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EX-10.43 3 f94432exv10w43.txt EXHIBIT 10.43 Exhibit 10.43 FOURTH AMENDMENT THIS FOURTH AMENDMENT dates as of August 27, 2003 (this "Amendment") is among DREYER'S GRAND ICE CREAM, INC. (the "Company"), DREYER'S GRAND ICE CREAM HOLDINGS, INC. ("New Dreyer's"), various financial institutions and BANK OF AMERICA, N.A., as Agent (in such capacity, the "Agent"). WHEREAS, the Company, New Dreyer's, various financial institutions and the Agent are parties to a Credit Agreement dated as of July 25, 2000 (as previously amended, the "Credit Agreement"; capitalized terms used but not otherwise defined herein have the respective meanings given to them in the Credit Agreement); and WHEREAS, the parties hereto have agreed to amend the Credit Agreement as more fully set forth below; NOW, THEREFORE, for good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto agree as follows: SECTION 1. AMENDMENTS. Subject to the satisfaction of the applicable conditions precedent set forth in Section 3, the Company, New Dreyer's, the Majority Banks and the Agent agree that, on the Fourth Amendment Effective Date (as defined below), the Credit Agreement shall be amended as set forth below. 1.1 Addition of definition of Adjusted EBITDA. The following definition of "Adjusted EBITDA" is added to Section 1.01 in appropriate alphabetical sequence: "Adjusted EBITDA" means, for any Person for any period, such Person's consolidated earnings before interest, taxes, depreciation and amortization of non-cash charges, all determined on a consolidated basis and in accordance with GAAP for such period, plus, in the case of New Dreyer's and the Company, to the extent deducted in determining consolidated earnings for such period, (a) the first $110,000,000 of merger-related expenses incurred in connection with the Transaction, (b) the first $103,000,000 of non-cash expenses related to management stock option expense and the accretion of management and employee stock options in connection with the Transaction, (c) the first $70,000,000 goodwill impairment charges taken by NICC in the quarter ending September 29, 2002, (d) the first $23,300,000 of asset write-downs taken by NICC in the six months ended June 28, 2003 in connection with, among other things, the sale of assets to CoolBrands International, Inc. and (e) the first $14,400,000 in non-cash charges taken by the Company in the quarter ended June 28, 2003 related to the expensing of "in-process" research and development costs or to losses on brands sold to CoolBrands International, Inc. 1.2 Effect of Transaction on Accounting Principles. The following clause (c) is added at the end of Section 1.03. (c) Notwithstanding any other provision of this Agreement to the contrary, all financial computations and similar requirements in this Agreement relating to the second quarter of 2003 and any prior periods shall be made based upon the combined results of the Company and NICC (with appropriate intercompany eliminations). 1.3 Replacement of EBITDA with Adjusted EBITDA. The term "EBITDA" is replaced by the term "Adjusted EBITDA" in the following places: (a) Twice in the definition of "Funded Debt/EBITDA Ratio" (including in the defined term itself); provided that so long as the Agent has not received (by facsimile or otherwise) counterparts this Amendment signed by all Banks, the existing definition of Funded Debt/EBITDA Ratio shall continue to be used in Schedule 1.1 (the Pricing Schedule) and for purposes of calculating pricing in the Compliance Certificate. (b) Once in Section 8.14. (c) Twice in Section 8.15 (including in the caption). 1.4 Amendment of Pricing Schedule. Schedule 1.1 (the Pricing Schedule) is amended by substituting Schedule 1.1 hereto therefore. 1.5 Amendment of Compliance Certificate. Exhibit A (the form of Compliance Certificate) is amended by substituting Exhibit A hereto therefore. SECTION 2. REPRESENTATIONS AND WARRANTIES. The Company and New Dreyer's represent and warrant to the Agent and the Banks that (a) the representations and warranties made in Article VI of the Credit Agreement as amended hereby (as so amended, the "Amended Credit Agreement") are true and correct on and as of the Fourth Amendment Effective Date with the same effect as if made on and as of such date (except to the extent such representations and warranties expressly refer to an earlier date, in which case they were true and correct as of such earlier date); (b) on and as of the Fourth Amendment Effective Date (and after giving effect hereto), no Default or Event of Default will exist; (c) the execution and delivery by the Company and New Dreyer's of this Amendment and the performance by the Company and New Dreyer's of their respective obligations under the Amended Credit Agreement (i) are within the corporate powers of the Company and New Dreyer's, (ii) have been duly authorized by all necessary corporate action, (iii) have received all necessary governmental approval and (iv) do not and will not contravene or conflict with any provision of law or of any agreement or other contract, or any judgement, order or decree, which is binding upon the Company or New Dreyer's; and (d) upon the effectiveness hereof, the Amended Credit Agreement will be the legal, valid and binding obligation of the Company and New Dreyer's, enforceable against the Company and New Dreyer's in accordance with its 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. SECTION 3. EFFECTIVENESS. The amendments set forth in Section 1 shall become effective on the date (the "Fourth Amendment Effective Date") on which the Agent has received 2 (a) counterparts of this Amendment executed by the Company, New Dreyer's and the Majority Banks (it being understood that the Agent may rely on facsimile confirmation of the execution of a counterpart hereof by any party hereto); and (b) a confirmation signed by all Guarantors. SECTION 4. MISCELLANEOUS. 4.1 Continuing Effectiveness, etc. As amended hereby, the Credit Agreement shall remain in full force and effect and is hereby ratified and confirmed in all respects. After the Fourth Amendment Effective Date, all references in the Credit Agreement, the Notes, each other Loan Document and any similar document to the "Credit Agreement" or similar terms shall refer to the Amended Credit Agreement. 4.2 Counterparts. This Amendment may be executed in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original but all such counterparts shall together constitute one and the same Amendment. 4.3 Expenses. The Company agrees to pay the reasonable costs and expenses of the Agent (including Attorney Costs) in connection with the preparation, execution and delivery of this Amendment. 4.4 Governing Law. This Amendment shall be a contract made under and governed by the laws of the State of Illinois applicable to contracts made and to be performed entirely within such State. 4.5 Successors and Assigns. This Amendment shall be binding upon the Company, New Dreyer's, the Banks and the Agent and their respective successors and assigns, and shall inure to the benefit of the Company, the Banks and the Agent and the successors and assigns of the Banks and the Agent. [SIGNATURES TO FOLLOW] 3 Delivered at Chicago, Illinois, as of the day and year first above written. DREYER'S GRAND ICE CREAM, INC. By: /s/ William C. Collett ---------------------------------- Name: William C. Collett --------------------------------- Title: Treasurer --------------------------------- DREYER'S GRAND ICE CREAM HOLDINGS, INC. By: /s/ William C. Collett ---------------------------------- Name: William C. Collett --------------------------------- Title: Treasurer --------------------------------- Fourth Amendment to Credit Agreement BANK OF AMERICA, N.A., as Agent By: /s/ David L. Catherall --------------------------------- Name: David L. Catherall Title: Vice President BANK OF AMERICA, N.A., as a Bank By: /s/ David L. Catherall --------------------------------- Name: David L. Catherall Title: Vice President Fourth Amendment to Credit Agreement UNION BANK OF CALIFORNIA, N.A. By: /s/ Henry G. Montgomery -------------------------- Name: Henry G. Montgomery -------------------------- Title: VP -------------------------- HARRIS TRUST AND SAVINGS BANK By: -------------------------- Name: -------------------------- Title: -------------------------- COBANK, ACB By: -------------------------- Name: -------------------------- Title: -------------------------- Fourth Amendment to Credit Agreement UNION BANK OF CALIFORNIA, N.A. By: -------------------------- Name: -------------------------- Title: -------------------------- HARRIS TRUST AND SAVINGS BANK By: /s/ Leili Ghazi -------------------------- Name: Leili Ghazi -------------------------- Title: Vice President -------------------------- COBANK, ACB By: -------------------------- Name: -------------------------- Title: -------------------------- Fourth Amendment to Credit Agreement UNION BANK OF CALIFORNIA, N.A. By: ------------------------ Name: ------------------------ Title: ------------------------ HARRIS TRUST AND SAVINGS BANK By: ------------------------ Name: ------------------------ Title: ------------------------ COBANK, ACB By: /s/ Brian J. Klatt ------------------------ Name: Brian J. Klatt ------------------------ Title: Senior Vice President ------------------------ SUNTRUST BANK By: /s/ Gregory L. Cannon ------------------------ Name: Gregory L. Cannon ------------------------ Title: Director ------------------------ COOPERATIEVE CENTRALE RAIFFEISENBOERENLEENBANK B.A., "RABOBANK INTERNATIONAL" NEW YORK BRANCH By: ------------------------ Name: ------------------------ Title: ------------------------ By: ------------------------ Name: ------------------------ Title: ------------------------ FARM CREDIT SERVICES OF MINNESOTA VALLEY, PCA, dba FCS Commercial Finance Group By: ------------------------ Name: ------------------------ Title: ------------------------ THE BANK OF NEW YORK By: ------------------------ Name: ------------------------ Title: ------------------------ SUNTRUST BANK By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- COOPERATIEVE CENTRALE RAIFFEISEN- BOERENLEENBANK B.A., "RABOBANK INTERNATIONAL" NEW YORK BRANCH By: /s/ Bradford F. Scott ------------------------------------ Name: Bradford F. Scott ---------------------------------- Title: Executive Director --------------------------------- By: /s/ Ian Reece ------------------------------------ Name: Ian Reece ---------------------------------- Title: Managing Director --------------------------------- FARM CREDIT SERVICES OF MINNESOTA VALLEY, PCA, dba FCS Commercial Finance Group By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- THE BANK OF NEW YORK By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- Fourth Amendment to Credit Agreement SUNTRUST BANK By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- COOPERATIEVE CENTRALE RAIFFEISEN- BOERENLEENBANK B.A., "RABOBANK INTERNATIONAL" NEW YORK BRANCH By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- FARM CREDIT SERVICES OF MINNESOTA VALLEY, PCA, dba FCS Commercial Finance Group By: /s/ James M. Grafling ------------------------------------ Name: James M. Grafling ---------------------------------- Title: SVP - Syndicated Finance --------------------------------- THE BANK OF NEW YORK By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- Fourth Amendment to Credit Agreement SUNTRUST BANK By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- COOPERATIEVE CENTRALE RAIFFEISEN- BOERENLEENBANK B.A., "RABOBANK INTERNATIONAL" NEW YORK BRANCH By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- FARM CREDIT SERVICES OF MINNESOTA VALLEY, PCA, dba FCS Commercial Finance Group By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- THE BANK OF NEW YORK By: /s/ Lisa Y. Brown ------------------------------------ Name: Lisa Y. Brown ---------------------------------- Title: Managing Director --------------------------------- Fourth Amendment to Credit Agreement GUARANTOR CONFIRMATION The undersigned Guarantors hereby agree and consent, as of the date first above written, to the terms and provisions of the above Fourth Amendment, and agree that the Guaranty, dated as of June 27, 2003, executed by the undersigned Guarantors shall remain in full force and effect notwithstanding the provisions of such Fourth Amendment. DREYER'S GRAND ICE CREAM HOLDINGS, INC. By: /s/ William C. Collett ------------------------------------ Name: William C. Collett ---------------------------------- Title: Treasurer --------------------------------- NESTLE ICE CREAM COMPANY, LLC By: /s/ William C. Collett ------------------------------------ Name: William C. Collett ---------------------------------- Title: Treasurer --------------------------------- EDY'S GRAND ICE CREAM By: /s/ William C. Collett ------------------------------------ Name: William C. Collett ---------------------------------- Title: Treasurer --------------------------------- Guarantor Confirmation SCHEDULE 1.1 PRICING SCHEDULE The Base Rate Margin, the Offshore Rate Margin, the Commitment Fee Rate and the LC Fee Rate, respectively, shall be determined in accordance with the table below and the other provisions of this Schedule 1.1.
Level I applies when the Funded Debt/EBITDA Ratio is less than 1.0 to 1. Level II applies when the Funded Debt/EBITDA Ratio is equal to or greater than 1.0 to 1 but less than 1.5 to 1. Level III applies when the Funded Debt/EBITDA Ratio is equal to or greater than 1.5 to 1 but less than 2.0 to 1. Level IV applies when the Funded Debt/EBITDA Ratio is equal to or greater than 2.0 to 1 but less than 2.5 to 1. Level V applies when the Funded Debt/EBITDA Ratio is equal to or greater than 2.5 to 1 but less than 3.0 to 1. Level VI applies when the Funded Debt/EBITDA Ratio is equal to or greater than 3.0 to 1 but less than 3.5 to 1. Level VII applies when the Funded Debt/EBITDA Ratio is equal to or greater than 3.5 to 1. Beginning on the Third Amendment Effective Date, Level VII shall apply. The Level shall be adjusted (to the extent applicable), on November 26, 2003 and, thereafter, 60 days (or, in the case of the last fiscal quarter of any fiscal year of New Dreyer's, 100 days) after the end of each fiscal quarter based on the Funded Debt/EBITDA Ratio as of the last day of such fiscal quarter; provided that if New Dreyer's fails to deliver the financial statements required by Section 7.01(a) or 7.01(b), as applicable, and the related certificate required by Section 7.02(b) by the 65th day (or, if applicable, the 105th day) after any fiscal quarter, Level VII shall apply until such financial statements are delivered. 1.1-1 After all Banks have signed the Fourth Amendment to the Credit Agreement, "Funded Debt/EBITDA Ratio" will be changed to "Funded Debt/Adjusted EBITDA Ratio" throughout this Schedule 1.1. 1.1-2 EXHIBIT A DREYER'S GRAND ICE CREAM, INC. COMPLIANCE CERTIFICATE Financial Statement Date: _____________, 200__ Please refer to the Credit Agreement dated as of July 25, 2000 (as amended through the Third Amendment thereto dated as of April 14, 2003 and as further amended or otherwise modified from time to time, the "Agreement") among Dreyer's Grand Ice Cream, Inc., a Delaware corporation (the "Company"), Dreyer's Grand Ice Cream Holdings, Inc., a Delaware corporation ("New Dreyer's"), various financial institutions (the "Banks"), Union Bank of California, N.A., as syndication agent, and Bank of America, N.A., as administrative agent for the Banks (in such capacity, the "Agent"). Unless otherwise defined herein, capitalized terms used herein have the respective meanings assigned to them in the Agreement. The undersigned Responsible Officer hereby certifies as of the date hereof that (i) he/she is the ______________ of New Dreyer's, (ii) as such, he/she is authorized to execute and deliver this Certificate to the Banks and the Agent on behalf of New Dreyer's and (iii): [USE THE FOLLOWING PARAGRAPH IF THIS CERTIFICATE IS DELIVERED IN CONNECTION WITH THE FINANCIAL STATEMENTS REQUIRED BY SUBSECTION 7.01(a) OF THE AGREEMENT.] 1. Attached as Schedule 1 hereto are (a) a true and correct copy of the audited consolidated balance sheet of New Dreyer's and its Subsidiaries as at the end of the fiscal year ended ____________________ and (b) the related consolidated statements of income or operations, shareholders' equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, accompanied by the opinion of the Independent Auditor which states that such consolidated financial statements present fairly, in all material respects, the financial position for the periods indicated in conformity with GAAP applied on a basis consistent with prior years. Such opinion is not qualified or limited because of a restricted or limited examination by the Independent Auditor of any material portion of the records of New Dreyer's or any Subsidiary. OR [USE THE FOLLOWING PARAGRAPH IF THIS CERTIFICATE IS DELIVERED IN CONNECTION WITH THE FINANCIAL STATEMENTS REQUIRED BY SUBSECTION 7.01(b) OF THE AGREEMENT.] 1. Attached as Schedule 1 hereto are (a) a true and correct copy of the unaudited consolidated balance sheet of New Dreyer's and its Subsidiaries as of the end of the fiscal quarter ended ___________________, _______, and (b) the related unaudited consolidated statements of income, shareholders' equity and cash flows for the period commencing on the first day and ending on the last day of such quarter, and such financial statements were prepared in accordance with GAAP (subject only to ordinary, good faith year-end audit adjustments and the absence of footnotes) and fairly present, in all material respects, the financial position and the results of operations of New Dreyer's and its Subsidiaries. A-1 2. The undersigned has reviewed and is familiar with the terms of the Agreement and has made, or has caused to be made under his/her supervision, a detailed review of the transactions and conditions (financial or otherwise) of New Dreyer's and its Subsidiaries during the accounting period covered by the attached financial statements. 3. To the best of the undersigned's knowledge, New Dreyer's and its Subsidiaries have, during such period, observed, performed or satisfied all of the covenants and other agreements, and satisfied every condition in the Agreement, to be observed, performed or satisfied by New Dreyer's and its Subsidiaries, and the undersigned has no knowledge of any Default or Event of Default. 4. The financial covenant analyses and information set forth on Schedule 2 attached hereto are true and accurate on and as of the date of this Certificate. All amounts and ratios refer to the financial statements attached as Schedule 1 hereto and are determined in accordance with the specifications set forth in the Agreement. IN WITNESS WHEREOF, the undersigned has executed this Certificate as of ______________, ____. DREYER'S GRAND ICE CREAM HOLDINGS, INC. By: ----------------------------------- Name: ----------------------------------- Title: ----------------------------------- Date: ----------------------------------- A-2 Schedule 1 To Compliance Certificate [Attach applicable financial statements] A-3 Schedule 2 to Compliance Certificate Financial Covenant Analyses and Information Date: ________________ For the fiscal quarter ended: __________ Section 8.01 - Limitation on Liens 1. Section 8.01(g) Aggregate amount of judgment or judicial attachment liens falling within this Section: Permitted: $5,000,000 Actual: $__________ 2. Section 8.01(i) Aggregate principal amount secured by Liens on assets of corporations which became Subsidiaries after the date of the Agreement and falling within this Section: Permitted: $10,000,000 Actual: $__________ 3. Section 8.01(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: $15,000,000 Actual: $__________ 4. Section 8.01(m) Principal amount of indebtedness secured by Liens falling within this Section: Permitted: $2,000,000 Actual: $__________ Section 8.02 Disposition of Assets Section 8.02(h) Dispositions falling within this Section: Permitted: $10,000,000 Actual: $__________ Section 8.04 Loans and Investments 1. Section 8.04(d) Investments under subsections 8.04(d) shall not at any time exceed $75,000,000 during the term of this Agreement. Actual: $____________ A-4 2. Section 8.04(d) Investments falling within the proviso: Aggregate amount permitted at any time: $15,000,000 Actual: $ -------------- Section 8.05 Limitation on Indebtedness 1. Section 8.05(h) Aggregate amount of unsecured Indebtedness of Subsidiaries Permitted: $15,000,000 Actual: $ ------------- 2. Section 8.05(i) Aggregate amount of Synthetic Lease Obligations Permitted: $30,000,000 Actual: $ ------------- 3. Section 8.05(j) Aggregate amount of Indebtedness which ranks pari passu with the Obligations (excludes Nestle Credit Arrangements) Permitted: $100,000,000 Actual: $ ------------- Section 8.08 Contingent Obligations 1. Section 8.08(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 8.08(g) Guaranty Obligations falling within this Section: Permitted: $10,000,000 Actual: $ ------------- Section 8.10 Lease Obligations 1. Section 8.10(b) Aggregate amount of rent and other charges to be paid under operating leases falling under Section 8.10(b) (without discounting to present value and without regard to any options to extend): A-5 Permitted: $20,000,000 Actual:$_________ 2. Section 8.10(c)(3) Aggregate amount of rent and other charges to be paid under leases falling under Section 8.10(c)(3) (without discounting to present value and without regard to any options to extend): Permitted: $5,000,000 Actual:$_________ 3. Section 8.10(d) Capital leases falling under Section 8.10(d): Permitted: $30,000,000 Actual:$_________ Section 8.11 Restricted Payments 1. Section 8.11(b) Aggregate amount of cash dividend payments to common stockholders. (i) $0.24 per share $________________ (ii) 30% of New Dryer's consolidated net income for the preceding fiscal year. $_________________ Permitted: The greater of (i) Actual:$_________ and (ii) $_________________ Section 8.13 Consolidated Net Worth 1. (a) Base amount $2,000,000,000 (b) 75% of New Dryer's consolidated net income for each fiscal quarter beginning with the fiscal quarter ending on __________, 2003 (with no deduction for losses) $______________ (c) 75% of Net Issuance Proceeds of any stock offerings (excluding stock issuances under A-6 Section 8.11(c)) $_______________ 2. Sum of 1(a) plus 1(b) plus 1(c) (minimum required Consolidated Net Worth) $_______________ 3. Actual Consolidated Net Worth) $_______________ A-7 Section 8.14 Minimum Fixed Charge Coverage Ratio Minimum Fixed Charge Coverage Ratio cannot be less than (i) 2.25 as of the last day of the first six fiscal quarters ending after the Third Amendment Effective Date and (ii) 3.00 as of the last day of any 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.
A-8 (j) the first $14,400,000 in non-cash charges $ taken by the Company in the quarter ended ----------- June 28, 2003 related to the expensing of "in- process" research and development costs or to losses on brands sold to CoolBrands International, Inc. (k) Adjusted EBITDA (total of 1(a) through $ 1(j)) ----------- 2. Operating lease expenses $ ----------- 3. Synthetic Lease Payments $ (without duplication to 2 above) ----------- 4. Sum of 1(k) + 2 + 3 $ ----------- 5. Cash interest expense $ ----------- 6. Operating lease expense $ ----------- 7. Synthetic Lease Payments $ (without duplication to 6 above) ----------- 8. Cash dividends $ ----------- 9. Current portion, as of the last day of such $ period, of all principal of Indebtedness ----------- (excluding Indebtedness under (i) the Loan Documents and (ii) the Nestle Credit Arrangements) 10. Sum of 5 + 6 + 7 + 8 + 9 $ ----------- 11. Ratio of 4 to 10 to ---- ---- 12. Allowed to ---- ---- Section 8.15 - New Dreyer's Funded Debt/Adjusted EBITDA Ratio - ------------------------------------------------------------- New Dreyer's Funded Debt/Adjusted EBITDA Ratio cannot be greater than (i) 4.00 at any time during the first 18 months following the Third Amendment Effective Date or (ii) 3.00 thereafter: A-9 (a) Funded Debt of New Dreyer's (with $_______ adjustments permitted under definition of Funded Debt) (b) Adjusted EBITDA of New Dreyer's $_______ (c) Ratio of (a) to (b): ___ to ___ Pricing Schedule* New Dreyer's Funded Debt/EBITDA Ratio as of the end of the fiscal quarter for which financial statements are delivered herewith: (a) Funded Debt of New Dreyer's (with $_______ adjustments permitted under definition of Funded Debt) (b) EBITDA of New Dreyer's (sum of items $_______ 1(a) through 1(g) under Section 8.14 calculation) (c) Ratio of (a) to (b): ___ to ___ *After all Banks have signed the Fourth Amendment to the Credit Agreement, substitute "Adjusted EBITDA" for "EBITDA" in this calculation. A-10
