EXHIBIT 10.4(B)
FIRST AMENDMENT AND WAIVER
TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT AND WAIVER (this "Amendment") dated as of March 27,
1998 is entered into by and among Einstein/Noah Bagel Corp., a Delaware
corporation (the "Borrower"), the lenders who are party to the Credit Agreement
referred to below (the "Lenders"), General Electric Capital Corporation, as Co-
Agent (herein, in such capacity, the "Co-Agent"), and Bank of America National
Trust and Savings Association, as Agent for the Lenders (herein, in such
capacity, the "Agent").
W I T N E S E T H:
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WHEREAS, the Borrower, the Lenders, the Co-Agent and the Agent are parties
to a certain Amended and Restated Secured Credit Agreement dated as of November
21, 1997 (as heretofore amended, called the "Credit Agreement"; terms used but
not otherwise defined herein are used herein as defined in the Credit
Agreement);
WHEREAS, the Borrower desires to amend the Credit Agreement in certain
respects relating to Revolving Loan availability and to waive certain covenant
compliance; and
WHEREAS, subject to the terms and conditions set forth herein the Agent,
the Co-Agent and the Lenders are willing to amend the Credit Agreement in
certain respects and to waive certain covenant compliance;
NOW, THEREFORE, in consideration of the premises, and intending to be
legally bound hereby, the Borrower, the Agent, the Co-Agent and the Lenders
hereby agree as follows:
Section 1. Amendment.
Upon satisfaction of the conditions precedent set forth in Section 3 below
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and in reliance on the Borrower's warranties set forth in Section 4 below, as of
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the date hereof the Credit Agreement is hereby amended as follows:
(a) The following definitions set forth in Article I of the Credit
Agreement are amended to read in their entireties as follows:
""Applicable Margin" means with respect to Eurodollar Loans and
Floating Rate Loans, as the case may be, a margin as follows:
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Applicable Applicable Floating
Eurodollar Rate Rate Margin
Cash Flow Ratio Margin
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Greater than or equal to 3.25% 0.50%
2.00:1
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Greater than or equal to 2.75% 0.25%
1.50:1 but less than 2.00:1
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Greater than or equal to 2.25% 0.00%
1.00:1 but less than 1.50:1
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Less than 1.00:1 1.75% 0.00%
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The Applicable Margin with respect to Eurodollar Loans and
Floating Rate Loans, as the case may be, shall be adjusted at all time
after the Revolving Loan Effective Date on the first day of the calendar
month following receipt by the Agent of the certificate required pursuant
to subsection 5.8(4), based on the Cash Flow Ratio as of the last day of
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the fiscal quarter most recently ended; it being understood that if the
Borrower fails to timely deliver the certificate in accordance with
subsection 5.8(4), then until five days following receipt of such
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certificate by the Agent, the Applicable Margin shall be 3.25% with respect
to Eurodollar Loans and 0.50% with respect to Floating Rate Loans. It is
hereby acknowledged that as of the Restatement Effective Date, the
Applicable Margin for Eurodollar Loans is 3.25% and for Floating Rate Loans
is 0.50%; provided, that, notwithstanding the foregoing, from the Revolving
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Loan Effective Date through and including September 6, 1998, with respect
to Revolving Loans, the Applicable Margin for Eurodollar Loans is 3.5% and
the Applicable Margin for Floating Rate Loans is 0.75%."
""Revolving Loan Effective Date" means March 27, 1998."
""Term Loan Commitment" means, at any time as to any Lender,
obligations to make a Term Loan to the Borrower pursuant to Section 2.1(2)
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in an aggregate amount, for each Lender, not to exceed such Lender's
Percentage of the Total Term Loan Commitment Amount."
""Total Revolving Loan Commitment Amount" means, at any time, the
commitments of the Lenders to make Revolving Loans pursuant to Section
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2.1(1), in the aggregate amount set forth on Schedule 1.1C, as the same may
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be amended pursuant to Section 2.7(2)."
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(b) Section 5.8(1) of the Credit Agreement is amended to read in
its entirety as follows:
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"(1) Retail Period financial statements. As soon as available and
in any event within twenty (20) days after the end of each Retail Period of
the Borrower (or in the case of (a) the weekly cash forecast for the fifth
(5th) Retail Period, 1998 within ten (10) days after the end of such Retail
Period or (b) the last Retail Period of each fiscal quarter of the
Borrower, within thirty (30) days after the end of such Retail Period),
consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries as at the end of such Retail Period, consolidated and
consolidating statements of operations of the Borrower and its Subsidiaries
for the period commencing at the end of the previous fiscal year and ending
with the end of such Retail Period and for the period commencing at the end
of the previous Retail Period and ending with the end of such Retail
Period, and consolidated and consolidating statements of cash flows of the
Borrower and its Subsidiaries for the portion of the fiscal year ended with
the last day of such Retail Period and for the period commencing at the end
of the previous Retail Period and ending with the end of such Retail
Period, all in reasonable detail and for statements of operations, stating
in comparative form the respective budget figures for the corresponding
period, and a "flash" report of sales by week by unit in the most complete
form as previously delivered to the Agent;"
(c) Section 5.8(4) of the Credit Agreement is amended to read in
its entirety as follows:
"(4) Certificate of No Default. Together with the financial
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statements furnished by the Borrower (a) under the preceding Clause (1)
with respect to the Borrower's fifth (5th) Retail Period, 1998, a
certificate demonstrating compliance with the provisions of Section 7.6 as
of the last day of such Retail Period and (b) under the preceding Clauses
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(2) and (3), a duly completed compliance certificate in the form of Exhibit
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M, in each case signed by the Chief Financial Officer or any Vice President
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of the Borrower (in his or her capacity as such, and without personal
liability therefor);"
(d) Section 5.13(1) of the Credit Agreement is amended to read in
its entirety as follows:
"(1) At the time of each incurrence, and after giving effect
thereto, of Debt under the Agreement during any fiscal period set forth
below (but only at such times and at no other times) demonstrate to the
Agent that the ratio of (a) Senior Indebtedness outstanding immediately
after such incurrence to (b) Annualized System EBITDAL, for the fiscal
quarter then most recently ended for which financial statements have been
delivered to the Agent pursuant to Section 5.8, does not exceed the ratio
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set forth below opposite such fiscal period:
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Fiscal Period(s) Ratio
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10th Retail Period, 1998 2.25:1.00
4th Fiscal Quarter, 1998 2.00:1.00
Fiscal Year 1999 1.75:1.00
Fiscal Year 2000 1.50:1.00"
(e) Section 5.13 of the Credit Agreement is amended by adding at
the end of such Section a new clause (3) which reads in its entirety as
follows:
"(3) On September 7, 1998, demonstrate to the Agent that the ratio of (a)
Senior Indebtedness then outstanding to (b) Annualized System EBITDAL, for
the fiscal quarter then most recently ended for which financial statements
have been delivered to the Agent pursuant to Section 5.8, does not exceed
2.25:1.00"
(f) Section 7.1 of the Credit Agreement is amended to read in its
entirety as follows:
"SECTION 7.1. Net Store Revenue. Maintain as of the last day of
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each Retail Period, an average weekly net revenue (i.e., gross revenue net
of customer coupons and discounts) during such Retail Period per Store for
all Stores (whether operated by the Borrower or a Franchisee) of not less
than the amount set forth below opposite such fiscal period:
Retail Period/Year Covenant Level
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3rd, 4th/1998 $ 12,000
5th, 6th, 7th/1998 $ 12,600
8th/1998 through 4th/1999 $ 12,800
5th/1999 through 4th/2000 $ 13,200
5th, 6th, 7th/2000 $ 13,400
thereafter $ 13,700"
(g) Article VII of the Credit Agreement is amended by adding at
the end of such Article a new Section 7.6 which reads as follows:
"SECTION 7.6 System EBITDAL. Maintain as of the last day of the
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Borrower's fifth (5th ) Retail Period, 1998, for the two consecutive Retail
Periods then ended, an Adjusted Cash of not less than $900,000. For
purposes of the Section, "Adjusted Cash" means, for any fiscal period, cash
provided by the Stores less compensation less total operating expenditures,
all as outlined on the Borrower's weekly cash forecast.
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(h) Section 8.1(4) of the Credit Agreement is amended to read in
its entirety as follows:
"(4) The Borrower or any Subsidiary shall fail to perform or
observe any term, covenant or agreement contained in (a) Section 5.8(1)
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with respect to the Borrowers fifth (5th) Retail Period, 1998, 5.13(3) or
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7.6 or (b) Sections 6.1, 6.2, 6.5, 6.7, 6.8, 6.11, 7.1 through 7.5, 10.6 or
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10.12 of this Agreement and such failure shall continue for four (4)
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Business Days after the earlier of discovery, notification or final
calculation thereof applicable thereto;"
(i) The Credit Agreement is amended by adding a new Schedule
1.1(C), which reads in its entirety as set forth on Annex I hereto,
immediately after the existing Schedule 1.1(B).
Section 2. Waiver.
Upon satisfaction of the conditions precedent set forth in Section 3 below
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and in reliance on the Borrower's warranties set forth in Section 3 below, the
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Lenders, the Co-Agent and the Agent hereby waive the Borrower's compliance with
the provisions of Sections 7.2 and 7.4 of the Credit Agreement from the date
hereof through and including the last day of the Borrower's second fiscal
quarter of 1998 (such date being July 12, 1998).
Section 3. Conditions Precedent.
This Amendment shall become effective upon receipt by the Agent of (a) duly
executed counterpart signature pages from the Borrower and the Required Lenders,
and (b) payment in immediately available funds of an amendment fee of $175,000
paid by the Borrower to the Agent for the account of each Lender according to
its respective percentage.
Section 4. Warranties.
To induce the Agent, the Co-Agent and the Lenders to enter into this
Amendment, the Borrower warrants to the Agent, the Co-Agent and the Lenders as
of the date hereof that:
(a) The representations and warranties contained in the Credit
Agreement and Loan Documents are true and correct in all material respects
on and as of the date hereof (except to the extent such representations and
warranties expressly refer to an earlier date); and
(b) No Default or Event of Default has occurred and is continuing.
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Section 5. GENERAL.
(a) As hereby modified, the Credit Agreement shall remain in full
force and effect and is hereby ratified, approved and confirmed in all
respects.
(b) This Amendment shall be binding upon and shall inure to the
benefit of the Borrower, the Lenders, the Co-Agent and the Agent and
respective successors and assigns of the Lenders, the Co-Agent and the
Agent.
(c) 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 but one and the same Amendment.
* * * * *
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Delivered at Chicago, Illinois, as of the date and year first above written.
EINSTEIN/NOAH BAGEL CORP.
By: /s/ Xxxx X. Xxxxxxx
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Title: Senior Vice President
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BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By: /s/ Xxxxx X. Xxxxxxxx
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Title: Vice President
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BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Lender
By: /s/ Xxxxxx Xxxxxxx
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Title: Managing Director
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GENERAL ELECTRIC CAPITAL
CORPORATION, as Co-agent and Lender
By: /s/ Xxxx Xxxxxxx
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Title: Vice President - Risk Manager
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LASALLE NATIONAL BANK
By: /s/ Xxxx X. Xxxxxxxx
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Title: Assistant Vice President
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The undersigned hereby acknowledge the foregoing amendments and reaffirm
their respective duties and obligations arising under the Loan Documents to
which each is a party.
XXXXXXXX XXXX BAGEL PARTNERS, INC.
By: /s/ Xxxx X. Xxxxxxx
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Title: Vice President
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Annex I
SCHEDULE 1.1(C)
Total Revolving Loan Commitment Amount
Total Revolving Loan
Period Commitment Amount
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Revolving Loan Effective Date
through May 31, 1998 $ 5,000,000
June 1, 1998 through June 29, 1998 $12,000,000
June 30, 1998 through September 6, 1998 $12,500,000
Thereafter $25,000,000
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