EXHIBIT 10.24
CREDIT AGREEMENT
(TERM LOAN)
BY AND BETWEEN
COBANK, ACB,
AS CO-SYNDICATION AGENT AND AS A SYNDICATION PARTY,
ST. ▇▇▇▇ BANK FOR COOPERATIVES,
AS CO-SYNDICATION AGENT, ADMINISTRATIVE AGENT, AND AS A SYNDICATION
PARTY,
AND
CENEX HARVEST STATES COOPERATIVES,
AS BORROWER
DATED AS OF JUNE 1, 1998
TABLE OF CONTENTS
ARTICLE 1. DEFINED TERMS.....................................................1
1.1 Additional Costs ....................................................1
1.2 Adjusted Consolidated Funded Debt ...................................1
1.3 Administrative Agent ................................................1
1.4 Administrative Agent's Office .......................................1
1.5 Advance .............................................................1
1.6 Advance Date ........................................................1
1.7 Advance Payment .....................................................1
1.8 Aggregate Commitment ................................................2
1.9 Amortization ........................................................2
1.10 Annual Operating Budget ............................................2
1.11 Applicable Lending Office ..........................................2
1.12 Authorized Officer .................................................2
1.13 Availability Period ................................................2
1.14 Bank Debt ..........................................................2
1.15 Banking Day ........................................................2
1.16 Bank Equity Interests ..............................................2
1.17 Base Rate ..........................................................2
1.18 Base Rate Loans ....................................................2
1.19 Borrower's Account .................................................2
1.20 Borrowing Notice ...................................................2
1.21 Capital Leases .....................................................3
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1.22 Closing Date .......................................................3
1.23 Code ...............................................................3
1.24 Compliance Certificate .............................................3
1.25 Consolidated Cash Flow .............................................3
1.26 Consolidated Current Assets ........................................3
1.27 Consolidated Current Liabilities ...................................3
1.28 Consolidated Funded Debt ...........................................3
1.29 Consolidated Interest Expense ......................................3
1.30 Consolidated Members' and Patrons' Equity ..........................3
1.31 Consolidated Subsidiary ............................................4
1.32 Contributing Syndication Parties ...................................4
1.33 Debt ...............................................................4
1.34 Default Interest Rate ..............................................4
1.35 Delinquency Interest ...............................................4
1.36 Delinquent Amount ..................................................4
1.37 Delinquent Syndication Party .......................................4
1.38 Depreciation .......................................................4
1.39 Environmental Laws .................................................4
1.40 Environmental Regulations ..........................................4
1.41 ERISA ..............................................................4
1.42 ERISA Affiliate ....................................................4
1.43 Event of Default ...................................................5
1.44 Event of Syndication Default .......................................5
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1.45 Existing Credit Agreement ..........................................5
1.46 Facility Letters of Credit .........................................5
1.47 Fiscal Quarter .....................................................5
1.48 Fiscal Year ........................................................5
1.49 Funded Debt ........................................................5
1.50 Funding Losses .....................................................5
1.51 Funding Loss Notice ................................................5
1.52 Funding Share ......................................................6
1.53 GAAP ...............................................................6
1.54 Good Faith Contest .................................................6
1.55 Governmental Authority .............................................6
1.56 Hazardous Substances ...............................................6
1.57 Indemnified Agency Parties .........................................6
1.58 Indemnified Parties ................................................6
1.59 Individual Commitment ..............................................6
1.60 Individual Lending Capacity ........................................6
1.61 Individual Outstanding Obligations .................................6
1.62 Individual Pro Rata Share ..........................................7
1.63 Investment .........................................................7
1.64 Licensing Laws .....................................................7
1.65 Lien ...............................................................7
1.66 Loan Documents .....................................................7
1.67 Material Adverse Effect ............................................7
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1.68 Material Agreements ................................................7
1.69 Maturity Date ......................................................7
1.70 Merger .............................................................7
1.71 Multiemployer Plan .................................................8
1.72 Note or Notes ......................................................8
1.73 Operating Lease ....................................................8
1.74 Organization Documents .............................................8
1.75 Payment Account ....................................................8
1.76 Payment Distribution ...............................................8
1.77 PBGC ...............................................................8
1.78 Permitted Encumbrance ..............................................8
1.79 Person .............................................................8
1.80 Plan ...............................................................8
1.81 Potential Default ..................................................8
1.82 Predecessor Companies ..............................................8
1.83 Prohibited Transaction .............................................8
1.84 Quarter ............................................................9
1.85 Quoted Rate ........................................................9
1.86 Quoted Rate Loan ...................................................9
1.87 Quoted Rate Period .................................................9
1.88 Quoted Rate Request ................................................9
1.89 Regulatory Change ..................................................9
1.90 Reportable Event ...................................................9
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1.91 Required Lenders ....................................................9
1.92 Required License ....................................................9
1.93 Restricted Subsidiary ...............................................9
1.94 Revolving Loan Credit Agreement .....................................9
1.95 Subsidiary ..........................................................9
1.96 Successor Agent .....................................................9
1.97 Syndication Acquisition Agreement ..................................10
1.98 Syndication Interest ...............................................10
1.99 Syndication Parties ................................................10
1.100 Syndication Party Advance Date ....................................10
1.101 Transfer ..........................................................10
1.102 Treasury Rate .....................................................10
1.103 Treasury Rate Loan ................................................10
1.104 Treasury Rate Period ..............................................10
1.105 Treasury Rate Request .............................................10
1.106 Wire Instructions .................................................10
ARTICLE 2. TERM LOAN.........................................................11
2.1 Term Loan ...........................................................11
2.1.1 Individual Commitment ..............................11
2.1.2 Individual Pro Rata Share ..........................11
2.2 Aggregate Commitment ................................................11
2.3 Borrowing Notice ....................................................11
2.4 Promissory Notes ....................................................11
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2.5 Syndication Party Records ...........................................12
2.6 Use of Proceeds .....................................................12
2.7 Syndication Party Funding Failure ...................................12
2.8 Reduction of Aggregate Commitment ...................................12
ARTICLE 3. INTEREST AND FEES.................................................12
3.1 Interest ............................................................12
3.1.1 Base Rate Option ...................................12
3.1.2 Treasury Rate Option ...............................13
3.1.3 Quoted Rate Option .................................13
3.2 Default Interest Rate ...............................................14
3.3 Interest Calculation ................................................14
3.4 Fees ................................................................14
3.4.1 Unused Commitment Fee ..............................14
ARTICLE 4.PAYMENTS; FUNDING LOSSES............................................14
4.1 Principal Payments ..................................................14
4.2 Interest Payments ...................................................14
4.3 Application of Principal Payments ...................................14
4.4 Manner of Payment ...................................................15
4.5 Voluntary Prepayments ...............................................15
ARTICLE 5. BANK EQUITY INTERESTS.............................................15
ARTICLE 6. SECURITY..........................................................16
ARTICLE 7. REPRESENTATIONS AND WARRANTIES....................................16
7.1 Organization, Good Standing, Etc. ...................................16
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7.2 Corporate Authority, Due Authorization; Consents ....................16
7.3 Litigation ..........................................................16
7.4 No Violations .......................................................16
7.5 Binding Agreement ...................................................17
7.6 Compliance with Laws ................................................17
7.7 Principal Place of Business .........................................17
7.8 Payment of Taxes ....................................................17
7.9 Licenses and Approvals ..............................................17
7.10 Employee Benefit Plans .............................................18
7.11 Equity Investments .................................................18
7.12 Title to Real and Personal Property ................................18
7.13 Financial Statements ...............................................18
7.14 Environmental Compliance ...........................................19
7.15 Fiscal Year ........................................................19
7.16 Material Agreements ................................................19
7.17 Regulations U and X ................................................19
7.18 Trademarks, Tradenames, etc. .......................................19
7.19 No Default on Outstanding Judgments or Orders ......................19
7.20 No Default in Other Agreements .....................................19
7.21 Labor Disputes and Acts of God .....................................20
7.22 Governmental Regulation ............................................20
7.23 Disclosure .........................................................20
ARTICLE 8. CONDITIONS TO ADVANCES............................................20
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8.1 Conditions to Closing ...............................................20
8.1.1 Loan Documents .....................................20
8.1.2 Approvals ..........................................20
8.1.3 Organizational Documents ...........................20
8.1.4 Evidence of Insurance ..............................21
8.1.5 Appointment of Agent for Service ...................21
8.1.6 No Material Change .................................21
8.1.7 Fees and Expenses ..................................21
8.1.8 Bank Equity Interest Purchase Obligation ...........21
8.1.9 Opinion of Counsel .................................21
8.1.10 Further Assurances ................................21
8.2 Conditions to Advance ...............................................21
8.2.1 Evidence of Corporate Action .......................21
8.2.2 Consummation of Merger; Amendment of Articles of
Incorporation ......................................22
8.2.3 Cancellation of Existing Credit Agreements .........22
8.2.4 Default ............................................22
8.2.5 Representations and Warranties .....................22
ARTICLE 9. AFFIRMATIVE COVENANTS.............................................22
9.1 Books and Records ...................................................22
9.2 Reports and Notices .................................................22
9.2.1 Annual Financial Statements ........................22
9.2.2 Quarterly Financial Statements .....................23
9.2.3 Notice of Default ..................................23
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9.2.4 ERISA Reports ......................................23
9.2.5 Notice of Litigation ...............................23
9.2.6 Notice of Material Adverse Effect ..................24
9.2.7 Notice of Environmental Proceedings ................24
9.2.8 Regulatory and Other Notices .......................24
9.2.9 Adverse Action Regarding Required Licenses .........24
9.2.10 Budget ............................................24
9.2.11 Additional Information ............................24
9.3 Eligibility .........................................................24
9.4 Maintenance of Existence and Qualification ..........................25
9.5 Compliance with Legal Requirements and Agreements ...................25
9.6 Compliance with Environmental Laws ..................................25
9.7 Taxes ...............................................................25
9.8 Insurance ...........................................................25
9.9 Maintenance of Properties ...........................................26
9.10 Payment of Liabilities .............................................26
9.11 Inspection .........................................................26
9.12 Required Licenses; Permits; Etc ....................................26
9.13 ERISA ..............................................................26
9.14 Maintenance of Commodity Position ..................................26
9.15 Financial Covenants ................................................26
9.15.1 Working Capital ...................................27
9.15.2 Consolidated Funded Debt to Consolidated Cash Flow 27
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9.15.3 Adjusted Consolidated Funded Debt to Consolidated
Members' and Patrons' Equity .....................27
ARTICLE 10. NEGATIVE COVENANTS...............................................27
10.1 Borrowing ..........................................................27
10.2 No Other Businesses ................................................27
10.3 Liens ..............................................................27
10.4 Sale of Assets .....................................................29
10.5 Liabilities of Others ..............................................29
10.6 Loans ..............................................................30
10.7 Merger; Acquisitions; Business Form; Etc ...........................30
10.8 Investments ........................................................30
10.9 Transactions With Related Parties ..................................31
10.10 Patronage Refunds, etc. ...........................................31
10.11 Change in Fiscal Year .............................................31
ARTICLE 11. INDEMNIFICATION..................................................32
11.1 General; Stamp Taxes; Intangibles Tax ..............................32
11.2 Indemnification Relating to Hazardous Substances ...................32
ARTICLE 12. EVENTS OF DEFAULT; RIGHTS AND REMEDIES...........................33
12.1 Events of Default ..................................................33
12.2 No Advance .........................................................35
12.3 Rights and Remedies ................................................35
ARTICLE 13. AGENCY AGREEMENT.................................................35
13.1 Funding of Syndication Interest ....................................35
13.2 Syndication Parties' Obligations to Remit Funds ....................35
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13.3 Syndication Party's Failure to Remit Funds .........................36
13.4 Agency Appointment .................................................36
13.5 Power and Authority of the Administrative Agent ....................37
13.5.1 Advice ............................................37
13.5.2 Documents .........................................37
13.5.3 Proceedings .......................................37
13.5.4 Retain Professionals ..............................37
13.5.5 Incidental Powers .................................37
13.6 Duties of the Administrative Agent .................................37
13.6.1 Possession of Documents ...........................37
13.6.2 Distribute Payments ...............................37
13.6.3 Loan Administration ...............................38
13.6.4 Action Upon Default ...............................38
13.7 Indemnification as Condition to Action ..............39
13.8 Consent Required for Certain Actions ...............................39
13.8.1 Unanimous .........................................39
13.8.2 Required Lenders ..................................39
13.8.3 Action Without Vote ...............................39
13.9 Distribution of Principal and Interest .............................40
13.10 Distribution of Certain Amounts ...................................40
13.10.1 Funding Losses ...................................40
13.11 Possession of Loan Documents ......................................40
13.12 Collateral Application ............................................40
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13.13 Amounts Required to be Returned ...................................41
13.14 Reports and Information to Syndication Parties ....................41
13.15 Standard of Care ..................................................42
13.16 No Trust Relationship .............................................42
13.17 Sharing of Costs and Expenses .....................................42
13.18 Syndication Parties' Indemnification of the Administrative Agent ..43
13.19 Books and Records .................................................43
13.20 Administrative Agent Fee ..........................................43
13.21 The Administrative Agent's Resignation or Removal .................43
13.22 Representations and Warranties of All Parties .....................44
13.23 Representations and Warranties of St. ▇▇▇▇ Bank ...................44
13.24 Syndication Parties' Independent Credit Analysis ..................44
13.25 No Joint Venture or Partnership ...................................45
13.26 Purchase for Own Account; Restrictions on Transfer; Participations 45
13.27 Certain Participants' Voting Rights ...............................46
13.28 Method of Making Payments .........................................46
13.29 Events of Syndication Default/Remedies ............................46
13.29.1 Syndication Party Default ........................46
13.29.2 Remedies .........................................47
13.30 Withholding Taxes .................................................47
13.31 Amendments Concerning Agency Function .............................47
13.32 Further Assurances ................................................47
ARTICLE 14. MISCELLANEOUS....................................................47
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14.1 Costs and Expenses .................................................47
14.2 Service of Process and Consent to Jurisdiction .....................48
14.3 Jury Waiver ........................................................48
14.4 Notices ............................................................48
14.4.1 Borrower ..........................................49
14.4.2 Administrative Agent ..............................49
14.4.3 Syndication Parties ...............................49
14.5 Liability of Administrative Agent ..................................49
14.6 Successors and Assigns .............................................49
14.7 Severability .......................................................49
14.8 Entire Agreement ...................................................49
14.9 Applicable Law .....................................................50
14.10 Captions ..........................................................50
14.11 Complete Agreement; Amendments ....................................50
14.12 Additional Costs of Maintaining Loan ..............................50
14.13 Capital Requirements ..............................................51
14.14 Replacement Notes .................................................51
14.15 Patronage Payments ................................................52
14.16 Mutual Release ....................................................52
14.17 Liberal Construction ..............................................52
14.18 Counterparts ......................................................52
14.19 Confidentiality ...................................................52
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EXHIBITS
Exhibit 1.24 Compliance Certificate
Exhibit 1.93 Restricted Subsidiary
Exhibit 2.3 Borrowing Notice
Exhibit 2.4 Promissory Note Form
Exhibit 4.1 Principal Payments
Exhibit 7.3 Litigation
Exhibit 7.8 Payment of Taxes
Exhibit 7.11 Equity Investments
Exhibit 7.12 Permitted Encumbrances
Exhibit 7.14 Environmental Compliance
Exhibit 10.1 Existing Indebtedness
Exhibit 13.26 Syndication Acquisition Agreement
Exhibit 13.28 Wire Instructions
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CREDIT AGREEMENT
(TERM LOAN)
Cenex Harvest States Cooperatives
Loan No. T-39610
THIS AGREEMENT ("CREDIT AGREEMENT") is entered into as of the 1st day
of June 1998, by and between COBANK, ACB ("COBANK") for its own benefit as a
Syndication Party and as Co-Syndication Agent, and ST. ▇▇▇▇ BANK FOR
COOPERATIVES ("ST. ▇▇▇▇ BANK"), for its own benefit as a Syndication Party, as
Co-Syndication Agent, and as the Administrative Agent for the benefit of the
present and future Syndication Parties (in that capacity "ADMINISTRATIVE
AGENT"), the other Syndication Parties identified on Schedule 2 hereto, and
CENEX HARVEST STATES COOPERATIVES (formerly known as Harvest States
Cooperatives), a cooperative corporation formed under the laws of the State of
Minnesota, whose address is ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("BORROWER").
ARTICLE 1. DEFINED TERMS
As used in this Credit Agreement, the following terms shall have the
meanings set forth below (and such meaning shall be equally applicable to both
the singular and plural form of the terms defined, as the context may require):
1.1 ADDITIONAL COSTS: shall have the meaning set forth in Section
14.12.
1.2 ADJUSTED CONSOLIDATED FUNDED DEBT: All indebtedness for borrowed
money of the Borrower and its Subsidiaries, in each case maturing by its terms
more than one year after, or which is renewable or extendible for a period
ending one year or more after the date of determination, and shall include Debt
of such maturity created or assumed by the Borrower or any Subsidiary either
directly or indirectly, including obligations of such maturity secured by liens
upon property of the Borrower or its Subsidiaries and upon which such entity
customarily pays the interest, and all rental payments under Capital Leases of
such maturity, and the net present value of operating leases as discounted by a
rate which is 1.5% less than the National Prime Rate as stated in the WALL
STREET JOURNAL.
1.3 ADMINISTRATIVE AGENT: shall mean St. ▇▇▇▇ Bank.
1.4 ADMINISTRATIVE AGENT'S OFFICE: that address set forth for the
Administrative Agent in Section 14.4 as it may change from time to time by
notice to all parties to this Credit Agreement.
1.5 ADVANCE: a disbursement of the proceeds of the Term Loan.
1.6 ADVANCE DATE: a day (which shall be a Banking Day) on which an
Advance is made.
1.7 ADVANCE PAYMENT: shall have the meaning set forth in Section 13.1.
1.8 AGGREGATE COMMITMENT: shall be $200,000,000.00, subject to
reduction as provided in Section 2.8 hereof.
1.9 AMORTIZATION: the total amortization of Borrower and its
Consolidated Subsidiaries as measured in accordance with GAAP.
1.10 ANNUAL OPERATING BUDGET: means the annual operating budget for
Borrower and its Subsidiaries in substantially the form of, and containing
substantially the same or similar information as set forth in, the Annual
Operating Budget (Business Plan) for Borrower and its Subsidiaries included in
the Confidential Information Memorandum dated April 1998 delivered to the
Syndication Parties prior to the Closing Date.
1.11 APPLICABLE LENDING OFFICE: means, for each Syndication Party, the
lending office of such Syndication Party designated as such on its signature
page hereof or in the applicable Syndication Acquisition Agreement or such other
office of such Syndication Party as such Syndication Party may from time to time
specify to the Administrative Agent and Borrower as the office by which its
Advances are to be made and maintained.
1.12 AUTHORIZED OFFICER: shall have the meaning set forth in Subsection
8.1.6.
1.13 AVAILABILITY PERIOD: shall mean the period commencing on the
Closing Date and expiring on May 31, 1999.
1.14 BANK DEBT: all amounts owing under the Notes, fees, Borrower's
obligations to purchase Bank Equity Interests, Funding Losses and all interest,
expenses, charges and other amounts payable by Borrower pursuant to the Loan
Documents.
1.15 BANKING DAY: any day other than a Saturday or Sunday and other
than a day which is a Federal legal holiday or a legal holiday for banks in the
States of Colorado, Minnesota or New York.
1.16 BANK EQUITY INTERESTS: shall have the meaning set forth in Article
5 hereof.
1.17 BASE RATE: a rate of interest per annum equal to the "prime rate"
as published from time to time in the Eastern Edition of the WALL STREET JOURNAL
as the average prime lending rate for seventy-five percent (75%) of the United
States' thirty (30) largest commercial banks, or if the WALL STREET JOURNAL
shall cease publication or
2
cease publishing the "prime rate" on a regular basis, such other regularly
published average prime rate applicable to such commercial banks as is
acceptable to the Administrative Agent in its reasonable discretion.
1.18 BASE RATE LOANS: shall have the meaning set forth in Subsection
3.1.1.
1.19 BORROWER'S ACCOUNT: shall mean Borrower's account #44070 at
Norwest Bank Minnesota, N.A., Minneapolis, Minnesota (ABA #▇▇▇▇▇▇▇▇▇).
1.20 BORROWING NOTICE: shall have the meaning set forth in Section 2.3.
1.21 CAPITAL LEASES: means any lease of property (whether real,
personal or mixed) by a Person which has been or should be, in accordance with
GAAP, reflected on the balance sheet of such Person as a capital lease.
1.22 CLOSING DATE: that date, which must occur on or before June 1,
1998, on which the Administrative Agent, the Syndication Parties, and Borrower
have executed all Loan Documents to which they are parties and on which the
conditions set forth in Section 8.1 of this Credit Agreement have been met.
1.23 CODE: means the Internal Revenue Code of 1986.
1.24 COMPLIANCE CERTIFICATE: a certificate of the chief financial
officer of Borrower acceptable to the Administrative Agent and in the form
attached hereto as Exhibit 1.24.
1.25 CONSOLIDATED CASH FLOW: the sum of (i) earnings before income
taxes of the Borrower and its Consolidated Subsidiaries calculated in accordance
with GAAP plus (ii) amounts in determination of consolidated earnings before
income taxes for such period, that have been deducted for (a) Consolidated
Interest Expense for such period, (b) Depreciation and (c) Amortization minus
the sum of (d) one-time gains, (e) extraordinary income, (f) non-cash patronage
income, and (g) non-cash equity earnings in joint ventures.
1.26 CONSOLIDATED CURRENT ASSETS: the total current assets of Borrower
and its Subsidiaries as measured in accordance with GAAP.
1.27 CONSOLIDATED CURRENT LIABILITIES: the total current liabilities of
Borrower and its Subsidiaries as measured in accordance with GAAP.
1.28 CONSOLIDATED FUNDED DEBT: all indebtedness for borrowed money of
the Borrower and its Subsidiaries, in each case maturing by its terms more than
one year after, or which is renewable or extendible for a period ending one year
or more after, the date of determination, and shall include Debt of such
maturity created or assumed by the Borrower or any Subsidiary either directly or
indirectly, including obligations of such maturity secured by liens upon
property of the Borrower or its Subsidiaries and upon
3
which such entity customarily pays the interest, and all rental payments under
capitalized leases of such maturity.
1.29 CONSOLIDATED INTEREST EXPENSE: all interest expense of Borrower
and its Consolidated Subsidiaries, as determined in accordance with GAAP.
1.30 CONSOLIDATED MEMBERS' AND PATRONS' EQUITY: the amount of equity
accounts plus (or minus in the case of a deficit) the amount of surplus and
retained earnings accounts of the Borrower and its Consolidated Subsidiaries and
the minority interest in Subsidiaries, provided that the total amount of
intangible assets of the Borrower and its Consolidated Subsidiaries (including,
without limitation, unamortized debt discount and expense, deferred charges and
goodwill) included therein shall not exceed $30,000,000 (and to the extent such
intangible assets exceed $30,000,000.00, they will not be included in the
calculation of Consolidated Members' and Patrons' Equity); all as determined in
accordance with GAAP consistently applied, but excluding therefrom any minority
interests in any Consolidated Subsidiaries without duplication of deduction if
already deducted in determining retained earnings and surplus.
1.31 CONSOLIDATED SUBSIDIARY: any Subsidiary whose accounts are
consolidated with those of Borrower in accordance with GAAP.
1.32 CONTRIBUTING SYNDICATION PARTIES: shall have the meaning set forth
in Section 13.3.
1.33 DEBT: means as to any Person: (a) indebtedness or liability of
such Person for borrowed money, or for the deferred purchase price of property
or services (including trade obligations); (b) obligations of such Person as
lessee under Capital Leases; (c) obligations of such Person arising under
bankers' or trade acceptance facilities; (d) all obligations secured by a lien
on property owned by such Person, whether or not the obligations have been
assumed; and (e) all obligations of such Person under any agreement providing
for an interest rate swap, cap, cap and floor, contingent participation or other
hedging mechanisms with respect to interest payable on any of the items
described in this definition.
1.34 DEFAULT INTEREST RATE: a rate of interest equal to 200 basis
points in excess of the Base Rate which would otherwise be applicable on the
Loan.
1.35 DELINQUENCY INTEREST: shall have the meaning set forth in Section
13.3.
1.36 DELINQUENT AMOUNT: shall have the meaning set forth in Section
13.3.
1.37 DELINQUENT SYNDICATION PARTY: shall have the meaning set forth in
Section 13.3.
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1.38 DEPRECIATION: the total depreciation of Borrower and its
Consolidated Subsidiaries as measured in accordance with GAAP.
1.39 ENVIRONMENTAL LAWS: the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 as amended, 42 U.S.C. 9601-9657
("CERCLA") and the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
6901-6987 ("RCRA").
1.40 ENVIRONMENTAL REGULATIONS: as defined in the definition of
Hazardous Substances.
1.41 ERISA: shall have the meaning set forth in Section 7.10.
1.42 ERISA AFFILIATE: means any corporation or trade or business which
is a member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as Borrower or is under common control (within the
meaning of Section 414(c) of the Code) with Borrower, provided, however, that
for purposes of provisions herein concerning minimum funding obligations
(imposed under Section 412 of the Code or Section 302 of ERISA), the term "ERISA
Affiliate" shall also include any entity required to be aggregated with Borrower
under Section 414(m) or 414(o) of the Code.
1.43 EVENT OF DEFAULT: shall have the meaning set forth in Section
12.1.
1.44 EVENT OF SYNDICATION DEFAULT: shall have the meaning set forth in
Subsection 13.29.1.
1.45 EXISTING CREDIT AGREEMENTS: shall mean (a) the Revolving Credit
Agreement dated as of November 1, 1996 among Harvest States Cooperatives as
borrower, St. ▇▇▇▇ Bank as syndication agent and bank, and CoBank as syndication
agent, administrative agent, bid agent, and bank and the other banks signatory
thereto, as amended by the First Amendment to Revolving Credit Agreement dated
as of October 31, 1997, (b) the Loan Agreement dated as of March 14, 1997 by and
between St. ▇▇▇▇ Bank and Cenex, Inc., as amended by the Amendment to Loan
Agreement dated as of September 23, 1997, the Amendment to Loan Agreement dated
as of December 31, 1997, and the Amendment to Loan Agreement dated as of March
18, 1998; (c) the Master Syndicated Loan Agreement dated as of August 28, 1995,
by and between CoBank, St. ▇▇▇▇ Bank, and Harvest States Cooperatives, as
amended and restated by the Amended and Restated Master Syndicated Loan
Agreement dated as of October 28, 1996 by and between CoBank, St. ▇▇▇▇ Bank, and
Harvest States Cooperatives, and as the foregoing shall have been supplemented
by the First Supplement dated as of August 28, 1995, by the St. ▇▇▇▇ Supplement
dated as of October 13, 1995 (by and between St. ▇▇▇▇ Bank and Harvest States
Cooperatives only), by the Third Supplement dated as of December 15, 1995, and
by the Fourth Supplement dated as of July 25, 1997; and (d) the
5
promissory notes, security documents, and other loan documents executed in
connection with (a), (b) and (c).
1.46 FACILITY LETTERS OF CREDIT: shall mean those letters of credit
issued pursuant to the terms of the Revolving Loan Credit Agreement.
1.47 FISCAL QUARTER: each three (3) month period beginning on the first
day of each of the following months: September, December, March and June.
1.48 FISCAL YEAR: a year commencing on September 1 and ending on August
31.
1.49 FUNDED DEBT: means, with respect to any Person, at any time, all
Debt of such Person in each case maturing by its terms more than one year after
the date of creation thereof, or which is renewable or extendible at the option
of such Person for a period ending more than one (1) year after the date of
creation thereof, and shall include Debt of such maturity created or assumed by
such Person either directly or indirectly, including obligations of such
maturity secured by liens upon property of such Person and upon which such
Person customarily pays the interest, and all obligations of such Person under
Capital Leases of such maturity, and the net present value of obligations under
Operating Leases as discounted by a rate which is 1.5% less than the Base Rate
in effect at such time, and all obligations to reimburse financial institutions
issuing letters of credit for the account of such Person with respect to all
letters of credit which support long-term debt, with expiration dates in excess
of one year from the date of issuance thereof.
1.50 FUNDING LOSSES: shall have the meaning set forth in Section 4.5.
1.51 FUNDING LOSS NOTICE: shall have the meaning set forth in Section
4.5.
1.52 FUNDING SHARE: shall mean the amount of any Advance which each
Syndication Party is required to fund, which shall be determined as follows: the
amount of such Advance multiplied by such Syndication Party's Individual Pro
Rata Share as of, but without giving effect to, such Advance.
1.53 GAAP: generally accepted accounting principles in the United
States of America, applied consistently, as in effect from time to time.
1.54 GOOD FAITH CONTEST: means the contest of an item if (a) the item
is diligently contested in good faith by appropriate proceedings timely
instituted, (b) either the item is (i) bonded or (ii) adequate reserves are
established with respect to the contested item if and to the extent required in
accordance with GAAP, (c) during the period of such contest, the enforcement of
any contested item is effectively stayed, and (d) the failure to pay or comply
with the contested item could not reasonably be expected to result in a Material
Adverse Effect.
6
1.55 GOVERNMENTAL AUTHORITY: means any nation or government, any state
or other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
1.56 HAZARDOUS SUBSTANCES: dangerous, toxic or hazardous pollutants,
contaminants, chemicals, wastes, materials or substances, as defined in or
governed by the provisions of any Environmental Laws or any other federal, state
or local law, statute, code, ordinance, regulation, requirement or rule relating
thereto ("ENVIRONMENTAL REGULATIONS"), and also including urea formaldehyde,
polychlorinated biphenyls, asbestos, asbestos-containing materials, nuclear fuel
or waste, and petroleum products, or any other waste, material, substances,
pollutant or contaminant which would subject an owner of property to any
damages, penalties or liabilities under any applicable Environmental
Regulations.
1.57 INDEMNIFIED AGENCY PARTIES: shall have the meaning set forth in
Section 13.18.
1.58 INDEMNIFIED PARTIES: shall have the meaning set forth in Section
11.1.
1.59 INDIVIDUAL COMMITMENT: shall mean with respect to any Syndication
Party, the amount shown as its Individual Commitment on Schedule 1 hereto,
subject to adjustment in the event of the sale of all or a portion of a
Syndication Interest in accordance with Section 13.26 hereof, or a reduction in
the Aggregate Commitment in accordance with Section 2.8 hereof.
1.60 INDIVIDUAL LENDING CAPACITY: shall mean with respect to any
Syndication Party the amount at any time of its Individual Commitment less its
Individual Outstanding Obligations.
1.61 INDIVIDUAL OUTSTANDING OBLIGATIONS: shall mean, with respect to
any Syndication Party, the aggregate outstanding principal amount of all
Advances made by such Syndication Party.
1.62 INDIVIDUAL PRO RATA SHARE: shall mean with respect to any
Syndication Party a fraction, expressed as a percentage, where the numerator is
such Syndication Party's Individual Commitment and the denominator is the
Aggregate Commitment, determined at 12:00 noon (Central time) on the Banking Day
Borrower delivers a Borrowing Notice.
1.63 INVESTMENT: means, with respect to any Person, (a) any loan or
advance by such Person to any other Person, (b) the purchase or other
acquisition by such Person of any capital stock, obligations or securities of,
or any capital contribution to, or investment in, or the acquisition by such
Person of all or substantially all of the assets of, or any interest in, any
other Person, (c) any performance or standby letter of credit where (i) that
Person has the reimbursement obligation to the issuer, and (ii) the
7
proceeds of such letter of credit are to be used for the benefit of any other
Person, (d) the agreement by such Person to make funds available for the benefit
of another Person to either cover cost overruns incurred in connection with the
construction of a project or facility, or to fund a debt service reserve
account, (e) the agreement by such Person to assume, guarantee, endorse or
otherwise be or become directly or contingently responsible or liable for the
obligations or Debts of any other Person (other than by endorsement for
collection in the ordinary course of business), (f) an agreement to purchase any
obligations, stocks, assets, goods or services but excluding an agreement to
purchase any assets, goods or services entered into in the ordinary course of
business, (g) an agreement to supply or advance any funds, assets, goods or
services, or (h) an agreement to maintain or cause such Person to maintain a
minimum working capital or net worth or otherwise to assure the creditors of any
Person against loss.
1.64 LICENSING LAWS: shall have the meaning set forth in Section 7.4.
1.65 LIEN: means with respect to any asset any mortgage, deed of trust,
pledge, security interest, hypothecation, assignment for security purposes,
encumbrance, lien (statutory or other), or other security agreement or charge,
or encumbrance of any kind or nature whatsoever (including, without limitation,
any conditional sale, Capital Lease or other title retention agreement related
to such asset).
1.66 LOAN DOCUMENTS: this Credit Agreement and the Notes.
1.67 MATERIAL ADVERSE EFFECT: means: (a) a material adverse effect on
the financial condition, results of operation, business or property of Borrower;
or (b) a material adverse effect on the ability of Borrower to perform its
obligations under this Credit Agreement and the other Loan Documents.
1.68 MATERIAL AGREEMENTS: all agreements of Borrower, the termination
or breach of which, based upon Borrower's knowledge as of the date of making any
representation with respect thereto, would have a Material Adverse Effect.
1.69 MATURITY DATE: May 31, 2009.
1.70 MERGER: means the combination, by merger, of the two Predecessor
Companies in accordance with (a) the Transaction Agreement between them dated as
of January 29, 1998, (b) the Plan of Combination dated as of February 2, 1998,
and (c) the Articles of Merger adopted and executed by each of the Predecessor
Companies, with Borrower being the surviving corporation.
1.71 MULTIEMPLOYER PLAN: means a Plan defined as such in Section 3(37)
of ERISA.
1.72 NOTE OR NOTES: the promissory notes executed by Borrower pursuant
to Section 2.4 hereof, and all amendments, renewals, substitutions and
extensions thereof.
8
1.73 OPERATING LEASE: means any lease of property (whether real,
personal or mixed) by a Person under which such Person is lessee, other than a
Capital Lease.
1.74 ORGANIZATION DOCUMENTS: in the case of a corporation, its articles
or certificate of incorporation and bylaws; in the case of a partnership, its
partnership agreement and certificate of limited partnership, if applicable; in
the case of a limited liability company, its articles of organization and its
operating agreement.
1.75 PAYMENT ACCOUNT: shall have the meaning set forth in Section 13.9.
1.76 PAYMENT DISTRIBUTION: shall have the meaning set forth in Section
13.9.
1.77 PBGC: shall have the meaning set forth in Section 7.10.
1.78 PERMITTED ENCUMBRANCE: shall have the meaning set forth in Section
7.12.
1.79 PERSON: any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, cooperative association, institution, or government or
governmental agency (whether national, federal, state, provincial, country,
city, municipal or otherwise, including without limitation, and instrumentality,
division, agency, body or department thereof), or other entity.
1.80 PLAN: means any plan, agreement, arrangement or commitment which
is an employee benefit plan, as defined in Section 3(3) of ERISA, maintained by
Borrower or any Subsidiary or any ERISA Affiliate or with respect to which
Borrower or any Subsidiary or any ERISA Affiliate at any relevant time has any
liability or obligation to contribute.
1.81 POTENTIAL DEFAULT: any event, other than an event described in
Section 12.1(a) hereof, which with the giving of notice or lapse of time, or
both, would become an Event of Default.
1.82 PREDECESSOR COMPANIES: shall mean Harvest States Cooperatives and
Cenex, Inc.
1.83 PROHIBITED TRANSACTION: means any transaction prohibited under
Section 406 of ERISA or Section 4975 of the Code.
1.84 QUARTER: the quarters of the calendar year commencing as of
January 1, April 1, July 1 and October 1.
1.85 QUOTED RATE: shall mean a fixed rate of interest determined and
quoted by the Administrative Agent in its sole and absolute discretion from time
to time at the
9
request of Borrower, which may not necessarily be the lowest rate at which the
Administrative Agent or any of the Syndication Parties loans funds at that time.
1.86 QUOTED RATE LOAN: shall have the meaning set forth in Subsection
3.1.3.
1.87 QUOTED RATE PERIOD: shall have the meaning set forth in Subsection
3.1.3.
1.88 QUOTED RATE REQUEST: shall have the meaning set forth in
Subsection 3.1.3.
1.89 REGULATORY CHANGE: shall have the meaning set forth in Section
14.12.
1.90 REPORTABLE EVENT: means any of the events set forth in Section
4043(b) of ERISA or in the regulations thereunder.
1.91 REQUIRED LENDERS: shall mean Syndication Parties whose Individual
Commitments constitute sixty-six and two-thirds percent (66 2/3%) of the
Aggregate Commitment; provided that the number of Syndication Parties which
constitute the Required Lenders must be no fewer than two (2) even if fewer than
two (2) would constitute sixty-six and two-thirds percent (66 2/3%) of the
Aggregate Commitment.
1.92 REQUIRED LICENSE: shall have the meaning set forth in Section 7.9.
1.93 RESTRICTED SUBSIDIARY: shall mean those Subsidiaries identified on
Exhibit 1.93 hereto, as it may be amended from time to time with the prior
written consent of Borrower, the Administrative Agent and the Required Lenders.
1.94 REVOLVING LOAN CREDIT AGREEMENT: shall mean that certain Credit
Agreement (Revolving Loan) dated as of June 1, 1998 by and between Borrower and
CoBank, as administrative agent for all syndication parties thereunder, and as a
syndication party thereunder, St. ▇▇▇▇ Bank, and the other syndication parties
set forth on the signature pages thereto.
1.95 SUBSIDIARY: means with respect to any Person: (a) any corporation
in which such Person, directly or indirectly, (i) owns fifty percent (50%) or
more of the outstanding stock thereof, or (ii) has the power under ordinary
circumstances to elect at least a majority of the directors thereof, or (b) any
partnership, association, joint venture, limited liability company, or other
unincorporated organization or entity with respect to which such Person,
directly or indirectly, owns an equity interest in an amount sufficient to
control the management thereof.
1.96 SUCCESSOR AGENT: such Person as may be appointed as successor to
the rights and duties of the Administrative Agent as provided in Section 13.21
of this Credit Agreement.
10
1.97 SYNDICATION ACQUISITION AGREEMENT: shall have the meaning set
forth in Section 13.26.
1.98 SYNDICATION INTEREST: shall have the meaning set forth in Section
13.1.
1.99 SYNDICATION PARTIES: shall mean those entities listed on Schedule
1 hereto, including CoBank and St. ▇▇▇▇ Bank in their roles as Syndication
Parties hereunder, but not in their roles as Co-Syndication Agents, or the
Administrative Agent, as applicable, hereunder, and such Persons as shall from
time to time execute a Syndication Acquisition Agreement substantially in the
form of Exhibit 13.26 hereto signifying their election to purchase all or a
portion of the Syndication Interest of any Syndication Party, in accordance with
Section 13.26 hereof, and to become a Syndication Party hereunder.
1.100 SYNDICATION PARTY ADVANCE DATE: shall have the meaning set forth
in Section 13.2.
1.101 TRANSFER: shall have the meaning set forth in Section 13.26.
1.102 TREASURY RATE: shall mean (a) the yield to maturity on U.S.
Treasury instruments having the same maturity date as the last day of the
Treasury Rate Period selected by the Borrower pursuant to Subsection 3.1.2, as
indicated by Bloomberg (page GGR 30) at approximately 9:30 A.M. (Central time)
on the date the rate is fixed under the Treasury Rate Loan, plus (b) 110 basis
points. If no yield is available for the period selected as provided in clause
(a) above, then the rate shall be interpolated based on the rates quoted for the
next longest and shortest periods of time. In the event Bloomberg ceases to
provide such quotations or materially changes the form or substance of page GGR
30 (as determined by the Administrative Agent), the Administrative Agent will
notify the Borrower and the Syndication Parties, and then the Borrower and the
Syndication Parties will agree upon a substitute basis for obtaining such
quotations. If no mutual agreement can be reached, the Treasury Rate option will
not be available until agreement is reached. If the spread between the
Syndication Parties' cost of funds (as reasonably determined by the
Administrative Agent solely on the basis of calculations provided to it by the
Syndication Parties) and the Treasury Rate should widen (or lessen) from the
spread in effect for the same period of time on the date hereof, then the
Administrative Agent shall adjust the Treasury Rate upward (or downward) in an
amount determined by the Administrative Agent in its sole discretion, to reflect
any such change. The first such adjustment may not be made until ninety (90)
days after the Closing Date, and no adjustment shall be applied retroactively to
any existing Treasury Rate Loan.
1.103 TREASURY RATE LOAN: shall have the meaning set forth in
Subsection 3.1.2.
11
1.104 TREASURY RATE PERIOD: shall have the meaning set forth in
Subsection 3.1.2.
1.105 TREASURY RATE REQUEST: shall have the meaning set forth in
Subsection 3.1.2.
1.106 WIRE INSTRUCTIONS: shall have the meaning set forth in Section
13.28.
ARTICLE 2. TERM LOAN
2.1 TERM LOAN. On the terms and conditions set forth in this Credit
Agreement, and so long as no Event of Default or Potential Default has occurred
(or if an Event of Default has occurred, it has been waived in writing by the
Administrative Agent), each of the Syndication Parties severally agrees, to make
Advances to Borrower during the Availability Period in an aggregate principal
amount up to the Aggregate Commitment ("TERM LOAN"), subject to the following:
2.1.1 INDIVIDUAL COMMITMENT. No Syndication Party shall be
required or permitted to make Advances under the Term Loan which would exceed
its Individual Lending Capacity as in effect at the time of the Administrative
Agent's receipt of the Borrowing Notice requesting such Advance.
2.1.2 INDIVIDUAL PRO RATA SHARE. No Syndication Party shall be
required or permitted to make Advances under the Term Loan in excess of an
amount equal to its Individual Pro Rata Share multiplied by the amount of the
requested Advance. Each Syndication Party severally agrees to fund its
Individual Pro Rata Share of each Advance.
2.2 AGGREGATE COMMITMENT. Borrower shall not be entitled to request an
Advance in an amount which, when added to all previous Advances would exceed the
Aggregate Commitment.
2.3 BORROWING NOTICE. Borrower shall give the Administrative Agent
prior written notice by facsimile (effective upon receipt) of each request for
an Advance on or before 11:00 A.M. (Central time) at least one (1) Banking Day
prior to the date of making such Advance. Each notice must be in substantially
the form of Exhibit 2.3 hereto ("BORROWING NOTICE") and must specify (w) the
amount of such Advance, (x) the proposed date of making such Advance, (y)
whether Borrower requests that the Advance will bear interest at (i) the Base
Rate, (ii) the Treasury Rate, or (iii) the Quoted Rate, and (z) in the case of
either a Treasury Rate Loan or a Quoted Rate Loan, the initial Treasury Rate
Period or Quoted Rate Period applicable thereto. The Administrative Agent shall,
on or before 12:00 noon (Central time) of the same Banking Day, notify each
Syndication Party ("FUNDING NOTICE") of its receipt of each such Borrowing
Notice and the amount of such Syndication Party's Funding Share thereunder. Not
later than 2:00 P.M. (Central time) on the date of an Advance, each Syndication
Party will make
12
available to the Administrative Agent at the Administrative Agent's Office, in
immediately available funds, such Syndication Party's Funding Share of such
Advance. After the Administrative Agent's receipt of such funds, but not later
than 3:00 P.M. (Central time), and upon fulfillment of the applicable conditions
set forth in Article 8, the Administrative Agent will make such Advance
available to Borrower, in immediately available funds, and will transmit such
funds by wire transfer to Borrower's Account.
2.4 PROMISSORY NOTES. Borrower's obligations to each Syndication Party
under the Term Loan, including Borrower's payment obligations with respect to
all Advances made by each Syndication Party shall be evidenced by, and repaid
with interest in accordance with, a single promissory note of Borrower, in
substantially the form of Exhibit 2.4 hereto, duly completed, in the stated
maximum principal amount equal to such Syndication Party's Individual
Commitment, dated the date such Syndication Party becomes a Syndication Party,
payable to such Syndication Party for the account of its Applicable Lending
Office, and maturing as to principal on the Maturity Date (each a "NOTE" and
collectively, the "NOTES").
2.5 SYNDICATION PARTY RECORDS. Each Syndication Party shall record on
its books and records the amount of each Advance, the rate and interest period
applicable thereto, all payments of principal and interest, and the principal
balance from time to time outstanding. The Syndication Party's record thereof
shall be prima facie evidence as to all such amounts and shall be binding on
Borrower absent manifest error. Notwithstanding the foregoing, Borrower will
never be required to pay as principal more than the principal amount of the
Advances made by the Syndication Parties.
2.6 USE OF PROCEEDS. The proceeds of the Term Loan will be used by
Borrower for refinancing the term loan indebtedness owed by the Predecessor
Companies under the Existing Credit Agreements and existing on the Closing Date,
to fund the payment of all or a portion of the principal and interest owing on
Borrower's promissory note in the principal amount of $35,000,000.00 payable to
CoBank and dated as of June 1, 1998, and to fund Borrower's capital
expenditures. Borrower agrees not to request or use such proceeds for any other
purpose. Borrower will not, directly or indirectly, use any part of such
proceeds for the purpose of purchasing or carrying any margin stock within the
meaning of Regulation U of the Board of Governors or to extend credit to any
Person for the purpose of purchasing or carrying any such margin stock.
2.7 SYNDICATION PARTY FUNDING FAILURE. The failure of any Syndication
Party to make its Funding Share of any requested Advance on the date specified
for such Advance shall not relieve any other Syndication Party of its obligation
to make its Funding Share of any Advance on such date. No Syndication Party
shall be responsible for the failure of any other Syndication Party to make any
Advance to be made by such other Syndication Party.
13
2.8 REDUCTION OF AGGREGATE COMMITMENT. During the Availability Period,
Borrower may, by written facsimile notice to the Administrative Agent on or
before 10:00 A.M. (Central time) on any Banking Day, irrevocably reduce the
Aggregate Commitment; provided that (a) such reduction must be in multiples of
$1,000,000.00, and (b) Borrower must simultaneously make any principal payment
necessary (along with any applicable Funding Losses on account of such principal
payment) so that the principal amount outstanding under the Term Loan does not
exceed the reduced Aggregate Commitment on the date of such reduction. In the
event the Aggregate Commitment is reduced as provided in the preceding sentence,
then the Individual Commitment of each Syndication Party shall be reduced in the
same proportion as the Individual Commitment of such Syndication Party bears to
the Aggregate Commitment before such reduction.
ARTICLE 3. INTEREST AND FEES
3.1 INTEREST. Interest on Advances under the Term Loan shall be
calculated as follows:
3.1.1 BASE RATE OPTION. Unless Borrower requests and receives a
Treasury Rate Loan pursuant to Subsection 3.1.2 hereof or a Quoted Rate Loan
pursuant to Subsection 3.1.3 hereof, the outstanding principal balance under the
Notes shall bear interest at the Base Rate (each a "BASE RATE LOAN").
3.1.2 TREASURY RATE OPTION. During the Availability Period and so
long as no Event of Default has occurred and is continuing, Borrower may request
in a Borrowing Notice that all or any part of the outstanding principal balance
under the Notes bear interest at the Treasury Rate (each, a "TREASURY RATE
LOAN"). To effect this option, the Borrowing Notice containing such request must
specify (a) the principal amount that is to bear interest at the Treasury Rate,
which must be a minimum of $10,000,000.00 and in incremental multiples of
$5,000,000.00 and (b) the period selected by Borrower during which the Treasury
Rate is to be applied which may be any period equal to or longer than 1 year but
must expire no later than the Maturity Date ("TREASURY RATE PERIOD"). In
addition, during the Availability Period, Borrower may convert any Base Rate
Loan to a Treasury Rate Loan by making a written request therefor ("TREASURY
RATE REQUEST") to the Administrative Agent by facsimile, specifying (y) the
principal amount that is to bear interest at the Treasury Rate, which must be a
minimum of $10,000,000.00 and in incremental multiples of $5,000,000.00 and (z)
the Treasury Rate Period selected by Borrower during which the Treasury Rate is
to be applied. Borrower may not have more than 10 Treasury Rate Loans
outstanding at any time. Each Borrower Notice or Treasury Rate Request which
requests a Treasury Rate Loan shall be effective as of the Banking Day after it
is received if received by the Administrative Agent no later than 11:30 A.M.
(Central time) or as of the second Banking Day if received later than 11:30 A.M.
(Central time). The Administrative Agent shall incur no liability in acting upon
a request which it believed in good faith had been made by a properly authorized
employee of Borrower. Following the
14
expiration of the Treasury Rate Period for any Treasury Rate Loan, interest
shall automatically accrue at the Base Rate unless Borrower requests and
receives a Quoted Rate Loan pursuant to Subsection 3.1.3.
3.1.3 QUOTED RATE OPTION. Commencing on the Closing Date and
until the Maturity Date, and so long as no Event of Default has occurred and is
continuing, Borrower may request in a Borrowing Notice that all or any part of
the outstanding principal balance under the Notes bear interest at the Quoted
Rate (each, a "QUOTED RATE LOAN"). To effect this option, the Borrowing Notice
containing such request must specify (a) the principal amount that is to bear
interest at the Quoted Rate, which must be a minimum of $1,000,000.00 and in
incremental multiples of $1,000,000.00 and (b) the period selected by Borrower
during which the Quoted Rate is to be applied, which may be any period equal to
or longer than 30-days but must expire no later than the Maturity Date ("QUOTED
RATE Period"). In addition, Borrower may convert any Base Rate Loan to a Quoted
Rate Loan, may convert any Treasury Rate Loan to a Quoted Rate Loan upon
expiration of the Treasury Rate Period for such Treasury Rate Loan, or may
continue a Quoted Rate Loan, by making a written request therefore ("QUOTED RATE
REQUEST") to the Administrative Agent by facsimile, specifying (y) the principal
amount that is to bear interest at the Quoted Rate, which must be a minimum of
$1,000,000.00 and in incremental multiples of $1,000,000.00 and (z) the Quoted
Rate Period selected by Borrower during which the Quoted Rate is to be applied.
Each Borrower Notice or Quoted Rate Request which requests a Quoted Rate Loan
shall be effective as of the Banking Day after the Banking Day on which it is
received if received by the Administrative Agent no later than 11:30 A.M.
(Central time) or as of the second Banking Day if received later than 11:30 A.M.
(Central time). The Administrative Agent shall incur no liability in acting upon
a request which it believed in good faith had been made by a properly authorized
employee of Borrower. Following the expiration of the Quoted Rate Period for any
Quoted Rate Loan, interest shall automatically accrue at the Base Rate unless
Borrower requests and receives another Quoted Rate Loan pursuant to this
Subsection.
3.2 DEFAULT INTEREST RATE. All past due payments on the Notes or of any
other Bank Debt (whether as a result of nonpayment by Borrower when due, at
maturity, or upon acceleration) shall bear interest at the Default Interest Rate
from and after the due date for the payment, or on the date of maturity or
acceleration, as the case may be.
3.3 INTEREST CALCULATION. Interest on Treasury Rate Loans and Quoted
Rate Loans shall be calculated on the actual number of days that the principal
owing thereunder is outstanding with the daily rate calculated on the basis of a
year consisting of 360 days. Interest on Base Rate Loans shall be calculated on
the actual number of days that the principal owing thereunder is outstanding on
the basis of a year consisting of 365 days. In calculating interest, the Advance
Date shall be included and the date each payment is received shall be excluded.
3.4 FEES. Borrower shall pay or cause to be paid the following fees:
15
3.4.1 UNUSED COMMITMENT FEE. A non-refundable fee equal to 0.20%
per annum multiplied by the average daily undrawn amount of the Aggregate
Commitment in each Quarter ending during the Availability Period, payable to the
Administrative Agent, for distribution to each Syndication Party based on its
respective Individual Pro Rata Share, in arrears on the Banking Day coinciding
with, or immediately preceding the three (3) month anniversary of the Closing
Date and every third month thereafter during the Availability Period.
ARTICLE 4. PAYMENTS; FUNDING LOSSES
4.1 PRINCIPAL PAYMENTS. Principal shall be payable (a) on such dates
set forth on Exhibit 4.1 hereto and (b) in the amount shown in the "Principal
Repayment" column on Exhibit 4.1 with respect to each such date, multiplied by a
fraction the numerator of which is the principal owing on the Notes as of May
31, 1999 and the denominator of which is $200,000,000.00.
4.2 INTEREST PAYMENTS. Interest on Base Rate Loans, Treasury Rate Loans
and Quoted Rate Loans shall be payable monthly in arrears on the fifth Banking
Day of the next month.
4.3 APPLICATION OF PRINCIPAL PAYMENTS. Provided no Event of Default or
Potential Default has occurred, scheduled principal payments shall be applied
first to outstanding Base Rate Loans and then to outstanding amounts owing under
Treasury Rate Loans or Quoted Rate Loans as Borrower directs in writing, but if
Borrower provides no specific direction, then to principal amounts owing under
Treasury Rate Loans and to Quoted Rate Loans in the ratio of the amount of the
outstanding principal balance owed under all Treasury Rate Loans or Quoted Rate
Loans, as applicable, to the principal balance owed under the aggregate of all
Treasury Rate Loans and all Quoted Rate Loans. However, upon the occurrence and
during the continuance of an Event of Default or Potential Default, all
principal payments shall be applied, as the Administrative Agent in its sole
discretion shall determine, to fees, interest or principal indebtedness under
the Notes, or to any other Bank Debt.
4.4 MANNER OF PAYMENT. All payments, including prepayments, that
Borrower is required or permitted to make under the terms of this Credit
Agreement shall be made to the Administrative Agent (a) in immediately available
federal funds, to be received no later than 2:00 P.M. (Central time) of the
Banking Day on which such payment is due by wire transfer through Federal
Reserve Bank, # ▇▇▇▇▇▇▇▇▇, Routing Number: ST ▇▇▇▇ ▇▇ COOPS, Account Number
271998 (or to such other account as the Administrative Agent may designate by
notice); and (b) without setoff or counterclaim and free and clear of and
without deduction for any taxes, levies, impost, duties, charges, fees,
deductions, withholding, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein unless Borrower is
required by law to make such deduction or withholding.
16
4.5 VOLUNTARY PREPAYMENTS. Borrower shall have the right to prepay all
or any part of the outstanding principal balance under the Term Loan at any time
provided that any such prepayment must be in a minimum amount of $5,000,000 and
in integral multiples of $1,000,000 (or the entire outstanding balance, if
less), on any Banking Day; provided that (a) in the event of prepayment of any
Treasury Rate Loan or any Quoted Rate Loan, whether voluntary or on account of
acceleration (i) Borrower must provide three (3) Banking Days notice to the
Administrative Agent prior to making such prepayment and (ii) Borrower must, at
the time of making such prepayment, pay all Funding Losses applicable to such
prepayment. "FUNDING LOSSES" shall be determined on an individual Syndication
Party basis as the amount which would result in such Syndication Party being
made whole (on a present value basis) for the actual or imputed funding losses
(including, without limitation, any loss, cost or expense incurred by reason of
obtaining, liquidating or employing deposits or other funds acquired by such
Syndication Party to fund or maintain such Treasury Rate Loan or Quoted Rate
Loan) incurred by such Syndication Party as a result of such prepayment. In the
event of any such prepayment, each Syndication Party shall, promptly after being
notified of such prepayment, send written notice ("FUNDING LOSS NOTICE") to the
Administrative Agent by facsimile setting forth the amount of attributable
Funding Losses and the method of calculating the same. The Administrative Agent
shall notify Borrower orally or in writing of the amount of such Funding Losses.
A determination by a Syndication Party as to the amounts payable pursuant to
this Section shall be conclusive absent manifest error.
ARTICLE 5. BANK EQUITY INTERESTS
Borrower agrees to purchase such equity interests in CoBank and St.
▇▇▇▇ Bank ("BANK EQUITY INTERESTS") as CoBank and St. ▇▇▇▇ Bank may from time to
time require in accordance with their bylaws and capital plans as applicable to
cooperative borrowers generally. In connection with the foregoing, Borrower
hereby acknowledges receipt, prior to the execution of this Credit Agreement, of
the following with respect to CoBank and St. ▇▇▇▇ Bank (a) the bylaws, (b) a
written description of the terms and conditions under which the Bank Equity
Interests are issued, (c) the most recent annual report, and (d) if more recent
than the latest annual report, the latest quarterly report. CoBank and St. ▇▇▇▇
Bank reserve the right to sell participations under the provisions of Section
13.26 on a non-patronage basis.
ARTICLE 6. SECURITY
The obligations of Borrower under this Credit Agreement shall be
unsecured.
ARTICLE 7. REPRESENTATIONS AND WARRANTIES
To induce the Syndication Parties to make the Term Loan, and
recognizing that the Syndication Parties and the Administrative Agent are
relying thereon, Borrower represents and warrants as follows:
17
7.1 ORGANIZATION, GOOD STANDING, ETC. Borrower: (a) is duly organized,
validly existing, and in good standing under the laws of its state of
incorporation; (b) qualifies as a cooperative association under the laws of its
state of incorporation; (c) is duly qualified to do business and is in good
standing in each jurisdiction in which the transaction of its business makes
such qualification necessary, except to the extent that the failure to so
qualify has not resulted in, and could not reasonably be expected to cause, a
Material Adverse Effect; and (d) has all requisite corporate and legal power to
own and operate its assets and to carry on its business, and to enter into and
perform the Loan Documents to which it is a party. Each Subsidiary: (a) is duly
organized, validly existing, and in good standing under the laws of its state of
incorporation; (b) is duly qualified to do business and is in good standing in
each jurisdiction in which the transaction of its business makes such
qualification necessary, except to the extent that the failure to so qualify has
not resulted in, and could not reasonably be expected to cause, a Material
Adverse Effect; and (c) has all requisite corporate and legal power to own and
operate its assets and to carry on its business.
7.2 CORPORATE AUTHORITY, DUE AUTHORIZATION; CONSENTS. Borrower has full
power and authority to conduct its business, and has taken, or on or before June
4, 1998 will take, all corporate action necessary to execute, deliver and
perform its obligations under the Loan Documents to which it is a party. All
consents or approvals of any Person which are necessary for, or are required as
a condition of Borrower's execution, delivery and performance of and under the
Loan Documents, have been obtained or will be obtained on or before June 4,
1998.
7.3 LITIGATION. Except as described on Exhibit 7.3 hereto, there are no
pending legal or governmental actions, proceedings or investigations to which
Borrower or any Subsidiary is a party or to which any property of Borrower or
any Subsidiary is subject which might reasonably be expected to result in any
Material Adverse Effect and, to Borrower's knowledge, no such actions or
proceedings are threatened or contemplated by any federal, state, county, or
city (or similar unit) governmental agency or any other Person.
7.4 NO VIOLATIONS. The execution, delivery and performance of the Loan
Documents will not: (a) violate any provision of Borrower's articles of
incorporation or bylaws, or any law, rule, regulation (including, without
limitation, Regulations T, U, and X of the Board of Governors of the Federal
Reserve System), or any judgment, order or ruling of any court or governmental
agency; (b) violate, require consent under (except such consent as has been
obtained), conflict with, result in a breach of, constitute a default under, or
with the giving of notice or the expiration of time or both, constitute a
default under, any existing real estate mortgage, indenture, lease, security
agreement, contract, note, instrument or any other agreements or documents
binding on Borrower or affecting its property; or (c) violate, conflict with,
result in a breach of, constitute a default under, or result in the loss of, or
restriction of rights under, any Required License or any order, law, rule, or
regulation under or pursuant to which any Required License was issued or is
maintained ("LICENSING LAWS").
18
7.5 BINDING AGREEMENT. Each of the Loan Documents to which Borrower is
a party is, or when executed and delivered, will be, the legal, valid and
binding obligation of Borrower, enforceable in accordance with its terms,
subject only to limitations on enforceability imposed by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting creditors'
rights generally and by general principles of equity.
7.6 COMPLIANCE WITH LAWS. Borrower and each Subsidiary are in
compliance with all federal, state, and local laws, rules, regulations,
ordinances, codes and orders, including without limitation all Environmental
Laws and all Licensing Laws, with respect to which noncompliance would result in
a Material Adverse Effect.
7.7 PRINCIPAL PLACE OF BUSINESS. Borrower's place of business, or chief
executive office if it has more than one place of business, and the place where
the records required by Section 9.1 hereof are kept, are located at ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
7.8 PAYMENT OF TAXES. Except as shown on Exhibit 7.8 hereto, Borrower
and each Subsidiary have filed all required federal, state and local tax returns
and have paid all taxes as shown on such returns as they have become due, and
have paid when due all other taxes, assessments or impositions levied or
assessed against Borrower, any Subsidiary, or their business or properties,
except where the failure to make such filing or payment could not reasonably be
expected to result in a Material Adverse Effect. Exhibit 7.8 specifically
indicates all such taxes which are subject to a Good Faith Contest.
7.9 LICENSES AND APPROVALS. Borrower and each Subsidiary have ownership
of, or license to use, or have been issued, all trademarks, patents, copyrights,
franchises, certificates, approvals, permits, authorities, agreements, and
licenses which are used or necessary to permit it to own its properties and to
conduct the business as presently being conducted as to which the termination or
revocation thereof could reasonably be expected to have a Material Adverse
Effect ("REQUIRED LICENSES"). Each Required License is in full force and effect,
and there is no outstanding notice of cancellation or termination or, to
Borrower's knowledge, any threatened cancellation or termination in connection
therewith, nor has an event occurred with respect to any Required License which,
with the giving of notice or passage of time or both, could result in the
revocation or termination thereof or otherwise in any impairment of Borrower's
rights with respect thereto, which impairment could reasonably be expected to
have a Material Adverse Effect. No consent, permission, authorization, order, or
license of any governmental authority, is necessary in connection with the
execution, delivery, performance, or enforcement of and under the Loan Documents
to which Borrower is a party except such as have been obtained and are in full
force and effect.
7.10 EMPLOYEE BENEFIT PLANS. Borrower and its Subsidiaries are in
compliance in all material respects with the Employee Retirement Income Security
Act
19
of 1974, as amended, and the regulations thereunder ("ERISA"), to the extent
applicable to them, and have not received any notice to the contrary from the
Pension Benefit Guaranty Corporation ("PBGC").
7.11 EQUITY INVESTMENTS. Borrower does not now own any stock or other
voting or equity interest, directly or indirectly, in any Person valued at the
greater of book value or market value at $5,000,000 or more, other than: (a) the
Bank Equity Interests, and (b) as set forth on Exhibit 7.11.
7.12 TITLE TO REAL AND PERSONAL PROPERTY. Borrower and each Subsidiary
have good and marketable title to, or valid leasehold interests in, all of their
material properties and assets, real and personal, including the properties and
assets and leasehold interests reflected in the financial statements of the
Borrower and its Subsidiaries referred to in Section 7.13 hereof, except (a) any
properties or assets disposed of in the ordinary course of business, and (b) for
defects in title and encumbrances which could not reasonably be expected to
result in a Material Adverse Effect; and none of the properties of Borrower or
any Restricted Subsidiary are subject to any Lien, except as permitted by
Section 10.3 hereof ("PERMITTED ENCUMBRANCES"). All such property is in good
operating condition and repair, reasonable wear and tear excepted, and suitable
in all material respects for the purposes for which it is being utilized except
where their failure to be in good operating condition could not reasonably be
expected to result in a Material Adverse Effect. All of the leases of Borrower
and each Subsidiary which constitute Material Agreements are in full force and
effect and afford Borrower or such Subsidiary peaceful and undisturbed
possession of the subject matter thereof.
7.13 FINANCIAL STATEMENTS. The consolidated balance sheet of the
Predecessor Companies and their Subsidiaries as of May 31, 1997 and September
30, 1997 (respectively for Harvest States Cooperatives and Cenex, Inc.), and the
related consolidated statements of operations, cash flows and consolidated
statements of capital shares and equities for the Fiscal Year then ended, and
the accompanying footnotes, together with the unqualified opinion thereon, dated
August 15, 1997 and October 27, 1997 (respectively for Harvest States
Cooperatives and Cenex, Inc.) of Deloitte & Touche LLP, independent certified
public accountants, copies of which have been furnished to the Syndication
Parties, fairly present in all material respects the consolidated financial
condition of Borrower and its Subsidiaries as at such dates and the results of
the consolidated operations of Borrower and its Subsidiaries for the periods
covered by such statements, all in accordance with GAAP consistently applied.
Since May 31, 1997 and September 30, 1997 (respectively for Harvest States
Cooperatives and Cenex, Inc.), there has been no material adverse change in the
financial condition, results of operations, business or prospects of the
Predecessor Companies or any of their Subsidiaries. As of the Closing Date,
there are no liabilities of the Predecessor Companies or any of their
Subsidiaries, fixed or contingent, which are material but are not reflected in
the financial statements of the Predecessor Companies and their Subsidiaries
referred to above or referred to in the notes thereto,
20
other than liabilities arising in the ordinary course of business since May 31,
1997 and September 30, 1997 (respectively for Harvest States Cooperatives and
Cenex, Inc.). No information, exhibit, or report furnished by Borrower or any of
its Subsidiaries to the Syndication Parties in connection with the negotiation
of this Credit Agreement contained any material misstatement of fact or omitted
to state a material fact or any fact necessary to make the statements contained
therein not materially misleading in light of the circumstances in which they
were made and taken together with the other information, exhibits and reports
furnished to the Syndication Parties.
7.14 ENVIRONMENTAL COMPLIANCE. Except as set forth on Exhibit 7.14
hereto, Borrower and each Subsidiary have obtained all permits, licenses and
other authorizations which are required under all applicable Environmental Laws,
except to the extent failure to have any such permit, license or authorization
could not reasonably be expected to result in a Material Adverse Effect. Except
as set forth on Exhibit 7.14 hereto, Borrower and each Subsidiary are in
compliance with all Environmental Laws and the terms and conditions of the
required permits, licenses and authorizations, and are also in compliance with
all other limitations, restrictions, obligations, schedules and timetables
contained in those Laws or contained in any plan, order, decree, judgment,
injunction, notice or demand letter issued, entered, promulgated or approved
thereunder, except to the extent, in each case, failure to comply has not
resulted in, and could not reasonably be expected to result in, a Material
Adverse Effect.
7.15 FISCAL YEAR. Each fiscal year of Borrower begins on September 1 of
each calendar year and ends on August 31 of each calendar year.
7.16 MATERIAL AGREEMENTS. Neither Borrower nor, to Borrower's
knowledge, any other party to any Material Agreement, is in default thereunder,
and no facts exist which with the giving of notice or the passage of time, or
both, would constitute such a default.
7.17 REGULATIONS U AND X. No portion of any Advance will be used for
the purpose of purchasing, carrying, or making loans to finance the purchase of,
any "margin security" or "margin stock" as such terms are used in Regulations U
or X of the Board of Governors of the Federal Reserve System, 12 C.F.R. Parts
221 and 224.
7.18 TRADEMARKS, TRADENAMES, ETC. Borrower has ownership or the lawful
right to use all tradenames, trademarks, and other intellectual property which
it utilizes in its business as presently being conducted and as anticipated to
be conducted, except where the failure to do so could not reasonably be expected
to result in a Material Adverse Effect.
7.19 NO DEFAULT ON OUTSTANDING JUDGMENTS OR ORDERS. Borrower and each
Subsidiary have satisfied all judgments and Borrower and each Subsidiary are not
in default with respect to any judgment, writ, injunction, decree, rule or
regulation of any court, arbitrator or federal, state, municipal or other
Governmental Authority,
21
commission, board, bureau, agency or instrumentality, domestic or foreign,
except to the extent such failure to satisfy any or all such judgments or to be
in such a default has not resulted in, and could not reasonably be expected to
result in, a Material Adverse Effect.
7.20 NO DEFAULT IN OTHER AGREEMENTS. Neither Borrower nor any
Subsidiary is a party to any indenture, loan or credit agreement or any lease or
other agreement or instrument or subject to any certificate of incorporation or
corporate restriction which has resulted in, or could reasonably be expected to
result in, a Material Adverse Effect. Neither Borrower nor any Subsidiary is in
default in any respect in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in any agreement or
instrument where such failure to perform, observe or fulfill has resulted in, or
could reasonably be expected to result in, a Material Adverse Effect.
7.21 LABOR DISPUTES AND ACTS OF GOD. Neither the business nor the
properties of Borrower or any Subsidiary are currently affected by any fire,
explosion, accident, strike, lockout or other labor dispute, drought, storm,
hail, earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance) which has resulted in, or could reasonably
be expected to result in, a Material Adverse Effect.
7.22 GOVERNMENTAL REGULATION. Neither Borrower nor any Subsidiary is
subject to regulation under the Public Utility Holding Company Act of 1935, the
Investment Company Act of 1940, the Interstate Commerce Act, the Federal Power
Act or any statute or regulation, in each case, limiting its ability to incur
indebtedness for money borrowed as contemplated hereby.
7.23 DISCLOSURE. The representations and warranties contained in this
Article 7 and in the other Loan Documents or in any financial statements
provided to the Administrative Agent do not contain any untrue statement of a
material fact or omit to state a material fact necessary to make such
representations or warranties not misleading; and all projections provided to
the Administrative Agent were prepared in good faith based on reasonable
assumptions.
ARTICLE 8. CONDITIONS TO ADVANCES
8.1 CONDITIONS TO CLOSING. The obligation of the Syndication Parties to
make any Advances hereunder is subject to satisfaction, in the sole discretion
of the Administrative Agent and the Syndication Parties (except that
satisfaction of Subsection 8.1.6 shall be determined in the reasonable
discretion of the Administrative Agent and the Syndication Parties), of each of
the following conditions precedent:
8.1.1 LOAN DOCUMENTS. The Administrative Agent shall have
received duly executed originals of the Loan Documents.
22
8.1.2 APPROVALS. The Administrative Agent shall have received
evidence satisfactory to it that all consents and approvals of governmental
authorities and third parties which are with respect to Borrower, necessary for,
or required as a condition of: (a) the validity and enforceability of the Loan
Documents to which it is a party; and (b) the Merger.
8.1.3 ORGANIZATIONAL DOCUMENTS. The Administrative Agent shall
have received: (a) good standing certificate, dated no more than thirty (30)
days prior to the Closing Date, for Borrower for its state of incorporation; (b)
a copy of the articles of incorporation of Borrower certified by the Secretary
of State of its state of organization; and (c) a copy of the bylaws of Borrower,
certified as true and complete by the Secretary or Assistant Secretary of
Borrower.
8.1.4 EVIDENCE OF INSURANCE. Borrower shall have provided the
Administrative Agent with insurance certificates and such other evidence, in
form and substance satisfactory to the Administrative Agent, of all insurance
required to be maintained by it under the Loan Documents.
8.1.5 APPOINTMENT OF AGENT FOR SERVICE. The Administrative Agent
shall have received evidence satisfactory to the Administrative Agent that
Borrower has appointed The Corporation Company to serve as its agent for service
of process at their Denver, Colorado office (presently at ▇▇▇▇ ▇▇▇▇▇▇▇▇), and
that The Corporation Company has accepted such appointment by Borrower.
8.1.6 NO MATERIAL CHANGE. No change shall have occurred in the
condition or operations of the Predecessor Companies since May 31, 1997 and
September 30, 1997 (respectively for Harvest States Cooperatives and Cenex,
Inc.) which could reasonably be expected to result in a Material Adverse Effect.
8.1.7 FEES AND EXPENSES. Borrower shall have paid the
Administrative Agent, by wire transfer of immediately available federal funds
all fees set forth in Section 3.4 hereof and any other fees owing to the
Administrative Agent which are due on the Closing Date, and all expenses owing
pursuant to Section 14.1 hereof.
8.1.8 BANK EQUITY INTEREST PURCHASE OBLIGATION. Borrower shall
have purchased such Bank Equity Interests as CoBank and/or St. ▇▇▇▇ Bank may
require pursuant to Article 5 hereof.
8.1.9 OPINION OF COUNSEL. Borrower shall have provided a
favorable opinion of its counsel addressed to the Administrative Agent and each
of the present and future Syndication Parties, covering such matters as the
Administrative Agent may reasonably require.
23
8.1.10 FURTHER ASSURANCES. Borrower shall have provided and/or
executed and delivered to the Administrative Agent such further assignments,
documents or financing statements, in form and substance satisfactory to the
Administrative Agent, that Borrower is to execute and/or deliver pursuant to the
terms of the Loan Documents or as the Administrative Agent may reasonably
request.
8.2 CONDITIONS TO ADVANCE. The Syndication Parties' obligation to fund
each Advance is subject to the satisfaction, in the sole discretion of the
Administrative Agent, of each of the following conditions precedent, as well as
those set forth in Section 8.1 hereof:
8.2.1 EVIDENCE OF CORPORATE ACTION. The Administrative Agent
shall have received in form and substance satisfactory to the Administrative
Agent: (a) documents evidencing all corporate action taken by Borrower to
authorize (including the specific names and titles of the persons authorized to
so act (each an "AUTHORIZED OFFICER")) the execution, delivery and performance
of the Loan Documents to which it is a party, certified to be true and correct
by the Secretary or Assistant Secretary of Borrower; (b) a certificate of the
Secretary or Assistant Secretary of Borrower, dated the Closing Date, certifying
the names and true signatures of the Authorized Officers; and (c) documents
evidencing all corporate action taken by the Predecessor Companies to effect the
Merger.
8.2.2 CONSUMMATION OF MERGER; AMENDMENT OF ARTICLES OF
INCORPORATION. Borrower shall have provided proof satisfactory to the
Administrative Agent that (a) the Plan of Combination has been executed by the
Predecessor Companies and filed with the Minnesota Secretary of State, (b) the
Merger has been consummated in accordance with the Plan of Combination effective
as of 11:59 P.M. May 31, 1998, and (c) Borrower has properly amended its
Articles of Incorporation (as in effect for Harvest States Cooperatives) and
changed its name to be "Cenex Harvest States Cooperatives" and filed such
amendment with the Minnesota Secretary of State.
8.2.3 CANCELLATION OF EXISTING CREDIT AGREEMENTS. All amounts
owing under the Existing Credit Agreements shall be paid in full and the
Existing Credit Agreements canceled and terminated by all parties thereto and
all liens in connection therewith released or terminated.
8.2.4 DEFAULT. As of the Advance Date no Event of Default or
Potential Default shall have occurred and be continuing, and the disbursing of
the amount of the Advance requested shall not result in an Event of Default or
Potential Default.
8.2.5 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Borrower herein shall be true and correct in all material respects
on and as of the date on which the Advance is to be made as though made on such
date. Borrower shall have paid the Administrative Agent, by wire transfer of
immediately available U.S.
24
funds all fees set forth in Section 3.4 hereof which are then due and payable,
including all expenses owing pursuant to Section 14.1 hereof.
ARTICLE 9. AFFIRMATIVE COVENANTS
From and after the date of this Credit Agreement and until the Bank
Debt is indefeasibly paid in full and the Syndication Parties have no obligation
to make any Advance, Borrower agrees that it will observe and comply with the
following covenants for the benefit of the Administrative Agent and the
Syndication Parties:
9.1 BOOKS AND RECORDS. Borrower shall at all times keep, and cause each
Subsidiary to keep, proper books of record and account, in which correct and
complete entries shall be made of all its dealings, in accordance with GAAP.
9.2 REPORTS AND NOTICES. Borrower shall provide to the Administrative
Agent the following reports, information and notices:
9.2.1 ANNUAL FINANCIAL STATEMENTS. As soon as available, but in
no event later than one hundred and twenty (120) days after the end of any
Fiscal Year of Borrower occurring during the term hereof, one copy of the audit
report for such year and accompanying consolidated financial statements
(including all footnotes thereto), including a consolidated balance sheet, a
consolidated statement of earnings, a consolidated statement of capital, and a
consolidated statement of cash flow for Borrower and its Subsidiaries, showing
in comparative form the figures for the previous Fiscal Year, all in reasonable
detail, prepared in conformance with GAAP consistently applied and certified
without qualification by Deloitte & Touche LLP, or other independent public
accountants of nationally recognized standing selected by the Borrower and
satisfactory to the Administrative Agent, and to be accompanied by a copy of the
management letter of such accountants addressed to the board of directors of
Borrower related to such annual audit. Such annual financial statements required
pursuant to this Subsection shall be accompanied by a Compliance Certificate
signed by Borrower's Vice President-Finance or other officer of Borrower
acceptable to the Administrative Agent.
9.2.2 QUARTERLY FINANCIAL STATEMENTS. As soon as available but in
no event more than forty-five (45) days after the end of each Fiscal Quarter
(except the last Fiscal Quarter of Borrower's Fiscal Year) the following
financial statements or other information concerning the operations of Borrower
and its Subsidiaries for such Fiscal Quarter, the Fiscal Year to date, and for
the corresponding periods of the preceding Fiscal Year, all prepared in
accordance with GAAP consistently applied: (a) a consolidated balance sheet, (b)
a consolidated summary of earnings, (c) a consolidated statement of cash flows,
and (d) such other statements as the Administrative Agent may reasonably
request. Such quarterly financial statements required pursuant to this
Subsection shall be accompanied by a Compliance Certificate signed by Borrower's
25
Vice President-Finance or other officer of Borrower acceptable to the
Administrative Agent (subject to normal year end adjustments).
9.2.3 NOTICE OF DEFAULT. As soon as the existence of any Event of
Default or Potential Default becomes known to any officer of Borrower, prompt
written notice of such Event of Default or Potential Default, the nature and
status thereof, and the action being taken or proposed to be taken with respect
thereto.
9.2.4 ERISA REPORTS. As soon as possible and in any event within
twenty (20) days after Borrower or any Subsidiary knows or has reason to know
that any Reportable Event or Prohibited Transaction has occurred with respect to
any Plan or that the PBGC or Borrower or any Subsidiary has instituted or will
institute proceedings under Title IV of ERISA to terminate any Plan, or that
Borrower, any Subsidiary or any ERISA Affiliate has completely or partially
withdrawn from a Multiemployer Plan, or that a Plan which is a Multiemployer
Plan is in reorganization (within the meaning of Section 4241 of ERISA), is
insolvent (within the meaning of Section 4245 of ERISA) or is terminating, a
certificate of the Group Vice President-Finance of Borrower or such Subsidiary
setting forth details as to such Reportable Event or Prohibited Transaction or
Plan termination or withdrawal or reorganization or insolvency and the action
Borrower or such Subsidiary proposes to take with respect thereto, provided,
however, that notwithstanding the foregoing, no reporting is required under this
subsection unless the matter(s), individually or in the aggregate, result, or
could be reasonably expected to result, in aggregate obligations or liabilities
of Borrower and/or the Subsidiaries in excess of five million dollars
($5,000,000).
9.2.5 NOTICE OF LITIGATION. Promptly after the commencement
thereof, notice of all actions, suits, arbitration and any other proceedings
before any Governmental Authority, affecting Borrower or any Subsidiary which,
if determined adversely to Borrower or any Subsidiary, could reasonably be
expected to require Borrower or any Subsidiary to have to pay or deliver assets
having a value of five million dollars ($5,000,000) or more (whether or not the
claim is covered by insurance) or could reasonably be expected to result in a
Material Adverse Effect.
9.2.6 NOTICE OF MATERIAL ADVERSE EFFECT. Promptly after Borrower
obtains knowledge thereof, notice of any matter which, alone or when considered
together with other matters, has resulted or could reasonably be expected to
result, in a Material Adverse Effect.
9.2.7 NOTICE OF ENVIRONMENTAL PROCEEDINGS. Without limiting the
provisions of Subsection 9.2.5 hereof, promptly after Borrower's receipt
thereof, notice of the receipt of all pleadings, orders, complaints,
indictments, or other communication alleging a condition that may require
Borrower or any Subsidiary to undertake or to contribute to a cleanup or other
response under Environmental Regulations, or which seeks penalties, damages,
injunctive relief, or criminal sanctions related to alleged violations of such
laws, or which claims personal injury or property damage to any
26
person as a result of environmental factors or conditions or which, if adversely
determined, could reasonably be expected to have a Material Adverse Effect.
9.2.8 REGULATORY AND OTHER NOTICES. Promptly after Borrower's
receipt thereof, copies of any notices or other communications received from any
Governmental Authority with respect to any matter or proceeding the effect of
which could reasonably be expected to have a Material Adverse Effect.
9.2.9 ADVERSE ACTION REGARDING REQUIRED LICENSES. As soon as
Borrower learns that any petition, action, investigation, notice of violation or
apparent liability, notice of forfeiture, order to show cause, complaint or
proceeding is pending, or, to the best of Borrower's knowledge, threatened, to
seek to revoke, cancel, suspend, modify, or limit any of the Required Licenses,
prompt written notice thereof. Borrower shall contest any such action in a Good
Faith Contest.
9.2.10 BUDGET. Promptly upon becoming available and in any event
within thirty (30) days after the beginning of each Fiscal Year, a copy of the
Annual Operating Budget for the next succeeding Fiscal Year approved by
Borrower's board of directors, together with the assumptions and projections on
which such budget is based and a copy of forecasts of operations and capital
expenditures (including investments) for each Fiscal Year; provided that the
first such Annual Operating Budget shall not be required until September 30,
1998. In addition, if any material changes are made to such budget or
projections or forecasts during the year, then Borrower will furnish copies to
the Administrative Agent of any such changes promptly after such changes have
been approved.
9.2.11 ADDITIONAL INFORMATION. With reasonable promptness, such
other information respecting the condition or operations, financial or
otherwise, of Borrower or any Subsidiary as any Syndication Party may from time
to time reasonably request.
9.3 ELIGIBILITY. Borrower shall preserve and maintain its status as an
entity eligible to borrow from CoBank and St. ▇▇▇▇ Bank.
9.4 MAINTENANCE OF EXISTENCE AND QUALIFICATION. Borrower shall, and
shall cause each Subsidiary to, maintain its corporate existence in good
standing under the laws of its state of organization. Borrower will, and will
cause each Subsidiary to, qualify and remain qualified as a foreign corporation
in each jurisdiction in which such qualification is necessary in view of its
business, operations and properties except where the failure to so qualify has
not and could not reasonably be expected to result in a Material Adverse Effect.
9.5 COMPLIANCE WITH LEGAL REQUIREMENTS AND AGREEMENTS. Borrower shall,
and shall cause each Subsidiary to: (a) comply with all laws, rules, regulations
and orders applicable to Borrower (or such Subsidiary, as applicable) or its
business unless
27
such failure to comply is the subject of a Good Faith Contest; and (b) comply
with all agreements, indentures, mortgages, and other instruments to which it
(or any Subsidiary, as applicable) is a party or by which it or any of its (or
any Subsidiary, or any of such Subsidiary's, as applicable) property is bound;
provided, however, that the failure of Borrower to comply with this sentence in
any instance not directly involving the Administrative Agent or a Syndication
Party shall not constitute an Event of Default unless such failure would have a
Material Adverse Effect.
9.6 COMPLIANCE WITH ENVIRONMENTAL LAWS. Without limiting the provisions
of Section 9.5 of this Credit Agreement, Borrower shall, and shall cause
Subsidiary to, comply in all material respects with, and take all reasonable
steps necessary to cause all persons occupying or present on any properties
owned or leased by Borrower (or any Subsidiary, as applicable) to comply with,
all Environmental Regulations, the failure to comply with which would have a
Material Adverse Effect or unless such failure to comply is the subject of a
Good Faith Contest.
9.7 TAXES. Borrower shall cause to be paid, and shall cause each
Subsidiary to pay, when due all taxes, assessments, and other governmental
charges upon it, its income, its sales, its properties (or upon Subsidiary and
its income, sales, and properties, as applicable), and federal and state taxes
withheld from its (or Subsidiary's, as applicable) employees' earnings, unless
(a) the failure to pay such taxes, assessments, or other governmental charges
could not reasonably be expected to result in a Material Adverse Effect, or (b)
such taxes, assessments, or other governmental charges are the subject of a Good
Faith Contest and Borrower has established adequate reserves therefor in
accordance with GAAP.
9.8 INSURANCE. Borrower shall maintain, and cause each Subsidiary to
maintain, insurance with one or more financially sound and reputable insurance
carrier or carriers reasonably acceptable to the Administrative Agent, in such
amounts (including deductibles) and covering such risks (including fidelity
coverage) as are usually carried by companies engaged in the same or a similar
business and similarly situated, provided, however, that Borrower may, to the
extent permitted by Law, provide for appropriate self-insurance with respect to
workers' compensation. At the request of Administrative Agent, copies of all
policies (or such other proof of compliance with this Section as may be
reasonably satisfactory) shall be delivered to the Administrative Agent.
Borrower agrees to pay all premiums on such insurance as they become due
(including grace periods).
9.9 MAINTENANCE OF PROPERTIES. Borrower shall maintain, keep and
preserve, and cause each Subsidiary to maintain, keep and preserve, all of its
material properties (tangible and intangible) necessary or used in the proper
conduct of its business in good working order and condition, ordinary wear and
tear excepted, and shall cause to be made all repairs, renewals, replacements,
betterments and improvements thereof, all as in the sole judgment of Borrower
may be reasonably necessary so that the business
28
carried on in connection therewith may be properly and advantageously conducted
at all times.
9.10 PAYMENT OF LIABILITIES. Borrower shall pay all liabilities
(including, without limitation: (a) any indebtedness for borrowed money or for
the deferred purchase price of property or services; (b) any obligations under
leases which have or should have been characterized as Capital Leases; and (c)
any contingent liabilities, such as guaranties, for the obligations of others
relating to indebtedness for borrowed money or for the deferred purchase price
of property or services or relating to obligations under leases which have or
should have been characterized as Capital Leases) as they become due beyond any
period of grace under the instrument creating such liabilities, unless (with the
exception of the Bank Debt) (x) the failure to pay such liabilities within such
time period could not reasonably be expected to result in a Material Adverse
Effect, or (y) they are contested in good faith by appropriate actions or legal
proceedings, Borrower establishes adequate reserves therefor in accordance with
GAAP, and such contesting will not result in a Material Adverse Effect.
9.11 INSPECTION. Borrower shall permit, and cause its Subsidiaries to
permit, the Administrative Agent or any Syndication Party or their agents,
during normal business hours or at such other times as the parties may agree, to
examine, and make copies of or abstracts from, Borrower's properties, books, and
records, and to discuss Borrower's affairs, finances, operations, and accounts
with its respective officers, directors, employees, and independent certified
public accountants; provided, that, in the case of each meeting with the
independent accountants Borrower is given an opportunity to have a
representative present at such meeting.
9.12 REQUIRED LICENSES; PERMITS; ETC. Borrower shall duly and lawfully
obtain and maintain in full force and effect all Required Licenses as
appropriate for the business being conducted and properties owned by Borrower at
any given time.
9.13 ERISA. Borrower shall make or cause to be made, and cause each
Subsidiary to make or cause to be made, all payments or contributions to all
Plans covered by Title IV of ERISA, which are necessary to enable those Plans to
continuously meet all minimum funding standards or requirements.
9.14 MAINTENANCE OF COMMODITY POSITION. Borrower shall protect its
commodity inventory holdings or commitments to buy or sell commodities against
adverse price movements, including the taking of equal and opposite positions in
the cash and futures markets, to minimize losses and protect margins in
commodity production, storage, processing and marketing as is recognized as
financially sound and reputable by prudent business persons in the commodity
business.
9.15 FINANCIAL COVENANTS. Borrower shall maintain the following
financial covenants, measured as an aggregation of the results of the
Predecessor Companies (to the extent Borrower has not been in operation for four
(4) full Fiscal Quarters) and
29
current financial results of Borrower through the first four Fiscal Quarters,
for example measurement at the end of the first Fiscal Quarter ending after the
Closing Date will incorporate the financial results of the Borrower for such
Fiscal Quarter(or portion thereof) and the financial results of the Predecessor
Companies for the three previous Fiscal Quarters (and, if applicable, for a
portion of the Fiscal Quarter during which the Closing Date occurred):
9.15.1 WORKING CAPITAL. Borrower shall have at all times
Consolidated Current Assets minus Consolidated Current Liabilities of not less
than $150,000,000.
9.15.2 CONSOLIDATED FUNDED DEBT TO CONSOLIDATED CASH FLOW.
Borrower shall have at all times and measured as of the end of each Fiscal
Quarter, a ratio of Consolidated Funded Debt divided by Consolidated Cash Flow
of no greater than 3.00 to 1.00 as measured on the previous consecutive four
Fiscal Quarters.
9.15.3 ADJUSTED CONSOLIDATED FUNDED DEBT TO CONSOLIDATED MEMBERS'
AND PATRONS' EQUITY. Borrower shall not permit the ratio of Adjusted
Consolidated Funded Debt to Consolidated Members' and Patrons' Equity to exceed
at any time .80 to 1.00.
ARTICLE 10. NEGATIVE COVENANTS
From and after the date of this Credit Agreement until the Bank Debt is
indefeasibly paid in full and the Syndication Parties have no obligation to make
any Advance, Borrower agrees that it will observe and comply with the following
covenants:
10.1 BORROWING. Borrower shall not (nor shall it permit any of its
Restricted Subsidiaries to) create, incur, assume or permit to exist, directly
or indirectly, any Debt, except for: (a) indebtedness of Borrower arising under
this Credit Agreement and the other Loan Documents; (b) trade payables arising
in the ordinary course of business; (c) Capital Leases in existence from time to
time; (d) current operating liabilities (other than for borrowed money) incurred
in the ordinary course of business; (e) unsecured indebtedness arising under
uncommitted lines of credit; provided that the maximum principal amount that may
be outstanding at any one time shall not exceed $15,000,000; (f) indebtedness on
the date hereof as set forth in Exhibit 10.1 attached hereto; (g) unsecured
long-term indebtedness; (h) Debt of Borrower incurred pursuant to the Revolving
Loan Credit Agreement; (i) documentary and standby letters of credit issued at
the request of Borrower or any Subsidiary; provided, however, that the undrawn
face amount under all such letters of credit shall not exceed $75,000,000; and
(j) such other indebtedness agreed upon in writing between Borrower and the
Syndication Parties.
10.2 NO OTHER BUSINESSES. Borrower shall not engage in any material
respects in any business activity or operations other than operations or
activities (a) in the
30
agriculture industry, (b) in the food industry, or (c) which are not
substantially different from or are related to its present business activities
or operations.
10.3 LIENS. Borrower shall not (nor shall it permit any of its
Restricted Subsidiaries to) create, incur, assume or suffer to exist any
mortgage, pledge, lien, charge or other encumbrance on, or any security interest
in, any of its real or personal properties (including, without limitation,
leasehold interests, leasehold improvements and any other interest in real
property or fixtures), now owned or hereafter acquired, except:
(a) Liens for taxes or assessments or other charges or levies
of any Governmental Authority, that are not delinquent or if delinquent (i) are
the subject of a Good Faith Contest but in no event past the time when a penalty
would be incurred, and (ii) the aggregate amount of liabilities so secured
(including interest and penalties) does not exceed $10,000,000 at any one time
outstanding;
(b) Liens imposed by Law, such as mechanic's, worker's,
repairman's, miner's, agister's, attorney's, materialmen's, landlord's,
warehousemen's and carrier's Liens and other similar Liens which are securing
obligations incurred in the ordinary course of business for sums not yet due and
payable or if due and payable which are the subject of a Good Faith Contest;
(c) Liens under workers' compensation, unemployment
insurance, social security or similar legislation (other than ERISA), or to
secure payments of premiums for insurance purchased in the ordinary course of
business, or to secure the performance of tenders, statutory obligations, surety
and appearance bonds and bids, bonds for release of an attachment, stay of
execution or injunction, leases, government contracts, performance and
return-of-money bonds and other similar obligations, all of which are incurred
in the ordinary course of business and not in connection with the borrowing of
money;
(d) Any attachment or judgment Lien, the time for appeal or
petition for rehearing of which shall not have expired or in respect of which
Borrower or the Subsidiary is protected in all material respects by insurance or
for the payment of which adequate reserves have been provided, provided that the
execution or other enforcement of such Liens is effectively stayed and the
claims secured thereby are the subject of a Good Faith Contest, and provided
further that the aggregate amount of liabilities of Borrower and its
Subsidiaries so secured (including interest and penalties) shall not be in
excess of $5,000,000 at any one time outstanding;
(e) Easements, rights-of-way, restrictions, encroachments,
covenants, servitudes, zoning and other similar encumbrances which, in the
aggregate, do not materially interfere with the occupation, use and enjoyment by
Borrower or any Restricted Subsidiary of the property or assets encumbered
thereby in the normal course of its business or materially impair the value of
the property subject thereto;
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(f) Liens arising in the ordinary course of business and
created in connection with amounts on deposit in charge card and like accounts
(such as Visa or MasterCard);
(g) Liens on land, buildings and equipment existing at the
time of their acquisition or Liens to secure the payment of all or any part of
the purchase price of such land, buildings or equipment or to secure Funded Debt
incurred prior to, at the time of, or within one-hundred eighty (180) days after
the acquisition of such property for the purpose of financing all or any part of
the purchase price thereof, provided that any such Liens shall not encumber any
other property of Borrower or its Restricted Subsidiaries;
(h) Liens assumed in connection with permitted mergers and
acquisitions, but only to the extent that such Liens shall secure only Funded
Debt and shall not encumber any other property of Borrower or any Restricted
Subsidiary;
(i) Liens on financed property created or incurred in
connection with leases, mortgages, conditional sales contracts, security
interests or arrangements for the retention of title entered into by Borrower or
any of its Restricted Subsidiaries to secure "industrial revenue bonds" as
defined in Section 103(b)(2) of the Code and treated as obligations described in
legislation similar to the provisions of said Sections of the Code enacted in
any State of the United States or Puerto Rico, which are issued to finance
property useful and intended to be used in carrying on the business of Borrower
or any of its Restricted Subsidiaries, provided that upon creation of any such
Lien Borrower or such Restricted Subsidiary shall incur Funded Debt secured
thereby in conformity with the provisions of Section 10.1 hereof;
(j) Liens on property or assets of a Restricted Subsidiary to
secure Debt of such Restricted Subsidiary to Borrower;
(k) Liens of CoBank, St. ▇▇▇▇ Bank and other cooperatives,
respectively, on Investments by Borrower in the stock, participation
certificates, or allocated reserves of CoBank, St. ▇▇▇▇ Bank or other
cooperatives, respectively, owned by Borrower;
(l) All precautionary filings of financing statements under
the Uniform Commercial Code which cover property that is made available to or
used by Borrower or any Restricted Subsidiary pursuant to the terms of an
Operating Lease or Capital Lease; and
(m) Liens securing its reimbursement obligations under any
letter of credit issued in connection with the acquisition of an asset; provided
that (i) the lien attaches only to such asset, and (ii) the lien is released
upon satisfaction of such reimbursement obligation.
10.4 SALE OF ASSETS. Borrower shall not (nor shall it permit any of its
Restricted Subsidiaries to) sell, convey, assign, lease or otherwise transfer or
dispose of, voluntarily, by operation of law or otherwise, any material part of
its now owned or
32
hereafter acquired assets during any twelve (12) month period commencing June 1,
1998 and each June 1 thereafter, except: (a) the sale of inventory, equipment
and fixtures disposed of in the ordinary course of business, (b) the sale or
other disposition of assets no longer necessary or useful for the conduct of its
business, and (c) leases of assets to an entity in which Borrower has at least a
fifty-percent (50%) interest in ownership, profits, and governance. For purposes
of this Section, "material part" shall mean ten percent (10%) or more of the
lesser of the book value or the market value of the assets of Borrower or such
Restricted Subsidiary as shown on the balance sheets thereof as of the May 31
immediately preceding each such twelve (12) month measurement period.
10.5 LIABILITIES OF OTHERS. Borrower shall not (nor shall it permit any
of its Restricted Subsidiaries to) assume, guarantee, become liable as a surety,
endorse, contingently agree to purchase, or otherwise be or become liable,
directly or indirectly (including, but not limited to, by means of a maintenance
agreement, an asset or stock purchase agreement, or any other agreement designed
to ensure any creditor against loss), for or on account of the obligation of any
Person, except (a) by the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of the Borrower's or
any Restricted Subsidiary's business, and (b) guarantees made from time to time
by Borrower and its Restricted Subsidiaries in the ordinary course of their
respective businesses; provided, however, that the aggregate amount of all
indebtedness guaranteed under clause (b) above shall not exceed $100,000,000 in
the aggregate.
10.6 LOANS. Borrower shall not (nor shall it permit any of its
Restricted Subsidiaries to) lend or advance money, credit, or property to any
Person, except for (a) loans to Restricted Subsidiaries, (b) trade credit
extended in the ordinary course of business, (c) loans made by Borrower to its
members on open account maintained by such members with Borrower or made by
Borrower to its members pursuant to its Affiliate Financing CoBank Participation
Program; provided that the aggregate principal amount of all such loans
outstanding at any time shall not exceed $150,000,000 and (d) loans made by
Fin-Ag, Inc. to agricultural producers, provided that the aggregate principal
amount of all such loans outstanding at any time shall not exceed $50,000,000.
10.7 MERGER; ACQUISITIONS; BUSINESS FORM; ETC. Borrower shall not (nor
shall it permit any of its Restricted Subsidiaries to) merge or consolidate with
any entity, or acquire all or substantially all of the assets of any person or
entity, or form or create any new subsidiary (other than a Restricted Subsidiary
formed by Borrower) or affiliate, change its business form from a cooperative
corporation, or commence operations under any other name, organization, or
entity, including any joint venture; provided, however, that the foregoing shall
not prevent any consolidation or merger if after giving effect thereto:
(a) The book value of Borrower and its Subsidiaries does not
increase due to all such mergers, consolidations or acquisitions by an aggregate
amount in excess of $50,000,000 in any fiscal year of Borrower;
33
(b) Borrower is the surviving entity; and
(c) No Event of Default or Potential Default shall have
occurred and be continuing.
10.8 INVESTMENTS. Except for the purchase of Bank Equity Interests,
Borrower shall not (nor shall it permit any of its Restricted Subsidiaries to)
own, purchase or acquire any stock, obligations or securities of, or any other
interest in, or make any capital contribution to, any Person, except that
Borrower and the Restricted Subsidiaries may own, purchase or acquire:
(a) commercial paper maturing not in excess of one year from
the date of acquisition and rated P1 by ▇▇▇▇▇'▇ Investors Service, Inc. or A1 by
Standard & Poor's Corporation on the date of acquisition;
(b) certificates of deposit in North American commercial
banks rated C or better by ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. or 3 or better by ▇▇▇▇▇
Consulting Analysts, maturing not in excess of one year from the date of
acquisition;
(c) obligations of the United States government or any agency
thereof, the obligations of which are guaranteed by the United States
government, maturing, in each case, not in excess of one year from the date of
acquisition;
(d) repurchase agreements of any bank or trust company
incorporated under the laws of the United States of America or any state thereof
and fully secured by a pledge of obligations issued or fully and unconditionally
guaranteed by the United States government;
(e) Investments permitted under Sections 10.5, 10.6, and
10.9;
(f) Investments made prior to the Closing Date in Persons,
which are not Restricted Subsidiaries, identified on Exhibit 10.8 hereto as it
may be supplemented (by adding or removing Persons) from time to time by
Borrower;
(g) Investments (by Borrower) in the Restricted Subsidiaries;
and
(h) Investments (by Borrower) in Subsidiaries, other than
Restricted Subsidiaries, in an aggregate amount not exceeding $75,000,000.00;
(i) Investments in the form of non-cash patronage dividends
in any Person; and
(j) Investments, in addition to those permitted by clauses
(a) through (i) above, in an aggregate amount not exceeding $75,000,000.00.
34
10.9 TRANSACTIONS WITH RELATED PARTIES. Borrower shall not purchase,
acquire, provide, or sell any equipment, other personal property, real property
or services from or to any Subsidiary of Borrower (other than a Restricted
Subsidiary), except in the ordinary course and pursuant to the reasonable
requirements of Borrower's business and upon fair and reasonable terms no less
favorable than would be obtained by Borrower in a comparable arm's-length
transaction with an unrelated Person.
10.10 PATRONAGE REFUNDS, ETC. Borrower shall not, directly or
indirectly, in any Fiscal Year (a) declare or pay any cash patronage refunds to
patrons or members which in the aggregate exceed 20% of Borrower's consolidated
net patronage income for the Fiscal Year of Borrower preceding the Fiscal Year
in which such patronage refunds are to be paid, (b) directly or indirectly
redeem or otherwise retire its equity, or (c) make any cash distributions of any
kind or character in respect of its equity, unless, in the case of (a), (b), or
(c), (i) at the time of taking such action no Event of Default or Potential
Default exists hereunder and (ii) after giving effect thereto no Event of
Default or Potential Default would exist hereunder.
10.11 CHANGE IN FISCAL YEAR. Borrower shall not change its Fiscal Year
from a year ending on August 31 unless required to do so by the Internal Revnue
Service, in which case Borrower agrees to such amendment of the terms Fiscal
Quarter and Fiscal Year, as used herein, as the Administrative Agent reasonably
deems necessary.
ARTICLE 11. INDEMNIFICATION
11.1 GENERAL; STAMP TAXES; INTANGIBLES TAX. Borrower agrees to
indemnify and hold the Administrative Agent and each Syndication Party and their
directors, officers, employees, agents, professional advisers and
representatives ("INDEMNIFIED PARTIES") harmless from and against any and all
claims, damages, losses, liabilities, costs or expenses whatsoever which the
Administrative Agent or any other Indemnified Party may incur (or which may be
claimed against any such Indemnified Party by any Person), including attorneys'
fees incurred by any Indemnified Party, arising out of or resulting from: (a)
the material inaccuracy of any representation or warranty of or with respect to
Borrower in this Credit Agreement or the other Loan Documents; (b) the material
failure of Borrower to perform or comply with any covenant or obligation of
Borrower under this Credit Agreement or the other Loan Documents; or (c) the
exercise by the Administrative Agent of any right or remedy set forth in this
Credit Agreement or the other Loan Documents, provided that Borrower shall have
no obligation to indemnify any Indemnified Party against claims, damages,
losses, liabilities, costs or expenses to the extent that a court of competent
jurisdiction renders a final non-appealable determination that the foregoing are
solely the result of the willful misconduct or gross negligence of such
Indemnified Party. In addition, Borrower agrees to indemnify and hold the
Indemnified Parties harmless from and against any and all claims, damages,
losses, liabilities, costs or expenses whatsoever which the Administrative Agent
or any other Indemnified Party may incur (or which may be claimed against any
such Indemnified Party by any Person), including attorneys' fees
35
incurred by any Indemnified Party, arising out of or resulting from the
imposition or nonpayment by Borrower of any stamp tax, intangibles tax, or
similar tax imposed by any state, including any amounts owing by virtue of the
assertion that the property valuation used to calculate any such tax was
understated. Borrower shall have the right to assume the defense of any claim as
would give rise to Borrower's indemnification obligation under this Section with
counsel of Borrower's choosing so long as such defense is being diligently and
properly conducted and Borrower shall establish to the Indemnified Party's
satisfaction that the amount of such claims are not, and will not be, material
in comparison to the liquid and unrestricted assets of Borrower available to
respond to any award which may be granted on account of such claim. So long as
the conditions of the preceding sentence are met, Indemnified Party shall have
no further right to reimbursement of attorneys' fees incurred thereafter. The
obligation to indemnify set forth in this Section shall survive the termination
of this Credit Agreement and other covenants.
11.2 INDEMNIFICATION RELATING TO HAZARDOUS SUBSTANCES. Borrower shall
not locate, produce, treat, transport, incorporate, discharge, emit, release,
deposit or dispose of any Hazardous Substance in, upon, under, over or from any
property owned or held by Borrower, except in accordance with all Environmental
Regulations; Borrower shall not permit any Hazardous Substance to be located,
produced, treated, transported, incorporated, discharged, emitted, released,
deposited, disposed of or to escape in, upon, under, over or from any property
owned or held by Borrower, except in accordance with Environmental Regulations;
and Borrower shall comply with all Environmental Regulations which are
applicable to such property. Borrower shall indemnify the Indemnified Parties
against, and shall reimburse the Indemnified Parties for, any and all claims,
demands, judgments, penalties, liabilities, costs, damages and expenses,
including court costs and attorneys' fees incurred by the Indemnified Parties
(prior to trial, at trial and on appeal) in any action against or involving the
Indemnified Parties, resulting from any breach of the foregoing covenants in
this Section or the covenants in Section 9.6 hereof, or from the discovery of
any Hazardous Substance in, upon, under or over, or emanating from, such
property, it being the intent of Borrower and the Indemnified Parties that the
Indemnified Parties shall have no liability or responsibility for damage or
injury to human health, the environmental or natural resources caused by, for
abatement and/or clean-up of, or otherwise with respect to, Hazardous Substances
as the result of the Administrative Agent or any Syndication Party exercising
any of its rights or remedies with respect thereto, including but not limited to
becoming the owner thereof by foreclosure or conveyance in lieu of foreclosure
of a judgment lien; provided that such indemnification as it applies to the
exercise by the Administrative Agent or any Syndication Party of its rights or
remedies with respect to the Loan Documents shall not apply to claims arising
solely with respect to Hazardous Substances brought onto such property by the
Administrative Agent or such Syndication Party while engaged in activities other
than operations substantially the same as the operations previously conducted on
such property by Borrower. The foregoing covenants of this Section shall be
deemed continuing covenants for the benefit of the Indemnified Parties, and any
36
successors and assigns of the Indemnified Parties, including but not limited to
any transferee of the title of the Administrative Agent or any Syndication Party
or any subsequent owner of the property, and shall survive the satisfaction or
release of any lien, any foreclosure of any lien and/or any acquisition of title
to the property or any part thereof by the Administrative Agent or any
Syndication Party, or anyone claiming by, through or under the Administrative
Agent or any Syndication Party or Borrower by deed in lieu of foreclosure or
otherwise. Any amounts covered by the foregoing indemnification shall bear
interest from the date incurred at the Default Interest Rate, shall be payable
on demand, and shall be secured by the Security Documents. The indemnification
and covenants of this Section shall survive the termination of this Credit
Agreement and other covenants.
ARTICLE 12. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
12.1 EVENTS OF DEFAULT. The occurrence of any of the following events
(each an "EVENT OF DEFAULT") shall, at the option of the Administrative Agent,
make the entire Bank Debt immediately due and payable (provided, that in the
case of an Event of Default under Subsection 12.1(f) all amounts owing under the
Notes and the other Loan Documents shall automatically and immediately become
due and payable without any action by or on behalf of the Administrative Agent),
and the Administrative Agent may exercise all rights and remedies for the
collection of any amounts outstanding hereunder and take whatever action it
deems necessary to secure itself, all without notice of default, presentment or
demand for payment, protest or notice of nonpayment or dishonor, or other
notices or demands of any kind or character:
(a) Failure of Borrower to pay within five (5) days of the
date when due, whether by acceleration or otherwise, any of the Bank Debt in
accordance with this Credit Agreement or the other Loan Documents.
(b) Any representation or warranty set forth in any Loan
Document, any Borrowing Notice, any financial statements or reports or
projections or forecasts, or in connection with any transaction contemplated by
any such document, shall prove in any material respect to have been false or
misleading when made or furnished by Borrower.
(c) Any default by Borrower in the performance or compliance
with the covenants, promises, conditions or provisions of Sections 9.3, 9.8,
9.11, 9.15, 10.1, 10.3, 10.4, 10.5, 10.7, or 10.10 of this Credit Agreement;
provided that a default under Subsection 9.15.1 hereof shall not constitute an
Event of Default nor a Potential Default if Borrower is in compliance with such
Subsection within five (5) Banking Days after the earlier of (i) the date on
which Borrower discovers that it is not in compliance with such test, or (ii)
the date by which Borrower is required by Subsections 9.2.1 or 9.2.2 hereof to
provide quarterly or year-end financial statements and/or Compliance
Certificates to the Administrative Agent.
37
(d) Any default by Borrower in the performance or compliance
with the covenants, promises, conditions or provisions of Sections 9.2, 9.5,
9.6, 9.7, 9.9, 9.10, (except as provided in Section 12.1(e)), 9.12, 9.13, 9.14,
10.6, 10.8, 10.9, or 10.11 of this Credit Agreement, and such failure continues
for fifteen (15) days after Borrower learns of such failure to comply, whether
by Borrower's own discovery or through notice from the Administrative Agent.
(e) The failure of Borrower to pay when due, or failure to
perform or observe any other obligation or condition with respect to any of the
following obligations to any Person, beyond any period of grace under the
instrument creating such obligation: (i) any indebtedness for borrowed money or
for the deferred purchase price of property or services, (ii) any obligations
under leases which have or should have been characterized as Capital Leases, or
(iii) any contingent liabilities, such as guaranties, for the obligations of
others relating to indebtedness for borrowed money or for the deferred purchase
price of property or services or relating to obligations under leases which have
or should have been characterized as Capital Leases; provided that no such
failure will be deemed to be an Event of Default hereunder unless and until the
aggregate amount owing under obligations with respect to which such failures
have occurred and are continuing is at least $1,000,000.00.
(f) Borrower applies for or consents to the appointment of a
trustee or receiver for any part of its properties; any bankruptcy,
reorganization, debt arrangement, dissolution or liquidation proceeding is
commenced or consented to by Borrower; or any application for appointment of a
receiver or a trustee, or any proceeding for bankruptcy, reorganization, debt
management or liquidation is filed for or commenced against Borrower, and is not
withdrawn or dismissed within sixty (60) days thereafter.
(g) Failure of Borrower to comply with any other provision of
this Credit Agreement or the other Loan Documents not constituting an Event of
Default under any of the preceding subparagraphs of this Section 12.1, and such
failure continues for thirty (30) days after Borrower learns of such failure to
comply, whether by Borrower's own discovery or through notice from the
Administrative Agent.
(h) The occurrence of an "Event of Default" under the
Revolving Loan Credit Agreement.
(i) The entry of one or more judgments in an aggregate amount
in excess of $5,000,000.00 against Borrower not stayed, discharged or paid
within thirty (30) days after entry.
12.2 NO ADVANCE. The Syndication Parties shall have no obligation to
make any Advance if a Potential Default or an Event of Default shall occur and
be continuing.
12.3 RIGHTS AND REMEDIES. In addition to the remedies set forth in
Section 12.1 and 12.2 hereof, upon the occurrence of an Event of Default, the
38
Administrative Agent shall be entitled to exercise all the rights and remedies
provided in the Loan Documents and by any applicable law. Each and every right
or remedy granted to the Administrative Agent pursuant to this Credit Agreement
and the other Loan Documents, or allowed the Administrative Agent by law or
equity, shall be cumulative. Failure or delay on the part of the Administrative
Agent to exercise any such right or remedy shall not operate as a waiver
thereof. Any single or partial exercise by the Administrative Agent of any such
right or remedy shall not preclude any future exercise thereof or the exercise
of any other right or remedy.
ARTICLE 13. AGENCY AGREEMENT
13.1 FUNDING OF SYNDICATION INTEREST. Each Syndication Party, severally
but not jointly, hereby irrevocably agrees to fund its Funding Share of the
Advances ("ADVANCE PAYMENT") as determined pursuant to the terms and conditions
contained herein and in particular, Article 2, hereof. Each Syndication Party's
interest ("SYNDICATION INTEREST") in each Advance hereunder shall be without
recourse to the Administrative Agent or any other Syndication Party and shall
not be construed as a loan from any Syndication Party to the Administrative
Agent or any other Syndication Party.
13.2 SYNDICATION PARTIES' OBLIGATIONS TO REMIT FUNDS. Each Syndication
Party agrees to remit its Funding Share to the Administrative Agent as, and
within the time deadlines ("SYNDICATION PARTY ADVANCE DATE"), required in this
Credit Agreement. Unless the Administrative Agent shall have received notice
from a Syndication Party prior to the date on which such Syndication Party is to
provide funds to the Administrative Agent for an Advance to be made by such
Syndication Party that such Syndication Party will not make available to the
Administrative Agent such funds, the Administrative Agent may assume that such
Syndication Party has made such funds available to the Administrative Agent on
the date of such Advance in accordance with the terms of this Credit Agreement
and the Administrative Agent in its sole discretion may, but shall not be
obligated to, in reliance upon such assumption, make available to Borrower on
such date a corresponding amount. If and to the extent such Syndication Party
shall not have made such funds available to the Administrative Agent by 2:00
P.M. (Central time) on the Banking Day due, such Syndication Party agrees to
repay the Administrative Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to Borrower until the Banking Day such amount is repaid to the
Administrative Agent (assuming payment is received by the Administrative Agent
at or prior to 2:00 P.M. (Central time), and until the next Banking Day if
payment is not received until after 2:00 P.M.), at the customary rate set by the
Administrative Agent for the correction of errors among banks for three (3)
Banking Days and thereafter at the Base Rate. If such Syndication Party shall
repay to the Administrative Agent such corresponding amount, such amount so
repaid shall constitute such Syndication Party's Advance for purposes of this
Credit Agreement. If such Syndication Party does not pay such corresponding
amount forthwith upon the Administrative Agent's demand therefor, the
Administrative Agent
39
shall promptly notify Borrower, and Borrower shall immediately pay such
corresponding amount to the Administrative Agent with the interest thereon, for
each day from the date such amount is made available to Borrower until the date
such amount is repaid to the Administrative Agent, at the rate of interest
applicable at the time to such Advance.
13.3 SYNDICATION PARTY'S FAILURE TO REMIT FUNDS. If a Syndication Party
("DELINQUENT SYNDICATION PARTY") fails to remit its Funding Share in full by the
date and time required (the unpaid amount of any such payment being hereinafter
referred to as the "DELINQUENT AMOUNT"), in addition to any other remedies
available hereunder, any other Syndication Party or Syndication Parties may, but
shall not be obligated to, advance the Delinquent Amount (the Syndication Party
or Syndication Parties which advance such Delinquent Amount are referred to as
the "CONTRIBUTING SYNDICATION PARTIES"), in which case (a) the Delinquent Amount
which any Contributing Syndication Party advances shall be treated as a loan to
the Delinquent Syndication Party and shall not be counted in determining the
Individual Outstanding Obligations, as applicable, of any Contributing
Syndication Party, and (b) the Delinquent Syndication Party shall be obligated
to pay to the Administrative Agent, for the account of the Contributing
Syndication Parties, interest on the Delinquent Amount at a rate of interest
equal to the rate of interest which Borrower is obligated to pay on the
Delinquent Amount plus 200 basis points ("DELINQUENCY Interest") until the
Delinquent Syndication Party remits the full Delinquent Amount and remits all
Delinquency Interest to the Administrative Agent, which will distribute such
payments to the Contributing Syndication Parties (pro rata based on the amount
of the Delinquent Amount which each of them (if more than one) advanced) on the
same Banking Day as such payments are received by the Administrative Agent if
received no later than 11:00 A.M. (Central time) or the next Banking Day if
received by the Administrative Agent thereafter. In addition, the Contributing
Syndication Parties shall be entitled to share, on the same pro rata basis, and
the Administrative Agent shall pay over to them, for application against
Delinquency Interest and the Delinquent Amount, the Delinquent Syndication
Party's Payment Distribution and any fee distributions or distributions made
under Section 13.10 hereof until the Delinquent Amount and all Delinquency
Interest have been paid in full. For voting purposes the Administrative Agent
shall readjust the Individual Commitments of such Delinquent Syndication Party
and the Contributing Syndication Parties from time to time first to reflect the
advance of the Delinquent Amount by the Contributing Syndication Parties, and
then to reflect the full or partial reimbursement to the Contributing
Syndication Parties of such Delinquent Amount. As between the Delinquent
Syndication Party and the Contributing Syndication Parties, the Delinquent
Syndication Party's interest in its Note shall be deemed to have been partially
assigned to the Contributing Syndication Parties in the amount of the Delinquent
Amount and Delinquency Interest owing to the Contributing Syndication Parties
from time to time. For the purposes of calculating interest owed by a Delinquent
Syndication Party, payments received on other than a Banking Day shall be deemed
to
40
have been received on the next Banking Day, and payments received after 2:00
P.M. (Central time) shall be deemed to have been received on the next Banking
Day.
13.4 AGENCY APPOINTMENT. Each of the Syndication Parties hereby
designates and appoints the Administrative Agent to act as agent to service and
collect the Term Loan and its respective Note and to take such action on behalf
of such Syndication Party with respect to the Term Loan and such Note, and to
execute such powers and to perform such duties, as specifically delegated or
required herein, as well as to exercise such powers and to perform such duties
as are reasonably incident thereto, and to receive and benefit from such fees
and indemnifications as are provided for or set forth herein, until such time as
a successor is appointed and qualified to act as the Administrative Agent.
13.5 POWER AND AUTHORITY OF THE ADMINISTRATIVE AGENT. Without limiting
the generality of the power and authority vested in the Administrative Agent
pursuant to Section 13.4 hereof, the power and authority vested in the
Administrative Agent includes, but is not limited to, the following:
13.5.1 ADVICE. To solicit the advice and assistance of each of
the Syndication Parties concerning the administration of the Term Loan and the
exercise by the Administrative Agent of its various rights, remedies, powers,
and discretions with respect thereto. As to any matters not expressly provided
for by this Credit Agreement or any other Loan Document, the Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, hereunder in accordance with instructions signed by all of the
Syndication Parties, the Required Lenders, or Super Majority Lenders, as the
case may be, and any action taken or failure to act pursuant thereto shall be
binding on all of the Syndication Parties and the Administrative Agent.
13.5.2 DOCUMENTS. To execute, seal, acknowledge, and deliver as
the Administrative Agent, all such instruments as may be appropriate in
connection with the administration of the Term Loan and the exercise by the
Administrative Agent of its various rights with respect thereto.
13.5.3 PROCEEDINGS. To initiate, prosecute, defend, and to
participate in, actions and proceedings in its name as the Administrative Agent
for the ratable benefit of the Syndication Parties.
13.5.4 RETAIN PROFESSIONALS. To retain attorneys, accountants,
and other professionals to provide advice and professional services to the
Administrative Agent, with their fees and expenses reimbursable to the
Administrative Agent by Syndication Parties pursuant to Section 13.17 hereof.
13.5.5 INCIDENTAL POWERS. To exercise powers reasonably incident
to the Administrative Agent's discharge of its duties enumerated in Section 13.6
hereof.
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13.6 DUTIES OF THE ADMINISTRATIVE AGENT. The duties of the
Administrative Agent hereunder shall consist of the following:
13.6.1 POSSESSION OF DOCUMENTS. To safekeep one original of each
of the Loan Documents other than the Notes (which will be in the possession of
the Syndication Party named as payee therein).
13.6.2 DISTRIBUTE PAYMENTS. To receive and distribute to the
Syndication Parties payments made by Borrower pursuant to the Loan Documents, as
provided in Article 4 hereof. Unless the Administrative Agent shall have
received notice from Borrower prior to the date on which any payment is due to
any Syndication Party hereunder that Borrower will not make such payment in
full, the Administrative Agent may assume that Borrower has made such payment in
full to the Administrative Agent on such date and the Administrative Agent in
its sole discretion may, but shall not be obligated to, in reliance upon such
assumption, cause to be distributed to each Syndication Party on such due date
an amount equal to the amount then due such Syndication Party. If and to the
extent Borrower shall not have so made such payment in full to the
Administrative Agent, each Syndication Party shall repay to the Administrative
Agent forthwith on demand such amount distributed to such Syndication Party
together with interest thereon, for each day from the date such amount is
distributed to such Syndication Party until the date such Syndication Party
repays such amount to the Administrative Agent at the customary rate set by the
Administrative Agent for the correction of errors among banks for three (3)
Banking Days and thereafter at the Base Rate.
13.6.3 LOAN ADMINISTRATION. Subject to the provisions of Section
13.8 hereof, to, on behalf of and for the ratable benefit of all Syndication
Parties, in accordance with customary banking practices, exercise all rights,
powers, privileges, and discretion to which the Administrative Agent is entitled
to administer the Term Loan, including, without limitation: (a) monitor all
borrowing activity, Individual Commitment balances, and maturity dates of all
Treasury Rate Loans and Quoted Rate Loans; (b) monitor and report Credit
Agreement and covenant compliance, and coordinate required credit actions by the
Syndication Parties; (c) manage the process for future waivers and amendments if
modifications to the Credit Agreement are required; and (d) administer, record,
and process all assignments to be made for the current and future Syndication
Parties.
13.6.4 ACTION UPON DEFAULT. Each Syndication Party agrees that
upon its learning of any facts which would constitute a Potential Default or
Event of Default, it shall promptly notify the Administrative Agent by a writing
designated as a notice of default specifying in detail the nature of such facts
and default, and the Administrative Agent shall promptly send a copy of such
notice to all other Syndication Parties. The Administrative Agent shall be
entitled to assume that no Event of Default or Potential Default has occurred or
is continuing unless an officer thereof primarily responsible for the
Administrative Agent's duties as such with respect to the Term Loan or primarily
42
responsible for the credit relationship between the Administrative Agent and
Borrower has actual knowledge of facts which would result in or constitute a
Potential Default or Event of Default, or has received written notice from
Borrower of such fact, or has received written notice of default from a
Syndication Party. In the event the Administrative Agent has obtained actual
knowledge (in the manner described above) or received written notice of the
occurrence of a Potential Default or Event of Default as provided in the
preceding sentences, the Administrative Agent may, but is not required to
exercise or refrain from exercising any rights which may be available under the
Loan Documents or at law on account of such occurrence and shall be entitled to
use its discretion with respect to exercising or refraining from exercising any
such rights, unless and until the Administrative Agent has received specific
written instruction from the Required Lenders to refrain from exercising such
rights or to take specific designated action, in which case it shall follow such
instruction; provided that the Administrative Agent shall not be required to
take any action which will subject it to personal liability, or which is or may
be contrary to any provision of the Loan Documents or applicable law. The
Administrative Agent shall not be subject to any liability by reason of its
acting or refraining from acting pursuant to any such instruction.
13.7 INDEMNIFICATION AS CONDITION TO ACTION. Except for action
expressly required of the Administrative Agent hereunder, the Administrative
Agent shall in all cases be fully justified in failing or refusing to act
hereunder unless it shall have received further assurances (which may include
cash collateral) of the indemnification obligations of the Syndication Parties
under Section 13.18 hereof in respect of any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
13.8 CONSENT REQUIRED FOR CERTAIN ACTIONS. Except as provided in
Section 13.3 hereof, and notwithstanding the fact that this Credit Agreement may
otherwise provide that the Administrative Agent may act at its discretion, the
Administrative Agent may not take any of the following actions (nor may the
Syndication Parties take the action described in Subsection 13.8.1(c)) with
respect to, or under, the Loan Documents without the prior written consent,
given after notification by the Administrative Agent of its intention to take
any such action (or notification by such Syndication Parties as are proposing
the action described in Subsection 13.8.1(c) of their intention to do so), of:
13.8.1 UNANIMOUS. Each of the Syndication Parties before:
(a) Agreeing to an increase in the Aggregate Commitment or an
extension of the Availability Period or the Maturity Date;
(b) Agreeing to a reduction in the amount, or to a delay in
the due date, of any payment by Borrower of interest, principal, or fees with
respect to the Term Loan; provided, however, this restriction shall not apply to
a delay in payment
43
granted by the Administrative Agent in the ordinary course of administration of
the Term Loan and the exercise of reasonable judgment, so long as such payment
delay does not exceed five (5) days;
(c) Reducing the voting rights percentage set forth in this
Subsection 13.8.1; or
(d) Agreeing to waive any material provisions of this Credit
Agreement relating to the Term Loan.
13.8.2 REQUIRED LENDERS. The Required Lenders before:
(a) Consenting to any action, amendment, or granting any
waiver with respect to the Term Loan not covered in Subsection 13.8.1; or
(b) Agreeing to amend Article 13 of this Credit Agreement
(other than Subsection 13.8.1(c)).
13.8.3 ACTION WITHOUT VOTE. Notwithstanding any other provisions
of this Section, the Administrative Agent may take the following action without
obtaining the consent of the Syndication Parties:
(a) Determining (i) whether the conditions to an Advance have
been met, and (ii) the amount of such Advance.
If no written consent or denial is received from a Syndication Party within five
(5) Banking Days after written notice of any proposed action as described in
this Section is delivered to such Syndication Party by the Administrative Agent,
such Syndication Party shall be conclusively deemed to have consented thereto
for the purposes of this Section.
13.9 DISTRIBUTION OF PRINCIPAL AND INTEREST. The Administrative Agent
will receive and accept all payments (including prepayments) of principal and
interest made by Borrower on the Term Loan and the Notes and will hold all such
payments in trust for the benefit of all present and future Syndication Parties,
and, if requested in writing by the Required Lenders, in an account segregated
from the Administrative Agent's other funds and accounts ("PAYMENT ACCOUNT").
After the receipt by the Administrative Agent of any payment representing
interest or principal on the Term Loan, the Administrative Agent shall remit to
each Syndication Party its share of such payment as provided in Article 4
hereof, ("PAYMENT DISTRIBUTION") no later than the same Banking Day as such
payment is received by the Administrative Agent if received no later than 11:00
A.M. (Central time) or the next Banking Day if received by the Administrative
Agent thereafter. Any Syndication Party's rights to its Payment Distribution
shall be subject to the rights of any Contributing Syndication Parties to such
amounts as set forth in Section 13.3 hereof.
44
13.10 DISTRIBUTION OF CERTAIN AMOUNTS. The Administrative Agent shall
(a) receive and hold in trust for the benefit of all present and future
Syndication Parties, in the Payment Account and, if requested in writing by the
Required Lenders, segregated from the Administrative Agent's other funds and
accounts and (b) shall remit to the Syndication Parties, as indicated, the
amounts described below:
13.10.1 FUNDING LOSSES. To each Syndication Party, the amount of
any Funding Losses paid by Borrower to the Administrative Agent in connection
with a prepayment of any portion of a Treasury Rate Loan or a Quoted Rate Loan,
in accordance with the Funding Loss Notice such Syndication Party provided to
the Administrative Agent, no later than the same Banking Day that payment of
such Funding Losses is received by the Administrative Agent, if received no
later than 11:00 A.M. (Central time), or the next Banking Day if received by the
Administrative Agent thereafter.
13.11 POSSESSION OF LOAN DOCUMENTS. The Loan Documents (other than the
Notes) shall be held by the Administrative Agent in its name, for the ratable
benefit of itself and the other Syndication Parties without preference or
priority.
13.12 COLLATERAL APPLICATION. The Syndication Parties shall have no
interest in any other loans made to Borrower by any other Syndication Party
other than the Term Loan, or in any property taken as security for any other
loan or loans made to Borrower by any other Syndication Party, or in any
property now or hereinafter in the possession or control of any other
Syndication Party, which may be or become security for the Term Loan solely by
reason of the provisions of a security instrument that would cause such security
instrument and the property covered thereby to secure generally all indebtedness
owing by Borrower to such other Syndication Party. Notwithstanding the
foregoing, to the extent such other Syndication Party applies such funds or the
proceeds of such property to reduction of the Term Loan, such other Syndication
Party shall share such funds or proceeds with all Syndication Parties according
to their respective Individual Commitments. In the event that any Syndication
Party shall obtain payment, whether partial or full, from any source in respect
of the Term Loan, including without limitation payment by reason of the exercise
of a right of offset, banker's lien, general lien, or counterclaim, such
Syndication Party shall promptly make such adjustments (which may include
payment in cash or the purchase of further syndications or participations in the
Term Loan) to the end that such excess payment shall be shared with all other
Syndication Parties in accordance with their respective Individual Commitments.
Notwithstanding any of the foregoing provisions of this Section or Article 6
hereof: (a) no Syndication Party other than CoBank shall have any right to, or
to the proceeds of, or any right to the application to any amount owing to such
Syndication Party hereunder of any the proceeds of, any Bank Equity Interests
issued to Borrower by CoBank or on account of any statutory lien held by CoBank
on such Bank Equity Interests, and (b) no Syndication Party other than St. ▇▇▇▇
Bank shall have any right to, or to the proceeds of, or any right to the
application to any amount owing to such Syndication Party hereunder of any the
proceeds of, any Bank Equity Interests
45
issued to Borrower by St. ▇▇▇▇ Bank or on account of any statutory lien held by
St. ▇▇▇▇ Bank on such Bank Equity Interests.
13.13 AMOUNTS REQUIRED TO BE RETURNED. If the Administrative Agent
makes any payment to a Syndication Party in anticipation of the receipt of final
funds from Borrower, and such funds are not received from Borrower, or if excess
funds are paid by the Administrative Agent to any Syndication Party as the
result of a miscalculation by the Administrative Agent, then Syndication Party
shall, on demand of the Administrative Agent, forthwith return to the
Administrative Agent any such amounts, plus interest thereon (from the day such
amounts were transferred by the Administrative Agent to the Syndication Party
to, but not including, the day such amounts are returned by Syndication Party)
at a rate per annum equal to the customary rate set by the Administrative Agent
for the correction of errors among banks for three (3) Banking Days and
thereafter at the Base Rate. If the Administrative Agent is required at any time
to return to Borrower or a trustee, receiver, liquidator, custodian, or similar
official any portion of the payments made by Borrower to the Administrative
Agent, whether pursuant to any bankruptcy or insolvency law or otherwise, then
each Syndication Party shall, on demand of the Administrative Agent, forthwith
return to the Administrative Agent any such payments transferred to such
Syndication Party by the Administrative Agent but without interest or penalty
(unless the Administrative Agent is required to pay interest or penalty on such
amounts to the person recovering such payments).
13.14 REPORTS AND INFORMATION TO SYNDICATION PARTIES. The
Administrative Agent shall use reasonable efforts to provide to Syndication
Parties, as soon as practicable after actual knowledge thereof is acquired by an
officer thereof primarily responsible for the Administrative Agent's duties as
such with respect to the Term Loan or primarily responsible for the credit
relationship between the Administrative Agent and Borrower, any material factual
information which has a material adverse effect on the creditworthiness of
Borrower, and Borrower hereby authorizes such disclosure by the Administrative
Agent to the Syndication Parties (and by the Syndication Parties to any of their
participants). Failure of the Administrative Agent to provide the information
referred to in this Section or in Subsection 13.6.4 hereof shall not result in
any liability upon, or right to make a claim against, the Administrative Agent
except where a court of competent jurisdiction renders a final non-appealable
determination that such failure is a result of the willful misconduct or gross
negligence of the Administrative Agent. Syndication Parties acknowledge and
agree that all information and reports received pursuant to this Credit
Agreement will be received in confidence in connection with their Syndication
Interest, and that such information and reports constitute confidential
information and shall not, without the prior written consent of the
Administrative Agent or Borrower, as applicable, be (x) disclosed to any third
party (other than the Administrative Agent, another Syndication Party or
potential Syndication Party, or a participant or potential participant in the
interest of a Syndication Party, which disclosure is hereby approved by
Borrower), except pursuant
46
to appropriate legal or regulatory process, or (y) used by the Syndication Party
except in connection with the Term Loan and its Syndication Interest.
13.15 STANDARD OF CARE. the Administrative Agent shall not be liable to
Syndication Parties for any error in judgment or for any action taken or not
taken by the Administrative Agent or its agents, except for its gross negligence
or willful misconduct. Subject to the preceding sentence, the Administrative
Agent will exercise the same care in administering the Term Loan and the Loan
Documents as it exercises for similar loans which it holds for its own account
and risk, and the Administrative Agent shall not have any further responsibility
to the Syndication Parties. Without limiting the foregoing, the Administrative
Agent may rely on the advice of counsel concerning legal matters and on any
written document it believes to be genuine and correct and to have been signed
or sent by the proper Person or Persons.
13.16 NO TRUST RELATIONSHIP. Neither the execution of this Credit
Agreement, nor the sharing in the Term Loan, nor the holding of the Loan
Documents in its name by the Administrative Agent, nor the management and
administration of the Term Loan and Loan Documents by the Administrative Agent
(including the obligation to hold certain payments and proceeds in the Payment
Account in trust for the Syndication Parties), nor any other right, duty or
obligation of the Administrative Agent under or pursuant to this Credit
Agreement is intended to be or create, and none of the foregoing shall be
construed to be or create, any express, implied or constructive trust
relationship between the Administrative Agent and any Syndication Party. Each
Syndication Party hereby agrees and stipulates that the Administrative Agent is
not acting as trustee for such Syndication Party with respect to the Term Loan,
this Credit Agreement, or any aspect of either, or in any other respect.
13.17 SHARING OF COSTS AND EXPENSES. To the extent not paid by
Borrower, each Syndication Party will promptly upon demand reimburse the
Administrative Agent for its proportionate share (based on its Individual Pro
Rata Share), for all reasonable costs, disbursements, and expenses incurred by
the Administrative Agent on or after the date of this Credit Agreement for
legal, accounting, consulting, and other services rendered to the Administrative
Agent in its role as the Administrative Agent in the administration of the Term
Loan, interpreting the Loan Documents, and protecting, enforcing, or otherwise
exercising any rights, both before and after default by Borrower under the Loan
Documents, and including, without limitation, all costs and expenses incurred in
connection with any bankruptcy proceedings; provided, however, that the costs
and expenses to be shared in accordance with this Section shall not include any
costs or expenses incurred by the Administrative Agent solely as a Syndication
Party in connection with the Term Loan, nor to the Administrative Agent's
internal costs and expenses.
13.18 SYNDICATION PARTIES' INDEMNIFICATION OF THE ADMINISTRATIVE AGENT.
Each of the Syndication Parties agree to indemnify the Administrative Agent,
including any Successor Agent, and their respective directors, officers,
employees, agents,
47
professional advisers and representatives ("INDEMNIFIED AGENCY PARTIES"), (to
the extent not reimbursed by Borrower, and without in any way limiting the
obligation of Borrower to do so), ratably (based on the ratio of the total of
its Individual Commitment to the Aggregate Commitment), from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Term Loan and/or the expiration or termination of this Credit Agreement) be
imposed on, incurred by or asserted against the Administrative Agent (or any of
the Indemnified Agency Parties while acting for the Administrative Agent or for
any Successor Agent) in any way relating to or arising out of this Credit
Agreement or the Loan Documents, or the performance of the duties of the
Administrative Agent hereunder or thereunder or any action taken or omitted
while acting in the capacity of the Administrative Agent under or in connection
with any of the foregoing; provided that the Syndication Parties shall not be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of an Indemnified Agency Party to the extent that any of the forgoing result
from the gross negligence or willful misconduct of that Indemnified Agency Party
as determined by a court of competent jurisdiction. The agreements and
obligations in this Section shall survive the payment of the Term Loan and the
expiration or termination of this Credit Agreement.
13.19 BOOKS AND RECORDS. The Administrative Agent shall maintain such
books of account and records relating to the Term Loan as it maintains with
respect to other loans of similar type and amount, and which shall clearly and
accurately reflect the Syndication Interest of each Syndication Party.
Syndication Parties, or their agents, may inspect such books of account and
records at all reasonable times during the Administrative Agent's regular
business hours.
13.20 ADMINISTRATIVE AGENT FEE. St. ▇▇▇▇ Bank and any Successor Agent
shall be entitled to the Administrative Agent Fee for acting as the
Administrative Agent. In the event the Successor Agent is contractually entitled
to an additional fee, each Syndication Party will be responsible for its
proportionate share (based on its Individual Pro Rata Share) thereof.
13.21 THE ADMINISTRATIVE AGENT'S RESIGNATION OR REMOVAL. The
Administrative Agent may resign at any time by giving at least sixty (60) days'
prior written notice of its intention to do so to each of the Syndication
Parties and Borrower. After the receipt of such notice, the Required Lenders
shall appoint a successor ("SUCCESSOR AGENT"). If (a) no Successor Agent shall
have been so appointed which is either (i) a Syndication Party, or (ii) if not a
Syndication Party, which is a Person approved by Borrower, or (b) if such
Successor Agent has not accepted such appointment, in either case within
forty-five (45) days after the retiring Administrative Agent's giving of such
notice of resignation, then the retiring Administrative Agent may, after
consulting with, but without requiring the approval of, Borrower, appoint a
Successor Agent which shall be a bank or a trust company organized under the
laws of
48
the United States of America or any state thereof and having a combined capital,
surplus and undivided profit of at least $250,000,000. Any Administrative Agent
may be removed upon the written demand of the Required Lenders, which demand
shall also appoint a Successor Agent. Upon the appointment of a Successor Agent
hereunder, (a) the term "Administrative Agent" shall for all purposes of this
Credit Agreement thereafter mean such Successor Agent, and (b) the Successor
Agent shall notify Borrower of its identity and of the information called for in
Subsection 14.4.2 hereof. After any retiring Administrative Agent's resignation
hereunder as the Administrative Agent, or the removal hereunder of any
Administrative Agent, the provisions of this Credit Agreement shall continue to
inure to the benefit of such Administrative Agent as to any actions taken or
omitted to be taken by it while it was the Administrative Agent under this
Credit Agreement.
13.22 REPRESENTATIONS AND WARRANTIES OF ALL PARTIES. The Administrative
Agent and each Syndication Party represents and warrants that: (a) the execution
and delivery of, and performance of its obligations under, this Credit Agreement
is within its power and has been duly authorized by all necessary corporate and
other action by it; (b) this Credit Agreement is in compliance with all
applicable laws and regulations promulgated under such laws and does not
conflict with nor constitute a breach of its charter or by-laws nor any
agreements by which it is bound, and does not violate any judgment, decree or
governmental or administrative order, rule or regulation applicable to it; (c)
no approval, authorization or other action by, or declaration to or filing with,
any governmental or administrative authority or any other Person is required to
be obtained or made by it in connection with the execution and delivery of, and
performance of its obligations under, this Credit Agreement; and (d) this Credit
Agreement has been duly executed by it, and constitutes the legal, valid, and
binding obligation of such Person, enforceable in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
rights of creditors generally and general equitable principles (regardless of
whether such enforceability is considered in a proceeding at law or in equity).
Each Syndication Party that is a state or national bank represents and warrants
that the act of entering into and performing its obligations under this Credit
Agreement has been approved by its board of directors or its loan committee and
such action was duly noted in the written minutes of the meeting of such board
or committee, and that it will furnish the Administrative Agent with a certified
copy of such minutes or an excerpt therefrom reflecting such approval.
13.23 REPRESENTATIONS AND WARRANTIES OF ST. ▇▇▇▇ BANK. St. ▇▇▇▇ Bank,
in its role as a Syndication Party and as the Administrative Agent, makes no
express or implied representation or warranty and assumes no responsibilities
with respect to the due authorization, execution, or delivery of the Loan
Documents; the accuracy of any information, statements, or certificates provided
by Borrower, the legality, validity, or enforceability of the Loan Documents;
the filing or recording of any document; the collectibility of the Term Loan;
the performance by Borrower of any of its obligations
49
under the Loan Documents; or the financial condition or solvency of Borrower or
any other party obligated with respect to the Term Loan or the Loan Documents.
13.24 SYNDICATION PARTIES' INDEPENDENT CREDIT ANALYSIS. Each
Syndication Party acknowledges receipt of true and correct copies of all Loan
Documents (other than any Note payable to another Syndication Party) from the
Administrative Agent. Each Syndication Party agrees and represents that it has
relied upon its independent review (a) of the Loan Documents, and (b) any
information independently acquired by such Syndication Party from Borrower or
otherwise in making its decision to acquire an interest in the Term Loan
independently and without reliance on the Administrative Agent. Each Syndication
Party represents and warrants that it has obtained such information as it deems
necessary (including any information such Syndication Party independently
obtained from Borrower or others) prior to making its decision to acquire an
interest in the Term Loan. Each Syndication Party further agrees and represents
that it has made its own independent analysis and appraisal of and investigation
into each Borrower's authority, business, operations, financial and other
condition, creditworthiness, and ability to perform its obligations under the
Loan Documents and has relied on such review in making its decision to acquire
an interest in the Term Loan. Each Syndication Party agrees that it will
continue to rely solely upon its independent review of the facts and
circumstances related to Borrower, and without reliance upon the Administrative
Agent, in making future decisions with respect to all matters under or in
connection with the Loan Documents and the Term Loan. The Administrative Agent
assumes no responsibility for the financial condition of Borrower or for the
performance of Borrower's obligations under the Loan Documents. Except as
otherwise expressly provided herein, no Syndication Party shall have any duty or
responsibility to furnish to any other Syndication Parties any credit or other
information concerning Borrower which may come into its possession.
13.25 NO JOINT VENTURE OR PARTNERSHIP. Neither the execution of this
Credit Agreement, the sharing in the Term Loan, nor any agreement to share in
payments or losses arising as a result of this transaction is intended to be or
to create, and the foregoing shall not be construed to be, any partnership,
joint venture or other joint enterprise between the Administrative Agent and any
Syndication Party, nor between or among any of the Syndication Parties.
13.26 PURCHASE FOR OWN ACCOUNT; RESTRICTIONS ON TRANSFER;
PARTICIPATIONS. Each Syndication Party other than CoBank or St. ▇▇▇▇ Bank
represents that it has acquired and is retaining its interest in the Term Loan
for its own account in the ordinary course of its banking or financing business
and not with a view toward the sale, distribution, further participation, or
transfer thereof. Each Syndication Party agrees that it will not sell, assign,
convey or otherwise dispose of ("TRANSFER"), or create or permit to exist any
lien or security interest on all or any part of its interest in the Term Loan,
without the prior written consent of the Administrative Agent and Borrower
(which consent will not be unreasonably withheld); provided that: (a) any such
Transfer (except a Transfer to another Syndication Party) or a Transfer by
CoBank or St. ▇▇▇▇
50
Bank must be in a minimum amount of $10,000,000.00; (b) each Syndication Party
must maintain an Individual Commitment of no less than $15,000,000.00, unless it
Transfers its entire interest in the Term Loan; (c) the transferee must execute
an agreement substantially in the form of Exhibit 13.26 hereto ("SYNDICATION
ACQUISITION AGREEMENT") and assume all of the transferor's obligations hereunder
and execute such documents as the Administrative Agent may reasonably require;
and (d) the Syndication Party making such Transfer must pay the Administrative
Agent an assignment fee of $3,500.00. Any Syndication Party may participate any
part of its interest in the Term Loan to any Person with the prior written
consent of the Administrative Agent and Borrower (which consent will not be
unreasonably withheld), and each Syndication Party understands and agrees that
it must maintain a hold position in the Term Loan not subject to participation
of no less than $15,000,000.00 and further agrees that in the event of any such
participation: (x) its obligations hereunder will not change on account of such
participation; (y) except as provided in Section 13.27 hereof, the participant
will have no rights under this Credit Agreement, including, without limitation,
voting rights or the right to receive payments or distributions; and (z) the
Administrative Agent shall continue to deal directly with the Syndication Party
with respect to the Term Loan (including with respect to voting rights) as
though no participation had been granted and will not be obligated to deal
directly with any participant. Notwithstanding any provision contained herein to
the contrary, any Syndication Party may at any time pledge or assign all or any
portion of its interest in the Term Loan to any Federal Reserve Bank in
accordance with applicable law. CoBank and St. ▇▇▇▇ Bank reserve the right to
sell participations on a non-patronage basis.
13.27 CERTAIN PARTICIPANTS' VOTING RIGHTS. All Persons which purchase a
participation interest in the interest of CoBank or St. ▇▇▇▇ Bank as a
Syndication Party hereunder may, in the sole discretion of CoBank or St. ▇▇▇▇
Bank, respectively (or as required in any agreement under which such purchase is
made and governed), be allowed by CoBank or St. ▇▇▇▇ Bank to vote, on a dollar
basis, on any matter requiring or allowing CoBank or St. ▇▇▇▇ Bank, as
applicable, in its capacity as a Syndication Party, to provide or withhold its
consent, or to otherwise vote on any proposed action.
13.28 METHOD OF MAKING PAYMENTS. Payment and transfer of all amounts
owing or to be paid or remitted hereunder, including, without limitation,
payment of the Advance Payment by Syndication Parties, and distribution of
principal or interest payments or fees or other amounts by the Administrative
Agent, shall be by wire transfer in accordance with the instructions contained
on Exhibit 13.28 hereto ("WIRE INSTRUCTIONS").
13.29 EVENTS OF SYNDICATION DEFAULT/REMEDIES.
13.29.1 SYNDICATION PARTY DEFAULT. Any of the following
occurrences, failures or acts, with respect to any of the Syndication Parties
shall constitute an "EVENT OF SYNDICATION DEFAULT" hereunder by such party: (a)
if any representation or warranty made by such party in this Credit Agreement
shall be found to have been untrue in any
51
material respect; (b) if such party fails to make any distributions or payments
required under this Credit Agreement within five (5) days of the date required;
(c) if such party breaches any other covenant, agreement, or provision of this
Credit Agreement which breach shall have continued uncured for a period of
thirty (30) consecutive days after such breach first occurs, unless a shorter
period is required to avoid prejudicing the rights and position of the other
Syndication Parties; (d) if any agency having supervisory authority over such
party, or any creditors thereof, shall file a petition to reorganize or
liquidate such party pursuant to any applicable federal or state law or
regulation and such petition shall not be discharged or denied within fifteen
(15) days after the date on which it is filed; (e) if by the order of a court of
competent jurisdiction or by any appropriate supervisory agency, a receiver,
trustee or liquidator shall be appointed for such party or for all or any
material part of its property or if such party shall be declared insolvent; or
(f) if such party shall be dissolved, or shall make an assignment for the
benefit of its creditors, or shall file a petition seeking to take advantage of
any debtors' act, including the bankruptcy act, or shall admit in writing its
inability to pay its debts generally as they become due, or shall consent to the
appointment of a receiver or liquidator of all or any material part of its
property.
13.29.2 REMEDIES. Upon the occurrence of an Event of Syndication
Default, the non-defaulting parties, acting by, or through the direction of, a
simple majority (determined based on the ratio of their Individual Commitments
to the Aggregate Commitment) of the non-defaulting parties, may, in addition to
any other remedy specifically set forth in this Credit Agreement, have and
exercise any and all remedies available generally at law or equity, including
the right to damages and to specific performance.
13.30 WITHHOLDING TAXES. Each Syndication Party represents that it is
entitled to receive any payments to be made to it hereunder without the
withholding of any tax and will furnish to the Administrative Agent and to
Borrower such forms, certifications, statements and other documents as the
Administrative Agent or Borrower may request from time to time to evidence such
Syndication Party's exemption from the withholding of any tax imposed by any
jurisdiction or to enable the Administrative Agent or Borrower, as the case may
be, to comply with any applicable laws or regulations relating thereto. Without
limiting the effect of the foregoing, if any Syndication Party is not created or
organized under the laws of the United States of America or any state thereof,
such Syndication Party will furnish to the Administrative Agent and Borrower IRS
Form 4224 or Form 1001, or such other forms, certifications, statements or
documents, duly executed and completed by such Syndication Party, as evidence of
such Syndication Party's exemption from the withholding of United States tax
with respect thereto. Notwithstanding anything herein to the contrary, Borrower
shall not be obligated to make any payments hereunder to such Syndication Party
until such Syndication Party shall have furnished to the Administrative Agent
and Borrower the requested form, certification, statement or document.
52
13.31 AMENDMENTS CONCERNING AGENCY FUNCTION. The Administrative Agent
shall not be bound by any waiver, amendment, supplement or modification of this
Credit Agreement or any other Loan Document which affects its duties hereunder
or thereunder unless it shall have given its prior written consent thereto.
13.32 FURTHER ASSURANCES. The Administrative Agent and each Syndication
Party agree to take whatever steps and execute such documents as may be
reasonable and necessary to implement this Article 13 and to carry out fully the
intent thereof.
ARTICLE 14. MISCELLANEOUS
14.1 COSTS AND EXPENSES. To the extent permitted by law, Borrower
agrees to pay to the Administrative Agent and the Syndication Parties, on
demand, all out-of-pocket costs and expenses (a) incurred by the Administrative
Agent (including, without limitation, the reasonable fees and expenses of
counsel retained by the Administrative Agent, and including fees and expenses
incurred for consulting, appraisal, engineering, inspection, and environmental
assessment services) in connection with the preparation, negotiation, and
execution of the Loan Documents and the transactions contemplated thereby, and
processing the Borrowing Notices; and (b) incurred by the Administrative Agent
or any Syndication Party (including, without limitation, the reasonable fees and
expenses of counsel retained by the Administrative Agent and the Syndication
Parties) in connection with the enforcement or protection of the Syndication
Parties' rights under the Loan Documents upon the occurrence of an Event of
Default or upon the commencement of an action by Borrower against the
Administrative Agent or any Syndication Party, including without limitation
collection of the Term Loan (regardless of whether such enforcement or
collection is by court action or otherwise). Borrower shall not be obligated to
pay the costs or expenses of any Person whose only interest in the Term Loan is
as a holder of a participation interest.
14.2 SERVICE OF PROCESS AND CONSENT TO JURISDICTION. Borrower hereby
agrees that any litigation with respect to this Credit Agreement or to enforce
any judgment obtained against Borrower for breach of this Credit Agreement or
under the Notes or other Loan Documents may be brought in the courts of the
State of Colorado and in the United States District Court for the District of
Colorado (if applicable subject matter jurisdictional requirements are present),
as the Administrative Agent may elect; and, by execution and delivery of this
Credit Agreement, Borrower irrevocably submits to such jurisdiction. With
respect to litigation concerning this Credit Agreement or under the Notes or
other Loan Documents within the jurisdiction of the courts of the State of
Colorado or the United States District Court for the District of Colorado,
Borrower hereby irrevocably appoints, until January 15, 2010, The Corporation
Company to serve as the agent of Borrower to receive for and on behalf of
Borrower at such agent's Denver, Colorado office (presently at ▇▇▇▇ ▇▇▇▇▇▇▇▇),
service of process, which service may be made by mailing a copy of any summons
or other legal process to Borrower in care of such agent. Borrower agrees that
Borrower shall maintain a duly appointed agent in Colorado for service of
summons and other legal process as long as Borrower
53
remains obligated under this Credit Agreement and shall keep the Administrative
Agent advised in writing of the identity and location of such agent. The receipt
by such agent and/or by Borrower of such summons or other legal process in any
such litigation shall be deemed personal service and acceptance by Borrower for
all purposes of such litigation.
14.3 JURY WAIVER. IT IS MUTUALLY AGREED BY AND BETWEEN THE
ADMINISTRATIVE AGENT, EACH SYNDICATION PARTY, AND BORROWER THAT THEY EACH WAIVE
TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM BROUGHT BY ANY OF THEM
AGAINST ANY OTHER PARTY ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS CREDIT AGREEMENT, THE NOTES, OR THE OTHER LOAN DOCUMENTS.
14.4 NOTICES. All notices, requests and demands required or permitted
under the terms of this Credit Agreement shall be in writing and (a) shall be
addressed as set forth below or at such other address as either party shall
designate in writing, (b) shall be deemed to have been given or made: (i) if
delivered personally, immediately upon delivery, (ii) if by telex, telegram or
facsimile transmission, immediately upon sending and upon confirmation of
receipt, (iii) if by nationally recognized overnight courier service with
instructions to deliver the next Banking Day, one (1) Banking Day after sending,
and (iv) if by United States Mail, certified mail, return receipt requested,
five (5) days after mailing.
14.4.1 BORROWER:
Cenex Harvest States Cooperatives
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Vice President Finance
with a copy to:
Cenex Harvest States Cooperatives
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
54
14.4.2 ADMINISTRATIVE AGENT:
St. ▇▇▇▇ Bank for Cooperatives
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
14.4.3 SYNDICATION PARTIES:
See Schedule 1 to this Credit Agreement
14.5 LIABILITY OF ADMINISTRATIVE AGENT. The Administrative Agent shall
not have any liabilities or responsibilities to Borrower or any Subsidiary on
account of the failure of any Syndication Party to perform its obligations
hereunder or to any Syndication Party on account of the failure of Borrower or
any Subsidiary to perform their respective obligations hereunder or under any
other Loan Document.
14.6 SUCCESSORS AND ASSIGNS. This Credit Agreement shall be binding
upon and inure to the benefit of Borrower, the Administrative Agent, and the
Syndication Parties, and their respective successors and assigns, except that
Borrower may not assign or transfer its rights or obligations hereunder without
the prior written consent of all of the Syndication Parties.
14.7 SEVERABILITY. The invalidity or unenforceability of any provision
of this Credit Agreement or the other Loan Documents shall not affect the
remaining portions of such documents or instruments; in case of such invalidity
or unenforceability, such documents or instruments shall be construed as if such
invalid or unenforceable provisions had not been included therein.
14.8 ENTIRE AGREEMENT. This Credit Agreement (together with all
exhibits hereto, which are incorporated herein by this reference) and the other
Loan Documents represent the entire understanding of the Administrative Agent,
each Syndication Party, and Borrower with respect to the subject matter hereof
and shall replace and supersede any previous agreements of the parties with
respect to the subject matter hereof.
14.9 APPLICABLE LAW. To the extent not governed by federal law, this
Credit Agreement and the other Loan Documents, and the rights and obligations of
the parties hereto and thereto shall be governed by and interpreted in
accordance with the internal laws of the State of Colorado, without giving
effect to any otherwise applicable rules concerning conflicts of law.
55
14.10 CAPTIONS. The captions or headings in this Credit Agreement and
any table of contents hereof are for convenience only and in no way define,
limit or describe the scope or intent of any provision of this Credit Agreement.
14.11 COMPLETE AGREEMENT; AMENDMENTS. THIS CREDIT AGREEMENT, THE NOTES,
AND THE OTHER LOAN DOCUMENTS ARE INTENDED BY THE PARTIES HERETO TO BE A COMPLETE
AND FINAL EXPRESSION OF THEIR AGREEMENT AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF ANY PRIOR OR CONTEMPORANEOUS ORAL AGREEMENT. BY INITIALING IN THE MARGIN, THE
ADMINISTRATIVE AGENT, EACH SYNDICATION PARTY, AND BORROWER ACKNOWLEDGE AND AGREE
THAT NO UNWRITTEN ORAL AGREEMENT EXISTS BETWEEN THEM WITH RESPECT TO THE SUBJECT
MATTER OF THIS AGREEMENT. This Credit Agreement may not be modified or amended
unless such modification or amendment is in writing and is signed by Borrower,
the Administrative Agent, and all Syndication Parties (and each Syndication
Party hereby agrees to execute any such amendment approved pursuant to Section
13.8 hereof). Borrower agrees that it shall reimburse the Administrative Agent
for all fees and expenses incurred by the Administrative Agent in retaining
outside legal counsel in connection with any amendment or modification to this
Credit Agreement requested by Borrower.
14.12 ADDITIONAL COSTS OF MAINTAINING LOAN. Borrower shall pay to the
Administrative Agent from time to time such amounts as the Administrative Agent
may determine to be necessary to compensate any Syndication Party for any
increase in costs to such Syndication Party which the Administrative Agent
determines, based on information presented to it by such Syndication Party, are
attributable to such Syndication Party's making or maintaining an Advance
hereunder or its obligation to make such Advance, or any reduction in any amount
receivable by such Syndication Party under this Credit Agreement or the Notes
payable to it in respect to such Advance or such obligation (such increases in
costs and reductions in amounts receivable being herein called "ADDITIONAL
COSTS"), resulting from any change after the date of this Credit Agreement in
United States federal, state, municipal, or foreign laws or regulations
(including Regulation D of the Federal Reserve Board), or the adoption or making
after such date of any interpretations, directives, or requirements applying to
a class of banks including such Syndication Party of or under any United States
federal, state, municipal, or foreign laws or regulations (whether or not having
the force of law) by any court or governmental or monetary authority charged
with the interpretation or administration thereof ("REGULATORY CHANGE"), which:
(a) changes the basis of taxation of any amounts payable to such Syndication
Party under this Credit Agreement or the Notes payable to such Syndication Party
in respect of such Advance (other than taxes imposed on the overall net income
of such Syndication Party); or (b) imposes or modifies any reserve, special
deposit, or similar requirements relating to any extensions of credit or other
assets of, or any deposits with or other liabilities of, such Syndication Party;
or (c) imposes any other condition affecting this Credit Agreement or the Notes
56
payable to such Syndication Party (or any of such extensions of credit or
liabilities). The Administrative Agent will notify Borrower of any event
occurring after the date of this Credit Agreement which will entitle such
Syndication Party to compensation pursuant to this Section as promptly as
practicable after it obtains knowledge thereof and determines to request such
compensation. the Administrative Agent shall include with such notice, a
certificate from such Syndication Party setting forth in reasonable detail the
calculation of the amount of such compensation. Determinations by the
Administrative Agent for purposes of this Section of the effect of any
Regulatory Change on the costs of such Syndication Party of making or
maintaining an Advance or on amounts receivable by such Syndication Party in
respect of Advances, and of the additional amounts required to compensate such
Syndication Party in respect of any Additional Costs, shall be conclusive absent
manifest error, provided that such determinations are made on a reasonable
basis.
14.13 CAPITAL REQUIREMENTS. In the event that the introduction of or
any change in: (a) any law or regulation; or (b) the judicial, administrative,
or other governmental interpretation of any law or regulation; or (c) compliance
by any Syndication Party or any corporation controlling any such Syndication
Party with any guideline or request from any governmental authority (whether or
not having the force of law) has the effect of requiring an increase in the
amount of capital required or expected to be maintained by such Syndication
Party or any corporation controlling such Syndication Party, and such
Syndication Party certifies that such increase is based in any part upon such
Syndication Party's obligations hereunder with respect to the Term Loan, and
other similar obligations, Borrower shall pay to such Syndication Party such
additional amount as shall be certified by such Syndication Party to the
Administrative Agent and to Borrower to be the net present value (discounted at
the Base Rate) of (x) the amount by which such increase in capital reduces the
rate of return on capital which such Syndication Party could have achieved over
the period remaining until the Maturity Date, but for such introduction or
change, (y) multiplied by the product of such Syndication Party's Individual Pro
Rata Share times the Aggregate Commitment. The Administrative Agent will notify
Borrower of any event occurring after the date of this Credit Agreement that
will entitle any such Syndication Party to compensation pursuant to this Section
as promptly as practicable after it obtains knowledge thereof and of such
Syndication Party's determination to request such compensation. The
Administrative Agent shall include with such notice, a certificate from such
Syndication Party setting forth in reasonable detail the calculation of the
amount of such compensation. Determinations by any Syndication Party for
purposes of this Section of the effect of any increase in the amount of capital
required to be maintained by any such Syndication Party and of the amount of
compensation owed to any such Syndication Party under this Section shall be
conclusive absent manifest error, provided that such determinations are made on
a reasonable basis.
14.14 REPLACEMENT NOTES. Upon receipt by Borrower of evidence
satisfactory to it of: (a) the loss, theft, destruction or mutilation of any
Note, and (in case of loss,
57
theft or destruction) of the agreement of the Syndication Party to which the
Note was payable to indemnify Borrower, and upon surrender and cancellation of
such Note, if mutilated; or (b) the assignment by any Syndication Party of its
interest hereunder and the Note relating thereto, or any portion thereof,
pursuant to this Credit Agreement, then Borrower will pay any unpaid principal
and interest (and Funding Losses, if applicable) then or previously due and
payable on such Note and will (upon delivery of such Note for cancellation,
unless covered by subparagraph (a) of this Section) deliver in lieu of such Note
a new Note or, in the case of an assignment of a portion of any such Syndication
Party's Interest, new Notes, for any remaining balance.
14.15 PATRONAGE PAYMENTS. Borrower acknowledges and agrees that: (a)
only that portion of the Term Loan represented by CoBank's Individual Pro Rata
Share which 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 distribution; (b) any patronage, or similar,
payments to which Borrower is entitled on account its ownership of Bank Equity
Interests or otherwise will not be based on any portion of CoBank's interest in
the Term Loan in which CoBank has at any time granted a participation interest;
and (c) St. ▇▇▇▇ Bank may, at its sole discretion, pay Borrower patronage or
similar payments on St. ▇▇▇▇ Bank's entire Individual Pro Rata Share (without
regard to the amount thereof as to which St. ▇▇▇▇ Bank may grant participations
to other Persons) in accordance with St. ▇▇▇▇ Bank's bylaws and its practices
and procedures related to patronage distribution.
14.16 MUTUAL RELEASE. Upon full indefeasible payment and satisfaction
of the Bank Debt and Notes and the other obligations contained in this Credit
Agreement, the parties, including Borrower, the Administrative Agent, and each
Syndication Party shall, except as provided in Article 11 hereof, thereupon
automatically each be fully, finally, and forever released and discharged from
any further claim, liability, or obligation in connection with the Bank Debt.
14.17 LIBERAL CONSTRUCTION. This Credit Agreement constitutes a fully
negotiated agreement between commercially sophisticated parties, each assisted
by legal counsel, and shall not be construed and interpreted for or against any
party hereto.
14.18 COUNTERPARTS. This Credit Agreement may be executed by the
parties hereto in separate counterparts, each of which, when so executed and
delivered, shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of a number
of copies hereof, each signed by less than all, but together signed by all of
the parties hereto.
14.19 CONFIDENTIALITY. Each Syndication Party shall maintain the
confidential nature of, and shall not use or disclose, any of Borrower's
financial information, confidential information or trade secrets without first
obtaining Borrower's written consent. Nothing in this Section shall require any
Syndication Party to obtain such consent after there is an Event of Default. The
obligations of the Syndication Parties
58
shall in no event apply to: (a) providing information about Borrower to any
financial institution contemplated in Sections 13.6, 13.14, and 13.19 hereof, or
to such Syndication Party's parent holding company or any of such Syndication
Party's affiliates; (b) any situation in which any Syndication Party is required
by Law or required by any Governmental Authority to disclose information; (c)
providing information to counsel to any Syndication Party in connection with the
transactions contemplated by the Loan Documents; (d) providing information to
independent auditors retained by the such Syndication Party; (e) any information
that is in or becomes part of the public domain otherwise than through a
wrongful act of such Syndication Party or any of its employees or agents
thereof; (f) any information that is in the possession of any Syndication Party
prior to receipt thereof from Borrower or any other Person known to such
Syndication Party to be acting on behalf of Borrower; (g) any information that
is independently developed by any Syndication Party; and (h) any information
that is disclosed to any Syndication Party by a third party that has no
obligation of confidentiality with respect to the information disclosed. A
Syndication Party's confidentiality requirements continue after it is no longer
a Syndication Party under this Credit Agreement.
[Signature Pages Begin on Page 54]
59
IN WITNESS WHEREOF, the parties have executed this Credit Agreement as
of the date first above written.
BORROWER:
CENEX HARVEST STATES
COOPERATIVES, a cooperative corporation
formed under the laws of the State of
Minnesota
By: /s/ ▇. ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇. ▇. ▇▇▇▇▇
Title: Executive Vice President Finance and
Administration
ADMINISTRATIVE AGENT:
ST. ▇▇▇▇ BANK FOR COOPERATIVES
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Associate Vice President
60
SYNDICATION PARTIES:
COBANK, ACB
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
Contact Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone No.: 316/▇▇▇-▇▇▇▇
Fax No.: 316/▇▇▇-▇▇▇▇
Payment Instructions:
CoBank, ACB
ABA No.: ▇▇▇▇▇▇▇▇▇
Acct. Name: CoBank, ACB
Account No.: ▇▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Reference: Cenex Harvest States
61
SYNDICATION PARTIES:
ST. ▇▇▇▇ BANK FOR COOPERATIVES
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Associate Vice President
Contact Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Associate Vice President
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Phone No.: 612/▇▇▇-▇▇▇▇
Fax No.: 612/▇▇▇-▇▇▇▇
Payment Instructions:
St. ▇▇▇▇ Bank for Cooperatives
ABA No.: ▇▇▇▇▇▇▇▇▇
Acct. Name: Cenex Harvest States
Account No.: 271998
Reference:
62
EXHIBIT 2.4
to Credit Agreement
(Term Loan)
PROMISSORY NOTE
$__________.00 Effective Date: _____ __, 199_
FOR VALUE RECEIVED, CENEX HARVEST STATES COOPERATIVES, a Minnesota
cooperative corporation ("Maker"), promises to pay to the order of
_______________ ("Payee") at the office of the Administrative Agent (as defined
in the Credit Agreement), %St. ▇▇▇▇ Bank for Cooperatives at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or such other place as the Administrative Agent
shall direct in writing, the principal sum of ______________ Dollars
($__________.00) or, if less, the amount outstanding under this Note for
Advances made pursuant to the Credit Agreement dated as of June 1, 1998, by and
between St. ▇▇▇▇ Bank (for its own benefit as a Syndication Party, and as the
Administrative Agent for the benefit of the present and future Syndication
Parties as named or defined therein) and Maker (as it may be amended from time
to time in the future, the "Credit Agreement") and any Bank Debt related
thereto. This Note is issued and delivered to Payee pursuant to the Credit
Agreement. All capitalized terms used in this Note and not otherwise defined
herein shall have the same meanings as set forth in the Credit Agreement.
The unpaid balance of this Note from time to time outstanding shall
bear interest as set forth in the Credit Agreement. Interest shall be payable as
provided in the Credit Agreement. Principal shall be payable on the Maturity
Date as provided in the Credit Agreement. This Note has been issued by Maker to
Payee pursuant to the Credit Agreement and reference is made thereto for
specific terms and conditions under which this Note is made and to which this
Note is subject.
This Note is subject to voluntary and mandatory prepayments as set
forth in the Credit Agreement. Amounts repaid may not be reborrowed. Upon the
occurrence of an Event of Default, Maker agrees that the Administrative Agent
and the Payee shall have all rights and remedies set forth in the Credit
Agreement, including without limitation the rights of acceleration set forth in
the Credit Agreement. In addition, the Administrative Agent and the Payee shall
have the right to recover all costs of collection and enforcement of this Note
as provided in the Credit Agreement.
Maker and any endorser, guarantor, surety or assignor hereby waives
presentment for payment, demand, protest, notice of protest, and notice of
dishonor and nonpayment of this Note, and all defenses on the ground of delay,
suretyship, impairment of collateral, or of extension of time at or after
maturity for the payment of this Note.
This Note shall be governed in all respects by the law of the State of
Colorado.
Maker:
CENEX HARVEST STATES COOPERATIVES
a Minnesota corporation
By: _____________________________
Name:_____________________________
Title:____________________________