Exhibit 10.3
July 19, 2005
American Italian Pasta Company
4100 N. Mulberry Drive
Suite 200
Kansas City, MO 64116
Re:
Waivers under Credit Agreement
Ladies/Gentlemen:
Please refer to the Credit Agreement dated as of July 16, 2001 (as
amended,
the "
Credit Agreement
") among American Italian Pasta Company (the "
Company
"),
various financial institutions and Bank of America, N.A., as
administrative
agent (in such capacity, the "
Administrative Agent
"). Capitalized terms used but
not otherwise defined herein shall have the respective meanings
given to them in
the Credit Agreement.
At the request of the Company, the Required Lenders waive until the
Waiver
Termination Date (as defined below) any Event of Default
(collectively, the
"
Known Defaults
") arising from (a) the failure of the Company to comply with
Section 10.6.1 (Minimum Fixed Charge Coverage Ratio), 10.6.2
(Maximum Leverage
Ratio) and 10.6.4 (Minimum EBITDA) of the Credit Agreement for the
Computation
Period ended July 1, 2005 and (b) the failure of the Company to
comply with
Section 10.2(i) of the Credit Agreement or the inaccuracy of the
representation
and warranty in Section 9.4 of the Credit Agreement or of any
certificate
delivered pursuant to Section 10.1.1, 10.1.2 or 10.1.3 with respect
to any
financial statements previously delivered by the Company to the
Administrative
Agent or any Lender pursuant to the Credit Agreement, in each case
to the extent
arising out of the matters described by the Company to the Lenders
in a
conference call on July 12, 2005.
As used herein, "
Waiver Termination Date
" means the earliest to occur of
(i) the occurrence of any Event of Default or Unmatured Event of
Default other
than the Known Defaults, (ii) September 16, 2005 and (iii) the date
of the
effectiveness of an amendment to the Credit Agreement amending the
financial
covenants set forth in
clause (a)
of the preceding paragraph.
In consideration of the waivers set forth above, the Company and
the
Required Lenders agree that (a) the $30,000,000 reduction in the
Aggregate
Revolving Commitment Amount that is scheduled to occur on the first
day of
Fiscal Year 2006 shall instead occur upon the effectiveness hereof
and (b) the
$5,000,000 limitation set forth in Section 10.12(v) of the Credit
Agreement
shall apply to all sales and other dispositions of assets during
any Fiscal
Year.
This waiver letter is limited to the matters specifically set forth
herein
and shall not be deemed to constitute a waiver, consent or
amendment with
respect to any other matter whatsoever. Except as specifically set
forth herein,
the Credit Agreement shall remain in full force and effect and is
hereby
ratified in all respects.
This waiver letter may be executed in counterparts (including by
facsimile)
and by the parties hereto on separate counterparts. A signature
page hereto
delivered by facsimile shall be effective as delivery of an
original
counterpart.
This waiver letter shall become effective when the Administrative
Agent has
received (a) counterparts hereof executed by the Required Lenders
and
acknowledged by the Company and each Guarantor and (b) a waiver fee
for each
Lender that, on or prior to 12:00 noon (Chicago time) on July 19,
2005, delivers
an executed counterpart hereof to the Administrative Agent, such
waiver fee to
equal 0.10% of the sum of (i) the outstanding principal amount of
such Lender's
Term Loan and (ii) such Lender's Revolving Commitment (after giving
effect to
the reduction in the Aggregat
