December 14, 2005
American Italian Pasta Company
0000 X. Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx Xxxx, XX 00000
Re: Waivers under Credit Agreement
Ladies/Gentlemen:
Please refer to the Credit Agreement dated as of July 16, 2001 (as
previously amended or otherwise modified, the "Credit Agreement") among American
Italian Pasta Company (the "Company"), various financial institutions and Bank
of America, N.A., as administrative agent (in such capacity, the "Administrative
Agent"). Capitalized terms used but not otherwise defined herein shall have the
respective meanings given to them in the Credit Agreement.
At the request of the Company, the Required Lenders waive until the Waiver
Termination Date (as defined below) any Event of Default (collectively, the
"Known Defaults") arising from:
(a) The failure of the Company to comply with Section 10.6.1 (Minimum Fixed
Charge Coverage Ratio), 10.6.2 (Maximum Leverage Ratio) and 10.6.4 (Minimum
EBITDA) of the Credit Agreement for the Computation Periods ended July 1, 2005
and September 30, 2005 and the Computation Period ending December 30, 2005.
(b) The failure of the Company to comply with Section 10.2(i) of the Credit
Agreement or the inaccuracy of (i) the representation and warranty in Section
9.4 of the Credit Agreement or (ii) any certificate delivered pursuant to
Section 10.1.1, 10.1.2 or 10.1.3 with respect to any financial statements
previously delivered by the Company to the Administrative Agent or any Lender
pursuant to the Credit Agreement, in each case to the extent arising out of the
matters described by the Company in its press release dated August 9, 2005 and
in conference calls with the Lenders held on July 12, 2005, August 11, 2005,
September 8, 2005, October 28, 2005 and November 30, 2005 (the "Disclosed
Matters").
(c) The failure by the Company to deliver (i) financial statements and the
corresponding compliance certificate pursuant to Sections 10.1.2 and 10.1.3 of
the Credit Agreement for the Fiscal Quarter ended July 1, 2005 and (ii)(x)
financial statements and the corresponding compliance certificate pursuant to
Sections 10.1.1 and 10.1.3 of the Credit Agreement for the Fiscal Year ended
September 30, 2005 and (y) financial statements and the corresponding compliance
certificate pursuant to Sections 10.1.2 and 10.1.3 of the Credit Agreement for
the Fiscal Quarter ending December 30, 2005 so long as the Company delivers to
the Administrative Agent and the Lenders (A) in the case of the foregoing clause
(ii)(x), financial statements for such Fiscal Year not later than December 30,
2005, and (B) in the case of the foregoing clause (ii)(y), financial statements
for such Fiscal Quarter not later than February 13, 2006, together in each case
with: (A) a statement to the effect that such financial statements accurately
set forth the financial condition and results of operations of the Company and
its Subsidiaries for, and as of the end of, such fiscal period, without giving
effect to the Permitted
Adjustments (as defined below); and (B) calculations in reasonable detail (but
without giving effect to the Permitted Adjustments) of the financial covenants
set forth in Section 10.6 of the Credit Agreement as of the last day of such
fiscal period. For purposes of this clause (c), "Permitted Adjustments" means
(1) adjustments resulting (or that may result) from the pending investigation by
the audit committee of the Company's board of directors, (2) adjustments that
may result from the Disclosed Matters and (3) normal year-end audit adjustments.
(d) The restatement of the Company's financial statements for the fiscal
periods ending on or prior to April 1, 2005.
(e) The failure by the Company to deliver the consolidated plan and
financial forecast for the Fiscal Year commencing October 1, 2005 pursuant to
Section 10.1.8 of the Credit Agreement.
As used herein, "Waiver Termination Date" means the earliest to occur of
(i) failure of the Company to comply with the requirements set forth in clause
(c) of the preceding paragraph, (ii) the occurrence of any Event of Default or
Unmatured Event of Default other than the Known Defaults, (iii) March 16, 2006
and (iv) the date of the effectiveness of an amendment to the Credit Agreement
amending the financial covenants set forth in clause (a) of the preceding
paragraph. The Company acknowledges that (absent the Required Lenders granting,
in their sole and complete discretion, a subsequent waiver or amendment),
immediate Events of Default shall exist on the Waiver Termination Date as a
result of (x) the Known Defaults and (y) any other then-existing event that
constitutes an Event of Default.
In consideration of the waivers set forth above, the Company agrees with
the Lenders that (a) from the date of effectiveness hereof through the end of
the Waiver Period, notwithstanding any contrary provision of the Credit
Agreement, (i) the Applicable Eurocurrency Margin and the LC Fee Rate will equal
4.500%, (ii) the Applicable Base Rate Margin will equal 3.250% and (iii) the
Non-Use Fee Rate will equal 0.700% and (b) during the Waiver Period, and at any
time thereafter during the existence of an Event of Default, the Company will
not, and will not permit any Subsidiary to, make any Restricted Payment of the
type described in clause (iii) of the proviso to Section 10.10 of the Credit
Agreement, other than repurchases of the Company's capital stock (i) from
current or former employees of the Company or any Subsidiary pursuant to the
American Italian Pasta Company 2000 Equity Incentive Plan, (ii) from the
Company's 401-k plan and (iii) pursuant to the terms of any other employee
benefit arrangement as in effect prior to September 1, 2005.
This waiver letter is limited to the matters specifically set forth herein
and shall not be deemed to constitute a waiver, consent or amendment with
respect to any other matter whatsoever. Except as specifically set forth herein,
the Credit Agreement shall remain in full force and effect and is hereby
ratified in all respects.
This waiver letter shall become effective when the Administrative Agent has
received (a) counterparts hereof executed by the Required Lenders and
acknowledged by the Company and each Guarantor and (b) a waiver fee for each
Lender that, on or prior to 5:00 p.m. (Chicago time) on December 14, 2005,
delivers an executed counterpart hereof to the Administrative Agent,
such waiver fee to equal 0.25% of the sum of (i) the outstanding principal
amount of such Lender's Term Loan and (ii) such Xxxxxx's Revolving Commitment.
This waiver letter may be executed in counterparts and by the parties
hereto on separate counterparts. A signature page hereto delivered by facsimile
shall be effective as delivery of an original counterpart.
This letter agreement 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.
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/ Xxxx Xxxxxxx
------------------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President
JPMORGAN CHASE BANK, N.A. (f/k/a Bank
One, NA), as Documentation Agent and as a Lender
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxxxx X. Xxxxxx
----------------------------------------
Title: Vice President
---------------------------------------
U.S. BANK NATIONAL
ASSOCIATION, as Syndication
Agent and as a Lender
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
ING CAPITAL LLC
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
KEYBANK NATIONAL ASSOCIATION, as Co-
Agent and as a Lender
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH, as Co-
Agent and as a Lender
By: /s/ Xxxx Xxxxxxxx
------------------------------------------
Name: Xxxx Xxxxxxxx
----------------------------------------
Title: Executive Director
---------------------------------------
By: /s/ Xxxxxx Xxxxxxx
------------------------------------------
Name: Xxxxxx Xxxxxxx
----------------------------------------
Title: Counsel/Executive Director
---------------------------------------
XXXXX FARGO BANK, N.A., as Co-Agent and as
a Lender
By: /s/ Xxxxx Xxxxx
------------------------------------------
Name: Xxxxx Xxxxx
----------------------------------------
Title: Senior Vice President
---------------------------------------
BANCA NAZIONALE DEL LAVORO S.P.A.
By: /s/ Xxxx Xxxxxx
------------------------------------------
Name: Xxxx Xxxxxx
----------------------------------------
Title: Relationship Manager
---------------------------------------
By: /s/ Xxxxxxxxx XxXxxxx
------------------------------------------
Name: Xxxxxxxxx XxXxxxx
----------------------------------------
Title: Senior Manager
---------------------------------------
THE BANK OF NEW YORK
By: /s/ Xxxxxx X. XxXxxxxx
------------------------------------------
Name: Xxxxxx X. XxXxxxxx
----------------------------------------
Title: Vice President
---------------------------------------
COMERICA BANK
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
COMMERCE BANK, N.A.
By: /s/ Xxxxx X. Xxxxx
------------------------------------------
Name: Xxxxx X. Xxxxx
----------------------------------------
Title: Vice President
---------------------------------------
SUNTRUST BANK, as Co-Agent and as a Lender
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxx
----------------------------------------
Title: Director
---------------------------------------
UNICREDITO ITALIANO
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
UMB BANK, N.A.
By: /s/ Xxxxx X Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
----------------------------------------
Title: Senior Vice President
---------------------------------------
COBANK, ACB
By: /s/ Xxxx Xxxx Xxxxx
------------------------------------------
Name: Xxxx Xxxx Xxxxx
----------------------------------------
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 - Syndiated Finance
---------------------------------------
AGFIRST, FCB
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxx
----------------------------------------
Title: Vice President
---------------------------------------
X.X. XXXXXX, FCB (f/k/a Farm Credit Bank of
Wichita)
By: /s/ Xxxx X. Xxxxxxxxxxx
------------------------------------------
Name: Xxxx X. Xxxxxxxxxxx
----------------------------------------
Title: Vice President
---------------------------------------
FARM CREDIT SERVICES OF AMERICA, PCA
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
GREENSTONE FARM CREDIT SERVICES, FLCA
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
------------------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
----------------------------------------
Title: VP/Sr. Lending Officer
---------------------------------------
NORTHWEST FARM CREDIT SERVICES, PCA
By: /s/ Xxxxx Xxxxxx
------------------------------------------
Name: Xxxxx Xxxxxx
----------------------------------------
Title: Sr. Credit Officer
---------------------------------------
1st FARM CREDIT SERVICES
By: /s/ Xxxx X. Xxxxxxxxxx
------------------------------------------
Name: Xxxx X. Xxxxxxxxxx
----------------------------------------
Title: Vice President, Capital Markets
---------------------------------------
BDC FINANCE, L.L.C.
By: /s/ Xxxxx X. Xxxxx, Xx.
------------------------------------------
Name: Xxxxx X. Xxxxx, Xx.
----------------------------------------
Title: BDC Finance, L.L.C.
---------------------------------------
BLUE RIDGE INVESTMENTS, L.L.C.
By: /s/ Xxxxxx X. Carp
------------------------------------------
Name: Xxxxxx X. Xxxx
----------------------------------------
Title: SVP - Finance
---------------------------------------
CANADIAN IMPERIAL BANK OF COMMERCE
By: /s/ Xxxx X'Xxxx
------------------------------------------
Name: Xxxx X'Xxxx
----------------------------------------
Title: Authorized Signatory
---------------------------------------
By: /s/ Xxxxxx Xxxxx
------------------------------------------
Name: Xxxxxx Xxxxx
----------------------------------------
Title: Authorized Signatory
---------------------------------------
CITIGROUP FINANCIAL PRODUCTS INC.
By: /s/ Xxxx Xxxx
------------------------------------------
Name: Xxxx Xxxx
----------------------------------------
Title: Authorized Signatory
---------------------------------------
DEUTSCHE BANK AG NEW YORK BRANCH
By: DBServices New Jersey, Inc.
By: /s/ Xxxxxxx Xxxxxxx
------------------------------------------
Name: Xxxxxxx Xxxxxxx
----------------------------------------
Title: Assistant Vice President
---------------------------------------
By: /s/ Xxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxx
----------------------------------------
Title: Vice President
---------------------------------------
DKR WOLF POINT HOLDING FUND LIMITED
By: /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxxxx
----------------------------------------
Title: Senior Managing Director
---------------------------------------
FARM CREDIT SERVICES OF MISSOURI, PCA
By: /s/ Xxxxx Xxxxxx
------------------------------------------
Name: Xxxxx Xxxxxx
----------------------------------------
Title: Senior Vice President, Credit Services
---------------------------------------
LENNOX AVENUE CLO I, LIMITED
By: XXXXXX, XXXXXX & CO., L.P.
AS COLLATERAL MANAGER
By: /s/ Xxxxx Xxxxxx
------------------------------------------
Name: Xxxxx Xxxxxx
----------------------------------------
Title: Managing Director
---------------------------------------
NORTHWOODS CAPITAL V, LIMITED
By: XXXXXX, XXXXXX & CO., L.P.
AS COLLATERAL MANAGER
By: /s/ Xxxxx Xxxxxx
------------------------------------------
Name: Xxxxx Xxxxxx
----------------------------------------
Title: Managing Director
---------------------------------------
NORTHWOODS CAPITAL IV, LIMITED
By: XXXXXX, XXXXXX & CO., L.P.
AS COLLATERAL MANAGER
By: /s/ Xxxxx Xxxxxx
-------------------------------------------
Name: Xxxxx Xxxxxx
-----------------------------------------
Title: Managing Director
----------------------------------------
ACKNOWLEDGED AND AGREED:
AMERICAN ITALIAN PASTA COMPANY
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
-----------------------------------
Title: Executive VP / CFO
----------------------------------
AIPC FINANCE, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------------
Title: Executive VP / CFO
-----------------------------------
AIPC SALES CO.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------------
Title: Executive VP / CFO
-----------------------------------
AIPC WISCONSIN, LIMITED PARTNERSHIP
By: America Italian Pasta Company, its General Partner
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxx
-------------------------------------
Title: Executive VP / CFO
------------------------------------
AIPC MISSOURI, LLC
By: American Italian Pasta Company, its Managing Member
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------------------
Title: Executive VP / CFO
-------------------------------------
AIPC SOUTH CAROLINA, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxx
---------------------------------------
Title: Executive VP / CFO
--------------------------------------
AIPC ARIZONA, LLC
By: AIPC Finance, Inc., its sole Member
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
---------------------------------------
Title: Executive VP / CFO
--------------------------------------
