AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

Exhibit 10.21

 

U.S. $225,000,000

 

AMENDED AND RESTATED

REVOLVING CREDIT AGREEMENT,

 

dated as of December 22, 2003,

 

among

 

ROYSTER-CLARK, INC.,

as the Borrower,

 

CERTAIN SUBSIDIARIES OF ROYSTER-CLARK, INC.

as the Co-Borrowers

 

VARIOUS FINANCIAL INSTITUTIONS,

as the Lenders,

 

U.S. BANK NATIONAL ASSOCIATION,

as the Administrative Agent, a Collateral Agent and a Lead Arranger,

 

THE CIT GROUP/BUSINESS CREDIT, INC.,

as a Collateral Agent and a Lead Arranger

 

and

 

BANK OF AMERICA, N.A.

as a Lead Arranger

AMENDED AND RESTATED

REVOLVING CREDIT AGREEMENT

 

THIS AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT, dated as of December 22, 2003, among ROYSTER-CLARK, INC., a Delaware corporation (the “ Borrower ”), ROYSTER-CLARK RESOURCES, LLC, a Delaware limited liability company, ROYSTER-CLARK AGRIBUSINESS, INC. (f/k/a IMC AgriBusiness, Inc.), a Delaware corporation, ROYSTER-CLARK NITROGEN, INC. (f/k/a IMC Nitrogen Company), a Delaware corporation, (individually a “ Co-Borrower ” and collectively, the “ Co-Borrower’s ”), the various financial institutions as are or may become parties hereto (individually a “ Lender ” and collectively, the “ Lenders ”) and U.S. BANK NATIONAL ASSOCIATION, a national banking association (“ U.S. Bank ”), as the administrative agent (the “ Agent ”). This Amended and Restated Revolving Credit Agreement amends and restates the Revolving Credit Agreement dated as of April 22, 1999, together with the First, Second and Third Amendments thereto (the “ Original Credit Agreement ”).

 

WITNESSETH:

 

WHEREAS, certain principals of the Borrower and 399 Venture Partners, Inc., a Delaware corporation (“ 399VP ”), own all of the issued and outstanding Capital Stock of Royster-Clark Group, Inc., a Delaware corporation (“ Parent ”);

 

WHEREAS, Parent owns all of the issued and outstanding Capital Stock of the Borrower and the Borrower, directly or indirectly owns all of the equity interests of several subsidiaries, including all of the Co-Borrowers;

 

WHEREAS, in connection with the ongoing working capital and general corporate needs of the Borrower and the Co-Borrowers, the Parent, the Borrower and the Co-Borrowers desire that the Borrower and the Co-Borrowers obtain the following financing facilities from the Lenders:

 

a. a Revolving Loan Commitment (to include availability for Revolving Loans, Swing Line Loans and Letters of Credit) pursuant to which Borrowings of Revolving Loans, in a maximum aggregate principal amount (together with all Swing Line Loans and Letter of Credit Outstandings) not to exceed $225,000,000, will be made on and subsequent to the Effective Date but prior to the Revolving Loan Commitment Termination Date;

 

b. a Letter of Credit Commitment pursuant to which the Issuer will issue Letters of Credit for the account of the Borrower and the Co-Borrowers from time to time on and subsequent to the Effective Date but prior to the Revolving Loan Commitment Termination Date in a maximum aggregate Stated Amount at any one time outstanding not to exceed $20,000,000; and

 

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c. a Swing Line Loan Commitment pursuant to which Borrowings of Swing Line Loans, in an aggregate outstanding principal amount not to exceed $25,000,000, will be made subsequent to the Effective Date but prior to the Revolving Loan Commitment Termination Date; and

 

WHEREAS, the Lenders are willing, on the terms and subject to the conditions hereinafter set forth, to extend such Commitments, make such Loans to the Borrower and the Co-Borrowers and issue (or participate in) such Letters of Credit;

 

NOW, THEREFORE, the parties hereto agree as follows:

 

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

 

1.1 Defined Terms . The following terms (whether or not underscored) when used in this Agreement, including its preamble and recitals, shall, except where the context otherwise requires, have the following meanings (such meanings to be equally applicable to the singular and plural forms thereof):

 

“ 399VP ” is defined in the first recital .

 

“ 399VP Notes ” means the non-cash pay junior subordinated notes issued by Parent on or about the date of the Original Credit Agreement, with an original aggregate outstanding principal amount equal to $10,000,000 and payable to certain affiliates of 399VP.

 

“ Account ” means any account (as that term is defined in Section 9-102 of the UCC) of the Borrower and the Co-Borrowers arising from the sale or lease of goods or rendering of services.

 

“ Account Debtor ” is defined in clause (b) of the definition of “Eligible Account”.

 

“ Acquired Borrowing Base Assets ” is defined in clause (b)(iii) of the definition of “Permitted Acquisition”.

 

“ Affiliate ” of any Person means any other Person which, directly or indirectly, controls, is controlled by or is under common control with such Person (excluding any trustee under, or any committee with responsibility for administering, any Plan). A Person shall be deemed to be “controlled by” any other Person if such other Person possesses, directly or indirectly, power

 

(a) to vote 10% or more of the Capital Stock (on a fully diluted basis) of such Person having ordinary voting power for the election of directors or managing general partners, or

 

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(b) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

 

“ Agent ” is defined in the preamble and includes each other Person as shall have subsequently been appointed as the successor Agent pursuant to Section 9.4 .

 

“ Agent’s Fee Letter ” means the confidential fee letter, dated December 22, 2003, among the Borrower and U.S. Bank, as amended, supplemented, amended and restated or otherwise modified from time to time.

 

“ Agreement ” means, on any date, this Amended and Restated Revolving Credit Agreement as originally in effect on the Closing Date and as thereafter from time to time amended, supplemented, amended and restated, or otherwise modified and in effect on such date.

 

“ Alternate Base Rate ” means, for any day and with respect to all Base Rate Loans, the higher of:

 

(a) 0.50% per annum above the latest Federal Funds Rate and

 

(b) the rate of interest in effect for such day as most recently publicly announced or established by the Agent in Minneapolis, Minnesota (or such other place of business as may be designated by the Agent or any successor Agent) as its “Prime Rate”.

 

The “Prime Rate” is a rate set by the Agent based upon various factors including the Agent’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such announced rate. The “Prime Rate” is not necessarily the lowest rate offered by the Agent. Any change in the “Prime Rate” established or announced by the Agent shall take effect at the opening of business on the day of such establishment or announcement by the Agent.

 

“ Applicable Commitment Fee ” means, for each day from the Closing Date a fee which shall accrue at the applicable rate per annum set forth below under the column entitled “ Applicable Commitment Fee ”, determined by reference to the applicable Interest Coverage Ratio referred to below:

 

 

Until receipt of the Compliance Certificate for the reporting period ending on December 31, 2003, the Applicable Commitment Fee shall be 0.500%. Thereafter, the Interest Coverage Ratio used to compute the Applicable Commitment Fee shall be as set forth in the Compliance Certificates delivered by the Borrower to the Agent as follows. Changes in the Applicable Commitment Fee resulting from a change in the

 

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Interest Coverage Ratio shall become effective ten (10) Business Days after the due date of the Compliance Certificate delivered by the Borrower to the Agent pursuant to clause (c) of Section 7.1.1 . If the Borrower shall fail to deliver a Compliance Certificate within the number of days required pursuant to clause (c ) of Section 7.1.1 (without giving effect to any grace period), then effective ten (10) Business Days after the due date of the Compliance Certificate, the Applicable Commitment Fee from such day to, but not including the 10 ^th Business Day after the Borrower delivers to, the Agent an appropriately completed Compliance Certificate shall conclusively equal the highest Applicable Commitment Fee set forth above.

 

“ Applicable Margin ” means at all times during the applicable periods set forth below (a) with respect to the unpaid principal amount of each Loan maintained as a Base Rate Loan, the applicable percentage set forth below under the column entitled “Applicable Margin for Base Rate Loans” and (b) with respect to the unpaid principal amount of each Loan maintained as a LIBO Rate Loan, the applicable percentage set forth below under the column entitled “Applicable Margin for LIBO Rate Loans”, in each case, determined by reference to the applicable Interest Coverage Ratio referred to below:

 

 

Until receipt of the Compliance Certificate for the reporting period ending on December 31, 2003, the Applicable Margin for Base Rate Loans and the Applicable Margin for LIBO Rate Loans shall be 1.25% and 3.00%, respectively. Thereafter, the Interest Coverage Ratio used to compute the Applicable Margin shall be as set forth in the Compliance Certificates delivered by the Borrower to the Agent as follows. Changes in the Applicable Margin resulting from a change in the Interest Coverage Ratio shall become effective ten (10) Business Days after the due date of the Compliance Certificate delivered by the Borrower to the Agent pursuant to clause (c) of Section 7.1.1 . If the Borrower shall fail to deliver a Compliance Certificate within the number of days required pursuant to clause (c ) of Section 7.1.1 (without giving effect to any grace period), then effective ten (10) Business Days after the due date of the Compliance Certificate, the Applicable Margin from such day to, but not including the 10 ^th Business Day after the Borrower delivers to, the Agent an appropriately completed Compliance Certificate shall conclusively equal the highest Applicable Margin set forth above.

 

“ Assignee Lender ” is defined in Section 10.11.1 .

 

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“ Assignor Lender ” is defined in Section 10.11.1 .

 

“ Authorized Officer ” means, relative to any Obligor, those of its officers whose signatures and incumbency shall have been certified to the Agent and the Lenders pursuant to Section 5.1.1 .

 

“ Bank Products ” means any of the following services or facilities extended to the Borrower or any Co-Borrower by the Agent, any Lender or any of their Affiliates: (a) credit cards; (b) cash management, including controlled disbursement services, automatic clearing house transfer of funds and overdrafts; and (c) facilities and services resulting in Hedging Obligations, including services or facilities extended under Rate Protection Agreements.

 

“ Bank Products Agreements ” means all documents and agreements relating to Bank Products.

 

“ Bank Products Obligations ” means, with respect to any Person, all liabilities of such Person under any Bank Products Agreements.

 

“ Base Rate Loan ” means a Loan bearing interest at a fluctuating rate determined by reference to the Alternate Base Rate.

 

“ Borrower ” is defined in the preamble .

 

“ Borrower Pledge and Security Agreement ” means the Pledge Agreement executed and delivered by an Authorized Officer of the Borrower pursuant to the Original Credit Agreement, substantially in the form of Exhibit F-2 hereto, as amended, supplemented, amended and restated or otherwise modified from time to time.

 

“ Borrowing ” means the Loans of the same type and, in the case of LIBO Rate Loans, having the same Interest Period made by all Lenders on the same Business Day and pursuant to the same Borrowing Request in accordance with Section 2.1 .

 

“ Borrowing Base Amount ” means, at anytime, the sum (without duplication) of

 

(a) the Net Asset Value of all Eligible Accounts at such time as determined in accordance with clause (a) of the definition of “Net Asset Value” and as certified by the Borrower in the most recently delivered Borrowing Base Certificate;

 

plus

 

(b) the Net Asset Value of Eligible Inventory at such time as determined in accordance with clause (b) and clause (c) of the definition of “Net Asset Value” and as certified by the Borrower in the most recently delivered Borrowing Base Certificate;

 

minus

 

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(c) the aggregate amounts of Net Disposition Proceeds and Net Casualty Proceeds paid or payable by Borrower in accordance with clause (d) or clause (g) of Section 3.1.1 , respectively, with regard to Fixed Assets that are or were subject to a Lien to secure the Obligations provided , that such deduction of Net Casualty Proceeds shall be reversed if and when both of the following occur (i) the Borrower notifies the Agent no later than 60 days following the receipt of such Net Casualty Proceeds of the Borrower’s or Co-Borrower’s good faith intention to draw Revolving Loans (in accordance with the terms of this Agreement) up to the amount such Net Casualty Proceeds for the rebuilding or replacement of such damaged, destroyed or condemned assets or property and (ii) such Person in fact uses such Revolving Loans to begin rebuilding or replacing the damaged, destroyed or condemned assets or property within 180 days following the receipt of such Net Casualty Proceeds and continues diligently to complete such rebuilding or replacement of such damaged, destroyed or condemned assets or property within the time reasonably required therefore (the “ Rebuilding and Replacement Work ”), with the amount of Net Casualty Proceeds unused after the completion of such Rebuilding and Replacement Work continuing to be deducted pursuant to this clause (c) ; provided , further , however , the replaced or acquired asset must be subject to a first priority Lien to secure the Obligations, satisfactory in all respects to the Collateral Agents.

 

“ Borrowing Base Certificate ” means a certificate duly completed and executed by the treasurer, assistant treasurer, chief accounting or financial Authorized Officer of the Borrower, substantially in the form of Exhibit E-2 hereto, together with such changes thereto as the Agent may from time to time reasonably request for the purpose of accurately determining the Borrowing Base as in effect from time to time or for the purpose of corresponding to other amendments to this Agreement or changes in circumstances permitted under this Agreement.

 

“ Borrowing Request ” means a loan request and certificate duly executed by an Authorized Officer of the Borrower, substantially in the form of Exhibit B-1 hereto.

 

“ Business Day ” means any day which is neither a Saturday nor Sunday nor a legal holiday on which banks are authorized or required to be closed in New York City or Minneapolis, Minnesota, and, with respect to Borrowings of, Interest Periods with respect to, payments of principal and interest in respect of, and conversions of Base Rate Loans into, LIBO Rate Loans, any day on which dealings in Dollars are carried on in the London interbank market.

 

“ Capital Expenditures ” means for any period, the sum, without duplication, of the aggregate amount of all expenditures of the Borrower and the Co-Borrowers for fixed or capital assets made during such period which, in accordance with GAAP, would be classified as capital expenditures.

 

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“ Capital Stock ” means, with respect to any Person,

 

(a) any and all shares, interests, participations, rights or other equivalents of or interests in (however designated) corporate or capital stock, including shares of preferred or preference stock of such Person,

 

(b) all partnership interests (whether general or limited) in such Person,

 

(c) all membership interests or limited liability company interests in such Person, and

 

(d) all other equity or ownership interests in such Person of any other type.

 

“ Capitalized Lease Liabilities ” means, without duplication, all monetary obligations of the Borrower and the Co-Borrowers under any leasing or similar arrangement which, in accordance with GAAP, would be classified as capitalized leases, and, for purposes of this Agreement and each other Loan Document, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP, and the stated maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a premium or penalty.

 

“ Cash Collateralize ” means, with respect to a Letter of Credit, the payment to the Agent of immediately available funds in an amount equal to one hundred five percent (105%) of the Stated Amount of such Letter of Credit, deposited in a cash collateral account with the Agent or its designee on terms satisfactory to the Agent.

 

“ Cash Equivalent Investment ” means, at any time:

 

(a) any direct obligation of (or unconditionally guaranteed or insured by) the United States of America or a State thereof (or any agency or political subdivision thereof, to the extent such obligations are supported by the full faith and credit of the United States of America or a State thereof) maturing not more than one year after such time,

 

(b) commercial paper maturing not more than 270 days from the date of issue, which is issued by (i) a corporation (other than an Affiliate of any Obligor) organized under the laws of any State of the United States or of the District of Columbia and rated A-1 or higher by S&P or P-1 or higher by Moody’s; or (ii) any Lender (or its holding company);

 

(c) any certificate of deposit, time deposit or bankers acceptance, maturing not more than one year after its date of issuance, which is issued by either (i) any bank organized under the laws of the United States (or any State thereof) and which has (A) a credit rating of A2 or higher from Moody’s or A or higher from S&P and (B) a combined capital and surplus greater than $500,000,000; or (ii) any Lender;

 

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(d) any repurchase agreement having a term of 30 days or less entered into with any Lender or any commercial banking institution satisfying the criteria set forth in clause (c)(i) which (i) is secured by a fully perfected security interest in any obligation of the type described in clause (a) ; and (ii) has a market value at the time such repurchase agreement is entered into of not less than 100% of the repurchase obligation of such commercial banking institution thereunder; or

 

(e) any money market or similar fund the assets of which are comprised exclusively of any of the items specified in clauses (a) through (c) above and as to which withdrawals are permitted at least every 90 days.

 

“ Casualty Event ” means the damage, destruction or condemnation, as the case may be, of any property of the Borrower and the Co-Borrowers.

 

“ CERCLA ” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended.

 

“ Change in Control ” means

 

(a) the failure of the Borrower at any time to own (directly or indirectly), free and clear of all Liens and encumbrances (other than Liens permitted to exist under clauses (a) , (e) and (h) of Section 7.2.3 ), all right, title and interest in 100% of the Capital Stock of each of the Co-Borrowers;

 

(b) the failure of Parent at any time to own (directly or indirectly), free and clear of all Liens and encumbrances (other than Liens permitted to exist under clauses (a) , (e) , and (h) of Section 7.2.3 ), all right, title and interest in 100% of the Capital Stock of the Borrower;

 

(c) any Person, or two or more Persons acting in concert (other than Francis P. Jenkins and his controlled Affiliates), individually or collectively, acquiring a greater percentage of the beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of the voting Capital Stock of Parent on a fully diluted basis other than 399VP, CVC and each of their controlled Affiliates, collectively;

 

(d) the failure of 399VP, CVC and each of their controlled Affiliates, collectively, to hold at least 37.5% of the voting Capital Stock of the Parent held by such Persons, collectively, on the Closing Date, subject to any stock splits, distributions, redemptions or repurchases;

 

(e) the first day on which a majority of the members of the Board of Directors of the Borrower are not Continuing Directors; or

 

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(f) any “Change of Control” as such term is defined in the First Mortgage Note Indenture.

 

“ Closing Date ” means December 22, 2003.

 

“ Closing Date Certificate ” means a certificate of an Authorized Officer of the Borrower substantially in the form of Exhibit D-2 hereto, delivered pursuant to Section 5.1.6 .

 

“ Co-Borrowers ” is defined in the preamble .

 

“ Collateral Agents ” means The CIT Group/Business Credit, Inc., so long as it is a Lender, and the Agent.

 

“ Code ” means the Internal Revenue Code of 1986, and the regulations thereunder, in each case as amended, reformed or otherwise modified from time to time.

 

“ Combine ” and “ Combination ” are defined in Section 7.2.8 .

 

“ Commitment ” means, as the context may require, a Lender’s Revolving Loan Commitment, Swing Line Loan Commitment or Letter of Credit Commitment.

 

“ Commitment Amount ” means, as the context may require, the Revolving Loan Commitment Amount, the Swing Line Loan Commitment Amount or the Letter of Credit Commitment Amount.

 

“ Commitment Termination Event ” means

 

(a) the occurrence of any Event of Default described in clauses (a) through (e) of Section 8.1.9 with respect to any Obligor, or

 

(b) (i) the occurrence and continuance of any other Event of Default and (ii) the declaration by the Agent to the Borrower of all or any portion of the Loans to be due and payable and the giving of notice by the Agent to the Borrower that the Commitments have been terminated, in each case acting at the direction of the Required Lenders pursuant to Section 8.3 .

 

“ Commodity Hedging Agreements ” means with respect to any Person, all liabilities of such Person under exchange agreements, swap agreements, cap agreements, future agreements, forward agreements and all other agreements or arrangements designed to protect such Person against fluctuations in commodity prices.

 

“ Compliance Certificate ” means a certificate duly completed and executed by the president, chief executive, treasurer, controller or chief financial Authorized Officer of

 

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the Borrower, substantially in the form of Exhibit E-1 hereto, together with such changes thereto as the Agent may from time to time reasonably request for the purpose of monitoring the Borrower’s compliance with the financial covenants from time to time contained herein or for the purpose of corresponding to other amendments to this Agreement or changes in circumstances permitted under this Agreement.

 

“ Contingent Liability ” means any agreement, undertaking or arrangement by which any Person guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor against loss) the Indebtedness of any other Person (other than by endorsements of instruments in the course of collection), or guarantees the payment of dividends or other distributions upon the shares of Capital Stock of any other Person. The amount of any Person’s obligation under any Contingent Liability shall (subject to any limitation set forth therein) be deemed to be the outstanding principal amount of the debt, obligation or other liability guaranteed thereby.

 

“ Continuation/Conversion Notice ” means a notice of continuation or conversion and certificate duly executed by an Authorized Officer of the Borrower, substantially in the form of Exhibit C hereto.

 

“ Continuing Directors ” means, as of any date of determination, any member of the Board of Directors of the Borrower who:

 

(a) was a member of such Board on the date hereof; or

 

(b) was nominated for election or elected to such Board with the approval of a majority of the Continuing Directors who were members of such Board at the time of such nomination or election.

 

“ Controlled Group ” means all members of a controlled group of corporations and all members of a controlled group of trades or businesses (whether or not incorporated) under common control which, together with the Borrower, are treated as a single employer under Section 414(b) or 414(c) of the Code or Section 4001 of ERISA.

 

“ Credit Extension ” means, as the context may require,

 

(a) the making of a Loan by a Lender or

 

(b) the issuance of any Letter of Credit, or the extension of any Stated Expiry Date of any previously issued Letter of Credit, by the Issuer.

 

“ Credit Extension Request ” means, as the context may require, any Borrowing Request or Issuance Request.

 

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“ Crop Term Accounts ” means Accounts as to which the Borrower or any Co-Borrower grants certain Account Debtors extended payment due dates of not later than the end of the Crop Year in which such Accounts arise.

 

“ Crop Year ” means October 1 through September 30 of the next succeeding year for winter wheat, or January 1 through January 31 of the next succeeding year for all other crops.

 

“ Customer Deposit ” means a deposit received by the Borrower or the Co-Borrowers from a customer of the Borrower or the Co-Borrowers in payment for the future delivery of Inventory.

 

“ CVC ” means Citicorp Venture Capital Ltd., a New York corporation and an Affiliate of 399VP.

 

“ Debt ” means, without duplication, the outstanding principal amount of all Indebtedness of the Borrower and the Co-Borrowers that is of the type referred to in clauses (a) , (b) , (c) and (e) of the definition of “Indebtedness” and any Contingent Liability in respect of any of the foregoing.

 

“ Default ” means any Event of Default or any condition, occurrence or event which, after notice or lapse of time or both, would constitute an Event of Default.

 

“ Default Period ” means the period of time commencing at the beginning of the first Business Day after the delivery of a “Notice of Default” to the Agent in accordance with Section 9.9 and continuing until the Default or Event of Default described therein is cured or waived, as the case may be, in accordance with the terms of this Agreement.

 

“ Disbursement ” is defined in Section 2.6.2 .

 

“ Disbursement Date ” is defined in Section 2.6.2 .

 

“ Disbursement Due Date ” is defined in Section 2.6.2 .

 

“ Disclosure Schedule ” means the Disclosure Schedule attached hereto as Schedule I-2 , as it may be amended, supplemented or otherwise modified from time to time by the Borrower with the written consent of the Required Lenders.

 

“ Disposition ” (or correlative words such as “ Dispose ”) means any sale, transfer, lease, contribution or other conveyance (including by way of merger) of, or the granting of options, warrants or other rights to, any of the Borrower’s or the Co-Borrower’s assets (including accounts receivables, and Capital Stock of any Co-Borrower) to any other Person (other than to another Obligor) in a single transaction or series of related transactions.

 

“ Dollar ” and the sign “$” mean lawful money of the United States.

 

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“ EBITDA ” means, for any applicable period, the sum (without duplication) for the Borrower and the Co-Borrowers on a consolidated basis of:

 

(a) Net Income,

 

plus

 

(b) the amount deducted, in determining Net Income, representing amortization (including any amount of deferred financing fees written off),

 

plus

 

(c) the amount deducted, in determining Net Income, representing all income Taxes (whether paid in cash or deferred),

 

plus

 

(d) the amount deducted, in determining Net Income, representing Interest Expense,

 

plus

 

(e) the amount deducted, in determining Net Income, representing depreciation of assets,

 

plus

 

(f) the amount deducted, in determining Net Income, representing non-cash non-operating losses (including without limitation, extraordinary or nonrecurring losses, losses from discontinuance of operations and losses arising from the sale of assets other than Inventory), not to exceed $10,000,000 in the aggregate of such non-cash non-operating losses other than write offs of goodwill or tax assets,

 

minus

 

(g) the amount included, in determining Net Income, representing non-operating (cash and non-cash) gains (including without limitation, extraordinary or nonrecurring gains, gains from discontinuance of operations and gains arising from the sale of assets other than Inventory).

 

Notwithstanding the foregoing, with respect to EBITDA calculated for a four Fiscal Quarter period, EBITDA shall be adjusted to include the Permitted Acquisition(s) made during an included Fiscal Quarter, as if such Permitted Acquisition(s) had been made at the beginning of such four Fiscal Quarter period (such adjustments to be satisfactory to the Agent).

 

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“ Effective Date ” means December 23, 2003, provided this Agreement has become effective pursuant to Section 10.8 .

 

“ Eligible Account ” means, an Account of the Borrower or a Co-Borrower, meeting the following criteria. Each Collateral Agent shall have the right, after consultation with the other Collateral Agent, in the exercise of its reasonable unilateral discretion, to determine whether an Account is eligible for inclusion in the Borrowing Base at any particular time. Without limiting the Collateral Agents’ right to determine that an Account does not constitute an Eligible Account, an Account shall not be an Eligible Account unless the following specific criteria are satisfied:

 

(a) the Borrower or such Co-Borrower owns such Account free and clear of all Liens other than any Lien in favor of the Agent granted pursuant to this Agreement or another Loan Document (and the Agent shall have a first-priority (other than inchoate statutory Liens otherwise permitted by Section 7.2.3 ) perfected Lien on such Account);

 

(b) such Account is a legal, valid, binding and enforceable obligation of the Person obligated under such Account (the “ Account Debtor ”) (except as such enforceability may be, at any time of determination, limited by applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally and by principles of equity);

 

(c) such Account is not subject to any bona fide dispute, setoff, counterclaim or other claim or defense on the part of the Account Debtor or any other Person denying liability under such Account; provided , however , that any such Account shall constitute an Eligible Account to the extent it is not subject to any such dispute, setoff, counterclaim or other claim or defense;

 

(d) the Borrower or such Co-Borrower has the full and unqualified right to assign and grant a Lien in such Account to the Agent as security for the Obligations (and the Agent shall have a first-priority (other than inchoate statutory Liens otherwise permitted by Section 7.2.3 ) perfected Lien on such Account);

 

(e) such Account is evidenced by an invoice rendered to the Account Debtor (which shall include computer records) or is reflected by computer records maintained by the Borrower or such Co-Borrower evidencing such Account and is not a “bill and hold” Account or evidenced by any instrument or chattel paper (as the terms “instrument” and “chattel paper” are defined in Section 9-102 of the UCC) unless such instrument or chattel paper has been delivered to the Agent pursuant to any Pledge and Security Agreement;

 

(f) with respect to such Account, no Account Debtor is (i) an Affiliate of the Borrower or any Co-Borrower (other than Conetoe Chemical, Inc. and George Smith AG Services, Inc., and any 399VP-related company which is deemed an Affiliate solely by reason of 399VP’s common ownership interest in each of Parent and such

 

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399VP-related company), or (ii) the subject of any reorganization, bankruptcy, receivership, custodianship, insolvency or other condition analogous with respect to such Account Debtor to those described in clauses (a) through (d) of Section 8.1.9 ;

 

(g) such Account is not Past Due;

 

(h) such Account is not an Account owing by an Account Debtor having, at the time of any determination of Eligible Accounts, Past Due Accounts which exceed 35% of the aggregate outstanding amount of all of such Account Debtor’s Accounts (other than any Accounts which are the subject of bona fide disputes between such Account Debtor and the Borrower or such Co-Borrower, as the case may be);

 

(i) with respect to the Account Debtor under such Account, neither the Borrower nor any such Co-Borrower is indebted to such Account Debtor (including any Person who has a Customer Deposit with the Borrower or any Co-Borrower), unless the Borrower or such Co-Borrower and such Account Debtor have entered into an agreement whereby the Account Debtor is prohibited from exercising any right of setoff with respect to the Accounts of the Borrower or such Co-Borrower, provided , that in any event, if such an agreement prohibiting setoff rights with respect to any such Account is not delivered by the Account Debtor, then only up to the amount that the Borrower or such Co-Borrower is indebted to such Account Debtor under such Account shall be excluded as an Eligible Account pursuant to this clause;

 

(j) such Account arises from a sale to an Account Debtor located within the United States, unless the Account Debtor’s obligations (or that portion of such obligations which is acceptable to the Agent) with respect to a sale to an Account Debtor not located within the United States are secured by a letter of credit, guaranty or eligible bankers’ acceptance having terms, and from such issuers and confirmation banks, as are reasonably acceptable to the Agent; provided that Accounts arising from sales to Account Debtors located within Canada, other than in the Province of Quebec, need not be so secured up to an aggregate amount of $2,000,000 at any time outstanding;

 

(k) such Account is not an Account owing by an Account Debtor having, at the time of any determination of Eligible Accounts, in excess of 5% of the aggregate face amount of all Eligible Accounts of all Account Debtors;

 

(l) such Account is not an Account which arose as a result of the sale of consigned inventory owned by a third party; and

 

(m) such Account is not a Rebate Receivable;

 

provided , however , that, with respect to any Eligible Account which is subject to a discount or a rebate to be granted to the Account Debtor, the amount of such discount or rebate, as the case may be, shall be excluded from the value of such Eligible Account dollar-for-dollar.

 

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“ Eligible Inventory ” means, Inventory of the Borrower or a Co-Borrower, located in the United States arising in the ordinary course of business and meeting the following criteria. Each Collateral Agent shall have the right, after consultation with the other Collateral Agent, in the exercise of its reasonable unilateral discretion, to determine whether Inventory is eligible for inclusion in the Borrowing Base at any particular time. Without limiting the Collateral Agents’ right to determine that Inventory does not constitute Eligible Inventory, Inventory shall not be Eligible Inventory unless the following specific criteria are satisfied:

 

(a) the Borrower or such Co-Borrower owning such Inventory, as the case may be, has full and unqualified right to assign and grant, and has assigned and granted, a perfected Lien in such Inventory to the Agent as security for the Obligations (and the Agent shall have a perfected, first-priority Lien on such Inventory);

 

(b) the Borrower or such Co-Borrower owns such Inventory free and clear of all Liens other than any Lien in favor of the Agent granted pursuant to this Agreement or another Loan Document and other than inchoate statutory Liens otherwise permitted by Section 7.2.3 ;

 

(c) none of such Inventory is obsolete, unsalable, damaged or otherwise unfit for sale or consumption or further processing;

 

(d) none of such Inventory is in the possession of a third party (other than any Inventory Agent pursuant to clause (e) below) unless such Inventory is (i) at a location listed on Schedule III-2 hereto (which Schedule III-2 may be modified and/or supplemented from time to time with notice to and consent from the Agent), and for which the Agent has received a bailee letter satisfactory to the Agent, executed by such third party, or (ii) covered by negotiable warehouse receipts or negotiable bills of lading issued by either (A) a warehouseman licensed and bonded by the United States Department of Agriculture or any state’s equivalent Governmental Authority or (B) a recognized carrier having an office in the United States and in a financial condition reasonably acceptable to the Agent, and which receipts or bills of lading, in any case, designate the Agent directly or by endorsement as the only Person to which the warehouseman or carrier is legally obligated to deliver such Inventory;

 

(e) none of such Inventory is in the possession of any Inventory Agent unless (i) such Inventory Agent has been previously approved by the Agent in writing, (ii) such Inventory is stored at a location listed on Schedule III-2 hereto and (iii) the Borrower has complied, to the satisfaction of the Agent and its counsel, with the filing requirements of Article 9 of the UCC with respect to such Inventory;

 

(f) none of such Inventory in excess of an aggregate book value of $10,000,000 is located at a facility or facilities leased from a single landlord unless the Borrower has provided a landlord waiver to the satisfaction of the Agent and its counsel;

 

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(g) none of such Inventory shall consist of pallets, bags or other supplies; and

 

(h) none of such Inventory shall include Prepaid Inventory.

 

“ Environmental Laws ” means all applicable federal, state or local statutes, laws, ordinances, codes, rules, regulations and guidelines (including consent decrees and administrative orders) relating to public health and safety and protection of the environment.

 

“ Equalization Transfer ” is defined in clause (b) of Section 2.8 .

 

“ Equipment Disposition ” means the sale, trade or other disposition, in the ordinary course of business, of worn out or obsolete equipment of the Borrower or any Co-Borrower that is subject to a Lien to secure the Obligations, not exceeding $500,000 of book value in the aggregate in any fiscal year of Borrower.

 

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute thereto of similar import, together with regulations thereunder, in each case as in effect from time to time. References to sections of ERISA also refer to any successor sections thereto.

 

“ Event of Default ” is defined in Section 8.1 .

 

“ Excess Availability ” means, at any time of determination, the amount which is

 

(a) the lesser of (i) the Revolving Loan Commitment Amount and (ii) the then existing Borrowing Base Amount

 

less

 

(b) the aggregate outstanding principal amount of all Revolving Loans and Swing Line Loans, together with the aggregate amount of all Letter of Credit Outstandings.

 

“ Exchange Act ” means the Securities and Exchange Act of 1934, as amended.

 

“ Farmarkets Subsidiaries ” means, collectively, each of Royster-Clark Realty LLC, Royster-Clark and AgriBusiness Realty LLC, each a Delaware limited liability company to which the Borrower and certain of its Subsidiaries have transferred Fixed Assets to secure the First Mortgage Notes.

 

“ Federal Funds Rate ” means, for any period, a fluctuating interest rate per annum equal for each day during such period to

 

(a) the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York; or

 

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(b) if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Agent from three federal funds brokers of recognized standing selected by it.

 

“ Filing Agent ” is defined in Section 5.1.9 .

 

“ Filing Statements ” is defined in Section 5.1.9 .

 

“ First Mortgage Note Documents ” means, collectively, the First Mortgage Note Indenture and each of the other loan agreements, indentures, note purchase agreements, promissory notes, guarantees, and other instruments and agreements evidencing the terms of the First Mortgage Notes, as amended, supplemented, amended, restated and otherwise modified from time to time in accordance with Section 7.2.10 .

 

“ First Mortgage Note Indenture ” means the Indenture, dated as of April 22, 1999, among the Borrower, the guarantors party thereto and United States Trust Company of New York, as Trustee, as the same may be amended, supplemented, amended and restated or otherwise modified from time to time in accordance with Section 7.2.10 .

 

“ First Mortgage Notes ” means, the 10  ¹ / 4 % First Mortgage Notes due 2009 of the Borrower, and including any first mortgage notes of the Borrower with substantially identical terms exchanged therefor pursuant to a registration statement under the Securities Act of 1933, as amended.

 

“ Fiscal Month ” means any fiscal month of a Fiscal Year.

 

“ Fiscal Quarter ” means a quarter ending on the last day of March, June, September or December of a Fiscal Year.

 

“ Fiscal Year ” means any period of twelve consecutive calendar months ending on December 31; references to a Fiscal Year with a number corresponding to any calendar year ( e.g. , “2002 Fiscal Year”) refer to the Fiscal Year ending on December 31 of such Fiscal Year.

 

“ Fixed Assets ” includes

 

(a) the equity interests of each of the Farmarkets Subsidiaries,

 

(b) the real property, buildings, structures and other improvements to any of the foregoing, of the Borrower and its Subsidiaries and to the extent any of the following items of property constitute fixtures and/or equipment under applicable laws, all fixtures, fittings, appliances, apparatus, equipment, machinery, building and construction

 

18

materials and other articles of every kind and nature whatsoever and all replacements thereof, now or hereafter affixed or attached to, placed upon or used in any way in connection with the complete and comfortable use, enjoyment, occupation, operation, development and/or maintenance of the real property of the Borrower or such Subsidiary or such buildings. structures and other improvements and

 

(c) any general intangibles or other rights (including contract rights and intellectual property) directly relating to the use and possession of any of the foregoing.

 

“ Fixed Charge Coverage Ratio ” means, at the close of any Fiscal Quarter, the ratio computed for the period consisting of such Fiscal Quarter and each of the three immediately prior Fiscal Quarters of:

 

(a) EBITDA for all such Fiscal Quarters,

 

less

 

(b) the sum of Capital Expenditures for all such Fiscal Quarters (excluding to the extent included, Capital Expenditures incurred in part or in whole by payment of the purchase price with respect to a Permitted Acquisition),

 

less

 

(c) the sum of Taxes paid in cash by the Borrower and the Co-Borrowers for all such Fiscal Quarters,

 

to

 

(d) the sum of Interest Expense and Long Term Debt Payments paid in cash for all such Fiscal Quarters.

 

“ Foreign Subsidiary ” means a Subsidiary of the Borrower that is not a Subsidiary incorporated or organized in or under the laws of the United States or any State thereof.

 

“ F.R.S. Board ” means the Board of Governors of the Federal Reserve System or any successor thereto.

 

“ GAAP ” is defined in Section 1.4 .

 

“ Governmental Authority ” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

 

“ Great Plains Indebtedness ” means the indebtedness of the Borrower to Great Plains Funding Corporation under the Form of Debt Agreement approved by the

 

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Required Lenders under the Original Credit Agreement, whereby the Borrower or one or more of the Co-Borrowers will borrow money on an unsecured basis, up to an aggregate amount outstanding not to exceed $45,000,000, to facilitate the purchase of goods from Monsanto Company.

 

“ Hazardous Material ” means

 

(a) any “hazardous substance” as defined by CERCLA; or

 

(b) any “hazardous waste” as defined by the Resource Conservation and Recovery Act, as amended; or

 

(c) any pollutant or contaminant or hazardous or toxic chemical, material or substance (including any petroleum product) within the meaning of any other applicable federal, state or local law, regulation, ordinance or requirement (including consent decrees and administrative orders) relating to or imposing liability or standards of conduct concerning any hazardous or toxic waste, substance or material, all as amended.

 

“ Hedging Obligations ” means, with respect to any Person, all liabilities of such Person under currency exchange agreements, interest rate swap agreements, interest rate cap agreements and interest rate collar agreements, Commodity Hedging Agreements, and all other agreements or arrangements designed to protect such Person against fluctuations in interest rates, currency exchange rates or commodity prices.

 

“ herein ”, “hereof ’, “ hereto ”, “ hereunder ” and similar terms contained in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular Section, paragraph or provision of this Agreement or such other Loan Document.

 

“ Immaterial Subsidiary ” means any Subsidiary of the Borrower which

 

(a) is restricted, pursuant to its Organic Documents, from executing the Subsidiary Guaranty and

 

(b) (i) accounted for less than 5% of EBITDA of the Borrower and its Subsidiaries on a consolidated basis for the most recently completed Fiscal Quarter with respect to which, pursuant to Section 7.1.1 , financial statements have been, or are required to have been, delivered by the Borrower on or before the date as of which any such determination is made, as reflected in such financial statements, and (ii) has assets which represent less than 5% of the consolidated gross assets of the Borrower and its Subsidiaries as of the last day of the most recently completed Fiscal Quarter with respect to which, pursuant to Section 7.1.1 , financial statements have been, or are required to have been, delivered by the Borrower on or before the date as of which any such determination is made, as reflected in such financial statements.

 

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“ Impermissible Qualification ” means, relative to the opinion or certification of any independent public accountant as to any financial statement of any Obligor, any qualification or exception to such opinion or certification

 

(a) which is of a “going concern” or similar nature,

 

(b) which relates to the limited scope of examination of matters relevant to such financial statement, or

 

(c) which relates to the treatment or classification of any item in such financial statement and which, as a condition to its removal, would require an adjustment to such item the effect of which would be to cause such Obligor to be in default of any of its obligations under Section 7.2.4 .

 

“ including ” and “ include ” mean including without limiting the generality of any description preceding such term, and, for purposes of this Agreement and each other Loan Document, the parties hereto agree that the rule of ejusdem generis shall not be applicable to limit a general statement, which is followed by or referable to an enumeration of specific matters, to matters similar to the matters specifically mentioned.

 

“ Incur ” is defined in Section 7.2.2 .

 

“ Indebtedness ” of any Person means, without duplication:

 

(a) all obligations of such Person incurred in connection with obtaining goods or materials, all obligations of such Person for borrowed money or advances and all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;

 

(b) all obligations, contingent or otherwise, relative to the face amount of all letters of credit, whether or not drawn, and banker’s acceptances issued for the account of such Person;

 

(c) all Capitalized Lease Liabilities of such Person;

 

(d) net liabilities of such Person under all Hedging Obligations;

 

(e) whether or not so included as liabilities in accordance with GAAP, all Indebtedness of the types referred to in clauses (a ) through (c) above (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including Indebtedness arising under conditional sales or other title retention agreements), whether or not such Indebtedness shall have been assumed by such Person or is limited in recourse; provided , however , that, to the extent such Indebtedness is limited in recourse to the assets securing such Indebtedness, the amount of such Indebtedness shall be limited to the fair market value of such assets;

 

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(f) all obligations arising under Synthetic Leases; and

 

(g) all Contingent Liabilities of such Person in respect of any of the foregoing.

 

For all purposes of this Agreement, the Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership or joint venture in which such Person is a general partner or a joint venturer) to the extent such Person is liable for such Indebtedness as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. Commencing as of January 1, 2003, for the purposes of determining compliance with Section 7.2.4 of the Credit Agreement, Financial Covenants, and notwithstanding the definition of any of the terms used therein, or the definition of any of the terms used in such definitions, and so forth, to the extent that the Borrower or a Co-Borrower is not obligated to pay interest on the Great Plains Indebtedness or that obligation to pay interest has been accepted by an unrelated third party,

 

(a) the term Indebtedness shall not include the Great Plains Indebtedness, and

 

(b) non-cash interest expense imputed to the Great Plains Indebtedness in accordance with GAAP will be excluded from interest expense.

 

“ Indemnified Liabilities ” is defined in Section 10.4 .

 

“ Indemnified Parties ” is defined in Section 10.4 .

 

“ Interest Coverage Ratio ” means, at the close of any Fiscal Quarter, the ratio computed for the period consisting of such Fiscal Quarter and each of the three immediately prior Fiscal Quarters of:

 

(a) EBITDA for all such Fiscal Quarters

 

to

 

(b) the sum of Interest Expense paid in cash for all such Fiscal Quarters.

 

“ Interest Expense ” means, for any applicable period, the aggregate interest expense of the Borrower and the Co-Borrowers for such applicable period, as determined in accordance with GAAP, including the portion of any payments made in respect of Capitalized Lease Liabilities allocable to interest expense.

 

“ Interest Period ” means, as to any LIBO Rate Loan, the period commencing on (and including) the Borrowing date of such Loan or on the date on which the Loan is converted into or continued as a LIBO Rate Loan, and ending on (but excluding) the

 

22

date one, two, three, six or twelve months, or, if available in the Agent’s reasonable determination, two weeks thereafter as selected by the Borrower in its Borrowing Request or its Continuation/Conversion Notice; provided , however , that: (i) if any Interest Period would otherwise end on a day that is not a Business Day, that Interest Period shall be extended to the following Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the preceding Business Day; (ii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; (iii) no Interest Period for any Loan shall extend beyond the Stated Maturity Date for such Loan; and (iv) there shall be no more than 5 Interest Periods in effect at any one time.

 

“ Inventory ” means, any “inventory” (as that term is defined in Section 9-102 of the UCC) of the Borrower or any Co-Borrower.

 

“ Inventory Agent ” means any commission agent, third-party warehouseperson or consigning agent which holds Inventory owned by the Borrower or any Co-Borrower for sale at such consigning agent’s place of business.

 

“ Investment ” means, relative to any Person,

 

(a) any loan or advance made by such Person to any other Person (excluding commission, travel, relocation and similar advances to officers, directors and employees made in the ordinary course of business) or

 

(b) any investment, contribution or similar transfer made by such Person for purposes of acquiring or maintaining any ownership or similar interest in another Person or a business of another Person (whether through the ownership or acquisition of Capital Stock, revenues or profits or otherwise, including by way of merger, consolidation or otherwise). The amount of any Investment shall be the original principal or capital amount thereof less all returns of principal or equity thereon (and without adjustment by reason of the financial condition of such other Person) and shall, if made by the transfer or exchange of property other than cash, be deemed to have been made in an original principal or capital amount equal to the fair market value of such property at the time of such transfer or exchange.

 

“ Issuance Request ” means a Letter of Credit request and certificate duly executed by an Authorized Officer of the Borrower, in substantially the form of Exhibit B-2 attached hereto.

 

“ Issuer ” means the Agent or an affiliate of the Agent, in its capacity as Issuer of Letters of Credit and any other Lender as may be designated by the Borrower (and consented to by the Agent and such Lender, such consent by the Agent not to be unreasonably withheld) in its capacity as Issuer of Letters of Credit.

 

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“ Joint Marketing Agreement ” means a long term joint marketing relationship between the Borrower and a third party vendor (the “ Joint Marketing Vendor ”) of the Borrower which may include, among other things, potential incentive payments to the Borrower in an aggregate amount of up to $20,000,000.

 

“ Lender Assignment Agreement ” means a Lender Assignment Agreement substantially in the form of Exhibit H hereto.

 

“ Lenders ” is defined in the preamble .

 

“ Letter of Credit ” is defined in Section 2.1.1 .

 

“ Letter of Credit Commitment ” means, with respect to the Issuer, the Issuer’s obligation to issue Letters of Credit pursuant to clause (c) of Section 2.1.1 and, with respect to each of the other Lenders that has a Revolving Loan Commitment, the obligation of each such Lender to participate in such Letters of Credit pursuant to Section 2.6.1 .

 

“ Letter of Credit Commitment Amount ” means, on any date, a maximum amount of $20,000,000, as such amount may be reduced from time to time pursuant to Section 2.2 .

 

“ Letter of Credit Outstandings ” means, on any date, an amount equal to the sum of

 

(a) the then aggregate amount which is undrawn and available under all issued and outstanding Letters of Credit (whether or not the conditions to drawing thereunder could be satisfied on such date),

 

plus

 

(b) the then aggregate amount of all unpaid and outstanding Reimbursement Obligations in respect of such Letters of Credit.

 

“ LIBO Rate ” means, relative to any Interest Period for LIBO Rate Loans, the rate per annum equal to the LIBOR rate quoted by the Agent from Telerate Page 3750 or any successor thereto, which shall be the LIBOR rate in effect two Business Days prior to the beginning of such Interest Period for delivery on the first day of such Interest Period, and in an amount approximately equal to the amount of the LIBO Rate Loan and for a period approximately equal to such Interest Period.

 

“ LIBO Rate Loan ” means a Loan bearing interest, at all times during an Interest Period applicable to such Loan, at a fixed rate of interest determined by reference to the LIBO Rate (Reserve Adjusted).

 

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“ LIBO Rate (Reserve Adjusted) ” means, relative to any Loan to be made, continued or maintained as, or converted into, a LIBO Rate Loan for any Interest Period, the rate of interest per annum (rounded upwards to the next 1/16 ^th of 1%) determined by the Agent as follows:

 

 

The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate Loans will be adjusted automatically as to all LIBO Rate Loans then outstanding as of the effective date of any change in the LIBOR Reserve Percentage.

 

“ LIBOR Office ” means, relative to any Lender, the office of such Lender designated as such on Schedule II-2 hereto or designated in the Lender Assignment Agreement pursuant to which such Lender became a Lender hereunder or such other office of a Lender as shall be so designated from time to time by notice from such Lender to the Borrower and the Agent, which shall be making or maintaining LIBO Rate Loans of such Lender hereunder.

 

“ LIBOR Reserve Percentage ” means, relative to any Interest Period for LIBO Rate Loans, the percentage (expressed as a decimal, rounded upward to the next 1/16 ^th of 1%) in effect on such day (whether or not applicable to any Lender) under regulations issued from time to time by the F.R.S. Board for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the F.R.S. Board).

 

“ Lien ” means any security interest, mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), charge against or interest in property, or any filing or recording of any instrument or document in respect of the foregoing, to secure payment of a debt or performance of an obligation or any other priority or preferential treatment of any kind or nature whatsoever that has the practical effect of creating a security interest in property.

 

“ Loan ” means, as the context may require, a Revolving Loan of any type or a Swing Line Loan.

 

“ Loan Document ” means this Agreement, the Notes, the Letters of Credit, each Bank Products Agreement, each Borrowing Request, each Issuance Request, each Borrowing Base Certificate, the Agent’s Fee Letter, the Parent Guaranty and Pledge Agreement, the Subsidiary Guaranty, the Borrower Pledge and Security Agreement, the Subsidiary Pledge and Security Agreement, and all Supplements thereto, and each other agreement, document or instrument delivered in connection with this Agreement or any other Loan Document, whether or not specifically mentioned herein or therein (including, as applicable, the Original Credit Agreement).

 

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“ Long Term Debt Payments ” means, all scheduled or unscheduled principal payments on all long term Debt of Borrower and the Co-Borrowers for borrowed money or advances and all Debt of Borrower and the Co-Borrowers evidenced by bonds, debentures, notes, or other similar instruments, and all long term payments on Capitalized Leases and Synthetic Leases, but excluding the Revolving Loans and the Swing Line Loans and excluding prepayments of the Debt due under the First Mortgage Notes to the extent prepaid out of the proceeds of Indebtedness permitted by clause (o) of Section 7.2.2 .

 

“ Marketable Securities ” means “marketable securities” as defined under GAAP.

 

“ Material Adverse Effect ” means

 

(a) a material adverse effect on the business, condition (financial or otherwise), operations, performance, properties or prospects of the Borrower and its Subsidiaries, taken as a whole,

 

(b) a material impairment of the ability of the Borrower or any other Obligor to perform its respective material obligations under the Loan Documents to which it is or will be a party, or

 

(c) an impairment of the validity or enforceability of, or a material impairment of the rights, remedies or benefits available to the Issuer, the Agent or the Lenders under, this Agreement or any other Loan Document.

 

“ Monthly Payment Date ” means the first day of each Fiscal Month, or, if any such day is not a Business Day, the next succeeding Business Day.

 

“ Moody’s ” means Moody’s Investors Service, Inc.

 

“ Net Asset Value ” means, at any time of any determination thereof:

 

(a) with respect to Accounts, as reflected on the books of the Borrower and the Co-Borrowers in accordance with GAAP, an amount equal to (i) 80% of the book value of all Eligible Accounts which are Regular Accounts (provided that during the months of September, October and November (the “ Seasonal Period ”) the advance rate shall be 85%), plus (ii) 70% of all Eligible Accounts which are Crop Term Accounts ( provided that (A) the advance rate during the Seasonal Period shall be 75% and (B) the aggregate amount of such Crop Term Accounts shall be limited, before applying the relevant advance rate, to $100,000,000), less (iii) all credits, discounts, allowances (and net of all unissued credits in the form of competitive allowances or otherwise) and other reserves deemed appropriate by the Agent; and

 

(b) with respect to Inventory, as reflected on the books of the Borrower and the Co-Borrowers in accordance with GAAP, an amount equal to (i) 65% of the lesser of the market value and the cost of goods (determined on a first-in, first-out basis) of all

 

26

Eligible Inventory ( provided , that the advance rate during the Seasonal Period shall be 70%); less (ii) all Customer Deposits and inventory reserves, including reserves for inventory shrinkage, variances, capitalized distribution costs, and other reserves as deemed appropriate by the Agent; and

 

(c) Provided , however , the advance rates with respect to Inventory under the preceding subsection (b) will be adjusted to reflect the lower of such advance rates or 85% outside of the Seasonal Period and 95% during the Seasonal Period of Net Orderly Liquidation Value. Net Orderly Liquidation Value shall mean such amount that is determined from time to time in accordance with the methodology of the net orderly liquidation value of Eligible Inventory as calculated by an appraisal dated 10/17/03, prepared for the Lenders by Hilco Appraisal Services, LLC, or any subsequent appraisal using similar methodology and prepared by an appraiser satisfactory to the Collateral Agents, with such adjustments for the quantity and composition of the Eligible Inventory as determined from time to time by the Collateral Agents.

 

“ Net Casualty Proceeds ” means, with respect to any Casualty Event, the amount of any insurance proceeds or condemnation awards received by the Borrower or any Co-Borrower in connection therewith, but excluding any proceeds or awards required to be paid to a creditor (other than the Lenders) which holds a first-priority Lien permitted by Section 7.2.3 on the property which is the subject of such Casualty Event.

 

“ Net Debt Proceeds ” means, with respect to the incurrence, sale or issuance by the Borrower or any Co-Borrower of any Debt (other than Debt permitted by Section 7.2.2 ), the excess of:

 

(a) the gross cash proceeds received by the Borrower or any Co-Borrower from such incurrence, sale or issuance, less

 

(b) all reasonable and customary underwriting commissions and legal, investment banking, brokerage and accounting and other professional fees, sales commissions and disbursements and all other reasonable fees, expenses and charges, in each case actually incurred in connection with such incurrence, sale or issuance.

 

“ Net Disposition Proceeds ” means, with respect to any Disposition (other than transfers made as part of sales permitted pursuant to clause (a) of Section 7.2.9 ), the excess of

 

(a) the gross cash proceeds received by the Borrower or any Co-Borrower from any such Disposition and any cash payments received in respect of promissory notes or other non-cash consideration delivered to the Borrower or such Co-Borrower in respect thereof, less

 

(b) the sum (without duplication) of (i) all reasonable and customary fees and expenses with respect to legal, investment banking, brokerage, accounting and other professional fees, sales commissions and disbursements and all other reasonable fees,

 

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expenses and charges, in each case actually incurred in connection with such Disposition, (ii) all Taxes and other governmental costs and expenses actually paid or estimated by the Borrower and the Co-Borrowers (in good faith) to be payable in cash in connection with such Disposition, and (iii) payments made by the Borrower and the Co-Borrowers to retire Indebtedness (other than the Credit Extensions) of the Borrower or the Co-Borrowers where payment of such Indebtedness is required in connection with such disposition; provided , however , that if, after the payment of all Taxes with respect to such Disposition, the amount of estimated Taxes, if any, pursuant to clause (b)(ii) above exceeded the Tax amount actually paid in cash in respect of such Disposition, the aggregate amount of such excess shall be immediately payable, pursuant to clause (d) of Section 3.1.1 , as Net Disposition Proceeds.

 

“ Net Equity Proceeds ” means with respect to the sale or issuance by the Borrower or any Co-Borrower to any Person of any of its Capital Stock or any warrants or options with respect to its Capital Stock or the exercise of any such warrants or options after the Closing Date, the excess of

 

(a) the gross cash proceeds received by such Person from such sale, exercise or issuance,

 

less

 

(b) all reasonable and customary underwriting commissions and legal, investment banking, brokerage, accounting and other professional fees, sales commissions and disbursements and all other reasonable fees, expenses and charges, in each case actually incurred in connection with such sale or issuance.

 

“ Net Income ” means, for any period, the aggregate of all amounts which, in accordance with GAAP, would be included as net income on the consolidated financial statements of the Borrower and the Co-Borrowers for such period.

 

“ Net Worth ” means the consolidated net worth of the Borrower and the Co-Borrowers, determined in accordance with GAAP.

 

“ No Less Favorable Terms and Conditions ” means, with respect to any refinancing of the First Mortgage Notes, permitted hereunder, terms and conditions which are no less favorable to the Agent and the Lenders and evidenced by documentation which shall not

 

(a) increase the principal amount of or interest rate on the outstanding Indebtedness evidenced by the First Mortgage Notes,

 

(b) reduce either the tenor or the average life of such Indebtedness,

 

(c) change the respective primary obligor(s) on the refinancing Indebtedness as on the First Mortgage Notes,

 

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(d) change the security, if any, for the refinancing Indebtedness (except to the extent that less security is granted to holders of such refinancing Indebtedness) and

 

(e) afford the holders of such refinancing Indebtedness other covenants, defaults, rights or remedies, taken as a whole, more burdensome to the obligor(s) than those contained in the First Mortgage Notes.

 

“ Non-Excluded Taxes ” means any Taxes other than net income and franchise taxes imposed with respect to the Lender by a Governmental Authority under the laws of which the Lender is organized or in which it maintains its applicable lending office.

 

“ Non-U.S. Lender ” means any Lender (including each Assignee Lender) that is not a “United States person”, as defined under Section 7701(a)(30) of the Code.

 

“ Note ” means, as the context may require, a Revolving Note or a Swing Line Note.

 

“ Notice of Default ” is defined in Section 9.9 .

 

“ Obligations ” means all obligations (monetary or otherwise, whether absolute or contingent, matured or unmatured, including, without limitation, interest and fees) of the Borrower and each other Obligor arising under or in connection with this Agreement and each other Loan Document, including Bank Products Obligations.

 

“ Obligor ” means Parent, the Borrower, each Co-Borrower or any other Person (other than the Agent, the Collateral Agents or any Lender) obligated under any Loan Document.

 

“ Offering Memorandum ” means the offering memorandum of the Borrower, dated April 15, 1999, prepared in connection with the offer and sale of the First Mortgage Notes.

 

“ Organic Document ” means, relative to any Obligor (or any Immaterial Subsidiary), as applicable, its certificate of incorporation, by-laws, certificate of partnership, partnership agreement, certificate of formation, limited liability, agreement and all shareholder agreements, voting trusts and similar arrangements to which such Obligor (or such Immaterial Subsidiary) is a party applicable to any of its authorized shares of Capital Stock.

 

“ Other Taxes ” means any and all stamp, documentary or similar taxes, or any other excise or property taxes or similar levies that arise on account of any payment made or required to be made under any Loan Document or from the execution, delivery, registration, recording or enforcement of any Loan Document.

 

“ Original Credit Agreement ” is defined in the preamble .

 

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“ Parent ” is defined in the first recital .

 

“ Parent Guaranty and Pledge Agreement ” means the Pledge Agreement executed and delivered by an Authorized Officer of Parent pursuant to the Original Credit Agreement, substantially in the form of Exhibit F-1 hereto, as amended, supplemented, amended and restated or otherwise modified from time to time.

 

“ Participant ” is defined in Section 10.11.2 .

 

“ Past Due ” means, which respect to

 

(a) Regular Accounts, such Account is outstanding more than 90 days past the original billing date for such Account; and

 

(b) Crop Term Accounts, such Account is outstanding after the end of the Crop Year in which such Account arose;

 

provided , however , that, with respect to any Account, the original billing date for such Account shall be deemed to be the earlier of (i) the actual original billing date and (ii) the date which is seven days from the date of the shipment of the Inventory giving rise to such Account.

 

“ PBGC ” means the Pension Benefit Guaranty Corporation and any entity succeeding to any or all of its functions under ERISA.

 

“ Pension Plan ” means a “pension plan”, as such term is defined in section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a multiemployer plan as defined in section 4001(a)(3) of ERISA), and to which the Borrower or any corporation, trade or business that is, along with the Borrower, a member of a Controlled Group, may have liability, including any liability by reason of having been a substantial employer within the meaning of section 4063 of ERISA at any time during the preceding five years, or by reason of being deemed to be a contributing sponsor under section 4069 of ERISA.

 

“ Percentage ” means, relative to any Lender, the applicable percentage relating to Revolving Loans as set forth opposite its name on Schedule II-2 hereto under the applicable column heading or set forth in Lender Assignment Agreement(s), as such percentage may be adjusted from time to time pursuant to Lender Assignment Agreement(s) executed by such Lender and its Assignee Lender(s) and delivered pursuant to Section 10.11 .

 

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“ Permitted Acquisition ” means an acquisition (whether pursuant to an acquisition of Capital Stock, assets or otherwise) by the Borrower or any Co-Borrower from any Person that is the voluntary seller of a business (“ Target ”) in which the following conditions are satisfied:

 

(a) immediately before and after giving effect to such acquisition, no Default or Event of Default shall have occurred and be continuing or would result therefrom (including under Section 7.2.1 ) and immediately before such acquisition Excess Availability shall not be less than $25,000,000;

 

(b) subject to the proviso below, the Borrower shall have delivered each of the following to the Agent: (i) a Compliance Certificate for the period of four full Fiscal Quarters immediately preceding such acquisition (prepared in good faith and in a manner and using such methodology which is consistent with the most recent financial statements delivered pursuant to Section 7.1.1 ) giving pro forma effect to the consummation of such acquisition and evidencing compliance with the covenants set forth in Section 7.2.4 as of the end of the Fiscal Quarter most recently ended for which a Compliance Certificate is delivered by the Borrower to the Agent; (ii) a certificate (prepared in good faith by the chief accounting or financial Authorized Officer of the Borrower and in a manner and using such methodology which is consistent with the most recent financial projections delivered pursuant to clause (i) of Section 7.1.1 ) setting forth financial projections (which shall be on a monthly basis for the first 24 months following such Permitted Acquisition and on a yearly basis thereafter) for the Borrower and the Co-Borrowers (and including Target), on a consolidated basis, demonstrating that the monthly Excess Availability shall not, at any time over the life of this Agreement, be less than $25,000,000; and (iii) at the option of the Agent or upon the direction of the Required Lenders, a customary inspection of Target’s receivables and inventory (the “ Acquired Borrowing Base Assets ”) (which shall have been commenced, if at all, within 20 Business Days of the Borrower notifying the Agent and the Lenders of the intended acquisition (which notice shall be given as promptly as possible) and completed by the Collateral Agents as soon as reasonably practicable using all reasonable efforts to complete such inspection promptly in accordance with past practices, the scope and results of which inspection shall be satisfactory in all respects to the Agent to the extent necessary to determine compliance with clause (ii) above; provided , that, with respect to clauses (ii) and (iii) above, the Borrower shall only be required to deliver such certificate and such inspection from time to time to the extent (A) the value of any Acquired Borrowing Base Assets acquired in connection with any one Investment or a series of related or unrelated Investments constituting Permitted Acquisitions equals or exceeds $5,000,000 (and, thereafter, in increments of $5,000,000 or more) and (B) an inspection of such Acquired Borrowing Base Assets shall not have previously been completed (either pursuant to clause (iii) above or in connection with a customary yearly inspection performed by the Agent under the Original Credit Agreement or by the Collateral Agents under this Agreement);

 

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(c) notwithstanding clause (a ) of Section 7.2.12 , the Borrower will cause Target (if Target becomes a Restricted Subsidiary) to enter into an agreement (on terms and conditions and pursuant to documentation reasonably satisfactory to the Agent) prohibiting the creation or assumption of any Lien upon Target’s properties, revenues or assets, whether owned at the time of such acquisition or thereafter acquired (other than any Lien (i) created in favor of the Agent pursuant to a Loan Document and (ii) permitted under Section 7.2.3 ); and

 

(d) for purposes of determining whether Borrower and Co-Borrowers (including Target) have met the Excess Availability test in clause (a) and clause (b) of this definition and to the extent that more than $5,000,000 of such Excess Availability is derived from Accounts and Inventory of the Target, then such Accounts and Inventory of the Target shall have been inspected and/or examined by the Collateral Agents and determined by the Collateral Agents to be satisfactory in all respects to the extent necessary to determine compliance with these provisions.

 

“ Person ” means any natural person, corporation, partnership, firm, association, trust, government, governmental agency, limited liability company or any other entity, whether acting in an individual, fiduciary or other capacity.

 

“ Plan ” means any Pension Plan or Welfare Plan.

 

“ Pledge Agreement ” means, as the context may require, any Pledge and Security Agreement or the Parent Guaranty and Pledge Agreement.

 

“ Pledge and Security Agreement ” means, as the context may require, the Borrower Pledge and Security Agreement or the Subsidiary Pledge and Security Agreement.

 

“ Prepaid Inventory ” means prepaid expenses of the Borrower or any Co-Borrower for which the Borrower or such CoBorrower has made payments to suppliers for the receipt of Inventory at a future date.

 

“ Pro Forma Balance Sheet ” is defined in clause (e) of Section 5.1.13 .

 

“ Product Supply Agreement ” means the product supply agreements, each dated as of April 22, 1999, between the IMC Kalium Ltd., IMC-Agrico Company and the Borrower, as amended, supplemented, amended and restated and otherwise modified from time to time in accordance with Section 7.2.10 .

 

“ Purchasing Lender ” is defined in clause (e) of Section 2.8 .

 

“ Quarterly Payment Date ” means the first day of each of January, April, July and October, or, if any such day is not a Business Day, the next succeeding Business Day.

 

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“ Rate Protection Agreement ” means, collectively, any currency or interest rate swap, cap, collar or similar agreement or arrangements designed to protect against fluctuations in interest rates or currency exchange rates entered into by the Borrower or any Co-Borrower under which the counterparty to such agreement is (or at the time such Rate Protection Agreement was entered into, was) a Lender or an Affiliate of a Lender.

 

“ Rebate Receivables ” means those rights to payment associated with vendor rebate programs, which rights of payment accrue to the Borrower or any Co-Borrower.

 

“ Register ” is defined in clause (b) of Section 2.7 .

 

“ Regular Accounts ” means Accounts as to which the Borrower or any Co-Borrower grants 30 day payment terms to the Account Debtor.

 

“ Reimbursement Obligation ” is defined in Section 2.6.3 .

 

“ Reinstatement Date ” is defined in Section 4.1 .

 

“ Related Fund ” means, with respect to any Lender which is a fund that invests in loans, any other fund that invests in loans and is controlled by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

 

“ Release ” means a “ release ”, as such term is defined in CERCLA.

 

“ Replacement Lender ” is defined in Section 4.11 .

 

“ Replacement Notice ” is defined in Section 4.11 .

 

“ Required Lenders ” means, at any time, Lenders having at least 51% of the Revolving Loan Commitment Amount.

 

“ Resource Conservation and Recovery Act ” means the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., as amended.

 

“ Restricted Payment ” means the declaration or payment of any dividend (other than dividends payable solely in common stock of the Borrower or any Co-Borrower) on, or the making of any payment or distribution on account of, or setting apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of any class of Capital Stock (now or hereafter outstanding) of the Borrower or any Co-Borrower or any warrants or options to purchase any such Capital Stock, whether now or hereafter outstanding, or the making of any other distribution in respect thereof, either directly or indirectly, whether in cash, property or obligations of the Borrower or any Co-Borrower or otherwise.

 

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“ Restricted Subsidiary ” means any Subsidiary of the Borrower that is not a Farmarkets Subsidiary or an Immaterial Subsidiary.

 

“ Revolving Loan ” is defined in Section 2.1.1 .

 

“ Revolving Loan Commitment ” is defined in Section 2.1.1 .

 

“ Revolving Loan Commitment Amount ” means, on any date, $225,000,000, as such amount may be reduced from time to time pursuant to Section 2.2 .

 

“ Revolving Loan Commitment Termination Date ” means the earliest of

 

(a) the Stated Maturity Date,

 

(b) the date on which the Revolving Loan Commitment Amount is reduced to zero pursuant to Section 2.2.1 , and

 

(c) the date on which any Commitment Termination Event occurs.

 

“ Revolving Note ” means a promissory note of the Borrower and the Co-Borrowers payable to any Lender, substantially in the form of Exhibit A-1-2 hereto (as such promissory note may be amended, endorsed or otherwise modified from time to time in accordance with the terms hereof and thereof), evidencing the aggregate Indebtedness of the Borrower and the Co-Borrowers to such Lender resulting from outstanding Revolving Loans, and also means all other promissory notes accepted from time to time in substitution therefor or renewal thereof.

 

“ S&P ” means Standard & Poor’s Ratings Services.

 

“ Seasonal Period ” is defined in clause (a) of the definition of “Net Asset Value”.

 

“ Secured Parties ” means, collectively, the Lenders, the Issuer, the Agent, each counterparty to a Bank Products Agreement and (in each case), each of their respective successors, transferees and assigns.

 

“ Seller Notes ” means the non-cash pay junior subordinated notes issued by Parent on or about the date of the Original Credit Agreement, with an original aggregate outstanding principal amount equal to $10,000,000 and payable to IMC Global, Inc., a Delaware corporation.

 

“ Selling Lender ” is defined in clause (e) of Section 2.8 .

 

“ Senior Indebtedness ” means the principal of, premium, if any, and interest on any Indebtedness of the Borrower and the Co-Borrowers, whether outstanding on the date hereof or thereafter incurred as permitted herein, unless, in the case of any particular Indebtedness, the agreement or instrument creating or evidencing the same

 

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or pursuant to which the same is outstanding expressly provides that such Indebtedness is junior or subordinated in right of payment to any item of Indebtedness of the Borrower and the Co-Borrowers. Without limiting the generality of the foregoing, “Senior Indebtedness” includes the principal of, premium, if any, and interest and all other obligations of every nature of the Borrower (or any other Obligor) from time to time owed pursuant to this Agreement or any other Loan Document. Notwithstanding the foregoing, “Senior Indebtedness” does not include

 

(a) any liability for Taxes owed or owing by the Borrower or any Co-Borrower to the extent that such liability constitutes Indebtedness,

 

(b) Indebtedness of the Borrower (or any other Obligor) to Parent,

 

(c) that portion of any Indebtedness which at the time of issuance is issued in violation hereof, and

 

(d) Indebtedness and amounts incurred in connection with obtaining goods or materials in the ordinary course of business (other than such Indebtedness which is owed to banks and other financial institutions or secured by the goods or materials which were purchased with such Indebtedness).

 

“ Solvency Certificate ” means the solvency certificate delivered pursuant to clause (b) of Section 5.1.10 , substantially in the form of Exhibit J-2 hereto.

 

“ Solvent ” means, with respect to any Person and its Subsidiaries on a particular date, that on such date

 

(a) the fair value of the property of such Person and its Subsidiaries on a consolidated basis is greater than the total amount of liabilities, including Contingent Liabilities, of such Person and its Subsidiaries on a consolidated basis,

 

(b) the present fair salable value of the assets of such Person and its Subsidiaries on a consolidated basis, is not less than the amount that will be required to pay the probable liability of such Person and its Subsidiaries on a consolidated basis on its debts as they become absolute and matured,

 

(c) such Person does not intend to, and does not believe that it or its Subsidiaries will, incur debts or liabilities beyond the ability of such Person and its Subsidiaries to pay as such debts and liabilities mature, and

 

(d) such Person and its Subsidiaries on a consolidated basis are not engaged in business or a transaction, and such Persons and its Subsidiaries on a consolidated basis are not about to engage in business or a transaction, for which the property of such Person and its Subsidiaries would constitute an unreasonably small capital. The amount of Contingent Liabilities at any time shall be computed as the amount that, in light of all the facts and circumstances existing at such time, can reasonably be expected to become an actual or matured liability.

 

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“ Stated Amount ” of each Letter of Credit means the total amount available to be drawn under such Letter of Credit upon the issuance thereof.

 

“ Stated Expiry Date ” is defined in Section 2.6 .

 

“ Stated Maturity Date ” means, in the case of any Revolving Loan, the third anniversary of the Closing Date or, if such day is not a Business Day, the first Business Day following such day.

 

“ Subject Lender ” is defined in Section 4.11 .

 

“ Subordinated Debt ” means all unsecured indebtedness for money borrowed which is subordinated, upon terms and pursuant to documentation satisfactory to the Agent and the Required Lenders, in right of payment to the payment in full in cash of all Obligations.

 

“ Subsidiary ” means, with respect to any Person, any corporation, partnership or other business entity of which more than 50% of the outstanding Capital Stock (or other ownership interest) having ordinary voting power to elect a majority of the board of directors, managers or other voting members of the governing body of such entity (irrespective of whether at the time Capital Stock (or other ownership interests) of any other class or classes of such entity shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more other Subsidiaries of such Person, or by one or more other Subsidiaries of such Person.

 

“ Subsidiary Guaranty ” means the Guaranty executed and delivered by an Authorized Officer of each Co-Borrower pursuant to the Original Credit Agreement, substantially in the form of Exhibit G hereto, as amended, supplemented, amended and restated or otherwise modified from time to time.

 

“ Subsidiary, Pledge and Security Agreement ” means the Pledge Agreement executed and delivered by an Authorized Officer of each Co-Borrower pursuant to the Original Credit Agreement, substantially in the form of Exhibit F-3 hereto, as amended, supplemented, amended and restated or otherwise modified from time to time.

 

“ Swing Line Lender ” means the Agent (or another Lender designated by the Agent with the consent of the Borrower, if such Lender agrees to be the Swing Line Lender hereunder), in such Person’s capacity as the maker of Swing Line Loans.

 

“ Swing Line Loan ” is defined in Section 2.1.1 .

 

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“ Swing Line Loan Commitment ” means, with respect to the Swing Line Lender, the Swing Line Lender’s obligation pursuant to Section 2.1.1 to make Swing Line Loans and, with respect to each Lender with a Commitment to make Revolving Loans (other than the Swing Line Lender), such Lender’s obligation to participate in Swing Line Loans pursuant to Section 2.3.2 .

 

“ Swing Line Loan Commitment Amount ” means, on any date, $25,000,000, as such amount may be reduced from time to time pursuant to Section 2.2 .

 

“ Swing Line Note ” means a promissory note of the Borrower and the Co-Borrowers payable to the Swing Line Lender, in substantially the form of Exhibit A-2-2 hereto (as such promissory note may be amended, endorsed or otherwise modified from time to time), evidencing the aggregate Indebtedness of the Borrower and the Co-Borrowers to the Swing Line Lender resulting from outstanding Swing Line Loans, and also means all other promissory notes accepted from time to time in substitution therefor or renewal thereof.

 

“ Synthetic Lease ” means, as applied to any Person, any lease (including leases that may be terminated by the lessee at any time) of any property (whether real, personal or mixed)

 

(a) that is not a capital lease in accordance with GAAP and

 

(b) in respect of which the lessee retains or obtains ownership of the property so leased for federal income tax purposes, other than any such lease under which that Person is the lessor.

 

“ Tangible Net Worth ” means Net Worth (i) excluding the portions derived from tax assets, net of deferred tax liabilities and (ii) excluding goodwill and non-cash impairment charges.

 

“ Target ” is defined in the definition of “Permitted Acquisition”.

 

“ Taxes ” means any and all income, stamp or other taxes, duties, levies, imposts, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, and all interest, penalties or similar liabilities with respect thereto.

 

“ Termination Date ” means the date on which all Obligations have been paid in full in cash, all Letters of Credit have been terminated, expired or Cash Collateralized, all Bank Products Agreements have been terminated and all Commitments have been terminated.

 

“ type ” means, relative to any Revolving Loan, the portion thereof, if any, being maintained as a Base Rate Loan or a LIBO Rate Loan.

 

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“ UCC ” means the Uniform Commercial Code as adopted and in effect from time to time in the State of New York or, with respect to Filing Statements, the Uniform Commercial Code as adopted and in effect from time to time in each applicable jurisdiction of the United States.

 

“ United States ” or “ U.S. ” means the United States of America, its fifty States and the District of Columbia.

 

“ Vendor Debt ” means a loan by the Joint Marketing Vendor to the Borrower in the amount of up to $10,000,000 (subject to the restrictions set forth in Section 7.2.2(o)), as set forth in written agreements and related documents reasonably satisfactory to the Collateral Agents (including subordination or intercreditor agreements as may be reasonably required by the Collateral Agents).

 

“ Waiver ” means any agreement in favor of the Agent for the benefit of the Lenders and each Issuer in form and substance reasonably satisfactory to the Agent.

 

“ Welfare Plan ” means a “welfare plan”, as such term is defined in section 3(1) of ERISA.

 

“ wholly-owned Subsidiary ” means, with respect to any Person, any Subsidiary of such Person all of the Capital Stock (including all rights and options to purchase such Capital Stock) of which, other than directors’ qualifying shares, are owned, beneficially and of record, by such Person and/or one or more wholly-owned Subsidiaries of such Person.

 

1.2 Use of Defined Terms . Unless otherwise defined or the context otherwise requires, terms for which meanings are provided in this Agreement shall have such meanings when used in the Disclosure Schedule, each Loan Document, notice and other communication delivered from time to time in connection with this Agreement or any other Loan Document.

 

1.3 Cross-References . Unless otherwise specified, references in this Agreement and in- each other Loan Document to any Article or Section are references to such Article or Section of this Agreement or such other Loan Document, as the case may be, and, unless otherwise specified, references in any Article, Section or definition to any clause are references to such clause of such Article, Section or definition.

 

1.4 Accounting and Financial Determinations . Unless otherwise specified, all accounting terms used herein or in any other Loan Document shall be interpreted, all accounting determinations and computations hereunder or thereunder (including under Section 7.2.4 ) shall be made, and all financial statements required to be delivered hereunder or thereunder shall be prepared in accordance with, those generally accepted accounting principles (“ GAAP ”) applied in the preparation of the financial statements referred to in Section 5.1.13 . Unless otherwise expressly provided, all financial covenants and defined financial terms shall be computed on a consolidated

 

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basis for the Borrower and the Co-Borrowers, in each case without duplication. If any changes in accounting principles are hereafter required or permitted by GAAP and are adopted by the Borrower and the Co-Borrowers with the concurrence of its independent certified public accountants and such changes in GAAP result in a change in the method of calculation or the interpretation of any of the financial covenants, standards or terms found in Section 7.2.4 or any other provision of this Agreement, the Borrower, the Co-Borrowers and the Required Lenders agree to amend any such affected terms and provisions so as to reflect such changes in GAAP with the result that the criteria for evaluating the Borrower’s and the Co-Borrower’s financial condition shall be the same after such changes in GAAP as if such changes in GAAP had not been made.

 

ARTICLE II

COMMITMENTS, BORROWING PROCEDURES,

NOTES AND LETTERS OF CREDIT

 

2.1 Commitments . On the terms and subject to the conditions of this Agreement,

 

(a) each Lender severally agrees to make Revolving Loans (other than Swing Line Loans) pursuant to the Revolving Loan Commitment, and the Swing Line Lender agrees to make Swing Line Loans pursuant to the Swing Line Loan Commitment, in each case as described in this Section 2.1 ; and

 

(b) the Issuer agrees that it will issue Letters of Credit pursuant to Section 2.1.1 , and each other Lender that has a Revolving Loan Commitment severally agrees that it will purchase participation interests in such Letters of Credit pursuant to Section 2.6.1 .

 

2.1.1 Credit Extensions . Subject to compliance by the Borrower and the Co-Borrowers with the terms hereof, from time to time on any Business Day occurring from and after the Closing Date but prior to the Revolving Loan Commitment Termination Date:

 

(a) each Lender will make loans (relative to such Lender, its “ Revolving Loans ”) to the Borrower (for itself and as agent for the Co-Borrowers) equal to such Lender’s Percentage of the aggregate amount of the Borrowing or Borrowings of Revolving Loans requested by the Borrower to be made on such day. On the terms and subject to the conditions set forth herein, the Borrower may from time to time borrow, prepay and reborrow Revolving Loans. The Commitment of each Lender described in this Section 2.1.1 is herein referred to as its “ Revolving Loan Commitment ”;

 

(b) the Swing Line Lender will make Loans (relative to the Swing Line Lender, its “ Swing Line Loans ”) to the Borrower (for itself and as agent for the Co-Borrowers) equal to the principal amount of the Swing Line Loans requested by the Borrower to be made on such day. On the terms and subject to the conditions hereof, the Borrower may from time to time borrow, prepay and reborrow such Swing Line Loans;

 

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(c) the Issuer has issued standby letters of credit under the Original Credit Agreement (listed under Item 7.2.2(c) in the Disclosure Statement), and will issue one or more standby letters of credit (each referred to as a “ Letter of Credit ”) for the account of the Borrower or any Co-Borrower in the Stated Amount requested by the Borrower on such day, or extend the Stated Expiry Date of an existing standby Letter of Credit previously issued hereunder to a date not later than the earlier of (i) the Revolving Loan Commitment Termination Date and (ii) one year from the date of such extension.

 

2.1.2 Lenders Not Permitted or Required to Make Loans . Except as provided for in clause (g) of Section 10.1 , no Lender shall be permitted or required to, and the Borrower shall not request any Lender to, make any Revolving Loan or Swing Line Loan if, after giving effect thereto, the aggregate outstanding principal amount of all the Revolving Loans and Swing Line Loans

 

(a) of all the Lenders, together with the aggregate amount of all Letter of Credit Outstandings, would exceed the lesser of (i) the Revolving Loan Commitment Amount and (ii) the then existing Borrowing Base Amount;

 

(b) of such Lender (other than the Swing Line Lender), together with such Lender’s Percentage of the aggregate amount of all Letter of Credit Outstandings, would exceed such Lender’s Percentage of the lesser of (i) the Revolving Loan Commitment Amount and (ii) the then existing Borrowing Base Amount; or

 

(c) in the case of Swing Line Loans, if after giving effect to the making of such Swing Line Loan, the outstanding principal amount of all Swing Line Loans would exceed the then existing Swing Line Loan Commitment Amount.

 

2.1.3 Issuer Not Permitted or Required to Issue Letters of Credit . Except as provided for in clause (g) of Section 10.1 , no Issuer shall be permitted or required to issue any Letter of Credit if, after giving effect thereto,

 

(a) the aggregate amount of all Letter of Credit Outstandings would exceed the Letter of Credit Commitment Amount or

 

(b) the sum of the aggregate amount of all Letter of Credit Outstandings plus the aggregate principal amount of all Revolving Loans and Swing Line Loans then outstanding would exceed the lesser of (i) the Revolving Loan Commitment Amount and (ii) the then existing Borrowing Base Amount.

 

2.2 Reduction of Commitment Amounts . The Commitment Amounts are subject to reduction from time to time pursuant to this Section 2.2 .

 

2.2.1 Optional . The Borrower may, from time to time on any Business Day occurring after the Closing Date, voluntarily reduce the Swing Line Loan Commitment Amount, the Letter of Credit Commitment Amount or the Revolving Loan Commitment

 

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Amount; provided , however , that all such reductions shall require at least five Business Days’ prior notice to the Agent and be permanent, and any partial reduction of any Commitment Amount shall be in a minimum amount of $5,000,000 and in an integral multiple of $1,000,000. Any reduction of the Revolving Loan Commitment Amount which reduces the Revolving Loan Commitment Amount below the sum of

 

(a) the Letter of Credit Commitment Amount and

 

(b) the Swing Line Loan Commitment Amount shall result in an automatic and corresponding reduction of the Letter of Credit Commitment Amount and/or the Swing Line Loan Commitment Amount (as specified by the Borrower) to an aggregate amount not in excess of the Revolving Loan Commitment Amount, as so reduced, without any further action on the part of the Issuer or the Swing Line Lender.

 

2.2.2 Mandatory . The Revolving Loan Commitment Amount shall, without any further action, automatically and permanently be reduced on the Revolving Loan Commitment Termination Date so that the Revolving Loan Commitment Amount equals $0, provided , that any such reduction of the Revolving Loan Commitment Amount shall also reduce the Letter of Credit Commitment Amount and the Swing Line Loan Commitment Amount to $0.

 

2.3 Borrowing Procedures and Funding Maintenance . Revolving Loans shall be made by the Lenders in accordance with Section 2.3.1 , and Swing Line Loans shall be made by the Swing Line Lender in accordance with Section 2.3.2 .

 

2.3.1 Revolving Loans . In the case of Revolving Loans, by delivering a Borrowing Request to the Agent on or before 11:00 a.m., Denver, Colorado time, on a Business Day, the Borrower may from time to time irrevocably request, on not less than one Business Day’s notice (in the case of Base Rate Loans) or three Business Days’ notice (in the case of LIBO Rate Loans), that a Borrowing be made in a minimum aggregate amount of $5,000,000 or any larger integral multiple of $1,000,000 or in the unused amount of the Revolving Loan Commitment Amount. The Agent shall make such funds available by transfer to or for the accounts of the Borrower on the Business Day specified in the Borrowing Request (to the extent such Borrowing Request was delivered on time pursuant to the terms hereof).

 

2.3.2 Swing Line Loans . By telephonic notice (given by those Persons authorized in writing by the Borrower to give such telephonic notice to the Swing Line Lender and Agent), promptly followed (within one Business Day) by the delivery of a confirming Borrowing Request, to the Swing Line Lender and the Agent on or before 11:00 a.m., Denver, Colorado time, on the Business Day the proposed Swing Line Loan is to be made, the Borrower may from time to time irrevocably request that a Swing Line Loan be made by the Swing Line Lender in any principal amount. All Swing Line Loans shall be made as Base Rate Loans and shall not be entitled to be converted into LIBO Rate Loans. The making of any such Swing Line Loan shall be conclusively presumed to have been made to or for the benefit of the Borrower and the Co-Borrowers when the

 

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Swing Line Lender and the Agent each believe in good faith that the telephonic notice has been made by an authorized Person representing the Borrower, or when such Swing Line Loan is deposited to the credit of the account of the Borrower regardless of the fact that Persons other than those authorized hereunder may have authority to draw against such account. The Agent shall make such funds available by transfer to or for the accounts of the Borrower on the same Business Day such telephonic notice shall have been received. Except during a Default Period, the Agent may, but without any obligation whatsoever, make a Swing Line Loan without a request from the Borrower, in an amount necessary to cover presentments made under controlled disbursement services provided by the Agent, and the making of any such Swing Line Loan shall be conclusively presumed to have been made to or for the benefit of the Borrower and the Co-Borrowers.

 

2.4 Continuation and Conversion Elections . By delivering a Continuation/Conversion Notice to the Agent on or before 11:00 a.m., Denver, Colorado time, on a Business Day, the Borrower may from time to time irrevocably elect, on not less than one Business Day’s notice (in the case of a conversion of LIBO Rate Loans to Base Rate Loans) or three Business Days’ notice (in the case of a continuation of LIBO Rate Loans or a conversion of Base Rate Loans into LIBO Rate Loans) nor more than five Business Days’ notice (in the case of any Loans) that all, or any portion in a minimum aggregate amount of $5,000,000 or an integral multiple of $1,000,000, of any Loans be, in the case of Base Rate Loans, converted into LIBO Rate Loans or, in the case of LIBO Rate Loans, converted into Base Rate Loans or continued as LIBO Rate Loans (in the absence of delivery of a Continuation/Conversion Notice with respect to any LIBO Rate Loan at least three Business Days (but not more than five Business Days) before the last day of the then current Interest Period with respect thereto, such LIBO Rate Loan shall, on such last day, automatically convert to a Base Rate Loan); provided , however , that (i) each such conversion or continuation shall be pro rated among the applicable outstanding Loans of all Lenders, and (ii) no portion of the outstanding principal amount of any Loans may be continued as, or be converted into, LIBO Rate Loans when any Default has occurred and is continuing.

 

2.5 Funding . Each Lender may, if it so elects, fulfill its obligation to make, continue or convert LIBO Rate Loans hereunder by causing one of its foreign branches or Affiliates (or an international banking facility created by such Lender) to make or maintain such LIBO Rate Loan; provided , however , that such LIBO Rate Loan shall nonetheless be deemed to have been made and to be held by such Lender, and the obligation of the Borrower and the Co-Borrowers to repay such LIBO Rate Loan shall nevertheless be to such Lender for the account of such foreign branch, Affiliate or international banking facility. In addition, the Borrower and the Co-Borrowers hereby consent and agree that, for purposes of any determination to be made for purposes of Sections 4.1 , 4.2 , 4.3 or 4.4 , it shall be conclusively assumed that each Lender elected to fund all LIBO Rate Loans by purchasing Dollar deposits in its LIBOR Office’s interbank Eurodollar market.

 

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2.6 Issuance Procedures . By delivering to the Agent an Issuance Request on or before 11:00 a.m., Denver, Colorado time, on a Business Day, the Borrower may, from time to time irrevocably request, on not less than three nor more than ten Business Days’ notice (or such shorter or longer notice as may be acceptable to the Issuer), in the case of an initial issuance of a Letter of Credit, and not less than three nor more than ten Business Days’ notice (unless a shorter or longer notice period is acceptable to the Issuer) prior to the then existing Stated Expiry Date of a Letter of Credit, in the case of a request for the extension of the Stated Expiry Date of a Letter of Credit, that the Issuer issue, or extend the Stated Expiry Date of, as the case may be, an irrevocable Letter of Credit on behalf of the Borrower (whether issued for the account of or on behalf of the Borrower or any Co-Borrower) in such form as may be requested by the Borrower and approved by the Issuer, for the purposes described in Section 7.1.8 ; provided , however , that no extension of the Stated Expiry Date of an outstanding Letter of Credit may provide for a Stated Expiry Date subsequent to the earlier of

 

(a) the Revolving Loan Commitment Termination Date and

 

(b) one year from the date of such extension.

 

Notwithstanding anything to the contrary contained herein or in any separate application for any Letter of Credit, the Borrower and the Co-Borrowers hereby acknowledge and agree that they shall be obligated to reimburse the Issuer upon each Disbursement paid under a Letter of Credit, and they shall be deemed to be the obligor for purposes of each such Letter of Credit issued hereunder (whether the account party on such Letter of Credit is the Borrower or a Co-Borrower). Upon receipt of an Issuance Request, the Agent shall promptly notify the Issuer and each Lender thereof. Each Letter of Credit shall by its terms be stated to expire on a date (its “ Stated Expiry Date ”) no later than the earlier to occur of

 

(a) the Revolving Loan Commitment Termination Date or

 

(b) one year from the date of its issuance.

 

2.6.1 Other Lenders’ Participation . Upon the issuance of each Letter of Credit issued by the Issuer pursuant hereto, and without further action, each Lender (other than the Issuer) that has a Revolving Loan Commitment shall be deemed to have irrevocably purchased from the Issuer, to the extent of its Percentage in respect of Revolving Loans, and the Issuer shall be deemed to have irrevocably granted and sold to such Lender a participation interest in such Letter of Credit (including the Contingent Liability and any Reimbursement Obligation and all rights with respect thereto), and such Lender shall, to the extent of its Percentage in respect of Revolving Loans, be responsible for reimbursing promptly (and in any event within one Business Day) the Issuer for Reimbursement Obligations which have not been reimbursed by the Borrower or the Co-Borrowers in accordance with Section 2.6.3 . In addition, such Lender shall, to the extent of its Percentage in respect of Revolving Loans, be entitled to promptly receive a ratable portion of the Letter of Credit fees payable pursuant to Section 3.3.3

 

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with respect to each Letter of Credit and of interest payable pursuant to Section 3.2 with respect to any Reimbursement Obligation. To the extent that any Lender has reimbursed the Issuer for a Disbursement as required by this Section, such Lender shall be entitled to receive its ratable portion of any amounts subsequently received (from the Borrower and the Co-Borrowers or otherwise) in respect of such Disbursement.

 

2.6.2 Disbursements: Conversion to Revolving Loans . The Issuer will notify the Borrower and the Agent promptly (but in any event on the same Business Day) of the presentment for payment of any drawing under any Letter of Credit issued by the Issuer, together with notice of the date (the “ Disbursement Date ”) such payment shall be made (each such payment, a “ Disbursement ”). Subject to the terms and provisions of such Letter of Credit, the Issuer shall make such payment to the beneficiary (or its designee) of such Letter of Credit. Prior to 11:00 a.m., Denver, Colorado time, on the Business Day following the Disbursement Date (the “ Disbursement Due Date ”), the Borrower and the Co-Borrowers will reimburse the Agent, for the account of the Issuer, for all amounts which the Issuer has disbursed under such Letter of Credit, together with interest thereon at the rate per annum otherwise applicable to Revolving Loans (made as Base Rate Loans) from and including the Disbursement Date to but excluding the Disbursement Due Date and, thereafter (unless such Disbursement is converted into a Base Rate Loan on the Disbursement Due Date), at a rate per annum equal to the rate per annum then in effect with respect to overdue Revolving Loans (made as Base Rate Loans) pursuant to Section 3.2.2 for the period from the Disbursement Due Date through but excluding the date of such reimbursement; provided , however , that if no Default shall have then occurred and be continuing, unless the Borrower has notified the Agent no later than one Business Day prior to the Disbursement Due Date that it or the Co-Borrowers will reimburse the Issuer for the applicable Disbursement, then the amount of the Disbursement shall be deemed to be a Borrowing of Revolving Loans constituting Base Rate Loans and following the giving of notice thereof by the Agent to the Lenders, each Lender with a Revolving Loan Commitment (other than the Issuer) will deliver to the Issuer on the Disbursement Due Date immediately available funds in an amount equal to such Lender’s Percentage of such Borrowing. Each conversion of Disbursement amounts into Revolving Loans shall constitute a representation and warranty by the Borrower that on the date of the making of such Revolving Loans all of the statements set forth in Section 5.2.1 are true and correct.

 

2.6.3 Reimbursement . The obligation (a “ Reimbursement Obligation ”) of the Borrower and the Co-Borrowers under Section 2.6.2 to reimburse the Issuer with respect to each Disbursement (including interest thereon) not converted into a Base Rate Loan pursuant to Section 2.6.2 , and, upon the Borrower and the Co-Borrowers failing or electing not to reimburse the Issuer and the giving of notice thereof by the Agent to the Lenders, each Lender’s (to the extent it has a Revolving Loan Commitment) obligation under Section 2.6.1 to reimburse the Issuer or find its Percentage of any Disbursement converted into a Base Rate Loan, shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment which the Borrower, a Co-Borrower or such Lender, as the case may be, may have or have had against the Issuer or any such

 

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Lender, including any defense based upon the failure of any Disbursement to conform to the terms of the applicable Letter of Credit (if, in the Issuer’s good faith opinion, such Disbursement is determined to be appropriate) or any non-application or misapplication by the beneficiary of the proceeds of such Letter of Credit; provided , however , that after paying in full its Reimbursement Obligation hereunder, nothing herein shall adversely affect the right of the Borrower, a Co-Borrower or such Lender, as the case may be, to commence any proceeding against the Issuer for any wrongful Disbursement made by the Issuer under a Letter of Credit as a result of acts or omissions constituting gross negligence or willful misconduct on the part of the Issuer.

 

2.6.4 Deemed Disbursements . Upon the occurrence and during the continuation of any Event of Default of the type described in clauses (a) through (d) of Section 8.1.9 or, with notice from the Agent acting at the direction of the Required Lenders, upon the occurrence and during the continuation of any other Event of Default,

 

(a) an amount equal to that portion of all Letter of Credit Outstandings attributable to the then aggregate amount which is undrawn and available under all Letters of Credit issued and outstanding shall, without demand upon or notice to the Borrower or any other Person, be deemed to have been paid or disbursed by the Issuer under such Letters of Credit (notwithstanding that such amount may not in fact have been so paid or disbursed); and

 

(b) the Borrower and the Co-Borrowers shall be immediately obligated to reimburse the Issuer for the amount deemed to have been so paid or disbursed by the Issuer, plus five percent (5%) of such amount to cover fees and expenses, if any, relating to the Letters of Credit.

 

Any amounts so payable by the Borrower and the Co-Borrowers pursuant to this Section shall be deposited in cash with the Agent into the accounts referred to in Section 7.1.9 and held as collateral security for the Obligations in connection with the Letters of Credit issued by the Issuer. At such time as the Events of Default giving rise to the deemed disbursements hereunder shall have been cured or waived, or any Letters of Credit shall have expired undrawn, the Agent shall apply the funds in the manner prescribed by the other Loan Documents (with reference to Collateral Accounts), together with accrued interest at the Federal Funds Rate, which have not been applied to the satisfaction of such Obligations.

 

2.6.5 Nature of Reimbursement Obligations . The Borrower and the Co-Borrowers and, to the extent set forth in Section 2.6.1 , each Lender with a Revolving Loan Commitment, shall assume all risks of the acts, omissions or misuse of any Letter of Credit by the beneficiary thereof. The Issuer (except to the extent of its own gross negligence or willful misconduct) shall not be responsible for

 

(a) the form, validity, sufficiency, accuracy, genuineness or legal effect of any Letter of Credit or any document submitted by any party in connection with the application for and issuance of a Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged,

 

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(b) the form, validity, sufficiency, accuracy, genuineness or legal effect of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or the proceeds thereof in whole or in part, which may prove to be invalid or ineffective for any reason,

 

(c) failure of the beneficiary to comply fully with conditions required in order to demand payment under a Letter of Credit,

 

(d) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, or

 

(e) any loss or delay in the transmission or otherwise of any document or draft required in order to make a Disbursement under a Letter of Credit.

 

None of the foregoing shall affect, impair or prevent the vesting of any of the rights or powers granted to the Issuer or any Lender with a Revolving Loan Commitment hereunder. In furtherance and extension and not in limitation or derogation of any of the foregoing, any action taken or omitted to be taken by the Issuer in good faith (and not constituting gross negligence or willful misconduct) shall be binding upon the Borrower, each Obligor and each such Lender, and shall not put the Issuer under any resulting liability to the Borrower, any Obligor or any such Lender, as the case may be.

 

2.7 Register; Notes .

 

(a) Each Lender may maintain in accordance with its usual practice an account or accounts evidencing the Indebtedness of the Borrower and the Co-Borrowers to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder. In the case of a Lender that does not request, pursuant to clause (c) below, execution and delivery of a Note evidencing the Loans made by such Lender to the Borrower and the Co-Borrowers, such account or accounts shall, to the extent not inconsistent with the notations made by the Agent in the Register, be conclusive and binding on the Borrower and the Co-Borrowers absent manifest error; provided , however , that the failure of any Lender to maintain such account or accounts shall not limit or otherwise affect any Obligations of the Borrower or any other Obligor.

 

(b) The Borrower hereby designates the Agent to serve as the Borrower’s agent, solely for the purpose of this clause (b) , to maintain a register (the “ Register ”) on which the Agent will record each Lender’s Commitment, the Loans made by each Lender and each repayment in respect of the principal amount of the Loans of each Lender and annexed to which the Agent shall retain a copy of each Lender Assignment Agreement delivered to the Agent pursuant to Section 10.11.1 . Failure to make any

 

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recordation, or any error in such recordation, shall not affect the Borrower’s and the Co-Borrower’s obligations in respect of such Loans. The entries in the Register shall be conclusive, in the absence of manifest error, and the Borrower, the Co-Borrowers, the Agent and the Lenders shall treat each Person in whose name a Loan (and as provided in clause (c) the Note evidencing such Loan, if any) is registered as the owner thereof for all purposes of this Agreement, notwithstanding notice or any provision herein to the contrary. A Lender’s Commitment and the Loans made pursuant thereto may be assigned or otherwise transferred in whole or in part only by registration of such assignment or transfer in the Register. Any assignment or transfer of a Lender’s Commitment or the Loans made pursuant thereto shall be registered in the Register only upon delivery to the Agent of a Lender Assignment Agreement duly executed by the Assignor Lender thereof. No assignment or transfer of a Lender’s Commitment or the Loans made pursuant thereto shall be effective unless such assignment or transfer shall have been recorded in the Register by the Agent as provided in this Section 2.7 .

 

(c) The Borrower and the Co-Borrowers agree that, upon the written request to the Agent by any Lender, the Borrower and the Co-Borrowers will execute and deliver to such Lender, as applicable, a Note evidencing the Loans made by such Lender. The Borrower and the Co-Borrowers hereby irrevocably authorize each Lender to make (or cause to be made) appropriate notations on the grid attached to such Lender’s Notes (or on any continuation of such grid), w