ARTICLE 1

DEFINITIONS

 

1.1.          Defined Terms.

 

(a)            Capitalized terms that are defined in this Amendment shall have the meanings ascribed in this Amendment to such terms. All other capitalized terms shall have the meanings ascribed to such terms in the Credit Agreement, as amended by this Amendment. Unless the context of this Amendment clearly requires otherwise, references to the plural include the singular; references to the singular include the plural; the words “include,” “includes,” and “including” will be deemed to be followed by “without limitation”; and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or”. The principles of interpretation set forth in Section 1.4 of the Credit Agreement shall apply to the provisions of this Amendment.

 

(b)            Each reference to “hereof”, “hereunder”, “herein” and “hereby” and each other similar reference contained in the Credit Agreement, each reference to “this Agreement”, “the Credit Agreement” and each other similar reference contained in the Credit Agreement and each reference contained in this Amendment to the “Credit Agreement” shall on and after the Amendment Effective Date refer to the Credit Agreement as amended by this Amendment. Any notices, requests, certificates and other instruments executed and delivered on or after the Amendment Effective Date may refer to the Credit Agreement without making specific reference to this Amendment but nevertheless all such references shall mean the Credit Agreement as amended by this Amendment unless the context otherwise requires. This Amendment constitutes a “ Loan Document ” as defined in the Credit Agreement.

 

ARTICLE 2

LIMITED WAIVER

 

2.1.          Waiver of Certain Events of Default. Subject to the terms and conditions set forth herein, and in reliance on the representations and warranties of Borrower and Holdings, and each of their Subsidiaries, the Lenders waive each of the Events of Default set forth below to the extent such Event of Default was caused by the failure of the Borrower from time to time prior to the date hereof to apply payments on the SwissCo Intercompany Note to the Loans pursuant to Section 2.9(a)(ii) :

 

(a)            each Event of Default under Section 7.1(a) , resulting from the Borrower’s failure to make the required mandatory payments of the Loans pursuant to Section 2.9(a)(ii) ;

 

(b)            each Event of Default under Section 7.1(b) , resulting from the Borrower’s breach of the representation and warranty that there is no Default or Event of Default, such representation and warranty having been made each time that a Loan was requested, each time Loan proceeds were received, each time a continuation and conversion was requested, and at the time of delivery of each Compliance Certificate;

 

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(c)            each Event of Default under Section 7.1(c) , resulting from the Borrower’s failure to comply with Section 5.7(i) , which requires Borrower to promptly provide notice of any Event of  Default to Administrative Agent and each Lender; and

 

(d)            each Event of Default under Section 7.1(d) , resulting from the Borrower’s failure to notify the Administrative Agent in writing (as required pursuant to Section 2.9(h) ) of the amount of mandatory prepayments made pursuant to Section 2.9(a)(ii) and the reason therefor.

 

2.2.          Waiver of Compliance with Financial Covenants. Subject to the terms and conditions set forth herein, and in reliance on the representations and warranties of Borrower and Holdings, and each of their Subsidiaries, the Lenders waive compliance as of December 31, 2005 with the financial covenants set forth in Section 6.1 of the Credit Agreement (as in effect prior to giving effect to the waiver herein described), provided, that as of December 31, 2005, the Borrower was in compliance with the financial covenants set forth in Section 3.1(n) hereof.

 

2.3.          Waiver of Default Interest. Subject to the terms and conditions set forth herein, and in reliance on the representations and warranties of the Borrower and Holdings, and each of their Subsidiaries, the Lenders waive the Borrower’s obligation to pay default interest pursuant to Section 2.10(c) on those portions of the Term Loans that were required to be repaid with proceeds of mandatory prepayments (as set forth above), but which were not repaid.

 

ARTICLE 3

AMENDMENTS

 

3.1.          Amendments.

 

(a)            Section 1.1 of the Credit Agreement is hereby amended by adding the following definitions in the proper alphabetical order:

 

“ Consolidated First Lien Leverage Ratio ” means, as at the last day of any Fiscal Quarter, the ratio of (a) Consolidated Total First Lien Debt on such day to (b) Consolidated EBITDA for the four consecutive Fiscal Quarters ending on such day.

 

“ Consolidated Total First Lien Debt ” means, at any date, the aggregate principal amount of all outstanding Tranche A (Euro) Term Loans, plus the aggregate principal amount of all outstanding Tranche B Term Loans, plus the aggregate Revolving Credit Commitments (whether used or unused).

 

“ One-Time Consolidated First Lien Leverage Ratio ” means, for any day, the ratio of (a) One-Time Consolidated Total First Lien Debt on such day to (b) Consolidated EBITDA for the four consecutive Fiscal Quarters ended on or immediately prior to such day.

 

“ One-Time Consolidated Total First Lien Debt ” means, at any date, the aggregate principal amount of all outstanding Tranche A (Euro) Term Loans, plus the aggregate principal amount of all outstanding Tranche B Term Loans, plus the actual Revolving Credit Outstandings.

 

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“ Mandatory Prepayment Amount ” means such amount of additional capital, the Net Cash Proceeds of which shall be not less than an amount sufficient to result in a One-Time Consolidated First Lien Leverage Ratio of less than or equal to 3.0x.

 

“ Permitted Junior Lien Indebtedness ” shall mean additional Indebtedness secured by Liens on the Collateral that are junior to the Liens granted pursuant to the Collateral Documents to the Secured Parties and guaranteed by Holdings and Subsidiary Guarantors; provided, however, that, (i) the aggregate principal amount of such Indebtedness plus the actual outstanding principal amounts of all Term Loans (calculated on a pro forma basis taking into account the paydown of the Term Loans following the Refinancing Transaction) plus the aggregate Revolving Credit Commitments shall not exceed $325,000,000, (ii) the Liens securing such Indebtedness shall be subordinated to the Liens in favor of Secured Parties on terms satisfactory to the Requisite Lenders, and shall specifically include, without limitation, the terms set forth on Schedule 6.2(xiv), (iii) the holders of such Indebtedness execute an intercreditor agreement on terms satisfactory to the Requisite Lenders, and (iv) the maturity and other terms in the agreement evidencing such Indebtedness shall be satisfactory to the Requisite Lenders.

 

“ Refinancing Transaction ” means the issuance or incurrence by Borrower of additional capital resulting in Net Cash Proceeds to the Borrower of not less than the Mandatory Prepayment Amount.

 

“ Refinancing Transaction Closing Date ” means the date the Refinancing Transaction becomes effective.

 

“ SwissCo 2 Revolving Note ” means a promissory note made by the Borrower in favor of SwissCo 2, which shall contain the following terms:  (a) the note shall mature in 2011; (b) the interest rate shall be equal to LIBO plus 0.25% per annum, or such other rate as may be prescribed by applicable law; and (c) principal shall be due and payable on the maturity date of such note.

 

(b)            The definition of “ Applicable Margin ” is revised in its entirety to read as follows:

 

“ Applicable Margin ” means:

 

during the period commencing on March 29, 2006 to but not including the Refinancing Transaction Closing Date, a per annum rate equal to the rate set forth below opposite the applicable type of Loan for the specified period:

 

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		Applicable Margin for  Revolving Loans  and Swing Loans				Applicable  Margin for  Tranche A  (Euro) Term  Loans		Applicable Margin for  Tranche B Term Loans
Date		LIBO Rate  Loans		Base Rate  Loans		LIBO Rate  Loans		LIBO Rate  Loans		Base Rate  Loans
March 29, 2006 through June 30, 2006		4.25	%	3.00	%	4.25	%	4.25	%	3.00	%
July 1, 2006 through September 30, 2006		5.25	%	4.00	%	5.25	%	5.25	%	4.00	%
October 1, 2006 and thereafter		6.25	%	5.00	%	6.25	%	6.25	%	5.00	%

 

; and on and after the Refinancing Transaction Closing Date, a per annum rate equal to the rate set forth below opposite the applicable type of Loan and the then applicable Consolidated First Lien Leverage Ratio (determined for the period ending on the last day of the most recent Fiscal Quarter or Fiscal Year, as applicable, for which Financial Statements have been delivered pursuant to Section 5.1(a) or (b) set forth below):

 

		Applicable Margin for  Revolving Loans  and Swing Loans				Applicable  Margin for  Tranche A  (Euro) Term  Loans		Applicable Margin for  Tranche B Term Loans
Consolidated First  Lien Leverage  Ratio		LIBO Rate  Loans		Base Rate  Loans		LIBO Rate  Loans		LIBO Rate  Loans		Base Rate  Loans
Greater than 3.00x		4.00	%	2.75	%	4.00	%	4.00	%	2.75	%
Equal to or less than 3.00x		3.25	%	2.00	%	3.25	%	3.25	%	2.00	%

 

Changes in the Applicable Margin resulting from changes in the Consolidated First Lien Leverage Ratio shall become effective as to all Loans on the date that is 3 Business Days after the date on which Financial Statements are delivered to the Lenders pursuant to Section 5.1(a) or (b) of this Agreement and shall remain in effect until the next change to be effected pursuant to this paragraph. Notwithstanding anything to the contrary set forth in this Agreement (including the then effective Consolidated First Lien Leverage Ratio), if any financial statements referred to above are not delivered within the time periods

 

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specified in Section 5.1(a) or (b) of this Agreement, then the Applicable Margin from and including the date on which such respective financial statements were so required to be delivered to but not including the date that is 3 Business Days after the date on which such financial statements are delivered, shall equal the highest rate set forth in each column of the appropriate chart above. Each determination of the Consolidated First Lien Leverage Ratio pursuant to the second chart above shall be made in a manner consistent with the determination thereof pursuant to Section 6.1(i) of this Agreement.

 

(c)            The definition of “ Asset Sale ” is revised in its entirety to read as follows (with the new language underlined for convenience):

 

“ Asset Sale ” means (i)  any Disposition of property or series of related Dispositions of property (excluding any Disposition permitted by clause (i), (ii), (iii), (iv), (v), (vi), (viii) or (ix) of Section 6.5 but including any Disposition permitted by clause (vii) of Section 6.5) that yields gross proceeds to Holdings, the Borrower or any of its Subsidiaries (valued at the initial principal amount thereof in the case of non-cash proceeds consisting of notes or other debt securities and valued at fair market value in the case of other non-cash proceeds) in excess of $1,000,000 or, whether or not related Dispositions, that yields gross proceeds in excess of $1,000,000 in the aggregate after March 29, 2006 , and (ii) notwithstanding the exclusion from clause (i) above of any Disposition permitted by clause (v) of Section 6.5, any Receivable Qualifying Asset Sale .

 

(d)            Clause (j) in the definition of “ Consolidated EBITDA ” is revised in its entirety to read as follows:

 

“(j) any extraordinary or non-recurring cash losses or expenses arising from restructuring not to exceed in the aggregate since October 1, 2002 (A) if such period ends prior to January 1, 2004, $8,600,000, (B) if such period begins on or after January 1, 2004 and such period ends prior to January 1, 2006, $14,600,000, (C) if such period begins on or after January 1, 2006, $11,000,000 with respect to any such non-recurring cash losses or expenses arising from the implementation of the Borrower’s plan known as “Project Arrow” and related restructuring, $4,000,000 with respect to any such non-recurring cash losses or expenses arising from the transition from H.J. Heinz Company to ACH Food Companies, Inc. as exclusive distributor to Borrower and its Subsidiaries in the United States; and any cash expenses incurred in connection with any waiver of a Default or Event of Default and any amendment to this Agreement, including the Limited Waiver and Fourth Amendment dated as of March 29, 2006, including the fees and expenses of any attorneys and financial advisers retained by the Administrative Agent pursuant to Section 9.3 hereof with respect to any such waiver or amendment;”

 

(e)            A new clause (n) is added to the definition of “ Consolidated EBITDA ” to read in as follows:

 

“and (n) expenses incurred by the Borrower or any Subsidiary prior to January 1, 2007 in connection with the development and commercialization of the all-natural, zero-calorie sweetener to be marketed under the Sweet Simplicity ™ trademark, in an amount not to exceed in the aggregate $3,000,000.”

 

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(f)             The definition of “ Consolidated Interest Expense ” is revised in its entirety to read as follows (with the amended language blacklined for convenience):

 

“ Consolidated Interest Expense ” means, for any period: (a) the sum of (i) total cash interest expense (including that attributable to Capital Lease Obligations) for such period (including all commissions, discounts and other fees and charges associated with Indebtedness (including the Loans) or owed with respect to letters of credit and bankers’ acceptance financing, amortization or write-off of debt discount and debt issuance costs and net costs under Interest Rate Contracts to the extent such net costs are allocable to such period in accordance with GAAP) plus (ii) any interest accrued during such period in respect of Indebtedness that is required to be capitalized rather than included in consolidated interest for such period in accordance with GAAP ; MINUS (b) the sum of (i) net gains under Interest Rate Contracts to the extent such gains are allocable to such period in accordance with GAAP PLUS (ii) any cash interest income for such period, all determined for the Borrower and its Subsidiaries on a consolidated basis in conformity with GAAP.

 

(g)            Section 2.9(a) is revised in its entirety to read as follows (with the new language underlined for convenience):

 

“(a)          Upon receipt by Holdings, the Borrower or any of its Subsidiaries of (i) Net Cash Proceeds arising from an Asset Sale, Recovery Event or Debt Issuance, the Borrower shall immediately prepay the Loans (or provide cash collateral in respect of Letters of Credit) in an amount equal to 100% of such Net Cash Proceeds; (ii) [ Intentionally Deleted ]; or (iii) Net Cash Proceeds arising from an Equity Issuance, the Borrower shall immediately prepay the Loans (or provide cash collateral in respect of Letters of Credit) in an amount equal to 50% of such Net Cash Proceeds ; or (iv) Net Cash Proceeds arising from the Refinancing Transaction, the Borrower shall immediately prepay the Loans (or provide cash collateral in respect of Letters of Credit) in an amount equal to the Mandatory Prepayment Amount ; provided, however , that in the case of any Net Cash Proceeds constituting the Reinvestment Deferred Amount with respect to a Reinvestment Event, the Borrower shall prepay the Loans (or provide cash collateral in respect of Letters of Credit) in an amount equal to the Reinvestment Prepayment Amount applicable to such Reinvestment Event, if any, on the Reinvestment Prepayment Date with respect to such Reinvestment Event; provided, however , that the amount of Net Cash Proceeds received in the same Fiscal Year from one or more Reinvestment Events that may be specified as Reinvestment Deferred Amounts in one or more Reinvestment Notices shall not exceed $20,000,000 in the aggregate for all such Net Cash Proceeds so received. Any such mandatory prepayment shall be applied in accordance with Section 2.9(c) below.

 

(h)            Section 2.9(c) is revised in its entirety to read as follows (with the new language underlined for convenience):

 

“(c)          Any prepayments made by the Borrower required to be applied in accordance with this Section 2.9(c) shall be applied as follows: first , to prepay the

 

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outstanding principal balance of the Term Loans, until such Term Loans shall have been prepaid in full; second , to repay the outstanding principal balance of the Swing Loans, until such Swing Loans shall have been repaid in full; third , to repay the outstanding principal balance of the Revolving Loans, until such Revolving Loans shall have been paid in full; and then , to provide cash collateral for any Letter of Credit Obligations in the manner set forth in Section 7.3 until all such Letter of Credit Obligations have been fully cash collateralized in the manner set forth therein. All prepayments of the Term Loans made pursuant to this Section 2.9 (other than with respect to Section 2.9(a)(iv)) shall be applied to reduce ratably the remaining installments of such outstanding principal amounts of the Term Loans of both Tranches on a pro rata basis ; and all prepayments of the Term Loans pursuant to Section 2.9(a)(iv) shall be applied to reduce the remaining installments of such outstanding principal amounts of the Term Loans of both Tranches on a pro rata basis in the inverse order of maturity. All repayments of Revolving Loans and Swing Loans required to be made pursuant to Section 2.9(a) or (b) (or which would be required to be made had the outstanding Revolving Loans and Swing Loans equaled the Revolving Credit Commitments then in effect) shall result in a permanent reduction of the Revolving Credit Commitments as provided in Section 2.5(b).”

 

(i)             Section 2.9(f) is revised in its entirety to read as follows:

 

“[ Intentionally Deleted .]”

 

(j)             Section 2.10(c) is revised by adding the following paragraph to the end thereof:

 

“By written notice to the Borrower given by the Administrative Agent acting upon the direction of the Requisite Lenders, the Requisite Lenders may require the Borrower to pay, and the Borrower shall pay, interest during the continuance of an Event of Default on the principal amount of all outstanding Loans (a) prior to the Refinancing Transaction Closing Date, at the highest rate set forth in each column of the chart set forth in the definition of “Applicable Margin”, or (b) on or after the Refinancing Transaction Closing Date, at the per annum rate equal to the rate otherwise applicable to such Loan plus 2.00% per annum. This paragraph is not intended to modify the preceding paragraph of this Section 2.10(c), which governs the rate of interest on any principal of any Loan that has become due and payable (the “Past Due Principal Rate”). For purposes of clarity, it is agreed that at all times that the Past Due Principal Rate is in effect with respect to any principal of any Loan pursuant to such preceding paragraph, the interest rate payable in respect of such principal of such Loan shall be governed by such preceding paragraph and not by this paragraph.”

 

(k)            Section 2.12(b)(ii) is revised by replacing the proviso at the end thereof with the following language:

 

“ provided, however , that during the continuance of an Event of Default under Section 7.1(a) in respect of principal or interest, such fee shall be increased by 2.00% per annum and shall be payable on demand, and during the continuance of any other Event of Default, by written notice to the Borrower given by the Administrative Agent acting upon

 

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the direction of the Requisite Lenders, the Requisite Lenders may require that (a) prior to the Refinancing Transaction Closing Date, such fee shall be equal to the highest rate for LIBO Rate Loans set forth on the chart set forth in the definition of “Applicable Margin” and shall be payable on demand, or (b) on or after the Refinancing Transaction Closing Date, such fee shall be increased to the per annum rate equal to the rate otherwise applicable to such fee plus 2.00% per annum and shall be payable on demand.”

 

(l)             Section 4.22 is amended in its entirety to read as follows:

 

Section 4.22 Proprietary Rights; Foreign Trademarks.

 

(a) Either the Borrower or a Wholly Owned Subsidiary of the Borrower owns all proprietary rights to any products (including without limitation sweetener products) with respect to which the Borrower, Holdings, or any of their respective Subsidiaries has made or incurred any expenditures, direct or indirect, including without limitation overhead, or permitted their employees to devote any of their time to developing, marketing, manufacturing, or distributing.

 

(b) Schedule 4.22 (together with any future written updates that Borrower delivers to the Administrative Agent) sets forth a true and complete list of each of the Foreign Trademarks.

 

(m)           A new Section 5.13 is added as follows:

 

Section 5.13 Corporate Restructuring. The Borrower shall use diligent efforts to undertake such corporate actions, including, without limitation, the consolidation or dissolution of intermediary Foreign Subsidiaries as may be necessary and prudent to result in all of the Capital Stock of SwissCo 2 being owned directly by a Loan Party. To the extent that, and only for so long as, SwissCo 2’s payment of dividends to the Borrower would be (i) adverse to the Borrower’s business, property, operations or condition (financial or otherwise), (ii) not permitted by applicable law or (iii) subject to any necessary corporate or governmental approvals that have not been received and remain in effect, SwissCo 2 may make loans to the Borrower pursuant to the SwissCo Note in lieu of paying dividends.

 

(n)            Section 6.1 is amended in its entirety to read as follows:

 

(a)            Consolidated Leverage Ratio . Each of the Borrower and Holdings will not, and will not permit any of its Subsidiaries to, directly or indirectly, permit the Consolidated Leverage Ratio as at the last day of any period of four consecutive Fiscal Quarters of the Borrower ending with any Fiscal Quarter set forth below to exceed the ratio set forth below opposite such Fiscal Quarter:

 

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(b)            Consolidated Interest Coverage Ratio . Each of the Borrower and Holdings will not, and will not permit any of its Subsidiaries to, directly or indirectly, permit the Consolidated Interest Coverage Ratio for any period of four consecutive Fiscal Quarters of the Borrower ending with any Fiscal Quarter set forth below to be less than the ratio set forth below opposite such Fiscal Quarter:

 

 

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(c)            Consolidated Fixed Charge Coverage Ratio . Each of the Borrower and Holdings will not, and will not permit any of its Subsidiaries to, directly or indirectly, permit the Consolidated Fixed Charge Coverage Ratio for any period of four consecutive Fiscal Quarters of the Borrower ending with any Fiscal Quarter set forth below to be less than the ratio set forth below opposite such Fiscal Quarter:

 

 

(d)            Consolidated Senior Leverage Ratio . Each of the Borrower and Holdings will not, and will not permit any of its Subsidiaries to, directly or indirectly, permit the Consolidated Senior Leverage Ratio for any period of four