THIRD AMENDMENT
THIS THIRD AMENDMENT dated as of June 29, 2004 (this "Amendment")
amends the Credit Agreement dated as of July 16, 2001 (as previously amended,
the "Credit Agreement") among American Italian Pasta Company (the
"Company"), various financial institutions (the "Lenders") and
Bank of America, N.A., as administrative agent (in such capacity, the
"Administrative Agent"). Capitalized terms used but not otherwise defined
herein have the respective meanings given to them in the Credit Agreement.
WHEREAS, the Company, the Lenders and the Administrative Agent have entered
into the Credit Agreement; and
WHEREAS, the parties hereto desire to amend the Credit Agreement in certain
respects as more fully set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1 Amendments. Subject to the satisfaction of the conditions
precedent set forth in Section 3, the Credit Agreement is amended as
follows:
1.1 Amendments to Definitions.
(a) The definition of "Consolidated EBITDA" is amended by adding the
following new language at the end of clause(b) immediately before the
semicolon: "plus (c) all Special Charges incurred during such Computation
Period".
(b) The definition of "Fixed Charge Coverage Ratio" is amended in its
entirety to read as follows:
Fixed Charge Coverage Ratio means, for any Computation
Period, the ratio of (a) the result of (i) Consolidated EBITDA for
such Computation Period less (ii) $15,000,000 (which, for
informational purposes, represents an assumed maintenance level of
capital expenditures) less (iii) cash income tax expense for such
Computation Period less (iv) cash dividends paid by the Company during
such Computation Period to (b) the sum of (i) Interest Expense to the
extent payable in cash during such Computation Period plus (ii) the
greater of (x) $15,000,000 (which, for informational purposes,
represents an assumed amount of term-like debt repayments) and (y) the
positive excess, if any, as of the last day of such Computation
Period, of (1) the Aggregate Revolving Outstandings over (2) the
Aggregate Revolving Commitment Amount scheduled to be in effect after
giving effect to the reduction thereof on the first Commitment
Reduction Date following the last day of such Computation Period plus
(iii) the actual aggregate amount of all scheduled principal payments
on Debt (other than Debt hereunder) required to be made (and actually
made) by the Company and its Subsidiaries during such Computation
Period; provided that in calculating Interest Expense for any
Computation Period, any Debt incurred or assumed in connection with
the acquisition of any Person (or division or similar business unit)
shall be assumed to have been incurred or assumed on the first day of
such period (with a corresponding increase in Interest Expense) and
any Debt assumed by any Person (other than the Company or any
Subsidiary) in connection with the
disposition of any Person (or division or similar business unit)
disposed of by the Company or any Subsidiary during such period shall
be assumed to have been repaid on the first day of such period (with a
corresponding decrease in Interest Expense).
1.2 Addition of Definition. The following new definition of "Special
Charges" is added to Section 1 of the Credit Agreement in proper sequence:
Special Charges means the first $12,000,000 of non-recurring
expenses of the Company and its consolidated Subsidiaries incurred
during the last two Fiscal Quarters of Fiscal Year 2004 in connection
with (a) temporary production curtailment expenses, (b) development and
start-up costs for new reduced-carbohydrate product lines and (c)
initial consumer advertising and promotion costs for such new
reduced-carbohydrate product lines.
1.3 Amendment to Section 10.6.2. Section 10.6.2 of the Credit Agreement is
amended in its entirety to read as follows:
10.6.2 Maximum Leverage Ratio. Not permit the Leverage Ratio for any
Computation Period to exceed the applicable ratio set forth below for such
Computation Period:
Computation Period Ending Maximum Leverage Ratio
------------------------- ----------------------
July 2, 2004 through July 1, 2005 4.00 to 1.0
September 30, 2005 and December 30, 2005 3.75 to 1.0
March 31, 2006 and thereafter 3.50 to 1.0.
1.4 Amendment to Section 10.6.4. Section 10.6.4 of the Credit Agreement is
amended in its entirety to read as follows:
10.6.4 Minimum Consolidated EBITDA. Not permit Consolidated EBITDA for
any Computation Period to be less than (a) for any Computation Period
ending from July 2, 2004 through July 1, 2005, $70,000,000 and (b) for any
Computation Period ending thereafter, $80,000,000.
1.5 Amendment to Schedule 1.1(b). Schedule 1.1(b) to the Credit Agreement
is replaced with Schedule 1.1(b) hereto.
SECTION 2 Representations and Warranties. The Company represents and
warrants to the Administrative Agent and the Lenders that, after giving effect
to the effectiveness hereof:
(a) each warranty set forth in Section 9 of the Credit Agreement, as
amended hereby (as so amended, the "Amended Credit Agreement"), is true and
correct in all material respects as of the date of the execution and delivery of
this Amendment by the Company, with the same effect as if made on such date;
(b) no Event of Default or Unmatured Event of Default exists; and
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(c) since October 3, 2003, there has been no Material Adverse Effect.
The Required Lenders acknowledge and agree that the events and circumstances
disclosed in the written presentation distributed at the Lender's meeting with
the Company on May 14, 2004 do not constitute a Material Adverse Effect.
SECTION 3 Effectiveness. This Amendment shall become effective when the
Administrative Agent shall have received the following:
(a) counterparts of this Amendment executed by the Company and the Required
Lenders;
(b) evidence that the Company has paid all accrued and invoiced fees and
expenses of the Administrative Agent and the Arranger (including reasonable
attorneys' fees);
(c) an amendment fee for each Lender that delivers to the Administrative
Agent (i) an executed consent to this Amendment (substantially in the form
posted to Intralinks by the Administrative Agent on or about June 10, 2004) no
later than 5:00 p.m. (Chicago time) on June 21, 2004; and (b) an executed
signature page to this Amendment no later than 5:00 p.m. (Chicago time) on June
29, 2004, such fee to be in an amount equal to 0.10% of the amount of such
Lender's Commitment on the date this Amendment becomes effective;
(d) a Confirmation substantially in the form of Exhibit A; and
(e) such other documents as the Administrative Agent may reasonably
request.
SECTION 4 Miscellaneous.
4.1 Continuing Effectiveness, etc. As herein amended, the Credit Agreement
shall remain in full force and effect and is hereby ratified and confirmed in
all respects. After the effectiveness of this Amendment, all references in the
Credit Agreement to "this Agreement" and in the other Loan Documents to the
"Credit Agreement" or similar terms shall refer to the Amended Credit Agreement.
4.2 Counterparts. This Amendment may be executed in any number of
counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original but all such counterparts
shall together constitute one and the same Amendment.
4.3 Governing Law. This Amendment shall be a contract made under and
governed by the laws of the State of Illinois applicable to contracts made and
to be performed entirely within such state.
4.4 Successors and Assigns. This Amendment shall be binding upon the
Company, the Lenders and the Administrative Agent and their respective
successors and assigns, and shall inure to the benefit of the Company, the
Lenders and the Administrative Agent and the respective successors and assigns
of the Lenders and the Administrative Agent.
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Delivered as of the day and year first above written.
AMERICAN ITALIAN PASTA COMPANY
By: /s/ Xxxxxx Xxxxxxxxxx
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Name: Xxxxxx Xxxxxxxxxx
Title: Executive Vice President/Chief Financial Officer
BANK OF AMERICA, N.A., as Administrative Agent
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Assistant Vice President
BANK OF AMERICA, N.A., as a Lender
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
BANK ONE, NA, with its main office in Chicago, IL, as
Documentation Agent and as a Lender
By: /s/ Xxxxxxxx X. Xxxxxx
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Name: Xxxxxxxx X. Xxxxxx
Title: EVP
U.S. BANK NATIONAL
ASSOCIATION, as Syndication
Agent and as a Lender
By: /s/ Xxxx X. Xxxxx
---------------------------------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
ING CAPITAL LLC
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Director
By:____________________________________
Name: _________________________________
Title: __________________________________
FLEET NATIONAL BANK, as Co-Agent and as a Lender
By: Xxxxxxx X. X'Xxxx
---------------------------------------------------------
Name: Xxxxxxx X. X'Xxxx
Title: Director
KEYBANK NATIONAL ASSOCIATION, as Co-Agent and as a Lender
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH, as Co-Agent and as a
Lender
By: /s/ Xxxxxx Xxxxxxxxx
---------------------------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Vice President
By: /s/ Xxxxx Xxxxxxx
---------------------------------------------------------
Name: Xxxxx Xxxxxxx
Title: Executive Director
XXXXX FARGO BANK, N.A., as Co-Agent and as a Lender
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Vice President
BANCA NAZIONALE DEL LAVORO S.P.A.
By: /s/ Francesco Di Mario
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Name: Francesco Di Mario
Title: Vice President
By: /s/ Xxxxx Xxxxxx
---------------------------------------------------------
Name: Xxxxx Xxxxxx
Title: Senior Vice President
THE BANK OF NEW YORK
By: /s/ Xxxx X'Xxxxxx
---------------------------------------------------------
Name: Xxxx X'Xxxxxx
Title: Vice President
COMERICA BANK
By: /s/ Xxxx Xxxxxxxx
---------------------------------------------------------
Name: Xxxx Xxxxxxxx
Title: CBO
COMMERCE BANK, N.A.
By: /s/ Xxxxx Xxxxxx
---------------------------------------------------------
Name: Xxxxx Xxxxxx
Title: Senior Vice President
SUNTRUST BANK, as Co-Agent and as a Lender
By: /s/ Xxxxxx Xxxxxxxx
---------------------------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Managing Director
UNICREDITO ITALIANO
By: /s/ Xxxxxxxxxxx X. Xxxxx
---------------------------------------------------------
Name: Xxxxxxxxxxx X. Xxxxx
Title: First Vice President & Deputy Manager
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
UMB BANK, N.A.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President
COBANK, ACB
By: /s/ S. Xxxxxxx Xxxx
---------------------------------------------------------
Name: S. Xxxxxxx Xxxx
Title: Vice President
FARM CREDIT SERVICES OF MINNESOTA VALLEY PCA D/B/A FCS
COMMERCIAL FINANCE GROUP
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: SVP - Syndicated Finance
AGFIRST, FCB
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
U.S. AGBANK, FCB (f/k/a Farm Credit Bank of Wichita)
By: /s/ Xxxx Xxxxxxxxxxx
---------------------------------------------------------
Name: Xxxx Xxxxxxxxxxx
Title: Vice President
FARM CREDIT SERVICES OF AMERICA, PCA
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
GREENSTONE FARM CREDIT SERVICES, FLCA
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: AVP/Lending Officer
NORTHWEST FARM CREDIT SERVICES, PCA
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: Vice President
CONFIRMATION
Dated as of June 29, 2004
To: Bank of America, N.A., individually and as administrative agent (in such
capacity, the "Administrative Agent"), and the other financial institutions
that are parties to the Credit Agreement referred to below
Please refer to the following:
(a) the Credit Agreement dated as of July 16, 2001 (as previously amended,
the "Credit Agreement") among American Italian Pasta Company (the "Company"),
various financial institutions and the Administrative Agent;
(b) the Third Amendment to the Credit Agreement dated as of the date hereof
(the "Third Amendment"; the Credit Agreement, as amended by the Third Amendment,
is referred to as the "Amended Credit Agreement");
(c) the Collateral Assignment of Partnership Interests dated as of July 16,
2001 by the Company in favor of the Administrative Agent;
(d) the Collateral Assignment of Partnership Interests dated as of July 19,
2002 by AIPC Finance, Inc. ("AIPC Finance") in favor of the Administrative
Agent;
(e) the Pledge Agreement dated as of July 16, 2001 among the Company, AIPC
Finance and the Administrative Agent;
(f) the Membership Interest Pledge Agreement dated as of July 19, 2002 by
the Company and AIPC Finance in favor of the Administrative Agent;
(g) the Guaranty dated as of July 16, 2001 by each of the undersigned
(other than the Company) in favor of the Administrative Agent.
Each document referred to in items (c) through (g) above is called a
"Credit Document". Capitalized terms used but not defined herein shall have the
respective meanings set forth in the Amended Credit Agreement.
Each of the undersigned hereby confirms to the Lenders and the
Administrative Agent that each Credit Document to which such undersigned is a
party continues in full force and effect on the date hereof after giving effect
to the Third Amendment and is the legal, valid and binding obligation of such
undersigned, enforceable against such undersigned in accordance with its terms.
Each of the undersigned hereby agrees with the Administrative Agent that
(a) the obligations and liabilities guaranteed under the Guaranty and secured
under each Credit Document include all obligations and liabilities of the
Company under the Amended Credit
Agreement and (b) each reference in each Credit Document to the "Credit
Agreement" shall, on and after the date hereof, be deemed to be a reference to
the Amended Credit Agreement.
By its signature below, the Administrative Agent agrees to the provisions
of clauses (a) and (b) of the preceding paragraph.
[SIGNATURES BEGIN ON NEXT PAGE]
IN WITNESS WHEREOF, the undersigned have executed this Confirmation as the
date first above written.
AMERICAN ITALIAN PASTA COMPANY
By: /s/ Xxxxxx Xxxxxxxxxx
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Name: Xxxxxx Xxxxxxxxxx
Title: Executive VP & Chief Financial Officer
AIPC FINANCE, INC.
By: /s/ Xxxxxx Xxxxxxxxxx
--------------------------------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: President
AIPC SALES CO.
By: /s/ Xxxxxx Xxxxxxxxxx
--------------------------------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Executive Vice President & Chief Financial
Officer
AIPC WISCONSIN, LIMITED PARTNERSHIP
By: America Italian Pasta Company, its
General Partner
By: /s/ Xxxxxx Xxxxxxxxxx
---------------------------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Executive Vice President & Chief Financial
Officer
AIPC MISSOURI, LLC
By: American Italian Pasta Company, its
Managing Member
By: /s/ Xxxxxx Xxxxxxxxxx
---------------------------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Executive Vice President & Chief Financial
Officer
AIPC SOUTH CAROLINA, INC.
By: /s/ Xxxxxx Xxxxxxxxxx
--------------------------------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: President
AIPC ARIZONA, LLC
By: AIPC Finance, Inc., its sole Member
By: /s/ Xxxxxx Xxxxxxxxxx
---------------------------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: President
ACKNOWLEDGED AND AGREED:
BANK OF AMERICA, N.A., as
Administrative Agent
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Assistant Vice President
SCHEDULE 1.1(b)
PRICING SCHEDULE
The Applicable Eurocurrency Margin, the Applicable Base Rate Margin,
the Non-Use Fee Rate and the LC Fee Rate shall be determined based on the
applicable Leverage Ratio as set forth below.
Applicable Eurocurrency
Margin/LC Fee Rate for Applicable Base
Level Letters of Credit Rate Margin Non-Use Fee Rate
----- ----------------- ----------- ----------------
Level I 0.625% 0.000% 0.150%
Level II 0.750% 0.000% 0.175%
Level III 0.875% 0.000% 0.200%
Level IV 1.000% 0.000% 0.225%
Level V 1.250% 0.000% 0.275%
Level VI 1.625% 0.375% 0.350%
Level VII 2.000% 0.750% 0.400%
Level VIII 2.375% 1.125% 0.475%
Level IX 2.750% 1.500% 0.550%
Level I applies when the Leverage Ratio is less than or equal to 1.00 to 1.
Level II applies when the Leverage Ratio is greater than 1.00 to 1 but less
than or equal to 1.50 to 1.
Level III applies when the Leverage Ratio is greater than 1.50 to 1 but
less than or equal to 2.00 to 1.
Level IV applies when the Leverage Ratio is greater than 2.00 to 1 but less
than or equal to 2.50 to 1.
Level V applies when the Leverage Ratio is greater than 2.50 to 1 but less
than or equal to 3.00 to 1.
Level VI applies when the Leverage Ratio is greater than 3.00 to 1 but less
than or equal to 3.25 to 1.
Level VII applies when the Leverage Ratio is greater than 3.25 to 1 but
less than or equal to 3.50 to 1.
Level VIII applies when the Leverage Ratio is greater than 3.50 to 1 but
less than or equal to 3.75 to 1.
Level IX applies when the Leverage Ratio is greater than 3.75 to 1.
The applicable Level shall be adjusted, to the extent applicable, 45
days (or, in the case of the last Fiscal Quarter of any Fiscal Year, 90 days)
after the end of each Fiscal Quarter based on the Leverage Ratio as of the last
day of such Fiscal Quarter; provided that if the Company fails to deliver the
financial statements required by Section 10.1.1 or 10.1.2, as applicable, by the
due date therefor, Level IX shall apply from such due date until such financial
statements are delivered; and provided, further, that if, pursuant to the
proviso to the definition thereof, Consolidated EBITDA increases or decreases on
a pro forma basis as the result of an Acquisition or disposition, then the
applicable Level shall be immediately adjusted, if applicable, on the date on
which such Acquisition or disposition is consummated (giving effect to such
increase or decrease in Consolidated EBITDA and any change in the amount of
Funded Debt then outstanding). Any adjustment to a Level shall apply immediately
for all outstanding Loans and Letters of Credit.
