-----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, FDQW0z1AN5vt+dQYtyJ08861JtdkeoV5MXhX4YMOOCb52rraKEpMXyEhPRBOrkgj vUaF+Rd6ne1VnhvgH9GRVw== 0000950144-98-001866.txt : 19980219 0000950144-98-001866.hdr.sgml : 19980219 ACCESSION NUMBER: 0000950144-98-001866 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19980218 ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980218 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FLOWERS INDUSTRIES INC /GA CENTRAL INDEX KEY: 0000826227 STANDARD INDUSTRIAL CLASSIFICATION: BAKERY PRODUCTS [2050] IRS NUMBER: 580244940 STATE OF INCORPORATION: GA FISCAL YEAR END: 0629 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-09787 FILM NUMBER: 98544856 BUSINESS ADDRESS: STREET 1: US HWY 19 STREET 2: P O BOX 1338 CITY: THOMASVILLE STATE: GA ZIP: 31792 BUSINESS PHONE: 9122269110 MAIL ADDRESS: STREET 1: PO BOX 1338 200 US HIGHWAY 19 S CITY: THOMASVILLE STATE: GA ZIP: 31792 FORMER COMPANY: FORMER CONFORMED NAME: FLOWERS INDUSTRIES OF GEORGIA INC DATE OF NAME CHANGE: 19871220 8-K 1 FLOWERS INDUSTRIES 8-K 1 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 18, 1998 (February 3, 1998) FLOWERS INDUSTRIES, INC.
Georgia 1-9787 58-0244940 ------- ------ ---------- (State or Other (Commission (I.R.S. Employer Jurisdiction of File Number) Identification No.) Incorporation)
1919 Flowers Circle, P.O. Box 1338, Thomasville, GA 31799 - --------------------------------------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (912) 226-9110 1 2 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On February 3, 1998, Flowers Industries, Inc. ("Flowers") purchased 9,581,169 shares of common stock of Keebler Foods Company ("Keebler") from Artal Luxembourg S.A. ("Artal") for an aggregate purchase price of $264,065,986.64 and purchased 1,616,691 shares of common stock of Keebler from Bermore, Ltd. ("Bermore"), for an aggregate purchase price of $44,557,517.36, both contemporaneous with and conditioned upon the initial public offering of Keebler's common stock. Under the terms of the agreements entered into with Artal and Bermore, respectively, the per share purchase price was based on a formula incorporating the initial offering price of Keebler's common stock to the public. Flowers is financing these acquisitions of Keebler's common stock through funds available under the $500,000,000 Amended and Restated Credit Agreement dated as of January 30, 1998 among Flowers, certain Banks listed therein, Wachovia Bank, N.A., as Agent, The Bank of Nova Scotia, as Documentation Agent and NationsBank, N.A., as Syndications Agent. Through these acquisitions, Flowers' ownership of Keebler, the second largest cookie and cracker manufacturer in the United States, has increased from approximately 45% to approximately 55% of the outstanding common stock of Keebler. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a),(b) Financial Statements of Businesses Acquired; Proforma financial information. The historical and pro forma financial statements called for by this Item 7 will be provided under cover of Form 8-K A as soon as practicable. 2 3 (c) Exhibits 2.01 Stock Purchase Agreement dated as of January 28, 1998 by and among Flowers, Artal and Keebler. 2.02 Stock Purchase and Stockholder's Agreement dated as of January 28, 1998 by and among Flowers, Bermore, Artal and Keebler. 99.01 First Amendment to that certain Note Purchase Agreement dated as of December 20, 1995 by and among Flowers and the Purchasers named therein, effective as of January 23, 1998. 99.02 $500,000,000 Amended and Restated Credit Agreement dated as of January 30, 1998 among Flowers, certain Banks listed therein, Wachovia Bank, N.A., as Agent, The Bank of Nova Scotia, as Documentation Agent and NationsBank, N.A., as Syndications Agent. ITEM 8. CHANGE OF FISCAL YEAR. Effective February 3, 1998, the Executive Committee of Flowers approved a change in the fiscal year of Flowers to a fiscal year ending on the Saturday nearest December 31. The change in the fiscal year is retroactive to January 4, 1998. The change in the fiscal year was made to match the fiscal year of Keebler to facilitate financial reporting of Keebler's results of operations with those of Flowers. Flowers intends to file a report on Form 10-K for the transitional fiscal year June 29, 1997 through January 3, 1998 no later than May 4, 1998. 3 4 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. FLOWERS INDUSTRIES, INC. By: /s/C. Martin Wood, III ------------------------------ C. Martin Wood, III Senior Vice President and Chief Financial Officer Date: February 18, 1998 4 EX-2.01 2 STOCK PURCHASE AGREEMENT 1 EXHIBIT 2.01 STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT made this 28th day of January, 1998, by and among FLOWERS INDUSTRIES, INC., a Georgia corporation (hereinafter referred to as "Purchaser"), ARTAL LUXEMBOURG S.A., a Luxembourg corporation (hereinafter referred to as "Seller") and KEEBLER FOODS COMPANY, a Delaware corporation (hereinafter referred to as "Keebler"). W I T N E S S E T H: WHEREAS, Purchaser and Seller are stockholders of Keebler; and WHEREAS, Seller has requested, and Purchaser has consented to, a demand registration pursuant to Section 1.1(a) of Annex A of the Stockholders' Agreement; WHEREAS, Seller and Purchaser have caused Keebler to file a Registration Statement with the Securities and Exchange Commission relating to the sale of such number of Seller's Shares and Bermore's Shares (other than Acquired Shares) as may be determined by Seller; and WHEREAS, it is expected that the Registration Statement will be declared effective by the SEC at 12:00 p.m. today, subsequent to the execution of this Agreement; and WHEREAS, based upon an evaluation of their discussions with the Underwriters and generally prevailing market conditions, each of the parties hereto believes that the Underwriting Agreement will be executed on the date hereof; and WHEREAS, if the initial public offering is consummated, Seller and Purchaser have agreed that Purchaser will purchase a portion of Seller's Shares simultaneously with and conditioned upon the Closing, upon the terms and conditions set forth herein. NOW, THEREFORE, for and in consideration of the premises and the mutual promises, agreements, representations, warranties and covenants hereinafter set forth, and the sum of ten dollars and other good and valuable consideration, the receipt and sufficiency of which is hereby specifically agreed to and acknowledged, the parties hereto agree as follows: 2 1. DEFINITIONS. As used herein, the following terms shall have the following meanings unless the context otherwise requires: 1.1 "Acquired Shares" shall mean 9,581,169 shares of Keebler Stock to be sold by Seller to Purchaser at Closing, representing approximately 11.4% of the outstanding Keebler Stock and which, together with the purchase of the Bermore Purchase Shares, shall result in approximately fifty-one percent (51%) ownership of the Keebler Stock, on a fully diluted basis, by Purchaser on the Closing Date. 1.2 "Affiliate" shall mean any Person which, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, another Person. The term "control" includes, without limitation, the possession, directly or indirectly, of the power to direct the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. 1.3 "Agreement" shall mean this Stock Purchase Agreement. 1.4 "Bermore" shall mean Bermore, Ltd., a Bermuda Limited Company. 1.5 "Bermore Agreement" shall mean the Stock Purchase and Stockholder's Agreement, among Bermore, Purchaser, Seller and Keebler of even date herewith. 1.6 "Bermore Purchase Shares" shall mean 1,616,691 shares of Keebler Stock to be sold by Bermore to Purchaser at Closing, representing approximately 1.9% of the outstanding Keebler Stock and which, together with the purchase of the Acquired Shares, shall result in approximately fifty-one percent (51%) ownership of the Keebler Stock, on a fully diluted basis, by Purchaser on the Closing Date. 1.7 "Bermore's Shares" shall mean the shares of Keebler Stock owned by Bermore. 1.8 "CEO Consent Period" shall have the meaning set forth in Section 13.1.3. 1.9 "Closing" shall mean the consummation of the sale of the Acquired Shares pursuant to the terms and conditions of this Agreement. 1.10 "Closing Date" shall mean the date on which the Closing occurs pursuant to Section 7.1. 1.11 "DGCL" shall mean the General Corporation Law of the State of Delaware. 1.12 "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. 2 3 1.13 "Extension Period" shall have the meaning set forth in Section 13.4. 1.14 "GFI Stockholder's Agreement" shall mean that certain GFI Stockholder's Agreement dated as of June 4, 1996 by and among Keebler, G. F. Industries, Inc., Seller and Purchaser. 1.15 "HSR Act" shall mean the Hart-Scott-Rodino Antitrust and Improvements Act of 1976, as amended. 1.16 "Initial Stock Repurchase Consent Period" shall have the meaning set forth in Section 13.2.1. 1.17 "IPO" shall mean a public offering of shares of Keebler Stock owned by Seller and Bermore pursuant to the provisions of Section 2.3 hereof. 1.18 "IPO Price" shall mean the price per share of Keebler Stock at which it will be sold to the public pursuant to the Underwriting Agreement, without giving effect to any underwriting spread, discounts, commissions or reallowances. 1.19 "Keebler" shall mean Keebler Foods Company, a Delaware corporation, formerly named "INFLO Holdings Corporation." 1.20 "Keebler Stock" shall mean the common stock, $.01 par value per share, of Keebler. 1.21 "Lockup Period" shall mean the period set forth in the Underwriting Agreement during which restrictions will be placed on transfers of Keebler Stock by Seller, as such period may be reduced or waived by the Underwriters, with respect to all of the remaining shares of Keebler Stock owned by the Seller upon Closing. 1.22 "Management" shall mean the members of management of Keebler who either (i) directly own shares of Keebler Stock as of the date hereof or (ii) have been granted stock options by Keebler to purchase shares of Keebler Stock (A) as of the date hereof, (B) pursuant to stock option plans approved by Seller pursuant to Section 13.1 or (C) pursuant to stock options issued under plans permitted pursuant to the proviso set forth in paragraph (f) of Annex C. 1.23 "1933 Act" shall mean the Securities Act of 1933, as amended. 1.24 "Per Share Purchase Price" shall mean the price derived by dividing (i) the sum of (A) one hundred ten percent (110%) of the IPO Price times the aggregate number of Acquired Shares and Bermore Purchase Shares, plus (B) the lesser of (1) five percent (5%) of the IPO Price times the aggregate number of Acquired Shares and Bermore Purchase Shares, or (2) $13,000,000 by (ii) the number of Acquired Shares and Bermore Purchase Shares. 3 4 1.25 "Person" shall mean an individual, a partnership, a joint venture, a corporation, an association, a joint stock company, a limited liability company, a trust, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof. 1.26 "Public Float" shall mean the number of shares of Keebler Stock that are available for trading in the public market, and shall not in any event include (i) shares of capital stock of Keebler beneficially owned by Seller, Purchaser, Bermore or Management prior to being sold in a transaction resulting in such shares trading in the public market or (ii) shares of capital stock of Keebler which are subject to statutory, contractual or other restrictions on transfer. 1.27 "Purchase Price" shall have the meaning set forth in Section 2.2 hereof. 1.28 "Purchaser" shall mean Flowers Industries, Inc., a Georgia corporation. 1.29 "Registration Statement" shall mean a Registration Statement on Form S-1 in respect of the IPO (File No. 333-42075). 1.30 "SEC" shall mean the U.S. Securities and Exchange Commission. 1.31 "Second Stock Repurchase Consent Period" shall have the meaning set forth in Section 13.2.2. 1.32 "Securities" shall mean (a) Keebler Stock, (b) any other capital stock of Keebler issued after the date hereof and (c) any capital stock of Keebler issued in respect of previously issued capital stock, or in substitution thereof, in connection with any stock split, reverse stock split, dividend or combination, or any recapitalization, reclassification, merger, consolidation, exchange or other similar reorganization. 1.33 "Seller" shall mean Artal Luxembourg S.A., a Luxembourg corporation. 1.34 "Seller Directors" shall mean members of the Board of Directors of Keebler nominated by Seller pursuant to Section 12.1 hereof. 1.35 "Seller's Shares" shall mean the shares of Keebler Stock owned by Seller. 1.36 "Standard Consent Period" shall have the meaning set forth in Section 13.1.1. 1.37 "Stockholders' Agreement" shall mean that certain Stockholders' Agreement dated as of January 26, 1996 among Keebler, Seller and Purchaser. 1.38 "Underwriters" shall mean Credit Suisse First Boston Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated and SBC Warburg Dillon Read Inc. 4 5 1.39 "Underwriting Agreement" shall mean the Underwriting Agreement to be executed subsequent to the effectiveness of the Registration Statement among the Underwriters, Keebler, Bermore and Seller in respect of the IPO. 2. COVENANTS AND UNDERTAKINGS. 2.1 Purchase of Acquired Shares. Upon the terms and subject to the conditions set forth in this Agreement and on the basis of the representations, warranties, covenants, agreements, undertakings and obligations contained herein, Seller hereby agrees to sell to Purchaser, and Purchaser hereby agrees to purchase, the Acquired Shares, free and clear of all liens, claims and encumbrances of any nature at the Closing. 2.2 Purchase Price and Payment for the Acquired Shares. The purchase price (the "Purchase Price") to be paid by Purchaser to Seller for the Acquired Shares will be equal to the Per Share Purchase Price times the number of Acquired Shares, and shall be payable at Closing in cash by wire transfer in same day funds to an account or accounts specified by Seller. 2.3 IPO. The parties hereto acknowledge that Keebler has filed the Registration Statement with the SEC for registration of such numbers of Seller's Shares and Bermore's Shares as may be determined by Seller. The parties hereto agree that Seller has requested and Purchaser has consented to a demand registration pursuant to Section 1.1(a) of Annex A of the Stockholders' Agreement, and in connection therewith, agree to use their reasonable best efforts to (i) cause the Registration Statement to be declared effective by the SEC, (ii) engage in all actions reasonably requested by the Seller, Purchaser or the Underwriters in order to effectuate or facilitate the marketing and sale of Seller's Shares and Bermore's Shares and (iii) assist in and take all other actions in furtherance of the consummation of the IPO. The procedures, further agreements, rights and obligations of the parties hereto regarding the Registration Statement and the sale of any portion of Seller's Shares thereunder (including any procedures, further agreements, rights and obligations applicable after the Closing) shall be governed by the procedures in Annex A of the Stockholders' Agreement applicable to demand registrations made pursuant to Section 1.1(a) of such Annex A, except that notwithstanding anything to the contrary contained therein or herein, the reasonable fees and disbursements of counsel to Seller in respect of the IPO shall be paid by Keebler as provided in Section 14.7. Seller agrees that it shall not terminate or materially amend, extend or otherwise modify the Underwriting Agreement without the prior written consent of Purchaser (which consent shall not be unreasonably withheld or delayed). 2.4 Bermore Purchase. The parties hereto recognize that pursuant to Section 3.3 and 3.4 of the GFI Stockholder's Agreement, Bermore has certain "tag along" rights and Purchaser and Seller have certain "drag along" rights as more fully described in said sections. In lieu thereof, the parties recognize that, pursuant to the Bermore Agreement, Bermore will sell to Purchaser, and Purchaser will purchase from Bermore, the Bermore Purchase Shares at the Per Share Purchase Price. 2.5 Bermore Participation in IPO. The parties hereto acknowledge that pursuant to Section 1.2 of Annex A to the GFI Stockholder's Agreement, (i) Bermore has certain 5 6 rights regarding "Incidental Registrations" as more fully described therein, (ii) the written notification requirements of such Section 1.2 have been satisfied and/or waived and (iii) Bermore has elected to include the Bermore IPO Shares (as such term is defined in the Bermore Agreement) for sale in the IPO in accordance with the terms and provisions of the Bermore Agreement. 2.6 Termination of Stockholders' Agreement. Seller, Purchaser and Keebler covenant and agree to terminate, the Stockholders' Agreement effective upon the Closing except that the provisions contained in Annex A thereof which by their terms are applicable after the consummation of an offering made pursuant thereto (including, without limitation, provisions relating to indemnification and contribution) shall continue to remain in full force and effect as provided therein with respect to Seller's Shares sold in the IPO. 2.7 Compliance with Securities Laws. In connection with the transactions contemplated by this Agreement, the parties hereto agree to cooperate with one another in complying with the applicable provisions of the 1933 Act and the Exchange Act and the general rules and regulations of the SEC thereunder, and all other applicable federal and state securities laws, and each of them agree to furnish the other, or its counsel, with such information and to take such actions as may be reasonably requested in respect of such compliance. 2.8 Resignation. Seller covenants to cause to be delivered at the Closing the resignation of one (1) of the three (3) Directors nominated by it currently serving on the Board of Directors of Keebler, such resignation to be effective immediately following the Closing. The remaining Directors nominated by Seller shall continue to serve and remain on Keebler's Board of Directors for the remainder of their terms in accordance with, and subject to, the provisions of Keebler's Bylaws and Section 12.1 hereof. The parties acknowledge that prior to the IPO, the terms of Keebler's Board of Directors will be staggered such that (i) approximately one-third of the members shall be elected each year for a three-year term, (ii) in order to effectuate such staggered terms the individuals serving on the Board of Directors immediately following the IPO will be classified as to whether they will stand for re-election at the next ensuing annual meeting of Shareholders, the annual meeting one year thereafter, or the annual meeting two years thereafter and (iii) the Seller Directors shall be classified in the annual meeting two years thereafter category. 2.9 Consents and Approvals. The parties agrees to use their respective best efforts to obtain the waiver, consent and approval of all persons whose waiver, consent or approval is required in order to consummate the transactions contemplated by this Agreement. 2.10 HSR Act Filings. The parties hereunder acknowledge that the required filings in connection with the transactions contemplated by this Agreement under the HSR Act have been made with the Federal Trade Commission and the Antitrust Division of the United States Department of Justice, and, the parties hereunder agree that, as promptly as practicable from time to time hereafter, they shall make, in cooperation with each other, all such further filings and submissions, and take such further action, as may be required in connection therewith. The parties shall furnish each other all information in its or their possession necessary for compliance by the others with the provisions of this Section 2.10. The parties hereto shall each 6 7 notify the others immediately upon receiving any request for additional information with respect to such filings from either the Antitrust Division of the Department of Justice or the Federal Trade Commission and the party receiving the request shall use its best efforts to comply with such request as soon as possible. Subject to the termination provisions of this Agreement, no party shall withdraw any such filing or submission without the written consent of the other parties. 2.11 DGCL ss. 203 Opt-Out. Seller, Purchaser and Keebler covenant and agree to take all actions necessary to cause Keebler, on or prior to the Closing Date, to adopt an amendment to Keebler's certificate of incorporation or bylaws expressly electing not to be governed by Section 203 of the DGCL (or any successor statute adopted subsequent to the date hereof by the State of Delaware or, if Keebler reincorporates in a jurisdiction other than the State of Delaware, any similar statute of any such jurisdiction) and further covenant to take all actions necessary to cause such amendment to be approved by vote of a majority of the shares of Keebler Stock entitled to vote thereon. Such amendment shall be effective as provided in DGCL Section 203(b) and if such amendment is made to Keebler's bylaws it shall not be further amended by the Board of Directors. 2.12 Actions by Keebler. Each of Artal and Flowers will use its best efforts to cause Keebler to (i) take any action required to be taken in connection with the consummation of the transactions contemplated hereby or (ii) refrain from taking any action inconsistent with the consummation of the transactions contemplated hereby. Artal and Flowers, acting jointly, will, if necessary, take all steps permitted under applicable law to replace any director who refuses or otherwise fails to use his best efforts to direct Keebler to comply with such covenants with a director who both Artal and Flowers believe in good faith will cause Keebler to comply with such covenants. 2.13 FIRPTA. Keebler agrees to deliver to Seller, at Closing, the Certificate set forth on Section 8.2.3.4 and to deliver to the Internal Revenue Service, as promptly as practicable and in any event within thirty (30) days of the Closing, the Notice set forth in Section 8.2.3.4. 3. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller represents and warrants to, and for the benefit of, Keebler and Purchaser as follows: 3.1 Organization and Standing. Seller is a duly organized and validly existing corporation in good standing under the laws of Luxembourg. 3.2 Authority and Status. The Seller has the corporate capacity and authority to execute and deliver this Agreement, to perform hereunder, and to consummate the transactions contemplated hereby. The execution, delivery and performance by the Seller of this Agreement and each and every agreement, document, and instrument provided for herein have been duly authorized and approved by the Directors of Seller and this Agreement has been duly executed and delivered by the Seller. This Agreement and each and every agreement, document, and instrument to be executed, delivered and performed by the Seller in connection herewith 7 8 constitute or will, when executed and delivered, constitute the valid and legally binding obligations of the Seller, enforceable against it in accordance with their respective terms, except as enforceability may be limited by applicable general equitable principles (whether considered in a proceeding in equity or at law) or by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, or similar laws from time to time in effect affecting the enforcement of creditors' rights generally. 3.3 Agreement Does Not Violate Other Instruments. The execution and delivery of this Agreement by the Seller do not, and the consummation of the transactions contemplated hereby will not, violate any provision of the Acte de Constitution of the Seller or violate or constitute an occurrence of default under any provision of, or conflict with, or result in acceleration of any obligation under, or give rise to a right by any party to terminate its obligations under, any mortgage, deed of trust, conveyance to secure debt, note, loan, lien, lease, agreement, instrument, or any order, judgment, decree or other arrangement to which the Seller is a party or is bound except where the occurrence of any such event would not have a material adverse effect on the consummation of the transactions contemplated hereby. Except for the filings with the SEC and various state securities authorities with regard to the IPO and the filings required under the HSR Act, no consent, approval, order or authorization of, or registration, declaration or filing with, any governmental entity is required to be obtained or made by or with respect to the Seller, in connection with the execution and delivery by the Seller of this Agreement or the consummation of the transactions contemplated hereby, except where the failure to obtain or make any of the foregoing would not have a material adverse effect on the consummation of the transactions contemplated hereby. 3.4 Litigation. There is no suit, action, proceeding, claim or investigation pending, or, to the knowledge of Seller, threatened against the Seller which, if pursued and/or resulting in a judgment, would have a material adverse effect on the right of the Seller to consummate the transactions contemplated hereby. 3.5 Shares. The Seller owns the Acquired Shares free and clear of any liens, claims or encumbrances of any nature. Except as contemplated by the Stockholders' Agreement, the Seller has not granted any option or right, and is not a party to any other agreement, and no such option, right or agreement exists, which requires, or which upon the passage of time, the payment of money or the occurrence of any other event, may require, the Seller to transfer any of the Seller's Shares to any one other than Purchaser. When Purchaser acquires the Acquired Shares from the Seller as contemplated by this Agreement, the Purchaser will receive them free and clear of any liens, claims or encumbrances of other persons, other than liens, claims or encumbrances resulting from acts of Purchaser. 4. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser represents and warrants to, and for the benefit of, the Seller and Keebler as follows: 4.1 Organization and Standing. Purchaser is a duly organized and validly existing corporation in good standing under the laws of the State of Georgia. 8 9 4.2 Authority and Status. Purchaser has the corporate capacity and authority to execute and deliver this Agreement, to perform hereunder, and to consummate the transactions contemplated hereby. The execution, delivery and performance by Purchaser of this Agreement and each and every agreement, document, and instrument provided for herein have been duly authorized and approved by its Board of Directors and this Agreement has been duly executed and delivered by Purchaser. This Agreement and each and every other agreement, document, and instrument to be executed, delivered and performed by Purchaser in connection herewith constitute or will, when executed and delivered, constitute the valid and legally binding obligations of Purchaser, enforceable against it in accordance with their respective terms, except as enforceability may be limited by applicable general equitable principles (whether considered in a proceeding in equity or at law) or by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, or similar laws from time to time in effect affecting the enforcement of creditors' rights generally. 4.3 Agreement Does Not Violate Other Instruments. The execution and delivery of this Agreement by Purchaser do not, and the consummation of the transactions contemplated hereby will not, violate any provisions of the Articles of Incorporation, as amended, or Bylaws, as amended, of Purchaser, or violate or constitute an occurrence of default under any provision of, or conflict with, or result in acceleration of any obligation under, or give rise to a right by any party to terminate its obligations under, any mortgage, deed of trust, conveyance to secure debt, note, loan, lien, lease, agreement, instrument, or any order, judgment, decree or other arrangement to which Purchaser is a party or is bound, except where the occurrence of any such event would not have a material adverse effect on the consummation of the transactions contemplated hereby. Except for the filings with the SEC and various state securities authorities with regard to the IPO and the filings required under the HSR Act, no consent, approval, order or authorization of, or registration, declaration or filing with, any governmental entity is required to be obtained or made by or with respect to Purchaser, in connection with the execution and delivery by Purchaser of this Agreement or the consummation of the transactions contemplated hereby, except where the failure to obtain or make any of the foregoing would not have a material adverse effect on the consummation of the transactions contemplated hereby. 4.4 Litigation. There is no suit, action, proceeding, claim or investigation pending, or, to the knowledge of Purchaser, threatened against or affecting Purchaser which, if pursued and/or resulting in a judgment, would have a material adverse effect on the right of Purchaser to consummate the transactions contemplated hereby. 5. REPRESENTATIONS AND WARRANTIES OF KEEBLER. Keebler represents and warrants to, and for the benefit of, the Seller and Purchaser as follows: 5.1 Organization and Standing. Keebler is a duly organized and validly existing corporation in good standing under the laws of the State of Delaware. 9 10 5.2 Authority and Status. Keebler has the corporate capacity and authority to execute and deliver this Agreement, to perform hereunder, and to consummate the transactions contemplated hereby. The execution, delivery and performance by Keebler of this Agreement and each and every agreement, document, and instrument provided for herein have been duly authorized and approved by its Board of Directors and this Agreement has been duly executed and delivered by Keebler. This Agreement and each and every other agreement, document, and instrument to be executed, delivered and performed by Keebler in connection herewith constitute or will, when executed and delivered, constitute the valid and legally binding obligations of Keebler, enforceable against it in accordance with their respective terms, except as enforceability may be limited by applicable general equitable principles (whether considered in a proceeding in equity or at law) or by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, or similar laws from time to time in effect affecting the enforcement of creditors' rights generally. 5.3 Agreement Does Not Violate Other Instruments. The execution and delivery of this Agreement by Keebler do not, and the consummation of the transactions contemplated hereby will not, violate any provisions of the Articles of Incorporation, as amended, or Bylaws, as amended, of Keebler, or violate or constitute an occurrence of default under any provision of, or conflict with, or result in acceleration of any obligation under, or give rise to a right by any party to terminate its obligations under, any mortgage, deed of trust, conveyance to secure debt, note, loan, lien, lease, agreement, instrument, or any order, judgment, decree or other arrangement to which Keebler is a party or is bound, except for (A) any defaults or violations under Keebler's senior credit facility, which defaults or violations shall have been waived or cured on or prior to the Closing Date and (B) Keebler's obligation to make an offer to purchase its Senior Subordinated Notes due 2006 from the holders thereof at a purchase price of 101% of the principal amount thereof after the Closing, which obligation shall be satisfied by Keebler in accordance with the provisions of the indenture governing such senior subordinated notes. Except for the filings with the SEC and various state securities authorities with regard to the IPO and the filings required under the HSR Act, no consent, approval, order or authorization of, or registration, declaration or filing with, any governmental entity is required to be obtained or made by or with respect to Keebler, in connection with the execution and delivery by Keebler of this Agreement or the consummation of the transactions contemplated hereby, except where the failure to obtain or make any of the foregoing would not have a material adverse effect on the consummation of the transactions contemplated hereby. 5.4 Litigation. There is no suit, action, proceeding, claim or investigation pending, or, to the knowledge of Keebler, threatened against or affecting Keebler which, if pursued and/or resulting in a judgment, would have a material adverse effect on the right of Keebler to consummate the transactions contemplated hereby. 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER. All of the obligations of Purchaser to consummate the purchase of the Acquired Shares contemplated by this Agreement shall be contingent upon and subject to the satisfaction, on or before the Closing Date, of each and every one of the following conditions, all or any of which may be waived, in whole or in part, by Purchaser for purposes of consummating such 10 11 transactions, but without prejudice to any other right or remedy which they may have hereunder as a result of any misrepresentation by, or breach of any covenant or warranty of Seller contained in this Agreement or any other certificate or instrument furnished by Seller hereunder. 6.1 Representations True at Closing. The representations and warranties made by Seller and Keebler to Purchaser in this Agreement and the Exhibits and Annexes hereto shall be true and correct in all material respects on the Closing Date with the same force and effect as though such representations and warranties had been made on and as of such date, except for changes contemplated by this Agreement. 6.2 Covenants of Seller and Keebler. Each of Seller and Keebler shall have duly performed all of the covenants, acts and undertakings to be performed by it on or prior to the Closing Date, and a duly authorized officer of each of Seller and Keebler shall deliver to Purchaser certificates dated as of the Closing Date certifying, as to themselves only, to the fulfillment of this condition and the condition set forth in Section 6.1 hereof. 6.3 No Injunction, Etc. No action, proceeding, investigation, regulation or legislation which is related to or arises out of this Agreement or the transactions contemplated hereby shall have been instituted, threatened or proposed before any court, governmental agency or legislative body which is reasonably likely to enjoin, restrain, prohibit or obtain substantial damages from Purchaser or Keebler in respect of, this Agreement or the consummation of the transactions contemplated hereby. 6.4 Approvals. The execution and the delivery of this Agreement and the consummation of the transactions contemplated hereby shall have been approved by all regulatory authorities whose approvals are required by law and all applicable waiting periods under the HSR Act shall have expired or been terminated. 6.5 Effectiveness of Registration Statement. The Registration Statement shall have been declared effective by the SEC, and no stop order suspending effectiveness shall have been issued, and no action, suit, proceeding or investigation by the SEC to suspend the effectiveness thereof shall have been initiated and be continuing. The shares of Keebler Stock to be sold by the Seller and Bermore pursuant to the Registration Statement shall have been registered for issuance under all applicable Blue Sky laws or shall be exempt from such registration, and no stop order shall have been issued with respect to the issuance or sale of such securities by any Blue Sky authority. 6.6 Closing of IPO. The closing of the IPO shall have occurred contemporaneously with the Closing. 6.7 No Amendment, Extension or Termination of Underwriting Agreement. Seller shall not have terminated or have materially amended, extended or otherwise modified the Underwriting Agreement without the prior written consent of Purchaser (which consent shall not be unreasonably withheld or delayed). 11 12 7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLER TO CLOSE. All of the obligations of Seller to consummate the sale of the Acquired Shares contemplated by this Agreement shall be contingent upon and subject to the satisfaction, on or before the Closing Date, of each and every one of the following conditions, all or any of which may be waived, in whole or in part by Seller, but without prejudice to any other right or remedy which they may have hereunder as a result of any misrepresentation by, or breach of any covenant or warranty of, Purchaser contained in this Agreement, or any certificate or instrument furnished by it hereunder. 7.1 Representations True at Closing. The representations and warranties made by Purchaser and Keebler to Seller in this Agreement and the Exhibits and Annexes hereto shall be true and correct in all material respects on the Closing Date with the same force and effect as though such representations and warranties had been made on and as of such date, except for changes contemplated by this Agreement. 7.2 Covenants of Purchaser and Keebler. Each of Purchaser and Keebler shall have duly performed all of the covenants, acts and undertakings to be performed by them on or prior to the Closing Date, and a duly authorized officer of each of Purchaser and Keebler shall deliver certificates dated as of the Closing Date certifying, as to themselves only, to the fulfillment of this condition and the condition set forth under Section 7.1 above. 7.3 No Injunction, Etc. No action, proceeding, investigation, regulation or legislation which is related to or arises out of this Agreement or the transactions contemplated hereby shall have been instituted, threatened or proposed before any court, governmental agency or legislative body which is reasonably likely to enjoin, restrain, prohibit or obtain substantial damages from Seller or Keebler in respect of, this Agreement or the consummation of the transactions contemplated hereby. 7.4 Approvals. The execution and the delivery of this Agreement and the consummation of the transactions contemplated hereby shall have been approved by all regulatory authorities and all courts whose approvals are required by law and all applicable waiting periods under the HSR Act shall have expired or been terminated. 7.5 Effectiveness of Registration Statement. The Registration Statement shall have been declared effective by the SEC, and no stop order suspending effectiveness shall have been issued, and no action, suit, proceeding or investigation by the SEC to suspend the effectiveness thereof shall have been initiated and be continuing. The shares of Keebler Stock to be sold by the Seller and Bermore pursuant to the Registration Statement shall have been registered for issuance under all applicable Blue Sky laws or shall be exempt from such registration, and no stop order shall have been issued with respect to the issuance or sale of such securities by any Blue Sky authority. 7.6 Closing of IPO. The closing of the IPO shall have occurred contemporaneously with the Closing. 12 13 8. CLOSING. 8.1 Time and Place of Closing. The consummation of the transactions provided for in this Agreement (herein referred to as the "Closing") shall be held at the offices of Cravath, Swaine & Moore, 825 Eighth Avenue, New York, New York 10019, contemporaneously with, and conditioned upon, the closing of the IPO (herein referred to as the "Closing Date") unless another place or date is agreed to in writing by the Seller and Purchaser. 8.2 Transactions at Closing. At the Closing, each of the following transactions shall occur: 8.2.1 Seller's Performance. Seller shall deliver to Purchaser and Keebler the following: 8.2.1.1 all certificates representing the Acquired Shares, duly endorsed for transfer or accompanied by instruments of transfer reasonably satisfactory in form and substance to Purchaser and its counsel; 8.2.1.2 the certificate of a duly authorized officer of the Seller described in Section 6.2; 8.2.1.3 certified copies of resolutions of the Board of Directors of the Seller approving the transactions set forth in and contemplated by this Agreement; 8.2.1.4 certificates of incumbency for the officers of the Seller who are executing this Agreement and the other documents contemplated hereby; 8.2.1.5 resignation of the Director of Keebler described in Section 2.8; and 8.2.1.6 such other evidence of the performance of all covenants and satisfaction of all conditions required of Seller by this Agreement, at or prior to the Closing, as Purchaser, or its counsel may reasonably require. 8.2.2 Performance by Purchaser. Purchaser shall deliver to the Seller and Keebler the following: 8.2.2.1 the Purchase Price payable to Seller by wire transfer of same day funds to the account or accounts designated by Seller in writing at least two (2) business days prior to Closing; 8.2.2.2 the certificate of a duly authorized officer of Purchaser described in Section 7.2; 13 14 8.2.2.3 certificate of incumbency of the officers of Purchaser who are executing this Agreement and the other documents contemplated hereby; 8.2.2.4 certified copies of resolutions of the Board of Directors of the Purchaser approving the transactions set forth in and contemplated by this Agreement; and 8.2.2.5 such other evidence of the performance of all the covenants and satisfaction of all of the conditions required of Purchaser by this Agreement at or before the Closing as the Seller or its counsel may reasonably require. 8.2.3 Performance by Keebler. Keebler shall deliver to the Seller and Purchaser the following: 8.2.3.1 the certificate of a duly authorized officer of Keebler described in Sections 6.2 and 7.2; 8.2.3.2 certificate of incumbency of the officers of Keebler who are executing this Agreement and the other documents contemplated hereby; 8.2.3.3 certified copies of resolutions of the Board of Directors of the Keebler approving the transactions set forth in and contemplated by this Agreement; 8.2.3.4 FIRPTA Certificate and Notice to Internal Revenue Service Pursuant to Reg. ss. 1.897-2(H) in form and substance to comply with Treasury Regulations Sections 1.1445-2(c)(3)(i) and 1.897-2(h); and 8.2.3.5 such other evidence of the performance of all the covenants and satisfaction of all of the conditions required of Keebler by this Agreement at or before the Closing as the Seller, Purchaser or their counsel may reasonably require. 9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. 9.1 Survival of Representations and Warranties of the Seller. All representations, warranties, agreements, covenants and obligations made or undertaken by the Seller in this Agreement or in any document or instrument executed and delivered pursuant hereto are material, have been relied upon by Purchaser and Keebler, shall survive the Closing hereunder, and shall not merge in the performance of any obligation by any party hereto. 9.2 Survival of Representations and Warranties of Purchaser. All representations, warranties, agreements, covenants and obligations made or undertaken by Purchaser in this Agreement or in any document or instrument executed and delivered pursuant hereto are material, have been relied upon by the Seller and Keebler, shall survive the Closing hereunder and shall not merge in the performance of any obligation by any party hereto. 14 15 9.3 Survival of Representations and Warranties of Keebler. All representations, warranties, agreements, covenants and obligations made or undertaken by Keebler in this Agreement or in any document or instrument executed and delivered pursuant hereto are material, have been relied upon by Purchaser and Seller, shall survive the Closing hereunder, and shall not merge in the performance of any obligation by any party hereto. 10. TERMINATION. 10.1 Method of Termination Prior to Closing. This Agreement shall terminate immediately (a) if the Underwriting Agreement has not been (i) executed by the parties thereto and (ii) prior to such execution, consented to by Flowers in writing, in each case by 11:59 p.m. on the date hereof, or (b) upon termination or abandonment of the Underwriting Agreement by the parties thereto without any further action by the parties hereto, and may also be terminated or abandoned prior to Closing only by the mutual written consent of Purchaser and Seller, notwithstanding prior approval by either of such corporations. 10.2 Effect of Termination Prior to Closing. In the event of a termination of this Agreement, prior to Closing (i) each party shall pay the costs and expenses incurred by it in connection herewith, (ii) no party (or any of its officers, directors, employees, agents, representatives) shall be liable to any other party for any costs, expenses, damage or loss of anticipated profits hereunder, (iii) each party shall retain any and all rights attendant to any breach of any covenant, representation or warranty made hereunder and (iv) the Stockholders' Agreement shall remain in full force and effect. 10.3 Termination Following Closing. Should Closing occur, this Agreement (i) shall not terminate, (ii) shall be in full force and effect , (iii) shall be binding on any party hereto until January 26, 2006, and (iv) as of January 26, 2006, (A) shall terminate, (B) shall thereafter have no further forces or effect, and (C) shall not be binding any party hereto except that the provisions contained in Annex A hereto which by their terms are applicable after consummation of an offering made pursuant thereto (including, without limitation, provisions relating to indemnification and contribution) shall continue to remain in full force and effect as provided therein with respect to offerings made pursuant thereto prior to January 26, 2006.. 11. REGISTRATION RIGHTS. 11.1 The procedures and further agreements of the parties hereto regarding the Seller's Registration Rights for Seller's Shares which are not sold to Purchaser pursuant to this Agreement and not sold in the IPO are set forth in Annex A to this Agreement and incorporated herein by reference. 15 16 12. DIRECTORS DESIGNATED BY SELLER; RIGHT OF FIRST REFUSAL. 12.1 Election of Directors. From and after the Closing Date, Seller shall be entitled to nominate two (2) individuals for election to the Keebler Board of Directors, provided, however, that if Seller (together with its Affiliates) ceases to beneficially own at least 6,879,000 shares of Keebler Stock on a fully-diluted basis, Seller shall only be entitled to nominate one (1) individual for election to the Keebler Board of Directors pursuant to this Section 12.1, and provided, further, that if Seller (together with its Affiliates) ceases to beneficially own at least 2,866,250 shares of Keebler Stock on a fully-diluted basis, Seller shall no longer be entitled to nominate an individual to the Keebler Board of Directors pursuant to this Section 12.1. Purchaser agrees to vote, in person or by proxy, or to enter into written consents in respect of, all of the Keebler Stock owned by Purchaser at any annual or special meeting of the stockholders of Keebler called for the purpose of voting on the election of Directors or by consensual action of stockholders without a meeting with respect to the election of Directors, in favor of the election of the individuals nominated by Seller in accordance with this Section 12.1. At all times Seller shall have the right to recommend the removal, with or without cause, of such Directors and the nomination of a replacement therefor. At such time as Seller (together with its Affiliates) becomes the beneficial owner of less than 6,879,000 shares of Keebler Stock, on a fully-diluted basis, Seller shall cause one of the Directors nominated by it and then serving on the Keebler Board of Directors pursuant to this Section 12.1 to tender his or her resignation. At such time as Seller (together with its Affiliates) becomes the beneficial owner of less than 2,866,250 shares of Keebler Stock, on a fully diluted basis, Seller shall cause each of the Directors nominated by it and then serving on the Keebler Board of Directors pursuant to this Section 12.1 to tender his or her resignation. Only Keebler Stock owned by Seller on the date hereof shall be counted for purposes of determining whether Seller (together with its Affiliates) holds the requisite percentages to be entitled to nominate Directors. In addition, for so long as Seller is entitled to nominate at least one Director, it may designate one of its nominees to sit on each committee of the Board of Directors unless such director is prohibited from sitting on such committee under the rules of any applicable stock exchange or regulatory authority. 12.2 Vacancies. In the event a vacancy is created on the Board by reason of the death, removal or resignation (other than a vacancy pursuant to Section 12.1 resulting from the reduction in the number of shares of Keebler Stock beneficially owned by Seller and its Affiliates) of any one of the Seller Directors, the parties hereby agree to cause Keebler's Board of Directors to promptly hold a special meeting of the Board or to enter into a written consent of Directors without a meeting, and to designate a person selected in accordance with Section 12.1 hereof to fill such vacancy until the next annual meeting of stockholders of Keebler and, if necessary, in favor of removing any director, if any, who had been elected to fill such vacancy otherwise than in accordance with the selection procedures of Section 12.1 hereof. At such next annual meeting of stockholders of Keebler, each of Purchaser and Seller agrees to vote all its shares of Keebler Stock in favor of the person or persons selected in accordance with Section 12.1 for a term equal to the remaining term of the original director whose death, removal or resignation created the vacancy. 12.3 Restrictions on Other Agreements. 16 17 12.3.1 Neither Seller nor Purchaser shall grant any proxy or enter into or agree to be bound by any voting trust or voting agreement or any stockholder agreements or arrangements of any kind with any Person with respect to any Securities on terms inconsistent with the provisions of this Agreement, including but not limited to, agreements or arrangements with respect to the acquisition or disposition of Securities in a manner which is inconsistent with this Agreement. 12.3.2 Seller shall not, without the prior approval of a majority of the Board of Directors of Keebler (excluding for the purpose of determining whether there is a majority any Seller Director) (a) solicit, or in any way encourage or assist in the solicitation of, proxies with respect to any Securities intended to result in the election of directors of Keebler in opposition to those directors recommended by the Board of Directors of Keebler, so long as such board recommendation is not inconsistent with the terms of this Agreement, nor shall it become a "participant" in any "solicitation" (as such terms are used in Rule 14a-11 under the Exchange Act) relating to any such election or (b) join a "group" (as such term is used in Section 13(d)(3) of the Exchange Act), or otherwise act in concert with any other Person for the purpose of seeking to (i) enter into, directly or indirectly, any merger or business combination involving Keebler (ii) purchase, directly or indirectly, a controlling interest in Keebler or (iii) change the directors of Keebler, so long as, with respect to clauses (i), (ii) and (iii), Seller has received prior written notification from Keebler that such action is opposed by a majority of the Board of Directors of Keebler (excluding for the purpose of determining whether there is a majority any Seller Director); it being understood that neither (a) nor (b) shall prevent (x) soliciting efforts by Seller not as a member of a "group" or in concert with any other Person either in favor of or against any transaction (including a merger or other business combination) involving Keebler or its stockholders or (y) the sale of shares of Keebler Stock by Seller at any time to any Person. 12.3.3 By execution of this Agreement, each of Seller and Purchaser represents that it is not presently a party to, or bound by, any arrangement prohibited by this Section 12.3. 12.4 The procedures and further agreements of the parties hereto regarding the grant by Seller to Keebler of a right of first refusal in respect of the Seller's Shares (other than the Acquired Shares and Seller's Shares sold in the IPO) are set forth in Annex B to this Agreement and incorporated herein by reference. 13. SELLER CONSENT RIGHTS. 13.1 Corporate Actions. 13.1.1 From the Closing Date until the earlier of (i) the date on which Seller (together with its Affiliates) beneficially owns less than 4,586,000 shares of Keebler Stock or (ii) thirty-six (36) months after the termination of the Lockup Period (such period, the "Standard Consent Period"), the actions set forth in subsections (b), (c), (e) and (f) of Annex C shall require the prior written consent of Seller, and Keebler and Purchaser shall not take or permit to be taken any such actions without such prior written consent; provided, however, that 17 18 the Extension Period shall be added to, and extend, the thirty-six (36) month period set forth in (ii) above. 13.1.2 From the Closing Date until the date on which Seller (together with its Affiliates) beneficially owns less than 2,293,000 shares of Keebler Stock, the actions set forth in subsections (a) and (g) of Annex C shall require the prior written consent of Seller, and Keebler and Purchaser shall not take or permit to be taken any such action without such prior written consent. 13.1.3 From the Closing Date until the earlier of (i) the date on which Seller (together with its Affiliates) beneficially owns less than 4,586,000 shares of Keebler Stock or (ii) thirty-six (36) months after the Closing Date (such period, the "CEO Consent Period"), the action set forth in subsection (d) of Annex C shall require the prior written consent of at least one of the Seller Directors, and Keebler and Purchaser shall not take or permit to be taken any such action without such prior written consent; provided, however, that the Extension Period shall be added to, and extend, the thirty-six (36) month period set forth in (ii) above. 13.1.4 With respect to each of the actions set forth in subsections (a) through (g) of Annex C, the actions set forth in subsection (h) of Annex C shall require the prior written consent of Seller, and Keebler and Purchaser shall not take or permit to be taken any such action without such prior written consent, for so long as each such underlying action requires such prior written consent. 13.2 Purchases of Keebler Stock. 13.2.1 From the Closing Date until the earlier of (i) the date on which Seller (together with its Affiliates) beneficially owns less than 4,586,000 shares of Keebler Stock or (ii) twenty-four (24) months after the termination of the Lockup Period (such period, the "Initial Stock Repurchase Consent Period"), any purchase of shares of Keebler Stock by Purchaser or Keebler (other than purchases (A) by Purchaser or Keebler pursuant to put rights contained in agreements in effect on the Closing Date, (B) by Purchaser or Keebler from Artal or Management so long as such shares of Keebler Stock are not part of the Public Float at the time of purchase, (C) by Keebler from Bermore of Bermore's Shares which are permitted to be transferred by Bermore as a "Monthly Transfer" pursuant to Section 4.2(e) of the Bermore Agreement or by Purchaser or Keebler, as the case may be, pursuant to the tag-along and drag-along rights contained in Sections 4.3 and 4.4 of the Bermore Agreement and (D) by Purchaser and Keebler which together, in the aggregate with any prior such purchases, do not exceed fifteen percent (15%) of the Public Float in Keebler Stock immediately after the Closing) shall not be consummated without the prior written consent of Seller, and Keebler and Purchaser shall not take or permit to be taken any such action without such prior written consent; provided, however, that the Extension Period shall be added to the twenty-four (24) month period set forth in (ii) above; and provided, further, that Purchaser will have the right at any time to purchase the number of shares of Keebler Stock required to maintain beneficial ownership of at least fifty-one percent (51%) of Keebler Stock on a fully diluted basis. 18 19 13.2.2 After the expiration of the Initial Stock Repurchase Consent Period (including any Extension Period added thereto) and until the earlier of (i) the date on which Seller (together with its Affiliates) beneficially owns less than 4,586,000 shares of Keebler Stock or (ii) thirty-six (36) months after the termination of the Lockup Period (the Second Stock Repurchase Consent Period), any purchase of shares of Keebler Stock by Purchaser or Keebler (other than purchases (A) by Purchaser or Keebler pursuant to put rights contained in agreements in effect on the Closing Date, (B) by Purchaser or Keebler from Artal, Bermore or Management so long as such shares of Keebler Stock are not part of the Public Float at the time of purchase , (C) by Keebler from Bermore of Bermore's Shares which are permitted to be transferred by Bermore as a "Monthly Transfer" pursuant to Section 4.2(e) of the Bermore Agreement or by Purchaser or Keebler, as the case may be, pursuant to the tag-along and drag-along rights contained in Sections 4.3 and 4.4 of the Bermore Agreement and (D) by Purchaser and Keebler which together, in the aggregate with any prior such purchases during the Second Stock Repurchase Consent Period and purchases made during the Initial Stock Repurchase Consent Period, do not exceed fifteen percent (15%) of the Public Float in Keebler Stock on the date immediately preceding any such purchase) shall not be consummated without the prior written consent of Seller, and Keebler and Purchaser shall not take or permit to be taken any such action without such prior written consent; provided, however, that the Extension Period shall be added to the thirty-six (36) month period set forth in (ii) above, and provided, further, that Purchaser will have the right at any time to purchase the number of shares of Keebler Stock required to maintain beneficial ownership of at least fifty-one percent (51%) of Keebler Stock on a fully diluted basis. 13.3 Sales of Keebler Stock. Until the expiration of the Standard Consent Period (including any Extension Period added thereto), the Purchaser agrees not to sell any shares of Keebler Stock without the prior written consent of Seller, and Purchaser shall not take or permit to be taken any such action without such prior written consent, other than private placements of Keebler Stock by Purchaser in connection with any strategic joint venture or other similar transactions entered into by Purchaser so long as Purchaser retains a majority of the economic benefit and the controlling voting interest in such joint venture or other similar entity. 13.4 For purposes of this Agreement, the "Extension Period" shall mean the period equal to the aggregate periods of any postponements or suspensions made pursuant to Section 1.1(g) of Annex A, excluding the first thirty days of the first such postponement or suspension; provided, however, that the Extension Period shall extend the Standard Consent Period, the CEO Consent Period, the Initial Stock Repurchase Consent Period or the Second Stock Repurchase Consent Period only if such postponements or suspensions occur prior to the end of such respective period and shall only extend such respective period for the lesser of (i) one hundred eighty (180) days or (ii) that number of days that would provide for a full number of days in the respective period if there had not been a postponement or suspension. Should there be any postponement or suspension occurring during the Extension Period then the Extension Period shall be extended further for the amount of time of each such postponement or suspension. 13.5 No After Acquired Shares. For purposes of calculating the share ownership of Seller (together with its Affiliates) under this Agreement (including, without 19 20 limitation, Articles 12 and 13 hereof) only the shares owned by Seller as of the date hereof shall be counted and any shares acquired by Seller or any of its Affiliates after the date hereof (except for shares owned as of the date hereof by Seller or any of its Affiliates which are subsequently acquired by Seller or any Affiliate through transfers among themselves) shall not be counted. 13.6 Beneficial Ownership. For purposes of this Agreement, Seller (together with its Affiliates) shall be deemed to beneficially own shares of Keebler Stock if they would be deemed a beneficial owner for purposes of Rule 13d-3 of the Exchange Act. 14. GENERAL PROVISIONS. 14.1 Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be delivered by hand, mailed by registered or certified mail, return receipt requested, or sent by Federal Express or other nationally recognized overnight delivery service addressed as follows: 14.1.1 If to the Seller: Artal Luxembourg S.A. 39 Boulevard Royal Luxembourg City, Luxembourg Attn: Managing Director with copies to: c/o The Invus Group, Ltd. 135 E. 57th Street, 30th Floor New York, New York 10022 Attn: Raymond Debbane and: Simpson Thacher & Bartlett 425 Lexington Avenue New York, New York 10017 Attn: Robert E. Spatt, Esq. 14.1.2 If to Purchaser: G. Anthony Campbell, Esq. Flowers Industries, Inc. 1919 Flowers Circle Thomasville, Georgia 31757 20 21 with a copy to: Robert W. Smith, Esq. and Barry J. Stein, Esq. Jones, Day, Reavis & Pogue 3500 SunTrust Plaza 303 Peachtree Street, N.E. Atlanta, Georgia 30308-3242 14.1.3 If to Keebler: Thomas E. O'Neill, Esq. Keebler Company 677 Larch Avenue Elmhurst, Illinois 60126 with a copy to: Bruce A. Toth Winston & Strawn 35 West Wacker Drive Chicago, Illinois 60601 14.1.4 If delivered personally, the date on which a notice, request, instruction or document is delivered shall be the date on which such delivery is made. If delivered by mail or overnight delivery service, the date on which such notice, request, instruction or document is received shall be the date of delivery. In the event any such notice, request, instruction or document is mailed or sent to a party in accordance with this Section 13.1 and is returned to the sender as nondeliverable, then such notice, request, instruction or document shall be deemed to have been delivered or received on the fifth day following the deposit of such notice, request, instruction or document in the United States mails or overnight delivery service, as the case may be. 14.1.5 Any party hereto may change its address specified for notices herein by designating a new address by notice in accordance with this Section 12.1. 14.2 Certificates Representing Seller's Shares. Immediately upon consummation of the Closing, Keebler will deliver to Seller validly issued and executed stock certificates representing the remaining Seller's Shares, which certificates shall no longer bear the legends currently required by the Stockholders' Agreement. 14.3 Remedies. 14.3.1 Each party hereto shall have all rights and remedies reserved for such party pursuant to this Agreement, Keebler's certificate of incorporation and by-laws and all 21 22 rights and remedies which such holders have been granted at any time under any other agreement or contract and all of the rights which such holders have under any law or equity. Any Person having any rights under any provision of this Agreement will be entitled to enforce such rights specifically, to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law or equity. 14.3.2 The parties hereto agree that if any parties seek to resolve any dispute arising under this Agreement pursuant to a legal proceeding, the "prevailing" parties to such proceeding shall be entitled to receive reasonable fees and expenses (including reasonably attorneys' fees and expenses) incurred in connection with such proceedings. For purposes of this Section 14.3.2, a party shall be deemed to be a "prevailing" party only if it prevails on each element of its claim (including the amount and type of damages sought). If neither party is the prevailing party, the parties agree to request the court or other decision making body to make a separate determination as to the allocation of fees and expenses. 14.3.3 It is acknowledged that it will be impossible to measure in money the damages that would be suffered if the parties fail to comply with any of the obligations herein imposed on them and that in the event of any such failure, an aggrieved Person will be irreparably damaged and will not have an adequate remedy at law. Any such Person shall, therefore, be entitled to injunctive relief, including specific performance, to enforce such obligations, and if any action should be brought in equity to enforce any of the provisions of this Agreement, none of the parties hereto shall raise the defense that there is an adequate remedy at law. 14.4 Brokers. 14.4.1 Seller agrees to indemnify and hold harmless the Purchaser from and against any fee, claim, loss, or expense arising out of any claim by any investment banker, broker or finder employed or alleged to have been employed by it. 14.4.2 Purchaser agrees to indemnify and hold harmless the Seller from and against any fee, claim, loss, or expense arising out of any claim by any investment banker, broker or finder employed or alleged to have been employed by it. 14.4.3 Keebler agrees to indemnify and hold harmless the Purchaser and the Seller from and against any fee, claim, loss or expense arising out of any claim by any investment banker, broker, or finder employed or alleged to have been employed by it. 14.5 Further Assurances. Each party covenants that at any time, and from time to time, after the Closing Date, it will execute such additional instruments and take such actions as may be reasonably requested by the other parties to confirm or perfect or otherwise to carry out the intent and purposes of this Agreement. 14.6 Waiver. Any failure on the part of any party hereto to comply with any of its obligations, agreements or conditions hereunder may be waived by any other party to whom such compliance is owed. No waiver of any provision of this Agreement shall be deemed, or 22 23 shall constitute, a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver. 14.7 Expenses. All expenses incurred by the parties hereto in connection with or related to the authorization, preparation and execution of this Agreement and the closing of the transactions contemplated hereby, including, without limiting the generality of the foregoing, all fees and expenses of brokers, agents, representatives, counsel and accountants employed by any such party, shall be borne solely and entirely by the party which has incurred the same. Notwithstanding the foregoing, except for the underwriting discounts in respect of the Seller's Shares sold in the IPO and Seller's out-of-pocket expenses, Keebler will bear all costs and expenses in connection with the registration of Seller's Shares in the Registration Statement, review and finalization of underwriting arrangements and all other aspects of the IPO in accordance with Annex A of the Stockholders' Agreement (except that the reasonable fees and disbursements of Seller's counsel related to the IPO shall also be borne by Keebler). 14.8 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legal representatives, executors, administrators, successors and assigns. Except as provided in Section 1.9 of Annex A, this Agreement shall not be assignable by Seller, Purchaser or Keebler without the prior written consent of Seller and Purchaser, except that Seller may transfer all or any portion of the Seller's Shares, including all rights and obligations hereunder associated with beneficial ownership of such Seller's Shares, to any of its Affiliates (excluding Keebler) and any such Affiliate shall be subject to all of the rights and obligations contained in this Agreement applicable to Seller. 14.9 Headings. The section and other headings in this Agreement are inserted solely as a matter of convenience and for reference, and are not a part of this Agreement. 14.10 Entire Agreement. This Agreement constitutes the entire agreement among the parties hereto and supersedes and cancels any prior agreements, representations, warranties, or communications, whether oral or written, among the parties hereto relating to the transactions contemplated hereby or the subject matter herein, except that the provisions contained in Annex A of the Stockholders' Agreement which by their terms are applicable after the consummation of an offering made pursuant thereto (including without limitation, provisions relating to indemnification and contribution) shall continue in full force and effect as provided therein with respect to Seller's Shares sold in the IPO. Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally, but only by an agreement in writing signed by Purchaser and Seller. Any such change, waiver, discharge or termination may be made without the agreement of Keebler, unless such change, waiver, discharge or termination would materially and adversely affect Keebler's rights and obligations hereunder. 14.11 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to the principles thereof regarding conflict of laws, except for matters directly within the purview of the DGCL. 14.12 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute 23 24 one and the same instrument. It shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart. 14.13 Pronouns. All pronouns used herein shall be deemed to refer to the masculine, feminine or neuter gender as the context requires. 14.14 Exhibits Incorporated. All Exhibits and Annexes attached hereto are incorporated herein by reference. 14.15 Time of Essence. Time is of the essence in this Agreement. 14.16 Severability. Whenever possible, each provision of this Agreement will be interpreted in such a manner as to be effective and valid under applicable law. The parties agree that (i) the provisions of this Agreement shall be severable in the event that any of the provisions hereof are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, (ii) such invalid, void or otherwise unenforceable provisions shall be automatically replaced by other provisions which are as similar as possible in terms to such invalid, void or otherwise unenforceable provisions but are valid and enforceable and (iii) the remaining provisions shall remain enforceable to the extent permitted by law. 14.17 Jurisdiction; Venue; Process. 14.17.1 The parties to this Agreement agree that jurisdiction and venue in any action brought by any party hereto pursuant to this Agreement shall properly lie and shall be brought in any federal or state court located in the State of New York. By execution and delivery of this Agreement, each party hereto irrevocably submits to the jurisdiction of such courts for itself or himself and in respect of its or his property with respect to such action. The parties hereto irrevocably agree that venue would be proper in such court, and hereby irrevocably waive any objection that such court is an improper or inconvenient forum for the resolution of such action. 14.17.2 Seller hereby irrevocably and unconditionally designates and directs Mr. David Van Zandt, with offices on the date hereof at Northwestern University School of Law, 357 East Chicago Avenue, Chicago, Illinois 60611, as its agent to receive service of any and all process and documents on its behalf in any legal action or proceeding related to this Agreement and agrees that service upon such agent shall constitute valid and effective service upon Seller and that failure of such agent to give any notice of such service to Seller shall not affect or impair in any way the validity of such service or of any judgment rendered in any action or proceeding based thereon. 14.18 Mutual Waiver of Jury Trial. The parties hereto waive all right to trial by jury in any action, suit or proceeding brought to enforce or defend any rights or remedies under this Agreement or any documents related hereto. 14.19 Financial Statements. At all times while Seller is entitled to nominate a Seller Director to serve on the Board of Directors of Keebler, Keebler shall deliver to any person 24 25 who is a Seller Director (on behalf of Seller and such person who is a Seller Director) all information furnished to any person who is a director of Keebler (or to any related or associated person on his or her behalf), and any person who is a Seller Director (and up to three other individuals who are designated by Seller in writing from time to time to act on behalf of Seller and such person who is a Seller Director) may request (on behalf of Seller and such person who is a Seller Director) and will receive from any of Keebler's executive officers a copy of any written information or report which has been generated by Keebler; provided, however, that Keebler shall not be required to draft or generate specifically for Seller and any such person who is a Seller Director any new information or report not otherwise prepared; and provided, further, that the scope and timing of any such request do not unreasonably interfere with management's ability to conduct the business of Keebler or the ability of any particular executive officer to perform his duties. Any person who is a Seller Director (and up to three other individuals who are designated by Seller in writing from time to time to act on behalf of Seller and such person who is a Seller Director) may also contact any of Keebler's executive officers from time to time to receive (on behalf of Seller and such person who is a Seller Director) an oral report on the status of Keebler's operations and business; provided, that the scope and timing of any such contact do not unreasonably interfere with management's ability to conduct the business of Keebler or the ability of any particular executive officer to perform his duties. Seller hereby covenants to keep all such information and reports confidential and, without Keebler's prior written consent, not to disclose (except (i) as required by judicial or administrative order or (ii), in the written opinion of counsel for Seller, as required by law) any such information or reports other than to those of its officers, directors, employees, advisors and representatives with a need to know the information contained therein; provided that each such person, as well as the Seller Directors and the three other individuals who are designated from time to time as described above, shall be informed of the confidential nature of the information and reports and Seller will be responsible for any breach of this provision by any such person. The preceding sentence shall be inoperative as to any particular information or report if it (i) becomes generally available to the public other than as a result of a disclosure by Seller or its officers, directors, employees, advisors or representatives in violation of the preceding sentence, (ii) was available to Seller or any such person on a non-confidential basis at or prior to the time of its disclosure to Seller or any such person by Keebler or its executive officers or (iii) becomes available to Seller on a nonconfidential basis from a source other than Keebler or its executive officers, when Seller has no reasonable basis to believe that such source is prohibited by a legal, contractual or fiduciary obligation from making such disclosure to Seller or any such person. 14.20 Antidilution. The parties recognize that all references to amounts of shares of Keebler Stock and the price per share to be paid by Purchaser for any such shares referenced herein give effect to a 1-for-10 reverse stock split that occurred prior to the date hereof and assumes consummation of a 57.325-for-1 stock split of the Keebler Stock to be consummated by the Company immediately prior to Closing. An appropriate and proportionate adjustment shall be made to all references to amounts of shares of Keebler Stock referenced herein for any event, subsequent to Closing, whereby the outstanding shares of Keebler Stock shall be, without consideration, increased, decreased, changed into, or exchanged for a different number or kind of shares or securities through recapitalization, reclassification, stock dividend, stock split, reverse stock split, or other like changes to Keebler's capitalization. 25 26 IN WITNESS WHEREOF, each party hereto has executed or caused this Agreement to be executed on its behalf, all on the day and year first above written. FLOWERS INDUSTRIES, INC. "Purchaser" By: /s/ Robert P. Crozer ------------------------------------- Name: Robert P. Crozer -------------------------------- Title: Vice Chairman ------------------------------- ARTAL LUXEMBOURG S.A. "Seller" By: /s/ Paul R. Komler ------------------------------------- Name: Paul R. Komler -------------------------------- Title: Managing Director ------------------------------- KEEBLER FOODS COMPANY "Keebler" By: /s/ Thomas E. O'Neill ------------------------------------- Name: Thomas E. O'Neill -------------------------------- Title: Vice President, Secretary & ------------------------------- General Counsel ------------------------------- 27 LIST OF ANNEXES Annex A -- Provisions Relating to Shelf and Demand Registration Annex B -- Provisions Relating to Purchaser's Right of First Refusal Annex C -- Seller Consent Rights 28 ANNEX B RIGHT OF FIRST REFUSAL If, at any time after the Closing, Seller receives a bona fide offer to purchase any or all of its shares of Keebler Stock, (the "Offer") from any of the entities named in a letter signed by the Seller and Purchaser on the date hereof, or from any of such entity's affiliates or successors (the "Offeror"), which Seller wishes to accept, Seller shall cause the Offer to be reduced to writing and shall notify Purchaser in writing (the "Offer Notice") of its wish to accept the Offer. The Offer Notice will disclose in reasonable detail the proposed type and number of shares of Keebler Stock (the "Offered Securities") and the proposed terms and conditions of the transfer (including, in the event that the consideration to be received by Seller in the Offer includes non-cash consideration, Seller's good faith reasonable estimate (the "Seller Estimate") of the cash value of such non-cash consideration), and shall be accompanied by a true copy of the Offer (which shall identify the Offeror). Seller shall not be permitted to accept any such Offer unless the right of first refusal procedures set forth in this Annex B are complied with. Purchaser may elect to purchase all (but not less than all) of such Offered Securities at the price and on the terms specified in the Offer Notice by delivering written notice of such election to Seller as soon as practicable, but in any event within 15 days after delivery of the Offer Notice (the "Election Period"). In the event that the terms of any Offer provide for the delivery of non-cash consideration for the Offered Securities, Purchaser may deliver cash for such Offered Securities in an amount equal to the value of such non-cash consideration either in accordance with the Seller Estimate (or such other amount as agreed by Seller and Purchaser) or, if Purchaser and Seller do not agree, as determined by in investment banking firm of national reputation selected by mutual agreement of Purchaser and Seller, provided, that such investment banking firm shall not have a material direct or indirect financial interest in or other relationship with any of the parties hereto or their respective subsidiaries or affiliates. If Purchaser has elected to purchase all the Offered Securities from Seller, the transfer of such Offered Securities shall be consummated as soon as practicable after the delivery of the election notice, but in any event within 15 days after the expiration of the Election Period (unless a longer period of time is necessary to comply with the requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, in which case such longer period). If Purchaser has not elected to purchase (or has failed within such 15-day period or longer period, if applicable, to purchase after electing to do so) the Offered Securities being offered, Seller may, within 75 days after the date of the Offer Notice, transfer all the Offered Securities to the Offeror at a price no less than the price specified in the Offer Notice and on other terms no less favorable to Seller than those contained in the Offer. If, at the end of such 75 day period, Seller has not completed the transfer of such Offered Securities as aforesaid, all the restrictions or transfer contained in this Annex B shall again be in effect with respect to such Keebler Stock. 29 ANNEX C SELLER CONSENT RIGHTS (a) Any amendment to the certificate of incorporation (including any certificate of designations) or bylaws of Keebler or any other related corporate actions such as adoption of a "poison pill" or rights plan by Keebler or electing to opt into the provisions of Section 203 of the DGCL (or any successor statute adopted subsequent to the date hereof by the State of Delaware or, if Keebler reincorporates in a jurisdiction other than the State of Delaware, any similar statute of any such jurisdiction) which could reasonably be expected to adversely affect (except in immaterial respects) or is otherwise inconsistent with (except in immaterial respects), Seller's rights under this Agreement (it being expressly agreed that (i) customary defensive charter, by-law and related provisions or plans adopted or approved by the Board of Directors of Keebler in connection with or after the IPO and (ii) any impediments or restrictions (other than impediments or restrictions (x) imposed pursuant to mandatory applicable law or Annex B hereto or (y) which are immaterial) on (A) Seller's ability to own, vote or dispose of the Seller's Shares or engage in transactions involving Keebler, or (B) any acquiror or potential acquiror of Seller's Shares ability to own, vote or dispose of the Seller's Shares or engage in transactions involving Keebler, would adversely affect Seller's rights under, and are inconsistent with the provisions of, this Agreement for purposes of this paragraph (a) of Annex C, and it being expressly acknowledged that the fact that a proposed corporate action not of the nature described in (i) or (ii) of this parenthetical could reasonably by expected to, or does, affect the economic value of the Keebler Stock would not, by itself, subject such matter to the Seller consent right described in this paragraph (a)). (b) Any merger, consolidation or similar business combination involving Keebler or any sale of substantially all of Keebler's assets or equity, or any reorganization or recapitalization having similar effect, if such transaction results in any consideration other than cash being paid to Keebler shareholders. (c) Any acquisition or disposition (whether by way of sale, lease, assignment, transfer or other disposition) of assets (including, without limitation, primary or secondary stock or assets of Keebler's subsidiaries) involving aggregate consideration with a value in excess of $250,000,000, other than the sale of goods in the ordinary course of business. (d) Termination of the Chief Executive Officer or appointment of a Chief Executive Officer other than Samuel K. Reed. (e) Issuance or sale by Keebler of any capital stock or stock options or securities convertible into or exchangeable for capital stock, other than pursuant to (i) outstanding stock options, (ii) stock options or other executive compensation permitted to be granted pursuant to the proviso set forth in paragraph (f) below, (iii) stock option plans or stock option grants approved by Seller pursuant to Section 13.1 hereof, or (iv) in connection with acquisitions (subject to paragraph (c) above), provided that capital stock issued in 30 connection with such acquisitions (A) shall not exceed in the aggregate $50,000,000 in value (which value shall be determined by (i) multiplying the number of shares of capital stock issued on any one occasion by the closing trading price of such capital stock on the business day immediately preceding such issuance and (ii) aggregating the amounts from each such occasion) from the Closing Date until the period ending during the twelve (12) months following the termination of the Lockup Period; (B) shall not exceed in the aggregate $75,000,000 in value (which value shall be determined by (i) multiplying the number of shares of capital stock issued on any one occasion by the closing trading price of such capital stock on the business day immediately preceding such issuance and (ii) aggregating the amounts from each such occasion) during any consecutive thirty-six (36) month period following the termination of the Lockup Period (including amounts issued pursuant to clause (A)) and (C) shall be issued pursuant to an exemption from registration under the 1933 Act in an unregistered transaction and shall be subject to contractual resale restrictions which extend for a period of no less than one year from the date of issuance. (f) Grants under currently existing stock option or executive compensation plans or any other stock option or executive compensation plan that provides for the issuance of Keebler Stock or Securities convertible into Keebler Stock; provided that this subparagraph (f) shall not apply to grants of stock options or executive compensation to the extent that such grants or executive compensation provide in the aggregate for further issuances of shares of Keebler Stock after the IPO in an amount equal to no more than four percent (4%) of the amount of Keebler Stock issued, on a fully-diluted basis, immediately upon consummation of the Closing of the IPO. (g) Any related-party transaction with Keebler, except for transactions in the ordinary course of business on terms no less favorable to Keebler than could be obtained in a comparable arm's-length transaction with an independent third party. (h) Any contract or agreement to do any of the foregoing. EX-2.02 3 STOCK PURCHASE AND STOCKHOLDER'S AGREEMENT 1 EXHIBIT 2.02 STOCK PURCHASE AND STOCKHOLDER'S AGREEMENT STOCK PURCHASE AND STOCKHOLDER'S AGREEMENT (this "Agreement"), dated as of January 28, 1998, among the Company, Artal Luxembourg S.A., Flowers (as defined in Article I below) and Bermore, Ltd. WHEREAS, Artal Luxembourg S.A. has requested, and Flowers has consented to, a demand registration pursuant to Section 1.1(a) of the Original Stockholders' Agreement; WHEREAS, Artal Luxembourg S.A. and Flowers have caused the Company, on December 12, 1997, to file the S-1 Registration Statement with the SEC relating to the sale of the Artal IPO Shares and the Bermore IPO Shares; WHEREAS, it is expected that the S-1 Registration Statement will be declared effective by the SEC at 12:00 p.m. on the date hereof, subsequent to the execution of this Agreement; WHEREAS, based upon an evaluation of their discussions with the Underwriters and generally prevailing market conditions, each of the parties hereto believes that the Underwriting Agreement will be executed on the date hereof; WHEREAS, if the IPO is consummated, Artal Luxembourg S.A. and Flowers have agreed that Flowers will purchase the Artal Control Shares simultaneously with the Closing in connection with consummation of the Control Transaction, upon the terms and conditions set forth in the New Stockholders' Agreement; and WHEREAS, if the Control Transaction is consummated, Artal Luxembourg S.A., Flowers and Bermore, Ltd. have agreed that Flowers also will purchase the Bermore Control Shares simultaneously with the Closing in connection with consummation of the Control Transaction, upon the terms and conditions set forth herein; NOW, THEREFORE, in order to implement the foregoing and in consideration of the mutual representations, warranties, covenants and agreements contained herein, the parties hereto agree as follows: ARTICLE I DEFINITIONS 1.1 Definitions. Capitalized terms used herein shall have the meanings set forth below: "Affiliate" means any Person which, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, another Person. The term "control" includes, without limitation, the possession, directly or indirectly, of the power to direct the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. "Agreement" shall have the meaning specified in the first paragraph hereof. 2 2 "Artal" means Artal Luxembourg S.A., together and collectively with any other Person who becomes the owner of Artal Shares in accordance with Section 2.13 hereof. "Artal Basket" means the number of Artal Shares that is equal to the product of 1,031,850 and a fraction, (i) the numerator of which is the number of Remaining Artal Shares and (ii) the denominator of which is the number of Remaining Bermore Shares. "Artal Control Shares" means the 9,581,169 Artal Shares to be sold by Artal to Flowers upon Closing in connection with the consummation of the Control Transaction. "Artal IPO Shares" means the 7,121,485 shares of Common Stock to be sold by Artal in the IPO, as such number may be increased or decreased (whether to accomodate any exercises of overallotment options by the Underwriters or otherwise, including pursuant to Section 2.10 hereof). "Artal Shares" means (a) the Common Stock beneficially owned by Artal on the date of this Agreement and (b) all Common Stock, Preferred Stock, Common Stock Equivalents and indebtedness issued in respect thereof, in exchange therefor, or in substitution thereof, in connection with a Recapitalization. "Bermore" means Bermore, Ltd., a Bermuda company, together and collectively with any other Person who becomes the owner of Bermore Shares in accordance with Section 4.2(a), (c) or (d) hereof. "Bermore Control Shares" means the 1,616,691 Bermore Shares to be sold by Bermore to Flowers upon Closing in connection with the consummation of the Control Transaction. "Bermore IPO Shares" means the 4,343,515 Bermore Shares to be sold by Bermore in the IPO, as such number may be increased (whether to accomodate any exercises of overallotment options by the Underwriters or otherwise, including pursuant to Section 2.10 hereof). "Bermore Shares" means (a) the Common Stock beneficially owned by Bermore on the date of this Agreement, including, without limitation, shares of Common Stock issuable upon exercise of the GFI Warrant, and (b) all Common Stock, Preferred Stock, Common Stock Equivalents and indebtedness issued in respect thereof, in exchange therefor, or in substitution thereof, in connection with a Recapitalization. "Closing" means the consummation of the IPO and, if the IPO is consummated, the consummation of the Control Transaction. "Closing Date" means the date on which the Closing occurs. "Common Stock" means the Company's Common Stock, par value $.01 per share, and any capital stock of any class of the 3 3 Company hereafter authorized which is not limited to a fixed sum or percentage of par or stated value in respect to the rights of the holders thereof to participate in dividends or in the distribution of assets upon any liquidation, dissolution or winding up of the Company. "Common Stock Equivalents" means (without duplication with any Common Stock or other Common Stock Equivalents) rights, warrants, options, convertible securities, or exchangeable securities or indebtedness, or other rights, exercisable for or convertible or exchangeable into, directly or indirectly, Common Stock or securities exercisable for or convertible or exchangeable into Common Stock, whether at the time of issuance or upon the passage of time or the occurrence of some future event. "Company" means Keebler Foods Company, a Delaware corporation. "Control Transaction Price Per Share" means the price per share paid to Artal by Flowers for the Artal Control Shares. "Control Transaction" means the sale of the Artal Control Shares and the Bermore Control Shares to Flowers, which sale shall (i) occur simultaneously with and is conditioned upon the consummation of the IPO and (ii) result in Flowers owning 55.2% of the Common Stock. "Custodian" has the meaning set forth in Section 4.1. "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder. "Excluded Artal Transfer" means any Transfer of Artal Shares made in compliance with Section 2.13 (i) to or among its Affiliates, (ii) to or among any members of its Family Group, (iii) pursuant to a pledge or similar agreement to secure debt of the transferor (incurred in good faith and not for the purposes of avoiding Artal's obligations under Section 4.3, Section 4.3 or Article V) owing to a bank or other bona fide financial institution (provided that such security interest has not yet been exercised by the pledgee), including, without limitation, any such Transfer upon the exercise by such bank or other bona fide financial institution of its rights under such pledge or similar agreement to acquire beneficial or other ownership of the Artal Shares pledged thereunder, or (iv) by an individual upon his or her death to his or her estate, provided that the beneficiaries of the estate are Persons specified in clause (i) or (ii) hereof. "Family Group" means, with respect to any individual, such individual's spouse and descendants and such individual's parents, grandparents, aunts, uncles, brothers, sisters and their respective spouses and descendants (in each case, whether natural 4 4 or adopted) and any trust or similar entity established and maintained solely for the benefit of such individual and/or his spouse, descendants and/or such above-listed relatives and all of the aforesaid of the grantor of a trust that is a stockholder of the Company. "Flowers" means Flowers Industries, Inc., a Georgia corporation. "GFI" means G.F. Industries, Inc., a Nevada corporation. "GFI Warrant" means the warrant to purchase 6,135,781 shares of Common Stock at $3.2272 per share, issued to GFI on June 4, 1996 and subsequently transferred to Bermore. "HSR Act" means the Hart-Scott-Rodino Antitrust and Improvements Act of 1976, as amended. "Investor Joinder" means a joinder agreement, substantially in the form of Annex B hereto, by which a Person becomes a party to this Agreement after the date hereof. "IPO" means a public offering of the Artal IPO Shares and the Bermore IPO Shares to be consummated pursuant to the S-1 Registration Statement. "Lockup Expiration Date" means the date on which the lockup period provided for in the Underwriting Agreement has expired with respect to Artal or has otherwise been terminated or waived with respect to Artal. "Mandatory Sale Event" has the meaning set forth in Section 4.5. "Mandatory Sale Shares" has the meaning set forth in Section 4.5. "Monthly Transfer" has the meaning set forth in Section 4.2(e). "New Stockholders' Agreement" means the Stock Purchase Agreement dated as of January 28, 1998 among Artal, Flowers and the Company, including Annex A thereto (as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms hereof). "Original GFI Agreement" means the GFI Stockholder's Agreement dated as of June 4, 1996 among Artal, Flowers, GFI and the Company (including all of the provisions of Annex A thereto). "Original Stockholders' Agreement" means the Stockholders' Agreement dated as of January 26, 1996 among Artal, Flowers and the Company. 5 5 "Person" means an individual, a partnership, a joint venture, a corporation, an association, a joint stock company, a limited liability company, a trust, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof. "Preferred Stock" means any capital stock of any class of the Company hereafter authorized that provides for a preference on liquidation or with respect to dividends over any other class of capital stock of the Company or any similar kind of equity security. "Recapitalization" means any stock split, reverse stock split, dividend or combination, or any recapitalization, reclassification, merger, consolidation, sale of all or substantially all assets, exchange or other similar reorganization. "Release Date" means the earliest of (i) the date on which Artal owns less than 4,586,000 shares of Common Stock, (ii) the date that is three years after the Lockup Expiration Date or (iii) the date on which Artal's demand registration rights under the New Stockholders' Agreement have expired or have otherwise been terminated or waived in their entirety. "Remaining Artal Shares" means the Artal Shares owned by Artal immediately upon consummation of the Closing, after giving effect to the sale of the Artal IPO Shares and the Artal Control Shares. "Remaining Bermore Shares" means the Bermore Shares owned by Bermore immediately upon consummation of the Closing, after giving effect to the sale of the Bermore IPO Shares and the Bermore Control Shares. "Restricted Period" means the period from the Closing Date to but excluding the Release Date. "Rule 144" means Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC. "Rule 144A" means Rule 144A under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC. "SEC" means the Securities and Exchange Commission. "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder. "Securities Holding Company" shall have the meaning specified in Section 4.3. 6 6 "Subsidiary" means any corporation of which the securities having a majority of the ordinary voting power in electing the board of directors are, at the time as of which any determination is being made, owned by a Person either directly or through one or more of its Subsidiaries. "Tag/Drag Notice" has the meaning set forth in Section 4.3(a). "S-1 Registration Statement" means the Registration Statement on Form S-1 filed with the SEC by the Company on December 12, 1997, as amended through the date hereof, in respect of the IPO. "Transfer" shall be construed broadly and shall include any direct or indirect transfer by way of issuance, sale, assignment, hypothecation, disposition, participation, pledge, gift, bequeath, intestate transfer, distribution, liquidation, merger or consolidation. "Underwriters" means the underwriters in respect of the IPO. "Underwriting Agreement" means the underwriting agreement to be executed among Artal, Bermore, the Company and the Underwriters in respect of the IPO. "Warrant Exercise Price Per Share" means $3.2272. "Warrant Shares" means the 6,135,781 shares of Common Stock issuable to Bermore upon the exercise of the GFI Warrant in the manner contemplated by Section 2.3. ARTICLE II COVENANTS AND UNDERTAKINGS 2.1 Sale of Bermore Shares. Upon the terms and subject to the conditions set forth in this Agreement and on the basis of the representations, warranties, covenants, agreements, undertakings and obligations contained herein, if the IPO is consummated and, simultaneously with such consummation, the Control Transaction is consummated, (a) Bermore hereby agrees to sell at Closing, free and clear of all liens, encumbrances and claims of any nature (other than liens, encumbrances and claims resulting from the acts of the Underwriters or Flowers, respectively), the Bermore IPO shares in the IPO and the Bermore Control Shares to Flowers and (b) Flowers hereby agrees to purchase from Bermore at Closing the Bermore Control Shares. 2.2 Purchase Price and Payment for Bermore Control Shares. If the IPO is consummated, the product of (a) the Control Transaction Price Per Share and (b) the number of Bermore Control Shares shall be paid at Closing to Bermore by Flowers in cash by wire transfer in same-day funds to an account specified in writing by Bermore to Flowers at least two business days prior to Closing. 7 7 2.3 Exercise of GFI Warrant. At the Closing, the following actions shall occur, or shall be deemed to occur, simultaneously, notwithstanding anything to the contrary contained in the GFI Warrant: (a) Bermore shall, by delivery of a written notice to the Company, exercise the GFI Warrant and the Company shall, without receipt of any cash consideration by the Company directly from Bermore in respect of such exercise, (i) cancel the GFI Warrant and deliver to Bermore a stock certificate registered in its name representing 6,135,781 shares of Common Stock and (ii) cancel such stock certificate and issue (A) to Flowers a stock certificate registered in its name representing 1,616,691 shares of Common Stock, which certificate shall bear all appropriate legends and other notations, if any, and (B) a stock certificate to the Underwriters representing a number of shares of Common Stock equal to the Bermore IPO Shares registered in such names as may be requested by the Underwriters, which certificate shall not bear any restrictive legends; and (b) An amount equal to $19,801,392.44 shall be deducted from the net amount to be wired to Bermore by the Underwriters as consideration for the Warrant Shares, and such amount shall be wired by the Underwriters to the Company on behalf of Bermore and shall constitute valid payment in full by Bermore for the shares of Common Stock issued upon exercise of the GFI Warrant, in accordance with the terms of the GFI Warrant. 2.4 Remaining Bermore Shares. At the Closing, the Company shall (a) deliver to Bermore a stock certificate registered in Bermore's name for the Remaining Bermore Shares, which stock certificate shall not bear any restrictive legends, and (b) an acknowledgment that, in its belief, as of the Closing Date, Bermore is eligible to sell the Remaining Bermore Shares pursuant to paragraph (k) of Rule 144 of the Securities Act, subject to the expiration of the lockup period provided for in the Underwriting Agreement. 2.5 Termination of Original GFI Agreement. Artal, Flowers, Bermore, and the Company covenant and agree that the Original GFI Agreement will terminate effective upon the Closing without any further action by the parties thereto, except that provisions contained in Annex A thereof which by their terms are applicable after the consummation of any offering made pursuant thereto (including, without limitation, provisions relating to indemnification and contribution), shall continue to remain in full force and effect as provided therein in respect of the Bermore IPO Shares. 2.6 Resignation of Board Representative. Bermore covenants to cause to be delivered at Closing the resignation of its representative to the Company's Board of Directors, such resignation to be effective immediately upon Closing. 8 8 2.7 Artal Registration Rights. From the date of the New Stockholders' Agreement until the Release Date, the Company, Artal and Flowers covenant and agree (a) not to make any changes or amendments to or with respect to, or effect a waiver or termination of Artal's rights or benefits under or with respect to, Annex A of the New Stockholders' Agreement, without having received Bermore's prior written approval of such change, amendment, waiver or termination, and (b) to provide Bermore with executed copies of the New Stockholders' Agreement and all changes, amendments, waivers and terminations relating thereto; provided, however, that such prior written approval shall not be (a) unreasonably withheld or delayed by Bermore and (b) required if any such change, amendment, waiver or termination does not materially and adversely affect Artal's rights, benefits or obligations thereunder. 2.8 Reports Regarding Monthly Transfers. During the Restricted Period, Bermore shall deliver in writing by facsimile to Artal, five business days after the last day of each month, a list of all Monthly Transfers during such month by Bermore pursuant to Section 4.2(e) and the prices per share paid to Bermore in respect of such Monthly Transfers. If no Monthly Transfers are made by Bermore during any such month, Bermore will not be obligated to deliver any such list to Artal. 2.9 Restrictions on Other Agreements. Bermore shall not grant any proxy or enter into or agree to be bound by any voting trust or voting agreement with respect to the Bermore Shares or enter into any stockholder agreements or arrangements of any kind with any Person with respect to any Bermore Shares on terms inconsistent with the provisions of this Agreement (whether or not such agreements are with Persons that are parties to this Agreement), including but not limited to, agreements or arrangements with respect to the acquisition or disposition of Bermore Shares in a manner which is inconsistent with this Agreement. 2.10 IPO. (a) The procedures, further agreements, rights and obligations of the parties hereto regarding the sale of the Bermore IPO Shares under the S-1 Registration Statement (including any procedures, further agreements, rights and obligations applicable after the Closing) shall be governed by the procedures in Annex A of the Original GFI Agreement applicable to incidental registrations pursuant to Section 1.2 of such Annex A, except that, notwithstanding anything to the contrary contained therein or in the Stockholders' Agreement dated as of January 26, 1996 among the Company, Artal and Flowers, Artal hereby agrees to use its reasonable best efforts to have included in the IPO 4,519,090 Warrant Shares and, (i) if less than 4,519,090 Warrant Shares are included in the IPO or (ii) the aggregate number of shares of Common Stock requested to be sold in the IPO shall be cut back by the Underwriters, Artal shall, in each case, reduce the number of Artal Shares to be sold in the IPO to the extent (and only to the extent) necessary to enable Bermore to sell 4,519,090 Warrant Shares in the IPO. 9 9 (b) If the Underwriters exercise any overallotment option in accordance with the terms of the Underwriting Agreement, the number of Artal Shares and Bermore Shares that Artal and Bermore, respectively, will be required to sell in order to accomodate any such exercise shall be directly proportional to the number of Artal IPO Shares and Bermore IPO Shares, respectively. 2.11 Compliance with Securities Laws. In connection with the transactions contemplated by this Agreement, the parties hereto agree to cooperate with one another in complying with the applicable provisions of the Securities Act and the Exchange Act, and all other applicable federal and state securities laws, and each of them agrees to furnish the other, or its counsel, with such information and to take such actions as may be reasonably requested in respect of such compliance. 2.12 Consents and Approvals. The parties agree to use their respective best efforts to obtain the waiver, consent and approval of all other persons whose waiver, consent or approval is required in order to consummate the transactions contemplated by this Agreement. 2.13 Artal Investor Joinders. Prior to making any Excluded Artal Transfer at any time prior to the termination of this Agreement, Artal shall obtain an Investor Joinder from such transferee, and such transferee, by execution thereof, (i) shall agree to become and automatically be deemed to be subject to, and have the benefit of, all of the rights and obligations contained in this Agreement applicable to Artal and (ii) shall have made on the date thereof all representations and warranties made on the date hereof by Artal (modified, if necessary, to reflect the nature of such Person as a corporation, partnership, other entity or natural person). Promptly thereafter, Artal shall cause originally executed copies of such Investor Joinder to be delivered to Bermore, Flowers and the Company and shall notify Bermore, Flowers and the Company of the number and type of Artal Shares Transferred. 2.14 FIRPTA Certificates. At the Closing, the Company shall deliver to Bermore a certificate substantially in the form of Annex C-1, and as promptly as practicable and in any event no more than 30 days thereafter the Company shall deliver to the Internal Revenue Service a certificate substantially in the form of Annex C-2. ARTICLE III REPRESENTATIONS AND WARRANTIES 3.1 Representations and Warranties of Artal, Flowers and the Company. Each of Artal, Flowers and the Company (solely as to itself) hereby represents and warrants to each of the other parties hereto as follows: 10 10 (a) It is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has the requisite power and authority to own, lease and operate its properties and assets and to conduct its business as now conducted by it. It has all requisite power and authority to enter into this Agreement and to perform its obligations hereunder. The execution and delivery by it of this Agreement and the performance by it of its obligations hereunder have been duly authorized by all necessary action. This Agreement has been duly executed and delivered by it and, assuming the due authorization, execution and delivery thereof by the other parties hereto, constitutes its valid and legally binding obligation, enforceable against it in accordance with its terms; and (b) The execution, delivery and performance of this Agreement by it will not, with or without the giving of notice or lapse of time, or both, (i) conflict with its certificate of incorporation or by-laws (or the corresponding documents of any of its Subsidiaries) or (ii) result in any breach of any terms or provisions of, or constitute a default under, or conflict with any material contract, agreement or instrument to which it or any of its Subsidiaries is a party or by which it or any of its Subsidiaries is bound, except for such breaches, defaults or conflicts (A) which shall have been cured or waived prior to the Closing or (B) which, in the aggregate, would not reasonably be expected to have a material adverse effect on the financial position, results of operations, assets, liabilities, properties or business of it and its Subsidiaries, taken as a whole, or (iii) violate any material provision of law, statute, rule or regulation to which it is subject or any material order, judgment or decree applicable to it. (c) There is no suit, action, proceeding, claim or investigation pending or, to its knowledge, threatened against or affecting it which, if pursued and/or resulting in a judgment, would have a material adverse affect on its right to consummate the transactions contemplated hereby. 3.2 Representations and Warranties of Bermore. Bermore hereby represents and warrants to each of the other parties hereto as follows: (a) It is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has the requisite power and authority to own, lease and operate its properties and assets and to conduct its business as now conducted by it. It has all requisite power and authority to enter into this Agreement and to perform its obligations hereunder. The execution and delivery by it of this Agreement and the performance by it of its obligations hereunder have been duly authorized by all necessary action. This Agreement has been duly executed and delivered by it and, assuming the due authorization, execution and delivery thereof by the other 11 11 parties hereto, constitutes its valid and legally binding obligation, enforceable against it in accordance with its terms; (b) The execution, delivery and performance of this Agreement by it will not, with or without the giving of notice or lapse of time, or both, (i) conflict with its certificate of incorporation or by-laws (or the corresponding documents of any of its Subsidiaries) or (ii) result in any breach of any terms or provisions of, or constitute a default under, or conflict with any material contract, agreement or instrument to which it or any of its Subsidiaries is a party or by which it or any of its Subsidiaries is bound, except for such breaches, defaults or conflicts (A) which shall have been cured or waived prior to the Closing and (B) which, in the aggregate, would not reasonably be expected to have a material adverse effect on the financial position, results of operations, assets, liabilities, properties or business of it and its Subsidiaries, taken as a whole, or (iii) violate any material provision of law, statute, rule or regulation to which it is subject or any material order, judgment or decree applicable to it; and (c) There is no suit, action, proceeding, claim or investigation pending or, to its knowledge, threatened against or affecting it which, if pursued and/or resulting in a judgment, would have a material adverse affect on its right to consummate the transactions contemplated hereby. (d) Upon exercise of the GFI Warrant in the manner contemplated by Section 2.3, Bermore will own the Bermore IPO Shares and the Bermore Control Shares free and clear of any liens, claims or encumbrances of any nature. Except for the rights under the Original GFI Agreement, or as contemplated by this Agreement, Bermore has not granted any option or right, and is not a party to any other agreement which requires, or which upon the passage of time, the payment of money or the occurrence of any other event, may require, Bermore to transfer any of the Bermore Shares to any other Person other than an Affiliate of Bermore. When Flowers pays for and acquires the Bermore Control Shares as contemplated by this Agreement, Flowers will receive them free and clear of any liens, claims, or encumbrances of other persons, other than liens, claims or encumbrances resulting from the acts of Flowers. When the Bermore IPO Shares are delivered in accordance with the instructions of the Underwriters' and paid for by the Underwriters as contemplated by this Agreement and the Underwriting Agreement, such shares will be delivered free and clear of any liens, claims, or encumbrances of other persons, other than liens, claims or encumbrances resulting from the acts of the Underwriters. ARTICLE IV TRANSFER RESTRICTIONS ON REMAINING BERMORE SHARES 4.1 Transfer Restriction. During the Restricted Period, Bermore agrees, without the prior written consent of Artal, 12 12 except in accordance with Section 4.2 or pursuant to the exercise of any overallotment options by the Underwriters in respect of the IPO, not to market, attempt to arrange for or consummate the Transfer of any Bermore Shares (or any securities convertible into or exchangeable for Bermore Shares). Prior to making any permitted (whether as result of the exceptions set forth in Section 4.2 or otherwise) Transfer of Bermore Shares at any time prior to the termination of this Agreement (other than a Transfer pursuant to Section 4.2(b) or (e)), Bermore shall obtain an Investor Joinder from such transferee, and such transferee, by execution thereof, (i) shall agree to become and automatically be deemed to be subject to, and have the benefit of, all of the rights and obligations contained in this Agreement applicable to Bermore, (ii) shall have made on the date thereof all representations and warranties made on the date hereof by Bermore (modified, if necessary, to reflect the nature of such Person as a corporation, partnership, other entity or natural person), (iii) shall have appointed Michael Uytengsu or such one Person as Bermore and all of its permitted transferees (other than Persons to whom Bermore Transfers Bermore Shares pursuant to Section 4.2(b) or (e)) shall agree upon as its true and lawful attorney-in-fact for purposes of exercising its rights and obligations contained in this Agreement and (iv) shall have appointed Bermore, Ltd. or such two Persons (which may include Bermore) as Bermore, Ltd. (if it remains a party to the Agreement) and all of its permitted transferees (other than Persons to whom Bermore Transfers Bermore Shares pursuant to Section 4.2(b) or (e)) shall agree upon as true and lawful custodians (each a "Custodian" which may act independently of the other in respect of Bermore Shares which have been Transfered to it) for all Bermore Shares owned by such transferee and subject to this Agreement and, simultaneously upon execution of such Investor Joinder, shall Transfer all such Bermore Shares to the Custodian listed on the Investor Joinder. Promptly thereafter, Bermore shall cause originally executed copies of such Investor Joinder to be delivered to Artal, Flowers and the Company and shall notify Artal, Flowers and the Company of the number and type of Bermore Shares Transferred. 4.2 Exceptions. The restriction on Transfer contained in Section 4.1 above shall be inapplicable with respect to: (a) any Transfers of Bermore Shares among Affiliates of Bermore or members of Bermore's Family Group; (b) any Transfer of Bermore Shares by Bermore pursuant to the terms of Section 4.3, 4.4 or 4.5 or pursuant to a registered, underwritten offering under Article V; (c) any Transfers of Bermore Shares (A) to the extent of the grant of a security interest in such Bermore Shares pursuant to a pledge or similar agreement to secure debt of the transferor (incurred in good faith and not for purposes of avoiding the transfer restrictions contained in this Agreement) owing to a bank or other bona fide financial institution; 13 13 provided that such security interest has not yet been exercised by the pledgee, and (B) upon the exercise by such bank or other bona fide financial institution of its rights under such pledge or similar agreement to acquire beneficial or other ownership of the Bermore Shares pledged thereunder; (d) any Transfers of Bermore Shares by a member of Bermore's Family Group upon his or her death to his or her estate, provided that the beneficiaries of the estate are Persons specified in clause (a) of this Section 4.2; (e) subject to compliance with Section 1.4 of Annex A hereto, Transfers (in addition to Transfers pursuant to the other provisions of this Section 4.2) by Bermore which do not in the aggregate exceed 85,987 Bermore Shares in any one month (any such Transfer during any such month, a "Monthly Transfer"), it being understood that, to the extent Bermore does not sell an aggregate of 85,987 Bermore Shares in any such month (for any reason whatsoever), Bermore shall not in any event, as a result thereof, be entitled to increase the number of Bermore Shares which it is entitled to sell in any other month pursuant to this Section 4.2(e); and provided, that in order to facilitate compliance with federal securities laws and the provisions of this Agreement, the aggregate number of permitted transferees under Sections 4.2(a), (c) and (d) shall not exceed 45 Persons at any time during the term of this Agreement without the consent of Artal, which consent will not be unreasonably withheld or delayed. 4.3 Tag Along. (a) At any time during the Restricted Period, at least 15 days prior to making any Transfer of any Artal Shares to either the Company or Flowers (or, for all purposes of this Section 4.3 and Section 4.4, any of their respective Affiliates other than Artal), Artal shall deliver a written notice (the "Tag/Drag Notice") to Bermore, specifying in reasonable detail the type and number of Artal Shares proposed to be transferred, the identity of the prospective transferee(s), the terms and conditions of the Transfer (including without limitation, the price (or the formula for determining the price) to be paid for each Artal Share and, in the event that the consideration to be received by Artal in connection with such transaction includes non-cash consideration, Artal's good faith reasonable estimate of the cash value of such non-cash consideration), Artal's good faith estimate after due inquiry of the maximum number of shares of Common Stock that the proposed transferee would be willing to purchase in connection with such transfer, and all information reasonably required to make the calculations set forth in this Section 4.3(a). Bermore may elect to participate in the proposed Transfer by delivering written notice to Artal within 10 days after delivery of the Tag/Drag Notice. If Bermore has elected to participate in such Transfer pursuant to the terms hereof, Bermore shall be entitled to sell in the proposed Transfer, at the same price (treating debt of 14 14 Artal actually assumed by the Company or Flowers, as the case may be, as a cash payment to Artal, equal to the amount assumed) and on the same terms and conditions (provided that such conditions are capable of being fulfilled by Bermore) as Artal, up to a number of Bermore Shares equal to the product of (i) the number of Artal Shares which Artal proposes to sell in the proposed Transfer and (ii) a fraction, (A) the numerator of which is the number of Remaining Bermore Shares and (B) the denominator of which is the number of Remaining Artal Shares; provided that the number of Bermore Shares which Bermore is permitted to sell pursuant to this Section 4.3(a) shall not in any event include any shares of Common Stock other than Remaining Bermore Shares. It is expressly understood by the parties hereto that if Artal is selling Common Stock in such Transfer, Bermore may only participate in such Transfer by selling Common Stock and not any Common Stock Equivalents and that, to the extent that Bermore wishes to sell shares of Common Stock underlying any such Common Stock Equivalents, it must exercise, convert or exchange such Common Stock Equivalents in order to Transfer such underlying shares of Common Stock. If Bermore elects to participate in such Transfer, it shall be obligated to pay its pro rata portion of the transaction costs associated therewith. If the aggregate amount of Bermore Shares which Bermore elects and is permitted under the foregoing provisions to sell in the proposed Transfer is, together with the aggregate amount of Artal Shares which Artal proposes to so sell, more than the total number of shares of Common Stock that the Company or Flowers, as the case may be, wishes to purchase, then each of Artal and Bermore shall be entitled to sell to the Company or Flowers, as the case may be, that number of shares of Common Stock equal to the number of shares of Common Stock to be so purchased by the Company or Flowers, as the case may be, from Artal and Bermore, multiplied by a fraction, the numerator of which is the number of such shares of Common Stock that Artal or Bermore, as the case may be, elects and is permitted under the foregoing provisions to sell and the denominator of which is the aggregate number of shares of Common Stock Artal and Bermore elect to sell and are permitted to sell under the foregoing provisions. If Bermore has not delivered written notice to Artal that Bermore elects to participate in a proposed Transfer within the 10-day period provided above for the delivering of such notice, then Artal shall have the right, for a period of 45 days after the expiration of such 10-day period, to consummate such proposed Transfer to the Company or Flowers, as the case may be, at the same price and on the same terms and conditions stated in the related Tag/Drag Notice. If, at the end of such 45-day period, Artal has not consummated such proposed Transfer to the Company or Flowers, as the case may be, the terms of this Section 3.3 shall again be in effect with respect to such proposed Transfer to the Company or Flowers, as the case may be. (b) For purposes of Section 4.3(a) and Section 4.5(a), if Artal has Transferred all or part of its Artal Shares to one or more of its Subsidiaries or other entities controlled by it (a 15 15 "Securities Holding Company"), a sale or other disposition by Artal (by merger or otherwise) of an equity or beneficial interest in a Securities Holding Company to, for purposes of Section 4.3(a), the Company or Flowers, as the case may be, or, for purposes of Section 4.5(a), any other Person, shall be treated as follows: (i) if such sale or other disposition is of 50% or more of the equity or beneficial interest in such Securities Holding Company, then such sale or other disposition shall be deemed to be a Transfer of all such Artal Shares directly or indirectly owned or controlled by such Securities Holding Company, and (ii) if such sale or other disposition is of less than 50% of the equity or beneficial interest in such Securities Holding Company, then such sale or other disposition shall be deemed to be a Transfer of a percentage of the number of Artal Shares directly or indirectly owned or controlled by such Securities Holding Company equal to the percentage of the equity or beneficial interest in such Securities Holding Company sold or disposed of in such transaction. In either such event, if the Securities Holding Company owns assets other than the Artal Shares, the consideration paid to Artal by the Company or Flowers, as the case may be, or such other Person, for the Transfer and allocable to the Artal Shares, in the absence of agreement of Artal and Bermore, shall be determined by an investment banking firm of national reputation selected by mutual agreement of the parties hereto, provided, that such investment banking firm shall not have a material direct or indirect financial interest in or other relationship with the Company or any of its Subsidiaries or Affiliates. (c) The exercise or nonexercise of the rights of Bermore in this Section 4.3 to participate in one or more Transfers by Artal to the Company or Flowers, as the case may be, shall not adversely affect Bermore's rights to participate in subsequent Transfers by Artal to the Company or Flowers. 4.4 Drag-Along. (a) In the case that Artal proposes to make a Transfer of Artal Shares to the Company or Flowers, as the case may be, at any time after Closing and prior to the Release Date that would trigger Bermore's tag along rights pursuant to Section 4.3, Artal may elect, by so specifying in the Tag/Drag Notice, to require Bermore to, and Bermore will, participate in such transaction on the same terms and conditions as Artal with respect to a number of Bermore Shares determined as set forth below. Bermore shall be required to sell in the proposed Transfer, at the same price (treating debt of Artal actually assumed by the proposed transferee as a cash payment to Artal, equal to the amount assumed) and on the same terms and conditions as Artal (provided that such conditions are capable of being fulfilled by Bermore), a number of Bermore Shares (such number being hereinafter referred to as the "Drag Along Number") of each type being Transferred by Artal equal to the lesser of (i) the product of (A) the number of Artal Shares which Artal proposes to sell in the proposed Transfer and (B) a fraction, (x) the numerator of which is the number of Remaining Bermore Shares and 16 16 (y) the denominator of which is the number of Remaining Artal Shares, (ii) the number of such Bermore Shares specified by Artal in the relevant Tag/Drag Notice and (iii) the number of Remaining Bermore Shares owned by Bermore at the time of delivery of such Tag/Drag Notice; provided that the number of Bermore Shares which Bermore is required to sell pursuant to this Section 4.4(a) shall not in any event include any shares of Common Stock other than Remaining Bermore Shares. It is expressly understood by the parties hereto that if Artal proposes to Transfer Common Stock and so elects, Bermore must Transfer a number of shares of Common Stock equal to the Drag Along Number by selling Common Stock (and not Common Stock Equivalents) and, if necessary, it must exercise, convert or exchange such Common Stock Equivalents in order to Transfer such underlying shares of Common Stock. If Bermore is required to participate in such Transfer, Artal shall be obligated to pay all the transaction costs associated therewith. (b) In connection with any proposed transaction described in Section 4.4(a) above, Bermore agrees (i) to consent to and raise no objections (other than with respect to its rights under this Section 4.4) to, and to take all other actions (including, without limitation, voting, or entering into written consents with respect to, all of its Bermore Shares in favor of such transaction) reasonably necessary or desirable to cause, the consummation of such transaction and (ii) to sell, Transfer and deliver its Bermore Shares as required by the terms of such transaction; provided, however, that, notwithstanding anything to the contrary contained herein, Bermore will not be required to register any Bermore Shares under the Securities Act in order to comply with its obligations under this Section 4.4; and provided further, however, that, if Bermore has, prior to its receipt of a Tag/Drag Notice, entered into a binding agreement to Transfer Bermore Shares (so long as such agreement does not otherwise violate this Agreement), Bermore shall not be prohibited from consummating such Transfer, notwithstanding anything to the contrary contained in this Section 4.4. (c) If the Drag Along Number is less than the number of Bermore Shares Bermore may sell in the proposed Transfer pursuant to its rights under Section 4.3, then, notwithstanding the exercise by Artal of its rights under this Section 4.4, Bermore may elect to sell such additional Bermore Shares pursuant to its rights under Section 4.3. 4.5 Mandatory Sale Events (a) If, during any of the three successive 12-month periods commencing on the Lockup Expiration Date, Artal proposes to Transfer, in the aggregate (other than Excluded Artal Transfers, Transfers pursuant to Section 4.3 or 4.4 or Transfers pursuant to registered, underwritten offerings under Article V), a number of Artal Shares that is greater than the Artal Basket, then Bermore shall mandatorily participate in any additional Transfers in excess of the Artal Basket by Artal (other than Excluded Artal Transfers, 17 17 Transfers pursuant to Section 4.3 or 4.4 or Transfers pursuant to registered, underwritten offerings under Article V) which are consummated during the remainder of such 12-month period, on the same terms and conditions as Artal with respect to a number of Bermore Shares determined as set forth below (each such Transfer a "Mandatory Sale Event", and the aggregate number of Artal Shares and Bermore Shares proposed to be Transferred pursuant to such Mandatory Sale Event, the "Mandatory Sale Shares"). As promptly as practicable after Artal has (i) with respect to a negotiated Transfer to a third party, agreed to Transfer the applicable Mandatory Sale Shares to such third party, or (ii) with respect to an open market sale, decided it intends to Transfer the applicable Mandatory Sale Shares, but in each case in no event less than two business days prior to the consummation of such Mandatory Sale Event, Artal shall deliver a written notice to Bermore via facsimile, specifying in reasonable detail the type and number of Mandatory Sale Shares, the identity of the prospective transferee(s) (or, if applicable, that the Transfer will be an open market transaction), the terms and conditions of the Transfer (including without limitation, the price (or the method of determining the price) to be paid for each Mandatory Sale Share and, in the event that the consideration to be received by Artal in connection with such Mandatory Sale Event includes non-cash consideration, Artal's good faith reasonable estimate of the cash value of such non-cash consideration) and all information reasonably required to make the calculations set forth in this Section 4.5(a). Bermore shall be required to sell in connection with any Mandatory Sale Event, at the same price (treating debt of Artal actually assumed by the proposed transferee as a cash payment to Artal, equal to the amount assumed) and on the same terms and conditions as Artal (provided that such conditions are capable of being fulfilled by Bermore), the lesser of (i) the number of Remaining Bermore Shares owned by Bermore at the time of such Mandatory Sale Event and (ii) a number of Bermore Shares equal to the product of (A) the number of Mandatory Sale Shares and (B) a fraction, (x) the numerator of which is number of Remaining Bermore Shares and (y) the denominator of which is the sum of the number of Remaining Bermore Shares and the number of Remaining Artal Shares; provided that the number of Bermore Shares which Bermore is required to sell pursuant to this Section 4.5(a) shall not in any event include any shares of Common Stock other than Remaining Bermore Shares. It is expressly understood by the parties hereto that if Bermore is required to Transfer Bermore Shares pursuant to this Section 4.5, Bermore must Transfer the requisite number of shares of Common Stock (and not Common Stock Equivalents) and, if necessary, it must exercise, convert or exchange such Common Stock Equivalents in order to Transfer such underlying shares of Common Stock. If Bermore is required to participate in such Mandatory Sale Event, it shall be obligated to pay its pro rata portion of the transaction costs associated therewith. (b) In connection with any Mandatory Sale Event, Bermore agrees (i) to consent to and raise no objections (other 18 18 than with respect to its rights under this Section 4.5) to, and to take all other actions (including, without limitation, voting, or entering into written consents with respect to, all of its Bermore Shares in favor of such transaction) reasonably necessary or desirable to cause, the consummation of such transaction and (ii) to sell, Transfer and deliver the Mandatory Sale Shares which are Remaining Bermore Shares as required by the terms of such Mandatory Sale Event, including, without limitation, delivery of certificates for such Remaining Bermore Shares (or arrangement of book-entry transfers in respect of such Remaining Bermore Shares) in order to permit timely settlement in accordance with the terms of such Mandatory Sale Event; provided, however, that, notwithstanding anything to the contrary contained herein, Bermore will not be required to register any Bermore Shares under the Securities Act in order to comply with its obligations under this Section 4.5; and provided further, however, that, if Bermore has, prior to its receipt of a Mandatory Sale Notice, entered into a binding agreement to Transfer Bermore Shares (so long as such agreement does not otherwise violate this Agreement), Bermore shall not be prohibited from consummating such Transfer, notwithstanding anything to the contrary contained in this Section 4.5. 4.6 Prohibited Transfers. Any Transfer of Bermore Shares or Artal Shares made in violation of this Agreement (including, without limitation, a Transfer made without obtaining a necessary Investor Joinder) shall be null and void. The Company shall not permit such Transfer to be recorded on the Company's books and records and shall not otherwise cooperate in consummating such Transfer. ARTICLE V REGISTRATION RIGHTS The procedures and further agreements of the parties hereto set forth in Annex A to this Agreement are incorporated herein by reference. ARTICLE VI CONDITIONS The obligations of each party hereto at Closing are subject to satisfaction of the following conditions by each of the other parties hereto (any or all of which may be waived with respect to any party by the other parties hereto): 6.1 Representations True at Closing. The representations and warranties of such party contained in this Agreement will be true and correct in all material respects at the Closing Date with the same effect as though made on that date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and 19 19 correct in all material respects on and as of such earlier date), and such party will have delivered to each of the other parties hereto a certificate dated that date and signed by the President, a Vice President or such other authorized agent or attorney-in-fact of such party to that effect. 6.2 Covenants. Such party will have fulfilled in all material respects all its obligations under this Agreement required to have been fulfilled prior to or at the Closing, and will have delivered to each of the other parties hereto a certificate dated that date and signed by the President, a Vice President or such other authorized agent or attorney- in-factof such party to that effect. 6.3 No Injunction, etc. No order will have been entered by any court or governmental or regulatory authority and be in force which invalidates this Agreement or restrains the completion of the transactions which are the subject of this Agreement. 6.4 Consents. All consents or waivers necessary for the consummation of the transactions contemplated hereby will have been received on or prior to the Closing Date. 6.5 Effectiveness of S-1 Registration Statement. The S-1 Registration Statement shall have been declared effective by the SEC, and no stop order suspending effectiveness shall have been issued, and no action, suit, proceeding or investigation by the SEC to suspend the effectiveness thereof shall have been initiated and be continuing. The Artal IPO Shares and the Bermore IPO Shares shall have been registered for issuance under all applicable Blue Sky laws or shall be exempt from such registration, and no stop order shall have been issued with respect to the issuance or sale of such securities by any Blue Sky authority. 6.6 Consummation of IPO. The consummation of the IPO shall have occurred contemporaneously with the Closing. ARTICLE VII MISCELLANEOUS 7.1 Time and Place of Closing. If the IPO is consummated, the Closing shall be held at the offices of Cravath, Swaine & Moore, 825 Eighth Avenue, New York, New York 10019, unless another place or date is agreed to in writing by the parties hereto. 7.2 Transactions at Closing. At the Closing, each of the following transactions shall occur: 20 20 (a) The transactions contemplated by Sections 2.1, 2.2, 2.3, 2.4, 2.5 and 2.6, in each case in accordance with such section. (b) The delivery by each of the parties hereto of the certificates contemplated by Sections 6.1 and 6.2, in each case in accordance with such sections. 7.3 Survival of Representations and Warranties. All representations, warranties, agreements, covenants and obligations made or undertaken by each party hereto in this Agreement or in any document or instrument executed and delivered pursuant hereto have been relied upon by the other parties hereto, shall survive the Closing hereunder, and shall not merge in the performance of any obligation by any party hereto. 7.4 Termination. (a) This Agreement may be terminated or abandoned prior to Closing only (i) by the mutual consent of the Company, Artal, Flowers and Bermore, notwithstanding prior approval by any or all of such parties, and (ii) will terminate automatically without any further action by the parties hereto (A) if the Underwriting Agreement has not been (x) executed by the parties thereto and (y) prior to such execution, consented to by Flowers in writing, in each case by 11:59 p.m. on the date hereof, or (B) simultaneously upon the termination or abandonment, if any, of the Underwriting Agreement. In the event of a termination of this Agreement prior to Closing, (i) each party shall pay the costs and expenses incurred by it in connection herewith, (ii) no party (or any of its officers, directors, employees agents or representatives) shall be liable to any other party for any costs, expenses, damage or loss of anticipated profits hereunder, (iii) each party shall retain any and all rights attendant to any breach of any covenant, representation or warranty made hereunder and (iv) the Original GFI Agreement shall remain in full force and effect. (b) Should Closing occur, this Agreement shall not terminate, shall remain in full force and effect and shall be binding on any party hereto until the earlier of (i) the Release Date or (ii) the date on which Bermore no longer owns any Remaining Bermore Shares (except that, notwithstanding any such termination, provisions contained in Annex A hereof which by their terms are applicable after the consummation of any offering made pursuant thereto (including, without limitation, provisions relating to indemnification and contribution), shall continue to remain in full force and effect as provided therein in respect of any Remaining Bermore Shares). 7.5 Remedies. (a) Each party hereto shall have all rights and remedies reserved for such party pursuant to this Agreement and all of the rights which such parties have under any law or equity. Any Person having any rights under any provision of this Agreement will be entitled to enforce such rights specifically, to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law or equity. 21 21 (b) The parties hereto agree that if any parties seek to resolve any dispute arising under this Agreement pursuant to a legal proceeding, the "prevailing" parties to such proceeding shall be entitled to receive reasonable fees and expenses (including reasonable attorneys' fees and expenses) incurred in connection with such proceedings. For purposes of this Section 7.5(b), a party shall be deemed to be a "prevailing" party only if it prevails on each element of its claim (including the amount and type of damages sought). If neither party is the prevailing party, the parties agree to request the court or other decision making body to make a separate determination as to the allocation of fees and expenses. (c) It is acknowledged that it will be impossible to measure in money the damages that would be suffered if the parties fail to comply with any of the obligations herein imposed on them and that in the event of any such failure, an aggrieved Person will be irreparably damaged and will not have an adequate remedy at law. Any such Person shall, therefore, be entitled to injunctive relief, including specific performance, to enforce such obligations, and if any action should be brought in equity to enforce any of the provisions of this Agreement, none of the parties hereto shall raise the defense that there is an adequate remedy at law. 7.6 Consent to Amendments. Except as expressly set forth herein, the provisions of this Agreement may be amended with the prior written consent of each of Artal and Bermore only, and each of Artal and Bermore can waive in writing any of its respective rights hereunder without any action by any other party hereto except that (i) no such amendment or waiver in respect of the Control Transaction or Section 2.2 hereof may be effected without the prior written consent of Flowers and (ii) no such amendment or waiver which materially and adversely affects the Company's obligations in respect of the registration rights contained in Annex A hereto may be effected without the prior written consent of the Company. 7.7 Antidilution. The parties hereto agree that all references herein to the GFI Warrant, amounts of shares of Common Stock and the Warrant Exercise Price Per Share give effect to a 1-for-10 reverse stock split of the Common Stock consummated by the Company prior to the date hereof and assume consummation of a 57.325-for-1 stock split of the Common Stock to be consummated by the Company immediately prior to Closing. An appropriate and proportionate adjustment shall be made to all references to amounts of shares of Common Stock referenced herein for any Recapitalization consummated by the Company after the date hereof. 7.8 Successors and Assigns. Except as otherwise expressly provided herein, all provisions contained in this Agreement by or on behalf of any of the parties hereto will bind and inure to the benefit of the respective successors and 22 22 permitted transferees of the parties hereto whether so expressed or not. This Agreement is not intended to create any third party beneficiaries. 7.9 Severability. Whenever possible, each provision of this Agreement will be interpreted in such a manner as to be effective and valid under applicable law. The parties agree that (i) the provisions of this Agreement shall be severable in the event that any of the provisions hereof are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, (ii) such invalid, void or otherwise unenforceable provisions shall be automatically replaced by other provisions which are as similar as possible in terms to such invalid, void or otherwise unenforceable provisions but are valid and enforceable and (iii) the remaining provisions shall remain enforceable to the extent permitted by law. 7.10 Counterparts. This Agreement may be executed in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same Agreement. It shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart. 7.11 Notices. All notices, demands and other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing or sent by facsimile and shall be deemed to have been given (i) when personally delivered or sent by facsimile (with proof of receipt at the number to which notices are required to be sent), (ii) one business day after being sent by overnight courier (receipt confirmation requested) or (iii) five business days after being mailed by certified or registered mail (return receipt requested and postage prepaid) to the recipient. Such notices, demands and other communications will be sent to each party hereto (and such party's permitted transferees or assigns, if any) at the address or addresses indicated on the signature pages hereto, or to such one other address or to the attention of such one other person as the recipient party (together with its permitted transferees or assigns, if any) has specified by prior written notice under this Section 7.11 to the sending party. 7.12 Governing Law. In all respects, including all matters of construction, validity and performance, this Agreement and the obligations arising hereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of New York applicable to contracts made and performed in such state, without regard to the principles thereof regarding conflict of laws, except for matters directly within the purview of the General Corporation Law of the State of Delaware (the "DGCL") which shall be governed by the DGCL. 7.13 Further Assurances. Each party hereto shall do and perform or cause to be done and performed all such further 23 23 acts and things and shall execute and deliver all such other agreements, certificates, instruments, and documents as any other party hereto reasonably may request in order to carry out the provisions of this Agreement and the consummation of the transactions contemplated hereby. 7.14 Jurisdiction; Venue; Process. (a) The parties to this Agreement agree that jurisdiction and venue in any action brought by any party hereto pursuant to this Agreement shall properly lie and shall be brought in any federal or state court located in the State of New York. By execution and delivery of this Agreement, each party hereto irrevocably submits to the jurisdiction of such courts for itself or himself and in respect of its or his property with respect to such action. The parties hereto irrevocably agree that venue would be proper in such court, and hereby irrevocably waive any objection that such court is an improper or inconvenient forum for the resolution of such action. (b) Artal hereby irrevocably and unconditionally designates and directs Mr. David Van Zandt, with offices on the date hereof at Northwestern University School of Law, 357 East Chicago Avenue, Chicago, Illinois 60611, as its agent to receive service of any and all process and documents on its behalf in any legal action or proceeding related to this Agreement and agrees that service upon such agent shall constitute valid and effective service upon Artal and that failure of such agent to give any notice of such service to Artal shall not affect or impair in any way the validity of such service or of any judgment rendered in any action or proceeding based thereon. 7.15 Brokers. Each party hereto agrees to indemnify and hold harmless each of the other parties hereto from and against any fee, claim, loss or expense arising out of any claim by any investment banker, broker or finder employed or alleged to have been employed by it. 7.16 Waiver. Any failure on the part of any party hereto to comply with any of its obligations, agreements or conditions hereunder may be waived by any other party to whom such compliance is owed. No waiver of any provision of this Agreement shall be deemed, or shall constitute, a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver. 7.17 Expenses. All expenses incurred by the parties hereto in connection with or related to the authorization, preparation and execution of this Agreement and the closing of the transactions contemplated hereby, including, without limitation, all fees and expenses of brokers, agents, representatives and counsel and accountants employed by any such party, shall be borne solely and entirely by the party which has incurred the same. Notwithstanding the foregoing, (a) the payment of Artal's expenses shall governed by Section 14.7 of the 24 24 New Stockholders' Agreement and (b) except for the underwriting discounts in respect of the Bermore IPO Shares, Bermore's out-of-pocket expenses and the fees and disbursements of Bermore's counsel, the Company will bear all costs and expenses in connection with the registration of the Bermore IPO Shares, review and finalization of underwriting arrangements and all other aspects of the IPO in accordance with Annex A of the Original GFI Agreement. 7.18 Headings. The section and other headings in this Agreement are inserted solely as a matter of convenience and for reference, and are not a part of this Agreement. 7.19 Entire Agreement. This Agreement constitutes the entire agreement among the parties hereto and supersedes and cancels any prior agreements, representations, warranties, or communications, whether oral or written, among the parties hereto relating to the transactions contemplated hereby or the subject matter herein, except to the extent set forth in Section 2.5. 7.20 Pronouns. All pronouns used herein shall be deemed to refer to the masculine, feminine or neuter gender, as the context requires. 7.21 Annexes Incorporated. All Annexes attached hereto are incorporated herein by reference. 7.22 Time of Essence. Time is of the essence in this Agreement. 7.23 MUTUAL WAIVER OF JURY TRIAL. THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS RELATED HERETO. * * * * 25 25 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. Name: KEEBLER FOODS COMPANY Address for Notices: with copies to: Keebler Foods Company Winston & Strawn 677 Larch Avenue 35 West Wacker Drive Elmhurst, Illinois 60126 Chicago, Illinois 60601 Facsimile No.: 1-630 Facsimile No.: 1-312-558-5700 Attn: Chief Executive Officer Attn: Bruce Toth, Esq. KEEBLER FOODS COMPANY By: /s/ Thomas E. O'Neill ----------------------- Name: Thomas E. O'Neill Title: Vice President, Secretary & General Counsel 26 26 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. Name: BERMORE, LTD. Address for with copies Notices: to: Crawford House Michael Uytengsu 23 Church Street c/o G.F. Industries, Inc. P.O. Box HM 1436 999 Baker Way, Suite 200 Hamilton, Bermuda HM FX San Mateo, California 94404 Facsimile No: 1-441-295-4706 Facsimile No.: 1-650-312-9374 Attn: Director and: Appleby, Spurling & Kempe Cedar House 41 Cedar Avenue P.O. Box HM 1436 Facsimile No.: 1-441-292-8666 Attn: John Campbell, Esq. BERMORE, LTD. By: /s/ Michael R.B. Uytengsu ------------------------------- Name: Michael R. B. Uytengsu Title: Attorney-in-Fact 27 27 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. Name: ARTAL LUXEMBOURG S.A. Address for with copies Notices: to: Artal Luxembourg S.A. The Invus Group, Ltd. 39 Boulevard Royal 135 E. 57th Street Luxembourg City, Luxembourg New York, New York 10022 Facsimile No.: 352-22-42-66 Facsimile No.: 1-212-371-1829 Attn: Managing Director Attn: President and: Simpson Thacher & Bartlett 425 Lexington Avenue New York, New York 10017 Facsimile No.: 1-212-455-2502 Attn: Robert E. Spatt, Esq. ARTAL LUXEMBOURG S.A. By: /s/ Paul R. Komler --------------------------- Name: Paul R. Komler Title: Managing Director 28 28 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. Name: FLOWERS INDUSTRIES, INC. Address for with copies Notices: to: Flowers Industries, Inc. Jones, Day, Reavis & Pogue 1919 Flowers Circle 3500 One Peachtree Center Thomasville, Georgia 31757 303 Peachtree Street, N.E. Facsimile No.: 1-912-225-3808 Atlanta, GA 30308 Attn: Robert P. Crozer Facsimile No.: 1-404-581-8330 Attn: Robert W. Smith, Esq. FLOWERS INDUSTRIES, INC. By: /s/ G. Anthony Campbell ---------------------------------- Name: G. Anthony Campbell Title: Secretary & General Counsel 29 ANNEX A PROVISIONS REGARDING REGISTRATION RIGHTS This Annex A is part of and is incorporated into that certain Stock Purchase and Stockholder's Agreement (the "Agreement"), dated as of January 28, 1998, among the Company, Artal, Flowers and Bermore. Capitalized terms used in this Annex A and not otherwise defined shall have the meanings ascribed to them in the Agreement. Certain capitalized terms used herein are defined in Section 2.1 of this Annex A. It is understood that certain incidental registration rights have been granted to various management investors pursuant to certain management stockholder's agreements pursuant to the Original Stockholders' Agreement, including Annex A thereto, and certain demand and incidental registration rights have been granted to Artal pursuant to Annex A of the New Stockholders' Agreement and that, subject to restrictions contained in the New Stockholders' Agreement, additional registration rights may be extended in the future to holders of securities of the Company. 1.1 Incidental Registrations. If, at any time during (and solely during) the Restricted Period, (a) Artal has exercised a demand registration right pursuant to the New Stockholders' Agreement, including Annex A thereto (as the same may be amended, supplemented or otherwise modified from time to time in accordance with the Agreement) (an "Artal Demand Right") and has delivered a demand notice to the Company in connection therewith to cause the Company to register any Artal Shares under the Securities Act for an underwritten, public offering (or, in connection with a registered, underwritten offering of Artal Shares pursuant to an effective Shelf Registration Statement, has delivered a notice to the Company regarding its intention to effect such an offering), or (b) the Company proposes to engage in a registration of securities in which Artal will be entitled to exercise its incidental registration rights under Section 1.2(a) of Annex A of the New Stockholders' Agreement (as the same may be amended, supplemented or otherwise modified from time to time in accordance with the Agreement) (an "Artal Piggyback"), the Company will each such time give prompt written notice to each Custodian of Artal's (or the Company's, as the case may be) intention to do so and of Bermore's rights under this Section 1.1, at least (i) with respect to the exercise of an Artal Demand Right, 15 days prior to the anticipated date of the initial filing of the related registration statement (or, in the case of a registered, underwritten offering pursuant to an effective Shelf Registration Statement, 15 days prior to the formal commencement of such registered, underwritten offering of Artal Shares) or (ii) with respect to an Artal Piggyback, 30 days prior to the anticipated date of the initial filing of the related registration statement. Such notice shall state the number of shares requested to be included in such offering by Artal (or, if such number is not known by the Company at the time of delivery of such notice, the Company shall notify Bermore of such number promptly upon receipt thereof) and shall offer Bermore the opportunity to include in such registration statement 30 2 (or, in the case of an effective Shelf Registration Statement, include in such registered, underwritten offering) a number of Bermore Shares equal to the product of (i) the number of Artal Shares which Artal proposes to sell in the proposed registered, underwritten offering and (ii) a fraction, (A) the numerator of which is the number of Remaining Bermore Shares and (B) the denominator of which is the number of Remaining Artal Shares. Upon the written request of Bermore delivered to Artal and the Company within (i) with respect to the exercise an Artal Demand Right, 10 days after the receipt of the Company's notice (which request shall specify the number of Bermore Shares intended to be disposed of by Bermore) or (ii) with respect to an Artal Piggyback, 20 days after the receipt of the Company's notice (which request shall specify the number of Bermore Shares intended to be disposed of by Bermore), the Company shall (and Artal shall use its best efforts do cause the Company to do so), if applicable, use its best efforts to effect the registration under the Securities Act of all Artal Shares and Bermore Shares of the class then being registered which the Company has been so requested to register by Artal and Bermore, to permit the disposition of the Artal Shares and Bermore Shares so to be registered; provided that, (i) the investment banker or investment bankers and manager or managers that will manage the offering will be selected (i) with respect to an Artal Demand Right, by Artal or (ii) with respect to an Artal Piggyback, by the Company, and Bermore will not have the right to designate or select any underwriters in connection with such offering, (ii) if Bermore elects to participate in such registered, underwritten offering, it must sell the Bermore Shares to be included in such offering to the underwriters on the same terms and conditions as apply to Artal (except that indemnification obligations of Bermore shall be limited to those obligations set forth in Section 1.7(b)) and complete and execute all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements, and (iii) if, at any time after giving written notice of its intention to register any shares of Common Stock (or, with respect to an effective Shelf Registration Statement, of its intention to sell Artal Shares pursuant to a registered, underwritten offering) pursuant to this Section 1.1 and, prior to the effective date of the related registration statement (or, in the case of an effective Shelf Registration Statement, prior to the execution of an underwriting agreement in connection with the applicable offering of Artal Shares), Artal (in the case of the exercise of an Artal Demand Right) or the Company (in the case of the exercise of an Artal Piggyback), as the case may be, shall determine for any reason not to register (or, in the case of an effective Shelf Registration Statement, not to sell Artal Shares in a registered, underwritten offering) such shares of Common Stock, Artal or the Company, as the case may be, shall give written notice to Bermore and, thereupon, (A) Artal shall be relieved of its obligation to cause the Company to register (or, in the case of an effective Shelf Registration Statement, sell) any Bermore Shares in connection with such 31 3 registered, underwritten offering and (B) the Company shall be relieved of its obligation to register (or, in the case of an effective Shelf Registration Statement, sell) any Bermore Shares in connection with such registered, underwritten offering. A registration (or, in the case of an effective Shelf Registration Statement, a sale pursuant to a registered, underwritten offering) effected pursuant to this Section 1.1 is referred to herein as an "Incidental Registration." 1.2 Priority in Incidental Registrations. If the managing underwriter in connection with a registered, underwritten offering pursuant to Section 1.1 advises the Company that, in its opinion, the number of securities which the Company and any other persons entitled to include securities in such registration (or, in the case of an effective Shelf Registration Statement, the applicable registered, underwritten offering) propose to include therein exceeds the largest number of securities which can be sold without having an adverse effect on such offering, including the price at which such securities can be sold, the Company will include in such registration (or, in the case of an effective Shelf Registration Statement, the applicable registered, underwritten offering) up to such maximum number of securities (i) first, all the securities the Company initially proposes to sell for the account of (A) Artal, pursuant to the Company's contractual requirement to do so contained in Annex A of the New Stockholders' Agreement, and (B) Bermore, pursuant to the Company's contractual requirement to do so contained herein to register securities owned by Bermore, and (ii) second, to the extent that the number of securities referred to in clause (i) is less than the number of securities which the Company has been advised can be sold in such offering without having the adverse effect referred to above, all securities owned by any other holder of securities electing and entitled to register (or, in the case of a registered, underwritten offering under an effective Shelf Registration Statement, sell) such securities pursuant to any similar registration rights agreement; provided that if the number of securities to be included in such registration (or, in the case of an effective Shelf Registration Statement, the applicable registered, underwritten offering) by Artal and Bermore pursuant to clause (i) of this Section exceeds the number which the Company has been advised can be sold in such offering without having the adverse effect referred to above, the number of securities included in such registration by each of Artal and Bermore shall be limited to such extent and shall be allocated pro rata among Artal and Bermore on the basis of the relative number of securities requested (and, in the case of Bermore, entitled) to be included in such registration (or, in the case of an effective Shelf Registration Statement, the applicable registered, underwritten offering) by each of Artal and Bermore. 1.3 Rule 415. Notwithstanding anything to the contrary contained herein, if, during the Restricted Period, Artal proposes to cause the Company to register any Artal Shares under 32 4 Rule 415 of the Securities Act pursuant to a Registration Statement on Form S-3 (a "Shelf Registration Statement"), (i) Artal will each such time give prompt written notice to Bermore of its intention to do so and of Bermore's rights under this Section 1.3, at least 15 days prior to the anticipated date of the initial filing of such Shelf Registration Statement, (ii) Bermore will mandatorily elect to include all Bermore Shares for registration under such Shelf Registration Statement and (iii) the Company shall use its best efforts to effect the registration under the Securities Act of all Artal Shares and Bermore Shares of the class then being registered which the Company has been so requested to register by Artal and Bermore, to permit the disposition of the Artal Shares and Bermore Shares so to be registered. Except for registered, underwritten offerings in which Bermore elects to participate in accordance with Section 1.1, Bermore will not be required to, and will not, effect sales of Bermore Shares (including, without limitation, sales of Bermore Shares pursuant to Article IV of the Agreement) under such Shelf Registration Statement, and Bermore will not be entitled to exercise any Incidental Registration or other similar "piggyback" rights in respect of sales by Artal of Artal Shares under such Shelf Registration Statement, other than its Incidental Registration rights under Section 1.1 in connection with registered, underwritten offerings; provided, that it is understood by the parties hereto that nothing contained in this Section 1.3 or elsewhere in this Annex A shall limit Bermore's rights to Transfer Remaining Bermore Shares outside of such Shelf Registration Statement pursuant to Section 4.2, 4.3, 4.4 or 4.5 of the Agreement (subject to compliance by Bermore with Section 1.4). 1.4 Hold-Back Agreements. Bermore hereby agrees that, each time it is given the opportunity to sell Bermore Shares in an Incidental Registration pursuant to Section 1.1 (whether or not it elects to exercise its Incidental Registration rights and include any Bermore Shares for sale in the applicable registered, underwritten offering), if requested (pursuant to a timely written notice) by the managing Underwriter or Underwriters of such registered, underwritten offering, not to effect any sale or distribution of any of the issue being registered or a similar security of the Company or any securities convertible or exchangeable or exercisable for such securities (including, without limitation, any sales pursuant to Rule 144 or Section 4.2(e) of the Agreement and excluding Transfers pursuant to Section 4.2(a), (b) (but only to the extent Artal is permitted to engage in the underlying Transfer in connection with the selling restrictions contained in the applicable underwriting agreement, as the same may be amended, waived or otherwise modified), (c) or (d) of the Agreement), except as part of such underwritten offering, during the period (as requested by the managing Underwriter) beginning not more than 10 days prior to, and ending up to 180 days after, the closing date of each underwritten offering made pursuant to such Registration Statement (or such shorter period as the managing Underwriter or Underwriters may 33 5 agree), to the extent timely notified in writing by the Company or by the managing Underwriter or Underwriters; provided, however, that such period shall in any event commence and terminate on the same date as the selling restrictions applicable to Artal in connection with such registered, underwritten offering commence and terminate, after giving effect to any waiver, shortening or other modification of such period in respect of Artal, whether before or after the consummation of such underwritten offering; provided further, however, that, without limiting the exceptions granted to Bermore in this Section 1.4, Bermore shall be entitled to the benefit of the same exceptions granted to Artal by the managing Underwriter or Underwriters, whether or not included in the applicable Underwriting Agreement; and provided further, however, that the Company will notify Bermore as promptly as practicable if any such underwritten offering has been terminated, abandoned or indefinitely postponed, and, upon receipt of such notice from the Company, Bermore no longer will be subject to the Transfer restrictions contained in this Section 1.4 in respect of (and solely in respect of) the related underwritten offering. The Company shall, as promptly as practicable, advise Bermore of the expected closing date of any such underwritten offering and any subsequent changes with respect thereto. 1.5 Registration Procedures. In connection with the registration of any Bermore Shares pursuant to an Incidental Registration, the Company shall effect such registrations to permit the sale of such Bermore Shares in accordance with the intended method or methods of disposition thereof determined for both the Artal Shares and the Bermore Shares by Artal (in the case of an exercise of an Artal Demand Right) or the Company (in the case of the exercise of an Artal Piggyback), as the case may be (except that, in connection with a Shelf Registration Statement, the plan of distribution contained in the applicable Prospectus shall state that Bermore may, as contemplated by the last proviso to Section 1.3 and Article IV of the Agreement, Transfer Bermore Shares from time to time pursuant to Rule 144 or in other transactions exempt from or not subject to the registration requirements of the Securities Act), the Company shall as expeditiously as possible: (a) Prepare and file with the SEC a Registration Statement or Registration Statements on Form S-3 (or, if such form is not available for the sale of such Bermore Shares and the Artal Shares requested to be sold by Artal in such registered, underwritten offering, such other form as is available for such sale) thereof in accordance with the intended method of distribution thereof, and use its best efforts to cause each such Registration Statement to become effective and remain effective as provided herein; provided, however, that before filing any Registration Statement or Prospectus or any amendments or supplements thereto (not including documents that would be incorporated or deemed to be incorporated therein by reference), the Company shall afford Bermore and its counsel an opportunity 34 6 to review copies of all such documents proposed to be filed and give good faith consideration to any comments from Bermore or its counsel in respect of such documents. (b) Prepare and file with the SEC such amendments and post-effective amendments to each Registration Statement as may be necessary to keep such Registration Statement continuously effective for the effectiveness period; cause the related Prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act; and comply with the provisions of the Securities Act, the Exchange Act and the rules and regulations of the SEC promulgated thereunder applicable to it with respect to the disposition of all securities covered by such Registration Statement as so amended or in such Prospectus as so supplemented. (c) Notify Bermore promptly (but in any event within 5 business days), and confirm such notice in writing, (i) when a Registration Statement, Prospectus or prospectus supplement or post-effective amendment has been filed, and, with respect to a Registration Statement or any post-effective amendment, when the same has become effective (including in such notice a written statement that any holder may, upon request, obtain, without charge, one conformed copy of such Registration Statement or post-effective amendment including financial statements and schedules and all documents incorporated or deemed to be incorporated by reference and exhibits), (ii) of the issuance of any order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of any Prospectus or the initiation of any proceedings for that purpose, (iii) if at any time when a Prospectus is required by the Securities Act to be delivered in connection with sales of Bermore Shares the representations and warranties of the Company contained in any agreement (including any underwriting agreement) contemplated by Section 1.5(k) below cease to be true and correct in any material respect, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of a Registration Statement or any of the Bermore Shares for offer or sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose, (v) of the happening of any event that makes any statement made in such Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in such Registration Statement, Prospectus or documents so that, in the case of such Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under 35 7 which they were made, not misleading, and (vi) of the Company's reasonable determination that a post-effective amendment to a Registration Statement would be appropriate. (d) Use its best efforts (including, if necessary, by the filing of any amendments or supplements to the Registration Statement or the Prospectus) to prevent the issuance of any order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of a Prospectus or suspending the qualification (or exemption from qualification) of a Registration Statement or any of the Bermore Shares for sale in any jurisdiction, and, if any such order is issued, to obtain the withdrawal of any such order at the earliest possible moment. (e) If requested by the managing or sole Underwriter in connection with such underwritten offering, (i) promptly incorporate in a Registration Statement, Prospectus, prospectus supplement or post-effective amendment such information as the managing or sole Underwriter reasonably requests to be included therein to comply with applicable law, (ii) make all required filings of such Registration Statement, Prospectus, prospectus supplement or post-effective amendment as soon as practicable after the Company has received notification of the matters to be incorporated in such prospectus supplement or post-effective amendment, and (iii) supplement or make amendments to such Registration Statement; provided, however, that the Company shall not be required to take any actions under this Section 1.5(e) that are not, in the opinion of counsel for the Company, in compliance with applicable law. (f) Furnish to Bermore and its counsel, if Bermore so requests, and to each managing Underwriter, without charge, one conformed copy of the Registration Statement or Statements and each post-effective amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference and all exhibits. (g) Deliver to Bermore, its counsel and the Underwriters, without charge, as many copies of the Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Persons may reasonably request; and the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by Bermore in connection with the offering and sale of the Bermore Shares covered by such Prospectus and any amendment or supplement thereto. (h) Prior to any public offering of Bermore Shares, to use its best efforts to register or qualify, and cooperate with Bermore, the Underwriters or sales agents and their respective counsel in connection with the registration or qualification (or exemption from such registration or qualification) of, such Bermore Shares for offer and sale under the securities or "blue sky" laws of such jurisdictions within the United States as 36 8 Bermore or the managing Underwriters or sales agents reasonably request in writing; use its best efforts to keep each such registration or qualification (or exemption therefrom) effective during the period during which the related Registration Statement is required to be kept effective; and use its best efforts to do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Bermore Shares covered by the applicable Registration Statement; provided, however, that the Company will not be required to (A) qualify generally to do business in any jurisdiction where it is not then so qualified or (B) take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject. (i) Cooperate with Bermore and the managing or sole Underwriters to facilitate the timely preparation and delivery of certificates representing Bermore Shares to be sold, which certificates shall not bear any restrictive legends and shall be in a form eligible for deposit with The Depository Trust Company; and enable such Bermore Shares to be in such denominations and registered in such names as the managing or sole Underwriter or Bermore may reasonably request at least two business days prior to any sale of Bermore Shares. (j) Upon the occurrence of any event contemplated by clause (v) or (vi) of Section 1.5(c) above, as promptly as practicable after and in any event within ten business days of the Company's having become aware of such event, prepare a supplement or post-effective amendment to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, or file any such document or other required document so that, as thereafter delivered to the purchasers of the Bermore Shares being sold thereunder, such Prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and so that such Registration Statement will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. (k) Enter into an underwriting agreement in form, scope and substance as is customary in underwritten offerings and take all such other actions as are reasonably requested by the managing or sole Underwriter in order to expedite or facilitate the registration or the disposition of the applicable Artal Shares and such Bermore Shares, and in such connection, (i) make such representations and warranties to the Underwriters, with respect to, among other things, the business of the Company and its subsidiaries, and the Registration Statement, Prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, in form, substance and scope as 37 9 are customarily made by issuers to Underwriters in underwritten offerings, and confirm the same if and when requested; (ii) obtain opinions of counsel to the Company and updates thereof (which counsel and opinions shall be reasonably satisfactory (in form, scope and substance) to the managing or sole Underwriters), addressed to the Underwriters covering the matters customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by the Underwriters; (iii) obtain "cold comfort" letters and updates thereof from the independent certified public accountants of the Company (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements and financial data are, or are required to be, included in the Registration Statement), addressed to each of the Underwriters, such letters to be in customary form and covering matters of the type customarily covered in "cold comfort" letters in connection with underwritten offerings; (iv) cause the Company's management to be made available for, and assist in, the marketing and disposition of the applicable Artal Shares and such Bermore Shares in the manner and to the extent reasonably requested by the Underwriters, including, without limitation, participation by management in customary road shows, investor conferences and other similar presentations; and (v) enter into an underwriting agreement which contains indemnification provisions and procedures no less favorable than those set forth in Section 1.7 hereof with respect to all parties to be indemnified pursuant to said Section and with respect to the Underwriters and each Person, if any, who controls such Underwriters (within the meaning of either Section 15 or the Securities Act or Section 20 of the Exchange Act) and any other Persons customarily covered by an indemnity of underwriters. The above shall be done at each closing under such underwriting agreement, or as and to the extent required thereunder. (l) Use its best efforts to cause the Bermore Shares covered by a Registration Statement to be rated with the appropriate rating agencies, if applicable, if so requested for the applicable Artal Shares by Artal or the managing or sole Underwriter. (m) Use its best efforts to cause all Bermore Shares covered by such Registration Statement to be (i) listed on each securities exchange on which securities issued by the Company are then listed, or (ii) authorized to be quoted on the NASDAQ or the National Market System of the NASDAQ if the securities so qualify, in each case, if requested for the applicable Artal Shares by Artal or the managing or sole Underwriter. (n) Make available for inspection by a representative of Bermore, any Underwriter participating in any such disposition of Bermore Shares, any accountant or counsel retained by Bermore, the Underwriters and any counsel to the Underwriters (collectively, the "Inspectors"), at the offices where normally 38 10 kept, during reasonable business hours, all financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries, and cause the officers, directors and employees of the Company and its subsidiaries to supply all information, in each case reasonably requested by any such Inspector in connection with such Registration Statement; provided, however, that any information that is designated in writing by the Company, in good faith, as confidential at the time of delivery of such information, shall be kept confidential by such Inspector unless (i) disclosure of such information is required by court or administrative order, (ii) disclosure of such information, in the opinion of counsel to such Inspector, is necessary to avoid or correct a misstatement or omission of a material fact in the Registration Statement, Prospectus or any supplement or post-effective amendment thereto or disclosure is otherwise required by law, or (iii) such information becomes generally available to the public other than as a result of a disclosure or failure to safeguard by such Inspector; without limiting the foregoing, no such information shall be used by such Inspector as the basis for any market transactions in securities of the Company or its subsidiaries in violation of law. (o) Comply with all applicable rules and regulations of the SEC and make generally available to its securityholders earnings statements satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) no later than 45 days after the end of any 12-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) commencing at the end of any fiscal quarter in which Bermore Shares are sold to Underwriters in a registered, underwritten offering. The Company may require Bermore to furnish to the Company such information regarding Bermore and the distribution of such Bermore Shares as the Company may, from time to time, reasonably request in writing, provided that such information shall be used only in connection with such registration. The Company may exclude Bermore Shares from such registration if Bermore unreasonably fails to furnish such information as promptly as practicable after receiving such request. Bermore agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in clause (ii), (iv) or (v) of Section 1.5(c), Bermore will forthwith discontinue disposition of such Bermore Shares covered by such Registration Statement or Prospectus until Bermore's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 1.5(j), or, if earlier, until it is advised in writing (the "Advice") by the Company that the use of the applicable Prospectus may be resumed, and has received copies of any supplements or amendments thereto. In the event the Company shall give any such notice at any time during the effectiveness period of a Registration Statement for registration of an offering on a continuous basis under Rule 415, the 39 11 effectiveness period shall be extended by the number of days during such periods from and including the date of the giving of such notice to and including the date when Bermore shall have received (x) the copies of the supplemented or amended Prospectus contemplated by Section 1.5(j) or (y) the Advice. 1.6 Registration Expenses. (a) All fees and expenses incident to the performance of or compliance with this Agreement by the Company shall be borne by the Company whether or not any Registration Statement is filed or becomes effective, including, without limitation, (i) all registration and filing fees (including, without limitation, (A) fees with respect to filings required to be made with the National Association of Securities Dealers, Inc. in connection with an underwritten offering and (B) fees and expenses of compliance with state securities or "blue sky" laws (including, without limitation, fees and disbursements of counsel for the Underwriters or counsel for the Company, in connection with "blue sky" qualifications of the Bermore Shares and determination of the eligibility of the Bermore Shares for investment under the laws of such jurisdictions as provided in Section 1.5(h), in the case of the Bermore Shares, (ii) printing expenses (including, without limitation, expenses of printing certificates for Bermore Shares in a form eligible for deposit with The Depository Trust Company and of printing Prospectuses if the printing of Prospectuses is requested for the applicable Artal Shares by the managing or sole Underwriter or by Artal), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) fees and disbursements of all independent certified public accountants referred to in Section 1.5(k) (including, without limitation, the expenses of any special audit and "cold comfort" letters required by or incident to such performance), (vi) rating agency fees, (vii) Securities Act liability insurance, if the Company so desires such insurance, (viii) the expense of any annual audit and (ix) the fees and expenses incurred in connection with the listing of the securities to be registered on any securities exchange. (b) Without limiting Section 1.6(a), in connection with any Registration Statement hereunder, Bermore shall bear no fees and expenses of any kind other than the discounts, commissions, or fees of Underwriters, selling brokers, dealer managers or similar securities industry professionals relating to the distribution of Bermore Shares and the fees and disbursements of counsel chosen by Bermore, if any, and actual out-of-pocket expenses incurred by Bermore in connection with the related Registration Statement. 1.7 Indemnification, Contribution. (a) Indemnification by the Company. The Company shall indemnify and hold harmless, to the full extent permitted by law, Bermore, its officers, directors and agents and employees, each 40 12 Person who controls Bermore (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act), the officers, directors, agents and employees of each such controlling person and any financial or investment adviser or other representatives thereto (each, an "Indemnified Party"), from and against any and all losses, claims, damages, liabilities, actions or proceedings (whether commenced or threatened), reasonable costs (including, without limitation, reasonable costs of preparation and reasonable attorneys' fees and expenses) and reasonable expenses (including reasonable expenses of investigation) (collectively, "Losses"), as incurred, arising out of or based upon (i) any untrue or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus or form of prospectus or in any amendment or supplements thereto or in any preliminary prospectus, or arising out of or based upon any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or any amendment or supplement thereto or any preliminary prospectus, in light of the circumstances under which they were made) not misleading, except to the extent that the same arise out of or are based upon information furnished in writing to the Company by such Indemnified Party or Bermore expressly for use therein, or (ii) any violation by the Company of any federal, state or common law rule or regulation applicable to the Company and relating to action required of or inaction by the Company in connection with any such registration. Such indemnity and reimbursement of costs and expenses shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party. (b) Indemnification by Bermore. In connection with any Registration Statement in which Bermore is participating, an authorized officer of Bermore shall furnish to the Company in writing such information as the Company reasonably requests for use in connection with any Registration Statement or Prospectus and Bermore shall indemnify, to the full extent permitted by law, the Company and its respective directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling persons, from and against all Losses arising out of or based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus, or form of prospectus, or arising out of or based upon any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any Prospectus or form of prospectus, in light of the circumstances under which they were made), to the extent, but only to the extent, that such untrue or alleged untrue statement is contained in, or such omission or alleged omission is required to be contained in, any information so furnished in writing by Bermore to the Company expressly for use in such Registration Statement or Prospectus and that such 41 13 statement or omission was relied upon by the Company in preparation of such Registration Statement, Prospectus or form of prospectus; provided, however, that Bermore shall not be liable in any such case to the extent that Bermore has furnished in writing to the Company within a reasonable period of time prior to the filing of any such Registration Statement or Prospectus or amendment or supplement thereto information expressly for use in such Registration Statement or Prospectus or any amendment or supplement thereto which corrected or made not misleading, information previously furnished to the Company, and the Company failed to include such information therein. In no event shall the liability of Bermore hereunder be greater in amount than the dollar amount of the proceeds (net of payment of all expenses) received by Bermore upon the sale of the Bermore Shares giving rise to such indemnification obligation. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such indemnified party. (c) Conduct of Indemnification Proceedings. If any Person shall be entitled to indemnity hereunder (an "indemnified party"), such indemnified party shall give prompt notice to the party or parties from which such indemnity is sought (the "indemnifying parties") of the commencement of any action, suit, proceeding or investigation or written threat thereof (a "Proceeding") with respect to which such indemnified party seeks indemnification or contribution pursuant hereto; provided, however, that the failure to so notify the indemnifying parties shall not relieve the indemnifying parties from any obligation or liability except to the extent that the indemnifying parties have been prejudiced by such failure. The indemnifying parties shall have the right, exercisable by giving written notice to an indemnified party promptly after the receipt of written notice from such indemnified party of such Proceeding, to assume, at the indemnifying parties' expense, the defense of any such Proceeding, with counsel reasonably satisfactory to such indemnified party; provided, however, that an indemnified party or parties (if more than one such indemnified party is named in any Proceeding) shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such indemnified party or parties unless: (1) the indemnifying parties agree to pay such fees and expenses; (2) the indemnifying parties fail promptly to assume the defense of such Proceeding or fail to employ counsel reasonably satisfactory to such indemnified party or parties; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such indemnified party or parties and the indemnifying parties or an affiliate of the indemnifying parties or such indemnified parties, and there may be one or more defenses available to such indemnified party or parties that are different from or additional to those available to the indemnifying parties, in which case, if such indemnified party or parties notifies the indemnifying parties in writing that it elects to employ separate counsel at the expense of the indemnifying 42 14 parties, the indemnifying parties shall not have the right to assume the defense thereof and such counsel shall be at the expense of the indemnifying parties, it being understood, however, that, unless there exists a conflict among indemnified parties, the indemnifying parties shall not, in connection with any one such Proceeding but substantially similar or related Proceedings in the same jurisdiction, arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys (together with appropriate local counsel) at any time for such indemnified party or parties. Whether or not such defense is assumed by the indemnifying parties, such indemnifying parties or indemnified party or parties will not be subject to any liability for any settlement made without its or their consent (but such consent will not be unreasonably withheld or delayed). The indemnifying parties shall not consent to entry of any judgment or enter into any settlement (i) which provides for other than monetary damages without the consent of the indemnified party or parties (which consent shall not be unreasonably withheld or delayed) or (ii) that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party or parties of a release, in form and substance satisfactory to the indemnified party or parties, from all liability in respect of such Proceeding for which such indemnified party would be entitled to indemnification hereunder. (d) Contribution. If the indemnification provided for in this Section 1.7 is unavailable to an indemnified party or is insufficient to hold such indemnified party harmless for any Losses in respect of which this Section 1.7 would otherwise apply by its terms, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall have a joint and several obligation to contribute to the amount paid or payable by such indemnified party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one hand, and such indemnified party, on the other hand, in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such indemnifying party, on the one hand, and indemnified party, on the other hand, shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been taken by, or relates to information supplied by, such indemnifying party or indemnified party, and the parties relative intent, knowledge, access to information and opportunity to correct or prevent any such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include any legal or other fees or expenses incurred by such party in connection with any Proceeding, to the extent such party would have been indemnified for such expenses if the indemnification provided for in Section 1.7(a) or 1.7(b) was available to such party. 43 15 The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 1.7(d) were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provision of this Section 1.7(d), Bermore, in its capacity as an indemnifying party, shall not be required to contribute any amount in excess of the amount by which the net proceeds received by Bermore exceeds the amount of any damages that Bermore has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. 1.8 Rules 144 and 144A. The Company shall file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations promulgated thereunder (or, if the Company is not required to file such reports, it will, upon the request of Bermore, make publicly available other information so long as such information is necessary to permit sales under Rules 144 and 144A), and will take such further action as Bermore may reasonably request, all to the extent required from time to time to enable Bermore to sell Bermore Shares without registration under the Securities Act within the limitation of the exemptions provided by Rules 144 and 144A. Upon the request of Bermore, the Company shall deliver to Bermore a written statement as to whether it has complied with such requirements. 1.9 Suspension; Postponement. Notwithstanding anything to the contrary contained herein, the provisions regarding the Company's right to suspend or postpone any Demand Registration Statement (as such term is defined in Annex A of the New Stockholders' Agreement) or the sale of securities thereunder contained in Section 1.1(g) of such Annex A shall be binding upon Bermore, if and only if Bermore is selling Bermore Shares under such Demand Registration Statement and then only with respect to the Bermore Shares being sold therein, as and to the same extent such Section 1.1(g) is binding upon Artal, and shall be deemed to be incorporated by reference herein. 1.10 Additional Registration Rights. The Company shall not grant any registration rights after the date hereof (i) that are superior to the rights granted to Artal under the New Stockholders' Agreement (including, without limitation, Artal's piggyback registration rights under the New Stockholders' Agreement) or (ii) which would give another party the right to include shares of Common Stock in any Demand Registration Statement which is being filed pursuant to the New Stockholders' Agreement (except where such right to include shares in a Demand Registration Statement is subordinate to the right of Artal and its Assignees (as such term is defined in the 44 16 New Stockholders' Agreement) to include shares in such Demand Registration Statement with respect to prioritization in the event of an Underwriter cutback) or (iii) which would give any party demand registration rights exercisable at any time prior to the expiration of Artal's demand registration rights under the New Stockholders' Agreement or (iv) which are superior to the piggyback registration rights granted to Bermore pursuant to this Agreement. 1.11 Exchange Act Reports. The Company will, to the extent reasonably requested by Bermore, provide information to Bermore and otherwise assist Bermore in connection with all filings with the SEC or the New York Stock Exchange required to be made by Bermore or its Affiliates in respect of the Company, including, without limitation, filings on Schedule 13D or 13G under the Exchange Act, with the understanding that the ultimate responsibility for making such filings and for the accuracy of such filings remains with Bermore and its Affiliates. 2.1 Definitions. Capitalized terms used in this Annex A shall have the meanings set forth below: "Advice" shall have the meaning specified in Section 1.5. "Artal Demand Right" shall have the meaning specified in Section 1.1. "Artal Piggyback" shall have the meaning specified in Section 1.1. "Indemnified Party" shall have the meaning specified in Section 1.7(a). "Inspectors" shall have the meaning specified in Section 1.5(n). "Losses" shall have the meaning specified in Section 1.7(a). "NASDAQ" means the National Association of Securities Dealers Automated Quotation System. "Proceeding" shall have the meaning specified in Section 1.7(c). "Prospectus" means the prospectus included in the Registration Statement, including any form of prospectus or any preliminary prospectus, as amended or supplemented by any prospectus supplement and by all other amendments or supplements to such prospectus, including all post-effective amendments and 45 17 all material, if any, incorporated by reference or deemed to be incorporated by reference into such prospectus. "Registration Statement" means any registration statement of the Company under which any of the Registrable Securities are included therein pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits, all registration statements filed pursuant to Rule 462(b) under the Securities Act and all material incorporated by reference or deemed to be incorporated by reference in such registration statement. "Rule 415" means Rule 415 promulgated by the SEC under the Securities Act as such rule may be amended from time to time, or any similar rule then in force. "Underwriter" has the meaning set forth in Section 2(11) of the Securities Act. 46 ANNEX B INVESTOR JOINDER By execution of this Investor Joinder, the undersigned agrees to become a party to that certain Stock Purchase and Stockholder's Agreement, dated as of January 28, 1998 (the "Agreement"), among Keebler Foods Company (the "Company") and certain stockholders of the Company, which stockholders included on such date Bermore, Ltd., Artal Luxembourg S.A. and Flowers Industries, Inc. By execution of this Investor Joinder, the undersigned shall have all rights, and shall observe all the obligations, applicable to [fill in name of transferor] (except as otherwise set forth in the Agreement), and to have made on the date hereof all representations and warranties made by such Investor Stockholder, modified, if necessary, to reflect the nature of the undersigned as a corporation, partnership, other entity or natural person. [If Completed By A Permitted Transferee of Bermore] [The undersigned hereby (i) appoints Michael Uytengsu or such one Person as Bermore, Ltd. (if it remains a party to the Agreement) and all of its permitted transferees shall agree upon, as the undersigned's true and lawful attorney-in-fact for purposes of exercising the undersigned's rights and obligations under the Agreement (the "Attorney"), (ii) appoints Bermore, Ltd. or such two Persons (which may include Bermore, Ltd.) as Bermore, Ltd. (if it remains a party to the Agreement) and all of its permitted transferees shall agree upon, as the undersigned's true and lawful custodians (each a "Custodian" which may act independently of the other in respect of shares which have been transferred to it) in respect of the shares of common stock, par value $.01, of the Company transferred to the undersigned on the date hereof and (iii) simultaneously upon execution hereof shall deposit such shares with the Custodian listed below and instruct each Custodian to take all actions in respect of such shares as may at any time or from time to time be requested by the Attorney.] [Custodian to whom shares transferred: _____________] Name:_________________________ Address for with copies Notices: to: ______________________________ _____________________________ ______________________________ _____________________________ ______________________________ _____________________________ ______________________________ _____________________________ ______________________________ _____________________________ 47 If an individual, are you presently married or separated? yes _____ no _____ (If yes, you must also have your spouse execute a spousal consent in the form attached hereto.) Signature:___________________ Date:___________________ 48 CONSENT AND AGREEMENT OF SPOUSE I, _________________________________, am the spouse of ____________________, one of the stockholders of Keebler Foods Company, a Delaware corporation (the "Company"). I acknowledge that my spouse is a party to that certain Stock Purchase and Stockholder's Agreement, dated as of January 28, 1998, among the Company and certain stockholders of the Company, which stockholders included on such date Bermore, Ltd., Artal Luxembourg S.A. and Flowers Industries, Inc. (the "Agreement"), and that I have read the Agreement. I consent to, agree to, approve and ratify each and every one of the terms and provisions of the Agreement, and I further agree to provide all notices and information required of me in the time and manner set forth in the Agreement. Executed this ____ day of __________, 199_. _________________________________ (Signature of Consenting Spouse) 49 ANNEX C-1 FIRPTA Certificate The undersigned hereby certifies to Bermore, Ltd. as to the status of Keebler Foods Company (the "Company"), and to the status of the stock of the Company, under the Foreign Investment in Real Property Tax Act of 1980. Pursuant to Sections 1.1445-2(c)(3) and 1.897.2(h) of the Treasury Regulations, the undersigned hereby certifies on behalf of the Company: 1. This certificate is given under Treasury Regulations Sections 1.1445-2(c)(3)(i) and 1.897-2(h); 2. The Company is not, and has not been during the five-year period ending the date hereof, a United States real property holding corporation within the meaning of Section 897(c)(2) of the Internal Revenue Code of 1986, as amended (the "Code"), and no stock of the Company is a United States real property interest within the meaning of Section 897(c)(1) of the Code; 3. The Company's U.S. employer identification number is 36-1894790; 4. The office address of the Company is: 677 Larch Avenue, Elmhurst, IL 60126; 5. The office address of Bermore, Ltd. is: Crawford House, 23 Church Street, P.O. Box HM 1436, Hamilton, Bermuda HMFX; and 6. This certificate and any applicable supplemental statements shall be submitted to the Internal Revenue Service pursuant to Treasury Regulation Section 1.897-2(h). Each Company understands that this certification may be disclosed to the Internal Revenue Service by Bermore, Ltd. and that any false statement contained herein could be punished by fine, imprisonment, or both. Under penalties of perjury the officer executing this certificate on behalf of the Company hereby declares that he has examined this certification and to the best of his knowledge and belief it is true, correct and complete, and the undersigned further declares he has authority to sign this document on behalf of the Company. KEEBLER FOODS COMPANY, by____________________________ Name: Title: Dated: February 3, 1998 50 ANNEX C-2 Notice to Internal Revenue Service Pursuant to Reg. Section 1.897-2(H) The undersigned hereby provides notice to the IRS as to its certification to Bermore, Ltd. of the status of the stock of Keebler Foods Company (the "Company"), under the Foreign Investment in Real Property Tax Act of 1980. Pursuant to Sections 1.1445-2(c)(3) and 1.897.2(h) of the Treasury Regulations, the undersigned hereby certifies on behalf of the Company: 1. This certificate is given under Treasury Regulations Sections 1.1445-2(c)(3)(i) and 1.897-2(h). 2. The Company is not, and has not been during the five-year period ending the date hereof, a United States real property holding corporation within the meaning of Section 897(c)(2) of the Internal Revenue Code of 1986, as amended (the "Code"), and no stock of the Company is a United States real property interest within the meaning of Section 897(c)(1) of the Code; 3. The Company's U.S. employer identification number is 36-1894790; 4. The office address of the Company is: 677 Larch Avenue, Elmhurst, IL 60126; and 5. The office address of Bermore, Ltd. is: Crawford House, 23 Church Street, P.O. Box HM 1436, Hamilton, Bermuda HMFX. Under penalties of perjury the officer executing this certificate on behalf of the Company hereby declares that he has examined this certification and to the best of his knowledge and belief it is true, correct and complete, and the undersigned further declares he has authority to sign this document on behalf of the Company. KEEBLER FOODS COMPANY, by______________________________ Name: Title: Dated: February 3, 1998 Attachment: FIRPTA Certification to Bermore, Ltd. EX-99.01 4 1ST AMENDMENT TO NOTE PURCHASE AGREEMENT 1 EXHIBIT 99.01 FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT THIS FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT made this 23rd day of January, 1998, by and among Flowers Industries, Inc., a Georgia corporation (the "Company") and each of the holders (the "Holders") of the Notes (as defined in that certain Note Purchase Agreement dated December 20, 1995 by and among the Company and each of the Purchasers (the "Note Purchase Agreement"). Capitalized terms not otherwise defined in this First Amendment to Note Purchase Agreement shall have the meaning given them in the Note Purchase Agreement; W I T N E S S E T H: WHEREAS, the Company and the Holders have entered into the Note Purchase Agreement; WHEREAS, the parties hereto desire to amend the Note Purchase Agreement to amend the ratio of Consolidated Total Debt to Total Capitalization; WHEREAS, pursuant to Section 17.1 of the Note Purchase Agreement, the Note Purchase Agreement may be amended with the written consent of the Company and the Required Holders; NOW, THEREFORE, for and in consideration of the premises and the mutual promises, agreements, representations, warranties and covenants hereinafter set forth, and the sum of ten dollars and other good and valuable consideration, the receipt and sufficiency of which is hereby specifically agreed to and acknowledged, the Note Purchase Agreement is hereby amended as follows: 1. Section 10.3 of the Note Purchase Agreement is hereby amended by deleting from such Section "65%" and substituting in lieu thereof "75%". 2. The foregoing amendment shall remain in effect until the earlier of (i) the closing of a public offering of common stock by the Company or (ii) December 31, 1998. 3. Except to the extent expressly amended herein, all terms and conditions of the Note Purchase Agreement are hereby affirmed and shall remain in full force and effect. 4. The Company hereby represents to the Holders that as of the date hereof no Default or Event of Default exists under the Note Purchase Agreement; 5. This First Amendment to Note Purchase Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 1 2 IN WITNESS WHEREOF, each party hereto has executed or caused this First Amendment to Note Purchase Agreement to be executed on its behalf, all on the day and year first above written. FLOWERS INDUSTRIES, INC. "Company" By: /s/ C. M. Wood III ------------------------------------- Name: C. M. Wood III Title: Senior Vice President 2 3 SCHEDULE OF HOLDERS ALLIED LIFE INSURANCE COMPANY By: Lincoln Investment Management, Inc., Its Attorney-In-Fact By: /s/ J. Steven Staggs -------------------------------------- Name: J. Steven Staggs Title: Vice President THE LINCOLN NATIONAL LIFE INSURANCE COMPANY By: Lincoln Investment Management, Inc., its Attorney-in-fact By: /s/ J. Steven Staggs -------------------------------------- Name: J. Steven Staggs Title: Vice President LINCOLN-SECURITY LIFE INSURANCE COMPANY By: Lincoln Investment Management, Inc., its Attorney-in-Fact By: /s/ James V. Wittich -------------------------------------- Name: James V. Wittich Title: Vice President, Investments SECURITY-CONNECTICUT LIFE INSURANCE COMPANY By: Lincoln Investment Management, Inc., its Attorney-in-Fact By: /s/ James V. Wittich -------------------------------------- Name: James V. Wittich Title: Assistant Treasurer 3 4 AMERICAN GENERAL LIFE INSURANCE COMPANY and THE VARIABLE ANNUITY LIFE INSURANCE COMPANY By: /s/ Julia S. Tucker -------------------------------------- Name: Julia S. Tucker Title: Investment Officer CUNA MUTUAL INSURANCE SOCIETY By: Century Investment Management Co. By: /s/ Donald Heltner ------------------------------- Name: Donald Heltner Title: Vice President EMPLOYERS LIFE INSURANCE COMPANY OF WAUSAU By: /s/ Edwin P. McCausland, Jr. -------------------------------------- Name: Edwin P. McCausland, Jr. Title: Vice President, Fixed-Income Securities MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY By: /s/ Walter T. Dwyer -------------------------------------- Name: Walter T. Dwyer Title: Managing Director 4 5 METROPOLITAN LIFE INSURANCE COMPANY By: /s/ Gerald P. Marcus -------------------------------------- Name: Gerald P. Marcus Title: Director METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY By: /s/ James A. Wiviott -------------------------------------- Name: James A. Wiviott Title: Authorized Signatory NATIONWIDE LIFE INSURANCE COMPANY By: /s/ Edwin P. McCausland, Jr. -------------------------------------- Name: Edwin P. McCausland, Jr. Title: Vice President, Fixed-Income Securities NATIONWIDE LIFE INSURANCE COMPANY SEPARATE ACCOUNT OH By: /s/ Edwin P. McCausland, Jr. -------------------------------------- Name: Edwin P. McCausland, Jr. Title: Vice President, Fixed-Income Securities UNITED OF OMAHA LIFE INSURANCE COMPANY By: /s/ Curtis R. Caldwell -------------------------------------- Name: Curtis R. Caldwell Title: First Vice President 5 EX-99.02 5 AMENDED & RESTATED CREDIT AGREEMENT 1 EXHIBIT 99.02 $500,000,000 AMENDED AND RESTATED CREDIT AGREEMENT dated as of January 30, 1998 among FLOWERS INDUSTRIES, INC. The Banks Listed Herein WACHOVIA BANK, N.A., as Agent, THE BANK OF NOVA SCOTIA, as Documentation Agent and NATIONSBANK, N.A., as Syndications Agent 2 TABLE OF CONTENTS AMENDED AND RESTATED CREDIT AGREEMENT
Page ---- ARTICLE I DEFINITIONS..................................................1 SECTION 1.01. Definitions........................................................................1 SECTION 1.02. Accounting Terms and Determinations...............................................18 SECTION 1.03. References........................................................................18 SECTION 1.04. Use of Defined Terms..............................................................18 SECTION 1.05. Terminology.......................................................................18 ARTICLE II THE CREDITS..................................................18 SECTION 2.01. Commitments to Lend Syndicated Loans..............................................19 SECTION 2.02. Method of Borrowing Syndicated Loans..............................................19 SECTION 2.03. Money Market Loans................................................................21 SECTION 2.04. Notes.............................................................................25 SECTION 2.05. Maturity of Loans.................................................................26 SECTION 2.06. Interest Rates....................................................................27 SECTION 2.07. Fees..............................................................................30 SECTION 2.08. Optional Termination or Reduction of Commitments.......................................................................31 SECTION 2.09. Mandatory Reduction and Termination of Commitments.......................................................................31 SECTION 2.10. Optional Prepayments..............................................................32 SECTION 2.11. Mandatory Prepayments.............................................................33 SECTION 2.12. General Provisions as to Payments.................................................33 SECTION 2.13. Computation of Interest and Fees..................................................35
(i) 3
ARTICLE III CONDITIONS TO BORROWINGS............................................35 SECTION 3.01. Conditions to First Borrowing.....................................................35 SECTION 3.02. Conditions to All Borrowings......................................................37 ARTICLE IV REPRESENTATIONS AND WARRANTIES.........................................38 SECTION 4.01. Corporate Existence and Power.....................................................38 SECTION 4.02. Corporate and Governmental Authorization; No Contravention.....................................................................38 SECTION 4.03. Binding Effect....................................................................39 SECTION 4.04. Financial Information.............................................................39 SECTION 4.05. No Litigation.....................................................................39 SECTION 4.06. Compliance with ERISA.............................................................39 SECTION 4.07. Compliance with Laws; Payment of Taxes............................................40 SECTION 4.08. Subsidiaries......................................................................40 SECTION 4.09. Investment Company Act............................................................41 SECTION 4.10. Public Utility Holding Company Act................................................41 SECTION 4.11. Ownership of Property; Liens......................................................41 SECTION 4.12. No Default........................................................................41 SECTION 4.13. Full Disclosure...................................................................41 SECTION 4.14. Environmental Matters.............................................................41 SECTION 4.15. Capital Stock.....................................................................42 SECTION 4.16. Margin Stock......................................................................42 SECTION 4.17. Insurance.........................................................................43 ARTICLE V COVENANTS...................................................43 SECTION 5.01. Information.......................................................................43 SECTION 5.02. Inspection of Property, Books and Records.........................................45
(ii) 4 SECTION 5.03. Maintenance of Existence..........................................................45 SECTION 5.04. Consolidations, Mergers and Sales of Assets.......................................46 SECTION 5.05. Use of Proceeds...................................................................47 SECTION 5.06. Compliance with Laws; Payment of Taxes............................................47 SECTION 5.07. Insurance.........................................................................48 SECTION 5.08. Change in Fiscal Year.............................................................48 SECTION 5.09. Maintenance of Property...........................................................48 SECTION 5.10. Environmental Notices.............................................................48 SECTION 5.11. Environmental Matters.............................................................49 SECTION 5.12. Environmental Release.............................................................49 SECTION 5.13. Transactions with Affiliates......................................................49 SECTION 5.14. Loans or Advances.................................................................49 SECTION 5.15. Investments.......................................................................50 SECTION 5.16. Negative Pledge...................................................................50 SECTION 5.17. Fixed Charges Coverage Ratio......................................................53 SECTION 5.18. Leverage Ratio....................................................................53 SECTION 5.19. Minimum Consolidated Net Worth....................................................53 SECTION 5.20. Subsidiary Borrowings.............................................................53 SECTION 5.21. Adjusted Leverage Ratio...........................................................54 ARTICLE VI DEFAULTS....................................................54 SECTION 6.01. Events of Default.................................................................54 SECTION 6.02. Notice of Default.................................................................58 ARTICLE VII THE AGENT...................................................58 SECTION 7.01. Appointment; Powers and Immunities................................................58 SECTION 7.02. Reliance by Agent.................................................................59
(iii) 5 SECTION 7.03. Defaults..........................................................................60 SECTION 7.04. Rights of Agent and its Affiliates as a Bank......................................60 SECTION 7.05. Indemnification...................................................................60 SECTION 7.06 Consequential Damages.............................................................61 SECTION 7.07. Payee of Note Treated as Owner....................................................61 SECTION 7.08. Nonreliance on Agent and Other Banks..............................................61 SECTION 7.09. Failure to Act....................................................................62 SECTION 7.10. Resignation or Removal of Agent...................................................62 ARTICLE VIII CHANGE IN CIRCUMSTANCES; COMPENSATION.............................................63 SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair............................................................................63 SECTION 8.02. Illegality........................................................................63 SECTION 8.03. Increased Cost and Reduced Return.................................................64 SECTION 8.04. Base Rate Loans Substituted for Euro-Dollar Loans.............................................................................65 SECTION 8.05. Compensation......................................................................66 SECTION 8.06. Replacement of Bank...............................................................67 ARTICLE IX MISCELLANEOUS.................................................67 SECTION 9.01. Notices...........................................................................67 SECTION 9.02. No Waivers........................................................................68 SECTION 9.03. Expenses; Documentary Taxes.......................................................68 SECTION 9.04. Indemnification...................................................................68 SECTION 9.05. Setoff; Sharing of Setoffs........................................................69 SECTION 9.06. Amendments and Waivers............................................................70 SECTION 9.07. No Margin Stock Collateral........................................................71 SECTION 9.08. Successors and Assigns............................................................71
(iv) 6 SECTION 9.09. Confidentiality...................................................................74 SECTION 9.10. Representation by Banks...........................................................74 SECTION 9.11. Obligations Several...............................................................75 SECTION 9.12. Georgia Law.......................................................................75 SECTION 9.13. Severability......................................................................75 SECTION 9.14. Interest..........................................................................75 SECTION 9.15. Interpretation....................................................................76 SECTION 9.16. Waiver of Jury Trial; Consent to Jurisdiction.....................................76 SECTION 9.17. Counterparts......................................................................77 SECTION 9.18. Source of Funds -- ERISA..........................................................77 EXHIBIT A-1 Form of Syndicated Loan Note EXHIBIT A-2 Form of Money Market Loan Note EXHIBIT B Form of Opinion of Counsel for the Borrower EXHIBIT C Form of Opinion of Special Counsel for the Agent EXHIBIT D Form of Assignment and Acceptance EXHIBIT E Form of Notice of Borrowing EXHIBIT F Form of Compliance Certificate EXHIBIT G Form of Closing Certificate EXHIBIT H Form of Officer's Certificate EXHIBIT I Form of Money Market Quote Request EXHIBIT J Form of Money Market Quote Schedule 4.08 Subsidiaries
(v) 7 AMENDED AND RESTATED CREDIT AGREEMENT AMENDED AND RESTATED CREDIT AGREEMENT dated as of January 30, 1998 among FLOWERS INDUSTRIES, INC., the BANKS listed on the signature pages hereof, WACHOVIA BANK, N.A., as Agent, THE BANK OF NOVA SCOTIA, as Documentation Agent, and NATIONSBANK, N.A., as Syndications Agent. This Amended and Restated Credit Agreement is an amendment and restatement of the $300,000,000 Credit Agreement by and among the Borrower, the Banks parties thereto, Wachovia Bank, N.A. (formerly Wachovia Bank of Georgia, N.A.), as Agent, and NationsBank, N.A. (formerly NationsBank, N.A. (South)) and SunTrust Bank, Atlanta, as Co-Agents (the "Original Agreement"), which is replaced and superseded hereby. The parties hereto agree as follows: ARTICLE I DEFINITIONS SECTION 1.01. Definitions. The terms as defined in this Section 1.01 shall, for all purposes of this Agreement and any amendment hereto (except as herein otherwise expressly provided or unless the context otherwise requires), have the meanings set forth herein: "Adjusted Total Capitalization" means the sum of (i) Adjusted Consolidated Total Debt and (ii) Consolidated Net Worth, excluding therefrom the Net Worth of Keebler. "Adjusted Consolidated Total Debt" means Consolidated Total Debt, adjusted by excluding therefrom all Indebtedness, and any Convertible Redeemable Capital Stock or Convertible Subordinated Debt, of Keebler. "Adjusted London Interbank Offered Rate" has the meaning set forth in Section 2.06(c). "Affiliate" of any relevant Person means (i) any Person that directly, or indirectly through one or more intermediaries, controls the relevant Person (a "Controlling Person"), (ii) any Person (other than the relevant Person or a Subsidiary of the relevant Person) which is controlled by or is under common control with a Controlling Person, or (iii) any Person (other than a Subsidiary of the relevant Person) of which the relevant Person owns, directly or indirectly, 20% or more of the common 8 stock or equivalent equity interests. As used herein, the term "control" means possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise. "Agent" means Wachovia Bank, N.A., a national banking association organized under the laws of the United States of America, in its capacity as agent for the Banks hereunder, and its successors and permitted assigns in such capacity. "Agent's Letter Agreement" means that certain letter agreement, dated as of December 18, 1997 between the Borrower and the Agent relating to the structure of the Loans, and certain fees from time to time payable by the Borrower to the Agent, together with all amendments and supplements thereto. "Agreement" means this Amended and Restated Credit Agreement, together with all amendments and supplements hereto. "Applicable Margin" has the meaning set forth in Section 2.06(a). "Assignee" has the meaning set forth in Section 9.08(c). "Assignment and Acceptance" means an Assignment and Acceptance executed in accordance with Section 9.08(c) in the form attached hereto as Exhibit D. "Authority" has the meaning set forth in Section 8.02. "Bank" means each bank listed on the signature pages hereof as having a Commitment, and its successors and permitted assigns. "Base Rate" means for any Base Rate Loan for any day, the rate per annum equal to the higher as of such day of (i) the Prime Rate, or (ii) one-half of one percent above the Federal Funds Rate. For purposes of determining the Base Rate for any day, changes in the Prime Rate or the Federal Funds Rate shall be effective on the date of each such change. "Base Rate Borrowing" has the meaning set forth in the definition of Borrowing. "Base Rate Loan" means a Loan which bears or is to bear interest at a rate based upon the Base Rate, and is to be made as a Base Rate Loan pursuant to the applicable Notice of Borrowing, Section 2.02(f), or Article VIII, as applicable. 2 9 "Borrower" means Flowers Industries, Inc. a Georgia corporation, and its successors and its permitted assigns. "Borrowing" means a borrowing hereunder consisting of Loans made to the Borrower (i) at the same time by all of the Banks, in the case of a Syndicated Borrowing, or (ii) separately by one or more Banks, in the case of a Money Market Borrowing, in each case pursuant to Article II. A Borrowing is a "Money Market Borrowing" if such Loans are made pursuant to Section 2.03 or a "Syndicated Borrowing" if such Loans are made pursuant to Section 2.01. A Borrowing is a "Base Rate Borrowing" if such Loans are made as Base Rate Loans or a "Euro-Dollar Borrowing" if such Loans are made as Euro-Dollar Loans. "Capital Stock" means any nonredeemable capital stock of the Borrower or any Consolidated Subsidiary (to the extent issued to a Person other than the Borrower), whether common or preferred. "Capitalized Lease" means any lease which is required to be capitalized on the balance sheet of the lessee pursuant to GAAP but shall exclude any lease which at the time of its incurrence was an operating lease for purposes of GAAP as in effect at such time. "CERCLA" means the Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C. ss. 9601 et. seq. and its implementing regulations and amendments. "CERCLIS" means the Comprehensive Environmental Response Compensation and Liability Inventory System established pursuant to CERCLA. "Change of Law" shall have the meaning set forth in Section 8.02. "Closing Certificate" has the meaning set forth in Section 3.01(e). "Closing Date" means January 30, 1998. "Code" means the Internal Revenue Code of 1986, as amended, or any successor Federal tax code. "Commitment" means, with respect to each Bank, (i) the amount set forth opposite the name of such Bank on the signature pages hereof, and (ii)as to any Bank which enters into any Assignment and Acceptance (whether as transferor Bank or as Assignee thereunder), the amount of such Bank's Commitment after giving effect to such Assignment and Acceptance, in each case as 3 10 such amount may be reduced from time to time pursuant to Sections 2.08 and 2.09. "Compliance Certificate" has the meaning set forth in Section 5.01(c). "Consolidated Indebtedness" means at any date the Indebtedness of the Borrower and its Consolidated Subsidiaries, determined on a consolidated basis as of such date. "Consolidated Fixed Charges" means at any date the sum of (i) Consolidated Interest Expense for the 4 Fiscal Quarter period used in the calculation of Consolidated Net Income for the determination of EBILT, and (ii) all payment obligations of the Borrower and its Consolidated Subsidiaries for such period under all operating leases and rental agreements. "Consolidated Interest Expense" for any period means interest, whether expensed or capitalized, in respect of Indebtedness of the Borrower or any of its Consolidated Subsidiaries outstanding during such period. "Consolidated Net Income" means, for any period, the Net Income of the Borrower and its Consolidated Subsidiaries determined on a consolidated basis, but excluding (i) extraordinary items and (ii) any equity interests of the Borrower or any Subsidiary in the unremitted earnings of any Person that is not a Subsidiary. "Consolidated Net Worth" means the Net Worth of the Borrower and its Subsidiaries determined on a consolidated basis in accordance with GAAP. "Consolidated Operating Profits" means, for any period, the Operating Profits of the Borrower and its Consolidated Subsidiaries. "Consolidated Subsidiary" means at any date any Subsidiary or other entity the accounts of which, in accordance with GAAP, would be consolidated with those of the Borrower in its consolidated financial statements as of such date. "Consolidated Total Assets" means, at any time, the total assets of the Borrower and its Consolidated Subsidiaries, determined on a consolidated basis, as set forth or reflected on the most recent consolidated balance sheet of the Borrower and its Consolidated Subsidiaries, prepared in accordance with GAAP. "Consolidated Total Debt" means the aggregate of all Indebtedness (except that, for purposes of determining 4 11 Consolidated Total Debt, letters of credit and similar instruments described in clause (e) of the definition of Indebtedness shall be included only to the extent they have maturities greater than 1 year) of the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP, excluding, however, any Convertible Redeemable Capital Stock or Convertible Subordinated Debt if the current market value of an equity security into which such Convertible Redeemable Capital Stock or Convertible Subordinated Debt is convertible is greater than the conversion price for such security. "Controlled Group" means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower, are treated as a single employer under Section 414 of the Code. "Convertible Redeemable Capital Stock" means any Capital Stock that by its terms (or by the terms of any agreement by which or equity security into which it is convertible or for which it is exchangeable or any other agreement) or upon the happening of any event matures or is or will become mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, or is exchangeable for or convertible into an equity security of the Borrower. "Convertible Subordinated Debt" means any Indebtedness of the Borrower (i) which is and remains subordinated in right of payment to the obligations of the Borrower on the Notes and (ii) which by its terms is exchangeable for or convertible into an equity security of the Borrower. "Default" means any condition or event which constitutes an Event of Default or which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default. "Default Rate" means, with respect to any Loan, on any day, the sum of 2% plus the then highest interest rate (including the Applicable Margin) which may be applicable to any Loans hereunder (irrespective of whether any such type of Loans are actually outstanding hereunder). "Dollars" or "$" means dollars in lawful currency of the United States of America. "Domestic Business Day" means any day except a Saturday, Sunday or other day on which commercial banks in Georgia are authorized by law to close. 5 12 "EBILT" means at any date the sum of (i) Consolidated Net Income for any 4 of the last 6 Fiscal Quarters ending prior to the date of measurement, such 4 Fiscal Quarters to be selected by the Borrower, plus (ii) the sum of Consolidated Fixed Charges and taxes on income (including deferred taxes) for the same 4 Fiscal Quarters. "Environmental Authority" means any foreign, federal, state, local or regional government that exercises any form of jurisdiction or authority under any Environmental Requirement. "Environmental Authorizations" means all licenses, permits, orders, approvals, notices, registrations or other legal prerequisites for conducting the business of the Borrower or any Restricted Subsidiary required by any Environmental Requirement. "Environmental Judgments and Orders" means all judgments, decrees or orders arising from or in any way associated with any Environmental Requirements, whether or not entered upon consent, or written agreements with an Environmental Authority or other entity arising from or in any way associated with any Environmental Requirement, whether or not incorporated in a judgment, decree or order. "Environmental Liabilities" means any liabilities, whether accrued, contingent or otherwise, arising from and in any way associated with any Environmental Requirements. "Environmental Notices" means notice from any Environmental Authority or by any other person or entity, of possible or alleged noncompliance with or liability under any Environmental Requirement, including without limitation any complaints, citations, demands or requests from any Environmental Authority or from any other person or entity for correction of any violation of any Environmental Requirement or any investigations concerning any violation of any Environmental Requirement. "Environmental Proceedings" means any judicial or administrative proceedings arising from or in any way associated with any Environmental Requirement. "Environmental Releases" means releases as defined in CERCLA or under any applicable state or local environmental law or regulation. "Environmental Requirements" means any legal requirement relating to health, safety or the environment and applicable to the Borrower, any Restricted Subsidiary or the Properties, including but not limited to any such requirement 6 13 under CERCLA or similar state legislation and all federal, state and local laws, ordinances, regulations, orders, writs, decrees and common law. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, or any successor law. Any reference to any provision of ERISA shall also be deemed to be a reference to any successor provision or provisions thereof. "Euro-Dollar Borrowing" has the meaning set forth in the definition of Borrowing. "Euro-Dollar Business Day" means any Domestic Business Day on which dealings in Dollar deposits are carried out in the London interbank market. "Euro-Dollar Loan" means a Loan which bears or is to bear interest at a rate based upon the Adjusted London Interbank Offered Rate, and to be made as a Euro-Dollar Loan pursuant to the applicable Notice of Borrowing. "Euro-Dollar Reserve Percentage" has the meaning set forth in Section 2.06(c). "Event of Default" has the meaning set forth in Section 6.01. "Federal Funds Rate" means, for any day, the rate per annum (rounded upward, if necessary, to the next higher 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Domestic Business Day next succeeding such day, provided that (i) if the day for which such rate is to be determined is not a Domestic Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Domestic Business Day as so published on the next succeeding Domestic Business Day, and (ii) if such rate is not so published for any day, the Federal Funds Rate for such day shall be the average rate charged to Wachovia on such day on such transactions, as determined by the Agent. "Fiscal Quarter" means any fiscal quarter of the Borrower. "Fiscal Year" means any fiscal year of the Borrower. 7 14 "Fixed Rate Borrowing" means a Euro-Dollar Borrowing or a Money Market Borrowing, or either of them, as the context shall require. "Fixed Rate Loans" means Euro-Dollar Loans or Money Market Loans, or either of them, as the context shall require. "GAAP" means generally accepted accounting principles applied on a basis consistent with those which, in accordance with Section 1.02, are to be used in making the calculations for purposes of determining compliance with the terms of this Agreement. "Guaranty" means, with respect to any Person, any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any Indebtedness, dividends or other obligation of any other Person in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person: (a) to purchase such Indebtedness or obligation or any property constituting security therefore; (b) to advance or supply funds (i) for the purchase or payment of such Indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such Indebtedness or obligations; (c) to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such Indebtedness or obligation of the ability of any other Person to make payment of the Indebtedness or obligation; or (d) otherwise to assure the owner of such Indebtedness or obligations against loss in respect thereof. In any computation of the Indebtedness or other labilities of the obligor under any Guaranty, the Indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor. "Hazardous Materials" includes, without limitation, (a) solid or hazardous waste, as defined in the Resource Conservation and Recovery Act of 1980, 42 U.S.C. ss. 6901 et seq. and its implementing regulations and amendments, or in any applicable state or local law or regulation, (b) "hazardous substance", 8 15 "pollutant", or "contaminant" as defined in CERCLA, or in any applicable state or local law or regulation, (c) gasoline, or any other petroleum product or by-product, including, crude oil or any fraction thereof, (d) toxic substances, as defined in the Toxic Substances Control Act of 1976, or in any applicable state or local law or regulation and (e) insecticides, fungicides, or rodenticides, as defined in the Federal Insecticide, Fungicide, and Rodenticide Act of 1975, or in any applicable state or local law or regulation, as each such Act, statute or regulation may be amended from time to time. "Indebtedness" with respect to any Person means, at any time, without duplication, (a) its liabilities for borrowed money and its redemption obligations in respect of mandatorily redeemable Preferred Stock; (b) its liabilities for the deferred purchase price of property acquired by such Person (excluding accounts payable arising in the ordinary course of business but including all liabilities created or arising under any conditional sale or other title retention agreement with respect to any such property); (c) all liabilities appearing on its balance sheet in accordance with GAAP in respect of Capitalized Leases; (d) all liabilities for borrowed money secured by any Lien with respect to any property owned by such Person (whether or not it has assumed or otherwise become liable for such liabilities); (e) all its liabilities in respect of letters of credit or instruments serving a similar function issued or accepted for its account by banks and other financial institutions (whether or not representing obligations for borrowed money); (f) Swaps of such Person; and (g) any Guaranty of such Person with respect to liabilities of a type described in any clauses (a) through (f) hereof. "Interest Period" means: (1) with respect to each Euro-Dollar Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the first, second, third or sixth month thereafter, as the Borrower may elect in the applicable Notice of Borrowing; provided that: 9 16 (a) any Interest Period (subject to paragraph (c) below) which would otherwise end on a day which is not a Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Euro-Dollar Business Day; (b) any Interest Period which begins on the last Euro-Dollar Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the appropriate subsequent calendar month) shall, subject to paragraph (c) below, end on the last Euro-Dollar Business Day of the appropriate subsequent calendar month; and (c) no Interest Period may be selected which begins before the Termination Date and would otherwise end after the Termination Date. (2) with respect to each Base Rate Borrowing, the period commencing on the date of such Borrowing and ending 30 days thereafter (or, if sooner, on the Termination Date); provided that: (a) any Interest Period (subject to paragraph (b) below) which would otherwise end on a day which is not a Domestic Business Day shall be extended to the next succeeding Domestic Business Day; and (b) no Interest Period which begins before the Termination Date and would otherwise end after the Termination Date may be selected. (3) with respect to each Money Market Borrowing, the period commencing on the date of such Borrowing and ending on the Stated Maturity Date specified in the applicable Money Market Quote; provided that: (a) any Interest Period (subject to clause (b) below) which would otherwise end on a day which is not a Domestic Business Day shall be extended to the next succeeding Domestic Business Day; and (b) no Interest Period may be selected which begins before the Termination Date and would otherwise end after the Termination Date. "Investment" means any investment in any Person, whether by means of purchase or acquisition of obligations or securities of such Person, capital contribution to such Person, 10 17 loan or advance to such Person, making of a time deposit with such Person, Guaranty or assumption of any obligation of such Person or otherwise. "Keebler" means Keebler Foods Company, a Delaware corporation with its principal place of business in Elmhurst, Illinois. "Keebler Acquisition" means, collectively, the acquisition by the Borrower (i) from Artal Luxembourg S.A., pursuant to a Stock Purchase Agreement dated as of January 28, 1998, of an aggregate of 9,581,169 shares of common capital stock in Keebler, and (ii) from Bermore Limited, pursuant to a Stock Purchase and Stockholder's Agreement dated as of January 28, 1998, of an aggregate of 1,616,691 shares of common capital stock in Keebler, as a result of which, after giving effect to the Keebler Acquisition, the Borrower will own approximately 51% of the common capital stock of Keebler, on a fully diluted basis. "Lending Office" means, as to each Bank, its office located at its address set forth on the signature pages hereof (or identified on the signature pages hereof as its Lending Office) or such other office as such Bank may hereafter designate as its Lending Office by notice to the Borrower and the Agent. "Leverage Ratio" means the ratio of Consolidated Total Debt to Total Capitalization. "Lien" means, with respect to any asset, any mortgage, deed to secure debt, deed of trust, lien, pledge, charge, security interest, security title, preferential arrangement which has the practical effect of constituting a security interest or encumbrance, or encumbrance or servitude of any kind in respect of such asset to secure or assure payment of a Indebtedness or a Guaranty, whether by consensual agreement or by operation of statute or other law, or by any agreement, contingent or otherwise, to provide any of the foregoing. For the purposes of this Agreement, the Borrower or any Subsidiary shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, Capitalized Lease or other title retention agreement relating to such asset. "Loan" means a Base Rate Loan, Euro-Dollar Loan, Syndicated Loan, or Money Market Loan, and "Loans" means Base Rate Loans, Euro-Dollar Loans, Syndicated Loans, Money Market Loans, or any or all of them, as the context shall require. "Loan Documents" means this Agreement, the Notes, any other document evidencing, relating to or securing the Loans, and 11 18 any other document or instrument delivered from time to time in connection with this Agreement, the Notes or the Loans, as such documents and instruments may be amended or supplemented from time to time. "London Interbank Offered Rate" has the meaning set forth in Section 2.06(c). "Margin Stock" means "margin stock" as defined in Regulations G, T, U or X. "Material Adverse Effect" means, with respect to any event, act, condition or occurrence of whatever nature (including any adverse determination in any litigation, arbitration, or governmental investigation or proceeding), whether singly or in conjunction with any other event or events, act or acts, condition or conditions, occurrence or occurrences, whether or not related, a material adverse change in, or a material adverse effect upon, any of (a) the financial condition, operations, business or properties of the Borrower and its Consolidated Subsidiaries taken as a whole, (b) the rights and remedies of the Agent or the Banks under the Loan Documents, or the ability of the Borrower to perform its obligations under the Loan Documents to which it is a party, as applicable, or (c) the legality, validity or enforceability of any Loan Document. "Material Subsidiary" means, as of each date of determination, any Restricted Subsidiary that would at such time constitute a "significant subsidiary" (as such term is defined in Regulation S-X of the Securities and Exchange Commission as in effect on the Closing Date) of the Borrower. "Money Market Borrowing" has the meaning set forth in the definition of Borrowing. "Money Market Borrowing Date" has the meaning specified in Section 2.03. "Money Market Loan Notes" means the promissory notes of the Borrower, substantially in the form of Exhibit A-2, evidencing the obligation of the Borrower to repay the Money Market Loans, together with all amendments, consolidations, modifications, renewals and supplements thereto. "Money Market Quote" has the meaning specified in Section 2.03. "Money Market Quote Request" has the meaning specified in Section 2.03(b). 12 19 "Money Market Rate" has the meaning specified in Section 2.03(c)(ii)(C). "Multiemployer Plan" shall have the meaning set forth in Section 4001(a)(3) of ERISA. "Net Income" means, as applied to any Person for any period, the aggregate amount of net income of such Person, after taxes, for such period, as determined in accordance with GAAP. "Net Proceeds of Capital Stock" means any proceeds received by the Borrower or a Consolidated Subsidiary in respect of the issuance of Capital Stock, after deducting therefrom all reasonable and customary costs and expenses incurred by the Borrower or such Consolidated Subsidiary directly in connection with the issuance of such Capital Stock. "Net Worth" of any Person means the Total Assets of such Person less all liabilities of such Person which would be shown as liabilities on a balance sheet of such Person as of such time prepared in accordance with GAAP. "Next Public Offering" means the first public issuance of its Capital Stock by the Borrower occurring after the Closing Date. "Notes" means each of the Syndicated Loan Notes or Money Market Loan Notes, or any or all of them, as the context shall require. "Notice of Borrowing" has the meaning set forth in Section 2.02. "Officer's Certificate" has the meaning set forth in Section 3.01(f). "Operating Profits" means, as applied to any Person for any period, the operating income of such Person for such period, as determined in accordance with GAAP. "Original Agreement" has the meaning set forth in the preamble hereto. "Original Notes" means the "Notes" executed and delivered pursuant to the Original Agreement. "Participant" has the meaning set forth in Section 9.08(b). 13 20 "PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA. "Performance Pricing Determination Date" has the meaning set forth in Section 2.06(a). "Permitted Keebler Investments" means: (i) the Keebler Acquisition; and (ii) provided that the Keebler Acquisition has been consummated, additional shares of common capital stock in Keebler acquired from time to time (a) from third parties in the open market, (b) from Bermore, Limited and Artal Luxembourg S.A. in private transactions, (c) from management of Keebler in private transactions and/or (d) from Keebler as part of an offering of stock by Keebler (whether public or private), but in the case of this clause (d), only to the extent necessary for the Borrower to maintain ownership of at least 51% of the common capital stock of Keebler, on a fully diluted basis. "Person" means an individual, a corporation, a partnership, an unincorporated association, a trust or any other entity or organization, including, but not limited to, a government or political subdivision or an agency or instrumentality thereof. "Plan" means at any time an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and is either (i) maintained by a member of the Controlled Group for employees of any member of the Controlled Group or (ii) maintained pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to which a member of the Controlled Group is then making or accruing an obligation to make contributions or has within the preceding 5 plan years made contributions. "Preferred Stock" means any class of capital stock of a corporation that is preferred over any other class of capital stock of such corporation as to the payment of dividends or the payment of any amount upon liquidation or dissolution of such corporation. "Prime Rate" refers to that interest rate so denominated and set by Wachovia from time to time as an interest rate basis for borrowings. The Prime Rate is but one of several interest rate bases used by Wachovia. Wachovia lends at interest rates above and below the Prime Rate. 14 21 "Properties" means all real property owned, leased or otherwise used or occupied by the Borrower or any Restricted Subsidiary, wherever located. "Refunding Loan" means a new Syndicated Loan made on the day on which an outstanding Syndicated Loan is maturing or a Base Rate Borrowing is being converted to a Fixed Rate Borrowing, if and to the extent that the proceeds thereof are used entirely for the purpose of paying such maturing Loan or Loan being converted, excluding any difference between the amount of such maturing Loan or Loan being converted and any greater amount being borrowed on such day and actually either being made available to the Borrower pursuant to Section 2.02(c) or remitted to the Agent as provided in Section 2.12, in each case as contemplated in Section 2.02(d). "Regulation G" means Regulation G of the Board of Governors of the Federal Reserve System, as in effect from time to time, together with all official rulings and interpretations issued thereunder. "Regulation T" means Regulation T of the Board of Governors of the Federal Reserve System, as in effect from time to time, together with all official rulings and interpretations issued thereunder. "Regulation U" means Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time, together with all official rulings and interpretations issued thereunder. "Regulation X" means Regulation X of the Board of Governors of the Federal Reserve System, as in effect from time to time, together with all official rulings and interpretations issued thereunder. "Required Banks" means at any time Banks having at least 66 2/3% of the aggregate amount of the Commitments or, if the Commitments are no longer in effect, Banks holding at least 66 2/3% of the aggregate outstanding principal amount of the sum of the (i) Syndicated Loans and (ii) Money Market Loans. "Responsible Officer" means the chief financial officer, principal accounting officer, treasurer or comptroller of the Borrower, and any other officer of the Borrower with responsibility for the administration of the relevant portion of this Agreement. 15 22 "Restricted Subsidiary" of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary. "Stated Maturity Date" means, with respect to any Money Market Loan, the Stated Maturity Date therefor specified by the Bank in the applicable Money Market Quote. "Subsidiary" means any corporation or other entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by the Borrower; provided, for purposes of the definition of Unrestricted Subsidiary, the definitions of financial terms, and Sections 5.18 and 5.21, Keebler shall be deemed to be a Subsidiary only so long as the Borrower owns at least a majority of the securities or other ownership interests in Keebler having such ordinary voting power. "Swaps" means, with respect to any Person, payment obligations with respect to interest rate swaps, currency swaps and similar obligations obligating such Person to make payments, whether periodically or upon the happening of a contingency. For the purposes of this Agreement, the amount of the obligation under any Swap shall be the amount determined in respect thereof as of the end of the then most recently ended Fiscal Quarter of such Person, based on the assumption that such Swap had terminated at the end of such Fiscal Quarter, and in making such determination, if any agreement relating to such Swap provides for the netting of amounts payable by and to such Person thereunder or if any such agreement provides for the simultaneous payment of amounts by and to such Person, then in each such case, the amount of such obligation shall be the net amount so determined. "Syndicated Borrowing" has the meaning set forth in the definition of Borrowing. "Syndicated Loans" means Base Rate Loans or Euro-Dollar Loans made pursuant to the terms and conditions set forth in Section 2.01. "Syndicated Loan Notes" means the promissory notes of the Borrower, substantially in the form of Exhibit A-1, evidencing the obligation of the Borrower to repay Syndicated Loans, together with all amendments, consolidations, modifications, renewals and supplements thereto. "Taxes" has the meaning set forth in Section 2.12(c). 16 23 "Termination Date" means whichever is applicable of (i) January 29, 2003, (ii) such later date to which it is extended by the Banks pursuant to Section 2.05(b), in their sole and absolute discretion, (iii) the date the Commitments are terminated pursuant to Section 6.01 following the occurrence of an Event of Default, or (iv) the date the Borrower terminates the Commitments entirely pursuant to Section 2.08. "Third Parties" means all lessees, sublessees, licensees and other users of the Properties, excluding those users of the Properties in the ordinary course of the Borrower's business and on a temporary basis. "Total Assets" means, with respect to any Person at any time, the total assets of such Person as set forth or reflected on the most recent consolidated balance sheet of such Person, prepared in accordance with GAAP. "Total Capitalization" means the sum of (i) Consolidated Total Debt and (ii) Consolidated Net Worth. "Transferee" has the meaning set forth in Section 9.08(d). "Unfunded Vested Liabilities" means, with respect to any Plan at any time, the amount (if any) by which (i) the present value of all vested nonforfeitable benefits under such Plan exceeds (ii) the fair market value of all Plan assets allocable to such benefits, all determined as of the then most recent valuation date for such Plan, but only to the extent that such excess represents a potential liability of a member of the Controlled Group to the PBGC or the Plan under Title IV of ERISA. "Unrestricted Subsidiary" means, following the Keebler Acquisition and thereafter so long as Keebler is a Subsidiary, Keebler, or any of its Subsidiaries, and "Unrestricted Subsidiaries" means, collectively, Keebler and its Subsidiaries. "Unused Commitment" means at any date, with respect to any Bank, an amount equal to its Commitment less the aggregate outstanding principal amount of its Syndicated Loans (but not its Money Market Loans). "Wachovia" means Wachovia Bank, N.A., a national banking association, and its successors. "Wholly Owned Subsidiary" means any Subsidiary all of the shares of capital stock or other ownership interests of which (except directors' qualifying shares) are at the time directly or indirectly owned by the Borrower. 17 24 SECTION 1.02. Accounting Terms and Determinations. Unless otherwise specified herein, all terms of an accounting character used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared, in accordance with GAAP, applied on a basis consistent (except for changes concurred in by the Borrower's independent public accountants or otherwise required by a change in GAAP) with the most recent audited consolidated financial statements of the Borrower and its Consolidated Subsidiaries delivered to the Banks unless with respect to any such change concurred in by the Borrower's independent public accountants or required by GAAP, in determining compliance with any of the provisions of this Agreement or any of the other Loan Documents: (i) the Borrower shall have objected to determining such compliance on such basis at the time of delivery of such financial statements, or (ii) the Required Banks shall so object in writing within 30 days after the delivery of such financial statements, in either of which events such calculations shall be made on a basis consistent with those used in the preparation of the latest financial statements as to which such objection shall not have been made (which, if objection is made in respect of the first financial statements delivered under Section 5.01 hereof, shall mean the financial statements referred to in Section 4.04). SECTION 1.03. References. Unless otherwise indicated, references in this Agreement to "Articles", "Exhibits", "Schedules", "Sections" and other Subdivisions are references to articles, exhibits, schedules, sections and other subdivisions hereof. SECTION 1.04. Use of Defined Terms. All terms defined in this Agreement shall have the same defined meanings when used in any of the other Loan Documents, unless otherwise defined therein or unless the context shall require otherwise. SECTION 1.05. Terminology. All personal pronouns used in this Agreement, whether used in the masculine, feminine or neuter gender, shall include all other genders; the singular shall include the plural, and the plural shall include the singular. Titles of Articles and Sections in this Agreement are for convenience only, and neither limit nor amplify the provisions of this Agreement. ARTICLE II THE CREDITS 18 25 SECTION 2.01. Commitments to Lend Syndicated Loans. Each Bank severally agrees, on the terms and conditions set forth herein, to make Syndicated Loans to the Borrower from time to time before the Termination Date; provided that, (i) immediately after each such Syndicated Loan is made, the aggregate outstanding principal amount of Syndicated Loans by such Bank shall not exceed the amount of its Commitment, and (ii) the aggregate outstanding principal amount of all Syndicated Loans and Money Market Loans shall not exceed the aggregate amount of the Commitments. Each Syndicated Borrowing under this Section shall be in an aggregate principal amount of (i) for Euro-Dollar Loans, $10,000,000 or any larger integral multiple of $5,000,000, and (ii) for Base Rate Loans, $5,000,000 or any larger integral multiple of $1,000,000 (except in each case that any such Syndicated Borrowing may be in the aggregate amount of the Unused Commitments), and shall be made from the several Banks ratably in proportion to their respective Commitments. Within the foregoing limits, the Borrower may borrow under this Section, repay or, to the extent permitted by Section 2.10, prepay Syndicated Loans and reborrow under this Section at any time before the Termination Date. SECTION 2.02. Method of Borrowing Syndicated Loans. (a) The Borrower shall give the Agent notice (a "Notice of Borrowing"), which shall be substantially in the form of Exhibit E, prior to 11:00 A.M. (Atlanta, Georgia time) on the same Domestic Business Day as each Base Rate Borrowing and at least 3 Euro-Dollar Business Days before each Euro-Dollar Borrowing, specifying: (i) the date of such Syndicated Borrowing, which shall be a Domestic Business Day in the case of a Base Rate Borrowing or a Euro-Dollar Business Day in the case of a Euro-Dollar Borrowing, (ii) the aggregate amount of such Syndicated Borrowing, (iii) whether the Syndicated Loans comprising such Borrowing are to be Base Rate Loans or Euro-Dollar Loans, and (iv) in the case of a Euro-Dollar Borrowing, the duration of the Interest Period applicable thereto, subject to the provisions of the definition of Interest Period. 19 26 (b) Upon receipt of a Notice of Borrowing, the Agent shall promptly notify each Bank of the contents thereof and of such Bank's ratable share of such Syndicated Borrowing and such Notice of Borrowing, once received by the Agent, shall not thereafter be revocable by the Borrower. (c) Not later than (i) as to Base Rate Loans, 2:00 P.M. (Atlanta, Georgia time), and (ii) as to Euro-Dollar Loans, 11:00 A.M., (Atlanta, Georgia time) on the date of each Syndicated Borrowing, each Bank shall (except as provided in paragraph (d) of this Section) make available its ratable share of such Syndicated Borrowing, in Federal or other funds immediately available in Atlanta, Georgia, to the Agent at its address determined pursuant to Section 9.01. Unless the Agent determines that any applicable condition specified in Article III has not been satisfied, the Agent will make the funds so received from the Banks available to the Borrower on such date by depositing the same, in immediately available funds, not later than 4:00 p.m. (Atlanta, Georgia time), in an account of the Borrower maintained with Wachovia. Unless the Agent receives notice from a Bank, at the Agent's address referred to in or specified pursuant to Section 9.01, no later than 4:00 P.M. (local time at such address) on the Domestic Business Day before the date of a Syndicated Borrowing stating that such Bank will not make a Syndicated Loan in connection with such Syndicated Borrowing, the Agent shall be entitled to assume that such Bank will make a Syndicated Loan in connection with such Syndicated Borrowing and, in reliance on such assumption, the Agent may (but shall not be obligated to) make available such Bank's ratable share of such Syndicated Borrowing to the Borrower for the account of such Bank. If the Agent makes such Bank's ratable share available to the Borrower and such Bank does not in fact make its ratable share of such Syndicated Borrowing available on such date, the Agent shall be entitled to recover such Bank's ratable share from such Bank or the Borrower (and for such purpose shall be entitled to charge such amount to any account of the Borrower maintained with the Agent), together with interest thereon for each day during the period from the date of such Syndicated Borrowing until such sum shall be paid in full at a rate per annum equal to the rate at which the Agent determines that it obtained (or could have obtained) overnight Federal funds to cover such amount for each such day during such period, provided that (i) any such payment by the Borrower of such Bank's ratable share and interest thereon shall be without prejudice to any rights that the Borrower may have against such Bank and (ii) until such Bank has paid its ratable share of such Syndicated Borrowing, together with interest pursuant to the foregoing, it will have no interest in or rights with respect to such Syndicated Borrowing for any purpose hereunder. If the Agent does not exercise its option to 20 27 advance funds for the account of such Bank, it shall forthwith notify the Borrower of such decision. (d) If any Bank makes a new Syndicated Loan hereunder on a day on which the Borrower is to repay all or any part of an outstanding Syndicated Loan from such Bank, such Bank shall apply the proceeds of its new Syndicated Loan to make such repayment as a Refunding Loan and only an amount equal to the difference (if any) between the amount being borrowed and the amount of such Refunding Loan shall be made available by such Bank to the Agent as provided in paragraph (c) of this Section, or remitted by the Borrower to the Agent as provided in Section 2.12, as the case may be. (e) Notwithstanding anything to the contrary contained in this Agreement, no Fixed Rate Borrowing may be made if there shall have occurred a Default or an Event of Default, which Default or Event of Default shall not have been cured or waived, and in such case all Refunding Loans shall be made as Base Rate Loans (but shall bear interest at the Default Rate, if applicable). (f) In the event that a Notice of Borrowing fails to specify whether the Syndicated Loans comprising such Syndicated Borrowing are to be Base Rate Loans or Euro-Dollar Loans, such Syndicated Loans shall be made as Base Rate Loans. If the Borrower is otherwise entitled under this Agreement to repay any Syndicated Loans maturing at the end of an Interest Period applicable thereto with the proceeds of a new Borrowing, and the Borrower fails to repay such Syndicated Loans using its own moneys and fails to give a Notice of Borrowing in connection with such new Syndicated Borrowing, a new Syndicated Borrowing shall be deemed to be made on the date such Syndicated Loans mature in an amount equal to the principal amount of the Syndicated Loans so maturing, and the Syndicated Loans comprising such new Syndicated Borrowing shall be Base Rate Loans. (g) Notwithstanding anything to the contrary contained herein, there shall not be more than 10 Fixed Rate Borrowings outstanding at any given time. SECTION 2.03. Money Market Loans. (a) In addition to making Syndicated Borrowings, the Borrower may, as set forth in this Section 2.03, request the Banks to make offers to make Money Market Borrowings available to the Borrower. The Banks may, but shall have no obligation to, make such offers and the Borrower may, but shall have no obligation to, accept any such offers in the manner set forth in this Section 2.03, provided that: 21 28 (i) the number of Money Market Borrowings which may be outstanding at any given time is subject to the provisions of Section 2.02(g); (ii) the aggregate principal amount of all Money Market Loans, together with the aggregate principal amount of all Syndicated Loans, at any one time outstanding shall not exceed the aggregate amount of the Commitments of all of the Banks at such time; and (iii) the Money Market Loans of any Bank will be deemed to be usage of the Commitments for the purpose of calculating availability pursuant to Section 2.01(ii) and 2.03(a)(ii), but will not reduce such Bank's obligation to lend its pro rata share of the remaining Unused Commitment. (b) When the Borrower wishes to request offers to make MoneyMarket Loans, it shall give the Agent (which shall promptly notify the Banks) notice substantially in the form of Exhibit I hereto (a "Money Market Quote Request") so as to be received no later than 11:00 A.M. (Atlanta, Georgia time) at least 1 Domestic Business Day prior to the date of the Money Market Borrowing proposed therein (or such other time and date as the Borrower and the Agent, with the consent of the Required Banks, may agree), specifying: (i) the proposed date of such Money Market Borrowing, which shall be a Euro-Dollar Business Day (the "Money Market Borrowing Date"); (ii) the maturity date (or dates) (each a "Stated Maturity Date") for repayment of each Money Market Loan to be made as part of such Money Market Borrowing (which Stated Maturity Date shall be that date occurring not less than 7 days but not more than 180 days from the date of such Money Market Borrowing); provided that the Stated Maturity Date for any Money Market Loan may not extend beyond the Termination Date (as in effect on the date of such Money Market Quote Request); and (iv) the aggregate amount of principal to be requested by the Borrower as a result of such Money Market Borrowing, which shall be at least $10,000,000 (and in larger integral multiples of $5,000,000) but shall not cause the limits specified in Section 2.03(a) to be violated. The Borrower may request offers to make Money Market Loans having up to 2 different Stated Maturity Dates in a single Money Market Quote Request; provided that the request for each separate Stated Maturity Date shall be deemed to be a separate Money Market Quote 22 29 Request for a separate Money Market Borrowing. Except as otherwise provided in the immediately preceding sentence, after the first Money Market Quote Request has been given hereunder, no Money Market Quote Request shall be given until at least 5 Domestic Business Days after all prior Money Market Quote Requests have been fully processed ("fully processed" as used in this sentence shall mean the later to occur of (i) the failure of all Banks timely to offer a Money Market Quote, (ii) the failure of the Borrower timely to accept any Money Market Quote, or (iii) the timely acceptance of any Money Market Quotes) by the Agent, the Banks and the Borrower pursuant to this Section 2.03. (c) (i) Each Bank may, but shall have no obligation to, submit a response containing an offer to make a Money Market Loan substantially in the form of Exhibit J hereto (a "Money Market Quote") in response to any Money Market Quote Request; provided that, if the Borrower's request under Section 2.03(b) specified more than 1 Stated Maturity Date, such Bank may, but shall have no obligation to, make a single submission containing a separate offer for each such Stated Maturity Date and each such separate offer shall be deemed to be a separate Money Market Quote. Each Money Market Quote must be submitted to the Agent not later than 10:00 A.M. (Atlanta, Georgia time) on the Money Market Borrowing Date; provided that any Money Market Quote submitted by Wachovia may be submitted, and may only be submitted, if Wachovia notifies the Borrower of the terms of the offer contained therein not later than 9:45 A.M. (Atlanta, Georgia time) on the Money Market Borrowing Date (or 15 minutes prior to the time that the other Banks are required to have submitted their respective Money Market Quotes). Subject to Section 6.01, any Money Market Quote so made shall be irrevocable except with the written consent of the Agent given on the instructions of the Borrower. (ii) Each Money Market Quote shall specify: (A) the proposed Money Market Borrowing Date and the Stated Maturity Date therefor; (B) the principal amounts of the Money Market Loan which the quoting Bank is willing to make for the applicable Money Market Quote, which principal amounts (x) may be greater than or less than the Commitment of the quoting Bank, (y) shall be at least $5,000,000 or a larger integral multiple of $500,000, and (z) may not exceed the principal amount of the Money Market Borrowing for which offers were requested; 23 30 (C) the rate of interest per annum (rounded upwards, if necessary, to the nearest 1/100th of 1%) offered for each such Money Market Loan (such amounts being hereinafter referred to as the "Money Market Rate"); and (D) the identity of the quoting Bank. Unless otherwise agreed by the Agent and the Borrower, no Money Market Quote shall contain qualifying, conditional or similar language or propose terms other than or in addition to those set forth in the applicable Money Market Quote Request (other than setting forth the principal amounts of the Money Market Loan which the quoting Bank is willing to make for the applicable Interest Period) and, in particular, no Money Market Quote may be conditioned upon acceptance by the Borrower of all (or some specified minimum) of the principal amount of the Money Market Loan for which such Money Market Quote is being made. (d) The Agent shall as promptly as practicable after the Money Market Quote is submitted (but in any event not later than 10:30 A.M. (Atlanta, Georgia time)) on the Money Market Borrowing Date, notify the Borrower of the terms (i) of any Money Market Quote submitted by a Bank that is in accordance with Section 2.03(c) and (ii) of any Money Market Quote that amends, modifies or is otherwise inconsistent with a previous Money Market Quote submitted by such Bank with respect to the same Money Market Quote Request. Any such subsequent Money Market Quote shall be disregarded by the Agent unless such subsequent Money Market Quote is submitted solely to correct a manifest error in such former Money Market Quote. The Agent's notice to the Borrower shall specify (A) the principal amounts of the Money Market Borrowing for which offers have been received and (B) the respective principal amounts and Money Market Rates so offered by each Bank (identifying the Bank that made each Money Market Quote). (e) Not later than 11:00 A.M. (Atlanta, Georgia time) on the Money Market Borrowing Date, the Borrower shall notify the Agent of its acceptance or nonacceptance of the offers so notified to it pursuant to Section 2.03(d) and the Agent shall promptly notify each Bank which submitted an offer. In the case of acceptance, such notice shall specify the aggregate principal amount of offers (for each Stated Maturity Date) that are accepted. The Borrower may accept any Money Market Quote in whole or in part; provided that: 24 31 (i) the aggregate principal amount of each Money Market Borrowing may not exceed the applicable amount set forth in the related Money Market Quote Request; (ii) the aggregate principal amount of each Money Market Loan comprising a Money Market Borrowing shall be at least $10,000,000 (and in larger integral multiples of $5,000,000) but shall not cause the limits specified in Section 2.03(a) to be violated; (iii) acceptance of offers may only be made in ascending order of Money Market Rates; and (iv) the Borrower may not accept any offer where the Agent has advised the Borrower that such offer fails to comply with Section 2.03(c)(ii) or otherwise fails to comply with the requirements of this Agreement (including without limitation, Section 2.03(a)). If offers are made by 2 or more Banks with the same Money Market Rates for a greater aggregate principal amount than the amount in respect of which offers are accepted for the related Stated Maturity Date, the principal amount of Money Market Loans in respect of which such offers are accepted shall be allocated by the Borrower among such Banks as nearly as possible in proportion to the aggregate principal amount of such offers. Determinations by the Borrower of the amounts of Money Market Loans shall be conclusive in the absence of manifest error. (f) Any Bank whose offer to make any Money Market Loan has been accepted shall, not later than 12:00 P.M. (Atlanta, Georgia time) on the Money Market Borrowing Date, make the amount of such Money Market Loan allocated to it available to the Agent at its address referred to in Section 9.01 in immediately available funds. The amount so received by the Agent shall, subject to the terms and conditions of this Agreement, be made available to the Borrower on such date by depositing the same, in immediately available funds, not later than 4:00 P.M. (Atlanta, Georgia time), in an account of the Borrower maintained with Wachovia. (g) After any Money Market Loan has been funded, the Agent shall notify the Banks of the aggregate principal amount of the Money Market Quotes received and the highest and lowest rates included in such Money Market Quotes. SECTION 2.04. Notes. (a) The Syndicated Loans of each Bank shall be evidenced by a single Syndicated Loan Note payable to the order of such Bank for the account of its Lending Office 25 32 in an amount equal to the original principal amount of such Bank's Commitment. (b) The Money Market Loans made by any Bank to the Borrower shall be evidenced by a single Money Market Loan Note payable to the order of such Bank for the account of its Lending Office in an amount equal to the original principal amount of the aggregate Commitments. (c) Upon receipt of each Bank's Notes pursuant to Section 3.01, the Agent shall deliver such Notes to such Bank. Each Bank shall record, and prior to any transfer of its Notes shall endorse on the schedules forming a part thereof appropriate notations to evidence, the date, amount and maturity of, and effective interest rate for, each Loan made by it, the date and amount of each payment of principal made by the Borrower with respect thereto, and such schedules of each such Bank's Notes shall constitute rebuttable presumptive evidence of the respective principal amounts owing and unpaid on such Bank's Notes; provided that the failure of any Bank to make, or any error in making, any such recordation or endorsement shall not affect the obligation of the Borrower hereunder or under the Notes or the ability of any Bank to assign its Notes. Each Bank is hereby irrevocably authorized by the Borrower so to endorse its Notes and to attach to and make a part of any Note a continuation of any such schedule as and when required. SECTION 2.05. Maturity of Loans. (a) Each Loan included in any Borrowing shall mature, and the principal amount thereof shall be due and payable, on the last day of the Interest Period applicable to such Borrowing. (b) Notwithstanding the foregoing, the outstanding principal amount of the Loans, if any, together with all accrued but unpaid interest thereon, if any, shall be due and payable on January 29, 2003, unless the Termination Date is otherwise extended by the Required Banks, as provided below, in their sole and absolute discretion. Upon the written request of the Borrower, which request shall be delivered to the Agent at least 30 days prior to each Extension Date (as such term is hereinafter defined), the Banks shall have the option (without any obligation whatsoever so to do) of extending the Termination Date for additional one-year periods on each of January 29, 2001 and January 29, 2002 (each, an "Extension Date"). In the event that a Bank chooses not to extend the Termination Date for such an additional one-year period, notice shall be given by such Bank to the Borrower and the Agent at least 15 days prior to the relevant Extension Date; provided, that (i) if any Bank fails to send notice of any such extension, such Bank shall be deemed to have declined to extend, and (ii) the Termination Date shall not be 26 33 extended with respect to any of the Banks unless the Required Banks are willing to extend the Termination Date and (x) on the Extension Date, the remaining Banks shall purchase ratable assignments (without any obligation so to do) from such terminating Bank (in the form of an Assignment and Acceptance) in accordance with their respective percentage of the remaining aggregate Commitments; provided, that, such Banks shall be provided such opportunity (which opportunity shall allow such Banks at least 5 Domestic Business Days in which to make a decision) prior to the Borrower finding another bank pursuant to the immediately succeeding clause (y); and, provided, further, that, should any of the remaining Banks elect not to purchase such an assignment, then, such other remaining Banks shall be entitled, on the Extension Date, to purchase an assignment from any terminating Bank which includes the ratable interest that was otherwise available to such non-purchasing remaining Bank or Banks, as the case may be, (y) the Borrower shall find another bank, acceptable to the Agent, willing to accept, on the Extension Date, an assignment from such terminating Bank (in the form of an Assignment and Acceptance) or (z) on the Extension Date, the Borrower shall reduce the aggregate Commitments in an amount equal to the Commitment of any such terminating Bank. Notwithstanding the foregoing, if the Termination Date is not extended for an additional one year period on or before January 29, 2001, then the Borrower may not request that the Termination Date be extended for an additional one year period on January 29, 2002. SECTION 2.06. Interest Rates. (a) "Applicable Margin" means: (i) for the period commencing on the Closing Date to and including the first Performance Pricing Determination Date, (x) for any Base Rate Loan, 0%, and (y) for any Euro-Dollar Loan, 0.475%; and (ii) from and after the first Performance Pricing Determination Date, (x) for any Base Rate Loan, 0.0%, and (y) for any Euro- Dollar Loan, the percentage determined on each Performance Pricing Determination Date by reference to the table set forth below as to such type of Loan and the Leverage Ratio for the quarterly or annual period ending immediately prior to such Performance Pricing Determination Date. 27 34
Leverage Ratio Applicable Margin -------------- ----------------- < 35% 0.175% - > 35% but < 55% 0.25% - > 55% but < 65% 0.38% - > 65% 0.475%
In determining interest for purposes of this Section 2.06 and fees for purposes of Section 2.07, the Borrower and the Banks shall refer to the Borrower's most recent consolidated quarterly and annual (as the case may be) financial statements delivered pursuant to Section 5.01(a) or (b), as the case may be. If such financial statements require a change in interest pursuant to this Section 2.06 or fees pursuant to Section 2.07, the Borrower shall deliver to the Agent, along with such financial statements, a notice to that effect, which notice shall set forth in reasonable detail the calculations supporting the required change. The "Performance Pricing Determination Date" is the date which is the last date on which such financial statements are permitted to be delivered pursuant to Section 5.01(a) or (b), as applicable. Any such required change in interest and fees shall become effective on such Performance Pricing Determination Date, and shall be in effect until the next Performance Pricing Determination Date, provided that: (i) for Euro-Dollar Loans, changes in interest shall only be effective for Interest Periods commencing on or after the Performance Pricing Determination Date; and (ii) no fees or interest shall be decreased pursuant to this Section 2.06 or Section 2.07 if a Default is in existence on the Performance Pricing Determination Date. (b) Each Base Rate Loan shall bear interest on the outstanding principal amount thereof, for each day from the date such Loan is made until it becomes due, at a rate per annum equal to the Base Rate for such day plus the Applicable Margin. Such interest shall be payable for each Interest Period on the last day thereof. Any overdue principal of and, to the extent permitted by applicable law, overdue interest on any Base Rate Loan shall bear interest, payable on demand, for each day until paid at a rate per annum equal to the Default Rate. (c) Each Euro-Dollar Loan shall bear interest on the outstanding principal amount thereof, for the Interest Period applicable thereto, at a rate per annum equal to the sum of the Applicable Margin plus the applicable Adjusted London Interbank 28 35 Offered Rate for such Interest Period. Such interest shall be payable for each Interest Period on the last day thereof and, if such Interest Period is longer than 3 months, at intervals of 3 months after the first day thereof. Any overdue principal of and, to the extent permitted by law, overdue interest on any Euro-Dollar Loan shall bear interest, payable on demand, for each day until paid at a rate per annum equal to the Default Rate. The "Adjusted London Interbank Offered Rate" applicable to any Interest Period means a rate per annum equal to the quotient obtained (rounded upwards, if necessary, to the next higher 1/100th of 1%) by dividing (i) the applicable London Interbank Offered Rate for such Interest Period by (ii) 1.00 minus the Euro-Dollar Reserve Percentage. The "London Interbank Offered Rate" applicable to any Euro-Dollar Loan means for the Interest Period of such Euro-Dollar Loan, the rate per annum determined on the basis of the offered rate for deposits in Dollars of amounts equal or comparable to the principal amount of such Euro-Dollar Loan offered for a term comparable to such Interest Period, which rates appear on the Telerate Page 3750 effective as of 11:00 A.M., London time, 2 Euro-Dollar Business Days prior to the first day of such Interest Period, provided that if no such offered rates appear on such page, the "London Interbank Offered Rate" for such Interest Period will be the arithmetic average (rounded upward, if necessary, to the next higher 1/100th of 1%) of rates quoted by not less than 2 major banks in New York City, selected by the Agent, at approximately 10:00 A.M., New York City time, 2 Euro-Dollar Business Days prior to the first day of such Interest Period, for deposits in Dollars offered by leading European banks for a period comparable to such Interest Period in an amount comparable to the principal amount of such Euro-Dollar Loan. "Euro-Dollar Reserve Percentage" means for any day that percentage (expressed as a decimal) which is in effect on such day, as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement for a member bank of the Federal Reserve System in respect of "Eurocurrency liabilities" (or in respect of any other category of liabilities which includes deposits by reference to which the interest rate on Euro-Dollar Loans is determined or any category of extensions of credit or other assets which includes loans by a non-United States office of any Bank to United States residents). The Adjusted London Interbank Offered Rate shall be adjusted automatically on and as of the effective date of any change in the Euro-Dollar Reserve Percentage. 29 36 (d) Each Money Market Loan shall bear interest on the outstanding principal amount thereof, for each day from the date such Money Market Loan is made until it becomes due, at a rate per annum equal to the applicable Money Market Rate set forth in the relevant Money Market Quote. Such interest shall be payable on the Stated Maturity Date thereof, and, if the Stated Maturity Date occurs more than 90 days after the date of the relevant Money Market Loan, at intervals of 90 days after the first day thereof. Any overdue principal of and, to the extent permitted by law, overdue interest on any Money Market Loan shall bear interest, payable on demand, for each day until paid at a rate per annum equal to the Default Rate. (e) The Agent shall, subject to the provisions of Section 2.03 with respect to Money Market Loans, determine each interest rate applicable to the Loans hereunder. The Agent shall give prompt notice to the Borrower and the Banks by telecopier of each rate of interest so determined, and its determination thereof shall be conclusive in the absence of manifest error. (f) After the occurrence and during the continuance of an Event of Default, the principal amount of the Loans (and, to the extent permitted by applicable law, all accrued interest thereon) shall bear interest at the Default Rate and shall be payable on demand. SECTION 2.07. Fees. (a) The Borrower shall pay to the Agent, for the ratable account of each Bank, a facility fee, calculated in the manner provided in the last paragraph of Section 2.06(a)(ii), on the aggregate amount of such Bank's Commitment (without taking into account the amount of the outstanding Loans made by such Bank), at a rate per annum equal to: (i) for the period commencing on the Closing Date to and including the first Performance Pricing Determination Date, 0.225%; and (ii) from and after the first Performance Pricing Determination Date, the percentage determined on each Performance Pricing Determination Date by reference to the table set forth below and the Leverage Ratio for the quarterly or annual period ending immediately prior to such Performance Pricing Determination Date: 30 37
Leverage Ratio Facility Fee -------------- ------------ < 35% 0.075% - > 35% but < 55% 0.125% - > 55% but < 65% 0.17% - > 65% 0.225%
Such facility fees shall accrue from and including the Closing Date to (but excluding the Termination Date) and shall be payable in arrears on each March 31, June 30, September 30 and December 31 and on the Termination Date, commencing on March 31, 1998. (b) The Borrower shall pay to the Agent, for the account and sole benefit of the Agent, such fees and other amounts at such times as set forth in the Agent's Letter Agreement. SECTION 2.08. Optional Termination or Reduction of Commitments. The Borrower may, upon at least 3 Domestic Business Days' notice to the Agent, terminate at any time, or proportionately reduce all or any part of the Unused Commitments, after deducting therefrom the aggregate amount of any outstanding Money Market Loans, from time to time by an aggregate amount of at least $10,000,000 or any larger integral multiple of $5,000,000. If the Commitments are terminated in their entirety, all accrued fees (as provided under Section 2.07) shall be due and payable on the effective date of such termination. SECTION 2.09. Mandatory Reduction and Termination of Commitments. (a) If, upon a transfer of assets or the discontinuance or elimination of a Subsidiary or division (in a single transaction or in a series of related transactions), the aggregate assets so transferred or utilized in a Subsidiary or division to be so discontinued, when combined with all other assets transferred, and all other assets utilized in all other Subsidiaries or divisions discontinued since the Closing Date, constitute more than 30% of Consolidated Total Assets (excluding from such calculation assets of the types described in clause (ii) of the last sentence of Section 5.04) measured as of (x) until the Keebler Acquisition, September 20, 1997, and (y) thereafter, the date of the Keebler Acquisition (the amount of such excess being the "Excess Proceeds"), then the Borrower shall promptly (and in any event within 5 Domestic Business Days after such sale) notify in writing the Agent and the Banks thereof, which notice shall include the amount of the Excess Proceeds and 31 38 the amount of such Excess Proceeds which the Borrower intends to invest in operating assets of the Borrower within 90 days after such sale (the "Intended Reinvestment Amount"), and the aggregate amount of the Commitments shall be permanently reduced (i) on the date which is 5 Domestic Business Days after such sale, by an amount equal to the difference between the Excess Proceeds and the Intended Reinvestment Amount, and (ii) on the date which is 90 days after such sale, by the amount of any Excess Proceeds which was included in the Intended Reinvestment Amount but which have not been invested in operating assets of the Borrower within such 90 day period (and the Borrower shall notify the Agent and the Banks of such amount on such date), and in each case the Borrower shall make any prepayments required by Section 2.11 as a result thereof. (b) Upon failure to satisfy the condition set forth in Section 3.01(i) regarding the Keebler Acquisition within the time permitted thereby, the Commitments shall be reduced, prorata, to $300,000,000 (but such reduction shall not affect the amount or computation of the fees payable to the Agent pursuant to the Agent's Letter Agreement). (c) The Commitments shall terminate on the Termination Date and any Loans then outstanding (together with accrued interest thereon) shall be due and payable on such date. SECTION 2.10. Optional Prepayments. (a) The Borrower may, upon at least 1 Domestic Business Days' notice to the Agent, prepay any Base Rate Borrowing in whole at any time, or from time to time in part in amounts aggregating at least $5,000,000, or any larger integral multiple of $1,000,000, by paying the principal amount to be prepaid together with accrued interest thereon to the date of prepayment. Each such optional prepayment shall be applied to prepay ratably the Base Rate Loans of the several Banks included in such Base Rate Borrowing. (b) Subject to any payments required pursuant to the terms of Section 8.05(a) for such Fixed Rate Loan, upon 3 Domestic Business Day's prior written notice, the Borrower may prepay in minimum amounts of $10,000,000 with additional increments of $5,000,000 (or any lesser amount equal to the outstanding balance of such Loan) all or any portion of the principal amount of any Fixed Rate Loan prior to the maturity thereof. (c) Upon receipt of a notice of prepayment pursuant to this Section 2.10, the Agent shall promptly notify each Bank of the contents thereof and of such Bank's ratable share of such prepayment and such notice, once received by the Agent, shall not thereafter be revocable by the Borrower. 32 39 SECTION 2.11. Mandatory Prepayments. On each date on which the Commitments are reduced pursuant to Section 2.08 or Section 2.09, the Borrower shall repay or prepay such principal amount of the outstanding Loans, if any (together with interest accrued thereon and any amount due under Section 8.05(a)), as may be necessary so that after such payment the aggregate unpaid principal amount of the Loans does not exceed the aggregate amount of the Commitments as then reduced. Each such payment or prepayment shall be applied ratably to the Loans of the Banks outstanding on the date of payment or prepayment in the following order of priority:(i) first, to Base Rate Loans; (ii) secondly, to Euro-Dollar Loans; and (iii) lastly, to Money Market Loans. SECTION 2.12. General Provisions as to Payments. (a) The Borrower shall make each payment of principal of, and interest on, the Loans and of fees hereunder, not later than 11:00 A.M. (Atlanta, Georgia time) on the date when due, in Federal or other funds immediately available in Atlanta, Georgia, to the Agent at its address referred to in Section 9.01. The Agent will promptly distribute to each Bank its ratable share of each such payment received by the Agent for the account of the Banks. (b) Whenever any payment of principal of, or interest on, the Base Rate Loans, Money Market Loans or of fees hereunder shall be due on a day which is not a Domestic Business Day, the date for payment thereof shall be extended to the next succeeding Domestic Business Day. Whenever any payment of principal of or interest on, the Euro-Dollar Loans shall be due on a day which is not a Euro-Dollar Business Day, the date for payment thereof shall be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case the date for payment thereof shall be the next preceding Euro-Dollar Business Day. (c) All payments of principal, interest and fees and all other amounts to be made by the Borrower pursuant to this Agreement with respect to any Loan or fee relating thereto shall be paid without setoff, deduction or counterclaim of any kind, including, without limitation, any deduction for, and free from, any tax, imposts, levies, duties, deductions, or withholdings of any nature now or at anytime hereafter imposed by any governmental authority or by any taxing authority thereof or therein excluding in the case of the Agent and each Bank, taxes imposed on or measured by its net income, and franchise taxes imposed on it, by the jurisdiction under the laws of which the Agent or such Bank is organized or any political subdivision thereof and, in the case of each Bank, taxes imposed on its income, and franchise taxes imposed on it, by the jurisdiction of such Bank's applicable Lending Office or any political 33 40 subdivision thereof (all such non-excluded taxes, imposts, levies, duties, deductions or withholdings of any nature being "Taxes"). In the event that the Borrower is required by applicable law to make any such withholding or deduction of Taxes with respect to any Loan or fee or other amount, the Borrower shall pay such deduction or withholding to the applicable taxing authority, shall promptly furnish to any Bank in respect of which such deduction or withholding is made all receipts and other documents evidencing such payment and shall pay to such Bank additional amounts as may be necessary in order that the amount received by such Bank after the required withholding or other payment shall equal the amount such Bank would have received had no such withholding or other payment been made. If no withholding or deduction of Taxes are payable in respect to any Loan or fee relating thereto, the Borrower shall furnish any Bank, at such Bank's request, either (at the option of the Borrower) a certificate from each applicable taxing authority or an opinion of counsel acceptable to such Bank, in either case stating that such payments are exempt from or not subject to withholding or deduction of Taxes. If the Borrower fails to provide such original or certified copy of a receipt evidencing payment of Taxes or certificate(s) or opinion of counsel of exemption, the Borrower hereby agrees to compensate such Bank for, and indemnify them with respect to, the tax consequences of the Borrower's failure to provide evidence of tax payments or tax exemption. Each Bank which is not organized under the laws of the United States or any state thereof agrees, as soon as practicable after receipt by it of a request by the Borrower to do so, to file all appropriate forms and take other appropriate action to obtain a certificate or other appropriate document from the appropriate governmental authority in the jurisdiction imposing the relevant Taxes, establishing that it is entitled to receive payments of principal and interest under this Agreement and the Notes without deduction and free from withholding of any Taxes imposed by such jurisdiction; provided that if it is unable, for any reason, to establish such exemption, or to file such forms and, in any event, during such period of time as such request for exemption is pending, the Borrower shall nonetheless remain obligated under the terms of the immediately preceding paragraph. In the event any Bank receives a refund of any Taxes paid by the Borrower pursuant to this Section 2.12(c), it will pay to the Borrower the amount of such refund promptly upon receipt thereof; provided that if at any time thereafter it is required to return such refund, the Borrower shall promptly repay to it the amount of such refund. 34 41 Without prejudice to the survival of any other agreement of the Borrower hereunder, the agreements and obligations of the Borrower and the Banks contained in this Section 2.12(c) shall be applicable with respect to any Participant, Assignee or other Transferee, and any calculations required by such provisions (i) shall be made based upon the circumstances of such Participant, Assignee or other Transferee, and (ii) constitute a continuing agreement and shall survive the termination of this Agreement and the payment in full or cancellation of the Notes. SECTION 2.13. Computation of Interest and Fees. Interest on Base Rate Loans shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed (including the first day but excluding the last day). Interest on Euro-Dollar Loans and Money Market Loans shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed, calculated as to each Interest Period from and including the first day thereof to but excluding the last day thereof. Commitment fees and any other fees payable hereunder shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed (including the first day but excluding the last day). ARTICLE III CONDITIONS TO BORROWINGS SECTION 3.01. Conditions to First Borrowing. The obligation of each Bank to make a Loan on the occasion of the first Borrowing is subject to the satisfaction of the conditions set forth in Section 3.02 and receipt by the Agent of the following (as to the documents described in paragraphs (a),(c), (d)and (e) below, in sufficient number of counterparts for delivery of a counterpart to each Bank and retention of one counterpart by the Agent): (a) from each of the parties hereto of either (i) a duly executed counterpart of this Agreement signed by such party or (ii) a facsimile transmission of such executed counterpart, with the original to be sent to the Agent by overnight courier); (b) a duly executed Syndicated Loan Note and a duly executed Money Market Loan Note for the account of each Bank complying with the provisions of Section 2.04; (c) an opinion letter of Stephen R. Avera, Assistant General Counsel of the Borrower, dated as of the Closing 35 42 Date, substantially in the form of Exhibit B and covering such additional matters relating to the transactions contemplated hereby as the Agent or any Bank may reasonably request; (d) an opinion of Jones, Day, Reavis & Pogue, special counsel for the Agent, dated as of the Closing Date, substantially in the form of Exhibit C and covering such additional matters relating to the transactions contemplated hereby as the Agent may reasonably request; (e) a certificate (the "Closing Certificate") substantially in the form of Exhibit G), dated as of the Closing Date, signed by a principal financial officer of the Borrower, to the effect that (i) no Default has occurred and is continuing on the date of the first Borrowing and (ii) the representations and warranties of the Borrower contained in Article IV are true on and as of the date of the first Borrowing hereunder; (f) a certificate of the Borrower substantially in the form of Exhibit H (the "Officer's Certificate"), signed by the Secretary or an Assistant Secretary of the Borrower, certifying as to the names, true signatures and incumbency of the officer or officers of the Borrower authorized to execute and deliver the Loan Documents, and certified copies of the following items: (i) the Borrower's Certificate of Incorporation, (ii) the Borrower's Bylaws, (iii) a certificate of the Secretary of State of the State of Georgia as to the good standing of the Borrower as a Georgia corporation, and (iv) the action taken by the Board of Directors of the Borrower authorizing the Borrower's execution, delivery and performance of this Agreement, the Notes and the other Loan Documents to which the Borrower is a party; (g) a Notice of Borrowing or notification pursuant to Section 2.03(e) of acceptance of one or more Money Market Quotes, as applicable; (h) Termination of the Original Agreement and all "Commitments" thereunder, and repayment in full of all outstanding principal and accrued and unpaid interest and fees and other amounts thereunder (and in connection therewith, promptly after the Closing Date, each Bank which is a party to the Original Agreement will deliver to the Borrower for cancellation its Original Notes); (i) Consummation of the Keebler Acquisition and the restructuring of the ownership of Keebler under terms and 36 43 conditions satisfactory to the Agent; provided, however, that if all other conditions have been satisfied, the Closing Date may occur notwithstanding the non-satisfaction of this condition, and in such event (x) this condition may be satisfied at any time within 7 Business Days after the Closing Date, and (y) failure to satisfy such condition within such time shall result in a prorata reduction of the Commitments pursuant to Section 2.09(b); and (j) Delivery to the Agent and the Banks of, and their satisfaction with, a pro-forma balance sheet, giving effect to the Keebler Acquisition. In addition, if the Borrower desires funding of a Fixed Rate Loan on the Closing Date, the Agent shall have received, the requisite number of days prior to the Closing Date, a funding indemnification letter satisfactory to it, pursuant to which (i) the Agent and the Borrower shall have agreed upon the interest rate, amount of Borrowing and Interest Period for such Fixed Rate Loan, and (ii) the Borrower shall indemnify the Banks from any loss or expense arising from the failure to close on the anticipated Closing Date identified in such letter or the failure to borrow such Fixed Rate Loan on such date. SECTION 3.02. Conditions to All Borrowings. The obligation of each Bank to make a Loan on the occasion of each Borrowing is subject to the satisfaction of the following conditions except as expressly provided in the last sentence of this Section 3.02: (a) receipt by the Agent of a Notice of Borrowing or notification pursuant to Section 2.03(e) of acceptance of one or more Money Market Quotes, as applicable; (b) the fact that, immediately before and after such Borrowing, no Default shall have occurred and be continuing; (c) the fact that the representations and warranties of the Borrower contained in Article IV of this Agreement shall be true on and as of the date of such Borrowing, except to the extent such representations and warranties relate to a prior date; and (d) the fact that, immediately after such Borrowing, the conditions set forth in clauses (i) and (ii) of Section 2.01 shall have been satisfied. The acceptance by the Borrower of each Syndicated Borrowing and each Money Market Borrowing hereunder shall be deemed to be a representation and warranty by the Borrower on the date of such 37 44 Borrowing as to the truth and accuracy of the facts specified in paragraphs (b), (c) and (d) of this Section; provided that: (i) if such Borrowing is a Syndicated Borrowing which consists solely of a Refunding Loan, (x) such Borrowing shall not be deemed to be such a representation and warranty as to the truth and accuracy of the fact specified in paragraph (c) of this Section, and (y) if the facts specified in paragraph (b) are not true and accurate, such Refunding Loan shall be made as a Base Rate Loan; and (ii) any representation and warranty contained in Article IV which by its terms is made as to matters as of a specified date shall when remade pursuant to this Section in connection with such Borrowing be deemed to be made as to matters as of such specified date and not any later date. ARTICLE IV REPRESENTATIONS AND WARRANTIES The Borrower represents and warrants that: SECTION 4.01. Corporate Existence and Power. The Borrower is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Georgia. The Borrower is duly qualified to transact business in every jurisdiction where, by the nature of its business, such qualification is necessary, except for any failure to comply with the foregoing which does not have and reasonably could not be expected to cause a Material Adverse Effect, and has all corporate powers and all government authorizations, licenses, consents and approvals required to engage in its business and operations as now conducted, except for any failure to comply with the foregoing which does not have and reasonably could not be expected to cause a Material Adverse Effect. SECTION 4.02. Corporate and Governmental Authorization; No Contravention. The execution, delivery and performance by the Borrower of this Agreement, the Notes and the other Loan Documents (i) are within the Borrower's corporate powers, (ii) have been duly authorized by all necessary corporate action, (iii) require no action by or in respect of or filing with, any governmental body, agency or official, (iv) do not contravene, or constitute a default under, any provision of applicable law or regulation or of the certificate of incorporation or by-laws of the Borrower or of any material agreement, judgment, injunction, order, decree or other instrument binding upon the Borrower or any of its Restricted Subsidiaries, and (v) do not result in the creation or imposition of any Lien on any asset of the Borrower or any of its Restricted Subsidiaries. 38 45 SECTION 4.03. Binding Effect. This Agreement constitutes a valid and binding agreement of the Borrower enforceable in accordance with its terms, and the Notes and the other Loan Documents, when executed and delivered in accordance with this Agreement, will constitute valid and binding obligations of the Borrower enforceable in accordance with their respective terms, provided that the enforceability hereof and thereof is subject in each case to general principles of equity and to bankruptcy, insolvency and similar laws affecting the enforcement of creditors' rights generally. SECTION 4.04. Financial Information. (a) The consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of June 28, 1997 and the related consolidated statements of income, shareholders' equity and cash flows for the Fiscal Year then ended, reported on by Price Waterhouse LLP, copies of which have been delivered to each of the Banks, and the unaudited consolidated financial statements of the Borrower for the interim period ended September 20, 1997 copies of which have been delivered to each of the Banks, fairly present, in conformity with GAAP, the consolidated financial position of the Borrower and its Consolidated Subsidiaries as of such dates and their consolidated results of operations and cash flows for such periods stated. (b) Since June 28, 1997, there has been no event, act, condition or occurrence which has or reasonably could be expected to cause a Material Adverse Effect. SECTION 4.05. No Litigation. There is no action, suit or proceeding pending, or to the knowledge of the Borrower threatened, against or affecting the Borrower or any of its Restricted Subsidiaries before any court or arbitrator or any governmental body, agency or official which has or reasonably could be expected to have a Material Adverse Effect or which in any manner draws into question the validity of this Agreement, the Notes or any of the other Loan Documents. SECTION 4.06. Compliance with ERISA. (a) The Borrower and each member of the Controlled Group have fulfilled their obligations under the minimum funding standards of ERISA and the Code with respect to each Plan and are in compliance in all material respects with the presently applicable provisions of ERISA and the Code, and have not incurred any liability to the PBGC or a Plan under Title IV of ERISA. (b) Neither the Borrower nor any member of the Controlled Group has incurred any withdrawal liability with respect to any Multiemployer Plan under Title IV of ERISA, and no such liability is expected to be incurred. 39 46 SECTION 4.07. Compliance with Laws; Payment of Taxes. The Borrower and, to the best of the Borrower's knowledge, its Material Subsidiaries, are in compliance with all applicable laws, regulations and similar requirements of governmental authorities, except where such compliance is being contested in good faith through appropriate proceedings or which does not have and reasonably could not be expected to cause a Material Adverse Effect. There have been filed on behalf of the Borrower and its Material Subsidiaries all Federal, state and local income, material excise, material property and other material tax returns which are required to be filed by them and all taxes due pursuant to such returns or pursuant to any assessment received by or on behalf of the Borrower or any Material Subsidiary have been paid, except where such payments are being contested in good faith through appropriate proceedings or the failure to pay does not have and reasonably could not be expected to cause a Material Adverse Effect. The charges, accruals and reserves on the books of the Borrower and its Material Subsidiaries in respect of taxes or other governmental charges are, in the opinion of the Borrower, adequate. As of the Closing Date, United States income tax returns of the Borrower and its Material Subsidiaries have been examined and closed through the 1995 Fiscal Year. SECTION 4.08. Subsidiaries. Each of the Borrower's Subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, is duly qualified to transact business in every jurisdiction where, by the nature of its business, such qualification is necessary, and has all corporate powers and all governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted, except for any failure to comply with the foregoing which does not have and reasonably could not be expected to cause a Material Adverse Effect. As of the Closing Date, the Borrower has no Subsidiaries except for those Subsidiaries listed on Schedule 4.08, which assumes the consummation of the Keebler Acquisition and which accurately sets forth each such Subsidiary's complete name and jurisdiction of incorporation. None of such Subsidiaries, other than those listed as such on Schedule 4.08, is a Material Subsidiary as of the Closing Date. Within 15 days after any Subsidiary becomes a Material Subsidiary, or the creation or acquisition of any Subsidiary which becomes a Material Subsidiary, the Borrower will send to the Agent and each of the Banks either a supplement to or replacement of Schedule 4.08 (showing such Subsidiary and indicating that it is a Material Subsidiary), or a copy of Form 8-K sent to the Securities and Exchange Commission, showing such Subsidiary as a Material Subsidiary. 40 47 SECTION 4.09. Investment Company Act. Neither the Borrower nor any of its Subsidiaries is an "investment company" within the meaning of the Investment Company Act of 1940, as amended. SECTION 4.10. Public Utility Holding Company Act. Neither the Borrower nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of a "holding company", or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company", as such terms are defined in the Public Utility Holding Company Act of 1935, as amended. SECTION 4.11. Ownership of Property; Liens. Each of the Borrower and its Material Subsidiaries has title to, or leasehold or other interests in, its properties sufficient for the conduct of its business, and none of such property is subject to any Lien except as permitted in Section 5.16. SECTION 4.12. No Default. Neither the Borrower nor any of its Material Subsidiaries is in default under or with respect to any agreement, instrument or undertaking to which it is a party or by which it or any of its property is bound which has or reasonably could be expected to cause a Material Adverse Effect. No Default or Event of Default has occurred and is continuing. SECTION 4.13. Full Disclosure. The Borrower's annual report on Form 10-K for the fiscal year ended at June 28, 1997, a copy of which has been furnished by the Borrower to the Agent and the Banks, did not, as of the date such Form 10-K was filed with the Securities and Exchange Commission, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. From the date of filing of the Borrower's quarterly report on Form 10- Q for the fiscal quarter ended on September 20, 1997 through the date hereof, the Borrower has not filed a current report on Form 8-K with the Securities and Exchange Commission and, as of the date hereof, no event or condition exists which would require such filing by the Borrower pursuant to the Securities Exchange Act of 1934, as amended, except for any such event or condition which has heretofore been disclosed in writing to the Agent and the Banks by delivery to the Agent and the Banks of a Form 8-K. SECTION 4.14. Environmental Matters. (a) Neither the Borrower nor any Restricted Subsidiary is subject to any Environmental Liability which has or reasonably could be expected to cause a Material Adverse Effect and, to the best of the Borrower's knowledge, neither the Borrower nor any Restricted Subsidiary has been designated as a potentially responsible party under CERCLA or under any state statute similar to CERCLA. To 41 48 the best of the Borrower's knowledge, none of the Properties has been identified on any current or proposed (i) National Priorities List under 40 C.F.R. ss. 300, (ii) CERCLIS list or (iii) any list arising from a state statute similar to CERCLA. (b) To the best of the Borrower's knowledge, no Hazardous Materials have been or are being used, produced, manufactured, processed, treated, recycled, generated, stored, disposed of, managed or otherwise handled at, or shipped or transported to or from the Properties or are otherwise present at, on, in or under the Properties, or, to the best of the knowledge of the Borrower, at or from any adjacent site or facility, except for Hazardous Materials, such as cleaning solvents, pesticides and other materials used, produced, manufactured, processed, treated, recycled, generated, stored, disposed of, managed, or otherwise handled in material compliance with all applicable Environmental Requirements. (c) To the best of the Borrower's knowledge, the Borrower, and each of its Restricted Subsidiaries and Affiliates, has procured all Environmental Authorizations necessary for the conduct of its business, and is in compliance with all Environmental Requirements in connection with the operation of the Properties and the Borrower's, and each of its Restricted Subsidiary's and Affiliate's, respective businesses, except where failure to comply does not have and reasonably could not be expected to cause a Material Adverse Effect. SECTION 4.15. Capital Stock. All Capital Stock, debentures, bonds, notes and all other securities of the Borrower presently issued and outstanding are validly and properly issued in accordance with all applicable laws in all material respects, including but not limited to, the "Blue Sky" laws of all applicable states and the federal securities laws, except to the extent any failure with respect thereto would not have and reasonably could not be expected to cause a Material Adverse Effect. The issued shares of Capital Stock of the Borrower's Wholly Owned Subsidiaries are owned by the Borrower free and clear of any Lien or adverse claim. At least a majority of the issued shares of capital stock of each of the Borrower's other Subsidiaries (other than Wholly Owned Subsidiaries) is owned by the Borrower free and clear of any Lien or adverse claim. SECTION 4.16. Margin Stock. Neither the Borrower nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of purchasing or carrying any Margin Stock, and no part of the proceeds of any Loan will be used to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin 42 49 Stock, or be used for any purpose, in each case in violation of the provisions of Regulation G, T, U or X. SECTION 4.17. Insurance. The Borrower and each of its Material Subsidiaries has (either in the name of the Borrower or in such Material Subsidiary's own name), with financially sound and reputable insurance companies, insurance in at least such amounts (including deductibles, co-insurance and self-insurance with respect to which adequate reserves are maintained) and against at least such risks (including on all its property, and public liability and worker's compensation) as are usually insured against in the same general area by companies of established repute engaged in the same or similar business and similarly situated. ARTICLE V COVENANTS The Borrower agrees that, so long as any Bank has any Commitment hereunder or any amount payable hereunder or under any Note remains unpaid (unless the Required Banks consent in writing): SECTION 5.01. Information. The Borrower will deliver to each of the Banks: (a) as soon as available and in any event within 90 days after the end of each Fiscal Year, a consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of the end of such Fiscal Year and the related consolidated statements of income, shareholders' equity and cash flows for such Fiscal Year, together with, so long as there is an Unrestricted Subsidiary, a consolidating balance sheet and statements of income, shareholders' equity and cash flows for such periods which exclude the Unrestricted Subsidiaries, in each case setting forth in each case in comparative form the figures for the previous fiscal year, certified, in the case of such consolidated financial statements, by Price Waterhouse LLP or other independent public accountants of nationally recognized standing, with such certification to be free of exceptions and qualifications not acceptable to the Required Banks; (b) as soon as available and in any event within 45 days after the end of each of the first 3 Fiscal Quarters of each Fiscal Year, a consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of the end of 43 50 such Fiscal Quarter and the related statement of income and statement of cash flows for such Fiscal Quarter and for the portion of the Fiscal Year ended at the end of such Fiscal Quarter, together with, so long as there is an Unrestricted Subsidiary, a consolidating balance sheet and statements of income, shareholders' equity and cash flows for such periods which exclude the Unrestricted Subsidiaries, in each case setting forth in each case in comparative form the figures for the corresponding Fiscal Quarter and the corresponding portion of the previous Fiscal Year, all certified (subject to normal year-end adjustments) as to fairness of presentation, GAAP and consistency by the chief financial officer or the chief accounting officer of the Borrower; (c) simultaneously with the delivery of each set of financial statements referred to in paragraphs (a) and (b) above, a certificate, substantially in the form of Exhibit F (a "Compliance Certificate"), of the chief financial officer or the chief accounting officer of the Borrower (i) setting forth in reasonable detail the calculations required to establish whether the Borrower was in compliance with the requirements of Sections 5.13 through 5.19, inclusive, and 5.21, on the date of such financial statements and (ii) stating whether any Default exists on the date of such certificate and, if any Default then exists, setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto; (d) simultaneously with the delivery of each set of annual financial statements referred to in paragraph (a) above, a statement of the firm of independent public accountants which reported on such statements to the effect that nothing has come to their attention to cause them to believe that any Default existed on the date of such financial statements; (e) within 5 Domestic Business Days after the Borrower becomes aware of the occurrence of any Default, a certificate of a senior financial officer or accounting officer or the chief financial officer or the chief accounting officer or the Treasurer of the Borrower setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto; (f) promptly upon the mailing thereof to the shareholders of the Borrower generally, copies of all financial statements, reports and proxy statements so mailed; 44 51 (g) promptly upon the filing thereof, copies of all registration statements (other than the exhibits thereto and any registration statements on Form S-8 or its equivalent) and annual or quarterly reports which the Borrower shall have filed with the Securities and Exchange Commission; (h) if and when any member of the Controlled Group (i) gives or is required to give notice to the PBGC of any "reportable event" (as defined in Section 4043 of ERISA) with respect to any Plan which might constitute grounds for a termination of such Plan under Title IV of ERISA, or knows that the plan administrator of any Plan has given or is required to give notice of any such reportable event, a copy of the notice of such reportable event given or required to be given to the PBGC; (ii) receives notice of complete or partial withdrawal liability under Title IV of ERISA, a copy of such notice; or (iii) receives notice from the PBGC under Title IV of ERISA of an intent to terminate or appoint a trustee to administer any Plan, a copy of such notice; and (i) from time to time such additional information regarding the financial position or business of the Borrower and its Subsidiaries (other than non-public information as to the Unrestricted Subsidiaries) as the Agent, at the request of any Bank, may reasonably request. SECTION 5.02. Inspection of Property, Books and Records. The Borrower will (i) keep, and cause each Subsidiary to keep, proper books of record and account in which full, true and correct entries in conformity with GAAP shall be made of all dealings and transactions in relation to its business and activities; and (ii) permit, and cause each Restricted Subsidiary to permit, representatives of any Bank (x) at such Bank's expense and upon reasonable notice and at a time reasonably convenient to the Borrower (but in any event within 10 days of such notice) prior to the occurrence and continuance of a Default and (y) at the Borrower's expense and without prior notice after the occurrence and continuance of a Default, to visit and inspect any of their respective properties, to examine and make abstracts from any of their respective books and records and to discuss their respective affairs, finances and accounts with their respective officers, employees and independent public accountants. The Borrower agrees to cooperate and assist in such visits and inspections, in each case at such reasonable times and as often as may reasonably be desired. SECTION 5.03. Maintenance of Existence. The Borrower will at all times preserve and keep in full force and effect its corporate existence. Subject to Section 5.04, the Borrower will at all times preserve and keep in full force and effect the 45 52 corporate existence of each of its Restricted Subsidiaries (unless merged into the Borrower or a Restricted Subsidiary) and all rights and franchises of the Borrower and its Restricted Subsidiaries unless, in the good faith judgment of the Borrower, the termination of or failure to preserve and keep in full force and effect such corporate existence, right or franchise would not, individually or in the aggregate, have and could not reasonably be expected to cause a Material Adverse Effect. The Borrower will, and will cause each Restricted Subsidiary (subject to Section 5.04), at all times to carry on its business in the food or beverage business or any related line of business. SECTION 5.04. Consolidations, Mergers and Sales of Assets. The Borrower will not, nor will it permit any Material Subsidiary to, consolidate or merge with or into, or sell, lease or otherwise transfer all or any substantial part of its assets to, any other Person, or discontinue or eliminate any business line or segment, provided that (a) the Borrower may merge with another Person if (i) such Person was organized under the laws of the United States of America or one of its states, (ii) the Borrower is the corporation surviving such merger and (iii) immediately after giving effect to such merger, no Default shall have occurred and be continuing, (b) Subsidiaries of the Borrower may merge with one another, provided that in the case of a merger of a Restricted Subsidiary with an Unrestricted Subsidiary, the Restricted Subsidiary is the corporation surviving such merger, (c) other Persons may merge into or with Subsidiaries to effect an acquisition permitted by Section 5.15 and (d) the foregoing limitation on the sale, lease or other transfer of assets and on the discontinuation or elimination of a Subsidiary or division shall not prohibit (x) transfers of assets (including stock of a Restricted Subsidiary) to or among Restricted Subsidiaries, (y) during any Fiscal Year, a transfer of assets other than Margin Stock or the discontinuance or elimination of a Subsidiary or division (in a single transaction or in a series of related transactions) unless the aggregate assets to be so transferred or utilized in a Restricted Subsidiary or division to be so discontinued, when combined with all other assets transferred, and all other assets utilized in all other Restricted Subsidiaries or divisions discontinued, in any Fiscal Year, constituted more than 15% of Consolidated Total Assets measured as of the end of the immediately preceding Fiscal Year and (z) transfers of Margin Stock. Nothing in this Section 5.04 shall be interpreted to (i) limit or abridge the provisions of Section 2.09(a) or (ii) restrict the Borrower's ability to dispose of (1) vehicles, (2) delivery routes, (3) assets obtained through acquisitions of businesses or assets on or after the date hereof, provided that proceeds of any such disposition shall be reinvested in the Borrower by reducing Indebtedness or by investing in operating assets, and (4) obsolete, under-performing 46 53 or non-core assets, disposition of which, in management's judgment, would enhance the Borrower's operations and profitability, and dispositions described in this sentence shall not be subject to, or included in the computations under, clause (d) above. SECTION 5.05. Use of Proceeds. The proceeds of the Loans shall be used for general corporate purposes, including the Keebler Acquisition and other acquisitions permitted by Section 5.15, and the repayment of Indebtedness; provided, that no portion of the proceeds of the Loans will be used by the Borrower or any Subsidiary (i) in connection with, whether directly or indirectly, any tender offer for, or other acquisition of, stock of any corporation with a view towards obtaining control of such other corporation, unless such tender offer or other acquisition is to be made on a negotiated basis with the approval of the Board of Directors of the Person to be acquired, and the provisions of Section 5.16 would not be violated, (ii) in violation of Section 4.16, or (iii) for any purpose in violation of any applicable law or regulation. SECTION 5.06. Compliance with Laws; Payment of Taxes. (a) The Borrower will, and will cause each of its Material Subsidiaries and each member of the Controlled Group to, comply with applicable laws (including but not limited to ERISA), regulations and similar requirements of governmental authorities (including but not limited to PBGC), except where the necessity of such compliance is being contested in good faith through appropriate proceedings diligently pursued or if failure to comply does not have and reasonably could not be expected to cause a Material Adverse Effect. The Borrower will, and will cause each of its Material Subsidiaries to, pay promptly when due all taxes, assessments, governmental charges, claims for labor, supplies, rent and other obligations which, if unpaid, might become a lien against the property of the Borrower or any Restricted Subsidiary, except liabilities being contested in good faith and against which, if requested by the Agent, the Borrower will set up reserves in accordance with GAAP and liabilities the nonpayment of which would not have and reasonably could not be expected to cause a Material Adverse Effect. (b) The Borrower shall not permit the aggregate complete or partial withdrawal liability under Title IV of ERISA with respect to Multiemployer Plans incurred by the Borrower and members of the Controlled Group to exceed $5,000,000 at any time. For purposes of this Section 5.06(b), the amount of withdrawal liability of the Borrower and members of the Controlled Group at any date shall be the aggregate present value of the amount claimed to have been incurred less any portion thereof which the Borrower and members of the Controlled Group have paid or as to 47 54 which the Borrower reasonably believes, after appropriate consideration of possible adjustments arising under Sections 4219 and 4221 of ERISA, it and members of the Controlled Group will have no liability, provided that the Borrower shall obtain prompt written advice from independent actuarial consultants supporting such determination. The Borrower agrees (i) once in each year, beginning with the 1998 Fiscal Year, to request a current statement of the withdrawal liability of the Borrower and members of the Controlled Group from each Multiemployer Plan, if any, and (ii) to transmit a copy of such statement to the Agent and the Banks within 15 days after the Borrower receives the same. SECTION 5.07. Insurance. The Borrower will maintain, and will cause each of its Material Subsidiaries to maintain (either in the name of the Borrower or in such Material Subsidiary's own name), with financially sound and reputable insurance companies, insurance on all its property in at least such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves are maintained with respect thereto) and against at least such risks (including on all its property, and public liability and worker's compensation) as are usually insured against in the same general area by companies of established repute engaged in the same or similar business and similarly situated. SECTION 5.08. Change in Fiscal Year. The Borrower and its Subsidiaries are changing their Fiscal Year to a Fiscal Year ending on the Saturday closest to December 31, and initially will have a Fiscal Year consisting of the period from June 29, 1997 to January 3, 1998. Except for such change, the Borrower will not change its Fiscal Year without the consent of the Required Banks, which shall not be unreasonably withheld (taking into consideration for such purpose the effect, if any, such change would have on the financial covenants contained in this Agreement). SECTION 5.09. Maintenance of Property. The Borrower shall, and shall cause each Restricted Subsidiary to, maintain all of its properties and assets in good condition, repair and working order, ordinary wear and tear excepted, except where any failure would not have and could not reasonably be expected to cause a Material Adverse Effect. SECTION 5.10. Environmental Notices. The Borrower shall furnish to the Banks and the Agent prompt written notice of all Environmental Liabilities, pending, threatened or anticipated Environmental Proceedings, Environmental Notices, Environmental Judgments and Orders, and Environmental Releases of which the Borrower shall have received actual notice or have actual knowledge at, on, in, under or in any way affecting the 48 55 Properties, and all facts, events, or conditions that could lead to any of the foregoing, if the amount of liability or of remediation cost to the Borrower has or reasonably could be expected to cause a Material Adverse Effect. SECTION 5.11. Environmental Matters. The Borrower and its Material Subsidiaries will not, and will not knowingly permit any Third Party to, use, produce, manufacture, process, treat, recycle, generate, store, dispose of, manage at, or otherwise handle, or ship or transport to or from the Properties any Hazardous Materials in violation of applicable Environmental Requirements, except to the extent that failure to comply would not have and reasonably could not be expected to cause a Material Adverse Effect. SECTION 5.12. Environmental Release. The Borrower agrees that upon its becoming aware of the occurrence of an Environmental Release, except for any Environmental Release which occurred in substantial compliance with all Environmental Requirements, at or on any of the Properties it will act promptly to determine the extent of, and to take such remedial action to eliminate, any such Environmental Release, whether or not ordered or otherwise directed to do so by any Environmental Authority, except to the extent that failure to take remedial action would not have and reasonably could not be expected to cause a Material Adverse Effect. SECTION 5.13. Transactions with Affiliates. Neither the Borrower nor any of its Material Subsidiaries shall enter into, or be a party to, any transaction with any Affiliate of the Borrower or such Material Subsidiary (which Affiliate is not the Borrower or a Restricted Subsidiary, other than a Person in which the Borrower or such Material Subsidiary owns less than a majority interest and which, if it were a Restricted Subsidiary, would not be a Material Subsidiary), except as permitted by law and in the ordinary course of business and pursuant to reasonable terms which either (x) are no less favorable to Borrower or such Material Subsidiary than would be obtained in a comparable arm's length transaction with a Person which is not an Affiliate or (y) have been approved by a majority of the Board of Directors of the Borrower or such Material Subsidiary; provided, that the foregoing shall not affect the ability of the Borrower or any Material Subsidiary to determine, in its sole discretion, the amount or form of executive or director compensation from time to time. SECTION 5.14. Loans or Advances. Neither the Borrower nor any of its Material Subsidiaries shall make loans or advances to any Person except as permitted by Section 5.16 and except: (i) loans or advances to employees not exceeding $10,000,000 in the 49 56 aggregate principal amount outstanding at any time, in each case made in the ordinary course of business and consistent with practices existing on the Closing Date; (ii) deposits required by government agencies or public utilities; (iii) loans or advances to and among Borrower and its Wholly Owned Subsidiaries; and (iv) other loans or advances, to Persons other than the Unrestricted Subsidiaries (loans and advances to Unrestricted Subsidiaries not being permitted), in an aggregate amount outstanding which, together with Investments permitted by clause (vi) of Section 5.15, do not exceed 15% of Consolidated Total Assets as of the last day of the immediately preceding Fiscal Quarter; provided that after giving effect to the making of any loans, advances or deposits permitted by this Section, no Default shall be in existence or be created thereby. SECTION 5.15. Investments. Neither the Borrower nor any of its Restricted Subsidiaries shall make Investments in any Person except as permitted by Section 5.14 and except Investments in (i) direct obligations of the United States Government maturing within one year, (ii) certificates of deposit issued by a commercial bank whose credit is satisfactory to the Agent, (iii) commercial paper rated A1 or the equivalent thereof by Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc. or P1 or the equivalent thereof by Moody's Investors Service, Inc. and in either case maturing within 6 months after the date of acquisition; (iv) tender bonds the payment of the principal of and interest on which is fully supported by a letter of credit issued by a United States bank whose long-term certificates of deposit are rated at least AA or the equivalent thereof by Standard & Poor's Corporation and Aa or the equivalent thereof by Moody's Investors Service, Inc.; (v) Investments by the Borrower or any Restricted Subsidiary in the stock (or other ownership interests) or assets of any Person in the food or beverage business or any related line of business and/or (vi) other Investments in an aggregate amount outstanding which, together with loans and advances permitted by clause (iv) of Section 5.14, do not exceed 15% of Consolidated Total Assets as of the last day of the immediately preceding Fiscal Quarter, and which, as to Investments in Keebler, constitute Permitted Keebler Investments; provided, however, immediately after giving effect to the making of any Investment, no Default shall have occurred and be continuing. SECTION 5.16. Negative Pledge. Neither the Borrower nor any Restricted Subsidiary will create, assume or suffer to exist any Lien on any asset now owned or hereafter acquired by it, except: (a) Liens existing on the date of this Agreement securing Indebtedness outstanding on the date of this 50 57 Agreement in an aggregate principal amount not exceeding $24,000,000; (b) any Lien existing on any specific fixed asset of any corporation at the time such corporation becomes a Restricted Subsidiary and not created in contemplation of such event; (c) any Lien on any specific fixed asset (real or personal) securing Indebtedness incurred or assumed for the purpose of financing all or any part of the cost of acquiring or constructing such asset, provided that such Lien attaches to such asset concurrently with or within 18 months after the acquisition or completion of construction thereof; (d) any Lien on any specific fixed asset of any corporation existing at the time such corporation is merged or consolidated with or into the Borrower or a Restricted Subsidiary and not created in contemplation of such event; (e) any Lien existing on any specific fixed asset prior to the acquisition thereof by the Borrower or a Restricted Subsidiary and not created in contemplation of such acquisition; (f) Liens on assets of a Restricted Subsidiary securing Indebtedness owing by any Restricted Subsidiary to the Borrower or by any Restricted Subsidiary to another Restricted Subsidiary; (g) any Lien arising out of the refinancing, extension, renewal or refunding of any Indebtedness secured by any Lien permitted by any of the foregoing paragraphs of this Section, provided that (i) such Indebtedness is not secured by any additional assets, and (ii) the amount of such Indebtedness secured by any such Lien is not increased; (h) Liens incidental to the conduct of its business or the ownership of its assets which (i) do not secure Indebtedness and (ii) do not in the aggregate materially detract from the value of its assets or materially impair the use thereof in the operation of its business; (i) Liens imposed by any governmental authority for taxes, assessments or charges not yet delinquent or which are being contested in good faith and by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of the Borrower or any of its Subsidiaries, as the case may be, in accordance with GAAP; 51 58 (j) carriers', warehousemen's, mechanics', materialmen's, repairmen's or other like Liens arising in the ordinary course of business (whether or not statutory) which are not overdue for a period of more than 30 days or which are being contested in good faith and by appropriate proceedings, for which a reserve or other appropriate provisions, if any, as shall be required by GAAP shall have been made; (k) Liens, pledges or deposits to secure non- delinquent obligations under worker's compensation, unemployment insurance and other social security legislation; (l) Liens on capital stock of or other ownership interests in any Person not a Restricted Subsidiary of the Borrower securing Indebtedness of such Person; (m) Liens resulting from progress payments or partial payments under United States government contracts or subcontracts; (n) Liens arising from legal proceedings, so long as such proceedings are being contested in good faith by appropriate proceedings diligently conducted and so long as execution is stayed on all judgments resulting from any such proceedings; (o) any Lien on Margin Stock; (p) grants of security and rights of setoff in deposit or credit accounts, including demand, savings, passbook, share draft or like accounts, certificates of deposit, money market accounts, items held for collection or deposit, commercial paper, negotiable instruments and similar accounts and instruments held at banks or financial institutions to secure the payment or reimbursement under overdraft, acceptance and similar facilities and rights of setoff, banker's liens and other similar rights arising solely by operation of law; and (q) Liens not otherwise permitted by the foregoing paragraphs of this Section securing Indebtedness (other than indebtedness represented by the Notes) in an aggregate principal amount at any time outstanding which, together with the aggregate amount of Indebtedness of Restricted Subsidiaries permitted by Section 5.20(iv), does not exceed 20% of Consolidated Net Worth as of the last day of the immediately preceding Fiscal Quarter. 52 59 SECTION 5.17. Fixed Charges Coverage Ratio. At the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending December 13, 1997, the ratio of EBILT to Consolidated Fixed Charges shall at all times be greater than 2.0 to 1.0. SECTION 5.18. Leverage Ratio. The Leverage Ratio shall at all times be less than: (A) provided that the condition set forth in Section 3.01(i) regarding the Keebler Acquisition is satisfied within the time permitted thereby, and for so long as Keebler is a Subsidiary, (i) from the Closing Date through whichever is the earlier of (x) January 2, 1999 or (y) the date of the Next Public Offering, 0.75 to 1.00; and (ii) thereafter, 0.65 to 1.0; and (B) in all other circumstances, 0.65 to 1.0. SECTION 5.19. Minimum Consolidated Net Worth. Consolidated Net Worth will at no time be less than: (A) prior to the date of the Next Public Offering, the greater of (i) 85% of Consolidated Net Worth as of the end of the Fiscal Quarter ending September 20, 1997, plus the sum of (x) 50% of the cumulative Net Proceeds of Capital Stock received during any period after the Closing Date, plus (y) 50% of any equity resulting from a conversion of Indebtedness during any period after the Closing Date, less (z) any amount of equity repurchased during any period after the Closing Date, calculated quarterly at the end of each Fiscal Quarter; and (ii) $200,000,000; and (B) from and after the date of the Next Public Offering, the greater of (i) 85% of Consolidated Net Worth as of the end of the Fiscal Quarter most recently ended, adjusted to give effect on a proforma basis to the Next Public Offering, plus the sum of (x) 50% of the cumulative Net Proceeds of Capital Stock received during any period after the Next Public Offering, plus (y) 50% of any equity resulting from a conversion of Indebtedness during any period after the Next Public Offering, less (z) any amount of equity repurchased during any period after the Next Public Offering, calculated quarterly at the end of each Fiscal Quarter; and (ii) $450,000,000. SECTION 5.20. Subsidiary Borrowings. The Borrower shall not permit any Restricted Subsidiary to become liable for any Indebtedness, whether secured or unsecured, except: (i) such of the foregoing as is owed to the Borrower or another Wholly-Owned Subsidiary; (ii) Indebtedness or obligations secured by Liens permitted by Section 5.16; (iii) Indebtedness or obligations of a Subsidiary outstanding at the time such Subsidiary becomes a 53 60 Subsidiary, provided that (a) such Indebtedness shall not have been incurred in contemplation of such Subsidiary becoming a Subsidiary, and (b) immediately after such Subsidiary becomes a Subsidiary, no Default or Event of Default shall exist, and provided, further, that such Indebtedness may not be extended, renewed, or refunded except as otherwise permitted by this Agreement; and (iv) other Indebtedness which, when combined with the total of the Indebtedness secured by all Liens permitted by Section 5.16(q), without duplication, does not exceed 20% of Consolidated Net Worth as of the last day of the immediately preceding Fiscal Quarter. SECTION 5.21. Adjusted Leverage Ratio. The ratio of Adjusted Consolidated Total Debt to Adjusted Total Capitalization shall at all times be less than: (A) provided that the condition set forth in Section 3.01(i) regarding the Keebler Acquisition is satisfied within the time permitted thereby, and for so long as Keebler is a Subsidiary, (i) from the Closing Date through whichever is the earlier of (x) January 2, 1999 or (y) the date of the Next Public Offering, 0.75 to 1.00; and (ii) thereafter, 0.65 to 1.0; and (B) in all other circumstances, 0.65 to 1.0. ARTICLE VI DEFAULTS SECTION 6.01. Events of Default. If one or more of the following events ("Events of Default") shall have occurred and be continuing: (a) the Borrower shall fail to pay when due any principal of any Loan or shall fail to pay any interest on any Loan within 5 Domestic Business Days after such interest shall become due, or shall fail to pay any fee or other amount payable hereunder within 5 Domestic Business Days after such fee or other amount becomes due; or (b) the Borrower shall fail to observe or perform any covenant contained in: (i) Sections 5.01(e), 5.02(ii), 5.03 through 5.05, inclusive, Sections 5.17 through 5.19, inclusive, and Section 5.21; or (ii) Sections 5.14, 5.15 or 5.20, and with respect to this clause (ii) such failure shall not have been cured within 10 days after the earlier to occur of (1) written notice thereof has been given to the Borrower by the Agent at the request of any Bank or (2) any 54 61 Responsible Officer of the Borrower otherwise becomes aware of any such failure; or (c) the Borrower shall fail to observe or perform any covenant or agreement contained or incorporated by reference in this Agreement (other than those covered by paragraph (a) or (b) above) and such failure shall not have been cured within 30 days after the earlier to occur of (i) written notice thereof has been given to the Borrower by the Agent at the request of any Bank or (ii) any Responsible Officer of the Borrower otherwise becomes aware of any such failure; or (d) any representation, warranty, certification or statement made by the Borrower in Article IV of this Agreement or in any certificate, financial statement or other document delivered pursuant to this Agreement shall prove to have been incorrect or misleading in any material respect when made (or deemed made); or (e) the Borrower or any Material Subsidiary shall fail to make any payment in respect of Indebtedness in an aggregate amount outstanding in excess of $10,000,000 (other than the Notes) when due or within any applicable grace period; or (f) any event or condition shall occur which results in the acceleration of the maturity of Indebtedness or, as a result of any event of default, there is a requirement for the mandatory purchase or sale of property subject to any "synthetic lease" (meaning a lease transaction under which the obligations of the Borrower are treated as debt for tax purposes but not under GAAP) and/or the payment of any final rent payment or guaranteed residual amount with respect thereto (any such obligation to purchase or sell property or pay a final rent payment or guaranteed residual amount under a synthetic lease as a result of an event of default thereunder being a "synthetic lease obligation") in an aggregate amount outstanding in excess of $10,000,000 of the Borrower or any Material Subsidiary (including, without limitation, any required mandatory prepayment or "put" of such Indebtedness or, as a result of an event of default, a synthetic lease obligation, to the Borrower or any Material Subsidiary) or enables (or, with the giving of notice or lapse of time or both, would enable) the holders of such Indebtedness or commitment therefor or lessor under any such synthetic lease or any Person acting on such holders' or lessor's behalf to accelerate the maturity thereof or terminate any such commitment or to require, as a result of an event of default, the purchase or sale of such property 55 62 or the payment of any other synthetic lease obligation (including, without limitation, any required mandatory prepayment or "put" of such Indebtedness or synthetic lease obligation to the Borrower or any Material Subsidiary); or (g) the Borrower or any Material Subsidiary shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally, or shall admit in writing its inability, to pay its debts as they become due, or shall take any corporate action to authorize any of the foregoing; or (h) an involuntary case or other proceeding shall be commenced against the Borrower or any Material Subsidiary seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 60 days; or an order for relief shall be entered against the Borrower or any Material Subsidiary under the federal bankruptcy laws as now or hereafter in effect; or (i) the Borrower or any member of the Controlled Group shall fail to pay when due any material amount which it shall have become liable to pay to the PBGC or to a Plan under Title IV of ERISA; or notice of intent to terminate a Plan or Plans shall be filed under Title IV of ERISA by the Borrower, any member of the Controlled Group, any plan administrator or any combination of the foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to terminate or to cause a trustee to be appointed to administer any such Plan or Plans or a proceeding shall be instituted by a fiduciary of any such Plan or Plans to enforce Section 515 or 4219(c)(5) of ERISA and such proceeding shall not have been dismissed within 30 days thereafter; or a condition shall exist by reason of which the PBGC would be entitled to obtain a decree adjudicating that any such Plan or Plans must be terminated, in each case 56 63 if the amount of Unfunded Vested Liabilities is in excess of $10,000,000; or (j) one or more judgments or orders for the payment of money in an aggregate amount in excess of $20,000,000 shall be rendered against the Borrower or any Material Subsidiary and such judgment or order shall continue unbonded, undischarged, unsatisfied and unstayed for a period of 30 days; or (k) a federal tax lien shall be filed against the Borrower or any Material Subsidiary under Section 6323 of the Code, if the amount involved is in excess of $20,000,000, or a lien of the PBGC shall be filed against the Borrower or any Material Subsidiary under Section 4068 of ERISA and in either case such lien shall remain undischarged for a period of 25 days after the date of filing, if the amount involved is in excess of $10,000,000; or (l) in any 12 month period or less, (i) 50% or more of the members of the full Board of Directors of the Borrower shall have resigned or been removed or replaced, or (ii) any Person or "Group" (as defined in Section 2(d)(3) of the Securities Exchange Act of 1934, as amended) (other than an employee benefit or stock ownership plan of the Borrower) shall have acquired, during such period, directly or indirectly, more than 30% of the capital stock (whether common or preferred or a combination thereof) of the Borrower, provided that the Borrower's purchase of treasury shares of shares of its capital stock outstanding on the date of the Original Agreement which results in one or more of the Borrower's shareholders of record as of the date of the Original Agreement owning 30% or more of the Borrower's Capital Stock shall not constitute an acquisition for purposes of this Section 6.01 (l); or (m) the occurrence of any event, act, occurrence, or condition which either has or which reasonably could be expected to cause a Material Adverse Effect. then, and in every such event, (i) the Agent shall, if requested by the Required Banks, by notice to the Borrower terminate the Commitments and they shall thereupon terminate, (ii) any Bank may terminate its obligation to fund a Money Market Loan in connection with any relevant Money Market Quote, and (iii) the Agent shall, if requested by the Required Banks, by notice to the Borrower declare the Notes (together with accrued interest thereon), and all other amounts payable hereunder and under the other Loan Documents, to be, and the Notes (together with accrued 57 64 interest thereon), and all other amounts payable hereunder and under the other Loan Documents shall thereupon become, immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower together with interest at the Default Rate accruing on the principal amount thereof from and after the date of such Event of Default; provided that if any Event of Default specified in paragraph (g) or (h) above occurs with respect to the Borrower, without any notice to the Borrower or any other act by the Agent or the Banks, the Commitments shall thereupon terminate and the Notes (together with accrued interest thereon) and all other amounts payable hereunder and under the other Loan Documents shall automatically and without notice become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower together with interest thereon at the Default Rate accruing on the principal amount thereof from and after the date of such Event of Default. Notwithstanding the foregoing, the Agent shall have available to it all other remedies at law or equity, and shall exercise any one or all of them at the request of the Required Banks. SECTION 6.02. Notice of Default. The Agent shall give notice to the Borrower of any Default under Section 6.01(b) or (c) promptly upon being requested to do so by any Bank and shall thereupon notify all the Banks thereof. ARTICLE VII THE AGENT SECTION 7.01. Appointment; Powers and Immunities. (a) Each Bank hereby irrevocably appoints and authorizes the Agent to act as its agent hereunder and under the other Loan Documents with such powers as are specifically delegated to the Agent by the terms hereof and thereof, together with such other powers as are reasonably incidental thereto. The Agent: (a) shall have no duties or responsibilities except as expressly set forth in this Agreement and the other Loan Documents, and shall not by reason of this Agreement or any other Loan Document be a trustee for any Bank; (b) shall not be responsible to the Banks for any recitals, statements, representations or warranties contained in this Agreement or any other Loan Document, or in any certificate or other document referred to or provided for in, or received by any Bank under, this Agreement or any other Loan Document, or for the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document or any other document referred to or provided for herein or therein or for any failure by the Borrower to perform any of its obligations 58 65 hereunder or thereunder; (c) shall not be required to initiate or conduct any litigation or collection proceedings hereunder or under any other Loan Document except to the extent requested by the Required Banks, and then only on terms and conditions satisfactory to the Agent, and (d) shall not be responsible for any action taken or omitted to be taken by it hereunder or under any other Loan Document or any other document or instrument referred to or provided for herein or therein or in connection herewith or therewith, except for its own gross negligence or wilful misconduct. The Agent may employ agents and attorneys-in-fact and shall not be responsible for the negligence or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. The provisions of this Article VII are solely for the benefit of the Agent and the Banks, and the Borrower shall not have any rights as a third party beneficiary of any of the provisions hereof. In performing its functions and duties under this Agreement and under the other Loan Documents, the Agent shall act solely as agent of the Banks and does not assume and shall not be deemed to have assumed any obligation towards or relationship of agency or trust with or for the Borrower. The duties of the Agent shall be ministerial and administrative in nature, and the Agent shall not have by reason of this Agreement or any other Loan Document a fiduciary relationship in respect of any Bank. (b) Each Bank hereby designates The Bank of Nova Scotia as Documentation Agent and NationsBank, N.A. as Syndications Agent. The Documentation Agent and the Syndications Agent, in such capacity, shall have no duties or obligations whatsoever under this Agreement or any other Loan Document or any other document or any matter related hereto and thereto, but shall nevertheless be entitled to all the indemnities and other protection afforded to the Agent under this Article VII. SECTION 7.02. Reliance by Agent. The Agent shall be entitled to rely upon any certification, notice or other communication (including any thereof by telephone, telecopier, telegram or cable) believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons, and upon advice and statements of legal counsel, independent accountants or other experts selected by the Agent. As to any matters not expressly provided for by this Agreement or any other Loan Document, the Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and thereunder in accordance with instructions signed by the Required Banks, and such instructions of the Required Banks in any action taken or failure to act pursuant thereto shall be binding on all of the Banks. 59 66 SECTION 7.03. Defaults. The Agent shall not be deemed to have knowledge of the occurrence of a Default or an Event of Default (other than the nonpayment of principal of or interest on the Loans) unless the Agent has received notice from a Bank or the Borrower specifying such Default or Event of Default and stating that such notice is a "Notice of Default". In the event that the Agent receives such a notice of the occurrence of a Default or an Event of Default, the Agent shall give prompt notice thereof to the Banks. The Agent shall give each Bank prompt notice of each nonpayment of principal of or interest on the Loans whether or not it has received any notice of the occurrence of such nonpayment. The Agent shall (subject to Section 9.06) take such action hereunder with respect to such Default or Event of Default as shall be directed by the Required Banks, provided that, unless and until the Agent shall have received such directions, the Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Banks. SECTION 7.04. Rights of Agent and its Affiliates as a Bank. With respect to the Loans made by the Agent and any Affiliate of the Agent, Wachovia in its capacity as a Bank hereunder and any Affiliate of the Agent or such Affiliate in its capacity as a Bank hereunder shall have the same rights and powers hereunder as any other Bank and may exercise the same as though Wachovia were not acting as the Agent, and the term "Bank" or "Banks" shall, unless the context otherwise indicates, include Wachovia in its individual capacity and any Affiliate of the Agent in its individual capacity. The Agent and any Affiliate of the Agent may (without having to account therefor to any Bank) accept deposits from, lend money to and generally engage in any kind of banking, trust or other business with the Borrower (and any of the Borrower's Affiliates) as if Wachovia were not acting as the Agent, and the Agent and any Affiliate of the Agent may accept fees and other consideration from the Borrower (in addition to any agency fees and arrangement fees heretofore agreed to between the Borrower and the Agent) for services in connection with this Agreement or any other Loan Document or otherwise without having to account for the same to the Banks. SECTION 7.05. Indemnification. Each Bank severally agrees to indemnify the Agent, to the extent the Agent shall not have been reimbursed by the Borrower, ratably in accordance with its Commitment, for any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, out-of-pocket costs, expenses (including, without limitation, reasonable counsel fees and disbursements actually incurred) or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against the Agent in any way 60 67 relating to or arising out of this Agreement or any other Loan Document or any other documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby (excluding, unless an Event of Default has occurred and is continuing, the normal administrative costs and expenses incident to the performance of its agency duties hereunder) or the enforcement of any of the terms hereof or thereof or any such other documents; provided that no Bank shall be liable for any of the foregoing to the extent they arise from the gross negligence or wilful misconduct of the Agent. If any indemnity furnished to the Agent for any purpose shall, in the opinion of the Agent, be insufficient or become impaired, the Agent may call for additional indemnity and cease, or not commence, to do the acts indemnified against until such additional indemnity is furnished. SECTION 7.06 Consequential Damages. THE AGENT SHALL NOT BE RESPONSIBLE OR LIABLE TO ANY BANK, THE BORROWER OR ANY OTHER PERSON OR ENTITY FOR ANY PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. SECTION 7.07. Payee of Note Treated as Owner. The Agent may deem and treat the payee of any Note as the owner thereof for all purposes hereof unless and until a written notice of the assignment or transfer thereof shall have been filed with the Agent and the provisions of Section 9.08(c) have been satisfied. Any requests, authority or consent of any Person who at the time of making such request or giving such authority or consent is the holder of any Note shall be conclusive and binding on any subsequent holder, transferee or assignee of that Note or of any Note or Notes issued in exchange therefor or replacement thereof. SECTION 7.08. Nonreliance on Agent and Other Banks. Each Bank agrees that it has, independently and without reliance on the Agent or any other Bank, and based on such documents and information as it has deemed appropriate, made its own credit analysis of the Borrower and decision to enter into this Agreement and that it will, independently and without reliance upon the Agent or any other Bank, and based on such documents and information as it shall deem appropriate at the time, continue to make its own analysis and decisions in taking or not taking action under this Agreement or any of the other Loan Documents. The Agent shall not be required to keep itself (or any Bank) informed as to the performance or observance by the Borrower of this Agreement or any of the other Loan Documents or any other document referred to or provided for herein or therein or to inspect the properties or books of the Borrower or any other 61 68 Person. Except for notices, reports and other documents and information expressly required to be furnished to the Banks by the Agent hereunder or under the other Loan Documents, the Agent shall not have any duty or responsibility to provide any Bank with any credit or other information concerning the affairs, financial condition or business of the Borrower or any other Person (or any of their Affiliates) which may come into the possession of the Agent. SECTION 7.09. Failure to Act. Except for action expressly required of the Agent hereunder or under the other Loan Documents, the Agent shall in all cases be fully justified in failing or refusing to act hereunder and thereunder unless it shall receive further assurances to its satisfaction by the Banks of their indemnification obligations under Section 7.05 against any and all liability and expense which may be incurred by the Agent by reason of taking, continuing to take, or failing to take any such action. SECTION 7.10. Resignation or Removal of Agent. Subject to the appointment and acceptance of a successor Agent as provided below, the Agent may resign at any time by giving notice thereof to the Banks and the Borrower and the Agent may be removed at any time with or without cause by the Required Banks. Upon any such resignation or removal, the Required Banks shall have the right to appoint a successor Agent, subject to the approval of the Borrower, which shall not be unreasonably withheld or delayed; provided, that no approval of the Borrower shall be required if a Default is in existence. If no successor Agent shall have been so appointed by the Required Banks and shall have accepted such appointment within 30 days after the retiring Agent's notice of resignation or the Required Banks' removal of the retiring Agent, then the retiring Agent may, on behalf of the Banks, appoint a successor Agent, subject to the approval of the Borrower, which shall not be unreasonably withheld or delayed; provided, that no approval of the Borrower shall be required if a Default is in existence. Any successor Agent shall be a bank which has a combined capital and surplus of at least $500,000,000. Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations hereunder. After any retiring Agent's resignation or removal hereunder as Agent, the provisions of this Article VII shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Agent hereunder. 62 69 ARTICLE VIII CHANGE IN CIRCUMSTANCES; COMPENSATION SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair. If on or prior to the first day of any Interest Period: (a) the Agent determines that deposits in Dollars (in the applicable amounts) are not being offered in the relevant market for such Interest Period, or (b) the Required Banks advise the Agent that the London Interbank Offered Rate, as determined by the Agent will not adequately and fairly reflect the cost to such Banks of funding Euro-Dollar Loans for such Interest Period, the Agent shall forthwith give notice thereof to the Borrower and the Banks, whereupon until the Agent notifies the Borrower that the circumstances giving rise to such suspension no longer exist, the obligations of the Banks to make the type of Fixed Rate Loans specified in such notice shall be suspended. Unless the Borrower notifies the Agent at least 2 Domestic Business Days before the date of any Borrowing of such type of Fixed Rate Loans for which a Notice of Borrowing has previously been given that it elects not to borrow on such date, such Borrowing shall instead be made as a Base Rate Borrowing. SECTION 8.02. Illegality. If, after the date hereof, the adoption of any applicable law, rule or regulation, or any change therein or any existing or future law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof (any such agency being referred to as an "Authority" and any such event being referred to as a "Change of Law"), or compliance by any Bank (or its Lending Office) with any request or directive (whether or not having the force of law) of any Authority shall make it unlawful or impossible for any Bank (or its Lending Office) to make, maintain or fund its Euro-Dollar Loans and such Bank shall so notify the Agent, the Agent shall forthwith give notice thereof to the other Banks and the Borrower, whereupon until such Bank notifies the Borrower and the Agent that the circumstances giving rise to such suspension no longer exist, the obligation of such Bank to make Euro-Dollar Loans shall be suspended. Before giving any notice to the Agent pursuant to this Section, such Bank shall designate a different Lending Office if such designation will avoid the need for giving such notice and will not, in the judgment of such Bank, be otherwise disadvantageous to such Bank. If such Bank shall determine that 63 70 it may not lawfully continue to maintain and fund any of its outstanding Euro-Dollar Loans to maturity and shall so specify in such notice, the Borrower shall, on the later of (i) the date such notice is received by the Borrower and (ii) the date such Change of Law becomes effective, prepay in full the then outstanding principal amount of each Euro-Dollar Loan of such Bank, together with accrued interest thereon and any amount due such Bank pursuant to Section 8.05(a). Concurrently with prepaying each such Euro-Dollar Loan, the Borrower shall borrow a Base Rate Loan in an equal principal amount from such Bank (on which interest and principal shall be payable contemporaneously with the related Euro-Dollar Loans of the other Banks), and such Bank shall make such a Base Rate Loan. SECTION 8.03. Increased Cost and Reduced Return. (a) If after the date hereof, a Change of Law or compliance by any Bank (or its Lending Office) with any request or directive (whether or not having the force of law) of any Authority: (i) shall impose, modify or deem applicable any reserve, special deposit or similar requirement (including, without limitation, any such requirement imposed by the Board of Governors of the Federal Reserve System, but excluding any such requirement included in an applicable Euro-Dollar Reserve Percentage) against assets of, deposits with or for the account of, or credit extended by, any Bank (or its Lending Office); or (ii) shall impose on any Bank (or its Lending Office) or on the London interbank market any other condition affecting its Fixed Rate Loans or Money Market Loans, its Notes or its obligation to make Fixed Rate Loans; and the result of any of the foregoing is to increase the cost to such Bank (or its Lending Office) of making or maintaining any Loan, or to reduce the amount of any sum received or receivable by such Bank (or its Lending Office) under this Agreement or under its Notes with respect thereto, by an amount deemed by such Bank to be material, then, within 15 days after demand by such Bank (with a copy to the Agent), the Borrower shall pay to such Bank such additional amount or amounts as will compensate such Bank for such increased cost or reduction; provided, however, that the Borrower shall not be responsible to such Bank for any increased cost or reduced return under this Section 8.03(a) which accrued at any time before that date which is 90 calendar days prior to the date upon which the Borrower is notified of same. (b) If any Bank shall have determined that after the date hereof the adoption of any applicable law, rule or regulation regarding capital adequacy, or any change therein, or 64 71 any change in the interpretation or administration thereof, or compliance by any Bank (or its Lending Office) with any request or directive regarding capital adequacy (whether or not having the force of law) of any Authority, has or would have the effect of reducing the rate of return on such Bank's capital as a consequence of its obligations hereunder to a level below that which such Bank could have achieved but for such adoption, change or compliance (taking into consideration such Bank's policies with respect to capital adequacy) by an amount deemed by such Bank to be material, then from time to time, within 15 days after demand by such Bank, the Borrower shall pay to such Bank such additional amount or amounts as will compensate such Bank for such reduction; provided, however, that the Borrower shall not be responsible to such Bank for any increased cost or reduced return under this Section 8.03(b) which accrued at any time before that date which is 90 calendar days prior to the date upon which the Borrower is notified of same. (c) Each Bank will promptly notify the Borrower and the Agent of any event of which it has knowledge, occurring after the date hereof, which will entitle such Bank to compensation pursuant to this Section and will designate a different Lending Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the judgment of such Bank, be otherwise disadvantageous to such Bank. A certificate of any Bank claiming compensation under this Section and setting forth the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error, provided such certificate shall set forth the basis of such claim and shall be accompanied by a statement of an officer of such Bank certifying that such claim for compensation is being made pursuant to a policy adopted by such Bank to seek such compensation generally from customers with similar types of loans. In determining such amount, such Bank may use any reasonable averaging and attribution methods. (d) The provisions of this Section 8.03 shall be applicable with respect to any Participant, Assignee or other Transferee, and any calculations required by such provisions shall be made based upon the circumstances of such Participant, Assignee or other Transferee. SECTION 8.04. Base Rate Loans Substituted for Euro-Dollar Loans. If (i) the obligation of any Bank to make or maintain any Euro-Dollar Loans has been suspended pursuant to Section 8.02 or (ii) any Bank has demanded compensation under Section 8.03, and the Borrower shall, by at least 5 Euro-Dollar Business Days' prior notice to such Bank through the Agent, have elected that the provisions of this Section shall apply to such Bank, then, unless and until such Bank notifies the Borrower that 65 72 the circumstances giving rise to such suspension or demand for compensation no longer apply: (a) all Loans which would otherwise be made by such Bank as Euro-Dollar Loans shall be made instead as Base Rate Loans, and interest and principal on such Loans shall be payable contemporaneously with the related Euro-Dollar Loans of the other Banks), and (b) after each of its Euro-Dollar Loans has been repaid, all payments of principal which would otherwise be applied to repay such Euro-Dollar Loans shall be applied to repay its Base Rate Loans instead. SECTION 8.05. Compensation. Upon the request of any Bank, delivered to the Borrower and the Agent, the Borrower shall pay to such Bank such amount or amounts as shall compensate such Bank for any loss, cost or expense (but not loss of margin or profit) incurred by such Bank as a result of: (a) any payment or prepayment (pursuant to Section 2.10, 2.11, 6.01, 8.02 or otherwise) of a Fixed Rate Loan on a date other than the last day of an Interest Period for such Loan; or (b) any failure by the Borrower to borrow a Fixed Rate Loan on the date for the Fixed Rate Borrowing of which such Fixed Rate Loan is a part specified in the applicable Notice of Borrowing delivered pursuant to Section 2.02 or notification of acceptance of Money Market Quotes pursuant to Section 2.03(e); such compensation to include, without limitation, an amount equal to the excess, if any, of (x) the amount of interest which would have accrued on the amount so paid or prepaid or not prepaid or borrowed for the period from the date of such payment, prepayment or failure to prepay or borrow to the last day of the then current Interest Period for such Fixed Rate Loan (or, in the case of a failure to prepay or borrow, the Interest Period for such Fixed Rate Loan which would have commenced on the date of such failure to prepay or borrow) at the applicable rate of interest for such Fixed Rate Loan provided for herein over (y) the amount of interest (as reasonably determined by such Bank) such Bank would have paid on deposits in Dollars of comparable amounts having terms comparable to such period placed with it by leading banks in the London interbank market (if such Fixed Rate Loan is a Euro-Dollar Loan); provided, that (i) the Borrower shall be responsible to such Bank only for its actual costs incurred in connection with same (i.e. not for any lost profits which were expected over the course of such Interest Period), (ii) such Bank shall take reasonable efforts to mitigate its damages in connection with same, and (iii) if such Fixed Rate Loan is a 66 73 Euro-Dollar Loan, the Borrower shall not be responsible to such Bank for such losses in excess of those amounts as such Bank would have incurred had it funded or maintained the Euro-Dollar Loan in the London interbank market (regardless of whether it actually did so). SECTION 8.06. Replacement of Bank. In the event that any Bank (a "Subject Bank") gives any notice under Section 8.02 resulting in the suspension of its obligation to make or maintain Euro-Dollar Loans, or requests compensation pursuant to Section 8.05, or requests compensation with respect to withholding Taxes pursuant to Section 2.12, or becomes insolvent or fails to make any Syndicated Loan in response to a request for borrowing by the Borrower where the Required Banks have made the Syndicated Loans to be made by them in response to such request, then, so long as such condition exists, the Borrower may designate another bank or financial institution (a "Replacement Bank") acceptable to the Agent (which acceptance will not be unreasonably withheld) and which is not an Affiliate of the Borrower, to assume the Subject Bank's Commitment hereunder and to purchase the Loans of the Subject Bank and the Subject Bank's rights under this Agreement and the Notes held by the Subject Bank, all without recourse to or representation or warranty by, or expense to the Subject Bank for a purchase price equal to the outstanding principal amount of the Loans payable to the Subject Bank plus any accrued but unpaid interest on such Loans and accrued but unpaid fees owing to the Subject Bank plus any amounts payable to the Subject Bank under Sections 2.12 and 8.05, and upon such assumption, purchase and substitution, and subject to the execution and delivery to the Agent by the Subject Bank and the Replacement Bank of an Assignment and Acceptance, the Replacement Bank shall succeed to the rights and obligations of the Subject Bank hereunder. In the event that the Borrower exercises its rights under the preceding sentence, the Subject Bank agrees to sell its Loans and rights under this Agreement and its Notes pursuant to the foregoing, and upon such sale, it shall no longer be a party hereto or have any rights or obligations hereunder; provided that the obligations of the Borrower to the Subject Bank under Article VIII and Section 9.03 with respect to events occurring or obligations arising before or as a result of such replacement shall survive such exercise. ARTICLE IX MISCELLANEOUS SECTION 9.01. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including telecopier or similar writing) and shall be given to 67 74 such party at its address or telecopier number set forth on the signature pages hereof or such other address or telecopier number as such party may hereafter specify for the purpose by notice to each other party. Each such notice, request or other communication shall be effective (i) if given by telecopier, when such telecopy is transmitted to the telecopier number specified in this Section and the confirmation is received, (ii) if given by mail, 3 Business Days after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid or (iii) if given by any other means, when delivered at the address specified in this Section; provided that notices to the Agent under Article II or Article VIII shall not be effective until received. SECTION 9.02. No Waivers. No failure or delay by the Agent or any Bank in exercising any right, power or privilege hereunder or under any Note or other Loan Document shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. SECTION 9.03. Expenses; Documentary Taxes. The Borrower shall pay (i) all reasonable out-of-pocket expenses of the Agent, including reasonable fees and disbursements of special counsel for the Agent, in connection with the preparation of this Agreement and the other Loan Documents, any waiver or consent hereunder or thereunder or any amendment hereof or thereof or any Default or alleged Default hereunder or thereunder and (ii) if a Default occurs, all reasonable out-of-pocket expenses incurred by the Agent and the Banks, including reasonable fees and disbursements of counsel, in connection with such Default and collection and other enforcement proceedings resulting therefrom, including reasonable out-of-pocket expenses incurred in enforcing this Agreement and the other Loan Documents. The Borrower shall indemnify the Agent and each Bank against any transfer taxes, documentary taxes, assessments or charges made by any Authority by reason of the execution and delivery of this Agreement or the other Loan Documents. SECTION 9.04. Indemnification. The Borrower shall indemnify the Agent, the Banks and each Affiliate thereof and their respective directors, officers, employees and agents from, and hold each of them harmless against, any and all losses, liabilities, claims or damages to which any of them may become subject, insofar as such losses, liabilities, claims or damages arise out of or result from any actual or proposed use by the Borrower of the proceeds of any extension of credit by any Bank hereunder or breach by the Borrower of this Agreement or any 68 75 other Loan Document or from any investigation, litigation (including, without limitation, any actions taken by the Agent or any of the Banks to enforce this Agreement or any of the other Loan Documents) or other proceeding (including, without limitation, any threatened investigation or proceeding) relating to the foregoing, and the Borrower shall reimburse the Agent and each Bank, and each Affiliate thereof and their respective directors, officers, employees and agents, upon demand for any reasonable expenses (including, without limitation, legal fees) incurred in connection with any such investigation or proceeding; but excluding any such losses, liabilities, claims, damages or expenses incurred by reason of the gross negligence or wilful misconduct of the Person to be indemnified. SECTION 9.05. Setoff; Sharing of Setoffs. (a) The Borrower hereby grants to the Agent and each Bank and, to the fullest extent permitted by law, each Affiliate of each Bank, the right to setoff, against the obligations of the Borrower under this Agreement, upon all deposits or deposit accounts, of any kind, or any interest in any deposits or deposit accounts thereof, now or hereafter pledged, mortgaged, transferred or assigned to the Agent or any such Bank or Affiliate of such Bank or otherwise in the possession or control of the Agent or any such Bank or Affiliate of such Bank for any purpose for the account or benefit of the Borrower and including any balance of any deposit account or of any credit of the Borrower with the Agent or any such Bank or Affiliate of such Bank, whether now existing or hereafter established, after the occurrence and during the continuance of an Event of Default, hereby authorizing the Agent and each Bank and each Affiliate of each Bank at any time or times with or without prior notice to apply such balances or any part thereof to such of the indebtedness and obligations owing by the Borrower hereunder to the Banks or their Affiliates and/or the Agent then past due and in such amounts as they may elect, and whether or not the collateral, if any, or the responsibility of other Persons primarily, secondarily or otherwise liable may be deemed adequate. For the purposes of this paragraph, all remittances and property shall be deemed to be in the possession of the Agent or any such Bank or its Affiliate as soon as the same may be put in transit to it by mail or carrier or by other bailee. (b) Each Bank agrees that if it or any of its Affiliates shall, by exercising any right of setoff or counterclaim or resort to collateral security or otherwise, receive payment of a proportion of the aggregate amount of principal and interest owing with respect to the Note held by it which is greater than the proportion received by any other Bank or its Affiliate in respect of the aggregate amount of all principal and interest owing with respect to the Note held by 69 76 such other Bank, the Bank receiving (directly or through its Affiliate) such proportionately greater payment shall purchase such participations in the Notes held by the other Banks owing to such other Banks, and such other adjustments shall be made, as may be required so that all such payments of principal and interest with respect to the Notes held by the Banks owing to such other Banks shall be shared by the Banks pro rata; provided that (i) nothing in this Section shall impair the right of any Bank or its Affiliates to exercise any right of setoff or counterclaim it may have and to apply the amount subject to such exercise to the payment of indebtedness of the Borrower other than its indebtedness under the Notes, and (ii) if all or any portion of such payment received by the purchasing Bank is thereafter recovered from such purchasing Bank, such purchase from each other Bank or its Affiliate shall be rescinded and such other Bank or Affiliate shall repay to the purchasing Bank the purchase price of such participation to the extent of such recovery together with an amount equal to such other Bank's ratable share (according to the proportion of (x) the amount of such other Bank's required repayment to (y) the total amount so recovered from the purchasing Bank) of any interest or other amount paid or payable by the purchasing Bank in respect of the total amount so recovered. The Borrower agrees, to the fullest extent it may effectively do so under applicable law, that any holder of a participation in a Note, whether or not acquired pursuant to the foregoing arrangements, may exercise rights of setoff or counterclaim and other rights with respect to such participation as fully as if such holder of a participation were a direct creditor of the Borrower in the amount of such participation. SECTION 9.06. Amendments and Waivers. (a) Any provision of this Agreement, the Notes or any other Loan Documents may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by the Borrower and the Required Banks (and, if the rights or duties of the Agent are affected thereby, by the Agent); provided that, no such amendment or waiver shall, unless signed by all Banks, (i) change the Commitment of any Bank or subject any Bank to any additional obligation, (ii) change the principal of or rate of interest on any Loan or any fees (other than fees payable to the Agent) hereunder, (iii) change the date fixed for any payment of principal of or interest on any Loan or any fees hereunder, (iv) change the amount of principal, interest or fees due on any date fixed for the payment thereof, (v) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Notes, or the percentage of Banks, which shall be required for the Banks or any of them to take any action under this Section or any other provision of this Agreement, (vi) change the manner of application of any payments made under this Agreement or the 70 77 Notes, (vii) release or substitute all or any substantial part of the collateral (if any) held as security for the Loans, or (viii) release any Guaranty given to support payment of the Loans. (b) The Borrower will not solicit, request or negotiate for or with respect to any proposed waiver or amendment of any of the provisions of this Agreement from or with any Bank, except on terms fully disclosed to the Agent (which terms the Agent shall be authorized to disclose to the Banks). Executed or true and correct copies of any waiver or consent effected pursuant to the provisions of this Agreement shall be delivered by the Borrower to the Agent (for delivery to each Bank) forthwith following the date on which the same shall have been executed and delivered by the requisite percentage of Banks. The Borrower will not, directly or indirectly, pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, to any Bank (in its capacity as such) as consideration for or as an inducement to the entering into by such Bank of any waiver or amendment of any of the terms and provisions of this Agreement unless such remuneration is concurrently paid, on the same terms, ratably to all such Banks. SECTION 9.07. No Margin Stock Collateral. Each of the Banks represents to the Agent and each of the other Banks that it in good faith is not, directly or indirectly (by negative pledge or otherwise), relying upon any Margin Stock as collateral in the extension or maintenance of the credit provided for in this Agreement. SECTION 9.08. Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that the Borrower may not assign or otherwise transfer any of its rights under this Agreement. (b) Any Bank may at any time sell to one or more Persons (each a "Participant") participating interests in any Loan owing to such Bank, any Note held by such Bank, any Commitment hereunder or any other interest of such Bank hereunder. In the event of any such sale by a Bank of a participating interest to a Participant, such Bank's obligations under this Agreement shall remain unchanged, such Bank shall remain solely responsible for the performance thereof, such Bank shall remain the holder of any such Note for all purposes under this Agreement, and the Borrower and the Agent shall continue to deal solely and directly with such Bank in connection with such Bank's rights and obligations under this Agreement. In no event shall a Bank that sells a participation be obligated to the Participant to take or refrain from taking any action hereunder 71 78 except that such Bank may agree that it will not (except as provided below), without the consent of the Participant, agree to (i) the change of any date fixed for the payment of principal of or interest on the related Loan or Loans, (ii) the change of the amount of any principal, interest or fees due on any date fixed for the payment thereof with respect to the related Loan or Loans, (iii) the change of the principal of the related Loan or Loans, (iv) any change in the rate at which either interest is payable thereon or (if the Participant is entitled to any part thereof) fee is payable hereunder from the rate at which the Participant is entitled to receive interest or fee (as the case may be) in respect of such participation, or (v) the release of any Guaranty given to support payment of the Loans. Each Bank selling to any Person other than an Affiliate of such Bank a participating interest in any Loan, Note, Commitment or other interest under this Agreement, other than a Money Market Loan or Money Market Note or participating interest therein, shall, within 10 Domestic Business Days of such sale, provide the Borrower and the Agent with written notification stating that such sale has occurred and identifying the Participant and the interest purchased by such Participant. The Borrower agrees that each Participant shall be entitled to the benefits of Article VIII with respect to its participation in Loans outstanding from time to time, subject to the provisions of Section 9.08(e). (c) Any Bank may at any time assign to one or more banks or financial institutions (each an "Assignee") all or a proportionate part of its rights and obligations under this Agreement, the Notes and the other Loan Documents, and such Assignee shall assume all such rights and obligations, pursuant to an Assignment and Acceptance, executed by such Assignee, such transferor Bank and the Agent (and, in the case of an Assignee that is not then a Bank, subject to clause (iii) below, by the Borrower); provided that (i) no interest may be sold by a Bank pursuant to this paragraph (c) unless the Assignee shall agree to assume ratably equivalent portions of the transferor Bank's Commitment, (ii) if a Bank is assigning only a portion of its Commitment, then, the amount of the Commitment being assigned (determined as of the effective date of the assignment) shall be in an amount not less than $15,000,000, (iii) except during the continuance of a Default, no interest may be sold by a Bank pursuant to this paragraph (c) to any Assignee that is not then a Bank (or an Affiliate of a Bank) without the consent of the Borrower and the Agent, which consent shall not be unreasonably withheld (provided that it shall not constitute the unreasonable withholding of consent if the Borrower shall decline to consent because (1) the Borrower makes a reasonable determination that it is materially more likely that the proposed Assignee will be entitled to compensation under Section 2.12 or 8.05, or to a greater amount of compensation thereunder than the transferor 72 79 Bank, or (2) the proposed Assignee has a combined capital and surplus of less than $500,000,000), and (iv) a Bank may not have more than 2 Assignees that are not then Banks at any one time. Upon (A) execution of the Assignment and Acceptance by such transferor Bank, such Assignee, the Agent and (if applicable) the Borrower, (B) delivery of an executed copy of the Assignment and Acceptance to the Borrower and the Agent, (C) payment by such Assignee to such transferor Bank of an amount equal to the purchase price agreed between such transferor Bank and such Assignee, and (D) payment of a processing and recordation fee of $2,500 to the Agent, such Assignee shall for all purposes be a Bank party to this Agreement and shall have all the rights and obligations of a Bank under this Agreement to the same extent as if it were an original party hereto with a Commitment as set forth in such instrument of assumption, and the transferor Bank shall be released from its obligations hereunder to a corresponding extent, and no further consent or action by the Borrower, the Banks or the Agent shall be required. Upon the consummation of any transfer to an Assignee pursuant to this paragraph (c), the transferor Bank, the Agent and the Borrower shall make appropriate arrangements so that, if required, a new Note is issued to each of such Assignee and such transferor Bank. (d) Subject to the provisions of Section 9.09, the Borrower authorizes each Bank to disclose to any Participant, Assignee or other transferee (each a "Transferee") and any prospective Transferee any and all financial information in such Bank's possession concerning the Borrower which has been delivered to such Bank by the Borrower pursuant to this Agreement or which has been delivered to such Bank by the Borrower in connection with such Bank's credit evaluation prior to entering into this Agreement. (e) No Transferee shall be entitled to receive any greater payment under Section 2.12 or 8.03 than the transferor Bank would have been entitled to receive with respect to the rights transferred, unless such transfer is made with the Borrower's prior written consent or by reason of the provisions of Section 8.02 or 8.03 requiring such Bank to designate a different Lending Office under certain circumstances or at a time when the circumstances giving rise to such greater payment did not exist. (f) Anything in this Section 9.08 to the contrary notwithstanding, any Bank may assign and pledge all or any portion of the Loans and/or obligations owing to it to any Federal Reserve Bank or the United States Treasury as collateral security pursuant to Regulation A of the Board of Governors of the Federal Reserve System and any Operating Circular issued by such Federal Reserve Bank, provided that any payment in respect 73 80 of such assigned Loans and/or obligations made by the Borrower to the assigning and/or pledging Bank in accordance with the terms of this Agreement shall satisfy the Borrower's obligations hereunder in respect of such assigned Loans and/or obligations to the extent of such payment. No such assignment shall release the assigning and/or pledging Bank from its obligations hereunder. SECTION 9.09. Confidentiality. Each Bank agrees to exercise commercially reasonable efforts to keep any information delivered or made available by the Borrower to it which is clearly indicated (orally or in writing) to be confidential information, confidential from anyone other than persons employed or retained by such Bank who are or are expected to become engaged in evaluating, approving, structuring or administering the Loans; provided that nothing herein shall prevent any Bank from disclosing such information (i) to any other Bank, (ii) upon the order of any court or administrative agency, (iii) upon the request or demand of any regulatory agency or authority having jurisdiction over such Bank, (iv) which has been publicly disclosed (unless a person responsible for administering this Agreement on behalf of such Bank has actual knowledge that such disclosure is made by a Person in violation of a confidentiality agreement with or confidentiality obligation to the Borrower or any Subsidiary), (v) to the extent reasonably required in connection with any litigation to which the Agent, any Bank or their respective Affiliates may be a party, (vi) to the extent reasonably required in connection with the exercise of any remedy hereunder, (vii) to such Bank's legal counsel and independent auditors and (viii) to any actual or proposed Participant, Assignee or other Transferee of all or part of its rights hereunder which has agreed in writing to be bound by the provisions of this Section 9.09; provided that should disclosure of any such confidential information be required by virtue of clause (ii) of the immediately preceding sentence, any relevant Bank shall promptly notify the Borrower of same so as to allow the Borrower to seek a protective order or to take any other appropriate action, unless such Bank is prohibited by law or any such order from giving such notice; provided, further, that, no Bank shall be required to delay compliance with any directive to disclose any such information so as to allow the Borrower to effect any such action. SECTION 9.10. Representation by Banks. Each Bank hereby represents that it is a commercial lender or financial institution which makes loans in the ordinary course of its business and that it will make its Loans hereunder for its own account in the ordinary course of such business; provided that, subject to Section 9.08, the disposition of the Note or Notes held by that Bank shall at all times be within its exclusive control. 74 81 SECTION 9.11. Obligations Several. The obligations of each Bank hereunder are several, and no Bank shall be responsible for the obligations or commitment of any other Bank hereunder. Nothing contained in this Agreement and no action taken by the Banks pursuant hereto shall be deemed to constitute the Banks to be a partnership, an association, a joint venture or any other kind of entity. The amounts payable at any time hereunder to each Bank shall be a separate and independent debt, and each Bank shall be entitled to protect and enforce its rights arising out of this Agreement or any other Loan Document and it shall not be necessary for any other Bank to be joined as an additional party in any proceeding for such purpose. SECTION 9.12. Georgia Law. This Agreement and each Note shall be construed in accordance with and governed by the law of the State of Georgia. SECTION 9.13. Severability. In case any one or more of the provisions contained in this Agreement, the Notes or any of the other Loan Documents should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby and shall be enforced to the greatest extent permitted by law. SECTION 9.14. Interest. In no event shall the amount of interest, and all charges, amounts or fees contracted for, charged or collected pursuant to this Agreement, the Notes or the other Loan Documents and deemed to be interest under applicable law (collectively, "Interest") exceed the highest rate of interest allowed by applicable law (the "Maximum Rate"), and in the event any such payment is inadvertently received by any Bank, then the excess sum (the "Excess") shall be credited as a payment of principal, unless the Borrower shall notify such Bank in writing that it elects to have the Excess returned forthwith. It is the express intent hereof that the Borrower not pay and the Banks not receive, directly or indirectly in any manner whatsoever, interest in excess of that which may legally be paid by the Borrower under applicable law. The right to accelerate maturity of any of the Loans does not include the right to accelerate any interest that has not otherwise accrued on the date of such acceleration, and the Agent and the Banks do not intend to collect any unearned interest in the event of any such acceleration. All monies paid to the Agent or the Banks hereunder or under any of the Notes or the other Loan Documents, whether at maturity or by prepayment, shall be subject to rebate of unearned interest as and to the extent required by applicable law. By the execution of this Agreement, the Borrower covenants, to the fullest extent permitted by law, that (i) the credit or return of any Excess shall constitute the acceptance by the 75 82 Borrower of such Excess, and (ii) the Borrower shall not seek or pursue any other remedy, legal or equitable , against the Agent or any Bank, based in whole or in part upon contracting for charging or receiving any Interest in excess of the Maximum Rate, other than the crediting of the Excess as set forth herein. For the purpose of determining whether or not any Excess has been contracted for, charged or received by the Agent or any Bank, all interest at any time contracted for, charged or received from the Borrower in connection with this Agreement, the Notes or any of the other Loan Documents shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread in equal parts throughout the full term of the Commitments. The Borrower, the Agent and each Bank shall, to the maximum extent permitted under applicable law, (i) characterize any non-principal payment as an expense, fee or premium rather than as Interest and (ii) exclude voluntary prepayments and the effects thereof. The provisions of this Section shall be deemed to be incorporated into each Note and each of the other Loan Documents (whether or not any provision of this Section is referred to therein). All such Loan Documents and communications relating to any Interest owed by the Borrower and all figures set forth therein shall, for the sole purpose of computing the extent of obligations hereunder and under the Notes and the other Loan Documents be automatically recomputed by the Borrower, and by any court considering the same, to give effect to the adjustments or credits required by this Section. SECTION 9.15. Interpretation. No provision of this Agreement or any of the other Loan Documents shall be construed against or interpreted to the disadvantage of any party hereto by any court or other governmental or judicial authority by reason of such party having or being deemed to have structured or dictated such provision. SECTION 9.16. Waiver of Jury Trial; Consent to Jurisdiction. The Borrower (a) and each of the Banks and the Agent irrevocably waives, to the fullest extent permitted by law, any and all right to trial by jury in any legal proceeding arising out of this Agreement, any of the other Loan Documents, or any of the transactions contemplated hereby or thereby, (b) submits to the nonexclusive personal jurisdiction in the State of Georgia, the courts thereof and the United States District Courts sitting therein, for the enforcement of this Agreement, the Notes and the other Loan Documents, (c) waives any and all personal rights under the law of any jurisdiction to object on any basis (including, without limitation, inconvenience of forum) to jurisdiction or venue within the State of Georgia for the purpose of litigation to enforce this Agreement, the Notes or the other Loan Documents, and (d) agrees that service of process may be made upon it in the manner prescribed in Section 76 83 9.01 for the giving of notice to the Borrower. Nothing herein contained, however, shall prevent the Agent from bringing any action or exercising any rights against any security and against the Borrower personally, and against any assets of the Borrower, within any other state or jurisdiction. SECTION 9.17. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. SECTION 9.18. Source of Funds -- ERISA. Each of the Banks hereby severally (and not jointly) represents to the Borrower that no part of the funds to be used by such Bank to fund the Loans hereunder from time to time constitutes (i) assets allocated to any separate account maintained by such Bank in which any employee benefit plan (or its related trust) has any interest nor (ii) any other assets of any employee benefit plan. As used in this Section, the terms "employee benefit plan" and "separate account" shall have the respective meanings assigned to such terms in Section 3 of ERISA. [Signatures are contained on the following pages.] 77 84 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, under seal, by their respective authorized officers as of the day and year first above written. FLOWERS INDUSTRIES, INC. (SEAL) By: /s/ C. M. Wood, III --------------------------------------- Title: Senior Vice President and Chief Financial Officer Flowers Industries, Inc. 200 U.S. Highway 10 South, P.O. Box 1338 Thomasville, Georgia 31799 Attention: C. Martin Wood, III Telecopier number: 912-225-3808 Confirmation number: 912-227-2208 COMMITMENTS WACHOVIA BANK, N.A., as Agent and as a Bank (SEAL) $110,000,000 By: /s/ Katie Howland --------------------------------------- Title: Senior Vice President Lending Office Wachovia Bank, N.A. 191 Peachtree Street, N.E. Atlanta, Georgia 30303-1757 Attention: Syndications Group Telecopier number: 404-332-5019 Confirmation number: 404-332-6971 $100,000,000 THE BANK OF NOVA SCOTIA, as Documentation Agent and as a Bank (SEAL) By: /s/ W. J. Brown --------------------------------------- Title: Vice President Lending Office The Bank of Nova Scotia 600 Peachtree Street, N.E. Suite 2700 Atlanta, Georgia 30308 Attention: William Zarrett Telecopier number: 404-888-8998 Confirmation number: 404-877-1504 78 85 NATIONSBANK, N.A., as Syndications Agent and as a Bank (SEAL) $100,000,000 By: /s/ Kathryn W. Robinson --------------------------------------- Title: Senior Vice President Lending Office NationsBank, N.A. 101 N. Tryon Street Charlotte, North Carolina 28255 Attention: Wayne Gero, Jr. Telecopier number: 704-386-8694 Confirmation number: 704-386-4576 $75,000,000 FIRST UNION NATIONAL BANK (SEAL) By: /s/ /Susan Tidwell --------------------------------------- Title: Senior Vice President Lending Office First Union National Bank 214 Hogan Street, MC-FL0070 Jacksonville, Florida 32202 Attention: Kathy Love Telecopier number: 904-489-1010 Confirmation number: 904-489-1729 $45,000,000 THE FIRST NATIONAL BANK OF CHICAGO (SEAL) By: /s/ Brett Neubert --------------------------------------- Title: Authorized Agent Lending Office The First National Bank of Chicago One First National Plaza Chicago, Illinois 60670 Attention: Brett Neubert Telecopier number: 312-732-2991 Confirmation number: 312-732-2752 79 86 $45,000,000 SUNTRUST BANK, ATLANTA (SEAL) By: /s/ Raymond B. King --------------------------------------- Title: Vice President By:/s/ Thomas R. Banks --------------------------------------- Title: Assistant Vice President Lending Office SunTrust Bank, Atlanta 25 Park Place, 23rd Floor Atlanta, Georgia 30303 Attention: Thomas Banks Telecopier number: 404-588-8833 Confirmation number: 404-724-3293 $25,000,000 COOPERATIEVE CENTRALE RAIFFEISEN- BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH (SEAL) By: /s/ --------------------------------------- Title: By: /s/ Robert B. Benoit --------------------------------------- Title: Senior Vice President Lending Office COOPERATIEVE CENTRALE RAIFFEISEN- BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH 245 Park Avenue New York, New York 10157 Attention: Brenda Lyew Telecopier number: 212-916-7930 Confirmation number: 212-916-7928 - --------------------- TOTAL COMMITMENTS: $500,000,000 80 87 EXHIBIT A-1 AMENDED AND RESTATED SYNDICATED LOAN NOTE Atlanta, Georgia January 30, 1998 For value received, FLOWERS INDUSTRIES, INC., a Georgia corporation (the "Borrower"), promises to pay to the order of __________________________________________________, a ____________________ (the "Bank"), for the account of its Lending Office, the principal sum of ___________________________________ AND NO/100 DOLLARS ($ ), or such lesser amount as shall equal the unpaid principal amount of each Syndicated Loan made by the Bank to the Borrower pursuant to the Credit Agreement referred to below, on the dates and in the amounts provided in the Credit Agreement. The Borrower promises to pay interest on the unpaid principal amount of this Amended and Restated Syndicated Loan Note on the dates and at the rate or rates provided for in the Credit Agreement. Interest on any overdue principal of and, to the extent permitted by law, overdue interest on the principal amount hereof shall bear interest at the Default Rate, as provided for in the Credit Agreement. All such payments of principal and interest shall be made in lawful money of the United States in Federal or other immediately available funds at the office of Wachovia Bank, N.A., 191 Peachtree Street, N.E., Atlanta, Georgia 30303-1757, or such other address as may be specified from time to time pursuant to the Credit Agreement. All Syndicated Loans made by the Bank, the respective maturities thereof, the interest rates from time to time applicable thereto, and all repayments of the principal thereof shall be recorded by the Bank and, prior to any transfer hereof, endorsed by the Bank on the schedule attached hereto, or on a continuation of such schedule attached to and made a part hereof; provided that the failure of the Bank to make any such recordation or endorsement shall not affect the obligations of the Borrower hereunder or under the Credit Agreement. This Amended and Restated Syndicated Loan Note is one of the Syndicated Loan Notes referred to in the Amended and Restated Credit Agreement dated as of January 30, 1998 among the Borrower, the Banks listed on the signature pages thereof, Wachovia Bank, N.A., as Agent, The Bank of Nova Scotia, as Documentation Agent, and NationsBank, N.A., as Syndications Agent (as the same may be amended and modified from time to time, the "Credit Agreement"). Terms defined in the Credit Agreement are used herein with the same meanings. Reference is made to the Credit Agreement for provisions for the optional and mandatory prepayment and the repayment hereof and the acceleration of the maturity hereof, as well as the obligation of the Borrower to pay 81 88 all costs of collection, including reasonable attorneys fees, in the event this Amended and Restated Syndicated Loan Note is collected by law or through an attorney at law. The Borrower hereby waives presentment, demand, protest, notice of demand, protest and nonpayment and any other notice required by law relative hereto, except to the extent as otherwise may be expressly provided for in the Credit Agreement. IN WITNESS WHEREOF, the Borrower has caused this Amended and Restated Syndicated Loan Note to be duly executed, under seal, by its duly authorized officer as of the day and year first above written. FLOWERS INDUSTRIES, INC. (SEAL) By: --------------------------------------- Title: 82 89 Amended and Restated Syndicated Loan Note (cont'd) SYNDICATED LOANS AND PAYMENTS OF PRINCIPAL - --------------------------------------------------------------------------------
Base Rate Amount Amount of or Euro- of Principal Maturity Notation Date Dollar Loan Loan Repaid Date Made By - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
83 90 EXHIBIT A-2 AMENDED AND RESTATED MONEY MARKET LOAN NOTE As of January 30, 1998 For value received, FLOWERS INDUSTRIES, INC., a Georgia corporation (the "Borrower"), promises to pay to the order of __________, a _______________ (the "Bank"), for the account of its Lending Office, the principal sum of FIVE HUNDRED MILLION AND NO/100 DOLLARS ($500,000,000), or such lesser amount as shall equal the unpaid principal amount of each Money Market Loan made by the Bank to the Borrower pursuant to the Credit Agreement referred to below, on the dates and in the amounts provided in the Credit Agreement. The Borrower promises to pay interest on the unpaid principal amount of this Amended and Restated Money Market Loan Note on the dates and at the rate or rates provided for in the Credit Agreement referred to below. Interest on any overdue principal of and, to the extent permitted by law, overdue interest on the principal amount hereof shall bear interest at the Default Rate, as provided for in the Credit Agreement. All such payments of principal and interest shall be made in lawful money of the United States in Federal or other immediately available funds at the office of Wachovia, N.A., 191 Peachtree Street, N.E., Atlanta, Georgia 30303-1757, or such other address as may be specified from time to time pursuant to the Credit Agreement. All Money Market Loans made by the Bank, the respective maturities thereof, the interest rates from time to time applicable thereto, and all repayments of the principal thereof shall be recorded by the Bank and, prior to any transfer hereof, endorsed by the Bank on the schedule attached hereto, or on a continuation of such schedule attached to and made a part hereof; provided that the failure of the Bank to make any such recordation or endorsement shall not affect the obligations of the Borrower hereunder or under the Credit Agreement. This Amended and Restated Money Market Loan Note is one of the Money Market Loan Notes referred to in the Amended and Restated Credit Agreement dated as of January 30, 1998 among the Borrower, the Banks listed on the signature pages thereof, Wachovia Bank, N.A., as Agent, The Bank of Nova Scotia, as Documentation Agent, and NationsBank, N.A., as Syndications Agent (as the same may be amended and modified from time to time, the "Credit Agreement"). Terms defined in the Credit Agreement are used herein with the same meanings. Reference is made to the Credit Agreement for provisions for the optional and mandatory prepayment and the repayment hereof and the acceleration of the maturity hereof, as well as the obligation of the Borrower to pay all costs of collection, including reasonable attorneys fees, in the event this Amended and Restated Money Market Loan Note is collected by law or through an attorney at law. 84 91 The Borrower hereby waives presentment, demand, protest, notice of demand, protest and nonpayment and any other notice required by law relative hereto, except to the extent as otherwise may be expressly provided for in the Credit Agreement. . IN WITNESS WHEREOF, the Borrower has caused this Amended and Restated Money Market Loan Note to be duly executed, under seal, by its duly authorized officer as of the day and year first above written. FLOWERS INDUSTRIES, INC. (SEAL) By: --------------------------------------- Title: 85 92 Amended and Restated Money Market Loan Note (cont'd) MONEY MARKET LOANS AND PAYMENTS OF PRINCIPAL - --------------------------------------------------------------------------------
Amount Amount of Stated Interest of Principal Maturity Notation Date Rate Loan Repaid Date Made By - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
86 93 EXHIBIT B OPINION OF COUNSEL FOR THE BORROWER [Dated as provided in Section 3.01 of the Credit Agreement] To the Banks and the Agent Referred to Below c/o Wachovia Bank, N.A., as Agent 191 Peachtree Street, N.E. Atlanta, Georgia 30303-1757 Attn: Syndications Group Dear Sirs: I am Assistant General Counsel of Flowers Industries, Inc., a Georgia corporation (the "Borrower") in connection with the Amended and Restated Credit Agreement (the "Credit Agreement") dated as of January 30, 1998, among the Borrower, the banks listed on the signature pages thereof, Wachovia Bank, N.A., as Agent, The Bank of Nova Scotia, as Documentation Agent, and NationsBank, N.A., as Syndications Agent. Terms defined in the Credit Agreement are used herein as therein defined. I have examined originals or copies, certified or otherwise identified to my satisfaction, of such documents, corporate records, certificates of public officials and other instruments and have conducted such other investigations of fact and law as I have deemed necessary or advisable for purposes of this opinion. I have assumed for purposes of my opinions set forth below that the execution and delivery of the Credit Agreement by each Bank and by the Agent have been duly authorized by each Bank and by the Agent. Upon the basis of the foregoing, I am of the opinion that: 1. The Borrower is a corporation duly incorporated, validly existing and in good standing under the laws of Georgia and has all corporate powers required to carry on its business as now conducted. 2. The execution, delivery and performance by the Borrower of the Credit Agreement and the Notes (i) are within the Borrower's corporate powers, (ii) have been duly authorized by all necessary corporate action, (iii) require no action by or in respect of, or filing with, any governmental body, agency or 87 94 official, (iv) do not contravene, or constitute a default under, any provision of applicable law or regulation or of the certificate of incorporation or by-laws of the Borrower or of any agreement, judgment, injunction, order, decree or other instrument which to our knowledge is binding upon the Borrower and (v) except as provided in the Credit Agreement, do not result in the creation or imposition of any Lien on any asset of the Borrower or any of its Subsidiaries. 3. The Credit Agreement constitutes a valid and binding agreement of the Borrower, enforceable against the Borrower in accordance with its terms, and the Notes constitute valid and binding obligations of the Borrower, enforceable in accordance with their respective terms, except as such enforceability may be limited by: (i) bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally and (ii) general principles of equity. 4. There is no action, suit or proceeding pending, or threatened, against or affecting the Borrower or any of its Subsidiaries before any court or arbitrator or any governmental body, agency or official in which there is a reasonable possibility of an adverse decision which could materially adversely affect the business, consolidated financial position or consolidated results of operations of the Borrower and its Consolidated Subsidiaries, considered as a whole, or which in any manner questions the validity or enforceability of the Credit Agreement or any Note. 5. Each of the Borrower's Subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted. 6. Neither the Borrower nor any of its Subsidiaries is an "investment company" within the meaning of the Investment Company Act of 1940, as amended. 7. Neither the Borrower nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of a "holding company", or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company", as such terms are defined in the Public Utility Holding Company Act of 1935, as amended. The opinion contained in Paragraph 2(iv) hereof is qualified to the effect that no opinion is given thereunder as to Regulations G, T, U or X of the Board of Governors of the Federal Reserve System. I am qualified to practice in the State of Georgia and do not purport to be experts on any laws other than the laws of the United States and the State of Georgia and this opinion is rendered 88 95 only with respect to such laws. I have made no independent investigation of the laws of any other jurisdiction. This opinion is delivered to you in connection with the transaction referenced above and may only be relied upon by you, any Assignee, Participant or other Transferee under the Credit Agreement, and Jones, Day, Reavis & Pogue without our prior written consent. Very truly yours, 89 96 EXHIBIT C OPINION OF JONES, DAY, REAVIS & POGUE, SPECIAL COUNSEL FOR THE AGENT [Dated as provided in Section 3.01 of the Credit Agreement] To the Banks and the Agent Referred to Below c/o Wachovia Bank, N.A., as Agent 191 Peachtree Street, N.E. Atlanta, Georgia 30303-1757 Attn: Syndications Group Dear Sirs: We have participated in the preparation of the Amended and Restated Credit Agreement (the "Credit Agreement") dated as of January 30, 1998, among Flowers Industries, Inc., a Georgia corporation (the "Borrower"), the banks listed on the signature pages thereof (the "Banks"), Wachovia Bank, N.A., as Agent (the "Agent"), The Bank of Nova Scotia, as Documentation Agent, and NationsBank, N.A., as Syndications Agent, and have acted as special counsel for the Agent for the purpose of rendering this opinion pursuant to Section 3.01(d) of the Credit Agreement. Terms defined in the Credit Agreement are used herein as therein defined. This opinion letter is limited by, and is in accordance with, the January 1, 1992 edition of the Interpretive Standards applicable to Legal Opinions to Third Parties in Corporate Transactions adopted by the Legal Opinion Committee of the Corporate and Banking Law Section of the State Bar of Georgia which Interpretive Standards are incorporated herein by this reference. We have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials and other instruments and have conducted such other investigations of fact and law as we have deemed necessary or advisable for purposes of this opinion. Upon the basis of the foregoing, and assuming the due authorization, execution and delivery of the Credit Agreement and each of the Notes by or on behalf of the Borrower, we are of the opinion that the Credit Agreement constitutes a valid and binding agreement of the Borrower and each Note constitutes valid and binding obligations of the Borrower, in each case enforceable in 90 97 accordance with its terms except as: (i) the enforceability thereof may be affected by bankruptcy, insolvency, reorganization, fraudulent conveyance, voidable preference, moratorium or similar laws applicable to creditors' rights or the collection of debtors' obligations generally; (ii) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability; and (iii) the enforceability of certain of the remedial, waiver and other provisions of the Credit Agreement and the Notes may be further limited by the laws of the State of Georgia; provided that such additional laws do not, in our opinion, substantially interfere with the practical realization of the benefits expressed in the Credit Agreement and the Notes, except for the economic consequences of any procedural delay which may result from such laws. In giving the foregoing opinion, we express no opinion as to the effect (if any) of any law of any jurisdiction except the State of Georgia. We express no opinion as to the effect of the compliance or noncompliance of the Agent or any of the Banks with any state or federal laws or regulations applicable to the Agent or any of the Banks by reason of the legal or regulatory status or the nature of the business of the Agent or any of the Banks. This opinion is delivered to you in connection with the transaction referenced above and may only be relied upon by you and any Assignee, Participant or other Transferee under the Credit Agreement without our prior written consent. Very truly yours, 91 98 EXHIBIT D ASSIGNMENT AND ACCEPTANCE Dated ___________ __,____ Reference is made to the Amended and Restated Credit Agreement dated as of January 30, 1998 (together with all amendments and modifications thereto, the "Credit Agreement") among Flowers Industries, Inc., a Georgia corporation (the "Borrower"), the Banks (as defined in the Credit Agreement), Wachovia Bank, N.A., as Agent (the "Agent"), The Bank of Nova Scotia, as Documentation Agent, and NationsBank, N.A., as Syndications Agent. Terms defined in the Credit Agreement are used herein with the same meaning. _______________________________________ (the "Assignor") and ___________________________________________________ (the "Assignee") agree as follows: 1. The Assignor hereby sells and assigns to the Assignee, without recourse to the Assignor, and the Assignee hereby purchases and assumes from the Assignor, a ___% interest in and to all of the Assignor's rights and obligations under the Credit Agreement as of the Effective Date (as defined below) (including, without limitation, a ___% interest (which on the Effective Date hereof is $________) in the Assignor's Commitment and a ______ interest (which on the Effective Date hereof is $ ________) in the Syndicated Loans [and Money Market Loans] owing to the Assignor and a ___% interest in the Note[s] held by the Assignor (which on the Effective Date hereof is $________). 2. The Assignor (i) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement or any other instrument or document furnished pursuant thereto, other than that it is the legal and beneficial owner of the interest being assigned by it hereunder, that such interest is free and clear of any adverse claim and that as of the date hereof its Commitment (without giving effect to assignments thereof which have not yet become effective) is $__________ and the aggregate outstanding principal amount of Syndicated Loans [and Money Market Loans] owing to it (without giving effect to assignments thereof which have not yet become effective) is $ ________; (ii) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower or the performance or observance by the Borrower of any of its obligations under the Credit Agreement or any other instrument or document furnished pursuant thereto; and (iii) attaches the Note[s] referred to in paragraph 1 above and requests that the Agent exchange such Note[s] for [a new Syndicated Loan Note dated 92 99 _____________, ______ in the principal amount of $__________ payable to the order of the Assignee and a new Money Market Loan Note dated ___________, ____ in the principal amount of $______________ payable to the order of the Assignee] [new Notes as follows: a (i) Syndicated Loan Note dated __________, _____ in the principal amount of $___________ payable to the order of the Assignor (ii) Syndicated Loan Note dated __________, ____ in the principal amount of $_________ payable to the order of the Assignee, and (iii) and a new Money Market Loan Note dated ___________, ____ in the principal amount of $______________ payable to the order of the Assignee]. 3. The Assignee (i) confirms that it has received a copy of the Credit Agreement, together with copies of the financial statements referred to in Section 4.04(a) thereof (or any more recent financial statements of the Borrower delivered pursuant to Section 5.01(a) or (b) thereof) and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (ii) agrees that it will, independently and without reliance upon the Agent, the Assignor or any other Bank and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement; (iii) confirms that it is a bank or financial institution; (iv) appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under the Credit Agreement as are delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto; (v) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement are required to be performed by it as a Bank; (vi) specifies as its Lending Office (and address for notices) the office set forth beneath its name on the signature pages hereof, (vii) represents and warrants that the execution, delivery and performance of this Assignment and Acceptance are within its corporate powers and have been duly authorized by all necessary corporate action, (viii) makes the representation and warranty contained in Section 9.18 of the Credit Agreement[, and (ix) attaches the forms prescribed by the Internal Revenue Service of the United States certifying as to the Assignee's status for purposes of determining exemption from United States withholding taxes with respect to all payments to be made to the Assignee under the Credit Agreement and the Notes or such other documents as are necessary to indicate that all such payments are subject to such taxes at a rate reduced by an applicable tax treaty]. 4. The Effective Date for this Assignment and Acceptance shall be _____________, ____ (the "Effective Date"). Following the execution of this Assignment and Acceptance, it will be delivered to the Agent for execution and acceptance by the Agent and to the Borrower for execution by the Borrower. 5. Upon such execution and acceptance by the Agent [and execution by the Borrower] [IF REQUIRED BY THE CREDIT AGREEMENT], 93 100 from and after the Effective Date, (i) the Assignee shall be a party to the Credit Agreement and, to the extent rights and obligations have been transferred to it by this Assignment and Acceptance, have the rights and obligations of a Bank thereunder and (ii) the Assignor shall, to the extent its rights and obligations have been transferred to the Assignee by this Assignment and Acceptance, relinquish its rights (other than under Sections 8.03, 9.03 and 9.04 of the Credit Agreement) and be released from its obligations under the Credit Agreement. 6. Upon such execution and acceptance by the Agent [and execution by the Borrower] [IF REQUIRED BY THE CREDIT AGREEMENT], from and after the Effective Date, the Agent shall make all payments in respect of the interest assigned hereby to the Assignee. The Assignor and Assignee shall make all appropriate adjustments in payments for periods prior to such acceptance by the Agent directly between themselves. 7. This Assignment and Acceptance shall be governed by, and construed in accordance with, the laws of the State of Georgia. [NAME OF ASSIGNOR] By: ---------------------------------------- Title: [NAME OF ASSIGNEE] By: ---------------------------------------- Title: Lending Office: [Address] WACHOVIA BANK, N.A., As Agent By: ---------------------------------------- Title: FLOWERS INDUSTRIES, INC. IF REQUIRED BY THE CREDIT AGREEMENT By: ---------------------------------------- Title: 94 101 EXHIBIT E NOTICE OF BORROWING __________________, ____ Wachovia Bank, N.A., as Agent 191 Peachtree Street, N.E. Atlanta, Georgia 30303-1757 Attention: Syndications Group Re: Amended and Restated Credit Agreement (as amended and modified from time to time, the "Credit Agreement") dated as of January 30, 1998, by and among Flowers Industries, Inc., the Banks from time to time parties thereto, Wachovia Bank, as Agent, The Bank of Nova Scotia, as Documentation Agent, and NationsBank, N.A., as Syndications Agent. Gentlemen: Unless otherwise defined herein, capitalized terms used herein shall have the meanings attributable thereto in the Credit Agreement. This Notice of Borrowing is delivered to you pursuant to Section 2.02 of the Credit Agreement. The Borrower hereby requests a [Euro-Dollar Borrowing] [Base Rate Borrowing] in the aggregate principal amount of $___________ to be made on ____________, ____, and for interest to accrue thereon at the rate established by the Credit Agreement for [Euro-Dollar Loans] [Base Rate Loans]. The duration of the Interest Period with respect thereto shall be [1 month] [2 months] [3 months] [6 months] [30 days]. The Borrower has caused this Notice of Borrowing to be executed and delivered by its duly authorized officer this _____day of ______, _________. FLOWERS INDUSTRIES, INC. By: ---------------------------------------- Title: 95 102 EXHIBIT F COMPLIANCE CERTIFICATE Reference is made to the Amended and Restated Credit Agreement dated as of January 30, 1998 (as modified and supplemented and in effect from time to time, the "Credit Agreement") among Flowers Industries, Inc., the Banks from time to time parties thereto, Wachovia Bank, N.A., as Agent, The Bank of Nova Scotia, as Documentation Agent, and NationsBank, N.A., as Syndications Agent. Capitalized terms used herein shall have the meanings ascribed thereto in the Credit Agreement. Pursuant to Section 5.01(c) of the Credit Agreement, ___________________, the duly authorized ___________________________ of Flowers Industries, Inc., hereby (A) certifies to the Agent and the Banks that the information contained in the Compliance Check List attached hereto is true, accurate and complete as of __________, ____, (B) certifies to the Agent and the Banks that no Default is in existence on and as of the date hereof and (C) restates and reaffirms that the representations and warranties contained in Article IV of the Credit Agreement are true on and as of the date hereof as though restated on and as of this date. FLOWERS INDUSTRIES, INC. By: ---------------------------------------- Title: 96 103 COMPLIANCE CHECK LIST Flowers Industries, Inc. __________________________ _______________, ____ 1. Loans and Advances (Section 5.14) Neither the Borrower nor any of its Material Subsidiaries shall make loans or advances to any Person except as permitted by Section 5.16 and except: (i) loans or advances to employees not exceeding $10,000,000 in the aggregate principal amount outstanding at any time, in each case made in the ordinary course of business and consistent with practices existing on the Closing Date; (ii) deposits required by government agencies or public utilities; (iii) loans or advances to and among Borrower and its Wholly Owned Subsidiaries; and (iv) other loans or advances, to Persons other than the Unrestricted Subsidiaries (loans and advances to Unrestricted Subsidiaries not being permitted), in an aggregate amount outstanding which, together with Investments permitted by clause (vi) of Section 5.15, do not exceed 15% of Consolidated Total Assets as of the last day of the immediately preceding Fiscal Quarter; provided that after giving effect to the making of any loans, advances or deposits permitted by this Section, no Default shall be in existence or be created thereby. (a) loans and advances to employees $__________ (b) lesser of (a) and $10,000,000 $__________ (c) other loans and advances not permitted by clauses (i) through (iii), inclusive(1) $__________ (d) sum of (c) and line (a) of paragraph 2 below $__________ (e) Consolidated Total Assets $__________ (f) 15% of (e) $__________ Limitation (d) may not exceed (f)
2. Investments (Section 5.15) Neither the Borrower nor any of its Restricted Subsidiaries shall make Investments in any Person except as permitted by - ------------------ (1) Loans and advances to the Unrestricted Subsidiaries are not permitted and may not be included in this category. 97 104 Section 5.14 and except Investments in (i) direct obligations of the United States Government maturing within one year, (ii) certificates of deposit issued by a commercial bank whose credit is satisfactory to the Agent, (iii) commercial paper rated A1 or the equivalent thereof by Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc. or P1 or the equivalent thereof by Moody's Investors Service, Inc. and in either case maturing within 6 months after the date of acquisition; (iv) tender bonds the payment of the principal of and interest on which is fully supported by a letter of credit issued by a United States bank whose long-term certificates of deposit are rated at least AA or the equivalent thereof by Standard & Poor's Corporation and Aa or the equivalent thereof by Moody's Investors Service, Inc.; (v) Investments by the Borrower or any Restricted Subsidiary in the stock (or other ownership interests) or assets of any Person in the food or beverage business or any related line of business and/or (vi) other Investments in an aggregate amount outstanding which, together with loans and advances permitted by clause (iv) of Section 5.14, do not exceed 15% of Consolidated Total Assets as of the last day of the immediately preceding Fiscal Quarter, and which, as to Investments in Keebler, constitute Permitted Keebler Investments; provided, however, immediately after giving effect to the making of any Investment, no Default shall have occurred and be continuing. (a) Investments not permitted by clauses (i) through (v), inclusive $__________ (b) sum of (a) and line (c) of paragraph 1 above $__________ (c) Consolidated Total Assets $__________ (d) 15% of (c) $__________ Limitation (b) may not exceed (d) 3. Negative Pledge (Section 5.16) (a) Amount of Indebtedness secured by Liens permitted by Sections 5.1(a) through 5.16(g), inclusive, and (l) and (n) Schedule - 1 $__________ (b) Amount of Debt secured by Liens not permitted by Section (q) Schedule - 1 $__________ (c) Aggregate amount of Indebtedness of Restricted Subsidiaries permitted by Section 5.20(iv) $__________ (d) Sum of (b) and (c) $__________
98 105 (e) Consolidated Net Worth $__________ (f) 20% of (e) $__________ Limitation (d) may not exceed (f)
3. Fixed Charge Coverage Ratio (Section 5.17) At the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending December 13, 1997, the ratio of EBILT to Consolidated Fixed Charges shall at all times be greater than 2.0 to 1.0. (a) Consolidated Net Income - Schedule 2 $__________ (b) Consolidated Interest Expense - Schedule 2 $__________ (c) payments on operating leases and rental agreements $__________ (d) taxes - Schedule 2 $__________ (e) sum of (a) plus (b) plus (c) plus (d) $__________ (f) sum of (b) plus (c) $__________ Ratio of (e) to (f) Requirement >2.0 to 1.0
4. Leverage Ratio (Section 5.18) The Leverage Ratio shall at all times be less than: (A) provided that the condition set forth in Section 3.01(i) regarding the Keebler Acquisition is satisfied within the time permitted thereby, and for so long as Keebler is a Subsidiary, (i) from the Closing Date through whichever is the earlier of (x) January 2, 1999 or (y) the date of the Next Public Offering, 0.75 to 1.00; and (ii) thereafter, 0.65 to 1.0; and (B) in all other circumstances, 0.65 to 1.0. (a) Consolidated Total Debt Schedule - 4 $__________ (b) Consolidated Net Worth $__________
99 106 COMPLIANCE CHECK LIST Flowers Industries, Inc. __________________________ _______________, ____ (c) Sum of (a) plus (b) $__________ Ratio of (a) to (c) ___________ Requirement [< 0.75 to 1.00] [< 0.65 to 1.00]
5. Minimum Consolidated Net Worth (Section 5.19) Consolidated Net Worth will at no time be less than: (A) prior to the date of the Next Public Offering, the greater of (i) 85% of Consolidated Net Worth as of the end of the Fiscal Quarter ending September 20, 1997, plus the sum of (x) 50% of the cumulative Net Proceeds of Capital Stock received during any period after the Closing Date, plus (y) 50% of any equity resulting from a conversion of Indebtedness during any period after the Closing Date, less (z) any amount of equity repurchased during any period after the Closing Date, calculated quarterly at the end of each Fiscal Quarter; and (ii) $200,000,000; and (B) from and after the date of the Next Public Offering, the greater of (i) 85% of Consolidated Net Worth as of the end of the Fiscal Quarter most recently ended, adjusted to give effect on a proforma basis to the Next Public Offering, plus the sum of (x) 50% of the cumulative Net Proceeds of Capital Stock received during any period after the Next Public Offering, plus (y) 50% of any equity resulting from a conversion of Indebtedness during any period after the Next Public Offering, less (z) any amount of equity repurchased during any period after the Next Public Offering, calculated quarterly at the end of each Fiscal Quarter; and (ii) $450,000,000. (a) cumulative Net Capital Proceeds since [Closing Date][Next Public Offering] $__________ (b) 50% of (a) $__________ (c) equity resulting from Indebtedness conversion since [Closing Date][Next Public Offering] $__________ (d) amount of equity repurchased since [Closing Date][Next Public
100 107 COMPLIANCE CHECK LIST Flowers Industries, Inc. __________________________ _______________, ____ Offering] $__________ (e) (c) less (d) $__________ (f) 50% of (e) $__________ (g) Consolidated Net Worth as of [Fiscal Quarter ended September 20, 1997][on the date of the Fiscal Quarter most recently ended, adjusted to give proforma effect to the Next Public Offering] $__________ (h) 85% of (g) $__________ (i) sum of (b), plus (f), plus (h) $__________ (j) Consolidated Net Worth $__________
Limitation (j) may not exceed lesser of (i) and [$200,000,000] [$450,000,000] 6. Adjusted Leverage Ratio (Section 5.21) The ratio of Adjusted Consolidated Total Debt to Adjusted Total Capitalization shall at all times be less than: (A) provided that the condition set forth in Section 3.01(i) regarding the Keebler Acquisition is satisfied within the time permitted thereby, and for so long as Keebler is a Subsidiary, (i) from the Closing Date through whichever is the earlier of (x) January 2, 1999 or (y) the date of the Next Public Offering, 0.75 to 1.00; and (ii) thereafter, 0.65 to 1.0; and (B) in all other circumstances, 0.65 to 1.0. (a) Adjusted Consolidated Total Debt Schedule - 4 $__________ (b) Adjusted Consolidated Net Worth $__________
101 108 COMPLIANCE CHECK LIST Flowers Industries, Inc. __________________________ _______________, ____ (c) Sum of (a) plus (b) $__________ Ratio of (a) to (c) __________ Requirement [< 0.75 to 1.00] [< 0.65 to 1.00]
102 109 COMPLIANCE CHECK LIST Flowers Industries, Inc. __________________________ _______________, ____ Schedule - 1 (a) Liens Securing Debt In The Principal Amount of $50,000 or More which are Not Permitted by Sections 5.1(a) through 5.16(g), inclusive, and (l), (n) and (p)
Relevant Provision of Section 5.16 Description of Lien Amount of Debt Secured Permitting Same - ------------------- ---------------------- --------------- 1. ________________ $_____________________ _______________ 2. ________________ $_____________________ _______________ 3. ________________ $_____________________ _______________ 4. ________________ $_____________________ _______________ 5. ________________ $_____________________ _______________ 6. ________________ $_____________________ _______________ 7. ________________ $_____________________ _______________ 8. ________________ $_____________________ _______________ 9. ________________ $_____________________ _______________
(b) Aggregate Amount of Other Liens Securing Debt which are Not Permitted by Sections 5.1(a) through 5.16(g), inclusive and (l), (n) and (p) $_____________ (c) Aggregate Amount of All Debt Secured by Liens $_____________
103 110 COMPLIANCE CHECK LIST Flowers Industries, Inc. __________________________ _______________, ____ Schedule - 2 Fixed Charge Coverage Consolidated Net Income for: _____ quarter _____ $____________ _____ quarter _____ $____________ _____ quarter _____ $____________ _____ quarter _____ $____________ Total $____________ Consolidated Interest Expense for: _____ quarter _____ $____________ _____ quarter _____ $____________ _____ quarter _____ $____________ _____ quarter _____ $____________ Total $____________ Operating Leases and Rentals for: _____ quarter _____ $____________ _____ quarter _____ $____________ _____ quarter _____ $____________ _____ quarter _____ $____________ Taxes for: _____ quarter _____ $____________ _____ quarter _____ $____________ _____ quarter _____ $____________ _____ quarter _____ $____________ Total $____________
104 111 COMPLIANCE CHECK LIST Flowers Industries, Inc. __________________________ _______________, ____ Schedule - 4 Part I. Consolidated Total Debt
INTEREST RATE MATURITY TOTAL -------- -------- ----- (a) Unsecured Borrowed Money ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ Total Unsecured Borrowed Money $__________ (b) Deferred Purchase Price ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ Total Deferred Purchase Price $__________ (c) Capitalized Leases) ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ Total Capitalized Leases $__________ (d) Secured Borrowed Money ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ Total Secured Borrowed Money $__________
105 112 COMPLIANCE CHECK LIST Flowers Industries, Inc. __________________________ _______________, ____ (e) Letters of Credit and Similar Instruments(2) ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ Total Letters of Credit and Similar Instruments $__________ (f) Swaps ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ Total Swaps $__________ (g) Guaranties ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ Total Guaranties $__________ (h) Convertible Redeemable Capital Stock(3) ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ Total Convertible Redeemable Capital Stock $__________ (i) Convertible Subordinated Debt(2)
- ------------------ (2) Include only if have maturities of greater than 1 year (3) Include only if current market value of an equity security into which it is convertible is greater than the conversion price for such security. 106 113 COMPLIANCE CHECK LIST Flowers Industries, Inc. __________________________ _______________, ____ ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ Total Convertible Subordinated Debt $__________ CONSOLIDATED TOTAL DEBT-sum of (a) plus (b) plus (c) plus (d) plus (e) plus (f) plus (g) less (h) less (i) $__________
Part II. Adjusted Consolidated Total Debt
INTEREST RATE MATURITY TOTAL -------- -------- ----- (a) Unsecured Borrowed Money(4) ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ Total Unsecured Borrowed Money $__________ (b) Deferred Purchase Price ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ Total Deferred Purchase Price $__________ (c) Capitalized Leases) ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________
- -------------- (4) Items (a) through (i) in this Part II shall include only Indebtedness of Keebler 107 114 COMPLIANCE CHECK LIST Flowers Industries, Inc. __________________________ _______________, ____ Total Capitalized Leases $__________ (d) Secured Borrowed Money ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ Total Secured Borrowed Money $__________ (e) Letters of Credit and Similar Instruments(5) ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ Total Letters of Credit and Similar Instruments $__________ (f) Swaps ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ Total Swaps $__________ (g) Guaranties ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ Total Guaranties $__________ (h) Convertible Redeemable Capital Stock(6)
- --------------- (5) Include only if have maturities of greater than 1 year (6) Include only if current market value of an equity security into which it is convertible is greater than the conversion price for such security. 108 115 COMPLIANCE CHECK LIST Flowers Industries, Inc. __________________________ _______________, ____ ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ Total Convertible Redeemable Capital Stock $__________ (i) Convertible Subordinated Debt(2) ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ ____________________________________________________ $__________ Total Convertible Subordinated Debt $__________ ADJUSTED CONSOLIDATED TOTAL DEBT-sum of: (I) Consolidated Total Debt from Part I; less (II) from Part II, sum of (a), plus (b), plus (c), plus (d), plus (e), plus (f), plus (g), less (h), less (i) $__________
109 116 EXHIBIT G FLOWERS INDUSTRIES, INC. CLOSING CERTIFICATE Reference is made to the Amended and Restated Credit Agreement (the "Credit Agreement") dated as of January 30, 1998, among Flowers Industries, Inc., the Banks listed therein, Wachovia Bank , N.A., as Agent, The Bank of Nova Scotia, as Documentation Agent, and NationsBank, N.A., as Syndications Agent. Capitalized terms used herein have the meanings ascribed thereto in the Credit Agreement. Pursuant to Section 3.01(e) of the Credit Agreement, __________________, the duly authorized ____________________ of Flowers Industries, Inc. hereby certifies to the Agent and the Banks that (i) no Default has occurred and is continuing as of the date hereof, and (ii) the representations and warranties contained in Article IV of the Credit Agreement are true on and as of the date hereof. Certified as of this January 30, 1998. By: -------------------------------------- Printed Name: ------------------------- Title: -------------------------------- 110 117 EXHIBIT H FLOWERS INDUSTRIES, INC. SECRETARY'S CERTIFICATE The undersigned, ___________________________________, ___________________, Secretary of Flowers Industries, Inc., a Georgia corporation (the "Borrower"), hereby certifies that he has been duly elected, qualified and is acting in such capacity and that, as such, [s]he is familiar with the facts herein certified and is duly authorized to certify the same, and hereby further certifies, in connection with the Amended and Restated Credit Agreement dated as of January 30, 1998 among the Borrower, Wachovia Bank, N.A. as Agent and as a Bank, The Bank of Nova Scotia, as Documentation Agent, and NationsBank, N.A., as Syndications Agent, and certain other Banks listed on the signature pages thereof, that: 1. Attached hereto as Exhibit A is a complete and correct copy of the Certificate of Incorporation of the Borrower as in full force and effect on the date hereof as certified by the Secretary of State of the State of Georgia, the Borrower's state of incorporation. 2. Attached hereto as Exhibit B is a complete and correct copy of the Bylaws of the Borrower as in full force and effect on the date hereof. 3. Attached hereto as Exhibit C is a complete and correct copy of the resolutions duly adopted by the Board of Directors of the Borrower on ______________ __, 1998 approving, and authorizing the execution and delivery of, the Credit Agreement, the Notes and the other Loan Documents (as such terms are defined in the Credit Agreement) to which the Borrower is a party. Such resolutions have not been repealed or amended and are in full force and effect, and no other resolutions or consents have been adopted by the Board of Directors of the Borrower in connection therewith. 4. _________________________, who is ____________________ of the Borrower signed the Credit Agreement, the Notes and the other Loan Documents to which the Borrower is a party, was duly elected, qualified and acting as such at the time he signed the Credit Agreement, the Notes and other Loan Documents to which the Borrower is a party, and his signature appearing on the Credit Agreement, the Notes and the other Loan Documents to which the Borrower is a party is his genuine signature. IN WITNESS WHEREOF, the undersigned has hereunto set [his/her] hand as of January 30, 1998. --------------------------------------- 111 118 EXHIBIT I MONEY MARKET QUOTE REQUEST Wachovia Bank, N.A., as Agent 191 Peachtree Street, N.E. Atlanta, Georgia 30303-1757 Attention: Syndications Group Re: Money Market Quote Request This Money Market Quote Request is given in accordance with Section 2.03 of the Amended and Restated Credit Agreement (as amended or modified from time to time, the "Credit Agreement") dated as of January 30, 1998, among Flowers Industries, Inc., the Banks from time to time parties thereto, Wachovia Bank, N.A., as Agent, The Bank of Nova Scotia, as Documentation Agent, and NationsBank, N.A., as Syndications Agent. Terms defined in the Credit Agreement are used herein as defined therein. The Borrower hereby requests that the Agent obtain quotes for a Money Market Borrowing based upon the following: 1. The proposed date of the Money Market Borrowing shall be ______________, _____ (the "Money Market Borrowing Date").(1)* 2. The aggregate amount of the Money Market Borrowing shall be $____________.(2) 3. The Stated Maturity Date(s) applicable to the Money Market Borrowing shall be _____ days.(3) 112 119 Very truly yours, FLOWERS INDUSTRIES, INC. By: -------------------------------- Title: - -------------------------------- (1) The date must be a Euro-Dollar Business Day. (2) The amount of the Money Market Borrowing is subject to Section 2.03(a) and (b). (3) The Stated Maturity Dates are subject to Section 2.03(b)(iii). The Borrower may request that up to 2 different Stated Maturity Dates be applicable to any Money Market Borrowing, provided that (i) each such Stated Maturity Date shall be deemed to be a separate Money Market Quote Request and (ii) the Borrower shall specify the amounts of such Money Market Borrowing to be subject to each such different Stated Maturity Date. 113 120 EXHIBIT J MONEY MARKET QUOTE Wachovia Bank, N.A., as Agent 191 Peachtree Street, N.E. Atlanta, Georgia 30303-1757 Attention: Syndications Group Re: Money Market Quote to Flowers Industries, Inc. This Money Market Quote is given in accordance with Section 2.03(c)(ii) of the Amended and Restated Credit Agreement (as amended or modified from time to time, the "Credit Agreement") dated as of January 30, 1998, among Flowers Industries, Inc. (the "Borrower"), the Banks from time to time parties thereto, Wachovia Bank, N.A., as Agent, The Bank of Nova Scotia, as Documentation Agent, and NationsBank, N.A., as Syndications Agent. Terms defined in the Credit Agreement are used herein as defined therein. In response to the Borrower's Money Market Quote Request dated ____________, ____, we hereby make the following Money Market Quote on the following terms: 1. Quoting Bank: 2. Person to contact at Quoting Bank: 3. Date of Money Market Borrowing:(1)* 4. We hereby offer to make Money Market Loan(s) in the following maximum principal amounts for the following Interest Periods and at the following rates:
Maximum Stated Principal Maturity Amount(2) Date (3) Rate Per Annum(4) - --------- -------- -----------------
- ------------------------ 114 121 * All numbered footnotes appear on the last page of this Exhibit I 115 122 We understand and agree that the offer(s) set forth above, subject to the satisfaction of the applicable conditions set forth in the Credit Agreement, irrevocably obligate(s) us to make the Money Market Loan(s) for which any offer(s) [is] [are] accepted, in whole or in part (subject to the last sentence of Section 2.03(c)(i) of the Credit Agreement). Very truly yours, [Name of Bank] Dated: By: ------------------------ - ------------------- Authorized Officer - ----------------------------- - ----------------------------- (1) As specified in the related Money Market Quote Request. (2) The principal amount bid for each Stated Maturity Date may not exceed the principal amount requested. Money Market Quotes must be made for at least $10,000,000 or a larger integral multiple of $5,000,000. (3) The Stated Maturity Dates are subject to Section 2.03(b)(iii). (4) Subject to Section 2.03(c)(ii)(C). 116 123 SCHEDULE 4.08 [UPDATED SCHEDULE 4.08, INCLUDING KEEBLER, TO BE PROVIDED BY BORROWER--ALL MATERIAL SUBSIDIARIES TO BE SHOWN AS SUCH] 117 -----END PRIVACY-ENHANCED MESSAGE-----