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EXHIBIT 10.3
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EXECUTION COPY
SOUTHERN FOODS GROUP, L.P.
MID-AMERICA DAIRYMEN, INC.
$250,000,000
Credit Agreement
September 4, 1997
The Lenders Party Hereto
The Chase Manhattan Bank
as Administrative Agent
CHASE SECURITIES INC.
AS ARRANGER
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CHASE
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TABLE OF CONTENTS
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ARTICLE I
Definitions
SECTION 1.01. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.02. Classification of Loans and Borrowings . . . . . . . . . . . . . . . . 27
SECTION 1.03. Terms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 1.04. Accounting Terms; GAAP . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 1.05. Liability of General Partner . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE II
The Credits
SECTION 2.01. Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.02. Loans and Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.03. Requests for Borrowings . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.04. Swingline Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.05. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 2.06. Funding of Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.07. Interest Elections . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 2.08. Termination and Reduction of Commitments . . . . . . . . . . . . . . . 37
SECTION 2.09. Repayment of Loans; Evidence of Debt . . . . . . . . . . . . . . . . . 38
SECTION 2.10. Amortization of Term Loans . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 2.11. Prepayment of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 2.12. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 2.13. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 2.14. Alternate Rate of Interest . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 2.15. Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 2.16. Break Funding Payments . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 2.17. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-Offs . . . . . . 48
SECTION 2.19. Mitigation Obligations; Replacement of Lenders . . . . . . . . . . . . 49
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 3.02. Authorization; Enforceability . . . . . . . . . . . . . . . . . . . . . 50
SECTION 3.03. Governmental Approvals; No Conflicts . . . . . . . . . . . . . . . . . 50
SECTION 3.04. Financial Condition; No Material Adverse Change . . . . . . . . . . . . 51
SECTION 3.05. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
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SECTION 3.06. Litigation and Environmental Matters . . . . . . . . . . . . . . . . . 52
SECTION 3.07. Compliance with Laws and Agreements . . . . . . . . . . . . . . . . . . 52
SECTION 3.08 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 3.09. Investment and Holding Company Status . . . . . . . . . . . . . . . . . 53
SECTION 3.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 3.11. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 3.12. Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 3.13. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 3.14. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 3.15. Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 3.16. Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 3.17. Security Documents . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 3.18. Federal Reserve Regulations . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 3.19. Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 3.20. Mortgaged Properties . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 3.21. Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE IV
Conditions
SECTION 4.01. Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 4.02. Each Credit Event . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements and Other Information . . . . . . . . . . . . . . 64
SECTION 5.02. Notices of Material Events . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 5.03. Information Regarding Collateral . . . . . . . . . . . . . . . . . . . 66
SECTION 5.04. Existence; Conduct of Business . . . . . . . . . . . . . . . . . . . . 66
SECTION 5.05. Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 5.06. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 5.07. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 5.08. Casualty and Condemnation . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 5.09. Books and Records, Inspection and Audit Rights . . . . . . . . . . . . 70
SECTION 5.10. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 5.11. Use of Proceeds and Letters of Credit . . . . . . . . . . . . . . . . . 70
SECTION 5.12. Additional Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 5.13 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 5.14. Interest Rate Protection . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 5.15. Concentration and Disbursement Accounts . . . . . . . . . . . . . . . . 72
SECTION 5.16. Maintenance of Registrations of Pledge . . . . . . . . . . . . . . . . 72
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ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness; Certain Equity Securities . . . . . . . . . . . . . . . . 72
SECTION 6.02. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 6.03. Fundamental Changes . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions . . . . . . . 75
SECTION 6.05. Asset Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 6.06. Sale and Lease-Back Transactions . . . . . . . . . . . . . . . . . . . 76
SECTION 6.07. Hedging Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness . . . . . . . . . 77
SECTION 6.09. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . 77
SECTION 6.10. Restrictive Agreements . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 6.11. Amendment of Material Documents . . . . . . . . . . . . . . . . . . . . 78
SECTION 6.12. Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 6.13. Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 6.14. Consolidated Interest Expense Coverage Ratio . . . . . . . . . . . . . 80
SECTION 6.15. Current Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 6.16. Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 6.17. Consolidated Partner Equity . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 6.18. Take or Pay Contracts . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 6.19. Partnership Elections . . . . . . . . . . . . . . . . . . . . . . . . . 81
ARTICLE VII
Events of Default . . . . . . . . . . . . . . 82
ARTICLE VIII
The Administrative Agent . . . . . . . . . . . . . 84
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 9.02. Waivers; Amendments . . . . . . . . . . . . . . . . . . . . . . . . 87
SECTION 9.03. Expenses; Indemnity; Damage Waiver . . . . . . . . . . . . . . . . 88
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SECTION 9.04. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . 89
SECTION 9.05. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 9.06. Counterparts; Integration; Effectiveness . . . . . . . . . . . . . 92
SECTION 9.07. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
SECTION 9.08. Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . 92
SECTION 9.09. Governing Law; Jurisdiction; Consent
to Service of Process . . . . . . . . . . . . . . . . . . . . . . 92
SECTION 9.10. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 9.11. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 9.12. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 9.13. Interest Rate Limitation . . . . . . . . . . . . . . . . . . . . . 94
SECTION 9.14. Waiver of Defenses . . . . . . . . . . . . . . . . . . . . . . . . 94
SCHEDULES:
Schedule 1.01(a) -- Contributed Business
Schedule 1.01(b) -- Mortgaged Real Properties
Schedule 1.01(c) -- Mortgaged Leasehold Properties
Schedule 1.01(d) -- Refinanced Indebtedness
Schedule 2.01 -- Commitments
Schedule 3.03 -- Conflicting Agreements
Schedule 3.05(a) -- Holdover Tenancies
Schedule 3.05(c) -- Owned and Leased Property
Schedule 3.06 -- Disclosed Matters
Schedule 3.07 -- Zoning Matters
Schedule 3.13 -- Subsidiaries
Schedule 3.14 -- Insurance
Schedule 3.19 -- Ownership of the Borrower and the General Partner
Schedule 3.21 -- Leases
Schedule 4.01 -- Local Counsel
Schedule 5.13 -- Post-Closing Matters
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.04 -- Investments, Loans, Advances, Guarantees and
Acquisitions
Schedule 6.10 -- Existing Restrictions
EXHIBITS:
Exhibit A -- Form of Assignment and Acceptance
Exhibit B-1 -- Form of Opinion of Xxxxxxxxxxx & Price, L.L.P.
Exhibit B-2 -- Form of Opinion of Coudert Brothers
Exhibit B-3 -- Form of Opinion of Xxxxx X. Xxxxxxx, Esq.
Exhibit B-4 -- Form of Opinion of Local Counsel
Exhibit C -- Form of Guarantee Agreement
Exhibit D -- Form of Indemnity, Subrogation and Contribution Agreement
Exhibit E-1 -- Form of Real Property Mortgage
Exhibit E-2 -- Form of Leasehold Property Mortgage
Exhibit E-3 -- Form of Real Property Deed of Trust
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Exhibit E-4 -- Form of Leasehold Property Deed of Trust
Exhibit F -- Form of Pledge Agreement
Exhibit G -- Form of Security Agreement
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CREDIT AGREEMENT dated as of September 4, 1997, among
SOUTHERN FOODS GROUP, L.P., a limited partnership organized under
the laws of the State of Delaware (the "Borrower"), MID-AMERICA
DAIRYMEN, INC., a Kansas corporation ("Mid-Am" or the "Initial
Borrower"), the LENDERS party hereto and THE CHASE MANHATTAN
BANK, as Administrative Agent.
Pursuant to the Stock Purchase and Merger Agreement dated as of May 22,
1997, among the Initial Borrower, Xxxxxx Holdings (such term and each other
capitalized term used but not defined in this preamble having the meaning
assigned to such term in Article I) and Xxxxxx, (a) AcquisitionCo will acquire
all the outstanding preferred stock and common stock of Xxxxxx Holdings owned
by Xxxxxx, (b) AcquisitionCo will be merged with and into Xxxxxx Holdings and,
as a result of such merger, Xxxxxx Holdings will become a wholly owned
subsidiary of Mid-Am, and (c) Xxxxxx Holdings and its subsidiaries (other than
BMGD and Xxxxxx Investments) will be merged with and into Mid-Am.
In connection with the Acquisition, (a) Mid-Am will contribute the
assets and liabilities that were held by Xxxxxx Holdings and its subsidiaries
(other than the capital stock, assets and liabilities of BMGD and Xxxxxx
Investments) immediately prior to the Acquisition to the Borrower in exchange
for (i) the assumption by the Borrower of the Initial Borrower's obligations
under this Agreement and (ii) the issuance by the Borrower of the New Preferred
Interests and (b) the Borrower and SFG Capital will issue the Subordinated Debt
in a public offering or Rule 144A placement.
Each of the Initial Borrower and the Borrower has requested the Lenders
to extend credit in the form of (a) Tranche A Term Loans on the Effective Date,
in an aggregate principal amount of $90,000,000, (b) Tranche B Term Loans on
the Effective Date, in an aggregate principal amount of $100,000,000, and (c)
Revolving Loans at any time and from time to time from and including the
Effective Date and prior to the Revolving Credit Maturity Date, in an aggregate
principal amount at any time outstanding not in excess of $60,000,000. The
Borrower has requested the Swingline Lender to extend credit, at any time and
from time to time from and including the Effective Date and prior to the
Revolving Credit Maturity Date, in the form of Swingline Loans, in an aggregate
principal amount at any time outstanding not in excess of $10,000,000. The
Borrower has requested the Issuing Bank to issue letters of credit, in an
aggregate face amount at any time outstanding not in excess of $5,000,000, to
support payment obligations incurred in the ordinary course of business by the
Borrower and the Subsidiaries.
The Term Loans, together with up to $15,000,000 of Revolving Loans, will
be made by the Lenders to the Initial Borrower on the Effective Date, and the
proceeds of such Loans, together with other available funds of the Initial
Borrower, will be used by the Initial Borrower solely (a) to pay $435,000,000
in cash to Xxxxxx in connection with the Acquisition, (b) to pay related fees
and expenses and (c) with respect to a portion of the Revolving Loans made on
the Effective Date, for general corporate purposes. Immediately after (a) the
making of the Term Loans and the applicable portion of the Revolving Loans on
the Effective Date and (b) the consummation of the Mid-Am Contribution, the
Borrower shall assume the obligations of the Initial Borrower under this
Agreement and thereafter the Initial Borrower shall have no further
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rights or obligations under the Loan Documents with respect to Borrowings
received by it on the Effective Date, provided that, after the Effective Date,
the Initial Borrower shall remain liable (a) with respect to the
representations and warranties made by it hereunder on the Effective Date and
(b) with respect to certain affirmative covenants made by it hereunder. The
proceeds of the Revolving Loans (other than the Revolving Loans used for the
purposes specified in the first sentence of this paragraph) and the Swingline
Loan are to be used by the Borrower for general corporate purposes of the
Borrower and the Subsidiaries.
The Lenders and the Swingline Lenders are willing to extend such credit
to the Initial Borrower and the Borrower, and the Issuing Bank is willing to
issue letters of credit of the account of the Borrower, in each case on the
terms and subject to the conditions set forth herein. Accordingly, the parties
hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Acquisition" means the acquisition on the Effective Date, pursuant to
the Stock Purchase Agreement, by AcquisitionCo from Xxxxxx of all the
outstanding preferred stock and common stock of Xxxxxx Holdings for an
aggregate cash consideration of $380,000,000.
"AcquisitionCo" means Mid-Am Acquisition Co., a Delaware corporation
that is a wholly owned subsidiary of the Initial Borrower.
"Acquisition Documents" means the Xxxxxx Trademark Documents, the
Capital Contribution Agreement, the Equipment Sub-lease Documents, the Loan
Documents, the Meadow Gold Trademark Acquisition Agreement, the Mid-Am
Contribution Agreement, the Milk Products Agreement and the Stock Purchase
Agreement.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing for
any Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means The Chase Manhattan Bank, in its capacity
as administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire in
a form supplied by the Administrative Agent.
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"Affiliate" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Alternate Base Rate" means, for any day, a rate per annum equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect
on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a
change in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively.
"Applicable Percentage" means, with respect to any Revolving Lender, the
percentage of the total Revolving Commitments represented by such Lender's
Revolving Commitment. If the Revolving Commitments have terminated or expired,
the Applicable Percentages shall be determined based upon the Revolving
Commitments most recently in effect, giving effect to any assignments.
"Applicable Rate" means, for any day (a) with respect to any Tranche B
Term Loan, the applicable Tranche B Rate, and (b) with respect to any ABR Loan
or Eurodollar Loan that is a Revolving Loan or a Tranche A Term Loan, or with
respect to the commitment fees payable hereunder, as the case may be, the
applicable rate per annum set forth below under the caption "ABR Spread",
"Eurodollar Spread" or "Commitment Fee Rate", as the case may be, based upon
the Leverage Ratio for the period of four consecutive fiscal quarters of the
Borrower most recently ended on or before the date of determination, provided
that until the third day after the delivery to the Administrative Agent,
pursuant to Section 5.01(b), of the Borrower's consolidated financial
statements for the Borrower's first full fiscal quarter ending after the
Effective Date, the "Applicable Rate" for purposes of clause (b) above shall be
the applicable rate per annum set forth below in Category 1:
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ABR Eurodollar Commitment Fee
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Leverage Ratio: Spread Spread Rate
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Category 1
Greater than or equal to 5.0 to 1.00 1.25% 2.50% 0.50%
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Category 2
Less than 5.0 to 1.00 but greater
than or equal to 4.25 to 1.00 1.00% 2.25% 0.45%
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Category 3
Less than 4.25 to 1.00 but greater
than or equal to 3.5 to 1.00 0.75% 2.00% 0.40%
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Category 4
Less than 3.5 to 1.00 0.50% 1.75% 0.35%
====================================================================================================
For purposes of the foregoing, (a) the Leverage Ratio as described above
shall be determined as of the end of each fiscal quarter of the Borrower's
fiscal year based upon the Borrower's consolidated financial statements
delivered pursuant to Section 5.01(a) or (b), and
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(b) each change in the Applicable Rate resulting from a change in the Leverage
Ratio shall be effective during the period from and including the third day
(such day, the "Applicable Rate Determination Date") after the date of delivery
to the Administrative Agent of such consolidated financial statements
indicating such change and ending on the date immediately preceding the
effective date of the next such change, provided that such Leverage Ratio shall
be deemed to be in Category 1 (i) at any time that an Event of Default has
occurred and is continuing or (ii) if the Borrower fails to deliver the
consolidated financial statements required to be delivered by it pursuant to
Section 5.01(a) or (b), during the period from the expiration of the time for
delivery thereof until such consolidated financial statements are delivered.
Notwithstanding anything to the contrary set forth above, in the event that any
financial statements delivered pursuant to Section 5.01(a) or (b) at any time
indicate that the Leverage Ratio is greater than or equal to 5.50 to 1.00, the
ABR Spread or Eurodollar Spread that would otherwise be in effect shall be
increased by 0.25% per annum.
"Applicable Rate Determination Date" has the meaning assigned to such
term in the definition of the term "Applicable Rate".
"Approved Fund" means, with respect to any Lender that is a fund that
invests in bank loans, any other fund that invests in bank loans and is managed
by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.
"Assessment Rate" means, for any day, the annual assessment rate in
effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
for insurance by such Corporation of time deposits made in dollars at the
offices of such member in the United States, provided that if, as a result of
any change in any law, rule or regulation, it is no longer possible to
determine the Assessment Rate as aforesaid, then the Assessment Rate shall be
such annual rate as shall be determined by the Administrative Agent to be
representative of the cost of such insurance to the Lenders.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent
is required by Section 9.04), and accepted by the Administrative Agent, in the
form of Exhibit A or any other form approved by the Administrative Agent.
"Base CD Rate" means the sum of (a) the Three-Month Secondary CD Rate
multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"BMGD" means Xxxxxx/Meadow Gold Dairies, Inc., a Delaware corporation
(to be renamed BMGD, Inc. in connection with the Transactions), that is a
wholly owned subsidiary of Xxxxxx Holdings.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America.
"Xxxxxx" means (a) Xxxxxx, Inc., a New Jersey corporation, and (b) BDH
Two, Inc., a Delaware corporation.
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"Xxxxxx Dairies Sale" means the sale immediately following the
Acquisition by BMGD to Milk Products of all the assets relating to the dairy
operations of BMGD pursuant to the Milk Products Agreement.
"Xxxxxx Holdings" means Xxxxxx/Meadow Gold Dairies Holdings, Inc., a
Delaware corporation.
"Xxxxxx Investments" means Xxxxxx/Meadow Gold Dairies Investments, Inc.,
a Delaware corporation (to be renamed Meadow Gold Dairies Investments, Inc. in
connection with the Transactions).
"Xxxxxx Trademark Assignment Agreement" means the Assignment and
Assumption Agreement dated as of September 4, 1997, between the Borrower and
the Initial Borrower, relating to the assignment by the Initial Borrower to the
Borrower of its rights under the Stock Purchase Agreement with respect to the
Xxxxxx Trademark License Agreement.
"Xxxxxx Trademark Documents" means the Xxxxxx Trademark Assignment
Agreement and the Xxxxxx Trademark License Agreement.
"Xxxxxx Trademark License Agreement" means the Trademark License
Agreement dated as of September 4, 1997, between Xxxxxx and the Borrower.
"Borrower" means Southern Foods Group, L.P., a limited partnership
organized under the laws of the State of Delaware.
"Borrowing" means (a) Loans of the same Class and Type, made, converted
or continued on the same date and, in the case of Eurodollar Loans, as to which
a single Interest Period is in effect, or (b) a Swingline Loan.
"Borrowing Request" means a request by the Borrower for a Borrowing in
accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by law to
remain closed, provided that, when used in connection with a Eurodollar Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
"Capital Contribution" means the contribution by Mid-Am Capital to the
Borrower of an aggregate amount of $45,000,000 in cash in consideration for the
issuance by the Borrower of the Mid-Am Capital New Preferred Interests pursuant
to the Capital Contribution Agreement.
"Capital Contribution Agreement" means the Capital Contribution
Agreement dated as of September 4, 1997, between Mid-Am Capital and the
Borrower, relating to the Capital Contribution.
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"Capital Expenditures" means, for any period, (a) the additions to
property, plant and equipment and other capital expenditures of the Borrower
and its consolidated Subsidiaries that are (or would be) set forth in a
consolidated statement of cash flows of the Borrower for such period prepared
in accordance with GAAP and (b) Capital Lease Obligations incurred by the
Borrower and its consolidated Subsidiaries during such period.
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination
thereof, which obligations are required to be classified and accounted for as
capital leases on a balance sheet of such Person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof determined in
accordance with GAAP.
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act, 42 U.S.C. Section 9601 et seq.
"Change in Control" means (a) the Initial Borrower shall cease to own or
control, directly or indirectly, beneficially or of record, at least 50% of the
aggregate economic or voting equity ownership of the Borrower or the General
Partner, free and clear of all Liens; (b) if at any time (i) any Permitted
Holder shall cease to own or control, directly or indirectly, beneficially or
of record, at least 50% of the aggregate economic or voting equity ownership of
the Borrower or the General Partner, free and clear of all Liens and (ii) the
Initial Borrower shall not own or control, directly or indirectly, beneficially
or of record, at least 50.1% of such aggregate economic or voting equity
ownership; (c) the occupation of a majority of the seats (other than vacant
seats) on the Representative Committee of the General Partner by Persons who
are neither (i) nominated by the Members of the General Partner nor (ii)
appointed by Representatives so nominated; or (d) the acquisition of direct or
indirect Control of the Borrower or the General Partner by any Person or group
other than one or more Permitted Holders or the Initial Borrower; provided,
however, that any merger, consolidation or contribution of one or more of the
Initial Borrower, Associated Milk Products, Inc., Milk Marketing Inc. and
Western Dairymen Cooperative Inc. shall not be deemed to constitute a "Change
in Control".
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or the Issuing
Bank (or, for purposes of Section 2.15(b), by any lending office of such Lender
or by such Lender's or the Issuing Bank's holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"Class", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans,
Tranche A Term Loans, Tranche B Term Loans or Swingline Loans and, when used in
reference to any Commitment, refers to whether such Commitment is a Revolving
Commitment, Tranche A Commitment or Tranche B Commitment.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
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"Collateral" means any and all "Collateral", as defined in any
applicable Security Document.
"Commitment" means a Revolving Commitment, Tranche A Commitment or
Tranche B Commitment, or any combination thereof (as the context requires).
"Consolidated Cash Flow Available for Fixed Charges" means for any
period, (a) the sum of (i) Consolidated EBITDA for such period and (ii)
Consolidated Lease Expense for such period (excluding interest expense, if any,
associated with Capital Lease Obligations) minus (b) the sum of (i) Capital
Expenditures for such period and (ii) income taxes paid in cash for such
period, each such component determined on a consolidated basis for the Borrower
and the Subsidiaries in accordance with GAAP.
"Consolidated Current Assets" means at any date of determination, all
assets (other than cash and cash-equivalents) that would, in accordance with
GAAP, be classified on a consolidated balance sheet of the Borrower and the
Subsidiaries as current assets at such date of determination.
"Consolidated Current Liabilities" means at any date of determination,
all liabilities (other than, without duplication (a) the current portion of
long-term Indebtedness and (b) outstanding Swingline Loans and Revolving Loans)
that would, in accordance with GAAP, be classified on a consolidated balance
sheet of the Borrower and the Subsidiaries as current liabilities at such date
of determination.
"Consolidated EBITDA" means, for any period, Consolidated Net Income for
such period, plus, without duplication and to the extent deducted from revenues
in determining Consolidated Net Income, the sum of (a) the aggregate amount of
Consolidated Interest Expense for such period, (b) the aggregate amount of
letter of credit fees paid during such period, (c) the aggregate amount of
income tax expense for such period, (d) all amounts attributable to
depreciation and amortization for such period, (e) all extraordinary charges
during such period and (f) all other non-cash charges, and minus, without
duplication and to the extent added to revenues in determining Consolidated Net
Income for such period, all extraordinary gains during such period, all as
determined on a consolidated basis with respect to the Borrower and the
Subsidiaries in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, the interest
expense, both expensed and capitalized (including the interest component in
respect of Capital Lease Obligations), accrued or paid by the Borrower and the
Subsidiaries during such period, determined on a consolidated basis in
accordance with GAAP.
"Consolidated Interest Expense Coverage Ratio" means, for any period,
the ratio of (a) Consolidated EBITDA for such period to (b) Consolidated
Interest Expense for such period.
"Consolidated Lease Expense" means, for any period, all payment
obligations of the Borrower and the Subsidiaries during such period under
agreements for the lease, hire or use of any real or personal property,
including Capital Lease Obligations and obligations in the nature of operating
leases (including the interest expense, if any, associated therewith), as
determined on a consolidated basis for the Borrower and the Subsidiaries in
accordance with GAAP.
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"Consolidated Net Income" means, for any period, net income or loss of
the Borrower and the Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP, provided that there shall be excluded (a) the
income of any Person in which any other Person (other than the Borrower or any
of the Subsidiaries or any director holding qualifying shares in compliance
with applicable law) has a joint interest, except to the extent of the amount
of dividends or other distributions actually paid to the Borrower or any of the
Subsidiaries by such Person during such period, (b) the loss of any Person in
which any other Person (other than the Borrower or any of the Subsidiaries or
any director holding qualifying shares in compliance with applicable law) has a
joint interest, except to the extent of the aggregate investment of the
Borrower or any of the Subsidiaries in such Person during such period, and (c)
the income (or loss) of any Person accrued prior to the date it becomes a
Subsidiary or is merged into or consolidated with the Borrower or any of the
Subsidiaries or the date that Person's assets are acquired by the Borrower or
any of the Subsidiaries.
"Consolidated Partner Equity" means, as at any date of determination,
the consolidated partners' equity of the Borrower and its consolidated
subsidiaries, as determined on a consolidated basis in accordance with GAAP.
"Contributed Business" means the assets and liabilities that were held,
prior to the Acquisition, by Xxxxxx Holdings and its subsidiaries (other than
the capital stock, assets and liabilities of BMGD and Xxxxxx Investments), all
as set forth on Schedule 1.01(a).
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
The terms "Controlling" and "Controlled" have meanings correlative thereto.
"Credit Event" has the meaning assigned to such term in Section 4.01.
"Default" means any event or condition that constitutes an Event of
Default or that upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings disclosed
on Schedule 3.06.
"dollars" or "$" refers to lawful money of the United States of America.
"Effective Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by or with any Governmental
Authority, relating in any way to the environment, preservation or reclamation
of natural resources, the handling, treatment, storage, disposal, Release or
threatened Release of any Hazardous Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, natural resource damage, costs of
environmental investigation,
15
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monitoring or remediation, administrative oversight costs, fines, penalties or
indemnities), directly or indirectly resulting from or based upon (a) violation
of any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to any
Hazardous Materials, (d) the Release or threatened Release of any Hazardous
Materials into the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
"Environmental Permit" means any permit, approval, authorization,
certificate, license, variance, filing or permission required by or from any
Governmental Authority pursuant to any Environmental Law.
"Equipment Assignment" means the assignment by Xxxxxx to the Initial
Borrower, pursuant to the Assignment of Xxxxxx'x right to use certain equipment
that is used in the operation of Xxxxxx Holdings' business under the Master
Lease Agreement.
"Equipment Sub-lease" means the grant by the Initial Borrower to the
Borrower of a sub-lease of the equipment used as of the date hereof pursuant to
the Master Lease Agreement in connection with the operation of the Contributed
Business.
"Equipment Sub-lease Documents" means the Master Lease Agreement and the
Equipment Sub-lease.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan
(other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Borrower or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate
of any notice, or the receipt by any Multiemployer Plan from the Borrower or
any ERISA Affiliate of any notice, concerning the imposition of Withdrawal
Liability or a determination that a Multiemployer Plan is, or is expected to
be, insolvent or in reorganization, within the meaning of Title IV of ERISA.
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"Eurodollar", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article VII.
"Excess Cash Flow" means, for any period, the sum (without duplication)
of:
(a) the Consolidated Net Income for such period, adjusted to
exclude any gains or losses attributable to Prepayment Events; plus
(b) depreciation, amortization and other non-cash charges or
losses deducted in determining the Consolidated Net Income for such
period; plus
(c) aggregate principal amount of Capital Lease Obligations and
other Indebtedness incurred during such period to finance Capital
Expenditures, to the extent that mandatory principal payments in respect
of such Indebtedness would not be excluded from clause (f) below when
made; minus
(d) any non-cash gains included in determining Consolidated Net
Income for such period; minus
(e) Capital Expenditures for such period; minus
(f) the aggregate principal amount of Indebtedness repaid or
prepaid by the Borrower and its consolidated Subsidiaries during such
period, excluding (i) Indebtedness in respect of Revolving Loans and
Letters of Credit, (ii) Term Loans prepaid pursuant to Section 2.11(b),
(c), (d) or (e), (iii) repayments or prepayments of Indebtedness
financed by incurring other Indebtedness, to the extent that mandatory
principal payments in respect of such other Indebtedness would, pursuant
to this clause (f), be deducted in determining Excess Cash Flow when
made and (iv) Indebtedness referred to in clauses (iii), (iv) and (vii)
of Section 6.01(a).
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of the Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Borrower
under Section 2.19), any withholding tax that is imposed on amounts payable to
such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office), except to the extent that such
Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to
Section 2.17(a), and (c) any withholding tax that is attributable to such
Foreign Lender's failure to comply with Section 2.17(e).
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"Existing Preferred Interests" means the $84,947,000 in original stated
value of Series A Preferred Capital Interests that are registered in the name
of the Initial Borrower on the date hereof.
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower.
"Financing Transactions" means (a) the execution, delivery and
performance by each Initial Loan Party of the Loan Documents to which it is to
be a party, the borrowing of Loans, the use of the proceeds thereof and the
issuance of Letters of Credit hereunder, (b) the execution, delivery and
performance by each of the Borrower and SFG Capital of the Subordinated Debt
Documents to which each of the Borrower and SFG Capital will be parties, the
issuance of the Subordinated Debt and the use of the proceeds thereof and (c)
the Capital Contribution.
"Fixed Charge Coverage Ratio" means, for any period, the ratio of (a)
Consolidated Cash Flow Available for Fixed Charges for such period to (b) Fixed
Charges for such period.
"Fixed Charges" means, for any period, the sum of (a) Consolidated Lease
Expense (excluding interest expense, if any, associated with Capital Lease
Obligations) for such period, (b) Consolidated Interest Expense for such
period, (c) scheduled principal payments of Indebtedness made by the Borrower
or any Subsidiary to any person other than the Borrower or any wholly owned
Subsidiary of the Borrower during such period and (d) Permitted Tax
Distributions made during such period.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Foreign Subsidiary" means any Subsidiary that is organized under the
laws of a jurisdiction other than the United States of America or any State
thereof or the District of Columbia.
"GAAP" means generally accepted accounting principles in the United
States of America.
"General Partner" means SFG Management, the general partner of the
Borrower.
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"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state
or local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay
such Indebtedness or other obligation or (d) as an account party in respect of
any letter of credit or letter of guaranty issued to support such Indebtedness
or obligation, provided that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business.
"Guarantee Agreement" means the Guarantee Agreement, substantially in
the form of Exhibit C, made by the Subsidiary Loan Parties in favor of the
Administrative Agent for the benefit of the Secured Parties.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law, including any material listed as a hazardous substance under
Section 101(14) of CERCLA.
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging
arrangement.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as
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an account party in respect of letters of credit and letters of guaranty and
(j) all obligations, contingent or otherwise, of such Person in respect of
bankers' acceptances. The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person's ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnity, Subrogation and Contribution Agreement" means the Indemnity,
Subrogation and Contribution Agreement, substantially in the form of Exhibit D,
among the Borrower, the Subsidiary Loan Parties and the Administrative Agent.
"Information Memorandum" means the Confidential Information Memorandum
dated July 1997, relating to the Initial Borrower, the Borrower and the
Transactions.
"Initial Borrower" means Mid-America Dairymen, Inc., a Kansas
corporation that owns on the date hereof, directly or indirectly, 50% of the
common voting partnership interests of the Borrower.
"Initial Loan Parties" means the Initial Borrower and the Loan Parties.
"Interest Election Request" means a request by the Borrower to convert
or continue a Revolving Borrowing or Term Borrowing in accordance with Section
2.07.
"Interest Payment Date" means (a) with respect to any ABR Loan (other
than a Swingline Loan), the last Business Day of each March, June, September
and December, (b) with respect to any Eurodollar Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part and,
in the case of a Eurodollar Borrowing with an Interest Period of more than
three months' duration, each Business Day prior to the last day of such
Interest Period that occurs at intervals of three months' duration after the
first day of such Interest Period, and (c) with respect to any Swingline Loan,
the day that such Loan is required to be repaid.
"Interest Period" means, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Borrower may elect, provided that (i) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (ii) any Interest
Period that commences on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the last calendar month
of such Interest Period) shall end on the last Business Day of the last
calendar month of such Interest Period. For purposes hereof, the date of a
Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
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"Issuing Bank" means The Chase Manhattan Bank, in its capacity as the
issuer of Letters of Credit hereunder, and its successors in such capacity as
provided in Section 2.05(i). The Issuing Bank may, in its discretion, arrange
for one or more Letters of Credit to be issued by Affiliates of the Issuing
Bank, in which case the term "Issuing Bank" shall include any such Affiliate
with respect to Letters of Credit issued by such Affiliate.
"LC Availability Period" means the period from and including the
Effective Date to but excluding the earlier of (a) the date that is five
Business Days prior to the Revolving Maturity Date and (b) the date of
termination of the Revolving Commitments.
"LC Disbursement" means a payment made by the Issuing Bank pursuant to a
Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on
behalf of the Borrower at such time. The LC Exposure of any Revolving Lender
at any time shall be its Applicable Percentage of the total LC Exposure at such
time.
"Lenders" means the Persons listed on Schedule 2.01 and any other Person
that shall have become a party hereto pursuant to an Assignment and Acceptance,
other than any such Person that ceases to be a party hereto pursuant to an
Assignment and Acceptance. Unless the context otherwise requires, the term
"Lenders" includes the Swingline Lender.
"Letter of Credit" means any letter of credit issued pursuant to this
Agreement.
"Leverage Ratio" means, with respect to any period, the ratio of (a)
Total Debt as of the last day of such period to (b) Consolidated EBITDA for
such period, all determined on a consolidated basis in accordance with GAAP.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Dow Xxxxx Service (or
on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is
not available at such time for any reason, then the "LIBO Rate" with respect to
such Eurodollar Borrowing for such Interest Period shall be the rate at which
dollar deposits of $5,000,000 and for a maturity comparable to such Interest
Period are offered by the principal London office of the Administrative Agent
in immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest
in, on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention
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agreement (or any financing lease having substantially the same economic effect
as any of the foregoing) relating to such asset and (c) in the case of
securities, any purchase option, call or similar right of a third party with
respect to such securities.
"Loan Documents" means this Agreement, the Letters of Credit, the
Guarantee Agreement, the Indemnity, Subrogation and Contribution Agreement and
the Security Documents.
"Loan Parties" means the Borrower and the Subsidiary Loan Parties.
"Loans" means the loans made by the Lenders to the Borrower pursuant to
this Agreement.
"Margin Stock" has the meaning assigned to such term in Regulation U.
"Master Lease Agreement" means the Master Leasing Agreement dated as of
September 4, between the Initial Borrower and BLC Corporation, a Utah
corporation.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, liabilities (including contingent liabilities), operations,
condition (financial or otherwise), prospects or material agreements, of the
Borrower or any of the Subsidiaries, (b) the ability of any Initial Loan Party
to perform any of its obligations under any Loan Document or (c) the rights of
or benefits available to the Lenders under any Loan Document.
"Material Indebtedness" means Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Hedging
Agreements, of any one or more of the Borrower and the Subsidiaries in an
aggregate principal amount exceeding $5,000,000. For purposes of determining
the amount of Material Indebtedness at any time, the "principal amount" of the
obligations of the Borrower or any Subsidiary in respect of any Hedging
Agreement at such time shall be the maximum aggregate amount (giving effect to
any netting agreements) that the Borrower or such Subsidiary would be required
to pay if such Hedging Agreement were terminated at such time.
"Meadow Gold Trademark Acquisition" means the acquisition by the
Borrower from Xxxxxx Investments of certain trademarks pursuant to the Meadow
Gold Trademark Acquisition Agreement.
"Meadow Gold Trademark Acquisition Agreement" means the Asset Purchase
Agreement dated as of September 4, 1997, between Xxxxxx Investments, the
Initial Borrower and the Borrower.
"Member" has the meaning assigned to such term in the SFG Management
Agreement.
"Mid-Am Capital" means Mid-Am Capital, L.L.C., a limited liability
company organized under the laws of the State of Delaware.
"Mid-Am Capital New Preferred Interests" means (a) the $15,000,000 in
stated value of Series C Preferred Capital Interests issued by the Borrower to
Mid-Am Capital on the date
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hereof and (b) the $30,000,000 in stated value of Series D Preferred Capital
Interests issued by the Borrower to Mid-Am Capital on the date hereof.
"Mid-Am Contribution" means the contribution by the Initial Borrower to
the Borrower of the Contributed Business pursuant to the Contribution
Agreement.
"Mid-Am Contribution Agreement" means the Capital Contribution,
Assignment and Assumption Agreement dated as of September 4, 1997, between the
Initial Borrower and the Borrower relating to the Mid-Am Contribution.
"Mid-Am New Preferred Interests" means the $90,000,000 in stated value
of Series B Preferred Capital Interests issued by the Borrower to Mid-Am on the
date hereof.
"Milk Products" means Milk Products LLC, a limited liability company
organized under the laws of the State of Delaware.
"Milk Products Agreement" means the Asset Purchase Agreement dated as of
September 4, 1997, between Mid-Am and Milk Products relating to the Xxxxxx
Dairies Sale.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Mortgage" means a mortgage, deed of trust, assignment of leases and
rents, leasehold mortgage or other security document, substantially in the form
of Exhibit E, granting a Lien on any Mortgaged Property to secure the
Obligations. Each Mortgage shall be satisfactory in form and substance to the
Administrative Agent.
"Mortgaged Property" means, initially, each parcel of real property and
the improvements thereto owned or leased by a Loan Party and identified on
Schedule 1.01(b) (in the case of real property) and on Schedule 1.01(c) (in the
case of leasehold property), and includes each other parcel of real property
and improvements thereto with respect to which a Mortgage is granted pursuant
to Section 5.12 or 5.13.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Proceeds" means, with respect to any event (a) the cash proceeds
received in respect of such event, including (i) any cash received in respect
of any non-cash proceeds, but only as and when received, (ii) in the case of a
casualty, insurance proceeds, and (iii) in the case of a condemnation or
similar event, condemnation awards and similar payments, net of (b) the sum of
(i) all reasonable fees and out-of-pocket expenses paid by the Borrower and the
Subsidiaries to third parties (other than Affiliates) in connection with such
event, (ii) in the case of a sale, transfer, or other disposition of an asset
(including pursuant to a sale and leaseback transaction or a casualty or other
insured damage or condemnation or similar proceeding), the amount of all
payments required to be made by the Borrower and the Subsidiaries as a result
of such event to repay Indebtedness (other than Loans) permitted by Section
6.01 and secured by such asset or otherwise subject to mandatory prepayment as
a result of such event and (iii) the amount of all taxes paid (or reasonably
estimated to be payable) by the Borrower and the Subsidiaries, and the amount
of any reserves established by the Borrower and the Subsidiaries
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to fund contingent liabilities reasonably estimated to be payable, in each case
during the year that such event occurred or the next succeeding year and that
are directly attributable to such event (as determined reasonably and in good
faith by the chief financial officer of the Borrower).
"New Preferred Interests" means (a) the Mid-Am New Preferred Interests
and (b) the Mid-Am Capital New Preferred Interests.
"Obligations" has the meaning assigned to such term in the Security
Agreement.
"Other Taxes" means any and all current or future stamp, recordation,
transfer, documentary taxes, excise, property or similar taxes, charges or
similar levies (as well as any interest, penalties or additions relating to
such other taxes) arising from any payment made under any Loan Document or from
the execution, delivery or enforcement of, or otherwise with respect to, any
Loan Document.
"Partnership Agreement" means the Second Amended and Restated Agreement
of Limited Partnership of the Borrower, dated as of September 3, 1997, between
the Initial Borrower, the Borrower and Xx. Xxxx Xxxxxxxx.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Perfection Certificate" means a certificate in the form of Annex 1 to
the Security Agreement or any other form approved by the Administrative Agent.
"Permitted Acquisition" means any non-hostile acquisition of assets
located in the United States from, or capital stock or other equity interests
(other than Margin Stock) in, any Person so long as (a) immediately after
giving effect thereto, no Default or Event of Default shall have occurred and
be continuing or would result therefrom, (b) all transactions related thereto
shall be consummated in accordance with applicable laws, (c) in the case of any
acquisition of capital stock of other equity interests in any Person, such
acquisition is an acquisition of 100% of the capital stock or other equity
interests of such Person, (d) in the case of an acquisition of assets, such
assets are to be used, and in the case of an acquisition of capital stock or
other equity interests, the Person so acquired is engaged, in the same line of
business as the Borrower, (e) neither the Borrower nor any of its subsidiaries
shall assume or otherwise become liable for any Indebtedness in connection with
such acquisition, except for Indebtedness permitted by Section 6.01, and (f)
simultaneously with any such acquisition, the Administrative Agent for the
benefit of the Secured Parties shall be granted a first-priority security
interest in all real and personal property (including capital stock and other
securities or interests, subject to customary and reasonable permitted
encumbrances) acquired by the Borrower as part of such acquisition, and the
Borrower shall, and shall cause any applicable subsidiary to, execute any
documents (including supplements to the Guarantee Agreement, the Security
Agreement, the Pledge Agreement and the Indemnity, Subrogation and Contribution
Agreement, if applicable), financing statements, agreements and instruments,
and take all action (including filing financing statements and obtaining and
providing consents, title insurance, surveys and legal opinions) that may be
required under applicable law or as the Administrative Agent may request, in
order to grant, preserve, protect and perfect such
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security interest; provided, however, that a Permitted Acquisition shall not be
deemed to constitute a Capital Expenditure.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are
being contested in compliance with Section 5.05;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary
course of business and securing obligations that are not overdue by more
than 30 days or are being contested in compliance with Section 5.05;
(c) pledges and deposits made in the ordinary course of business
in compliance with workers' compensation, unemployment insurance and
other social security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature, in each case in the
ordinary course of business;
(e) judgment liens in respect of judgments that do not constitute
an Event of Default under clause (k) of Article VII;
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do
not materially detract from the value of the affected property or
interfere with the ordinary conduct of business of the Borrower or any
Subsidiary;
(g) any interest of a landlord in or to property of the tenant
imposed by law, arising in the ordinary course of business and securing
lease obligations that are not overdue by more than 60 days or are being
contested in compliance with Section 5.05, or any possessory rights of a
lessee to the leased property under the provisions of any lease
permitted by the terms of this Agreement; and
(h) Liens of a collection bank arising in the ordinary course of
business under Section 4-208 of the Uniform Commercial Code in effect
in the relevant jurisdiction,
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Holder" means Xx. Xxxx Xxxxxxxx (or any corporation, limited
liability company or partnership owned by Xx. Xxxx Xxxxxxxx or members of his
immediate family) or any other Person that is designated as a Permitted Holder
by the Borrower with the written consent of each Lender.
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"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America), in
each case maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from
the date of acquisition thereof and having, at such date of acquisition,
the highest credit rating obtainable from S&P or from Moody's;
(c) investments in certificates of deposit, banker's acceptances
and time deposits maturing within 180 days from the date of acquisition
thereof issued or guaranteed by or placed with, and money market deposit
accounts issued or offered by, any domestic office of any commercial
bank organized under the laws of the United States of America or any
State thereof that has a combined capital and surplus and undivided
profits of not less than $500,000,000; and
(d) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria
described in clause (c) above.
"Permitted Tax Distribution" means a direct or indirect distribution to
Xx. Xxxx Xxxxxxxx (or any taxable successors to all or a part of Xx. Xxxxxxxx'x
direct or indirect partnership interests in the Borrower, Xx. Xxxxxxxx, as a
holder of a direct or indirect partnership interest in the Borrower, or any
taxable successor(s) to all or part of his direct or indirect partnership
interest in the Borrower hereinafter referred to as an "Eligible Partner") with
respect to the Eligible Partner's direct or indirect partnership interests in
the Borrower (including such Eligible Partner's direct or indirect interests in
SFG Management) to enable such Eligible Partner to pay Federal, state and local
Income Taxes (including quarterly estimated Income Taxes) with respect to the
Borrower's net income or any segment or division thereof allocable to such
Eligible Partner. For the purposes of this definition:
(a) "Income Taxes" means all Federal, state and local taxes,
fees, assessments or charges of any kind, imposed on, or determined with
reference to, net income of the Borrower or any division or segment
thereof, or any allocable portion thereof, including without limitation
any self-employment or similar tax imposed with respect to an Eligible
Partner's allocable share of net income or any division or segment
thereof, and "Income Tax" means any one of such Income Taxes.
(b) The amount payable as Permitted Tax Distributions in any
applicable fiscal year shall equal the greater of (1) the product of (i)
the sum of (A) the highest marginal Federal tax rate (taking into
account deductions or credits for state and local taxes) applicable to
the Eligible Partner (at either individual or corporate rates, as
applicable) with respect to the Borrower's taxable income directly or
indirectly allocable to such Eligible Partner with respect to such
applicable fiscal year, (B) the highest state tax rate (taking into
account deductions or credits for local taxes) applicable to the
Eligible
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Partner (at either individual or corporate rates, as applicable) with
respect to the Borrower's taxable income directly or indirectly
allocable to such Eligible Partner with respect to such applicable
fiscal year and (C) the highest local tax rate applicable to the
Eligible Partner (at either individual or corporate rates, as
applicable) with respect to the Borrower's taxable income directly or
indirectly allocable to such Eligible Partner with respect to such
applicable fiscal year, multiplied by (ii) the Borrower's taxable income
directly or indirectly allocable to such Eligible Partner with respect
to such fiscal year; or (2) the product of (i) the sum of (A) the
highest Federal alternative minimum tax rate (taking into account
deductions or credits for state and local taxes) applicable to the
Eligible Partner (at either individual or corporate rates, as
applicable) with respect to the Borrower's alternative minimum taxable
income directly or indirectly allocable to such Eligible Partner with
respect to such applicable fiscal year, (B) the highest state tax rate
(taking into account deductions or credits for local taxes) applicable
to the Eligible Partner (at either individual or corporate rates, as
applicable) with respect to the Borrower's taxable income or alternative
minimum taxable income, as applicable, directly or indirectly allocable
to such Eligible Partner with respect to such applicable fiscal year and
(C) the highest local tax rate applicable to the Eligible Partner (at
either individual or corporate rates, as applicable) with respect to the
Borrower's taxable income or alternative minimum taxable income, as
applicable, directly or indirectly allocable to such Eligible Partner
with respect to such applicable fiscal year, multiplied by (ii) the
Borrower's taxable income or alternative minimum taxable income, as
applicable, directly or indirectly allocable to such Eligible Partner
with respect to such fiscal year. The Permitted Tax Distributions for
each applicable fiscal year shall be appropriately adjusted to reflect
(i) any tax losses of the Borrower arising in any prior fiscal year
(assuming that any such losses are carried forward and used to offset
the Borrower's taxable income in the applicable fiscal year) and (ii)
the Borrower's payment of any withholding taxes that would give rise to
a credit or other tax benefit to the Borrower (or the Eligible Partner).
(c) Payments or distributions in connection with Permitted Tax
Distributions related to payments of estimated Federal income tax shall
be payable in quarterly installments with respect to the applicable
fiscal year, in each case no more than five days prior to the Federal
estimated tax due dates applicable to the Eligible Partner. Such
quarterly installments shall be based upon the Borrower's then good
faith estimate of its taxable income (or alternative minimum taxable
income, as applicable) directly or indirectly allocable to the Eligible
Partner (as calculated in the manner described in paragraph (b) above),
subject to appropriate adjustment to reflect over and under payment of
any prior quarterly periods during the applicable fiscal year, and in
each quarter shall be no greater than the applicable estimated tax
payment to be paid by such Eligible Partner to the applicable
Governmental Authority.
(d) Payments or distributions in connection with the Permitted
Tax Distribution related to the filing of extensions of time for filing
Income Tax returns for a fiscal year shall be payable in each case no
more than five days prior to the applicable date on which such payment
of Income Tax is due, shall be based on the Borrower's then good faith
estimate of its taxable income (or alternative minimum taxable income,
as applicable) directly or indirectly allocable to the Eligible Partner
for such fiscal year,
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and shall be no greater than the applicable tax payment to be paid by
such Eligible Partner to the applicable Governmental Authority.
(e) The aggregate amount of such Permitted Tax Distributions
paid during the applicable fiscal year shall be based upon the
Borrower's taxable income (or alternative minimum taxable income, as
applicable) directly or indirectly allocable to the Eligible Partner
with respect to such applicable fiscal year as shown on the Borrower's
filed Federal Income Tax return for such fiscal year, or if such return
is not filed when the financial statements referred to in Section
5.01(a) for such fiscal year are delivered, the Borrower's then good
faith estimate of the amount of its taxable income (or alternative
minimum taxable income, as applicable), taking into account any
separately stated items, for such fiscal year. In the event that the
Borrower files an amended Income Tax return (or upon the Borrower's
filing of its original return for the applicable fiscal year if the
Permitted Tax Distribution was based upon the Borrower's good faith
estimate of its taxable income or alternative minimum taxable income, as
applicable) that is inconsistent with its calculation of its taxable
income (or alternative minimum taxable income, as applicable) for any
such fiscal year(s), or in the event that a Governmental Authority
determines that information reflected in any of the Borrower's tax
returns for such fiscal year is inaccurate or incomplete, then the
Borrower shall make a proper adjustment (including any penalties,
interest or other charges related to the adjustment or correction of
information reflected in such return(s) or the filing of such tax
return(s)) to the amount payable as a Permitted Tax Distribution for
such fiscal year(s). According to whether such adjustments to the
amounts payable as Permitted Tax Distributions for the applicable year
are positive or negative with respect to the Eligible Partner, the
Borrower shall, as applicable, either promptly pay to the Eligible
Partner as a distribution as needed to fund payments to a Governmental
Authority by such Eligible Partner, or shall require the Eligible
Partner to promptly pay to it, the amount of any such adjustment (and no
further Permitted Tax Distributions shall be paid until the Eligible
Partner has repaid any such excess to the Borrower). Payments or
distributions to the Eligible Partner upon the Eligible Partner filing
original Income Tax returns for a fiscal year shall be payable in each
case no more than five days prior to the applicable date on which the
Income Tax payment is due in connection with such return filing, and
shall be no greater than the applicable tax payment to be paid by such
Eligible Partner to the applicable Governmental Authority.
(f) In the event that the aggregate amount of Permitted Tax
Distributions actually distributed in respect of any fiscal year exceeds
the amounts determined as indicated in paragraph (e) above for such
fiscal year, the Eligible Partner shall promptly repay any such excess
to the Borrower (and no further Permitted Tax Distributions shall be
paid until the Eligible Partner has repaid any such excess to the
Borrower).
(g) For all periods from and after the inception of the Borrower
as a partnership, the amount of the aggregate Permitted Tax
Distributions made with respect to the direct or indirect partnership
interests held by an Eligible Partner for each fiscal year shall be
appropriately adjusted in the current fiscal year or in future fiscal
years, regardless of whether such Eligible Partner has held, or now or
in the future holds a direct or indirect partnership interest in the
Borrower (to allow additional Permitted
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Tax Distributions for the benefit of such Eligible Partner in the case
of tax increases or in the case of tax decreases by the Eligible Partner
paying any tax decrease to the Borrower) to reflect any adjustments in
income tax (or alternative minimum tax) liabilities as a result of
adjustments made for any reason to items of income, gain, loss,
deduction or credit of the Borrower, or adjustments made in the Eligible
Partner's allocable shares of such items (regardless of whether
occurring as a result of the Borrower's filing of an amended return or
as a result of an examination or audit by a Governmental Authority).
For the period up to and including Xx. Xxxxxxxx'x purchase of Xx. Xxxxx
Xxxxx'x direct or indirect partnership interests in the Borrower, the
term "Eligible Partner" shall also include Xx. Xxxxx Xxxxx as a former
holder of a partnership interest in the Borrower.
(h) In the event that, for any reason, all or any portion of a
Permitted Tax Distribution cannot be distributed to an Eligible Partner,
such deficiency in Permitted Tax Distribution shall be distributed to
such Eligible Partner in any subsequent fiscal year.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, limited
partnership, Governmental Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower
or any ERISA Affiliate is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"Pledge Agreement" means the Pledge Agreement, substantially in the form
of Exhibit F, among the Borrower, Xx. Xxxx Xxxxxxxx, SFG Management, the
Subsidiaries party thereto and the Administrative Agent for the benefit of the
Secured Parties.
"Prepayment Event" means:
(a) any sale, transfer or other disposition (including pursuant
to a sale and leaseback transaction) of any property or asset of the
Borrower or any Subsidiary, other than (i) dispositions described in
clauses (a) and (b) of Section 6.05 and (ii) other dispositions
resulting in aggregate Net Proceeds not exceeding $1,000,000 during any
fiscal year of the Borrower;
(b) any casualty or other insured damage to, or any taking under
power of eminent domain or by condemnation or similar proceeding of, any
property or asset of the Borrower or any Subsidiary;
(c) the issuance by the Borrower or any Subsidiary of any equity
securities, or the receipt by the Borrower or any Subsidiary of any
capital contribution, other than any such issuance of equity securities
to, or receipt of any such capital contribution from, the Borrower or a
Subsidiary; or
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(d) the incurrence by the Borrower or any Subsidiary of any
Indebtedness, other than Indebtedness permitted by Section 6.01(a).
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by The Chase Manhattan Bank as its prime rate in effect at
its principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as
being effective.
"Refinanced Indebtedness" means the Indebtedness of the Borrower set
forth on Schedule 1.01(d).
"Register" has the meaning set forth in Section 9.04(c).
"Regulation G" means Regulation G of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulation U" means Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulation X" means Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, dispersing, emanating or migrating of any Hazardous Material in,
into, onto or through the environment.
"Representative" has the meaning assigned to such term in the SFG
Management Agreement.
"Representative Committee" has the meaning assigned to such term in the
SFG Management Agreement.
"Required Lenders" means, at any time, Lenders having Revolving
Exposures, Term Loans and unused Commitments representing more than 50% of the
sum of the total Revolving Exposures, outstanding Term Loans and unused
Commitments at such time.
"Restricted Payment" means any dividend or other distribution (whether
in cash, securities or other property) with respect to any shares of any class
of capital stock or partnership interests or other equity interest of any class
in the Borrower or any Subsidiary, or any payment (whether in cash, securities
or other property), including any sinking fund or similar deposit, on account
of the purchase, redemption, retirement, acquisition, cancelation or
termination of any such shares of capital stock or partnership interests or
other equity interests in the Borrower or any Subsidiary or any option, warrant
or other right to acquire any such
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shares of capital stock or partnership interests or other equity interests in
the Borrower or any Subsidiary.
"Revolving Availability Period" means the period from and including the
Effective Date to but excluding the earlier of the Revolving Maturity Date and
the date of termination of the Revolving Commitments.
"Revolving Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit and Swingline Loans hereunder, expressed as
an amount representing the maximum aggregate amount of such Lender's Revolving
Exposure hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.08 and (b) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to Section 2.19(b) or
9.04. The initial amount of each Lender's Revolving Commitment is set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such
Lender shall have assumed its Revolving Commitment, as applicable. The initial
aggregate amount of the Lenders' Revolving Commitments is $60,000,000.
"Revolving Exposure" means, with respect to any Lender at any time, the
sum of the outstanding principal amount of such Lender's Revolving Loans and
its LC Exposure and Swingline Exposure at such time.
"Revolving Lender" means a Lender with a Revolving Commitment or, if the
Revolving Commitments have terminated or expired, a Lender with Revolving
Exposure.
"Revolving Loan" means a Loan made pursuant to Section 2.01(c).
"Revolving Maturity Date" means September 4, 2004.
"S&P" means Standard & Poor's.
"Secured Parties" has the meaning assigned to such term in the Security
Agreement.
"Security Agreement" means the Security Agreement, substantially in the
form of Exhibit G, among the Borrower, the Subsidiary Loan Parties and the
Administrative Agent for the benefit of the Secured Parties.
"Security Documents" means the Security Agreement, the Pledge Agreement,
the Mortgages and each other security agreement or other instrument or document
executed and delivered pursuant to Section 5.12 or 5.13 to secure any of the
Obligations.
"Series A Preferred Capital Interests" means the Series A 10% Payment-
in-Kind Preferred Limited Partner Interests of the Borrower.
"Series B Preferred Capital Interests" means the Series B 10%
Payment-in-Kind Preferred Limited Partner Interests of the Borrower.
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"Series C Preferred Capital Interests" means the Series C 10%
Payment-in-Kind Preferred Limited Partner Interests of the Borrower.
"Series D Preferred Capital Interests" means the Series D 9-1/2%
Preferred Limited Partner Interests of the Borrower.
"Series E Preferred Capital Interests" means the Series E 10% Payment-
in-Kind Preferred Limited Partner Interests of the Borrower.
"SFG Capital" means SFG Capital Corporation, a Delaware corporation that
is on the date hereof a wholly owned subsidiary of the Borrower.
"SFG Management" means SFG Management Limited Liability Company, a
limited liability company organized under the laws of the State of Delaware.
"SFG Management Agreement" means the Second Amended and Restated Limited
Liability Company Agreement dated as of September 3, 1997, between the Initial
Borrower and Xx. Xxxx Xxxxxxxx.
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject (a) with
respect to the Base CD Rate, for new negotiable nonpersonal time deposits in
dollars of over $100,000 with maturities approximately equal to three months
and (b) with respect to the Adjusted LIBO Rate, for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of the
Board). Such reserve percentages shall include those imposed pursuant to such
Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D or any comparable regulation. The
Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"Stock Purchase Agreement" means the Stock Purchase and Merger Agreement
dated as of May 22, 1997, among the Initial Borrower, Xxxxxx Holdings and
Xxxxxx relating to the Acquisition.
"Subordinated Debt" means the 9 7/8% Senior Subordinated Debt due 2007
to be issued by the Borrower and SFG Capital on or prior to the Effective Date
in the aggregate principal amount of not less than $150,000,000 and the
Indebtedness represented thereby.
"Subordinated Debt Documents" means the indenture under which the
Subordinated Debt is issued and all other instruments, agreements and other
documents evidencing or governing the Subordinated Debt or providing for any
right in respect thereof.
"subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, limited
partnership, association or other
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entity the accounts of which would be consolidated with those of the parent in
the parent's consolidated financial statements if such financial statements
were prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, limited partnership,
association or other entity (a) of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the
ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held,
or (b) that is, as of such date, otherwise Controlled, by the parent or one or
more subsidiaries of the parent or by the parent and one or more subsidiaries
of the parent.
"Subsidiary" means any subsidiary of the Borrower. For purposes of the
representations and warranties made herein on the Effective Date and for the
purposes of Article IV, the term "Subsidiary" includes each of Xxxxxx Holdings
and its subsidiaries.
"Subsidiary Loan Party" means any Subsidiary that is not a Foreign
Subsidiary.
"Swingline Exposure" means, at any time, the aggregate principal amount
of all Swingline Loans outstanding at such time. The Swingline Exposure of any
Lender at any time shall be its Applicable Percentage of the total Swingline
Exposure at such time.
"Swingline Lender" means The Chase Manhattan Bank, in its capacity as
lender of Swingline Loans hereunder.
"Swingline Loan" means a Loan made pursuant to Section 2.04.
"Taxes" means any and all current or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority (and any interest, penalties or additions relating thereto).
"Term Commitments" means a Tranche A Commitment or Tranche B Commitment
or any combination thereof (as the context requires).
"Term Loans" means Tranche A Term Loans and Tranche B Term Loans.
"Three-Month Secondary CD Rate" means, for any day, the secondary market
rate for three-month certificates of deposit reported as being in effect on
such day (or, if such day is not a Business Day, the next preceding Business
Day) by the Board through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release H.15(519) during the
week following such day) or, if such rate is not so reported on such day or
such next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center banks
in New York City received at approximately 10:00 a.m., New York City time, on
such day (or, if such day is not a Business Day, on the next preceding Business
Day) by the Administrative Agent from three negotiable certificate of deposit
dealers of recognized standing selected by it.
"Total Debt" means, as of any date of determination, without
duplication, the aggregate principal amount of Indebtedness of the Borrower and
the Subsidiaries outstanding as
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of such date, determined on a consolidated basis in accordance with GAAP (other
than Indebtedness of the type referred to in clause (i) of the definition of
the term "Indebtedness", except to the extent of any unreimbursed drawings
thereunder).
"Tranche A Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make a Tranche A Term Loan hereunder on
the Effective Date, expressed as an amount representing the maximum principal
amount of the Tranche A Term Loan to be made by such Lender hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.08 and
(b) reduced or increased from time to time pursuant to assignments by or to
such Lender pursuant to Section 9.04. The initial amount of each Lender's
Tranche A Commitment is set forth on Schedule 2.01, or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its Tranche A
Commitment, as applicable. The initial aggregate amount of the Lenders'
Tranche A Commitments is $90,000,000.
"Tranche A Lender" means a Lender with a Tranche A Commitment or an
outstanding Tranche A Term Loan.
"Tranche A Maturity Date" means September 4, 2004.
"Tranche A Term Loan" means a Loan made pursuant to Section 2.01(a).
"Tranche B Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make a Tranche B Term Loan hereunder on
the Effective Date, expressed as an amount representing the maximum principal
amount of the Tranche B Term Loan to be made by such Lender hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.08 and
(b) reduced or increased from time to time pursuant to assignments by or to
such Lender pursuant to Section 9.04. The initial amount of each Lender's
Tranche B Commitment is set forth on Schedule 2.01, or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its Tranche A
Commitment, as applicable. The initial aggregate amount of the Lenders'
Tranche B Commitments is $100,000,000.
"Tranche B Lender" means a Lender with a Tranche B Commitment or an
outstanding Tranche B Term Loan.
"Tranche B Maturity Date" means March 4, 2006.
"Tranche B Rate" means, subject to the last sentence of the definition
of the term "Applicable Rate", (a) 1.75% per annum, in the case of an ABR Loan
or (b) 3.00% per annum, in the case of a Eurodollar Loan.
"Tranche B Term Loan" means a Loan made pursuant to Section 2.01(b).
"Transactions" means the Acquisition, the Financing Transactions, the
Mid-Am Contribution, the issuance of the New Preferred Interests, the
consummation of the Meadow Gold Trademark Acquisition, the execution of the
Xxxxxx Trademark Documents, the
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consummation of the Xxxxxx Dairies Sale and the execution of the Equipment Sub-
lease Documents.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the
Alternate Base Rate.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For purposes of
this Agreement, Loans may be classified and referred to by Class (e.g., a
"Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type
(e.g. a "Eurodollar Revolving Loan"). Borrowings also may be classified and
referred to by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a
"Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar Revolving
Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including"
shall be deemed to be followed by the phrase "without limitation". The word
"will" shall be construed to have the same meaning and effect as the word
"shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth
herein), (b) any reference herein to any Person shall be construed to include
such Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time, provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have
been withdrawn or such provision amended in accordance herewith.
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SECTION 1.05. Liability of General Partner. The liability of the
General Partner with respect to the Obligations of the Borrower under this
Agreement and the other Loan Documents shall be limited to the Collateral
pledged by the General Partner to the Secured Parties under the Pledge
Agreement.
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions set
forth herein, each Lender agrees (a) to make a Tranche A Term Loan to the
Initial Borrower on the Effective Date in a principal amount not exceeding its
Tranche A Commitment, (b) to make a Tranche B Term Loan to the Initial Borrower
on the Effective Date in a principal amount not exceeding its Tranche B
Commitment, (c) to make Revolving Loans to the Initial Borrower on the
Effective Date in a principal amount not to exceed such Lender's Applicable
Percentage of $15,000,000 and (d) to make Revolving Loans to the Borrower from
time to time during the Revolving Availability Period in an aggregate principal
amount that will not result in such Lender's Revolving Exposure exceeding such
Lender's Revolving Commitment. Within the foregoing limits and subject to the
terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow Revolving Loans. Amounts repaid in respect of Term Loans may not be
reborrowed. On the Effective Date, immediately after the making of the Term
Loans and the Revolving Loans referred to in clauses (a), (b) and (c) above by
the Lenders to the Initial Borrower, and the consummation of the Mid-Am
Contribution, the Borrower shall assume the obligations of the Initial Borrower
under this Agreement and thereafter the Initial Borrower shall have no further
rights or obligations under the Loan Documents with respect to Borrowings
received by it on the Effective Date, provided that, after the Effective Date,
the Initial Borrower shall remain liable (a) with respect to the
representations and warranties made by it hereunder on the Effective Date and
(b) with respect to the affirmative covenants made by it pursuant to Sections
5.11 and 5.13.
SECTION 2.02. Loans and Borrowings. (a) Each Loan (other than a
Swingline Loan) shall be made as part of a Borrowing consisting of Loans of the
same Class and Type made by the Lenders ratably in accordance with their
respective Commitments of the applicable Class. The failure of any Lender to
make any Loan required to be made by it shall not relieve any other Lender of
its obligations hereunder, provided that the Commitments of the Lenders are
several and no Lender shall be responsible for any other Lender's failure to
make Loans as required.
(b) Subject to Section 2.14, each Revolving Borrowing and Term
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the
Initial Borrower (in the case of any Borrowing to be made on the Effective
Date) or the Borrower (in the case of any other Borrowing) may request in
accordance herewith. Notwithstanding anything to the contrary contained
herein, all Borrowings made on the Effective Date shall be ABR Borrowings.
Each Swingline Loan shall be an ABR Loan. Each Lender at its option may make
any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of
such Lender to make such Loan, provided that any exercise of such option shall
not affect the obligation of the Borrower to repay such Loan in accordance with
the terms of this Agreement.
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(c) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $1,000,000 and not less than $5,000,000, in each case with respect
to Borrowings made after the Effective Date. At the time that each ABR
Revolving Borrowing is made, such Borrowing shall be in an aggregate amount
that is an integral multiple of $500,000 and not less than $1,000,000, in each
case with respect to Borrowings made after the Effective Date, provided that an
ABR Revolving Borrowing may be in an aggregate amount that is equal to the
entire unused balance of the total Revolving Commitments or that is required to
finance the reimbursement of an LC Disbursement as contemplated by Section
2.05(e). Each Swingline Loan shall be in an amount that is an integral
multiple of $100,000 and not less than $100,000. Borrowings of more than one
Type and Class may be outstanding at the same time, provided that there shall
not at any time be more than a total of six Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Revolving Maturity Date, Tranche A Maturity Date or Tranche B Maturity
Date, as applicable.
SECTION 2.03. Requests for Borrowings. To request a Revolving
Borrowing or Term Borrowing, the Initial Borrower (in the case of any Borrowing
made on the Effective Date) or the Borrower (in the case of any Borrowing to be
made after the Effective Date) shall notify the Administrative Agent of such
request by telephone (a) in the case of a Eurodollar Borrowing, not later than
11:00 a.m., New York City time, three Business Days before the date of the
proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 11:00
a.m., New York City time, one Business Day before the date of the proposed
Borrowing, provided that any such notice of an ABR Revolving Borrowing to
finance the reimbursement of an LC Disbursement as contemplated by Section
2.05(e) may be given not later than 10:00 a.m., New York City time, on the date
of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Initial Borrower (in the case of any
Borrowing made on the Effective Date) or the Borrower (in the case of any
Borrowing to be made after the Effective Date). Each such telephonic and
written Borrowing Request (in the case of any Borrowing to be made after the
Effective Date) shall specify the following information in compliance with
Section 2.02:
(i) whether the requested Borrowing is to be a Revolving
Borrowing, Tranche A Term Borrowing or Tranche B Term Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) the date of such Borrowing, which shall be a Business Day;
(iv) subject to the second sentence of Section 2.02(b), whether
such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;
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(v) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by
the definition of the term "Interest Period"; and
(vi) the location and number of the Initial Borrower's (in the
case of any Borrowing to be made on the Effective Date) or the
Borrower's (in the case of any Borrowing to be made after the Effective
Date) account to which funds are to be disbursed, which shall comply
with the requirements of Section 2.06.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Initial Borrower or the
Borrower, as the case may be, shall be deemed to have selected an Interest
Period of one month's duration. Promptly following receipt of a Borrowing
Request in accordance with this Section, the Administrative Agent shall advise
each Lender of the details thereof and of the amount of such Lender's Loan to
be made as part of the requested Borrowing.
SECTION 2.04. Swingline Loans. (a) Subject to the terms and
conditions set forth herein, the Swingline Lender agrees to make Swingline
Loans to the Borrower from time to time during the Revolving Availability
Period, in an aggregate principal amount at any time outstanding that will not
result in (i) the aggregate principal amount of outstanding Swingline Loans
exceeding $10,000,000 or (ii) the sum of the total Revolving Exposures
exceeding the total Revolving Commitments, provided that the Swingline Lender
shall not be required to make a Swingline Loan to refinance an outstanding
Swingline Loan. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow
Swingline Loans.
(b) To request a Swingline Loan, the Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy), not
later than 12:00 noon, New York City time, on the day of a proposed Swingline
Loan. Each such notice shall be irrevocable and shall specify the requested
date (which shall be a Business Day) and amount of the requested Swingline
Loan. The Administrative Agent will promptly advise the Swingline Lender of
any such notice received from the Borrower. The Swingline Lender shall make
each Swingline Loan available to the Borrower by means of a credit to the
general deposit account of the Borrower with the Swingline Lender (or, in the
case of a Swingline Loan made to finance the reimbursement of an LC
Disbursement as provided in Section 2.05(e), by remittance to the Issuing Bank)
by 3:00 p.m., New York City time, on the requested date of such Swingline Loan.
(c) The Swingline Lender may by written notice given to the
Administrative Agent not later than 10:00 a.m., New York City time, on any
Business Day require the Revolving Lenders to acquire participations on such
Business Day in all or a portion of the Swingline Loans outstanding. Such
notice shall specify the aggregate amount of Swingline Loans in which Revolving
Lenders will participate. Promptly upon receipt of such notice, the
Administrative Agent will give notice thereof to each Revolving Lender,
specifying in such notice such Lender's Applicable Percentage of such Swingline
Loan or Loans. Each Revolving Lender hereby absolutely and unconditionally
agrees, upon receipt of notice as provided above, promptly to pay to the
Administrative Agent, for the account of the Swingline Lender, such
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Lender's Applicable Percentage of such Swingline Loan or Loans. Each Revolving
Lender acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this paragraph is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or reduction or termination of the Commitments,
and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever. Each Revolving Lender shall comply with
its obligation under this paragraph by wire transfer of immediately available
funds, in the same manner as provided in Section 2.06 with respect to Loans
made by such Lender (and Section 2.06 shall apply, mutatis mutandis, to the
payment obligations of the Revolving Lenders), and the Administrative Agent
shall promptly pay to the Swingline Lender the amounts so received by it from
the Revolving Lenders. The Administrative Agent shall notify the Borrower of
any participations in any Swingline Loan acquired pursuant to this paragraph,
and thereafter payments in respect of such Swingline Loan shall be made to the
Administrative Agent and not to the Swingline Lender. Any amounts received by
the Swingline Lender from the Borrower (or other party on behalf of the
Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender
of the proceeds of a sale of participations therein shall be promptly remitted
to the Administrative Agent; any such amounts received by the Administrative
Agent shall be promptly remitted by the Administrative Agent to the Revolving
Lenders that shall have made their payments pursuant to this paragraph and to
the Swingline Lender, as their interests may appear. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrower of any default in the payment thereof. Notwithstanding the
foregoing, a Revolving Lender shall not have any obligation to acquire a
participation in a Swingline Loan pursuant to this paragraph if an Event of
Default shall have occurred and be continuing at the time such Swingline Loan
was made and a Lender shall have notified the Swingline Lender in writing, at
least one Business Day prior to the time such Swingline Loan was made, that
such Event of Default has occurred and that such Lender will not acquire
participations in Swingline Loans made while such Event of Default is
continuing.
SECTION 2.05. Letters of Credit. (a) General. Subject to the terms
and conditions set forth herein, the Borrower may request the issuance of
Letters of Credit for its own account, in a form reasonably acceptable to the
Administrative Agent and the Issuing Bank, at any time and from time to time
during the LC Availability Period. In the event of any inconsistency between
the terms and conditions of this Agreement and the terms and conditions of any
form of letter of credit application or other agreement submitted by the
Borrower to, or entered into by the Borrower with, the Issuing Bank relating to
any Letter of Credit, the terms and conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the
Issuing Bank and the Administrative Agent (reasonably in advance of the
requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, and specifying the date of issuance,
amendment, renewal or extension (which shall be a Business Day), the date on
which such Letter of Credit is to expire (which shall comply with paragraph (c)
of this Section), the amount of such Letter of Credit, the name and address of
the beneficiary thereof and such other information as shall be necessary to
prepare, amend, renew
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or extend such Letter of Credit. If requested by the Issuing Bank, the
Borrower also shall submit a letter of credit application on the Issuing Bank's
standard form in connection with any request for a Letter of Credit. A Letter
of Credit shall be issued, amended, renewed or extended only if (and upon
issuance, amendment, renewal or extension of each Letter of Credit the Borrower
shall be deemed to represent and warrant that), after giving effect to such
issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed
$5,000,000 and (ii) the total Revolving Exposures shall not exceed the total
Revolving Commitments.
(c) Expiration Date. Each Letter of Credit shall expire at or prior to
the close of business on the earlier of (i) the date one year after the date of
the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Revolving Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Revolving Lender, and each Revolving Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit equal
to such Lender's Applicable Percentage of the aggregate amount available to be
drawn under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Revolving Lender hereby absolutely and unconditionally agrees
to pay to the Administrative Agent, for the account of the Issuing Bank, such
Lender's Applicable Percentage of each LC Disbursement made by the Issuing Bank
and not reimbursed by the Borrower on the date due as provided in paragraph (e)
of this Section, or of any reimbursement payment required to be refunded to the
Borrower for any reason. Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by
any circumstance whatsoever, including any amendment, renewal or extension of
any Letter of Credit or the occurrence and continuance of a Default or
reduction or termination of the Commitments, and that each such payment shall
be made without any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement
in respect of a Letter of Credit, the Borrower shall reimburse such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 noon, New York City time, on the date that
such LC Disbursement is made, if the Borrower shall have received notice of
such LC Disbursement prior to 10:00 a.m., New York City time, on such date, or,
if such notice has not been received by the Borrower prior to such time on such
date, then not later than 12:00 noon, New York City time, on (i) the Business
Day that the Borrower receives such notice, if such notice is received prior to
10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt, provided that
the Borrower may, subject to the conditions to borrowing set forth herein,
request in accordance with Section 2.03 or 2.04 that such payment be financed
with an ABR Revolving Borrowing or Swingline Loan in an equivalent amount and,
to the extent so financed, the Borrower's obligation to make such payment shall
be discharged and replaced by the resulting ABR Revolving Borrowing or
Swingline Loan. If the Borrower fails to make such payment when due, the
Administrative Agent shall notify each Revolving Lender of the applicable LC
Disbursement, the payment then due from the Borrower in respect thereof and
such Lender's Applicable Percentage thereof. Promptly following receipt of
such notice, each
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Revolving Lender shall pay to the Administrative Agent its Applicable
Percentage of the payment then due from the Borrower, in the same manner as
provided in Section 2.06 with respect to Loans made by such Lender (and Section
2.06 shall apply, mutatis mutandis, to the payment obligations of the Revolving
Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank
the amounts so received by it from the Revolving Lenders. Promptly following
receipt by the Administrative Agent of any payment from the Borrower pursuant
to this paragraph, the Administrative Agent shall distribute such payment to
the Issuing Bank or, to the extent that Revolving Lenders have made payments
pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders
and the Issuing Bank as their interests may appear. Any payment made by a
Revolving Lender pursuant to this paragraph to reimburse the Issuing Bank for
any LC Disbursement (other than the funding of ABR Revolving Loans or a
Swingline Loan as contemplated above) shall not constitute a Loan and shall not
relieve the Borrower of its obligation to reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrower's obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of,
or provide a right of setoff against, the Borrower's obligations hereunder.
None of the Administrative Agent, the Lenders or the Issuing Bank, nor any of
their Related Parties, shall have any liability or responsibility by reason of
or in connection with the issuance or transfer of any Letter of Credit or any
payment or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of
the Issuing Bank, provided that the foregoing shall not be construed to excuse
the Issuing Bank from liability to the Borrower to the extent of any direct
damages (as opposed to consequential damages, claims in respect of which are
hereby waived by the Borrower to the extent permitted by applicable law)
suffered by the Borrower that are caused by the Issuing Bank's failure to
exercise care when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof. The parties hereto
expressly agree that, in the absence of gross negligence or wilful misconduct
on the part of the Issuing Bank (as finally determined by a court of competent
jurisdiction), the Issuing Bank shall be deemed to have exercised care in each
such determination. In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
that appear on their face to be in substantial compliance with the terms of a
Letter of Credit, the Issuing Bank may, in its sole discretion, either accept
and make payment upon such documents without responsibility for further
investigation, unless it has received written notice to the contrary, or refuse
to accept and make payment upon such documents if such documents are not in
strict compliance with the terms of such Letter of Credit.
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(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder, provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Revolving Lenders with respect to any such
LC Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Revolving Loans,
provided that, if the Borrower fails to reimburse such LC Disbursement when due
pursuant to paragraph (e) of this Section, then Section 2.13(c) shall apply.
Interest accrued pursuant to this paragraph shall be for the account of the
Issuing Bank, except that interest accrued on and after the date of payment by
any Revolving Lender pursuant to paragraph (e) of this Section to reimburse the
Issuing Bank shall be for the account of such Lender to the extent of such
payment.
(i) Replacement of the Issuing Bank. The Issuing Bank may be replaced
at any time by written agreement among the Borrower, the Administrative Agent,
the replaced Issuing Bank and the successor Issuing Bank. The Administrative
Agent shall notify the Lenders of any such replacement of the Issuing Bank. At
the time any such replacement shall become effective, the Borrower shall pay
all unpaid fees accrued for the account of the replaced Issuing Bank pursuant
to Section 2.12(b). From and after the effective date of any such replacement,
(i) the successor Issuing Bank shall have all the rights and obligations of the
Issuing Bank under this Agreement with respect to Letters of Credit to be
issued thereafter and (ii) references herein to the term "Issuing Bank" shall
be deemed to refer to such successor or to any previous Issuing Bank, or to
such successor and all previous Issuing Banks, as the context shall require.
After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank
shall remain a party hereto and shall continue to have all the rights and
obligations of an Issuing Bank under this Agreement with respect to Letters of
Credit issued by it prior to such replacement, but shall not be required to
issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that the Borrower receives notice from the
Administrative Agent or Revolving Lenders with LC Exposure representing greater
than 50% of the total LC Exposure demanding the deposit of cash collateral
pursuant to this paragraph, the Borrower shall deposit in an account with the
Administrative Agent, in the name of the Administrative Agent and for the
benefit of the Lenders, an amount in cash equal to the LC Exposure as of such
date plus any accrued and unpaid interest thereon, provided that the obligation
to deposit such cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other
notice of any kind, upon the occurrence of any Event of Default with respect to
the Borrower described in clause (h) or (i) of Article VII. Each such deposit
shall be held by the Administrative Agent as collateral for the payment and
performance of the obligations of the Borrower under this Agreement. The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest
earned on the investment of such deposits, which investments shall be
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made at the option and sole discretion of the Administrative Agent and at the
Borrower's risk and expense, such deposits shall not bear interest. Interest
or profits, if any, on such investments shall accumulate in such account.
Moneys in such account shall be applied by the Administrative Agent to
reimburse the Issuing Bank for LC Disbursements for which it has not been
reimbursed and, to the extent not so applied, shall be held for the
satisfaction of the reimbursement obligations of the Borrower for the LC
Exposure at such time or, if the maturity of the Loans has been accelerated
(but subject to the consent of Revolving Lenders with LC Exposure representing
greater than 50% of the total LC Exposure), be applied to satisfy other
obligations of the Borrower under this Agreement. If the Borrower is required
to provide an amount of cash collateral hereunder as a result of the occurrence
of an Event of Default, such amount (to the extent not applied as aforesaid)
shall be returned to the Borrower within three Business Days after all Events
of Default have been cured or waived.
SECTION 2.06. Funding of Borrowings. (a) Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer
of immediately available funds by 12:00 noon, New York City time, to the
account of the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders, provided that Swingline Loans shall be made
as provided in Section 2.04. The Administrative Agent will make such Loans
available to the Borrower by promptly crediting the amounts so received, in
like funds, to an account of the Borrower maintained with the Administrative
Agent in New York City and designated by the Borrower in the applicable
Borrowing Request, provided that ABR Revolving Loans made to finance the
reimbursement of an LC Disbursement as provided in Section 2.05(e) shall be
remitted by the Administrative Agent to the Issuing Bank.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Initial
Borrower (in the case of any Borrowing made on the Effective Date) or the
Borrower (in the case of any Borrowing made after the Effective Date) a
corresponding amount. In such event, if a Lender has not in fact made its
share of the applicable Borrowing available to the Administrative Agent, then
the applicable Lender and the Initial Borrower (in the case of any Borrowing
made on the Effective Date) or the Borrower (in the case of any Borrowing made
after the Effective Date) severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Initial
Borrower (in the case of any Borrowing made on the Effective Date) or the
Borrower (in the case of any Borrowing to be made after the Effective Date) to
but excluding the date of payment to the Administrative Agent, at (i) in the
case of such Lender, the Federal Funds Effective Rate or, if such Rate is
unavailable or if such Rate is insufficient to provide adequate compensation to
the Administrative Agent, a rate reasonably determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation or
(ii) in the case of the Initial Borrower (in the case of any Borrowing made on
the Effective Date) or the Borrower (in the case of any Borrowing made after
the Effective Date), the interest rate applicable to ABR Loans. If such Lender
pays such amount to the Administrative Agent, then such amount shall constitute
such Lender's Loan included in such Borrowing.
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SECTION 2.07. Interest Elections. (a) Each Revolving Borrowing and
Term Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request. Thereafter,
the Borrower may elect to convert such Borrowing to a different Type or to
continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect
Interest Periods therefor, all as provided in this Section. The Borrower may
elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among the
Lenders holding the Loans comprising such Borrowing, and the Loans comprising
each such portion shall be considered a separate Borrowing. This Section shall
not apply to Swingline Borrowings, which may not be converted or continued.
(b) To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election by telephone by the time that
a Borrowing Request would be required under Section 2.03 if the Borrower were
requesting a Revolving Borrowing of the Type resulting from such election to be
made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
Borrower.
(c) Each telephonic and written Interest Election Request shall specify
the following information in compliance with Section 2.02 and paragraph (f) of
this Section:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to
clauses (iii) and (iv) below shall be specified for each resulting
Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing
or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of
such Lender's portion of each resulting Borrowing.
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(e) If the Borrower fails to deliver a timely Interest Election Request
with respect to a Eurodollar Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein,
at the end of such Interest Period such Borrowing shall be converted to an ABR
Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Administrative Agent, at the
request of the Required Lenders, so notifies the Borrower, then, so long as an
Event of Default is continuing (i) no outstanding Borrowing may be converted to
or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.
(f) A Borrowing of any Class may not be converted to or continued as a
Eurodollar Borrowing if after giving effect thereto (i) the Interest Period
therefor would commence before and end after a date on which any principal of
the Loans of such Class is scheduled to be repaid and (ii) the sum of the
aggregate principal amount of outstanding Eurodollar Borrowings of such Class
with Interest Periods ending on or prior to such scheduled repayment date plus
the aggregate principal amount of outstanding ABR Borrowings of such Class
would be less than the aggregate principal amount of Loans of such Class
required to be repaid on such scheduled repayment date.
SECTION 2.08. Termination and Reduction of Commitments. (a) Unless
previously terminated, (i) the Tranche A Commitments and Tranche B Commitments
shall terminate at 5:00 p.m., New York City time, on the Effective Date and
(ii) the Revolving Commitments shall terminate on the Revolving Maturity Date.
(b) The Borrower may at any time terminate, or from time to time
reduce, the Commitments of any Class, provided that (i) each reduction of the
Commitments of any Class shall be in an amount that is an integral multiple of
$1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not
terminate or reduce the Revolving Commitments if, after giving effect to any
concurrent prepayment of the Revolving Loans in accordance with Section 2.11,
the sum of the Revolving Exposures would exceed the total Revolving
Commitments.
(c) The Borrower shall notify the Administrative Agent of any election
to terminate or reduce the Commitments under paragraph (b) of this Section at
least three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly
following receipt of any such notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Borrower
pursuant to this Section shall be irrevocable, provided that a notice of
termination of the Revolving Commitments delivered by the Borrower may state
that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by notice
to the Administrative Agent on or prior to the specified effective date) if
such condition is not satisfied. Any termination or reduction of the
Commitments of any Class shall be permanent. Each reduction of the Commitments
of any Class shall be made ratably among the Lenders in accordance with their
respective Commitments of such Class.
SECTION 2.09. Repayment of Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay (i) to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Revolving Loan
of such Lender on the Revolving Maturity Date, (ii) to the Administrative Agent
for the account of each Lender the then unpaid
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principal amount of each Term Loan of such Lender as provided in Section 2.10
and (iii) to the Swingline Lender the then unpaid principal amount of each
Swingline Loan on the earlier of the Revolving Maturity Date and the first date
after such Swingline Loan is made that is the 20th or last day of a calendar
month and is at least two Business Days after such Swingline Loan is made,
provided that on each date that a Revolving Borrowing is made, the Borrower
shall repay all Swingline Loans then outstanding.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Class and Type thereof
and the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein, provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans of any Class made by it be
evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent. Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.04) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and
its registered assigns).
SECTION 2.10. Amortization of Term Loans. (a) Subject to adjustment
pursuant to paragraph (d) of this Section, the Borrower shall repay Tranche A
Term Borrowings on each date set forth below in the aggregate principal amount
set forth opposite such date:
Date Amount
---- ------
March 31, 1998 $1,250,000
June 30, 1998 1,250,000
September 30, 1998 1,250,000
December 31, 1998 1,250,000
March 31, 1999 2,500,000
June 30, 1999 2,500,000
September 30, 1999 2,500,000
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December 31, 1999 2,500,000
March 31, 2000 2,500,000
June 30, 2000 2,500,000
September 30, 2000 2,500,000
December 31, 2000 2,500,000
March 31, 2001 3,125,000
June 30, 2001 3,125,000
September 30, 2001 3,125,000
December 31, 2001 3,125,000
March 31, 2002 3,750,000
June 30, 2002 3,750,000
September 30, 2002 3,750,000
December 31, 2002 3,750,000
March 31, 2003 4,375,000
June 30, 2003 4,375,000
September 30, 2003 4,375,000
December 31, 2003 4,375,000
March 31, 2004 7,000,000
June 30, 2004 7,000,000
Tranche A Maturity Date 6,000,000
(b) Subject to adjustment pursuant to paragraph (d) of this Section,
the Borrower shall repay Tranche B Term Borrowings on each date set forth below
in the aggregate principal amount set forth opposite such date:
Date Amount
---- ------
March 31, 1998 $ 250,000
June 30, 1998 250,000
September 30, 1998 250,000
December 31, 1998 250,000
March 31, 1999 250,000
June 30, 1999 250,000
September 30, 1999 250,000
December 31, 1999 250,000
March 31, 2000 250,000
June 30, 2000 250,000
September 30, 2000 250,000
December 31, 2000 250,000
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March 31, 2001 250,000
June 30, 2001 250,000
September 30, 2001 250,000
December 31, 2001 250,000
March 31, 2002 250,000
June 30, 2002 250,000
September 30, 2002 250,000
December 31, 2002 250,000
March 31, 2003 250,000
June 30, 2003 250,000
September 30, 2003 250,000
December 31, 2003 250,000
March 31, 2004 1,000,000
June 30, 2004 1,000,000
September 30, 2004 1,000,000
December 31, 2004 1,000,000
March 31, 2005 7,500,000
June 30, 2005 7,500,000
September 30, 2005 7,500,000
December 31, 2005 7,500,000
Tranche B Maturity Date 60,000,000
(c) To the extent not previously paid, (i) all Tranche A Term Loans
shall be due and payable on the Tranche A Maturity Date and (ii) all Tranche B
Term Loans shall be due and payable on the Tranche B Maturity Date.
(d) If the initial aggregate amount of the Lenders' Term Commitments of
either Class exceeds the aggregate principal amount of Term Loans of such Class
that are made on the Effective Date, then the scheduled repayments of Term
Borrowings of such Class to be made pursuant to this Section shall be reduced
ratably by an aggregate amount equal to such excess. Any prepayment of a Term
Borrowing of either Class shall be applied to reduce the subsequent scheduled
repayments of the Term Borrowings of such Class to be made pursuant to this
Section ratably, provided that any prepayment made pursuant to Section 2.11(a)
shall be applied to reduce the subsequent scheduled repayments of the Term
Borrowings of such Class to be made pursuant to this Section in the order of
maturity and provided further that any prepayment made pursuant to Section
2.11(d) shall be applied to reduce the subsequent scheduled repayments of the
Term Borrowings of such Class to be made pursuant to this Section in the
inverse order of maturity.
(e) Prior to any repayment of any Term Borrowings of either Class
hereunder, the Borrower shall select the Borrowing or Borrowings of the
applicable Class to be repaid and shall notify the Administrative Agent by
telephone (confirmed by telecopy) of such selection not later than 11:00 a.m.,
New York City time, three Business Days before the scheduled date
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of such repayment, provided that each repayment of Term Borrowings of either
Class shall be applied to repay any outstanding ABR Term Borrowings of such
Class before any other Borrowings of such Class. Each repayment of a Borrowing
shall be applied ratably to the Loans included in the repaid Borrowing.
Repayments of Term Borrowings shall be accompanied by accrued interest on the
amount repaid.
SECTION 2.11. Prepayment of Loans. (a) The Borrower shall have the
right at any time and from time to time to prepay any Borrowing in whole or in
part, subject to the requirements of this Section.
(b) In the event and on each occasion that any Net Proceeds are
received by or on behalf of the Borrower or any Subsidiary in respect of any
Prepayment Event described in paragraph (a) or (b) of the definition of the
term "Prepayment Event", the Borrower shall, immediately after such Net
Proceeds are received, prepay Term Borrowings in an aggregate amount equal to
such Net Proceeds, provided that, if the Borrower shall deliver a certificate
of a Financial Officer to the Administrative Agent at the time of any
Prepayment Event described in paragraph (a) of the definition of the term
"Prepayment Event", setting forth the Borrower's intent to reinvest the
proceeds of such sale, transfer or other disposition in other assets of the
business of the Borrower and the Subsidiaries within 270 days of receipt of
such proceeds and no Default shall have occurred and shall be continuing at the
time of such certificate or at the proposed time of the application of such
proceeds, such proceeds shall not constitute Net Proceeds, except to the extent
not so used within such 270-day period, at which time such proceeds shall be
deemed to be Net Proceeds.
(c) In the event and on each occasion that any Net Proceeds are
received by or on behalf of the Borrower or any Subsidiary in respect of any
Prepayment Event described in paragraph (c) of the definition of the term
"Prepayment Event", the Borrower shall, immediately after such Net Proceeds are
received, prepay Term Borrowings in an aggregate amount equal to 50% of such
Net Proceeds.
(d) In the event and on each occasion that any Net Proceeds are
received by or on behalf of the Borrower or any Subsidiary in respect of any
Prepayment Event described in paragraph (d) of the definition of the term
"Prepayment Event", the Borrower shall, immediately after such Net Proceeds are
received, prepay Term Borrowings in an aggregate amount equal to such Net
Proceeds.
(e) Following the end of each fiscal year of the Borrower, commencing
with the fiscal year ending December 31, 1998, the Borrower shall prepay Term
Borrowings in an aggregate amount equal to 75% of Excess Cash Flow for such
fiscal year. Each prepayment pursuant to this paragraph shall be made on or
before the date that is three days after the date on which financial statements
are delivered pursuant to Section 5.01 with respect to the fiscal year for
which Excess Cash Flow is being calculated (and in any event within 90 days
after the end of such fiscal year).
(f) The Borrower shall repay or prepay Revolving Borrowings and shall
refrain from making additional Revolving Borrowings to the extent necessary in
order that there shall be three periods (each of which shall be for at least 14
consecutive days) in each fiscal year during which the Revolving Exposure shall
not exceed $20,000,000 (each such period, a
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"Clean-Down Period"); provided, however, that the foregoing provisions shall
not (i) preclude any Revolving Borrowings contemplated by Section 2.05(e)
during any Clean-Down Period so long as the proceeds of such Revolving
Borrowings are promptly paid by the Administrative Agent to the Issuing Bank in
respect of amounts outstanding under any LC Disbursement or (ii) require any
reduction of the LC Exposure.
(g) Prior to any optional or mandatory prepayment of Borrowings
hereunder, the Borrower shall select the Borrowing or Borrowings to be prepaid
and shall specify such selection in the notice of such prepayment pursuant to
paragraph (h) of this Section, provided that each prepayment of Borrowings of
any Class shall be applied to prepay ABR Borrowings of such Class before any
other Borrowings of such Class. In the event of any optional or mandatory
prepayment of Term Borrowings made at a time when Term Borrowings of both
Classes remain outstanding, the Borrower shall select Term Borrowings to be
prepaid so that the aggregate amount of such prepayment is allocated between
the Tranche A Term Borrowings and Tranche B Term Borrowings pro rata based on
the aggregate principal amount of outstanding Borrowings of each such Class (a
"Pro Rata Allocation"), provided that if such prepayment is a mandatory
prepayment pursuant to paragraph (b), (c), (d) or (e) of this Section, any
Tranche B Lender may elect, to the extent Tranche A Term Loans remain
outstanding on the prepayment date, by notice to the Administrative Agent by
telephone (confirmed by telecopy) at least one Business Day prior to the
prepayment date, to decline all or any portion of any prepayment of its Tranche
B Term Loans pursuant to this Section, in which case the aggregate amount of
the prepayment that would have been applied to prepay Tranche B Term Borrowings
but was so declined shall be applied to prepay Tranche A Term Borrowings and
provided further that if such prepayment is a voluntary prepayment pursuant to
paragraph (a) of this Section, the Borrower may, in its sole discretion, (i)
select Term Borrowings to be prepaid so that the amount of such prepayment
allocated to the Tranche A Term Borrowings is greater than the amount that
would be allocated to the Tranche A Term Borrowings under a Pro Rata Allocation
and (ii) elect, by prior written notice given to the Administrative Agent and
the Tranche B Lenders, to afford the Tranche B Lenders the right to decline to
accept such prepayment, in which case the Tranche B Lenders will be entitled to
decline all or any portion of such prepayment to the same extent, and subject
to the same procedures that are applicable to mandatory prepayments.
(h) The Borrower shall notify the Administrative Agent (and, in the
case of prepayment of a Swingline Loan, the Swingline Lender) by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of prepayment, (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time,
one Business Day before the date of prepayment or (iii) in the case of
prepayment of a Swingline Loan, not later than 12:00 noon, New York City time,
on the date of prepayment. Each such notice shall be irrevocable and shall
specify the prepayment date, the principal amount of each Borrowing or portion
thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably
detailed calculation of the amount of such prepayment, provided that, if a
notice of optional prepayment is given in connection with a conditional notice
of termination of the Revolving Commitments as contemplated by Section 2.08,
then such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.08. Promptly following receipt of any
such notice (other than a notice relating solely to Swingline Loans), the
Administrative Agent shall advise the Lenders of the contents thereof.
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Each partial prepayment of any Borrowing shall be in an amount that would be
permitted in the case of an advance of a Borrowing of the same Type as provided
in Section 2.02, except as necessary to apply fully the required amount of a
mandatory prepayment. Subject to Section 2.11(g), each prepayment of a
Borrowing shall be applied ratably to the Loans included in the prepaid
Borrowing. Prepayments shall be accompanied by accrued interest to the extent
required by Section 2.13.
SECTION 2.12. Fees. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee, which
shall accrue at the Applicable Rate on the average daily unused amount of the
Revolving Commitment of such Lender during the period from and including the
Effective Date to but excluding the date on which such Commitment terminates.
Accrued commitment fees shall be payable in arrears on the last day of March,
June, September and December of each year and on the date on which the
Revolving Commitments terminate, commencing on the first such date to occur
after the date hereof. All commitment fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). For purposes of
computing commitment fees with respect to Revolving Commitments, a Revolving
Commitment of a Lender shall be deemed to be used to the extent of the
outstanding Revolving Loans and LC Exposure of such Lender (and the Swingline
Exposure of such Lender shall be disregarded for such purpose).
(b) The Borrower agrees to pay (i) to the Administrative Agent for the
account of each Revolving Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Rate as interest on Eurodollar Revolving Loans on the average daily amount of
such Lender's LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date on which such Lender's
Revolving Commitment terminates and the date on which such Lender ceases to
have any LC Exposure, and (ii) to the Issuing Bank a fronting fee which shall
accrue at the rate of 1/4 of 1% per annum on the average daily amount of the LC
Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective Date to but
excluding the later of the date of termination of the Revolving Commitments and
the date on which there ceases to be any LC Exposure, as well as the Issuing
Bank's standard fees with respect to the issuance, amendment, renewal or
extension of any Letter of Credit or processing of drawings thereunder.
Participation fees and fronting fees accrued through and including the last day
of March, June, September and December of each year shall be payable on the
third Business Day following such last day, commencing on the first such date
to occur after the Effective Date, provided that all such fees shall be payable
on the date on which the Revolving Commitments terminate and any such fees
accruing after the date on which the Revolving Commitments terminate shall be
payable on demand. Any other fees payable to the Issuing Bank pursuant to this
paragraph shall be payable within 10 days after demand. All participation fees
and fronting fees shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed (including the first day
but excluding the last day).
(c) The Borrower agrees to pay to the Administrative Agent, for its own
account, fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Administrative Agent.
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(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
commitment fees and participation fees, to the Lenders entitled thereto. Fees
paid shall not be refundable under any circumstances.
SECTION 2.13. Interest. (a) The Loans comprising each ABR Borrowing
(including each Swingline Loan) shall bear interest at the Alternate Base Rate
plus the Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear interest
at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Rate.
(c) Notwithstanding the foregoing, if any principal of or interest on
any Loan or any fee or other amount payable by the Borrower hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus
the rate otherwise applicable to such Loan as provided in the preceding
paragraphs of this Section or (ii) in the case of any other amount, 2% plus the
rate applicable to ABR Revolving Loans as provided in paragraph (a) of this
Section.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and, in the case of Revolving Loans, upon
termination of the Revolving Commitments, provided that (i) interest accrued
pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in
the event of any repayment or prepayment of any Loan (other than a prepayment
of an ABR Revolving Loan prior to the end of the Revolving Availability
Period), accrued interest on the principal amount repaid or prepaid shall be
payable on the date of such repayment or prepayment and (iii) in the event of
any conversion of any Eurodollar Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a year of
360 days, except that interest computed by reference to the Alternate Base Rate
at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate
or Adjusted LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.14. Alternate Rate of Interest. If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining the Adjusted LIBO Rate for such
Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders
that the Adjusted LIBO Rate for such Interest Period will not adequately
and fairly reflect the
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cost to such Lenders (or Lender) of making or maintaining their Loans
(or its Loan) included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
SECTION 2.15. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing
Bank; or
(ii) impose on any Lender or the Issuing Bank or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit
or to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts (on an after-tax basis) as will compensate such
Lender or the Issuing Bank, as the case may be, for such additional costs
incurred or reduction suffered.
(b) If any Lender or the Issuing Bank determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the
rate of return on such Lender's or the Issuing Bank's capital or on the capital
of such Lender's or the Issuing Bank's holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in
Letters of Credit held by, such Lender, or the Letters of Credit issued by the
Issuing Bank, to a level below that which such Lender or the Issuing Bank or
such Lender's or the Issuing Bank's holding company could have achieved but for
such Change in Law (taking into consideration such Lender's or the Issuing
Bank's policies and the policies of such Lender's or the Issuing Bank's holding
company with respect to capital adequacy), then from time to time the Borrower
will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts (on an after-tax basis) as will compensate such
Lender or the Issuing Bank or such Lender's or the Issuing Bank's holding
company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or
its holding company, as the case may be, as specified in paragraph (a) or (b)
of this Section shall be delivered to the Borrower
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and shall be conclusive absent manifest error. The Borrower shall pay such
Lender or the Issuing Bank, as the case may be, the amount shown as due on any
such certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation, provided
that the Borrower shall not be required to compensate a Lender or the Issuing
Bank pursuant to this Section for any increased costs or reductions incurred
more than 270 days prior to the date that such Lender or the Issuing Bank, as
the case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor and provided further that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the 270-day period referred to above shall be extended to include the
period of retroactive effect thereof.
SECTION 2.16. Break Funding Payments. In the event of (a) the payment
of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Revolving Loan or Term Loan on the date specified in any
notice delivered pursuant hereto (regardless of whether such notice may be
revoked under Section 2.11(h) and is revoked in accordance therewith), or (d)
the assignment of any Eurodollar Loan other than on the last day of the
Interest Period applicable thereto as a result of a request by the Borrower
pursuant to Section 2.19, then, in any such event, the Borrower shall
compensate each Lender for the loss, cost and expense attributable to such
event. In the case of a Eurodollar Loan, such loss, cost or expense to any
Lender shall be deemed to include an amount determined by such Lender to be the
excess, if any, of (i) the amount of interest that would have accrued on the
principal amount of such Loan had such event not occurred, at the Adjusted LIBO
Rate that would have been applicable to such Loan, for the period from the date
of such event to the last day of the then current Interest Period therefor (or,
in the case of a failure to borrow, convert or continue, for the period that
would have been the Interest Period for such Loan), over (ii) the amount of
interest that would accrue on such principal amount for such period at the
interest rate that such Lender would bid were it to bid, at the commencement of
such period, for dollar deposits of a comparable amount and period from other
banks in the Eurodollar market. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.
SECTION 2.17. Taxes. (a) Any and all payments by or on account of any
obligation of the Borrower hereunder or under any other Loan Document shall be
made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes, provided that if the Borrower shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent, Lender or Issuing Bank (as the case may be) receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall
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make such deductions and (iii) the Borrower shall pay the full amount deducted
to the relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent, each Lender
and the Issuing Bank, within 10 days after written demand therefor, for the
full amount of any Indemnified Taxes or Other Taxes paid by the Administrative
Agent, such Lender or the Issuing Bank, as the case may be, on or with respect
to any payment by or on account of any obligation of the Borrower hereunder or
under any other Loan Document (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
and any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability
delivered to the Borrower by a Lender or the Issuing Bank, or by the
Administrative Agent on its own behalf or on behalf of a Lender or the Issuing
Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy
of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement, shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed
by applicable law or reasonably requested by the Borrower as will permit such
payments to be made without withholding or at a reduced rate. Without
limitation of the foregoing, properly completed and executed copies of United
States Internal Revenue Service Form W-8 (or successor form) certifying to such
Lender's entitlement to a complete exemption from United States withholding tax
on payments of interest to be made under this Agreement and under any note
delivered to such Lender, together with (i) a certificate to the effect that
such Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the
Code and (ii) such other documentation prescribed by applicable law or
reasonably requested by the Borrower, shall satisfy the requirements of this
Section 2.17(e) with respect to any Lender that is not a "bank" within the
meaning of Section 881(c)(3)(A) of the Code.
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-
Offs. (a) The Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest,
fees or reimbursement of LC Disbursements, or of amounts payable under Section
2.15, 2.16 or 2.17, or otherwise) prior to 12:00 noon, New York City time, on
the date when due, in immediately available funds, without set-off or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day
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for purposes of calculating interest thereon. All such payments shall be made
to the Administrative Agent c/o The Loan and Agency Service Group at its
offices at One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
except payments to be made directly to the Issuing Bank or Swingline Lender as
expressly provided herein and except that payments pursuant to Sections 2.15,
2.16, 2.17 and 9.03 shall be made directly to the Persons entitled thereto and
payments pursuant to other Loan Documents shall be made to the Persons
specified therein. The Administrative Agent shall distribute any such payments
received by it for the account of any other Person to the appropriate recipient
promptly following receipt thereof. If any payment under any Loan Document
shall be due on a day that is not a Business Day, the date for payment shall be
extended to the next succeeding Business Day, and, in the case of any payment
accruing interest, interest thereon shall be payable for the period of such
extension. All payments under each Loan Document shall be made in dollars.
(b) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be
applied (i) first, towards payment of interest and fees then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
interest and fees then due to such parties, and (ii) second, towards payment of
principal and unreimbursed LC Disbursements then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of principal and
unreimbursed LC Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans, Term Loans or participations in LC
Disbursements or Swingline Loans resulting in such Lender receiving payment of
a greater proportion of the aggregate amount of its Revolving Loans, Term Loans
and participations in LC Disbursements and Swingline Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Revolving Loans, Term Loans and participations in LC
Disbursements and Swingline Loans of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Revolving Loans, Term Loans and participations in LC
Disbursements and Swingline Loans, provided that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment
made by the Borrower pursuant to and in accordance with the express terms of
this Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to the Borrower,
any Subsidiary or any Affiliate thereof (as to which the provisions of this
paragraph shall apply). The Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation.
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(d) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Bank hereunder that the
Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders or the Issuing
Bank, as the case may be, the amount due. In such event, if the Borrower has
not in fact made such payment, then each of the Lenders or the Issuing Bank, as
the case may be, severally agrees to repay to the Administrative Agent
forthwith on demand the amount so distributed to such Lender or Issuing Bank
with interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Administrative
Agent, at the Federal Funds Effective Rate or, if such Rate is unavailable or
if such Rate is insufficient to provide adequate compensation to the
Administrative Agent, a rate reasonably determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made by
it pursuant to Section 2.04(c), 2.05(d) or (e), 2.06(b), 2.18(d) or 9.03(c),
then the Administrative Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender's
obligations under such Sections until all such unsatisfied obligations are
fully paid.
SECTION 2.19. Mitigation Obligations; Replacement of Lenders. (a) If
any Lender requests compensation under Section 2.15, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the
reasonable judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, as the
case may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.15, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement
to an assignee that shall assume such obligations (which assignee may be
another Lender, if a Lender accepts such assignment), provided that (i) the
Borrower shall have received the prior written consent of the Administrative
Agent (and, if a Revolving Commitment is being assigned, the Issuing Bank and
Swingline Lender), which consent shall not unreasonably be withheld, (ii) such
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and participations in LC Disbursements and Swingline
Loans, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder, from the assignee (to the extent of such outstanding principal
and accrued interest and fees) or the Borrower (in the case of all other
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amounts) and (iii) in the case of any such assignment resulting from a claim
for compensation under Section 2.15 or payments required to be made pursuant to
Section 2.17, such assignment will result in a reduction in such compensation
or payments. A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply.
ARTICLE III
Representations and Warranties
Each of the Initial Borrower (with respect to Sections 3.01, 3.02, 3.03,
3.06, 3.09, 3.12, 3.18 and 3.19 only and with respect to itself and not the
Borrower and the Subsidiaries) and the Borrower represents and warrants to the
Lenders that:
SECTION 3.01. Organization; Powers. Each of the Initial Borrower, the
Borrower and the Subsidiaries is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required.
SECTION 3.02. Authorization; Enforceability. The Transactions to be
entered into by each Initial Loan Party are within such Initial Loan Party's
corporate or partnership powers and have been duly authorized by all necessary
corporate or partnership and, if required, stockholder or partner action. This
Agreement has been duly executed and delivered by or on behalf of each of the
Initial Borrower and the Borrower and constitutes, and each other Acquisition
Document to which any Loan Party is to be a party, when executed and delivered
by such Loan Party, will constitute, a legal, valid and binding obligation of
the Initial Borrower, the Borrower or such Loan Party (as the case may be),
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors'
rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions
(a) do not require any consent or approval of, registration or filing with, or
any other action by, any Governmental Authority, except such as have been
obtained or made and are in full force and effect and except filings necessary
to perfect Liens created under the Loan Documents, (b) will not violate any
applicable law or regulation or the charter, by-laws or other organizational
documents of the Initial Borrower, the Borrower or any of the Subsidiaries or
any order of any Governmental Authority, (c) except as set forth on Schedule
3.03, will not violate or result in a default under any indenture, agreement
(including any Acquisition Document) or other instrument binding upon the
Initial Borrower, the Borrower or any of the Subsidiaries or its assets, or
give rise to a right thereunder to require any payment to be made by the
Initial Borrower, the Borrower or any of the Subsidiaries, and (d) will not
result in the creation or imposition of any Lien on any asset of the Initial
Borrower, the Borrower or any of the Subsidiaries, except Liens created under
the Loan Documents.
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SECTION 3.04. Financial Condition; No Material Adverse Change. (a) The
Borrower has heretofore furnished to the Lenders its balance sheet and related
statements of income, partners' equity and cash flows (i) as of and for the two
fiscal years ended December 31, 1996, reported on by Price Waterhouse LLP,
independent public accountants, and (ii) as of and for the fiscal quarter and
the portion of the fiscal year ended June 30, 1997, certified by its chief
financial officer. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of
the Borrower as of such dates and for such periods in accordance with GAAP,
subject to normal year-end audit adjustments and the absence of footnotes in
the case of the statements referred to in clause (ii) above.
(b) The Borrower has heretofore furnished to the Lenders its pro forma
consolidated balance sheet as of June 30, 1997, prepared giving effect to the
Transactions as if the Transactions had occurred on such date. Such pro forma
consolidated balance sheet (i) has been prepared in good faith based on the
same assumptions used to prepare the pro forma financial statements included in
the Information Memorandum (which assumptions are believed by the Borrower to
be reasonable), (ii) is based on the best information available to the Borrower
after due inquiry, (iii) accurately reflects all adjustments necessary to give
effect to the Transactions and (iv) presents fairly, in all material respects,
the pro forma financial position of the Borrower and its consolidated
Subsidiaries as of June 30, 1997 as if the Transactions had occurred on such
date.
(c) Except as disclosed in the financial statements referred to above
or the notes thereto or in the Information Memorandum and except for the
Disclosed Matters, after giving effect to the Transactions, neither the
Borrower nor any of the Subsidiaries has, as of the Effective Date, any
material contingent liabilities, unusual long-term commitments or unrealized
losses.
(d) Since December 31, 1996, there has been no material adverse change
in the business, assets, liabilities (including contingent liabilities),
operations, condition (financial or otherwise), prospects or material
agreements of the Borrower and the Subsidiaries, taken as a whole.
SECTION 3.05. Properties. (a) Each of the Borrower and the
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to its business (including its Mortgaged
Properties), except for (i) minor defects in title that do not interfere with
its ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes and (ii) the Borrower's leasehold
interest in the property set forth on Schedule 3.05(a) that the Borrower or
such Subsidiary occupies as a hold-over tenant.
(b) Each of the Borrower and the Subsidiaries owns, or is licensed to
use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, and the use thereof by the Borrower and the
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
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(c) Schedule 3.05(c) sets forth the address of each real property that
is owned or leased by the Borrower or any of the Subsidiaries as of the
Effective Date after giving effect to the Transactions.
(d) As of the Effective Date, neither the Borrower nor any of the
Subsidiaries has received notice of, or has knowledge of, any pending or
contemplated condemnation proceeding affecting any Mortgaged Property or any
sale or disposition thereof in lieu of condemnation. Neither any Mortgaged
Property nor any interest therein is subject to any right of first refusal,
option or other contractual right to purchase such Mortgaged Property or
interest therein.
SECTION 3.06. Litigation and Environmental Matters. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Initial Borrower or the
Borrower, threatened against or affecting the Initial Borrower, the Borrower or
any of the Subsidiaries (i) as to which there is a reasonable possibility of an
adverse determination and that, if adversely determined, could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect (other than the Disclosed Matters) or (ii) that involve any of the
Acquisition Documents or the Transactions.
(b) Since the date of this Agreement, there has been no change in the
status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
SECTION 3.07. Compliance with Laws and Agreements. (a) Each of the
Borrower and the Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.
(b) Except as set forth on Schedule 3.07, each of the Borrower
and the Subsidiaries is in compliance with the laws, regulations, restrictions
and ordinances of any Governmental Authority applicable to the Mortgaged
Property, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.
SECTION 3.08. Environmental Matters. (a) Each of the Borrower and the
Subsidiaries has obtained all Environmental Permits with respect to the
facilities and properties owned, leased or operated by the Initial Borrower,
the Borrower and the Subsidiaries (the "Properties") and the Borrower and the
Subsidiaries are in compliance with all Environmental Laws and all
Environmental Permits except to the extent that such failure to obtain any
Environmental Permits and noncompliance with Environmental Laws could not
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect.
(b) There have been no Releases or to the best knowledge of any of the
Borrower or the Subsidiaries, threatened Releases at, from, under or, proximate
to the Properties or otherwise in connection with the operations of the
Borrower or the Subsidiaries, which
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Releases or threatened Releases could reasonably be expected, individually or
in the aggregate, to result in a Material Adverse Effect.
(c) None of the Borrower or any of the Subsidiaries has received any
notice of an Environmental Liability in connection with (i) the Properties,
(ii) the operations of the Borrower or the Subsidiaries or (iii) any Person
whose liabilities for environmental matters, the Borrower or the Subsidiaries
has retained or assumed, in whole or in part, contractually, by operation of
law or otherwise that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect, nor, to the best knowledge of
the Borrower and the Subsidiaries, is any such Environmental Liability being
threatened.
(d) Hazardous Materials have not been transported, generated, treated,
stored or disposed of, from, at, on or under any of the Properties in violation
of, or in any manner or to a location that could give rise to liability under,
any Environmental Law, except to the extent that such violations or
liabilities, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect.
SECTION 3.09. Investment and Holding Company Status. Neither the
Initial Borrower, the Borrower nor any of the Subsidiaries is (a) an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940 or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
SECTION 3.10. Taxes. Each of the Borrower and the Subsidiaries has
timely filed or caused to be filed all Tax returns and reports required to have
been filed and has paid or caused to be paid all Taxes required to have been
paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which the Borrower or such Subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect. Each of the Borrower and SFG Management is, and all
times has been, qualified as a partnership for Federal income tax purposes.
SECTION 3.11. ERISA. (a) No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events
for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect. The present value of all
accumulated benefit obligations under each Plan, based on the assumptions
presently used for purposes of Statement of Financial Accounting Standards No.
87 (the "FAS 87 Assumptions" and applying in all cases the interest rate
applicable as of the Effective Date), did not, as of the date of the most
recent financial statements reflecting such amounts, exceed by more than
$1,000,000 the fair market value of the assets of such Plan, and the present
value of all accumulated benefit obligations of all underfunded Plans based on
the FAS 87 Assumptions did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $5,000,000 the fair
market value of the assets of all such underfunded Plans. The representations
and warranties contained in this Section 3.11(a) with respect to ERISA Events
involving ERISA Affiliates and with respect to Plans of ERISA Affiliates are
made to the knowledge of the Borrower.
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(b) Upon the consummation of the Transactions contemplated by the
Acquisition Documents, (i) the present value of all accumulated benefit
obligations of all Plans based on the FAS 87 Assumptions will not exceed by
more than $1,000,000 the fair market value of the assets of all such Plans and
(ii) the annual contribution obligations of the Borrower and the Subsidiaries
to or in respect of such Plans will not increase by more than $500,000 for each
fiscal year until December 31, 2000, over the annual contribution obligations
of the Borrower and the Subsidiaries in effect immediately prior to the
consummation of the Transactions (assuming, for this purpose, that (A) the fair
market value of the assets transferred to the Plans upon consummation of the
Transactions contemplated by the Acquisition Documents do not decrease below
the fair market value of the allocable portion of the assets held under the
Plans from which assets are transferred to the Plans as of June 30, 1997 and
(B) the annual investment return on the Plans' assets from and after June 30,
1997 is at least 7%). The Borrower has no knowledge of any adverse change in
the fair market value of such assets since June 30, 1997.
SECTION 3.12. Disclosure. The Borrower has disclosed to the Lenders
all agreements, instruments and corporate, partnership or other restrictions to
which the Borrower or any of the Subsidiaries is subject, and all other matters
known to any of them, that, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect. Neither the Information
Memorandum nor any of the other reports, financial statements, certificates or
other information furnished by or on behalf of any Initial Loan Party to the
Administrative Agent or any Lender in connection with the negotiation of this
Agreement or any other Acquisition Document or delivered hereunder or
thereunder (as modified or supplemented by other information so furnished prior
to the time when this representation is being made or deemed made) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, provided that, with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.
SECTION 3.13. Subsidiaries. Schedule 3.13 sets forth the name of, and
the ownership interest of the Borrower in, each Subsidiary and identifies each
Subsidiary that is a Subsidiary Loan Party, in each case as of the Effective
Date.
SECTION 3.14. Insurance. Schedule 3.14 sets forth a description of all
insurance maintained by or on behalf of the Borrower and the Subsidiaries as of
the Effective Date. As of the Effective Date, all premiums in respect of such
insurance have been paid.
SECTION 3.15. Labor Matters. As of the Effective Date, there are no
strikes, lockouts or slowdowns against the Borrower or any Subsidiary pending
or, to the knowledge of the Borrower, threatened. The hours worked by and
payments made to employees of the Borrower and the Subsidiaries have not been
in violation of the Fair Labor Standards Act or any other applicable Federal,
state, local or foreign law dealing with such matters. All payments due from
the Borrower or any Subsidiary, or for which any claim may be made against the
Borrower or any Subsidiary, on account of wages and employee health and welfare
insurance and other benefits, have been paid or accrued as a liability on the
books of the Borrower or such Subsidiary. The consummation of the Transactions
will not give rise to any
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right of termination or right of renegotiation on the part of any union under
any collective bargaining agreement to which the Borrower or any Subsidiary is
bound.
SECTION 3.16. Solvency. Immediately after the consummation of the
Transactions to occur on the Effective Date and immediately following the
making of each Loan made on the Effective Date and after giving effect to the
application of the proceeds of such Loans, (a) the fair value of the assets of
each Loan Party, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair saleable value of
the property of each Loan Party will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) each Loan Party will be able to pay its debts
and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) each Loan Party will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the Effective Date.
SECTION 3.17. Security Documents. (a) The Pledge Agreement is
effective to create in favor of the Administrative Agent, for the ratable
benefit of the Secured Parties, a legal, valid and enforceable security
interest in the Collateral (as defined in the Pledge Agreement) and, when the
Collateral is delivered to the Administrative Agent and duly endorsed, the
Pledge Agreement shall constitute a fully perfected first priority Lien on, and
security interest in, all right, title and interest of the pledgor thereunder
in such Collateral, in each case prior and superior in right to any other
person, other than with respect to Liens that are permitted by Section 6.02.
The pledge of the Collateral will not violate any provision of the Partnership
Agreement or the SFG Management Agreement, and no provision of such Agreements
would by its terms restrict or limit the right of the Administrative Agent to
sell, transfer or otherwise dispose of the Collateral.
(b) The Security Agreement is effective to create in favor of the
Administrative Agent, for the ratable benefit of the Secured Parties, a legal,
valid and enforceable security interest in the Collateral (as defined in the
Security Agreement) and, when financing statements in appropriate form are
filed in the offices specified on Schedule 6 to the Perfection Certificate, the
Security Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the grantors thereunder in such
Collateral (other than the Intellectual Property (as defined in the Security
Agreement in which a security interest may be perfected by filing, recording or
registering a security agreement, financing statement or analogous documents in
the United States Patent and Trademark Office or the United States Copyright
Office, as applicable)), in each case prior and superior in right to any other
person, other than with respect to Liens that are permitted by Section 6.02.
(c) When the Security Agreement is filed in the United States Patent
and Trademark Office and the United States Copyright Office, the Security
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the Loan Parties in the Intellectual Property
(as defined in the Security Agreement) in which a security interest may be
perfected by filing, recording or registering a security agreement, financing
statement or analogous document in the United States Patent and Trademark
Office or the United States Copyright Office, as applicable, in each case prior
and superior in right to any other person (it being understood that subsequent
recordings in the United States Patent and Trademark Xxxxxx
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xxx xxx Xxxxxx Xxxxxx Copyright Office may be necessary to perfect a lien on
registered trademarks, trademark applications and copyrights acquired by the
Loan Parties after the date hereof).
(d) The Mortgages are effective to create, subject to the exceptions
listed in each title insurance policy covering such Mortgage, in favor of the
Administrative Agent, for the ratable benefit of the Secured Parties, a legal,
valid and enforceable Lien on all of the Loan Parties' right, title and
interest in and to the Mortgaged Properties thereunder and the proceeds
thereof, and when the Mortgages are filed in the offices specified on Schedules
1.01(b) and 1.01(c), the Mortgages shall constitute a Lien on, and security
interest in, all right, title and interest of the Loan Parties in such
Mortgaged Properties and the proceeds thereof, in each case prior and superior
in right to any other person, other than with respect to the rights of persons
pursuant to Liens expressly permitted by Section 6.02.
SECTION 3.18. Federal Reserve Regulations. (a) Neither the Borrower nor
any of the Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of buying or
carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is
inconsistent with, the provisions of the Regulations of the Board, including
Regulation G, U or X.
SECTION 3.19. Ownership. The partners of the Borrower and the
respective equity interests of such partners in the Borrower are as of the
Effective Date as set forth on Schedule 3.19. The members of the General
Partner and the respective equity interests of such members in the General
Partner are as of the Effective Date as set forth on Schedule 3.19.
SECTION 3.20. Mortgaged Properties. (a) The Borrower and the
Subsidiaries have good and marketable title to an indefeasible fee estate in
each Mortgaged Property set forth on Schedule 1.01(b), subject only to Liens
permitted by Section 6.02 and the exceptions and encumbrances referred to on
Schedule B to the title insurance policy being issued to insure the lien of
each Mortgage. The Borrower and the Subsidiaries are lawfully seized and in
possession of, and have a valid and subsisting leasehold estate in, that
portion of the Mortgaged Property set forth on Schedule 1.01(c) and demised
under the applicable lease, subject only to Liens permitted by Section 6.02.
Such Liens, exceptions and encumbrances do not materially interfere with the
current use, enjoyment or operation of the Mortgaged Properties.
(b) Each Mortgaged Property is served by all water, gas, electric,
septic, storm and sanitary sewage facilities and other utility facilities
sufficient to serve the current use and operation of the Mortgaged Property and
the Improvements (as defined in the Mortgage) are located within the Mortgaged
Property. There is vehicular access to each Mortgaged Property that is
provided by either a public right-of-way abutting and contiguous with the Land
(as defined in the Mortgage) or valid recorded unsubordinated easements.
(c) Without the written consent of the Administrative Agent, no
Improvements will be materially altered or demolished or removed in whole or in
part by the Borrower or any of the Subsidiaries unless such alteration,
demolition or removal will not (i) materially diminish the
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utility of the Mortgaged Property for the operation of the business conducted
by the Borrower or any of the Subsidiaries or (ii) result in a reduction of the
value of the Mortgaged Property below the value immediately preceding such
alteration, demolition or removal. Neither the Borrower nor any of the
Subsidiaries will erect any additions to the existing Improvements or other
structures on any Mortgaged Property that will materially interfere with the
operations conducted thereon on the date hereof, without the written consent of
the Administrative Agent. Neither the Borrower nor any of the Subsidiaries
will commit or suffer waste with respect to the Mortgaged Properties. The
Borrower and the Subsidiaries will maintain and operate the Mortgaged
Properties in good repair, working order and condition, with the exception of
reasonable wear and tear.
SECTION 3.21. Leases. (a) Except as set forth on Schedule 3.21, there
are no Leases (as defined in each Mortgage) affecting a material portion of any
Mortgaged Property. Each Lease is in full force and effect, and, except as set
forth on Schedule 3.21, neither the Borrower nor any of the Subsidiaries has
given or received any uncured or unwaived notice of default with respect to any
material obligation under any Lease.
(b) Without the Administrative Agent's written consent, neither the
Borrower nor any of the Subsidiaries will modify, amend, terminate or consent
to the cancelation or surrender of any Lease or consent to an assignment of any
tenant's interest in any Lease or to a subletting thereof covering a material
portion of the Mortgaged Property if such modification, amendment, termination
or consent would be adverse in any material respect to the interests of the
Lenders, the value of the Mortgaged Property or the Lien created by the
Mortgage.
ARTICLE IV
Conditions
SECTION 4.01. Effective Date. The obligations of the Lenders to make
Loans and of the Issuing Bank to issue Letters of Credit hereunder (each, a
"Credit Event") shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have
received from each party hereto either (i) a counterpart of this
Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement.
(b) The Administrative Agent shall have received a favorable
written opinion (addressed to the Administrative Agent and the Lenders
and dated the Effective Date) of each of (i) Xxxxxxxxxxx & Price,
L.L.P., counsel for the Borrower, substantially in the form of Exhibit
B-1, (ii) Coudert Brothers, special counsel for the Borrower,
substantially in the form of Exhibit B-2, (iii) Xxxxx X. Xxxxxxx, Esq.,
special counsel for the Initial Borrower, substantially in the form of
Exhibit B-3, (iv) each local counsel listed on Schedule 4.01,
substantially in the form of Exhibit B-4, and (v) Xxxxxxxx, Xxxxxx &
Finger, Delaware counsel for the Borrower and the General Partner, in
form
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satisfactory to the Lenders, and, in the case of each such opinion
required by this paragraph, covering such other matters relating to the
Initial Loan Parties, the Acquisition Documents or the Transactions as
the Required Lenders shall reasonably request. Each of the Initial
Borrower and the Borrower hereby requests such counsel to deliver such
opinions.
(c) The Administrative Agent shall have received such documents
and certificates as the Administrative Agent or its counsel may
reasonably request relating to the organization, existence and good
standing (or equivalent) of each Initial Loan Party and the General
Partner, the authorization of the Transactions and any other legal
matters relating to the Initial Loan Parties, the Acquisition Documents
or the Transactions, all in form and substance satisfactory to the
Administrative Agent and its counsel.
(d) The Administrative Agent shall have received, with respect
to each of the Initial Borrower and the Borrower, a certificate, dated
the Effective Date and signed by the President, a Vice President or a
Financial Officer of each of the Initial Borrower and the Borrower,
respectively, confirming compliance with the conditions set forth in
Sections 4.02(a) and (b).
(e) The Administrative Agent shall have received all fees and
other amounts due and payable on or prior to the Effective Date,
including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by any Initial
Loan Party hereunder or under any other Loan Document.
(f) The Administrative Agent shall have received (i)
counterparts of the Pledge Agreement signed on behalf of Xx. Xxxx
Xxxxxxxx, the General Partner, the Borrower and each Subsidiary Loan
Party, (ii) stock certificates representing all the outstanding shares
of capital stock of each Subsidiary owned by or on behalf of the
Borrower as of the Effective Date after giving effect to the
Transactions (except that stock certificates representing shares of
common stock of a Foreign Subsidiary may be limited to 65% of the
outstanding shares of common stock of such Foreign Subsidiary), (iii)
any other relevant documentation relating to the transfer of all
outstanding partnership interests in the Borrower other than those
interests owned by or on behalf of Mid-Am or its subsidiaries, and (iv)
stock powers and instruments of transfer, endorsed in blank, with
respect to such stock certificates, interests and promissory notes, as
applicable. In connection with the Pledge Agreement, each of the
Borrower, the General Partner and Xx. Xxxx Xxxxxxxx shall have (A)
acknowledged the pledge of the partnership interests in the Borrower and
that the Lenders are not assuming any liability of the Borrower, the
General Partner or Xx. Xxxx Xxxxxxxx, as the case may be, as a result
thereof and (B) agreed not to amend the Partnership Agreement in any
manner that could cause the Lenders to assume or incur any such
liability.
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(g) The Administrative Agent shall have received counterparts of
the Security Agreement signed on behalf of the Borrower and each
Subsidiary Loan Party, together with the following:
(i) all documents and instruments, including Uniform
Commercial Code financing statements, required by law or
reasonably requested by the Administrative Agent to be filed,
registered or recorded to create or perfect the Liens intended to
be created under the Security Agreement; and
(ii) a completed Perfection Certificate dated the
Effective Date and signed by an executive officer or Financial
Officer of the Borrower, together with all attachments
contemplated thereby, including the results of a search of the
Uniform Commercial Code (or equivalent) filings made with respect
to the Loan Parties in the jurisdictions contemplated by the
Perfection Certificate and copies of the financing statements (or
similar documents) disclosed by such search and evidence
reasonably satisfactory to the Administrative Agent that the
Liens indicated by such financing statements (or similar
documents) are permitted by Section 6.02 or have been released.
(h) The Administrative Agent shall have received (i)
counterparts of a Mortgage with respect to each Mortgaged Property
executed on behalf of the record owner of such Mortgaged Property, (ii)
commitments to issue policies of title insurance issued by a nationally
recognized title insurance company, insuring the Lien of each such
Mortgage as a valid first Lien on the Mortgaged Property described
therein, free of any other Liens except as permitted by Section 6.02, in
form and substance reasonably acceptable to the Administrative Agent,
together with such endorsements, coinsurance and reinsurance as the
Administrative Agent or the Required Lenders may reasonably request and
(iii) such surveys and abstracts as may be required pursuant to such
Mortgages or as the Administrative Agent or the Required Lenders may
reasonably request.
(i) The Administrative Agent shall have received (i)
counterparts of the Guarantee Agreement executed on behalf of each
Subsidiary Loan Party and (ii) counterparts of the Indemnity,
Subrogation and Contribution Agreement executed on behalf of the
Borrower and each Subsidiary Loan Party and each of the Guarantee
Agreement and the Indemnity, Subrogation and Contribution Agreement
shall be in full force and effect.
(j) The Administrative Agent shall have received evidence
satisfactory to it that the insurance required by Section 5.07 is in
effect.
(k) The Borrower and/or SFG Capital shall have received gross
cash proceeds of not less than $150,000,000 from the issuance of the
Subordinated Debt in a public offering or in a Rule 144A private
placement. The terms and conditions of the Subordinated Debt (including
terms and conditions relating to the interest rate, fees, amortization,
maturity, subordination, covenants, events of default and remedies)
shall be reasonably satisfactory in all respects to the Lenders (it
being understood and agreed
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that the Subordinated Debt shall not mature prior to the tenth
anniversary of the Effective Date).
(l) The Lenders shall be reasonably satisfied with (i) terms of
the Acquisition Documents and any waivers or amendments thereto, (ii)
the partnership and legal structure and capitalization of the Borrower
and the Subsidiaries after giving effect to the Transactions and (iii)
all legal, tax and accounting matters relating to the Transactions.
(m) The Lenders shall be reasonably satisfied as to the amount
and nature of any Environmental Liabilities and employee health and
safety exposures to which the Borrower and the Subsidiaries may be
subject, and the plans of the Borrower with respect thereto, after
giving effect to the Transactions and the consummation of the other
transactions contemplated hereby.
(n) The Administrative Agent shall be reasonably satisfied with
the sufficiency of amounts available under this Agreement to meet the
ongoing working capital requirements of the Borrower and the
Subsidiaries following the Transactions and the consummation of the
other transactions contemplated hereby.
(o) All material consents and approvals required to be obtained
from and all registrations and filings with any Governmental Authority
or other Person in connection with the Acquisition and the other
Transactions shall have been obtained or made, all applicable waiting
periods and appeal periods shall have expired, in each case without the
imposition of any burdensome conditions and there shall be no action by
any Governmental Authority, actual or threatened, that has a reasonable
likelihood of restraining, preventing or imposing burdensome conditions
on the Transactions or the other transactions contemplated hereby. The
Acquisition and the Mid-Am Contribution shall have been, or
substantially simultaneously with the first Credit Event shall be,
consummated in accordance with the Acquisition Documents and applicable
law, without any amendment to or waiver of any material terms or
conditions of the Acquisition Documents not approved by the Lenders.
The Administrative Agent shall have received executed copies of the
Acquisition Documents and all certificates, opinions and other documents
delivered thereunder, certified by a Financial Officer as complete and
correct.
(p) The Lenders shall have received a pro forma consolidated
balance sheet of the Borrower as of the Effective Date, reflecting all
pro forma adjustments as if the Transactions had been consummated on
such date, and such pro forma consolidated balance sheet shall be
consistent in all material respects with the forecasts and other
information previously provided to the Lenders.
(q) After giving effect to the Transactions, the Borrower and
the Subsidiaries shall have outstanding no Indebtedness or preferred
interests other than (i) Indebtedness under the Loan Documents, (ii) the
New Preferred Interests, (iii) the Existing Preferred Interests, (iv)
the Subordinated Debt in an aggregate principal amount not to exceed
$150,000,000 and (v) other Indebtedness that is permitted under Section
6.01. The Lenders shall be reasonably satisfied in all respects with
the terms and conditions
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(including terms and conditions relating to interest or dividend rates,
fees, amortization, maturity, redemption, subordination, covenants,
events of default and remedies) of all Indebtedness and preferred
interests that will remain outstanding after giving effect to the
Transactions.
(r) The Administrative Agent shall have received a solvency
letter, in form and substance reasonably satisfactory to the
Administrative Agent, from an independent evaluation firm satisfactory
to the Administrative Agent, together with such other evidence
reasonably requested by the Lenders, with respect to the solvency of the
Loan Parties on a consolidated basis after giving effect to the
Transactions and the consummation of the other transactions contemplated
hereby.
(s) The Administrative Agent shall have received a Borrowing
Request executed by the Initial Borrower.
(t) There shall have been no material adverse change in the
business, assets, liabilities (including contingent liabilities),
operations, condition (financial or otherwise), prospects or material
agreements of the Borrower, the Subsidiaries or the Contributed Business
since December 31, 1996.
(u) The aggregate amount of fees and expenses (including
underwriting discounts and commissions) payable or otherwise borne by
the Borrower and the Subsidiaries in connection with the Transactions
shall not exceed $17,000,000.
(v) The Borrower shall have received net cash proceeds of not
less than $45,000,000 from the Capital Contribution prior to or
simultaneously with the first Credit Event.
(w) The New Preferred Interests shall have been issued or shall
be issued simultaneously with the first Credit Event in accordance with
applicable law and in accordance with the Partnership Agreement.
(x) The Lenders shall be reasonably satisfied in all respects
with the terms and conditions of the New Preferred Interests and the
Existing Preferred Interests.
(y) The Meadow Gold Trademark Acquisition and the Xxxxxx Dairies
Sale shall have been consummated or shall be consummated simultaneously
with the first Credit Event.
(z) The Equipment Sub-lease Documents shall have been executed
or shall be executed simultaneously with the consummation of the other
Transactions.
(aa) There shall be no litigation or administrative proceeding
that would reasonably be expected to have a material adverse effect on
the business, assets, liabilities, operations, properties, condition
(financial or otherwise), prospects or material agreements of or
relating to (i) the Borrower and the Subsidiaries, taken as a whole,
(ii) the Contributed Business, or (iii) the ability of the parties to
consummate the Transactions or the other transactions contemplated
hereby.
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(bb) The Lenders shall be reasonably satisfied in all respects
with (i) the tax position and the contingent tax and other liabilities
of the Borrower, the Subsidiaries and the Contributed Business, and (ii)
any tax sharing arrangements among the Borrower, the Subsidiaries or any
of their respective Affiliates after giving effect to the Transactions
and the other transactions contemplated hereby, and with the plans of
the Borrower with respect thereto.
(cc) The Administrative Agent shall be reasonably satisfied that
(i) the aggregate liability of the Borrower in respect of contributions
that the PBGC may require to be made to benefit plans that relate to the
Contributed Business will not exceed $5,000,000, (ii) no such
contributions (or payments in respect of such contributions) will be
required to be made by the Borrower prior to a date 90 days after the
Effective Date and (iii) the aggregate pension underfunding (which means
the excess of accumulated benefit obligations over the fair market value
of assets) based on the FAS 87 Assumptions being assumed by the Borrower
in connection with the acquisition of the Contributed Business by the
Borrower shall not exceed a present value of $5,000,000.
(dd) The Administrative Agent shall be reasonably satisfied with
any arrangements for the retention of existing management of the
Borrower and the Contributed Business after giving effect to the
Transactions.
(ee) The Administrative Agent shall have received such
information, satisfactory in form and substance to the Administrative
Agent, regarding the value of the real property, personal property and
other assets of the Borrower, the Subsidiaries, and the Contributed
Business after giving effect to the Transactions as shall be reasonably
requested by the Administrative Agent.
(ff) Substantially simultaneously with or prior to the first
Credit Event, (i) the Refinanced Indebtedness shall have been prepaid or
repaid in full, (ii) all commitments to lend under the Refinanced
Indebtedness shall have been permanently terminated, (iii) all
obligations under or relating to the Refinanced Indebtedness and all
security interests related thereto shall have been discharged and (iv)
the Administrative Agent shall have received satisfactory evidence of
such repayment, termination and discharge.
(gg) The Lenders shall have received (i) the audited balance
sheets and related statements of income, partners' equity and cash flows
of the Borrower as of and for the two fiscal years ended December 31,
1996, (ii) the audited balance sheets and related statements of income,
divisional equity and cash flows of Meadow Gold Dairy Operations as of
and for the two fiscal years ended December 31, 1996, (iii) the
unaudited balance sheet and related statement of income, partners'
equity and cash flows of the Borrower as of and for the six-month period
ended June 30, 1997, and the unaudited statement of income and cash
flows of the Borrower for the six-month period ended June 30, 1996, and
(iv) the unaudited balance sheet and related statement of income,
divisional equity and cash flows of Meadow Gold Dairy Operations as of
and for the six-month period ended June 30, 1997, and the unaudited
statement of income and cash flows of Meadow Gold Dairy Operations for
the six-month period ended June 30, 1996 (and in the case of clauses
(iii) and (iv), to the extent available, as of and
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for each month preceding the Effective Date since June 30, 1997), which
audited and unaudited financial statements shall be in a form and scope
satisfactory to the Lenders and shall not be materially inconsistent
with the financial statements and forecasts previously provided to the
Lenders.
(hh) The Administrative Agent shall have received (i) a
certificate of one Member of the General Partner dated the Effective
Date and certifying (A) that attached thereto is a true and complete
copy of the Partnership Agreement as amended and as in effect on the
Effective Date, (B) that the Partnership Agreement has not been amended
since the date of the last amendment thereto and (C) as to the
incumbency and specimen signature of each Member of the General Partner
executing this Agreement or any other document delivered in connection
herewith on behalf of the Borrower; (ii) a certificate of another Member
as to the incumbency and specimen signature of the Members executing the
certificate pursuant to clause (i) above; and (iii) such other documents
as any of the Administrative Agent, Lenders or counsel for the
Administrative Agent may reasonably request.
(ii) The Administrative Agent shall have received a duly
executed copy of the SFG Management Agreement, and the provisions of
such agreement shall be reasonably satisfactory in all respects to the
Lenders.
(jj) The Administrative Agent shall have received a duly
executed copy of the Certificate of Registration of Pledge in form
satisfactory to the Administrative Agent.
(kk) The Administrative Agent shall have received a duly
executed copy of a letter agreement by the Initial Borrower to the
Lenders relating to the prohibition of the creation of Liens on its
partnership interests in the Borrower.
The Administrative Agent shall notify the Initial Borrower, the Borrower and
the Lenders of the Effective Date, and such notice shall be conclusive and
binding. Notwithstanding the foregoing, the obligations of the Lenders to make
Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or
waived pursuant to Section 9.02) at or prior to 3:00 p.m., New York City time,
on September 18, 1997 (and, in the event such conditions are not so satisfied
or waived, the Commitments shall terminate at such time).
SECTION 4.02. Each Credit Event. The obligation of each Lender to make
a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue,
amend, renew or extend any Letter of Credit, is subject to the satisfaction of
the following conditions:
(a) The representations and warranties of the Initial Borrower
(with respect to the first Credit Event only) and each Loan Party set
forth in the Loan Documents shall be true and correct on and as of the
date of such Borrowing or the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable.
(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, no Default shall have occurred and be
continuing.
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Each Borrowing and each issuance, amendment, renewal or extension of a Letter
of Credit shall be deemed to constitute a representation and warranty by the
Initial Borrower (with respect to the first Credit Event only) and the Borrower
on the date thereof as to the matters specified in paragraphs (a) and (b) of
this Section.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the principal
of and interest on each Loan and all fees payable hereunder shall have been
paid in full and all Letters of Credit shall have expired or terminated and all
LC Disbursements shall have been reimbursed, each of the Initial Borrower (with
respect to Sections 5.11 and 5.13 only) and the Borrower covenants and agrees
with the Lenders that:
SECTION 5.01. Financial Statements and Other Information. The Borrower
will furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year of the
Borrower, its audited consolidated balance sheet and related statements
of income, partners' equity and cash flows as of the end of and for such
year, setting forth in each case in comparative form the figures for the
previous fiscal year, all reported on by Price Waterhouse LLP or other
independent public accountants of recognized national standing (without
a "going concern" or like qualification or exception and without any
qualification or exception as to the scope of such audit) to the effect
that such consolidated financial statements present fairly in all
material respects the financial condition and results of operations of
the Borrower and its consolidated Subsidiaries on a consolidated basis
in accordance with GAAP consistently applied;
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year of the Borrower, its consolidated
balance sheet and related statements of income, partners' equity and
cash flows as of the end of and for such fiscal quarter and the then
elapsed portion of the fiscal year, setting forth in each case in
comparative form the figures for the corresponding period or periods of
(or, in the case of the balance sheet, as of the end of) the previous
fiscal year, all certified by one of its Financial Officers as
presenting fairly in all material respects the financial condition and
results of operations of the Borrower and its consolidated Subsidiaries
on a consolidated basis in accordance with GAAP consistently applied,
subject to normal year-end audit adjustments and the absence of
footnotes;
(c) within 30 days after the end of each of the first two fiscal
months of each fiscal quarter of the Borrower, its consolidated balance
sheet and related statements of income, partners' equity and cash flows
as of the end of and for such fiscal month and the then elapsed portion
of the fiscal year, all certified by one of its Financial Officers as
presenting fairly in all material respects the financial condition and
results of operations of the Borrower and its consolidated Subsidiaries
on a consolidated basis in
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accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes;
(d) concurrently with any delivery of financial statements under
clause (a) or (b) above, a certificate of a Financial Officer of the
Borrower (i) certifying as to whether a Default has occurred and, if a
Default has occurred, specifying the details thereof and any action
taken or proposed to be taken with respect thereto, (ii) setting forth
reasonably detailed calculations demonstrating compliance with Sections
6.12, 6.13, 6.14, 6.15, 6.16 and 6.17 and (iii) stating whether any
change in GAAP or in the application thereof has occurred since the date
of the Borrower's audited financial statements referred to in Section
3.04 and, if any such change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate;
(e) concurrently with any delivery of financial statements under
clause (a) above, a certificate of the accounting firm that reported on
such financial statements stating whether they obtained knowledge during
the course of their examination of such financial statements of any
Default (which certificate may be limited to the extent required by
accounting rules or guidelines);
(f) at least 30 days prior to the commencement of each fiscal
year of the Borrower, a detailed consolidated budget for such fiscal
year (including a projected consolidated balance sheet and related
statements of projected income and cash flow as of the end of and for
such fiscal year) and, promptly when available, any significant
revisions of such budget;
(g) promptly after the same become publicly available, copies of
all periodic and other reports, proxy statements and other materials
filed by the Borrower or any Subsidiary with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of
the functions of said Commission, or with any national securities
exchange, or distributed by the Borrower to its partners generally, as
the case may be;
(h) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of the Borrower or any Subsidiary, or compliance with the
terms of any Acquisition Document, as the Administrative Agent or any
Lender may reasonably request;
(i) within 90 days after the end of each fiscal year, a statement
prepared by independent public accountants of recognized national
standing, or such other Person approved by the Administrative Agent,
setting forth the computation of any Permitted Tax Distributions made
during such fiscal year, including distributions (or repayments) for
adjustments to Permitted Tax Distributions made during previous years;
and
(j) within 90 days after the end of each fiscal year, copies of
the Borrower's filed income tax returns for such fiscal year (and any
amendments to any previously filed income tax returns that were filed
during such fiscal year) or, if the Borrower has not filed such tax
returns with the applicable Governmental Authorities within 90 days
after the end of the applicable fiscal year, copies of the Borrower's
filed requests for an
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extension to file its income tax return accompanied by a statement
setting forth the computation, based on the Borrower's then good faith
estimates, of the Borrower's taxable income for such fiscal year, and
the Borrower shall then furnish to the Administrative Agent and each
Lender copies of such tax returns no more than five days after the
Borrower has filed such tax returns with the applicable Governmental
Authorities.
SECTION 5.02. Notices of Material Events. The Borrower will furnish to
the Administrative Agent and each Lender prompt written notice of the
following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding
by or before any arbitrator or Governmental Authority against or
affecting the Borrower or any Affiliate thereof or the General Partner
that, if adversely determined, could reasonably be expected to result in
a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, could reasonably be
expected to result in liability of the Borrower and the Subsidiaries in
an aggregate amount exceeding $500,000; and
(d) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth
the details of the event or development requiring such notice and any action
taken or proposed to be taken with respect thereto.
SECTION 5.03. Information Regarding Collateral. (a) The Borrower will
furnish to the Administrative Agent prompt written notice of any change (i) in
any Loan Party's corporate or partnership name or in any trade name used to
identify it in the conduct of its business or in the ownership of its
properties, (ii) in the location of any Loan Party's chief executive office,
its principal place of business, any office in which it maintains books or
records relating to Collateral owned by it or any office or facility at which
Collateral owned by it is located (including the establishment of any such new
office or facility), (iii) in any Loan Party's identity or corporate or
partnership structure or (iv) in any Loan Party's Federal Taxpayer
Identification Number. The Borrower agrees not to effect or permit any change
referred to in the preceding sentence unless all filings have been made under
the Uniform Commercial Code or otherwise that are required in order for the
Administrative Agent to continue at all times following such change to have a
valid, legal and perfected security interest in all the Collateral. The
Borrower also agrees promptly to notify the Administrative Agent if any
material portion of the Collateral is damaged or destroyed.
(b) Each year, at the time of delivery of annual financial statements
with respect to the preceding fiscal year pursuant to clause (a) of Section
5.01, the Borrower shall deliver to the Administrative Agent a certificate of a
Financial Officer of the Borrower (i) setting forth the information required
pursuant to Section 2 of the Perfection Certificate or confirming that there
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has been no change in such information since the date of the Perfection
Certificate delivered on the Effective Date or the date of the most recent
certificate delivered pursuant to this Section and (ii) certifying that all
Uniform Commercial Code financing statements (including fixture filings, as
applicable) or other appropriate filings, recordings or registrations,
including all refilings, rerecordings and reregistrations, containing a
description of the Collateral have been filed of record in each governmental,
municipal or other appropriate office in each jurisdiction identified pursuant
to clause (i) above to the extent necessary to protect and perfect the security
interests under the Security Agreement for a period of not less than 18 months
after the date of such certificate (except as noted therein with respect to any
continuation statements to be filed within such period).
SECTION 5.04. Existence; Conduct of Business. The Borrower will, and
will cause each of the Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges, franchises, patents,
copyrights, trademarks and trade names material to the conduct of its business,
provided that the foregoing shall not prohibit any merger, consolidation,
liquidation or dissolution permitted under Section 6.03.
SECTION 5.05. Payment of Obligations. The Borrower will, and will
cause each of the Subsidiaries to, pay its Indebtedness and other obligations,
including Tax liabilities, before the same shall become delinquent or in
default, except where (a) the validity or amount thereof is being contested in
good faith by appropriate proceedings, (b) the Borrower or such Subsidiary has
set aside on its books adequate reserves with respect thereto in accordance
with GAAP, (c) such contest effectively suspends collection of the contested
obligation and the enforcement of any Lien securing such obligation and (d) the
failure to make payment pending such contest could not reasonably be expected
to result in a Material Adverse Effect.
SECTION 5.06. Maintenance of Properties. The Borrower will, and will
cause each of the Subsidiaries to, keep and maintain all property material to
the conduct of its business in good working order and condition, ordinary wear
and tear excepted.
SECTION 5.07. Insurance. (a) The Borrower will, and will cause each
of the Subsidiaries to, maintain, with financially sound and reputable
insurance companies (i) insurance (including insurance against claims and
liabilities arising out of the manufacture or distribution of any products)
with respect to its properties and business against such casualties and
contingencies and of such types and in such amounts as are customarily
maintained by companies in the same or similar business operating in the same
or similar locations and (ii) such other insurance as may be required by law.
(b) Fire and extended coverage policies (and any policies required to
be maintained pursuant to paragraph (c) below) maintained with respect to any
Collateral shall be endorsed or otherwise amended to include (i) a non-
contributing mortgage clause (regarding improvements to real property) and
lenders' loss payable clause (regarding personal property), in each case in
favor of the Administrative Agent or its designee, (ii) a provision to the
effect that neither the Borrower, the Administrative Agent nor any other party
shall be a coinsurer and (iii) such other provisions as the Administrative
Agent may reasonably require from time to time to protect the interests of the
Lenders. Commercial general liability policies shall be endorsed to name the
Administrative Agent as an additional insured. Business interruption policies
shall name the
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Administrative Agent as loss payee. Each such policy referred to in this
paragraph also shall provide that it shall not be canceled, modified or not
renewed (i) by reason of nonpayment of premium except upon not less than 10
days' prior written notice thereof by the insurer to the Administrative Agent
(giving the Administrative Agent the right to cure defaults in the payment of
premiums) or (ii) for any other reason except upon not less than 30 days' prior
written notice thereof by the insurer to the Administrative Agent. The
Borrower shall deliver to the Administrative Agent, prior to the cancelation,
modification or nonrenewal of any such policy of insurance, a copy of a renewal
or replacement policy (or other evidence of renewal of a policy previously
delivered to the Administrative Agent) together with evidence satisfactory to
the Administrative Agent of payment of the premium therefor.
(c) If at any time the area in which any Mortgaged Property is located
is designated (i) "flood hazard area" in any Flood Insurance Rate Map
published by the Federal Emergency Management Agency (or any successor agency),
the Borrower shall obtain flood insurance in such total amount as the
Administrative Agent or the Required Lenders may from time to time reasonably
require, and otherwise comply with the National Flood Insurance Program as set
forth in the Flood Disaster Protection Act of 1973, as amended from time to
time.
SECTION 5.08. Casualty and Condemnation. (a) The Borrower will
furnish to the Administrative Agent and the Lenders prompt written notice of
any casualty or other insured damage to or any commencement of action or
proceeding under power of eminent domain, condemnation or similar proceeding
for the taking of (i) any portion of any Collateral (excluding any property,
improvements or assets included in the definition of the term "Mortgaged
Property") or (ii) any portion of Mortgaged Property.
(b) If any event described in Section 5.08(a)(i) results in Net
Proceeds (whether in the form of insurance proceeds, condemnation award or
otherwise), the Administrative Agent is authorized to collect such Net Proceeds
and, if received by the Borrower or any Subsidiary, such Net Proceeds shall be
paid over to the Administrative Agent, provided that (i) if the aggregate Net
Proceeds in respect of such event (other than proceeds of business interruption
insurance, if any) are less than $2,000,000, such Net Proceeds shall be paid
over to the Borrower unless a Default has occurred and is continuing and (ii)
all proceeds of business interruption insurance, if any, shall be paid over to
the Borrower unless a Default has occurred and is continuing. Any Net Proceeds
paid over to the Administrative Agent as provided in this paragraph shall be
applied to prepay Term Borrowings as provided in Section 2.11(b).
(c) If any event described in Section 5.08(a)(ii) results in Net
Proceeds (whether in the form of insurance proceeds, condemnation award or
otherwise), all such Net Proceeds retained by or paid over to the
Administrative Agent shall be applied by the Administrative Agent to the
payment of the cost of restoring or replacing the Mortgaged Property so
damaged, destroyed or taken or the cost of the portion or portions of the
Mortgaged Property not so taken (the "Work"), and such Net Proceeds shall be
paid over from time to time to the Borrower or the applicable Subsidiary, as
the case may be, as and to the extent that the Work (or the location
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and acquisition of any replacement of the Mortgaged Property) progresses for
the payment thereof, subject to each of the following conditions:
(i) the Borrower or such Subsidiary, as applicable, must
promptly commence the restoration process or the location, acquisition
and replacement process in connection with the Mortgaged Property;
(ii) the Work shall be in the charge of an independent
architect or engineer, and before the commencement of any Work, other
than temporary work to protect property or prevent interference with
business, the Administrative Agent shall have received the plans,
specifications and general contract for the Work from the Borrower or
such Subsidiary, as applicable. The plans and specifications shall
provide that, upon completion of such Work, the improvements shall (A)
be in compliance with all requirements of applicable Governmental
Authorities and (B) be at least equal in value and general utility to
the improvements that were on such Mortgaged Property (or that were on
the Mortgaged Property that has been replaced, if applicable) prior to
the casualty or condemnation, and in the case of a condemnation, subject
to the effect of such condemnation;
(iii) except as provided in clause (iv) below, each request for
payment shall be made upon seven days' prior notice to the
Administrative Agent and shall be accompanied by a certificate of such
architect or engineer, certifying that (A) all the completed Work has
been performed in substantial compliance with the plans, specifications
and general contract and (B) the sum requested is justly required to
reimburse the Borrower or such Subsidiary, as applicable, for payments
to, or is justly due to, the contractor, subcontractors, materialmen,
laborers, engineers, architects or other persons providing services or
materials for the Work (providing a brief description of such services
or materials, as applicable) and, when added to all sums previously paid
out by the Administrative Agent, does not exceed the value of the Work
done to the date of such certificate;
(iv) each request for payment in connection with the
acquisition of a replacement Mortgaged Property shall be made upon 30
days' prior notice to the Administrative Agent and, in connection
therewith, (A) each such request shall be accompanied by a copy of the
sales contract or other document governing the acquisition of the
replacement property by the Borrower or such Subsidiary, as applicable,
and a certificate of the Borrower or such Subsidiary, as applicable,
stating that the sum requested represents the sales price under such
contract or document and the related reasonable transaction fees and
expenses (including brokerage fees) and setting forth in sufficient
detail the various components of such requested sum and (B) the Borrower
or such Subsidiary, as applicable, shall (I) in addition to any other
items required to be delivered under this Section, provide the
Administrative Agent with such opinions, documents, certificates,
surveys, title insurance policies and other insurance policies as it may
reasonably request and (II) take such other actions as the
Administrative Agent may reasonably deem necessary or appropriate
(including actions with respect to the delivery to the Administrative
Agent of a first priority Mortgage with respect to such real property);
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(v) upon the request of the Administrative Agent, the Borrower
or such Subsidiary, as applicable, shall provide the Administrative
Agent with (A) waivers of lien satisfactory to the Administrative Agent
covering that part of the Work for which payment or reimbursement is
being requested and (B) if required by the Administrative Agent, a
search prepared by a title company or licensed abstractor or other
evidence satisfactory to the Administrative Agent that there has not
been filed with respect to such Mortgaged Property any mechanics' or
other lien or instrument for the retention of title in respect of any
part of the Work not discharged of record or bonded to the reasonable
satisfaction of the Administrative Agent;
(vi) there shall be no Default or Event of Default that has
occurred and is continuing;
(vii) the request for any payment after the Work has been
completed shall be accompanied by a copy of any certificate or
certificates required by law to render the occupancy of the improvements
being rebuilt, repaired or restored legal; and
(viii) after commencing the Work, the Borrower or such
Subsidiary, as applicable, shall continue to perform the Work diligently
and in good faith to completion in accordance with the approved plans,
specifications and general contract,
provided that nothing in this paragraph (c) shall prevent the Administrative
Agent from applying at any time all or any part of the Net Proceeds received in
an event described in Section 5.08(a)(ii) to (i) the curing of any Event of
Default or (ii) the payment of any of the obligations outstanding under this
Agreement after the occurrence and during the continuance of an Event of
Default. If any Net Proceeds paid over to or retained by the Administrative
Agent as provided in this paragraph continue to be held on the date that is 365
days after the receipt of such Net Proceeds, then such Net Proceeds shall be
applied to prepay Term Borrowings as provided in Section 2.11(b).
SECTION 5.09. Books and Records; Inspection and Audit Rights. The
Borrower will, and will cause each of the Subsidiaries to, keep proper books of
record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its business and activities. The
Borrower will, and will cause each of the Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender, upon
reasonable prior notice, to visit and inspect its properties, to examine and
make extracts from its books and records, and to discuss its affairs, finances
and condition with its officers and independent accountants, all at such
reasonable times and as often as reasonably requested.
SECTION 5.10. Compliance with Laws. The Borrower will, and will cause
each of the Subsidiaries to, comply with all laws, rules, regulations and
orders of any Governmental Authority applicable to it or its property,
including Environmental Laws and Environmental Permits, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.11. Use of Proceeds and Letters of Credit. The Initial
Borrower will use the proceeds of the Term Loans, together with a portion of
the proceeds of the Revolving Loans, to be made on the Effective Date only for
the purposes set forth in the preamble to this
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Agreement. The Borrower will use the proceeds of the Revolving Loans (other
than the Revolving Loans referred to in the immediately preceding sentence),
and will request the issuance of Letters of Credit, only for the purposes set
forth in the preamble to this Agreement. No part of the proceeds of any Loan
will be used, whether directly or indirectly, for any purpose that entails a
violation of any of the Regulations of the Board, including Regulations G, U
and X.
SECTION 5.12. Additional Subsidiaries. If any additional Subsidiary is
formed or acquired after the Effective Date, the Borrower will notify the
Administrative Agent and the Lenders thereof and (a) if such Subsidiary is a
Subsidiary Loan Party, the Borrower will cause such Subsidiary to become a
party to the Guarantee Agreement, the Indemnity, Subrogation and Contribution
Agreement and each applicable Security Document in the manner provided therein
within three Business Days after such Subsidiary is formed or acquired and
promptly take such actions to create and perfect Liens on such Subsidiary's
assets to secure the Obligations as the Administrative Agent or the Required
Lenders shall reasonably request and (b) if any shares of capital stock or
Indebtedness of such Subsidiary are owned by or on behalf of any Loan Party,
the Borrower will cause such shares and promissory notes evidencing such
Indebtedness to be pledged pursuant to the Pledge Agreement within three
Business Days after such Subsidiary is formed or acquired (except that, if such
Subsidiary is a Foreign Subsidiary, shares of common stock of such Subsidiary
to be pledged pursuant to the Pledge Agreement may be limited to 65% of the
outstanding shares of common stock of such Subsidiary).
SECTION 5.13. Further Assurances. (a) Each of the Initial Borrower
and the Borrower will, and will cause each Subsidiary Loan Party to, execute
any and all further documents, financing statements, agreements and
instruments, and take all such further actions (including the filing and
recording of financing statements, fixture filings, mortgages, deeds of trust
and other documents), that may be required under any applicable law, or which
the Administrative Agent or the Required Lenders may reasonably request, to
effectuate the transactions contemplated by the Loan Documents or to grant,
preserve, protect or perfect the Liens created or intended to be created by the
Security Documents or the validity or priority of any such Lien, all at the
expense of the Initial Loan Parties. The Borrower also agrees to provide to
the Administrative Agent, from time to time upon request, evidence reasonably
satisfactory to the Administrative Agent as to the perfection and priority of
the Liens created or intended to be created by the Security Documents.
(b) If any material assets (including any real property or improvements
thereto or any interest therein) are acquired by the Borrower or any Subsidiary
Loan Party after the Effective Date (other than assets constituting Collateral
under the Security Agreement that become subject to the Lien of the Security
Agreement upon acquisition thereof), the Borrower will notify the
Administrative Agent and the Lenders thereof, and, if requested by the
Administrative Agent or the Required Lenders, the Borrower will cause such
assets to be subjected to a Lien securing the Obligations and will take, and
cause the Subsidiary Loan Parties to take, such actions as shall be necessary
or reasonably requested by the Administrative Agent to grant and perfect such
Liens, including actions described in paragraph (a) of this Section, all at the
expense of the Loan Parties.
(c) On or before each date set forth opposite the applicable Mortgaged
Property on Schedule 5.13, (i) the Borrower will execute, or will cause to be
executed, a Mortgage and a title insurance policy, as applicable, with respect
to each Mortgaged Property set forth on
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Schedule 5.13 and (ii) the Administrative Agent shall have received (A)
originals or copies, certified or otherwise identified to the satisfaction of
the Administrative Agent, of each such title insurance policy, (B) counterparts
of each such Mortgage duly executed on behalf of the record owner of the
applicable Mortgaged Property, and (C) such as-built surveys and abstracts with
respect to such Mortgaged Property as may be required pursuant to each such
title insurance policy or Mortgage, in each case, in form and substance
satisfactory to the Administrative Agent.
(d) As soon as practicable following the Effective Date, the Borrower
shall cause an environmental consultant to obtain supplemental environmental
quality samples (the scope of such sampling shall be reasonably satisfactory to
the Administrative Agent) from the Borrower's Delta, Colorado facility and the
Borrower shall submit the written results of such samples to the Administrative
Agent as soon as practicable thereafter, but in no event later than November 1,
1997. The scope of such supplemental sampling shall be to provide to the
Administrative Agent information necessary to determine whether the properties
located at 000 Xxxx 0xx Xxxxxx, Xxxxx, Xxxxxxxx and 000 Xxxxxx Xxxxxx, Xxxxx,
Xxxxxxxx shall become subject to Liens under the Security Documents.
SECTION 5.14. Interest Rate Protection. As promptly as practicable,
and in any event within 60 days after the Effective Date, the Borrower will
enter into with one or more Lenders, and thereafter for a period of not less
than three years will maintain in effect, one or more interest rate protection
agreements on such terms as shall be reasonably satisfactory to the
Administrative Agent, the effect of which shall be to fix or limit the interest
cost to the Borrower with respect to at least 15% of the outstanding Term
Loans.
SECTION 5.15. Concentration and Disbursement Accounts. As promptly as
practicable but in any event within 90 days after the Effective Date, the
Borrower shall arrange and thereafter maintain with a financial institution
that is a Lender one or more accounts to be used by the Borrower and the
Subsidiaries as their principal concentration and disbursement accounts and
shall not, and shall not permit any Subsidiary to, maintain any bank accounts
with respect to its material business or operations with any person that is
not, a Lender.
SECTION 5.16. Maintenance of Registration of Pledge. The Borrower
shall maintain evidence, reasonably satisfactory to the Administrative Agent,
of the registration of the security interests in the Pledged Interests (as
defined in the Pledge Agreement) in favor of the Collateral Agent for the
ratable benefit of the Secured Parties until the security interests in such
Pledged Interests shall have been terminated or released in accordance with the
terms of the Pledge Agreement.
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been paid in full
and all Letters of Credit have expired or terminated and all LC Disbursements
shall have been reimbursed, the Borrower covenants and agrees with the Lenders
that:
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SECTION 6.01. Indebtedness; Certain Equity Securities. (a) The
Borrower will not, and will not permit any Subsidiary to, create, incur, assume
or permit to exist any Indebtedness, except:
(i) Indebtedness created under the Loan Documents;
(ii) the Subordinated Debt;
(iii) Indebtedness existing on the date hereof and set forth on
Schedule 6.01 and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount
thereof or result in an earlier maturity date or decreased weighted
average life thereof;
(iv) Indebtedness of the Borrower to any Subsidiary and of any
Subsidiary to the Borrower or any other Subsidiary, provided that
Indebtedness of any Subsidiary that is not a Loan Party to the Borrower
or any Subsidiary Loan Party shall be subject to Section 6.04;
(v) Guarantees by the Borrower of Indebtedness of any Subsidiary
and by any Subsidiary of Indebtedness of the Borrower or any other
Subsidiary, provided that Guarantees by the Borrower or any Subsidiary
Loan Party of Indebtedness of any Subsidiary that is not a Loan Party
shall be subject to Section 6.04;
(vi) Indebtedness of the Borrower or any Subsidiary incurred to
finance the acquisition, construction or improvement of any fixed or
capital assets, including Capital Lease Obligations and any Indebtedness
assumed in connection with the acquisition of any such assets or secured
by a Lien on any such assets prior to the acquisition thereof, and
extensions, renewals and replacements of any such Indebtedness that do
not increase the outstanding principal amount thereof or result in an
earlier maturity date or decreased weighted average life thereof,
provided that (A) such Indebtedness is incurred prior to or within 90
days after such acquisition or the completion of such construction or
improvement and (B) the aggregate principal amount of Indebtedness
permitted by this clause (vi) shall not exceed $10,000,000 at any time
outstanding;
(vii) Indebtedness of any Person that becomes a Subsidiary after
the date hereof, provided that (A) such Indebtedness exists at the time
such Person becomes a Subsidiary and is not created in contemplation of
or in connection with such Person becoming a Subsidiary and (B) the
aggregate principal amount of Indebtedness permitted by this clause
(vii) shall not exceed $5,000,000 at any time outstanding;
(viii) Indebtedness of the Borrower created under Hedging
Agreements entered into pursuant to Section 5.14 and permitted under
Section 6.07;
(ix) other unsecured Indebtedness in addition to that permitted
by clauses (i) through (viii) above in an aggregate principal amount not
exceeding $10,000,000 at any time outstanding, provided that the
aggregate principal amount of Indebtedness of the
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Borrower's Subsidiaries permitted by this clause (ix) shall not exceed
$5,000,000 at any time outstanding; and
(x) extensions, renewals or refinancings of Indebtedness under
clause (ii) above so long as (A) such Indebtedness ("Refinancing
Indebtedness") is in an aggregate principal amount not greater than the
aggregate principal amount of the Indebtedness being extended, renewed
or refinanced plus the amount of any premiums required to be paid
thereon and fees and expenses associated therewith, (B) such Refinancing
Indebtedness has a later or equal final maturity and a longer or equal
weighted average life than the Indebtedness being extended, renewed or
refinanced, (C) the interest rate applicable to such Refinancing
Indebtedness is a market interest rate (as determined in good faith by
the management of each of the Borrower or SFG Capital, as the case may
be, as of the time of such extension, renewal or refinancing), (D) such
Refinancing Indebtedness is subordinated to the Obligations to the same
extent as the Indebtedness being extended, renewed or refinanced and (E)
at the time and after giving effect to such extension, renewal or
refinancing, no Default or Event of Default shall have occurred and be
continuing.
(b) The Borrower will not, and will not permit any Subsidiary to, issue
any preferred partner interest or preferred stock, as the case may be, or be or
become (except to the extent permitted by Section 6.08) liable in respect of
any obligation (contingent or otherwise) to purchase, redeem, retire, acquire
or make any other payment in respect of any partnership interest or shares of
capital stock of the Borrower or any Subsidiary, as the case may be, or any
option, warrant or other right to acquire any such partnership interest or
shares of capital stock other than the issuance of the New Preferred Interests
and any Series E Preferred Capital Interests.
SECTION 6.02. Liens. The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any
property or asset now owned or hereafter acquired by it, or assign or sell any
income or revenues (including accounts receivable) or rights in respect of any
thereof, except:
(a) Liens created under the Loan Documents;
(b) Permitted Encumbrances;
(c) any Lien on any property or asset of the Borrower or any
Subsidiary existing on the date hereof and set forth on Schedule 6.02,
provided that (i) such Lien shall not apply to any other property or
asset of the Borrower or any Subsidiary and (ii) such Lien shall secure
only those obligations that it secures on the date hereof and
extensions, renewals and replacements thereof that are permitted under
Section 6.01 and do not increase the outstanding principal amount
thereof;
(d) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary or existing on any
property or asset of any Person that becomes a Subsidiary after the date
hereof prior to the time such Person becomes a Subsidiary, provided that
(i) such Lien is not created in contemplation of or in connection with
such acquisition or such Person becoming a Subsidiary, as the case
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may be, (ii) such Lien shall not apply to any other property or assets
of the Borrower or any Subsidiary and (iii) such Lien shall secure only
those obligations that it secures on the date of such acquisition or the
date such Person becomes a Subsidiary, as the case may be, and
extensions, renewals and replacements thereof that are permitted under
Section 6.01 and do not increase the outstanding principal amount
thereof;
(e) Liens on fixed or capital assets acquired, constructed or
improved by the Borrower or any Subsidiary, provided that (i) such
security interests secure Indebtedness permitted by clause (vi) of
Section 6.01(a), (ii) such security interests and the Indebtedness
secured thereby are incurred prior to or within 90 days after such
acquisition or the completion of such construction or improvement, (iii)
the Indebtedness secured thereby does not exceed the cost of acquiring,
constructing or improving such fixed or capital assets and (iv) such
security interests shall not apply to any other property or assets of
the Borrower or any Subsidiary; and
(f) Liens (other than those permitted by clauses (a) through (e)
above) securing liabilities permitted hereunder in an aggregate amount
not exceeding $5,000,000 at any time outstanding.
SECTION 6.03. Fundamental Changes. (a) The Borrower will not, and will
not permit any Subsidiary to, merge into or consolidate with any other Person,
or permit any other Person to merge into or consolidate with it, or liquidate
or dissolve, except that, if at the time thereof and immediately after giving
effect thereto no Default shall have occurred and be continuing (i) any
Subsidiary may merge into the Borrower in a transaction in which the Borrower
is the surviving entity, (ii) any Subsidiary may merge into any Subsidiary Loan
Party in a transaction in which the surviving entity is a Subsidiary Loan
Party, (iii) any Subsidiary that is not a Loan Party may merge into any
Subsidiary that is not a Loan Party and (iv) any Subsidiary may liquidate or
dissolve if the Borrower determines in good faith that such liquidation or
dissolution is in the best interests of the Borrower and is not materially
disadvantageous to the Lenders, provided that any such merger involving a
Person that is not a wholly owned Subsidiary immediately prior to such merger
shall not be permitted unless also permitted by Section 6.04.
(b) The Borrower will not, and will not permit any of the Subsidiaries
to, engage to any material extent in any business other than businesses of the
type conducted by the Borrower and the Subsidiaries on the date of execution of
this Agreement and businesses reasonably related thereto.
SECTION 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions. The Borrower will not, and will not permit any of the
Subsidiaries to, purchase, hold or acquire (including pursuant to any merger
with any Person that was not a wholly owned Subsidiary prior to such merger)
any capital stock, evidences of indebtedness or other securities (including any
option, warrant or other right to acquire any of the foregoing) of, make or
permit to exist any loans or advances to, Guarantee any obligations of, or make
or permit to exist any
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investment or any other interest in, any other Person, or purchase or otherwise
acquire (in one transaction or a series of transactions) any assets of any
other Person constituting a business unit, except:
(a) the acquisition of the Contributed Business, the Meadow Gold
Trademark Acquisition and other purchases and acquisitions contemplated
by the Acquisition Documents;
(b) Permitted Investments;
(c) investments existing on the date hereof and set forth on
Schedule 6.04, to the extent such investments would not be permitted
under any other clause of this Section;
(d) investments by the Borrower in the capital stock of the
Subsidiaries, provided that (i) any such shares of capital stock shall
be pledged pursuant to the Pledge Agreement (subject to the limitations
applicable to common stock of a Foreign Subsidiary referred to in
Section 5.12) and (ii) the amount of investments by the Borrower in
Subsidiaries that are not Loan Parties shall not exceed $2,500,000 in
the aggregate at any time outstanding;
(e) loans or advances made by the Borrower to any Subsidiary and
made by any Subsidiary to the Borrower or any other Subsidiary, provided
that (i) any such loans and advances made by a Loan Party shall be
evidenced by a promissory note pledged pursuant to the Pledge Agreement
and (ii) the amount of all such loans and advances by Loan Parties to
Subsidiaries that are not Loan Parties shall not exceed $2,500,000 in
the aggregate at any time outstanding;
(f) Guarantees constituting Indebtedness permitted by Section
6.01, provided that the amount of Indebtedness that is (i) outstanding
with respect to Subsidiaries that are not Loan Parties and (ii)
Guaranteed by any Loan Party shall not exceed $2,500,000 in the
aggregate at any time outstanding;
(g) Hedging Agreements permitted under Section 6.07;
(h) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes
with, customers and suppliers, in each case in the ordinary course of
business;
(i) the acquisition of assets from, or capital stock or other
equity interests in, any Person in connection with a Permitted
Acquisition for an aggregate consideration of not more than $10,000,000
for any one Permitted Acquisition and not more than $40,000,000 for all
Permitted Acquisitions during the term of this Agreement; and
(j) investments (other than those permitted by clauses (a)
through (i) above) in an aggregate amount not to exceed $5,000,000 at
any time outstanding.
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SECTION 6.05. Asset Sales. The Borrower will not, and will not permit
any of the Subsidiaries to, sell, transfer, lease or otherwise dispose of any
asset, including capital stock or partnership or other ownership interests, nor
will the Borrower permit any of the Subsidiaries to issue any additional shares
of its capital stock or partnership or other ownership interests in such
Subsidiary, except:
(a) sales of inventory, used or surplus equipment and Permitted
Investments in the ordinary course of business;
(b) sales, transfers and dispositions to the Borrower or a
Subsidiary, provided that any such sales, transfers or dispositions
involving a Subsidiary that is not a Loan Party shall be made in
compliance with Section 6.09; and
(c) sales, transfers and dispositions of assets (other than
capital stock or partnership or other ownership interests of a
Subsidiary) that are not permitted by any other clause of this Section,
provided that the aggregate fair market value of all assets sold,
transferred or otherwise disposed of in reliance upon this clause (c)
shall not exceed $5,000,000 during any fiscal year of the Borrower,
provided that all sales, transfers, leases and other dispositions permitted
hereby shall be made for fair value and, in the case of sales, transfers,
leases and other dispositions in excess of $2,000,000, shall be for
consideration at least 50% of which is cash.
SECTION 6.06. Sale and Lease-Back Transactions. The Borrower will not,
and will not permit any of the Subsidiaries to, enter into any arrangement,
directly or indirectly, with any Person whereby the Borrower or any Subsidiary
shall sell or transfer any property, real or personal, used or useful in its
business, whether now owned or hereafter acquired, and thereafter rent or lease
such property or other property which it intends to use for substantially the
same purpose or purposes as the property being sold or transferred, provided
that the Borrower and the Subsidiaries may enter into any such transaction to
the extent the Capital Lease Obligation and Liens associated therewith would be
permitted by Sections 6.01(a)(vi) and 6.02(e).
SECTION 6.07. Hedging Agreements. The Borrower will not, and will not
permit any of the Subsidiaries to, enter into any Hedging Agreement, other than
(a) Hedging Agreements required by Section 5.14 and (b) Hedging Agreements
entered into in the ordinary course of business to hedge or mitigate risks to
which the Borrower or any Subsidiary is exposed in the conduct of its business
or the management of its liabilities.
SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness.
(a) The Borrower will not, and will not permit any Subsidiary to, declare or
make, or agree to pay or make, directly or indirectly, any Restricted Payment,
except (i) Subsidiaries may declare and pay dividends ratably with respect to
their capital stock, (ii) the Borrower may make distributions in kind, in lieu
of cash, in accordance with the terms of the Partnership Agreement, with
respect to each series of the New Preferred Interests, the Existing Preferred
Interests and the Series E Preferred Capital Interests, (iii) the Borrower may
make cash distributions (provided that such distributions will be treated, for
the purposes of Sections 6.13, 6.14 and 6.16, as cash interest expenses for the
four-fiscal-quarter period ended immediately
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prior to the date of the applicable distribution) with respect to (A) the
initial $15,000,000 in stated value of the Series D Preferred Capital Interests
held by Mid-Am Capital, provided that as of the end of the fiscal quarter ended
immediately prior to such distributions and after giving pro forma effect to
such distributions, the Consolidated Interest Expense Coverage Ratio shall be
greater than 2.25 to 1.00 and (B) the remainder of the Series D Preferred
Capital Interests (including preferred limited partnership interests issued
after the Effective Date with respect to the Series D Preferred Capital
Interests issued prior to such date), provided that, as of the end of the
fiscal quarter ended immediately prior to such distributions and after giving
pro forma effect to such distributions, the Consolidated Interest Expense
Coverage Ratio shall be greater than 2.40 to 1.00, and (iv) the Borrower may
make Permitted Tax Distributions.
(b) The Borrower will not, and will not permit any Subsidiary to, make
or agree to pay or make, directly or indirectly, any payment or other
distribution (whether in cash securities or other property) of or in respect of
principal of or interest on any Indebtedness, or any payment or other
distribution (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancelation or termination of any Indebtedness,
except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal
payments as and when due in respect of any Indebtedness, other than
payments in respect of the Subordinated Debt prohibited by the
subordination provisions thereof; and
(iii) refinancings of Indebtedness to the extent permitted by
Section 6.01.
SECTION 6.09. Transactions with Affiliates. The Borrower will not, and
will not permit any Subsidiary to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) transactions in the ordinary course of business that are
at prices and on terms and conditions not materially less favorable to the
Borrower or such Subsidiary than could be obtained on an arm's-length basis
from unrelated third parties, provided that, in the case of arrangements for
the purchase or sale of milk or other dairy products from an Affiliate in the
ordinary course of business, such arrangements, purchases and sales will be
considered in the aggregate, (b) transactions between or among the Borrower and
the Subsidiary Loan Parties not involving any other Affiliate, (c) any
Restricted Payment permitted by Section 6.08 and (d) the Borrower may pay fees
under the SFG Management Agreement incurred in connection with the payment of
(i) franchise taxes and other fees required by the General Partner to maintain
its existence as a limited liability company or corporation, as the case may
be, and (ii) the operating costs of the General Partner that are attributable
to the governance of the Borrower in an aggregate amount of up to $100,000 per
fiscal year.
SECTION 6.10. Restrictive Agreements. The Borrower will not, and will
not permit any Subsidiary to, directly or indirectly, enter into, incur or
permit to exist any agreement or other arrangement that prohibits, restricts or
imposes any condition upon (a) the ability of the Borrower or any Subsidiary to
create, incur or permit to exist any Lien upon any of its property or assets,
or (b) the ability of any Subsidiary to pay dividends or other distributions
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with respect to any shares of its capital stock or to make or repay loans or
advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness
of the Borrower or any other Subsidiary, provided that (i) the foregoing shall
not apply to restrictions and conditions imposed by law or by any Loan Document
or Subordinated Debt Document, (ii) the foregoing shall not apply to
restrictions and conditions existing on the date hereof identified on Schedule
6.10 (but shall apply to any extension or renewal of, or any amendment or
modification expanding the scope of, any such restriction or condition), (iii)
the foregoing shall not apply to customary restrictions and conditions
contained in agreements relating to the sale of a Subsidiary pending such sale,
provided such restrictions and conditions apply only to the Subsidiary that is
to be sold and such sale is permitted hereunder, (iv) paragraph (a) of the
foregoing shall not apply to restrictions or conditions imposed by any
agreement relating to secured Indebtedness permitted by this Agreement if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness and (v) paragraph (a) of the foregoing shall not apply to
customary provisions in leases and other contracts restricting the assignment
thereof.
SECTION 6.11. Amendment of Material Documents. The Borrower will not,
and will not permit any Subsidiary to, amend, modify or waive any of its rights
under (a) any Subordinated Debt Document, (b) its certificate of incorporation,
by-laws or other organizational documents, (c) the Partnership Agreement or (d)
any of the Acquisition Documents, if any such amendment, modification or waiver
could reasonably be expected to result in a Material Adverse Effect.
SECTION 6.12. Capital Expenditures. The Borrower will not permit the
aggregate amount of Capital Expenditures made by the Borrower and the
Subsidiaries in any fiscal year to exceed the lesser of (a) $35,000,000 and (b)
the sum of (i) the amount (the "Base Amount") set forth below opposite such
fiscal year and (ii) the excess of (A) the unused amount of permitted Capital
Expenditures for the immediately preceding fiscal year over (B) an amount equal
to unused Capital Expenditures carried forward to such preceding fiscal year.
Base
Fiscal Year Amount
----------- ------
1997 $24,000,000
1998 $29,000,000
1999 $30,000,000
2000 $30,500,000
2001 $31,500,000
2002 $32,000,000
2003 $33,000,000
2004 $33,500,000
2005 $34,500,000
2006 $35,000,000
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SECTION 6.13. Leverage Ratio. The Borrower will not permit the
Leverage Ratio for any four-fiscal-quarter period ending during any period set
forth below to be in excess of the ratio set forth below opposite such period:
Period Ratio
------ -----
December 31, 1997 6.00 to 1.00
March 31, 1998 5.90 to 1.00
June 30, 1998 5.80 to 1.00
September 30, 1998 5.70 to 1.00
December 31, 1998 5.60 to 1.00
March 31, 1999 5.60 to 1.00
June 30, 1999 5.50 to 1.00
September 30, 1999 5.40 to 1.00
December 31, 1999 5.30 to 1.00
March 31, 2000 5.20 to 1.00
June 30, 2000 5.10 to 1.00
September 30, 2000 5.00 to 1.00
December 31, 2000 4.80 to 1.00
March 31, 2001 4.70 to 1.00
June 30, 2001 4.60 to 1.00
September 30, 2001 4.50 to 1.00
December 31, 2001 4.30 to 1.00
March 31, 2002 4.20 to 1.00
June 30, 2002 4.10 to 1.00
September 30, 2002 4.00 to 1.00
December 31, 2002 3.90 to 1.00
March 31, 2003 3.80 to 1.00
June 30, 2003 3.70 to 1.00
September 30, 2003 3.50 to 1.00
December 31, 2003 3.50 to 1.00
March 31, 2004 3.50 to 1.00
June 30, 2004 3.50 to 1.00
September 30, 2004 3.50 to 1.00
December 31, 2004 3.50 to 1.00
March 31, 2005 3.50 to 1.00
June 30, 2005 3.50 to 1.00
September 30, 2005 3.50 to 1.00
December 31, 2005 3.50 to 1.00
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March 31, 2006 3.50 to 1.00
June 30, 2006 3.50 to 1.00
September 30, 2006 3.50 to 1.00
December 31, 2006 3.50 to 1.00
SECTION 6.14. Consolidated Interest Expense Coverage Ratio. The
Borrower will not permit the Consolidated Interest Expense Coverage Ratio for
any four-fiscal-quarter period ending during any period set forth below to be
less than the ratio set forth below opposite such period:
Period Ratio
------ -----
December 31, 1997 1.70 to 1.00
March 31, 1998 1.70 to 1.00
June 30, 1998 1.70 to 1.00
September 30, 1998 1.70 to 1.00
December 31, 1998 1.70 to 1.00
March 31, 1999 1.70 to 1.00
June 30, 1999 1.70 to 1.00
September 30, 1999 1.80 to 1.00
December 31, 1999 1.80 to 1.00
March 31, 2000 1.80 to 1.00
June 30, 2000 1.90 to 1.00
September 30, 2000 1.90 to 1.00
December 31, 2000 2.00 to 1.00
March 31, 2001 2.00 to 1.00
June 30, 2001 2.00 to 1.00
September 30, 2001 2.10 to 1.00
December 31, 2001 2.10 to 1.00
March 31, 2002 2.20 to 1.00
June 30, 2002 2.20 to 1.00
September 30, 2002 2.30 to 1.00
December 31, 2002 2.30 to 1.00
March 31, 2003 2.50 to 1.00
June 30, 2003 2.50 to 1.00
September 30, 2003 2.50 to 1.00
December 31, 2003 2.50 to 1.00
March 31, 2004 2.75 to 1.00
June 30, 2004 2.75 to 1.00
September 30, 2004 2.75 to 1.00
December 31, 2004 2.75 to 1.00
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March 31, 2005 3.00 to 1.00
June 30, 2005 3.00 to 1.00
September 30, 2005 3.00 to 1.00
December 31, 2005 3.00 to 1.00
March 31, 2006 3.00 to 1.00
June 30, 2006 3.00 to 1.00
September 30, 2006 3.00 to 1.00
December 31, 2006 3.00 to 1.00
SECTION 6.15. Current Ratio. The Borrower will not permit on the last
day of any fiscal quarter the ratio of (a) Consolidated Current Assets to (b)
Consolidated Current Liabilities to be less than 0.85 to 1.00.
SECTION 6.16. Fixed Charge Coverage Ratio. The Borrower will not
permit the Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters ending on December 31, March 31, June 30 and September 30 of
any year, beginning on December 31, 1997, to be less than 1.00 to 1.00.
SECTION 6.17 Consolidated Partner Equity. The Borrower will not permit
Consolidated Partner Equity as of the end of each fiscal year (beginning with
the fiscal year ended December 31, 1997) to be less than the Minimum
Consolidated Partner Equity. The "Minimum Consolidated Partner Equity" as of
the end of each fiscal year shall be the sum, without duplication, of (a) the
Initial Amount, (b) 50% of Consolidated Net Income for such fiscal year for
which Consolidated Net Income is a positive number, (c) 100% of the Net
Proceeds of any primary offering of equity securities consummated by the
Borrower or any of the Subsidiaries received in such fiscal year and (d) 100%
of any capital contribution made to the Borrower in such fiscal year by any
partner. The "Initial Amount" for the fiscal year ended December 31, 1997
shall be $132,000,000, and for each fiscal year thereafter shall be an amount
equal to the Minimum Consolidated Partner Equity for the fiscal year prior to
such fiscal year.
SECTION 6.18. Take or Pay Contracts. The Borrower will not, and will
not permit any of the Subsidiaries to, enter into or be a party to any
arrangement for the purchase of materials, supplies, other property or services
if such arrangement by its express terms requires that payment be made by the
Borrower or such Subsidiary regardless of whether or not such materials,
supplies, other properties or services are delivered or furnished to it.
SECTION 6.19. Partnership Elections. Neither the Borrower nor the
General Partner will at any time in the future file an election to be treated
as a corporation for Federal income tax purposes.
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ARTICLE VII
Events of Default
If any of the following events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan or
any reimbursement obligation in respect of any LC Disbursement when and
as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or
any fee or any other amount (other than an amount referred to in clause
(a) of this Article) payable under this Agreement or any other Loan
Document, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of three Business Days;
(c) any representation or warranty made or deemed made by or on
behalf of the Initial Borrower, the Borrower or any Subsidiary in or in
connection with any Loan Document or any amendment or modification
thereof or waiver thereunder, or in any report, certificate, financial
statement or other document furnished pursuant to or in connection with
any Loan Document or any amendment or modification thereof or waiver
thereunder, shall prove to have been incorrect in any material respect
when made or deemed made;
(d) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.02 or 5.04 (with respect
to the existence of the Borrower) or in Article VI or the Initial
Borrower shall fail to observe or perform any covenant, condition or
agreement contained in Section 5.11;
(e) any Initial Loan Party shall fail to observe or perform any
covenant, condition or agreement contained in any Loan Document (other
than those specified in clause (a), (b) or (d) of this Article), and
such failure shall continue unremedied for a period of 30 days after
notice thereof from the Administrative Agent to the Borrower (which
notice will be given at the request of any Lender);
(f) the Borrower or any Subsidiary shall fail to make any payment
(whether of principal or interest and regardless of amount) in respect
of any Material Indebtedness, when and as the same shall become due and
payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse of
time or both) the holder or holders of any Material Indebtedness or any
trustee or agent on its or their behalf to cause any Material
Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity,
provided that this clause (g) shall not apply to secured Indebtedness
that is permitted by Section 6.01 and that becomes
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due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Borrower or any
Subsidiary or its debts, or of a substantial part of its assets, under
any Federal, state or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect or (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for the Borrower or any Subsidiary or for a substantial part of
its assets, and, in any such case, such proceeding or petition shall
continue undismissed for 60 days or an order or decree approving or
ordering any of the foregoing shall be entered;
(i) the Borrower or any Subsidiary shall (i) voluntarily commence
any proceeding or file any petition seeking liquidation, reorganization
or other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect, (ii)
consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (h)
of this Article, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for the Borrower or any Subsidiary or for a substantial part of
its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;
(j) the Borrower or any Subsidiary shall become unable, admit in
writing its inability or fail generally to pay its debts as they become
due;
(k) one or more judgments for the payment of money in an
aggregate amount in excess of $500,000 shall be rendered against the
Borrower, any Subsidiary or any combination thereof and the same shall
remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be
legally taken by a judgment creditor to attach or levy upon any assets
of the Borrower or any Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other ERISA Events
that have occurred, could reasonably be expected to result in liability
of the Borrower and the Subsidiaries in an aggregate amount exceeding
(i) $500,000 in any year or (ii) $1,000,000 for all periods;
(m) any Lien purported to be created under any Security Document
shall cease to be, or shall be asserted by any Loan Party or any other
party thereto not to be, a valid and perfected Lien on any Collateral,
with the priority required by the applicable Security Document, except
(i) as a result of the sale or other disposition of the applicable
Collateral in a transaction permitted under the Loan Documents or (ii)
as a result of the Administrative Agent's failure to maintain possession
of any stock certificates, promissory notes or other instruments
delivered to it under the Pledge Agreement;
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(n) the Borrower or any holder of a partnership interest in the
Borrower shall create, or shall permit any of its subsidiaries (as
applicable) to create, or enter into any agreement to create (i) any
Lien on or security interest in, or any pledge of, partnership interests
in the Borrower other than to secure the obligations of the Borrower
under the Loan Documents or (ii) any prohibition of or restriction in
any way on the creation or assumption of any Lien on or security
interest in, or any pledge of, partnership interests in the Borrower,
including any such Lien, security interest or pledge to secure the
obligations of the Borrower under the Loan Documents;
(o) (i) any Loan Document shall, at any time, cease to be in full
force and effect (unless released by the Administrative Agent, at the
direction of the Required Lenders or as otherwise permitted under this
Agreement) or shall be declared null and void, or the validity or
enforceability in any material respect thereof shall be contested by any
Loan Party or (ii) any Lien purported to be created under any Security
Document shall cease to be a valid and perfected Lien on any material
amount of Collateral or shall be asserted by any Loan Party not to be a
valid and perfected Lien on any Collateral, in each case with the
priority required by the applicable Security Document, except (A) as a
result of the sale or other disposition of the applicable Collateral in
a transaction permitted under the Loan Documents or (B) as a result of
the Administrative Agent's failure to timely file any required
continuation statements or to maintain possession of any stock
certificates, promissory notes or other instruments delivered to it
under the Pledge Agreement; or
(p) a Change in Control shall occur;
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either
or both of the following actions, at the same or different times: (i)
terminate the Commitments, and thereupon the Commitments shall terminate
immediately, and (ii) declare the Loans then outstanding to be due and payable
in whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower; and in case of any event with respect to the Borrower described
in clause (h) or (i) of this Article, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with
accrued interest thereon and all fees and other obligations of the Borrower
accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.
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ARTICLE VIII
The Administrative Agent
Each of the Lenders and the Issuing Bank hereby irrevocably appoints the
Administrative Agent as its agent (including as the Collateral Agent (as
defined in the Security Agreement) under the Security Documents) and authorizes
the Administrative Agent to take such actions on its behalf and to exercise
such powers as are delegated to the Administrative Agent by the terms of the
Loan Documents, together with such actions and powers as are reasonably
incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Initial Borrower, the Borrower or any
Subsidiary or other Affiliate thereof as if it were not the Administrative
Agent hereunder.
The Administrative Agent shall not have any duties or obligations except
those expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any
duty to take any discretionary action or exercise any discretionary powers,
except discretionary rights and powers expressly contemplated by the Loan
Documents that the Administrative Agent is required to exercise in writing by
the Required Lenders (or such other number or percentage of the Lenders as
shall be necessary under the circumstances as provided in Section 9.02), and
(c) except as expressly set forth in the Loan Documents, the Administrative
Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Initial Borrower, the
Borrower or any of the Subsidiaries that is communicated to or obtained by the
bank serving as Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken
by it with the consent or at the request of the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02) or in the absence of its own gross
negligence or wilful misconduct. The Administrative Agent shall not be deemed
to have knowledge of any Default unless and until written notice thereof is
given to the Administrative Agent by the Borrower or a Lender, and the
Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (a) any statement, warranty or representation made in or in
connection with any Loan Document, (b) the contents of any certificate, report
or other document delivered thereunder or in connection therewith, (c) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth in any Loan Document, (d) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth in
Article IV or elsewhere in any Loan Document, other than to confirm receipt of
items expressly required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or
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other writing believed by it to be genuine and to have been signed or sent by
the proper Person. The Administrative Agent also may rely upon any statement
made to it orally or by telephone and believed by it to be made by the proper
Person, and shall not incur any liability for relying thereon. The
Administrative Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and, as
between the Administrative Agent and the other Lenders, shall not be liable for
any action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and exercise
its rights and powers by or through any one or more sub-agents appointed by the
Administrative Agent. Each of the Administrative Agent and any such sub-agent
may perform any and all its duties and exercise its rights and powers through
its Related Parties. The exculpatory provisions of the preceding paragraphs
shall apply to any such sub-agent and to the Related Parties of each of the
Administrative Agent and any such sub-agent, and shall apply to their
respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor to the
Administrative Agent as provided in this paragraph, the Administrative Agent
may resign at any time by notifying the Lenders, the Issuing Bank and the
Borrower. Upon any such resignation, the Required Lenders shall have the
right, in consultation with the Borrower, to appoint a successor. If no
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative
Agent gives notice of its resignation, then the retiring Administrative Agent
may, on behalf of the Lenders and the Issuing Bank, appoint a successor
Administrative Agent that shall be a bank with an office in New York, New York,
or an Affiliate of any such bank. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any other Loan Document or
related agreement or any document furnished hereunder or thereunder.
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ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at 0000 Xxxxx Xxxxxxx, Xxxxxx,
Xxxxx 00000, Attention of Mr. Xxx Xxxx (Telecopy No. (000) 000-0000);
(b) if to the Administrative Agent, the Issuing Bank or the
Swingline Lender, to The Chase Manhattan Bank, Loan and Agency Services
Group, One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention of Xxxxx Xxxxxx (Telecopy No. (000) 000-0000), with a copy to
The Chase Manhattan Bank, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention of Xxxxxxx Xxxxxx (Telecopy No. (000) 000-0000); and
(c) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the
Administrative Agent, the Issuing Bank or any Lender in exercising any right or
power hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power,
or any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the
Issuing Bank and the Lenders hereunder and under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of any Loan Document or consent to
any departure by any Loan Party therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) of this Section, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. Without limiting the generality of the foregoing,
the making of a Loan or issuance of a Letter of Credit shall not be construed
as a waiver of any Default, regardless of whether the Administrative Agent, any
Lender or the Issuing Bank may have had notice or knowledge of such Default at
the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or, in the case of any
other Loan Document, pursuant to an agreement or agreements in writing entered
into by the Administrative Agent and the Loan Party or Loan Parties that are
parties thereto, in each case with the consent of the Required Lenders,
provided that no such
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agreement shall (i) increase the Commitment of any Lender without the written
consent of such Lender, (ii) reduce the principal amount of any Loan or LC
Disbursement or reduce the rate of interest thereon, or reduce any fees payable
hereunder, without the written consent of each Lender affected thereby, (iii)
postpone the scheduled date of payment of the principal amount of any Loan or
LC Disbursement, or any interest thereon, or any fees payable hereunder, or
reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment, without the written consent of
each Lender affected thereby, (iv) change Section 2.18(b) or (c) in a manner
that would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender, (v) change any of the provisions of this
Section or the definition of the term "Required Lenders" or any other provision
of any Loan Document specifying the number or percentage of Lenders (or Lenders
of any Class) required to waive, amend or modify any rights thereunder or make
any determination or grant any consent thereunder, without the written consent
of each Lender (or each Lender of such Class, as the case may be), (vi) release
any Subsidiary Loan Party from its Guarantee under the Guarantee Agreement
(except as expressly provided in the Guarantee Agreement), or limit its
liability in respect of such Guarantee, without the written consent of each
Lender, (vii) release all or any substantial part of the Collateral from the
Liens of the Security Documents, without the written consent of each Lender,
(viii) change any provisions of any Loan Document in a manner that by its terms
adversely affects the rights in respect of payments due to Lenders holding
Loans of any Class differently than those holding Loans of any other Class,
without the written consent of Lenders holding a majority in interest of the
outstanding Loans and unused Commitments of each affected Class or (ix) change
the rights of the Tranche B Lenders to decline mandatory prepayments as
provided in Section 2.11, without the written consent of Tranche B Lenders
holding a majority of the outstanding Tranche B Loans, and provided further
that (i) no such agreement shall amend, modify or otherwise affect the rights
or duties of the Administrative Agent, the Issuing Bank or the Swingline Lender
without the prior written consent of the Administrative Agent, the Issuing Bank
or the Swingline Lender, as the case may be, and (ii) any waiver, amendment or
modification of this Agreement that by its terms affects the rights or duties
under this Agreement of the Revolving Lenders (but not the Tranche A Lenders
and Tranche B Lenders), the Tranche A Lenders (but not the Revolving Lenders
and Tranche B Lenders) or the Tranche B Lenders (but not the Revolving Lenders
and Tranche A Lenders) may be effected by an agreement or agreements in writing
entered into by the Borrower and requisite percentage in interest of the
affected Class of Lenders.
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrower
shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent, in connection with
the syndication of the credit facilities provided for herein, the preparation
and administration of the Loan Documents or any amendments, modifications or
waivers of the provisions thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket
expenses incurred by the Issuing Bank in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for
payment thereunder and (iii) all out-of-pocket expenses incurred by the
Administrative Agent, the Issuing Bank or any Lender, including documentary
taxes associated with this Agreement and the fees, charges and disbursements of
any counsel for the Administrative Agent, the Issuing Bank or any Lender, in
connection with the enforcement or protection of its rights in connection with
the Loan Documents, including its rights under this Section, or in connection
with the Loans made or
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Letters of Credit issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit.
(b) The Borrower shall indemnify the Administrative Agent, the Issuing
Bank and each Lender, and each Related Party of any of the foregoing Persons
(each such Person being called an "Indemnitee") against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the fees, charges and disbursements of any counsel
for any Indemnitee, incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of (i) the execution or delivery of any
Acquisition Document or any other agreement or instrument contemplated hereby,
the performance by the parties to the Acquisition Documents of their respective
obligations thereunder or the consummation of the Transactions or any other
transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use
of the proceeds therefrom (including any refusal by the Issuing Bank to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such
Letter of Credit), (iii) any actual or alleged presence or Release of Hazardous
Materials on, under or from any Mortgaged Property or any other property
currently or formerly owned or operated by the Borrower or any of the
Subsidiaries, or any Environmental Liability related in any way to the Borrower
or any of the Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto, provided that such indemnity shall not, as
to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses resulted from the gross negligence or
wilful misconduct of such Indemnitee or any Affiliate of such Indemnitee (or of
any officer, director, employee, advisor or agent of such Indemnitee or any
such Indemnitee's Affiliates).
(c) To the extent that the Borrower fails to pay any amount required to
be paid by it to the Administrative Agent, the Issuing Bank or the Swingline
Lender under paragraph (a) or (b) of this Section, each Lender severally agrees
to pay to the Administrative Agent, the Issuing Bank or the Swingline Lender,
as the case may be, such Lender's pro rata share (determined as of the time
that the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount, provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred
by or asserted against the Administrative Agent, the Issuing Bank or the
Swingline Lender in its capacity as such. For purposes hereof, a Lender's "pro
rata share" shall be determined based upon its share of the sum of the total
Revolving Exposures, outstanding Term Loans and unused Commitments at the time.
(d) To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly after
written demand therefor.
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SECTION 9.04. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), except that,
except as provided in Section 2.01, neither the Initial Borrower nor the
Borrower may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by the Borrower without such consent shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby (including any Affiliate of the Issuing
Bank that issues any Letter of Credit) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of
its Commitment and the Loans at the time owing to it), provided that (i) except
in the case of an assignment to a Lender or an Affiliate of, or an Approved
Fund with respect to, a Lender, each of the Borrower and the Administrative
Agent (and, in the case of an assignment of all or a portion of a Revolving
Commitment or any Lender's obligations in respect of its LC Exposure or
Swingline Exposure, the Issuing Bank and the Swingline Lender) must give their
prior written consent to such assignment (which consent shall not be
unreasonably withheld), (ii) except in the case of an assignment to a Lender or
an Affiliate of, or an Approved Fund with respect to, a Lender or an assignment
of the entire remaining amount of the assigning Lender's Commitment or Loans,
the amount of the Commitment or Loans of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative Agent) shall not
be less than $5,000,000 unless each of the Borrower and the Administrative
Agent otherwise consent, (iii) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender's rights and
obligations under this Agreement, except that this clause (iii) shall not be
construed to prohibit the assignment of a proportionate part of all the
assigning Lender's rights and obligations in respect of one Class of
Commitments or Loans, (iv) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Acceptance, together with
a processing and recordation fee of $3,500, and (v) the assignee, if it shall
not be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire, and provided further that any consent of the Borrower otherwise
required under this paragraph shall not be required if an Event of Default
under clause (h) or (i) of Article VII has occurred and is continuing. Subject
to acceptance and recording thereof pursuant to paragraph (d) of this Section,
from and after the effective date specified in each Assignment and Acceptance
the assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of the assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections
2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a Lender of rights
or obligations under this Agreement that does not comply with this paragraph
shall be treated for purposes of this Agreement as a sale by
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such Lender of a participation in such rights and obligations in accordance
with paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries
in the Register shall be conclusive, and the Borrower, the Administrative
Agent, the Issuing Bank and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower, the Issuing Bank
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Initial Borrower, the
Borrower, the Administrative Agent, the Issuing Bank or the Swingline Lender,
sell participations to one or more banks or other entities (a "Participant") in
all or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it),
provided that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Initial
Borrower, the Borrower, the Administrative Agent, the Issuing Bank and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce the Loan
Documents and to approve any amendment, modification or waiver of any provision
of the Loan Documents, provided that such agreement or instrument may provide
that such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to Section
9.02(b) that affects such Participant. Subject to paragraph (f) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 9.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.18(c) as though it were a
Lender.
(f) A Participant shall not be entitled to receive any greater payment
under Section 2.15 or 2.17 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is
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made with the Borrower's prior written consent. A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of
Section 2.17 unless the Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrower, to
comply with Section 2.17(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest, provided that no such pledge or assignment
of a security interest shall release a Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.
SECTION 9.05. Survival. All covenants, agreements, representations and
warranties made by the Initial Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Administrative Agent, the Issuing
Bank or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of
Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which
when taken together shall constitute a single contract. This Agreement, the
other Loan Document and any separate letter agreements with respect to fees
payable to the Administrative Agent constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the
subject matter hereof. Except as provided in Section 4.01, this Agreement
shall become effective when it shall have been executed by the Administrative
Agent and when the Administrative Agent shall have received counterparts hereof
that, when taken together, bear the signatures of each of the other parties
hereto, and thereafter shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Delivery of an
executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular
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provision in a particular jurisdiction shall not invalidate such provision in
any other jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default specified in
clause (a), (b), (h) or (i) of Article VII shall have occurred and be
continuing or if the Loans shall have been declared due and payable, each
Lender and each of its Affiliates is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other obligations at any time owing by such Lender or
Affiliate to or for the credit or the account of the Borrower against any of
and all the obligations of the Borrower now or hereafter existing under this
Agreement held by such Lender, irrespective of whether or not such Lender shall
have made any demand under this Agreement and although such obligations may be
unmatured. The rights of each Lender under this Section are in addition to
other rights and remedies (including other rights of setoff) that such Lender
may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of
Process. (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
(b) Each of the Initial Borrower and the Borrower hereby irrevocably
and unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to any Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement or any other Loan Document
shall affect any right that the Administrative Agent, the Issuing Bank or any
Lender may otherwise have to bring any action or proceeding relating to this
Agreement or any other Loan Document against the Initial Borrower, the Borrower
or its properties in the courts of any jurisdiction.
(c) Each of the Initial Borrower and the Borrower hereby irrevocably
and unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection that it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement or any other Loan Document in any court referred to in paragraph
(b) of this Section. Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
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SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of
this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Administrative Agent, the
Issuing Bank and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its and its Affiliates' directors, officers, employees and agents, including
accountants, legal counsel and other advisors or to any other Person employed
or retained by such Lender who is engaged by such Lender in evaluating,
approving, structuring or administering the Loans and who are subject to this
Section (it being understood that the Persons to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed
to keep such Information confidential), (b) to the extent requested by any
regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies
hereunder or any suit, action or proceeding relating to this Agreement or any
other Loan Document or the enforcement of rights hereunder or thereunder, (f)
subject to an agreement containing provisions substantially the same as those
of this Section, to any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement, (g) to the National Association of Insurance Commissioners or any
similar organization or any nationally recognized rating agency that requires
access to information about such Lender's investment portfolio in connection
with ratings issued with respect to such Lender, (h) with the consent of the
Borrower or (i) to the extent such Information (A) becomes publicly available
other than as a result of a breach of this Section or (B) becomes available to
the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential
basis from a source other than the Borrower, provided that the Administrative
Agent, the Issuing Bank or the applicable Lender to whom such Information
becomes available did not have actual knowledge that the party making such
Information available was subject to a confidentiality agreement, if any, with
the Borrower with respect to such Information. For the purposes of this
Section, "Information" means all information received from the Borrower
relating to the Borrower or its business, other than any such information that
is available to the Administrative Agent, the Issuing Bank or any Lender on a
nonconfidential basis prior to disclosure by the Borrower, provided that, in
the case of information received from the Borrower after the date hereof, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the
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confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
SECTION 9.13. Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any
Loan, together with all fees, charges and other amounts that are treated as
interest on such Loan under applicable law (collectively, the "Charges"), shall
exceed the maximum lawful rate (the "Maximum Rate") that may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated
amount, together with interest thereon at the Federal Funds Effective Rate to
the date of repayment, shall have been received by such Lender.
SECTION 9.14. Waiver of Defenses. To the fullest extent permitted by
applicable law, (a) the obligations of the Borrower hereunder shall not be
reduced, limited, impaired, discharged or otherwise affected (i) if any
representation or warranty made or deemed made by or on behalf of the Initial
Borrower in or in connection with any Loan Document or any amendment or
modification thereof or waiver thereunder, or in any report, certificate,
financial statement or other document furnished pursuant to or in connection
with any Loan Document or any amendment or modification thereof or waiver
thereunder, shall prove to have been incorrect in any respect when made or
deemed made, (ii) if the Initial Borrower shall fail to observe or perform any
covenant, condition or agreement contained in any Loan Document or any
amendment or modification thereof or waiver thereunder, (iii) by the failure of
the Administrative Agent or any Lender to assert any claim or demand or to
enforce or exercise any right or remedy against the Initial Borrower under the
provisions of the Credit Agreement, any other Loan Document or otherwise, (iv)
by any rescission, waiver, amendment or modification of, or any release from
any of the terms or provisions of this Agreement, any other Loan Document or
any other agreement or (v) by any other act or omission of the Initial
Borrower, the Administrative Agent or any Lender that may or might in any
manner or to any extent operate as a reduction, limitation, impairment,
discharge or have any other effect on the obligations of the Borrower as a
matter of law or equity (other than the indefeasible payment in full in cash of
the Obligations) and (b) the Borrower waives any right to require that any
resort be had by the Administrative Agent or any Lender to the assets of the
Initial Borrower for the repayment of the Obligations.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
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MID-AMERICA DAIRYMEN, INC.,
by /s/ XXXXXX X. XXX
-----------------------------------------
Name: Xxxxxx X. Xxx
Title: Corporate Vice President - Finance
SOUTHERN FOODS GROUP, L.P.,
by SFG Management Limited Liability,
its sole General Partner,
by /s/ XXXXXXX X. XXXX
--------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Assistant Secretary
000
XXX XXXXX XXXXXXXXX BANK,
by
/s/ XXXXXX XXXXXXXXX
-----------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Vice President
