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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
JANUARY 18, 2000 (JANUARY 1, 2000)
Date of Report (Date of earliest event reported)
SOUTHERN FOODS GROUP, L.P.
(Exact name of registrant as specified in its charter)
DELAWARE 333-49289 75-2571364
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
3114 SOUTH HASKELL
DALLAS, TEXAS 75223
(Address of principal executive offices and zip code)
(214) 824-8163
(Registrant's telephone number,
including area code)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT
Effective January 1, 2000, a change in control (the "Change in
Control") of Southern Foods Group, L.P. (the "Company") occurred.
The new owner of all of the limited partnership interests in the
Company is Suiza Fluid Dairy Group, L.P. (the "Limited Partner") SFG Management
Limited Liability Company remains the general partner of the Company; however,
the general partner is now owned 95% by the Limited Partner and 5% by Suiza
Management Corporation, a wholly-owned subsidiary of Suiza Foods Corporation
("Suiza Foods"). The general partner continues to own a 1% interest in the
Company, and the Limited Partner owns the remaining 99%.
The Limited Partner is a joint venture between Suiza Foods and Dairy
Farmers of America, Inc. ("DFA"). DFA, a previous owner of the Company, owns
33.8% of the Limited Partner and Suiza Foods owns the remaining 66.2%. DFA
received its ownership interest in the Limited Partner in exchange for its
interest in the Company, and for the contribution of its investments in its
other joint ventures with Suiza Foods. Suiza Foods received its ownership
interest in the Limited Partner in exchange for the contribution of all of its
domestic fluid dairy operations. The proportional ownership interests received
by DFA and Suiza Foods were determined by negotiations between the parties. In
connection with the Change in Control, the Limited Partner also acquired Mr.
Pete Schenkel's entire ownership interest in the Company; and Suiza Management
Corporation acquired his interest in the general partner of the Company.
Simultaneously with the completion of the Change in Control, the
Limited Partner and the Company entered into a new $1.61 billion credit
facility, up to $240 million of which is available for borrowing by the Company.
Approximately $1.1 billion was borrowed under this facility at closing, $180
million of which was borrowed by the Company. The Company's previously existing
credit facility was terminated in connection with the Change in Control.
Borrowings under this facility were used to repay certain obligations of the
Company and of the operations contributed to the Limited Partner by Suiza Foods.
Borrowings under the Limited Partner's new credit facility are secured by a
pledge of the equity interests in the Limited Partner's material subsidiaries,
including the Company and SFG Management Limited Liability Company, the
Company's general partner. Lenders under the facility include First Union
National Bank, as administrative agent, Bank One, NA, as syndication agent, Bank
of America, N.A. and Fleet Bank, N.A., as co-documentation agents, and a
syndicate of other lenders.
The credit facility, which consists of a revolving credit facility and
term loans, will expire January 4, 2005. Amounts outstanding under the facility
currently bear interest at a rate per annum equal to a base rate plus 100 basis
points, or The London Interbank Offering Rate plus 200 basis points. The
interest rate margins will change from time to time depending on the Limited
Partner's consolidated leverage ratio, which is the ratio of debt to EBITDA, as
defined in the agreement. The credit agreement contains various financial and
other restrictive covenants and requirements that the Limited Partner
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maintain certain financial ratios, including a leverage ratio and an interest
coverage ratio. In addition, the agreement provides that the Limited Partner
must maintain a minimum level of consolidated net worth, as defined in the
agreement. The agreement also contains limitations on liens, investments, the
incurrence of additional debt and acquisitions, and prohibits certain
dispositions of property.
ITEM 5. OTHER EVENTS
(1) Completion of Transaction with Suiza Foods and New Credit Facility
On January 4, 2000, the Company, together with Suiza Foods, issued a
press release, a copy of which is filed as Exhibit 99.1, announcing
consummation of a previously announced transaction which resulted in the Change
in Control of the Company and the termination of the Company's existing senior
credit facility and execution of a new credit facility for the Company.
(2) Changes in Officers and Directors of the General Partner
Simultaneously with the closing of the Change in Control, Mr. Rick
Beaman, Executive Vice President of the general partner of the Company, was
appointed Chief Operating Officer of the general partner of the Company. Also
with the closing of the transaction, Pete Schenkel, formerly President and
Chief Executive Officer of the general partner of the Company, became the
President of the Limited Partner and Vice Chairman of Suiza Foods' Board of
Directors. Gregg Engles, Chairman of the Board and Chief Executive Officer of
Suiza Foods, is now the Chief Executive Officer of the general partner of the
Company, and Mr. Schenkel remains the President of the general partner of the
Company. Upon completion of the Change in Control, all of the former members of
the Board of Directors of the general partner of the Company resigned, and
Michelle Goolsby, Chief Administrative Officer and General Counsel of Suiza
Foods, was elected sole director.
(3) Repurchase of 9 7/8% Senior Subordinated Notes due 2007
From time to time the Company has repurchased its 9 7/8% Senior
Subordinated Notes due 2007 ("Notes"). On December 31, 1999, the Company
purchased $17 million of the Notes from DFA at 101% of the outstanding principal
amount. This purchase price is the same as will be offered to all Noteholders as
a result of the Change in Control, as required under the Indenture. The Company
will offer to repurchase all outstanding Notes at 101% of the outstanding
principal amount as a result of the Change in Control no later than January 31,
2000, and will close the repurchase no later than March 31, 2000.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
(c) Exhibits
Exhibit No. Description
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3.1 Third Amended and Restated Limited
Partnership Agreement of the Company
10.1 Credit Agreement dated as of January 4,
2000 among Suiza Fluid Dairy Group, L.P.
and the Company as borrowers, certain
domestic subsidiaries of the parent
borrower, the lenders party thereto,
First Union National Bank as
administrative Agent, Bank One, NA as
syndication agent, Bank of America, N.A.
and Fleet National Bank as
co-documentation agents
99.1 Press Release
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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.
SOUTHERN FOODS GROUP, L.P.
By: SFG Management Limited Liability Company,
General Partner
Dated: January 18, 2000 By: /s/ Lisa N. Tyson
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Lisa N. Tyson, Vice President
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
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<S> <C>
3.1 Third Amended and Restated Limited
Partnership Agreement of the Company
10.1 Credit Agreement dated as of January 4,
2000 among Suiza Fluid Dairy Group, L.P.
and the Company as borrowers, certain
domestic subsidiaries of the parent
borrower, the lenders party thereto,
First Union National Bank as
administrative Agent, Bank One, NA as
syndication agent, Bank of America, N.A.
and Fleet National Bank as
co-documentation agents
99.1 Press Release
</TABLE>
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EXHIBIT 3.1
THIRD AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
SOUTHERN FOODS GROUP, L.P.
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THIRD AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
SOUTHERN FOODS GROUP, L.P.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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ARTICLE I GENERAL
<S> <C> <C>
1.1 Continuation............................................................................ 1
1.2 Purpose................................................................................. 1
1.3 Commencement and Term................................................................... 1
1.4 Offices and Addresses................................................................... 1
1.5 State Law Partnership................................................................... 2
ARTICLE II DEFINITIONS......................................................................... 2
ARTICLE III CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS
3.1 Capital Contributions................................................................... 4
3.2 Capital Accounts........................................................................ 4
ARTICLE IV ALLOCATIONS
4.1 Allocation of Profits and Losses........................................................ 7
4.2 Special Allocations..................................................................... 8
4.3 Curative Allocations.................................................................... 9
4.4 Tax Allocations: Code Section 704(c).................................................... 10
4.5 Other Allocation Rules.................................................................. 10
ARTICLE V DISTRIBUTIONS
5.1 Distributions of Distributable Cash..................................................... 11
ARTICLE VI RIGHTS AND OBLIGATIONS OF PARTNERS
6.1 General Partner......................................................................... 11
6.2 Authority of Limited Partner............................................................ 12
6.3 Reimbursement of Expenses............................................................... 12
6.4 Outside Activities...................................................................... 12
</TABLE>
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<TABLE>
ARTICLE VII TAX MATTERS; BOOKS AND RECORDS
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7.1 Tax Matters Partner..................................................................... 12
7.2 Annual Tax Return....................................................................... 12
7.3 Tax Elections........................................................................... 13
7.4 Taxation as a Partnership............................................................... 13
7.5 Books, Records and Accounting........................................................... 13
ARTICLE VIII RESTRICTIONS ON TRANSFER
8.1 Consent of Partners Required for All Transfers.......................................... 13
8.2 Substitute Partners..................................................................... 13
8.3 No Additional Partnership Interests..................................................... 13
ARTICLE IX DISSOLUTION AND WINDING UP
9.1 Dissolution............................................................................. 14
9.2 Reconstitution.......................................................................... 14
9.3 Liquidation............................................................................. 14
9.4 Distribution in Kind.................................................................... 14
9.5 Termination of Partnership.............................................................. 15
ARTICLE X GENERAL PROVISIONS
10.1 Addresses and Notices................................................................... 15
10.2 Titles and Captions..................................................................... 15
10.3 Pronouns and Plurals.................................................................... 15
10.4 Further Action.......................................................................... 15
10.5 Binding Effect.......................................................................... 15
10.6 Integration............................................................................. 15
10.7 Third Party Beneficiaries............................................................... 15
10.8 Amendment and Waiver.................................................................... 16
10.9 Counterparts............................................................................ 16
10.10 Applicable Law.......................................................................... 16
10.11 Invalidity of Provisions................................................................ 16
</TABLE>
EXHIBIT
Exhibit A - Partners and Percentage Interests
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THIRD AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
SOUTHERN FOODS GROUP, L.P.
THIS THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (the
"Agreement") is entered into by and between SFG Management, LLC, a Delaware
limited liability company (the "General Partner"), and Suiza Fluid Dairy Group,
L.P., a Delaware limited partnership (the "Limited Partner" and, together with
the General Partner, the "Partners").
ARTICLE I
GENERAL
1.1 Continuation. The Partnership was formed as a limited partnership
in accordance with the Delaware Act on December 20, 1994, and the Partners, who
are the transferees of all of the partnership interests in the Partnership,
hereby agree to continue the Partnership as a limited partnership pursuant to
the provisions of the Delaware Act. The Partners hereby enter into this
Agreement in order to set forth the rights and obligations of the Partners and
certain matters related thereto. Except as expressly provided and permitted
herein to the contrary, the rights and obligations of the Partners and the
administration and termination of the Partnership shall be governed by the
Delaware Act.
1.2 Purpose. The purpose and business of the Partnership is to engage
in any lawful business activities permitted by the Act and all other actions
reasonably necessary or advisable in connection therewith or incident thereto.
1.3 Commencement and Term. The Partnership commenced on December 20,
1994, and will continue in existence until the termination of the Partnership
in accordance with the provisions of Section 9.1.
1.4 Offices and Addresses. The principal office of the Partnership and
the registered office of the Partnership shall be 1013 Centre Road, Wilmington,
Delaware 19805, and the registered agent for service of process on the
Partnership shall be Corporation Service Partnership, or such other registered
office or registered agent as the General Partner may from time to time
designate. The principal office of the Partnership shall be at 2515 McKinney
Ave., LB 30, Suite 1200, Dallas, Texas 75201, or such other place as the
General Partner may from time to time designate. The Partnership may maintain
offices at such other place or places as the General Partner deems advisable.
The address of each Partner is the address of such Partner appearing on the
books of the Partnership from time to time.
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1.5 State Law Partnership. The Partners intend that the Partnership be
treated as a limited partnership in accordance with the Delaware Act for all
purposes under state law. The Partnership is not a sole proprietorship, and
this Agreement shall not be construed to provide otherwise.
ARTICLE II
DEFINITIONS
In addition to the other terms defined elsewhere in this Agreement,
the following terms have the meanings indicated:
"Agreement" means this Third Amended and Restated Limited Partnership
Agreement of Southern Foods Group, L.P., as it may be amended, supplemented, or
restated from time to time.
"Book Value" has the meaning set forth in Section 3.2(c).
"Capital Account" means the capital account maintained for each Partner
pursuant to Section 3.2.
"Capital Contribution" means any cash or other property contributed by
either Partner to the Partnership pursuant to the provisions of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended and in
effect from time to time.
"Delaware Act" means the Delaware Revised Limited Partnership Act, 6
Del. C. Section 17-101, et seq., as it may be amended from time to time, and any
successor to such Delaware Act.
"Distributable Cash" means the amount by which the aggregate amount of
all cash and cash equivalents from time to time held by the Partnership on hand
or in bank accounts or other temporary investments pending distribution,
exceeds the aggregate of all amounts to be paid or set aside by the Partnership
for: (i) when due, all principal and interest payments on indebtedness of the
Partnership and all other sums payable to lenders; (ii) all cash expenditures
to be incurred in the normal operations of the business of the Partnership; and
(iii) such cash reserves as the General Partner may mutually deem reasonably
necessary for the proper operation of the business of the Partnership.
"Effective Date" means January 1, 2000.
"Fair Market Value" means the price in cash, or its equivalent, that
an asset would bring considering its highest and most profitable use, it then
offered for sale in the open market, in competition with other similar assets
at or near the same location, with a reasonable time allowed to find a
purchaser.
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"General Partner" means SFG Management, and any other Person who is
admitted as a General Partner in the Partnership on and after the Closing Date
and whose admission has been reflected on the books and records of the
Partnership.
"Independent Accountants" means any of the five largest nationally
recognized accounting firms in the Unites States, as selected by the General
Partner. Deloitte & Touche LLP shall be the initial Independent Accountant.
"Limited Partner" means Suiza Fluid Dairy Group, L.P. and any other
Person who is admitted as a Limited Partner in the Partnership on and after the
Closing Date and whose admission has been reflected on the books and records of
the Partnership.
"Liquidator" has the meaning set forth in Section 9.3.
"Losses" has the meaning set forth in Section 3.2(b).
"Partner" means SFG Management, Suiza Fluid Dairy Group, L.P., and any
other Person who is admitted as a Partner in the Partnership on and after the
Closing Date and whose admission has been reflected on the books and records of
the Partnership.
"Partnership" means the limited partnership continued pursuant to this
Agreement.
"Partnership Interest" means the interest of a Partner in the
Partnership hereunder, including without limitation such Partner's right (a) to
an allocable share of the profits, losses, deductions and credits of the
Partnership, (b) to a distributive share of the assets of the Partnership and
(c) to participate in the management of the Partnership, or to vote with
respect to certain matters, on the terms set forth in this Agreement.
"Percentage Interest" means, for each Partner, the percentage set
forth opposite such Partner's name on Exhibit A hereto as the Percentage
Interest of such Partner.
"Person" means any individual, corporation, partnership, trust or
other entity.
"Profits" has the meaning set forth in Section 3.2(b).
"Regulations" means the Department of Treasury Regulations promulgated
under the Code, as amended and in effect (including corresponding provisions of
succeeding regulations).
"SFG Management" means SFG Management, LLC, a Delaware limited
liability company.
"Tax Matters Partner" has the meaning set forth in Section 7.1.
"Transfer" has the meaning set forth in Section 8.1.
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ARTICLE III
CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS
3.1 Capital Contributions. The transferors to the current Partners
have previously made Capital Contributions to the Partnership. No Partner will
be required or allowed to make any additional Capital Contribution unless such
additional Capital Contribution has been approved by all Partners. If the
Partners approve any additional Capital Contribution, such contribution will be
made by all of the Partners in the same proportion as their Percentage
Interests.
3.2 Capital Accounts.
(a) Maintenance Rules. The Partnership shall maintain for
each Partner a separate Capital Account in accordance with this
Section 3.2, which shall control the division of assets upon
liquidation of the Partnership as provided in Section 9.3. The Capital
Account shall be maintained in accordance with the following
provisions:
(i) Such Capital Account shall be increased by the
cash amount or Book Value of any property contributed by such
Partner to the Partnership pursuant to this Agreement, such
Partner's allocable share of Profits and any items in the
nature of income or gain which are specially allocated to
such Partner pursuant to Section 4.2 and Section 4.3 hereof,
and the amount of any Partnership liabilities assumed by such
Partner or which are secured by any property distributed to
such Partner.
(ii) Such Capital Account shall be decreased by the
cash amount or Book Value of any property distributed to such
Partner pursuant to this Agreement, such Partner's allocable
share of Losses and any items in the nature of deductions or
losses which are specially allocated to such Partner pursuant
to Section 4.2 and Section 4.3 hereof, and the amount of any
liabilities of the Partner assumed by the Partnership or
which are secured by any property contributed by such Partner
to the Partnership.
(iii) In the event all or a portion of an interest
in the Partnership is transferred in accordance with the
terms of this Agreement, the transferee shall succeed to the
Capital Account of the transferor to the extent it relates to
the transferred interest; provided, however, that if the
transfer causes a termination of the Partnership under
Section 708(b)(1)(B) of the Code, then the Partnership shall
be deemed to have contributed its assets to a new limited
partnership in exchange for interests in the new limited
partnership, followed by a distribution of the interests in
the new limited partnership to the Partnership and
liquidation of the Partnership. Such deemed liquidation and
reconstitution shall not cause the Partnership to be
dissolved or reconstituted for purposes other than
maintenance of the Capital Accounts and federal income tax,
unless otherwise provided in Article IX.
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The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts generally are intended
to comply with Section 1.704-1(b) of the Regulations and shall be
interpreted and applied in a manner consistent with such Regulations.
If the General Partner reasonably determines that it is prudent to
modify the manner in which the Capital Accounts, or any increases or
decreases to the Capital Accounts, are computed in order to comply
with such Regulations, the General Partner may authorize such
modifications.
(b) Definition of Profits and Losses. "Profits" and "Losses"
mean, for each Fiscal Year or other period, an amount equal to the
Partnership's taxable income or loss for such year or period,
determined in accordance with Code Section 703(a) (for this purpose,
all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in
taxable income or loss), with the following adjustments:
(i) Income of the Partnership that is exempt from
federal income tax and not otherwise taken into account in
computing Profits and Losses pursuant to this Section 3.2(b)
shall be added to such taxable income or loss;
(ii) Any expenditures of the Partnership described
in Code Section 705(a)(2)(B), or treated as Code Section
705(a)(2)(B) expenditures pursuant to Regulations Section
1.704-1(b)(2)(iv)(i), and not otherwise taken into account in
computing Profits and Losses pursuant to this Section 3.2(b)
shall be subtracted from such taxable income or loss;
(iii) In the event the Book Value of any Partnership
asset is adjusted pursuant to Section 3.2(c)(ii) or Section
3.2(c)(iii), the amount of such adjustment shall be taken
into account as gain or loss from the disposition of such
asset for purposes of computing Profits and Losses;
(iv) Gain or loss resulting from any disposition of
property with respect to which gain or loss is recognized for
federal income tax purposes shall be computed by reference to
the Book Value of the property disposed of, notwithstanding
that the adjusted tax basis of such property differs from its
Book Value;
(v) In lieu of the deduction for depreciation, cost
recovery or amortization taken into account in computing such
taxable income or loss, there shall be taken into account
"Book Depreciation" as defined in this Section 3.2(b)(v).
"Book Depreciation" for any asset means for any Fiscal Year
or other period an amount that bears the same ratio to the
Book Value of that asset at
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the beginning of such Fiscal Year or other period as the
federal income tax depreciation, amortization or other cost
recovery deduction allowable for that asset for such year or
other period bears to the adjusted tax basis of that asset at
the beginning of such year or other period. If the federal
income tax depreciation, amortization, or other cost recovery
deduction allowable for any asset for such year or other
period is zero, then Book Depreciation for that asset shall be
determined with reference to such beginning Book Value using
any reasonable method selected by the General Partner; and
(vi) Notwithstanding any other provision of this
Section 3.2(b), any items that are specially allocated
pursuant to Section 4.2 or Section 4.3 shall not be taken
into account in computing Profits and Losses.
(c) Definition of Book Value. "Book Value" means for any asset
the asset's adjusted basis for federal income tax purposes, except as
follows:
(i) The initial Book Value of any asset contributed
by a Partner to the Partnership shall be the gross fair
market value of such asset, as determined by the General
Partner.
(ii) The Book Values of all Partnership assets shall
be adjusted to equal their respective gross fair market
values, as determined by the General Partner, as of the
following times: (A) the acquisition of an additional
interest in the Partnership by any new or existing Partner in
exchange for more than a de minimis capital contribution if
the General Partner reasonably determines that such
adjustment is necessary or appropriate to reflect the
relative economic interests of the Partners in the
Partnership; (B) the distribution by the Partnership to a
Partner of more than a de minimis amount of Partnership
property as consideration for an interest in the Partnership
if the General Partner reasonably determines that such
adjustment is necessary or appropriate to reflect the
relative economic interests of the Partners in the
Partnership; and (C) the liquidation of the Partnership
within the meaning of Regulation Section
1.704-1(b)(2)(ii)(g);
(iii) The Book Value of any Partnership asset
distributed to any Partner shall be the gross fair market
value of such asset on the date of distribution, as
determined by the General Partner.
(iv) The Book Values of Partnership assets shall be
increased (or decreased) to reflect any adjustment to the
adjusted basis of such assets pursuant to Code Section 734(b)
or Code Section 743(b), but only to the extent that such
adjustments are taken into account in determining Capital
Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)
and Section 4.2(d) hereof; provided, however, that Book
Values shall not be adjusted pursuant to this Section
3.2(c)(iv) to the extent the General Partner determines that
an adjustment pursuant to Section 3.2(c)(ii) is necessary or
appropriate in connection with a transaction that would
otherwise result in an adjustment pursuant to this Section
3.2(c)(iv).
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(v) If the Book Value of an asset has been
determined or adjusted pursuant to Section 3.2(c)(i), Section
3.2(c)(ii), or Section 3.2(c)(iv) hereof, such Book Value
shall thereafter be adjusted by the Book Depreciation taken
into account with respect to such asset for purposes of
computing Profits and Losses.
(d) Interest; Loans. No interest will be paid by the
Partnership on capital contributions or on balances in Capital
Accounts. Loans by a Partner to the Partnership will not be considered
capital contributions.
(e) No Withdrawal. No Partner will be entitled to withdraw
any part of his capital contributions or Capital Account or to receive
any distribution of Partnership assets from the Partnership, except as
provided in Article V and Article IX of this Agreement.
ARTICLE IV
ALLOCATIONS
4.1 Allocation of Profits and Losses.
(a) Allocation of Profit Generally. After giving effect to
the allocations set forth in Section 4.2 and Section 4.3, and after
giving effect to all distributions of cash or property (other than
cash or property to be distributed pursuant to Article IX), Profits
for any Fiscal Year shall be allocated to the Partners in the
following manner:
(i) First, to each Partner with a negative balance
in its Adjusted Capital Account, pro rata in accordance with
such negative Adjusted Capital Account balances, until such
negative Adjusted Capital Account balances have been
eliminated;
(ii) Next, to the Partners in proportion to their
Percentage Interests.
(b) Allocation of Losses.
(i) After giving effect to the provisions of Section
4.2 and Section 4.3, and subject to the limitation set forth
in Section 4.1(b)(ii), Losses for any Fiscal Year shall be
allocated to the Partners in the following manner:
(A) First, to the Partners until each of
their Adjusted Capital Account balances is reduced
to zero dollars ($0), in proportion to their
Adjusted Capital Account balances;
(B) Next, to the Partners in proportion to
their Percentage Interests.
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(ii) Notwithstanding anything to the contrary in
Section 4.1(b)(i):
(A) The Losses allocated pursuant to
Section 4.1(b)(i) hereof to any Partner for any
Fiscal Year shall not exceed the maximum amount of
Losses that may be allocated to such Partner without
causing such Partner to have an Adjusted Capital
Account Deficit at the end of such Fiscal Year.
(B) If some but not all of the Partners
would have an Adjusted Capital Account Deficit as a
consequence of an allocation of Losses pursuant to
Section 4.1(b)(i) hereof, the limitations set forth
in this Section 4.1(b)(ii) shall be applied by
allocating Losses pursuant to this Section
4.1(b)(ii) only to those Partners who would not have
an Adjusted Capital Account Deficit as a consequence
of receiving such an allocation of Losses (with the
allocation of such Losses among such Partners to be
determined by the General Partner, based on the
allocation that is most likely to effectuate the
distribution priorities set forth in Section 5.1
hereof).
(C) If no Partner may receive an additional
allocation of Losses pursuant to Section
4.1(b)(ii)(B) above, such additional Losses not
allocated pursuant to Section 4.1(b)(ii)(B) shall be
allocated solely to the Partners in proportion to
their Percentage Interests.
4.2 Special Allocations.
(a) Minimum Gain Chargeback--Partnership Nonrecourse
Liabilities. If there is a net decrease in Partnership Minimum Gain
during any Partnership Fiscal Year, certain items of income and gain
shall be allocated (on a gross basis) to the Partners in the amounts
and manner described in Regulations Section 1.704-2(f) and (j)(2)(i)
and (ii), subject to the exemptions set forth in Regulations Section
1.704-2(f)(2), (3), (4), and (5). This Section 4.2(a) is intended to
comply with the minimum gain chargeback requirement (set forth in
Regulations Section 1.704-2(f)) relating to Partnership nonrecourse
liabilities (as defined in Regulations Section 1.704-2(b)(3)) and
shall be so interpreted.
(b) Minimum Gain Chargeback--Partner Nonrecourse Debt. If
there is a net decrease in Partner Minimum Gain during any Partnership
Fiscal Year, certain items of income and gain shall be allocated (on a
gross basis) as quickly as possible to those Partners who had a share
of the Partner Minimum Gain (determined pursuant to Regulations
Section 1.704-2(i)(5)) in the amounts and manner described in
Regulations Section 1.704-2(i)(4), (j)(2)(ii), and (j)(2)(iii). This
Section 4.2(b) is intended to comply with the minimum gain chargeback
requirement (set forth in Regulations Section 1.704-2(i)(4)) relating
to partner nonrecourse debt (as defined in Regulations Section
1.704-2(b)(4)) and shall be so interpreted.
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(c) Qualified Income Offset. If, after applying Section
4.2(a) and Section 4.2(b), any Partner has an Adjusted Capital Account
Deficit, items of Partnership income and gain shall be specially
allocated (on a gross basis) to each such Partner in an amount and
manner sufficient to eliminate, to the extent required by the
Regulations, the Adjusted Capital Account Deficit of such Partner as
quickly as possible.
(d) Optional Basis Adjustments. To the extent an adjustment
to the adjusted tax basis of any Partnership asset pursuant to Code
Sections 734(b) or 743(b) is required, pursuant to Regulations Section
1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital
Accounts, the amount of such adjustment to the Capital Accounts shall
be treated as an item of gain (if the adjustment increases the basis
of the asset) or loss (if the adjustment decreases such basis) and
such gain or loss shall be specially allocated to the Partners in a
manner consistent with the manner in which their Capital Accounts are
required to be adjusted pursuant to such Section of the Regulations.
(e) Nonrecourse Deductions. Nonrecourse Deductions for any
Fiscal Year shall be specially allocated among the Partners in
proportion to their Percentage Interests.
(f) Partner Nonrecourse Deductions. Partner nonrecourse
deductions shall be allocated pursuant to Regulations Section
1.704-2(b)(4) and (i)(1) to the Partner who bears the economic risk of
loss with respect to the deductions.
(g) Special Allocation: Economic Sharing Arrangement.
Notwithstanding anything to the contrary in this Article IV, the
Partners acknowledge and agree that the manner in which distributions
are to be made pursuant to Section 5.1 correctly reflects the
Partners' economic sharing arrangement in the Partnership. To the
extent that allocations of Profits, Losses, and other items of income,
gain, loss, and deduction set forth in this Article V (other than this
Section 4.2(g)) could produce an economic sharing arrangement among
the Partners different than that described in Section 5.1, then the
Partnership shall specially allocate items of gross income, gain,
loss, and deduction among the Partners in any manner that may be
required to cause the allocations of Profits, Losses, and other items
of income, gain, loss, and deduction described in Article V to be
consistent with the economic sharing arrangement described in Section
5.1.
4.3 Curative Allocations. The allocations set forth in Section
4.1(b)(ii) and Section 4.2(a) through Section 4.2(f) hereof (the "Regulatory
Allocations") are intended to comply with certain requirements of the
Regulations. It is the intent of the Partners that, to the extent possible, all
Regulatory Allocations shall be offset either with other Regulatory Allocations
or with special allocations of other items of Partnership income, gain, loss,
or deduction pursuant to this Section 4.3. Therefore, notwithstanding any other
provisions of this Article IV (other than the Regulatory Allocations), the
General Partner shall make such offsetting special allocations of Partnership
income, gain, loss, or deduction in whatever manner it determines appropriate
so that, after such offsetting allocations are made, each Partner's Capital
Account balance is, to the extent possible, equal to the Capital Account
balance such Partner would have had if the Regulatory Allocations were not part
of the Agreement and all Partnership
9
<PAGE> 13
items were allocated pursuant to Section 4.1(a), Section 4.1(b)(i), and Section
4.2(g) hereof. In exercising its discretion under this Section 4.3, the General
Partner shall take into account future Regulatory Allocations under Sections
4.2(a) and 4.2(b) that, although not yet made, are likely to offset other
Regulatory Allocations previously made under Sections 4.2(e) and 4.2(f).
4.4 Tax Allocations: Code Section 704(c).
(a) In accordance with Code Section 704(c) and the
Regulations thereunder, income, gain, loss and deduction with respect
to any property contributed to the capital of the Partnership shall,
solely for tax purposes, be allocated among the Partners so as to take
account of any variation between the adjusted basis of such property
to the Partnership for federal income tax purposes and its initial
Book Value (computed in accordance with Section 3.2(c)(i) hereof).
(b) If the Book Value of any Partnership asset is adjusted
pursuant to Section 3.2(c)(ii) hereof, subsequent allocations of
income, gain, loss, and deduction with respect to such asset shall
take account of any variation between the adjusted basis of such asset
for federal income tax purposes and its Book Value in the same manner
as under Code Section 704(c) and the Regulations thereunder.
(c) Any elections or other decisions relating to such
allocation shall be made by the General Partner.
(d) Allocations pursuant to this Section 4.4 are solely for
purposes of federal, state, and local taxes and shall not affect or in
any way be taken into account in computing any Person's Capital
Account, Adjusted Capital Account, or share of Profits, Losses, and
other items or distributions pursuant to any provision of this
Agreement.
4.5 Other Allocation Rules.
(a) For purposes of determining the Profits, Losses, or any
other item allocable to any period, Profits, Losses, and any such
other item shall be determined on a daily, monthly, or other basis, as
determined by the General Partner using any permissible method under
Code Section 706 and the Regulations thereunder.
(b) For federal income tax purposes, every item of income,
gain, loss and deduction shall be allocated among the Partners in
accordance with the allocations under Sections 4.1, 4.2, 4.3, and 4.4.
(c) The Partners are aware of the income tax consequences of
the allocations made by this Article IV and hereby agree to be bound
by the provisions of this Article IV in reporting their shares of
Partnership income and loss for income tax purposes.
(d) The Partners agree that the Partners' Percentage
Interests represent the Partners' respective interests in Partnership
profits for purposes of allocating excess
10
<PAGE> 14
nonrecourse liabilities (as defined in Regulations Section
1.752-3(a)(3)) pursuant to Regulations Section 1.752-3(a)(3).
ARTICLE V
DISTRIBUTIONS
5.1 Distributions of Distributable Cash. The General Partner shall
review the Partnership's accounts at the end of each calendar quarter to
determine whether distributions are appropriate. Subject to Section 17-607 of
the Delaware Act, the General Partner shall authorize such distributions of
Distributable Cash as it may determine in its sole discretion; provided,
however, to the extent there is sufficient Distributable Cash to make
distributions under Section 5.1(a) hereof, such distributions shall be made. All
such distributions of cash shall be made pro rata in accordance with the
Partners' Percentage Interests.
ARTICLE VI
RIGHTS AND OBLIGATIONS OF PARTNERS
6.1 General Partner.
(a) Authority. The business and affairs of the Partnership
will be managed by the General Partner, subject to the limitations and
restrictions contained in applicable law. All determinations relating
to the business and affairs of the Partnership will be made by the
General Partner in its sole discretion. The General Partner will at
all times act and exercise its discretion hereunder in a reasonable
manner consistent with its fiduciary duty to the Limited Partner. The
General Partner will have complete authority to take, in the name of
the Partnership, any action that the General Partner determines to be
appropriate under this Agreement or for the conduct of the business of
the Partnership. All decisions and actions taken by the General
Partner under the authority of this Section 6.1 will be binding upon
all of the Partners and the Partnership. Each Partner will promptly
execute instruments determined by the General Partner to be
appropriate to evidence the authority of the General Partner to
consummate any transaction permitted by this Agreement.
(b) Reliance by Third Parties. Notwithstanding any other
provision of this Agreement to the contrary, no purchaser of property
from the Partnership or other person dealing with the Partnership will
be required to verify any representation by the General Partner as to
its authority to encumber, sell or otherwise use any assets or
properties of the Partnership, and any such purchaser or other person
will be entitled to rely exclusively on such representation and to
deal with the General Partner as if it were the sole party in interest
therein, both legally and beneficially.
(c) Indemnification. The Partnership will indemnify and hold
harmless the General Partner and any partner, member, employee, agent
or representative of the General Partner against all liabilities,
losses and damages incurred by any of them by reason of any act
performed or omitted to be performed in the name of or on behalf of
the Partnership, or in connection with the Partnership's business,
including attorneys' fees
11
<PAGE> 15
and any amounts expended in the settlement of any claims or
liabilities, losses or damages, to the fullest extent permitted by the
Delaware Act; provided that no Partner will be subject to personal
liability by reason of the indemnification provisions of this Section
6.1(c).
(d) Liability of General Partner. The General Partner will
not be liable to the Partnership or any Limited Partner for errors in
judgment or for any acts or omissions that do not constitute gross
negligence or willful or wanton misconduct, including without
limitation those acts or omissions that may constitute simple
negligence.
(e) Reliance by General Partner. The General Partner may rely
on and will be protected in acting or refraining from acting in
reliance on any resolution, certificate, statement, instrument,
opinion, report or other document believed by it to be genuine and to
have been signed or presented by the proper party or parties. The
General Partner may consult with legal counsel, accountants and other
consultants and advisers selected by him, and any opinion of any such
consultant or adviser as to matters which the General Partner believes
to be within such person's professional or expert competence will be
full and complete authorization and protection in respect of any
action taken or suffered or omitted by the General Partner hereunder
in good faith and in accordance therewith.
6.2 Authority of Limited Partner. The Limited Partner may not take
part in the control (as defined in the Act) of the Partnership, transact any
business in the Partnership's name or have the power to sign documents for or
otherwise bind the Partnership or any of the Partners, except as expressly set
forth in this Agreement.
6.3 Reimbursement of Expenses. The Partnership will reimburse the
Partners for any expenses reasonably incurred by them on the Partnership's
behalf.
6.4 Outside Activities. Each Partner and any affiliate thereof may
have business interests and engage in business activities in addition to those
relating to the Partnership, and neither the Partnership nor any of the
Partners will have any rights by virtue of this Agreement or the partnership
relationship created hereby in any business ventures of any other Partner or
any affiliate thereof.
ARTICLE VII
TAX MATTERS; BOOKS AND RECORDS
7.1 Tax Matters Partner. SFG Management shall be the "Tax Matters
Partner" for Federal income tax purposes pursuant to Section 6231 of the Code
with respect to each applicable taxable year of the Partnership. SFG Management
is authorized to do whatever is necessary to qualify as such.
7.2 Annual Tax Returns. SFG Management shall prepare or cause the
Independent Accountants to prepare, at the Partnership's expense, and shall
timely file, or cause the timely filing of, all tax returns and shall, on
behalf of the Partnership, timely file, or cause the timely
12
<PAGE> 16
filing of, all other writings required by any governmental authority having
jurisdiction to require such filing.
7.3 Tax Elections. SFG Management shall do all acts, make all
elections and take whatever reasonable steps are required to maximize, in the
aggregate, the federal, state, and local income tax advantages available to the
Partnership and shall defend all tax audits and litigation with respect thereto
at the expense of the Partnership. SFG Management shall maintain the books,
records, and tax returns of the Partnership in a manner consistent with the
acts, elections and steps taken by the Partnership.
7.4 Taxation as a Partnership. No election shall be made by the
Partnership or any Partner for the Partnership to be excluded from the
application of any of the provisions of Subchapter K, Chapter 1 of Subtitle A
of the Code or from any similar provisions of any state tax laws.
7.5 Books, Records and Accounting. The General Partner will keep or
cause to be kept appropriate books and records with respect to the
Partnership's business. The funds of the Partnership will be deposited in
separate accounts in the name of the Partnership. The fiscal year of the
Partnership will be the calendar year.
ARTICLE VIII
RESTRICTIONS ON TRANSFER
8.1 Consent of Partners Required for All Transfers. Neither Partner
may sell, assign, convey, transfer, pledge or hypothecate in any manner
(together, "Transfer") all or any portion of its Partnership Interest without
the prior written consent of the other Partner, and any attempted Transfer in
contravention of this requirement shall be void and of no effect.
8.2 Substitute Partners. Notwithstanding the other provisions of this
Article VIII, no third party that acquires a Partnership Interest will have the
right to participate in the management or control of the Partnership or to vote
with respect to such Partnership Interest unless such transferee is admitted as
a Partner with the written consent of each Partner. No transfer of a
Partnership Interest (whether voluntary or involuntary) will be effective
unless and until the transferee executes all documents and agreements deemed
reasonably necessary or advisable by the General Partner to evidence such
transfer and to insure that such transferee has assumed the duties and
obligations of a Partner under this Agreement.
8.3 No Additional Partnership Interests. Except for transfers of
Partnership Interests in accordance with this Article VIII, the Partnership
will not issue additional Partnership Interests without the written consent of
each Partner.
13
<PAGE> 17
ARTICLE IX
DISSOLUTION AND WINDING UP
9.1 Dissolution. The Partnership will be dissolved upon:
(a) an election to dissolve the Partnership that is approved
in writing by both Partners;
(b) any other event that, under the Delaware Act, would cause
the dissolution of the Partnership.
9.2 Reconstitution. Upon the occurrence of any event that would cause
the dissolution of the Partnership pursuant to clause (b) of Section 9.1, the
Partnership may be reconstituted and its business continued upon unanimous
approval by the remaining Partners obtained within 60 days after the date of
dissolution.
9.3 Liquidation. If the Partnership is dissolved and not
reconstituted, the General Partner, or, if the General Partner is unable or
unwilling to act in such capacity, a liquidator or liquidating committee
selected by Partners holding a majority of the outstanding Partnership
Percentages (the "Liquidator"), will proceed to wind up the affairs of the
Partnership in an orderly manner. Except as expressly provided in this Article
IX, the Liquidator will have and may exercise, without further authorization or
consent of any of the parties hereto, all of the powers conferred upon the
General Partner under the terms of this Agreement (but subject to all of the
applicable limitations, contractual and otherwise, upon the exercise of such
powers) to the extent necessary or desirable in the good faith judgment of the
Liquidator to carry out the duties and functions of the Liquidator hereunder
for such period of time as is reasonably required in the good faith judgment of
the Liquidator to complete the winding up and liquidation of the Partnership as
provided for herein. The Liquidator will apply and distribute the assets of the
Partnership (and any proceeds from the liquidation thereof) in the following
order of priority, unless otherwise required by mandatory provisions of
applicable law:
(a) to the payment of the expenses of the terminating
transactions, including without limitation brokerage commissions, legal
fees, accounting fees and closing costs;
(b) to the creditors of the Partnership, including Partners,
in the order of priority provided by law; and
(c) to the Partners in accordance with the positive balances
in their respective Capital Accounts; provided however, that the
Liquidator may place in escrow a reserve of cash or other assets of the
Partnership for contingent liabilities in an amount reasonably
determined by the Liquidator to be appropriate for such purposes.
9.4 Distribution in Kind. If the Partnership is dissolved and it is
not necessary to liquidate all the assets of the Partnership to make the
payments required by Section 9.3(a) or 9.3(b), then the Liquidator may make an
in-kind distribution of any remaining Partnership
14
<PAGE> 18
property to the Partners in lieu of all or a portion of the cash distribution
required by Section 9.3(c).
9.5 Termination of Partnership. Upon completion of the distribution of
Partnership property as provided in Sections 9.3 and 9.4 of this Agreement, the
Partnership will be terminated, and the Liquidator shall file any appropriate
instruments in accordance with the Delaware Act to terminate the Partnership.
ARTICLE X
GENERAL PROVISIONS
10.1 Addresses and Notices. Any notice, demand, request or report
required or permitted to be given or made to a Partner under this Agreement
must be in writing and will be deemed given or made (a) when delivered in
person or sent by telecopy, (b) one day after being sent by overnight delivery
service, or (c) three days after being sent by United States registered or
certified mail, in each case to the Partner at its address as shown on the
records of the Partnership, notwithstanding any claim of any person who may
have an interest in any Partnership Interest by reason of an assignment or
otherwise.
10.2 Titles and Captions. All article and section titles and captions
in this Agreement are for convenience only and are not intended to be part of
this Agreement or to define, limit, extend or describe the scope or intent of
any provisions hereof. Except as specifically provided otherwise, references to
"Articles" and "Sections" are to Articles and Sections of this Agreement.
10.3 Pronouns and Plurals. Wherever the context may require, any
pronoun used in this Agreement includes the corresponding masculine, feminine
or neuter forms, and the singular form of nouns, pronouns and verbs includes
the plural and vice versa.
10.4 Further Action. The parties agree to execute all documents,
provide all information and take or refrain from taking all actions as may be
reasonably necessary or appropriate to achieve the purposes of this Agreement.
10.5 Binding Effect. This Agreement will be binding on and inure to the
benefit of the parties hereto and their heirs, executors, administrators,
successors, legal representatives and permitted assigns.
10.6 Integration. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements and understandings pertaining thereto.
10.7 Third Party Beneficiaries. None of the provisions of this
Agreement are intended to confer any benefit on any creditor of the Partnership
or any other third party.
15
<PAGE> 19
10.8 Amendment and Waiver. This Agreement may be amended only in a
writing executed and delivered by all of the Partners. No failure by any party
to insist upon the strict performance of any covenant, duty, agreement or
condition of this Agreement or to exercise any right or remedy consequent upon
a breach thereof will constitute waiver of any such breach or any other
covenant, duty, agreement or condition.
10.9 Counterparts. This Agreement may be executed in counterparts, all
of which together will constitute one agreement binding on all the parties
hereto, notwithstanding that all such parties are not signatories to the
original or the same counterpart.
10.10 Applicable Law. This Agreement will be construed in accordance
with and governed by the laws of the State of Delaware, without regard to the
principles of conflicts of law.
10.11 Invalidity of Provisions. If any provision of this Agreement is
declared or found to be illegal, unenforceable or void, in whole or in part,
then the parties will be relieved of all obligations arising under such
provision, but only to the extent that it is illegal, unenforceable or void, it
being the intent and agreement of the parties that this Agreement be deemed
amended by modifying such provision to the extent necessary to make it legal
and enforceable while preserving its intent or, if that is not possible, by
substituting therefor another provision that is legal and enforceable and
achieves the same objectives.
[THE REMAINING PORTION OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
16
<PAGE> 20
IN WITNESS WHEREOF, this Agreement is executed effective as of 12:01
a.m., January 1, 2000.
GENERAL PARTNER:
SFG MANAGEMENT, LLC
By: /s/ Michelle Goolsby
Name: Michelle Goolsby
Title: Vice President
Address:
2515 McKinney Ave.
LB 30, Suite 1200
Dallas, Texas 75201
LIMITED PARTNER:
SUIZA FLUID DAIRY GROUP, L.P.
By: Suiza Fluid Dairy Group GP, LLC,
Its General Partner
By: /s/ Michelle Goolsby
Name: Michelle Goolsby
Title: Vice President
Address:
2515 McKinney Ave.
LB 30, Suite 1200
Dallas, Texas 75201
17
<PAGE> 21
EXHIBIT A
PARTNERS AND PERCENTAGE INTERESTS
<TABLE>
<CAPTION>
Partner Percentage
- ----------------------------------------------- Interest
-----------
<S> <C>
SFG Management, LLC (General Partner) 1.00%
Suiza Fluid Dairy Group, L.P. (Limited Partner) 99.00%
Total 100.00%
</TABLE>
18
<PAGE> 1
EXHIBIT 10.1
- -------------------------------------------------------------------------------
CREDIT AGREEMENT
among
SUIZA FLUID DAIRY GROUP, L.P.
and
SOUTHERN FOODS GROUP, L.P.,
as Borrowers,
CERTAIN OF THE DOMESTIC SUBSIDIARIES OF THE
PARENT BORROWER FROM TIME TO TIME PARTIES HERETO,
as Guarantors,
THE LENDERS PARTIES HERETO,
FIRST UNION NATIONAL BANK,
as Administrative Agent,
BANK ONE, NA,
as Syndication Agent
and
BANK OF AMERICA, N.A.
and
FLEET NATIONAL BANK,
as Co-Documentation Agents
Dated as of January 4, 2000
FIRST UNION SECURITIES, INC.
and
BANK ONE CAPITAL MARKETS, INC.,
as Co-Book Runners
- -------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I DEFINITIONS............................................................................................1
Section 1.1 Defined Terms.............................................................................1
Section 1.2 Other Definitional Provisions............................................................27
Section 1.3 Accounting Terms.........................................................................27
ARTICLE II THE LOANS; AMOUNT AND TERMS..........................................................................28
Section 2.1 Revolving Loans..........................................................................28
Section 2.2 SFG Revolving Loans Subfacility..........................................................29
Section 2.3 Term A Loan..............................................................................31
Section 2.4 SFG Term Loan............................................................................32
Section 2.5 Swingline Loan Subfacility...............................................................33
Section 2.6 Letter of Credit Subfacility.............................................................34
Section 2.7 Fees.....................................................................................38
Section 2.8 Reduction or Increase of the Revolving Commitments.......................................39
Section 2.9 Prepayments..............................................................................40
Section 2.10 Minimum Borrowing Amounts and Principal Amounts of Tranches..............................42
Section 2.11 Interest; Interest Payment Dates.........................................................43
Section 2.12 Conversion Options.......................................................................43
Section 2.13 Computation of Interest and Fees.........................................................44
Section 2.14 Pro Rata Treatment and Payments..........................................................45
Section 2.15 Non-Receipt of Funds by the Administrative Agent.........................................46
Section 2.16 Inability to Determine Interest Rate.....................................................47
Section 2.17 Illegality...............................................................................47
Section 2.18 Requirements of Law......................................................................48
Section 2.19 Indemnity................................................................................49
Section 2.20 Taxes....................................................................................49
Section 2.21 Indemnification; Nature of Issuing Lender's Duties.......................................51
Section 2.22 Joint and Several Liability of the Borrowers.............................................53
Section 2.23 Defaulting Lenders; Limitation on Claims.................................................55
Section 2.24 Replacement of Lenders...................................................................56
ARTICLE III REPRESENTATIONS AND WARRANTIES......................................................................56
Section 3.1 Financial Condition......................................................................57
Section 3.2 No Change................................................................................57
Section 3.3 Corporate Existence; Compliance with Law.................................................57
Section 3.4 Corporate Power; Authorization; Enforceable Obligations..................................57
Section 3.5 No Legal Bar; No Default.................................................................58
Section 3.6 No Material Litigation...................................................................58
Section 3.7 Government Acts..........................................................................58
Section 3.8 Margin Regulations.......................................................................59
Section 3.9 ERISA....................................................................................59
Section 3.10 Environmental Matters....................................................................59
Section 3.11 Purpose of Loans.........................................................................60
Section 3.12 Subsidiaries.............................................................................60
Section 3.13 Ownership................................................................................61
Section 3.14 Indebtedness.............................................................................61
Section 3.15 Taxes....................................................................................61
Section 3.16 Intellectual Property....................................................................61
Section 3.17 Solvency.................................................................................62
Section 3.18 Investments..............................................................................62
Section 3.19 Location of Chief Executive Office.......................................................62
Section 3.20 No Burdensome Restrictions...............................................................62
Section 3.21 Brokers' Fees............................................................................62
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
Section 3.22 Labor Matters............................................................................62
Section 3.23 Accuracy and Completeness of Information.................................................62
Section 3.24 Year 2000 Issue..........................................................................63
Section 3.25 Interest Rate Protection.................................................................63
ARTICLE IV CONDITIONS PRECEDENT.................................................................................63
Section 4.1 Conditions to Closing Date and Initial Revolving Loans, SFG Revolving Loans and Term
Loans....................................................................................63
Section 4.2 Conditions to All Extensions of Credit...................................................67
ARTICLE V AFFIRMATIVE COVENANTS.................................................................................69
Section 5.1 Financial Statements.....................................................................69
Section 5.2 Certificates; Other Information..........................................................71
Section 5.3 Payment of Obligations...................................................................72
Section 5.4 Conduct of Business and Maintenance of Existence.........................................72
Section 5.5 Maintenance of Property; Insurance.......................................................72
Section 5.6 Inspection of Property; Books and Records; Discussions...................................73
Section 5.7 Notices..................................................................................73
Section 5.8 Environmental Laws.......................................................................75
Section 5.9 Financial Covenants......................................................................76
Section 5.10 Obligations Regarding Subsidiaries; Additional Subsidiary Guarantors.....................77
Section 5.11 Compliance with Law......................................................................77
Section 5.12 Pledged Assets...........................................................................77
Section 5.13 Additional Credit Parties................................................................78
Section 5.14 Year 2000 Compliance.....................................................................78
Section 5.15 Joinder of Subsidiary Borrower...........................................................79
ARTICLE VI NEGATIVE COVENANTS...................................................................................79
Section 6.1 Indebtedness.............................................................................80
Section 6.2 Liens....................................................................................81
Section 6.3 Nature of Business.......................................................................81
Section 6.4 Consolidation, Merger, Sale or Purchase of Assets, etc...................................81
Section 6.5 Advances, Investments and Loans..........................................................82
Section 6.6 Transactions with Affiliates.............................................................82
Section 6.7 Ownership of Subsidiaries; Restrictions..................................................83
Section 6.8 Fiscal Year; Organizational Documents; Material Contracts................................83
Section 6.9 Limitation on Actions....................................................................83
Section 6.10 Restricted Payments......................................................................85
Section 6.11 Prepayments of Indebtedness, etc.........................................................85
Section 6.12 Sale Leasebacks..........................................................................86
Section 6.13 Use of Proceeds..........................................................................86
Section 6.14 Designated Senior Indebtedness...........................................................86
ARTICLE VII EVENTS OF DEFAULT...................................................................................86
Section 7.1 Events of Default........................................................................86
Section 7.2 Acceleration; Remedies...................................................................89
ARTICLE VIII THE AGENT..........................................................................................90
Section 8.1 Appointment..............................................................................90
Section 8.2 Delegation of Duties.....................................................................90
Section 8.3 Exculpatory Provisions...................................................................90
Section 8.4 Reliance by Administrative Agent.........................................................91
Section 8.5 Notice of Default........................................................................91
Section 8.6 Non-Reliance on Administrative Agent and Other Lenders...................................91
Section 8.7 Indemnification..........................................................................92
Section 8.8 Administrative Agent in Its Individual Capacity..........................................92
Section 8.9 Successor Administrative Agent...........................................................93
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE IX MISCELLANEOUS........................................................................................93
Section 9.1 Amendments, Waivers and Release of Collateral............................................93
Section 9.2 Notices..................................................................................95
Section 9.3 No Waiver; Cumulative Remedies...........................................................96
Section 9.4 Survival of Representations and Warranties...............................................96
Section 9.5 Payment of Expenses and Taxes............................................................96
Section 9.6 Successors and Assigns; Participations; Purchasing Lenders...............................97
Section 9.7 Adjustments; Set-off....................................................................100
Section 9.8 Table of Contents and Section Headings..................................................101
Section 9.9 Counterparts............................................................................101
Section 9.10 Effectiveness; Designation as Senior Indebtedness.......................................101
Section 9.11 Severability............................................................................101
Section 9.12 Integration.............................................................................102
Section 9.13 Governing Law...........................................................................102
Section 9.14 Consent to Jurisdiction and Service of Process..........................................102
Section 9.15 Confidentiality.........................................................................102
Section 9.16 Acknowledgments.........................................................................103
Section 9.17 Waivers of Jury Trial and Punitive Damages..............................................103
Section 9.18 Refinancing of Existing Subsidiary Borrower Debt........................................104
ARTICLE X GUARANTY.............................................................................................104
Section 10.1 The Guaranty............................................................................104
Section 10.2 Bankruptcy..............................................................................105
Section 10.3 Nature of Liability.....................................................................105
Section 10.4 Independent Obligation..................................................................105
Section 10.5 Authorization...........................................................................106
Section 10.6 Reliance................................................................................106
Section 10.7 Waiver..................................................................................106
Section 10.8 Limitation on Enforcement...............................................................107
Section 10.9 Confirmation of Payment.................................................................107
Section 10.10 Limitations on Guaranty.................................................................108
</TABLE>
iii
<PAGE> 5
SCHEDULES
- ---------
Schedule 1.1(a) Account Designation Letter
Schedule 1.1(b) Investments
Schedule 1.1(c) Liens
Schedule 2.1(a) Lenders and Commitments
Schedule 2.1(b)(i) Form of Notice of Borrowing
Schedule 2.1(d) Form of Revolving Note
Schedule 2.2(d) Form of SFG Revolving Note
Schedule 2.3(c) Form of Term A Note
Schedule 2.4(c) Form of SFG Term Note
Schedule 2.5(d) Form of Swingline Note
Schedule 2.12 Form of Notice of Conversion/Extension
Schedule 2.20 Section 2.20 Certificate
Schedule 3.6 Litigation
Schedule 3.12 Subsidiaries
Schedule 3.16 Intellectual Property
Schedule 3.19 Chief Executive Offices
Schedule 3.22 Labor Matters
Schedule 4.1(b) Form of Secretary's Certificate
Schedule 4.1(h) Form of Solvency Certificate
Schedule 5.10 Form of Joinder Agreement
Schedule 6.1(b) Indebtedness
Schedule 9.2 Lenders' Lending Offices
Schedule 9.6(c) Form of Commitment Transfer Supplement
iv
<PAGE> 6
CREDIT AGREEMENT, dated as of January 4, 2000, among SUIZA FLUID DAIRY
GROUP, L.P., a Delaware limited partnership (the "Parent Borrower"), SOUTHERN
FOODS GROUP, L.P., a Delaware limited partnership (the "Subsidiary Borrower";
together with the Parent Borrower, the "Borrowers"), those Domestic
Subsidiaries of the Parent Borrower identified as a "Guarantor" on the
signature pages hereto and such other Domestic Subsidiaries of the Parent
Borrower as may from time to time become a party hereto (collectively, the
"Guarantors"), the several banks and other financial institutions as may from
time to time become parties to this Agreement (collectively, the "Lenders"; and
individually, a "Lender"), FIRST UNION NATIONAL BANK, a national banking
association, as administrative agent for the Lenders hereunder (in such
capacity, the "Administrative Agent" or the "Agent"), BANK ONE, NA, a national
banking association, as syndication agent for the Lenders hereunder (in such
capacity the "Syndication Agent") and BANK OF AMERICA, N.A., a national banking
association, and FLEET NATIONAL BANK, a national banking association, as
co-documentation agents for the Lenders hereunder.
W I T N E S S E T H:
WHEREAS, the Borrowers have requested that the Lenders make loans and
other financial accommodations to the Borrowers as more particularly described
herein;
WHEREAS, the Lenders have agreed to make such loans and other
financial accommodations to the Borrowers on the terms and conditions contained
herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINED TERMS.
As used in this Agreement, terms defined in the preamble to this
Agreement have the meanings therein indicated, and the following terms have the
following meanings:
"Account Designation Letter" shall mean the Notice of Account
Designation Letter dated the Closing Date from the Parent Borrower to the
Administrative Agent substantially in the form attached hereto as Schedule
1.1(a).
"Additional Credit Party" shall mean each Person that becomes a
Guarantor by execution of a Joinder Agreement in accordance with Section 5.10.
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"Additional Lender" has the meaning set forth in Section 2.8.
"Administrative Agent" shall have the meaning set forth in the first
paragraph of this Agreement and any successors in such capacity.
"Affiliate" shall mean as to any Person, any Person that directly or
indirectly controls, or is under common control with, or is controlled by, such
Person and, if such Person is an individual, any member of the immediate family
(including parents, spouse, children and siblings) of such individual and any
trust whose principal beneficiary is such individual or one or more members of
such immediate family and any Person who is controlled by any such member or
trust. As used in this definition, "control" (including, with its correlative
meanings, "controlled by" and "under common control with") shall mean
possession, directly or indirectly, of power to direct or cause the direction
of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise); provided
that, in any event, any Person that owns directly or indirectly securities
having 10% or more of the voting power for the election of directors or other
governing body of a corporation or 10% or more of the partnership or other
ownership interests of any other Person (other than as a limited partner of
such other Person) will be deemed to control such corporation or other Person.
Notwithstanding the foregoing, (a) no individual shall be an Affiliate solely
by reason of his or her being a director, officer or employee of the Parent
Borrower or any of its Subsidiaries, and (b) none of the Restricted
Subsidiaries of the Parent Borrower shall be considered Affiliates. For
purposes hereof, all Unrestricted Subsidiaries shall be considered Affiliates.
"Agents" shall mean a collective reference to the Administrative Agent
and the Syndication Agent.
"Agreement" shall mean this Credit Agreement, as amended, modified or
supplemented from time to time in accordance with its terms.
"Alternate Base Rate" shall mean, for any day, a rate per annum equal
to the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof:
"Prime Rate" shall mean, at any time, the rate of interest per annum publicly
announced from time to time by First Union at its principal office in
Charlotte, North Carolina as its prime rate. Each change in the Prime Rate
shall be effective as of the opening of business on the day such change in the
Prime Rate occurs. The parties hereto acknowledge that the rate announced
publicly by First Union as its Prime Rate is an index or base rate and shall
not necessarily be its lowest or best rate charged to its customers or other
banks; and "Federal Funds Effective Rate" shall mean, for any day, the weighted
average of the rates on overnight federal funds transactions with members of
the Federal Reserve System arranged by federal funds brokers, as published on
the next succeeding Business Day by the Federal Reserve Bank of New York, or,
if such rate is not so published on the next succeeding Business Day, the
average of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it. If for any reason the Administrative Agent shall have
determined (which determination shall be conclusive in the absence of manifest
error) that it is unable to ascertain the Federal Funds Effective Rate, for any
reason, including the inability or failure of the Administrative Agent to
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<PAGE> 8
obtain sufficient quotations in accordance with the terms thereof, the
Alternate Base Rate shall be determined without regard to clause (b) of the
first sentence of this definition, as appropriate, until the circumstances
giving rise to such inability no longer exist. Any change in the Alternate Base
Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective on the opening of business on the date of such change.
"Alternate Base Rate Loans" shall mean Loans that bear interest at an
interest rate based on the Alternate Base Rate.
"Applicable Percentage" shall mean, for any day, the rate per annum
set forth below opposite the applicable Level then in effect, it being
understood that the Applicable Percentage for (i) Revolving Loans, SFG
Revolving Loans and Term Loans which are Alternate Base Rate Loans shall be the
percentage set forth under the column "Alternate Base Rate Margin for Revolving
Loans, SFG Revolving Loans and Term Loans", (ii) Revolving Loans, SFG Revolving
Loans and Term Loans which are LIBOR Rate Loans shall be the percentage set
forth under the column "LIBOR Rate Margin for Revolving Loans, SFG Revolving
Loans and Term Loans", (iii) the Letter of Credit Fees shall be the percentage
set forth under the column "Letter of Credit Fees" and (iv) the Commitment Fee
shall be the percentage set forth under the column "Commitment Fee":
<TABLE>
<CAPTION>
Alternate
Base Rate LIBOR Rate
Margin for Margin for
Revolving Loans, Revolving Loans,
SFG Revolving SFG Revolving
Leverage Loans and Term Loans and Term Letter of Commitment
Level Ratio Loans Loans Credit Fees Fee
----- -------- ---------------- --------------- ----------- ----------
<S> <C> <C> <C> <C> <C>
I => 3.75 to 1.0 1.25% 2.25% 2.25% 0.50%
II < 3.75 to 1.0 but 1.00% 2.00% 2.00% 0.50%
=> 3.25 to 1.0
III < 3.25 to 1.0 but 0.75% 1.75% 1.75% 0.50%
=> 2.75 to 1.0
IV < 2.75 to 1.0 but 0.50% 1.50% 1.50% 0.375%
=> 2.25 to 1.0
V < 2.25 to 1.0 0.25% 1.25% 1.25% 0.25%
</TABLE>
The Applicable Percentage shall, in each case, be determined and
adjusted quarterly on the date (each an "Interest Determination Date") three
(3) Business Days after the earlier of the
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date on which the Parent Borrower provides or is required to provide to the
Administrative Agent the quarterly financial information and certifications in
accordance with the provisions of Sections 5.1(b) and 5.2(c). Such Applicable
Percentage shall be effective from such Interest Determination Date until the
next such Interest Determination Date. The initial Applicable Percentages shall
be based on Level [II] until the first Interest Determination Date occurring
after the Closing Date. After the Closing Date, if the Parent Borrower shall
fail to provide the quarterly financial information and certifications in
accordance with the provisions of Sections 5.1(b) and 5.2(c), the Applicable
Percentage from such Interest Determination Date shall, on the date five (5)
Business Days after the date by which the Parent Borrower was so required to
provide such financial information and certifications to the Administrative
Agent and the Lenders, be based on Level I until such time as such information
and certifications are provided, whereupon the Level shall be determined by the
then current Leverage Ratio.
"Asset Disposition" shall mean the disposition of any or all of the
assets (including, without limitation, the Capital Stock of a Restricted
Subsidiary or any ownership interest in a joint venture) of the Parent Borrower
or any Restricted Subsidiary whether by sale, lease, transfer or otherwise. The
term "Asset Disposition" shall not include (i) Excluded Dispositions, (ii) the
sale, lease or transfer of assets permitted by Section 6.4(c)(iii) hereof,
(iii) any Equity Issuance, (iv) an Asset Disposition that constitutes a
Recovery Event or (v) any sale, transfer or other disposition of Transferred
Assets pursuant to a Permitted Receivables Financing.
"Attributed Principal Amount" means, on any day, with respect to any
Permitted Receivables Financing entered into by any Credit Party, the aggregate
amount (with respect to any such transaction, the "Invested Amount") paid to,
or borrowed by, such Person as of such date under such Permitted Receivables
Financing, minus the aggregate amount received by the applicable Receivables
Financier and applied to the reduction of the Invested Amount under such
Permitted Receivables Financing.
"Bankruptcy Code" shall mean the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from time to
time.
"Borrowers" shall have the meaning set forth in the first paragraph of
this Agreement.
"Borrowing Date" shall mean, in respect of any Loan, the date such
Loan is made.
"Business" shall have the meaning set forth in Section 3.10.
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in Charlotte, North Carolina or New York, New
York are authorized or required by law to close; provided, however, that when
used in connection with a rate determination, borrowing or payment in respect
of a LIBOR Rate Loan, the term "Business Day" shall also exclude any day on
which banks in London, England are not open for dealings in Dollar deposits in
the London interbank market.
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"Capital Lease" shall mean any lease of property, real or personal,
the obligations with respect to which are required to be capitalized on a
balance sheet of the lessee in accordance with GAAP.
"Capital Lease Obligations" shall mean the capitalized lease
obligations relating to a Capital Lease determined in accordance with GAAP.
"Capital Stock" shall mean (i) in the case of a corporation, capital
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability
company, membership interests and (v) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"Cash Equivalents" shall mean (i) securities issued directly or fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition ("Government Obligations"),
(ii) U.S. dollar denominated (or foreign currency fully hedged) time deposits,
certificates of deposit, Eurodollar time deposits and Eurodollar certificates
of deposit of (y) any domestic commercial bank of recognized standing having
capital and surplus in excess of $250,000,000 or (z) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof or
from Moody's is at least P-1 or the equivalent thereof (any such bank being an
"Approved Bank"), in each case with maturities of not more than one year from
the date of acquisition, (iii) commercial paper and variable or fixed rate
notes issued by any Approved Bank (or by the parent company thereof) or any
commercial paper or variable rate notes issued by, or guaranteed by any
domestic corporation rated A-1 (or the equivalent thereof) or better by S&P or
P-1 (or the equivalent thereof) or better by Moody's and maturing within nine
months of the date of acquisition, (iv) repurchase agreements with a bank or
trust company (including a Lender) or a recognized securities dealer having
capital and surplus in excess of $500,000,000 for direct obligations issued by
or fully guaranteed by the United States of America, (v) obligations of any
state of the United States or any political subdivision thereof rated A-1 (or
the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or
better by Moody's having maturities of not more than one year, and (vi) auction
preferred stock rated in the highest short-term credit rating category by S&P
or Moody's.
"Change of Control" shall mean (a) Suiza shall fail to own a majority
of the Capital Stock and a majority of the Voting Stock of the Parent Borrower,
(b) any Person or two or more Persons acting in concert (other than Suiza or
Dairy Farmers of America, Inc. or any of their Affiliates) shall have acquired
"beneficial ownership," directly or indirectly, of, or shall have acquired by
contract or otherwise, or shall have entered into a contract or arrangement
that, upon consummation, will result in its or their acquisition of, control
over, Voting Stock of the Parent Borrower (or other securities convertible into
such Voting Stock) representing 20% or more of the combined voting power of all
Voting Stock of the Parent Borrower, (c) during any period of up to 25
consecutive months, commencing after the Closing Date, individuals who at the
beginning of such 25 month period were directors of the Parent Borrower
(together with any new director whose election by the Parent
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Borrower's Board of Directors or whose nomination for election by the Parent
Borrower's shareholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the directors of the
Parent Borrower then in office or (d) the Parent Borrower shall fail to own a
majority of the Capital Stock and a majority of the Voting Stock of the
Subsidiary Borrower. As used herein, "beneficial ownership" shall have the
meaning provided in Rule 13d-3 of the Securities and Exchange Commission under
the Securities Act of 1934.
"Closing Date" shall mean the date of this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall mean a collective reference to the collateral which
is identified in, and at any time will be covered by, the Security Documents.
"Commitment" shall mean the Revolving Commitment, the LOC Commitment,
the Swingline Commitment and the Term Loan Commitment, individually or
collectively, as appropriate.
"Commitment Fee" shall have the meaning set forth in Section 2.7(a).
"Commitment Percentage" shall mean the Revolving Commitment
Percentage, the LOC Commitment Percentage and/or the Term Loan Commitment
Percentage, as appropriate.
"Commitment Period" shall mean the period from and including the
Closing Date to but not including the Maturity Date.
"Commitment Transfer Supplement" shall mean a Commitment Transfer
Supplement, substantially in the form of Schedule 9.6(c).
"Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with any Borrower within the
meaning of Section 4001 of ERISA or is part of a group which includes either
Borrower and which is treated as a single employer under Section 414 of the
Code.
"Consolidated EBITDA" means, for any period, the sum of (i)
Consolidated Net Income for such period, plus (ii) an amount which, in the
determination of Consolidated Net Income for such period, has been deducted for
(A) Consolidated Interest Expense, (B) total federal, state, local and foreign
income, value added and similar taxes, (C) depreciation, amortization expense
and other non-cash charges, (D) pro forma cost savings add-backs resulting from
non-recurring charges related to acquisitions permitted pursuant to Regulation
S-X of the Securities Exchange Act of 1934 or as approved by the Agents, and
(E) other adjustments to Consolidated EBITDA reasonably acceptable to the
Agents. Except as otherwise provided herein, the applicable period shall be for
the four consecutive quarters ending as of the date of computation.
"Consolidated Interest Expense" means, for any period, all interest
expense of the Parent Borrower and its Restricted Subsidiaries, including the
interest component under Capital Leases, the interest expense associated with
the Senior Subordinated Notes and the implied interest component under
Permitted Receivables Financings, plus net amounts payable (or minus net
amounts receivable) under Hedging Agreements, minus interest income for such
period, in each case as determined in accordance with GAAP. Except as otherwise
provided herein, the applicable period shall be for the four consecutive
quarters ending as of the date of computation.
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"Consolidated Net Income" means, for any period, net income (excluding
extraordinary items) after taxes for such period of the Parent Borrower and its
Restricted Subsidiaries on a consolidated basis, as determined in accordance
with GAAP, including net income attributable to Permitted Acquisitions (other
than acquisitions of Unrestricted Subsidiaries) after giving effect to such
Permitted Acquisitions on a Pro Forma Basis. Except as otherwise provided
herein, the applicable period shall be for the four consecutive quarters ending
as of the date of computation.
"Consolidated Net Worth" shall mean, as at any date, the sum for the
Borrower and its Subsidiaries (including minority interests in any Person owned
by the Borrower or any of its Subsidiaries), determined on a consolidated basis
without duplication in accordance with GAAP, of (a) the amount of Capital Stock
plus (b) the amount of additional paid in capital plus (c) the amount of
retained earnings (or, in the case of any retained earnings deficit, minus the
amount of such deficit).
"Contractual Obligation" shall mean, as to any Person, any provision
of any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Credit Documents" shall mean this Agreement, each of the Notes, any
Joinder Agreement, the Letters of Credit, the LOC Documents and the Security
Documents.
"Credit Party" shall mean any of the Borrowers or the Guarantors.
"Credit Party Obligations" shall mean, without duplication, (i) all of
the obligations of the Credit Parties to the Lenders (including the Issuing
Lender) and the Administrative Agent, whenever arising, under this Agreement,
the Notes or any of the other Credit Documents (including, but not limited to,
any interest accruing after the occurrence of a filing of a petition of
bankruptcy under the Bankruptcy Code with respect to any Credit Party,
regardless of whether such interest is an allowed claim under the Bankruptcy
Code) and (ii) all liabilities and obligations, whenever arising, owing from
the Parent Borrower or any of its Restricted Subsidiaries to any Lender, or any
Affiliate of a Lender, arising under any Hedging Agreement.
"Default" shall mean any of the events specified in Section 7.1,
whether or not any requirement for the giving of notice or the lapse of time,
or both, or any other condition, has been satisfied.
"Defaulting Lender" shall mean, at any time, any Lender that, at such
time (a) has failed to make a Loan required pursuant to the terms of this
Credit Agreement, including the funding of
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a Participation Interest in accordance with the terms hereof, (b) has failed to
pay to the Administrative Agent or any other Lender an amount owed by such
Lender pursuant to the terms of this Credit Agreement, or (c) has been deemed
insolvent by its principal regulator or has become subject to a bankruptcy or
insolvency proceeding or to a receiver, trustee or similar official.
"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
"Domestic Lending Office" shall mean, initially, the office of each
Lender designated as such Lender's Domestic Lending Office shown on Schedule
9.2; and thereafter, such other office of such Lender as such Lender may from
time to time specify to the Administrative Agent and the Parent Borrower as the
office of such Lender at which Alternate Base Rate Loans of such Lender are to
be made.
"Domestic Subsidiary" shall mean any Subsidiary that is organized and
existing under the laws of the United States or any state or commonwealth
thereof or under the laws of the District of Columbia.
"Environmental Claim" shall mean, with respect to any Person, any
written notice, claim, demand or other communication (collectively, a "claim")
by any other Person alleging or asserting such Person's liability for
investigatory costs, cleanup costs, governmental response costs, damages to
natural resources or other Property, personal injuries, fines or penalties
arising out of, based on or resulting from (a) the presence, or release into
the environment, of any Hazardous Material at any location, whether or not
owned by such Person, or (b) circumstances forming the basis of any violation,
or alleged violation, of any Environmental Law. The term "Environmental Claim"
shall include, without limitation, any claim by any Governmental Authority for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and any claim by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the presence of Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the environment.
"Environmental Laws" shall mean any and all applicable foreign,
Federal, state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority or other
Requirement of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health or the
environment, as now or may at any time be in effect during the term of this
Agreement.
"Equity Issuance" shall mean any issuance by the Parent Borrower or
any of its Restricted Subsidiaries to any Person which is not a Credit Party of
(a) shares of its Capital Stock, (b) any shares of its Capital Stock pursuant
to the exercise of options or warrants or (c) any shares of its Capital Stock
pursuant to the conversion of any debt securities to equity.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
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"ERISA Affiliate" shall mean any corporation or trade or business that
is a member of any group of organizations (i) described in Section 414(b) or
(c) of the Code of which any Credit Party or any of its Subsidiaries is a
member, (ii) solely for purposes of potential liability under Section
302(c)(11) of ERISA and Section 4l2(c)(l1) of the Code and the lien created
under Section 302(f) of ERISA and Section 412(n) of the Code, described in
Section 414(m) or (o) of the Code of which any Credit Party or any of its
Subsidiaries is a member and (iii) which are under common control with any
Credit Party or any of its Subsidiaries within the meaning of Section
4001(a)(14) of ERISA.
"Eurodollar Reserve Percentage" shall mean for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve
requirement (including without limitation any basic, supplemental or emergency
reserves) in respect of Eurocurrency liabilities, as defined in Regulation D of
such Board as in effect from time to time, or any similar category of
liabilities for a member bank of the Federal Reserve System in New York City.
"Event of Default" shall mean any of the events specified in Section
7.1; provided, however, that any requirement for the giving of notice or the
lapse of time, or both, or any other condition, has been satisfied.
"Excluded Disposition" shall mean the sale, transfer, or other
disposition of (a) any motor vehicles or other equipment no longer used or
useful in the business of the Parent Borrower or any of its Restricted
Subsidiaries, (b) any inventory, materials and other assets in the ordinary
course of business and on ordinary business terms and (c) Permitted Investments
described in clause (a) of the definition thereof.
"Extension of Credit" shall mean, as to any Lender, the making of a
Loan by such Lender or the issuance of, or participation in, a Letter of Credit
by such Lender.
"Federal Funds Effective Rate" shall have the meaning set forth in the
definition of "Alternate Base Rate".
"Fee Letter" shall mean the letter agreement dated October 20, 1999
addressed to the Parent Borrower from the Administrative Agent, as amended,
modified or otherwise supplemented.
"First Tier Foreign Subsidiary" shall mean any direct Foreign
Subsidiary of a Credit Party.
"First Union" shall mean First Union National Bank, a national banking
association.
"Foreign Subsidiary" shall mean any Subsidiary that is not a Domestic
Subsidiary.
"Funded Debt" shall mean, with respect to any Person, without
duplication, (a) all Indebtedness of such Person other than Indebtedness of the
types referred to in clause (e), (g), (i)
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and (m) of the definition of "Indebtedness" set forth in this Section 1.1, (b)
all Funded Debt of others of the type referred to in clause (a) above secured
by (or for which the holder of such Funded Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out of the
proceeds of production from, property owned or acquired by such Person, whether
or not the obligations secured thereby have been assumed, (c) all Guaranty
Obligations of such Person with respect to Funded Debt of the type referred to
in clause (a) above of another Person and (d) Funded Debt of the type referred
to in clause (a) above of any partnership or unincorporated joint venture in
which such Person is legally obligated or has a reasonable expectation of being
liable with respect thereto.
"GAAP" shall mean generally accepted accounting principles in effect
in the United States of America applied on a consistent basis, subject,
however, in the case of determination of compliance with the financial
covenants set out in Section 5.9 to the provisions of Section 1.3.
"Government Acts" shall have the meaning set forth in Section 2.21.
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantor" shall mean any of the Domestic Subsidiaries identified as
a "Guarantor" on the signature pages hereto and the Additional Credit Parties
which execute a Joinder Agreement, together with their successors and permitted
assigns.
"Guaranty" shall mean the guaranty of the Guarantors set forth in
Article X.
"Guaranty Obligations" means, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or
collection) guaranteeing or intended to guarantee any Indebtedness of any other
Person in any manner, whether direct or indirect, and including without
limitation any obligation, whether or not contingent, (i) to purchase any such
Indebtedness or any property constituting security therefor, (ii) to advance or
provide funds or other support for the payment or purchase of any such
Indebtedness or to maintain working capital, solvency or other balance sheet
condition of such other Person (including without limitation keep well
agreements, maintenance agreements, comfort letters or similar agreements or
arrangements) for the benefit of any holder of Indebtedness of such other
Person, (iii) to lease or purchase assets, securities or services primarily for
the purpose of assuring the holder of such Indebtedness, or (iv) to otherwise
assure or hold harmless the holder of such Indebtedness against loss in respect
thereof. The amount of any Guaranty Obligation hereunder shall (subject to any
limitations set forth therein) be deemed to be an amount equal to the
outstanding principal amount (or maximum principal amount, if larger) of the
Indebtedness in respect of which such Guaranty Obligation is made.
"Hazardous Material" shall mean, collectively, (a) any petroleum or
petroleum products, flammable materials, explosives, radioactive materials,
asbestos, urea formaldehyde foam insulation, and transformers or other
equipment that contain polychlorinated biphenyls ("PCB's"), (b) any chemicals
or other materials or substances that are now or hereafter become
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defined as or included in the definition of "hazardous substances", "hazardous
wastes", "hazardous materials", "extremely hazardous wastes", "restricted
hazardous wastes", "toxic substances", "toxic pollutants", "contaminants",
"pollutants" or words of similar import under any Environmental Law and (c) any
other chemical or other material or substance, exposure to which is now or
hereafter prohibited, limited or regulated under any Environmental Law.
"Hedging Agreements" shall mean, with respect to any Person, any
agreement entered into to protect such Person against fluctuations in interest
rates, or currency values, including, without limitation, any interest rate
swap, cap or collar agreement or similar arrangement between such Person and
one or more counterparties, any foreign currency exchange agreement, currency
protection agreements or other interest or exchange rate hedging agreements.
"Increased Commitment Date" has the meaning set forth in Section 2.8.
"Indebtedness" shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to assets purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered
into in the ordinary course of business), (d) all obligations of such Person
issued or assumed as the deferred purchase price of assets or services
purchased by such Person (other than trade debt incurred in the ordinary course
of business and due within six months of the incurrence thereof) which would
appear as liabilities on a balance sheet of such Person, (e) all obligations of
such Person under take-or-pay or similar arrangements, (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on, or payable out
of the proceeds of production from, assets owned or acquired by such Person,
whether or not the obligations secured thereby have been assumed, (g) all
Guaranty Obligations of such Person with respect to Indebtedness of another
Person, (h) the principal portion of all obligations of such Person under
Capital Leases, (i) all obligations of such Person under Hedging Agreements,
(j) the maximum amount of all standby letters of credit issued or bankers'
acceptances facilities created for the account of such Person and, without
duplication, all drafts drawn thereunder (to the extent unreimbursed), (k) all
preferred Capital Stock issued by such Person and which by the terms thereof
could be (at the request of the holders thereof or otherwise) subject to
mandatory sinking fund payments, redemption or other acceleration, (l) the
principal balance outstanding under any synthetic lease, tax retention
operating lease, accounts receivable securitization program, off-balance sheet
loan or similar off-balance sheet financing product, including without
limitation, the outstanding Attributed Principal Amount under any Permitted
Receivables Financing, and (m) the Indebtedness of any partnership or
unincorporated joint venture in which such Person is a general partner or a
joint venturer.
"Indenture" shall mean that certain Indenture dated as of September 4,
1997 among the Subsidiary Borrower and SFG Capital Corporation, a Delaware
corporation, as issuers and Texas Commerce Bank National Association, a
national banking association, as trustee, as amended, modified or supplemented
from time to time.
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<PAGE> 17
"Insolvency" shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term as used
in Section 4245 of ERISA.
"Insolvent" shall mean being in a condition of Insolvency.
"Intellectual Property" has the meaning set forth in Section 3.16.
"Interest Coverage Ratio" means, with respect to the Parent Borrower
and its Restricted Subsidiaries on a consolidated basis for the twelve month
period ending on the last day of any fiscal quarter of the Parent Borrower, the
ratio of (a) Consolidated EBITDA to (b) Consolidated Interest Expense.
Notwithstanding the foregoing, for purposes of calculating the Interest
Coverage Ratio of the Parent Borrower and its Restricted Subsidiaries for the
first three complete fiscal quarters to occur after the Closing Date, the
interest component thereof shall be determined by annualizing such component
such that for the first complete fiscal quarter to occur after the Closing Date
such component would be multiplied by four (4), the first two complete fiscal
quarters would be multiplied by two (2) and the first three complete fiscal
quarters would be multiplied by one and one-third (1<T074>).
"Interest Payment Date" shall mean (a) as to any Alternate Base Rate
Loan or Swingline Loan, the last day of each March, June, September and
December and on the applicable Maturity Date, (b) as to any LIBOR Rate Loan
having an Interest Period of three months or less, the last day of such
Interest Period, and (c) as to any LIBOR Rate Loan having an Interest Period
longer than three months, the day which is three months after the first day of
such Interest Period and the last day of such Interest Period.
"Interest Period" shall mean, with respect to any LIBOR Rate Loan,
(i) initially, the period commencing on the Borrowing Date or
conversion date, as the case may be, with respect to such LIBOR Rate
Loan and ending one, two, three or six months thereafter, as selected
by a Borrower in the Notice of Borrowing or Notice of Conversion given
with respect thereto; and
(ii) thereafter, each period commencing on the last day of
the immediately preceding Interest Period applicable to such LIBOR
Rate Loan and ending one, two, three or six months thereafter, as
selected by a Borrower by irrevocable notice to the Administrative
Agent not less than three Business Days prior to the last day of the
then current Interest Period with respect thereto;
provided that the foregoing provisions are subject to the
following:
(A) if any Interest Period pertaining to a LIBOR
Rate Loan would otherwise end on a day that is not a Business
Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension
would be to carry such Interest Period into another calendar
month in which event such Interest Period shall end on the
immediately preceding Business Day;
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<PAGE> 18
(B) any Interest Period pertaining to a LIBOR Rate
Loan that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the relevant calendar
month;
(C) if the Borrower requesting such borrowing shall
fail to give notice as provided above, such Borrower shall be
deemed to have selected an Alternate Base Rate Loan to
replace the affected LIBOR Rate Loan;
(D) no Interest Period shall extend beyond the
Maturity Date and, further with regard to the Term A Loans,
no Interest Period shall extend beyond any principal
amortization payment date unless the portion of such Term A
Loan consisting of Alternate Base Rate Loans together with
the portion of such Term A Loan consisting of LIBOR Rate
Loans with Interest Periods expiring prior to or concurrently
with the date such principal amortization payment date is
due, is at least equal to the amount of such principal
amortization payment due on such date; and
(E) no more than sixteen (16) LIBOR Rate Loans may
be in effect at any time. For purposes hereof, LIBOR Rate
Loans with different Interest Periods shall be considered as
separate LIBOR Rate Loans, even if they shall begin on the
same date and have the same duration, although borrowings,
extensions and conversions may, in accordance with the
provisions hereof, be combined at the end of existing
Interest Periods to constitute a new LIBOR Rate Loan with a
single Interest Period.
"Issuing Lender" shall mean First Union.
"Issuing Lender Fees" shall have the meaning set forth in Section
2.7(c).
"Joinder Agreement" shall mean a Joinder Agreement substantially in
the form of Schedule 5.10, executed and delivered by an Additional Credit Party
in accordance with the provisions of Section 5.10.
"Joint and Several Obligations" shall mean that portion of the Credit
Party Obligations consisting of (a) the SFG Revolving Loans and SFG Term Loans
and all principal, interest and fees in connection with such Loans, (b) all
fees (other than Letter of Credit Fees and Issuing Lender Fees) incurred or
owed by the Subsidiary Borrower pursuant to the terms of the Credit Documents,
including, without limitation, its portion of the Commitment Fees, (c) any
indemnification obligations of the Subsidiary Borrower under the Credit
Documents and (d) any and all other costs and expenses that the Subsidiary
Borrower is liable for pursuant to the terms of the Credit Documents.
"Lender" shall have the meaning set forth in the first paragraph of
this Agreement.
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<PAGE> 19
"Letters of Credit" shall mean any letter of credit issued by the
Issuing Lender pursuant to the terms hereof, as such Letters of Credit may be
amended, modified, extended, renewed or replaced from time to time.
"Letter of Credit Fee" shall have the meaning set forth in Section
2.7(b).
"Leverage Ratio" shall mean, with respect to the Parent Borrower and
its Restricted Subsidiaries on a consolidated basis for the twelve month period
ending on the last day of any fiscal quarter, the ratio of (a) Funded Debt of
the Parent Borrower and its Restricted Subsidiaries on a consolidated basis on
the last day of such period to (b) Consolidated EBITDA for such period.
"LIBOR" shall mean, for any LIBOR Rate Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "LIBOR" shall mean, for any LIBOR Rate Loan for
any Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as
the London interbank offered rate for deposits in Dollars at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates (rounded
upwards, if necessary, to the nearest 1/100 of 1%). If, for any reason, neither
of such rates is available, then "LIBOR" shall mean the rate per annum at
which, as determined by the Administrative Agent, Dollars in an amount
comparable to such LIBOR Rate Loan are being offered to leading banks at
approximately 11:00 A.M. London time, two (2) Business Days prior to the
commencement of the applicable Interest Period for settlement in immediately
available funds by leading banks in the London interbank market for a period
equal to the Interest Period selected.
"LIBOR Lending Office" shall mean, initially, the office of each
Lender designated as such Lender's LIBOR Lending Office shown on Schedule 9.2;
and thereafter, such other office of such Lender as such Lender may from time
to time specify to the Administrative Agent and the Parent Borrower as the
office of such Lender at which the LIBOR Rate Loans of such Lender are to be
made.
"LIBOR Rate" shall mean a rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) determined by the Administrative
Agent pursuant to the following formula:
<TABLE>
<CAPTION>
LIBOR Rate = LIBOR
------------------------------------
<S> <C>
1.00 - Eurodollar Reserve Percentage
</TABLE>
"LIBOR Rate Loan" shall mean Loans the rate of interest applicable to
which is based on the LIBOR Rate.
14
<PAGE> 20
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
Capital Lease having substantially the same economic effect as any of the
foregoing).
"Loan" shall mean a Revolving Loan, a SFG Revolving Loan, a Swingline
Loan, the Term A Loan and/or the SFG Term Loan, or a portion of any of the
foregoing, as applicable.
"LOC Commitment" shall mean the commitment of the Issuing Lender to
issue Letters of Credit and with respect to each Lender, the commitment of such
Lender to purchase participation interests in the Letters of Credit up to such
Lender's LOC Committed Amount as specified in Schedule 2.1(a), as such amount
may be reduced from time to time in accordance with the provisions hereof.
"LOC Commitment Percentage" shall mean, for each Lender, the
percentage identified as its LOC Commitment Percentage on Schedule 2.1(a), as
such percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 9.6(c).
"LOC Committed Amount" shall mean, collectively, the aggregate amount
of all of the LOC Commitments of the Lenders to issue and participate in
Letters of Credit as referenced in Section 2.6 and, individually, the amount of
each Lender's LOC Commitment as specified in Schedule 2.1(a).
"LOC Documents" shall mean, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in connection
therewith, any application therefor, and any agreements, instruments,
guarantees or other documents (whether general in application or applicable
only to such Letter of Credit) governing or providing for (i) the rights and
obligations of the parties concerned or (ii) any collateral security for such
obligations.
"LOC Obligations" shall mean, at any time, the sum of (i) the maximum
amount which is, or at any time thereafter may become, available to be drawn
under Letters of Credit then outstanding, assuming compliance with all
requirements for drawings referred to in such Letters of Credit plus (ii) the
aggregate amount of all drawings under Letters of Credit honored by the Issuing
Lender but not theretofore reimbursed.
"Mandatory Borrowing" shall have the meaning set forth in Section
2.5(b)(ii) or Section 2.6(e), as the context may require.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, operations, property, prospects or financial condition of the
Parent Borrower and its Restricted Subsidiaries taken as a whole, (b) the
ability of the Borrowers and Guarantors, taken as a whole, to perform their
obligations, when such obligations are required to be performed, under this
Agreement, any of the Notes or any other Credit Document or (c) the validity or
enforceability of this Agreement, any of the Notes or any of the other Credit
Documents or the rights or remedies of the Administrative Agent or the Lenders
hereunder or thereunder.
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<PAGE> 21
"Material Contract" shall mean any contract or other arrangement,
whether written or oral, to which the Parent Borrower or any of its Restricted
Subsidiaries is a party as to which the breach, nonperformance, cancellation or
failure to renew by any party thereto could reasonably be expected to have a
Material Adverse Effect.
"Material Subsidiary" shall mean any Restricted Subsidiary (other than
a Receivables Financing SPC) of a Credit Party with assets of $100,000 or more;
provided, however, if the aggregate assets of Restricted Subsidiaries (other
than Receivables Financing SPCs) that are not Material Subsidiaries at any time
exceeds $500,000, the Borrower shall designate one or more of such Restricted
Subsidiaries as Material Subsidiaries such that, after giving effect to such
designations, the aggregate assets of Restricted Subsidiaries (other than
Receivables Financing SPCs) that are not Material Subsidiaries shall be less
than $500,000.
"Maturity Date" shall mean the fifth anniversary of the Closing Date.
"Merger Agreement" shall mean that certain Amended and Restated
Contribution Agreement, Plan of Merger and Purchase Agreement, dated as of
November 12, 1999, among Suiza, Suiza Socal Holdings, Inc., Suiza GTL Holdings,
Inc., LOS Holdings, Inc., Suiza Fluid Dairy Group Holdings, Inc., Suiza
Management Corporation, Suiza Fluid Dairy Group GP, LLC, the Suiza companies
identified therein, Suiza GTL, LLC, Suiza Socal, LLC, Robinson Dairy, Inc.,
Dairy Farmers of America, Inc., DFA Investment Company, Southern Foods Group,
L.P., SFG Management Limited Liability Company, SFG Capital Corporation, the
Parent Borrower, Pete Schenkel and, for certain limited purposes, Mid-Am
Capital, L.L.C.
"Moody's" shall mean Moody's Investors Service, Inc.
"Multiemployer Plan" shall mean a Plan which is a multiemployer plan
as defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" shall mean the aggregate cash proceeds received by
the Parent Borrower or any of its Restricted Subsidiaries in respect of any
Asset Disposition, net of (a) direct costs (including, without limitation,
legal, accounting and investment banking fees, and sales commissions) and (b)
taxes paid or payable as a result thereof; it being understood that "Net Cash
Proceeds" shall include, without limitation, any cash received upon the sale or
other disposition of any non-cash consideration received by the Parent Borrower
or any of its Restricted Subsidiaries in any Asset Disposition.
"Note" or "Notes" shall mean the Revolving Notes, the Swingline Note
and/or the Term Notes, collectively, separately or individually, as
appropriate.
"Notice of Borrowing" shall mean the written notice of borrowing as
referenced and defined in Section 2.1(b)(i).
"Notice of Conversion" shall mean the written notice of extension or
conversion as referenced and defined in Section 2.12.
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<PAGE> 22
"Obligations" shall mean, collectively, Loans and LOC Obligations.
"Parent Borrower" shall have the meaning set forth in the first
paragraph of this Agreement.
"Participant" shall have the meaning set forth in Section 9.6(b).
"Participation Interest" shall mean the purchase by a Lender of a
participation interest in Swingline Loans as provided in Section 2.5(b)(ii) or
in Letters of Credit as provided in Section 2.6.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Permitted Acquisition" shall mean an acquisition by any Credit Party
(other than the Subsidiary Borrower) which (i) is an acquisition of a Person or
assets of a Person in the same or a similar line of business, (ii) is in an
amount not greater than $300,000,000 in total cash consideration (after
deducting cash on the balance sheet of the Person acquired or included in the
assets being acquired) for any single acquisition, (iii) is approved by the
Board of Directors or the requisite shareholders of the Person being acquired
or Person transferring the assets being acquired, (iv) if an acquisition of
Capital Stock of a Person, at least 51% of all issued and outstanding Capital
Stock of such Person is acquired, and (v) after giving effect to such
acquisition on a Pro Forma Basis, the Parent Borrower and its Restricted
Subsidiaries are in compliance with each of the financial covenants set forth
in Section 5.9.
"Permitted Investments" shall mean:
(a) cash or Cash Equivalents;
(b) investments outstanding as of the Closing Date and
identified in Schedule 1.1(b) or other investments not exceeding in
acquisition cost $5,000,000 in the aggregate;
(c) investments of any Subsidiary of the Parent Borrower in
the Parent Borrower, investments of any Restricted Subsidiary of the
Parent Borrower in any other Restricted Subsidiary of the Parent
Borrower or investments by the Parent Borrower in any of its
Restricted Subsidiaries; provided, that, so long as the Senior
Subordinated Notes remain outstanding, no investments in the
Subsidiary Borrower and its Subsidiaries shall be permitted except
investments used to retire or repurchase Senior Subordinated Notes;
(d) Permitted Acquisitions;
(e) operating deposit accounts with depository institutions;
(f) Hedging Agreements;
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<PAGE> 23
(g) investments permitted under Section 6.4(b) hereof;
(h) investments by the Parent Borrower and its Subsidiaries
in the Capital Stock of their Subsidiaries to the extent outstanding
as of the Closing Date;
(i) loans and advances to employees in the ordinary course of
business not exceeding $10,000,000 in the aggregate;
(j) deposits to secure bids, tenders, utilities, vendors,
leases, licenses, statutory obligations, surety and appeal bonds and
other deposits of like nature arising in the ordinary course of
business;
(k) Investments by any Credit Party in a Receivables
Financing SPC made in connection with a Permitted Receivables
Financing;
(l) additional investments up to but not exceeding
$50,000,000 in the aggregate during each fiscal year, including
investments in Unrestricted Subsidiaries; provided, however, that
notwithstanding the foregoing, the Parent Borrower shall be permitted
to make additional investments in Unrestricted Subsidiaries during any
fiscal year in an amount equal to the aggregate amount of dividends or
other distributions received by the Parent Borrower from Unrestricted
Subsidiaries during such fiscal year;
(m) investments by the Parent Borrower or any of its
Restricted Subsidiaries, each of which (i) existed before the time of
acquisition of the Person or assets of the Person who made such
investment and (ii) was not made in anticipation of such acquisition;
and
(n) to the extent no Default or Event of Default exists at
such time or would result therefrom, loans by the Parent Borrower to
Suiza or its Subsidiaries in connection with acquisitions by Suiza or
any of its Subsidiaries, provided that the business or assets acquired
in connection with such acquisitions are then contributed to the
Parent Borrower or any of its Restricted Subsidiaries.
As used herein, "investment" means all investments, in cash or by
delivery of assets made, directly or indirectly in, to or from any Person,
whether by acquisition of shares of Capital Stock, property, assets,
indebtedness or other obligations or securities or by loan advance, capital
contribution or otherwise.
"Permitted Liens" shall mean:
(a) Liens created by or otherwise existing, under or in
connection with this Agreement or the other Credit Documents in favor
of the Lenders;
(b) Liens in connection with Hedging Agreements, but only (i)
to the extent such Liens secure obligations under Hedging Agreements
with any Lender or any
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<PAGE> 24
Affiliate of a Lender, (ii) to the extent such Liens are on the same
collateral as to which the Administrative Agent on behalf of the
Lenders also has a Lien and (iii) if the provider of any such Hedging
Agreement and the Lenders shall share pari passu in the collateral
subject to such Liens;
(c) Liens in existence on the Closing Date and listed on
Schedule 1.1(c);
(d) Liens imposed by any Governmental Authority for taxes,
assessments or charges not yet delinquent or that are being contested
in good faith and by appropriate proceedings if, unless the amount
thereof is not material with respect to it or its financial condition,
adequate reserves with respect thereto are maintained on the books of
the Parent Borrower or the affected Subsidiaries, as the case may be,
in accordance with GAAP;
(e) carriers', warehousemen's, mechanics', materialmen's,
landlord's, repairmen's or other like Liens arising in the ordinary
course of business that are not overdue for a period of more than 30
days or that are being contested in good faith and by appropriate
proceedings;
(f) Liens securing judgments but only to the extent for an
amount and for a period not resulting in an Event of Default under
Section 7.1(f) hereof;
(g) pledges or deposits under worker's compensation,
unemployment insurance and other social security legislation;
(h) deposits or pledges to secure the performance of bids,
trade contracts (other than for Indebtedness), leases, licenses,
statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary course of
business;
(i) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and
encumbrances consisting of zoning restrictions, easements, licenses,
restrictions on the use of Property or minor imperfections in title
thereto that, in the aggregate, are not material in amount, and that
do not in any case materially detract from the value of the Property
subject thereto or interfere with the ordinary conduct of the business
of the Parent Borrower or any of its Subsidiaries;
(j) Liens upon personal Property acquired after the date
hereof (by purchase, construction or otherwise), or upon other assets
acquired after the date hereof as a Capital Expenditure, by the Parent
Borrower or any of its Subsidiaries, each of which Liens either (i)
existed on such assets before the time of its acquisition and was not
created in anticipation thereof or (ii) was created solely for the
purpose of securing Indebtedness representing, or incurred to finance,
refinance or refund, the cost of such assets; provided that (A) no
such Lien shall extend to or cover any assets of the Parent Borrower
or such Subsidiary other than the assets so acquired, (B) the
principal amount of Indebtedness
19
<PAGE> 25
secured by any such Lien shall at no time exceed the fair market value
(as determined in good faith by a Responsible Officer of the Parent
Borrower) of such assets at the time they were acquired, and (C) the
principal amount of all Indebtedness (other than Indebtedness
permitted by Section 6.1(c) hereof) secured by such Liens shall not
exceed $50,000,000 in the aggregate;
(k) Liens upon real Property heretofore leased or leased
after the date hereof (under operating or Capital Leases) in the
ordinary course of business by the Parent Borrower or any of its
Subsidiaries in favor of the lessor created at the inception of the
lease transaction, securing obligations of the Parent Borrower or any
of its Subsidiaries under or in respect of such lease and extending to
or covering only the Property subject to such lease and improvements
thereon;
(l) Liens of sellers or creditors of sellers of farm products
encumbering such farm products when sold to any of the Parent Borrower
or its Subsidiaries pursuant to the Food Security Act of 1985 or
pursuant to similar state laws to the extent such Liens may be deemed
to extend to the assets of such Person;
(m) protective Uniform Commercial Code filings with respect
to personal Property leased by, or consigned to, any of the Parent
Borrower or its Subsidiaries;
(n) Liens securing Indebtedness of up to $100,000,000 in the
aggregate principal amount at any one time outstanding which
Indebtedness is permitted under Section 6.1(g) hereof;
(o) Liens upon assets of Unrestricted Subsidiaries;
(p) Liens in favor of a Receivables Financing SPC or
Receivables Financier created or deemed to exist in connection with a
Permitted Receivables Financing (including any related filings of any
financing statements), but only to the extent that any such Lien
relates to the applicable Transferred Assets actually sold,
contributed, financed or otherwise conveyed or pledged pursuant to
such transaction;
(q) any extension, renewal or replacement of the foregoing;
provided, however, that the Liens permitted under this clause (q)
shall not be spread to cover any additional Indebtedness or assets;
and
(r) Liens securing Indebtedness to the extent such
Indebtedness is permitted pursuant to Section 6.1(h).
"Permitted Receivables Financing" shall mean any one or more
receivables financings in which (a) any Credit Party (i) sells (as determined
in accordance with GAAP) any accounts receivable, notes receivable, rights to
future lease payments or residuals (collectively, together with certain related
property relating thereto and the right to collections thereon, being the
"Transferred Assets") to any Person that is not a Subsidiary or Affiliate of a
Borrower (with respect to any such transaction, the "Receivables Financier"),
(ii) borrows from such Receivables
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<PAGE> 26
Financier and secures such borrowings by a pledge of such Transferred Assets
and/or (iii) otherwise finances its acquisition of such Transferred Assets and,
in connection therewith, conveys an interest in such Transferred Assets to the
Receivables Financier or (b) any Credit Party sells, conveys or otherwise
contributes any Transferred Assets to a Receivables Financing SPC, which
Receivables Financing SPC then (i) sells (as determined in accordance with
GAAP) any such receivables (or an interest therein) to any Receivables
Financier, (ii) borrows from such Receivables Financier and secures such
borrowings by a pledge of such receivables or (iii) otherwise finances its
acquisition of such receivables and, in connection therewith, conveys an
interest in such receivables to the Receivables Financier, provided that (A)
the aggregate Attributed Principal Amount for all such receivables financings
shall not at any time exceed $300,000,000, (B) such receivables financing shall
not involve any recourse to any Credit Party for any reason other than (x)
repurchases of non-eligible receivables or (y) indemnifications for losses
other than credit losses related to the receivables sold in such financing, (C)
the Administrative Agent shall be reasonably satisfied with the structure of
and documentation for any such transaction and that the terms of such
transaction, including the discount at which receivables are sold, the term of
the commitment of the Receivables Financier thereunder and any termination
events, shall be (in the good faith understanding of the Administrative Agent)
consistent with those prevailing in the market for similar transactions
involving a receivables originator/servicer of similar credit quality and a
receivables pool of similar characteristics and (D) the documentation for such
transaction shall not be amended or modified without the prior written approval
of the Administrative Agent.
"Person" shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Plan" shall mean, at any particular time, any employee benefit plan
which is covered by Title IV of ERISA and in respect of which the Borrower or a
Commonly Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Pledge Agreement" shall mean the Pledge Agreement dated as of the
Closing Date given by the Borrowers and the other Credit Parties to the
Administrative Agent, as amended, modified or supplemented from time to time in
accordance with its terms.
"Prime Rate" shall have the meaning set forth in the definition of
Alternate Base Rate.
"Pro Forma Basis" shall mean, with respect to any Permitted
Acquisition or any dividend made pursuant to Section 6.10(g), that such
Permitted Acquisition or dividend shall be deemed to have occurred or made, as
applicable, as of the first day of the four fiscal-quarter period ending as of
the most recent fiscal quarter end preceding the date of such Permitted
Acquisition or dividend.
"Property" shall mean any tangible property or assets, whether real or
personal.
"Purchasing Lenders" shall have the meaning set forth in Section
9.6(c).
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<PAGE> 27
"Real Properties" shall have the meaning set forth in Section 3.10(a).
"Receivables Financier" shall have the meaning set forth in the
definition of Permitted Receivables Financing.
"Receivables Financing SPC" shall mean, in respect of any Permitted
Receivables Financing, any Subsidiary or Affiliate of a Borrower to which any
Credit Party sells, contributes or otherwise conveys any Transferred Assets in
connection with such Permitted Receivables Financing.
"Recovery Event" shall mean the receipt by the Parent Borrower or any
of its Restricted Subsidiaries of any cash insurance proceeds or condemnation
award payable by reason of theft, loss, physical destruction or damage, taking
or similar event with respect to any of their respective property or assets.
"Register" shall have the meaning set forth in Section 9.6(d).
"Reorganization" shall mean, with respect to any Multiemployer Plan,
the condition that such Plan is in reorganization within the meaning of such
term as used in Section 4241 of ERISA.
"Reportable Event" shall mean any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty-day notice
period is waived under PBGC Reg. ss.4043.
"Required Lenders" shall mean (i) Lenders holding in the aggregate not
less than 51% of all Revolving Loans, SFG Revolving Loans and LOC Obligations
then outstanding at such time plus the aggregate unused Revolving Commitments
at such time (treating for purposes hereof in the case of Swingline Loans and
LOC Obligations, in the case of the Swingline Lender and the Issuing Lender,
only the portion of the Swingline Loans and the LOC Obligations of the
Swingline Lender and the Issuing Lender, respectively, which is not subject to
the Participation Interests of the other Lenders and, in the case of the
Lenders other than the Swingline Lender and the Issuing Lender, the
Participation Interests of such Lenders in Swingline Loans and LOC Obligations
hereunder as direct Obligations of such Lenders) and (ii) Lenders holding in
the aggregate not less than 51% of all Term Loans then outstanding at such
time; provided, however, that if any Lender shall be a Defaulting Lender at
such time, then there shall be excluded from the determination of Required
Lenders, Obligations (including Participation Interests) owing to such
Defaulting Lender and such Defaulting Lender's Commitments, or after
termination of the Commitments, the principal balance of the Obligations owing
to such Defaulting Lender.
"Requirement of Law" shall mean, as to any Person, the Certificate of
Incorporation and By-laws or other organizational or governing documents of
such Person, and each law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person
or any of its property is subject.
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<PAGE> 28
"Responsible Officer" of any Person shall mean the President, the
Chief Executive Officer, the Chief Financial Officer or the Vice
President/Treasurer of such Person.
"Restricted Payment" shall mean (a) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of the Parent Borrower or any of its Restricted Subsidiaries, now
or hereafter outstanding, (b) any redemption, retirement, sinking fund or
similar payment, purchase or other acquisition for value, direct or indirect,
of any shares of any class of Capital Stock of the Parent Borrower or any of
its Restricted Subsidiaries, now or hereafter outstanding, or (c) any payment
made to retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of Capital Stock of the
Parent Borrower or any of its Restricted Subsidiaries, now or hereafter
outstanding.
"Restricted Subsidiaries" shall mean the Subsidiaries of the Parent
Borrower other than the Unrestricted Subsidiaries.
"Revolving Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make Revolving Loans and SFG Revolving Loans in an
aggregate principal amount at any time outstanding up to such Lender's
Revolving Commitment Percentage of the Revolving Committed Amount as specified
in Schedule 2.1(a), as such amount may be increased or reduced from time to
time in accordance with the provisions hereof or in connection with any
assignment made in accordance with the provisions of Section 9.6(c).
"Revolving Commitment Percentage" shall mean, for each Lender, the
percentage identified as its Revolving Commitment Percentage on Schedule
2.1(a), as such percentage may be increased or reduced pursuant to Section
2.8(d) or in connection with any assignment made in accordance with the
provisions of Section 9.6(c).
"Revolving Committed Amount" shall mean, with respect to the Lenders
collectively, the aggregate amount of all Revolving Commitments as defined in
Section 2.1(a), as such amount may be increased or reduced from time to time in
accordance with the provisions hereof, and, with respect to each Lender, the
amount of such Lender's Revolving Commitment as specified on Schedule 2.1(a),
as such amount may be increased or reduced from time to time in accordance with
the provisions hereof or in connection with any assignment made in accordance
with the provisions of Section 9.6(c).
"Revolving Loan" shall have the meaning set forth in Section 2.1.
"Revolving Note" or "Revolving Notes" shall mean the promissory notes
of the Parent Borrower in favor of each of the Lenders evidencing the Revolving
Loans provided pursuant to Section 2.1(d), individually or collectively, as
appropriate, as such promissory notes may be amended, modified, supplemented,
extended, renewed or replaced from time to time.
"S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc.
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
23
<PAGE> 29
"Security Documents" shall mean the Pledge Agreement and such other
documents executed and delivered in connection with the attachment and
perfection of the Administrative Agent's security interests and Liens arising
thereunder, including, without limitation, UCC financing statements.
"Senior Funded Debt" shall mean, as of any date of determination for
the Parent Borrower and its Restricted Subsidiaries, all Funded Debt
(including, without limitation, Extensions of Credit hereunder) other than (a)
the Senior Subordinated Notes and (b) other Funded Debt which is subordinate in
right of payment to the Credit Party Obligations on terms approved by the
Required Lenders.
"Senior Leverage Ratio" shall mean, with respect to the Parent
Borrower and its Restricted Subsidiaries on a consolidated basis for the twelve
month period ending on the last day of any fiscal quarter, the ratio of (a)
Senior Funded Debt of the Parent Borrower and its Restricted Subsidiaries on a
consolidated basis on the last day of such period to (b) Consolidated EBITDA
for such period.
"Senior Subordinated Notes" shall mean the 9 7/8% Senior Subordinated
Notes due 2007 issued pursuant to the Indenture.
"SFG Revolving Loans" shall have the meaning set forth in Section 2.2.
"SFG Revolving Note" or "SFG Revolving Notes" shall mean the
promissory notes of the Borrowers in favor of each of the Lenders evidencing
the SFG Revolving Loans provided pursuant to Section 2.2(d), individually or
collectively, as appropriate, as such promissory notes may be amended,
modified, supplemented, extended, renewed or replaced from time to time.
"SFG Term Loan" shall have the meaning set forth in Section 2.4(a).
"SFG Term Loan Commitment" shall mean, with respect to each Lender,
the commitment of such Lender to make its portion of the SFG Term Loan in a
principal amount equal to such Lender's Term Loan Commitment Percentage of the
SFG Term Loan Committed Amount (and for purposes of making determinations of
Required Lenders hereunder after the Closing Date, the principal amount
outstanding on the SFG Term Loan).
"SFG Term Loan Committed Amount" shall have the meaning set forth in
Section 2.4(a).
"SFG Term Note" or "SFG Term Notes" shall mean the promissory notes of
the Borrowers in favor of each of the Lenders evidencing the portion of the SFG
Term Loan provided pursuant to Section 2.4(d), individually or collectively, as
appropriate, as such promissory notes may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time.
"Single Employer Plan" shall mean any Plan which is not a
Multiemployer Plan.
"Subsidiary" shall mean, as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary
24
<PAGE> 30
voting power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise qualified, all references to a "Subsidiary" or
to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries
of the Parent Borrower and shall include the Subsidiary Borrower.
"Subsidiary Borrower" shall have the meaning set forth in the first
paragraph of this Agreement.
"Suiza" shall mean Suiza Foods Corporation, a Delaware corporation.
"Swingline Commitment" shall mean the commitment of the Swingline
Lender to make Swingline Loans in an aggregate principal amount at any time
outstanding up to the Swingline Committed Amount, and the commitment of the
Lenders to purchase participation interests in the Swingline Loans as provided
in Section 2.5(b)(ii), as such amounts may be reduced from time to time in
accordance with the provisions hereof.
"Swingline Committed Amount" shall mean the amount of the Swingline
Lender's Swingline Commitment as specified in Section 2.5(a).
"Swingline Lender" shall mean First Union, in its capacity as such.
"Swingline Loan" or "Swingline Loans" shall have the meaning set forth
in Section 2.5(a).
"Swingline Note" shall mean the promissory note of the Parent Borrower
in favor of the Swingline Lender evidencing the Swingline Loans provided
pursuant to Section 2.5(d), as such promissory note may be amended, modified,
supplemented, extended, renewed or replaced from time to time.
"Taxes" shall have the meaning set forth in Section 2.20.
"Term A Loan" shall have the meaning set forth in Section 2.3(a).
"Term A Loan Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make its portion of the Term A Loan in a principal
amount equal to such Lender's Term Loan Commitment Percentage of the Term A
Loan Committed Amount (and for purposes of making determinations of Required
Lenders hereunder after the Closing Date, the principal amount outstanding on
the Term A Loan).
"Term A Loan Committed Amount" shall have the meaning set forth in
Section 2.3(a).
"Term A Note" or "Term A Notes" shall mean the promissory notes of the
Parent Borrower in favor of each of the Lenders evidencing the portion of the
Term A Loan provided
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<PAGE> 31
pursuant to Section 2.3(d), individually or collectively, as appropriate, as
such promissory notes may be amended, modified, restated, supplemented,
extended, renewed or replaced from time to time.
"Term Loan Commitment" shall mean, collectively, the Term A Loan
Commitment and the SFG Term Loan Commitment.
"Term Loan Commitment Percentage" shall mean, for any Lender, the
percentage identified as its Term Loan Commitment Percentage on Schedule
2.1(a), as such percentage may be modified in connection with any assignment
made in accordance with the provisions of Section 9.6.
"Term Loan Committed Amount" shall mean, collectively, the Term A Loan
Committed Amount and the SFG Term Loan Committed Amount.
"Term Loans" shall mean the Term A Loan and the SFG Term Loan.
"Term Notes" shall mean, collectively, the Term A Notes and the SFG
Term Notes.
"Tranche" shall mean the collective reference to LIBOR Rate Loans
whose Interest Periods begin and end on the same day. A Tranche may sometimes
be referred to as a "LIBOR Tranche".
"Transfer Effective Date" shall have the meaning set forth in each
Commitment Transfer Supplement.
"Transferred Assets" shall have the meaning set forth in the
definition of Permitted Receivables Financing.
"2.20 Certificate" shall have the meaning set forth in Section 2.20.
"Type" shall mean, as to any Loan, its nature as an Alternate Base
Rate Loan, LIBOR Rate Loan or Swingline Loan, as the case may be.
"Unrestricted Subsidiaries" shall mean any Subsidiary (other than the
Subsidiary Borrower) of the Parent Borrower designated as such in writing to
the Administrative Agent.
"Voting Stock" means, with respect to any Person, Capital Stock issued
by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.
"Year 2000 Compliant" shall have the meaning set forth in Section 3.25.
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<PAGE> 32
SECTION 1.2 OTHER DEFINITIONAL PROVISIONS.
(a) Unless otherwise specified therein, all terms defined in
this Agreement shall have the defined meanings when used in the Notes
or other Credit Documents or any certificate or other document made or
delivered pursuant hereto.
(b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement, and Section, subsection, Schedule and Exhibit references
are to this Agreement unless otherwise specified.
(c) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such
terms.
SECTION 1.3 ACCOUNTING TERMS.
Unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder shall be made,
and all financial statements required to be delivered hereunder shall be
prepared in accordance with GAAP applied on a basis consistent with the most
recent audited consolidated financial statements of the Parent Borrower
delivered to the Lenders; provided that, if the Parent Borrower notifies the
Administrative Agent that it wishes to amend any covenant in Section 5.9 to
eliminate the effect of any change in GAAP on the operation of such covenant
(or if the Administrative Agent notifies the Parent Borrower that the Required
Lenders wish to amend Section 5.9 for such purpose), then the Credit Parties'
compliance with such covenant shall be determined on the basis of GAAP in
effect immediately before the relevant change in GAAP became effective, until
either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Parent Borrower and the Required Lenders.
The Parent Borrower shall deliver to the Administrative Agent and each
Lender at the same time as the delivery of any annual or quarterly financial
statements given in accordance with the provisions of Section 5.1, (i) a
description in reasonable detail of any material change in the application of
accounting principles employed in the preparation of such financial statements
from those applied in the most recently preceding quarterly or annual financial
statements as to which no objection shall have been made in accordance with the
provisions above and (ii) a reasonable estimate of the effect on the financial
statements on account of such changes in application.
27
<PAGE> 33
ARTICLE II
THE LOANS; AMOUNT AND TERMS
SECTION 2.1 REVOLVING LOANS.
(a) Revolving Commitment. During the Commitment Period,
subject to the terms and conditions hereof, each Lender severally
agrees to make revolving credit loans ("Revolving Loans") to the
Parent Borrower from time to time for the purposes hereinafter set
forth; provided, however, that (i) with regard to each Lender
individually, the sum of such Lender's outstanding Revolving Loans and
SFG Revolving Loans plus such Lender's Revolving Commitment Percentage
of Swingline Loans plus such Lender's LOC Commitment Percentage of LOC
Obligations shall not exceed such Lender's Revolving Commitment
Percentage of the Revolving Committed Amount and (ii) with regard to
the Lenders collectively, the sum of the aggregate amount of
outstanding Revolving Loans plus SFG Revolving Loans plus Swingline
Loans plus LOC Obligations shall not exceed the Revolving Committed
Amount. For purposes hereof, the aggregate amount available under this
Section 2.1(a) shall be EIGHT HUNDRED FIVE MILLION DOLLARS
($805,000,000) (as such aggregate maximum amount may be increased or
reduced from time to time as provided in Section 2.8, the "Revolving
Committed Amount"). Revolving Loans may consist of Alternate Base Rate
Loans or LIBOR Rate Loans, or a combination thereof, as the Parent
Borrower may request, and may be repaid and reborrowed in accordance
with the provisions hereof. LIBOR Rate Loans shall be made by each
Lender at its LIBOR Lending Office and Alternate Base Rate Loans at
its Domestic Lending Office.
(b) Revolving Loan Borrowings.
(i) Notice of Borrowing. The Parent Borrower shall
request a Revolving Loan borrowing by written notice (or
telephone notice promptly confirmed in writing which
confirmation may be by fax) to the Administrative Agent not
later than 1:30 P.M. (Charlotte, North Carolina time) on the
date of requested borrowing in the case of Alternate Base
Rate Loans, and on the third Business Day prior to the date
of the requested borrowing in the case of LIBOR Rate Loans.
Each such request for borrowing shall be irrevocable and
shall specify (A) that a Revolving Loan is requested, (B) the
date of the requested borrowing (which shall be a Business
Day), (C) the aggregate principal amount to be borrowed, (D)
whether the borrowing shall be comprised of Alternate Base
Rate Loans, LIBOR Rate Loans or a combination thereof, and if
LIBOR Rate Loans are requested, the Interest Period(s)
therefor. A form of Notice of Borrowing (a "Notice of
Borrowing") is attached as Schedule 2.1(b)(i). If the Parent
Borrower shall fail to specify in any such Notice of
Borrowing (I) an applicable Interest Period in the case of a
LIBOR Rate Loan, then such notice shall be deemed to be a
request for an Interest Period of one month, or (II) the type
of Revolving Loan requested, then such notice shall be deemed
to be a request for an Alternate Base Rate Loan hereunder.
The Administrative Agent
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<PAGE> 34
shall give notice to each Lender promptly upon receipt of
each Notice of Borrowing, the contents thereof and each such
Lender's share thereof. All Revolving Loans made on the
Closing Date shall bear interest at the Alternate Base Rate
until three (3) Business Days after the Closing Date.
(ii) Advances. Each Lender will make its Revolving
Commitment Percentage of each Revolving Loan borrowing
available to the Administrative Agent for the account of the
Parent Borrower at the office of the Administrative Agent
specified in Schedule 9.2, or at such other office as the
Administrative Agent may designate in writing, by 4:00 P.M.
(Charlotte, North Carolina time) on the date specified in the
applicable Notice of Borrowing in Dollars and in funds
immediately available to the Administrative Agent. Such
borrowing will then be made available to the Parent Borrower
by the Administrative Agent by crediting the account of the
Parent Borrower on the books of such office with the
aggregate of the amounts made available to the Administrative
Agent by the Lenders and in like funds as received by the
Administrative Agent.
(c) Repayment. The principal amount of all Revolving Loans
shall be due and payable in full on the Maturity Date.
(d) Revolving Notes. Each Lender's Revolving Commitment
Percentage of the Revolving Loans shall be evidenced by a duly
executed promissory note of the Borrower to such Lender in
substantially the form of Schedule 2.1(d).
SECTION 2.2 SFG REVOLVING LOANS SUBFACILITY.
(a) SFG Revolving Commitment. During the Commitment Period,
subject to the terms and conditions hereof, each Lender severally
agrees to make revolving credit loans ("SFG Revolving Loans") to the
Borrowers from time to time for the purposes hereinafter set forth;
provided, however, that (i) the aggregate amount of SFG Revolving
Loans outstanding at any time shall not exceed SIXTY MILLION DOLLARS
($60,000,000), (ii) with regard to each Lender individually, the sum
of such Lender's outstanding SFG Revolving Loans and Revolving Loans
plus such Lender's Revolving Commitment Percentage of Swingline Loans
plus such Lender's LOC Commitment Percentage of LOC Obligations shall
not exceed such Lender's Revolving Commitment Percentage of the
Revolving Committed Amount, and (iii) with regard to the Lenders
collectively, the sum of the aggregate amount of outstanding SFG
Revolving Loans plus Revolving Loans plus Swingline Loans plus LOC
Obligations shall not exceed the Revolving Committed Amount. SFG
Revolving Loans may consist of Alternate Base Rate Loans or LIBOR Rate
Loans, or a combination thereof, as a Borrower may request, and may be
repaid and reborrowed in accordance with the provisions hereof. LIBOR
Rate Loans shall be made by each Lender at its LIBOR Lending Office
and Alternate Base Rate Loans at its Domestic Lending Office.
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<PAGE> 35
(b) SFG Revolving Loan Borrowings.
(i) Notice of Borrowing. A Borrower shall request a
SFG Revolving Loan borrowing by providing a Notice of
Borrowing (or telephone notice promptly confirmed in writing
by providing a Notice of Borrowing, which confirmation may be
by fax) to the Administrative Agent not later than 1:30 P.M.
(Charlotte, North Carolina time) on the date of requested
borrowing in the case of Alternate Base Rate Loans, and on
the third Business Day prior to the date of the requested
borrowing in the case of LIBOR Rate Loans. Each such Notice
of Borrowing shall be irrevocable and shall specify (A) that
a SFG Revolving Loan is requested, (B) the date of the
requested borrowing (which shall be a Business Day), (C) the
aggregate principal amount to be borrowed, (D) whether the
borrowing shall be comprised of Alternate Base Rate Loans,
LIBOR Rate Loans or a combination thereof, and if LIBOR Rate
Loans are requested, the Interest Period(s) therefor. If the
Borrower requesting the SFG Revolving Loan borrowing shall
fail to specify in any such Notice of Borrowing (I) an
applicable Interest Period in the case of a LIBOR Rate Loan,
then such notice shall be deemed to be a request for an
Interest Period of one month, or (II) the type of SFG
Revolving Loan requested, then such notice shall be deemed to
be a request for an Alternate Base Rate Loan hereunder. The
Administrative Agent shall give notice to each Lender
promptly upon receipt of each Notice of Borrowing, the
contents thereof and each such Lender's share thereof. All
SFG Revolving Loans made on the Closing Date shall bear
interest at the Alternate Base Rate until three (3) Business
Days after the Closing Date.
(ii) Advances. Each Lender will make its Revolving
Commitment Percentage of each SFG Revolving Loan borrowing
available to the Administrative Agent for the account of the
Borrower requesting such borrowing at the office of the
Administrative Agent specified in Schedule 9.2, or at such
other office as the Administrative Agent may designate in
writing, by 4:00 P.M. (Charlotte, North Carolina time) on the
date specified in the applicable Notice of Borrowing in
Dollars and in funds immediately available to the
Administrative Agent. Such borrowing will then be made
available to the Borrower requesting the borrowing by the
Administrative Agent by crediting the account of such
Borrower on the books of such office with the aggregate of
the amounts made available to the Administrative Agent by the
Lenders and in like funds as received by the Administrative
Agent.
(c) Repayment. The principal amount of all SFG Revolving
Loans shall be due and payable in full on the Maturity Date.
(d) SFG Revolving Notes. Each Lender's Revolving Commitment
Percentage of the SFG Revolving Loans shall be evidenced by a duly
executed promissory note of the Borrower to such Lender in
substantially the form of Schedule 2.2(d).
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<PAGE> 36
SECTION 2.3 TERM A LOAN.
(a) Term A Loan. Subject to the terms and conditions hereof
and in reliance upon the representations and warranties set forth
herein, each Lender severally agrees to make available to the Parent
Borrower on the Closing Date such Lender's Term Loan Commitment
Percentage of a term loan in Dollars (the "Term A Loan") in the
aggregate principal amount of SIX HUNDRED TWENTY-FIVE MILLION DOLLARS
($625,000,000) (the "Term A Loan Committed Amount") for the purposes
hereinafter set forth. The Term A Loan may consist of Alternate Base
Rate Loans or LIBOR Rate Loans, or a combination thereof, as the
Parent Borrower may request; provided that the Term A Loans made on
the Closing Date shall bear interest at the Alternate Base Rate until
three (3) Business Days after the Closing Date. Amounts repaid on the
Term A Loan may not be reborrowed. LIBOR Rate Loans shall be made by
each Lender at its LIBOR Lending Office and Alternate Base Rate Loans
at its Domestic Lending Office.
(b) Repayment of Term A Loan. The principal amount of the
Term A Loan shall be repaid in twenty (20) consecutive fiscal
quarterly installments as follows, unless accelerated sooner pursuant
to Section 7.2:
<TABLE>
<CAPTION>
TERM A LOAN
PRINCIPAL PRINCIPAL
AMORTIZATION AMORTIZATION
PAYMENT DATES PAYMENT
------------- ------------
<S> <C>
March 31, 2000 $0
June 30, 2000 $0
September 30, 2000 $0
December 31, 2000 $0
March 31, 2001 $25,000,000
June 30, 2001 $25,000,000
September 30, 2001 $25,000,000
December 31, 2001 $25,000,000
March 31, 2002 $31,250,000
June 30, 2002 $31,250,000
September 30, 2002 $31,250,000
December 31, 2002 $31,250,000
March 31, 2003 $37,500,000
June 30, 2003 $37,500,000
</TABLE>
31
<PAGE> 37
<TABLE>
<S> <C>
September 30, 2003 $37,500,000
December 31, 2003 $37,500,000
March 31, 2004 25% of outstanding Term A
Loan as of such date (up to
$50,000,000)
June 30, 2004 25% of outstanding Term A
Loan as of such date (up to
$50,000,000)
September 30, 2004 25% of outstanding Term A
Loan as of such date (up to
$50,000,000)
Maturity Date Remaining amount of
outstanding Term A Loan
</TABLE>
(c) Term A Notes. Each Lender's Term Loan Commitment
Percentage of the Term A Loan outstanding as of the Closing Date shall
be evidenced by a duly executed promissory note of the Parent Borrower
to such Lender in substantially the form of Schedule 2.3(c).
SECTION 2.4 SFG TERM LOAN.
(a) SFG Term Loan. Subject to the terms and conditions hereof
and in reliance upon the representations and warranties set forth
herein, each Lender severally agrees to make available to the
Borrowers on the Closing Date such Lender's Term Loan Commitment
Percentage of a term loan in Dollars (the "SFG Term Loan") in the
aggregate principal amount of ONE HUNDRED EIGHTY MILLION DOLLARS
($180,000,000) (the "SFG Term Loan Committed Amount") for the purposes
hereinafter set forth. The SFG Term Loan may consist of Alternate Base
Rate Loans or LIBOR Rate Loans, or a combination thereof, as the
Subsidiary Borrower may request; provided that the SFG Term Loans made
on the Closing Date shall bear interest at the Alternate Base Rate
until three (3) Business Days after the Closing Date. Amounts repaid
on the SFG Term Loan may not be reborrowed. LIBOR Rate Loans shall be
made by each Lender at its LIBOR Lending Office and Alternate Base
Rate Loans at its Domestic Lending Office.
(b) Repayment of SFG Term Loan. The principal amount of the
SFG Term Loan shall be repaid in full on or before the Maturity Date.
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<PAGE> 38
(c) SFG Term Notes. Each Lender's Term Loan Commitment
Percentage of the SFG Term Loan outstanding as of the Closing Date
shall be evidenced by a duly executed promissory note of the Borrowers
to such Lender in substantially the form of Schedule 2.4(c).
SECTION 2.5 SWINGLINE LOAN SUBFACILITY.
(a) Swingline Commitment. During the Commitment Period,
subject to the terms and conditions hereof, the Swingline Lender, in
its individual capacity, agrees to make certain revolving credit loans
to the Parent Borrower (each a "Swingline Loan" and, collectively, the
"Swingline Loans") for the purposes hereinafter set forth; provided,
however, (i) the aggregate amount of Swingline Loans outstanding at
any time shall not exceed TWENTY-FIVE MILLION DOLLARS ($25,000,000)
(the "Swingline Committed Amount"), and (ii) the sum of the aggregate
amount of outstanding Revolving Loans plus SFG Revolving Loans plus
Swingline Loans plus LOC Obligations shall not exceed the Revolving
Committed Amount. Swingline Loans hereunder may be repaid and
reborrowed in accordance with the provisions hereof.
(b) Swingline Loan Borrowings.
(i) Notice of Borrowing and Disbursement. The
Swingline Lender will make Swingline Loans available to the
Parent Borrower on any Business Day upon request made by the
Parent Borrower not later than 3:00 P.M. (Charlotte, North
Carolina time) on such Business Day. A request for a
Swingline Loan borrowing shall be made in the form of a
Notice of Borrowing with appropriate modifications. Swingline
Loan borrowings hereunder shall be made in minimum amounts of
$100,000 and integral multiples of $100,000 in excess
thereof.
(ii) Repayment of Swingline Loans. Each Swingline
Loan borrowing shall be due and payable on the Maturity Date.
The Swingline Lender may, at any time, in its sole
discretion, by written notice to the Parent Borrower and the
Administrative Agent, demand repayment of its Swingline Loans
by way of a Revolving Loan borrowing, in which case the
Parent Borrower shall be deemed to have requested a Revolving
Loan borrowing comprised entirely of Alternate Base Rate
Loans in the amount of such Swingline Loans; provided,
however, that, in the following circumstances, any such
demand shall also be deemed to have been given one Business
Day prior to each of (i) the Maturity Date, (ii) the
occurrence of any Event of Default described in Section
7.1(e), (iii) upon acceleration of the Credit Party
Obligations hereunder, whether on account of an Event of
Default described in Section 7.1(e) or any other Event of
Default, and (iv) the exercise of remedies in accordance with
the provisions of Section 7.2 hereof (each such Revolving
Loan borrowing made on account of any such deemed request
therefor as provided herein being hereinafter referred to as
a "Mandatory Borrowing"). Each Lender hereby irrevocably
agrees to make such Revolving Loans promptly upon any such
request or deemed request on account of each Mandatory
Borrowing in the amount and in the manner specified in the
preceding sentence
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and on the same such date notwithstanding (I) the amount of
Mandatory Borrowing may not comply with the minimum amount
for borrowings of Revolving Loans otherwise required
hereunder, (II) whether any conditions specified in Section
4.2 are then satisfied, (III) whether a Default or an Event
of Default then exists, (IV) failure of any such request or
deemed request for Revolving Loans to be made by the time
otherwise required in Section 2.1(b)(i), (V) the date of such
Mandatory Borrowing, or (VI) any reduction in the Revolving
Committed Amount or termination of the Revolving Commitments
immediately prior to such Mandatory Borrowing or
contemporaneously therewith. In the event that any Mandatory
Borrowing cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of
the commencement of a proceeding under the Bankruptcy Code
with respect to the Parent Borrower), then each Lender hereby
agrees that it shall forthwith purchase (as of the date the
Mandatory Borrowing would otherwise have occurred, but
adjusted for any payments received from the Parent Borrower
on or after such date and prior to such purchase) from the
Swingline Lender such participations in the outstanding
Swingline Loans as shall be necessary to cause each such
Lender to share in such Swingline Loans ratably based upon
its respective Revolving Commitment Percentage (determined
before giving effect to any termination of the Commitments
pursuant to Section 7.2), provided that (A) all interest
payable on the Swingline Loans shall be for the account of
the Swingline Lender until the date as of which the
respective participation is purchased, and (B) at the time
any purchase of participations pursuant to this sentence is
actually made, the purchasing Lender shall be required to pay
to the Swingline Lender interest on the principal amount of
such participation purchased for each day from and including
the day upon which the Mandatory Borrowing would otherwise
have occurred to but excluding the date of payment for such
participation, at the rate equal to, if paid within two (2)
Business Days of the date of the Mandatory Borrowing, the
Federal Funds Effective Rate, and thereafter at a rate equal
to the Alternate Base Rate.
(c) Interest on Swingline Loans. Subject to the provisions of
Section 2.11(b), Swingline Loans shall bear interest at a per annum
rate equal to the Alternate Base Rate plus the Applicable Percentage
for Revolving Loans that are Alternate Base Rate Loans. Interest on
Swingline Loans shall be payable in arrears on each Interest Payment
Date.
(d) Swingline Note. The Swingline Loans shall be evidenced by
a duly executed promissory note of the Parent Borrower to the
Swingline Lender in the original amount of the Swingline Committed
Amount and substantially in the form of Schedule 2.5(d).
SECTION 2.6 LETTER OF CREDIT SUBFACILITY.
(a) Issuance. Subject to the terms and conditions hereof and
of the LOC Documents, if any, and any other terms and conditions which
the Issuing Lender may reasonably require, during the Commitment
Period the Issuing Lender shall issue, and the
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Lenders shall participate in, Letters of Credit for the account of the
Parent Borrower from time to time upon request in a form acceptable to
the Issuing Lender; provided, however, that (i) the aggregate amount
of LOC Obligations shall not at any time exceed ONE HUNDRED FIFTY
MILLION DOLLARS ($150,000,000) (the "LOC Committed Amount"), (ii) the
sum of the aggregate amount of Revolving Loans plus SFG Revolving
Loans plus Swingline Loans plus LOC Obligations shall not at any time
exceed the Revolving Committed Amount, (iii) all Letters of Credit
shall be denominated in Dollars and (iv) Letters of Credit shall be
issued for lawful corporate purposes and may be issued as standby
letters of credit, including in connection with workers' compensation
and other insurance programs, and trade letters of credit. Except as
otherwise expressly agreed upon by the Issuing Lender and the
Administrative Agent, no Letter of Credit shall have an original
expiry date more than twelve (12) months from the date of issuance;
provided, however, so long as no Default or Event of Default has
occurred and is continuing and subject to the other terms and
conditions to the issuance of Letters of Credit hereunder, the expiry
dates of Letters of Credit may be extended annually or periodically
from time to time on the request of the Parent Borrower or by
operation of the terms of the applicable Letter of Credit to a date
not more than twelve (12) months from the date of extension; provided,
further, that no Letter of Credit, as originally issued or as
extended, shall have an expiry date extending beyond the Maturity
Date. Each Letter of Credit shall comply with the related LOC
Documents. The issuance and expiry date of each Letter of Credit shall
be a Business Day. First Union shall be the Issuing Lender on all
Letters of Credit issued on or after the Closing Date. All currently
outstanding letters of credit issued by First Union for the account of
the Parent Borrower, its Subsidiaries, or any predecessor-in-interest
of any of them, shall, as of the Closing Date, be considered Letters
of Credit issued and subject to the terms of this Credit Agreement.
(b) Notice and Reports. The request for the issuance of a
Letter of Credit shall be submitted to the Issuing Lender at least
three (3) Business Days prior to the requested date of issuance. The
Issuing Lender will promptly upon request provide to the
Administrative Agent for dissemination to the Lenders a detailed
report specifying the Letters of Credit which are then issued and
outstanding and any activity with respect thereto which may have
occurred since the date of any prior report, and including therein,
among other things, the account party, the beneficiary, the face
amount, expiry date as well as any payments or expirations which may
have occurred. The Issuing Lender will further provide to the
Administrative Agent promptly upon request copies of the Letters of
Credit. The Issuing Lender will provide to the Administrative Agent
promptly upon request a summary report of the nature and extent of LOC
Obligations then outstanding.
(c) Participations. Each Lender upon issuance of a Letter of
Credit (other than a Letter of Credit in an original face amount of
less than $1,000,000) shall be deemed to have purchased without
recourse a risk participation from the Issuing Lender in such Letter
of Credit and the obligations arising thereunder and any collateral
relating thereto, in each case in an amount equal to its LOC
Commitment Percentage of the obligations under such Letter of Credit
and shall absolutely, unconditionally and irrevocably assume, as
primary obligor and not as surety, and be obligated to pay to the
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Issuing Lender therefor and discharge when due, its LOC Commitment
Percentage of the obligations arising under such Letter of Credit,
unless the Issuing Lender acted with gross negligence or willful
misconduct in issuing such Letter of Credit. Without limiting the
scope and nature of each Lender's participation in any Letter of
Credit, to the extent that the Issuing Lender has not been reimbursed
as required hereunder or under any LOC Document, each such Lender
shall pay to the Issuing Lender its LOC Commitment Percentage of such
unreimbursed drawing in same day funds on the day of notification by
the Issuing Lender of an unreimbursed drawing pursuant to the
provisions of subsection (d) below if such notice is received at or
before 2:00 P.M. (Charlotte, North Carolina time), otherwise such
payment shall be made at or before 12:00 Noon (Charlotte, North
Carolina time) on the Business Day next succeeding the day such notice
is received. The obligation of each Lender to so reimburse the Issuing
Lender shall be absolute and unconditional and shall not be affected
by the occurrence of a Default, an Event of Default or any other
occurrence or event. Any such reimbursement shall not relieve or
otherwise impair the obligation of the Parent Borrower to reimburse
the Issuing Lender under any Letter of Credit, together with interest
as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any
Letter of Credit, the Issuing Lender will promptly notify the Parent
Borrower and the Administrative Agent. The Parent Borrower shall
reimburse the Issuing Lender on the day of drawing under any Letter of
Credit (either with the proceeds of a Swingline Loan or Revolving Loan
obtained hereunder or otherwise) in same day funds as provided herein
or in the LOC Documents. If the Parent Borrower shall fail to
reimburse the Issuing Lender as provided herein, the unreimbursed
amount of such drawing shall bear interest at a per annum rate equal
to the Alternate Base Rate plus the Applicable Percentage. Unless the
Parent Borrower shall immediately notify the Issuing Lender and the
Administrative Agent of its intent to otherwise reimburse the Issuing
Lender, the Parent Borrower shall be deemed to have requested a
Swingline Loan, or if and to the extent Swingline Loans shall not be
available, a Revolving Loan in the amount of the drawing as provided
in subsection (e) below, the proceeds of which will be used to satisfy
the reimbursement obligations. The Parent Borrower's reimbursement
obligations hereunder shall be absolute and unconditional under all
circumstances irrespective of any rights of set-off, counterclaim or
defense to payment the Parent Borrower may claim or have against the
Issuing Lender, the Administrative Agent, the Lenders, the beneficiary
of the Letter of Credit drawn upon or any other Person, including
without limitation any defense based on any failure of the Parent
Borrower to receive consideration or the legality, validity,
regularity or unenforceability of the Letter of Credit. The Issuing
Lender will promptly notify the other Lenders of the amount of any
unreimbursed drawing and each Lender shall promptly pay to the
Administrative Agent for the account of the Issuing Lender in Dollars
and in immediately available funds, the amount of such Lender's LOC
Commitment Percentage of such unreimbursed drawing, unless the Issuing
Lender acted with gross negligence or willful misconduct in issuing
such Letter of Credit. Such payment shall be made on the day such
notice is received by such Lender from the Issuing Lender if such
notice is received at or before 2:00 P.M. (Charlotte, North Carolina
time), otherwise such payment shall be made at or before 12:00 Noon
(Charlotte, North Carolina time) on the Business Day next succeeding
the day such notice
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is received. If such Lender does not pay such amount to the Issuing
Lender in full upon such request, such Lender shall, on demand, pay to
the Administrative Agent for the account of the Issuing Lender
interest on the unpaid amount during the period from the date of such
drawing until such Lender pays such amount to the Issuing Lender in
full at a rate per annum equal to, if paid within two (2) Business
Days of the date of drawing, the Federal Funds Effective Rate and
thereafter at a rate equal to the Alternate Base Rate. Each Lender's
obligation to make such payment to the Issuing Lender, and the right
of the Issuing Lender to receive the same, shall be absolute and
unconditional, shall not be affected by any circumstance whatsoever
and without regard to the termination of this Agreement or the
Commitments hereunder, the existence of a Default or Event of Default
or the acceleration of the Credit Party Obligations hereunder and
shall be made without any offset, abatement, withholding or reduction
whatsoever.
(e) Repayment with Revolving Loans. On any day on which the
Borrower shall have requested, or been deemed to have requested, (i) a
Swingline Loan borrowing to reimburse a drawing under a Letter of
Credit, the Swingline Lender shall make the Swingline Loan advance
pursuant to the terms of the request or deemed request in accordance
with the provisions for Swingline Loan advances hereunder, or (ii) a
Revolving Loan to reimburse a drawing under a Letter of Credit, the
Administrative Agent shall give notice to the Lenders that a Revolving
Loan has been requested or deemed requested in connection with a
drawing under a Letter of Credit, in which case a Revolving Loan
borrowing comprised entirely of Alternate Base Rate Loans (each such
borrowing, a "Mandatory Borrowing") shall be immediately made (without
giving effect to any termination of the Commitments pursuant to
Section 7.2) pro rata based on each Lender's respective Revolving
Commitment Percentage (determined before giving effect to any
termination of the Commitments pursuant to Section 7.2) and in the
case of both clauses (i) and (ii) the proceeds thereof shall be paid
directly to the Issuing Lender for application to the respective LOC
Obligations. Each Lender hereby irrevocably agrees to make such
Revolving Loans immediately upon any such request or deemed request on
account of each Mandatory Borrowing in the amount and in the manner
specified in the preceding sentence and on the same such date
notwithstanding (i) the amount of Mandatory Borrowing may not comply
with the minimum amount for borrowings of Revolving Loans otherwise
required hereunder, (ii) whether any conditions specified in Section
4.2 are then satisfied, (iii) whether a Default or an Event of Default
then exists, (iv) failure for any such request or deemed request for
Revolving Loan to be made by the time otherwise required in Section
2.1(b), (v) the date of such Mandatory Borrowing, or (vi) any
reduction in the Revolving Committed Amount after any such Letter of
Credit may have been drawn upon. In the event that any Mandatory
Borrowing cannot for any reason be made on the date otherwise required
above (including, without limitation, as a result of the commencement
of a proceeding under the Bankruptcy Code with respect to the Parent
Borrower), then each such Lender hereby agrees that it shall forthwith
fund (as of the date the Mandatory Borrowing would otherwise have
occurred, but adjusted for any payments received from the Parent
Borrower on or after such date and prior to such purchase) its
Participation Interests in the outstanding LOC Obligations; provided,
further, that in the event any Lender shall fail to fund its
Participation Interest on the day the Mandatory Borrowing would
otherwise have occurred, then the amount of such
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Lender's unfunded Participation Interest therein shall bear interest
payable to the Issuing Lender upon demand, at the rate equal to, if
paid within two (2) Business Days of such date, the Federal Funds
Effective Rate, and thereafter at a rate equal to the Alternate Base
Rate.
(f) Designation of Subsidiaries as Account Parties.
Notwithstanding anything to the contrary set forth in this Agreement,
including without limitation Section 2.6(a), a Letter of Credit issued
hereunder may contain a statement to the effect that such Letter of
Credit is issued for the account of a Subsidiary of the Parent
Borrower, provided that notwithstanding such statement, the Parent
Borrower shall be the actual account party for all purposes of this
Agreement for such Letter of Credit and such statement shall not
affect the Parent Borrower's reimbursement obligations hereunder with
respect to such Letter of Credit.
(g) Modification, Extension. The issuance of any supplement,
modification, amendment, renewal, or extension to any Letter of Credit
shall, for purposes hereof, be treated in all respects the same as the
issuance of a new Letter of Credit hereunder.
(h) Uniform Customs and Practices/International Standby
Practices 1998. The Issuing Lender shall have the Letters of Credit be
subject to The Uniform Customs and Practice for Documentary Credits
(the "UCP") or the International Standby Practices 1998 (the "ISP98"),
in either case as published as of the date of issue by the
International Chamber of Commerce, in which case the UCP or ISP98, as
applicable, may be incorporated therein and deemed in all respects to
be a part thereof.
SECTION 2.7 FEES.
(a) Commitment Fee. In consideration of the Revolving
Commitment, the Borrowers jointly and severally agree to pay to the
Administrative Agent for the ratable benefit of the Lenders a
commitment fee (the "Commitment Fee") in an amount equal to the
Applicable Percentage per annum on the average daily unused amount of
the Revolving Committed Amount. For purposes of computing the
Commitment Fee hereunder, (i) Swingline Loans and LOC Obligations
shall be considered usage under the aggregate Revolving Committed
Amount and (ii) each Swingline Loan shall be considered usage under
the Revolving Commitment of the Swingline Lender only unless and until
the other Lenders purchase participation interests in such Swingline
Loan pursuant to Section 2.5(b)(ii). The Commitment Fee shall be
payable quarterly in arrears on the 15th day following the last day of
each calendar quarter for the prior calendar quarter and upon
termination of the Revolving Commitments.
(b) Letter of Credit Fees. In consideration of the LOC
Commitments, the Parent Borrower agrees to pay to the Issuing Lender a
fee (the "Letter of Credit Fee") equal to the Applicable Percentage
per annum on the average daily maximum amount available to be drawn
under each Letter of Credit from the date of issuance (or in the case
of Letters of Credit outstanding on the Closing Date, from the Closing
Date) to the date of expiration. In addition to such Letter of Credit
Fee, the Issuing Lender may charge,
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and retain for its own account without sharing by the other Lenders,
an additional facing fee of one-eighth of one percent (1/8%) per annum
on the average daily maximum amount available to be drawn under each
such Letter of Credit issued by it. The Issuing Lender shall promptly
pay over to the Administrative Agent for the ratable benefit of the
Lenders (including the Issuing Lender) the Letter of Credit Fee. The
Letter of Credit Fee shall be payable quarterly in arrears on the 15th
day following the last day of each calendar quarter for the prior
calendar quarter.
(c) Issuing Lender Fees. In addition to the Letter of Credit
Fees payable pursuant to subsection (b) above, the Parent Borrower
shall pay to the Issuing Lender for its own account without sharing by
the other Lenders the reasonable and customary charges from time to
time of the Issuing Lender with respect to the amendment, transfer,
administration, cancellation and conversion of, and drawings under,
such Letters of Credit (collectively, the "Issuing Lender Fees").
(d) Administrative Fee. The Borrower agrees to pay to the
Agents the annual administrative fee as described in the Fee Letter.
SECTION 2.8 REDUCTION OR INCREASE OF THE REVOLVING COMMITMENTS.
(a) Voluntary Reductions. The Borrowers shall have the right
to terminate or permanently reduce the unused portion of the Revolving
Committed Amount at any time or from time to time upon not less than
three Business Days' prior notice to the Administrative Agent (which
shall notify the Lenders thereof as soon as practicable) of each such
termination or reduction, which notice shall specify the effective
date thereof and the amount of any such reduction which shall be in a
minimum amount of $2,000,000 or a whole multiple of $1,000,000 in
excess thereof and shall be irrevocable and effective upon receipt by
the Administrative Agent, provided that no such reduction or
termination shall be permitted if after giving effect thereto, and to
any prepayments of the Loans made on the effective date thereof, the
sum of the then outstanding aggregate principal amount of the
Revolving Loans plus SFG Revolving Loans plus Swingline Loans plus LOC
Obligations would exceed the Revolving Committed Amount after such
proposed reduction.
(b) Mandatory Reductions. On any date that the Revolving
Loans and SFG Revolving Loans are required to be prepaid pursuant to
the terms of Section 2.9(b)(iv)(B)(3), the Revolving Committed Amount
shall be automatically permanently reduced by the amount of Revolving
Loans and SFG Revolving Loans prepaid, respectively.
(c) Maturity Date. The Revolving Commitments, the LOC
Commitments and the Swingline Commitment shall automatically terminate
on the Maturity Date.
(d) Increase of Revolving Committed Amount. The Parent
Borrower shall have the right from time to time to increase the
Revolving Committed Amount up to a total amount of $945,000,000 by
adding to this Agreement one or more other lenders
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(which may include any Lender (with the consent of such Lender)) (each
such lender an "Additional Lender") with the approval of the
Administrative Agent (not to be unreasonably withheld) and with notice
to each Lender, each of which Additional Lenders shall have entered
into an agreement in form and substance satisfactory to the Parent
Borrower and the Administrative Agent pursuant to which such
Additional Lender shall undertake a Revolving Commitment (and if any
such Additional Lender is a Lender, its Revolving Commitment shall be
in addition to such Lender's Revolving Commitment hereunder) in an
amount at least equal to $10,000,000 or a larger integral multiple of
$1,000,000, and upon the effectiveness of such agreement (the date of
the effectiveness of any such agreement being hereinafter referred to
as the "Increased Commitment Date") such Additional Lender shall
thereupon become a "Lender" for all purposes of this Agreement;
provided, however, any increase in the Revolving Committed Amount
pursuant to this Section 2.8(d) shall not increase the aggregate
amount of SFG Revolving Loans available pursuant to Section 2.2(a). On
the Increased Commitment Date, each Additional Lender shall by
assignments from the other Lenders (which assignments shall be deemed
to occur hereunder automatically, and without any requirement for
additional documentation, on the Increased Commitment Date) acquire a
portion of the Revolving Loans, SFG Revolving Loans and Participation
Interests of the other Lenders (and the Lenders shall, through the
Administrative Agent, make such other adjustments among themselves as
shall be necessary) so that after giving effect to such assignments
and adjustments the Lenders shall hold Revolving Loans, SFG Revolving
Loans and Participation Interests hereunder ratably in accordance with
their respective Revolving Commitments and LOC Commitments. The Parent
Borrower shall compensate each Lender whose outstanding Revolving
Loans have decreased as a result of the foregoing assignments and
adjustments as if such decrease were a payment or prepayment referred
to in Section 2.17 hereof.
Notwithstanding the foregoing, the increase in the aggregate
Revolving Commitments hereunder pursuant to this Section 2.8 shall be
effective only if:
(i) the Parent Borrower shall have given the
Administrative Agent notice of any such increase at least
five Business Days prior to any such Increased Commitment
Date;
(ii) no Default or Event of Default shall have
occurred and be continuing as of the date of the notice
referred to in the foregoing clause (i) or on the Increased
Commitment Date; and
(iii) the resulting aggregate amount of the
Revolving Commitments is no greater than $945,000,000.
SECTION 2.9 PREPAYMENTS.
(a) Optional Prepayments. The Borrowers shall have the right
to prepay Loans in whole or in part from time to time; provided,
however, that (i) each partial prepayment of Alternate Base Rate Loans
shall be in a minimum principal amount of
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$1,000,000 and integral multiples of $500,000 in excess thereof, (ii)
each partial prepayment of LIBOR Rate Loans shall be in a minimum
principal amount of $5,000,000 and integral multiples of $1,000,000 in
excess thereof and (iii) each prepayment of Swingline Loans shall be
in a minimum principal amount of $100,000 and integral multiples of
$100,000 in excess thereof. The Borrower making the voluntary
prepayment shall give irrevocable written notice (or telephone notice
promptly confirmed in writing which confirmation may be by fax) to the
Administrative Agent (which shall notify the Lenders thereof as soon
as practicable) not later than 1:30 P.M. (Charlotte, North Carolina
time) on the date of the requested prepayment in the case of Alternate
Base Rate Loans, and on the third Business Day prior to the date of
the requested prepayment in the case of LIBOR Rate Loans. Subject to
the foregoing terms, amounts prepaid under this Section 2.9(a) shall
be applied as the Borrower may elect; provided, however, if the
Borrower shall fail to elect an order of prepayment, such amounts
shall be applied (A) first to prepay Revolving Loans and/or SFG
Revolving Loans outstanding at such time until paid in full without a
corresponding reduction in the Revolving Commitment, (B) second pro
rata to the Term A Loans (ratably to the remaining principal
installments thereof) and (C) third pro rata to the SFG Term Loans
(ratably to the remaining principal installments thereof). Within the
parameters of the applications set forth above, prepayments shall be
applied first to Alternate Base Rate Loans and then to LIBOR Rate
Loans in direct order of Interest Period maturities. All prepayments
under this Section 2.9(a) shall be subject to Section 2.19, but
otherwise without premium or penalty. Interest on the principal amount
prepaid shall be payable on the next occurring Interest Payment Date
that would have occurred had such loan not been prepaid. Amounts
prepaid on the Swingline Loans, the Revolving Loans and the SFG
Revolving Loans may be reborrowed in accordance with the terms hereof.
Amounts prepaid on the Term Loans may not be reborrowed.
(b) Mandatory Prepayments.
(i) Revolving Committed Amount. If at any time after
the Closing Date, the sum of the aggregate principal amount
of outstanding Revolving Loans plus SFG Revolving Loans plus
Swingline Loans plus LOC Obligations shall exceed the
Revolving Committed Amount, the Borrower immediately shall
prepay the Revolving Loans and SFG Revolving Loans and (after
all Revolving Loans and SFG Revolving Loans have been repaid)
cash collateralize the LOC Obligations, in an amount
sufficient to eliminate such excess.
(ii) Asset Dispositions. Promptly following any
Asset Disposition which, together with prior Asset
Dispositions as to which no prepayment has been made, results
in Net Cash Proceeds in excess of $20,000,000 in any fiscal
year, the Borrowers shall prepay the Loans in an aggregate
amount equal to one hundred percent (100%) of the Net Cash
Proceeds derived from such Asset Disposition (such prepayment
to be applied as set forth in clause (iv) below).
(iii) Recovery Event. To the extent cash proceeds
received in connection with a Recovery Event are not applied
to repair, replace or relocate
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damaged property or to purchase or otherwise acquire new
assets or property within 270 days following the receipt by a
Credit Party of such cash proceeds, the Borrowers shall
prepay the Loans in an aggregate amount equal to one hundred
percent (100%) of such remaining cash proceeds to the Lenders
(such prepayment to be applied as set forth in clause (iv)
below).
(iv) Application of Mandatory Prepayments. All
amounts required to be paid pursuant to this Section 2.9(b)
shall be applied as follows: (A) with respect to all amounts
prepaid pursuant to Section 2.9(b)(i), to Revolving Loans and
SFG Revolving Loans and (after all Revolving Loans and SFG
Revolving Loans have been repaid) to a cash collateral
account (held by the Administrative Agent for the ratable
benefit of the Lenders) in respect of LOC Obligations and (B)
with respect to all amounts prepaid pursuant to Sections
2.9(b)(ii) and (iii), (1) first pro rata to the Term A Loans
(ratably to the remaining principal installments thereof),
unless the asset was owned by the Subsidiary Borrower, in
which case, pro rata to the SFG Term Loans, (2) second pro
rata to the SFG Term Loans and (3) third pro rata to the
Revolving Loans and SFG Revolving Loans and (after all
Revolving Loans and SFG Revolving Loans have been repaid) to
a cash collateral account in respect of LOC Obligations.
Within the parameters of the applications set forth above,
prepayments shall be applied first to Alternate Base Rate
Loans and then to LIBOR Rate Loans in direct order of
Interest Period maturities. All prepayments under this
Section 2.9(b) shall be subject to Section 2.19 and be
accompanied by interest on the principal amount prepaid to
the date of prepayment. Amounts prepaid on Swingline Loans
and Revolving Loans may be reborrowed in accordance with the
terms hereof. Amounts prepaid on the Term Loans may not be
reborrowed.
SECTION 2.10 MINIMUM BORROWING AMOUNTS AND PRINCIPAL AMOUNTS OF
TRANCHES.
(a) Each Alternate Base Rate Loan (other than Swingline
Loans) borrowing shall be in a minimum amount of $1,000,000 and whole
multiples of $500,000 in excess thereof.
(b) Each LIBOR Rate Loan borrowing shall be in a minimum
amount of $5,000,000 and whole multiples of $1,000,000 in excess
thereof.
(c) All borrowings, payments and prepayments in respect of
Revolving Loans, SFG Revolving Loans and Term Loans shall be in such
amounts and be made pursuant to such elections so that after giving
effect thereto the aggregate principal amount of the Revolving Loans,
SFG Revolving Loans and Term Loans comprising any Tranche shall either
be zero or shall not be less than $5,000,000 or a whole multiple of
$1,000,000 in excess thereof.
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SECTION 2.11 INTEREST; INTEREST PAYMENT DATES.
(a) Subject to the provisions of Section 2.11(b), all Loans
(other than Swingline Loans) shall bear interest as follows:
(i) Alternate Base Rate Loans. During such periods
as Loans shall be comprised of Alternate Base Rate Loans,
each such Alternate Base Rate Loan shall bear interest at a
per annum rate equal to the sum of the Alternate Base Rate
plus the Applicable Percentage; and
(ii) LIBOR Rate Loans. During such periods as Loans
shall be comprised of LIBOR Rate Loans, each such LIBOR Rate
Loan shall bear interest at a per annum rate equal to the sum
of the LIBOR Rate plus the Applicable Percentage.
(b) Upon the occurrence, and during the continuance, of an
Event of Default, the principal of and, to the extent permitted by
law, interest on the Loans and any other amounts owing hereunder or
under the other Credit Documents shall bear interest, payable on
demand, at a per annum rate 2% greater than the applicable rate then
in effect or, if no rate is then in effect, at a per annum rate 2%
greater than the Alternate Base Rate.
(c) Interest on Loans shall be payable in arrears on each
Interest Payment Date, subject to Section 2.14.
SECTION 2.12 CONVERSION OPTIONS.
(a) Each Borrower may, in the case of Revolving Loans, SFG
Revolving Loans and the Term Loans, elect from time to time to convert
Alternate Base Rate Loans to LIBOR Rate Loans by giving irrevocable
written notice (or telephone notice promptly confirmed in writing
which confirmation may be by fax) to the Administrative Agent not
later than 1:30 P.M. (Charlotte, North Carolina time) on the third
Business Day prior to the date of the requested conversion. A form of
Notice of Conversion/ Extension is attached as Schedule 2.12. If the
date upon which an Alternate Base Rate Loan is to be converted to a
LIBOR Rate Loan is not a Business Day, then such conversion shall be
made on the next succeeding Business Day and during the period from
such last day of an Interest Period to such succeeding Business Day
such Loan shall bear interest as if it were an Alternate Base Rate
Loan. All or any part of outstanding Alternate Base Rate Loans may be
converted as provided herein, provided that (i) no Loan may be
converted into a LIBOR Rate Loan when any Default or Event of Default
has occurred and is continuing and (ii) partial conversions shall be
in an aggregate principal amount of $5,000,000 or a whole multiple of
$1,000,000 in excess thereof.
(b) Any LIBOR Rate Loans may be continued as such upon the
expiration of an Interest Period with respect thereto by compliance by
the applicable Borrower with the notice provisions contained in
Section 2.12(a); provided, that no LIBOR Rate Loan may be continued as
such when any Default or Event of Default has occurred and is
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continuing, in which case such Loan shall be automatically converted
to an Alternate Base Rate Loan at the end of the applicable Interest
Period with respect thereto. If the applicable Borrower shall fail to
give timely notice of an election to continue a LIBOR Rate Loan, or
the continuation of LIBOR Rate Loans is not permitted hereunder, such
LIBOR Rate Loans shall be automatically converted to Alternate Base
Rate Loans at the end of the applicable Interest Period with respect
thereto.
SECTION 2.13 COMPUTATION OF INTEREST AND FEES.
(a) Interest payable hereunder with respect to Alternate Base
Rate Loans shall be calculated on the basis of a year of 365 days (or
366 days, as applicable) for the actual days elapsed. All other fees,
interest and all other amounts payable hereunder shall be calculated
on the basis of a 360 day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the
applicable Borrower and the Lenders of each determination of a LIBOR
Rate on the Business Day of the determination thereof. Any change in
the interest rate on a Loan resulting from a change in the Alternate
Base Rate shall become effective as of the opening of business on the
day on which such change in the Alternate Base Rate shall become
effective. The Administrative Agent shall as soon as practicable
notify the Borrowers and the Lenders of the effective date and the
amount of each such change.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall
be conclusive and binding on the Borrowers and the Lenders in the
absence of manifest error. The Administrative Agent shall, at the
request of a Borrower, deliver to such Borrower a statement showing
the computations used by the Administrative Agent in determining any
interest rate.
(c) It is the intent of the Lenders and the Credit Parties to
conform to and contract in strict compliance with applicable usury law
from time to time in effect. All agreements between the Lenders and
the Credit Parties are hereby limited by the provisions of this
paragraph which shall override and control all such agreements,
whether now existing or hereafter arising and whether written or oral.
In no way, nor in any event or contingency (including but not limited
to prepayment or acceleration of the maturity of any obligation),
shall the interest taken, reserved, contracted for, charged, or
received under this Credit Agreement, under the Notes or otherwise,
exceed the maximum nonusurious amount permissible under applicable
law. If, from any possible construction of any of the Credit Documents
or any other document, interest would otherwise be payable in excess
of the maximum nonusurious amount, any such construction shall be
subject to the provisions of this paragraph and such interest shall be
automatically reduced to the maximum nonusurious amount permitted
under applicable law, without the necessity of execution of any
amendment or new document. If any Lender shall ever receive anything
of value which is characterized as interest on the Loans under
applicable law and which would, apart from this provision, be in
excess of the maximum nonusurious amount, an amount equal to the
amount which would have been excessive interest shall, without
penalty, be applied to the reduction of the principal amount owing on
the Loans and not to the payment of interest, or refunded to the
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applicable Borrower or the other payor thereof if and to the extent
such amount which would have been excessive exceeds such unpaid
principal amount of the Loans. The right to demand payment of the
Loans or any other Indebtedness evidenced by any of the Credit
Documents does not include the right to receive any interest which has
not otherwise accrued on the date of such demand, and the Lenders do
not intend to charge or receive any unearned interest in the event of
such demand. All interest paid or agreed to be paid to the Lenders
with respect to the Loans shall, to the extent permitted by applicable
law, be amortized, prorated, allocated, and spread throughout the full
stated term (including any renewal or extension) of the Loans so that
the amount of interest on account of such indebtedness does not exceed
the maximum nonusurious amount permitted by applicable law.
SECTION 2.14 PRO RATA TREATMENT AND PAYMENTS.
Each borrowing of Revolving Loans or SFG Revolving Loans and any
reduction of the Revolving Commitments shall be made pro rata according to the
respective Commitment Percentages of the Lenders. Each payment under this
Agreement or any Note shall be applied, first, to any fees then due and owing
by the Borrowers pursuant to Section 2.7, second, to interest then due and
owing in respect of the Notes of the Borrowers and, third, to principal then
due and owing hereunder and under the Notes of the Borrowers. Each payment on
account of any fees pursuant to Section 2.7 shall be made pro rata in
accordance with the respective amounts due and owing (except as to the portion
of the Letter of Credit Fee retained by the Issuing Lender, the Issuing Lender
Fees and fees payable to the Agents). Each payment (other than prepayments) by
the Borrowers on account of principal of and interest on the Revolving Loans,
SFG Revolving Loans and on the Term Loans shall be made pro rata according to
the respective amounts due and owing in accordance with Section 2.9(a) hereof.
Each optional prepayment on account of principal of the Loans shall be applied
to such of the Loans as the applicable Borrower may designate (to be applied
pro rata among the Lenders); provided, that prepayments made pursuant to
Section 2.17 shall be applied in accordance with such section. Each mandatory
prepayment on account of principal of the Loans shall be applied in accordance
with Section 2.9(b). All payments (including prepayments) to be made by the
Borrowers on account of principal, interest and fees shall be made without
defense, set-off or counterclaim (except as provided in Section 2.20(b)) and
shall be made to the Administrative Agent for the account of the Lenders at the
Administrative Agent's office specified on Schedule 9.2 in Dollars and in
immediately available funds not later than 2:00 P.M. (Charlotte, North Carolina
time) on the date when due. The Administrative Agent shall distribute such
payments to the Lenders entitled thereto promptly upon receipt in like funds as
received. If any payment hereunder (other than payments on the LIBOR Rate
Loans) becomes due and payable on a day other than a Business Day, such payment
shall be extended to the next succeeding Business Day, and, with respect to
payments of principal, interest thereon shall be payable at the then applicable
rate during such extension. If any payment on a LIBOR Rate Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day.
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SECTION 2.15 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT.
(a) Unless the Administrative Agent shall have been notified
in writing by a Lender prior to the date a Loan is to be made by such
Lender (which notice shall be effective upon receipt) that such Lender
does not intend to make the proceeds of such Loan available to the
Administrative Agent, the Administrative Agent may assume that such
Lender has made such proceeds available to the Administrative Agent on
such date, and the Administrative Agent may in reliance upon such
assumption (but shall not be required to) make available to the
applicable Borrower a corresponding amount. If such corresponding
amount is not in fact made available to the Administrative Agent, the
Administrative Agent shall be able to recover such corresponding
amount from such Lender. If such Lender does not pay such
corresponding amount forthwith upon the Administrative Agent's demand
therefor, the Administrative Agent will promptly notify the Borrower
that received such corresponding amount, and such Borrower shall
immediately pay such corresponding amount to the Administrative Agent.
The Administrative Agent shall also be entitled to recover from the
Lender or such Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to
such Borrower to the date such corresponding amount is recovered by
the Administrative Agent at a per annum rate equal to (i) from such
Borrower at the applicable rate for the applicable borrowing pursuant
to the Notice of Borrowing and (ii) from a Lender at the Federal Funds
Effective Rate.
(b) Unless the Administrative Agent shall have been notified
in writing by a Borrower, prior to the date on which any payment is
due from it hereunder (which notice shall be effective upon receipt)
that such Borrower does not intend to make such payment, the
Administrative Agent may assume that such Borrower has made such
payment when due, and the Administrative Agent may in reliance upon
such assumption (but shall not be required to) make available to each
Lender on such payment date an amount equal to the portion of such
assumed payment to which such Lender is entitled hereunder, and if
such Borrower has not in fact made such payment to the Administrative
Agent, such Lender shall, on demand, repay to the Administrative Agent
the amount made available to such Lender. If such amount is repaid to
the Administrative Agent on a date after the date such amount was made
available to such Lender, such Lender shall pay to the Administrative
Agent on demand interest on such amount in respect of each day from
the date such amount was made available by the Administrative Agent to
such Lender to the date such amount is recovered by the Administrative
Agent at a per annum rate equal to the Federal Funds Effective Rate.
(c) A certificate of the Administrative Agent submitted to
any Borrower or any Lender with respect to any amount owing under this
Section 2.15 shall be conclusive in the absence of manifest error.
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SECTION 2.16 INABILITY TO DETERMINE INTEREST RATE.
Notwithstanding any other provision of this Agreement, if (i) the
Administrative Agent shall reasonably determine (which determination shall be
conclusive and binding absent manifest error) that, by reason of circumstances
affecting the relevant market, reasonable and adequate means do not exist for
ascertaining LIBOR for an Interest Period, or (ii) the Required Lenders shall
reasonably determine (which determination shall be conclusive and binding
absent manifest error) that the LIBOR Rate does not adequately and fairly
reflect the cost to such Lenders of funding LIBOR Rate Loans that a Borrower
has requested be outstanding as a LIBOR Tranche during an Interest Period, the
Administrative Agent shall forthwith give telephone notice of such
determination, confirmed in writing, to such Borrower, and the Lenders at least
two Business Days prior to the first day of such Interest Period. Unless the
Borrower shall have notified the Administrative Agent upon receipt of such
telephone notice that it wishes to rescind or modify its request regarding such
LIBOR Rate Loans, any Loans that were requested to be made as LIBOR Rate Loans
shall be made as Alternate Base Rate Loans and any Loans that were requested to
be converted into or continued as LIBOR Rate Loans shall be converted into
Alternate Base Rate Loans. Until any such notice has been withdrawn by the
Administrative Agent, no further Loans shall be made as, continued as, or
converted into, LIBOR Rate Loans for the Interest Periods so affected.
SECTION 2.17 ILLEGALITY.
Notwithstanding any other provision of this Agreement, if the adoption
of or any change in any Requirement of Law or in the interpretation or
application thereof by the relevant Governmental Authority to any Lender shall
make it unlawful for such Lender or its LIBOR Lending Office to make or
maintain LIBOR Rate Loans as contemplated by this Agreement or to obtain in the
interbank eurodollar market through its LIBOR Lending Office the funds with
which to make such Loans, (a) such Lender shall promptly notify the
Administrative Agent and the Borrowers thereof, (b) the commitment of such
Lender hereunder to make LIBOR Rate Loans or continue LIBOR Rate Loans as such
shall forthwith be suspended until the Administrative Agent shall give notice
that the condition or situation which gave rise to the suspension shall no
longer exist, and (c) such Lender's Loans then outstanding as LIBOR Rate Loans,
if any, shall be converted on the last day of the Interest Period for such
Loans or within such earlier period as required by law as Alternate Base Rate
Loans. The Borrowers hereby agree promptly to pay any Lender, upon its demand,
any additional amounts necessary to compensate such Lender for actual and
direct costs (but not including anticipated profits) reasonably incurred by
such Lender in making any repayment in accordance with this Section including,
but not limited to, any interest or fees payable by such Lender to lenders of
funds obtained by it in order to make or maintain its LIBOR Rate Loans
hereunder. A certificate as to any additional amounts payable pursuant to this
Section submitted by such Lender, through the Administrative Agent, to the
Borrowers shall be conclusive in the absence of manifest error. Each Lender
agrees to use reasonable efforts (including reasonable efforts to change its
LIBOR Lending Office) to avoid or to minimize any amounts which may otherwise
be payable pursuant to this Section; provided, however, that such efforts shall
not cause the imposition on such Lender of any additional costs or legal or
regulatory burdens deemed by such Lender in its sole discretion to be material.
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SECTION 2.18 REQUIREMENTS OF LAW.
(a) If the adoption of or any change in any Requirement of
Law or in the interpretation or application thereof or compliance by
any Lender with any request or directive (whether or not having the
force of law) from any central bank or other Governmental Authority
made subsequent to the date hereof:
(i) shall subject such Lender to any tax of any kind
whatsoever with respect to any Letter of Credit or any
application relating thereto, any LIBOR Rate Loan made by it,
or change the basis of taxation of payments to such Lender in
respect thereof (except for changes in the rate of tax on the
overall net income of such Lender);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar
requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of
funds by, any office of such Lender which is not otherwise
included in the determination of the LIBOR Rate hereunder; or
(iii) shall impose on such Lender any other
condition;
and the result of any of the foregoing is to increase the cost to such
Lender of making or maintaining LIBOR Rate Loans or the Letters of
Credit or to reduce any amount receivable hereunder or under any Note
and such Lender's costs have increased with respect to other customers
under similar circumstances, then, in any such case, the Borrowers
shall promptly pay such Lender, upon its demand, any additional
amounts necessary to compensate such Lender for such additional cost
or reduced amount receivable which such Lender reasonably deems to be
material as determined by such Lender with respect to its LIBOR Rate
Loans or Letters of Credit. A certificate as to any additional amounts
payable pursuant to this Section submitted by such Lender, through the
Administrative Agent, to the Borrowers shall be conclusive in the
absence of manifest error. Each Lender agrees to use reasonable
efforts (including reasonable efforts to change its Domestic Lending
Office or LIBOR Lending Office, as the case may be) to avoid or to
minimize any amounts which might otherwise be payable pursuant to this
paragraph of this Section; provided, however, that such efforts shall
not cause the imposition on such Lender of any additional costs or
legal or regulatory burdens deemed by such Lender to be material.
(b) If any Lender shall have reasonably determined that the
adoption of or any change in any Requirement of Law regarding capital
adequacy or in the interpretation or application thereof or compliance
by such Lender or any corporation controlling such Lender with any
request or directive regarding capital adequacy (whether or not having
the force of law) from any central bank or Governmental Authority made
subsequent to the date hereof does or shall have the effect of
reducing the rate of return on such Lender's or such corporation's
capital as a consequence of its obligations hereunder to a
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level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into
consideration such Lender's or such corporation's policies with
respect to capital adequacy) by an amount reasonably deemed by such
Lender to be material, and such Lender has experienced such effect
with respect to other customers under similar circumstances, then from
time to time, within fifteen (15) days after demand by such Lender,
the Borrowers shall pay to such Lender such additional amount as shall
be certified by such Lender as being required to compensate it for
such reduction. Such a certificate as to any additional amounts
payable under this Section submitted by a Lender (which certificate
shall include a description of the basis for the computation), through
the Administrative Agent, to the Borrowers shall be conclusive absent
manifest error.
(c) The agreements in this Section 2.18 shall survive the
termination of this Agreement and payment of the Notes and all other
amounts payable hereunder.
SECTION 2.19 INDEMNITY.
The Borrowers hereby agree to indemnify each Lender and to hold such
Lender harmless from any funding loss or expense which such Lender may sustain
or incur as a consequence of (a) default by a Borrower in payment of the
principal amount of or interest on any Loan by such Lender in accordance with
the terms hereof, (b) default by a Borrower in accepting a borrowing after such
Borrower has given a notice in accordance with the terms hereof, (c) default by
a Borrower in making any prepayment after such Borrower has given a notice in
accordance with the terms hereof, and/or (d) the making by a Borrower of a
prepayment of a Loan, or the conversion thereof, on a day which is not the last
day of the Interest Period with respect thereto, in each case including, but
not limited to, any such loss or expense arising from interest or fees payable
by such Lender to lenders of funds obtained by it in order to maintain its
Loans hereunder. A certificate as to any additional amounts payable pursuant to
this Section submitted by any Lender, through the Administrative Agent, to the
Borrowers (which certificate must be delivered to the Administrative Agent
within thirty days following such default, prepayment or conversion) shall be
conclusive in the absence of manifest error. The agreements in this Section
shall survive termination of this Agreement and payment of the Notes and all
other amounts payable hereunder.
SECTION 2.20 TAXES.
(a) All payments made by the Borrowers hereunder or under any
Note will be, except as provided in Section 2.20(b), made free and
clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other
charges of whatever nature now or hereafter imposed by any
Governmental Authority or by any political subdivision or taxing
authority thereof or therein with respect to such payments (but
excluding any tax imposed on or measured by the net income or profits
of a Lender) and all interest, penalties or similar liabilities with
respect thereto (all such non-excluded taxes, levies, imposts, duties,
fees, assessments or other charges being referred to collectively as
"Taxes"). If any Taxes are so levied or imposed, the Borrowers agree
to pay the full amount of such Taxes, and such additional amounts as
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may be necessary so that every payment of all amounts due under this
Agreement or under any Note, after withholding or deduction for or on
account of any Taxes, will not be less than the amount provided for
herein or in such Note. The Borrowers will furnish to the
Administrative Agent as soon as practicable after the date the payment
of any Taxes is due pursuant to applicable law certified copies (to
the extent reasonably available and required by law) of tax receipts
evidencing such payment by the Borrowers. The Borrowers agree to
indemnify and hold harmless each Lender, and reimburse such Lender
upon its written request, for the amount of any Taxes so levied or
imposed and paid by such Lender but excluding any interest or
penalties caused by such Lender's failure to pay any such taxes when
due.
(b) Each Lender that is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) agrees to deliver
to the Borrowers and the Administrative Agent on or prior to the
Closing Date, or in the case of a Lender that is an assignee or
transferee of an interest under this Agreement pursuant to Section
9.6(d) (unless the respective Lender was already a Lender hereunder
immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Lender, (i) if the Lender is a "bank"
within the meaning of Section 881(c)(3)(A) of the Code, two accurate
and complete original signed copies of Internal Revenue Service Form
4224 or 1001 (or successor forms) certifying such Lender's entitlement
to a complete exemption from United States withholding tax with
respect to payments to be made under this Agreement and under any
Note, or (ii) if the Lender is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code, either Internal Revenue Service Form
1001 or 4224 as set forth in clause (i) above, or (x) a certificate
substantially in the form of Schedule 2.20 (any such certificate, a
"2.20 Certificate") and (y) two accurate and complete original signed
copies of Internal Revenue Service Form W-8 (or successor form)
certifying such Lender's entitlement to an exemption from United
States withholding tax with respect to payments of interest to be made
under this Agreement and under any Note. In addition, each Lender
agrees that it will deliver upon any Borrower's request updated
versions of the foregoing, as applicable, whenever the previous
certification has become obsolete or inaccurate in any material
respect, together with such other forms as may be required in order to
confirm or establish the entitlement of such Lender to a continued
exemption from or reduction in United States withholding tax with
respect to payments under this Agreement and any Note. Notwithstanding
anything to the contrary contained in Section 2.20(a), but subject to
the immediately succeeding sentence, (x) the Borrowers shall be
entitled, to the extent it is required to do so by law, to deduct or
withhold Taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest,
fees or other amounts payable hereunder for the account of any Lender
which is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes
to the extent that such Lender has not provided to the Borrowers U.S.
Internal Revenue Service Forms that establish a complete exemption
from such deduction or withholding and (y) the Borrowers shall not be
obligated pursuant to Section 2.20(a) hereof to gross-up payments to
be made to a Lender in respect of Taxes imposed by the United States
if (I) such Lender has not provided to the Borrowers the Internal
Revenue Service Forms required to be provided to the Borrowers
pursuant to this Section 2.20(b) or (II) in the case of a
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payment, other than interest, to a Lender described in clause (ii)
above, to the extent that such Forms do not establish a complete
exemption from withholding of such Taxes. Notwithstanding anything to
the contrary contained in the preceding sentence or elsewhere in this
Section 2.20, the Borrowers agree to pay additional amounts and to
indemnify each Lender in the manner set forth in Section 2.20(a)
(without regard to the identity of the jurisdiction requiring the
deduction or withholding) in respect of any amounts deducted or
withheld by it as described in the immediately preceding sentence as a
result of any changes after the Closing Date in any applicable law,
treaty, governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding of
Taxes.
(c) Each Lender agrees to use reasonable efforts (including
reasonable efforts to change its Domestic Lending Office or LIBOR
Lending Office, as the case may be) to avoid or to minimize any
amounts which might otherwise be payable pursuant to this Section;
provided, however, that such efforts shall not cause the imposition on
such Lender of any additional costs or legal or regulatory burdens
deemed by such Lender in its sole discretion to be material.
(d) If the Borrowers pay any additional amount pursuant to
this Section 2.20 with respect to a Lender, such Lender shall use
reasonable efforts to obtain a refund of tax or credit against its tax
liabilities on account of such payment; provided that such Lender
shall have no obligation to use such reasonable efforts if either (i)
it is in an excess foreign tax credit position or (ii) it believes in
good faith, in its sole discretion, that claiming a refund or credit
would cause adverse tax consequences to it. In the event that such
Lender receives such a refund or credit, such Lender shall pay to the
Borrowers an amount that such Lender reasonably determines is equal to
the net tax benefit obtained by such Lender as a result of such
payment by the Borrowers. In the event that no refund or credit is
obtained with respect to the Borrowers' payments to such Lender
pursuant to this Section 2.20(d), then such Lender shall upon request
provide a certification that such Lender has not received a refund or
credit for such payments. Nothing contained in this Section 2.20(d)
shall require a Lender to disclose or detail the basis of its
calculation of the amount of any tax benefit or any other amount or
the basis of its determination referred to in the proviso to the first
sentence of this Section 2.20(d) to the Borrowers or any other party.
(e) The agreements in this Section 2.20 shall survive the
termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder.
SECTION 2.21 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.
(a) In addition to its other obligations under Section 2.6,
the Parent Borrower hereby agrees to protect, indemnify, pay and save
each Issuing Lender harmless from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees) that the Issuing Lender may
incur or be subject to as a consequence, direct or indirect, of (i)
the issuance of any Letter of Credit or (ii) the failure of the
Issuing Lender to honor a drawing under a Letter of Credit as a
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result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or governmental
authority (all such acts or omissions, herein called "Government
Acts").
(b) As between the Parent Borrower and the Issuing Lender,
the Parent Borrower shall assume all risks of the acts, omissions or
misuse of any Letter of Credit by the beneficiary thereof. The Issuing
Lender shall not be responsible: (i) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and
issuance of any Letter of Credit, even if it should in fact prove to
be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or
assign any Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason; (iii) for failure of the beneficiary of a
Letter of Credit to comply fully with conditions required in order to
draw upon a Letter of Credit; (iv) for errors, omissions,
interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise, whether or not they be
in cipher; (v) for errors in interpretation of technical terms; (vi)
for any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under a Letter of Credit or of the
proceeds thereof; and (vii) for any consequences arising from causes
beyond the control of the Issuing Lender, including, without
limitation, any Government Acts. None of the above shall affect,
impair, or prevent the vesting of the Issuing Lender's rights or
powers hereunder.
(c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted
by the Issuing Lender, under or in connection with any Letter of
Credit or the related certificates, if taken or omitted in good faith,
shall not put such Issuing Lender under any resulting liability to the
Parent Borrower. It is the intention of the parties that this
Agreement shall be construed and applied to protect and indemnify the
Issuing Lender against any and all risks involved in the issuance of
the Letters of Credit, all of which risks are hereby assumed by the
Parent Borrower, including, without limitation, any and all risks of
the acts or omissions, whether rightful or wrongful, of any Government
Authority. The Issuing Lender shall not, in any way, be liable for any
failure by the Issuing Lender or anyone else to pay any drawing under
any Letter of Credit as a result of any Government Acts or any other
cause beyond the control of the Issuing Lender.
(d) Nothing in this Section 2.21 is intended to limit the
reimbursement obligation of the Parent Borrower contained in Section
2.6(d) hereof. The obligations of the Parent Borrower under this
Section 2.21 shall survive the termination of this Agreement. No act
or omissions of any current or prior beneficiary of a Letter of Credit
shall in any way affect or impair the rights of the Issuing Lender to
enforce any right, power or benefit under this Agreement.
(e) Notwithstanding anything to the contrary contained in
this Section 2.21, the Parent Borrower shall have no obligation to
indemnify any Issuing Lender in respect
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of any liability incurred by such Issuing Lender arising out of the
gross negligence or willful misconduct of the Issuing Lender
(including action not taken by an Issuing Lender), as determined by a
court of competent jurisdiction.
SECTION 2.22 JOINT AND SEVERAL LIABILITY OF THE BORROWERS.
(a) Each of the Borrowers is accepting joint and several
liability hereunder with respect to the Joint and Several Obligations
in consideration of the financial accommodation to be provided by the
Lenders under Sections 2.2 and 2.4 of this Agreement, for the mutual
benefit, directly and indirectly, of each of the Borrowers and in
consideration of the undertakings of each of the Borrowers to accept
joint and several liability for the Joint and Several Obligations of
each of them under Sections 2.2 and 2.4.
(b) Each of the Borrowers jointly and severally hereby
irrevocably and unconditionally accepts, not merely as a surety but
also as a co-debtor, joint and several liability with the other
Borrower with respect to the payment and performance of all of the
Joint and Several Obligations arising under this Credit Agreement and
the other Credit Documents, it being the intention of the parties
hereto that all the Joint and Several Obligations shall be the joint
and several obligations of each of the Borrowers without preferences
or distinction among them.
(c) If and to the extent that either of the Borrowers shall
fail to make any payment with respect to any of the Joint and Several
Obligations hereunder as and when due or to perform any of such Joint
and Several Obligations in accordance with the terms thereof, then in
each such event, the other Borrower will make such payment with
respect to, or perform, such Joint and Several Obligations.
(d) The obligations of each Borrower under the provisions of
this Section 2.22 constitute full recourse obligations of such
Borrower, enforceable against it to the full extent of its properties
and assets, irrespective of the validity, regularity or enforceability
of this Credit Agreement or any other circumstances whatsoever.
(e) Except as otherwise expressly provided herein, each
Borrower hereby waives notice of acceptance of its joint and several
liability, notice of occurrence of any Default or Event of Default
(except to the extent notice is expressly required to be given
pursuant to the terms of this Credit Agreement), or of any demand for
any payment under this Credit Agreement, notice of any action at any
time taken or omitted by the Administrative Agent or the Lenders under
or in respect of any of the Joint and Several Obligations hereunder,
any requirement of diligence and, generally, all demands, notices and
other formalities of every kind in connection with this Credit
Agreement. Each Borrower hereby assents to, and waives notice of, any
extension or postponement of the time for the payment of any of the
Joint and Several Obligations hereunder, the acceptance of any partial
payment thereon, any waiver, consent or other action or acquiescence
by the Administrative Agent or the Lenders at any time or times in
respect of any default by a Borrower in the performance or
satisfaction of any term, covenant, condition or provision of this
Credit Agreement or any other Credit Document, any and
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all other indulgences whatsoever by the Administrative Agent or the
Lenders in respect of any of the Joint and Several Obligations
hereunder, and the taking, addition, substitution or release, in whole
or in part, at any time or times, of any security for any of such
Joint and Several Obligations or the addition, substitution or
release, in whole or in part, of either Borrower. Without limiting the
generality of the foregoing, each Borrower assents to any other action
or delay in acting or any failure to act on the part of the
Administrative Agent or the Lenders, including, without limitation,
any failure strictly or diligently to assert any right or to pursue
any remedy or to comply fully with applicable laws or regulations
thereunder which might, but for the provisions of this Section 2.22,
afford grounds for terminating, discharging or relieving such
Borrower, in whole or in part, from any of its obligations under this
Section 2.22, it being the intention of each Borrower that, so long as
any of the Joint and Several Obligations remain unsatisfied, the
obligations of such Borrower under this Section 2.22 shall not be
discharged except by performance and then only to the extent of such
performance. The obligations of each Borrower under this Section 2.22
shall not be diminished or rendered unenforceable by any winding up,
reorganization, arrangement, liquidation, reconstruction or similar
proceeding with respect to any reconstruction or similar proceeding
with respect to a Borrower or any Lender. The joint and several
liability of the Borrowers hereunder shall continue in full force and
effect notwithstanding any absorption, merger, amalgamation or any
other change whatsoever in the name, membership, constitution or place
of formation of a Borrower or any Lender.
(f) The provisions of this Section 2.22 are made for the
benefit of the Administrative Agent and the Lenders and their
respective successors and assigns, and may be enforced by any such
Person from time to time against either of the Borrowers as often as
occasion therefor may arise and without requirement on the part of any
Lender first to marshal any of its claims or to exercise any of its
rights against the other Borrower or to exhaust any remedies available
to it against the other Borrower or to resort to any other source or
means of obtaining payment of any of the Joint and Several Obligations
or to elect any other remedy. Without limiting the generality of the
foregoing, each Borrower hereby specifically waives the benefits of
N.C. Gen. Stat. ss.ss.26-7 through 26-9, inclusive, to the extent
applicable. The provisions of this Section 2.22 shall remain in effect
until all the Joint and Several Obligations hereunder shall have been
paid in full or otherwise fully satisfied. If at any time, any
payment, or any part thereof, made in respect of any of the Joint and
Several Obligations, is rescinded or must otherwise be restored or
returned by the Lenders upon the insolvency, bankruptcy or
reorganization of either of the Borrowers, or otherwise, the
provisions of this Section 2.22 will forthwith be reinstated and in
effect as though such payment had not been made.
(g) Notwithstanding any provision to the contrary contained
herein or in any other of the Credit Documents or Hedging Agreements,
the obligations of each Borrower hereunder shall be limited to an
aggregate amount equal to the largest amount that would not render its
obligations hereunder subject to avoidance under Section 548 of the
Bankruptcy Code or any comparable provisions of any applicable state
law.
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SECTION 2.23 DEFAULTING LENDERS; LIMITATION ON CLAIMS.
(a) Generally. In addition to the rights and remedies that
may be available to the Administrative Agent or the Borrowers under
this Agreement or applicable law, if at any time a Lender is a
Defaulting Lender such Defaulting Lender's right to participate in the
administration of the Loans, this Agreement and the other Credit
Documents, including without limitation, any right to vote in respect
of, to consent to or to direct any action or inaction of the
Administrative Agent or to be taken into account in the calculation of
the Required Lenders, shall be suspended during the pendency of such
failure or refusal. If a Lender is a Defaulting Lender because it has
failed to make timely payment to the Administrative Agent of any
amount required to be paid to the Administrative Agent hereunder
(without giving effect to any notice or cure periods), in addition to
other rights and remedies which the Administrative Agent or the
Borrowers may have under the immediately preceding provisions or
otherwise, the Administrative Agent shall be entitled (i) to collect
interest from such Defaulting Lender on such delinquent payment for
the period from the date on which the payment was due until the date
on which the payment is made at the Federal Funds Effective Rate, (ii)
to withhold or setoff and to apply in satisfaction of the defaulted
payment and any related interest, any amounts otherwise payable to
such Defaulting Lender under this Agreement or any other Credit
Document until such defaulted payment and related interest has been
paid in full and such default no longer exists and (iii) to bring an
action or suit against such Defaulting Lender in a court of competent
jurisdiction to recover the defaulted amount and any related interest.
Any amounts received by the Administrative Agent in respect of a
Defaulting Lender's Loans shall not be paid to such Defaulting Lender
and shall be held uninvested by the Administrative Agent and either
applied against the purchase price of such Loans under the following
subsection (b) or paid to such Defaulting Lender upon the default of
such Defaulting Lender being cured.
(b) Purchase of Defaulting Lender's Commitment. Any Lender
who is not a Defaulting Lender shall have the right, but not the
obligation, in its sole discretion, to acquire all of a Defaulting
Lender's Commitment. If more than one Lender exercises such right,
each such Lender shall have the right to acquire such proportion of
such Defaulting Lender's Commitment on a pro rata basis. Upon any such
purchase, the Defaulting Lender's interest in the Loans and its rights
hereunder (but not its liability in respect thereof or under the
Credit Documents or this Agreement to the extent the same relate to
the period prior to the effective date of the purchase) shall
terminate on the date of purchase, and the Defaulting Lender shall
promptly execute all documents reasonably requested to surrender and
transfer such interest to the purchaser thereof subject to and in
accordance with the requirements set forth in Section 9.6, including
an appropriate Commitment Transfer Supplement. The purchase price for
the Commitment of a Defaulting Lender shall be equal to the sum of the
amount of the principal balance of the Loans outstanding and owed by
the Borrowers to the Defaulting Lender, plus any accrued interest with
respect thereto, plus any fees or other amounts owed by the Borrowers
to the Defaulting Lender. Prior to payment of such purchase price to a
Defaulting Lender, the Administrative Agent shall apply against such
purchase price any amounts retained by the Administrative Agent
pursuant to the last sentence of the immediately preceding
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subsection (a). The Defaulting Lender shall be entitled to receive all
amounts owed to it by the Borrowers on account of principal of and
interest on the Loans and the Notes, and fees and other amounts due
under the Credit Documents which accrued prior to the date of the
default by the Defaulting Lender, to the extent the same are received
by the Administrative Agent from or on behalf of the Borrowers. There
shall be no recourse against any Lender or the Administrative Agent
for the payment of such sums by the Borrowers except to the extent of
the receipt of payments from any other party or in respect of the
Loans.
SECTION 2.24 REPLACEMENT OF LENDERS.
If any Lender shall become affected by any of the changes or events
described in Sections 2.16, 2.17, 2.18 or 2.20 (any such Lender being
hereinafter referred to as a "Replaced Lender") and shall petition either
Borrower for any increased cost or amounts thereunder, then in such case,
either Borrower may, upon at least five (5) Business Days' notice to the
Administrative Agent and such Replaced Lender, designate a replacement lender
(a "Replacement Lender") acceptable to the Administrative Agent in its
reasonable discretion, to which such Replaced Lender shall, subject to its
receipt (unless a later date for the remittance thereof shall be agreed upon by
such Borrower and the Replaced Lender) of all amounts owed to such Replaced
Lender under Sections 2.16, 2.17, 218 or 2.20 assign all (but not less than
all) of its rights, obligations, Loans and Commitments hereunder; provided,
that all amounts owed to such Replaced Lender by the Borrowers (except
liabilities which by the terms hereof survive the payment in full of the Loans
and termination of this Agreement) shall be paid in full as of the date of such
assignment. Upon any assignment by any Lender pursuant to this Section 2.24
becoming effective, the Replacement Lender shall thereupon be deemed to be a
"Lender" for all purposes of this Agreement and such Replaced Lender shall
thereupon cease to be a "Lender" for all purposes of this Agreement and shall
have no further rights or obligations hereunder (other than pursuant to
Sections 2.16, 2.17, 2.18, 2.20 and 9.5 while such Replaced Lender was a
Lender).
Notwithstanding any Replaced Lender's failure or refusal to assign its rights,
obligations, Loans and Commitments under this Section 2.24, the Replaced Lender
shall cease to be a "Lender" for all purposes of this Agreement and the
Replacement Lender substituted therefor upon payment to the Replaced Lender by
the Replacement Lender of all amounts set forth in this Section 2.24 without
any further action of the Replaced Lender.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make the
Extensions of Credit herein provided for, the Credit Parties hereby represent
and warrant to the Administrative Agent and to each Lender that:
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SECTION 3.1 FINANCIAL CONDITION.
The consolidated balance sheets and the related statements of income,
retained earnings and cash flows of Suiza and its Subsidiaries and of the
Subsidiary Borrower and its Subsidiaries for the fiscal year ending December
31, 1998 and for the fiscal quarter ending September 30, 1999, are complete and
correct and present fairly, in all material respects, the financial condition
of, and the results of operations for, such Persons as of such dates. All such
financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as disclosed therein). None of the Parent Borrower or
its Subsidiaries has on the date hereof any material contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments or unrealized
or anticipated losses from any unfavorable commitments, except as referred to
or reflected or provided for in the balance sheets referred to above.
SECTION 3.2 NO CHANGE.
Since December 31, 1998 (and after delivery of annual audited
financial statements in accordance with Section 5.1(a), from the date of the
most recently delivered annual audited financial statements) there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect.
SECTION 3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW.
Each of the Parent Borrower and its Subsidiaries (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the requisite power and authority and
the legal right to own and operate all its material property, to lease the
material property it operates as lessee and to conduct the business in which it
is currently engaged, (c) is duly qualified to conduct business and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification except to the extent that the failure to so qualify or be in good
standing could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect and except for those Subsidiaries required to be so qualified
and in good standing pursuant to the terms of Section 5.16 following their
reorganization or restructure on or about the Closing Date and (d) is in
compliance with all Requirements of Law except to the extent that the failure
to comply therewith could not, in the aggregate, reasonably be expected to have
a Material Adverse Effect.
SECTION 3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE
OBLIGATIONS.
Each of the Borrowers and the other Credit Parties has full power and
authority and the legal right to make, deliver and perform the Credit Documents
to which it is party and has taken all necessary limited liability company or
corporate action to authorize the execution, delivery and performance by it of
the Credit Documents to which it is party. No consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the borrowings
hereunder or with the execution, delivery or performance of any Credit Document
by the Borrowers and the other Credit Parties (other
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than those which have been obtained) or with the validity or enforceability of
any Credit Document against the Borrowers and the other Credit Parties (except
such filings as are necessary in connection with the perfection of the Liens
created by such Credit Documents). Each Credit Document to which it is a party
has been duly executed and delivered on behalf of each of the Borrowers and the
other Credit Parties, as the case may be. Each Credit Document to which it is a
party constitutes a legal, valid and binding obligation of each of the
Borrowers and the other Credit Parties, as the case may be, enforceable against
each of the Borrowers and Credit Parties, as the case may be, in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at law).
SECTION 3.5 NO LEGAL BAR; NO DEFAULT.
The execution, delivery and performance of the Credit Documents, the
borrowings thereunder and the use of the proceeds of the Loans will not violate
any Requirement of Law or any Contractual Obligation of the Parent Borrower or
its Subsidiaries (except those as to which waivers or consents have been
obtained), and will not result in, or require, the creation or imposition of
any Lien on any of its or their respective properties or revenues pursuant to
any Requirement of Law or Contractual Obligation other than the Liens arising
under or contemplated in connection with the Credit Documents. Neither the
Parent Borrower nor any of its Subsidiaries is in default under or with respect
to any of its Contractual Obligations in any respect which could reasonably be
expected to have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
SECTION 3.6 NO MATERIAL LITIGATION.
Except as set forth in Schedule 3.6, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the best knowledge of the Parent Borrower, threatened by or against the
Parent Borrower or any of its Subsidiaries or against any of its or their
respective properties or revenues (a) with respect to the Credit Documents or
any Loan or any of the transactions contemplated hereby, or (b) which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect.
SECTION 3.7 GOVERNMENT ACTS.
(a) Neither the Parent Borrower nor any Credit Party is an
"investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as
amended.
(b) Neither the Parent Borrower nor any of its Subsidiaries
is a "holding company", or an "affiliate" of a "holding company" or a
"subsidiary company" of a "holding company", within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
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SECTION 3.8 MARGIN REGULATIONS.
No part of the proceeds of any Loan hereunder will be used directly or
indirectly for any purpose which violates, or which would be inconsistent with,
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect. The aggregate
value of all "margin stock" owned by the Parent Borrower and its Subsidiaries
taken as a group does not exceed 25% of the value of their assets.
SECTION 3.9 ERISA.
Except as could not reasonably be expected to have a Material Adverse
Effect,
(a) neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the
date on which this representation is made or deemed made with respect
to any Plan, and each Plan has complied in all material respects with
the applicable provisions of ERISA and the Code;
(b) no termination of a Single Employer Plan has occurred
resulting in any liability that has remained underfunded, and no Lien
in favor of the PBGC or a Plan has arisen, during such five-year
period;
(c) the present value of all accrued benefits under each
Single Employer Plan (based on those assumptions used to fund such
Plans) did not, as of the last annual valuation date prior to the date
on which this representation is made or deemed made, exceed the value
of the assets of such Plan allocable to such accrued benefits; and
(d) neither the Parent Borrower, nor any of its Subsidiaries,
nor any Commonly Controlled Entity is currently subject to any
liability for a complete or partial withdrawal from a Multiemployer
Plan.
SECTION 3.10 ENVIRONMENTAL MATTERS.
Except as to matters with respect to which the Parent Borrower and its
Subsidiaries could not reasonably be expected to incur liabilities in excess of
$30,000,000 in the aggregate:
(a) the facilities and properties owned, leased or operated
by the Parent Borrower or any of its Subsidiaries (the "Real
Properties") do not contain any Hazardous Materials in amounts or
concentrations which (i) constitute a violation of, or (ii) could give
rise to liability under, any Environmental Law;
(b) the Real Properties and all operations of the Parent
Borrower and/or its Subsidiaries at the Real Properties are in
compliance, and have in the last five years been in compliance, in all
material respects with all applicable Environmental Laws, and there is
no contamination at, under or about the Real Properties or violation
of any
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Environmental Law with respect to the Real Properties or the business
operated by the Parent Borrower or any of its Subsidiaries (the
"Business");
(c) neither the Parent Borrower nor any of its Subsidiaries
has received any written or actual notice of violation, alleged
violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with
regard to any of the Real Properties or the Business, nor does the
Parent Borrower or any of its Subsidiaries have knowledge or reason to
believe that any such notice will be received or is being threatened;
(d) Hazardous Materials have not been transported or disposed
of from the Real Properties in violation of, or in a manner or to a
location which could give rise to liability under any Environmental
Law, nor have any Hazardous Materials been generated, treated, stored
or disposed of at, on or under any of the Real Properties in violation
of, or in a manner that could give rise to liability under, any
applicable Environmental Law;
(e) no judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Parent Borrower,
threatened, under any Environmental Law to which the Parent Borrower
or any Subsidiary is or will be named as a party with respect to the
Real Properties or the Business, nor are there any consent decrees or
other decrees, consent orders, administrative orders or other orders,
or other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Real Properties or the Business;
and
(f) there has been no release or threat of release of
Hazardous Materials at or from the Real Properties, or arising from or
related to the operations of the Parent Borrower or any Subsidiary in
connection with the Real Properties or otherwise in connection with
the Business, in violation of or in amounts or in a manner that could
give rise to liability under Environmental Laws.
SECTION 3.11 PURPOSE OF LOANS.
The proceeds of the Loans hereunder shall be used solely by the
Borrowers to (i) refinance existing Indebtedness and (ii) provide for working
capital, Permitted Acquisitions and other general corporate purposes.
The Letters of Credit shall be used for general corporate purposes.
SECTION 3.12 SUBSIDIARIES.
Set forth on Schedule 3.12 is a complete and accurate list of all
Subsidiaries of the Parent Borrower. Information on the attached Schedule
includes state of incorporation; the number of shares of each class of Capital
Stock or other equity interests outstanding; the number and percentage of
outstanding shares of each class of stock owned by Parent Borrower or its
Subsidiaries; and the number and effect, if exercised, of all outstanding
options, warrants, rights of conversion or purchase and similar rights. The
outstanding Capital Stock and other equity interests of all such Subsidiaries
is validly issued, fully paid and non-assessable and is owned,
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free and clear of all Liens (other than those arising under or contemplated in
connection with the Credit Documents). As of the Closing Date, there are no
Unrestricted Subsidiaries.
SECTION 3.13 OWNERSHIP.
Each of the Parent Borrower and its Subsidiaries (a) is the owner of,
and has good and marketable title to, all of its respective assets, except as
may be permitted pursuant to Section 6.12 hereof, and none of such assets is
subject to any Lien other than Permitted Liens and (b) enjoys peaceful and
undisturbed possession of all Real Properties that are necessary for the
operation and conduct of its business.
SECTION 3.14 INDEBTEDNESS.
Except as otherwise permitted under Section 6.1, the Parent Borrower
and its Subsidiaries have no Indebtedness.
SECTION 3.15 TAXES.
Each of the Parent Borrower and its Subsidiaries has filed, or caused
to be filed, all tax returns (federal, state, local and foreign) required to be
filed other than returns for which failure to file would not have a Material
Adverse Effect and paid (a) all amounts of taxes shown thereon to be due
(including interest and penalties) and (b) all other taxes, fees, assessments
and other governmental charges (including mortgage recording taxes, documentary
stamp taxes and intangibles taxes) owing by it, except for such taxes (i) which
are not yet delinquent or (ii) that are being contested in good faith and by
proper proceedings, and against which adequate reserves are being maintained in
accordance with GAAP or (iii) for which nonpayment would not have a Material
Adverse Effect. Neither the Parent Borrower nor any of its Subsidiaries is
aware as of the Closing Date of any proposed tax assessments against it or any
of its Subsidiaries which could reasonably be expected to have a Material
Adverse Effect.
SECTION 3.16 INTELLECTUAL PROPERTY.
Each of the Parent Borrower and its Subsidiaries owns, or has the
legal right to use, all trademarks, tradenames, patents, copyrights,
technology, know-how and processes (collectively, the "Intellectual Property")
necessary for each of them to conduct its business as currently conducted.
Except as provided on Schedule 3.16, no claim has been asserted and is pending
by any Person challenging or questioning the use of any such Intellectual
Property or the validity or effectiveness of any such Intellectual Property,
nor does the Parent Borrower or any of its Subsidiaries know of any such claim,
and, to the knowledge of the Parent Borrower or any of its Subsidiaries, the
use of such Intellectual Property by the Parent Borrower or any of its
Subsidiaries does not infringe on the rights of any Person, except for such
claims and infringements that in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
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SECTION 3.17 SOLVENCY.
The fair saleable value of all Credit Parties' assets, measured on a
going concern basis, exceeds all probable liabilities, including those to be
incurred pursuant to this Credit Agreement. The Credit Parties on a
consolidated basis, will not (a) have unreasonably small capital in relation to
the business in which they are engaged or (b) have incurred, or believe that
they will have incurred after giving effect to the transactions contemplated by
this Credit Agreement, Indebtedness beyond their ability to pay such
Indebtedness as it becomes due.
SECTION 3.18 INVESTMENTS.
All Investments of each of the Parent Borrower and its Subsidiaries
are Permitted Investments.
SECTION 3.19 LOCATION OF CHIEF EXECUTIVE OFFICE.
Set forth on Schedule 3.19 is the chief executive office and principal
place of business of each of the Parent Borrower and its Restricted
Subsidiaries. Schedule 3.19 may be updated from time to time by the Parent
Borrower to include new locations by giving written notice thereof to the
Administrative Agent.
SECTION 3.20 NO BURDENSOME RESTRICTIONS.
None of the Parent Borrower or any of its Subsidiaries is a party to
any agreement or instrument or subject to any other obligation or any charter
or corporate restriction or any provision of any applicable law, rule or
regulation which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
SECTION 3.21 BROKERS' FEES.
None of the Parent Borrower or any of its Subsidiaries has any
obligation to any Person in respect of any finder's, broker's, investment
banking or other similar fee in connection with any of the transactions
contemplated under the Credit Documents other than the closing and other fees
payable pursuant to this Credit Agreement and the Fee Letter.
SECTION 3.22 LABOR MATTERS.
None of the Parent Borrower or any of its Subsidiaries (i) is
currently suffering any strikes, walkouts, work stoppages or other material
labor difficulty, other than as set forth in Schedule 3.22 hereto or (ii) has
knowledge of any potential or pending strike, walkout or work stoppage.
SECTION 3.23 ACCURACY AND COMPLETENESS OF INFORMATION.
All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of the Parent Borrower or any of its Subsidiaries to
the Administrative Agent or any
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Lender for purposes of or in connection with this Agreement or any other Credit
Document, or any transaction contemplated hereby or thereby, is or will be true
and accurate in all material respects and not incomplete by omitting to state
any material fact necessary to make such information not misleading. There is
no fact now known to the Parent Borrower or any of its Subsidiaries which has,
or could reasonably be expected to have, a Material Adverse Effect which fact
has not been set forth herein, in the financial statements of the Parent
Borrower and its Subsidiaries furnished to the Administrative Agent and/or the
Lenders, or in any certificate, opinion or other written statement made or
furnished by the Parent Borrower to the Administrative Agent and/or the
Lenders.
SECTION 3.24 YEAR 2000 ISSUE.
Except as could not reasonably be expected to have a Material Adverse
Effect, any reprogramming and related testing required to permit the proper
functioning of the Credit Parties' computer systems in and following the year
2000 are completed (that is, the Credit Parties are "Year 2000 Compliant"), and
the cost to the Credit Parties of such reprogramming and testing will not
result in a Default or Event of Default or a Material Adverse Effect. The
computer and management information systems of the Credit Parties and their
Subsidiaries are and, with ordinary course upgrading and maintenance, will
continue for the term of this Agreement to be, adequate for the conduct of its
business.
SECTION 3.25 INTEREST RATE PROTECTION.
The Borrowers have, as of the Closing Date, Hedging Agreements in
place protecting against fluctuations in interest rates which provide for
coverage of not less than fifty percent (50%) of the original principal amount
of the Term Loans for a period of not less than two (2) years.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1 CONDITIONS TO CLOSING DATE AND INITIAL REVOLVING
LOANS, SFG REVOLVING LOANS AND TERM LOANS.
This Agreement shall become effective upon, and the obligation of each
Lender to make the initial Extension of Credit on the Closing Date is subject
to, the satisfaction of the following conditions precedent:
(a) Execution of Agreement. The Administrative Agent shall
have received (i) counterparts of this Agreement, executed by a duly
authorized officer of each party hereto, (ii) for the account of each
Lender, Revolving Notes, SFG Revolving Notes and Term Notes, and for
the account of the Swingline Lender, a Swingline Note and (iii)
counterparts of the Pledge Agreement, in each case conforming to the
requirements of this Agreement and executed by duly authorized
officers of the Credit Parties.
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(b) Authority Documents. The Administrative Agent shall have
received a secretary's certificate substantially in the form of
Schedule 4.1(b) with respect to the following:
(i) Charter Documents. Copies of the articles of
incorporation or other charter documents, as applicable, of
each Credit Party and each corporate general partner of a
Credit Party certified to be true and complete as of a recent
date by the appropriate Governmental Authority of the state
of its incorporation.
(ii) Partnership Agreements; Disclosure Information.
With respect to each Credit Party that is a partnership or
limited partnership, a copy of the partnership agreement of
such Credit Party, together with all amendments thereto,
schedules and any disclosure information, in each case
certified by a general partner of such Credit Party as of the
Closing Date to be true and correct and in force and effect
as of such date.
(iii) Resolutions. Copies of resolutions or
certificate of authorization of the board of directors or
general partner of each Credit Party approving and adopting
the Credit Documents, the transactions contemplated therein
and authorizing execution and delivery thereof, certified by
an officer or general partner of such Credit Party as of the
Closing Date to be true and correct and in force and effect
as of such date.
(iv) Bylaws. A copy of the bylaws of each corporate
Credit Party and each corporate general partner of a Credit
Party certified by an officer of such Credit Party or
corporate general partner as of the Closing Date to be true
and correct and in force and effect as of such date.
(v) Good Standing. Copies of (i) certificates of
good standing, existence or its equivalent with respect to
each Credit Party certified as of a recent date by the
appropriate Governmental Authorities of the state of
incorporation and each other state in which the failure to so
qualify and be in good standing could reasonably be expected
to have a Material Adverse Effect on the business or
operations of the Parent Borrower and its Subsidiaries, taken
as a whole, except for those Subsidiaries required to be so
qualified and in good standing pursuant to the terms of
Section 5.16 following their reorganization or restructure on
or about the Closing Date, and (ii) if available, a
certificate indicating payment of all corporate franchise
taxes certified as of a recent date by the appropriate
governmental taxing authorities.
(vi) Incumbency. An incumbency certificate of each
Credit Party and each corporate general partner of a Credit
Party certified by a secretary or assistant secretary to be
true and correct as of the Closing Date.
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(c) Legal Opinions of Counsel.
(i) The Administrative Agent shall have received an
opinion of legal counsel for the Credit Parties, dated the
Closing Date and addressed to the Administrative Agent and
the Lenders, in form and substance acceptable to the
Administrative Agent.
(ii) The Administrative Agent shall have received an
opinion of Moore & Van Allen, PLLC, dated the Closing Date
and addressed to the Administrative Agent and the Lenders.
(d) Personal Property Collateral. The Administrative Agent
shall have received, in form and substance satisfactory to the
Administrative Agent:
(i) searches of Uniform Commercial Code filings in
the jurisdiction of the chief executive office of each Credit
Party and each jurisdiction where a filing would need to be
made in order to perfect the Administrative Agent's security
interest in the Collateral, copies of the financing
statements on file in such jurisdictions and evidence that no
Liens exist other than Permitted Liens; and
(ii) duly executed UCC financing statements for each
appropriate jurisdiction as is necessary, in the
Administrative Agent's sole discretion, to perfect the
Administrative Agent's security interest in the Collateral;
(e) Liability and Casualty Insurance. The Administrative
Agent shall have received copies of insurance policies or certificates
of insurance evidencing liability and casualty insurance meeting the
requirements set forth herein.
(f) Fees. The Administrative Agent shall have received all
fees, if any, owing pursuant to the Fee Letter and Section 2.7.
(g) Litigation. There shall not exist any pending litigation
or investigation affecting or relating to the Parent Borrower or any
of its Subsidiaries, this Agreement and the other Credit Documents
that in the reasonable judgment of the Administrative Agent could be
expected to have a Material Adverse Effect, that has not been settled,
dismissed, vacated, discharged or terminated prior to the Closing
Date.
(h) Solvency Evidence. The Administrative Agent shall have
received an officer's certificate for the Credit Parties prepared by
the chief financial officer or treasurer of the Parent Borrower as to
the financial condition, solvency and related matters of the Credit
Parties taken as a whole, after giving effect to the initial
borrowings under the Credit Documents, in substantially the form of
Schedule 4.1(h) hereto.
(i) Account Designation Letter. The Administrative Agent
shall have received the executed Account Designation Letter in the
form of Schedule 1.1(a) hereto.
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(j) Corporate Structure. The corporate capital and ownership
structure of the Parent Borrower and its Subsidiaries shall be as
described in Schedule 3.12. The Administrative Agent shall be
satisfied with the management structure, legal structure, voting
control, liquidity and capitalization of the Parent Borrower as of the
Closing Date.
(k) Indenture. The Administrative Agent shall have received a
copy of the Indenture, all material documents executed in connection
therewith and all amendments or supplements thereto, certified by an
officer of the Parent Borrower to be true and correct and in full
force and effect.
(l) Consummation of Merger. The Administrative Agent shall
have received evidence that that the transactions contemplated by the
Merger Agreement have been consummated in accordance with the terms
thereof and the Administrative Agent shall have received a copy of the
Merger Agreement, all material documents executed in connection
therewith and all amendments or supplements thereto, certified by a
Responsible Officer of the Parent Borrower to be true and correct and
in full force and effect.
(m) Government Consent. The Administrative Agent shall have
received evidence that all governmental, shareholder and material
third party consents and approvals necessary in connection with the
transactions contemplated by the Merger Agreement and the financings
and other transactions contemplated hereby have been obtained and all
applicable waiting periods have expired without any action being taken
by any authority that could restrain, prevent or impose any material
adverse conditions on such transactions or that could seek or threaten
any of the foregoing.
(n) Compliance with Laws. The financings and other
transactions contemplated hereby shall be in compliance with all
applicable laws and regulations (including Environmental Laws and all
applicable securities and banking laws, rules and regulations).
(o) Bankruptcy. There shall be no bankruptcy or insolvency
proceedings with respect to the Parent Borrower or any of its
Subsidiaries.
(p) Financial Statements. The Administrative Agent shall have
received copies of the financial statements referred to in Section 3.1
hereof.
(q) Year 2000 Plan. The Administrative Agent shall have
received evidence that the Parent Borrower and its Subsidiaries are
Year 2000 Compliant.
(r) Termination of Existing Indebtedness. All existing
Indebtedness for borrowed money of the Parent Borrower and its
Subsidiaries (other than the Senior Subordinated Notes and the
Indebtedness listed on Schedule 6.1(b)) shall have been repaid in full
with a portion of the proceeds of the initial Loans hereunder and
terminated, and Indebtedness under that certain $1,000,000,000 Amended
and Restated Credit Agreement dated as of May 22, 1998 among Suiza,
First Union, as administrative agent, Bank One, NA (formerly The First
National Bank of Chicago), as syndication agent, and
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the lenders party thereto shall have been repaid in full with the
proceeds of the initial Loans hereunder and such credit agreement
shall have been terminated.
(s) Material Adverse Change. There shall not have occurred a
material adverse change since December 31, 1998 in, and each Lender
shall be satisfied with (such satisfaction to be evidenced by the
delivery and release by such Lender to the Administrative Agent of an
executed signature page to this Agreement), the business, assets,
liabilities (actual or contingent), operations, condition (financial
or otherwise) or prospects of the Parent Borrower and its Subsidiaries
taken as a whole, or in the facts and information regarding such
entities as represented to date.
(t) Officer's Certificates. The Administrative Agent shall
have received a certificate or certificates executed by the chief
financial officer or treasurer of the Parent Borrower on behalf of the
Credit Parties as of the Closing Date stating that (A) the Credit
Parties and each of their Subsidiaries are in compliance with all
existing material financial obligations, (B) all governmental,
shareholder and third party consents and approvals, if any, with
respect to the Credit Documents and the transactions contemplated
thereby have been obtained, (C) no action, suit, investigation or
proceeding is pending or threatened in any court or before any
arbitrator or governmental instrumentality that purports to affect a
Credit Party, any of the Credit Parties' Subsidiaries or any
transaction contemplated by the Credit Documents, if such action,
suit, investigation or proceeding would have or be reasonably expected
to have a Material Adverse Effect, (D) the Credit Party Obligations of
the Subsidiary Borrower (x) comply with Section 4.03 of the Indenture
and attached hereto are calculations demonstrating such compliance and
(y) constitute Senior Indebtedness and/or Refinancing Indebtedness as
such terms are defined in the Indenture, and (E) immediately after
giving effect to this Credit Agreement, the other Credit Documents and
all the transactions contemplated therein to occur on such date, (1)
no Default or Event of Default exists, (2) all representations and
warranties contained herein and in the other Credit Documents are true
and correct in all material respects, and (3) the Credit Parties are
in compliance with each of the financial covenants set forth in
Section 5.9.
(u) Sources and Uses of Funds. The Administrative Agent shall
have received a memorandum detailing the sources and uses of the funds
to be used to consummate the transactions contemplated by this
Agreement and the other Credit Documents and related expenses, in form
and substance reasonably satisfactory to the Administrative Agent.
(v) Additional Matters. All other documents and legal matters
in connection with the transactions contemplated by this Agreement
shall be reasonably satisfactory in form and substance to the
Administrative Agent and its counsel.
SECTION 4.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The obligation of each Lender to make any Extension of Credit
hereunder is subject to the satisfaction of the following conditions precedent
on the date of making such Extension of Credit:
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(a) Representations and Warranties. The representations and
warranties made by the Credit Parties herein, in the Security
Documents or which are contained in any certificate furnished at any
time under or in connection herewith shall be true and correct in all
material respects on and as of the date of such Extension of Credit as
if made on and as of such date (or, if any such representation or
warranty is expressly stated to have been made as of a specific date,
as of such specific date).
(b) No Default or Event of Default. No Default or Event of
Default shall have occurred and be continuing on such date or after
giving effect to the Extension of Credit to be made on such date
unless such Default or Event of Default shall have been waived in
accordance with this Agreement.
(c) Compliance with Commitments. Immediately after giving
effect to the making of any such Extension of Credit (and the
application of the proceeds thereof), (i) the sum of the aggregate
principal amount of outstanding Revolving Loans plus SFG Revolving
Loans plus Swingline Loans plus LOC Obligations shall not exceed the
Revolving Committed Amount, (ii) the LOC Obligations shall not exceed
the LOC Committed Amount and (iii) the Swingline Loans shall not
exceed the Swingline Committed Amount.
(d) Additional Conditions to Revolving Loans and SFG
Revolving Loans. If such Loan is made pursuant to Section 2.1 or
Section 2.2, all conditions set forth in such Sections shall have been
satisfied.
(e) Additional Conditions to Term Loans. If such Loan is made
pursuant to Section 2.3 or Section 2.4, all conditions set forth in
such Sections shall have been satisfied.
(f) Additional Conditions to Swingline Loan. If such Loan is
made pursuant to Section 2.5, all conditions set forth in such Section
shall have been satisfied.
(g) Additional Conditions to Letters of Credit. If such
Extension of Credit is made pursuant to Section 2.6, all conditions
set forth in such Section shall have been satisfied.
Each request for an Extension of Credit and each acceptance by a
Borrower of any such Extension of Credit shall be deemed to constitute a
representation and warranty by such Borrower as of the date of such Extension
of Credit that the applicable conditions in paragraphs (a) through (g) of this
Section have been satisfied.
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ARTICLE V
AFFIRMATIVE COVENANTS
The Parent Borrower hereby covenants and agrees that on the Closing
Date, and thereafter for so long as this Agreement is in effect and until the
Commitments have terminated, no Note remains outstanding and unpaid and the
Credit Party Obligations, together with interest, Commitment Fees and all other
amounts owing to the Administrative Agent or any Lender hereunder, are paid in
full, the Parent Borrower shall, and shall cause each of its Subsidiaries to:
SECTION 5.1 FINANCIAL STATEMENTS.
Furnish to the Administrative Agent and each of the Lenders:
(a) Annual Financial Statements. As soon as available and in
any event within 90 days after the end of each fiscal year of the
Parent Borrower or the Subsidiary Borrower, as applicable:
(i) (A) consolidated statements of income,
stockholders' equity and cash flows of the Parent Borrower
and its Subsidiaries for such fiscal year and (B) the related
consolidated balance sheet of the Parent Borrower and its
Subsidiaries as at the end of such fiscal year, setting forth
in each case in comparative form the corresponding
consolidated figures for the preceding fiscal year, and
accompanied by an opinion thereon of independent certified
public accountants of recognized national standing, which
opinion shall state that such consolidated financial
statements fairly present the consolidated financial
condition and results of operations of the Parent Borrower
and its Subsidiaries, as at the end of, and for, such fiscal
year in accordance with GAAP, and a certificate of such
accountants stating that, in making the examination necessary
for their opinion, they obtained no knowledge, except as
specifically stated, of any Default or Event of Default; and
(ii) until the Subsidiary Borrower is no longer a
Borrower hereunder or until there are no SFG Revolving Loans
or SFG Term Loans outstanding, (A) consolidated statements of
income, stockholders' equity and cash flows of the Subsidiary
Borrower and its Subsidiaries for such fiscal year and (B)
the related consolidated balance sheet of the Subsidiary
Borrower and its Subsidiaries as at the end of such fiscal
year, setting forth in each case in comparative form the
corresponding consolidated figures for the preceding fiscal
year, and accompanied by an opinion thereon of independent
certified public accountants of recognized national standing,
which opinion shall state that such consolidated financial
statements fairly present the consolidated financial
condition and results of operations of the Subsidiary
Borrower and its Subsidiaries, as at the end of, and for,
such fiscal year in accordance with GAAP, and a certificate
of such accountants stating that, in making the examination
necessary for their opinion,
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they obtained no knowledge, except as specifically stated, of
any Default or Event of Default; and
(iii) (A) (x) consolidated statements of income and
cash flows of the Parent Borrower and its Restricted
Subsidiaries and (y) consolidating statements of income of
the Parent Borrower and its directly owned Subsidiaries
combined in significant groups, in each case for such fiscal
year, and (B) (x) the related consolidating balance sheet of
the Parent Borrower and its Restricted Subsidiaries and (y)
the related consolidated balance sheet of the Parent Borrower
and its directly owned Subsidiaries combined in significant
groups, in each case as at the end of such fiscal year,
setting forth in each case (other than consolidating
statements) in comparative form the corresponding
consolidated figures for the preceding fiscal year,
accompanied by a certificate of a Responsible Officer of the
Parent Borrower, which certificate shall state that such
consolidated financial statements fairly present the
consolidated financial condition and results of operations of
the Parent Borrower and its Subsidiaries or of the Parent
Borrower and its Restricted Subsidiaries, as the case may be,
and such consolidating financial statements fairly present
the respective unconsolidated financial condition and results
of operations of the Parent Borrower and each group of such
Subsidiaries, in accordance with GAAP consistently applied,
as at the end of and for such period (subject to normal
year-end audit adjustments); and
(b) Quarterly Financial Statements. As soon as available and
in any event within 45 days after the end of each of the first three
quarterly fiscal periods of each fiscal year of the Parent Borrower or
the Subsidiary Borrower, as applicable:
(i) (A) (x) consolidated statements of income and
cash flows of the Parent Borrower and its Subsidiaries, (y)
consolidated statements of income and cash flows of the
Parent Borrower and its Restricted Subsidiaries, in each case
for such period and for the period from the beginning of the
respective fiscal year to the end of such period, and (z)
consolidating statements of income of the Parent Borrower and
its directly owned Subsidiaries combined in significant
groups for such period, and (B) (x) the related consolidated
and consolidating balance sheet of the Parent Borrower and
its Subsidiaries and (y) the related consolidated balance
sheet of the Parent Borrower and its Restricted Subsidiaries,
in each case as at the end of such period, setting forth in
each case (other than consolidating statements) in
comparative form the corresponding consolidated figures for
the corresponding periods in the preceding fiscal year,
accompanied by a certificate of a Responsible Officer of the
Parent Borrower, which certificate shall state that such
consolidated financial statements fairly present the
consolidated financial condition and results of operations of
the Parent Borrower and its Subsidiaries or of the Parent
Borrower and its Restricted Subsidiaries, as the case may be,
and such consolidating financial statements fairly present
the respective unconsolidated financial condition and results
of operations of the Parent Borrower and each group of such
Subsidiaries, in accordance with GAAP
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consistently applied, as at the end of, and for, such period
(subject to normal year-end audit adjustments); and
(ii) until the Subsidiary Borrower is no longer a
Borrower hereunder or until there are no SFG Revolving Loans
or SFG Term Loans outstanding, (A) (x) consolidated
statements of income and cash flows of the Subsidiary
Borrower and its Subsidiaries, and (y) consolidated
statements of income and cash flows of the Subsidiary
Borrower and its Restricted Subsidiaries, in each case for
such period and for the period from the beginning of the
respective fiscal year to the end of such period, and (B) (x)
the related consolidated balance sheet of the Subsidiary
Borrower and its Subsidiaries and (y) the related
consolidated balance sheet of the Subsidiary Borrower and its
Restricted Subsidiaries, in each case as at the end of such
period, setting forth in each case in comparative form the
corresponding consolidated figures for the corresponding
periods in the preceding fiscal year, accompanied by a
certificate of a Responsible Officer of the Subsidiary
Borrower, which certificate shall state that such
consolidated financial statements fairly present the
consolidated financial condition and results of operations of
the Subsidiary Borrower and its Subsidiaries or of the
Subsidiary Borrower and its Restricted Subsidiaries, as the
case may be, in accordance with GAAP consistently applied, as
at the end of, and for, such period (subject to normal
year-end audit adjustments); and
all such financial statements to be accompanied by a description of, and an
estimation of the effect on the financial statements on account of, a change,
if any, in the application of accounting principles as provided in Section 1.3.
SECTION 5.2 CERTIFICATES; OTHER INFORMATION.
Furnish to the Administrative Agent and each of the Lenders:
(a) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any, that the
Parent Borrower shall have filed with the SEC or any national
securities exchange;
(b) promptly upon mailing thereof to the shareholders of the
Parent Borrower generally, copies of all financial statements, reports
and proxy statements so mailed;
(c) at the time it furnishes each set of financial statements
pursuant to Sections 5.1(a) and 5.1(b) above, a certificate of a
Responsible Officer of the Parent Borrower (i) certifying that (A)
each of the Credit Parties and its Subsidiaries during such period
observed or performed in all material respects all of its covenants
and other agreements, and satisfied in all material respects every
condition contained in this Agreement to be observed, performed or
satisfied by it, and (B) no Default or Event of Default has occurred
and is continuing (or, if any Default or Event of Default has occurred
and is continuing, describing the same in reasonable detail and
describing the action that the Parent Borrower has taken or proposes
to take with respect thereto) and
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(ii) setting forth in reasonable detail the computations necessary to
determine whether the Credit Parties are in compliance with Section 5.9
hereof as of the end of the respective quarterly fiscal period or
fiscal year;
(d) within ninety (90) days after the end of each fiscal year
of the Parent Borrower, a certificate containing information regarding
the amount of all Asset Dispositions that were made during the prior
fiscal year and amounts received in connection with any Recovery Event
during the prior fiscal year; and
(e) from time to time such other information regarding the
financial condition, operations, business or prospects of the Parent
Borrower or any of its Subsidiaries (including, without limitation,
any Plan or Multiemployer Plan and any reports or other information
required to be filed under ERISA) as any Lender or the Administrative
Agent may reasonably request.
SECTION 5.3 PAYMENT OF OBLIGATIONS.
Pay, discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, in accordance with industry
practice (subject, where applicable, to specified grace periods) all of its
material obligations of whatever nature and any additional costs that are
imposed as a result of any failure to so pay, discharge or otherwise satisfy
such obligations, except when the amount or validity of such obligations and
costs is currently being contested in good faith by appropriate proceedings and
reserves, if applicable, in conformity with GAAP with respect thereto have been
provided on the books of the Parent Borrower or its Restricted Subsidiaries, as
the case may be.
SECTION 5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.
(a) Preserve and maintain its legal existence and all of its
material rights, privileges, licenses and franchises (provided that
nothing in this Section 5.4 shall prohibit any transaction expressly
permitted under Section 6.4 hereof).
(b) Pay and discharge all taxes, assessments and governmental
charges or levies imposed on it or on its income or profits or on any
of its assets prior to the date on which penalties attach thereto,
except for any such tax, assessment, charge or levy the payment of
which is being contested in good faith and by proper proceedings and
against which adequate reserves are being maintained.
SECTION 5.5 MAINTENANCE OF PROPERTY; INSURANCE.
(a) Keep all material property used or useful in its business
in good working order and condition (ordinary wear and tear and
obsolescence excepted).
(b) Maintain insurance with financially sound and reputable
insurance companies, and with respect to Property and risks of a
character usually maintained by corporations engaged in the same or
similar business similarly situated, against loss,
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damage and liability of the kinds and in the amounts customarily
maintained by such corporations.
(c) On or before the Closing Date, deliver, to the extent not
previously delivered, to the Administrative Agent certificates of
insurance satisfactory to the Administrative Agent evidencing the
existence of all insurance required to be maintained by the Parent
Borrower and its Restricted Subsidiaries hereunder and setting forth
the respective coverages, limits of liability, carrier, policy number
and period of coverage. Thereafter, each year the Parent Borrower will
deliver to the Administrative Agent certificates of insurance
evidencing that all insurance required to be maintained by the Parent
Borrower and its Restricted Subsidiaries hereunder will be in effect
through the calendar year following the date of such certificates,
subject only to the payment of premiums as they become due.
(d) In case of any material loss, damage to or destruction of
the Property of any Credit Party or any part thereof, such Credit
Party shall promptly give written notice thereof to the Administrative
Agent generally describing the nature and extent of such damage or
destruction. In case of any loss, damage to or destruction of the
Property of any Credit Party or any part thereof which occurs after
the occurrence and during the continuation of an Event of Default,
such Credit Party, whether or not the insurance proceeds, if any,
received on account of such damage or destruction shall be sufficient
for that purpose, at such Credit Party's cost and expense, will at the
option of the Required Lenders, (i) promptly repair or replace the
Property of such Credit Party so lost, damaged or destroyed or (ii)
immediately prepay the Loans with the insurance proceeds received on
account thereof in accordance with Section 2.9(b).
SECTION 5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS;
DISCUSSIONS.
(a) Keep adequate records and books of account in which
complete entries in accordance with GAAP consistently applied and all
Requirements of Law shall be made of all dealings and transactions in
relation to its businesses and activities.
(b) Upon reasonable prior notice, permit representatives of
any Lender or the Administrative Agent, during normal business hours,
to examine, copy and make extracts from its books and records, to
inspect any of its Real Properties, and to discuss its business and
affairs with its officers, all to the extent reasonably requested by
such Lender or the Administrative Agent (as the case may be).
SECTION 5.7 NOTICES.
Give prompt notice in writing to the Administrative Agent (which shall
promptly transmit such notice to each Lender) of:
(a) within five Business Days after any Credit Party knows or
has reason to know thereof, the occurrence of any Default or Event of
Default;
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(b) any default or event of default under any Contractual
Obligation of the Parent Borrower or any of its Restricted
Subsidiaries which could reasonably be expected to have a Material
Adverse Effect;
(c) any legal or arbitral proceedings before any Governmental
Authority and any material development in respect of such legal or
other proceedings affecting the Parent Borrower or any of its
Restricted Subsidiaries, except proceedings that, if adversely
determined, would not (either individually or in the aggregate) have a
Material Adverse Effect;
(d) as soon as possible, and in any event within ten days
after any Credit Party or any of its Restricted Subsidiaries knows or
has reason to believe that any of the events or conditions specified
below with respect to any Plan or Multiemployer Plan has occurred or
exists, a statement signed by a Responsible Officer of the Parent
Borrower or such Credit Party setting forth details respecting such
event or condition and the action, if any, that the Parent Borrower,
any Credit Party or any ERISA Affiliate proposes to take with respect
thereto (and a copy of any report or notice required to be filed with
or given to PBGC by the Parent Borrower, any Credit Party or any ERISA
Affiliate with respect to such event or condition):
(i) any Reportable Event with respect to a Plan, as
to which PBGC has not by regulation waived the requirement of
Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event (provided that a failure to
meet the minimum funding standard of Section 412 of the Code
or Section 302 of ERISA, including, without limitation, the
failure to make on or before its due date a required
installment under Section 412(m) of the Code or Section
302(e) of ERISA, shall be a reportable event regardless of
the issuance of any waivers in accordance with Section 412(d)
of the Code) and any request for a waiver under Section
412(d) of the Code for any Plan;
(ii) the distribution under Section 4041 of ERISA of
a notice of intent to terminate any Plan or any action taken
by any Credit Party or any of its Subsidiaries or any ERISA
Affiliate to terminate any Plan;
(iii) the institution by PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
receipt by any Credit Party or any of its Subsidiaries or any
ERISA Affiliate of a notice from a Multiemployer Plan that
such action has been taken by PBGC with respect to such
Multiemployer Plan;
(iv) the complete or partial withdrawal from a
Multiemployer Plan by any Credit Party or any of its
Subsidiaries or any ERISA Affiliate that results in liability
under Section 4201 or 4204 of ERISA (including the obligation
to satisfy secondary liability as a result of a purchaser
default) or the receipt by any Credit Party or any of its
Subsidiaries or any ERISA Affiliate of notice from a
Multiemployer Plan that it is in reorganization or insolvency
pursuant to
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Section 4241 or 4245 of ERISA or that it intends to terminate
or has terminated under Section 4041A of ERISA;
(v) the institution of a proceeding by a fiduciary
of any Multiemployer Plan against any Credit Party or any of
its Subsidiaries or any ERISA Affiliate to enforce Section
515 of ERISA, which proceeding is not dismissed within 30
days; and
(vi) the adoption of an amendment to any Plan that,
pursuant to Section 401(a)(29) of the Code or Section 307 of
ERISA, would result in the loss of tax-exempt status of the
trust of which such Plan is a part if any Credit Party or any
of its Subsidiaries or any ERISA Affiliate fails to timely
provide security to the Plan in accordance with the
provisions of said Sections;
(e) any assertion of any Environmental Claim by any Person
against, or with respect to the activities of, the Parent Borrower or
any of its Subsidiaries and notice of any alleged violation of or
non-compliance with any Environmental Laws or any permits, licenses or
authorizations, other than any Environmental Claim or alleged
violation that, if adversely determined, would not (either
individually or in the aggregate) have a Material Adverse Effect; and
(f) any other development or event which could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Parent Borrower proposes to take with respect
thereto. In the case of any notice of a Default or Event of Default, the Parent
Borrower shall specify that such notice is a Default or Event of Default notice
on the face thereof.
SECTION 5.8 ENVIRONMENTAL LAWS.
Without limiting the general terms set forth in Section 5.11:
(a) Comply in all material respects with, and ensure
compliance in all material respects by all tenants and subtenants, if
any, with, all applicable Environmental Laws and obtain and comply in
all material respects with and maintain, and ensure that all tenants
and subtenants obtain and comply in all material respects with and
maintain, any and all licenses, approvals, notifications,
registrations or permits required by applicable Environmental Laws
except to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect;
(b) Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions
required under Environmental Laws and promptly comply in all material
respects with all lawful orders and directives of all Governmental
Authorities regarding Environmental Laws except to the extent that the
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same are being contested in good faith by appropriate proceedings and
the pendency of such proceedings could not reasonably be expected to
have a Material Adverse Effect; and
(c) Defend, indemnify and hold harmless the Administrative
Agent and the Lenders, and their respective employees, agents,
officers and directors, from and against any and all claims, demands,
penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown, contingent or
otherwise, arising out of, or in any way relating to the violation of,
noncompliance with or liability under, any Environmental Law
applicable to the operations of the Parent Borrower any of its
Subsidiaries or the Real Properties, or any orders, requirements or
demands of Governmental Authorities related thereto, including,
without limitation, reasonable attorney's and consultant's fees,
investigation and laboratory fees, response costs, court costs and
litigation expenses, except to the extent that any of the foregoing
arise out of the gross negligence or willful misconduct of the party
seeking indemnification therefor. The agreements in this paragraph
shall survive repayment of the Notes and all other amounts payable
hereunder.
SECTION 5.9 FINANCIAL COVENANTS.
Commencing on the day immediately following the Closing Date, the
Parent Borrower shall, and shall cause each of its Restricted Subsidiaries to,
comply with the following financial covenants:
(a) Leverage Ratio. The Leverage Ratio, as of the last day of
each fiscal quarter of the Parent Borrower and its Restricted
Subsidiaries occurring during each of the periods set forth below,
shall be less than or equal to the following:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
Closing Date through and including
December 31, 2001 4.25 to 1.0
January 1, 2002 through and including
December 31, 2002 4.00 to 1.0
January 1, 2003 and thereafter 3.75 to 1.0
</TABLE>
(b) Senior Leverage Ratio. The Senior Leverage Ratio, as of
the last day of each fiscal quarter of the Parent Borrower and its
Restricted Subsidiaries occurring during each of the periods set forth
below, shall be less than or equal to the following:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
Closing Date through and including
December 31, 2001 3.75 to 1.0
January 1, 2002 through and including
December 31, 2002 3.50 to 1.0
January 1, 2003 and thereafter 3.25 to 1.0
</TABLE>
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(c) Interest Coverage Ratio. The Interest Coverage Ratio, as
of the last day of each fiscal quarter of the Parent Borrower and its
Restricted Subsidiaries, shall be greater than or equal to 3.0 to 1.0.
(d) Minimum Consolidated Net Worth. The Consolidated Net
Worth shall at all times be equal to or greater than $940,000,000,
increased on a cumulative basis as of the end of each fiscal quarter
of the Parent Borrower and its Restricted Subsidiaries, commencing
with the fiscal quarter ending March 31, 2000, by an amount equal to
50% of the net income (with no deduction for net losses) of the Parent
Borrower and its Restricted Subsidiaries on a consolidated basis for
the fiscal quarter then ended plus 75% of the amount by which the
"total stockholders equity" of the Parent Borrower is increased as a
result of any public or private offering of ownership interests of the
Parent Borrower after the Closing Date (other than increases to the
extent such increases result from Equity Issuances to, or capital
contributions from, any Affiliate of the Parent Borrower or from an
offering in connection with the acquisition of an Unrestricted
Subsidiary). Promptly upon consummation of each such public or private
offering, the Parent Borrower shall notify the Administrative Agent in
writing of the amount of such increase in total stockholders equity.
SECTION 5.10 OBLIGATIONS REGARDING SUBSIDIARIES; ADDITIONAL
SUBSIDIARY GUARANTORS.
(a) Except as permitted by Section 6.4, the Parent Borrower will, and
will cause each of its Restricted Subsidiaries to take such action from time to
time as shall be necessary to ensure that each of its Subsidiaries remains a
Subsidiary at all times.
(b) The Credit Parties will cause each of their wholly-owned Domestic
Subsidiaries that are Material Subsidiaries, whether newly formed, after
acquired or otherwise existing, to promptly become a Guarantor hereunder by way
of execution of a Joinder Agreement and take such other action as may be
required pursuant to the terms of Section 5.13.
SECTION 5.11 COMPLIANCE WITH LAW.
Each Credit Party will, and will cause each of its Subsidiaries to,
comply with all laws, rules, regulations and orders, and all applicable
restrictions imposed by all Governmental Authorities, applicable to it and its
assets if noncompliance with any such law, rule, regulation, order or
restriction could reasonably be expected to have a Material Adverse Effect.
SECTION 5.12 PLEDGED ASSETS.
(a) Each Credit Party will cause (i) 100% of the Capital
Stock (or, if less, the full amount owned by such Credit Party) of
each of the direct or indirect Material Subsidiaries which are not
Foreign Subsidiaries of such Person and (ii) 65% of the Capital Stock
(or, if less, the full amount owned by such Credit Party) in each of
the First
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Tier Foreign Subsidiaries which are Material Subsidiaries of such
Person, unless otherwise agreed by the Administrative Agent, to be
subject at all times to a first priority, perfected Lien in favor of
the Administrative Agent pursuant to the terms and conditions of the
Security Documents or such other security documents as the
Administrative Agent shall reasonably request; provided, however, that
notwithstanding the foregoing, no Unrestricted Subsidiary shall be
required to pledge the Capital Stock of its Subsidiaries.
(b) Within 30 days after a Credit Party changes the location
of its chief executive office, the Parent Borrower shall notify the
Administrative Agent of such change and shall execute and deliver, or
cause to be executed and delivered, to the Administrative Agent such
UCC financing statements and other documentation as the Administrative
Agent may reasonably request.
SECTION 5.13 ADDITIONAL CREDIT PARTIES.
As soon as practicable and in any event within 30 days after any
Person (whether newly formed, acquired or otherwise) becomes a Material
Subsidiary of any Credit Party, the Parent Borrower shall provide the
Administrative Agent with written notice thereof setting forth information in
reasonable detail describing all of the assets of such Person and shall (a) if
such Person is a wholly-owned Domestic Subsidiary of a Credit Party, cause such
Person to execute a Joinder Agreement in substantially the same form as Exhibit
5.13, (b) cause 100% (if such Person is a Domestic Subsidiary of a Credit
Party) or, unless otherwise agreed by the Administrative Agent, 65% (if such
Person is a First Tier Foreign Subsidiary of a Credit Party) of the Capital
Stock of such Person owned by a Credit Party to be delivered to the
Administrative Agent (together with undated stock powers signed in blank
(unless, with respect to a First Tier Foreign Subsidiary, such stock powers are
deemed unnecessary by the Administrative Agent in its reasonable discretion
under the law of the jurisdiction of incorporation of such Person)) and pledged
to the Administrative Agent pursuant to an appropriate pledge agreement(s) in
substantially the form of the Pledge Agreement or joinder to the Pledge
Agreement and otherwise in form acceptable to the Administrative Agent and (c)
deliver such other documentation as the Administrative Agent may reasonably
request in connection with the foregoing, including, without limitation,
appropriate UCC-1 financing statements, certified resolutions and other
organizational and authorizing documents of such Person and favorable opinions
of counsel to such Person (which shall cover, among other things, the legality,
validity, binding effect and enforceability of the documentation referred to
above and the perfection of the Administrative Agent's liens thereunder).
SECTION 5.14 YEAR 2000 COMPLIANCE.
The Credit Parties will promptly notify the Administrative Agent in
the event any Credit Party discovers or determines that any computer
application (including those of its suppliers, vendors and customers) that is
material to its or any of its Subsidiaries' business and operations will not be
Year 2000 Compliant, except to the extent that such failure could not
reasonably be expected to have a Material Adverse Effect.
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SECTION 5.15 JOINDER OF SUBSIDIARY BORROWER.
Upon the payment in full or defeasance (it being agreed that, upon the
Administrative Agent's request, the Subsidiary Borrower will defease, subject
to the provisions of the Indenture, the remaining portion of the Senior
Subordinated Notes pursuant to Section 8.02 of the Indenture promptly after
there shall be not greater than $10,000,000 of Senior Subordinated Notes at any
time outstanding) of the Indebtedness evidenced by Senior Subordinated Notes,
the Subsidiary Borrower shall (a) immediately notify the Administrative Agent
in writing that such Indebtedness has been paid in full and all agreements and
other documents executed in connection therewith (including the Indenture and
the Senior Subordinated Notes) have been terminated or that all measures
necessary to defease the remaining Senior Subordinated Notes pursuant to
Article 8 of the Indenture shall have been completed, (b) have the right to
request that (i) the Revolving Loan facility and the SFG Revolving Loan
facility be combined into one revolving loan facility and (ii) the Term A Loan
facility and the SFG Term Loan facility be combined into one term loan
facility, (c) execute a Joinder Agreement or similar agreement, in form and
substance satisfactory to the Administrative Agent, whereby the Subsidiary
Borrower will agree to guarantee all Credit Party Obligations which are not
Joint and Several Obligations and (d) execute such amendments and other
documentation as reasonably requested by the Administrative Agent in order to
combine the facilities in accordance with subsection (c), such amendments and
other documentation to be in form and substance satisfactory to each of the
parties hereto.
SECTION 5.16 GOOD STANDING; POST-CLOSING QUALIFICATION.
Within 30 days after the Closing Date, the Credit Parties will cause
each of their Subsidiaries that are restructured or reorganized on or about the
Closing Date to be duly qualified to conduct business and in good standing
under the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification except to
the extent that the failure to so qualify or be in good standing could not, in
the aggregate, reasonably be expected to have a Material Adverse Effect.
ARTICLE VI
NEGATIVE COVENANTS
The Parent Borrower hereby covenants and agrees that on the Closing
Date, and thereafter for so long as this Agreement is in effect and until the
Commitments have terminated, no Note remains outstanding and unpaid and the
Credit Party Obligations, together with interest, Commitment Fees and all other
amounts owing to the Administrative Agent or any Lender hereunder, are paid in
full, the Parent Borrower shall, and shall cause each of its Subsidiaries, to
act in accordance with the following:
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SECTION 6.1 INDEBTEDNESS.
The Parent Borrower will not, nor will it permit any Restricted
Subsidiary to, contract, create, incur, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness arising or existing under this Agreement and
the other Credit Documents;
(b) Indebtedness of the Parent Borrower and its Restricted
Subsidiaries existing as of the Closing Date as referenced in the
financial statements referenced in Section 3.1 (and set out more
specifically in Schedule 6.1(b)) hereto and renewals, refinancings or
extensions thereof in a principal amount not in excess of that
outstanding as of the date of such renewal, refinancing or extension;
(c) Indebtedness (including Capital Lease Obligations)
incurred to finance the purchase of equipment, and other Capital Lease
Obligations, not to exceed $100,000,000 in the aggregate outstanding
at any time; provided that (i) such Indebtedness when incurred shall
not exceed the purchase price or cost of construction of such asset,
(ii) no such Indebtedness shall be refinanced for a principal amount
in excess of the principal balance outstanding thereon at the time of
such refinancing and (iii) until the Subsidiary Borrower guarantees
all Credit Party Obligations which are not Joint and Several
Obligations in accordance with the terms of Section 5.15, the
aggregate amount of such Indebtedness incurred by the Subsidiary
Borrower shall not exceed $15,000,000;
(d) intercompany Indebtedness of the Restricted Subsidiaries
of the Parent Borrower to the Parent Borrower or to other Restricted
Subsidiaries of the Parent Borrower or of the Parent Borrower to any
of its Restricted Subsidiaries;
(e) Indebtedness evidenced by the Senior Subordinated Notes
in an aggregate amount not to exceed $130,800,000;
(f) obligations in connection with any Permitted Receivables
Financing, to the extent such obligations constitute Indebtedness;
(g) additional Indebtedness of the Parent Borrower and its
Restricted Subsidiaries (other than the Subsidiary Borrower) up to but
not exceeding $100,000,000 at any one time outstanding;
(h) Indebtedness of a Restricted Subsidiary consisting of
tax-advantaged industrial revenue bond, industrial development bond or
other similar financings assumed (or taken subject to) in connection
with (but not incurred in connection with or in anticipation of) a
Permitted Acquisition; and
(i) Indebtedness in respect of Hedging Agreements to the
extent permitted hereunder.
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SECTION 6.2 LIENS.
The Parent Borrower will not, nor will it permit any Restricted
Subsidiary to, contract, create, incur, assume or permit to exist any Lien with
respect to any of its assets, whether now owned or hereafter acquired, except
for Permitted Liens.
SECTION 6.3 NATURE OF BUSINESS.
Neither the Parent Borrower nor any of its Restricted Subsidiaries
will engage to any substantial extent in any line or lines of business activity
other than operations involved in the processing or distribution of dairy
products or the lines of business conducted by the Parent Borrower or any of
its Restricted Subsidiaries as of the Closing Date or which are related
thereto.
SECTION 6.4 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS,
ETC.
The Parent Borrower will not, nor will it permit any Restricted
Subsidiary to,
(a) enter into any transaction of merger or consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution);
(b) acquire any business or assets from, or Capital Stock of,
or be a party to any acquisition of, any Person except:
(i) for purchases of inventory and other assets to be
sold or used in the ordinary course of business;
(ii) Investments permitted under Section 6.5 hereof;
and
(iii) Permitted Acquisitions;
(c) convey, sell, lease, transfer or otherwise dispose of, in
one transaction or a series of transactions, any part of its business
or assets, whether now owned or hereafter acquired (including, without
limitation, receivables and leasehold interests), but excluding:
(i) any Excluded Disposition;
(ii) obsolete or worn-out Property, tools or
equipment no longer used or useful in its business (other
than any Excluded Disposition) or real Property no longer
used or useful in its business;
(iii) any sale, lease or transfer of assets from a
Credit Party to another Credit Party;
(iv) any sale of Transferred Assets by such Person
to a Receivables Financier in connection with a Permitted
Receivables Financing; and
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(v) other assets so long as the aggregate amount
thereof sold or otherwise disposed of in any single fiscal
year by the Parent Borrower and its Restricted Subsidiaries
shall not have a book value in excess of ten percent of the
book value of the total assets of the Parent Borrower and its
Restricted Subsidiaries owned on the first day of such fiscal
year;
provided, that in each case with respect to subsections (v) and (vi)
above at least 85% of the consideration received therefor by the
Parent Borrower or any such Restricted Subsidiary is in the form of
cash or Cash Equivalents; and
(d) Notwithstanding the foregoing provisions of this Section
6.4, so long as no Default or Event of Default shall have occurred and
be continuing, and after giving effect to any of the succeeding
transactions, no Default or Event of Default would exist hereunder and
so long as the Liens created under the Security Documents continue to
be in effect:
(i) any Restricted Subsidiary of the Parent Borrower
may be merged or consolidated with or into: (A) the Parent
Borrower if the Parent Borrower shall be the continuing or
surviving corporation or (B) any other Subsidiary (so long as
such surviving Subsidiary is either (x) a Credit Party or (y)
an Additional Credit Party);
(ii) any Restricted Subsidiary of the Parent
Borrower may sell, lease, transfer or otherwise dispose of
any or all of its assets (upon voluntary liquidation or
otherwise) to the Parent Borrower or a Restricted Subsidiary
of the Parent Borrower; and
(iii) any Unrestricted Subsidiary may be sold,
liquidated, wound up or dissolved, or may sell, lease,
transfer or otherwise dispose of any or all of its assets.
SECTION 6.5 ADVANCES, INVESTMENTS AND LOANS.
The Parent Borrower will not, nor will it permit any Restricted
Subsidiary to, lend money or extend credit or make advances to any Person, or
purchase or acquire any stock, obligations or securities of, or any other
interest in, or make any capital contribution to, any Person except for
Permitted Investments.
SECTION 6.6 TRANSACTIONS WITH AFFILIATES.
Except as expressly permitted by this Agreement, the Parent Borrower
will not, nor will it permit any of its Subsidiaries to, directly or
indirectly: (a) make any investment in an Affiliate other than Permitted
Investments; (b) transfer, sell, lease, assign or otherwise dispose of any
assets to an Affiliate; (c) merge into or consolidate with or purchase or
acquire assets from an Affiliate other than Permitted Acquisitions; or (d)
enter into any other transaction directly or
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indirectly with or for the benefit of an Affiliate (including, without
limitation, guarantees and assumptions of obligations of an Affiliate); provided
that (i) any Affiliate who is an individual may serve as a director, officer or
employee of the Parent Borrower or any of its Subsidiaries and receive
reasonable compensation for his or her services in such capacity and (ii) the
Parent Borrower and its Subsidiaries may enter into transactions (other than
extensions of credit by the Parent Borrower or any of its Subsidiaries to an
Affiliate) if the monetary or business consideration arising therefrom would be
substantially as advantageous to the Parent Borrower and its Restricted
Subsidiaries as the monetary or business consideration that would be obtained in
a comparable transaction with a Person not an Affiliate.
SECTION 6.7 OWNERSHIP OF SUBSIDIARIES; RESTRICTIONS.
The Parent Borrower will not, nor will it permit any Subsidiary to,
create, form or acquire any Subsidiaries, except for (a) wholly-owned Domestic
Subsidiaries with assets of $100,000 or more (other than a Receivables
Financing SPC) which are joined as Additional Credit Parties in accordance with
the terms hereof, (b) other Domestic Subsidiaries which are Restricted
Subsidiaries, (c) Foreign Subsidiaries or (d) Subsidiaries designated by the
Parent Borrower as Unrestricted Subsidiaries. The Parent Borrower will not, nor
will it permit its Restricted Subsidiaries to, sell, transfer, pledge or
otherwise dispose of any Capital Stock or other equity interests in any of its
Restricted Subsidiaries, nor will it permit any of its Restricted Subsidiaries
to issue, sell, transfer, pledge or otherwise dispose of any of its Capital
Stock or other equity interests, except in a transaction permitted by Section
6.4.
SECTION 6.8 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS; MATERIAL
CONTRACTS.
The Parent Borrower will not, nor will it permit any of its
Subsidiaries to, change its fiscal year except in the event that any such
change could not reasonably be expected to have a Material Adverse Effect. The
Parent Borrower will not, nor will it permit any Subsidiary to, amend, modify
or change its articles of incorporation (or corporate charter or other similar
organizational document) or bylaws (or other similar document) in any manner
that could reasonably be expected to have a Material Adverse Effect without the
prior written consent of the Required Lenders. The Parent Borrower will not,
nor will it permit any of its Subsidiaries to, without the prior written
consent of the Administrative Agent, amend, modify, cancel or terminate or fail
to renew or extend or permit the amendment, modification, cancellation or
termination of any of the Material Contracts, except in the event that such
amendments, modifications, cancellations or terminations could not reasonably
be expected to have a Material Adverse Effect.
SECTION 6.9 LIMITATION ON ACTIONS.
(a) The Parent Borrower will not, nor will it permit any
Restricted Subsidiary to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any such Person to (i) pay dividends or
make any other distributions to any Credit Party on its Capital Stock
or with respect to any other interest or participation in, or measured
by, its profits, (ii) pay any Indebtedness or other obligation owed to
any Credit Party, (iii) make loans or advances to any Credit
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Party, (iv) sell, lease or transfer any of its properties or assets to
any Credit Party, or (v) act as a Guarantor and pledge its assets
pursuant to the Credit Documents or any renewals, refinancings,
exchanges, refundings or extension thereof, except (in respect of any
of the matters referred to in clauses (i)-(v) above) for such
encumbrances or restrictions existing under or by reason of (A) this
Agreement and the other Credit Documents, (B) applicable law, (C) any
document or instrument governing Indebtedness incurred pursuant to
Section 6.1(c), provided that any such restriction contained therein
relates only to the asset or assets constructed or acquired in
connection therewith, (D) customary restrictions and conditions
contained in agreements relating to the sale of a Subsidiary or assets
pending such sale, provided such restrictions and conditions apply only
to the Subsidiary or assets that are to be sold and such sale is
permitted hereunder, (E) restrictions or conditions imposed by any
agreement relating to secured Indebtedness permitted by this Agreement
if such restrictions or conditions apply only to the assets securing
such Indebtedness, (F) customary provisions in leases and other
contracts restricting the assignment thereof, (G) restrictions
contained in documents executed in connection with any Permitted
Receivables Financing, (H) any Permitted Lien or any document or
instrument governing any Permitted Lien, provided that any such
restriction contained therein relates only to the asset or assets
subject to such Permitted Lien, (I) restrictions or conditions existing
as a result of the issuance of preferred stock by a Subsidiary pursuant
to warrants outstanding as of the Closing Date for the acquisition
thereof, (J) restrictions set forth in the Amended and Restated
Operating Agreement of Land-O-Sun Dairies, L.L.C., a Delaware limited
liability company with respect to the terms and conditions of the LOS
Preferred Member Interests, and (K) any indenture agreement, instrument
or other arrangement relating to the assets or business of any
Subsidiary and existing prior to the consummation of the Permitted
Acquisition in which such Subsidiary was acquired.
(b) The Parent Borrower will not, nor will it permit any
Restricted Subsidiary to, enter into, assume or become subject to any
agreement prohibiting or otherwise restricting the creation or
assumption of any Lien upon its properties or assets, whether now
owned or hereafter acquired, or requiring the grant of any security
for such obligation if security is given for some other obligation
except (i) pursuant to this Agreement and the other Credit Documents,
(ii) pursuant to applicable law, (iii) pursuant to any document or
instrument governing Indebtedness incurred pursuant to Section 6.1(c),
provided that in the case of Section 6.1(c) any such restriction
contained therein relates only to the asset or assets constructed or
acquired in connection therewith, (iv) customary restrictions and
conditions contained in agreements relating to the sale of a
Subsidiary or assets pending such sale, provided such restrictions and
conditions apply only to the Subsidiary or assets that are to be sold
and such sale is permitted hereunder, (v) restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by
this Agreement if such restrictions or conditions apply only to the
assets securing such Indebtedness, (vi) restrictions or conditions as
the result of the issuance of preferred stock by a Subsidiary pursuant
to warrants outstanding as of the Closing Date for the acquisition
thereof, (vii) customary provisions in leases and other contracts
restricting the assignment thereof, (viii) pursuant to the documents
executed in connection with any Permitted Receivables Financing (but
only to the extent that the
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related prohibitions against other encumbrances pertain to the
applicable Transferred Assets actually sold, contributed, financed or
otherwise conveyed or pledged pursuant to such Permitted Receivables
Financing), (ix) restrictions in any document or instrument governing
any Permitted Lien, provided that any such restriction contained
therein relates only to the asset or assets subject to such Permitted
Lien, (x) restrictions set forth in the Amended and Restated Operating
Agreement of Land-O-Sun Dairies, L.L.C., a Delaware limited liability
company, with respect to the terms and conditions of the LOS Preferred
Member Interests, and (xi) any indenture agreement, instrument or other
arrangement relating to the assets or business of any Subsidiary and
existing prior to the consummation of the Permitted Acquisition in
which such Subsidiary was acquired.
SECTION 6.10 RESTRICTED PAYMENTS.
The Parent Borrower will not, nor will it permit any Subsidiary to,
directly or indirectly, declare, order, make or set apart any sum for or pay
any Restricted Payment, except (a) to make dividends payable solely in the same
class of Capital Stock of such Person, (b) to make dividends or other
distributions payable to any Credit Party (directly or indirectly through
Subsidiaries), (c) as permitted by Section 6.11, (d) to make dividends or
repurchases on or before the Closing Date in order to consummate the
transactions contemplated by the Credit Documents, (e) to make dividends to or
repurchases from the Parent Borrower or the parent of such Subsidiary (provided
that such parent company is a Restricted Subsidiary) the proceeds of which
shall be used to pay taxes that are then due and payable or to retire
outstanding Indebtedness of such Person, (f) to make dividends to holders of
the Capital Stock of the Parent Borrower the proceeds of which shall be used to
pay taxes that are then due and payable and (g) to make other dividends,
provided that, after giving effect to such dividends on a Pro Forma Basis, no
Default or Event of Default shall have occurred and or be continuing or be
directly or indirectly caused as a result thereof.
SECTION 6.11 PREPAYMENTS OF INDEBTEDNESS, ETC.
(a) The Parent Borrower will not, nor will it permit the
Subsidiary Borrower to, amend or modify (or permit the amendment or
modification of) any of the terms of the Senior Subordinated Notes if
such amendment or modification would add or change any terms in a
manner adverse to the issuer of such Indebtedness, or shorten the
final maturity or average life to maturity or require any payment to
be made sooner than originally scheduled or increase the interest rate
applicable thereto or change any subordination provision thereof;
provided, however, so long as no Default or Event of Default has
occurred and is continuing or would result therefrom, the Subsidiary
Borrower shall be entitled to prepay the Senior Subordinated Notes
upon a Change of Control (as defined in the Indenture) in accordance
with the terms of Section 4.08 of the Indenture.
(b) The Parent Borrower will furnish to the Administrative
Agent a copy of each modification, supplement or waiver of any
provisions of any agreement, instrument or other document evidencing
or relating to the charter or bylaws of the Parent Borrower or any of
its Subsidiaries promptly upon the effectiveness thereof (and the
Administrative Agent will promptly furnish a copy thereof to each
Lender).
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SECTION 6.12 SALE LEASEBACKS.
The Parent Borrower will not, nor will it permit any Subsidiary to,
directly or indirectly, become or remain liable as lessee or as guarantor or
other surety with respect to any lease, whether an operating lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired in excess of $50,000,000 in the aggregate on an annual
basis, (a) which the Parent Borrower or any Subsidiary has sold or transferred
or is to sell or transfer to a Person which is not the Parent Borrower or any
Subsidiary or (b) which the Parent Borrower or any Subsidiary intends to use
for substantially the same purpose as any other property which has been sold or
is to be sold or transferred by the Parent Borrower or any Subsidiary to
another Person which is not the Parent Borrower or any Subsidiary in connection
with such lease.
SECTION 6.13 USE OF PROCEEDS.
The Borrowers will not use the proceeds of the Loans and Letters of
Credit in a manner inconsistent with the uses permitted under Section 3.11
hereof.
SECTION 6.14 DESIGNATED SENIOR INDEBTEDNESS.
Other than the Indebtedness incurred by the Subsidiary Borrower
hereunder, the Subsidiary Borrower will not incur any Indebtedness that will be
classified as Designated Senior Indebtedness (as defined in the Indenture) or
designate any of its existing Indebtedness as Designated Senior Indebtedness.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Any Borrower shall fail to pay any principal on any Note
when due in accordance with the terms thereof or hereof; or the Parent
Borrower shall fail to reimburse the Issuing Lender for any LOC
Obligations when due in accordance with the terms hereof; or any
Borrower shall fail to pay any interest on any Note or any fee or
other amount payable hereunder when due in accordance with the terms
thereof or hereof and such failure shall continue unremedied for three
(3) Business Days (or any Guarantor shall fail to pay on the Guaranty
in respect of any of the foregoing or in respect of any other Guaranty
Obligations thereunder); or
(b) Any representation or warranty made or deemed made
herein, in the Security Documents or in any of the other Credit
Documents or which is contained in any
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certificate, document or financial or other statement furnished at any
time under or in connection with this Agreement shall prove to have
been incorrect, false or misleading in any material respect on or as of
the date made or deemed made; or
(c) (i) Any Credit Party shall fail to perform, comply with
or observe any term, covenant or agreement applicable to it contained
in Sections 5.4(a), 5.7(a) or 5.9 or Article VI hereof; or (ii) any
Credit Party shall fail to comply with any other covenant, contained
in this Credit Agreement or the other Credit Documents or any other
agreement, document or instrument among any Credit Party, the
Administrative Agent and the Lenders or executed by any Credit Party
in favor of the Administrative Agent or the Lenders (other than as
described in Sections 7.1(a) or 7.1(c)(i) above), and in the event
such breach or failure to comply is capable of cure, is not cured
within thirty (30) days of its occurrence; or
(d) The Parent Borrower or any of its Restricted Subsidiaries
shall (i) default in any payment of principal of or interest on any
Indebtedness (other than the Notes) in a principal amount outstanding
of at least $30,000,000 in the aggregate for the Parent Borrower and
any of its Restricted Subsidiaries beyond the period of grace (not to
exceed 30 days), if any, provided in the instrument or agreement under
which such Indebtedness was created; or (ii) default in the observance
or performance of any other agreement or condition relating to any
Indebtedness in a principal amount outstanding of at least $30,000,000
in the aggregate for the Parent Borrower and its Restricted
Subsidiaries or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Indebtedness (or
a trustee or agent on behalf of such holder or holders or beneficiary
or beneficiaries) to cause, with the giving of notice if required,
such Indebtedness to become due prior to its stated maturity; or
(e) (i) The Parent Borrower or any of its Restricted
Subsidiaries shall commence any case, proceeding or other action (A)
under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief
of debtors, seeking to have an order for relief entered with respect
to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any
substantial part of its assets, or the Parent Borrower or any
Restricted Subsidiary shall make a general assignment for the benefit
of its creditors; or (ii) there shall be commenced against the Parent
Borrower or any Restricted Subsidiary any case, proceeding or other
action of a nature referred to in clause (i) above which (A) results
in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a
period of 60 days; or (iii) there shall be commenced against the
Parent Borrower or any Restricted Subsidiary any case, proceeding or
other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of
its assets which results in the entry of an order for any such relief
which shall not have
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been vacated, discharged, or stayed or bonded pending appeal within 60
days from the entry thereof; or (iv) the Parent Borrower or any
Restricted Subsidiary shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in clause (i), (ii), or (iii) above; or (v) the Parent
Borrower or any Restricted Subsidiary shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as
they become due; or
(f) One or more judgments or decrees shall be entered against
the Parent Borrower or any of its Restricted Subsidiaries involving in
the aggregate a liability (to the extent not paid when due or covered
by insurance) of $30,000,000 or more and all such judgments or decrees
shall not have been paid and satisfied, vacated, discharged, stayed or
bonded pending appeal within 30 days from the entry thereof; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Code) involving any Plan, (ii) any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan or any Lien in favor of
the PBGC or a Plan (other than a Permitted Lien) shall arise on the
assets of the Parent Borrower, any of its Restricted Subsidiaries or
any Commonly Controlled Entity, (iii) a Reportable Event shall occur
with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a Trustee is, in the
reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of
ERISA, (v) the Parent Borrower, any of its Restricted Subsidiaries or
any Commonly Controlled Entity shall, or in the reasonable opinion of
the Required Lenders is likely to, incur any liability in connection
with a withdrawal from, or the Insolvency or Reorganization of, any
Multiemployer Plan or (vi) any other similar event or condition shall
occur or exist with respect to a Plan; and in each case in clauses (i)
through (vi) above, such event or condition, together with all other
such events or conditions, if any, could have a Material Adverse
Effect; or
(h) A reasonable basis shall exist for the assertion against
the Parent Borrower or any of its Subsidiaries, or any predecessor in
interest of the Parent Borrower or any of its Subsidiaries, of (or
there shall have been asserted against the Parent Borrower or any of
its Subsidiaries) an Environmental Claim that, in the judgment of the
Required Lenders, is reasonably likely to be determined adversely to
the Parent Borrower or any of its Subsidiaries, and the amount thereof
(either individually or in the aggregate) is reasonably likely to have
a Material Adverse Effect (insofar as such amount is payable by the
Parent Borrower or any of its Subsidiaries but after deducting any
portion thereof that is reasonably expected to be paid by other
creditworthy Persons jointly and severally liable therefor); or
(i) A Change of Control shall occur; or
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(j) The Guaranty or any provision thereof shall cease to be
in full force and effect or any Guarantor or any Person acting by or
on behalf of any Guarantor shall deny or disaffirm any Guarantor's
obligations under the Guaranty; or
(k) Any other Credit Document shall fail to be in full force
and effect or to give the Administrative Agent and/or the Lenders the
security interests, liens, rights, powers and privileges purported to
be created thereby (except as such documents may be terminated or no
longer in force and effect in accordance with the terms thereof, other
than those indemnities and provisions which by their terms shall
survive); or
(l) There shall occur and be continuing any Event of Default
under and as defined in the Indenture or any other document evidencing
the Senior Subordinated Notes or any of the Credit Party Obligations
for any reason shall cease to be designated as senior indebtedness
thereunder.
SECTION 7.2 ACCELERATION; REMEDIES.
Upon the occurrence of an Event of Default, then, and in any such
event, (a) if such event is an Event of Default specified in Section 7.1(e)
above, automatically the Commitments shall immediately terminate and the Loans
(with accrued interest thereon), and all other amounts under the Credit
Documents (including without limitation the maximum amount of all contingent
liabilities under Letters of Credit) shall immediately become due and payable,
the Administrative Agent shall have the right to enforce any and all other
rights and interests created and existing under the Credit Documents,
including, without limitation, all rights and remedies existing under the
Security Documents, all rights and remedies against a Guarantor and all rights
of set-off, and the Administrative Agent shall have the right to enforce any
and all other rights and remedies of a creditor under applicable law, and (b)
if such event is any other Event of Default, with the written consent of the
Required Lenders, the Administrative Agent may, or upon the written request of
the Required Lenders, the Administrative Agent shall, by notice to the
Borrowers, take any or all of the following actions: (i) declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; (ii) declare the Loans (with accrued interest thereon)
and all other amounts owing under this Agreement and the Notes to be due and
payable forthwith and direct the Borrowers to pay to the Administrative Agent
cash collateral as security for the LOC Obligations for subsequent drawings
under then outstanding Letters of Credit in an amount equal to the maximum
amount of which may be drawn under Letters of Credit then outstanding,
whereupon the same shall immediately become due and payable; (iii) enforce any
and all other rights and interests created and existing under the Credit
Documents, including, without limitation, all rights and remedies existing
under the Security Documents, all rights and remedies against a Guarantor and
all rights of set-off; and (iv) enforce any and all other rights and remedies
of a creditor under applicable law. Except as expressly provided above in this
Section 7.2, presentment, demand, protest and all other notices of any kind are
hereby expressly waived.
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ARTICLE VIII
THE AGENT
SECTION 8.1 APPOINTMENT.
Each Lender hereby irrevocably designates and appoints First Union
National Bank as the Administrative Agent of such Lender under this Agreement,
and each such Lender irrevocably authorizes First Union National Bank, as the
Administrative Agent for such Lender, to take such action on its behalf under
the provisions of this Agreement and to exercise such powers and perform such
duties as are expressly delegated to the Administrative Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent.
SECTION 8.2 DELEGATION OF DUTIES.
The Administrative Agent may execute any of its duties under this
Agreement by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care. Without
limiting the foregoing, the Administrative Agent may appoint one of its
Affiliates as its agent to perform the functions of the Administrative Agent
hereunder relating to the advancing of funds to the Borrower and distribution
of funds to the Lenders and to perform such other related functions of the
Administrative Agent hereunder as are reasonably incidental to such functions.
SECTION 8.3 EXCULPATORY PROVISIONS.
Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement (except for its or such Person's own gross
negligence or willful misconduct) or (ii) responsible in any manner to any of
the Lenders for any recitals, statements, representations or warranties made by
any Credit Party or any officer thereof contained in this Agreement or in any
certificate, report, statement or other document referred to or provided for
in, or received by the Administrative Agent under or in connection with, this
Agreement or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of any of the Credit Documents or for any failure
of any Credit Party to perform its obligations hereunder or thereunder. The
Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance by the Credit
Parties of any of the agreements contained in, or conditions of, this
Agreement, or to inspect the properties, books or records of the Credit
Parties.
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SECTION 8.4 RELIANCE BY ADMINISTRATIVE AGENT.
The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation believed
by it in good faith to be genuine and correct and to have been signed, sent or
made by the proper Person or Persons and upon advice and statements of legal
counsel (including, without limitation, counsel to the Credit Parties),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless (a) a written notice of assignment, negotiation
or transfer thereof shall have been filed with the Administrative Agent and (b)
the Administrative Agent shall have received the written agreement of such
assignee to be bound hereby as fully and to the same extent as if such assignee
were an original Lender party hereto, in each case in form satisfactory to the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
any of the Credit Documents in accordance with a request of the Required
Lenders or all of the Lenders, as may be required under this Agreement, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders and all future holders of the Notes.
SECTION 8.5 NOTICE OF DEFAULT.
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless
the Administrative Agent has received written notice from a Lender or a
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event
that the Administrative Agent receives such a notice, the Administrative Agent
shall give prompt notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided, however, that unless and
until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders except
to the extent that this Credit Agreement expressly requires that such action be
taken, or not taken, only with the consent or upon the authorization of the
Required Lenders, or all of the Lenders, as the case may be.
SECTION 8.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER
LENDERS.
Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or affiliates has made any representation or warranty to it and that no act by
the Administrative Agent hereinafter taken, including any review of the affairs
of the Credit Parties, shall be deemed to constitute any representation or
warranty by the Administrative Agent to any Lender. Each Lender represents to
the
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Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrowers and made its own decision to
make its Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon the
Administrative 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 analysis, appraisals and decisions in taking or not taking action under
this Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of the Parent Borrower. Except for notices, reports and
other documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Credit Parties which may come
into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates.
SECTION 8.7 INDEMNIFICATION.
The Lenders agree to indemnify the Administrative Agent in its
capacity hereunder (to the extent not reimbursed by the Borrowers and without
limiting the obligation of the Borrowers to do so), ratably according to their
respective Commitment Percentages in effect on the date on which
indemnification is sought under this Section, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Notes) be imposed on, incurred by or asserted against the Administrative Agent
in any way relating to or arising out of any Credit Document or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing;
provided, however, that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements to the extent resulting from
the Administrative Agent's gross negligence or willful misconduct, as
determined by a court of competent jurisdiction. The agreements in this Section
8.7 shall survive the termination of this Agreement and payment of the Notes
and all other amounts payable hereunder.
SECTION 8.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
The Administrative Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrowers
as though the Administrative Agent were not the Administrative Agent hereunder.
With respect to its Loans made or renewed by it and any Note issued to it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any Lender and may exercise the same as though it were not the
Administrative Agent, and the terms "Lender" and "Lenders" shall include the
Administrative Agent in its individual capacity.
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SECTION 8.9 SUCCESSOR ADMINISTRATIVE AGENT.
The Administrative Agent may resign as Administrative Agent upon 30
days' prior notice to the Borrowers and the Lenders. If the Administrative
Agent shall resign as Administrative Agent under this Agreement and the Notes,
then the Required Lenders shall appoint from among the Lenders a successor
agent for the Lenders, which successor agent shall be approved by the
Borrowers, so long as no Default or Event of Default has occurred and is
continuing, whereupon such successor agent shall succeed to the rights, powers
and duties of the Administrative Agent, and the term "Administrative Agent"
shall mean such successor agent effective upon such appointment and approval,
and the former Administrative Agent's rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Notes. If no successor Administrative
Agent has accepted appointment as Administrative Agent within sixty (60) days
after the retiring Administrative Agent's giving notice of resignation, the
retiring Administrative Agent's resignation shall nevertheless become effective
and the Lenders shall perform all duties of the Administrative Agent hereunder
until such time, if any, as the Required Lenders appoint a successor
Administrative Agent as provided for above. After any retiring Administrative
Agent's resignation as Administrative Agent, the provisions of this Section 8.9
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement.
SECTION 8.10 RESPONSIBILITY OF OTHER AGENTS.
The Syndication Agent, the co-documentation agents and any other
agents designated as such on the signature pages hereto (other than the
Administrative Agent) shall have no responsibilities under this Agreement or
the other Credit Documents other than as a Lender.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 AMENDMENTS, WAIVERS AND RELEASE OF COLLATERAL.
Neither this Agreement, nor any of the Notes, nor any of the other
Credit Documents, nor any terms hereof or thereof may be amended, supplemented,
waived or modified except in accordance with the provisions of this Section nor
may be released except as specifically provided herein or in the Security
Documents or in accordance with the provisions of this Section 9.1. The
Required Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (a) enter into with the Borrowers
written amendments, supplements or modifications hereto and to the other Credit
Documents for the purpose of adding any provisions to this Agreement or the
other Credit Documents or changing in any manner the rights or obligations of
the Lenders or of the Borrowers hereunder or thereunder or (b) waive, on such
terms and conditions as the Required Lenders may specify in such instrument,
any of the requirements of this Agreement or the other Credit Documents or any
Default or Event of Default and its consequences or (c) release Collateral in
accordance with the
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terms hereof or of any Security Document or on such other terms and conditions
as the Required Lenders may agree; provided, however, that no such waiver and
no such amendment, waiver, supplement, modification or release shall:
(i) reduce the amount or extend the scheduled date
of maturity of any Loan or Note, or extend the expiry of any
Letter of Credit beyond the Maturity Date, or any installment
thereon, or reduce the stated rate of any interest or fee
payable hereunder (other than interest at the increased
post-default rate) or extend the scheduled date of any
payment thereof or increase the amount or extend the
expiration date of any Lender's Commitment, in each case
without the written consent of each Lender directly affected
thereby; or
(ii) amend, modify or waive any provision of Section
2.14, Section 9.1 or Section 9.7(a), or reduce the percentage
specified in the definition of Required Lenders, without the
written consent of all the Lenders; or
(iii) amend, modify or waive any provision of
Article VIII without the written consent of the then
Administrative Agent; or
(iv) release all or any substantial portion of the
Guarantors from their obligations under the Guaranty without
the written consent of all of the Lenders; or
(v) release all or any substantial portion of the
Collateral without the written consent of all of the Lenders,
or
(vi) without the consent of Lenders holding in the
aggregate more than 50% of the outstanding Term Loans, extend
the time for or the amount or the manner of application of
proceeds of any mandatory prepayment required by Section
2.9(b)(ii), (iii) or (iv) hereof, or
(vii) amend, modify or waive the requirement that
any issue be resolved or determined with the consent,
approval or upon the request of the Required Lenders or all
Lenders, without the written consent of all of the Lenders to
the change of such voting requirement and, provided, further,
that no amendment, waiver or consent affecting the rights or
duties of the Administrative Agent or the Issuing Lender
under any Credit Document shall in any event be effective,
unless in writing and signed by the Administrative Agent
and/or the Issuing Lender, as applicable, in addition to the
Lenders required hereinabove to take such action.
Any such waiver, any such amendment, supplement or modification and
any such release shall apply equally to each of the Lenders and shall be
binding upon the Borrowers, the other Credit Parties, the Lenders, the
Administrative Agent and all future holders of the Notes. In the case of any
waiver, the Borrowers, the other Credit Parties, the Lenders and the
Administrative Agent shall be restored to their former position and rights
hereunder and under the outstanding Loans and Notes and other Credit Documents,
and any Default or Event of Default waived shall
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be deemed to be cured and not continuing; but no such waiver shall extend to
any subsequent or other Default or Event of Default, or impair any right
consequent thereon.
Notwithstanding any of the foregoing to the contrary, the consent of
the Credit Parties shall not be required for any amendment, modification or
waiver of the provisions of Article VIII (other than the provisions of Section
8.9); provided, however, that the Administrative Agent will provide written
notice to the Borrowers of any such amendment, modification or waiver. In
addition, the Borrowers and the Lenders hereby authorize the Administrative
Agent to modify this Credit Agreement by unilaterally amending or supplementing
Schedule 2.1(a) from time to time in the manner requested by the Borrowers, the
Administrative Agent or any Lender in order to reflect any assignments or
transfers of the Loans as provided for hereunder; provided, however, that the
Administrative Agent shall promptly deliver a copy of any such modification to
the Borrowers and each Lender.
Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender is
entitled to vote as such Lender sees fit on any bankruptcy reorganization plan
that affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersede the unanimous consent
provisions set forth herein and (y) the Required Lenders may consent to allow a
Credit Party to use cash collateral in the context of a bankruptcy or
insolvency proceeding.
SECTION 9.2 NOTICES.
Except as otherwise provided in Article II, all notices, requests and
demands to or upon the respective parties hereto to be effective shall be in
writing (including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made (a) when delivered by
hand, (b) when transmitted via telecopy (or other facsimile device) to the
number set out herein, (c) the day following the day on which the same has been
delivered prepaid or pursuant to an invoice arrangement to a reputable national
overnight air courier service, or (d) the fifth Business Day following the day
on which the same is sent by certified or registered mail, postage prepaid, in
each case, addressed as follows in the case of the Borrowers, the other Credit
Parties and the Administrative Agent, and as set forth on Schedule 9.2 in the
case of the Lenders, or to such other address as may be hereafter notified by
the respective parties hereto and any future holders of the Notes:
The Borrowers [Name of Borrower/Credit Party]
and the other c/o Suiza Fluid Dairy Group, L.P.
Credit Parties: 2515 McKinney Ave., Suite 1200
Dallas, Texas 75201
Attention: Treasurer
Telecopier: (214) 303-3499
Telephone: (214) 303-3400
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The Administrative First Union National Bank
Agent: Charlotte Plaza, 23rd Floor
201 South College Street
Charlotte, North Carolina 28288-0608
Attention: Syndication Agency Services
Telecopier: (704) 383-0288
Telephone: (704) 374-2698
with a copy to:
First Union National Bank
One First Union Center, DC-5
Charlotte, North Carolina 28288-0737
Attention: Mr. Jorge Gonzalez
Telecopier: (704) 374-3300
Telephone: (704) 383-8461
SECTION 9.3 NO WAIVER; CUMULATIVE REMEDIES.
No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power
or privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
SECTION 9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the Notes and
the making of the Loans, provided that all such representations and warranties
shall terminate on the date upon which the Commitments have been terminated and
all amounts owing hereunder and under any Notes have been paid in full.
SECTION 9.5 PAYMENT OF EXPENSES AND TAXES.
The Credit Parties agree (a) to pay or reimburse the Administrative
Agent for all its reasonable out-of-pocket costs and expenses incurred in
connection with the development, preparation, negotiation, printing and
execution of, and any amendment, supplement or modification to, this Agreement
and the other Credit Documents and any other documents prepared in connection
herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, together with the reasonable fees
and disbursements of counsel to the Administrative Agent, (b) to pay or
reimburse each Lender and the Administrative Agent for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the Notes and any such other documents, including,
without limitation, the reasonable fees and disbursements of counsel to the
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Administrative Agent and to the Lenders (including reasonable allocated costs
of in-house legal counsel), (c) on demand, to pay, indemnify, and hold each
Lender and the Administrative Agent harmless from, any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise and other similar taxes, if any, which may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, the Credit Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and the
Administrative Agent and their Affiliates harmless from and against, any and
all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance
and administration of the Credit Documents and any such other documents and the
use, or proposed use, of proceeds of the Loans (all of the foregoing,
collectively, the "indemnified liabilities"); provided, however, that the
Borrowers shall not have any obligation hereunder to the Administrative Agent
or any Lender with respect to indemnified liabilities arising from the gross
negligence or willful misconduct of the Administrative Agent or any such
Lender, as determined by a court of competent jurisdiction. The agreements in
this Section 9.5 shall survive repayment or assignment of the Loans, Notes and
all other amounts payable hereunder.
SECTION 9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING
LENDERS.
(a) This Agreement shall be binding upon and inure to the
benefit of the Borrowers, the Lenders, the Administrative Agent, all
future holders of the Notes and their respective successors and
assigns, except that the Borrowers may not assign or transfer any of
their rights or obligations under this Agreement or the other Credit
Documents without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time
sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to such Lender, any Note
held by such Lender, any Commitment of such Lender, or any other
interest of such Lender hereunder. In the event of any such sale by a
Lender of participating interests to a Participant, such Lender's
obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the
holder of any such Note for all purposes under this Agreement, and the
Borrowers and the Administrative Agent shall continue to deal solely
and directly with such Lender in connection with such Lender's rights
and obligations under this Agreement. No Lender shall transfer or
grant any participation under which the Participant shall have rights
to approve any amendment to or waiver of this Agreement or any other
Credit Document except to the extent such amendment or waiver would
(i) extend the scheduled maturity of any Loan or Note, or extend the
expiry date of any Letter of Credit in which such Participant is
participating beyond the Maturity Date, or any installment thereon in
which such Participant is participating, or reduce the stated rate or
extend the time of payment of interest or fees thereon (except in
connection with a waiver of interest at the increased post-default
rate)
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or reduce the principal amount thereof, or increase the amount of the
Participant's participation over the amount thereof then in effect (it
being understood that a waiver of any Default or Event of Default
shall not constitute a change in the terms of such participation, and
that an increase in any Commitment or Loan shall be permitted without
consent of any Participant if the Participant's participation is not
increased as a result thereof), (ii) release all or substantially all
of the Guarantors from their obligations under the Guaranty, (iii)
release all or substantially all of the Collateral, or (iv) consent to
the assignment or transfer by the Borrowers of any of their rights and
obligations under this Agreement other than in accordance with this
Agreement. In the case of any such participation, the Participant
shall not have any rights under this Agreement or any of the other
Credit Documents (the Participant's rights against such Lender in
respect of such participation to be those set forth in the agreement
executed by such Lender in favor of the Participant relating thereto)
and all amounts payable by the Borrowers hereunder shall be determined
as if such Lender had not sold such participation; provided that each
Participant shall be entitled to the benefits of Sections 2.18, 2.19,
2.20 and 9.5 with respect to its participation in the Commitments and
the Loans outstanding from time to time, but no Participant shall be
entitled to receive any greater amount pursuant to such Sections than
the transferor Lender would have been entitled to receive in respect
of the amount of the participation transferred by such transferor
Lender to such Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time,
sell or assign to any Lender or any affiliate thereof or special
purpose entity created thereby and with the consent of the
Administrative Agent and, so long as no Event of Default has occurred
and is continuing, the Borrowers (in each case, which consent shall
not be unreasonably withheld), to one or more additional banks or
financial institutions ("Purchasing Lenders"), all or any part of its
rights and obligations under this Agreement and the Notes in minimum
amounts of $5,000,000 with respect to its Revolving Commitment, its
Revolving Loans, its SFG Revolving Loans and its Term Loans (or, if
less, the entire amount of such Lender's obligations), pursuant to a
Commitment Transfer Supplement, executed by such Purchasing Lender and
such transferor Lender (and, in the case of a Purchasing Lender that
is not then a Lender or an affiliate thereof, the Administrative Agent
and, so long as no Event of Default has occurred and is continuing,
the Borrowers), and delivered to the Administrative Agent for its
acceptance and recording in the Register; provided, however, that (i)
any sale or assignment to an existing Lender shall not require the
consent of the Administrative Agent or the Borrowers nor shall any
such sale or assignment be subject to the minimum assignment amounts
specified herein and (ii) any partial assignment of the transferor
Lender's Commitments shall be of an equal, pro rata percentage of such
Lender's Revolving Commitment, Term A Loan Commitment and SFG Term
Loan Commitment. Upon such execution, delivery, acceptance and
recording, from and after the Transfer Effective Date specified in
such Commitment Transfer Supplement, (x) the Purchasing Lender
thereunder shall be a party hereto and, to the extent provided in such
Commitment Transfer Supplement, have the rights and obligations of a
Lender hereunder with a Commitment as set forth therein, and (y) the
transferor Lender thereunder shall, to the extent provided in such
Commitment
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Transfer Supplement, be released from its obligations under this
Agreement (and, in the case of a Commitment Transfer Supplement
covering all or the remaining portion of a transferor Lender's rights
and obligations under this Agreement, such transferor Lender shall
cease to be a party hereto). Such Commitment Transfer Supplement shall
be deemed to amend this Agreement to the extent, and only to the
extent, necessary to reflect the addition of such Purchasing Lender
and the resulting adjustment of Commitment Percentages arising from
the purchase by such Purchasing Lender of all or a portion of the
rights and obligations of such transferor Lender under this Agreement
and the Notes. On or prior to the Transfer Effective Date specified in
such Commitment Transfer Supplement, the Borrowers, at their own
expense, shall execute and deliver to the Administrative Agent in
exchange for the Notes delivered to the Administrative Agent pursuant
to such Commitment Transfer Supplement new Notes to the order of such
Purchasing Lender in an amount equal to the Commitment assumed by it
pursuant to such Commitment Transfer Supplement and, unless the
transferor Lender has not retained a Commitment hereunder, new Notes
to the order of the transferor Lender in an amount equal to the
Commitment retained by it hereunder. Such new Notes shall be dated the
Closing Date and shall otherwise be in the form of the Notes replaced
thereby. The Notes surrendered by the transferor Lender shall be
returned by the Administrative Agent to the Parent Borrower marked
"canceled".
(d) The Administrative Agent shall maintain at its address
referred to in Section 9.2 a copy of each Commitment Transfer
Supplement delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the
Commitment of, and principal amount of the Loans owing to, each Lender
from time to time. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrowers, the Administrative
Agent and the Lenders may treat each Person whose name is recorded in
the Register as the owner of the Loan recorded therein for all
purposes of this Agreement. The Register shall be available for
inspection by the Borrowers or any Lender at any reasonable time and
from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly executed Commitment Transfer
Supplement, together with payment to the Administrative Agent by the
transferor Lender or the Purchasing Lender, as agreed between them, of
a registration and processing fee of $3,500 for each Purchasing Lender
listed in such Commitment Transfer Supplement and the Notes subject to
such Commitment Transfer Supplement, the Administrative Agent shall
(i) accept such Commitment Transfer Supplement, (ii) record the
information contained therein in the Register and (iii) give prompt
notice of such acceptance and recordation to the Lenders and the
Borrowers.
(f) The Credit Parties authorize each Lender to disclose to
any Participant or Purchasing Lender (each, a "Transferee") and any
prospective Transferee any and all financial information in such
Lender's possession concerning the Credit Parties, their Subsidiaries
and their Affiliates which has been delivered to such Lender by or on
behalf of the Credit Parties pursuant to this Agreement or which has
been delivered to such Lender by or on behalf of the Credit Parties in
connection with such Lender's credit
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evaluation of the Credit Parties and their Affiliates prior to
becoming a party to this Agreement, in each case subject to Section
9.15.
(g) At the time of each assignment pursuant to this Section
9.6 to a Person which is not already a Lender hereunder and which is
not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for Federal income tax purposes, the
respective assignee Lender shall provide to the Borrowers and the
Administrative Agent the appropriate Internal Revenue Service Forms
(and, if applicable, a 2.20 Certificate) described in Section 2.20.
(h) Nothing herein shall prohibit any Lender from pledging or
assigning any of its rights under this Agreement (including, without
limitation, any right to payment of principal and interest under any
Note) to any Federal Reserve Bank in accordance with applicable laws.
SECTION 9.7 ADJUSTMENTS; SET-OFF.
(a) Each Lender agrees that if any Lender (a "benefited
Lender") shall at any time receive any payment of all or part of its
Loans, or interest thereon, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off, pursuant to
events or proceedings of the nature referred to in Section 7.1(e), or
otherwise) in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such
other Lender's Loans, or interest thereon, such benefited Lender shall
purchase for cash from the other Lenders a participating interest in
such portion of each such other Lender's Loans, or shall provide such
other Lenders with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such benefited Lender
to share the excess payment or benefits of such collateral or proceeds
ratably with each of the Lenders; provided, however, that if all or
any portion of such excess payment or benefits is thereafter recovered
from such benefited Lender, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such recovery,
but without interest. The Borrowers agree that each Lender so
purchasing a portion of another Lender's Loans may exercise all rights
of payment (including, without limitation, rights of set-off) with
respect to such portion as fully as if such Lender were the direct
holder of such portion.
(b) In addition to any rights and remedies of the Lenders
provided by law (including, without limitation, other rights of
set-off), each Lender shall have the right, without prior notice to
the Borrowers, any such notice being expressly waived by the Borrowers
to the extent permitted by applicable law, upon the occurrence of any
Event of Default, to setoff and appropriate and apply any and all
deposits (general or special, time or demand, provisional or final),
in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such
Lender or any branch or agency thereof to or for the credit or the
account of the Borrowers, or any part thereof in such amounts as such
Lender may elect, against and on account of the obligations and
liabilities of the Borrowers to such Lender hereunder and claims of
every nature and
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description of such Lender against the Borrowers, in any currency,
whether arising hereunder, under the Notes or under any documents
contemplated by or referred to herein or therein, as such Lender may
elect, whether or not such Lender has made any demand for payment and
although such obligations, liabilities and claims may be contingent or
unmatured. The aforesaid right of set-off may be exercised by such
Lender against the Borrowers or against any trustee in bankruptcy,
debtor in possession, assignee for the benefit of creditors, receiver
or execution, judgment or attachment creditor of the Borrowers, or
against anyone else claiming through or against the Borrowers or any
such trustee in bankruptcy, debtor in possession, assignee for the
benefit of creditors, receiver, or execution, judgment or attachment
creditor, notwithstanding the fact that such right of set-off shall
not have been exercised by such Lender prior to the occurrence of any
Event of Default. Each Lender agrees promptly to notify the Borrowers
and the Administrative Agent after any such set-off and application
made by such Lender; provided, however, that the failure to give such
notice shall not affect the validity of such set-off and application.
SECTION 9.8 TABLE OF CONTENTS AND SECTION HEADINGS.
The table of contents and the Section and subsection headings herein
are intended for convenience only and shall be ignored in construing this
Agreement.
SECTION 9.9 COUNTERPARTS.
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A set
of the copies of this Agreement signed by all the parties shall be lodged with
the Borrowers and the Administrative Agent.
SECTION 9.10 EFFECTIVENESS; DESIGNATION AS SENIOR INDEBTEDNESS.
This Credit Agreement shall become effective on the date on which all
of the parties have signed a copy hereof (whether the same or different copies)
and shall have delivered the same to the Administrative Agent pursuant to
Section 9.2 or, in the case of the Lenders, shall have given to the
Administrative Agent written, telecopied or telex notice (actually received) at
such office that the same has been signed and mailed to it. Upon this Agreement
becoming effective, each of the parties hereto acknowledge and agree that the
Credit Party Obligations shall be "Senior Indebtedness" as defined in and for
the purposes of the Indenture.
SECTION 9.11 SEVERABILITY.
Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
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SECTION 9.12 INTEGRATION.
This Agreement, the Notes and the other Credit Documents represent the
agreement of the Borrowers, the Administrative Agent and the Lenders with
respect to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Administrative Agent, the Borrowers or any
Lender relative to the subject matter hereof not expressly set forth or
referred to herein or in the Notes.
SECTION 9.13 GOVERNING LAW.
This Agreement and the Notes and the rights and obligations of the
parties under this Agreement and the Notes shall be governed by, and construed
and interpreted in accordance with, the law of the State of North Carolina.
SECTION 9.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
All judicial proceedings brought against a Borrower and/or any other
Credit Party with respect to this Agreement, any Note or any of the other
Credit Documents may be brought in any state or federal court of competent
jurisdiction in the State of North Carolina, and, by execution and delivery of
this Agreement, each of the Borrowers and the other Credit Parties accepts, for
itself and in connection with its properties, generally and unconditionally,
the non-exclusive jurisdiction of the aforesaid courts and irrevocably agrees
to be bound by any final judgment rendered thereby in connection with this
Agreement from which no appeal has been taken or is available. Each of the
Borrowers and the other Credit Parties irrevocably agrees that all service of
process in any such proceedings in any such court may be effected by mailing a
copy thereof by registered or certified mail (or any substantially similar form
of mail), postage prepaid, to it at its address set forth in Section 9.2 or at
such other address of which the Administrative Agent shall have been notified
pursuant thereto, such service being hereby acknowledged by each of the
Borrowers and the other Credit Parties to be effective and binding service in
every respect. Each of the Borrowers, the other Credit Parties, the
Administrative Agent and the Lenders irrevocably waives any objection,
including, without limitation, any objection to 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 in any such jurisdiction. Nothing
herein shall affect the right to serve process in any other manner permitted by
law or shall limit the right of any Lender to bring proceedings against the
Borrowers or the other Credit Parties in the court of any other jurisdiction.
SECTION 9.15 CONFIDENTIALITY.
The Administrative Agent and each of the Lenders agrees that it will
use its best efforts not to disclose without the prior consent of the Borrowers
(other than to its employees, affiliates, auditors or counsel or to another
Lender) any information with respect to the Parent Borrower and its
Subsidiaries which is furnished pursuant to this Agreement, any other Credit
Document or any documents contemplated by or referred to herein or therein and
which is designated by a Borrower to the Lenders in writing as confidential or
as to which it is otherwise reasonably clear such information is not public,
except that any Lender may disclose any such information (a) as
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has become generally available to the public other than by a breach of this
Section 9.15, (b) as may be required or appropriate in any report, statement or
testimony submitted to any municipal, state or federal regulatory body having
or claiming to have jurisdiction over such Lender or to the Federal Reserve
Board or the Federal Deposit Insurance Corporation or the OCC or the NAIC or
similar organizations (whether in the United States or elsewhere) or their
successors, (c) as may be required or appropriate in response to any summons or
subpoena or any law, order, regulation or ruling applicable to such Lender,
after notice to the Borrowers and opportunity to object to such disclosure to
the extent reasonably practicable, (d) to any prospective Participant or
assignee in connection with any contemplated transfer pursuant to Section 9.6,
provided that such prospective transferee shall have been made aware of this
Section 9.15 and shall have agreed to be bound by its provisions as if it were
a party to this Agreement or (e) to Gold Sheets and other similar bank trade
publications; such information to consist of deal terms and other information
regarding the credit facilities evidenced by this Credit Agreement customarily
found in such publications.
SECTION 9.16 ACKNOWLEDGMENTS.
The Borrowers and the other Credit Parties each hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of each Credit Document;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrowers or any other
Credit Party arising out of or in connection with this Agreement and
the relationship between Administrative Agent and Lenders, on one
hand, and the Borrowers and the other Credit Parties, on the other
hand, in connection herewith is solely that of debtor and creditor;
and
(c) no joint venture exists among the Lenders or among the
Borrowers or the other Credit Parties and the Lenders.
SECTION 9.17 WAIVERS OF JURY TRIAL AND PUNITIVE DAMAGES.
THE BORROWERS, THE OTHER CREDIT PARTIES, THE ADMINISTRATIVE AGENT AND
THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN. The parties hereto agree that they shall not have a
remedy of punitive or exemplary damages against the other in any judicial
proceeding, any dispute, claim or controversy arising out of, connected with or
relating to this Agreement and other Credit Documents ("Disputes"), and hereby
waive any right or claim to punitive or exemplary damages they have now or
which may arise in the future in connection with any Dispute.
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SECTION 9.18 REFINANCING OF EXISTING SUBSIDIARY BORROWER DEBT.
The parties hereto acknowledge and agree that the Indebtedness
incurred by the Subsidiary Borrower hereunder, for purposes of determining
compliance with Section 4.03 of the Indenture, refinances and replaces the Bank
Indebtedness (as defined in the Indenture).
ARTICLE X
GUARANTY
Subject to the terms of Section 10.10 hereof, each of the Guarantors
hereby agrees as follows:
SECTION 10.1 THE GUARANTY.
In order to induce the Lenders to enter into this Agreement and to
extend credit hereunder and in recognition of the direct benefits to be
received by the Guarantors from the Extensions of Credit hereunder, each of the
Guarantors hereby agrees with the Administrative Agent and the Lenders as
follows: each Guarantor hereby unconditionally and irrevocably jointly and
severally guarantees as primary obligor and not merely as surety the full and
prompt payment when due, whether upon maturity, by acceleration or otherwise,
of any and all indebtedness of the Borrowers to the Administrative Agent and
the Lenders. If any or all of the indebtedness of the Borrowers to the
Administrative Agent and the Lenders becomes due and payable hereunder, subject
to the terms of Section 10.10, each Guarantor unconditionally promises to pay
such indebtedness to the Administrative Agent and the Lenders, on order, on
demand, together with any and all reasonable expenses which may be incurred by
the Administrative Agent or the Lenders in collecting any of the indebtedness.
The word "indebtedness" is used in this Article X in its most comprehensive
sense and includes any and all advances, debts, obligations and liabilities of
the Borrowers arising in connection with this Agreement, including, without
limitation, Hedging Agreements permitted hereunder, in each case, heretofore,
now, or hereafter made, incurred or created, whether voluntarily or
involuntarily, absolute or contingent, liquidated or unliquidated, determined
or undetermined, whether or not such indebtedness is from time to time reduced,
or extinguished and thereafter increased or incurred, whether the Borrowers may
be liable individually or jointly with others, whether or not recovery upon
such indebtedness may be or hereafter become barred by any statute of
limitations, and whether or not such indebtedness may be or hereafter become
otherwise unenforceable.
Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents, to the extent the obligations of a Guarantor
shall be adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of each such
Guarantor hereunder shall be limited to the maximum amount that is permissible
under applicable law (whether federal or state and including, without
limitation, the Bankruptcy Code).
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SECTION 10.2 BANKRUPTCY.
Additionally, each of the Guarantors unconditionally and irrevocably
guarantees jointly and severally the payment of any and all indebtedness of the
Borrowers to the Lenders whether or not due or payable by the Borrowers upon
the occurrence of any of the events specified in Section 7.1(e), and
unconditionally promises to pay such indebtedness to the Administrative Agent
for the account of the Lenders, or order, on demand, in lawful money of the
United States. Each of the Guarantors further agrees that to the extent that
the Borrowers or a Guarantor shall make a payment or a transfer of an interest
in any property to the Administrative Agent or any Lender, which payment or
transfer or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, or otherwise is avoided, and/or required to be
repaid to a Borrower or a Guarantor, the estate of a Borrower or a Guarantor, a
trustee, receiver or any other party under any bankruptcy law, state or federal
law, common law or equitable cause, then to the extent of such avoidance or
repayment, the obligation or part thereof intended to be satisfied shall be
revived and continued in full force and effect as if said payment had not been
made.
SECTION 10.3 NATURE OF LIABILITY.
The liability of each Guarantor hereunder is exclusive and independent
of any security for or other guaranty of the indebtedness of the Borrowers
whether executed by any such Guarantor, any other guarantor or by any other
party, and no Guarantor's liability hereunder shall be affected or impaired by
(a) any direction as to application of payment by the Borrowers or by any other
party, or (b) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the indebtedness of the
Borrowers, or (c) any payment on or in reduction of any such other guaranty or
undertaking, or (d) any dissolution, termination or increase, decrease or
change in personnel by the Borrowers, or (e) any payment made to the
Administrative Agent or the Lenders on the indebtedness which the
Administrative Agent or such Lenders repay the Borrowers pursuant to court
order in any bankruptcy, reorganization, arrangement, moratorium or other
debtor relief proceeding, and each of the Guarantors waives any right to the
deferral or modification of its obligations hereunder by reason of any such
proceeding. The obligations of the Guarantors hereunder are absolute and
unconditional, irrespective of the value, genuineness, validity, regularity or
enforceability of any of the Credit Documents, any Hedging Agreement entered
into in connection with this Agreement, or any other agreement or instrument
referred to therein, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or a
guarantor.
SECTION 10.4 INDEPENDENT OBLIGATION.
The obligations of each Guarantor hereunder are independent of the
obligations of any other Guarantor or the Borrowers, and a separate action or
actions may be brought and prosecuted against each Guarantor whether or not
action is brought against any other Guarantor or the Borrowers and whether or
not any other Guarantor or the Borrowers is joined in any such action or
actions.
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SECTION 10.5 AUTHORIZATION.
Each of the Guarantors authorizes the Administrative Agent and each
Lender without notice or demand (except as shall be required by applicable
statute and cannot be waived), and without affecting or impairing its liability
hereunder, from time to time to (a) renew, compromise, extend, increase,
accelerate or otherwise change the time for payment of, or otherwise change the
terms of the indebtedness or any part thereof in accordance with this
Agreement, including any increase or decrease of the rate of interest thereon,
(b) take and hold security from any Guarantor or any other party for the
payment of this Guaranty or the indebtedness and exchange, enforce, waive and
release any such security, (c) apply such security and direct the order or
manner of sale thereof as the Administrative Agent and the Lenders in their
discretion may determine and (d) release or substitute any one or more
endorsers, guarantors, the Borrowers or other obligors.
SECTION 10.6 RELIANCE.
It is not necessary for the Administrative Agent or the Lenders to
inquire into the capacity or powers of the Borrowers or the officers,
directors, partners or agents acting or purporting to act on their behalf, and
any indebtedness made or created in reliance upon the professed exercise of
such powers shall be guaranteed hereunder.
SECTION 10.7 WAIVER.
(a) Each of the Guarantors waives any right (except as shall
be required by applicable statute and cannot be waived) to require the
Administrative Agent or any Lender to (i) proceed against the
Borrowers, any other guarantor or any other party, (ii) proceed
against or exhaust any security held from the Borrowers, any other
guarantor or any other party, or (iii) pursue any other remedy in the
Administrative Agent's or any Lender's power whatsoever. Each of the
Guarantors waives any defense based on or arising out of any defense
of a Borrower, any other Guarantor or any other party other than
payment in full of the indebtedness, including without limitation any
defense based on or arising out of the disability of a Borrower, any
other guarantor or any other party, or the unenforceability of the
indebtedness or any part thereof from any cause, or the cessation from
any cause of the liability of a Borrower other than payment in full of
the indebtedness. Without limiting the generality of the provisions of
this Article X, each of the Guarantors hereby specifically waives the
benefits of N.C. Gen. Stat. Sections 26-7 through 26-9, inclusive. The
Administrative Agent or any of the Lenders may, at their election,
foreclose on any security held by the Administrative Agent or a Lender
by one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable (to the extent such
sale is permitted by applicable law), or exercise any other right or
remedy the Administrative Agent and any Lender may have against the
Borrowers or any other party, or any security, without affecting or
impairing in any way the liability of any Guarantor hereunder except
to the extent the indebtedness has been paid. Each of the Guarantors
waives any defense arising out of any such election by the
Administrative Agent and each of the Lenders, even though such
election operates to
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impair or extinguish any right of reimbursement or subrogation or
other right or remedy of the Guarantors against the Borrowers or any
other party or any security.
(b) Each of the Guarantors waives all presentments, demands
for performance, protests and notices, including without limitation
notices of nonperformance, notice of protest, notices of dishonor,
notices of acceptance of this Guaranty, and notices of the existence,
creation or incurring of new or additional indebtedness. Each
Guarantor assumes all responsibility for being and keeping itself
informed of each of the Borrower's financial condition and assets, and
of all other circumstances bearing upon the risk of nonpayment of the
indebtedness and the nature, scope and extent of the risks which such
Guarantor assumes and incurs hereunder, and agrees that neither the
Administrative Agent nor any Lender shall have any duty to advise such
Guarantor of information known to it regarding such circumstances or
risks.
(c) Each of the Guarantors hereby agrees it will not exercise
any rights of subrogation which it may at any time otherwise have as a
result of this Guaranty (whether contractual, under Section 509 of the
U.S. Bankruptcy Code, or otherwise) to the claims of the Lenders
against the Borrowers or any other guarantor of the indebtedness of
the Borrowers owing to the Lenders (collectively, the "Other Parties")
and all contractual, statutory or common law rights of reimbursement,
contribution or indemnity from any Other Party which it may at any
time otherwise have as a result of this Guaranty until such time as
the Loans hereunder shall have been paid and the Commitments have been
terminated. Each of the Guarantors hereby further agrees not to
exercise any right to enforce any other remedy which the
Administrative Agent and the Lenders now have or may hereafter have
against any Other Party, any endorser or any other guarantor of all or
any part of the indebtedness of the Borrowers and any benefit of, and
any right to participate in, any security or collateral given to or
for the benefit of the Lenders to secure payment of the indebtedness
of the Borrowers until such time as the Loans hereunder shall have
been paid and the Commitments have been terminated.
SECTION 10.8 LIMITATION ON ENFORCEMENT.
The Lenders agree that this Guaranty may be enforced only by the
action of the Administrative Agent acting upon the instructions of the Required
Lenders and that no Lender shall have any right individually to seek to enforce
or to enforce this Guaranty, it being understood and agreed that such rights
and remedies may be exercised by the Administrative Agent for the benefit of
the Lenders upon the terms of this Agreement. The Lenders further agree that
this Guaranty may not be enforced against any director, officer, employee or
stockholder of the Guarantors.
SECTION 10.9 CONFIRMATION OF PAYMENT.
The Administrative Agent and the Lenders will, upon request after
payment of the indebtedness and obligations which are the subject of this
Guaranty and termination of the commitments relating thereto, confirm to the
Borrowers, the Guarantors or any other Person that
107
<PAGE> 113
such indebtedness and obligations have been paid and the commitments relating
thereto terminated, subject to the provisions of Section 10.2.
SECTION 10.10 LIMITATIONS ON GUARANTY.
Notwithstanding anything to the contrary herein, the parties hereto
acknowledge and agree that, so long as the Indebtedness evidenced by the Senior
Subordinated Notes remains outstanding, the Guaranty provided by the
Subsidiaries of the Subsidiary Borrower shall be limited to the obligations of
the Subsidiary Borrower hereunder and under the other Credit Documents.
108
<PAGE> 114
IN WITNESS WHEREOF, each of the parties hereto have caused this
Agreement to be duly executed and delivered by its proper and duly authorized
officers as of the day and year first above written.
BORROWERS: SUIZA FLUID DAIRY GROUP, L.P.,
a Delaware limited partnership
By: Suiza Fluid Dairy Group GP, LLC
By: /s/ COREY M. OLSON
-------------------------------------
Name: Corey M. Olson
-----------------------------------
Title: Vice President
----------------------------------
SOUTHERN FOODS GROUP, L.P.,
a Delaware limited partnership
By: SFG Management Limited Liability Company
By: /s/ COREY M. OLSON
-------------------------------------
Name: Corey M. Olson
-----------------------------------
Title: Vice President
----------------------------------
SUIZA FLUID DAIRY GOUP, L.P.
CREDIT AGREEMENT
<PAGE> 115
GUARANTORS: SFG MANAGEMENT LIMITED LIABILITY
COMPANY
SUIZA SOUTHEAST, LLC
BROUGHTON FOODS, LLC
LAND-O-SUN DAIRIES, LLC
COUNTRY DELITE FARMS, LLC
DAIRY FRESH, LLC
LOUIS TRAUTH DAIRY, LLC
VELDA FARMS, LLC
SUIZA GTL, LLC
NEW ENGLAND DAIRIES, LLC
TUSCAN/LEHIGH MANAGEMENT, L.L.C.
SUIZA WEST, LLC
ROBINSON DAIRY, LLC
MODEL DAIRY, LLC
SUIZA SOCAL, LLC
COUNTRY FRESH, LLC
OBERLIN FARMS DAIRY, LLC
LONDON'S FARM DAIRY, LLC
CF BURGER DAIRY, LLC
By: /s/ LISA TYSON
---------------------------------------------------
Name:
-------------------------------------------------
Title: of each of the foregoing
---------------------
limited liability companies
TUSCAN/LEHIGH DAIRIES, L.P.
By: Tuscan/Lehigh Management, L.L.C.
its general partner
By: /s/ LISA TYSON
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
SUIZA FLUID DAIRY GOUP, L.P.
CREDIT AGREEMENT
<PAGE> 116
FIRST UNION NATIONAL BANK, in its capacity as
Administrative Agent and individually in its
capacity as a Lender
By: /s/ MARK B. FELKER
--------------------------------------------
Name: Mark B. Felker
------------------------------------------
Title: Senior Vice President
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 117
BANK ONE, NA, in its capacity as Syndication
Agent and individually in its capacity as a
Lender
By: /s/ KATHY TURNER
--------------------------------------------
Name: Kathy Turner
------------------------------------------
Title: Director
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 118
BANK OF AMERICA, N.A., in its capacity as
Documentation Agent and individually in its
capacity as a Lender
By: /s/ LYNN A. DURNING
--------------------------------------------
Name: Lynn A. Durning
------------------------------------------
Title: Principal
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 119
FLEET NATIONAL BANK, in its capacity as
Documentation Agent and individually in its
capacity as a Lender
By: /s/ STEVE KALN
--------------------------------------------
Name: Steve Kaln
------------------------------------------
Title: Vice President
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 120
COBANK, ACB, in its capacity as Managing Agent
and individually in its capacity as a Lender
By: /s/ BRIAN J. KLATT
--------------------------------------------
Name: Brian J. Klatt
------------------------------------------
Title: Vice President
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 121
CREDIT AGRICOLE INDOSUEZ,
in its capacity as Managing Agent and
individually in its capacity as a Lender
By: /s/ BRADLEY C. PETERSON
--------------------------------------------
Name: Bradley C. Peterson
------------------------------------------
Title: Vice President, Manager
-----------------------------------------
By: /s/ THOMAS P. GILLIS
--------------------------------------------
Name: Thomas P. Gillis
------------------------------------------
Title: Vice President, Manager
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 122
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK
B.A. "RABOBANK NEDERLAND", NEW YORK BRANCH, in
its capacity as Managing Agent and individually
in its capacity as a Lender
By: /s/ DAVID L. STREETER
--------------------------------------------
Name: David L. Streeter
------------------------------------------
Title: Vice President
-----------------------------------------
By: /s/ NANCY J. O'CONNOR
--------------------------------------------
Name: Nancy J. O'Connor
------------------------------------------
Title: Vice President
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 123
THE INDUSTRIAL BANK OF JAPAN, LIMITED, in its
capacity as Managing Agent and individually in
its capacity as a Lender
By: /s/ MASASHI SAKAI
--------------------------------------------
Name: Masashi Sakai
------------------------------------------
Title: General Manager
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 124
WELLS FARGO BANK (TEXAS), N.A., in its
capacity as Managing Agent and individually in
its capacity as a Lender
By: /s/ AUSTIN D. NETTLE
--------------------------------------------
Name: Austin D. Nettle
------------------------------------------
Title: Assistant Vice President
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 125
BANCO POPULAR DE PUERTO RICO, in its capacity
as Co-Agent and individually in its capacity as
a Lender
By: /s/ HECTOR A. VINA
--------------------------------------------
Name: Hector A. Vina
------------------------------------------
Title: Vice President
-----------------------------------------
By: /s/ ANDREW H. MELVILLE
--------------------------------------------
Name: Andrew H. Melville
------------------------------------------
Title: Assistant Vice President
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 126
BANCO POPULAR NORTH AMERICA, in its capacity
as Co-Agent and individually in its capacity as
a Lender
By: /s/ ANDREW H. MELVILLE
--------------------------------------------
Name: Andrew H. Melville
------------------------------------------
Title: AVP
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 127
THE BANK OF TOKYO-MITSUBISHI, LTD., in its
capacity as Co-Agent and individually in its
capacity as a Lender
By: /s/ D. BARNELL
--------------------------------------------
Name: D. Barnell
------------------------------------------
Title: Vice President
-----------------------------------------
By: /s/ JOHN M. MEARNS
--------------------------------------------
Name: John M. Mearns
------------------------------------------
Title: Vice President & Manager
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 128
THE BANK OF NOVA SCOTIA, in its capacity as
Co-Agent and individually in its capacity as a
Lender
By: /s/ F.C.H. ASHBY
--------------------------------------------
Name: F.C.H. Ashby
------------------------------------------
Title: Senior Manager Loan Operations
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 129
GUARANTY FEDERAL BANK, F.S.B. in its capacity
as Co-Agent and individually in its capacity as
a Lender
By: /s/ ROBERT S. HAYS
--------------------------------------------
Name: Robert S. Hays
------------------------------------------
Title: Senior Vice President
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 130
SUNTRUST BANK, ATLANTA, in its capacity as
Co-Agent and individually in its capacity as a
Lender
By: /s/ F. STEVEN PARRISH
--------------------------------------------
Name: F. STEVEN PARRISH
------------------------------------------
Title: VICE PRESIDENT
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 131
HARRIS TRUST AND SAVINGS BANK
By: /s/ DIANNA D. CARR
--------------------------------------------
Name: Dianna D. Carr
------------------------------------------
Title: Vice President
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 132
BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE,
INC.
By: /s/ ROBERT M. BIRINGER
--------------------------------------------
Name: Robert M. Biringer
------------------------------------------
Title: Executive Vice President
-----------------------------------------
By: /s/ GARY W. ANDRESEN
--------------------------------------------
Name: Gary W. Andresen
------------------------------------------
Title: Senior Associate
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 133
CREDIT INDUSTRIEL ET COMMERCIAL
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
SUIZA FLUID DAIRY GOUP, L.P.
CREDIT AGREEMENT
<PAGE> 134
U.S. BANCORP AG CREDIT, INC.
By: /s/ JOHN W. BALL
--------------------------------------------
Name: John W. Ball
------------------------------------------
Title: VP
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 135
BANK HAPOALIM B.M.
By: /s/ MICHAEL J. BYRNE /s/ THOMAS J. HEPPERLE
-------------------------------------------------------
Name: MICHAEL J. BYRNE THOMAS J. HEPPERLE
-----------------------------------------------------
Title: VP-SR. LENDING OFFICER VICE PRESIDENT
----------------------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 136
THE BANK OF NEW YORK
By: /s/ MARK T. FAMILO
--------------------------------------------
Name: Mark T. Familo
------------------------------------------
Title: Vice President
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 137
BANQUE NATIONALE DE PARIS
By: /s/ STEPHANIE ROGERS
--------------------------------------------
Name: Stephanie Rogers
------------------------------------------
Title: Vice President
-----------------------------------------
By: /s/ GREGG W. BONARD
--------------------------------------------
Name: Gregg W. Bonard
------------------------------------------
Title: Vice President
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 138
THE CHASE MANHATTAN BANK
By: /s/ GARY L. SEDVARK
--------------------------------------------
Name: Gary L. Sedvark
------------------------------------------
Title: Vice President
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 139
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ ROBERT IVOSEVICH
--------------------------------------------
Name: Robert Ivosevich
------------------------------------------
Title: Senior Vice President
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 140
THE DAI-ICHI KANGYO BANK, LTD., CHICAGO BRANCH
By: /s/ JOHN S. SNEED
--------------------------------------------
Name: John S. Sneed
------------------------------------------
Title: Senior Vice President
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 141
THE MITSUBISHI TRUST & BANKING CORPORATION
By: /s/ NOBUO TOMINAGA
--------------------------------------------
Name: Nobuo Tominaga
------------------------------------------
Title: Chief Manager
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 142
NATIONAL CITY BANK OF KENTUCKY
By: /s/ TOM GURBACH
--------------------------------------------
Name: Tom Gurbach
------------------------------------------
Title: Vice President
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 143
THE SANWA BANK, LIMITED, NEW YORK BRANCH
By: /s/ JOHN T. FEENEY
--------------------------------------------
Name: John T. Feeney
------------------------------------------
Title: Vice President
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 144
THE FUJI BANK, LIMITED
By: /s/ RAYMOND VENTURA
--------------------------------------------
Name: Raymond Ventura
------------------------------------------
Title: Vice President & Manager
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 145
THE SAKURA BANK, LIMITED
By: /s/ YOSHIKAZU NAGURA
--------------------------------------------
Name: Yoshikazu Nagura
------------------------------------------
Title: Senior Vice President
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 146
MERCANTILE BANK NATIONAL ASSOCIATION
By: /s/ DAVID F. HIGBEE
--------------------------------------------
Name: David F. Higbee
------------------------------------------
Title: Vice President
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 147
BANK OF HAWAII
By: /s/ BRENDA K. TESTERMAN
-------------------------------------------
Name: Brenda K. Testerman
-----------------------------------------
Title: Vice President
----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 148
ERSTE BANK DER OESTERREICHISCHEN SPARKASSEN AG
By: /s/ ARCINEE HOVANESSIAN
--------------------------------------------
Name: Arcinee Hovanessian
------------------------------------------
Title: Vice President
Erste Bank New York Branch
-----------------------------------------
By: /s/ ANCA THIFAN
--------------------------------------------
Name: Anca Thifan
------------------------------------------
Title: Vice President
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 149
MICHIGAN NATIONAL BANK
By: /s/ ERIC RAEGE
-------------------------------------------
Name: Eric Raege
-----------------------------------------
Title: Commercial Relationship Manager
----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 150
RZB FINANCE LLC
By: /s/ DIETER BEINTREXLER
--------------------------------------------
Name: Dieter Beintrexler
------------------------------------------
Title: President
-----------------------------------------
By: /s/ CHRISTOPH HOEDL
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 151
NATEXIS BANQUE BFCE
By: /s/ RENAUD J. D'HERBES
--------------------------------------------
Name: Renaud J. d'Herbes
------------------------------------------
Title: Senior Vice President
and Regional Manager
-----------------------------------------
By: /s/ DANIEL PAYER
--------------------------------------------
Name: Daniel Payer
------------------------------------------
Title: Assistant Vice President
-----------------------------------------
SUIZA FLUID DAIRY GROUP, L.P.
CREDIT AGREEMENT
<PAGE> 1
EXHIBIT 99.1
[SUIZA FOODS LOGO]
NEWS RELEASE
Contact: Cory Olson
Vice President and Treasurer
(214) 303-3645
FOR IMMEDIATE RELEASE
- --------------------------------------------------------------------------------
SUIZA FOODS COMPLETES ACQUISITION OF SOUTHERN FOODS GROUP
AND RELEASES UPDATED SHARE REPURCHASE DATA
DALLAS, TEXAS, January 4, 2000 - Suiza Foods Corporation (NYSE:SZA)
announced today the completion of its acquisition of Southern Foods Group, L.P.
Southern Foods, whose well-known regional dairy brands include Meadow Gold(R),
rights to Borden(R), Elsie(R), and Foremost(R) in several states, Oak Farms(R),
Schepps(R) Barbe's(R), Brown's Velvet Dairy(R), and Hygeia(R), is the nation's
third largest fluid milk processor, with operations in 11 states including
Alabama, Colorado, Hawaii, Idaho, Louisiana, Mississippi, Montana, Nebraska,
Oklahoma, Texas and Utah.
The transaction was effected through a joint venture with Dairy Farmers
of America, which previously owned interests in Southern Foods and in Suiza's
southern California and northeastern operations. The joint venture, which
encompasses all of Suiza's domestic fluid milk operations and the operations of
Southern Foods, is owned 66.2% by Suiza, and 33.8% by Dairy Farmers of America.
Suiza's Morningstar subsidiary, which manufactures and sells value added
products such as coffee creamers, whipped toppings, and cultured dairy products,
and its international businesses, which includes its Puerto Rico dairy and its
European packaging operations, will continue to operate as wholly-owned
subsidiaries of the company. Suiza also continues to hold a minority interest in
Consolidated Container Company.
With the closing of the transaction, Pete Schenkel, formerly President
and Chief Executive Officer of Southern Foods, became the President of the new
joint venture, and Vice Chairman of Suiza's Board of Directors. Rick Beaman,
former Executive Vice President of Southern Foods, will serve as Chief Operating
Officer of Southern Foods. The company also announced the retirement of Bill
Brick, Chief Operating Officer of Suiza's U.S. fluid milk division.
Simultaneously with the closing of the acquisition, the joint venture
obtained a new credit facility with borrowing capacity of up to $1.6 billion,
$240 million of which is available for borrowing by Southern Foods.
Approximately $1.1 billion was borrowed under this facility at closing, $180
million of which was borrowed by Southern Foods. Remaining capacity under this
credit facility will be used to fund future domestic dairy
<PAGE> 2
[SUIZA FOODS LOGO]
acquisitions and for general corporate purposes. In addition, Suiza terminated
its previously existing senior credit facility and replaced it with a new
corporate facility with borrowing capacity of up to $300 million. This facility
is currently undrawn, and will be used to fund future acquisitions, for stock
repurchases and for general corporate purposes.
Suiza also announced that during the fourth quarter it had repurchased
a total of 3,486,508 shares of its common stock under its open market share
repurchase program.
Suiza Foods Corporation is the nation's leading dairy processor and
distributor, producing a full line of company-branded and customer-branded
products such as fluid milk, ice cream and novelties, coffee creamers,
half-and-half, whipping cream, sour cream, cottage cheese and yogurt. Suiza also
manufactures and distributes fruit juices and other flavored drinks, bottled
water and coffee. In addition to the newly acquired Southern Foods brands, Suiza
sells its dairy products under various brands including national brands (such as
International Delight(R), Sun Soy(R), Second Nature(R), Naturally Yours(R) and
Mocha Mix(R)), strong regional brands (such as Broughton(R), Country Fresh(R),
Dairymens(R), Lehigh Valley Farms(R), London's(R), Model(TM), Natural by
Garelick Farms(R), Suiza(TM), Louis Trauth(TM), Tuscan(R), Velda Farms(R) and
West Lynn Creamery(R)) and partner or licensed brands in certain regions
(including Lactaid(R), Flav-O-Rich(R) and Pet(R)). Suiza also has holdings in
the consumer goods packaging industry.
###
