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EXHIBIT 10.1
FIRST AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (the
"Amendment"), dated as of November 3, 1998, is entered into by and among
Dreyer's Grand Ice Cream, Inc. (the "Company"), the several financial
institutions party to the Credit Agreement (collectively, the "Banks"), ABN-AMRO
Bank N.V., San Francisco International Branch as Co-Agent and Bank of America
National Trust and Savings Association, as agent for itself and the Banks (the
"Agent").
RECITALS
A. The Company, Banks, and Agent are parties to an Amended and
Restated Credit Agreement dated as of March 27, 1998, (the "Credit Agreement")
pursuant to which 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 Majority 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 of "Adjusted EBITDA" is
inserted in the proper alphabetical place:
"Adjusted EBITDA" of the Company means the Company's EBITDA
computed on a rolling four quarter basis, adding back amounts related
to non-recurring charges taken in the third and fourth quarter of
1998, not to exceed $70,000,000 (collectively, the "Add-back
Charges"). An amount of $13,000,000 of Add-back Charges shall be added
back in the calculation of Adjusted EBITDA for the third quarter of
1998, an amount equal to the total Add-back Charges shall be added
back for the fourth quarter of 1998 and the first, second, and third
quarter of 1999 calculations of Adjusted EBITDA, with no amounts added
back for the fourth quarter of 1999 and thereafter. For the avoidance
of doubt, it is understood and agreed that in each calculation of
Adjusted EBITDA, the aggregate Add-back Charges added back for such
calculation shall not exceed an aggregate amount of $70,000,000.
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(2) The definition of "Applicable Margin" is revised in its
entirety to provide as follows:
"Applicable Margin" means for each period from the date which is
three Business Days after the date the Agent receives a Compliance
Certificate pursuant to Section 6.02(b) (the "Current Compliance
Certificate") through the date which is two Business Days after the
Agent receives the next such Compliance Certificate, and for each Loan
made, converted, or continued during such period, if the Compliance
Certificate shows the Company's Funded Debt/Adjusted EBITDA Ratio is:
2.50 or above and 3.00 or above and 3.50 or above and
For Each Below 2.50 below 3.00 3.50 Below 4.00 Below
Offshore Rate Loan 0.750% 0.875% 1.000% 1.125%
Base Rate Loan 0.000% 0.000% 0.000% 0.000%
Same Day Rate Loan 0.500% 0.625% 0.750% 0.875%
4.00 or above and 4.25 or above and 5.00 or above and 5.50 or above
For Each below 4.25 below 5.00 below 5.50
Offshore Rate Loan 1.375% 2.000% 2.250 2.750%
Base Rate Loan 0.000% 0.000% 0.000% 0.000%
Same Day Rate Loan 1.000% 1.000% 1.000% 1.000%
(3) The definition of "Arranger" is modified by replacing
"BancAmerica Robertson Stephens" with "NationsBank Montgomery Securities LLC".
(4) The definition of "Funded Debt/EBITDA Ratio is amended
in its entirety to provide as follows:
"Funded Debt/Adjusted EBITDA Ratio" of any Person means the ratio
of such Person's Funded debt to its Adjusted EBITDA.
(5) The definition of "Offshore Rate" is modified by
replacing "applicable Lending Office" with "main London branch".
(b) Section 2.09(c)(1)(B) of the Credit Agreement is amended as
follows:
(1) By replacing "Company's Funded Debt/EBITDA Ratio" with
"Company's Funded Debt/Adjusted EBITDA Ratio".
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(2) By replacing the table in this Section 2.09(c)(1)(B)
with the following table:
Below 3.00 0.250% per annum
3.00 or above but below 4.25 0.375% per annum
4.25 or above 0.500% per annum
(c) Section 7.02 of the Credit Agreement is amended as follows:
(1) By re-lettering subsection (f) of this Section to (g);
and
(2) By adding the following as a new subsection (f):
(f) the sale, assignment, lease, conveyance, transfer, or other
disposition by the Company, of the following assets:
(1) any interest in the Company's Lindenhurst and
Gaithersburg Maryland facilities including, without limitation, all assets
related thereto; and
(2) any interests in the following Wholly-Owned
Subsidiaries: Grand Soft Equipment Company and Grand Soft Capital Company
including, without limitation, all assets related thereto.
(d) Section 7.13 of the Credit Agreement is amended in its
entirety to provide as follows:
7.13 Consolidated Net Worth. The Company shall not permit its
Consolidated Net Worth at any time during any fiscal quarter to be
less than the sum of:
(i) $140,000,000; plus
(ii) 75% of the Company's consolidated net income for each
calendar year beginning with the calendar year ending on December 31,
1999 (with no deduction for losses); plus
(iii) 75% of Net Issuance Proceeds of any stock offerings issued
or subordinated debt incurred since March 27, 1998.
(e) Section 7.14 of the Credit Agreement is amended in its
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
To be less than: fiscal quarters ending on the last day of its:
2.00 Third fiscal quarter of 1998
1.70 Fourth fiscal quarter of 1998 and first and second
fiscal quarters of 1999
2.25 Third fiscal quarter of 1999 and each 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 Adjusted 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.
(f) Section 7.15 of the Credit Agreement is amended in its
entirety to provide as follows:
7.15 Funded Debt/Adjusted EBITDA Ratio.
(a) The Company shall not permit its Funded Debt/Adjusted EBITDA Ratio
to be greater than:
(1) 4.50 for its third fiscal quarter in 1998;
(2) 6.00 for its fourth fiscal quarter in 1998;
(3) 5.50 for its first fiscal quarter in 1999;
(4) 5.00 for its second fiscal quarter in 1999;
(5) 4.00 for its third and fourth fiscal quarters in 1999; and
(6) 3.50 for its first fiscal quarter in 2000 and each fiscal
quarter thereafter.
(g) Article VII of the Credit Agreement is amended by adding the
following as new Section 7.19:
7.19 Senior Notes. Prior to December 31, 2000, the Company shall not
amend any Senior Note or any indenture or other agreement pursuant to which any
Senior Note is issued or otherwise relating to the Senior Note if such amendment
changes (a) the final maturity date of such Senior Note and/or (b) the repayment
schedule of such Senior Note; provided that the Banks shall not unreasonably
withhold a waiver of this Section.
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(h) Schedule 2 to the Compliance Certificate is replaced with
Exhibit 1 to this Amendment.
3. Representations and Warranties. The Company hereby represents and
warrants to the Agent and the Banks as follows:
(a) 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[,
except as enforceability may be limited by applicable bankruptcy, insolvency, or
similar laws affecting the enforcement of creditors' rights generally or by
equitable principles relating to enforceability.
(c) All representations and warranties of the Company contained
in the Credit Agreement are true and correct on and as of the date hereof except
to the extent such representations and warranties expressly refer to an earlier
date, in which case they are true and correct as of such earlier date.
(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
September 25, 1998 provided that each of the following conditions precedent is
satisfied on or before November 3, 1998:
(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, authorizing the execution, delivery and performance of this
Amendment.
(c) The Agent and the Banks have received from the Company the
amount of One Hundred Seventy Five Thousand Dollars ($175,000), representing
payment in full of a non-refundable amendment fee, which amount the Company
hereby covenants to pay to the Agent on demand for the account of the Banks
consenting to this Amendment.
(d) The Agent has received from the Company for the sole account
of the Agent a non-refundable fee in the amount specified in a separate
agreement between the Agent and the company.
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5. Reservation of Rights. The Company acknowledges and agrees that the
execution and delivery by the Agent and the Banks of this Amendment shall not be
deemed to create a course of dealing or otherwise obligate the Agent or the
Banks to enter into amendments under the same, similar or any other
circumstances in the future.
6. 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 and in the other Loan Documents 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. This Amendment is a Loan Document.
(b) This Amendment shall be binding upon and inure to the benefit
of the parties hereto and to the Credit Agreement 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, and the Agent is hereby authorized to make sufficient photocopies
thereof to assemble complete counterparty documents.
(e) 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.
The rest of this page is deliberately left blank
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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:______________________________
By:_________________________________
Name:_______________________________
Title:______________________________
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent and as
a Bank
By:_________________________________
Name:_______________________________
Title:______________________________
ABN AMRO BANK N.V., as Co-Agent and
as a Bank
By:_________________________________
Name:_______________________________
Title:______________________________
By:_________________________________
Name:_______________________________
Title:______________________________
CREDIT SUISSE FIRST BOSTON
By:_________________________________
Name:_______________________________
Title:______________________________
By:_________________________________
Name:_______________________________
Title:______________________________
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Signature page for
First Amendment to Amended and Restated Credit Agreement
Dreyer's Grand Ice Cream
November 3, 1998
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UNION BANK OF CALIFORNIA, N.A.
By:_________________________________
Name:_______________________________
Title:______________________________
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Signature page for
First Amendment to Amended and Restated Credit Agreement
Dreyer's Grand Ice Cream
November 3, 1998
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Exhibit 1 to First Amendment to Amended and Restated Credit Agreement
Schedule 2 to the Compliance Certificate
Financial Covenant Analyses and Information
Date:_________________________
For the fiscal quarter ended:_________________________
Schedule 2
to the Compliance Certificate
Financial Covenant Analyses and Information
SECTION 7.01 - LIMITATION ON LIENS
1. Section 7.01(g) Aggregate amount of judgment or judicial attachment liens and
falling within this Section:
Permitted: $5,000,000 Actual: $_________
2. Section 7.01(i) Aggregate principal amount secured by Liens on assets of
corporations which became Subsidiaries after the date of the Credit Agreement
and falling within this Section:
Permitted: $10,000,000 Actual: $_________
3. Section 7.01(j) Principal amount of indebtedness secured by purchase money
security interests in property held by the Company and its Subsidiaries in the
ordinary course of business and falling within this Section:
Permitted: $10,000,000 Actual: $_________
SECTION 7.02 DISPOSITION OF ASSETS
Section 7.02(g) Dispositions falling within this Section:
Permitted: $5,000,000 Actual: $_________
SECTION 7.04 LOANS AND INVESTMENTS
1. Section 7.04(d)(1)(B) Investments made during the period from the date of
this Agreement through the last day of the fiscal quarter/year covered by this
Compliance Certificate:
Aggregate amount permitted for the term of this Agreement: $60,000,000
Actual: $_________
2. Section 7.04(d)(2) Investments falling within this clause:
Aggregate amount permitted for the term of this Agreement: $15,000,000
Actual: $_________
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3. Section 7.04(d)(3) Aggregate amount of investments under Section 7.04(d)(1)
plus aggregate amount of investments under Section 7.04(d)(2):
Permitted: $60,000,000 Actual: $_________
SECTION 7.05 LIMITATION ON INDEBTEDNESS
Section 7.05(e) Aggregate amount under Section 7.05(e) [indebtedness
secured by Liens permitted by subSection 7.01(i) and (j)]
Permitted: $20,000,000 Actual: $_________
SECTION 7.08 CONTINGENT OBLIGATIONS
1. Section 7.08(d) Aggregate amount of Contingent Obligations of Grand Soft
Capital Company and Grand Soft Equipment Company with respect to leases
sold or entered into pursuant to the Grand Soft Program:
Permitted: $10,000,000 Actual: $_________
Company's Guaranty Obligations with respect to such Contingent Obligations:
Permitted: $10,000,000 Actual: $_________
2. Section 7.08(e) Guaranty Obligations falling within this Section:
Permitted: $5,000,000 Actual: $_________
SECTION 7.10 LEASE OBLIGATIONS
1. Section 7.10(d). Aggregate amount of rent and other charges to be paid
under operating leases falling under Section 7.10(d) (without discounting
to present value and without regard to any options to extend):
Permitted: $10,000,000 Actual: $_________
2. Section 7.10(e). Aggregate amount of rent and other charges to be paid
under leases falling under Section 7.01(e) (without discounting to present
value and without regard to any options to extend):
Permitted: $5,000,000 Actual: $_________
3. Section 7.10(f). Capital leases falling under Section 7.10(f):
Permitted: $15,000,000 Actual: $_________
SECTION 7.11 RESTRICTED PAYMENTS
Dividend payments made in fiscal year ____:
Permitted: $_________ Actual: $_________
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SECTION 7.13 CONSOLIDATED NET WORTH
1. (a) Base amount $140,000,000
(b) 75% of the Company's consolidated net income for each
calendar year beginning with the calendar year ending on December
31, 1999 (with no deduction for losses) $___________
(c) 75% of Net Issuance Proceeds of any stock offerings
issued or subordinated debt incurred since March 27, 1998 $___________
2. Sum of 1(a), (b), and (c) or minimum required Consolidated
Net Worth $___________
3. Actual Consolidated Net Worth $___________
SECTION 7.14 MINIMUM FIXED CHARGE COVERAGE RATIO
Minimum Fixed
Charge Coverage Ratio For the period consisting of the four consecutive fiscal quarters
cannot be less than: ending on the last day of its:
2.00 Third fiscal quarter of 1998
1.70 Fourth fiscal quarter of 1998 and first and second fiscal
quarters of 1999
2.25 Third fiscal quarter of 1999 and each fiscal quarter thereafter
The following computations are to be made for the period consisting of four
consecutive fiscal quarters ending on the last day of the fiscal quarter first
above written on page 1 of this Schedule.
1. EBITDA $__________
2. Add-back Charges $__________
Add-back Charges cannot exceed $70,000,000 in
the aggregate. $13.000,000 in Add-back Charges shall be added for the
third quarter of 1998. Add-back Charges shall be added for the fourth
quarter of 1998 and for the first, second. and third quarters of 1999.
No Add-back Charges shall be entered for the fourth fiscal quarter of
1999 and any fiscal quarter thereafter.
3. Current operating lease expense $__________
4. Sum of 1 + 2 + 3 $__________
5. Interest expense $__________
6. Current operating lease expense $__________
7. Sum of 5 + 6 $__________
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8. Ratio of 4 to 7 $__________
9. Allowed $__________
SECTION 7.15 FUNDED DEBT/ADJUSTED EBITDA RATIO
Funded Debt/Adjusted EBITDA Ratio cannot be greater than:
(1) 4.50 for its third fiscal quarter in 1998;
(2) 6.00 for its fourth fiscal quarter in 1998;
(3) 5.50 for its first fiscal quarter in 1999;
(4) 5.00 for its second fiscal quarter in 1999;
(5) 4.00 for its third and fourth fiscal quarters in 1999; and
(6) 3.50 for its first fiscal quarter in 2000 and each fiscal
quarter thereafter.
1. Funded Debt (with adjustments permitted under definition of
Funded Debt) $__________
2. Adjusted EBITDA (the sum of item 1 plus item 2 in Section 7.14
calculations) $__________
3. Ratio of 1 to 2: __________
4. Permitted Ratio: __________
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