-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Idfkpn8+vNbQfqQ3WqoEE3UC2ZgeXRqmQ3SH9MAiRe4UYQS/8dLptYNAIeGSGP8b c0UVXpw4qFJpxs72uD7Mag== 0000912057-00-011712.txt : 20000316 0000912057-00-011712.hdr.sgml : 20000316 ACCESSION NUMBER: 0000912057-00-011712 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20000229 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000315 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EAGLE FOOD CENTERS INC CENTRAL INDEX KEY: 0000030908 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 363548019 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-17871 FILM NUMBER: 570495 BUSINESS ADDRESS: STREET 1: RTE 67 KNOXVILLE RD CITY: MILAN STATE: IL ZIP: 61264 BUSINESS PHONE: 3097877730 MAIL ADDRESS: STREET 1: PO BOX 6700 CITY: ROCK ISLAND STATE: IL ZIP: 61204-6700 8-K 1 8-K 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): February 29, 2000 EAGLE FOOD CENTERS, INC. (Exact name of registrant as specified in the charter) Commission File Number 0-17871 DELAWARE 36-3548019 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) RT. 67 & KNOXVILLE RD., MILAN, ILLINOIS 61264 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (309) 787-7700 ITEM 3. BANKRUPTCY OR RECEIVERSHIP. (a) On February 29, 2000, the Registrant, Eagle Food Centers, Inc. filed a Voluntary Petition under Chapter 11 of the Bankruptcy Code (the "Petition") with the United States Bankruptcy Court for the District of Delaware - -IN RE EAGLE FOOD CENTERS, INC., DEBTOR, Chapter 11, Case No. 00-01311. The directors and officers of Eagle Food Centers, Inc. are expected to remain in possession during the proceedings, subject to the supervision of the Bankruptcy Court. As of the date of this report, no plan of reorganization has been filed by the Registrant and no trustee has been appointed. On February 29, 2000 Eagle Food Centers, Inc. issued a press release in which it announced: (i) the filing of the Petition, (ii) the negotiation of a $50 million debtor in possession ("DIP") credit facility with its current largest secured lender, Congress Financial Corporation (Central), (a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference); and (iii) that the largest identifiable unsecured institutional holders of its 8 5/8% Senior Notes due April 15, 2000, representing $29 million of the $100 million issue, had entered into agreements (in the form of Exhibit 99.2 attached hereto and incorporated herein by reference) to vote in favor of a proposed plan of reorganization. A copy of the press release issued on February 29, 2000 is annexed as Exhibit 99.3 hereto and incorporated herein by reference. On March 2, 2000 Eagle Food Centers issued a press release in the form of Exhibit 99.4 attached hereto and incorporated herein by reference, announcing that it had obtained the Bankruptcy Court's approval of interim debtor in possession financing, payment of certain prepetition claims and certain other requests, scheduling a hearing on March 21, 2000 to consider its request for final approval of the $50 million DIP and to pay prepetition claims of its remaining trade creditors, and scheduling a confirmation hearing on a plan of reorganization on May 17, 2000. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits: 99.1 Congress Financial Debtor-in-Possession Credit Facility dated March 1, 2000. 99.2 Form of Noteholder agreements to vote for Plan of Reorganization. 99.3 Press release dated February 29, 2000. 99.4 Press release dated March 2, 2000. SIGNATURES 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. EAGLE FOOD CENTERS, INC. (Registrant) By: /s/ S. Patric Plumley --------------------------------- S. Patric Plumley Senior Vice President- Chief Financial Officer and Secretary Dated: March 15, 2000 INDEX TO EXHIBITS Exhibit No. Description: 99.1 Congress Financial Debtor-in-Possession Credit Facility dated March 1, 2000. 99.2 Form of Noteholder agreements to vote for Plan of Reorganization. 99.3 Press Release dated February 29, 2000. 99.4 Press Release dated March 2, 2000. EX-99.1 2 CONGRESS FINANCIAL DEBTOR CREDIT FACILITY Exhibit 99.1 CONVERSION AGREEMENT AND AMENDMENT TO FINANCING AGREEMENTS THIS CONVERSION AGREEMENT AND AMENDMENT TO FINANCING AGREEMENTS is made and entered into as of March 1, 2000 (the "Conversion and Amendment"), by and between EAGLE FOOD CENTERS, INC., as debtor-in-possession ("Debtor") and CONGRESS FINANCIAL CORPORATION (CENTRAL), as lender ("Congress"). RECITALS A. Eagle Food Centers, Inc., as pre-petition debtor, and Congress are the parties to that certain Loan and Security Agreement dated as of May 25, 1995, as previously amended (the "Pre-Petition Credit Agreement"), and the other Financing Agreements, as defined in the Pre-Petition Credit Agreement (all such Financing Agreements, together with the Pre-Petition Credit Agreement, in each case prior to this Amendment or any other amendment executed on or after the date hereof, collectively, the "Original Financing Agreements"). Capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the Pre-Petition Credit Agreement, as amended hereby. B. Debtor has filed a petition for relief under chapter 11 of title 11 of the United States Code 11 U.S.C. section 101, et seq. (the "Bankruptcy Code"), in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"), on February 29, 2000 (the "Petition Date"), Case No. 00-1311 (RRM) (the "Case"). C. The commencement of the Case constituted an Event of Default under the Pre-Petition Credit Agreement D. In order to continue its operation as a debtor-in-possession under the Bankruptcy Code pending its reorganization, Debtor has requested that Congress continue making secured loans in its sole discretion to the Debtor (the "DIP Financing"). Congress is willing to continue the $50,000,000 line of credit for the Debtor only if, among other things, the Original Financing Agreements are amended as hereinafter set forth and the Bankruptcy Court enters an interim and final order approving this Conversion and Amendment and otherwise in form and substance satisfactory to Congress (the "Interim Order", and the "Final Order," respectively). NOW, THEREFORE, in consideration of the premises, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 1. Amendments. The parties hereby amend the Financing Agreements as follows: 1 (a) From and after the date hereof, all references in the Financing Agreements to "Eagle Food Centers, Inc.," "Eagle," "Borrower," "Grantor," "Mortgagor," the "Company" and all other references to Eagle Food Centers, Inc. in any capacity shall be deemed to be references to Eagle Food Centers, Inc. both before the Petition Date, as pre-petition debtor, and on and after the Petition Date, as debtor-in-possession in the Case. (b) Section 1 of the Pre-Petition Credit Agreement is hereby amended by adding in their proper alphabetical order the definitions of "Conversion and Amendment," "Bankruptcy Code," "Bankruptcy Court," "Case," "DIP Financing," "Original Financing Agreements," "Petition Date," and "Pre-Petition Credit Agreement," set forth in the recitals of this Amendment. (c) Section 1 of the Pre-Petition Credit Agreement is hereby further amended by adding the following definitions in their proper alphabetical order (to the extent such terms are not already defined in the Pre-Petition Credit Agreement) and by substituting the following definitions for the existing definitions of such terms (to the extent such terms are currently defined in the Pre-Petition Credit Agreement): "Agreement" shall mean the Loan and Security Agreement, dated as of May 25, 1995, as previously amended or otherwise modified including as amended by the Conversion and Amendment and as the foregoing may hereafter be extended, amended or supplemented, including pursuant to any order of the Bankruptcy Court. "Debtor" shall mean Eagle Food Centers, Inc. as debtor and debtor-in-possession in the Case under the Bankruptcy Code. "Final Order" shall mean either (i) the Interim Order which has become final pursuant to the terms of ordering paragraph 27 of the Interim Order; or (ii) an order of the Bankruptcy Court entered in the Case after the Final Hearing as defined in the Interim Order, inter alia, authorizing the Debtor, as debtor-in-possession, to incur secured indebtedness pursuant to Section 364 of the Bankruptcy Code, which order shall be in form and substance satisfactory to Congress in its sole discretion. "Financing Agreements" shall mean the Loan and Security Agreement dated as of May 25, 1995, and all amendments thereto, as extended, amended and supplemented by the Conversion and Amendment, the Interim Order, the Final Order, and all security agreements, financing statements, lease assignments, guaranties, lockbox and/or blocked account agreements, letters of credit and other agreements, instruments, documents and written indicia of contractual obligations between Debtor and Lender, any Affiliate of Debtor and Lender, any Person owning Collateral and Lender, and/or any Person guaranteeing all or any portion of the Obligations and Lender, in connection with the transactions contemplated 2 hereby, whether pre-petition or post-petition, as each such document has been and may from time to time be amended or supplemented. "Interim Order" shall mean the order of the Bankruptcy Court entered in the Case pursuant to Sections 363 and 364 of the Bankruptcy Code, inter alia, authorizing Debtor, as debtor-in-possession, to enter into that certain Conversion and Amendment by and among Debtor and Lender, which order shall be in form and substance satisfactory to Lender. "Maturity Date" shall mean the date on which the Agreement ceases to continue in full force and effect pursuant to Section 12.1(a) of the Agreement. "Revolving Loans" shall mean any loan or extension of credit, whether made before or after the Petition Date, by Lender pursuant to the Financing Agreements. (d) The definition of "Availability Reserves" as contained in Section 1 of the Pre-Petition Credit Agreement is amended by inserting in the first line thereof following the phrase "shall mean," the following: "an amount equal to all outstanding principal under the Pre-Petition Credit Agreement and all interest, charges, fees, costs and expenses as of the commencement of the case, including any amounts attributable to the foregoing that Congress may from time to time assert and including the amount of the "Carve-Out" as set forth in Section 10.1(h), plus" (e) Section 4.2 of the Pre-Petition Credit Agreement is amended by deleting the "and" at the end of subsection (a), by replacing the final period at the end of subsection (b) with a semi-colon, and by adding, in their proper order as subsections (c) and (d) thereto, the following: "(c) upon the making of any Loans or the provision of any Letter of Credit Accommodations to Borrower after the Petition Date, which amounts are not concurrently collected by Lender pursuant to section 6 hereof; the Borrower shall have previously or contemporaneously delivered to Lender a detailed budget setting forth the projected requirements for funding the Borrower's continued operations from the date of the funding through the confirmation of the Case (the "Budget"); and (d) if, after giving effect to the making of such Loans or the provision of such Letter of Credit Accommodations to Borrower, the aggregate principal amount of the Loans plus the aggregate Letter of Credit Accommodations would exceed $30,000,000, the Lender shall have entered into one or more agreements, in a form and substance satisfactory to Lender in its sole discretion, providing for the participation by one or 3 more Persons in the Loans and the Letter of Credit Accommodations in an amount acceptable to Lender in its sole discretion." (f) Section 5 of the Pre-Petition Credit Agreement is amended by adding the following language following the phrase "and wherever located" and immediately prior to the final parenthetical: ",whether arising or acquired before, on or after the Petition Date" (g) The Pre-Petition Credit Agreement is amended by adding the following as Section 6.7 thereof: "Application of Payments. Debtor and Lender agree that, only if the failure to apply such amounts to the Obligations arising before the Petition Date would result in such Obligations being undersecured, Lender may apply all amounts received by Lender after the Petition Date to payment of the Obligations arising before the Petition Date before applying any such amounts to Obligations arising on or after the Petition Date. Otherwise all such amounts shall be applied to the Obligations arising after the Petition Date only. Debtor hereby irrevocably agrees that, subject to the preceding limitations, Lender shall have the continuing exclusive right to apply and to reverse and reapply any and all payments received at any time or times hereafter against the Obligations in such manner as Lender may deem advisable notwithstanding any entry by Lender upon any of its books and records." (h) Section 7.1 of the Pre-Petition Credit Agreement is amended by replacing subsection (c) thereof with the following: "(c) at all times that the Excess Loan Availability is less than or equal to $20,000,000, Debtor shall furnish Lender on each Friday of each week (or if any such Friday is not a Business Day, the next Business Day) a report setting forth (i) daily cash flow results for the four week period ending on the immediately preceding Friday and also a reconciliation comparing actual expenses paid to the Budget as contemplated by section 4.3(c) hereto, (ii) daily cash flow projections for the four week period beginning on the immediately preceding Saturday, (iii) the actual and projected amount of the Value of Eligible Inventory (i.e., Inventory, Slow Moving Inventory and Collateral) as of the prior Business Day, (iv) in the case of each such report required to be delivered on the last Friday of each month, monthly cash flow projections for each of the next four months; and (d) such other reports as to Collateral and such other financial and operating information as Lender may reasonably request from time to time." 4 (i) The Pre-Petition Credit Agreement is amended by replacing Section 10.1(a), (d), (e), (f), (g), (h), (i), (j), (k), (l) and (m) thereof with the following, and by addition new subsections corresponding to new Section 10.1(n), (o), (p) and (q) below: "(a) Debtor fails to pay when due any of the Obligations in accordance with the terms of the Financing Agreements or fails to perform any or all of the terms, covenants, conditions or provisions contained in the Financing Agreements; (d) Conversion of the Case to a case under Chapter 7 of the Bankruptcy Code; (f) appointment of a trustee or an examiner in the Case or Debtor's application for, consent to, or acquiescence in, any such appointment; (g) failure of Debtor to obtain a Final Order (in form and substance satisfactory to Lender) within 45 days after the Petition Date, or such later date as Lender may consent to in writing after the date hereof; (h) except as expressly permitted in the Interim Order or the Final Order, which permission shall include the request for a $250,000 carve-out for professional fees and disbursements as set forth in the Interim Order (the "Carve Out"), the filing by Debtor, as debtor-in-possession, of any application for approval or allowance of, or the entry of any order approving or allowing, any administrative expense claim in the Case having any priority over, or being pari passu with, the administrative priority of the DIP Indebtedness (as defined in the Interim Order or the Final Order); (i) the entry of an order in the Case granting relief from the automatic stay of Section 362 of the Bankruptcy Code to any holder or holders of a lien or security interest on any material Collateral and allowing such holder or holders to foreclose or otherwise realize upon such liens and security interests; (j) any stay, reversal, modification or other amendment in any respect (except to the extent acceptable to Lender) of the Interim Order or the Final Order; (k) any of the Financing Agreements shall cease to be in full force and effect, or any liens and security interests granted to Lender under the Financing Agreements shall cease to be in full force and effect, or any liens and security interests granted to Lender under the Financing Agreements shall cease to be valid; 5 (l) Debtor, as debtor-in-possession, voluntarily or involuntarily dissolves or is dissolved, terminates or is terminated, liquidates or is liquidated or ceases the operation of any material portion of its business, other than the 19 store closings to which Congress has previously consented; (m) (A) the filing of any motion or proceeding with the Bankruptcy Court, which is not dismissed, denied with prejudice or otherwise resolved to the satisfaction of Lender within 45 days of such filing, challenging or seeking otherwise to modify, limit, subordinate or avoid the priority of any Obligations or the perfection or priority of Lender's pre-petition or post-petition liens on any material portion of the Collateral, or seeking to impose, surcharge or assess against Lender, its claims or its Collateral any costs or expenses, whether pursuant to Section 506(c) of the Bankruptcy Code or otherwise, or (B) the entry of any order having any such effect; (n) any violation by Debtor, as debtor-in-possession, of any material term or provision of the Interim Order or the Final Order; (o) the filing of any motion or application with the Bankruptcy Court seeking the entry of, or the entry of, an order approving any subsequent debtor-in-possession facility for borrowed money unless such subsequent facility and such court order expressly provide for the final payment in full to Lender of all Obligations prior to or simultaneously with any initial borrowings under such subsequent facility; (p) any event or circumstance shall occur or exist and such event or circumstance is likely, in the Lender's reasonable judgment, to have a Material Adverse Effect; or (q) there shall be a default or an event of default under any of the other Financing Agreements." (j) The Pre-Petition Credit Agreement is amended by replacing Section 12.1(a) thereof with the following: "(a) This Agreement and the other Financing Agreements shall be effective as of the date set forth on the first page hereof and shall continue in full force and effect until the earliest to occur of the following, at which time (and except as Lender may otherwise agree in writing in its sole discretion), this Agreement shall immediately and automatically terminate and all Obligations shall be immediately due and payable (such date of termination being the "Maturity Date"): (i) April 15, 2002; 6 (ii) the date of final payment and satisfaction in full of the Obligations and termination of the DIP Financing pursuant to this Agreement; (iii) the effective date of any confirmed plan of reorganization in the Case; (iv) the dismissal of the Case; or (v) Lender's election, in its sole discretion, to terminate this Agreement upon the occurrence of any Event of Default. The parties agree that Lender shall have the right in its sole discretion to determine whether to grant any extensions to the Maturity Date set forth in subparagraph (i) above. No termination of this Agreement shall relieve or discharge Debtor of its duties, obligations and covenants hereunder until all Obligations have been indefeasibly paid and satisfied in full in cash, and Lender's continuing security interest in the Collateral shall remain in effect until such duties, obligations, and covenants have been fully discharged and Lender's claim has been fully and finally allowed by order of the Bankruptcy Court. Upon the effective date of termination or non-renewal of the Financing Agreements, Borrower shall pay to Lender, in full, all outstanding and unpaid Obligations and shall furnish cash collateral to Lender in such amounts as Lender determines are reasonably necessary to secure Lender from loss, cost, damage or expense, including attorneys' fees and legal expenses, in connection with any or all issued and outstanding Letter of Credit Accommodations and checks or other payments provisionally credited to the Obligations and/or as to which Lender has not yet received final and indefeasible payment. Such cash collateral shall be remitted by wire transfer in U.S. funds to such bank account of Lender, as Lender may, in its discretion, designate in writing to Borrower for such purpose. Interest shall be due until and including the next Business Day, if the amounts so paid by Borrower to the bank account designated by Lender are received in such bank account later than 12:00 noon, Chicago time." 2. Debtor's Agreement to Assume Certain Obligations and be Bound and Confirmation of Security Interest. The Debtor as debtor-in-possession in the Case, hereby (a) agrees to be bound by the terms of the Financing Agreement as if all references therein to "Eagle Food Centers, Inc.," "Eagle," "Borrower," "Debtor," "Grantor," "Mortgagor," the "Company" and all other references to Debtor in any other capacity included a reference to it as debtor-in-possession, (b) specifically confirms that the security interests described in the Original Financing Agreements include a duly authorized grant by it of security interests in its assets, whether arising or acquired before or after the Petition Date, to secure payment of the 7 Obligations arising both before and after the Petition Date, and (c) grants Liens in favor of Congress on the post-petition assets of Debtor of the type in which Congress was granted a pre-petition security interest under the Original Financing Agreements; provided, however, that the provisions of clauses (b) and (c) shall be subject to the provisions of ordering paragraph 6 of the Interim Order (Limitations on Cross-Collateralization and Liens). 3. Exclusion of Pre-Petition Debt. Other than as provided in ordering paragraphs J,5 and 6 of the Interim Order and as set forth in Paragraph 2(b) and (c) above, this Agreement (a) is not intended nor shall it be interpreted to effect an assumption of the Debtor's Obligations under the Pre-Petition Credit Agreement which arise from any pre-petition principal, interest, charges, fees, costs or expenses, and (b) is not intended nor shall it be interpreted to prejudice in any way the rights of Congress to assert such Obligations as pre-petition claims in the Case. 4. Entire Agreement and Acknowledgements of the Parties. Congress and the Debtor agree that the amendments set forth in this Conversion and Amendment as modified by the Interim Order constitute the entire agreement of the parties with respect to the matters set forth herein, shall be limited precisely as written and shall not be deemed to be a consent to any waiver, amendment or modification of any other term or condition of any of the Financing Agreements. 5. Conditions Precedent. The effectiveness of this Conversion and Amendment shall be subject to satisfaction of the following conditions (any one or all of which may be waived by Congress in its sole discretion): (a) Receipt by Congress of counterparts of this Conversion and Amendment, duly executed by Congress and the Debtor; (b) Entry by the Bankruptcy Court of the Interim Order in form and substance satisfactory to Congress; and (c) Receipt by Congress of any and all further agreements, certificates or documents as Congress shall reasonably request together with any consents from third party creditors of Debtor deemed necessary by Congress. 6. References in Other Documents. All references to any of the original Financing Agreements shall be deemed to be a reference to such Financing Agreement as amended. 7. Miscellaneous. (a) To induce Congress to enter into this Conversion and Amendment, Debtor hereby represents and warrants to Congress that Debtor has full corporate power and authority to enter into this Conversion and Amendment, that this Conversion and Amendment has been duly authorized, executed and delivered by Debtor, and that this 8 Conversion and Amendment constitutes a legal, valid and binding obligation of Debtor, enforceable against Debtor in accordance with its terms. (b) This Conversion and Amendment may be signed in any number of counterparts, each of which constitutes an original, but all of which, taken together, shall constitute one and the same instrument. (c) It is the parties' intention that this Conversion and Amendment be interpreted in such a way that it is valid and effective under applicable law; however, if one or more of the provisions of this Conversion and Amendment shall for any reason be found to be invalid or unenforceable, the remaining provisions of this Conversion and Amendment shall be unimpaired. 8. Choice-of-Law. Any dispute between Congress and Debtor arising out of, connected with, related to, or incidental to the relationship established between them in connection with this Conversion and Amendment, and whether arising in contract, tort, equity or otherwise, shall be resolved in accordance with the internal laws and not the conflicts of law provisions of the State of Illinois. [THIS SPACE INTENTIONALLY LEFT BLANK] 9 IN WITNESS WHEREOF, the parties have duly executed and delivered this Conversion and Amendment as of the day and year first above written. EAGLE FOOD CENTERS, INC., as debtor-in-possession By: /s/ S. Patric Plumley ------------------------------ Name: S. Patric Plumley ---------------------------- Title: Sr. VP-CFO ---------------------------- CONGRESS FINANCIAL (CENTRAL) CORPORATION By: /s/ Steven Linderman ------------------------------ Name: Steven Linderman ---------------------------- Title: First Vice President ---------------------------- [Conversion Agreement and Amendment to Financing Agreements] 10 EX-99.2 3 FORM OF NOTEHOLDER AGREEMENT Exhibit 99.2 Eagle Food Centers, Inc. Route 67 at Knoxville Road Milan, Illinois 61264 February __, 2000 To the Holders of 8 5/8% Senior Notes due April 15, 2000 of Eagle Food Centers, Inc. Identified on the Signature Page Hereof: This letter agreement (this "Agreement") sets forth the terms on which you have agreed to vote in favor of a plan of reorganization to be filed by Eagle Food Centers, Inc. (the "Company"), in connection with their anticipated Chapter 11 bankruptcy filing, under which the Company will propose to modify the payment terms and obligations under the 8 5/8% Senior Notes due April 15, 2000 (the "Old Notes"), on behalf of all of your interests in the Old Notes, according to terms substantially similar to those set forth herein and/or in the exhibits and schedule attached hereto. In exchange for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the undersigned beneficial owner of, or holder of investment authority over, the Old Notes (the "Noteholder"), intending to be legally bound, hereby agree as follows: (i) The Note Restructuring. The Company intends to file a prepackaged, prearranged, prenegotiated or traditional voluntary case (the "Bankruptcy Case") under Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code"). In connection with the Bankruptcy Case, the Company intends to file a plan of reorganization (the "Plan") that provides for a modification of the terms under the Old Notes by replacing the Old Notes with replacement notes (the "New Notes"), which New Notes will have the material terms set forth in Schedule A hereto and in all other respects will have terms substantially identical with the terms of the Old Notes. (ii) Representations of Noteholder. Noteholder hereby represents and warrants to the Company as follows: (a) Noteholder is duly organized, validly existing and in good standing under the laws of Noteholder's state of organization; (b) Noteholder has the requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder; (c) the execution and delivery of this Agreement and the performance by Noteholder of its obligations hereunder have been duly authorized by all necessary action; (d) this Agreement has been duly executed and delivered by Noteholder and constitutes the valid and binding obligation of Noteholder, enforceable against Noteholder in accordance with its terms; (e) as of the date hereof, Noteholder is the beneficial owner of, or holder of investment authority over, Old Notes in the aggregate principal amount set forth below such Noteholder's name on the signature page hereof (the "Noteholder's Old Notes"), and beneficially owns, or has investment authority over, no other Old Notes, and the registered holder and custodial party for the Noteholder's Old Notes are as set forth on the signature page hereof; (f) Noteholder has received and reviewed this Agreement and all schedules and exhibits hereto, and, assuming the representations of the Company herein to be true and correct, has received all such information as it deems necessary and appropriate to enable it to evaluate the financial risk inherent in the New Notes; (iii) Representations of The Company. The Company hereby represents and warrants to Noteholder as follows: (i) the Company is a corporation duly organized, validly existing and in good standing under the laws of Delaware; (ii) the Company has the requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder; (iii) the execution and delivery of this Agreement and the performance by the Company of its obligations hereunder have been duly authorized by all necessary action; (iv) this Agreement has been duly executed and delivered by the Company and constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms; (v) the financial and other information concerning the Company which the Company or its representatives have made available to Noteholder (other than any projected financial information included therein) was complete and correct in all material respects when delivered and did not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in light of the circumstances under which such statements were made, and the projected financial information concerning the Company, which the Company or its representatives made available to Noteholder was prepared in 2 good faith and on the basis of assumptions which, in light of the circumstances under which they were made, were reasonable; and (vi) the Company does not own (beneficially or otherwise) or control any Old Notes. (iv) Agreement to Forbear. Noteholder agrees during the term of this Agreement (i) to neither take any action to accelerate the indebtedness due under the Old Notes nor direct the trustee (the "Trustee") under the indenture for the Old Notes (the "Old Indenture") to pursue any right or remedy under the Old Indenture or otherwise; and (ii) not to initiate, or have initiated on its behalf, any litigation or proceeding of any kind against the Company, its subsidiaries and/or its affiliates other than to enforce this Agreement. Notwithstanding the foregoing, the Noteholder reserves and retains, and does not waive, any rights or remedies it may have against the Company under the Indenture or otherwise except as such rights or remedies may be modified in a confirmed Plan. (v) Agreement to Vote in Favor of Plan of Reorganization. Noteholder hereby agrees to vote in favor of the Plan, whether it is prepackaged, prearranged, prenegotiated or traditional. Noteholder's agreements with respect to the Plan, and Noteholder's vote in favor of the Plan, shall be conditioned on the terms of the Plan and all related documents being consistent in all material respects with the terms set forth on Schedule A and being in form and substance reasonably acceptable to the Noteholder. If the Company files the Plan and has complied with this Agreement, Noteholder agrees not to object to, and to fully support, the Plan, provided, however, that such agreement and all other obligations of Noteholder under this Agreement shall terminate if (i) the Bankruptcy Case is not commenced prior to March 8, 2000 and (ii) the Plan is not confirmed within 90 days after commencement of the Bankruptcy Case. Noteholder also agrees to execute and deliver to the Company, within three business days after solicitation materials are delivered to the Noteholder and the solicitation is commenced, a ballot in a form reasonably acceptable to the Noteholder indicating Noteholder's acceptance of the Plan. Notwithstanding any other provision of this Agreement, the Plan will provide that if the order confirming the Plan is not substantially consistent with the Plan, it shall be a condition to confirmation that the order be satisfactory to Noteholder and that any amendment of the Plan or waiver of conditions to confirmation and effectiveness shall require the consent of the Noteholder. Noteholder further agrees not to oppose the Company's request for the entry of customary first day orders after to commencement of the Bankruptcy Case. (vi) Interest. All interest unpaid and accrued under the Old Indenture through and including the effective date of the Plan contemplated by this Agreement, shall be paid, in cash, at the effective date of such plan. In the event the Plan 3 contemplated by this Agreement is not confirmed, there is no assurance or promise by the Company that such interest will be paid. (vii) Certain Conditions. In addition to the other conditions to Noteholder's obligations set forth herein, each obligation and liability of Noteholder under this Agreement is conditioned in its entirety upon (a) the truth of the representations and warranties of the Company set forth herein and performance by the Company of its agreements and covenants herein contained, (b) the terms and conditions of the treatment of the Old Notes under the Plan not materially differing from those set forth herein, (c) the Plan containing no material conditions other than those described in this Agreement, (d) the Agreement not having been terminated pursuant to Section (viii) hereof, and (e) the Plan being consistent in all material respects with the terms and provisions of this Agreement. (viii) Termination of Agreement. In the event that (a) the Bankruptcy Case is not commenced by March 8, 2000, or (b) the Plan, substantially in a form consistent with this Agreement, shall not have been confirmed within 90 days of the commencement date of the Bankruptcy Case, then this Agreement shall automatically terminate. (ix) No Third-Party Beneficiaries. This Agreement shall be solely for the benefit of the parties hereto and the Noteholders who have entered into agreements with the Company substantially identical to this Agreement and no other person or entity shall be a third-party beneficiary hereof. (x) Not an Amendment or Waiver. It is acknowledged and agreed that (except as expressly provided for herein, including without limitation in the exhibits hereto) entering into this Agreement, negotiating with respect to the Old Notes or the Plan or any other action taken by Noteholder does not constitute a full or partial amendment or waiver of any of such Noteholder's rights or remedies under the Old Indenture or at law or otherwise, and Noteholder hereby reserves such rights and remedies. (xi) Additional Old Notes Subject. Nothing in this Agreement shall be deemed to limit or restrict the ability or right of any Noteholder to acquire any additional Old Notes ("Additional Old Notes") or other claims against the Company or any affiliate of the Company; provided, however, that in the event any Noteholder acquires any such Additional Old Notes after the date hereof (other than any such Old Notes that are already subject to the provisions of an agreement with the Company substantially similar to this Agreement, which Old Notes shall remain subject to the provisions of such agreement), such Additional Old Notes shall 4 immediately upon such acquisition become subject to the terms of this Agreement. Noteholder shall as promptly as practicable notify the Company of such acquisition, and Noteholder agrees to execute and deliver within five business days of the closing of such acquisition any additional documents that the Company shall reasonably request to evidence that such Additional Old Notes are subject to the provisions of this Agreement as of the date of acquisition. (xii) No Transfer. Except as set forth below, Noteholder hereby agrees, without the prior written consent of the Company, not to (i) sell, transfer, assign, pledge or otherwise dispose of any of the Noteholder's Old Notes, unless the transferee accepts such Old Notes subject to the terms of this Agreement, or (ii) grant any proxies, deposit any of the Noteholder's Old Notes into a voting trust or enter into a voting agreement with respect to any of the Noteholder's Old Notes, unless such arrangement provides for compliance herewith. In the event that a Noteholder transfers such Old Notes prior to the Closing Date, such transferee shall comply with and be subject to all the terms of this Agreement, including, but not limited to, such Noteholder's obligations to tender the Old Notes and vote in favor of the Plan, and shall as a condition precedent to such transfer, execute a letter agreement on terms substantially identical to the terms hereof and a Ballot indicating its acceptance of the Plan. Noteholder shall, within three business days of any transfer of Old Notes, notify in writing S. Patric Plumley at the address of the Company set forth on the first page hereof of such transfer and provide therewith the executed documents as provided for in this paragraph. (xiii) Payment of Professional Fees. The Company agrees to promptly pay the reasonable professional fees and expenses of Noteholder in connection with this Agreement and the Bankruptcy Case, including the fees and expenses of its counsel, Cadwalader, Wickersham & Taft ("CWT"). The Company further agrees to pay a retainer of $20,000 to CWT prior to the filing of the Bankruptcy Case on account of such reasonable fees and expenses. (xiv) Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof. This Agreement shall not be amended, altered or modified in any manner whatsoever, except by a written instrument executed by the parties hereto. (xv) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York (without giving effect to the provisions thereof relating to conflicts of law). 5 (xvi) Remedies. The parties hereto acknowledge and agree that any breach of the terms of this Agreement would give rise to irreparable harm for which money damages would not be an adequate remedy and accordingly the parties hereto agree that, in addition to any other remedies, each party shall be entitled to enforce the terms of this Agreement by a decree of specific performance or injunctive relief without the necessity of proving the inadequacy of money damages as a remedy or posting a bond or other security. (xvii) Jurisdiction. The Company and Noteholder each hereby irrevocably and unconditionally submit to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York City or Delaware, and any appellate court from any thereof, in any action or proceedings arising out of or relating to this Agreement, or for recognition or enforcement of any judgment. All claims in respect of any such action or proceeding shall be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. (xviii) Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, with the same effect as if all parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument. (xix) Severability. Any term or provision of this Agreement, which is invalid or unenforceable in any jurisdiction, shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable. 6 Please sign in the space provided below to indicate your agreement and consent to the terms hereof. Very truly yours, EAGLE FOOD CENTERS, INC. By:__________________________ Name: Title: Accepted and Agreed to: Name of Noteholder: Alliance Capital Management L.P., as investment advisor - --------------------------------- By: /s/ Katalin E. Kutasi ---------------------------- Name: Katalin E. Kutasi Title: Senior Vice President $12,550,000 - -------------------------------- Principal Amount of Old Notes Held as Follows:
Amount Registered Holder Custodian ------ ----------------- --------- $3,750,000 The Equitable Life Chase $4,500,000 Assurance Society Chase $_________ of the United States $3,000,000 Alliance DHO, Limited Chase Bank of Texas $1,300,000 Alliance Global Chase Bank of Texas Diversified Holdings Limited
Schedule A Please sign in the space provided below to indicate your agreement and consent to the terms hereof. Very truly yours, EAGLE FOOD CENTERS, INC. By:__________________________ Name: Title: Accepted and Agreed to: Name of Noteholder: __________________________________ By: ______________________________ Name: Title: $__________________________________ Principal Amount of Old Notes Held as Follows:
Amount Registered Holder Custodian ------ ----------------- --------- $_________ ______________________ ______________________ $_________ ______________________ ______________________ $_________ ______________________ ______________________ $_________ ______________________ ______________________ $_________ ______________________ ______________________
Schedule A Eagle Food Centers, Inc. Summary Term Sheet
- -------------------------------------------------------------------------------- Company Eagle Food Centers, Inc. (the "Company"). - -------------------------------------------------------------------------------- Transaction Restructuring of the Company's 8 5/8% Senior Notes due April 15, 2000 (the "Notes") to include an extension of maturity, increase in coupon, reduction in principal, and receipt of equity. - -------------------------------------------------------------------------------- Maturity Extension 5 years (to April 15, 2005). - -------------------------------------------------------------------------------- New Interest Rate 11% per annum. - -------------------------------------------------------------------------------- Reduction in Principal $15 million in the aggregate for the Notes. - -------------------------------------------------------------------------------- Optional Redemption The Company may, at its option, redeem the Notes at 100% of the principal amount, at any time. - -------------------------------------------------------------------------------- Covenants Substantially similar to the Company's existing Notes except that the Company may complete sale leaseback transactions with its existing stores that are owned and any new stores opened; provided however, that at least 25% of the sale leaseback proceeds be used to pay down the New Notes. - -------------------------------------------------------------------------------- Interest Upon the effective date of the Plan, as contemplated by this Agreement, there shall be a cash payment to the Noteholders for the accrued and unpaid interest under Old Indenture. - -------------------------------------------------------------------------------- Consent Payment None. - -------------------------------------------------------------------------------- 1 - -------------------------------------------------------------------------------- Equity 15% of the fully-diluted common and voting stock of the Company subject to the following: o If the Company is sold or the debt is retired prior to October 15, 2001 (1.5 years), the Company may clawback 10% of the equity previously distributed to bondholders (i.e. bondholders retain 5% ownership). o If the Company is sold or the debt is retired prior to October 15, 2002 (2.5 years), the Company may clawback 5% the equity previously distributed to bondholders (i.e. bondholders retain 10% ownership). o The Company will not be able to clawback any of the equity after October 15, 2002. - -------------------------------------------------------------------------------- Rating The Company will, within 30 days of the Plan's effective date (the "Effective Date"), use its best efforts to cause the New Notes to be rated by one of Moody's Investor Service, Inc. and Standard and Poors. - -------------------------------------------------------------------------------- Other Conditions Payment by the Company of all professional fees incurred by bondholders. - --------------------------------------------------------------------------------
2 Eagle Food Centers, Inc. Route 67 at Knoxville Road Milan, Illinois 61264 February __, 2000 To the Holders of 8 5/8% Senior Notes due April 15, 2000 of Eagle Food Centers, Inc. Identified on the Signature Page Hereof: This letter agreement (this "Agreement") sets forth the terms on which you have agreed to vote in favor of a plan of reorganization to be filed by Eagle Food Centers, Inc. (the "Company"), in connection with their anticipated Chapter 11 bankruptcy filing, under which the Company will propose to modify the payment terms and obligations under the 8 5/8% Senior Notes due April 15, 2000 (the "Old Notes"), on behalf of all of your interests in the Old Notes, according to terms substantially similar to those set forth herein and/or in the exhibits and schedule attached hereto. In exchange for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the undersigned beneficial owner of, or holder of investment authority over, the Old Notes (the "Noteholder"), intending to be legally bound, hereby agree as follows: (i) The Note Restructuring. The Company intends to file a prepackaged, prearranged, prenegotiated or traditional voluntary case (the "Bankruptcy Case") under Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code"). In connection with the Bankruptcy Case, the Company intends to file a plan of reorganization (the "Plan") that provides for a modification of the terms under the Old Notes by replacing the Old Notes with replacement notes (the "New Notes"), which New Notes will have the material terms set forth in Schedule A hereto and in all other respects will have terms substantially identical with the terms of the Old Notes. (ii) Representations of Noteholder. Noteholder hereby represents and warrants to the Company as follows: (a) Noteholder is duly organized, validly existing and in good standing under the laws of Noteholder's state of organization; (b) Noteholder has the requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder; (c) the execution and delivery of this Agreement and the performance by Noteholder of its obligations hereunder have been duly authorized by all necessary action; (d) this Agreement has been duly executed and delivered by Noteholder and constitutes the valid and binding obligation of Noteholder, enforceable against Noteholder in accordance with its terms; (e) as of the date hereof, Noteholder is the beneficial owner of, or holder of investment authority over, Old Notes in the aggregate principal amount set forth below such Noteholder's name on the signature page hereof (the "Noteholder's Old Notes"), and beneficially owns, or has investment authority over, no other Old Notes, and the registered holder and custodial party for the Noteholder's Old Notes are as set forth on the signature page hereof; (f) Noteholder has received and reviewed this Agreement and all schedules and exhibits hereto, and, assuming the representations of the Company herein to be true and correct, has received all such information as it deems necessary and appropriate to enable it to evaluate the financial risk inherent in the New Notes; (iii) Representations of the Company. The Company hereby represents and warrants to Noteholder as follows: (i) the Company is a corporation duly organized, validly existing and in good standing under the laws of Delaware; (ii) the Company has the requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder; (iii) the execution and delivery of this Agreement and the performance by the Company of its obligations hereunder have been duly authorized by all necessary action; (iv) this Agreement has been duly executed and delivered by the Company and constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms; (v) the financial and other information concerning the Company which the Company or its representatives have made available to Noteholder (other than any projected financial information included therein) was complete and correct in all material respects when delivered and did not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in light of the circumstances under which such statements were made, and the projected financial information concerning the Company, which the Company or its representatives made available to Noteholder was prepared in 2 good faith and on the basis of assumptions which, in light of the circumstances under which they were made, were reasonable; and (vi) the Company does not own (beneficially or otherwise) or control any Old Notes. (iv) Agreement to Forbear. Noteholder agrees during the term of this Agreement (i) to neither take any action to accelerate the indebtedness due under the Old Notes nor direct the trustee (the "Trustee") under the indenture for the Old Notes (the "Old Indenture") to pursue any right or remedy under the Old Indenture or otherwise; and (ii) not to initiate, or have initiated on its behalf, any litigation or proceeding of any kind with respect to the Old Notes against the Company, its subsidiaries and/or its affiliates other than to enforce this Agreement. Notwithstanding the foregoing, the Noteholder reserves and retains, and does not waive, any rights or remedies it may have against the Company under the Indenture, the Old Notes or otherwise except as such rights or remedies may be modified in a confirmed Plan. (v) Agreement to Vote in Favor of Plan of Reorganization. Noteholder hereby agrees to vote in favor of the Plan, whether it is prepackaged, prearranged, prenegotiated or traditional. Noteholder's agreements with respect to the Plan, and Noteholder's vote in favor of the Plan, shall be conditioned on the terms of the Plan and all related documents being consistent in all material respects with or better than the terms set forth on Schedule A and being in form and substance reasonably acceptable to the Noteholder, and the Noteholder's claims being allowed in full. If the Company files the Plan and has complied with this Agreement, Noteholder agrees not to object to, and to fully support, the Plan, provided, however, that such agreement and all other obligations of Noteholder under this Agreement shall terminate if (i) the Bankruptcy Case is not commenced prior to March 8, 2000 or (ii) the Plan is not confirmed within 90 days after commencement of the Bankruptcy Case. Noteholder also agrees to execute and deliver to the Company, within seven business days after solicitation materials are delivered to the Noteholder and the solicitation is commenced, a ballot in a form reasonably acceptable to the Noteholder indicating Noteholder's acceptance of the Plan. Notwithstanding any other provision of this Agreement, the Plan will provide that it shall be a condition to confirmation that the order confirming the Plan be reasonably satisfactory to Noteholder and that any amendment of the Plan or waiver of conditions to confirmation and effectiveness shall require the consent of the Noteholder. (vi) Interest. All interest unpaid and accrued under the Old indenture through and including the effective date of the Plan contemplated by this Agreement, shall be paid, in cash, at the effective date of such plan. In the event the Plan 3 contemplated by this Agreement is not confirmed, there is no assurance or promise by the Company that such interest will be paid. (vii) Certain Conditions. In addition to the other conditions to Noteholder's obligations set forth herein, each obligation and liability of Noteholder under this Agreement is conditioned in its entirety upon (a) the truth of the representations and warranties of the Company set forth herein and performance by the Company of its agreements and covenants herein contained, (b) the terms and conditions of the treatment of the Old Notes under the Plan not differing from those set forth herein in any manner adverse to the Noteholders, (c) the Plan containing no material conditions adversely affecting the Noteholders other than those described in this Agreement, (d) the Agreement not having been terminated pursuant to Section (viii) hereof, and (e) the Plan being consistent in all material respects with, or better than, the terms and provisions of this Agreement. (viii) Termination of Agreement. In the event that (a) the Bankruptcy Case is not commenced by March 8, 2000, or (b) the Plan, substantially in a form consistent with this Agreement, shall not have been confirmed within 90 days of the commencement date of the Bankruptcy Case, then this Agreement shall automatically terminate. (ix) No Third-Party Beneficiaries. This Agreement shall be solely for the benefit of the parties hereto (including those parties indicated as registered holders on the signature page hereto) and the Noteholders who have entered into agreements with the Company substantially identical to this Agreement and no other person or entity shall be a third-party beneficiary hereof. (x) Not an Amendment or Waiver. It is acknowledged and agreed that (except as expressly provided for herein, including without limitation in the exhibits hereto) entering into this Agreement, negotiating with respect to the Old Notes or the Plan or any other action taken by Noteholder does not constitute a full or partial amendment or waiver of any of such Noteholder's rights or remedies under the Old Indenture or at law or otherwise, and Noteholder hereby reserves such rights and remedies. (xi) Additional Old Notes Subject. Nothing in this Agreement shall be deemed to limit or restrict the ability or right of any Noteholder to acquire any additional Old Notes ("Additional Old Notes") or other claims against the Company or any affiliate of the Company; provided, however, that in the event any Noteholder acquires any such Additional Old Notes after the date hereof (other than any such Old Notes that are already subject to the provisions of an agreement with the Company substantially similar to this Agreement, which Old Notes shall remain subject to the provisions of such agreement), such Additional Old Notes shall 4 immediately upon such acquisition become subject to the terms of this Agreement. Noteholder shall as promptly as practicable notify the Company of such acquisition, and Noteholder agrees to execute and deliver within five business days of the closing of such acquisition any additional documents that the Company shall reasonably request to evidence that such Additional Old Notes are subject to the provisions of this Agreement as of the date of acquisition. (xii) No Transfer. Except as set forth below, Noteholder hereby agrees, without the prior written consent of the Company, not to (i) sell, transfer, assign, pledge or otherwise dispose of any of the Noteholder's Old Notes, unless the transferee accepts such Old Notes subject to the terms of this Agreement, or (ii) grant any proxies, deposit any of the Noteholder's Old Notes into a voting trust or enter into a voting agreement with respect to any of the Noteholder's Old Notes, unless such arrangement provides for compliance herewith. In the event that a Noteholder transfers such Old Notes prior to the Closing Date, such transferee shall comply with and be subject to all the terms of this Agreement, including, but not limited to, such Noteholder's obligations to tender the Old Notes and vote in favor of the Plan, and shall as a condition precedent to such transfer, execute a letter agreement on terms substantially identical to the terms hereof and a Ballot indicating its acceptance of the Plan. Noteholder shall, within three business days of any transfer of Old Notes, notify in writing S. Patric Plumley at the address of the Company set forth on the first page hereof of such transfer and provide therewith the executed documents as provided for in this paragraph. (xiii) Payment of Professional Fees. The Company agrees to promptly pay the reasonable professional fees and expenses of Noteholder in connection with this Agreement and the Bankruptcy Case, including the fees and expenses of its counsel, Cadwalader, Wickersham & Taft ("CWT"). The Company further agrees to pay a retainer of $20,000 to CWT prior to the filing of the Bankruptcy Case on account of such reasonable fees and expenses. (xiv) Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof. This Agreement shall not be amended, altered or modified in any manner whatsoever, except by a written instrument executed by the parties hereto. (xv) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York (without giving effect to the provisions thereof relating to conflicts of law). 5 (xvi) Remedies. The parties hereto acknowledge and agree that any breach of the terms of this Agreement would give rise to irreparable harm for which money damages would not be an adequate remedy and accordingly the parties hereto agree that, in addition to any other remedies, each party shall be entitled to enforce the terms of this Agreement by a decree of specific performance or injunctive relief without the necessity of proving the inadequacy of money damages as a remedy or posting a bond or other security. (xvii) Jurisdiction. The Company and Noteholder each hereby irrevocably and unconditionally submit to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York City or Delaware, and any appellate court from any thereof, in any action or proceedings arising out of or relating to this Agreement, or for recognition or enforcement of any judgment. All claims in respect of any such action or proceeding shall be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. (xviii) Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, with the same effect as if all parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument. (xix) Severability. Any term or provision of this Agreement, which is invalid or unenforceable in any jurisdiction, shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable. 6 Please sign in the space provided below to indicate your agreement and consent to the terms hereof. Very truly yours, EAGLE FOOD CENTERS, INC. By:__________________________ Name: Title: Accepted and Agreed to subject to initialization and agreement to all handwritten changes: Name of Noteholder: Morgan, Stanley, Dean Witter Advisers - ------------------------------------- By: /s/ Peter Avalar ---------------------------- Name: Peter Avalar Title: Vice President $11,595,000 - -------------------------------- Principal Amount of Old Notes Held as Follows:
Amount Registered Holder Custodian ------ ----------------- --------- $9,185,000 MSDW High Yield Securities Bank of New York $ 500,000 MSDW High Income Advantage Trust Bank of New York $ 650,000 MSDW High Income Advantage Trust II Bank of New York $ 260,000 MSDW High Income Advantage Trust III Bank of New York $1,000,000 MSDW Diversified Income Trust Bank of New York
Schedule A Eagle Food Centers, Inc. Summary Term Sheet
- -------------------------------------------------------------------------------- Company Eagle Food Centers, Inc. (the "Company"). - -------------------------------------------------------------------------------- Transaction Restructuring of the Company's 8 5/8% Senior Notes due April 15, 2000 (the "Notes") to include an extension of maturity, increase in coupon, reduction in principal, and receipt of equity. - -------------------------------------------------------------------------------- Maturity Extension 5 years (to April 15, 2005). - -------------------------------------------------------------------------------- New Interest Rate 11% per annum. - -------------------------------------------------------------------------------- Reduction in Principal $15 million in the aggregate for the Notes. - -------------------------------------------------------------------------------- Optional Redemption The Company may, at its option, redeem the Notes at 100% of the principal amount, at any time. - -------------------------------------------------------------------------------- Covenants Substantially similar to the Company's existing Notes except that the Company may complete sale leaseback transactions with its existing stores that are owned and any new stores opened; provided however, that at least 25% of the sale leaseback proceeds be used to pay down the New Notes. - -------------------------------------------------------------------------------- Interest Upon the effective date of the Plan, as contemplated by this Agreement, there shall be a cash payment to the Noteholders for the accrued and unpaid interest under Old Indenture. - -------------------------------------------------------------------------------- Consent Payment None. - -------------------------------------------------------------------------------- 1 - -------------------------------------------------------------------------------- Equity 15% of the fully-diluted common and voting stock of the Company subject to the following: o If the Company is sold or the debt is retired prior to October 15, 2001 (1.5 years), the Company may clawback 10% the equity previously distributed to bondholders (i.e. bondholders retain 5% ownership). o If the Company is sold or the debt is retired prior to October 15, 2002 (2.5 years), the Company may clawback 5% the equity previously distributed to bondholders (i.e. bondholders retain 10% ownership). o The Company will not be able to clawback any of the equity after October 15, 2002. - -------------------------------------------------------------------------------- Rating The Company will, within 30 days of the Plan's effective date (the "Effective Date"), use its best efforts to cause the New Notes to be rated by one of Moody's Investor Service, Inc. and Standard and Poors. - -------------------------------------------------------------------------------- Other Conditions Payment by the Company of all professional fees incurred by bondholders. - --------------------------------------------------------------------------------
2 Eagle Food Centers, Inc. Route 67 at Knoxville Road Milan, Illinois 61264 February 29, 2000 To the Holders of 8 5/8% Senior Notes due April 15, 2000 of Eagle Food Centers, Inc. Identified on the Signature Page Hereof: This letter agreement (this "Agreement") sets forth the terms on which you have agreed to vote in favor of a plan of reorganization to be filed by Eagle Food Centers, Inc. (the "Company"), in connection with their anticipated Chapter 11 bankruptcy filing, under which the Company will propose to modify the payment terms and obligations under the 8 5/8% Senior Notes due April 15, 2000 (the "Old Notes"), on behalf of all of your interests in the Old Notes, according to terms substantially similar to those set forth herein and/or in the exhibits and schedule attached hereto. In exchange for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the undersigned beneficial owner of, or holder of investment authority over, the Old Notes (the "Noteholder"), intending to be legally bound, hereby agree as follows: (i) The Note Restructuring. The Company intends to file a prepackaged, prearranged, prenegotiated or traditional voluntary case (the "Bankruptcy Case") under Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code"). In connection with the Bankruptcy Case, the Company intends to file a plan of reorganization (the "Plan") that provides for a modification of the terms under the Old Notes by replacing the Old Notes with replacement notes (the "New Notes"), which New Notes will have the material terms set forth in Schedule A hereto and in all other respects will have terms substantially identical with the terms of the Old Notes. (ii) Representations of Noteholder. Noteholder hereby represents and warrants to the Company as follows: (a) Noteholder is duly organized, validly existing and in good standing under the laws of Noteholder's jurisdiction of organization; (b) Noteholder has the requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder; (c) the execution and delivery of this Agreement and the performance by Noteholder of its obligations hereunder have been duly authorized by all necessary action; (d) this Agreement has been duly executed and delivered by Noteholder and constitutes the valid and binding obligation of Noteholder, enforceable against Noteholder in accordance with its terms; (e) as of the date hereof, Noteholder is the beneficial owner of, or holder of investment authority over, Old Notes in the aggregate principal amount set forth below such Noteholder's name an the signature page hereof (the "Noteholders Old Notes"), and beneficially owns, or has investment authority over, no other Old Notes, and the registered holder and custodial party for the Noteholder's Old Notes are as set forth on the signature page hereof; (f) Noteholder has received and reviewed this Agreement and all schedules and exhibits hereto, and, assuming the representations of the Company herein to be true and correct, has received all such information as it deems necessary and appropriate to enable it to evaluate the financial risk inherent in the New Notes; (iii) Representations of The Company. The Company hereby represents and warrants to Noteholder as follows: (i) the Company is a corporation duly organized, validly existing and in good standing under the laws of Delaware; (ii) the Company has the requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder; (iii) the execution and delivery of this Agreement and the performance by the Company of its obligations hereunder have been duty authorized by all necessary action; (iv) this Agreement has been duly executed and delivered by the Company and constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms; (v) the financial and other information concerning the Company which the Company or its representatives have made available to Noteholder (other than any projected financial information included therein) was complete and correct in all material respects when delivered and did not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in light of the circumstances under which such statements were made, and the projected financial information concerning the Company, which the Company or its representatives made available to Noteholder was prepared in 2 good faith and on the basis of assumptions which, in light of the circumstances under which they were made, were reasonable; and (vi) the Company does not own (beneficially or otherwise) or control any Old Notes. (iv) Agreement to Forbear. Noteholder agrees during the term of this Agreement (i) to neither take any action to accelerate the indebtedness due under the Old Notes nor direct the trustee (the "Trustee") under the indenture for the Old Notes (the "Old Indenture") to pursue any right or remedy under the Old Indenture or otherwise; and (ii) not to initiate, or have initiated on its behalf, any litigation or proceeding of any kind against the Company, its subsidiaries and/or its affiliates other than to enforce this Agreement. Notwithstanding the foregoing, the Noteholder reserves and retains, and does not waive, any rights or remedies it may have against the Company under the Indenture or otherwise except as such rights or remedies may be modified in a confirmed Plan. (v) Agreement to Vote in Favor of Plan of Reorganization. Noteholder hereby agrees to vote in favor of the Plan, whether it is prepackaged, prearranged, prenegotiated or traditional. Noteholder's agreements with respect to the Plan, and Noteholder's vote in favor of the Plan, shall be conditioned on the terms of the Plan and all related documents being consistent in all material respects with the terms set forth on Schedule A and being in form and substance reasonably acceptable to the Noteholder. If the Company files the Plan and has complied with this Agreement, Noteholder agrees not to object to, and to fully support, the Plan, provided, however, that such agreement and all other obligations of Noteholder under this Agreement shall terminate if (i) the Bankruptcy Case is not commenced prior to March 8, 2000 and (ii) the Plan is not confirmed within 90 days after commencement of the Bankruptcy Case. Noteholder also agrees to execute and deliver to the Company, within three business days after solicitation materials are delivered to the Noteholder and the solicitation is commenced, a ballot in a form reasonably acceptable to the Noteholder indicating Noteholder's acceptance of the Plan. Notwithstanding any other provision of this Agreement, the Plan will provide that if the order confirming the Plan is not substantially consistent with the Plan, it shall be a condition to confirmation that the order be satisfactory to Noteholder and that any amendment of the Plan or waiver of conditions to confirmation and effectiveness shall require the consent of the Noteholder. Noteholder further agrees not to oppose the Company's request for the entry of customary first day orders after to commencement of the Bankruptcy Case. (vi) Interest. All interest unpaid and accrued under the Old Indenture through and including the effective date of the Plan contemplated by this Agreement, shall be paid, in cash, at the effective date of such plan. In the event the Plan 3 contemplated by this Agreement is not confirmed, there is no assurance or promise by the Company that such interest will be paid. (vii) Certain Conditions. In addition to the other conditions to Noteholder's obligations set forth herein, each obligation and liability of Noteholder under this Agreement is conditioned in its entirety upon (a) the truth of the representations and warranties of the Company set forth herein and performance by the Company of its agreements and covenants herein contained, (b) the terms and conditions of the treatment of the Old Notes under the Plan not materially differing from those set forth herein, (c) the Plan containing no material conditions other than those described in this Agreement, (d) the Agreement not having been terminated pursuant to Section (viii) hereof, and (e) the Plan being consistent in all material respects with the terms and provisions of this Agreement. (viii) Termination of Agreement. In the event that (a) the Bankruptcy Case is not commenced by March 8, 2000, or (b) the Plan, substantially in a form consistent with this Agreement, shall not have been confirmed within 90 days of the commencement date of the Bankruptcy Case, then this Agreement shall automatically terminate. (ix) No Third-Party Beneficiaries. This Agreement shall be solely for the benefit of the parties hereto and the Noteholders who have entered into agreements with the Company substantially identical to this Agreement and no other person or entity shall be a third-party beneficiary hereof. (x) Not an Amendment or Waiver. It is acknowledged and agreed that (except as expressly provided for herein, including without limitation in the exhibits hereto) entering into this Agreement, negotiating with respect to the Old Notes or the Plan or any other action taken by Noteholder does not constitute a full or partial amendment or waiver of any of such Noteholder's rights or remedies under the Old Indenture or at law or otherwise, and Noteholder hereby reserves such rights and remedies. (xi) Additional Old Notes Subject. Nothing in this Agreement shall be deemed to limit or restrict the ability or right of any Noteholder to acquire any additional Old Notes ("Additional Old Notes") or other claims against the Company or any affiliate of the Company; provided, however, that in the event any Noteholder acquires any such Additional Old Notes after the date hereof (other than any such Old Notes that are already subject to the provisions of an agreement with the Company substantially similar to this Agreement, which Old Notes shall remain subject to the provisions of such agreement), such Additional Old Notes shall 4 immediately upon such acquisition become subject to the terms of this Agreement. Noteholder shall as promptly as practicable notify the Company of such acquisition, and Noteholder agrees to execute and deliver within five business days of the closing of such acquisition any additional documents that the Company shall reasonably request to evidence that such Additional Old Notes are subject to the provisions of this Agreement as of the date of acquisition. (xii) No Transfer. Except as set forth below, Noteholder hereby agrees, without the prior written consent of the Company, not to (i) sell, transfer, assign, pledge or otherwise dispose of any of the Noteholder's Old Notes, unless the transferee accepts such Old Notes subject to the terms of this Agreement, or (ii) grant any proxies, deposit any of the Noteholder's Old Notes into a voting trust or enter into a voting agreement with respect to any of the Noteholder's Old Notes, unless such arrangement provides for compliance herewith. In the event that a Noteholder transfers such Old Notes prior to the Closing Date, such transferee shall comply with and be subject to all the terms of this Agreement, including, but not limited to, such Noteholder's obligations to tender the Old Notes and vote in favor of the Plan, and shall as a condition precedent to such transfer, execute a letter agreement on terms substantially identical to the terms hereof and a Ballot indicating its acceptance of the Plan. Noteholder shall, within three business days of any transfer of Old Notes, notify in writing S. Patric Plumley at the address of the Company set forth on the first page hereof of such transfer and provide therewith the executed documents as provided for in this paragraph. (xiii) Payment of Professional Fees. The Company agrees to promptly pay the reasonable professional fees and expenses of Noteholder in connection with this Agreement and the Bankruptcy Case, including the fees and expenses of its counsel, Cadwalader, Wickersham & Taft ("CWT"). The Company further agrees to pay a retainer of $20,000 to CWT prior to the filing of the Bankruptcy Case on account of such reasonable fees and expenses. (xiv) Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof. This Agreement shall not be amended, altered or modified in any manner whatsoever, except by a written instrument executed by the parties hereto. (xv) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York (without giving effect to the provisions thereof relating to conflicts of law). 5 (xvi) Remedies. The parties hereto acknowledge and agree that any breach of the terms of this Agreement would give rise to irreparable harm for which money damages would not be an adequate remedy and accordingly the parties hereto agree that, in addition to any other remedies, each party shall be entitled to enforce the terms of this Agreement by a decree of specific performance or injunctive relief without the necessity of proving the inadequacy of money damages as a remedy or posting a bond or other security. (xvii) Jurisdiction. The Company and Noteholder each hereby irrevocably and unconditionally submit to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York City or Delaware, and any appellate court from any thereof, in any action or proceedings arising out of or relating to this Agreement, or for recognition or enforcement of any judgment. All claims in respect of any such action or proceeding shall be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. (xviii) Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, with the same effect as if all parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument. (xix) Severability. Any term or provision of this Agreement, which is invalid or unenforceable in any jurisdiction, shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable. 6 Please sign in the space provided below to indicate your agreement and consent to the terms hereof. Very truly yours, EAGLE FOOD CENTERS, INC. By:__________________________ Name: Title: Accepted and Agreed to: Name of Noteholder: Delaware Investment Advisers, on behalf of and for the benefit of Atlantic Global Funding, Ltd.* - -------------------------------- By: /s/ Paul A. Matlack ---------------------------- Name: Paul A. Matlack *Subject to the additional terms Title: Vice President/Senior and conditions set forth on the Portfolio Manager Addendum to Schedule A attached hereto $ *3,000,000 - -------------------------------- Principal Amount of Notes Held as Follows:
Amount Registered Holder Custodian ------ ----------------- --------- $3,000,000 OBIE & Co. (for Chase Bank $_________ Atlantic Global of Texas, National $_________ Funding CBO, Ltd. Association $_________ _____________________ ______________________ $_________ _____________________ ______________________
Schedule A Eagle Food Centers, Inc. Summary Term Sheet
- -------------------------------------------------------------------------------- Company Eagle Food Centers, Inc. (the "Company"). - -------------------------------------------------------------------------------- Transaction Restructuring of the Company's 8 5/8% Senior Notes due April 15, 2000 (the "Notes") to include an extension of maturity, increase in coupon, reduction in principal, and receipt of equity. - -------------------------------------------------------------------------------- Maturity Extension 5 years (to April 15, 2005). - -------------------------------------------------------------------------------- New Interest Rate 11% per annum. - -------------------------------------------------------------------------------- Reduction in Principal $15 million in the aggregate for the Notes. - -------------------------------------------------------------------------------- Optional Redemption The Company may, at its option, redeem the Notes at 100% of the principal amount, at any time. - -------------------------------------------------------------------------------- Covenants Substantially similar to the Company's existing Notes except that the Company may complete sale leaseback transactions with its existing stores that are owned and any new stores opened; provided however, that at least 25% of the sale leaseback proceeds be used to pay down the New Notes. - -------------------------------------------------------------------------------- Interest Upon the effective date of the Plan, as contemplated by this Agreement, there shall be a cash payment to the Noteholders for the accrued and unpaid interest under Old Indenture. - -------------------------------------------------------------------------------- Consent Payment None. - -------------------------------------------------------------------------------- 1 - -------------------------------------------------------------------------------- Equity 15% of the fully-diluted common and voting stock of the Company subject to the following: o If the Company is sold or the debt is retired prior to October 15, 2001 (1.5 years), the Company may clawback 10% of the equity previously distributed to bondholders (i.e. bondholders retain 5% ownership). o If the Company is sold or the debt is retired prior to October 15, 2002 (2.5 years), the Company may clawback 5% the equity previously distributed to bondholders (i.e. bondholders retain 10% ownership). o The Company will not be able to clawback any of the equity after October 15, 2002. - -------------------------------------------------------------------------------- Rating The Company will, within 30 days of the Plan's effective date (the "Effective Date"), use its best efforts to cause the New Notes to be rated by one of Moody's Investor Service, Inc. and Standard and Poors. - -------------------------------------------------------------------------------- Other Conditions Payment by the Company of all professional fees incurred by bondholders. - --------------------------------------------------------------------------------
2 ADDENDUM TO SCHEDULE A ON BEHALF OF ATLANTIC GLOBAL FUNDING CBO, LIMITED EAGLE FOOD CENTERS, INC. SUMMARY TERM SHEET Delaware Investment Advisers, on behalf of and for the benefit of Atlantic Global Funding CBO, Limited, has signed the letter agreement dated February 29, 2000 between Eagle Food Centers, Inc. and Delaware Investment Advisers (the "Letter Agreement") subject to Delaware Investment Advisers' understanding that the following terms and conditions will be included within the Note Restructuring described in the Letter Agreement and Schedule A attached thereto, as if such terms and conditions were included in and made a part of the Letter Agreement and Schedule A: 1) The New Notes and the Equity will be fully registered and freely tradeable. 2) The $15 million aggregate amount of principal reduction described in the Term Sheet under the heading Principal Reduction, shall be accomplished by means of a cash payment to the holders of the Old Notes upon the effective date of the Plan. 3) The Company will, within 30 days of the Effective Date, use its best efforts to cause the New Notes to be rated by Moody's Investor Service, Inc. Capitalized terms used in this Addendum to Schedule A shall have the same meanings assigned to them in the Letter Agreement and/or Schedule A thereto. B: /s/ Paul A. Matlack Name: Paul A. Matlack Title: Vice President/Senior Portfolio Manager Eagle Food Centers, Inc. Route 67 at Knoxville Road Milan, Illinois 61264 February __, 2000 To the Holders of 8 5/8% Senior Notes due April 15, 2000 of Eagle Food Centers, Inc. Identified on the Signature Page Hereof: This letter agreement (this "Agreement") sets forth the terms on which you have agreed to vote in favor of a plan of reorganization to be filed by Eagle Food Centers, Inc. (the "Company"), in connection with their anticipated Chapter 11 bankruptcy filing, under which the Company will propose to modify the payment terms and obligations under the 8 5/8% Senior Notes due April 15, 2000 (the "Old Notes"), on behalf of all of your interests in the Old Notes, according to terms substantially similar to those set forth herein and/or in the exhibits and schedule attached hereto. In exchange for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the undersigned beneficial owner of, or holder of investment authority over, the Old Notes (the "Noteholder"), intending to be legally bound, hereby agree as follows: (i) The Note Restructuring. The Company intends to file a prepackaged, prearranged, prenegotiated or traditional voluntary case (the "Bankruptcy Case") under Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code"). In connection with the Bankruptcy Case, the Company intends to file a plan of reorganization (the "Plan") that provides for a modification of the terms under the Old Notes by replacing the Old Notes with replacement notes (the "New Notes"), which New Notes will have the material terms set forth in Schedule A hereto and in all other respects will have terms substantially identical with the terms of the Old Notes. (ii) Representations of Noteholder. Noteholder hereby represents and warrants to the Company as follows: (a) Noteholder is duly organized, validly existing and in good standing under the laws of Noteholder's state of organization; (b) Noteholder has the requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder; (c) the execution and delivery of this Agreement and the performance by Noteholder of its obligations hereunder have been duly authorized by all necessary action; (d) this Agreement has been duly executed and delivered by Noteholder and constitutes the valid and binding obligation of Noteholder, enforceable against Noteholder in accordance with its terms; (e) as of the date hereof, Noteholder is the beneficial owner of, or holder of investment authority over, Old Notes in the aggregate principal amount set forth below such Noteholder's name on the signature page hereof (the "Noteholder's Old Notes"), and beneficially owns, or has investment authority over, no other Old Notes, and the registered holder and custodial party for the Noteholder's Old Notes are as set forth on the signature page hereof; (f) Noteholder has received and reviewed this Agreement and all schedules and exhibits hereto, and, assuming the representations of the Company herein to be true and correct, has received all such information as it deems necessary and appropriate to enable it to evaluate the financial risk inherent in the New Notes; (iii) Representations of The Company. The Company hereby represents and warrants to Noteholder as follows: (i) the Company is a corporation duly organized, validly existing and in good standing under the laws of Delaware; (ii) the Company has the requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder; (iii) the execution and delivery of this Agreement and the performance by the Company of its obligations hereunder have been duly authorized by all necessary action; (iv) this Agreement has been duly executed and delivered by the Company and constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms; (v) the financial and other information concerning the Company which the Company or its representatives have made available to Noteholder (other than any projected financial information included therein) was complete and correct in all material respects when delivered and did not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in light of the circumstances under which such statements were made, and the projected financial information concerning the Company, which the Company or its representatives made available to Noteholder was prepared in 2 good faith and on the basis of assumptions which, in light of the circumstances under which they were made, were reasonable; and (vi) the Company does not own (beneficially or otherwise) or control any Old Notes. (iv) Agreement to Forbear. Noteholder agrees during the term of this Agreement (i) to neither take any action to accelerate the indebtedness due under the Old Notes nor direct the trustee (the "Trustee") under the indenture for the Old Notes (the "Old Indenture") to pursue any right or remedy under the Old Indenture or otherwise; and (ii) not to initiate, or have initiated on its behalf, any litigation or proceeding of any kind against the Company, its subsidiaries and/or its affiliates other than to enforce this Agreement. Notwithstanding the foregoing, the Noteholder reserves and retains, and does not waive, any rights or remedies it may have against the Company under the Indenture or otherwise except as such rights or remedies may be modified in a confirmed Plan. (v) Agreement to Vote in Favor of Plan of Reorganization. Noteholder hereby agrees to vote in favor of the Plan, whether it is prepackaged, prearranged, prenegotiated or traditional. Noteholder's agreements with respect to the Plan, and Noteholder's vote in favor of the Plan, shall be conditioned on the terms of the Plan and all related documents being consistent in all material respects with the terms set forth on Schedule A and being in form and substance reasonably acceptable to the Noteholder. If the Company files the Plan and has complied with this Agreement, Noteholder agrees not to object to, and to fully support, the Plan, provided, however, that such agreement and all other obligations of Noteholder under this Agreement shall terminate if (i) the Bankruptcy Case is not commenced prior to March 8, 2000 and (ii) the Plan is not confirmed within 90 days after commencement of the Bankruptcy Case. Noteholder also agrees to execute and deliver to the Company, within three business days after solicitation materials are delivered to the Noteholder and the solicitation is commenced, a ballot in a form reasonably acceptable to the Noteholder indicating Noteholder's acceptance of the Plan. Notwithstanding any other provision of this Agreement, the Plan will provide that if the order confirming the Plan is not substantially consistent with the Plan, it shall be a condition to confirmation that the order be satisfactory to Noteholder and that any amendment of the Plan or waiver of conditions to confirmation and effectiveness shall require the consent of the Noteholder. Noteholder further agrees not to oppose the Company's request for the entry of customary first day orders after to commencement of the Bankruptcy Case. (vi) Interest. All interest unpaid and accrued under the Old indenture through and including the effective date of the Plan contemplated by this Agreement, shall be paid, in cash, at the effective date of such plan. In the event the Plan 3 contemplated by this Agreement is not confirmed, there is no assurance or promise by the Company that such interest will be paid.. (vii) Certain Conditions. In addition to the other conditions to Noteholder's obligations set forth herein, each obligation and liability of Noteholder under this Agreement is conditioned in its entirety upon (a) the truth of the representations and warranties of the Company set forth herein and performance by the Company of its agreements and covenants herein contained, (b) the terms and conditions of the treatment of the Old Notes under the Plan not materially differing from those set forth herein, (c) the Plan containing no material conditions other than those described in this Agreement, (d) the Agreement not having been terminated pursuant to Section (viii) hereof, and (e) the Plan being consistent in all material respects with the terms and provisions of this Agreement. (viii) Termination of Agreement. In the event that (a) the Bankruptcy Case is not commenced by March 8, 2000, or (b) the Plan, substantially in a form consistent with this Agreement, shall not have been confirmed within 90 days of the commencement date of the Bankruptcy Case, then this Agreement shall automatically terminate. (ix) No Third-Party Beneficiaries. This Agreement shall be solely for the benefit of the parties hereto and the Noteholders who have entered into agreements with the Company substantially identical to this Agreement and no other person or entity shall be a third-party beneficiary hereof. (x) Not an Amendment or Waiver. It is acknowledged and agreed that (except as expressly provided for herein, including without limitation in the exhibits hereto) entering into this Agreement, negotiating with respect to the Old Notes or the Plan or any other action taken by Noteholder does not constitute a full or partial amendment or waiver of any of such Noteholder's rights or remedies under the Old Indenture or at law or otherwise, and Noteholder hereby reserves such rights and remedies. (xi) Additional Old Notes Subject. Nothing in this Agreement shall be deemed to limit or restrict the ability or right of any Noteholder to acquire any additional Old Notes ("Additional Old Notes") or other claims against the Company or any affiliate of the Company; provided, however, that in the event any Noteholder acquires any such Additional Old Notes after the date hereof (other than any such Old Notes that are already subject to the provisions of an agreement with the Company substantially similar to this Agreement, which Old Notes shall remain subject to the provisions of such agreement), such Additional Old Notes shall 4 immediately upon such acquisition become subject to the terms of this Agreement. Noteholder shall as promptly as practicable notify the Company of such acquisition, and Noteholder agrees to execute and deliver within five business days of the closing of such acquisition any additional documents that the Company shall reasonably request to evidence that such Additional Old Notes are subject to the provisions of this Agreement as of the date of acquisition. (xii) No Transfer. Except as set forth below, Noteholder hereby agrees, without the prior written consent of the Company, not to (i) sell, transfer, assign, pledge or otherwise dispose of any of the Noteholder's Old Notes, unless the transferee accepts such Old Notes subject to the terms of this Agreement, or (ii) grant any proxies, deposit any of the Noteholder's Old Notes into a voting trust or enter into a voting agreement with respect to any of the Noteholder's Old Notes, unless such arrangement provides for compliance herewith. In the event that a Noteholder transfers such Old Notes prior to the Closing Date, such transferee shall comply with and be subject to all the terms of this Agreement, including, but not limited to, such Noteholder's obligations to tender the Old Notes and vote in favor of the Plan, and shall as a condition precedent to such transfer, execute a letter agreement on terms substantially identical to the terms hereof and a Ballot indicating its acceptance of the Plan. Noteholder shall, within three business days of any transfer of Old Notes, notify in writing S. Patric Plumley at the address of the Company set forth on the first page hereof of such transfer and provide therewith the executed documents as provided for in this paragraph. (xiii) Payment of Professional Fees. The Company agrees to promptly pay the reasonable professional fees and expenses of Noteholder in connection with this Agreement and the Bankruptcy Case, including the fees and expenses of its counsel, Cadwalader, Wickersham & Taft ("CWT"). The Company further agrees to pay a retainer of $20,000 to CWT prior to the filing of the Bankruptcy Case on account of such reasonable fees and expenses. (xiv) Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof. This Agreement shall not be amended, altered or modified in any manner whatsoever, except by a written instrument executed by the parties hereto. (xv) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York (without giving effect to the provisions thereof relating to conflicts of law). 5 (xvi) Remedies. The parties hereto acknowledge and agree that any breach of the terms of this Agreement would give rise to irreparable harm for which money damages would not be an adequate remedy and accordingly the parties hereto agree that, in addition to any other remedies, each party shall be entitled to enforce the terms of this Agreement by a decree of specific performance or injunctive relief without the necessity of proving the inadequacy of money damages as a remedy or posting a bond or other security. (xvii) Jurisdiction. The Company and Noteholder each hereby irrevocably and unconditionally submit to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York City or Delaware, and any appellate court from any thereof, in any action or proceedings arising out of or relating to this Agreement, or for recognition or enforcement of any judgment. All claims in respect of any such action or proceeding shall be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. (xviii) Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, with the same effect as if all parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument. (xix) Severability. Any term or provision of this Agreement, which is invalid or unenforceable in any jurisdiction, shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable. 6 Please sign in the space provided below to indicate your agreement and consent to the terms hereof. Very truly yours, EAGLE FOOD CENTERS, INC. By:__________________________ Name: Title: Accepted and Agreed to: Name of Noteholder: Summit Investment Partners - -------------------------------- By: /s/ Steven R. Sutermeister ---------------------------- Name: Steven R. Sutermeister Title: Managing Partner $2,000,000 - -------------------------------- Principal Amount of Notes Held as Follows:
Amount Registered Holder Custodian ------ ----------------- --------- $2,000,000 Carillon Holding Ltd. Chase Texas - Ben Wood $_________ _____________________ ______________________ $_________ _____________________ ______________________ $_________ _____________________ ______________________ $_________ _____________________ ______________________
Schedule A Eagle Food Centers, Inc. Summary Term Sheet
- -------------------------------------------------------------------------------- Company Eagle Food Centers, Inc. (the "Company"). - -------------------------------------------------------------------------------- Transaction Restructuring of the Company's 8 5/8% Senior Notes due April 15, 2000 (the "Notes") to include an extension of maturity, increase in coupon, reduction in principal, and receipt of equity. - -------------------------------------------------------------------------------- Maturity Extension 5 years (to April 15, 2005). - -------------------------------------------------------------------------------- New Interest Rate 11% per annum. - -------------------------------------------------------------------------------- Reduction in Principal $15 million in the aggregate for the Notes. - -------------------------------------------------------------------------------- Optional Redemption The Company may, at its option, redeem the Notes at 100% of the principal amount, at any time. - -------------------------------------------------------------------------------- Covenants Substantially similar to the Company's existing Notes except that the Company may complete sale leaseback transactions with its existing stores that are owned and any new stores opened; provided however, that at least 25% of the sale leaseback proceeds be used to pay down the New Notes. - -------------------------------------------------------------------------------- Interest Upon the effective date of the Plan, as contemplated by this Agreement, there shall be a cash payment to the Noteholders for the accrued and unpaid interest under Old Indenture. - -------------------------------------------------------------------------------- Consent Payment None. - -------------------------------------------------------------------------------- 1 - -------------------------------------------------------------------------------- Equity 15% of the fully-diluted common and voting stock of the Company subject to the following: o If the Company is sold or the debt is retired prior to October 15, 2001 (1.5 years), the Company may clawback 10% the equity previously distributed to bondholders (i.e. bondholders retain 5% ownership). o If the Company is sold or the debt is retired prior to October 15, 2002 (2.5 years), the Company may clawback 5% the equity previously distributed to bondholders (i.e. bondholders retain 10% ownership). o The Company will not be able to clawback any of the equity after October 15, 2002. - -------------------------------------------------------------------------------- Rating The Company will, within 30 days of the Plan's effective date (the "Effective Date"), use its best efforts to cause the New Notes to be rated by one of Moody's Investor Service, Inc. and Standard and Poors. - -------------------------------------------------------------------------------- Other Conditions Payment by the Company of all professional fees incurred by bondholders. - --------------------------------------------------------------------------------
2 EX-99.3 4 PRESS RELEASE 2/29/00 Exhibit 99.3 PRESS RELEASE FOR IMMEDIATE RELEASE EAGLE FOOD CENTERS P.O. Box 6700, Rock Island, Illinois 61204-6700 Executive Offices & Distribution Center Route 67 & Knoxville Road, Milan, Illinois 61264 Telephone: 309-787-7700/Fax: 309-787-7895 Analyst Contact: Pat Hanrahan, Investor Relations Eagle Food Centers 309-787-7730 Media Contacts: Jacqueline K. Debowski, Public Relations Eagle Food Centers 309-787-7873 John Digles The MWW Group 312-853-3131 Email address: jdigles@mww.com EAGLE FOOD CENTERS PURSUES STRATEGIC RESTRUCTURING; FILES FOR CHAPTER 11 SIGNED DEFINITIVE AGREEMENT WITH LARGEST INSTITUTIONAL BONDHOLDERS MILAN, ILLINOIS, February 29, 2000 -- Eagle Food Centers, Inc., (NASDAQ: EGLE), a full service, regional supermarket chain operating under the trade names "Eagle Country Market" and "BOGO's", today filed a voluntary petition under Title 11 of the United States Code (the "Bankruptcy Code") in United States Bankruptcy Court for the District of Delaware. The Company stated that it intends to file a plan of reorganization (The "Plan") to restructure the Company's capital structure. The critical terms of The Plan were negotiated with the Company's largest secured lender, Congress Financial, and the largest identifiable unsecured institutional holders prior to the bankruptcy filing. Eagle has definitive lock-up agreements from the largest identifiable institutional holders of their 8 5/8% Senior Notes due April 15, 2000 (the "Senior Notes"), representing approximately $29 million of the estimated $30 million of institutional holders. The identified institutional holders have agreed to vote in favor of the Plan as filed today and have accordingly executed their lock-up agreements. The Plan provides for, among other things, replacement of the Senior Notes with new notes (the "New Senior Notes") that have the following material terms and conditions; (i) a maturity date of April 15, 2005, (ii) an interest rate to 11%, (iii) a $15 million reduction of outstanding principal by Eagle upon the effective date of the Plan; and (iv) Eagle may, at its option, redeem the New Senior Notes at 100% of the principal amount outstanding at the time of redemption. In addition, under the Plan, Eagle proposes to give 15% of the fully-diluted common stock of Eagle to the holders of the Senior Notes, some of which can be returned to Eagle (up to 10%) upon the occurrence of certain conditions. Eagle has entered into a $50 million interim Debtor-in-Possession (DIP) financing through Congress Financial to ensure its ability to fund continuous operations and meet ongoing financial commitments to vendors and employees. The Company will continue operating 64 stores in Illinois and Iowa with forecasted sales of over $800 million next year after closing 19 underperforming locations. "The strong capital structure provided by this proposed Plan will enable us to move forward with a renewed focus on growing sales through an aggressive marketing campaign supported by ongoing cost-management programs," said Jeffrey Little, President and CEO of Eagle Food Centers, Inc. "In particular, this reorganization will permit Eagle to continue to build, remodel and replace stores to better compete in the markets we serve." While the Company has made progress in its turnaround efforts, management and the Board of Directors have determined that Eagle Food Centers must take these immediate steps to reorganize its operations and restructure its debt obligations to ensure the availability of sufficient resources to fund continued operations. "This action will allow the Company to achieve its restructuring objectives in a timely and orderly manner," said Robert Kelly, Chairman of Eagle Food Centers, Inc. Eagle has retained Jefferies & Co. as financial advisors throughout the restructuring process. Eagle Food Centers, Inc., is a leading regional supermarket chain headquartered in Milan, Illinois, operating 83 stores in central Illinois, eastern Iowa, and northwestern Indiana. ### This press release may include statements that constitute "forward-looking" statements. These statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that could cause or contribute to such differences include but are not limited to, continued acceptance of the Company's products in the marketplace, competitive factors, dependence upon third-party vendors and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release. EX-99.4 5 PRESS RELEASE 3/2/00 Exhibit 99.4 PRESS RELEASE FOR IMMEDIATE RELEASE EAGLE FOOD CENTERS P.O. Box 6700, Rock Island, Illinois 61204-6700 Executive Offices & Distribution Center Route 67 & Knoxville Road, Milan, Illinois 61264 Telephone: 309-787-7700/Fax: 309-787-7895 Analyst Contact: Pat Hanrahan, Investor Relations Eagle Food Centers 309-787-7730 Media Contacts: Jacqueline K. Debowski, Public Relations Eagle Food Centers 309-787-7873 John Digles The MWW Group 312-853-3131 Email address: jdigles@mww.com EAGLE FOOD CENTERS OBTAINS COURT APPROVAL OF INTERIM FINANCING AND PAYMENT OF EMPLOYEE, TRADE, AND OTHER CLAIMS; THE COURT SCHEDULES A CONFIRMATION HEARING ON EAGLE'S PLAN OF REORGANIZATION FOR MAY 17, 2000 MILAN, ILLINOIS, March 2, 2000 -- Yesterday, Eagle Food Centers, Inc. (NASDAQ: EGLE) successfully obtained Court approval of interim debtor in possession financing and various "first day" requests for relief from the Honorable Roderick R. McKelvie of the United States District Court presiding over Eagle's chapter 11 reorganization case filed on Tuesday, February 29, 2000 in Wilmington, Delaware. In particular, the Court authorized Eagle, among other things, to pay prepetition claims of employees, utilities, reclamation claimants, critical trade vendors, and other key constituents. The Court scheduled a hearing on March 21, 2000 to consider Eagle's request for final approval of the $50 million debtor-in-possession and to authorize Eagle to pay the prepetition claims of its remaining trade creditors. The Court also scheduled a hearing to approve Eagle's disclosure statement for April 17, 2000 and a confirmation hearing on Eagle's plan of reorganization on May 17, 2000. "We are quite pleased with the outcome of yesterday's hearing," said Jeffrey Little, President and CEO of Eagle Food Centers, Inc. "We have sufficient liquidity and will now be able to run our business during our short stay in chapter 11 with minimal disruption to employees, vendors, and other constituents." "Eagle and its 6,100 employees sincerely appreciate the continued support of our suppliers and other creditors during our reorganization," said Bob Kelly. "Through the reorganization process, we hope to eliminate unprofitable stores and reject unfavorable leases which will greatly enhance the profitability of our business. We fully anticipate emerging from chapter 11 in early June as a stronger company better able to compete in the markets we serve." On February 29, 2000, Eagle filed for protection under chapter 11 in Wilmington, Delaware to effectuate a pre-negotiated plan of reorganization (the "Plan"). The Plan has already been agreed to by Eagle's prepetition bank lender and institutional holders of Eagle's 8 5/8% Senior Notes due April 15, 2000 representing approximately 29% of the $100,000,000 in outstanding Senior Notes. The primary feature of the Plan will restructure the payment and interest terms of the Senior Notes through the issuance of replacement notes (the "New Senior Notes.") THE OUTSTANDING PRINCIPAL AND ALL INTEREST UNDER THE SENIOR NOTES WILL BE PAID IN FULL UNDER THE TERMS OF THE NEW SENIOR NOTES AND THE PLAN. In particular, the New Senior Notes will have the following material terms and conditions: (i) a maturity date of April 15, 2005; (ii) an interest rate of 11%; and (iii) Eagle may, at its option, redeem the New Senior Notes at 100% of the principal amount outstanding at the time of redemption. On the effective date of the Plan, Eagle will also pay: (a) all accrued interest on the Senior Notes (which will continue to accrue through the duration of the case) and (b) $15 million in cash to reduce the principal amount of the New Senior Notes. On the effective date of the Plan, Eagle will also distribute 15% of the fully diluted common stock to Eagle to the holders of the Senior Notes, some of which (up to 10%) will be recoverable by Eagle upon the occurrence of certain conditions. Eagle Food Centers, Inc. is a leading regional supermarket chain headquartered in Milan, Illinois, operating 83 stores in central Illinois, eastern Iowa, and northwestern Indiana. ### This press release may include statements that constitute "forward-looking" statements. These statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that could cause or contribute to such differences include but are not limited to, continued acceptance of the Company's products in the marketplace, competitive factors, dependence upon third-party vendors and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release. -----END PRIVACY-ENHANCED MESSAGE-----