SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
- ------- SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
- ------- SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____.
Commission File Number: 0-25360
AG-CHEM EQUIPMENT CO., INC.
(Exact Name of Registrant as Specified in Its Charter)
Minnesota 41-0872842
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
5720 Smetana Drive
Minnetonka, Minnesota 55343-9688
(Address of Principal Executive Offices)
(952) 933-9006
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act during
the past 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
__X__ Yes ____ No
As of April 30, 2000, there were outstanding 9,579,868 shares of the
issuers' Common Stock, $.01 par value per share.
<PAGE>
TABLE OF CONTENTS
Page
----
PART I
ITEM 1. FINANCIAL STATEMENTS............................................2
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.................9
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.....12
PART II
ITEM 1. LEGAL PROCEEDINGS..............................................13
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS..........13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K...............................13
SIGNATURES ...............................................................14
EXHIBITS ...............................................................15
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
AG-CHEM EQUIPMENT CO., INC. AND SUBSIDIARIES
(Dollars in Thousands)
<TABLE>
<CAPTION>
(UNAUDITED)
- -----------------------------------------------------------------------------------------------
March 31, September 30,
ASSETS 2000 1999
------ ------------ ------------
<S> <C> <C>
CURRENT ASSETS:
Accounts receivable, less allowance for
doubtful accounts of $977 and $874, respectively $ 31,178 $ 18,922
Notes receivable, current portion, and
accrued interest receivable 3,441 5,296
Inventories (note 2) 91,519 109,463
Deferred income tax benefits 5,695 4,400
Prepaid expenses and other current assets 357 628
------------ ------------
Total current assets 132,190 138,709
------------ ------------
PROPERTY, PLANT AND EQUIPMENT, NET OF ACCUMULATED
DEPRECIATION OF $43,628 AND $42,235, RESPECTIVELY 40,405 42,470
OTHER ASSETS:
Notes receivable, long-term portion 2,835 7,046
Intangible and other assets, net of accumulated
amortization of $4,577 and $4,142, respectively 3,126 1,704
------------ ------------
Total other assets 5,961 8,750
------------ ------------
Total assets $ 178,556 $ 189,929
============ ============
</TABLE>
SEE ACCOMPANYING CONDENSED NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS.
2
<PAGE>
CONSOLIDATED BALANCE SHEETS
AG-CHEM EQUIPMENT CO., INC. AND SUBSIDIARIES
(Dollars in Thousands)
<TABLE>
<CAPTION>
(UNAUDITED)
- ---------------------------------------------------------------------------------------------
March 31, September 30,
LIABILITIES AND STOCKHOLDERS' EQUITY 2000 1999
------------------------------------ ------------ ------------
<S> <C> <C>
CURRENT LIABILITIES:
Current installments of long-term debt $ 6,097 $ 6,381
Notes payable to banks 23,419 35,225
Accounts payable 22,556 10,859
Checks outstanding in excess of cash balances 40 138
Customer prepayments 4,427 5,183
Accrued expenses (note 3) 16,662 13,262
Deferred income 1,788 1,359
Accrued income taxes 4,554 ---
------------ ------------
Total current liabilities 79,543 72,407
------------ ------------
LONG-TERM DEBT, LESS CURRENT INSTALLMENTS 20,922 44,299
------------ ------------
Total liabilities 100,465 116,706
------------ ------------
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value
Authorized, 40,000,000 shares; issued and
outstanding, 9,579,868 and 9,595,468 shares 96 96
Additional paid-in capital 1,143 1,274
Retained earnings 77,178 72,318
Accumulated other comprehensive loss (326) (465)
------------ ------------
Total stockholders' equity 78,091 73,223
------------ ------------
Total liabilities and stockholders' equity $ 178,556 $ 189,929
============ ============
</TABLE>
SEE ACCOMPANYING CONDENSED NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS.
3
<PAGE>
CONSOLIDATED STATEMENTS OF EARNINGS
AG-CHEM EQUIPMENT CO., INC. AND SUBSIDIARIES
(Dollars in Thousands except Per Share Amounts)
<TABLE>
<CAPTION>
(UNAUDITED)
- -----------------------------------------------------------------------------------------------------------------------
Three Months Ended March 31, Six Months Ended March 31,
--------------------------------- ---------------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales $ 118,074 $ 110,995 $ 176,782 $ 164,657
Cost of sales 89,623 80,089 134,245 118,141
------------ ------------ ------------ ------------
Gross profit 28,451 30,906 42,537 46,516
Selling, general and administrative
expenses 17,909 18,803 34,128 34,824
------------ ------------ ------------ ------------
Operating income 10,542 12,103 8,409 11,692
------------ ------------ ------------ ------------
Other income (expense):
Other income 1,426 1,044 2,163 1,972
Interest expense (1,202) (1,411) (2,980) (2,496)
------------ ------------ ------------ ------------
Earnings before income taxes 10,766 11,736 7,592 11,168
Income tax expense 3,883 4,231 2,733 4,020
------------ ------------ ------------ ------------
Net earnings $ 6,883 $ 7,505 $ 4,859 $ 7,148
============ ============ ============ ============
Basic and diluted earnings per
share $ 0.72 $ 0.78 $ 0.51 $ 0.74
============ ============ ============ ============
Weighted average common shares
outstanding, basic and diluted 9,580 9,626 9,586 9,633
============ ============ ============ ============
</TABLE>
SEE ACCOMPANYING CONDENSED NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS.
4
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
AG-CHEM EQUIPMENT CO., INC. AND SUBSIDIARIES
(Dollars in Thousands)
<TABLE>
<CAPTION>
(UNAUDITED)
- --------------------------------------------------------------------------------------------------
Six Months ended March 31,
---------------------------------
2000 1999
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 4,859 $ 7,148
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 2,029 2,662
Gain on sale of assets (55) (163)
Increase (decrease) in deferred income tax benefits (1,295) 100
Changes in operating assets and liabilities:
Accounts receivable (12,256) (4,317)
Operating notes receivable 6,066 (1,091)
Inventories 17,944 (1,026)
Other current assets 271 177
Accounts payable 11,697 2,152
Customer prepayments and deferred income (327) 1,340
Accrued expenses 3,400 766
Income taxes 4,554 3,542
------------ ------------
Cash provided by operating activities 36,887 11,290
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (3,367) (801)
Decrease in rental equipment 3,834 556
Proceeds from sale of equipment 59 198
Increase in other assets (1,856) (165)
------------ ------------
Cash used in investing activities (1,330) (212)
------------ ------------
</TABLE>
(CONTINUED ON NEXT PAGE)
SEE ACCOMPANYING CONDENSED NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS.
5
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
AG-CHEM EQUIPMENT CO., INC. AND SUBSIDIARIES
(Dollars in Thousands)
<TABLE>
<CAPTION>
(UNAUDITED)
- -------------------------------------------------------------------------------------------
Six months ended March 31,
---------------------------------
2000 1999
------------ ------------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in checks outstanding in excess of
cash balances (98) (1,821)
Proceeds from notes payable - banks 77,400 49,850
Repayments of notes payable - banks (89,206) (57,587)
Proceeds from long-term borrowings 9,500 90,000
Repayments of long-term borrowings (33,161) (91,266)
Purchase of common stock (131) (271)
------------ ------------
Cash used in financing activities (35,696) (11,095)
------------ ------------
Foreign currency translation adjustment 139 17
------------ ------------
Increase in cash --- ---
Cash at beginning of period --- ---
------------ ------------
Cash at end of period $ --- $ ---
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Interest $ 1,021 $ 1,878
Income taxes $ --- $ 483
</TABLE>
SEE ACCOMPANYING CONDENSED NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS.
6
<PAGE>
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AG-CHEM EQUIPMENT CO., INC. AND SUBSIDIARIES
(Dollars in Thousands)
(UNAUDITED)
- --------------------------------------------------------------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited interim consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions in Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included. For
further information, refer to the consolidated financial statements and
footnotes thereto for the year ended September 30, 1999 included in the
Company's annual report on Form 10-K. Results of the interim periods are not
necessarily indicative of the results for an entire year.
(2) INVENTORIES
Inventories consist of the following:
March 31, September 30,
2000 1999
-------- ---------
Finished goods $ 28,889 $ 45,033
Resale parts 26,681 25,815
Work in process and raw materials 37,545 36,330
-------- ---------
Total 93,115 107,178
Less LIFO reserve (12,841) (12,077)
-------- ---------
Total 80,274 95,101
Used equipment 11,245 14,362
-------- ---------
Total inventories $ 91,519 $ 109,463
======== =========
If the first in, first out (FIFO) method utilizing current costs had been
used for inventories valued using the LIFO method, net earnings before tax would
have been higher by $545 at March 31, 2000 and $71 at September 30, 1999.
7
<PAGE>
(3) ACCRUED EXPENSES
Accrued expenses consist of the following:
March 31, September 30,
2000 1999
------- -------
Compensation $ 5,465 $ 6,471
Warranty 1,984 1,165
Taxes other than income 1,635 897
Insurance 2,570 1,784
Interest 1,021 1,253
Other 3,987 1,692
------- -------
Total $16,662 $13,262
======= =======
(4) COMPREHENSIVE INCOME
Comprehensive income and its components, including all changes in equity
during a period except those resulting from repurchase of the Company's stock,
investments by owners or distributions to owners are as follows:
<TABLE>
<CAPTION>
Three Months Ended March 31, Six Months Ended March 31,
---------------------------- --------------------------
2000 1999 2000 1999
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net earnings $6,883 $7,505 $4,859 $7,148
Other comprehensive income:
Foreign currency translation
adjustment 378 17 354 17
------ ------ ------ ------
Total comprehensive income $7,261 $7,522 $5,213 $7,165
====== ====== ====== ======
</TABLE>
(5) NOTES PAYABLE TO BANKS
The terms of the Company's amended credit line agreement include
covenants that the Company must maintain. There are a number of standard
affirmative covenants, as well as restrictive negative covenants as to
additional borrowings and requirements for the Company to maintain certain
financial ratios. These restrictive covenants include a minimum tangible net
worth of $57,500 plus 50% of each fiscal year's net earnings, a ratio of total
liabilities to tangible net worth, and an interest coverage ratio. There are
additional limitations on mergers, acquisitions, disposal of assets, and capital
expenditures. The Company was in violation of certain of these covenants as of
March 31, 2000, however, the credit line agreement has been amended and the
Company obtained waivers of the events of default and is now in compliance.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
RESULTS OF OPERATIONS - THREE-MONTH PERIOD ENDED MARCH 31, 2000 COMPARED TO
THREE-MONTH PERIOD ENDED MARCH 31, 1999
Consolidated net sales increased by $7,079 or 6.4% in the three-month
period ended March 31, 2000 from the three-month period ended March 31, 1999.
The increase was primarily the result of increases in post-emergence equipment
unit shipments. The increase was largely due to the success of the Company's new
1254 RoGator, which the Company first sold in the second half of fiscal 1999.
Used equipment sales also increased significantly in the quarter. These
increases were partially offset by a decrease in sales of pre-emergence
equipment. As a result of the recession in the agricultural economy, customers
are holding on to equipment longer. The Company expects competition to continue
to be a factor and is uncertain about the impact on future net sales and product
mix. Additionally, the farm supply industry is experiencing consolidation which
has reduced capital purchases, with a resulting decrease in the demand for
equipment in the short-term. The Company anticipates that once the consolidation
slows and the economy improves, customers will resume capital purchases at a
level comparable to prior periods.
Consolidated gross profit for the three-month period ended March 31,
2000 decreased $2,455 or 7.9% as compared to the prior-year period. Consolidated
gross profit as a percent of net sales was 24.1% and 27.8% for the three-month
periods ended March 31, 2000 and 1999, respectively. The decrease in gross
profit as a percentage of net sales was primarily the result of changes in
product mix and reduced margins on the sale of prior-year models and an increase
in warranty expense in the three months ending March 31, 2000 compared to the
prior-year period.
Consolidated selling, general and administrative ("S,G&A") expenses
decreased $894 or 4.8% in the three-month period ended March 31, 2000 as
compared to the prior-year period. Compensation, employee benefits and
employee-related expenses decreased 2.4% or $322. The largest factor
contributing to this decrease was a reduction of 6.8% or $493 in salary expense
due to reduced headcount. This decrease was partially offset by 25.8% or $154
increase in health benefit costs. All other S,G&A expenses decreased by 10.6% or
$572. S,G&A expenses as a percent of net sales were 19.3% and 21.1% in the
three-month periods ended March 31, 2000 and 1999, respectively. The Company
expects that its efforts to contain such costs will hold annual S,G&A expenses
relatively stable as a percentage of sales during the remainder of fiscal 2000.
As a result of the above, operating income was $10,542 and $12,103 in
the three-month periods ended March 31, 2000 and 1999, respectively.
Other income increased 36.6% or $382 to $1,426 in the three-month
period ended March 31, 2000 as compared to the prior-year three-month period.
This increase is primarily the result of income from the Company's joint
ventures. These joint ventures are new this fiscal year and contributed $850 to
other income in the three-month period ending March 31, 2000. This increase was
partially offset by $208 in unfavorable foreign currency transaction adjustments
and a decrease of interest income by $199. During the three month period ended
December 31, 1999, the Company sold a portion of its notes receivable without
recourse to a third party in an effort to reduce working capital requirements
resulting in reduced interest income in the current three-month period. The
foreign currency adjustment is largely the result of the increasing value of the
U.S. dollar relative to the Euro.
9
<PAGE>
Interest expense decreased 14.8% to $1,202 in the three-month period
ended March 31, 2000 as compared to the prior-year three-month period. This
decrease is the result of reduced debt in the three-months ended March 31, 2000
compared to the prior year-period. This decrease was partially offset by higher
interest rates during the three months ending March 31, 2000 compared to the
prior-year period. The Company decreased its debt during the current period and
expects to keep borrowings below last year's level, but believes that interest
rates will continue to be higher than the prior year.
The effective tax rate in the three-month periods ended March 31, 2000
and 1999 remained at 36.0%.
As a result of the above, the net earnings was $6,883 and $7,505 in the
three-month periods ended March 31, 2000 and 1999, respectively. Earnings per
share was $.72 and $.78 for such periods.
RESULTS OF OPERATIONS - SIX-MONTH PERIOD ENDED MARCH 31, 2000 COMPARED TO
SIX-MONTH PERIOD ENDED MARCH 31, 1999
Consolidated net sales increased by $12,125 or 7.4% in the six-month
period ended March 31, 2000 from the six-month period ended March 31, 1999. The
increase was primarily the result of increases in post-emergence equipment unit
shipments. This increase was partially offset by a decrease in pre-emergence
equipment sales. The conditions contributing to these differences are the same
as those discussed for the three-month period ended March 31, 2000.
Consolidated gross profit for the six-month period ended March 31, 2000
decreased $3,979 or 8.6% as compared to the prior-year period. Consolidated
gross profit as a percent of net sales was 24.1% and 28.3% for the six-month
periods ended March 31, 2000 and 1999, respectively. The decrease in gross
profit as a percentage of net sales was primarily the result of changes in
product mix, reduced margins on prior-year models and an increase in warranty
expense in the six-months ending March 31, 2000 compared to the prior-year
period. The inventory of prior year models was significantly reduced in the
first half of fiscal 2000.
Consolidated selling, general and administrative ("S,G&A") expenses
decreased $696 or 2.0% in the six-month period ended March 31, 2000 as compared
to the prior-year period. Salary expense was down 3.8% or $525 during the
six-months ended March 31, 2000 compared to the prior-year period. This
reduction was primarily due to fewer employees resulting from the Company's cost
containment measures. This decrease was offset by an increase of 33.8% or $406
in health insurance costs and 21.6% or $350 in contract and temporary employee
expense. The increase in contract and temporary employee expense is primarily
related to the development of the SGIS Data Management Software Version 3.0
which is scheduled for release during the Company's third quarter. The Company
expects to see a reduction in contract employee expense in future quarters. All
other S,G&A expenses were down 5.1% or $925 during the six-months ended March
31, 2000 compared to the prior-year period. These decreases were the result of
the Company's continued efforts to reduce costs. S,G&A expenses as a percent of
net sales were 19.3% and 21.1% in the six-month periods ended March 31, 2000 and
1999, respectively. The Company expects that its efforts to contain such costs
will hold annual S,G&A expenses relatively stable as a percentage of net sales
compared to previous periods depending on sales during the remainder of fiscal
2000.
Because of the above, operating income was $8,409 and $11,692 in the
six-month periods ended March 31, 2000 and 1999, respectively.
Other income increased 9.7% to $2,163 in the six-month period ended
March 31, 2000 as compared to the prior-year six-month period.
10
<PAGE>
Interest expense increased 19.4% to $2,980 in the six-month period
ended March 31, 2000 as compared to the prior-year six-month period. The
increase was the result of increased borrowings during the quarter and higher
interest rates.
The effective tax rate in the six-month periods ended March 31, 2000
and 1999 remained at 36.0%.
Because of the above, net earnings were $4,859 and $7,148 in the
six-month periods ended March 31, 2000 and 1999, respectively. Earnings per
share were $.51 and $.74 for such periods.
LIQUIDITY AND FINANCIAL POSITION - SIX-MONTH PERIOD ENDED MARCH 31, 2000
COMPARED TO SIX-MONTH PERIOD ENDED MARCH 31, 1999
Net cash provided by operating activities increased to $36,887 in the
six-month period ended March 31, 2000, compared to $11,290 in the six-month
period ended March 31, 1999. The major reason for this change was an increase in
cash provided by operating assets and liabilities to $31,349 from $1,543 in the
six-month periods ended March 31, 2000 and 1999, respectively. Inventories,
together with increased accounts payable balances, provided cash of $29,641
compared to $1,126 during the six-months ended March 31, 2000 and 1999,
respectively. Inventories decreased to $91,519 at March 31, 2000 from $109,463
at September 30, 1999 compared to an increase of $1,026 during the prior-year
period. The decrease was the result of the company's efforts to reduce
inventories by better matching its production schedule to sales. The Company
expects cash will continue to be provided by operating activities through net
earnings, and this cash will be used to satisfy the current portion of long-term
debt. Accounts receivable turnover has remained relatively stable in recent
periods, and has not significantly affected liquidity.
Cash used in investing activities in the six-month period ended March
31, 2000 was $1,330 compared to $212 in the prior-year period. This increase in
cash used was primarily due to increased investment in plant and equipment
during the period ended March 31, 2000 as the Company's European subsidiary
purchased the manufacturing facility it had previously been leasing.
Cash used in financing activities was $35,696 in the six-month period
ended March 31, 2000, compared to $11,095 in the prior-year period. The increase
in cash used in financing activities was primarily the result of the net
repayments of notes payable and long-term borrowings of $35,467 during the
six-month period ended March 31, 2000, compared to $9,003 during the six-month
period ended March 31, 1999. This increase in net repayments was primarily due
to decreased working capital requirements as compared to the prior year.
Working capital at March 31, 2000 was $52,647. As of March 31, 2000,
the Company had $51,657 of unused credit line available. The Company
periodically receives prepayments from customers to secure either more favorable
pricing or a desired delivery date. If the Company did not receive customer
prepayments, it believes its line of credit would provide sufficient liquidity
to meet working capital requirements.
The terms of the Company's amended credit line agreement include
covenants that the Company must maintain. There are a number of standard
affirmative covenants, as well as restrictive negative covenants as to
additional borrowings and requirements for the Company to maintain certain
financial ratios. These restrictive covenants include a minimum tangible net
worth of $57,500 plus 50% of each fiscal year's net earnings, a ratio of total
liabilities to tangible net worth, and an interest coverage ratio. There are
additional limitations on mergers, acquisitions, disposal of assets, and capital
expenditures. The Company was in violation of certain of these covenants as of
March 31, 2000, however, the credit line agreement has since been amended and
the Company obtained waivers of the events of default and is now in compliance.
The Company does not anticipate any difficulty in meeting these covenants in
future quarters.
FORWARD-LOOKING STATEMENTS
11
<PAGE>
Certain information included in this Report is "forward looking" within
the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements can be identified by the use of words such as "will,"
"intends," "expects," "should," and similar language. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the Company,
or industry results, to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. This includes factors that affect all businesses, as well as matters
specific to the Company and markets it serves. A more complete discussion of
such factors is included in the Company's Form 10-K for the year-ended September
30, 1999.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to market risk from changes in interest rates
and foreign currency exchange rates. Changes in these factors could cause
fluctuations in the Company's earnings and cash flows. The Company's risk to
interest rate and foreign currency exchange rate fluctuations has not materially
changed since September 30, 1999.
12
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Reference is made to the Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1999 on file with the Securities and Exchange
Commission. During the quarter ended March 31, 2000, the Company was not a party
to any newly initiated material legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
At the Annual Meeting of Shareholders held on March 6, 2000, certain
matters were submitted to the shareholders for their approval as set forth in
the Company's Proxy Statement dated February 13, 2000, previously filed with the
Securities and Exchange Commission.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
See the index to exhibits immediately preceding the exhibits filed
with this report.
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter for which
this report was filed.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AG-CHEM EQUIPMENT CO., INC.
Date: May 15, 2000 By: /s/ Alvin E. McQuinn
--------------------
Alvin E. McQuinn
Its: Chief Executive Officer
Date: May 15, 2000 By: /s/ John C. Retherford
----------------------
John C. Retherford
Its: Chief Financial Officer
14
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NO. TITLE
- ----------- -----
10.19 Waiver and Amendment No. 2 To Third Amended and Restated Long
Term Revolving Credit Agreement and Short Term Revolving Credit
Agreement among Ag-Chem Equipment Co., Inc., The Institutions,
From Time to Time Hereto, as Lenders, and the Agent dated as of
May 15, 2000
10.20 Collateral Sharing Agreement dated as of May 15, 2000
10.21 Security Agreement between Ag-Chem Equipment Co., Inc. and Bank
One, NA dated as of May 15, 2000
10.22 Guarantor Security Agreement between Ag-Chem Sales Co., Inc. and
Bank One, NA dated as of May 15, 2000
10.23 Guarantor Security Agreement between Lor*al Products, Inc. and
Bank One, NA dated as of May 15, 2000
10.24 Guarantor Security Agreement between Ag-Chem Manufacturing Co.,
Inc. and Bank One, NA dated as of May 15, 2000
10.25 Guarantor Security Agreement between Ag-Chem Equipment Canada,
Ltd. and Bank One, NA dated as of May 15, 2000
10.26 Waiver dated May 15, 2000, by C.M. Mutual Life Insurance Company
of certain defaults under Exact Title of Agreement dated
April 6, 1994
10.27 Waiver dated May 15, 2000, by The Prudential Insurance Company
of America of certain defaults under Exact Title of Agreement
dated October 10, 1995
27 Financial Data Schedule
15
EXHIBIT 10.19
WAIVER AND AMENDMENT NO. 2
TO
THIRD AMENDED AND RESTATED
LONG TERM REVOLVING CREDIT AGREEMENT
AND
SHORT TERM REVOLVING CREDIT AGREEMENT
This WAIVER AND AMENDMENT NO. 2, dated as of May 15, 2000 (the
"Amendment"), to each of (i) the SHORT TERM REVOLVING CREDIT AGREEMENT, dated as
of June 4, 1999 (as the same may be amended, restated, supplemented or otherwise
modified from time to time, the "Short Term Credit Agreement"), by and among
Ag-Chem Equipment Co., Inc. (the "Borrower"), the institutions from time to time
party thereto as lenders (as the same may be amended, restated, supplemented or
otherwise modified from time to time, the "Short Term Lenders"), and Bank One,
NA, as Agent (the "Agent") and (ii) the THIRD AMENDED AND RESTATED LONG TERM
REVOLVING CREDIT AGREEMENT, dated as of June 4, 1999 (the "Long Term Credit
Agreement", and together with the Short Term Credit Agreement, the "Credit
Agreements"), by and among the Borrower, certain subsidiaries of the Borrower
(the "Multicurrency Subsidiary Borrowers"), the Short Term Lenders and Bank One
Canada, formerly known as First Chicago NBD Bank, Canada, as the lenders
thereunder (the "Long Term Lenders"), and the Agent, is entered into by each of
the parties to the Credit Agreements. Capitalized terms used herein and not
otherwise defined herein shall have the meaning given to them in the Credit
Agreements.
WITNESSETH
WHEREAS, the Borrower, the Short Term Lenders and the Agent are
parties to the Short Term Credit Agreement and, together with the Multicurrency
Subsidiary Borrowers and Bank One Canada, are parties to the Long Term Credit
Agreement;
WHEREAS, the Borrower and the Multicurrency Subsidiary Borrowers
have requested that the Short Term Lenders and the Long Term Lenders (together,
the "Lenders") and the Agent provide a limited waiver under each of the Credit
Agreements with respect to the financial covenant set forth in Section 5.2(c) of
each of the Credit Agreements;
WHEREAS, each of the Borrower and each of the Multicurrency
Subsidiary Borrowers also wishes to amend the Credit Agreements to which it is a
party in certain respects;
<PAGE>
WHEREAS, the Lenders and the Agent are willing to provide such
limited waivers and amend the Credit Agreements on the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of the premises set forth above,
the terms and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Borrower, the Multicurrency Subsidiary Borrowers, the Agent and the Lenders
hereby agree as follows:
1. Limited Waiver. Effective as of the date hereof, as expressly limited
hereby and subject to the satisfaction of the conditions precedent set forth in
Section 3 below, the Lenders and the Agent hereby agree to waive the
requirements, as existed immediately prior to the effectiveness of this
Amendment, of Section 5.2(c) of each of the Credit Agreements with respect to
the fiscal quarter ended March 31, 2000.
2. Amendment. Effective as of the date first above written and subject to
the satisfaction of the conditions precedent set forth in Section 3 below, the
Credit Agreements shall be and hereby are amended as follows:
(a) The definition of "Interest Coverage Ratio" set forth in Section
1.01 of each Credit Agreement is hereby amended to delete therefrom clause (a)
thereof and to substitute the following therefor: "(a) EBITDA of the Company and
its consolidated Subsidiaries."
(b) The definition of "Termination Date" set forth in Section 1.01
of the Short Term Credit Agreement is hereby amended to delete therefrom the
date "June 2, 2000" and to substitute therefor the date "June 1, 2001".
(c) A new defined term, "Working Capital Coverage Ratio", shall be
added to Section 1.01 of each Credit Agreement in alphabetical order immediately
following the definition of "Type of Advance":
"Working Capital Coverage Ratio" means the ratio of (a)
the sum of the face amount of the accounts receivable of
the Company and its consolidated Subsidiaries MINUS the
amount of accounts receivable classified as doubtful
determined in accordance with GAAP PLUS the value of the
inventory of the Company and its consolidated Subsidiaries
valued at the lower of cost or market on a last-in
first-out basis determined in accordance with GAAP to (b)
the sum of the principal amount of the Obligations of the
Company to the Lenders under the Loan Documents PLUS the
outstanding principal indebtedness of the Company under
that certain Note Agreement dated as of April 6, 1994 with
respect to the Company's 6.83% Series A Senior Notes due
April 6, 2001 PLUS the outstanding principal indebtedness
of the Company pursuant to that certain Note Agreement
dated as of October 10, 1995 with respect to the Company's
7.25% Series A Senior Notes due April 6, 2005.
2
<PAGE>
(d) Article II of the Short Term Credit Agreement is hereby amended
to insert therein at the end thereof the following Section 2.12:
"2.12 Termination Date Extension. The Company may request an extension of
the Termination Date in effect at any time by submitting a written request for
an extension to the Agent (an "Extension Request") not more than 59 and not less
than 30 days prior to the then effective Termination Date. The request must
specify the new Termination Date and the date (which must be at least 30 days
after the Extension Request is delivered to the Agent but not later than the
then-existing Termination Date) as of which the new Termination Date shall be
effective (the "Extension Date"). The new Termination Date shall be 360 days
after the Extension Date, including the Extension Date as one of the days in the
calculation of the days elapsed. Promptly upon receipt of an Extension Request,
the Agent shall notify each Lender of the contents thereof and shall request
each Bank to approve the Extension Request. Each Lender approving the Extension
Request shall deliver its written consent no later than the Extension Date. Any
consent delivered by a Lender to the Agent may be revoked up to and including
the fourth day prior to the Extension Date, but shall be irrevocable thereafter.
If the consent of each of the Required Lenders is received by the Agent and
remains in effect on the Extension Date, the new Termination Date shall become
effective on the Extension Date, but only with respect to each Lender which has
consented to the Extension Request and the Agent shall promptly notify the
Borrower and each Lender of the new Termination Date. Failure of a Lender to
respond to an Extension Request after such Lender's receipt of the Extension
Request from the Agent shall be deemed a denial of such request. If any Lender
does not consent to an Extension Request which is approved by the Required
Lenders, then on the Termination Date in effect on the date of the Extension
Request but without giving effect to approval of the Extension Request, (a) the
Company shall pay to such Lender all amounts then payable to such Bank under
this Agreement and (b) such Lender's Commitment shall terminate."
(e) Section 5.2(b) of each Credit Agreement is hereby amended in its
entirety to read as follows:
"Total Liabilities to Tangible Net Worth." Permit or
suffer the ratio of Total Liabilities to Tangible Net
Worth to exceed: (1) 2.75 to 1.0 at the end of the fiscal
quarter ending March 31, 2000 or (ii) 2.50 to 1.0 at the
end of each fiscal quarter ending on or after June 30,
2000 and on or prior to March 31, 2001 or (iii) 2.0 to 1.0
at the end of each fiscal quarter ending on or after June
30, 2001.
(f) Section 5.2(c) of each Credit Agreement is hereby amended in its
entirety to read as follows:
"Interest Coverage Ratio." Permit or suffer the Interest
Coverage Ratio to be less than (i) 2.0 to 1.0 for the
fiscal period ending March 31, 2000 or (ii) 1.50 to 1.0
for the fiscal periods ending June 30, 2000, September 30,
2000 and December 31, 2000 or (iii) 2.0 to 1.0 for the
fiscal period ending March 31, 2001 or (iv) 2.25 to 1.0
for the fiscal period ending June 30, 2001 or (v) 2.5 to
1.0 for the fiscal periods ending September 30, 2001,
December 31, 2001,
3
<PAGE>
March 31, 2002 and June 30, 2002 or (vi) 3.25 to 1.0 for
the fiscal periods ending September 30, 2002, December 31,
2002, March 31, 2003 and June 30, 2003 or (vii) 3.5 to 1.0
for each fiscal period ending as of the end of each fiscal
quarter ending on or after September 30, 2003.
(g) Section 5.2(d) of each Credit Agreement is hereby amended:
(I) to delete from clause (ii) therein the phrase "on an unsecured
basis and then at prevailing market terms" and to substitute therefor the phrase
"and which, if secured, is secured on terms substantially similar to those
evidenced by the Collateral Sharing Agreement dated as of May 15, 2000 to which
the Company is a party, and documents related thereto, and which memorializes
then prevailing market terms" and
(II) is hereby amended to delete clause (iii) therefrom and to
substitute the following therefor:
"(iii) Indebtedness secured by Permitted Liens; provided, however,
that the proceeds of Indebtedness incurred in connection with the grant of
the Permitted Liens described in Section 5.2(e)(viii) shall be applied
toward the satisfaction of amounts owing under the Short Term Revolving
Credit Agreement, dated as of June 4, 1999, as amended from time to time,
among Ag-Chem Equipment Co., Inc., certain financial institutions and Bank
One, NA, as Agent, and the Third Amended and Restated Long Term Revolving
Credit Agreement, dated as of June 4, 1999, as amended from time to time,
among Ag-Chem Equipment Co., Inc., certain of its affiliates, certain
financial institutions and Bank One, NA, as Agent."
(h) Section 5.2(e) of each Credit Agreement is hereby amended to
insert therein the following clauses (viii) and (ix):
"(viii) Liens on Ag-Chem Equipment Co., Inc.'s real property located
in Minnetonka, Minnesota, including, without limitation, fixtures located
on such property, provided that no such Lien shall be granted subsequent
to the occurrence and continuance of an Event of Default without the
consent of the Agent, and
(ix) any Lien granted by a Loan Party in favor of the Agent securing
the "Obligations" as defined in the Collateral Sharing Agreement, dated as
of the date hereof, among the Agent, the Lenders, the holders of notes
issued pursuant to the Note Agreement, dated as of April 6, 1994, to which
Ag-Chem Equipment Co., Inc. is a party and the holders of notes issued
pursuant to the Note Agreement, dated as of October 10, 1995, to which
Ag-Chem Equipment Co., Inc. is a party (as acknowledged by Ag-Chem
Equipment Co., Inc. and certain of its affiliates, and as the same may be
amended, restated, supplemented, or otherwise modified from time to time,
the "Collateral Sharing Agreement")."
(i) Section 5.2(g) of each Credit Agreement is hereby amended to
insert after clause (vi) therein the following clause (vii):
4
<PAGE>
"(vii) accounts receivable and/or instruments owed to or in favor of
a Loan Party that are sold, transferred, and/or assigned in an arms-length
transaction for a fair market price by such Loan Party; provided, that no
such sale, transfer or assignment shall occur without the Agent's consent
after the occurrence of an Event of Default; provided, further, that 100%
of the proceeds resulting from such sale, transfer or assignment shall be
applied toward the satisfaction of the Obligations under the Loan
Documents."
(j) Section 5.2(l) of each Credit Agreement is hereby amended in its
entirety as follows:
"(l) Dividends. Declare or pay dividends or make other stockholder
distributions or redemptions, or commit to make any distribution of cash
or property to its shareholders at any time after the Effective Date,
other than (x) dividends or distributions made by a Loan Party to the
Company or made by a Loan Party to another Loan Party, so long as the Loan
Party receiving such dividend or distribution has guaranteed the
Obligations and has secured its obligations under its guaranty and (y) so
long as no Default or Event of Default has occurred and is continuing and
no Default or Event of Default would occur upon payment of such amounts,
(i) the Company may pay cash dividends or dividends paid solely in shares
of the Company and (ii) the Company may repurchase or redeem shares of its
capital stock for an amount not to exceed $3,000,000 per fiscal year."
(k) Section 5.2 of each Credit Agreement is hereby amended by adding
a new Section 5.2(n) to read as follows:
"Working Capital Coverage Ratio." Permit or suffer the
Working Capital Coverage Ratio to be less than 1.30 to 1.0
as of the end of any fiscal quarter.
(l) The signature pages to the Short Term Credit Agreement are
hereby deleted therefrom and the signature pages attached hereto as Schedule I
are hereby substituted therefor.
(m) The signature pages to the Long Term Credit Agreement are hereby
deleted therefrom and the signature pages attached hereto as Schedule II are
hereby substituted therefor.
3. Conditions of Effectiveness. This Amendment shall become effective and
be deemed effective as of the date hereof, if, and only if the Agent shall have
received:
(i) six (6) duly executed originals of this Amendment from the Borrower,
the Multicurrency Subsidiary Borrowers and the Required Lenders,
(ii) guaranty reaffirmations, in form and substance acceptable to the
Agent, for each guaranty of the Obligations entered into by Ag-Chem Sales Co.,
Inc., Lor*Al Products, Inc., Ag-Chem Manufacturing Co., Inc., and Ag-Chem
Equipment Canada, Ltd.,
5
<PAGE>
(iii) Security Agreements, in form and substance acceptable to the Agent,
entered into by Ag-Chem Sales Co., Inc., Lor*Al Products, Inc., Ag-Chem
Manufacturing Co., Inc., and Ag-Chem Equipment Canada, Ltd., pursuant to which
such entities secured their obligations under their respective guarantees,
(iv) UCC-1 financing statements delivered in connection with the Security
Agreements referenced in clause (iii);
(v) a fully executed copy of the Collateral Sharing Agreement, dated as of
the date hereof, entered into by, among others, the Borrower, the Agent and the
Lenders,
(vi) a fully executed copy, in form and substance acceptable to the Agent,
of the letter agreement, dated as of the date hereof, delivered in connection
with the Note Agreement to which the Borrower is a party that is dated as of
April 6, 1994, and
(vii) a fully executed copy, in form and substance acceptable to the
Agent, of the letter agreement, dated as of the date hereof, delivered in
connection with the Note Agreement to which the Borrower is a party that is
dated as of October 10, 1995.
4. Representations and Warranties of the Borrower and the Multicurrency
Subsidiary Borrowers. Each of the Borrower and each Multicurrency Subsidiary
Borrower hereby represents and warrants as follows:
(a) Each of the Credit Agreements to which each of the Borrower and
each Multicurrency Subsidiary Borrower is a party as previously executed
constitutes the legal, valid and binding obligation of the Borrower and each
Multicurrency Subsidiary Borrower and is enforceable against the Borrower and
each Multicurrency Subsidiary Borrower in accordance with its terms.
(b) Upon the effectiveness of this Amendment, each of the Borrower
and each Multicurrency Subsidiary Borrower hereby (i) represents that no Default
or Event of Default exists under the terms of the Credit Agreements to which it
is a party, (ii) reaffirms all covenants, representations and warranties made in
the Credit Agreements to which it is a party, and (iii) agrees that all such
covenants, representations and warranties shall be deemed to have been remade as
of the effective date of this Amendment.
5. Effect on the Credit Agreement.
(a) Upon the effectiveness of this Amendment, on and after the date
hereof, each reference in each Credit Agreement to "this Agreement,"
"hereunder," "hereof," "herein" or words of like import shall mean and be a
reference to such Credit Agreement, as amended hereby.
(b) Except as specifically amended above, the Credit Agreements and
all other documents, instrument/s and agreements executed and/or delivered in
connection therewith shall remain in full force and effect, and are hereby
ratified and confirmed.
6
<PAGE>
(c) The execution, delivery and effectiveness of this Amendment
shall neither, except as expressly provided herein, operate as a waiver of any
right, power or remedy of the Lenders or the Agent, nor constitute a waiver of
any provision of either Credit Agreement or any other documents, instruments and
agreements executed and/or delivered in connection therewith.
6. Costs and Expenses. The Borrower agrees to pay all reasonable costs,
fees and out-of-pocket expenses (including attorneys' fees and expenses charged
to the Agent) incurred by the Agent and the Lenders in connection with the
preparation, arrangement, execution and enforcement of this Amendment.
7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, SECTION 735
ILCS 105/5-1 ET SEQ. BUT OTHERWISE WITHOUT REGARD TO THE CONFLICTS OF LAWS
PROVISIONS) OF THE STATE OF ILLINOIS.
8. Headings. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
9. Counterparts. This Amendment may be executed by one or more of the
parties to the Amendment on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
10. No Strict Construction. The parties hereto have participated jointly
in the negotiation and drafting of this Amendment. In the event an ambiguity or
question of intent or interpretation arises, this Amendment shall be construed
as if drafted jointly by the parties hereto and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Amendment.
The remainder of this page is intentionally blank.
7
<PAGE>
IN WITNESS WHEREOF, this Waiver and Amendment No. 2 has been duly executed
as of the day and year first above written.
AG-CHEM EQUIPMENT CO., INC., as the AG-CHEM EUROPE, B.V., as a Multicurrency
Borrower Subsidiary Borrower
By: /s/ John Retherford By: /s/ John Retherford
--------------------- ----------------------
Name: John Retherford Name: John Retherford
Title: CFO Title: CFO
AG-CHEM EQUIPMENT CANADA, LTD., as BANK ONE, NA, as a Lender and as Agent
a Multicurrency Subsidiary Borrower under the Credit Agreements
By: /s/ John Retherford By: /s/ Kevin Gillen
---------------------- ----------------------
Name: John Retherford Name: Kevin Gillen
Title: CFO Title: Vice President
COOPERATIEVE CENTRALE RAIFFEISEN- HARRIS TRUST AND SAVINGS BANK, as a
BOERENLEENBANK B.A., "RABOBANK Lender under the Credit Agreements
INTERNATIONAL", NEW YORK BRANCH,
as a Lender under the Credit
Agreements
By: By: /s/ Catherine Ciolek
---------------------- ----------------------
Name: Name: Catherine Ciolek
Title: Title: Vice President
By:
----------------------
Name:
Title:
BANK ONE CANADA, formerly known as
First Chicago NBD Bank, Canada, as a
Lender under the Long Term Credit
Agreement
By: /s/ Randall Taylor
----------------------
Name: Randall Taylor
Title: Sr. Vice President
By:
----------------------
Name:
Title:
<PAGE>
SCHEDULE I
TO
WAIVER AND AMENDMENT NO. 2
Signature Pages to Short Term Credit Agreement
Attached.
<PAGE>
AG-CHEM EQUIPMENT CO., INC.
By: /s/ John Retherford
-----------------------------
Name: John Retherford
Title: CFO
Notice Information:
5720 Smetana Drive
Minnetonka, MN 55343
Attention: John Retherford
Telephone No.: (612) 933-9006
Facsimile No.: (612) 933-8799
<PAGE>
BANK ONE, NA
By: /s/ Kevin L. Gillen
-----------------------------
Name: Kevin L. Gillen
Title: Vice President
Notice Information:
1 Bank One Plaza
Chicago, IL 60670
Attention: Jenny Gilpin
Telephone No.: (312) 732-5867
Facsimile No.: (312) 732-1117
Commitment: $12,142,857.14
Percentage: 40.4762%
<PAGE>
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK INTERNATIONAL", NEW YORK BRANCH
By:
-----------------------------
Name:
Title:
Notice Information:
245 Park Avenue
New York, NY 10167
Attention: Corporate Services Department
Telephone No.: (212) 916-7800
Facsimile No.: (212) 818-0233
with a copy to:
Rabobank International
300 South Wacker Drive
Suite 3500
Chicago, IL 60606-6610
Attention: Tom Levasseur
Telephone No.: (312) 408-8249
Facsimile No.: (312) 408-8240
Commitment: $8,928,571.43
Percentage: 29.7619%
<PAGE>
HARRIS TRUST AND SAVINGS BANK
By: /s/ Catherine Ciolek
-----------------------------
Name: Catherine Ciolek
Title: Vice President
Notice Information:
111 West Monroe Street
10th Floor West
Chicago, IL 60603
Telephone No.: (312) 461-3271
Facsimile No.: (312) 293-5040
Commitment: $8,928,571.43
Percentage: 29.7619%
<PAGE>
SCHEDULE II
TO
WAIVER AND AMENDMENT NO. 2
Signature Pages to Long Term Credit Agreement
Attached.
<PAGE>
AG-CHEM EQUIPMENT CO., INC.
By: /s/ John Retherford
-----------------------------
Name: John Retherford
Title: CFO
Notice Information:
5720 Smetana Drive
Minnetonka, MN 55343
Attention: John Retherford
Telephone No.: (612) 933-9006
Facsimile No.: (612) 933-8799
AG-CHEM EUROPE, B.V.
By: /s/ John Retherford
-----------------------------
Name: John Retherford
Title: CFO
Notice Information:
5720 Smetana Drive
Minnetonka, MN 55343
Attention: John Retherford
Telephone No.: (612) 933-9006
Facsimile No.: (612) 933-8799
AG-CHEM EQUIPMENT CANADA, LTD.
By: /s/ John Retherford
-----------------------------
Name: John Retherford
Title: CFO
Notice Information:
5720 Smetana Drive
Minnetonka, MN 55343
Attention: John Retherford
Telephone No.: (612) 933-9006
Facsimile No.: (612) 933-8799
<PAGE>
BANK ONE, NA
By: /s/ Kevin L. Gillen
-----------------------------
Name: Kevin L. Gillen
Title: Vice President
Notice Information:
1 Bank One Plaza
Chicago, IL 60670
Attention: Jenny Gilpin
Telephone No.: (312) 732-5867
Facsimile No.: (312) 732-1117
Tranche A Commitment: $16,190,476.19
Percentage: 40.4762%
<PAGE>
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK INTERNATIONAL", NEW YORK BRANCH
By:
-----------------------------
Name:
Title:
Notice Information:
245 Park Avenue
New York, NY 10167
Attention: Corporate Services Department
Telephone No.: (212) 916-7800
Facsimile No.: (212) 818-0233
with a copy to:
Rabobank International
300 South Wacker Drive
Suite 3500
Chicago, IL 60606-6610
Attention: Tom Levasseur
Telephone No.: (312) 408-8249
Facsimile No.: (312) 408-8240
Tranche A Commitment: $11,904,761.90
Percentage: 29.7619%
<PAGE>
HARRIS TRUST AND SAVINGS BANK
By: /s/ Catherine Ciolek
-----------------------------
Name: Catherine Ciolek
Title: Vice President
Notice Information:
111 West Monroe Street
10th Floor West
Chicago, IL 60603
Telephone No.: (312) 461-3271
Facsimile No.: (312) 293-5040
Commitment: $11,904,761.90
Percentage: 29.7619%
<PAGE>
BANK ONE CANADA
By: /s/ Randall Taylor
-----------------------------
Name: Randall Taylor
Title: Sr. Vice President
By:
-----------------------------
Name:
Title:
Notice Information:
161 Bay Street
Suite 4240
Toronto, Ontario M5J 2S1
CANADA
Attention: Jerry Hynes
Telephone No.: (416) 365-5260
Facsimile No.: (416) 363-7574
Tranche B Commitment: US$5,000,000
Percentage: 100% of the Canadian Advances
EXHIBIT 10.20
COLLATERAL SHARING AGREEMENT
This COLLATERAL SHARING AGREEMENT, dated as of May 15, 2000
(as the same may be amended, restated, supplemented or otherwise modified from
time to time, the "AGREEMENT"), is entered into by and among Bank One, NA ("BANK
ONE"), having its principal office in Chicago, Illinois, formerly known as The
First National Bank of Chicago, in its capacity as contractual representative
(the "AGENT") for the "Lenders" under the Bank Credit Agreements (as defined
below) listed on Annex I attached hereto (such Lenders, the "BANKS"), the Banks,
the holder of the 2001 Notes (as defined below) listed on Annex II attached
hereto (the "2001 NOTEHOLDER" and together with the 2005 Noteholder defined
below, the "NOTEHOLDERS"), the holder of the 2005 Notes (as defined below)
listed on Annex III attached hereto (the "2005 NOTEHOLDER"; the Banks, the 2001
Noteholder and the 2005 Noteholder, together with their respective successors
and assigns, are herein sometimes collectively called the "LENDERS" and
individually called a "LENDER"), and Bank One, in its capacity as contractual
representative for the Lenders hereunder (the "COLLATERAL AGENT"). Capitalized
terms used herein but not defined herein shall have the meanings set forth in
the "Bank Credit Agreements", the "2001 Note Agreement", and the "2005 Note
Agreement" (each as defined below).
RECITALS:
WHEREAS, Ag-Chem Equipment Co., Inc., a Minnesota corporation
(herein called the "COMPANY"), the Banks listed as "Short-Term Lenders" on Annex
I hereto, and the Agent have entered into that certain Short Term Revolving
Credit Agreement dated as of June 4, 1999 (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the "SHORT-TERM BANK
CREDIT AGREEMENT"), pursuant to which, among other things, the Short-Term
Lenders have agreed to make certain advances to the Company (the "SHORT-TERM
LOANS");
WHEREAS, the Company, Ag-Chem Equipment Canada, Ltd., Ag-Chem
Europe, B.V. (Ag-Chem Europe, B.V., together with Ag-Chem Equipment Canada,
Ltd., the "SUBSIDIARY BORROWERS"), the Banks listed as "Long-Term Lenders" on
Annex II hereto, and the Agent have entered into that certain Third Amended and
Restated Long Term Revolving Credit Agreement, dated as of June 4, 1999 (as the
same may be amended, restated, supplemented or otherwise modified from time to
time, the "LONG-TERM BANK CREDIT AGREEMENT", and together with the Short-Term
Bank Credit Agreement, the "BANK CREDIT AGREEMENTS"), pursuant to which, among
other things, the Long-Term Lenders have agreed to make certain advances to the
Company and the Subsidiary Borrowers (the "LONG-TERM LOANS" and together with
the Short-Term Loans, the "LOANS") and to issue letters of credit for the
account of the Company (the "LETTERS OF CREDIT");
WHEREAS, the 2001 Noteholder is the holder of the Company's
6.83% Series A Senior Notes, with an initial aggregate principal amount of
$15,000,000, due April 6, 2001 (the "2001 NOTES") issued pursuant to a Note
Agreement, dated as of April 6, 1994, between the Company and the 2001
Noteholder (as the same may be amended, restated, supplemented or
<PAGE>
otherwise modified from time to time, the "2001 NOTE AGREEMENT", and together
with the 2005 Note Agreement defined below, the "NOTE AGREEMENTS");
WHEREAS, the 2005 Noteholder is the holder of the Company's
7.25% Series A Senior Notes, with an initial aggregate principal amount of
$15,000,000, due April 6, 2005 (the "2005 NOTES" and together with the 2001
Notes, the "NOTES") issued pursuant to a Note Agreement, dated as of October 10,
1995, between the Company and the 2005 Noteholder (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the "2005 NOTE
AGREEMENT", and together with the 2001 Note Agreement, the 2001 Notes, the 2005
Notes, and the Bank Credit Agreements, the "LENDER DOCUMENTS");
WHEREAS, pursuant to the terms of the Collateral Documents,
each of the Company, Ag-Chem Equipment Canada, Ltd. and the entities (the
"GUARANTORS") set forth on Annex IV hereto that have guaranteed the repayment of
all amounts due and payable under the Lender Documents, shall on the date hereof
grant a security interest in certain of its assets to the Agent on behalf of the
Lenders; and
WHEREAS, the Lenders desire to agree to the relative priority
of the application of payments received pursuant to the terms of the Collateral
Documents with respect to the Obligations (as defined below), and certain other
rights and interests;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein contained, the Agent, the Lenders and the Collateral
Agent hereby agree as follows:
1. Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"ACTIONABLE DEFAULT" means, under either Bank Credit Agreement
or either Note Agreement, (a) an Event of Default (as defined therein) shall
have occurred thereunder as a result of (i) the nonpayment of amounts owing
thereunder, (ii) noncompliance with any financial covenant set forth therein,
including, without limitation, those financial covenants set forth in Section
5.2 of each Bank Credit Agreement and in Section 7.1 of the 2005 Note Agreement
, or (iii) the bankruptcy or insolvency of the Company or any of its affiliates,
(b) a notice shall have been delivered to the Company and/or a Subsidiary
Borrower by the Agent under either Bank Credit Agreement or a Noteholder under
its respective Note Agreement indicating that an Event of Default (as defined
therein) has occurred and is continuing and the Obligations due under such
Agreement are immediately due and payable, or (c) a default shall have occurred
under any Collateral Document or Guaranty and the Agent, the Collateral Agent,
or a Lender, as applicable, shall have caused the amounts owing thereunder to
become immediately due and payable.
"AGENT'S EXPENSES" means all of the fees, costs and expenses
of the Collateral Agent (including, without limitation, the reasonable fees and
disbursements of its counsel) (i) arising in connection with the preparation,
execution, delivery, modification, restatement, amendment or termination of this
Agreement and each Collateral Document, if not previously reimbursed, or the
enforcement (whether in the context of a civil action, adversary proceeding,
workout or otherwise) of any of the provisions hereof or thereof, or (ii)
incurred or required to be
2
<PAGE>
advanced in connection with the sale or other disposition or the custody,
preservation or protection of the Collateral pursuant to any Collateral Document
and the exercise or enforcement of the Collateral Agent's rights under this
Agreement and in and to the Collateral.
"COLLATERAL" means all property of the Company, Ag-Chem
Equipment Canada, Ltd., or any Guarantor in which the Agent or the Collateral
Agent shall have been granted a security interest or lien under any of the
Collateral Documents.
"COLLATERAL ACCOUNT" means the collateral account established
and maintained by the Collateral Agent pursuant to Section 8.
"COLLATERAL DOCUMENTS" means any and all security agreements,
financing statements, and other similar instruments executed by the Company,
Ag-Chem Equipment Canada, Ltd., or a Guarantor in favor of the Collateral Agent
from time to time pursuant hereto, in each case as such agreements and
instruments may be amended, modified, supplemented and/or restated, and together
in each case with any other agreements, instruments and documents incidental
thereto.
"DISTRIBUTION DATE" means the second business day in each
calendar week, commencing with the first such business day following receipt by
the Collateral Agent of a Notice of Actionable Default.
"GUARANTY" means any guaranty entered into by a Guarantor in
favor of the Agent, the Collateral Agent, and/or any Lender guaranteeing the
repayment of the Obligations due and payable under a Lender Document.
"L/C INTERESTS" means, with respect to any Bank constituting a
Long-Term Lender, such Bank's direct or participation interests in all unpaid
reimbursement obligations with respect to Letters of Credit and such Bank's
direct obligations or risk participations with respect to undrawn amounts of all
outstanding Letters of Credit, provided that the undrawn amounts of outstanding
Letters of Credit shall be considered to have been reduced to the extent of any
amount on deposit with the Agent at any time as provided in Section 9(b) hereof.
"NOTICE OF ACTIONABLE DEFAULT" means a written notice to the
Collateral Agent from any Lender or Lenders stating that it is a "Notice of
Actionable Default" hereunder and certifying that an Actionable Default has
occurred and is continuing. A Notice of Actionable Default may be included in a
written direction to the Collateral Agent from the Requisite Lenders pursuant to
Section 5.
"NOTICE OF DEFAULT" means a written notice to the Collateral
Agent from any Lender or Lenders stating that it is a "Notice of Default"
hereunder and certifying that an Event of Default (as defined in either of the
Bank Credit Agreements or either of the Note Agreements) has occurred and is
continuing.
"OBLIGATIONS" means all of the monetary obligations owed by
the Company, the Subsidiary Borrowers, and the Guarantors to the Lenders and the
Agent under the Bank Credit
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Agreements, the Note Agreements, the Notes, the Guarantees, the Collateral
Documents, and related agreements, documents, and instruments, including,
without limitation, (1) the outstanding principal amount of, accrued and unpaid
interest on, and any unpaid Make Whole Amount (as defined in the Note
Agreements) or other breakage or prepayment indemnification due with respect to,
the Loans and the Notes, (2) any unpaid reimbursement obligations with respect
to any Letters of Credit, (3) any undrawn amounts of any outstanding Letters of
Credit, and (4) any other unpaid amounts (including amounts in respect of fees,
expenses, indemnification, hedging obligations permitted under the Bank Credit
Agreements and reimbursement) due from the Company, the Subsidiary Borrowers and
the Guarantors under any of the Note Agreements, Notes, Bank Credit Agreements,
Guarantees or Collateral Documents; provided that the undrawn amounts of any
outstanding Letters of Credit shall be considered to have been reduced to the
extent of any amount on deposit with the Agent at any time as provided in
Section 9(b) hereof.
"PRINCIPAL EXPOSURE" means, with respect to any Lender at any
time (i) if such Lender is a Bank, the aggregate amount of such Lender's
Commitments under each of the Bank Credit Agreements, or, if the Banks shall
then have terminated the Commitments or if the Collateral Agent shall then have
received a Notice of Actionable Default that shall not have been withdrawn, the
sum of (x) the outstanding principal amount of such Lender's Loans and (y) the
outstanding face and/or principal amount of such Lender's L/C Interests at such
time, and (ii) if such Lender is a Noteholder, the outstanding principal amount
of such Lender's Notes at such time.
"PRO RATA SHARE" means, with respect to any Lender at any
time, a fraction (expressed as a percentage), the numerator of which is the
amount of such Lender's Principal Exposure at such time, and the denominator of
which is the aggregate amount of the Principal Exposure of all of the Lenders at
such time.
"REQUISITE LENDERS" means, at any time, (i) with respect to
the aggregate Pro Rata Shares of the Banks, such Banks whose Pro Rata Shares
exceed fifty percent of such aggregate amount plus (ii) with respect to the
aggregate Pro Rata Shares of the Noteholders, such Noteholders whose Pro Rata
Shares exceed fifty percent of such aggregate amount.
2. Appointment; Nature of Relationship. Each of the Lenders
hereby designates and appoints Bank One as its Collateral Agent under this
Agreement and the Collateral Documents, and each of the Lenders hereby
irrevocably authorizes the Collateral Agent to take such action on its behalf
under the provisions of this Agreement and the Collateral Documents and to
exercise such powers as are set forth herein or therein, together with such
other powers as are incidental thereto. The Collateral Agent agrees to act as
such on the express terms and conditions contained in this Agreement.
Notwithstanding the use of the defined term "Collateral Agent," it is expressly
understood and agreed that the Collateral Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement and that the
Collateral Agent is merely acting as the representative of the Lenders with only
those duties as are expressly set forth in this Agreement and the Collateral
Documents. In its capacity as the Lenders' contractual representative, the
Collateral Agent (i) does not assume any fiduciary
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duties to any of the Lenders, (ii) is a "representative" of the Lenders within
the meaning of Section 9-105 of the Uniform Commercial Code and (iii) is acting
as an independent contractor, the rights and duties of which are limited to
those expressly set forth in this Agreement and the Collateral Documents. Each
of the Lenders agrees to assert no claim against the Collateral Agent on any
agency theory or any other theory of liability for breach of fiduciary duty, all
of which claims each Lender waives.
3. Powers and Duties. The Collateral Agent shall have and may
exercise such powers under the Collateral Documents as are specifically
delegated to the Collateral Agent by the terms hereof and thereof, together with
such powers as are reasonably incidental thereto. The Collateral Agent shall
have no implied duties to the Lenders, or any obligation to the Lenders to take
any action hereunder or under any of the Collateral Documents, except any action
specifically required by this Agreement or any of the Collateral Documents to be
taken by the Collateral Agent or directed by the Requisite Lenders in accordance
with the terms hereof. The Collateral Agent shall not take any action which is
in conflict with any provisions of applicable law or of this Agreement or any
Collateral Document.
4. Authorization to Execute Collateral Documents. If the
Collateral Agent receives written notice from either the Agent or a Noteholder
at any time or from time to time hereunder that Collateral Documents are
required pursuant to the Bank Credit Agreements or the Note Agreements in
connection with the grant of a security interest in and lien against the assets
of the Company, Ag-Chem Equipment Canada, Ltd., and/or a Guarantor, the
Collateral Agent is authorized to and shall execute and deliver such Collateral
Documents as the Agent or such Noteholder shall direct requiring execution and
delivery by it and is authorized to and shall accept delivery from the Company
of such Collateral Documents as the Agent or the Noteholder shall direct which
do not require execution by the Collateral Agent.
5. Direction by Requisite Lenders. Except as otherwise
provided in this Section 5, the Collateral Agent shall take any action with
respect to the Collateral and the Collateral Documents directed in writing by
(and only as directed in writing by) the Requisite Lenders. Notwithstanding the
foregoing, the Collateral Agent shall not be obligated to take any such action
(i) which is in conflict with any provisions of applicable law or of this
Agreement or any Collateral Document or (ii) with respect to which the
Collateral Agent, in its opinion, shall not have been provided adequate security
and indemnity against the costs, expenses and liabilities that may be incurred
by it as a result of compliance with such direction. Under no circumstances
shall the Collateral Agent be liable for following the written direction of the
Requisite Lenders. In each instance in which the Requisite Lenders deliver a
written direction to the Collateral Agent pursuant hereto, the Collateral Agent
shall promptly send a copy of such written direction to each Lender that is not
included in such Requisite Lenders.
6. Notice of Actionable Default. Any Lender or Lenders may
give the Collateral Agent a Notice of Default or a Notice of Actionable Default
in the manner provided in Section 32 and shall give a copy of such Notice of
Default or Notice of Actionable Default to each of the other Lenders. If and
only if the Collateral Agent shall have received a Notice of Actionable Default,
the Collateral Agent shall, if directed in writing by the Requisite Lenders,
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exercise the rights and remedies provided in this Agreement and in any of the
Collateral Documents.
7. Remedies. Each of the Lenders hereby irrevocably agrees
that the Collateral Agent shall be authorized, after the occurrence of an
Actionable Default and at the direction of the Requisite Lenders or incidental
to any such direction, for the purpose of carrying out the terms of this
Agreement and any of the Collateral Documents, to take any and all appropriate
action and to execute any and all documents and instruments that may be
necessary or desirable to accomplish the purposes hereof and thereof, including,
without limiting the generality of the foregoing, to the extent permitted by
applicable law, to do the following:
(i) to ask for, demand, sue for, collect, receive and
give acquittance for any and all moneys due or to become due
with respect to the Collateral (except that, without the
consent of all Lenders, the Collateral Agent shall not accept
any Obligations in whole or partial consideration from the
disposition of any Collateral),
(ii) to receive, take, endorse, assign and deliver
any and all checks, notes, drafts, acceptances, documents and
other negotiable and nonnegotiable instruments, documents and
chattel paper taken or received by the Collateral Agent in
connection with this Agreement or any of the Collateral
Documents,
(iii) to commence, file, prosecute, defend, settle,
compromise or adjust any claim, suit, action or proceeding
with respect to the Collateral,
(iv) to sell, transfer, assign or otherwise deal in
or with the Collateral or any part thereof pursuant to the
terms and conditions of this Agreement and the Collateral
Documents, and
(v) to do, at its option and at the expense and for
the account of the Lenders (to the extent the Collateral Agent
shall not be reimbursed by the Company) at any time or from
time to time, all acts and things which the Collateral Agent
deems reasonably necessary to protect or preserve the
Collateral and to realize upon the Collateral.
8. The Collateral Account. Upon receipt by the Collateral
Agent of a Notice of Actionable Default, and until such time as the Event of
Default described therein is cured, the Collateral Agent shall establish and
maintain at its principal office an interest-bearing account that shall be
entitled the "Ag-Chem Collateral Account." All moneys received by the Collateral
Agent with respect to Collateral after receipt of a Notice of Actionable Default
shall be deposited in the Collateral Account and thereafter shall be held,
applied and/or disbursed by the Collateral Agent in accordance with Section 9.
In addition, any other payments received, directly or indirectly, by any Lender
of or with respect to any of the Obligations (including, without limitation, any
payment by any Guarantor under any Guaranty) after giving or receiving a Notice
of Actionable Default (excluding any payments distributed to any Lender by the
Collateral Agent in accordance with Section 9) or after the Banks have
terminated the Commitments, any payment
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received by any Lender with respect to any of the Obligations in an insolvency
or reorganization proceeding with respect to the Company or any Guarantor, and
any amount set off by any Lender with respect to any of the Obligations, shall
promptly be delivered to the Collateral Agent and thereafter shall be held,
applied and/or disbursed by the Collateral Agent in accordance with Section 9.
The Collateral Account at all times shall be subject to the exclusive dominion
and control of the Collateral Agent.
9. Application of Moneys. (a) All moneys held by the
Collateral Agent in the Collateral Account shall be distributed by the
Collateral Agent on each Distribution Date as follows:
FIRST: To the Collateral Agent in an amount equal to
the Agent's Expenses that are unpaid as of such Distribution
Date, and to any Lender that has theretofore advanced or paid
any such Agent's Expenses in an amount equal to the amount
thereof so advanced or paid by such Lender prior to such
Distribution Date;
SECOND: To the Lenders and the Agent pro rata in
proportion to the respective amounts of the Obligations owed
by the Company to the Lenders and the Agent under the Lender
Documents as of such Distribution Date; and
THIRD: Any surplus remaining after payment in full in
cash of all Agent's Expenses and all of the Obligations shall
be paid to the Company, or to whomever may be lawfully
entitled to receive the same, or as a court of competent
jurisdiction may direct, provided that if any Lender shall
have notified the Collateral Agent in writing that a claim is
pending for which such Lender is entitled to the benefits of
an indemnification, reimbursement or similar provision under
which amounts are not yet due but with respect to which the
Company continues to be contingently liable, and amounts
payable by the Company with respect thereto are secured by the
Collateral, the Collateral Agent shall continue to hold the
amount specified in such notice in the Collateral Account
until the Company's liability with respect thereto is
discharged or released to the satisfaction of such Lender.
NOTWITHSTANDING THE FOREGOING, EXCEPT FOR ANY SURPLUS UNDER CLAUSE THIRD ABOVE,
THE COLLATERAL AGENT SHALL NOT BE REQUIRED (UNLESS DIRECTED BY THE REQUISITE
LENDERS) TO MAKE A DISTRIBUTION ON ANY DISTRIBUTION DATE IF THE BALANCE IN THE
COLLATERAL ACCOUNT AVAILABLE FOR DISTRIBUTION ON SUCH DISTRIBUTION DATE IS LESS
THAN $1,000. THE COLLATERAL AGENT SHALL NOT BE RESPONSIBLE FOR ANY LENDER'S
APPLICATION (OR ORDER OF APPLICATION) OF PAYMENTS RECEIVED BY SUCH LENDER FROM
THE COLLATERAL AGENT HEREUNDER TO THE OBLIGATIONS OWING TO SUCH LENDER. FOR THE
PURPOSE OF DETERMINING THE AMOUNTS TO BE DISTRIBUTED PURSUANT TO CLAUSE SECOND
OF SUBSECTION (a) ABOVE WITH RESPECT TO THE UNDRAWN AMOUNTS OF THE OUTSTANDING
LETTERS OF CREDIT, SUCH UNDRAWN AMOUNTS SHALL BE REDUCED BY ANY AMOUNTS HELD AS
COLLATERAL PURSUANT TO SUBSECTION (b) OF THIS SECTION 9.
(b) Any distribution pursuant to clause SECOND of subsection
(a) above with respect to the undrawn amount of any outstanding Letter of Credit
shall be paid to the Agent to be held as collateral for the Banks constituting
Long-Term Lenders and disposed of as provided in this subsection (b). On each
date on which a payment is made to a beneficiary pursuant to a
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draw on a Letter of Credit, the Agent shall distribute to the Banks constituting
Long-Term Lenders from the amounts held pursuant to this subsection (b) for
application to the payment of the reimbursement obligation due to such Banks
with respect to such draw an amount equal to the product of (1) the total amount
then held pursuant to this subsection (b), and (2) a fraction, the numerator of
which is the amount of such draw and the denominator of which is the aggregate
undrawn amount of all outstanding Letters of Credit immediately prior to such
draw. On each date on which a reduction in the undrawn amount of any outstanding
Letter of Credit occurs other than on account of a payment made to a beneficiary
pursuant to a draw on such Letter of Credit, the Agent shall distribute from the
amounts held pursuant to this subsection (b) an amount equal to the product of
(1) the total amount then held pursuant to this subsection (b) and (2) a
fraction the numerator of which is the amount of such reduction and the
denominator of which is the aggregate undrawn amount of all outstanding Letters
of Credit immediately prior to such reduction, which amount shall be distributed
as provided in clause SECOND of subsection (a) above. At such time as no Letters
of Credit are outstanding, any remaining amount held pursuant to this subsection
(b), after the distribution therefrom as provided above, shall be distributed as
provided in clause SECOND of subsection (a) above.
10. Information from Lenders. Each of the Lenders hereby
agrees, promptly upon request by the Collateral Agent, to provide to the
Collateral Agent in writing such information regarding the Obligations held by
such Lender as may be reasonably required by the Collateral Agent at any time to
determine such Lender's Pro Rata Share or to calculate distributions to such
Lender from the Collateral Account. Each Lender shall notify the Collateral
Agent in writing promptly following the repayment in full of all Obligations
owing to such Lender.
11. Limitation on Collateral Agent's Duties in Respect of
Collateral. Other than the Collateral Agent's duties set forth in this Agreement
and the Collateral Documents as to the custody of Collateral and the proceeds
thereof received by the Collateral Agent hereunder and thereunder and the
accounting to the Company, the Guarantors, Ag-Chem Equipment Canada, Ltd. and
the Lenders therefor, the Collateral Agent shall have no duty to the Company,
the Guarantors, Ag-Chem Equipment Canada, Ltd. or the Lenders with respect to
any Collateral in its possession or control or in the possession or control of
its agent or nominee, any income thereon, or the preservation of rights against
prior parties or any other rights pertaining thereto.
12. Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Collateral Agent or any other
Lender and based on the financial information provided by the Company and its
Subsidiaries and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Collateral Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the Collateral Documents.
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13. Exculpation. Neither the Collateral Agent nor any of its
directors, officers, affiliates, agents or employees shall be responsible for or
have any duty to ascertain, inquire into, or verify (i) any statement, warranty
or representation made by the Company, Ag-Chem Equipment Canada, Ltd., or any
Guarantor in connection with any Collateral Document or Guaranty; (ii) the
performance or observance of any of the covenants or agreements of the Company,
Ag-Chem Equipment Canada, Ltd., or any Guarantor under any Collateral Document
or Guaranty; (iii) the satisfaction or observance of any condition or covenant
specified in any of the Lender Documents; (iv) the existence or possible
existence of any default under any of the Lender Documents or any Actionable
Default; (v) the validity, enforceability, effectiveness or genuineness of any
Collateral Document, Guaranty or any other instrument or writing furnished in
connection herewith; (vi) the validity, perfection or priority of any security
interest or lien created under any Collateral Document; or (vii) the financial
condition of the Company or any of its Subsidiaries.
14. Employment of Agents and Counsel. The Collateral Agent may
execute any of its duties as the Collateral Agent hereunder and under any
Collateral Document by or through employees, agents, and attorneys-in-fact and
shall not be answerable to the Lenders, except as to money or securities
received by it or its authorized agents, for the default or misconduct of any
such agents or attorneys-in-fact selected by it with reasonable care. The
Collateral Agent shall be entitled to advice of counsel concerning the
contractual arrangement between the Collateral Agent and the Lenders and all
matters pertaining to the Collateral Agent's duties hereunder and under the
Collateral Documents.
15. Reliance on Documents and Counsel. The Collateral Agent
shall be entitled to rely upon any notice, consent, certificate, affidavit,
letter, telegram, statement, paper or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons, and, in
respect to legal matters, upon the opinion of counsel selected by the Collateral
Agent, which may be employees of the Collateral Agent.
16. Collateral Agent's Reimbursement and Indemnification. The
Lenders agree to reimburse and indemnify the Collateral Agent ratably in
proportion to their respective Pro Rata Shares as of the date of the occurrence
of the event as to which such reimbursement or indemnification is being made (i)
for any amounts not reimbursed by the Company, Ag-Chem Equipment Canada, Ltd.,
or any Guarantor, under its Collateral Documents or Guaranty, as applicable,
(ii) for any other expenses incurred by the Collateral Agent, on behalf of the
Lenders, in connection with the preservation or protection of the Collateral or
the validity, perfection or priority of the Collateral Agent's interest therein
or the enforcement of the Collateral Documents and (iii) for any liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever which may be imposed
on, incurred by or asserted against the Collateral Agent in any way relating to
or arising out of the Collateral Documents or any other document delivered in
connection therewith or the transactions contemplated thereby, or the
enforcement of any of the terms thereof or of any such other documents, provided
that no Lender shall be liable for any of the foregoing to the extent any of the
foregoing is found in a final non-appealable judgment by a court of competent
jurisdiction to have arisen solely from the gross negligence or willful
misconduct of the
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Collateral Agent. The agreements in this Section 16 shall survive the repayment
of the Obligations and the termination of the other provisions of this
Agreement.
17. Rights as a Lender. Notwithstanding that Bank One is
acting as the Collateral Agent hereunder, Bank One in its individual capacity
shall have the same rights and powers hereunder as any Lender and may exercise
the same as though it were not the Collateral Agent, and the term "Lender" or
"Lenders" shall include Bank One in its individual capacity.
18. Successor Collateral Agent. The Collateral Agent may
resign at any time by giving not less than thirty days' prior written notice
thereof to the Lenders and the Company, Ag-Chem Equipment Canada, Ltd., and the
Guarantors, and the Collateral Agent may be removed at any time with or without
cause by written notice received by the Collateral Agent from the Requisite
Lenders. Upon any such resignation or removal, the Requisite Lenders shall have
the right to appoint, on behalf of the Lenders, a successor Collateral Agent. If
no successor Collateral Agent shall have been so appointed by the Requisite
Lenders and shall have accepted such appointment within thirty days after the
retiring Collateral Agent's giving notice of resignation, then the retiring
Collateral Agent may appoint, on behalf of the Lenders, a successor Collateral
Agent. Upon the acceptance of any appointment as the Collateral Agent hereunder
by a successor Collateral Agent, such successor Collateral Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Collateral Agent, and the retiring Collateral Agent shall be
discharged from its duties and obligations hereunder and under the Collateral
Documents. No resignation or removal of the Collateral Agent shall become
effective until a replacement Collateral Agent shall have been selected as
provided herein and shall have assumed in writing the obligations of the
Collateral Agent hereunder and under the Collateral Documents. Any replacement
Collateral Agent shall be a bank, trust company, or insurance company having
capital, surplus, and undivided profits of at least $250,000,000. After any
retiring Collateral Agent's resignation hereunder as Collateral Agent, the
provisions of this Agreement shall continue in effect for its benefit in respect
of any actions taken or omitted to be taken by it while it was acting as the
Collateral Agent hereunder and under the Collateral Documents.
19. Partial Release. If the Collateral Agent receives written
notice from the Agent and the Noteholders that the lien on any Collateral
granted pursuant to any Collateral Document is required to be released pursuant
to a transaction permitted by the terms of the Bank Credit Agreements and the
Note Agreements, the Collateral Agent shall promptly release such Collateral in
accordance with the directions of the Agent and the Noteholders.
20. Release and Termination. All of the Collateral shall be
released and this Agreement shall be terminated on the earlier of:
(a) the date on which (i) the Collateral Agent shall have
received from each of the Lenders written notice that all Obligations
owing to such Lender have been paid in full and (ii) all Agent's
Expenses shall have been paid in full; or
(b) the date on which (i) the Collateral Agent shall have
received written notice from the Agent and the Noteholders directing
the
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Collateral Agent to release the Collateral and stating that the Banks
and the Noteholders have consented to such release under the terms of
the Bank Credit Agreements and the Note Agreements, and (ii) all
Agent's Expenses shall have been paid in full.
21. Amendments and Waivers of Collateral Documents. The
Collateral Agent shall not execute or deliver any amendment or waiver with
respect to any Collateral Document except at the direction or with the consent
of the Requisite Lenders.
22. No Liability to Noteholders. Notwithstanding any other
provision of this Agreement or any provision of any Collateral Document, none of
the Banks, the Agent or the Collateral Agent shall have any liability to any
Noteholder as a result of any invalidity or lack of perfection or priority with
respect to any Collateral.
23. Notices With Respect to Lender Documents. Each of the
Agent and each Noteholder agrees to use its best efforts to give to the other
(a) copies of any notice of the occurrence or existence of any default in
payment of the Obligations sent to the Company and/or any Subsidiary of the
Company, simultaneously with the sending of such notice to the Company and/or
such Subsidiary, and (b) notice of any acceleration of the Loans or the Notes,
promptly upon such acceleration, but the failure to give any of the foregoing
notices shall not affect the validity of such notice of default or such
acceleration or create a cause of action against or cause a forfeiture of any
rights of the party failing to give such notice or create any claim or right on
behalf of any third party.
24. No Other Security. Neither the Agent nor any Lender shall
take or receive a security interest in or lien upon any of the property or
assets of the Company or any of its Subsidiaries as security for the Obligations
other than pursuant to this Agreement and the Collateral Documents or as
security for any other obligations of the Company or any of its Subsidiaries
other than the Obligations. Neither the Agent nor any Lender shall take or
receive any guaranty for the benefit of any obligations of the Company or its
Subsidiaries other than the Guarantees. The existence of rights of setoff shall
not be prohibited; provided, that neither the Agent nor any Lender shall
exercise any such rights of setoff against the property of the Company or any of
its Subsidiaries or any Guarantor unless (i) a Notice of Actionable Default has
been given and the Requisite Lenders shall have consented in writing to such
exercise and (ii) all amounts realized from such exercise are delivered to the
Collateral Agent as required by Section 8.
25. Accounting; Invalidated Payments. (a) The Agent and each
Lender agrees to render an accounting to any of the others of the outstanding
amounts of the Obligations, of receipts of payments from the Company, any
Subsidiary of the Company and any Guarantor and of other items relevant to the
provisions of this Agreement upon the reasonable request from one of the others
as soon as reasonably practicable after such request.
(b) To the extent that any payment received by any Lender
pursuant to a distribution under Section 9(a) hereof is subsequently
invalidated, declared fraudulent or preferential, set aside or required to be
paid to a trustee, receiver, or any other party under any
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bankruptcy act, state or federal law, common law or equitable cause, then each
other Lender that received a payment pursuant to such distribution shall
purchase from the Lender whose payment was invalidated (the "AFFECTED LENDER"),
at such time as the Affected Lender is required to return or repay such payment,
an undivided participation interest in the Affected Lender's Obligations in an
amount such that after such purchase the amount of such distribution (after
deduction of the invalidated payment) shall have been shared ratably among the
Lenders as contemplated by Section 9(a) hereof.
26. Continuing Agreement. This Agreement shall in all respects
be a continuing, absolute, unconditional and irrevocable agreement, and shall
remain in full force and effect until terminated in accordance with Section 20.
Without limiting the generality of the foregoing, this Agreement shall survive
the commencement of any bankruptcy, reorganization, compromise, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar
proceeding involving the Company, a Subsidiary of the Company or a Guarantor.
The Agent and each Lender agrees that this Agreement shall continue to be
effective or be reinstated, as the case may be, if at any time any payment (in
whole or in part) of any of the Obligations pursuant to any distribution
hereunder is rescinded or must otherwise be restored by the Agent or any Lender,
upon the insolvency, bankruptcy or reorganization of the Company, a Subsidiary
of the Company or a Guarantor or otherwise, as though such payment had not been
made.
27. Representations and Warranties. Each of the parties hereto
severally represents and warrants to the other parties hereto that it has full
corporate power, and has taken all action necessary, to execute and deliver this
Agreement and to fulfill its obligations hereunder, and that no governmental or
other authorizations are required in connection herewith, and that this
Agreement constitutes its legal, valid and binding obligation, enforceable in
accordance with its terms, except as limited by bankruptcy, insolvency,
reorganization, moratorium, regulatory and similar laws of general application
and by general principles of equity.
28. Binding Effect. This Agreement shall be binding upon, and
inure to the benefit of and be enforceable by, the Collateral Agent, the Agent,
the Lenders and each of their respective successors, transferees and assigns.
Without limiting the generality of the foregoing sentence, if any Lender assigns
or otherwise transfers (in whole or in part) to any other person or entity the
Obligations to such Lender under the Bank Credit Agreements or the Note
Agreements, such other person or entity shall thereupon become vested with all
rights and benefits, and become subject to all the obligations, in respect
thereof granted to or imposed upon such Lender under this Agreement.
29. No Reliance by Company. None of the Company, any
Subsidiary of the Company, or any Guarantor shall have any rights under this
Agreement or be entitled, in any manner whatsoever, to rely upon or enforce, or
to raise as a defense, the provisions of this Agreement or the failure of the
Collateral Agent, the Agent or any Lender to comply with such provisions.
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30. Other Proceedings. Nothing contained herein shall limit or
restrict the independent right of the Agent or any Lender to initiate an action
or actions in any bankruptcy, reorganization, compromise, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar
proceeding in its individual capacity and to appear or to be heard on any matter
before the bankruptcy or other applicable court in any such proceeding,
including, without limitation, with respect to any questions concerning the
post-petition usage of collateral and post-petition financing arrangement;
provided that neither the Agent nor any Lender shall contest the validity or
enforceability of or seek to avoid, have declared fraudulent or have set aside
any of the Obligations. The Collateral Agent shall not have the right to
compromise the pre-petition adequate protection rights of the Lenders with
respect to the post-petition usage of cash collateral or other post-petition
financing without the consent of the Requisite Lenders.
31. Amendments and Waivers. No amendment to or waiver of any
provision of this Agreement, nor consent to any departure by any Lender, the
Agent or the Collateral Agent herefrom, shall in any event be effective unless
the same shall be in writing and signed by each Noteholder, the Agent, on behalf
of the Banks, and the Collateral Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No consent of the Company, a Subsidiary Borrower, or a Guarantor shall be
required for any such amendment, waiver or departure unless it relates to a
provision of this Agreement expressly binding upon the Company, such Subsidiary
Borrower, or such Guarantor.
32. Notices. All notices and other communications provided to
any party under this Agreement shall be in writing or by facsimile and
addressed, delivered or transmitted to such party at its address or facsimile
number set forth (a) in the case of the Agent, the Collateral Agent and each of
the Banks, on Annex I hereto, (b) in the case of the 2001 Noteholder, on Annex
II hereto, (c) in the case of the 2005 Noteholder, on Annex III hereto, (d) in
the case of the Company, the Subsidiary Borrowers or any Guaranty, on Annex IV
hereto, or (e) in any case, at such other address or facsimile number as may be
designated by such party in a notice to the other parties. Any notice, if mailed
and properly addressed with postage prepaid or if properly addressed and sent by
prepaid courier service, shall be deemed given when received; and notice, if
transmitted by facsimile, shall be deemed given when transmitted if actually
received, and the burden or proving receipt shall be on the transmitting party.
So long as no default shall have occurred and be continuing under the Bank
Credit Agreements or the Note Agreements, each of the Agent and each Noteholder
agrees to use its best efforts to send to the Company a copy of any notice such
party gives to the other under this Agreement, but the failure to send such copy
to the Company shall not affect the validity of such notice or create a cause of
action against or cause a forfeiture of any rights of the party failing to send
such copy or create any claim or right on behalf of the Company or any of its
Subsidiaries.
33. No Waiver. No failure or delay on the part of any Lender,
the Agent or the Collateral Agent in exercising any power or right under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further exercise
thereof of the exercise of any other power or right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
13
<PAGE>
34. Severability. Whenever possible each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
35. No Strict Construction. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement.
36. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION,
735 ILCS SECTION 105/5-1 ET SEQ., BUT OTHERWISE WITHOUT REGARD TO THE CONFLICTS
OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS. THIS AGREEMENT CONSTITUTES THE
ENTIRE UNDERSTANDING BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT
MATTER HEREOF AND SUPERSEDES ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT
THERETO.
37. Counterparts. This Agreement may be separately executed
and delivered in counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
constitute one and the same Agreement. Facsimile transmission of the signature
of any party hereto shall be effective as an original signature.
38. Headings. Section headings used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
The remainder of this page is intentionally blank.
14
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers.
BANK ONE, NA, having its principal office in
Chicago, Illinois, formerly known as The
First National Bank of Chicago, as Agent for
itself an on behalf of the Banks and as
Collateral Agent hereunder
By: /s/ Kevin Gillen
----------------------------------------
Title: Vice President
-------------------------------------
BANK ONE CANADA, as a Bank
By: /s/ Randall Taylor
----------------------------------------
Title: Sr. Vice President
-------------------------------------
HARRIS TRUST AND SAVINGS BANK, as a Bank
By: /s/ Catherine Ciolek
----------------------------------------
Title: Vice President
-------------------------------------
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK
INTERNATIONAL", NEW YORK BRANCH, as a Bank
By:
----------------------------------------
Title:
-------------------------------------
C.M. LIFE INSURANCE COMPANY, as a 2001
Noteholder
By: David Babson and Company Incorporated,
as Investment Sub-Adviser
<PAGE>
By: /s/ Richard E. Spencer II
----------------------------------------
Title: Managing Director
-------------------------------------
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
as a 2005 Noteholder
By: /s/ William S. Engelking
----------------------------------------
Title: Vice President
-------------------------------------
Acknowledged by:
AG-CHEM EQUIPMENT CO., INC.
By: /s/ John Retherford
-------------------------------------
Title: CFO
----------------------------------
AG-CHEM EQUIPMENT CANADA, LTD.
By: /s/ John Retherford
-------------------------------------
Title: CFO
----------------------------------
AG-CHEM EUROPE, B.V.
By: /s/ John Retherford
-------------------------------------
Title: CFO
----------------------------------
AG-CHEM SALES CO., INC.
By: /s/ John Retherford
-------------------------------------
Title: CFO
----------------------------------
LOR*AL PRODUCTS, INC.
By: /s/ John Retherford
-------------------------------------
Title: CFO
----------------------------------
AG-CHEM MANUFACTURING, INC.
By: /s/ John Retherford
-------------------------------------
Title: CFO
----------------------------------
<PAGE>
ANNEX I
SHORT-TERM LENDERS: The following are the "Short-Term Lenders":
Bank One, NA
1 Bank One Plaza
Chicago, Illinois 60670
Attention: Jenny Gilpin
Facsimile: 312-732-1117
Cooperatieve Centrale Raiffeisen-Boerenleenbank
B.A., "Rabobank International", New York branch
245 Park Avenue
New York, New York 10167
Attention: Corporate Services Department
Facsimile: 212-818-0233
Harris Trust and Savings Bank
111 West Monroe Street
10th Floor West
Chicago, Illinois 60603
Attention: Andrew Claar
Facsimile: 312-293-5040
LONG-TERM LENDERS: The Short-Term Lenders and the following constitute the
"Long-Term Lenders":
Bank One Canada
161 Bay Street, Suite 4240
Toronto, Ontario M5J 2S1
Canada
Attention: Jerry Hynes
Facsimile: 416-363-7574
<PAGE>
ANNEX II
2001 NOTEHOLDER: The following is the "2001 Noteholder":
C.M. Life Insurance Company
c/o The Bank of New York
P.O. Box 19266
Attention: P&I Department
Newark, NJ 07195
<PAGE>
ANNEX III
2005 NOTEHOLDER: The following is "2005 Noteholder":
The Prudential Insurance Company of America
c/o Prudential Capital Group
Two Prudential Capital Group
180 N. Stetson Street - Suite 5600
Chicago, Illinois 60601-6716
Attention: Managing Director
Facsimile: 312-540-4272
<PAGE>
ANNEX IV
GUARANTORS: The following are "Guarantors":
Ag-Chem Sales Co., Inc.
Ag-Chem Equipment Canada, Ltd.
Lor*Al Products, Inc.
Ag-Chem Manufacturing, Inc.
NOTICE INFORMATION: Any notice or other information required to be delivered
hereunder to the Company, the Subsidiary Borrowers, and/or any Guarantor shall
be delivered to the following:
Ag-Chem Equipment Co., Inc.
5720 Smetana Drive
Minnetonka, Minnesota 55343
Attention: John Retherford
Facsimile: 612-933-8799
EXHIBIT 10.21
SECURITY AGREEMENT
DATED AS OF MAY 15, 2000
between
AG-CHEM EQUIPMENT CO., INC.
AND
BANK ONE, NA
AS AGENT
<PAGE>
TABLE OF CONTENTS
PAGE
----
SECTION 1. Defined Terms.......................................................1
SECTION 2. Grant of Security...................................................2
SECTION 3. [RESERVED]..........................................................5
SECTION 4. Grantor Remains Liable..............................................5
SECTION 5. Representations and Warranties......................................5
SECTION 6. Perfection and Maintenance of Security Interests and Liens..........6
SECTION 7. Financing Statements................................................7
SECTION 8. Filing Costs........................................................7
SECTION 9. Schedule of Collateral..............................................8
SECTION 10. Equipment and Inventory............................................8
SECTION 11. Accounts...........................................................8
SECTION 12. Leased Real Property...............................................9
SECTION 13. General Covenants.................................................10
SECTION 14. The Agent Appointed Attorney-in-Fact..............................10
SECTION 15. The Agent May Perform.............................................11
SECTION 16. The Agent's Duties................................................11
SECTION 17. Remedies..........................................................11
SECTION 18. Exercise of Remedies..............................................12
SECTION 19. License...........................................................12
SECTION 20. Injunctive Relief.................................................13
SECTION 21. Interpretation and Inconsistencies; Merger........................13
SECTION 22. Expenses..........................................................13
SECTION 23. Amendments, Etc...................................................13
SECTION 24. Notices...........................................................13
SECTION 25. Continuing Security Interest; Termination.........................13
SECTION 26. Severability......................................................14
SECTION 27. GOVERNING LAW.....................................................14
SECTION 28. CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL...........14
(A) NON-EXCLUSIVE JURISDICTION...........................................14
(B) VENUE................................................................15
(C) WAIVER OF JURY TRIAL.................................................15
i
<PAGE>
EXHIBITS
- --------
Exhibit A-1 Form of Landlord Agreement
Exhibit A-2 Form of Mortgagee Agreement
Exhibit B Form of Bailee Letter
SCHEDULES
- ---------
Schedule 1 Locations of Collateral
Schedule 1-A Third Party Locations
Schedule 1-B Financing Statement Filing Locations
Schedule 2 Trade Names
Schedule 3 Pledged Debt
ii
<PAGE>
SECURITY AGREEMENT
This SECURITY AGREEMENT (the "Agreement"), dated as of May 15, 2000 is
made by AG-CHEM EQUIPMENT CO., INC., a Minnesota corporation (the "Grantor"), in
favor of BANK ONE, NA, having its principal office in Chicago, Illinois,
formerly known as The First National Bank of Chicago (the "Agent"), for its
benefit and for the benefit of the "Holders of Secured Obligations" (as defined
below) who are, or may hereafter become, parties to either of the Credit
Agreements or Note Agreements referred to below.
PRELIMINARY STATEMENT
The Grantor entered into a Third Amended and Restated Long Term
Revolving Credit Agreement, dated as of June 4, 1999, (as the same may be
amended, restated, supplemented or otherwise modified from time to time, the
"Multicurrency Agreement") among the Grantor, the institutions from time to time
party thereto as lenders (the "Long Term Lenders"), the Agent, as contractual
representative for the Long Term Lenders, and Ag-Chem Equipment Canada Ltd. and
Ag-Chem Europe B.V. (Ag-Chem Europe B.V., together with Ag-Chem Equipment
Canada, the "Multicurrency Subsidiaries"). The Grantor also entered into a Short
Term Revolving Credit Agreement, dated as of June 4, 1999 (as the same may be
amended, restated, supplemented or otherwise modified from time to time, the
"Short Term Agreement," and taken together with the Multicurrency Agreement, the
"Credit Agreements"), among the Grantor, the institutions from time to time
party thereto as Lenders (the "Short Term Lenders", and together with the Long
Term Lenders, the "Lenders"), and the Agent.
The Grantor also entered into (i) a Note Agreement, dated as of April
6, 1994, with C.M. Life Insurance Company and (ii) a Note Agreement, dated as of
October 10, 1995, with The Prudential Insurance Company of America (together,
the "Note Agreements").
The Credit Agreements and the Note Agreements provide for the making of
loans, advances and/or other financial accommodations (such loans, advances and
other financial accommodations being hereinafter referred to collectively as the
"Loans") to or for the benefit of the Grantor. The Grantor has agreed to grant
to the Agent on behalf of the Holders of Secured Obligations the security
interest contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Defined Terms. Unless otherwise defined herein, terms
defined in the Credit Agreements are used herein as therein defined, and the
following terms shall have the following meanings (such meanings being equally
applicable to both the singular and the plural forms of the terms defined):
<PAGE>
"Agreement" shall mean this Security Agreement, as the same may from
time to time be amended, restated, modified or supplemented, and shall refer to
this Agreement as the same may be in effect at the time such reference becomes
operative.
"Collateral" shall mean all property and rights in property now owned
or hereafter at any time acquired by the Grantor in or upon which a Lien is
granted in favor of the Agent by the Grantor under this Agreement, including,
without limitation, the property described in Section 2.
"Collateral Sharing Agreement" shall mean the Collateral Sharing
Agreement, dated as of the date hereof, as the same may be amended, restated,
supplemented, or otherwise modified from time to time, among the Holders of
Secured Obligations and the Agent, as acknowledged by the Grantor and certain of
its affiliates.
"Event of Default" shall mean an "Event of Default" as defined in the
Credit Agreements and the comparable term as it is set forth in the Note
Agreements.
"Holders of Secured Obligations" shall mean the holders of the Secured
Obligations from time to time and shall include their respective successors,
transferees and assigns.
"Lien" shall mean any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or security
agreement of any kind or nature whatsoever (including, without limitation, the
interest of a vendor or lessor under any conditional sale, Capital Lease, or
other title retention agreement).
"Pledged Debt" shall have the meaning set forth in Section 2 of this
Agreement.
"Secured Obligations" shall mean the aggregate "Obligations" as defined
in the Collateral Sharing Agreement.
"UCC" shall mean the Uniform Commercial Code as the same may, from time
to time, be in effect in the State of Illinois; provided, however, in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of the Agent's and the Holders of Secured Obligations'
security interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of Illinois, the term "UCC"
shall mean the Uniform Commercial Code as in effect in such other jurisdiction
for purposes of the provisions hereof relating to such attachment, perfection or
priority and for purposes of definitions related to such provisions.
SECTION 2. Grant of Security. To secure the prompt and complete
payment, observance and performance of the Secured Obligations, the Grantor
hereby assigns and pledges to the Agent, for the benefit of itself and the
Holders of Secured Obligations, and hereby grants to the Agent, for the benefit
of itself and the Holders of Secured Obligations, a security interest in all of
the Grantor's right, title and interest in and to the following, whether now
owned or existing or hereafter arising or acquired and wheresoever located:
2
<PAGE>
ACCOUNTS: All "accounts" as such term is defined in Section 9-106 of
the UCC, whether now owned or hereafter acquired or arising; the Grantor intends
that the term "accounts", as used herein, be construed in its broadest sense,
and such term shall include, without limitation, all present and future
accounts, accounts receivable and other rights of the Grantor to payment for
goods sold or leased or for services rendered (except those evidenced by
instruments or chattel paper), whether now existing or hereafter arising and
wherever arising, and whether or not they have been earned by performance
(collectively, "Accounts");
INVENTORY: All "inventory" as defined in Section 9-109(4) of the UCC,
whether now owned or hereafter acquired or arising; the Grantor intends that the
term "inventory", as used herein, be construed in its broadest sense, and such
term shall include, without limitation, all goods now owned or hereafter
acquired by the Grantor (wherever located, whether in the possession of the
Grantor or of a bailee or other person for sale, storage, transit, processing,
use or otherwise and whether consisting of whole goods, spare parts, components,
supplies, materials, or consigned, returned or repossessed goods) which are held
for sale or lease, which are to be furnished (or have been furnished) under any
contract of service or which are raw materials, work in process or materials
used or consumed in the Grantor's business (collectively, "Inventory");
EQUIPMENT: All "equipment" as such term is defined in Section 9-109(2)
of the UCC, whether now owned or hereafter acquired or arising; the Grantor
intends that the term "equipment", as used herein, be construed in its broadest
sense, and such term shall include, without limitation, all machinery, all
manufacturing, distribution, selling, data processing and office equipment, all
furniture, furnishings, appliances, tools, tooling, molds, dies, and all other
goods of every type and description (other than Inventory), in each instance
whether now owned or hereafter acquired by the Grantor and wherever located
(collectively, "Equipment"), but in no case shall include fixtures located on
real property subject to "Permitted Liens" (as defined in the Bank Credit
Agreements);
GENERAL INTANGIBLES: All "general intangibles" as defined in Section
9-106 of the UCC, whether now owned or hereafter acquired or arising; the
Grantor intends that the term "general intangibles", as used herein, be
construed in its broadest sense, and such term shall include, without
limitation, all rights, interests, choses in action, causes of actions, claims
and all other intangible property of the Grantor of every kind and nature (other
than Accounts), in each instance whether now owned or hereafter acquired by the
Grantor and however and whenever arising, including, without limitation, all
corporate and other business records; all loans, royalties, and other
obligations receivable; customer lists, credit files, correspondence, and
advertising materials; firm sale orders, other contracts and contract rights;
all interests in partnerships and joint ventures; all tax refunds and tax refund
claims; all right, title and interest under leases, subleases, licenses and
concessions and other agreements relating to real or personal property; all
payments due or made to the Grantor in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of any property by any person
or governmental authority; all deposit accounts (general or special) with any
bank or other financial institution, including, without limitation, any deposits
or other sums at any time credited by or due to the
3
<PAGE>
Grantor from any of the Holders of Secured Obligations or any of their
respective Affiliates with the same rights therein as if the deposits or other
sums were credited by or due from such Holder of Secured Obligations; all
credits with and other claims against carriers and shippers; all rights to
indemnification; all patents, and patent applications (including all reissues,
divisions, continuations and extensions); all service marks and service mark
applications; all trade secrets and inventions; all copyrights and copyright
applications (including all computer software and related documentation); all
rights and interests in and to trademarks, trademark registrations and
applications therefor, trade names, corporate names, brand names, slogans, all
goodwill associated with the foregoing; all license agreements and franchise
agreements, all reversionary interests in pension and profit sharing plans and
reversionary, beneficial and residual interest in trusts; all proceeds of
insurance of which the Grantor is beneficiary; and all letters of credit,
guaranties, liens, security interests and other security held by or granted to
the Grantor; and all other intangible property, whether or not similar to the
foregoing;
LAB PROCESSING AND ENGINEERING INFORMATION: All rights and interests in
and to processes, lab journals, and notebooks, data, trade secrets, know-how,
product formulae and information, manufacturing, engineering and other drawings
and manuals, technology, blueprints, research and development reports, agency
agreements, technical information, technical assistance, engineering data,
design and engineering specifications, and similar materials recording or
evidencing expertise used in or employed by the Grantor (including any license
for the foregoing);
CONTRACT RIGHTS: All rights and interests in and to any pending or
executory contracts, requests for quotations, invitations for bid, agreements,
leases and arrangements of which the Grantor is a party to or in which the
Grantor has an interest;
CHATTEL PAPER, INSTRUMENTS AND DOCUMENTS: All chattel paper, leases,
all instruments, including, without limitation, the notes and debt instruments
described in SCHEDULE 3 (the "Pledged Debt") and all payments thereunder and
instruments and other property from time to time delivered in respect thereof or
in exchange therefor, and all bills of sale, bills of lading, warehouse receipts
and other documents of title, in each instance whether now owned or hereafter
acquired by the Grantor;
INTEREST AND CURRENCY CONTRACTS: Any and all interest rate or currency
exchange agreements or derivative agreements, including without limitation, cap,
collar, floor, forward or similar agreements or other rate protection
arrangements;
INVESTMENT PROPERTY: Any and all investment property (as defined in
Section 9-115(1)(f) of the UCC) of the Grantor, including any instruments,
certificates of deposit, equity interests or investments of any kind; and
OTHER PROPERTY: All property or interests in property now owned or
hereafter acquired by the Grantor which now may be owned or hereafter may come
into the possession, custody or control of the Agent or any of the Holders of
Secured Obligations or any agent or
4
<PAGE>
Affiliate of any of them in any way and for any purpose (whether for
safekeeping, deposit, custody, pledge, transmission, collection or otherwise);
and all rights and interests of the Grantor, now existing or hereafter arising
and however and wherever arising, in respect of any and all (i) notes, drafts,
letters of credit, stocks, bonds, and debt and equity securities, whether or not
certificated, investment property and warrants, options, puts and calls and
other rights to acquire or otherwise relating to the same; (ii) money; (iii)
proceeds of loans, including, without limitation, loans made under the Credit
Agreements; and (iv) insurance proceeds and books and records relating to any of
the property covered by this Agreement; together, in each instance, with all
accessions and additions thereto, substitutions therefor, and replacements,
proceeds and products thereof.
The Collateral upon which the Agent has been granted a Lien hereunder
shall not include property and rights in property subject to "Permitted Liens"
(as defined in the Credit Agreements) so long as such property and rights in
property are subject to such Permitted Liens.
SECTION 3. [RESERVED].
SECTION 4. Grantor Remains Liable. Anything herein to the contrary
notwithstanding, (a) the Grantor shall remain solely liable under the contracts
and agreements included in the Collateral to the extent set forth therein to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by the Agent of any of
its rights hereunder shall not release the Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral, and
(c) neither the Agent nor the Holders of Secured Obligations shall have any
responsibility, obligation or liability under the contracts and agreements
included in the Collateral by reason of this Agreement, nor shall the Agent or
the Holders of Secured Obligations be required or obligated, in any manner, to
(i) perform or fulfill any of the obligations or duties of the Grantor
thereunder, (ii) make any payment, or make any inquiry as to the nature or
sufficiency of any payment received by the Grantor or the sufficiency of any
performance by any party under any such contract or agreement or (iii) present
or file any claim, or take any action to collect or enforce any claim for
payment assigned hereunder.
SECTION 5. Representations and Warranties. The Grantor represents and
warrants, as of the date of this Agreement and as of each date hereafter (except
for changes permitted or contemplated by this Agreement) until termination of
this Agreement pursuant to Section 25:
(a) The correct corporate name of the Grantor is set forth in the first
paragraph of this Agreement. The locations listed on SCHEDULE 1 constitute all
locations at which Inventory and/or Equipment is located and the Grantor has
exclusive possession and control of such Equipment and Inventory, except for (i)
such Inventory and Equipment which is (A) temporarily in transit between such
locations, or (B) temporarily stored with third parties or held by third parties
for processing, storage, engineering, evaluation or repairs, the proper
corporate names of which third parties, the location of such Inventory and/or
Equipment, and the nature of the relationship between the Grantor and such third
parties are set forth on SCHEDULE 1-A, as such SCHEDULE 1-A may be amended or
supplemented from time to time, or have been otherwise provided to the
5
<PAGE>
Agent, (ii) Equipment sold to and subsequently repurchased from a third party by
the Grantor for the period beginning on the date of such repurchase and ending
on the date of the re-sale of such Equipment to a different third party, (iii)
Equipment transferred from a third party to the Grantor (such Equipment,
"Trade-In Equipment") in partial satisfaction of the purchase price for
Equipment sold by the Grantor to such third party for the period beginning on
the date of the transfer of such Trade-In Equipment and ending on the date the
Grantor sells such Trade-In Equipment, and (iv) Equipment used by the Grantor in
connection with demonstrations to prospective purchasers of such Equipment;
provided, that the aggregate value of the Equipment described in clauses (ii),
(iii), and (iv) does not exceed $10,000,000. The chief place of business and
chief executive office of the Grantor are located at the address of the Grantor
set forth below the Grantor's signatures on the Credit Agreements. All records
concerning any Accounts and all originals of chattel paper which evidence any
Account are located at the addresses listed on SCHEDULE 1 and none of the
Accounts is evidenced by a promissory note or other instrument except for such
notes and other instruments delivered to the Agent.
(b) The Grantor is the legal and beneficial owner of the Collateral
free and clear of all Liens except for Liens permitted as of the date hereof
under the Credit Agreements and the Note Agreements. The Grantor currently
conducts business under the name Ag-Chem Equipment Co., Inc., and, in certain
areas and for certain operations, the additional trade names listed on SCHEDULE
2. The Grantor uses no trade names or fictitious names, except as set forth on
SCHEDULE 2.
(c) This Agreement creates in favor of the Agent a legal, valid and
enforceable security interest in the Collateral. When financing statements have
been filed in the appropriate offices against the Grantor in the locations
listed on SCHEDULE 1-B, the Agent will have a fully perfected first priority
lien on, and security interest in, the Collateral in which a security interest
may be perfected by such filing, subject only to Liens permitted as of the date
hereof under the Credit Agreements and the Note Agreements.
(d) No authorization, approval or other action by, and no notice to or
filing with, any Governmental Authority that has not already been taken or made
and is in full force and effect is required (i) for the grant by the Grantor of
the security interest in the Collateral granted hereby; (ii) for the execution,
delivery or performance of this Agreement by the Grantor; or (iii) for the
exercise by the Agent of any of its rights or remedies hereunder.
(e) The Pledged Debt issued by any Affiliate of the Grantor, and to the
best of the Grantor's knowledge, all other Pledged Debt, has been duly
authorized, issued and delivered, and is the legal, valid, binding and
enforceable obligation of the respective issuer thereof.
SECTION 6. Perfection and Maintenance of Security Interests and Liens.
The Grantor agrees that until all of the Secured Obligations (other than
contingent indemnity Obligations) have been fully satisfied and each of the
Credit Agreements and the Note Agreements has been terminated, the Agent's
security interests in and Liens on and against the Collateral and all proceeds
and products thereof shall continue in full force and effect. The Grantor shall
perform
6
<PAGE>
any and all steps reasonably requested by the Agent to perfect, maintain and
protect the Agent's security interests in and Liens on and against the
Collateral granted or purported to be granted hereby or to enable the Agent to
exercise its rights and remedies hereunder with respect to any Collateral,
including, without limitation, (i) executing and filing financing or
continuation statements, or amendments thereof, in form and substance reasonably
satisfactory to the Agent, (ii) delivering to the Agent all certificates, notes,
and other instruments (including, without limitation, all letters of credit on
which the Grantor is named as a beneficiary) representing or evidencing
Collateral, which certificates, notes, and other instruments have been duly
endorsed or are accompanied by duly executed instruments of transfer or
assignment, including, but not limited to, note powers, all in form and
substance satisfactory to the Agent, (iii) at the reasonable direction of Agent,
delivering to the Agent warehouse receipts covering that portion of the
Collateral, if any, located in warehouses and for which warehouse receipts are
issued, (iv) after the occurrence and during the continuance of an Event of
Default, transferring Inventory and Equipment to warehouses designated by the
Agent or taking such other steps as are reasonably deemed necessary by the Agent
to maintain the Agent's control of the Inventory and Equipment, (v) upon the
reasonable request of the Agent, marking conspicuously each document, contract,
chattel paper and all records pertaining to the Collateral with a legend, in
form and substance satisfactory to the Agent, indicating that such document,
contract, chattel paper, or other record pertaining to the Collateral is subject
to the security interest granted hereby, (vi) obtaining waivers of Liens and
access agreements in substantially the following forms: (a) EXHIBIT A-1 hereto
(or such other form as may be agreed to by the Agent) from landlords with
respect to all leases executed after the date hereof, (b) EXHIBIT A-2 hereto (or
such other form as may be agreed to by the Agent) from mortgagees with respect
to all leases executed after the date hereof and (3) EXHIBIT B hereto (or such
other form as may be agreed to by the Agent) from the appropriate Person with
respect to all arrangements pursuant to which Inventory will be stored in public
warehouse facilities after the date hereof, and (vii) executing and delivering
all further instruments and documents, and taking all further action, as the
Agent may reasonably request.
SECTION 7. Financing Statements. To the extent permitted by applicable
law, the Grantor hereby authorizes the Agent to file one or more financing or
continuation statements and amendments thereto, disclosing the security interest
granted to the Agent under this Agreement without the Grantor's signature
appearing thereon, and the Agent agrees to notify the Grantor when such a filing
has been made. The Grantor agrees that a carbon, photographic, photostatic, or
other reproduction of this Agreement or of a financing statement is sufficient
as a financing statement. If any Inventory or Equipment is in the possession or
control of any warehouseman or the Grantor's agents or processors, the Grantor
shall, upon the Agent's request, notify such warehouseman, agent or processor of
the Agent's security interest in such Inventory and Equipment and, upon the
Agent's request, instruct them to hold all such Inventory or Equipment for the
Agent's account and subject to the Agent's instructions.
SECTION 8. Filing Costs. The Grantor shall pay the costs of, or
incidental to, all recordings or filings of all financing statements, including,
without limitation, any filing expenses incurred by the Agent pursuant to
Section 7.
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SECTION 9. Schedule of Collateral. The Grantor shall furnish to the
Agent from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the Agent may reasonably request, all in reasonable detail.
SECTION 10. Equipment and Inventory. The Grantor covenants and agrees
with the Agent that from the date of this Agreement and until termination of
this Agreement pursuant to Section 25, the Grantor shall:
(a) Keep the Equipment and Inventory (other than Equipment or Inventory
sold or disposed of as permitted by the Credit Agreements and the Note
Agreements) at the places specified in Section 5(a), except for (i) Equipment
and Inventory (A) temporarily in transit between such locations or (B)
temporarily stored with the third parties or held by third parties for
processing, storage, engineering, evaluation, or repairs as set forth on
SCHEDULE 1-A, and deliver written notice to the Agent at least thirty (30) days
prior to establishing any other location at which it reasonably expects to
maintain Inventory and/or Equipment in which location or with which third party
all action required by this Agreement shall have been taken with respect to all
such Equipment and Inventory, (ii) Equipment sold to and subsequently
repurchased from a third party by the Grantor for the period beginning on the
date of such repurchase and ending on the date of the re-sale of such Equipment
to a different third party, (iii) Equipment transferred from a third party to
the Grantor (such Equipment, "Trade-In Equipment") in partial satisfaction of
the purchase price for Equipment sold by the Grantor to such third party for the
period beginning on the date of the transfer of such Trade-In Equipment and
ending on the date the Grantor sells such Trade-In Equipment and (iv) Equipment
used by the Grantor in connection with demonstrations to prospective purchasers
of such Equipment; provided, that the aggregate value of the Equipment described
in clauses (ii), (iii) and (iv) does not exceed $10,000,000;
(b) Maintain or cause to be maintained in good repair, working order,
and condition, excepting ordinary wear and tear and damage due to casualty, all
of the Equipment, and make or cause to be made all appropriate repairs, renewals
and replacements thereof, as quickly as practicable after the occurrence of any
loss or damage thereto which are necessary or desirable to such end; and
(c) Comply with the terms of the Credit Agreements and the Note
Agreements with respect to such Equipment and Inventory, including, without
limitation, the maintenance and insurance provisions set forth in Section 5.1(c)
of each of the Credit Agreements.
SECTION 11. Accounts. The Grantor covenants and agrees with the Agent
that from and after the date of this Agreement and until termination of this
Agreement pursuant to Section 25, the Grantor:
(a) Shall keep its chief place of business and chief executive office
and the office where it keeps its records concerning the Accounts at its address
set forth below the Grantor's signature
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<PAGE>
on the Credit Agreements, and keep the offices where it keeps all originals of
all chattel paper which evidence Accounts at the locations therefor specified in
Section 5(a) or, upon thirty (30) days' prior written notice to the Agent, at
such other locations within the United States in a jurisdiction where all
actions required by Section 6 shall have been taken with respect to the
Accounts. The Grantor will hold and preserve such records (in accordance with
the Grantor's usual document retention practices) and chattel paper and will
permit representatives of the Agent at any time during normal business hours to
inspect and make abstracts from such records and chattel paper;
(b) Shall in any suit, proceeding or action brought by the Agent under
any Account comprising part of the Collateral, the Grantor will save, indemnify
and keep each of the Holders of Secured Obligations harmless from and against
all expenses, loss or damage suffered by reason of any defense, setoff,
counterclaim, recoupment or reduction of liability whatsoever of the obligor
thereunder, arising out of a breach by the Grantor of any obligation or arising
out of any other agreement, indebtedness or liability at any time owing to or in
favor of such Holder of Secured Obligations from the Grantor, and all such
obligations of the Grantor shall be and shall remain enforceable against and
only against the Grantor and shall not be enforceable against any of the Holders
of Secured Obligations; and
(c) Shall not sell, transfer, assign or encumber any account,
instrument or chattel paper other than pursuant to the terms of the Credit
Agreements and the Note Agreements.
SECTION 12. Leased Real Property. The Grantor covenants and agrees with
the Agent that from and after the date of this Agreement and until termination
of this Agreement pursuant to Section 25, that:
(a) Promptly following, but not later than ninety (90) days after, the
close of each fiscal year the Grantor will furnish to the Agent a report
certified to be true and correct by the Grantor containing a list of each of the
Grantor's leased premises; the name or names of all owners; rentals being paid;
and whether the Grantor has obtained waivers of Liens and access agreements from
landlords with respect to such premises in accordance with Section 6; and
(b) The Grantor agrees that, after the occurrence and during the
continuation of an Event of Default, the Agent may, but need not, make any
payment or perform any act hereinbefore required of the Grantor with respect to
the Grantor's leased premises in any form and manner deemed expedient. All money
paid for any of the purposes herein authorized and all other moneys advanced by
the Agent to protect the lien hereof shall be additional Secured Obligations
secured hereby and shall become immediately due and payable without notice and
shall bear interest thereon at the default interest rate as provided in the
Credit Agreement until paid to the Agent in full.
(c) The Grantor agrees that it will not amend any lease in a manner
that has a material adverse affect on the interests of the Holders of Secured
Obligations without the Agent's prior written consent.
9
<PAGE>
SECTION 13. General Covenants. The Grantor covenants and agrees with
the Agent that from and after the date of this Agreement and until termination
of this Agreement pursuant to Section 25, the Grantor shall:
(a) Keep and maintain at the Grantor's own cost and expense
satisfactory and complete records of the Grantor's Collateral in a manner
consistent with the Grantor's current business practice, including, without
limitation, a record of all payments received and all credits granted with
respect to such Collateral. The Grantor shall, for the Agent's further security,
deliver and turn over to the Agent or the Agent's designated representatives at
any time following the occurrence and during the continuation of an Event of
Default, any such books and records (including, without limitation, any and all
computer tapes, programs and source and object codes relating to such Collateral
in which the Grantor has an interest or any part or parts thereof); and
(b) The Grantor will not create, permit or suffer to exist, and will
defend the Collateral against, and take such other action as is necessary to
remove, any Lien on such Collateral other than Liens permitted as of the date
hereof under the Credit Agreements and the Note Agreements, and will defend the
right, title and interest of the Agent in and to the Grantor's rights to such
Collateral, including, without limitation, the proceeds and products thereof,
against the claims and demands of all Persons whatsoever.
SECTION 14. The Agent Appointed Attorney-in-Fact. The Grantor hereby
irrevocably appoints the Agent as the Grantor's attorney-in-fact, with full
authority in the place and stead of the Grantor and in the name of the Grantor
or otherwise, following the occurrence and during the continuation of an Event
of Default, in the Agent's discretion, to take any action and to execute any
instrument which the Agent may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation, to:
(i) obtain and adjust insurance required to be paid to the
Agent or any Holders of Secured Obligations pursuant to the Credit
Agreements and the Note Agreements;
(ii) ask, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
(iii) receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (i)
or (ii) above; and
(iv) file any claims or take any action or institute any
proceedings which the Agent may deem necessary or desirable for the
collection of any of the Collateral, or otherwise to enforce the rights
of the Agent with respect to any of the Collateral;
In addition, the Agent may at any time:
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<PAGE>
(i) obtain access to records maintained for the Grantor by
computer services companies and other service companies or bureaus;
(ii) send requests under the Grantor's, the Agent's or a
fictitious name to the Grantor's customers or account debtors for
verification of Accounts provided that the Agent gives the Grantor
notice prior to initiating any such verifications; and
(iii) do all other things reasonably necessary to carry out
this Agreement.
SECTION 15. The Agent May Perform. If the Grantor fails to perform any
agreement contained herein or in the Credit Agreements or the Note Agreements,
the Agent may, upon three days' prior notice to the Grantor, perform, or cause
performance of, such agreement, and the expenses of the Agent incurred in
connection therewith shall be payable by the Grantor under Section 22.
SECTION 16. The Agent's Duties. The powers conferred on the Agent
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the safe custody
of any Collateral in its possession and the accounting for moneys actually
received by it hereunder, the Agent shall not have any duty as to any
Collateral. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession if the Collateral
is accorded treatment substantially equal to that which the Agent accords its
own property, it being understood that the Agent shall be under no obligation to
take any necessary steps to preserve rights against prior parties or any other
rights pertaining to any Collateral, but may do so at its option, and all
reasonable expenses incurred in connection therewith shall be for the sole
account of the Grantor and shall be added to the Secured Obligations.
SECTION 17. Remedies. (a) If any Event of Default shall have occurred
and be continuing:
(i) The Agent shall have, in addition to other rights and
remedies provided for herein or otherwise available to it, all the
rights and remedies of a secured party upon default under the UCC
(whether or not the UCC applies to the affected Collateral) and
further, the Agent may, without notice, demand or legal process of any
kind (except as may be required by law), all of which the Grantor
waives, at any time or times, (x) enter the Grantor's owned or leased
premises where Collateral is located and take physical possession of
the Collateral and maintain such possession on the Grantor's owned or
leased premises, at no cost to the Agent or any of the Holders of
Secured Obligations, or remove the Collateral, or any part thereof, to
such other place(s) as the Agent may desire, (y) require the Grantor
to, and the Grantor hereby agrees that it will at its expense and upon
request of the Agent forthwith, assemble all or any part of the
Collateral as directed by the Agent and make it available to the Agent
at a place to be designated by the Agent which is reasonably convenient
to the Agent and (z) without notice except as specified
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<PAGE>
below, sell, lease, assign, grant an option or options to purchase or
otherwise dispose of the Collateral or any part thereof at public or
private sale, at any exchange, broker's board or at any of the offices
of the Agent or elsewhere, for cash, on credit or for future delivery,
and upon such other terms as the Agent may deem commercially
reasonable. The Grantor agrees that, to the extent notice of sale shall
be required by law, at least ten (10) days' notice to the Grantor of
the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification.
The Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Agent may adjourn
any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned;
(ii) The Agent shall apply all cash proceeds received by the
Agent in respect of any sale of, collection from, or other realization
upon all or any part of the Collateral (after payment of any amounts
payable to the Agent pursuant to Section 22), for the benefit of the
Holders of Secured Obligations, against all or any part of the Secured
Obligations in such order as is required by the Collateral Sharing
Agreement, or, to the extent not specified therein, as is determined by
the Holders of Secured Obligations, and, with respect to the
application of such proceeds subsequent to satisfaction of the
conditions set forth in the Collateral Sharing Agreement or as agreed
to by the Holders of Secured Obligations, as applicable, in such order
as may be required under the Credit Agreement with respect to amounts
remitted to the Lenders and each Note Agreement with respect to amounts
remitted to the parties thereto. Any surplus of such cash or cash
proceeds held by the Agent and remaining after payment in full of all
the Secured Obligations shall be paid over to the Grantor or to
whomsoever may be lawfully entitled to receive such surplus;
(b) The Grantor waives all claims, damages and demands against the
Agent arising out of the repossession, retention or sale of any of the
Collateral or any part or parts thereof, except any such claims, damages and
awards arising out of the gross negligence or willful misconduct of the Agent or
any of the Holders of Secured Obligations, as the case may be, as determined in
a final non-appealed judgment of a court of competent jurisdiction; and
(c) The rights and remedies provided under this Agreement are
cumulative and may be exercised singly or concurrently and are not exclusive of
any rights and remedies provided by law or equity.
SECTION 18. Exercise of Remedies. In connection with the exercise of
its remedies pursuant to Section 17, the Agent may, (i) exchange, enforce, waive
or release any portion of the Collateral and any other security for the Secured
Obligations; (ii) apply such Collateral or security and direct the order or
manner of sale thereof as the Agent may, from time to time, determine; and (iii)
settle, compromise, collect or otherwise liquidate any such Collateral or
security in any manner following the occurrence and during the continuation of
an Event of Default, without affecting or impairing the Agent's right to take
any other further action with respect to any Collateral or security or any part
thereof.
SECTION 19. License. The Agent is hereby granted a license or other
right to use, following the occurrence and during the continuance of an Event of
Default, without charge, (a)
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<PAGE>
the Grantor's labels, patents, copyrights, trade secrets, trade names,
trademarks, service marks, customer lists and advertising matter, or any
property of a similar nature, as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral, provided that
the Agent uses quality standards at least substantially equivalent to those of
the Grantor for the manufacture, advertising, sale and distribution of the
Grantor's products and services and (b) the Grantor's rights under all licenses.
SECTION 20. Injunctive Relief. The Grantor recognizes that in the event
the Grantor fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, any remedy of law may prove to be inadequate
relief to the Holders of Secured Obligations; therefore, the Grantor agrees that
the Agent shall be entitled to temporary and permanent injunctive relief in any
such case without the necessity of proving actual damages.
SECTION 21. Interpretation and Inconsistencies; Merger. (a) The rights
and duties created by this Agreement shall, in all cases, be interpreted
consistently with, and shall be in addition to (and not in lieu of), the rights
and duties created by the Credit Agreements, the Note Agreements, the Collateral
Sharing Agreement and the other Loan Documents. In the event that any provision
of this Agreement shall be inconsistent with any provision of any other Loan
Document, such provision of the other Loan Document shall govern.
(b) Except as provided in subsection (a) above, this Agreement
represents the final and entire agreement of the Grantor and the Agent with
respect to the matters contained herein.
SECTION 22. Expenses. The Grantor will upon demand pay to the Agent the
amount of any and all reasonable expenses, including the reasonable fees and
disbursements of its counsel and of any experts and agents, as provided in the
Credit Agreements, the Note Agreements, and/or the Collateral Sharing Agreement.
SECTION 23. Amendments, Etc. No amendment or waiver of any provision of
this Agreement nor consent to any departure by the Grantor herefrom shall in any
event be effective unless the same shall be in writing and signed by the Agent
(in accordance with the Collateral Sharing Agreement) and the Grantor, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
SECTION 24. Notices. All notices and other communications provided for
hereunder shall be delivered in the manner set forth in Section 8.2 of each of
the Credit Agreements.
SECTION 25. Continuing Security Interest; Termination. (a) Except as
provided in Section 25(b), this Agreement shall create a continuing security
interest in the Collateral and shall (i) remain in full force and effect until
the later of the payment or satisfaction in full of the Secured Obligations
(other than contingent indemnity Obligations) and the termination of each of the
Credit Agreements and the Note Agreements, (ii) be binding upon the Grantor, its
successors and assigns and (iii) except to the extent that the rights of any
transferor or assignor are limited by the terms of each of the Credit Agreements
and the Note Agreements, inure,
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<PAGE>
together with the rights and remedies of the Agent hereunder, to the benefit of
the Agent and any of the Holders of Secured Obligations. Nothing set forth
herein or in any other Loan Document is intended or shall be construed to give
any other Person any right, remedy or claim under, to or in respect of this
Agreement or any other Loan Document or any Collateral. The Grantor's successors
and assigns shall include, without limitation, a receiver, trustee or
debtor-in-possession thereof or therefor.
(b) The security interest granted hereby shall terminate and all rights
to the Collateral shall revert to the Grantor on the earlier of the date on
which (i) the Agent shall have received from each Holder of Secured Obligations
written notice that all "Obligations" (as defined in the Collateral Sharing
Agreement) owing to such Holder of Secured Obligations have been paid in full or
(ii) the Agent shall have received written notice from the Holders of Secured
Obligations directing the Agent to release the Collateral and stating that the
Holders of Secured Obligations have consented to such release under the terms of
the Credit Agreements and the Note Agreements; provided, that no such
termination shall occur prior to the payment in full of all of the Agent's
"Expenses" (as defined in the Collateral Sharing Agreement). Upon the
termination of the security interest, the Grantor shall be entitled to the
prompt return, upon its request and at its expense, of such of the Collateral
held by the Agent as shall not have been sold or otherwise applied pursuant to
the terms hereof and the Agent will, at the Grantor's expense, promptly execute
and deliver to the Grantor such other documents as the Grantor shall reasonably
request to evidence such termination. In connection with any sales of assets
permitted under the Credit Agreements and the Note Agreements, the Agent will
promptly release and terminate the liens and security interests granted under
this Agreement with respect to such assets.
SECTION 26. Severability. Any provision in this Agreement that is held
to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to
that jurisdiction, be inoperative, unenforceable, or invalid without affecting
the remaining provisions in that jurisdiction or the operation, enforceability,
or validity of that provision in any other jurisdiction, and to this end the
provisions of this Agreement are declared to be severable.
SECTION 27. GOVERNING LAW. ANY DISPUTE BETWEEN THE GRANTOR AND THE
AGENT ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT, AND
WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN
ACCORDANCE WITH THE LAWS (INCLUDING 735 ILCS SECTION 105/5-1 ET SEQ. BUT
OTHERWISE WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES) OF THE STATE OF
ILLINOIS.
SECTION 28. CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.
(A) NON-EXCLUSIVE JURISDICTION. EACH OF THE PARTIES HERETO AGREES THAT
ALL DISPUTES BETWEEN THEM ARISING OUT OF, CONNECTED
14
<PAGE>
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH, THIS AGREEMENT WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR
OTHERWISE, MAY BE RESOLVED NON-EXCLUSIVELY BY STATE OR FEDERAL COURTS LOCATED IN
CHICAGO, ILLINOIS, BUT THE PARTIES HERETO ACKNOWLEDGE THAT ANY APPEALS FROM
THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF CHICAGO,
ILLINOIS. EACH OF THE PARTIES HERETO WAIVES IN ALL DISPUTES BROUGHT PURSUANT TO
THIS SUBSECTION (A) ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT
CONSIDERING THE DISPUTE.
(B) VENUE. THE GRANTOR IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH
IN ANY JURISDICTION SET FORTH IN PARAGRAPH (A) ABOVE.
(C) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
15
<PAGE>
IN WITNESS WHEREOF, the Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
AG-CHEM EQUIPMENT CO., INC.
By: /s/ John Retherford
-------------------------------------
Name: John Retherford
Title: CFO
BANK ONE, NA, having its principal office
in Chicago, Illinois, formerly known as
The First National Bank of Chicago, as
Agent
By: /s/ Kevin Gillen
-------------------------------------
Name: Kevin Gillen
Title: Vice President
Borrower Security Agreement Signature Page
<PAGE>
EXHIBIT A-1
To
Security Agreement
Form of Landlord Agreement
Bank One, NA
1 Bank One Plaza
Chicago, IL 60670
Attention: Jenny Gilpin
Ladies and Gentlemen:
AG-CHEM EQUIPMENT CO., INC., a Minnesota corporation ("Borrower"), the
lessee under that certain lease dated _____________________ between the
Borrower, and the undersigned, covering certain premises owned by the
undersigned and located at _________________ (the "Premises") more fully
described in the lease attached hereto as Exhibit A (the "Lease"). Borrower has
certain of its assets located on the Premises.
Borrower has entered into certain financing arrangements with a group
of lenders ("Lenders") including Bank One, NA, as contractual representative for
the Lenders (the "Agent") and the Agent and the Lenders require, among other
things, that Borrower grant liens in favor of the Agent for the benefit of
itself and the Lenders on all of Borrower's property located on the Premises
("Collateral").
To induce the Agent and the Lenders (together with their respective
agents, successors and assigns) to continue said financing arrangements, and for
other good and valuable consideration, the undersigned hereby agrees that:
(i) it will not assert against any of Borrower's assets any
statutory or possessory liens, including, without limitation, rights of
levy or distraint for rent, all of which it hereby waives;
(ii) none of the Collateral located on the Premises shall be
deemed to be fixtures;
(iii) if Borrower defaults on its obligations to the Agent or
any Lender and, as a result, the Agent undertakes to enforce its
security interest in the Collateral, the undersigned will cooperate
with the Agent in its efforts to assemble all of the Collateral located
on the Premises, will permit the Agent to remain on the Premises for
ninety (90) days after the Agent gives the undersigned notice of
default, provided the Agent pays the rental payments due under the
Lease for the period of time the Agent uses the Premises, or, at the
Agent's option, to remove the Collateral from the Premises within a
reasonable time, not to exceed ninety (90) days after the Agent gives
the undersigned notice of default, provided the Agent pays the rental
payments due under the Lease for the period
<PAGE>
of time the Agent uses the Premises, and will not hinder the Agent's
actions in enforcing its liens on the Collateral;
[it will allow the Agent thirty (30) days from the Agent's
receipt of notice in which to cure or cause Borrower to cure any
defaults on Borrower's lease obligations to the undersigned; provided
if such default cannot reasonably be cured within the thirty (30) day
period, and provided the Agent is diligently pursuing a cure, then the
Agent shall have a reasonable period to cure such default;]
[(iv) if, for any reason whatsoever, the undersigned either
deems itself entitled to redeem or to take possession of the Premises
during the term of Borrower's lease or intends to sell or otherwise
transfer all or any part of its interest in the Premises, the
undersigned will notify the Agent five (5) days before taking such
action;]
[(v) the undersigned shall accept performance by the Agent of
the Borrower's obligations under the Lease as though the same had been
performed by the holder of the Borrower's interest therein at the time
of such performance. Upon the cure of any such default, any notice
advising of any default or any action of the undersigned to terminate
the Lease or to interfere with the occupancy, use or enjoyment of the
Premises by reason thereof, which action has not been completed, shall
be deemed rescinded and the Lease shall continue in full force and
effect. The undersigned shall not be required to continue any
possession or continue any action to obtain possession upon the cure of
any such default;]
Any notice(s) required or desired to be given hereunder shall be
directed to the party to be notified at the address stated herein.
The agreements contained herein shall continue in force until all of
Borrower's obligations and liabilities to the Agent and the Lenders are paid and
satisfied in full and all financing arrangements among the Agent, the Lenders
and Borrower have been terminated.
The undersigned will use reasonable efforts to notify all successor
owners, transferees, purchasers and mortgagees of the existence of this waiver.
The agreements contained herein may not be modified or terminated orally and
shall be binding upon the successors, assigns and personal representatives of
the undersigned, upon any successor owner or transferee of the Premises, and
upon any purchasers, including any mortgagee, from the undersigned.
The undersigned agrees that nothing contained in this waiver shall be
construed as an assumption by the Agent or any of the other lenders of any
obligations of Borrower contained in the Lease.
Executed and delivered this ___ day of ___________, at _______________.
2
<PAGE>
THIS WAIVER SHALL NOT IMPAIR OR OTHERWISE AFFECT BORROWER'S
OBLIGATIONS TO PAY RENT AND ANY OTHER SUMS PAYABLE BY BORROWER
OR TO OTHERWISE PERFORM ITS OBLIGATIONS TO THE LESSOR PURSUANT
TO THE TERMS OF THE LEASE.
[Name of Lessor]
By:
-------------------------------------
Title:
----------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
AGREED & ACKNOWLEDGED:
[ ]
------------------------------
By:
-------------------------------------
Title:
----------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
3
<PAGE>
EXHIBIT A
to
Landlord Agreement
Lease
(attached hereto)
<PAGE>
EXHIBIT B
to
Landlord Agreement
Leasehold Mortgage
(attached hereto)
<PAGE>
[ACKNOWLEDGMENT (CORPORATE)
STATE OF )
------------------------
)SS
COUNTY OF )
-----------------------
Before me, a Notary Public in and for said County, personally appeared
__________________, a _________________ corporation, by the ____________________
of such corporation, who acknowledged that (s)he did sign the foregoing
instrument on behalf of said corporation and that said instrument is the
voluntary act and deed of said corporation and his/her voluntary act and deed as
such officer of said corporation.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name and affixed my
official seal this ____ day of ____________, at _____________, ________________.
-----------------------------------------
Notary Public
My Commission Expires:]
(Notarial Seal)
<PAGE>
[ACKNOWLEDGMENT (CORPORATE)
STATE OF )
------------------------
)SS
COUNTY OF )
-----------------------
Before me, a Notary Public in and for said County, personally appeared
____________, a ______________ corporation, by the _________________________ of
such corporation, who acknowledged that (s)he did sign the foregoing instrument
on behalf of said corporation and that said instrument is the voluntary act and
deed of said corporation and his/her voluntary act and deed as such officer of
said corporation.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name and affixed my
official seal this ____ day of ____________, at _____________, ________________.
-----------------------------------------
Notary Public
My Commission Expires:]
(Notarial Seal)
<PAGE>
EXHIBIT A-2
To
Security Agreement
Form of Mortgagee Agreement
Bank One, NA
1 Bank One Plaza
Chicago, IL 60670
Attention: Jenny Gilpin
Ladies and Gentlemen:
AG-CHEM EQUIPMENT CO., INC., a Minnesota corporation ("Borrower"), is
the lessee under that certain lease dated ____________ between the Borrower, and
____________________ (the "Landlord[s]"), covering certain premises located at
_________________ (the "Premises") as more fully described on Exhibit A(1)
attached hereto (the "Lease"). The undersigned is the mortgagee under a mortgage
between the Landlord[s] and the undersigned covering the Premises (the
"Mortgage"). The undersigned is the sole mortgagee of the Premises. Borrower has
certain of its assets located on the Premises.
Borrower has entered into certain financing arrangements with a group
of lenders ("Lenders") including Bank One, NA, as contractual representative for
the Lenders (the "Agent") and the Agent and the Lenders require, among other
things, that Borrower grant liens in favor of the Agent for the benefit of
itself and the Lenders on all of Borrower's property located on the Premises
("Collateral").
By its signature below, the undersigned agrees that:
(i) it will not assert against any of the Collateral any
statutory or possessory liens, including, without limitation, rights of
levy or distraint for rent, all of which it hereby waives;
(ii) none of the Collateral located on the Premises shall be
deemed to be fixtures;
[(iii) it will allow the Agent thirty (30) days from the
Agent's receipt of notice in which to cure or cause Borrower to cure
any such defaults on its mortgage obligations; provided if such default
cannot reasonably be cured within the thirty
- --------------------------
(1) Please attach legal description of premises for recordation purposes.
<PAGE>
(30) day period, and provided the Agent is diligently pursuing a cure,
then the Agent shall have a reasonable period to cure such default;]
[(iv) if, for any reason whatsoever, the undersigned either
deems itself entitled to take possession of the Premises during the
term of the Mortgage or intends to sell or otherwise transfer all or
any part of its interest in the Premises, the undersigned will notify
the Agent five (5) days before taking such action;]
(v) if Borrower defaults on its obligations to the Agent or
any Lender and, as a result, the Agent undertakes to enforce its
security interest in the Collateral, the undersigned will cooperate
with the Agent in its efforts to assemble all of the Collateral located
on the Premises, will permit the Agent to remain on the Premises for
ninety (90) days after the Agent gives the undersigned notice of
default, provided the Agent pays the Lease payments to the Landlord[s]
due under the Lease for the period of time the Agent uses the Premises,
or, at the Agent's option, to remove the Collateral from the Premises
within a reasonable time, not to exceed ninety (90) days after the
Agent gives the undersigned notice of default, provided the Agent pays
the rental payments to the Landlord[s] due under the Lease for the
period of time the Agent uses the Premises, and will not hinder the
Agent's actions in enforcing its liens on the Collateral; and
Any notice(s) required or desired to be given hereunder shall be
directed to the party to be notified at the address stated herein.
The agreements contained herein shall continue in force until all of
Borrower's obligations and liabilities to the Agent and the Lenders are paid and
satisfied in full and all financing arrangements among the Agent, the Lenders
and Borrower have been terminated.
The undersigned will notify all successor owners, transferees,
purchasers and mortgagees of the existence of this waiver. The agreements
contained herein may not be modified or terminated orally and shall be binding
upon the successors, assigns and personal representatives of the undersigned,
upon any successor owner or transferee of the Premises, and upon any purchasers,
including any mortgagee, from the undersigned.
[The undersigned consents to the granting of the Leasehold Mortgage to
the Agent and to the liens, security interests and encumbrances created by and
resulting from the Leasehold Mortgage or other documents collateral thereto in
the form attached hereto as Exhibit B.]
The undersigned agrees that nothing contained in this waiver shall be
construed as an assumption by the agent or any of the other lenders of any
obligations of the landlord contained in the mortgage.
2
<PAGE>
Executed and delivered this ____ day of ________, at _________________.
THIS WAIVER SHALL NOT IMPAIR OR OTHERWISE AFFECT BORROWER'S
OBLIGATIONS TO PAY RENT AND ANY OTHER SUMS PAYABLE BY BORROWER
OR TO OTHERWISE PERFORM ITS OBLIGATIONS TO THE LANDLORD
PURSUANT TO THE TERMS OF THE LEASE.
[Name of Mortgagee]
By:
-------------------------------------
Title:
----------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
AGREED & ACKNOWLEDGED:
[ ]
------------------------------
By:
-------------------------------------
Title:
----------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
3
<PAGE>
EXHIBIT A
to
Landlord Agreement
Lease
(attached hereto)
<PAGE>
EXHIBIT B
to
Landlord Agreement
Leasehold Mortgage
(attached hereto)
<PAGE>
STATE OF )
------------------------
)SS
COUNTY OF )
-----------------------
The foregoing letter agreement was acknowledged before me this ___ day
of _____________, by _____________________, a _______________ of ______________,
a ____________________, on behalf of such _________________.
-----------------------------------------
Notary Public
________ County, _____________
My commission expires:_______]
<PAGE>
EXHIBIT B
To
Security Agreement
Form of Bailee Letter
Bank One, NA
1 Bank One Plaza
Chicago, IL 60670
Attention: Jenny Gilpin
Ladies and Gentlemen:
AG-CHEM EQUIPMENT CO., INC., a Minnesota corporation ("Borrower"), now
does or hereafter may store certain of its merchandise, inventory, or other of
its personal property at premises located at _______________ (the "Premises")
owned or leased by the undersigned.
Borrower has entered into certain financing arrangements with a group
of lenders (the "Lenders") including Bank One, NA (the "Agent") and, as a
condition to continuing the loans and other financial accommodations of the
Lenders to Borrower, the Agent and the Lenders require, among other things, that
Borrower grant liens in favor of the Agent for the benefit of the Agent and the
Lenders on all of Borrower's property located on the Premises ("Collateral").
To induce the Agent and the Lenders (together with their respective
agents, successors and assigns) to enter into said financing arrangements, and
for other good and valuable consideration, the undersigned hereby agrees that:
(i) it will not assert against any of Borrower's assets any
statutory or possessory liens, including, without limitation, rights of
levy or distraint for rent, all of which it hereby waives;
(ii) the Collateral shall be identifiable as being owned by
Borrower and kept reasonably separate and distinct from other property
in the possession of the undersigned;
(iii) none of the Collateral located on the Premises shall be
deemed to be fixtures; and
(iv) if Borrower defaults on its obligations to the Lenders or
the Agent and, as a result, the Agent undertakes to enforce its
security interest in the Collateral, the undersigned (a) will cooperate
with the Agent in its efforts to assemble all of the Collateral located
on the Premises, (b) will permit the Agent to either remain on the
Premises for ninety (90) days after the Agent gives the undersigned
notice of default or, at the Agent's option, to remove the Collateral
from the Premises within a reasonable time, not to exceed ninety
<PAGE>
(90) days after the Agent gives the undersigned notice of default,
provided in either instance that the Agent leaves the Premises in the
same condition as existed immediately prior to such ninety (90) day
period, and the Agent shall indemnify the undersigned for any damages
arising solely out of its occupancy of the Premises, and (c) will not
hinder the Agent's actions in enforcing its liens on the Collateral.
Any notice(s) required or desired to be given hereunder shall be
directed to the party to be notified at the address stated herein.
The agreements contained herein shall continue in force until all of
Borrower's obligations and liabilities to the Agent and Lenders are paid and
satisfied in full and all financing arrangements among the Agent, the Lenders
and Borrower have been terminated.
The undersigned will notify all successor owners, transferees,
purchasers and mortgagees of the existence of this agreement. The agreements
contained herein may not be modified or terminated orally and shall be binding
upon the successors, assigns and personal representatives of the undersigned,
upon any successor owner or transferee of any of the Premises, and upon any
purchasers, including any mortgagee, from the undersigned.
Executed and delivered this ____ day of ____________, at _____________.
[Name and Address of Bailee]
(By)
-------------------------------------
2
<PAGE>
SCHEDULE 1
To
Security Agreement
Locations of Collateral
Attached
<PAGE>
SCHEDULE 1-A
To
Security Agreement
Third Party Locations:
<PAGE>
SCHEDULE 1-B
To
Security Agreement
Financing Statement Filing Locations:
<PAGE>
SCHEDULE 2
To
Security Agreement
Trade Names:
<PAGE>
SCHEDULE 3
To
Security Agreement
Pledged Debt:
EXHIBIT 10.22
GUARANTOR SECURITY AGREEMENT
DATED AS OF MAY 15, 2000
between
AG-CHEM SALES CO., INC.
AND
BANK ONE, NA
AS AGENT
<PAGE>
TABLE OF CONTENTS
PAGE
----
SECTION 1. Defined Terms.......................................................1
SECTION 2. Grant of Security...................................................2
SECTION 3. [RESERVED]..........................................................5
SECTION 4. Grantor Remains Liable..............................................5
SECTION 5. Representations and Warranties......................................5
SECTION 6. Perfection and Maintenance of Security Interests and Liens..........6
SECTION 7. Financing Statements................................................7
SECTION 8. Filing Costs........................................................7
SECTION 9. Schedule of Collateral..............................................7
SECTION 10. Equipment and Inventory............................................8
SECTION 11. Accounts...........................................................8
SECTION 12. Leased Real Property...............................................9
SECTION 13. General Covenants..................................................9
SECTION 14. The Agent Appointed Attorney-in-Fact..............................10
SECTION 15. The Agent May Perform.............................................10
SECTION 16. The Agent's Duties................................................11
SECTION 17. Remedies..........................................................11
SECTION 18. Exercise of Remedies..............................................12
SECTION 19. License...........................................................12
SECTION 20. Injunctive Relief.................................................12
SECTION 21. Interpretation and Inconsistencies; Merger........................12
SECTION 22. Expenses..........................................................13
SECTION 23. Amendments, Etc...................................................13
SECTION 24. Notices...........................................................13
SECTION 25. Continuing Security Interest; Termination.........................13
SECTION 26. Severability......................................................14
SECTION 27. GOVERNING LAW.....................................................14
SECTION 28. CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL...........14
(A) NON-EXCLUSIVE JURISDICTION...........................................14
(B) VENUE................................................................14
(C) WAIVER OF JURY TRIAL.................................................14
i
<PAGE>
EXHIBITS
- --------
Exhibit A-1 Form of Landlord Agreement
Exhibit A-2 Form of Mortgagee Agreement
Exhibit B Form of Bailee Letter
SCHEDULES
- ---------
Schedule 1 Locations of Collateral
Schedule 1-A Third Party Locations
Schedule 1-B Financing Statement Filing Locations
Schedule 2 Trade Names
Schedule 3 Pledged Debt
ii
<PAGE>
GUARANTOR SECURITY AGREEMENT
This GUARANTOR SECURITY AGREEMENT (the "Agreement"), dated as of May
15, 2000 is made by AG-CHEM SALES CO., INC. (the "Grantor"), in favor of BANK
ONE, NA, having its principal office in Chicago, Illinois, formerly known as The
First National Bank of Chicago (the "Agent"), for its benefit and for the
benefit of the "Holders of Guaranteed Obligations" (as defined below) who are,
or may hereafter become, parties to either of the Credit Agreements or Note
Agreements referred to below.
PRELIMINARY STATEMENT
The Grantor entered into a Guaranty (Short Term) dated as of June 4,
1999, as reaffirmed on the date hereof (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the "Short Term Guaranty")
between the Grantor and the Agent. The Grantor also entered into a Guaranty
(Long Term) dated as of January 1, 1997, as reaffirmed on the date hereof (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the "Long Term Guaranty," and taken together with the Short Term
Guaranty, the "Bank Guarantees"), between the Grantor and the Agent.
The Grantor also guaranteed (such guarantees, the "Noteholder
Guarantees" and together with the Bank Guarantees, the "Guarantees") obligations
outstanding under a (i) a Note Agreement, dated as of April 6, 1994, with C.M.
Life Insurance Company and (ii) a Note Agreement, dated as of October 10, 1995,
with The Prudential Insurance Company of America (such agreements, the "Note
Agreements").
The Grantor, in order to secure its obligations under the Guarantees,
has agreed to grant to the Agent on behalf of the Holders of Guaranteed
Obligations the security interest contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Defined Terms. Unless otherwise defined herein, terms
defined in the Credit Agreements are used herein as therein defined, and the
following terms shall have the following meanings (such meanings being equally
applicable to both the singular and the plural forms of the terms defined):
"Agreement" shall mean this Guarantor Security Agreement, as the same
may from time to time be amended, restated, modified or supplemented, and shall
refer to this Agreement as the same may be in effect at the time such reference
becomes operative.
"Collateral" shall mean all property and rights in property now owned
or hereafter at any time acquired by the Grantor in or upon which a Lien is
granted in favor of the Agent by
<PAGE>
the Grantor under this Agreement, including, without limitation, the property
described in Section 2.
"Collateral Sharing Agreement" shall mean the Collateral Sharing
Agreement, dated as of the date hereof, as the same may be amended, restated,
supplemented or otherwise modified from time to time, among the Holders of
Guaranteed Obligations and the Agent, as acknowledged by the Grantor and certain
of its affiliates.
"Credit Agreements" shall mean (i) the Third Amended and Restated Long
Term Revolving Credit Agreement, dated as of June 4, 1999, among the Grantor,
the institutions from time to time party thereto as lenders, the Agent, as
contractual representative for such lenders, Ag-Chem Equipment Canada Ltd. and
Ag-Chem Europe B.V., as the same may be amended, restated, supplemented or
otherwise modified from time to time and (ii) the Short Term Revolving Credit
Agreement, dated as of June 4, 1999, among the Grantor, the institutions from
time to time party thereto as lenders, and the Agent, as contractual
representative for such lenders, as the same may be amended, restated,
supplemented or otherwise modified from time to time.
"Event of Default" shall mean an "Event of Default" as defined in the
Credit Agreements and the comparable term as it is set forth in the Note
Agreements.
"Guaranteed Obligations" shall mean the aggregate obligations of the
Grantor owing under the Guarantees, including, without limitation, Grantor's
guaranty to promptly and fully satisfy when due Indebtedness under the Credit
Agreements and obligations outstanding under the Note Agreements.
"Holders of Guaranteed Obligations" shall mean the holders of the
Guaranteed Obligations from time to time and shall include their respective
successors, transferees and assigns.
"Lien" shall mean any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or security
agreement of any kind or nature whatsoever (including, without limitation, the
interest of a vendor or lessor under any conditional sale, Capital Lease, or
other title retention agreement).
"Pledged Debt" shall have the meaning set forth in Section 2 of this
Agreement.
"UCC" shall mean the Uniform Commercial Code as the same may, from time
to time, be in effect in the State of Illinois; provided, however, in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of the Agent's and the Holders of Guaranteed Obligations'
security interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of Illinois, the term "UCC"
shall mean the Uniform Commercial Code as in effect in such other jurisdiction
for purposes of the provisions hereof relating to such attachment, perfection or
priority and for purposes of definitions related to such provisions.
SECTION 2. Grant of Security. To secure the prompt and complete
payment, observance and performance of the Guaranteed Obligations, the Grantor
hereby assigns and
2
<PAGE>
pledges to the Agent, for the benefit of itself and the Holders of Guaranteed
Obligations, and hereby grants to the Agent, for the benefit of itself and the
Holders of Guaranteed Obligations, a security interest in all of the Grantor's
right, title and interest in and to the following, whether now owned or existing
or hereafter arising or acquired and wheresoever located:
ACCOUNTS: All "accounts" as such term is defined in Section 9-106 of
the UCC, whether now owned or hereafter acquired or arising; the Grantor intends
that the term "accounts", as used herein, be construed in its broadest sense,
and such term shall include, without limitation, all present and future
accounts, accounts receivable and other rights of the Grantor to payment for
goods sold or leased or for services rendered (except those evidenced by
instruments or chattel paper), whether now existing or hereafter arising and
wherever arising, and whether or not they have been earned by performance
(collectively, "Accounts");
INVENTORY: All "inventory" as defined in Section 9-109(4) of the UCC,
whether now owned or hereafter acquired or arising; the Grantor intends that the
term "inventory", as used herein, be construed in its broadest sense, and such
term shall include, without limitation, all goods now owned or hereafter
acquired by the Grantor (wherever located, whether in the possession of the
Grantor or of a bailee or other person for sale, storage, transit, processing,
use or otherwise and whether consisting of whole goods, spare parts, components,
supplies, materials, or consigned, returned or repossessed goods) which are held
for sale or lease, which are to be furnished (or have been furnished) under any
contract of service or which are raw materials, work in process or materials
used or consumed in the Grantor's business (collectively, "Inventory");
EQUIPMENT: All "equipment" as such term is defined in Section 9-109(2)
of the UCC, whether now owned or hereafter acquired or arising; the Grantor
intends that the term "equipment", as used herein, be construed in its broadest
sense, and such term shall include, without limitation, all machinery, all
manufacturing, distribution, selling, data processing and office equipment, all
furniture, furnishings, appliances, tools, tooling, molds, dies, and all other
goods of every type and description (other than Inventory), in each instance
whether now owned or hereafter acquired by the Grantor and wherever located
(collectively, "Equipment"), but in no case shall include fixtures located on
real property subject to "Permitted Liens" (as defined in the Credit
Agreements);
GENERAL INTANGIBLES: All "general intangibles" as defined in Section
9-106 of the UCC, whether now owned or hereafter acquired or arising; the
Grantor intends that the term "general intangibles", as used herein, be
construed in its broadest sense, and such term shall include, without
limitation, all rights, interests, choses in action, causes of actions, claims
and all other intangible property of the Grantor of every kind and nature (other
than Accounts), in each instance whether now owned or hereafter acquired by the
Grantor and however and whenever arising, including, without limitation, all
corporate and other business records; all loans, royalties, and other
obligations receivable; customer lists, credit files, correspondence, and
advertising materials; firm sale orders, other contracts and contract rights;
all interests in partnerships and joint ventures; all tax refunds and tax refund
claims; all right, title and interest under leases, subleases, licenses and
concessions and other agreements relating to real or personal property; all
payments due or made to the Grantor in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of any property by any person
or governmental
3
<PAGE>
authority; all deposit accounts (general or special) with any bank or other
financial institution, including, without limitation, any deposits or other sums
at any time credited by or due to the Grantor from any of the Holders of
Guaranteed Obligations or any of their respective Affiliates with the same
rights therein as if the deposits or other sums were credited by or due from
such Holder of Guaranteed Obligations; all credits with and other claims against
carriers and shippers; all rights to indemnification; all patents, and patent
applications (including all reissues, divisions, continuations and extensions);
all service marks and service mark applications; all trade secrets and
inventions; all copyrights and copyright applications (including all computer
software and related documentation); all rights and interests in and to
trademarks, trademark registrations and applications therefor, trade names,
corporate names, brand names, slogans, all goodwill associated with the
foregoing; all license agreements and franchise agreements, all reversionary
interests in pension and profit sharing plans and reversionary, beneficial and
residual interest in trusts; all proceeds of insurance of which the Grantor is
beneficiary; and all letters of credit, guaranties, liens, security interests
and other security held by or granted to the Grantor; and all other intangible
property, whether or not similar to the foregoing;
LAB PROCESSING AND ENGINEERING INFORMATION: All rights and interests in
and to processes, lab journals, and notebooks, data, trade secrets, know-how,
product formulae and information, manufacturing, engineering and other drawings
and manuals, technology, blueprints, research and development reports, agency
agreements, technical information, technical assistance, engineering data,
design and engineering specifications, and similar materials recording or
evidencing expertise used in or employed by the Grantor (including any license
for the foregoing);
CONTRACT RIGHTS: All rights and interests in and to any pending or
executory contracts, requests for quotations, invitations for bid, agreements,
leases and arrangements of which the Grantor is a party to or in which the
Grantor has an interest;
CHATTEL PAPER, INSTRUMENTS AND DOCUMENTS: All chattel paper, leases,
all instruments, including, without limitation, the notes and debt instruments
described in SCHEDULE 3 (the "Pledged Debt") and all payments thereunder and
instruments and other property from time to time delivered in respect thereof or
in exchange therefor, and all bills of sale, bills of lading, warehouse receipts
and other documents of title, in each instance whether now owned or hereafter
acquired by the Grantor;
INTEREST AND CURRENCY CONTRACTS: Any and all interest rate or currency
exchange agreements or derivative agreements, including without limitation, cap,
collar, floor, forward or similar agreements or other rate protection
arrangements;
INVESTMENT PROPERTY: Any and all investment property (as defined in
Section 9-115(1)(f) of the UCC) of the Grantor, including any instruments,
certificates of deposit, equity interests or investments of any kind; and
OTHER PROPERTY: All property or interests in property now owned or
hereafter acquired by the Grantor which now may be owned or hereafter may come
into the possession, custody or control of the Agent or any of the Holders of
Guaranteed Obligations or any agent or Affiliate of any of them in any way and
for any purpose (whether for safekeeping,
4
<PAGE>
deposit, custody, pledge, transmission, collection or otherwise); and all rights
and interests of the Grantor, now existing or hereafter arising and however and
wherever arising, in respect of any and all (i) notes, drafts, letters of
credit, stocks, bonds, and debt and equity securities, whether or not
certificated, investment property and warrants, options, puts and calls and
other rights to acquire or otherwise relating to the same; (ii) money; (iii)
proceeds of loans including, without limitation, loans made under the Credit
Agreements; and (iv) insurance proceeds and books and records relating to any of
the property covered by this Agreement; together, in each instance, with all
accessions and additions thereto, substitutions therefor, and replacements,
proceeds and products thereof.
The Collateral upon which the Agent has been granted a Lien hereunder
shall not include property and rights in property subject to "Permitted Liens"
(as defined in the Credit Agreements) so long as such property and rights in
property are subject to such Permitted Liens.
SECTION 3. [RESERVED].
SECTION 4. Grantor Remains Liable. Anything herein to the contrary
notwithstanding, (a) the Grantor shall remain solely liable under the contracts
and agreements included in the Collateral to the extent set forth therein to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by the Agent of any of
its rights hereunder shall not release the Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral, and
(c) neither the Agent nor the Holders of Guaranteed Obligations shall have any
responsibility, obligation or liability under the contracts and agreements
included in the Collateral by reason of this Agreement, nor shall the Agent or
the Holders of Guaranteed Obligations be required or obligated, in any manner,
to (i) perform or fulfill any of the obligations or duties of the Grantor
thereunder, (ii) make any payment, or make any inquiry as to the nature or
sufficiency of any payment received by the Grantor or the sufficiency of any
performance by any party under any such contract or agreement or (iii) present
or file any claim, or take any action to collect or enforce any claim for
payment assigned hereunder.
SECTION 5. Representations and Warranties. The Grantor represents and
warrants, as of the date of this Agreement and as of each date hereafter (except
for changes permitted or contemplated by this Agreement) until termination of
this Agreement pursuant to Section 25:
(a) The correct corporate name of the Grantor is set forth in the first
paragraph of this Agreement. The locations listed on SCHEDULE 1 constitute all
locations at which Inventory and/or Equipment is located and the Grantor has
exclusive possession and control of such Equipment and Inventory, except for (i)
such Inventory and Equipment which is (A) temporarily in transit between such
locations, or (B) temporarily stored with third parties or held by third parties
for processing, storage, engineering, evaluation or repairs, the proper
corporate names of which third parties, the location of such Inventory and/or
Equipment, and the nature of the relationship between the Grantor and such third
parties are set forth on SCHEDULE 1-A, as such SCHEDULE 1-A may be amended or
supplemented from time to time, or have been otherwise provided to the Agent,
(ii) Equipment sold to and subsequently repurchased from a third party by the
Grantor for the period beginning on the date of such repurchase and ending on
the date of the
5
<PAGE>
re-sale of such Equipment to a different third party, (iii) Equipment
transferred from a third party to the Grantor (such Equipment, "Trade-In
Equipment") in partial satisfaction of the purchase price for Equipment sold by
the Grantor to such third party for the period beginning on the date of the
transfer of such Trade-In Equipment and ending on the date the Grantor sells
such Trade-In Equipment, and (iv) Equipment used by the Grantor in connection
with demonstrations to prospective purchasers of such Equipment; provided, that
the aggregate value of the Equipment described in clauses (ii), (iii), and (iv)
does not exceed $10,000,000. The chief place of business and chief executive
office of the Grantor are located at the address of the Grantor set forth below
the Grantor's signature to this Agreement. All records concerning any Accounts
and all originals of chattel paper which evidence any Account are located at the
addresses listed on SCHEDULE 1 and none of the Accounts is evidenced by a
promissory note or other instrument except for such notes and other instruments
delivered to the Agent.
(b) The Grantor is the legal and beneficial owner of the Collateral
free and clear of all Liens except for Liens permitted as of the date hereof
under the Credit Agreements and the Note Agreements. The Grantor currently
conducts business under the name Ag-Chem Sales Co., Inc., and, in certain areas
and for certain operations, the additional trade names listed on SCHEDULE 2. The
Grantor uses no trade names or fictitious names, except as set forth on SCHEDULE
2.
(c) This Agreement creates in favor of the Agent a legal, valid and
enforceable security interest in the Collateral. When financing statements have
been filed in the appropriate offices against the Grantor in the locations
listed on SCHEDULE 1-B, the Agent will have a fully perfected first priority
lien on, and security interest in, the Collateral in which a security interest
may be perfected by such filing, subject only to Liens permitted as of the date
hereof under the Credit Agreements and the Note Agreements.
(d) No authorization, approval or other action by, and no notice to or
filing with, any Governmental Authority that has not already been taken or made
and is in full force and effect is required (i) for the grant by the Grantor of
the security interest in the Collateral granted hereby; (ii) for the execution,
delivery or performance of this Agreement by the Grantor; or (iii) for the
exercise by the Agent of any of its rights or remedies hereunder.
(e) The Pledged Debt issued by any Affiliate of the Grantor, and to the
best of the Grantor's knowledge, all other Pledged Debt, has been duly
authorized, issued and delivered, and is the legal, valid, binding and
enforceable obligation of the respective issuer thereof.
SECTION 6. Perfection and Maintenance of Security Interests and Liens.
The Grantor agrees that until all of the Guaranteed Obligations (other than
contingent indemnity obligations) have been fully satisfied and each of the
Guarantees has been terminated, the Agent's security interests in and Liens on
and against the Collateral and all proceeds and products thereof shall continue
in full force and effect. The Grantor shall perform any and all steps reasonably
requested by the Agent to perfect, maintain and protect the Agent's security
interests in and Liens on and against the Collateral granted or purported to be
granted hereby or to enable the Agent to exercise its rights and remedies
hereunder with respect to any Collateral, including, without limitation, (i)
executing and filing financing or continuation statements, or
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<PAGE>
amendments thereof, in form and substance reasonably satisfactory to the Agent,
(ii) delivering to the Agent all certificates, notes, and other instruments
(including, without limitation, all letters of credit on which the Grantor is
named as a beneficiary) representing or evidencing Collateral, which
certificates, notes, and other instruments have been duly endorsed or are
accompanied by duly executed instruments of transfer or assignment, including,
but not limited to, note powers, all in form and substance satisfactory to the
Agent, (iii) at the reasonable direction of Agent, delivering to the Agent
warehouse receipts covering that portion of the Collateral, if any, located in
warehouses and for which warehouse receipts are issued, (iv) after the
occurrence and during the continuance of an Event of Default, transferring
Inventory and Equipment to warehouses designated by the Agent or taking such
other steps as are reasonably deemed necessary by the Agent to maintain the
Agent's control of the Inventory and Equipment, (v) upon the reasonable request
of the Agent, marking conspicuously each document, contract, chattel paper and
all records pertaining to the Collateral with a legend, in form and substance
satisfactory to the Agent, indicating that such document, contract, chattel
paper, or other record pertaining to the Collateral is subject to the security
interest granted hereby, (vi) obtaining waivers of Liens and access agreements
in substantially the following forms: (a) EXHIBIT A-1 hereto (or such other form
as may be agreed to by the Agent) from landlords with respect to all leases
executed after the date hereof, (b) EXHIBIT A-2 hereto (or such other form as
may be agreed to by the Agent) from mortgagees with respect to all leases
executed after the date hereof and (3) EXHIBIT B hereto (or such other form as
may be agreed to by the Agent) from the appropriate Person with respect to all
arrangements pursuant to which Inventory will be stored in public warehouse
facilities after the date hereof, and (vii) executing and delivering all further
instruments and documents, and taking all further action, as the Agent may
reasonably request.
SECTION 7. Financing Statements. To the extent permitted by applicable
law, the Grantor hereby authorizes the Agent to file one or more financing or
continuation statements and amendments thereto, disclosing the security interest
granted to the Agent under this Agreement without the Grantor's signature
appearing thereon, and the Agent agrees to notify the Grantor when such a filing
has been made. The Grantor agrees that a carbon, photographic, photostatic, or
other reproduction of this Agreement or of a financing statement is sufficient
as a financing statement. If any Inventory or Equipment is in the possession or
control of any warehouseman or the Grantor's agents or processors, the Grantor
shall, upon the Agent's request, notify such warehouseman, agent or processor of
the Agent's security interest in such Inventory and Equipment and, upon the
Agent's request, instruct them to hold all such Inventory or Equipment for the
Agent's account and subject to the Agent's instructions.
SECTION 8. Filing Costs. The Grantor shall pay the costs of, or
incidental to, all recordings or filings of all financing statements, including,
without limitation, any filing expenses incurred by the Agent pursuant to
Section 7.
SECTION 9. Schedule of Collateral. The Grantor shall furnish to the
Agent from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the Agent may reasonably request, all in reasonable detail.
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SECTION 10. Equipment and Inventory. The Grantor covenants and agrees
with the Agent that from the date of this Agreement and until termination of
this Agreement pursuant to Section 25, the Grantor shall:
(a) Keep the Equipment and Inventory (other than Equipment or Inventory
sold or disposed of as permitted by the Credit Agreements and the Note
Agreements) at the places specified in Section 5(a), except for (i) Equipment
and Inventory (A) temporarily in transit between such locations or (B)
temporarily stored with the third parties or held by third parties for
processing, storage, engineering, evaluation, or repairs as set forth on
SCHEDULE 1-A, and deliver written notice to the Agent at least thirty (30) days
prior to establishing any other location at which it reasonably expects to
maintain Inventory and/or Equipment in which location or with which third party
all action required by this Agreement shall have been taken with respect to all
such Equipment and Inventory, (ii) Equipment sold to and subsequently
repurchased from a third party by the Grantor for the period beginning on the
date of such repurchase and ending on the date of the re-sale of such Equipment
to a different third party, (iii) Equipment transferred from a third party to
the Grantor (such Equipment, "Trade-In Equipment") in partial satisfaction of
the purchase price for Equipment sold by the Grantor to such third party for the
period beginning on the date of the transfer of such Trade-In Equipment and
ending on the date the Grantor sells such Trade-In Equipment and (iv) Equipment
used by the Grantor in connection with demonstrations to prospective purchasers
of such Equipment; provided, that the aggregate value of the Equipment described
in clauses (ii), (iii) and (iv) does not exceed $10,000,000;
(b) Maintain or cause to be maintained in good repair, working order,
and condition, excepting ordinary wear and tear and damage due to casualty, all
of the Equipment, and make or cause to be made all appropriate repairs, renewals
and replacements thereof, as quickly as practicable after the occurrence of any
loss or damage thereto which are necessary or desirable to such end; and
(c) Comply with the terms of the Credit Agreements and the Note
Agreements with respect to such Equipment and Inventory, including, without
limitation, the maintenance and insurance provisions set forth in Section 5.1(c)
of each of the Credit Agreements.
SECTION 11. Accounts. The Grantor covenants and agrees with the Agent
that from and after the date of this Agreement and until termination of this
Agreement pursuant to Section 25, the Grantor:
(a) Shall keep its chief place of business and chief executive office
and the office where it keeps its records concerning the Accounts at its address
set forth below the Grantor's signature on this Agreement, and keep the offices
where it keeps all originals of all chattel paper which evidence Accounts at the
locations therefor specified in Section 5(a) or, upon thirty (30) days' prior
written notice to the Agent, at such other locations within the United States in
a jurisdiction where all actions required by Section 6 shall have been taken
with respect to the Accounts. The Grantor will hold and preserve such records
(in accordance with the Grantor's usual document retention practices) and
chattel paper and will permit representatives of the Agent at any time during
normal business hours to inspect and make abstracts from such records and
chattel paper;
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(b) Shall in any suit, proceeding or action brought by the Agent under
any Account comprising part of the Collateral, the Grantor will save, indemnify
and keep each of the Holders of Guaranteed Obligations harmless from and against
all expenses, loss or damage suffered by reason of any defense, setoff,
counterclaim, recoupment or reduction of liability whatsoever of the obligor
thereunder, arising out of a breach by the Grantor of any obligation or arising
out of any other agreement, indebtedness or liability at any time owing to or in
favor of such Holder of Guaranteed Obligations from the Grantor, and all such
obligations of the Grantor shall be and shall remain enforceable against and
only against the Grantor and shall not be enforceable against any of the Holders
of Guaranteed Obligations; and
(c) Shall not sell, transfer assign or encumber any account,
instrument, or chattel paper other than pursuant to the terms of the Credit
Agreements and the Note Agreements.
SECTION 12. Leased Real Property. The Grantor covenants and agrees with
the Agent that from and after the date of this Agreement and until termination
of this Agreement pursuant to Section 25, that:
(a) Promptly following, but not later than ninety (90) days after, the
close of each fiscal year the Grantor will furnish to the Agent a report
certified to be true and correct by the Grantor containing a list of each of the
Grantor's leased premises; the name or names of all owners; rentals being paid;
and whether the Grantor has obtained waivers of Liens and access agreements from
landlords with respect to such premises in accordance with Section 6; and
(b) The Grantor agrees that, after the occurrence and during the
continuation of an Event of Default, the Agent may, but need not, make any
payment or perform any act hereinbefore required of the Grantor with respect to
the Grantor's leased premises in any form and manner deemed expedient. All money
paid for any of the purposes herein authorized and all other moneys advanced by
the Agent to protect the lien hereof shall be additional Guaranteed Obligations
secured hereby and shall become immediately due and payable without notice and
shall bear interest thereon at the default interest rate as provided in the
Credit Agreement until paid to the Agent in full.
(c) The Grantor agrees that it will not amend any lease in a manner
that has a material adverse affect on the interests of the Holders of Guaranteed
Obligations without the Agent's prior written consent.
SECTION 13. General Covenants. The Grantor covenants and agrees with
the Agent that from and after the date of this Agreement and until termination
of this Agreement pursuant to Section 25, the Grantor shall:
(a) Keep and maintain at the Grantor's own cost and expense
satisfactory and complete records of the Grantor's Collateral in a manner
consistent with the Grantor's current business practice, including, without
limitation, a record of all payments received and all credits granted with
respect to such Collateral. The Grantor shall, for the Agent's further security,
deliver and turn over to the Agent or the Agent's designated representatives at
any time following the occurrence and during the continuation of an Event of
Default, any such books and records (including, without limitation, any and all
computer tapes, programs and source and
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object codes relating to such Collateral in which the Grantor has an interest or
any part or parts thereof); and
(b) The Grantor will not create, permit or suffer to exist, and will
defend the Collateral against, and take such other action as is necessary to
remove, any Lien on such Collateral other than Liens permitted as of the date
hereof under the Credit Agreements and the Note Agreements, and will defend the
right, title and interest of the Agent in and to the Grantor's rights to such
Collateral, including, without limitation, the proceeds and products thereof,
against the claims and demands of all Persons whatsoever.
SECTION 14. The Agent Appointed Attorney-in-Fact. The Grantor hereby
irrevocably appoints the Agent as the Grantor's attorney-in-fact, with full
authority in the place and stead of the Grantor and in the name of the Grantor
or otherwise, following the occurrence and during the continuation of an Event
of Default, in the Agent's discretion, to take any action and to execute any
instrument which the Agent may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation, to:
(i) obtain and adjust insurance required to be paid to the
Agent or any Holders of Guaranteed Obligations pursuant to the Credit
Agreements and the Note Agreements;
(ii) ask, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
(iii) receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause
(i) or (ii) above; and
(iv) file any claims or take any action or institute any
proceedings which the Agent may deem necessary or desirable for the
collection of any of the Collateral, or otherwise to enforce the rights
of the Agent with respect to any of the Collateral;
In addition, the Agent may at any time:
(i) obtain access to records maintained for the Grantor by
computer services companies and other service companies or bureaus;
(ii) send requests under the Grantor's, the Agent's or a
fictitious name to the Grantor's customers or account debtors for
verification of Accounts provided that the Agent gives the Grantor
notice prior to initiating any such verifications; and
(iii) do all other things reasonably necessary to carry out
this Agreement.
SECTION 15. The Agent May Perform. If the Grantor fails to perform any
agreement contained herein, in the Guarantees, in the Credit Agreements or in
the Note Agreements, the Agent may, upon three days' prior notice to the
Grantor, perform, or cause
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performance of, such agreement, and the expenses of the Agent incurred in
connection therewith shall be payable by the Grantor under Section 22.
SECTION 16. The Agent's Duties. The powers conferred on the Agent
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the safe custody
of any Collateral in its possession and the accounting for moneys actually
received by it hereunder, the Agent shall not have any duty as to any
Collateral. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession if the Collateral
is accorded treatment substantially equal to that which the Agent accords its
own property, it being understood that the Agent shall be under no obligation to
take any necessary steps to preserve rights against prior parties or any other
rights pertaining to any Collateral, but may do so at its option, and all
reasonable expenses incurred in connection therewith shall be for the sole
account of the Grantor and shall be added to the Guaranteed Obligations.
SECTION 17. Remedies. (a) If any Event of Default shall have occurred
and be continuing:
(i) The Agent shall have, in addition to other rights and
remedies provided for herein or otherwise available to it, all the
rights and remedies of a secured party upon default under the UCC
(whether or not the UCC applies to the affected Collateral) and
further, the Agent may, without notice, demand or legal process of any
kind (except as may be required by law), all of which the Grantor
waives, at any time or times, (x) enter the Grantor's owned or leased
premises where Collateral is located and take physical possession of
the Collateral and maintain such possession on the Grantor's owned or
leased premises, at no cost to the Agent or any of the Holders of
Guaranteed Obligations, or remove the Collateral, or any part thereof,
to such other place(s) as the Agent may desire, (y) require the Grantor
to, and the Grantor hereby agrees that it will at its expense and upon
request of the Agent forthwith, assemble all or any part of the
Collateral as directed by the Agent and make it available to the Agent
at a place to be designated by the Agent which is reasonably convenient
to the Agent and (z) without notice except as specified below, sell,
lease, assign, grant an option or options to purchase or otherwise
dispose of the Collateral or any part thereof at public or private
sale, at any exchange, broker's board or at any of the offices of the
Agent or elsewhere, for cash, on credit or for future delivery, and
upon such other terms as the Agent may deem commercially reasonable.
The Grantor agrees that, to the extent notice of sale shall be required
by law, at least ten (10) days' notice to the Grantor of the time and
place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Agent shall not
be obligated to make any sale of Collateral regardless of notice of
sale having been given. The Agent may adjourn any public or private
sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned;
(ii) The Agent shall apply all cash proceeds received by the
Agent in respect of any sale of, collection from, or other realization
upon all or any part of the Collateral (after payment of any amounts
payable to the Agent pursuant to Section 22), for the benefit of the
Holders of Guaranteed Obligations, against all or any part of the
Guaranteed Obligations in such order as may be required by the
Collateral Sharing Agreement, or, to the extent not specified therein,
as is determined by the Holders of Guaranteed Obligations, and, with
respect to the application of such proceeds subsequent to the
satisfaction of the conditions set forth in the Collateral Sharing
Agreement or as agreed to by the Holders of
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Guaranteed Obligations, as applicable, in such order as may be required
under each Guarantee with respect to amounts remitted to the entity in
whose favor such Guarantee runs. Any surplus of such cash or cash
proceeds held by the Agent and remaining after payment in full of all
the Guaranteed Obligations shall be paid over to the Grantor or to
whomsoever may be lawfully entitled to receive such surplus;
(b) The Grantor waives all claims, damages and demands against the
Agent arising out of the repossession, retention or sale of any of the
Collateral or any part or parts thereof, except any such claims, damages and
awards arising out of the gross negligence or willful misconduct of the Agent or
any of the Holders of Guaranteed Obligations, as the case may be, as determined
in a final non-appealed judgment of a court of competent jurisdiction; and
(c) The rights and remedies provided under this Agreement are
cumulative and may be exercised singly or concurrently and are not exclusive of
any rights and remedies provided by law or equity.
SECTION 18. Exercise of Remedies. In connection with the exercise of
its remedies pursuant to Section 17, the Agent may, (i) exchange, enforce, waive
or release any portion of the Collateral and any other security for the
Guaranteed Obligations; (ii) apply such Collateral or security and direct the
order or manner of sale thereof as the Agent may, from time to time, determine;
and (iii) settle, compromise, collect or otherwise liquidate any such Collateral
or security in any manner following the occurrence and during the continuation
of an Event of Default, without affecting or impairing the Agent's right to take
any other further action with respect to any Collateral or security or any part
thereof.
SECTION 19. License. The Agent is hereby granted a license or other
right to use, following the occurrence and during the continuance of an Event of
Default, without charge, (a) the Grantor's labels, patents, copyrights, trade
secrets, trade names, trademarks, service marks, customer lists and advertising
matter, or any property of a similar nature, as it pertains to the Collateral,
in completing production of, advertising for sale, and selling any Collateral,
provided that the Agent uses quality standards at least substantially equivalent
to those of the Grantor for the manufacture, advertising, sale and distribution
of the Grantor's products and services and (b) the Grantor's rights under all
licenses.
SECTION 20. Injunctive Relief. The Grantor recognizes that in the event
the Grantor fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, any remedy of law may prove to be inadequate
relief to the Holders of Guaranteed Obligations; therefore, the Grantor agrees
that the Agent shall be entitled to temporary and permanent injunctive relief in
any such case without the necessity of proving actual damages.
SECTION 21. Interpretation and Inconsistencies; Merger. (a) The rights
and duties created by this Agreement shall, in all cases, be interpreted
consistently with, and shall be in addition to (and not in lieu of), the rights
and duties created by the Guarantees, the Collateral Sharing Agreement, and the
other Loan Documents. In the event that any provision of this Agreement shall be
inconsistent with any provision of any other Loan Document, such provision of
the other Loan Document shall govern.
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(b) Except as provided in subsection (a) above, this Agreement
represents the final and entire agreement of the Grantor and the Agent with
respect to the matters contained herein.
SECTION 22. Expenses. The Grantor will upon demand pay to the Agent the
amount of any and all reasonable expenses, including the reasonable fees and
disbursements of its counsel and of any experts and agents, as provided in the
Credit Agreements, the Note Agreements, and/or the Collateral Sharing Agreement.
SECTION 23. Amendments, Etc. No amendment or waiver of any provision of
this Agreement nor consent to any departure by the Grantor herefrom shall in any
event be effective unless the same shall be in writing and signed by the Agent
(in accordance with the Collateral Sharing Agreement) and the Grantor, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
SECTION 24. Notices. All notices and other communications provided for
hereunder shall be delivered in the manner set forth in Section 8.2 of each of
the Credit Agreements.
SECTION 25. Continuing Security Interest; Termination. (a) Except as
provided in Section 25(b), this Agreement shall create a continuing security
interest in the Collateral and shall (i) remain in full force and effect until
the later of the payment or satisfaction in full of the Guaranteed Obligations
(other than contingent indemnity obligations) and the termination of each of the
Guarantees, (ii) be binding upon the Grantor, its successors and assigns and
(iii) except to the extent that the rights of any transferor or assignor are
limited by the terms of each of the Guarantees, inure, together with the rights
and remedies of the Agent hereunder, to the benefit of the Agent and any of the
Holders of Guaranteed Obligations. Nothing set forth herein or in any other Loan
Document is intended or shall be construed to give any other Person any right,
remedy or claim under, to or in respect of this Agreement or any other Loan
Document or any Collateral. The Grantor's successors and assigns shall include,
without limitation, a receiver, trustee or debtor-in-possession thereof or
therefor.
(b) The security interest granted hereby shall terminate and all rights
to the Collateral shall revert to the Grantor on the earlier of the date on
which (i) the Agent shall have received from each Holder of Guaranteed
Obligations written notice that all "Obligations" (as defined in the Collateral
Sharing Agreement) owing to such Holder of Guaranteed Obligations have been paid
in full or (ii) the Agent shall have received written notice from the Holders of
Guaranteed Obligations directing the Agent to release the Collateral and stating
that the Holders of Guaranteed Obligations have consented to such release under
the terms of the Credit Agreements, the Note Agreements and the Guarantees
provided, that no such termination shall occur prior to the payment in full of
all of the Agent's "Expenses" (as defined in the Collateral Sharing Agreement).
Upon the termination of the security interest, the Grantor shall be entitled to
the prompt return, upon its request and at its expense, of such of the
Collateral held by the Agent as shall not have been sold or otherwise applied
pursuant to the terms hereof and the Agent will, at the Grantor's expense,
promptly execute and deliver to the Grantor such other documents as the Grantor
shall reasonably request to evidence such termination. In connection with any
sales of assets permitted under the Credit Agreements and the Note Agreements,
the
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Agent will promptly release and terminate the liens and security interests
granted under this Agreement with respect to such assets.
SECTION 26. Severability. Any provision in this Agreement that is held
to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to
that jurisdiction, be inoperative, unenforceable, or invalid without affecting
the remaining provisions in that jurisdiction or the operation, enforceability,
or validity of that provision in any other jurisdiction, and to this end the
provisions of this Agreement are declared to be severable.
SECTION 27. GOVERNING LAW. ANY DISPUTE BETWEEN THE GRANTOR AND THE
AGENT ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT, AND
WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN
ACCORDANCE WITH THE LAWS (INCLUDING 735 ILCS SECTION 105/5-1 ET SEQ. BUT
OTHERWISE WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES) OF THE STATE OF
ILLINOIS.
SECTION 28. CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.
(A) NON-EXCLUSIVE JURISDICTION. EACH OF THE PARTIES HERETO AGREES THAT
ALL DISPUTES BETWEEN THEM ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS
AGREEMENT WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, MAY BE
RESOLVED NON-EXCLUSIVELY BY STATE OR FEDERAL COURTS LOCATED IN CHICAGO,
ILLINOIS, BUT THE PARTIES HERETO ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS
MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF CHICAGO, ILLINOIS. EACH OF
THE PARTIES HERETO WAIVES IN ALL DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION
(A) ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE
DISPUTE.
(B) VENUE. THE GRANTOR IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH
IN ANY JURISDICTION SET FORTH IN PARAGRAPH (A) ABOVE.
(C) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH. EACH OF THE PARTIES
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HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO
MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.
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IN WITNESS WHEREOF, the Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
AG-CHEM SALES CO., INC.
By: /s/ John Retherford
-------------------------------------
Name: John Retherford
Title: CFO
Address: 5720 Smetana Drive
Minnetonka, MN 55343
Facsimile No.: (612) 939-4405
BANK ONE, NA, having its principal office
in Chicago, Illinois, formerly known as
The First National Bank of Chicago, as
Agent
By: /s/ Kevin Gillen
-------------------------------------
Name: Kevin Gillen
Title: Vice President
Guarantor Security Agreement Signature Page
<PAGE>
EXHIBIT A-1
to
Guarantor Security Agreement
Form of Landlord Agreement
Bank One, NA
1 Bank One Plaza
Chicago, IL 60670
Attention: Jenny Gilpin
Ladies and Gentlemen:
Ag-Chem Sales Co., Inc., ("Grantor"), the lessee under that certain
lease dated _________________ between the Grantor, and the undersigned, covering
certain premises owned by the undersigned and located at _________________ (the
"Premises") more fully described in the lease attached hereto as Exhibit A (the
"Lease"). Grantor has certain of its assets located on the Premises.
Grantor has entered into certain financing arrangements with a group of
lenders ("Lenders") including Bank One, NA, as contractual representative for
the Lenders (the "Agent") and the Agent and the Lenders require, among other
things, that Grantor grant liens in favor of the Agent for the benefit of itself
and the Lenders on all of Grantor's property located on the Premises
("Collateral").
To induce the Agent and the Lenders (together with their respective
agents, successors and assigns) to continue said financing arrangements, and for
other good and valuable consideration, the undersigned hereby agrees that:
(i) it will not assert against any of Grantor's assets any
statutory or possessory liens, including, without limitation, rights of
levy or distraint for rent, all of which it hereby waives;
(ii) none of the Collateral located on the Premises shall be
deemed to be fixtures;
(iii) if Grantor defaults on its obligations to the Agent or
any Lender and, as a result, the Agent undertakes to enforce its
security interest in the Collateral, the undersigned will cooperate
with the Agent in its efforts to assemble all of the Collateral located
on the Premises, will permit the Agent to remain on the Premises for
ninety (90) days after the Agent gives the undersigned notice of
default, provided the Agent pays the rental payments due under the
Lease for the period of time the Agent uses the Premises, or, at the
Agent's option, to remove the Collateral from the Premises within a
reasonable time, not to exceed ninety (90) days after the Agent gives
the undersigned notice of default, provided the Agent pays the rental
payments due under the Lease for the period
<PAGE>
of time the Agent uses the Premises, and will not hinder the Agent's
actions in enforcing its liens on the Collateral;
[it will allow the Agent thirty (30) days from the Agent's
receipt of notice in which to cure or cause Grantor to cure any
defaults on Grantor's lease obligations to the undersigned; provided if
such default cannot reasonably be cured within the thirty (30) day
period, and provided the Agent is diligently pursuing a cure, then the
Agent shall have a reasonable period to cure such default;]
[(iv) if, for any reason whatsoever, the undersigned either
deems itself entitled to redeem or to take possession of the Premises
during the term of Grantor's lease or intends to sell or otherwise
transfer all or any part of its interest in the Premises, the
undersigned will notify the Agent five (5) days before taking such
action;]
[(v) the undersigned shall accept performance by the Agent of
the Grantor's obligations under the Lease as though the same had been
performed by the holder of the Grantor's interest therein at the time
of such performance. Upon the cure of any such default, any notice
advising of any default or any action of the undersigned to terminate
the Lease or to interfere with the occupancy, use or enjoyment of the
Premises by reason thereof, which action has not been completed, shall
be deemed rescinded and the Lease shall continue in full force and
effect. The undersigned shall not be required to continue any
possession or continue any action to obtain possession upon the cure of
any such default;]
Any notice(s) required or desired to be given hereunder shall be
directed to the party to be notified at the address stated herein.
The agreements contained herein shall continue in force until all of
Grantor's obligations and liabilities to the Agent and the Lenders are paid and
satisfied in full and all financing arrangements among the Agent, the Lenders
and Grantor have been terminated.
The undersigned will use reasonable efforts to notify all successor
owners, transferees, purchasers and mortgagees of the existence of this waiver.
The agreements contained herein may not be modified or terminated orally and
shall be binding upon the successors, assigns and personal representatives of
the undersigned, upon any successor owner or transferee of the Premises, and
upon any purchasers, including any mortgagee, from the undersigned.
The undersigned agrees that nothing contained in this waiver shall be
construed as an assumption by the Agent or any of the other lenders of any
obligations of Grantor contained in the Lease.
Executed and delivered this ____ day of ____________, at _____________.
THIS WAIVER SHALL NOT IMPAIR OR OTHERWISE AFFECT GRANTOR'S
OBLIGATIONS TO PAY RENT AND ANY OTHER SUMS
2
<PAGE>
PAYABLE BY GRANTOR OR TO OTHERWISE PERFORM ITS OBLIGATIONS TO
THE LESSOR PURSUANT TO THE TERMS OF THE LEASE.
[Name of Lessor]
By:
-------------------------------------
Title:
----------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
AGREED & ACKNOWLEDGED:
[ ]
------------------------------
By:
-------------------------------------
Title:
----------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
3
<PAGE>
EXHIBIT A
to
Landlord Agreement
Lease
(attached hereto)
<PAGE>
EXHIBIT B
to
Landlord Agreement
Leasehold Mortgage
(attached hereto)
<PAGE>
[ACKNOWLEDGMENT (CORPORATE)
STATE OF )
------------------------
)SS
COUNTY OF )
-----------------------
Before me, a Notary Public in and for said County, personally appeared
_____________, a _________________________ corporation, by the _________________
of such corporation, who acknowledged that (s)he did sign the foregoing
instrument on behalf of said corporation and that said instrument is the
voluntary act and deed of said corporation and his/her voluntary act and deed as
such officer of said corporation.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name and affixed my
official seal this ____ day of ____________, at _____________, ________________.
-----------------------------------------
Notary Public
My Commission Expires:]
(Notarial Seal)
<PAGE>
[ACKNOWLEDGMENT (CORPORATE)
STATE OF )
------------------------
)SS
COUNTY OF )
-----------------------
Before me, a Notary Public in and for said County, personally appeared
_____________, a ______________ corporation, by the ______________________ of
such corporation, who acknowledged that (s)he did sign the foregoing instrument
on behalf of said corporation and that said instrument is the voluntary act and
deed of said corporation and his/her voluntary act and deed as such officer of
said corporation.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name and affixed my
official seal this ____day of ___________, at _______________, ________________.
-----------------------------------------
Notary Public
My Commission Expires:]
(Notarial Seal)
<PAGE>
EXHIBIT A-2
to
Guarantor Security Agreement
Form of Mortgagee Agreement
Bank One, NA
1 Bank One Plaza
Chicago, IL 60670
Attention: Jenny Gilpin
Ladies and Gentlemen:
Ag-Chem Sales Co., Inc. ("Grantor"), is the lessee under that certain
lease dated ___________________ between the Grantor, and ____________________
(the "Landlord[s]"), covering certain premises located at _________________ (the
"Premises") as more fully described on Exhibit A(1) attached hereto (the
"Lease"). The undersigned is the mortgagee under a mortgage between the
Landlord[s] and the undersigned covering the Premises (the "Mortgage"). The
undersigned is the sole mortgagee of the Premises. Grantor has certain of its
assets located on the Premises.
Grantor has entered into certain financing arrangements with a group of
lenders ("Lenders") including Bank One, NA, as contractual representative for
the Lenders (the "Agent") and the Agent and the Lenders require, among other
things, that Grantor grant liens in favor of the Agent for the benefit of itself
and the Lenders on all of Grantor's property located on the Premises
("Collateral").
By its signature below, the undersigned agrees that:
(i) it will not assert against any of the Collateral any
statutory or possessory liens, including, without limitation, rights of
levy or distraint for rent, all of which it hereby waives;
(ii) none of the Collateral located on the Premises shall be
deemed to be fixtures;
[(iii) it will allow the Agent thirty (30) days from the
Agent's receipt of notice in which to cure or cause Grantor to cure any
such defaults on its mortgage obligations; provided if such default
cannot reasonably be cured within the thirty
- ----------------------
(1) Please attach legal description of premises for recordation purposes.
<PAGE>
(30) day period, and provided the Agent is diligently pursuing a cure,
then the Agent shall have a reasonable period to cure such default;]
[(iv) if, for any reason whatsoever, the undersigned either
deems itself entitled to take possession of the Premises during the
term of the Mortgage or intends to sell or otherwise transfer all or
any part of its interest in the Premises, the undersigned will notify
the Agent five (5) days before taking such action;]
(v) if Grantor defaults on its obligations to the Agent or any
Lender and, as a result, the Agent undertakes to enforce its security
interest in the Collateral, the undersigned will cooperate with the
Agent in its efforts to assemble all of the Collateral located on the
Premises, will permit the Agent to remain on the Premises for ninety
(90) days after the Agent gives the undersigned notice of default,
provided the Agent pays the Lease payments to the Landlord[s] due under
the Lease for the period of time the Agent uses the Premises, or, at
the Agent's option, to remove the Collateral from the Premises within a
reasonable time, not to exceed ninety (90) days after the Agent gives
the undersigned notice of default, provided the Agent pays the rental
payments to the Landlord[s] due under the Lease for the period of time
the Agent uses the Premises, and will not hinder the Agent's actions in
enforcing its liens on the Collateral; and
Any notice(s) required or desired to be given hereunder shall be
directed to the party to be notified at the address stated herein.
The agreements contained herein shall continue in force until all of
Grantor's obligations and liabilities to the Agent and the Lenders are paid and
satisfied in full and all financing arrangements among the Agent, the Lenders
and Grantor have been terminated.
The undersigned will notify all successor owners, transferees,
purchasers and mortgagees of the existence of this waiver. The agreements
contained herein may not be modified or terminated orally and shall be binding
upon the successors, assigns and personal representatives of the undersigned,
upon any successor owner or transferee of the Premises, and upon any purchasers,
including any mortgagee, from the undersigned.
[The undersigned consents to the granting of the Leasehold Mortgage to
the Agent and to the liens, security interests and encumbrances created by and
resulting from the Leasehold Mortgage or other documents collateral thereto in
the form attached hereto as Exhibit B.]
The undersigned agrees that nothing contained in this waiver shall be
construed as an assumption by the agent or any of the other lenders of any
obligations of the landlord contained in the mortgage.
Executed and delivered this ____ day of ___________, at ______________.
THIS WAIVER SHALL NOT IMPAIR OR OTHERWISE AFFECT GRANTOR'S
OBLIGATIONS TO PAY RENT AND ANY OTHER SUMS
2
<PAGE>
PAYABLE BY GRANTOR OR TO OTHERWISE PERFORM ITS OBLIGATIONS TO
THE LANDLORD PURSUANT TO THE TERMS OF THE LEASE.
[Name of Mortgagee]
By:
-------------------------------------
Title:
----------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
AGREED & ACKNOWLEDGED:
[ ]
------------------------------
By:
-------------------------------------
Title:
----------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
3
<PAGE>
EXHIBIT A
to
Landlord Agreement
Lease
(attached hereto)
<PAGE>
EXHIBIT B
to
Landlord Agreement
Leasehold Mortgage
(attached hereto)
<PAGE>
STATE OF )
------------------------
)SS
COUNTY OF )
-----------------------
The foregoing letter agreement was acknowledged before me this ___ day
of _____________, by _____________________, a _______________ of ______________,
a ____________________, on behalf of such _____________________.
-----------------------------------------
Notary Public
________ County, _____________
My commission expires:_______]
<PAGE>
EXHIBIT B
to
Guarantor Security Agreement
Form of Bailee Letter
To: Bank One, NA
1 Bank One Plaza
Chicago, IL 60670
Attention: Jenny Gilpin
Ladies and Gentlemen:
Ag-Chem Sales Co., Inc. ("Grantor"), now does or hereafter may store
certain of its merchandise, inventory, or other of its personal property at
premises located at _______________ (the "Premises") owned or leased by the
undersigned.
Grantor has entered into certain financing arrangements with a group of
lenders (the "Lenders") including Bank One, NA (the "Agent") and, as a condition
to continuing the loans and other financial accommodations of the Lenders to
Grantor, the Agent and the Lenders require, among other things, that Grantor
grant liens in favor of the Agent for the benefit of the Agent and the Lenders
on all of Grantor's property located on the Premises ("Collateral").
To induce the Agent and the Lenders (together with their respective
agents, successors and assigns) to continue said financing arrangements, and for
other good and valuable consideration, the undersigned hereby agrees that:
(i) it will not assert against any of Grantor's assets any
statutory or possessory liens, including, without limitation, rights of
levy or distraint for rent, all of which it hereby waives;
(ii) the Collateral shall be identifiable as being owned by
Grantor and kept reasonably separate and distinct from other property
in the possession of the undersigned;
(iii) none of the Collateral located on the Premises shall be
deemed to be fixtures; and
(iv) if Grantor defaults on its obligations to the Lenders or
the Agent and, as a result, the Agent undertakes to enforce its
security interest in the Collateral, the undersigned (a) will cooperate
with the Agent in its efforts to assemble all of the Collateral located
on the Premises, (b) will permit the Agent to either remain on the
Premises for ninety (90) days after the Agent gives the undersigned
notice of default or, at the Agent's option, to remove the Collateral
from the Premises within a reasonable time, not to exceed ninety
<PAGE>
(90) days after the Agent gives the undersigned notice of default,
provided in either instance that the Agent leaves the Premises in the
same condition as existed immediately prior to such ninety (90) day
period, and the Agent shall indemnify the undersigned for any damages
arising solely out of its occupancy of the Premises, and (c) will not
hinder the Agent's actions in enforcing its liens on the Collateral.
Any notice(s) required or desired to be given hereunder shall be
directed to the party to be notified at the address stated herein.
The agreements contained herein shall continue in force until all of
Grantor's obligations and liabilities to the Agent and Lenders are paid and
satisfied in full and all financing arrangements among the Agent, the Lenders
and Grantor have been terminated.
The undersigned will notify all successor owners, transferees,
purchasers and mortgagees of the existence of this agreement. The agreements
contained herein may not be modified or terminated orally and shall be binding
upon the successors, assigns and personal representatives of the undersigned,
upon any successor owner or transferee of any of the Premises, and upon any
purchasers, including any mortgagee, from the undersigned.
Executed and delivered this ____ day of ____________, at _____________.
[Name and Address of Bailee]
(By)
-------------------------------------
2
<PAGE>
SCHEDULE 1
to
Guarantor Security Agreement
Locations of Collateral
Attached
<PAGE>
SCHEDULE 1-A
to
Guarantor Security Agreement
Third Party Locations:
<PAGE>
SCHEDULE 1-B
to
Guarantor Security Agreement
Financing Statement Filing Locations:
<PAGE>
SCHEDULE 2
to
Guarantor Security Agreement
Trade Names:
<PAGE>
SCHEDULE 3
to
Guarantor Security Agreement
Pledged Debt:
EXHIBIT 10.23
GUARANTOR SECURITY AGREEMENT
DATED AS OF MAY 15, 2000
between
LOR*AL PRODUCTS, INC.
AND
BANK ONE, NA
AS AGENT
<PAGE>
TABLE OF CONTENTS
PAGE
----
SECTION 1. Defined Terms.......................................................1
SECTION 2. Grant of Security...................................................2
SECTION 3. [RESERVED]..........................................................5
SECTION 4. Grantor Remains Liable..............................................5
SECTION 5. Representations and Warranties......................................5
SECTION 6. Perfection and Maintenance of Security Interests and Liens..........6
SECTION 7. Financing Statements................................................7
SECTION 8. Filing Costs........................................................7
SECTION 9. Schedule of Collateral..............................................7
SECTION 10. Equipment and Inventory............................................8
SECTION 11. Accounts...........................................................8
SECTION 12. Leased Real Property...............................................9
SECTION 13. General Covenants..................................................9
SECTION 14. The Agent Appointed Attorney-in-Fact..............................10
SECTION 15. The Agent May Perform.............................................10
SECTION 16. The Agent's Duties................................................11
SECTION 17. Remedies..........................................................11
SECTION 18. Exercise of Remedies..............................................12
SECTION 19. License...........................................................12
SECTION 20. Injunctive Relief.................................................12
SECTION 21. Interpretation and Inconsistencies; Merger........................12
SECTION 22. Expenses..........................................................13
SECTION 23. Amendments, Etc...................................................13
SECTION 24. Notices...........................................................13
SECTION 25. Continuing Security Interest; Termination.........................13
SECTION 26. Severability......................................................14
SECTION 27. GOVERNING LAW.....................................................14
SECTION 28. CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL...........14
(A) NON-EXCLUSIVE JURISDICTION...........................................14
(B) VENUE................................................................14
(C) WAIVER OF JURY TRIAL.................................................14
i
<PAGE>
EXHIBITS
- --------
Exhibit A-1 Form of Landlord Agreement
Exhibit A-2 Form of Mortgagee Agreement
Exhibit B Form of Bailee Letter
SCHEDULES
- ---------
Schedule 1 Locations of Collateral
Schedule 1-A Third Party Locations
Schedule 1-B Financing Statement Filing Locations
Schedule 2 Trade Names
Schedule 3 Pledged Debt
ii
<PAGE>
GUARANTOR SECURITY AGREEMENT
This GUARANTOR SECURITY AGREEMENT (the "Agreement"), dated as of May
15, 2000 is made by LOR*AL PRODUCTS, INC. (the "Grantor"), in favor of BANK ONE,
NA, having its principal office in Chicago, Illinois, formerly known as The
First National Bank of Chicago (the "Agent"), for its benefit and for the
benefit of the "Holders of Guaranteed Obligations" (as defined below) who are,
or may hereafter become, parties to either of the Credit Agreements or Note
Agreements referred to below.
PRELIMINARY STATEMENT
The Grantor entered into a Guaranty (Short Term) dated as of June 4,
1999, as reaffirmed on the date hereof (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the "Short Term Guaranty")
between the Grantor and the Agent. The Grantor also entered into a Guaranty
(Long Term) dated as of January 12, 1996, as reaffirmed on the date hereof (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the "Long Term Guaranty," and taken together with the Short Term
Guaranty, the "Bank Guarantees"), between the Grantor and the Agent.
The Grantor also guaranteed (such guarantees, the "Noteholder
Guarantees" and together with the Bank Guarantees, the "Guarantees") obligations
outstanding under a (i) a Note Agreement, dated as of April 6, 1994, with C.M.
Life Insurance Company and (ii) a Note Agreement, dated as of October 10, 1995,
with The Prudential Insurance Company of America (such agreements, the "Note
Agreements").
The Grantor, in order to secure its obligations under the Guarantees,
has agreed to grant to the Agent on behalf of the Holders of Guaranteed
Obligations the security interest contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Defined Terms. Unless otherwise defined herein, terms
defined in the Credit Agreements are used herein as therein defined, and the
following terms shall have the following meanings (such meanings being equally
applicable to both the singular and the plural forms of the terms defined):
"Agreement" shall mean this Guarantor Security Agreement, as the same
may from time to time be amended, restated, modified or supplemented, and shall
refer to this Agreement as the same may be in effect at the time such reference
becomes operative.
"Collateral" shall mean all property and rights in property now owned
or hereafter at any time acquired by the Grantor in or upon which a Lien is
granted in favor of the Agent by
<PAGE>
the Grantor under this Agreement, including, without limitation, the property
described in Section 2.
"Collateral Sharing Agreement" shall mean the Collateral Sharing
Agreement, dated as of the date hereof, as the same may be amended, restated,
supplemented or otherwise modified from time to time, among the Holders of
Guaranteed Obligations and the Agent, as acknowledged by the Grantor and certain
of its affiliates.
"Credit Agreements" shall mean (i) the Third Amended and Restated Long
Term Revolving Credit Agreement, dated as of June 4, 1999, among the Grantor,
the institutions from time to time party thereto as lenders, the Agent, as
contractual representative for such lenders, Ag-Chem Equipment Canada Ltd. and
Ag-Chem Europe B.V., as the same may be amended, restated, supplemented or
otherwise modified from time to time and (ii) the Short Term Revolving Credit
Agreement, dated as of June 4, 1999, among the Grantor, the institutions from
time to time party thereto as lenders, and the Agent, as contractual
representative for such lenders, as the same may be amended, restated,
supplemented or otherwise modified from time to time.
"Event of Default" shall mean an "Event of Default" as defined in the
Credit Agreements and the comparable term as it is set forth in the Note
Agreements.
"Guaranteed Obligations" shall mean the aggregate obligations of the
Grantor owing under the Guarantees, including, without limitation, Grantor's
guaranty to promptly and fully satisfy when due Indebtedness under the Credit
Agreements and obligations outstanding under the Note Agreements.
"Holders of Guaranteed Obligations" shall mean the holders of the
Guaranteed Obligations from time to time and shall include their respective
successors, transferees and assigns.
"Lien" shall mean any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or security
agreement of any kind or nature whatsoever (including, without limitation, the
interest of a vendor or lessor under any conditional sale, Capital Lease, or
other title retention agreement).
"Pledged Debt" shall have the meaning set forth in Section 2 of this
Agreement.
"UCC" shall mean the Uniform Commercial Code as the same may, from time
to time, be in effect in the State of Illinois; provided, however, in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of the Agent's and the Holders of Guaranteed Obligations'
security interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of Illinois, the term "UCC"
shall mean the Uniform Commercial Code as in effect in such other jurisdiction
for purposes of the provisions hereof relating to such attachment, perfection or
priority and for purposes of definitions related to such provisions.
SECTION 2. Grant of Security. To secure the prompt and complete
payment, observance and performance of the Guaranteed Obligations, the Grantor
hereby assigns and
2
<PAGE>
pledges to the Agent, for the benefit of itself and the Holders of Guaranteed
Obligations, and hereby grants to the Agent, for the benefit of itself and the
Holders of Guaranteed Obligations, a security interest in all of the Grantor's
right, title and interest in and to the following, whether now owned or existing
or hereafter arising or acquired and wheresoever located:
ACCOUNTS: All "accounts" as such term is defined in Section 9-106 of
the UCC, whether now owned or hereafter acquired or arising; the Grantor intends
that the term "accounts", as used herein, be construed in its broadest sense,
and such term shall include, without limitation, all present and future
accounts, accounts receivable and other rights of the Grantor to payment for
goods sold or leased or for services rendered (except those evidenced by
instruments or chattel paper), whether now existing or hereafter arising and
wherever arising, and whether or not they have been earned by performance
(collectively, "Accounts");
INVENTORY: All "inventory" as defined in Section 9-109(4) of the UCC,
whether now owned or hereafter acquired or arising; the Grantor intends that the
term "inventory", as used herein, be construed in its broadest sense, and such
term shall include, without limitation, all goods now owned or hereafter
acquired by the Grantor (wherever located, whether in the possession of the
Grantor or of a bailee or other person for sale, storage, transit, processing,
use or otherwise and whether consisting of whole goods, spare parts, components,
supplies, materials, or consigned, returned or repossessed goods) which are held
for sale or lease, which are to be furnished (or have been furnished) under any
contract of service or which are raw materials, work in process or materials
used or consumed in the Grantor's business (collectively, "Inventory");
EQUIPMENT: All "equipment" as such term is defined in Section 9-109(2)
of the UCC, whether now owned or hereafter acquired or arising; the Grantor
intends that the term "equipment", as used herein, be construed in its broadest
sense, and such term shall include, without limitation, all machinery, all
manufacturing, distribution, selling, data processing and office equipment, all
furniture, furnishings, appliances, tools, tooling, molds, dies, and all other
goods of every type and description (other than Inventory), in each instance
whether now owned or hereafter acquired by the Grantor and wherever located
(collectively, "Equipment"), but in no case shall include fixtures located on
real property subject to "Permitted Liens" (as defined in the Credit
Agreements);
GENERAL INTANGIBLES: All "general intangibles" as defined in Section
9-106 of the UCC, whether now owned or hereafter acquired or arising; the
Grantor intends that the term "general intangibles", as used herein, be
construed in its broadest sense, and such term shall include, without
limitation, all rights, interests, choses in action, causes of actions, claims
and all other intangible property of the Grantor of every kind and nature (other
than Accounts), in each instance whether now owned or hereafter acquired by the
Grantor and however and whenever arising, including, without limitation, all
corporate and other business records; all loans, royalties, and other
obligations receivable; customer lists, credit files, correspondence, and
advertising materials; firm sale orders, other contracts and contract rights;
all interests in partnerships and joint ventures; all tax refunds and tax refund
claims; all right, title and interest under leases, subleases, licenses and
concessions and other agreements relating to real or personal property; all
payments due or made to the Grantor in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of any property by any person
or governmental
3
<PAGE>
authority; all deposit accounts (general or special) with any bank or other
financial institution, including, without limitation, any deposits or other sums
at any time credited by or due to the Grantor from any of the Holders of
Guaranteed Obligations or any of their respective Affiliates with the same
rights therein as if the deposits or other sums were credited by or due from
such Holder of Guaranteed Obligations; all credits with and other claims against
carriers and shippers; all rights to indemnification; all patents, and patent
applications (including all reissues, divisions, continuations and extensions);
all service marks and service mark applications; all trade secrets and
inventions; all copyrights and copyright applications (including all computer
software and related documentation); all rights and interests in and to
trademarks, trademark registrations and applications therefor, trade names,
corporate names, brand names, slogans, all goodwill associated with the
foregoing; all license agreements and franchise agreements, all reversionary
interests in pension and profit sharing plans and reversionary, beneficial and
residual interest in trusts; all proceeds of insurance of which the Grantor is
beneficiary; and all letters of credit, guaranties, liens, security interests
and other security held by or granted to the Grantor; and all other intangible
property, whether or not similar to the foregoing;
LAB PROCESSING AND ENGINEERING INFORMATION: All rights and interests in
and to processes, lab journals, and notebooks, data, trade secrets, know-how,
product formulae and information, manufacturing, engineering and other drawings
and manuals, technology, blueprints, research and development reports, agency
agreements, technical information, technical assistance, engineering data,
design and engineering specifications, and similar materials recording or
evidencing expertise used in or employed by the Grantor (including any license
for the foregoing);
CONTRACT RIGHTS: All rights and interests in and to any pending or
executory contracts, requests for quotations, invitations for bid, agreements,
leases and arrangements of which the Grantor is a party to or in which the
Grantor has an interest;
CHATTEL PAPER, INSTRUMENTS AND DOCUMENTS: All chattel paper, leases,
all instruments, including, without limitation, the notes and debt instruments
described in SCHEDULE 3 (the "Pledged Debt") and all payments thereunder and
instruments and other property from time to time delivered in respect thereof or
in exchange therefor, and all bills of sale, bills of lading, warehouse receipts
and other documents of title, in each instance whether now owned or hereafter
acquired by the Grantor;
INTEREST AND CURRENCY CONTRACTS: Any and all interest rate or currency
exchange agreements or derivative agreements, including without limitation, cap,
collar, floor, forward or similar agreements or other rate protection
arrangements;
INVESTMENT PROPERTY: Any and all investment property (as defined in
Section 9-115(1)(f) of the UCC) of the Grantor, including any instruments,
certificates of deposit, equity interests or investments of any kind; and
OTHER PROPERTY: All property or interests in property now owned or
hereafter acquired by the Grantor which now may be owned or hereafter may come
into the possession, custody or control of the Agent or any of the Holders of
Guaranteed Obligations or any agent or Affiliate of any of them in any way and
for any purpose (whether for safekeeping,
4
<PAGE>
deposit, custody, pledge, transmission, collection or otherwise); and all rights
and interests of the Grantor, now existing or hereafter arising and however and
wherever arising, in respect of any and all (i) notes, drafts, letters of
credit, stocks, bonds, and debt and equity securities, whether or not
certificated, investment property and warrants, options, puts and calls and
other rights to acquire or otherwise relating to the same; (ii) money; (iii)
proceeds of loans including, without limitation, loans made under the Credit
Agreements; and (iv) insurance proceeds and books and records relating to any of
the property covered by this Agreement; together, in each instance, with all
accessions and additions thereto, substitutions therefor, and replacements,
proceeds and products thereof.
The Collateral upon which the Agent has been granted a Lien hereunder
shall not include property and rights in property subject to "Permitted Liens"
(as defined in the Credit Agreements) so long as such property and rights in
property are subject to such Permitted Liens.
SECTION 3. [RESERVED].
SECTION 4. Grantor Remains Liable. Anything herein to the contrary
notwithstanding, (a) the Grantor shall remain solely liable under the contracts
and agreements included in the Collateral to the extent set forth therein to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by the Agent of any of
its rights hereunder shall not release the Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral, and
(c) neither the Agent nor the Holders of Guaranteed Obligations shall have any
responsibility, obligation or liability under the contracts and agreements
included in the Collateral by reason of this Agreement, nor shall the Agent or
the Holders of Guaranteed Obligations be required or obligated, in any manner,
to (i) perform or fulfill any of the obligations or duties of the Grantor
thereunder, (ii) make any payment, or make any inquiry as to the nature or
sufficiency of any payment received by the Grantor or the sufficiency of any
performance by any party under any such contract or agreement or (iii) present
or file any claim, or take any action to collect or enforce any claim for
payment assigned hereunder.
SECTION 5. Representations and Warranties. The Grantor represents and
warrants, as of the date of this Agreement and as of each date hereafter (except
for changes permitted or contemplated by this Agreement) until termination of
this Agreement pursuant to Section 25:
(a) The correct corporate name of the Grantor is set forth in the first
paragraph of this Agreement. The locations listed on SCHEDULE 1 constitute all
locations at which Inventory and/or Equipment is located and the Grantor has
exclusive possession and control of such Equipment and Inventory, except for (i)
such Inventory and Equipment which is (A) temporarily in transit between such
locations, or (B) temporarily stored with third parties or held by third parties
for processing, storage, engineering, evaluation or repairs, the proper
corporate names of which third parties, the location of such Inventory and/or
Equipment, and the nature of the relationship between the Grantor and such third
parties are set forth on SCHEDULE 1-A, as such SCHEDULE 1-A may be amended or
supplemented from time to time, or have been otherwise provided to the Agent,
(ii) Equipment sold to and subsequently repurchased from a third party by the
Grantor for the period beginning on the date of such repurchase and ending on
the date of the
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re-sale of such Equipment to a different third party, (iii) Equipment
transferred from a third party to the Grantor (such Equipment, "Trade-In
Equipment") in partial satisfaction of the purchase price for Equipment sold by
the Grantor to such third party for the period beginning on the date of the
transfer of such Trade-In Equipment and ending on the date the Grantor sells
such Trade-In Equipment, and (iv) Equipment used by the Grantor in connection
with demonstrations to prospective purchasers of such Equipment; provided, that
the aggregate value of the Equipment described in clauses (ii), (iii), and (iv)
does not exceed $10,000,000. The chief place of business and chief executive
office of the Grantor are located at the address of the Grantor set forth below
the Grantor's signature to this Agreement. All records concerning any Accounts
and all originals of chattel paper which evidence any Account are located at the
addresses listed on SCHEDULE 1 and none of the Accounts is evidenced by a
promissory note or other instrument except for such notes and other instruments
delivered to the Agent.
(b) The Grantor is the legal and beneficial owner of the Collateral
free and clear of all Liens except for Liens permitted as of the date hereof
under the Credit Agreements and the Note Agreements. The Grantor currently
conducts business under the name Lor*Al Products, Inc., and, in certain areas
and for certain operations, the additional trade names listed on SCHEDULE 2. The
Grantor uses no trade names or fictitious names, except as set forth on SCHEDULE
2.
(c) This Agreement creates in favor of the Agent a legal, valid and
enforceable security interest in the Collateral. When financing statements have
been filed in the appropriate offices against the Grantor in the locations
listed on SCHEDULE 1-B, the Agent will have a fully perfected first priority
lien on, and security interest in, the Collateral in which a security interest
may be perfected by such filing, subject only to Liens permitted as of the date
hereof under the Credit Agreements and the Note Agreements.
(d) No authorization, approval or other action by, and no notice to or
filing with, any Governmental Authority that has not already been taken or made
and is in full force and effect is required (i) for the grant by the Grantor of
the security interest in the Collateral granted hereby; (ii) for the execution,
delivery or performance of this Agreement by the Grantor; or (iii) for the
exercise by the Agent of any of its rights or remedies hereunder.
(e) The Pledged Debt issued by any Affiliate of the Grantor, and to the
best of the Grantor's knowledge, all other Pledged Debt, has been duly
authorized, issued and delivered, and is the legal, valid, binding and
enforceable obligation of the respective issuer thereof.
SECTION 6. Perfection and Maintenance of Security Interests and Liens.
The Grantor agrees that until all of the Guaranteed Obligations (other than
contingent indemnity obligations) have been fully satisfied and each of the
Guarantees has been terminated, the Agent's security interests in and Liens on
and against the Collateral and all proceeds and products thereof shall continue
in full force and effect. The Grantor shall perform any and all steps reasonably
requested by the Agent to perfect, maintain and protect the Agent's security
interests in and Liens on and against the Collateral granted or purported to be
granted hereby or to enable the Agent to exercise its rights and remedies
hereunder with respect to any Collateral, including, without limitation, (i)
executing and filing financing or continuation statements, or
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amendments thereof, in form and substance reasonably satisfactory to the Agent,
(ii) delivering to the Agent all certificates, notes, and other instruments
(including, without limitation, all letters of credit on which the Grantor is
named as a beneficiary) representing or evidencing Collateral, which
certificates, notes, and other instruments have been duly endorsed or are
accompanied by duly executed instruments of transfer or assignment, including,
but not limited to, note powers, all in form and substance satisfactory to the
Agent, (iii) at the reasonable direction of Agent, delivering to the Agent
warehouse receipts covering that portion of the Collateral, if any, located in
warehouses and for which warehouse receipts are issued, (iv) after the
occurrence and during the continuance of an Event of Default, transferring
Inventory and Equipment to warehouses designated by the Agent or taking such
other steps as are reasonably deemed necessary by the Agent to maintain the
Agent's control of the Inventory and Equipment, (v) upon the reasonable request
of the Agent, marking conspicuously each document, contract, chattel paper and
all records pertaining to the Collateral with a legend, in form and substance
satisfactory to the Agent, indicating that such document, contract, chattel
paper, or other record pertaining to the Collateral is subject to the security
interest granted hereby, (vi) obtaining waivers of Liens and access agreements
in substantially the following forms: (a) EXHIBIT A-1 hereto (or such other form
as may be agreed to by the Agent) from landlords with respect to all leases
executed after the date hereof, (b) EXHIBIT A-2 hereto (or such other form as
may be agreed to by the Agent) from mortgagees with respect to all leases
executed after the date hereof and (3) EXHIBIT B hereto (or such other form as
may be agreed to by the Agent) from the appropriate Person with respect to all
arrangements pursuant to which Inventory will be stored in public warehouse
facilities after the date hereof, and (vii) executing and delivering all further
instruments and documents, and taking all further action, as the Agent may
reasonably request.
SECTION 7. Financing Statements. To the extent permitted by applicable
law, the Grantor hereby authorizes the Agent to file one or more financing or
continuation statements and amendments thereto, disclosing the security interest
granted to the Agent under this Agreement without the Grantor's signature
appearing thereon, and the Agent agrees to notify the Grantor when such a filing
has been made. The Grantor agrees that a carbon, photographic, photostatic, or
other reproduction of this Agreement or of a financing statement is sufficient
as a financing statement. If any Inventory or Equipment is in the possession or
control of any warehouseman or the Grantor's agents or processors, the Grantor
shall, upon the Agent's request, notify such warehouseman, agent or processor of
the Agent's security interest in such Inventory and Equipment and, upon the
Agent's request, instruct them to hold all such Inventory or Equipment for the
Agent's account and subject to the Agent's instructions.
SECTION 8. Filing Costs. The Grantor shall pay the costs of, or
incidental to, all recordings or filings of all financing statements, including,
without limitation, any filing expenses incurred by the Agent pursuant to
Section 7.
SECTION 9. Schedule of Collateral. The Grantor shall furnish to the
Agent from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the Agent may reasonably request, all in reasonable detail.
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SECTION 10. Equipment and Inventory. The Grantor covenants and agrees
with the Agent that from the date of this Agreement and until termination of
this Agreement pursuant to Section 25, the Grantor shall:
(a) Keep the Equipment and Inventory (other than Equipment or Inventory
sold or disposed of as permitted by the Credit Agreements and the Note
Agreements) at the places specified in Section 5(a), except for (i) Equipment
and Inventory (A) temporarily in transit between such locations or (B)
temporarily stored with the third parties or held by third parties for
processing, storage, engineering, evaluation, or repairs as set forth on
SCHEDULE 1-A, and deliver written notice to the Agent at least thirty (30) days
prior to establishing any other location at which it reasonably expects to
maintain Inventory and/or Equipment in which location or with which third party
all action required by this Agreement shall have been taken with respect to all
such Equipment and Inventory, (ii) Equipment sold to and subsequently
repurchased from a third party by the Grantor for the period beginning on the
date of such repurchase and ending on the date of the re-sale of such Equipment
to a different third party, (iii) Equipment transferred from a third party to
the Grantor (such Equipment, "Trade-In Equipment") in partial satisfaction of
the purchase price for Equipment sold by the Grantor to such third party for the
period beginning on the date of the transfer of such Trade-In Equipment and
ending on the date the Grantor sells such Trade-In Equipment and (iv) Equipment
used by the Grantor in connection with demonstrations to prospective purchasers
of such Equipment; provided, that the aggregate value of the Equipment described
in clauses (ii), (iii) and (iv) does not exceed $10,000,000;
(b) Maintain or cause to be maintained in good repair, working order,
and condition, excepting ordinary wear and tear and damage due to casualty, all
of the Equipment, and make or cause to be made all appropriate repairs, renewals
and replacements thereof, as quickly as practicable after the occurrence of any
loss or damage thereto which are necessary or desirable to such end; and
(c) Comply with the terms of the Credit Agreements and the Note
Agreements with respect to such Equipment and Inventory, including, without
limitation, the maintenance and insurance provisions set forth in Section 5.1(c)
of each of the Credit Agreements.
SECTION 11. Accounts. The Grantor covenants and agrees with the Agent
that from and after the date of this Agreement and until termination of this
Agreement pursuant to Section 25, the Grantor:
(a) Shall keep its chief place of business and chief executive office
and the office where it keeps its records concerning the Accounts at its address
set forth below the Grantor's signature on this Agreement, and keep the offices
where it keeps all originals of all chattel paper which evidence Accounts at the
locations therefor specified in Section 5(a) or, upon thirty (30) days' prior
written notice to the Agent, at such other locations within the United States in
a jurisdiction where all actions required by Section 6 shall have been taken
with respect to the Accounts. The Grantor will hold and preserve such records
(in accordance with the Grantor's usual document retention practices) and
chattel paper and will permit representatives of the Agent at any time during
normal business hours to inspect and make abstracts from such records and
chattel paper;
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(b) Shall in any suit, proceeding or action brought by the Agent under
any Account comprising part of the Collateral, the Grantor will save, indemnify
and keep each of the Holders of Guaranteed Obligations harmless from and against
all expenses, loss or damage suffered by reason of any defense, setoff,
counterclaim, recoupment or reduction of liability whatsoever of the obligor
thereunder, arising out of a breach by the Grantor of any obligation or arising
out of any other agreement, indebtedness or liability at any time owing to or in
favor of such Holder of Guaranteed Obligations from the Grantor, and all such
obligations of the Grantor shall be and shall remain enforceable against and
only against the Grantor and shall not be enforceable against any of the Holders
of Guaranteed Obligations; and
(c) Shall not sell, transfer assign or encumber any account,
instrument, or chattel paper other than pursuant to the terms of the Credit
Agreements and the Note Agreements.
SECTION 12. Leased Real Property. The Grantor covenants and agrees with
the Agent that from and after the date of this Agreement and until termination
of this Agreement pursuant to Section 25, that:
(a) Promptly following, but not later than ninety (90) days after, the
close of each fiscal year the Grantor will furnish to the Agent a report
certified to be true and correct by the Grantor containing a list of each of the
Grantor's leased premises; the name or names of all owners; rentals being paid;
and whether the Grantor has obtained waivers of Liens and access agreements from
landlords with respect to such premises in accordance with Section 6; and
(b) The Grantor agrees that, after the occurrence and during the
continuation of an Event of Default, the Agent may, but need not, make any
payment or perform any act hereinbefore required of the Grantor with respect to
the Grantor's leased premises in any form and manner deemed expedient. All money
paid for any of the purposes herein authorized and all other moneys advanced by
the Agent to protect the lien hereof shall be additional Guaranteed Obligations
secured hereby and shall become immediately due and payable without notice and
shall bear interest thereon at the default interest rate as provided in the
Credit Agreement until paid to the Agent in full.
(c) The Grantor agrees that it will not amend any lease in a manner
that has a material adverse affect on the interests of the Holders of Guaranteed
Obligations without the Agent's prior written consent.
SECTION 13. General Covenants. The Grantor covenants and agrees with
the Agent that from and after the date of this Agreement and until termination
of this Agreement pursuant to Section 25, the Grantor shall:
(a) Keep and maintain at the Grantor's own cost and expense
satisfactory and complete records of the Grantor's Collateral in a manner
consistent with the Grantor's current business practice, including, without
limitation, a record of all payments received and all credits granted with
respect to such Collateral. The Grantor shall, for the Agent's further security,
deliver and turn over to the Agent or the Agent's designated representatives at
any time following the occurrence and during the continuation of an Event of
Default, any such books and records (including, without limitation, any and all
computer tapes, programs and source and
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object codes relating to such Collateral in which the Grantor has an interest or
any part or parts thereof); and
(b) The Grantor will not create, permit or suffer to exist, and will
defend the Collateral against, and take such other action as is necessary to
remove, any Lien on such Collateral other than Liens permitted as of the date
hereof under the Credit Agreements and the Note Agreements, and will defend the
right, title and interest of the Agent in and to the Grantor's rights to such
Collateral, including, without limitation, the proceeds and products thereof,
against the claims and demands of all Persons whatsoever.
SECTION 14. The Agent Appointed Attorney-in-Fact. The Grantor hereby
irrevocably appoints the Agent as the Grantor's attorney-in-fact, with full
authority in the place and stead of the Grantor and in the name of the Grantor
or otherwise, following the occurrence and during the continuation of an Event
of Default, in the Agent's discretion, to take any action and to execute any
instrument which the Agent may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation, to:
(i) obtain and adjust insurance required to be paid to the
Agent or any Holders of Guaranteed Obligations pursuant to the Credit
Agreements and the Note Agreements;
(ii) ask, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
(iii) receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (i)
or (ii) above; and
(iv) file any claims or take any action or institute any
proceedings which the Agent may deem necessary or desirable for the
collection of any of the Collateral, or otherwise to enforce the rights
of the Agent with respect to any of the Collateral;
In addition, the Agent may at any time:
(i) obtain access to records maintained for the Grantor by
computer services companies and other service companies or bureaus;
(ii) send requests under the Grantor's, the Agent's or a
fictitious name to the Grantor's customers or account debtors for
verification of Accounts provided that the Agent gives the Grantor
notice prior to initiating any such verifications; and
(iii) do all other things reasonably necessary to carry out
this Agreement.
SECTION 15. The Agent May Perform. If the Grantor fails to perform any
agreement contained herein, in the Guarantees, in the Credit Agreements or in
the Note Agreements, the Agent may, upon three days' prior notice to the
Grantor, perform, or cause
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performance of, such agreement, and the expenses of the Agent incurred in
connection therewith shall be payable by the Grantor under Section 22.
SECTION 16. The Agent's Duties. The powers conferred on the Agent
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the safe custody
of any Collateral in its possession and the accounting for moneys actually
received by it hereunder, the Agent shall not have any duty as to any
Collateral. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession if the Collateral
is accorded treatment substantially equal to that which the Agent accords its
own property, it being understood that the Agent shall be under no obligation to
take any necessary steps to preserve rights against prior parties or any other
rights pertaining to any Collateral, but may do so at its option, and all
reasonable expenses incurred in connection therewith shall be for the sole
account of the Grantor and shall be added to the Guaranteed Obligations.
SECTION 17. Remedies. (a) If any Event of Default shall have occurred
and be continuing:
(i) The Agent shall have, in addition to other rights and
remedies provided for herein or otherwise available to it, all the
rights and remedies of a secured party upon default under the UCC
(whether or not the UCC applies to the affected Collateral) and
further, the Agent may, without notice, demand or legal process of any
kind (except as may be required by law), all of which the Grantor
waives, at any time or times, (x) enter the Grantor's owned or leased
premises where Collateral is located and take physical possession of
the Collateral and maintain such possession on the Grantor's owned or
leased premises, at no cost to the Agent or any of the Holders of
Guaranteed Obligations, or remove the Collateral, or any part thereof,
to such other place(s) as the Agent may desire, (y) require the Grantor
to, and the Grantor hereby agrees that it will at its expense and upon
request of the Agent forthwith, assemble all or any part of the
Collateral as directed by the Agent and make it available to the Agent
at a place to be designated by the Agent which is reasonably convenient
to the Agent and (z) without notice except as specified below, sell,
lease, assign, grant an option or options to purchase or otherwise
dispose of the Collateral or any part thereof at public or private
sale, at any exchange, broker's board or at any of the offices of the
Agent or elsewhere, for cash, on credit or for future delivery, and
upon such other terms as the Agent may deem commercially reasonable.
The Grantor agrees that, to the extent notice of sale shall be required
by law, at least ten (10) days' notice to the Grantor of the time and
place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Agent shall not
be obligated to make any sale of Collateral regardless of notice of
sale having been given. The Agent may adjourn any public or private
sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned;
(ii) The Agent shall apply all cash proceeds received by the
Agent in respect of any sale of, collection from, or other realization
upon all or any part of the Collateral (after payment of any amounts
payable to the Agent pursuant to Section 22), for the benefit of the
Holders of Guaranteed Obligations, against all or any part of the
Guaranteed Obligations in such order as may be required by the
Collateral Sharing Agreement, or, to the extent not specified therein,
as is determined by the Holders of Guaranteed Obligations, and, with
respect to the application of such proceeds subsequent to the
satisfaction of the conditions set forth in the Collateral Sharing
Agreement or as agreed to by the Holders of
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Guaranteed Obligations, as applicable, in such order as may be required
under each Guarantee with respect to amounts remitted to the entity in
whose favor such Guarantee runs. Any surplus of such cash or cash
proceeds held by the Agent and remaining after payment in full of all
the Guaranteed Obligations shall be paid over to the Grantor or to
whomsoever may be lawfully entitled to receive such surplus;
(b) The Grantor waives all claims, damages and demands against the
Agent arising out of the repossession, retention or sale of any of the
Collateral or any part or parts thereof, except any such claims, damages and
awards arising out of the gross negligence or willful misconduct of the Agent or
any of the Holders of Guaranteed Obligations, as the case may be, as determined
in a final non-appealed judgment of a court of competent jurisdiction; and
(c) The rights and remedies provided under this Agreement are
cumulative and may be exercised singly or concurrently and are not exclusive of
any rights and remedies provided by law or equity.
SECTION 18. Exercise of Remedies. In connection with the exercise of
its remedies pursuant to Section 17, the Agent may, (i) exchange, enforce, waive
or release any portion of the Collateral and any other security for the
Guaranteed Obligations; (ii) apply such Collateral or security and direct the
order or manner of sale thereof as the Agent may, from time to time, determine;
and (iii) settle, compromise, collect or otherwise liquidate any such Collateral
or security in any manner following the occurrence and during the continuation
of an Event of Default, without affecting or impairing the Agent's right to take
any other further action with respect to any Collateral or security or any part
thereof.
SECTION 19. License. The Agent is hereby granted a license or other
right to use, following the occurrence and during the continuance of an Event of
Default, without charge, (a) the Grantor's labels, patents, copyrights, trade
secrets, trade names, trademarks, service marks, customer lists and advertising
matter, or any property of a similar nature, as it pertains to the Collateral,
in completing production of, advertising for sale, and selling any Collateral,
provided that the Agent uses quality standards at least substantially equivalent
to those of the Grantor for the manufacture, advertising, sale and distribution
of the Grantor's products and services and (b) the Grantor's rights under all
licenses.
SECTION 20. Injunctive Relief. The Grantor recognizes that in the event
the Grantor fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, any remedy of law may prove to be inadequate
relief to the Holders of Guaranteed Obligations; therefore, the Grantor agrees
that the Agent shall be entitled to temporary and permanent injunctive relief in
any such case without the necessity of proving actual damages.
SECTION 21. Interpretation and Inconsistencies; Merger. (a) The rights
and duties created by this Agreement shall, in all cases, be interpreted
consistently with, and shall be in addition to (and not in lieu of), the rights
and duties created by the Guarantees, the Collateral Sharing Agreement, and the
other Loan Documents. In the event that any provision of this Agreement shall be
inconsistent with any provision of any other Loan Document, such provision of
the other Loan Document shall govern.
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(b) Except as provided in subsection (a) above, this Agreement
represents the final and entire agreement of the Grantor and the Agent with
respect to the matters contained herein.
SECTION 22. Expenses. The Grantor will upon demand pay to the Agent the
amount of any and all reasonable expenses, including the reasonable fees and
disbursements of its counsel and of any experts and agents, as provided in the
Credit Agreements, the Note Agreements, and/or the Collateral Sharing Agreement.
SECTION 23. Amendments, Etc. No amendment or waiver of any provision of
this Agreement nor consent to any departure by the Grantor herefrom shall in any
event be effective unless the same shall be in writing and signed by the Agent
(in accordance with the Collateral Sharing Agreement) and the Grantor, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
SECTION 24. Notices. All notices and other communications provided for
hereunder shall be delivered in the manner set forth in Section 8.2 of each of
the Credit Agreements.
SECTION 25. Continuing Security Interest; Termination. (a) Except as
provided in Section 25(b), this Agreement shall create a continuing security
interest in the Collateral and shall (i) remain in full force and effect until
the later of the payment or satisfaction in full of the Guaranteed Obligations
(other than contingent indemnity obligations) and the termination of each of the
Guarantees, (ii) be binding upon the Grantor, its successors and assigns and
(iii) except to the extent that the rights of any transferor or assignor are
limited by the terms of each of the Guarantees, inure, together with the rights
and remedies of the Agent hereunder, to the benefit of the Agent and any of the
Holders of Guaranteed Obligations. Nothing set forth herein or in any other Loan
Document is intended or shall be construed to give any other Person any right,
remedy or claim under, to or in respect of this Agreement or any other Loan
Document or any Collateral. The Grantor's successors and assigns shall include,
without limitation, a receiver, trustee or debtor-in-possession thereof or
therefor.
(b) The security interest granted hereby shall terminate and all rights
to the Collateral shall revert to the Grantor on the earlier of the date on
which (i) the Agent shall have received from each Holder of Guaranteed
Obligations written notice that all "Obligations" (as defined in the Collateral
Sharing Agreement) owing to such Holder of Guaranteed Obligations have been paid
in full or (ii) the Agent shall have received written notice from the Holders of
Guaranteed Obligations directing the Agent to release the Collateral and stating
that the Holders of Guaranteed Obligations have consented to such release under
the terms of the Credit Agreements, the Note Agreements and the Guarantees
provided, that no such termination shall occur prior to the payment in full of
all of the Agent's "Expenses" (as defined in the Collateral Sharing Agreement).
Upon the termination of the security interest, the Grantor shall be entitled to
the prompt return, upon its request and at its expense, of such of the
Collateral held by the Agent as shall not have been sold or otherwise applied
pursuant to the terms hereof and the Agent will, at the Grantor's expense,
promptly execute and deliver to the Grantor such other documents as the Grantor
shall reasonably request to evidence such termination. In connection with any
sales of assets permitted under the Credit Agreements and the Note Agreements,
the
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Agent will promptly release and terminate the liens and security interests
granted under this Agreement with respect to such assets.
SECTION 26. Severability. Any provision in this Agreement that is held
to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to
that jurisdiction, be inoperative, unenforceable, or invalid without affecting
the remaining provisions in that jurisdiction or the operation, enforceability,
or validity of that provision in any other jurisdiction, and to this end the
provisions of this Agreement are declared to be severable.
SECTION 27. GOVERNING LAW. ANY DISPUTE BETWEEN THE GRANTOR AND THE
AGENT ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT, AND
WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN
ACCORDANCE WITH THE LAWS (INCLUDING 735 ILCS SECTION 105/5-1 ET SEQ. BUT
OTHERWISE WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES) OF THE STATE OF
ILLINOIS.
SECTION 28. CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.
(A) NON-EXCLUSIVE JURISDICTION. EACH OF THE PARTIES HERETO AGREES THAT
ALL DISPUTES BETWEEN THEM ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS
AGREEMENT WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, MAY BE
RESOLVED NON-EXCLUSIVELY BY STATE OR FEDERAL COURTS LOCATED IN CHICAGO,
ILLINOIS, BUT THE PARTIES HERETO ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS
MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF CHICAGO, ILLINOIS. EACH OF
THE PARTIES HERETO WAIVES IN ALL DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION
(A) ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE
DISPUTE.
(B) VENUE. THE GRANTOR IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH
IN ANY JURISDICTION SET FORTH IN PARAGRAPH (A) ABOVE.
(C) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH. EACH OF THE PARTIES
14
<PAGE>
HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO
MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.
15
<PAGE>
IN WITNESS WHEREOF, the Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
LOR*AL PRODUCTS, INC.
By: /s/ John Retherford
-------------------------------------
Name: John Retherford
Title: CFO
Address: 5720 Smetana Drive
Minnetonka, MN 55343
Facsimile No.: (612) 939-4405
BANK ONE, NA, having its principal office
in Chicago, Illinois, formerly known as
The First National Bank of Chicago, as
Agent
By: /s/ Kevin Gillen
-------------------------------------
Name: Kevin Gillen
Title: Vice President
Guarantor Security Agreement Signature Page
<PAGE>
EXHIBIT A-1
to
Guarantor Security Agreement
Form of Landlord Agreement
Bank One, NA
1 Bank One Plaza
Chicago, IL 60670
Attention: Jenny Gilpin
Ladies and Gentlemen:
Lor*Al Products, Inc., ("Grantor"), the lessee under that certain lease
dated ____________________ between the Grantor, and the undersigned, covering
certain premises owned by the undersigned and located at _________________ (the
"Premises") more fully described in the lease attached hereto as Exhibit A (the
"Lease"). Grantor has certain of its assets located on the Premises.
Grantor has entered into certain financing arrangements with a group of
lenders ("Lenders") including Bank One, NA, as contractual representative for
the Lenders (the "Agent") and the Agent and the Lenders require, among other
things, that Grantor grant liens in favor of the Agent for the benefit of itself
and the Lenders on all of Grantor's property located on the Premises
("Collateral").
To induce the Agent and the Lenders (together with their respective
agents, successors and assigns) to continue said financing arrangements, and for
other good and valuable consideration, the undersigned hereby agrees that:
(i) it will not assert against any of Grantor's assets any
statutory or possessory liens, including, without limitation, rights of
levy or distraint for rent, all of which it hereby waives;
(ii) none of the Collateral located on the Premises shall be
deemed to be fixtures;
(iii) if Grantor defaults on its obligations to the Agent or
any Lender and, as a result, the Agent undertakes to enforce its
security interest in the Collateral, the undersigned will cooperate
with the Agent in its efforts to assemble all of the Collateral located
on the Premises, will permit the Agent to remain on the Premises for
ninety (90) days after the Agent gives the undersigned notice of
default, provided the Agent pays the rental payments due under the
Lease for the period of time the Agent uses the Premises, or, at the
Agent's option, to remove the Collateral from the Premises within a
reasonable time, not to exceed ninety (90) days after the Agent gives
the undersigned notice of default, provided the Agent pays the rental
payments due under the Lease for the period
<PAGE>
of time the Agent uses the Premises, and will not hinder the Agent's
actions in enforcing its liens on the Collateral;
[it will allow the Agent thirty (30) days from the Agent's
receipt of notice in which to cure or cause Grantor to cure any
defaults on Grantor's lease obligations to the undersigned; provided if
such default cannot reasonably be cured within the thirty (30) day
period, and provided the Agent is diligently pursuing a cure, then the
Agent shall have a reasonable period to cure such default;]
[(iv) if, for any reason whatsoever, the undersigned either
deems itself entitled to redeem or to take possession of the Premises
during the term of Grantor's lease or intends to sell or otherwise
transfer all or any part of its interest in the Premises, the
undersigned will notify the Agent five (5) days before taking such
action;]
[(v) the undersigned shall accept performance by the Agent of
the Grantor's obligations under the Lease as though the same had been
performed by the holder of the Grantor's interest therein at the time
of such performance. Upon the cure of any such default, any notice
advising of any default or any action of the undersigned to terminate
the Lease or to interfere with the occupancy, use or enjoyment of the
Premises by reason thereof, which action has not been completed, shall
be deemed rescinded and the Lease shall continue in full force and
effect. The undersigned shall not be required to continue any
possession or continue any action to obtain possession upon the cure of
any such default;]
Any notice(s) required or desired to be given hereunder shall be
directed to the party to be notified at the address stated herein.
The agreements contained herein shall continue in force until all of
Grantor's obligations and liabilities to the Agent and the Lenders are paid and
satisfied in full and all financing arrangements among the Agent, the Lenders
and Grantor have been terminated.
The undersigned will use reasonable efforts to notify all successor
owners, transferees, purchasers and mortgagees of the existence of this waiver.
The agreements contained herein may not be modified or terminated orally and
shall be binding upon the successors, assigns and personal representatives of
the undersigned, upon any successor owner or transferee of the Premises, and
upon any purchasers, including any mortgagee, from the undersigned.
The undersigned agrees that nothing contained in this waiver shall be
construed as an assumption by the Agent or any of the other lenders of any
obligations of Grantor contained in the Lease.
Executed and delivered this ____ day of ___________, at ______________.
THIS WAIVER SHALL NOT IMPAIR OR OTHERWISE AFFECT GRANTOR'S
OBLIGATIONS TO PAY RENT AND ANY OTHER SUMS
2
<PAGE>
PAYABLE BY GRANTOR OR TO OTHERWISE PERFORM ITS OBLIGATIONS TO
THE LESSOR PURSUANT TO THE TERMS OF THE LEASE.
[Name of Lessor]
By:
-------------------------------------
Title:
----------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
AGREED & ACKNOWLEDGED:
[ ]
------------------------------
By:
-------------------------------------
Title:
----------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
3
<PAGE>
EXHIBIT A
to
Landlord Agreement
Lease
(attached hereto)
<PAGE>
EXHIBIT B
to
Landlord Agreement
Leasehold Mortgage
(attached hereto)
<PAGE>
[ACKNOWLEDGMENT (CORPORATE)
STATE OF )
------------------------
)SS
COUNTY OF )
-----------------------
Before me, a Notary Public in and for said County, personally appeared
_____________, a _________________________ corporation, by the _________________
of such corporation, who acknowledged that (s)he did sign the foregoing
instrument on behalf of said corporation and that said instrument is the
voluntary act and deed of said corporation and his/her voluntary act and deed as
such officer of said corporation.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name and affixed my
official seal this ____ day of ____________, at _____________, ________________.
-----------------------------------------
Notary Public
My Commission Expires:]
(Notarial Seal)
<PAGE>
[ACKNOWLEDGMENT (CORPORATE)
STATE OF )
------------------------
)SS
COUNTY OF )
-----------------------
Before me, a Notary Public in and for said County, personally appeared
_____________, a ______________ corporation, by the ______________________ of
such corporation, who acknowledged that (s)he did sign the foregoing instrument
on behalf of said corporation and that said instrument is the voluntary act and
deed of said corporation and his/her voluntary act and deed as such officer of
said corporation.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name and affixed my
official seal this ____day of ___________, at _______________, ________________.
-----------------------------------------
Notary Public
My Commission Expires:]
(Notarial Seal)
<PAGE>
EXHIBIT A-2
to
Guarantor Security Agreement
Form of Mortgagee Agreement
Bank One, NA
1 Bank One Plaza
Chicago, IL 60670
Attention: Jenny Gilpin
Ladies and Gentlemen:
Lor*Al Products, Inc. ("Grantor"), is the lessee under that certain
lease dated ____________________ between the Grantor, and ____________________
(the "Landlord[s]"), covering certain premises located at _________________ (the
"Premises") as more fully described on Exhibit A(1) attached hereto (the
"Lease"). The undersigned is the mortgagee under a mortgage between the
Landlord[s] and the undersigned covering the Premises (the "Mortgage"). The
undersigned is the sole mortgagee of the Premises. Grantor has certain of its
assets located on the Premises.
Grantor has entered into certain financing arrangements with a group of
lenders ("Lenders") including Bank One, NA, as contractual representative for
the Lenders (the "Agent") and the Agent and the Lenders require, among other
things, that Grantor grant liens in favor of the Agent for the benefit of itself
and the Lenders on all of Grantor's property located on the Premises
("Collateral").
By its signature below, the undersigned agrees that:
(i) it will not assert against any of the Collateral any
statutory or possessory liens, including, without limitation, rights of
levy or distraint for rent, all of which it hereby waives;
(ii) none of the Collateral located on the Premises shall be
deemed to be fixtures;
[(iii) it will allow the Agent thirty (30) days from the
Agent's receipt of notice in which to cure or cause Grantor to cure any
such defaults on its mortgage obligations; provided if such default
cannot reasonably be cured within the thirty
- -------------------------
(1) Please attach legal description of premises for recordation purposes.
<PAGE>
(30) day period, and provided the Agent is diligently pursuing a cure,
then the Agent shall have a reasonable period to cure such default;]
[(iv) if, for any reason whatsoever, the undersigned either
deems itself entitled to take possession of the Premises during the
term of the Mortgage or intends to sell or otherwise transfer all or
any part of its interest in the Premises, the undersigned will notify
the Agent five (5) days before taking such action;]
(v) if Grantor defaults on its obligations to the Agent or any
Lender and, as a result, the Agent undertakes to enforce its security
interest in the Collateral, the undersigned will cooperate with the
Agent in its efforts to assemble all of the Collateral located on the
Premises, will permit the Agent to remain on the Premises for ninety
(90) days after the Agent gives the undersigned notice of default,
provided the Agent pays the Lease payments to the Landlord[s] due under
the Lease for the period of time the Agent uses the Premises, or, at
the Agent's option, to remove the Collateral from the Premises within a
reasonable time, not to exceed ninety (90) days after the Agent gives
the undersigned notice of default, provided the Agent pays the rental
payments to the Landlord[s] due under the Lease for the period of time
the Agent uses the Premises, and will not hinder the Agent's actions in
enforcing its liens on the Collateral; and
Any notice(s) required or desired to be given hereunder shall be
directed to the party to be notified at the address stated herein.
The agreements contained herein shall continue in force until all of
Grantor's obligations and liabilities to the Agent and the Lenders are paid and
satisfied in full and all financing arrangements among the Agent, the Lenders
and Grantor have been terminated.
The undersigned will notify all successor owners, transferees,
purchasers and mortgagees of the existence of this waiver. The agreements
contained herein may not be modified or terminated orally and shall be binding
upon the successors, assigns and personal representatives of the undersigned,
upon any successor owner or transferee of the Premises, and upon any purchasers,
including any mortgagee, from the undersigned.
[The undersigned consents to the granting of the Leasehold Mortgage to
the Agent and to the liens, security interests and encumbrances created by and
resulting from the Leasehold Mortgage or other documents collateral thereto in
the form attached hereto as Exhibit B.]
The undersigned agrees that nothing contained in this waiver shall be
construed as an assumption by the agent or any of the other lenders of any
obligations of the landlord contained in the mortgage.
Executed and delivered this ____ day of __________, at _______________.
THIS WAIVER SHALL NOT IMPAIR OR OTHERWISE AFFECT GRANTOR'S
OBLIGATIONS TO PAY RENT AND ANY OTHER SUMS
2
<PAGE>
PAYABLE BY GRANTOR OR TO OTHERWISE PERFORM ITS OBLIGATIONS TO
THE LANDLORD PURSUANT TO THE TERMS OF THE LEASE.
[Name of Mortgagee]
By:
-------------------------------------
Title:
----------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
AGREED & ACKNOWLEDGED:
[ ]
------------------------------
By:
-------------------------------------
Title:
----------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
3
<PAGE>
EXHIBIT A
to
Landlord Agreement
Lease
(attached hereto)
<PAGE>
EXHIBIT B
to
Landlord Agreement
Leasehold Mortgage
(attached hereto)
<PAGE>
STATE OF )
------------------------
)SS
COUNTY OF )
-----------------------
The foregoing letter agreement was acknowledged before me this ___ day
of _____________, by _____________________, a ______________ of _____________, a
____________, on behalf of such _____________________.
-----------------------------------------
Notary Public
________ County, _____________
My commission expires:_______]
<PAGE>
EXHIBIT B
to
Guarantor Security Agreement
Form of Bailee Letter
To: Bank One, NA
1 Bank One Plaza
Chicago, IL 60670
Attention: Jenny Gilpin
Ladies and Gentlemen:
Lor*Al Products, Inc. ("Grantor"), now does or hereafter may store
certain of its merchandise, inventory, or other of its personal property at
premises located at _______________ (the "Premises") owned or leased by the
undersigned.
Grantor has entered into certain financing arrangements with a group of
lenders (the "Lenders") including Bank One, NA (the "Agent") and, as a condition
to continuing the loans and other financial accommodations of the Lenders to
Grantor, the Agent and the Lenders require, among other things, that Grantor
grant liens in favor of the Agent for the benefit of the Agent and the Lenders
on all of Grantor's property located on the Premises ("Collateral").
To induce the Agent and the Lenders (together with their respective
agents, successors and assigns) to continue said financing arrangements, and for
other good and valuable consideration, the undersigned hereby agrees that:
(i) it will not assert against any of Grantor's assets any
statutory or possessory liens, including, without limitation, rights of
levy or distraint for rent, all of which it hereby waives;
(ii) the Collateral shall be identifiable as being owned by
Grantor and kept reasonably separate and distinct from other property
in the possession of the undersigned;
(iii) none of the Collateral located on the Premises shall be
deemed to be fixtures; and
(iv) if Grantor defaults on its obligations to the Lenders or
the Agent and, as a result, the Agent undertakes to enforce its
security interest in the Collateral, the undersigned (a) will cooperate
with the Agent in its efforts to assemble all of the Collateral located
on the Premises, (b) will permit the Agent to either remain on the
Premises for ninety (90) days after the Agent gives the undersigned
notice of default or, at the Agent's option, to remove the Collateral
from the Premises within a reasonable time, not to exceed ninety
<PAGE>
(90) days after the Agent gives the undersigned notice of default,
provided in either instance that the Agent leaves the Premises in the
same condition as existed immediately prior to such ninety (90) day
period, and the Agent shall indemnify the undersigned for any damages
arising solely out of its occupancy of the Premises, and (c) will not
hinder the Agent's actions in enforcing its liens on the Collateral.
Any notice(s) required or desired to be given hereunder shall be
directed to the party to be notified at the address stated herein.
The agreements contained herein shall continue in force until all of
Grantor's obligations and liabilities to the Agent and Lenders are paid and
satisfied in full and all financing arrangements among the Agent, the Lenders
and Grantor have been terminated.
The undersigned will notify all successor owners, transferees,
purchasers and mortgagees of the existence of this agreement. The agreements
contained herein may not be modified or terminated orally and shall be binding
upon the successors, assigns and personal representatives of the undersigned,
upon any successor owner or transferee of any of the Premises, and upon any
purchasers, including any mortgagee, from the undersigned.
Executed and delivered this ____ day of ____________, at _____________.
[Name and Address of Bailee]
(By)
-------------------------------------
2
<PAGE>
SCHEDULE 1
to
Guarantor Security Agreement
Locations of Collateral
Attached
<PAGE>
SCHEDULE 1-A
to
Guarantor Security Agreement
Third Party Locations:
<PAGE>
SCHEDULE 1-B
to
Guarantor Security Agreement
Financing Statement Filing Locations:
<PAGE>
SCHEDULE 2
to
Guarantor Security Agreement
Trade Names:
<PAGE>
SCHEDULE 3
to
Guarantor Security Agreement
Pledged Debt:
EXHIBIT 10.24
GUARANTOR SECURITY AGREEMENT
DATED AS OF MAY 15, 2000
between
AG-CHEM MANUFACTURING CO., INC.
AND
BANK ONE, NA
AS AGENT
<PAGE>
TABLE OF CONTENTS
PAGE
----
SECTION 1. Defined Terms.......................................................1
SECTION 2. Grant of Security...................................................2
SECTION 3. [RESERVED]..........................................................5
SECTION 4. Grantor Remains Liable..............................................5
SECTION 5. Representations and Warranties......................................5
SECTION 6. Perfection and Maintenance of Security Interests and Liens..........6
SECTION 7. Financing Statements................................................7
SECTION 8. Filing Costs........................................................7
SECTION 9. Schedule of Collateral..............................................7
SECTION 10. Equipment and Inventory............................................8
SECTION 11. Accounts...........................................................8
SECTION 12. Leased Real Property...............................................9
SECTION 13. General Covenants..................................................9
SECTION 14. The Agent Appointed Attorney-in-Fact..............................10
SECTION 15. The Agent May Perform.............................................10
SECTION 16. The Agent's Duties................................................11
SECTION 17. Remedies..........................................................11
SECTION 18. Exercise of Remedies..............................................12
SECTION 19. License...........................................................12
SECTION 20. Injunctive Relief.................................................12
SECTION 21. Interpretation and Inconsistencies; Merger........................12
SECTION 22. Expenses..........................................................13
SECTION 23. Amendments, Etc...................................................13
SECTION 24. Notices...........................................................13
SECTION 25. Continuing Security Interest; Termination.........................13
SECTION 26. Severability......................................................14
SECTION 27. GOVERNING LAW.....................................................14
SECTION 28. CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL...........14
(A) NON-EXCLUSIVE JURISDICTION...........................................14
(B) VENUE................................................................14
(C) WAIVER OF JURY TRIAL.................................................14
i
<PAGE>
EXHIBITS
- --------
Exhibit A-1 Form of Landlord Agreement
Exhibit A-2 Form of Mortgagee Agreement
Exhibit B Form of Bailee Letter
SCHEDULES
- ---------
Schedule 1 Locations of Collateral
Schedule 1-A Third Party Locations
Schedule 1-B Financing Statement Filing Locations
Schedule 2 Trade Names
Schedule 3 Pledged Debt
ii
<PAGE>
GUARANTOR SECURITY AGREEMENT
This GUARANTOR SECURITY AGREEMENT (the "Agreement"), dated as of May
15, 2000 is made by AG-CHEM MANUFACTURING CO., INC. (the "Grantor"), in favor of
BANK ONE, NA, having its principal office in Chicago, Illinois, formerly known
as The First National Bank of Chicago (the "Agent"), for its benefit and for the
benefit of the "Holders of Guaranteed Obligations" (as defined below) who are,
or may hereafter become, parties to either of the Credit Agreements or Note
Agreements referred to below.
PRELIMINARY STATEMENT
The Grantor entered into a Guaranty (Short Term) dated as of June 4,
1999, as reaffirmed on the date hereof (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the "Short Term Guaranty")
between the Grantor and the Agent. The Grantor also entered into a Guaranty
(Long Term) dated as of January 12, 1996, as reaffirmed on the date hereof (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the "Long Term Guaranty," and taken together with the Short Term
Guaranty, the "Bank Guarantees"), between the Grantor and the Agent.
The Grantor also guaranteed (such guarantees, the "Noteholder
Guarantees" and together with the Bank Guarantees, the "Guarantees") obligations
outstanding under a (i) a Note Agreement, dated as of April 6, 1994, with C.M.
Life Insurance Company and (ii) a Note Agreement, dated as of October 10, 1995,
with The Prudential Insurance Company of America (such agreements, the "Note
Agreements").
The Grantor, in order to secure its obligations under the Guarantees,
has agreed to grant to the Agent on behalf of the Holders of Guaranteed
Obligations the security interest contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Defined Terms. Unless otherwise defined herein, terms
defined in the Credit Agreements are used herein as therein defined, and the
following terms shall have the following meanings (such meanings being equally
applicable to both the singular and the plural forms of the terms defined):
"Agreement" shall mean this Guarantor Security Agreement, as the same
may from time to time be amended, restated, modified or supplemented, and shall
refer to this Agreement as the same may be in effect at the time such reference
becomes operative.
"Collateral" shall mean all property and rights in property now owned
or hereafter at any time acquired by the Grantor in or upon which a Lien is
granted in favor of the Agent by
<PAGE>
the Grantor under this Agreement, including, without limitation, the property
described in Section 2.
"Collateral Sharing Agreement" shall mean the Collateral Sharing
Agreement, dated as of the date hereof, as the same may be amended, restated,
supplemented or otherwise modified from time to time, among the Holders of
Guaranteed Obligations and the Agent, as acknowledged by the Grantor and certain
of its affiliates.
"Credit Agreements" shall mean (i) the Third Amended and Restated Long
Term Revolving Credit Agreement, dated as of June 4, 1999, among the Grantor,
the institutions from time to time party thereto as lenders, the Agent, as
contractual representative for such lenders, Ag-Chem Equipment Canada Ltd. and
Ag-Chem Europe B.V., as the same may be amended, restated, supplemented or
otherwise modified from time to time and (ii) the Short Term Revolving Credit
Agreement, dated as of June 4, 1999, among the Grantor, the institutions from
time to time party thereto as lenders, and the Agent, as contractual
representative for such lenders, as the same may be amended, restated,
supplemented or otherwise modified from time to time.
"Event of Default" shall mean an "Event of Default" as defined in the
Credit Agreements and the comparable term as it is set forth in the Note
Agreements.
"Guaranteed Obligations" shall mean the aggregate obligations of the
Grantor owing under the Guarantees, including, without limitation, Grantor's
guaranty to promptly and fully satisfy when due Indebtedness under the Credit
Agreements and obligations outstanding under the Note Agreements.
"Holders of Guaranteed Obligations" shall mean the holders of the
Guaranteed Obligations from time to time and shall include their respective
successors, transferees and assigns.
"Lien" shall mean any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or security
agreement of any kind or nature whatsoever (including, without limitation, the
interest of a vendor or lessor under any conditional sale, Capital Lease, or
other title retention agreement).
"Pledged Debt" shall have the meaning set forth in Section 2 of this
Agreement.
"UCC" shall mean the Uniform Commercial Code as the same may, from time
to time, be in effect in the State of Illinois; provided, however, in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of the Agent's and the Holders of Guaranteed Obligations'
security interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of Illinois, the term "UCC"
shall mean the Uniform Commercial Code as in effect in such other jurisdiction
for purposes of the provisions hereof relating to such attachment, perfection or
priority and for purposes of definitions related to such provisions.
SECTION 2. Grant of Security. To secure the prompt and complete
payment, observance and performance of the Guaranteed Obligations, the Grantor
hereby assigns and
2
<PAGE>
pledges to the Agent, for the benefit of itself and the Holders of Guaranteed
Obligations, and hereby grants to the Agent, for the benefit of itself and the
Holders of Guaranteed Obligations, a security interest in all of the Grantor's
right, title and interest in and to the following, whether now owned or existing
or hereafter arising or acquired and wheresoever located:
ACCOUNTS: All "accounts" as such term is defined in Section 9-106 of
the UCC, whether now owned or hereafter acquired or arising; the Grantor intends
that the term "accounts", as used herein, be construed in its broadest sense,
and such term shall include, without limitation, all present and future
accounts, accounts receivable and other rights of the Grantor to payment for
goods sold or leased or for services rendered (except those evidenced by
instruments or chattel paper), whether now existing or hereafter arising and
wherever arising, and whether or not they have been earned by performance
(collectively, "Accounts");
INVENTORY: All "inventory" as defined in Section 9-109(4) of the UCC,
whether now owned or hereafter acquired or arising; the Grantor intends that the
term "inventory", as used herein, be construed in its broadest sense, and such
term shall include, without limitation, all goods now owned or hereafter
acquired by the Grantor (wherever located, whether in the possession of the
Grantor or of a bailee or other person for sale, storage, transit, processing,
use or otherwise and whether consisting of whole goods, spare parts, components,
supplies, materials, or consigned, returned or repossessed goods) which are held
for sale or lease, which are to be furnished (or have been furnished) under any
contract of service or which are raw materials, work in process or materials
used or consumed in the Grantor's business (collectively, "Inventory");
EQUIPMENT: All "equipment" as such term is defined in Section 9-109(2)
of the UCC, whether now owned or hereafter acquired or arising; the Grantor
intends that the term "equipment", as used herein, be construed in its broadest
sense, and such term shall include, without limitation, all machinery, all
manufacturing, distribution, selling, data processing and office equipment, all
furniture, furnishings, appliances, tools, tooling, molds, dies, and all other
goods of every type and description (other than Inventory), in each instance
whether now owned or hereafter acquired by the Grantor and wherever located
(collectively, "Equipment"), but in no case shall include fixtures located on
real property subject to "Permitted Liens" (as defined in the Credit
Agreements);
GENERAL INTANGIBLES: All "general intangibles" as defined in Section
9-106 of the UCC, whether now owned or hereafter acquired or arising; the
Grantor intends that the term "general intangibles", as used herein, be
construed in its broadest sense, and such term shall include, without
limitation, all rights, interests, choses in action, causes of actions, claims
and all other intangible property of the Grantor of every kind and nature (other
than Accounts), in each instance whether now owned or hereafter acquired by the
Grantor and however and whenever arising, including, without limitation, all
corporate and other business records; all loans, royalties, and other
obligations receivable; customer lists, credit files, correspondence, and
advertising materials; firm sale orders, other contracts and contract rights;
all interests in partnerships and joint ventures; all tax refunds and tax refund
claims; all right, title and interest under leases, subleases, licenses and
concessions and other agreements relating to real or personal property; all
payments due or made to the Grantor in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of any property by any person
or governmental
3
<PAGE>
authority; all deposit accounts (general or special) with any bank or other
financial institution, including, without limitation, any deposits or other sums
at any time credited by or due to the Grantor from any of the Holders of
Guaranteed Obligations or any of their respective Affiliates with the same
rights therein as if the deposits or other sums were credited by or due from
such Holder of Guaranteed Obligations; all credits with and other claims against
carriers and shippers; all rights to indemnification; all patents, and patent
applications (including all reissues, divisions, continuations and extensions);
all service marks and service mark applications; all trade secrets and
inventions; all copyrights and copyright applications (including all computer
software and related documentation); all rights and interests in and to
trademarks, trademark registrations and applications therefor, trade names,
corporate names, brand names, slogans, all goodwill associated with the
foregoing; all license agreements and franchise agreements, all reversionary
interests in pension and profit sharing plans and reversionary, beneficial and
residual interest in trusts; all proceeds of insurance of which the Grantor is
beneficiary; and all letters of credit, guaranties, liens, security interests
and other security held by or granted to the Grantor; and all other intangible
property, whether or not similar to the foregoing;
LAB PROCESSING AND ENGINEERING INFORMATION: All rights and interests in
and to processes, lab journals, and notebooks, data, trade secrets, know-how,
product formulae and information, manufacturing, engineering and other drawings
and manuals, technology, blueprints, research and development reports, agency
agreements, technical information, technical assistance, engineering data,
design and engineering specifications, and similar materials recording or
evidencing expertise used in or employed by the Grantor (including any license
for the foregoing);
CONTRACT RIGHTS: All rights and interests in and to any pending or
executory contracts, requests for quotations, invitations for bid, agreements,
leases and arrangements of which the Grantor is a party to or in which the
Grantor has an interest;
CHATTEL PAPER, INSTRUMENTS AND DOCUMENTS: All chattel paper, leases,
all instruments, including, without limitation, the notes and debt instruments
described in SCHEDULE 3 (the "Pledged Debt") and all payments thereunder and
instruments and other property from time to time delivered in respect thereof or
in exchange therefor, and all bills of sale, bills of lading, warehouse receipts
and other documents of title, in each instance whether now owned or hereafter
acquired by the Grantor;
INTEREST AND CURRENCY CONTRACTS: Any and all interest rate or currency
exchange agreements or derivative agreements, including without limitation, cap,
collar, floor, forward or similar agreements or other rate protection
arrangements;
INVESTMENT PROPERTY: Any and all investment property (as defined in
Section 9-115(1)(f) of the UCC) of the Grantor, including any instruments,
certificates of deposit, equity interests or investments of any kind; and
OTHER PROPERTY: All property or interests in property now owned or
hereafter acquired by the Grantor which now may be owned or hereafter may come
into the possession, custody or control of the Agent or any of the Holders of
Guaranteed Obligations or any agent or Affiliate of any of them in any way and
for any purpose (whether for safekeeping,
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deposit, custody, pledge, transmission, collection or otherwise); and all rights
and interests of the Grantor, now existing or hereafter arising and however and
wherever arising, in respect of any and all (i) notes, drafts, letters of
credit, stocks, bonds, and debt and equity securities, whether or not
certificated, investment property and warrants, options, puts and calls and
other rights to acquire or otherwise relating to the same; (ii) money; (iii)
proceeds of loans including, without limitation, loans made under the Credit
Agreements; and (iv) insurance proceeds and books and records relating to any of
the property covered by this Agreement; together, in each instance, with all
accessions and additions thereto, substitutions therefor, and replacements,
proceeds and products thereof.
The Collateral upon which the Agent has been granted a Lien hereunder
shall not include property and rights in property subject to "Permitted Liens"
(as defined in the Credit Agreements) so long as such property and rights in
property are subject to such Permitted Liens.
SECTION 3. [RESERVED].
SECTION 4. Grantor Remains Liable. Anything herein to the contrary
notwithstanding, (a) the Grantor shall remain solely liable under the contracts
and agreements included in the Collateral to the extent set forth therein to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by the Agent of any of
its rights hereunder shall not release the Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral, and
(c) neither the Agent nor the Holders of Guaranteed Obligations shall have any
responsibility, obligation or liability under the contracts and agreements
included in the Collateral by reason of this Agreement, nor shall the Agent or
the Holders of Guaranteed Obligations be required or obligated, in any manner,
to (i) perform or fulfill any of the obligations or duties of the Grantor
thereunder, (ii) make any payment, or make any inquiry as to the nature or
sufficiency of any payment received by the Grantor or the sufficiency of any
performance by any party under any such contract or agreement or (iii) present
or file any claim, or take any action to collect or enforce any claim for
payment assigned hereunder.
SECTION 5. Representations and Warranties. The Grantor represents and
warrants, as of the date of this Agreement and as of each date hereafter (except
for changes permitted or contemplated by this Agreement) until termination of
this Agreement pursuant to Section 25:
(a) The correct corporate name of the Grantor is set forth in the first
paragraph of this Agreement. The locations listed on SCHEDULE 1 constitute all
locations at which Inventory and/or Equipment is located and the Grantor has
exclusive possession and control of such Equipment and Inventory, except for (i)
such Inventory and Equipment which is (A) temporarily in transit between such
locations, or (B) temporarily stored with third parties or held by third parties
for processing, storage, engineering, evaluation or repairs, the proper
corporate names of which third parties, the location of such Inventory and/or
Equipment, and the nature of the relationship between the Grantor and such third
parties are set forth on SCHEDULE 1-A, as such SCHEDULE 1-A may be amended or
supplemented from time to time, or have been otherwise provided to the Agent,
(ii) Equipment sold to and subsequently repurchased from a third party by the
Grantor for the period beginning on the date of such repurchase and ending on
the date of the
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re-sale of such Equipment to a different third party, (iii) Equipment
transferred from a third party to the Grantor (such Equipment, "Trade-In
Equipment") in partial satisfaction of the purchase price for Equipment sold by
the Grantor to such third party for the period beginning on the date of the
transfer of such Trade-In Equipment and ending on the date the Grantor sells
such Trade-In Equipment, and (iv) Equipment used by the Grantor in connection
with demonstrations to prospective purchasers of such Equipment; provided, that
the aggregate value of the Equipment described in clauses (ii), (iii), and (iv)
does not exceed $10,000,000. The chief place of business and chief executive
office of the Grantor are located at the address of the Grantor set forth below
the Grantor's signature to this Agreement. All records concerning any Accounts
and all originals of chattel paper which evidence any Account are located at the
addresses listed on SCHEDULE 1 and none of the Accounts is evidenced by a
promissory note or other instrument except for such notes and other instruments
delivered to the Agent.
(b) The Grantor is the legal and beneficial owner of the Collateral
free and clear of all Liens except for Liens permitted as of the date hereof
under the Credit Agreements and the Note Agreements. The Grantor currently
conducts business under the name Ag-Chem Manufacturing Co., Inc., and, in
certain areas and for certain operations, the additional trade names listed on
SCHEDULE 2. The Grantor uses no trade names or fictitious names, except as set
forth on SCHEDULE 2.
(c) This Agreement creates in favor of the Agent a legal, valid and
enforceable security interest in the Collateral. When financing statements have
been filed in the appropriate offices against the Grantor in the locations
listed on SCHEDULE 1-B, the Agent will have a fully perfected first priority
lien on, and security interest in, the Collateral in which a security interest
may be perfected by such filing, subject only to Liens permitted as of the date
hereof under the Credit Agreements and the Note Agreements.
(d) No authorization, approval or other action by, and no notice to or
filing with, any Governmental Authority that has not already been taken or made
and is in full force and effect is required (i) for the grant by the Grantor of
the security interest in the Collateral granted hereby; (ii) for the execution,
delivery or performance of this Agreement by the Grantor; or (iii) for the
exercise by the Agent of any of its rights or remedies hereunder.
(e) The Pledged Debt issued by any Affiliate of the Grantor, and to the
best of the Grantor's knowledge, all other Pledged Debt, has been duly
authorized, issued and delivered, and is the legal, valid, binding and
enforceable obligation of the respective issuer thereof.
SECTION 6. Perfection and Maintenance of Security Interests and Liens.
The Grantor agrees that until all of the Guaranteed Obligations (other than
contingent indemnity obligations) have been fully satisfied and each of the
Guarantees has been terminated, the Agent's security interests in and Liens on
and against the Collateral and all proceeds and products thereof shall continue
in full force and effect. The Grantor shall perform any and all steps reasonably
requested by the Agent to perfect, maintain and protect the Agent's security
interests in and Liens on and against the Collateral granted or purported to be
granted hereby or to enable the Agent to exercise its rights and remedies
hereunder with respect to any Collateral, including, without limitation, (i)
executing and filing financing or continuation statements, or
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amendments thereof, in form and substance reasonably satisfactory to the Agent,
(ii) delivering to the Agent all certificates, notes, and other instruments
(including, without limitation, all letters of credit on which the Grantor is
named as a beneficiary) representing or evidencing Collateral, which
certificates, notes, and other instruments have been duly endorsed or are
accompanied by duly executed instruments of transfer or assignment, including,
but not limited to, note powers, all in form and substance satisfactory to the
Agent, (iii) at the reasonable direction of Agent, delivering to the Agent
warehouse receipts covering that portion of the Collateral, if any, located in
warehouses and for which warehouse receipts are issued, (iv) after the
occurrence and during the continuance of an Event of Default, transferring
Inventory and Equipment to warehouses designated by the Agent or taking such
other steps as are reasonably deemed necessary by the Agent to maintain the
Agent's control of the Inventory and Equipment, (v) upon the reasonable request
of the Agent, marking conspicuously each document, contract, chattel paper and
all records pertaining to the Collateral with a legend, in form and substance
satisfactory to the Agent, indicating that such document, contract, chattel
paper, or other record pertaining to the Collateral is subject to the security
interest granted hereby, (vi) obtaining waivers of Liens and access agreements
in substantially the following forms: (a) EXHIBIT A-1 hereto (or such other form
as may be agreed to by the Agent) from landlords with respect to all leases
executed after the date hereof, (b) EXHIBIT A-2 hereto (or such other form as
may be agreed to by the Agent) from mortgagees with respect to all leases
executed after the date hereof and (3) EXHIBIT B hereto (or such other form as
may be agreed to by the Agent) from the appropriate Person with respect to all
arrangements pursuant to which Inventory will be stored in public warehouse
facilities after the date hereof, and (vii) executing and delivering all further
instruments and documents, and taking all further action, as the Agent may
reasonably request.
SECTION 7. Financing Statements. To the extent permitted by applicable
law, the Grantor hereby authorizes the Agent to file one or more financing or
continuation statements and amendments thereto, disclosing the security interest
granted to the Agent under this Agreement without the Grantor's signature
appearing thereon, and the Agent agrees to notify the Grantor when such a filing
has been made. The Grantor agrees that a carbon, photographic, photostatic, or
other reproduction of this Agreement or of a financing statement is sufficient
as a financing statement. If any Inventory or Equipment is in the possession or
control of any warehouseman or the Grantor's agents or processors, the Grantor
shall, upon the Agent's request, notify such warehouseman, agent or processor of
the Agent's security interest in such Inventory and Equipment and, upon the
Agent's request, instruct them to hold all such Inventory or Equipment for the
Agent's account and subject to the Agent's instructions.
SECTION 8. Filing Costs. The Grantor shall pay the costs of, or
incidental to, all recordings or filings of all financing statements, including,
without limitation, any filing expenses incurred by the Agent pursuant to
Section 7.
SECTION 9. Schedule of Collateral. The Grantor shall furnish to the
Agent from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the Agent may reasonably request, all in reasonable detail.
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SECTION 10. Equipment and Inventory. The Grantor covenants and agrees
with the Agent that from the date of this Agreement and until termination of
this Agreement pursuant to Section 25, the Grantor shall:
(a) Keep the Equipment and Inventory (other than Equipment or Inventory
sold or disposed of as permitted by the Credit Agreements and the Note
Agreements) at the places specified in Section 5(a), except for (i) Equipment
and Inventory (A) temporarily in transit between such locations or (B)
temporarily stored with the third parties or held by third parties for
processing, storage, engineering, evaluation, or repairs as set forth on
SCHEDULE 1-A, and deliver written notice to the Agent at least thirty (30) days
prior to establishing any other location at which it reasonably expects to
maintain Inventory and/or Equipment in which location or with which third party
all action required by this Agreement shall have been taken with respect to all
such Equipment and Inventory, (ii) Equipment sold to and subsequently
repurchased from a third party by the Grantor for the period beginning on the
date of such repurchase and ending on the date of the re-sale of such Equipment
to a different third party, (iii) Equipment transferred from a third party to
the Grantor (such Equipment, "Trade-In Equipment") in partial satisfaction of
the purchase price for Equipment sold by the Grantor to such third party for the
period beginning on the date of the transfer of such Trade-In Equipment and
ending on the date the Grantor sells such Trade-In Equipment and (iv) Equipment
used by the Grantor in connection with demonstrations to prospective purchasers
of such Equipment; provided, that the aggregate value of the Equipment described
in clauses (ii), (iii) and (iv) does not exceed $10,000,000;
(b) Maintain or cause to be maintained in good repair, working order,
and condition, excepting ordinary wear and tear and damage due to casualty, all
of the Equipment, and make or cause to be made all appropriate repairs, renewals
and replacements thereof, as quickly as practicable after the occurrence of any
loss or damage thereto which are necessary or desirable to such end; and
(c) Comply with the terms of the Credit Agreements and the Note
Agreements with respect to such Equipment and Inventory, including, without
limitation, the maintenance and insurance provisions set forth in Section 5.1(c)
of each of the Credit Agreements.
SECTION 11. Accounts. The Grantor covenants and agrees with the Agent
that from and after the date of this Agreement and until termination of this
Agreement pursuant to Section 25, the Grantor:
(a) Shall keep its chief place of business and chief executive office
and the office where it keeps its records concerning the Accounts at its address
set forth below the Grantor's signature on this Agreement, and keep the offices
where it keeps all originals of all chattel paper which evidence Accounts at the
locations therefor specified in Section 5(a) or, upon thirty (30) days' prior
written notice to the Agent, at such other locations within the United States in
a jurisdiction where all actions required by Section 6 shall have been taken
with respect to the Accounts. The Grantor will hold and preserve such records
(in accordance with the Grantor's usual document retention practices) and
chattel paper and will permit representatives of the Agent at any time during
normal business hours to inspect and make abstracts from such records and
chattel paper;
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(b) Shall in any suit, proceeding or action brought by the Agent under
any Account comprising part of the Collateral, the Grantor will save, indemnify
and keep each of the Holders of Guaranteed Obligations harmless from and against
all expenses, loss or damage suffered by reason of any defense, setoff,
counterclaim, recoupment or reduction of liability whatsoever of the obligor
thereunder, arising out of a breach by the Grantor of any obligation or arising
out of any other agreement, indebtedness or liability at any time owing to or in
favor of such Holder of Guaranteed Obligations from the Grantor, and all such
obligations of the Grantor shall be and shall remain enforceable against and
only against the Grantor and shall not be enforceable against any of the Holders
of Guaranteed Obligations; and
(c) Shall not sell, transfer assign or encumber any account,
instrument, or chattel paper other than pursuant to the terms of the Credit
Agreements and the Note Agreements.
SECTION 12. Leased Real Property. The Grantor covenants and agrees with
the Agent that from and after the date of this Agreement and until termination
of this Agreement pursuant to Section 25, that:
(a) Promptly following, but not later than ninety (90) days after, the
close of each fiscal year the Grantor will furnish to the Agent a report
certified to be true and correct by the Grantor containing a list of each of the
Grantor's leased premises; the name or names of all owners; rentals being paid;
and whether the Grantor has obtained waivers of Liens and access agreements from
landlords with respect to such premises in accordance with Section 6; and
(b) The Grantor agrees that, after the occurrence and during the
continuation of an Event of Default, the Agent may, but need not, make any
payment or perform any act hereinbefore required of the Grantor with respect to
the Grantor's leased premises in any form and manner deemed expedient. All money
paid for any of the purposes herein authorized and all other moneys advanced by
the Agent to protect the lien hereof shall be additional Guaranteed Obligations
secured hereby and shall become immediately due and payable without notice and
shall bear interest thereon at the default interest rate as provided in the
Credit Agreement until paid to the Agent in full.
(c) The Grantor agrees that it will not amend any lease in a manner
that has a material adverse affect on the interests of the Holders of Guaranteed
Obligations without the Agent's prior written consent.
SECTION 13. General Covenants. The Grantor covenants and agrees with
the Agent that from and after the date of this Agreement and until termination
of this Agreement pursuant to Section 25, the Grantor shall:
(a) Keep and maintain at the Grantor's own cost and expense
satisfactory and complete records of the Grantor's Collateral in a manner
consistent with the Grantor's current business practice, including, without
limitation, a record of all payments received and all credits granted with
respect to such Collateral. The Grantor shall, for the Agent's further security,
deliver and turn over to the Agent or the Agent's designated representatives at
any time following the occurrence and during the continuation of an Event of
Default, any such books and records (including, without limitation, any and all
computer tapes, programs and source and
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object codes relating to such Collateral in which the Grantor has an interest or
any part or parts thereof); and
(b) The Grantor will not create, permit or suffer to exist, and will
defend the Collateral against, and take such other action as is necessary to
remove, any Lien on such Collateral other than Liens permitted as of the date
hereof under the Credit Agreements and the Note Agreements, and will defend the
right, title and interest of the Agent in and to the Grantor's rights to such
Collateral, including, without limitation, the proceeds and products thereof,
against the claims and demands of all Persons whatsoever.
SECTION 14. The Agent Appointed Attorney-in-Fact. The Grantor hereby
irrevocably appoints the Agent as the Grantor's attorney-in-fact, with full
authority in the place and stead of the Grantor and in the name of the Grantor
or otherwise, following the occurrence and during the continuation of an Event
of Default, in the Agent's discretion, to take any action and to execute any
instrument which the Agent may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation, to:
(i) obtain and adjust insurance required to be paid to the
Agent or any Holders of Guaranteed Obligations pursuant to the Credit
Agreements and the Note Agreements;
(ii) ask, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
(iii) receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (i)
or (ii) above; and
(iv) file any claims or take any action or institute any
proceedings which the Agent may deem necessary or desirable for the
collection of any of the Collateral, or otherwise to enforce the rights
of the Agent with respect to any of the Collateral;
In addition, the Agent may at any time:
(i) obtain access to records maintained for the Grantor by
computer services companies and other service companies or bureaus;
(ii) send requests under the Grantor's, the Agent's or a
fictitious name to the Grantor's customers or account debtors for
verification of Accounts provided that the Agent gives the Grantor
notice prior to initiating any such verifications; and
(iii) do all other things reasonably necessary to carry out
this Agreement.
SECTION 15. The Agent May Perform. If the Grantor fails to perform any
agreement contained herein, in the Guarantees, in the Credit Agreements or in
the Note Agreements, the Agent may, upon three days' prior notice to the
Grantor, perform, or cause
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performance of, such agreement, and the expenses of the Agent incurred in
connection therewith shall be payable by the Grantor under Section 22.
SECTION 16. The Agent's Duties. The powers conferred on the Agent
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the safe custody
of any Collateral in its possession and the accounting for moneys actually
received by it hereunder, the Agent shall not have any duty as to any
Collateral. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession if the Collateral
is accorded treatment substantially equal to that which the Agent accords its
own property, it being understood that the Agent shall be under no obligation to
take any necessary steps to preserve rights against prior parties or any other
rights pertaining to any Collateral, but may do so at its option, and all
reasonable expenses incurred in connection therewith shall be for the sole
account of the Grantor and shall be added to the Guaranteed Obligations.
SECTION 17. Remedies. (a) If any Event of Default shall have occurred
and be continuing:
(i) The Agent shall have, in addition to other rights and
remedies provided for herein or otherwise available to it, all the
rights and remedies of a secured party upon default under the UCC
(whether or not the UCC applies to the affected Collateral) and
further, the Agent may, without notice, demand or legal process of any
kind (except as may be required by law), all of which the Grantor
waives, at any time or times, (x) enter the Grantor's owned or leased
premises where Collateral is located and take physical possession of
the Collateral and maintain such possession on the Grantor's owned or
leased premises, at no cost to the Agent or any of the Holders of
Guaranteed Obligations, or remove the Collateral, or any part thereof,
to such other place(s) as the Agent may desire, (y) require the Grantor
to, and the Grantor hereby agrees that it will at its expense and upon
request of the Agent forthwith, assemble all or any part of the
Collateral as directed by the Agent and make it available to the Agent
at a place to be designated by the Agent which is reasonably convenient
to the Agent and (z) without notice except as specified below, sell,
lease, assign, grant an option or options to purchase or otherwise
dispose of the Collateral or any part thereof at public or private
sale, at any exchange, broker's board or at any of the offices of the
Agent or elsewhere, for cash, on credit or for future delivery, and
upon such other terms as the Agent may deem commercially reasonable.
The Grantor agrees that, to the extent notice of sale shall be required
by law, at least ten (10) days' notice to the Grantor of the time and
place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Agent shall not
be obligated to make any sale of Collateral regardless of notice of
sale having been given. The Agent may adjourn any public or private
sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned;
(ii) The Agent shall apply all cash proceeds received by the
Agent in respect of any sale of, collection from, or other realization
upon all or any part of the Collateral (after payment of any amounts
payable to the Agent pursuant to Section 22), for the benefit of the
Holders of Guaranteed Obligations, against all or any part of the
Guaranteed Obligations in such order as is required by the Collateral
Sharing Agreement, or, to the extent not specified therein, as is
determined by the Holders of Guaranteed Obligations, and, with respect
to the application of such proceeds subsequent to the satisfaction of
the conditions set forth in the Collateral Sharing Agreement or as
agreed to by the Holders of
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Guaranteed Obligations, as applicable, in such order as may be required
under each Guarantee with respect to amounts remitted to the entity in
whose favor such Guarantee runs. Any surplus of such cash or cash
proceeds held by the Agent and remaining after payment in full of all
the Guaranteed Obligations shall be paid over to the Grantor or to
whomsoever may be lawfully entitled to receive such surplus;
(b) The Grantor waives all claims, damages and demands against the
Agent arising out of the repossession, retention or sale of any of the
Collateral or any part or parts thereof, except any such claims, damages and
awards arising out of the gross negligence or willful misconduct of the Agent or
any of the Holders of Guaranteed Obligations, as the case may be, as determined
in a final non-appealed judgment of a court of competent jurisdiction; and
(c) The rights and remedies provided under this Agreement are
cumulative and may be exercised singly or concurrently and are not exclusive of
any rights and remedies provided by law or equity.
SECTION 18. Exercise of Remedies. In connection with the exercise of
its remedies pursuant to Section 17, the Agent may, (i) exchange, enforce, waive
or release any portion of the Collateral and any other security for the
Guaranteed Obligations; (ii) apply such Collateral or security and direct the
order or manner of sale thereof as the Agent may, from time to time, determine;
and (iii) settle, compromise, collect or otherwise liquidate any such Collateral
or security in any manner following the occurrence and during the continuation
of an Event of Default, without affecting or impairing the Agent's right to take
any other further action with respect to any Collateral or security or any part
thereof.
SECTION 19. License. The Agent is hereby granted a license or other
right to use, following the occurrence and during the continuance of an Event of
Default, without charge, (a) the Grantor's labels, patents, copyrights, trade
secrets, trade names, trademarks, service marks, customer lists and advertising
matter, or any property of a similar nature, as it pertains to the Collateral,
in completing production of, advertising for sale, and selling any Collateral,
provided that the Agent uses quality standards at least substantially equivalent
to those of the Grantor for the manufacture, advertising, sale and distribution
of the Grantor's products and services and (b) the Grantor's rights under all
licenses.
SECTION 20. Injunctive Relief. The Grantor recognizes that in the event
the Grantor fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, any remedy of law may prove to be inadequate
relief to the Holders of Guaranteed Obligations; therefore, the Grantor agrees
that the Agent shall be entitled to temporary and permanent injunctive relief in
any such case without the necessity of proving actual damages.
SECTION 21. Interpretation and Inconsistencies; Merger. (a) The rights
and duties created by this Agreement shall, in all cases, be interpreted
consistently with, and shall be in addition to (and not in lieu of), the rights
and duties created by the Guarantees, the Collateral Sharing Agreement, and the
other Loan Documents. In the event that any provision of this Agreement shall be
inconsistent with any provision of any other Loan Document, such provision of
the other Loan Document shall govern.
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(b) Except as provided in subsection (a) above, this Agreement
represents the final and entire agreement of the Grantor and the Agent with
respect to the matters contained herein.
SECTION 22. Expenses. The Grantor will upon demand pay to the Agent the
amount of any and all reasonable expenses, including the reasonable fees and
disbursements of its counsel and of any experts and agents, as provided in the
Credit Agreements, the Note Agreements, and/or the Collateral Sharing Agreement.
SECTION 23. Amendments, Etc. No amendment or waiver of any provision of
this Agreement nor consent to any departure by the Grantor herefrom shall in any
event be effective unless the same shall be in writing and signed by the Agent
(in accordance with the Collateral Sharing Agreement) and the Grantor, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
SECTION 24. Notices. All notices and other communications provided for
hereunder shall be delivered in the manner set forth in Section 8.2 of each of
the Credit Agreements.
SECTION 25. Continuing Security Interest; Termination. (a) Except as
provided in Section 25(b), this Agreement shall create a continuing security
interest in the Collateral and shall (i) remain in full force and effect until
the later of the payment or satisfaction in full of the Guaranteed Obligations
(other than contingent indemnity obligations) and the termination of each of the
Guarantees, (ii) be binding upon the Grantor, its successors and assigns and
(iii) except to the extent that the rights of any transferor or assignor are
limited by the terms of each of the Guarantees, inure, together with the rights
and remedies of the Agent hereunder, to the benefit of the Agent and any of the
Holders of Guaranteed Obligations. Nothing set forth herein or in any other Loan
Document is intended or shall be construed to give any other Person any right,
remedy or claim under, to or in respect of this Agreement or any other Loan
Document or any Collateral. The Grantor's successors and assigns shall include,
without limitation, a receiver, trustee or debtor-in-possession thereof or
therefor.
(b) The security interest granted hereby shall terminate and all rights
to the Collateral shall revert to the Grantor on the earlier of the date on
which (i) the Agent shall have received from each Holder of Guaranteed
Obligations written notice that all "Obligations" (as defined in the Collateral
Sharing Agreement) owing to such Holder of Guaranteed Obligations have been paid
in full or (ii) the Agent shall have received written notice from the Holders of
Guaranteed Obligations directing the Agent to release the Collateral and stating
that the Holders of Guaranteed Obligations have consented to such release under
the terms of the Credit Agreements, the Note Agreements and the Guarantees
provided, that no such termination shall occur prior to the payment in full of
all of the Agent's "Expenses" (as defined in the Collateral Sharing Agreement).
Upon the termination of the security interest, the Grantor shall be entitled to
the prompt return, upon its request and at its expense, of such of the
Collateral held by the Agent as shall not have been sold or otherwise applied
pursuant to the terms hereof and the Agent will, at the Grantor's expense,
promptly execute and deliver to the Grantor such other documents as the Grantor
shall reasonably request to evidence such termination. In connection with any
sales of assets permitted under the Credit Agreements and the Note Agreements,
the
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<PAGE>
Agent will promptly release and terminate the liens and security interests
granted under this Agreement with respect to such assets.
SECTION 26. Severability. Any provision in this Agreement that is held
to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to
that jurisdiction, be inoperative, unenforceable, or invalid without affecting
the remaining provisions in that jurisdiction or the operation, enforceability,
or validity of that provision in any other jurisdiction, and to this end the
provisions of this Agreement are declared to be severable.
SECTION 27. GOVERNING LAW. ANY DISPUTE BETWEEN THE GRANTOR AND THE
AGENT ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT, AND
WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN
ACCORDANCE WITH THE LAWS (INCLUDING 735 ILCS SECTION 105/5-1 ET SEQ. BUT
OTHERWISE WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES) OF THE STATE OF
ILLINOIS.
SECTION 28. CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.
(A) NON-EXCLUSIVE JURISDICTION. EACH OF THE PARTIES HERETO AGREES THAT
ALL DISPUTES BETWEEN THEM ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS
AGREEMENT WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, MAY BE
RESOLVED NON-EXCLUSIVELY BY STATE OR FEDERAL COURTS LOCATED IN CHICAGO,
ILLINOIS, BUT THE PARTIES HERETO ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS
MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF CHICAGO, ILLINOIS. EACH OF
THE PARTIES HERETO WAIVES IN ALL DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION
(A) ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE
DISPUTE.
(B) VENUE. THE GRANTOR IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH
IN ANY JURISDICTION SET FORTH IN PARAGRAPH (A) ABOVE.
(C) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH. EACH OF THE PARTIES
14
<PAGE>
HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO
MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.
15
<PAGE>
IN WITNESS WHEREOF, the Grantor has caused this Agreement to
be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
AG-CHEM MANUFACTURING CO., INC.
By: /s/ John Retherford
-------------------------------------
Name: John Retherford
Title: CFO
Address: 5720 Smetana Drive
Minnetonka, MN 55343
Facsimile No.: (612) 939-4405
BANK ONE, NA, having its principal office
in Chicago, Illinois, formerly known as
The First National Bank of Chicago, as
Agent
By: /s/ Kevin Gillen
-------------------------------------
Name: Kevin Gillen
Title: Vice President
Guarantor Security Agreement Signature Page
<PAGE>
EXHIBIT A-1
to
Guarantor Security Agreement
Form of Landlord Agreement
Bank One, NA
1 Bank One Plaza
Chicago, IL 60670
Attention: Jenny Gilpin
Ladies and Gentlemen:
Ag-Chem Manufacturing Co., Inc., ("Grantor"), the lessee under that
certain lease dated _________________ between the Grantor, and the undersigned,
covering certain premises owned by the undersigned and located at
_________________ (the "Premises") more fully described in the lease attached
hereto as Exhibit A (the "Lease"). Grantor has certain of its assets located on
the Premises.
Grantor has entered into certain financing arrangements with a group of
lenders ("Lenders") including Bank One, NA, as contractual representative for
the Lenders (the "Agent") and the Agent and the Lenders require, among other
things, that Grantor grant liens in favor of the Agent for the benefit of itself
and the Lenders on all of Grantor's property located on the Premises
("Collateral").
To induce the Agent and the Lenders (together with their respective
agents, successors and assigns) to continue said financing arrangements, and for
other good and valuable consideration, the undersigned hereby agrees that:
(i) it will not assert against any of Grantor's assets any
statutory or possessory liens, including, without limitation, rights of
levy or distraint for rent, all of which it hereby waives;
(ii) none of the Collateral located on the Premises shall be
deemed to be fixtures;
(iii) if Grantor defaults on its obligations to the Agent or
any Lender and, as a result, the Agent undertakes to enforce its
security interest in the Collateral, the undersigned will cooperate
with the Agent in its efforts to assemble all of the Collateral located
on the Premises, will permit the Agent to remain on the Premises for
ninety (90) days after the Agent gives the undersigned notice of
default, provided the Agent pays the rental payments due under the
Lease for the period of time the Agent uses the Premises, or, at the
Agent's option, to remove the Collateral from the Premises within a
reasonable time, not to exceed ninety (90) days after the Agent gives
the undersigned notice of default, provided the Agent pays the rental
payments due under the Lease for the period
<PAGE>
of time the Agent uses the Premises, and will not hinder the Agent's
actions in enforcing its liens on the Collateral;
[it will allow the Agent thirty (30) days from the Agent's
receipt of notice in which to cure or cause Grantor to cure any
defaults on Grantor's lease obligations to the undersigned; provided if
such default cannot reasonably be cured within the thirty (30) day
period, and provided the Agent is diligently pursuing a cure, then the
Agent shall have a reasonable period to cure such default;]
[(iv) if, for any reason whatsoever, the undersigned either
deems itself entitled to redeem or to take possession of the Premises
during the term of Grantor's lease or intends to sell or otherwise
transfer all or any part of its interest in the Premises, the
undersigned will notify the Agent five (5) days before taking such
action;]
[(v) the undersigned shall accept performance by the Agent of
the Grantor's obligations under the Lease as though the same had been
performed by the holder of the Grantor's interest therein at the time
of such performance. Upon the cure of any such default, any notice
advising of any default or any action of the undersigned to terminate
the Lease or to interfere with the occupancy, use or enjoyment of the
Premises by reason thereof, which action has not been completed, shall
be deemed rescinded and the Lease shall continue in full force and
effect. The undersigned shall not be required to continue any
possession or continue any action to obtain possession upon the cure of
any such default;]
Any notice(s) required or desired to be given hereunder shall be
directed to the party to be notified at the address stated herein.
The agreements contained herein shall continue in force until all of
Grantor's obligations and liabilities to the Agent and the Lenders are paid and
satisfied in full and all financing arrangements among the Agent, the Lenders
and Grantor have been terminated.
The undersigned will use reasonable efforts to notify all successor
owners, transferees, purchasers and mortgagees of the existence of this waiver.
The agreements contained herein may not be modified or terminated orally and
shall be binding upon the successors, assigns and personal representatives of
the undersigned, upon any successor owner or transferee of the Premises, and
upon any purchasers, including any mortgagee, from the undersigned.
The undersigned agrees that nothing contained in this waiver shall be
construed as an assumption by the Agent or any of the other lenders of any
obligations of Grantor contained in the Lease.
Executed and delivered this ____ day of ___________, at ______________.
THIS WAIVER SHALL NOT IMPAIR OR OTHERWISE AFFECT GRANTOR'S
OBLIGATIONS TO PAY RENT AND ANY OTHER SUMS
2
<PAGE>
PAYABLE BY GRANTOR OR TO OTHERWISE PERFORM ITS OBLIGATIONS TO
THE LESSOR PURSUANT TO THE TERMS OF THE LEASE.
[Name of Lessor]
By:
-------------------------------------
Title:
----------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
AGREED & ACKNOWLEDGED:
[ ]
------------------------------
By:
-------------------------------------
Title:
----------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
3
<PAGE>
EXHIBIT A
to
Landlord Agreement
Lease
(attached hereto)
<PAGE>
EXHIBIT B
to
Landlord Agreement
Leasehold Mortgage
(attached hereto)
<PAGE>
[ACKNOWLEDGMENT (CORPORATE)
STATE OF )
------------------------
)SS
COUNTY OF )
-----------------------
Before me, a Notary Public in and for said County, personally appeared
_____________, a _________________________ corporation, by the _________________
of such corporation, who acknowledged that (s)he did sign the foregoing
instrument on behalf of said corporation and that said instrument is the
voluntary act and deed of said corporation and his/her voluntary act and deed as
such officer of said corporation.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name and affixed my
official seal this ____ day of ____________, at _____________, ________________.
-----------------------------------------
Notary Public
My Commission Expires:]
(Notarial Seal)
<PAGE>
[ACKNOWLEDGMENT (CORPORATE)
STATE OF )
------------------------
)SS
COUNTY OF )
-----------------------
Before me, a Notary Public in and for said County, personally appeared
_____________, a ______________ corporation, by the ______________________ of
such corporation, who acknowledged that (s)he did sign the foregoing instrument
on behalf of said corporation and that said instrument is the voluntary act and
deed of said corporation and his/her voluntary act and deed as such officer of
said corporation.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name and affixed my
official seal this ____day of ___________, at _______________, ________________.
-----------------------------------------
Notary Public
My Commission Expires:]
(Notarial Seal)
<PAGE>
EXHIBIT A-2
to
Guarantor Security Agreement
Form of Mortgagee Agreement
Bank One, NA
1 Bank One Plaza
Chicago, IL 60670
Attention: Jenny Gilpin
Ladies and Gentlemen:
Ag-Chem Manufacturing Co., Inc. ("Grantor"), is the lessee under that
certain lease dated _______________ between the Grantor, and ___________________
(the "Landlord[s]"), covering certain premises located at _________________ (the
"Premises") as more fully described on Exhibit A(1) attached hereto (the
"Lease"). The undersigned is the mortgagee under a mortgage between the
Landlord[s] and the undersigned covering the Premises (the "Mortgage"). The
undersigned is the sole mortgagee of the Premises. Grantor has certain of its
assets located on the Premises.
Grantor has entered into certain financing arrangements with a group of
lenders ("Lenders") including Bank One, NA, as contractual representative for
the Lenders (the "Agent") and the Agent and the Lenders require, among other
things, that Grantor grant liens in favor of the Agent for the benefit of itself
and the Lenders on all of Grantor's property located on the Premises
("Collateral").
By its signature below, the undersigned agrees that:
(i) it will not assert against any of the Collateral any
statutory or possessory liens, including, without limitation, rights of
levy or distraint for rent, all of which it hereby waives;
(ii) none of the Collateral located on the Premises shall be
deemed to be fixtures;
[(iii) it will allow the Agent thirty (30) days from the
Agent's receipt of notice in which to cure or cause Grantor to cure any
such defaults on its mortgage obligations; provided if such default
cannot reasonably be cured within the thirty
- -----------------------
(1) Please attach legal description of premises for recordation purposes.
<PAGE>
(30) day period, and provided the Agent is diligently pursuing a cure,
then the Agent shall have a reasonable period to cure such default;]
[(iv) if, for any reason whatsoever, the undersigned either
deems itself entitled to take possession of the Premises during the
term of the Mortgage or intends to sell or otherwise transfer all or
any part of its interest in the Premises, the undersigned will notify
the Agent five (5) days before taking such action;]
(v) if Grantor defaults on its obligations to the Agent or any
Lender and, as a result, the Agent undertakes to enforce its security
interest in the Collateral, the undersigned will cooperate with the
Agent in its efforts to assemble all of the Collateral located on the
Premises, will permit the Agent to remain on the Premises for ninety
(90) days after the Agent gives the undersigned notice of default,
provided the Agent pays the Lease payments to the Landlord[s] due under
the Lease for the period of time the Agent uses the Premises, or, at
the Agent's option, to remove the Collateral from the Premises within a
reasonable time, not to exceed ninety (90) days after the Agent gives
the undersigned notice of default, provided the Agent pays the rental
payments to the Landlord[s] due under the Lease for the period of time
the Agent uses the Premises, and will not hinder the Agent's actions in
enforcing its liens on the Collateral; and
Any notice(s) required or desired to be given hereunder shall be
directed to the party to be notified at the address stated herein.
The agreements contained herein shall continue in force until all of
Grantor's obligations and liabilities to the Agent and the Lenders are paid and
satisfied in full and all financing arrangements among the Agent, the Lenders
and Grantor have been terminated.
The undersigned will notify all successor owners, transferees,
purchasers and mortgagees of the existence of this waiver. The agreements
contained herein may not be modified or terminated orally and shall be binding
upon the successors, assigns and personal representatives of the undersigned,
upon any successor owner or transferee of the Premises, and upon any purchasers,
including any mortgagee, from the undersigned.
[The undersigned consents to the granting of the Leasehold Mortgage to
the Agent and to the liens, security interests and encumbrances created by and
resulting from the Leasehold Mortgage or other documents collateral thereto in
the form attached hereto as Exhibit B.]
The undersigned agrees that nothing contained in this waiver shall be
construed as an assumption by the agent or any of the other lenders of any
obligations of the landlord contained in the mortgage.
Executed and delivered this ____ day of ___________, at ______________.
THIS WAIVER SHALL NOT IMPAIR OR OTHERWISE AFFECT GRANTOR'S
OBLIGATIONS TO PAY RENT AND ANY OTHER SUMS
2
<PAGE>
PAYABLE BY GRANTOR OR TO OTHERWISE PERFORM ITS OBLIGATIONS TO
THE LANDLORD PURSUANT TO THE TERMS OF THE LEASE.
[Name of Mortgagee]
By:
-------------------------------------
Title:
----------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
AGREED & ACKNOWLEDGED:
[ ]
------------------------------
By:
-------------------------------------
Title:
----------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
3
<PAGE>
EXHIBIT A
to
Landlord Agreement
Lease
(attached hereto)
<PAGE>
EXHIBIT B
to
Landlord Agreement
Leasehold Mortgage
(attached hereto)
<PAGE>
STATE OF )
------------------------
)SS
COUNTY OF )
-----------------------
The foregoing letter agreement was acknowledged before me this ___ day
of _____________, by _____________________, a _______________ of ______________,
a ____________________, on behalf of such ____________________.
-----------------------------------------
Notary Public
________ County, _____________
My commission expires:_______]
<PAGE>
EXHIBIT B
to
Guarantor Security Agreement
Form of Bailee Letter
To: Bank One, NA
1 Bank One Plaza
Chicago, IL 60670
Attention: Jenny Gilpin
Ladies and Gentlemen:
Ag-Chem Manufacturing Co., Inc. ("Grantor"), now does or hereafter may
store certain of its merchandise, inventory, or other of its personal property
at premises located at _______________ (the "Premises") owned or leased by the
undersigned.
Grantor has entered into certain financing arrangements with a group of
lenders (the "Lenders") including Bank One, NA (the "Agent") and, as a condition
to continuing the loans and other financial accommodations of the Lenders to
Grantor, the Agent and the Lenders require, among other things, that Grantor
grant liens in favor of the Agent for the benefit of the Agent and the Lenders
on all of Grantor's property located on the Premises ("Collateral").
To induce the Agent and the Lenders (together with their respective
agents, successors and assigns) to continue said financing arrangements, and for
other good and valuable consideration, the undersigned hereby agrees that:
(i) it will not assert against any of Grantor's assets any
statutory or possessory liens, including, without limitation, rights of
levy or distraint for rent, all of which it hereby waives;
(ii) the Collateral shall be identifiable as being owned by
Grantor and kept reasonably separate and distinct from other property
in the possession of the undersigned;
(iii) none of the Collateral located on the Premises shall be
deemed to be fixtures; and
(iv) if Grantor defaults on its obligations to the Lenders or
the Agent and, as a result, the Agent undertakes to enforce its
security interest in the Collateral, the undersigned (a) will cooperate
with the Agent in its efforts to assemble all of the Collateral located
on the Premises, (b) will permit the Agent to either remain on the
Premises for ninety (90) days after the Agent gives the undersigned
notice of default or, at the Agent's option, to remove the Collateral
from the Premises within a reasonable time, not to exceed ninety
<PAGE>
(90) days after the Agent gives the undersigned notice of default,
provided in either instance that the Agent leaves the Premises in the
same condition as existed immediately prior to such ninety (90) day
period, and the Agent shall indemnify the undersigned for any damages
arising solely out of its occupancy of the Premises, and (c) will not
hinder the Agent's actions in enforcing its liens on the Collateral.
Any notice(s) required or desired to be given hereunder shall be
directed to the party to be notified at the address stated herein.
The agreements contained herein shall continue in force until all of
Grantor's obligations and liabilities to the Agent and Lenders are paid and
satisfied in full and all financing arrangements among the Agent, the Lenders
and Grantor have been terminated.
The undersigned will notify all successor owners, transferees,
purchasers and mortgagees of the existence of this agreement. The agreements
contained herein may not be modified or terminated orally and shall be binding
upon the successors, assigns and personal representatives of the undersigned,
upon any successor owner or transferee of any of the Premises, and upon any
purchasers, including any mortgagee, from the undersigned.
Executed and delivered this ____ day of ___________, at ______________.
[Name and Address of Bailee]
(By)
-------------------------------------
2
<PAGE>
SCHEDULE 1
to
Guarantor Security Agreement
Locations of Collateral
Attached
<PAGE>
SCHEDULE 1-A
to
Guarantor Security Agreement
Third Party Locations:
<PAGE>
SCHEDULE 1-B
to
Guarantor Security Agreement
Financing Statement Filing Locations:
<PAGE>
SCHEDULE 2
to
Guarantor Security Agreement
Trade Names:
<PAGE>
SCHEDULE 3
to
Guarantor Security Agreement
Pledged Debt:
EXHIBIT 10.25
GUARANTOR SECURITY AGREEMENT
DATED AS OF MAY 15, 2000
between
AG-CHEM EQUIPMENT CANADA, LTD.
AND
BANK ONE, NA
AS AGENT
<PAGE>
TABLE OF CONTENTS
PAGE
----
SECTION 1. Defined Terms.......................................................1
SECTION 2. Grant of Security...................................................2
SECTION 3. [RESERVED]..........................................................5
SECTION 4. Grantor Remains Liable..............................................5
SECTION 5. Representations and Warranties......................................5
SECTION 6. Perfection and Maintenance of Security Interests and Liens..........6
SECTION 7. Financing Statements................................................7
SECTION 8. Filing Costs........................................................7
SECTION 9. Schedule of Collateral..............................................7
SECTION 10. Equipment and Inventory............................................8
SECTION 11. Accounts...........................................................8
SECTION 12. Leased Real Property...............................................9
SECTION 13. General Covenants..................................................9
SECTION 14. The Agent Appointed Attorney-in-Fact..............................10
SECTION 15. The Agent May Perform.............................................10
SECTION 16. The Agent's Duties................................................11
SECTION 17. Remedies..........................................................11
SECTION 18. Exercise of Remedies..............................................12
SECTION 19. License...........................................................12
SECTION 20. Injunctive Relief.................................................12
SECTION 21. Interpretation and Inconsistencies; Merger........................12
SECTION 22. Expenses..........................................................13
SECTION 23. Amendments, Etc...................................................13
SECTION 24. Notices...........................................................13
SECTION 25. Continuing Security Interest; Termination.........................13
SECTION 26. Severability......................................................14
SECTION 27. GOVERNING LAW.....................................................14
SECTION 28. CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL...........14
(A) NON-EXCLUSIVE JURISDICTION...........................................14
(B) VENUE................................................................14
(C) WAIVER OF JURY TRIAL.................................................14
i
<PAGE>
EXHIBITS
- --------
Exhibit A-1 Form of Landlord Agreement
Exhibit A-2 Form of Mortgagee Agreement
Exhibit B Form of Bailee Letter
SCHEDULES
- ---------
Schedule 1 Locations of Collateral
Schedule 1-A Third Party Locations
Schedule 1-B Financing Statement Filing Locations
Schedule 2 Trade Names
Schedule 3 Pledged Debt
ii
<PAGE>
GUARANTOR SECURITY AGREEMENT
This GUARANTOR SECURITY AGREEMENT (the "Agreement"), dated as of May
15, 2000 is made by AG-CHEM EQUIPMENT CANADA, LTD. (the "Grantor"), in favor of
BANK ONE, NA, having its principal office in Chicago, Illinois, formerly known
as The First National Bank of Chicago (the "Agent"), for its benefit and for the
benefit of the "Holders of Guaranteed Obligations" (as defined below) who are,
or may hereafter become, parties to either of the Credit Agreements or Note
Agreements referred to below.
PRELIMINARY STATEMENT
The Grantor entered into a Guaranty (Short Term) dated as of June 4,
1999, as reaffirmed on the date hereof (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the "Short Term Guaranty")
between the Grantor and the Agent. The Grantor also entered into a Guaranty
(Long Term) dated as of January 12, 1996, as reaffirmed on the date hereof (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the "Long Term Guaranty," and taken together with the Short Term
Guaranty, the "Bank Guarantees"), between the Grantor and the Agent.
The Grantor also guaranteed (such guarantees, the "Noteholder
Guarantees" and together with the Bank Guarantees, the "Guarantees") obligations
outstanding under a (i) a Note Agreement, dated as of April 6, 1994, with C.M.
Life Insurance Company and (ii) a Note Agreement, dated as of October 10, 1995,
with The Prudential Insurance Company of America (such agreements, the "Note
Agreements").
The Grantor, in order to secure its obligations under the Guarantees,
has agreed to grant to the Agent on behalf of the Holders of Guaranteed
Obligations the security interest contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Defined Terms. Unless otherwise defined herein, terms
defined in the Credit Agreements are used herein as therein defined, and the
following terms shall have the following meanings (such meanings being equally
applicable to both the singular and the plural forms of the terms defined):
"Agreement" shall mean this Guarantor Security Agreement, as the same
may from time to time be amended, restated, modified or supplemented, and shall
refer to this Agreement as the same may be in effect at the time such reference
becomes operative.
"Collateral" shall mean all property and rights in property now owned
or hereafter at any time acquired by the Grantor in or upon which a Lien is
granted in favor of the Agent by
<PAGE>
the Grantor under this Agreement, including, without limitation, the property
described in Section 2.
"Collateral Sharing Agreement" shall mean the Collateral Sharing
Agreement, dated as of the date hereof, as the same may be amended, restated,
supplemented or otherwise modified from time to time, among the Holders of
Guaranteed Obligations and the Agent, as acknowledged by the Grantor and certain
of its affiliates.
"Credit Agreements" shall mean (i) the Third Amended and Restated Long
Term Revolving Credit Agreement, dated as of June 4, 1999, among the Grantor,
the institutions from time to time party thereto as lenders, the Agent, as
contractual representative for such lenders, Ag-Chem Equipment Canada Ltd. and
Ag-Chem Europe B.V., as the same may be amended, restated, supplemented or
otherwise modified from time to time and (ii) the Short Term Revolving Credit
Agreement, dated as of June 4, 1999, among the Grantor, the institutions from
time to time party thereto as lenders, and the Agent, as contractual
representative for such lenders, as the same may be amended, restated,
supplemented or otherwise modified from time to time.
"Event of Default" shall mean an "Event of Default" as defined in the
Credit Agreements and the comparable term as it is set forth in the Note
Agreements.
"Guaranteed Obligations" shall mean the aggregate obligations of the
Grantor owing under the Guarantees, including, without limitation, Grantor's
guaranty to promptly and fully satisfy when due Indebtedness under the Credit
Agreements and obligations outstanding under the Note Agreements.
"Holders of Guaranteed Obligations" shall mean the holders of the
Guaranteed Obligations from time to time and shall include their respective
successors, transferees and assigns.
"Lien" shall mean any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or security
agreement of any kind or nature whatsoever (including, without limitation, the
interest of a vendor or lessor under any conditional sale, Capital Lease, or
other title retention agreement).
"Pledged Debt" shall have the meaning set forth in Section 2 of this
Agreement.
"UCC" shall mean the Uniform Commercial Code as the same may, from time
to time, be in effect in the State of Illinois; provided, however, in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of the Agent's and the Holders of Guaranteed Obligations'
security interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of Illinois, the term "UCC"
shall mean the Uniform Commercial Code as in effect in such other jurisdiction
for purposes of the provisions hereof relating to such attachment, perfection or
priority and for purposes of definitions related to such provisions.
SECTION 2. Grant of Security. To secure the prompt and complete
payment, observance and performance of the Guaranteed Obligations, the Grantor
hereby assigns and
2
<PAGE>
pledges to the Agent, for the benefit of itself and the Holders of Guaranteed
Obligations, and hereby grants to the Agent, for the benefit of itself and the
Holders of Guaranteed Obligations, a security interest in all of the Grantor's
right, title and interest in and to the following, whether now owned or existing
or hereafter arising or acquired and wheresoever located:
ACCOUNTS: All "accounts" as such term is defined in Section 9-106 of
the UCC, whether now owned or hereafter acquired or arising; the Grantor intends
that the term "accounts", as used herein, be construed in its broadest sense,
and such term shall include, without limitation, all present and future
accounts, accounts receivable and other rights of the Grantor to payment for
goods sold or leased or for services rendered (except those evidenced by
instruments or chattel paper), whether now existing or hereafter arising and
wherever arising, and whether or not they have been earned by performance
(collectively, "Accounts");
INVENTORY: All "inventory" as defined in Section 9-109(4) of the UCC,
whether now owned or hereafter acquired or arising; the Grantor intends that the
term "inventory", as used herein, be construed in its broadest sense, and such
term shall include, without limitation, all goods now owned or hereafter
acquired by the Grantor (wherever located, whether in the possession of the
Grantor or of a bailee or other person for sale, storage, transit, processing,
use or otherwise and whether consisting of whole goods, spare parts, components,
supplies, materials, or consigned, returned or repossessed goods) which are held
for sale or lease, which are to be furnished (or have been furnished) under any
contract of service or which are raw materials, work in process or materials
used or consumed in the Grantor's business (collectively, "Inventory");
EQUIPMENT: All "equipment" as such term is defined in Section 9-109(2)
of the UCC, whether now owned or hereafter acquired or arising; the Grantor
intends that the term "equipment", as used herein, be construed in its broadest
sense, and such term shall include, without limitation, all machinery, all
manufacturing, distribution, selling, data processing and office equipment, all
furniture, furnishings, appliances, tools, tooling, molds, dies, and all other
goods of every type and description (other than Inventory), in each instance
whether now owned or hereafter acquired by the Grantor and wherever located
(collectively, "Equipment"), but in no case shall include fixtures located on
real property subject to "Permitted Liens" (as defined in the Credit
Agreements);
GENERAL INTANGIBLES: All "general intangibles" as defined in Section
9-106 of the UCC, whether now owned or hereafter acquired or arising; the
Grantor intends that the term "general intangibles", as used herein, be
construed in its broadest sense, and such term shall include, without
limitation, all rights, interests, choses in action, causes of actions, claims
and all other intangible property of the Grantor of every kind and nature (other
than Accounts), in each instance whether now owned or hereafter acquired by the
Grantor and however and whenever arising, including, without limitation, all
corporate and other business records; all loans, royalties, and other
obligations receivable; customer lists, credit files, correspondence, and
advertising materials; firm sale orders, other contracts and contract rights;
all interests in partnerships and joint ventures; all tax refunds and tax refund
claims; all right, title and interest under leases, subleases, licenses and
concessions and other agreements relating to real or personal property; all
payments due or made to the Grantor in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of any property by any person
or governmental
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authority; all deposit accounts (general or special) with any bank or other
financial institution, including, without limitation, any deposits or other sums
at any time credited by or due to the Grantor from any of the Holders of
Guaranteed Obligations or any of their respective Affiliates with the same
rights therein as if the deposits or other sums were credited by or due from
such Holder of Guaranteed Obligations; all credits with and other claims against
carriers and shippers; all rights to indemnification; all patents, and patent
applications (including all reissues, divisions, continuations and extensions);
all service marks and service mark applications; all trade secrets and
inventions; all copyrights and copyright applications (including all computer
software and related documentation); all rights and interests in and to
trademarks, trademark registrations and applications therefor, trade names,
corporate names, brand names, slogans, all goodwill associated with the
foregoing; all license agreements and franchise agreements, all reversionary
interests in pension and profit sharing plans and reversionary, beneficial and
residual interest in trusts; all proceeds of insurance of which the Grantor is
beneficiary; and all letters of credit, guaranties, liens, security interests
and other security held by or granted to the Grantor; and all other intangible
property, whether or not similar to the foregoing;
LAB PROCESSING AND ENGINEERING INFORMATION: All rights and interests in
and to processes, lab journals, and notebooks, data, trade secrets, know-how,
product formulae and information, manufacturing, engineering and other drawings
and manuals, technology, blueprints, research and development reports, agency
agreements, technical information, technical assistance, engineering data,
design and engineering specifications, and similar materials recording or
evidencing expertise used in or employed by the Grantor (including any license
for the foregoing);
CONTRACT RIGHTS: All rights and interests in and to any pending or
executory contracts, requests for quotations, invitations for bid, agreements,
leases and arrangements of which the Grantor is a party to or in which the
Grantor has an interest;
CHATTEL PAPER, INSTRUMENTS AND DOCUMENTS: All chattel paper, leases,
all instruments, including, without limitation, the notes and debt instruments
described in SCHEDULE 3 (the "Pledged Debt") and all payments thereunder and
instruments and other property from time to time delivered in respect thereof or
in exchange therefor, and all bills of sale, bills of lading, warehouse receipts
and other documents of title, in each instance whether now owned or hereafter
acquired by the Grantor;
INTEREST AND CURRENCY CONTRACTS: Any and all interest rate or currency
exchange agreements or derivative agreements, including without limitation, cap,
collar, floor, forward or similar agreements or other rate protection
arrangements;
INVESTMENT PROPERTY: Any and all investment property (as defined in
Section 9-115(1)(f) of the UCC) of the Grantor, including any instruments,
certificates of deposit, equity interests or investments of any kind; and
OTHER PROPERTY: All property or interests in property now owned or
hereafter acquired by the Grantor which now may be owned or hereafter may come
into the possession, custody or control of the Agent or any of the Holders of
Guaranteed Obligations or any agent or Affiliate of any of them in any way and
for any purpose (whether for safekeeping,
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deposit, custody, pledge, transmission, collection or otherwise); and all rights
and interests of the Grantor, now existing or hereafter arising and however and
wherever arising, in respect of any and all (i) notes, drafts, letters of
credit, stocks, bonds, and debt and equity securities, whether or not
certificated, investment property and warrants, options, puts and calls and
other rights to acquire or otherwise relating to the same; (ii) money; (iii)
proceeds of loans including, without limitation, loans made under the Credit
Agreements; and (iv) insurance proceeds and books and records relating to any of
the property covered by this Agreement; together, in each instance, with all
accessions and additions thereto, substitutions therefor, and replacements,
proceeds and products thereof.
The Collateral upon which the Agent has been granted a Lien hereunder
shall not include property and rights in property subject to "Permitted Liens"
(as defined in the Credit Agreements) so long as such property and rights in
property are subject to such Permitted Liens.
SECTION 3. [RESERVED].
SECTION 4. Grantor Remains Liable. Anything herein to the contrary
notwithstanding, (a) the Grantor shall remain solely liable under the contracts
and agreements included in the Collateral to the extent set forth therein to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by the Agent of any of
its rights hereunder shall not release the Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral, and
(c) neither the Agent nor the Holders of Guaranteed Obligations shall have any
responsibility, obligation or liability under the contracts and agreements
included in the Collateral by reason of this Agreement, nor shall the Agent or
the Holders of Guaranteed Obligations be required or obligated, in any manner,
to (i) perform or fulfill any of the obligations or duties of the Grantor
thereunder, (ii) make any payment, or make any inquiry as to the nature or
sufficiency of any payment received by the Grantor or the sufficiency of any
performance by any party under any such contract or agreement or (iii) present
or file any claim, or take any action to collect or enforce any claim for
payment assigned hereunder.
SECTION 5. Representations and Warranties. The Grantor represents and
warrants, as of the date of this Agreement and as of each date hereafter (except
for changes permitted or contemplated by this Agreement) until termination of
this Agreement pursuant to Section 25:
(a) The correct corporate name of the Grantor is set forth in the first
paragraph of this Agreement. The locations listed on SCHEDULE 1 constitute all
locations at which Inventory and/or Equipment is located and the Grantor has
exclusive possession and control of such Equipment and Inventory, except for (i)
such Inventory and Equipment which is (A) temporarily in transit between such
locations, or (B) temporarily stored with third parties or held by third parties
for processing, storage, engineering, evaluation or repairs, the proper
corporate names of which third parties, the location of such Inventory and/or
Equipment, and the nature of the relationship between the Grantor and such third
parties are set forth on SCHEDULE 1-A, as such SCHEDULE 1-A may be amended or
supplemented from time to time, or have been otherwise provided to the Agent,
(ii) Equipment sold to and subsequently repurchased from a third party by the
Grantor for the period beginning on the date of such repurchase and ending on
the date of the
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re-sale of such Equipment to a different third party, (iii) Equipment
transferred from a third party to the Grantor (such Equipment, "Trade-In
Equipment") in partial satisfaction of the purchase price for Equipment sold by
the Grantor to such third party for the period beginning on the date of the
transfer of such Trade-In Equipment and ending on the date the Grantor sells
such Trade-In Equipment, and (iv) Equipment used by the Grantor in connection
with demonstrations to prospective purchasers of such Equipment; provided, that
the aggregate value of the Equipment described in clauses (ii), (iii), and (iv)
does not exceed $10,000,000. The chief place of business and chief executive
office of the Grantor are located at the address of the Grantor set forth below
the Grantor's signature to this Agreement. All records concerning any Accounts
and all originals of chattel paper which evidence any Account are located at the
addresses listed on SCHEDULE 1 and none of the Accounts is evidenced by a
promissory note or other instrument except for such notes and other instruments
delivered to the Agent.
(b) The Grantor is the legal and beneficial owner of the Collateral
free and clear of all Liens except for Liens permitted as of the date hereof
under the Credit Agreements and the Note Agreements. The Grantor currently
conducts business under the name Ag-Chem Equipment Canada, Ltd., and, in certain
areas and for certain operations, the additional trade names listed on SCHEDULE
2. The Grantor uses no trade names or fictitious names, except as set forth on
SCHEDULE 2.
(c) This Agreement creates in favor of the Agent a legal, valid and
enforceable security interest in the Collateral. When financing statements have
been filed in the appropriate offices against the Grantor in the locations
listed on SCHEDULE 1-B, the Agent will have a fully perfected first priority
lien on, and security interest in, the Collateral in which a security interest
may be perfected by such filing, subject only to Liens permitted as of the date
hereof under the Credit Agreements and the Note Agreements.
(d) No authorization, approval or other action by, and no notice to or
filing with, any Governmental Authority that has not already been taken or made
and is in full force and effect is required (i) for the grant by the Grantor of
the security interest in the Collateral granted hereby; (ii) for the execution,
delivery or performance of this Agreement by the Grantor; or (iii) for the
exercise by the Agent of any of its rights or remedies hereunder.
(e) The Pledged Debt issued by any Affiliate of the Grantor, and to the
best of the Grantor's knowledge, all other Pledged Debt, has been duly
authorized, issued and delivered, and is the legal, valid, binding and
enforceable obligation of the respective issuer thereof.
SECTION 6. Perfection and Maintenance of Security Interests and Liens.
The Grantor agrees that until all of the Guaranteed Obligations (other than
contingent indemnity obligations) have been fully satisfied and each of the
Guarantees has been terminated, the Agent's security interests in and Liens on
and against the Collateral and all proceeds and products thereof shall continue
in full force and effect. The Grantor shall perform any and all steps reasonably
requested by the Agent to perfect, maintain and protect the Agent's security
interests in and Liens on and against the Collateral granted or purported to be
granted hereby or to enable the Agent to exercise its rights and remedies
hereunder with respect to any Collateral, including, without limitation, (i)
executing and filing financing or continuation statements, or
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amendments thereof, in form and substance reasonably satisfactory to the Agent,
(ii) delivering to the Agent all certificates, notes, and other instruments
(including, without limitation, all letters of credit on which the Grantor is
named as a beneficiary) representing or evidencing Collateral, which
certificates, notes, and other instruments have been duly endorsed or are
accompanied by duly executed instruments of transfer or assignment, including,
but not limited to, note powers, all in form and substance satisfactory to the
Agent, (iii) at the reasonable direction of Agent, delivering to the Agent
warehouse receipts covering that portion of the Collateral, if any, located in
warehouses and for which warehouse receipts are issued, (iv) after the
occurrence and during the continuance of an Event of Default, transferring
Inventory and Equipment to warehouses designated by the Agent or taking such
other steps as are reasonably deemed necessary by the Agent to maintain the
Agent's control of the Inventory and Equipment, (v) upon the reasonable request
of the Agent, marking conspicuously each document, contract, chattel paper and
all records pertaining to the Collateral with a legend, in form and substance
satisfactory to the Agent, indicating that such document, contract, chattel
paper, or other record pertaining to the Collateral is subject to the security
interest granted hereby, (vi) obtaining waivers of Liens and access agreements
in substantially the following forms: (a) EXHIBIT A-1 hereto (or such other form
as may be agreed to by the Agent) from landlords with respect to all leases
executed after the date hereof, (b) EXHIBIT A-2 hereto (or such other form as
may be agreed to by the Agent) from mortgagees with respect to all leases
executed after the date hereof and (3) EXHIBIT B hereto (or such other form as
may be agreed to by the Agent) from the appropriate Person with respect to all
arrangements pursuant to which Inventory will be stored in public warehouse
facilities after the date hereof, and (vii) executing and delivering all further
instruments and documents, and taking all further action, as the Agent may
reasonably request.
SECTION 7. Financing Statements. To the extent permitted by applicable
law, the Grantor hereby authorizes the Agent to file one or more financing or
continuation statements and amendments thereto, disclosing the security interest
granted to the Agent under this Agreement without the Grantor's signature
appearing thereon, and the Agent agrees to notify the Grantor when such a filing
has been made. The Grantor agrees that a carbon, photographic, photostatic, or
other reproduction of this Agreement or of a financing statement is sufficient
as a financing statement. If any Inventory or Equipment is in the possession or
control of any warehouseman or the Grantor's agents or processors, the Grantor
shall, upon the Agent's request, notify such warehouseman, agent or processor of
the Agent's security interest in such Inventory and Equipment and, upon the
Agent's request, instruct them to hold all such Inventory or Equipment for the
Agent's account and subject to the Agent's instructions.
SECTION 8. Filing Costs. The Grantor shall pay the costs of, or
incidental to, all recordings or filings of all financing statements, including,
without limitation, any filing expenses incurred by the Agent pursuant to
Section 7.
SECTION 9. Schedule of Collateral. The Grantor shall furnish to the
Agent from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the Agent may reasonably request, all in reasonable detail.
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SECTION 10. Equipment and Inventory. The Grantor covenants and agrees
with the Agent that from the date of this Agreement and until termination of
this Agreement pursuant to Section 25, the Grantor shall:
(a) Keep the Equipment and Inventory (other than Equipment or Inventory
sold or disposed of as permitted by the Credit Agreements and the Note
Agreements) at the places specified in Section 5(a), except for (i) Equipment
and Inventory (A) temporarily in transit between such locations or (B)
temporarily stored with the third parties or held by third parties for
processing, storage, engineering, evaluation, or repairs as set forth on
SCHEDULE 1-A, and deliver written notice to the Agent at least thirty (30) days
prior to establishing any other location at which it reasonably expects to
maintain Inventory and/or Equipment in which location or with which third party
all action required by this Agreement shall have been taken with respect to all
such Equipment and Inventory, (ii) Equipment sold to and subsequently
repurchased from a third party by the Grantor for the period beginning on the
date of such repurchase and ending on the date of the re-sale of such Equipment
to a different third party, (iii) Equipment transferred from a third party to
the Grantor (such Equipment, "Trade-In Equipment") in partial satisfaction of
the purchase price for Equipment sold by the Grantor to such third party for the
period beginning on the date of the transfer of such Trade-In Equipment and
ending on the date the Grantor sells such Trade-In Equipment and (iv) Equipment
used by the Grantor in connection with demonstrations to prospective purchasers
of such Equipment; provided, that the aggregate value of the Equipment described
in clauses (ii), (iii) and (iv) does not exceed $10,000,000;
(b) Maintain or cause to be maintained in good repair, working order,
and condition, excepting ordinary wear and tear and damage due to casualty, all
of the Equipment, and make or cause to be made all appropriate repairs, renewals
and replacements thereof, as quickly as practicable after the occurrence of any
loss or damage thereto which are necessary or desirable to such end; and
(c) Comply with the terms of the Credit Agreements and the Note
Agreements with respect to such Equipment and Inventory, including, without
limitation, the maintenance and insurance provisions set forth in Section 5.1(c)
of each of the Credit Agreements.
SECTION 11. Accounts. The Grantor covenants and agrees with the Agent
that from and after the date of this Agreement and until termination of this
Agreement pursuant to Section 25, the Grantor:
(a) Shall keep its chief place of business and chief executive office
and the office where it keeps its records concerning the Accounts at its address
set forth below the Grantor's signature on this Agreement, and keep the offices
where it keeps all originals of all chattel paper which evidence Accounts at the
locations therefor specified in Section 5(a) or, upon thirty (30) days' prior
written notice to the Agent, at such other locations within the United States in
a jurisdiction where all actions required by Section 6 shall have been taken
with respect to the Accounts. The Grantor will hold and preserve such records
(in accordance with the Grantor's usual document retention practices) and
chattel paper and will permit representatives of the Agent at any time during
normal business hours to inspect and make abstracts from such records and
chattel paper;
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(b) Shall in any suit, proceeding or action brought by the Agent under
any Account comprising part of the Collateral, the Grantor will save, indemnify
and keep each of the Holders of Guaranteed Obligations harmless from and against
all expenses, loss or damage suffered by reason of any defense, setoff,
counterclaim, recoupment or reduction of liability whatsoever of the obligor
thereunder, arising out of a breach by the Grantor of any obligation or arising
out of any other agreement, indebtedness or liability at any time owing to or in
favor of such Holder of Guaranteed Obligations from the Grantor, and all such
obligations of the Grantor shall be and shall remain enforceable against and
only against the Grantor and shall not be enforceable against any of the Holders
of Guaranteed Obligations; and
(c) Shall not sell, transfer assign or encumber any account,
instrument, or chattel paper other than pursuant to the terms of the Credit
Agreements and the Note Agreements.
SECTION 12. Leased Real Property. The Grantor covenants and agrees with
the Agent that from and after the date of this Agreement and until termination
of this Agreement pursuant to Section 25, that:
(a) Promptly following, but not later than ninety (90) days after, the
close of each fiscal year the Grantor will furnish to the Agent a report
certified to be true and correct by the Grantor containing a list of each of the
Grantor's leased premises; the name or names of all owners; rentals being paid;
and whether the Grantor has obtained waivers of Liens and access agreements from
landlords with respect to such premises in accordance with Section 6; and
(b) The Grantor agrees that, after the occurrence and during the
continuation of an Event of Default, the Agent may, but need not, make any
payment or perform any act hereinbefore required of the Grantor with respect to
the Grantor's leased premises in any form and manner deemed expedient. All money
paid for any of the purposes herein authorized and all other moneys advanced by
the Agent to protect the lien hereof shall be additional Guaranteed Obligations
secured hereby and shall become immediately due and payable without notice and
shall bear interest thereon at the default interest rate as provided in the
Credit Agreement until paid to the Agent in full.
(c) The Grantor agrees that it will not amend any lease in a manner
that has a material adverse affect on the interests of the Holders of Guaranteed
Obligations without the Agent's prior written consent.
SECTION 13. General Covenants. The Grantor covenants and agrees with
the Agent that from and after the date of this Agreement and until termination
of this Agreement pursuant to Section 25, the Grantor shall:
(a) Keep and maintain at the Grantor's own cost and expense
satisfactory and complete records of the Grantor's Collateral in a manner
consistent with the Grantor's current business practice, including, without
limitation, a record of all payments received and all credits granted with
respect to such Collateral. The Grantor shall, for the Agent's further security,
deliver and turn over to the Agent or the Agent's designated representatives at
any time following the occurrence and during the continuation of an Event of
Default, any such books and records (including, without limitation, any and all
computer tapes, programs and source and
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object codes relating to such Collateral in which the Grantor has an interest or
any part or parts thereof); and
(b) The Grantor will not create, permit or suffer to exist, and will
defend the Collateral against, and take such other action as is necessary to
remove, any Lien on such Collateral other than Liens permitted as of the date
hereof under the Credit Agreements and the Note Agreements, and will defend the
right, title and interest of the Agent in and to the Grantor's rights to such
Collateral, including, without limitation, the proceeds and products thereof,
against the claims and demands of all Persons whatsoever.
SECTION 14. The Agent Appointed Attorney-in-Fact. The Grantor hereby
irrevocably appoints the Agent as the Grantor's attorney-in-fact, with full
authority in the place and stead of the Grantor and in the name of the Grantor
or otherwise, following the occurrence and during the continuation of an Event
of Default, in the Agent's discretion, to take any action and to execute any
instrument which the Agent may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation, to:
(i) obtain and adjust insurance required to be paid to the
Agent or any Holders of Guaranteed Obligations pursuant to the Credit
Agreements and the Note Agreements;
(ii) ask, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
(iii) receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (i)
or (ii) above; and
(iv) file any claims or take any action or institute any
proceedings which the Agent may deem necessary or desirable for the
collection of any of the Collateral, or otherwise to enforce the rights
of the Agent with respect to any of the Collateral;
In addition, the Agent may at any time:
(i) obtain access to records maintained for the Grantor by
computer services companies and other service companies or bureaus;
(ii) send requests under the Grantor's, the Agent's or a
fictitious name to the Grantor's customers or account debtors for
verification of Accounts provided that the Agent gives the Grantor
notice prior to initiating any such verifications; and
(iii) do all other things reasonably necessary to carry out
this Agreement.
SECTION 15. The Agent May Perform. If the Grantor fails to perform any
agreement contained herein, in the Guarantees, in the Credit Agreements or in
the Note Agreements, the Agent may, upon three days' prior notice to the
Grantor, perform, or cause
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performance of, such agreement, and the expenses of the Agent incurred in
connection therewith shall be payable by the Grantor under Section 22.
SECTION 16. The Agent's Duties. The powers conferred on the Agent
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the safe custody
of any Collateral in its possession and the accounting for moneys actually
received by it hereunder, the Agent shall not have any duty as to any
Collateral. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession if the Collateral
is accorded treatment substantially equal to that which the Agent accords its
own property, it being understood that the Agent shall be under no obligation to
take any necessary steps to preserve rights against prior parties or any other
rights pertaining to any Collateral, but may do so at its option, and all
reasonable expenses incurred in connection therewith shall be for the sole
account of the Grantor and shall be added to the Guaranteed Obligations.
SECTION 17. Remedies. (a) If any Event of Default shall have occurred
and be continuing:
(i) The Agent shall have, in addition to other rights and
remedies provided for herein or otherwise available to it, all the
rights and remedies of a secured party upon default under the UCC
(whether or not the UCC applies to the affected Collateral) and
further, the Agent may, without notice, demand or legal process of any
kind (except as may be required by law), all of which the Grantor
waives, at any time or times, (x) enter the Grantor's owned or leased
premises where Collateral is located and take physical possession of
the Collateral and maintain such possession on the Grantor's owned or
leased premises, at no cost to the Agent or any of the Holders of
Guaranteed Obligations, or remove the Collateral, or any part thereof,
to such other place(s) as the Agent may desire, (y) require the Grantor
to, and the Grantor hereby agrees that it will at its expense and upon
request of the Agent forthwith, assemble all or any part of the
Collateral as directed by the Agent and make it available to the Agent
at a place to be designated by the Agent which is reasonably convenient
to the Agent and (z) without notice except as specified below, sell,
lease, assign, grant an option or options to purchase or otherwise
dispose of the Collateral or any part thereof at public or private
sale, at any exchange, broker's board or at any of the offices of the
Agent or elsewhere, for cash, on credit or for future delivery, and
upon such other terms as the Agent may deem commercially reasonable.
The Grantor agrees that, to the extent notice of sale shall be required
by law, at least ten (10) days' notice to the Grantor of the time and
place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Agent shall not
be obligated to make any sale of Collateral regardless of notice of
sale having been given. The Agent may adjourn any public or private
sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned;
(ii) The Agent shall apply all cash proceeds received by the
Agent in respect of any sale of, collection from, or other realization
upon all or any part of the Collateral (after payment of any amounts
payable to the Agent pursuant to Section 22), for the benefit of the
Holders of Guaranteed Obligations, against all or any part of the
Guaranteed Obligations in such order as may be required by the
Collateral Sharing Agreement, or, to the extent not specified therein,
as is determined by the Holders of Guaranteed Obligations, and, with
respect to the application of such proceeds subsequent to the
satisfaction of the conditions set forth in the Collateral Sharing
Agreement or as agreed to by the Holders of
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Guaranteed Obligations, as applicable, in such order as may be required
under each Guarantee with respect to amounts remitted to the entity in
whose favor such Guarantee runs. Any surplus of such cash or cash
proceeds held by the Agent and remaining after payment in full of all
the Guaranteed Obligations shall be paid over to the Grantor or to
whomsoever may be lawfully entitled to receive such surplus;
(b) The Grantor waives all claims, damages and demands against the
Agent arising out of the repossession, retention or sale of any of the
Collateral or any part or parts thereof, except any such claims, damages and
awards arising out of the gross negligence or willful misconduct of the Agent or
any of the Holders of Guaranteed Obligations, as the case may be, as determined
in a final non-appealed judgment of a court of competent jurisdiction; and
(c) The rights and remedies provided under this Agreement are
cumulative and may be exercised singly or concurrently and are not exclusive of
any rights and remedies provided by law or equity.
SECTION 18. Exercise of Remedies. In connection with the exercise of
its remedies pursuant to Section 17, the Agent may, (i) exchange, enforce, waive
or release any portion of the Collateral and any other security for the
Guaranteed Obligations; (ii) apply such Collateral or security and direct the
order or manner of sale thereof as the Agent may, from time to time, determine;
and (iii) settle, compromise, collect or otherwise liquidate any such Collateral
or security in any manner following the occurrence and during the continuation
of an Event of Default, without affecting or impairing the Agent's right to take
any other further action with respect to any Collateral or security or any part
thereof.
SECTION 19. License. The Agent is hereby granted a license or other
right to use, following the occurrence and during the continuance of an Event of
Default, without charge, (a) the Grantor's labels, patents, copyrights, trade
secrets, trade names, trademarks, service marks, customer lists and advertising
matter, or any property of a similar nature, as it pertains to the Collateral,
in completing production of, advertising for sale, and selling any Collateral,
provided that the Agent uses quality standards at least substantially equivalent
to those of the Grantor for the manufacture, advertising, sale and distribution
of the Grantor's products and services and (b) the Grantor's rights under all
licenses.
SECTION 20. Injunctive Relief. The Grantor recognizes that in the event
the Grantor fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, any remedy of law may prove to be inadequate
relief to the Holders of Guaranteed Obligations; therefore, the Grantor agrees
that the Agent shall be entitled to temporary and permanent injunctive relief in
any such case without the necessity of proving actual damages.
SECTION 21. Interpretation and Inconsistencies; Merger. (a) The rights
and duties created by this Agreement shall, in all cases, be interpreted
consistently with, and shall be in addition to (and not in lieu of), the rights
and duties created by the Guarantees, the Collateral Sharing Agreement, and the
other Loan Documents. In the event that any provision of this Agreement shall be
inconsistent with any provision of any other Loan Document, such provision of
the other Loan Document shall govern.
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(b) Except as provided in subsection (a) above, this Agreement
represents the final and entire agreement of the Grantor and the Agent with
respect to the matters contained herein.
SECTION 22. Expenses. The Grantor will upon demand pay to the Agent the
amount of any and all reasonable expenses, including the reasonable fees and
disbursements of its counsel and of any experts and agents, as provided in the
Credit Agreements, the Note Agreements, and/or the Collateral Sharing Agreement.
SECTION 23. Amendments, Etc. No amendment or waiver of any provision of
this Agreement nor consent to any departure by the Grantor herefrom shall in any
event be effective unless the same shall be in writing and signed by the Agent
(in accordance with the Collateral Sharing Agreement) and the Grantor, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
SECTION 24. Notices. All notices and other communications provided for
hereunder shall be delivered in the manner set forth in Section 8.2 of each of
the Credit Agreements.
SECTION 25. Continuing Security Interest; Termination. (a) Except as
provided in Section 25(b), this Agreement shall create a continuing security
interest in the Collateral and shall (i) remain in full force and effect until
the later of the payment or satisfaction in full of the Guaranteed Obligations
(other than contingent indemnity obligations) and the termination of each of the
Guarantees, (ii) be binding upon the Grantor, its successors and assigns and
(iii) except to the extent that the rights of any transferor or assignor are
limited by the terms of each of the Guarantees, inure, together with the rights
and remedies of the Agent hereunder, to the benefit of the Agent and any of the
Holders of Guaranteed Obligations. Nothing set forth herein or in any other Loan
Document is intended or shall be construed to give any other Person any right,
remedy or claim under, to or in respect of this Agreement or any other Loan
Document or any Collateral. The Grantor's successors and assigns shall include,
without limitation, a receiver, trustee or debtor-in-possession thereof or
therefor.
(b) The security interest granted hereby shall terminate and all rights
to the Collateral shall revert to the Grantor on the earlier of the date on
which (i) the Agent shall have received from each Holder of Guaranteed
Obligations written notice that all "Obligations" (as defined in the Collateral
Sharing Agreement) owing to such Holder of Guaranteed Obligations have been paid
in full or (ii) the Agent shall have received written notice from the Holders of
Guaranteed Obligations directing the Agent to release the Collateral and stating
that the Holders of Guaranteed Obligations have consented to such release under
the terms of the Credit Agreements, the Note Agreements and the Guarantees
provided, that no such termination shall occur prior to the payment in full of
all of the Agent's "Expenses" (as defined in the Collateral Sharing Agreement).
Upon the termination of the security interest, the Grantor shall be entitled to
the prompt return, upon its request and at its expense, of such of the
Collateral held by the Agent as shall not have been sold or otherwise applied
pursuant to the terms hereof and the Agent will, at the Grantor's expense,
promptly execute and deliver to the Grantor such other documents as the Grantor
shall reasonably request to evidence such termination. In connection with any
sales of assets permitted under the Credit Agreements and the Note Agreements,
the
13
<PAGE>
Agent will promptly release and terminate the liens and security interests
granted under this Agreement with respect to such assets.
SECTION 26. Severability. Any provision in this Agreement that is held
to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to
that jurisdiction, be inoperative, unenforceable, or invalid without affecting
the remaining provisions in that jurisdiction or the operation, enforceability,
or validity of that provision in any other jurisdiction, and to this end the
provisions of this Agreement are declared to be severable.
SECTION 27. GOVERNING LAW. ANY DISPUTE BETWEEN THE GRANTOR AND THE
AGENT ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT, AND
WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN
ACCORDANCE WITH THE LAWS (INCLUDING 735 ILCS SECTION 105/5-1 ET SEQ. BUT
OTHERWISE WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES) OF THE STATE OF
ILLINOIS.
SECTION 28. CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.
(A) NON-EXCLUSIVE JURISDICTION. EACH OF THE PARTIES HERETO AGREES THAT
ALL DISPUTES BETWEEN THEM ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS
AGREEMENT WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, MAY BE
RESOLVED NON-EXCLUSIVELY BY STATE OR FEDERAL COURTS LOCATED IN CHICAGO,
ILLINOIS, BUT THE PARTIES HERETO ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS
MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF CHICAGO, ILLINOIS. EACH OF
THE PARTIES HERETO WAIVES IN ALL DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION
(A) ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE
DISPUTE.
(B) VENUE. THE GRANTOR IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH
IN ANY JURISDICTION SET FORTH IN PARAGRAPH (A) ABOVE.
(C) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH. EACH OF THE PARTIES
14
<PAGE>
HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO
MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.
15
<PAGE>
IN WITNESS WHEREOF, the Grantor has caused this Agreement to
be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
AG-CHEM EQUIPMENT CANADA, LTD.
By: /s/ John Retherford
-------------------------------------
Name: John Retherford
Title: CFO
Address: 5720 Smetana Drive
Minnetonka, MN 55343
Facsimile No.: (612) 939-4405
BANK ONE, NA, having its principal office
in Chicago, Illinois, formerly known as
The First National Bank of Chicago, as
Agent
By: /s/ Kevin Gillen
-------------------------------------
Name: Kevin Gillen
Title: Vice President
Guarantor Security Agreement Signature Page
<PAGE>
EXHIBIT A-1
to
Guarantor Security Agreement
Form of Landlord Agreement
Bank One, NA
1 Bank One Plaza
Chicago, IL 60670
Attention: Jenny Gilpin
Ladies and Gentlemen:
Ag-Chem Equipment Canada, Ltd., ("Grantor"), the lessee under that
certain lease dated _________________ between the Grantor, and the undersigned,
covering certain premises owned by the undersigned and located at ______________
(the "Premises") more fully described in the lease attached hereto as Exhibit A
(the "Lease"). Grantor has certain of its assets located on the Premises.
Grantor has entered into certain financing arrangements with a group of
lenders ("Lenders") including Bank One, NA, as contractual representative for
the Lenders (the "Agent") and the Agent and the Lenders require, among other
things, that Grantor grant liens in favor of the Agent for the benefit of itself
and the Lenders on all of Grantor's property located on the Premises
("Collateral").
To induce the Agent and the Lenders (together with their respective
agents, successors and assigns) to continue said financing arrangements, and for
other good and valuable consideration, the undersigned hereby agrees that:
(i) it will not assert against any of Grantor's assets any
statutory or possessory liens, including, without limitation, rights of
levy or distraint for rent, all of which it hereby waives;
(ii) none of the Collateral located on the Premises shall be
deemed to be fixtures;
(iii) if Grantor defaults on its obligations to the Agent or
any Lender and, as a result, the Agent undertakes to enforce its
security interest in the Collateral, the undersigned will cooperate
with the Agent in its efforts to assemble all of the Collateral located
on the Premises, will permit the Agent to remain on the Premises for
ninety (90) days after the Agent gives the undersigned notice of
default, provided the Agent pays the rental payments due under the
Lease for the period of time the Agent uses the Premises, or, at the
Agent's option, to remove the Collateral from the Premises within a
reasonable time, not to exceed ninety (90) days after the Agent gives
the undersigned notice of default, provided the Agent pays the rental
payments due under the Lease for the period
<PAGE>
of time the Agent uses the Premises, and will not hinder the Agent's
actions in enforcing its liens on the Collateral;
[it will allow the Agent thirty (30) days from the Agent's
receipt of notice in which to cure or cause Grantor to cure any
defaults on Grantor's lease obligations to the undersigned; provided if
such default cannot reasonably be cured within the thirty (30) day
period, and provided the Agent is diligently pursuing a cure, then the
Agent shall have a reasonable period to cure such default;]
[(iv) if, for any reason whatsoever, the undersigned either
deems itself entitled to redeem or to take possession of the Premises
during the term of Grantor's lease or intends to sell or otherwise
transfer all or any part of its interest in the Premises, the
undersigned will notify the Agent five (5) days before taking such
action;]
[(v) the undersigned shall accept performance by the Agent of
the Grantor's obligations under the Lease as though the same had been
performed by the holder of the Grantor's interest therein at the time
of such performance. Upon the cure of any such default, any notice
advising of any default or any action of the undersigned to terminate
the Lease or to interfere with the occupancy, use or enjoyment of the
Premises by reason thereof, which action has not been completed, shall
be deemed rescinded and the Lease shall continue in full force and
effect. The undersigned shall not be required to continue any
possession or continue any action to obtain possession upon the cure of
any such default;]
Any notice(s) required or desired to be given hereunder shall be
directed to the party to be notified at the address stated herein.
The agreements contained herein shall continue in force until all of
Grantor's obligations and liabilities to the Agent and the Lenders are paid and
satisfied in full and all financing arrangements among the Agent, the Lenders
and Grantor have been terminated.
The undersigned will use reasonable efforts to notify all successor
owners, transferees, purchasers and mortgagees of the existence of this waiver.
The agreements contained herein may not be modified or terminated orally and
shall be binding upon the successors, assigns and personal representatives of
the undersigned, upon any successor owner or transferee of the Premises, and
upon any purchasers, including any mortgagee, from the undersigned.
The undersigned agrees that nothing contained in this waiver shall be
construed as an assumption by the Agent or any of the other lenders of any
obligations of Grantor contained in the Lease.
Executed and delivered this ____ day of ____________, at _____________.
THIS WAIVER SHALL NOT IMPAIR OR OTHERWISE AFFECT GRANTOR'S
OBLIGATIONS TO PAY RENT AND ANY OTHER SUMS
2
<PAGE>
PAYABLE BY GRANTOR OR TO OTHERWISE PERFORM ITS OBLIGATIONS TO
THE LESSOR PURSUANT TO THE TERMS OF THE LEASE.
[Name of Lessor]
By:
-------------------------------------
Title:
----------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
AGREED & ACKNOWLEDGED:
[ ]
------------------------------
By:
-------------------------------------
Title:
----------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
3
<PAGE>
EXHIBIT A
to
Landlord Agreement
Lease
(attached hereto)
<PAGE>
EXHIBIT B
to
Landlord Agreement
Leasehold Mortgage
(attached hereto)
<PAGE>
[ACKNOWLEDGMENT (CORPORATE)
STATE OF )
------------------------
)SS
COUNTY OF )
-----------------------
Before me, a Notary Public in and for said County, personally appeared
_____________, a _______________________ corporation, by the ___________________
of such corporation, who acknowledged that (s)he did sign the foregoing
instrument on behalf of said corporation and that said instrument is the
voluntary act and deed of said corporation and his/her voluntary act and deed as
such officer of said corporation.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name and affixed my
official seal this ____ day of ____________, at _____________, ________________.
-----------------------------------------
Notary Public
My Commission Expires:]
(Notarial Seal)
<PAGE>
[ACKNOWLEDGMENT (CORPORATE)
STATE OF )
------------------------
)SS
COUNTY OF )
-----------------------
Before me, a Notary Public in and for said County, personally appeared
_____________, a ______________ corporation, by the ______________________ of
such corporation, who acknowledged that (s)he did sign the foregoing instrument
on behalf of said corporation and that said instrument is the voluntary act and
deed of said corporation and his/her voluntary act and deed as such officer of
said corporation.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name and affixed my
official seal this ____day of ___________, at ________________, _______________.
-----------------------------------------
Notary Public
My Commission Expires:]
(Notarial Seal)
<PAGE>
EXHIBIT A-2
to
Guarantor Security Agreement
Form of Mortgagee Agreement
Bank One, NA
1 Bank One Plaza
Chicago, IL 60670
Attention: Jenny Gilpin
Ladies and Gentlemen:
Ag-Chem Equipment Canada, Ltd.. ("Grantor"), is the lessee under that
certain lease dated _____________ between the Grantor, and ____________________
(the "Landlord[s]"), covering certain premises located at _________________ (the
"Premises") as more fully described on Exhibit A(1) attached hereto (the
"Lease"). The undersigned is the mortgagee under a mortgage between the
Landlord[s] and the undersigned covering the Premises (the "Mortgage"). The
undersigned is the sole mortgagee of the Premises. Grantor has certain of its
assets located on the Premises.
Grantor has entered into certain financing arrangements with a group of
lenders ("Lenders") including Bank One, NA, as contractual representative for
the Lenders (the "Agent") and the Agent and the Lenders require, among other
things, that Grantor grant liens in favor of the Agent for the benefit of itself
and the Lenders on all of Grantor's property located on the Premises
("Collateral").
By its signature below, the undersigned agrees that:
(i) it will not assert against any of the Collateral any
statutory or possessory liens, including, without limitation, rights of
levy or distraint for rent, all of which it hereby waives;
(ii) none of the Collateral located on the Premises shall be
deemed to be fixtures;
[(iii) it will allow the Agent thirty (30) days from the
Agent's receipt of notice in which to cure or cause Grantor to cure any
such defaults on its mortgage obligations; provided if such default
cannot reasonably be cured within the thirty
- ----------------------
(1) Please attach legal description of premises for recordation purposes.
<PAGE>
(30) day period, and provided the Agent is diligently pursuing a cure,
then the Agent shall have a reasonable period to cure such default;]
[(iv) if, for any reason whatsoever, the undersigned either
deems itself entitled to take possession of the Premises during the
term of the Mortgage or intends to sell or otherwise transfer all or
any part of its interest in the Premises, the undersigned will notify
the Agent five (5) days before taking such action;]
(v) if Grantor defaults on its obligations to the Agent or any
Lender and, as a result, the Agent undertakes to enforce its security
interest in the Collateral, the undersigned will cooperate with the
Agent in its efforts to assemble all of the Collateral located on the
Premises, will permit the Agent to remain on the Premises for ninety
(90) days after the Agent gives the undersigned notice of default,
provided the Agent pays the Lease payments to the Landlord[s] due under
the Lease for the period of time the Agent uses the Premises, or, at
the Agent's option, to remove the Collateral from the Premises within a
reasonable time, not to exceed ninety (90) days after the Agent gives
the undersigned notice of default, provided the Agent pays the rental
payments to the Landlord[s] due under the Lease for the period of time
the Agent uses the Premises, and will not hinder the Agent's actions in
enforcing its liens on the Collateral; and
Any notice(s) required or desired to be given hereunder shall be
directed to the party to be notified at the address stated herein.
The agreements contained herein shall continue in force until all of
Grantor's obligations and liabilities to the Agent and the Lenders are paid and
satisfied in full and all financing arrangements among the Agent, the Lenders
and Grantor have been terminated.
The undersigned will notify all successor owners, transferees,
purchasers and mortgagees of the existence of this waiver. The agreements
contained herein may not be modified or terminated orally and shall be binding
upon the successors, assigns and personal representatives of the undersigned,
upon any successor owner or transferee of the Premises, and upon any purchasers,
including any mortgagee, from the undersigned.
[The undersigned consents to the granting of the Leasehold Mortgage to
the Agent and to the liens, security interests and encumbrances created by and
resulting from the Leasehold Mortgage or other documents collateral thereto in
the form attached hereto as Exhibit B.]
The undersigned agrees that nothing contained in this waiver shall be
construed as an assumption by the agent or any of the other lenders of any
obligations of the landlord contained in the mortgage.
Executed and delivered this ____ day of ___________, at ______________.
THIS WAIVER SHALL NOT IMPAIR OR OTHERWISE AFFECT GRANTOR'S
OBLIGATIONS TO PAY RENT AND ANY OTHER SUMS
2
<PAGE>
PAYABLE BY GRANTOR OR TO OTHERWISE PERFORM ITS OBLIGATIONS TO
THE LANDLORD PURSUANT TO THE TERMS OF THE LEASE.
[Name of Mortgagee]
By:
-------------------------------------
Title:
----------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
AGREED & ACKNOWLEDGED:
[ ]
------------------------------
By:
-------------------------------------
Title:
----------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
3
<PAGE>
EXHIBIT A
to
Landlord Agreement
Lease
(attached hereto)
<PAGE>
EXHIBIT B
to
Landlord Agreement
Leasehold Mortgage
(attached hereto)
<PAGE>
STATE OF )
------------------------
)SS
COUNTY OF )
-----------------------
The foregoing letter agreement was acknowledged before me this ___ day
of _____________, by _____________________, a ______________ of _______________,
a ____________________, on behalf of such _________________.
-----------------------------------------
Notary Public
________ County, _____________
My commission expires:_______]
<PAGE>
EXHIBIT B
to
Guarantor Security Agreement
Form of Bailee Letter
To: Bank One, NA
1 Bank One Plaza
Chicago, IL 60670
Attention: Jenny Gilpin
Ladies and Gentlemen:
Ag-Chem Equipment Canada, Ltd. ("Grantor"), now does or hereafter may
store certain of its merchandise, inventory, or other of its personal property
at premises located at _______________ (the "Premises") owned or leased by the
undersigned.
Grantor has entered into certain financing arrangements with a group of
lenders (the "Lenders") including Bank One, NA (the "Agent") and, as a condition
to continuing the loans and other financial accommodations of the Lenders to
Grantor, the Agent and the Lenders require, among other things, that Grantor
grant liens in favor of the Agent for the benefit of the Agent and the Lenders
on all of Grantor's property located on the Premises ("Collateral").
To induce the Agent and the Lenders (together with their respective
agents, successors and assigns) to continue said financing arrangements, and for
other good and valuable consideration, the undersigned hereby agrees that:
(i) it will not assert against any of Grantor's assets any
statutory or possessory liens, including, without limitation, rights of
levy or distraint for rent, all of which it hereby waives;
(ii) the Collateral shall be identifiable as being owned by
Grantor and kept reasonably separate and distinct from other property
in the possession of the undersigned;
(iii) none of the Collateral located on the Premises shall be
deemed to be fixtures; and
(iv) if Grantor defaults on its obligations to the Lenders or
the Agent and, as a result, the Agent undertakes to enforce its
security interest in the Collateral, the undersigned (a) will cooperate
with the Agent in its efforts to assemble all of the Collateral located
on the Premises, (b) will permit the Agent to either remain on the
Premises for ninety (90) days after the Agent gives the undersigned
notice of default or, at the Agent's option, to remove the Collateral
from the Premises within a reasonable time, not to exceed ninety
<PAGE>
(90) days after the Agent gives the undersigned notice of default,
provided in either instance that the Agent leaves the Premises in the
same condition as existed immediately prior to such ninety (90) day
period, and the Agent shall indemnify the undersigned for any damages
arising solely out of its occupancy of the Premises, and (c) will not
hinder the Agent's actions in enforcing its liens on the Collateral.
Any notice(s) required or desired to be given hereunder shall be
directed to the party to be notified at the address stated herein.
The agreements contained herein shall continue in force until all of
Grantor's obligations and liabilities to the Agent and Lenders are paid and
satisfied in full and all financing arrangements among the Agent, the Lenders
and Grantor have been terminated.
The undersigned will notify all successor owners, transferees,
purchasers and mortgagees of the existence of this agreement. The agreements
contained herein may not be modified or terminated orally and shall be binding
upon the successors, assigns and personal representatives of the undersigned,
upon any successor owner or transferee of any of the Premises, and upon any
purchasers, including any mortgagee, from the undersigned.
Executed and delivered this ____ day of ____________, at _____________.
[Name and Address of Bailee]
(By)
-------------------------------------
2
<PAGE>
SCHEDULE 1
to
Guarantor Security Agreement
Locations of Collateral
Attached
<PAGE>
SCHEDULE 1-A
to
Guarantor Security Agreement
Third Party Locations:
<PAGE>
SCHEDULE 1-B
to
Guarantor Security Agreement
Financing Statement Filing Locations:
<PAGE>
SCHEDULE 2
to
Guarantor Security Agreement
Trade Names:
<PAGE>
SCHEDULE 3
to
Guarantor Security Agreement
Pledged Debt:
EXHIBIT 10.26
WAIVER DATED MAY 15, 2000,
BY C.M. MUTUAL LIFE INSURANCE COMPANY
OF CERTAIN DEFAULTS UNDER EXACT TITLE OF AGREEMENT
DATED APRIL 6, 1994
Ag-Chem Equipment Co., Inc.
5720 Smetana Drive, Suite 100
Minnetonka, Minnesota 55342-9688
Attention: Chief Financial Officer
Ladies and Gentlemen:
Reference is made to that certain Note Agreement, dated as of April 6,
1994 (as amended from time to time, the "NOTE AGREEMENT"), between Ag-Chem
Equipment Co., Inc., a Minnesota corporation (the "COMPANY"), and C.M. Life
Insurance Company ("MASS MUTUAL"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Note Agreement.
Pursuant to the request of the Company and in accordance with the
provisions of Section 9.1 of the Note Agreement, the parties hereto agree as
follows:
SECTION 1. Amendments to Note Agreement. From and after the date this
letter becomes effective in accordance with its terms, the Note Agreement is
amended as follows:
1.1. Section 5.1 of the Note Agreement is amended to delete the term
"Indebtedness" presently appearing therein and to add the following defined
terms thereto in appropriate alphabetical order:
"BANKS" means the financial institutions from time to time
constituting the "Lenders" under the Credit Agreement or the Short Term
Credit Agreement.
"CAPITAL EXPENDITURES" means, for any period, the additions to
property, plant and equipment and other capital expenditures of the
Company and its Subsidiaries for such period, as the same are or should
be set forth on the consolidated financial statements of the Company
and its Subsidiaries in accordance with GAAP.
"CASH EQUIVALENTS" means as to any Person, (a) securities
issued or directly and fully guaranteed or insured by the United States
or any agency or instrumentality thereof (provided that the full faith
and credit of the United States is pledged in support thereof) having
maturities of not more than 12 months from the date of acquisition, (b)
time deposits and certificates of deposit of any commercial bank with a
long-term unsecured debt rating of at least A or its equivalent from
Standard & Poor's Ratings Services, a
<PAGE>
division of The McGraw-Hill Companies, Inc., or at least A-2 or its
equivalent from Moody's Investors Service, Inc. with maturities of not
more than six months from the date of acquisition by such person, (c)
repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (a) above
entered into with any bank meeting the qualifications specified in
clause (b) above, (d) commercial paper issued by any person
incorporated in the United States, which commercial paper is rated at
least A-1 or the equivalent thereof by Standard & Poor's Ratings
Services, a division of The McGraw-Hill Companies, Inc., or at least
P-1 or the equivalent thereof by Moody's Investors Service, Inc. or at
least F-1 or the equivalent thereof by Fitch Investor Services, Inc.
and in each case maturing not more than 270 days after the date of
issuance by such person, and (e) investments in money market funds
substantially all the assets of which are comprised of securities of
the types described in clauses (a) through (d) above.
"COLLATERAL AGENT" means Bank One, N.A., in its capacity as
contractual representatives for the Banks, the holders of the Notes and
the holders of the Company's 7.25% Series A Senior Notes due April 6,
2005 under the Collateral Sharing Agreement, and its successors and
assigns in such capacity.
"CONTINGENT LIABILITIES" of any Person means, as of any date,
all obligations of such Person or of others for which such Person is
contingently liable, as obligor, guarantor, surety or in any other
capacity, or in respect of which obligations such Person assures a
creditor against loss or agrees to take any action to prevent any such
loss (other than endorsements of negotiable instruments for collection
in the ordinary course of business), including all reimbursement
obligations and all obligations of such Person to advance funds to, or
to purchase assets, property or services from, any other Person in
order to maintain the financial condition of such other Person.
"COLLATERAL SHARING AGREEMENT" mean that certain Collateral
Sharing Agreement, dated as of May 15, 2000, by and among the
Collateral Agent, Bank One, as contractual representative for the Banks
under the Credit Agreement and the Short Term Credit Agreement, the
Banks, the holders of the Notes and the holders of the Company's 7.25%
Senior Notes, Series A, due April 6, 2005, as amended from time to time
in accordance with the terms thereof.
"CREDIT AGREEMENT" shall mean the Third Amended and Restated
Long Term Revolving Credit Agreement, dated as of June 4, 1999, by and
among the Company, the Multicurrency Subsidiary Borrowers, certain of
the Banks and Bank One N.A., as agent, as amended by Waiver and
Amendment No. 1 thereto dated as of December 22, 1999 and Waiver and
Amendment No. 2 thereto dated May 15, 2000.
"EBITDA" means, for any period, Net Income plus the sum of all
amounts recorded and deducted in computing Net Income for such period
in respect of Interest Expense, taxes, depreciation charges and
2
<PAGE>
expenses and amortization charges and expenses (whether paid or
accrued, or a cash or non-cash expense), as determined in accordance
with GAAP.
"GOVERNMENTAL AUTHORITY" means any federal, state, local,
municipal or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, and any and all
Governmental Regulations (including decrees, rules and orders) of any
governmental bodies and offices having power to regulate or supervise
the business activities of any of the company, a Subsidiary or any
holder of a Note.
"GOVERNMENTAL REGULATIONS" means any and all laws, statues,
ordinances, rules, regulations, treaties, judgments, writs,
injunctions, decrees, orders, awards and standards, or any similar
requirement, of the government of the United States or of any foreign
government or any state, province, municipality or other political
subdivision thereof or therein or any court, agency, instrumentality,
regulatory authority or commission of any of the foregoing.
"GUARANTORS" means Ag-Chem Equipment Co., International Corp.,
Lor*Al Products, Inc., Ag-Chem Equipment Canada, Ltd., Ag-Chem Europe,
B.V., formerly known as Kurstjens Terra-Gator B.V., Ag-Chem Sales Co.,
Inc., a Minnesota corporation, Ag-Chem Manufacturing, Inc., formerly
known as Soil Teq, Inc., a Minnesota corporation, and any other person
or entity that may guarantee the Notes from time to time.
"INDEBTEDNESS" of any Person means (a) all obligations of such
Person for borrowed money, (b) all obligations of such Person as lessee
under any Capitalized Lease, (c) all obligations which are secured by
any Lien existing on any asset or property of such Person whether or
not the obligation secured thereby shall have been assumed by such
Person, (d) the unpaid purchase price for goods, property or services
acquired by such Person, except for accounts payable for goods,
property or services arising in the ordinary course of business that
are not more than sixty (60) days past due, (e) all obligations of such
Person to purchase goods, property or services where payment therefor
is required regardless of whether delivery of such goods or property or
the performance of such services is ever made or tendered (generally
referred to as "take or pay contracts"), (f) all liabilities of such
Person in respect of unfunded benefit liabilities (determined in
accordance with Section 4001(a)(18) of ERISA) under any Plan of such
person or of any ERISA Affiliate and any unfunded current liabilities
with respect to any employee benefit pension plans maintained by such
Person outside the United States, (g) all obligations of such Person in
respect of any interest rate or currency swap, rate cap or other
similar transaction (valued in any amount equal to the highest
termination payment, if any, that would be payable by such Person upon
termination for any reason on the date of determination), and (h) all
Contingent Liabilities of such Person.
"INTEREST COVERAGE RATIO" means the ratio of (a) EBITDA of the
Company and its consolidated Subsidiaries to (b) Interest Expense for
the Company and its Subsidiaries,
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<PAGE>
on a consolidated basis, to be calculated as of the end of each fiscal
quarter of the Company for the four consecutive fiscal quarters then
ending.
"INTEREST EXPENSE" means, for a Person for the applicable
fiscal period, such Person's interest expense (including capitalized
interest accrued during such period) for such period computed in
accordance with GAAP including, without limitation, the portion of any
obligation under a Capitalized Lease allocable to interest expense in
accordance with GAAP.
"LOAN PARTIES" means the Company and the Guarantors.
"MULTICURRENCY SUBSIDIARY BORROWERS" means each of Ag-Chem
Europe, B.V., a Netherlands private limited liability company, and
Ag-Chem Equipment Canada, Ltd., a Minnesota corporation.
"NET INCOME" means, for any period, the net income of the
Company and its consolidated Subsidiaries after taxes, determined in
accordance with GAAP.
"NEW HOLLAND VENTURE" means the joint venture between the
Company and New Holland North America, Inc.
"PERMITTED LIENS" means Liens permitted by Section 7.4.
"SHORT TERM CREDIT AGREEMENT" means the Short Term Revolving
Credit Agreement, dated as of June 4, 1999, by and among the Company,
certain of the Banks and Bank One, N.A., as agent for such Banks, as
amended by Waiver and Amendment No. 1 thereto dated as of December 22,
1999 and Waiver and Amendment No. 2 thereto dated as of May 15, 2000.
"TANGIBLE NET WORTH" means, as of any date, (a) the amount of
any capital stock, paid in capital and similar equity accounts of the
Company and its consolidated Subsidiaries plus (or minus in the case of
a deficit) the capital surplus and retained earnings of the Company and
its consolidated Subsidiaries, minus (b) the amount of any treasury
stock reflected on such balance sheet, minus (c) any amount
attributable to the write-up of assets (other than marketable
securities) on or after September 30, 1998, minus (d) the net book
value of all items of the following character which are included in the
assets of the Company and its consolidated Subsidiaries as of such
date: (i) goodwill, including the excess of cost over book value of any
asset; (ii) organization or experimental expenses; (iii) unamortized
debt discount and expense; (iv) patents, trademarks, trade names and
copyrights; (v) franchises, licenses and permits; (vi) amounts due from
Affiliates and (vii) all other assets which are deemed intangible
assets under GAAP.
4
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"TOTAL LIABILITIES" means, as of the date of determination,
the total liabilities of the Company and its consolidated Subsidiaries
that would properly be classified as a liability under GAAP.
"WORKING CAPITAL COVERAGE RATIO" means the ratio of (a) the
sum of the face amount of the accounts receivable of the Company and
its consolidated Subsidiaries minus the amount of accounts receivable
classified as doubtful determined in accordance with GAAP plus the
value of the inventory of the Company and its consolidated Subsidiaries
valued at the lower of cost or market on a last-in first-out basis
determined in accordance with GAAP to (b) the sum of the principal
amount of the obligations of the Company to the Banks under the Credit
Agreement and the Short Term Credit Agreement plus the outstanding
principal indebtedness of the Company under that certain Note Agreement
dated as of October 10, 1995 with respect to the Company's 7.25% Senior
Notes, Series A, due April 6, 2005 plus the outstanding principal
amount of the Notes.
1.2. Section 7.1 of the Note Agreement is amended in its entirety to
read as follows:
"7.1 Financial Ratios.
(a) Tangible Net Worth. The Company will not permit or suffer
Tangible Net Worth to be, at any time after June 4, 1999, less than the
sum of (i) $57,500,000, plus (ii) the net amount of any proceeds from
the sale of the Company's equity interests received by the Company
after June 4, 1999, plus (iii) fifty percent (50%) of annual Net Income
accumulated from September 30, 1998, beginning with the calculation for
the year ending September 30, 1999; provided, however, that no
deduction will be made for any fiscal year where net income is less
than zero and any loss will not reduce any amount added for any other
fiscal year.
(b) Total Liabilities to Tangible Net Worth. The Company will
not permit or suffer the ratio of Total Liabilities to Tangible Net
Worth to exceed: (1) 2.75 to 1.0 at the end of the fiscal quarter
ending March 31, 2000 or (ii) 2.50 to 1.0 at the end of each fiscal
quarter ending on or after June 30, 2000 and on or prior to March 31,
2001 or (iii) 2.0 to 1.0 at the end of each fiscal quarter ending on or
after June 30, 2001.
(c) Interest Coverage Ratio. The Company will not permit or
suffer the Interest Coverage Ratio to be less than (i) 2.0 to 1.0 for
the fiscal period ending March 31, 2000 or (ii) 1.50 to 1.0 for the
fiscal periods ending June 30, 2000, September 30, 2000 and December
31, 2000 or (iii) 2.0 to 1.0 for the fiscal period ending March 31,
2001 or (iv) 2.25 to 1.0 for the fiscal period ending June 30, 2001 or
(v) 2.5 to 1.0 for the fiscal periods ending September 30, 2001,
December 31, 2001, March 31, 2002 and June 30, 2002 or (vi) 3.25 to 1.0
for the fiscal periods ending September 30, 2002, December 31, 2002,
March 31, 2003
5
<PAGE>
and June 30, 2003 or (vii) 3.5 to 1.0 for each fiscal period ending as
of the end of each fiscal quarter ending on or after September 30,
2003.
(d) Working Capital Coverage Ratio. The Company will not
permit or suffer the Working Capital Coverage Ratio to be less than
1.30 to 1.0 as of the end of any fiscal quarter."
1.3. Section 7.2 of the Note Agreement is amended in its entirety to
read as follows:
"7.2 Indebtedness. The Company will not, and will not permit
any Subsidiary to, create, incur, assume or in any manner become liable
in respect of, or suffer to exist, any Indebtedness other than:
(i) Indebtedness evidenced by the Notes (and
guaranties thereof);
(ii) Indebtedness to Persons (including guaranties of
Indebtedness) other than Indebtedness evidenced by the Notes,
as described on Schedule 7.2, having the same material terms
as those existing on the date of this Agreement, and provided,
that (i) with respect to the Indebtedness outstanding under
the Company's 7.25% Senior Notes, Series A, due April 6, 2005,
any extension, renewal or replacement thereof (including by a
different person), not to exceed the original principal amount
of such Indebtedness and at the then prevailing market terms,
(ii) with respect to Indebtedness under the Credit Agreement
or the Short-Term Credit Agreement, any extension, renewal or
replacement thereof (including by a different person), not to
exceed the maximum amount available under the terms of the
Credit Agreement or the Short-Term Credit Agreement, as the
case may be, as in effect on May 15, 2000, and at the then
prevailing market rate, and (iii) with respect to any other
Indebtedness described on Schedule 7.2, any extension, renewal
or replacement thereof (but without increase in the principal
amount outstanding at the time of such extension, renewal or
replacement);
(iii) Indebtedness secured by Permitted Liens;
provided, however, that the proceeds of Indebtedness incurred
in connection with the grant of the Permitted Liens described
in Section 7.4(viii) shall be applied toward the satisfaction
of amounts owing under the Short Term Credit Agreement or the
Credit Agreement, or to make prepayments of the Notes under
Section 2.2(a);
(iv) Indebtedness of up to $1,000,000 from state or
local government authorities or sub-divisions thereof or local
development authorities, provided that so long as any Default
or Event of Default shall exist and be continuing, such
Indebtedness may not be increased above the amount existing at
the time of such Default or Event of Default;
(v) Subordinated Indebtedness which is acceptable to
the holders of at least a majority in aggregate principal
amount of outstanding Notes in their sole
6
<PAGE>
discretion, including the terms of the subordination agreement
covering the Subordinated Indebtedness;
(vi) guaranties of Indebtedness which in the
aggregate do not exceed $1,000,000 at any time or other
Indebtedness not to exceed $500,000 at any time (to the extent
such guaranties or Indebtedness is not permitted under clause
(ii) above); provided that so long as any Default or Event of
Default shall exist and be continuing, such guaranties may not
be increased from the guaranties existing at the time of such
Default or Event of Default;
(vii) Indebtedness of one Loan Party or a subsidiary
thereof to another Loan Party or a subsidiary thereof; and
(viii) any interest rate or currency swap, rate, cap,
or similar transaction entered into with a Bank or any of its
Affiliates entered into in the ordinary course of business for
the purpose of protecting the Company from changes in interest
or currency rates or commodity prices and not for speculative
purposes."
1.4 Section 7.3 of the Note Agreement is deleted.
1.5 Section 7.4 of the Note Agreement is amended in its entirety to
read as follows:
"7.4. Liens. The Company will not, and will not permit any
Subsidiary to, create, incur or suffer to exist any Lien on any of the
assets, rights, revenues or property, real, personal or mixed, tangible
or intangible, whether now owned or hereafter acquired, of the Company
or any Subsidiary, other than:
(i) Liens for taxes not delinquent or for taxes being
contested in good faith by appropriate proceedings and as to
which adequate financial reserves have been established on its
books and records;
(ii) Liens (other than any Lien imposed by ERISA)
created and maintained in the ordinary course of business
which are not material in the aggregate, and which would not
constitute or result in a Material Adverse Effect, and which
constitute (A) pledges or deposits under worker's compensation
laws, unemployment insurance laws or similar legislation, (B)
good faith deposits in connection with bids, tenders,
contracts or leases to which a the Company or any Subsidiary
is a party for a purpose other than borrowing money or
obtaining credit, including rent security deposits, (C) Liens
imposed by law, such as those of carriers, warehousemen and
mechanics, if payment of the obligation secured thereby is not
yet due, (D) Liens securing taxes, assessments or other
governmental charges or levies not yet subject to penalties
for nonpayment, and (E) pledges or deposits to secure public
or statutory obligations of the Company or any Subsidiary, or
surety, customs or appeal bonds to which the Company
7
<PAGE>
or any Subsidiary is a party;
(iii) Liens affecting real property which constitute
minor survey exceptions or defects or irregularities in title,
minor encumbrances, easements or reservations of, or rights of
others for, rights of way, sewers, electric lines, telegraph
and telephone lines and other similar purposes, or zoning or
other restrictions as to the use of such real property;
provided, however, that all of the foregoing, in the
aggregate, do not at any time materially detract from the
value of said properties or materially impair their use in the
operation of the businesses of the Company or any Subsidiary;
(iv) each Lien described in Schedule 7.4 which may be
suffered to exist upon the same terms as those existing on the
date hereof, and any extension, renewal or replacement thereof
(but without increase in the principal amount secured thereby
outstanding at the time of such extension, replacement, or
renewal and provided such Liens will not extend to cover any
additional property);
(v) Liens resulting from any action, suit,
proceeding, appeal or contest at law or equity brought in good
faith by or against the Company or a Multicurrency Subsidiary
Borrower before a Governmental Authority within the European
Union;
(vi) purchase money Liens upon or in property of a
Loan Party, provided, however, that no such Lien will extend
to or cover any other property of any Loan Party and the
amount of any such Lien will not exceed the purchase price of
the related collateral;
(vii) Liens pursuant to any Capitalized Lease under
which a Loan Party is the lessee;
(viii) Liens on the Company's real property located
in Minnetonka, Minnesota, including, without limitation,
fixtures located on such property, provided that no such lien
shall be incurred without the consent of the holders of the
Notes after the occurrence of an Event of Default; and
(ix) any Lien granted by the Company or any
Subsidiary in favor of the Collateral Agent securing the
"Obligations" as defined in the Collateral Sharing Agreement,
but only so long as the Collateral Sharing Agreement is in
full force and effect, the holders of all such "Obligations"
are parties thereto and any Indebtedness secured by any such
Lien is permitted under Section 7.2(ii)."
1.6 Section 7.5 of the Note Agreement is amended in its entirety to
read as follows:
8
<PAGE>
"7.5. Merger; Purchase of Assets; Acquisitions; Etc. Other
than the New Holland Venture, the Company will not, and will not permit
any Subsidiary to, purchase or otherwise acquire, whether in one or a
series of transactions, all or a substantial portion of the business,
assets, rights, revenues or property, real, personal or mixed, tangible
or intangible, of any Person, or all or a substantial portion of the
capital stock of or other ownership interest in any other Person or
merge or consolidate or amalgamate with any other Person or take any
other action having a similar effect, not enter into any joint venture
or similar arrangement with any other Person, if any combination of the
aforementioned, in the aggregate, exceeds $5,000,000 in any fiscal
year; provided, that this Section 7.5 will not prohibit any merger or
consolidation solely between or among (i) the Company and any
Subsidiary, so long as the Company is the surviving person of such
merger or consolidation or (ii) Ag-Chem Europe, B.V. and any of its
Subsidiaries, so long as Ag-Chem Europe, B.V. is the surviving person
of such merger or consolidation."
1.7 Section 7.6 of the Note Agreement is amended in its entirety to
read as follows:
"7.6 Disposition of Assets; Etc. The Company will not, and
will not permit any Subsidiary to, sell, lease, license, transfer,
assign or otherwise dispose of any of its business, assets, rights,
revenues or property, real, personal or mixed, tangible or intangible,
whether in one or a series of transactions, other than (i) inventory
sold in the ordinary course of business upon customary credit terms,
which for purposes of this Section 7.6, shall include any sales of
inventory by the Company to the New Holland Venture, and sales of
obsolete or damaged material or equipment, (ii) the sale of all or part
of Ag-Chem Equipment Co. International Co., International Corp, a
Virgin Islands corporation, (iii) transfers from one Loan Party to
another Loan Party, (iv) intellectual property owned and licensed by
the Company in the ordinary course of business, provided that for
purposes of this clause (iv) "ordinary course" shall be defined as the
ordinary course of business for the Company in the particular
geographic region in which such intellectual property is being
licensed, (v) transfers of assets from any Loan Party to any subsidiary
thereof, irrespective of whether such subsidiary is a Loan Party, so
long as the aggregate dollar value of such transfers in any fiscal year
does not exceed $5,000,000, (vi) other sales of assets (excluding
assets sold in connection with the New Holland Venture) not to exceed
$3,000,000 in the aggregate for all Loan Parties during any fiscal year
of the Company; provided that so long as any Default or Event of
Default shall exist and be continuing, no sales or transfers under
clauses (ii), (iii) or (v) above may be made beyond those contracted
for at the time of such Default or Event of Default; or (vii) accounts
receivable and/or instruments owed to or in favor of a Loan Party that
are sold, transferred, and/or assigned in an arms-length transaction
for a fair market price by such Loan Party; provided, that no such
sale, transfer or assignment shall occur without the consent of the
holders of the Notes after the occurrence of an Event of Default;
provided, further, that 100% of the proceeds resulting from such sale,
transfer or assignment shall be applied toward the satisfaction of the
Indebtedness outstanding under the Credit Agreement or the Short Term
Credit Agreement or to make a prepayment of the Notes pursuant to
Section 2.2(a)."
9
<PAGE>
1.8 New Sections 7.10, 7.11, 7.12 and 7.13 are added to the Note
Agreement, such Sections to read as follows:
"7.10 Investments. The Company will not, and will not permit
any Subsidiary to, make, commit to make or permit to exist any loans,
investments, advances or extensions of credit to any Person, firm or
corporation, other than: (i) Cash Equivalents, (ii) loans not to exceed
$500,000 at any time outstanding and travel advances extended to
officers and employees of a Loan Party in the ordinary course of
business, (iii) investments existing on June 4, 1999 in Subsidiaries
that are not Loan Parties, (iv) investments by the Company or any
Multicurrency Subsidiary Borrower in other Loan Parties, (v) loans from
one Loan Party to another Loan Party, (vi) loans or extensions of
credit granted in the ordinary course of business to purchasers or
lessees of a product sold or leased by a Loan Party, which for purposes
of this Section 7.10, shall include any loans or extensions of credit
to the New Holland Venture as a purchaser of products sold by a Loan
Party, so long as neither the Company nor any Subsidiary is in
violation of the financial covenants in this Agreement, (vii)
investments related to the New Holland Venture; provided that such
investments do not exceed $500,000 in any calendar year; provided,
further, that, for purposes of this clause (vii), "investments" shall
include any transfer of any assets by the Company to the New Holland
Venture, or (viii) other investments which in the aggregate do not
exceed $3,000,000 in any fiscal year of the Company.
7.11 Capital Expenditures. The Company will not, and will not
permit any Subsidiary to, make Capital Expenditures on an aggregate
basis for the Company and all Subsidiaries during any fiscal year of
the Company in excess of $20,000,000.
7.12 Dividends. The Company will not, and will not permit any
Subsidiary to, declare or pay dividends or make other stockholder
distributions or redemptions of its capital stock, or commit to make
any distribution of cash or property to its shareholders at any time
after June 4, 1999 other than dividends payable to the Company or a
Wholly-Owned Subsidiary; provided, however, that so long as no Default
or Event of Default has occurred and is continuing and no Default or
Event of Default would occur upon payment of such amounts, (i) the
Company may pay cash dividends or dividends paid solely in shares of
the Company, and (ii) the Company may repurchase or redeem shares of
its capital stock for an amount not to exceed $3,000,000 per fiscal
year.
7.13 Most Favored Lender. The Company will not, and will not
permit any Subsidiary to, agree to, with or for the benefit of the
holder of any other Indebtedness of the Company or any Subsidiary, any
financial or restrictive covenants or events of default which are more
restrictive than, or in addition to, the financial or negative
covenants or Events of Default contained in this Agreement, unless the
Company has, or has caused such Subsidiary to, offer to enter into an
agreement with the holders of the Notes, in form and substance
reasonably satisfactory to the holders of the Notes, whereby such
financial or negative covenants or events of default are added to this
Agreement for the benefit of the Notes."
10
<PAGE>
1.9 Schedules 7.2 and 7.4 hereto are added as Schedules 7.2 and 7.4 to
the Note Agreement.
SECTION 2. Representations and Warranties. The Company represents and
warrants to each of the undersigned that (a) this letter has been duly
authorized, executed and delivered by the Company, (b) each representation and
warranty set forth in Section 3 of the Note Agreement is true and correct as of
the date of the execution and delivery of this letter by the Company with the
same effect as if made on such date (except to the extent such representations
and warranties expressly refer to an earlier date, in which case they were true
and correct as of such earlier date) and (c) after giving effect to the
amendments to the Note Agreement in Section 1 hereof except for the Specified
Defaults (as defined below), no Event of Default or Default exists.
SECTION 3. Effectiveness. The amendments described in Section 1 above
and the waivers set forth in Section 5 hereof shall become effective on the date
when (the "EFFECTIVE DATE") Mass Mutual has received:
(a) all costs and expenses of Mass Mutual (including
reasonable fees and disbursements of special counsel to Mass Mutual) in
connection with this letter;
(b) the following documents, each in a form and substance
satisfactory to Mass Mutual:
(i) counterparts of this letter agreement executed by
the Company and consented to by each Guarantor;
(ii) a Security Agreement signed by the Company and
each Guarantor, together with evidence, satisfactory to Mass
Mutual, that the Company and each Guarantor have delivered to
the Collateral Agent all financing statements and other
documents necessary to perfect the Collateral Agent's Lien on
all collateral granted under the Security Agreement;
(iii) the Collateral Sharing Agreement, signed by the
parties thereto and consented to by the Company and the
Guarantors;
(iv) an amendment and waiver to the Credit Agreement
and the Short Term Credit Agreement, executed by the Company,
the Multicurrency Subsidiary Borrowers, Bank One, NA, as agent
for the Banks, and the Banks; and
(v) an amendment and waiver to the Note Agreement,
dated as of October 10, 1995, duly executed by the Company and
the holders of the Company's7.25% Senior Notes, Series A; and
11
<PAGE>
(vi) an agreement from Ag-Chem Sales Co., Inc. to be
bound by the terms of the Subsidiary Guaranty.
(c) All corporate and other proceedings in connection with the
transactions contemplated by this letter agreement shall be
satisfactory to Mass Mutual and its counsel, and Mass Mutual shall have
received all such counterpart originals or certified or other copies of
such documents as it may reasonably request.
SECTION 4. Reference to and Effect on Note Agreements. Upon the
effectiveness of this letter, each reference to the Note Agreement in any other
document, instrument or agreement shall mean and be a reference to the Note
Agreement as modified by this letter. Except as specifically set forth in
Section 1 or 2 hereof, the Note Agreement shall remain in full force and effect
and is hereby ratified and confirmed in all respects.
SECTION 5. Waiver. Effective on the Effective Date, Mass Mutual hereby
waives any Default or Event of Default under Section 8.1(d) of the Note
Agreement resulting solely from a failure to comply with Section 7.3 of the Note
Agreement for the periods ended March 31, 2000 (the "Specified Default"). Except
as specifically set forth in the preceding sentence, nothing contained in the
letter shall be construed as a waiver of or consent to any other violation of
the Note Agreement or any other Default or Event of Default under the Note
Agreement.
SECTION 6. Governing Law. THIS LETTER SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS OF SUCH STATE WHICH WOULD OTHERWISE CAUSE THIS
LETTER TO BE CONSTRUED OR ENFORCED OTHER THAN IN ACCORDANCE WITH THE LAWS OF THE
STATE OF ILLINOIS.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
12
<PAGE>
SECTION 7. Counterparts; Section Titles. This letter may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument. The section titles contained in this letter are and shall be
without substance, meaning or content of any kind whatsoever and are not a part
of the agreement between the parties hereto.
Very truly yours,
C.M. LIFE INSURANCE COMPANY
By: David Babson and Company
Incorporated, as Investment Sub
Adviser
By: /s/ Richard E. Spencer II
----------------------------------
Title: Managing Director
AGREED AND ACCEPTED:
AG-CHEM EQUIPMENT CO., INC.
By: /s/ John Retherford
--------------------------------
Title: CFO
Each of the undersigned Guarantors hereby consents to the foregoing amendments
and waivers and confirms that, notwithstanding the foregoing amendments and
waivers, all of its obligations under its Subsidiary Guaranty, dated as of April
6, 1994, remain in full force and effect with respect to the Note Agreement as
amended and waived as provided above.
LOR*AL PRODUCTS, INC.
By: /s/ John Retherford
--------------------------------
Title: CFO
AG-CHEM EQUIPMENT CANADA, LTD.
By: /s/ John Retherford
--------------------------------
Title: CFO
13
<PAGE>
AG-CHEM EQUIPMENT CO.,
INTERNATIONAL CORP.
By: /s/ John Retherford
--------------------------------
Title: CFO
AG-CHEM MANUFACTURING, INC.
By: /s/ John Retherford
--------------------------------
Title: CFO
AG-CHEM SALES CO., INC.
By: /s/ John Retherford
--------------------------------
Title: CFO
AG-CHEM EUROPE, B.V.
By: /s/ John Retherford
--------------------------------
Title: CFO
14
<PAGE>
Schedule 7.2
Existing Indebtedness
15
<PAGE>
Schedule 7.4
Existing Liens
16
EXHIBIT 10.27
WAIVER DATED MAY 15, 2000, BY
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
OF CERTAIN DEFAULTS UNDER EXACT TITLE OF AGREEMENT
DATED OCTOBER 10, 1995
Ag-Chem Equipment Co., Inc.
5720 Smetana Drive, Suite 100
Minnetonka, Minnesota 55342-9688
Attention: Chief Financial Officer
Ladies and Gentlemen:
Reference is made to that certain Note Agreement, dated as of October
10, 1995 (as amended from time to time, the "NOTE AGREEMENT"), between Ag-Chem
Equipment Co., Inc., a Minnesota corporation (the "COMPANY"), and The Prudential
Insurance Company of America ("PRUDENTIAL"). Capitalized terms used herein and
not otherwise defined herein shall have the meanings assigned to such terms in
the Note Agreement.
Pursuant to the request of the Company and in accordance with the
provisions of Section 9.1 of the Note Agreement, the parties hereto agree as
follows:
SECTION 1. Amendments to Note Agreement. From and after the date this
letter becomes effective in accordance with its terms, the Note Agreement is
amended as follows:
1.1. Section 5.1 of the Note Agreement is amended to delete the term
"Indebtedness" presently appearing therein and to add the following defined
terms thereto in appropriate alphabetical order:
"BANKS" means the financial institutions from time to time
constituting the "Lenders" under the Credit Agreement or the Short Term
Credit Agreement.
"CAPITAL EXPENDITURES" means, for any period, the additions to
property, plant and equipment and other capital expenditures of the
Company and its Subsidiaries for such period, as the same are or should
be set forth on the consolidated financial statements of the Company
and its Subsidiaries in accordance with GAAP.
"CASH EQUIVALENTS" means as to any Person, (a) securities
issued or directly and fully guaranteed or insured by the United States
or any agency or instrumentality thereof (provided that the full faith
and credit of the United States is pledged in support thereof) having
maturities of not more than 12 months from the date of acquisition, (b)
time deposits and certificates of deposit of any commercial bank with a
long-term unsecured
<PAGE>
debt rating of at least A or its equivalent from Standard & Poor's
Ratings Services, a division of The McGraw-Hill Companies, Inc., or at
least A-2 or its equivalent from Moody's Investors Service, Inc. with
maturities of not more than six months from the date of acquisition by
such person, (c) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clause
(a) above entered into with any bank meeting the qualifications
specified in clause (b) above, (d) commercial paper issued by any
person incorporated in the United States, which commercial paper is
rated at least A-1 or the equivalent thereof by Standard & Poor's
Ratings Services, a division of The McGraw-Hill Companies, Inc., or at
least P-1 or the equivalent thereof by Moody's Investors Service, Inc.
or at least F-1 or the equivalent thereof by Fitch Investor Services,
Inc. and in each case maturing not more than 270 days after the date of
issuance by such person, and (e) investments in money market funds
substantially all the assets of which are comprised of securities of
the types described in clauses (a) through (d) above.
"COLLATERAL AGENT" means Bank One, N.A., in its capacity as
contractual representatives for the Banks, the holders of the Notes and
the holders of the Company's 6.83% Series A Senior Notes due April 6,
2001 under the Collateral Sharing Agreement, and its successors and
assigns in such capacity.
"CONTINGENT LIABILITIES" of any Person means, as of any date,
all obligations of such Person or of others for which such Person is
contingently liable, as obligor, guarantor, surety or in any other
capacity, or in respect of which obligations such Person assures a
creditor against loss or agrees to take any action to prevent any such
loss (other than endorsements of negotiable instruments for collection
in the ordinary course of business), including all reimbursement
obligations and all obligations of such Person to advance funds to, or
to purchase assets, property or services from, any other Person in
order to maintain the financial condition of such other Person.
"COLLATERAL SHARING AGREEMENT" mean that certain Collateral
Sharing Agreement, dated as of May 15, 2000, by and among the
Collateral Agent, Bank One, as contractual representative for the Banks
under the Credit Agreement and the Short Term Credit Agreement, the
Banks, the holders of the Notes and the holders of the Company's 6.83%
Senior Notes, Series A, due April 6, 2001, as amended from time to time
in accordance with the terms thereof.
"CREDIT AGREEMENT" shall mean the Third Amended and Restated
Long Term Revolving Credit Agreement, dated as of June 4, 1999, by and
among the Company, the Multicurrency Subsidiary Borrowers, certain of
the Banks and Bank One N.A., as agent, as amended by Waiver and
Amendment No. 1 thereto dated as of December 22, 1999 and Waiver and
Amendment No. 2 thereto dated May 15, 2000.
"EBITDA" means, for any period, Net Income plus the sum of all
amounts recorded and deducted in computing Net Income for such period
in respect of Interest Expense, taxes, depreciation charges and
expenses and amortization charges and
2
<PAGE>
expenses (whether paid or accrued, or a cash or non-cash expense), as
determined in accordance with GAAP.
"GOVERNMENTAL AUTHORITY" means any federal, state, local,
municipal or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, and any and all
Governmental Regulations (including decrees, rules and orders) of any
governmental bodies and offices having power to regulate or supervise
the business activities of any of the company, a Subsidiary or any
holder of a Note.
"GOVERNMENTAL REGULATIONS" means any and all laws, statues,
ordinances, rules, regulations, treaties, judgments, writs,
injunctions, decrees, orders, awards and standards, or any similar
requirement, of the government of the United States or of any foreign
government or any state, province, municipality or other political
subdivision thereof or therein or any court, agency, instrumentality,
regulatory authority or commission of any of the foregoing.
"GUARANTORS" means Ag-Chem Equipment Co., International Corp.,
Lor*Al Products, Inc., Ag-Chem Equipment Canada, Ltd., Ag-Chem Europe,
B.V., formerly known as Kurstjens Terra-Gator B.V., Ag-Chem Sales Co.,
Inc., a Minnesota corporation, Ag-Chem Manufacturing, Inc., formerly
known as Soil Teq, Inc., a Minnesota corporation, and any other person
or entity that may guarantee the Notes from time to time.
"INDEBTEDNESS" of any Person means (a) all obligations of such
Person for borrowed money, (b) all obligations of such Person as lessee
under any Capitalized Lease, (c) all obligations which are secured by
any Lien existing on any asset or property of such Person whether or
not the obligation secured thereby shall have been assumed by such
Person, (d) the unpaid purchase price for goods, property or services
acquired by such Person, except for accounts payable for goods,
property or services arising in the ordinary course of business that
are not more than sixty (60) days past due, (e) all obligations of such
Person to purchase goods, property or services where payment therefor
is required regardless of whether delivery of such goods or property or
the performance of such services is ever made or tendered (generally
referred to as "take or pay contracts"), (f) all liabilities of such
Person in respect of unfunded benefit liabilities (determined in
accordance with Section 4001(a)(18) of ERISA) under any Plan of such
person or of any ERISA Affiliate and any unfunded current liabilities
with respect to any employee benefit pension plans maintained by such
Person outside the United States, (g) all obligations of such Person in
respect of any interest rate or currency swap, rate cap or other
similar transaction (valued in any amount equal to the highest
termination payment, if any, that would be payable by such Person upon
termination for any reason on the date of determination), and (h) all
Contingent Liabilities of such Person.
"INTEREST COVERAGE RATIO" means the ratio of (a) EBITDA of the
Company and its consolidated Subsidiaries to (b) Interest Expense for
the Company and its Subsidiaries,
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<PAGE>
on a consolidated basis, to be calculated as of the end of each fiscal
quarter of the Company for the four consecutive fiscal quarters then
ending.
"INTEREST EXPENSE" means, for a Person for the applicable
fiscal period, such Person's interest expense (including capitalized
interest accrued during such period) for such period computed in
accordance with GAAP including, without limitation, the portion of any
obligation under a Capitalized Lease allocable to interest expense in
accordance with GAAP.
"LOAN PARTIES" means the Company and the Guarantors.
"MULTICURRENCY SUBSIDIARY BORROWERS" means each of Ag-Chem
Europe, B.V., a Netherlands private limited liability company, and
Ag-Chem Equipment Canada, Ltd., a Minnesota corporation.
"NET INCOME" means, for any period, the net income of the
Company and its consolidated Subsidiaries after taxes, determined in
accordance with GAAP.
"NEW HOLLAND VENTURE" means the joint venture between the
Company and New Holland North America, Inc.
"PERMITTED LIENS" means Liens permitted by Section 7.4.
"SHORT TERM CREDIT AGREEMENT" means the Short Term Revolving
Credit Agreement, dated as of June 4, 1999, by and among the Company,
certain of the Banks and Bank One, N.A., as agent for such Banks, as
amended by Waiver and Amendment No. 1 thereto dated as of December 22,
1999 and Waiver and Amendment No. 2 thereto dated as of May 15, 2000.
"TANGIBLE NET WORTH" means, as of any date, (a) the amount of
any capital stock, paid in capital and similar equity accounts of the
Company and its consolidated Subsidiaries plus (or minus in the case of
a deficit) the capital surplus and retained earnings of the Company and
its consolidated Subsidiaries, minus (b) the amount of any treasury
stock reflected on such balance sheet, minus (c) any amount
attributable to the write-up of assets (other than marketable
securities) on or after September 30, 1998, minus (d) the net book
value of all items of the following character which are included in the
assets of the Company and its consolidated Subsidiaries as of such
date: (i) goodwill, including the excess of cost over book value of any
asset; (ii) organization or experimental expenses; (iii) unamortized
debt discount and expense; (iv) patents, trademarks, trade names and
copyrights; (v) franchises, licenses and permits; (vi) amounts due from
Affiliates and (vii) all other assets which are deemed intangible
assets under GAAP.
4
<PAGE>
"TOTAL LIABILITIES" means, as of the date of determination,
the total liabilities of the Company and its consolidated Subsidiaries
that would properly be classified as a liability under GAAP.
"WORKING CAPITAL COVERAGE RATIO" means the ratio of (a) the
sum of the face amount of the accounts receivable of the Company and
its consolidated Subsidiaries minus the amount of accounts receivable
classified as doubtful determined in accordance with GAAP plus the
value of the inventory of the Company and its consolidated Subsidiaries
valued at the lower of cost or market on a last-in first-out basis
determined in accordance with GAAP to (b) the sum of the principal
amount of the obligations of the Company to the Banks under the Credit
Agreement and the Short Term Credit Agreement plus the outstanding
principal indebtedness of the Company under that certain Note Agreement
dated as of April 6, 1994 with respect to the Company's 6.83% Senior
Notes, Series A, due April 6, 2001 plus the outstanding principal
amount of the Notes.
1.2. Section 7.1 of the Note Agreement is amended in its entirety to
read as follows:
"7.1 Financial Ratios.
(a) Tangible Net Worth. The Company will not permit
or suffer Tangible Net Worth to be, at any time after June 4,
1999, less than the sum of (i) $57,500,000, plus (ii) the net
amount of any proceeds from the sale of the Company's equity
interests received by the Company after June 4, 1999, plus
(iii) fifty percent (50%) of annual Net Income accumulated
from September 30, 1998, beginning with the calculation for
the year ending September 30, 1999; provided, however, that no
deduction will be made for any fiscal year where net income is
less than zero and any loss will not reduce any amount added
for any other fiscal year.
(b) Total Liabilities to Tangible Net Worth. The
Company will not permit or suffer the ratio of Total
Liabilities to Tangible Net Worth to exceed: (1) 2.75 to 1.0
at the end of the fiscal quarter ending March 31, 2000 or (ii)
2.50 to 1.0 at the end of each fiscal quarter ending on or
after June 30, 2000 and on or prior to March 31, 2001 or (iii)
2.0 to 1.0 at the end of each fiscal quarter ending on or
after June 30, 2001.
(c) Interest Coverage Ratio. The Company will not
permit or suffer the Interest Coverage Ratio to be less than
(i) 2.0 to 1.0 for the fiscal period ending March 31, 2000 or
(ii) 1.50 to 1.0 for the fiscal periods ending June 30, 2000,
September 30, 2000 and December 31, 2000 or (iii) 2.0 to 1.0
for the fiscal period ending March 31, 2001 or (iv) 2.25 to
1.0 for the fiscal period ending June 30, 2001 or (v) 2.5 to
1.0 for the fiscal periods ending September 30, 2001, December
31, 2001, March 31, 2002 and June 30, 2002 or (vi) 3.25 to 1.0
for the fiscal periods ending September 30, 2002, December 31,
2002, March 31, 2003
5
<PAGE>
and June 30, 2003 or (vii) 3.5 to 1.0 for each fiscal period
ending as of the end of each fiscal quarter ending on or after
September 30, 2003.
(d) Working Capital Coverage Ratio. The Company will
not permit or suffer the Working Capital Coverage Ratio to be
less than 1.30 to 1.0 as of the end of any fiscal quarter."
1.3. Section 7.2 of the Note Agreement is amended in its entirety to
read as follows:
"7.2 Indebtedness. The Company will not, and will not permit
any Subsidiary to, create, incur, assume or in any manner become liable
in respect of, or suffer to exist, any Indebtedness other than:
(i) Indebtedness evidenced by the Notes (and
guaranties thereof);
(ii) Indebtedness to Persons (including guaranties of
Indebtedness) other than Indebtedness evidenced by the Notes,
as described on Schedule 7.2, having the same material terms
as those existing on the date of this Agreement, and provided,
that (i) with respect to the Indebtedness outstanding under
the Company's 6.83% Senior Notes, Series A, due April 6, 2001,
any extension, renewal or replacement thereof (including by a
different person), not to exceed the original principal amount
of such Indebtedness and at the then prevailing market terms,
(ii) with respect to Indebtedness under the Credit Agreement
or the Short-Term Credit Agreement, any extension, renewal or
replacement thereof (including by a different person), not to
exceed the maximum amount available under the terms of the
Credit Agreement or the Short-Term Credit Agreement, as the
case may be, as in effect on May 15, 2000, and at the then
prevailing market rate, and (iii) with respect to any other
Indebtedness described on Schedule 7.2, any extension, renewal
or replacement thereof (but without increase in the principal
amount outstanding at the time of such extension, renewal or
replacement);
(iii) Indebtedness secured by Permitted Liens;
provided, however, that the proceeds of Indebtedness incurred
in connection with the grant of the Permitted Liens described
in Section 7.4(viii) shall be applied toward the satisfaction
of amounts owing under the Short Term Credit Agreement or the
Credit Agreement, or to make prepayments of the Notes under
Section 2.2(a);
(iv) Indebtedness of up to $1,000,000 from state or
local government authorities or sub-divisions thereof or local
development authorities, provided that so long as any Default
or Event of Default shall exist and be continuing, such
Indebtedness may not be increased above the amount existing at
the time of such Default or Event of Default;
(v) Subordinated Indebtedness which is acceptable to
the holders of at least a majority in aggregate principal
amount of outstanding Notes in their sole
6
<PAGE>
discretion, including the terms of the subordination agreement
covering the Subordinated Indebtedness;
(vi) guaranties of Indebtedness which in the
aggregate do not exceed $1,000,000 at any time or other
Indebtedness not to exceed $500,000 at any time (to the extent
such guaranties or Indebtedness is not permitted under clause
(ii) above); provided that so long as any Default or Event of
Default shall exist and be continuing, such guaranties may not
be increased from the guaranties existing at the time of such
Default or Event of Default;
(vii) Indebtedness of one Loan Party or a subsidiary
thereof to another Loan Party or a subsidiary thereof; and
(viii) any interest rate or currency swap, rate, cap,
or similar transaction entered into with a Bank or any of its
Affiliates entered into in the ordinary course of business for
the purpose of protecting the Company from changes in interest
or currency rates or commodity prices and not for speculative
purposes."
1.4 Section 7.3 of the Note Agreement is deleted.
1.5 Section 7.4 of the Note Agreement is amended in its entirety to
read as follows:
"7.4. Liens. The Company will not, and will not permit any
Subsidiary to, create, incur or suffer to exist any Lien on any of the
assets, rights, revenues or property, real, personal or mixed, tangible
or intangible, whether now owned or hereafter acquired, of the Company
or any Subsidiary, other than:
(i) Liens for taxes not delinquent or for taxes being
contested in good faith by appropriate proceedings and as to
which adequate financial reserves have been established on its
books and records;
(ii) Liens (other than any Lien imposed by ERISA)
created and maintained in the ordinary course of business
which are not material in the aggregate, and which would not
constitute or result in a Material Adverse Effect, and which
constitute (A) pledges or deposits under worker's compensation
laws, unemployment insurance laws or similar legislation, (B)
good faith deposits in connection with bids, tenders,
contracts or leases to which a the Company or any Subsidiary
is a party for a purpose other than borrowing money or
obtaining credit, including rent security deposits, (C) Liens
imposed by law, such as those of carriers, warehousemen and
mechanics, if payment of the obligation secured thereby is not
yet due, (D) Liens securing taxes, assessments or other
governmental charges or levies not yet subject to penalties
for nonpayment, and (E) pledges or deposits to secure public
or statutory obligations of the Company or any Subsidiary, or
surety, customs or appeal bonds to which the Company or any
Subsidiary is a party;
7
<PAGE>
(iii) Liens affecting real property which constitute
minor survey exceptions or defects or irregularities in title,
minor encumbrances, easements or reservations of, or rights of
others for, rights of way, sewers, electric lines, telegraph
and telephone lines and other similar purposes, or zoning or
other restrictions as to the use of such real property;
provided, however, that all of the foregoing, in the
aggregate, do not at any time materially detract from the
value of said properties or materially impair their use in the
operation of the businesses of the Company or any Subsidiary;
(iv) each Lien described in Schedule 7.4 which may be
suffered to exist upon the same terms as those existing on the
date hereof, and any extension, renewal or replacement thereof
(but without increase in the principal amount secured thereby
outstanding at the time of such extension, replacement, or
renewal and provided such Liens will not extend to cover any
additional property);
(v) Liens resulting from any action, suit,
proceeding, appeal or contest at law or equity brought in good
faith by or against the Company or a Multicurrency Subsidiary
Borrower before a Governmental Authority within the European
Union;
(vi) purchase money Liens upon or in property of a
Loan Party, provided, however, that no such Lien will extend
to or cover any other property of any Loan Party and the
amount of any such Lien will not exceed the purchase price of
the related collateral;
(vii) Liens pursuant to any Capitalized Lease under
which a Loan Party is the lessee;
(viii) Liens on the Company's real property located
in Minnetonka, Minnesota, including, without limitation,
fixtures located on such property, provided that no such lien
shall be incurred without the consent of the holders of the
Notes after the occurrence of an Event of Default; and
(ix) any Lien granted by the Company or any
Subsidiary in favor of the Collateral Agent securing the
"Obligations" as defined in the Collateral Sharing Agreement,
but only so long as the Collateral Sharing Agreement is in
full force and effect, the holders of all such "Obligations"
are parties thereto and any Indebtedness secured by any such
Lien is permitted under Section 7.2(ii)."
1.6 Section 7.5 of the Note Agreement is amended in its entirety to
read as follows: "7.5. Merger; Purchase of Assets; Acquisitions; Etc. Other than
the New Holland Venture, the Company will not, and will not permit any
Subsidiary to, purchase or otherwise acquire, whether in one or a series of
transactions, all or a substantial portion
8
<PAGE>
of the business, assets, rights, revenues or property, real, personal or mixed,
tangible or intangible, of any Person, or all or a substantial portion of the
capital stock of or other ownership interest in any other Person or merge or
consolidate or amalgamate with any other Person or take any other action having
a similar effect, not enter into any joint venture or similar arrangement with
any other Person, if any combination of the aforementioned, in the aggregate,
exceeds $5,000,000 in any fiscal year; provided, that this Section 7.5 will not
prohibit any merger or consolidation solely between or among (i) the Company and
any Subsidiary, so long as the Company is the surviving person of such merger or
consolidation or (ii) Ag-Chem Europe, B.V. and any of its Subsidiaries, so long
as Ag-Chem Europe, B.V. is the surviving person of such merger or
consolidation."
1.7 Section 7.6 of the Note Agreement is amended in its entirety to
read as follows:
"7.6 Disposition of Assets; Etc. The Company will not, and
will not permit any Subsidiary to, sell, lease, license, transfer,
assign or otherwise dispose of any of its business, assets, rights,
revenues or property, real, personal or mixed, tangible or intangible,
whether in one or a series of transactions, other than (i) inventory
sold in the ordinary course of business upon customary credit terms,
which for purposes of this Section 7.6, shall include any sales of
inventory by the Company to the New Holland Venture, and sales of
obsolete or damaged material or equipment, (ii) the sale of all or part
of Ag-Chem Equipment Co. International Co., International Corp, a
Virgin Islands corporation, (iii) transfers from one Loan Party to
another Loan Party, (iv) intellectual property owned and licensed by
the Company in the ordinary course of business, provided that for
purposes of this clause (iv) "ordinary course" shall be defined as the
ordinary course of business for the Company in the particular
geographic region in which such intellectual property is being
licensed, (v) transfers of assets from any Loan Party to any subsidiary
thereof, irrespective of whether such subsidiary is a Loan Party, so
long as the aggregate dollar value of such transfers in any fiscal year
does not exceed $5,000,000, (vi) other sales of assets (excluding
assets sold in connection with the New Holland Venture) not to exceed
$3,000,000 in the aggregate for all Loan Parties during any fiscal year
of the Company; provided that so long as any Default or Event of
Default shall exist and be continuing, no sales or transfers under
clauses (ii), (iii) or (v) above may be made beyond those contracted
for at the time of such Default or Event of Default; or (vii) accounts
receivable and/or instruments owed to or in favor of a Loan Party that
are sold, transferred, and/or assigned in an arms-length transaction
for a fair market price by such Loan Party; provided, that no such
sale, transfer or assignment shall occur without the consent of the
holders of the Notes after the occurrence of an Event of Default;
provided, further, that 100% of the proceeds resulting from such sale,
transfer or assignment shall be applied toward the satisfaction of the
Indebtedness outstanding under the Credit Agreement or the Short Term
Credit Agreement or to make a prepayment of the Notes pursuant to
Section 2.2(a)."
1.8 New Sections 7.10, 7.11, 7.12 and 7.13 are added to the Note
Agreement, such Sections to read as follows:
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<PAGE>
"7.10 Investments. The Company will not, and will not permit
any Subsidiary to, make, commit to make or permit to exist any loans,
investments, advances or extensions of credit to any Person, firm or
corporation, other than: (i) Cash Equivalents, (ii) loans not to exceed
$500,000 at any time outstanding and travel advances extended to
officers and employees of a Loan Party in the ordinary course of
business, (iii) investments existing on June 4, 1999 in Subsidiaries
that are not Loan Parties, (iv) investments by the Company or any
Multicurrency Subsidiary Borrower in other Loan Parties, (v) loans from
one Loan Party to another Loan Party, (vi) loans or extensions of
credit granted in the ordinary course of business to purchasers or
lessees of a product sold or leased by a Loan Party, which for purposes
of this Section 7.10, shall include any loans or extensions of credit
to the New Holland Venture as a purchaser of products sold by a Loan
Party, so long as neither the Company nor any Subsidiary is in
violation of the financial covenants in this Agreement, (vii)
investments related to the New Holland Venture; provided that such
investments do not exceed $500,000 in any calendar year; provided,
further, that, for purposes of this clause (vii), "investments" shall
include any transfer of any assets by the Company to the New Holland
Venture, or (viii) other investments which in the aggregate do not
exceed $3,000,000 in any fiscal year of the Company.
7.11 Capital Expenditures. The Company will not, and will not
permit any Subsidiary to, make Capital Expenditures on an aggregate
basis for the Company and all Subsidiaries during any fiscal year of
the Company in excess of $20,000,000.
7.12 Dividends. The Company will not, and will not permit any
Subsidiary to, declare or pay dividends or make other stockholder
distributions or redemptions of its capital stock, or commit to make
any distribution of cash or property to its shareholders at any time
after June 4, 1999 other than dividends payable to the Company or a
Wholly-Owned Subsidiary; provided, however, that so long as no Default
or Event of Default has occurred and is continuing and no Default or
Event of Default would occur upon payment of such amounts, (i) the
Company may pay cash dividends or dividends paid solely in shares of
the Company, and (ii) the Company may repurchase or redeem shares of
its capital stock for an amount not to exceed $3,000,000 per fiscal
year.
7.13 Most Favored Lender. The Company will not, and will not
permit any Subsidiary to, agree to, with or for the benefit of the
holder of any other Indebtedness of the Company or any Subsidiary, any
financial or restrictive covenants or events of default which are more
restrictive than, or in addition to, the financial or negative
covenants or Events of Default contained in this Agreement, unless the
Company has, or has caused such Subsidiary to, offer to enter into an
agreement with the holders of the Notes, in form and substance
reasonably satisfactory to the holders of the Notes, whereby such
financial or negative covenants or events of default are added to this
Agreement for the benefit of the Notes."
1.9 Schedules 7.2 and 7.4 hereto are added as Schedules 7.2 and 7.4 to
the Note Agreement.
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SECTION 2. Representations and Warranties. The Company represents and
warrants to each of the undersigned that (a) this letter has been duly
authorized, executed and delivered by the Company, (b) each representation and
warranty set forth in Section 3 of the Note Agreement is true and correct as of
the date of the execution and delivery of this letter by the Company with the
same effect as if made on such date (except to the extent such representations
and warranties expressly refer to an earlier date, in which case they were true
and correct as of such earlier date) and (c) after giving effect to the
amendments to the Note Agreement in Section 1 hereof except for the Specified
Defaults (as defined below), no Event of Default or Default exists.
SECTION 3. Effectiveness. The amendments described in Section 1 above
and the waivers set forth in Section 5 hereof shall become effective on the date
when (the "EFFECTIVE DATE") Prudential has received:
(a) all costs and expenses of Prudential (including reasonable
fees and disbursements of special counsel to Prudential) in connection
with this letter;
(b) the following documents, each in a form and substance
satisfactory to Prudential:
(i) counterparts of this letter agreement executed by
the Company and consented to by each Guarantor;
(ii) a Security Agreement signed by the Company and
each Guarantor, together with evidence, satisfactory to
Prudential, that the Company and each Guarantor have delivered
to the Collateral Agent all financing statements and other
documents necessary to perfect the Collateral Agent's Lien on
all collateral granted under the Security Agreement;
(iii) the Collateral Sharing Agreement, signed by the
parties thereto and consented to by the Company and the
Guarantors;
(iv) an amendment and waiver to the Credit Agreement
and the Short Term Credit Agreement, executed by the Company,
the Multicurrency Subsidiary Borrowers, Bank One, NA, as agent
for the Banks, and the Banks; and
(v) an amendment and waiver to the Note Agreement,
dated as of April 6, 1994, duly executed by the Company and
the holders of the Company's 6.83% Senior Notes, Series A, due
April 6, 2001; and
(vi) an agreement from Ag-Chem Sales Co., Inc. to be
bound by the terms of the Subsidiary Guaranty.
(c) All corporate and other proceedings in connection with the
transactions contemplated by this letter agreement shall be
satisfactory to Prudential and its counsel,
11
<PAGE>
and Prudential shall have received all such counterpart originals or
certified or other copies of such documents as it may reasonably
request.
SECTION 4. Reference to and Effect on Note Agreements. Upon the
effectiveness of this letter, each reference to the Note Agreement in any other
document, instrument or agreement shall mean and be a reference to the Note
Agreement as modified by this letter. Except as specifically set forth in
Section 1 or 2 hereof, the Note Agreement shall remain in full force and effect
and is hereby ratified and confirmed in all respects.
SECTION 5. Waiver. Effective on the Effective Date, Prudential hereby
waives any Default or Event of Default under Section 8.1(d) of the Note
Agreement resulting solely from a failure to comply with Section 7.3 of the Note
Agreement for the periods ended March 31, 2000 (the "Specified Default"). Except
as specifically set forth in the preceding sentence, nothing contained in the
letter shall be construed as a waiver of or consent to any other violation of
the Note Agreement or any other Default or Event of Default under the Note
Agreement.
SECTION 6. Governing Law. THIS LETTER SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS OF SUCH STATE WHICH WOULD OTHERWISE CAUSE THIS
LETTER TO BE CONSTRUED OR ENFORCED OTHER THAN IN ACCORDANCE WITH THE LAWS OF THE
STATE OF ILLINOIS.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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<PAGE>
SECTION 7. Counterparts; Section Titles. This letter may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument. The section titles contained in this letter are and shall be
without substance, meaning or content of any kind whatsoever and are not a part
of the agreement between the parties hereto.
Very truly yours,
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: /s/ William S. Engelking
-------------------------------------
Vice President
AGREED AND ACCEPTED:
AG-CHEM EQUIPMENT CO., INC.
By: John Retherford
-------------------------------
Title: CFO
Each of the undersigned Guarantors hereby consents to the foregoing amendments
and waivers and confirms that, notwithstanding the foregoing amendments and
waivers, all of its obligations under its Subsidiary Guaranty, dated as of
October 10, 1995, remain in full force and effect with respect to the Note
Agreement as amended and waived as provided above.
LOR*AL PRODUCTS, INC.
By: /s/ John Retherford
-------------------------------
Title: CFO
13
<PAGE>
AG-CHEM EQUIPMENT CANADA, LTD.
By: /s/ John Retherford
-------------------------------
Title: CFO
AG-CHEM EQUIPMENT CO., INTERNATIONAL CORP.
By: /s/ John Retherford
-------------------------------
Title: CFO
AG-CHEM MANUFACTURING, INC.
By: /s/ John Retherford
-------------------------------
Title: CFO
AG-CHEM SALES CO., INC.
By: /s/ John Retherford
-------------------------------
Title: CFO
AG-CHEM EUROPE, B.V.
By: /s/ John Retherford
-------------------------------
Title: CFO
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SCHEDULE 7.2
PERMITTED INDEBTEDNESS
Total Facility
--------------
1. Jackson County Industrial Revenue Bonds dated November 1, 1997 $6,065,000
2. City of Jackson, Minnesota 50,000
3. Southwest Minnesota Fund Loan, December 15, 1989 100,000
4. Jackson County Note 1989 in connection with IRB 250,000
5. Southwest Minnesota Initiative Fund 100,000
6. City of Jackson 50,000
7. County of Jackson 40,000
8. Note payable to Cenex 480,000
9. Note payable to Funk Manufacturing 500,000
10. Rabo Bank Credit Facility for Ag-Chem Europe 1,400,000
11. Rabo Bank Guarantee in favor of G.J.J. Kurstjen 1,100,000
12. 6.83% Senior Note, Series A, due April 6, 2001 15,000,000
13. 7.25% Senior Note, due April 6, 2005 15,000,000
14. Long Term Credit Agreement 45,000,000
15. Short Term Credit Agreement 45,000,000
All amounts are in U.S. Dollars except for #10, which is stated in Dutch
Guilders.
1
<PAGE>
SCHEDULE 7.4
PERMITTED LIENS
1. Debtor: Ag-Chem Equipment Co., Inc.
Secured Party: Jackson County Housing and Redevelopment Authority Mortgage,
Security Agreement and Fixture Financing Statement as of
November 1, 1997
Collateral: This mortgage covers the following:
a. all the tracts or parcels of land (hereinafter called the
"Land"), located in Jackson County, Minnesota and described as
follows:
Tract 1
- -------
That part of the Northeast Quarter of the
Southeast Quarter (NE 1/4 of SE 1/4) of Section
Thirteen (13), Township One Hundred Two (102)
North, Range Thirty-five (35), West of the Fifth
Principal Meridian, Jackson County, Minnesota,
described as follows: Commencing at the Northeast
corner of the Southeast Quarter (SE 1/4) of said
Section 13; thence South 00(degree)02'20" West
(assumed bearing), along the East line of said
Southeast Quarter (SE 1/4), a distance of 183.80
feet, to the point of beginning of the tract to be
described; thence North 89(degree)49'00" West
along a line parallel with the North line of said
Southeast Quarter (SE 1/4), a distance of 1059.90
feet; thence South 00(degree)02'20" West along a
line parallel with the East line of said Southeast
Quarter (SE 1/4), a distance of 821.96 feet;
thence South 89(degree)49'00" East, along a line
parallel with the North line of said Southeast
Quarter (SE 1/4) a distance of 1059.90 feet, to
the East line of said Southeast Quarter (SE 1/4);
thence North 00(degree)02'20" East, along the East
line of said Southeast Quarter (SE 1/4), a
distance of 821.96 feet, to the point of
beginning.
EXCEPT that portion described as follows:
Commencing at the Northeast corner of the Southeast Quarter (SE 1/4) of said
Section 13; thence South 00 Degrees 02 Minutes 20 Seconds West (assuming
bearing), along the East line of said Southeast Quarter (SE 1/4), a distance of
1005.76 feet; thence North 89 Degrees 49 Minutes 00 Seconds West, along a line
parallel with the North line of said Southeast Quarter (SE 1/4), a distance of
670 feet, to the point of beginning of the tract to be described; thence North
00 Degrees 02 Minutes 20 Seconds West, along a line parallel with the East line
of said Southeast
2
<PAGE>
Quarter (SE 1/4), a distance of 30.00 feet; thence North 89 Degrees 49 Minutes
00 Seconds West, long a line parallel with the North line of said Southeast
Quarter (SE 1/4), a distance of 180.00 feet; then South 00 Degrees 02 Minutes 20
Seconds West, along a line parallel with the East line of said Southeast Quarter
(SE 1/4), a distance of 30.00 feet; thence South 89 Degrees 49 Minutes 00
Seconds East, along a line parallel with the North line of said Southeast
Quarter (SE 1/4), a distance of 180.00 feet, to the point of beginning.
Tract 2
- -------
That part of the Northeast Quarter of the
Southeast Quarter of Section 13, Township 102
North, Range 35 West of the Fifth Principal
Meridian in Jackson County, Minnesota, described
as follows: Commencing at the Northeast corner of
the Southeast Quarter of said Section 13; thence
South 00 degrees 02 minutes 20 seconds West
(assumed bearing), along the East line of said
Southeast Quarter, a distance of 183.80 feet;
thence North 89 degrees 49 minutes 00 seconds
West, along a line parallel with the North line of
said Southeast Quarter, a distance of 1059.90
feet, to the point of beginning of the tract to be
described; thence North 89 degrees 49 minutes 00
seconds West, along a line parallel with the North
line of said Southeast Quarter, a distance of
148.55 feet; thence South 00 degrees 02 minutes 20
seconds West, along a line parallel with the East
line of said Southeast Quarter, a distance of
821.96 feet; thence South 89 degrees 49 minutes 00
seconds East, along a line parallel with the North
line of said Southeast Quarter a distance of
148.67 feet; thence North 00 degrees 02 minutes 20
seconds East, along a line parallel with the East
line of said Southeast Quarter a distance of
821.96 feet, to the point of beginning.
b. all of the buildings, structures, and other improvements now
standing or at any time hereafter constructed or placed upon
the Land;
c. all lighting, heating, ventilating, air-conditioning,
sprinkling and plumbing fixtures, and all of the following
described equipment but only to the extent that such equipment
constitutes a fixture: water and power systems, boilers,
furnaces, oil burners, elevators and motors, dynamos,
transformers, pollution control equipment, and all other
fixtures of every description located in or on, or used, or
intended to be used in connection with the Land or any
building now or hereafter located thereon and owned by the
Mortgagor. The following described types or items of equipment
do not constitute fixtures:
Jib Cranes
Compressors
3
<PAGE>
Overhead Cranes
Paint System
Telephone and Computer Hardware
Water Softeners
L.P. Gas System
d. the reversion or reversions, remainder or remainders, in and
to the Land and each and every part thereof, together with the
entire interest of the Mortgagor in and to all and singular
the tenements, hereditaments, easements, rights, privileges
and appurtenances to said real estate belonging or in any wise
appertaining thereto;
e. all rights, title, and interest of the Mortgagor in and to any
streets, ways or alleys adjoining the Land or any part
thereof, and all the estate, right, title, interest, claim or
demand whatsoever of the Mortgagor, either in law or in
equity, in possession or expectancy, of, in and to said real
estate;
f. all proceeds of any taking of or damage to, or any sale in
lieu of a taking of, any portion of the foregoing under or
pursuant to the power of condemnation or eminent domain; and
g. all after-acquired interests of the Mortgagor in and to each
of the items referred to in each of the above paragraphs, and
all proceeds and products thereof.
- ---------------------
2. Debtor: Ag-Chem Equipment Co., Inc.
Type of Filing: Original UCC-1 filing
Filing Jurisdiction: Jackson County, Minnesota
Secured Party: Southwest MN Initiative Fund
163 Ninth Avenue
Granite Falls, MN 56241
Date of Filing: January 4, 1990
Document Number: 264525
Collateral: 1979 AMADA Turret Punch, Model #VELA II 305050,
33 ton capacity, Serial #VII 551090
4
<PAGE>
Continuation: Date of Filing: December 7, 1994
Document No.: 280436
- --------------------------
3. Debtor: Ag-Chem Equipment Co., Inc.
Type of Filing: Original UCC-1 filing
Filing Jurisdiction: Minnesota Secretary of State
Orig. Secured Party: ITT Commercial Finance Corp.
1400 North Central Life Tower
St. Paul, MN 55101
Date of Filing: April 4, 1990
Document Number: 1318479
Indebtedness: No debt; finance lease only.
Collateral: Equipment more specifically described on Schedule
1 attached hereto. This transaction represented by
this Financing Statement is a true lease. This UCC
is being filed for notification purposes only.
Equipment on Schedule 1:
(6) Paint booths; (2) Conveyors; (1) Flash-off
Oven; (3) Air Make Up Units; (2) Air Compressors;
(2) Air Dryers; (2) Bridge Cranes; (1) LPG System;
JIB Cranes; Paint Pumps; Paint Pots; Graco Pump;
Paint Pump System; Paint System; Paint System
Equipment; (1) Dust Collector; (1) Blower; Blast
Room Reclaim System; Air Inlet Assemblies; Shot
Blast Systems; Duct Work; Denustra Return Air
Safety Filter Panel; Fan Discharger Silencer;
Summer Exhaust Stack; (1) Power Shear; all
equipment more fully described on the referenced
Schedule 1.
Amendment: Date of Filing: November 28, 1994
Document No.: 1719472
Change Secured Party Address to:
10975 Benson Dr., Suite 220
Bldg. 12
Overland Park, KS 66210
5
<PAGE>
Continuation: Date of Filing: November 28, 1994
Document No.: 1719473
Assignment: Date of Filing: April 24, 1995
Document No.: 1755365
Assignee: General Electric Capital
Corporation
44 Old Ridgebury Road
Danbury, CT 06810
- --------------------------
4. Debtor: Ag-Chem Equipment Co., Inc.
Type of Filing: Original UCC-1 filing
Filing Jurisdiction: Jackson County, Minnesota
Orig. Secured Party: ITT Commercial Finance Corp
1400 North Central Life Tower
St. Paul, MN 55101
Date of Filing: April 9, 1990
Document Number: 265334
Collateral: The following equipment:
(6) Paint booths; (2) Conveyors; (1) Flash-off
Oven; (1) Air Make Up Unit; (2) Air Compressors;
(2) Air Dryers; (1) Bridge Crane; (1) LPG System;
JIB Cranes; Paint Pumps; Paint Pots; Graco Pump;
Paint Pump System; Paint System; Paint System
Equipment; (1) Dust Collector; (1) Blower; Blast
Room Reclaim System; Air Inlet Assemblies; Shot
Blast Systems; Duct Work; Denustra Return Air
Safety Filter Panel; Fan Discharger Silencer;
Summer Exhaust Stack; (1) Power Shear; all
equipment more fully described on the referenced
Schedule 1.
The equipment is located at 202 Industrial Park,
Jackson, MN 56143-9510, and legally described as
follows:
Tract 1
- -------
6
<PAGE>
That part of the Northeast Quarter of the
Southeast Quarter (NE 1/4 of SE 1/4) of Section
Thirteen (13), Township One Hundred Two (102)
North, Range Thirty-five (35), West of the Fifth
Principal Meridian, Jackson County, Minnesota,
described as follows: Commencing at the Northeast
corner of the Southeast Quarter (SE 1/4) of said
Section 13; thence South 00(degree)02'20" West
(assumed bearing), along the East line of said
Southeast Quarter (SE 1/4), a distance of 183.80
feet, to the point of beginning of the tract to be
described; thence North 89(degree)49'00" West
along a line parallel with the North line of said
Southeast Quarter (SE 1/4), a distance of 1059.90
feet; thence South 00(degree)02'20" West along a
line parallel with the East line of said Southeast
Quarter (SE 1/4), a distance of 821.96 feet;
thence South 89(degree)49'00" East, along a line
parallel with the North line of said Southeast
Quarter (SE 1/4) a distance of 1059.90 feet, to
the East line of said Southeast Quarter (SE 1/4);
thence North 00(degree)02'20" East, along the East
line of said Southeast Quarter (SE 1/4), a
distance of 821.96 feet, to the point of
beginning.
Tract 2
- -------
That part of the Northeast Quarter of the
Southeast Quarter of Section 13, Township 102
North, Range 35 West of the Fifth Principal
Meridian in Jackson County, Minnesota, described
as follows: Commencing at the Northeast corner of
the Southeast Quarter of said Section 13; thence
South 00 degrees 02 minutes 20 seconds West
(assumed bearing), along the East line of said
Southeast Quarter, a distance of 183.80 feet;
thence North 89 degrees 49 minutes 00 seconds
West, along a line parallel with the North line of
said Southeast Quarter, a distance of 1059.90
feet, to the point of beginning of the tract to be
described; thence North 89 degrees 49 minutes 00
seconds West, along a line parallel with the North
line of said Southeast Quarter, a distance of
148.55 feet; thence South 00 degrees 02 minutes 20
seconds West, along a line parallel with the East
line of said Southeast Quarter, a distance of
821.96 feet; thence South 89 degrees 49 minutes 00
seconds East, along a line parallel with the North
line of said Southeast Quarter a distance of
148.67 feet; thence North 00 degrees 02 minutes 20
seconds East, along a line parallel with the East
line of said Southeast Quarter a distance of
821.96 feet, to the point of beginning.
7
<PAGE>
Amendment: Date of Filing: November 28, 1994
Document No.: 280294
Change Secured Party Address to:
10975 Benson Drive, Suite 220
Bldg. 12
Overland Park, KS 66210
Continuation: Date of Filing: November 28, 1994
Document No.: 280295
Total Assignment: Date of Filing: April 24, 1995
Document No.: 281415
Assignee: General Electric Capital Corp.
44 Old Ridgebury Road
Danbury, CT 06810
- --------------------------
5. Debtor: Ag-Chem Equipment Co., Inc.
Type of Filing: Original UCC-1 filing
Filing Jurisdiction: Minnesota Secretary of State
Orig. Secured Party: ITT Commercial Finance Corp.
12400 Portland Ave. So., Suite 125
Burnsville, MN 55337
Date of Filing: August 6, 1990
Document Number: 1349176
Indebtedness: No debt; finance lease only.
Collateral: Equipment more specifically described on Schedule
A attached hereto. This transaction represented by
this Financing Statement is a true lease. This UCC
is being filed for notification purposes only.
Equipment on Schedule A:
8
<PAGE>
One (1) Model 713012 Accurpress 130 ton X 12'
hydraulic press brake equipped with all standard
equipment wired 230 - 3 phase (less backgauge) 3"
x 3" dierail.
One (1) Model 528 Scrubber.
Material for Torit Dust collection system
including but not limited to duct work and pick-up
hoods.
Continuation: Date of Filing: March 21, 1995
Document No.: 1746451
Assignment: Date of Filing: May 4, 1995
Document No.: 1758696
Assignee: General Electric Capital Corp.
44 Old Ridgebury Road
Danbury, CT 06810
- --------------------------
6. Debtor: Ag-Chem Equipment Co., Inc.
Type of Filing: Original UCC-1 filing
Filing Jurisdiction: Jackson County, Minnesota
Orig. Secured Party: ITT Commercial Finance Corp.
12400 Portland Ave. So., Suite 125
Burnsville, MN 55337
Date of Filing: August 10, 1990
Document Number: 267406
Collateral: The following equipment:
One (1) Model 713012 Accurpress 130 ton X 12'
hydraulic press brake equipped with all standard
equipment wired 230 - 3 phase (less backgauge) 3"
x 3" dierail.
One (1) Model 528 Scrubber.
9
<PAGE>
Material for Torit Dust collection system
including but not limited to duct work and pick-up
hoods.
The equipment is located at 202 Industrial Park,
Jackson, MN 56143-9510, and legally described as
follows:
Tract 1
- -------
That part of the Northeast Quarter of the
Southeast Quarter (SE 1/4 of SE 1/4) of Section
Thirteen (13), Township One Hundred Two (102)
North, Range Thirty-five (35), West of the Fifth
Principal Meridian, Jackson County, Minnesota,
described as follows: Commencing at the Northeast
corner of the Southeast Quarter (SE 1/4) of said
Section 13; thence South 00(degree)02'20" West
(assumed bearing), along the East line of said
Southeast Quarter (SE 1/4), a distance of 183.80
feet, to the point of beginning of the tract to be
described; thence North 89(degree)49'00" West
along a line parallel with the North line of said
Southeast Quarter (SE 1/4), a distance of 1059.90
feet; thence South 00(degree)02'20" West along a
line parallel with the East line of said Southeast
Quarter (SE 1/4), a distance of 821.96 feet;
thence South 89(degree)49'00" East, along a line
parallel with the North line of said Southeast
Quarter (SE 1/4) a distance of 1059.90 feet, to
the East line of said Southeast Quarter (SE 1/4);
thence North 00(degree)02'20" East, along the East
line of said Southeast Quarter (SE 1/4), a
distance of 821.96 feet, to the point of
beginning.
Tract 2
- -------
That part of the Northeast Quarter of the
Southeast Quarter of Section 13, Township 102
North, Range 35 West of the Fifth Principal
Meridian in Jackson County, Minnesota, described
as follows: Commencing at the Northeast corner of
the Southeast Quarter of said Section 13; thence
South 00 degrees 02 minutes 20 seconds West
(assumed bearing), along the East line of said
Southeast Quarter, a distance of 183.80 feet;
thence North 89 degrees 49 minutes 00 seconds
West, along a line parallel with the North line of
said Southeast Quarter, a distance of 1059.90
feet, to the point of beginning of the tract to be
described; thence North 89 degrees 49 minutes 00
seconds West, along a line parallel with the North
line of said Southeast Quarter, a distance of
148.55 feet; thence South 00 degrees 02
10
<PAGE>
minutes 20 seconds West, along a line parallel
with the East line of said Southeast Quarter, a
distance of 821.96 feet; thence South 89 degrees
49 minutes 00 seconds East, along a line parallel
with the North line of said Southeast Quarter a
distance of 148.67 feet; thence North 00 degrees
02 minutes 20 seconds East, along a line parallel
with the East line of said Southeast Quarter a
distance of 821.96 feet, to the point of
beginning.
Continuation: Date of Filing: March 21, 1995
Document No.: 281201
Total Assignment: Date of Filing: May 3, 1995
Document No.: 281461
Assignee: General Electric Capital
Corporation
44 Old Ridgebury Road
Danbury, CT 06810
Continuation: Date of Filing: May 3, 1995
Document No.: 281462
Total Assignment: Date of Filing: May 3, 1995
Document No.: 281466
Assignee: General Electric Capital Corp.
44 Old Ridgebury Road
Danbury, CT 06810
- --------------------------
7. Debtor: Ag-Chem Equipment Co., Inc.
Type of Filing: Original UCC-1 filing
Filing Jurisdiction: Minnesota Secretary of State
Orig. Secured Party: ITT Commercial Finance Corp.
12400 Portland Ave. So., Suite 125
Burnsville, MN 55337
11
<PAGE>
Date of Filing: August 29, 1990
Document Number: 1354406
Indebtedness: No debt; finance lease only.
Collateral: Equipment more specifically described on Schedule
A attached hereto. This transaction represented by
this Financing Statement is a true lease. This UCC
is being filed for notification purposes only.
Equipment on Schedule A:
One (1) Artos linear cut and strip machine, Model
CS-26, equipped with all necessary tooling and
accessories.
One (1) Artos Hot Stamp wire Marker, Model WM-6,
equipped with heater, frame, numbers and all
necessary accessories.
One (1) Artos Prefeeder, Model PF-2, equipped with
DC (variable speed) drive, frame and accessories,
complete wire assembly machine with blades, types,
numbers and characters.
Total Assignment: Date of Filing: May 9, 1995
Document No.: 1760059
Assignee: General Electric Capital
Corporation
44 Old Ridgebury Road
Danbury, CT 06810
Continuation: Date of Filing: May 9, 1995
Document No.: 1760060
- --------------------------
8. Debtor: Ag-Chem Equipment Co., Inc.
Type of Filing: Original UCC-1 filing
Filing Jurisdiction: Minnesota Secretary of State
Orig. Secured Party: ITT Commercial Finance Corp.
12400 Portland Ave. So., Suite 125
Burnsville, MN 55337
12
<PAGE>
Date of Filing: October 5, 1990
Document Number: 1362964
Indebtedness: No debt; finance lease only.
Collateral: Equipment more specifically described on Schedule
A attached hereto. This transaction represented by
this Financing Statement is a true lease. This UCC
is being filed for notification purposes only.
Equipment on Schedule A:
One (1) Accurpress hydraulic press brake, Model
No. 732014, 14' x 320 ton complete with all
standard equipment, wired 3 phase, equipped with a
pair of 36" swing stock support arms complete with
T-slots and disappearing stops, 16" throat,
tonnage control (adjusted by rotary control knob
from front of press brake), adjustable bending
speed control, safety light curtain.
Total Assignment: Date of Filing: May 9, 1995
Document No.: 1760057
Assignee: General Electric Capital
Corporation
44 Old Ridgebury Road
Danbury, CT 06810
Continuation: Date of Filing: May 9, 1995
Document No.: 1760058
- --------------------------
9. Debtor: Ag-Chem Equipment Co., Inc.
Type of Filing: Original UCC-1 filing
Filing Jurisdiction: Minnesota Secretary of State
Orig. Secured Party: ITT Commercial Finance
12400 Portland Ave. So., Suite 125
Burnsville, MN 55337
Date of Filing: March 22, 1991
13
<PAGE>
Document Number: 1401964
Collateral: Equipment more specifically described on Schedules
No. 4 and 5 to Master Lease dated July 30, 1990
attached hereto.
Equipment listed on Schedules 4 and 5:
(1) 3H Brand Aperture card reader Modell B11AC;
(11) press brake dies; (1) 3M Quantimatic printer;
(2) Automec upgrades of G-24 gauge to Accurpress;
36" swing Stock Support Arms c/w T-Slots and
Disappearing stops for front gaugings; Tonnage
Control, Power Ram Tilt for Models 250 task or
smaller, Safety Light Curr'n, Hour Meter,
Adjustable Bending Speed Control, (1) Marvel
bandsaw machine Model 81A11PC
Total Assignment: Date of Filing: April 21, 1995
Document No.: 1755113
Assignee: General Electric Capital
Corporation
44 Old Ridgebury Road
Danbury, CT 06810
Continuation: Date of Filing: October 16, 1995
Document No.: 1796517
- --------------------------
10. Debtor: Ag-Chem Equipment Co., Inc.
Type of Filing: Original UCC-1 filing
Filing Jurisdiction: Minnesota Secretary of State
Secured Party: Butler Machinery Company
P.O. Box 9559
Fargo, ND 58106
Date of Filing: July 13, 1995
Document Number: 1775305
14
<PAGE>
Collateral: For the rental of the following: CAT GP25, S/N
5AM90482, and all substitutions, replacements,
additions and accessions thereto, now owned or
hereafter acquired, and proceeds thereof.
- --------------------------
11. Debtor: Ag-Chem Equipment Co., Inc.
Type of Filing: Original UCC-1 filing
Filing Jurisdiction: Minnesota Secretary of State
Secured Party: Gelco Corporation
Three Capital Drive
Eden Prairie, MN 55344
Date of Filing: October 30, 1995
Document Number: 1799755
Collateral: A first priority security interest in and to the
property identified below, together with i) all
accounts, contract rights, chattel paper,
instruments, documents, accounts receivables,
general intangibles, security deposits, or
reserves, ii) all repairs, accessories, additions,
attachments, replacements, substitutions, or
accessions and any related equipment, including,
but not limited to, chargers, and iii) all
insurance or other proceeds, all as may directly
or indirectly arise out of or be related to the
property identified below.
The parties agree that this security agreement and
financing statement is filed for precautionary
purposes only and does not and is not intended to
change the characteristics of the transaction as a
lease.
The terms and conditions of the Lease Agreement
between the undersigned dated August 23, 1995, are
hereby incorporated by reference and made a part
hereof.
(11) 1995 Prime-Mover low lift pallet trucks,
Model PMX, S/N PMX00258669, PMX00258671,
PMX00258670, PMX00258667, PMX00259143,
PMX00259144, PMX00259145, PMX00259146,
PMX00259147, PMX00259148, PMX00259149, Unit 95001
through 95011
15
<PAGE>
(9) 1995 Prime-Mover low lift pallet trucks, Model
RMX65, S/N RMX6525279001, RMX6525279003
RMX6525279002, RMX6525279005, RMX6525278001,
RMX6525279007, RMX6525279006, RMX6525279008,
RMX6525279004, Units 95012 through 95020
- --------------------------
12. Debtor: Ag-Chem Equipment Co., Inc.
Type of Filing: Original UCC-1 filing
Filing Jurisdiction: Jackson County, Minnesota
Secured Party: City of Jackson
80 West Ashley Street
Jackson, MN 56143
Date of Filing: December 4, 1995
Document Number: 283338
Collateral: 1995 Caterpillar DP100 lift truck, S/N M75580
- --------------------------
13. Debtor: Ag-Chem Equipment Co., Inc.
Type of Filing: Original UCC-1 filing
Filing Jurisdiction: Minnesota Secretary of State
Secured Party: Jackson County, Minnesota
Jackson County Courthouse
P.O. Box 374
Jackson, MN 56143
Date of Filing: December 8, 1995
Document Number: 1808866
Collateral: One used Caterpillar lift truck, diesel; 218" FF
mast; 72" forks; cab; S/N 70Y00886
16
<PAGE>
- --------------------------
14. Debtor: Ag-Chem Equipment Co., Inc.
Type of Filing: Original UCC-1 filing
Filing Jurisdiction: Minnesota Secretary of State
Secured Party: Gelco Corporation
Three Capital Drive
Eden Prairie, MN 55344
Date of Filing: December 11, 1995
Document Number: 1809300
Collateral: A first priority security interest in and to the
property identified below, together with i) all
accounts, contract rights, chattel paper,
instruments, documents, accounts receivables,
general intangibles, security deposits, or
reserves, ii) all repairs, accessories, additions,
attachments, replacements, substitutions, or
accessions and any related equipment, including,
but not limited to, chargers, and iii) all
insurance or other proceeds, all as may directly
or indirectly arise out of or be related to the
property identified below.
The parties agree that this security agreement and
financing statement is filed for precautionary
purposes only and does not and is not intended to
change the characteristics of the transaction as a
lease.
The terms and conditions of the Lease Agreement
between the undersigned dated August 23, 1995, are
hereby incorporated by reference and made a part
hereof.
(3) 1995 Caterpillar forklifts, Model GP25 LP, S/N
5AM90830, 5AM01911, 5AM01436, Unit 95028, 95029,
95030
- --------------------------
15. Debtor: Ag-Chem Equipment Co., Inc.
Type of Filing: Original UCC-1 filing
Filing Jurisdiction: Minnesota Secretary of State
Secured Party: Southwest MN Initiative Fund
P.O. Box 130
Granite Falls, MN 56241
17
<PAGE>
Date of Filing: December 11, 1995
Document Number: 1809320
Collateral: Okuma Model MV4VAE vertical machining center
including all standard equipment and the
following: 8 additional M-codes, rigid tapping,
S/N 9802, with splash tamer full enclosure
- --------------------------
16. Debtor: Ag-Chem Equipment Co., Inc.
Type of Filing: Original UCC-1 filing
Filing Jurisdiction: Minnesota Secretary of State
Secured Party: Gelco Corporation
Three Capital Drive
Eden Prairie, MN 55344
Date of Filing: January 26, 1996
Document Number: 1820406
Collateral: A first priority security interest in and to the
property identified below, together with i) all
accounts, contract rights, chattel paper,
instruments, documents, accounts receivables,
general intangibles, security deposits, or
reserves, ii) all repairs, accessories, additions,
attachments, replacements, substitutions, or
accessions and any related equipment, including,
but not limited to, chargers, and iii) all
insurance or other proceeds, all as may directly
or indirectly arise out of or be related to the
property identified below.
The parties agree that this security agreement and
financing statement is filed for precautionary
purposes only and does not and is not intended to
change the characteristics of the transaction as a
lease.
The terms and conditions of the Lease Agreement
between the undersigned dated August 25, 1995, are
hereby incorporated by reference and made a part
hereof.
18
<PAGE>
(4) 1995 Mitsubishi forklifts, Model GP25 LP, S/N
5AM02335, 5AM02342, 5AM02490, 5AM02491, Unit
95021, 95022, 95023, 95027
- --------------------------
17. Debtor: Ag-Chem Equipment Co., Inc.
Type of Filing: Original UCC-1 filing
Filing Jurisdiction: Minnesota Secretary of State
Secured Party: Gelco Corporation
Three Capital Drive
Eden Prairie, MN 55344
Date of Filing: March 8, 1996
Document Number: 1830773
Collateral: A first priority security interest in and to any
and all equipment of Lessee constituting material
handling equipment, including, but not limited to,
forklifts, order pickers, pallet jacks and
tuggers, that are now or hereafter leased from
Lessor, together with: i) all accounts, contract
rights, chattel paper, instruments, documents,
accounts receivables, general intangibles,
security deposits, or reserves, ii) all repairs,
accessories, additions, attachments, replacements,
substitutions, or accessions and any related
equipment, including, but not limited to,
chargers, and iii) all insurance or other
proceeds, all as may directly or indirectly arise
out of or be related to the equipment identified
above.
The parties agree that this Lease Agreement and
financing statement is filed for precautionary
purposes only and does not and is not intended to
change the characteristics of the transaction as a
lease.
The terms and conditions of the Lease Agreements
between the undersigned are hereby incorporated by
reference and made a part hereof.
Amendment: Date of Filing: March 31, 1997
Document No.: 1929038
19
<PAGE>
Reference was changed from filing of "security
agreement" for precautionary purposes in second
paragraph to "Lease Agreement" filed for
precautionary purposes.
- --------------------------
18. Debtor: Ag-Chem Equipment Co., Inc.
Type of Filing: Original UCC-1 filing
Filing Jurisdiction: Minnesota Secretary of State
Secured Party: Gelco Corporation, d/b/a GE Capital Fleet Services
Three Capital Drive
Eden Prairie, MN 55344
Date of Filing: May 6, 1997
Document Number: 1939361
Collateral: A first priority security interest in (1) 1997
Caterpillar DP100lift truck and (1) 1997
Caterpillar NRR45P reach truck; and to any and all
equipment of Lessee constituting material handling
equipment, and including, but not limited to,
forklifts, order pickers, pallet jacks and
tuggers, that are now or hereafter leased from
Lessor, together with: i) all accounts, contract
rights, chattel paper, instruments, documents,
accounts receivables, general intangibles,
security deposits, or reserves, ii) all repairs,
accessories, additions, attachments, replacements,
substitutions, or accessions and any related
equipment, including, but not limited to,
chargers, and iii) all insurance or other
proceeds, all as may directly or indirectly arise
out of or be related to the equipment identified
above.
The parties agree that this Lease Agreement and
financing statement is filed for precautionary
purposes only and does not and is not intended to
change the characteristics of the transaction as a
lease.
The terms and conditions of the Lease Agreements
between the undersigned are hereby incorporated by
reference and made a part hereof.
- --------------------------
19. INTENTIONALLY OMITTED
20
<PAGE>
- --------------------------
20. Debtor: Ag-Chem Equipment Co., Inc.
Type of Filing: Original UCC-1 filing
Filing Jurisdiction: Minnesota Secretary of State
Secured Party: City of Jackson
80 West Ashley Street
Jackson, MN 56143
Date of Filing: January 19, 1990
Document Number: 1299826
Collateral: One (1) hydraulic sheer (#00436F), one (1)
lubricator (#905044), one (1) squaring arm
(#640360), one (1) 230 volt kit (#640211), one (1)
Microcomputer control (#640416)
- --------------------------
21. Debtor: Ag-Chem Equipment Co., Inc.
Type of Filing: Original UCC-1 filing
Filing Jurisdiction: Minnesota Secretary of State
Secured Party: Jackson County
Jackson County Auditor
Jackson, MN 56143
Date of Filing: February 9, 1990
Document Number: 1305279
Collateral: GXM 1200 Dual Drive CNC Oxyfuel/Plasma Shape
Cutting machine; Strato SRX-20 Aerial work
platform; and Bauman Electric Sideloader, Model
E4S 100-48-236
- --------------------------
22. Debtor: Ag-Chem Equipment Co., Inc.
Type of Filing: Original UCC-1 filing
Filing Jurisdiction: Minnesota Secretary of State
21
<PAGE>
Secured Party: Southwest MN Initiative Fund
163 Ninth Avenue
Granite Falls, MN 56241
Date of Filing: January 5, 1990
Document Number: 1296350
Collateral: 1979 Turret Punch, Model #VELA II 305050, 33 ton
capacity, Serial #VII
Continuation: Date of Filing December 21, 1994
Document No.: 1724660
- --------------------------
23. Debtor: Ag-Chem Equipment Company Inc.
Type of Filing: Original UCC-1 filing
Filing Jurisdiction: Minnesota Secretary of State
Secured Party: Winnebago Industries Inc.
P.O. Box 152
Forest City, IA 50436
Date of Filing: January 25, 2000
Document Number: 2196105
Collateral: All items described on attached two (2) page list
entitled "Luggage Door Equipment" to Financing
Statement, any items associated with the attached
Work Agreement between the Secured Party,
Winnebago Industries, Inc., and the Business
Debtor, Ag-Chem Equipment Company, Inc. and all
additional equipment, tools, raw material and
parts provided hereafter by Secured Party.
- --------------------------
24. Debtor: Ag-Chem Equipment Co. Inc.
Type of Filing: Original UCC-1 filing
Filing Jurisdiction: Minnesota Secretary of State
22
<PAGE>
Secured Party: General Electric Capital Corp.
1415 West 22nd Street #800
Oak Book, IL 60521
Date of Filing: October 29, 1992
Document Number: 1540216
Collateral: This filing statement is being filed solely as a
precaution if, contrary to the intention of the
parties, the transaction relating to the property
described as 207 Industrial Park, Jackson, MN and
relating to Schedule No. 0001 to Master Lease
Agreement, attached to Financing Statement.
Continuation: Date of Filing: May 7, 1997
Document No.: 1939741
- --------------------------
25. Debtor: Loral Products Inc.
Type of Filing: Original UCC-1 filing
Filing Jurisdiction: Minnesota Secretary of State
Secured Party: Butler Machinery Co.
P.O. Box 9559
Fargo, ND 58106
Date of Filing: February 22, 2000
Document Number: 2203280
Collateral: For the rental of a Caterpillar GP4A M80890 s/n
1CM02103 and all substitutions, replacements,
additions and accessions thereto, now owned or
hereafter acquired, and proceeds thereof.
IBM Credit Corp also has several lines filed of record relating to equipment
financing which has been terminated. The company is in the process of having
these liens removed.
23
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