000
Series B Capital Securities issued by Southern States
Cooperative or Southern States Capital Trust,
respectively, and purchased by the Borrower pursuant to
the Commitment Letter between the Borrower and Southern
States Cooperative dated as of October 13, 1998.
"SSC Pledge Agreement" shall mean a pledge agreement
granting a security interest in the SSC Securities to the
Lenders, executed and delivered by the Borrower in form
and substance similar to the Pledge Agreement and
acceptable to the Agent.
(2) Amendment to Section 1.1. Section 1.1 of the Credit
Agreement is amended by deleting each of the following
existing definitions and substituting therefore the following:
"Borrowing Base" shall mean, as of the last day of
any calendar month, an amount equal to (a) the sum of
(i) 80% of all Eligible Receivables as of such date of
determination; plus (ii) 50% of Eligible Inventory as of
such date of determination; plus (iii) during any period
that the Lenders have a perfected, first priority
security interest in the ADM Shares, 80% of the Market
Value of ADM Shares as of such date of determination;
plus (iv) Borrowing Base Increase; provided however, that
prior to December 1, 1998, the Borrowing Base shall not
include any amounts attributable to the Agri Services
Assets.
"Borrowing Base Certificate" shall mean a
certificate, duly executed by the chief financial
officer, chief accounting officer or treasurer of the
Borrower, appropriately completed and substantially in
the form of Exhibit I to this Second Amendment.
"Loan Documents" shall mean and include, as the
context requires, this Agreement, the Notes, the
Collateral Documents, the Subsidiary Guaranty, the
Letter of Credit, any Letter of Credit Application
Agreement, and any and all other instruments, agreements,
documents and writings contemplated hereby or executed in
connection herewith.
"Required Lenders" shall mean, at any time, any
Lender or group of Lenders holding at least 66 2/3% of
either (a) the sum of the Commitments, whether or not
advanced, or (b) if such Commitments have terminated, 66
2/3% of the sum of the outstanding Loans and Letter of
Credit Obligations.
(3) Amendment to Section 1.1. Section 1.1 of the Credit
Agreement is amended by deleting paragraph (e) from the
definition of "Funded Debt" and adding thereto the following:
(e) obligations outstanding under the 364-Day Loans
and under any other credit facility with a maturity of
less than one year, to the extent that such obligations
exceed eighty percent (80%) of the Borrower's inventory
balance as of the date of such calculation; and
(f) Letter of Credit Obligations.
(4) Addition of Article 2A. The following Article 2A is
hereby added to the Credit Agreement:
ARTICLE 2A
LETTER OF CREDIT FACILITY
Section 2A.1. Obligation to Issue. Subject to the terms
and conditions of this Agreement, and in reliance upon the
representations and warranties of the Borrower herein set
forth, the Issuing Bank shall issue on the Second Amendment
Closing Date the Letter of Credit in accordance with this
Article 2A.
Section 2A.2. Types and Amounts. The Issuing Bank shall
have no obligation to issue the Letter of Credit:
(a) if the aggregate maximum amount then available
for drawing under the Letter of Credit, after giving
effect to the issuance of the Letter of Credit, shall
exceed any limit imposed by law or regulation upon the
Issuing Bank;
(b) if the issuance of the Letter of Credit would
violate the provisions of any Section of this Credit
Agreement, including, without limitation, Section 3.2; or
(c) with an expiration date after the Revolving
Loan Maturity Date.
Section 2A.3. Conditions. In addition to being subject
to the satisfaction of the conditions contained in Article IV,
the obligation of the Issuing Bank to issue the Letter of
Credit is subject to the satisfaction in full or waiver by the
Agent, the Issuing Bank and the Lenders of the following
conditions:
(a) the Borrower shall have delivered to the
Issuing Bank, at such times and in such manner as the
Issuing Bank may prescribe, the Letter of Credit
Application Agreement and such other documents and
materials as may be required pursuant to the terms
thereof, all satisfactory in form and substance to the
Issuing Bank and the terms of the Letter of Credit shall
be satisfactory in form and substance to the Issuing
Bank; and
(b) as of the date of issuance no order, judgment
or decree of any court, arbitrator or Authority shall
purport by its terms to enjoin or restrain the Issuing
Bank from issuing the Letter of Credit and no law, rule
or regulation applicable to the Issuing Bank and no
request or directive (whether or not having the force of
law) from any Authority with jurisdiction over the
Issuing Bank shall prohibit or request that the Issuing
Bank refrain from the issuance of letters of credit
generally or the issuance of the Letter of Credit.
(c) All Real Estate Mortgages shall have been filed
with the appropriate Authority sufficient to grant a first
priority lien in favor of the Agent against the Real
property listed on Schedule 6.17.
Section 2A.4. Issuance of the Letter of Credit.
(a) Request for Issuance. Before the issuance of the
Letter of Credit, the Borrower shall give the Issuing Bank a
written notice containing the original signature of an
authorized officer or employee of the Borrower specifying the
date on which such requested Letter of Credit is to expire and
the person for whose benefit the Letter of Credit is to be
issued.
(b) Issuance; Notice of Issuance. If the applicable
conditions set forth in this Agreement are satisfied, the
Issuing Bank shall issue the requested Letter of Credit, give
each Lender written or telex notice, or telephonic notice
confirmed promptly thereafter in writing, of the issuance of
the Letter of Credit, and deliver to each Lender in connection
with such notice a copy of the Letter of Credit issued by the
Issuing Bank.
(c) No Extension or Amendment. The Issuing Bank shall
not extend or amend the Letter of Credit without the prior
written consent of the Lenders.
Section 2A.5. Reimbursement Obligations; Duties of the
Issuing Bank.
(a) Reimbursement. Notwithstanding any provisions to
the contrary in any Letter of Credit Application Agreement:
(i) the Borrower shall reimburse the Issuing Bank
for drawings under the Letter of Credit (a "Reimbursement
Obligation") on the Business Day the payment is made by
the Issuing Bank;
(ii) any Reimbursement Obligation shall bear
interest from the date of the relevant drawing under the
Letter of Credit until the date of payment in full
thereof at a rate per annum equal to (A) prior to the
date that is 3 Business Days after the date of the
related payment by the Issuing Bank, the Base Rate and
(B) thereafter, the Default Rate; and
(iii) in order to implement the foregoing, upon
the occurrence of a draw under any Letter of Credit,
unless the Issuing Bank is reimbursed in accordance with
subsection (i) above, the Borrower irrevocably authorizes
and directs the Agent to treat such nonpayment as a
Notice of Borrowing in the amount of such Reimbursement
Obligation and to make a Revolving Loan (the "L/C Loan")
to Borrower in such amount regardless of whether (i) the
conditions precedent to the making of Loans hereunder
have been met or (ii) the making of such Loan would
violate the provision of any section of this Credit
Agreement, including without limitation, Sections 3.2(a)
and 3.2(c). The Borrower further irrevocably authorizes
and directs the Agent to credit the proceeds of such Loan
to the Issuing Bank so as to immediately eliminate the
liability of the Borrower for Reimbursement Obligations
under the Letter of Credit.
(b) Duties of the Issuing Bank. Any action taken or
omitted to be taken by the Issuing Bank in connection with the
Letter of Credit, if taken or omitted in the absence of
willful misconduct or gross negligence, shall not put the
Issuing Bank under any resulting liability to any Lender. In
determining whether to pay under the Letter of Credit, the
Issuing Bank shall have no obligation relative to the Lenders
other than to confirm that any documents required to have been
delivered under the Letter of Credit appear to comply on their
face, with the requirements of the Letter of Credit.
Section 2A.6. Participations.
(a) Purchase of Participations. Immediately upon
issuance by the Issuing Bank of the Letter of Credit, each
Lender shall be deemed to have irrevocably and unconditionally
purchased and received from the Issuing Bank, without recourse
or warranty, an undivided interest and participation, to the
extent of such Lender's Commitment Share, in the Letter of
Credit.
(b) Sharing of Letter of Credit Payments. In the event
that the Issuing Bank makes any payment under the Letter of
Credit for which the Borrower shall not have repaid such
amount to the Issuing Bank pursuant to Section 2A.7 hereof or
which cannot be paid by a Loan pursuant to subsection (iii) of
Section 2A.5, the Issuing Bank shall promptly notify each
Lender of such failure, and each Lender shall promptly and
unconditionally pay to the Issuing Bank such Lender's
Commitment Share of the amount of such payment in same day
funds. If the Issuing Bank so notifies such Lender prior to
10:00 A.M. (Atlanta, Georgia time) on any Business Day, such
Lender shall make available to the Issuing Bank its Commitment
Share of the amount of such payment on such Business Day in
same day funds. If and to the extent such Lender shall not
have so made its Commitment Share of the amount of such
payment available to the Issuing Bank, such Lender agrees to
pay to the Issuing Bank forthwith on demand such amount
together with interest thereon, for each day from the date
such payment was first due until the date such amount is paid
to the Issuing Bank at the Base Rate for the first 3 days and
thereafter at the Default Rate. The failure of any Lender to
make available to the Issuing Bank its Commitment Share of any
such payment shall neither relieve nor increase the obligation
of any other Lender hereunder to make available to the Issuing
Bank its Commitment Share of any payment on the date such
payment is to be made.
(c) Sharing of Reimbursement Obligation Payments.
Whenever the Issuing Bank receives a payment on account of a
Reimbursement Obligation, including any interest thereon, as
to which the Issuing Bank has received any payments from the
Lenders pursuant to this Section 2A.6, it shall promptly pay
to each Lender which has funded its participating interest
therein an amount equal to the such Lender's Commitment Share
thereof. Each such payment shall be made by the Issuing Bank
on the Business Day on which the funds are paid to such
Person, if received prior to 10:00 am. (Atlanta, Georgia time)
on such Business Day, and otherwise on the next succeeding
Business Day.
(d) Documentation. Upon the request of any Lender, the
Issuing Bank shall furnish to such Lender copies of the Letter
of Credit, Letter of Credit Application Agreement and other
relevant documentation relating to the Letter of Credit.
(e) Obligations Irrevocable. The obligations of the
Lenders to make payments to the Issuing Bank with respect to
the Letter of Credit shall be irrevocable, not subject to any
qualification or exception whatsoever and shall be made in
accordance with, but not subject to, the terms and conditions
of this Agreement under all circumstances, including, without
limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii) the existence of any claim, set-off, defense or
other right which the Borrower may have at any time
against a beneficiary named in the Letter of Credit or
any transferee of the Letter of Credit (or any Person for
whom any such transferee may be acting), the Issuing
Bank, any Lender or any other Person, whether in
connection with this Agreement, the Letter of Credit, the
transactions contemplated herein or any unrelated
transactions;
(iii) any draft, certificate or any other
document presented under the Letter of Credit proves to
be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for
the performance or observance of any of the terms of any
of the Loan Documents;
(v) payment by the Issuing Bank under the Letter of
Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein
being untrue or inaccurate in any respect;
(vi) payment by the Issuing Bank under the Letter of
Credit against presentation of any draft or certificate
that does not comply with the terms of the Letter of
Credit, except payment resulting from the gross
negligence or willful misconduct of the Issuing Bank; or
(vii) any other circumstances or happenings
whatsoever, whether or not similar to any of the
foregoing, except circumstances or happenings resulting
from the gross negligence or willful misconduct of the
Issuing Bank.
Section 2A.7. Payment of Reimbursement Obligations.
(a) Payments to Issuing Bank. The Borrower agrees to
pay to the Issuing Bank the amount of all Reimbursement
Obligations, interest and other amounts payable to the Issuing
Bank under or in connection with the Letter of Credit
immediately when due, irrespective of:
(i) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii) the existence of any claim, set-off, defense or
other right which the Borrower may have at any time
against a beneficiary named in the Letter of Credit or
any transferee of the Letter of Credit (or any Person for
whom any such transferee may be acting), the Issuing
Bank, any Lender or any other Person, whether in
connection with this Agreement, the Letter of Credit, the
transactions contemplated herein or any unrelated
transactions;
(iii) any draft, certificate or any other
document presented under the Letter of Credit proves to
be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for
the performance or observance of any of the terms of any
of the Loan Documents;
(v) payment by the Issuing Bank under the Letter of
Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein
being untrue or inaccurate in any respect;
(vi) payment by the Issuing Bank under the Letter of
Credit against presentation of any draft or certificate
that does not comply with the terms of the Letter of
Credit, except payment resulting from the gross
negligence or willful misconduct of the Issuing Bank; or
(vii) any other circumstances or happenings
whatsoever, whether or not similar to any of the
foregoing, except circumstances or happenings resulting
from the gross negligence or willful misconduct of the
Issuing Bank.
(b) Recovery or Avoidance of Payments. In the event any
payment by or on behalf of the Borrower received by the
Issuing Bank with respect to the Letter of Credit and
distributed by the Issuing Bank to the Lenders on account of
their participations is thereafter set aside, avoided or
recovered from the Issuing Bank in connection with any
receivership, liquidation or bankruptcy proceeding, each
Lender that received such distribution shall, upon demand by
such Issuing Bank, contribute such Lender's Commitment Share
of the amount set aside, avoided or recovered together with
interest at the rate required to be paid by the Issuing Bank
upon the amount required to be repaid by it.
Section 2A.8. Compensation for Letter of Credit.
(a) Letter of Credit Fees. The Borrower shall pay to
the Agent a letter of credit fee ("Letter of Credit Fee")
equal to the product of the face amount of the Letter of
Credit and the Applicable Percentage with respect to the
Revolving Loans, payable in arrears on the last Business Day
of each fiscal quarter of the Borrower. Letter of Credit Fees
payable hereunder shall be computed on the basis of a year of
360 days and paid for the actual number of days elapsed
(including the first day but excluding the last day). The
Agent shall promptly remit the Letter of Credit Fees, when
paid, to the Lenders in accordance with their Commitment
Shares thereof.
(b) Issuing Bank Charges. The Borrower shall pay to the
Issuing Bank, solely for its own account, the standard charges
assessed by the Issuing Bank in connection with the issuance,
administration, amendment and payment or cancellation of
Letter of Credit issued hereunder, which charges shall be
those typically charged by the Issuing Bank to its customers
generally having credit and other characteristics similar to
the Borrower, as determined in good faith by the Issuing Bank.
Section 2A.9. Indemnification; Exoneration.
(a) Indemnification. In addition to amounts payable as
elsewhere provided in this Article 2A, the Borrower shall
protect, indemnify, pay and save the Issuing Bank and each
Lender harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees) which the Issuing Bank,
or any Lender may incur or be subject to as a consequence of
the issuance of the Letter of Credit for the Borrower's
account other than as a result of its gross negligence or
willful misconduct, as determined by a court of competent
jurisdiction.
(b) Assumption of Risk by Borrower. As between the
Borrower, the Issuing Bank and the Lenders, the Borrower
assumes all risks of the acts and omissions of, or misuse of
the Letter of Credit by, the respective beneficiaries of the
Letter of Credit. In furtherance and not in limitation of the
foregoing, the Issuing Bank and the Lenders shall not be
responsible for (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any
party in connection with the application for and issuance of
the Letter of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate,
fraudulent or forged, (ii) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer
or assign the Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason, (iii)
failure of the beneficiary of the Letter of Credit to comply
duly with conditions required in order to draw upon the Letter
of Credit, (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in
cipher, for errors in interpretation of technical terms, (vi)
any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under the Letter
of Credit or of the proceeds thereof, (vii) the misapplication
by the beneficiary of the Letter of Credit of the proceeds of
any drawing under the Letter of Credit; and (viii) any
consequences arising from causes beyond the control of the
Issuing Bank or the Lenders.
(c) Exoneration. In furtherance and extension and not
in limitation of the specific provisions hereinabove set
forth, any action taken or omitted by the Issuing Bank under
or in connection with the Letter of Credit or any related
certificates if taken or omitted in good faith and with
reasonable care, shall not put the Issuing Bank or any Lender
under any resulting liability to the Borrower or relieve the
Borrower of any of its obligations hereunder to any such
Person.
Section 2A.10. Credit Yield Protection; Capital
Adequacy. If the adoption after the date hereof of any
applicable law, statute, rule, regulation, ordinance, writ,
injunction, decree, order, judgment, guideline or decision of
any Authority ("Governmental Rule"), any change after the date
hereof in any interpretation or administration of any
applicable Governmental Rule by any Person charged with its
interpretation or administration or compliance by the Issuing
Bank or any Lender with any request or directive (whether or
not having the force of law) of any such Person:
(a) shall subject the Issuing Bank or any Lender to
any tax (other than overall net income taxation), duty or
other charge with respect to any amount drawn on the
Letter of Credit or its obligation to make any payment
under the Letter of Credit, or to maintain the Letter of
Credit, or shall change the basis of taxation (other than
overall net income taxation) of payments to the Issuing
Bank or any Lender of any amounts due under this
Agreement or any amount drawn on the Letter of Credit; or
(b) shall impose, modify or deem applicable any
reserve (including, without limitation, any imposed by
the Board of Governors of the Federal Reserve System or
any Person regulating insurance activities or insurance
companies), special deposit or similar requirements
against assets of, deposits with or for the account of,
credit extended by, Letter of Credit issued or maintained
by, or collateral subject to a lien in favor of the
Issuing Bank or any Lender, or shall impose on the
Issuing Bank or any Lender any other condition affecting
any amount drawn on the Letter of Credit, or its
obligation to make any payment under the Letter of
Credit, as the case may be, or to maintain the Letter of
Credit; then the remaining provisions of this Section
2A.10 shall apply. If the result of any of the foregoing
(without regard to whether the Issuing Bank or any Lender
shall have sold participations in its respective
obligations under this Agreement) is to increase the cost
to or to impose a cost on the Issuing Bank or any Lender
of making or maintaining any amounts payable hereunder,
of maintaining the Letter of Credit, or to reduce the
amount of any sum received or receivable by the Issuing
Bank or any Lender under the Letter of Credit, then:
(i) the Issuing Bank or such Lender shall
promptly deliver to the Borrower a certificate
stating the change which has occurred or the reserve
requirements or other conditions which have been
imposed on the Issuing Bank or such Lender or the
request, direction or requirement with which it has
complied, together with the date hereof; and
(ii) the Borrower shall pay to the Issuing
Bank or such Lender within 15 days of written
request (which request shall state the amount of
increased cost, reduction or payment and the way in
which such amount has been calculated), such amount
or amounts as will compensate the Issuing Bank or
such Lender for the additional cost, reduction of
return or payment incurred by the Issuing Bank or
such other Lender. The written request of the
Issuing Bank or such Lender as to the additional
amounts payable pursuant to this paragraph delivered
to the Borrower shall be conclusive evidence of the
amount thereof in the absence of manifest error.
(c) If any Lender shall have determined that after
the date hereof the adoption of any applicable law, rule
or regulation regarding capital adequacy, or any change
therein, or any change in the interpretation or
administration thereof, or compliance by any Lender with
any request or directive regarding capital adequacy
(whether or not having the force of law) of any
Authority, has or would have the effect of reducing the
rate of return on such Lender's capital as a consequence
of its obligations hereunder to a level below that which
such Lender could have achieved but for such adoption,
change or compliance (taking into consideration such
Lender's policies with respect to capital adequacy) by an
amount deemed by such Lender to be material, then from
time to time, within 15 days after demand by such Lender,
the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender for such
reduction.
(d) Each Lender will promptly notify the Borrower
and the Issuing Bank of any event of which it has
knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this
Section. A certificate of any Lender claiming
compensation under this Section and setting forth the
additional amount or amounts to be paid to it hereunder
shall be conclusive in the absence of manifest error. In
determining such amount, such Lender may use any
reasonable averaging and attribution methods.
(e) The provisions of this Section 2A.10 shall be
applicable with respect to any participant, assignee or
other transferee, and any calculations required by such
provisions shall be made based upon the circumstances of
such participant, assignee or other transferee.
(5) Section 3.1(f) of the Credit Agreement is amended by
deleting Section 3.1(f) and substituting therefore the
following:
(f) The Borrower shall make additional mandatory
prepayments to the Lenders in amounts equal to 100% of
the net proceeds from any (i) sale or other disposition,
or series of related sales or dispositions, by the
Borrower of any assets where the net proceeds exceed
$1,000,000, other than (x) the sale of assets
contemplated by the Agri Services Purchase Agreement, if
such sale is consummated on or before November 30, 1998,
(or on or before such later date as may be designated by
the Term Loan Lenders as provided in clause (d) above)
and (y) the sale of inventory in the ordinary course of
business, (ii) offering by the Borrower of equity or
subordinated debt (other than an offering which increases
the outstandings under the Borrower's existing
subordinated loan certificates or the subordinated
capital certificates), or (iii) sale by the Borrower of
any of the SSC Securities.
(6) Section 3.1(g) of the Credit Agreement is amended
and restated in its entirety as follows:
(g) The mandatory prepayments required by
subsection (f) above shall be applied first to the
outstanding Revolving Loans and then to the outstanding
364-Day Loans. The mandatory prepayments required by
subsection (f)(iii) above shall be applied first to the
L/C Loan and then to the other outstanding Revolving
Loans.
(7) Section 3.1(h) of the Credit Agreement is amended
and restated in its entirety as follows:
(h) If at any time: (A) the aggregate principal
amount of Revolving Loans, 364-Day Loans and Letter of
Credit Obligations, outstanding exceeds (B) the Borrowing
Base in effect at such time, then the Borrower shall
immediately pay to the Agent for the respective accounts
of the Lenders the amount of such excess. Such payment
shall be applied to pay first, all amounts of interest
and principal outstanding on the Revolving Loans, and
second all amounts due and owing on the 364-Day Loans.
In the event the Borrower is required to pay any
outstanding Eurodollar Borrowings by reason of this
Section prior to the end of the applicable Interest
Period therefor, the Borrower shall indemnify each Lender
against the losses, costs and expenses described in
Section 3.16 incurred by such Lender.
(8) Section 3.2 of the Credit Agreement is amended by
deleting paragraphs (a) and (c) and substituting therefore
the following:
(a) the aggregate amount of all outstanding
Revolving Loans advanced under the Revolving Credit
Commitments plus the Letter of Credit Obligations exceed
the aggregate amount of the Revolving Credit Commitments;
or
(c) the aggregate amount of all outstanding
Revolving Loans advanced under the Revolving Credit
Commitments, plus the aggregate amount of all outstanding 364-
Day Loans advanced under the 364-Day Line of Credit
Commitments, plus the Letter of Credit Obligations, exceed
the Borrowing Base in effect at such time. If such aggregate
outstanding amount does exceed the Borrowing Base, the
Borrower shall immediately repay the Revolving Loans and
364-Day Loans by an aggregate amount equal to such excess,
together with all accrued but unpaid interest on such excess
amount and any amounts due under Section 3.16 of this
Agreement.
(9) Section 3.21 of the Credit Agreement is amended by
deleting last sentence and substituting therefore the
following:
The Agent and the Lenders agree to release the Collateral
(other than the Additional Collateral and the Collateral
subject to the Second Escrow Agreement) from the liens of
the Collateral Documents at such time as all amounts
outstanding under the Term Notes have been repaid in full
and, for the prior three fiscal quarters of the Company,
(a) the Company's ratio of Consolidated Funded Debt to
Total Capital has been less than or equal to .40 to 1.00,
and (b) the Company's ratio of Indebtedness for Money
Borrowed to EBITDA has been less than or equal to 2.75 to
1.00.
(10) Section 4.2 of the Credit Agreement is amended by
deleting the initial paragraph of Section 4.2 and
substituting therefore the following:
Conditions to all Loans. At the time of the making
of all Loans and the issuance of the Letter of Credit
(before as well as after giving effect to such Loans and
to the proposed use of the proceeds thereof or the
issuance of the Letter of Credit), the following
conditions shall have been satisfied or shall exist:
(11) Section 4.2(b) of the Credit Agreement is amended by
deleting Section 4.2(b) and substituting therefore the
following:
(b) all representations and warranties by the
Borrower contained herein shall be true and correct with
the same effect as though such representations and
warranties had been made on and as of the date of such
Loans or the issuance of the Letter of Credit;
(12) Addition of Sections 6.17. The Credit Agreement is
amended by adding a new Section 6.17 thereto as follows:
Section 6.17. Real Property Collateral. So long
as any Letter of Credit Obligation remains outstanding or
any part of the L/C Loan remains unpaid, Borrower shall
grant to the Agent for the ratable benefit of the Lenders
and as collateral for the Loans and the Letter of Credit
Obligations a perfected first priority lien (in the form
of certain of the Real Estate Mortgages) on Real Property
(the "Additional Collateral") with a value equal to (i)
prior to the Appraisal Date, an insured replacement value
of $150,000,000, which property is more specifically set
forth on Schedule 6.17 to this Second Amendment, and (ii)
at all times thereafter, an appraised value (as
determined by an MAI appraiser acceptable to the Agent)
(the "Appraised Value") of $105,000,000.
(13) Addition of Sections 6.18. The Credit Agreement is
amended by adding a new Section 6.18 thereto as follows:
Sections 6.18. Delivery of Appraisals. As soon as
possible, but in no event later than the Appraisal Date,
the Borrower shall provide the Agent with appraisals
prepared by an MAI certified appraiser acceptable to the
Agent with respect to each property constituting
Additional Collateral. In the event that the Borrower
fails to provide such appraisals or the Appraised Value
as set forth therein is less than $105,000,00, the Agent
shall, notwithstanding anything to the contrary contained
in any Loan Document, including without limitation the
Escrow Agreement, be entitled to file Real Estate
Mortgages against additional Real Property.
(14) Addition of Section 6.19. The Credit Agreement is
amended by adding a new Section 6.19 thereto as follows:
Section 6.19. Delivery of SSC Securities.
Borrower will deliver to the Agent (i) all SSC Securities
purchased by the Borrower immediately upon its receipt
thereof and (ii) blank stock powers duly executed by the
Borrower for all of the SSC Securities,
(15) Addition of Section 6.20. The Credit Agreement is
amended by adding a new Section 6.20 thereto as follows:
Section 6.20. Delivery of Additional Agreements.
Within 30 days of the Second Amendment Closing Date,
Borrower will execute and deliver to the Agent the SSC
Pledge Agreement, each in form and substance acceptable
to the Agent in its sole discretion.
(16) Amendment to Section 7.4. Section 7.4 of the Credit
Agreement is amended by deleting paragraph (u) and
substituting therefor the following:
(u) purchase the assets described in Section 7.3(i)
hereof; and
(v) the purchase of the SSC Securities.
(17) Amendment to Section 8.1(a). Section 8.1(a) of the
Credit Agreement is amended by deleting Section 8.1(a) and
substituting therefore the following:
(a) The Borrower fails to pay when due (i) any
payment of principal due on any of the Notes or (ii) any
Reimbursement Obligation; or
(18) Amendment to Section 8.2. Section 8.2 of the Credit
Agreement is amended by adding a new paragraph (e) to the end
of Section 8.2 as follows:
(e) Upon the occurrence of an Event of Default, to
the extent of any existing Letter of Credit Obligations,
the Agent may immediately advance the principal amount
thereof and set aside the amounts so advanced as a
collateral reserve for payment of the Reimbursement
Obligations relating to Letter of Credit which are
subsequently funded. After the Letter of Credit has been
canceled and all Reimbursement Obligations have been
satisfied, and the Issuing Bank has been reimbursed all
amounts funded by it with respect thereto, any balance
remaining in said collateral reserve may be applied to
other amounts owed by the Borrower hereunder, and, if
none, shall be remitted to Borrower.
Section 2. Conditions Precedent. This Second Amendment
and the obligations of the Lenders evidenced hereunder shall
not be effective unless:
(a) Second Escrow Agreement. Execution and delivery by
Borrower of the Second Escrow Agreement.
(b) Opinion of the Borrower's Counsel. The Borrower
shall have delivered to the Lenders, at the Borrower's
expense, a favorable written opinion from (i) Messrs. Xxxxxx &
Bird LLP, special counsel for the Borrower, dated as of and
delivered on the date of execution of this Second Amendment,
satisfactory to the Agent, and (ii) J. Xxxxx Xxxxx, Esq.,
General Counsel, Vice President, and Secretary of the
Borrower, dated as of and delivered on the date of execution
of this Agreement, satisfactory to the Agent.
(c) No Defaults. The Borrower shall be in full
compliance with all the terms and conditions of this
Agreement, and no Default or Event of Default shall have
occurred, and the Borrower shall have delivered to the
Lenders a certificate from an authorized officer of the
Borrower certifying such matters as the Lenders shall
reasonably request.
(d) Accuracy of Representations and Warranties. The
representations and warranties set forth herein shall be true
and correct, and the Borrower shall have delivered to the
Lenders a certificate from an authorized officer of the
Borrower certifying such matters related to the
representations and warranties as the Lenders shall reasonably
request.
(e) Corporate Action and Authority; Incumbency
Certificate. The Borrower shall have delivered to the Lenders
(i) confirmation that no change has been made to its
organizational papers, (ii) certificates from the Secretaries
of State of those states in which it is legally required to
qualify to transact business as a foreign corporation,
certifying its good standing as a corporation in such states,
and (iii) a copy of the resolutions passed by its Board of
Directors authorizing (A) its execution and delivery of and
the performance of the obligations under the Loan Documents to
which it is a party, as amended by this Second Amendment, (B)
the purchase of the SSC Securities, (C) the issuance of the
Letter of Credit on behalf of the Borrower, and (D) the pledge
of the Real Property as collateral hereunder, each certified
by its Secretary or Assistant Secretary, on behalf of and
under its seal, to be true and correct.
(f) Executed Counterparts. The execution of a
counterpart hereof by the Borrower and the Lenders and receipt
by the Borrower and the Agent of written or telephonic
notification of such execution and authorization or delivery
thereof.
(g) Guarantor Consents. Receipt by the Agent of a duly
executed Consent and Reaffirmation of Guarantors; and
(h) Payment of Fees. The Agent shall have received
payment by the Borrower of an amendment fee of $125,000 and
all fees set forth in the letter agreement dated as of October
13, 1998, between Borrower and the Agent.
Section 3. Reference to and Effect on the Credit
Agreement and the Other Loan Documents.
(1) On and after the date hereof, each reference in the
Credit Agreement to "this Agreement," "hereunder," "hereof,"
"herein" or words of like import referring to the Credit
Agreement, and each reference in the other Loan Documents to
the "Credit Agreement," "thereunder," "thereof" or words of
like import referring to the Credit Agreement shall mean and
be a reference to the Credit Agreement as amended hereby.
(2) Except as specifically amended by this Second
Amendment, the Credit Agreement and the other Loan Documents
shall remain in full force and effect and are hereby ratified
and confirmed.
(3) The execution, delivery and performance of this
Second Amendment shall not, except as expressly provided
herein, constitute a waiver of any provision of, or operate as
a waiver of any right, power or remedy of the Administrative
Agent or any Lender under the Credit Agreement or any of the
other Loan Documents.
Section 4. Miscellaneous.
(1) Section and Subsection Headings. Section and
Subsection headings in this Second Amendment are included
herein for convenience of reference only and shall not
constitute a part of this Second Amendment for any other
purpose or be given any substantive effect.
(2) Governing Law. This Second Amendment and the
rights and obligations of the parties hereunder shall be
governed by, and shall be construed and enforced in accordance
with, the laws of the State of New York.
(3) Counterparts. This Second Amendment may be executed
in any number of counterparts and by different parties hereto
and separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such
counterparts taken together shall constitute but one and the
same instrument; signature pages may be detached from multiple
separate counterparts and attached to a single counterpart so
that all signature pages are physically attached to the same
document.
IN WITNESS WHEREOF, the parties hereto have caused this
Second Amendment to be duly executed and delivered by their
respective officers thereunto duly authorized as of the date
first above written.
GOLD XXXX INC.
By: /s/ Xxxxxxx X. Xxxx
Name: Xxxxxxx X. Xxxx
Title: Treasurer
Attest: /s/Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Assistant Secretary
[CORPORATE SEAL]
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK
B.A., "Rabobank
Nederland", NEW YORK BRANCH,
individually and as Agent
By: /s/ X. X. Xxxxx
Name: X. X. Xxxxx
Title: Vice President
CONSENT AND REAFFIRMATION OF GUARANTORS
Each of the undersigned (i) acknowledges receipt of
the foregoing Second Amendment to Credit Agreement (the
"Second Amendment"), (ii) consents to the execution and
delivery of the Second Amendment by the parties thereto and
(iii) reaffirms all of its obligations and covenants under the
Guaranty Agreement dated as of [August 4, 1998] executed by
it, and agrees that none of such obligations and covenants
shall be affected by the execution and delivery of the Second
Amendment.
AGRATECH SEEDS INC. (SEAL)
By:/s/ Xxxxxxx X. Xxxx
Title: Assistant Treasurer
AGRATRADE FINANCING, INC. (SEAL)
By:/s/ Xxxxxxx X. Xxxx
Title: Treasurer
CAROLINA GOLDEN PRODUCTS
COMPANY, INC. (SEAL)
By:/s/ Xxxxxxx X. Xxxx
Title: Treasurer
CROSS EQUIPMENT COMPANY, INC. (SEAL)
By:/s/ Xxxxxxx X. Xxxx
Title: Treasurer
DIXICO PET FOOD, INC. (SEAL)
By:/s/ Xxxxxxx X. Xxxx
Title: Assistant Treasurer
FARMKIST ENTERPRISES, INC. (SEAL)
By:/s/ Xxxxxxx X. Xxxx
Title: Treasurer
GK FINANCE CORPORATION SEAL)
By:/s/ Xxxxxxx X. Xxxx
Title: Treasurer
GK PEANUTS, INC. SEAL)
By:/s/ Xxxxxxx X. Xxxx
Title: Assistant Treasurer
GK PECANS, INC. SEAL)
By:/s/ Xxxxxxx X. Xxxx
Title: Treasurer
XXXXX INC. SEAL)
By:/s/ Xxxxxxx X. Xxxx
Title: Assistant Treasurer
11562/Securities/Exhibit/2nd Amendment to Credit Agreement
