EQUITY CONTRIBUTION AGREEMENT
Exhibit
10.2
EXECUTION
COPY
Equity
Contribution Agreement, dated as of September 26, 2008 (this “Equity Contribution
Agreement”), between Ripplewood Partners II, L.P., a Delaware limited
partnership (the “Contributor”), and
Interstate Bakeries Corporation, a Delaware corporation (the “Company”). Any
terms used but not defined herein have the meaning assigned to those terms in
the Investment Agreement (as defined below).
1. Equity Contribution
Agreement. To induce the Company to enter into an Investment
Agreement, dated as of September 26, 2008 (including the exhibits attached
thereto and as amended, restated, supplemented or otherwise modified from time
to time in accordance with its terms, the “Investment
Agreement”), by and between IBC Investors I, LLC, a Delaware
corporation (“Parent”), and the
Company, pursuant to which Parent agrees to, among other things, purchase shares
of New Common Stock and New Convertible Debt, and the Company agrees to issue
Series A Warrants to Parent, in each case on the terms and subject to the
conditions set forth or referred to in the Investment Agreement, the Contributor
hereby unconditionally and irrevocably commits to the Company, on the terms and
conditions set forth or referred to herein, to make an equity contribution to
Parent in cash to the extent of the payment obligations due from Parent from
time to time under the Investment Agreement, including any Parent obligation to
pay damages for a breach by Parent of the Investment Agreement (the “Obligations”); provided, however, that the
maximum amount payable by the Contributor under this Equity Contribution
Agreement shall in no event exceed $130,000,000 (the “Cap”; the
Obligations, as limited by the Cap, the “Covered
Obligations”), it being understood that the Company will not seek to
enforce this Equity Contribution Agreement without giving effect to the
Cap. It is understood and agreed that, in lieu of requiring the
Contributor to make an equity contribution to Parent in cash, at the election of
the Company, the Contributor will be required to pay directly to the Company the
full amount of the Covered Obligations that is due and payable hereunder, in
which event such payments shall be credited and applied towards the Covered
Obligations and the obligations of the Contributor under this Equity
Contribution Agreement (and of Parent under the Investment Agreement) shall be
deemed satisfied to the extent of such payments.
2. Nature of Equity
Contribution Agreement. This Equity Contribution Agreement is
an unconditional promise to contribute or to pay up to a specified amount on the
terms and conditions set forth or referred to herein and is not a guarantee of
payment or collection. In the event that any payment to the Company
in respect of the Obligations is rescinded or must otherwise be returned for any
reason whatsoever, the Contributor shall remain liable hereunder with respect to
the Covered Obligations as if such payment had not been made; provided, however, that the
aggregate payments hereunder by the Contributor to all persons shall not in any
event exceed the Cap.
3. Changes in Obligations,
Certain Waivers. The Contributor agrees that the Company may
at any time and from time to time, without notice to or further consent of
the
Contributor,
extend the time of payment of any of the Obligations, and may also make any
agreement with Parent for the extension, renewal, payment, compromise, discharge
or release thereof, in whole or in part, or for any modification of the terms
thereof or of any agreement between the Company and Parent, without in any way
impairing or affecting the Contributor’s obligations under this Equity
Contribution Agreement. The Contributor agrees that the obligations
of the Contributor hereunder shall not be released or discharged, in whole or in
part, or otherwise affected by (a) the failure of the Company to assert any
claim or demand or to enforce any right or remedy against Parent or any other
person interested in the transactions contemplated by the Investment Agreement;
(b) any change in the time, place or manner of payment of any of the Obligations
or any rescission, waiver, compromise, consolidation or other amendment or
modification of any of the terms or provisions of the Investment Agreement or
any other agreement evidencing, securing or otherwise executed in connection
with any of the Obligations (including the Contributor’s commitment letter to
Parent); (c) any change in the corporate existence, structure or ownership of
Parent; (d) any insolvency, bankruptcy, reorganization or other similar
proceeding for Parent; (e) the existence of any claim, set-off, right of
recoupment or other right that the Contributor may have at any time against
Parent or the Company, whether in connection with the Obligations or otherwise;
(f) the adequacy of any other means the Company may have of obtaining payment of
any of the Obligations; or (g) any assignment by Parent to any other person of
its obligations under the Investment Agreement. To the fullest extent
permitted by law, the Contributor hereby expressly waives any and all rights or
defenses arising by reason of any law which would otherwise require any election
of remedies by the Company. The Contributor waives promptness,
diligence, notice of the acceptance of this Equity Contribution Agreement and of
the Obligations, presentment, demand for payment, notice of non-performance,
default, dishonor and protest, notice of any Obligation incurred and all other
notices of any kind (except for notices to be provided to Parent and its counsel
in accordance with the Investment Agreement), all defenses that may be available
by virtue of any valuation, stay, moratorium law or other similar law now or
hereafter in effect, any right to require the marshalling of assets of Parent or
any other person interested in the transactions contemplated by the Investment
Agreement, and all suretyship defenses generally (other than fraud or willful
misconduct by the Company or any of its Affiliates, defenses to the payment of
the Obligations that are available to Parent under the Investment Agreement
(which shall be available to the Contributor under this Equity Contribution
Agreement) or breach by the Company of this Equity Contribution
Agreement). The Contributor acknowledges that it will receive
substantial direct and indirect benefits from the transactions contemplated by
the Investment Agreement and that the waivers set forth in this Equity
Contribution Agreement are knowingly made in contemplation of such
benefits.
The
Company hereby covenants and agrees that it shall not institute, and shall cause
its Affiliates not to institute, any proceeding or bring any other claim arising
under, or in connection with, the Investment Agreement or the transactions
contemplated thereby, against any former, current or future director, officer,
employee, agent, advisor, attorney, representative, affiliate, general or
limited partner, securityholder, member, manager, trustee or controlling person
of the Contributor (or any of their successors or assigns) or any affiliate
thereof, or against any former, current or future director, officer, employee,
agent, advisor, attorney, representative, affiliate, general or limited partner,
securityholder, member, manager, trustee or controlling person of any of the
foregoing (or any of their successors or assigns) or any affiliate
thereof. The Contributor hereby unconditionally and irrevocably
agrees not to exercise any
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rights
that it may now have or hereafter acquire against Parent that arise from the
existence, payment, performance, or enforcement of the Contributor’s Covered
Obligations under or in respect of this Equity Contribution Agreement or any
other agreement in connection therewith, including any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Company against Parent, whether or not
such claim, remedy or right arises in equity or under contract, statute or
common law, including the right to take or receive from Parent, directly or
indirectly, in cash or other property or by set-off or right of recoupment or in
any other manner, payment or security on account of such claim, remedy or right,
unless and until all of the Covered Obligations shall have been satisfied in
full. If any amount shall be paid to the Contributor in violation of
the immediately preceding sentence at any time prior to the satisfaction in full
of the Covered Obligations, such amount shall be received and held in trust for
the benefit of the Company, shall be segregated from other property and funds of
the Contributor and shall forthwith be paid or delivered to the Company in the
same form as so received (with any necessary endorsement or assignment) to be
credited and applied to the Covered Obligations, in accordance with the terms
and conditions set forth or referred to in the Investment Agreement, whether
matured or unmatured, or to be held as collateral for any Covered Obligations
thereafter arising. Notwithstanding anything to the contrary
contained in this Equity Contribution Agreement, the Company hereby agrees that
to the extent Parent is relieved by the Company of any of its obligations under
the Investment Agreement, the Contributor shall be similarly relieved of its
obligations under this Equity Contribution Agreement.
4. No Waiver; Cumulative
Rights. No failure on the part of the Company to exercise, and
no delay in exercising, any right, remedy or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by the Company of any
right, remedy or power hereunder preclude any other or future exercise of any
right, remedy or power. Each and every right, remedy and power hereby
granted to the Company or allowed it by law or other agreement shall be
cumulative and not exclusive of any other and may be exercised by the Company at
any time or from time to time.
5. Representations and
Warranties. The Contributor hereby represents and warrants
that:
(a) the
execution, delivery and performance by the Contributor of this Equity
Contribution Agreement have been duly authorized by all necessary action on the
part of the Contributor and do not conflict with any provision of (i) the
Contributor’s partnership agreement or similar organizational documents, (ii)
any contract or agreement to which the Contributor is a party or by which any of
its properties or assets is bound or (iii) any law, regulation, rule, decree,
order or judgment applicable to the Contributor or its properties or assets,
other than, in the case of clauses (ii) and (iii) above, any such items that,
individually or in the aggregate, could not reasonably be expected to have a
material adverse effect on the ability of the Contributor to perform its
obligations under this Equity Contribution Agreement;
(b) no
consent, approval or authorization of, or registration, declaration or filing
with, any governmental authority is required to be obtained or made by or with
respect to the Contributor in connection with the execution, delivery
and
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performance
of this Equity Contribution Agreement, other than such items that, individually
or in the aggregate, could not reasonably be expected to have a material adverse
effect on the ability of the Contributor to perform its obligations under this
Equity Contribution Agreement;
(c) this
Equity Contribution Agreement constitutes a legal, valid and binding obligation
of the Contributor, enforceable against the Contributor in accordance with its
terms, subject to (i) the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws affecting
creditors’ rights generally and (ii) general equitable principles (whether
considered in a proceeding in equity or at law); and
(d) the
Contributor has, and will for so long as this Equity Contribution Agreement
shall remain in effect in accordance with Section 8 hereof continue to have, the
financial capacity to pay and perform its obligations under this Equity
Contribution Agreement.
6. No
Assignment. Neither the Contributor nor the Company may assign
its rights, interests or obligations hereunder to any other person (except by
operation of law) without the prior written consent of the Company (in the case
of an assignment by the Contributor) or the Contributor (in the case of an
assignment by the Company). Notwithstanding the preceding sentence,
the Contributor may assign all or a portion of its obligations hereunder to one
or more other persons; provided, however, that no such
assignment under this sentence shall relieve the Contributor of its obligations
hereunder.
7. Notices. All
notices, requests, claims, demands and other communications hereunder must be in
writing and will be deemed given upon receipt by the parties at the following
address (or in each case at such other address for a party as may be specified
by such party in like notice):
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If
to the Contributor:
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c/o
Ripplewood Holdings L.L.C.
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Xxx
Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
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Xxx
Xxxx, XX 00000
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Attention: Xxxxxxxxxxx
Xxxxxxxxx, Esq.
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with
a copy to:
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Cravath,
Swaine & Xxxxx LLP
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Worldwide
Plaza
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000
Xxxxxx Xxxxxx
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Xxx
Xxxx, XX 00000
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Attention: Xxxxx
X. Xxxxxx, Esq.
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If
to the Company:
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00
Xxxx Xxxxxx Xxxxxxxxx
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Xxxxxx
Xxxx, XX 00000
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Attention: Xxxx
Xxxxxx, Esq.
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With
a copy to:
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Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP
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000
Xxxx Xxxxxx Xxxxx
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Xxxxxxx,
XX 00000
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Attention: J.
Xxxx Xxxxxxx, Esq.
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8. Continuing
Obligation. This Equity Contribution Agreement shall remain in
full force and effect and shall be binding on the Contributor, its successors
and assigns until all of the Covered Obligations have been satisfied in
full. Notwithstanding the foregoing, this Equity Contribution
Agreement shall terminate and the Contributor shall have no further obligations
under this Equity Contribution Agreement as of the earliest of (i) the Closing,
(ii) six months following the termination of the Investment Agreement in
accordance with its terms prior to the Closing (the “Six Month
Anniversary”); provided, however, that, in the
case of this clause (ii), if any suit, action or proceeding arising from this
Equity Contribution Agreement has been commenced in any court of competent
jurisdiction prior to the Six Month Anniversary, then this Equity Contribution
Agreement shall survive the Six Month Anniversary solely with respect to such
suit, action or proceeding until final determination thereof by such court, and
(iii) contribution by the Contributor to Parent (or, at the election of the
Company, payment by the Contributor to the Company) pursuant hereto of an
aggregate amount equal to the Cap. In the event that the Company or
any of its Affiliates asserts in any litigation relating to this Equity
Contribution Agreement that either the provisions of Section 1 hereof
limiting the Contributor’s monetary obligations to the Cap or the provisions of
Section 9 hereof are illegal, invalid or unenforceable in whole or in part,
(x) the obligations of the Contributor under this Equity Contribution
Agreement shall terminate immediately and thereupon be null and void and
(y) if the Contributor has previously made any payments under this Equity
Contribution Agreement, it shall be entitled to have such payments refunded by
the Company.
9. No
Recourse. The Company acknowledges that Parent’s assets are of
a de minimis value and that no funds are expected to be contributed to Parent
unless and until the Closing occurs. Notwithstanding anything that
may be expressed or implied in this Equity Contribution Agreement, the
Investment Agreement or any document or instrument in connection herewith or
therewith or otherwise, and notwithstanding the fact that the Contributor is a
partnership, by its acceptance of the benefits of this Equity Contribution
Agreement, the Company acknowledges and agrees that (i) it has no right of
recovery against, and no personal liability shall attach to, the former, current
or future directors, officers, employees, agents, advisors, attorneys,
representatives, affiliates, general or limited partners, securityholders,
members, managers, trustees or controlling persons of the Contributor or Parent
(or any of their successors or assigns) or any affiliate thereof or any former,
current or future director, officer, employee, agent, advisor, attorney,
representative, affiliate, general or limited partner, securityholder, member,
manager, trustee or controlling person of any of the foregoing (or any
of
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their
successors or assigns) or any affiliate thereof (collectively, the “Contributor
Affiliates”), through the Contributor, Parent or otherwise, whether by or
through attempted piercing of the corporate veil, by or through a claim by or on
behalf of Parent against the Contributor or any of the Contributor Affiliates,
including under the Contributor’s commitment letter to Parent, by or through the
Investment Agreement, by the enforcement of any judgment or assessment or by any
legal or equitable proceeding, by virtue of any statute, regulation or
applicable law, or otherwise, except for its rights to require the Contributor
(but not any of the Contributor Affiliates (including any general partner or
managing member)) to make a contribution to Parent (or, at the election of the
Contributor, payment to the Company) up to the amount of the Covered Obligations
under and to the extent provided in this Equity Contribution Agreement, (ii)
recourse against the Contributor to cause the Contributor to make a contribution
to Parent (or, at the election of the Contributor, payment to the Company)
required under this Equity Contribution Agreement shall be the sole and
exclusive remedy of the Company and all of its Affiliates, securityholders and
creditors against the Contributor and the Contributor Affiliates in respect of
any liabilities or obligations arising under, or in connection with, this Equity
Contribution Agreement, the Investment Agreement or the transactions
contemplated hereby or thereby and (iii) in no event will Parent, the
Contributor or any Contributor Affiliates be subject to liability in the
aggregate in excess of the Cap for all losses and damages arising under, or in
connection with, this Equity Contribution Agreement, the Investment Agreement
and the transactions contemplated hereby and thereby. Nothing set
forth in this Equity Contribution Agreement shall be construed to confer or give
to Parent or any other person (including any holder of any claim or interest in
the Company, any Affiliate of the Company or any person acting in a
representative capacity) other than the Company and the Contributor any rights
or remedies against any person other than the Company and the Contributor as
expressly set forth herein, and except that the Contributor Affiliates shall
also have the right to enforce the provisions of this Equity Contribution
Agreement.
10. Governing
Law. This Equity Contribution Agreement will be governed by,
and construed in accordance with, the laws of the State of New York, regardless
of the laws that might otherwise govern under applicable principles of conflicts
of laws thereof. In addition, each of the parties hereto (a) consents
to and submits itself to the exclusive jurisdiction of the United States
District Court for the Southern District of New York or, in the event that such
court does not have or declines to exercise jurisdiction, to the exclusive
jurisdiction of the state courts of the State of New York located in the City of
New York, Borough of Manhattan, in the event any dispute arises out of this
Equity Contribution Agreement, (b) agrees that it will not attempt to deny or
defeat such exclusive jurisdiction by motion or other request for leave from
such court and (c) agrees that it will not bring any action relating to this
Equity Contribution Agreement in any court other than the United States District
Court for the Southern District of New York or, in the event that such court
does not have or declines to exercise jurisdiction, in the state courts of the
State of New York located in the City of New York, Borough of Manhattan.
11. Waiver of Jury
Trial. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH
RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH
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THIS
EQUITY CONTRIBUTION AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY.
12. Entire Agreement;
Counterparts. This Equity Contribution Agreement constitutes
the entire agreement with respect to the subject matter hereof and supersedes
any and all prior discussions, negotiations, proposals, undertakings and
agreements, whether written or oral, among Parent and the Contributor and any of
their Affiliates, on the one hand, and the Company and any of its Affiliates, on
the other hand, except for the Investment Agreement. This Equity
Contribution Agreement may be executed in one or more counterparts, all of which
will be considered one and the same agreement and will become effective when one
or more counterparts have been signed by each of the parties and delivered to
the other parties.
13. Effectiveness of Equity
Contribution Agreement. This Equity Contribution Agreement
shall be of no force and effect, and shall not become effective, unless and
until the occurrence of both (a) entry of the Investment Agreement Order by the
Bankruptcy Court and (b) payment by the Company of all fees due and payable to
Parent upon entry of the Investment Agreement Order by the Bankruptcy Court in
accordance with the fee letter, dated September 12, 2008, between the Company
and Parent.
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IN
WITNESS WHEREOF, the Contributor and the Company has each caused this Equity
Contribution Agreement to be executed and delivered as of the date first written
above by its respective officer thereunto duly authorized.
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RIPPLEWOOD
PARTNERS II, L.P.,
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by
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RIPPLEWOOD
PARTNERS II, GP, L.P.,
as
its General Partner,
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by
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XX
XX GP, LLC, as its General Partner,
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by
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/s/
Xxxxxxxxxxx Xxxxxxxxx
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Name:
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Title:
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INTERSTATE
BAKERIES CORPORATION,
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by
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/s/
J. Xxxxxxx Xxxxx
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Name:
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J.
Xxxxxxx Xxxxx
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Title:
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Senior
Vice President, Chief
Financial
Officer and Treasurer
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