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EXHIBIT 10.40
CONFORMED COPY
WAIVER AND AMENDMENT dated as of
December 22, 1997 (this "Waiver and
Amendment"), to the Credit Agreement dated
as of September 4, 1997 (the "Credit
Agreement"), among MID-AMERICA DAIRYMEN,
INC., a Kansas corporation, SOUTHERN FOODS
GROUP, L.P., a limited partnership organized
under the laws of the State of Delaware (the
"Borrower"), the several banks and financial
institutions party to the Credit Agreement
(the "Lenders") and THE CHASE MANHATTAN
BANK, as Administrative Agent.
A. Pursuant to the Credit Agreement, the Lenders and the Issuing Bank
have extended, and have agreed to extend, credit to the Borrower.
B. Section 5.15 of the Credit Agreement requires, inter alia, the
Borrower to arrange, within 90 days after the Effective Date, 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.
C. The Borrower has requested that the Required Lenders and the
Administrative Agent grant a limited waiver of compliance by the Borrower with
the provisions of, and consent to certain amendments to, Section 5.15 of the
Credit Agreement, and the Administrative Agent and the Required Lenders are
willing to grant such limited waiver and consent to such amendments, on the
terms and subject to the conditions set forth herein.
D. Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Credit Agreement.
Accordingly, in consideration of the mutual agreements herein contained
and other good and valuable consideration, the sufficiency and receipt of which
are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Waiver. The Administrative Agent and the Required Lenders
hereby waive any Default or Event of Default that has occurred or may occur or
be occurring at any time prior to the date that is 120 days after the Effective
Date as a result of the failure by the Borrower to arrange, within 90 days of
the Effective Date, 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.
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SECTION 2. Amendment to Section 5.15. Section 5.15 of the Credit
Agreement is hereby amended by (a) deleting the number "90" in such Section and
substituting therefor the number "150" and (b) inserting the following sentence
immediately after the last sentence of such Section:
"The Borrower and each of the Subsidiaries shall pay, or cause to be
paid, at or prior to the end of each Business Day, to a Lender for
deposit in a concentration and disbursement account established as
required by this Section 5.15 all cash of the Borrower or any
Subsidiary (including all proceeds of collateral in which the Borrower
or any Subsidiary is granting a security interest under the Security
Documents) in excess of $250,000 in the aggregate for the Borrower and
all the Subsidiaries. Notwithstanding the foregoing, the Borrower and
the Subsidiaries shall be permitted to maintain, with one or more
financial institutions that are not Lenders, any deposit accounts used
exclusively for the payment of payroll of the Borrower or any
Subsidiary provided that the aggregate balance of all such accounts
does not exceed $750,000 at any time."
SECTION 3. Representations and Warranties. To induce the other parties
hereto to enter into this Waiver and Amendment, the Borrower represents and
warrants to each of the Lenders and the Administrative Agent that, after giving
effect to this Waiver and Amendment, (a) the representations and warranties set
forth in Article III of the Credit Agreement are true and correct in all
material respects on and as of the date hereof with the same effect as though
made on and as of the date hereof, except to the extent such representations and
warranties expressly relate to an earlier date, and (b) no Default or Event of
Default has occurred and is continuing.
SECTION 4. Conditions to Effectiveness. This Waiver and Amendment shall
become effective on the date on which the Administrative Agent shall have
received counterparts of this Waiver and Amendment that, when taken together,
bear the signatures of the Borrower, the Administrative Agent and the Required
Lenders.
SECTION 5. Effect of Waiver and Amendment. Except as expressly set
forth herein, this Waiver and Amendment shall not by implication or otherwise
limit, impair, constitute a waiver of, or otherwise affect the rights and
remedies of the Lenders, the Administrative Agent or the Borrower under the
Credit Agreement or any other Loan Document, and shall not alter, modify, amend
or in any way affect any of the terms, conditions, obligations, covenants or
agreements contained in the Credit Agreement or any other Loan Document, all of
which are ratified and affirmed in all respects and shall continue in full force
and effect. Nothing herein shall be deemed to entitle the Borrower to a consent
to, or a waiver, amendment, modification or other change of, any of the terms,
conditions, obligations, covenants or agreements contained in the Credit
Agreement or any
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other Loan Document in similar or different circumstances. After the date
hereof, any reference to the Credit Agreement shall mean the Credit Agreement as
modified hereby. This Waiver and Amendment shall constitute a "Loan Document"
for all purposes of the Credit Agreement and the other Loan Documents.
SECTION 6. Counterparts. This Waiver and Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument. Delivery of any executed counterpart of a signature page of
this Waiver and Amendment by facsimile transmission shall be effective as
delivery of a manually executed counterpart hereof.
SECTION 7. APPLICABLE LAW. THIS WAIVER AND AMENDMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.
SECTION 8. Notices. All notices hereunder shall be given in accordance
with the provisions of Section 9.01 of the Credit Agreement.
SECTION 9. Headings. The headings of this Waiver and Amendment are for
purposes of reference only and shall not limit or otherwise affect the meaning
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Waiver and
Amendment to be duly executed by their duly authorized officers, all as of the
date and year first above written.
SOUTHERN FOODS GROUP, L.P.,
by SFG Management Limited
Liability Company, its sole
General Partner,
by
/s/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx X. Xxxx
Title: Assistant Secretary
THE CHASE MANHATTAN BANK
by
/s/ XXXX X. XXXXXXX
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Name: Xxxx X. Xxxxxxx
Title: Vice President
