UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 10, 1998
INTERSTATE BAKERIES CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
1-11165 43-1470322
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(Commission File Number) (IRS Employer Identification No.)
12 East Armour Boulevard, Kansas City, Missouri 64111
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (816) 502-4000
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N/A
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(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events.
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On September 10, 1998, Interstate Brands Corporation, a wholly owned
subsidiary of Interstate Bakeries Corporation entered into a 6.43% Guaranteed
Senior Note Agreement (Senior Note Agreement) with the purchaser named in the
Purchaser Schedule (as defined therein).
A copy of the Credit Agreement is filed herewith as Exhibit 1. The
Exhibit is incorporated herein by this reference.
<PAGE>
Item 7. Financial Statements and Exhibits.
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(c) Exhibits.
Exhibit Description
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1. Note Agreement dated September 10, 1998 signed by
Interstate Brands Corporation and Interstate Brands
West Corporation and the purchaser named in
the Purchaser Schedule (as defined therein).
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
INTERSTATE BAKERIES CORPORATION
By: /s/ Charles A. Sullivan
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Charles A. Sullivan, Chairman
And Chief Executive Officer
Date: September 10, 1998
<PAGE>
EXHIBIT INDEX
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Exhibit Description
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1 Note Agreement dated September 10, 1998 signed by
Interstate Brands Corporation and Interstate Brands
West Corporation and the purchaser named in the
Purchaser Schedule (as defined therein).
Execution Copy
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INTERSTATE BRANDS CORPORATION
$200,000,000
6.43% GUARANTEED SENIOR NOTES DUE SEPTEMBER 10, 2005
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NOTE AGREEMENT
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Dated as of September 10, 1998
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<PAGE>
TABLE OF CONTENTS
(Not Part of Agreement)
Page
1A. AUTHORIZATION OF ISSUE OF NOTES 1
1B. AUTHORIZATION OF GUARANTEE 1
2. PURCHASE AND SALE OF NOTES 1 - 2
3. CONDITIONS OF CLOSING 2 - 4
3A. Certain Documents 2 - 3
3B. Opinion of Purchasers' Special Counsel 3
3C. Representations and Warranties; No Default 3
3D. Purchase Permitted By Applicable Laws 3
3E. Proceedings 3
3F. Sale of Notes to Other Purchasers 4
3G. Private Placement Numbers 4
3H. Fees 4
3I. Changes in Corporate Structure 4
4. PREPAYMENTS 4 - 5
4A. Optional Prepayment With Yield-Maintenance Amount 4
4B. Notice of Optional Prepayment 4
4C. Offer to Prepay From Proceeds of Asset Dispositions 4 - 5
4D. Partial Payments Pro Rata 5
4E. Retirement of Notes 5
5. AFFIRMATIVE COVENANTS 5 - 10
5A. Financial Statements 5 - 8
5B. Information Required by Rule 144A 8
5C. Inspection of Property 8
5D. Covenant to Secure Note Equally 8 - 9
5E. Assets of the Company and the Guarantor 9
5F. Company and Guarantor Consolidated 9
5G. Compliance with Law 9
5H. Insurance 9
5I. Maintenance of Properties 9 - 10
5J. Payment of Taxes 10
5K. Corporate Existence, etc 10
6. NEGATIVE COVENANTS 10- 18
6A. Financial Covenants 10- 11
6A(1). Incurrence of Funded Debt 10- 11
6A(2). Priority Debt 11
6A(3). Consolidated Net Worth 11
6A(4). Interest Coverage Ratio 11
6B. Indebtedness of Guarantor 11
6C. Liens, Indebtedness, and Other Restrictions 11- 17
6C(1). Liens 12- 14
6C(2). Merger, Consolidation, etc 14- 15
6C(3). Loans, Advances, Investments and
Contingent Liabilities 15- 16
6C(4). Limitation on Asset Dispositions 16- 17
6C(5). Limitation on Sale-Leaseback Transactions 17
6D. Nature of Business 17
6E. Transactions with Affiliates 17- 18
6F. Amendment of Bank Facility 18
6G. Amendments to and Refinancing of Credit Agreement 18
<PAGE>
7. EVENTS OF DEFAULT 18- 22
7A. Acceleration 18- 21
7B. Rescission of Acceleration 21- 22
7C. Notice of Acceleration or Rescission 22
7D. Other Remedies 22
8. REPRESENTATIONS, COVENANTS AND WARRANTIES 22- 26
8A. Organization 22
8B. Financial Statements 23
8C. Actions Pending 23
8D. Outstanding Indebtedness 23
8E. Title to Properties 23
8F. Taxes 23- 24
8G. Conflicting Agreements and Other Matters 24
8H. Offering of Notes 24
8I. Use of Proceeds 24- 25
8J. ERISA 25
8K. Governmental Consent 25
8L. Environmental Compliance 25
8M. Disclosure 25- 26
8N. Year 2000 Programming 26
8O. Assets of the Company and the Guarantor 26
8P. Licenses, Permits, etc. 26
8Q. Status Under Certain Statutes 26
8R. Solvency of the Company and the Guarantor 26
9. REPRESENTATIONS OF EACH PURCHASER 26- 28
9A. Nature of Purchase 27
9B. Source of Funds 27- 28
9C. Representations of Each Purchaser to
Each Other Purchaser 28
10. GUARANTY 28- 32
10A. The Guaranty 28- 29
10B. Guaranty Unconditional 29- 30
10C. Discharge Only Upon Payment In Full;
Reinstatement In Certain Circumstances 30
10D. General Waivers 30- 31
10E. Subordination; Subordination of Subrogation 31
10F. Limitation 31- 32
10G. Stay of Acceleration 32
10H. Setoff 32
11. DEFINITIONS 32- 42
11A. Yield-Maintenance Terms 32- 33
11B. Other Terms 34- 42
11C. Accounting Principles, Terms and Determinations 42
<PAGE>
12. MISCELLANEOUS 43- 49
12A. Note Payments 43
12B. Expenses 43- 44
12C. Amendments 44- 45
12D. Form, Registration, Transfer and Exchange
of Notes; Lost Notes 45
12E. Persons Deemed Owners; Participations 45- 46
12F. Survival of Representations and Warranties;
Entire Agreement 46
12G. Successors and Assigns 46
12H. Disclosure to Other Persons 46
12I. Notices 46- 47
12J. Payments Due on Non-Business Days 47
12K. Satisfaction Requirement 47
12L. Governing Law 47
12M. Waiver of Jury Trial; Consent to Jurisdiction 48
12N. Severability 48
12O. Descriptive Headings 48
12P. Counterparts 48
12Q. Severalty of Obligations 48- 49
PURCHASER SCHEDULE
SCHEDULE 8A -- LIST OF SUBSIDIARIES OF THE COMPANY AND THE GUARANTOR
SCHEDULE 8D -- LIST OF INDEBTEDNESS
SCHEDULE 8G -- LIST OF AGREEMENTS RESTRICTING INDEBTEDNESS
EXHIBIT A -- FORM OF NOTE
EXHIBIT B-1 -- FORM OF OPINION OF COUNSEL TO THE COMPANY AND THE
GUARANTOR
EXHIBIT B-2 -- FORM OF OPINION OF GENERAL COUNSEL TO THE COMPANY
AND THE GUARANTOR
<PAGE>
INTERSTATE BRANDS CORPORATION
12 East Armour Boulevard
Kansas City, Missouri 64111
As of September 10, 1998
To Each of the Purchasers Named in the
Purchaser Schedule Attached Hereto
$200,000,000 6.43% Guaranteed Senior Notes due September 10, 2005
Ladies and Gentlemen:
The undersigned, Interstate Brands Corporation (as further defined in
paragraph 11, the "Company") and Interstate Brands West Corporation (as
further defined in paragraph 11, the "Guarantor"), each hereby agrees with the
purchasers named in the Purchaser Schedule attached hereto (such purchasers,
together with their respective successors and assigns, are individually
referred to herein as a "Purchaser" and collectively as the "Purchasers") as
follows:
PARAGRAPH 1. AUTHORIZATION OF ISSUE OF NOTES.
1A. Authorization of Issue of Notes. The Company will authorize the
issue of its guaranteed senior promissory notes in the aggregate principal
amount of $200,000,000, to be dated the date of issue thereof, to mature
September 10, 2005, to bear interest on the unpaid balance thereof from the
date thereof until the principal thereof shall have become due and payable at
the rate of 6.43% per annum and on overdue payments at the rate specified
therein, to be guaranteed pursuant to paragraph 10, and to be substantially in
the form of Exhibit A attached hereto. The term "Notes" as used herein shall
include each such guaranteed senior promissory note delivered pursuant to any
provision of this Agreement and each such guaranteed senior promissory note
delivered in substitution or exchange for any other Note pursuant to any such
provision. Capitalized terms used herein have the meanings specified in
paragraph 11.
1B. Authorization of Guarantee. The Guarantor will authorize its
Guarantee of the Notes upon the terms and subject to the conditions set forth
in paragraph 10.
PARAGRAPH 2. PURCHASE AND SALE OF NOTES.
2. Purchase and Sale of Notes. The Company hereby agrees to sell to
each Purchaser and, subject to the terms and conditions herein set forth, each
Purchaser agrees to purchase from the Company the aggregate principal amount
of Notes set forth opposite such Purchaser's name in the Purchaser Schedule
attached hereto at 100% of such aggregate principal amount. The Company will
deliver to each Purchaser, at the offices of Baker & Botts, L.L.P. at 2001
Ross Avenue, Dallas, Texas 75201, one or more Notes registered in such
Purchaser's name, evidencing the aggregate principal amount of Notes to be
purchased by such Purchaser and in the denomination or denominations specified
with respect to such Purchaser in the Purchaser Schedule against payment of
the purchase price thereof by transfer of immediately available funds for
credit to the Company's account #98-7016-5694 at UMB Bank, N.A., Kansas City,
Missouri ABA No. 101000695 on the date of closing, which shall be September
10, 1998 or any other date on or before September 18, 1998 upon which the
Company and the Purchasers may mutually agree (the "Closing" or the "Date of
Closing").
PARAGRAPH 3. CONDITIONS PRECEDENT.
3. Conditions of Closing. Each Purchaser's obligation to purchase and
pay for the Notes to be purchased by such Purchaser hereunder is subject to
the satisfaction, on or before the Date of Closing, of the following
conditions:
3A. Certain Documents. Each Purchaser shall have received the
following, each dated the Date of Closing:
(i) The Notes to be purchased by such Purchaser.
(ii) Certified copies of the resolutions of the Board of
Directors of the Company approving this Agreement and the Notes and
of all documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Agreement and
the Notes.
(iii) Certified copies of the resolutions of the Board of
Directors of the Guarantor approving this Agreement and of all
documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to this Agreement.
(iv) A certificate of the Secretary or an Assistant Secretary
of the Company certifying the names and true signatures of the officers
of the Company authorized to sign this Agreement and the Notes and the
other documents to be delivered hereunder.
(v) A certificate of the Secretary or an Assistant Secretary
of the Guarantor certifying the names and true signatures of the
officers of the Guarantor authorized to sign this Agreement and the
other documents to be delivered hereunder.
(vi) Certified copies of the Certificate of Incorporation and
bylaws of the Company.
(vii) Certified copies of the Certificate of Incorporation and
bylaws of the Guarantor.
(viii) Favorable opinions of (a) Shook, Hardy & Bacon L.L.P.,
counsel to the Company and the Guarantor, satisfactory to the
Purchasers and substantially in the form of Exhibit B-1 attached hereto
and as to such other matters as the Purchasers may reasonably request
and (b) Ray Sandy Sutton, Esquire, General Counsel to the Company
and the Guarantor, satisfactory to the Purchasers and substantially
in the form of Exhibit B-2 attached hereto and as to such other
matters as the Purchasers may reasonably request.
(ix) Copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, listing all effective financing
statements which name the Company, the Guarantor or the Parent as
debtor and which are filed in all jurisdictions in which any such
debtor has its principal place of business or chief executive office
together with copies of such financing statements.
(x) The Sharing Agreement duly executed and delivered each
Purchaser, MILP-8, the Agent and Banks whose Pro Rata Shares (as
such term is defined in the Credit Agreement), in the aggregate,
are greater than 90% as of the Date of Closing.
(xi) Written instructions from a Responsible Officer of the
Company, set forth on the Company's letterhead, authorizing and
directing each Purchaser to pay the purchase price of the Notes to be
purchased by such Purchaser by transfer of immediately available funds
for credit to the Company's bank account identified in paragraph 2.
3B. Opinion of Purchasers' Special Counsel. Such Purchaser shall have
received from Baker & Botts, L.L.P., who are acting as special counsel for the
Purchasers in connection with this transaction, a favorable opinion
satisfactory to such Purchaser as to such matters incident to the matters
herein contemplated as it may reasonably request.
3C. Representations and Warranties; No Default. The representations
and warranties contained in paragraph 8 shall be true on and as of the Date of
Closing, except to the extent of changes caused by the transactions herein
contemplated; there shall exist on the Date of Closing no Event of Default or
Default; and the Company and the Guarantor shall each have delivered to such
Purchaser an Officer's Certificate, dated the Date of Closing, to both such
effects.
3D. Purchase Permitted By Applicable Laws. Neither the (i) offer by
the Company of, and the purchase of and payment for, the Notes to be purchased
by such Purchaser on the Date of Closing on the terms and conditions herein
provided (including the use of the proceeds of such Notes by the Company) nor
(ii) the Guarantee of the Guarantor set forth in paragraph 10 shall violate
any applicable law or governmental regulation (including, without limitation,
section 5 of the Securities Act or Regulation U or X of the Board of Governors
of the Federal Reserve System) or subject such Purchaser to any tax, penalty,
liability or other onerous condition under or pursuant to any applicable law
or governmental regulation, and such Purchaser shall have received such
certificates or other evidence as it may request to establish compliance with
this condition.
3E. Proceedings. All corporate and other proceedings taken or to be
taken in connection with the transactions contemplated hereby and all
documents incident thereto shall be satisfactory in substance and form to such
Purchaser, and such Purchaser shall have received all such counterpart
originals or certified or other copies of such documents as it may reasonably
request.
3F. Sale of Notes to Other Purchasers. The Company shall have sold to
the other Purchasers the Notes to be purchased by them at the Closing and
shall have received payment in full therefor.
3G. Private Placement Number. A Private Placement Number issued by
Standard & Poor's CUSIP Service Bureau (in cooperation with the Securities
Valuation Office of the National Association of Insurance Commissioners) shall
have been obtained for the Notes.
3H. Fees. Without limiting the provisions of paragraph 12B, your
special counsel shall have received its fees, charges and disbursements to the
extent reflected in a statement of such special counsel rendered to the
Company at least one Business Day prior to the Closing.
3I. Changes in Corporate Structure. Neither the Company, the Guarantor
nor the Parent shall have (i) changed its jurisdiction of incorporation or
been a party to any merger or consolidation or (ii) succeeded to all or any
substantial part of the liabilities of any other entity, in each case, at any
time since the most recent financial statements referred to in paragraph 8B,
except in connection with the Drake Acquisition.
PARAGRAPH 4. PREPAYMENTS.
4. Prepayments. The Notes shall be subject to prepayment only with
respect to the optional prepayments permitted by paragraph 4A and the required
prepayments contemplated by paragraph 4C.
4A. Optional Prepayment With Yield-Maintenance Amount. The Notes shall
be subject to prepayment, in whole at any time or from time to time in part
(in multiples of $5,000,000 for any partial prepayment of the Notes), at the
option of the Company, at 100% of the principal amount so prepaid plus
interest thereon to the prepayment date and the Yield-Maintenance Amount, if
any, with respect to each Note.
4B. Notice of Optional Prepayment. The Company shall give the holder
of each Note irrevocable written notice of any prepayment pursuant to
paragraph 4A not less than 10 Business Days prior to the prepayment date,
specifying such prepayment date and the principal amount of the Notes, and of
the Notes held by such holder, to be prepaid on such date and stating that
such prepayment is to be made pursuant to paragraph 4A. Notice of prepayment
having been given as aforesaid, the principal amount of the Notes specified in
such notice, together with interest thereon to the prepayment date and
together with the Yield-Maintenance Amount, if any, with respect thereto,
shall become due and payable on such prepayment date. The Company shall, on or
before the day on which it gives written notice of any prepayment pursuant to
paragraph 4A, give telephonic notice of the principal amount of the Notes to
be prepaid and the prepayment date to each holder which shall have designated
a recipient of such notices in the Purchaser Schedule attached hereto or by
notice in writing to the Company.
4C. Offer to Prepay From Proceeds of Asset Dispositions. The Company
shall, under the circumstances contemplated by paragraph 6C(4) and upon notice
as provided below, offer to prepay the principal amount of the Notes required
by such paragraph (the "Noteholders' Share"), at 100% of the principal amount
so prepaid, plus interest thereon to the prepayment date. Any such offer
shall be in writing and shall provide each holder of Notes with sufficient
information to enable it to make an informed decision with respect to such
offer, and shall remain open for 30 Business Days. Each such offer shall
specify the date fixed for prepayment, the Noteholders' Share, and the
interest to be paid on the prepayment date with respect to the Noteholders'
Share. If the holders of more than 5% of the principal amount of the Notes
then outstanding accept such offer (which acceptance shall be irrevocable),
the Company shall promptly notify the remaining holders of such fact and the
expiration date for the acceptance by holders of Notes of such offer shall be
extended by the number of days necessary to give each such remaining holder at
least 15 Business Days from its receipt of such notice to accept such offer
(which acceptance shall be irrevocable). On the date fixed for such
prepayment, the Company shall prepay the principal amount of Notes, the
holders of which have accepted the Company's offer of prepayment, equal to the
lesser of (x) the aggregate outstanding principal amount of such Notes or
(y) the Noteholders' Share. A failure by a holder of Notes to respond to an
offer to prepay made pursuant to this paragraph 4C shall be deemed to
constitute a rejection of such offer by such holder.
4D. Partial Payments Pro Rata. Upon any partial prepayment of the
Notes pursuant to paragraph 4A, the principal amount so prepaid shall be
allocated to all Notes at the time outstanding in proportion to the respective
outstanding principal amounts thereof. Upon any prepayment of Notes pursuant
to paragraph 4C, the principal amount so prepaid shall be allocated to all
Notes held by holders of such Notes who have accepted the Company's offer of
prepayment made pursuant to paragraph 4C at the time outstanding in proportion
to the respective outstanding principal amounts thereof.
4E. Retirement of Notes. The Parent, the Company and the Guarantor
shall not, and shall not permit any of their respective Subsidiaries or
Affiliates to, prepay or otherwise retire in whole or in part prior to their
stated final maturity (other than by prepayment pursuant to paragraph 4A or 4C
or upon acceleration of such final maturity pursuant to paragraph 7A), or
purchase or otherwise acquire, directly or indirectly, Notes held by any
holder.
PARAGRAPH 5. AFFIRMATIVE COVENANTS.
5. Affirmative Covenants. So long as any Note shall remain unpaid,
the Company and the Guarantor each covenants that:
5A. Financial Statements. The Company and the Guarantor will deliver
to each holder of a Note in duplicate:
(i) as soon as practicable and in any event within 45 days after
the end of each quarterly period (other than the last quarterly period)
in each fiscal year, consolidating and consolidated statements of income,
stockholders' equity and cash flows of the Issuer Group for such
quarterly period and for the period from the beginning of the current
fiscal year to the end of such quarterly period, and a consolidating
and consolidated balance sheet of the Issuer Group as at the end of such
quarterly period, setting forth in each case in comparative form figures
for the corresponding period in the preceding fiscal year, all in
reasonable detail and satisfactory in form to the Required Holder(s) and
certified by an authorized financial officer of each of the Parent (if
the Parent is then part of the Issuer Group), the Company and the
Guarantor, subject to changes resulting from year-end adjustments;
provided, however, that delivery pursuant to clause (iii) below of
copies of the Quarterly Report on Form 10-Q of the Parent (if the Parent
is at such time part of the Issuer Group) or of the Company or of the
Guarantor for such quarterly period filed with the Securities and
Exchange Commission shall be deemed to satisfy the requirements of this
clause (i) with respect to consolidated financial statements of the
Parent, the Company and/or the Guarantor, as the case may be, if such
financial statements are included in such report;
(ii) as soon as practicable and in any event within 90 days
after the end of each fiscal year, consolidating and consolidated
statements of income and cash flows and a consolidated and consolidating
statement of stockholders' equity of the Issuer Group for such year, and
a consolidating and consolidated balance sheet of the Issuer Group as at
the end of such year, setting forth in each case in comparative form
corresponding consolidated figures from the preceding annual audit, all
in reasonable detail and satisfactory in form to the Required Holder(s)
and, as to the consolidated statements, reported on by independent public
accountants of recognized national standing selected by the Parent, if
the Parent is then part of the Issuer Group, and otherwise by the
Company and the Guarantor whose report shall be without limitation as to
the scope of the audit and satisfactory in substance to the Required
Holder(s) and, as to the consolidating statements, certified by an
authorized financial officer of each of the Parent (if the Parent is
then part of the Issuer Group), the Company and the Guarantor; provided,
however, that delivery pursuant to clause (iii) below of copies of the
Annual Report on Form 10-K of the Parent (if the Parent is at such time
part of the Issuer Group) or of the Company or of the Guarantor for such
fiscal year filed with the Securities and Exchange Commission shall be
deemed to satisfy the requirements of this clause (ii) with respect to
consolidated financial statements of the Parent, the Company and/or the
Guarantor, as the case may be, if such financial statements are included
in such report;
(iii) promptly upon transmission thereof, copies of all such
financial statements, proxy statements, notices and reports as any
member of the Issuer Group shall send to its public stockholders and
copies of all registration statements (without exhibits) and all reports
which it files with the Securities and Exchange Commission (or any
governmental body or agency succeeding to the functions of the
Securities and Exchange Commission);
(iv) promptly upon receipt thereof, a copy of each other report
submitted to the Company, the Guarantor, the Parent or any of their
respective Subsidiaries by independent accountants in connection with
any annual, interim or special audit made by them of the books of the
Company, the Guarantor, the Parent or any of their respective
Subsidiaries;
(v) as soon as practicable and in any event within five days
after any officer of either the Company or the Guarantor obtaining
knowledge (a) of any condition or event which, in the opinion of
management of the Company or the Guarantor, could reasonably be expected
to have a Material Adverse Effect, (b) that any Person has given any
notice to the Company or the Guarantor or any of their respective
Subsidiaries or taken any other action with respect to a claimed
default or event or condition of the type referred to in paragraph
7A(iii) or (c) of the institution of any litigation or regulatory
proceedings with respect to the Company, the Guarantor or any of their
respective Subsidiaries which could reasonably be expected to have a
Material Adverse Effect, an Officer's Certificate specifying the nature
and period of existence of any such condition or event, or specifying
the notice given or action taken by such Person and the nature of any
such claimed default, event or condition, or specifying the details of
such proceeding or litigation and what action the Company, the Guarantor
or such Subsidiaries has taken, is taking or proposes to take with
respect thereto;
(vi) (a) as soon as possible, and in any event within 30 days
after any officer of either the Company, the Guarantor or any ERISA
Affiliate either knows or has reason to know that any Reportable Event
has occurred that alone or together with any other Reportable Event could
reasonably be expected to result in liability of the Company or the
Guarantor to the PBGC in an aggregate amount exceeding $5,000,000, a
statement of a Responsible Officer setting forth details as to such
Reportable Event and the action proposed to be taken with respect
thereto, together with a copy of the notice, if any, of such Reportable
Event given to the PBGC, (b) promptly after receipt thereof, a copy of
any notice the Company or the Guarantor or any ERISA Affiliate may
receive from the PBGC relating to the intention of the PBGC to terminate
any Plan or Plans (other than a Plan maintained by an ERISA Affiliate
which is considered an ERISA Affiliate only pursuant to subsection (m) or
(o) of Section 414 of the Code) or to appoint a trustee to administer any
Plan or Plans, (c) within 10 days after the due date for filing with the
PBGC pursuant to Section 412(n) of the Code of a notice of failure to
make a required installment or other payment with respect to a Plan, a
statement of a Responsible Officer setting forth details as to such
failure and the action proposed to be taken with respect thereto,
together with a copy of such notice given to the PBGC and (d) promptly
and in any event within 30 days after receipt thereof by the Company or
the Guarantor or any ERISA Affiliate from the sponsor of a Multiemployer
Plan, a copy of each notice received by the Company or the Guarantor or
any ERISA Affiliate concerning (I) the imposition of Withdrawal Liability
or (II) a determination that a Multiemployer Plan is, or is expected to
be, terminated or in reorganization, in each case within the meaning of
Title IV of ERISA;
(vii) promptly following the occurrence thereof, notice of a
Change in Structure together with a description thereof in reasonable
detail; and
(viii) with reasonable promptness, such other information
respecting the condition or operations, financial or otherwise, of the
Company, the Guarantor or any of their respective Subsidiaries as such
holder may reasonably request.
Together with each delivery of financial statements required by clauses (i)
and (ii) above, the Company and the Guarantor will deliver to each holder an
Officer's Certificate demonstrating (with computations in reasonable detail)
compliance by the Issuer Group with the provisions of paragraphs 6A, 6C(1)
6C(3); 6C(4) and 6D and stating that there exists no Event of Default or
Default, or, if any Event of Default or Default exists, specifying the nature
and period of existence thereof and what action the Company or the Guarantor
proposes to take with respect thereto. Together with each delivery of
financial statements required by clause (ii) above, the Company and the
Guarantor will deliver to each holder a certificate of such accountants
stating that, in making the audit necessary for their report on such financial
statements, they have obtained no knowledge of any Event of Default or
Default, or, if they have obtained knowledge of any Event of Default or
Default, specifying the nature and period of existence thereof. Such
accountants, however, shall not be liable to anyone by reason of their failure
to obtain knowledge of any Event of Default or Default which would not be
disclosed in the course of an audit conducted in accordance with generally
accepted auditing standards.
The Company and the Guarantor each also covenant that immediately after
any Responsible Officer obtains knowledge of an Event of Default or Default,
it will deliver to each holder an Officer's Certificate specifying the nature
and period of existence thereof and what action the Company or the Guarantor
proposes to take with respect thereto.
5B. Information Required by Rule 144A. The Company and the Guarantor
will, upon the request of the holder of any Note, provide such holder, and any
qualified institutional buyer designated by such holder, such financial and
other information as such holder may reasonably determine to be necessary in
order to permit compliance with the information requirements of Rule 144A
under the Securities Act in connection with the resale of Notes, except at
such times as the Company is subject to the reporting requirements of section
13 or 15(d) of the Exchange Act. For the purpose of this paragraph 5B, the
term "qualified institutional buyer" shall have the meaning specified in Rule
144A under the Securities Act.
5C. Inspection of Property. The Company and the Guarantor will permit,
and will cause the Parent to permit, any Person designated by the holder of
any Note in writing, at the Company's or the Guarantor's, as appropriate,
expense during the continuance of a Default or Event of Default and otherwise
at such holder's expense, to visit and inspect any of the properties of the
Parent, the Company, the Guarantor and their respective Subsidiaries, to
examine the corporate books and financial records of the Parent, the Company,
the Guarantor and their respective Subsidiaries and make copies thereof or
extracts therefrom and to discuss the affairs, finances and accounts of any of
such entities with the principal officers of the Parent, the Company and the
Guarantor and their independent public accountants, all at such reasonable
times and as often as such holder may reasonably request.
5D. Covenant to Secure Notes Equally. The Company or the Guarantor
will, if the Company, the Guarantor or any of their respective Subsidiaries
shall create or assume any Lien upon any of its property or assets, whether
now owned or hereafter acquired, other than Liens permitted by the provisions
of paragraphs 6A(2) and 6C(1) (unless prior written consent to the creation or
assumption thereof shall have been obtained pursuant to paragraph 12C), make
or cause to be made, in documentation reasonably satisfactory to the Required
Holder(s), effective provision whereby the Notes and the Guarantor's Guarantee
thereof will be secured by such Lien equally and ratably with any and all
other Indebtedness thereby secured so long as any such other Indebtedness
shall be so secured and each holder of Notes shall have received an opinion of
counsel, in form, scope and substance satisfactory to the Required Holder(s),
with respect to the foregoing and as to such other matters as the Required
Holder(s) may reasonably request.
5E. Assets of the Company and the Guarantor. The Company and the
Guarantor each covenants that substantially all the operating assets owned and
operations conducted by the Company or the Guarantor directly or through their
respective Subsidiaries on the Date of Closing will, at all times, continue to
be owned and conducted directly by the Company, the Guarantor or one or more
of their respective Subsidiaries (or a Person acquiring all or substantially
all the assets of any such entity or as a result of asset sales, in each case
pursuant to a transaction permitted by paragraph 6C(2)) except as the result
of asset sales permitted by paragraph 6C(4).
5F. Company and Guarantor Consolidated. The Company and the Guarantor
will take all actions and fulfill all requirements pursuant to generally
accepted accounting principles in order that the financial conditions, results
of operations, cash flows and stockholders' equity of the Company, the
Guarantor and their respective Subsidiaries will be consolidated in accordance
with generally accepted accounting principles.
5G. Compliance with Law. The Company and the Guarantor will and will
cause each of their respective Subsidiaries to comply with all laws,
ordinances or governmental rules or regulations to which each of them is
subject, and will obtain and maintain in effect all licenses, certificates,
permits, franchises and other governmental authorizations necessary to the
ownership of their respective properties or to the conduct of their respective
businesses, in each case to the extent necessary to ensure that noncompliance
with such laws, ordinances or governmental rules or regulations or failures to
obtain or maintain in effect such licenses, certificates, permits, franchises
and other governmental authorizations would not, individually or in the
aggregate, have a Material Adverse Effect.
5H. Insurance. The Company and the Guarantor will and will cause each
of their respective Subsidiaries to maintain, with financially sound and
reputable insurers, insurance with respect to their respective properties and
businesses against such casualties and contingencies, of such types, on such
terms and in such amounts (including deductibles, co-insurance and self-
insurance, if adequate reserves are maintained with respect thereto) as is
customary in the case of entities of established reputations engaged in the
same or a similar business and similarly situated.
5I. Maintenance of Properties. The Company and the Guarantor will and
will cause each of their respective Subsidiaries to maintain and keep, or
cause to be maintained and kept, their respective properties in good repair,
working order and condition (other than ordinary wear and tear), so that the
business carried on in connection therewith may be properly conducted at all
times, provided, that this paragraph 5I shall not prevent the Company, the
Guarantor or any of their respective Subsidiaries from discontinuing the
operation and the maintenance of any of its properties if such discontinuance
is desirable in the conduct of its business and the Company or the Guarantor
has concluded that such discontinuance would not, individually or in the
aggregate, have a Material Adverse Effect.
5J. Payment of Taxes. The Company and the Guarantor will and will
cause each of their respective Subsidiaries to file all income tax or similar
tax returns required to be filed in any jurisdiction and to pay and discharge
all taxes shown to be due and payable on such returns and all other taxes,
assessments, governmental charges, or levies payable by any of them, to the
extent such taxes and assessments have become due and payable and before they
have become delinquent, provided, that neither the Company, the Guarantor, nor
any of their respective Subsidiaries need pay any such tax or assessment if
(i) the amount, applicability or validity thereof is contested by the Company,
the Guarantor or such Subsidiary on a timely basis in good faith and in
appropriate proceedings, and the Company, the Guarantor or such Subsidiary has
established adequate reserves therefor in accordance with generally accepted
accounting principles on the books of the Company, the Guarantor or such
Subsidiary or (ii) the nonpayment of all such taxes and assessments in the
aggregate could not reasonably be expected to have a Material Adverse Effect.
5K. Corporate Existence, etc. The Company and the Guarantor will at
all times preserve and keep in full force and effect its corporate existence,
except as otherwise expressly permitted under paragraph 6C(2). Subject to
paragraph 6C(2), the Company and the Guarantor will at all times preserve and
keep in full force and effect the corporate existence of each of their
respective Subsidiaries and all rights and franchises of the Company, the
Guarantor and their respective Subsidiaries unless, in the good faith judgment
of the Company or the Guarantor, as applicable, the termination of or failure
to preserve and keep in full force and effect such corporate existence, right
or franchise could not, individually or in the aggregate, have a Material
Adverse Effect.
PARAGRAPH 6. NEGATIVE COVENANTS.
6. Negative Covenants. So long as any Note shall remain unpaid the
Company and the Guarantor each covenants that:
6A. Financial Covenants.
6A(1). Incurrence of Funded Debt. Neither the Company nor the
Guarantor will, nor will the Company or the Guarantor permit any of
their respective Subsidiaries to, directly or indirectly, create, incur,
assume, guarantee, or otherwise become directly or indirectly liable with
respect to, any Funded Debt, unless on the date the Company, the
Guarantor or such Subsidiary becomes liable with respect to any such
Funded Debt and immediately after giving effect thereto Consolidated
Funded Debt does not exceed 60% of Consolidated Total Capitalization.
For the purposes of this paragraph 6A(1), any Person becoming a Subsidiary of
the Company or the Guarantor after the date hereof, and any Successor
Corporation, shall be deemed, at the time it becomes a Subsidiary of the
Company or the Guarantor or becomes a Successor Corporation, as the case may
be, to have incurred all of its then outstanding Funded Debt, and any Person
extending, renewing or refunding any Indebtedness shall be deemed to have
incurred such Indebtedness at the time of such extension, renewal or
refunding.
6A(2). Priority Debt. Notwithstanding any Liens that would be
permitted by paragraph 6C(1) but for the provisions of this paragraph
6A(2), neither the Company nor the Guarantor will permit at any time
the sum of, without duplication, Indebtedness of Subsidiaries of the
Company and the Guarantor (other than Indebtedness owed to the Company
by any Subsidiary of the Company or the Guarantor or to the Guarantor
by any Subsidiary of the Guarantor) plus Indebtedness secured by Liens
permitted by clauses (ii), (iii), (vi), (viii) and (ix) of paragraph
6C(1) to exceed 25% of Consolidated Total Assets. In addition, neither
the Company nor the Guarantor will permit, at any time, the sum of
Indebtedness of Subsidiaries of the Company and the Guarantor (other than
Indebtedness owed to the Company by any Subsidiary of the Company or the
Guarantor or to the Guarantor by any Subsidiary of the Guarantor) plus,
without duplication, Indebtedness secured by Liens pursuant to clause
(ix) of paragraph 6C(1) to exceed 10% of Consolidated Total Assets.
6A(3). Consolidated Net Worth. Neither the Company nor the
Guarantor will permit Consolidated Net Worth as of the end of any fiscal
quarter to be less than the sum of (i) $400,000,000 plus (ii) 25% of
Consolidated Net Income (if positive) of the Issuer Group for the period
(taken as a single accounting period) commencing with the fiscal quarter
beginning on May 31, 1998 and ending on the last date as to which
compliance with this covenant is being determined.
6A(4). Interest Coverage Ratio. Neither the Company nor the
Guarantor will permit the ratio of Consolidated Earnings Available for
Interest Expense to Consolidated Interest Expense, for the four fiscal
quarters most recently ended, to be less than 2.00 to 1.00.
6B. Indebtedness of the Guarantor. In addition to the
restrictions set forth in paragraph 6A(1), the Guarantor will not,
directly or indirectly, create, incur, assume, guarantee, permit to
exist or otherwise become directly or indirectly liable with respect to
any Indebtedness other than (i) Guarantees in respect of the Notes, (ii)
the Guarantee in respect of the MILP-8 Notes so long as MILP-8 or any
other holder of the MILP-8 Notes is subject to the Sharing Agreement,
(iii) the Guarantee in respect of the Credit Agreement so long as Banks
whose Pro Rata Shares (as such term is defined in the Credit Agreement),
in the aggregate, are greater than 90% are subject to the Sharing
Agreement, (iv) subject to paragraph 6F, Guarantees in respect of any
credit facility that renews, extends or replaces the Credit Agreement as
long as each lender under such credit facility is subject to the Sharing
Agreement and (v) Indebtedness to the Company in an amount equal to or
less than $25,000,000.
6C. Liens and Other Restrictions. Neither the Company nor the
Guarantor will, nor will they permit any of their respective
Subsidiaries to:
6C(1). Liens. Create, assume or suffer to exist any Lien
upon any of its respective properties or assets, whether now owned
or hereafter acquired (whether or not provision is made for the
equal and ratable securing of the Notes and the Guarantor's
Guarantee hereunder in accordance with the provisions of paragraph
5D), except (but in each case, other than clauses (iv), (v) and
(vii), subject to the restrictions set forth as to Indebtedness,
and, implicitly, the Liens that secure such Indebtedness, in
paragraph 6A(2)):
(i) Liens, on property of the Company, the
Guarantor and their respective Subsidiaries outstanding on
the Date of Closing, described in Schedule 8D attached
hereto;
(ii) any Lien created to secure all or any part
of the purchase price, or to secure Indebtedness incurred
or assumed to pay all or any part of the purchase price, of
property acquired by the Company, the Guarantor or any of
their respective Subsidiaries after the Date of Closing,
provided, that (a) any such Lien shall be confined solely
to the item or items of property so acquired and, if
required by the terms of the instrument originally creating
such Lien, other property or the proceeds thereof which is
an improvement to or is acquired for specific use in
connection with such acquired property and (b) the
Indebtedness secured by such Lien shall in no event be
greater than the lesser of the cost or the Fair Market Value
(at the time of acquisition) of the property encumbered by
such Lien;
(iii) Liens existing on any property or assets of
any corporation at the time it becomes a Subsidiary, or
existing prior to the time of acquisition upon any property
acquired by the Company, the Guarantor or any of their
respective Subsidiaries through purchase, merger or
consolidation or otherwise, whether or not assumed by the
Company, the Guarantor or such Subsidiary, provided that (a)
no such Lien shall have been created or assumed in
contemplation of such Person becoming a Subsidiary or in
contemplation of such acquisition, as the case may be, and
(b) any such Lien shall not encumber any other property of
the Company, the Guarantor or such Subsidiary;
(iv) Liens for taxes, assessments and other
governmental charges or levies not yet due or which (if
foreclosure, distraint, sale or other similar proceedings
have not commenced or, if commenced, have been stayed) are
being contested in good faith and by appropriate proceedings
and adequate reserves for which are maintained on the books
of the Company, the Guarantor or their respective
Subsidiaries, as applicable, in conformity with generally
accepted accounting principles;
(v) statutory Liens incidental to the conduct of
business or the ownership of properties of the Company, the
Guarantor and their respective Subsidiaries (including Liens
in connection with worker's compensation, unemployment
insurance and other like laws (other than ERISA Liens),
warehousemen's and mechanics' liens and statutory landlords'
liens) and Liens to secure the performance of bids, tenders
or purchase, construction or sales contracts, or to secure
statutory obligations or other Liens of like general nature
which in each case are incurred in the ordinary course of
business and not in connection with the borrowing of money,
the obtaining of advances or credit or the payment of the
deferred purchase price of property and which do not in any
event materially impair the value or use of the property
encumbered thereby in the operation of the business of the
Company, the Guarantor and their respective Subsidiaries;
provided in each case, that the obligation secured is either
not overdue or being contested in good faith and by
appropriate proceedings;
(vi) any attachment or judgment Lien securing
judgments not exceeding $5,000,000 in the aggregate, unless
the judgment it secures shall not, within 30 days after the
entry thereof, have been discharged or execution thereof
stayed pending appeal, or shall not have been discharged
within 30 days after the expiration of any such stay;
(vii) easements, rights-of-way, restrictions and
other similar encumbrances incurred in the ordinary course
of business which, in the aggregate, are not substantial in
amount and which do not in any case materially detract from
the value of the property subject thereto or materially
interfere with the use of such encumbered property;
(viii) any Lien renewing, extending or refunding
any Lien permitted by clauses (i), (ii) and (iii) of this
paragraph 6C(1), provided, that (a) the principal amount of
Indebtedness secured by such Lien immediately prior to such
extension, renewal or refunding is not increased or the
maturity thereof reduced, (b) such Lien is not extended to
any other property, and (c) immediately after such
extension, renewal or refunding no Default or Event of
Default would exist; and
(ix) other Liens not otherwise permitted by
clauses (i) through (viii) of this paragraph 6C(1) provided,
that the sum of the aggregate amount of the Indebtedness
secured thereby plus, without duplication, Indebtedness of
Subsidiaries of the Company and the Guarantor (other than
Indebtedness owed to the Company by any Subsidiary of the
Company or the Guarantor or to the Guarantor by any
Subsidiary of the Guarantor) at no time shall exceed 10% of
Consolidated Total Assets and, provided, further, that such
Liens permitted by this clause (ix) shall not encumber any
Current Assets of the Company, the Guarantor or any of their
respective Subsidiaries.
6C(2). Merger, Consolidation, etc. Consolidate with or
merge with any other Person or convey, transfer or lease all or
substantially all of its assets in a single transaction or series
of transactions to any Person (except that a Subsidiary of the
Company or the Guarantor may (i) consolidate with or merge with, or
convey, transfer or lease all or substantially all of its assets in
a single transaction or series of transactions to, the Company, the
Guarantor or a Wholly Owned Subsidiary and (ii) convey, transfer or
lease all or substantially all of its assets in compliance with the
provisions of paragraph 6C(4)), provided, that the foregoing
restriction does not apply to the consolidation or merger of the
Company or the Guarantor with, or the conveyance, transfer or lease
of all or substantially all of the assets of the Company or the
Guarantor in a single transaction or series of transactions to, any
Person so long as:
(a) the successor formed by such consolidation
or the survivor of such merger or the Person that
acquires by conveyance, transfer or lease
substantially all of the assets of the Company or
the Guarantor as an entirety, as the case may be
(the "Successor Corporation"), shall be a solvent
corporation organized and existing under the laws
of the United States of America, any State thereof
or the District of Columbia;
(b) if the Company or the Guarantor is not the
Successor Corporation, such corporation shall have
executed and delivered to each holder of Notes its
assumption of the due and punctual performance and
observance of each covenant and condition to be
performed by the Company or the Guarantor, as the
case may be, under this Agreement and the Notes,
pursuant to documentation that is reasonably
satisfactory to the Required Holder(s), and each
holder of Notes shall have received an opinion of
counsel, in form, scope and substance satisfactory
to the Required Holder(s), with respect to such
assumption by such corporation and as to such other
matters as the Required Holder(s) may reasonably
request; and
(c) immediately after giving effect to such
transaction:
(I) no Default or Event of Default would
exist; and
(II) the Successor Corporation would be
permitted by the provisions of paragraph
6A(1) to incur at least $1.00 of additional
Funded Debt owing to a Person other than a
Subsidiary of the Successor Corporation or
another Person whose financial results are
consolidated with those of the Successor
Corporation.
No such conveyance, transfer or lease of all or substantially all
of the assets of the Company or the Guarantor shall have the effect
of releasing the Company or the Guarantor from its liability under
this Agreement or the Notes.
6C(3). Loans, Advances, Investments and Contingent
Liabilities. Make or permit to remain outstanding any loan or
advance to, or extend credit (other than trade credit extended in
the normal course of business to any Person that is not the Parent
or a Subsidiary of the Parent (other than the Company, the
Guarantor, or any of their respective Subsidiaries)) to, or make or
permit to remain outstanding any Guarantee in connection with the
obligations, stock or dividends of, or own, purchase or acquire any
stock, obligations or securities of, or any other interest in, or
make any capital contribution to, any Person (any of the foregoing,
an "Investment"), except that the Company, the Guarantor or any of
their respective Subsidiaries may:
(i) endorse negotiable instruments for
collection in the ordinary course of business, make normal
and reasonable advances in the ordinary course of business
(including loans up to $10,000,000 in the aggregate to
finance purchases from the Parent, the Company or the
Guarantor of equity securities) to officers and employees
and create accounts receivable arising and grant trade
credit in the ordinary course of business and receive any
securities in satisfaction or partial satisfaction thereof
from financially troubled account debtors to the extent
necessary in the judgment of the Company or the Guarantor in
order to prevent or limit loss;
(ii) provide Guarantees with respect to the
Indebtedness of the Company, the Guarantor and their
respective Subsidiaries and any other Subsidiaries of
Parent, provided, that the Indebtedness represented by such
Guarantees is permitted by paragraphs 6A(1), 6A(2) and 6B;
(iii) own, purchase or acquire stock or other
equity interests of a Wholly Owned Subsidiary or of a Person
which immediately after such purchase or acquisition will be
a Wholly Owned Subsidiary or of a Person that is a
Subsidiary on the Date of Closing;
(iv) own, purchase or acquire (a) certificates of
deposit of commercial banks organized under the laws of the
United States or any state thereof (having capital resources
in excess of $250,000,000) due within one year from the date
of purchase and commercial paper rated A-1 by Standard and
Poor's Ratings Group or P-1 by Moody's Investors Service,
Inc. due within 270 days from the date of purchase and, in
each case, payable in the United States in United States
dollars, (b) obligations of the United States Government or
any agency thereof, and obligations guaranteed by the United
States Government, in any case maturing within one year
after the acquisition thereof, and (c) money market mutual
funds that are classified as current assets in accordance
with generally accepted accounting principles and that
invest solely in investments described in clauses (a) and
(b) maturing within one year (or in the case of the money
market mutual funds investing solely in the type of
commercial paper referenced in clause (a), 270 days) after
the acquisition thereof, which funds are managed by Persons
having capital and surplus in excess of $250,000,000;
(v) make intercompany Investments in the Parent
(but only to the extent used to purchase the capital stock
of the Parent pursuant to a stock repurchase program
authorized by the board of directors of the Parent), the
Company or any Subsidiary; provided that no Investment
pursuant to this clause (v) shall consist of the transfer of
any asset other than cash; and
(vi) make or permit to remain outstanding
Investments not otherwise permitted by clauses (i) through
(v) of this paragraph 6C(3) not to exceed, in the aggregate,
10% of Consolidated Net Worth at any time.
6C(4). Limitation on Asset Dispositions.
(i) Except as permitted under paragraph 6C(2),
make or permit to be made in any period of 12 consecutive
fiscal months, commencing with the 12 month period ending
May 29, 1999 any Asset Disposition or series of Asset
Dispositions that, individually or in the aggregate, involve
more than 15% of Consolidated Total Assets as determined on
last day of the fiscal quarter ending most recently prior to
or on the date of such Asset Disposition (the "Trigger
Amount"); provided, that there shall be excluded from the
Trigger Amount for purposes of this paragraph 6C(4) each
Asset Disposition with respect to which either (a) the
Company, the Guarantor or the Subsidiary of either of them
that disposed of such assets, as the case may be, applies
the proceeds within 365 days after such Asset Disposition to
an investment in properties, of comparable worth and purpose
in the business of the Company or any of its Subsidiaries,
that replace the properties that were the subject of such
Asset Disposition ("Replacement Assets"), so long as the
Company or the Guarantor has notified the holders in writing
within 270 days after such Asset Disposition that it has
determined to apply the proceeds from such Asset Disposition
to an investment in Replacement Assets, or (b) the proceeds
therefrom are used by the Company to offer to make
prepayments in respect of the Notes and Pari Passu
Indebtedness, as provided below (any proceeds described in
this clause (b) being referred to as "Excess Proceeds").
(ii) The Company, pursuant to paragraph 4C and
not later than the end of the 365-day period described in
clause (i) of paragraph 6C(4), shall use all Excess Proceeds
(or such lesser amount as is needed) to make the prepayment
in respect of those Notes as to which the holders have
accepted the Company's offer of prepayment under paragraph
4C and, on a pro rata basis (according to the respective
principal amounts of all Notes and all Pari Passu
Indebtedness then outstanding) with such Notes, all then
outstanding Pari Passu Indebtedness as to which the holder
thereof also requires a prepayment of principal in such
circumstances, in an aggregate principal amount of such
Notes and any such Pari Passu Indebtedness, rounded to the
multiple of $1,000 nearest to the aggregate amount of such
Excess Proceeds.
(iii) The Company and the Guarantor will not, and
will not permit any of their respective Subsidiaries to,
enter into or suffer to exist any agreement that would place
any restriction of any kind (other than pursuant to law or
regulation) on the ability of the Company to make the
mandatory offer of prepayment (or any prepayments pursuant
thereto) in respect of the Notes required by clause (i) of
this paragraph 6C(4).
6C(5). Limitation on Sale-Leaseback Transactions. Enter
into any Sale-Leaseback Transaction.
6D. Nature of Business. The Company and the Guarantor
will not and will not permit any of their respective Subsidiaries
to fail to maintain and operate substantially similar lines of
business as those in which each is engaged on the Date of Closing,
provided, that at no time shall more than 20% of Consolidated Net
Income be attributable to any business or businesses that are
substantially different from the business in which the Company and
the Guarantor are respectively engaged as of the Date of Closing.
6E. Transactions with Affiliates. The Company and the
Guarantor will not and will not permit any of their respect
Subsidiaries to enter into directly or indirectly any Material
transaction or Material group of related transactions (including
without limitation the purchase, lease, sale or exchange of
properties of any kind or the rendering of any service) with any
Affiliate, except pursuant to the reasonable requirements of the
Company's, the Guarantor's or such Subsidiary's business and upon
fair and reasonable terms no less favorable to the Company, the
Guarantor or such Subsidiary than would be obtainable in a
comparable arm's-length transaction with a Person not an Affiliate.
6F. Bank Facility. Neither the Company nor the
Guarantor will enter into any renewal, extension or replacement of
the Credit Agreement or any Guarantee with respect thereto unless
each lender under the Credit Agreement (as so renewed or extended)
or such credit facility that is a replacement thereof has executed
and delivered to the holders of the Notes the Sharing Agreement.
6G. Amendments to and Refinancings of Credit Agreement.
The Company will not amend, modify or otherwise change any negative
covenant in the Credit Agreement (or defined term used in such
negative covenant) so as to make the provisions thereof more
restrictive than the corresponding provision of this Agreement
unless such corresponding provision or defined term contained
herein shall simultaneously be amended in a like manner. The
Company will not enter into any extension, renewal, refunding,
replacement or refinancing of the Credit Agreement if any negative
covenant therein (or defined term used in such negative covenant)
is more restrictive than the corresponding provision of this
Agreement unless such corresponding provision or defined term
contained herein shall simultaneously be amended in a like manner.
PARAGRAPH 7. EVENTS OF DEFAULT.
7A. Acceleration. If any of the following events shall occur
and be continuing for any reason whatsoever (and whether such occurrence
shall be voluntary or involuntary or come about or be effected by operation
of law or otherwise):
(i) the Company defaults in the payment of any
principal of or Yield-Maintenance Amount payable with respect to
any Note when the same shall become due, either by the terms
thereof or otherwise as herein provided; or
(ii) the Company defaults in the payment of any interest
on any Note for more than 5 days after the date due; or
(iii) the Company, the Guarantor or any of their
respective Subsidiaries defaults (whether as primary obligor or as
guarantor or other surety) in any payment of principal of or
interest on any other obligation for money borrowed (or any
Capitalized Lease Obligation, any obligation under a conditional
sale or other title retention agreement, any obligation issued or
assumed as full or partial payment for property whether or not
secured by a purchase money mortgage or any obligation under notes
payable or drafts accepted representing extensions of credit)
beyond any period of grace provided with respect thereto, or
the Company, the Guarantor or any of their respective Subsidiaries
fails to perform or observe any other agreement, term or condition
contained in any agreement under which any such obligation is
created (or if any other event thereunder or under any such
agreement shall occur and be continuing) and the effect of such
failure or other event is to cause, or to permit the holder or
holders of such obligation (or a trustee on behalf of such holder
or holders) to cause, such obligation to become due (or to be
repurchased by the Company, the Guarantor or any such Subsidiary)
prior to any stated maturity, provided that the aggregate amount of
all obligations as to which such a payment default shall occur and
be continuing or such a failure or other event causing or
permitting acceleration (or resale to the Company, the Guarantor or
any such Subsidiary) shall occur and be continuing exceeds
$5,000,000; or
(iv) any representation or warranty made by the Company
or the Guarantor herein or by the Company, the Guarantor or the
Parent or any of their respective officers in any writing furnished
in connection with or pursuant to this Agreement shall be false in
any material respect on the date as of which made; or
(v) (a) the Company or the Guarantor fails to perform
or observe any term, covenant or agreement contained in (x) the
last sentence of paragraph 5A, (y) paragraph 5F or (z) paragraph 6
(other than paragraphs 6C(1), 6C(3), 6E or 6G) or (b) the Company
or the Guarantor fails to perform or observe any term, covenant or
agreement contained in paragraphs 6C(1) (but only if such failure
involves impermissible Indebtedness in an amount in excess of
$1,000,000), 6C(3) (but only if such failure involves impermissible
Investments in an amount in excess of $1,000,000) or 6E and such
failure shall not be remedied within 10 days; or
(vi) the Company or the Guarantor fails to perform or
observe any other agreement, covenant, term or condition contained
herein and such failure shall not be remedied within 30 days after
the earlier of (a) any Responsible Officer obtaining actual
knowledge thereof or (b) the Company receiving written notice of
such default from any holder of a Note; or
(vii) the Parent, the Company, the Guarantor or any of
their respective Subsidiaries makes an assignment for the benefit
of creditors or is generally not paying its debts as such debts
become due; or
(viii) any decree or order for relief in respect of the
Parent, the Company, the Guarantor or any of their respective
Subsidiaries is entered under any bankruptcy, reorganization,
compromise, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law, whether now or hereafter
in effect (the "Bankruptcy Law"), of any jurisdiction; or
(ix) the Parent, the Company, the Guarantor or any of
their respective Subsidiaries petitions or applies to any tribunal
for, or consents to, the appointment of, or taking possession by, a
trustee, receiver, custodian, liquidator or similar official of the
Parent, the Company, the Guarantor or any of their respective
Subsidiaries, or of any substantial part of the assets of the
Parent, the Company, the Guarantor or any of their respective
Subsidiaries, or commences a voluntary case under the Bankruptcy
Law of the United States or any proceedings (other than proceedings
for the voluntary liquidation and dissolution of a Subsidiary)
relating to the Parent, the Company, the Guarantor or any of their
respective Subsidiaries under the Bankruptcy Law of any other
jurisdiction; or
(x) any such petition or application is filed, or any
such proceedings are commenced, against the Parent, the Company,
the Guarantor or any of their respective Subsidiaries and the
Parent, the Company, the Guarantor or such Subsidiary by any act
indicates its approval thereof, consent thereto or acquiescence
therein, or an order, judgment or decree is entered appointing any
such trustee, receiver, custodian, liquidator or similar official,
or approving the petition in any such proceedings, and such order,
judgment or decree remains unstayed and in effect for more than 60
days; or
(xi) any order, judgment or decree is entered in any
proceedings against the Company or the Guarantor decreeing the
dissolution of the Company or the Guarantor and such order,
judgment or decree remains unstayed and in effect for more than 60
days; or
(xii) any order, judgment or decree is entered in any
proceedings against the Company, the Guarantor or any of their
respective Subsidiaries decreeing a split-up of the Company, the
Guarantor or such Subsidiary which requires the divestiture of
assets representing a substantial part, or the divestiture of the
stock of a Subsidiary of the Company or the Guarantor whose assets
represent a substantial part, of the consolidated assets of the
Company or the Guarantor, as applicable, and their respective
Subsidiaries (determined in accordance with generally accepted
accounting principles) or which requires the divestiture of assets,
or stock of a Subsidiary, which shall have contributed a
substantial part of the consolidated net income of the Company or
the Guarantor, as applicable, and their respective Subsidiaries
(determined in accordance with generally accepted accounting
principles) for any of the three fiscal years then most recently
ended, and such order, judgment or decree remains unstayed and in
effect for more than 60 days; or.
(xiii) any judgment or order, or series of judgments or
orders in an amount in excess of $5,000,000 is rendered against the
Company, the Guarantor or any of their respective Subsidiaries and
either (i) enforcement proceedings have been commenced by any
creditor upon such judgment or order or (ii) within 60 days after
entry thereof, such judgment is not discharged or execution thereof
stayed pending appeal, or within 60 days after the expiration of
any such stay, such judgment is not discharged; or
(xiv) the Company, the Guarantor or any ERISA Affiliate,
in its capacity as an employer under a Multiemployer Plan, makes a
complete or partial withdrawal from such Multiemployer Plan
resulting in the incurrence by such withdrawing employer of a
withdrawal liability in an amount exceeding $5,000,000; or
(xv) with respect to the guaranty of the Guarantor set
forth in paragraph 10, the Guarantor shall fail to pay any amount
due thereunder with respect to the Notes, or such guaranty shall
become void or unenforceable, or the Guarantor shall repudiate its
obligations thereunder;
then (a) if such event is an Event of Default specified in clause (i) or (ii)
of this paragraph 7A, the holder of any Note (other than the Company, the
Guarantor or any of their respective Subsidiaries or Affiliates) may at its
option, by notice in writing to the Company, declare such Note to be, and such
Note shall thereupon be and become, immediately due and payable at par
together with interest accrued thereon without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Company, (b)
if such event is an Event of Default specified in clause (viii), (ix) or (x)
of this paragraph 7A with respect to the Company or the Guarantor, all of the
Notes at the time outstanding shall automatically become immediately due and
payable together with interest accrued thereon and together with the Yield-
Maintenance Amount, if any, with respect to each Note, without presentment,
demand, protest or notice of any kind, all of which are hereby waived by the
Company and the Guarantor, and (c) if such event is not an Event of Default
specified in clause (viii), (ix) or (x) of this paragraph 7A with respect to
the Company or the Guarantor, the Required Holder(s) (and not merely the
holder of any Note unless such holder constitutes the Required Holder(s)) may
at its or their option, by notice in writing to the Company, declare all of
the Notes to be, and all of the Notes shall thereupon be and become,
immediately due and payable together with interest accrued thereon and
together with the Yield-Maintenance Amount, if any, with respect to each Note,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Company and the Guarantor.
The Company and the Guarantor acknowledge, and the parties hereto
agree, that each holder of a Note has the right to maintain its
investment in the Notes free from repayment by the Company or the
Guarantor (except as herein specifically provided for) and that the
provision for payment of the Yield-Maintenance Amount by the Company
in the event that the Notes are prepaid pursuant to paragraph 4A or
are accelerated as a result of an Event of Default, is intended to
provide compensation for the deprivation of such right under such
circumstances.
7B. Rescission of Acceleration. At any time after any or all of the
Notes shall have been declared immediately due and payable pursuant to
paragraph 7A, the Required Holder(s) may, by notice in writing to the Company,
rescind and annul such declaration and its consequences if (i) the Company
shall have paid all overdue interest on the Notes, the principal of and Yield-
Maintenance Amount, if any, payable with respect to any Notes which have
become due otherwise than by reason of such declaration, and interest on such
overdue interest and overdue principal and Yield-Maintenance Amount at the
rate specified in the Notes, (ii) the Company or the Guarantor shall not have
paid any amounts which have become due solely by reason of such declaration,
(iii) all Events of Default and Defaults, other than non-payment of amounts
which have become due solely by reason of such declaration, shall have been
cured or waived pursuant to paragraph 12C, and (iv) no judgment or decree
shall have been entered for the payment of any amounts due pursuant to the
Notes or this Agreement. No such rescission or annulment shall extend to or
affect any subsequent Event of Default or Default or impair any right arising
therefrom.
7C. Notice of Acceleration or Rescission. Whenever any Note shall be
declared immediately due and payable pursuant to paragraph 7A or any such
declaration shall be rescinded and annulled pursuant to paragraph 7B, the
Company shall forthwith give written notice thereof to the holder of each Note
at the time outstanding.
7D. Other Remedies. If any Event of Default or Default shall occur
and be continuing, the holder of any Note may proceed to protect and enforce
its rights under this Agreement and such Note by exercising such remedies as
are available to such holder in respect thereof under applicable law, either
by suit in equity or by action at law, or both, whether for specific
performance of any covenant or other agreement contained in this Agreement or
in aid of the exercise of any power granted in this Agreement. No remedy
conferred in this Agreement upon the holder of any Note is intended to be
exclusive of any other remedy, and each and every such remedy shall be
cumulative and shall be in addition to every other remedy conferred herein or
now or hereafter existing at law or in equity or by statute or otherwise.
PARAGRAPH 8. REPRESENTATIONS, COVENANTS AND WARRANTIES.
8. Representations, Covenants and Warranties. The Company and the
Guarantor each represents, covenants and warrants as follows:
8A. Organization. Schedule 8A is a complete and correct list of the
Company's and the Guarantor's Subsidiaries, showing, as to each Subsidiary,
the correct name thereof, the jurisdiction of its organization, and the
percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company, the Guarantor and each of their
respective Subsidiaries and such corporate structure has not changed since the
delivery of the most recent financial statements referred to in paragraph 8B,
except in connection with the Drake Acquisition and the creation of the
Guarantor and the dividend by the Company of the Guarantor's stock to the
Parent. The Company is a corporation duly organized and validly existing in
good standing under the laws of the State of Delaware and each Subsidiary of
the Company is a corporation duly organized and existing in good standing
under the laws of the jurisdiction in which it is incorporated. The Guarantor
is a corporation duly organized and validly existing in good standing under
the laws of the State of Delaware and each Subsidiary of the Guarantor is a
corporation duly organized and existing in good standing under the laws of the
jurisdiction in which it is incorporated. The Parent has no Subsidiaries
other than the Company and the Guarantor and their respective Subsidiaries.
The execution, delivery and performance by the Company of this Agreement and
the Notes are within the Company's corporate powers and have been duly
authorized by all necessary corporate action. The execution, delivery and
performance by the Guarantor of this Agreement are within the Guarantor's
corporate powers and have been duly authorized by all necessary corporate
action.
8B. Financial Statements. The Company has furnished each Purchaser
with the following financial statements, identified by a principal financial
officer of each of the Company and the Parent: a consolidated balance sheet
of the Parent and its Subsidiaries as at the last day in each of the fiscal
years 1996 to 1998, inclusive, and consolidated statements of income,
stockholders' equity and cash flows of the Parent and its Subsidiaries for
each such fiscal year, all reported on by Deloitte & Touche LLP. Such
financial statements (including any related schedules and/or notes) are true
and correct in all material respects, have been prepared in accordance with
generally accepted accounting principles consistently followed throughout the
periods involved and show all liabilities, direct and contingent, of the
Parent and its Subsidiaries required to be shown in accordance with such
principles. The balance sheets fairly present the condition of the Parent and
its Subsidiaries as at the dates thereof, and the statements of income,
stockholders' equity and cash flows fairly present the results of the
operations of the Parent and its Subsidiaries and their cash flows for the
periods indicated. No event has occurred, and no condition has arisen, in
each case since May 30, 1998 that could reasonably be expected to cause a
Material Adverse Effect.
8C. Actions Pending. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Company or the Guarantor,
threatened against the Parent, the Company, the Guarantor or any of their
respective Subsidiaries, or any properties or rights of the Company, the
Guarantor or any of their respective Subsidiaries, by or before any court,
arbitrator or administrative or governmental body which might result in any
Material Adverse Effect. There is no action, suit, investigation or
proceeding pending or threatened against the Parent, the Company, the
Guarantor or any of their respective Subsidiaries which purports to affect the
validity or enforceability of this Agreement or any Note.
8D. Outstanding Indebtedness. Neither the Parent, the Company, the
Guarantor nor any of their respective Subsidiaries has outstanding any
Indebtedness except for the Indebtedness set forth on Schedule 8D. There
exists no default under the provisions of any instrument evidencing such
Indebtedness or of any agreement relating thereto.
8E. Title to Properties. The Company, the Guarantor and each of
their respective Subsidiaries has good and indefeasible title to its
respective real properties (other than properties which it leases) and good
title to all of its other respective properties and assets, including the
properties and assets reflected in the balance sheet as at May 30, 1998
referred to in paragraph 8B (other than properties and assets disposed of in
the ordinary course of business), subject to no Lien of any kind except Liens
permitted by paragraphs 6A(2) and 6C(1). All leases necessary in any material
respect for the conduct of the respective business of the Company, the
Guarantor and their respective Subsidiaries are valid and subsisting and are
in full force and effect.
8F. Taxes. The Parent, the Company, the Guarantor and each of their
respective Subsidiaries has filed all federal, state and other income tax
returns which, to the knowledge of the officers of the Company, are required
to be filed, and each has paid all taxes as shown on such returns and on all
assessments received by it and all other taxes to the extent that such taxes
have become due, except such taxes as are being contested in good faith by
appropriate proceedings and for which adequate reserves have been established
in accordance with generally accepted accounting principles.
8G. Conflicting Agreements and Other Matters. Neither the Parent,
the Company, the Guarantor nor any of their respective Subsidiaries is a party
to any contract or agreement or subject to any charter or other corporate
restriction which could reasonably be expected to cause a Material Adverse
Effect. Neither the execution nor delivery of this Agreement or the Notes,
nor the offering, issuance and sale of the Notes, nor fulfillment of nor
compliance with the terms and provisions hereof and of the Notes will conflict
with, or result in a breach of the terms, conditions or provisions of, or
constitute a default under, or result in any violation of, or result in the
creation of any Lien upon any of the properties or assets of the Company, the
Guarantor or any of their respective Subsidiaries pursuant to, the charter or
bylaws of the Company, the Guarantor or any of their respective Subsidiaries,
any award of any arbitrator or any agreement (including any agreement with
stockholders), instrument, order, judgment, decree, statute, law, rule or
regulation to which the Company, the Guarantor or any of their respective
Subsidiaries is subject. Neither the Company, the Guarantor nor any of their
respective Subsidiaries is a party to, or otherwise subject to any provision
contained in, any instrument evidencing Indebtedness of the Company, the
Guarantor or such Subsidiary or any agreement relating thereto or any other
contract or agreement (including its charter) which limits the amount of, or
otherwise imposes restrictions on the incurring of, Indebtedness of the
Company of the type to be evidenced by the Notes, and the Guarantee by the
Guarantor in respect thereof, except as set forth in the agreements listed in
Schedule 8G attached hereto.
8H. Offering of Notes. Neither the Company, the Guarantor nor any
agent acting on behalf of either of them has, directly or indirectly, offered
the Notes or any similar security of the Company or the Guarantor for sale to,
or solicited any offers to buy the Notes or any similar security of the
Company or the Guarantor from, or otherwise approached or negotiated with
respect thereto with, any Person other than the Purchasers and 50 other
institutional investors, and neither the Company, the Guarantor nor any agent
acting on behalf of either of them has taken or will take any action which
would subject the issuance or sale of the Notes to the provisions of section 5
of the Securities Act or to the provisions of any securities or Blue Sky law
of any applicable jurisdiction.
8I. Use of Proceeds. Neither the Parent, the Company, the Guarantor
nor any of their respective Subsidiaries owns or has any present intention of
acquiring any "margin stock" as defined in Regulation U (12 CFR Part 221) of
the Board of Governors of the Federal Reserve System ("margin stock"). The
proceeds of sale of the Notes will be used to repay existing Indebtedness of
the Company and to finance future acquisitions. None of such proceeds will be
used, directly or indirectly, for the purpose, whether immediate, incidental
or ultimate, of purchasing or carrying any margin stock or for the purpose of
maintaining, reducing or retiring any Indebtedness which was originally
incurred to purchase or carry any stock that is currently a margin stock or
for any other purpose which might constitute this transaction a "purpose
credit" within the meaning of such Regulation U. Neither the Parent, the
Company, the Guarantor nor any agent acting on behalf of any of them has taken
or will take any action which might cause this Agreement or the Notes to
violate Regulation U or any other regulation of the Board of Governors of the
Federal Reserve System or to violate the Exchange Act, in each case as in
effect now or as the same may hereafter be in effect.
8J. ERISA. No accumulated funding deficiency (as defined in section
302 of ERISA and section 412 of the Code), whether or not waived, exists with
respect to any Plan (other than a Multiemployer Plan). No liability to the
PBGC has been or is expected by the Company, the Guarantor, any of their
respective Subsidiaries or any ERISA Affiliate to be incurred with respect to
any Plan (other than a Multiemployer Plan) by the Company, the Guarantor or
any ERISA Affiliate which is or could reasonably be expected to be a Material
Adverse Effect. Neither the Company, the Guarantor, any of their respective
Subsidiaries nor any ERISA Affiliate has incurred or presently expects to
incur any withdrawal liability under Title IV of ERISA with respect to any
Multiemployer Plan which is or could reasonably be expected to be a Material
Adverse Effect. The execution and delivery of this Agreement and the issuance
and sale of the Notes will be exempt from, or will not involve any transaction
which is subject to, the prohibitions of section 406 of ERISA and will not
involve any transaction in connection with which a penalty could be imposed
under section 502(i) of ERISA or a tax could be imposed pursuant to section
4975 of the Code. The representation by the Company and the Guarantor in the
next preceding sentence is made in reliance upon and subject to the accuracy
of each Purchaser's representation in paragraph 9B.
8K. Governmental Consent. Neither the nature of the Parent, the
Company, the Guarantor or any of their respective Subsidiaries, nor any of
their respective businesses or properties, nor any relationship between the
Parent, the Company, the Guarantor or any of their respective Subsidiaries and
any other Person, nor any circumstance in connection with the offering,
issuance, sale or delivery of the Notes, or the Guarantee in respect thereof
by the Guarantor, is such as to require any authorization, consent, approval,
exemption or other action by or notice to or filing with any court or
administrative or governmental or regulatory body (other than routine filings
after the Date of Closing with the Securities and Exchange Commission and/or
state Blue Sky authorities) in connection with the execution and delivery of
this Agreement, the offering, issuance, sale or delivery of the Notes or
fulfillment of or compliance with the terms and provisions hereof or of the
Notes.
8L. Environmental Compliance. The Company, the Guarantor and their
respective Subsidiaries and all of their respective properties and facilities
have complied at all times and in all respects with all federal, state, local
and regional statutes, laws, ordinances and judicial or administrative orders,
judgments, rulings and regulations relating to protection of the environment
except, in any such case, where failure to comply could not reasonably be
expected to result in a Material Adverse Effect.
8M. Disclosure. Neither this Agreement, the Memorandum nor any other
document, certificate or statement furnished to any Purchaser by or on behalf
of the Company or the Guarantor in connection herewith contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein and therein not misleading.
There is no fact peculiar to the Parent, the Company, the Guarantor or any of
their respective Subsidiaries that constitutes a Material Adverse Effect or in
the future may (so far as the Company or the Guarantor can now foresee) could
reasonably be expected to cause a Material Adverse Effect and which has not
been set forth in this Agreement or in the other documents, certificates and
statements furnished to each Purchaser by or on behalf of the Company prior to
the date hereof in connection with the transactions contemplated hereby. The
financial projections contained in the Memorandum are reasonable based on the
assumptions stated therein and the best information available to the officers
of the Company.
8N. Year 2000 Programming. Any reprogramming required to permit the
proper functioning, in and following the year 2000, of (i) the Company's, the
Guarantor's or any of their respective Subsidiaries' computer systems and (ii)
material equipment containing embedded microchips and the testing of all such
systems and equipment, as so reprogrammed, will be completed by July 1, 1999.
The reasonably foreseeable cost to the Company, the Guarantor and their
respective Subsidiaries of such reprogramming and testing and of the
reasonably foreseeable consequences of the year 2000 to the Company and the
Guarantor will not result in an Event of Default or a Material Adverse Effect.
The Company and the Guarantor have delivered notice to each Purchaser of any
material problems (to the extent of the knowledge of the Company and the
Guarantor) related to the proper functioning in and following the year 2000 of
systems with which the Company, the Guarantor or any of their respective
Subsidiaries interface.
8O. Assets of the Company and the Guarantor. Substantially all of
the assets owned, and operations conducted, by the Parent, directly or
indirectly through its Subsidiaries, have at all times since the creation of
the Guarantor been owned or conducted by the Company, the Guarantor or one or
more of their respective Subsidiaries.
8P. Licenses, Permits, etc. The Company, the Guarantor and their
respective Subsidiaries own or possess all licenses, permits, franchises,
authorizations, patents, copyrights, service marks, trademarks and trade
names, or rights thereto, that are Material, without known conflict with the
rights of others, except for those conflicts that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
8Q. Status Under Certain Statutes. Neither the Company, the
Guarantor nor any of their respective Subsidiaries is subject to regulation
under the Investment Company Act of 1940, as amended, the Public Utility
Holding Company Act of 1935, as amended, the Transportation Acts, as amended,
or the Federal Power Act, as amended.
8R. Solvency of the Company and the Guarantor. Both before and after
giving effect to the transactions contemplated by this Agreement, the issuance
by the Company of the Indebtedness evidenced by the Notes and the application
of the proceeds thereof and the Guarantee of such Indebtedness by the
Guarantor, the Company and the Guarantor are each Solvent.
PARAGRAPH 9. REPRESENTATIONS OF EACH PURCHASER.
9. Representations of Each Purchaser. Each Purchaser represents as
follows:
9A. Nature of Purchase. Such Purchaser is not acquiring the Notes to
be purchased by it hereunder with a view to or for sale in connection with any
distribution thereof within the meaning of the Securities Act, provided, that
the disposition of such Purchaser's property shall at all times be and remain
within its control.
9B. Source of Funds.
At least one of the following statements is an accurate representation
as to each source of funds (a "Source") to be used by such Purchaser to pay
the purchase price of the Notes to be purchased by such Purchaser hereunder:
(a) the Source is an "insurance company general account" (as
the term is defined in PTCE 95-60 (issued July 12, 1995)) in respect of
which the reserves and liabilities (as defined by the annual statement
for life insurance companies approved by the National Association of
Insurance Commissioners (the "NAIC Annual Statement")) for the general
account contract(s) held by or on behalf of any employee benefit plan
together with the amount of the reserves and liabilities for the general
account contract(s) held by or on behalf of any other employee benefit
plans maintained by the same employer (or affiliate thereof as defined
in PTCE 95-60) or by the same employee organization in the general
account do not exceed 10% of the total reserves and liabilities of the
general account (exclusive of separate account liabilities) plus surplus
as set forth in the NAIC Annual Statement filed with such Purchaser's
state of domicile; or
(b) the Source is a separate account that is maintained solely
in connection with such Purchaser's fixed contractual obligations under
which the amounts payable, or credited, to any employee benefit plan (or
its related trust) that has any interest in such separate account or to
any participant or beneficiary of such plan (including any annuitant),
are not affected in any manner by the investment performance of the
separate account; or
(c) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTCE 90-1 (issued January 29,
1990), or (ii) a bank collective investment fund, within the meaning of
PTCE 91-38 (issued July 12, 1991) and, except as such Purchaser has
disclosed to the Company in writing pursuant to this paragraph (c), no
employee benefit plan or group of plans maintained by the same employer
or employee organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective investment fund;
or
(d) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of
Part V of the QPAM Exemption), no employee benefit plan's assets that
are included in such investment fund, when combined with the assets of
all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(1) of
the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client
assets managed by such QPAM, the conditions of Part I(c) and (g) of the
QPAM Exemption are satisfied, neither the QPAM nor a person controlling
or controlled by the QPAM (applying the definition of "control" in
Section V(e) of the QPAM Exemption) owns a 5% or more interest in the
Company and (i) the identity of such QPAM and (ii) the names of all
employee benefit plans whose assets are included in such investment fund
have been disclosed to the Company in writing pursuant to this paragraph
(d); or
(e) the Source is a governmental plan; or
(f) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee benefit
plans, each of which has been identified to the Company in writing
pursuant to this clause (f) of paragraph 9B; or
(g) the Source does not include assets of any employee benefit
plan, other than a plan exempt from the coverage of ERISA.
As used in this paragraph 9B, the terms "employee benefit plan", "governmental
plan", and "separate account" shall have the respective meanings assigned to
such terms in Section 3 of ERISA.
9C. Representations of Each Purchaser to Each Other Purchaser. By
its execution of this Agreement, each Purchaser severally represents and
acknowledges to each other Purchaser that it has, independently and without
reliance upon any other Purchaser and based on the financial statements
referred to in paragraph 8B, the Memorandum and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Purchaser also severally
represents and acknowledges to each other Purchaser that it will,
independently and without reliance upon any other Purchaser and based on such
documents and information as it shall deem appropriate at the time, continue
to make its own credit decisions in taking or not taking action under this
Agreement. The provisions of this paragraph 9C are for the sole benefit of
the Purchasers and are not intended to benefit or to confer any right upon the
Company or any other Person.
PARAGRAPH 10. GUARANTY
10A. The Guaranty. Subject to paragraph 10F, the Guarantor hereby
unconditionally guarantees the full and punctual payment when due (whether at
stated maturity, upon acceleration or otherwise) of (i) the principal of,
Yield-Maintenance Amount, if any, and interest on (including, without
limitation, interest accruing after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like proceeding,
relating to the Company, whether or not a claim for post-filing or post-
petition interest is allowed in such proceeding) and any other amounts due
under the Notes when and as the same shall become due and payable (whether at
stated maturity or by required or optional prepayment or by acceleration or
otherwise) and (ii) all other amounts payable by the Company under this
Agreement, the Notes and the other Note Documents (all of the foregoing,
subject to the provisions of paragraph 10F, being referred to collectively as
the "Guaranteed Obligations"). Upon failure by the Company to pay punctually
any such amount, the Guarantor agrees that it shall forthwith on demand pay
such amount at the place and in the manner specified for the Company to pay
such amount in this Agreement, any Note or other relevant Note Document, as
the case may be. The Guarantor hereby agrees that its obligations under this
paragraph 10 constitute an absolute, irrevocable and unconditional guaranty of
payment and is not a guaranty of collection.
10B. Guaranty Unconditional. Subject to paragraph 10F, the
obligations of the Guarantor hereunder shall be unconditional and absolute
and, without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(i) any extension, renewal, settlement, indulgence,
compromise, waiver or release of or with respect to the Guaranteed
Obligations or any part thereof or any agreement relating thereto, or
with respect to any obligation of any other guarantor of any of the
Guaranteed Obligations, whether (in any such case) by operation of law
or otherwise, or any failure or omission to enforce any right, power or
remedy with respect to the Guaranteed Obligations or any part thereof or
any agreement relating thereto, or with respect to any obligation of any
other guarantor of any of the Guaranteed Obligations;
(ii) any modification or amendment of or supplement to this
Agreement, any Note, or any other Note Document, including, without
limitation, any such amendment which may increase the amount of the
Guaranteed Obligations guaranteed hereby;
(iii) any release, surrender, compromise, settlement, waiver,
subordination or modification, with or without consideration, of any
collateral securing the Guaranteed Obligations or any part thereof, any
other Guarantees with respect to the Guaranteed Obligations or any part
thereof, or any other obligation of any person or entity with respect to
the Guaranteed Obligations or any part thereof, or any nonperfection or
invalidity of any direct or indirect security for the Guaranteed
Obligations;
(iv) any change in the corporate, partnership or other
existence, structure or ownership of the Company or any other guarantor
of any of the Guaranteed Obligations, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Company or any
other guarantor of the Guaranteed Obligations, or any of their
respective assets or any resulting release or discharge of any
obligation of the Company or any other guarantor of any of the
Guaranteed Obligations;
(v) the existence of any claim, setoff or other rights which
the Guarantor may have at any time against the Company, any other
guarantor of any of the Guaranteed Obligations, the holder of any Note
or any other Person, whether in connection herewith or in connection
with any unrelated transactions, provided, that nothing herein shall
prevent the assertion of any such claim by separate suit or compulsory
counterclaim;
(vi) the enforceability or validity of the Guaranteed
Obligations or any part thereof or the genuineness, enforceability or
validity of any agreement relating thereto or with respect to any
collateral securing the Guaranteed Obligations or any part thereof, or
any other invalidity or unenforceability relating to or against the
Company or any other guarantor of any of the Guaranteed Obligations, for
any reason related to this Agreement, the Notes or any other Note
Document, or any provision of applicable law or regulation purporting to
prohibit the payment by the Company, or any other guarantor of the
Guaranteed Obligations, of any of the Guaranteed Obligations;
(vii) the failure of the holder of any Note or of any other
Person to take any steps to perfect and maintain any security interest
in, or to preserve any rights to, any security or collateral for the
Guaranteed Obligations, if any;
(viii) the election by, or on behalf of, any one or more of the
holders of the Notes, in any proceeding instituted under Chapter 11 of
Title 11 of the United States Code (11 U.S.C. 101 et seq.) (the
"Bankruptcy Code"), of the application of Section 1111(b)(2) of the
Bankruptcy Code (if such Section shall be applicable);
(ix) any borrowing or grant of a security interest by the
Company, as debtor-in-possession, under Section 364 of the Bankruptcy
Code;
(x) the disallowance, under Section 502 of the Bankruptcy
Code, of all or any portion of the claims of any of the holders of the
Notes for repayment of all or any part of the Guaranteed Obligations; or
(xi) any other act or omission to act or delay of any kind by
the Company, any other guarantor of the Guaranteed Obligations, any
holder of a Note or any other Person or any other circumstance
whatsoever which might, but for the provisions of this paragraph 10B,
constitute a legal or equitable discharge of the Guarantor's obligations
hereunder.
10C. Discharge Only Upon Payment In Full; Reinstatement In Certain
Circumstances. The Guarantor's obligations hereunder shall remain in full
force and effect until all Guaranteed Obligations shall have been paid in
full. If at any time any payment of the principal of, or interest on, or any
Yield-Maintenance Amount with respect to, any Note or any other amount payable
by the Company or any other party under this Agreement or any other Note
Document is rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy or reorganization of the Company or otherwise, the
Guarantor's obligations hereunder with respect to such payment shall be
reinstated as though such payment had been due but not made at such time.
10D. General Waivers. The Guarantor irrevocably waives acceptance
hereof, presentment, demand or action on delinquency, protest, the benefit of
any statutes of limitations and, to the fullest extent permitted by law, any
notice not provided for herein, as well as any requirement that at any time
any action be taken by any Person against the Company, any other guarantor of
the Guaranteed Obligations, or any other Person.
10E. Subordination; Subordination of Subrogation.
(i) The Guarantor hereby subordinates the payment of any and
all sums, debts, demands, claims, liabilities or causes of action for
which Company may be liable to Guarantor to the indefeasible payment of
the Guaranteed Obligations in full and in cash; provided, that
notwithstanding anything contained in the foregoing to the contrary, the
Company may make payments of principal of and interest on any
Indebtedness (whether scheduled or otherwise) to the Guarantor and the
Guarantor is entitled to receive such payments so long as (a)
the Guarantor shall not have received notice (a "Default Notice") from
the holder of any Note that an Event of Default has occurred and is
continuing under this Agreement, or (b) subsequent to the receipt of a
Default Notice by the Guarantor, the Required Holder(s) have consented
in writing to the making of such payments.
(ii) Until the Guaranteed Obligations have been indefeasibly
paid in full and in cash, the Guarantor (a) shall have no right of
subrogation with respect to such Guaranteed Obligations and (b) waives
any right to enforce any remedy which the holders of the Notes now have
or may hereafter have against the Company, any endorser or any guarantor
of all or any part of the Guaranteed Obligations or any other Person,
and the Guarantor waives any benefit of, and any right to participate
in, any security or collateral given to the holders of the Notes to
secure the payment or performance of all or any part of the Guaranteed
Obligations or any other liability of the Company to the holders of the
Notes. Should the Guarantor have the right, notwithstanding the
foregoing, to exercise its subrogation rights, the Guarantor hereby
expressly and irrevocably (I) subordinates any and all rights at law or
in equity to subrogation, reimbursement, exoneration, contribution,
indemnification or set off that the Guarantor may have to the
indefeasible payment in full and in cash of the Guaranteed Obligations
and (II) waives any and all defenses available to a surety, guarantor or
accommodation co-obligor until the Guaranteed Obligations are
indefeasibly paid in full and in cash. The Guarantor acknowledges and
agrees that this subordination is intended to benefit the holders of the
Notes and shall not limit or otherwise affect the Guarantor's liability
hereunder or the enforceability of the guaranty provision set forth in
this paragraph 10.
10F. Limitation. Notwithstanding any provision herein contained to
the contrary, the liability of the Guarantor pursuant to paragraph 10A (which
liability is in any event in addition to amounts for which such entity may be
primarily liable) shall be limited to an amount not to exceed as of any date
of determination the greater of:
(i) the net amount of all funds advanced to the Company under
this Agreement, as evidenced by the Notes, and then re-loaned or
otherwise transferred to, or for the benefit of, the Guarantor; and
(ii) the amount which could be claimed by the holders of the
Notes from the Guarantor under paragraph 10A without rendering such
claim voidable or avoidable under Section 548 of Chapter 11 of the
Bankruptcy Code (or any successor provision) or under any applicable
state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act
or similar statute or common law.
10G. Stay of Acceleration. If acceleration of the time for payment of
any amount payable by the Company under this Agreement, any Note or any other
Note Document is stayed upon the insolvency, bankruptcy or reorganization of
the Company, all such amounts otherwise subject to acceleration under the
terms of this Agreement, any Note or any other Note Document shall nonetheless
be payable by the Guarantor hereunder forthwith on demand by the holders of
the Notes to which such amounts are payable.
10H. Setoff. At any time after all or any part of the Guaranteed
Obligations have become due and payable (by acceleration or otherwise), the
holder of each Note may, without notice to the Guarantor and regardless of the
acceptance of any security or collateral for the payment thereof, appropriate
and apply toward the payment of all or any part of the Guaranteed Obligations
(i) any Indebtedness due or to become due from such holder to the Guarantor,
and (ii) any moneys, credits or other property belonging to the Guarantor, at
any time held by or coming into the possession of such holder or any of their
respective affiliates.
PARAGRAPH 11. DEFINITIONS.
11. Definitions. For the purpose of this Agreement, the terms
defined in the introductory sentence and in paragraphs 1 and 2 shall have the
respective meanings specified therein, and the following terms shall have the
meanings specified with respect thereto below (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
11A. Yield-Maintenance Terms.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which commercial banks in New York City are required or authorized to
be closed.
"Called Principal" shall mean, with respect to any Note, the principal
of such Note that is to be prepaid pursuant to paragraph 4A or has become or
is declared to be immediately due and payable pursuant to paragraph 7A, as the
context requires.
"Discounted Value" shall mean, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due
dates to the Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount factor (applied
on the same periodic basis as that on which interest on the Notes is payable)
equal to the Reinvestment Yield with respect to such Called Principal.
"Reinvestment Yield" shall mean, with respect to the Called Principal of
any Note, 0.50% over the yield to maturity implied by (i) the yields reported,
as of 10:00 a.m. (New York City time) on the Business Day next preceding the
Settlement Date with respect to such Called Principal, on the display
designated as "Page 678" of the Telerate Service of Bridge Information
Services (or such other display as may replace Page 678 of the Telerate
Service of Bridge Information Services) for actively traded U.S. Treasury
securities having a maturity equal to the Remaining Average Life of such
Called Principal as of such Settlement Date, or if such yields shall not be
reported as of such time or the yields reported as of such time shall not be
ascertainable, (ii) the Treasury Constant Maturity Series yields reported, for
the latest day for which such yields shall have been so reported as of the
Business Day next preceding the Settlement Date with respect to such Called
Principal, in Federal Reserve Statistical Release H.15 (519) (or any
comparable successor publication) for actively traded U.S. Treasury securities
having a constant maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date. Such implied yield shall be determined,
if necessary, by (x) converting U.S. Treasury bill quotations to bond-
equivalent yields in accordance with accepted financial practice and (y)
interpolating linearly between yields reported for various maturities.
"Remaining Average Life" shall mean, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest one-
twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) each Remaining Scheduled Payment
of such Called Principal (but not of interest thereon) by (b) the number of
years (calculated to the nearest one-twelfth year) which will elapse between
the Settlement Date with respect to such Called Principal and the scheduled
due date of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" shall mean, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to its
scheduled due date.
"Settlement Date" shall mean, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid pursuant to
paragraph 4A or has become or is declared to be immediately due and payable
pursuant to paragraph 7A, as the context requires.
"Yield-Maintenance Amount" shall mean, with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the Called
Principal of such Note over the sum of (i) such Called Principal plus (ii)
interest accrued thereon as of (including interest due on) the Settlement Date
with respect to such Called Principal. The Yield-Maintenance Amount shall in
no event be less than zero.
11B. Other Terms.
"Affiliate" shall mean any Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, the Parent,
except the Company, the Guarantor or a Subsidiary of the Company or the
Guarantor. A Person shall be deemed to control an entity if such Person
possesses, directly or indirectly, the power to direct or cause the direction
of the management and policies of such entity, whether through the ownership
of voting securities, by contract or otherwise.
"Agent" shall mean The Chase Manhattan Bank (formerly Chemical Bank), as
agent under the Credit Agreement, and any successor thereto in such capacity.
"Asset Disposition" shall mean, with respect to the Company, the
Guarantor or any of their respective Subsidiaries any transaction or series of
related transactions in which such Person sells, conveys, transfers or leases
(as lessor) or parts with control of (collectively, for purposes of this
definition, a "transfer"), directly or indirectly, any of its property or
assets, including, without limitation, any Indebtedness of any Subsidiary or
capital stock of or other equity interests in any Subsidiary (including the
issuance of such stock or other equity interests by such Subsidiary), other
than (i) transfers of cash or cash equivalents, (ii) sales of inventory in the
ordinary course of business, and (iii) sales or other dispositions of obsolete
or worn out equipment in the ordinary course of business; provided, that a
Sale-Leaseback Transaction shall not be an Asset Disposition.
"Bankruptcy Code" shall have the meaning specified in clause (viii) of
paragraph 10B.
"Bankruptcy Law" shall have the meaning specified in clause (viii) of
paragraph 7A.
"Banks" shall mean The Chase Manhattan Bank (formerly Chemical Bank) and
the other "Lenders" and "Issuing Banks" as such terms are defined in the
Credit Agreement.
"Capitalized Lease Obligation" shall mean any rental obligation which,
under generally accepted accounting principles, would be required to be
capitalized on the books of the Company, the Guarantor or any of their
respective Subsidiaries, taken at the amount thereof accounted for as
indebtedness (net of interest expense) in accordance with such principles.
"Change in Structure" shall mean the occurrence or existence of any of
the following events or circumstances: (i) the Parent creates, acquires, forms
or otherwise has any Subsidiary other than the Company, the Guarantor and
their respective Subsidiaries; (ii) the Parent exists or operates as anything
other than a holding company which has as its sole function the holding of
record and beneficial ownership of the stock of the Company and the Guarantor;
(iii) the Parent ceases to hold record and beneficial ownership of 100% of the
outstanding capital stock of the Company and the Guarantor; or (iv) the
Parent, directly or indirectly, creates, incurs, assumes, guarantees or
otherwise becomes directly or indirectly liable with respect to any
Indebtedness; provided, that creation or formation of any wholly owned
Subsidiary of the Parent for the purpose of consummating a transaction
involving the acquisition, consolidation or transfer of assets of the Company,
the Guarantor or any of their respective Subsidiaries to such wholly owned
Subsidiary of the Parent pursuant to paragraph 6C(2) shall not, in and of
itself, constitute a Change in Structure as long as (x) such wholly owned
Subsidiary of the Parent becomes the Successor Corporation, immediately upon
the consummation of such transaction pursuant to paragraph 6C(2) and (y) no
Default or Event of Default exists following the creation or formation of such
Subsidiary and immediately after the consummation of such transaction.
"Closing" or "Date of Closing" shall have the meaning specified in
paragraph 2.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Company" shall mean the corporation that originally executed this
Agreement as issuer of the Notes until a corporation becomes a Successor
Corporation with respect to the Company in a transaction permitted by Section
6C(2) and thereafter shall mean such Successor Corporation.
"Consolidated Current Debt" means, as of any date of determination, the
total of all Current Debt of the Issuer Group outstanding on such date, after
eliminating all offsetting debits and credits between the entities that
comprise the Issuer Group and all other items required to be eliminated in the
course of the preparation of consolidated financial statements of the Issuer
Group in accordance with generally accepted accounting principles.
"Consolidated Earnings Available for Interest Expense" shall mean, for
any period, the sum of (i) Consolidated Net Income, plus (ii) to the extent
deducted in the determination of Consolidated Net Income, (a) all provisions
for federal, state and other income tax and (b) Consolidated Interest Expense.
"Consolidated Funded Debt" shall mean, as of any date of determination,
the total of all Funded Debt of the Issuer Group outstanding on such date,
after eliminating all offsetting debits and credits between the entities that
comprise the Issuer Group and all other items required to be eliminated in the
course of the preparation of consolidated financial statements of the Issuer
Group in accordance with generally accepted accounting principles.
"Consolidated Interest Expense" shall mean, for any period, the gross
interest expense of the Issuer Group computed on a consolidated basis in
accordance with generally accepted accounting principles, including, without
limitation, amortization of debt discounts and the portion of any Capitalized
Lease Obligation allocable to interest expense; provided, that there shall be
excluded from Consolidated Interest Expense deferred amortization costs
associated with the acquisition of all of the capital stock of Continental
Baking Company, a Delaware corporation, by the Parent and the Company pursuant
to that certain Sale and Purchase Agreement dated as of April 12, 1995.
"Consolidated Net Income" shall mean, with respect to any period, the
net income (or loss) of the Issuer Group for such period, as determined in
accordance with generally accepted accounting principles, after eliminating
all offsetting debits and credits between entities that comprise the Issuer
Group and all other items required to be eliminated in the course of the
preparation of consolidated financial statements of entities that comprise the
Issuer Group, in accordance with generally accepted accounting principles.
"Consolidated Net Worth" shall mean, on any date as of which the amount
thereof is to be determined, the total stockholders' equity for the Issuer
Group, determined on a consolidated basis in accordance with generally
accepted accounting principles.
"Consolidated Total Assets" shall mean, at any time, the total assets
of the Issuer Group which would be shown as assets on a consolidated
balance sheet of the Issuer Group as of such time prepared in
accordance with generally accepted accounting principles, after
eliminating all amounts properly attributable to minority interests,
if any, in the stock and surplus of Subsidiaries.
"Consolidated Total Capitalization" shall mean, at any time, the sum
of Consolidated Net Worth and Consolidated Funded Debt.
"Credit Agreement" shall mean that certain Credit Agreement, dated as
of May 31, 1995, by and among the Company, the "Lenders" and "Issuing
Banks" (as such terms are defined therein) and the Agent, as the same
has been amended as of the date hereof and as the same may be further
amended, restated, supplemented or otherwise modified from time to
time.
"Current Assets" shall mean current assets as determined according to
generally accepted accounting principles.
"Current Debt" shall mean, with respect to any Person, all
Indebtedness of such Person which by its terms or by the terms of any
instrument or agreement relating thereto matures, or which is
otherwise payable, on demand or within one year from the date of the
creation thereof and is not directly or indirectly renewable or
extendible at the option of the debtor to a date
one year or more (including an option of the debtor under a revolving credit
or similar agreement obligating the lender or lenders to extend credit over a
period of one year or more) from the date of the creation thereof, including,
without limitation, Current Maturities of Funded Debt, provided that
Indebtedness for borrowed money outstanding under a revolving credit or
similar agreement which obligates the lender or lenders to extend credit over
a period of more than one year shall constitute Funded Debt and not Current
Debt, even though such Indebtedness by its terms matures on demand or within
one year from the date of the creation thereof.
"Current Maturities of Funded Debt" shall mean, at any time and with
respect to any item of Funded Debt, the portion of such Funded Debt
outstanding at such time which by its terms or the terms of any instrument or
agreement relating thereto matures, or is otherwise payable, on demand or
within one year from such time (whether by sinking fund, other required
prepayment or final payment at maturity) and is not directly or indirectly
renewable or extendible at the option of the debtor under an agreement or firm
commitment in effect at such time to a date one year or more (including an
option of the debtor under a revolving credit or similar agreement obligating
the lender or lenders to extend credit over a period of one year or more) from
such time.
"Default Notice" shall have the meaning specified in paragraph 10E.
"Drake Acquisition" shall mean the acquisition by the Company on
August 16, 1998 of the Drake Bakeries business from Culinar, Inc.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate" shall mean any corporation which is a member of the
same controlled group of corporations as the Parent, the Company or the
Guarantor, within the meaning of section 414(b) of the Code, or any trade or
business which is under common control with the Parent, the Company or the
Guarantor within the meaning of section 414(c) of the Code.
"Event of Default" shall mean any of the events specified in paragraph
7A, provided that there has been satisfied any requirement in connection with
such event for the giving of notice, or the lapse of time, or the happening of
any further condition, event or act, and "Default" shall mean any of such
events, whether or not any such requirement has been satisfied.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall mean, at any time and with respect to any
property, the sale value of such property that would be realized in an arm's-
length sale at such time between an informed and willing buyer and an informed
and willing seller (neither being under a compulsion to buy or sell).
"Funded Debt" shall mean, with respect to any Person and as of any
date, the sum of (i) all Indebtedness of such Person which by its
terms or by the terms of any instrument or agreement relating thereto
matures, or which is otherwise payable, one year or more from the date
of creation thereof or is directly or indirectly renewable or
extendible at the option of the debtor to a date one year or more
(including an option of the debtor under a revolving credit or
similar agreement obligating the lender or lenders to extend credit
over a period of one year or more) from the date of the creation thereof, plus
(ii) the Included Amount, minus (iii) Current Maturities of Funded Debt of
such Person.
"Guarantee" shall mean, with respect to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to
any indebtedness, lease, dividend or other obligation of another, including,
without limitation, any such obligation directly or indirectly guaranteed,
endorsed (otherwise than for collection or deposit in the ordinary course of
business) or discounted or sold with recourse by such Person, or in respect of
which such Person is otherwise directly or indirectly liable, including,
without limitation, any such obligation in effect guaranteed by such Person
through any agreement (contingent or otherwise) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide
funds for the payment or discharge of such obligation (whether in the form of
loans, advances, stock purchases, capital contributions or otherwise), or to
maintain the solvency or any balance sheet or other financial condition of the
obligor of such obligation, or to make payment for any products, materials or
supplies or for any transportation or services regardless of the non-delivery
or non-furnishing thereof, in any such case if the purpose or intent of such
agreement is to provide assurance that such obligation will be paid or
discharged, or that any agreements relating thereto will be complied with, or
that the holders of such obligation will be protected against loss in respect
thereof. The amount of any Guarantee shall be equal to the outstanding
principal amount of the obligation guaranteed or such lesser amount to which
the maximum exposure of the guarantor shall have been specifically limited.
"Guaranteed Obligations" shall have the meaning set forth in paragraph
10A.
"Guarantor" shall mean the corporation that originally executed this
Agreement as the guarantor of the Notes until a corporation becomes a
Successor Corporation with respect to the Guarantor in a transaction permitted
by Section 6C(2) and thereafter shall mean such Successor Corporation.
"Included Amount" shall mean, as of any date, the maximum amount of
Consolidated Current Debt outstanding during the Low Period then most recently
ended. Any Included Amount shall be deemed incurred on the last day of the
Low Period then most recently ended.
"Indebtedness" as applied to any Person shall mean (without
duplication) (a) any indebtedness for borrowed money which such
Person has directly or indirectly created, incurred or assumed,
including, without limitation, Capitalized Lease Obligations of such
Person, (b) any indebtedness incurred, whether or not for borrowed
money, secured by any Lien in respect of property owned by such
Person, whether or not such Person has assumed or become liable
for the payment of such indebtedness, (c) any indebtedness, whether or not for
borrowed money, with respect to which such Person has become directly or
indirectly liable and which represents or has been incurred to finance the
purchase price (or a portion thereof) of any property or services or business
acquired by such Person, whether by purchase, consolidation, merger or
otherwise, (d) redemption obligations in respect of preferred stock that is
mandatorily redeemable, in whole or in part, at any time on or before
September 10, 2005, (e) any indebtedness of the character referred to in
clauses (a), (b), (c) or (d) of this definition deemed to be extinguished
under generally accepted accounting principles but for which such Person
remains legally liable and (f) any indebtedness of any other Person of the
character referred to in subdivision (a), (b), (c), (d) or (e) of this
definition with respect to which the Person whose Indebtedness is being
determined has become liable by way of a Guarantee, including, without
limitation, any such indebtedness of any partnership in which such Person is a
general partner.
"Issuer Group" shall mean, at any time prior to the occurrence of a
Change in Structure, the Parent, the Company, the Guarantor and each of their
respective Subsidiaries and, upon the occurrence of, and at all times
following a Change in Structure, the Company, the Guarantor and each of their
respective Subsidiaries.
"Lien" shall mean any mortgage, pledge, priority, security interest,
encumbrance, contractual deposit arrangement, lien (statutory or otherwise) or
charge of any kind (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any production payment,
any lease in the nature thereof, and the filing of or agreement to give any
financing statement under the Uniform Commercial Code of any jurisdiction) or
any other type of preferential arrangement for the purpose, or having the
effect, of securing the payment or performance of an obligation.
"Low Period" shall mean, as to any period of 12 consecutive calendar
months, the period of 30 consecutive days during such period during which
Consolidated Current Debt was at its lowest level on a daily average basis.
"Material" shall mean material in relation to the business, condition
(financial or other), assets, properties, operations or prospects of the
Parent, the Company, the Guarantor and their Subsidiaries taken as a whole.
"Material Adverse Effect" shall mean (i) a material adverse effect on
the business, condition (financial or other), assets, properties, operations
or prospects of the Parent, the Company, the Guarantor and their Subsidiaries
taken as a whole or (ii) material impairment of the ability of the Company or
the Guarantor to pay any amount due, or to perform any other material
obligation, under any Note Document.
"Memorandum" shall mean that certain Private Placement Memorandum,
dated July 1998, pertaining to the private placement of the Notes by
the Company and prepared by Chase Securities, Inc.
"MILP-8" shall mean Mezzanine Investment Limited Partnership-8, a
Delaware limited partnership.
"MILP-8 Notes" shall mean the Company's 10% Senior Notes due July 31,
2000 issued to MILP-8 in the original aggregate principal amount of
$79,000,000.
"Multiemployer Plan" shall mean any Plan which is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA).
"Note Documents" shall mean this Agreement, the Notes, the Sharing
Agreement and any other documents executed pursuant hereto or thereto.
"Notes" shall have the meaning specified in paragraph 1.
"Officer's Certificate" shall mean a certificate signed in the name of
the Company or the Guarantor by the President, any Vice President or the
Treasurer of either the Company or the Guarantor, as applicable.
"Parent" shall mean Interstate Bakeries Corporation, a Delaware
corporation, together with its successors.
"Pari Passu Indebtedness" shall mean any Indebtedness of the Company
that is pari passu in right of payment to the Notes.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor entity.
"Person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, a limited liability company, an
unincorporated organization and a government or any department or agency
thereof.
"Plan" shall mean any "employee pension benefit plan" (as such term is
defined in section 3 of ERISA) which is or has been established or maintained,
or to which contributions are or have been made, by the Company, the Guarantor
or any ERISA Affiliate.
"QPAM Exemption" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
"Reportable Event" shall mean any reportable event as defined in
Section 4043(b) of ERISA or the regulations issued thereunder with
respect to a Plan (other than a Plan maintained by an ERISA Affiliate
which is considered an ERISA Affiliate only pursuant to subsection
(m) or (o) of Section 414 of the Code).
"Required Holder(s)" shall mean the holder or holders of at least 51%
of the aggregate principal amount of the Notes from time to time
outstanding.
"Responsible Officer" shall mean the chief operating officer, chief
financial officer, principal accounting officer, treasurer or controller of
either the Company or the Guarantor, as the context requires, or any other
executive officer of either the Company or the Guarantor, as the context
requires, involved principally in such entity's financial administration or
its controllership function.
"Sale-Leaseback Transaction" shall mean any arrangement with any lender
or investor or to which such lender or investor is a party providing for the
leasing by the Company, the Guarantor or any of their respective Subsidiaries
of real or personal property which has been or is to be sold or transferred by
the Company, the Guarantor or any of their respective Subsidiaries 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 rental
obligations of the Company, the Guarantor or any of their respective
Subsidiaries.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Sharing Agreement" shall mean that certain Sharing Agreement, dated
September 10, 1998 by and among the Company, the Guarantor, the Agent, the
Banks party thereto, MILP-8 and the Purchasers, as the same may be amended or
restated from time to time to comply with paragraphs 6B or 6F or with any
amendments, modifications, renewals, extensions of, or replacements to, the
Credit Agreement and as the same otherwise may be amended, restated,
supplemented or modified from time to time.
"Solvent" shall mean with respect to any Person that, as of any date of
determination, (i) the amount of the "fair value" or "present fair saleable
value" of the assets of such Person (on a going-concern basis) will, as of
such date, exceed the amount of all "liabilities of such Person, contingent or
otherwise," as of such date, as such quoted terms are determined in accordance
with applicable federal and state laws governing determinations of the
insolvency of debtors, (ii) such fair value or present fair saleable value of
the assets of such Person (on a going-concern basis) will, as of such date, be
greater than the amount that will be required to pay the liability of such
Person on its debts as such debts become absolute and matured, (iii) such
Person will not have, as of such date, an unreasonably small amount of capital
with which to conduct its business, and (iv) such Person will be able to pay
its debts as they mature. For purposes of this definition, (a) "debt" means
liability on a "claim," (b) "claim" means any (x) right to payment, whether or
not such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured or (y) right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether or not
such right to an equitable remedy is reduced to judgment, fixed, contingent,
matured or unmatured, disputed, undisputed, secured or unsecured and
(c) unliquidated, contingent, disputed and unmatured claims shall be valued at
the amount that can be reasonably expected to be actual and matured.
"Subsidiary" shall mean with respect to any Person, (i) any corporation,
at least 50% of the total combined voting power of all classes of Voting Stock
of which shall, at the time as of which any determination is being made, be
owned by such Person, either directly or through Subsidiaries, and (ii) any
partnership, limited liability company, joint venture or similar entity if at
least a 50% interest in the profits or capital thereof is owned by such
Person, either directly or through Subsidiaries (unless such entity can and
does ordinarily take major business actions without the prior approval, direct
or indirect, of such Person).
"Successor Corporation" shall have the meaning specified in paragraph
6C(2).
"Swaps" shall mean with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect
thereof as of the end of the then most recently ended fiscal quarter of such
Person, based on the assumption that such Swap had terminated at the end of
such fiscal quarter, and in making such determination, if any agreement
relating to such Swap provides for the netting of amounts payable by and to
such Person thereunder or if any such agreement provides for the simultaneous
payment of amounts by and to such Person, then in each such case, the amount
of such obligation shall be the net amount so determined.
"Transferee" shall mean any direct or indirect transferee of all or any
part of any Note purchased by any Purchaser under this Agreement.
"Voting Stock" shall mean securities or other equity interests of any
class or classes, the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election or removal of corporate
directors or persons (such as general partners or managers) performing similar
functions in the case of business entities other than corporations.
"Wholly Owned Subsidiary" shall mean any Subsidiary all of the equity
interests (except directors' qualifying shares) of which are owned, directly
or indirectly, by the Company, the Guarantor or other Wholly Owned
Subsidiaries.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as
a result of a complete or partial withdrawal from such Multiemployer
Plan, as such terms are defined in Part I of Subtitle E of Title IV
of ERISA.
11C. Accounting Principles, Terms and Determinations. (i) All
references in this Agreement to "generally accepted accounting principles"
shall be deemed to refer to generally accepted accounting principles in effect
in the United States at the time of application thereof. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all unaudited financial statements and certificates and reports as to
financial matters required to be furnished hereunder shall be prepared, in
accordance with generally accepted accounting principles, applied on a basis
consistent with the most recent audited consolidated financial statements of
the Issuer Group delivered pursuant to clause (ii) of paragraph 5A or, if no
such statements have been so delivered, the most recent audited financial
statements referred to in paragraph 8B.
(ii) All references herein to "the Issuer Group" for the purposes of
computing the consolidated financial position, results of operations or other
balance sheet or financial statement items (including without limitation the
computation of Consolidated Current Debt, Consolidated Earnings Available for
Interest Expense, Consolidated Funded Debt, Consolidated Interest Expense,
Consolidated Net Income, Consolidated Net Worth, Consolidated Total
Capitalization and Consolidated Total Assets) shall be deemed to include only
those entities specifically defined as part of the Issuer Group as separate
legal entities and, unless otherwise provided herein, shall not include the
financial condition, results of operations, cash flows or stockholders' equity
of any other Person (including without limitation any Subsidiary of the Parent
that is not, as of the date of determination, part of the Issuer Group),
whether or not, in any particular instance, such accounting treatment would be
in accordance with generally accepted accounting principles.
PARAGRAPH 12. MISCELLANEOUS.
12A. Note Payments. So long as any Purchaser shall hold any Note, the
Company will make payments of principal of, interest on and any Yield-
Maintenance Amount payable with respect to such Note, which comply with the
terms of this Agreement and such Note, by wire transfer of immediately
available funds for credit (not later than 12:00 noon, New York City time, on
the date due) to such Purchaser's account or accounts as specified in the
Purchaser Schedule attached hereto, or such other account or accounts in the
United States as such Purchaser may designate in writing, notwithstanding any
contrary provision herein or in any Note with respect to the place of payment.
Each Purchaser agrees that, before disposing of any Note, such Purchaser will
make a notation thereon (or on a schedule attached thereto) of all principal
payments previously made thereon and of the date to which interest thereon has
been paid. The Company agrees to afford the benefits of this paragraph 12A to
any Transferee which shall have made the same agreement as each Purchaser has
made in this paragraph 12A. No holder shall be required to present or
surrender any Note or make any notation thereon (except as provided in the
second sentence of this paragraph 12A) except that upon written request of the
Company made concurrently with or reasonably promptly after payment or
prepayment in full of any Note, the applicable holder shall surrender such
Note for cancellation, reasonably promptly after any such request, to the
Company at its principal executive office.
12B. Expenses; Indemnity.
(i) The Company and the Guarantor each agrees, to pay, and
save each Purchaser and any Transferee harmless against liability
for the payment of, all out-of-pocket expenses arising in connection
with the transactions contemplated hereby, including (a) all document
production and duplication charges and the fees and expenses of any
special counsel engaged by such Purchaser or such Transferee in
connection with this Agreement, the transactions contemplated hereby
and any subsequent proposed modification of, or proposed consent under,
this Agreement, whether or not such proposed modification shall be
effected or proposed consent granted, and (b) the costs and expenses,
including attorneys' fees and expenses, incurred by such Purchaser
or such Transferee in enforcing (or determining whether or how to
enforce) any rights under this Agreement or the Notes or in responding
to any subpoena or other legal process or informal investigative
demand issued in connection with this Agreement or the transactions
contemplated hereby or by reason of such Purchaser's or such
Transferee's having acquired any Note, including without limitation
costs and expenses incurred in any bankruptcy case or in any work-out
or restructuring of the transactions contemplated hereby and by the
Notes. The obligations of the Company and the Guarantor under this
paragraph 12B shall survive the transfer of any Note or portion
thereof or interest therein by any Purchaser or any Transferee and
the payment of any Note.
(ii) The Company and the Guarantor each agree to indemnify
the holder of each Note and each of their respective directors,
officers, employees, attorneys and agents (each such Person being
called an "Indemnitee") against, and to hold each Indemnitee harmless
from, any and all liabilities, damages, obligations, losses,
penalties, actions, judgments, suits, costs and expenses which (if
such liabilities, damages, obligations, losses, penalties, actions,
judgments, suits, costs and expenses arise in a judicial forum) are
found in a final judgment by a court of competent jurisdiction,
including reasonable counsel fees, charges and disbursements, incurred
by or asserted against any Indemnitee arising out of any third party
claim, litigation, investigation or proceeding (whether or not any
Indemnitee shall be party thereto) relating to, in any way connected
with, or as a result of the execution or delivery of, this Agreement,
the Notes or any other Note Document or any agreement or instrument
contemplated hereby or thereby; provided, that such indemnity shall
not, as to any Indemnitee, be available to the extent that such
liabilities, damages, obligations, losses, penalties, actions,
judgments, suits, costs and expenses are found in a final judgment
by a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Indemnitee.
(iii) No holder of any Note or any of such holder's
directors, officers, employees, attorneys and agents shall be
responsible or liable to any other party hereto or any other Person
or entity for consequential damages which may be alleged as a result
of the transactions contemplated hereby.
(iv) The provisions of this paragraph 12B shall remain
operative and in full force and effect regardless of the expiration
of the term of this Agreement, the consummation of the transactions
contemplated hereby, the repayment of the Notes, the invalidity or
unenforceability of any term or provision of this Agreement, the Notes
or any other Note Document, or any investigation made by or on behalf
of the holder of any Note. All amounts due under this paragraph 12B
shall be payable on written demand therefor.
12C. Amendments.
(i) Consent to Amendments. This Agreement may be amended,
and the Company or the Guarantor may take any action herein prohibited,
or omit to perform any act herein required to be performed by it, if
the Company and the Guarantor, as applicable, shall obtain the written
consent to such amendment, action or omission to act, of the Required
Holder(s) except that, without the written consent of the holder or
holders of all Notes at the time outstanding, no amendment to this
Agreement shall change the maturity of any Note, release the Guarantor
from its obligations set forth in paragraph 10 or change the absolute
and unconditional nature of such obligations, change or amend this
paragraph 12C or change the principal of, or the rate or time of
payment of interest on or any Yield-Maintenance Amount payable with
respect to any Note, or affect the time, amount or allocation of any
prepayments, or change the proportion of the principal amount of the
Notes required with respect to any consent, amendment, waiver or
declaration. Each holder of any Note at the time or thereafter
outstanding shall be bound by any consent authorized by this
paragraph 12C, whether or not such Note shall have been marked to
indicate such consent, but any Notes issued thereafter may bear a
notation referring to any such consent. No course of dealing
between the Company or the Guarantor and the holder of any Note
nor any delay in exercising any rights hereunder or under any Note
shall operate as a waiver of any rights of any holder of such Note.
As used herein and in the Notes, the term "this Agreement" and
references thereto shall mean this Agreement as it may from
time to time be amended or supplemented.
(ii) Solicitation of Holders of Notes. The Company will
provide each holder of the Notes (irrespective of the amount of
Notes then owned by it) with sufficient information, sufficiently
far in advance of the date a decision is required, to enable such
holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the
provisions hereof or of the Notes. The Company will deliver executed
or true and correct copies of each amendment, waiver or consent
effected pursuant to the provisions of this paragraph 12C to each
holder of outstanding Notes promptly following the date on which it
is executed and delivered by, or receives the consent or approval of,
the requisite holders of Notes.
(iii) Payments Pursuant to Amendment. The Company will not
directly or indirectly pay or cause to be paid any remuneration,
whether by way of supplemental or additional interest, fee or
otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by any
holder of Notes of any waiver or amendment of any of the terms and
provisions hereof or thereof unless such remuneration is concurrently
paid, or security is concurrently granted, on the same terms,
ratably to each holder of Notes then outstanding even if such holder
did not consent to such waiver or amendment.
12D. Form, Registration, Transfer and Exchange of Notes; Lost
Notes. The Notes are issuable as registered notes without coupons
in denominations of at least $100,000, except as may be necessary to
reflect any principal amount not evenly divisible by $100,000. The
Company shall keep at its principal office a register in which the
Company shall provide for the registration of Notes and of
transfers of Notes. Upon surrender for registration of transfer
of any Note at the principal office of the Company, the Company and the
Guarantor shall, at the Company's expense, execute and deliver one or more new
Notes of like tenor and of a like aggregate principal amount, registered in
the name of such transferee or transferees. At the option of the holder of
any Note, such Note may be exchanged for other Notes of like tenor and of any
authorized denominations, of a like aggregate principal amount, upon surrender
of the Note to be exchanged at the principal office of the Company. Whenever
any Notes are so surrendered for exchange, the Company and the Guarantor
shall, at the Company's expense, execute and deliver the Notes which the
holder making the exchange is entitled to receive. Every Note surrendered for
registration of transfer or exchange shall be duly endorsed, or be accompanied
by a written instrument of transfer duly executed, by the holder of such Note
or such holder's attorney duly authorized in writing. Any Note or Notes
issued in exchange for any Note or upon transfer thereof shall carry the
rights to unpaid interest and interest to accrue which were carried by the
Note so exchanged or transferred, so that neither gain nor loss of interest
shall result from any such transfer or exchange. Upon receipt of written
notice from the holder of any Note of the loss, theft, destruction or
mutilation of such Note and, in the case of any such loss, theft or
destruction, upon receipt of such holder's unsecured indemnity agreement, or
in the case of any such mutilation upon surrender and cancellation of such
Note, the Company will make, and the Guarantor will endorse, and deliver a new
Note, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Note.
12E. Persons Deemed Owners; Participations. Prior to due
presentment for registration of transfer, the Company and the Guarantor may
treat the Person in whose name any Note is registered as the owner and holder
of such Note for the purpose of receiving payment of principal of, interest
on and any Yield-Maintenance Amount payable with respect to such Note and for
all other purposes whatsoever, whether or not such Note shall be overdue,
and the Company and the Guarantor shall not be affected by notice to the
contrary. Subject to the preceding sentence, the holder of any Note may from
time to time grant participations in such Note to any Person on such terms and
conditions as may be determined by such holder in its sole and absolute
discretion, provided that any such participation shall be in a principal
amount of at least $100,000.
12F. Survival of Representations and Warranties; Entire Agreement.
All representations and warranties contained herein or made in writing by or on
behalf of the Company and the Guarantor in connection herewith shall survive
the execution and delivery of this Agreement and the Notes, the transfer by
any Purchaser of any Note or portion thereof or interest therein and the
payment of any Note, and may be relied upon by any Purchaser or Transferee,
regardless of any investigation made at any time by or on behalf of any
Purchaser or any Transferee. Subject to the preceding sentence, this
Agreement and the Notes and the Sharing Agreement embody the entire agreement
and understanding between the Purchasers and the Company and the Guarantor and
supersede all prior agreements and understandings relating to the subject
matter hereof.
12G. Successors and Assigns. All covenants and other agreements in
this Agreement contained by or on behalf of any of the parties hereto shall
bind and inure to the benefit of the respective successors and assigns of the
parties hereto (including, without limitation, any Transferee) whether so
expressed or not.
12H. Disclosure to Other Persons. The Company and the Guarantor
each acknowledges that the holder of any Note may deliver copies of any
financial statements and other documents delivered to such holder, and disclose
any other information disclosed to such holder, by or on behalf of the Company,
the Guarantor or any of their respective Subsidiaries in connection with or
pursuant to this Agreement to (i) such holder's directors, officers,
employees, agents and professional consultants, (ii) any other holder of any
Note, (iii) any Person to which such holder offers to sell such Note or any
part thereof, (iv) any Person to which such holder sells or offers to sell a
participation in all or any part of such Note, (v) any Person from which such
holder offers to purchase any security of the Company or the Guarantor, (vi)
any federal or state regulatory authority having jurisdiction over such
holder, (vii) the National Association of Insurance Commissioners or any
similar organization and (viii) any other Person to which such delivery or
disclosure may be necessary or appropriate (a) in compliance with any law,
rule, regulation or order applicable to such holder, (b) in response to any
subpoena or other legal process or informal investigative demand or (c) in
connection with any litigation to which such holder is a party.
12I. Notices. All notices or other communications provided for
hereunder (except for the telephonic notice required by paragraph 4B), shall
be in writing and sent by first class mail or nationwide overnight delivery
service (with charges prepaid) and (i) if to any Purchaser, addressed to such
Purchaser at the address specified for such communications in the Purchaser
Schedule attached hereto, or at such other address as such Purchaser shall
have specified to the Company in writing, (ii) if to any other holder of any
Note, addressed to such other holder at such address as such other holder
shall have specified to the Company in writing or, if any such other holder
shall not have so specified an address to the Company, then addressed to such
other holder in care of the last holder of such Note which shall have so
specified an address to the Company, and (iii) if to the Company or the
Guarantor, addressed to it at 12 East Armour Boulevard, Kansas City, Missouri
64111, Attention: Ray Sandy Sutton, Vice President, Corporate Secretary and
General Counsel, or at such other address as the Company or the Guarantor, as
applicable, shall have specified to the holder of each Note in writing;
provided, however, that (a) any such communication to the Company may also, at
the option of the holder of any Note, be delivered by any other means either
to the Company at its address specified above or to any officer of the Company
provided such communication is actually received by such officer, and (b) any
such communication to the Guarantor may also, at the option of the holder of
any Note, be delivered by any other means either to the Guarantor at its
address specified above or to any officer of the Guarantor provided such
communication is actually received by such officer.
12J. Payments Due on Non-Business Days. Anything in this Agreement
or the Notes to the contrary notwithstanding, any payment of principal of or
interest or Yield-Maintenance Amount, if any, on any Note that is due on a
date other than a Business Day shall be made on the next succeeding Business
Day. If the date for any payment is extended to the next succeeding Business
Day by reason of the preceding sentence, the period of such extension shall
not be included in the computation of the interest payable on such Business
Day.
12K. Satisfaction Requirement. If any agreement, certificate or
other writing, or any action taken or to be taken, is by the terms of this
Agreement required to be satisfactory to any Purchaser or to the Required
Holder(s), the determination of such satisfaction shall be made by such
Purchaser or the Required Holder(s), as the case may be, in the sole and
exclusive judgment (exercised in good faith) of the Person or Persons making
such determination.
12L. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW
OF THE STATE OF NEW YORK. This Agreement may not be changed orally, but
(subject to the provisions of paragraph 12C) only by an agreement in writing
signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought.
12M. Waiver of Jury Trial; Consent to Jurisdiction12M. Waiver of
Jury Trial; Consent to Jurisdiction.
(i) THE COMPANY, THE GUARANTOR AND THE HOLDER OF EACH NOTE
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT
MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION OF ANY CLAIM WHICH IS
BASED HEREON, OR ARISES OUT OF, UNDER, OR IN CONNECTION WITH THIS
AGREEMENT, THE NOTES OR ANY OTHER DOCUMENTS EXECUTED IN CONNECTION
HEREWITH OR THEREWITH, OR ANY TRANSACTIONS RELATING HERETO OR THERETO,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN), OR ACTIONS OF THE COMPANY, THE GUARANTOR OR THE HOLDER OF
ANY NOTE. THE COMPANY AND THE GUARANTOR EACH ACKNOWLEDGES THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR EACH PURCHASER TO ENTER INTO
THIS AGREEMENT.
(ii) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT, THE NOTES OR ANY OTHER DOCUMENTS EXECUTED IN CONNECTION
HEREWITH OR THEREWITH OR ANY TRANSACTIONS RELATING HERETO OR THERETO,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN), OR ACTIONS OF THE COMPANY, THE GUARANTOR OR THE HOLDER OF
ANY NOTE MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR THE
UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND
THE COMPANY AND THE GUARANTOR EACH HEREBY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS RESPECTIVE PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. THE COMPANY, THE
GUARANTOR AND THE HOLDER OF EACH NOTE HEREBY IRREVOCABLY WAIVES ANY
OBJECTIONS, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING
OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING
IN SUCH RESPECTIVE JURISDICTIONS.
12N. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
12O. Descriptive Headings. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
12P. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together
shall constitute one instrument.
12Q. Severalty of Obligations. The sales of Notes to the
Purchasers are to be several sales, and the obligations of the Purchasers under
this Agreement are several obligations. Except as provided in paragraph 3F,
no failure by any Purchaser to perform its obligations under this Agreement
shall relieve any other Purchaser, the Company or the Guarantor of any of their
respective obligations hereunder, and no Purchaser shall be responsible for
the obligations of, or any action taken or omitted by, any other Purchaser
hereunder.
[Remainder of Page Intentionally Left Blank; Signature Pages Follow]
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterparts of this letter and return the same to
the Company and the Guarantor, whereupon this letter shall become a binding
agreement among the Company, the Guarantor and the Purchasers.
<PAGE>
Very truly yours,
INTERSTATE BRANDS CORPORATION
By /s/ Paul E. Yarick
---------------------------
Name: Paul E. Yarick
Title: Vice President & Treasurer
INTERSTATE BRANDS WEST CORPORATION
By /s/ Paul E. Yarick
---------------------------
Name: Paul E. Yarick
Title: Vice President & Treasurer
The foregoing Agreement is
hereby accepted as of the
date first above written.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By /s/ Ric E. Abel
----------------------
Name: Ric E. Abel
Title: Vice President
PRUCO LIFE INSURANCE COMPANY
By /s/ Ric E. Abel
----------------------
Name: Ric E. Abel
Title: Vice President
METROPOLITAN LIFE INSURANCE COMPANY
By /s/ Gerald P. Marcus
----------------------
Name: Gerald P. Marcus
Title: Director
NEW YORK LIFE INSURANCE COMPANY
By /s/ David L. Bangs
----------------------
Name: David L. Bangs
Title: Managing Director
<PAGE>
NEW YORK LIFE INSURANCE AND
ANNUITY CORPORATION
By: NEW YORK LIFE INSURANCE COMPANY
By /s/ David L. Bangs
----------------------
Name: David L. Bangs
Title: Managing Director
GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY
By /s/ Jon M. Lucia
----------------------
Name: Jon M. Lucia
Title: Assistant Vice President
& Investment Officer
THE LIFE INSURANCE COMPANY OF VIRGINIA
By /s/ Jon M. Lucia
----------------------
Name: Jon M. Lucia
Title: Assistant Vice President
& Investment Officer
HERITAGE LIFE INSURANCE COMPANY
By /s/ Jon M. Lucia
----------------------
Name: Jon M. Lucia
Title: Assistant Vice President - Investments
PHF LIFE INSURANCE COMPANY
By /s/ Jon M. Lucia
----------------------
Name: Jon M. Lucia
Title: Assistant Vice President - Investments
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By /s/ Mark A. Ahmed
----------------------
Name: Mark A. Ahmed
Title: Managing Director
CM LIFE INSURANCE COMPANY
By /s/ Mark A. Ahmed
----------------------
Name: Mark A. Ahmed
Title: Investment Officer
<PAGE>
NATIONWIDE LIFE INSURANCE COMPANY
By /s/ Mark W. Poeppelman
----------------------
Name: Mark W. Peoppelman
Title: Authorized Signatory
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
By /s/ Joel Serebransky
----------------------
Name: Joel Serebransky
Title: Investment Officer
LUTHERAN BROTHERHOOD
By /s/ Mark O. Swenson
----------------------
Name: Mark O. Swenson
Title: Assistant Vice President
AMERICAN UNITED LIFE INSURANCE COMPANY
By /s/ Kent R. Adams
----------------------
Name: Kent R. Adams
Title: Vice President
<PAGE>
PURCHASER SCHEDULE
[See Attached]
The Prudential Insurance Co. $62,000,000
Metropolitan Life Insurance Co. 35,000,000
New York Life Insurance Co. 31,000,000
G.E. Financial 22,000,000
Massachusetts Mutual 15,000,000
Nationwide Life Insurance 15,000,000
Equitable Life Insurance Co. 10,000,000
Lutheran Brotherhood 7,000,000
American United Life Insurance Co. 3,000,000
------------
$200,000,000
