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EXHIBIT 10.2
CONSENT AND WAIVER
[Southern California Dairy Venture]
CONSENT AND WAIVER (this "Consent and Waiver"), dated as of July 23,
1999, relating to the Amended and Restated Credit Agreement, dated as of May 22,
1998 (as amended, supplemented or otherwise modified and in effect on the date
hereof, the "Credit Agreement"), between Suiza Foods Corporation, a Delaware
corporation (the "Company"), the lenders party thereto (the "Lenders") and First
Union National Bank, as administrative agent for the Lenders (in such capacity,
the "Agent").
WHEREAS, Swiss Dairy Corporation, a Delaware corporation (hereinafter
referred to as "Swiss Dairy"), is a Wholly Owned Subsidiary of the Company and
party to the Subsidiary Guarantee and Security Agreement (as defined in the
Credit Agreement);
WHEREAS, Adohr Farms, LLC, a limited liability company (hereinafter
referred to as "Adohr") is owned directly or indirectly by Dairy Farmers of
America, Inc., a Kansas cooperative marketing association ("DFA"), Mid-Am
Capital, LLC ("Mid-Am"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇") and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
("▇▇▇▇▇▇");
WHEREAS, the Company, DFA, Mid-Am, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ desire to enter
into a series of transactions pursuant to which: (i) Adohr will transfer certain
of its assets (subject to certain debt owing to Mid-Am) relating to its "fluid
dairy" business to Suiza SoCal, LLC, a Delaware limited liability company (the
"California Venture"), in exchange for equity interests in the California
Venture which will be transferred by Adohr to DFA, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, and
Adohr will retain its assets relating to its "non-fluid dairy" business; (ii)
the California Venture will purchase the inventory of the "fluid dairy" business
from Adohr; (iii) Mid-Am will contribute certain debt owing to it to the
California Venture in exchange for preferred equity interests in the California
Venture; (iv) Suiza SoCal Holdings, Inc., a Delaware corporation and
Wholly-Owned Subsidiary of the Company ("Suiza Sub"), will contribute Swiss
Dairy to, or Swiss Dairy will transfer all its assets to, or be merged with and
into, the California Venture, such that the California Venture will survive as a
Subsidiary of Suiza Sub and as a result of which Suiza Sub will receive
preferred and common equity interests in the California Venture; and (v) Suiza
Sub and DFA shall purchase from ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ all of their equity
interests in the California Venture (collectively, the "Transaction");
WHEREAS, upon consummation of the Transaction: (i) seventy percent
(70%) or more of each of the common and preferred ownership interests of the
California Venture will be owned and controlled by Suiza Sub; and (ii) the
remaining common and preferred ownership interests of the California Venture
will be owned and controlled by DFA and Mid-Am;
WHEREAS, pursuant to the Transaction, the existing fluid dairy and
bottled water operations of the Company and DFA located in Southern California
will be operated by the California Venture; and
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WHEREAS, certain aspects of the Transaction require the consent of the
Majority Lenders or the waiver by the Majority Lenders of certain provisions of
the Credit Agreement and the Security Documents, in each case in accordance with
the terms thereof.
NOW, THEREFORE, the Majority Lenders hereby agree as follows:
1. Defined Terms. Except as otherwise defined in this Consent and
Waiver, terms defined in the Credit Agreement are used herein as defined
therein.
2. Consent and Waiver of Credit Agreement Provisions. Subject to the
conditions set forth in Section 6 hereto and compliance with the covenants set
forth in Section 7 hereto, notwithstanding Sections 7.15, 8.03, 8.05 and 8.17 of
the Credit Agreement and the other terms and provisions of the Credit Agreement:
(a) the Majority Lenders hereby consent to the consummation of
the Transaction on substantially the terms set forth in the recitals to
this Consent and Waiver;
(b) the Majority Lenders hereby waive the provisions of
Sections 8.03 and 8.05 of the Credit Agreement to the extent
application of such provisions would prohibit the merger of Swiss Dairy
or Adohr with and into the California Venture, the contribution of
ownership interests in, or the transfer of assets of, Swiss Dairy or
Adohr to the California Venture or the issuance of ownership interests
in the California Venture to the Company or ▇▇▇▇▇ ▇▇▇, ▇▇▇, ▇▇▇-▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ or other Persons;
(c) the Majority Lenders hereby waive the provisions of
Section 7.15 of the Credit Agreement to the extent they restrict or
prevent the California Venture from issuing or having outstanding
Equity Rights;
(d) the Majority Lenders hereby waive the provisions of
Sections 8.17(a), (b) and (c) of the Credit Agreement to the extent
such provisions:
(i) would require that the California Venture or any
now-owned or hereafter acquired or formed Subsidiary of the
California Venture be a Wholly Owned Subsidiary;
(ii) would require that the California Venture or any
now-owned or hereafter acquired or formed Subsidiary of the
California Venture become a party, by Joinder Agreement or
otherwise, to the Subsidiary Guarantee and Security Agreement
or any similar agreement; or
(iii) would prohibit or prevent the constituent
documents of the California Venture, or of any now-owned or
hereafter acquired or formed Subsidiary thereof, or any
indenture, agreement, instrument or other arrangement to which
the California Venture or such Subsidiary may be a party, from
prohibiting or restraining or having the effect of prohibiting
or restraining or imposing materially adverse conditions upon
the ability of the California Venture,
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or any such Subsidiary thereof, to incur Indebtedness, grant
Liens, make loans, advances or Investments or sell, assign,
transfer or otherwise dispose of Property;
provided, that the California Venture shall not incur
Indebtedness or grant Liens other than Indebtedness or Liens
in favor of the Company or its Wholly-Owned Subsidiaries or
Indebtedness or Liens of Adohr or Persons or Property acquired
by, or merged into, the California Venture, which Indebtedness
and Liens (x) otherwise satisfy the requirements of Sections
8.06 and 8.07 of the Credit Agreement, as applicable, (y)
existed before such acquisition or merger and were not created
in anticipation thereof and (z) in the case of Liens, were
created solely for the purpose of securing Indebtedness
representing, or incurred to finance, refinance or refund, the
cost of the Property subject thereto (provided that (A) no
such Lien shall extend to or cover any Property of the Company
or any Subsidiary other than the Property so acquired, and (B)
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);
provided, further, that the California Venture shall not make
loans, advances or Investments or sell, assign, transfer or
otherwise dispose of Property except in accordance with
Sections 8.08 or 8.05(c) of the Credit Agreement, as
applicable; and
provided, further, that such constituent documents,
indentures, agreements or other arrangements shall impose no
restrictions on the ability of the California Venture to pay
dividends or make other distributions, other than to give
priority to the payment of any dividends or distributions to
any preferred capital stock or other preferred ownership
interests in the California Venture;
(e) the Majority Lenders hereby acknowledge and agree that the
California Venture and each of its Subsidiaries shall be a Subsidiary
of the Company, but shall not be an Affiliate of the Company, for all
purposes of the Credit Agreement; and
(f) subject to compliance with the other terms of the Credit
Agreement, the Majority Lenders hereby consent to the Company's future
acquisition of all or any portion of the remaining ownership interests
in the California Venture; provided, however, upon the acquisition by
the Company or its Subsidiaries of all the outstanding capital stock,
Equity Rights and other ownership interests of the California Venture,
the California Venture shall execute a Joinder Agreement and thereby
become a party to the Subsidiary Guarantee and Security Agreement.
3. Waiver of Security Agreement Provisions. Notwithstanding Sections 2
and 5.04 of the Security Agreement, the Majority Lenders hereby waive any
violation of the Security Agreement that would occur as a result of: (a) the
Company's or Suiza Sub's ownership of less than all the ownership interests of
the California Venture; or (b) any restrictions on the transfer or encumbrance
of the Company's or Suiza Sub's interest in the California Venture.
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4. Release of Capital Stock of Swiss Dairy. The Agent is hereby
authorized and directed to deliver all stock certificates and related stock
powers with respect to Swiss Dairy to the Company to facilitate the consummation
of the Transaction. Effective upon the merger of Swiss Dairy into the California
Venture or the transfer of substantially all the assets of, or ownership
interests in, Swiss Dairy to the California Venture, (i) the Subsidiary
Guarantee and Security Agreement is hereby terminated as to Swiss Dairy and
Swiss Dairy is hereby released from all obligations thereunder, (ii) the capital
stock of Swiss Dairy is hereby released from the Lien of the Security Agreement
or the Subsidiary Guarantee and Security Agreement, as the case may be, and
(iii) all references to Swiss Dairy in the Credit Agreement and the Security
Documents are hereby deleted.
5. Representations and Warranties of the Company. The Company
represents and warrants to the Agent and the Lenders that (with respect to
matters pertaining to itself and each of its Subsidiaries) as of the date hereof
and as of the date of the consummation of the Transaction:
(a) no Default has occurred and is otherwise continuing under
the Credit Agreement;
(b) except as permitted by this Consent and Waiver, the
representations and warranties made by the Company in Section 7 of the
Credit Agreement, and by each Obligor in each of the other Loan
Documents to which it is a party, are true and complete on and as of
the date of this Consent and Waiver, and the date of the consummation
of the Transaction, with the same force and effect as if made on and as
of each 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);
(c) on a pro forma basis after giving effect to the
Transaction, the Company shall remain in compliance with Sections 8.10,
8.11 and 8.13 of the Credit Agreement; and
(d) the businesses being conducted by Adohr to be transferred
to the California Venture are in the same line or lines of business
currently engaged in by certain Subsidiaries of the Company, or as
permitted by Section 8.14 of the Credit Agreement.
6. Conditions Precedent. The effectiveness of this Consent and Waiver
is subject to the receipt by the Agent of the following documents, each of which
shall be satisfactory to the Agent in form and substance:
(a) certified copies of the Amended and Restated Operating
Agreement and Certificate of Formation of Limited Liability Company (or
equivalent documents) of the California Venture;
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(b) Uniform Commercial Code searches for Adohr for each
jurisdiction in which Adohr conducts its business or in which any of
its Properties are located (or otherwise as the Agent may reasonably
request);
(c) appropriately completed and duly executed copies of
Uniform Commercial Code Financing Statements, sufficient to perfect in
the Agent a security interest in the ownership interests of the
California Venture owned by the Company or Suiza Sub, in accordance
with the Security Agreement or the Subsidiary Guarantee and Security
Agreement;
(d) an opinion, appropriately dated, of counsel to the
California Venture covering such matters as the Agent may reasonably
request;
(e) if requested by the Agent, environmental surveys and
assessments prepared by one or more firms of licensed engineers
(familiar with the identification of toxic and hazardous substances) in
form and substance satisfactory to the Agent, such environmental survey
and assessment to be based upon physical on-site inspections by such
firm of each of the existing sites and facilities owned, operated or
leased by Adohr and to continue to be owned, operated or leased by the
California Venture as well as an historical review of the uses of such
sites and facilities and of the business and operations of Adohr;
(f) an amendment to the Security Agreement pursuant to which
the Company shall pledge all of its right, title and interest in or to
Suiza Sub to the Agent for the benefit of the Lenders, and
(g) a Joinder Agreement from Suiza Sub, whereby Suiza Sub
shall become a party to the Subsidiary Guarantee and Security
Agreement.
7. Covenants. In addition to any covenants set forth in the Credit
Agreement, the Company covenants and agrees with the Lenders and the Agent that:
(a) the Company, together with its Subsidiaries (other than
the California Venture), shall at all times collectively retain voting
control of at least 51% of each class of capital stock or other
ownership interests of the California Venture; and
(b) notwithstanding anything to the contrary in the
definitions of "EBITDA", the Company shall include within EBITDA for
any period no more than the pro rata share (equal to the aggregate
shares of capital stock or other ownership interests in the California
Venture then held by the Company and its Subsidiaries (other than the
California Venture) divided by the total shares of outstanding capital
stock or other ownership interests in the California Venture) of the
California Venture's operating income, depreciation and amortization,
and other income for such period.
8. Miscellaneous. Except as expressly provided herein, the Credit
Agreement and the Security Documents shall remain unmodified and in full force
and effect. This Consent and Waiver may be executed in any number of
counterparts, all of which taken together shall
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constitute one and the same instrument and any of the parties hereto may execute
this Consent and Waiver by signing any such counterpart. This Consent and Waiver
shall be governed by, and construed in accordance with, the law of the State of
New York.
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IN WITNESS WHEREOF, the parties hereto have caused this Consent and
Waiver to be duly executed and delivered as of the day and year first above
written.
COMPANY:
SUIZA FOODS CORPORATION
By:
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Name:
-----------------------------------
Title:
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AGREED AND ACCEPTED:
FIRST UNION NATIONAL BANK,
as Administrative Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
LENDERS:
FIRST UNION NATIONAL BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
THE FIRST NATIONAL BANK
OF CHICAGO
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Officer
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BANK ONE, TEXAS, N.A.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
BANK OF AMERICA NT&SA
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
BANK OF AMERICA, N.A.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
BANCO POPULAR DE PUERTO RICO
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
By:
-------------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA
By: /s/ M.D. ▇▇▇▇▇
-----------------------------------
Name: M.D. ▇▇▇▇▇
Title: Agent Operations
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THE BANK OF TOKYO - MITSUBISHI,
LTD., DALLAS OFFICE
By: /s/ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇. ▇▇▇▇▇▇▇
Title: Vice President
CREDIT AGRICOLE INDOSUEZ
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: First Vice President
Managing Director
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President, Manager
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
FLEET NATIONAL BANK
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
▇▇▇▇▇ FARGO BANK (TEXAS) N.A.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Banking Officer
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CIBC INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Executive Director
CIBC World Markets Corp.,
As Agent
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
COBANK ACB
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
AMSOUTH BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
BANKBOSTON N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
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▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ AGENCY
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
BHF (USA) CAPITAL CORPORATION
By:
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Name:
Title:
By:
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Name:
Title:
THE INDUSTRIAL BANK OF JAPAN,
LIMITED
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Joint General Manager
By:
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Name:
Title:
THE LONG-TERM CREDIT BANK OF
JAPAN, LIMITED
By:
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Name:
Title:
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MELLON BANK, N.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
THE MITSUBISHI TRUST AND
BANKING CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Manager
NATEXIS BANQUE BFCE
By:
-------------------------------------
Name:
Title:
By:
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Name:
Title:
NATIONAL CITY BANK OF
KENTUCKY
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
THE ROYAL BANK OF SCOTLAND PLC
By:
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Name:
Title:
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THE SANWA BANK, LIMITED,
NEW YORK BRANCH
By:
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Name:
Title:
STB DELAWARE FUNDING TRUST I
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Assistant Vice President
SUNTRUST BANK, ATLANTA
By: /s/ F. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: F. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇▇▇ ▇. Kotors
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Kotors
Title: Banking Officer
THE TOKAI BANK, NEW YORK BRANCH
By:
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Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
By:
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Name:
Title:
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COMPAGNIE FINANCIERE DE CIC ET
DE L'UNION EUROPEENNE
By: /s/ ▇▇▇▇▇ ▇'▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇'▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
ERSTE BANK
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President, Erste Bank
New York Branch
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: First Vice President
GENERAL ELECTRIC CAPITAL
CORPORATION
By:
-------------------------------------
Name:
Title:
MICHIGAN NATIONAL BANK
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Commercial Relationship Manager
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COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
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