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Exhibit 99.1
THIRD AMENDMENT AND WAIVER TO
REVOLVING CREDIT AGREEMENT
This THIRD AMENDMENT AND WAIVER TO REVOLVING CREDIT AGREEMENT
dated as of May ___, 2005 (the "Third Amendment"), is entered into by and among
INTERSTATE BAKERIES CORPORATION, a Delaware corporation ("Parent Borrower"), a
debtor and debtor-in-possession in a case pending under Chapter 11 of the
Bankruptcy Code, each of the direct and indirect subsidiaries of the Parent
Borrower party to the Credit Agreement (as defined below) (each individually a
"Subsidiary Borrower" and collectively the "Subsidiary Borrowers"; and together
with the Parent Borrower, the "Borrowers"), each of which is a debtor and
debtor-in-possession in a case pending under Chapter 11 of the Bankruptcy Code,
JPMORGAN CHASE BANK, N.A., a national banking association (formerly known as
JPMorgan Chase Bank) ("JPMCB"), and each of the other commercial banks, finance
companies, insurance companies or other financial institutions or funds from
time to time party to the Credit Agreement (together with JPMCB, the
"Lenders"), JPMORGAN CHASE BANK, N.A., a national banking association (formerly
known as JPMorgan Chase Bank), as administrative agent (the "Administrative
Agent") for the Lenders, and JPMORGAN CHASE BANK, N.A., a national banking
association (formerly known as JPMorgan Chase Bank), as collateral agent (the
"Collateral Agent") for the Lenders.
WITNESSETH:
WHEREAS, the Borrowers, the Lenders, the Administrative Agent
and the Collateral Agent are parties to that certain Revolving Credit Agreement
dated as of September 23, 2004 and as amended by that certain First Amendment
to Revolving Credit Agreement dated as of November 1, 2004 and by that certain
Second Amendment to Revolving Credit Agreement dated as of January 20, 2005 (as
so amended, the "Credit Agreement"), pursuant to which the Lenders have made
available to the Borrowers a revolving credit and letter of credit facility in
an aggregate principal amount not to exceed $200,000,000; and
WHEREAS, the Borrowers have requested that the Lenders waive
compliance with certain of the provisions of the Credit Agreement and amend and
supplement the Credit Agreement to reflect certain modifications to the Credit
Agreement; and
WHEREAS, the Required Lenders have agreed to waive compliance
with certain of the provisions of the Credit Agreement and amend and supplement
the Credit Agreement to reflect certain modifications to the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
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Section 1. Definitions. Capitalized terms used and not
otherwise defined in this Third Amendment are used as defined in the Credit
Agreement.
Section 2. Amendments to Credit Agreement. Subject to the
conditions set forth in Section 4 hereof, the Credit Agreement is hereby
amended as follows:
2.1 The definition of the term "Consolidated EBITDA" is
hereby amended in its entirety to read as follows:
"Consolidated EBITDA" shall mean, for any period, all as
determined in accordance with GAAP and subject to such
modifications as may be satisfactory to the Administrative
Agent, the consolidated net income (or net loss) of the
Borrowers for such period, plus (a) the sum of (i)
depreciation expense, (ii) amortization expense, (iii) other
non-cash charges, (iv) net total Federal, state and local
income tax expense, (v) gross interest expense for such
period less gross interest income for such period, (vi)
extraordinary losses, (vii) any restructuring charge, and
(viii) "Chapter 11 expenses" (or "administrative costs
reflecting Chapter 11 expenses", inclusive of professional
fees) as shown on the Borrowers' consolidated statement of
income for such period, less (b) extraordinary gains.
2.2 Section 2.3(a) of the Credit Agreement is hereby amended
by replacing "$75,000,000" in clause (i) thereof with "$125,000,000."
2.3 Section 2.13(b) of the Credit Agreement is hereby amended
by deleting the second sentence thereof and substituting therefor the following
new sentence:
The Commitments shall be reduced on a pro rata basis by an
amount equal to the sum of (i) the Net Proceeds of the
subject Asset Sale required to be applied to repay the then
outstanding Loans pursuant to preceding sentence, plus (ii)
the Net Proceeds of the subject Asset Sale retained by the
Borrowers pursuant to the last clause of the preceding
sentence.
2.4 Section 6.4 of the Credit Agreement is hereby amended in
its entirety to read as follows:
Each of the Borrowers will not (and will not apply to the
Bankruptcy Court for authority to), and will cause each of
their respective Subsidiaries not to, make Capital
Expenditures during the fiscal periods of the Borrowers set
forth below, in an aggregate amount in excess of the amount
specified opposite such fiscal periods; provided that if the
amount of Capital Expenditures that are made during any such
fiscal period is less than the amount thereof that is
permitted to be made during such fiscal period, the unused
portion thereof may be carried forward to and made during the
subsequent fiscal periods:
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Maximum Capital
Fiscal Period Expenditures
------------- ---------------
(millions)
May 29, 2005 - August 20, 2005 $20.0
August 21, 2005 - November 12, 2005 21.5
November 13, 2005 - March 4, 2006 19.0
March 5, 2006 - June 3, 2006 10.0
June 4, 2006 - August 26, 2006 14.0
August 27, 2006 - October 21, 2006 9.0
2.5 Section 6.5 of the Credit Agreement is hereby amended in
its entirety to read as follows:
As of the end of each fiscal period of the Borrowers,
commencing with the fiscal period beginning May 29, 2005, the
Borrowers will not permit cumulative Consolidated EBITDA for
each fiscal period beginning May 29, 2005 and ending in each
case on the last day of the fiscal period listed below to be
less than the respective amounts specified opposite such
fiscal period:
Cumulative
Fiscal Period Ending Consolidated EBITDA
-------------------- -------------------
(millions)
June 25, 2005 $ 3.5
July 23, 2005 4.0
August 20, 2005 8.0
September 17, 2005 12.5
October 15, 2005 18.0
November 12, 2005 21.0
December 10, 2005 25.0
January 7, 2006 23.5
February 4, 2006 31.5
March 4, 2006 42.5
April 1, 2006 48.5
April 29, 2006 58.5
June 3, 2006 74.0
July 1, 2006 83.0
July 29, 2006 88.5
August 26, 2006 99.5
September 23, 2006 111.5
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2.6 Section 6 of the Credit Agreement is hereby amended by
inserting a new Section 6.17 as follows:
SECTION 6.17 Cash Restructuring Charges. (a) Each of
the Borrowers will not (and will not apply to the Bankruptcy
Court for authority to), and will cause each of their
respective Subsidiaries not to, permit cash restructuring
charges (calculated as the amount expensed or accrued by the
Borrowers or any of their Subsidiaries during such period on
account of restructuring charges that will ultimately be
settled via payment in cash or cash equivalents by the
Borrowers or any of their Subsidiaries, and as so calculated,
"Cash Restructuring Charges") for each fiscal period
beginning May 29, 2005 and ending in each case on the last
day of the fiscal period listed below to be incurred in an
amount in excess of the respective amounts specified opposite
such fiscal period; provided that if the amount of Cash
Restructuring Charges that are incurred during any such
fiscal period is less than the amount thereof that is
permitted to be incurred during such fiscal period, the
unused portion thereof may be carried forward to and incurred
during the subsequent fiscal periods:
Maximum Cash
Fiscal Period Ending Restructuring Charges
-------------------- ---------------------
(millions)
November 12, 2005 $44.0
June 3, 2006 21.0
October 21, 2006 7.7
(b) The amount of Cash Restructuring Charges accrued
since the Filing Date but unpaid as of May 28, 2005 shall not
exceed $21,000,000.
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Section 3. Waivers Under the Credit Agreement. Subject to the
conditions set forth in Section 4 hereof, the Lenders hereby agree as follows:
3.1 The Lenders hereby waive the Events of Default arising
under Section 7.1(m) of the Credit Agreement to the extent but solely
to the extent that such Events of Default are a result of the
Borrowers having made up to $1,170,000 in Pre-Petition Payments on or
prior to the date hereof to General Electric Capital Business Asset
Funding Corporation on account of the pre-petition Indebtedness of the
Borrowers under that certain: (i) Master Lease Purchase Agreement by
and between General Electric Capital Business Asset Funding
Corporation and Interstate Brands Corporation, dated April 9, 2001;
(ii) Lease Purchase Addendum No. One by and between General Electric
Capital Business Asset Funding Corporation and Interstate Brands
Corporation, dated April 9, 2001; and (iii) Lease Purchase Closing
Schedule by and between General Electric Capital Business Asset
Funding Corporation and Interstate Brands Corporation, dated June 29,
2001. Such waiver is effective only with respect to the Pre-Petition
Payments specifically identified herein.
3.2 The Lenders hereby waive any default arising out of the
Borrowers' bring down or restatement of the representations and
warranties in Section 3 of the Agreement pursuant to Section 4.2 of
the Agreement after the date hereof to the extent but solely to the
extent, that such default pertains to the Parent Borrower's failure to
timely file its Form 10-Qs for the second and third quarters of fiscal
year 2005, its Form 10-K for fiscal year 2005, or its Form 10-Qs for
the first and second quarters of fiscal year 2006, in each case with
the United States Securities and Exchange Commission (the "SEC").
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3.3 The Lenders hereby (i) acknowledge that the consolidated
balance sheet and related statements of operations, stockholders'
equity and cash flows of Interstate Bakeries Corporation for any
fiscal period ending prior to December 31, 2005 (collectively, the
"Financial Statements") and the related Financial Officer's
Certificates (the "Certificates"), will state that the Financial
Statements, in addition to such qualifications as may otherwise be
permitted by the Agreement, are qualified by and subject to (x)
certain adjustments related to pension and other previously disclosed
events and circumstances that will be quantified (1) by the
finalization of the audit of the fiscal year ended May 29, 2004 ("FY
2004") and contained in the Form 10-K for FY 2004 that will be
delivered to the SEC when available and (2) in the results for each
intervening fiscal quarterly or annual period ending prior to December
31, 2005 and contained in the respective Form 10-K or 10-Q, as the
case may be, for such fiscal period and that will be delivered to the
SEC when available, (y) the omission of certain earnings per share
information and the required footnotes to the financial statements,
and (z) the omission of certain expense allocations typically
reflected in Borrowers' financial statements; (ii) extend the date for
delivery of the audited annual financial statements for the fiscal
year ending May 28, 2005 (and related opinion of accountants and
Financial Officer certificate) under Section 5.1(a) of the Credit
Agreement until December 31, 2005; (iii) to the extent necessary to
accommodate the qualifications in (i) above, waive the requirement of
Section 5.1(b) of the Credit Agreement that the Certificates and the
accompanying Financial Statements with respect to any such quarterly
period only be qualified by and subject to normal year-end audit
adjustments and (iv) consent to the inclusion in the related
Certificates of the additional qualifications set forth in (i) above.
3.4 The foregoing waivers are effective only in the specific
instances referenced herein. The Borrowers hereby acknowledge their
obligations under Sections 5.1(a) and 5.1(b) of the Agreement and
acknowledge that the foregoing waivers shall not in any way waive
compliance with the provisions of Sections 5.1(a), 5.1(b) or 7.1(m) of
the Agreement in any other respect.
Section 4. Effectiveness. The effectiveness of this Third
Amendment is conditioned upon: (i) the Administrative Agent's receipt of
executed counterparts of this Third Amendment which, when taken together, bear
the signatures of the Borrowers and the Required Lenders (or, in the case of
any party as to which an executed counterpart shall not have been received, the
Administrative Agent shall have received written confirmation from such party
of execution of a counterpart hereof by such party); and (ii) the Borrowers'
payment of (A) an amendment fee to the Administrative Agent for the respective
accounts of the Lenders voting in favor of this Third Amendment in the amount
of ten (10) basis points of such Lenders' Commitments, and (B) any unpaid
balance of the fees and expenses due and payable by the Borrowers pursuant to
the Agreement. The "Effective Date" shall mean the first Business Day on which
the foregoing conditions are fully satisfied.
Section 5. Representations and Warranties. Each Borrower
represents and warrants to the Lenders that:
5.1 After giving effect to the amendments contained herein
and taking into account all prior written waivers and amendments in respect of
the Credit Agreement, the representations and warranties of the Borrowers
contained in Section 3 of the Credit Agreement are true and correct in all
material respects on and as of the date hereof as if such representations and
warranties had been made on and as of the date hereof (i) other than, with
respect to Section 3.7(b) thereof, the Parent Borrower's failure to timely file
its Form 10-Qs for the second and third quarters of fiscal year 2005 with the
United States Securities and Exchange Commission and (ii) except to the extent
that any such representations and warranties specifically relate to an earlier
date; and
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5.2 After giving effect to the amendments contained herein
and taking into account all prior written waivers and amendments in respect of
the Credit Agreement, (i) each Borrower is in compliance with all the terms and
provisions set forth in the Credit Agreement, and (ii) no Event of Default has
occurred and is continuing or would result from the execution, delivery and
performance of this Third Amendment.
Section 6. Choice of Law. THIS THIRD AMENDMENT SHALL IN ALL
RESPECTS BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN SUCH
STATE AND THE BANKRUPTCY CODE.
Section 7. Full Force and Effect. Except as specifically
amended hereby, all of the terms and conditions of the Credit Agreement shall
remain in full force and effect, and the same are hereby ratified and
confirmed. No reference to this Third Amendment need be made in any instrument
or document at any time referring to the Credit Agreement, and a reference to
the Credit Agreement in any such instrument or document shall be deemed a
reference to the Credit Agreement as amended hereby.
Section 8. Counterparts. This Third Amendment may be executed
in any number of counterparts, each of which shall constitute an original, but
all of which taken together shall constitute one and the same agreement.
Section 9. Headings. Section headings used herein are for
convenience only and are not to affect the construction of or be taken into
consideration in interpreting this Third Amendment.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Third
Amendment to be duly executed as of the day and the year first written.
BORROWERS:
INTERSTATE BAKERIES CORPORATION
By:___________________________________
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
ARMOUR AND MAIN REDEVELOPMENT CORPORATION
By:_____________________________________
Name: Xxxxxx X. Xxxxxxxxx
Title: Director
XXXXX'X INN QUALITY BAKED GOODS, LLC
By:_____________________________________
Name: Xxxxxx X. Xxxxxxxxx
Title: Director
IBC SALES CORPORATION
By:_____________________________________
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
IBC SERVICES, LLC
By:_____________________________________
Name: Xxxxxx X. Xxxxxxxxx
Title: President
IBC TRUCKING, LLC
By:_____________________________________
Name: Xxxxxx X. Xxxxxxxxx
Title: President
INTERSTATE BRANDS CORPORATION
By:_____________________________________
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
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NEW ENGLAND BAKERY DISTRIBUTORS, L.L.C.
By:_____________________________________
Name: Xxxxxx X. Xxxxxxxxx
Title: Director
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LENDERS:
JPMORGAN CHASE BANK, N.A.
Individually, as Administrative Agent
and as Collateral Agent
By:_____________________________________
Name:
Title:
Lender signature page to
Third Amendment to
Revolving Credit Agreement
________________________________
By: __________________________
Name:
Title:
