EX-4.1




Exhibit
4.1





Execution Copy




	 	 	 
	 





Bob Evans Farms, Inc.


and


BEF Holding Co., Inc.


$40,000,000 6.39% Senior Notes, Series A,

Due July 28, 2014


$30,000,000 6.39% Senior Notes, Series B,

Due July 28, 2013


 




Note Purchase Agreement


 




Dated as of July 28, 2008



	 	 	 
	 






 









 





Table of Contents




					
	 	 	 	 	 
	Section 
	 	Heading
	 	Page   






					
	Section 1. Authorization of Notes
	 	 	1	 
	 
	 	 	 	 
	Section 2. Sale and Purchase of Notes
	 	 	2	 
	 
	 	 	 	 
	Section 2.1. Notes
	 	 	2	 
	Section 2.2. Guaranty
	 	 	2	 
	 
	 	 	 	 
	Section 3. Closing
	 	 	2	 
	 
	 	 	 	 
	Section 4. Conditions to the Closing
	 	 	2	 
	 
	 	 	 	 
	Section 4.1. Representations and Warranties of the Company, the Issuer and the
Subsidiary Guarantor
	 	 	2	 
	Section 4.2. Performance; No Default
	 	 	3	 
	Section 4.3. Compliance Certificates
	 	 	3	 
	Section 4.4. Opinions of Counsel
	 	 	4	 
	Section 4.5. Purchase Permitted by Applicable Law, Etc.
	 	 	4	 
	Section 4.6. Related Transactions
	 	 	4	 
	Section 4.7. Payment of Special Counsel Fees
	 	 	4	 
	Section 4.8. Private Placement Number
	 	 	4	 
	Section 4.9. Changes in Corporate Structure
	 	 	4	 
	Section 4.10. Subsidiary Guaranty
	 	 	5	 
	Section 4.11. Proceedings and Documents
	 	 	5	 
	 
	 	 	 	 
	Section 5. Representations and Warranties of the Company and the Issuer
	 	 	5	 
	 
	 	 	 	 
	Section 5.1. Organization; Power and Authority
	 	 	5	 
	Section 5.2. Authorization, Etc.
	 	 	5	 
	Section 5.3. Disclosure
	 	 	5	 
	Section 5.4. Organization and Ownership of Shares of Subsidiaries
	 	 	6	 
	Section 5.5. Financial Statements
	 	 	6	 
	Section 5.6. Compliance with Laws, Other Instruments, Etc.
	 	 	7	 
	Section 5.7. Governmental Authorizations, Etc.
	 	 	7	 
	Section 5.8. Litigation; Observance of Statutes and Orders
	 	 	7	 
	Section 5.9. Taxes
	 	 	7	 
	Section 5.10. Title to Property; Leases
	 	 	7	 
	Section 5.11. Licenses, Permits, Etc.
	 	 	8	 
	Section 5.12. Compliance with ERISA
	 	 	8	 
	Section 5.13. Private Offering by the Company and the Issuer
	 	 	9	 
	Section 5.14. Use of Proceeds; Margin Regulations
	 	 	9	 
	Section 5.15. Existing Indebtedness
	 	 	9	 
	Section 5.16. Foreign Assets Control Regulations, Etc.
	 	 	9	 






 -i-




 









 





					
	 	 	 	 	 
	Section 
	 	Heading
	 	Page   






					
	Section 5.17. Status under Certain Statutes
	 	 	10	 
	Section 5.18. Environmental
	 	 	10	 
	 
	 	 	 	 
	Section 6. Representations of the Purchaser
	 	 	11	 
	 
	 	 	 	 
	Section 6.1. Purchase for Investment
	 	 	11	 
	Section 6.2. Source of Funds
	 	 	11	 
	Section 6.3. Accredited Investor
	 	 	13	 
	 
	 	 	 	 
	Section 7. Information as to Company
	 	 	13	 
	 
	 	 	 	 
	Section 7.1. Financial and Business Information
	 	 	13	 
	Section 7.2. Officer’s Certificate
	 	 	15	 
	Section 7.3. Inspection
	 	 	16	 
	 
	 	 	 	 
	Section 8. Payment of the Notes
	 	 	16	 
	 
	 	 	 	 
	Section 8.1. Required Prepayments
	 	 	16	 
	Section 8.2. Optional Prepayments with Make-Whole Amount
	 	 	16	 
	Section 8.3. Maturity; Surrender, etc.
	 	 	18	 
	Section 8.4. Purchase of Notes
	 	 	18	 
	Section 8.5. Change in Control and Environmental Indemnity Event
	 	 	19	 
	 
	 	 	 	 
	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
	 	 	21	 
	Section 9.5. Corporate Existence, Etc.
	 	 	22	 
	Section 9.6. Ownership of Issuer
	 	 	22	 
	Section 9.7. Terrorism Sanctions Regulations
	 	 	22	 
	 
	 	 	 	 
	Section 10. Negative Covenants
	 	 	22	 
	 
	 	 	 	 
	Section 10.1. Consolidated Net Worth
	 	 	22	 
	Section 10.2. Consolidated Fixed Charge Coverage Ratio
	 	 	22	 
	Section 10.3. Limitation on Indebtedness
	 	 	22	 
	Section 10.4. Limitation on Liens
	 	 	23	 
	Section 10.5. Sales of Asset
	 	 	24	 
	Section 10.6. Merger, Consolidation
	 	 	25	 
	Section 10.7. Limitation on Sale and Leasebacks
	 	 	27	 
	Section 10.8. Restrictions on Subsidiaries
	 	 	27	 
	Section 10.9. Nature of Business
	 	 	27	 
	Section 10.10. Transactions with Affiliates
	 	 	27	 
	 
	 	 	 	 
	Section 11. Guaranty by the Company
	 	 	27	 
	 
	 	 	 	 
	Section 11.1. Guaranty by the Company
	 	 	27	 






 -ii-





 









 








					
	 	 	 	 	 
	Section 
	 	Heading
	 	Page   






					
	Section 11.2. Guaranty of Payment and Performance
	 	 	28	 
	Section 11.3. General Provisions Relating to Guaranty by the Company of the
Issuer’s Obligations under this Agreement and the Notes
	 	 	28	 
	 
	 	 	 	 
	Section 12. Events of Default
	 	 	33	 
	 
	 	 	 	 
	Section 13. Remedies on Default, Etc.
	 	 	35	 
	 
	 	 	 	 
	Section 13.1. Acceleration
	 	 	35	 
	Section 13.2. Other Remedies
	 	 	36	 
	Section 13.3. Rescission
	 	 	36	 
	Section 13.4. No Waivers or Election of Remedies, Expenses, Etc.
	 	 	36	 
	 
	 	 	 	 
	Section 14. Registration; Exchange; Substitution of Notes
	 	 	36	 
	 
	 	 	 	 
	Section 14.1. Registration of Notes
	 	 	36	 
	Section 14.2. Transfer and Exchange of Notes
	 	 	37	 
	Section 14.3. Replacement of Notes
	 	 	37	 
	 
	 	 	 	 
	Section 15. Payments on Notes
	 	 	38	 
	 
	 	 	 	 
	Section 15.1. Place of Payment
	 	 	38	 
	Section 15.2. Home Office Payment
	 	 	38	 
	 
	 	 	 	 
	Section 16. Expenses, Etc.
	 	 	38	 
	 
	 	 	 	 
	Section 16.1. Transaction Expenses
	 	 	38	 
	Section 16.2. Survival
	 	 	39	 
	 
	 	 	 	 
	Section 17. Survival of Representations and Warranties; Entire Agreement
	 	 	39	 
	 
	 	 	 	 
	Section 18. Amendment and Waiver
	 	 	39	 
	 
	 	 	 	 
	Section 18.1. Requirements
	 	 	39	 
	Section 18.2. Solicitation of Holders of Notes
	 	 	40	 
	Section 18.3. Binding Effect, Etc.
	 	 	40	 
	Section 18.4. Notes Held by Company, Etc.
	 	 	41	 
	 
	 	 	 	 
	Section 19. Notices
	 	 	41	 
	 
	 	 	 	 
	Section 20. Reproduction of Documents
	 	 	41	 
	 
	 	 	 	 
	Section 21. Confidential Information
	 	 	42	 
	 
	 	 	 	 
	Section 22. Substitution of Purchaser
	 	 	43	 






 -iii-





 









 








					
	 	 	 	 	 
	Section 
	 	Heading
	 	Page   






					
	Section 23. Miscellaneous
	 	 	43	 
	 
	 	 	 	 
	Section 23.1. Successors and Assigns
	 	 	43	 
	Section 23.2. Payments Due on Non-Business Days
	 	 	43	 
	Section 23.3. Severability
	 	 	43	 
	Section 23.4. Construction
	 	 	43	 
	Section 23.5. Counterparts
	 	 	43	 
	Section 23.6. Governing Law
	 	 	44	 






 -iv-





 












 






	 	 	 	 	 
	Schedule A

	 	—
	 	Information Relating To Purchasers
	 
	Schedule B

	 	—
	 	Defined Terms
	 
	Schedule 5.4

	 	—
	 	Subsidiaries of the Company, Ownership of Subsidiary Stock
	 
	Schedule 5.5

	 	—
	 	Financial Statements
	 
	Schedule 5.8

	 	—
	 	Litigation; Observance of Statutes and Orders
	 
	Schedule 5.11

	 	—
	 	Licenses, Permits, Etc.
	 
	Schedule 5.15

	 	—
	 	Existing Indebtedness
	 
	Schedule 5.18

	 	—
	 	Environmental
	 
	Schedule 10.4

	 	—
	 	Existing Liens
	 
	Exhibit 1(a)

	 	—
	 	Form of 6.39% Senior Note, Series A, due July 28, 2014
	 
	Exhibit 1(b)

	 	—
	 	Form of 6.39% Senior Note, Series B, due July 28, 2013
	 
	Exhibit 2.2

	 	—
	 	Form of Subsidiary Guaranty
	 
	Exhibit 4.4(a)

	 	—
	 	Form of Opinion of Vorys, Sater, Seymour and Pease LLP, Special Counsel to the
Company, the Issuer and the Subsidiary Guarantor
	 
	Exhibit 4.4(b)

	 	—
	 	Form of Opinion of Special Counsel to the Purchasers







-v-









 








Bob Evans Farms, Inc.

3776 S. High Street

Columbus, Ohio 43207




and




BEF Holding Co., Inc.

c/o Bob Evans Farms, Inc.

1105 N. Market Street

Wilmington, Delaware 19899




$40,000,000 6.39% Senior Notes, Series A,

Due July 28, 2014




$30,000,000 6.39% Senior Notes, Series B,

Due July 28, 2013




Dated as of

July 28, 2008




To the Purchasers listed in



the attached Schedule A:




Ladies and Gentlemen:




     Bob Evans Farms, Inc., a Delaware corporation (the “Company”), and BEF Holding
Co., Inc., a Delaware corporation (the “Issuer”), hereby jointly and severally agree with you
as follows:



Section 1. Authorization of Notes.




     The Issuer will authorize the issue and sale of (i) $40,000,000 aggregate principal amount of
its 6.39% Senior Notes, Series A, due July 28, 2014 (the “Series A Notes”) and (ii) $30,000,000
aggregate principal amount of its 6.39% Senior Notes, Series B, due July 28, 2013 (the “Series B
Notes” and together with the Series A Notes, the “Notes”). The term “Notes” shall also include any
such notes issued in substitution therefore pursuant to Section 14 of this Agreement. The Series A
Notes and the Series B Notes shall be substantially in the forms set out in Exhibit 1(a) and
Exhibit 1(b), respectively, with such changes therefrom, if any, as may be approved by each
Purchaser and the Issuer. 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
Exhibit attached to this Agreement.



 









 





Section 2. Sale and Purchase of Notes.




     Section 2.1. Notes. Subject to the terms and conditions of this Agreement, the Issuer will
issue and sell to each Purchaser and each Purchaser will purchase from the Issuer, at the Closing
provided for in Section 3, Notes in the principal amount specified opposite such Purchaser’s name
in Schedule A at the purchase price of 100% of the principal amount thereof. The obligations of
each Purchaser hereunder are several and not joint obligations and each Purchaser shall have no
obligation and no liability to any Person for the performance or nonperformance by any other
Purchaser hereunder.



     Section 2.2. Guaranty. The payment by the Issuer of all amounts due with respect to the Notes
and the performance by the Issuer of its obligations under this Agreement will be absolutely and
unconditionally guaranteed by the Company pursuant to the terms and provisions of Section 11 of
this Agreement and by the Subsidiary Guarantor pursuant to the Subsidiary Guaranty Agreement (as
amended, restated, joined, supplemented or otherwise modified from time to time, the “Subsidiary
Guaranty”), which shall be in substantially the form attached hereto as Exhibit 2.2.



Section 3. Closing.




     The sale and purchase of the Notes to be purchased by each Purchaser shall occur at the
offices of Chapman and Cutler LLP, 111 West Monroe Street, Chicago, Illinois 60603, at 9:00 a.m.,
Chicago time, at a Closing (the “Closing”) on July 28, 2008 or on such other Business Day
thereafter on or prior to August 1, 2008 as may be agreed upon by the Company, the Issuer and the
Purchasers. At the Closing the Issuer will deliver to each Purchaser the Notes to be purchased by
such Purchaser in the form of a single Note (or such greater number of Notes in denominations of at
least $100,000 as such Purchaser may reasonably request) dated the date of the Closing and
registered in such Purchaser’s name (or in the name of a nominee of such Purchaser), against
delivery by such Purchaser to the Issuer 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 Issuer to Account Number 022657-0, Account Name BEF Holding Co., Inc., at Wilmington Trust
Company, Wilmington, Delaware, ABA Number 031100092. If at the Closing the Issuer shall fail to
tender such Notes to any Purchaser as provided above in this Section 3, or any of the conditions
specified in Section 4 shall not have been fulfilled to any Purchaser’s satisfaction, such
Purchaser shall, at such Purchaser’s election, be relieved of all further obligations under this
Agreement, without thereby waiving any rights such Purchaser may have by reason of such failure or
such nonfulfillment.



Section 4. Conditions to the Closing.




     The obligation of each Purchaser to purchase and pay for the Notes to be sold to such
Purchaser at the Closing is subject to the fulfillment to such Purchaser’s satisfaction, prior to
or at the Closing, of the following conditions:



     Section 4.1. Representations and Warranties of the Company, the Issuer and the Subsidiary
Guarantor. (a) The representations and warranties of the Company in this Agreement



-2-









 







shall
be correct in all respects when made and at the time of the Closing, unless stated to relate to a
specific earlier date (in which case the same shall be correct in all respects on and as of such
specific earlier date).



     (b) The representations and warranties of the Issuer in this Agreement shall be correct in all
respects when made and at the time of the Closing, unless stated to relate to a specific earlier
date (in which case the same shall be correct in all respects on and as of such specific earlier
date).




     (c) The representations and warranties of the Subsidiary Guarantor in the Subsidiary Guaranty
shall be correct in all respects when made and at the time of the Closing, unless stated to relate
to a specific earlier date (in which case the same shall be correct in all respects on and as of
such specific earlier date).




     Section 4.2. Performance; No Default.  The Company, the Issuer and the Subsidiary
Guarantor shall have performed and complied with all agreements and conditions contained in this
Agreement and in the Subsidiary Guaranty, as applicable, required to be performed or complied with
by the Company, the Issuer and the Subsidiary Guarantor 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 had such Section applied
since such date.



     Section 4.3. Compliance Certificates.




     (a) Officer’s Certificate of the Company. The Company shall have delivered to such
Purchaser an Officer’s Certificate, dated the date of the Closing, certifying that the
conditions specified in Sections 4.1(a), 4.2 and 4.9 have been fulfilled.




     (b) Secretary’s Certificate of the Company. The Company shall have delivered to such
Purchaser a certificate certifying as to the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and delivery of this
Agreement.




     (c) Officer’s Certificate of the Issuer. The Issuer shall have delivered to such
Purchaser an Officer’s Certificate, dated the date of the Closing, certifying that the
conditions specified in Sections 4.1(b), 4.2 and 4.9 have been fulfilled.




     (d) Secretary’s Certificate of the Issuer. The Issuer shall have delivered to such
Purchaser a certificate certifying as to the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and delivery of the Notes and
this Agreement.




     (e) Officer’s Certificate of the Subsidiary Guarantor. The Subsidiary Guarantor shall
have delivered to such Purchaser an Officer’s Certificate, dated the date



-3-









 






of the Closing,
certifying that the conditions specified in Sections 4.1(c), 4.2 and 4.9 have been
fulfilled.




     (f) Secretary’s Certificate of the Subsidiary Guarantor. The Subsidiary Guarantor
shall have delivered to such Purchaser a certificate certifying as to the resolutions
attached thereto and other limited liability company proceedings relating to the
authorization, execution and delivery of the Subsidiary Guaranty.



     Section 4.4. Opinions of Counsel. Such Purchaser shall have received opinions
addressed to such Purchaser, dated the date of the Closing (a) from Vorys, Sater, Seymour and Pease
LLP, special counsel to the Company, the Issuer and the Subsidiary Guarantor, substantially in the
form attached as Exhibit 4.4(a) (and the Company, the Issuer and the Subsidiary Guarantor hereby
instruct their counsel to deliver such opinion to such Purchaser), and (b) from Chapman and Cutler
LLP, the Purchasers’ special counsel in connection with such transactions, substantially in the
form set forth in Exhibit 4.4(b).



     Section 4.5. Purchase Permitted by Applicable Law, Etc. On the date of the Closing
each purchase of Notes shall (a) be permitted by the laws and regulations of each jurisdiction to
which each Purchaser is 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, (b) 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 (c) not subject any Purchaser 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 any Purchaser, such Purchaser shall have received an Officer’s Certificate
certifying as to such matters of fact as such Purchaser may reasonably specify to enable such
Purchaser to determine whether such purchase is so permitted.



     Section 4.6. Related Transactions.  The Issuer shall have consummated the sale of the
entire principal amount of the Notes scheduled to be sold at the Closing pursuant to this
Agreement.



     Section 4.7. Payment of Special Counsel Fees. Without limiting the provisions of
Section 16.1, the Company and the Issuer shall have paid on or before the Closing, the reasonable
fees, charges and disbursements of the Purchasers’ 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 each Series of the Notes.



     Section 4.9. Changes in Corporate Structure. Neither the Company, the Issuer nor the
Subsidiary Guarantor shall have changed its jurisdiction of organization or been a party to any
merger or consolidation or shall have succeeded to all or any substantial part of the liabilities
of



-4-









 







any other entity, at any time following the date of the most recent financial statements
referred to in Schedule 5.5.



     Section 4.10. Subsidiary Guaranty. The Subsidiary Guaranty shall have been duly authorized,
executed and delivered by the Subsidiary Guarantor, shall constitute the legal, valid and binding
contract and agreement of the Subsidiary Guarantor 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) and such Purchaser
shall have received a true, correct and complete copy thereof.



     Section 4.11. Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated by this Agreement and all documents and instruments
incident to such transactions shall be reasonably satisfactory to such Purchaser and such
Purchaser’s special counsel, and such Purchaser and such Purchaser’s special counsel shall have
received all such counterpart originals or certified or other copies of such documents as such
Purchaser or such Purchaser’s special counsel may reasonably request.



Section 5. Representations and Warranties of the Company and the Issuer.




     The Company and the Issuer jointly and severally represent and warrant to each Purchaser that:



     Section 5.1. Organization; Power and Authority. Each of the Company and the Issuer is a
corporation 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
of the Company and the Issuer has the corporate or other organizational 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 Notes, as the
case may be, and to perform the provisions hereof and thereof.



     Section 5.2. Authorization, Etc. This Agreement and the Notes have been duly
authorized by all necessary corporate or other organizational action on the part of the Company and
the Issuer, as the case may be, 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 and of the
Issuer enforceable against the Issuer, as the case may be, 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 Issuer, through its agent, NatCity Investments, Inc.,
has delivered to each Purchaser a copy of a Confidential Information Memorandum dated June, 2008



-5-









 







(the “Memorandum”), relating to the transactions contemplated hereby. Appendices A-D of the
Memorandum include the Company’s Annual Report to Stockholders for the fiscal year ended April 27,
2007; Annual Report on Form 10-K for the fiscal year ended April 27, 2007; Quarterly Reports on
Form 10-Q for the quarters ended July 27, 2007, October 26, 2007 and January 25, 2008; and Proxy
Statement filed July 31, 2007 (collectively, together with the Annual Report of the Company on Form
10-K for the fiscal year ended April 25, 2008 (the “SEC Filings”). The Memorandum and the SEC
Filings, taken as a whole, fairly describe, in all material respects as of the dates specified
therein, the general nature of the business and principal properties of the Company and its
Subsidiaries. This Agreement, the Memorandum and the SEC Filings, 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 are made. Except
as disclosed in the Memorandum and the SEC Filings or in one of the documents, certificates or
other writings identified therein, or in the financial statements listed in Schedule 5.5, since
April 25, 2008, there has been no change in the financial condition, operations, business or
properties of the Company or any of its Subsidiaries except changes that individually or in the
aggregate would not reasonably be expected to have a Material Adverse Effect.



     Section 5.4. Organization and Ownership of Shares of Subsidiaries. (a) Schedule 5.4
contains (except as noted therein) a complete and correct list of the Company’s Subsidiaries,
showing, as to each such 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.



     (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 would 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.



     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).



-6-









 





     Section 5.6. Compliance with Laws, Other Instruments, Etc. The execution, delivery
and performance by the Company and the Issuer, as the case may be, 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 Material 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. 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 and the Issuer, as the case
may be, of this Agreement or the Notes.



     Section 5.8. Litigation; Observance of Statutes and Orders. (a) Except as disclosed
in Schedule 5.8 or 5.18, there are no actions, suits or proceedings pending or, to the knowledge of
the Company or the Issuer, threatened against or affecting the Company, the Issuer or any
Subsidiary or any property of the Company, the Issuer 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, would reasonably be expected to have a Material Adverse Effect.



     (b) Neither the Company nor any Subsidiary is in default under 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, would reasonably be
expected to have a Material Adverse Effect.



     Section 5.9. Taxes. The Company and its Subsidiaries have filed all income 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 payable by them, 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
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
April 29, 2005.



     Section 5.10. Title to Property; Leases. The Company and its Subsidiaries have good
and sufficient title to their respective Material properties, including all such properties
reflected in the most recent audited balance sheet referred to in Section 5.5 or purported to have
been acquired



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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, except for those defects in title and Liens that, individually or in the aggregate,
would not have a Material Adverse Effect. All Material leases are valid and subsisting and are in
full force and effect in all material respects.



     Section 5.11. Licenses, Permits, Etc. Except as disclosed in Schedule 5.11, 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 are Material,
without known conflict with the rights of others except for those conflicts, that, individually or
in the aggregate, would not have a Material Adverse Effect.



     Section 5.12. Compliance with ERISA. (a) The Company, the Issuer 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 the Issuer 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 any Plan, and no event, transaction or condition has occurred or
exists that would reasonably be expected to result in the incurrence of any such liability by the
Company, the Issuer or any ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company, the Issuer 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. 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 any 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 is not Material.



     (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 and the Issuer, as



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the case may be, in the first
sentence of this Section 5.12(e) is made in reliance upon and subject to the accuracy of each
Purchaser’s representation in Section 6.2 as to the sources of the funds to be used to pay the
purchase price of the Notes to be purchased by such Purchaser.



     Section 5.13. Private Offering by the Company and the Issuer. Neither the Company
nor the Issuer nor anyone acting on its or their 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 the Purchasers and not more than
thirty-two (32) other Institutional Investors, each of which has been offered the Notes at a
private sale for investment. Neither the Company nor the Issuer nor anyone acting on its or their
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 Issuer will apply the
proceeds from the sale of the Notes to repay Indebtedness under existing bank credit facilities of
the Company and its Subsidiaries, to refinance a portion of the principal of the 2004 Senior Notes,
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 221),
or for the purpose of buying or carrying or trading in any securities under such circumstances as
to involve the Issuer 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 2% 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 2%
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 Indebtedness. Except as described therein, Schedule 5.15 sets
forth a complete and correct list of all outstanding Indebtedness of the Company and its
Subsidiaries as of July 28, 2008, since which date there has been no Material change, in the
amounts (except for prepayment thereof), interest rates, sinking funds, installment payments or
maturities of such Indebtedness. 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
Indebtedness of the Company or such Subsidiary and no event or condition exists with respect to any
Indebtedness 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 Indebtedness to become due and
payable before its stated maturity or before its regularly scheduled dates of payment.



     Section 5.16. Foreign Assets Control Regulations, Etc. (a) Neither the sale of the Notes by
the Issuer 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.



-9-









 





     (b) Neither the Company nor any Subsidiary (i) is a Person described or designated in the
Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control or
in Section 1 of the Anti-Terrorism Order or (ii) knowingly engages in any dealings or transactions
with any such Person. The Company and its Subsidiaries are in compliance, in all material
respects, with the USA Patriot Act.



     (c) No part of the proceeds from the sale of the Notes hereunder will be used, directly or
indirectly, for any payments 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, assuming in all cases that such
Act applies to the Company.



     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, or is subject to
regulation under the Public Utility Holding Company Act of 2005, as amended, the ICC Termination
Act of 1995, as amended, or the Federal Power Act, as amended.



     Section 5.18. Environmental. Except as disclosed on Schedule 5.18, 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 within the past 20 years 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 disclosed on Schedule 5.18 or 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 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) to the knowledge of Company and each Subsidiary 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 in a manner contrary to any Environmental Laws 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.



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Section 6. Representations of the Purchaser.




     Section 6.1. Purchase for Investment. Each Purchaser represents that it is
purchasing the Notes for its own account or for one or more separate accounts maintained by it 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 such Purchaser’s or such pension or trust funds’ property
shall at all times be within such Purchaser’s or such pension or trust funds’ control. Each
Purchaser understands that the Notes have not been registered under the Securities Act or under the
securities laws of any state and may be transferred or resold only if registered pursuant to the
provisions of the Securities Act and any applicable state securities laws 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 Issuer is not required to register the Notes.



     Section 6.2. Source of Funds. Each Purchaser represents that at least one of the following
statements is an accurate representation as to each source of funds (a “Source”) to be used by it
to pay the purchase price of the Notes to be purchased by it 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 Section V(a)(1) of PTE
95-60) or by the same employee organization (as defined in the NAIC Annual Statement) 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 such Purchaser’s state of domicile; or




     (b) the Source is a separate account that is maintained solely in connection with such
Purchaser’s fixed contractual obligations under which the amounts payable, or credited, to
any employee benefit plan (or its related trust) that has any interest in such separate
account (or to any participant or beneficiary of such employee benefit plan (including any
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 the PTE
91-38 and, except as disclosed by such Purchaser to the Issuer in writing pursuant to this
clause (c), no employee benefit plan or group of employee benefit 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



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     (d) the Source constitutes assets of an “investment fund” (as defined in Part V(b) of
Part V of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified professional asset
manager” or “QPAM” (as defined in Part V(a) 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(a) through (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 Issuer and (i) the identity of such QPAM and (ii) the names of all employee benefit
plans (holding an interest of 10% or more of such investment fund) whose assets are included
in such investment fund have been disclosed to the Issuer in writing pursuant to this clause
(d); or




     (e) the Source constitutes assets of a “plan” (as defined in Section IV(h) of PTE 96-23
(the “INHAM Exemption”)) managed by an “in-house asset manager” or “INHAM” (as defined in
Section IV(a) of the INHAM Exemption), the conditions of Part I(a) through (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(d) of the INHAM Exemption) owns a
5% or more interest in the Issuer 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
Issuer 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 Issuer 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.


If any Purchaser or any subsequent transferee of the Notes indicates that such Purchaser or such
transferee is relying on any representation contained in paragraph (c), (d), (e) or (g) above, the
Issuer shall deliver on the date of issuance of such Notes and on the date of any applicable
transfer a certificate which shall either state that (i) it is neither a party in interest nor a
“disqualified person” (as defined in Section 4975(e)(2) of the Code), with respect to any plan
identified pursuant to paragraphs (c), (e) or (g) above, or (ii) with respect to any plan,
identified pursuant to paragraph (d) above, neither it nor any “affiliate” (as defined in
Section V(c) of the QPAM Exemption) has at such time, and during the immediately preceding one
year, exercised the authority to appoint or terminate said QPAM as manager of any plan identified
in writing pursuant to paragraph (d) above or to negotiate the terms of said QPAM’s management
agreement on behalf of any such identified plan. As used in this Section 6.2, the terms


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“employee
benefit plan”, “governmental plan”, “party in interest” and “separate account” shall have the
respective meanings assigned to such terms in Section 3 of ERISA.




     Section 6.3. Accredited Investor. Each Purchaser represents that it is an “accredited
investor” within the meaning of Rule 501(a) of Regulation D as promulgated under the Securities
Act.



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 45 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,




     (ii) consolidated statements of income 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, and




     (iii) consolidated statements of cash flows of the Company and its Subsidiaries
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 90 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,



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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 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, 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 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
(other than Form 8-Ks that describe events that could not reasonably be expected to have a
Material Adverse Effect), each registration statement that shall have become effective
(without exhibits except as expressly requested by such holder), and each final prospectus
and all amendments thereto filed by the Company or any Subsidiary with the Securities and
Exchange Commission;




     (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, 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, the Issuer 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 thereof;
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, the Issuer 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



-14-









 






     (iii) any event, transaction or condition that could result in the incurrence
of any liability by the Company, the Issuer 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, the Issuer 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, would 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; and




     (g) 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, the Issuer
or the Subsidiary Guarantor, as the case may be, to perform its obligations hereunder, under
the Notes and under the Subsidiary Guaranty, as applicable, as from time to time may be
reasonably requested by any such holder of Notes (excluding management letters from the
Company’s independent public accountants).



     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
Section 10.1 through Section 10.8 hereof, both 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



-15-









 






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) to visit the other offices and properties of the
Company and each Subsidiary, all at such reasonable times during normal business hours 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. Payment of the Notes.




     Section 8.1. Required Prepayments. (a) On July 28, 2012, the Issuer will prepay $20,000,000
principal amount (or such lesser principal amount as shall then be outstanding) of the Series A
Notes at par and without payment of the Make-Whole Amount or any premium, provided that upon any
partial prepayment of the Series A Notes pursuant to Section 8.2 or Section 8.5 or purchase of the
Series A Notes permitted by Section 8.4, the principal amount of the required prepayment of the
Series A Notes becoming due under this Section 8.1(a) on and after the date of such prepayment or
purchase shall be reduced in the same proportion as the aggregate unpaid principal amount of the
Series A Notes is reduced as a result of such prepayment or purchase. The entire unpaid principal
amount of the Series A Notes shall become due and payable on July 28, 2014.



     (b) The entire unpaid principal amount of the Series B Notes shall become due and payable on
July 28, 2013.



     Section 8.2. Optional Prepayment with Make-Whole Amount.



     (a) The Issuer may, at its option, upon notice as provided below, prepay at any time all, or
from time to time any part of, the Notes, in an aggregate principal amount of $1,000,000 or more in
the case of a partial prepayment, at 100% of the principal amount so prepaid, together with
interest accrued thereon to the date of such prepayment, plus the Make-Whole Amount determined for
the prepayment date with respect to such principal amount of each Note then



-16-









 







outstanding. The
Issuer will give each holder of Notes to be prepaid 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 date fixed for
such prepayment. Each such notice shall specify such date, the aggregate principal amount of the
Notes to be prepaid on such date, the principal amount of each Note held by such holder to be
prepaid (determined in accordance with Section 8.2(b)), and the interest to
be paid on the prepayment date with respect to such principal amount being prepaid, and shall be
accompanied by a certificate of a Senior Financial Officer as to the estimated Make-Whole Amount
due in connection with such prepayment (calculated as if the date of such notice were the date of
the prepayment), setting forth the details of such computation. Two Business Days prior to such
prepayment, the Issuer shall deliver to each holder of Notes to be prepaid a certificate of a
Senior Financial Officer specifying the calculation of such Make-Whole Amount as of the specified
prepayment date.



     (b) In the case of each partial prepayment of the Notes, the principal amount of the Notes to
be prepaid shall be allocated among all of the Notes at the time outstanding in proportion, as
nearly as practicable, to the respective unpaid principal amounts thereof.



     (c) The term “Make-Whole Amount” means, with respect to any Note, an amount equal to the
excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the
Called Principal of such Note over the amount of such Called Principal, provided that the
Make-Whole Amount may in no event be less than zero. For the purposes of determining the
Make-Whole Amount, the following terms have the following meanings:




     “Called Principal” means, with respect to any Note, the principal of such Note that is
to be prepaid pursuant to Section 8.2(a) or has become or is declared to be immediately due
and payable pursuant to Section 13.1, as the context requires.




     “Discounted Value” means, with respect to the Called Principal of any Note, the amount
obtained by discounting all Remaining Scheduled Payments with respect to such Called
Principal from their respective scheduled due dates to the Settlement Date with respect to
such Called Principal, in accordance with accepted financial practice and at a discount
factor (applied on the same periodic basis as that on which interest on such Notes is
payable) equal to the Reinvestment Yield with respect to such Called Principal.




     “Reinvestment Yield” means, with respect to the Called Principal of any Note, 0.50%
plus the yield to maturity implied by (i) the yields reported, as of 10:00 A.M. (New York
City time) on the second Business Day preceding the Settlement Date with respect to such
Called Principal, on the display page on the Bloomberg Financial Markets Services Screen PX1
or the equivalent screen provided by Bloomberg Financial Markets Commodities News for
actively traded U.S. Treasury securities having a maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date, or (ii) if such yields are not
reported as of such time or the yields reported as of such time are not ascertainable, the
Treasury Constant Maturity Series Yields reported, for the latest day for which such yields
have been so reported as of the second Business Day preceding the Settlement Date with
respect to such Called Principal, in Federal Reserve Statistical Release H.15 (519) (or any
comparable successor publication) for actively traded U.S.



-17-









 







Treasury securities having a
constant maturity equal to the Remaining Average Life of such Called Principal as of such
Settlement Date. Such implied yield will be determined, if necessary, by (a) converting
U.S. Treasury bill quotations to bond-equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly between (1) the actively traded U.S.
Treasury security with the maturity closest to and greater than the
Remaining Average Life and (2) the actively traded U.S. Treasury security with the
maturity closest to and less than the Remaining Average Life.




     “Remaining Average Life” means, with respect to any Called Principal, the number of
years (calculated to the nearest one-twelfth year) obtained by dividing (i) such Called
Principal into (ii) the sum of the products obtained by multiplying (a) the principal
component of each Remaining Scheduled Payment with respect to such Called Principal by
(b) the number of years (calculated to the nearest one-twelfth year) that will elapse
between the Settlement Date with respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment.




     “Remaining Scheduled Payments” means, with respect to the Called Principal of any Note,
all payments of such Called Principal and interest thereon that would be due after the
Settlement Date with respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date, provided that if such Settlement Date is not a
date on which interest payments are due to be made under the terms of the Notes of the
applicable Series, then the amount of the next succeeding scheduled interest payment will be
reduced by the amount of interest accrued to such Settlement Date and required to be paid on
such Settlement Date pursuant to Section 8.2(a) or Section 13.1.




     “Settlement Date” means, with respect to the Called Principal of any Note, the date on
which such Called Principal is to be prepaid pursuant to Section 8.2(a) or has become or is
declared to be immediately due and payable pursuant to Section 13.1, as the context
requires.



     Section 8.3. Maturity; Surrender, etc. In the case of each prepayment of Notes pursuant to
this Section 8, the principal amount of each 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 Make-Whole Amount, if any. From and after such date,
unless the Issuer shall fail to pay such principal amount when so due and payable, together with
the interest and Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the Issuer and cancelled
and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of
any Note.



     Section 8.4. Purchase of Notes. The Issuer and the Company will not, and will not permit any
of their respective Affiliates to, purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes except (a) upon the payment or prepayment of the Notes in
accordance with the terms of this Agreement and the Notes or (b) pursuant to an offer to purchase
made by the Issuer, the Company or any of their Affiliates pro rata to the



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holders of all Notes at
the time outstanding upon the same terms and conditions. Any such offer shall provide each holder
with sufficient information to enable it to make an informed decision with respect to such offer,
and shall remain open for at least 20 Business Days. If the holders of more than 10% of the
principal amount of the Notes then outstanding accept such offer, the Issuer shall promptly notify
the
remaining holders of such fact and the expiration date for the acceptance by holders of Notes of
such offer shall be extended by the number of days necessary to give each such remaining holder at
least 10 Business Days from its receipt of such notice to accept such offer. The Issuer will
promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment, prepayment or
purchase of Notes pursuant to any provision of this Agreement and no Notes may be issued in
substitution or exchange for any such Notes.



     Section 8.5. Change in Control and Environmental Indemnity Event.



     (a) Notice of Change in Control or Control Event. The Company will, within ten days after any
Responsible Officer of the Company has actual knowledge of the occurrence of any Control Event,
give written notice of such Control Event to each holder of Notes. In addition, the Company will,
within ten days after any Responsible Officer of the Company has actual knowledge of the occurrence
of any Change in Control, give written notice of such Change in Control which notice shall contain
and constitute an offer to prepay Notes as described in subparagraph (c) of this Section 8.5 and
shall be accompanied by the certificate described in subparagraph (f) of this Section 8.5.



     (b) Notice of Environmental Indemnity Event. The Company will, within ten days after any
Responsible Officer of the Company has actual knowledge of the occurrence of an Environmental
Indemnity Event, give written notice of such Environmental Indemnity Event which notice shall
contain and constitute an offer to prepay Notes as described in subparagraph (c) of this
Section 8.5 and shall be accompanied by the certificate described in subparagraph (f) of this
Section 8.5.



     (c) Offer to Prepay Notes. The offer to prepay Notes contemplated by subparagraphs (a) and
(b) of this Section 8.5 shall be an offer to prepay, in accordance with and subject to this
Section 8.5, 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”) that
is not less than 20 days and not more than 90 days after the date of such offer (if the Proposed
Prepayment Date shall not be specified in such offer, the Proposed Prepayment Date shall be the
30th day after the date of such offer).



     (d) Acceptance/Rejection. A holder of Notes may accept the offer to prepay made pursuant to
this Section 8.5 by causing a notice of such acceptance to be delivered to the Issuer at least 5
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 8.5 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 8.5 shall be
at 100% of the principal amount of such Notes



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together with interest on such Notes accrued to the
date of prepayment but without payment of any Make-Whole Amount. The prepayment shall be made on
the Proposed Prepayment Date.



     (f) Officer’s Certificate. Each offer to prepay the Notes pursuant to this Section 8.5 shall
be accompanied by a certificate, executed by a Senior Financial Officer of the Issuer and dated the
date of such offer, specifying: (i) the Proposed Prepayment Date; (ii) that such offer is made
pursuant to this Section 8.5(a) or (b), as applicable; (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 this Section 8.5 have been
fulfilled; (vi) in reasonable detail, the nature and date of the Change in Control or the
Environmental Indemnity Event, as applicable; and (vii) that the failure to respond to such offer
of prepayment shall constitute a rejection of such offer.



     (g) “Change in Control” Defined. “Change in Control” means each and every issue, sale or
other disposition of shares of voting stock of the Company which results in any person (as such
term is used in section 13(d) and section 14(d)(2) of the Exchange Act) or related persons
constituting a group (as such term is used in Rule 13d-5 under the Exchange Act), becoming 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 Company’s voting stock. Notwithstanding the foregoing, a Permitted
Reincorporation shall not be a Change in Control for purposes of this Agreement.



     (h) “Control Event” Defined. “Control Event” means:




     (i) the execution by the Company or any of its Subsidiaries or Affiliates of any
agreement or binding letter of intent with respect to any proposed transaction or event or
series of transactions or events which, individually or in the aggregate, could 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 common stock of the
Company, which offer, if accepted by the requisite number of holders, would result in a
Change in Control unless such offer is rejected or expires pursuant to its terms prior to
the date on which notice of such Change in Control is required to be delivered pursuant to
Section 8.5(a).



     (i) “Environmental Indemnity Event” Defined. An “Environmental Indemnity Event” will be
deemed to have occurred on the date on which the Company pays (or has paid) an aggregate amount at
least equal to $25,000,000 (either voluntarily or involuntarily and either in a lump sum or over a
period of time) in connection with the clean-up or remediation of the environmental issues
described on Schedule 5.18 (including any amounts payable as an



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indemnity under Article X of that
certain Stock Purchase Agreement dated as of October 5, 2001 between Kerry Holding Co., as
purchaser, the Issuer, as seller, and the Company, as guarantor).



Section 9. Affirmative Covenants.




     Each of the Company and the Issuer covenants that so long as any of the Notes are outstanding:



     Section 9.1. Compliance with Law. The Company and the Issuer will, and will cause each of
their 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 would not
reasonably be expected, individually or in the aggregate, to have a materially adverse effect on
the business, operations, affairs, financial condition, properties or assets of the Company and its
Subsidiaries taken as a whole.



     Section 9.2. Insurance. The Company and the Issuer will, and will cause each of their
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 and the Issuer will, and will cause each
of their 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 would not, individually or in
the aggregate, have a materially adverse effect on the business, operations, affairs, financial
condition, properties or assets of the Company and its Subsidiaries taken as a whole.



     Section 9.4. Payment of Taxes. The Company and the Issuer will, and will cause each of their
Subsidiaries to, file all income tax or similar 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 payable by any of them, to the extent
such taxes and assessments have become due and payable and before they have become delinquent,
provided that neither the Company nor any Subsidiary need file any such tax return or pay any such
tax or assessment if (i) the amount, applicability or validity thereof is contested



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by the Company
or such Subsidiary on a timely basis in good faith and in appropriate proceedings, and the Company
or such Subsidiary has established adequate
reserves therefor in accordance with GAAP on the books of the Company or such Subsidiary or
(ii) failure to file all such tax returns and the nonpayment of all such taxes and assessments in
the aggregate would not reasonably be expected to have a materially adverse effect on the business,
operations, affairs, financial condition, properties or assets of the Company and its Subsidiaries
taken as a whole.



     Section 9.5. Corporate Existence, Etc. Subject to Sections 10.5 and 10.6, the Company will at
all times preserve and keep in full force and effect its corporate existence, and will at all times
preserve and keep in full force and effect the corporate or other similar legal entity existence of
each of its Subsidiaries (unless merged into the Company or a Wholly-Owned 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 would not, individually or in the aggregate, have a materially
adverse effect on the business, operations, affairs, financial condition, properties or assets of
the Company and its Subsidiaries taken as a whole.



     Section 9.6. Ownership of Issuer. The Company (including any successor thereto permitted
under this Agreement) or a Wholly-Owned Subsidiary will at all times directly own 100% of the
outstanding equity interest of the Issuer.



     Section 9.7. Terrorism Sanctions Regulations. The Company will not and will not permit any
Subsidiary to (a) become a Person described or designated in the Specially Designated Nationals and
Blocked Persons List of the Office of Foreign Assets Control or in Section 1 of the Anti-Terrorism
Order or (b) knowingly engage in any dealings or transactions with any such Person.



Section 10. Negative Covenants.




     The Company covenants that so long as any of the Notes are outstanding:



     Section 10.1. Consolidated Net Worth. The Company will not at any time permit Consolidated
Net Worth to be less than the sum of (a) $430,000,000 plus (b) an amount equal to 25% of positive
Consolidated Net Income for each completed fiscal year, beginning with the fiscal year ending
April 24, 2009, calculated on a cumulative basis for such entire period.



     Section 10.2. Fixed Charges Coverage Ratio. The Company will not permit the Fixed Charges
Coverage Ratio (calculated as of the end of each fiscal quarter) to be less than 1.50 to 1.00.



     Section 10.3. Limitation on Indebtedness. The Company will not permit:




     (a) Consolidated Indebtedness (calculated as of the end of each fiscal quarter) to
exceed 55% of Consolidated Capitalization;



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     (b) Priority Indebtedness to exceed 25% of Consolidated Net Worth; and




     (c) Indebtedness of BEF REIT, Inc., an Ohio corporation, to exceed $25,000,000.



     Section 10.4. Limitation on Liens. The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly create, incur, assume or permit to exist (upon the
happening of a contingency or otherwise) any Lien on or with respect to any property or asset
(including, without limitation, any document or instrument in respect of goods or accounts
receivable) of the Company or any such Subsidiary, whether now owned or held or hereafter acquired,
or 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 a written agreement satisfactory to the Required Holders), except:




     (a) Liens for taxes, assessments or other governmental charges that 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;




     (c) Liens incidental to the conduct of business or the ownership of properties and
assets (including landlords’, carriers’, warehousemen’s, mechanics’, materialmen’s and other
similar Liens for sums) and Liens to secure (or to obtain letters of credit that secure) the
performance of bids, tenders, leases, or trade contracts, or to secure statutory obligations
(including obligations under workers compensation, unemployment insurance and other social
security legislation), surety or appeal bonds or other Liens incurred in the ordinary course
of business;




     (d) leases or subleases granted to others, easements, rights-of-way, minor survey
exceptions, restrictions and other similar charges or encumbrances, in each case incidental
to, and not interfering with, the ordinary conduct of the business of the Company or any of
its Subsidiaries, provided that such Liens do not, in the aggregate, materially detract from
the value of all property of the Company and its Subsidiaries taken as a whole;




     (e) Liens on property or assets of the Company or any of its Subsidiaries securing
Indebtedness owing to the Company or any Subsidiary;




     (f) Liens existing as of the date of the Closing and reflected in Schedule 10.4;




     (g) Liens incurred after the date of the Closing given to secure the payment of the
purchase price incurred in connection with the acquisition, construction or improvement of
property (other than accounts receivable or inventory) useful and



-23-









 







intended to be used in carrying on the business of the Company or a Subsidiary, including
Liens existing on such property at the time of acquisition or construction thereof, provided
that (i) the Lien shall attach solely to the property acquired, purchased, constructed or
improved, (ii) at the time of acquisition, construction or improvement of such property, the
aggregate amount remaining unpaid on all Indebtedness secured by Liens on such property,
whether or not assumed by the Company or a Subsidiary, shall not exceed the lesser of
(y) the cost of such acquisition, construction or improvement or (z) the Fair Market Value
of such property, and (iii) at the time of such incurrence and after giving effect thereto,
no Default or Event of Default would exist;




     (h) 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 Indebtedness secured thereby shall have
been assumed), provided that (i) no such Lien shall have been created or assumed in
contemplation of such consolidation or merger or such Person’s becoming a Subsidiary or such
acquisition of property, (ii) each such Lien shall extend solely to the item or items of
property so acquired and, if required by the terms of the instrument originally creating
such Lien, other property which is an improvement to or is acquired for specific use in
connection with such acquired property, and (iii) at the time of such incurrence and after
giving effect thereto, no Default or Event of Default would exist;




     (i) any extensions, renewals or replacements of any Lien permitted by the preceding
subparagraphs (f), (g), and (h) of this Section 10.4, provided that (i) no additional
property shall be encumbered by such Liens, (ii) the unpaid principal amount of the
Indebtedness or other obligations secured thereby shall not be increased, and (iii) at such
time and immediately after giving effect thereto, no Default or Event of Default shall have
occurred and be continuing; and




     (j) in addition to the Liens permitted by the preceding subparagraphs (a) through (i),
inclusive, of this Section 10.4, Liens securing Priority Indebtedness of the Company or any
Subsidiary, provided that the aggregate principal amount of Priority Indebtedness secured by
Liens pursuant to this Section 10.4(j) shall be permitted by Section 10.3; provided,
further, that notwithstanding the foregoing, the Company shall not, and shall not permit any
Subsidiary to, allow any Indebtedness outstanding under or pursuant to any Principal Bank
Facility to be or become Priority Indebtedness under clause (ii) of such definition pursuant
to this Section 10.4(j) unless and until the Notes (and any guaranty delivered in connection
therewith) shall be concurrently secured equally and ratably with such Priority Indebtedness
pursuant to documentation reasonably acceptable to the Required Holders; and provided,
further, that the holders of the Notes hereby agree that with respect to such collateral,
any bank party to the Principal Bank Facilities shall be the collateral agent for the
benefit of the holders of the Notes.



     Section 10.5. Sales of Assets. Except as permitted under Section 10.6, the Company will not,
and will not permit any Subsidiary to, sell, lease or otherwise dispose of any substantial part



-24-









 




(as defined below) of the assets of the Company and its Subsidiaries; provided, however, that the
Company or any Subsidiary may sell, lease or otherwise dispose of assets (including equity
interests in Subsidiaries) constituting a substantial part of the assets of the Company and its
Subsidiaries if such assets are sold in an arms length transaction and, at such time and after
giving effect thereto, no Default or Event of Default shall have occurred and be continuing and an
amount equal to the Net Proceeds received from such sale, lease or other disposition shall be used
within 365 days of such sale, lease or disposition, in any combination:





     (1) to acquire productive assets used or useful in carrying on the business of the
Company and its Subsidiaries and having a value and revenue generating capacity at least
equal to the Net Proceeds received from such sale, lease or disposition; or




     (2) to prepay or retire any Senior Indebtedness of the Company and/or its Subsidiaries.



     As used in this Section 10.5, a sale, lease or other disposition of assets shall be deemed to
be a “substantial part” of the assets of the Company and its Subsidiaries if the book value of such
assets, when added to the book value of all other assets sold, leased or otherwise disposed of by
the Company and its Subsidiaries during the period beginning with the date of the Closing to and
including the date on which such sale, lease or other disposition occurs, exceeds 30% of
Consolidated Total Assets, determined as of the end of the fiscal year immediately preceding such
sale, lease or other disposition; provided that there shall be excluded from any determination of a
“substantial part” (i) any sale or disposition of assets in the ordinary course of business of the
Company and its Subsidiaries, and (ii) so long as no Default or Event of Default shall exist, any
transfer of assets from the Company to the Issuer or to any other Wholly-Owned Subsidiary or from
any Subsidiary to the Company, the Issuer or a Wholly-Owned Subsidiary or any other Subsidiary with
the same percentage ownership by the Company and its Subsidiaries as the transferor.



     Section 10.6. Merger, Consolidation. The Company will not, and will not permit any of its
Subsidiaries to, consolidate with or merge with any other corporation or legal entity or convey,
transfer or lease all or substantially all of its assets in a single transaction or series of
transactions to any Person; provided that:




     (1) a Subsidiary of the Company (other than the Issuer) may (x) consolidate with or
merge with, or convey, transfer or lease all or substantially all of its assets in a single
transaction or series of transactions to, the Company, the Issuer or a Wholly-Owned
Subsidiary or any other Subsidiary with the same percentage ownership by the Company, the
Issuer and their Subsidiaries as such Subsidiary so long as in any merger or consolidation
involving the Company, the Company shall be the surviving or continuing corporation, and in
any merger or consolidation involving the Issuer and any other Subsidiary of the Company,
the Issuer shall be the surviving or continuing corporation, or (y) convey, transfer or
lease all of its assets (which may include a merger or consolidation) in compliance with the
provisions of Section 10.5; provided, that immediately after giving effect to such
transaction no Default or Event of Default would exist; and provided, further, that in the
case of the consolidation or merger, or the



-25-









 







conveyance, transfer or lease of all or substantially all of the assets of the Subsidiary
Guarantor, if the Subsidiary Guarantor is not the successor formed by such consolidation or
the survivor of such merger or the Person that acquires by conveyance, transfer or lease all
or substantially all of the assets of the Subsidiary Guarantor as an entirety, (A) such
successor or survivor shall have executed and delivered to each holder of Notes its
assumption of the due and punctual performance and observance of each covenant and condition
of the Subsidiary Guaranty (pursuant to such agreements and instruments as shall be
reasonably satisfactory to the Required Holders), (B) the Subsidiary Guarantor shall have
caused to be delivered to each holder of Notes an opinion of nationally recognized
independent counsel, 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 (C) the Company shall have confirmed in writing its obligations under this Agreement;
and




     (2) the foregoing restrictions in Section 10.6 do not apply to the consolidation or
merger of the Company or the Issuer with, or the conveyance, transfer or lease of all or
substantially all of the assets of the Company or the Issuer in a single transaction or
series of transactions to, any Person so long as:




     (a) the successor formed by such consolidation or the survivor of such merger
or the Person that acquires by conveyance, transfer or lease all or substantially
all of the assets of the Company or the Issuer as an entirety, as the case may be
(the “Successor Corporation"), shall be a solvent corporation or other legal entity
organized and existing under the laws of the United States of America, any State
thereof or the District of Columbia;




     (b) if the Company or the Issuer, as the case may be, is not the Successor
Corporation, such corporation or other legal entity shall have executed and
delivered to each holder of Notes its assumption of the due and punctual performance
and observance of each covenant and condition of this Agreement and the Notes
(pursuant to such agreements and instruments as shall be reasonably satisfactory to
the Required Holders), and the Company or the Issuer, as the case may be, shall have
caused to be delivered to each holder of Notes an opinion of nationally recognized
independent counsel, to the effect that all agreements or instruments effecting such
assumption are enforceable in accordance with their terms and comply with the terms
hereof;




     (c) the Company, in the case of a merger of the Issuer, and the Subsidiary
Guarantor, in the case of a merger of the Company or the Issuer, shall each have
confirmed in writing their respective obligations under this Agreement and the
Subsidiary Guaranty; and




     (d) immediately after giving effect to such transaction (i) the Company or the
Surviving Corporation, as the case may be, would have been in compliance with
Section 10.3 as of the end of the immediately preceding fiscal quarter, and (ii) no
Default or Event of Default would exist.



-26-









 





     Section 10.7. Limitation on Sale and Leasebacks. The Company will not, and will not permit
any Subsidiary to, enter into any arrangement, directly or indirectly, whereby the Company or such
Subsidiary shall in one or more related transactions sell, transfer or otherwise dispose of any
property now owned or hereafter acquired by the Company or such Subsidiary, and then rent or lease,
as lessee, such property or any part thereof (other than pursuant to a Capital Lease) or similarly
acquire the right to possession or use of, such property or one or more properties which it intends
to use for the same purpose or purposes as such property for a period of more than nine months or
longer (a “Sale and Leaseback Transaction"); provided that the foregoing restriction shall not
apply to any Sale and Leaseback Transaction if either




     (a) the sale or transfer of property relating to such Sale and Leaseback Transaction
constitutes a sale or transfer of such property by a Subsidiary to the Company or to a
Wholly-Owned Subsidiary or by the Company to a Wholly-Owned Subsidiary; or




     (b) after giving effect to the consummation of such Sale and Leaseback Transaction and
to the application of the proceeds therefrom, the Attributable Debt to be incurred in
connection with such Sale and Leaseback Transaction shall be permitted by Section 10.3(b).



     Section 10.8. Restriction on Subsidiaries. The Company will not, and will not permit any
Significant Subsidiary to, enter into any agreement which would restrict the ability of any
Significant Subsidiary (other than the Issuer or the Subsidiary Guarantor) to pay any dividends to,
or make advances, loans or distributions to, or other investments in, the Company or any other
Subsidiary.



     Section 10.9. Nature of Business. The Company will not, and will not permit any of its
Subsidiaries to, engage in any business, if, as a result, when taken as a whole, the general nature
of the business of the Company and its Subsidiaries would be materially and substantially changed
from the general nature of the business of the Company and its Subsidiaries as described in the
Memorandum.



     Section 10.10. Transactions with Affiliates. The Company will not and will not permit any
Subsidiary to enter into directly or indirectly any Material 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 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 11. Guaranty by the Company.




     Section 11.1. Guaranty by the Company. The Company does hereby irrevocably, absolutely and
unconditionally guarantee unto the holders: (1) the full and prompt payment of the principal of,
Make-Whole Amount, if any, and interest on the Notes from time to time



-27-









 







outstanding, as and when such payments shall become due and payable, whether by lapse of time, upon
redemption or prepayment, by extension or by acceleration or declaration or otherwise (including
(to the extent legally enforceable) interest due on overdue payments of principal, Make-Whole
Amount, if any, and interest) in Federal or other immediately available funds of the United States
of America which at the time of payment or demand therefor shall be legal tender for the payment of
public and private debts, (2) the full and prompt performance and observance by the Issuer of each
and all of the obligations, covenants and agreements required to be performed or owed by the Issuer
under the terms of the Notes and this Agreement and (3) the full and prompt payment, upon demand by
any holder, of all costs and expenses, legal or otherwise (including reasonable attorneys’ fees),
if any, as shall have been expended or incurred in the protection or enforcement of any rights,
privileges or liabilities in favor of the holders under or in respect of the Notes, this Agreement
or in any action in connection therewith or herewith and in each and every case irrespective of the
validity, regularity, or enforcement of any of the Notes or this Agreement or any of the terms
thereof or any other like circumstance or circumstances.



     Section 11.2. Guaranty of Payment and Performance. This is a guarantee of payment and
performance and the Company hereby waives, to the fullest extent permitted by law, any right to
require that any action on or in respect of any Note or this Agreement be brought against the
Issuer or any other Person or that resort be had to any direct or indirect security for the Notes
or for this Agreement or any other remedy. Any holder may, at its option, proceed hereunder
against the Company in the first instance to collect monies when due, the payment of which is
guaranteed hereby, without first proceeding against the Issuer or any other Person and without
first resorting to any direct or indirect security for the Notes or for this Agreement or any other
remedy. The liability of the Company hereunder shall in no way be affected or impaired by any
acceptance by any holder of any direct or indirect security for, or other guaranties of, any
Indebtedness, liability or obligation of the Issuer or any other Person to any holder or by any
failure, delay, neglect or omission by any holder to realize upon or protect any such guarantees,
Indebtedness, liability or obligation or any notes or other instruments evidencing the same or any
direct or indirect security therefor or by any approval, consent, waiver, or other action taken, or
omitted to be taken by any such holder.



     Section 11.3. General Provisions Relating to Guaranty by the Company of the Issuer’s
Obligations under this Agreement and the Notes. (a) The Company hereby consents and agrees that
any holder or holders from time to time may, without in any manner affecting the liability of the
Company under this Agreement, and upon such terms and conditions as any such holder or holders may
deem advisable:




     (1) extend in whole or in part (by renewal or otherwise), modify, increase, change,
compromise, release or extend the duration of the time for the performance or payment of any
Indebtedness, liability or obligation of the Issuer or of any other Person secondarily or
otherwise liable for any Indebtedness, liability or obligations of the Issuer on the Notes,
or waive any Default with respect thereto, or waive, modify, amend or change any provision
of any other agreement or this Agreement (to the extent permitted by Section 18.1); or



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     (2) sell, release, surrender, modify, impair, exchange or substitute any and all
property, of any nature and from whomsoever received, held by, or for the benefit of, any
such holder as direct or indirect security for the payment or performance of any
Indebtedness, liability or obligation of the Issuer or of any other Person secondarily or
otherwise liable for any Indebtedness, liability or obligation of the Issuer on the Notes;
or




     (3) settle, adjust or compromise any claim of the Issuer against any other Person
secondarily or otherwise liable for any Indebtedness, liability or obligation of the Issuer
on the Notes.



     The Company hereby ratifies and confirms any such extension, renewal, change, sale, release,
waiver, surrender, exchange, modification, amendment, impairment, substitution, settlement,
adjustment or compromise and that the same shall be binding upon it, and hereby waives, to the
fullest extent permitted by law, any and all defenses, counterclaims or offsets which it might or
could have by reason thereof, it being understood that the Company shall at all times be bound by
this Agreement and remain liable hereunder.



     (b) The Company hereby waives, to the fullest extent permitted by law:




     (1) notice of acceptance of this Agreement by the holders or of the creation, renewal
or accrual of any liability of the Issuer, present or future, or of the reliance of such
holders upon this Agreement (it being understood that all Indebtedness, liabilities and
obligations described in Section 11.1 hereof shall conclusively be presumed to have been
created, contracted or incurred in reliance upon the execution of this Agreement); and




     (2) demand of payment by any holder from the Issuer or any other Person indebted in any
manner on or for any of the Indebtedness, liabilities or obligations hereby guaranteed; and




     (3) presentment for the payment by any holder or any other Person of the Notes or any
other instrument, protest thereof and notice of its dishonor to any party thereto and to the
Company.



     The obligations of the Company under this Agreement and the rights of any holder to enforce
such obligations by any proceedings, whether by action at law, suit in equity or otherwise, shall
not be subject to any reduction, limitation, impairment or termination, whether by reason of any
claim of any character whatsoever or otherwise and shall not be subject to any defense, set-off,
counterclaim (other than any compulsory counterclaim), recoupment or termination whatsoever.



     (c) The obligations of the Company hereunder shall be binding upon the Company and its
successors and assigns, and shall remain in full force and effect irrespective of:




     (1) the genuineness, validity, regularity or enforceability of the Notes, this
Agreement or any other agreement or any of the terms of any thereof, the continuance of



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any obligation on the part of the Issuer, or any other Person on or in respect of the Notes
or under the Agreement or any other agreement or the power or authority or the lack of power
or authority of the Issuer to issue the Notes or the Issuer to execute and deliver this
Agreement or any other agreement or to perform any of its or their obligations hereunder or
the existence or continuance of the Issuer or any other Person as a legal entity; or




     (2) any default, failure or delay, willful or otherwise, in the performance by the
Issuer or any other Person of any obligations of any kind or character whatsoever under the
Notes, this Agreement or any other agreement; or




     (3) any creditors’ rights, bankruptcy, receivership or other insolvency proceeding of
the Issuer or any other Person or in respect of the property of the Issuer or any other
Person or any merger, consolidation, reorganization, dissolution, liquidation, the sale of
all or substantially all of the assets of or winding up of the Issuer or any other Person;
or




     (4) impossibility or illegality of performance on the part of the Issuer or any other
Person of its obligations under the Notes, this Agreement or any other agreements; or




     (5) in respect of the Issuer, or any other Person, any change of circumstances, whether
or not foreseen or foreseeable, whether or not imputable to the Issuer, or any other Person,
or other impossibility of performance through fire, explosion, accident, labor disturbance,
floods, droughts, embargoes, wars (whether or not declared), civil commotion, acts of God or
the public enemy, delays or failure of suppliers or carriers, inability to obtain materials,
action of any federal or state regulatory body or agency, change of law or any other causes
affecting performance, or any other force majeure, whether or not beyond the control of the
Issuer or any other Person and whether or not of the kind hereinbefore specified; or




     (6) any attachment, claim, demand, charge, Lien, order, process, encumbrance or any
other happening or event or reason, similar or dissimilar to the foregoing, foreseen or
unforeseen, and whether or not valid, incurred by or against the Issuer or any other Person
or any claims, demands, charges or Liens of any nature, foreseen or unforeseen, incurred by
any Person, or against any sums payable in respect of the Notes or under this Agreement, so
that such sums would be rendered inadequate or would be unavailable to make the payments
herein provided; or




     (7) any order, judgment, decree, ruling or regulation (whether or not valid) of any
court of any nation or of any political subdivision thereof or any body, agency, department,
official or administrative or regulatory agency of any thereof or any other action,
happening, event or reason whatsoever which shall delay, interfere with, hinder or prevent,
or in any way adversely affect, the performance by the Issuer or any other Person of its
respective obligations under or in respect of the Notes, this Agreement or any other
agreement; or



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     (8) the failure of the Company to receive any benefit from or as a result of its
execution, delivery and performance of this Agreement; or




     (9) any failure or lack of diligence in collection or protection, failure in
presentment or demand for payment, protest, notice of protest, notice of default and of
nonpayment, any failure to give notice to the Company of failure of the Issuer, or any other
Person to keep and perform any obligation, covenant or agreement under the terms of the
Notes, this Agreement or any other agreement or failure to resort for payment to the Issuer
or to any other Person or to any other guaranty or to any property, security, Liens or other
rights or remedies; or




     (10) the acceptance of any additional security or other guaranty, the advance of
additional money to the Issuer or any other Person, the renewal or extension of the Notes or
amendments, modifications, consents or waivers with respect to the Notes, this Agreement or
any other agreement, or the sale, release, substitution or exchange of any security for the
Notes; or




     (11) any change in the ownership of any shares or other equity interests of the Issuer,
the Company or any other Person; or




     (12) any defense whatsoever that: (i) the Issuer or any other Person might have to the
payment of the Notes (principal, Make-Whole Amount, if any, or interest), other than payment
thereof in Federal or other immediately available funds, or (ii) the Issuer or any other
Person might have to the performance or observance of any of the provisions of the Notes,
this Agreement or any other agreement, whether through the satisfaction or purported
satisfaction by the Issuer, the Company or any other Person of its debts due to any cause
such as bankruptcy, insolvency, receivership, merger, consolidation, reorganization,
dissolution, liquidation, winding-up or otherwise; or




     (13) any act or failure to act with regard to the Notes, this Agreement or any other
agreement or anything which might vary the risk of the Company or any other Person; or




     (14) any other circumstance which might otherwise constitute a defense available to, or
a discharge of, the Company or any other Person in respect of the obligations of the Company
or other Person under this Agreement or any other agreement other than the final and
indefeasible payment in full of cash of the Notes;


provided that the specific enumeration of the above-mentioned acts, failures or omissions shall not
be deemed to exclude any other acts, failures or omissions, though not specifically mentioned
above, it being the purpose and intent of this Agreement that the obligations of the Company shall
be absolute, irrevocable and unconditional and shall not be discharged, impaired or varied except
by the payment of the principal of, Make-Whole Amount, if any, or any other premium, and interest
on the Notes in accordance with their respective terms whenever the same shall become due and
payable as in the Notes provided and all other sums due and payable under this Agreement, at the
place specified in and all in the manner and with the effect provided in the


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Notes and this Agreement, as each may be amended or modified from time to time. Without limiting
the foregoing, it is understood that repeated and successive demands may be made and recoveries may
be had hereunder as and when, from time to time, the Issuer shall default under or in respect of
the terms of the Notes or this Agreement and that notwithstanding recovery hereunder for or in
respect of any given default or defaults by the Issuer under the Notes or this Agreement, the
guaranty obligations of the Company hereunder shall remain in full force and effect and shall apply
to each and every subsequent default.




     (d) Subject to the deemed representations by a transferee set forth in Section 14.2, all
rights of any holder hereunder may be transferred or assigned at any time and shall be considered
to be transferred or assigned at any time or from time to time upon the transfer of any Note
whether with or without the consent of or notice to the Company under this Agreement or to the
Issuer (except as provided in Section 19 of this Agreement).



     (e) To the extent of any payments made under this Agreement, the Company shall be subrogated
to the rights of the holder upon whose Notes such payment was made, but the Company covenants and
agrees that such right of subrogation shall be subordinate in right of payment to the prior
indefeasible final payment in cash in full of all amounts due and owing by the Issuer and the
Company with respect to the Notes and this Agreement, and the Company shall not take any action to
enforce such right of subrogation, and the Company shall not accept any payment in respect of such
right of subrogation, until all amounts due and owing by the Issuer under or in respect of the
Notes and this Agreement and all amounts due and owing by the Company hereunder have indefeasibly
been finally paid in cash in full. If any amount shall be paid to the Company in violation of the
preceding sentence at any time prior to the later of the indefeasible payment in cash in full of
the Notes and all other amounts payable under the Notes and this Agreement, such amount shall be
held in trust for the benefit of the holders and shall forthwith be paid to the holders to be
credited and applied to the amounts due or to become due with respect to the Notes and all other
amounts payable under this Agreement, whether matured or unmatured. The Company acknowledges that
it has received direct and indirect benefits from the financing arrangements contemplated by this
Agreement and that the waiver set forth in this paragraph (e) is knowingly made as a result of the
receipt of such benefits.



     (f) The Company agrees that to the extent the Issuer, or any other Person makes any payment on
any Note, which payment or any part thereof is subsequently invalidated, voided, declared to be
fraudulent or preferential, set aside, recovered, rescinded or is required to be retained by or
repaid to a trustee, receiver, or any other Person under any bankruptcy code, common law, or
equitable cause, then and to the extent of such payment, the obligation or the part thereof
intended to be satisfied shall be revived and continued in full force and effect with respect to
the Company’s obligations hereunder, as if said payment had not been made. The liability of the
Company hereunder shall not be reduced or discharged, in whole or in part, by any payment to any
holder from any source that is thereafter paid, returned or refunded in whole or in part by reason
of the assertion of a claim of any kind relating thereto, including, but not limited to, any claim
for breach of contract, breach of warranty, preference, illegality, invalidity, or fraud asserted
by any account debtor or by any other Person.



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     (g) No holder shall be under any obligation: (1) to marshall any assets in favor of the
Company or in payment of any or all of the liabilities of the Issuer under or in respect of the
Notes or the obligations of the Company hereunder or (2) to pursue any other remedy that the
Company may or may not be able to pursue themselves and that may lighten the Company’s burden, any
right to which the Company hereby expressly waives.



     (h) The obligations of the Company under this Agreement rank pari passu in right of payment
with all other Indebtedness of the Company which is not secured or which is not expressly
subordinated in right of payment to any other Indebtedness of the Company.



Section 12. Events of Default.




     An “Event of Default” shall exist if any of the following conditions or events shall occur and
be continuing:




     (a) the Issuer defaults in the payment of any principal or Make-Whole Amount, 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 Issuer 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 10.1 through Section 10.7, both inclusive, and such default is not remedied within
10 Business Days; or




     (d) the Company or the Issuer 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 12) 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 or the
Issuer 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 12); or




     (e) any representation or warranty made in writing by or on behalf of the Company, the
Issuer or the Subsidiary Guarantor or by any officer of the Company, the Issuer or the
Subsidiary Guarantor in this Agreement or the Subsidiary Guaranty, as the case may be, or in
any writing furnished in connection with the transactions contemplated hereby or by the
Subsidiary Guaranty proves to have been false or incorrect in any material respect on the
date as of which made; or




     (f) (i) the Company, the Issuer, the Subsidiary Guarantor or any Significant 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 Indebtedness other than the Notes that
is outstanding in an aggregate principal amount of at least $10,000,000 beyond any period of
grace provided with respect thereto, or (ii) the



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Company, the Issuer, the Subsidiary Guarantor or any Significant Subsidiary is in default in
the performance of or compliance with any evidence of Indebtedness other than the Notes in
an aggregate outstanding principal amount of at least $10,000,000 or of any mortgage,
indenture or agreement relating thereto or any other condition exists, and as a consequence
of such default or condition such Indebtedness has become, or has been declared, due and
payable before its stated maturity or before its regularly scheduled dates of payment; or




     (g) the Company, the Issuer, the Subsidiary Guarantor or any Significant 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, the Issuer, the Subsidiary Guarantor or any
Significant Subsidiary, 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, the Issuer, the Subsidiary Guarantor or any Significant Subsidiary, or any
such petition shall be filed against the Company, the Issuer, the Subsidiary Guarantor or
any Significant Subsidiary 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 5% of
Consolidated Total Assets are rendered against one or more of the Company, the Issuer, the
Subsidiary Guarantor or any Significant Subsidiary and which judgments are not, within 60
days after entry thereof, bonded, discharged or stayed pending appeal, or are not discharged
within 60 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 Section 4042 of ERISA to terminate
or appoint a trustee to administer any Plan or the PBGC shall have notified the Company, the
Issuer 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



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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 any Plan, (v) the Company, the Issuer or any ERISA Affiliate withdraws from
any Multiemployer Plan, or (vi) the Company, the Issuer or any Subsidiary establishes or
amends any employee welfare benefit plan that provides post-employment welfare benefits in a
manner that could 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, would reasonably be expected to have a
Material Adverse Effect; or




     (k) the Company fails to comply with any term or provision of Section 11 of this
Agreement or the Subsidiary Guarantor fails to comply with any term or provision of the
Subsidiary Guaranty, or for any reason any provision of Section 11 of this Agreement or the
Subsidiary Guaranty ceases to be in full force and effect, including, without limitation, a
determination by any Governmental Authority that the Guaranty by the Company set forth in
Section 11 of this Agreement or the Subsidiary Guaranty is invalid, void or unenforceable,
or the Company or the Subsidiary Guarantor shall contest or deny in writing the
enforceability of any its guaranty obligations set forth in Section 11 of this Agreement or
the Subsidiary Guaranty, as the case may be.


As used in Section 12(j), the term “employee welfare benefit plan” shall have the meaning assigned
to such terms in section 3 of ERISA.




Section 13. Remedies on Default, Etc.




     Section 13.1. Acceleration. (a) If an Event of Default with respect to the Company, the
Issuer, the Subsidiary Guarantor or any Significant Subsidiary described in paragraph (g) or (h) of
Section 12 (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, any holder or holders of
more than 50% in principal amount of the Notes at the time outstanding may at any time at its or
their option, by notice or notices to the Company and the Issuer, 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 12 has occurred and
is continuing, any holder of Notes at the time outstanding affected by such Event of Default may at
any time, at its option, by notice or notices to the Company and the Issuer, declare all the Notes
held by it to be immediately due and payable.



Upon any Note becoming due and payable under this Section 13.1, whether automatically or by
declaration, such Note will forthwith mature and the entire unpaid principal amount of such Note,
plus all accrued and unpaid interest thereon and the Make-Whole Amount, if any, in respect of such
principal amount (to the full extent permitted by applicable law) shall all be



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immediately due and payable, in each and every case without presentment, demand, protest or further
notice, all of which are hereby waived. The Company and the Issuer acknowledge, 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 and the Issuer (except as herein specifically provided for), and that
the provision for payment of a Make-Whole Amount by the Issuer 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 13.2. 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 13.1, 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 13.3. Rescission. At any time after any Notes have been declared due and payable
pursuant to clause (b) or (c) of Section 13.1, the holders of more than 50% in aggregate principal
amount of the Notes then outstanding, by written notice to the Company and the Issuer, may rescind
and annul any such declaration and its consequences if (a) the Issuer has paid all overdue interest
on the Notes, all principal of, and Make-Whole Amount, 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, Make-Whole Amount, 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 18, and (c) no judgment or decree has been
entered for the payment of any monies due pursuant hereto or to any Notes. No rescission and
annulment under this Section 13.3 will extend to or affect any subsequent Event of Default or
Default or impair any right consequent thereon.



     Section 13.4. 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 and the Issuer under Section 16, the Issuer 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 13, including, without limitation, the
reasonable attorneys’ fees, expenses and disbursements for the holders as set forth in Section 16.



Section 14. Registration; Exchange; Substitution of Notes.




     Section 14.1. Registration of Notes. The Issuer 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



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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 Issuer shall not be
affected by any notice or knowledge to the contrary. The Issuer 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 14.2. Transfer and Exchange of Notes. Upon surrender of any Note at the principal
executive office of the Issuer 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 its attorney duly authorized in
writing and accompanied by the address for notices of each transferee of such Note or part
thereof), the Issuer shall execute and deliver not more than five Business Days following surrender
of such Note, at the Issuer’s expense (except as provided below), one or more new Notes (as
requested by the holder thereof) of the same Series 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 the
Note of such Series originally issued hereunder. 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 Issuer 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 $100,000,
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 $100,000. 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 Sections 6.1 and 6.2, provided that with respect to Section
6.2 such holder may (in reliance upon information provided by the Issuer, which shall not be
unreasonably withheld) make a representation to the effect that the purchase by such holder of any
Note will not constitute a non-exempt prohibited transaction under Section 406(a) of ERISA.



     The Notes have not been registered under the Securities Act or under the securities laws of
any state and may not be transferred or resold unless registered under the Securities Act and all
applicable state securities laws or unless an exemption from the requirement for such registration
is available.



     Section 14.3. Replacement of Notes. Upon receipt by the Issuer 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 another holder of a Note with a minimum net worth of at least $50,000,000, such Person’s
own unsecured agreement of indemnity shall be deemed to be satisfactory), or



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     (b) in the case of mutilation, upon surrender and cancellation thereof,


The Issuer at its own expense shall execute and deliver not more than five Business Days following
satisfaction of such conditions, in lieu thereof, a new Note of the same Series, 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 15. Payments on Notes.




     Section 15.1. Place of Payment. Subject to Section 15.2, payments of principal, Make-Whole
Amount, if any, and interest becoming due and payable on the Notes shall be made in New York,
New York at the principal office of JP Morgan Chase Bank in such jurisdiction. The Issuer 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 Issuer in such jurisdiction or
the principal office of a bank or trust company in such jurisdiction.



     Section 15.2. Home Office Payment. So long as any Purchaser or such Purchaser’s nominee shall
be the holder of any Note, and notwithstanding anything contained in Section 15.1 or in such Note
to the contrary, the Issuer will pay all sums becoming due on such Note for principal, Make-Whole
Amount, if any, and interest by the method and at the address specified for such purpose for such
Purchaser on Schedule A hereto, or by such other method or at such other address as such Purchaser
shall have from time to time specified to the Issuer 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 Issuer made concurrently with or reasonably promptly after payment or
prepayment in full of any Note, such Purchaser shall surrender such Note for cancellation,
reasonably promptly after any such request, to the Issuer at its principal executive office or at
the place of payment most recently designated by the Issuer pursuant to Section 15.1. Prior to any
sale or other disposition of any Note held by any Purchaser or such Person’s nominee, such Person
will, at its 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 Issuer in exchange for a
new Note or Notes pursuant to Section 14.2. The Issuer will afford the benefits of this
Section 15.2 to any Institutional Investor that is the direct or indirect transferee of any Note
purchased by a Purchaser under this Agreement and shall be deemed to have made the same agreement
relating to such note as such Purchaser has made in this Section 15.2.



Section 16. Expenses, Etc.




     Section 16.1. Transaction Expenses. Whether or not the transactions contemplated hereby are
consummated, the Company and the Issuer jointly and severally agree to pay all reasonable costs and
expenses (including reasonable attorneys’ fees of one special counsel for the Purchasers and, if
reasonably required, local or other counsel) incurred by the Purchasers and the holders of Notes in
connection with such transactions and in connection with any amendments, waivers or consents under
or in respect of this Agreement, the Notes or the Subsidiary Guaranty (whether or not such
amendment, waiver or consent becomes effective),



-38-









 







including, without limitation: (a) the reasonable costs and expenses incurred in enforcing or
defending (or determining whether or how to enforce or defend) any rights under this Agreement, the
Notes or the Subsidiary Guaranty or in responding to any subpoena or other legal process or
informal investigative demand by any Governmental Authority issued in connection with this
Agreement, the Notes or the Subsidiary Guaranty, or by reason of being a holder of any Note, and
(b) the reasonable 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 the
Subsidiary Guaranty. The Company and the Issuer jointly and severally agree that they will pay,
and will save each Purchaser and each other holder of a Note harmless from, all claims in respect
of any reasonable fees, costs or expenses if any, of brokers and finders (other than those retained
by the Purchasers).



     Section 16.2. Survival. The obligations of the Company and the Issuer under this Section 16
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 17. Survival of Representations and Warranties; Entire Agreement.




     All representations and warranties contained herein shall survive the execution and delivery
of this Agreement and the related Notes, the purchase or transfer by any Purchaser of any such Note
or portion thereof or interest therein and the payment of any Note may be relied upon by any
subsequent holder of any such Note, regardless of any investigation made at any time by or on
behalf of any Purchaser or any other holder of any such Note. All statements contained in any
certificate or other instrument delivered by or on behalf of the Company or the Issuer pursuant to
this Agreement shall be deemed representations and warranties of the Company or the Issuer under
this Agreement. Subject to the preceding sentence, this Agreement and the Notes embody the entire
agreement and understanding between the Purchasers, the Company and the Issuer and supersede all
prior agreements and understandings relating to the subject matter hereof.



Section 18. Amendment and Waiver.




     Section 18.1. Requirements. 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, the Issuer 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 22 hereof, or
any defined term (as it is used in any such Section), will be effective as to any holder of Notes
unless consented to by such holder of Notes in writing, and (b) no such amendment or waiver may,
without the written consent of all of the holders of Notes at the time outstanding affected
thereby, (i) subject to the provisions of Section 13 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 Make-Whole Amount 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, (iii) amend any of



-39-









 







Sections 8, 12(a), 12(b), 13, 18 or 21, or (iv) reduce or alter the scope of the Guaranty by the
Company of the obligations of the Issuer in respect of this Agreement and the Notes.



     Section 18.2. Solicitation of Holders of Notes.



          (a) Solicitation. The Company and the Issuer 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 and the Issuer will deliver executed or true
and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this
Section 18 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. Neither the Company nor the Issuer will 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 or other credit enhancement, to any holder of Notes of any Series as
consideration for or as an inducement to the entering into by such holder of Notes of any waiver or
amendment of any of the terms and provisions hereof or of any Note or the Subsidiary Guaranty
unless such remuneration is concurrently paid, or security or other credit enhancement is
concurrently granted, on the same terms, ratably to each holder of Notes of any affected Series
then outstanding even if such holder did not consent to such waiver or amendment.




          (c) Consent in Contemplation of Transfer. Any consent made pursuant to this Section 18.2 by
the holder of any Note that has transferred or has agreed to transfer such Note to the Company, the
Issuer, any Subsidiary or any Affiliate of the Company and has provided or has agreed to provide
such written consent as a condition to such transfer shall be void and of no force or effect except
solely as to such holder, and any amendments effected or waivers granted or to be effected or
granted that would not have been or would not be so effected or granted but for such consent (and
the consents of all other holders of Notes that were acquired under the same or similar conditions)
shall be void and of no force or effect except solely as to such transferring holder.




     Section 18.3. Binding Effect, Etc. Any amendment or waiver consented to as provided in this
Section 18 applies equally to all holders of Notes and is binding upon them and upon each future
holder of any Note and upon the Company and the Issuer 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 or the Issuer, as
the case may be, and the holder of any Note nor any delay in exercising any rights hereunder, under
any Note or under the Subsidiary Guaranty 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.



-40-









 





     Section 18.4. 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, the
Notes or the Subsidiary Guaranty, or have directed the taking of any action provided herein, in the
Notes or in the Subsidiary Guaranty 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, the Issuer or any of their respective Affiliates shall be deemed
not to be outstanding.



Section 19. Notices.




     All notices and communications provided for hereunder shall be in writing and sent (a) by
telefacsimile 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 a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:




     (i) if to a Purchaser or such Purchaser’s nominee, to such Purchaser or such
Purchaser’s nominee at the address specified for such communications in Schedule A to this
Agreement, or at such other address as such Purchaser or such Purchaser’s nominee shall have
specified to the Issuer in writing pursuant to this Section 19;




     (ii) if to any other holder of any Note, to such holder at such address as such other
holder shall have specified to the Issuer in writing pursuant to this Section 19; or




     (iii) if to the Company or the Issuer, to each of the company and the Issuer at its
address set forth at the beginning hereof, in each case to the attention of Chief Financial
Officer, or at such other address as the Company or the Issuer shall have specified to the
holder of each Note in writing.


Notices under this Section 19 will be deemed given only when actually received.



Section 20. 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
each Purchaser at the Closing (except the Notes themselves), and (c) financial statements,
certificates and other information previously or hereafter furnished to each Purchaser, may be
reproduced by such Purchaser by any photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and such Purchaser may destroy any original document so
reproduced. The Company and the Issuer agree and stipulate 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 such Purchaser in the regular course of business) and any
enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in
evidence. This Section 20 shall not prohibit the Company, the Issuer or any other holder of



-41-









 




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 21. Confidential Information.



     For the purposes of this Section 21, “Confidential Information” means information delivered to
any Purchaser 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 such Purchaser 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 such Purchaser prior to the
time of such disclosure, (b) subsequently becomes publicly known through no act or omission by such
Purchaser or any Person acting on such Purchaser’s behalf, (c) otherwise becomes known to such
Purchaser other than through disclosure by the Company or any Subsidiary or (d) constitutes
financial statements delivered to such Purchaser under Section 7.1 that are otherwise publicly
available. Each Purchaser will maintain the confidentiality of such Confidential Information in
accordance with procedures adopted by such Purchaser in good faith to protect confidential
information of third parties delivered to such Purchaser, provided that such Purchaser may deliver
or disclose Confidential Information to (i) such Purchaser’s directors, trustees, officers,
employees, agents, attorneys and affiliates (to the extent such disclosure reasonably relates to
the administration of the investment represented by such Purchaser’s Notes), (ii) such Purchaser’s
financial advisors and other professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this Section 21, (iii) any other holder
of any Note, (iv) any Institutional Investor to which such Purchaser sells or offers 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 21),
(v) any Person from which such Purchaser offers to purchase any security of the Company or the
Issuer (if such Person has agreed in writing prior to its receipt of such Confidential Information
to be bound by the provisions of this Section 21), (vi) any federal or state regulatory authority
having jurisdiction over such Purchaser, (vii) the National Association of Insurance Commissioners
or any similar organization, or any nationally recognized rating agency that requires access to
information about such Purchaser’s 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 such Purchaser, (x) in response to any subpoena or other legal
process, (y) in connection with any litigation to which such Purchaser is a party or (z) if an
Event of Default has occurred and is continuing, to the extent such Purchaser 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 such Purchaser’s 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 21 as though it were a party to this Agreement. On
reasonable request by the Company or the Issuer 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 or the Issuer embodying the provisions of this
Section 21.



-42-









 





Section 22. Substitution of Purchaser.




     Each Purchaser shall have the right to substitute any one of such Purchaser’s Affiliates as
the purchaser of the Notes that such Purchaser has agreed to purchase hereunder, by written notice
to the Company and the Issuer, which notice shall be signed by both such Purchaser and such
Purchaser’s 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 “Purchaser”
is used in this Agreement (other than in this Section 22), such word shall be deemed to refer to
such Affiliate in lieu of such Purchaser. In the event that such Affiliate is so substituted as a
purchaser hereunder and such Affiliate thereafter transfers to such Purchaser all of the Notes then
held by such Affiliate, upon receipt by the Company and the Issuer of notice of such transfer,
wherever the word “Purchaser” is used in this Agreement (other than in this Section 22), such word
shall no longer be deemed to refer to such Affiliate, but shall refer to such Purchaser, and such
Purchaser shall have all the rights of an original holder of the Notes under this Agreement.



Section 23. Miscellaneous.




     Section 23.1. 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 23.2. Payments Due on Non-Business Days. Anything in this Agreement or the Notes to
the contrary notwithstanding, any payment of principal of or Make-Whole Amount 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 23.3. 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 23.4. 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 23.5. 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



-43-









 







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 23.6. 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.



* * * * *





-44-











 






     The execution hereof by the Purchasers shall constitute a contract among the Company, the
Issuer and the Purchasers for the uses and purposes hereinabove set forth. This Agreement may be
executed in any number of counterparts, each executed counterpart constituting an original but all
together only one agreement.



	 	 	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Bob Evans Farms, Inc.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	/s/ Tod P. Spornhaver	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	Tod P. Spornhaver	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	Senior Vice President-Finance, Controller and Assistant Treasurer	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BEF Holding Co., Inc.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	/s/ Tod P. Spornhaver	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	Tod P. Spornhaver	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	Vice President, Treasurer and Assistant Secretary	 	 
	 

	 	 	 	 	 	 	 	 





-45-









 








Accepted as of the date first written above.




	 	 	 	 	 	 	 	 	 
	 	 	The Prudential Insurance Company of America 

Pruco life Insurance Company	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	/s/ David Quackenbush	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	David Quackenbush	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	Vice President	 	 
	 

	 	 	 	 	 	 	 	 





 









 










Accepted as of the date first written above.




	 	 	 	 	 	 	 	 	 
	 	 	Jackson National life
Insurance Company	 	 
	 
	 	 	 	 	 	 	 	 
	 

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

	 	By	 	/s/ Brian Manczak	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	Brian Manczak	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	Assistant Vice President	 	 
	 

	 	 	 	 	 	 	 	 





 









 





Information Relating to Purchasers




	 	 	 
	

	 	Principal Amount of 
	Name and Address of Purchaser

	 	Series A Notes to Be
	 

	 	Purchased
	 
	 	 
	The Prudential Insurance Company of America

	 	$33,750,000
	c/o Prudential Capital Group
	 	 
	Two Prudential Plaza, Suite 5600
	 	 
	180 N. Stetson Avenue
	 	 
	Chicago, Illinois 60601
	 	 
	Attention: Managing Director
	 	 





Schedule a

(to Note Purchase Agreement)




 









 








	 	 	 	 	 
	

	 	Principal Amount of 

	Name and Address of Purchaser

	 	Series A Notes to Be

	 

	 	Purchased

	 
	 	 	 	 
	Pruco Life Insurance Company

	 	$	6,250,000	 
	c/o Prudential Capital Group
	 	 	 	 
	Two Prudential Plaza, Suite 5600
	 	 	 	 
	180 N. Stetson Avenue
	 	 	 	 
	Chicago, Illinois 60601
	 	 	 	 
	Attention: Managing Director
	 	 	 	 






 









 








	 	 	 
	

	 	Principal Amount of
	Name and Address of Purchaser

	 	Series B Notes to Be
	 

	 	Purchased
	 
	 	 
	Jackson National Life Insurance Company

	 	$15,000,000
	One Corporate Way
	 	 
	Lansing, Michigan 48951
	 	 





 









 








	 	 	 
	

	 	Principal Amount of
	Name and Address of Purchaser

	 	Series B Notes to Be
	 

	 	Purchased
	 
	 	 
	Jackson National Life Insurance Company

	 	$10,000,000
	One Corporate Way
	 	 
	Lansing, Michigan 48951
	 	 





 









 








	 	 	 
	

	 	Principal Amount of
	Name and Address of Purchaser

	 	Series B Notes to Be
	 

	 	Purchased
	 
	 	 
	Jackson National Life Insurance Company

	 	$5,000,000
	One Corporate Way
	 	 
	Lansing, Michigan 48951
	 	 





 









 





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:



     “2004 Senior Notes” means the notes issued by the Issuer under the Note Purchase Agreement
dated July 28, 2004 entered into among the Company, the Issuer and the Purchasers party thereto.



     “Affiliate” means, at any time, and with respect to any Person, 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. 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.



     “Attributable Debt” means in connection with any Sale and Leaseback Transaction, as of the
date of any determination thereof, the greater of (a) the Fair Market Value of the property which
is the subject of such Sale and Leaseback Transaction at or about the time of the consummation of
such Sale and Leaseback Transaction and (b) the present value of the aggregate amount of Lease
Rentals due and to become due (discounted from the respective due dates thereof at the interest
rate implicit in such Lease Rentals, if known, and otherwise at the rate of 8% per annum) under the
lease relating to such Sale and Leaseback Transaction.



     “Business Day” means (a) for the purposes of Section 8.2(c) only, any day other than a
Saturday, a Sunday or a day on which commercial banks in New York City are required or authorized
to be closed, and (b) for the purposes of any other provision of this Agreement, any day other than
a Saturday, a Sunday or a day on which commercial banks in Cleveland, Ohio or New York, New York
are required or authorized to be closed.



     “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.



     “Capital Lease Obligation” means, with respect to any Person and a Capital Lease, the amount
of the obligation of such Person as the lessee under such Capital Lease which would, in accordance
with GAAP, appear as a liability on a balance sheet of such Person.



     “Change in Control” is defined in Section 8.5(g).



     “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.



Schedule a

(to Note Purchase Agreement)




 









 





     “Company” means Bob Evans Farms, Inc., a Delaware corporation, and its successors and assigns
in accordance with the provisions of this Agreement.



     “Confidential Information” is defined in Section 21.



     “Consolidated Capitalization” means, at any time, the sum of (i) Consolidated Indebtedness and
(ii) Consolidated Net Worth.



     “Consolidated Income Available for Fixed Charges” means, with respect to any period,
Consolidated Net Income for such period plus all amounts deducted in the computation thereof on
account of (a) Fixed Charges and (b) taxes imposed on or measured by income or excess profits.



     “Consolidated Indebtedness” means, at any time, the total amount of all Indebtedness of the
Company and its Subsidiaries determined on a consolidated basis in accordance with GAAP.



     “Consolidated Net Income” means, for any period, the net income (or loss) of the Company and
its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP
consistently applied.



     “Consolidated Net Worth” means as of any date of determination the consolidated stockholders’
equity of the Company and its Subsidiaries, as determined in accordance with GAAP, after
eliminating all amounts properly attributable to minority interests, if any, in the stock and
surplus of Subsidiaries.



     “Consolidated Total Assets” means, as of any date of determination, the total amount of all
assets of the Company and its Subsidiaries, determined on a consolidated basis in accordance with
GAAP.



     “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 the greater of (i) 2% per annum above the
rate of interest referred to in clause (a) of the first paragraph of the Notes of such Series or
(ii) 2% over the rate of interest publicly announced by National City Bank in Cleveland, Ohio as
its “base” or “prime” rate.



     “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.



B-2









 





     “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 or the Issuer, as the case may be, under section 414 of
the Code.



     “Event of Default” is defined in Section 12.



     “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 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),
as reasonably determined in the good faith opinion of the Company’s or any Subsidiary’s board of
directors or one or more officers to whom authority to determine such value has been delegated by
such board of directors.



     “Fixed Charges” means, with respect to any period, the sum of (a) Interest Charges for such
period and (b) Lease Rentals for such period.



     “Fixed Charges Coverage Ratio” means, at any time, the ratio of (a) Consolidated Income
Available for Fixed Charges for the period of four consecutive fiscal quarters ending on, or most
recently ended prior to, such time to (b) Fixed Charges for such period.



     “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



B-3









 







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 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;




     (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 other
substances that might pose a hazard to health and 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, but not
limited to, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum,
petroleum products, lead based paint, radon gas or similar restricted, prohibited or penalized
substances.



     “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 14.1.



     “Indebtedness” means, with respect to any Person, without duplication,




     (a) its liabilities for borrowed money and its redemption obligations in respect of
mandatorily redeemable preferred stock;




     (b) its liabilities for the deferred purchase price of property acquired by such Person
(excluding accounts payable arising in the ordinary course of business but including,
without limitation, all liabilities created or arising under any conditional sale or other
title retention agreement with respect to any such property);




B-4












 






     (c) its Capital Lease Obligations;




     (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) Guaranties of such Person with respect to liabilities of a type described in any of
clauses (a) through (d) hereof.



     Indebtedness 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.



     “Institutional Investor” means (a) any original purchaser of a Note, (b) any holder of more
than $5,000,000 of the aggregate principal amount of the Notes of the applicable Series 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 Charges” means, with respect to any period, the sum (without duplication) of the
following (in each case, eliminating all offsetting debits and credits between the Company and its
Subsidiaries and all other items required to be eliminated in the course of the preparation of the
consolidated financial statements of the Company and its Subsidiaries in accordance with GAAP): (i)
all interest in respect of Indebtedness of the Company and its Subsidiaries (including imputed
interest on Capital Lease Obligations) deducted in determining Consolidated Net Income for such
period, together with all interest capitalized or deferred during such period and not deducted in
determining Consolidated Net Income for such period, and (ii) all debt discount and expense
amortized or required to be amortized in the determination of Consolidated Net Income for such
period.



     “Issuer” means BEF Holding Co., Inc., a Delaware corporation, and its successors and
assigns in accordance with the provisions of this Agreement.



     “Lease Rentals” means, with respect to any period, the sum of the minimum amount of rental and
other obligations required to be paid during such period by the Company and its Subsidiaries as
lessee under all leases of real or personal property (other than Capital Leases) excluding any
amounts required to be paid by the lessee (whether or not therein designated as rental or
additional rental): (i) which are on account of maintenance, repairs, insurance, taxes,
assessments, water rates and similar charges, or (ii) which are based on profits, revenues or sales
realized by the lessee from the leased property or otherwise based on the performance of the
lessee.



     “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



B-5









 







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).



     “Make-Whole Amount” is defined in Section 8.2.



     “Material” means material in relation to the business, operations, affairs, financial
condition, assets or properties of the Company, the Issuer and their Subsidiaries taken as a whole.



     “Material Adverse Effect” means a material adverse effect on (a) the business, operations,
affairs, financial condition, assets or properties of the Company, the Issuer and their
Subsidiaries taken as a whole, or (b) the ability of the Company, the Issuer or a Subsidiary
Guarantor to perform its respective obligations under this Agreement, the Notes and the Subsidiary
Guaranty, or (c) the validity or enforceability of this Agreement or the Notes or the Subsidiary
Guaranty.



     “Memorandum” is defined in Section 5.3.



     “Mimi’s Café, LLC” means Mimi’s Café, LLC, a Delaware limited liability company, and its
successors and assigns in accordance with the provisions of this Agreement.



     “Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term is defined in
Section 4001(a)(3) of ERISA).



     “Net Proceeds” means with respect to any sale of property by any Person an amount equal to
(a) the aggregate amount of the consideration received by such Person in respect of such sale
(valued at the Fair Market Value of such consideration at the time of such sale), minus (b) the sum
of (i) all out-of-pocket costs and expenses actually incurred by such Person in connection with
such sale, and (ii) all state, federal and foreign taxes incurred, or to be incurred, by such
Person in connection with such sale.



     “Notes” is defined in Section 1.



     “Officer’s Certificate” means a certificate of a Senior Financial Officer or of any other
officer of the Company or the Issuer, as the case may be, whose responsibilities extend to the
subject matter of such certificate.



     “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any
successor thereto.



     “Permitted Reincorporation” means a transaction or series of contemporaneous transactions
pursuant to which the Company voluntarily reincorporates in a new jurisdiction so long as after
giving effect thereto substantially all of the capital stock of the successor corporation
immediately following such transaction is held in substantially the same percentage by
substantially the same holders of the Company’s capital stock immediately prior to such
transaction.



B-6









 





     “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, the
Issuer or any ERISA Affiliate or with respect to which the Company, the Issuer or any ERISA
Affiliate may have any liability.



     “Principal Bank Facility” means each of (a) the Master Grid Note dated as of December 19, 2007
between the Issuer and National City Bank and the Master Grid Note dated as of July 19, 2007
between the Issuer and National City Bank, so long as the amount available for borrowing under such
notes is not less than $10,000,000, (b) the Line of Credit Note dated as of October 1, 2007 between
the Issuer and JPMorgan Chase Bank, N.A., so long as the amount available for borrowing under such
note is not less than $10,000,000, and (c) any banking facility, credit facility or similar loan
facility provided to the Company and/or any Subsidiary entered into with a lender or a syndicate of
lenders and relating to the borrowing of money therefrom with amounts available for borrowing
thereunder of $10,000,000 or more, and, in each case, as the same may be amended, supplemented or
modified from time to time and any successor or replacement credit facility; provided that
“Principal Bank Facility” shall not include (a) any credit facilities constituting Capital Lease
Obligations, or (b) any term loan credit facility secured by a Lien on the real property of the
Company and/or its Subsidiaries so long as at all times there is unsecured and committed revolving
credit facilities with aggregate available commitment at least equal to the aggregate outstanding
principal amount of all such term loan facilities.



     “Priority Indebtedness” means (without duplication), as of the date of any determination
thereof, (i) all unsecured Indebtedness of Subsidiaries of the Company (including all Guaranties by
Subsidiaries of Indebtedness but excluding (y) unsecured Indebtedness of the Issuer and the
Subsidiary Guarantor, and (z) Indebtedness of a Subsidiary owing to the Company, the Issuer or a
Wholly-Owned Subsidiary), (ii) all Indebtedness of the Company and its Subsidiaries secured by
Liens (excluding Indebtedness secured by Liens permitted by subparagraphs (a) through (i),
inclusive, of Section 10.4), and (iii) all Attributable Indebtedness of the Company and its
Subsidiaries.



     “property” or “properties” means, unless otherwise specifically limited, real or personal
property of any kind, tangible or intangible, choate or inchoate.



     “Purchasers” means the purchasers of the Notes named in Schedule A hereto.



     “QPAM Exemption” means Prohibited Transaction Class Exemption 84-14 issued by the United
States Department of Labor.



B-7









 





     “Required Holders” means, at any time, the holders of not less than 51% in principal amount of
the Notes at the time outstanding (exclusive of Notes then owned by the Company, the Issuer or any
of their respective Affiliates).



     “Responsible Officer” means any Senior Financial Officer and any other officer of the Company
or the Issuer, as the case may be, with responsibility for the administration of the relevant
portion of this Agreement.



     “Sale and Leaseback Transaction” has the meaning set forth in Section 10.7.



     “Securities Act” means the Securities Act of 1933, as amended from time to time.



     “Senior Financial Officer” means the chief financial officer, principal accounting officer,
treasurer, assistant treasurer or controller of the Company or the Issuer, as the case may be.



     “Senior Indebtedness” shall mean, as of the date of any determination thereof, all
Consolidated Indebtedness, other than Subordinated Indebtedness.



     “Series” means any series of Notes issued pursuant to this Agreement.



     “Series A Notes” is defined in Section 1 of this Agreement.



     “Series B Notes” is defined in Section 1 of this Agreement.



     “Significant Subsidiary” means, at any time, any Subsidiary that would at such time constitute
a “significant subsidiary” (as such term is defined in Regulation S-X of the Securities Exchange
Commission) of the Company.



     “Subordinated Indebtedness” shall mean all unsecured Indebtedness of the Company and the
Issuer which shall contain or have applicable thereto subordination provisions providing for the
subordination thereof to other Indebtedness of the Company or the Issuer, as the case may be,
(including, without limitation, the obligations of the Company and the Issuer under this Agreement
and the Notes).



     “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 or joint
venture 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, and notwithstanding
anything herein to the contrary, the term “Subsidiary” with respect to the Company shall only



B-8









 







include any such corporation, association or other business entity that the Company accounts
for on a consolidated basis in accordance with GAAP.



     “Subsidiary Guarantor” means Mimi’s Café, LLC.



     “Subsidiary Guaranty” is defined in Section 2.2 hereof.



     “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.




B-9









 








Subsidiaries of the Company, Ownership of Subsidiary Stock




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Name of Entity

	 	 	 	Type and State of Organization
	 	 	 	Ownership
	 	 	 	% Ownership

	Bob Evans Farms, Inc.

	 	:
	 	a Delaware corporation
	 	:
	 	Public company
	 	:
	 	 	N/A	 
	BEF Holding Co., Inc.

	 	:
	 	a Delaware corporation
	 	:
	 	Bob Evans Farms, Inc. (DE)
	 	:
	 	 	100	%
	Bob Evans Farms, Inc.

	 	:
	 	an Ohio corporation
	 	:
	 	BEF Holding Co., Inc.
	 	:
	 	 	100	%
	Bob Evans Transportation Company, LLC

	 	:
	 	an Ohio limited liability company
	 	:
	 	Bob Evans Farms, Inc. (OH)
	 	:
	 	 	100	%
	Bob Evans Restaurants of Michigan, Inc.

	 	:
	 	a Delaware corporation
	 	:
	 	Bob Evans Farms, Inc. (OH)
	 	:
	 	 	100	%
	Bob Evans Restaurants, Inc.

	 	:
	 	an Ohio corporation
	 	:
	 	Bob Evans Restaurants of Michigan, Inc.
	 	:
	 	 	100	%
	BEF RE Holding Co., Inc.

	 	:
	 	a Delaware corporation
	 	:
	 	Bob Evans Restaurants, Inc.
	 	:
	 	 	100	%
	BEF REIT, Inc.

	 	:
	 	an Ohio corporation
	 	:
	 	BEF RE Holding Co., Inc.
	 	:
	 	100% of common

	 

	 	:
	 	 	 	:
	 	 	 	:
	 	shares and 85%

	 

	 	 	 	 	 	 	 	 	 	 	 	(1020 shares) of

	 

	 	 	 	 	 	 	 	 	 	 	 	the preferred

	 

	 	 	 	 	 	 	 	 	 	 	 	shares*

	Owens Foods, Inc.

	 	:
	 	a Texas corporation
	 	:
	 	BEF Holding Co., Inc.
	 	:
	 	 	100	%
	BEF Aviation Co., Inc.

	 	:
	 	an Ohio corporation
	 	:
	 	BEF Holding Co., Inc.
	 	:
	 	 	100	%
	Mimi’s Cafe, LLC

	 	:
	 	a Delaware limited liability company
	 	:
	 	Bob Evans Farms, Inc. (DE)
	 	:
	 	 	100	%
	SWH Corporation

	 	:
	 	a California corporation
	 	:
	 	Mimi’s Cafe, LLC
	 	:
	 	 	100	%
	Mimi’s Café Kansas, Inc.

	 	:
	 	a Kansas corporation
	 	:
	 	SWH Corporation
	 	:
	 	 	100	%
	SWH Too, LLC

	 	:
	 	a Delaware limited liability company
	 	:
	 	SWH Corporation
	 	:
	 	 	100	%
	SWH Texas, Inc.

	 	:
	 	a Delaware corporation
	 	:
	 	SWH Corporation
	 	:
	 	 	100	%
	SWH Oklahoma, Inc.

	 	:
	 	an Oklahoma corporation
	 	:
	 	SWH Corporation
	 	:
	 	 	100	%
	Mimi’s Café of Rogers, Inc.

	 	 	 	an Arkansas non-profit mutual
benefit corporation
	 	 	 	SWH Corporation
	 	 	 	 	100	%
	SWH Howard Maryland, Inc.

	 	 	 	a Maryland corporation
	 	 	 	SWH Corporation
	 	 	 	 	100	%
	SWH Charles Maryland, Inc.

	 	 	 	a Maryland corporation
	 	 	 	SWH Corporation
	 	 	 	 	100	%
	SWH Liquor Company

	 	 	 	a Texas corporation
	 	 	 	SWH Texas, Inc.
	 	 	 	 	100	%





 




			
	*	 	Remainder of preferred shares are owned by Bob Evans Farms, Inc. (Ohio) (5% or 60 shares) and employees of Bob Evans Farms, Inc. (Ohio)
and their family members (10% or 120 shares).




     There are no liens on any ownership interest of any Subsidiary.



Schedule 5.4 

(to Note Purchase Agreement)




 









 





Financial Statements



The following financial statements delivered with the Memorandum:



Audited consolidated balance sheet, statements of income, stockholders’ equity and cash flows for
fiscal year end April 27, 2007.



Unaudited consolidated balance sheet and statements of income for fiscal quarters ending July 27,
2007, October 26, 2007 and January 25, 2008 and unaudited consolidated statements of cash flow for
that portion of fiscal year 2008 ending July 27, 2007, October 26, 2007 and January 25, 2008.



The following financial statements delivered with the Annual Report on form 10K — Fiscal Year End
April 25, 2008.



Audited consolidated balance sheets, statements of income, stockholders’ equity and cash flows for
fiscal year end April 25, 2008.




Schedule 5.5

(to Note Purchase Agreement)




 









 





Litigation; Observance of Statutes and Orders



None.




Schedule 5.8

(to Note Purchase Agreement)




 









 





Licenses, Permits, Etc.



None.




Schedule 5.11

(to Note Purchase Agreement)




 









 





Existing Indebtedness (outstanding as of July 22, 2008)




Indebtedness of the Issuer:



2004 Senior Notes  — $160,000,000 outstanding.



$150,000,000* demand line of credit with National City Bank  — $114,200,000 outstanding.



$30,000,000 revolving line of credit with Bank One (JPMorganChase)  — $26,800,000 outstanding.



Indebtedness of BEF REIT, Inc.:



$150,000,000* demand line of credit with National City Bank — $0 outstanding.



Indebtedness of the Company:



All of the above Indebtedness of the Issuer and BEF REIT, Inc. is guaranteed by the Company.



Indebtedness of Mimi’s:



Mimi’s guarantees the Indebtedness under the 2004 Senior Notes.



General:



Intercompany Indebtedness of the Company and its Subsidiaries.






 




			
	*	 	This line of credit is evidenced by two sets of Master Grid Notes — the first two Notes dated
July 19, 2007 in the principal amount of $100,000,000 each, and the second two Notes dated
December 27, 2007 in the principal amount of $50,000,000 each. The aggregate amount of principal
advances under all of the Notes cannot exceed $150,000,000.





Schedule 5.15

(to Note Purchase Agreement)




 









 





Environmental



The Company recently became aware of a site access request and potential investigation by the
Tennessee Department of Environment and Conservation, Division of Remediation, on behalf of the
United States Environmental Protection Agency, relating to certain property that may have been
owned by a former subsidiary of the Company. The Company was made aware of the site access
request and proposed investigation through receipt of an indemnification request by the buyer (the
“Buyer”) of the former subsidiary of the Company under a stock purchase agreement entered into by
the Issuer and the Company in 2001. The Buyer is requesting indemnification from the Company and
the Issuer under the stock purchase agreement for claims relating to the site access request and
potential investigation. The letter expressly states that the Buyer cannot provide an estimate of
the amount of the claim for indemnification at this point given the limited information available
to it.



At this time, the Company and the Issuer have limited information regarding the nature and basis of
the site access request and potential investigation. To date, no court action or other
governmental proceeding has, to our knowledge, been filed with respect to this matter. Given the
foregoing, no determination of liability of the Company, the Issuer or any of their Subsidiaries
with respect to these matters has been made.




Schedule 5.18

(to Note Purchase Agreement)




 









 





Existing Liens




Bob Evans Farms, Inc., an Ohio corporation




	 	 	 	 	 	 	 
	Date Filed	 	File Number	 	Secured Party	 	Collateral/Comments
	7/14/2003

	 	OH00066226248
	 	American Express Business
Finance Corporation
	 	Leased equipment
	7/24/2003

	 	OH00066593659
	 	LeaseNet Group, Inc.
	 	Leased equipment
	9/03/2003

	 	OH00068069438
	 	LeaseNet Group, Inc.
	 	Leased equipment
	3/30/2004

	 	OH00075494872
	 	LeaseNet Group, Inc.
	 	Leased equipment
	4/11/2005

	 	OH00088214360
	 	Risco USA Corporation
	 	Specific equipment
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	1/30/2006 —
Terminated by
Secured Party
	6/24/2005

	 	OH00090698803
	 	Key Equipment Finance Inc.
	 	Leased equipment
	6/15/2006

	 	OH00103308723
	 	Robert Reiser & Co., Inc.
	 	Specific equipment
	12/19/2006

	 	OH00110045784
	 	Robert Reiser & Co., Inc.
	 	Specific equipment
	10/15/2007

	 	OH00120165942
	 	LeaseNet Group LLC
	 	Leased equipment
	12/18/2007

	 	OH00122070802
	 	LeaseNet Group LLC
	 	Leased equipment
	4/25/2008

	 	OH00126040035
	 	Robert Reiser & Co., Inc.
	 	Specific equipment






Bob Evans Farms, Inc., a Delaware corporation




	 	 	 	 	 	 	 
	Date Filed	 	File Number	 	Secured Party	 	Collateral/Comments
	10/17/2003

	 	32716218	 	GE Capital
	 	Specific equipment
	12/01/2003

	 	33138354	 	LeaseNet Group, Inc.
	 	Leased equipment
	1/11/2005

	 	50110784	 	LeaseNet Group, LLC
	 	Leased equipment
	2/14/2005

	 	50488859	 	LeaseNet Group, LLC
	 	Leased equipment
	2/14/2006

	 	60539205	 	LeaseNet Group, LLC
	 	Leased equipment
	10/09/2007

	 	73803276	 	IBM Credit LLC
	 	Leased equipment






Schedule 10.4

(to Note Purchase Agreement)




 









 





SWH Corporation




	 	 	 	 	 	 	 	 	 
	Date Filed	 	File Number	 	Secured Party	 	Collateral/Comments
	3/29/2001

	 	 	0109460368	 	 	The CIT Group/Equipment
Financing, Inc.
	 	Specific equipment
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	6/22/2001 — Amendment filed to
add serial numbers for
equipment listed in Schedule A
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	11/30/2005 — Amendment filed
to delete Mimi’s Café as
debtor’s trade name
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	11/30/2005 — Continuation filed
	4/06/2004

	 	 	0410760098	 	 	Dell Financial Services, L.P.
	 	Leased equipment
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	6/16/2004 — Terminated by
secured party
	5/04/2004

	 	 	0413460219	 	 	Cryovac, Inc.
	 	Leased equipment
	5/04/2004

	 	 	0413460561	 	 	Cryovac, Inc.
	 	Leased equipment
	5/06/2004

	 	 	0413660015	 	 	Crown Credit Company
	 	Specific equipment
	2/02/2005

	 	 	057014404782	 	 	Dell Financial Services L.P.
	 	Leased equipment






Owens Foods, Inc.




	 	 	 	 	 	 	 	 	 
	Date Filed	 	File Number	 	Secured Party	 	Collateral/Comments
	7/02/2007

	 	070022447329	 	 	Raymond Leasing Corporation
	 	Leased equipment






E-1(a)-2




 









 





Form of Series A Note




BEF Holding Co., Inc.




6.39% Senior Note, Series A, due July 28, 2014




			
	No. RA-[                    ]

$[                    ]
	 	[Date]

PPN 05555# AE4






     For Value Received, BEF Holding Co., Inc., a Delaware corporation (the
“Issuer”), hereby promises to pay to [                    ], or its registered assigns, the principal
sum of $[                    ] Dollars on July 28, 2014, with interest (computed on the basis of a
360-day year of twelve 30-day months) (a) on the unpaid balance thereof at the rate of 6.39% per
annum from the date hereof, payable quarterly, on the 28th of each January, April, July and October
in each year, commencing October 28, 2008, until the principal hereof shall have become due and
payable, and (b) to the extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue payment of any Make-Whole
Amount (as defined in the Note Purchase Agreement referred to below), payable quarterly as
aforesaid (or, at the option of the registered holder hereof, on demand), at a rate per annum from
time to time equal to the greater of (i) 8.39% or (ii) 2% over the rate of interest publicly
announced by National City Bank from time to time in Cleveland, Ohio as its “base” or “prime” rate.
Capitalized terms used but not defined herein shall have the meaning assigned thereto in the Note
Purchase Agreement.



     Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are
to be made in lawful money of the United States of America at the principal office of JP Morgan
Chase Bank in New York, New York or at such other place as the Issuer shall have designated by
written notice to the holder of this Note as provided in the Note Purchase Agreement referred to
below.



     This Note is one of a series of Senior Notes (herein called the “Notes”) issued pursuant to
the Note Purchase Agreement, dated as of July 28, 2008 (as from time to time amended, supplemented
or otherwise modified, the “Note Purchase Agreement”), among Bob Evans Farms, Inc., a
Delaware corporation (the “Company”), the Issuer and the institutional investors named therein (the
“Purchasers”) and is entitled to the benefits thereof. Each holder of this Note will be deemed, by
its acceptance hereof, (i) to have agreed to the confidentiality provisions set forth in Section 21
of the Note Purchase Agreement and (ii) to have made the representations set forth in Sections 6.1
and 6.2 of the Note Purchase Agreement, provided that with respect to Section 6.2 such holder may
(in reliance upon information provided by the Issuer, which shall not be unreasonably withheld)
make a representation to the effect that the purchase by such holder of any Note will not
constitute a non-exempt prohibited transaction under section 406(a) of ERISA.



Exhibit 1(a)

(to Note Purchase Agreement)





 











 





     This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender
of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of
transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized
in writing, a new Note of the same Series for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for registration of transfer,
the Issuer may treat the person in whose name this Note is registered as the owner hereof for the
purpose of receiving payment and for all other purposes, and the Issuer will not be affected by any
notice to the contrary.



     Pursuant to (i) Section 11 of the Note Purchase Agreement and (ii) that certain Subsidiary
Guaranty Agreement dated as of even date herewith (as from time to time amended, joined,
supplemented or otherwise modified, the “Subsidiary Guaranty”), respectively, the Company and the
Subsidiary Guarantor have absolutely and unconditionally guarantied the payment in full of the
principal of, the Make-Whole Amount, if any, and interest on this Note and the performance by the
Issuer of all of its obligations contained in the Note Purchase Agreement all as more fully set
forth in said Note Purchase Agreement.



     The Issuer will make required prepayments of principal on the date and in the amount specified
in the Note Purchase Agreement. This Note is also subject to optional prepayment, in whole or from
time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but
not otherwise.



     If an Event of Default, as defined in the Note Purchase Agreement, occurs and is continuing,
the principal of this Note may be declared or otherwise become due and payable in the manner, at
the price (including any applicable Make-Whole Amount) and with the effect provided in the Note
Purchase Agreement.



     This Note 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.



	 	 	 	 	 
	 	BEF Holding Co., Inc.

 	 
	 	By   	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



E-1(A)-2









 






	 	 	 	 	 



Form of Series B Note




BEF Holding Co., Inc.




6.39% Senior Note, Series B, due July 28, 2013




			
	 	 	 
	No. RB-[___]

$[                    ]
	 	[Date]

PPN 05555# AF1






     For Value Received, the undersigned, BEF Holding Co., Inc., a Delaware
corporation (the “Issuer”), hereby promises to pay to [                                        ], or its registered assigns,
the principal sum of $[                    ] Dollars on July 28, 2013, with interest (computed on
the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance thereof at the rate
of 6.39% per annum from the date hereof, payable quarterly, on the 28th of each January, April,
July and October in each year, commencing October 28, 2008, until the principal hereof shall have
become due and payable, and (b) to the extent permitted by law on any overdue payment (including
any overdue prepayment) of principal, any overdue payment of interest and any overdue payment of
any Make-Whole Amount (as defined in the Note Purchase Agreement referred to below), payable
quarterly as aforesaid (or, at the option of the registered holder hereof, on demand), at a rate
per annum from time to time equal to the greater of (i) 8.39% or (ii) 2% over the rate of interest
publicly announced by National City Bank from time to time in Cleveland, Ohio as its “base” or
“prime” rate. Capitalized terms used but not defined herein shall have the meaning assigned
thereto in the Note Purchase Agreement.



     Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are
to be made in lawful money of the United States of America at the principal office of JP Morgan
Chase Bank in New York, New York or at such other place as the Issuer shall have designated by
written notice to the holder of this Note as provided in the Note Purchase Agreement referred to
below.



     This Note is one of a series of Senior Notes (herein called the “Notes”) issued pursuant to
the Note Purchase Agreement, dated as of July 28, 2008 (as from time to time amended, supplemented
or otherwise modified, the “Note Purchase Agreement”), among Bob Evans Farms, Inc., a
Delaware corporation (the “Company”), the Issuer and the institutional investors named therein (the
“Purchasers”) and is entitled to the benefits thereof. Each holder of this Note will be deemed, by
its acceptance hereof, (i) to have agreed to the confidentiality provisions set forth in Section 21
of the Note Purchase Agreement and (ii) to have made the representations set forth in Sections 6.1
and 6.2 of the Note Purchase Agreement, provided that with respect to Section 6.2 such holder may
(in reliance upon information provided by the Issuer, which shall not be unreasonably withheld)
make a representation to the effect that the purchase by such holder of any Note will not
constitute a non-exempt prohibited transaction under section 406(a) of ERISA.



     This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender
of this Note for registration of transfer, duly endorsed, or accompanied by a written



Exhibit 1(b)

(to Note Purchase Agreement)




 









 







instrument of transfer duly executed, by the registered holder hereof or such holder’s
attorney duly authorized in writing, a new Note of the same Series for a like principal amount will
be issued to, and registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Issuer may treat the person in whose name this Note is registered as
the owner hereof for the purpose of receiving payment and for all other purposes, and the Issuer
will not be affected by any notice to the contrary.




     Pursuant to (i) Section 11 of the Note Purchase Agreement and (ii) that certain Subsidiary
Guaranty Agreement dated as of even date herewith (as from time to time amended, joined,
supplemented or otherwise modified, the “Subsidiary Guaranty”), respectively, the Company and the
Subsidiary Guarantor have absolutely and unconditionally guarantied the payment in full of the
principal of, the Make-Whole Amount, if any, and interest on this Note and the performance by the
Issuer of all of its obligations contained in the Note Purchase Agreement all as more fully set
forth in said Note Purchase Agreement.



     This Note is subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreement, but not otherwise.



     If an Event of Default, as defined in the Note Purchase Agreement, occurs and is continuing,
the principal of this Note may be declared or otherwise become due and payable in the manner, at
the price (including any applicable Make-Whole Amount) and with the effect provided in the Note
Purchase Agreement.



     This Note 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.



	 	 	 	 	 
	 	BEF Holding Co., Inc.

 	 
	 	By   	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



E-1(b)-2






 









 








Form of Subsidiary Guaranty




Exhibit 2.2

(to Note Purchase Agreement)




 









 





Form of Opinion of Special Counsel

to the Company and the Issuer





     The closing opinion of Vorys, Sater, Seymour and Pease LLP, special counsel to the Company and
the Issuer, which is called for by Section 4.4(a) of the Note Purchase Agreement, shall be dated
the date of the Closing and addressed to the Purchasers, shall be satisfactory in scope and form to
each Purchaser and shall be to the effect that:



Exhibit 4.4(a)

(to Note Purchase Agreement)






 









 








July 28, 2008




To: Each of the Purchasers identified




    
  on Schedule I hereto (“the Purchasers”)



          Re:      BEF Holding Co., Inc. – Note Purchase Agreement




Ladies and Gentlemen:




     We have acted as counsel to BEF Holding Co., Inc., a Delaware corporation (the
“Issuer”), Bob Evans Farms, Inc., a Delaware corporation (the “Company”) and Mimi’s
Café, LLC, a Delaware limited liability company (the “Subsidiary Guarantor” and, together
with the Issuer and the Company, the “Obligors”) in connection with the Note Purchase
Agreement, dated as of July 28, 2008, among the Issuer, the Company, and the Purchasers (the
“Note Purchase Agreement”). This opinion is furnished to you pursuant to Section 4.4(a) of
the Note Purchase Agreement. Capitalized terms used in this opinion that are defined in the Note
Purchase Agreement have the meanings set forth in the Note Purchase Agreement, unless otherwise
defined herein.



     In connection with this opinion, we have examined originals or certified, conformed or
reproduction copies of, and have relied upon the accuracy of, without independent verification or
investigation, the following:




     (a) the Note Purchase Agreement;




     (b) the Series A Notes issued on the date hereof;




     (c) the Series B Notes issued on the date hereof;




     (d) the Subsidiary Guaranty;




     (e) the offeree letter dated July 28, 2008, from NatCity Investments, Inc. (the
“Offeree Letter”), a copy of which is attached hereto as Exhibit A;




     (f) a representation and warranty certificate of certain of the officers of the
Obligors as to certain factual matters regarding the Obligors (the “Officers’
Certificate”), a copy of which is attached hereto as Exhibit B;




     (g) a certificate from the Secretary of State of the State of Delaware, dated as of the
date stated on Schedule II hereto, with respect to the good standing of each of the Obligors
(each, a “Good Standing Certificate” of such Obligor;



E-4.4(a)-2









 






     (h) the certificate of incorporation or certificate of formation, as applicable, for
each of the Obligors, certified by the Secretary of State of the state of Delaware, dated as
of the date stated on Schedule III hereto;




     (i) the bylaws or limited liability company agreement, as applicable, of each of the
Obligors, certified to us in the Officer’s Certificate as being complete and in full force
and effect as of the date set forth therein through the date of this opinion; and




     (j) the actions of the directors, members and managers, as appropriate, of each of the
Obligors with respect to the Transaction Documents (as hereafter defined) and the
transactions contemplated thereby, certified by the Secretary of each Obligor to us as being
duly adopted as of the date set forth in such certification and in full force and effect as
of the date of this opinion.



     We have also examined the originals or certified, conformed or reproduction copies of, and
have relied upon the accuracy of, without independent verification or investigation, such other
records, agreements, instruments and documents as we have deemed necessary or relevant as the basis
for our opinion. The documents referenced in clauses (a) through (d) of this paragraph are
referred to herein as the “Transaction Documents”.



     In such examinations, we have assumed (except, to the extent set forth in the opinions
expressed below, as to the Obligors): (i) the genuineness of all signatures of parties to the
Transaction Documents, the authenticity of all documents submitted to us as originals and the
conformity with authentic original documents of all documents submitted to us as copies; (ii) the
due completion, execution, and acknowledgment as indicated thereon by all parties thereto, and
delivery of all documents and instruments and of the consideration recited therein; (iii) that each
of the parties to the Transaction Documents has the full power, authority and legal right under its
charter and other governing documents, legislation, and applicable laws and regulations to execute
and perform its obligations under all documents executed by it; (iv) that each Transaction Document
has been duly authorized by, has been duly executed and delivered by, and constitutes the legal,
valid, binding and enforceable obligation of each of the parties party thereto, enforceable against
such party in accordance with its terms; (v) that all signatories to each Transaction Document have
been duly authorized; and (vi) that the laws of any jurisdiction other than the State of Ohio which
may govern any one or more of the Transaction Documents are not inconsistent with the laws of the
State of Ohio in any matter material to this opinion.



     Whenever our opinion with respect to the existence or absence of facts is indicated to be
based on our knowledge, we are referring to the actual knowledge of the Vorys, Sater, Seymour and
Pease LLP attorneys who have represented the Obligors in connection with the transactions
contemplated by the Transaction Documents. Except for the examinations and inquiries recited
herein, we have not undertaken any independent investigation to determine the existence or absence
of any facts, and no inference as to our knowledge concerning such facts should be drawn. Without
limiting the generality of the foregoing, we have made no examination of the character,
organization, activities or authority of any party other than the Obligors to any of the
Transaction Documents which might have any effect upon our opinions expressed herein, and we have
neither examined, nor do we opine upon, any provision or matter to the extent that the



E-4.4(a)-3









 







examination or opinion would require a financial, mathematical or accounting calculation or
determination.



     As used herein, the phrases “corporate power and authority” and “duly authorized by all
necessary corporate action” with respect to the Issuer and the Company refer and are limited to the
Delaware General Corporation Law and the Issuer’s and the Company’s certificate of incorporation
and bylaws. As used herein, the phrases “limited liability company power and authority” and “duly
authorized by all necessary limited liability company action” with respect to the Subsidiary
Guarantor refer and are limited to the Delaware Limited Liability Company Act and the Subsidiary
Guarantor’s certificate of formation and limited liability company agreement.



     Based upon and subject to the foregoing and the further qualifications and limitations set
forth below, as of the date hereof (or as of the date of any assumption made herein or any
certificate, schedule, exhibit or inquiry stated to have been examined, made, or otherwise relied
upon by us), we are of the opinion that:



     1. Each of the Issuer and the Company is a corporation incorporated, and, based solely on the
Good Standing Certificate of such Obligor, validly existing and in good standing under the laws of
the State of Delaware. The Subsidiary Guarantor is a limited liability company organized, and,
based solely on the Good Standing Certificate of the Subsidiary Guarantor, validly existing in good
standing under the laws of the State of Delaware.



     2. Each of the Issuer and the Company has the corporate power and authority to conduct its
business as it is now being conducted. The Subsidiary Guarantor has the limited liability company
power and authority to conduct its business as it is now being conducted.



     3. Each of the Issuer and the Company has the corporate power and authority to execute and
deliver each of the Transaction Documents to which it is a party and to perform its obligations
thereunder. The Subsidiary Guarantor has the limited liability company power and authority to
execute and deliver each of the Transaction Documents to which it is a party and to perform its
obligations thereunder.



     4. The execution and delivery by the Issuer and the Company of, and the performance and
incurrence by the Issuer and the Company of its obligations and liabilities under, each Transaction
Document to which the Issuer and the Company are a party have been duly authorized by all necessary
corporate action on the part of the Issuer and the Company. The execution and delivery by the
Subsidiary Guarantor of, and the performance and incurrence by, the Subsidiary Guarantor of its
obligations and liabilities under, each Transaction Document to which the Subsidiary Guarantor is a
party, have been duly authorized by all necessary limited liability company action on the part of
the Subsidiary Guarantor.



     5. Each Obligor has duly executed and delivered each of the Transaction Documents to which it
is a party.



     6. Each Transaction Document constitutes the legal, valid and binding obligation of each
Obligor party thereto, enforceable against such Obligor in accordance with its terms.



E-4.4(a)-4









 





     7. Based on the representations set forth in the Note Purchase Agreement and in the Offeree
Letter, the offering, sale and delivery of the Notes and the delivery of the Subsidiary Guaranty do
not require the registration of the Notes or the Subsidiary Guaranty under the Securities Act of
1933, as amended (the “Act”), or the qualification of an indenture under the Trust Indenture Act of
1939, as amended.



     8. The issuance and sale of the Notes by the Issuer, and the execution and delivery by each
Obligor of, and the performance and incurrence by each Obligor of its obligations and liabilities
under, each Transaction Document to which such Obligor is a party do not conflict with, or result
in any breach or violation of: (a) the certificate of incorporation, bylaws, certificate of
formation, or limited liability company agreement, as applicable, of such Obligor, (b) to our
knowledge, any agreement for Material Indebtedness to which such Obligor is a party or by which any
of its property is bound, (c) to our knowledge, any order, writ, injunction or decree of any court
or Governmental Authority applicable to such Obligor or (d) any provision of any law applicable to
corporations for profit generally in the State of Ohio (including usury laws), the federal laws of
the United States of America, or the Delaware General Corporation Law or Delaware Limited Liability
Company Act, as applicable.



     9. No authorization, approval or consent of, and no filing or registration with, any
Governmental Authority of the State of Ohio (assuming each Purchaser is an “institutional investor”
within the meaning of Revised Code of Ohio (“R.C.”) Section 1707.01(S)) or the federal laws of the
United States of America (other than any filings under the Act) is required on the part of any
Obligor for the execution or delivery by such Obligor of, or for the performance or incurrence by
such Obligor of any obligations or liabilities under, any of the Transaction Documents to which
such Obligor is a party or on the part of the Issuer in connection with the offering, issuance and
sale by the Issuer of the Notes.



     10. Except as disclosed in the Schedules to the Note Purchase Agreement, to our knowledge,
there are no actions, suits or proceedings pending, or threatened against, or affecting any
Obligor, at law or in equity or before or by any Governmental Authority, that would reasonably be
expected to result in a Material Adverse Effect.



     11. None of the Issuer, the Company nor the Subsidiary Guarantor is (i) a “public utility
company” or a “holding company,” or a “subsidiary company” of a “holding company,” as such terms
are defined in the Public Utility Holding Company Act of 2005, as amended, (ii) a “public utility”
as defined in the Federal Power Act, as amended, or (iii) an “investment company” or a company
“controlled” by an “investment company,” as such terms are defined in the Investment Company Act of
1940, as amended.



     12. The issuance of the Notes and the intended use of the proceeds of the sale of the Notes do
not violate Regulation T, U or X of the Board of Governors of the Federal Reserve System.



     13. We would expect the courts of the State of Ohio (and a federal court applying the law of
the State of Ohio) to give effect to the provisions of the Transaction Documents which provide that
the validity, construction and enforceability thereof are governed by the laws of the



E-4.4(a)-5









 







State of New York, except in instances where the internal laws of the State of Ohio specifically
govern as described in this numbered paragraph 13. The Supreme Court of the State of Ohio has
validated contractual choice of law provisions. Schulke Radio Productions, Ltd. v. Midwestern
Broadcasting Co., 6 Ohio St.3d 436 (1983); Jarvis v. Ashland Oil, Inc., 17 Ohio St.3d
189 (1985); Sekeres v. Arbaugh, 31 Ohio St.3d 24 (1987). In Schulke, the Supreme
Court held that parties may choose the law applicable to their contract unless (a) the state whose
law is chosen has no substantial relationship to the parties or to the transactions and there is no
other reasonable basis for the parties’ choice, or (b) application of the chosen law would be
contrary to a fundamental policy of a state having a materially greater interest in the issue than
the chosen state and such other state would be the state of applicable law in the absence of a
choice by the parties. This holding applies the choice of law rule set forth in Restatement (2d)
of Conflicts of Law, Section 187(2) (1971). In addition, R.C. Section 1301.05 provides generally
with respect to UCC matters (not including issues specifically addressed to the contrary in the
Ohio Code) that, when a transaction bears a reasonable relation to the State of Ohio and also to
another state, the parties may agree that the law of either the State of Ohio or such other state
will govern their rights and duties. Under the present circumstances, it would appear that the
parties’ stipulation that the laws of the State of New York should control should be given effect,
except to the extent that the Transaction Documents address rights, remedies or other matters
relating to property interests having their situs in the State of Ohio. This conclusion is based
upon our understanding that (i) the transactions provided for in the Transaction Documents were
negotiated in whole or in part by certain of the Purchasers in the State of New York, (ii) the
Transaction Documents have been or will be executed by certain of the Purchasers in the State of
New York, and (iii) the Transaction Documents provide for payment under the Notes, in certain
circumstances, in New York.



     The opinions expressed above are subject to the following additional qualifications:



     All of our opinions are subject to the limitations, if any, of Title 11 U.S.C., as amended,
and of the applicable insolvency, reorganization, moratorium or other laws affecting the
enforcement of creditors’ rights generally and by principles of equity. In addition, certain
remedial and other provisions of the Transaction Documents may be limited by (i) implied covenants
of good faith, fair dealing and commercially reasonable conduct and (ii) judicial discretion, in
the instance of multiple or equitable remedies.



     We have not conducted requisite factual or legal examinations, and accordingly we express no
opinion, with respect to the application, if any, of laws concerning or promulgated by (a)
environmental effects or agencies; (b) except for our opinions in numbered paragraph 11 hereof,
industries the operations, financial affairs or profits of which are regulated by the United States
or the State of Ohio, to wit, banks and thrift institutions, insurance and utilities under Title 49
of the R.C.; (c) fraudulent dispositions or obligations (Chapter 1336, R.C. and Section 1313.56,
R.C.); (d) except for our opinions in numbered paragraphs 7, 9 and 11 hereof, securities laws; (e)
political subdivisions of the State of Ohio; or (f) any taxes or tax effects.



     In addition, we express no opinion as to the enforceability of rights, provisions or interests
to the extent, if any, dependent upon the enforceability of (a) waivers of rights of debtors or
others which may not be waived or which may be waived only under certain



E-4.4(a)-6









 







circumstances under applicable law; (b) provisions of the Transaction Documents to the extent
held to (i) require the payment of interest on interest, (ii) compensate any party for loss or
expense in excess of actual loss or reasonable expenses or constitute a penalty, (iii) require
reimbursement for or indemnity against actions by the Purchasers taken in violation of applicable
law or public policy, or (iv) purport to waive or negate in favor of any Purchaser the effect of
notice of a default or event of default, if any, which such Purchaser may have at the time of
closing; (c) any provision for the award of attorneys’ fees to an opposing party; (d) provisions
which purport to establish evidentiary standards; (e) provisions which purport to choose venue and
jurisdiction; or (f) provisions which purport to waive jury trial.



     The opinions expressed herein are limited to the laws of the State of Ohio, the Delaware
General Corporation Law, the Delaware Limited Liability Company Act and the federal laws of the
United States of America having effect on the date hereof, and we express no opinion as to the laws
of any other jurisdiction. The opinions expressed herein, each of which speaks only as of the date
hereof, are furnished specifically in connection with the execution and delivery of the Transaction
Documents for the benefit of the Purchasers and any permitted transferee that becomes a holder of
any Note under the Note Purchase Agreement after the date hereof, and may not be relied upon,
assigned, quoted or otherwise used in any manner or for any purpose by any other person or entity,
without our specific prior written consent, except that (a) Chapman and Cutler LLP may rely on this
opinion to the extent set forth in the opinion that Chapman and Cutler LLP is delivering in
connection with the transactions contemplated by the Transaction Documents and (b) evidence of the
existence of our opinion may be shown to the National Association of Insurance Commissioners and
any other state or federal authority having regulatory power over any one or more of the Purchasers
(“Regulatory Authorities”), provided that such Regulatory Authorities shall not be entitled to rely
upon or quote our opinion.



Very truly yours,




E-4.4(a)-7









 





Form of Opinion of Special Counsel

to the Purchasers




     The closing opinion of Chapman and Cutler LLP, special counsel to the Purchasers, which is
called for by Section 4.4(b) of the Note Purchase Agreement, shall be dated the date of the Closing
and addressed to each Purchaser, shall be satisfactory in form and substance to each Purchaser and
shall be to the effect that:




     1. The Issuer is a corporation, validly existing and in good standing under the laws of
its jurisdiction of incorporation, and has the corporate power and the corporate authority
to execute and perform the Note Purchase Agreement and to issue the Notes.




     2. The company is a corporation validly existing and in good standing under the laws of
its jurisdiction of incorporation, and has the corporate power and the corporate authority
to execute and perform the Note Purchase Agreement.




     3. The Note Purchase Agreement has been duly authorized by all necessary corporate
action on the part of the Issuer and the Company, has been duly executed and delivered by
the Issuer and the Company and constitutes the legal, valid and binding contract of the
Issuer and the Company enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent conveyance and similar laws affecting creditors’ rights generally,
and general principles of equity (regardless of whether the application of such principles
is considered in a proceeding in equity or at law).




     4. The Notes have been duly authorized by all necessary corporate action on the part of
the Issuer, and the Notes being delivered on the date hereof have been duly executed and
delivered by the Issuer and constitute the legal, valid and binding obligations of the
Issuer enforceable in accordance with their terms, subject to bankruptcy, insolvency,
fraudulent conveyance and similar laws affecting creditors’ rights generally, and general
principles of equity (regardless of whether the application of such principles is considered
in a proceeding in equity or at law).




     5. The issuance, sale and delivery of the Notes, the guaranty by the Company contained
in the Note Purchase Agreement and the Subsidiary Guaranty under the circumstances
contemplated by the Note Purchase Agreement and the Subsidiary Guaranty do not, under
existing law, require the registration of the Notes, the guaranty by the Company or the
Subsidiary Guaranty under the Securities Act of 1933, as amended, or the qualification of an
indenture under the Trust Indenture Act of 1939, as amended.



     The opinion of Chapman and Cutler LLP shall also state that the opinion of Vorys, Sater,
Seymour and Pease LLP, special counsel to the Company and the Issuer, is satisfactory in scope and
form to Chapman and Cutler LLP and that, in its opinion, the Purchasers are justified in relying
thereon.



Exhibit 4.4(b)

(to Note Purchase Agreement)






 









 








     With respect to matters of fact upon which such opinion is based, Chapman and Cutler LLP may
rely on appropriate certificates of public officials and officers of the Company, the Issuer and
the Subsidiary Guarantor and upon representations of the Company, the Issuer, the Subsidiary
Guarantor and the Purchasers delivered in connection with the issuance and sale of the Notes.



     In rendering the opinion set forth in paragraph 1 above, Chapman and Cutler LLP may rely, as
to matters referred to in paragraph 1, solely upon an examination of the Certificate of
Incorporation certified by, and a certificate of good standing of the Company and the Issuer from,
the Secretary of State of the State of Delaware for each of the Company and the Issuer, the By-laws
of the Company and the Issuer and the general business corporation law of the State of Delaware,
and the Certificate of Formation certified by, and a certificate of good standing of the Subsidiary
Guarantor from, the Secretary of State of the State of Delaware, the Limited Liability Company
Agreement of the Subsidiary Guarantor and the general limited liability company law of the State of
Delaware. The opinion of Chapman and Cutler LLP is limited to the general business corporation law
of the State of Delaware, the laws of the State of New York and the Federal laws of the United
States.



E-4.4(b)-2