EXHIBIT 10.16(b)
AMENDMENT NO. 1
DATED AS OF APRIL 18, 1997
TO THE
CREDIT AGREEMENT
DATED AS OF MAY 5, 1994
BETWEEN
ESKIMO PIE CORPORATION
AND
FIRST UNION NATIONAL BANK OF VIRGINIA
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS
Section 1.01 Definitions.................................................................1
ARTICLE II AMENDMENTS
Section 2.01 Amendments to the 1994 Credit Agreement.....................................1
ARTICLE III FEES
Section 3.01 Amendment Fee...............................................................3
ARTICLE IV EFFECTIVENESS
Section 4.01 Effectiveness...............................................................3
ARTICLE V MISCELLANEOUS
Section 5.01 Integration; Confirmation...................................................4
Section 5.02 Expenses....................................................................4
Section 5.03 Counterparts................................................................4
Section 5.04 Successors and Assigns......................................................4
Section 5.05 Governing Law...............................................................4
AMENDMENT NO. 1 (THIS "AMENDMENT") DATED AS OF APRIL 18,
1997 BETWEEN ESKIMO PIE CORPORATION, A VIRGINIA CORPORATION (THE
"COMPANY"), AND FIRST UNION NATIONAL BANK OF VIRGINIA, A NATIONAL
BANKING ASSOCIATION (THE "BANK").
The Company and the Bank are parties to a Credit Agreement dated
as of May 5, 1994 (the "1994 Credit Agreement"). The Company and the Bank
propose to modify certain terms of the 1994 Credit Agreement to, among other
things, amend certain financial covenants and the interest rate calculation
provided for therein. Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. Terms used but not otherwise defined
herein which are defined in the 1994 Credit Agreement shall have for purposes
hereof the respective meanings set forth therein.
ARTICLE II
AMENDMENTS
SECTION 2.01 AMENDMENTS TO THE 1994 CREDIT AGREEMENT.
(a) Section 1.1 of the 1994 Credit Agreement is hereby amended by
inserting the following definitions in appropriate alphabetical order:
"Applicable Margin" means the respective rate per annum
set forth under the caption "Applicable Margin" in the table below, which
shall be based upon the Fixed Charge Coverage Ratio for the period ending
on the most recent Determination Date as specified below:
Fixed Charge
Coverage Ratio Applicable Margin
------------------------------- --------------------------
Greater than 3.0/1.0 50 basis points
------------------------------- --------------------------
2.25/1.0 to 2.99/1.0 75 basis points
------------------------------- --------------------------
1.75/1.0 to 2.24/1.0 100 basis points
------------------------------- --------------------------
less than 1.75/1.0 125 basis points
------------------------------- --------------------------
The Applicable Margin shall be established at the end of (i) the
twelve-month period ending on December 31, 1997 and, thereafter (ii)
each fiscal quarter of the Company (each, a "Determination Date"). Any
change in the Applicable Margin following each Determination Date shall
be determined based upon the financial statements delivered to the Bank
pursuant to Section 5.1 (a) or (b), as applicable, and shall be
effective commencing on the date following the date such financial
statements are received by the Bank (or, if earlier, the date such
financial statements were required to be delivered to the Bank) and, in
each case, until the date following the date on which new financial
statements are delivered or are required to be delivered, whichever
shall first occur; provided, however, that if the Company shall fail to
deliver any such financial statements within the time period required by
Section 5.1(a) or (b), as applicable, then the Applicable Margin shall
be 125 basis points until the appropriate financial statements are so
delivered. From the Effective Date to the first Determination Date, the
Applicable Margin shall be 50 basis points.
"Consolidated EBITDA" means, for any period, the sum of
the amounts for such period of (i) Consolidated EBIT plus, to the extent
deducted in determining Consolidated Net Income for such period, (ii)
depreciation expense and (iii) amortization expense.
"Consolidated Fixed Charges" means, for any period, the
sum of (i) Consolidated Interest Expense for such period plus (ii)
Current Maturities of Consolidated Funded Debt determined as of the last
day of such period plus (iii) Dividends for such period.
"Current Maturities of Consolidated Funded Debt" means at
any date the aggregate amount of principal payments (including, without
limitation, the portion of any obligation under Capital Leases allocable
to amortization in accordance with GAAP) in respect of Consolidated
Funded Debt which are current liabilities as of such date.
"Dividends" means for any period the aggregate amount of
all dividends (other than dividends payable solely in capital stock of
the Company), returns of capital to the stockholders of the Company or
other distributions, payments or delivery of property or cash, or
authorization to make any such distribution, payment or delivery to the
stockholders of the Company, as such, or redemption, retirement,
purchase or other acquisition, directly or indirectly, for a
consideration, of any shares of any class of capital stock of the
Company now or hereafter outstanding (or any warrants for or options or
stock appreciation rights in respect of any of such shares), or set
aside of any funds for any of the foregoing purposes.
"Fixed Charge Coverage Ratio" means, for any period, the
ratio of (i) Consolidated EBITDA to (ii) Consolidated Fixed Charges for
such period.
(b) Section 2.5(a) of the 1994 Credit Agreement is hereby amended
by deleting the first sentence thereof and inserting in its place the following:
Unless otherwise required hereunder, each Loan shall bear
on interest on the outstanding principal amount thereof, for the
Interest Period applicable thereto, at a rate per annum equal to
the sum of (i) the applicable London Interbank Offered Rate plus
(ii) the Applicable Margin for such day.
(c) Section 6.1 of the Credit Agreement is hereby amended by
deleting the amount "$18,622,000" and inserting in its place the amount
"$20,000,000" and by deleting the date "December 31, 1994" and inserting in its
place the date "December 31, 1996".
(d) Section 6.3 of the 1994 Credit Agreement is hereby amended
to read in full as follows:
SECTION 6.3 FIXED CHARGE COVERAGE RATIO. The Fixed Charge
Coverage Ratio for (i) the six-month period ending June 30, 1997, (ii)
the twelve-month period ending December 31, 1997 and (iii) any period of
four consecutive fiscal quarters thereafter of the Borrower (taken as a
single accounting period), will not be less than 1.5 to 1.0.
ARTICLE III
FEES
SECTION 3.01 AMENDMENT FEE. The Company shall pay to the Bank an
amendment fee (the "Amendment Fee") in an amount equal to $15,000. Such
Amendment Fee shall be due and payable on the Effective Date set forth in
Section 4.01 below.
ARTICLE IV
EFFECTIVENESS
SECTION 4.01 EFFECTIVENESS. This Amendment shall become
effective on the date (the "Effective Date") when the Bank shall have received
counterparts of this Amendment duly executed by itself and the Company. On the
Effective Date, the 1994 Credit Agreement will be automatically amended as set
forth herein.
ARTICLE V
MISCELLANEOUS
SECTION 5.01 INTEGRATION; CONFIRMATION. On and after the
Effective Date, each reference in the 1994 Credit Agreement to "this Credit
Agreement", "this Agreement", "herein", "hereunder" or words of similar import,
and each reference to any other document delivered in connection with the "1994
Credit Agreement" shall be deemed to be of reference to the 1994 Credit
Agreement as amended by this Amendment; all other terms and provisions of the
1994 Credit Agreement shall continue in full force and effect and unchanged and
are hereby confirmed in all respects.
SECTION 5.02 EXPENSES. The Company shall reimburse the Bank for
any and all out-of-pocket expenses and charges paid or incurred by the Bank in
connection with the negotiation, preparation, execution and delivery (including
reasonable attorney's fees and disbursements of the Bank's special counsel) of
this Amendment.
SECTION 5.03 COUNTERPARTS. This Amendment may be signed in any
number of counterparts, each of which shall be an original, all of which taken
together shall constitute a single integrated agreement with the same effect as
if the signatures thereto and hereto were upon the same instrument. Complete
sets of counterparts shall be lodged with the Company and the Bank.
SECTION 5.04 SUCCESSORS AND ASSIGNS. The provisions of this
Amendment shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, executors, administrators, representatives,
successors and assigns.
SECTION 5.05 GOVERNING LAW. This Amendment shall be governed
by and construed in accordance with the laws of the Commonwealth of Virginia.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed as of the date first above written.
ESKIMO PIE CORPORATION
By: /s/ Thomas M. Mishoe, Jr.
--------------------------------
Name: Thomas M. Mishoe, Jr.
Title: CFO, Treasurer and Secretary
901 Moorefield Park Drive
Richmond, Virginia 23236
Telecopier No.: 804-323-3740
with a copy to:
Jean Penick Watkins, Esquire
Mays & Valentine
NationsBank Plaza
12th and Main Streets
Richmond, Virginia 23219
Telecopier No.: (804) 697-1339
FIRST UNION NATIONAL BANK OF VIRGINIA
By: /s/ David E. Brawley
--------------------------------
Name: David E. Brawley
Title: Assistant Vice President
One James Center
901 East Cary Street, 2nd Floor
Richmond, Virginia 23219
Attn: David E. Brawley
Telecopier No.: (804) 788-9673
with a copy to:
Brian D. Murphy, Esq.
McGuire, Woods, Battle & Boothe, L.L.P.
One James Center
901 East Cary Street
Richmond, Virginia 23219
Telecopier No.: (804) 698-2127