Exhibit 10.22 

 

FIRST AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT 

AGREEMENT DATED DECEMBER 22, 2003, AMONG ROYSTER-CLARK, INC., 

CERTAIN SUBSIDIARIES OF ROYSTER-CLARK, INC.,VARIOUS FINANCIAL 

INSTITUTIONS, U.S. BANK NATIONAL ASSOCIATION, as the Administrative Agent, and a 

Collateral Agent, and THE CIT GROUP/BUSINESS CREDIT, INC., as a Collateral Agent, 

 

and 

 

SUPPLEMENT AMENDING THE BORROWER PLEDGE AND SECURITY AGREEMENT 

AND SUBSIDIARY PLEDGE AND SECURITY AGREEMENT 

 

This First Amendment to Amended and Restated Revolving Credit Agreement and Supplement Amending the Borrower Pledge and Security Agreement and Subsidiary Pledge and Security Agreement (collectively, this“**Amendment**”) is made as of March 26, 2004 between Royster-Clark, Inc. a Delaware corporation (hereinafter referred to as “**Borrower**”), Royster-Clark Resources LLC, a Delaware limited liability company, Royster-ClarkAgribusiness, Inc. (f/k/a IMC AgriBusiness, Inc.), a Delaware corporation, Royster-Clark Nitrogen, Inc. (f/k/a IMC Nitrogen Company), a Delaware corporation, (individually a “**Co-Borrower**” and collectively, the“**Co-Borrowers**”), and the various financial institutions signatory hereto (being at least the Required Lenders with respect to paragraphs 1 through 7 and 11 and 12 hereof, and being all of the Lenders with respect to paragraphs 8, 9and 10 hereof). 

 

RECITAL 

 

With respect to the Amended and Restated Revolving Credit Agreement betweenBorrower, the Co-Borrowers and the Lenders dated December 22, 2003 (as amended, replaced, restated and/or supplemented from time to time, the “**Credit Agreement**”) and other Loan Documents, Borrower and the Co-Borrowers have requestedthat the Lenders amend and modify the Credit Agreement and other Loan Documents with respect to certain terms, Borrower and the Co-Borrowers have requested that the Lenders waive compliance with certain covenants under the Credit Agreement and otherLoan Documents, Borrower and the Co-Borrowers have requested that the Lenders consent to the release of certain Collateral in accordance with the Credit Agreement, and the Lenders are willing to do these things on the terms and conditions hereincontained. Except as defined herein, all capitalized terms used in this Amendment shall have meaning assigned to them in the Credit Agreement and other Loan Documents. 

 

NOW THEREFORE, in consideration of the foregoing and of the terms and conditions contained in the Credit Agreement and thisAmendment and of any loans or other financial accommodations heretofore, now or hereafter made to or for the benefit of Borrower and the Co-Borrowers by the Lenders, Borrower, the Co-Borrowers and the Lenders agree as follows: 

 

1. The parties acknowledge that the Credit Agreement and the other LoanDocuments make an incorrect reference to one of the Co-Borrowers as Royster-Clark Resources, LLC. The parties agree that each and every reference in the Credit Agreement and the other Loan Documents to Royster-Clark Resources, LLC shall be deemed areference to the correct name of this Co-Borrower, Royster-Clark Resources LLC. 

2. The last two sentences of Section 4.12 of the Credit Agreement, Bank Products ObligationsSubordinate, shall be amended to read as follows: 

 

Notwithstanding the terms of this Section 4.12, any other terms of this Agreement or any terms of any other Loan Document, the Agent shall first apply payments and proceeds of collateral to any charge-backs, payments pursuant to anyavoidance claims or any other loss, overdraft, or shortfall with respect to the deposit accounts maintained with the Agent or any other Lender as required by Section 7.1.9, to the extent that the funds that are the subject of suchcharge-backs, payments pursuant to any avoidance claims or any other loss, overdraft, or shortfall have been previously paid or applied by the Agent to the Obligations. In the event that such payments and proceeds of collateral are insufficient tocover such charge-backs, payments pursuant to any avoidance claims or any other loss, overdraft, or shortfall, then the Agent or any other Lender shall be indemnified for the resulting loss in the manner provided for in Section 9.1.

 

3. The last paragraph of Section 2.1 of the BorrowerPledge and the Security Agreement and the last paragraph of Section 2.1 Subsidiary Pledge and Security Agreement, shall, in each case, be amended to read as follows: 

 

Notwithstanding the foregoing, “Collateral” shall not include (a) equipment, machinery,furnishings, furniture, or fixtures (or any general intangibles or other rights described in clauses (e), (f) and (g) above directly relating to the use and possession of any of the foregoing and of any real property of theGrantor), including all parts thereof and all accessions, additions, attachments, improvements, substitutions and replacements thereto and therefor and all accessories related thereto, in which the holders of the First Mortgage Notes have previouslybeen granted a security interest, or (b) any general intangibles or other rights described in clause (e) above (and all products, rents, issues, profits, returns, income and proceeds thereof) arising under any licenses, permits or leasesdescribed in such clause as to which the grant of a security interest would constitute a violation of a valid and enforceable restriction in favor of a third party on such grant, unless and until and only to the extent any required consents shallhave been obtained, provided, however, that the Administrative Agent shall at all times have a lien on, and nothing contained herein shall be deemed to exclude from the term “Collateral”, products, rents, issues, profits, returns, incomeand proceeds of the Collateral described in the foregoing clause (b). The Grantor agrees to use its reasonable efforts to obtain any such required consent. 

 

4. ITEM 6.8 – Existing Subsidiaries, of Schedule I-2 to Amended and Restated Revolving Credit Agreement shall be amended to add: 

 

8. 100% partnership interest in Petersburg Agri-TerminalAssociates, a Virginia general partnership. 

 

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5. Section 7.1.4 of the Credit Agreement, Insurance, shall be amended as follows: Insubsection (a), the phrase “A+ Best Rating” shall be amended to read “A- Best Rating”. 

 

6. Borrower and the Co-Borrowers acknowledge the possible existence of the following Event of Default. The failure to list the 100% partnership interestin Petersburg Agri-Terminal Associates, a Virginia general partnership, in ITEM 6.8 – Existing Subsidiaries, of Schedule I-2 to Amended and Restated Revolving Credit Agreement, on December 22, 2003, may have caused the representation andwarranty of Borrower and the Co-Borrowers set forth in Section 6.8 of the Credit Agreement, Subsidiaries, to be incorrect in a material respect, which, if true, would constitute an Event of Default listed in Section 8.1.2 of theCredit Agreement, Breach of Warranty, (the “**Subsidiary Disclosure Default**”). Borrower and the Co-Borrowers acknowledge the existence of the following Event of Default. Since December 22, 2003, some of the companies providingproperty insurance to one or more of Borrower and the Co-Borrowers have either an A or an A- Best Rating in violation of Section 7.1.4 of the Credit Agreement, Insurance (the “**Insurance Default**”). Borrower and theCo-Borrowers acknowledge the existence of the following Event of Default. For several days after December 22, 2003, one or more of Borrower and the Co-Borrowers made deposits of cash collateral exceeding $250,000 into accounts that did not meet therequirements of Section 4.4(c) of the Borrower Pledge and Security Agreement and the Subsidiary Pledge and Security Agreement, respectively, which constitutes an Event of Default listed in Section 8.1.3 of the Credit Agreement,Non-Performance of Certain Covenants and Obligations, (the “**Deposit Account Default**”). Borrower and the Co-Borrowers represent and warrant to the Lenders that the use of deposit accounts for the deposit of cash collateralthat do not meet the requirements of Section 4.4(c) of the Borrower Pledge and Security Agreement and the Subsidiary Pledge and Security Agreement, respectively, has ceased and that the Deposit Account Default is no longer continuing. TheLenders shall and do hereby waive the Subsidiary Disclosure Default, the Insurance Default and the Deposit Account Default. Notwithstanding the foregoing waiver, it is expressly understood and agreed that the Lenders shall have the right at alltimes hereafter to require strict performance by Borrower and the Co-Borrowers of all terms of the Credit Agreement or any other Loan Document, including without limitation, the terms of the Credit Agreement and the other Loan Documents referred toabove, that the Lenders do not waive, affect or diminish any right, power or remedy of the Lenders under the Credit Agreement or any other Loan Document except as expressly set forth herein, and that except as expressly set forth herein, the CreditAgreement and each other Loan Document shall continue in full force and effect in accordance with their respective terms. 

 

7. As used in this Amendment, the term “Marker Intellectual Property” shall mean the property held (i) as licensee or otherwise under PatentNos. 5,859,349 and 5,994,621; and (ii) as licensee to the Vigoro trademark and all dealer and customer lists for sales of goods associated or identified with the Vigoro trademark associated with the seed products. The Marker Intellectual Property isCollateral securing the Obligations. In order to obtain the loan that will give rise to the Vendor Debt, that Borrower is allowed to incur in accordance with subsection (o) of Section 7.2.2 of the Credit Agreement, Indebtedness, theJoint Marketing Vendor requires an exclusive first priority security interest in the Marker Intellectual Property and Borrower has requested a release of the Marker Intellectual Property for this purpose. Borrower and the Co- 

 

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Borrowers hereby represent and warrant to the Lenders that the aggregate book value of the Marker Intellectual Propertyis $2,960,000 (the “**MIP Book Value**”). In accordance with clause (ii) of subsection (b) of Section 10.1 of the Credit Agreement, Waivers, Amendments, etc, the Agent shall, at the request of Borrower and with the consentof the Required Lenders, release collateral (in addition to collateral released in accordance with Section 7.2.9 of the Credit Agreement) with an aggregate book value not to exceed $5,000,000 during any fiscal year of Borrower, provided thata reasonably equivalent amount of cash proceeds is generated and paid to the Lenders as Net Disposition Proceeds. The Required Lenders shall and do hereby consent to the release of the Marker Intellectual Property. It is acknowledged that theCollateral Agents shall continue to require that the Vendor Debt be as set forth in written agreements and related documents reasonably satisfactory to the Collateral Agents (including subordination or intercreditor agreements as may be reasonablyrequired by the Collateral Agents), and that pursuant thereto, but not by way of limitation, the Collateral Agent shall require that the Joint Marketing Vendor disclaim any right to Inventory or Receivables, or the proceeds thereof, whether by wayof an interest in the Marker Intellectual Property or by way of right of setoff, and shall require that the Joint Marketing Vendor subordinate its rights in the Marker Intellectual Property to the license therein held by the Agent under the terms ofthe Borrower Pledge and Security Agreement and Subsidiary Pledge and Security Agreement for the purpose of liquidating inventory (which license shall not be released by the Agent). 

 

8. Notwithstanding the terms of clause (ii) of subsection (b) of Section 10.1 of the Credit Agreement, Waivers,Amendments, etc, a reasonably equivalent amount of cash proceeds from the release of the Marker Intellectual Property shall not be required to be generated and paid to the Lenders as Net Disposition Proceeds. For purposes of clarification, andnotwithstanding the terms of subsection (d) of Section 7.2.9 of the Credit Agreement, Asset Dispositions, etc, the parties acknowledge and agree that the grant of a security interest in the Marker Intellectual Property to the JointMarketing Vendor shall not be treated as a Disposition of the Marker Intellectual Property, with the understanding that any subsequent foreclosure or sale of the Marker Intellectual Property pursuant to that grant of security interest would be aDisposition of the property to the extent of such foreclosure or sale. Nonetheless, and even though no proceeds of the Vendor Debt are being paid to the Lenders as Net Disposition Proceeds, in the event of such subsequent Disposition, Borrower shallnot be required to prepay the Loans pursuant to the terms of Section 3.1.1 and Section 3.1.2 of the Credit Agreement and as contemplated by the terms of subsection (d) of Section 7.2.9 of the Credit Agreement, such requiredprepayment being hereby waived. 

 

9. In order to amend thedefinition of Seasonal Period, subsection (a) of the definition of Net Asset Value as set forth in Section 1.1 of the Credit Agreement, Defined Terms, shall be amended to read as follows: 

 

(a) with respect to Accounts, as reflected on the books ofBorrower and the Co-Borrowers in accordance with GAAP, an amount equal to (i) 80% of the book value of all Eligible Accounts which are Regular Accounts (provided that during the months of September, October, November and December (the“Seasonal Period”) the advance rate shall be 85%), plus (ii) 70% of all Eligible Accounts which are Crop Term Accounts (provided that (A) the advance rate 

 

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during the Seasonal Period shall be 75% and (B) the aggregate amount of such Crop Term Accounts shall belimited, before applying the relevant advance rate, to $100,000,000), less (iii) all credits, discounts, allowances (and net of all unissued credits in the form of competitive allowances or otherwise) and other reserves deemed appropriate by theAgent; and 

 

10. Royster-Clark Resources LLC desires to swap anunimproved one acre parcel of real property it owns in Prince George County, Virginia, for another unimproved one acre parcel presently owned by Andrews-Joyner Iron Works, Inc. (the “**Land Swap**”). In order to accomplish the Land Swapthe Agent will be required to release the property to be conveyed from the Deed of Trust in favor of the Agent for the ratable benefit of the Lenders. On the condition that the property to be received in the Land Swap be added to the Deed of Trustcovering property to be conveyed in the Land Swap, and notwithstanding the terms of clause (ii) of subsection (b) of Section 10.1 of the Credit Agreement, Waivers, Amendments, etc, the Lenders consent to the release of the property tobe conveyed in the Land Swap and agree that a reasonably equivalent amount of cash proceeds from the release of the property to be conveyed in the Land Swap shall not be required to be generated and paid to the Lenders as Net Disposition Proceeds.

 

11. A new Section 6.5 shall be added to the BorrowerPledge and the Security Agreement and the Subsidiary Pledge and Security Agreement (which shall supercede Section 4 of each Trademark Security Agreement), to read as follows: 

 

SECTION 6.5. License Grant. Upon an Event of Default, the Grantor grants to the Administrative Agentfor its benefit and for the benefit of each Secured Party, and the Administrative Agent accepts for the term of this Agreement, an exclusive world-wide royalty-free license to use the Trademark Collateral and the Patent Collateral on or inconnection with the marketing, distribution and sale of Inventory subject to the terms of the Credit Agreement. The Administrative Agent shall have no right to grant sublicenses under this grant; provided, however, that AdministrativeAgent may grant a sublicense to an Affiliate. The grant to the Administrative Agent of the exclusive license to use the Trademark Collateral and the Patent Collateral as provided herein shall not, however, prohibit the Grantor from continuing to usethe Trademark Collateral and the Patent Collateral on or in connection with the marketing, distribution and sale of Inventory subject to the terms of the Credit Agreement. 

 

12. To induce the Agent, the Collateral Agents and the Lenders to enter into this Amendment, Borrower and the Co-Borrowersacknowledge and agree that they have no actual or potential claim or cause of action against the Agent, the Collateral Agents and the Lenders relating to any Loan Documents or any actions or events occurring on or before the date hereof. Borrowerand the Co-Borrowers waive and release any right to assert same. 

 

13. Incorporation of Credit Agreement and other Loan Documents. The parties hereto agree that this Amendment shall be an integral part of the Credit Agreement and other Loan Documents, and that all of the terms set forth therein are herebyincorporated in this 

 

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Amendment by reference, and that all terms of this Amendment are hereby incorporated into said Credit Agreement and otherLoan Documents, as if made an original part thereof. All of the terms and conditions of the Credit Agreement and other Loan Documents, which are not modified in this Amendment, shall remain in full force and effect. To the extent the terms of thisAmendment conflict with the terms of the Credit Agreement and other Loan Documents, the terms of this Amendment shall control. 

 

{SIGNATURE PAGES TO FOLLOW} 

 

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[Signature Page to First Amendment to Amended and Restated Revolving Credit Agreement and Supplement Amending theBorrower Pledge and Security Agreement and Subsidiary Pledge and Security Agreement Dated as of March 26, 2004] 

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the day and year first hereinabove written. 

 

BORROWER

 

ROYSTER-CLARK, INC., Borrower

1251 Avenue of the Americas

9th Floor, Suite 900 NewYork,

New York 10020

By:
 /s/    Paul M. Murphy            **Paul M. Murphy**
Its
 
**Chief Financial Officer**

 

CO-BORROWERS

 

ROYSTER-CLARKRESOURCES LLC

By
 
/s/    Paul M. Murphy        
  **Paul M. Murphy**
Its
 
**Vice President**

ROYSTER-CLARK AGRIBUSINESS,

INC. (f/k/a IMC AgriBusiness, Inc.)

By
 
/s/     Paul M. Murphy        
  **Paul M. Murphy**
Its
 
**Vice President**

ROYSTER-CLARK NITROGEN, INC.

(f/k/a IMC Nitrogen Company)

By
 
/s/     Paul M. Murphy        
  **Paul M. Murphy**
Its
 
**Vice President**

LENDERS

 

U.S. BANK NATIONAL ASSOCIATION, as Agent, as Collateral Agent and as a Lender

950 17th Street, Suite 350

Denver, Colorado 80202

By
 
/s/     Alan V. Schuler        
  **Alan V. Schuler**
Its
 
**Vice President**

 

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[Signature Page to First Amendment to Amended and Restated Revolving Credit Agreement and Supplement Amending theBorrower Pledge and Security Agreement and Subsidiary Pledge and Security Agreement Dated as of March 26, 2004] 

 

THE CIT GROUP/BUSINESS CREDIT,

INC., as Collateral Agent and as a Lender

1211 Avenue of the Americas

New York, New York 10036

By:
 /s/    Mark Cuccinello            **Mark Cuccinello**
Its
 
**Assistant Vice President**

BANK OF AMERICA, N.A.

600 Peachtree Street,10th Floor

Atlanta,Georgia 30308

By
 
/s/    John L. Anderson        
  **John L. Anderson**
Its
 
**Vice President**

FLEET CAPITAL CORPORATION

1633 Broadway, 29th Floor

New York, New York 10019

By
 
/s/     Suzanne Cozine        
  **Suzanne Cozine**
Its
 
**Vice President**

UBS AG, STAMFORD BRANCH

677 Washington Blvd.

Stamford, Connecticut 06902

By
 
/s/     Barbara Ezell-McMichael        
  **Barbara Ezell-McMichael**
Its
 
**Associate Director**

By
 
/s/     Salloz Skikka        
  **Salloz Skikka**
Its
 
**Associate Director**

 

CONGRESS FINANCIALCORPORATION

1133 Avenue of Americas, 29thFloor

New York, New York10036-6710

By
 
/s/     David Hill        
  **David Hill**
Its
 
**Assistant Vice President**

 

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[Signature Page to First Amendment to Amended and Restated Revolving Credit Agreement and Supplement Amending theBorrower Pledge and Security Agreement and Subsidiary Pledge and Security Agreement Dated as of March 26, 2004] 

 

PNC BANK, NATIONAL ASSOCIATION

One PNC Plaza-6th Floor

249 5th Avenue

Pittsburgh, Pennsylvania 15222

By:
 /s/    Peter Redington            **Peter Redington**
Its
 
**Assistant Vice President**

MERRILL LYNCH CAPITAL, A

DIVISION OF MERRILL LYNCH

BUSINESS FINANCIAL SERVICES INC.

225 Liberty Street, 5th Floor

New York, New York 10281

By
 
/s/    Richard Holston        
  **Richard Holston**
Its
 
**Vice President**

WEBSTER BUSINESS CREDIT

CORPORATION (f/k/a Whitehall Business

Credit Corporation)

One State Street, 7th Floor

New York, New York 10004

By
 
/s/     Alan F. McKay        
  **Alan F. McKay**
Its
 
**Vice President**

 

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