Exhibit 10.1
NINTH AMENDMENT TO
REVOLVING CREDIT AGREEMENT
This
NINTH AMENDMENT TO REVOLVING CREDIT AGREEMENT dated as of
February
16, 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:
1
<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 28, 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 31, 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
<PAGE>
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
<PAGE>
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: /s/ J. Randall Vance
-----------------------------------------
Name: J. Randall
Vance
Title: Senior Vice President - Finance & Treasurer
ARMOUR AND MAIN REDEVELOPMENT CORPORATION
By: /s/ J. Randall Vance
-----------------------------------------
Name: J. Randall
Vance
Title: Treasurer
BAKER'S INN QUALITY BAKED GOODS, LLC
By: /s/ J. Randall Vance
-----------------------------------------
Name: J. Randall
Vance
Title: Treasurer
IBC SALES CORPORATION
By: /s/ J. Randall Vance
-----------------------------------------
Name: J. Randall
Vance
Title: Senior Vice President - Finance & Treasurer
<PAGE>
IBC SERVICES, LLC
By: /s/ J. Randall Vance
-----------------------------------------
Name: J. Randall
Vance
Title: Treasurer
IBC TRUCKING, LLC
By: /s/ J. Randall Vance
-----------------------------------------
Name: J. Randall
Vance
Title: Treasurer
INTERSTATE BRANDS CORPORATION
By: /s/ J. Randall Vance
-----------------------------------------
Name: J. Randall
Vance
Title: Senior Vice President - Finance & Treasurer
NEW ENGLAND BAKERY DISTRIBUTORS, L.L.C.
By: /s/ J. Randall Vance
-----------------------------------------
Name: J. Randall
Vance
Title: Treasurer
<PAGE>
LENDERS:
JPMORGAN CHASE BANK, N.A.
Individually and as Administrative Agent and Collateral
Agent
By: /s/ Susan E. Atkins
-----------------------------------------
Name: Susan E.
Atkins
Title: Managing Director
NATIONWIDE LIFE INSURANCE COMPANY
By: /s/ Thomas S. Leggett
-----------------------------------------
Name: Thomas S.
Leggett
Title: Authorized Signatory
THE FOOTHILL GROUP, INC.
By: /s/ Dennis Ascher
-----------------------------------------
Name: Dennis
Ascher
Title: Senior Vice President
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Robert M. Reeg
-----------------------------------------
Name: Robert M.
Reeg
Title: Duly Authorized Signator
BLACKPORT CAPITAL FUND LTD.
By: /s/ Brian Chase
-----------------------------------------
Name: Brian Chase
Title: Director
THE BANK OF NEW YORK
By: /s/ Peter W. Helt
-----------------------------------------
Name: Peter W.
Helt
Title: Vice President
DK ACQUISITION PARTNERS, L.P.
By: M.H. Davidson & Co., its general partner
By: /s/ Anthony Yoseloff
-----------------------------------------
Name: Anthony
Yoseloff
Title: General Partner
PROSPECT HARBOR CREDIT PARTNERS, LP
By: /s/ Alan K. Halfenger
-----------------------------------------
Name: Alan K.
Halfenger
Title: Chief Compliance Officer
Assistant Secretary
<PAGE>
SANKATY HIGH YIELD PARTNERS II, L.P.
By: /s/ Alan
K. Halfenger
-----------------------------------------
Name: Alan K.
Halfenger
Title: Chief Compliance Officer
Assistant Secretary
SPCP GROUP, LLC
By: /s/ Richard Petrilli
-----------------------------------------
Name: Richard
Petrilli
Title: Authorized Signatory
CANADIAN IMPERIAL BANK OF COMMERCE
By: /s/ John O'Dowd
-----------------------------------------
Name: John O'Dowd
Title: Authorized Signatory
GRAND CENTRAL ASSET TRUST, BDC SERIES
By: /s/ Beata Konopko
-----------------------------------------
Name: Beata
Konopko
Title: Attorney-In-Fact
SPIRET IV LOAN TRUST 2003-B
By: Wilmington Trust Company not in its
individual capacity but solely as trustee
By: /s/ Rachel L. Simpson
-----------------------------------------
Name: Rachel L.
Simpson
Title: Sr. Financial Services Officer
CAPITALSOURCE FINANCE LLC
By: /s/ Keith D. Reuben
-----------------------------------------
Name: Keith D.
Reuben
Title: President - Healthcare & Specialty
Finance
<PAGE>
HIGHLAND FLOATING RATE ADVANTAGE FUND
By: /s/ M. Jason Blackburn
-----------------------------------------
Name: M. Jason
Blackburn
Title: Treasurer
HIGHLAND FLOATING RATE LLC
By: /s/ M. Jason Blackburn
-----------------------------------------
Name: M. Jason
Blackburn
Title: Treasurer
<PAGE>
EXHIBIT A
FORM OF AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
<PAGE>
--------------------------------------------------------------------------------
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 February 16, 2007
<PAGE>
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
TABLE OF CONTENTS
Page No.
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
i
<PAGE>
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
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
ii
<PAGE>
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
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 February 16, 2007
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT, dated as of
February 16, 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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<PAGE>
"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
3
<PAGE>
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 February 16, 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
4
<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
6
<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 $320,000 per fiscal monthly period, and (ix) "Chapter 11
expenses" (or
"administrative costs reflecting Chapter 11 expenses", inclusive of
professional
fees) as shown on the Borrowers' consolidated statement of income
for such
period, less (b) extraordinary gains.
"Consummation Date" shall mean the date of the substantial
consummation (as defined in Section 1101 of the Bankruptcy Code and
which for
purposes of this Agreement shall be no later than the effective
date) of a
Reorganization Plan of the Borrowers that is confirmed pursuant to
an order of
the Bankruptcy Court in the Cases.
7
<PAGE>
"Default" shall have the meaning given such term in Section
2.23(a).
"Dilution Factors" shall mean, without duplication, with respect
to
any period, the aggregate amount of all deductions, credit memos,
returns,
adjustments, allowances, bad debt write-offs and other non-cash
credits which
are recorded to reduce accounts receivable in a manner consistent
with current
and historical accounting practices of the Borrowers.
"Dilution Ratio" shall mean, at any date, the amount (expressed as
a
percentage) equal to (a) the aggregate amount of the applicable
Dilution Factors
for the twelve (12) most recently ended fiscal months divided by
(b) total gross
sales for the twelve (12) most recently ended fiscal months.
"Dilution Reserve" shall mean, at any date, the applicable
Dilution
Ratio multiplied by the Eligible Accounts Receivable on such date,
but only to
the extent the Dilution Ratio exceeds 5%.
"Dollars" and "$" 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
<PAGE>
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
9
<PAGE>
(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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<PAGE>
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.
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<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.
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<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 or
18
<PAGE>
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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<PAGE>
"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) Subject 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 ir
