FIRST AMENDMENT
FIRST AMENDMENT, dated as of March __, 1998 (this "FIRST AMENDMENT"), to
the Amended and Restated Loan and Security Agreement, dated as of December 9,
1997 (as the same has heretofore or may be hereafter amended, supplemented or
modified from time to time in accordance with its terms, the "LOAN AGREEMENT"),
by and among Brothers Gourmet Coffees, Inc., a Delaware corporation (the
"BORROWER"), the financial institutions from time to time party thereto
(collectively, the "LENDERS") and Xxxxxxx Xxxxx Credit Partners, L.P., a Bermuda
Limited Partnership, individually as a Lender and as Agent for the Lenders (in
such capacity, the "AGENT").
WHEREAS, the Borrower has requested certain amendments to the Loan
Agreement; and
WHEREAS, the Agent and the Lenders are willing to make such amendments to
the Loan Agreement upon the terms and subject to the conditions set forth in
this First Amendment.
NOW THEREFORE, for valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, and subject to the fulfillment of the conditions
set forth below, the parties hereto agree as follows:
SECTION 1. AMENDMENTS TO THE LOAN AGREEMENT
1.1 DEFINED TERMS. Initially capitalized terms used and not otherwise
defined herein shall have their respective meanings as defined in the Loan
Agreement.
1.2 AMENDMENT TO DEFINITION OF EVENT OF DEFAULT. Subsection (s) of the
definition of "Event of Default" contained in Section 1.01 of the Loan Agreement
is hereby amended in its entirety to read as follows:
"(s) the Borrower fails to perform, keep or observe any of the
covenants contained in Subsections 3.5, 7.5, 7.6, 7.11, 7.13 or in
Section 8;"
1.3 SUBSECTION 7.13. Section 7 of the Loan Agreement is hereby amended by
adding the following new Subsection 7.13:
"7.13 BUSINESS PLAN. The Borrower shall furnish to the Agent a
revised business plan of the Borrower by no later than April 30,
1998 (the "REVISED BUSINESS PLAN"), which Revised Business Plan
shall be acceptable to the Agent in all respects."
1.4 AMENDMENT TO SECTION 8.21. Section 8.21 of the Loan Agreement is
amended in its entirety to read as follows:
"8.21 FINANCIAL COVENANTS. (a) EBITDA. The Borrower
shall not permit BEITDA, as of the end of each of the computation
periods set forth below, to be less than the following:
Computation Period EBITDA
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From the beginning of the first Fiscal Quarter $1,200,000
of Fiscal Year 1998 through the end of the
second Fiscal Quarter of Fiscal Year 1998
From the beginning of the first Fiscal Quarter $2,300,000
of Fiscal Year 1998 through the end of the
third Fiscal Quarter of Fiscal Year 1998
From the beginning of the first Fiscal Quarter $5,700,000
of Fiscal Year 1998 through the end of the
fourth Fiscal Quarter of Fiscal Year 1998
From the beginning of the second Fiscal $5,700,000
Quarter of Fiscal Year 1998 through the end of
the first Fiscal Quarter of Fiscal Year 1999
(b) TOTAL CAPITAL FUNDS. The Borrower shall not permit Total Capital
Funds, as of the end of each of the Fiscal Quarters set forth below,
to be less than the following:
Fiscal Quarter Total Capital Funds
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First Fiscal Quarter of Fiscal $62,000,000
Year 1998
Second Fiscal Quarter of Fiscal $62,000,000
Year 1998
Third Fiscal Quarter of Fiscal $62,000,000
Year 1998
Fourth Fiscal Quarter of Fiscal $62,000,000
Year 1998
First Fiscal Quarter of Fiscal $61,000,000"
Year 1999
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The Borrower and the Agent agree that, as promptly as practicable after
the Borrower's delivery of the Revised Business Plan to the Agent in
accordance with Subsection 7.13, the Borrower and the Agent will negotiate
with respect to mutually acceptable modifications to the financial covenants
set forth in this Subsection 8.21.
SECTION 2. CONDITIONS TO EFFECTIVENESS
This First Amendment shall become effective only upon satisfaction in full
of the following conditions precedent (the first date upon which all such
conditions have been satisfied being herein called the "EFFECTIVE DATE"):
2.1 The Agent shall have received a counterpart of this First Amendment
which bears the signature of the Borrower.
2.2 No event shall have occurred and be continuing which constitutes a
Default or an Event of Default.
2.3 All legal matters incident to this First Amendment shall be
satisfactory to the Agent and its counsel.
2.4 The Amendment Fee (as defined below) shall have been paid.
2.5 The Borrower shall have paid all accrued and unpaid fees and expenses
of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, counsel to the Agent, including,
without limitation, the fees and expenses of counsel to the Agent incurred in
connection with this First Amendment.
SECTION 3. FEES AND EXPENSES
3.1 In consideration of the amendments to the Loan Agreement made hereby
at the request of the Borrower, the Borrower shall pay the Agent an amendment
fee in the amount of $50,000 (the "AMENDMENT FEE"), which Amendment Fee shall be
fully earned and non-refundable as of the Effective Date. The Amendment Fee may
be charged, at the Agent's sole option, to any account of the Borrower
maintained by the Agent.
3.2 Without in any way limiting subsection 2.14(e) of the Loan Agreement,
the Borrower shall pay all fees and expenses of Fried, Frank, Harris, Xxxxxxx &
Xxxxxxxx, counsel to the Agent, incurred in connection with this First
Amendment.
SECTION 4. REPRESENTATIONS AND WARRANTIES
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The Borrower represents and warrants to the Agent as follows:
4.1 The execution, delivery and performance by the Borrower of this First
Amendment and the performance by the Borrower of the Loan Agreement as amended
hereby (i) have been duly authorized by all necessary corporate action and (ii)
do not and will not contravene the Borrower's organizational documents or any
applicable law.
4.2 This First Amendment and the Loan Agreement, as amended hereby,
constitute the legal, valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with their respective terms.
4.3 The representations and warranties contained in the Loan Agreement are
correct on and as of the Effective Date as though made on and as of the
Effective Date (except to the extent such representations and warranties
expressly relate to an earlier date), and no Default or Event of Default, has
occurred and is continuing as of the Effective Date.
SECTION 5. CONTINUED EFFECTIVENESS OF LOAN AGREEMENT
5.1 The Borrower hereby (i) confirms and agrees that each of the Financing
Agreements to which it is a party is, and shall continue to be, in full force
and effect and is hereby ratified and confirmed in all respects except that on
or after the Effective Date of this First Amendment all references in any such
Financing Agreement to "the Loan Agreement", "thereto", "thereof", "thereunder"
or words of like import referring to the Loan Agreement shall mean the Loan
Agreement as amended by this First Amendment; and (ii) confirms and agrees that
to the extent any such Financing Agreement purports to grant to the Agent a
security interest in or lien on, any collateral as to security for the
Obligations of the Borrower from time to time existing in respect of the Loan
Agreement and the Financing Agreements, such security interest in or lien is
hereby ratified and confirmed in all respects.
SECTION 6. CERTAIN ACKNOWLEDGMENTS
6.1 The Borrower hereby affirms and ratifies the following in all
respects:
(a) The Borrower has no grounds for disputing the validity or enforceability of
the Financing Agreements or any of the Obligations, or the validity, priority,
enforceability or extent of the Agent's security interest in or lien against any
of Collateral in any judicial, administrative or other proceeding; and
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(b) The Borrower, for itself and any other Person who may claim an
interest through the Borrower, hereby releases and discharges, with
prejudice, the Agent, each Lender, and each of their respective directors,
officers, Affiliates, agents, attorneys and employees from any and every
claim, right, cause, action, cause of action, damage, liability, and other
matter or proceeding arising from, relating to or in connection with any acts
or omissions of the Agent, each Lender, and each of their respective
directors, officers, Affiliates, agents, attorneys and employees prior to the
Effective Date. This provision shall survive and continue in full force and
effect whether or not (i) the Borrower shall satisfy all other provisions of
the Financing Agreements, including payment in full by the Borrower of all
Obligations, or (ii) the Loan Agreement is otherwise terminated.
SECTION 7. MISCELLANEOUS
7.1 Except as herein expressly amended, the Loan Agreement and the other
documents executed and delivered in connection therewith are each ratified and
confirmed in all respects and shall remain in full force and effect in
accordance with their respective terms.
7.2 This First Amendment may be executed by the parties hereto
individually or in combination, in one or more counterparts, each of which shall
be an original and all of which shall constitute one and the same agreement.
7.3 Section and paragraph headings herein are included for the convenience
of reference only and shall not constitute a part of this First Amendment for
any other purpose.
7.4 THIS FIRST AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year fist above written.
BROTHERS GOURMET COFFEES, INC.
By:
---------------------------------
Name:
Title:
XXXXXXX XXXXX CREDIT PARTNERS, L.P.
As Agent and as a Lender
By:
---------------------------------
Name:
Title:
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