Second Amended and Restated Revolving Credit and Letter of Credit Facility Commitment Letter
Exhibit 10.1
April
17 , 2008
Second Amended and Restated
Revolving Credit and Letter of Credit Facility
Commitment
Letter
Interstate
Bakeries Corporation
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▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr.
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Senior Vice President, Chief Financial Officer and Treasurer
Ladies
and Gentlemen:
We refer to the proposed Second Amended
and Restated Revolving Credit Agreement (the “Amended Credit
Agreement”) 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 Amended and Restated Revolving Credit
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, JPMorgan Chase Bank, N.A., a national banking association
(“JPMCB”), as
administrative agent and as collateral agent for the Lenders, and each of the
other commercial banks, finance companies, insurance companies or other
financial institutions or funds from time to time party thereto. The
proposed Amended Credit Agreement will amend and restate that certain Amended
and Restated Credit Agreement dated as of February 16, 2007 among the Borrowers,
JPMCB, as administrative agent and as collateral agent for the lenders, and each
of the lenders party thereto, as set forth therein.
The Borrowers have requested that ▇.▇.
▇▇▇▇▇▇ Securities Inc. ("JPMorgan"), agree to
structure an amended and restated senior revolving credit facility in an
aggregate amount of up to $250,000,000 (the "Facility"), subject
to reduction as provided in the Term Sheet, and that JPMCB commit to provide a
portion of the Facility and to serve as administrative agent for the
Facility.
Each of the undersigned lenders (the
“Lenders”) is
pleased to advise you of its commitment to provide that portion of the Facility
set forth opposite its name on Schedule B to the Term Sheet (as defined below)
upon the terms and subject to the conditions set forth or referred to in this
commitment letter (the "Commitment Letter")
and in the Summary of Terms and Conditions attached hereto as Exhibit A (the
"Term
Sheet"). It is a condition to each Lender’s commitment
hereunder that the portion of the Facility not being provided by such Lender
shall be provided by the other Lenders referred to below.
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As consideration for the Lenders’
commitments hereunder and JPMorgan's agreement to perform the services described
herein, you agree,
jointly and severally, to pay the nonrefundable fees set forth in the Term Sheet
and in the Fee Letter dated April 17, 2008 (the "Fee
Letter").
The Lenders’ commitments hereunder and
JPMorgan's agreement to perform the services described herein are subject to (a)
the negotiation, execution and delivery on or before May 16, 2008 of definitive
documentation with respect to the Facility satisfactory to JPMCB and its counsel
and (b) the other conditions set forth or referred to in the Term
Sheet. The terms and conditions of the Lenders’ commitments hereunder
and of the Facility are not limited to those set forth herein and in the Term
Sheet. Those matters that are not covered by the provisions hereof
and of the Term Sheet are subject to the approval and agreement of JPMCB,
JPMorgan, the other Lenders and the Borrowers.
Borrowers agree, jointly and severally,
(a) to indemnify and hold harmless the Lenders, JPMorgan and their respective
affiliates and their respective officers, directors, employees, advisors, and
agents (each, an "indemnified person")
from and against any and all losses, claims, damages and liabilities to which
any such indemnified person may become subject arising out of or in connection
with this Commitment Letter, the Facility, the use of the proceeds thereof or
any related transaction or any claim, litigation, investigation or proceeding
relating to any of the foregoing, regardless of whether any indemnified person
is a party thereto, and to reimburse each indemnified person upon demand for any
legal or other expenses incurred in connection with investigating or defending
any of the foregoing, provided that the
foregoing indemnity will not, as to any indemnified person, apply to losses,
claims, damages, liabilities or related expenses to the extent they are found by
a final, non-appealable judgment of a court to arise from the willful misconduct
or gross negligence of such indemnified person, and (b) to reimburse JPMCB,
JPMorgan and their affiliates on demand for all out-of-pocket expenses
(including due diligence expenses, syndication expenses, travel expenses, and
reasonable fees, charges and disbursements of counsel) incurred in connection
with the Facility and any related documentation (including this Commitment
Letter, the Term Sheet, the Fee Letter and the definitive financing
documentation) or the administration, amendment, modification or waiver
thereof. No indemnified person shall be liable for any indirect or
consequential damages in connection with its activities related to the
Facility. No indemnified person shall be liable for any damages
arising from the use by others of information provided by or on behalf of the
Borrowers or other materials obtained through electronic, telecommunications or
other information transmission systems or for any special, indirect,
consequential or punitive damages in connection with the Facilities, provided that the
foregoing indemnity will not, as to any indemnified person, apply to losses,
claims, damages, liabilities or related expenses to the extent they are found by
a final, non-appealable judgment of a court to arise from the willful misconduct
or gross negligence of such indemnified person.
This Commitment Letter shall not be
assignable by you without the prior written consent of each Lender and JPMorgan
(and any purported assignment without such consent shall be null and void), is
intended to be solely for the benefit of the parties hereto and is not intended
to confer any benefits upon, or create any rights in favor of, any person other
than the parties hereto. This Commitment Letter may not be amended or
waived except by an instrument in writing signed by Borrowers, each Lender and
JPMorgan. This Commitment Letter may be executed in any number of
counterparts, each of which shall be an original, and all of which,
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when
taken together, shall constitute one agreement. Delivery of an
executed signature page of this Commitment Letter by facsimile transmission
shall be effective as delivery of manually executed counterpart
hereof. This Commitment Letter and the Fee Letter are the only
agreements that have been entered into among us with respect to the Facility and
set forth the entire understanding of the parties with respect
thereto. This Commitment Letter shall be governed by, and construed
in accordance with, the laws of the State of New York.
This Commitment Letter is delivered to
you on the understanding that neither this Commitment Letter, the Term Sheet or
the Fee Letter nor any of their terms or substance shall be disclosed, directly
or indirectly, to any other person except (a) to your officers, agents and
advisors who are directly involved in the consideration of this matter, (b) as
may be compelled in a judicial or administrative proceeding or as otherwise
required by law (in which case you agree to inform us promptly thereof) or (c)
to the Bankruptcy Court (as defined in the Term Sheet) in connection with
proceedings relating to the entry of the Amendment Order (as defined in the Term
Sheet).
You acknowledge that JPMorgan, JPMCB
and the other Lenders may be providing debt financing, equity capital or other
services (including financial advisory services) to other companies in respect
of which you may have conflicting interests regarding the transactions described
herein and otherwise. Each Lender and JPMorgan hereby agrees that it
will not use confidential information obtained from you by virtue of the
transactions contemplated by this letter or their other relationships with you
in connection with the performance by JPMorgan or such Lender of services for
other companies, and neither JPMorgan nor any Lender will furnish any such
information to other companies. You also acknowledge that JPMorgan
and the Lenders have no obligation to use in connection with the transactions
contemplated by this letter, or to furnish to you, confidential information
obtained from other companies. Neither JPMorgan nor any Lender will
be liable for a breach of any of the foregoing by another Lender.
The reimbursement, indemnification and
confidentiality provisions contained herein and in the Fee Letter shall remain
in full force and effect regardless of whether definitive financing
documentation shall be executed and delivered and notwithstanding the
termination of this Commitment Letter or any of the Lenders’ commitments
hereunder.
If the foregoing correctly sets forth
our agreement, please indicate your acceptance of the terms hereof and of the
Term Sheet by returning to us executed counterparts hereof not later than 5:00
p.m., New York City time, on April 24, 2008. The commitments of each
Lender and JPMorgan's agreements herein will expire at such time in the event
JPMCB has not received such executed counterparts in accordance with the
immediately preceding sentence. Each Lender, by its execution of this
Commitment Letter, acknowledges that it has decided to make its commitment based
on its own analysis of the transactions contemplated by the Term Sheet and of
the creditworthiness of the Borrowers and agrees that the JPMorgan and JPMCB
shall bear no responsibility therefor.
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The Lenders and JPMorgan are pleased to
have been given the opportunity to assist you in connection with this important
financing. The obligations and commitments of the Lenders and
JPMorgan hereunder are several and not joint and several.
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Very
truly yours,
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JPMORGAN
CHASE BANK
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By:
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/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ |
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Name:
▇▇▇▇▇ ▇▇▇▇▇▇
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Title:
Managing Director
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▇.▇.
▇▇▇▇▇▇ SECURITIES INC.
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By:
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/s/
▇▇▇▇▇ ▇▇▇▇▇
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Name:
▇▇▇▇▇ ▇▇▇▇▇
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Title: Managing
Director
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Lender’s
Name:
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▇.▇.▇▇▇▇▇▇
Chase Bank, N.A.
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By:
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/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name:
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▇▇▇▇▇
▇▇▇▇▇▇
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Title:
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Managing
Director
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Lender’s
Name:
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The
Foothill Group, Inc.
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By:
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/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name:
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▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
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Title:
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Senior
Vice President
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Lender’s
Name:
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SPCP
Group, LLC
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By:
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/s/
▇▇▇▇ ▇▇▇▇▇
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Name:
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▇▇▇▇
▇▇▇▇▇
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Title:
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Authorized
Signatory
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Lender’s
Name:
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Q
Funding III, L.P.
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By:
Prufrock Onshore, L.P., its General Partner
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By:
J ▇▇▇▇▇▇ Onshore, LLC, its General Partner
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By:
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/s/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name:
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▇▇▇▇▇▇▇
▇▇▇▇▇▇
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Title:
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Assistant
Secretary
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Lender’s
Name:
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Q4
Funding, L.P.
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By:
Star Spangled Sprockets, L.P., its General Partner
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By:
Excalibur Domestics, LLC, its General Partner
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By:
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/s/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name:
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▇▇▇▇▇▇▇
▇▇▇▇▇▇
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Title:
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Assistant
Secretary
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Lender’s
Name:
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Monarch
Master Funding Ltd.
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By:
Monarch Alternative Capital LP, its Advisor
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By:
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/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Name:
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▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
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Title:
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Managing Principal
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Accepted
and agreed to as of the date first
above written:
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INTERSTATE
BAKERIES CORPORATION
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By:
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/s/
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Name:
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J.
▇▇▇▇▇▇▇ ▇▇▇▇▇
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Title:
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Senior
Vice President, Chief Financial Officer and Treasurer
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ARMOUR
AND MAIN REDEVELOPMENT CORPORATION
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By:
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/s/
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Name:
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J.
▇▇▇▇▇▇▇ ▇▇▇▇▇
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Title:
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Treasure
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▇▇▇▇▇’▇
INN QUALITY BAKED GOODS, LLC
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By:
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/s/
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Name:
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J.
▇▇▇▇▇▇▇ ▇▇▇▇▇
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Title:
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Treasurer
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IBC
SALES CORPORATION
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By:
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/s/
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Name:
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J.
▇▇▇▇▇▇▇ ▇▇▇▇▇
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Title:
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Senior
Vice President, Chief Financial Officer and Treasurer
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IBC
SERVICES, LLC
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By:
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/s/
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Name:
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J.
▇▇▇▇▇▇▇ ▇▇▇▇▇
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Title:
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Treasurer
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IBC
TRUCKING, LLC
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By:
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/s/
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Name:
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J.
▇▇▇▇▇▇▇ ▇▇▇▇▇
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Title:
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Treasurer
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INTERSTATE
BRANDS CORPORATION
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By:
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/s/
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Name:
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J.
▇▇▇▇▇▇▇ ▇▇▇▇▇
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Title:
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Senior
Vice President, Chief Financial Officer and Treasurer
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NEW
ENGLAND BAKERY DISTRIBUTORS, L.L.C.
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By:
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/s/
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Name:
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J.
▇▇▇▇▇▇▇ ▇▇▇▇▇
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Title:
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Treasurer
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EXHIBIT
A
Term
Sheet
April
17, 2008
CONFIDENTIAL
Summary
of Terms and Conditions for
Second
Amended and Restated Revolving Credit and Letter of Credit Facility
in the Amount of up
to $250 Million
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Borrowers:
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Interstate
Bakeries Corporation, a Delaware corporation (“Parent”), which
is a debtor-in-possession in a case (the “Parent’s Case”)
filed on September 22, 2004 (the “Petition Date”)
under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy
Code”) (the “Parent
Borrower”) and each of its subsidiaries listed on Schedule
A to this summary of terms and conditions (the “Term Sheet”)
(each a “Subsidiary
Borrower” and, collectively, the “Subsidiary
Borrowers”; and together with the Parent Borrower, the “Borrowers”),
each of which is a debtor-in-possession in a case under the Bankruptcy
Code in the United States Bankruptcy Court for the Western District of
Missouri (the “Bankruptcy
Court”) (together with the Parent’s Case, the “Cases”). The
Borrowers are party to an Amended and Restated Revolving Credit Agreement
dated as of February 16, 2007 with JPMCB as administrative agent and the
lenders party thereto (as amended from time to time, the “Existing Credit
Agreement”).
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Administrative
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Agent and
Lenders:
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JPMorgan
Chase Bank, N.A. (“Administrative
Agent” or “JPMCB”) will
serve as Administrative Agent under the facility contemplated hereby (the
“Facility”) for
a syndicate of financial institutions (including JPMCB, the “Lenders”) to be
arranged by ▇.▇. ▇▇▇▇▇▇ Securities Inc. (“JPMorgan”) and
identified on Schedule B to this Term Sheet. The Commitments of
the Lenders shall be several and not joint.
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Collateral
Agent:
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JPMCB
will serve as Collateral Agent under the Facility for the
Lenders.
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Commitment
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and
Avail-
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ability:
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Subject
to reduction prior to the Closing Date under the circumstances described
in this paragraph, a total revolving credit commitment (the “Commitment”;
the loans made thereunder, the “Loans”) of up
to $250 million, with a sublimit of $180 million (increased from $150
million under the Existing Credit Agreement) for standby letters of credit
to be
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issued
for purposes that are satisfactory to the Administrative Agent
(collectively, the “Letters of
Credit”). The
Commitment will be comprised of (i) a tranche in the amount of up to $90
million (“Tranche A”),
and (ii) a tranche in the amount of up to $160 million (“Tranche B”)
subdivided into an amount of up to $40 million (“Tranche B1”)
and an amount of up to $120 million (“Tranche
B2”). The Commitment will be reduced by the amount of
any permanent reduction in the commitment under the Existing Credit
Agreement occurring on April 17, 2008 or at any time thereafter through
and including the Closing Date, such reduction to be applied to Tranche A
and when Tranche A has been reduced to zero to the remaining
Commitment. All direct borrowings and letters of credit
issued under the Amended Credit Agreement (as defined below) will be
allocated pro rata among the Lenders within the Commitment. All Letters of
Credit issued and outstanding under the Existing Credit Agreement as of
the initial extension of credit under the Amended Credit Agreement and all
borrowings outstanding thereunder on such date shall be deemed to be
issued and outstanding under the Amended Credit Agreement and allocated
pro rata among the Lenders within the Commitment.
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Documentation:
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The
Facility will be made available pursuant to an amended and restated credit
agreement (the Existing Credit Agreement as so amended and restated, the
“Amended Credit
Agreement”) and related documentation in form and substance
satisfactory to all parties thereto including, without limitation, the
Administrative Agent (together with the Amended Credit Agreement, the
“Amended
Post-Petition Credit Facility Documentation”).
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Term:
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Borrowings
shall be repaid in full in cash, and the Commitment shall terminate, at
the earliest of (i) September 30, 2008 (the “Maturity
Date”), (ii) the substantial consummation (as defined in Section
1101 of the Bankruptcy Code and which for purposes hereof shall be no
later than the effective date) of a plan of reorganization (a “Plan”) that is
confirmed pursuant to an order entered by the Bankruptcy Court or any
other court having jurisdiction over the Cases (the “Consummation
Date”), (iii) the filing of a Plan that does not provide for
payment of all of the Borrowers’ obligations under the Amended Credit
Agreement in full in cash on the Consummation Date, and (iv) the
acceleration of the Loans and the termination of the Commitment in
accordance with the Amended Credit Agreement hereinafter referred to
(together with the Maturity Date and the Consummation Date, the “Termination
Date”).
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Letters
of
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Credit:
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Letters
of Credit shall be issued for the account of the Borrowers by JPMCB as
Fronting Bank or by one or more other fronting banks (collectively, the
“Fronting
Bank”), each of which shall be reasonably satisfactory to the
Borrowers and the Administrative Agent. Letters of Credit shall
expire no later than three hundred sixty-five (365) days
after
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the
Maturity Date. Drafts drawn under Letters of Credit shall be
reimbursed not later than the first business day following the date of
draw. If the Termination Date occurs prior to the expiration of
any Letter of Credit, each such Letter of Credit shall be replaced and
returned to the Fronting Bank undrawn and marked “canceled” on or prior to
the Termination Date, or to the extent that the Borrowers are unable to
replace any of the Letters of Credit, such Letters of Credit shall be (a)
secured by a back-to-back letter of credit that is in an amount equal to
the greater of (i) an amount, as determined by JPMCB, equal to the face
amount of such Letters of Credit plus the sum of all projected contractual
obligations to JPMCB and the Lenders of the Borrowers thereunder through
the expiration date(s) of such Letters of Credit and (ii) 105% of the then
undrawn stated amount of such Letters of Credit, in a form that is
satisfactory to the Administrative Agent and the Fronting Bank and issued
by a bank that is satisfactory to the Administrative Agent and the
Fronting Bank and/or (b) cash collateralized in an amount equal to the
greater of (i) an amount, as determined by JPMCB, equal to the face amount
of such Letters of Credit plus the sum of all projected contractual
obligations to JPMCB and the Lenders of the Borrowers thereunder through
the expiration date(s) of such Letters of Credit and (ii) 105% of the face
amount of such Letters of Credit (“Cash
Collateralization”) by the deposit of cash in such amount into an
account established by the Borrowers under the sole and exclusive control
of the Administrative Agent (“Letter of Credit
Account”), such cash to be promptly remitted to the Borrowers upon
the expiration, cancellation or other termination or satisfaction of the
Borrowers’ reimbursement obligations. Funds currently on
deposit in the Letter of Credit Account pursuant to the terms of the
Existing Credit Agreement shall remain in such Letter of Credit Account
under and pursuant to the Amended Credit Agreement. Funds
deposited in the Letter of Credit Account on April 17, 2008 or at any time
thereafter through and including the Closing Date, shall be applied to
Cash Collateralize Letters of Credit outstanding under Tranche A and when
such Letters of Credit have been fully Cash Collateralized shall be
applied to Letters of Credit outstanding under the remaining
Commitment.
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Closing
Date:
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Amended
Credit Agreement to be executed and delivered on or prior to May 16, 2008,
with the Closing Date to occur as promptly as is practicable after the
entry of the Amendment Order hereinafter referred to, but no later than
ten (10) days after such entry.
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Priority
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and
Liens:
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All
direct borrowings and reimbursement obligations under Letters of Credit
and in respect of overdrafts hereinafter referred to shall at all
times:
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(i)
pursuant to Section 364(c)(1) of the Bankruptcy Code, be entitled to
superpriority claim status in the
Cases;
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(ii)
pursuant to Section 364(c)(2) of the Bankruptcy Code, be secured by a
perfected first priority lien on all unencumbered property of the
Borrowers and on all cash maintained in the Letter of Credit Account and
any direct investments of the funds contained therein, provided that
following the Termination Date, amounts in the Letter of Credit Account
shall not be subject to the Carve-Out hereinafter referred
to;
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(iii)
pursuant to Section 364(c)(3) of the Bankruptcy Code, be secured by a
perfected junior lien on all property of the Borrowers that is subject to
valid and perfected liens in existence on the Petition Date or to valid
liens in existence on the Petition Date that are perfected subsequent to
such commencement as permitted by Section 546(b) of the Bankruptcy Code;
and
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(iv) pursuant
to Section 364(d)(1) of the Bankruptcy Code and other than as expressly
set forth in the Final Order, as hereinafter defined, be secured by a
perfected first priority, senior priming lien on all of the property of
the Borrowers (including, without limitation, inventory, receivables,
rights under license agreements, and property, plant and equipment) that
is subject to the existing liens which secure (x) the obligations of the
Parent Borrower and certain of the Subsidiary Borrowers under or in
connection with that certain Amended Credit Agreement dated as of April
25, 2002 (as amended, supplemented or otherwise modified prior to the
Petition Date, the “Pre-Petition Credit
Agreement”), among the Parent Borrower and certain of the
Subsidiary Borrowers, the lenders from time to time party thereto, JPMCB,
as administrative agent, and others, and (y) other obligations or
indebtedness of the Borrowers pursuant to other agreements in an aggregate
amount in excess of $2.5 million, all of which existing liens under the
Pre-Petition Credit Agreement and such other agreements and all liens
junior thereto (collectively, the “Primed Liens”;
the parties who hold Primed Liens, collectively, the “Primed
Parties”) shall be primed by and made subject and subordinate to
the perfected first priority senior priming liens to be granted to the
Administrative Agent, which senior priming liens in favor of the
Administrative Agent shall also prime any liens granted after the
commencement of the Cases to provide adequate protection liens in respect
of any of the Primed Liens but shall not prime liens, if any, to the
extent such liens secure obligations (other than obligations under the
Pre-Petition Credit Agreement) in an aggregate amount less than or equal
to $2.5 million,
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subject
in each case only to (x) in the event of the occurrence and during the
continuance of an Event of Default (as defined herein), or an event that
would constitute an Event of Default with the giving of notice or lapse of
time or both (a “Default”), the
payment of allowed and unpaid professional fees and disbursements incurred
by the Borrowers and any statutory committees appointed in the Cases in an
aggregate amount not in excess of $3 million (plus the amount set forth in
the most recent Borrowing Base Certificate delivered by the Borrowers to
the Administrative Agent of then unpaid professional fees and expenses
incurred prior to the occurrence of a Default or Event of Default to the
extent that such unpaid fees and expenses are subsequently allowed by the
Bankruptcy Court), and (y) the payment of fees pursuant to 28 U.S.C. § 1930 and
to the Clerk of the Bankruptcy Court ((x) and (y), together, the “Carve-Out”) ,
provided
that no portion of the Carve-Out shall be utilized for the payment of
professional fees and disbursements incurred in connection with any
challenge to the amount, extent, priority, validity, perfection or
enforcement of the indebtedness of the Borrowers owed with respect to the
parties primed by the priming liens or to the collateral securing such
indebtedness or any other action against such parties. Amounts
in the Letter of Credit Account shall not be subject to the
Carve-Out. Notwithstanding the foregoing, so long as no Default
or Event of Default shall have occurred and be continuing, the Borrowers
shall be permitted to pay compensation and reimbursement of expenses
allowed and payable under 11 U.S.C. §§ 328, 330
and 331, as the same may be due and payable, and the same shall not reduce
the Carve-Out.
|
|
|
Subject
to the priorities set forth above and to the Carve-Out, as to all real
property the title to which is held by a Borrower, or the possession of
which is held by a Borrower pursuant to leasehold interest, the Parent
Borrower and each of the Subsidiary Borrowers shall assign and grant a
security interest in, hypothecate, mortgage, pledge and set over unto
JPMCB on behalf of the Lenders all of the right, title and interest of the
Borrowers, in all of such owned real property and in all such leasehold
interests, together in each case with all of the right, title and interest
of the Borrowers in and to all buildings, improvements, and fixtures
related thereto, any lease or sublease thereof, all general intangibles
relating thereto and all proceeds thereof. The Parent Borrower
and each of the Subsidiary Borrowers acknowledge that, pursuant to an
order (the “Amendment
Order”) approving the amendment and restatement of the Existing
Credit Agreement. The Amendment Order (i) shall approve or
otherwise reaffirm the payment by the Borrowers of all fees contemplated
thereby and (ii) 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. The liens in favor of JPMCB on
behalf of the Lenders in all of such real property and leasehold
instruments of the
|
5
|
Borrowers
shall be perfected without the recordation of any instruments of mortgage
or assignment. The Parent Borrower and each of the Subsidiary
Borrowers further agree that, upon the request of JPMCB, in the exercise
of its business judgment, the Parent Borrower and each of the Subsidiary
Borrowers shall enter into separate fee mortgages in recordable form with
respect to such properties on terms satisfactory to
JPMCB.
|
|
|
All
intercompany/affiliate liens, if any, will be contractually subordinated
to the Facility on terms satisfactory to the Administrative
Agent.
|
|
|
To
the extent any Borrower makes aggregate payments to the Lenders in excess
of the aggregate amount of all loans and advances received by such
Borrower from the Lenders after the commencement of the Cases, then such
Borrower, after the payment in full of all obligations of the Borrowers in
respect of the Commitment and the termination of the Commitment, shall be
entitled to a claim under Section 364(c)(1) of the Bankruptcy Code against
each other Borrower, in such amount as may be determined by the Bankruptcy
Court taking into account the relative benefits received by each such
person, and such claims shall be deemed to be subordinate and junior in
all respects to the superpriority claims of the Lenders and the
superpriority claims granted as adequate protection to the Primed
Parties.
|
|
|
Use
of
|
|
|
Cash
|
|
|
Collateral:
|
The
Commitment shall not be available for use by the Borrowers unless the
Bankruptcy Court shall have entered the Amendment Order, the terms of
which order must be reasonably satisfactory to the Administrative Agent
and the Lenders in their sole discretion. The Commitment shall
not be available for direct borrowings unless the Borrowers shall at that
time have the use of cash collateral for the purposes that are described
under “Use of
Proceeds” below.
|
|
Use of
Proceeds:
|
The
Commitment shall be available 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, in a manner
substantially consistent with the Budget and the terms and conditions
described in this Term Sheet. The Letters of Credit shall be
issued in support of obligations of the Borrowers that are acceptable to
the Administrative Agent.
|
|
Depository
|
|
|
Relationship:
|
JPMCB
shall remain the principal concentration bank of the
Borrowers.
|
6
|
Approval
|
|
|
Fee:
|
To
the Administrative Agent for the account of each Lender, the Borrowers
will pay (a) for each Lender a fee of fifty (50) basis points on the
amount of such Lender’s Tranche A Commitments, (b) for each Lender a fee
of one hundred (100) basis points on the amount of such Lender’s Tranche
B1 Commitments and (c) for each Lender a fee of five hundred thirty-five
(535) basis points on the amount of such Lender’s Tranche B2 Commitments,
such approval fee earned and payable on the Closing
Date.
|
|
Commitment
|
|
|
Fee:
|
0.50%
per annum on the unused portion of the Commitment. In each
case, the issuance of Letters of Credit shall be treated as usage of the
Commitment. Such fees shall be payable monthly in arrears
during the term of the Facility.
|
|
Nature
|
|
|
of
Fees:
|
Non-refundable
under all circumstances.
|
|
Letter
of
|
|
|
Credit
Fees:
|
Tranche
A – 3.00% per annum on the undrawn face amount of each Letter of Credit;
Tranche B -- 4.50% per annum on the undrawn face amount of each Letter of
Credit, plus, in each
case, customary fees for fronting, issuance, amendments and
processing.
|
|
Interest
|
|
|
Rate:
|
Tranche
A - JPMCB’s Alternate Base Rate (“ABR”) plus 2.00% or,
at the Borrowers’ option, LIBOR plus 3.00% for
interest periods of 1, 3 or 6 months; interest shall be payable monthly in
arrears, at the end of any interest period and on the Termination
Date.
|
|
Tranche
B – ABR plus 3.50% or,
at the Borrowers’ option, LIBOR plus 4.50% for
interest periods of 1, 3 or 6 months; interest shall be payable monthly in
arrears, at the end of any interest period and on the Termination
Date.
|
|
|
Default
|
|
|
Interest:
|
Upon
the occurrence and during the continuance of any default in the payment of
principal, interest or other amounts due under the Amended Credit
Agreement (including, without limitation, in respect of Letters of
Credit), interest shall be payable on demand at 2% above the then
applicable rate.
|
|
Borrowing
|
|
|
Base:
|
The
sum of the aggregate outstanding amount of Loans
plus
Letters of Credit issued for the account of the Borrowers shall at no time
exceed the Borrowing Base. The Borrowing Base shall include
inventory and
|
7
|
receivables,
in each case meeting certain eligibility standards initially determined by
the Administrative Agent, and a component (the “Real Property
Component”) determined with reference to certain of the Borrowers’
eligible real property. Borrowing Base standards may be fixed
and revised from time to time so as to reduce the amount of the Borrowing
Base by the Administrative Agent in the Administrative Agent’s exclusive
judgment. Any adjustment to Borrowing Base standards that would
result in an increase in the amount of the Borrowing Base will require the
consent of a Super-Majority of the Lenders. The Borrowing Base
shall initially include an advance rate of 85% against eligible accounts
receivable and 40% against eligible inventory. The Real
Property Component shall at no time exceed $150 million. The
Real Property Component of the Borrowing Base shall be subject to
reduction concurrent with the sale of any assets constituting part of the
Real Property Component. The Carve-Out and other reserves,
including without limitation, an environmental reserve, shall reduce the
Borrowing Base.
|
|
|
Minimum
|
|
|
Borrowing:
|
$5
million for LIBOR Loans and $1 million for ABR Loans, with no more than
twelve (12) borrowings of LIBOR loans outstanding at any one
time; the Administrative Agent must receive (by 12:00 Noon, New
York City time) notice (x) one (1) business day prior to the requested
borrowing date for ABR Loans and (y) three (3) business days prior to the
requested borrowing date for LIBOR Loans; provided that same day
borrowings of ABR Loans in an aggregate amount of up to $3 million will be
available if notice is received by the Administrative Agent no later than
10:00 a.m., New York City time, on such day.
|
|
Mandatory
|
|
|
Prepayments
|
|
|
and
Cash
|
|
|
Collateralization:
|
Mandatory
prepayments shall be required to the extent that the sum of the Borrowers’
Loans plus
outstanding Letters of Credit (including unreimbursed disbursements)
exceeds the lesser of (x) the then available Commitment or, (y) the
Borrowing Base. Upon the receipt of the net proceeds by any of
the Borrowers or their Subsidiaries from any asset sales (other than sales
of inventory in the ordinary course of business), the Borrowers shall,
jointly and severally, apply such net proceeds as
follows: first, to repay
the then outstanding Loans under Tranche A; second, to
deposit an amount in the Letter of Credit Account up to 105% of the then
Letter of Credit outstandings under Tranche A; third to repay
the then outstanding Loans under Tranche B; fourth to
deposit an amount in the Letter of Credit Account up to 105% of the then
Letter of Credit Outstandings under Tranche B; and thereafter,
such net proceeds may be (I) deposited in the Letter of Credit Account or
(II) retained by the
|
8
|
Borrowers
and invested in investments permitted under the Amended Credit Agreement
or used for expenditures in the ordinary course of business (subject to
compliance with the terms and conditions of the Amended Credit
Agreement). The Commitments under each Tranche shall be reduced
by an amount equal to the sum of (i) the net proceeds of the subject asset
sale required to be applied to repay the then outstanding Loans under such
Tranche pursuant to preceding sentence, plus (ii) the
net proceeds of the subject asset sale retained by the Borrowers pursuant
to part (II) of the last clause of the preceding sentence, such reduction
to be applied to Tranche A and when Tranche A has been reduced to zero to
the remaining Commitment.
|
|
|
Prepayments
of
|
|
|
Loans
From
|
|
|
Available
Cash:
|
If
there are outstanding Loans and the fair market value of cash and cash
equivalents of the Borrowers held in securities accounts and deposit
accounts (“Available Cash”) exceeds $60,000,000, then prepayments of Loans
shall be required in the amount of such excess (or, if less, the
outstanding balance of Loans), such prepayments to be applied first to
repay the then outstanding Loans under Tranche A and second to repay the
then outstanding Loans under Tranche B.
|
|
Optional
|
|
|
Prepayment:
|
Amounts
may be prepaid in integral multiples of $1 million without penalty (except
for any breakage costs associated with LIBOR Loans) upon (x) at least one
(1) business day’s prior notice for ABR Loans and (y) three (3) business
day’s prior notice for LIBOR Loans. Unless a Default or Event
of Default is then in existence, such prepayments shall be applied pro
rata among the Commitments. If a Default or Event of Default
exists at the time of any such payment, such payment shall be applied
first to Loans outstanding under Tranche A and second to Loans outstanding
under Tranche B. The Commitments under each Tranche shall be
reduced on a pro rata basis by an amount equal to the amount of the
prepayment required to be applied to repay the then outstanding Loans
under such Tranche pursuant to the applicable preceding
sentence.
|
|
Conditions
of
|
|
|
Initial
Extension
|
|
|
of
Credit:
|
The
obligation to provide the initial extension of credit shall be subject to
the satisfaction of the following conditions (subject to such exceptions
as may be satisfactory to the Administrative
Agent):
|
|
(a)
|
Supporting
Documents. The Administrative Agent shall have received
for each of the Borrowers:
|
||
|
(i) Bring-down
certificates delivered by each Borrower (A) certifying that there were no
changes, or providing the text of
|
|||
9
|
changes,
to the organizational documents of such Borrowers as delivered pursuant to
Section 4.1(a) of the Existing Credit Agreement and (B) to the effect that
each Borrower is in good standing in its jurisdiction of incorporation,
organization or formation and in each jurisdiction in which it is
qualified as a foreign corporation or other entity to do
business;
|
|||
|
(ii) signature
and incumbency certificates of the officers of such Borrower executing the
Amended Post-Petition Credit Facility Documentation to which it is a
party, dated as of the date of the Amended Credit Agreement (the “Amendment
Effectiveness Date”);
|
|||
|
(iii) duly
adopted resolutions of the board of directors or similar governing body of
each Borrower approving and authorizing the execution, delivery and
performance of the Amended Post-Petition Credit Facility and the other
Amended Post-Petition Credit Facility Documentation to which it is a party
or by which it or its assets may be bound as of the Amendment
Effectiveness Date, certified as of the Amendment Effectiveness Date by
its secretary or assistant secretary as being in full force and effect
without modification or amendment; and
|
|||
|
(iv) such
other documents as the Administrative Agent may reasonably
request.
|
|||
|
(b)
|
Amendment
Order. Not later than May 16, 2008, the Administrative
Agent shall have received the Amendment Order in a form reasonably
satisfactory to the Administrative Agent, the Lenders and the
Borrowers. If the Amendment Order is the subject of a pending
appeal in any respect, it shall be a condition to the extension of credit
under the Amended Credit Agreement that 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 Amended Credit
Agreement or under the Amended Post-Petition Credit Facility Documentation
or under any other instrument or agreement referred to herein shall be the
subject of a presently effective stay pending appeal.
|
||
|
(c)
|
Loan
Documents. The Agent shall have received the Amended
Credit Agreement, duly executed and delivered by the Administrative Agent,
the Parent Borrower, each Subsidiary Borrower and each Lender and, upon
request of the Administrative Agent, the Parent Borrower and each
Subsidiary Borrower shall have duly executed and delivered to the
Administrative Agent an
|
||
10
| Amended Security and Pledge Agreement in a form reasonably satisfactory to the Administrative Agent and the Lenders. | |||
|
(d)
|
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.
|
||
|
(e)
|
Payment of
Fees. The Borrowers shall have paid to the
Administrative Agent the then unpaid balance of all accrued and unpaid
fees due under and pursuant to the Amended Post-Petition Credit
Agreement.
|
||
|
(f)
|
Closing
Documents. The Administrative Agent shall have received
all documents required by the Amended Credit Agreement satisfactory in
form and substance to the Administrative Agent in its exclusive
discretion.
|
||
|
Conditions
of
|
|
|
Each
Extension
|
|
|
of
Credit:
|
The
obligation to provide each extension of credit (including the initial
extension of credit) shall be subject to the satisfaction of the following
conditions:
|
|
(a)
|
The
Amendment Order and Final Order shall be in full force and effect, and
shall not have been reversed, modified, amended or
stayed;
|
|
|
(b)
|
No
Default or Event of Default shall exist;
|
|
|
(c)
|
Representations
and warranties shall be true and correct in all material respects at the
date of each extension of credit except to the extent such representations
and warranties relate to an earlier date;
|
|
|
(d)
|
Receipt
of a notice of borrowing from the Borrowers;
|
|
|
(e)
|
Receipt
by the Administrative Agent of a Borrowing Base Certificate in accordance
with the applicable provision of the Amended Credit Agreement dated no
more than seven (7) days prior to the extension of credit, which Borrowing
Base Certificate shall include supporting schedules as required by the
Administrative Agent;
|
|
|
(f)
|
The
Borrowers shall have paid the balance of all fees then payable as
referenced herein;
|
11
|
(g)
|
The
uses of such extension of credit shall be substantially consistent with
the Budget, as updated from time to time; and
|
|
|
(h)
|
Such
other customary conditions as may be mutually agreed upon by the
Administrative Agent and the
Borrowers.
|
|
The
request by the Borrowers for, and the acceptance by the Borrowers of, each
extension of credit under the Amended Credit Agreement shall be deemed to
be a representation and warranty by the Borrowers that the conditions
specified above have been satisfied or waived.
|
|
|
Representations
|
|
|
and
Warranties:
|
Each
Borrower shall represent and warrant in a manner satisfactory to the
Administrative Agent as to:
|
|
(a)
|
Due
incorporation and good standing of each Borrower;
|
|
|
(b)
|
No
consent or approval is required other than the Amendment Order and the
Final Order, neither of which (as applicable) shall have been amended,
stayed, vacated, reversed or rescinded;
|
|
|
(c)
|
Due
authorization, execution and delivery of Amended Post-Petition Credit
Facility Documentation; no violation of other material agreements entered
into after the commencement of the Cases; no violation of law as a result
of execution, delivery or performance of the Amended Post-Petition Credit
Facility Documentation;
|
|
|
(d)
|
No
liens on the assets of the Borrowers except for liens that are
satisfactory to the Administrative Agent and are reflected on a schedule
annexed to the Amended Credit Agreement or are permitted by the Amended
Credit Agreement;
|
|
|
(e)
|
Financial
statements for the fiscal year ended June 2, 2007 present fairly, in all
material respects, the financial condition and results of operations of
the Borrowers on a consolidated basis as of the date thereof and have been
prepared in a manner consistent with GAAP;
|
|
|
(f)
|
Compliance
in all material respects with applicable laws and regulations including
(without limitation) applicable environmental laws and regulations other
than with respect to the American Bakers Association Retirement Plan (the
“ABA Pension
Plan”), a defined benefit pension plan established in 1961 to
provide pension benefits to certain employees of several unrelated
|
12
| companies in the baking industry, including, without limitation, the Borrowers; | ||
|
(g)
|
No
material adverse change in the operations, business, properties, assets,
prospects or condition (financial or otherwise) of the Borrowers and their Subsidiaries taken as a whole has occurred since
June 2, 2007 other than those which customarily occur as a result of
events and circumstances following the commencement of a proceeding under
Chapter 11 of the Bankruptcy Code other than with respect to the ABA
Pension Plan and any matter (the “Disclosed
Matters”) which has been disclosed by any of the Borrowers in any
filing on Form 10-K, 10-Q or 8-K made with the Securities and Exchange
Commission prior to April 2, 2008; provided, that
no matter shall constitute a “Disclosed Matter” to the extent it shall
prove to be, or shall become, materially more adverse to the Borrowers
taken as a whole or to the Lenders than it would have reasonably appeared
to be on the basis of the disclosure contained in any of the documents
referred to above in this definition;
|
|
|
(h)
|
No
information that has been furnished in writing by the Borrowers to the
Administrative Agent or the Bankruptcy Court contained any material
misstatement of fact or omitted to state a material fact necessary to make
the statements contained therein not misleading in light of the
circumstances in which made;
|
|
|
(i)
|
There
is no unstayed litigation which is reasonably likely to have a material
adverse effect on the operations, business, properties, assets, prospects
or financial condition of the Borrowers taken as a whole (subject to
certain disclosures on Schedule C hereto, provided, that
no such disclosed matter shall be excepted from the comparable
representation to be set forth in the Amended Credit Agreement to the
extent it shall prove to be, or shall become, materially more adverse to
the Borrowers taken as a whole or to the Lenders than it would have
reasonably appeared to be on the basis of the disclosure contained on
Schedule C);
|
|
|
(j)
|
Use
of proceeds as set forth in “Use of
Proceeds” above;
|
|
|
(k)
|
Insurance
is sufficient and in such amounts as is customarily carried by similar
companies in the Borrowers’ industries; and
|
|
|
(l)
|
Such
other customary representations and warranties as may be mutually agreed
upon by the Administrative Agent and the
Borrowers.
|
13
|
Affirmative
|
|
|
Covenants:
|
The
Borrowers shall:
|
|
(a)
|
Keep
financial statements in accordance with GAAP and maintain true and
complete books and records;
|
|
|
(b)
|
Furnish:
|
|
|
(i) Consolidated
monthly cash flow reports within forty-five (45) days after the end of
each fiscal month;
|
||
|
(ii) Monthly
consolidated financial statements within forty-five (45) days after the
end of each fiscal month (including the amount of Available Cash at the
end of each such fiscal month);
|
||
|
(iii) Quarterly
consolidated financial statements within forty-five (45) days after the
end of each fiscal quarter;
|
||
|
(iv) Annual
consolidated financial statements within ninety (90) days after the end of
each fiscal year; and
|
||
|
(v) Such
other reports as may be reasonably requested by the Administrative Agent
or any Lender;
|
||
|
(c)
|
Deliver
weekly (by Friday of each week with respect to the immediately preceding
week) and monthly (by the 20th
day of each month with respect to the immediately preceding fiscal month)
Borrowing Base Certificates satisfactory to the Administrative
Agent;
|
|
|
(d)
|
On
the Amendment Effectiveness Date and every two (2) weeks thereafter,
furnish a forecast of sources and uses of cash by the Borrowers on a
weekly basis covering the succeeding thirteen (13) calendar weeks, which
shall be in form and substance satisfactory to the Administrative Agent
and to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company or such other financial advisor as
may be acceptable to the Administrative Agent (as updated from time to
time, the “Cash
Flow Forecast”);
|
|
|
(e)
|
Commencing
on the date which is two (2) weeks after the Borrowers’ delivery of the
initial Cash Flow Forecast, and every two (2) weeks thereafter, an update
of the Forecast for the then succeeding thirteen (13) calendar weeks, in
form and substance satisfactory to the Administrative Agent and ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ & Company or such other financial advisor as may be acceptable
to the Administrative Agent;
|
14
|
(f)
|
Furnish
within forty-five (45) days from the end of the second fiscal quarter of
each fiscal year of the Borrowers, and within sixty (60) days from the end
of the last fiscal quarter of each fiscal year of the Borrowers, an update
of the Budget satisfactory in form and substance to the Administrative
Agent and to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company or such other financial advisor
as may be acceptable to the Administrative Agent, and be available to
discuss such updated Budget with the Administrative Agent upon the
Administrative Agent’s reasonable request;
|
|
|
(g)
|
Furnish
within forty-five (45) days after the end of each fiscal month, a summary
of the results of the Borrowers’ business operations for the preceding
month as compared to the corresponding period in the projections provided
to the Lenders on April 2, 2008 or any updated projections provided
thereafter pursuant to Section 5.1(i) of the Amended Credit Agreement,
including a discussion of significant variances, which summary shall
describe results on the basis of the Borrowers and their respective
Subsidiaries on a consolidated basis;
|
|
|
(h)
|
Deliver
to the Administrative Agent and its counsel all pleadings, motions,
applications, judicial information, financial information, and other
documents filed by or on behalf of the Borrowers with the Bankruptcy
Court;
|
|
|
(i)
|
Maintain
insurance on all its property in a manner which is customary in the
Borrowers’ industries with financially sound and responsible insurance
companies;
|
|
|
(j)
|
Do
all things necessary to preserve, renew and keep in full force its
corporate existence;
|
|
|
(k)
|
Pay
all post-petition taxes and other post-petition obligations as and when
due except where contested in good faith and by appropriate proceedings
(if the Borrowers shall have set aside on their books adequate reserves
therefor);
|
|
|
(l)
|
Notify
the Administrative Agent of any Default or Event of
Default;
|
|
|
(m)
|
Permit
the Collateral Agent and its representatives to visit the premises of the
Borrowers, confer with officers and representatives of the Borrowers and
review all of their books and records, and to conduct collateral reviews
and appraisals and to monitor the
|
15
|
collateral
held by the Collateral Agent (in each case at the Borrowers’
expense);
|
||
|
(n)
|
Comply
with customary ERISA covenants;
|
|
|
(o)
|
Continue
to retain a chief executive officer who may be reasonably satisfactory to
the Administrative Agent.
|
|
|
(p)
|
Request
proposals for sales of all assets and commence sales process, as
follows: by no later than April 21, 2008, the Borrowers shall
have requested proposals for the sale of the Borrowers and their assets in
their entirety, or in a series of transactions, and, by no later than June
30, 2008, the Borrowers shall have delivered to the Administrative Agent a
schedule (in form and substance satisfactory to the Administrative Agent)
of asset sales (including estimated sales dates and estimated proceeds)
which the Borrowers reasonably expect will generate sales proceeds
sufficient in the aggregate to reduce total usage under the Facility
(minus any cash then held in the Letter of Credit Account) to zero prior
to the Maturity Date; provided, however, that
the Borrowers shall not be required to (x) request such proposals in the
event that on or before April 21, 2008, the Borrowers have (1) filed a
reorganization plan that provides for the refinancing of the Credit
Agreement in full and has the publicly announced support of the Bakery,
Confectionery, Tobacco Workers and Grain Millers International Union and
the International Brotherhood of Teamsters, and is otherwise in form and
substance satisfactory to the Administrative Agent and (2) obtained firm
commitments for funding of all exit financing necessary for confirmation
and consummation of the reorganization plan or (y) deliver such schedule
in the event that on or before June 30, 2008, the reorganization plan
shall have become effective and be consummated, and the obligations under
the Facility shall have been indefeasibly paid in full.
|
|
|
(q)
|
Comply
with such other affirmative covenants as may be mutually agreed upon by
the Administrative Agent and the
Borrowers.
|
|
Negative
|
|
|
Covenants:
|
The
Borrowers shall not (and shall not apply to the Bankruptcy Court for
authority to):
|
|
(a)
|
Merge
or consolidate with any other party;
|
|
|
(b)
|
Create
or permit to exist any liens or encumbrances on any
assets except (i) pre-petition liens and encumbrances as
reflected on a schedule annexed to the Amended Credit Agreement, (ii)
liens in
|
16
|
favor
of the Administrative Agent on behalf of the Lenders, and (iii) such other
liens as may be permitted in the Amended Credit Agreement (the Amended
Credit Agreement will permit (1) liens imposed by law for taxes not yet
due or 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; (2) statutory and other like
liens, pledges or deposits in connection with workers’ compensation and
other social security obligations (other than any liens imposed under
ERISA) and certain non-material liens of landlords, common carriers,
warehousemen and mechanics and other liens (other than environmental liens
and liens imposed under ERISA) imposed by law in the ordinary course of
business; (3) deposits to secure the performance of tenders, bids, and
other contracts, other than for the payment of borrowed money, arising in
the ordinary course of business; (4) easements and other similar
encumbrances that are not material; (5) liens securing purchase money
indebtedness in an amount not to exceed $1,000,000 and existing capital
lease obligations; (6) liens on the assets of subsidiaries of the Parent
securing indebtedness in respect of certain exchange traded futures and
option contracts permitted by the Amended Credit Agreement; and (7) liens
junior to the senior liens contemplated hereby that are granted by any of
the Orders pursuant to 11 U.S.C. §364(d)(1)
as adequate protection to the Primed Parties, provided that
such Orders provide 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 the Amended Credit Agreement or the
Lenders have any Commitment thereunder).
|
||
|
(c)
|
Create
or permit to exist any other superpriority claim which is pari passu with or
senior to the claims of the Administrative Agent and the Lenders under the
Amended Credit Agreement, except for the Carve-Out;
|
|
|
(d)
|
Except
as may be authorized by orders of the Bankruptcy Court and on terms and
conditions acceptable to the Administrative Agent, sell or otherwise
dispose of any assets (including, without limitation, the capital stock of
any subsidiary) except for (i) sales of Inventory, fixtures and
equipment in the ordinary course of business, and (ii) sales of surplus
assets of the Borrowers no longer used in the Borrowers’ business
operations;
|
|
|
(e)
|
Create
or permit to exist indebtedness for borrowed money in addition to
indebtedness under the Amended Credit Agreement other than (i)
pre-petition debt (including existing
capitalized
|
17
|
leases),
(ii) post-petition purchase money indebtedness (exclusive of Capitalized
Leases) in an aggregate amount not to exceed $1,000,000, (iii)
indebtedness owed to JPMCB or any of its banking affiliates in respect of
any overdrafts and related liabilities arising from treasury, depository
and cash management services or in connection with any automated clearing
house transfers of funds and (iv) such other indebtedness as may be
permitted in the Amended Credit Agreement;
|
||
|
(f)
|
Make
capital expenditures (calculated on a consolidated basis) in any fiscal
quarter, or with respect to the last period referenced, portion of such
fiscal quarter, in an aggregate amount in excess of the amounts set forth
below:
|
|
Fiscal Quarter
Ending
|
Maximum Capital
Expenditures
(millions)
|
|
|
May
31, 2008
|
$10.00
|
|
|
August
23, 2008
|
$10.00
|
|
|
October
18, 2008
|
$5.00
|
|
(g)
|
As
of the end of each fiscal period of the Borrowers, commencing with the
fiscal monthly period ending April 5, 2008, the Borrowers will not permit
Consolidated EBITDA for the preceding thirteen consecutive fiscal periods
ending in each case on the last day of the fiscal period listed below to
be less than the respective amounts specified opposite such fiscal
period:
|
|
Fiscal Period
Ending
|
Consolidated
EBITDA
(millions)
|
|
|
April
5, 2008
|
$32
|
|
|
May
3, 2008
|
$23
|
|
|
May
31, 2008
|
$11
|
|
|
June
28, 2008
|
-$5
|
|
|
July
26, 2008
|
-$11
|
|
|
August
23, 2008
|
-$18
|
|
The
term “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
|
18
|
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;
|
||
|
(h)
|
Guarantee
the obligations of others except as permitted by the Amended Credit
Agreement;
|
|
|
(i)
|
Make
loans or investments other than as may be permitted in the Amended Credit
Agreement (the Amended Credit Agreement will permit: (x) existing
intercompany debt as disclosed in the Amended Credit Agreement; (y) and
investments in short term obligations of, or which are guaranteed by, the
United States of America, repurchase agreements with respect to such
securities, short term commercial paper bearing a credit rating of at
least A from Standard & Poors or A2 from ▇▇▇▇▇’▇ Investors Service,
certain certificates of deposit, time deposits, and certain advances among
the Borrowers in the ordinary course);
|
|
|
(j)
|
Directly
or indirectly enter into or permit to exist any material transaction with
any of its affiliates except for (i) transactions that are entered into in
the ordinary course of Borrowers’ business in good faith and upon
commercially reasonable terms, and that are no less favorable to the
Borrowers than would be obtained in an arm’s-length transaction with a
non-affiliate, and (ii) transactions described on a schedule satisfactory
to the Administrative Agent and to be annexed to the Amended Credit
Agreement;
|
|
|
(k)
|
Declare
or make any dividend or make any distribution on account of capital stock
(other than dividends and distributions from any subsidiary of the Parent
to the Parent) or conduct transactions with any of its shareholders on
anything other than on an arm’s length basis;
|
|
|
(l)
|
Except
as may reasonably be expected to result from dispositions permitted by
subsection (d) above, modify or alter in any material manner the nature
and type of its business or the manner in which such business is
conducted, except as required by the Bankruptcy Code;
|
|
|
(m)
|
Other
than as may be permitted in the Amended Credit Agreement, permit, place or
agree to permit or place any restrictions on the payment of dividends or
other distributions among the Borrowers or their subsidiaries or
affiliates or the making of advances or
any
|
19
|
other
cash payments among the Borrowers, their subsidiaries or
affiliates;
|
||
|
(n)
|
Assert
any right of subrogation against any other Borrower until all Borrowings
are paid in full and the Commitment is terminated;
|
|
|
(o)
|
Incur
(or apply to the Bankruptcy Court for authority to incur) cash
restructuring charges for the fiscal period beginning December 17, 2006
and ending October 18, 2008 in an amount in excess of $23,000,000
(calculated as the amount expensed or accrued by the Borrowers or any of
their Subsidiaries during such period on account of restructuring charges
that will ultimately be settled via payment in cash or cash equivalents by
the Borrowers or any of their Subsidiaries). Borrowers shall
provide documentation supporting such cash restructuring charges in form
and substance reasonably satisfactory to the Administrative Agent
concurrent with delivery of financial statements evidencing the incurrence
thereof;
|
|
|
(p)
|
File
(or apply to the Bankruptcy Court for authority to file) any
reorganization plan that does not provide for the repayment in full in
cash on the effective date thereof of all outstanding obligations under
the Facility;
|
|
|
(q)
|
Enter
into derivative agreements except to the extent permitted by the Amended
Credit Agreement; and
|
|
|
(r)
|
Fail
to comply with such other negative covenants as may be mutually agreed
upon by the Administrative Agent and the
Borrowers.
|
|
Events
of
|
|
|
Default:
|
Upon
the occurrence and during the continuance of any of the following Events
of Default beyond the applicable grace period (if any) set forth below,
the Administrative Agent may take all or any of the following actions
without further order of or application to the Bankruptcy Court, provided that
with respect to item (iii) below and the enforcement of liens or other
remedies with respect to collateral referred to in item (v) below, the
Administrative Agent shall provide the Borrowers (with a copy to counsel
for any statutory committees appointed in the Cases and to the United
States Trustee for the Western District of Missouri) with five (5)
business days’ prior written
notice;
|
|
(i)
|
declare
the principal of and accrued interest on the outstanding borrowings to be
immediately due and payable;
|
20
|
(ii)
|
terminate
any further commitment to lend to the Borrowers or to issue Letters of
Credit;
|
||
|
(iii)
|
set-off
any amounts held as cash collateral or in any accounts maintained with
JPMCB;
|
||
|
(iv)
|
require
the Borrowers upon demand to furnish immediate cash collateral for Letters
of Credit then outstanding in an amount equal to 105% of the outstanding
amount of such Letters of Credit (to the extent that the Borrowers fail to
furnish such cash collateral, the Administrative Agent shall be authorized
to debit the accounts of the Borrowers maintained with the Administrative
Agent in such amount five (5) business days after the giving of the notice
referred to above); and/or
|
||
|
(v)
|
take
any other action or exercise any other right or remedy (including, without
limitation, with respect to the liens in favor of the Administrative Agent
and the Lenders) permitted under the Amended Credit Agreement, or by
applicable law.
|
||
|
(a)
|
Failure
by the Borrowers to pay principal, interest or fees when due under the
Amended Credit Agreement;
|
||
|
(b)
|
Breach
by the Borrowers of any of the negative covenants described
above;
|
||
|
(c)
|
Breach
by the Borrowers of any other covenant contained in the Amended Credit
Agreement and such breach shall continue unremedied for more than ten (10)
days;
|
||
|
(d)
|
Failure
by the Borrowers to deliver a certified Borrowing Base Certificate when
due and such default shall continue unremedied for more than three (3)
business days;
|
||
|
(e)
|
Any
representation or warranty made by the Borrowers shall prove to have been
incorrect in any material respect when made;
|
||
|
(f)
|
Any
of the Cases shall be dismissed or converted to a Chapter 7 Case; a
Chapter 11 Trustee, a responsible officer or an examiner with enlarged
powers relating to the operation of the business of the Borrowers (powers
beyond those set forth in Section 1106(a)(3) and (4) of the Bankruptcy
Code) shall be appointed in any of the Cases and the order appointing such
Trustee, responsible officer, or examiner shall not be reversed or
vacated
|
||
21
|
within
thirty-five (35) days after the entry thereof; or any other superpriority
Claim (other than the Carve-Out) which is pari passu with or
senior to the claims of the Administrative Agent and the Lenders shall be
granted in any of the Cases; or the Bankruptcy Court shall enter an order
terminating the use of cash collateral referred to in paragraph (a) of
“Conditions of
Initial Extension of Credit” above;
|
|||
|
(g)
|
Other
than payments authorized by the Bankruptcy Court in respect of the first
day orders and other than Pre-Petition Payments authorized by the
Bankruptcy Court in respect of: (i) accrued payroll and related employee
benefit expenses as of the Filing Date, (ii) reclamation claims in such
amounts as determined by the Borrowers and agreed to by the Administrative
Agent; (iii) materialmen’s liens and certain other pre-petition claims
permitted by the Administrative Agent and authorized by the Bankruptcy
Court in an aggregate amount not to exceed $500,000, (iv) the payment of
current interest and letter of credit fees (and the payment of all
interest and fees that are accrued and unpaid as of the Filing Date) at
the applicable non-default rates provided for pursuant to the Pre-Petition
Credit Agreement, all as described in the Borrowers’ Motion for Interim and
Final Orders (I) Authorizing Debtors to (A) Obtain Postpetition Financing
pursuant to 11 U.S.C. §§ 105, 361, 362, 363, 364(C)(1), 364(C)(2),
364(C)(3) and 364(d)(1), and (B) Utilize Cash Collateral pursuant to 11
U.S.C. § 363, (II) Granting Adequate Protection to Prepetition Secured
Parties pursuant to 11 U.S.C. §§ 361, 362 and 363 and (III) Scheduling
Final Hearing pursuant to Fed. R. Bankr. P. 4001(c), and as
authorized by the Orders, (v) payments in respect of prepetition claims of
taxing authorities in an aggregate amount not to exceed $3,000,000 as
described in the Borrowers’ Motion for Order under
11 U.S.C. §§ 363, 507 and 541 Confirming Authority to Pay Prepetition
Sales and Use Taxes, (vi) payments in respect of certain
prepetition real property tax claims and other secured claims that are
accruing collectible postpetition interest in an aggregate amount not to
exceed $12,000,000 as described in Borrowers’ Motion for an Order
Granting Authority to Compromise and Pay Certain Tax and Other Claims that
are Accruing Collectible Postpetition Interest and/or Penalties,
and as authorized by the Order Granting
Authority to Compromise and Pay Certain Tax and Other Claims that are
Accruing Collectible Postpetition Interest and/or Penalties entered
by the Bankruptcy Court on October 4, 2005, (vii) payments in an amount
not to exceed $2,000,000 which are authorized to be made by that certain
Order Pursuant
to 11 U.S.C. §§ 362 and 363 and Fed. R. Bankr. P. 9019 (A) Granting Relief
From Automatic Stay, (B) Approving
the
|
||
22
|
Debtor’s Settlement
Agreement with ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, on behalf of Himself Individually, and
as Representative of a Class of Individuals Similarly Situated, and (C)
Conditionally Allowing Claims Pursuant to the Settlement Agreement,
and (viii) payments to the Central States Southwest Areas Health and
Welfare Fund and Southeast and Southwest Areas Pension Fund pursuant to
any settlement approved by the Bankruptcy Court, not to exceed $1,500,000
as to any pre-petition claim by such funds, as may be permitted in the
Amended Credit Agreement, the Borrowers shall make any payment (whether by
way of adequate protection or otherwise) of principal or interest or
otherwise on account of any pre-petition indebtedness or
payables;
|
|||
|
(h)
|
The
Bankruptcy Court shall enter an order granting relief from the automatic
stay to the holder or holders of any security interest to permit
foreclosure (or the granting of a deed in lieu of foreclosure or the like)
on any assets of the Borrowers which have an aggregate value in excess of
$250,000;
|
||
|
(i)
|
A
Change of Control (to be defined in the Amended Credit Agreement) shall
occur;
|
||
|
(j)
|
Any
provision of the Amended Credit Agreement shall cease to be valid and
binding on the Borrowers, or the Borrowers shall so assert in any pleading
filed in any court;
|
||
|
(k)
|
An
order shall be entered reversing, amending, supplementing, staying for a
period in excess of ten (10) days, vacating or otherwise modifying the
Amendment Order or the Final Order;
|
||
|
(l)
|
Any
judgment in excess of $250,000 as to any post-petition obligation shall be
rendered against the Borrowers and the enforcement thereof shall not be
stayed (by court ordered stay or by consent of the party litigants), it
being understood that Federal Rule of Civil Procedure 62(a) provides for a
ten day stay on enforcement of money judgments; or there shall be rendered
against the Borrowers a non-monetary judgment with respect to a
post-petition event which causes or would reasonably be expected to cause
a material adverse change or a material adverse effect on the ability of
the Borrowers to perform their obligations under the Amended Post-Petition
Credit Facility Documentation;
|
||
|
(m)
|
Certain
ERISA-related and environment-related defaults (other than as a result of
or solely with respect to the ABA Pension Plan, to the extent the
insufficiency of the ABA Pension Plan does
not
|
||
23
|
exceed
$80 million, or to the extent a special assessment with respect to the ABA
Pension Plan does not exceed $38 million); or
|
|||
|
(n)
|
Such
other Events of Default as may be mutually agreed upon by the
Administrative Agents and the
Borrowers.
|
||
|
Upon
the occurrence and during the continuance of an Event of Default, all
payments made with respect to the Facility shall be applied as
follows: first to fees
and expenses payable pursuant to the Amended Post-Petition Credit Facility
Documentation; second to
principal and accrued interest with respect to Loans outstanding under
Tranche A; third to
deposit an amount in the Letter of Credit Account up to 105% of the then
Letter of Credit Outstandings under Tranche A; fourth to
principal and accrued interest with respect to Loans outstanding under
Tranche B; and fifth to
deposit an amount in the Letter of Credit Account up to 105% of the then
Letter of Credit Outstandings under Tranche B.
|
|
|
Yield
Pro-
|
|
|
tection
and
|
|
|
Increased
|
|
|
Costs;
Taxes:
|
Standard
yield protection and indemnification including capital adequacy
requirements will be incorporated that will satisfactorily compensate the
Lenders in the event that, after execution of the Amended Post-Petition
Credit Facility Documentation, any changes in law, requirement, guideline
or request of relevant authorities shall increase costs, reduce payments
or earnings, or increase capital requirements.
|
|
Costs
and
|
|
|
Expenses;
|
|
|
Indemni-
|
|
|
fication:
|
All
out-of-pocket costs and documented expenses (but delivery of documentation
shall not be a condition to the Borrowers’ payment obligation) of the
Administrative Agent, the Lenders and JPMorgan (including, without
limitation, reasonable fees and disbursements of ▇▇▇▇▇ ▇▇▇▇ LLP and ▇▇▇▇,
Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP and of internal and third-party
appraisers, consultants and auditors advising the Administrative Agent,
the Collateral Agent and ▇▇ ▇▇▇▇▇▇, all fees (including customary fees of
employees of the Collateral Agent), disbursements and out-of-pocket
expenses incurred in connection with the initial and periodic collateral
reviews and appraisals (including collateral monitoring fees of or
incurred by the Collateral Agent), syndication, enforcement of rights and
publicity and other miscellaneous disbursements) shall be payable by the
Borrowers promptly after demand whether or not the transactions
contemplated hereby are consummated. The Borrowers shall
indemnify the Administrative Agent, the Collateral Agent, JPMorgan and the
Lenders against any liability arising
in
|
24
|
connection
with the transactions contemplated hereby (other than in the case of the
gross negligence or willful misconduct of any indemnified
person).
|
|
|
Assignments
|
|
|
and
Participations:
|
The
Lenders shall be permitted to assign all or a portion of their loans and
commitments with the consent, not to be unreasonably withheld, (a) the
Administrative Agent and (b) the Fronting Bank. In the case of
partial assignments (other than to another Lender or to an affiliate of a
Lender), the minimum assignment amount shall be $1 million unless
otherwise agreed by the Borrowers and the Administrative
Agent.
|
|
The
Lenders shall also be permitted to sell participations in their
Loans. Participants shall have the same benefits as the Lenders
with respect to yield protection and increased cost
provisions. Voting rights of participants shall be limited to
those matters with respect to which the affirmative vote of the Lender
from which it purchased its participation would be required as described
under “Voting” below. Pledges of Loans in accordance with
applicable law shall be permitted without restriction.
|
|
|
Voting:
|
Required
Lenders, i.e., banks holding at least a majority of the Commitments except
as to matters requiring unanimity (e.g., the reduction of interest rates,
the extension of interest payment dates, the reduction of fees, the
extension of the maturity of Borrowers’ obligations, changes to any
provision that sets forth the priority of payment as among Tranche A
Lenders and Tranche B Lenders or that concerns the relative rights of
Tranche A Lenders and Tranche B Lenders and the super-priority status of
Borrowers’ obligations) and except that the consent of the Super-Majority
Lenders (defined to mean Lenders, including all Tranche A Lenders, holding
at least 66-2/3% of the Commitments), shall be required with respect to
certain matters consistent with Section 9.10(a) of the Existing Credit
Agreement, including releases of material collateral (other than in
connection with asset sales expressly permitted by the Amended Credit
Agreement). The Amended Credit Agreement will provide that if
the Borrowers request an amendment which requires unanimous consent and
such amendment is consented to by Lenders including JPMCB holding at least
66-2/3% of the Commitments, then with the consent of the Borrowers and
such consenting Lenders, the Amended Credit Agreement may be amended to
replace the Lender(s) which did not consent to the amendment requested by
the Borrowers.
|
|
Agency:
|
Usual
and customary agency provisions satisfactory to the Administrative
Agent.
|
|
Governing
|
25
|
Law:
|
Laws
of the State of New York except as governed by the Bankruptcy
Code.
|
|
|
|
26