THIRD AMENDMENT TO CREDIT AGREEMENT
Exhibit
10(b)
THIRD AMENDMENT TO CREDIT
AGREEMENT
THIS THIRD AMENDMENT TO CREDIT
AGREEMENT (the “Amendment”) is made effective
as of the 29th
day of October, 2008 by and among TASTY BAKING COMPANY, a
Pennsylvania corporation (“Company”), the direct and
indirect subsidiaries of the Company from time to time parties to the Credit
Agreement (as defined below) (the “Subsidiary Borrowers” and with
the Company, collectively, the “Borrowers”), each lender from
time to time party to the Credit Agreement (collectively, the “Lenders” and individually, a
“Lender”), and CITIZENS BANK OF PENNSYLVANIA, as
Administrative Agent, Collateral Agent, Swing Line Lender and L/C Issuer (the
“Agent”).
BACKGROUND
A. Borrowers,
Lenders and Agent have previously entered into a certain Credit Agreement dated
September 6, 2007, amended by (i) that certain First Amendment to Credit
Agreement dated December 12, 2007 and (ii) that certain Second Amendment to
Credit Agreement dated July 16, 2008 (as amended and as may be further amended,
supplemented or restated from time to time, the “Credit Agreement”), pursuant
to which, inter
alia, Agent and
Lenders agreed to extend to Borrowers certain credit facilities subject to the
terms and conditions set forth therein.
B. Borrowers,
Lenders and Agent have agreed to amend the terms of the Credit Agreement in
accordance with the terms and conditions hereof.
C. Capitalized
terms used herein and not otherwise defined in this Amendment shall have the
meanings set forth therefor in the Credit Agreement.
NOW THEREFORE, the parties
hereto, intending to be legally bound hereby, agree as follows:
1. Definitions.
1.1 The
pricing grid contained within the definition of “Applicable Rate” set forth in
Section
1.01 of the Credit Agreement is hereby amended to read, in its entirety,
as follows:
|
Applicable
Rate
|
||||
|
Pricing
Level
|
Operating
Leverage
Ratio
|
Unused
Commitment
Fee
|
LIBOR
Rate +
___________
L/C
Fee
|
Daily
LIBOR
Rate
+
|
|
1
|
<1.0x
|
0.20%
|
1.25%
|
1.25%
|
|
2
|
>1.0x <
2.0x
|
0.25%
|
1.75%
|
1.75%
|
|
3
|
>2.0x <
3.0
|
0.30%
|
2.25%
|
2.25%
|
|
4
|
>3.0x <
4.0x
|
0.40%
|
2.75%
|
2.75%
|
|
5
|
>4.0
x
|
0.50%
|
3.25%
|
3.25%
|
1.2 The
definition of “Daily LIBOR
Loan” set forth in Section
1.01 of the Credit Agreement is hereby amended to read, in its entirety,
as follows:
““Daily LIBOR Loan”
means any Fixed Asset Loan, Swing Line Loan or Working Capital Revolver Loan
bearing interest based on the Daily LIBOR Rate plus the applicable basis points
specified in the calculation of the Applicable Rate for a Daily LIBOR
Loan.”
1.3 The
following definitions are hereby added to Section
1.01 of the Credit Agreement in their proper alphabetical order and when
used in this Amendment, such terms shall have the following
meanings:
““Daily LIBOR Fixed Asset
Loan” means a Fixed Asset Loan that is a Daily LIBOR Loan.”
““Daily LIBOR Working Capital
Revolver Loan” means a Working Capital Revolver Loan that is a Daily
LIBOR Loan.”
1.4 (a) The
definition of “Prime
Rate” set forth in Section
1.01 of the Credit Agreement is hereby deleted in its entirety and all
references to the defined term “Prime Rate” contained in the Credit
Agreement and Loan Documents are hereby deleted in their entirety and replaced
with the defined term “Daily
LIBOR Rate”; (b) the definition of “Prime Rate Fixed Asset Loan”
set forth in Section
1.01 of the Credit Agreement is hereby deleted in its entirety and all
references to the defined term “Prime Rate Fixed Asset Loan”
contained in the Credit Agreement and Loan Documents are hereby deleted in their
entirety and replaced with the defined term “Daily LIBOR Fixed Asset Loan”;
(c) the definition of “Prime
Rate Loan” set forth in Section
1.01 of the Credit Agreement is hereby deleted in its entirety and all
references to the defined term “Prime Rate Loan” contained in the
Credit Agreement and Loan Documents are hereby deleted in their entirety and
replaced with the defined term “Daily LIBOR Loan”; and (d) the
definition of “Prime Rate
Working Capital Revolver Loan” set forth in Section
1.01 of the Credit Agreement is hereby deleted in its entirety and all
references to the defined term “Prime Rate Working Capital Revolver
Loan” contained in the Credit Agreement and Loan Documents are hereby
deleted in their entirety and replaced with the defined term “Daily LIBOR Working Capital Revolver
Loan”.
2. Condition
of Fixed Asset Loan; Maximum Funding Cap. Section
4.04(g) of the Credit Agreement is hereby amended and restated to read in
its entirety as follows:
“(g) Lenders
shall have no obligation to make any Fixed Asset Loan advances which would cause
the aggregate amount of all advances of Fixed Asset Loans, plus all advances
under the Job Bank Term Loan, plus all advances under the MELF Financing, plus
all advances under the PIDC Financing to exceed $44,000,000 in total, unless and
until Agent has received evidence reasonably satisfactory to Agent that fee
simple title to the Navy Yard Property has been conveyed to Landlord pursuant to
the terms of the PAID Agreement of Sale.”
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2.1 Minimum
EBITDA. Section
6.12(a) of the Credit Agreement is hereby amended and restated to read in
its entirety as follows:
“(a) Minimum
EBITDA. Maintain on a consolidated basis EBITDA of at least
the amount indicated for each period specified below:
| Period | Minimum Amount | |||
| From the date hereof through the fiscal quarter ending on or about 09/30/08 | $13,000,000 | |||
| For the fiscal quarter ending on or about 12/31/08 | $11,275,000 | |||
| From the fiscal quarter ending on or about 3/31/09 through the fiscal quarter ending on or about 09/30/09 | $15,000,000 | |||
| From the fiscal quarter ending on or about 12/31/09 through the fiscal quarter ending on or about 09/30/10 | $15,250,000 | |||
| From the fiscal quarter ending on or about 12/31/10 through the fiscal quarter ending on or about 09/30/11 | $21,000,000 | |||
| For the fiscal quarter ending on or about 12/31/11 and for all fiscal quarter thereafter | $25,000,000 | |||
|
The
amount will be calculated at the end of each fiscal quarter using the
results of the twelve-month period then ended.”
|
||||
3. Maximum
Operating Leverage Ratio. Notwithstanding the effective date
of this Amendment, effective as of September 27, 2008, Section
6.12(c) of the Credit Agreement is hereby amended and restated to read in
its entirety as follows:
“(c) Maximum Operating Leverage
Ratio. Maintain on a consolidated basis an Operating Leverage
Ratio not exceeding the ratios indicated for each period specified
below:
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| Period | Maximum Ratio | ||
| From the date hereof through 12/29/07 | 3.75 to 1.0 | ||
| From 12/30/07 through 6/28/08 | 4.25 to 1.0 | ||
| From 6/29/08 through 9/28/08 | 4.90 to 1.0 | ||
| From 9/29/08 through 12/27/08 | 6.0 to 1.0 | ||
| From 12/28/08 through 12/26/09 | 6.0 to 1.0 | ||
| From 12/27/09 through 12/25/10 | 4.75 to 1.0 | ||
| From 12/26/11 and thereafter | 3.75 to 1.0 | ||
|
This
ratio will be calculated at the end of each fiscal quarter using the
results of the twelve-month period then
ended.”
|
|||
4. No Prime Rate Loans. Notwithstanding
anything to the contrary set forth in the Loan Agreement, Borrowers shall not
request and Lenders shall have no obligation to make or continue any Prime Rate
Loans.
5. Amendment
Fee. As consideration for Agent and Lenders to enter into this
Amendment, Borrowers shall pay to Agent, for the account of each Lender in
accordance with their respective Applicable Percentages of the Loans, an
amendment fee in an amount of $150,000 (the “Amendment Fee”). The
Amendment Fee is due and payable in full upon execution of this
Amendment. Borrowers agree that the Amendment Fee has been fully
earned by Agent and Lenders and is non-refundable.
6. Other
References. All references in the Credit Agreement and all the
Loan Documents to the term “Loan Documents” shall mean the
Loan Documents as defined therein and this Amendment and any and all other
documents executed and delivered by Borrowers pursuant to and in connection
herewith.
7. Covenants
and Representations and Warranties. Borrowers
hereby:
7.1 ratify,
confirm and agree that the Credit Agreement, as amended by this Amendment, and
all other Loan Documents are valid, binding and in full force and effect as of
the date of this Amendment, and enforceable in accordance with their
terms.
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7.2 agree that
they have no defense, set-off, counterclaim or challenge against the payment of
any sums owed or owing under the Loan Documents or the enforcement of any of the
terms of the Loan Documents.
7.3 ratify,
confirm and continue all liens, security interests, pledges, rights and remedies
granted to Agent for the benefit of Lenders in the Loan Documents and agree that
such liens, security interests and pledges shall secure all of the Obligations
under the Loan Documents as amended by this Amendment.
7.4 represent
and warrant that all representations and warranties in the Loan Documents are
true and complete as of the date of this Amendment.
7.5 agree that
their failure to comply with or perform any of their covenants or agreements in
this Amendment will constitute a Default or an Event of Default under the Loan
Documents subject to applicable notice and cure periods set forth in Section
9.01 of the Credit Agreement.
7.6 represent
and warrant that no condition or event exists after taking into account the
terms of this Amendment which would constitute a Default or an Event of
Default.
7.7 represent
and warrant that the execution and delivery of this Amendment by Borrowers and
all documents and agreements to be executed and delivered pursuant to this
Amendment:
(a) have been
duly authorized by all requisite action of Borrowers;
(b) will not
conflict with or result in a breach of, or constitute a default (or with the
passage of time or the giving of notice or both, will constitute a default)
under, any of the terms, conditions, or provisions of any applicable statute,
law, rule, regulation or ordinance or any Borrower’s Articles of Incorporation
or By-Laws or any indenture, mortgage, loan or credit agreement or instrument to
which any Borrower is a party or by which it may be bound or affected, or any
judgment or order of any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign; and
(c) will not
result in the creation or imposition of any lien, charge or encumbrance of any
nature whatsoever upon any of the property or assets of Borrowers under the
terms or provisions of any such agreement or instrument, except liens in favor
of Lenders.
8. No
Novation or Waiver. Nothing contained herein constitutes a
novation of the Credit Agreement or any of the documents collateral thereto and
shall not constitute a release, termination or waiver of any of the liens,
security interests, rights or remedies granted to Agent and Lenders in the
Credit Agreement or any of the other Loan Documents, which liens, security
interests, rights or remedies are hereby ratified, confirmed, extended and
continued as security for all obligations secured by the Credit
Agreement. Nothing contained herein constitutes an agreement or
obligation by Agent or Lenders to grant any further amendments to the Credit
Agreement or any of the other Loan Documents.
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9. Inconsistencies. To
the extent of any inconsistency between the terms and conditions of this
Amendment and the terms and conditions of the Credit Agreement or the other Loan
Documents, the terms and conditions of this Amendment shall
prevail. All terms and conditions of the Credit Agreement and the
other Loan Documents not inconsistent herewith, shall remain in full force and
effect and are hereby ratified and confirmed by Borrowers.
10. Binding
Effect. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective permitted successors and
assigns.
11. No Third
Party Beneficiaries. The rights and benefits of this Amendment
and the Loan Documents shall not inure to the benefit of any third
party.
12. Headings. The
headings of the Sections of this Amendment are inserted for convenience only and
shall not be deemed to constitute a part of this Amendment.
13. Severability. The
provisions of this Amendment and all other Loan Documents are deemed to be
severable, and the invalidity or unenforceability of any provision shall not
affect or impair the remaining provisions which shall continue in full force and
effect.
14. Modifications. No
modifications of this Amendment or any of the Loan Documents shall be binding or
enforceable unless done in accordance with Section
11.01 of the Credit Agreement.
15. Law
Governing. This Amendment has been made, executed and
delivered in the Commonwealth of Pennsylvania and will be construed in
accordance with and governed by the laws of such Commonwealth, without regard to
any rules or principles regarding conflicts of law or any rule or canon of
construction which interprets agreements against the draftsman.
16. Waiver of
Right to Trial by Jury. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AMENDMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (a) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE FOREGOING WAIVER AND (b) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
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17. Counterparts;
Facsimile Signatures. This Amendment may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed to be an original without the production of any other
counterpart. Any signature delivered via facsimile or other
electronic means shall be deemed an original signature hereto.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the
parties hereto have executed this Amendment as of the date first above
written.
| BORROWERS: | ||
| TASTY BAKING COMPANY | ||
| By: | /s/ Xxxxxx X. Xxxxxxxxxx | |
| Name: | Xxxxxx X. Xxxxxxxxxx | |
| Title: | Vice President & Corporate Treasurer | |
| TASTYKAKE INVESTMENT COMPANY | ||
| By: | /s/ Xxxxxx X. Xxxxxxxxxx | |
| Name: | Xxxxxx X. Xxxxxxxxxx | |
| Title: | Treasurer | |
| TBC FINANCIAL SERVICES, INC. | ||
| By: | /s/ Xxxxxx X. Xxxxxxxxxx | |
| Name: | Xxxxxx X. Xxxxxxxxxx | |
| Title: | Treasurer | |
| TASTY BAKING OXFORD, INC. | ||
| By: | /s/ Xxxxxx X. Xxxxxxxxxx | |
| Name: | Xxxxxx X. Xxxxxxxxxx | |
| Title: | Treasurer | |
| AGENT: | ||
|
CITIZENS BANK OF
PENNSYLVANIA,
as
Administrative Agent,
Collateral Agent and L/C Issuer
|
||
| By: | /s/ W. Xxxxxxx Xxxxxx | |
| Name: | W. Xxxxxxx Xxxxxx | |
| Title: | Senior Vice President | |
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|
CITIZENS
BANK OF PENNSYLVANIA, as Lender
|
||
| By: | /s/ W. Xxxxxxx Xxxxxx | |
| Name: | W. Xxxxxxx Xxxxxx | |
| Title: | Senior Vice President | |
| BANK OF AMERICA, N.A., as Lender | ||
| By: | /s/ Xxxxxx Xxxxxx | |
| Name: | Xxxxxx Xxxxxx | |
| Title: | Vice President | |
| SOVEREIGN BANK, as Lender | ||
| By: | /s/ Xxxxxx Xxxxxxxxxx | |
| Name: | Xxxxxx Xxxxxxxxxx | |
| Title: | Senior Vice President | |
|
MANUFACTURERS AND TRADERS TRUST
COMPANY, as
Lender
|
||
| By: | /s/ Xxxxx X. Xxxxx | |
| Name: | Xxxxx X. Xxxxx | |
| Title: | Vice President | |
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