R ALCORP H OLDINGS, I NC.

$150,000,000
Floating Rate Senior Notes, Series A, due May 22, 2010
______________

N OTE PURCHASE AGREEMENT
_____________

Dated May 22, 2003

       

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TABLE OF CONTENTS
(Not a part of the Agreement)
SECTION                                                                                                  
HEADING                                    PAGE
 
SECTION 1.
AUTHORIZATION OF NOTES
1
SECTION 2.
SALE AND PURCHASE OF NOTES
2
Section 2.1.
Sale and Purchase of Notes
2
Section 2.2.
Additional Series of Notes
2
SECTION 3.
CLOSING
3
SECTION 4.
CONDITIONS TO CLOSING
3
Section 4.1.
Representations and Warranties
4
Section 4.2.
Performance; No Default.
4
Section 4.3.
Compliance Certificates
4
Section 4.4.
Opinions of Counsel
4
Section 4.5.
Purchase Permitted By Applicable Law, etc
4
Section 4.6.
Sale of Other Notes
4
Section 4.7.
Payment of Special Counsel Fees.
5
Section 4.8.
Private Placement Number
5
Section 4.9.
Changes in Corporate Structure
5
Section 4.10.
Funding Instructions
5
Section 4.11.
Subsidiary Guarantee
5
Section 4.12.
Proceedings and Documents
5
Section 4.13.
Additional Conditions to Issuance of Additional Notes
5
SECTION 5.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
6
Section 5.1.
Organization; Power and Authority
6
Section 5.2.
Authorization, Etc
6
Section 5.3.
Disclosure
6
Section 5.4.
Organization and Ownership of Shares of Subsidiaries; Affiliates
7
Section 5.5.
Financial Statements
7
Section 5.6.
Compliance with Laws, Other Instruments, Etc
8
Section 5.7.
Governmental Authorizations, Etc
8
Section 5.8.
Litigation; Observance of Agreements, Statutes and Orders
8
Section 5.9.
Taxes
8
Section 5.10.
Title to Property; Leases
9
Section 5.11.
Licenses, Permits, Etc
9
Section 5.12.
Compliance with ERISA
9
Section 5.13.
Private Offering by the Company
10
Section 5.14.
Use of Proceeds; Margin Regulations
10
Section 5.15.
Existing Debt; Future Liens
10
Section 5.16.
Foreign Assets Control Regulations, Etc
11
Section 5.17.
Status under Certain Statutes
11
Section 5.18.
Environmental Matters
11
Section 5.19.
Ranking of Notes
12
Section 5.20.
Subsidiary Guarantee
12
SECTION 6.
REPRESENTATIONS OF THE PURCHASER
12
Section 6.1.
Purchase for Investment
12
Section 6.2.
Source of Funds
12
SECTION 7.
INFORMATION AS TO COMPANY
14
Section 7.1.
Financial and Business Information
14
Section 7.2.
Officer’s Certificate
17
Section 7.3.
Inspection
17
SECTION 8.
PREPAYMENT OF THE NOTES
18
Section 8.1.
Required Prepayments
18
Section 8.2.
Optional Prepayments
18
Section 8.3.
Change in Control
18
Section 8.4.
Allocation of Partial Prepayments
20
Section 8.5.
Maturity; Surrender, Etc
20
Section 8.6.
Purchase of Notes
20
SECTION 9.
AFFIRMATIVE COVENANTS
21
Section 9.1.
Compliance with Law
21
Section 9.2.
Insurance
21
Section 9.3.
Maintenance of Properties
21
Section 9.4.
Payment of Taxes and Claims
21
Section 9.5.
Corporate Existence, Etc
21
Section 9.6.
Notes to Rank Pari Passu
22
Section 9.7.
Subsidiary Guarantee; Release
22
SECTION 10.
NEGATIVE COVENANTS
22
Section 10.1.
Transactions with Affiliates
22
Section 10.2.
Merger and Consolidation
23
Section 10.3.
Minimum Consolidated Adjusted Net Worth
24
Section 10.4.
Additional Limitations on Total Debt and Priority Debt
24
Section 10.5.
Liens
24
Section 10.6.
Sale of Assets
26
Section 10.7.
Nature of Business
26
SECTION 11.
EVENTS OF DEFAULT
27
SECTION 12.
REMEDIES ON DEFAULT, ETC
29
Section 12.1.
Acceleration
29
Section 12.2.
Other Remedies
30
Section 12.3.
Rescission
30
Section 12.4.
No Waivers or Election of Remedies, Expenses, Etc
30
SECTION 13.
REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES
30
Section 13.1.
Registration of Notes
30
Section 13.2.
Transfer and Exchange of Notes
30
Section 13.3.
Replacement of Notes
31
SECTION 14.
PAYMENTS ON NOTES
31
Section 14.1.
Place of Payment
31
Section 14.2.
Home Office Payment
31
SECTION 15.
EXPENSES, ETC
32
Section 15.1.
Transaction Expenses
32
Section 15.2.
Survival
32
SECTION 16.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT
33
SECTION 17.
AMENDMENT AND WAIVER
33
Section 17.1.
Requirements
33
Section 17.2.
Solicitation of Holders of Notes
33
Section 17.3.
Binding Effect, Etc
34
Section 17.4.
Notes Held by Company, Etc
34
SECTION 18.
NOTICES
34
SECTION 19.
REPRODUCTION OF DOCUMENTS
35
SECTION 20.
CONFIDENTIAL INFORMATION
35
SECTION 21.
SUBSTITUTION OF PURCHASER
36
SECTION 22.
MISCELLANEOUS
36
Section 22.1.
Successors and Assigns
36
Section 22.2.
Payments Due on Non-Business Days
36
Section 22.3.
Severability
36
Section 22.4.
Construction
37
Section 22.5.
Counterparts
37
Section 22.6.
Governing Law
37
Signature
 
38

SCHEDULE A
—
INFORMATION RELATING TO PURCHASERS
 
 
 
SCHEDULE B
—
DEFINED TERMS
 
 
 
SCHEDULE 5.3
—
Disclosure Materials
 
 
 
SCHEDULE 5.4
—
Subsidiaries of the Company and Ownership of Subsidiary Stock
 
 
 
SCHEDULE 5.5
—
Financial Statements
 
 
 
SCHEDULE 5.15
—
Existing Debt
 
 
 
EXHIBIT 1
—
Form of Floating Rate Senior Note, Series A, due May 22, 2010
 
 
 
EXHIBIT 4.4(a)
—
Form of Opinion of R. W. Lockwood, General Counsel of the Obligors
 
 
 
EXHIBIT 4.4(b)
—
Form of Opinion of Special Counsel to the Purchasers
 
 
 
EXHIBIT 4.11
—
Form of Subsidiary Guarantee
 
 
 
EXHIBIT S
—
Form of Supplement to Note Purchase Agreement

       

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RALCORP HOLDINGS, INC.
800 Market Street
Suite 2900
St. Louis, MO 63101

Floating Rate Senior Notes, Series A, due May 22, 2010
May 22, 2003

TO EACH OF THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE  A:
 
Ladies and Gentlemen:
Ralcorp Holdings, Inc., a Missouri corporation (the “Company” ), agrees with you
as follows:
 
SECTION 1.    AUTHORIZATION OF NOTES.
 
The Company will authorize the issue and sale of $150,000,000 aggregate
principal amount of its Floating Rate Senior Notes, Series A, due May 22, 2010
(the “Series A Notes” ). The Series A Notes together with each series of
Additional Notes which may from time to time be issued pursuant to the
provisions of Section 2.2 are collectively referred to as the “Notes” (such term
shall also include any such notes issued in substitution therefor pursuant to
Section 13 of this Agreement or the Other Agreements (as hereinafter defined)).
The Series A Notes shall be substantially in the form set out in Exhibit 1, with
such changes therefrom, if any, as may be approved by you and the Company.
Certain capitalized terms used in this Agreement are defined in Schedule B;
references to a “Schedule” or an “Exhibit” are, unless otherwise specified, to a
Schedule or an Exhibit attached to this Agreement. The Series A Notes shall bear
interest from the date of issue at a floating rate equal to the Adjusted LIBOR
Rate from time to time, payable quarterly on the 22nd day of each February, May,
August, November in each year (commencing August 22, 2003) and at maturity (each
such date being referred to as an “Interest Payment Date” ) and to bear interest
on overdue principal (including any overdue required or optional prepayment of
principal) and premium, if any, and (to the extent legally enforceable) on any
overdue installment of interest at the Default Rate until paid.
 
Interest on the Notes shall be computed for the actual number of days elapsed on
the basis of a year consisting of 360 days.
 
The Adjusted LIBOR Rate shall be determined by the Company, and notice thereof
shall be given to the holders of the Notes, together with such information as
the Required Holders may reasonably request for verification (including in all
events, a facsimile transmission of the relevant screen and calculations), on
the second Business Day preceding each Interest Period. In the event that the
Required Holders do not concur with such determination by the Company, as
evidenced by notice to the Company by the Required Holders within ten (10)
Business Days after receipt by such holders of the notice delivered by the
Company pursuant to the previous sentence, the determination of Adjusted LIBOR
Rate shall be made by the Required Holders in accordance with the provisions of
this Agreement, which determination shall be conclusive and binding absent
manifest error.
 
The obligations of the Company hereunder and under the Notes shall be
unconditionally guaranteed under and pursuant to the terms and provisions of the
Subsidiary Guarantee, reference to which Subsidiary Guarantee is hereby made.
 
SECTION 2.    SALE AND PURCHASE OF NOTES .
 
    Section 2.1. Sale and Purchase of Notes . Subject to the terms and
conditions of this Agreement, the Company will issue and sell to you and you
will purchase from the Company, at the Closing provided for in Section 3,
Series A Notes in the principal amount specified opposite your name in
Schedule A at the purchase price of 100% of the principal amount thereof.
Contemporaneously with entering into this Agreement, the Company is entering
into separate Note Purchase Agreements (the “Other Agreements” ) identical with
this Agreement with each of the other purchasers named in Schedule A (the “Other
Purchasers” ), providing for the sale at such Closing to each of the Other
Purchasers of Series A Notes in the principal amount specified opposite its name
in Schedule A. Your obligation hereunder, and the obligations of the Other
Purchasers under the Other Agreements, are several and not joint obligations,
and you shall have no obligation under any Other Agreement and no liability to
any Person for the performance or nonperformance by any Other Purchaser
thereunder. The Series A Notes and each other series of Notes issued hereunder
are each herein sometimes referred to as Notes of a “series.”
 
    Section 2.2. Additional Series of Notes. The Company may, from time to time,
in its sole discretion, but subject to the terms hereof, issue and sell one or
more additional series of its unsecured promissory notes under the provisions of
this Agreement pursuant to a supplement (a “Supplement” ) substantially in the
form of Exhibit S. Each additional series of Notes (the “Additional Notes” )
issued pursuant to a Supplement shall be subject to the following terms and
conditions:
 
(i) each series of Additional Notes, when so issued, shall be differentiated
from all previous series by sequential alphabetical designation inscribed
thereon;
(ii) Additional Notes of the same series may consist of more than one different
and separate tranches and may differ with respect to outstanding principal
amounts, maturity dates, interest rates and premiums, if any, and price and
terms of redemption or payment prior to maturity, but all such different and
separate tranches of the same series shall vote as a single class and constitute
one series;
(iii) each series of Additional Notes shall be dated the date of issue, bear
interest at such rate or rates, mature on such date or dates, be subject to such
mandatory and optional prepayment on the dates and at the premiums, if any, have
such additional or different conditions precedent to closing, such
representations and warranties and such additional covenants as shall be
specified in the Supplement under which such Additional Notes are issued and
upon execution of any such Supplement, this Agreement shall be amended to
incorporate such additional covenants without further action on the part of the
holders of the Notes outstanding under this Agreement, provided , that any such
additional covenants shall inure to the benefit of all holders of Notes so long
as any Additional Notes issued pursuant to such Supplement remain outstanding;
(iv) each series of Additional Notes issued under this Agreement shall be in
substantially the form of Exhibit 1 to Exhibit S hereto with such variations,
omissions and insertions as are necessary or permitted hereunder;
(v) the minimum aggregate principal amount of any series of Notes issued under a
Supplement shall be $5,000,000 and the minimum denomination shall be $100,000;
(vi) all Additional Notes shall mature more than one year after the issuance
thereof and shall constitute Debt of the Company and shall rank pari passu with
all other outstanding Notes; and
(vii) no Additional Notes shall be issued hereunder, if immediately prior to the
time of issuance thereof or immediately after giving effect to the issuance and
the application of the proceeds thereof, any Default or Event of Default shall
exist.
 
SECTION 3 .    CLOSING.
 
The sale and purchase of the Series A Notes to be purchased by you and the Other
Purchasers shall occur at the offices of Chapman and Cutler, 111 West Monroe,
Chicago, IL 60603, at 10:00 a.m., Chicago time, at a closing (the “Closing” ) on
May 22, 2003 or on such other Business Day thereafter on or prior to May 28,
2003 as may be agreed upon by the Company and you and the Other Purchasers. At
the Closing the Company will deliver to you the Series A Notes to be purchased
by you in the form of a single Series A Note (or such greater number of Notes in
denominations of at least $100,000 as you may request) dated the date of the
Closing and registered in your name (or in the name of your nominee), against
delivery by you to the Company or its order of immediately available funds in
the amount of the purchase price therefor by wire transfer of immediately
available funds for the account of the Company to account number 1096726 at Bank
One, ABA #071000013. If at the Closing the Company shall fail to tender such
Series A Notes to you as provided above in this Section 3, or any of the
conditions specified in Section 4 shall not have been fulfilled to your
reasonable satisfaction, you shall, at your election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights you may
have by reason of such failure or such nonfulfillment.
 
SECTION 4.    CONDITIONS TO CLOSING.
 
Your obligation to purchase and pay for the Notes to be sold to you at the
Closing is subject to the fulfillment to your satisfaction, prior to or at the
Closing, of the following conditions:
    Section 4.1. Representations and Warranties. The representations and
warranties of the Obligors in the Financing Agreements shall be correct when
made and at the time of the Closing.
    Section 4.2. Performance; No Default. Each Obligor shall have performed and
complied with all agreements and conditions contained in each Financing
Agreement required to be performed or complied with by it prior to or at the
Closing and after giving effect to the issue and sale of the Notes (and the
application of the proceeds thereof as contemplated by Section 5.14) no Default
or Event of Default shall have occurred and be continuing. Neither the Company
nor any Subsidiary shall have entered into any transaction since the date of the
Memorandum that would have been prohibited by Section 10 hereof had such Section
applied since such date.
    Section 4.3. Compliance Certificates.
(a) Officer’s Certificate . Each Obligor shall have delivered to you an
Officer’s Certificate, dated the date of the Closing, certifying that the
conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.
(b) Secretary’s Certificate . Each Obligor shall have delivered to you a
certificate certifying as to the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and delivery of
the Financing Agreements to which it is a party.
    Section 4.4. Opinions of Counsel. You shall have received opinions in form
and substance reasonably satisfactory to you, dated the date of the Closing
(a) from R.W. Lockwood, Vice President and General Counsel, counsel for the
Obligors, covering the matters set forth in Exhibit 4.4(a) and covering such
other matters incident to the transactions contemplated hereby as you or your
counsel may reasonably request (and the Company hereby instructs its counsel to
deliver such opinion to you) and (b) from Chapman and Cutler, your special
counsel in connection with such transactions, substantially in the form set
forth in Exhibit 4.4(b) and covering such other matters incident to such
transactions as you may reasonably request.
    Section 4.5. Purchase Permitted by Applicable Law, Etc. On the date of the
Closing your purchase of Notes shall (i) be permitted by the laws and
regulations of each jurisdiction to which you are subject, without recourse to
provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting
limited investments by insurance companies without restriction as to the
character of the particular investment, (ii) not violate any applicable law or
regulation (including, without limitation, Regulation T, U or X of the Board of
Governors of the Federal Reserve System) and (iii) not subject you to any tax,
penalty or liability under or pursuant to any applicable law or regulation,
which law or regulation was not in effect on the date hereof. If requested by
you, you shall have received an Officer’s Certificate certifying as to such
matters of fact as you may reasonably specify to enable you to determine whether
such purchase is so permitted.
    Section 4.6. Sale of Other Notes. Contemporaneously with the Closing, the
Company shall sell to the Other Purchasers, and the Other Purchasers shall
purchase the Notes to be purchased by them at the Closing as specified in
Schedule A.
    Section 4.7. Payment of Special Counsel Fees. Without limiting the
provisions of Section 15.1, the Company shall have paid on or before the Closing
the fees, charges and disbursements of your special counsel referred to in
Section 4.4 to the extent reflected in a statement of such counsel rendered to
the Company at least one Business Day prior to the Closing.
    Section 4.8. Private Placement Number. A Private Placement number issued by
Standard & Poor’s CUSIP Service Bureau (in cooperation with the Securities
Valuation Office of the National Association of Insurance Commissioners) shall
have been obtained for the Notes.
    Section 4.9. Changes in Corporate Structure. No Obligor shall have changed
its jurisdiction of incorporation or been a party to any merger or consolidation
and shall not have succeeded to all or any substantial part of the liabilities
of any other entity, at any time following the date of the most recent financial
statements referred to in Schedule 5.5.
    Section 4.10. Funding Instructions . At least three Business Days prior to
the date of the Closing, you shall have received written instructions executed
by a Responsible Officer directing the manner of the payment of the purchase
price for the Notes and setting forth (i) the name and address of the transferee
bank, (ii) such transferee bank’s ABA number, (iii) the account name and number
into which the purchase price for the Notes is to be deposited, and (iv) the
name and telephone number of the account representative responsible for
verifying receipt of such funds.
    Section 4.11. Subsidiary Guarantee. Each of the Subsidiary Guarantors shall
have executed and delivered the Subsidiary Guarantee substantially in the form
of Exhibit 4.11 hereto.
    Section 4.12. Proceedings and Documents. All corporate and other proceedings
in connection with the transactions contemplated by this Agreement, the
Subsidiary Guarantee and all documents and instruments incident to such
transactions shall be satisfactory to you and your special counsel, and you and
your special counsel shall have received all such counterpart originals or
certified or other copies of such documents as you or they may reasonably
request.
    Section 4.13. Additional Conditions to Issuance of Additional Notes. The
obligations of the Additional Purchasers to purchase any Additional Notes shall
also be subject to the following conditions precedent, in addition to the
conditions specified in the Supplement pursuant to which such Additional Notes
may be issued:
(a) Compliance Certificate . A duly authorized Senior Financial Officer of the
Company shall execute and deliver to each Additional Purchaser and each holder
of Notes an Officer’s Certificate dated the date of issue of such series of
Additional Notes stating that such officer has reviewed the provisions of this
Agreement (including any Supplements hereto) and setting forth the information
and computations (in sufficient detail) required in order to establish whether
the Company is in compliance with the requirements of Section 10 on such date.
(b) Execution and Delivery of Supplement. The Company and each such Additional
Purchaser shall execute and deliver a Supplement substantially in the form of
Exhibit S hereto, subject to any prepayment conditions, additional covenants and
closing conditions as contemplated therein.
(c) Representations of Additional Purchasers . Each Additional Purchaser shall
have confirmed in the Supplement that the representations set forth in Section 6
are true with respect to such Additional Purchaser on and as of the date of
issue of the Additional Notes.
 
SECTION 5.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
 
The Company represents and warrants to you that:
    Section 5.1. Organization; Power and Authority. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Missouri, and is duly qualified as a foreign corporation and is in good
standing in each jurisdiction in which such qualification is required by law,
other than those jurisdictions as to which the failure to be so qualified or in
good standing could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The Company has the corporate power
and authority to own or hold under lease the properties it purports to own or
hold under lease, to transact the business it transacts and proposes to
transact, to execute and deliver this Agreement and the Other Agreements and the
Notes and to perform the provisions hereof and thereof.
    Section 5.2. Authorization, Etc. This Agreement and the Other Agreements and
the Notes have been duly authorized by all necessary corporate action on the
part of the Company, and this Agreement constitutes, and upon execution and
delivery thereof each Note will constitute, a legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
    Section 5.3. Disclosure. The Company, through its agent, SPP Capital
Partners, LLC has delivered to you and each Other Purchaser a copy of the
Private Placement Memorandum including all exhibits and attachments thereto,
dated May 2003 (the “Memorandum” ), relating to the transactions contemplated
hereby. The Memorandum fairly describes, in all material respects, the general
nature of the business and principal properties of the Company and its
Subsidiaries. Except as disclosed in Schedule 5.3, this Agreement, the
Memorandum, the documents, certificates or other writings delivered to you by or
on behalf of the Company in connection with the transactions contemplated hereby
and the financial statements listed in Schedule 5.5, taken as a whole, do not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading in light of the
circumstances under which they were made. Except as disclosed in the Memorandum
or as expressly described in Schedule 5.3, or in one of the documents,
certificates or other writings identified therein, or in the financial
statements listed in Schedule 5.5, since September 30, 2002, there has been no
change in the financial condition, operations, business or properties of the
Company or any Subsidiary except changes that individually or in the aggregate
could not reasonably be expected to have a Material Adverse Effect. There is no
fact known to the Company that could reasonably be expected to have a Material
Adverse Effect that has not been set forth herein or in the Memorandum or in the
other documents, certificates and other writings delivered to you by or on
behalf of the Company specifically for use in connection with the transactions
contemplated hereby.
    Section 5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates.
(a) Schedule 5.4 contains (except as noted therein) complete and correct lists
(i) of the Company’s Subsidiaries, showing, as to each Subsidiary, the correct
name thereof, the jurisdiction of its organization, and the percentage of shares
of each class of its capital stock or similar equity interests outstanding owned
by the Company and each other Subsidiary, (ii) of the Company’s Affiliates,
other than Subsidiaries, and (iii) of the Company’s directors and senior
officers.
(b) All of the outstanding shares of capital stock or similar equity interests
of each Subsidiary shown in Schedule 5.4 as being owned by the Company and its
Subsidiaries have been validly issued, are fully paid and nonassessable and are
owned by the Company or another Subsidiary free and clear of any Lien (except as
otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a corporation or other legal
entity duly organized, validly existing and in good standing under the laws of
its jurisdiction of organization, and is duly qualified as a foreign corporation
or other legal entity and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Each such
Subsidiary has the corporate or other power and authority to own or hold under
lease the properties it purports to own or hold under lease and to transact the
business it transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to any legal restriction
or any agreement (other than this Agreement, the agreements listed on
Schedule 5.4 and customary limitations imposed by corporate law statutes)
restricting the ability of such Subsidiary to pay dividends out of profits or
make any other similar distributions of profits to the Company or any of its
Subsidiaries that owns outstanding shares of capital stock or similar equity
interests of such Subsidiary.
    Section 5.5. Financial Statements. The Company has delivered to each
Purchaser copies of the financial statements of the Company and its Subsidiaries
listed on Schedule 5.5. All of said financial statements (including in each case
the related schedules and notes) fairly present in all material respects the
consolidated financial position of the Company and its Subsidiaries as of the
respective dates specified in such Schedule and the consolidated results of
their operations and cash flows for the respective periods so specified and have
been prepared in accordance with GAAP consistently applied throughout the
periods involved except as set forth in the notes thereto (subject, in the case
of any interim financial statements, to normal year-end adjustments).
    Section 5.6. Compliance with Laws, Other Instruments, Etc. The execution,
delivery and performance by the Company of this Agreement and the Notes will not
(i) contravene, result in any breach of, or constitute a default under, or
result in the creation of any Lien in respect of any property of the Company or
any Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or
credit agreement, lease, corporate charter or by-laws, or any other agreement or
instrument to which the Company or any Subsidiary is bound or by which the
Company or any Subsidiary or any of their respective properties may be bound or
affected, (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Company or any Subsidiary
or (iii) violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Subsidiary.
    Section 5.7. Governmental Authorizations, Etc. Assuming the accuracy of
(i) the offeree letter of SPP Capital Partners, LLC and (ii) the representations
of the Purchasers in Section 6, no consent, approval or authorization of, or
registration, filing or declaration with, any Governmental Authority is required
in connection with the execution, delivery or performance by the Company of this
Agreement or the Notes.
    Section 5.8. Litigation; Observance of Agreements, Statutes and Orders.
(a) There are no actions, suits or proceedings pending or, to the knowledge of
the Company, threatened against or affecting the Company or any Subsidiary or
any property of the Company or any Subsidiary in any court or before any
arbitrator of any kind or before or by any Governmental Authority that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under any term of any
agreement or instrument to which it is a party or by which it is bound, or any
order, judgment, decree or ruling of any court, arbitrator or Governmental
Authority or is in violation of any applicable law, ordinance, rule or
regulation (including without limitation Environmental Laws) of any Governmental
Authority, which default or violation, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
    Section 5.9. Taxes. The Company and its Subsidiaries have filed all tax
returns that are required to have been filed in any jurisdiction, and have paid
all taxes shown to be due and payable on such returns and all other taxes and
assessments levied upon them or their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent, except for any taxes and assessments (i) the amount
of which is not individually or in the aggregate Material or (ii) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company or a Subsidiary,
as the case may be, has established adequate reserves in accordance with GAAP.
The Company knows of no basis for any other tax or assessment that could
reasonably be expected to have a Material Adverse Effect. The charges, accruals
and reserves on the books of the Company and its Subsidiaries in respect of
Federal, state or other taxes for all fiscal periods are adequate. The Federal
income tax liabilities of the Company and its Subsidiaries have been determined
by the Internal Revenue Service and paid for all fiscal years up to and
including the fiscal year ended September 30, 1999.
    Section 5.10. Title to Property; Leases. The Company and its Subsidiaries
have good and sufficient title to their respective properties that individually
or in the aggregate are Material, including all such properties reflected in the
most recent audited balance sheet referred to in Section 5.5 or purported to
have been acquired by the Company or any Subsidiary after said date (except as
sold or otherwise disposed of in the ordinary course of business), in each case
free and clear of Liens prohibited by this Agreement. All leases that
individually or in the aggregate are Material are valid and subsisting and are
in full force and effect in all material respects.
    Section 5.11. Licenses, Permits, Etc. (a) The Company and its Subsidiaries
own or possess all licenses, permits, franchises, authorizations, patents,
copyrights, service marks, trademarks and trade names, or rights thereto, that
individually or in the aggregate are Material, without known conflict with the
rights of others.
(b) To the best knowledge of the Company, no product of the Company infringes in
any material respect any license, permit, franchise, authorization, patent,
copyright, service mark, trademark, trade name or other right owned by any other
Person.
(c) To the best knowledge of the Company, there is no Material violation by any
Person of any right of the Company or any of its Subsidiaries with respect to
any patent, copyright, service mark, trademark, trade name or other right owned
or used by the Company or any of its Subsidiaries.
    Section 5.12. Compliance with ERISA. (a) The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in Section 3 of ERISA), and no
event, transaction or condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by the Company or any
ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
or to Section 401(a)(29) or 412 of the Code, other than such liabilities or
Liens as would not be individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under each of the
Plans (other than Multiemployer Plans), determined as of the end of such Plan’s
most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan’s most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities by more than $20,000,000 in the case of
any single Plan and by more than $30,000,000 in the aggregate for all Plans. The
term “benefit liabilities” has the meaning specified in section 4001 of ERISA
and the terms “current value” and “present value” have the meaning specified in
section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
(d) The expected post-retirement benefit obligation (determined as of the last
day of the Company’s most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of the Company and its Subsidiaries was $27,700,000 as of
September 30, 2002, the last valuation date.
(e) The execution and delivery of this Agreement and the issuance and sale of
the Notes hereunder will not involve any transaction that is subject to the
prohibitions of section 406 of ERISA or in connection with which a tax could be
imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation by
the Company in the first sentence of this Section 5.12(e) is made in reliance
upon and subject to (i) the accuracy of your representation in Section 6.2 as to
the sources of the funds used to pay the purchase price of the Notes to be
purchased by you and (ii) the assumption, made solely for the purpose of making
such representation, that Department of Labor Interpretive Bulletin 75-2 with
respect to prohibited transactions remains valid in the circumstances of the
transactions contemplated herein.
    Section 5.13. Private Offering by the Company. Neither the Company nor
anyone acting on its behalf has offered the Notes or any similar securities for
sale to, or solicited any offer to buy any of the same from, or otherwise
approached or negotiated in respect thereof with, any person other than you, the
Other Purchasers and not more than thirty-one (31) other Institutional
Investors, each of which has been offered the Notes at a private sale for
investment. Neither the Company nor anyone acting on its behalf has taken, or
will take, any action that would subject the issuance or sale of the Notes to
the registration requirements of Section 5 of the Securities Act.
    Section 5.14. Use of Proceeds; Margin Regulations. The Company will apply
the proceeds of the sale of the Notes to reduce short-term borrowings and for
general corporate purposes. No part of the proceeds from the sale of the Notes
hereunder will be used, directly or indirectly, for the purpose of buying or
carrying any margin stock within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System (12 CFR 207), or for the purpose of
buying or carrying or trading in any securities under such circumstances as to
involve the Company in a violation of Regulation X of said Board (12 CFR 224) or
to involve any broker or dealer in a violation of Regulation T of said Board (12
CFR 220). Margin stock does not constitute more than 1.00% of the value of the
consolidated assets of the Company and its Subsidiaries and the Company does not
have any present intention that margin stock will constitute more than 1.00% of
the value of such assets. As used in this Section, the terms “margin stock” and
“purpose of buying or carrying” shall have the meanings assigned to them in said
Regulation U.
    Section 5.15. Existing Debt; Future Liens. (a) Except as described therein,
Schedule 5.15 sets forth a complete and correct list of all outstanding Debt of
the Company and its Subsidiaries as of April 30, 2003, since which date there
has been no Material change in the amounts, interest rates, sinking funds,
installment payments or maturities of the Debt of the Company or its
Subsidiaries. Neither the Company nor any Subsidiary is in default and no waiver
of default is currently in effect, in the payment of any principal or interest
on any Debt of the Company or such Subsidiary and no event or condition exists
with respect to any Debt of the Company or any Subsidiary that would permit (or
that with notice or the lapse of time, or both, would permit) one or more
Persons to cause such Debt to become due and payable before its stated maturity
or before its regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the Company nor any Subsidiary
has agreed or consented to cause or permit in the future (upon the happening of
a contingency or otherwise) any of its property, whether now owned or hereafter
acquired, to be subject to a Lien not permitted by Section 10.5.
    Section 5.16. Foreign Assets Control Regulations, Etc. Neither the sale of
the Notes by the Company hereunder nor its use of the proceeds thereof will
violate the Trading with the Enemy Act, as amended, or any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) or any enabling legislation or executive order
relating thereto. Without limiting the foregoing, neither the Company nor any of
its Subsidiaries (a) is or will become a person whose property or interests in
property are blocked pursuant to Section 1 of Executive Order 13224 of
September 23, 2001 Blocking Property and Prohibiting Transactions With Persons
Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001))
or (b) engages or will engage in any dealings or transactions, or be otherwise
associated, with any such person.
The Company and its Subsidiaries are in compliance, in all material respects,
with the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001). No part
of the proceeds from the sale of the Notes hereunder will be used, directly or
indirectly, for any payment to any governmental official or employee, political
party, official of a political party, candidate for political office or anyone
else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United States
Foreign Corrupt Practices Act of 1977, as amended.
    Section 5.17. Status under Certain Statutes. Neither the Company nor any
Subsidiary is subject to regulation under the Investment Company Act of 1940, as
amended, the Public Utility Holding Company Act of 1935, as amended, the ICC
Termination Act of 1995, as amended, or the Federal Power Act, as amended.
    Section 5.18. Environmental Matters. Neither the Company nor any Subsidiary
has knowledge of any claim or has received any notice of any claim, and no
proceeding has been instituted raising any claim against the Company or any of
its Subsidiaries or any of their respective real properties now or formerly
owned, leased or operated by any of them or other assets, alleging any damage to
the environment or violation of any Environmental Laws, except, in each case,
such as could not reasonably be expected to result in a Material Adverse Effect.
Except as otherwise disclosed to you in writing:
(a) neither the Company nor any Subsidiary has knowledge of any facts which
would give rise to any claim, public or private, of violation of Environmental
Laws or damage to the environment emanating from, occurring on or in any way
related to real properties now or formerly owned, leased or operated by any of
them or to other assets or their use, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has stored any Hazardous
Materials on real properties now or formerly owned, leased or operated by any of
them and has not disposed of any Hazardous Materials in a manner contrary to any
Environmental Laws in each case in any manner that could reasonably be expected
to result in a Material Adverse Effect; and
(c) all buildings on all real properties now owned, leased or operated by the
Company or any of its Subsidiaries are in compliance with applicable
Environmental Laws, except where failure to comply could not reasonably be
expected to result in a Material Adverse Effect.
    Section 5.19. Ranking of Notes . The Company’s obligations under this
Agreement will, upon issuance of the Notes, rank pari passu with all of its
other outstanding senior unsecured Debt.
    Section 5.20. Subsidiary Guarantee. Each Subsidiary Guarantor has executed
and delivered the Subsidiary Guarantee and the Subsidiary Guarantee constitutes
the legal, valid and binding obligation of each Subsidiary Guarantor enforceable
against each Subsidiary Guarantor in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
Each Subsidiary of the Company which is obligated whether by guarantee or as a
direct obligor, in respect of the Bank Agreement is a Subsidiary Guarantor
hereunder.
 
SECTION 6.   REPRESENTATIONS OF THE PURCHASER.
 
    Section 6.1. Purchase for Investment. You represent that you are purchasing
the Notes for your own account or for one or more separate accounts maintained
by you or for the account of one or more pension or trust funds and not with a
view to the distribution thereof, provided that the disposition of your or their
property shall at all times be within your or their control. You understand that
the Notes have not been registered under the Securities Act and may be resold
only if registered pursuant to the provisions of the Securities Act or if an
exemption from registration is available, except under circumstances where
neither such registration nor such an exemption is required by law, and that the
Company is not required to register the Notes.
 
    Section 6.2. Source of Funds. You represent that at least one of the
following statements is an accurate representation as to each source of funds (a
“Source” ) to be used by you to pay the purchase price of the Notes to be
purchased by you hereunder:
(a) the Source is an “insurance company general account” (as the term is defined
in the United States Department of Labor’s Prohibited Transaction Exemption (
“PTE” ) 95-60) in respect of which the reserves and liabilities (as defined by
the annual statement for life insurance companies approved by the National
Association of Insurance Commissioners (the “NAIC Annual Statement” )) for the
general account contract(s) held by or on behalf of any employee benefit plan
together with the amount of the reserves and liabilities for the general account
contract(s) held by or on behalf of any other employee benefit plans maintained
by the same employer (or affiliate thereof as defined in PTE 95-60) or by the
same employee organization in the general account do not exceed 10% of the total
reserves and liabilities of the general account (exclusive of separate account
liabilities) plus surplus as set forth in the NAIC Annual Statement filed with
your state of domicile; or
(b) the Source is a separate account that is maintained solely in connection
with your fixed contractual obligations under which the amounts payable, or
credited, to any employee benefit plan (or is related trust) that has any
interest in such separate account (or to any participant or beneficiary of such
plan (including an annuitant)) are not affected in any manner by the investment
performance of the separate account; or
(c) the Source is either (i) an insurance company pooled separate account,
within the meaning of PTE 90-1 or (ii) a bank collective investment fund, within
the meaning of PTE 91-38 and, except as you have disclosed to the Company in
writing pursuant to this clause (c), no employee benefit plan or group of plans
maintained by the same employer or employee organization beneficially owns more
than 10% of all assets allocated to such pooled separate account or collective
investment fund; or
(d) the Source constitutes assets of an “investment fund” (within the meaning of
Part V of PTE 84-14 (the “QPAM Exemption” )) managed by a “qualified
professional asset manager” or “QPAM” (within the meaning of Part V of the QPAM
Exemption), no employee benefit plan’s assets that are included in such
investment fund, when combined with the assets of all other employee benefit
plans established or maintained by the same employer or by an affiliate (within
the meaning of section V(c)(1) of the QPAM Exemption) of such employer or by the
same employee organization and managed by such QPAM, exceed 20% of the total
client assets managed by such QPAM, the conditions of Part I(c) and (g) of the
QPAM Exemption are satisfied, neither the QPAM nor a Person controlling or
controlled by the QPAM (applying the definition of “control” in section V(e) of
the QPAM Exemption) owns a 5% or more interest in the Company and (i) the
identity of such QPAM and (ii) the names of all employee benefit plans whose
assets are included in such investment fund have been disclosed to the Company
in writing pursuant to this clause (d); or
(e) the Source constitutes assets of a “plan(s)” (within the meaning of
Section IV of PTE 96-23 (the “INHAM Exemption” ) managed by an “in-house asset
manager” or INHAM” (within the meaning of Part IV of the INHAM exemption), the
conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied,
neither the INHAM nor a Person controlling or controlled by the INHAM (applying
the definition of “control” in Section IV(h) of the INHAM Exemption) owns a 5%
or more interest in the Company and (i) the identity of such INHAM and (ii) the
name(s) of the employee benefit plan(s) whose assets constitute the Source have
been disclosed to the Company in writing pursuant to this clause (e); or
(f) the Source is a governmental plan; or
(g) the Source is one or more employee benefit plans, or a separate account or
trust fund comprised of one or more employee benefit plans, each of which has
been identified to the Company in writing pursuant to this clause (g); or
(h) the Source does not include assets of any employee benefit plan, other than
a plan exempt from the coverage of ERISA.
All used in this Section 6.2, the terms “employee benefit plan,” “governmental
plan,” and “separate account” shall have the respective meanings assigned to
such terms in section 3 of ERISA.
 
SECTION 7.       INFORMATION AS TO COMPANY.
 
    Section 7.1. Financial and Business Information. The Company shall deliver
to each holder of Notes that is an Institutional Investor:
(a) Quarterly Statements —within 60 days after the end of each quarterly fiscal
period in each fiscal year of the Company (other than the last quarterly fiscal
period of each such fiscal year), duplicate copies of:
(i) a consolidated balance sheet of the Company and its Subsidiaries as at the
end of such quarter, and
(ii) consolidated statements of income, changes in shareholders’ equity and cash
flows of the Company and its Subsidiaries for such quarter and (in the case of
the second and third quarters) for the portion of the fiscal year ending with
such quarter,
setting forth in each case in comparative form the figures for the corresponding
periods in the previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to quarterly financial statements generally, and
certified by a Senior Financial Officer as fairly presenting, in all material
respects, the financial position of the companies being reported on and their
results of operations and cash flows, subject to changes resulting from year-end
adjustments, provided that delivery within the time period specified above of
copies of the Company’s Quarterly Report on Form 10-Q prepared in compliance
with the requirements therefor and filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of this Section 7.1(a);
(b) Annual Statements —within 105 days after the end of each fiscal year of the
Company, duplicate copies of,
(i) a consolidated balance sheet of the Company and its Subsidiaries, as at the
end of such year, and
(ii) consolidated statements of income, changes in shareholders’ equity and cash
flows of the Company and its Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP, and
accompanied:
(A) by an opinion thereon of independent certified public accountants of
recognized national standing, which opinion shall state that such financial
statements present fairly, in all material respects, the financial position of
the companies being reported upon and their results of operations and cash flows
and have been prepared in conformity with GAAP, and that the examination of such
accountants in connection with such financial statements has been made in
accordance with generally accepted auditing standards, and that such audit
provides a reasonable basis for such opinion in the circumstances, and
(B) a certificate of such accountants stating that they have reviewed this
Agreement and stating further whether, in making their audit, they have become
aware of any condition or event that then constitutes a Default or an Event of
Default, and, if they are aware that any such condition or event then exists,
specifying the nature and period of the existence thereof (it being understood
that such accountants shall not be liable, directly or indirectly, for any
failure to obtain knowledge of any Default or Event of Default unless such
accountants should have obtained knowledge thereof in making an audit in
accordance with generally accepted auditing standards or did not make such an
audit), provided that the delivery within the time period specified above of the
Company’s Annual Report on Form 10-K for such fiscal year (together with the
Company’s annual report to shareholders, if any, prepared pursuant to Rule 14a-3
under the Exchange Act) prepared in accordance with the requirements therefor
and filed with the Securities and Exchange Commission, together with the
accountant’s certificate described in clause (B) above, shall be deemed to
satisfy the requirements of this Section 7.1(b);
(c) SEC and Other Reports — promptly upon their becoming available, one copy of
(i) each financial statement, report, notice or proxy statement sent by the
Company or any Subsidiary to public securities holders generally, and (ii) each
regular or periodic report, each registration statement (without exhibits except
as expressly requested by such holder), and each prospectus and all amendments
thereto filed by the Company or any Subsidiary with the Securities and Exchange
Commission and of all press releases and other statements made available
generally by the Company or any Subsidiary to the public concerning developments
that are Material;
(d) Notice of Default or Event of Default — promptly, and in any event within
five days after a Responsible Officer becoming aware of the existence of any
Default or Event of Default or that any Person has given any notice or taken any
action with respect to a claimed default hereunder or that any Person has given
any notice or taken any action with respect to a claimed default of the type
referred to in Section 11(f), a written notice specifying the nature and period
of existence thereof and what action the Company is taking or proposes to take
with respect thereto;
(e) ERISA Matters — promptly, and in any event within five days after a
Responsible Officer becoming aware of any of the following, a written notice
setting forth the nature thereof and the action, if any, that the Company or an
ERISA Affiliate proposes to take with respect thereto:
(i) with respect to any Plan, any reportable event, as defined in
section 4043(b) of ERISA and the regulations thereunder, for which notice
thereof has not been waived pursuant to such regulations as in effect on the
date hereof; or
(ii) the taking by the PBGC of steps to institute, or the threatening by the
PBGC of the institution of, proceedings under section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer
Plan that such action has been taken by the PBGC with respect to such
Multiemployer Plan; or
(iii) any event, transaction or condition that could result in the incurrence of
any liability by the Company or any ERISA Affiliate pursuant to Title I or IV of
ERISA or the penalty or excise tax provisions of the Code relating to employee
benefit plans, or in the imposition of any Lien on any of the rights, properties
or assets of the Company or any ERISA Affiliate pursuant to Title I or IV of
ERISA or such penalty or excise tax provisions, if such liability or Lien, taken
together with any other such liabilities or Liens then existing, could
reasonably be expected to have a Material Adverse Effect;
(f) Notices from Governmental Authority — promptly, and in any event within 30
days of receipt thereof, copies of any notice to the Company or any Subsidiary
from any Federal or state Governmental Authority relating to any order, ruling,
statute or other law or regulation that could reasonably be expected to have a
Material Adverse Effect;
(g) Supplements — promptly and in any event within 10 Business Days after the
execution and delivery of any Supplement, a copy thereof; and
(h) Requested Information — with reasonable promptness, such other data and
information relating to the business, operations, affairs, financial condition,
assets or properties of the Company or any of its Subsidiaries or relating to
the ability of the Company to perform its obligations hereunder and under the
Notes as from time to time may be reasonably requested by any such holder of
Notes.
 
    Section 7.2. Officer’s Certificate. Each set of financial statements
delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b)
hereof shall be accompanied by a certificate of a Senior Financial Officer
setting forth:
(a) Covenant Compliance — the information (including detailed calculations)
required in order to establish whether the Company was in compliance with the
requirements of Sections 10.3 through 10.6 hereof, inclusive, during the
quarterly or annual period covered by the statements then being furnished
(including with respect to each such Section, where applicable, the calculations
of the maximum or minimum amount, ratio or percentage, as the case may be,
permissible under the terms of such Sections, and the calculation of the amount,
ratio or percentage then in existence); and
(b) Event of Default — a statement that such officer has reviewed the relevant
terms hereof and has made, or caused to be made, under his or her supervision, a
review of the transactions and conditions of the Company and its Subsidiaries
from the beginning of the quarterly or annual period covered by the statements
then being furnished to the date of the certificate and that such review shall
not have disclosed the existence during such period of any condition or event
that constitutes a Default or an Event of Default or, if any such condition or
event existed or exists (including, without limitation, any such event or
condition resulting from the failure of the Company or any Subsidiary to comply
with any Environmental Law), specifying the nature and period of existence
thereof and what action the Company shall have taken or proposes to take with
respect thereto.
 
    Section 7.3. Inspection. The Company shall permit the representatives of
each holder of Notes that is an Institutional Investor:
(a) No Default — if no Default or Event of Default then exists, at the expense
of such holder and upon reasonable prior notice to the Company, to visit the
principal executive office of the Company, to discuss the affairs, finances and
accounts of the Company and its Subsidiaries with the Company’s officers, and
(with the consent of the Company, which consent will not be unreasonably
withheld) its independent public accountants, and (with the consent of the
Company, which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each Subsidiary, all at such
reasonable times and as often as may be reasonably requested in writing; and
(b) Default — if a Default or Event of Default then exists, at the expense of
the Company to visit and inspect any of the offices or properties of the Company
or any Subsidiary, to examine all their respective books of account, records,
reports and other papers, to make copies and extracts therefrom, and to discuss
their respective affairs, finances and accounts with their respective officers
and independent public accountants (and by this provision the Company authorizes
said accountants to discuss the affairs, finances and accounts of the Company
and its Subsidiaries), all at such times and as often as may be requested.
 
SECTION 8.    PREPAYMENT OF THE NOTES.
 
    Section 8.1. Required Prepayments. Except as otherwise provided in this
Section 8 and in Section 12.1, the Series A Notes are not subject to mandatory
prepayments of principal. The entire outstanding principal amount of the Series
A Notes, together with all accrued and unpaid interest thereon, shall be due and
payable on May 22, 2010.
 
    Section 8.2. Optional Prepayments. The Company may, at its option, upon
notice as provided below, prepay on any Interest Payment Date all, or any part
of, the Series A Notes, in an amount not less than 10% of the aggregate
principal amount of the Series A Notes then outstanding in the case of a partial
prepayment at a price equal to (i) in the case of any such prepayment on or
prior to May 22, 2004, 101% of the principal amount so prepaid, together with
interest accrued thereon to the date of such prepayment and (ii) in the case of
any such prepayment on or after May 23, 2004, 100% of the principal amount so
prepaid, together with interest accrued thereon to the date of such prepayment.
The Company will give each holder of Series A Notes written notice of each
optional prepayment under this Section 8.2 not less than 30 days and not more
than 60 days prior to the Interest Payment Date fixed for such prepayment. Each
such notice shall specify such date, the aggregate principal amount of the
Series A Notes to be prepaid on such date, the principal amount of each Series A
Note held by such holder to be prepaid (determined in accordance with
Section 8.4), and the interest to be paid on the prepayment date with respect to
such principal amount being prepaid.
 
    Section 8.3. Change in Control .
(a) Notice of Change in Control or Control Event . The Company will, within five
(5) Business Days after any Responsible Officer has knowledge of the occurrence
of any Change in Control or Control Event, give written notice of such Change in
Control or Control Event to each holder of Notes unless notice in respect of
such Change in Control (or the Change in Control contemplated by such Control
Event) shall have been given pursuant to Section 8.3(b). If a Change in Control
has occurred, such notice shall contain and constitute an offer to prepay the
Notes as described in Section 8.3(c) hereof and shall be accompanied by the
certificate described in Section 8.3(f).
(b) Conditions to Company Action . The Company will not take any action that
consummates or finalizes a Change in Control unless at least fifteen (15) days
prior to such action it shall have given to each holder of Notes written notice
containing and constituting an offer to prepay Notes as described in Section
8.3(c), accompanied by the certificate described in Section 8.3(f).
(c) Offer to Prepay Notes . The offer to prepay Notes contemplated by paragraphs
(a) and (b) of this Section 8.3 shall be an offer to prepay, in accordance with
and subject to this Section 8.3, all, but not less than all, the Notes held by
each holder (in this case only, “holder” in respect of any Note registered in
the name of a nominee for a disclosed beneficial owner shall mean such
beneficial owner) on a date specified in such offer (the “Proposed Prepayment
Date” ) which shall be the next Interest Payment Date which is at least 15 days
after the date of the notice of prepayment.
(d) Acceptance . A holder of Notes may accept the offer to prepay made pursuant
to this Section 8.3 by causing a notice of such acceptance to be delivered to
the Company at least five (5) Business Days prior to the Proposed Prepayment
Date. A failure by a holder of Notes to respond to an offer to prepay made
pursuant to this Section 8.3 shall be deemed to constitute a rejection of such
offer by such holder.
(e) Prepayment . Prepayment of the Notes to be prepaid pursuant to this
Section 8.3 shall be at 100% of the principal amount of the Notes together with
accrued and unpaid interest thereon. The prepayment shall be made on the
Proposed Prepayment Date.
(f) Officer’s Certificate . Each offer to prepay the Notes pursuant to this
Section 8.3 shall be accompanied by a certificate, executed by the Senior
Financial Officer of the Company and dated the date of such offer, specifying:
(i) the Proposed Prepayment Date; (ii) that such offer is made pursuant to this
Section 8.3; (iii) the principal amount of each Note offered to be prepaid; (iv)
the interest that would be due on each Note offered to be prepaid, accrued to
the Proposed Prepayment Date; (v) that the conditions of Section 8.3(a) or (b)
have been fulfilled; and (vi) in reasonable detail, the nature and date or
proposed date of the Change in Control.
(g) Certain Definitions. “Change in Control” shall be deemed to have occurred if
any person (as such term is used in Section 13(d) and Section 14(d)(2) of the
Exchange Act as in effect on the date of the Closing) or related persons
constituting a group (as such term is used in Rule 13d-5 under the Exchange
Act), other than a group including, and under the general supervision of, one or
more members of the Excluded Group:
(i) become the “beneficial owners” (as such term is used in Rule 13d-3 under the
Exchange Act as in effect on the date of the Closing), directly or indirectly,
of more than 50% of the total voting power of all classes then outstanding of
the voting stock or membership or other equity interests of the Company, or
(ii) acquire after the date of the Closing (x) the power to elect, appoint or
cause the election or appointment of at least a majority of the members of the
board of directors of the Company, through beneficial ownership of the capital
stock of the Company or otherwise, or (y) all or substantially all of the
properties and assets of the Company.
 
“Control Event” means:
(i) the execution by the Company or an Affiliate of any agreement or letter of
intent with respect to any proposed transaction or event or series of
transactions or events which, individually or in the aggregate, may reasonably
be expected to result in a Change in Control,
(ii) the execution of any written agreement which, when fully performed by the
parties thereto, would result in a Change in Control, or
(iii) the making of any written offer by any person (as such term is used in
Section 13(d) and Section 14(d)(2) of the Exchange Act as in effect on the date
of the Closing) or related persons constituting a group (as such term is used in
Rule 13d-5 under the Exchange Act as in effect on the date of the Closing) to
the holders of the outstanding equity of the Company, which offer, if accepted
by the requisite number of holders, would result in a Change in Control.
 
“Excluded Group” means and includes the Chairman of the Company (as of the date
of Closing) and the individuals described in Item 4A of Part I of the 2002
Annual Report of the Company.
 
(h) All calculations contemplated in this Section 8.3 involving the capital
stock or other equity interest of any Person shall be made with the assumption
that all convertible securities of such Person then outstanding and all
convertible securities issuable upon the exercise of any warrants, options and
other rights outstanding at such time were converted at such time and that all
options, warrants and similar rights to acquire shares of capital stock or other
equity interest of such Person were exercised at such time.
 
    Section 8.4. Allocation of Partial Prepayments. In the case of each partial
prepayment of the Series A Notes pursuant to Section 8.2, the principal amount
of the Series A Notes to be prepaid shall be allocated among all of the Series A
Notes at the time outstanding in proportion, as nearly as practicable, to the
respective unpaid principal amounts thereof not theretofore called for
prepayment.
    Section 8.5. Maturity; Surrender, Etc. In the case of each prepayment of
Series A Notes pursuant to this Section 8, the principal amount of each Series A
Note to be prepaid shall mature and become due and payable on the date fixed for
such prepayment, together with interest on such principal amount accrued to such
date and the applicable premium, if any. From and after such date, unless the
Company shall fail to pay such principal amount when so due and payable,
together with the interest and premium, if any, as aforesaid, interest on such
principal amount shall cease to accrue. Any Series A Note paid or prepaid in
full shall be surrendered to the Company and cancelled and shall not be
reissued, and no Note shall be issued in lieu of any prepaid principal amount of
any Series A Note. All prepayments made with respect to any Additional Series of
Notes pursuant to any Supplement shall be allocated as therein provided.
    Section 8.6. Purchase of Notes. The Company will not and will not permit any
Affiliate to purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Series A Notes except upon the payment or
prepayment of the Series A Notes in accordance with the terms of this Agreement
and the Series A Notes. The Company will promptly cancel all Series A Notes
acquired by it or any Affiliate pursuant to any payment, prepayment or purchase
of Series A Notes pursuant to any provision of this Agreement and no Series A
Notes may be issued in substitution or exchange for any such Series A Notes.
 
SECTION 9.    AFFIRMATIVE COVENANTS.
 
The Company covenants that so long as any of the Notes are outstanding:
    Section 9.1. Compliance with Law. The Company will and will cause each of
its Subsidiaries to comply with all laws, ordinances or governmental rules or
regulations to which each of them is subject, including, without limitation,
Environmental Laws, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations
necessary to the ownership of their respective properties or to the conduct of
their respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or regulations
or failures to obtain or maintain in effect such licenses, certificates,
permits, franchises and other governmental authorizations could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
    Section 9.2. Insurance. The Company will and will cause each of its
Subsidiaries to maintain, with financially sound and reputable insurers,
insurance with respect to their respective properties and businesses against
such casualties and contingencies, of such types, on such terms and in such
amounts (including deductibles, co-insurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or a similar business
and similarly situated.
    Section 9.3. Maintenance of Properties. The Company will and will cause each
of its Subsidiaries to maintain and keep, or cause to be maintained and kept,
their respective properties in good repair, working order and condition (other
than ordinary wear and tear), so that the business carried on in connection
therewith may be properly conducted at all times, provided that this Section
shall not prevent the Company or any Subsidiary from discontinuing the operation
and the maintenance of any of its properties if such discontinuance is desirable
in the conduct of its business and the Company has concluded that such
discontinuance could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
    Section 9.4. Payment of Taxes and Claims. The Company will and will cause
each of its Subsidiaries to file all tax returns required to be filed in any
jurisdiction and to pay and discharge all taxes shown to be due and payable on
such returns and all other taxes, assessments, governmental charges, or levies
imposed on them or any of their properties, assets, income or franchises, to the
extent such taxes and assessments have become due and payable and before they
have become delinquent and all claims for which sums have become due and payable
that have or might become a Lien on properties or assets of the Company or any
Subsidiary, provided that neither the Company nor any Subsidiary need pay any
such tax or assessment or claims if (i) the amount, applicability or validity
thereof is contested by the Company or such Subsidiary on a timely basis in good
faith and in appropriate proceedings, and the Company or a Subsidiary has
established adequate reserves therefor in accordance with GAAP on the books of
the Company or such Subsidiary or (ii) the nonpayment of all such taxes and
assessments in the aggregate could not reasonably be expected to have a Material
Adverse Effect.
    Section 9.5. Corporate Existence, Etc. The Company will at all times
preserve and keep in full force and effect its corporate existence. Subject to
Sections 10.2 and 10.6, the Company will at all times preserve and keep in full
force and effect the corporate existence of each of its Subsidiaries (unless
merged into the Company or a Subsidiary) and all rights and franchises of the
Company and its Subsidiaries unless, in the good faith judgment of the Company,
the termination of or failure to preserve and keep in full force and effect such
corporate existence, right or franchise could not, individually or in the
aggregate, have a Material Adverse Effect.
    Section 9.6. Notes to Rank Pari Passu. The Notes shall at all times shall
remain direct and (subject to any applicable requirement of Section 10.5)
unsecured obligations of the Company ranking pari passu with all other Notes
from time to time issued and outstanding hereunder without any preference among
themselves and pari passu with all other present and future unsecured Debt of
the Company (subject to any applicable requirement of Section 10.5) which is not
expressed to be subordinate or junior in rank to any other unsecured Debt of the
Company.
    Section 9.7. Subsidiary Guarantee; Release. (a) The Company will ensure at
all times that any Subsidiary that has outstanding a Guaranty or direct
liability with respect to the Bank Agreement is a Subsidiary Guarantor.
(b) The Company will cause each Subsidiary that is required to become a
Subsidiary Guarantor after the date of the Closing to execute and deliver the
Subsidiary Guarantee or the Subsidiary Guarantee Supplement, as applicable,
(within 30 days of such Subsidiary being required to become a Subsidiary
Guarantor);
(c) Notwithstanding anything in this Agreement, in the Subsidiary Guarantee or
in any Subsidiary Guarantee Supplement to the contrary, upon notice by the
Company to each holder of a Note (which notice shall contain a certification by
the Company as to the matters specified in clauses (i) and (ii) below), any
Subsidiary Guarantor specified in such notice shall cease to be a Subsidiary
Guarantor and shall be automatically released from its obligations under the
Subsidiary Guarantee (without the need for the execution or delivery of any
other document by the holders of Notes or any other Person) if, as at the date
of such notice and after giving effect to such release, no Default or Event of
Default shall have occurred and be continuing, and either (i) such Subsidiary
Guarantor shall no longer be a Subsidiary of the Company or (ii) such Subsidiary
Guarantor shall not have outstanding a Guaranty with respect to any Debt
outstanding under the Bank Agreement (and shall not otherwise be obligated
(directly or indirectly) with respect to any such Bank Agreement) and shall not
guarantee any other Debt.
 
SECTION 10.    NEGATIVE COVENANTS.
 
The Company covenants that so long as any of the Notes are outstanding:
    Section 10.1. Transactions with Affiliates . The Company will not and will
not permit any Subsidiary to enter into directly or indirectly any transaction
or Material group of related transactions (including without limitation the
purchase, lease, sale or exchange of properties of any kind or the rendering of
any service) with any Affiliate (other than the Company or another Subsidiary),
except in the ordinary course and pursuant to the reasonable requirements of the
Company’s or such Subsidiary’s business and upon fair and reasonable terms no
less favorable to the Company or such Subsidiary than would be obtainable in a
comparable arm’s-length transaction with a Person not an Affiliate.
    Section 10.2. Merger and Consolidation . The Company will not, and will not
permit any of its Subsidiaries to, merge or consolidate with or into any other
Person or convey, transfer or lease all or substantially all of its assets in a
single transaction or series of transactions to any Person except:
(a) any Subsidiary may merge or consolidate with or into the Company or convey
all or substantially all of its assets to the Company, provided that the Company
is the continuing or surviving corporation and immediately prior to, and
immediately after giving effect to, such transaction, no Default or Event of
Default would exist;
(b) any Subsidiary may merge or consolidate with or into another Subsidiary or
convey all or substantially all of its assets to such other Subsidiary, provided
that immediately prior to, and immediately after giving effect to, such
transaction, no Default or Event of Default would exist;
(c) any Subsidiary (i) may merge or consolidate with or into any other
corporation, provided that such Subsidiary is the surviving corporation and
immediately prior to, and immediately after giving effect to such transaction,
no Default or Event of Default would exist or (ii) may sell all or substantially
all of its assets to any other Person or merge with or into such other Person
such that the survivor is not a Subsidiary if, as the case may be, such sale or
merger would be permitted under Section 10.6 hereof and, in either case,
immediately prior to, and immediately after giving effect to such transaction,
no Default or Event of Default would exist;
(d) the Company may merge or consolidate with any other Person if (i) the
Company is the surviving entity, (ii) such entity is a solvent corporation
organized and existing under the laws of the United States of America or any
State thereof or the District of Columbia and (iii) immediately after giving
effect to such transaction, no Default or Event of Default would exist; and
(e) the Company may merge or consolidate with or into any other Person, or sell
all or substantially all of its assets (in a single transaction or series of
transactions) if
(i) the surviving or acquiring entity (the “Successor Corporation” ) is a
solvent corporation organized and existing under the laws of the United States
of America, any State thereof or the District of Columbia;
(ii) the Successor Corporation, if not the Company, shall have executed and
delivered to each holder of any Notes its assumption of the due and punctual
performance and observance of the obligations of the Company under this
Agreement and the Notes, including, without limitation, all covenants herein and
therein contained, pursuant to documents in form and substance satisfactory to
the Required Holders, and the Company shall have caused to be delivered to each
holder an opinion, in form and substance satisfactory to the Required Holders,
of independent counsel reasonably satisfactory to the Required Holders, to the
effect that all agreements or instruments effecting such assumption are
enforceable in accordance with their terms and comply with the terms hereof; and
(iii) immediately after giving effect to such transaction, no Default or Event
of Default would exist.
No such conveyance, transfer or lease of substantially all of the assets of the
Company shall have the effect of releasing the Company or any successor
corporation that shall theretofore have become such in the manner prescribed in
this Section 10.2 from its liability under this Agreement or the Notes.
    Section 10.3. Minimum Consolidated Adjusted Net Worth . The Company will
not, at any time, permit Consolidated Adjusted Net Worth to be less than the
remainder of (i) $300,000,000 minus (ii) the Vail Adjustment.
    Section 10.4. Additional Limitations on Total Debt and Priority Debt.
(a) Leverage Ratio. As of the end of each fiscal quarter of the Company, the
Company will not permit the Leverage Ratio to be greater than 3.50 to 1.00.
(b) Priority Debt. The Company will not, at any time, permit Priority Debt to
exceed 20% of Consolidated Adjusted Net Worth.
    Section 10.5. Liens. The Company will not, and will not permit any
Subsidiary to, cause or permit to exist, or agree or consent to cause or permit
to exist in the future (upon the happening of a contingency or otherwise), any
of the properties of the Company or any such Subsidiary, whether now owned or
hereafter acquired, or upon any income or profits therefrom, or assign or
otherwise convey any right to receive income or profits (unless it makes, or
causes to be made, effective provision whereby the Notes will be equally and
ratably secured with any and all other obligations thereby secured, such
security to be pursuant to an agreement reasonably satisfactory to the Required
Holders and, in any such case, the Notes shall have the benefit, to the fullest
extent that, and with such priority as, the holders of the Notes may be entitled
under applicable law, of an equitable Lien on such property), except:
(a) Liens for taxes, assessments or other governmental charges or levies which
are not yet due and payable or the payment of which is not at the time required
by Section 9.4;
(b) any attachment or judgment Lien, unless the judgment it secures shall not,
within 60 days after the entry thereof, have been discharged or execution
thereof stayed pending appeal, or shall not have been discharged within 60 days
after the expiration of any such stay or shall not be currently contested in
good faith by appropriate proceedings;
(c) Liens existing on the date of this Agreement and securing the Debt of the
Company or any Subsidiary referred to in Schedule 5.15;
(d) Liens (other than any Lien imposed by ERISA) incurred or deposits made in
the ordinary course of business (1) in connection with workers’ compensation,
unemployment insurance, other types of social security or retirement benefits
and insurance regulatory requirements or (2) to secure (or to obtain letters of
credit that secure) the performance of tenders, statutory obligations, surety
bonds, appeal bonds, bids, leases (other than Capital Leases), performance
bonds, purchase, construction or sales contracts and other similar obligations
provided that such Liens, in the aggregate, to not detract in a Material way
from the value of the assets of the Company or its Subsidiaries or impact in a
Material way the use thereof in the operation of their business and are not
incurred in connection with the borrowing of money;
(e) any Lien created to secure all or any part of the purchase price, or to
secure Debt incurred or assumed to pay all or any part of the purchase price or
cost of construction, of property (or any improvement thereon) acquired or
constructed by the Company or a Subsidiary after the date of the Closing,
including any Lien existing on property of a Person immediately prior to its
being consolidated with or merged into the Company or a Subsidiary or its
becoming a Subsidiary, or any Lien existing on any property acquired by the
Company or any Subsidiary at the time such property is so acquired (whether or
not the Debt secured thereby shall have been assumed), provided that
(i) any such Lien shall extend solely to the item or items of such property
(and/or improvement thereon) so acquired or constructed and, if required by the
terms of the instrument originally creating such Lien, other property (and/or
improvement thereon) which is an improvement to or is acquired for specific use
in connection with such acquired or constructed property (and/or improvement
thereon) or which is real property being improved by such acquired or
constructed property (or improvement thereon),
(ii) the principal amount of the Debt secured by any such Lien shall at no time
exceed an amount equal to 100% of the fair market value (as determined in good
faith by the board of directors of such Company or Subsidiary incurring such
Lien) of such property (and/or improvement thereon) at the time of such
acquisition or construction, and
(iii) any such Lien shall be created contemporaneously with, or within the
period beginning 180 days before and ending 180 days after, the acquisition or
construction of such property;
(f) any Lien renewing, extending or refunding any Lien permitted by
paragraph (c) of this Section 10.5, provided that (i) the principal amount of
Debt secured by such Lien immediately prior to such extension, renewal or
refunding is not increased or the maturity thereof reduced, (ii) such Lien is
not extended to any other property, and (iii) immediately after such extension,
renewal or refunding no Default or Event of Default would exist;
(g) Liens on property or assets of the Company or any Subsidiary securing Debt
owing to the Company or to a Wholly-Owned Subsidiary;
(h) Liens on accounts receivable and related contract rights of the Company or
any Subsidiary in favor of purchasers or providers of financing under the
Accounts Receivable Financing Program; and
(i) any Lien (other than a Lien permitted under clause (a) through clause (h)
above) securing any Debt of the Company or any Subsidiary, which Debt is
permitted hereunder including under Section 10.4.
    Section 10.6. Sale of Assets. Except as permitted under Section 10.2, the
Company will not, and will not permit any of its Subsidiaries to, make any Asset
Disposition unless:
(a) in the good faith opinion of the Company or Subsidiary making the Asset
Disposition, the Asset Disposition is in exchange for consideration having a
fair market value at least equal to that of the property exchanged;
(b) immediately after giving effect to the Asset Disposition, no Default or
Event of Default would exist; and
(c) the sum of (i) the Disposition Value of the property subject to such Asset
Disposition, plus (ii) the aggregate Disposition Value for all other property
that was the subject of an Asset Disposition during the period of 365 days
immediately preceding such Asset Disposition would not exceed 25% of
Consolidated Total Assets determined as of the end of the most recently ended
calendar month preceding such Asset Disposition.
To the extent that (i) any Transfer consists of sales of accounts receivable in
accordance with the Accounts Receivable Financing Program or (ii) the Net
Proceeds Amount consisting of cash for any Transfer to a Person other than the
Company or Subsidiary is applied to a Debt Prepayment Application or applied or
committed (and if committed, is in fact applied within 12 months of the
effective date of the commitment) to be applied to a Property Reinvestment
Application within one year after such Transfer, then each such Transfer (or, if
less than all such Net Proceeds Amount is applied as contemplated hereinabove in
subsection (ii), the pro rata percentage thereof which corresponds to the Net
Proceeds Amount so applied), only for the purpose of determining compliance with
subsection (c) of this Section 10.6 as of any date, shall be deemed not to be an
Asset Disposition.
    Section 10.7. Nature of Business . The Company will not, and will not permit
any of the Subsidiaries to, engage in any business, if as a result, when taken
as a whole, the general nature of the businesses in which the Company and the
Subsidiaries are engaged would be substantially changed from the general nature
of the business as is conducted on the date of this Agreement or in other
consumer products markets and the manufacturing of ingredients therefor.
 
SECTION 11.    EVENTS OF DEFAULT.
 
An “Event of Default” shall exist if any of the following conditions or events
shall occur and be continuing:
(a) the Company defaults in the payment of any principal or premium, if any, on
any Note when the same becomes due and payable, whether at maturity or at a date
fixed for prepayment or by declaration or otherwise; or
(b) the Company defaults in the payment of any interest on any Note for more
than five Business Days after the same becomes due and payable; or
(c) the Company defaults in the performance of or compliance with any term
contained in Section 10; or
(d) any Obligor defaults in the performance of or compliance with any term
contained herein (other than those referred to in paragraphs (a), (b) and (c) of
this Section 11) or in any other Financing Agreement and such default is not
remedied within 30 days after the earlier of (i) a Responsible Officer obtaining
actual knowledge of such default and (ii) the Company receiving written notice
of such default from any holder of a Note (any such written notice to be
identified as a “notice of default” and to refer specifically to this paragraph
(d) of Section 11); or
(e) any representation or warranty made in writing by or on behalf of any
Obligor or by any officer of any Obligor in any Financing Agreement or in any
writing furnished in connection with the transactions contemplated hereby proves
to have been false or incorrect in any material respect on the date as of which
made; or
(f) (i) the Company or any Subsidiary is in default (as principal or as
guarantor or other surety) in the payment of any principal of or premium or
make-whole amount or interest on any Debt that is outstanding in an aggregate
principal amount of at least $25,000,000 beyond any period of grace provided
with respect thereto (a “Monetary Default” ), or (ii) the Company or any
Subsidiary is in default in the performance of or compliance with any term of
any evidence of any Debt in an aggregate outstanding principal amount of at
least $25,000,000 or of any mortgage, indenture or other agreement relating
thereto or any other condition exists, and as a consequence of such default or
condition such Debt has become, or has been declared, due and payable before its
stated maturity or before its regularly scheduled dates of payment, or (iii) as
a consequence of the occurrence or continuation of any event or condition (other
than the passage of time or the right of the holder of Debt to convert such Debt
into equity interests), (x) the Company or any Subsidiary has become obligated
to purchase or repay Debt before its regular maturity or before its regularly
scheduled dates of payment in an aggregate outstanding principal amount of at
least $25,000,000, or (y) as a result of a Monetary Default, one or more Persons
have the right to require the Company or any Subsidiary so to purchase or repay
such Debt; or
(g) the Company or any Subsidiary (i) is generally not paying, or admits in
writing its inability to pay, its debts as they become due, (ii) files, or
consents by answer or otherwise to the filing against it of, a petition for
relief or reorganization or arrangement or any other petition in bankruptcy, for
liquidation or to take advantage of any bankruptcy, insolvency, reorganization,
moratorium or other similar law of any jurisdiction, (iii) makes an assignment
for the benefit of its creditors, (iv) consents to the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its property, (v) is
adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for
the purpose of any of the foregoing; or
(h) a court or governmental authority of competent jurisdiction enters an order
appointing, without consent by the Company or any of its Subsidiaries, a
custodian, receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its property, or constituting
an order for relief or approving a petition for relief or reorganization or any
other petition in bankruptcy or for liquidation or to take advantage of any
bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution,
winding-up or liquidation of the Company or any of its Subsidiaries, or any such
petition shall be filed against the Company or any of its Subsidiaries and such
petition shall not be dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money aggregating in excess
of $10,000,000 (excluding any such judgments to the extent a solvent insurer has
acknowledged liability therefor in writing) are rendered against one or more of
the Company and its Subsidiaries and which judgments are not, within 45 days
after entry thereof, bonded, discharged or stayed pending appeal, or are not
discharged within 45 days after the expiration of such stay; or
(j) if (i) any Plan shall fail to satisfy the minimum funding standards of ERISA
or the Code for any plan year or part thereof or a waiver of such standards or
extension of any amortization period is sought or granted under section 412 of
the Code, (ii) a notice of intent to terminate any Plan shall have been or is
reasonably expected to be filed with the PBGC or the PBGC shall have instituted
proceedings under ERISA section 4042 to terminate or appoint a trustee to
administer any Plan or the PBGC shall have notified the Company or any ERISA
Affiliate that a Plan may become a subject of any such proceedings, (iii) the
aggregate “amount of unfunded benefit liabilities” (within the meaning of
section 4001(a)(18) of ERISA) under all Plans, determined in accordance with
Title IV of ERISA, shall exceed $10,000,000, (iv) the Company or any ERISA
Affiliate shall have incurred or is reasonably expected to incur any liability
pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of
the Code relating to employee benefit plans, (v) the Company or any ERISA
Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or any
Subsidiary establishes or amends any employee welfare benefit plan that provides
post-employment welfare benefits in a manner that would increase the liability
of the Company or any Subsidiary thereunder; and any such event or events
described in clauses (i) through (vi) above, either individually or together
with any other such event or events, could reasonably be expected to have a
Material Adverse Effect; or
(k) any Financing Agreement shall cease to be in full force and effect for any
reason whatsoever (except for releases of the Subsidiary Guarantee pursuant to
and in accordance with the provisions of Section 9.7), including, without
limitation, a determination by any Governmental Authority or court that such
Financing Agreement is invalid, void or unenforceable in any material respect or
any party thereto shall contest or deny the validity or enforceability of any of
its obligations under any such Financing Agreement.
As used in Section 11(j), the terms “employee benefit plan” and “employee
welfare benefit plan” shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
 
SECTION 12.    REMEDIES ON DEFAULT, ETC.
 
    Section 12.1. Acceleration. (a) If an Event of Default with respect to the
Company described in paragraph (g) or (h) of Section 11 (other than an Event of
Default described in clause (i) of paragraph (g) or described in clause (vi) of
paragraph (g) by virtue of the fact that such clause encompasses clause (i) of
paragraph (g)) has occurred, all the Notes then outstanding shall automatically
become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing, the Required
Holders may at any time at its or their option, by notice or notices to the
Company, declare all the Notes then outstanding to be immediately due and
payable.
(c) If any Event of Default described in paragraph (a) or (b) of Section 11 has
occurred and is continuing, any holder or holders of Notes at the time
outstanding affected by such Event of Default may at any time, at its or their
option, by notice or notices to the Company, declare all the Notes held by it or
them to be immediately due and payable.
Upon any Notes becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Notes will forthwith mature and the entire
unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest
thereon and (y) in the case of any such acceleration on or before May 22, 2004,
an amount equal to 1.00% of the aggregate principal amount of the Notes (to the
full extent permitted by applicable law), shall all be immediately due and
payable, in each and every case without presentment, demand, protest or further
notice, all of which are hereby waived. The Company acknowledges, and the
parties hereto agree, that each holder of a Note has the right to maintain its
investment in the Notes free from repayment by the Company (except as herein
specifically provided for), and that the provision for payment of the amount
described in clause (y) above, by the Company in the event that the Notes are
prepaid or are accelerated as a result of an Event of Default, is intended to
provide compensation for the deprivation of such right under such circumstances.
    Section 12.2. Other Remedies. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section 12.1, the holder of
any Note at the time outstanding may proceed to protect and enforce the rights
of such holder by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained
herein or in any Note, or for an injunction against a violation of any of the
terms hereof or thereof, or in aid of the exercise of any power granted hereby
or thereby or by law or otherwise.
    Section 12.3. Rescission. At any time after any Notes have been declared due
and payable pursuant to clause (b) or (c) of Section 12.1, the Required Holders,
by written notice to the Company, may rescind and annul any such declaration and
its consequences if (a) the Company has paid all overdue interest on the Notes,
all principal of and premium, if any, on any Notes that are due and payable and
are unpaid other than by reason of such declaration, and all interest on such
overdue principal and premium, if any, and (to the extent permitted by
applicable law) any overdue interest in respect of the Notes, at the Default
Rate, (b) all Events of Default and Defaults, other than non-payment of amounts
that have become due solely by reason of such declaration, have been cured or
have been waived pursuant to Section 17, and (c) no judgment or decree has been
entered for the payment of any monies due pursuant hereto or to the Notes. No
rescission and annulment under this Section 12.3 will extend to or affect any
subsequent Event of Default or Default or impair any right consequent thereon.
    Section 12.4. No Waivers or Election of Remedies, Expenses, Etc. No course
of dealing and no delay on the part of any holder of any Note in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice
such holder’s rights, powers or remedies. No right, power or remedy conferred by
this Agreement or by any Note upon any holder thereof shall be exclusive of any
other right, power or remedy referred to herein or therein or now or hereafter
available at law, in equity, by statute or otherwise. Without limiting the
obligations of the Company under Section 15, the Company will pay to the holder
of each Note on demand such further amount as shall be sufficient to cover all
costs and expenses of such holder incurred in any enforcement or collection
under this Section 12, including, without limitation, reasonable attorneys’
fees, expenses and disbursements.
 
SECTION 13.  REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
 
    Section 13.1. Registration of Notes. The Company shall keep at its principal
executive office a register for the registration and registration of transfers
of Notes. The name and address of each holder of one or more Notes, each
transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a Note that is an
Institutional Investor promptly upon request therefor, a complete and correct
copy of the names and addresses of all registered holders of Notes.
 
    Section 13.2. Transfer and Exchange of Notes. Upon surrender of any Note at
the principal executive office of the Company for registration of transfer or
exchange (and in the case of a surrender for registration of transfer, duly
endorsed or accompanied by a written instrument of transfer duly executed by the
registered holder of such Note or his attorney duly authorized in writing and
accompanied by the address for notices of each transferee of such Note or part
thereof), the Company shall execute and deliver, at the Company’s expense
(except as provided below), one or more new Notes (as requested by the holder
thereof) in exchange therefor, in an aggregate principal amount equal to the
unpaid principal amount of the surrendered Note. Each such new Note shall be
payable to such Person as such holder may request and shall be substantially in
the form of Exhibit 1. Each such new Note shall be dated and bear interest from
the date to which interest shall have been paid on the surrendered Note or dated
the date of the surrendered Note if no interest shall have been paid thereon.
The Company may require payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of Notes. Notes
shall not be transferred in denominations of less than $250,000, provided that
if necessary to enable the registration of transfer by a holder of its entire
holding of Notes, one Note may be in a denomination of less than $250,000. Any
transferee, by its acceptance of a Note registered in its name (or the name of
its nominee), shall be deemed to have made the representation set forth in
Section 6.2.
 
    Section 13.3. Replacement of Notes. Upon receipt by the Company of evidence
reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in the case of
an Institutional Investor, notice from such Institutional Investor of such
ownership and such loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the holder of such Note is, or is a nominee
for, an original Purchaser or an Institutional Investor, such Person’s own
unsecured agreement of indemnity shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.
 
SECTION 14.    PAYMENTS ON NOTES.
 
    Section 14.1. Place of Payment. Subject to Section 14.2, payments of
principal, premium, if any, and interest becoming due and payable on the Notes
shall be made in New York, New York at the principal office of Bank One, N.A.,
in such jurisdiction. The Company may at any time, by notice to each holder of a
Note, change the place of payment of the Notes so long as such place of payment
shall be either the principal office of the Company in such jurisdiction or the
principal office of a bank or trust company in such jurisdiction.
 
    Section 14.2. Home Office Payment. So long as you or your nominee shall be
the holder of any Note, and notwithstanding anything contained in Section 14.1
or in such Note to the contrary, the Company will pay all sums becoming due on
such Note for principal, premium, if any, and interest by the method and at the
address specified for such purpose below your name in Schedule A, or by such
other method or at such other address as you shall have from time to time
specified to the Company in writing for such purpose, without the presentation
or surrender of such Note or the making of any notation thereon, except that
upon written request of the Company made concurrently with or reasonably
promptly after payment or prepayment in full of any Note, you shall surrender
such Note for cancellation, reasonably promptly after any such request, to the
Company at its principal executive office or at the place of payment most
recently designated by the Company pursuant to Section 14.1. Prior to any sale
or other disposition of any Note held by you or your nominee you will, at your
election, either endorse thereon the amount of principal paid thereon and the
last date to which interest has been paid thereon or surrender such Note to the
Company in exchange for a new Note or Notes pursuant to Section 13.2. The
Company will afford the benefits of this Section 14.2 to any Institutional
Investor that is the direct or indirect transferee of any Note purchased by you
under this Agreement and that has made the same agreement relating to such Note
as you have made in this Section 14.2.
 
SECTION 15.    EXPENSES, ETC.
 
    Section 15.1. Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all costs and expenses
(including reasonable attorneys’ fees of a special counsel and, if reasonably
required, local or other counsel) incurred by you and each other Purchaser or
holder of a Note in connection with such transactions and in connection with any
amendments, waivers or consents under or in respect of this Agreement or the
Notes (whether or not such amendment, waiver or consent becomes effective),
including, without limitation: (a) the costs and expenses incurred in enforcing
or defending (or determining whether or how to enforce or defend) any rights
under this Agreement or the Notes or in responding to any subpoena or other
legal process or informal investigative demand issued in connection with this
Agreement or the Notes, or by reason of being a holder of any Note, (b) the
costs and expenses, including financial advisors’ fees, incurred in connection
with the insolvency or bankruptcy of the Company or any Subsidiary or in
connection with any work-out or restructuring of the transactions contemplated
hereby and by the Notes and (c) the cost and expenses incurred in connection
with the initial filing of this Agreement and all related documents and
financial information and all subsequent annual and interim filings of documents
and financial information related to this Agreement, with the Securities
Valuation Office of the National Association of Insurance Commissioners or any
successor organization succeeding to the authority thereof. The Company will
pay, and will save you and each other holder of a Note harmless from, all claims
in respect of any fees, costs or expenses, if any, of brokers and finders (other
than those retained by you).
 
    Section 15.2. Survival. The obligations of the Company under this Section 15
will survive the payment or transfer of any Note, the enforcement, amendment or
waiver of any provision of this Agreement or the Notes, and the termination of
this Agreement.
 
SECTION 16.   SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
 
All representations and warranties contained herein shall survive the execution
and delivery of this Agreement and the Notes, the purchase or transfer by you of
any Note or portion thereof or interest therein and the payment of any Note, and
may be relied upon by any subsequent holder of a Note, regardless of any
investigation made at any time by or on behalf of you or any other holder of a
Note. All statements contained in any certificate or other instrument delivered
by or on behalf of the Company pursuant to this Agreement shall be deemed
representations and warranties of the Company under this Agreement. Subject to
the preceding sentence, this Agreement and the Notes embody the entire agreement
and understanding between you and the Company and supersede all prior agreements
and understandings relating to the subject matter hereof.
 
SECTION 17.    AMENDMENT AND WAIVER.
 
    Section 17.1. Requirements. (a) This Agreement and the Notes may be amended,
and the observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), with (and only with) the written consent of the
Company and the Required Holders, except that (a) no amendment or waiver of any
of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term
(as it is used therein), will be effective as to you unless consented to by you
in writing, and (b) no such amendment or waiver may, without the written consent
of the holder of each Note at the time outstanding affected thereby, (i) subject
to the provisions of Section 12 relating to acceleration or rescission, change
the amount or time of any prepayment or payment of principal of, or reduce the
rate or change the time of payment or method of computation of interest or of
the premium, if any, on the Notes, (ii) change the percentage of the principal
amount of the Notes the holders of which are required to consent to any such
amendment or waiver, or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17, 20
or the form of Supplement.
(b) Supplements . Notwithstanding anything to the contrary contained herein, the
Company may enter into any supplement providing for the issuance of one or more
series of Additional Notes consistent with Sections 2.2 and 4.12 hereof without
obtaining the consent of any holder of any other series of Notes.
 
    Section 17.2. Solicitation of Holders of Notes.
(a) Solicitation . The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 17 to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.
(b) Payment . The Company will not directly or indirectly pay or cause to be
paid any remuneration, whether by way of supplemental or additional interest,
fee or otherwise, or grant any security, to any holder of Notes as consideration
for or as an inducement to the entering into by any holder of Notes or any
waiver or amendment of any of the terms and provisions hereof unless such
remuneration is concurrently paid, or security is concurrently granted, on the
same terms, ratably to each holder of Notes then outstanding even if such holder
did not consent to such waiver or amendment.
 
    Section 17.3. Binding Effect, Etc. Any amendment or waiver consented to as
provided in this Section 17 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note. As used herein, the term “this Agreement” and references thereto shall
mean this Agreement as it may from time to time be amended or supplemented.
 
    Section 17.4. Notes Held by Company, Etc. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes to be
taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company or any of its Affiliates shall be deemed not to
be outstanding.
 
SECTION 18.    NOTICES.
 
All notices and communications provided for hereunder shall be in writing and
sent (a) by telecopy if the sender on the same day sends a confirming copy of
such notice by a recognized overnight delivery service (charges prepaid), or
(b) by registered or certified mail with return receipt requested (postage
prepaid), or (c) by a recognized overnight delivery service (with charges
prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address specified for such
communications in Schedule A, or at such other address as you or it shall have
specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at such address as such
other holder shall have specified to the Company in writing, or
(iii) if to the Company, to the Company at its address set forth at the
beginning hereof to the attention of the Treasurer, or at such other address as
the Company shall have specified to the holder of each Note in writing.
Notices under this Section 18 will be deemed given only when actually received.
 
SECTION 19.    REPRODUCTION OF DOCUMENTS.
 
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, Photostat, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in the regular
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This Section 19
shall not prohibit the Company or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.
 
SECTION 20.    CONFIDENTIAL INFORMATION.
 
For the purposes of this Section 20, “Confidential Information” means
information delivered to you by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly marked or labeled
or otherwise adequately identified when received by you as being confidential
information of the Company or such Subsidiary, provided that such term does not
include information that (a) was publicly known or otherwise known to you prior
to the time of such disclosure, (b) subsequently becomes publicly known through
no act or omission by you or any person acting on your behalf, (c) otherwise
becomes known to you other than through disclosure by the Company or any
Subsidiary or (d) constitutes financial statements delivered to you under
Section 7.1 that are otherwise publicly available. You will maintain the
confidentiality of such Confidential Information in accordance with procedures
adopted by you in good faith to protect confidential information of third
parties delivered to you, provided that you may deliver or disclose Confidential
Information to (i) your directors, officers, employees, agents, attorneys and
affiliates (to the extent such disclosure reasonably relates to the
administration of the investment represented by your Notes and provided that you
use reasonable best efforts to inform such directors, officers, employees,
agents, attorneys and affiliates of this provision), (ii) your financial
advisors and other professional advisors who agree to hold confidential the
Confidential Information substantially in accordance with the terms of this
Section 20, (iii) any other holder of any Note, (iv) any Institutional Investor
to which you sell or offer to sell such Note or any part thereof or any
participation therein (if such Person has agreed in writing prior to its receipt
of such Confidential Information to be bound by the provisions of this
Section 20), (v) any Person from which you offer to purchase any security of the
Company (if such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section 20),
(vi) any federal or state regulatory authority having jurisdiction over you,
(vii) the National Association of Insurance Commissioners or any similar
organization, or any nationally recognized rating agency that requires access to
information about your investment portfolio or (viii) any other Person to which
such delivery or disclosure may be necessary or appropriate (w) to effect
compliance with any law, rule, regulation or order applicable to you, (x) in
response to any subpoena or other legal process, (y) in connection with any
litigation to which you are a party or (z) if an Event of Default has occurred
and is continuing, to the extent you may reasonably determine such delivery and
disclosure to be necessary or appropriate in the enforcement or for the
protection of the rights and remedies under your Notes and this Agreement. Each
holder of a Note, by its acceptance of a Note, will be deemed to have agreed to
be bound by and to be entitled to the benefits of this Section 20 as though it
were a party to this Agreement. On reasonable request by the Company in
connection with the delivery to any holder of a Note of information required to
be delivered to such holder under this Agreement or requested by such holder
(other than a holder that is a party to this Agreement or its nominee), such
holder will enter into an agreement with the Company embodying the provisions of
this Section 20.
 
SECTION 21.    SUBSTITUTION OF PURCHASER.
 
You shall have the right to substitute any one of your Affiliates as the
purchaser of the Notes that you have agreed to purchase hereunder, by written
notice to the Company, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate’s agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, wherever the word “you” is used in this Agreement (other than in
this Section 21), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word “you” is used in this Agreement (other than in this
Section 21), such word shall no longer be deemed to refer to such Affiliate, but
shall refer to you, and you shall have all the rights of an original holder of
the Notes under this Agreement.
 
SECTION 22.    MISCELLANEOUS.
 
    Section 22.1. Successors and Assigns. All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of a Note) whether so expressed or
not.
 
    Section 22.2. Payments Due on Non-Business Days. Anything in this Agreement
or the Notes to the contrary notwithstanding, any payment of principal of or
premium, if any, or interest on any Note that is due on a date other than a
Business Day shall be made on the next succeeding Business Day without including
the additional days elapsed in the computation of the interest payable on such
next succeeding Business Day.
 
    Section 22.3. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
 
    Section 22.4. Construction. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
 
    Section 22.5. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto.
 
    Section 22.6. Governing Law. This Agreement shall be construed and enforced
in accordance with, and the rights of the parties shall be governed by, the law
of the State of New York excluding choice-of-law principles of the law of such
State that would require the application of the laws of a jurisdiction other
than such State.

       

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If you are in agreement with the foregoing, please sign the form of agreement on
the accompanying counterpart of this Agreement and return it to the Company,
whereupon the foregoing shall become a binding agreement between you and the
Company.

Very truly yours,

RALCORP HOLDINGS, INC.

By: /s/ S. Monette     
Name: S. Monette
Title: Corporate Vice President and Treasurer

       

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The foregoing is hereby agreed
to as of the date thereof.

METROPOLITAN LIFE INSURANCE COMPANY

By     /s/ Judith A. Gulotta    
Name: Judith A. Gulotta
Title: Director

       

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The foregoing is hereby agreed
to as of the date thereof.

CONNECTICUT GENERAL LIFE INSURANCE COMPANY

By:    C IGNA Investments, Inc. (authorized agent)

By: /s/ Deborah B. Wiacek        
Name: Deborah B. Wiacek
Title: Managing Director

       

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The foregoing is hereby agreed
to as of the date thereof.

ALLSTATE LIFE INSURANCE COMPANY

By    : /s/ Rhonda L. Hopps    
Name: Rhonda L. Hopps

By    : /s/ Jerry D. Zinkula    
Name: Jerry D. Zinkula
Authorized Signatories

       

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The foregoing is hereby agreed
to as of the date thereof.

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

By:  David L. Babson & Company Inc., as Investment Adviser

By: /s/ Mark A. Ahmed    
Name: Mark A. Ahmed
Title: Managing Director

       

--------------------------------------------------------------------------------

 

The foregoing is hereby agreed
to as of the date thereof.

C.M. LIFE INSURANCE COMPANY

By:  David L. Babson & Company Inc. as Investment Sub-Adviser

By: /s/ Mark A. Ahmed    
Name: Mark A. Ahmed
Title: Managing Director

       

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The foregoing is hereby agreed
to as of the date thereof.

MASS MUTUAL ASIA LIMITED

By:       David L. Babson & Company Inc. as Investment Adviser

By: /s/ Mark A. Ahmed    
Name: Mark A.Ahmed
Title: Managing Director

       

--------------------------------------------------------------------------------

 

The foregoing is hereby agreed
to as of the date thereof.

JACKSON NATIONAL LIFE INSURANCE COMPANY

By:       PPM America, Inc., as attorney in fact,
on behalf of Jackson National Life Insurance Company

By: /s/ Chris Raub        
Name: Chris Raub
Title: Senior Managing Director

       

--------------------------------------------------------------------------------

 

The foregoing is hereby agreed
to as of the date thereof.

JACKSON NATIONAL LIFE INSURANCE COMPANY OF NEW YORK

By:       PPM America, Inc., as attorney in fact,
on behalf of Jackson National Life
            Insurance Company of New York

By: /s/ Chris Raub    
Name: Chris Raub
Title: Senior Managing Director

       

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DEFINED TERMS
As used herein, the following terms have the respective meanings set forth below
or set forth in the Section hereof following such term:
 
“Accounts Receivable Financing Program” means a program of sales or
securitization of, or transfers of interests in, accounts receivable and related
contract rights by the Company or any Subsidiary on a limited recourse basis
provided that each such sale or transfer qualifies as a sale under GAAP.
 
“Additional Notes” is defined in Section 2.2.
 
“Additional Purchasers” means the purchasers of Additional Notes.
 
“ Adjusted EBITDA ” means, for any applicable computation period, the sum of
(a) EBIT for such period plus (b) the Company’s and the Subsidiaries’
amortization and depreciation deducted in determining Net Income for such
period, provided however , that (i) Adjusted EBITDA shall include any Purchase
during the computation period on a pro forma basis for the entire computation
period and (ii) in the event that the Company sells or otherwise disposes of all
or any portion of the capital stock of Vail Resorts, Inc. during such period,
then Adjusted EBITDA shall be calculated by subtracting (adding) all equity
earnings (losses) attributable to such divested interest for such period.
 
“Adjusted LIBOR Rate” shall mean, for any Interest Period, LIBOR plus 85 basis
points.
 
“Affiliate” means, at any time, and with respect to any Person, (a) any other
Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, 10% or more of any class of voting or equity interests of the
Company or any Subsidiary or any corporation of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% or more of any class of voting or equity interests. As used in this
definition, “Control” means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
Unless the context otherwise clearly requires, any reference to an “Affiliate”
is a reference to an Affiliate of the Company.
 
“Asset Disposition” means any Transfer except:
(a) any Transfer from a Subsidiary to the Company or to a Wholly-Owned
Subsidiary so long as immediately before and immediately after the consummation
of any such Transfer and after giving effect thereto, no Default or Event of
Default would exist; and
(b) any Transfer made in the ordinary course of business and involving only
property that is either (1) inventory held for rent or sale or (2) equipment,
fixtures, supplies or materials no longer required in the operation of the
business of the Company or any of its Subsidiaries or that is obsolete; and
(c) any Transfer of the Company’s or any Subsidiary’s equity investment in Vail
Resorts, Inc. provided , that at the time thereof and immediately after giving
effect thereto, no Default or Event of Default exists.
 
“Bank Agreement” means the Credit Agreement dated as of October 16, 2001 among
the Company, the lenders named therein and the agents and arrangers named
therein, as amended or modified from time to time and as extended, renewed,
replaced or refinanced from time to time.
 
“Business Day” means any day other than a Saturday, a Sunday or a day on which
commercial banks in New York, New York are required or authorized to be closed
and, if the applicable Business Day relates to the determination of LIBOR, a day
on which dealings are carried on in U.S. dollar deposits in the London interbank
market.
 
“Capital Lease” means, at any time, a lease with respect to which the lessee is
required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
 
“Closing” is defined in Section 3.
 
“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time.
 
“Company” means Ralcorp Holdings, Inc., a Missouri corporation.
 
“Confidential Information” is defined in Section 20.
 
“Consolidated Adjusted Net Worth” means as of the date of any determination
thereof, the amount of consolidated stockholders equity of the Company and its
Subsidiaries, as determined in the most recent financial statement of the
Company previously provided to the holders pursuant to Section 7.1, plus (but
without duplication and only to the extent excluded or deducted from
stockholders’ equity) (i) any “LIFO Reserve” specifically described in the most
recent financial statement of the Company previously provided to the holders
pursuant to Section 7.1, (ii) deferred income tax liabilities as determined in
the most recent financial statement of the Company previously provided to the
holders pursuant to Section 7.1, (iii) any goodwill incurred (whether
capitalized on the Company’s balance sheet or written off as incurred or
goodwill written off through an impairment to the Company’s goodwill), and
(iv) Minority Interests of the Company and its Subsidiaries, and minus the Vail
Adjustment to the extent included in the computation of consolidated
stockholders’ equity for such period.
 
“ Consolidated ” or “ consolidated” , when used in connection with any
calculation, means a calculation to be determined on a consolidated basis for
the Company and its Subsidiaries in accordance with GAAP.
 
“ Consolidated Interest Expense ” means, with respect to any period (without
duplication) of Consolidated interest expense of the Company and its
Consolidated Subsidiaries for such period before the effect of interest income,
as reflected on the Consolidated statements of income for the Company and its
Subsidiaries for such period.
 
“Consolidated Total Assets” means, as of the date of any determination thereof,
total assets of the Company and its Subsidiaries determined on a consolidated
basis in accordance with GAAP but excluding the Vail Adjustment if included in
determining such total assets.
 
“Debt” with respect to any Person means, at any time, without duplication,
(a) its liabilities for borrowed money;
(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 Capital 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); and
(e) any Guaranty of such Person or letter of credit of such Person, with respect
to liabilities of a type described in any of clauses (a) through (d) hereof.
Debt of any Person shall include all obligations of such Person of the character
described in clauses (a) through (e) to the extent such Person remains legally
liable in respect thereof notwithstanding that any such obligation is deemed to
be extinguished under GAAP. “Debt” of any Person shall not include (i) such
obligations of the character described in clauses (a) through (d) above, if owed
or made by the Company or any Subsidiary to the Company or any Wholly-Owned
Subsidiary or (ii) any unfunded obligations which may now or hereafter exist in
respect of pension, retirement or other similar plans of the Company or any
Subsidiary or (iii) the Ralston Obligations.
 
“Debt Prepayment Application” means, with respect to any Transfer of property
constituting an Asset Disposition, the application by the Company of cash in an
amount equal to the Net Proceeds Amount with respect to such Transfer to pay
Senior Debt (other than Senior Debt owing to the Company, any of its
Subsidiaries or any Affiliate) including a prepayment of the Notes pursuant to
Section 8.2 in a principal amount at least equal to the Net Proceeds Amount
multiplied by a fraction whose numerator is equal to the aggregate principal
amount of all Notes then outstanding and whose denominator is equal to the
aggregate unpaid amount of all Senior Debt; provided , that in the event such
Senior Debt would otherwise permit the reborrowing of such Debt by the Company,
the commitment to relend such Debt shall be permanently reduced by the amount of
such Debt Prepayment Application.
 
“Default” means an event or condition the occurrence or existence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default.
 
“Default Rate” means that rate of interest that is 2.00% per annum plus the
Adjusted LIBOR Rate.
 
“Disposition Value” means, at any time, with respect to any property
(a) in the case of property that does not constitute Subsidiary Stock, the book
value thereof, valued at the time of such disposition in good faith by the
Company, and
(b) in the case of property that constitutes Subsidiary Stock, an amount equal
to that percentage of book value of the assets of the Subsidiary that issued
such Subsidiary Stock as is equal to the percentage that the book value of such
Subsidiary Stock represents of the book value of all of the outstanding capital
stock or similar equity interests of such Subsidiary (assuming, in making such
calculations, that all Securities convertible into such capital stock or similar
equity interests are so converted and giving full effect to all transactions
that would occur or be required in connection with such conversion) determined
at the time of the disposition thereof, in good faith by the Company.
 
“ EBIT ” means, for any applicable computation period, the Company and
Subsidiaries’ Net Income on a consolidated basis plus (a) consolidated federal,
state, local and foreign income and franchises taxes paid or accrued during such
period and (b) Consolidated Interest Expense for such period minus (or plus)
equity earnings (or losses) during such period attributable to equity
investments by the Company and its Subsidiaries in the capital stock or other
equity interests in any Person which is not a Subsidiary (other than Vail
Resorts, Inc.).
 
“Environmental Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including but not limited to
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the rules and regulations promulgated thereunder from
time to time in effect.
 
“ERISA Affiliate” means any trade or business (whether or not incorporated) that
is treated as a single employer together with the Company under section 414 of
the Code.
 
“Event of Default” is defined in Section 11.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“Fair Market Value” means, at any time and with respect to any property, the
sale of value of such property that would be realized in an arm’s-length sale at
such time between an informed and willing buyer and an informed and willing
seller (neither being under a compulsion to buy or sell).
 
“Financing Agreements” shall mean and include this Agreement, the Other
Agreements, the Notes, the Subsidiary Guarantee (including each Subsidiary
Guarantee Supplement) in each case, as amended from time to time in accordance
with the terms and provisions thereof.
 
“GAAP” means generally accepted accounting principles as in effect from time to
time in the United States of America.
 
“Governmental Authority” means
(a) the government of
(i) the United States of America or any State or other political subdivision
thereof, or
(ii) any jurisdiction in which the Company or any Subsidiary conducts all or any
part of its business, or which asserts jurisdiction over any properties of the
Company or any Subsidiary, or
(b) any entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such government.
 
“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, dividend 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 therefor;
(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 obligation;
(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 obligation against
loss in respect thereof.
In any computation of the indebtedness or other liabilities 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 Material” means any and all pollutants, toxic or hazardous wastes or
any other substances that might pose a hazard to health or safety, the removal
of which may be required or the generation, manufacture, refining, production,
processing, treatment, storage, handling, transportation, transfer, use,
disposal, release, discharge, spillage, seepage, or filtration of which is or
shall be restricted, prohibited or penalized by any applicable law (including,
without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
 
“holder” means, with respect to any Note, the Person in whose name such Note is
registered in the register maintained by the Company pursuant to Section 13.1.
 
“Institutional Investor” means (a) any original purchaser of a Note, (b) any
holder of a Note holding more than $2,000,000 of the aggregate principal amount
of the Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
 
“Interest Payment Date” shall have the meaning set forth in Section 1, provided
that if an Interest Payment Date shall fall on a day which is not a Business
Day, such Interest Payment Date shall be deemed to be the first Business Day
following such Interest Payment Date.
 
“Interest Period” shall mean each period commencing on the date of Closing and,
thereafter, commencing on an Interest Payment Date and continuing up to, but not
including, the next Interest Payment Date.
 
“Leverage Ratio” means, with respect to the Company on a consolidated basis with
its Subsidiaries, at the end of any fiscal quarter, the ratio of Total Debt at
the end of such fiscal quarter to Adjusted EBITDA for the four fiscal quarters
then ending.
 
“LIBOR” shall mean, for any Interest Period, the rate per annum (rounded
upwards, if necessary, to the next higher one hundred-thousandth of a percentage
point) for deposits in U.S. Dollars for a 90-day period which appears on the
Bloomberg “BBAM Screen” published by the British Bankers Association or any
successor page or source thereto, effective as of 11:00 a.m. (London, England
time) two (2) Business Days prior to the beginning of such Interest Period (or
three (3) Business Days prior to the beginning of the first Interest Period).
 
“Lien” means, with respect to any Person, any mortgage, lien, pledge, charge,
security interest or other encumbrance, or any interest or title of any vendor,
lessor, lender or other secured party to or of such Person under any conditional
sale or other title retention agreement or Capital Lease, upon or with respect
to any property or asset of such Person (including in the case of stock,
stockholder agreements, voting trust agreements and all similar arrangements).
 
“Material” means material in relation to the business, operations, affairs,
financial condition, assets, properties, or prospects of the Company and its
Subsidiaries taken as a whole.
 
“Material Adverse Effect” means a material adverse effect on (a) the business,
operations, financial condition, assets or properties of the Company and its
Subsidiaries taken as a whole, or (b) the ability of the Company to perform its
obligations under this Agreement and the Notes, or (c) the validity or
enforceability of this Agreement or the Notes.
 
“Memorandum” is defined in Section 5.3.
 
“Minority Interests” mean any shares of stock of any class of a Subsidiary
(other than directors’ qualifying shares as required by law) that are not owned
by the Company and/or one or more of its Subsidiaries. Minority Interests shall
be valued by valuing Minority Interests constituting preferred stock at the
voluntary or involuntary liquidating value of such preferred stock, whichever is
greater, and by valuing Minority Interests constituting common stock at the book
value of capital and surplus applicable thereto adjusted, if necessary, to
reflect any changes from the book value of such common stock required by the
foregoing method of valuing Minority Interests in preferred stock.
 
“Monetary Default” is defined in Section 11.
 
“Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term
is defined in section 4001(a)(3) of ERISA).
 
“ Net Income ” means, for any computation period, with respect to the Company on
a consolidated basis with its Subsidiaries (other than any Subsidiary which is
restricted from declaring or paying dividends or otherwise advancing funds to
its parent whether by contract or otherwise), cumulative net income earned
during such period as determined in accordance with GAAP, but (ii) excluding any
non-cash charges or gains which are unusual, non-recurring or extraordinary and
(ii) including, to the extent not otherwise included in the determination of Net
Income, all cash dividends and cash distributions actually received by the
Company or any Subsidiary.
 
“Net Proceeds Amount” means, with respect to any Transfer of any property by any
Person, an amount equal to the difference of
(a) the aggregate amount of the consideration (valued at the Fair Market Value
of such consideration at the time of the consummation of such Transfer)
allocated to such Person in respect of such Transfer, net of any applicable
taxes incurred in connection with such Transfer, minus
(b) all ordinary and reasonable out-of-pocket costs and expenses actually
incurred by such Person in connection with such Transfer.
 
“Notes” is defined in Section 1.
 
“Obligors” means the Company and the Subsidiary Guarantors.
 
“Officer’s Certificate” means a certificate of a Senior Financial Officer or of
any other officer of the Company whose responsibilities extend to the subject
matter of such certificate.
 
“Other Agreements” is defined in Section 2.1.
 
“Other Purchasers” is defined in Section 2.1.
 
“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA or any successor thereto.
 
“Person” means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, or a government or
agency or political subdivision thereof.
 
“Plan” means an “employee benefit plan” (as defined in section 3(3) of ERISA)
that is or, within the preceding five years, has been established or maintained,
or to which contributions are or, within the preceding five years, have been
made or required to be made, by the Company or any ERISA Affiliate or with
respect to which the Company or any ERISA Affiliate may have any liability.
 
“premium” in connection with a payment in respect of the Series A Notes, shall
refer to an amount, in addition to the principal amount of Series A Notes being
paid or prepaid and in addition to accrued and unpaid interest thereon, equal to
1% of the principal then being paid or prepaid in the case of any such payment
or prepayment on or before May 22, 2004.
 
“Priority Debt” means the sum, without duplication, of (i) Debt of the Company
or any Subsidiary secured by Liens not otherwise permitted by clauses (a)
through (h) of Section 10.5 and, but without duplication, (ii) all Debt of
Subsidiaries (other than to the Company or another Subsidiary) excluding Debt of
Subsidiary Guarantors whether as direct obligors or guarantors under the Bank
Agreement.
 
“property” or “properties” means, unless otherwise specifically limited, real or
personal property of any kind, tangible or intangible, choate or inchoate.
 
“Property Reinvestment Application” means, with respect to any Transfer of
property constituting an Asset Disposition, the application of an amount equal
to the Net Proceeds Amount with respect to such Transfer to the acquisition by
the Company or any of its Subsidiaries of operating assets for the Company or
any Subsidiary to be used in the principal business of such Person.
 
“Proposed Prepayment Date” is defined in Section 8.3.
 
“Purchase” shall mean and include any transaction or series of related
transactions after the date of Closing, by which the Company or any of its
Subsidiaries (a) acquires any ongoing business or all or substantially all of
the assets of any firm, corporation or division or line of business thereof,
whether through purchase of assets, merger or otherwise, or (b) directly or
indirectly acquires (in one transaction or as the most recent transaction in a
series of transactions) at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for the election of
directors (other than securities having such power only by reason of the
happening of a contingency) or a majority (by percentage or voting power) of the
outstanding partnership interests of a partnership.
 
“QPAM Exemption” means Prohibited Transaction Class Exemption 84-14 issued by
the United States Department of Labor.
 
“Ralston Obligations” means the indemnification obligations of the Company
existing on the date of Closing in favor of General Mills Inc. with respect to
its indemnification of Ralston Purina Company, as more fully described in
Note 14 of the Company’s Annual Report on Form 10-K for the year ended
September 30, 2002 under “Other Contingencies”.
 
“Required Holders” means, at any time, the holders of at least 51% in principal
amount of the Notes at the time outstanding (exclusive of Notes then owned by
the Company or any of its Affiliates).
 
“Responsible Officer” means any Senior Financial Officer and any other officer
of the Company with responsibility for the administration of the relevant
portion of this agreement.
 
“Securities Act” means the Securities Act of 1933, as amended from time to time.
 
“Security” has the same meaning as Section 2(1) of the Securities Act.
 
“Senior Debt” shall mean and include (i) any Debt of the Company (other than
Debt owing to any Subsidiary or Affiliate) which is not expressed to be junior
or subordinate to any other Debt of the Company, and (ii) any Debt of a
Subsidiary (other than Debt owing to the Company, any other Subsidiary or any
Affiliate).
 
“Senior Financial Officer” means the chief financial officer, principal
accounting officer, treasurer or controller of the Company.
 
“Series A Notes” is defined in Section 1.
 
“Subsidiary” means, as to any Person, any corporation, association or other
business entity in which such Person or one or more of its Subsidiaries or such
Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
“Subsidiary” is a reference to a Subsidiary of the Company.
 
“Subsidiary Guarantee” shall mean the Subsidiary Guarantee dated as of May 22,
2003 substantially in the form of Exhibit 4.11 hereto together with any and all
amendments, modifications, supplements and accessions thereto or in respect
thereof.
 
“Subsidiary Guarantor” shall mean and include each Subsidiary which is obligated
whether as guarantor or direct obligor, in respect of any obligations under the
Bank Agreement.
 
“Subsidiary Stock” means, with respect to any Person, the stock (or any options
or warrants to purchase stock or similar equity interests or other Securities
exchangeable for or convertible into stock or similar equity interests) of any
Subsidiary of such Person.
 
“Supplement” is defined in Section 2.2.
 
“Total Debt” shall mean, as of the date of any determination thereof, the
aggregate unpaid principal amount of all Debt of the Company and its
Subsidiaries on a consolidated basis.
 
“Transfer” means, with respect to any Person, any transaction in which such
Person sells, conveys, transfers (including by merger or consolidation) or
leases (as lessor) any of its property, including, without limitation,
Subsidiary Stock but excluding dividends to the extent paid in cash. For
purposes of determining the application of the Net Proceeds Amount in respect of
any Transfer, the Company may designate any Transfer as one or more separate
Transfers each yielding a separate Net Proceeds Amount. In any such case,
(a) the Disposition Value of any property subject to each such separate Transfer
and (b) the amount of Consolidated Total Assets attributable to any property
subject to each such separate Transfer shall be determined by ratably allocating
the aggregate Disposition Value of, and the aggregate Consolidated Total Assets
attributable to, all property subject to all such separate Transfers to each
such separate Transfer on a proportionate basis.
 
“Vail Adjustment” shall mean, as of the date of any determination, the value
(but not less than zero) of the equity investment of the Company and its
Subsidiaries in Vail Resorts, Inc.
 
“Wholly-Owned Subsidiary” means, at any time, any Subsidiary one hundred percent
(100%) of all of the equity interests (except directors’ qualifying shares) and
voting interests of which are owned by any one or more of the Company and the
Company’s other Wholly-Owned Subsidiaries at such time.