FOURTH AMENDMENT TO CREDIT AGREEMENT
Exhibit 10
(ee)
FOURTH AMENDMENT TO CREDIT
AGREEMENT
THIS FOURTH AMENDMENT TO CREDIT
AGREEMENT (the “Amendment”) is made effective
as of the 24th day
of December, 2009 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, (ii) that certain Second Amendment to Credit
Agreement dated July 16, 2008 (the “Second Amendment”) and (iii)
that certain Third Amendment to Credit Agreement dated October 29, 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
definition of “EBITDA” set forth in
Section
1.01 of the Credit Agreement is hereby amended and restated to read in
its entirety as follows:
““EBITDA” means with
respect to Borrowers and their Subsidiaries for any period of four (4)
consecutive quarters, consolidated net income (excluding Option Proceeds and
extraordinary gains and losses), plus the sum of (a)
income tax expense, (b) Interest Expense, (c) depreciation and amortization, (d)
non-cash pension charges, but only to the extent such non-cash pension charges
do not exceed fifteen percent (15%) of the Tangible Net Worth as determined at
the end of such period, (e) any other non-cash gains to or non-cash charges
against net income acceptable to the Agent and the Required Lenders (which shall
include a non-cash charge against net income in connection with stock-based
compensation), and (f) accrued rent expense (net of any cash rent paid) in
connection with the Navy Yard Lease, less any non-cash
pension gains during such period, in each case to the extent deducted in
determining net income, as determined for the Borrowers and their Subsidiaries
in accordance with GAAP. “Extraordinary gains and losses” shall
include for purposes of calculating EBITDA for compliance with the terms of this
document, transition costs, restructure charges and any other gains or losses
permitted by the Agent that result from the Borrowers’ execution of the Navy
Yard Project. For purposes of clarification, the “transition costs”
referred to in the preceding sentence include training costs, transportation
costs, backfill labor expenses, labor severance expenses, and redundant utility
and operating expenses for the Hunting Park Property and Fox Street Property
during the transition and decommissioning processes and thereafter until sold or
otherwise disposed of.
Notwithstanding
the foregoing, solely for purposes of calculating Borrowers’ EBITDA in
connection with the Minimum EBITDA covenant set forth in Section 6.12(a) and
the Operating Leverage Ratio covenant set forth in Section 6.12(c), in
the event that the public accounting firm engaged by Borrowers to prepare and
audit Borrowers’ financial statements for the 2009 fiscal year (and for any
subsequent fiscal year) determines that either the Navy Yard Lease or the
Improvements Agreement is required under Statement of Financial Accounting
Standards No. 13, as amended, to be treated as a Capitalized Lease under GAAP
for all or any part of the 2009 fiscal year (or any subsequent fiscal year),
then the aggregate amount of cash rent paid by Borrowers pursuant to the Navy
Yard Lease and/or Improvements Agreement, as applicable, during the twelve-month
period as of the end of the applicable fiscal quarter, shall not be added back
to Borrowers’ consolidated net income notwithstanding how such cash rent is
classified for accounting purposes under GAAP, including any classification of
any portion of such cash rent as Interest Expense, depreciation or
amortization.”
1.2 The
following definition shall be hereby added to Section
1.01 of the Credit Agreement in its proper alphabetical order and when
used in this Amendment shall have the following meaning:
““Palletizer Lease”
means that certain proposal dated October 15, 2008 from RBS Asset Finance to
Borrowers.”
2.
Excess
Cash Flow Recapture. The first sentence of Section
2.11 of the Credit Agreement is hereby amended to read as
follows:
2
“For each
fiscal year of Borrowers, commencing with Borrowers’ fiscal year ending December
25, 2010, at any time Borrowers’ Operating Leverage Ratio as of such fiscal year
end exceeds 2.5 to 1.0, Borrowers shall make a mandatory prepayment of the Fixed
Asset Loans, the Job Bank Term Loan and the PIDC Financing, within ninety (90)
days after each fiscal year end of Borrowers in an aggregate amount equal to
fifty percent (50%) of Borrowers' Excess Cash Flow for the fiscal year then
ended.”
3.
Certificates;
Other Information. Section
6.02 of the Credit Agreement is hereby amended by adding the following
subsections
(h), (i), (j) and (k):
“(h)
promptly, but in no event later than ten (10) Business Days
following receipt by Borrowers, all actuarial valuation reports with respect to
Borrowers’ Plans;
(i)
promptly, but in no event later than ten (10)
Business Days following filing thereof by Borrowers with the Internal Revenue
Service, any and all income tax reports, including Form 5500 for each Plan year,
filed by Borrowers with respect to Borrowers’ Plans;
(j)
promptly, but in no event later than
ten (10) Business Days following receipt by Borrowers, any and all notices
received from the Internal Revenue Service or the PBGC, or any other
Governmental Authority, with respect to Borrowers’ Plans; and
(k)
in the event that any of
Borrowers’ Plans are deemed to be “at risk” (as defined in Section 430(i)(4) of
the Code), evidence that Borrowers have made any and all “minimum required
contributions” to all such Plans, including all “shortfall amortization charges”
and “waiver amortization charges” (as such terms are defined in Section 430 of
the Code) as a result of the current and prior years’ underfunding of such
Plans, at least ten (10) Business Days in advance of the due date
therefor.”
4.
Maximum
Operating Leverage Ratio. Notwithstanding the effective date
of this Amendment, effective as of December 26, 2009, 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:
3
|
Period
|
Maximum Ratio
|
|
From
the date hereof
|
3.75
to 1.0
|
|
through
12/29/07
|
|
|
From
12/30/07
|
4.25
to 1.0
|
|
through
6/28/08
|
|
|
From
6/29/08
|
4.90
to 1.0
|
|
through
9/28/08
|
|
|
From
9/29/08
|
6.0
to 1.0
|
|
through
12/27/08
|
|
|
From
12/28/08
|
6.0
to 1.0
|
|
through
12/26/09
|
|
|
From
12/27/09
|
5.75
to 1.0
|
|
through
3/27/10
|
|
|
From
3/28/10
|
5.50
to 1.0
|
|
through
6/26/10
|
|
|
From
6/27/10
|
4.75
to 1.0
|
|
through
12/25/10
|
|
|
From
12/26/10
|
3.75
to 1.0
|
|
and
thereafter
|
This ratio
will be calculated at the end of each fiscal quarter using the results of the
twelve-month period then ended.”
5.
Liquidity
Ratio. Section
6.12(d) of the Credit Agreement is hereby amended and restated to read in
its entirety as follows:
“(d) Liquidity
Ratio. Maintain on a consolidated basis a Liquidity Ratio of
at least 1.2 to 1.0 as of the end of each fiscal quarter; provided, however, for the
fiscal quarters ending December 26, 2009, March 27, 2010 and June 26, 2010,
Borrowers shall maintain on a consolidated basis a Liquidity Ratio of at least
1.0 to 1.0.”
6.
ERISA
Matters.
6.1 Subsection
(c)(iii) of Section
6.16 of the Credit Agreement is hereby amended to read as
follows:
“(iii) a
failure to make a “minimum required contribution” (as defined in Section 430 of
the Code), including all “shortfall amortization charges” and “waiver
amortization charges” (as such terms are defined in Section 430 of the Code) as
a result of the current and prior years’ underfunding of such Plans, for any
plan year beginning after December 31, 2007. Notwithstanding the
foregoing, if Borrowers fail to make a “minimum required contribution” when due,
Lenders agree to advance such “minimum required contribution” amounts as an
advance under the Working Capital Revolver Loan (in an outstanding amount not to
exceed such Lender’s Applicable Percentage of Working Capital Revolver Loans),
if requested by Agent, in its sole discretion, without any obligation to do so
and without further authorization from Borrowers, and pay the “minimum required
contribution” amount to SEI Private Trust Company, the Plan
Trustee. Borrowers hereby irrevocably authorize and agree that
Lenders may make such advances under the Working Capital Revolver Loan without
receipt by Agent of a formal request for advance. Borrowers agree to
promptly reimburse Agent, for the benefit of Lenders, any such amounts advanced
by Lenders with interest accruing thereon at the applicable Default Rate, upon
notice by Agent to Borrowers.”
4
6.2 Subsection
(d) of Section
6.16 of the Credit Agreement is hereby deleted.
7.
Permitted
Indebtedness. Sections
7.03(b) and 7.03(e) of the Credit Agreement are hereby amended and
restated to read in their entirety as follows:
“(b) Indebtedness
under the Improvements Agreement, the Navy Yard Lease and the Palletizer
Lease.”
“(e) Indebtedness
in respect of Capitalized Lease Obligations (not including any obligations that
may be capitalized under the Navy Yard Lease, the Improvements Agreement or the
Palletizer Lease), Synthetic Lease Obligations and purchase money obligations
for fixed or capital assets (other than the Fixed Asset Loans) within the
limitations set forth in Section 7.01(i);
provided, however, that the
aggregate amount of all such Indebtedness at any one time outstanding shall not
exceed $6,000,000.”
8.
Fixed
Asset Revolving Loan Advance Period. Section
1 of the Second Amendment is hereby amended to change the expiration date
of the “Fixed Asset Revolving Loan Advance Period” of “December 31, 2009” in the
first sentence of Section
1 of the Second Amendment to “June 30, 2010”.
5
9.
Letters
of Credit Issued Under Fixed Asset Revolving Loan
Sublimit. This will confirm the agreement of the parties that
Letters of Credit may be issued by the L/C Issuer under the Fixed Asset
Revolving Loan Sublimit in connection with the purchase of certain of the Navy
Yard Equipment in accordance with the Line Item Budget and Disbursement
Schedule. All such Letters of Credit shall be governed by the
provisions of Section
2.03 of the Credit Agreement, except that: (a) the L/C Expiration Date
for any such Letters of Credit issued under the Fixed Asset Revolving Loan
Sublimit shall mean the day that is the earlier of (i) twelve (12) months after
the date of issuance (subject to twelve (12) month renewals), or (ii) thirty
(30) days prior to the Fixed Asset Loan Maturity Date then in effect (or, if
such day is not a Business Day, the next preceding Business Day); (b) after
giving effect to any L/C Credit Extension with respect to any Letter of Credit
issued under the Fixed Asset Revolving Loan Sublimit, the Total Outstandings for
Fixed Asset Loans (including L/C Obligations for such Letters of Credit) for all
Lenders shall not exceed $10,000,000 and the Outstanding Amount of the L/C
Obligations for such Letters of Credit shall not exceed $10,000,000; (c) all
fundings by Lenders with respect to drawings and reimbursements with respect to
such Letters of Credit shall be based upon each such Lender’s Applicable
Percentage in the Fixed Asset Loan; (d) in the event that Borrowers do not
reimburse the L/C Issuer for any draw funded under such Letters of Credit in
accordance with the terms of Section
2.03 of the Credit Agreement, Borrowers shall be deemed to have requested
a Fixed Asset Loan Borrowing of a Daily LIBOR Loan to be disbursed on the Honor
Date in an amount equal to the Unreimbursed Amount; (e) all references in Section
2.03 of the Credit Agreement to the “Working Capital Revolver Loan” and
terms similar or related thereto, shall be deemed to be references to the “Fixed
Asset Loan” with respect to Letters of Credit issued under the Fixed Asset
Revolving Loan Sublimit, as applicable, mutatis mutandis; (f) all
references in the Credit Agreement and the Loan Documents to Letters of Credit
shall be deemed to include Letters of Credit issued under the Fixed Asset
Revolving Loan Sublimit, with such changes as the context may
require.
10. 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 $245,625 (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.
11. 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.
12. Release. Borrowers
acknowledge and agree that they have no claims, suits or causes of action
against Agent or Lenders and hereby remises, releases and forever discharges
Agent and Lenders, their respective officers, directors, shareholders,
employees, agents, successors and assigns, and any of them, from any claims,
suits or causes of action whatsoever, in law or at equity, which Borrowers have
or may have arising from any act, omission or otherwise, at any time up to and
including the date of this Amendment.
13.
Covenants
and Representations and Warranties. Borrowers
hereby:
13.1 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.
6
13.2 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.
13.3 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.
13.4 represent
and warrant that all representations and warranties in the Loan Documents are
true and complete as of the date of this Amendment.
13.5 ratify,
confirm and restate all of the waivers set forth in the Credit Agreement, all of
which are hereby incorporated by reference.
13.6 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.
13.7 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.
13.8 represent
and warrant that the Borrowers have the power and authority and all consent and
approvals needed in order to execute and deliver this Amendment and that the
person(s) executing this Amendment on behalf of the Borrowers has (have) the
power and authority to do so.
13.9 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 and approved 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.
7
14.
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.
15.
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.
16.
Binding
Effect. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective permitted successors and
assigns.
17.
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.
18.
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.
19.
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.
20.
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.
21.
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.
22.
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.
8
23.
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]
9
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
Treasuer
|
|
|
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/ Xxxx X.
Xxxxxxxx
|
|
|
Name:
Xxxx X. Xxxxxxxx
|
|
|
Title:
VP
|
10
|
CITIZENS BANK OF PENNSYLVANIA,
as Lender
|
|
|
By:
/s/ Xxxx X.
Xxxxxxxx
|
|
|
Name:
Xxxx X. Xxxxxxxx
|
|
|
Title:
VP
|
|
|
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:
SVP
|
|
|
MANUFACTURERS AND TRADERS
TRUST
COMPANY, as
Lender
|
|
|
By:
/s/ Xxxxxxxx X.
Xxxxxxxxx
|
|
|
Name:
Xxxxxxxx X.
Xxxxxxxxx
|
|
|
Title:
Assistant Vice
President
|
11
