Exhibit 99.1
NINTH AMENDMENT TO
REVOLVING CREDIT AGREEMENT
This NINTH AMENDMENT TO REVOLVING CREDIT AGREEMENT dated as of
February __, 2007 (the "Ninth Amendment"), is entered into by and
among
INTERSTATE BAKERIES CORPORATION, a Delaware corporation ("Parent
Borrower"), a
debtor and debtor-in-possession in a case pending under Chapter 11
of the
Bankruptcy Code, each of the direct and indirect subsidiaries of
the Parent
Borrower party to the Credit Agreement (as defined below) (each
individually a
"Subsidiary Borrower" and collectively the "Subsidiary Borrowers";
and together
with the Parent Borrower, the "Borrowers"), each of which is a
debtor and
debtor-in-possession in a case pending under Chapter 11 of the
Bankruptcy Code,
JPMORGAN CHASE BANK, N.A., a national banking association (formerly
known as
JPMorgan Chase Bank) ("JPMCB"), and each of the other commercial
banks, finance
companies, insurance companies or other financial institutions or
funds from
time to time party to the Credit Agreement (together with JPMCB,
the
"Lenders"), JPMORGAN CHASE BANK, N.A., a national banking
association (formerly
known as JPMorgan Chase Bank), as administrative agent (the
"Administrative
Agent") for the Lenders, and JPMORGAN CHASE BANK, N.A., a national
banking
association (formerly known as JPMorgan Chase Bank), as collateral
agent (the
"Collateral Agent") for the Lenders.
WITNESSETH:
WHEREAS, the Borrowers, the Lenders, the Administrative Agent and
the
Collateral Agent are parties to that certain Revolving Credit
Agreement dated
as of September 23, 2004, as amended by that certain First
Amendment to
Revolving Credit Agreement dated as of November 1, 2004, by that
certain Second
Amendment to Revolving Credit Agreement dated as of January 20,
2005, by that
certain Third Amendment and Waiver to Revolving Credit Agreement
dated as of
May 26, 2005, by that certain Fourth Amendment and Waiver to
Revolving Credit
Agreement dated as of November 30, 2005, by that certain Fifth
Amendment to
Revolving Credit Agreement dated as of December 27, 2005, by that
certain Sixth
Amendment and Waiver to Revolving Credit Agreement dated as of
March 29, 2006,
by that certain Seventh Amendment to Revolving Credit Agreement
dated as of
June 28, 2006 and by that certain Eighth Amendment to Revolving
Credit
Agreement dated as of August 25, 2006, pursuant to which the
Lenders have made
available to the Borrowers a revolving credit and letter of credit
facility in
an aggregate principal amount not to exceed $200,000,000 (as so
amended, the
"Credit Agreement");
WHEREAS, upon the occurrence of the Ninth Amendment Effectiveness
Date
(as hereinafter defined), each of the Amended and Restated Lenders
(as
hereinafter defined) shall be deemed to have become, by executing
and
delivering this Ninth Amendment, a party to the Credit Agreement
(as in effect
after giving effect to this Ninth Amendment) in the form of Exhibit
A hereto as
a "Lender" and shall have the rights and obligations of a Lender
thereunder and
each of the Amended and Restated Lenders shall have the interest(s)
shown
opposite its name on Annex A to the Credit Agreement (as in effect
after giving
effect to this Ninth Amendment) (each such Lender, an "Amended and
Restated
Lender"); and
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth and other good and valuable
consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto
agree as follows:
<PAGE>
Section 1. Definitions. Capitalized terms used and not
otherwise
defined in this Ninth Amendment are used as defined in the Credit
Agreement
(after giving effect to this Ninth Amendment). In addition, the
capitalized
term "Ninth Amendment Effectiveness Date" shall mean the first
Business Day on
which the conditions set forth in Section 3 hereof are fully
satisfied to the
satisfaction of the Administrative Agent or waived by the
Administrative Agent.
The Administrative Agent will give the Borrowers and each Lender
written notice
of the occurrence of the Ninth Amendment Effectiveness Date.
Section 2. Amendments to Credit Agreement. Subject to the
conditions
set forth in Section 3 hereof, the Credit Agreement is hereby
amended and
restated as follows:
2.1 Each of the provisions of the Credit Agreement which
appear with computerized underscoring are inserted and each of
the
provisions which appear with computerized strike-through are
deleted
in the document annexed hereto as Exhibit A.
2.2 The signature pages of the Credit Agreement are hereby
amended and restated to conform to the signature pages hereto.
2.3 Annex A to the Credit Agreement (as in effect prior to
giving effect to this Ninth Amendment) is hereby replaced in
its
entirety by Annex A to the document attached as Exhibit A
hereto.
Section 3. Effectiveness. The effectiveness of this Ninth
Amendment
and the amendment and restatement of the Credit Agreement are
subject to the
following conditions precedent:
3.1 Supporting Documents. The Administrative Agent shall have
received for each of the Borrowers:
3.1.1 bring-down certificates delivered by each
Borrower (A) certifying that there were no changes, or
providing the text of changes, to the Organizational
Documents of such Borrower as delivered pursuant to Section
4.1(a) of the Credit Agreement and (B) to the effect that
each Borrower is in good standing in its jurisdiction of
incorporation, organization or formation;
3.1.2 signature and incumbency certificates of the
officers of such Borrower executing the Loan Documents to
which it is a party,
dated as of the Ninth Amendment
Effectiveness Date;
3.1.3 duly adopted resolutions of the board of
directors or similar governing body of each Borrower
approving and
authorizing the execution, delivery and
performance of this Ninth Amendment, certified as of the
Ninth Amendment Effectiveness Date by its secretary or
assistant secretary as being in full force and effect without
modification or amendment; and
3.1.4 such other documents as the Administrative
Agent may reasonably request.
<PAGE>
3.2 Amendment Order. Not later than February __, 2007, the
Administrative Agent and the Lenders shall have received a
certified
copy of the Amendment Order in substantially the form of Exhibit
B
attached hereto or such other form as otherwise agreed by the
Administrative Agent and the Debtors and which Amendment Order
(i)
shall be in full force and effect, (ii) shall not have been
stayed,
reversed, modified or amended in any respect, except as approved
by
the Administrative Agent in its sole discretion, (iii) shall
approve
or otherwise reaffirm the payment by the Borrowers of all of the
Fees
set forth in Sections 2.19, 2.20 and 2.21 of the Credit Agreement
and
in Section 3.6 hereof, (iv) shall be entered with the consent
or
non-objection of a preponderance (as determined by the
Administrative
Agent in its sole discretion) of the secured creditors of any of
the
Borrowers under the Pre-Petition Credit Agreement, and (v) if
the
Amendment Order is the subject of a pending appeal in any
respect,
neither the making of such Loan nor the issuance of such Letter
of
Credit nor the performance by any of the Borrowers of any of
their
obligations under the Credit Agreement as amended and restated by
this
Ninth Amendment or under the Loan Documents or under any other
instrument or agreement referred to therein shall be the subject of
a
presently effective stay pending appeal.
3.3 Loan Documents. Each Borrower, each Amended and Restated
Lender and the Administrative Agent shall have signed a counterpart
of
this Ninth Amendment (whether the same or different counterparts)
and
shall have delivered the same to the Administrative Agent.
3.4 Opinion of Counsel. The Administrative Agent and the
Lenders shall have received the favorable written opinion of
counsel
to the Borrowers, acceptable to the Administrative Agent,
substantially in the form of Exhibit C.
3.5 Employment Contract with Chief Executive Officer. The
Parent Borrower shall have obtained an order of the Bankruptcy
Court
approving the employment agreement between the Parent Borrower and
a
chief executive officer of the Parent Borrower, which order shall
be
substantially in the form of Exhibit D attached hereto and shall
not
have been stayed, reversed, modified or amended in any respect,
except
as approved by the Administrative Agent in its sole discretion,
and
which employment agreement shall be in form and substance
acceptable
to the Administrative Agent.
3.6 Payment of Fees and Expenses. The Borrowers shall have
paid to the Administrative Agent (a) any unpaid balance of the
fees
and expenses due and payable by the Borrowers pursuant to the
Loan
Documents and (b) the then unpaid balance of all accrued and
unpaid
Fees due under and pursuant to: (i) the fee letter dated as of
January
__, 2007 among the Borrowers, JPMCB and JPMSI and (ii) the
letters
referred to in Section 2.19 of the Credit Agreement (as in
effect
immediately prior to the Ninth Amendment Effectiveness Date).
3.7 Closing Documents. The Administrative Agent shall have
received all documents required by this Ninth Amendment
satisfactory
in form and substance to the Administrative Agent in its
exclusive
discretion.
Section 4. Payments upon Effectiveness. On the Ninth Amendment
Effectiveness Date, (i) the Commitments of the Lenders under the
Credit
Agreement before giving effect to this Ninth Amendment who are not
Amended and
Restated Lenders (collectively, the "Terminating Lenders") shall be
terminated,
(ii) simultaneously and concurrently with the termination of the
commitments of
the Terminating Lenders, the Amended and Restated Lenders shall
make or be
deemed to have made, as the case may be, to the extent necessary,
non-pro rata
Loans to the Borrowers or additional non-pro rata Loans, as the
case may be, to
the Borrowers in accordance with their respective Commitments after
giving
effect to this Ninth Amendment in an aggregate amount necessary to
repay in
full the outstanding principal amount of the Loans of the
Terminating Lenders,
(iii) if any Letters of Credit are outstanding on the Ninth
Amendment
Effectiveness Date, the undivided interests and participations
therein of the
Terminating Lenders shall terminate and each of the Amended and
Restated
Lenders shall be deemed to have purchased from the Fronting Bank
pursuant to
Section 2.3(e) of the Credit Agreement an undivided interest and
participation
in such Letters of Credit to the extent of such Amended and
Restated Lender's
Commitment percentage, (iv) the Borrowers shall pay any accrued but
unpaid
interest and Fees owing to the Terminating Lenders as of the Ninth
Amendment
Effectiveness Date and (v) the Terminating Lenders shall no longer
be Lenders
under the Credit Agreement.
Section 5. Representations and Warranties. Each Borrower
represents
and warrants to the Lenders that:
5.1 After giving effect to the Ninth Amendment and the
amendment and restatement of the Credit Agreement and taking
into
account all prior written waivers and amendments in respect of
the
Credit Agreement, the representations and warranties of the
Borrowers
contained in Section 3 of the Credit Agreement are true and correct
in
all material respects on and as of the date hereof as if such
representations and warranties had been made on and as of the
date
hereof (except to the extent that any such representations and
warranties specifically relate to an earlier date); and
5.2 After giving effect to the Ninth Amendment and the
amendment and restatement of the Credit Agreement and taking
into
account all prior written waivers and amendments in respect of
the
Credit Agreement, (i) each Borrower is in compliance with all
the
terms and provisions set forth in the Credit Agreement, and (ii)
no
Event of Default has occurred and is continuing or would result
from
the execution, delivery and performance of this Ninth
Amendment.
Section 6. Choice of Law. THIS NINTH AMENDMENT SHALL IN ALL
RESPECTS
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN
SUCH STATE
AND THE BANKRUPTCY CODE.
Section 7. Full Force and Effect. Except as specifically amended
or
waived hereby, all of the terms and conditions of the Credit
Agreement shall
remain in full force and effect, and the same are hereby ratified
and
confirmed. No reference to this Ninth Amendment need be made in any
instrument
or document at any time referring to the Credit Agreement, and a
reference to
the Credit Agreement in any such instrument or document shall be
deemed a
reference to the Credit Agreement as amended hereby.
Section 8. Counterparts; Electronic Signatures. This Ninth
Amendment
may be executed in any number of counterparts, each of which shall
constitute
an original, but all of which taken together shall constitute one
and the same
agreement. The Administrative Agent may, in its discretion, agree
to accept
notices and other communications to it hereunder by electronic
communications
pursuant to procedures approved by it; provided that approval of
such
procedures may be limited to particular notices or
communications.
Section 9. Headings. Section headings used herein are for
convenience
only and are not to affect the construction of or be taken into
consideration
in interpreting this Ninth Amendment.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Ninth
Amendment to be duly executed as of the day and the year first
written.
BORROWERS:
INTERSTATE BAKERIES CORPORATION
By:
---------------------------------
Name:
Title:
ARMOUR AND MAIN REDEVELOPMENT
CORPORATION
By:
---------------------------------
Name:
Title:
BAKER'S INN QUALITY BAKED GOODS, LLC
By:
---------------------------------
Name:
Title:
IBC SALES CORPORATION
By:
---------------------------------
Name:
Title:
<PAGE>
IBC SERVICES, LLC
By:
---------------------------------
Name:
Title:
IBC TRUCKING, LLC
By:
---------------------------------
Name:
Title:
INTERSTATE BRANDS CORPORATION
By:
--------------------------------
Name:
Title:
NEW ENGLAND BAKERY DISTRIBUTORS,
L.L.C.
By:
---------------------------------
Name:
Title:
<PAGE>
LENDERS:
JPMORGAN CHASE BANK, N.A.
Individually and as Administrative
Agent and Collateral Agent
By:
---------------------------------
Name:
Title:
<PAGE>
--------------------------------------
[Lender name]
By:
----------------------------------
Name:
Title:
Lender signature page to
Ninth Amendment to
Revolving Credit Agreement
<PAGE>
EXHIBIT A
FORM OF AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
------------------------------------------------------------------------------
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
------------------------------------------------------------------------------
Among
INTERSTATE BAKERIES CORPORATION,
a Debtor and Debtor-in-Possession under
Chapter 11 of the Bankruptcy Code,
as Parent Borrower,
CERTAIN OF THE DIRECT AND INDIRECT SUBSIDIARIES
OF INTERSTATE BAKERIES CORPORATION,
Debtors and
Debtors-in-Possession under Chapter 11 of the Bankruptcy Code,
as Subsidiary Borrowers,
and
THE LENDERS PARTY HERETO,
and
JPMORGAN CHASE BANK, N.A.
as Administrative Agent
------------------------------------------------------------------------------
Dated as of [___________], 2007
<PAGE>
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
<S>
<C>
<C>
SECTION 1.
DEFINITIONS.....................................................................................2
SECTION 1.1
Defined
Terms............................................................................2
SECTION 1.2
Terms
Generally.........................................................................24
SECTION 1.3
Accounting Terms;
GAAP..................................................................24
SECTION 2.
AMOUNT AND TERMS OF
CREDIT.....................................................................25
SECTION 2.1
Commitment of the
Lenders...............................................................25
SECTION 2.2
Availability of Commitment; Borrowing
Base..............................................25
SECTION 2.3
Letters of
Credit.......................................................................26
SECTION 2.4
Issuance................................................................................28
SECTION 2.5
Nature of Letter of Credit Obligations
Absolute.........................................28
SECTION 2.6
Making of
Loans.........................................................................29
SECTION 2.7
Repayment of Loans and Unreimbursed Draws; Evidence of
Debt.............................29
SECTION 2.8
Interest on
Loans.......................................................................30
SECTION 2.9
Default
Interest........................................................................31
SECTION 2.10
Optional Termination or Reduction of
Commitment.........................................31
SECTION 2.11
Alternate Rate of
Interest..............................................................31
SECTION 2.12
Refinancing of
Loans....................................................................31
SECTION 2.13
Mandatory Prepayment; Commitment
Termination............................................32
SECTION 2.14
Optional Prepayment of Loans; Reimbursement of
Lenders..................................33
SECTION 2.15
Reserve Requirements; Change in
Circumstances...........................................35
SECTION 2.16
Change in
Legality......................................................................36
SECTION 2.17
Pro Rata Treatment,
etc.................................................................37
SECTION 2.18
Taxes...................................................................................37
SECTION 2.19
Certain
Fees............................................................................40
SECTION 2.20
Commitment
Fee..........................................................................40
SECTION 2.21
Letter of Credit
Fees...................................................................40
SECTION 2.22
Nature of
Fees..........................................................................40
SECTION 2.23
Priority and
Liens......................................................................40
SECTION 2.24
Use of Cash
Collateral..................................................................42
SECTION 2.25
Right of
Set-Off........................................................................42
SECTION 2.26
Security
Interest in Letter of Credit
Account...........................................43
SECTION 2.27
Payment of
Obligations..................................................................43
SECTION 2.28
No Discharge; Survival of
Claims........................................................43
SECTION 2.29
Replacement of Certain
Lenders..........................................................43
SECTION 3.
REPRESENTATIONS AND
WARRANTIES.................................................................44
SECTION 3.1
Organization and
Authority..............................................................44
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>
<C>
<C>
SECTION 3.2
Due
Execution...........................................................................44
SECTION 3.3
Statements
Made.........................................................................45
SECTION 3.4
Financial
Statements....................................................................45
SECTION 3.5
Ownership...............................................................................46
SECTION 3.6
Liens...................................................................................46
SECTION 3.7
Compliance with
Law.....................................................................46
SECTION 3.8
Insurance...............................................................................46
SECTION 3.9
The
Orders..............................................................................46
SECTION 3.10
Use of
Proceeds.........................................................................47
SECTION 3.11
Litigation..............................................................................47
SECTION 3.12
Intellectual
Property...................................................................47
SECTION 3.13
Taxes...................................................................................47
SECTION 3.14
Investment Company Act; Other
Regulations...............................................47
SECTION 3.15
ERISA
Matters...........................................................................47
SECTION 4.
CONDITIONS OF
LENDING..........................................................................48
SECTION 4.1
Conditions Precedent to Initial Loan and Initial Letter of
Credit.......................48
SECTION 4.2
Conditions Precedent to Each Loan and Each Letter of
Credit.............................50
SECTION 5.
AFFIRMATIVE
COVENANTS..........................................................................52
SECTION 5.1
Financial Statements, Reports,
etc......................................................52
SECTION 5.2
Existence...............................................................................55
SECTION 5.3
Insurance...............................................................................55
SECTION 5.4
Obligations and
Taxes...................................................................56
SECTION 5.5
Notice of Event of Default,
etc.........................................................56
SECTION 5.6
Access to Books and
Records.............................................................56
SECTION 5.7
Maintenance of Concentration
Account....................................................57
SECTION 5.8
Borrowing Base
Certificate..............................................................57
SECTION 5.9
Compliance with
Laws....................................................................58
SECTION 5.10
Environmental
Laws......................................................................58
SECTION 5.11
........................................................................................58
SECTION 5.11
CEO.....................................................................................58
SECTION 6.
NEGATIVE
COVENANTS.............................................................................58
SECTION 6.1
Liens...................................................................................58
SECTION 6.2
Merger,
etc.............................................................................59
SECTION 6.3
Indebtedness............................................................................59
SECTION 6.4
Capital
Expenditures....................................................................59
SECTION 6.5
EBITDA..................................................................................59
SECTION 6.6
Guarantees and Other
Liabilities........................................................60
SECTION 6.7
Chapter 11
Claims.......................................................................60
SECTION 6.8
Dividends; Capital
Stock................................................................60
SECTION 6.9
Transactions with
Affiliates............................................................61
SECTION 6.10
Investments, Loans and
Advances.........................................................61
SECTION 6.11
Disposition of
Assets...................................................................61
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
<S>
<C>
<C>
SECTION 6.12
Nature of
Business......................................................................61
SECTION 6.13
Transactions among
Borrowers............................................................61
SECTION 6.14
Right of Subrogation among
Borrowers....................................................61
SECTION 6.15
Derivative
Agreements...................................................................61
SECTION 6.16
Reorganization
Plan.....................................................................62
SECTION 6.17
Cash Restructuring
Charges..............................................................62
SECTION 7.
EVENTS OF
DEFAULT..............................................................................62
SECTION 7.1
Events of
Default.......................................................................62
SECTION 8.
THE ADMINISTRATIVE
AGENT.......................................................................66
SECTION 8.1
Administration by Administrative
Agent..................................................66
SECTION 8.2
Advances and
Payments...................................................................66
SECTION 8.3
Sharing of
Setoffs......................................................................67
SECTION 8.4
Agreement of Required
Lenders...........................................................67
SECTION 8.5
Liability of Administrative
Agent.......................................................67
SECTION 8.6
Reimbursement and
Indemnification.......................................................68
SECTION 8.7
Rights of Administrative
Agent..........................................................68
SECTION 8.8
Independent
Lenders.....................................................................68
SECTION 8.9
Notice of
Transfer......................................................................69
SECTION 8.10
Successor Administrative
Agent..........................................................69
SECTION 9.
MISCELLANEOUS..................................................................................69
SECTION 9.1
Notices.................................................................................69
SECTION 9.2
Survival of Agreement, Representations and Warranties,
etc..............................70
SECTION 9.3
Successors and
Assigns..................................................................70
SECTION 9.4
Confidentiality.........................................................................73
SECTION 9.5
Expenses................................................................................73
SECTION 9.6
Indemnity...............................................................................74
SECTION 9.7
Choice of
Law...........................................................................74
SECTION 9.8
No
Waiver...............................................................................74
SECTION 9.9
Extension of
Maturity...................................................................74
SECTION 9.10
Amendments,
etc.........................................................................74
SECTION 9.11
Severability............................................................................76
SECTION 9.12
Headings................................................................................76
SECTION 9.13
Execution in
Counterparts...............................................................76
SECTION 9.14
Prior Agreements;
Inconsistencies.......................................................76
SECTION 9.15
Further
Assurances......................................................................76
SECTION 9.16
Waiver of Jury
Trial....................................................................76
SECTION 9.17
Subordination of Intercompany
Indebtedness..............................................76
SECTION 9.18
Certain Post Closing
Matters............................................................77
SECTION 9.19
USA Patriot
Act.........................................................................79
</TABLE>
iii
<PAGE>
Annex A - Commitment Amounts
Exhibit A - Form of Interim Order
Exhibit A-1 - Form of Amendment Order Approving Eighth Amendment to
Revolving
Credit Agreement
Exhibit A-2 - Form of Amendment Order Approving Ninth Amendment
to Revolving Credit Agreement
Exhibit B - Form of Security and Pledge Agreement
Exhibit C-1 - Form of Weekly Borrowing Base Certificate
Exhibit C-2 - Form of Monthly Borrowing Base Certificate
Exhibit D - Form of Opinion of Counsel
Exhibit E - Form of Assignment and Acceptance
Schedule 1.1 - Eligible Real Property
Schedule 3.5 - Subsidiaries
Schedule 3.6 - Liens
Schedule 3.12 - Intellectual Property
Schedule 6.9 - Transactions with Affiliates
Schedule 6.10 - Other Investments
Schedule 6.13 - Borrower Transaction Restrictions
iv
<PAGE>
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
Dated as of [___________], 2007
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT, dated as of
[___________], 2007, among INTERSTATE BAKERIES CORPORATION, a
Delaware
corporation ("Parent Borrower"), a debtor and debtor-in-possession
in a case
pending under Chapter 11 of the Bankruptcy Code, and each of the
direct and
indirect subsidiaries of the Parent Borrower party to this
Agreement (each
individually a "Subsidiary Borrower" and collectively the
"Subsidiary
Borrowers"; and together with the Parent Borrower, the
"Borrowers"), each of
which is a debtor and debtor-in-possession in a case pending under
Chapter 11 of
the Bankruptcy Code (the cases of the Borrowers, each a "Case" and
collectively,
the "Cases"), JPMORGAN CHASE BANK, N.A., a national banking
association
(formerly known as JPMorgan Chase Bank) ("JPMCB"), and each of the
other
commercial banks, finance companies, insurance companies or other
financial
institutions or funds from time to time party hereto (together with
JPMCB, the
"Lenders"), J.P. MORGAN SECURITIES INC., as lead arranger and book
runner,
JPMORGAN CHASE BANK, N.A. (formerly known as JPMorgan Chase Bank),
as
administrative agent (in such capacity, the "Administrative Agent")
for the
Lenders, and JPMORGAN CHASE BANK N.A. (formerly known as JPMorgan
Chase Bank),
as collateral agent (in such capacity, the "Collateral Agent") for
the Lenders.
INTRODUCTORY STATEMENT
WHEREAS, on September 22, 2004, the Borrowers filed voluntary
petitions with the Bankruptcy Court initiating the Cases and have
continued in
the possession of their assets and in the management of their
businesses
pursuant to Sections 1107 and 1108 of the Bankruptcy Code; and
WHEREAS, the Borrowers have applied to the Lenders for a
revolving credit and letter of credit facility in an aggregate
principal amount
not to exceed $200,000,000 (subject to the terms and conditions of
this
Agreement); and
WHEREAS, the proceeds of the Loans will be used for (i)
working capital, letters of credit and capital expenditures; (ii)
other general
corporate purposes of the Borrowers; (iii) payment of any related
transaction
costs, fees and expenses; and (iv) the costs of administration of
the Cases, all
as provided for herein; and
WHEREAS, to provide for the repayment of the Loans, the
reimbursement of any draft drawn under a Letter of Credit and the
payment of the
other obligations of the Borrowers hereunder and under the other
Loan Documents
(including, without limitation, the Obligations of the Borrowers
under Section
6.3(v)), the Borrowers will provide to the Administrative Agent and
the Lenders
the following (each as more fully described herein):
(a) an allowed Superpriority Claim;
(b) a perfected first priority Lien, pursuant to Section
364(c)(2) of the Bankruptcy Code, upon all unencumbered property of
the
Borrowers and on all cash and cash equivalents in the Letter of
Credit
Account, provided that following the Termination Date,
<PAGE>
amounts in the Letter of Credit Account shall not be subject to the
Carve-Out
hereinafter referred to;
(c) a perfected Lien, pursuant to Section 364(c)(3) of the
Bankruptcy Code, upon all property of the Borrowers that is subject
to valid
and perfected Permitted Liens in existence on the Filing Date or
that is
subject to valid Permitted Liens in existence on the Filing Date
that are
perfected subsequent to the Filing Date as permitted by Section
546(b) of the
Bankruptcy Code; and
(d) a perfected first priority priming Lien, pursuant to
Section 364(d)(1) of the Bankruptcy Code, upon all property of the
Borrowers
(including, without limitation, inventory, accounts receivable,
rights under
license agreements, and property, plant and equipment), that is
subject to the
existing Liens (the "Primed Liens") which secure (i) the
obligations of the
Borrowers to the lenders party to the Pre-Petition Credit
Agreement, and (ii)
other obligations or indebtedness of the Borrowers, which first
priority
priming Lien in favor of the Administrative Agent and the Lenders
shall be
senior in all respects to all of the Primed Liens; and
WHEREAS, all of the claims granted hereunder in the Cases to
the Administrative Agent and the Lenders shall be subject to the
Carve-Out to
the extent provided in Section 2.23.
Accordingly, the parties hereto hereby agree as follows:
SECTION 1.
DEFINITIONS
SECTION 1.1 Defined Terms.
As used in this Agreement, the following terms shall have the
meanings specified below:
"ABA Pension Plan" shall mean the American Bakers Association
Retirement Plan, a defined benefit pension plan established in 1961
to provide
pension benefits to certain employees of several unrelated
companies in the
baking industry, including, without limitation, the Borrowers.
"ABR Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance
with the
provisions of Section 2.
"Account" shall mean any right to payment for goods sold in
the ordinary course of business, regardless of how such right is
evidenced and
whether or not it has been earned by performance.
"Account Debtor" means, with respect to any Account, the
obligor with respect to such Account.
"Act" shall have the meaning given such term in Section 9.19.
"Additional Credit" shall have the meaning given such term in
Section 4.2(d).
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"Adjusted Eligible Accounts Receivable" shall mean Eligible
Accounts Receivable, minus the Dilution Reserve.
"Adjusted LIBOR Rate" shall mean, 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
the quotient of
(i) the LIBOR Rate in effect for such Interest Period divided by
(ii) a
percentage (expressed as a decimal) equal to 100% minus Statutory
Reserves. For
purposes hereof, the term "LIBOR Rate" shall mean the rate (rounded
upwards, if
necessary, to the next 1/16 of 1%) at which dollar deposits
approximately equal
in principal amount to such Eurodollar Borrowing and for a maturity
comparable
to such Interest Period are offered to 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 (2) Business
Days prior to
the commencement of such Interest Period.
"Administrative Agent" shall have the meaning set forth in the
Introduction.
"Administrative Questionnaire" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"Affected Lender" shall have the meaning given such term in
Section 2.29.
"Affiliate" shall mean, as to any Person, any other Person
which, directly or indirectly, is in control of, is controlled by,
or is under
common control with, such Person. For purposes of this definition,
a Person (a
"Controlled Person") shall be deemed to be "controlled by" another
Person (a
"Controlling Person") if the Controlling Person possesses, directly
or
indirectly, power to direct or cause the direction of the
management and
policies of the Controlled Person whether by contract or
otherwise.
"Agreement" shall mean this Amended and Restated Revolving
Credit Agreement, as the same may from time to time be amended,
restated,
modified or supplemented.
"Alternate Base Rate" shall mean, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) 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%. For purposes hereof, "Prime Rate" shall
mean the rate
of interest per annum publicly announced from time to time by the
Administrative
Agent as its prime rate in effect at its principal office in New
York City; each
change in the Prime Rate shall be effective on the date such change
is publicly
announced. "Base CD Rate" shall mean the sum of (i) the quotient of
(a) the
Three-Month Secondary CD Rate divided by (b) a percentage expressed
as a decimal
equal to 100% minus Statutory Reserves and (ii) the Assessment
Rate.
"Three-Month Secondary CD Rate" shall mean, 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 shall not be 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 shall not be so reported
on such day
or such next preceding Business Day, the average of the secondary
market
quotations for
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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 shall not be a Business Day, on the next preceding
Business
Day) by the Administrative Agent from three New York City
negotiable
certificate of deposit dealers of recognized standing selected by
it. "Federal
Funds Effective Rate" shall mean, for any day, the weighted average
of the
rates on overnight Federal funds transactions with members of the
Federal
Reserve System arranged by Federal funds brokers, as published on
the next
succeeding Business Day by the Federal Reserve Bank of New York,
or, if such
rate is not so published for any day which is a Business Day, the
average of
the quotations for the day of such transactions received by the
Administrative
Agent from three Federal funds brokers of recognized standing
selected by it.
If for any reason the Administrative Agent shall have determined
(which
determination shall be conclusive absent manifest error) that it is
unable to
ascertain the Base CD Rate or the Federal Funds Effective Rate or
both for any
reason, including the inability or failure of the Administrative
Agent to
obtain sufficient quotations in accordance with the terms hereof,
the
Alternate Base Rate shall be determined without regard to clause
(ii) of the
first sentence of this definition, as appropriate, until the
circumstances
giving rise to such inability no longer exist. Any change in the
Alternate
Base Rate due to a change in the Prime Rate, the Three-Month
Secondary CD Rate
or the Federal Funds Effective Rate shall be effective on the
effective date
of such change in the Prime Rate, the Three-Month Secondary CD Rate
or the
Federal Funds Effective Rate, respectively.
"Amendment Order" shall mean, collectively, (i) an order of
the Bankruptcy Court in substantially the form of Exhibit A-1
approving the
Eighth Amendment to Revolving Credit Agreement and (ii) an order of
the
Bankruptcy Court in substantially the form of Exhibit A-2 approving
the Ninth
Amendment to Revolving Credit Agreement dated as of [____________],
2007, or in
each case such other forms as otherwise agreed by the
Administrative Agent and
the Borrowers.
"Amounts" shall have the meaning given such term in Section
2.18(a).
"Approved Fund" means, with respect to any Lender that is a
fund that invests in bank loans and similar commercial extensions
of credit, any
other fund that invests in bank loans and similar commercial
extensions of
credit and is managed by the same investment advisor as such Lender
or by a
Lender Affiliate of such investment advisor.
"Assessment Rate" shall mean for any date the annual rate
(rounded upwards, if necessary, to the next 1/100 of 1%) most
recently estimated
by the Administrative Agent as the then current net annual
assessment rate that
will be employed in determining amounts payable by the
Administrative Agent to
the Federal Deposit Insurance Corporation (or any successor) for
insurance by
such Corporation (or any successor) of time deposits made in
dollars at the
Administrative Agent's domestic offices.
"Asset Sale" shall mean a sale, lease or sub-lease (as lessor
or sublessor), sale and leaseback, assignment, conveyance, transfer
or other
disposition to, or any exchange of property with, any Person (other
than a
Borrower), in one transaction or series of transactions, of all or
any part of
the Borrowers' or any of their Subsidiaries' businesses, assets or
properties of
any kind, whether real, personal, or mixed and whether tangible or
intangible,
whether now owned or hereafter acquired, including, without
limitation, the
capital stock of any of the Borrowers (other
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<PAGE>
than the Parent Borrower) or their Subsidiaries in each case other
than (i)
Inventory, including scrap or obsolete Inventory, sold in the
ordinary course
of business, and (ii) sales of assets for aggregate consideration
of less than
$100,000 with respect to any transaction or series of related
transactions.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an Eligible Assignee, and
accepted by
the Administrative Agent, substantially in the form of Exhibit
E.
"Available Cash" means, on any date, (a) the fair market value
on such date of cash and cash equivalents held in securities
accounts of the
Borrowers and their Subsidiaries, and (b) the amount of available
funds held on
such date in bank deposit accounts of the Borrowers and their
Subsidiaries.
"Available Commitment" shall have the meaning given to such
term in Section 2.2(b).
"Bankruptcy Code" shall mean The Bankruptcy Reform Act of
1978, as heretofore and hereafter amended, and codified as 11
U.S.C. Section 101
et seq.
"Bankruptcy Court" shall mean the United States Bankruptcy
Court for the Western District of Missouri or any other court
having
jurisdiction over the Cases from time to time.
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"Borrowers" shall have the meaning set forth in the
Introduction.
"Borrowing" shall mean the incurrence of Loans of a single
Type made from all the Lenders on a single date and having, in the
case of
Eurodollar Loans, a single Interest Period (with any ABR Loan made
pursuant to
Section 2.16 being considered a part of the related Borrowing of
Eurodollar
Loans).
"Borrowing Base" shall mean, at the time of any determination,
an amount equal to the sum, without duplication, of (a) 85% of
Adjusted Eligible
Accounts Receivable plus (b) 40% of Eligible Inventory, plus (c)
the Real
Property Component, minus (d) the amount of the Environmental
Reserve at such
time, minus (e) the Carve-Out. The Borrowing Base at any time shall
be
determined by reference to the most recent Borrowing Base
Certificate delivered
to the Administrative Agent pursuant to Section 5.8 of the
Agreement. Subject to
the limitations and requirements set forth in Section 9.10(a) of
the Agreement,
standards of eligibility and reserves and advance rates of the
Borrowing Base
may be revised and adjusted from time to time by the Administrative
Agent in its
sole discretion, with any changes in such standards to be effective
three (3)
Business Days after delivery of notice thereof to the
Borrowers.
"Borrowing Base Certificate" shall mean a certificate
substantially in the form of Exhibit C-1 hereto (with respect to
the certificate
to be delivered by the Borrowers weekly) and Exhibit C-2 hereto
(with respect to
the certificate to be delivered by the Borrowers monthly)
5
<PAGE>
(in each case with such changes therein as may be required by
the
Administrative Agent from time to time to reflect the components of
and
reserves against the Borrowing Base as provided for hereunder from
time to
time), executed and certified as accurate and complete by a
Financial Officer
of each of the Borrowers, which shall include appropriate exhibits,
schedules
and supporting documentation, and additional reports as (i)
outlined in
Exhibits C-1 and C-2, (ii) as requested by the Administrative
Agent, and (iii)
as provided in Section 5.8.
"Budget" shall have the meaning set forth in Section 5.1(g).
"Budget Acceptance Date" shall have the meaning set forth in
Section 2.2(c).
"Business Day" shall mean any day other than a Saturday,
Sunday or other day on which banks in the State of New York are
required or
permitted to close (and, for a Letter of Credit, other than a day
on which the
Fronting Bank issuing such Letter of Credit is closed); provided,
however, 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
on the London interbank market.
"Capital Expenditures" shall mean, for any period, the
aggregate of all expenditures (whether paid in cash and not
theretofore accrued
subsequent to the date of this Agreement or accrued as liabilities
during such
period and including that portion of Capitalized Leases which is
capitalized on
the consolidated balance sheet of the Borrowers and their
Subsidiaries) by the
Borrowers and their Subsidiaries during such period that, in
conformity with
GAAP, are required to be included in or reflected by the property,
plant,
equipment or intangibles or similar fixed asset accounts reflected
in the
consolidated balance sheet of the Borrowers and their Subsidiaries
(including
equipment which is purchased simultaneously with the trade-in of
existing
equipment owned by any of the Borrowers or their Subsidiaries to
the extent of
the gross amount of such purchase price less the book value of the
equipment
being traded in at such time), but excluding expenditures made in
connection
with the replacement or restoration of assets, to the extent
reimbursed or
financed from insurance proceeds paid on account of the loss of or
the damage to
the assets being replaced or restored, or from awards of
compensation arising
from the taking by condemnation or eminent domain of such assets
being replaced.
"Capitalized Lease" shall mean, as applied to any Person, any
lease of property by such Person as lessee which would be
capitalized on a
balance sheet of such Person prepared in accordance with GAAP.
"Carve-Out" shall have the meaning set forth in Section
2.23(a).
"Cases" has the meaning set forth in the Introduction.
"Change of Control" shall mean with respect to the Parent
Borrower and any Subsidiary Borrower: (i) the acquisition of
ownership, directly
or indirectly, beneficially or of record, by any Person or group
(within the
meaning of the Securities Exchange Act of 1934 and the rules of the
Securities
and Exchange Commission thereunder as in effect on the date
hereof), of shares
representing more than 25% of the aggregate ordinary voting power
represented by
the issued and outstanding capital stock of such Borrower; or (ii)
the
occupation of a majority of the
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<PAGE>
seats (other than vacant seats) on the board of directors of such
Borrower,
after the Filing Date, by Persons who were neither (a) nominated by
the board
of directors of such Borrower nor (b) appointed by the directors so
nominated.
"Closing Date" shall mean the date on which this Agreement has
been executed and the conditions precedent to the making of the
initial Loans
set forth in Section 4.1 have been satisfied or waived, which date
shall occur
as promptly as is practicable after the date of this Agreement, but
in no event
later than ten (10) days following the entry of the Interim
Order.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Collateral" shall mean the Collateral described in the
Security and Pledge Agreement.
"Collateral Agent" shall have the meaning set forth in the
Introduction.
"Commitment" shall mean the commitment of each Lender
hereunder to make Loans and to issue and/or participate in Letters
of Credit in
the amount set forth opposite its name on Annex A hereto or as may
subsequently
be set forth in the Register from time to time, as the same may be
reduced from
time to time pursuant to the terms of this Agreement.
"Commitment Fee" shall have the meaning set forth in Section
2.20.
"Commitment Letter" shall mean that certain Commitment Letter
dated September 20, 2004 among the Administrative Agent, J.P.
Morgan Securities,
Inc. and the Borrowers.
"Commitment Fee Percentage" shall mean 0.50% per annum.
"Commitment Percentage" shall mean at any time, with respect
to each Lender, the percentage obtained by dividing its Commitment
at such time
by the Total Commitment, as applicable, at such time.
"Consolidated EBITDA" shall mean, for any period, all as
determined in accordance with GAAP and subject to such
modifications as may be
satisfactory to the Administrative Agent, the consolidated net
income (or net
loss) of the Borrowers for such period, plus (a) the sum of (i)
depreciation
expense, (ii) amortization expense, (iii) other non-cash charges,
(iv) net total
Federal, state and local income tax expense, (v) gross interest
expense for such
period less gross interest income for such period, (vi)
extraordinary losses,
(vii) any restructuring charge, (viii) non-cash expenses related to
the ABA
Pension Plan exceeding $320,000 per fiscal monthly period, and (ix)
"Chapter 11
expenses" (or "administrative costs reflecting Chapter 11
expenses", inclusive
of professional fees) as shown on the Borrowers' consolidated
statement of
income for such period, less (b) extraordinary gains.
"Consummation Date" shall mean the date of the substantial
consummation (as defined in Section 1101 of the Bankruptcy Code and
which for
purposes of this Agreement shall be no later than the effective
date) of a
Reorganization Plan of the Borrowers that is confirmed pursuant to
an order of
the Bankruptcy Court in the Cases.
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"Default" shall have the meaning given such term in Section
2.23(a).
"Dilution Factors" shall mean, without duplication, with
respect to any period, the aggregate amount of all deductions,
credit memos,
returns, adjustments, allowances, bad debt write-offs and other
non-cash credits
which are recorded to reduce accounts receivable in a manner
consistent with
current and historical accounting practices of the Borrowers.
"Dilution Ratio" shall mean, at any date, the amount
(expressed as a percentage) equal to (a) the aggregate amount of
the applicable
Dilution Factors for the twelve (12) most recently ended fiscal
months divided
by (b) total gross sales for the twelve (12) most recently ended
fiscal months.
"Dilution Reserve" shall mean, at any date, the applicable
Dilution Ratio multiplied by the Eligible Accounts Receivable on
such date, but
only to the extent the Dilution Ratio exceeds 5%.
"Dollars" and "$" shall mean lawful money of the United States
of America.
"Domestic Subsidiary" shall mean any Subsidiary incorporated,
organized or formed under the laws of any jurisdiction of the
United States.
"Eligible Assignee" shall mean (i) a commercial bank having
total assets in excess of $1,000,000,000; (ii) a finance company,
insurance
company or other financial institution or fund, in each case
acceptable to the
Administrative Agent, which in the ordinary course of business
extends credit of
the type contemplated herein and has total assets in excess of
$200,000,000 and
whose becoming an assignee would not constitute a prohibited
transaction under
Section 4975 of ERISA; and (iii) any other financial institution
satisfactory to
the Borrowers and the Administrative Agent.
"Eligible Accounts Receivable" means, at the time of any
determination thereof, each Account that satisfies the following
criteria at the
time of creation and continues to meet the same at the time of
such
determination: such Account (i) has been invoiced to, and
represents the bona
fide amounts due to the Borrowers from, the purchaser of goods or
services, in
each case originated in the ordinary course of business of the
Borrowers and
(ii) in each case is subject to the Borrowers' corporate accounts
receivable
credit and collection policies, procedures and practices and (iii)
is not
ineligible for inclusion in the calculation of the Borrowing Base
pursuant to
any of clauses (a) through (s) below or otherwise deemed by the
Administrative
Agent in its sole discretion to be ineligible for inclusion in the
calculation
of the Borrowing Base as described below. Without limiting the
foregoing, to
qualify as Eligible Accounts Receivable, an Account shall indicate
no person
other than a Borrower as payee or remittance party. In determining
the amount to
be so included, the face amount of an Account shall be reduced by,
without
duplication, to the extent not reflected in such face amount, (i)
the amount of
all accrued and actual discounts, claims, credits or credits
pending,
promotional program allowances, price adjustments, finance charges
or other
allowances (including any amount that the Borrowers, as applicable,
may be
obligated to rebate to a customer pursuant to the terms of any
agreement or
understanding (written or oral)), (ii) the aggregate amount of all
limits and
deductions provided for in this definition and elsewhere in this
Agreement and
(iii) the aggregate amount of all cash
8
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received in respect of such Account but not yet applied by the
Borrowers to
reduce the amount of such Account. Unless otherwise approved from
time to time
in writing by the Administrative Agent (subject to the limitations
and
requirements set forth in Section 9.10(a)), no Account shall be an
Eligible
Account Receivable if, without duplication:
(a) the relevant Borrower does not have sole lawful and
absolute title to such Account; or
(b) the Account (i) is unpaid more than fifty-six (56) days
from the original date of invoice or (ii) has been written off the
books of
the Borrowers or has been otherwise designated on such books as
uncollectible;
or
(c) more than 50% in face amount of all Accounts of the same
Account Debtor are ineligible pursuant to clause (b) above; or
(d) the Account Debtor is insolvent or the subject of any
bankruptcy case or insolvency proceeding of any kind or is of
uncertain credit
quality, as determined by the Administrative Agent in its
exclusive
discretion; or
(e) the Account is not payable in Dollars or the Account
Debtor is either not organized under the laws of the United States
of America,
any State thereof, or the District of Columbia or is located
outside or has
its principal place of business or substantially all of its assets
outside the
United States, except to the extent the Account is supported by an
irrevocable
letter of credit satisfactory to the Administrative Agent (as to
form,
substance and issuer) and assigned to and directly drawable by
the
Administrative Agent; or
(f) the Account Debtor is the United States of America or
any department, agency or instrumentality thereof, unless the
relevant
Borrower duly assigns its rights to payment of such Account to
the
Administrative Agent pursuant to the Assignment of Claims Act of
1940, as
amended, which assignment and related documents and filings shall
be in form,
and substance satisfactory to the Administrative Agent; or
(g) the Account is supported by a security deposit (to the
extent received from the applicable Account Debtor), progress
payment,
retainage or other similar advance made by or for the benefit of
the
applicable Account Debtor, in each case to the extent thereof;
or
(h) (i) it is not subject to a valid and perfected first
priority Lien in favor of the Administrative Agent for the benefit
of the
Secured Parties, subject to no other Liens other than Liens (if
any) permitted
by the Loan Documents or (ii) it does not otherwise conform in all
material
respects to the representations and warranties contained in the
Loan Documents
relating to Accounts; or
(i) such Account was invoiced (i) in advance of goods or
services provided, or (ii) twice, or (iii) the associated income
has not been
earned; or
(j) such Account is a non-trade Account or relates to
payment of interest or is classified as a note receivable by the
Borrowers in
accordance with the Borrowers' current and historical practices;
or
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(k) the sale to the Account Debtor is on a bill-and-hold,
guaranteed sale, sale-and-return, ship-and-return, sale on
approval, extended
terms or consignment or other similar basis or made pursuant to any
other
written agreement providing for repurchase or return of any
merchandise which
has been claimed to be defective or otherwise unsatisfactory;
or
(l) the goods giving rise to such Account have not been
shipped and title has not been transferred to the Account Debtor,
or the
Account represents a progress-billing or otherwise does not
represent a
completed sale; for purposes hereof "progress-billing" means any
invoice for
goods sold or leased or services rendered under a contract or
agreement
pursuant to which the Account Debtor's obligation to pay such
invoice is
conditioned upon a Borrower's completion of any further performance
under the
contract or agreement; or
(m) the Account arises out of a sale made by a Borrower to
an employee, officer, agent, director, stockholder, Subsidiary or
Affiliate of
a Borrower, or the Account Debtor is an Affiliate of a Borrower;
or
(n) such Account was not paid in full, and the Borrower
created a new receivable for the unpaid portion of the Account,
without the
agreement of the customer, and other Accounts constituting
chargebacks, debit
memos and other adjustments for unauthorized deductions; or
(o) the Account is created on cash on delivery terms; or
(p) the Account Debtor
(i) is a creditor of a Borrower, (ii)
has, may assert, has asserted or is reasonably expected to assert a
right of
set-off against a Borrower or (iii) has disputed or is reasonably
expected to
dispute its liability (whether by chargeback or otherwise) or made,
may make
or is reasonably expected to make any claim with respect to the
Account or any
other Account of a Borrower which has not been resolved, in each
case, without
duplication, to the extent of the amount owed by such Borrower to
the Account
Debtor, the amount of such actual or asserted right of set-off, or
the amount
of such dispute or claim, as the case may be; or
(q) the Account does not comply in all material respects
with the requirements of all applicable laws and regulations,
whether Federal,
state or local, including without limitation the Federal Consumer
Credit
Protection Act, the Federal Truth in Lending Act and Regulation Z
of the
Board; or
(r) to all or any part of such Account, a check, promissory
note, draft, trade acceptance or other Instrument for the payment
of money has
been received, presented for payment and returned uncollected for
any reason;
or
(s) the Account is for goods that have been sold under a
purchase order or pursuant to the terms of a contract or other
agreement or
understanding (written or oral) that indicates that any Person
other than the
Borrowers has or has had or has purported to have or have had an
ownership
interest in such goods.
Notwithstanding the foregoing, all Accounts of any single
Account Debtor and its Affiliates which, in the aggregate exceed
(i) 30% in
respect of Account Debtors whose securities are rated Investment
Grade or (ii)
10% in respect of all other Account Debtors, of the total
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amount of all Eligible Accounts Receivable at the time of any
determination
shall be deemed not to be Eligible Accounts Receivable to the
extent of such
excess. In determining the aggregate amount of Accounts from the
same Account
Debtor that are unpaid more than fifty-six (56) days from the date
of invoice
pursuant to clause (b) above, there shall be excluded the amount of
any net
credit balances relating to Accounts with invoice dates more than
fifty-six
(56) days prior to the date of determination. Furthermore, no
Account shall be
an Eligible Account Receivable if it is for goods that have been
sold under a
purchase order or pursuant to the terms of a contract or other
agreement or
understanding (written or oral) that indicates that any Person
other than a
Borrower has or has had or has purported to have or have had an
ownership
interest in such goods.
"Eligible Finished Goods" shall mean Finished Goods that are
(i) first quality, (ii) located at plants and distribution centers
owned by a
Borrower, (iii) scheduled for delivery in the ordinary course of
business, and
(iv) otherwise constitute Eligible Inventory.
"Eligible Inventory" shall mean, on any date, the Inventory
Value of the Borrowers on such date deemed by the Administrative
Agent in its
sole discretion to be eligible for inclusion in the calculation of
the Borrowing
Base. Without limiting the foregoing, to qualify as "Eligible
Inventory", no
Person other than the Borrowers shall have any direct or indirect
ownership
interest or title to such Inventory. Unless otherwise from time to
time approved
in writing by the Administrative Agent (subject to the limitations
and
requirements set forth in Section 9.10(a)), no Inventory shall be
deemed
Eligible Inventory if (and without duplication):
(a) it is not owned solely by the Borrowers or the
Borrowers do not have sole and good, valid and unencumbered title
thereto; or
(b) it is not located in the United States; or
(c) it is not either (i) located on property owned by the
Borrowers, (ii) located in a third party warehouse or in another
location not
owned by the Borrowers, and, at the sole discretion of the
Borrowers, either (A)
covered by Landlord Lien Waiver or bailee letter, as applicable, in
each case in
form and substance reasonably acceptable to the Administrative
Agent, or (B) a
Rent Reserve has been taken with respect to such Inventory or (iii)
located at a
closed facility owned or leased by the Borrowers; or
(d) it is not subject to a valid and perfected first
priority Lien in favor of the Administrative Agent, except, with
respect to
Inventory stored at sites described in clause (c) above, for Liens
for unpaid
rent or normal and customary warehousing charges, in each case, not
yet paid, to
the extent of such unpaid rent or charges; or
(e) it is goods returned or rejected due to quality
issues by the Borrowers' customers or goods in transit to third
parties (other
than to warehouse sites described in clause (c) above); or
(f) it is seconds or thirds or stale or is obsolete or
slow moving or unmerchantable, or overstock or excess or does not
otherwise
conform to the representations and warranties contained in the Loan
Documents;
or
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<PAGE>
(g) it is comprised of operating supplies, packaging, film,
pallets, and/or other shipping materials or supplies, labels,
repair or
maintenance parts, fuel, tires, paint, cartons used in production
or other
containers, and any other such material not considered used for
sale by the
Administrative Agent from time to time, in the Administrative
Agent's sole
discretion; or
(h) the Borrowers classify such item as a sample item on
their perpetual inventory records, or the Borrowers use such item
for
marketing or display; or
(i) it is a discontinued product or component thereof; or
(j) any portion of the Inventory Value thereof is
attributable to intercompany profit among the Borrowers or their
Affiliates;
or
(k) any Inventory that is damaged or marked for return to
vendor; or
(l) any Inventory that is Work-In-Process or Finished Goods
other than Eligible Finished Goods; or
(m) it is consigned or at a customer location but still
accounted for in the Borrowers' perpetual inventory balance; or
(n) it is classified as "bakery outlet," "dry products,"
"Mrs. Cubbison's" or "crouton" inventory.
"Eligible Real Property' means the real property listed on
Schedule 1.1 (or otherwise reasonably acceptable to the
Administrative Agent
and owned by any of the Borrowers: (i) that is acceptable in the
sole
discretion of the Administrative Agent for inclusion in the Real
Property
Component, (ii) in respect of which an appraisal report has been
delivered to
the Administrative Agent in form, scope and substance reasonably
satisfactory
to the Administrative Agent; (iii) in respect of which the
Administrative
Agent is satisfied that all actions necessary or desirable in order
to create
valid first priority and subsisting Liens on such real property
have been
taken, including, without limitation, any action requested by
the
Administrative Agent under Section 2.23(b), (iv) in respect of
which an
environmental assessment report has been completed and delivered to
the
Administrative Agent in form and substance satisfactory to the
Administrative
Agent and which does not indicate any non-compliance with or
liability under,
or remediation action with respect to, any Environmental Law, and
(v) if
required by the Administrative Agent, which is adequately protected
by
fully-paid valid title insurance with endorsements and in amounts
acceptable
to the Administrative Agent, insuring that the Administrative Agent
for the
benefit of the Secured Parties, shall have valid first and
subsisting Liens on
such real property, evidence of which shall have been provided in
form and
substance satisfactory to the Administrative Agent.
"Environmental Laws" shall mean all laws, statutes,
ordinances, orders, rules, regulations, plans, policies or decrees
and the
like relating to (i) environmental matters, including, without
limitation,
those relating to fines, injunctions, penalties, damages,
contribution, cost
recovery compensation, losses or injuries resulting from the
release or
threatened release of "Hazardous Waste" or "Hazardous Substances"
(as such
terms are defined in any applicable Environmental Law), (ii) the
generation,
use, storage, transportation or
12
<PAGE>
disposal of Hazardous Waste or Hazardous Substance, or (iii)
occupational
safety and health, public health and safety, industrial hygiene or
protection
of wetlands, in any manner applicable to the Borrowers or any of
their
respective properties, including, without limitation, the
Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C.
ss. 9601 et
seq.), the Hazardous Materials Transportation Act (49 U.S.C. ss.
1801 et
seq.,), the Resource Conservation and Recovery Act (42 U.S.C. ss.
6901 et
seq.), the Federal Water Pollution Control Act (33 U.S.C. ss. 1251
et seq.),
the Clean Air Act (42 U.S.C. ss. 7401 et seq.), the Toxic
Substances Control
Act (15 U.S.C. ss. 2601 et seq.), the Federal Insecticide,
Fungicide and
Rodenticide Act (7 U.S.C. ss.136 et seq.), the Occupational Safety
and Health
Act (29 U.S.C. ss. 651 et seq.), and the Emergency Planning and
Community
Right-to-Know Act (42 U.S.C. ss. 11001 et seq.), each as amended
or
supplemented, and any analogous future or present local, state and
federal
statutes and regulations promulgated pursuant thereto, each as in
effect as of
the date of determination.
"Environmental Lien" shall mean a Lien in favor of any
Governmental Authority for (i) any liability under federal or
state
Environmental Laws, or (ii) damages arising from or costs incurred
by such
Governmental Authority in response to a release or threatened
release of a
hazardous or toxic waste, substance or constituent, or other
substance into the
environment.
"Environmental Reserve" means a reserve determined by the
Administrative Agent in its sole discretion for costs associated
with (a) the
generation, use, handling, transportation, storage, treatment or
disposal of any
Hazardous Materials, (b) exposure to any Hazardous Materials or (c)
any Release.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations
promulgated and
rulings issued thereunder.
"ERISA Affiliate" shall mean any trade or business (whether or
not incorporated) which is a member of a group of which any of the
Borrowers is
a member and which is under common control within the meaning of
Section 414(b)
or (c) of the Code and the regulations promulgated and rulings
issued
thereunder.
"Eurocurrency Liabilities" shall have the meaning assigned
thereto in Regulation D issued by the Board, as in effect from time
to time.
"Eurodollar Borrowing" shall mean a Borrowing comprised of
Eurodollar Loans.
"Eurodollar Loan" shall mean any Loan bearing interest at a
rate determined by reference to the Adjusted LIBOR Rate in
accordance with the
provisions of Section 2.
"Event of Default" shall have the meaning given such term in
Section 7.
"Facilities" shall mean any and all real property (including,
without limitation, all buildings, fixtures or other improvements
located
thereon) now, hereafter or heretofore owned, leased, operated or
used by the
Borrowers (but only as to portions of buildings actually leased
or
13
<PAGE>
used) or any of their respective predecessors or any of their
respective
Affiliates that are directly or indirectly controlled by the
Borrowers.
"Fees" shall collectively mean the Commitment Fees, Letter of
Credit Fees and other fees referred to in Sections 2.19, 2.20 and
2.21.
"Filing Date" shall mean September 22, 2004.
"Final Order" shall have the meaning given such term in
Section 4.2(d).
"Financial Officer" shall mean the Chief Financial Officer,
Controller or Treasurer of the Parent Borrower or a Subsidiary
Borrower, as the
case may be.
"Finished Goods" shall mean completed goods which require no
additional processing or manufacturing to be sold to third party
customers by
the Borrowers in the ordinary course of business.
"Forecast" shall have the meaning given such term in Section
5.1(e).
"Fronting Bank" shall mean JPMCB or such other commercial bank
as may agree with JPMCB to act in such capacity and shall be
reasonably
satisfactory to the Borrowers and the Administrative Agent.
"GAAP" shall mean accounting principles generally accepted in
the United States and applied in accordance with Section 1.2.
"Governmental Authority" shall mean any Federal, state,
municipal or other governmental department, commission, board,
bureau, agency or
instrumentality or any court, in each case whether of the United
States or
foreign.
"Hazardous Substances" shall have the meaning given such term
in the defined term "Environmental Laws".
"Hazardous Waste" shall have the meaning given such term in
the defined term "Environmental Laws".
"Indebtedness" shall mean, at any time and with respect to any
Person: (i) all indebtedness of such Person for borrowed money;
(ii) all
indebtedness of such Person for the deferred purchase price of
property or
services (other than property, including inventory, and services
purchased, and
expense accruals and deferred compensation items arising, in the
ordinary course
of business); (iii) all obligations of such Person evidenced by
notes, bonds,
debentures or other similar instruments (other than performance,
surety and
appeal bonds arising in the ordinary course of business); (iv) all
indebtedness
of such Person created or arising under any conditional sale or
other title
retention agreement with respect to property acquired by such
Person (even
though the rights and remedies of the seller or lender under such
agreement in
the event of default are limited to repossession or sale of such
property); (v)
all obligations of such Person under leases which have been or
should be, in
accordance with GAAP, recorded as capital leases, to the extent
required to be
so recorded; (vi) all reimbursement, payment or similar
14
<PAGE>
obligations of such Person, contingent or otherwise, under
acceptance, letter
of credit or similar facilities and all obligations of such Person
in respect
of: (x) currency swap agreements, currency future or option
contracts and
other similar agreements designed to hedge against fluctuations in
foreign
currency exchange rates, (y) interest rate swap, cap or collar
agreements and
interest rate future or option contracts and other similar
agreements designed
to hedge against fluctuations in interest rates, and (z) swap
agreements,
future or option contracts and other similar agreements designed to
hedge
against fluctuations in commodities prices; (vii) all indebtedness
referred to
in clauses (i) through (vi) above guaranteed directly or indirectly
by such
Person, or in effect guaranteed directly or indirectly by such
Person through
an agreement (a) to pay or purchase such indebtedness or to advance
or supply
funds for the payment or purchase of such indebtedness, (b) to
purchase, sell
or lease (as lessee or lessor) property, or to purchase or sell
services,
primarily for the purpose of enabling the debtor to make payment of
such
indebtedness or to assure the holder of such indebtedness against
loss in
respect of such indebtedness, (c) to supply funds to or in any
other manner
invest in the debtor (including any agreement to pay for property
or services
irrespective of whether such property is received or such services
are
rendered) or (d) otherwise to assure a creditor against loss in
respect of
such indebtedness, and (viii) all indebtedness referred to in
clauses (i)
through (vii) above secured by (or for which the holder of such
indebtedness
has an existing right, contingent or otherwise, to be secured by)
any Lien
upon or in property (including, without limitation, accounts and
contract
rights) owned by such Person, even though such Person has not
assumed or
become liable for the payment of such indebtedness.
"Indemnified Party" shall have the meaning given such term in
Section 9.6.
"Insufficiency" shall mean, with respect to any Plan, the
amount, if any, of its unfunded benefit liabilities within the
meaning of
Section 4001(a)(18) of ERISA.
"Intercompany Indebtedness" shall mean any claim of an
Affiliate of a Borrower against any other Affiliate of a Borrower,
any claim of
a Borrower against any of its Affiliates, and any claim of any
Affiliate of a
Borrower against a Borrower.
"Interest Payment Date" shall mean (i) as to any Eurodollar
Loan, the last day of each consecutive thirty (30) day period
running from the
commencement of the applicable Interest Period, and (ii) as to all
ABR Loans,
the last calendar day of each month and the date on which any ABR
Loans are
refinanced with Eurodollar Loans pursuant to Section 2.12.
"Interest Period" shall mean, as to any Borrowing of
Eurodollar Loans, the period commencing on the date of such
Borrowing (including
as a result of a refinancing of ABR Loans) or on the last day of
the preceding
Interest Period applicable to such Borrowing and ending on the
numerically
corresponding day (or if there is no corresponding day, the last
day) in the
calendar month that is one, three or six months thereafter, as the
Borrowers may
elect in the related notice delivered pursuant to Section 2.6(b) or
2.12;
provided, however, that (i) if any Interest Period would end on a
day which
shall not be 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) no Interest Period shall end
later than
the Termination Date.
15
<PAGE>
"Interim Commitment" shall have the meaning given such term
in Section 2.2(a).
"Interim Order" shall have the meaning given such term in
Section 4.1(b).
"Interim Period" shall have the meaning given such term in
Section 2.2(a).
"Inventory" shall mean all Raw Materials, Work-in-Process,
and Finished Goods held by the Borrowers in the normal course of
business.
"Inventory Reserves" means the following, each as determined
by the Administrative Agent from time to time:
(a) a reserve
for shrink, or discrepancies that arise
pertaining to inventory quantities on hand between the Borrowers'
perpetual
accounting system, and physical counts of the Inventory, but not
less than 2% of
the Eligible Inventory; or
(b) a reserve for slow move, obsolete or excess Inventory;
or
(c) a reserve for favorable standard cost variances; or
(d) a reserve for amounts owing to landlords or warehousemen
for Inventory stored at leased facilities or public warehouses
which are not
the subject of an access agreement acceptable to the Administrative
Agent, in
the amount of (i) to the extent the Borrowers are able to determine
the
average rental expense for any such facility, the Rent Reserve,
plus (ii) in
all other events, the Inventory Value of the Inventory stored at
such other
leased facilities or public warehouses; or
(e) a reserve for Inventory located at contractors' or
vendors' facilities in the amount of the Inventory Value of such
Inventory; or
(f) any other reserve as deemed appropriate by the
Administrative Agent in its exclusive discretion, from time to
time; or
(g) a reserve for vendor rebates.
"Inventory Value" shall mean with respect to any Inventory
of the Borrowers at the time of any determination thereof, the
standard cost
carried on the perpetual records of the Borrowers stated on a basis
consistent
with their current and historical accounting practices, in Dollars,
determined
in accordance with the standard cost method of accounting less, (i)
any markup
on Inventory from an Affiliate and (ii) in the event variances
under the
standard cost method (a) are capitalized, favorable variances shall
be
deducted from Eligible Inventory, and unfavorable variances shall
not be added
to Eligible Inventory, or (b) are expensed, a reserve shall be
determined as
appropriate in order to adjust the standard cost of Eligible
Inventory to
approximate actual cost.
"Investments" shall have the meaning given such term in
Section 6.10.
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<PAGE>
"Investment Grade" shall mean either (i) at least Baa3 by
Moody's (or the then equivalent) or (ii) at least BBB- by S&P
(or the then
equivalent).
"JPMCB" shall have the meaning set forth in the Introduction.
"Landlord Lien Waiver" shall mean a written agreement in
such form as is reasonably acceptable to the Administrative Agent,
pursuant to
which a Person shall waive or subordinate its rights and claims as
landlord in
any Inventory of the Borrowers for unpaid rents, grant access to
the
Administrative Agent for the repossession and sale of such
inventory and make
other agreements relative thereto.
"Lenders" shall have the meaning set forth in the
Introduction.
"Lender Affiliate" shall mean, (i) with respect to any
Lender, (a) an Affiliate of such Lender or (b) any entity (whether
a
corporation, partnership, trust or otherwise) that is engaged in
making,
purchasing, holding or otherwise investing in loans and similar
extensions of
credit in the ordinary course of its business and is administered
or managed
by a Lender or an Affiliate of such Lender and (ii) with respect to
any Lender
that is a fund which invests in loans and similar extensions of
credit, any
other fund that invests in loans and similar extensions of credit
and is
managed by the same investment advisor as such Lender or by an
Affiliate of
such investment advisor.
"Letter of Credit" shall mean any irrevocable letter of
credit issued pursuant to Section 2.3, which letter of credit shall
be (i) a
standby or import documentary letter of credit, (ii) issued for
purposes that
are consistent with the ordinary course of business of the
Borrowers or for
such other purposes as are acceptable to the Administrative Agent,
(iii)
denominated in Dollars and (iv) otherwise in such form as may be
approved from
time to time by the Administrative Agent and the applicable
Fronting Bank.
"Letter of Credit Account" shall mean the account
established by the Borrowers under the sole and exclusive control
of the
Administrative Agent maintained at the office of the Administrative
Agent at
270 Park Avenue, New York, New York 10017 designated as the
"Interstate
Bakeries Corporation Letter of Credit Account" that shall be used
solely for
the purposes set forth in Sections 2.3(a) and 2.13.
"Letter of Credit Fees" shall mean the fees payable in
respect of Letters of Credit pursuant to Section 2.21.
"Letter of Credit Outstandings" shall mean, at any time, the
sum of (i) the aggregate undrawn stated amount of all Letters of
Credit then
outstanding plus (ii) all amounts theretofore disbursed under
Letters of
Credit and not then reimbursed.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind whatsoever (including any
conditional
sale or other title retention agreement or any lease in the nature
thereof).
"Loan" and "Loans" shall have the respective meanings given
such terms in Section 2.1.
17
<PAGE>
"Loan Documents" shall mean this Agreement, the Letters of
Credit, the Security and Pledge Agreement and any other instrument
or agreement
executed and delivered in connection herewith.
"Material Adverse Effect" shall mean (i) a material adverse
effect upon the business, operations, properties, assets, condition
(financial
or otherwise) or prospects (other than, with respect to prospects,
as may
normally result as a consequence of the commencement of the Cases)
of the
Borrowers, taken as a whole, (ii) the material impairment of the
ability of
the Borrowers to perform the Obligations and (iii) a material
adverse effect
upon the legality, validity, binding effect or enforceability
against the
Parent Borrower or any Subsidiary Borrower of a Loan Document to
which it is a
party.
"Maturity Date" shall mean February 9, 2008.
"Minority Interests" shall mean any shares of stock of any
class of a Subsidiary of the Borrowers (other than directors'
qualifying
shares if required by law) that are not owned by Borrowers or one
of their
Subsidiaries; Minority Interest shall be valued in accordance with
GAAP.
"Minority Lenders" shall have the meaning given such term in
Section 9.10(b).
"Moody's" shall mean Moody's Investors Service, Inc. or any
successor to the rating agency business thereof.
"Multiemployer Plan"
shall mean a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA to which any Borrower or any
ERISA
Affiliate is making or accruing an obligation to make
contributions, or has
within any of the preceding five plan years made or accrued an
obligation to
make contributions.
"Multiple Employer Plan" shall mean a Single Employer Plan,
which (i) is maintained for employees of a Borrower or an ERISA
Affiliate and
at least one Person other than such Borrower and its ERISA
Affiliates or (ii)
was so maintained and in respect of which a Borrower or an ERISA
Affiliate
could have liability under Section 4064 or 4069 of ERISA in the
event such
Plan has been or were to be terminated.
"Net Proceeds" shall mean, in respect of any sale of assets,
the proceeds of such sale after the payment of or reservation for
expenses
that are directly related to the sale, including, but not limited
to, related
severance costs, taxes payable, brokerage commissions, professional
expenses,
other similar costs that are directly related to the sale and the
amount
secured by valid and perfected Liens, if any, that are senior to
the Liens on
such assets held by the Administrative Agent on behalf of the
Lenders.
"Net Total
Usage" shall have the meaning set forth in
Section 6.5.
"Obligations" shall mean (i) the due and punctual payment of
principal of and interest on the Loans and the reimbursement of all
amounts
drawn under Letters of Credit, and (ii) the due and punctual
payment of the
Fees and all other present and future, fixed
18
<PAGE>
or contingent, monetary obligations of the Borrowers to the
Lenders, the
Administrative Agent and the Collateral Agent under the Loan
Documents.
"Orders" shall mean, collectively, the Interim Order,
Amendment Order and the Final Order.
"Organizational Documents" shall mean (i) with respect to
any corporation, its certificate or articles of incorporation, as
amended, and
its by-laws, as amended, (ii) with respect to any limited
partnership, its
certificate of limited partnership or formation, as amended, and
its
partnership agreement, as amended, (iii) with respect to any
general
partnership, its partnership agreement, as amended, (iv) with
respect to any
limited liability company, its certificate of formation or articles
of
organization, as amended, and its operating agreement, as amended,
and (v)
with respect to any unlimited liability company, its certificate of
formation,
as amended, and its memorandum and articles of association, as
amended. In the
event any term or condition of this Agreement or any other Loan
Document
requires any Organizational Document to be certified by a secretary
of state
of similar governmental official, the reference to any such
"Organizational
Document" shall only be to a document of a type customarily
certified by such
governmental official.
"Other Taxes" shall have the meaning given such term in
Section 2.18(b).
"Parent Borrower" shall have the meaning set forth in the
Introduction.
"PBGC" shall mean the Pension Benefit Guaranty Corporation,
or any successor agency or entity performing substantially the same
functions.
"Pension Plan" shall mean a defined benefit pension (as
defined in Section 414(j) of the Code and Section 3(35) of ERISA)
which meets
and is subject to the requirements of Section 401(a) of the
Code.
"Permitted Investments" shall mean (i) 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 twelve months from
the date
of acquisition thereof, (ii) without limiting the provisions of
paragraph (iv)
below, investments in commercial paper maturing within six months
from the
date of acquisition thereof and having, at such date of
acquisition, a rating
of at least "A-2" or the equivalent thereof from S&P or of at
least "P-2" or
the equivalent thereof from Moody's, (iii) investments in
certificates of
deposit, banker's acceptances and time deposits (including
Eurodollar time
deposits) maturing within six months from the date of acquisition
thereof
issued or guaranteed by or placed with (a) any domestic office of
the
Administrative Agent or the bank with whom the Borrowers maintain
their cash
management system, provided, that if such bank is not a Lender
hereunder, such
bank shall have entered into an agreement with the Administrative
Agent
pursuant to which such bank shall have waived all rights of setoff
and
confirmed that such bank does not have, nor shall it claim, a
security
interest therein or (b) any domestic office of any other commercial
bank of
recognized standing 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
19
<PAGE>
$250,000,000 and is the principal banking Subsidiary of a bank
holding company
having a long-term unsecured debt rating of at least "A" or the
equivalent
thereof from S&P or at least "A2" or the equivalent thereof
from Moody's, (iv)
investments in commercial paper maturing within six months from the
date of
acquisition thereof and issued by (a) the holding company of
the
Administrative Agent or (b) the holding company of any other
commercial bank
of recognized standing organized under the laws of the United
States of
America or any State thereof that has (1) a combined capital and
surplus in
excess of $250,000,000 and (2) commercial paper rated at least
"A-2" or the
equivalent thereof from S&P or of at least "P-2" or the
equivalent thereof
from Moody's, (v) investments in repurchase obligations with a term
of not
more than seven (7) days for underlying securities of the types
described in
clause (i) above entered into with any office of a bank or trust
company
meeting the qualifications specified in clause (iii) above, (vi)
investments
in money market funds substantially all the assets of which are
comprised of
securities of the types described in clauses (i) through (v) above,
(vii) to
the extent owned by the Borrowers on the Filing Date, investments
in the
capital stock of any direct or indirect Subsidiary of the Borrowers
as
disclosed in Schedule 3.5, and (viii) to the extent owned by the
Borrowers on
the Filing Date, miscellaneous investments in the capital stock of
any Person
held by any individual bakery, in full or partial payment for
certain services
rendered or products supplied, in an aggregate amount not to
exceed
$1,000,000.
"Permitted Liens" shall mean (i) Liens in favor of the
Administrative Agent on behalf of the Lenders; (ii) Liens imposed
by law (other
than Environmental Liens and any Lien imposed under ERISA) for
taxes,
assessments or charges of any Governmental Authority for claims not
yet due or
which are being contested in good faith by appropriate proceedings
and with
respect to which adequate reserves or other appropriate provisions
are being
maintained in accordance with GAAP; (iii) Liens of landlords and
Liens of
statutory carriers, warehousemen, mechanics, materialmen and other
Liens (other
than Environmental Liens and any Lien imposed under ERISA) in
existence on the
Filing Date or thereafter imposed by law and created in the
ordinary course of
business; (iv) Liens (other than any Lien imposed under ERISA)
incurred or
deposits made (including, without limitation, surety bonds and
appeal bonds) in
connection with workers' compensation, unemployment insurance and
other types of
social security benefits or to secure the performance of tenders,
bids, leases,
contracts (other than for the repayment of Indebtedness), statutory
obligations
and other similar obligations incurred in the ordinary course of
business; (v)
easements (including, without limitation, reciprocal easement
agreements and
utility agreements), rights-of-way, covenants, consents,
reservations,
encroachments, variations and zoning and other restrictions,
charges or
encumbrances (whether or not recorded) and interest of ground
lessors, which do
not materially interfere with the ordinary conduct of the business
of any
Borrower, and which do not materially detract from the value of the
property to
which they attach or materially impair the use thereof to any
Borrower; (vi)
purchase money Liens (including Capitalized Leases) upon or in any
property
acquired or held in the ordinary course of business to secure the
purchase price
of such property or to secure Indebtedness permitted by Section
6.3(iii) solely
for the purpose of financing the acquisition of such property;
(vii) Liens set
forth on Schedule 3.6; (viii) Liens on the assets of Subsidiaries
granted to
secure Indebtedness permitted by Section 6.3(vii); (ix) Liens
created in
connection with extensions, renewals or replacements, including
replacement
Liens granted by the Bankruptcy Court, of any Lien referred to in
clauses (i)
through (vii) above, provided that the principal amount of the
obligation
secured thereby is not increased and that any such extension,
renewal or
replacement is limited to the property originally encumbered
thereby; (x)
pre-petition Liens granted pursuant
20
<PAGE>
to the Pre-Petition Credit Agreement or the Security Documents (as
defined
therein) by the Borrowers party to the Pre-Petition Credit
Agreement for the
benefit of the banks and other financial institutions from time to
time party
to the Pre-Petition Credit Agreement; and (xi) Liens junior to the
senior
liens contemplated hereby that are granted by any of the Orders
pursuant to 11
U.S.C. ss.364(d)(1) as adequate protection to the Primed Parties,
provided
that the Orders provide that the holders of such junior liens shall
not be
permitted to take any action to enforce their rights with respect
to such
junior liens as long as any amounts are outstanding under this
Agreement or
the Lenders have any Commitment hereunder.
"Person" shall mean any natural person, corporation,
division of a corporation, partnership, trust, joint venture,
association,
company, estate, unincorporated organization or government or any
agency or
political subdivision thereof.
"Plan" shall mean a Single Employer Plan or a Multiemployer
Plan.
"Pre-Petition Credit Agreement" shall mean that certain
Amended and Restated Credit Agreement dated as of April 25, 2002,
as amended,
supplemented or otherwise modified prior to the Filing Date, among
the Parent
Borrower and certain of the Subsidiary Borrowers, as borrowers, the
banks and
other financial institutions from time to time parties thereto,
JPMCB, as
administrative agent, and others.
"Pre-Petition Payment" shall mean a payment (by way of
adequate protection or otherwise) of principal or interest or
otherwise on
account of any pre-petition Indebtedness or trade payables or
other
pre-petition claims against the Borrowers, including, without
limitation,
reclamation claims and materialmen's liens.
"Prepayment Date" shall mean thirty-five (35) days after the
entry of the Interim Order by the Bankruptcy Court if the Final
Order has not
been entered by the Bankruptcy Court prior to the expiration of
such thirty-five
(35) day period.
"Primed Liens" shall have the meaning set forth in Section
2.23.
"Primed Parties" shall mean the parties who hold Primed
Liens.
"Pure Food and Drug Laws" shall mean (i) the Federal Food,
Drug and Cosmetic Act, as amended from time to time, and any
successor statute
and (ii) the pure food and drug laws of each of the states of the
United
States into which products manufactured, marketed or sold by the
Borrowers are
or have been shipped.
"Raw Materials" shall mean any items or materials used or
consumed in the manufacture of goods to be sold by the Borrowers in
the
ordinary course of business.
"Real Property Component" shall mean a component of the
Borrowing Base determined with reference to the Eligible Real
Property and
shall mean, at the time of any determination, an amount equal to
the lesser of
(i) $80,000,000 (as adjusted from time to time pursuant to Section
5.8) or
(ii) 40% of the Borrowing Base inclusive of the Real Property
Component.
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"Register" shall have
the meaning set forth in Section 9.3(e).
"Release" shall mean actively or passively disposing,
discharging, injecting, spilling, pumping, leaking, leaching,
dumping,
emitting, escaping, emptying, pouring, seeping, migrating or the
like, into or
upon any land or water or air, or otherwise entering into the
environment.
"Rent Reserve" shall mean, with respect to any store,
warehouse distribution center, regional distribution center or
depot where any
Inventory subject to Liens arising by operation of law is located,
a reserve
equal to three (3) months' rent at such store, warehouse
distribution center,
regional distribution center or depot.
"Reorganization Plan" shall mean a plan of reorganization in
any of the Cases.
"Replacement Lender" shall have the meaning given such term
in Section 2.29.
"Required Lenders" shall mean, at any time, Lenders holding
in excess of 50% of the Total Commitment.
"S&P" shall mean Standard & Poor's Rating Services, a
division of The McGraw-Hill Companies, Inc., or any successor to
the rating
agency business thereof.
"Security and Pledge Agreement" shall have the meaning given
such term in Section 4.1(c).
"Single Employer Plan" shall mean a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (i) is maintained for
employees
of a Borrower or an ERISA Affiliate or (ii) was so maintained and
in respect
of which a Borrower could have liability under Section 4069 of
ERISA in the
event such Plan has been or were to be terminated.
"Statutory Reserves" shall mean on any date the percentage
(expressed as a decimal) established by the Board and any other
banking
authority which is (i) for purposes of the definition of Base CD
Rate, the
then stated maximum rate of all reserves (including, but not
limited to, any
emergency, supplemental or other marginal reserve requirement) for
a member
bank of the Federal Reserve System in New York City, for new three
month
negotiable nonpersonal time deposits in dollars of $100,000 or more
or (ii)
for purposes of the definition of Adjusted LIBOR Rate, the then
stated maximum
rate for all reserves (including but not limited to any
emergency,
supplemental or other marginal reserve requirements) applicable to
any member
bank of the Federal Reserve System in respect of Eurocurrency
Liabilities (or
any successor category of liabilities under Regulation D issued by
the Board,
as in effect from time to time). Such reserve percentages shall
include,
without limitation, those imposed pursuant to said Regulation. The
Statutory
Reserves shall be adjusted automatically on and as of the effective
date of
any change in such percentage.
"Subsidiary" shall mean, with respect to any Person (herein
referred to as the "parent"), any corporation, association or other
business
entity (whether now existing or hereafter organized) of which at
least a
majority of the securities or other ownership interests having
ordinary voting
power for the election of directors is, at the time as of which
any
22
<PAGE>
determination is being made, owned or 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 Borrower" and "Subsidiary Borrowers" shall have
the respective meanings set forth in the Introduction.
"Super-majority Lenders" shall have the meaning given such
term in Section 9.10(b).
"Superpriority Claim" shall mean a claim against any
Borrower in any of the Cases which is a superpriority
administrative expense
claim having priority over any or all administrative expenses of
the kind
specified in Sections 503(b) or 507(b) of the Bankruptcy Code.
"Suspension Period" shall have the meaning set forth in
Section 6.5.
"Taxes" shall have the meaning given such term in Section
2.18.
"Termination Date" shall mean the earliest to occur of (i)
the Prepayment Date, (ii) the Maturity Date, (iii) the Consummation
Date and
(iv) the acceleration of the Loans and the termination of the Total
Commitment
in accordance with the terms hereof.
"Termination Event" shall mean (i) a "reportable event", as
such term is described in Section 4043 of ERISA and the regulations
issued
thereunder (other than a "reportable event" not subject to the
provision for
30-day notice to the PBGC under Section 4043 of ERISA or such
regulations) or
an event described in Section 4068 of ERISA excluding events
described in
Section 4043(c)(9) of ERISA or 29 CFR ss.ss. 2615.21 or 2615.23, or
(ii) the
withdrawal of any Borrower or any ERISA Affiliate from a Multiple
Employer
Plan during a plan year in which it was a "substantial employer",
as such term
is defined in Section 4001(c) of ERISA, or the incurrence of
liability by any
Borrower or any ERISA Affiliate under Section 4064 of ERISA upon
the
termination of a Multiple Employer Plan, or (iii) providing notice
of intent
to terminate a Plan pursuant to Section 4041(c) of ERISA or the
treatment of a
Plan amendment as a termination under Section 4041 of ERISA, or
(iv) the
institution of proceedings to terminate a Plan by the PBGC under
Section 4042
of ERISA, or (v) any other event or condition (other than the
commencement of
the Cases and the failure to have made any contribution accrued as
of the
Filing Date but not paid) which would reasonably be expected to
constitute
grounds under Section 4042 of ERISA for the termination of, or the
appointment
of a trustee to administer, any Plan, or the imposition of any
liability under
Title IV of ERISA (other than for the payment of premiums to the
PBGC).
"Total Commitment" shall mean, at any time, the sum of the
Commitments at such time.
"Total Usage" shall mean, at any time, the sum of the
outstanding aggregate principal amount of the Loans plus the
aggregate Letter
of Credit Outstandings.
"Transferee" shall have the meaning given such term in
Section 2.18.
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<PAGE>
"Type" when used in respect of any Loan or Borrowing shall
refer to the Rate of interest by reference to which interest on
such Loan or on
the Loans comprising such Borrowing is determined. For purposes
hereof, "Rate"
shall mean the Adjusted LIBOR Rate and the Alternate Base Rate.
"Unfunded Current Liability" shall mean, with respect to any
Pension Plan, the amount, if any, by which the actuarial present
value of the
accumulated plan benefits under such Pension Plan as of the close
of its most
recent plan year exceeds the fair market value of the assets
allocable thereto,
each determined in accordance with Statement of Financial
Accounting Standards
No. 35, based upon the actuarial assumptions used by such Pension
Plan's actuary
in the most recent annual valuation of such Pension Plan.
"Unused Total Commitment" shall mean, at any time, (i) the
Total Commitment less (ii) the sum of (a) the aggregate outstanding
principal
amount of all Loans and (b) the aggregate Letter of Credit
Outstandings.
"Withdrawal Liability" shall have the meaning given such term
under Part I of Subtitle E of Title IV of ERISA.
"Work-in-Process" shall mean Inventory which consists of
work-in-process including, without limitation, materials other than
Raw
Materials, Finished Goods or saleable products, title to which and
sole
ownership of which is vested in a Borrower.
SECTION 1.2 Terms Generally. The definitions in Section 1.1 shall
apply equally
to both 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. All references herein to Sections, Exhibits and
Schedules shall be
deemed references to Sections of, and Exhibits and Schedules to,
this Agreement
unless the context shall otherwise require. 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,
however, that for purposes of determining compliance with any
covenant set forth
in Section 6, such terms shall be construed in accordance with GAAP
as in effect
on the date of this Agreement applied on a basis consistent with
the application
used in the Borrowers' audited financial statements referred to in
Section 3.4.
SECTION 1.3 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
Borrowers notify the Administrative Agent that the Borrowers
request 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
Borrowers 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.
24
<PAGE>
SECTION 2.
AMOUNT AND TERMS OF CREDIT.
SECTION 2.1 Commitment of the Lenders.
(a) Each Lender severally and not jointly with the other
Lenders agrees, upon the terms and subject to the conditions herein
set forth,
to make revolving credit loans (each a "Loan" and collectively, the
"Loans")
to the Borrowers at any time and from time to time during the
period
commencing on the date hereof and ending on the Termination Date
(or the
earlier date of termination of the Total Commitment) in an
aggregate principal
amount not to exceed, when added to such Lender's Commitment
Percentage of the
then aggregate Letter of Credit Outstandings, the Commitment of
such Lender,
which Loans may be repaid and reborrowed in accordance with the
provisions of
this Agreement.
(b) Each Borrowing shall be made by the Lenders pro rata in
accordance with their respective Commitments; provided, however,
that the
failure of any Lender to make any Loan shall not in itself relieve
the other
Lenders of their obligations to lend.
SECTION 2.2 Availability of Commitment; Borrowing Base.
(a) ubject to
the terms, conditions and covenants
hereof, during the period commencing on the Filing Date and ending
on the date
the Bankruptcy Court enters the Final Order (such period being
referred to as
the "Interim Period"), $50,000,000 of the Total Commitment (the
"Interim
Commitment") shall be available to the Borrowers without regard to
the Borrowing
Base, (but otherwise subject to the terms, conditions and covenants
described in
this Agreement).
(b) Upon the
expiration of the Interim Period, the
Borrowing Base shall become operative with respect to the
availability of Loans
and Letters of Credit under the Commitment, and $150,000,000 of the
Total
Commitment (the "Available Commitment") shall be available to the
Borrowers
(subject to compliance with the Borrowing Base and the terms,
conditions and
covenants described in this Agreement).
(c) On the first
Business Day after (i) the expiration of
the Interim Period and (ii) the Borrowers shall have delivered and
both the
Administrative Agent and Loughlin Meghji & Company or such
other financial
advisor as may be acceptable to the Administrative Agent shall have
accepted the
Budget in accordance with Section 5.1(g) hereof (such Business Day
being
referred to as the "Budget Acceptance Date"), the Total Commitment
shall be
available to the Borrowers (subject to compliance with the
Borrowing Base and
the terms, conditions and covenants in this Agreement).
(d)
Notwithstanding any other provision of this Agreement
to the contrary, Total Usage shall not at any time exceed (i) prior
to the
expiration of the Interim Period, the Interim Commitment, (ii) from
and after
the expiration of the Interim Period but prior to the Budget
Acceptance Date,
the lesser of (x) the Available Commitment and (y) the Borrowing
Base, and (iii)
from and after the Budget Acceptance Date, the lesser of (x) the
Total
Commitment (as such Total Commitment may be reduced from time to
time pursuant
to the terms of this Agreement) and (y) the Borrowing Base, and no
Loan shall be
made or Letter of Credit issued in violation of the foregoing.
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<PAGE>
SECTION 2.3 Letters of Credit.
(a) Upon the
terms and subject to the conditions herein set
forth, the Borrowers may request a Fronting Bank, at any time and
from time to
time after the date hereof and prior to the Termination Date, to
issue, and,
subject to the terms and conditions contained herein, such Fronting
Bank shall
issue, for the account of the Borrowers one or more Letters of
Credit in
support of obligations of the Borrowers or one or more of the
Subsidiaries,
provided that no Letter of Credit shall be issued if after giving
effect to
such issuance (i) the aggregate Letter of Credit Outstandings would
exceed
$150,000,000, or (ii) the Total Usage would exceed (x) prior to the
expiration
of the Interim Period, the Interim Commitment, (y) from and after
the
expiration of the Interim Period but prior to the Budget Acceptance
Date, the
lesser of (aa) the Available Commitment and (bb) the Borrowing
Base, and (z)
from and after the Budget Acceptance Date, the lesser of (cc) the
Total
Commitment and (dd) the Borrowing Base.
(b) No Letter of
Credit shall expire later than three
hundred sixty-five (365) days after the Maturity Date, provided
that if the
Termination Date shall occur prior to the expiration of any Letter
of Credit,
the Borrowers shall, at or prior to the Termination Date, except as
the
Administrative Agent may otherwise agree in writing, (i) cause all
Letters of
Credit which expire after the Termination Date to be returned to
the Fronting
Bank undrawn and marked "canceled" or (ii) if the Borrowers are
unable to do
so in whole or in part, either (x) provide a "back-to-back" letter
of credit
to one or more Fronting Banks in a form satisfactory to such
Fronting Bank and
the Administrative Agent (in their exclusive discretion), issued by
a bank
satisfactory to such Fronting Bank and the Administrative Agent (in
their
exclusive discretion), in an amount equal to the greater of (A) an
amount, as
determined by the Fronting Bank and the Administrative Agent, equal
to the
face amount of all outstanding Letters of Credit plus the sum of
all projected
contractual obligations to the Administrative Agent, the Fronting
Bank and the
Lenders of the Borrowers thereunder through the expiration date(s)
of such
Letters of Credit, and (B) 105% of the then undrawn stated amount
of all
outstanding Letters of Credit issued by such Fronting Banks and/or
(y) deposit
cash in the Letter of Credit Account in an amount which, together
with any
amounts then held in the Letter of Credit Account, is equal to the
greater of
(A) an amount, as determined by the Fronting Bank and the
Administrative
Agent, equal to the face amount of all outstanding Letters of
Credit plus the
sum of all projected contractual obligations to the Administrative
Agent, the
Fronting Bank and the Lenders of the Borrowers thereunder through
the
expiration date(s) of such Letters of Credit, and (B) 105% of the
then undrawn
stated amount of all Letter of Credit Outstandings as collateral
security for
the Borrowers' reimbursement obligations in connection therewith,
such cash to
be promptly remitted to the Borrowers upon the expiration,
cancellation or
other termination or satisfaction of such reimbursement
obligations.
(c) The
Borrowers shall pay to each Fronting Bank, in
addition to such other fees and charges as are specifically
provided for in
Section 2.21 hereof, such fees and charges in connection with the
issuance and
processing of the Letters of Credit issued by such Fronting Bank as
are
customarily imposed by such Fronting Bank from time to time in
connection with
letter of credit transactions.
(d) Drafts drawn
under each Letter of Credit shall be
reimbursed by the Borrowers in Dollars not later than the first
Business Day
following the date of draw and shall
26
<PAGE>
bear interest from the date of draw until the first Business Day
following the
date of draw at a rate per annum equal to the Alternate Base Rate
plus 1.75%
and thereafter until reimbursed in full at a rate per annum equal
to the
Alternate Base Rate plus 3.75% (computed on the basis of the actual
number of
days elapsed over a year of 360 days). The Borrowers shall effect
such
reimbursement (x) if such draw occurs prior to the Termination Date
(or the
earlier date of termination of the Total Commitment), in cash or
through a
Borrowing of Loans without the satisfaction of the conditions
precedent set
forth in Section 4.2 or (y) if such draw occurs on or after the
Termination
Date (or the earlier date of termination of the Total Commitment),
in cash.
Each Lender agrees to make the Loans described in clause (x) of the
preceding
sentence notwithstanding a failure to satisfy the applicable
lending
conditions thereto or the provisions of Section 2.29.
(e) Immediately upon the issuance of any Letter of Credit by
any Fronting Bank, such Fronting Bank shall be deemed to have sold
to each
Lender other than such Fronting Bank and each such other Lender
shall be
deemed unconditionally and irrevocably to have purchased from such
Fronting
Bank, without recourse or warranty, an undivided interest and
participation,
to the extent of such Lender's Commitment Percentage, in such
Letter of
Credit, each drawing thereunder and the obligations of the
Borrowers under
this Agreement with respect thereto. Upon any change in the
Commitments
pursuant to Section 9.3, it is hereby agreed that with respect to
all Letter
of Credit Outstandings, there shall be an automatic adjustment to
the
participations hereby created to reflect the new Commitment
Percentages of the
assigning and assignee Lenders. Any action taken or omitted by a
Fronting Bank
under or in connection with a Letter of Credit, if taken or omitted
in the
absence of gross negligence or willful misconduct, shall not create
for such
Fronting Bank any resulting liability to any other Lender.
(f) In the event that a Fronting Bank makes any payment
under any Letter of Credit and the Borrowers shall not have
reimbursed such
amount in full to such Fronting Bank pursuant to this Section, the
Fronting
Bank shall promptly notify the Administrative Agent, which shall
promptly
notify each Lender of such failure, and each Lender shall promptly
and
unconditionally pay to the Administrative Agent for the account of
the
Fronting Bank the amount of such Lender's Commitment Percentage of
such
unreimbursed payment in Dollars and in same day funds. If the
Fronting Bank so
notifies the Administrative Agent, and the Administrative Agent so
notifies
the Lenders prior to 12:00 p.m. (New York City time) on any
Business Day, such
Lenders shall make available to the Fronting Bank such Lender's
Commitment
Percentage of the amount of such payment on such Business Day in
same day
funds. If and to the extent such Lender shall not have so made its
Commitment
Percentage of the amount of such payment available to the Fronting
Bank, such
Lender agrees to pay to such Fronting Bank, forthwith on demand
such amount,
together with interest thereon, for each day from such date until
the date
such amount is paid to the Administrative Agent for the account of
such
Fronting Bank at the Federal Funds Effective Rate. The failure of
any Lender
to make available to the Fronting Bank its Commitment Percentage of
any
payment under any Letter of Credit shall not relieve any other
Lender of its
obligation hereunder to make available to the Fronting Bank its
Commitment
Percentage of any payment under any Letter of Credit on the date
required, as
specified above, but no Lender shall be responsible for the failure
of any
other Lender to make available to such Fronting Bank such other
Lender's
Commitment Percentage of any such payment. Whenever a Fronting Bank
receives a
payment of a reimbursement obligation as to which it has received
any payments
from the Lenders pursuant to this paragraph, such Fronting Bank
shall pay to
each
27
<PAGE>
Lender which has paid its Commitment Percentage thereof, in Dollars
and
in same day funds, an amount equal to such Lender's Commitment
Percentage
thereof.
(g) Unless otherwise requested by the Administrative Agent,
each Fronting Bank shall report in writing to the Administrative
Agent (i) on
the first Business Day of each week, the daily activity (set forth
by day) in
respect of Letters of Credit during the immediately preceding week,
including
all issuances, extensions, amendments and renewals, all expirations
and
cancellations and all disbursements and reimbursements, (ii) on or
prior to
each Business Day on which such Fronting Bank expects to issue,
amend, renew
or extend any Letter of Credit, the date of such issuance,
amendment, renewal
or extension and the aggregate face amount of the Letters of Credit
to be
issued, amended, renewed or extended by it and outstanding after
giving effect
to such issuance, amendment, renewal or extension (and whether the
amount
thereof changed), it being understood that such Fronting Bank shall
not permit
any issuance, renewal, extension or amendment resulting in an
increase in the
amount of a Letter of Credit to occur without first obtaining
written
confirmation from the Administrative Agent that it is then
permitted under
this Agreement, (iii) on each Business Day on which such Fronting
Bank makes
any payment under any Letter of Credit, the date of such payment
and the
amount of such payment, (iv) on any Business Day on which a
Borrower fails to
reimburse a payment under a Letter of Credit required to be
reimbursed to such
Fronting Bank on such day, the date of such failure, the applicable
Borrower
and the amount and currency of such Letter of Credit payment and
(v) on any
other Business Day, such other information as the Administrative
Agent shall
reasonably request.
SECTION 2.4 Issuance. Whenever the Parent Borrower or a
Subsidiary
Borrower desire a Fronting Bank to issue a Letter of Credit, they
shall give
to such Fronting Bank and the Administrative Agent at least three
(3) Business
Days' prior written (including facsimile communication) notice (or
such
shorter period as may be agreed upon by the Administrative Agent,
the
Borrowers and the Fronting Bank) specifying the date on which the
proposed
Letter of Credit is to be issued (which shall be a Business Day),
the stated
amount of the Letter of Credit so requested, the expiration date of
such
Letter of Credit and the name and address of the beneficiary
thereof.
SECTION 2.5 Nature of Letter of Credit Obligations Absolute.
The
obligations of the Borrowers to reimburse the Lenders for drawings
made under
any Letter of Credit shall be joint and several, unconditional and
irrevocable
and shall be paid strictly in accordance with the terms of this
Agreement
under all circumstances, including, without limitation: (i) any
lack of
validity or enforceability of any Letter of Credit; (ii) the
existence of any
claim, setoff, defense or other right which any Borrower may have
at any time
against a beneficiary of any Letter of Credit or against any of the
Lenders,
whether in connection with this Agreement, the transactions
contemplated
herein or any unrelated transaction; (iii) any draft, demand,
certificate or
other document presented under any Letter of Credit proving to be
forged,
fraudulent, invalid or insufficient in any respect or any statement
therein
being untrue or inaccurate in any respect; (iv) payment by a
Fronting Bank of
any Letter of Credit against presentation of a demand, draft or
certificate or
other document which does not comply with the terms of such Letter
of Credit;
(v) any other circumstance or happening whatsoever, which is
similar to any of
the foregoing; or (vi) the fact that any Event of Default shall
have occurred
and be continuing.
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<PAGE>
SECTION 2.6 Making of Loans.
(a) Except as contemplated by Section 2.11, Loans shall be
either ABR Loans or Eurodollar Loans as the Borrowers may request
subject to
and in accordance with this Section, provided that all Loans made
pursuant to
the same Borrowing shall, unless otherwise specifically provided
herein, be
Loans of the same Type. Each Lender may fulfill its Commitment with
respect to
any Eurodollar Loan or ABR Loan by causing any lending office of
such Lender
to make such Loan; provided that any such use of a lending office
shall not
affect the obligation of the Borrowers to repay such Loan in
accordance with
the terms of this Agreement. Each Lender shall, subject to its
overall policy
considerations, use reasonable efforts (but shall not be obligated)
to select
a lending office which will not result in the payment of increased
costs by
the Borrowers pursuant to Sections 2.15 or 2.18. Subject to the
other
provisions of this Section and the provisions of Section 2.12,
Borrowings of
Loans of more than one Type may be incurred at the same time,
provided that no
more than twelve (12) Borrowings of Eurodollar Loans may be
outstanding at any
time.
(b) The applicable Borrower shall give the Administrative
Agent prior written, facsimile or telephonic (confirmed promptly in
writing)
notice of each Borrowing of Loans hereunder of at least three (3)
Business
Days for Eurodollar Loans and one (1) Business Day for ABR Loans
(subject, in
the case of ABR Loans, to the last sentence of this Section); such
notice
shall be irrevocable and shall specify the amount of the proposed
Borrowing
(which shall not be less than $5,000,000 for Eurodollar Loans and
$1,000,000
for ABR Loans, or any integral multiple of $1,000,000 in excess of
such
minimum amounts) and the date thereof (which shall be a Business
Day) and
shall contain disbursement instructions. Such notice, to be
effective, must be
received by the Administrative Agent not later than 12:00 p.m., New
York City
time, on the third Business Day in the case of Eurodollar Loans and
the first
Business Day in the case of ABR Loans, preceding the date on which
such
Borrowing is to be made except as provided in the last sentence of
this
Section 2.06(b). Such notice shall specify whether the Borrowing
then being
requested is to be a Borrowing of ABR Loans or Eurodollar Loans. If
no
election is made as to the Type of Loan, such notice shall be
deemed a request
for Borrowing of ABR Loans. The Administrative Agent shall promptly
notify
each Lender of its proportionate share of such Borrowing, the date
of such
Borrowing, the Type of Borrowing or Loans being requested and the
Interest
Period or Interest Periods applicable thereto, as appropriate. On
the
Borrowing date specified in such notice, each Lender shall make its
share of
the Borrowing available at the office of the Administrative Agent
at 270 Park
Avenue, New York, New York 10017, no later than 12:00 p.m., New
York City
time, in immediately available funds. Upon receipt of the funds
made available
by the Lenders to fund any Borrowing hereunder, the Administrative
Agent shall
disburse such funds in the manner specified in the notice of
Borrowing
delivered by the Borrowers. With respect to ABR Loans in an
aggregate amount
of up to $3,000,000, the Lenders shall make such Borrowings
available to the
Administrative Agent no later than 12:00 p.m., New York City time,
in
immediately available funds, and the Administrative Agent shall
disburse such
Borrowings in accordance with the applicable Borrower's
instructions
consistent with this Agreement by 3:00 p.m., New York City time, on
the same
Business Day that such Borrower gives notice to the Administrative
Agent of
such Borrowing by 10:00 a.m., New York City time.
SECTION 2.7 Repayment of Loans and Unreimbursed Draws; Evidence
of
Debt.
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(a) The Borrowers hereby jointly and severally
unconditionally promise to pay to the Administrative Agent for the
account of
each Lender the then unpaid principal amount of each Loan and
each
unreimbursed draw under all Letters of Credit as set forth
herein.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the Indebtedness of the
Parent
Borrower and the Subsidiary Borrowers to such Lender resulting from
each Loan
made by such Lender or participation in each Letter of Credit in
which such
Lender is participating, 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 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
Parent Borrower or the Subsidiary Borrowers, as the case may be, 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
Borrowers to repay the Loans in accordance with the terms of this
Agreement.
(e) Any Lender may request that Loans made by it be
evidenced by a promissory note. In such event, the Borrowers shall
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)
in a form furnished 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 9.3) 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 2.8 Interest on Loans.
(a) Subject to the provisions of Section 2.9, each ABR Loan
shall bear interest (computed, for ABR Loans wherein the Alternate
Base Rate
is determined by reference to the Base CD Rate or the Federal Funds
Effective
Rate, on the basis of the actual number of days elapsed over a year
of 360
days, and otherwise computed on the basis of the actual number of
days elapsed
over a year of 365 days) at a rate per annum equal to the Alternate
Base Rate
plus 1.75%.
(b) Subject to the provisions of Section 2.9, each
Eurodollar Loan shall bear interest (computed on the basis of the
actual
number of days elapsed over a year of 360 days) at a rate per annum
equal,
during each Interest Period applicable thereto, to the Adjusted
LIBOR Rate for
such Interest Period in effect for such Borrowing plus 2.75%.
(c) Accrued interest on all Loans shall be payable in
arrears on each Interest Payment Date applicable thereto, at
maturity (whether
by acceleration or otherwise), after such
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maturity on demand and (with respect to Eurodollar Loans) upon any
repayment
or prepayment thereof (on the amount prepaid).
SECTION 2.9 Default Interest. If any Borrower shall default in
the
payment of the principal of or interest on any Loan or in the
payment of any
other amount becoming due hereunder (including, without limitation,
the
reimbursement pursuant to Section 2.3(d) of any draft drawn under a
Letter of
Credit), whether at stated maturity, by acceleration or otherwise,
such
Borrower shall on demand from time to time pay interest, to the
extent
permitted by law, on such defaulted amount up to (but not
including) the date
of actual payment (after as well as before judgment) at a rate per
annum
(computed on the basis of the actual number of days elapsed over a
year of 360
days) equal to 2% above the then applicable rate.
SECTION 2.10 Optional Termination or Reduction of Commitment. Upon
at
least three (3) Business Days' prior written notice to the
Administrative
Agent, the Borrowers may at any time in whole permanently
terminate, or from
time to time in part permanently reduce, the Unused Total
Commitment. Each
such reduction or termination, as applicable, of the Unused Total
Commitment
shall be in the principal amount of $1,000,000 or any integral
multiple of
$1,000,000 in excess thereof. Any reduction or termination, as
applicable,
pursuant to this Section shall be deemed to be a reduction or
termination, as
applicable, in the amount of such reduction or termination of the
Total
Commitment and shall be applied pro rata to reduce the applicable
Commitment
of each Lender. Simultaneously with each reduction or termination,
as
applicable, of the Unused Total Commitment, the Borrowers shall pay
to the
Administrative Agent for the account of each Lender the Commitment
Fee accrued
on the amount of the Commitment of such Lender so terminated or
reduced
through the date thereof.
SECTION 2.11 Alternate Rate of Interest. In the event, and on
each
occasion, that on the day three (3) Business Days prior to the
commencement of
any Interest Period for a Eurodollar Loan, the Administrative Agent
shall have
determined (which determination shall be conclusive and binding
upon the
Borrowers absent manifest error) that reasonable means do not exist
for
ascertaining the applicable Adjusted LIBOR Rate, the Administrative
Agent
shall, as soon as practicable thereafter, give written notice of
such
determination to the Borrowers and the Lenders, and any request by
the
Borrowers for a Borrowing of Eurodollar Loans (including pursuant
to a
refinancing with Eurodollar Loans) pursuant to Section 2.6 or 2.12
shall be
deemed a request for a Borrowing of ABR Loans. After such notice
shall have
been given and until the circumstances giving rise to such notice
no longer
exist, each request for a Borrowing of Eurodollar Loans shall be
deemed to be
a request for a Borrowing of ABR Loans.
SECTION 2.12 Refinancing of Loans. The Borrowers shall have the
right, at any time, on three (3) Business Days' prior irrevocable
notice to
the Administrative Agent (which notice, to be effective, must be
received by
the Administrative Agent not later than 1:00 p.m., New York City
time, on the
third Business Day preceding the date of any refinancing), (x) to
refinance
(without the satisfaction of the conditions set forth in Section
4.2 as a
condition to such refinancing) any outstanding Borrowing or
Borrowings of
Loans of one Type (or a portion thereof) with a Borrowing of Loans
of the
other Type or (y) to continue an outstanding Borrowing of
Eurodollar Loans for
an additional Interest Period, subject to the following:
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(a) as a condition to the refinancing of ABR Loans with
Eurodollar Loans and to the continuation of Eurodollar Loans for an
additional
Interest Period, no Event of Default shall have occurred and be
continuing at
the time of such refinancing;
(b) if less than a full Borrowing of Loans shall be
refinanced, such refinancing shall be made pro rata among the
Lenders in
accordance with the respective principal amounts of the Loans
comprising such
Borrowing held by the Lenders immediately prior to such
refinancing;
(c) the aggregate principal amount of Loans being refinanced
shall be at least $5,000,000 or any integral multiple of $1,000,000
in excess
thereof, provided that no partial refinancing of a Borrowing of
Eurodollar
Loans shall result in the Eurodollar Loans remaining outstanding
pursuant to
such Borrowing being less than $5,000,000 in aggregate principal
amount;
(d) each Lender shall effect each refinancing by applying
the proceeds of its new Eurodollar Loan or ABR Loan, as the case
may be, to
its Loan being refinanced;
(e) the Interest Period with respect to a Borrowing of
Eurodollar Loans effected by a refinancing or in respect to the
Borrowing of
Eurodollar Loans being continued as Eurodollar Loans shall commence
on the
date of refinancing or the expiration of the current Interest
Period
applicable to such continuing Borrowing, as the case may be;
(f) a Borrowing of Eurodollar Loans may be refinanced only
on the last day of an Interest Period applicable thereto; and
(g) each request for a refinancing with a Borrowing of
Eurodollar Loans which fails to state an applicable Interest Period
shall be
deemed to be a request for an Interest Period of one month.
In the event that the Parent Borrower or a Subsidiary Borrower, as
applicable,
shall not give notice to refinance any Borrowing of Eurodollar
Loans, or to
continue such Borrowing as Eurodollar Loans, or shall not be
entitled to
refinance or continue such Borrowing as Eurodollar Loans, in each
case as
provided above, such Borrowing shall automatically be refinanced
with a
Borrowing of ABR Loans at the expiration of the then-current
Interest Period.
The Administrative Agent shall, after it receives notice from the
Parent
Borrower or a Subsidiary Borrower, as applicable, promptly give
each Lender
notice of any refinancing, in whole or part, of any Loan made by
such Lender.
SECTION 2.13 Mandatory Prepayment; Commitment Termination.
(a) If at any time the aggregate principal amount of the
outstanding Loans plus
the aggregate Letter of Credit Outstandings exceeds (A) prior to
the expiration
of the Interim Period, the Interim Commitment, (B) from and after
the expiration
of the Interim Period and prior to the Budget Acceptance Date, the
lesser of (x)
the Available Commitment and (y) the Borrowing Base, or (C) from
and after the
Budget Acceptance Date, the lesser of (x) the Total Commitment and
(y) the
Borrowing Base, the Borrowers will within one (1) Business Day (i)
prepay the
Loans in an amount necessary to cause the aggregate principal
amount of the
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outstanding Loans plus the aggregate Letter of Credit Outstandings,
including
unreimbursed draws, to be equal to or less than (A) prior to the
expiration of
the Interim Period, the Interim Commitment, (B) from and after the
expiration of
the Interim Period and prior to the Budget Acceptance Date, the
lesser of (x)
the Available Commitment and (y) the Borrowing Base, and (C) from
and after the
Budget Acceptance Date, the lesser of (x) the Total Commitment and
(y) the
Borrowing Base and (ii) if, after giving effect to the prepayment
in full of the
Loans, the aggregate Letter of Credit Outstandings exceeds (A)
prior to the
expiration of the Interim Period, the Available Commitment, (B)
from and after
the expiration of the Interim Period and prior to the Budget
Acceptance Date,
the lesser of (x) the Available Commitment and (y) the Borrowing
Base, (C) from
and after the Budget Acceptance Date, the lesser of (x) the Total
Commitment and
(y) the Borrowing Base, deposit into the Letter of Credit Account
an amount
equal to 105% of the amount by which the aggregate Letter of Credit
Outstandings
(net of the amount of cash held in the Letter of Credit Account) so
exceeds (A)
prior to the expiration of the Interim Period, the Interim
Commitment, (B) from
and after the expiration of the Interim Period and prior to the
Budget
Acceptance Date, the lesser of (x) the Available Commitment and (y)
the
Borrowing Base, and (C) from and after the Budget Acceptance Date,
the lesser of
(x) the Total Commitment and (y) the Borrowing Base.
(b) Upon the receipt of the Net Proceeds by any of the
Borrowers or their Subsidiaries from any Asset Sales for which
the
consideration received by the Borrowers, taken together with any
other Asset
Sales, exceeds $5,000,000 in the aggregate from the date of this
Agreement,
the Borrowers shall, jointly and severally, apply such Net Proceeds
as
follows: first, to repay the then outstanding Loans; second,
deposit an amount
in the Letter of Credit Account up to 105% of th
