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FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), is entered
into as of April ___, 1996 among Dreyer's Grand Ice Cream, Inc., a Delaware
corporation (the "Company"), the several financial institutions from time to
time party to this Agreement (collectively, the "Banks"; individually, a
"Bank"), ABN-AMRO Bank N.V., San Francisco International Branch as Co-Agent, and
Bank of America National Trust and Savings Association, as agent for the Banks.
RECITALS
A. The Company, Banks, and Agent are parties to a Credit Agreement
dated as of December 22, 1995 (the "Credit Agreement") pursuant to which the
Agent and the Banks have extended certain credit facilities to the Company.
B. The Company has requested that the Banks agree to certain amendments
of the Credit Agreement.
C. The Banks are willing to amend the Credit Agreement subject to the
terms and conditions of this Amendment.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized terms
used herein shall have the meanings, if any, assigned to them in the Credit
Agreement.
2. Amendments to Credit Agreement.
(a) Section 1.01 of the Credit Agreement is amended as
follows:
(1) The following definition is added immediately
after the definition of "Acquisition":
"Additional Capital" means an amount not less than $50,000,000
raised by the Company after March 29, 1996 through any, or any
combination, of the following:
(a) Senior Notes or other unsecured debt for borrowed money of
the Company (i) with terms and conditions acceptable to Majority Banks
and (ii) with a maturity of not less than five years;
(b) common stock issued by the Company after March 29, 1996;
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(c) any other form of equity with terms and conditions
acceptable to Majority Banks.
(2) The last sentence in the definition of "Funded
Debt" in Section 1.01 of the Credit Agreement is amended in its entirety to
provide as follows:
For purposes of Section 7.15, obligations arising from capital leases
shall not be included in Funded Debt until the quarter ending on June
30, 1997. Commencing with such quarter and each quarter thereafter,
obligations arising from capital leases shall be included in Funded
Debt. For purposes of determining the Applicable Margin and the
commitment fee, obligations arising from capital leases shall be
included in Funded Debt until the quarter after the Company has raised
the Additional Capital.
(b) Article VI of the Credit Agreement is amended by deleting
Section 6.13.
(c) Article VII of the Credit Agreement is amended as follows:
(1) Section 7.05 is amended by amending its
subsection (g) in its entirety to provide as follows:
(g) Senior Notes up to an aggregate principal amount of
$50,000,000.
(2) Effective December 22, 1995, Section 7.14 is
amended by amending its subsection (b) in its entirety to provide as follows:
(b) For purposes of this Section, Fixed Charge Coverage Ratio
means the ratio of "A" to "B" where:
"A" means the sum of EBITDA plus current operating lease
expenses; and
"B" means interest expense plus current operating lease
expenses;
in all cases computed on a consolidated basis and measured at the end
of the relevant fiscal quarter for the four successive fiscal quarters
ending on the last day of such fiscal quarter.
(d) Section 8.01(c) is amended by deleting "6.13" from the
sections enumerated therein.
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(e) The portions of Schedule 2 of the Compliance Certificate
relating to Sections 7.14 and 7.15 are amended in their entirety to provide as
follows:
7.14 Minimum Fixed Charge Coverage Ratio. (a) The Company shall not
permit its Fixed Charge Coverage Ratio:
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For the period consisting of the four
consecutive fiscal quarters ending on the
To be less than: last day of its:
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1.55 fourth fiscal quarter of 1995
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1.65 first and second fiscal quarters of 1996
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1.75 third fiscal quarter of 1996
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2.00 fourth fiscal quarter of 1996 and each of
the first three fiscal quarters of 1997
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fourth fiscal quarter of 1997 and each
2.50 fiscal quarter thereafter
================================================================================
(b) For purposes of this Section, Fixed Charge Coverage Ratio
means the ratio of "A" to "B" where:
"A" means the sum of EBITDA plus current operating lease
expenses; and
"B" means interest expense plus current operating lease
expenses;
in all cases computed on a consolidated basis and measured at the end
of the relevant fiscal quarter for the four successive fiscal quarters
ending on the last day of such fiscal quarter.
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A =
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1. EBITDA $
-------
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2. Current operating lease expenses $
-------
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A = 1 + 2 $
-------
================================================================================
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================================================================================
B =
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1. Interest expense $
-------
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2. Current operating lease expenses $
-------
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B = 1 + 2 $
-------
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Ratio of A to B =
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Required Ratio as set forth in Section 7.14(a): not less
than
------------
7.15 Funded Debt/EBITDA Ratio. (a) The Company shall not permit its
Funded Debt/EBITDA Ratio to be greater than:
(1) 5.25 for the period from the Closing Date through its
fourth fiscal quarter in 1995;
(2) 4.75 for its first fiscal quarter in 1996;
(3) 4.50 for its second fiscal quarter in 1996;
(4) 4.00 for its third fiscal quarter in 1996;
(5) 3.50 for its fourth fiscal quarter in 1996; and
(6) 3.00 for each of its fiscal quarters thereafter.
(b) In determining compliance with this Section, the Company's
Funded Debt at each quarterly measurement period shall be reduced by the amounts
shown in the following table to accommodate increases in the Company's seasonal
debt:
================================================================================
Fiscal quarter each year after
ending in: 1996 1996
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March $10,000,000 $10,000,000
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June $45,000,000 $50,000,000
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September $35,000,000 $40,000,000
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December $ 0 $ 0
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1. Capitalized lease obligations (for each quarter
commencing after March 31, 1997) $
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2. Other Funded Debt
----------
3. Total Funded Debt (1 + 2)
----------
4. Minus amount as determined according to the
table in Section 7.15(b):
==========
5. Funded Debt for purposes of Section 7.15
(3 minus 4)
----------
6. EBITDA =
----------
7. Ratio of Funded Debt to EBITDA =
----------
8. Required ratio as set forth in Section 7.15(a): not greater than
----------
FOR PURPOSES OF DETERMINING THE APPLICABLE MARGIN AND THE COMMITMENT FEE:
1. Capitalized lease obligations (not applicable if
Additional Capital has been raised) $
----------
2. Other Funded Debt
----------
3. Total Funded Debt (1 + 2)
----------
4. Minus amount as determined according to the
table in Section 7.15(b):
==========
5. Funded Debt for purposes of determining the
Applicable Margin and the commitment fee
(3 minus 4) $
----------
6. EBITDA =
7. Ratio of Funded Debt to EBITDA to be used in
determining the Applicable Margin and the commitment fee:
----------
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3. Representations and Warranties. The Company hereby represents and
warrants to the Agent and the Banks as follows:
(a) After giving effect to this Amendment, no Default or Event
of Default has occurred and is continuing.
(b) The execution, delivery and performance by the Company of
this Amendment have been duly authorized by all necessary corporate and other
action and do not and will not require any registration with, consent or
approval of, notice to or action by, any Person (including any Governmental
Authority) in order to be effective and enforceable. The Credit Agreement as
amended by this Amendment constitutes the legal, valid and binding obligations
of the Company, enforceable against it in accordance with its respective terms,
without defense, counterclaim or offset.
(c) All representations and warranties of the Company
contained in the Credit Agreement are true and correct in all material respects.
(d) The Company is entering into this Amendment on the basis
of its own investigation and for its own reasons, without reliance upon the
Agent and the Banks or any other Person.
4. Effective Date. This Amendment will become effective as of March 29,
1996 (the "Effective Date"), provided that each of the following conditions
precedent is satisfied:
(a) The Agent has received from the Company and the Majority
Banks a duly executed original (or, if elected by the Agent, an executed
facsimile copy) of this Amendment.
(b) The Agent has received from the Company a copy of a
resolution passed by the board of directors of such corporation, certified by
the Secretary or an Assistant Secretary of such corporation as being in full
force and effect on the date hereof, authorizing the execution, delivery and
performance of this Amendment.
(c) All representations and warranties contained herein are
true and correct as of the Effective Date.
5. Miscellaneous.
(a) Except as herein expressly amended, all terms, covenants
and provisions of the Credit Agreement are and shall remain in full force and
effect and all references therein to such Credit Agreement shall henceforth
refer to the Credit Agreement as amended by this Amendment. This Amendment shall
be deemed incorporated into, and a part of, the Credit Agreement.
(b) This Amendment shall be binding upon and inure to
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the benefit of the parties hereto and thereto and their respective successors
and assigns. No third party beneficiaries are intended in connection with this
Amendment.
(c) THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF CALIFORNIA.
(d) This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. Each of
the parties hereto understands and agrees that this document (and any other
document required herein) may be delivered by any party thereto either in the
form of an executed original or an executed original sent by facsimile
transmission to be followed promptly by mailing of a hard copy original, and
that receipt by the Agent of a facsimile transmitted document purportedly
bearing the signature of a Bank or the Company shall bind such Bank or the
Company, respectively, with the same force and effect as the delivery of a hard
copy original. Any failure by the Agent to receive the hard copy executed
original of such document shall not diminish the binding effect of receipt of
the facsimile transmitted executed original of such document of the party whose
hard copy page was not received by the Agent.
(e) This Amendment, together with the Credit Agreement,
contains the entire and exclusive agreement of the parties hereto with reference
to the matters discussed herein and therein. This Amendment supersedes all prior
drafts and communications with respect thereto. This Amendment may not be
amended except in accordance with the provisions of Section 10.01 of the Credit
Agreement.
(f) If any term or provision of this Amendment shall be deemed
prohibited by or invalid under any applicable law, such provision shall be
invalidated without affecting the remaining provisions of this Amendment or the
Credit Agreement, respectively.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Amendment as of the date first above written.
DREYER'S GRAND ICE CREAM, INC.
By:
-----------------------
Name:
---------------------
Title:
--------------------
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BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By:
--------------------
Name:
Title: Vice President
ABN AMRO BANK N.V., as Co-Agent
By:
--------------------
Name:
------------------
Title:
-----------------
By:
--------------------
Name:
------------------
Title:
-----------------
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a
Bank
By:
--------------------
Name: Michael J. Dasher
Title: Vice President
ABN AMRO BANK N.V., as a Bank
By:
--------------------
Name:
Title:
By:
--------------------
Name:
Title:
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CREDIT SUISSE
By:
--------------------
Name:
Title:
By:
--------------------
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
By:
--------------------
Name:
Title:
By:
--------------------
Name:
Title:
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