<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 2, 2000
REGISTRATION NO. 333-47166
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT No. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
EAGLE FOOD CENTERS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 36-3548019
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
RT. 67 & KNOXVILLE RD., MILAN, IL 61264
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
S. PATRIC PLUMLEY, RT. 67 & KNOXVILLE RD., MILAN, IL 61264
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(309) 787-7730
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPY TO:
BEVERLY EVANS, 666 WALNUT, SUITE 2500, DES MOINES, IOWA 50309
(NAME AND ADDRESS)
(515) 288-2500
(TELEPHONE NUMBER)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM
TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED
PURSUANT TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE
FOLLOWING BOX. [ ]
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON A
DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION WITH DIVIDEND OR
INTEREST REINVESTMENT PLANS, CHECK THE FOLLOWING BOX. [X]
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING
PURSUANT TO RULE 462(b) UNDER THE SECURITIES ACT OF 1933, PLEASE CHECK THE
FOLLOWING BOX AND LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF
THE EARLIER EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING. [ ]
<PAGE>
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(c)
UNDER THE SECURITIES ACT OF 1933, CHECK THE FOLLOWING BOX AND LIST THE
SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE
REGISTRATION STATEMENT FOR THE SAME OFFERING. [ ]
IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE 434,
PLEASE CHECK THE FOLLOWING BOX. [ ]
------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
------------------------------------------------------------
<TABLE>
<CAPTION>
TITLE OF EACH PROPOSED PROPOSED
CLASS SECURITIES AMOUNT TO BE MAXIMUM OFFERING MAXIMUM AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PRICE PER UNIT OFFERING PRICE REGISTRATION FEE
---------------- ------------ -------------- ----------------- ----------------
<S> <C> <C> <C> <C>
COMMON STOCK 1,930,420 $1.03(1) $1,988,333 (2)
SENIOR NOTES $85,000,000 (2)
TOTAL (2)
</TABLE>
(1) BASED ON THE AVERAGE HIGH AND LOW SALES PRICES ON THE NASDAQ
NATIONAL MARKET ON SEPTEMBER 26, 2000.
(2) THE REGISTRATION FEE WAS PAID IN CONNECTION WITH THE INITIAL
FILING OF THE REGISTRATION STATEMENT BY THE REGISTRANT ON
OCTOBER 2, 2000.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE AN AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a)
OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
================================================================================
The information in this prospectus is not complete and may be changed. The
securities have been issued, in reliance on section 3(7) of the Securities Act
of 1933, prior to the date the registration statement filed with the Securities
and Exchange Commission becomes effective. The Company has issued these
securities pursuant to the terms of the First Amended Reorganization Plan of
Eagle Food Centers, Inc., dated April 17, 2000 confirmed by the "Findings of
Fact, Conclusions of Law , and Order Under 11 U.S.C. Sections 1129(a) and (b)
and Fed. R. Bank. P. 3020 Confirming First Amended Reorganization Plan of Eagle
Food Centers, Inc." This prospectus is not an offer to sell these securities and
it is not soliciting an offer to buy these securities in any state where the
offer or sale is not permitted.
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EAGLE FOOD CENTERS, INC.
1,930,420 Shares of Common Stock
$85,000,000 in 11% Senior Notes due April 15, 2005
As previously reported in our March 15, 2000 Report, on February 29, 2000
we filed a Voluntary Petition under Chapter 11 of the Bankruptcy Code (the
"Petition") with the United States Bankruptcy Court for the District of
Delaware. This prospectus has been prepared to register securities issued in
accordance with the terms of the First Amended Reorganization Plan of Eagle Food
Centers, Inc., dated April 17, 2000 (the "Plan") confirmed by the "Findings of
Fact, Conclusions of Law, and Order Under 11 U.S.C. Sections 1129(a) and (b) and
Fed. R. Bank. P. 3020 Confirming First Amended Reorganization Plan of Eagle Food
Centers, Inc." (the "Confirmation Order"), entered by the Court on July 7, 2000.
1,930,420 shares of our common stock and $85,000,000 in 11% Senior Notes due
April 15, 2005 (the "Notes") have been issued to holders of our 8 5/8% Senior
Notes Due April 15, 2000 issued and outstanding under an indenture, dated April
26, 1993 between the Company and U.S. Bank Trust National Association ("U.S.
Bank Trust N.A.") as trustee (the "Old Notes"). The shares of common stock and
the Notes were issued under the terms of the Plan to holders of the Old Notes
and we will not receive any cash proceeds from the issuance of the shares or
the Notes or from the proceeds from any subsequent sale of such securities by
the holders. We have agreed to bear the expenses of registration of the
securities by this prospectus. In this prospectus, we refer to the holders of
the Old Notes and the holders of the Notes simply as the "Note Holders."
Shares of Eagle common stock are currently listed on the Nasdaq National
Market with the symbol: EGLE. The last sale price of the common stock on the
Nasdaq National Market on September 26, 2000 was $1.00 per share.
The shares and Notes registered hereby involve a high level of investment
risk. You should invest only if you can afford a complete loss. See "RISK
FACTORS" beginning on page 9 of this prospectus.
Neither the Securities and Exchange Commission (the "Commission") nor any
state securities commission has approved or disapproved these securities, or
determined if this prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.
The information in this prospectus is not complete and may be changed.
This prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the offer of sale
is not permitted.
-------------------------------
The date of this prospectus is September 27, 2000
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Table of Contents
SUMMARY..................................................... 3
AVAILABLE INFORMATION....................................... 6
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............. 7
THE COMPANY................................................. 7
RECENT EVENTS............................................... 8
USE OF PROCEEDS............................................. 9
RISK FACTORS................................................ 9
RATIO OF EARNINGS TO FIXED CHARGES.......................... 14
SELLING SECURITY HOLDERS.................................... 14
PLAN OF DISTRIBUTION........................................ 20
DESCRIPTION OF THE OFFERING................................. 21
DESCRIPTION OF THE SECURITIES TO BE REGISTERED.............. 21
EXPERTS..................................................... 45
COMMISSION POSITION ON INDEMNIFICATION...................... 46
2
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SUMMARY
On July 7, 2000, the Bankruptcy Court, with the Honorable Roderick R.
McKelvie presiding, entered an order confirming our plan (the Confirmation
Order). A copy of the Confirmation Order is attached as Exhibit 99.2 to our
Current Report on Form 8-K dated July 24, 2000 and is incorporated into this
prospectus by reference. The Plan was consummated on August 7, 2000.
The primary purpose of the Plan is to realign our capital structure to
permit our present operations to continue and allow our future operating
prospects to materialize. Without consummation of the Plan, we would not have
sufficient funds to meet all of our debt service requirements, particularly our
obligations under the Old Notes. The restructuring contemplated by the Plan
calls for an extension of the due date of principal payments and a reduction in
the principal amount owing to Note Holders by a $15,000,000 cash payment to the
Note Holders and the distribution to the indenture trustee for the Notes
approximately 15% of the fully diluted Eagle common stock. Two-thirds of the
common stock distributed to the trustee is subject to clawback if the Company is
sold to a third party or the new Notes are retired prior to October15, 2001, or
a clawback of 1/3 of such stock if one of these events happens after October 14,
2001 but prior to October 15, 2002.
The Old Notes are being exchanged for cash and stock as described above
and the 11% Notes due April 15, 2005 in the aggregate principal amount of $85
million (the Notes). The Notes are being issued pursuant to an indenture
agreement a copy of which is attached as Exhibit 4.1 to our Current Report on
Form 8-K filed on August 17, 2000 and incorporated into this prospectus by
reference.
Under the Plan, current Eagle shareholders were diluted by 15% upon
consummation of the Plan, subject to our right to "clawback" certain common
stock from the trustee prior to final distribution to the Note Holders.
THE OFFERING
The common stock offered in this prospectus is described in our
Registration Statement filed with the Commission on Form 8-A under Section 12 of
the Exchange Act, on July 14, 1989. This description is incorporated into this
prospectus by reference. In addition, our ability to declare and pay dividends
on the common stock has been limited by the terms of the indenture relating to
the Notes and by the terms of our new financing (sometimes referred to as the
"New Senior Secured Facility"). A copy of the New Senior Secured Facility is
attached as Exhibit 10.2 to our Current Report on Form 8-K filed on August 17,
2000 and incorporated into this prospectus by reference.
The Notes are described in summary below. See also "Description of the
Notes" commencing on page 21 below.
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Summary of the Notes
Maturity................. April 15, 2005.
Interest Payment Dates... Semiannually on April 15 and October 15,
commencing October 15, 2000.
Interest Rate............ 11% per annum.
Redemption............... The Notes are redeemable at our option,
in whole or in part, at 100% of the
principal amount thereof, plus accrued
and unpaid interest to the redemption
date. The Notes are not entitled to the
benefit of any sinking fund.
Ranking.................. The Notes are unsecured senior
obligations and rank PARI PASSU with our
other unsecured and unsubordinated
obligations. Consequently, Eagle cannot
incur additional unsecured indebtedness
that is contractually senior in right of
payment to the Notes but, subject to
certain restrictions on the incurrence
of indebtedness, can incur additional
unsecured indebtedness that is
contractually equal or junior in right
of payment. Following the distribution
of the Notes in partial exchange for the
old Notes (the "Exchange"), we will not
have any indebtedness that is
subordinated or junior in right of
payment to the Notes and, although the
indenture permits Eagle to incur such
subordinated or junior indebtedness, it
has no present intention to do so. The
Notes will be effectively subordinated
to our secured senior indebtedness with
respect to the assets securing such
secured indebtedness. After giving PRO
FORMA effect to the Exchange, as of
April 29, 2000, Eagle would have had
secured senior indebtedness (including
capital leases) of approximately $37
million. The indenture permits Eagle to
incur $50 million of secured senior
indebtedness under a revolving credit
facility (under which $2 million is
outstanding as of July 31, 2000, and
included in the $37 million, above), an
unrestricted amount of capital lease
obligations (subject, in the case of
sale and leaseback transactions, to
certain redemption requirements) and
certain other secured indebtedness to
the extent that a consolidated cash flow
test (which would have permitted
approximately $175 million of
indebtedness bearing interest at an
assumed rate of 9% per annum on a PRO
FORMA basis for the four full
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fiscal quarters ending April 29, 2000, excluding
nonrecurring items) is met. See "Risk
Factors-Ranking of the Notes; Ability to Incur
Additional Secured Debt" and "Description of
Credit Facilities."
Principal Covenants...... The indenture will restrict, among other
things, Eagle's and its Subsidiaries'
ability to (i) pledge or dispose of
assets, (ii) engage in transactions with
affiliates, and (iii) acquire assets.
The indenture also restricts our ability
to (i) incur additional indebtedness,
(ii) receive dividend or other payments
from our subsidiaries, (iii) merge or
consolidate with or transfer all or
substantially all of our assets to
another entity and (iv) make
distributions on and repurchases of our
common stock and certain other
"Restricted Payments" which, in the
aggregate, would exceed $20 million. In
addition, the indenture requires that
25% of the proceeds of sale and
leaseback transactions be used to redeem
the Notes. The indenture also restricts
the ability of our subsidiaries to issue
additional shares of common stock and
will prohibit our subsidiaries from
issuing preferred stock or incurring
indebtedness. The restrictions referred
to in this paragraph will generally not
apply to any subsidiary designated as a
Joint Venture Subsidiary or to
transactions effected in connection with
a Change of Control or merger to which
the repurchase obligation referred to
below applies. See "Description of the
Notes."
Repurchase Obligation.... Eagle will offer to repurchase all
outstanding Notes at 100% of their
principal amount plus accrued interest
promptly after the occurrence of a
Change in Control (as defined in the
indenture) or in the event of a sale or
other disposition of Eagle or all or
substantially all of its assets that
would result in the breach of covenants
contained in the indenture, in which
case any such transaction will be deemed
not to have occurred in violation of any
covenant of the indenture. See
"Description of the Notes."
5
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No person has been authorized to give any information or to make any
representations not contained or incorporated by reference in this prospectus in
connection with the securities described in this prospectus and, if given or
made, such information and representations must not be relied upon as having
been authorized by us or the Note Holders. Neither the delivery of this
prospectus nor any sale made under this prospectus shall under any circumstances
create any implication that there has been no change in our affairs since the
date hereof or since the date of any documents incorporated herein by reference.
This prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any securities other than the securities to which it relates, or an
offer or solicitation in any state to any person to whom it is unlawful to make
such offer in such state.
AVAILABLE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith we file reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed can be inspected and copied at the
Commission's Public Reference Section, 450 Fifth Street, N.W., Washington, D.C.,
20549, and at the following regional offices of the Commission: Seven World
Trade Center, 13th Floor, New York, New York 10048 and 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511. Copies of such material can be
obtained from the Public Reference Section of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. The Commission maintains a
web site (http://www.sec.gov) containing reports, proxy and information
statements and other information of registrants, including us, that file
electronically with the Commission. In addition, our common stock is listed on
the Nasdaq National Market and similar information concerning us can be
inspected and copied at the offices of the National Association of Securities
Dealers, Inc., 9513 Key West Avenue, Rockville, Maryland 20850.
We have filed with the Commission a registration statement on Form S-3
(the "Registration Statement") (of which this prospectus is a part) under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Notes and the shares of common stock. This prospectus does not contain all of
the information set forth in the Registration Statement, certain portions of
which have been omitted as permitted by the rules and regulations of the
Commission. Statements contained in this prospectus as to the contents of any
contract or other documents are not necessarily complete, and in each instance
reference is made to the copy of such contract or other document filed as an
exhibit to the Registration Statement, each such statement being qualified in
all respects by such reference and the exhibits and schedules thereto. For
further information regarding us and the securities being registered, reference
is hereby made to the Registration Statement and such exhibits and schedules
which may be obtained from the Commission at its principal office in Washington,
D.C. upon payment of the fees prescribed by the Commission.
6
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by us under the Exchange Act
with the Commission and are incorporated herein by reference:
a. Our Annual Report on Form 10-K for the year ended January 29, 2000;
b. Our Quarterly Reports on Form 10-Q for the quarters ended April 29,
2000 and July 29, 2000;
c. Our Current Reports on Form 8-K filed with the Commission on March 15,
2000; July 24, 2000; August 4, 2000 and August 17, 2000; and
d. The description of common stock contained in our Registration Statement
filed with the Commission on Form 8-A under Section 12 of the Exchange Act, on
July 14, 1989.
Each document filed by us pursuant to Sections 13(a), 13(c), 14 and 15(d)
of the Exchange Act subsequent to the date of this prospectus and prior to the
termination of the offering made hereby shall be deemed to be incorporated by
reference in this prospectus and to be part hereof from the date of filing such
documents. Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this prospectus to the extent that a statement
contained herein (or in any applicable prospectus Supplement) or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this prospectus.
Copies of all documents which are incorporated herein by reference (not
including the exhibits to such information, unless such exhibits are
specifically incorporated by reference in such information) will be provided
without charge to each person, including any beneficial owner, to whom this
prospectus is delivered upon written or oral request. Requests should be
directed to Investor Relations, Rt. 67 & Knoxville Rd., Milan, IL 61264,
telephone number: (309) 787-7700.
THE COMPANY
Eagle Food Centers, Inc. is incorporated under the laws of Delaware. Our
principal office is located at Route 67 & Knoxville Road, Milan, Illinois,
61264. Our fiscal year ends on the Saturday closest to January 31st.
We are a leading regional supermarket chain operating 64 supermarkets in
the Quad Cities area of Illinois and Iowa, northern, central and eastern
Illinois, eastern Iowa and the Chicago/Fox River Valley area under the trade
names "Eagle Country Market (R)" and "BOGO's." Our supermarkets offer a full
line of groceries, meats, fresh produce, dairy products, delicatessen and bakery
products, health and beauty aids and other general
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merchandise, and in certain stores, prescription medicine, video rental, floral
service, in-store banks, dry-cleaners and coffee shops.
Our typical store carries over 23,000 items, including food, general
merchandise and specialty department items. Eagle stores carry nationally
advertised brands and an extensive selection of top quality corporate brand
products.
Eagle Country Markets range in size from 16,500 to 67,500 square feet with
the majority of the stores ranging from 30,000 to 57,500 square feet. We usually
prefer to lease store space from local developers. As of July 29, 2000, we owned
nine stores (including one closed store) and leased 56 operating stores and
subleased two stores. We lease our central distribution facility under a lease
expiring in 2007. Our central distribution facility contains a total of 935,332
square feet of space.
As of July 29, 2000, we had approximately 4,750 associates, 300 of whom
were management and administrative associates and 4,450 of whom were hourly
associates. Of the hourly associates, substantially all are represented by 18
collective bargaining agreements with 7 separate locals associated with two
international unions.
We use various trademarks and service marks in our business. The most
important are the "Eagle Country Market(TM)", "5-Star Meats(R)", "Lady Lee(R)",
"Eagle Savers' Card(TM)" and "Harvest Day(R)" trademarks, and the "Eagle(R)" and
"Eagle Country Market(R)" service marks. Each of these trademarks is federally
registered. We have entered into a Trademark License Agreement with our former
parent, Lucky Stores, Inc.. This Trademark License Agreement gives us
royalty-free use of the "5-Star Meats(R)", "Lady Lee(R)" and "Harvest Day(R)"
trademarks until July 2005 only in the states of Illinois, Indiana, Iowa,
Michigan, Ohio, Wisconsin, Kentucky and Minnesota. Lucky Stores, Inc. has agreed
not to grant to any other person the right to use such trademarks in the states
of Illinois, Indiana and Iowa during the period of this license.
RECENT EVENTS
On April 19, 1993, Eagle issued $100 million in principal amount of Old
Notes that were due April 15, 2000. The Old Notes bore interest at the rate of 8
5/8% per annum. In early fiscal year 1999, we determined we likely would not be
able to pay the Old Notes as they became due. For this reason, we began
negotiating with our creditors, including Note Holders with some of the larger
holdings of Old Notes, to restructure our obligations. Our negotiations with our
creditors resulted in the filing of a Voluntary Petition under Chapter 11 of the
Bankruptcy Code with the United States Bankruptcy Court for the District of
Delaware. We have filed a reorganization plan with the Court. The Court
confirmed our First Amended Reorganization Plan on July 7, 2000. We reference
the reorganization plan throughout this document simply as the "Plan."
The primary purpose of the Plan was to realign our capital structure to
permit our present operations to continue and allow our future operating
prospects to materialize.
8
<PAGE>
Without consummation of the Plan, we would not be able to meet all of our
obligations, particularly our obligations under the Old Notes. The restructuring
contemplated by the Plan provided for an extension of the due date of principal
payments and a reduction in the principal amount of the Old Notes via an
aggregate cash payment to the Note Holders in the amount of $15 million. The
restructuring also provided for distribution of shares of common stock to the
holders of the Old Notes. Our Old Notes were exchanged for the $15 million cash,
the shares of common stock and the new 11% Notes due April 15, 2005 in the
aggregate principal amount of $85 million.
The Plan also allowed us to take advantage of certain favorable provisions
of the Bankruptcy Code in order to close various stores and reject our most
burdensome real property leases. Thus, the restructuring also will strengthen
Eagle's balance sheet by eliminating unprofitable stores and reducing onerous
lease obligations on a going forward basis. In conjunction with, and as an
integral part of, the Chapter 11 Case, we have streamlined our operations and
decreased our continuing operating expenses by closing 19 underperforming
stores, selling one underperforming store, and reducing the costs associated
with the leases for such stores and certain other previously closed stores. The
Plan and the offering of the Notes and common stock are more completely
described in the Disclosure Statement attached as Exhibit 99.1 to our Current
Report on Form 8-K, filed with the Commission on July 24, 2000, and incorporated
herein by this reference.
The Plan was consummated on August 7, 2000.
USE OF PROCEEDS
The securities issued under this prospectus will be exchanged with the Old
Notes. We will receive no other proceeds. We will not receive any of the
proceeds if any of the securities that are the subject of this prospectus are
subsequently sold. We have agreed to bear certain expenses of registration of
these shares and Notes under federal and state securities laws.
RISK FACTORS
Investors should carefully consider the following risk factors in
evaluating an investment in the securities described in this prospectus. This
prospectus includes "forward-looking statements" within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act. All statements in
this prospectus and statements incorporated by reference into this prospectus,
other than statements of historical fact are "forward-looking statements" for
purposes of these provisions, including any projections of earnings, revenues or
other financial items, any statements of the plans and objectives of management
for future operations, any statements concerning proposed new products or
services, any statements regarding future economic conditions or performance,
and any statement of assumptions underlying any of the foregoing. In some cases,
forward-looking statements can be identified by the use of terminology such as
"may," "will," "expects," "plans," "anticipates," "estimates," "potential," or
"continue," or the negative thereof or other comparable terminology. Our actual
results may differ materially from those projected, assumed or implied in these
forward-looking statements because of risks and uncertainties, including risks
and uncertainties described in the risk factors below and
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elsewhere in this prospectus. We assume no obligation to update any such
forward-looking statement.
Our operating results may fluctuate because of a number of factors, many
of which are beyond our control. The list of risk factors below is not complete.
You are encouraged to review our Annual Report on Form 10-K and the Disclosure
Statement attached as Exhibit 99.1 to our Current Report on Form 8-K, filed on
July 24, 2000, for further information regarding risks associated with our
business and with investment in our securities.
If our operating results are below the expectations of public market
analysts or investors, then the market price of our common stock could decline.
Some of the factors that affect our quarterly and annual results, but which are
difficult to control or predict are:
COMPETITION
The retail supermarket business is highly competitive. Eagle competes
directly with national, regional and local chains as well as independent
supermarkets, warehouse stores, membership warehouse clubs, supercenters,
limited assortment stores, discount drug stores and convenience stores. We also
compete with local food stores, specialty food stores (including bakeries, fish
markets and butcher shops), restaurants and fast food chains. The principal
competitive factors include store location, price, service, convenience, product
quality and variety. The number and type of competitors vary by location, and
Eagle's competitive position varies according to the individual markets in which
Eagle operates.
Eagle's principal competitors operate under the trade names of Cub,
Dominicks, Hy-Vee, Jewel Osco, Kmart, Kroger, Shop-N-Save, Target and Wal-Mart
(Supercenters and Sam's Clubs). We believe our principal competitive advantages
are our value perception, the attractive Eagle Country Market store format,
concentration in certain markets and expansion of service and product offerings.
Eagle is, and will continue to be, at a competitive disadvantage to some of its
competitors because it has unionized associates. In addition, supercenters
continue to open in markets served by Eagle. Not only does this format add new
grocery square footage to the market, but it offers traditional grocery products
at low prices to attract customers to the location with the intent to draw them
to the general merchandise side of the store. These new competitors operate at a
significant cost advantage to supermarkets by using mostly part-time, non-union
employees.
INHERENT UNCERTAINTY OF FINANCIAL PROJECTIONS
The Disclosure Statement attached as Exhibit 99.1 to our Current Report on
Form 8-K, filed on July 24, 2000, includes financial projections. These
financial projections cover Eagle's operations through the period ending January
2003. These projections are based on numerous assumptions that are an integral
part of the projections, including confirmation and consummation of the
Reorganization Plan in accordance with its terms, our anticipated future
performance, industry performance, general business and economic conditions,
competition, adequate financing, absence of material contingent or unliquidated
litigation or other similar
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claims, and other matters, many of which are beyond our control and some or all
of which may not materialize. In addition, unanticipated events and
circumstances occurring after the date of this prospectus may affect the actual
financial results of our operations. These variations may be material and may
adversely affect our ability to meet our obligations. Because the actual results
achieved throughout the periods covered by the projections may vary from the
projected results, the projections should not be relied upon as a guaranty,
representation, or other assurance of the actual results that will occur.
Neither the Company's independent auditors, nor any other independent
accountants, have compiled, examined, or performed any procedures with respect
to the prospective financial statements contained in the Disclosure Statement
attached as Exhibit 99.1 to our Current Report on Form 8-K, filed on July 24,
2000, nor have they expressed any opinion or any other form of assurance on such
information or its achievability, and assume no responsibility for and disclaim
any association with, the prospective financial statements.
RISKS ASSOCIATED WITH NEW SENIOR SECURED FACILITY
Eagle's operations are dependent on the availability and cost of working
capital financing and may be adversely affected by any shortage or increased
cost of such financing. Effective August 7, 2000, Eagle entered into an Amended
and Restated Loan and Security Agreement with Congress Financial Corporation to
provide credit up to $40 million (the "New Senior Secured Facility"). The New
Senior Secured Facility is described more fully in the Disclosure Statement
attached as Exhibit 99.1 to our Current Report on Form 8-K, filed on July 24,
2000, and is attached as Exhibit 10.2 to our Current Report on Form 8-K, filed
on August 17, 2000. That financing is secured by a first priority lien on
Eagle's inventory, subject only to a contractual subordination to SuperValu in
such inventory. We anticipate that this financing will be used to (a) fund the
Plan and (b) provide working capital. This financing will mature on August 2002
and it contains substantially the same terms and conditions as prior financing
with Congress Financial Corporation.
We believe that substantially all of Eagle's needs for funds necessary to
consummate the Plan and for working capital financing after consummation of the
Plan will be met by projected operating cash flow and the New Senior Secured
Facility. It is possible, however, that we will not be able to meet all of the
conditions and covenants in the new financing. If Eagle requires working capital
greater than that provided by this new financing, it may be required either to
(a) seek to increase the availability under the New Senior Secured Facility, (b)
obtain other sources of financing or (c) curtail operations. Some of the factors
which may affect the amount of financing required to consummate the Plan
include, without limitation, a delay in consummating the Plan and Eagle's
ability to reject leases and limit claims against the estate. We believe that
the recapitalization to be accomplished through the Plan will facilitate Eagle's
ability to obtain additional or replacement working capital financing. No
assurance can be given, however, that any additional replacement financing will
be available on terms that are favorable or acceptable to Eagle. Moreover, there
can be no assurance that Eagle will be able to obtain an acceptable financing
upon expiration of the New Senior Secured Facility.
11
<PAGE>
PAYMENT OF NEW SENIOR NOTES
Eagle does not expect to generate sufficient cash from operations to
enable Eagle to satisfy the Notes at maturity. Payment on the Notes at maturity
likely will be dependent upon our ability to refinance the indebtedness under
the Notes or to raise additional equity capital.
12
<PAGE>
UNIMPAIRED CLAIMS
Claims against Eagle that are impaired are the claims set forth in Classes
4, 5 and 6 of the Plan. All other claims against Eagle have been left unimpaired
under the Plan. The unimpaired claims include, but are not limited to, certain
claims of employees for severance/retirement obligations, contingent liabilities
relating to indemnification, certain indemnification claims of current and
former directors and officers assumed pursuant to the Plan, certain litigation
claims, certain claims arising out of services rendered and goods sold and
certain other contingent and unliquidated obligations. To the extent such claims
are required to be reflected on financial statements, we believe our financial
statements and projected financial statements properly reflect these claims in
accordance with generally accepted accounting principles. However, the actual
amount of such claims may materially differ from those in the financial
statements and projections. Many unimpaired claims are of an off-balance-sheet
nature and our liability for such claims cannot be and has not been estimated.
Unimpaired claims may exist that are unknown to us. We have taken no action in
the Chapter 11 Case to estimate, disallow, liquidate or otherwise cap or
quantify any unimpaired claims except with respect to those claims arising in
connection with the rejection of certain nonresidential real property leases.
Our liability for unimpaired claims after our emergence from Chapter 11 will not
have been reduced or otherwise affected by the Chapter 11 Case or the Plan.
There can be no assurance that our financial position and results of operations
after emergence from Chapter 11 pursuant to the Plan won't be materially and
adversely affected by unimpaired claims.
DIVIDENDS
We do not anticipate that any dividends will be paid with respect to the
common stock in the near term. Our ability to declare and pay dividends is
restricted by the terms of the indenture relating to the Notes and by the New
Senior Secured Facility.
CERTAIN INDEMNIFICATION RISKS
As set forth in Article IV.H of the Disclosure Statement, "Lucky Notice of
Indemnification" and in Article V.B.2(c) of the Disclosure Statement, Lucky had
unliquidated indemnification claims against Eagle as a result of Eagle's
rejection of certain nonresidential real property leases. We have reached an
agreement with Lucky by which we will be responsible for a portion of any such
indemnification claims for which Lucky may become liable.
CERTAIN TAX CONSIDERATIONS
THERE ARE A NUMBER OF MATERIAL INCOME TAX CONSIDERATIONS, RISKS AND
UNCERTAINTIES ASSOCIATED WITH CONSUMMATION OF THE PLAN. INTERESTED PARTIES
SHOULD READ CAREFULLY THE DISCUSSION
13
<PAGE>
SET FORTH IN THE SECTION OF THE DISCLOSURE STATEMENT (ATTACHED AS EXHIBIT 99.1
TO OUR 8-K OF JULY 24, 2000), ENTITLED "CERTAIN FEDERAL INCOME TAX CONSEQUENCES
OF THE PLAN" FOR A DISCUSSION OF THE MATERIAL FEDERAL INCOME TAX CONSEQUENCES
AND RISKS FOR HOLDERS OF CLAIMS AND INTERESTS RESULTING FROM THE TRANSACTIONS
OCCURRING IN CONNECTION WITH THE PLAN.
OUR STOCK PRICE IS VOLATILE
The market price of our common stock has fluctuated significantly to date.
Trading was halted February 29, 2000 with the filing of our Petition under
Chapter 11 of the Bankruptcy Code. Trading resumed August 10, 2000. In the
future, the market price of our common stock and the Notes could be subject to
significant fluctuations due to general market conditions and in response to
quarter-to-quarter variations in our anticipated or actual operating results;
conditions in the retail food market; the commencement of litigation; changes in
estimates of our performance by securities analysts; and announcements of merger
or acquisition transactions.
In addition, the stock market in recent years has experienced extreme
price and volume fluctuations that have affected the market prices of many high
technology companies, particularly semiconductor companies, and that have often
been unrelated or disproportionate to the operating performance of companies.
These fluctuations, as well as general economic and market conditions, may harm
the market price of our securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for the
periods indicated:
<TABLE>
<CAPTION>
Fiscal Quarter Ended Fiscal Year Ended
---------------------- --------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
4/29/2000 5/1/1999 1/29/2000 1/30/1999 1/31/1998 2/1/1997 2/3/1996
Ratio of
earnings/(loss)
to fixed (3.7122) 0.5140 0.5417 0.6710 1.3763 1.2445 (0.1826)
charges
</TABLE>
For purposes of calculating the ratios, fixed charges consist of interest
on debt, accretion of discount on debt and the interest portion of rental
expense on capital leases. The ratio of earnings to fixed charges has been
calculated as follows: [(income before nonrecurring charges and income taxes) +
(fixed charges) - (capitalized interest)] / (fixed charges). See Exhibit 12.1
attached to this prospectus and incorporated by reference.
SELLING SECURITY HOLDERS
The following table provides information with respect to the common stock
and the principal amounts of Notes held by each Note Holder as of July 14, 2000,
the record date for the exchange of the Old Notes with the Notes. The table is
based on information provided by or on
14
<PAGE>
behalf of the Note Holders. The Note Holders may from time to time offer and
sell any or all of the common stock and/or the Notes under this prospectus. The
term "Note Holders," for purpose of this section, includes their transferees,
pledgees or donees or their successors.
<TABLE>
<CAPTION>
Common Stock Beneficially Notes Beneficially Owned
Owned and Offered and Offered
-----------------------------------------------------------
Number Principal
Name of Shares(1) Percentage(2) Amount Percentage(3)
---------------------------------------------------- ------------ ------------- ---------- -------------
<S> <C> <C> <C>
Advanced Clearing, Inc. 905 * 39,950 *
Advest, Inc. 482 * 21,250 *
American Enterprise Investment Services Inc. 38 * 1,700 *
Associated Bank Green Bay, National Association 386 * 17,000 *
Bank of New York (The) 233,713 1.8% 10,290,950 12.1%
Bankers Trust Company 1,447 * 63,750 *
Bear, Stearns Securities Corp. 39,708 * 1,747,450 2.1%
BNP Paribas, New York Branch 752 * 33,150 *
BNY Clearing Services LLC 528,298 4.1% 23,261,950 27.4%
The Bank of New York/Duncan Williams Inc. 386 * 17,000 *
Boston Safe Deposit and Trust Company 4,246 * 187,000 *
Bradford (J.C.) & Co. 772 * 34,000 *
Brown Brothers Harriman & Co. 1,930 * 85,000 *
Brown & Company Securities Corporation 482 * 21,250 *
BT Alex. Brown Incorporated 6,312 * 277,950 *
Butler, Wick & Co., Inc. 1,351 * 59,500 *
Chase Bank of Texas, N.A. 179,529 1.4% 7,905,000 9.3%
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Common Stock Beneficially Notes Beneficially Owned
Owned and Offered and Offered
------------------------------------------------------------
Number Principal
Name of Shares(1) Percentage(2) Amount Percentage(3)
---------------------------------------------------- ------------ ------------- ---------- -------------
<S> <C> <C> <C>
Chase Manhattan Bank 161,672 1.3% 7,118,750 8.4%
Chase Manhattan Bank, Trust 965 * 42,500 *
Charles Schwab & Co., Inc. 37,836 * 1,666,000 2.0%
CIBC World Markets Corp. 5,945 * 261,800 *
Citibank/Private Banking Division 5,598 * 246,500 *
Crowell, Weedon & Co. 193 * 8,500 *
Dain Rauscher Incorporated 10,733 * 472,600 *
Davidson (D.A.) & Co., Inc. 3,320 * 146,200 *
Donaldson, Lufkin and Jenrette Securities Corporation 36,755 * 1,618,400 1.9%
E*Trade Securities, Inc. 5,791 * 255,000 *
A.G. Edwards & Sons, Inc. 10,057 * 442,850 *
Fahnestock & Co., Inc. 675 * 29,750 *
Fiduciary Trust Company International 193 * 8,500 *
Firstar Bank, N.A. 154 * 6,800 *
Firstar Bank Missouri, National Association 386 * 17,000 *
Fiserv Securities, Inc. 868 * 38,250 *
First Clearing Corporation 3,860 * 170,000 *
First Union National Bank 579 * 25,500 *
Fiserv Correspondent Services, Inc. 482 * 21,250 *
Goldman, Sachs & Co. 23,165 * 1,020,000 1.2%
J.J.B. Hilliard, W.L. Lyons, Inc. 193 * 8,500 *
Howe Barnes Investments, Inc. 96 * 4,250 *
IAA Trust Company 193 * 8,500 *
Ing Barings LLC 12,567 * 553,350 *
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Common Stock Beneficially Notes Beneficially Owned
Owned and Offered and Offered
----------------------------------------------------------
Number Principal
Name of Shares(1) Percentage(2) Amount Percentage(3)
---------------------------------------------------- ------------ ------------- ---------- -------------
<S> <C> <C> <C>
Janney Montgomery Scott Inc. 482 * 21,250 *
Edward D. Jones & Co. 3,513 * 154,700 *
Keybank National Association 675 * 29,750 *
LaSalle National Bank 3,860 * 170,000 *
Legg Mason Wood Walker, Inc. 4,806 * 211,650 *
Lehman Brothers, Inc. 1,158 * 51,000 *
Lewco Securities Corp. 1,216 * 53,550 *
Linsco/Private Ledger Corp. 7,779 * 342,550 *
McDonald Investments Inc. 7,914 * 348,500 *
Mercantile-Safe Deposit & Trust Company 15,925 * 701,250 *
Mesirow Financial, Inc. 96 * 4,250 *
Miller, Johnson & Kuehn, Inc. 2,567 * 113,050 *
Merrill Lynch, Pierce Fenner & Smith Safekeeping 75,962 * 3,344,750 3.9%
Morgan, Keegan & Company, Inc. 3,609 * 158,950 *
Morgan Stanley & Co. Incorporated 4,826 * 212,500 *
Murphy & Durieu 714 * 31,450 *
National Financial Services Corporation 8,107 * 357,000 *
National Investor Services Corp. 3,802 * 167,450 *
Norwest Investment Services, Inc. 868 * 38,250 *
Northern Trust Company (The) 22,991 * 1,012,350 1.2%
Olde Discount Corporation 810 * 35,700 *
Paine Weber Incorporated 11,042 * 486,200 *
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
Common Stock Beneficially Notes Beneficially Owned
Owned and Offered and Offered
----------------------------------------------------------
Number Principal
Name of Shares(1) Percentage(2) Amount Percentage(3)
---------------------------------------------------- ------------ ------------- ---------- -------------
<S> <C> <C> <C>
Prudential Securities Incorporated 19,883 * 875,500 1.0%
Baird (Robert W.) & Co. Incorporated 675 * 29,750 *
Ragen Mackenzie Incorporated 1,351 * 59,500 *
Raymond, James & Associates, Inc. 4,324 * 190,400 *
Smith, Moore & Co. 965 * 42,500 *
Salomon Smith Barney Inc. 266,533 2.1% 11,735,950 13.8%
Scottrade, Inc. 193 * 8,500 *
Southwest Securities, Inc. 37,546 * 1,653,250 1.9%
Stifel, Nicolaus & Company Incorporated 46,812 * 2,061,250 2.4%
Swiss American Securities Inc. 1,930 * 85,000 *
U.S. Bancorp Piper Jaffray Inc. 772 * 34,000 *
Fleet Securities, Inc. 5,617 * 247,350 *
Wayne Hummer Investments L.L.C. 772 * 34,000 *
Wachovia Securities, Inc. 289 * 12,750 *
Wedbush Morgan Securities, Inc. 2,026 * 89,250 *
Dean Witter Reynolds, Inc. 9,323 * 410,550 *
</TABLE>
* less than 1%
(1) one-third of these shares have been distributed to the Note Holders
directly and two-thirds of the shares have been distributed to the trustee
to be held in trust for the benefit of the Note Holders in accordance with
the terms of the indenture for the Notes between Eagle and U.S. Bank Trust
N.A., as trustee, and an Escrow Agreement, dated as of August 7, 2000
among Eagle, U.S. Bank Trust N.A., as trustee under the indenture, and
U.S. Trust N.A. as escrow agent.
(2) Based on 12,869,468 shares of Eagle common stock outstanding.
(3) Based on $85,000,000 principal amount of Notes outstanding.
18
<PAGE>
The common stock and Notes described in this prospectus have been issued
to the Note Holders under our Plan in connection with our emergence from Chapter
11 bankruptcy proceedings.
19
<PAGE>
PLAN OF DISTRIBUTION
Under Section 1145(a) of the Bankruptcy Code, the issuance of the Notes
and common stock being distributed under the Plan in exchange for the Old Notes
and the subsequent resale of such securities by entities that are not
"underwriters" (as defined in Section 1145(b) of the Bankruptcy Code) are not
subject to the registration requirements of Section 5 of the Securities Act of
1933. Because of the complex, subjective nature of the question of whether a
particular Note Holder may be an underwriter, we have made no representation
concerning the ability of any person to dispose of the Notes or the common stock
in reliance upon this exemption.
This prospectus is part of a registration statement on Form S-3 that is
being filed at the request of some of the Note Holders. This prospectus covers
the shares of common stock and the Notes issued and being issued under the Plan
and the possible subsequent sale by the Note Holders. Registration of the shares
of common stock and the Notes does not necessarily mean that any of such
securities will be offered and sold by the holders thereof.
We will not receive any proceeds from any offering by selling Note
Holders. The shares of common stock and Notes may be sold from time to time to
purchasers directly by any of the selling Note Holders, or donees, pledgees,
transferees or other successors in interest thereof. Alternatively, the selling
Note Holders, or transferees thereof, may from time to time offer the shares
through dealers or agents, who may receive compensation in the form of
commissions from the selling Note Holders, or transferees thereof, and/or the
purchasers of shares or Notes for whom they may act as agent. The selling Note
Holders, or transferees thereof, and any dealers or agents that participate in
the distribution of such securities may be deemed to be "underwriters" within
the meaning of the Securities Act and any profit on any such sale and any
commissions received by any such dealers or agents might be deemed to be
underwriting commissions under the Securities Act.
The shares and Notes may be sold by the Note Holders from time to time at
varying prices determined at the time of sale or at negotiated prices. In order
to comply with the securities laws of certain states, if applicable, such
securities may be sold only through registered or licensed brokers or dealers.
In addition, in certain states, the securities may not be sold unless they have
been registered or qualified for sale in such state or an exemption from such
registration or qualification requirement is available and is complied with.
The shares and Notes may also be sold in one or more of the following
transactions: (a) block transactions in which a broker-dealer may sell all or a
portion of such stock as agent but may position and resell all or a portion of
the block as principal to facilitate the transaction; (b) purchases by any such
broker-dealer as principal and resale by such broker-dealer for its own account
pursuant to a prospectus supplement; (c) ordinary brokerage transactions and
transactions in which any such broker-dealer solicits purchasers; (d) sales "at
the market" to or through a market maker or into an existing trading market, on
an exchange or otherwise, for such securities; and (e) sales in other ways not
involving market makers or established trading markets, including direct sales
to purchasers. In effecting sales, broker-dealers engaged by the selling Note
Holders may arrange for other broker-dealers to participate.
20
<PAGE>
DESCRIPTION OF THE OFFERING
We have distributed to U.S. Bank N.A., as indenture trustee for the Notes,
for the benefit of the Note Holders, (i) the Notes, (ii) $15,000,000 in cash,
and (iii) 15% of our fully-diluted common stock. Upon exchange of the Old Notes,
the trustee is obligated to distribute to each Note Holder his or her pro rata
share of the Notes, pro rata share of cash and one-third of his or her pro rata
share of the common stock then held by the trustee. The trustee will retain the
remaining two-thirds of the common stock for future distribution to the Note
Holders or return to us. If Eagle is sold to a third party or the Notes are
retired prior to October 15, 2001, the trustee will return to us the remaining
two-thirds of the common stock. If Eagle is sold to a third party or the Notes
are retired after October 14, 2001, but prior to October 15, 2002, the trustee
will return to us one-third of the common stock. If Eagle is not sold to a third
party or the Notes are not retired prior to October 15, 2002, no common stock
will be returned to us. Any common stock still held by the trustee after all of
the above distributions then will be distributed to the Note Holders.
DESCRIPTION OF THE SECURITIES TO BE REGISTERED
DESCRIPTION OF THE COMMON STOCK
Approximately 1,930,420 shares of our par value one cent ($0.01) common
stock have been issued pursuant to the Plan. As of the date of this prospectus
we have outstanding 12,869,468 shares of our common stock, including those
issued under the Plan. The description of our common stock contained our
Registration Statement filed with the Commission on Form 8-A under Section 12 of
the Exchange Act, on July 14, 1989, is incorporated in this prospectus by
reference.
DESCRIPTION OF THE NOTES
The Notes are issued under an indenture dated as of August 7, 2000 between
Eagle and U.S. Bank Trust N. A., as trustee. The indenture is subject to and
governed by the Trust Indenture Act of 1939, as amended. The statements under
this caption relating to the Notes and the indenture are summaries and do not
purport to be complete, and where reference is made to particular provisions of
the indenture, such provisions, including the definition of certain terms, are
incorporated by reference as a part of such summaries or terms, which are
qualified in their entirety by such reference. Unless otherwise indicated,
references under this caption to sections, "Section" or articles are references
to the indenture which has been filed with the Commission as Exhibit 4.1 to our
Current Report on Form 8-K filed with the Commission on August 17, 2000.
GENERAL
The Notes are unsecured obligations of Eagle in the aggregate principal
amount of $85,000,000 and will mature on April 15, 2005. The Notes bear interest
at 11% per annum from August 7, 2000, or from the most recent interest payment
date to which interest has been paid. Interest is payable semi-annually on April
15 and October 15 of each year, commencing October
21
<PAGE>
15, 2000, to the person in whose name the Note (or any predecessor Note) is
registered at the close of business on the preceding April 1 or October 1, as
the case may be. Interest on the Notes will be computed on the basis of a
360-day year of twelve 30-day months. (Sections 301, 307 and 310) At our option,
principal of and premium, if any, and interest on the Notes will be payable at
the corporate trust office of the trustee or by check mailed to the address of
the person entitled thereto as it appears in the note register. (Sections 301,
305 and 1002) In the Exchange, the trustee has received the shares of common
stock and has made available to each Note Holder his or her PRO RATA share of
the cash and one-third of his or her PRO RATA share of the common stock held by
the trustee. The trustee will retain the remaining two-thirds of the common
stock for future distribution to the Note Holders or return to us. If Eagle is
sold to a third party or the Notes are retired prior to October 15, 2001, the
trustee will return to us two-thirds of the common stock. If Eagle is sold to a
third party or the Notes are retired on or after October 15, 2001, but prior to
October 15, 2002, the trustee will return to us one-third of the common stock.
If Eagle is not sold to a third party or the Notes are not retired prior to
October 15, 2002, no common stock will be returned to us. Any common stock still
held by the trustee on the date will be distributed to the Note Holders.
(Section 301)
The Notes are issued only in fully registered form, without coupons, in
denominations of $1.00 and integral multiples thereof. (Section 302) No service
charge will be made for any registration of transfer or exchange of Notes, but
we may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.(Section 305)
Initially, the trustee will act as paying agent and registrar. The
Notes may be presented for registration of transfer and exchange at the
offices of the registrar. (Section 305)
REDEMPTION
The Notes are subject to redemption, at our option, in whole or in part,
prior to maturity, upon not less than 30 nor more than 60 days' notice mailed to
each Note Holder to be redeemed at his or her address appearing in the note
register, in amounts of $1.00 or an integral multiple of $1.00, at 100% of the
principal amount thereof plus accrued interest to but excluding the redemption
date (subject to the right of holders of record on the relevant record date to
receive interest due prior to the date of redemption).
If less than all the Notes are to be redeemed, the trustee will select, in
such manner as it deems fair and appropriate, the particular Notes to be
redeemed or any portion thereof that is an integral multiple of $1.00.
(Sections 203, 1101, 1104, 1105 and 1107)
The Notes do not have the benefit of any sinking fund obligations.
The occurrence of certain transactions described under the "Change of
Control" and "Mergers, Consolidations and Certain Sales and Purchases of Assets"
covenants in the indenture can result in our making an Offer to Purchase the
Notes. No such transaction will be considered to be a violation of any covenant
of the indenture, without regard to whether Note Holders have accepted any such
Offer to Purchase their Notes. See the descriptions of "Change of Control" and
"Mergers, Consolidations and Certain Sales and Purchases of Assets" below.
22
<PAGE>
COVENANTS
The indenture contains, among others, the following covenants:
LIMITATION ON COMPANY DEBT
We may not incur any Debt unless, immediately after giving effect to the
incurrence of such Debt, our Consolidated Cash Flow Ratio for the preceding four
full fiscal quarters would be greater than 2 to 1. "Consolidated Cash Flow
Ratio" means generally the ratio of (i) Consolidated Net Income of Eagle and
our subsidiaries, plus Consolidated Interest Expense, Consolidated Income Tax
Expense and consolidated depreciation and amortization expense, as adjusted
for other non-cash charges, to (ii) Consolidated Interest Expense of Eagle
and our subsidiaries, plus certain adjustments to reflect certain items of
interest expense, all as adjusted in certain events and as more fully
described under "Certain Definitions" below.
Notwithstanding the foregoing limitation, Eagle may incur the following:
(i) Debt under the New Senior Secured Facility incurred solely to fund our
working capital requirements and for general corporate purposes in an aggregate
principal amount not to exceed $50 million at any one time outstanding;
(ii) Debt we owe to any of our wholly owned subsidiaries (but only so long
as such Debt is held by a wholly owned subsidiary) or Debt owed by a subsidiary
to us or to one of our wholly owned subsidiaries (PROVIDED that such Debt is at
all times held by us or one of our wholly owned subsidiaries);
(iii) Capital Lease Obligations outstanding on August 7, 2000;
(iv) Capital Lease Obligations relating to property used in our business
acquired after the date hereof; and
(v) renewals, refundings, refinancings or extensions of Debt referred to
in the immediately preceding paragraph and in the foregoing clauses (ii), (iii)
and (iv) above or of the Notes, in any case in an amount not to exceed the
principal amount (or, if such Debt provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration of the maturity thereof, in an amount not greater than such lesser
amount) of the Debt or Notes so renewed, refunded, refinanced or extended,
PROVIDED that,
(a) in the case of any renewal, refunding, refinancing or extension
of Debt PARI PASSU to the Notes, such renewal, refunding, refinancing or
extended Debt is made PARI PASSU or subordinated to the Notes and, in the
case of any renewal, refunding, refinancing or extension of Debt
subordinated to the Notes, such renewal, refunding, refinancing or
extended Debt is made subordinate to the Notes to substantially the same
extent as the Debt being renewed, refunded, refinanced or extended and
23
<PAGE>
(b) in any such case, such renewal, refunding, refinancing or
extended Debt does not require the payment of all or a portion of the
principal thereof (whether pursuant to repurchase, redemption, repayment,
defeasance, retirement, sinking fund payment, payment at stated maturity
or otherwise) prior to the final stated maturity of the Debt being
refunded or refinanced. (Section 1008)
LIMITATION ON DEBT AND PREFERRED STOCK OF SUBSIDIARIES.
We may not permit any of our subsidiaries to incur or suffer to exist any
Debt or issue any preferred stock, except (i) Debt owed by a subsidiary to us or
a wholly owned subsidiary (provided that such Debt is at all times held by us or
a wholly owned subsidiary) or (ii) Debt which becomes an obligation of a
subsidiary in accordance with the provisions of the indenture described under
"Mergers, Consolidations and Certain Sales and Purchases of Assets" below.
(Section 1009) The indenture contains no limitations on the amount of Debt that
a Joint Venture Subsidiary may incur or suffer to exist. The term "Joint Venture
Subsidiary" is described below under "Certain Definitions."
LIMITATION ON RESTRICTED PAYMENTS
We may not make a Restricted Payment (as defined below) if:
(i) an event of default, or an event that with the lapse of time or the
giving of notice, or both, would constitute an event of default, shall have
occurred and is continuing,
(ii) upon giving effect to such Restricted Payment, we could not incur at
least $1.00 of additional Debt pursuant to the terms of the indenture described
in the first paragraph of "Limitation on Company Debt" above, or
(iii) upon giving effect to such Restricted Payment, the aggregate of all
Restricted Payments (net of any repayment of a Restricted Payment under clause
(i)(c) of the definition of Restricted Payment set forth below) made subsequent
to the date hereof by us and our subsidiaries and Joint Venture Subsidiaries
would EXCEED THE SUM OF:
(a) 50% (or minus 100% in the event of a deficit) of our cumulative
Consolidated Net Income for the period commencing August 1, 2000 and
ending on the last day of the last full fiscal quarter ending immediately
preceding the date of such Restricted Payment; plus
(b) 100% of the aggregate net proceeds, including the fair value of
property other than cash (determined in good faith by the Board of
Directors as evidenced by a resolution of the Board of Directors filed
with the trustee), from the issuance after the date hereof of our capital
stock (other than Disqualified Stock or capital stock issued as described
in clause (c) below) (and, in the event Eagle merges or consolidates with
another corporation in a transaction in which the outstanding common stock
prior to the transaction is cancelled, the Consolidated Tangible Net Worth
of such other corporation), other than to a subsidiary or a Joint Venture
Subsidiary, or options, warrants or other
24
<PAGE>
rights on our capital stock (other than Disqualified Stock); plus
(c) the principal amount of Debt that has been converted into our
capital stock (other than Disqualified Stock) after the date hereof (or,
if such Debt provides for an amount less than the principal amount thereof
to be due and payable upon a declaration of acceleration of the maturity
thereof, in an amount not greater than such lesser amount).
DEFINITION OF RESTRICTED PAYMENT
(i) Each of the actions described in clauses (i)(a)-(d) below is
considered a "Restricted Payment." If any of the conditions described above
exist, and unless one or more of the exceptions described in clauses (ii)(a)-(d)
below is applicable, we:
(a) may not directly or indirectly, declare or pay any dividend, or
any distribution, in respect of our capital stock or to the holders
thereof.
(b) may not, and may not permit any subsidiary or Joint Venture
Subsidiary to, purchase, redeem or otherwise acquire or retire for value,
(1) any of our capital stock or any securities convertible or exchangeable
into shares of our capital stock or (2) any options, warrants or rights to
purchase or acquire shares of our capital stock or any securities
convertible or exchangeable into shares of our capital stock,
(c) may not make, or permit any subsidiary, to make any investment
(which shall not include any payment of a fee by a Joint Venture
Subsidiary to an affiliate for BONA FIDE management or services rendered
by such affiliate) in, or payment on a guarantee of any obligation of, any
affiliate or Joint Venture Subsidiary, other than Eagle or a wholly owned
subsidiary (which is not a Joint Venture Subsidiary) which is a wholly
owned subsidiary prior to such Investment, and
(d) may not, and may not permit any subsidiary or Joint Venture
Subsidiary to, redeem, defease, repurchase, retire or otherwise acquire or
retire for value prior to any scheduled maturity, repayment or sinking
fund payment of our Debt which is subordinate in any respect in right of
payment to the Notes.
(ii) Notwithstanding the foregoing limitations, the following
transactions, in an aggregate amount not to exceed $20 million, shall not
constitute "Restricted Payments" for purposes of the indenture or the Notes and
shall not be subject to any other limitation under the indenture or the Notes:
(a) any direct or indirect declaration or payment of any dividend,
or any distribution, in respect of our capital stock or to the holders
thereof,
(b) any purchase, redemption or other acquisition or retirement for
value of (x) any of our capital stock or any securities convertible or
exchangeable into shares of our capital stock, or (y) any options,
warrants or rights to purchase or acquire shares of our capital stock,
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(c) any investment in, or payment on a guarantee of any
obligation of, any Affiliate or Joint Venture Subsidiary, or
(d) any redemption, defeasance, repurchase, retirement or other
acquisition or retirement for value prior to any scheduled maturity,
repayment or sinking fund payment, of our Debt which is subordinate in any
respect in right of payment to the Notes, by us, any subsidiary or any
Joint Venture Subsidiary;
(iii) In the event and to the extent a transaction is permitted under the
paragraph above regarding "Limitation on Debt and Preferred Stock of
Subsidiaries," the amount of such transaction shall not reduce the amount
available for transactions under subsections (ii)(a)-(d) above.
(iv) The foregoing limitations do not prevent us from (a) paying a
dividend on our capital stock within 60 days after the declaration thereof if,
on the date when the dividend was declared, we could have paid such dividend in
accordance with the provisions of the indenture or (b) refunding or refinancing
any Debt otherwise permitted pursuant to the terms of the indenture described in
clause (v) of the second paragraph of "Limitation on Company Debt" above. Any
payment made pursuant to clause (a) or (b) of paragraph (ii) above shall be a
Restricted Payment for purposes of calculating aggregate Restricted Payments.
(Section 1010)
LIMITATIONS CONCERNING DISTRIBUTIONS BY SUBSIDIARIES
We may not, and may not permit any subsidiary to, allow any consensual
encumbrance or restriction on the ability of any subsidiary:
(i) to pay directly or indirectly dividends or make any other
distributions in respect of its capital stock or pay any Debt or other
obligation owed to us or to any other subsidiary;
(ii) to make loans or advances to us or any subsidiary; or
(iii) to transfer any of its property or assets to us other than, with
certain exceptions, encumbrances or restrictions:
(a) pursuant to any agreement in effect on August 7, 2000,
(b) pursuant to an agreement relating to any Debt incurred by such
subsidiary prior to the date on which such subsidiary was acquired by
Eagle and outstanding on such date and not incurred in anticipation of
becoming a subsidiary,
(c) pursuant to customary provisions contained in any lease
governing a leasehold interest of any subsidiary that do no more than
restrict the subletting of the property subject to such lease or the
assignment of such lease or
(d) pursuant to an agreement effecting a renewal, refunding,
refinancing or extension of Debt incurred pursuant to an agreement
referred to in clause (a) or (b)
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above; PROVIDED, HOWEVER, that the provisions contained in such renewal,
refunding, refinancing or extension agreement relating to such encumbrance
or restriction are no more restrictive in any material respect than the
provisions contained in the original agreement. (Section 1011)
LIMITATION ON LIENS
We may not, and may not permit any subsidiary to, incur or permit to exist
any lien upon any of our property or assets or any property or assets of any
subsidiary without making, or causing such subsidiary to make, effective
provision for securing the Notes. The Notes shall be secured equally and ratably
with the Debt underlying the lien or, in the event such Debt is subordinate to
the Notes, prior to such Debt, for so long as such Debt shall be so secured. The
foregoing restrictions shall not apply to liens in respect of Debt existing on
August 7, 2000 or to:
(i) liens securing only the Notes;
(ii) liens on property existing immediately prior to the time of the
acquisition thereof (and not incurred in anticipation of such acquisition);
(iii) liens on property of a person existing at the time such person is
merged into or consolidated with us or any of our subsidiaries (and not incurred
in anticipation of such merger or consolidation);
(iv) liens to secure Debt incurred for the purpose of financing all or any
part of the purchase price or the cost of construction or improvement of
property used in our business and subject to such liens, PROVIDED, HOWEVER,
that:
(a) the principal amount of any Debt secured by such a lien does not
exceed 100% of such purchase price or cost,
(b) such lien does not extend to or cover any property other than
such property and any such improvements and
(c) the incurrence of such Debt is permitted by the "Limitation on
Company Debt" and "Limitation on Debt and Preferred Stock of Subsidiaries"
covenants described above;
(v) liens to secure Debt incurred for the purpose of financing all or any
part of the purchase price of property used in our business and subject to such
liens, PROVIDED, HOWEVER, that:
(a) the principal amount of any Debt secured by such a lien does not
exceed 100% of such purchase price or cost and
(b) such lien does not extend to or cover any property other than
such property and any such improvements;
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(vi) liens for taxes or assessments or other governmental charges or
levies which are being contested in good faith and for which required reserves,
if any, shall have been made;
(vii) liens to secure obligations under workmen's compensation laws or
similar legislation, including liens with respect to judgments which are not
currently dischargeable;
(viii) liens incurred to secure performance bonds or other obligations of
a like nature incurred in the ordinary course of business;
(ix) materialmen's, mechanics', workmen's, repairmen's, warehousemen's,
landlords', vendors' or carriers' liens created by law incurred by us or any
subsidiary in good faith in the ordinary course of business, or deposits or
pledges arising and continuing in the ordinary course of business to obtain the
release of any such liens;
(x) any lien created in connection with a Capital Lease Obligation that we
are permitted to enter into pursuant to the terms of the indenture described in
clause (iv) of the second paragraph under "Limitation on Company Debt" above;
(xi) liens on our inventory to secure amounts used for working capital and
general corporate purposes borrowed under, reimbursement obligations in respect
of letters of credit issued pursuant to, and all other amounts owing under, the
New Senior Secured Facility;
(xii) any lien on property or assets to secure Debt incurred in connection
with the acquisition by us or any subsidiary of such property or assets, as
permitted by the indenture as described in clause (iv)(b)(5) under "Mergers,
Consolidations and Certain Sales and Purchases of Assets" below;
(xiii) liens to secure any extension, renewal or refinancing (or
successive extensions, renewals or refinancings), in whole or in part, of any
Debt secured by liens referred to in the foregoing clauses (i) to (xii) so long
as such liens do not extend to any other property and the principal amount (or,
if such Debt provides for an amount less than the principal amount thereof to be
due and payable upon a declaration of acceleration of the maturity thereof, in
an amount not greater than such lesser amount) of the Debt so secured is not
increased;
(xiv) zoning restrictions, easements, covenants, reservations and
restrictions on the use of real property, or minor irregularities of title in
real property, that do not in the aggregate materially detract from the value or
marketability of our property or of any subsidiary or impair the use of such
property in the operation of the business; and
(xv) any lien securing Debt owing by us to one or more wholly owned
subsidiaries, but only so long as such Debt is held by such subsidiaries, and
any lien securing Debt owing by one or more wholly owned subsidiaries to us, but
only so long as such Debt is held by us.
In addition to the foregoing, we and our subsidiaries may incur a lien to
secure any Debt, without securing the Notes equally and ratably with or prior to
such Debt, if at the time of such
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incurrence the amount of Debt subject to liens arising after the date hereof and
otherwise prohibited by the indenture does not exceed 10% of Consolidated
Tangible Assets. (Section 1012) See "Certain Definitions" below.
LIMITATION ON CERTAIN ASSET DISPOSITIONS
We may not, and may not permit any subsidiary to sell or transfer any
assets, (other than in an Asset Disposition permitted under the "Limitation on
Sale and Leaseback Transactions" covenant described below) in one or more
transactions by us or a subsidiary in any fiscal year that results in aggregate
Net Available Proceeds in excess of $2 million unless:
(i) We (or the subsidiary, as the case may be) receive consideration at
the time of such disposition at least equal to the fair market value of the
shares or assets disposed of as determined by the Board of Directors in good
faith and evidenced by a resolution of the Board of Directors filed with the
trustee and
(ii) either:
(a) the Asset Disposition is a Store Swap or
(b) both of the following apply:
(x) at least 75% of the consideration for such disposition
consists of cash or readily marketable cash equivalents or the
assumption of our Debt or other obligations relating to such assets
and release from all liability on the Debt or other obligations
assumed and
(y) all Net Available Proceeds from such disposition and from
the sale of any marketable securities received therein, less any
amounts applied within 12 months of such disposition to the
repayment of Debt which is PARI PASSU to the Notes or to investment
in assets related to our business, are applied within 12 months of
such disposition to purchase outstanding Notes pursuant to an order
to Purchase at a purchase price equal to 100% of their principal
amount plus accrued interest to the date of purchase; provided,
however, that if the amount of Net Available Proceeds available to
purchase Notes is less than $5 million, our obligation to make an
Offer to Purchase may be deferred until such time as Net Available
Proceeds, plus the aggregate amount of Net Available Proceeds
resulting from any subsequent Asset Disposition or Asset
Dispositions not otherwise used to repay Debt which is PARI PASSU to
the Notes or to invest in assets related to our business, are at
least equal to $5 million, at which time we shall be obligated to
make such Offer to Purchase at a purchase price equal to 100% of
their principal amount plus accrued interest to the date of
repurchase.
Pending application thereof in accordance with clause (ii)(b)(y) of the
foregoing paragraph, we will invest such Net Available Proceeds in Qualified
Investments. To the extent we use any portion of the Net Available Proceeds for
any purpose other than to repay Debt
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which is PARI PASSU to the Notes or to invest in assets related to our business,
or to repurchase the Notes, for purposes of computing Consolidated Interest
Expense, we will be deemed to have incurred an interest expense equal to the Pro
Forma Interest Expense as defined below under "Certain Definitions".
The foregoing provisions will not apply to a transaction consummated in
compliance with the provisions of the indenture described under "Mergers,
Consolidations and Certain Sales and Purchases of Assets" below. (Section 1015)
LIMITATION ON SALE AND LEASEBACK TRANSACTIONS
We may not, and may not permit any subsidiary to, enter into any Sale and
Leaseback Transaction unless at least 25% of the proceeds of the Sale and
Leaseback Transaction are used to pay down the Notes. (Section 1013)
LIMITATION ON ISSUANCES OF CAPITAL STOCK OF SUBSIDIARIES
We may not permit any subsidiary to issue shares of its capital stock or
securities convertible or exchangeable into, or options, warrants, rights or any
other interest with respect to, its capital stock to us other than to us or a
wholly owned subsidiary of Eagle. (Section 1016)
LIMITATION ON TRANSACTIONS WITH AFFILIATES
We may not, and may not permit any subsidiary to, enter into any
transaction with an Affiliate (other than between us and wholly owned
subsidiaries), including any loan, advance or investment, either directly or
indirectly, involving aggregate consideration in excess of $500,000, unless such
transaction is, in the good faith judgment of the Board of Directors on terms no
less favorable to us or such subsidiary than those that could be obtained in a
comparable arm's length transaction with an entity that is not an affiliate. Any
such transaction (or series of related transactions occurring within any single
fiscal year which are similar or part of a common plan) that involves in excess
of $1 million is further subject to the requirement that a majority of the
independent members of the Board of Directors determines, in their good faith
judgment as evidenced by a resolution of such members filed with the trustee,
that such transaction is in our best interests or the best interests of such
subsidiary. If any such transaction (or series of related transactions occurring
within any single fiscal year which are similar or part of a common plan) has an
aggregate value in excess of $5 million, we shall also obtain a fairness opinion
from an independent banking firm of national standing with experience in
appraising the terms and conditions of the type of transaction (or series of
related transactions) for which a fairness opinion is required. (Section 1014)
JOINT VENTURE SUBSIDIARY
The restrictions of the indenture described above generally do not
apply to our subsidiaries that have been designated as Joint Venture
Subsidiaries. See "Certain Definitions."
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CHANGE OF CONTROL
Upon the occurrence of a Change of Control, we will be required to make an
Offer to Purchase outstanding Notes at a purchase price in cash equal to 100% of
their principal amount plus accrued interest to the purchase date, subject to
the consummation of the Change of Control, and such transaction and any
financing or other transactions in connection therewith will be deemed to have
been incurred not in violation of any covenant of the indenture (irrespective of
whether such transaction or financing or other transactions would otherwise
violate any covenant of the indenture). In the event we are required to
repurchase the Notes, we intend to comply with any applicable securities laws
and regulations, including any applicable requirements of Section 14(e) of, and
Rule 14e-1 under, the Securities Exchange Act of 1934.
A "Change of Control" will be deemed to have occurred in the event, after
the date hereof, either
(a) any person or persons (other than Odyssey Partners L.P. or any
subsidiary of Odyssey Partners L.P.), acting together that
would constitute a group (for purposes of Section 13(d) of the
Securities Exchange Act of 1934, or any successor provision
thereto) (a "Group"), together with any affiliates thereof,
shall beneficially own (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, or any successor provision
thereto) at least 50% of our voting stock; or
(b) any person or Group (other than Odyssey Partners L.P. or any
subsidiary of Odyssey Partners L.P.), together with any
affiliates thereof, shall succeed in having sufficient of its
nominees elected to our Board of Directors such that such
nominees, when added to any existing director remaining on the
Board of Directors after such election who is an affiliate of
such Group, will constitute a majority of the Board of Directors.
(Section 1017)
PROVISION OF FINANCIAL INFORMATION
So long as any of the Notes are outstanding, we will file with the
Commission and provide the trustee and Note Holders with copies of the annual
and quarterly reports and other information, documents and reports specified in
Sections 13 and 15(d) of the Securities Exchange Act of 1934 and, if filing
such information, documents or reports by Eagle with the Commission is not
permitted under the Securities Exchange Act of 1934, we will provide
prospective Note Holders upon request with copies of such information,
documents and reports. (Section 1018)
MERGERS, CONSOLIDATIONS AND CERTAIN SALES AND PURCHASES OF ASSETS
Under the indenture, we:
(i) may not consolidate with or merge into any other person or permit any
other person to consolidate with or merge into us or any subsidiary (in a
transaction in which such subsidiary
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remains a subsidiary of Eagle);
(ii) may not, directly or indirectly, transfer, convey, sell, lease or
otherwise dispose of all or substantially all of its properties and assets;
(iii) may not, and may not permit any subsidiary to, directly or
indirectly, acquire capital stock or other ownership interests of any other
person such that such person becomes a subsidiary of and
(iv) may not, and may not permit any subsidiary to, directly or
indirectly, purchase, lease or otherwise acquire:
(a) all or substantially all of the assets (except pursuant to a
Sale and Leaseback Transaction permitted under the "Limitation on Sale and
Leaseback Transactions" covenant above) or
(b) any existing business (whether existing as a separate entity,
subsidiary, division, unit or otherwise) of any person, unless in any
case:
(1) in a transaction in which Eagle does not survive or in
which we directly or indirectly transfer, convey, sell, lease or
otherwise dispose of all or substantially all of our consolidated
assets, the successor company is organized under the laws of the
United States of America, any state thereof or the District of
Columbia and shall expressly assume, by a supplemental indenture
executed and delivered to the trustee in form satisfactory to the
trustee, all of our obligations under the indenture;
(2) immediately before and after giving effect to such
transaction and treating any Debt which becomes our obligation or a
subsidiary's obligation as a result of such transaction as having
been incurred by us or such subsidiary at the time of the
transaction, no event of default or event that with the passing of
time or the giving of notice, or both, would become an event of
default shall have happened and be continuing;
(3) immediately after giving effect to such transaction, the
Consolidated Net Worth of Eagle or the successor company is equal to
or greater than our Consolidated Net Worth, immediately prior to the
transaction;
(4) immediately after giving effect to such transaction, and
treating any Debt incurred by us or any subsidiary as a result of
such transaction as having been incurred at the time of such
transaction, Eagle or the successor company could incur at least
$1.00 of additional Debt pursuant to the provisions of the indenture
described in the first paragraph under "Limitation on Company Debt"
above;
(5) if, as a result of any such transaction, property or
assets of Eagle or any
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subsidiary (other than property or assets that are being acquired
in such acquisition) would become subject to a lien prohibited by
the provisions of the indenture described under "Limitation on
Liens" above, Eagle or the successor company shall have secured the
Notes as required by said covenant; and
(6) certain other conditions are met.
Notwithstanding the foregoing, Eagle or any subsidiary may directly or
indirectly acquire the capital stock or other ownership interests of a person in
a transaction in which such person becomes a subsidiary of Eagle or directly or
indirectly purchase, lease or otherwise acquire (x) all or substantially all of
the assets or (y) any existing business (whether existing as a separate entity,
subsidiary, division, unit or otherwise) of any person so long as:
(i) the sum of the consideration paid for such capital stock or other
ownership interests and/or properties or assets and the Debt incurred in
connection therewith plus
(ii) the sum of the aggregate amount of consideration paid for all other
such acquisitions consummated during the 12-month period immediately
preceding the date of such acquisition and the Debt incurred in connection
therewith does not exceed 5% of our Consolidated Tangible Assets as of our
latest available consolidated balance sheet prior to such acquisition.
If, in connection with any disposition of all or substantially all of our
properties and assets (whether by means of a merger, consolidation, sale of
assets or otherwise), we make an Offer to Purchase outstanding Notes at a
purchase price in cash equal to 100% of their principal amount, plus accrued
interest to the purchase date, then such transaction and any financing or other
related transactions will be deemed to have been incurred not in violation of
any covenant of the indenture (irrespective of whether such transaction or
financing or other transactions would otherwise violate any covenant of the
indenture). (Section 801)
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the
indenture. Reference is made to the indenture for the full definition of all
such terms, as well as any other terms used herein for which no definition is
provided. (Section 101)
"Asset Disposition" by any person means any transfer, conveyance, sale,
lease or other disposition by such person or any of its subsidiaries (including
a consolidation or merger or other sale of any such subsidiary with, into or to
another person in a transaction in which such subsidiary ceases to be a
subsidiary, but excluding a disposition by a subsidiary of such person to such
person or a wholly owned subsidiary of such person or by such person to a wholly
owned subsidiary of such person) of (i) shares of capital stock (other than
directors' qualifying shares) or other ownership interests of a subsidiary of
such person or owned by such person or any of its subsidiaries in a Joint
Venture Subsidiary, (ii) substantially all of the assets of such person or any
of its subsidiaries representing a division or line of business or (iii) other
assets or rights of such
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person or any of its subsidiaries outside of the ordinary course of business.
"Capital Lease Obligation" of any person means the obligation to pay rent
or other payment amounts under a lease of (or other Debt arrangements conveying
the right to use) real or personal property of such person which is required to
be classified and accounted for as a capital lease or a liability on the face of
a balance sheet of such person in accordance with generally accepted accounting
principles. The stated maturity of such obligation shall be the date of the last
payment of rent or any other amount due under such lease prior to the first date
upon which such lease may be terminated by the lessee without payment of a
penalty.
"Consolidated Cash Flow Available for Fixed Charges" of any person means
for any period the Consolidated Net Income for such period increased by the sum
of (i) Consolidated Interest Expense of such person for such period, plus (ii)
Consolidated Income Tax Expense of such person for such period, plus (iii) the
consolidated depreciation and amortization expense included in the income
statement of such person for such period, plus (iv) other non-cash charges of
such person for such period deducted from consolidated revenues in determining
Consolidated Net Income for such period, minus (v) non-cash items of such person
for such period increasing consolidated revenues in determining Consolidated Net
Income for such period.
"Consolidated Cash Flow Ratio" of any person means for any period the
ratio of:
(i) Consolidated Cash Flow Available for Fixed Charges of such person for
such period to
(ii) the sum of
(a) Consolidated interest Expense of such person for such period,
plus
(b) the annual interest expense (including the amortization of debt
discount) with respect to any Debt proposed to be incurred by such person
or its subsidiaries, plus
(c) the annual interest expense (including the amortization of debt
discount) with respect to any other Debt incurred by such person or its
subsidiaries since the end of such period to the extent not included in
Clause (ii)(A) minus
(d) Consolidated Interest Expense of such person to the extent
included in Clause (ii)(A) with respect to any Debt that will no longer be
outstanding as a result of the incurrence of the Debt proposed to be
incurred;
PROVIDED, HOWEVER, that in making such computation, the Consolidated Interest
Expense of such person attributable to interest on any Debt bearing a floating
interest rate shall be computed on a PRO FORMA basis as if the rate in effect on
the date of consumption had been the applicable rate for the entire period; and
PROVIDED FURTHER that, in the event such person or its subsidiaries has made
Asset Dispositions or acquisitions of assets not in the ordinary course of
business (including acquisitions of other persons by merger, consolidation or
purchase of capital stock) during or after such period, such computation shall
be made on a PRO FORMA basis as if the Asset
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Dispositions or acquisitions had taken place on the first day of such period.
"Consolidated Income Tax Expense" of any person means for any period the
consolidated provision for income taxes of such person for such period
calculated on a consolidated basis in accordance with generally accepted
accounting principles.
"Consolidated Interest Expense" for any person means for any period the
consolidated interest expense included in a consolidated income statement
(without deduction of interest income) of such person for such period calculated
on a consolidated basis in accordance with generally accepted accounting
principles, including without limitation or duplication (or, to the extent not
so included, with the addition of):
(i) the amortization of debt discounts;
(ii) any payments or fees with respect to letters of credit, bankers'
acceptances or similar facilities;
(iii) fees with respect to interest rate swap or similar agreement or
foreign currency hedge, exchange or similar agreements; and
(iv) the portion of any rental obligation in respect of Capital Lease
Obligations allocable to interest expense in accordance with generally accepted
accounting principles.
"Consolidated Net Income" of any person means for any period the
consolidated net income (or loss) of such person for such period determined in
accordance with generally accepted accounting principles; PROVIDED that there
shall be excluded therefrom:
(i) the net income (or loss) of any person acquired by such person or a
subsidiary of such person in a pooling-of-interests transaction for any period
prior to the date of such transaction,
(ii) the net income (but not net loss) of any subsidiary of such person
which is subject to restrictions which prevent the payment of dividends or the
making of distributions to such person to the extent of such restrictions,
(iii) the net income (or loss) of any person that is not a subsidiary of
such person except to the extent of the amount of dividends or other
distributions actually paid to such person by such other person during such
period,
(iv) gains or losses on Asset Dispositions by such person or its
subsidiaries (except gains on Asset Dispositions relating to a Joint Venture
subsidiary, including the sale or other disposition of all or a portion of the
capital stock of a Joint Venture Subsidiary, to the extent of the amount of cash
dividends or other cash distributions in respect of its capital stock relating
to the sale of the property or assets or capital stock of such Joint Venture
Subsidiary that are actually paid to, and received by, such person during such
period out of funds legally available therefor),
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(v) all extraordinary gains and extraordinary losses and
(vi) the cumulative effect of changes in accounting principles in the year
of adoption of such change.
"Consolidated Net Worth" of any person means the consolidated
shareholders' equity of such person, determined on a consolidated basis in
accordance with generally accepted accounting principles, less amounts
attributable to redeemable stock of such person; PROVIDED that, with respect to
Eagle, adjustments following August 7, 2000 to Eagle's accounting books and
records in accordance with Accounting Principles Board Opinions Nos. 16 and 17
(or successor opinions thereto) or otherwise resulting from the acquisition of
control of Eagle by another person shall not be given effect to.
"Consolidated Tangible Assets" of any person means the sum of the Tangible
Assets of such person after eliminating inter-company items, determined on a
consolidated basis in accordance with generally accepted accounting principles,
including appropriate deductions for any minority interest in Tangible Assets of
such person's subsidiaries; PROVIDED, HOWEVER, that, with respect to Eagle,
adjustments following August 7, 2000 to Eagle's accounting books and records in
accordance with Accounting Principles Board Opinions Nos. 16 and 17 (or
successor opinions thereto) or otherwise resulting from the acquisition of
control of Eagle by another person shall not be given effect to.
"Consolidated Tangible Net Worth" of a person other than Eagle any means
the consolidated shareholders' equity of such person and its consolidated
subsidiaries, as determined in accordance with generally accepted accounting
principles, less the net book value as shown by the accounting books and records
of such person and its consolidated subsidiaries of:
(i) all its licenses, patents, patent applications, copyrights,
trademarks, trade names, goodwill, non-compete agreements or organizational
expense and other like intangibles,
(ii) unamortized debt discount and expense and
(iii) any investment by such person and its consolidated subsidiaries in
Eagle.
"Debt" means (without duplication), with respect to any person, whether
recourse is to all or a portion of the assets of such person and whether or not
contingent:
(i) every obligation of such person for money borrowed,
(ii) every obligation of such person evidenced by bonds, debentures, notes
or other similar instruments, including obligations incurred in connection with
the acquisition of property, assets or businesses,
(iii) every reimbursement obligation of such person with respect to
letters of credit, bankers' acceptances or similar facilities issued for the
account of such person,
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(iv) every obligation of such person issued or assumed as the deferred
purchase price of property or services (but excluding trade accounts payable or
accrued liabilities arising in the ordinary course of business which are not
overdue or are being contested in good faith),
(v) every Capital Lease Obligation of such person,
(vi) the maximum fixed redemption or repurchase price of redeemable stock
of such person at the time of determination,
(vii) every net obligation under interest rate swap or similar agreements
or foreign currency hedge, exchange or similar agreements of such person and
(viii) every obligation of the type referred to in clauses (i) through
(vii) of another person and all dividends of another person the payment of
which, in either case, such person has guaranteed or is responsible or liable,
directly or indirectly, as obligor, Guarantor or otherwise.
"Disqualified Stock" of any person means any capital stock of such person
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of Eagle, any of its
subsidiaries or the holder thereof, in whole or in part, on or prior to the
final stated maturity of the Notes.
"Joint Venture Subsidiary" means:
(i) any corporation:
(a) which would be a subsidiary but for its designation as a Joint
Venture Subsidiary by Eagle's Board of Directors at or before the time of
determination as provided below and
(b) in which any person other than Eagle or any of its affiliates
which, in the unanimous determination of the independent members of the
Board of Directors evidenced by a board resolution has a significant joint
or shared equity interest with Eagle or any of its subsidiaries and which
is created in connection with the purchase of properties and assets used
in Eagle's business, and
(ii) any subsidiary of a Joint Venture Subsidiary.
The Board of Directors may designate any subsidiary (including any newly
acquired or newly formed subsidiary) which satisfies the requirements of clause
(i)(b) above to be a Joint Venture Subsidiary unless such subsidiary owns any
capital stock of or owns or holds any lien on any of Eagle's property or assets
or of any other subsidiary which is not a subsidiary of the subsidiary to be so
designated, PROVIDED that immediately after giving PRO FORMA effect to such
designation (i) the Consolidated Cash Flow Ratio would be greater than 2 to 1
and (ii) there would not exist any event of default or event that with the
passing of time or the giving of notice,
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or both, would become an event of default under the indenture. The Board of
Directors may designate any Joint Venture Subsidiary to be a subsidiary,
PROVIDED that, immediately after giving PRO FORMA effect to such designation,
(i) the Consolidated Cash Flow Ratio would be greater than 2 to 1 and (ii)
there would not exist any event of default or event that with the passing of
time or the giving of notice, or both, would become an event of default under
the indenture.
"Net Available Proceeds" from any Asset Disposition by any person means
cash or readily marketable cash equivalents received (including by way of sale
or discounting of a note, installment receivable or other receivable, but
excluding any other consideration received in the form of assumption by the
acquiror of Debt or other obligations relating to such properties or assets or
received in any other noncash form) therefrom by such person, net of:
(i) all legal title and recording tax expenses, commissions and other fees
and expenses incurred and all federal, state, provincial, foreign and local
taxes required to be accrued as a liability as a consequence of such Asset
Disposition,
(ii) reasonable fees and expenses (including brokerage commissions)
incurred by such person in connection with such Asset Disposition,
(iii) all payments made by such person or its subsidiaries on any Debt
which is secured by such assets in accordance with the terms of any lien (or
agreement creating such lien) upon or with respect to such assets or which must
by the terms of such lien, or in order to obtain a necessary consent to such
Asset Disposition or by applicable law, be repaid out of the proceeds from such
Asset Disposition,
(iv) all payments made with respect to liabilities associated with the
assets which are the subject of the Asset Disposition, including, without
limitation, trade payables and other accrued liabilities,
(v) appropriate amounts to be provided by such person or any subsidiary
thereof, as the case may be, as a reserve in accordance with generally accepted
accounting principles against any liabilities associated with such assets and
retained by such person or any subsidiary thereof, as the case may be, after
such Asset Disposition, including, without limitation, liabilities under any
indemnification obligations and severance and other employee termination costs
associated with such Asset Disposition,
(vi) all distributions and other payments made to minority interest
holders in subsidiaries of such person or joint ventures as a result of such
Asset Disposition and
(vii) in connection with any sale of our Westville, Indiana distribution
facility, any payment made by Eagle after August 7, 2000 for the purchase of the
lease existing on August 7, 2000 and covering such facility.
"New Senior Secured Facility" means the Amended and Restated Loan and
Security Agreement, dated as of August 7, 2000 between Eagle and Congress
Financial Corporation
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(Central), as such may be amended, modified, supplemented, replaced, renewed,
extended, refinanced, refunded or restated from time to time; PROVIDED, that no
such amendment, modification, supplement, replacement, renewal, extension,
restatement, refinancing or refunding shall constitute a "Revolving Credit
Facility" if it allows loans, letters of credit and other principal amounts
outstanding at any time in excess of $50 million in the aggregate or if it is
secured by any property or assets other than inventory and the proceeds thereof
and PROVIDED FURTHER that in no event shall the aggregate principal amount of
Debt outstanding under the New Senior Secured Facility, together with any
refinancing or refunding of any such Debt, exceed $50 million.
"Offer to Purchase" means a written offer (the "Offer") sent by Eagle by
first class mail, postage prepaid, to each Note Holder at his or her address
appearing in the note register on the date of the Offer offering to purchase up
to the principal amount of Notes specified in such Offer at the purchase price
specified in such Offer (as determined pursuant to the indenture). Unless
otherwise required by applicable law, the Offer shall specify an expiration date
(the "Expiration Date") of the Offer to Purchase which shall be, subject to any
contrary requirements of applicable law, not less than 30 days nor more than 60
days after the date of such Offer and a settlement date (the "Purchase Date")
for purchase of Notes within five business days after the Expiration Date. Eagle
shall notify the trustee at least 15 business days (or such shorter period as is
acceptable to the trustee) prior to the mailing of the Offer of Eagle's
obligation to make an Offer to Purchase, and the Offer shall be mailed by Eagle
or, at Eagle's request, by the trustee in the name and at Eagle's expense. The
Offer shall contain all instructions and materials necessary to enable such Note
Holders to tender Notes pursuant to the Offer to Purchase. The Offer shall also
state:
(i) the section of the indenture pursuant to which the Offer to
Purchase is being made;
(ii) the Expiration Date and the Purchase Date;
(iii) the aggregate principal amount of the outstanding Notes offered to
be purchased pursuant to the Offer to Purchase (including, if less than 100%,
the manner by which such has been determined pursuant to the Section hereof
requiring the Offer to Purchase) (the "Purchase Amount");
(iv) the purchase price to be paid for each $1,000 aggregate principal
amount of Notes accepted for payment (as specified pursuant to the indenture)
(the "Purchase Price");
(v) that the Note Holder may tender all or any portion of the Notes
registered in the name of such Note Holder and that any portion of a Note
tendered must be tendered in an integral multiple of $1.00 principal amount;
(vi) the place or places where Notes are to be surrendered for tender
pursuant to the Offer to Purchase;
(vii) that interest on any Note not tendered or tendered but not purchased
pursuant to the Offer to Purchase will continue to accrue;
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(viii) that on the Purchase Date the Purchase Price will become due end
payable upon each Note being accepted for payment pursuant to the Offer to
Purchase and that interest thereon shall cease to accrue on and after the
Purchase Date;
(ix) that each Note holder electing to tender a Note pursuant to the Offer
to Purchase will be required to surrender such Notes at the place or places
specified in the Offer prior to the close of business on the Expiration Date
(such Note being, if Eagle or the trustee so requires, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to Eagle
and the trustee duly executed by, the Note Holder or his or her attorney duly
authorized in writing);
(x) that Note Holders will be entitled to withdraw all or any portion of
Notes tendered if Eagle (or its paying agent) receives, not later than the close
of business on the Expiration Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Note Holder, the principal amount of the
Note tendered, the certificate number of the Note tendered and a statement that
such Note Holder is withdrawing all or a portion of his or her tender;
(xi) that (a) if Notes in an aggregate principal amount less than or equal
to the Purchase Amount are duly tendered and not withdrawn pursuant to the Offer
to Purchase, Eagle shall purchase all such Notes and (b) if Notes in an
aggregate principal amount in excess of the Purchase Amount are tendered and not
withdrawn pursuant to the Offer to Purchase, Eagle shall purchase Notes having
an aggregate principal amount equal to the Purchase Amount on a pro rata basis
(with such adjustments as may be deemed appropriate so that only Notes in
denominations of $1.00 or integral multiples thereof shall be purchased); and
(xii) that in the case of any Note Holder whose Note is purchased only in
part, Eagle shall execute, and the trustee shall authenticate and deliver to
such Note Holder without service charge, a new Note or Notes, of any authorized
denomination as requested by such Note Holder, in an aggregate principal amount
equal to and in exchange for the unpurchased portion of the Note so tendered.
Any Offer to Purchase shall be governed by and effected in accordance with
the terms of the Offer contained in such Offer to Purchase.
"Pro Forma Interest Expense" means, for any period the PRO FORMA amount of
interest, determined on the basis of the interest rate payable on the Notes,
that would be payable for such period on a principal amount equal to the
aggregate amount of the Net Available Proceeds that, within 12 months of the
receipt thereof, have not been used to repay Debt which is PARI PASSU to the
Notes, to invest in assets related to Eagle's business or to repurchase Notes.
"Qualified Investment" means the following kinds of instruments if, on the
date of purchase or other acquisition of any such instrument by Eagle or any
subsidiary, the remaining term to maturity thereof is not more than one year:
(i) obligations issued or unconditionally guaranteed as to principal and
interest by the United States or by any agency or authority controlled or
supervised by and acting as an instrumentality of the United States;
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(ii) obligations (including, but not limited to, demand or time deposits,
bankers' acceptances and certificates of deposit) issued by
(a) a depository institution or trust company incorporated under the
laws of the United States, any state thereof or the District of Columbia,
(b) a U.S. branch office or agency of any foreign depository
institution or
(c) wholly owned subsidiaries of any U.S. depository institution
guaranteed by such U.S. bank or depository, PROVIDED that such U.S. bank,
trust company or U.S. branch office or agency has, at the time of Eagle's
or any subsidiary's investment therein, or contractual commitment
providing for such investment, capital, surplus or undivided profits (as
of the date of such institution's most recently published financial
statements) in excess of $100 million and the long-term unsecured debt
obligations (other than such obligations rated on the basis of the credit
of a person or entity other than such institution) of such institution, at
the time of Eagle's or such subsidiary's investment therein or contractual
commitment providing for such investment, is rated at least A by Standard
& Poor's Corporation or A3 by Moody's Investors Service, Inc.; and
(iii) debt obligations (including, but not limited to, commercial paper
and medium-term notes) issued or unconditionally guaranteed as to principal and
interest by any corporation, state or municipal government or agency or
instrumentality thereof, or foreign sovereignty if the commercial paper of such
corporation, state or municipal government or foreign sovereignty has, at the
time of Eagle's or any subsidiary's investment therein or contractual commitment
providing for such investment, credit ratings of A-1 by Standard & Poor's
Corporation or P-1 by Moody's Investors Service, Inc., or the debt obligations
of such corporation, state or municipal government or foreign sovereignty, at
the time of Eagle's or such subsidiary's investment therein or contractual
commitment providing for such investment, have credit ratings of at least A by
Standard & Poor's Corporation or A3 by Moody's Investors Service, Inc.
"Sale and Leaseback Transaction" of any person means an arrangement with
any lender or investor or to which such lender or investor is a party providing
for the leasing by such person of any property or asset of such person which has
been or is being sold or transferred by such person after the acquisition
thereof or the completion of construction or commencement of operation thereof
to such lender or investor or to any person to whom funds have been or are to be
advanced by such lender or investor on the security of such property or asset.
The stated maturity of such arrangement shall be the date of the last payment of
rent or any other amount due under such arrangement prior to the first date on
which such arrangement may be terminated by the lessee without payment of a
penalty.
"Store Swap" means any Asset Disposition by Eagle or a Subsidiary pursuant
to which (i) Eagle or such subsidiary exchanges (a) title to property and assets
used in the business for (b) title to the property and assets of another person
of substantially equivalent fair market value located within 150 miles of Milan,
Illinois, for use in the business and (ii) Eagle or such subsidiary, on the one
hand, or such person, on the other hand, pays no cash to the other person in
connection with such Store Swap except to the extent necessary to offset any
difference
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between the fair market value of the respective properties and assets being
exchanged.
"Tangible Assets" of any person means, at any date, the gross book value
as shown by the accounting books and records of such person of all its property,
both real and personal, less:
(i) the net book value of all its licenses, patents, patent applications,
copyrights, trademarks, trade names, goodwill, non-compete agreements or
organizational expenses and other like intangibles,
(ii) unamortized Debt discount and expense,
(iii) all reserves for depreciation, obsolescence, depletion and
amortization of its properties and
(iv) all other proper reserves which in accordance with generally accepted
accounting principles should be provided in connection with the business
conducted by such person.
Notwithstanding the above, with respect to Eagle and its consolidated
subsidiaries, adjustments following August 7, 2000 to the accounting books and
records of Eagle and its consolidated subsidiaries in accordance with Accounting
Principles Board Opinions Nos. 16 and 17 (or successor opinions thereto) or
otherwise resulting from the acquisition of control of Eagle by another person
shall not be given effect.
EVENTS OF DEFAULT
The following are Events of Default under the indenture:
(i) failure to pay principal of (or premium, if any, on) any Note when
due;
(ii) failure to pay any interest on any Note when due, continued for 30
days;
(iii) default in the payment of principal and interest on Notes required
to be repurchased pursuant to an Offer to Purchase as described under
"Limitation on Certain Asset Dispositions," "Change of Control" and "Mergers,
Consolidations and Certain Sales and Purchases of Assets" when due and payable;
(iv) failure to perform or comply with the provisions described under
"Mergers, Consolidations and Certain Sales and Purchases of Assets;"
(v) our failure to perform any other covenant or agreement under the
indenture or the Notes continued for 30 days after written notice to us by the
trustee or holders of at least 25% in aggregate principal amount of outstanding
Notes;
(vi) default under the terms of any instrument evidencing or securing Debt
for money borrowed by Eagle or any subsidiary having an outstanding principal
amount (or, if such Debt provides for an amount less than the principal amount
thereof to be due and payable upon a
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declaration of acceleration of the maturity thereof, in an amount not greater
than such lesser amount) of at least $3 million, individually or in the
aggregate:
(a) which results from a failure to pay any portion of principal
of such Debt when due or
(b) which results in such Debt becoming or being declared due and
payable prior to the date on which it would otherwise have become due and
payable;
(vii) the rendering of a final judgment or judgments against Eagle or any
subsidiary in an amount in excess of $1 million which remains undischarged or
unstayed for a period of 60 days after the date on which the right to appeal has
expired; and
(viii) certain events of bankruptcy, insolvency or reorganization
affecting Eagle or any subsidiary (and, in the case of an involuntary
proceeding, the continuance of any decree or order of relief issued in
connection with such involuntary proceeding and unstayed and in effect for 60
consecutive days). (Section 501)
Subject to the provisions of the indenture relating to the duties of the
trustee in case an event of default shall occur and be continuing, the trustee
is under no obligation to exercise any of its rights or powers under the
indenture at the request or direction of any of the Note Holders, unless such
Note Holders shall have offered to the trustee reasonable security or indemnity.
(Section 603) Subject to such provisions for the indemnification of the trustee,
the holders of a majority in aggregate principal amount of the outstanding Notes
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the trustee or exercising any trust or power
conferred on the trustee. (Section 512)
If an event of default (other than an event of default described in clause
(viii) above) shall occur and be continuing, either the trustee or the holders
of at least 25% in aggregate principal amount of the outstanding Notes may
accelerate the maturity of all Notes; PROVIDED, HOWEVER, that after such
acceleration, but before a judgment or decree based on acceleration, the holders
of a majority in aggregate principal amount of outstanding Notes may, under
certain circumstances, rescind and annul such acceleration if all Events of
Default, other than the non-payment of accelerated principal, have been cured or
waived as provided in the indenture. If an event of default specified in clause
(viii) above occurs, the outstanding Notes will IPSO FACTO become immediately
due and payable without any declaration or other act on the part of the trustee
or any Holder. (Section 502) For information as to waiver of defaults, see
"Modification and Waiver."
No Note Holder has any right to institute any proceeding with respect to
the indenture or for any remedy thereunder, unless such Note Holder shall have
previously given to the trustee written notice of a continuing event of default
and unless also the holders of at least 25% in aggregate principal amount of the
outstanding Notes shall have made written request, and offered reasonable
indemnity, to the trustee to institute such proceeding as trustee, and the
trustee shall not have received from the holders of a majority in aggregate
principal amount of the outstanding Notes a direction inconsistent with such
request and shall have failed to institute such proceeding within 60 days.
(Section 507) However, such limitations do not apply to a suit
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instituted by a Note Holder for enforcement of payment of the principal of and
premium, if any, or interest on such Note on or after the respective due dates
expressed in such Note. (Section 508)
We are required to furnish to the trustee annually a statement as to the
performance of certain of our obligations under the indenture and as to any
default in such performance. (Section 1019)
GOVERNING LAW
The indenture and the Notes are governed by the laws of the State of New
York.
MODIFICATION AND WAIVER
Modifications and amendments of the indenture may be made by Eagle and the
trustee with the consent of the holders of a majority in aggregate principal
amount of the outstanding Notes; PROVIDED, HOWEVER, that no such modification or
amendment may, without the consent of each Note Holder affected thereby:
(i) change the Stated Maturity of the principal of, or any installment
of interest on, any Note,
(ii) reduce the principal amount of, or the premium or interest on, any
Note,
(iii) change the place or currency of payment of principal of, or premium
or interest on, any Note,
(iv) impair the right to institute suit for the enforcement of any payment
on or with respect to any Note,
(v) reduce the above-stated percentage of outstanding Notes necessary to
modify or amend the indenture,
(vi) reduce the percentage of aggregate principal amount of outstanding
Notes necessary for waiver of compliance with certain provisions of the
indenture or for waiver of certain defaults,
(vii) modify any provisions of the indenture relating to the modification
and amendment of the indenture or the waiver of past defaults or covenants,
except as otherwise specified, or
(viii) following the mailing of any Offer to Purchase, modify any Offer to
Purchase for the Notes required under the "Limitation on Certain Asset
Dispositions," "Change of Control" and "Mergers, Consolidations and Certain
Sales and Purchases of Assets" covenants contained in the indenture in a manner
materially adverse to the holders of such Notes. (Section 902)
The holders of a majority in aggregate principal amount of the outstanding
Notes, on behalf of all Note Holders, may waive our compliance with certain
restrictive provisions of the indenture. (Section 1021) Subject to certain
rights of the trustee, as provided in the indenture, the
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holders of a majority in aggregate principal amount of the outstanding Notes, on
behalf of all Note Holders, may waive any past default under the indenture,
except a default in the payment of principal, premium or interest or a default
arising from a Change of Control. (Section 513)
DEFEASANCE
The indenture provides that, if applicable, we will be discharged from any
and all obligations in respect of then outstanding Notes, other than the
obligation to duly and punctually pay the principal of, and premium and interest
on, the Notes in accordance with the terms of the Notes and the indenture, upon
irrevocable deposit with the trustee, in trust, of money and for U.S.
government obligations which will provide money in an amount sufficient to
pay the principal of and premium, if any, and each installment of interest if
any, on the outstanding Notes. Such trust may only be established if, among
other things:
(i) we have received an opinion of counsel confirming that the Note
Holders will not recognize gain or loss for federal income tax purposes as a
result of such deposit, defeasance and discharge and will be subject to federal
income tax on the same amount, in the same manner and at the same times as would
have bean the case if such deposit, defeasance and discharge had not occurred;
(ii) no event of default or event that with the passing of time or the
giving of notice, or both, shall constitute an event of default shall have
occurred or be continuing; and
(iii) certain other customary conditions precedent are satisfied.
(Article Twelve)
THE TRUSTEE
The indenture provides that, except during the continuance of an event of
default, the trustee will perform only such duties as are specifically set forth
in the indenture. (Section 601)
The indenture and provisions of the Trust indenture Act incorporated by
reference therein contain limitations on the rights of the trustee, should it
become a creditor of Eagle, to obtain payment of claims in certain cases or to
realize on certain property received by it in respect of any such claim as
security or otherwise. The trustee is permitted to engage in other transactions
with us or any affiliate, PROVIDED, HOWEVER, that if it acquires any conflicting
interest (as defined in the indenture or in the Trust indenture Act of 1939, as
amended), it must eliminate such conflict or resign. (Section 608)
EXPERTS
The financial statements incorporated in this prospectus by reference from
Eagle Food Centers, Inc.'s (the "Company") Annual Report on Form 10-K for the
year ended January 29, 2000 have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report, which is incorporated herein by
reference (which report indicates that the uncertainty of the Company about if
or when it will emerge from Chapter 11 Bankruptcy raised substantial doubt about
the Company's ability to continue as a going concern and that the Company
changed
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its method of accounting for goodwill), and have been so incorporated in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.
COMMISSION POSITION ON INDEMNIFICATION
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Commission such indemnification is against
public policy as expressed in the Act and is therefore unenforceable.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other expenses of Issuance and Distribution
The following table sets forth the estimated fees and expenses payable by us in
connection with the issuance and distribution of the common stock and Notes
registered hereby. All of such fees and expenses are estimates, except the
Securities Act registration fee.
Securities Act Registration Fee $25,662
Printing and duplicating fees $10,000
Legal fees and expenses $10,000
Accounting fees and expenses $3,000
Miscellaneous expenses $5,000
*Total $53,662
*The expenses listed above do not include fees paid to Jefferies & Co.,
Inc. ("Jefferies"). Jefferies was engaged prior to the filing of the bankruptcy
Petition as a financial advisor to Eagle. Pursuant to an engagement letter,
Jefferies earned a prepetition fee of $1.3 million which was paid pursuant to
the Plan. Also not included are legal fees and other expenses incurred in the
course of the bankruptcy.
*None of the expenses listed above will be borne by the Note Holders.
Item 15. Indemnification of Directors and Officers
Our Bylaws provide that we will indemnify our directors and executive officers
and may indemnify our other officers, employees and other agents to the fullest
extent permitted by Delaware law. In addition, our amended and restated
certificate of incorporation contains provisions to indemnify Eagle directors
and officers to the fullest extent permitted by the Delaware General Corporation
Law. We believe that these provisions will assist us in attracting and retaining
qualified individuals to serve as directors.
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ITEM 16. EXHIBITS
2.1 First Amended Organization Plan of Eagle Food Centers, Inc. filed under
Chapter 11 of the Bankruptcy Code, dated May 13, 1999 (incorporated by
reference to Exhibit 2.1 to Eagle's Form 8-K filed on July 24, 2000).
2.2 Disclosure Statement with Respect to First Amended Reorganization Plan of
Eagle Food Centers, Inc. (incorporated by reference to Exhibit 99.1 to
Eagle's Form 8-K filed on July 24, 2000)
3.1 Amended and Restated Certificate of Incorporation (incorporated by
reference to Exhibit 3.1 to Eagle's Form 8-K filed on July 24, 2000).
3.2 Restated Bylaws (incorporated by reference to Exhibit 3.2 to Eagle's Form
8-K filed on July 24, 2000).
4.1 Indenture between Eagle and U.S. Bank Trust National Association, as
Trustee, governing the 11% Senior Notes (incorporated by reference to
Exhibit 4.1 to Eagle's Form 8-K filed on August 17, 2000).
4.2 Form of 11% Senior Notes (included in Exhibit A to Exhibit 4.1 above).
10.1 Escrow Agreement between Eagle and U.S. Bank Trust National Association
(incorporated by reference to Exhibit 4.1 to Eagle's Form 8-K filed on
August 17, 2000).
10.2 Senior Secured Credit Facility with Congress Financial Corporation
(incorporated by reference to Exhibit 10.2 to Eagle's Form 8-K filed on
August 17, 2000).
12.1 Computation of earnings to combined fixed charges
23.2 Independent Auditors' Consent
24.1 Power of Attorney (included on signature page hereto)
99.1 Findings of Fact, Conclusions of Law, and Order Under 11 U.S.C.
Sections 1129 (a) and (b) and Fed. R. Bankr. P. 3020 Confirming
First Amended Reorganization Plan of Eagle Food Centers, Inc.
(incorporated by reference to Exhibit 99.2 to Eagle's Form 8-K
filed on July 24, 2000).
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
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(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high and of the
estimated maximum offering price may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement; provided,
however, that subparagraphs (i) and (ii) do not apply if the information
required to be included in a post-effective amendment by those paragraphs is
contained in the periodic reports filed by the Registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in this registration statement.
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
these securities being registered which remain unsold at the termination of the
offering.
The undersigned Registrant hereby further undertakes that, for the purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual reports pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference to this
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby further undertakes that:
(1) For purposes of determining any liability under the Securities Act of 1933,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance under Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4), or 497(h)
under the Securities Act of 1933 shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration
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statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise (other than
insurance), the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in such Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in such Act and
will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, we certify
that we have reasonable grounds to believe that we meet all of the requirements
for filing on Form S-3 and have duly caused this registration statement to be
signed on our behalf by the undersigned, thereunto duly authorized, in the City
of Milan, State of Illinois on October 2, 2000.
EAGLE FOOD CENTERS, INC.
(Registrant)
By: /s/ S. Patric Plumley
---------------------------------
S. Patric Plumley
Senior Vice President-
Chief Financial Officer and Secretary
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POWER OF ATTORNEY
The undersigned hereby constitutes and appoints S. Patric Plumley and
Jeffrey L. Little as his true and lawful attorneys-in-fact and agents, jointly
and severally, with full power of substitution and resubstitution, for and in
his stead, in any and all capacities, to sign on his behalf the Registration
Statement on Form S-3 in connection with the sale by Eagle Food Centers, Inc. of
offered securities, and to execute any amendments thereto (including
post-effective amendments) or certificates that may be required in connection
with this Registration Statement, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities
and Exchange Commission and granting unto said attorneys-in-fact and agents,
jointly and severally, the full power and authority to do and perform each and
every act and thing necessary or advisable to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, jointly and severally, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-3 has been signed by the following persons in
the capacities and on the dates indicated:
Signature Title Date
President, Chief
/s/ Jeffrey L. Little Executive Officer October 2, 2000
-------------------------- and Director -------------------------
Jeffrey L. Little (Principal Executive
Officer)
Senior Vice
/s/ S. Patric Plumley President, Secretary October 2, 2000
-------------------------- and Chief Financial -------------------------
S. Patric Plumley Officer (Principal
Financial and
Accounting Officer)
and Director
/s/ Robert J. Kelly Chairman of the October 2, 2000
-------------------------- Board and Director -------------------------
Robert J. Kelly
/s/ Peter S. Forman Director October 2, 2000
-------------------------- --------------------------
Peter B. Foreman
/s/ William J. Snyder Director October 2, 2000
-------------------------- --------------------------
William J. Snyder
50
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INDEX TO EXHIBITS
2.1 First Amended Organization Plan of Eagle Food Centers, Inc.
filed under Chapter 11 of the Bankruptcy Code, dated May 13,
1999, as amended (incorporated by reference to Exhibit 2.1 to
Eagle's Form 8-K filed on July 24, 2000 and Exhibit 2.1 to
Eagle's Form 8-K filed on August 16, 2000).
2.2 Disclosure Statement with Respect to First Amended
Reorganization Plan of Eagle Food Centers, Inc. (incorporated
by reference to Exhibit 99.1 to Eagle's Form 8-K filed on July
24, 2000)
3.1 Amended and Restated Certificate of Incorporation
(incorporated by reference to Exhibit 3.1 to Eagle's Form 8-K
filed on July 24, 2000).
3.2 Restated Bylaws (incorporated by reference to Exhibit 3.2 to
Eagle's Form 8-K filed on July 24, 2000).
4.1 Indenture between Eagle and U.S. Bank Trust National
Association, as Trustee, governing the 11% Senior Notes
(incorporated by reference to Exhibit 4.1 to Eagle's Form 8-K
filed on August 17, 2000).
4.2 Form of 11% Senior Notes (included in section 202 of Exhibit
4.1 above).
10.1 Escrow Agreement between Eagle and U.S. Bank Trust National
Association (incorporated by reference to Exhibit 10.1 to
Eagle's Form 8-K filed on August 17, 2000).
10.2 Senior Secured Credit Facility with Congress Financial
Corporation (incorporated by reference to Exhibit 10.2 to
Eagle's Form 8-K filed on August 17, 2000).
12.1 Computation of earnings to combined fixed charges
23.2 Independent Auditors' Consent
24.1 Power of Attorney (included on signature page hereto)
99.1 Findings of Fact, Conclusions of Law, and Order
Under 11 U.S.C. Sections 1129 (a) and (b) and
Fed. R. Bankr. P. 3020 Confirming First Amended
Reorganization Plan of Eagle Food Centers, Inc.
(incorporated by reference to Exhibit 99.2 to
Eagle's Form 8-K filed on July 24, 2000).
