Exhibit 10.1

 

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April 17 , 2008

Second Amended and Restated Revolving Credit and Letter of Credit Facility
Commitment Letter

Interstate Bakeries Corporation
12 East Armour Boulevard
Kansas City, Missouri  64112

Attention:     Mr. J. Randall Vance
                   Senior Vice President, Chief Financial Officer and Treasurer

Ladies and Gentlemen:

We refer to the proposed Second Amended and Restated Revolving Credit Agreement
(the “Amended Credit Agreement”) by and among Interstate Bakeries Corporation, a
Delaware corporation (“Parent Borrower”), a debtor and debtor-in-possession in a
case pending under Chapter 11 of the Bankruptcy Code, each of the direct and
indirect subsidiaries of the Parent Borrower party to the Amended and Restated
Revolving Credit Agreement (each individually a “Subsidiary Borrower” and
collectively the “Subsidiary Borrowers”; and together with the Parent Borrower,
the “Borrowers”), each of which is a debtor and debtor-in-possession in a case
pending under Chapter 11 of the Bankruptcy Code, JPMorgan Chase Bank, N.A., a
national banking association (“JPMCB”), as administrative agent and as
collateral agent for the Lenders, and each of the other commercial banks,
finance companies, insurance companies or other financial institutions or funds
from time to time party thereto.  The proposed Amended Credit Agreement will
amend and restate that certain Amended and Restated Credit Agreement dated as of
February 16, 2007 among the Borrowers, JPMCB, as administrative agent and as
collateral agent for the lenders, and each of the lenders party thereto, as set
forth therein.

The Borrowers have requested that J.P. Morgan Securities Inc. ("JPMorgan"),
agree to structure an amended and restated senior revolving credit facility in
an aggregate amount of up to $250,000,000 (the "Facility"), subject to reduction
as provided in the Term Sheet, and that JPMCB commit to provide a portion of the
Facility and to serve as administrative agent for the Facility.

Each of the undersigned lenders (the “Lenders”) is pleased to advise you of its
commitment to provide that portion of the Facility set forth opposite its name
on Schedule B to the Term Sheet (as defined below) upon the terms and subject to
the conditions set forth or referred to in this commitment letter (the
"Commitment Letter") and in the Summary of Terms and Conditions attached hereto
as Exhibit A (the "Term Sheet").  It is a condition to each Lender’s commitment
hereunder that the portion of the Facility not being provided by such Lender
shall be provided by the other Lenders referred to below.
 
 
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As consideration for the Lenders’ commitments hereunder and JPMorgan's agreement
to perform the services described herein, you agree, jointly and severally, to
pay the nonrefundable fees set forth in the Term Sheet and in the Fee Letter
dated April 17, 2008 (the "Fee Letter").

The Lenders’ commitments hereunder and JPMorgan's agreement to perform the
services described herein are subject to (a) the negotiation, execution and
delivery on or before May 16, 2008 of definitive documentation with respect to
the Facility satisfactory to JPMCB and its counsel and (b) the other conditions
set forth or referred to in the Term Sheet.  The terms and conditions of the
Lenders’ commitments hereunder and of the Facility are not limited to those set
forth herein and in the Term Sheet.  Those matters that are not covered by the
provisions hereof and of the Term Sheet are subject to the approval and
agreement of JPMCB, JPMorgan, the other Lenders and the Borrowers.

Borrowers agree, jointly and severally, (a) to indemnify and hold harmless the
Lenders, JPMorgan and their respective affiliates and their respective officers,
directors, employees, advisors, and agents (each, an "indemnified person") from
and against any and all losses, claims, damages and liabilities to which any
such indemnified person may become subject arising out of or in connection with
this Commitment Letter, the Facility, the use of the proceeds thereof or any
related transaction or any claim, litigation, investigation or proceeding
relating to any of the foregoing, regardless of whether any indemnified person
is a party thereto, and to reimburse each indemnified person upon demand for any
legal or other expenses incurred in connection with investigating or defending
any of the foregoing, provided that the foregoing indemnity will not, as to any
indemnified person, apply to losses, claims, damages, liabilities or related
expenses to the extent they are found by a final, non-appealable judgment of a
court to arise from the willful misconduct or gross negligence of such
indemnified person, and (b) to reimburse JPMCB, JPMorgan and their affiliates on
demand for all out-of-pocket expenses (including due diligence expenses,
syndication expenses, travel expenses, and reasonable fees, charges and
disbursements of counsel) incurred in connection with the Facility and any
related documentation (including this Commitment Letter, the Term Sheet, the Fee
Letter and the definitive financing documentation) or the administration,
amendment, modification or waiver thereof.  No indemnified person shall be
liable for any indirect or consequential damages in connection with its
activities related to the Facility.  No indemnified person shall be liable for
any damages arising from the use by others of information provided by or on
behalf of the Borrowers or other materials obtained through electronic,
telecommunications or other information transmission systems or for any special,
indirect, consequential or punitive damages in connection with the Facilities,
provided that the foregoing indemnity will not, as to any indemnified person,
apply to losses, claims, damages, liabilities or related expenses to the extent
they are found by a final, non-appealable judgment of a court to arise from the
willful misconduct or gross negligence of such indemnified person.

This Commitment Letter shall not be assignable by you without the prior written
consent of each Lender and JPMorgan (and any purported assignment without such
consent shall be null and void), is intended to be solely for the benefit of the
parties hereto and is not intended to confer any benefits upon, or create any
rights in favor of, any person other than the parties hereto.  This Commitment
Letter may not be amended or waived except by an instrument in writing signed by
Borrowers, each Lender and JPMorgan.  This Commitment Letter may be executed in
any number of counterparts, each of which shall be an original, and all of
which,
 
 
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when taken together, shall constitute one agreement.  Delivery of an executed
signature page of this Commitment Letter by facsimile transmission shall be
effective as delivery of  manually executed counterpart hereof.  This Commitment
Letter and the Fee Letter are the only agreements that have been entered into
among us with respect to the Facility and set forth the entire understanding of
the parties with respect thereto.  This Commitment Letter shall be governed by,
and construed in accordance with, the laws of the State of New York.

This Commitment Letter is delivered to you on the understanding that neither
this Commitment Letter, the Term Sheet or the Fee Letter nor any of their terms
or substance shall be disclosed, directly or indirectly, to any other person
except (a) to your officers, agents and advisors who are directly involved in
the consideration of this matter, (b) as may be compelled in a judicial or
administrative proceeding or as otherwise required by law (in which case you
agree to inform us promptly thereof) or (c) to the Bankruptcy Court (as defined
in the Term Sheet) in connection with proceedings relating to the entry of the
Amendment Order (as defined in the Term Sheet).

You acknowledge that JPMorgan, JPMCB and the other Lenders may be providing debt
financing, equity capital or other services (including financial advisory
services) to other companies in respect of which you may have conflicting
interests regarding the transactions described herein and otherwise.  Each
Lender and JPMorgan hereby agrees that it will not use confidential information
obtained from you by virtue of the transactions contemplated by this letter or
their other relationships with you in connection with the performance by
JPMorgan or such Lender of services for other companies, and neither JPMorgan
nor any Lender will furnish any such information to other companies.  You also
acknowledge that JPMorgan and the Lenders have no obligation to use in
connection with the transactions contemplated by this letter, or to furnish to
you, confidential information obtained from other companies.  Neither JPMorgan
nor any Lender will be liable for a breach of any of the foregoing by another
Lender.

The reimbursement, indemnification and confidentiality provisions contained
herein and in the Fee Letter shall remain in full force and effect regardless of
whether definitive financing documentation shall be executed and delivered and
notwithstanding the termination of this Commitment Letter or any of the Lenders’
commitments hereunder.

If the foregoing correctly sets forth our agreement, please indicate your
acceptance of the terms hereof and of the Term Sheet by returning to us executed
counterparts hereof not later than 5:00 p.m., New York City time, on April 24,
2008.  The commitments of each Lender and JPMorgan's agreements herein will
expire at such time in the event JPMCB has not received such executed
counterparts in accordance with the immediately preceding sentence.  Each
Lender, by its execution of this Commitment Letter, acknowledges that it has
decided to make its commitment based on its own analysis of the transactions
contemplated by the Term Sheet and of the creditworthiness of the Borrowers and
agrees that the JPMorgan and JPMCB shall bear no responsibility therefor.

 
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The Lenders and JPMorgan are pleased to have been given the opportunity to
assist you in connection with this important financing.  The obligations and
commitments of the Lenders and JPMorgan hereunder are several and not joint and
several.

 
Very truly yours,
     
JPMORGAN CHASE BANK
         
By:
/s/ Susan Atkins
 
   
Name:  Susan Atkins
   
Title:     Managing Director
         
J.P. MORGAN SECURITIES INC.
         
By:
/s/ Norma Corio
 
   
Name:   Norma Corio
   
Title:     Managing Director

 
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Lender’s Name:
 
J.P.Morgan Chase Bank, N.A.
 
By:
/s/ Susan E. Atkins
 
Name:
Susan Atkins
 
Title:
Managing Director
   
Lender’s Name:
 
The Foothill Group, Inc.
 
By:
/s/ Dennis R. Ascher
 
Name:
Dennis R. Ascher
 
Title:
Senior Vice President
   
Lender’s Name:
 
SPCP Group, LLC
 
By:
/s/ Fred Fogel
 
Name:
Fred Fogel
 
Title:
Authorized Signatory
   
Lender’s Name:
 
Q Funding III, L.P.
 
By: Prufrock Onshore, L.P., its General Partner
By: J Alfred Onshore, LLC, its General Partner
 
By:
/s/ Brandon Teague
 
Name:
Brandon Teague
 
Title:
Assistant Secretary
   
Lender’s Name:
 
Q4 Funding, L.P.
 
By: Star Spangled Sprockets, L.P., its General Partner
By: Excalibur Domestics, LLC, its General Partner
 
By:
/s/ Brandon Teague
 
Name:
Brandon Teague
 
Title:
Assistant Secretary
   
Lender’s Name:
 
Monarch Master Funding Ltd.
 
By: Monarch Alternative Capital LP, its Advisor
 
By:
/s/ Andrew Herenstein
 
Name:
Andrew Herenstein
 
Title:
Managing Principal
 

 

 
 

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Accepted and agreed to as of  the date first above written:

INTERSTATE BAKERIES CORPORATION
   
By:
/s/ J. Randall Vance
 
Name:
J. Randall Vance
 
Title:
Senior Vice President, Chief Financial Officer and Treasurer
 
ARMOUR AND MAIN REDEVELOPMENT CORPORATION
   
By:
/s/ J. Randall Vance
 
Name:
J. Randall Vance
 
Title:
Treasure
   
BAKER’S INN QUALITY BAKED GOODS, LLC
   
By:
/s/ J. Randall Vance
 
Name:
J. Randall Vance
 
Title:
Treasurer
   
IBC SALES CORPORATION
   
By:
/s/ J. Randall Vance
 
Name:
J. Randall Vance
 
Title:
Senior Vice President, Chief Financial Officer and Treasurer
 
IBC SERVICES, LLC
   
By:
/s/ J. Randall Vance
 
Name:
J. Randall Vance
 
Title:
Treasurer
   
IBC TRUCKING, LLC
   
By:
/s/ J. Randall Vance
 
Name:
J. Randall Vance
 
Title:
Treasurer
   
INTERSTATE BRANDS CORPORATION
   
By:
/s/ J. Randall Vance
 
Name:
J. Randall Vance
 
Title:
Senior Vice President, Chief Financial Officer and Treasurer
 
NEW ENGLAND BAKERY DISTRIBUTORS, L.L.C.
   
By:
/s/ J. Randall Vance
 
Name:
J. Randall Vance
 
Title:
Treasurer
 

 
 

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EXHIBIT A

Term Sheet

 
April 17, 2008

CONFIDENTIAL

Summary of Terms and Conditions for

Second Amended and Restated Revolving Credit and Letter of Credit Facility
in the Amount of up to $250 Million
 

Borrowers:
Interstate Bakeries Corporation, a Delaware corporation (“Parent”), which is a
debtor-in-possession in a case (the “Parent’s Case”) filed on September 22, 2004
(the “Petition Date”) under Chapter 11 of the United States Bankruptcy Code (the
“Bankruptcy Code”) (the “Parent Borrower”) and each of its subsidiaries listed
on Schedule A to this summary of terms and conditions (the “Term Sheet”) (each a
“Subsidiary Borrower” and, collectively, the “Subsidiary Borrowers”; and
together with the Parent Borrower, the “Borrowers”), each of which is a
debtor-in-possession in a case under the Bankruptcy Code in the United States
Bankruptcy Court for the Western District of Missouri (the “Bankruptcy Court”)
(together with the Parent’s Case, the “Cases”).  The Borrowers are party to an
Amended and Restated Revolving Credit Agreement dated as of February 16, 2007
with JPMCB as administrative agent and the lenders party thereto (as amended
from time to time, the “Existing Credit Agreement”).
   
Administrative
 
Agent and Lenders:
JPMorgan Chase Bank, N.A. (“Administrative Agent” or “JPMCB”) will serve as
Administrative Agent under the facility contemplated hereby (the “Facility”) for
a syndicate of financial institutions (including JPMCB, the “Lenders”) to be
arranged by J.P. Morgan Securities Inc. (“JPMorgan”) and identified on Schedule
B to this Term Sheet.  The Commitments of the Lenders shall be several and not
joint.
   
Collateral Agent:
JPMCB will serve as Collateral Agent under the Facility for the Lenders.
   
Commitment
 
and Avail-
 
ability:
Subject to reduction prior to the Closing Date under the circumstances described
in this paragraph, a total revolving credit commitment (the “Commitment”; the
loans made thereunder, the “Loans”) of up to $250 million, with a sublimit of
$180 million (increased from $150 million under the Existing Credit Agreement)
for standby letters of credit to be

 
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issued for purposes that are satisfactory to the Administrative Agent
(collectively, the “Letters of Credit”).  The Commitment will be comprised of
(i) a tranche in the amount of up to $90 million (“Tranche A”), and (ii) a
tranche in the amount of up to $160 million (“Tranche B”) subdivided into an
amount of up to $40 million (“Tranche B1”) and an amount of up to $120 million
(“Tranche B2”).  The Commitment will be reduced by the amount of any permanent
reduction in the commitment under the Existing Credit Agreement occurring on
April 17, 2008 or at any time thereafter through and including the Closing Date,
such reduction to be applied to Tranche A and when Tranche A has been reduced to
zero to the remaining Commitment.   All direct borrowings and letters of credit
issued under the Amended Credit Agreement (as defined below) will be allocated
pro rata among the Lenders within the Commitment. All Letters of Credit issued
and outstanding under the Existing Credit Agreement as of the initial extension
of credit under the Amended Credit Agreement and all borrowings outstanding
thereunder on such date shall be deemed to be issued and outstanding under the
Amended Credit Agreement and allocated pro rata among the Lenders within the
Commitment.
   
Documentation:
The Facility will be made available pursuant to an amended and restated credit
agreement (the Existing Credit Agreement as so amended and restated, the
“Amended Credit Agreement”) and related documentation in form and substance
satisfactory to all parties thereto including, without limitation, the
Administrative Agent (together with the Amended Credit Agreement, the “Amended
Post-Petition Credit Facility Documentation”).
   
Term:
Borrowings shall be repaid in full in cash, and the Commitment shall terminate,
at the earliest of (i) September 30, 2008 (the “Maturity Date”), (ii) the
substantial consummation (as defined in Section 1101 of the Bankruptcy Code and
which for purposes hereof shall be no later than the effective date) of a plan
of reorganization (a “Plan”) that is confirmed pursuant to an order entered by
the Bankruptcy Court or any other court having jurisdiction over the Cases (the
“Consummation Date”), (iii) the filing of a Plan that does not provide for
payment of all of the Borrowers’ obligations under the Amended Credit Agreement
in full in cash on the Consummation Date, and (iv) the acceleration of the Loans
and the termination of the Commitment in accordance with the Amended Credit
Agreement hereinafter referred to (together with the Maturity Date and the
Consummation Date, the “Termination Date”).
   
Letters of
 
Credit:
Letters of Credit shall be issued for the account of the Borrowers by JPMCB as
Fronting Bank or by one or more other fronting banks (collectively, the
“Fronting Bank”), each of which shall be reasonably satisfactory to the
Borrowers and the Administrative Agent.  Letters of Credit shall expire no later
than three hundred sixty-five (365) days after

 
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the Maturity Date.  Drafts drawn under Letters of Credit shall be reimbursed not
later than the first business day following the date of draw.  If the
Termination Date occurs prior to the expiration of any Letter of Credit, each
such Letter of Credit shall be replaced and returned to the Fronting Bank
undrawn and marked “canceled” on or prior to the Termination Date, or to the
extent that the Borrowers are unable to replace any of the Letters of Credit,
such Letters of Credit shall be (a) secured by a back-to-back letter of credit
that is in an amount equal to the greater of (i) an amount, as determined by
JPMCB, equal to the face amount of such Letters of Credit plus the sum of all
projected contractual obligations to JPMCB and the Lenders of the Borrowers
thereunder through the expiration date(s) of such Letters of Credit and (ii)
105% of the then undrawn stated amount of such Letters of Credit, in a form that
is satisfactory to the Administrative Agent and the Fronting Bank and issued by
a bank that is satisfactory to the Administrative Agent and the Fronting Bank
and/or (b) cash collateralized in an amount equal to the greater of (i) an
amount, as determined by JPMCB, equal to the face amount of such Letters of
Credit plus the sum of all projected contractual obligations to JPMCB and the
Lenders of the Borrowers thereunder through the expiration date(s) of such
Letters of Credit and (ii) 105% of the face amount of such Letters of Credit
(“Cash Collateralization”) by the deposit of cash in such amount into an account
established by the Borrowers under the sole and exclusive control of the
Administrative Agent (“Letter of Credit Account”), such cash to be promptly
remitted to the Borrowers upon the expiration, cancellation or other termination
or satisfaction of the Borrowers’ reimbursement obligations.  Funds currently on
deposit in the Letter of Credit Account pursuant to the terms of the Existing
Credit Agreement shall remain in such Letter of Credit Account under and
pursuant to the Amended Credit Agreement.  Funds deposited in the Letter of
Credit Account on April 17, 2008 or at any time thereafter through and including
the Closing Date, shall be applied to Cash Collateralize Letters of Credit
outstanding under Tranche A and when such Letters of Credit have been fully Cash
Collateralized shall be applied to Letters of Credit outstanding under the
remaining Commitment.
   
Closing Date:
Amended Credit Agreement to be executed and delivered on or prior to May 16,
2008, with the Closing Date to occur as promptly as is practicable after the
entry of the Amendment Order hereinafter referred to, but no later than ten (10)
days after such entry.
   
Priority
 
and Liens:
All direct borrowings and reimbursement obligations under Letters of Credit and
in respect of overdrafts hereinafter referred to shall at all times:

 
         (i) pursuant to Section 364(c)(1) of the Bankruptcy Code, be entitled
to superpriority claim status in the Cases;

 
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          (ii) pursuant to Section 364(c)(2) of the Bankruptcy Code, be secured
by a perfected first priority lien on all unencumbered property of the Borrowers
and on all cash maintained in the Letter of Credit Account and any direct
investments of the funds contained therein, provided that following the
Termination Date, amounts in the Letter of Credit Account shall not be subject
to the Carve-Out hereinafter referred to;
     
          (iii) pursuant to Section 364(c)(3) of the Bankruptcy Code, be secured
by a perfected junior lien on all property of the Borrowers that is subject to
valid and perfected liens in existence on the Petition Date or to valid liens in
existence on the Petition Date that are perfected subsequent to such
commencement as permitted by Section 546(b) of the Bankruptcy Code; and
     
          (iv)  pursuant to Section 364(d)(1) of the Bankruptcy Code and other
than as expressly set forth in the Final Order, as hereinafter defined, be
secured by a perfected first priority, senior priming lien on all of the
property of the Borrowers (including, without limitation, inventory,
receivables, rights under license agreements, and property, plant and equipment)
that is subject to the existing liens which secure (x) the obligations of the
Parent Borrower and certain of the Subsidiary Borrowers under or in connection
with that certain Amended Credit Agreement dated as of April 25, 2002 (as
amended, supplemented or otherwise modified prior to the Petition Date, the
“Pre-Petition Credit Agreement”), among the Parent Borrower and certain of the
Subsidiary Borrowers, the lenders from time to time party thereto, JPMCB, as
administrative agent, and others, and (y) other obligations or indebtedness of
the Borrowers pursuant to other agreements in an aggregate amount in excess of
$2.5 million, all of which existing liens under the Pre-Petition Credit
Agreement and such other agreements and all liens junior thereto (collectively,
the “Primed Liens”; the parties who hold Primed Liens, collectively, the “Primed
Parties”) shall be primed by and made subject and subordinate to the perfected
first priority senior priming liens to be granted to the Administrative Agent,
which senior priming liens in favor of the Administrative Agent shall also prime
any liens granted after the commencement of the Cases to provide adequate
protection liens in respect of any of the Primed Liens but shall not prime
liens, if any, to the extent such liens secure obligations (other than
obligations under the Pre-Petition Credit Agreement) in an aggregate amount less
than or equal to $2.5 million,

 
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subject in each case only to (x) in the event of the occurrence and during the
continuance of an Event of Default (as defined herein), or an event that would
constitute an Event of Default with the giving of notice or lapse of time or
both (a “Default”), the payment of allowed and unpaid professional fees and
disbursements incurred by the Borrowers and any statutory committees appointed
in the Cases in an aggregate amount not in excess of $3 million (plus the amount
set forth in the most recent Borrowing Base Certificate delivered by the
Borrowers to the Administrative Agent of then unpaid professional fees and
expenses incurred prior to the occurrence of a Default or Event of Default to
the extent that such unpaid fees and expenses are subsequently allowed by the
Bankruptcy Court), and (y) the payment of fees pursuant to 28 U.S.C. § 1930 and
to the Clerk of the Bankruptcy Court ((x) and (y), together, the “Carve-Out”) ,
provided that no portion of the Carve-Out shall be utilized for the payment of
professional fees and disbursements incurred in connection with any challenge to
the amount, extent, priority, validity, perfection or enforcement of the
indebtedness of the Borrowers owed with respect to the parties primed by the
priming liens or to the collateral securing such indebtedness or any other
action against such parties.  Amounts in the Letter of Credit Account shall not
be subject to the Carve-Out.  Notwithstanding the foregoing, so long as no
Default or Event of Default shall have occurred and be continuing, the Borrowers
shall be permitted to pay compensation and reimbursement of expenses allowed and
payable under 11 U.S.C. §§ 328, 330 and 331, as the same may be due and payable,
and the same shall not reduce the Carve-Out.
     
Subject to the priorities set forth above and to the Carve-Out, as to all real
property the title to which is held by a Borrower, or the possession of which is
held by a Borrower pursuant to leasehold interest, the Parent Borrower and each
of the Subsidiary Borrowers shall assign and grant a security interest in,
hypothecate, mortgage, pledge and set over unto JPMCB on behalf of the Lenders
all of the right, title and interest of the Borrowers, in all of such owned real
property and in all such leasehold interests, together in each case with all of
the right, title and interest of the Borrowers in and to all buildings,
improvements, and fixtures related thereto, any lease or sublease thereof, all
general intangibles relating thereto and all proceeds thereof.  The Parent
Borrower and each of the Subsidiary Borrowers acknowledge that, pursuant to an
order (the “Amendment Order”) approving the amendment and restatement of the
Existing Credit Agreement.  The Amendment Order (i) shall approve or otherwise
reaffirm the payment by the Borrowers of all fees contemplated thereby and (ii)
shall be entered with the consent or non-objection of a preponderance (as
determined by the Administrative Agent in its sole discretion) of the secured
creditors of any of the Borrowers under the Pre-Petition Credit Agreement.  The
liens in favor of JPMCB on behalf of the Lenders in all of such real property
and leasehold instruments of the

 
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Borrowers shall be perfected without the recordation of any instruments of
mortgage or assignment.  The Parent Borrower and each of the Subsidiary
Borrowers further agree that, upon the request of JPMCB, in the exercise of its
business judgment, the Parent Borrower and each of the Subsidiary Borrowers
shall enter into separate fee mortgages in recordable form with respect to such
properties on terms satisfactory to JPMCB.
     
All intercompany/affiliate liens, if any, will be contractually subordinated to
the Facility on terms satisfactory to the Administrative Agent.
     
To the extent any Borrower makes aggregate payments to the Lenders in excess of
the aggregate amount of all loans and advances received by such Borrower from
the Lenders after the commencement of the Cases, then such Borrower, after the
payment in full of all obligations of the Borrowers in respect of the Commitment
and the termination of the Commitment, shall be entitled to a claim under
Section 364(c)(1) of the Bankruptcy Code against each other Borrower, in such
amount as may be determined by the Bankruptcy Court taking into account the
relative benefits received by each such person, and such claims shall be deemed
to be subordinate and junior in all respects to the superpriority claims of the
Lenders and the superpriority claims granted as adequate protection to the
Primed Parties.
Use of
 
Cash
 
Collateral:
The Commitment shall not be available for use by the Borrowers unless the
Bankruptcy Court shall have entered the Amendment Order, the terms of which
order must be reasonably satisfactory to the Administrative Agent and the
Lenders in their sole discretion.  The Commitment shall not be available for
direct borrowings unless the Borrowers shall at that time have the use of cash
collateral for the purposes that are described under “Use of Proceeds” below.
   
Use of Proceeds:
The Commitment shall be available for (i) working capital, letters of credit and
capital expenditures; (ii) other general corporate purposes of the Borrowers;
(iii) payment of any related transaction costs, fees and expenses; and (iv) the
costs of administration of the Cases, in a manner substantially consistent with
the Budget and the terms and conditions described in this Term Sheet.  The
Letters of Credit shall be issued in support of obligations of the Borrowers
that are acceptable to the Administrative Agent.
   
Depository
 
Relationship:
JPMCB shall remain the principal concentration bank of the Borrowers.

 
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Approval
 
Fee:
To the Administrative Agent for the account of each Lender, the Borrowers will
pay (a) for each Lender a fee of fifty (50) basis points on the amount of such
Lender’s Tranche A Commitments, (b) for each Lender a fee of one hundred (100)
basis points on the amount of such Lender’s Tranche B1 Commitments and (c) for
each Lender a fee of five hundred thirty-five (535) basis points on the amount
of such Lender’s Tranche B2 Commitments, such approval fee earned and payable on
the Closing Date.
   
Commitment
 
Fee:
0.50% per annum on the unused portion of the Commitment.  In each case, the
issuance of Letters of Credit shall be treated as usage of the Commitment.  Such
fees shall be payable monthly in arrears during the term of the Facility.
   
Nature
 
of Fees:
Non-refundable under all circumstances.
   
Letter of
 
Credit Fees:
Tranche A – 3.00% per annum on the undrawn face amount of each Letter of Credit;
Tranche B -- 4.50% per annum on the undrawn face amount of each Letter of
Credit, plus, in each case, customary fees for fronting, issuance, amendments
and processing.
   
Interest
 
Rate:
Tranche A - JPMCB’s Alternate Base Rate (“ABR”) plus 2.00% or, at the Borrowers’
option, LIBOR plus 3.00% for interest periods of 1, 3 or 6 months; interest
shall be payable monthly in arrears, at the end of any interest period and on
the Termination Date.
     
Tranche B – ABR plus 3.50% or, at the Borrowers’ option, LIBOR plus 4.50% for
interest periods of 1, 3 or 6 months; interest shall be payable monthly in
arrears, at the end of any interest period and on the Termination Date.
   
Default
 
Interest:
Upon the occurrence and during the continuance of any default in the payment of
principal, interest or other amounts due under the Amended Credit Agreement
(including, without limitation, in respect of Letters of Credit), interest shall
be payable on demand at 2% above the then applicable rate.
   
Borrowing
 
Base:
The sum of the aggregate outstanding amount of Loans plus Letters of Credit
issued for the account of the Borrowers shall at no time exceed the Borrowing
Base.  The Borrowing Base shall include inventory and

 
7

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receivables, in each case meeting certain eligibility standards initially
determined by the Administrative Agent, and a component (the “Real Property
Component”) determined with reference to certain of the Borrowers’ eligible real
property.  Borrowing Base standards may be fixed and revised from time to time
so as to reduce the amount of the Borrowing Base by the Administrative Agent in
the Administrative Agent’s exclusive judgment.  Any adjustment to Borrowing Base
standards that would result in an increase in the amount of the Borrowing Base
will require the consent of a Super-Majority of the Lenders.  The Borrowing Base
shall initially include an advance rate of 85% against eligible accounts
receivable and 40% against eligible inventory.  The Real Property Component
shall at no time exceed $150 million.  The Real Property Component of the
Borrowing Base shall be subject to reduction concurrent with the sale of any
assets constituting part of the Real Property Component.  The Carve-Out and
other reserves, including without limitation, an environmental reserve, shall
reduce the Borrowing Base.
   
Minimum
 
Borrowing:
$5 million for LIBOR Loans and $1 million for ABR Loans, with no more than
twelve (12) borrowings of LIBOR loans outstanding at any one time;  the
Administrative Agent must receive (by 12:00 Noon, New York City time) notice (x)
one (1) business day prior to the requested borrowing date for ABR Loans and (y)
three (3) business days prior to the requested borrowing date for LIBOR Loans;
provided that same day borrowings of ABR Loans in an aggregate amount of up to
$3 million will be available if notice is received by the Administrative Agent
no later than 10:00 a.m., New York City time, on such day.
   
Mandatory
 
Prepayments
 
and Cash
 
Collateralization:
Mandatory prepayments shall be required to the extent that the sum of the
Borrowers’ Loans plus outstanding Letters of Credit (including unreimbursed
disbursements) exceeds the lesser of (x) the then available Commitment or, (y)
the Borrowing Base.  Upon the receipt of the net proceeds by any of the
Borrowers or their Subsidiaries from any asset sales (other than sales of
inventory in the ordinary course of business), the Borrowers shall, jointly and
severally, apply such net proceeds as follows:  first, to repay the then
outstanding Loans under Tranche A; second, to deposit an amount in the Letter of
Credit Account up to 105% of the then Letter of Credit outstandings under
Tranche A; third to repay the then outstanding Loans under Tranche B; fourth to
deposit an amount in the Letter of Credit Account up to 105% of the then Letter
of Credit Outstandings under Tranche B; and thereafter, such net proceeds may be
(I) deposited in the Letter of Credit Account or (II) retained by the

 
8

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Borrowers and invested in investments permitted under the Amended Credit
Agreement or used for expenditures in the ordinary course of business (subject
to compliance with the terms and conditions of the Amended Credit
Agreement).  The Commitments under each Tranche shall be reduced by an amount
equal to the sum of (i) the net proceeds of the subject asset sale required to
be applied to repay the then outstanding Loans under such Tranche pursuant to
preceding sentence, plus (ii) the net proceeds of the subject asset sale
retained by the Borrowers pursuant to part (II) of the last clause of the
preceding sentence, such reduction to be applied to Tranche A and when Tranche A
has been reduced to zero to the remaining Commitment.
   
Prepayments of
 
Loans From
 
Available Cash:
If there are outstanding Loans and the fair market value of cash and cash
equivalents of the Borrowers held in securities accounts and deposit accounts
(“Available Cash”) exceeds $60,000,000, then prepayments of Loans shall be
required in the amount of such excess (or, if less, the outstanding balance of
Loans), such prepayments to be applied first to repay the then outstanding Loans
under Tranche A and second to repay the then outstanding Loans under Tranche B.
   
Optional
 
Prepayment:
Amounts may be prepaid in integral multiples of $1 million without penalty
(except for any breakage costs associated with LIBOR Loans) upon (x) at least
one (1) business day’s prior notice for ABR Loans and (y) three (3) business
day’s prior notice for LIBOR Loans.  Unless a Default or Event of Default is
then in existence, such prepayments shall be applied pro rata among the
Commitments.  If a Default or Event of Default exists at the time of any such
payment, such payment shall be applied first to Loans outstanding under Tranche
A and second to Loans outstanding under Tranche B.  The Commitments under each
Tranche shall be reduced on a pro rata basis by an amount equal to the amount of
the prepayment required to be applied to repay the then outstanding Loans under
such Tranche pursuant to the applicable preceding sentence.
Conditions of
 
Initial Extension
 
of Credit:
The obligation to provide the initial extension of credit shall be subject to
the satisfaction of the following conditions (subject to such exceptions as may
be satisfactory to the Administrative Agent):

 
(a)
Supporting Documents.  The Administrative Agent shall have received for each of
the Borrowers:
           
(i)     Bring-down certificates delivered by each Borrower (A) certifying that
there were no changes, or providing the text of

 
9

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changes, to the organizational documents of such Borrowers as delivered pursuant
to Section 4.1(a) of the Existing Credit Agreement and (B) to the effect that
each Borrower is in good standing in its jurisdiction of incorporation,
organization or formation and in each jurisdiction in which it is qualified as a
foreign corporation or other entity to do business;
           
(ii)    signature and incumbency certificates of the officers of such Borrower
executing the Amended Post-Petition Credit Facility Documentation to which it is
a party, dated as of the date of the Amended Credit Agreement (the “Amendment
Effectiveness Date”);
           
(iii)   duly adopted resolutions of the board of directors or similar governing
body of each Borrower approving and authorizing the execution, delivery and
performance of the Amended Post-Petition Credit Facility and the other Amended
Post-Petition Credit Facility Documentation to which it is a party or by which
it or its assets may be bound as of the Amendment Effectiveness Date, certified
as of the Amendment Effectiveness Date by its secretary or assistant secretary
as being in full force and effect without modification or amendment; and
           
(iv)    such other documents as the Administrative Agent may reasonably request.
         
(b)
Amendment Order.  Not later than May 16, 2008, the Administrative Agent shall
have received the Amendment Order in a form reasonably satisfactory to the
Administrative Agent, the Lenders and the Borrowers.  If the Amendment Order is
the subject of a pending appeal in any respect, it shall be a condition to the
extension of credit under the Amended Credit Agreement that neither the making
of such loan nor the issuance of such Letter of Credit nor the performance by
any of the Borrowers of any of their obligations under the Amended Credit
Agreement or under the Amended Post-Petition Credit Facility Documentation or
under any other instrument or agreement referred to herein shall be the subject
of a presently effective stay pending appeal.
         
(c)
Loan Documents.  The Agent shall have received the Amended Credit Agreement,
duly executed and delivered by the Administrative Agent, the Parent Borrower,
each Subsidiary Borrower and each Lender and, upon request of the Administrative
Agent, the Parent Borrower and each Subsidiary Borrower shall have duly executed
and delivered to the Administrative Agent an

 
10

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    Amended Security and Pledge Agreement in a form reasonably satisfactory to
the Administrative Agent and the Lenders.          
(d)
Opinion of Counsel.  The Administrative Agent and the Lenders shall have
received the favorable written opinion of counsel to the Borrowers, acceptable
to the Administrative Agent.
         
(e)
Payment of Fees.  The Borrowers shall have paid to the Administrative Agent the
then unpaid balance of all accrued and unpaid fees due under and pursuant to the
Amended Post-Petition Credit Agreement.
         
(f)
Closing Documents.  The Administrative Agent shall have received all documents
required by the Amended Credit Agreement satisfactory in form and substance to
the Administrative Agent in its exclusive discretion.

Conditions of
 
Each Extension
 
of Credit:
The obligation to provide each extension of credit (including the initial
extension of credit) shall be subject to the satisfaction of the following
conditions:

 
(a)
The Amendment Order and Final Order shall be in full force and effect, and shall
not have been reversed, modified, amended or stayed;
       
(b)
No Default or Event of Default shall exist;
       
(c)
Representations and warranties shall be true and correct in all material
respects at the date of each extension of credit except to the extent such
representations and warranties relate to an earlier date;
       
(d)
Receipt of a notice of borrowing from the Borrowers;
       
(e)
Receipt by the Administrative Agent of a Borrowing Base Certificate in
accordance with the applicable provision of the Amended Credit Agreement dated
no more than seven (7) days prior to the extension of credit, which Borrowing
Base Certificate shall include supporting schedules as required by the
Administrative Agent;
       
(f)
The Borrowers shall have paid the balance of all fees then payable as referenced
herein;

 
11

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(g)
The uses of such extension of credit shall be substantially consistent with the
Budget, as updated from time to time; and
       
(h)
Such other customary conditions as may be mutually agreed upon by the
Administrative Agent and the Borrowers.

 
The request by the Borrowers for, and the acceptance by the Borrowers of, each
extension of credit under the Amended Credit Agreement shall be deemed to be a
representation and warranty by the Borrowers that the conditions specified above
have been satisfied or waived.
   
Representations
 
and Warranties:
Each Borrower shall represent and warrant in a manner satisfactory to the
Administrative Agent as to:

 
(a)
Due incorporation and good standing of each Borrower;
       
(b)
No consent or approval is required other than the Amendment Order and the Final
Order, neither of which (as applicable) shall have been amended, stayed,
vacated, reversed or rescinded;
       
(c)
Due authorization, execution and delivery of Amended Post-Petition Credit
Facility Documentation; no violation of other material agreements entered into
after the commencement of the Cases; no violation of law as a result of
execution, delivery or performance of the Amended Post-Petition Credit Facility
Documentation;
       
(d)
No liens on the assets of the Borrowers except for liens that are satisfactory
to the Administrative Agent and are reflected on a schedule annexed to the
Amended Credit Agreement or are permitted by the Amended Credit Agreement;
       
(e)
Financial statements for the fiscal year ended June 2, 2007 present fairly, in
all material respects, the financial condition and results of operations of the
Borrowers on a consolidated basis as of the date thereof and have been prepared
in a manner consistent with GAAP;
       
(f)
Compliance in all material respects with applicable laws and regulations
including (without limitation) applicable environmental laws and regulations
other than with respect to the American Bakers Association Retirement Plan (the
“ABA Pension Plan”), a defined benefit pension plan established in 1961 to
provide pension benefits to certain employees of several unrelated

 
12

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    companies in the baking industry, including, without limitation, the
Borrowers;        
(g)
No material adverse change in the operations, business, properties, assets,
prospects or condition (financial or otherwise) of the Borrowers and their
Subsidiaries taken as a whole has occurred since June 2, 2007 other than those
which customarily occur as a result of events and circumstances following the
commencement of a proceeding under Chapter 11 of the Bankruptcy Code other than
with respect to the ABA Pension Plan and any matter (the “Disclosed Matters”)
which has been disclosed by any of the Borrowers in any filing on Form 10-K,
10-Q or 8-K made with the Securities and Exchange Commission prior to April 2,
2008; provided, that no matter shall constitute a “Disclosed Matter” to the
extent it shall prove to be, or shall become, materially more adverse to the
Borrowers taken as a whole or to the Lenders than it would have reasonably
appeared to be on the basis of the disclosure contained in any of the documents
referred to above in this definition;
       
(h)
No information that has been furnished in writing by the Borrowers to the
Administrative Agent or the Bankruptcy Court contained any material misstatement
of fact or omitted to state a material fact necessary to make the statements
contained therein not misleading in light of the circumstances in which made;
       
(i)
There is no unstayed litigation which is reasonably likely to have a material
adverse effect on the operations, business, properties, assets, prospects or
financial condition of the Borrowers taken as a whole (subject to certain
disclosures on Schedule C hereto, provided, that no such disclosed matter shall
be excepted from the comparable representation to be set forth in the Amended
Credit Agreement to the extent it shall prove to be, or shall become, materially
more adverse to the Borrowers taken as a whole or to the Lenders than it would
have reasonably appeared to be on the basis of the disclosure contained on
Schedule C);
       
(j)
Use of proceeds as set forth in “Use of Proceeds” above;
       
(k)
Insurance is sufficient and in such amounts as is customarily carried by similar
companies in the Borrowers’ industries; and
       
(l)
Such other customary representations and warranties as may be mutually agreed
upon by the Administrative Agent and the Borrowers.

 
13

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Affirmative
 
Covenants:
The Borrowers shall:

 
(a)
Keep financial statements in accordance with GAAP and maintain true and complete
books and records;
       
(b)
Furnish:
         
(i)      Consolidated monthly cash flow reports within forty-five (45) days
after the end of each fiscal month;
         
(ii)     Monthly consolidated financial statements within forty-five (45) days
after the end of each fiscal month (including the amount of Available Cash at
the end of each such fiscal month);
         
(iii)    Quarterly consolidated financial statements within forty-five (45) days
after the end of each fiscal quarter;
         
(iv)    Annual consolidated financial statements within ninety (90) days after
the end of each fiscal year; and
         
(v)     Such other reports as may be reasonably requested by the Administrative
Agent or any Lender;
       
(c)
Deliver weekly (by Friday of each week with respect to the immediately preceding
week) and monthly (by the 20th day of each month with respect to the immediately
preceding fiscal month) Borrowing Base Certificates satisfactory to the
Administrative Agent;
       
(d)
On the Amendment Effectiveness Date and every two (2) weeks thereafter, furnish
a forecast of sources and uses of cash by the Borrowers on a weekly basis
covering the succeeding thirteen (13) calendar weeks, which shall be in form and
substance satisfactory to the Administrative Agent and to Loughlin Meghji &
Company or such other financial advisor as may be acceptable to the
Administrative Agent (as updated from time to time, the “Cash Flow Forecast”);
       
(e)
Commencing on the date which is two (2) weeks after the Borrowers’ delivery of
the initial Cash Flow Forecast, and every two (2) weeks thereafter, an update of
the Forecast for the then succeeding thirteen (13) calendar weeks, in form and
substance satisfactory to the Administrative Agent and Loughlin Meghji & Company
or such other financial advisor as may be acceptable to the Administrative
Agent;

 
14

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(f)
Furnish within forty-five (45) days from the end of the second fiscal quarter of
each fiscal year of the Borrowers, and within sixty (60) days from the end of
the last fiscal quarter of each fiscal year of the Borrowers, an update of the
Budget satisfactory in form and substance to the Administrative Agent and to
Loughlin Meghji & Company or such other financial advisor as may be acceptable
to the Administrative Agent, and be available to discuss such updated Budget
with the Administrative Agent upon the Administrative Agent’s reasonable
request;
       
(g)
Furnish within forty-five (45) days after the end of each fiscal month, a
summary of the results of the Borrowers’ business operations for the preceding
month as compared to the corresponding period in the projections provided to the
Lenders on April 2, 2008 or any updated projections provided thereafter pursuant
to Section 5.1(i) of the Amended Credit Agreement, including a discussion of
significant variances, which summary shall describe results on the basis of the
Borrowers and their respective Subsidiaries on a consolidated basis;
       
(h)
Deliver to the Administrative Agent and its counsel all pleadings, motions,
applications, judicial information, financial information, and other documents
filed by or on behalf of the Borrowers with the Bankruptcy Court;
       
(i)
Maintain insurance on all its property in a manner which is customary in the
Borrowers’ industries with financially sound and responsible insurance
companies;
       
(j)
Do all things necessary to preserve, renew and keep in full force its corporate
existence;
       
(k)
Pay all post-petition taxes and other post-petition obligations as and when due
except where contested in good faith and by appropriate proceedings (if the
Borrowers shall have set aside on their books adequate reserves therefor);
       
(l)
Notify the Administrative Agent of any Default or Event of Default;
       
(m)
Permit the Collateral Agent and its representatives to visit the premises of the
Borrowers, confer with officers and representatives of the Borrowers and review
all of their books and records, and to conduct collateral reviews and appraisals
and to monitor the

 
15

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collateral held by the Collateral Agent (in each case at the Borrowers’
expense);
       
(n)
Comply with customary ERISA covenants;
       
(o)
Continue to retain a chief executive officer who may be reasonably satisfactory
to the Administrative Agent.
       
(p)
Request proposals for sales of all assets and commence sales process, as
follows:  by no later than April 21, 2008, the Borrowers shall have requested
proposals for the sale of the Borrowers and their assets in their entirety, or
in a series of transactions, and, by no later than June 30, 2008, the Borrowers
shall have delivered to the Administrative Agent a schedule (in form and
substance satisfactory to the Administrative Agent) of asset sales (including
estimated sales dates and estimated proceeds) which the Borrowers reasonably
expect will generate sales proceeds sufficient in the aggregate to reduce total
usage under the Facility (minus any cash then held in the Letter of Credit
Account) to zero prior to the Maturity Date; provided, however, that the
Borrowers shall not be required to (x) request such proposals in the event that
on or before April 21, 2008, the Borrowers have (1) filed a reorganization plan
that provides for the refinancing of the Credit Agreement in full and has the
publicly announced support of the Bakery, Confectionery, Tobacco Workers and
Grain Millers International Union and the International Brotherhood of
Teamsters, and is otherwise in form and substance satisfactory to the
Administrative Agent and (2) obtained firm commitments for funding of all exit
financing necessary for confirmation and consummation of the reorganization plan
or (y) deliver such schedule in the event that on or before June 30, 2008, the
reorganization plan shall have become effective and be consummated, and the
obligations under the Facility shall have been indefeasibly paid in full.
       
(q)
Comply with such other affirmative covenants as may be mutually agreed upon by
the Administrative Agent and the Borrowers.

Negative
 
Covenants:
The Borrowers shall not (and shall not apply to the Bankruptcy Court for
authority to):

 
(a)
Merge or consolidate with any other party;
       
(b)
Create or permit to exist any liens or encumbrances on any assets  except (i)
pre-petition liens and encumbrances as reflected on a schedule annexed to the
Amended Credit Agreement, (ii) liens in

 
16

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favor of the Administrative Agent on behalf of the Lenders, and (iii) such other
liens as may be permitted in the Amended Credit Agreement (the Amended Credit
Agreement will permit (1) liens imposed by law for taxes not yet due or being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves or other appropriate provisions are being maintained in
accordance with GAAP; (2) statutory and other like liens, pledges or deposits in
connection with workers’ compensation and other social security obligations
(other than any liens imposed under ERISA) and certain non-material liens of
landlords, common carriers, warehousemen and mechanics and other liens (other
than environmental liens and liens imposed under ERISA) imposed by law in the
ordinary course of business; (3) deposits to secure the performance of tenders,
bids, and other contracts, other than for the payment of borrowed money, arising
in the ordinary course of business; (4) easements and other similar encumbrances
that are not material; (5) liens securing purchase money indebtedness in an
amount not to exceed $1,000,000 and existing capital lease obligations; (6)
liens on the assets of subsidiaries of the Parent securing indebtedness in
respect of certain exchange traded futures and option contracts permitted by the
Amended Credit Agreement; and (7) liens junior to the senior liens contemplated
hereby that are granted by any of the Orders pursuant to 11 U.S.C. §364(d)(1) as
adequate protection to the Primed Parties, provided that such Orders provide
such junior liens shall not be permitted to take any action to enforce their
rights with respect to such junior liens as long as any amounts are outstanding
under the Amended Credit Agreement or the Lenders have any Commitment
thereunder).
       
(c)
Create or permit to exist any other superpriority claim which is pari passu with
or senior to the claims of the Administrative Agent and the Lenders under the
Amended Credit Agreement, except for the Carve-Out;
       
(d)
Except as may be authorized by orders of the Bankruptcy Court and on terms and
conditions acceptable to the Administrative Agent, sell or otherwise dispose of
any assets (including, without limitation, the capital stock of any subsidiary)
except for (i) sales of Inventory, fixtures and equipment in the ordinary course
of business, and (ii) sales of surplus assets of the Borrowers no longer used in
the Borrowers’ business operations;
       
(e)
Create or permit to exist indebtedness for borrowed money in addition to
indebtedness under the Amended Credit Agreement other than (i) pre-petition debt
(including existing capitalized

 
17

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leases), (ii) post-petition purchase money indebtedness (exclusive of
Capitalized Leases) in an aggregate amount not to exceed $1,000,000, (iii)
indebtedness owed to JPMCB or any of its banking affiliates in respect of any
overdrafts and related liabilities arising from treasury, depository and cash
management services or in connection with any automated clearing house transfers
of funds and (iv) such other indebtedness as may be permitted in the Amended
Credit Agreement;
       
(f)
Make capital expenditures (calculated on a consolidated basis) in any fiscal
quarter, or with respect to the last period referenced, portion of such fiscal
quarter, in an aggregate amount in excess of the amounts set forth below:

 
Fiscal Quarter Ending
Maximum Capital Expenditures
(millions)
 
May 31, 2008
$10.00
 
August 23, 2008
$10.00
 
October 18, 2008
$5.00

 
(g)
As of the end of each fiscal period of the Borrowers, commencing with the fiscal
monthly period ending April 5, 2008, the Borrowers will not permit Consolidated
EBITDA for the preceding thirteen consecutive fiscal periods ending in each case
on the last day of the fiscal period listed below to be less than the respective
amounts specified opposite such fiscal period:

 
Fiscal Period Ending
Consolidated EBITDA
(millions)
 
April 5, 2008
$32
 
May 3, 2008
$23
 
May 31, 2008
$11
 
June 28, 2008
-$5
 
July 26, 2008
-$11
 
August 23, 2008
-$18

   
The term “EBITDA” shall mean, for any period, all as determined in accordance
with GAAP, and subject to such modifications as may be satisfactory to the
Administrative Agent, the consolidated net income (or net loss) of the Borrowers
for such period, plus (a) the sum of (i) depreciation expense, (ii) amortization
expense, (iii) other non-cash charges, (iv) net total Federal, state and local
income tax expense, (v) gross interest expense for such period less gross
interest income for such period, (vi) extraordinary losses, (vii) any
restructuring charge, (viii)  non-cash expenses related to

 
18

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the ABA Pension Plan exceeding $320,000 per fiscal monthly period, and (ix)
“Chapter 11 expenses” (or “administrative costs reflecting Chapter 11 expenses”,
inclusive of professional fees) as shown on the Borrowers’ consolidated
statement of income for such period), less (b) extraordinary gains;
       
(h)
Guarantee the obligations of others except as permitted by the Amended Credit
Agreement;
       
(i)
Make loans or investments other than as may be permitted in the Amended Credit
Agreement (the Amended Credit Agreement will permit: (x) existing intercompany
debt as disclosed in the Amended Credit Agreement; (y) and investments in short
term obligations of, or which are guaranteed by, the United States of America,
repurchase agreements with respect to such securities, short term commercial
paper bearing a credit rating of at least A from Standard & Poors or A2 from
Moody’s Investors Service, certain certificates of deposit, time deposits, and
certain advances among the Borrowers in the ordinary course);
       
(j)
Directly or indirectly enter into or permit to exist any material transaction
with any of its affiliates except for (i) transactions that are entered into in
the ordinary course of Borrowers’ business in good faith and upon commercially
reasonable terms, and that are no less favorable to the Borrowers than would be
obtained in an arm’s-length transaction with a non-affiliate, and (ii)
transactions described on a schedule satisfactory to the Administrative Agent
and to be annexed to the Amended Credit Agreement;
       
(k)
Declare or make any dividend or make any distribution on account of capital
stock (other than dividends and distributions from any subsidiary of the Parent
to the Parent) or conduct transactions with any of its shareholders on anything
other than on an arm’s length basis;
       
(l)
Except as may reasonably be expected to result from dispositions permitted by
subsection (d) above, modify or alter in any material manner the nature and type
of its business or the manner in which such business is conducted, except as
required by the Bankruptcy Code;
       
(m)
Other than as may be permitted in the Amended Credit Agreement, permit, place or
agree to permit or place any restrictions on the payment of dividends or other
distributions among the Borrowers or their subsidiaries or affiliates or the
making of advances or any

 
19

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other cash payments among the Borrowers, their subsidiaries or affiliates;
       
(n)
Assert any right of subrogation against any other Borrower until all Borrowings
are paid in full and the Commitment is terminated;
       
(o)
Incur (or apply to the Bankruptcy Court for authority to incur) cash
restructuring charges for the fiscal period beginning December 17, 2006 and
ending October 18, 2008 in an amount in excess of $23,000,000 (calculated as the
amount expensed or accrued by the Borrowers or any of their Subsidiaries during
such period on account of restructuring charges that will ultimately be settled
via payment in cash or cash equivalents by the Borrowers or any of their
Subsidiaries).  Borrowers shall provide documentation supporting such cash
restructuring charges in form and substance reasonably satisfactory to the
Administrative Agent concurrent with delivery of financial statements evidencing
the incurrence thereof;
       
(p)
File (or apply to the Bankruptcy Court for authority to file) any reorganization
plan that does not provide for the repayment in full in cash on the effective
date thereof of all outstanding obligations under the Facility;
       
(q)
Enter into derivative agreements except to the extent permitted by the Amended
Credit Agreement; and
       
(r)
Fail to comply with such other negative covenants as may be mutually agreed upon
by the Administrative Agent and the Borrowers.

Events of
 
Default:
Upon the occurrence and during the continuance of any of the following Events of
Default beyond the applicable grace period (if any) set forth below, the
Administrative Agent may take all or any of the following actions without
further order of or application to the Bankruptcy Court, provided that with
respect to item (iii) below and the enforcement of liens or other remedies with
respect to collateral referred to in item (v) below, the Administrative Agent
shall provide the Borrowers (with a copy to counsel for any statutory committees
appointed in the Cases and to the United States Trustee for the Western District
of Missouri) with five (5) business days’ prior written notice;

   
(i)
declare the principal of and accrued interest on the outstanding borrowings to
be immediately due and payable;

 
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(ii)
terminate any further commitment to lend to the Borrowers or to issue Letters of
Credit;
           
(iii)
set-off any amounts held as cash collateral or in any accounts maintained with
JPMCB;
           
(iv)
require the Borrowers upon demand to furnish immediate cash collateral for
Letters of Credit then outstanding in an amount equal to 105% of the outstanding
amount of such Letters of Credit (to the extent that the Borrowers fail to
furnish such cash collateral, the Administrative Agent shall be authorized to
debit the accounts of the Borrowers maintained with the Administrative Agent in
such amount five (5) business days after the giving of the notice referred to
above); and/or
           
(v)
take any other action or exercise any other right or remedy (including, without
limitation, with respect to the liens in favor of the Administrative Agent and
the Lenders) permitted under the Amended Credit Agreement, or by applicable law.
         
(a)
Failure by the Borrowers to pay principal, interest or fees when due under the
Amended Credit Agreement;
         
(b)
Breach by the Borrowers of any of the negative covenants described above;
         
(c)
Breach by the Borrowers of any other covenant contained in the Amended Credit
Agreement and such breach shall continue unremedied for more than ten (10) days;
         
(d)
Failure by the Borrowers to deliver a certified Borrowing Base Certificate when
due and such default shall continue unremedied for more than three (3) business
days;
         
(e)
Any representation or warranty made by the Borrowers shall prove to have been
incorrect in any material respect when made;
         
(f)
Any of the Cases shall be dismissed or converted to a Chapter 7 Case; a Chapter
11 Trustee, a responsible officer or an examiner with enlarged powers relating
to the operation of the business of the Borrowers (powers beyond those set forth
in Section 1106(a)(3) and (4) of the Bankruptcy Code) shall be appointed in any
of the Cases and the order appointing such Trustee, responsible officer, or
examiner shall not be reversed or vacated

 
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within thirty-five (35) days after the entry thereof; or any other superpriority
Claim (other than the Carve-Out) which is pari passu with or senior to the
claims of the Administrative Agent and the Lenders shall be granted in any of
the Cases; or the Bankruptcy Court shall enter an order terminating the use of
cash collateral referred to in paragraph (a) of “Conditions of Initial Extension
of Credit” above;
         
(g)
Other than payments authorized by the Bankruptcy Court in respect of the first
day orders and other than Pre-Petition Payments authorized by the Bankruptcy
Court in respect of: (i) accrued payroll and related employee benefit expenses
as of the Filing Date, (ii) reclamation claims in such amounts as determined by
the Borrowers and agreed to by the Administrative Agent; (iii) materialmen’s
liens and certain other pre-petition claims permitted by the Administrative
Agent and authorized by the Bankruptcy Court in an aggregate amount not to
exceed $500,000, (iv) the payment of current interest and letter of credit fees
(and the payment of all interest and fees that are accrued and unpaid as of the
Filing Date) at the applicable non-default rates provided for pursuant to the
Pre-Petition Credit Agreement, all as described in the Borrowers’ Motion for
Interim and Final Orders (I) Authorizing Debtors to (A) Obtain Postpetition
Financing pursuant to 11 U.S.C. §§ 105, 361, 362, 363, 364(C)(1), 364(C)(2),
364(C)(3) and 364(d)(1), and (B) Utilize Cash Collateral pursuant to 11 U.S.C. §
363, (II) Granting Adequate Protection to Prepetition Secured Parties pursuant
to 11 U.S.C. §§ 361, 362 and 363 and (III) Scheduling Final Hearing pursuant to
Fed. R. Bankr. P. 4001(c), and as authorized by the Orders, (v) payments in
respect of prepetition claims of taxing authorities in an aggregate amount not
to exceed $3,000,000 as described in the Borrowers’ Motion for Order under 11
U.S.C. §§ 363, 507 and 541 Confirming Authority to Pay Prepetition Sales and Use
Taxes, (vi) payments in respect of certain prepetition real property tax claims
and other secured claims that are accruing collectible postpetition interest in
an aggregate amount not to exceed $12,000,000 as described in Borrowers’ Motion
for an Order Granting Authority to Compromise and Pay Certain Tax and Other
Claims that are Accruing Collectible Postpetition Interest and/or Penalties, and
as authorized by the Order Granting Authority to Compromise and Pay Certain Tax
and Other Claims that are Accruing Collectible Postpetition Interest and/or
Penalties entered by the Bankruptcy Court on October 4, 2005, (vii) payments in
an amount not to exceed $2,000,000 which are authorized to be made by that
certain Order Pursuant to 11 U.S.C. §§ 362 and 363 and Fed. R. Bankr. P. 9019
(A) Granting Relief From Automatic Stay, (B) Approving the

 
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Debtor’s Settlement Agreement with Mitchell Fishlowitz, on behalf of Himself
Individually, and as Representative of a Class of Individuals Similarly
Situated, and (C) Conditionally Allowing Claims Pursuant to the Settlement
Agreement, and (viii) payments to the Central States Southwest Areas Health and
Welfare Fund and Southeast and Southwest Areas Pension Fund pursuant to any
settlement approved by the Bankruptcy Court, not to exceed $1,500,000 as to any
pre-petition claim by such funds, as may be permitted in the Amended Credit
Agreement, the Borrowers shall make any payment (whether by way of adequate
protection or otherwise) of principal or interest or otherwise on account of any
pre-petition indebtedness or payables;
         
(h)
The Bankruptcy Court shall enter an order granting relief from the automatic
stay to the holder or holders of any security interest to permit foreclosure (or
the granting of a deed in lieu of foreclosure or the like) on any assets of the
Borrowers which have an aggregate value in excess of $250,000;
         
(i)
A Change of Control (to be defined in the Amended Credit Agreement) shall occur;
         
(j)
Any provision of the Amended Credit Agreement shall cease to be valid and
binding on the Borrowers, or the Borrowers shall so assert in any pleading filed
in any court;
         
(k)
An order shall be entered reversing, amending, supplementing, staying for a
period in excess of ten (10) days, vacating or otherwise modifying the Amendment
Order or the Final Order;
         
(l)
Any judgment in excess of $250,000 as to any post-petition obligation shall be
rendered against the Borrowers and the enforcement thereof shall not be stayed
(by court ordered stay or by consent of the party litigants), it being
understood that Federal Rule of Civil Procedure 62(a) provides for a ten day
stay on enforcement of money judgments; or there shall be rendered against the
Borrowers a non-monetary judgment with respect to a post-petition event which
causes or would reasonably be expected to cause a material adverse change or a
material adverse effect on the ability of the Borrowers to perform their
obligations under the Amended Post-Petition Credit Facility Documentation;
         
(m)
Certain ERISA-related and environment-related defaults (other than as a result
of or solely with respect to the ABA Pension Plan, to the extent the
insufficiency of the ABA Pension Plan does not

 
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exceed $80 million, or to the extent a special assessment with respect to the
ABA Pension Plan does not exceed $38 million); or
         
(n)
Such other Events of Default as may be mutually agreed upon by the
Administrative Agents and the Borrowers.

 
Upon the occurrence and during the continuance of an Event of Default, all
payments made with respect to the Facility shall be applied as follows:  first
to fees and expenses payable pursuant to the Amended Post-Petition Credit
Facility Documentation; second to principal and accrued interest with respect to
Loans outstanding under Tranche A; third to deposit an amount in the Letter of
Credit Account up to 105% of the then Letter of Credit Outstandings under
Tranche A; fourth to principal and accrued interest with respect to Loans
outstanding under Tranche B; and fifth to deposit an amount in the Letter of
Credit Account up to 105% of the then Letter of Credit Outstandings under
Tranche B.
   
Yield Pro-
 
tection and
 
Increased
 
Costs; Taxes:
Standard yield protection and indemnification including capital adequacy
requirements will be incorporated that will satisfactorily compensate the
Lenders in the event that, after execution of the Amended Post-Petition Credit
Facility Documentation, any changes in law, requirement, guideline or request of
relevant authorities shall increase costs, reduce payments or earnings, or
increase capital requirements.
   
Costs and
 
Expenses;
 
Indemni-
 
fication:
All out-of-pocket costs and documented expenses (but delivery of documentation
shall not be a condition to the Borrowers’ payment obligation) of the
Administrative Agent, the Lenders and JPMorgan (including, without limitation,
reasonable fees and disbursements of Bryan Cave LLP and Paul, Weiss, Rifkind,
Wharton & Garrison LLP and of internal and third-party appraisers, consultants
and auditors advising the Administrative Agent, the Collateral Agent and JP
Morgan, all fees (including customary fees of employees of the Collateral
Agent), disbursements and out-of-pocket expenses incurred in connection with the
initial and periodic collateral reviews and appraisals (including collateral
monitoring fees of or incurred by the Collateral Agent), syndication,
enforcement of rights and publicity and other miscellaneous disbursements) shall
be payable by the Borrowers promptly after demand whether or not the
transactions contemplated hereby are consummated.  The Borrowers shall indemnify
the Administrative Agent, the Collateral Agent, JPMorgan and the Lenders against
any liability arising in

 
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connection with the transactions contemplated hereby (other than in the case of
the gross negligence or willful misconduct of any indemnified person).
   
Assignments
 
and Participations:
The Lenders shall be permitted to assign all or a portion of their loans and
commitments with the consent, not to be unreasonably withheld, (a) the
Administrative Agent and (b) the Fronting Bank.  In the case of partial
assignments (other than to another Lender or to an affiliate of a Lender), the
minimum assignment amount shall be $1 million unless otherwise agreed by the
Borrowers and the Administrative Agent.
         
The Lenders shall also be permitted to sell participations in their
Loans.  Participants shall have the same benefits as the Lenders with respect to
yield protection and increased cost provisions.  Voting rights of participants
shall be limited to those matters with respect to which the affirmative vote of
the Lender from which it purchased its participation would be required as
described under “Voting” below.  Pledges of Loans in accordance with applicable
law shall be permitted without restriction.
   
Voting:
Required Lenders, i.e., banks holding at least a majority of the Commitments
except as to matters requiring unanimity (e.g., the reduction of interest rates,
the extension of interest payment dates, the reduction of fees, the extension of
the maturity of Borrowers’ obligations, changes to any provision that sets forth
the priority of payment as among Tranche A Lenders and Tranche B Lenders or that
concerns the relative rights of Tranche A Lenders and Tranche B Lenders and the
super-priority status of Borrowers’ obligations) and except that the consent of
the Super-Majority Lenders (defined to mean Lenders, including all Tranche A
Lenders, holding at least 66-2/3% of the Commitments), shall be required with
respect to certain matters consistent with Section 9.10(a) of the Existing
Credit Agreement, including releases of material collateral (other than in
connection with asset sales expressly permitted by the Amended Credit
Agreement).  The Amended Credit Agreement will provide that if the Borrowers
request an amendment which requires unanimous consent and such amendment is
consented to by Lenders including JPMCB holding at least 66-2/3% of the
Commitments, then with the consent of the Borrowers and such consenting Lenders,
the Amended Credit Agreement may be amended to replace the Lender(s) which did
not consent to the amendment requested by the Borrowers.
   
Agency:
Usual and customary agency provisions satisfactory to the Administrative Agent.
   
Governing
 

 
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Law:
Laws of the State of New York except as governed by the Bankruptcy Code.

 
 

 
 
 
 
 
 
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