EXECUTION COPY
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SUIZA FOODS CORPORATION
_____________________________
SUPPLEMENTAL CREDIT AGREEMENT
$90,000,000 of $250,000,000 Aggregate Credit Facility
Dated as of September 6, 1996
______________________________
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
as Agent
THE FIRST NATIONAL BANK OF CHICAGO,
as Syndication Agent
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TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it is
attached but is inserted for convenience of reference only.
PAGE
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Section 1. Definitions and Accounting Matters. . . . . . . . . . . . . . 1
1.01 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . 1
1.02 Accounting Terms and Determinations . . . . . . . . . . . . . 26
1.03 Types of Facility C Loans . . . . . . . . . . . . . . . . . . 27
Section 2. Facility C Commitments, Facility C Loans, Facility C Notes
and Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.01 Facility C Loans. . . . . . . . . . . . . . . . . . . . . . . 27
2.02 Borrowings. . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.03 Changes of Facility C Commitments . . . . . . . . . . . . . . 28
2.04 Commitment Fee. . . . . . . . . . . . . . . . . . . . . . . . 28
2.05 Lending Offices . . . . . . . . . . . . . . . . . . . . . . . 28
2.06 Several Obligations; Remedies Independent . . . . . . . . . . 28
2.07 Facility C Notes. . . . . . . . . . . . . . . . . . . . . . . 29
2.08 Optional Prepayments and Conversions or Continuations of
Facility C Loans. . . . . . . . . . . . . . . . . . . . . . . 29
2.09 Mandatory Prepayments . . . . . . . . . . . . . . . . . . . . 30
Section 3. Payments of Principal and Interest. . . . . . . . . . . . . . 33
3.01 Repayment of Facility C Loans . . . . . . . . . . . . . . . . 33
3.02 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 4. Payments; Pro Rata Treatment; Computations; Etc. . . . . . . 34
4.01 Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.02 Pro Rata Treatment. . . . . . . . . . . . . . . . . . . . . . 35
4.03 Computations. . . . . . . . . . . . . . . . . . . . . . . . . 35
4.04 Minimum Amounts . . . . . . . . . . . . . . . . . . . . . . . 36
4.05 Certain Notices . . . . . . . . . . . . . . . . . . . . . . . 36
4.06 Non-Receipt of Funds by the Agent . . . . . . . . . . . . . . 37
4.07 Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . 38
Section 5. Yield Protection, Etc. . . . . . . . . . . . . . . . . . . . 39
5.01 Additional Costs. . . . . . . . . . . . . . . . . . . . . . . 39
5.02 Limitation on Types of Facility C Loans . . . . . . . . . . . 42
(i)
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5.03 Illegality. . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.04 Treatment of Affected Facility C Loans. . . . . . . . . . . . 43
5.05 Compensation. . . . . . . . . . . . . . . . . . . . . . . . . 44
5.06 Net Payments; Taxes . . . . . . . . . . . . . . . . . . . . . 45
5.07 Replacement of Lenders. . . . . . . . . . . . . . . . . . . . 48
Section 6. Conditions Precedent. . . . . . . . . . . . . . . . . . . . . 49
6.01 Conditions to Effectiveness and Initial Lending . . . . . . . 49
6.02 Conditions Precedent to Lending for Permitted Acquisitions. . 52
6.03 Initial and Subsequent Loans. . . . . . . . . . . . . . . . . 58
Section 7. Representations and Warranties. . . . . . . . . . . . . . . . 59
7.01 Corporate Existence . . . . . . . . . . . . . . . . . . . . . 59
7.02 Financial Condition . . . . . . . . . . . . . . . . . . . . . 59
7.03 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . 61
7.04 No Breach . . . . . . . . . . . . . . . . . . . . . . . . . . 61
7.05 Action. . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
7.06 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . 62
7.07 Use of Credit . . . . . . . . . . . . . . . . . . . . . . . . 62
7.08 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
7.09 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
7.10 Investment Company Act. . . . . . . . . . . . . . . . . . . . 63
7.11 Public Utility Holding Company Act. . . . . . . . . . . . . . 63
7.12 Material Agreements and Liens . . . . . . . . . . . . . . . . 63
7.13 Environmental Matters . . . . . . . . . . . . . . . . . . . . 64
7.14 Capitalization. . . . . . . . . . . . . . . . . . . . . . . . 66
7.15 Subsidiaries, Etc.. . . . . . . . . . . . . . . . . . . . . . 67
7.16 Title to Assets . . . . . . . . . . . . . . . . . . . . . . . 68
7.17 True and Complete Disclosure. . . . . . . . . . . . . . . . . 68
7.18 Real Property . . . . . . . . . . . . . . . . . . . . . . . . 68
7.19 Solvency. . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 8. Covenants of the Company. . . . . . . . . . . . . . . . . . . 69
8.01 Financial Statements, Etc.. . . . . . . . . . . . . . . . . . 69
8.02 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . 73
8.03 Existence, Etc. . . . . . . . . . . . . . . . . . . . . . . . 73
8.04 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 74
8.05 Prohibition of Fundamental Changes. . . . . . . . . . . . . . 77
8.06 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . 78
8.07 Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . 80
8.08 Investments . . . . . . . . . . . . . . . . . . . . . . . . . 81
(ii)
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8.09 Restricted Payments. . . . . . . . . . . . . . . . . . . . . 82
8.10 Leverage Ratios. . . . . . . . . . . . . . . . . . . . . . . 83
8.11 Minimum Net Worth. . . . . . . . . . . . . . . . . . . . . . 84
8.12 Fixed Charges Ratio. . . . . . . . . . . . . . . . . . . . . 84
8.13 Interest Coverage Ratio. . . . . . . . . . . . . . . . . . . 84
8.14 Capital Expenditures . . . . . . . . . . . . . . . . . . . . 85
8.15 Interest Rate Protection Agreements. . . . . . . . . . . . . 86
8.16 Lines of Business. . . . . . . . . . . . . . . . . . . . . . 86
8.17 Transactions with Affiliates . . . . . . . . . . . . . . . . 87
8.18 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . 87
8.19 Certain Obligations Respecting Subsidiaries; Additional
Mortgaged Properties . . . . . . . . . . . . . . . . . . . . 87
8.20 Modifications of Certain Documents . . . . . . . . . . . . . 89
8.21 Further Assurances . . . . . . . . . . . . . . . . . . . . . 89
8.22 Subordinated Indebtedness. . . . . . . . . . . . . . . . . . 90
Section 9. Events of Default. . . . . . . . . . . . . . . . . . . . . . 91
Section 10. The Agent. . . . . . . . . . . . . . . . . . . . . . . . . . 95
10.01 Appointment, Powers and Immunities . . . . . . . . . . . . . 95
10.02 Reliance by Agent. . . . . . . . . . . . . . . . . . . . . . 96
10.03 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . 96
10.04 Rights as a Lender . . . . . . . . . . . . . . . . . . . . . 97
10.05 Indemnification. . . . . . . . . . . . . . . . . . . . . . . 97
10.06 Non-Reliance on Agent and Other Lenders. . . . . . . . . . . 98
10.07 Failure to Act . . . . . . . . . . . . . . . . . . . . . . . 98
10.08 Resignation or Removal of Agent. . . . . . . . . . . . . . . 98
10.09 Agency Fee . . . . . . . . . . . . . . . . . . . . . . . . . 99
10.10 Consents under Other Loan Documents. . . . . . . . . . . . . 99
10.11 Syndication Agent. . . . . . . . . . . . . . . . . . . . . . 100
Section 11. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . 100
11.01 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
11.02 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 100
11.03 Expenses, Etc. . . . . . . . . . . . . . . . . . . . . . . . 100
11.04 Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . 102
11.05 Successors and Assigns . . . . . . . . . . . . . . . . . . . 103
11.06 Assignments and Participations . . . . . . . . . . . . . . . 103
11.07 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . 106
11.08 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . 106
11.09 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 106
(iii)
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11.10 Governing Law; Submission to Jurisdiction; Service of
Process and Venue. . . . . . . . . . . . . . . . . . . . . . 106
11.11 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . 108
11.12 Treatment of Certain Information; Confidentiality. . . . . . 108
11.13 Intention of Parties . . . . . . . . . . . . . . . . . . . . 109
(iv)
SCHEDULE I - Existing Material Agreements and Liens
SCHEDULE II - Environmental Matters
SCHEDULE III - Subsidiaries and Investments
SCHEDULE IV - Real Property
SCHEDULE V - Litigation
SCHEDULE VI - Existing Puerto Rico Security Documents
SCHEDULE VII - Existing Mortgages
EXHIBIT A-1 - Form of Note
EXHIBIT B - Form of Account Designation Letter
EXHIBIT C-1 - Form of Amendment No. 2 to Security Agreement
EXHIBIT C-2 - Form of Supplemental Subsidiary Guarantee and Security Agreement
EXHIBIT C-3 - Form of Guarantee Agreement
EXHIBIT D-1 - Form of Mortgage
EXHIBIT D-2 - Form of Deed of Trust
EXHIBIT E-1 - Form of Opinion of Counsel to the Obligors
EXHIBIT E-2 - Form of Opinion of Puerto Rico Counsel to the Obligors
EXHIBIT F - Form of Opinion of Local Counsel
EXHIBIT G - Form of Opinion of Special New York Counsel to First Union
EXHIBIT H - Form of Confidentiality Agreement
EXHIBIT I - Form of Assignment and Acceptance
EXHIBIT J - Form of Amendment No. 2 to Subordination Agreement
(v)
SUPPLEMENTAL CREDIT AGREEMENT dated as of September 6, 1996 between:
SUIZA FOODS CORPORATION, a corporation duly organized and validly existing under
the laws of the State of Delaware (the "COMPANY"); each of the lenders that is a
signatory hereto identified under the caption "LENDERS" on the signature pages
hereto or that, pursuant to Section 11.06(b) hereof, shall become a "Lender"
hereunder (individually, a "LENDER" and collectively, the "LENDERS"); and FIRST
UNION NATIONAL BANK OF NORTH CAROLINA, a national banking association, as agent
for the Lenders (in such capacity, together with its successors in such
capacity, the "AGENT").
WHEREAS, the Company, certain ▇▇▇▇▇▇▇ and the Agent are party to an
Amended and Restated Credit Agreement dated as of July 17, 1996, as amended by
Amendment and Waiver dated as of August 7, 1996 and as amended by Amendment
No. 2 dated of even date herewith (the "EXISTING CREDIT AGREEMENT") providing,
subject to the terms and conditions thereof, for extensions of credit (by making
of loans and issuing letters of credit) to be made by the Lenders party thereto,
to the Company in an aggregate principal or face amount not exceeding
$160,000,000.
WHEREAS, the parties hereto now wish to supplement the Existing Credit
Agreement, among other things, providing a new revolving credit facility for the
purpose of providing financing for the acquisition by the Company or its
Subsidiaries from time to time of assets, business or capital stock of certain
Persons and related fees, commissions and expenses.
WHEREAS, each of the Obligors (as hereinafter defined) expects to
derive benefit, directly or indirectly, from the loans so made to the Company,
both in its separate capacity and as a member of the integrated group, since the
successful operation of each of the Company and its Subsidiaries is dependent on
the continued successful performance of the functions of the integrated group as
a whole.
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Accordingly, the parties hereto hereby agree as follows:
Section 1. DEFINITIONS AND ACCOUNTING MATTERS.
1.01 CERTAIN DEFINED TERMS. As used herein, the following terms
shall have the following meanings (all terms defined in this Section 1.01 or in
other provisions of this Agreement in the singular to have the same meanings
when used in the plural and vice versa):
"ACCOUNT DESIGNATION LETTER" shall mean a letter in substantially the
form of Exhibit B hereto.
"ADDITIONAL PUERTO RICO SECURITY DOCUMENTS" shall have the meaning
assigned to such term in Section 8.21 hereof.
"AFFILIATE" shall mean any Person that directly or indirectly
controls, or is under common control with, or is controlled by, the Company 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 Company or
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any of its Subsidiaries and (b) none of the Wholly Owned Subsidiaries of the
Company shall be Affiliates.
"AMENDMENT NO. 2 TO SECURITY AGREEMENT" shall mean the Amendment No. 2
to Security Agreement substantially in the form of Exhibit C-1 hereto between
the Company and the Agent, as the same shall be modified and supplemented and in
effect from time to time.
"APPLICABLE COMMITMENT FEE RATE" shall mean 0.375% per annum; PROVIDED
that if the Leverage Ratio as at the last day of any fiscal quarter of the
Company ending on or after the Closing Date shall fall within any of the ranges
set forth below then, upon the delivery to the Agent of a certificate of a
Responsible Financial Officer of the Company (which shall accompany the
financial statements for such fiscal quarter delivered under Section 8.01(a)
hereof on which the calculation of such Leverage Ratio is based) demonstrating
such fact prior to the end of the next succeeding fiscal quarter, the
"Applicable Commitment Fee Rate" shall be reduced to the rate per annum set
forth below opposite such range during the period commencing on the third
Business Day following the date of receipt of such certificate to but not
including the date the next such certificate to be delivered under this
definition is delivered or due, whichever is earlier (except that,
notwithstanding the foregoing, the Applicable Commitment Fee Rate shall not as a
consequence of this proviso be so reduced for any period during which an Event
of Default shall have occurred and be continuing):
RANGE
OF
LEVERAGE RATIO APPLICABLE COMMITMENT FEE RATE
-------------- ------------------------------
Less than 2.0:1 0.20%
Equal to or greater than 0.25%
2.0:1 but less
than 2.50:1
-4-
"APPLICABLE LENDING OFFICE" shall mean, for each Lender and for each
Type of Loan, the "Lending Office" of such Lender (or of an affiliate of such
Lender) designated for such Type of Loan on the signature pages hereof or such
other office of such Lender (or of an affiliate of such Lender) as such Lender
may from time to time specify to the Agent and the Company as the office by
which its Facility C Loans of such Type are to be made and maintained.
"APPLICABLE MARGIN" shall mean: with respect to Facility C Loans
that are Base Rate Loans, 0.25% and/or Eurodollar Loans, 1.5% per annum;
PROVIDED that if the Leverage Ratio as at the last day of any fiscal quarter of
the Company ending on or after the Closing Date shall fall within any of the
ranges set forth below then, upon the delivery to the Agent of a certificate of
a Responsible Financial Officer of the Company (which shall accompany the
financial statements for such fiscal quarter delivered under Section 8.01(a)
hereof on which the calculation of such Leverage Ratio is based) demonstrating
such fact prior to the end of the next succeeding fiscal quarter, the
"Applicable Margin" for each Facility C Loan shall be adjusted upwards or
downwards, as the case may be, to the rate per annum for the respective Type of
Facility C Loan set forth below opposite such range during the period commencing
on the third Business Day following the date of receipt of such certificate to
but not including the date the next succeeding such certificate to be delivered
hereunder is delivered or due, whichever is earlier (except that,
notwithstanding the foregoing, the Applicable Margin for any such Facility C
Loan shall not as a consequence of this proviso be so reduced for any period
during which an Event of Default shall have occurred and be continuing):
RANGE APPLICABLE MARGIN (% P.A.)
OF ------------------------------------
LEVERAGE RATIO BASE RATE LOANS EURODOLLAR LOANS
-------------- --------------- ----------------
Less than 2.0:1 0% 0.75%
-5-
Equal to or greater than 0% 1.0%
2.0:1 but less
than 2.50:1
Equal to or greater than 0% 1.25%
2.50:1 but less than
3.25:1
Equal to or greater than 0.25% 1.50%
3.25:1 but less than
3.75:1
Equal to or greater than 0.50% 1.75%
3.75:1 but less than
4.0:1
Equal to or greater than 0.75% 2.00%
4.0:1
"BANKRUPTCY CODE" shall mean the Federal Bankruptcy Code of 1978, as
amended from time to time.
"BASE RATE" shall mean, for any day, a rate per annum equal to the
higher of (a) the Federal Funds Rate for such day PLUS 1/2 of 1% and (b) the
Prime Rate for such day. Each change in any interest rate provided for herein
based upon the Base Rate resulting from a change in the Base Rate shall take
effect at the time of such change in the Base Rate.
"BASE RATE LOANS" shall mean Facility C Loans that bear interest at
rates based upon the Base Rate.
"BASIC DOCUMENTS" shall mean, collectively, the Loan Documents and,
except for purposes of the definitions of "Secured Obligations" and "Guaranteed
Obligations" in any of the Security Documents, the Purchase Agreements and the
Subordinated Debt Documents.
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"BUSINESS DAY" shall mean (a) any day on which commercial banks are
not authorized or required to close in North Carolina and (b) if such day
relates to a borrowing of, a payment or prepayment of principal of or interest
on, a Conversion of or into, or an Interest Period for, a Eurodollar Loan or a
notice by the Company with respect to any such borrowing, payment, prepayment,
Conversion or Interest Period, any day on which dealings in Dollar deposits are
carried out in the London interbank market.
"CAPITAL EXPENDITURES" shall mean, for any period, expenditures
(including, without limitation, the aggregate amount of Capital Lease
Obligations incurred during such period) made by the Company or any of its
Subsidiaries to acquire or construct fixed assets, plant and equipment
(including renewals, improvements and replacements, but excluding repairs)
during such period computed in accordance with GAAP.
"CAPITAL LEASE OBLIGATIONS" shall mean, for any Person, all
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) Property to the extent such
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP, and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.
"CASUALTY EVENT" shall mean, with respect to any Property of any
Person, any loss of or damage to, or any condemnation or other taking of, such
Property for which such Person or any of its Subsidiaries receives insurance
proceeds, proceeds of a condemnation award or other compensation.
"CLOSING DATE" shall mean the date of the initial Facility C Loans
hereunder.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
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"COLLATERAL ACCOUNT" shall mean with respect to the Company and any of
its Subsidiaries, the Collateral Account as defined in the Security Agreement.
"COMMISSION" shall mean the Securities and Exchange Commission or any
governmental agency substituted therefor.
"COMMONWEALTH" shall mean the Commonwealth of Puerto Rico and its
political subdivisions, municipalities, agencies and instrumentalities.
"COMPANY" shall have the meaning assigned to such term in the preamble
of this Agreement.
"CONTINUE", "CONTINUATION" and "CONTINUED" shall refer to the
continuation pursuant to Section 2.08 hereof of a Eurodollar Loan from one
Interest Period to the next Interest Period.
"CONVERT", "CONVERSION" and "CONVERTED" shall refer to a conversion
pursuant to Section 2.08 hereof of one Type of Facility C Loans into another
Type of Facility C Loans, which may be accompanied by the transfer by a Lender
(at its sole discretion) of a Facility C Loan from one Applicable Lending Office
to another.
"DEBT SERVICE" shall mean, for any period, the sum, for the Company
and its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) all payments of principal of
Indebtedness (including, without limitation, the principal component of any
payments in respect of Capital Lease Obligations) scheduled to be made during
such period PLUS (b) all Interest Expense for such period, it being understood
that, if any installment of principal of the Facility C Loans or the Facility B
Loans shall have been prepaid during or prior to such period, the amount of
principal of the Facility C Loans and the Facility B Loans included in Debt
Service for such period shall be equal to the aggregate amount of principal of
the Facility C Loans and the Facility B Loans
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originally scheduled to be paid hereunder and under the Existing Credit
Agreement during such period.
"DEFAULT" shall mean an Event of Default or an event that with notice
or lapse of time or both would become an Event of Default.
"DISPOSITION" shall mean any sale, assignment, transfer or other
disposition of any Property (whether now owned or hereafter acquired) by the
Company or any of its Subsidiaries to any other Person excluding any sale,
assignment, transfer or other disposition of any Property sold or disposed of in
the ordinary course of business and on ordinary business terms.
"DIVIDEND PAYMENT" shall mean dividends (in cash, Property or
obligations) on, or other payments or distributions on account of, or the
setting apart of money for a sinking or other analogous fund for, or the
purchase, redemption, retirement or other acquisition of, any shares of any
class of stock of the Company or of any warrants, options or other rights to
acquire the same (or to make any payments to any Person, such as "phantom stock"
payments, where the amount thereof is calculated with reference to the fair
market or equity value of the Company or any of its Subsidiaries), but excluding
dividends payable solely in shares of common stock of the Company.
"DOLLARS" and "$" shall mean lawful money of the United States.
"EBITDA" shall mean, for any period, the sum, for the Company and its
Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) operating income (calculated
before income taxes, Interest Expense, extraordinary and unusual items and
income or loss attributable to equity in Affiliates) for such period PLUS
(b) depreciation and amortization (to the extent deducted in determining
operating income) for such period PLUS (c) other income not exceeding $1,500,000
for such period.
-9-
"ENVIRONMENTAL CLAIM" shall mean, with respect to any Person, any
written or oral 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 present and future
Federal, state, local and foreign laws, rules or regulations, and any orders or
decrees, in each case as now or hereafter in effect, relating to the regulation
or protection of human health, safety or the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals or toxic or hazardous substances or wastes into the indoor or outdoor
environment, including, without limitation, ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals or toxic or
hazardous substances or wastes.
"EQUITY ISSUANCE" shall mean (a) any issuance or sale by the Company
or any of its Subsidiaries after the Closing Date of (i) any capital stock,
(ii) any warrants or options exercisable in respect of capital stock (other than
any warrants or options issued to directors, officers or employees of the
Company or any of its Subsidiaries, pursuant to employee benefit
-10-
plans established in the ordinary course of business and any capital stock of
the Company or any of its Subsidiaries issued upon the exercise of such
warrants or options) or (iii) any other security or instrument representing
an equity interest (or the right to obtain any equity interest) in the
Company or any of its Subsidiaries or (b) the receipt by the Company or any
of its Subsidiaries whether directly (or indirectly through one or more of
its Subsidiaries) after the Closing Date of any capital contribution (whether
or not evidenced by any equity security issued by the recipient of such
contribution); PROVIDED that Equity Issuance shall not include (x) any such
issuance or sale by any Subsidiary of the Company to the Company or any
Wholly Owned Subsidiary of the Company or (y) any capital contribution by the
Company or any Wholly Owned Subsidiary of the Company to any Subsidiary of
the Company.
"EQUITY RIGHTS" shall mean, with respect to any Person, any
subscriptions, options, warrants, commitments, preemptive rights or
agreements of any kind (including, without limitation, any stockholders' or
voting trust agreements) for the issuance, sale, registration or voting of,
or securities convertible into, any additional shares of capital stock of any
class, or partnership or other ownership interests of any type in, such
Person.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"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 the Company is a member and (ii) solely
for purposes of potential liability under Section 302(c)(11) of ERISA and
Section 412(c)(11) 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 the Company is a member.
"EURODOLLAR BASE RATE" shall mean, with respect to any Eurodollar
Loan for any Interest Period therefor, the rate per
-11-
annum for deposits in Dollars for a period comparable to such Interest Period
which appears on the Telerate Page 3750 as of 11:00 a.m. London time two
Business Days preceding the first day of such Interest Period or, if Telerate
Page 3750 is unavailable at such time, the rate which appears on the Reuters
Screen ISDA Page as of such date and time; PROVIDED, however, that if Agent
determines that the relevant foregoing source is unavailable for the relevant
Interest Period, Eurodollar Base Rate shall mean the rate of interest
determined by the Agent to be the average (rounded upward, if necessary, to
the nearest 1/100th of 1%) of the rates per annum at which deposits in
Dollars in immediately available funds are offered to the Agent or other
money center banks two Business Days preceding the first day of such Interest
Period by leading banks in the London interbank market as of 11:00 a.m.
London time for delivery on the first day of such Interest Period, for the
number of days comprised therein and in an amount comparable to the amount of
the relevant Eurodollar Loan.
"EURODOLLAR LOANS" shall mean Facility C Loans that bear interest
at rates based on rates referred to in the definition of "Eurodollar Base
Rate" in this Section 1.01.
"EURODOLLAR RATE" shall mean, for any Eurodollar Loan for any
Interest Period therefor, a rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined by the Agent to be equal to the
Eurodollar Base Rate for such Eurodollar Loan for such Interest Period
divided by 1 MINUS the Reserve Requirement (if any) for such Eurodollar Loan
for such Interest Period.
"EVENT OF DEFAULT" shall have the meaning assigned to such term in
Section 9 hereof.
"EXCESS CASH FLOW" shall mean, for any period, the sum, determined
without duplication, for the Company and its Subsidiaries, of (a) EBITDA for
such period MINUS (b) Capital Expenditures made during such period (other
than Capital Expenditures made from the proceeds of Indebtedness permitted
under Section 8.07 hereof) MINUS (c) the aggregate amount of Debt
-12-
Service for such period PLUS (d) decreases (if any) (or MINUS increases (if
any)) in Working Capital for such period, MINUS (e) income taxes paid in cash
for such period.
"EXCLUDED DISPOSITION" shall mean the Disposition of (i) an
Investment Tax Credit or (ii) any motor vehicles or other equipment no longer
used or useful in the business of the Company or any of its Subsidiaries to
the extent the proceeds thereof are used to acquire similar replacement
Property within a period of 30 days after the end of the fiscal quarter in
which such Disposition was made.
"EXISTING SUBSIDIARY GUARANTEE AND SECURITY AGREEMENT" shall mean
the Subsidiary Guarantee and Security Agreement dated as of March 31, 1995
between each Subsidiary of the Company party thereto and the Agent, as the
same shall be modified and supplemented and in effect from time to time.
"FACILITY A COMMITMENT" shall have the meaning assigned thereto in
the Existing Credit Agreement.
"FACILITY A COMMITMENT PERCENTAGE" shall have the meaning assigned
thereto in the Existing Credit Agreement.
"FACILITY A LENDER" shall have the meaning assigned thereto in the
Existing Credit Agreement.
"FACILITY A LOAN" shall have the meaning assigned thereto in the
Existing Credit Agreement.
"FACILITY B COMMITMENT" shall have the meaning assigned thereto in
the Existing Credit Agreement.
"FACILITY B COMMITMENT PERCENTAGE" shall have the meaning assigned
thereto in the Existing Credit Agreement.
"FACILITY B LENDER" shall have the meaning assigned thereto in the
Existing Credit Agreement.
-13-
"FACILITY B LOAN" shall have the meaning assigned thereto in the
Existing Credit Agreement.
"FACILITY C COMMITMENT" shall mean, for each Lender, the obligation
of such Lender to make Facility C Loans to the Company in an aggregate amount
at any one time outstanding up to but not exceeding the amount set forth
opposite the name of such Lender on the signature pages hereof under the
caption "Facility C Commitment" (as the same may be reduced from time to time
pursuant to Section 2.03 hereof). The original aggregate principal amount of
the Facility C Commitments is $90,000,000.
"FACILITY C COMMITMENT PERCENTAGE" shall mean, with respect to any
Facility C Lender, the ratio of (a) the amount of the Facility C Commitment
of such Lender to (b) the aggregate amount of the Facility C Commitments of
all of the Facility C Lenders.
"FACILITY C COMMITMENT TERMINATION DATE" shall mean the Quarterly
Date falling on or nearest to September 30, 1998.
"FACILITY C LENDERS" shall mean the Lenders having Facility C
Commitments and/or holding Facility C Loans from time to time.
"FACILITY C LOANS" shall mean the loans provided for by Section
2.01(a) hereof, which may be Base Rate Loans and/or Eurodollar Loans.
"FACILITY C NOTES" shall mean the promissory notes provided for by
Section 2.07(a) hereof and all promissory notes delivered in substitution or
exchange therefor, in each case as the same shall be modified and
supplemented and in effect from time to time.
"FEDERAL FUNDS RATE" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on
such day, as
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published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, PROVIDED that (a) if the day for which such rate is to
be determined is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business Day as
so published on the next succeeding Business Day and (b) if such rate is not
so published for any Business Day, the Federal Funds Rate for such Business
Day shall be the average rate charged to First Union on such Business Day on
such transactions as determined by the Agent.
"FIRST UNION" shall mean First Union National Bank of North Carolina.
"FIXED CHARGES" shall mean, for any period, the sum, for the
Company and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) the aggregate
amount of Debt Service for such period, PLUS (b) the aggregate amount of
taxes paid in respect of the income or profit of the Company and its
Subsidiaries for such period, PLUS (c) Capital Expenditures made during such
period, PLUS (d) any Dividend Payments made for such period PLUS (e)
Management Fees for such period (but only to the extent such Management Fees
are not included in the calculation of EBITDA); provided that Capital
Expenditures shall not include Capital Expenditures permitted to be incurred
pursuant to the last sentence of Section 8.14 hereof.
"FIXED CHARGES RATIO" shall mean, as at any date, the ratio of (a)
EBITDA for the period of four consecutive fiscal quarters ending on or most
recently ended prior to such date to (b) Fixed Charges for such period.
"GAAP" shall mean generally accepted accounting principles applied
on a basis consistent with those that, in accordance with the last sentence
of Section 1.02(a) hereof, are to be used in making the calculations for
purposes of determining compliance with this Agreement.
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"▇▇▇▇▇▇▇" shall mean ▇▇▇▇▇▇▇ y Compania, Inc., a Puerto Rico
corporation.
"▇▇▇▇▇▇▇ NEGATIVE PLEDGE AGREEMENT" shall have the meaning assigned
to such term in the Existing Credit Agreement.
"GUARANTEE" shall mean a guarantee, an endorsement, a contingent
agreement to purchase or to furnish funds for the payment or maintenance of,
or otherwise to be or become contingently liable under or with respect to,
the Indebtedness, other obligations, net worth, working capital or earnings
of any Person, or a guarantee of the payment of dividends or other
distributions upon the stock or equity interests of any Person, or an
agreement to purchase, sell or lease (as lessee or lessor) Property,
products, materials, supplies or services primarily for the purpose of
enabling a debtor to make payment of such debtor's obligations or an
agreement to assure a creditor against loss, and including, without
limitation, causing a bank or other financial institution to issue a letter
of credit or other similar instrument for the benefit of another Person, but
excluding endorsements for collection or deposit in the ordinary course of
business. The terms "GUARANTEE" and "GUARANTEED" used as a verb shall have a
correlative meaning.
"GUARANTEE AGREEMENT" shall mean the Guarantee Agreement
substantially in the form of Exhibit C-3.
"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 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
-16-
or hereafter prohibited, limited or regulated under any Environmental Law.
"INDEBTEDNESS" shall mean, for any Person: (a) obligations
created, issued or incurred by such Person for borrowed money (whether by
loan, the issuance and sale of debt securities or the sale of Property to
another Person subject to an understanding or agreement, contingent or
otherwise, to repurchase such Property from such Person); (b) obligations of
such Person to pay the deferred purchase or acquisition price of Property or
services, other than trade accounts payable (other than for borrowed money)
arising, and accrued expenses incurred, in the ordinary course of business so
long as such trade accounts payable are payable within 120 days of the date
the respective goods are delivered or the respective services are rendered;
(c) Indebtedness of others secured by a Lien on the Property of such Person,
whether or not the respective indebtedness so secured has been assumed by
such Person; (d) obligations of such Person in respect of letters of credit
or similar instruments issued or accepted by banks and other financial
institutions for account of such Person; (e) Capital Lease Obligations of
such Person; and (f) Indebtedness of others Guaranteed by such Person.
"INTEREST COVERAGE RATIO" shall mean, as at any date, the ratio of
(a) EBITDA for a period of four consecutive fiscal quarters ending on, or
most recently ended prior to, such date to (b) Interest Expense for such
period.
"INTEREST EXPENSE" shall mean, for any period, the sum, for the
Company and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) all interest in
respect of Indebtedness (including, without limitation, the interest
component of any payments in respect of Capital Lease Obligations, but
excluding amortization of any deferred loan costs incurred in connection with
the transactions contemplated hereby or by the Existing Credit Agreement)
capitalized or expensed during such period (whether or not actually paid
during such period), but excluding any non-cash interest, PLUS (b) the net
amount payable (or MINUS the net amount receivable) under Interest Rate
Protection
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Agreements during such period (whether or not actually paid or received
during such period) MINUS (c) all interest income for such period.
"INTEREST PERIOD" shall mean with respect to any Eurodollar Loan,
each period commencing on the date such Eurodollar Loan is made or Converted
from a Base Rate Loan or the last day of the next preceding Interest Period
for such Eurodollar Loan and ending on the numerically corresponding day in
the first, second, third or sixth calendar month thereafter, as the Company
may select as provided in Section 4.05 hereof, except that each Interest
Period for a Eurodollar Loan that commences on the last Business Day of a
calendar month (or on any day for which there is no numerically corresponding
day in the appropriate subsequent calendar month) shall end on the last
Business Day of the appropriate subsequent calendar month. Notwithstanding
the foregoing: (i) no Interest Period for any Eurodollar Loan may commence
before and end after any Principal Payment Date for the Facility C Loans
unless, after giving effect thereto, the aggregate principal amount of the
Facility C Loans having Interest Periods that end after such Principal
Payment Date shall be equal to or less than the aggregate principal amount of
the Facility C Loans scheduled to be outstanding after giving effect to the
payments of principal required to be made on such Principal Payment Date;
(ii) each Interest Period that would otherwise end on a day that is not a
Business Day shall end on the next succeeding Business Day (or, if such next
succeeding Business Day falls in the next succeeding calendar month, on the
next preceding Business Day); and (iii) notwithstanding clauses (i) and (ii)
above, no Interest Period shall have a duration of less than one month for
any Facility C Loan and, if the Interest Period for any such Facility C Loan
would otherwise be a shorter period, such Facility C Loan shall not be
available as a Eurodollar Loan hereunder for such period.
"INTEREST RATE PROTECTION AGREEMENT" shall mean, for any Person, an
interest rate swap, cap or collar agreement or similar arrangement between
such Person and one or more financial institutions providing for the transfer
or mitigation of interest risks either generally or under specific
contingencies.
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"INTEREST RATE PROTECTION OBLIGATIONS" shall mean the obligations
of any Obligor in respect of Interest Rate Protection Agreements permitted
under Section 8.08(d) hereof.
"INVESTMENT" shall mean, for any Person: (a) the acquisition
(whether for cash, Property, services or securities or otherwise) of capital
stock, bonds, notes, debentures, partnership or other ownership interests or
other securities of any other Person or any agreement to make any such
acquisition (including, without limitation, any "short sale" or any sale of
any securities at a time when such securities are not owned by the Person
entering into such sale); (b) the making of any deposit with, or advance,
loan or other extension of credit to, any other Person (including the
purchase of Property from another Person subject to an understanding or
agreement, contingent or otherwise, to resell such Property to such Person),
but excluding any such advance, loan or extension of credit having a term not
exceeding 90 days representing the purchase price of inventory or supplies
sold by such Person in the ordinary course of business); (c) the entering
into of any Guarantee of, or other contingent obligation with respect to,
Indebtedness or other liability of any other Person and (without duplication)
any amount committed to be advanced, lent or extended to such Person; or (d)
the entering into of any Interest Rate Protection Agreement.
"INVESTMENT TAX CREDIT" shall mean an investment tax credit to
which the Company or any of its Subsidiaries may be entitled pursuant to the
Puerto Rico Agricultural Tax Incentives Act of 1995.
"LEVERAGE RATIO" shall mean, as at any date, the ratio of (a) the
aggregate outstanding principal amount of Indebtedness at such date to (b)
EBITDA for the period of four consecutive fiscal quarters ending on, or most
recently ended prior to, such date; provided that if the Company or any of
its Subsidiaries shall have acquired any business, Property or Person during
such period (whether before, on or after the date hereof), EBITDA shall, to
the extent the Company shall have delivered audited financial statements (or,
if audited financial statements are not
-19-
available to the Company, unaudited financial statements (i) reviewed by
independent certified accountants of recognized national standing and
acceptable to the Agent and (ii) in form satisfactory to the Agent) for the
acquired business, Property or Person for such period, be adjusted to reflect
on a pro forma basis EBITDA for such business, Property or Person as if such
business, Property or Person had been acquired at the beginning of such
period.
"LIEN" shall mean, with respect to any Property, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in respect
of such Property. For purposes of this Agreement and the other Loan
Documents, a Person shall be deemed to own, subject to a Lien, any Property
that it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement (other than an operating lease) relating to such Property.
"LOAN DOCUMENTS" shall mean, collectively, this Agreement, the
Existing Credit Agreement, the Facility C Notes, the Facility A Notes, the
Facility B Notes and the Security Documents.
"MAJORITY LENDERS" shall mean, as at any time, ▇▇▇▇▇▇▇ having at
least a majority of the sum of (a) the aggregate unused amount, if any, of
the Facility C Commitments as at such time PLUS (b) the aggregate outstanding
principal amount of the Facility C Loans at such time.
"MANAGEMENT FEES" shall mean, for any period, any amounts paid or
incurred by the Company or any of its Subsidiaries to any Person on account
of fees, salaries and other compensation in respect of services rendered in
connection with the management or supervision of the Company and/or any of
its Subsidiaries (but excluding customary and reasonable compensation and
other benefits paid or provided to officers, employees and directors for
services rendered to the Company or any of its Subsidiaries in such
capacities or any such amounts by any
-20-
Subsidiary of the Company to the Company or any other Subsidiary of the
Company).
"MARGIN STOCK" shall mean "margin stock" within the meaning of
Regulations U and X.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on
(a) the Property, business, operations, financial condition, prospects,
liabilities or capitalization of the Company and its Subsidiaries taken as a
whole, (b) the ability of any Obligor to perform its obligations under any of
the Loan Documents to which it is a party, (c) the validity or enforceability
of any of the Loan Documents, (d) the rights and remedies of the Lenders and
the Agent under any of the Loan Documents or (e) the timely payment of the
principal of or interest on the Facility C Loans or other amounts payable in
connection therewith or under the Loan Documents.
"MORTGAGES" shall mean, collectively, (a) the mortgages or deeds of
trust identified in Schedule VII hereto and (b) one or more mortgages or
deeds of trust, in the respective forms of Exhibits D-1 and D-2 hereto or of
Exhibits D-1 and D-2 to the Existing Credit Agreement (with such
modifications thereto requested by the Agent as may be appropriate to effect
a lien on real property in the state where the respective property to be
covered by such instrument is located), executed by the respective Obligors
who own or lease such property in favor of the Agent (or, in the case of a
deed of trust, in favor of the trustee for the benefit of the Agent and the
Lenders and/or the lenders under the Existing Credit Agreement, as the case
may be) pursuant to Sections 8.19(c) or 8.19(d) hereof or Sections 9.19(c) or
9.19(d) of the Existing Credit Agreement covering the respective Properties
and/or leasehold interests identified in Schedule IV hereto or subject to the
requirements of said Sections 8.19(c), 8.19(d), 9.19(c) or 9.19(d), as the
case may be, in each case as the same shall be modified and supplemented and
in effect from time to time.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan defined as
such in Section 3(37) of ERISA to which contributions
-21-
have been made by the Company or any ERISA Affiliate and that is covered by
Title IV of ERISA.
"NET AVAILABLE PROCEEDS" shall mean:
(a) in the case of any Disposition, the amount of Net Cash Payments
received in connection with such Disposition;
(b) in the case of any Casualty Event, the aggregate amount of
proceeds of insurance, condemnation awards and other compensation received
by the Company and its Subsidiaries in respect of such Casualty Event net
of (i) reasonable expenses incurred by the Company and its Subsidiaries in
connection therewith and (ii) contractually required repayments of
Indebtedness to the extent secured by a Lien on such Property and any
income and transfer taxes payable by the Company or any of its Subsidiaries
in respect of such Casualty Event; and
(c) in the case of any Equity Issuance, the aggregate amount of all
cash received by the Company and its Subsidiaries in respect of such Equity
Issuance net of reasonable expenses incurred by the Company and its
Subsidiaries in connection therewith.
"NET CASH PAYMENTS" shall mean, with respect to any Disposition,
the aggregate amount of all cash payments, and the fair market value of any
non-cash consideration, received by the Company and its Subsidiaries directly
or indirectly in connection with such Disposition; PROVIDED that (a) Net Cash
Payments shall be net of (i) the amount of any legal, title and recording tax
expenses, commissions and other fees and expenses paid by the Company and its
Subsidiaries in connection with such Disposition and (ii) any Federal, state
and local income or other taxes estimated to be payable by the Company and
its Subsidiaries as a result of such Disposition (but only to the extent that
such estimated taxes are in fact paid to the relevant Federal, state or local
governmental authority within six months of the date of such Disposition) and
(b) Net Cash Payments shall be net of any repayments by the Company or any of
its Subsidiaries of Indebt-
-22-
edness to the extent that (i) such Indebtedness is secured by a Lien on the
Property that is the subject of such Disposition and (ii) the transferee of
(or holder of a Lien on) such Property requires that such Indebtedness be
repaid as a condition to the Disposition thereof.
"NET PURCHASE PRICE" shall mean 100% of the purchase price
(including noncash compensation) paid by the Company or any of its
Subsidiaries for any business, Property or Person in connection with a
Permitted Acquisition MINUS any cash on the balance sheet of the Person or
included in the business or Property being acquired pursuant to such
Permitted Acquisition.
"NET WORTH" shall mean, as at any date, the sum for the Company and
its Subsidiaries (determined on a consolidated basis without duplication) 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).
"▇▇▇▇ PLASTICS" shall mean ▇▇▇▇ Plastics Manufacturing Corp., a
Delaware corporation.
"OBLIGOR" shall mean the Company and each Subsidiary of the Company
party to any Security Document.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"PERMITTED ACQUISITION" shall mean any acquisition by the Company
or any of its Subsidiaries of any business or Property from, or capital stock
of, any Person, PROVIDED that, unless otherwise consented to in writing by
the Majority Lenders (i) if the Net Purchase Price for such acquisition shall
be greater than or equal to $10,000,000, then such Net Purchase Price shall
not be greater than 6.5 times the sum of the components of the definition of
EBITDA herein (including pro forma adjustments satisfactory to the Agent)
calculated for the business, Property or Person to be acquired for the period
of 12
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months preceding the date of the proposed acquisition, (ii) the Net Purchase
Price of such acquisition shall not exceed $30,000,000 (other than the Swiss
Dairy Acquisition, which shall not exceed $54,000,000), (iii) if the subject
of such acquisition is a Person, the Company and/or its Subsidiaries shall
not acquire less than 90% of the issued and outstanding ownership interests
(including, without limitation, warrants, options or other securities
convertible into ownership interests) in such Person, (iv) prior to such
acquisition, the Company shall have delivered to the Agent for further
distribution to the Lenders copies of the proposed acquisition agreement
relating to such acquisition, all material documents related thereto and at
the reasonable request of the Agent, such other material information
respecting such business, Property or Person, as the case may be, obtained by
the Company in the exercise of its due diligence, (v) at the time of such
acquisition, the Company or its Subsidiary, as the case may be, shall grant a
security interest in such business or Property or pledge such ownership
interests to the Agent for the benefit of the Lenders, (vi) such business,
Property or Persons shall be in the same line or lines of business currently
engaged in by the Company or any of its Subsidiaries and (vii) on a pro forma
basis, after giving effect to such acquisition, the Company shall be in
compliance with Sections 8.10, 8.11, 8.12, 8.13 and 8.14 hereof.
"PERMITTED INVESTMENTS" shall mean: (a) direct obligations of the
United States, or of any agency thereof, or obligations guaranteed as to
principal and interest by the United States, or of any agency thereof, in
either case maturing not more than one year from the date of acquisition
thereof; (b) direct obligations issued by any state of the United States or
any political subdivision of any such state or any public instrumentality
thereof maturing within one year from the date of acquisition thereof and, at
the time of such acquisition, having the highest rating obtainable from
either Standard & Poor's Ratings Group, a division of ▇▇▇▇▇▇-▇▇▇▇, Inc.
("S&P") or ▇▇▇▇▇'▇ Investors Services, Inc. ("MOODY'S"); (c) certificates of
deposit issued by any bank or trust company organized under the laws of the
United States or any state thereof or the Commonwealth and having capital,
surplus and undivided profits of at least
-24-
$500,000,000, maturing not more than six months from the date of acquisition
thereof; (d) commercial paper rated A-1 or better or P-1 by S&P or Moody's,
respectively, maturing not more than six months from the date of acquisition
thereof; and (e) Eurodollar time deposits having a maturity of less than six
months purchased directly from any such bank (whether such deposit is with
such bank or any other such bank).
"PERSON" shall mean any individual, corporation, company, voluntary
association, partnership, joint venture, trust, unincorporated organization
or government (or any agency, instrumentality or political subdivision
thereof).
"PLAN" shall mean an employee benefit or other plan established or
maintained by the Company or any ERISA Affiliate and that is covered by Title
IV of ERISA, other than a Multiemployer Plan.
"POST-DEFAULT RATE" shall mean, in respect of any principal of any
Facility C Loan or any other amount under this Agreement, any Facility C Note
or any other Loan Document that is not paid when due (whether at stated
maturity, by acceleration, by mandatory prepayment or otherwise), and in
respect of any principal of any Facility C Loan during any period commencing
upon the occurrence of any Event of Default and thereafter for so long as any
Event of Default shall be continuing, a rate per annum during the period from
and including the due date to but excluding the earlier of the date on which
such amount is paid in full or such Event of Default ceases to be continuing
equal to 2% PLUS the Base Rate as in effect from time to time PLUS the
Applicable Margin for Base Rate Loans (PROVIDED that, if the amount so in
default is principal of a Eurodollar Loan and the due date thereof is a day
other than the last day of the Interest Period therefor, the "Post-Default
Rate" for such principal shall be, for the period from and including such due
date to but excluding the last day of such Interest Period, 2% PLUS the
interest rate for such Eurodollar Loan as provided in Section 3.02(b) hereof
and, thereafter, the rate provided for above in this definition).
-25-
"PRIME RATE" shall mean the rate of interest from time to time
announced by First Union at its principal office as its prime commercial
lending rate.
"PRINCIPAL PAYMENT DATES" shall mean the Quarterly Dates falling on
or nearest to March 31, June 30, September 30 and December 31 of each year,
commencing with September 30, 1998, through and including March 31, 2002.
"PROCESS AGENT" shall have the meaning assigned to such term in
Section 11.10(c) hereof.
"PROPERTY" shall mean any right or interest in or to property of
any kind whatsoever, whether real, personal (including, without limitation,
cash) or mixed and whether tangible or intangible.
"PUERTO RICO SECURITY DOCUMENTS" shall mean each of the agreements
listed in Schedule VI hereto, and each of the Additional Puerto Rico Security
Documents, in each case as any such agreement shall be modified and
supplemented and in effect from time to time.
"PURCHASE AGREEMENTS" shall mean, collectively, each Purchase
Agreement between the Company or any of its Subsidiaries and the seller of
the business, Property or Person purchased by the Company or such Subsidiary
pursuant to a Permitted Acquisition financed under this Agreement.
"QUARTERLY DATES" shall mean the last Business Day of March, June,
September and December in each year, the first of which shall be September
30, 1996.
"REGULATIONS A, D, U AND X" shall mean, respectively, Regulations
A, D, U and X of the Board of Governors of the Federal Reserve System (or any
successor), as the same may be modified and supplemented and in effect from
time to time.
"REGULATORY CHANGE" shall mean, with respect to any Lender, any
change after the date of this Agreement in United
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States, Federal, state or foreign law or regulations or in the law or
regulations of the Commonwealth (including, without limitation, Regulation D)
or the adoption or making after such date of any interpretation, directive or
request applying to a class of banks including such Lender of or under any
Federal, state or foreign law or regulations or in the law or regulations of
the Commonwealth (whether or not having the force of law and whether or not
failure to comply therewith would be unlawful) by any court or governmental
or monetary authority charged with the interpretation or administration
thereof.
"RELEASE" shall mean any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment, including, without
limitation, the movement of Hazardous Materials through ambient air, soil,
surface water, ground water, wetlands, land or subsurface strata.
"RESERVE REQUIREMENT" shall mean, for any Interest Period for any
Eurodollar Loan, the average maximum rate at which reserves (including,
without limitation, any marginal, supplemental or emergency reserves) are
required to be maintained during such Interest Period under Regulation D by
member banks of the Federal Reserve System in New York City with deposits
exceeding one billion Dollars against "Eurocurrency liabilities" (as such
term is used in Regulation D). Without limiting the effect of the foregoing,
the Reserve Requirement shall include any other reserves required to be
maintained by such member banks by reason of any Regulatory Change with
respect to (i) any category of liabilities that includes deposits by
reference to which the Eurodollar Base Rate is to be determined as provided
in the definition of "Eurodollar Base Rate" in this Section 1.01 or (ii) any
category of extensions of credit or other assets that includes Eurodollar
Loans.
"RESPONSIBLE FINANCIAL OFFICER" shall mean, with respect to any
Person, the Chairman of the Board of Directors, the President, the Chief
Executive Officer, the Chief Financial Officer or the Treasurer of such
Person.
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"SECURITY AGREEMENT" shall mean the Security Agreement dated as of
March 31, 1995 between the Company and the Agent, as amended by the Amendment
to Security Agreement dated as of July 17, 1996 between the Company and the
Agent and as amended by Amendment No. 2 to the Security Agreement and as
further modified and supplemented and in effect from time to time.
"SECURITY DOCUMENTS" shall mean, collectively, the Security
Agreement, the Mortgages, each Supplemental Subsidiary Guarantee and Security
Agreement, the Existing Subsidiary Guarantee and Security Agreement, the
Guarantee Agreement, the Puerto Rico Security Documents, all Uniform
Commercial Code financing statements and/or other filings required hereby or
thereby to be filed with respect to the security interests in personal
Property and fixtures created pursuant hereto or thereto, and the
Subordination Agreement.
"SENIOR INDEBTEDNESS" shall mean (a) the principal of, and accrued
interest on, the Facility C Loans and all other amounts owing from time to
time hereunder and under the other Loan Documents and (b) all other amounts
constituting "Senior Indebtedness" under, and as such term is defined in, the
Subordinated Note Purchase Agreement.
"SENIOR INTEREST COVERAGE RATIO" shall mean, as at any date, the
ratio of (a) EBITDA for a period of four consecutive fiscal quarters ending
on, or most recently ended prior to, such date to (b) Interest Expense in
respect of Senior Indebtedness for such period.
"SENIOR LEVERAGE RATIO" shall mean, as at any date, the ratio of
(a) the aggregate outstanding principal amount of Senior Indebtedness at such
date to (b) EBITDA for the period of four consecutive fiscal quarters ending
on or most recently ended prior to such date; provided that if the Company or
any of its Subsidiaries shall have acquired any business, Property or Person
during such period (whether before, on or after the date hereof), EBITDA
shall, to the extent the Company shall have delivered audited financial
statements (or, if audited financial statements are not available to the
Company, unaudited financial statements
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(i) reviewed by independent certified accountants of recognized national
standing and acceptable to the Majority Lenders, and (ii) in form
satisfactory to the Majority Lenders) for the acquired business, Property or
Person for such period, be adjusted to reflect on a pro forma basis EBITDA
for such business, Property or Person as if such business, Property or Person
had been acquired at the beginning of such period.
"SENIOR SUBORDINATED NOTES" shall mean the Notes (as such term is
defined in the Note Purchase Agreement) issued under the Subordinated Note
Purchase Agreement in an original aggregate principal amount of
$50,699,076.40, in each case as the same shall be modified and supplemented
and in effect from time to time (subject to compliance with Section 8.22
hereof and Section 9 of the Subordination Agreement).
"SDC" shall mean Swiss Dairy, a Corporation, a California
corporation.
"SUBORDINATED INDEBTEDNESS" shall mean the indebtedness,
liabilities and obligations of the Company and/or its Subsidiaries owing from
time to time under or in respect of the Subordinated Note Purchase Agreement,
the Senior Subordinated Notes and the other Subordinated Debt Documents.
"SUBORDINATED DEBT DOCUMENTS" shall mean (a) the Subordinated Note
Purchase Agreement, (b) the Senior Subordinated Notes, (c) the Guarantees (as
such term is defined in the Subordinated Note Purchase Agreement) and (d) the
Subordination Agreement, in each case as the same shall be modified and
supplemented and in effect from time to time (subject to compliance with
Section 8.22 hereof and Section 9 of the Subordination Agreement).
"SUBORDINATED NOTE PURCHASE AGREEMENT" shall mean the Note Purchase
Agreement dated as of March 31, 1995 by and among the Company, ▇▇▇▇ ▇▇▇▇▇▇▇
Mutual Life Insurance Company, ▇▇▇▇ ▇▇▇▇▇▇▇ Life Insurance Company of
America, Pacific Mutual Life Insurance Company and PM Group Life Insurance
Co., providing for the issuance of the Subordinated Indebtedness, as the same
shall
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be modified and supplemented and in effect from time to time (subject to
compliance with Section 8.22 hereof and Section 9 of the Subordination
Agreement).
"SUBORDINATION AGREEMENT" shall mean the Subordination Agreement
dated as of March 31, 1995 by and among the Company and each of its
Subsidiaries, ▇▇▇▇ ▇▇▇▇▇▇▇ Mutual Life Insurance Company, ▇▇▇▇ ▇▇▇▇▇▇▇ Life
Insurance Company of America, Pacific Mutual Life Insurance Company and PM
Group Life Insurance Co. and the Agent, as heretofore amended and as amended
by Amendment No. 2 thereto substantially in the form of Exhibit J hereto, as
the same shall be modified and supplemented and in effect from time to time.
"SUBSIDIARY" shall mean, with respect to any Person, any
corporation, partnership or other entity of which at least a majority of the
securities or other ownership interests having by the terms thereof ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions of such corporation, partnership or other entity
(irrespective of whether or not at the time securities or other ownership
interests of any other class or classes of such corporation, partnership or
other entity shall have or might have voting power by reason of the happening
of any contingency) is at the time directly or indirectly owned or controlled
by such Person or one or more Subsidiaries of such Person or by such Person
and one or more Subsidiaries of such Person.
"SUBSIDIARY GUARANTORS" shall mean Suiza Dairy Corporation, Suiza
Fruit Corporation, ▇▇▇▇ Plastics Manufacturing Corp., Reddy Ice Corporation,
▇▇▇▇▇ Farms, Inc. and Suiza Management Corporation, each a Delaware
corporation, and each Supplemental Guarantor.
"SUIZA DAIRY" shall mean Suiza Dairy Corporation, a Delaware
corporation.
"SUIZA FRUIT" shall mean Suiza Fruit Corporation, a Delaware
corporation.
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"SUPPLEMENTAL GUARANTOR" shall mean each corporation or other
entity that shall become a Subsidiary of the Company pursuant to a Permitted
Acquisition financed under this Agreement.
"SUPPLEMENTAL SUBSIDIARY GUARANTEE AND SECURITY AGREEMENT" shall
mean any Supplemental Subsidiary Guarantee and Security Agreement
substantially in the form of Exhibit C-2 hereto, as the same shall be
modified and supplemented and in effect from time to time.
"SWISS DAIRY" shall mean Swiss Dairy Corporation, a Delaware
corporation and a Wholly Owned Subsidiary of the Company.
"SWISS DAIRY ACQUISITION" shall mean the acquisition by the Company
of certain of the assets and the assumption of certain liabilities of SDC
substantially on the terms and conditions set forth in the Swiss Dairy
Purchase Agreement.
"SWISS DAIRY PURCHASE AGREEMENT" shall mean the Asset Purchase
Agreement made and entered into as of September 5, 1996 by and among the
Company, Swiss Dairy, SDC and the principal stockholders of SDC identified on
the signature pages thereof, as the same shall be modified and supplemented
and in effect from time to time.
"TAXES" shall have the meaning assigned to such term in Section
5.06(a) hereof.
"TYPE" shall have the meaning assigned to such term in Section 1.03
hereof.
"UNITED STATES" shall mean the United States of America.
"U.S. TAXES" shall have the meaning assigned to such term in
Section 5.06(b) hereof.
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"WHOLLY OWNED SUBSIDIARY" shall mean, with respect to any Person, any
corporation, partnership or other entity of which all of the equity securities
or other ownership interests (other than, in the case of a corporation,
directors' qualifying shares) are directly or indirectly owned or controlled by
such Person or one or more Wholly Owned Subsidiaries of such Person or by such
Person and one or more Wholly Owned Subsidiaries of such Person.
"WORKING CAPITAL" shall mean, for any period, the excess of (a) the
aggregate amount of inventory, accounts receivable and prepaid expenses of the
Company and its Subsidiaries over (b) the aggregate amount of accounts payable
and current accrued expenses of the Company and its Subsidiaries.
1.02 ACCOUNTING TERMS AND DETERMINATIONS.
(a) Except as otherwise expressly provided herein, all accounting
terms used herein shall be interpreted, and all financial statements and
certificates and reports as to financial matters required to be delivered to the
Lenders hereunder shall (unless otherwise disclosed to the Lenders in writing at
the time of delivery thereof in the manner described in subsection (b) below) be
prepared, in accordance with generally accepted accounting principles applied on
a basis consistent with those used in the preparation of the latest financial
statements furnished to the Lenders hereunder. All calculations made for the
purposes of determining compliance with this Agreement shall (except as
otherwise expressly provided herein) be made by application of generally
accepted accounting principles applied on a basis consistent with those used in
the preparation of the latest annual or quarterly financial statements furnished
to the Lenders pursuant to Section 8.01 hereof unless (i) the Company shall have
objected to determining such compliance on such basis at the time of delivery of
such financial statements or (ii) the Majority Lenders shall so object in
writing within 30 days after delivery of such financial statements, in either of
which events such calculations shall be made on a basis consistent with those
used in the preparation of the latest financial statements as to which such
objection shall not have been made.
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(b) The Company shall deliver to the Lenders at the same time as the
delivery of any annual or quarterly financial statement under Section 8.01
hereof (i) a description in reasonable detail of any material variation between
the application of accounting principles employed in the preparation of such
statement and the application of accounting principles employed in the
preparation of the next preceding annual or quarterly financial statements as to
which no objection has been made in accordance with the last sentence of
subsection (a) above and (ii) reasonable estimates of the difference between
such statements arising as a consequence thereof.
(c) To enable the ready and consistent determination of compliance
with the covenants set forth in Section 8 hereof, the Company will not, without
the prior consent of the Majority Lenders, change the last day of its fiscal
year from December 31 of each year, or the last days of the first three fiscal
quarters in each of its fiscal years from March 31, June 30 and September 30 of
each year, respectively.
1.03 TYPES OF FACILITY C LOANS. Facility C Loans hereunder are
distinguished by "Type". The "Type" of a Facility C Loan refers to whether such
Facility C Loan is a Base Rate Loan or a Eurodollar Loan, each of which
constitutes a Type.
Section 2. FACILITY C COMMITMENTS, FACILITY C LOANS, FACILITY C NOTES
AND PREPAYMENTS.
2.01 FACILITY C LOANS.
(a) FACILITY C LOANS. Each Lender severally agrees, on the terms and
conditions of this Agreement, to make loans to the Company in Dollars during the
period from and including the date hereof to but not including the Facility C
Commitment Termination Date in an aggregate principal amount at any one time
outstanding up to but not exceeding the amount of the Facility C Commitment of
such Lender as in effect from time to time. Subject to the terms and conditions
of this Agreement, during such period the Company may borrow, repay and reborrow
the amount of the Facility C Commitments by means of Base Rate Loans and/or
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Eurodollar Loans and prior to the final maturity date of the Facility C Loans
may Convert Facility C Loans of one Type into Facility C Loans of another Type
(as provided in Section 2.08 hereof) or Continue Facility C Loans of one Type as
Facility C Loans of the same Type (as provided in Section 2.08 hereof).
(b) LIMIT ON CERTAIN FACILITY C LOANS. No more than four separate
Interest Periods in respect of Eurodollar Loans from each Lender may be
outstanding at any one time.
2.02 BORROWINGS.
(a) The Company shall give the Agent notice of each borrowing
hereunder as provided in Section 4.05 hereof.
(b) With respect to each borrowing, not later than 3:30 p.m.
Charlotte, North Carolina time on the date specified for such borrowing, each
Lender shall make available the amount of the Facility C Loan or Facility C
Loans to be made by it to the Company on such date to the Agent at any account
designated by the Agent, in immediately available funds, for account of the
Company. The amount so received by the Agent shall, subject to the terms and
conditions of this Agreement, be made available to the Company by depositing the
same, in immediately available funds, in an account designated by the Company or
otherwise upon its instructions.
2.03 CHANGES OF FACILITY C COMMITMENTS.
(a) The Company shall have the right at any time or from time to time
(i) so long as no Facility C Loans are outstanding, to terminate the Facility C
Commitments, and (ii) to reduce the aggregate unused amount of any of the
Facility C Commitments; PROVIDED that (x) the Company shall give notice of each
such termination or reduction as provided in Section 4.05 hereof and (y) each
such partial reduction shall be in an aggregate amount at least equal to
$2,000,000 (or a larger multiple of $1,000,000).
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(b) The Facility C Commitments once terminated or reduced may not be
reinstated.
2.04 COMMITMENT FEE. The Company shall pay to the Agent for account
of each Lender a commitment fee on the daily average unused amount of such
▇▇▇▇▇▇'s Facility C Commitment, for the period from and including the date
hereof to but not including the earlier of the date such Facility C Commitment
is terminated and the Facility C Commitment Termination Date, at a rate per
annum equal to the Applicable Commitment Fee Rate. Accrued commitment fees
shall be payable on each Quarterly Date and on the earlier of (i) the date the
relevant Facility C Commitments are terminated and (ii) the Facility C
Commitment Termination Date.
2.05 LENDING OFFICES. The Facility C Loans of each Type made by each
Lender shall be made and maintained at such Lender's Applicable Lending Office
for Facility C Loans of such Type.
2.06 SEVERAL OBLIGATIONS; REMEDIES INDEPENDENT. The failure of any
Lender to make any Facility C Loan to be made by it on the date specified
therefor shall not relieve any other Lender of its obligation to make its
Facility C Loan on such date, but neither any Lender nor the Agent shall be
responsible for the failure of any other Lender to make a Facility C Loan to be
made by such other Lender, and no Lender shall have any obligation to the Agent
or any other Lender for the failure by such Lender to make any Facility C Loan
required to be made by such Lender. The amounts payable by the Company at any
time hereunder and under the Facility C Notes to each Lender shall be a separate
and independent debt and each Lender shall be entitled, subject to the prior
written consent of the Majority Lenders, to protect and enforce its rights
arising out of this Agreement and the Facility C Notes, and it shall not be
necessary for any other Lender or the Agent to be joined as an additional party
in, any proceedings for such purposes.
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2.07 FACILITY C NOTES.
(a) The Facility C Loans made by each Lender shall be evidenced by a
single promissory note of the Company substantially in the form of Exhibit A
hereto, dated the date hereof, payable to such Lender in a principal amount
equal to the amount of its Facility C Commitment as originally in effect and
otherwise duly completed.
(b) The date, amount, Type, interest rate and duration of Interest
Period (if applicable) of each Facility C Loan made by each Lender, and each
payment made on account of the principal thereof, shall be recorded by such
Lender on its books and, prior to any transfer of the Facility C Note evidencing
the Facility C Loans held by it, endorsed by such Lender on the schedule
attached to such Facility C Note or any continuation thereof; PROVIDED that the
failure of such Lender to make any such recordation or endorsement shall not
affect the obligations of the Company to make a payment when due of any amount
owing hereunder or under such Facility C Note in respect of the Facility C Loans
to be evidenced by such Facility C Note.
(c) No Lender shall be entitled to have its Facility C Note
subdivided, by exchange for promissory notes of lesser denominations or
otherwise, except in connection with a permitted assignment of all or any
portion of such ▇▇▇▇▇▇'s relevant Facility C Commitment, Facility C Loans and
Facility C Note pursuant to Section 11.06(b) hereof.
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2.08 OPTIONAL PREPAYMENTS AND CONVERSIONS OR CONTINUATIONS OF
FACILITY C LOANS. Subject to Section 4.04 hereof, the Company shall have the
right to prepay Facility C Loans, or to Convert Facility C Loans of one Type
into Facility C Loans of another Type or Continue Facility C Loans of one Type
as Facility C Loans of the same Type, at any time or from time to time, PROVIDED
that:
(a) the Company shall give the Agent notice of each such prepayment,
Conversion or Continuation as provided in Section 4.05 hereof (and, upon the
date specified in any such notice of prepayment, the amount to be prepaid shall
become due and payable hereunder);
(b) Eurodollar Loans may be prepaid or Converted on any day, PROVIDED
that, if such prepayment or Conversion falls on a day other than the last day of
an Interest Period for such Facility C Loans, the Company shall pay any and all
amounts required by Section 5.05 hereof as a result thereof; and
(c) prepayments of the Facility C Loans under this Section 2.08 shall
be applied (i) if such prepayment is made prior to the Facility C Commitment
Termination Date, ratably as among the Facility C Loans then outstanding, and
(ii) if such prepayment is made on or after the Facility C Commitment
Termination Date, ratably as among the remaining installments of the Facility C
Loans.
Notwithstanding the foregoing, and without limiting the rights and remedies of
the Lenders under Section 9 hereof, in the event that any Event of Default shall
have occurred and be continuing, the Agent may (and at the request of the
Majority Lenders shall) suspend the right of the Company to borrow any Facility
C Loan as a Eurodollar Loan or to Convert any Facility C Loan into a Eurodollar
Loan, or to Continue any Facility C Loan as a Eurodollar Loan, in which event
all Eurodollar Loans outstanding shall be automatically Converted (on the last
day(s) of the respective Interest Periods therefor) to or all Base Rate Loans
shall be Continued, as the case may be, as Base Rate Loans.
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2.09 MANDATORY PREPAYMENTS.
(a) CASUALTY EVENTS. Not later than 60 days following the receipt by
the Company or any of its Subsidiaries of the proceeds of insurance,
condemnation award or other compensation in respect of any Casualty Event
affecting any Property of any Supplemental Guarantor or acquired with the
proceeds of Facility C Loans hereunder (or upon such earlier date as the Person
owning such Property shall have determined not to repair or replace the Property
affected by such Casualty Event), the Company shall prepay the Facility C Loans,
in an aggregate amount, if any, equal to 100% of the Net Available Proceeds of
such Casualty Event not theretofore applied to the repair or replacement of such
Property, such prepayments to be effected in each such case in the manner and to
the extent specified in paragraphs (e)(i) and (e)(ii) below. In the event that
such Net Available Proceeds exceed the outstanding amount of the Facility C
Loans, such excess shall be applied to the prepayment of the Facility B Loans in
accordance with the terms of the Existing Credit Agreement. Nothing in this
paragraph (a) shall be deemed to limit any obligation of the Company or any of
its Subsidiaries pursuant to any of the Security Documents to remit to a
collateral or similar account (including, without limitation, the Collateral
Account) maintained by the Agent pursuant to any of the Security Documents the
proceeds of insurance, condemnation award or other compensation received in
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respect of any Casualty Event. Notwithstanding the foregoing, in the event that
a Casualty Event shall occur with respect to Property of a Supplemental
Guarantor or acquired with the proceeds of Facility C Loans hereunder and
covered by any Mortgage, the Company shall prepay the Facility C Loans on the
dates and in the amounts specified in such Mortgage. In the event of a Casualty
Event involving Property not covered by this Section 2.09(a), the Net Available
Proceeds of such Casualty Event shall be applied in accordance with the terms of
the Existing Credit Agreement.
(b) SALE OF ASSETS. Without limiting the obligation of the Company
to obtain the consent of the Majority Lenders pursuant to Section 8.05(c) hereof
to any Disposition not otherwise permitted hereunder, in the event that the Net
Available Proceeds of any Disposition of Property of any Supplemental Guarantor
or Property acquired with the proceeds of Facility C Loans hereunder other than
an Excluded Disposition (herein, the "CURRENT DISPOSITION"), and of all prior
Dispositions of Property of any Supplemental Guarantor or Property acquired with
the proceeds of Facility C Loans hereunder as to which a prepayment has not yet
been made under this Section 2.09(b), shall exceed $500,000 then, no later than
5 Business Days prior to the occurrence of the Current Disposition, the Company
will deliver to the Lenders a statement, certified by a Responsible Financial
Officer of the Company, in form and detail satisfactory to the Agent, of the
amount of the Net Available Proceeds of the Current Disposition and of all such
prior Dispositions and the Company will prepay the Facility C Loans (or cause
the Facility C Loans to be prepaid), in an aggregate amount equal to 100% of the
Net Available Proceeds of the Current Disposition and such prior Dispositions,
such prepayment to be effected in each case in the manner and to the extent
specified in paragraphs (e)(i) and (e)(ii) below. In the event that such Net
Available Proceeds exceed the outstanding amount of the Facility C Loans, such
excess shall be applied to the prepayment of the Facility B Loans in accordance
with the terms of the Existing Credit Agreement. In the case of all
Dispositions of Property other than those referred to in this paragraph (b), the
Company will make (or cause to be made) prepayments of the Facility A Loans and
the Facility B Loans as required by the Existing Credit Agreement.
(c) EQUITY ISSUANCE; INVESTMENT TAX CREDITS. Upon any Equity
Issuance or the issuance of any Indebtedness (other than Indebtedness permitted
under Section 8.07 hereof) or the Disposition of any Investment Tax Credit after
the Closing Date, the Company shall (i) prepay the
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Facility C Loans or the Facility B Loans in an aggregate amount equal to 100%
of the Net Available Proceeds thereof (after effecting any payments in
respect of the redemption, prepayment or retirement, as the case may be, of
the Subordinated Indebtedness to the extent permitted under Section
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8.22(a)) or (ii) in connection with a Disposition of any Investment Tax
Credit, apply any part of the Net Available Proceeds thereof to the purchase
price of the Swiss Dairy Acquisition and use the balance of such Net
Available Proceeds to prepay the Facility C Loans or the Facility B Loans as
contemplated in clause (i) above. Promptly after each such Equity Issuance
the Company shall advise the Agent in writing of its designated application
of such Net Available Proceeds thereof. Any such prepayments of the Facility
C Loans shall be effected in the manner specified in paragraphs (e)(i) and
(e)(ii) below.
(d) EXCESS CASH FLOW. Not later than 90 days after the end of the
fiscal quarter ending December 31, 1996 and after the end of each fiscal year of
the Company, commencing with the fiscal year ending December 31, 1997, the
Company shall prepay the Facility C Loans and the Facility B Loans in an
aggregate amount equal to the excess of (A) 50% of Excess Cash Flow for such
fiscal quarter or year, as the case may be (or, if the Leverage Ratio is less
than 2.50 to 1, 25% of such Excess Cash Flow) over (B) the aggregate amount of
prepayments of Facility B Loans and Facility C Loans made during such fiscal
quarter or year, as the case may be, pursuant to Section 2.08 hereof and Section
2.08 of the Existing Credit Agreement. Mandatory prepayments arising from
Excess Cash Flow required prior to the Facility C Commitment Termination Date
shall be applied to the Facility B Loans in accordance with the terms of the
Existing Credit Agreement. Mandatory prepayments arising from Excess Cash Flow
required on or after the Facility C Commitment Termination Date shall be applied
to the Facility B Loans and the Facility C Loans pro rata based on the aggregate
principal amounts thereof then outstanding. Prepayments of Facility C Loans
under this paragraph (d) shall be effected in each case in the manner and to the
extent specified in paragraph (e)(ii) below.
(e) APPLICATION. Prepayments of Facility C Loans described in
paragraphs (a) through (d) above shall be effected as follows:
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(i) if such prepayment is required to be made prior to the Facility C
Commitment Termination Date, the amount of the prepayment specified in the
respective paragraph shall be applied ratably to the Facility C Loans then
outstanding.
(ii) if such prepayment is required to be made on or after the
Facility C Commitment Termination Date, the amount of the prepayment
specified in the respective paragraph shall be applied to the Facility C
Loans then outstanding,
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50% of which amount shall be applied in the inverse order of the maturities
of the installments thereof and (after taking into account such
application) the remainder thereof shall be applied ratably to then
remaining installments of principal of the Facility C Loans.
Section 3. PAYMENTS OF PRINCIPAL AND INTEREST.
3.01 REPAYMENT OF FACILITY C LOANS. The Company hereby promises to
pay to the Agent for account of each Lender the unpaid principal of each
Facility C Loan made by such Lender and outstanding on the Facility C Commitment
Termination Date in 15 installments payable on each Principal Payment Date, the
first twelve installments to be in an amount equal to 1 1/4% of the principal
amount of such Facility C Loan, the thirteenth and fourteenth installments each
to be in an amount equal to 2 1/2% of the principal amount of such Facility C
Loan and the final installment to be in an amount equal to 80% of the principal
amount of such Facility C Loan.
3.02 INTEREST. The Company hereby promises to pay to the Agent for
account of each Lender interest on the unpaid principal amount of each Facility
C Loan for the period from and including the date of such Facility C Loan to but
excluding the date such Facility C Loan shall be paid in full, at the following
rates per annum:
(a) during such periods as such Facility C Loan is a Base Rate Loan,
the Base Rate (as in effect from time to time) PLUS the Applicable Margin,
and
(b) during such periods as such Facility C Loan is a Eurodollar Loan,
for each Interest Period relating thereto, the Eurodollar Rate for such
Facility C Loan for such Interest Period PLUS the Applicable Margin.
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Notwithstanding the foregoing, the Company hereby promises to pay to the Agent
for account of each Lender interest at the applicable Post-Default Rate as
follows:
(i) on any principal of any Facility C Loan made by such Lender and
on any other amount payable by the Company hereunder or under the Facility
C Note held by such Lender to or for account of such Lender that shall not
be paid in full when due (whether at stated maturity, by acceleration, by
mandatory prepayment or otherwise), for the period from and including the
due date thereof to but excluding the date the same is paid in full; and
(ii) on the principal of each Facility C Loan made by such Lender
commencing upon the occurrence of any Event of Default, and thereafter for
so long as any Event of Default shall be continuing.
Accrued interest on each Facility C Loan shall be payable (i) in the case of a
Base Rate Loan, quarterly on the Quarterly Dates and (ii) in the case of a
Eurodollar Loan, on the last day of each Interest Period therefor and, if such
Interest Period is longer than three months, at three-month intervals following
the first day of such Interest Period, except that interest payable at the
Post-Default Rate shall be payable from time to time on demand. Promptly after
the determination of any interest rate provided for herein or any change
therein, the Agent shall give notice thereof to the Lenders to which such
interest is payable and to the Company.
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Section 4. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.
4.01 PAYMENTS.
(a) Except to the extent otherwise provided herein, all payments of
principal, interest, commitment fee and other amounts to be made by the Company
under this Agreement and the Facility C Notes of the Company, and, except to the
extent otherwise provided therein, all payments to be made by the Obligors under
any other Loan Document, shall be made in Dollars, in immediately available
funds, to the Agent at any account designated by the Agent not later than
2:00 p.m. Charlotte, North Carolina time on the date on which such payment shall
become due (each such payment made after such time on such due date to be deemed
to have been made on the next succeeding Business Day).
(b) Any Lender for whose account any such payment is to be made may
(but shall not be obligated to) debit the amount of any such payment that is not
made by such time to any ordinary deposit account of the Company with such
Lender (with notice to the Company and the Agent).
(c) The Company shall, at the time of making each payment under this
Agreement or any Facility C Note for account of any Lender, specify to the Agent
(which shall so notify the intended recipient(s) thereof) the Facility C Loans
or other amounts payable hereunder to which such payment is to be applied (and
in the event that the Company fails to so specify, or if an Event of Default has
occurred and is continuing, the Agent may distribute such payment to the Lenders
for application in such manner as it or the Majority Lenders, subject to Section
4.02 hereof, may determine to be appropriate).
(d) Each payment received by the Agent under this Agreement or any
Facility C Note for account of any Lender shall be paid by the Agent promptly to
such Lender, in immediately available funds, for account of such ▇▇▇▇▇▇'s
Applicable Lending
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Office for the Facility C Loan or other obligation in respect of which such
payment is made.
(e) If the due date of any payment under this Agreement or any
Facility C Note would otherwise fall on a day that is not a Business Day, such
date shall be extended to the next succeeding Business Day, and interest shall
be payable for any principal so extended for the period of such extension.
4.02 PRO RATA TREATMENT. Except to the extent otherwise provided
herein: (a) each borrowing of Facility C Loans from the Lenders under
Section 2.01 hereof shall be made from the Lenders, each payment of commitment
fee under Section 2.04 hereof in respect of Facility C Commitments shall be made
for account of the Lenders, and each termination or reduction of the amount of
the Facility C Commitments under Section 2.03 hereof shall be applied to the
Facility C Commitments of the Lenders pro rata according to the amounts of their
Facility C Commitments; (b) the making, Conversion and Continuation of Facility
C Loans of a particular Type (other than Conversions provided for by
Section 5.04 hereof) shall be made pro rata among the Lenders according to the
amounts of their Facility C Commitments (in the case of making of Facility C
Loans) or their Facility C Loans (in the case of Conversions and Continuations
of Facility C Loans); (c) each payment or prepayment of principal of Facility C
Loans by the Company shall be made for account of the Lenders pro rata in
accordance with the respective unpaid principal amounts of the Facility C Loans
held by them; and (d) each payment of interest on any Facility C Loans by the
Company shall be made for account of the relevant Lenders pro rata in accordance
with the amounts of interest on such Facility C Loans then due and payable to
the Lenders.
4.03 COMPUTATIONS. Interest on Eurodollar Loans and commitment fees
shall be computed on the basis of a year of 360 days and actual days elapsed
(including the first day but excluding the last day) occurring in the period for
which payable and interest on Base Rate Loans shall be computed on the basis of
a year of 365 or 366 days, as the case may be, and actual days
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elapsed (including the first day but excluding the last day) occurring in the
period for which payable.
4.04 MINIMUM AMOUNTS. Except for mandatory prepayments made pursuant
to Section 2.09 hereof and Conversions or prepayments made pursuant to
Section 5.04 hereof, (a) each borrowing and Conversion of principal of Base Rate
Loans shall be in an aggregate amount at least equal to $500,000 or a larger
multiple of $100,000, (b) each borrowing and Conversion of Eurodollar Loans
shall be in an aggregate amount at least equal to $2,000,000 or a larger
multiple of $1,000,000, (c) each partial prepayment of principal of Eurodollar
Loans shall be in an aggregate amount at least equal to $2,000,000 or a larger
multiple of $1,000,000 and each partial prepayment of principal of Base Rate
Loans shall be in an aggregate amount at least equal to $500,000 or a larger
multiple of $100,000 (borrowings, Conversions or prepayments of or into Facility
C Loans of different Types or, in the case of Eurodollar Loans, having different
Interest Periods at the same time hereunder to be deemed separate borrowings,
Conversions and prepayments for purposes of the foregoing, one for each Type or
Interest Period).
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4.05 CERTAIN NOTICES. Notices by the Company to the Agent of
terminations or reductions of the Facility C Commitments, of Borrowings,
Conversions, Continuations and optional prepayments of Facility C Loans, of
Types of Facility C Loans and of the duration of Interest Periods shall be
irrevocable (other than with respect to notices of optional prepayments, which
shall be revocable, PROVIDED that upon any such revocation the Company shall be
obligated to pay the Lenders any amounts payable under Section 5.05 hereof as a
consequence of such revocation) and shall be effective only if received by the
Agent not later than 1:30 p.m. Charlotte, North Carolina time on the number of
Business Days prior to the date of the relevant termination, reduction,
borrowing, Conversion, Continuation or prepayment or the first day of such
Interest Period specified below:
Number of
Business
Notice Days Prior
------ ----------
Termination or reduction
of Facility C Commitments 3
Borrowing or prepayment of,
or Conversions into,
Base Rate Loans Same Day
Borrowing or prepayment of,
Conversions into, Continuations
as, or duration of Interest
Period for, Eurodollar Loans 3
Each such notice of termination or reduction shall specify the amount of the
Facility C Commitments to be terminated or reduced. Each such notice of
borrowing, Conversion, Continuation or optional prepayment shall specify the
Type of each Facility C Loan to be borrowed, Converted, Continued or prepaid and
the date of borrowing, Conversion, Continuation or optional prepayment (which
shall be a Business Day). Each such notice of the duration of an Interest
Period shall specify the Facility C Loans
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to which such Interest Period is to relate. The Agent shall promptly notify
the Lenders of the contents of each such notice. In the event that the
Company fails to select the Type of Facility C Loan, or the duration of any
Interest Period for any Eurodollar Loan, within the time period and otherwise
as provided in this Section 4.05, such Facility C Loan (if outstanding as a
Eurodollar Loan) will be automatically Converted into a Base Rate Loan on the
last day of the then current Interest Period for such Facility C Loan or (if
outstanding as a Base Rate Loan) will remain as, or (if not then outstanding)
will be made as, a Base Rate Loan.
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4.06 NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Agent shall have
been notified by a Lender or the Company (the "PAYOR") prior to the date on
which the Payor is to make payment to the Agent of (in the case of a Lender) the
proceeds of a Facility C Loan to be made by such Lender hereunder or (in the
case of the Company) a payment to the Agent for account of one or more of the
Lenders hereunder (such payment being herein called the "REQUIRED PAYMENT"),
which notice shall be effective upon receipt, that the Payor does not intend to
make the Required Payment to the Agent, the Agent may assume that the Required
Payment has been made and may, in reliance upon such assumption (but shall not
be required to), make the amount thereof available to the intended recipient(s)
on such date; and, if the Payor has not in fact made the Required Payment to the
Agent, the recipient(s) of such payment shall, on demand, repay to the Agent the
amount so made available together with interest thereon in respect of each day
during the period commencing on the date (the "ADVANCE DATE") such amount was so
made available by the Agent until the date the Agent recovers such amount at a
rate per annum equal to the Federal Funds Rate for such day and, if such
recipient(s) shall fail promptly to make such payment, the Agent shall be
entitled to recover such amount, on demand, from the Payor, together with
interest as aforesaid, PROVIDED that if neither the recipient(s) nor the Payor
shall return the Required Payment to the Agent within three Business Days of the
Advance Date, then, retroactively to the Advance Date, the Payor and the
recipient(s) shall each be obligated to pay interest on the Required Payment as
follows:
(i) if the Required Payment shall represent a payment to be made by
the Company to the Lenders, the Company and the recipient(s) shall each be
obligated retroactively to the Advance Date to pay interest in respect of
the Required Payment at the Post-Default Rate (and, in case the
recipient(s) shall return the Required Payment to the Agent, without
limiting the obligation of the Company under Section 3.02 hereof to pay
interest to such recipient(s) at the Post-Default Rate in respect of the
Required Payment) and
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(ii) if the Required Payment shall represent proceeds of a Facility C
Loan to be made by the Lenders to the Company, the Payor and the Company
shall each be obligated retroactively to the Advance Date to pay interest
in respect of the Required Payment at the rate of interest provided for
such Required Payment pursuant to Section 3.02 hereof (and, in case the
Company shall return the Required Payment to the Agent, without limiting
any claim the Company may have against the Payor in respect of the Required
Payment).
4.07 SHARING OF PAYMENTS, ETC.
(a) The Company agrees that, in addition to (and without limitation
of) any right of set-off, banker's lien or counterclaim a Lender may otherwise
have, each Lender shall be entitled, at its option but with the prior written
consent of the Majority Lenders, to offset balances held by it for account of
the Company at any of its offices, in Dollars or in any other currency, against
any principal of or interest on any of such Lender's Facility C Loans or any
other amount payable to such Lender hereunder, that is not paid when due
(regardless of whether such balances are then due to the Company), in which case
it shall promptly notify the Company and the Agent thereof, PROVIDED that such
▇▇▇▇▇▇'s failure to give such notice shall not affect the validity thereof.
(b) If any Lender shall obtain from any Obligor payment of any
principal of or interest on any Facility C Loan owing to it or payment of any
other amount under this Agreement or any other Loan Document through the
exercise of any right of set-off, ▇▇▇▇▇▇'s lien or counterclaim or similar right
or otherwise (other than from the Agent as provided herein), and, as a result of
such payment, such Lender shall have received a greater percentage of the
principal of or interest on the Facility C Loans or such other amounts then due
hereunder or thereunder by such Obligor to such Lender than the percentage
received by any other Lender, it shall promptly purchase from such other Lenders
participations in (or, if and to the extent specified by such Lender, direct
interests in) the Facility C Loans or such other amounts, respectively, owing to
such other
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Lenders (or in interest due thereon, as the case may be) in such amounts, and
make such other adjustments from time to time as shall be equitable, to the
end that all the Lenders shall share the benefit of such excess payment (net
of any expenses that may be incurred by such Lender in obtaining or
preserving such excess payment) pro rata in accordance with the unpaid
principal of and/or interest on the Facility C Loans or such other amounts,
respectively, owing to each of the Lenders. To such end all the Lenders
shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must
otherwise be restored.
(c) The Company agrees that any Lender so purchasing such a
participation (or direct interest) may exercise all rights of set-off,
banker's lien, counterclaim or similar rights with respect to such
participation as fully as if such Lender were a direct holder of Facility C
Loans or other amounts (as the case may be) owing to such Lender in the
amount of such participation.
(d) Nothing contained herein shall require any Lender to exercise
any such right or shall affect the right of any Lender to exercise, and
retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of any Obligor. If, under any applicable
bankruptcy, insolvency or other similar law, any Lender receives a secured
claim in lieu of a set-off to which this Section 4.07 applies, such Lender
shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders entitled
under this Section 4.07 to share in the benefits of any recovery on such
secured claim.
Section 5. YIELD PROTECTION, ETC.
5.01 ADDITIONAL COSTS.
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(a) The Company shall pay directly to each Lender from time to time
such amounts as such Lender may determine to be necessary to compensate such
Lender for any costs that such Lender determines are attributable to its making
or maintaining of any Eurodollar Loans or its obligation to make any Eurodollar
Loans hereunder or any reduction in any amount receivable by such Lender
hereunder in respect of any of such Eurodollar Loans or such obligation (such
increases in costs and reductions in amounts receivable being herein called
"ADDITIONAL COSTS"), resulting from any Regulatory Change that:
(i) shall subject any Lender (or its Applicable Lending Office
for any of such Eurodollar Loans) to any tax, duty or other charge in
respect of such Eurodollar Loans or its Facility C Note or changes the
basis of taxation of any amounts payable to such Lender under this
Agreement or its Facility C Note in respect of any of such Eurodollar Loans
(excluding changes in the rate of tax on the overall net income of such
Lender or of its Applicable Lending Office by the jurisdiction in which
such Lender is organized or has its principal office or in which its
Applicable Lending Office is organized or located or, in each case, any
political subdivision or taxing authority thereof or therein); or
(ii) imposes or modifies any reserve, special deposit or similar
requirements (other than the Reserve Requirement utilized in the
determination of the Eurodollar Rate for such Eurodollar Loan) relating to
any extensions of credit or other assets of, or any deposits with or other
liabilities of, such Lender (including, without limitation, any of such
Eurodollar Loans or any deposits referred to in the definitions of
"Eurodollar Base Rate" in Section 1.01 hereof), or any commitment of such
Lender (including, without limitation, the Facility C Commitment of such
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇); or
(iii) imposes any other condition affecting this Agreement or its
Facility C Note (or any of such extensions of credit or liabilities) or its
Facility C Commitment.
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If any Lender requests compensation from the Company under this Section 5.01(a),
the Company may, by notice to such Lender (with a copy to the Agent), suspend
the obligation of such Lender thereafter to make or Continue Eurodollar Loans,
to Convert Facility C Loans of another Type into Eurodollar Loans or to Convert
Eurodollar Loans into Facility C Loans of another Type until the Regulatory
Change giving rise to such request ceases to be in effect (in which case the
provisions of Section 5.04 hereof shall be applicable), PROVIDED that such
suspension shall not affect the right of such Lender to receive the compensation
so requested.
(b) Without limiting the effect of the provisions of paragraph (a) of
this Section 5.01, in the event that, by reason of any Regulatory Change, any
Lender (i) incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other liabilities of
such Lender that includes deposits by reference to which the interest rate on
Eurodollar Loans is determined as provided in this Agreement or a category of
extensions of credit or other assets of such Lender that includes Eurodollar
Loans or (ii) becomes subject to restrictions on the amount of such a category
of liabilities or assets that it may hold then, if such Lender so elects by
notice to the Company (with a copy to the Agent), the obligation of such Lender
to make or Continue, or to Convert Facility C Loans of another type into,
Eurodollar Loans, hereunder (as the case may be) shall be suspended until any
such Regulatory Change ceases to be in effect (in which case the provisions of
Section 5.04 hereof shall be applicable).
(c) Without limiting the effect of the foregoing provisions of this
Section 5.01 (but without duplication), the Company shall pay directly to each
Lender from time to time on request such amounts as such Lender may determine to
be necessary to compensate such Lender (or, without duplication, the bank
holding company of which such Lender is a subsidiary) for any costs that it
determines are attributable to the maintenance by such Lender (or any Applicable
Lending Office or such bank holding company), pursuant to any law or regulation
or any
-54-
interpretation, directive or request (whether or not having the force of law
and whether or not failure to comply therewith would be unlawful) of any
court or governmental or monetary authority (i) following any Regulatory
Change or (ii) hereafter implementing any risk-based capital guideline or
other requirement (whether or not having the force of law and whether or not
the failure to comply therewith would be unlawful) heretofore or hereafter
issued by any government or governmental or supervisory authority
implementing at the national level the Basle Accord (including, without
limitation, the Final Risk-Based Capital Guidelines of the Board of Governors
of the Federal Reserve System (12 C.F.R. Part 208, Appendix A; 12 C.F.R. Part
225, Appendix A) and the Final Risk-Based Capital Guidelines of the Office of
the Comptroller of the Currency (12 C.F.R. Part 3, Appendix A)), of capital
in respect of its Facility C Commitments or Facility C Loans (such
compensation to include, without limitation, an amount equal to any reduction
of the rate of return on assets or equity of such Lender (or any Applicable
Lending Office or such bank holding company) to a level below that which such
Lender (or any Applicable Lending Office or such bank holding company) could
have achieved but for such law, regulation, interpretation, directive or
request). For purposes of this Section 5.01(d) and Section 5.08 hereof,
"BASLE ACCORD" shall mean the proposals for risk-based capital framework
described by the Basle Committee on Banking Regulations and Supervisory
Practices in its paper entitled "International Convergence of Capital
Measurement and Capital Standards" dated July 1988, as amended, modified and
supplemented and in effect from time to time or any replacement thereof.
(d) Each Lender shall notify the Company of any event occurring after
the date of this Agreement entitling such Lender to compensation under
paragraph (a) or (c) of this Section 5.01 as promptly as practicable, but in any
event within 45 days, after such Lender obtains actual knowledge thereof;
PROVIDED that (i) if any Lender fails to give such notice within 45 days after
it obtains actual knowledge of such an event, such Lender shall, with respect to
compensation payable pursuant to this Section 5.01 in respect of any costs
resulting from such event, only be entitled to payment under this Section 5.01
for costs
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incurred from and after the date 45 days prior to the date that such Lender
does give such notice and (ii) each Lender will designate a different
Applicable Lending Office for the Facility C Loans of such Lender affected by
such event if such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the sole opinion of such Lender, be
disadvantageous to such Lender, except that such Lender shall have no
obligation to designate an Applicable Lending Office located in the United
States. Each Lender will furnish to the Company a certificate setting forth
the basis and amount of each request by such Lender for compensation under
paragraph (a) or (c) of this Section 5.01. Determinations and allocations by
any Lender for purposes of this Section 5.01 of the effect of any Regulatory
Change pursuant to paragraph (a) or (b) of this Section 5.01, or of the
effect of capital maintained pursuant to paragraph (c) of this Section 5.01,
on its costs or rate of return of maintaining Facility C Loans or its
obligation to make Facility C Loans, or on amounts receivable by it in
respect of Facility C Loans, and of the amounts required to compensate such
Lender under this Section 5.01, shall be conclusive in the absence of
manifest error, PROVIDED that such determinations and allocations are made on
a reasonable basis.
5.02 LIMITATION ON TYPES OF FACILITY C LOANS. Anything herein to the
contrary notwithstanding, if, on or prior to the determination of any Eurodollar
Base Rate for any Interest Period:
(a) the Agent determines, which determination shall be conclusive,
that quotations of interest rates for the relevant deposits referred to in
the definition of "Eurodollar Base Rate" in Section 1.01 hereof are not
being provided in the relevant amounts or for the relevant maturities for
purposes of determining rates of interest for Eurodollar Loans as provided
herein; or
(b) The Majority Lenders determine, which determination shall be
conclusive, and notify the Agent that the relevant rates of interest
referred to in the definitions of "Eurodollar Base Rate" in Section 1.01
hereof
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upon the basis of which the rate of interest for Eurodollar Loans for such
Interest Period is to be determined are not likely adequately to cover the
cost to such Lenders of making or maintaining Eurodollar Loans for such
Interest Period;
then the Agent shall give the Company and each Lender prompt notice thereof
(describing the circumstances giving rise to such event) and, so long as such
condition remains in effect, the Lenders shall be under no obligation to make
additional Eurodollar Loans, to Continue Eurodollar Loans, to Convert Facility C
Loans of another Type into Eurodollar Loans and the Company shall, on the last
day(s) of the then current Interest Period(s) for the outstanding Eurodollar
Loans either prepay such Eurodollar Loans or Convert such Eurodollar Loans into
Facility C Loans of another Type in accordance with Section 2.08 hereof.
5.03 ILLEGALITY. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to honor its obligation to make or maintain Eurodollar
Loans hereunder, then such Lender shall promptly notify the Company thereof
(with a copy to the Agent) and such ▇▇▇▇▇▇'s obligation to make or Continue, or
to Convert Facility C Loans of any other Type into, Eurodollar Loans shall be
suspended until such time as such Lender may again make and maintain Eurodollar
Loans (in which case the provisions of Section 5.04 hereof shall be applicable).
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5.04 TREATMENT OF AFFECTED FACILITY C LOANS. If the obligation of
any Lender to make Eurodollar Loans ("AFFECTED FACILITY C LOANS"), or to
Continue, or to Convert Facility C Loans of another Type into Affected Facility
C Loans shall be suspended pursuant to Section 5.01 or 5.03 hereof, such
▇▇▇▇▇▇'s Affected Facility C Loans shall be automatically Converted into Base
Rate Loans on the last day(s) of the then current Interest Period(s) therefor
(or, in the case of a Conversion required by Section 5.01(b), 5.01(c) or 5.03
hereof, on such earlier date as such Lender may specify to the Company with a
copy to the Agent) and, unless and until such ▇▇▇▇▇▇ gives notice as provided
below that the circumstances specified in Section 5.01 or 5.03 hereof that gave
rise to such Conversion no longer exist:
(a) to the extent that such ▇▇▇▇▇▇'s Affected Facility C Loans have
been so Converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Affected Facility C Loans shall be
applied instead to its Base Rate Loans; and
(b) all Facility C Loans that would otherwise be made or Continued by
such Lender as Affected Facility C Loans shall be made or Continued instead
as Base Rate Loans, and all Base Rate Loans of such Lender that would
otherwise be Converted into Affected Facility C Loans (as the case may be)
shall remain as Base Rate Loans.
If such Lender gives notice to the Company with a copy to the Agent that the
circumstances specified in Section 5.01 or 5.03 hereof that gave rise to the
Conversion of such ▇▇▇▇▇▇'s Affected Facility C Loans pursuant to this
Section 5.04 no longer exist (which such ▇▇▇▇▇▇ agrees to do promptly upon such
circumstances ceasing to exist) at a time when Affected Facility C Loans made by
other Lenders are outstanding, such Lender's Base Rate Loans shall be
automatically Converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Affected Facility C Loans, to the extent
necessary so that, after giving effect thereto, all Facility C Loans held by the
Lenders holding Affected Facility C Loans and by such Lender are held pro rata
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(as to principal amounts, Types and Interest Periods) in accordance with their
respective Facility C Commitments.
5.05 COMPENSATION. The Company shall pay to the Agent for account of
each Lender, upon the request of such Lender through the Agent, such amount or
amounts as shall be sufficient (in the reasonable opinion of such Lender) to
compensate it for any loss, cost or expense that such Lender determines is
attributable to:
(a) any payment, mandatory or optional prepayment or Conversion of a
Eurodollar Loan made by the Company for any reason (including, without
limitation, the acceleration of the Facility C Loans pursuant to Section 10
hereof) on a date other than the last day of the Interest Period for such
Eurodollar Loan; or
(b) any failure by the Company for any reason (including, without
limitation, the failure of any of the conditions precedent specified in
Section 6 hereof to be satisfied) to borrow a Eurodollar Loan from such
Lender on the date for such borrowing specified in the relevant notice of
borrowing given pursuant to Section 2.02 hereof or in the notice from the
Agent given pursuant to Section 2.01(c);
(c) any failure for any reason (including, without limitation, as
provided in Section 5.02 or 5.03 hereof) of a Facility C Loan of such
Lender to be Continued as or Converted into a Eurodollar Loan on the date
for such Continuation or Conversion specified in the relevant notice given
under Section 4.05 hereof; or
(d) the revocation of any notice of optional prepayment or any failure
for any reason to make any optional prepayment on the date specified
therefor in the relevant notice of prepayment given pursuant to Section
4.05 hereof.
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
that otherwise would have accrued
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on the principal amount so paid, prepaid, Converted or not borrowed or
prepaid for the period from the date of such payment, prepayment, Conversion
or failure to borrow or prepay to the last day of the then current Interest
Period for such Eurodollar Loan (or, in the case of a failure to borrow, the
Interest Period for such Eurodollar Loan that would have commenced on the
date specified for such borrowing) at the applicable rate of interest for
such Eurodollar Loan (MINUS the Applicable Margin) provided for herein over
(ii) the amount of interest that otherwise would have accrued on such
principal amount at a rate per annum equal to the interest component of the
amount such Lender would have bid on the date of such payment, prepayment,
conversion or failure to borrow or prepay in the London interbank market for
Dollar deposits of leading banks in amounts comparable to such principal
amount and with maturities comparable to such period (as reasonably
determined by such Lender).
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5.06 NET PAYMENTS; TAXES.
(a) All payments to be made hereunder and under the Facility C Notes
and any other Loan Documents by the Company shall be made without setoff,
counterclaim or other defense. Subject to Section 5.06(b) hereof with respect
to U.S. Taxes, all such payments shall be made free and clear of and without
deduction for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
governmental authority (other than taxes imposed on the Agent, any Lender or its
Applicable Lending Office by the jurisdiction in which the Agent or such Lender
is organized or has its principal office or in which its Applicable Lending
Office is organized or located or, in each case, any political subdivision or
taxing authority thereof or therein) (collectively, "TAXES"). If any Taxes are
imposed and required to be withheld from any amount payable by the Company
hereunder or under the Facility C Notes, the Company shall be obligated to (i)
pay such additional amount so that the Agent and the Lenders will receive a net
amount (after giving effect to the payment of such additional amount and to the
deduction of all Taxes) equal to the amount due hereunder, (ii) pay such Taxes
to the appropriate taxing authority for the account of the Agent, for the
benefit of the Lenders and (iii) as promptly as possible thereafter, sending the
Agent a certified copy of any original official receipt showing payment thereof,
together with such additional documentary evidence as the Agent may from time to
time reasonably require. If the Company fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Agent the required
receipts or other required documentary evidence, the Company shall be obligated
to indemnify the Agent and each Lender for any incremental taxes, interest or
penalties that may become payable by the Agent or such Lender as a result of
such failure. The obligations of the Company under this Section 5.06(a) shall
survive the repayment of the Facility C Loans and the termination of the
Facility C Commitments.
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(b) The Company agrees to pay to each Lender that is not a
U.S. Person such additional amounts as are necessary in order that the net
payment of any amount due to and received by such non-U.S. Person hereunder
after deduction for or withholding in respect of any U.S. Taxes imposed with
respect to such payment (or in lieu thereof, payment of such U.S. Taxes by such
non-U.S. Person), will not be less than the amount stated herein to be then due
and payable, PROVIDED that the foregoing obligation to pay such additional
amounts shall not apply:
(i) to any payment to a Lender (other than in respect of a Registered
Loan) hereunder unless such ▇▇▇▇▇▇ is, on the date hereof (or on the date
it becomes a Lender as provided in Section 11.06(b) hereof) and on the date
of any change in the Applicable Lending Office of such Lender, either
entitled to submit a Form 1001 (relating to such Lender and entitling it to
a complete exemption from withholding on all interest to be received by it
hereunder in respect of the Facility C Loans) or Form 4224 (relating to all
interest to be received by such ▇▇▇▇▇▇ hereunder in respect of the Facility
C Loans), or
(ii) to any payment to any Lender hereunder in respect of a Registered
Loan (a "REGISTERED HOLDER"), unless such Registered Holder (or, if such
Registered Holder is not the beneficial owner of such Registered Loan, the
beneficial owner thereof) is, on the date hereof (or on the date such
Registered Holder becomes a Lender as provided in Section 11.06(b) hereof)
and on the date of any change in the Applicable Lending Office of such
Lender, entitled to submit a Form W-8, together with an annual certificate
stating that (x) such Registered Holder (or beneficial owner, as the case
may be) is not a "bank" within the meaning of Section 881(c)(3)(A) of the
Code, and (y) such Registered Holder (or beneficial owner, as the case may
be) shall promptly notify the Company if at any time, such Registered
Holder (or beneficial owner, as the case may be) determines that it is no
longer in a position to provide such certificate to the Company (or any
other form of
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certification adopted by the relevant taxing authorities of the United
States for such purposes), or
(iii) to any U.S. Taxes imposed solely by reason of the failure by
such non-U.S. Person (or, if such non-U.S. Person is not the beneficial
owner of the relevant Facility C Loan, such beneficial owner) to comply
with applicable certification, information, documentation or other
reporting requirements concerning the nationality, residence, identity or
connections with the United States of such non-U.S. Person (or such
beneficial owner, as the case may be) if such compliance is required by
statute or regulation of the United States as a precondition to relief or
exemption from such U.S. Taxes.
For the purposes of this Section 5.06(b), (w) "FORM 1001" shall mean Form 1001
(Ownership, Exemption, or Reduced Rate Certificate) of the Department of the
Treasury of the United States, (w) "FORM 4224" shall mean Form 4224 (Exemption
from Withholding of Tax on Income Effectively Connected with the Conduct of a
Trade or Business in the United States) of the Department of the Treasury of the
United States, (x) "FORM W-8" shall mean Form W-8 (Certificate of Foreign Status
of the Department of Treasury of the United States of America) (or in relation
to any of such Forms such successor and related forms as may from time to time
be adopted by the relevant taxing authorities of the United States to document a
claim to which such Form relates), (y) "U.S. PERSON" shall mean a citizen,
national or resident of the United States, a corporation, partnership or other
entity created or organized in or under any laws of the United States, or any
estate or trust that is subject to Federal income taxation regardless of the
source of its income and (z) "U.S. TAXES" shall mean any present or future tax,
assessment or other charge or levy imposed by or on behalf of the United States
or any taxing authority thereof or therein.
Within 30 days after paying any amount to the Agent or any Lender from
which it is required by law to make any deduction or withholding, and within 30
days after it is required by law to remit such deduction or withholding to any
relevant taxing or
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other authority, the Company shall deliver to the Agent for delivery to such
non-U.S. Person evidence satisfactory to such Person of such deduction,
withholding or payment (as the case may be).
5.07 REPLACEMENT OF LENDERS. If any Lender requests compensation
pursuant to Section 5.01 or 5.06 hereof, or any Lender's obligation to make or
Continue, or to Convert Facility C Loans of any Type into, any other Type of
Facility C Loan shall be suspended pursuant to Section 5.01 or 5.03 hereof (any
such Lender so requesting compensation, or whose obligations are so suspended
being herein called a "RELEVANT LENDER"), the Company upon three Business Days
notice, may require that such Relevant Lender transfer all of its right, title
and interest under this Agreement and such Relevant ▇▇▇▇▇▇'s Facility C Note to
any bank or other financial institution identified by the Company that is
reasonably satisfactory to the Agent (i) if such bank or other financial
institution (a "PROPOSED LENDER") agrees to assume all of the obligations of
such Relevant Lender hereunder, and to purchase all of such Relevant ▇▇▇▇▇▇'s
Facility C Loans hereunder for consideration equal to the aggregate outstanding
principal amount of such Relevant ▇▇▇▇▇▇'s Facility C Loans, together with
accrued, but unpaid interest thereon to the date of such purchase, and
satisfactory arrangements are made for payment to such Relevant Lender of all
other amounts payable hereunder to such Relevant Lender on or prior to the date
of such transfer (including any fees accrued hereunder and any amounts that
would be payable under Section 5.05 hereof as if all of such Relevant ▇▇▇▇▇▇'s
Facility C Loans were being prepaid in full on such date) and (ii) if such
Relevant Lender has requested compensation pursuant to Section 5.01 or 5.06
hereof, such Proposed Lender's aggregate requested compensation, if any,
pursuant to said Section 5.01 or 5.06 with respect to such Relevant ▇▇▇▇▇▇'s
Facility C Loans is lower than that of the Relevant Lender. Subject to
compliance with the provisions of Section 11.06(b) hereof, such Proposed Lender
shall be a "Lender" for all purposes hereunder. Without prejudice to the
survival of any other agreement of the Company hereunder, the agreements of the
Company contained in Sections 5.01, 5.06 and 12.03 hereof (without duplication
of any payments made to such Relevant Lender by the
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Company or the Proposed Lender) shall survive for the benefit of such
Relevant Lender under this Section 5.07 with respect to the time prior to
such replacement.
Section 6. CONDITIONS PRECEDENT.
6.01 CONDITIONS TO EFFECTIVENESS AND INITIAL LENDING. The
effectiveness of this Agreement and the obligation of any Lender to make its
initial Facility C Loan hereunder is subject to the receipt by the Agent on or
before September 30, 1996 of the following documents, each of which shall be
satisfactory to the Agent (and to the extent specified below, to each Lender or
the Majority Lenders, as the case may be) in form and substance:
(a) CORPORATE DOCUMENTS. Certified copies of the charter and by-laws
(or equivalent documents) of each Obligor and of all corporate authority
for each Obligor (including, without limitation, board of director
resolutions and evidence of the incumbency of officers, together with
specimen signatures of each such officer) with respect to the execution,
delivery and performance of such of the Basic Documents to which such
Obligor is intended to be a party and each other document to be delivered
by such Obligor from time to time in connection herewith and the extensions
of credit hereunder (and the Agent and each Lender may conclusively rely on
such certificate until it receives notice in writing from such Obligor to
the contrary).
(b) OFFICER'S CERTIFICATE. A certificate of a Responsible Financial
Officer of the Company, dated the date hereof, to the effect set forth in
the first sentence of Section 6.03 hereof.
(c) OPINION OF COUNSEL TO THE OBLIGORS. Opinions, each dated the
date hereof, of ▇▇▇▇▇▇ & ▇▇▇▇, counsel to the Obligors, substantially in
the form of Exhibit E-1 hereto, and of Axtmayer Adsuar ▇▇▇▇▇ & ▇▇▇▇▇,
special Puerto Rico counsel to the Subsidiary Guarantors operating in the
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Commonwealth, substantially in the form of Exhibit E-2 hereto and, in each
case, covering such other matters as the Agent or any Lender may reasonably
request (and each Obligor hereby instructs such counsel to deliver such
opinion to the Lenders and the Agent).
(d) OPINION OF COUNSEL TO FIRST UNION. An opinion, dated the date
hereof, of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, special New York counsel to
First Union, substantially in the form of Exhibit G hereto (and First Union
hereby instructs such counsel to deliver such opinion to the Lenders).
(e) FACILITY C NOTES. The Facility C Notes, duly completed and
executed.
(f) AMENDMENT NO. 2 TO SECURITY AGREEMENT. Amendment No. 2 to
Security Agreement, duly executed and delivered by the Company and the
Agent. In addition, the Company shall have taken such other action
(including, without limitation, delivering to the Agent, (i) Uniform
Commercial Code searches for each Obligor for each jurisdiction in which
such Obligor conducts its respective business or in which any of its
respective Properties are located (or otherwise as the Agent may reasonably
request) (to the extent such searches have not already been effected
pursuant to the Existing Credit Agreement) and (ii) for filing,
appropriately completed and duly executed copies of Uniform Commercial Code
financing statements) as the Agent shall have requested in order to perfect
the security interests created pursuant to Amendment No. 2 to Security
Agreement (or, to the extent such filings have been effected pursuant to
the Existing Credit Agreement, such amendments to such filings determined
to be necessary or advisable by the Agent).
(g) GUARANTEE AGREEMENT. The Guarantee Agreement, duly executed and
delivered by each Subsidiary Guarantor (other than a Supplemental
Guarantor) on the date hereof.
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(h) INSURANCE. Certificates of insurance evidencing the existence of
all insurance required to be maintained by the Company and its Subsidiaries
pursuant to Section 8.04 hereof and the designation of the Agent as the
loss payee or additional named insured, as the case may be, thereunder. In
addition, the Company shall have delivered a certificate of a Responsible
Financial Officer of the Company setting forth the insurance obtained by it
in accordance with the requirements of Section 8.04 and stating that such
insurance is in full force and effect and that all premiums then due and
payable thereon have been paid.
(i) SUBORDINATED INDEBTEDNESS. Amendment to the Subordinated Debt
Documents in form and substance satisfactory to the Majority Lenders,
PROVIDED that in no event shall amortization in respect of the Subordinated
Indebtedness be modified pursuant to such Amendment, and the Agent shall
have received copies of all of the Amendments to the Subordinated Debt
Documents and of all instruments and documents executed and delivered in
connection therewith, certified by a Responsible Financial Officer of the
Company.
(j) FINANCIAL INFORMATION. (i) Copies of the pro forma projections
of the Company and its Subsidiaries for the period ended December 31, 1996
and (ii) unaudited consolidating financial statements of the Company and
its Subsidiaries for the six-month period ended on June 30, 1996.
(k) PAYMENT OF FEES AND EXPENSES, ETC. Evidence that the Company
shall have paid such fees and expenses as the Company shall have agreed to
pay to the Agent in connection herewith, including, without limitation, the
reasonable fees and expenses of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, special
New York counsel to First Union, and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, special
Puerto Rico counsel to First Union, in connection with the negotiation,
preparation, execution and delivery of this Agreement and the Facility C
Notes and the other Loan Documents and the making of the Facility C Loans
hereunder (to the extent that statements for such fees and
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expenses have been delivered to the Company three days prior to the
Closing Date).
(l) INTEREST RATE PROTECTION AGREEMENTS. Evidence that the Company
and/or the Obligors shall have entered into one or more Interest Rate
Protection Agreements as to the notional principal amount at least equal to
(i) $40,000,000 for a period ending on December 31, 1996, (ii) $14,000,000
for a period ending on May 13, 1997 and (iii) $55,000,000 for a period
ending on June 30, 1998.
(m) ACCOUNT DESIGNATION LETTER. The Account Designation Letter duly
executed by the Company.
(n) AMENDMENT NO. 2 TO EXISTING CREDIT AGREEMENT. Amendment No. 2 to
Existing Credit Agreement, duly executed by each of the parties thereto,
together with evidence that all conditions precedent set forth in Section 4
of Amendment No. 2 to Existing Credit Agreement shall have been satisfied
or waived.
(o) PROCESS AGENT ACCEPTANCE. A letter from the Process Agent, in
form and substance satisfactory to the Agent, accepting the appointment of
the Process Agent by the Company.
(p) EVIDENCE OF LENDER ALLOCATIONS. Evidence from the Agent that on
the date of this Agreement (after giving effect to the transactions
contemplated hereby) the Lenders under this Agreement shall hold the same
pro rata portion of Facility C Loans (and if no Facility C Loans are
outstanding, Facility C Commitments) under this Agreement, as they hold of
Facility A Loans and Facility B Loans (or Facility A Commitments and
Facility B Commitments) under the Existing Credit Agreement.
(q) OTHER DOCUMENTS. Such other documents as the Agent or any Lender
or special New York counsel to First Union may reasonably request.
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6.02 CONDITIONS PRECEDENT TO LENDING FOR PERMITTED ACQUISITIONS. The
obligation of any Lender to make Facility C Loans hereunder to finance any
Permitted Acquisition is subject to the receipt by the Agent of the following
documents, each of which shall be satisfactory to the Agent (and to the extent
specified below, to each Lender or the Majority Lenders, as the case may be) in
form and substance:
(a) In connection with each Permitted Acquisition involving the
purchase of the capital stock or other ownership interests of a Person or
the formation of a corporation or other entity for the purpose of such
Permitted Acquisition:
(i) CORPORATE DOCUMENTS. Certified copies of the charter and
by-laws (or equivalent documents) of the relevant Person and of all
corporate authority for such Person (including, without limitation,
board of director resolutions and evidence of the incumbency of
officers, together with specimen signatures of each such officer) with
respect to the execution, delivery and performance of such of the
Basic Documents to which such Person is intended to be a party and
each other document to be delivered by such Person from time to time
in connection herewith and therewith (and the Agent and each Lender
may conclusively rely on such certificate until it receives notice in
writing from such Person to the contrary).
(ii) SUPPLEMENTAL SUBSIDIARY GUARANTEE AND SECURITY AGREEMENT.
A Supplemental Subsidiary Guarantee and Security Agreement,
substantially in the form of Exhibit C-2 hereto and duly executed by
the Agent and the relevant Supplemental Guarantor, pursuant to which
such Supplemental Guarantor shall create a first priority security
interest in all of its personal Property in favor of the Agent for the
benefit of the Lenders and the Facility A Lenders and the Facility B
Lenders, except as otherwise provided herein or therein. In addition,
the Company shall have taken
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such other action (including, without limitation, delivering to the
Agent, (i) Uniform Commercial Code searches for such Supplemental
Guarantor for each jurisdiction in which such Supplemental
Guarantor conducts its business or in which any of its Properties
are located (or otherwise as the Agent may reasonably request) and
(ii) for filing, appropriately completed and duly executed copies
of Uniform Commercial Code financing statements, as the Agent shall
have requested in order to perfect the security interest created
pursuant to such Supplemental Subsidiary Guarantee and Security
Agreement.
(iii) OPINION OF COUNSEL TO THE SUPPLEMENTAL GUARANTOR.
Opinions, appropriately dated, of counsel to the relevant Supplemental
Guarantor covering such matters as the Agent or any Lender may
reasonably request.
(iv) OPINION OF COUNSEL TO FIRST UNION. An opinion,
appropriately dated, of Milbank, ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, special New
York counsel to First Union, substantially in the form of Exhibit G
hereto but as to the relevant Supplemental Guarantee and Security
Agreement (and First Union hereby instructs such counsel to deliver
such opinion to the Lenders).
(v) AMENDMENT TO SECURITY AGREEMENT; FILINGS. An amendment to
the Security Agreement (or, if applicable, the Existing Subsidiary
Guaranty and Security Agreement), duly executed and delivered by the
Company (or the appropriate Subsidiary) and the Agent and the
certificates identified in Annex 1 thereto, accompanied by undated
stock powers executed in blank. In addition, the Company shall have
taken such other action (including, without limitation, delivering to
the Agent, (i) Uniform Commercial Code searches for each Supplemental
Guarantor for each jurisdiction in which such Supplemental Guarantor
conducts its respective business or in which any of its respective
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Properties are located (or otherwise as the Agent may reasonably
request) and (ii) for filing, appropriately completed and duly
executed copies of Uniform Commercial Code financing statements) as
the Agent shall have requested in order to perfect the security
interests created pursuant to such amendment to the Security Agreement
and/or the relevant Supplemental Subsidiary Guarantee and Security
Agreement.
(vi) INSURANCE. Certificates of insurance evidencing the
existence of all insurance required to be maintained by the relevant
Supplemental Guarantor pursuant to Section 8.04 hereof and the
designation of the Agent as the loss payee or additional named
insured, as the case may be, thereunder. In addition, the Company or
the relevant Supplemental Guarantor shall have delivered a certificate
of a Responsible Financial Officer of the Company or such Supplemental
Guarantor setting forth the insurance obtained by the Company or such
Supplemental Guarantor in accordance with the requirements of
Section 8.04 and stating that such insurance is in full force and
effect and that all premiums then due and payable thereon have been
paid.
(b) In connection with all Permitted Acquisitions (as appropriate):
(i) CONSUMMATION OF PERMITTED ACQUISITION. Evidence that the
relevant Permitted Acquisition shall have been consummated in all
material respects in accordance with the terms of the relevant
Purchase Agreement, and the Agent shall have received a certificate of
a Responsible Financial Officer of the Company to that effect (and
attaching thereto a true and complete copy of the relevant Purchase
Agreement).
(ii) ENVIRONMENTAL MATTERS. To the extent that a Permitted
Acquisition involves the direct or indirect acquisition of real
Property, upon the request of the Agent, environmental surveys and
assessments prepared
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by one or more firms of licensed engineers (familiar with the
identification of toxic and hazardous substances) in form and
substance satisfactory to each Lender, such environmental survey
and assessment to be based upon physical on-site inspections by
such firm of each of the existing sites and facilities to be owned,
operated or leased by the Company or the relevant Supplemental
Guarantor or any of its Subsidiaries pursuant to such Permitted
Acquisition as well as an historical review of the uses of such sites
and facilities and of the business and operations of such Supplemental
Guarantor or any of its Subsidiaries (including any former
Subsidiaries or divisions thereof or any of its Subsidiaries that have
been disposed of prior to the date of such survey and assessment and
with respect to which such Supplemental Guarantor or any of its
Subsidiaries may have retained liability for Environmental Claims),
and if requested by the Agent, the Company shall have agreed to take
other reasonable steps after the date of such Permitted Acquisition
with respect to such matters as shall be agreed in writing with the
Agent.
(iii) SOLVENCY ANALYSIS. A certificate from a Responsible
Financial Officer of the Company to the effect that, as of the date of
the respective Permitted Acquisition and after giving effect to the
Facility C Loans in connection with the relevant Permitted Acquisition
hereunder and to the other transactions contemplated hereby in
connection with such Permitted Acquisition, (i) the aggregate value of
all Properties of the Company and its Subsidiaries at their present
fair saleable value (i.e., the amount that may be realized within a
reasonable time, considered to be six months to one year, either
through collection or sale at the regular market value, conceiving the
latter as the amount that could be obtained for the Property in
question within such period by a capable and diligent businessman from
an interested buyer who is willing to purchase under ordinary selling
conditions), exceeds
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the amount of all the debts and liabilities (including contingent,
subordinated, unmatured and unliquidated liabilities) of the
Company and its Subsidiaries, (ii) the Company and its Subsidiaries
will not, on a consolidated basis, have unreasonably small capital
with which to conduct their business operations as theretofore
conducted and (iii) the Company and its Subsidiaries will
have, on a consolidated basis, sufficient cash flow to enable them to
pay their debts as they mature. The Agent shall have also received
(x) a certificate from a Responsible Financial Officer of the Company
certifying that the financial projections and underlying assumptions
contained in such analyses were at the time made, and on the date
thereof are, fair and reasonable and accurately computed and (y)
appropriate factual information supporting the conclusions of the
solvency analyses and the financial condition certificate required to
be delivered as provided above.
(iv) MORTGAGES. The following documents each of which shall be
executed (and, where appropriate, acknowledged) by Persons
satisfactory to the Agent:
(A) one or more Mortgages covering the parcels of real
Property of the relevant Supplemental Guarantor or acquired by
the Company or any Subsidiary thereof pursuant to a Permitted
Acquisition financed hereunder (collectively, the "SUPPLEMENTAL
MORTGAGES"), in each case duly executed and delivered by the
Company or the relevant Subsidiary or Supplemental Guarantor, as
applicable, in recordable form and, to the extent necessary under
applicable law, for filing in the appropriate county land
offices, Uniform Commercial Code financing statements covering
fixtures, in each case appropriately completed and duly executed;
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(B) one or more mortgagee policies of title insurance on
forms of and issued by one or more title companies satisfactory
to the Agent ("TITLE COMPANIES"), insuring the validity and
priority of the Liens created under the Supplemental Mortgages
for and in amounts satisfactory to the Agent, subject only to
such exceptions as are satisfactory to the Majority Lenders;
(C) current as-built surveys of each of the parcels to be
covered by the Supplemental Mortgages and, in the case of certain
surveys (as agreed by the Company and the Agent), accompanied by
a certificate of an appropriate officer or employee of the
Company, which surveys shall be in form and content acceptable to
the Agent and shall have been prepared by a registered surveyor
acceptable to the Agent;
(D) upon request of the Agent, certified copies of
permanent and unconditional certificates of occupancy (or, if it
is not the practice to issue certificates of occupancy in the
jurisdiction in which the parcels to be covered by the
Supplemental Mortgages are located, then such other evidence
reasonably satisfactory to each Lender) permitting the fully
functioning operation and occupancy of each such facility and of
such other permits necessary for the use and operation of each
such facility issued by the respective governmental authorities
having jurisdiction over each such facility;
(E) upon request of the Agent, in the case of Supplemental
Mortgages covering leasehold interests, such estoppel, consents
and other agreements from the lessor, the holder of a fee
mortgage or a sublessee, as the Agent may reasonably request;
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(F) upon request of the Agent, appraisals of each of the
facilities located on the Properties covered by the Supplemental
Mortgages prepared by a Person, and using a methodology,
satisfactory to the Agent; and
(G) contemporaneously dated opinions of local counsel in
the respective jurisdictions in which the properties covered by
the Supplemental Mortgages are located, substantially in the form
of Exhibit F-1 hereto (with such changes thereto as the Agent
shall approve), and in each case, covering such other matters as
the Agent may reasonably request (and the Company, each relevant
Subsidiary of the Company and each Supplemental Guarantor hereby
instructs such counsel to deliver such opinion to the Lenders and
the Agent).
In addition, the Company shall have paid to the Title Companies all
expenses and premiums of the Title Companies in connection with the
issuance of such policies and in addition shall have paid to the Title
Companies an amount equal to the recording and stamp taxes payable in
connection with recording the Supplemental Mortgages in the
appropriate jurisdictions.
(v) FINANCIAL INFORMATION. (A) a certificate of a Responsible
Financial Officer of the Company to the effect that on a pro forma
basis after giving effect to the relevant Permitted Acquisition, the
Company shall remain in compliance with Sections 8.10, 8.11, 8.12,
8.13 and 8.14 hereof and (B) the most recent audited consolidated
balance sheet of the Person (if any) to be acquired and its
Subsidiaries and the related statement of income, retained earnings
and cash flow for the fiscal year ended on said date, with opinions
thereon of the auditors of such Person(or, if audited financial
statements are not available to the Company, unaudited financial
statements (i) reviewed by independent
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certified accountants of recognized national standing and
acceptable to the Agent and (ii) in form satisfactory to the
Agent), and the most recent unaudited consolidated balance
sheet of such Person and its Subsidiaries and the related
statements of income and retained earnings for the period
ended on the date of such unaudited statements.
(vi) PAYMENT OF FEES AND EXPENSES, ETC. Evidence that the
Company shall have paid such fees and expenses as the Company shall
have agreed to pay to the Agent in connection herewith, including,
without limitation, the reasonable fees and expenses of Milbank,
Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, special New York counsel to First Union, and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, special Puerto Rico counsel to First
Union, in connection with the satisfaction of the conditions in this
Section 6.02 and the making of the Facility C Loans hereunder in
connection with the relevant Permitted Acquisition (to the extent that
statements for such fees and expenses have been delivered to the
Company).
(vii) OTHER DOCUMENTS. Such other documents as the Agent or any
Lender or special New York counsel to First Union may reasonably
request.
6.03 INITIAL AND SUBSEQUENT LOANS. The obligation of the Lenders to
make any Facility C Loan or otherwise extend any credit to the Company upon the
occasion of each borrowing hereunder (including any borrowing on the date
hereof) are subject to the further conditions precedent that, both immediately
prior to the making of such Facility C Loan and also after giving effect thereto
and to the intended use thereof:
(i) no Default shall have occurred and be continuing; and
(ii) the representations and warranties made by the Company in
Section 7 hereof, and by each Obligor in each of the other Loan Documents to
which it is a party, shall be true and complete on and as of the date of the
making of such Facility C Loan with
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the same force and effect 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).
Each notice of borrowing by the Company hereunder shall constitute a
certification by the Company to the effect set forth in the first sentence of
this Section 6.03 (both as of the date of such notice and, unless the Company
otherwise notifies the Agent prior to the date of such borrowing, as of the date
of such borrowing).
Section 7. REPRESENTATIONS AND WARRANTIES. The Company
represents and warrants to the Agent and the Lenders that (with respect to
matters pertaining to itself and each of its Subsidiaries):
7.01 CORPORATE EXISTENCE. Each of the Company and its
Subsidiaries: (a) is a corporation, partnership or other entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization; (b) has all requisite corporate or other
power, and has all material governmental licenses, authorizations, consents
and approvals necessary to own its assets and carry on its business as now
being or as proposed to be conducted; and (c) is qualified to do business and
is in good standing in all jurisdictions in which the nature of the business
conducted by it makes such qualification necessary and where failure so to
qualify could (either individually or in the aggregate) have a Material
Adverse Effect.
7.02 FINANCIAL CONDITION. The Company has heretofore furnished to
each of the Lenders the following:
(a) a pro forma unaudited consolidated balance sheet of the Company
and its Subsidiaries (including ▇▇▇▇▇▇▇, Guest Choice and Swiss Dairy) as
at September 30, 1996, prepared on the assumption that the ▇▇▇▇▇▇▇
Acquisition (as defined in the Existing Credit Agreement) and the Swiss
Dairy Acquisition and all other transactions contemplated hereby to occur
at the same time had been effected,
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accompanied by a certificate of a Responsible Financial Officer of the
Company to the effect that (i) such balance sheet fairly presents the
pro forma consolidated financial condition of the Company and its
Subsidiaries, all in accordance with generally accepted accounting
principles and practices applied on a consistent basis, (ii) none of
the Company or any of 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 said balance sheet as at said date, and (iii) since
August 19, 1996, there has been no material adverse change in the pro
forma financial condition, business or prospects of the Company or
its Subsidiaries taken as a whole;
(b) unaudited consolidating balance sheets of the Company and its
Subsidiaries as at June 30, 1996 and the related consolidating statements
of income and retained earnings for the six-month period ended on said
date; and
(c) an audited consolidated balance sheet of the Company and its
Subsidiaries as at December 31, 1995 and the related consolidated
statements of income, retained earnings and cash flow of the Company and
its Subsidiaries for the fiscal period ended on said date, with the opinion
thereon of Deloitte & Touche LLP and the unaudited consolidated balance
sheet of the Company and its Subsidiaries as at June 30, 1996 and the
related consolidated statements of income and retained earnings of the
Company and its Subsidiaries for the quarterly period ended on said date.
All such financial statements fairly present the respective actual or pro forma
financial condition, as the case may be, of the respective entities as at the
respective dates, and the respective actual or pro forma results of operations
for the respective periods ended on said respective dates, all in accordance
with generally accepted accounting principles and practices applied on a
consistent basis. None of such respective entities has on the date hereof any
material contingent
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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 respective balance sheets
referred to above. Since June 30, 1996 (with respect to the Company and each
of its Subsidiaries), there has been no material adverse change in the
respective actual or pro forma financial condition, operations, business or
prospects of each such entity from that set forth in the respective financial
statements as at such respective dates.
7.03 LITIGATION. Except as disclosed in Schedule V hereto, there are
no legal or arbitral proceedings, or any proceedings by or before any
governmental or regulatory authority or agency, now pending or (to the knowledge
of the Company) threatened against the Company or any of its Subsidiaries that,
if adversely determined could (either individually or in the aggregate) have a
Material Adverse Effect.
7.04 NO BREACH. None of the execution and delivery of this Agreement
and the Facility C Notes and the other Basic Documents, the consummation of the
transactions herein and therein contemplated or compliance with the terms and
provisions hereof and thereof will conflict with or result in a breach of, or
require any consent under, the charter or by-laws of any Obligor, or any
applicable law or regulation, or any order, writ, injunction or decree of any
court or governmental authority or agency, or any material agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which any of them or any of their Property is bound or to which any of them is
subject, or constitute a default under any such agreement or instrument, or
(except for the Liens created pursuant to the Security Documents) result in the
creation or imposition of any Lien upon any Property of the Company or any of
its Subsidiaries pursuant to the terms of any such agreement or instrument.
7.05 ACTION. Each Obligor has all necessary corporate power,
authority and legal right to execute, deliver and perform its obligations under
each of the Basic Documents to which it is a party; the execution, delivery and
performance by each Obligor of each of the Basic Documents to which it is a
party have been
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duly authorized by all necessary corporate action on its part (including,
without limitation, any required shareholder approvals); and this Agreement
has been duly and validly executed and delivered by the Company and
constitutes, and each of the Facility C Notes and the other Basic Documents
to which it is a party when executed and delivered by the respective Obligor
(in the case of the Facility C Notes, for value) will constitute, its legal,
valid and binding obligation, enforceable against such Obligor in accordance
with its terms, except as such enforceability may be limited by (a)
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
applicability affecting the enforcement of creditors' rights and (b) the
application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law). Each
Security Document providing collateral security, directly or indirectly, for
the Facility C Loans is effective to create in favor of the Agent for the
benefit of the Lenders a legal, valid and enforceable first priority Lien
upon all right, title and interest of the Obligor or Obligors party thereto
in the Property described therein and such Lien has been perfected, except as
otherwise permitted under Section 8.06 hereof or in such Security Document.
7.06 APPROVALS. No authorizations, approvals or consents of, and no
filings or registrations with, any governmental or regulatory authority or
agency, or any securities exchange, are necessary for the execution, delivery or
performance by any Obligor of the Basic Documents to which it is a party or for
the legality, validity or enforceability hereof or thereof, except for filings
and recordings in respect of the Liens created pursuant to the Security
Documents.
7.07 USE OF CREDIT. None of the Company nor any of its Subsidiaries
is engaged principally, or as one of its important activities, in the business
of extending credit for the purpose, whether immediate, incidental or ultimate,
of buying or carrying Margin Stock, and no part of the proceeds of the Facility
C Loans hereunder will be used to buy or carry any Margin Stock.
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7.08 ERISA. Each Plan, and, to the knowledge of the Company, each
Multiemployer Plan, is in compliance in all material respects with, and has been
administered in all material respects in compliance with, the applicable
provisions of ERISA, the Code and any other Federal or State law, and no event
or condition has occurred and is continuing as to which the Company would be
under an obligation to furnish a report to the Lenders under Section 8.01(e)
hereof.
7.09 TAXES. The Company and its Subsidiaries (other than the
Obligors operating in the Commonwealth and ▇▇▇▇▇▇▇) are members of an affiliated
group of corporations filing consolidated returns for Federal income tax
purposes, of which the Company is the "common parent" (within the meaning of
Section 1504 of the Code) of such group. The Company and its Subsidiaries have
filed all Federal income tax returns and all other material tax returns that are
required to be filed by them and have paid all taxes due pursuant to such
returns or pursuant to any assessment received by the Company or any of its
Subsidiaries. The charges, accruals and reserves on the books of the Company
and its Subsidiaries in respect of taxes and other governmental charges are, in
the opinion of the Company, adequate. The Company has not given or been
requested to give a waiver of the statute of limitations relating to the payment
of Federal, state, local and foreign taxes or other impositions. ▇▇▇▇ Plastics
and Suiza Fruit each hold industrial tax exemption grants entitling each of them
to a 90% exemption from income and property taxes and a 60% exemption from
municipal license taxes. The grant held by ▇▇▇▇ Plastics will expire on August
31, 2000 for income tax purposes, on June 30, 2001 for municipal tax purposes
and on January 1, 2000 for property tax purposes. The grant held by Suiza Fruit
will expire on October 12, 2002 for income and property tax purposes and on June
30, 2003 for municipal license tax purposes.
7.10 INVESTMENT COMPANY ACT. Neither the Company nor any of its
Subsidiaries is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
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7.11 PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Company 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.
7.12 MATERIAL AGREEMENTS AND LIENS.
(a) Part A of Schedule I hereto is a complete and correct list, as of
the date hereof, and after giving effect to the transactions contemplated
hereunder to occur on such date, of each credit agreement, loan agreement,
indenture, purchase agreement, guarantee, letter of credit or other arrangement
providing for or otherwise relating to any Indebtedness or any extension of
credit (or commitment for any extension of credit) to, or guarantee by, the
Company or any of its Subsidiaries, and the aggregate principal or face amount
outstanding or that may become outstanding under each such arrangement is
correctly described in Part A of said Schedule I.
(b) Part B of Schedule I hereto is a complete and correct list, as of
the date hereof (and after giving effect to the transactions contemplated
hereunder to occur on such date), of each Lien securing Indebtedness of any
Person and covering any Property of the Company or any of its Subsidiaries that
will continue after the date hereof, and the aggregate Indebtedness secured (or
that may be secured) by each such Lien and the Property covered by each such
Lien is correctly described in Part B of said Schedule I.
7.13 ENVIRONMENTAL MATTERS. Each of the Company and its Subsidiaries
has obtained all environmental, health and safety permits, licenses and other
authorizations required under all Environmental Laws to carry on its business as
now being or as proposed to be conducted, except to the extent failure to have
any such permit, license or authorization would not (either individually or in
the aggregate) have a Material Adverse Effect. Each of such permits, licenses
and authorizations is in full force and effect and each of the Company and its
Subsidiaries is in compliance with the terms and conditions thereof, and is also
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in compliance with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in
any applicable Environmental Law or in any regulation, code, plan, order,
decree, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder, except to the extent failure to comply
therewith would not (either individually or in the aggregate) have a Material
Adverse Effect.
In addition, except as to matters with respect to which the Company
and its Subsidiaries could not reasonably be expected to incur liabilities in
excess of $250,000 in the aggregate:
(a) No notice, notification, demand, request for information,
citation, summons or order has been issued, no complaint has been filed, no
penalty has been assessed and no investigation or review is pending or
threatened by any governmental or other entity with respect to any alleged
failure by the Company or any of its Subsidiaries to have any
environmental, health or safety permit, license or other authorization
required under any Environmental Law in connection with the conduct of the
business of the Company or any of its Subsidiaries or with respect to any
generation, treatment, storage, recycling, transportation, discharge or
disposal, or any Release of any Hazardous Materials generated by the
Company or any of its Subsidiaries.
(b) Neither the Company nor any of its Subsidiaries owns, operates or
leases a treatment, storage or disposal facility requiring a permit under
the Resource Conservation and Recovery Act of 1976, as amended, or under
any comparable state or local statute; and
(i) no polychlorinated biphenyls (PCB's) is or has been
present at any site or facility now or previously owned, operated or
leased by the Company or any of its Subsidiaries;
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(ii) no asbestos or asbestos-containing materials is or has
been present at any site or facility now or previously owned, operated
or leased by the Company or any of its Subsidiaries;
(iii) there are no underground storage tanks, other than
those disclosed in consultant reports provided to the Agent by the
Company or its Subsidiaries, or surface impoundments for Hazardous
Materials, active or abandoned, at any site or facility now or
previously owned, operated or leased by the Company or any of its
Subsidiaries;
(iv) no Hazardous Materials have been Released at, on or
under any site or facility now or previously owned, operated or leased
by the Company or any of its Subsidiaries in a reportable quantity
established by statute, ordinance, rule, regulation or order; and
(v) no Hazardous Materials have been otherwise Released at,
on or under any site or facility now or previously owned, operated or
leased by the Company or any of its Subsidiaries that would (either
individually or in the aggregate) have a Material Adverse Effect.
(c) Neither the Company nor any of its Subsidiaries has transported
or arranged for the transportation of any Hazardous Material to any
location that is listed on the National Priorities List ("NPL") under the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), listed for possible inclusion on the NPL by
the Environmental Protection Agency in the Comprehensive Environmental
Response and Liability Information System, as provided for by 40 C.F.R.
Section 300.5 ("CERCLIS"), or on any similar state or local list or that is
the subject of Federal, state or local enforcement actions or other
investigations that may lead to Environmental Claims against the Company or
any of its Subsidiaries.
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(d) No Hazardous Material generated by the Company or any of its
Subsidiaries has been recycled, treated, stored, disposed of or Released by
the Company or any of its Subsidiaries at any location other than those
listed in Schedule II hereto.
(e) No oral or written notification of a Release of a Hazardous
Material has been filed by or on behalf of the Company or any of its
Subsidiaries and no site or facility now or previously owned, operated or
leased by the Company or any of its Subsidiaries is listed or proposed for
listing on the NPL, CERCLIS or any similar state list of sites requiring
investigation or clean-up.
(f) No Liens have arisen under or pursuant to any Environmental Laws
on any site or facility owned, operated or leased by the Company or any of
its Subsidiaries, and no government action has been taken or is in process
that could subject any such site or facility to such Liens and neither the
Company nor any of its Subsidiaries would be required to place any notice
or restriction relating to the presence of Hazardous Materials at any site
or facility owned by it in any deed to the real property on which such site
or facility is located.
(g) All environmental investigations, studies, audits, tests, reviews
or other analyses conducted by or that are in the possession of the Company
or any of its Subsidiaries in relation to facts, circumstances or
conditions at or affecting any site or facility now or previously owned,
operated or leased by the Company or any of its Subsidiaries and that could
result in a Material Adverse Effect have been made available to the
Lenders.
7.14 CAPITALIZATION. As of the date hereof (and after giving effect
to the Swiss Dairy Acquisition and the other transactions contemplated hereunder
to occur on such date),
(a) the authorized capital stock of the Company consists of
21,000,000 shares, consisting of
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20,000,000 shares of common stock, par value $0.01 per share, and
1,000,000 shares of preferred stock, par value $0.01 per share;
(b) the Company has 10,739,729 shares of issued and outstanding
common stock, and all of such issued shares are duly and validly issued and
outstanding and are not held in treasury;
(c) the Company has no issued or outstanding preferred stock;
(d) except for options to purchase 579,760 shares of common stock
granted under the Company's Exchange Stock Option and Restricted Stock Plan
and options to purchase up to 1,069,500 shares of common stock granted
(787,078) or available (282,422) for future grants under the Company's 1995
Stock Option and Restricted Stock Plan, there are no outstanding Equity
Rights with respect to the Company; and
(e) there are no outstanding obligations of the Company or any of its
Subsidiaries to repurchase, redeem, or otherwise acquire any shares of
capital stock of the Company or any of its Subsidiaries or to make payments
to any Person, such as "phantom stock" payments, where the amount thereof
is calculated with reference to the fair market value or equity value of
the Company or any of its Subsidiaries.
7.15 SUBSIDIARIES, ETC.
(a) Set forth in Part A of Schedule III hereto is a complete and
correct list, as of the date hereof (and as of the Closing Date after giving
effect to the transactions contemplated hereunder to occur on such date and
after consummation of the Swiss Dairy Acquisition), of all of the Subsidiaries
of the Company, together with, for each such Subsidiary, (i) the jurisdiction of
organization of such Subsidiary, (ii) each Person holding ownership interests in
such Subsidiary and (iii) the nature of the ownership interests held by each
such Person and
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the percentage of ownership of such Subsidiary represented by such ownership
interests. Except as disclosed in Part A of Schedule III hereto, (x) each of
the Company and its Subsidiaries owns, free and clear of Liens (other than
Liens created pursuant to the Security Documents), and has the unencumbered
right to vote, all outstanding ownership interests in each Person shown to be
held by it in Part A of Schedule III hereto, (y) all of the issued and
outstanding capital stock of each such Person organized as a corporation is
validly issued, fully paid and nonassessable and (z) there are no outstanding
Equity Rights with respect to such Person.
(b) Set forth in Part B of Schedule III hereto is a complete and
correct list, as of the date hereof, of all Investments (other than Investments
disclosed in Part A of said Schedule III hereto) held by the Company or any of
its Subsidiaries in any Person and, for each such Investment, (x) the identity
of the Person or Persons holding such Investment and (y) the nature of such
Investment. Except as disclosed in Part B of Schedule III hereto, each of the
Company and its Subsidiaries owns, free and clear of all Liens (other than Liens
created pursuant to the Security Documents), all such Investments.
(c) None of the Subsidiaries of the Company is, on the date hereof,
subject to any indenture, agreement, instrument or other arrangement of the type
described in Section 8.19(b) hereof.
7.16 TITLE TO ASSETS. The Company owns and has on the date hereof,
and will own and have on the Closing Date, good and marketable title (subject
only to Liens permitted by Section 8.06 hereof) to the Properties shown to be
owned in the most recent financial statements referred to in Section 8.02 hereof
(other than Properties disposed of in the ordinary course of business or
otherwise permitted to be disposed of pursuant to Section 8.05 hereof). The
Company owns and has on the date hereof, and will own and have on the Closing
Date, good and marketable title to, and enjoys on the date hereof, and will
enjoy on the Closing Date, peaceful and undisturbed possession of, all
Properties
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(subject only to Liens permitted by Section 8.06 hereof) that are necessary
for the operation and conduct of its businesses.
7.17 TRUE AND COMPLETE DISCLOSURE. The information, reports,
financial statements, exhibits and schedules furnished in writing by or on
behalf of the Obligors to the Agent or any Lender in connection with the
negotiation, preparation or delivery of this Agreement and the other Loan
Documents or included herein or therein or delivered pursuant hereto or thereto,
when taken as a whole do not contain any untrue statement of material fact or
omit to state any material fact necessary to make the statements herein or
therein, in light of the circumstances under which they were made, not
misleading. All written information furnished after the date hereof by the
Company and its Subsidiaries to the Agent and the Lenders in connection with
this Agreement and the other Loan Documents and the transactions contemplated
hereby and thereby will be true, complete and accurate in every material
respect, or (in the case of projections) based on reasonable estimates, on the
date as of which such information is stated or certified. There is no fact
known to the Company that could have a Material Adverse Effect that has not been
disclosed herein, in the other Loan Documents or in a report, financial
statement, exhibit, schedule, disclosure letter or other writing furnished to
the Lenders for use in connection with the transactions contemplated hereby or
thereby.
7.18 REAL PROPERTY. Set forth on Schedule IV attached hereto is a
list, as of the date hereof of all of the real property interests held by the
Company and its Subsidiaries, indicating in each case whether the respective
Property is owned or leased, the identity of the owner or lessee and the
location of the respective Property.
7.19 SOLVENCY. As of the Closing Date and after giving effect to the
initial Facility C Loans hereunder and the other transactions contemplated
hereby, (a) the aggregate value of all Properties of the Company and its
Subsidiaries at their present fair saleable value (i.e., the amount that may be
realized within a reasonable time, considered to be six months to
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one year, either through collection or sale at the regular market value,
conceiving the latter as the amount that could be obtained for the Property
in question within such period by a capable and diligent businessman from an
interested buyer who is willing to purchase under ordinary selling
conditions), exceeds the amount of all the debts and liabilities (including
contingent, subordinated, unmatured and unliquidated liabilities) of the
Company and its Subsidiaries, (b) the Company and its Subsidiaries will not,
on a consolidated basis, have unreasonably small capital with which to
conduct their business operations as heretofore conducted and (c) the Company
and its Subsidiaries will have, on a consolidated basis, sufficient cash flow
to enable them to pay their debts as they mature.
Section 8. COVENANTS OF THE COMPANY. The Company covenants and
agrees with the Lenders and the Agent that, so long as any Facility C Commitment
or Facility C Loan is outstanding and until payment in full of all amounts
payable by the Company hereunder:
8.01 FINANCIAL STATEMENTS, ETC. The Company shall deliver, or shall
cause to be delivered, to each of the Lenders:
(a) as soon as available and in any event within 45 days after the
end of each quarterly fiscal period of each fiscal year of the Company,
consolidated and consolidating statements of income, retained earnings and
cash flow of the Company and its Subsidiaries for such period and for the
period from the beginning of the respective fiscal year to the end of such
period, and the related consolidated and consolidating balance sheets of
the Company and its Subsidiaries as at the end of such period, setting
forth in each case in comparative form the corresponding consolidated and
consolidating figures for the corresponding periods in the preceding fiscal
year, accompanied by a certificate of a Responsible Financial Officer of
the Company, which certificate shall state that said consolidated financial
statements fairly present the consolidated financial condition and results
of operations of the Company and its Subsidiaries, and said consolidating
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financial statements fairly present the respective individual
unconsolidated financial condition and results of operations of the Company
and of each of its Subsidiaries, in each case in accordance with generally
accepted accounting principles, consistently applied, as at the end of, and
for, such period (subject to normal year-end audit adjustments);
(b) as soon as available and in any event within 90 days after the
end of each fiscal year of the Company, consolidated and consolidating
statements of income, retained earnings and cash flow of the Company and
its Subsidiaries for such fiscal year and the related consolidated and
consolidating balance sheets of the Company and its Subsidiaries as at the
end of such fiscal year, setting forth in each case in comparative form the
corresponding consolidated and consolidating figures for the preceding
fiscal year, and accompanied (i) in the case of said consolidated
statements and balance sheet of the Company, by an opinion thereon of
independent certified public accountants of recognized national standing,
which opinion shall state that said consolidated financial statements
fairly present the consolidated financial condition and results of
operations of the Company and its Subsidiaries as at the end of, and for,
such fiscal year in accordance with generally accepted accounting
principles, 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, and (ii) in the case of said
consolidating statements and balance sheets, by a certificate of a
Responsible Financial Officer of the Company, which certificate shall state
that said consolidating financial statements fairly present the respective
individual unconsolidated financial condition and results of operations of
the Company and of each of its Subsidiaries, in each case in accordance
with generally accepted accounting principles, consistently applied, as at
the end of, and for, such fiscal year;
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(c) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any, that the
Company shall have filed with the Commission or any national securities
exchange;
(d) promptly upon mailing thereof to the shareholders of the Company
generally, copies of all financial statements, reports and proxy statements
so mailed;
(e) as soon as possible, and in any event within ten days after the
Company 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 Financial Officer of the
Company setting forth details respecting such event or condition and the
action, if any, that the Company or its 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 Company or an ERISA Affiliate with
respect to such event or condition):
(i) any reportable event, as defined in Section 4043(b) of
ERISA and the regulations issued thereunder, 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
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action taken by the Company or an 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 the Company 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 the Company 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 the Company or any ERISA Affiliate of
notice from a Multiemployer Plan that it is in reorganization or
insolvency pursuant to 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 the Company 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 the Company or an ERISA Affiliate fails to
timely provide security to the Plan in accordance with the provisions
of said Sections;
(f) [Intentionally left blank];
(g) promptly after the Company knows or has reason to believe that
any Default has occurred, a notice of such Default describing the same in
reasonable detail and,
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together with such notice or as soon thereafter as possible, a
description of the action that the Company has taken or proposes
to take with respect thereto;
(h) promptly upon receipt thereof, copies of all management letters
and other material reports which are submitted to the Board of Directors of
the Company or any of its Subsidiaries by their independent certified
public accountants in connection with any annual audit of the Company
and/or any such Subsidiary by such accountants;
(i) as soon as available and in any event on or before December 31 of
each fiscal year, a budget for the next following fiscal year setting forth
for each Subsidiary of the Company and for the Company and its Subsidiaries
as a whole, anticipated income, expense and capital expenditure items for
each quarter during such fiscal year, and quarterly, concurrently with the
delivery of the financial statements for such fiscal year pursuant to
clause (a) above, a report setting forth a detailed comparison of actual
performance to the budget referred to above; and
(j) from time to time such other information regarding the financial
condition, operations, business or prospects of the Company 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 Agent may reasonably request.
The Company will furnish to each Lender, at the time it furnishes each set of
financial statements pursuant to clause (a) above, a certificate of a
Responsible Financial Officer of the Company (i) to the effect that no Default
has occurred and is continuing (or, if any Default has occurred and is
continuing, describing the same in reasonable detail and describing the action
that the Company has taken or proposes to take with respect thereto) and
(ii) setting forth in reasonable detail the computations necessary to determine
whether the Company is in compliance with Sections 8.10, 8.11, 8.12, 8.13 and
8.14 hereof as of the end of the respective quarterly fiscal period or fiscal
year.
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8.02 LITIGATION. The Company will promptly give to each Lender
notice of all legal or arbitral proceedings, and of all proceedings by or before
any governmental or regulatory authority or agency, and any material development
in respect of such legal or other proceedings, affecting the Company or any of
its Subsidiaries, except proceedings that, if adversely determined, would not
(either individually or in the aggregate) have a Material Adverse Effect.
Without limiting the generality of the foregoing, the Company will give to each
Lender notice of the assertion of any Environmental Claim by any Person against,
or with respect to the activities of, the Company 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.
8.03 EXISTENCE, ETC. The Company will, and will cause each of its
Subsidiaries to:
(a) preserve and maintain its legal existence and all of its material
rights, privileges, licenses and franchises (PROVIDED that nothing in this
Section 8.03 shall prohibit any transaction expressly permitted under
Section 8.05 hereof);
(b) comply with the requirements of all applicable laws, rules,
regulations and orders of governmental or regulatory authorities if failure
to comply with such requirements could (either individually or in the
aggregate) have a Material Adverse Effect;
(c) 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
Property prior to the date on which penalties attach thereto, except for
any such tax, assessment, charge or levy the payment of which is
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being contested in good faith and by proper proceedings and against
which adequate reserves are being maintained;
(d) maintain all of its Properties used or useful in its business in
good working order and condition, ordinary wear and tear excepted;
(e) keep adequate records and books of account, in which complete
entries will be made in accordance with generally accepted accounting
principles consistently applied; and
(f) permit representatives of any Lender or the Agent, during normal
business hours, to examine, copy and make extracts from its books and
records, to inspect any of its Properties, and to discuss its business and
affairs with its officers, all to the extent reasonably requested by such
Lender or the Agent (as the case may be).
8.04 INSURANCE. The Company will, and will cause each of its
Subsidiaries to, 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, damage and liability of the kinds and in the
amounts customarily maintained by such corporations. The Company will in any
event maintain (with respect to itself and each of its Subsidiaries):
(1) Casualty Insurance -- insurance against loss or damage covering
all of the tangible real and personal Property and improvements of the
Company and each of its Subsidiaries by reason of any Peril (as defined
below) in such amounts (subject to such deductibles as shall be
satisfactory to the Majority Lenders) as shall be reasonable and customary
and sufficient to avoid the insured named therein from becoming a
co-insurer of any loss under such policy but in any event in an amount
(i) in the case of fixed assets and equipment (including, without
limitation, vehicles), at least equal to 100% of the actual replacement
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cost of such assets (including, without limitation, foundation, footings
and excavation costs), subject to deductibles as aforesaid (PROVIDED that
recovery limits may be applicable to losses caused by flood or earthquake)
and (ii) in the case of inventory, not less than the fair market value
thereof, subject to deductibles as aforesaid.
(2) Automobile Liability Insurance for Bodily Injury and Property
Damage -- insurance against liability for bodily injury and property damage
in respect of all vehicles (whether owned, hired or rented by the Company
or any of its Subsidiaries) at any time located at, or used in connection
with, its Properties or operations in such amounts as are then customary
for vehicles used in connection with similar Properties and businesses, but
in any event to the extent required by applicable law.
(3) Comprehensive General Liability Insurance -- insurance against
claims for bodily injury, death or Property damage occurring on, in or
about the Properties (and adjoining streets, sidewalks and waterways) of
the Company and its Subsidiaries, in such amounts as are then customary for
Property similar in use in the jurisdictions where such Properties are
located.
(4) Workers' Compensation Insurance -- workers' compensation
insurance (including, without limitation, Employers' Liability Insurance)
to the extent required by applicable law.
(5) Product Liability Insurance -- insurance against claims for
bodily injury, death or Property damage resulting from the use of products
sold by the Company or any of its Subsidiaries in such amounts as are then
customarily maintained by responsible persons engaged in businesses similar
to that of the Company and its Subsidiaries.
(6) Business Interruption Insurance -- insurance against loss of
operating income (up to an aggregate amount equal to $15,000,000 and
subject to a deductible, or
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self-insured amount, not in excess of $500,000) by reason of any Peril.
(7) Other Insurance -- such other insurance, including, without
limitation, War-Risk Insurance when and to the extent obtainable from the
United States Government, in each case as generally carried by owners of
similar Properties in the jurisdictions where such Properties are located,
in such amounts and against such risks as are then customary for Property
similar in use.
Such insurance shall be written by financially responsible companies selected by
the Company and having an A. M. Best rating of "A-" or better and being in a
financial size category of VIII or larger, or by other companies acceptable to
the Majority Lenders, and (other than workers' compensation) shall name the
Agent as loss payee (to the extent covering risk of loss or damage to tangible
property) and as an additional named insured as its interests may appear (to the
extent covering any other risk). Each policy referred to in this Section 8.04
shall provide that it will not be canceled or reduced, or allowed to lapse
without renewal, except after not less than 30 days' notice to the Agent and
shall also provide that the interests of the Agent and the Lenders shall not be
invalidated by any act or negligence of the Company or any Person having an
interest in any Property covered by the Mortgages which, directly or indirectly,
secure the Facility C Loans nor by occupancy or use of any such Property for
purposes more hazardous than permitted by such policy nor by any foreclosure or
other proceedings relating to such Property. The Company will advise the Agent
promptly of any policy cancellation, reduction or amendment.
On or before the date hereof, the Company will deliver to the Agent
certificates of insurance satisfactory to the Agent evidencing the existence of
all insurance required to be maintained by the Company hereunder setting forth
the respective coverage, limits of liability, carrier, policy number and period
of coverage (and attaching original copies of any policies with respect to
casualty insurance). Thereafter, each year the Company will deliver to the
Agent certificates of insurance
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evidencing that all insurance required to be maintained by the Company
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. In addition, the Company will not modify any of the provisions of any
policy with respect to casualty insurance without delivering the original
copy of the endorsement reflecting such modification to the Agent accompanied
by (if requested by the Agent) a written report of a firm of independent
insurance brokers of nationally recognized standing, stating that, in their
opinion, such policy (as so modified) adequately protects the interests of
the Lenders and the Agent, is in compliance with the provisions of this
Section 8.04, and is comparable in all respects with insurance carried by
responsible owners and operators of Properties similar to those covered by
the Mortgages which, directly or indirectly, secure the Facility C Loans.
The Company will not obtain or carry separate insurance concurrent in form or
contributing in the event of loss with that required by this Section 8.04
unless the Agent is the named insured thereunder, with loss payable as
provided herein. The Company will immediately notify the Agent whenever any
such separate insurance is obtained and shall deliver to the Agent the
certificates evidencing the same.
Without limiting the obligations of the Company under the foregoing
provisions of this Section 8.04, in the event the Company shall fail to maintain
in full force and effect insurance as required by the foregoing provisions of
this Section 8.04, then the Agent may, but shall have no obligation so to do,
procure insurance covering the interests of the Lenders and the Agent in such
amounts and against such risks as the Agent (or the Majority Lenders) shall deem
appropriate, and the Company shall reimburse the Agent in respect of any
premiums paid by the Agent in respect thereof.
For purposes hereof, the term "PERIL" shall mean, collectively, fire,
lightning, flood, windstorm, hail, earthquake, explosion, riot and civil
commotion, vandalism and malicious mischief, damage from aircraft, vehicles and
smoke and all other perils covered by the "all-risk" endorsement then in
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use in the jurisdictions where the Properties of the Company and its
Subsidiaries are located.
8.05 PROHIBITION OF FUNDAMENTAL CHANGES. (a) The Company will not,
nor will it permit any of its Subsidiaries to, enter into any transaction of
merger or consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution).
(b) The Company will not, nor will it permit any of its Subsidiaries
to, acquire any business or Property from, or capital stock of, or be a party to
any acquisition of, any Person except:
(i) for purchases of inventory and other Property to be sold or
used in the ordinary course of business;
(ii) Investments permitted under Section 8.08 hereof;
(iii) Capital Expenditures permitted under Section 8.14 hereof;
and
(iv) Permitted Acquisitions and acquisitions permitted under
Section 9.05(b)(iv) of the Existing Credit Agreement.
(c) The Company will not, nor will it permit any of its Subsidiaries
to, convey, sell, lease, transfer or otherwise dispose of, in one transaction or
a series of transactions, any part of its business or Property, 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 so long as the
aggregate amount thereof sold in any single fiscal year by the Company and
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its Subsidiaries shall not have a fair market value in excess of $500,000;
and
(iii) any inventory or other Property sold or disposed of in the
ordinary course of business and on ordinary business terms.
(d) Notwithstanding the foregoing provisions of this Section 8.05, so
long as no Default shall have occurred and be continuing and, after giving
effect to any of the succeeding transactions, no Default would exist hereunder,
and so long as the Liens created under the Security Documents continue to be in
effect:
(i) any Subsidiary of the Company may be merged or consolidated
with or into: (x) the Company if the Company shall be the continuing or
surviving corporation or (y) any other such Subsidiary; and
(ii) any Subsidiary of the Company may sell, lease, transfer or
otherwise dispose of any or all of its Property (upon voluntary liquidation
or otherwise) to the Company or a Subsidiary of the Company.
8.06 LIMITATION ON LIENS. The Company will not, nor will it permit
any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien
upon any of its Property, whether now owned or hereafter acquired, except:
(a) Liens created pursuant to the Security Documents;
(b) Liens in existence on the date hereof and listed in Part B of
Schedule I hereto;
(▇) ▇▇▇▇▇ 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 Company
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or the affected Subsidiaries, as the case may be, in accordance with GAAP;
(d) 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;
(e) Liens securing judgments but only to the extent for an amount and
for a period not resulting in an Event of Default under Section 9(i)
hereof;
(f) pledges or deposits under worker's compensation, unemployment
insurance and other social security legislation;
(g) deposits or pledges to secure the performance of bids, trade
contracts (other than for Indebtedness), leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(h) 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 Company or any
of its Subsidiaries;
(i) Liens upon tangible personal Property acquired after the date
hereof (by purchase, construction or otherwise), or upon other property
acquired after the date hereof as a Capital Expenditure, by the Company or
any of its Subsidiaries, each of which Liens either (A) existed on such
Property before the time of its acquisition and was not created in
anticipation thereof or (B) was created solely
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for the purpose of securing Indebtedness representing, or incurred to
finance, refinance or refund, the cost of such Property; PROVIDED that
(i) no such Lien shall extend to or cover any Property of the Company
or such Subsidiary other than the Property so acquired, (ii) the
principal amount of Indebtedness secured by any such Lien shall at no
time exceed the fair market value (as determined in good faith by a
Responsible Financial Officer of the Company) of such Property at the
time it was acquired, and (iii) the principal amount of all Indebtedness
(other than Indebtedness permitted by Section 8.07(e) hereof)
secured by such Liens shall not exceed $500,000 in the aggregate;
(j) 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 Company or any of its Subsidiaries in favor of the lessor
created at the inception of the lease transaction, securing obligations of
the Company 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;
(k) Liens of sellers or creditors of sellers of farm products
encumbering such farm products when sold to any of the Obligors 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 Obligors;
(l) protective Uniform Commercial Code filings with respect to
personal Property leased by any Obligor; and
(m) any extension, renewal or replacement of the foregoing, PROVIDED,
however, that the Liens permitted hereunder shall not be spread to cover
any additional Indebtedness or Property.
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8.07 INDEBTEDNESS. The Company will not, nor will it permit any of
its Subsidiaries to, create, incur or suffer to exist any Indebtedness except:
(a) Indebtedness to the Lenders hereunder, under the other Loan
Documents and under the Existing Credit Agreement;
(b) the Subordinated Indebtedness (but not any replacement, renewal,
refunding, refinancing or extension thereof);
(c) Indebtedness outstanding on the date hereof and listed in Part A
of Schedule I hereto;
(d) Indebtedness of Subsidiaries of the Company to the Company or to
other Subsidiaries of the Company or of the Company to any of its
Subsidiaries to the extent permitted under Section 8.08(e) or (g) hereof;
(e) Indebtedness (including Capital Lease Obligations) incurred to
finance the purchase of equipment, and other Capital Lease Obligations, not
to exceed $3,750,000 in the aggregate outstanding at any time; and
(f) additional Indebtedness of the Company and its Subsidiaries up to
but not exceeding $1,000,000 at any one time outstanding.
8.08 INVESTMENTS. The Company will not, nor will it permit any of
its Subsidiaries to, make or permit to remain outstanding any Investments
except:
(a) Investments outstanding as of the date hereof and identified in
Part B of Schedule III hereto (including, without limitation, Indebtedness
of any Subsidiary of the Company to the Company or any other Subsidiary of
the Company);
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(b) operating deposit accounts with depository institutions;
(c) Permitted Investments;
(d) Interest Rate Protection Agreements entered into pursuant to
Section 8.15 hereof;
(e) Investments permitted under Section 8.05(b) hereof and
indemnities executed in connection with the sale of Investment Tax Credits;
(f) Investments by the Company in the capital stock of its
Subsidiaries to the extent outstanding as of the date hereof;
(g) Investments (other than of a type specified in clause (f) above
and other than the Investments permitted under clause (a) above) by the
Company in its Subsidiaries or by any Subsidiary of the Company in the
Company or any other Subsidiary of the Company made after the date hereof
not exceeding $10,000,000 at any time outstanding (MINUS (without
duplication) the aggregate principal amount of Indebtedness outstanding
under Section 8.07(d) hereof);
(h) loans and advances to employees up to but not exceeding $500,000
in the aggregate;
(i) deposits to secure bids, tenders, utilities, vendors, leases,
statutory obligations, surety and appeal bonds and other deposits of like
nature arising in the ordinary course of business not exceeding $250,000 in
the aggregate;
(j) additional Investments up to but not exceeding $500,000 in the
aggregate; and
(k) any guarantees permitted under Section 8.07 hereof.
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8.09 RESTRICTED PAYMENTS.
(a) DIVIDEND PAYMENTS. The Company will not, nor will it permit any
of its Subsidiaries to, declare or make any Dividend Payment at any time,
PROVIDED that the Company may redeem or retire shares of its common stock from
any of its officers in connection with his or her voluntary departure,
dismissal, retirement or death, PROVIDED that (i) at the time of such redemption
or retirement no Default shall have occurred and be continuing and (ii) the
aggregate amount of all cash paid in respect of all such shares so redeemed or
repurchased does not exceed $500,000 in any fiscal year. Nothing herein shall
be deemed to prohibit the payment of dividends by any Subsidiary of the Company
to the Company or any other Subsidiary of the Company.
(b) MANAGEMENT FEES. The Company will not, nor will it permit any of
its Subsidiaries to, accrue or pay any Management Fees to any Person (including,
without limitation, any Affiliates), PROVIDED that, so long as no Default shall
have occurred and be continuing or would result therefrom, the Company may make
payments to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ not exceeding $150,000 in any fiscal year.
8.10 LEVERAGE RATIOS.
(a) The Company will not permit the Leverage Ratio to exceed the
following respective ratios at any time during the following respective periods:
PERIOD RATIO
From the date hereof
through and including
June 29, 1997 4.25 to 1
From June 30, 1997
through and including
June 29, 1998 3.75 to 1
From June 30, 1998
through and including
June 29, 1999 3.25 to 1
From June 30, 1999
and at all times
thereafter 2.75 to 1
(b) The Company will not permit the Senior Leverage Ratio to exceed
the following respective ratios at any time during the following respective
periods:
PERIOD RATIO
From the date hereof
through and including
June 29, 1997 3.75 to 1
From June 30, 1997
through and including
June 29, 1998 3.25 to 1
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From June 30, 1998
through and including
June 29, 1999 2.75 to 1
From June 30, 1999
and at all times
thereafter 2.25 to 1
8.11 MINIMUM NET WORTH. The Company will not permit its Net Worth
(i) for the period from the date hereof to and including December 31, 1996 to be
less than $63,000,000 and (ii) for each fiscal quarter thereafter, to be less
than $63,000,000 plus 50% of net income for all preceding fiscal quarters
(without including the results of any fiscal quarter in respect of which there
was a net loss) commencing with the fiscal quarter beginning January 1, 1997.
The amounts of Net Worth set forth above shall be increased by 75% of the amount
by which the "total stockholders equity" of the Company is increased as a
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result of any public or private offering of common stock of the Company after
September 1, 1996. Promptly upon consummation of each such public or private
offering, the Company shall notify the Agent in writing of the amount of such
increase in total stockholders equity.
8.12 FIXED CHARGES RATIO. The Company will not permit the Fixed
Charges Ratio to be less than 1.05 to 1 at any time.
8.13 INTEREST COVERAGE RATIOS.
(a) The Company will not permit the Interest Coverage Ratio to be
less than the following respective ratios at any time during the following
respective periods:
Period Ratio
------ -----
From the date hereof
through and including
June 29, 1997 2.20 to 1
From June 30, 1997
through and including
June 29, 1998 2.40 to 1
From June 30, 1998
through and including
June 29, 1999 2.75 to 1
From June 30, 1999
through and including
June 29, 2000 3.25 to 1
From June 30, 2000
and at all times
thereafter 3.75 to 1
(b) The Company will not permit the Senior Interest Coverage Ratio to
be less than the following respective ratios at any time during the following
respective periods:
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Period Ratio
------ -----
From the date hereof
through and including
June 29, 1997 3.50 to 1
From June 30, 1997
through and including
June 29, 1998 3.75 to 1
From June 30, 1998
through and including
June 29, 1999 4.00 to 1
From June 30, 1999
through and including
June 29, 2000 4.50 to 1
From June 30, 2000
and at all times
thereafter 5.00 to 1
8.14 CAPITAL EXPENDITURES. The Company will not permit the aggregate
amount of Capital Expenditures by the Company and its Subsidiaries to exceed the
following respective amounts for the following respective periods:
Period Amount
------ ------
From January 1, 1996 $13,000,000
through and including
December 31, 1996
From January 1, 1997 $14,000,000
through and including
December 31, 1997
From January 1, 1998 $15,000,000
through December 31, 1998,
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and for each fiscal year thereafter
If the aggregate amount of Capital Expenditures for any period set forth in the
schedule above shall be less than the amount set forth opposite such period in
the schedule above, then 50% of the shortfall shall be added to the amount of
Capital Expenditures permitted for the immediately succeeding period (but not
any other) period and, for the purposes hereof, the amount of Capital
Expenditures made during any period shall be deemed to have been made first from
the permitted amount for such period set forth in the schedule above and last
from the amount of any carryover from any previous period. Notwithstanding the
foregoing, in addition to the Capital Expenditures permitted to be incurred as
provided above, the Company may make the following additional Capital
Expenditures: (a) the acquisition of replacement Property in respect of an
Excluded Disposition; (b) the purchase price paid by the Company or any of its
Subsidiaries in respect of any acquisition permitted under Section 8.05(b)(iv)
hereof; (c) Capital Expenditures not exceeding $6,000,000 during the period from
and after the Closing Date to and including December 31, 1997 in respect of the
expansion by ▇▇▇▇▇ Farms of its facilities at Winter Haven, Miami, Jacksonville
and/or St. Petersburg, Florida; and (d) Capital Expenditures made with the
proceeds of property or casualty insurance for the purposes of repairing or
replacing damaged or destroyed fixed or capital assets.
8.15 INTEREST RATE PROTECTION AGREEMENTS. The Company shall maintain
in full force and effect the Interest Rate Protection Agreements existing as of
the date hereof as described in Section 6.01(l) hereof until the stated
expiration date thereof. The Company further agrees to provide to the Agent on
or before May 17, 1997 evidence that it has in full force and effect Interest
Rate Protection Agreements in form and substance satisfactory to the Agent that
enable the Company to protect against floating interest rates as to a notional
principal amount at least equal to 75% of the maximum aggregate principal amount
of the Facility B Loans outstanding from time to time during the period from
May 17, 1997 to and including July 31, 1999.
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8.16 LINES OF BUSINESS. Neither the Company nor any of its
Subsidiaries will engage to any substantial extent in any line or lines of
business activity other than operations involved in the manufacture, processing
or distribution of ice, ice-related products, coffee or dairy products, or the
lines of business conducted by the Company or any of its Subsidiaries as of the
date hereof.
8.17 TRANSACTIONS WITH AFFILIATES. Except as expressly permitted by
this Agreement, the Company will not, nor will it permit any of its Subsidiaries
to, directly or indirectly: (a) make any Investment in an Affiliate;
(b) transfer, sell, lease, assign or otherwise dispose of any Property to an
Affiliate; (c) merge into or consolidate with or purchase or acquire Property
from an Affiliate; or (d) enter into any other transaction directly or
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 Company or any of its Subsidiaries and receive reasonable
compensation for his or her services in such capacity and (ii) the Company and
its Subsidiaries may enter into transactions (other than extensions of credit by
the Company or any of its Subsidiaries to an Affiliate) if the monetary or
business consideration arising therefrom would be substantially as advantageous
to the Company and its Subsidiaries as the monetary or business consideration
that would obtain in a comparable transaction with a Person not an Affiliate.
8.18 USE OF PROCEEDS. The Company will use the proceeds of the
Facility C Loans only to make Permitted Acquisitions. The Company will use the
proceeds of all Facility C Loans hereunder in compliance with all applicable
legal and regulatory requirements. Neither the Agent nor any Lender shall have
any responsibility as to the use of any of such proceeds.
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8.19 CERTAIN OBLIGATIONS RESPECTING SUBSIDIARIES; ADDITIONAL
MORTGAGED PROPERTIES.
(a) The Company will, and will cause each of its Subsidiaries to,
take such action from time to time as shall be necessary to ensure that each of
its Subsidiaries is a Wholly Owned Subsidiary. In the event that any additional
shares of stock shall be issued by any Subsidiary, the respective Obligor agrees
forthwith to deliver to the Agent pursuant to the relevant Security Document the
certificates evidencing such shares of stock, accompanied by undated stock
powers executed in blank and to take such other action as the Agent shall
request to perfect the security interest created therein pursuant to such
Security Document.
(b) The Company will not permit any of its Subsidiaries to enter
into, after the date of this Agreement, any indenture, agreement, instrument or
other arrangement (other than the ▇▇▇▇▇▇▇ Negative Pledge Agreement) that,
directly or indirectly, prohibits or restrains, or has the effect of prohibiting
or restraining, or imposes materially adverse conditions upon, the incurrence or
payment of Indebtedness, the granting of Liens, the declaration or payment of
dividends, the making of loans, advances or Investments or the sale, assignment,
transfer or other disposition of Property.
(c) The Company will take such action, and will cause each of its
Subsidiaries (other than ▇▇▇▇▇▇▇) to take such action, from time to time as
shall be necessary to ensure that all Subsidiaries of the Company (other than
▇▇▇▇▇▇▇) are party to, as obligors, the Existing Subsidiary Guarantee and
Security Agreement or a Supplemental Subsidiary Guarantee and Security
Agreement. Without limiting the generality of the foregoing, in the event that
the Company or any of its Subsidiaries shall form or acquire any new Subsidiary,
the Company or the respective Subsidiary will cause such new Subsidiary to (i)
become a party to the Existing Subsidiary Guarantee and Security Agreement or a
Supplemental Subsidiary Guarantee and Security Agreement pursuant to a written
instrument in form and substance satisfactory to the Agent, (ii) if requested by
the Majority Lenders, cause such new
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Subsidiary to execute and deliver one or more Mortgages, in substantially the
form of Exhibits D-1 or D-2 hereto (with such changes thereto as the Agent
may reasonably request), covering the real Property and/or fixtures of such
Subsidiary, and (iii) to deliver such proof of corporate action, incumbency
of officers, opinions of counsel and other documents relating to the
foregoing as is consistent with those to be delivered by each Supplemental
Guarantor pursuant to Section 6.02 hereof or delivered pursuant to
Section 7.01 of the Existing Credit Agreement, as the case may be, or as any
Lender or the Agent shall have reasonably requested.
(d) Without affecting the obligations of the Company under any
provision prohibiting such action hereunder, in the event that the Company or
any of its Subsidiaries (other than ▇▇▇▇▇▇▇) shall acquire any business or
Property after the date hereof, the Company shall, or shall cause such
Subsidiary to (i) if requested by the Majority Lenders, execute and deliver one
or more Mortgages, substantially in the form of Exhibits D-1 or D-2 hereto (with
such changes as the Agent may reasonably request), covering the real property
and/or fixtures so acquired, (ii) execute and deliver to the Agent for filing,
appropriately completed Uniform Commercial Code financing statements or other
filings or instruments as the Agent shall request in order to perfect the
security interest in favor of the Agent for the benefit of the Lenders in such
Property so acquired and (iii) deliver such proof of corporate action,
incumbency of officers, opinions of counsel and other documents relating to the
foregoing as is consistent with those to be delivered by each Supplemental
Guarantor pursuant to Section 6.02 hereof or delivered pursuant to Section 7.01
of the Existing Credit Agreement, as the case may be, or as any Lender or the
Agent shall have reasonably requested.
8.20 MODIFICATIONS OF CERTAIN DOCUMENTS. Except in connection with
any transaction expressly permitted hereunder, the Company will not, nor will it
permit any of its Subsidiaries to, consent to any modification, supplement or
waiver of any of the provisions of the Swiss Dairy Purchase Agreement or any
agreement, instrument or other document evidencing or relating to
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the charter or by-laws of the Company or any of its Subsidiaries, in each
case, without the prior consent of the Agent (with the approval of the
Majority Lenders). Without limiting the requirement for consent as provided
in the immediately preceding sentence, the Company will furnish to the Agent
a copy of each such modification, supplement or waiver promptly upon the
effectiveness thereof (and the Agent will promptly furnish a copy thereof to
each Lender).
8.21 FURTHER ASSURANCES. As and to the extent requested from time to
time by the Agent or the Majority Lenders, each Supplemental Guarantor operating
in the Commonwealth will grant to the Agent, for the benefit of the Lenders, a
Lien in respect of any Property owned by such Supplemental Guarantor operating
in the Commonwealth. Such Lien shall be granted pursuant to documentation
reasonably satisfactory in form and substance to the Agent (collectively, the
"ADDITIONAL PUERTO RICO SECURITY DOCUMENTS") and shall constitute valid and
enforceable perfected liens superior to and prior to the rights of all other
Persons and subject to no other Liens except for the Liens permitted pursuant to
Section 8.06 hereof. The Additional Puerto Rico Security Documents or other
instruments related thereto shall be duly recorded or filed in such manner and
in such places as are required by law to establish, perfect, preserve and
protect the Liens in favor of the Agent for the benefit of the Lenders required
to be granted pursuant to the Additional Puerto Rico Security Documents and all
taxes, fees and other charges payable in connection therewith shall be paid in
full.
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8.22 SUBORDINATED INDEBTEDNESS.
(a) Neither the Company nor any of its Subsidiaries will purchase,
redeem, retire or otherwise acquire for value, or set apart any money for a
sinking, defeasance or other analogous fund for the purchase, redemption,
retirement or other acquisition of, or make any payment or prepayment of the
principal of or interest on, or any other amount owing in respect of, any
Subordinated Indebtedness, except: (i) for regularly scheduled payments of
principal and interest (including post-default interest) in respect thereof
required pursuant to the instruments evidencing such Subordinated Indebtedness
(and permitted to be made at the time of payment thereof pursuant to the
Subordination Agreement); (ii) the payment or reimbursement of expenses in
connection with the negotiation, execution, delivery and administration and/or
the supervision of, and any permitted amendment or waiver of, the Subordinated
Debt Documents, all in accordance with Section 14 of the Subordinated Note
Purchase Agreement, but excluding expenses, fees or other amounts relating to
the exercise of any rights or remedies or the taking of any enforcement action
by the holders of any Subordinated Indebtedness under or in respect of any
Subordinated Debt Document or any restructuring, refinancing or workout or
similar transaction relating thereto; and (iii) that the Company may redeem or
prepay the Subordinated Indebtedness, in whole or in part, pursuant to Section
7.2 of the Subordinated Note Purchase Agreement from the proceeds of a Public
Offering by the Company after the date hereof, PROVIDED that (i) at the time of
such redemption or prepayment, and at the time any notice with respect thereto
shall be required to be given pursuant to the Subordinated Debt Documents, no
Default shall have occurred and be continuing and (ii) any proceeds of such
offering that remain unapplied after such redemption or prepayment shall be
applied pursuant to Section 2.09(c) hereof. For purposes of this Section
8.22(a), "PUBLIC OFFERING" shall mean a registered public offering under the
Securities Act of 1933, as amended, of capital stock of the Company.
(b) The Company will not, nor will it permit any of its Subsidiaries to,
consent to any modification, supplement or
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waiver of any of the provisions of the Subordinated Debt Documents without
the prior consent of the Agent (with the approval of the Majority Lenders),
except for any such modification, supplement or waiver which does not require
such consent under the express terms of the Subordination Agreement;
PROVIDED, however, that prior to entering into any modification, supplement
or waiver of the Subordinated Debt Documents the Company shall give the Agent
not less than 10 Business Days prior notice thereof furnishing the Agent with
a copy of the proposed amendment, modification or waiver.
Section 9. EVENTS OF DEFAULT. If one or more of the following events
(herein called "EVENTS OF DEFAULT") shall occur and be continuing:
(a) The Company shall: (i) default in the payment of any principal
of any Facility C Loan when due (whether at stated maturity or at mandatory
prepayment); or (ii) default in the payment of any interest on any Facility
C Loan, any fee or any other amount payable by it hereunder or under any
other Loan Document when due and such default shall have continued
unremedied for three or more Business Days; or
(b) The Company or any of its Subsidiaries shall default in the
payment when due of any principal of or interest on any of its other
Indebtedness aggregating $500,000 or more, or in the payment when due of
any amount under any Interest Rate Protection Agreement; or any event
specified in any note, agreement, indenture or other document evidencing or
relating to any such Indebtedness or any event specified in any Interest
Rate Protection Agreement shall occur if the effect of such event is to
cause, or (with the giving of any notice or the lapse of time or both) to
permit the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause, such Indebtedness to become
due, or to be prepaid in full (whether by redemption, purchase, offer to
purchase or otherwise), prior to its stated maturity or to have the
interest rate thereon reset to a level so that securities evidencing such
Indebtedness trade at a level
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specified in relation to the par value thereof or, in the case of an
Interest Rate Protection Agreement, to permit the payments owing under
such Interest Rate Protection Agreement to be liquidated or any "Event
of Default" (as defined in the Existing Credit Agreement) shall occur
and be continuing; or
(c) Any representation, warranty or certification made or deemed made
herein or in any other Loan Document (or in any modification or supplement
hereto or thereto) by any Obligor, or any certificate furnished to any
Lender or the Agent pursuant to the provisions hereof or thereof, shall
prove to have been false or misleading as of the time made or furnished in
any material respect; or
(d) The Company shall default in the performance of any of its
obligations under any of Sections 8.01(g), 8.05, 8.06, 8.07, 8.08, 8.09,
8.10, 8.11, 8.12, 8.13, 8.14, 8.15, 8.16, 8.17, 8.19, 8.21 or 8.22 hereof;
or the Company shall default in the performance of any of its other
obligations in this Agreement and such default shall continue unremedied
for a period of 30 or more days after notice thereof to the Company by the
Agent or any Lender (through the Agent); or
(e) The Company shall default in the performance of any of its
obligations under Section 4.02 of the Security Agreement; any Obligor party
to the Existing Subsidiary Guarantee and Security Agreement or any
Supplemental Subsidiary Guarantee and Security Agreement shall default in
the performance of any of its obligations under Section 2 or 5.02 thereof;
or any Obligor shall default in the performance of any of its other
obligations in any Loan Document (other than this Agreement) to which it is
party and such default shall continue unremedied for a period of 30 or more
days after notice thereof to the Company by the Agent or any Lender
(through the Agent); or
(f) The Company or any of its Subsidiaries shall admit in writing its
inability to, or be generally unable to, pay its debts as such debts become
due; or
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(g) The Company or any of its Subsidiaries shall (i) apply for or
consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee, examiner or liquidator of itself or of all or a
substantial part of its Property, (ii) make a general assignment for the
benefit of its creditors, (iii) commence a voluntary case under the
Bankruptcy Code, (iv) file a petition seeking to take advantage of any
other law relating to bankruptcy, insolvency, reorganization, liquidation,
dissolution, arrangement or winding-up, or composition or readjustment of
debts, (v) fail to controvert in a timely and appropriate manner, or
acquiesce in writing to, any petition filed against it in an involuntary
case under the Bankruptcy Code (or such similar laws) or (vi) take any
corporate action for the purpose of effecting any of the foregoing; or
(h) A proceeding or case shall be commenced, without the application
or consent of the Company or the relevant Subsidiary affected thereby, in
any court of competent jurisdiction, seeking (i) its reorganization,
liquidation, dissolution, arrangement or winding-up, or the composition or
readjustment of its debts, (ii) the appointment of a receiver, custodian,
trustee, examiner, liquidator or the like of the Company or such
Subsidiary, as the case may be, or of all or any substantial part of its
Property, or (iii) similar relief in respect of such Company or such
Subsidiary, as the case may be, under any law relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or adjustment of
debts, and such proceeding or case shall continue undismissed, or an order,
judgment or decree approving or ordering any of the foregoing shall be
entered and continue unstayed and in effect, for a period of 60 or more
days; or an order for relief against the Company or any of its Subsidiaries
shall be entered in an involuntary case under the Bankruptcy Code; or
(i) A final judgment or judgments for the payment of money in excess
of $500,000 in the aggregate (exclusive of judgment amounts fully bonded or
covered by insurance where
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the surety or the insurer, as the case may be, has admitted liability
in respect of such judgment) shall be rendered by one or more courts,
administrative tribunals or other bodies having jurisdiction against
the Company or any of its Subsidiaries and the same shall not be
discharged (or provision shall not be made for such discharge), or a
stay of execution thereof shall not be procured, within 30 days from
the date of entry thereof and the Company or any such Subsidiary,
as the case may be, shall not, within said period of 30 days, or such
longer period during which execution of the same shall have been stayed,
appeal therefrom and cause the execution thereof to be stayed during such
appeal; or
(j) An event or condition specified in Section 8.01(e) hereof shall
occur or exist with respect to any Plan or Multiemployer Plan and, as a
result of such event or condition, together with all other such events or
conditions, the Company or any ERISA Affiliate shall incur or shall be
reasonably likely to incur a liability to a Plan, a Multiemployer Plan or
PBGC (or any combination of the foregoing) that, in the determination of
the Majority Lenders, would (either individually or in the aggregate) have
a Material Adverse Effect; or
(k) A reasonable basis shall exist for the assertion against the
Company or any of its Subsidiaries, or any predecessor in interest of the
Company or any of its Subsidiaries, of (or there shall have been asserted
against the Company or any of its Subsidiaries) an Environmental Claim
that, in the judgment of the Majority Lenders, is reasonably likely to be
determined adversely to the Company 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 Company 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
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(l) ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇") shall at any time cease to own
beneficially at least 75% of that number of shares of common stock of the
Company held by him as of June 1, 1996 (as adjusted to take into account
any subsequent stock split, stock dividend or other form of
recapitalization); or any of the Subsidiaries of the Company shall cease to
be a Wholly Owned Subsidiary of the Company; or during any period of 25
consecutive calendar months, a majority of the Board of Directors of the
Company shall no longer be composed of individuals (i) who were members of
said Board on the first day of such period, (ii) whose election or
nomination to said Board was approved by individuals referred to in clause
(i) above constituting at the time of such election or nomination at least
a majority of said Board or (iii) whose election or nomination to said
Board was approved by individuals referred to in clauses (i) and (ii) above
constituting at the time of such election or nomination at least a majority
of said Board; or any Person or group of Persons acting in concert, other
than Engles or any other shareholder of the Company as of the date hereof,
shall at any time own or control, directly or indirectly, 30% or more of
such voting capital stock; or
(m) The Liens created by the Security Documents shall at any time not
constitute a valid and perfected Lien on any material portion of the
collateral intended to be covered thereby (to the extent perfection by
filing, registration, recordation or possession is required herein or
therein) in favor of the Agent, free and clear of all other Liens (other
than Liens permitted under Section 8.06 hereof or under the respective
Security Documents), or, except for expiration in accordance with its
terms, any of the Security Documents shall for whatever reason be
terminated or cease to be in full force and effect, or the enforceability
thereof shall be contested by any Obligor.
THEREUPON: (1) in the case of an Event of Default other than one referred to in
clause (g) or (h) of this Section 9 with respect to any Obligor, the Agent may
(and, if requested by the Majority Lenders shall), by notice to the Company,
terminate the Facility
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C Commitments and/or declare the principal amount then outstanding of, and
the accrued interest on, the Facility C Loans and all other amounts payable
by the Obligors hereunder, under the other Loan Documents and under the
Facility C Notes (including, without limitation, any amounts payable under
Section 5.05 or 5.08 hereof) to be forthwith due and payable, whereupon such
amounts shall be immediately due and payable without presentment, demand,
protest or other formalities of any kind, all of which are hereby expressly
waived by each Obligor; and (2) in the case of the occurrence of an Event of
Default referred to in clause (g) or (h) of this Section 9 with respect to
any Obligor, the Facility C Commitments shall automatically be terminated and
the principal amount then outstanding of, and the accrued interest on, the
Facility C Loans and all other amounts payable by the Company hereunder and
under the Facility C Notes (including, without limitation, any amounts
payable under Section 5.05 or 5.08 hereof) shall automatically become
immediately due and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by each
Obligor.
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Section 10. THE AGENT.
10.01 APPOINTMENT, ▇▇▇▇▇▇ AND IMMUNITIES. Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent hereunder and
under the other Loan Documents with such powers as are specifically delegated to
the Agent by the terms of this Agreement and of the other Loan Documents,
together with such other powers as are reasonably incidental thereto. The Agent
(which term as used in this sentence and in Section 10.05 and the first sentence
of Section 10.06 hereof shall include reference to its affiliates and its own
and its affiliates' officers, directors, employees and agents): (a) shall have
no duties or responsibilities except those expressly set forth in this Agreement
and in the other Loan Documents, and shall not by reason of this Agreement or
any other Loan Document be a trustee for any Lender; (b) shall not be
responsible to the Lenders for any recitals, statements, representations or
warranties contained in this Agreement or in any other Loan Document, or in any
certificate or other document referred to or provided for in, or received by any
of them under, this Agreement or any other Loan Document, or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement, any Facility C Note or any other Loan Document or any other document
referred to or provided for herein or therein or for any failure by the Company
or any other Person to perform any of its obligations hereunder or thereunder;
(c) shall not be required to initiate or conduct any litigation or collection
proceedings hereunder or under any other Loan Document; and (d) shall not be
responsible for any action taken or omitted to be taken by it hereunder or under
any other Loan Document or under any other document or instrument referred to or
provided for herein or therein or in connection herewith or therewith, except
for its own gross negligence or willful misconduct. The Agent may employ agents
and attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it in good faith.
The Agent may deem and treat the payee of any Facility C Note as the holder
thereof for all purposes hereof unless and until a notice of the assignment or
transfer thereof shall have been filed with the Agent.
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10.02 RELIANCE BY AGENT. The Agent shall be entitled to rely upon
any certification, notice or other communication (including, without limitation,
any thereof by telephone, telecopy, telex, telegram or cable) believed by it to
be genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Agent. As to any
matters not expressly provided for by this Agreement or any other Loan Document,
the Agent shall in all cases be fully protected in acting, or in refraining from
acting, hereunder or thereunder in accordance with instructions given by the
Majority Lenders or, if provided herein, in accordance with the instructions
given by all of the Lenders as is required in such circumstance, and such
instructions of such Lenders and any action taken or failure to act pursuant
thereto shall be binding on all of the Lenders.
10.03 DEFAULTS. The Agent shall not be deemed to have knowledge or
notice of the occurrence of a Default unless the Agent has received notice from
a Lender or any Obligor specifying such Default and stating that such notice is
a "Notice of Default". In the event that the Agent receives such a notice of
the occurrence of a Default, the Agent shall give prompt notice thereof to the
Lenders. The Agent shall (subject to Section 10.07 hereof) take such action
with respect to such Default as shall be directed by the Majority Lenders,
PROVIDED that, unless and until the Agent shall have received such directions,
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default as it shall deem advisable in
the best interest of the Lenders except to the extent that this Agreement
expressly requires that such action be taken, or not be taken, only with the
consent or upon the authorization of the Majority Lenders, or all of the
Lenders.
10.04 RIGHTS AS A LENDER. With respect to its Facility C Commitment
and the Facility C Loans made by it, First Union (and any successor acting as
Agent) in its capacity as a Lender hereunder shall have the same rights and
powers hereunder as any other Lender and may exercise the same as though it were
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not acting as the Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Agent in its individual capacity.
First Union (and any successor acting as Agent) and its affiliates may (without
having to account therefor to any Lender) accept deposits from, lend money to,
make investments in and generally engage in any kind of banking, trust or other
business with the Obligors (and any of their Subsidiaries or Affiliates) as if
it were not acting as the Agent, and First Union and its affiliates may accept
fees and other consideration from the Obligors for services in connection with
this Agreement or otherwise without having to account for the same to the
Lenders.
10.05 INDEMNIFICATION. The Lenders agree to indemnify the Agent
(to the extent not reimbursed under Section 11.03 hereof, but without
limiting the obligations of the Company under said Section 11.03, and
including in any event any payments under any indemnity that the Agent is
required to issue to any bank referred to in Section 4.02 of the Security
Agreement and Section 5.02 of each Supplemental Subsidiary Guarantee and
Security Agreement to which remittances in respect of Accounts, as defined in
each such agreement, are to be made) ratably in accordance with the aggregate
principal amount of the Facility C Loans held by the Lenders (or, if no
Facility C Loans are at the time outstanding, ratably in accordance with
their respective Facility C Commitments), for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever that may be
imposed on, incurred by or asserted against the Agent (including by any
Lender) arising out of or by reason of any investigation in or in any way
relating to or arising out of this Agreement or any other Loan Document or
any other documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby (including, without limitation,
the costs and expenses that the Company is obligated to pay under Section
11.03 hereof, and including also any payments under any indemnity that the
Agent is required to issue to any bank referred to in Section 4.02 of the
Security Agreement and Section 5.02 of each Supplemental Subsidiary Guarantee
and Security Agreement to which remittances in respect of Accounts, as
defined in each such
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agreement, are to be made, but excluding, unless a Default has occurred and
is continuing, normal administrative costs and expenses incident to the
performance of its agency duties hereunder) or the enforcement of any of the
terms hereof or thereof or of any such other documents, PROVIDED that no
Lender shall be liable for any of the foregoing to the extent they arise from
the gross negligence or willful misconduct of the party to be indemnified.
10.06 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender agrees
that it has, independently and without reliance on the Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Company and its Subsidiaries
and decision to enter into this Agreement and that it will, independently and
without reliance upon the 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 analysis and decisions in taking or not taking action under this Agreement
or under any other Loan Document. The Agent shall not be required to keep
itself informed as to the performance or observance by any Obligor of this
Agreement or any of the other Loan Documents or any other document referred to
or provided for herein or therein or to inspect the Properties or books of the
Company or any of its Subsidiaries. Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
the Agent hereunder or under the Security Documents, the Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition or business of the
Company or any of its Subsidiaries (or any of their affiliates) that may come
into the possession of the Agent or any of its affiliates.
10.07 FAILURE TO ACT. Except for action expressly required of the
Agent hereunder and under the other Loan Documents, the Agent shall in all cases
be fully justified in failing or refusing to act hereunder and thereunder unless
it shall receive further assurances to its satisfaction from the Lenders of
their indemnification obligations under Section 10.05
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hereof against any and all liability and expense that may be incurred by it
by reason of taking or continuing to take any such action.
10.08 RESIGNATION OR REMOVAL OF AGENT. Subject to the appointment
and acceptance of a successor Agent as provided below, the Agent may resign at
any time by giving notice thereof to the Lenders and the Company, and the Agent
may be removed at any time with or without cause by the Majority ▇▇▇▇▇▇▇. Upon
any such resignation or removal, the Majority Lenders shall have the right to
appoint a successor Agent with the prior consent of the Company (which consent
shall not be unreasonably withheld); PROVIDED, that no such consent of the
Company shall be required if an Event of Default has occurred and is continuing
and the Facility C Commitments have been terminated and/or the Facility C Loans
and other amounts payable by the Company hereunder have been declared to be
forthwith due and payable. If no successor Agent shall have been so appointed
by the Majority Lenders and shall have accepted such appointment within 30 days
after the retiring Agent's giving of notice of resignation or the Majority
Lenders' removal of the retiring Agent, then the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent, that shall be a bank with a combined
capital and surplus of at least $500,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Section 10
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent.
10.09 AGENCY FEE. So long as the Facility C Commitments are in
effect and until payment in full of the principal of and interest on the
Facility C Loans and all other amounts payable by the Company hereunder, the
Company will pay to the Agent an agency fee in the amount agreed in writing
between the Company and the Agent, payable quarterly in arrears
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commencing on September 30, 1996 and on the last day of each calendar quarter
thereafter; PROVIDED that if the Facility C Commitments shall have been
terminated prior to such date, the agency fee shall be payable on the date of
such termination. Such fee, once paid, shall be non-refundable.
10.10 CONSENTS UNDER OTHER LOAN DOCUMENTS. Except as otherwise
provided in Section 11.04 hereof with respect to this Agreement, the Agent may,
with the prior consent of the Majority Lenders (but not otherwise), consent to
any modification, supplement or waiver under any of the Loan Documents, PROVIDED
that, without the prior consent of each Lender, the Agent shall not (except as
provided herein or in the Security Documents) release any guarantee or
collateral or otherwise terminate any Lien under any Loan Document providing for
collateral security, or agree to additional obligations being secured by such
collateral security, except that no such consent shall be required, and the
Agent is hereby authorized, to release any Lien covering Property that is the
subject of a disposition of Property permitted hereunder or to which the
Majority Lenders have consented or to release any guarantee of any Obligor that
is the subject of a disposition to which the Majority Lenders have consented.
10.11 SYNDICATION AGENT. The Syndication Agent named on the cover
page of this Agreement shall have no duties, obligations or responsibilities
hereunder except in its capacity as Lender.
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Section 11. MISCELLANEOUS.
11.01 WAIVER. No failure on the part of the Agent or any Lender to
exercise and no delay in exercising, and no course of dealing with respect to,
any right, power or privilege under this Agreement or any Facility C Note shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under this Agreement or any Facility C Note preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. The remedies provided herein are cumulative and not exclusive of
any remedies provided by law.
11.02 NOTICES. All notices, requests and other communications
provided for herein and under the Security Documents (including, without
limitation, any modifications of, or waivers, requests or consents under, this
Agreement) shall be given or made in writing (including, without limitation, by
telex or telecopy) delivered to the intended recipient at the "Address for
Notices" specified below its name on the signature pages hereof; or, as to any
party, at such other address as shall be designated by such party in a notice to
each other party. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted by telex
or telecopier or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
11.03 EXPENSES, ETC. The Company agrees to pay or reimburse each of
the Lenders and the Agent for: (a) all reasonable out-of-pocket costs and
expenses of the Agent (including, without limitation, the reasonable fees and
expenses of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, special New York counsel to First
Union, and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, special Puerto Rico counsel to First
Union) in connection with (i) the negotiation, preparation, execution and
delivery of this Agreement and the other Loan Documents and the extensions of
credit hereunder and (ii) the negotiation or preparation of any modification,
supplement or waiver of any of the terms of this Agreement or any of the other
Loan Documents (whether or not
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consummated); (b) all reasonable out-of-pocket costs or allocated costs and
expenses of the Lenders and the Agent (including, without limitation, the
reasonable fees, allocated costs and expenses of legal counsel, which may be
employees of the Lenders or the Agent) in connection with (i) any Default and
any enforcement or collection proceedings resulting therefrom, including,
without limitation, all manner of participation in or other involvement with
(x) bankruptcy, insolvency, receivership, foreclosure, winding up or
liquidation proceedings, (y) judicial or regulatory proceedings and (z)
workout, restructuring or other negotiations or proceedings (whether or not
the workout, restructuring or transaction contemplated thereby is
consummated) and (ii) the enforcement of this Section 11.03; (c) all
transfer, stamp, documentary or other similar taxes, assessments or charges
levied by any governmental or revenue authority in respect of this Agreement
or any of the other Loan Documents or any other document referred to herein
or therein and all costs, expenses, taxes, assessments and other charges
incurred in connection with any filing, registration, recording or perfection
of any security interest contemplated by any Loan Document or any other
document referred to therein; and (d) all costs, expenses and other charges
in respect of title insurance procured with respect to the Liens created
pursuant to any Mortgages securing, directly or indirectly, the Facility C
Loans.
The Company hereby agrees to indemnify the Agent and each Lender and
their respective directors, officers, employees, attorneys and agents from, and
hold each of them harmless against, any and all losses, liabilities, claims,
damages or expenses incurred by any of them (including, without limitation, any
and all losses, liabilities, claims, damages or expenses incurred by the Agent
to any Lender, whether or not the Agent or any Lender is a party thereto)
arising out of or by reason of any investigation or litigation or other
proceedings (including any threatened investigation or litigation or other
proceedings) relating to the extensions of credit hereunder or any actual or
proposed use by the Company or any of its Subsidiaries of the proceeds of any of
the extensions of credit hereunder, including, without limitation, the
reasonable fees and disbursements of counsel incurred in connection with any
such investigation or
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litigation or other proceedings (but excluding any such losses, liabilities,
claims, damages or expenses incurred by reason of the gross negligence or
willful misconduct of the Person to be indemnified). Without limiting the
generality of the foregoing, the Company will (x) indemnify the Agent for any
payments that the Agent is required to make under any indemnity issued to any
bank referred to in Section 4.02 of the Security Agreement and Section 5.02
of each Supplemental Subsidiary Guarantee and Security Agreement to which
remittances in respect to Accounts, as defined in each such agreement, are to
be made and (y) indemnify the Agent and each Lender from, and hold the Agent
and each Lender harmless against, any losses, liabilities, claims, damages or
expenses described in the preceding sentence (including any Lien filed
against all or any part of the Property covered by any Mortgages (securing,
directly or indirectly, the Facility C Loans) in favor of any governmental
entity, but excluding, as provided in the preceding sentence, any loss,
liability, claim, damage or expense incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified) arising
under any Environmental Law as a result of the past, present or future
operations of the Company or any of its Subsidiaries (or any predecessor in
interest to the Company or any of its Subsidiaries), or the past, present or
future condition of any site or facility owned, operated or leased at any
time by the Company or any of its Subsidiaries (or any such predecessor in
interest), or any Release or threatened Release of any Hazardous Materials at
or from any such site or facility, including any such Release or threatened
Release that shall occur during any period prior to the termination of the
Facility C Commitments and the payment in full of the Facility C Loans and
other amounts owing hereunder and under the other Loan Documents when the
Agent or any Lender shall be in possession of any such site or facility
following the exercise by the Agent or any Lender of any of its rights and
remedies hereunder or under any of the Security Documents to the extent such
Release results from a continuation of conditions previously in existence at,
or practices theretofore employed in connection with the operation of, such
site or facility.
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11.04 AMENDMENTS, ETC. Except as otherwise expressly provided in
this Agreement, any provision of this Agreement may be modified or supplemented
only by an instrument in writing signed by the Company, the Agent and the
Majority Lenders, or by the Company and the Agent acting with the consent of the
Majority Lenders, and any provision of this Agreement may be waived by the
Majority Lenders or by the Agent acting with the consent of the Majority
Lenders; PROVIDED that: (a) no modification, supplement or waiver shall, unless
by an instrument signed by all of the Lenders or by the Agent acting with the
consent of all of the Lenders: (i) increase, or extend the term of any of the
Facility C Commitments, or extend the time or waive any requirement for the
reduction or termination of any of the Facility C Commitments, (ii) extend the
date fixed for the payment of principal of or interest on any Facility C Loan or
any fee hereunder, (iii) reduce the amount of any such payment of principal,
(iv) reduce the rate at which interest is payable thereon or any fee is payable
hereunder, (v) alter the rights or obligations of the Company to prepay Facility
C Loans, (vi) alter the terms of this Section 11.04, (vii) modify the definition
of the term "Majority Lenders", or modify in any other manner the number or
percentage of the Lenders required to make any determinations or waive any
rights hereunder or to modify any provision hereof, or modify Section
11.06(b)(iii) hereof, (viii) release any Subsidiary Guarantor from any of its
guarantee obligations under the Existing Subsidiary Guarantee and Security
Agreement or any Supplemental Subsidiary Guarantee and Security Agreement or
release (or terminate any Lien on) all or substantially all of the Collateral
except as provided in the Security Documents with respect to such Collateral in
any of the Security Documents or (ix) waive any of the conditions precedent set
forth in Section 6.01 or 6.02 hereof; and (b) any modification of any of the
rights or obligations of the Agent shall require the consent of the Agent.
11.05 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
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11.06 ASSIGNMENTS AND PARTICIPATIONS.
(a) The Company may not assign any of its rights or obligations
hereunder or under the Facility C Notes without the prior consent of all of the
Lenders and the Agent.
(b) Each Lender may assign any of its Facility C Loans, its Facility
C Note and its Facility C Commitment with the consent of the Agent (which
consent shall not be unreasonably withheld) pursuant to an Assignment and
Acceptance substantially in the form of Exhibit E hereto; PROVIDED that:
(i) no such consent by the Agent shall be required in the case
of any assignment to another Lender;
(ii) each assignment by a Lender of its Facility C Loans,
Facility C Note or Facility C Commitment shall be made in such a manner so
that the same portion of such Facility C Loans, Facility C Note and
Facility C Commitment is assigned to the respective assignee;
(iii) each assignment by any Facility C Lender, Facility A
Lender or Facility B Lender of any of its Facility C Loans, Facility A
Loans or Facility B Loans respectively (and related Facility C Note,
Facility A Note and Facility B Note and related Facility C Commitment,
Facility A Commitment and Facility B Commitment) shall be made in such a
manner so that the same portion of its Facility C Loans, Facility A Loans
and Facility B Loans to the Company (and related Facility C Note, Facility
A Note and Facility B Note and related Facility C Commitment, Facility A
Commitment and Facility B Commitment) is assigned to the respective
assignee; and
(iv) any such assignment of less than all of such ▇▇▇▇▇▇'s
interests in the Facility A Loans, Facility B Loans and Facility C Loans,
Facility A Notes, Facility B Notes and Facility C Notes, and Facility A
Commitments, Facility B Commitments and Facility C Commitments, as the case
may be,
- 131 -
shall be in an aggregate amount at least equal to $10,000,000.
Upon execution and delivery by the assignor and assignee to the Agent of such
Assignment and Acceptance, and upon consent thereto by the Agent to the extent
required above, the assignee shall have, to the extent of such assignment, the
obligations, rights and benefits of a Lender hereunder holding the Facility C
Commitment and Facility C Loans (or portions thereof) assigned to it as
specified in such Assignment and Acceptance (in addition to the Facility C
Commitment and Facility C Loans theretofore held by such assignee) and the
assigning Lender shall, to the extent of such assignment, be released from the
Facility C Commitment (or portion thereof) so assigned. Upon each such
assignment the assigning ▇▇▇▇▇▇ shall pay the Agent an assignment fee of $3,000.
(c) A Lender may sell or agree to sell to one or more other Persons a
participation in all or any part of any Facility C Loans held by it, or in its
Facility C Commitment, in which event each purchaser of a participation (a
"PARTICIPANT") shall be entitled to the rights and benefits of the provisions of
Section 8.01(j) hereof with respect to its participation in such Facility C
Loans and Facility C Commitment as if (and the Company shall be directly
obligated to such Participant under such provisions as if) such Participant were
a "Lender" for purposes of said Section, but, except as otherwise provided in
Section 4.07(c) hereof, shall not have any other rights or benefits under this
Agreement or any Facility C Note or any other Loan Document (the Participant's
rights against such Lender in respect of such participation to be those set
forth in the agreements executed by such Lender in favor of the Participant).
All amounts payable by the Company to any Lender under Section 5 hereof in
respect of Facility C Loans held by it, and its Facility C Commitment, shall be
determined as if such Lender had not sold or agreed to sell any participations
in such Facility C Loans and Facility C Commitment, and as if such Lender were
funding each of such Facility C Loans and Facility C Commitment in the same way
that it is funding the portion of such Facility C Loans and Facility C
Commitment in which no participations have been sold. In no event shall a
Lender that sells a participation
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agree with the Participant to take or refrain from taking any action
hereunder or under any other Loan Document except that such Lender may agree
with the Participant that it will not, without the consent of the
Participant, agree to (i) increase or extend the term, or extend the time or
waive any requirement for the reduction or termination, of such Lender's
related Facility C Commitment, (ii) extend the date fixed for the payment of
principal of or interest on the related Facility C Loan or Facility C Loans
or any portion of any fee hereunder payable to the Participant, (iii) reduce
the amount of any such payment of principal, (iv) reduce the rate at which
interest is payable thereon, or any fee hereunder payable to the Participant,
to a level below the rate at which the Participant is entitled to receive
such interest or fee, (v) alter the rights or obligations of the Company to
prepay the related Facility C Loans, (vi) consent to any modification,
supplement or waiver hereof or of any of the other Loan Documents to the
extent that the same, under Section 10.10 or 11.04 hereof, requires the
consent of each Lender or (vii) release any Subsidiary Guarantor from any of
its guarantee obligations under the Guarantee Agreement or any Supplemental
Subsidiary Guarantee and Security Agreement or release (or terminate any Lien
on) all or substantially all of the collateral directly or indirectly
securing the Facility C Loans except as provided in the Security Documents
with respect to such collateral in any of the Security Documents.
(d) In addition to the assignments and participations permitted under
the foregoing provisions of this Section 11.06, any Lender may (without notice
to the Company, the Agent or any other Lender and without payment of any fee)
(i) assign and pledge all or any portion of its Facility C Loans and its
Facility C Note to any Federal Reserve Bank as collateral security pursuant to
Regulation A and any Operating Circular issued by such Federal Reserve Bank and
(ii) assign all or any portion of its rights under this Agreement and its
Facility C Loans and its Facility C Note to an affiliate. No such assignment
shall release the assigning Lender from its obligations hereunder.
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(e) A Lender may furnish any information concerning the Company or
any of its Subsidiaries in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject, however, to the provisions of Section 11.12(b) hereof.
(f) Anything in this Section 11.06 to the contrary notwithstanding,
no Lender may assign or participate any interest in any Facility C Loan held by
it hereunder to the Company or any of its Subsidiaries or Affiliates without the
prior consent of each Lender.
11.07 SURVIVAL. The obligations of the Company under Sections 5.01,
5.05, 5.06, 5.08 and 11.03 hereof, and the obligations of the Lenders under
Section 10.05 hereof, shall survive the repayment of the Facility C Loans and
the termination of the Facility C Commitments. In addition, each representation
and warranty made, or deemed to be made by a notice of any extension of credit
(whether by means of a Facility C Loan), herein or pursuant hereto shall survive
the making of such representation and warranty, and no Lender shall be deemed to
have waived, by reason of making any extension of credit hereunder (whether by
means of a Facility C Loan), any Default that may arise by reason of such
representation or warranty proving to have been false or misleading,
notwithstanding that such Lender or the Agent may have had notice or knowledge
or reason to believe that such representation or warranty was false or
misleading at the time such extension of credit was made.
11.08 CAPTIONS. The table of contents and captions and section
headings appearing herein are included solely for convenience of reference and
are not intended to affect the interpretation of any provision of this
Agreement.
11.09 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
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11.10 GOVERNING LAW; SUBMISSION TO JURISDICTION; SERVICE OF PROCESS
AND VENUE.
(a) This Agreement and the Facility C Notes shall be governed by, and
construed in accordance with, the law of the State of New York.
(b) The Company hereby agrees that any suit, action or proceeding
with respect to this Agreement, any Facility C Note or any other Loan Document
to which it is a party or any judgment entered by any court in respect thereof
may be brought in the United States District Court for the Southern District of
New York, in the Supreme Court of the State of New York sitting in New York
County (including its Appellate Division), or in any other appellate court in
the State of New York, as the party commencing such suit, action or proceeding
may elect in its sole discretion; and each party hereto hereby irrevocably
submits to the non-exclusive jurisdiction of such court for the purpose of any
such suit, action, proceeding or judgment. Each party hereto further submits,
for the purpose of any such suit, action, proceeding or judgment brought or
rendered against it, to the appropriate courts of the jurisdiction of its
domicile.
(c) The Company hereby agrees that service of all writs, process and
summonses in any suit, action or proceeding brought hereunder or under any of
the other Loan Documents to which the Company is a party may be made upon The
Prentice Hall Corporation System, Inc. presently located at ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇. (the "PROCESS AGENT"), and the Company hereby
confirms and agrees that the Process Agent has been duly and irrevocably
appointed as its agent and true and lawful attorney in fact in its name, place
and stead to accept such service of any and all such writs, process and
summonses, and agrees that the failure of the Process Agent to give any notice
of any such service of process to the Company shall not impair or affect the
validity of such service or of any judgment based thereon. Without limiting the
foregoing, the Company hereby irrevocably consents to the service of process in
any suit, action or proceeding in such courts by the mailing thereof by the
Agent or any Lender by registered or certified mail,
- 135 -
postage prepaid, at its address set forth beneath its signature hereto.
Nothing herein shall in any way be deemed to limit the ability of the Agent
or any Lender to serve any such writs, process or summonses in any other
manner permitted by applicable law or to obtain jurisdiction over the Company
in such other jurisdictions, and in such manner, as may be permitted by
applicable law.
(d) The Company hereby irrevocably waives any objection that it may
now or hereafter have to the laying of the venue of any suit, action or
proceeding arising out of or relating to this Agreement, the Facility C Notes or
the other Loan Documents brought in any such court and hereby further
irrevocably waives any claim that any such suit, action or proceeding brought in
any such court has been brought in an inconvenient forum.
11.11 WAIVER OF JURY TRIAL. EACH OF THE COMPANY, THE AGENT AND THE
LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
11.12 TREATMENT OF CERTAIN INFORMATION; CONFIDENTIALITY.
(a) The Company acknowledges that from time to time financial
advisory, investment banking and other services may be offered or provided to
the Company or one or more of its Subsidiaries (in connection with this
Agreement or otherwise) by any Lender or by one or more subsidiaries or
affiliates of such Lender and the Company hereby authorizes each Lender to share
any information delivered to such Lender by the Company and its Subsidiaries
pursuant to this Agreement, or in connection with the decision of such Lender to
enter into this Agreement, to any such subsidiary or affiliate, it being
understood that any such subsidiary or affiliate receiving such information
shall be bound by the provisions of clause (b) below as if it were a Lender
hereunder. Such authorization shall survive the repayment of the
- 136 -
Facility C Loans and the termination of the Facility C Commitments.
(b) Each Lender and the Agent agree (on behalf of itself and each of
its affiliates, directors, officers, employees and representatives) to use
reasonable precautions to keep confidential, in accordance with their customary
procedures for handling confidential information of the same nature and in
accordance with safe and sound banking practices, any non-public information
supplied to it by any Obligor pursuant to this Agreement that is identified by
such Person as being confidential at the time the same is delivered to the
Lenders or the Agent, PROVIDED that nothing herein shall limit the disclosure of
any such information (i) to the extent required by statute, rule, regulation or
judicial process, (ii) to counsel for any of the Lenders or the Agent, (iii) to
any Lender's examiners, auditors or accountants, (iv) to the Agent, the
Syndication Agent named on the cover page of this Agreement or any other Lender,
(v) in connection with any litigation to which any one or more of the Lenders or
the Agent is a party, (vi) to a subsidiary or affiliate of such Lender as
provided in clause (a) above or (vii) to any assignee or participant (or
prospective assignee or participant) so long as such assignee or participant (or
prospective assignee or participant) first executes and delivers to the
respective Lender a Confidentiality Agreement substantially in the form of
Exhibit H hereto; PROVIDED, further, that in no event shall any Lender or the
Agent be obligated or required to return any materials furnished by any Obligor.
The obligations of any assignee that has executed a Confidentiality Agreement in
the form of Exhibit H hereto shall be superseded by this Section 11.12 upon the
date upon which such assignee becomes a Lender hereunder pursuant to
Section 11.06 hereof.
11.13 INTENTION OF PARTIES. Notwithstanding anything contained
herein to the contrary, it is the intention of the parties hereto that this
Agreement and the Facility C Commitments and extensions of credit provided
hereunder represent a supplement to, but not a novation or discharge of, the
credit facilities provided by the Existing Credit Agreement.
- 137 -
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Credit Agreement to be duly executed and delivered as of the day and year first
above written.
COMPANY
SUIZA FOODS CORPORATION
By_________________________
Title:
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
- 138 -
LENDERS
FACILITY C COMMITMENT FIRST UNION NATIONAL BANK OF
$16,200,000 NORTH CAROLINA
By_________________________
Title:
Lending Office for Base Rate Loans and
Eurodollar Loans:
First Union National Bank of
North Carolina
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Address for Notices:
First Union National Bank of
North Carolina
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Sana Alkoor - Suiza
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
- 139 -
FACILITY C COMMITMENT THE FIRST NATIONAL BANK OF CHICAGO
$16,200,000
By_________________________
Title:
Lending Office for Base Rate Loans and
Eurodollar Loans:
The First National Bank of Chicago
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Address for Notices:
The First National Bank of Chicago
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: April Yebd
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
- 140 -
FACILITY C COMMITMENT ▇▇▇▇▇▇ TRUST AND SAVINGS BANK
$9,000,000
By_________________________
Title:
Lending Office for Base Rate Loans and
Eurodollar Loans:
▇▇▇▇▇▇ Trust and Savings Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Address for Notices:
▇▇▇▇▇▇ Trust and Savings Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇/▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇/7664
- 141 -
FACILITY C COMMITMENT THE BANK OF NOVA SCOTIA
$10,800,000
By_________________________
Title:
Lending Office for Base Rate Loans and
Eurodollar Loans:
The Bank of Nova Scotia
Atlanta Agency
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
The Bank of Nova Scotia
Atlanta Agency
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ N.E.
Suite 2700
Atlanta, Georgia 30308
Attention: F.C.H. ▇▇▇▇▇
Senior Assistant Agent
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
The Bank of Nova Scotia
Houston Representative Office
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
- 142 -
Houston, Texas 77002
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Relationship Manager
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
- 143 -
FACILITY C COMMITMENT BANCO POPULAR DE PUERTO RICO
$7,200,000
By_________________________
Title:
Lending Office for Base Rate Loans and
Eurodollar Loans:
Banco Popular de Puerto Rico
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Address for Notices:
Banco Popular de Puerto Rico
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
- 144 -
FACILITY C COMMITMENT BANK OF AMERICA ILLINOIS
$5,400,000
By_________________________
Title:
Lending Office for Base Rate Loans and
Eurodollar Loans:
Bank of America Illinois
▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
Bank of America Illinois
▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
- 145 -
FACILITY C COMMITMENT BANQUE PARIBAS
$5,400,000
By_________________________
Title:
By_________________________
Title:
Lending Office for Base Rate Loans and
Eurodollar Loans:
Banque Paribas
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
Banque Paribas
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
- 146 -
FACILITY C COMMITMENT CAISSE NATIONALE DE CREDIT AGRICOLE
$5,400,000
By_________________________
Title:
Lending Office for Base Rate Loans and
Eurodollar Loans:
Caisse Nationale de Credit Agricole
▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Address for Notices:
Caisse Nationale de Credit Agricole
▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
- 147 -
FACILITY C COMMITMENT THE FUJI BANK, LIMITED,
$9,000,000 HOUSTON AGENCY
By_________________________
Title:
Lending Office for Base Rate Loans and
Eurodollar Loans:
The Fuji Bank, Limited,
Houston Agency
One Houston Center
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Notices:
The Fuji Bank, Limited,
Houston Agency
One Houston Center
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇
Vice President and Joint
Manager or
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President
(▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
- 148 -
FACILITY C COMMITMENT THE LONG-TERM CREDIT BANK OF JAPAN,
$5,400,000 LIMITED, NEW YORK BRANCH
By_________________________
Title:
Lending Office for Base Rate Loans and
Eurodollar Loans:
The Long-Term Credit Bank of Japan,
Limited, New York Branch
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Address for Notices:
The Long-Term Credit Bank of Japan,
Limited, New York Branch
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AGENT
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA,
as Agent
By_________________________
Title:
Address for Notices to
the Agent:
First Union National Bank of
North Carolina
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Attention: Syndication Agency Services
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