1
EXHIBIT 10.1
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (the "Amendment"), dated as
of November 5, 1998 (the "Effective Date"), is among XXXX & BUSTER'S, INC., a
corporation duly organized and validly existing under the laws of the State of
Missouri (the "Borrower"), each of the banks or other lending institutions which
is a signatory hereto (individually, a "Bank" and, collectively, the "Banks")
and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, formerly known as Texas Commerce
Bank National Association, individually as a Bank and as agent for itself and
the other Banks (in its capacity as agent, together with its successors in such
capacity, the "Agent").
RECITALS:
Borrower, certain of the Banks and Agent have entered into that certain
Credit Agreement dated as of May 21, 1997 (as amended by that certain First
Amendment to Credit Agreement dated as of February 4, 1998, the "Agreement").
The Borrower has requested an increase in the commitments provided
under the Agreement. To accommodate such request and subject to the terms
hereof, (i) certain of the Banks that are parties to the Agreement prior to the
Effective Date will assign to NationsBank, N.A. and Bank One, Texas, N.A.
(together the "New Banks") a portion of their respective interests in the rights
and obligations under the Agreement making the New Banks parties to, and "Banks"
under, the Agreement; (ii) the Revolving Commitments will be increased; and
(iii) the Agreement will otherwise be amended as provided herein.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.1 Definitions. Capitalized terms used in this Amendment, to
the extent not otherwise defined herein, shall have the same meanings as in the
Agreement, as amended hereby.
ARTICLE II
Amendments
Effective as of the Effective Date, the Agreement is amended as follows:
Section 2.1 Amendment to "Revolving Commitment". The definition of
"Revolving Commitment" in Section 1.1 is amended to read in its entirety as
follows:
2
"Revolving Commitment" means, as to each Bank, the obligation of such
Bank to make advances of funds and purchase participation interests in
(or with respect to the Agent as a Bank, hold other interests in)
Letters of Credit in an aggregate principal amount at any one time
outstanding up to but not exceeding the amount set forth opposite the
name of such Bank on Schedule 15, or, if applicable, the amount
determined in accordance with the most recent Assignment and Acceptance
executed by the Bank, as the same may be reduced or terminated pursuant
to Section 2.6 or 11.2. The aggregate amount of the Revolving
Commitments of all Banks equals the total set forth on Schedule 15.
Section 2.2 Amendment to "Revolving Termination Date". The definition
of "Revolving Termination Date" in Section 1.1 is amended to read in its
entirety as follows:
"Revolving Termination Date" means May 29, 2001, or such earlier or
later date on which the Revolving Commitments terminate as provided in
this Agreement.
Section 2.3 Amendment to Section 3.2. The chart in Section 3.2 is
amended to read in its entirety as follows:
============================================= ================= ================== =================
Leverage Ratio Base Margin Commitment Fee Eurodollar Margin
============================================= ================= ================== =================
Greater than or equal to 2.50 0.50% 0.375% 2.00%
--------------------------------------------- ----------------- ------------------ -----------------
Greater than or equal to 2.00 but less than 2.50 0.25% 0.375% 1.75%
--------------------------------------------- ----------------- ------------------ -----------------
Greater than or equal to 1.50 but less than 2.00 0.00% 0.25% 1.50%
--------------------------------------------- ----------------- ------------------ -----------------
Less than 1.50 0.00% 0.25% 1.25%
============================================= ================= ================== =================
Section 2.4 Amendment to Article 7. Article 7 is amended to add
Section 7.24 to read in its entirety as follows:
7.24 Year 2000. Any reprogramming required to permit the proper
functioning without Material Adverse Effect, in and following the year
2000, of (i) the Borrower's and the Subsidiaries' computer systems and
(ii) equipment containing embedded microchips (including systems and
equipment supplied by others or with which Borrower's or any
Subsidiary's systems interface) and the testing of all such systems and
equipment, as so reprogrammed, will be completed by June 30, 1999. The
cost to the Borrower of such reprogramming and testing and of the
reasonably foreseeable consequences of year 2000 to the Borrower and
the Subsidiaries (including, without limitation, reprogramming errors
and the failure of others' systems or equipment) will not result in a
Default or a Material Adverse Effect. Except for such of the
reprogramming referred to in the preceding sentence as may be
necessary, the computer and management information systems of the
Borrower and the Subsidiaries are and, with ordinary course upgrading
and maintenance, will continue for the term of this Agreement to be,
sufficient to permit the Borrower to conduct its business without
Material Adverse Effect.
Section 2.5 Amendment to Section 9.4. Section 9.4 is amended to read
in its entirety as follows:
Section 9.4 Restrictions on Dividends and other Distributions. The
Borrower will not directly or indirectly declare, order, pay, make or
set apart any sum for any dividend or other distribution, direct or
indirect, on account of any shares of any class of stock or other
equity interest of the Borrower now or hereafter
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outstanding. The Borrower will not and will not permit any Subsidiary
to directly or indirectly declare, order, pay, make or set apart any
sum for (a) any redemption, conversion, exchange, retirement, sinking
fund or similar payment, purchase or other acquisition for value,
direct or indirect, of any shares of any class of stock or other equity
interest of the Borrower or any Subsidiary now or hereafter
outstanding; or (b) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options, or other rights to
acquire shares of any class of stock or other equity interest of the
Borrower or any Subsidiaries now or hereafter outstanding; except that
if no Default exists or would result therefrom, Borrower may repurchase
its capital stock, provided that the aggregate amount of consideration
paid to repurchase such capital stock during the entire term of this
Agreement shall not exceed Two Million Five Hundred Thousand Dollars
($2,500,000).
Section 2.6 Amendment to Section 9.11. Section 9.11 of the Agreement
is amended to read in its entirety as follows:
Section 9.11 New Business Locations. No more than the Authorized Number
of new retail business locations shall be opened by Borrower and the
Subsidiaries during any four (4) Fiscal Quarter period as determined as
of the end of each Fiscal Quarter. The "Authorized Number" for any four
(4) Fiscal Quarter period shall be equal to the number set forth below
opposite the applicable four (4) Fiscal Quarters:
Any Four (4) Fiscal Quarters Number
Ending During the Periods Set Forth Below
=================================================== ======================
January 31, 1998 through January 31, 1999 5
--------------------------------------------------- ----------------------
February 1, 1999 through January 30, 2000 6
--------------------------------------------------- ----------------------
January 31, 2000 through August 1, 2001 8
--------------------------------------------------- ----------------------
Section 2.7 Amendment to Section 10.2. Section 10.2 is amended as
follows:
(i) The first sentence of Section 10.2 is amended to read in its
entirety as follows:
As of the end of each Fiscal Quarter during the periods set forth
below, the Borrower shall not permit the ratio of Adjusted Debt to
Adjusted EBITDA to exceed the ratio set forth below opposite the
applicable period:
Period Ratio
=============================================== ================================
Closing Date through January 31, 1999 2.50 to 1.00
----------------------------------------------- --------------------------------
February 1, 1999 and thereafter 2.85 to 1.00
----------------------------------------------- --------------------------------
(ii) The definition of "Adjusted EBITDA" in Section 10.2 is amended to
read in its entirety as follows:
"Adjusted EBITDA" means, as of the end of any Fiscal Quarter, the sum
of (a) the EBITDA calculated for the four (4) Fiscal Quarters ending on
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the date of determination, plus (b) the Operating Lease Expenses for
the four (4) Fiscal Quarters ending on the date of determination, plus
(c) pre- opening expenses incurred on or after February 1, 1999 that
are attributable to establishing new retail business locations and that
were subtracted in calculating Adjusted Net Income in accordance with
GAAP for the four (4) Fiscal Quarters ending on the date of
determination; provided, however, that the maximum aggregate amount of
such pre-opening expenses that may be added to EBITDA pursuant to this
clause (c) during the entire term of this Agreement for any one retail
business location is One Million Two Hundred Thousand Dollars
($1,200,000), plus (d) for measurement periods that include the Fiscal
Quarter ending on January 31, 1999, the amount of the one-time,
non-cash expense that was subtracted in calculating Adjusted Net Income
during such Fiscal Quarter in recognition of the cumulative effect of
the change in accounting principles required under the American
Institute of Certified Public Accountants Statement of Position
referred to as "SOP 98-5".
Section 2.8 Amendment to Exhibit E. Exhibit E is amended in its
entirety to read as set forth on Exhibit E attached hereto.
Section 2.9 Schedule 15 added. Schedule 15, as set forth on Annex A
hereto, is added to the Agreement immediately after Schedule 9.5.
ARTICLE III
Assignment and Acceptance
Section 3.1 Assignment. Subject to the satisfaction of the conditions
set forth herein and effective on the Effective Date but immediately before the
effectiveness of the amendment to the definition of "Revolving Commitment"
provided for herein, each Existing Bank sells and assigns to the New Bank
identified opposite its name on Annex B hereto without recourse, representation
or warranty except as specifically set forth herein, and each New Bank purchases
and assumes from the Existing Bank identified opposite its name on Annex B
hereto an interest in the applicable Existing Bank's rights and obligations
under the Agreement and the other Loan Documents equal to the Assigned
Percentage (each such assignment herein an "Assignment"). The term "Assigned
Percentage" means with respect to any Existing Bank, the percentage interest
identified opposite the applicable Existing Bank in Annex B hereto under the
meaning "Assigned Percentage" with the Assigned Percentage being calculated not
as a percentage of the Existing Bank's Revolving Commitment but as a percentage
of the aggregate Revolving Commitments before giving effect to this Amendment.
The rights and obligations assigned pursuant to each Assignment include, without
limitation, the Assigned Percentage of the Revolving Commitment on the Effective
Date and the Assigned Percentage of the Revolving Loans and Letter of Credit
Liabilities outstanding on the Effective Date. On the Effective Date, each New
Bank shall make available to the Agent for the benefit of each Existing Bank
that has made an assignment to it hereunder (each such Existing Bank applicable
to a New Bank herein an "Assignor Bank") in immediately available funds an
amount equal to the sum of the Assigned Percentages of such New Bank set forth
on Annex B hereto multiplied by the aggregate amount of the Revolving Loans
outstanding on the Effective Date (the "Purchase Price"). A New Bank's payment
of its Purchase Price is a condition to the effectiveness of the Assignment
relating
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thereto. Each such payment by a New Bank shall a Base Rate Account, unless a New
Bank is advised otherwise in accordance with the notice provisions in the
Agreement on the Effective Date. On the Effective Date the Agent shall transfer
to each of the Assignor Banks the Purchase Price due to them to the extent
received by the Agent.
Section 3.2 Assignor Bank Representations and Disclosures. Each
Assignor Bank (i) represents to each New Bank to which it is making an
Assignment that as of the Effective Date and before giving effect to this
Amendment, its Commitment Percentage equals the percentage set forth opposite
its name on Annex B hereto under the heading "Existing Commitment Percentage"
and the aggregate amount of the Revolving Commitments is Fifty Million Dollars
($50,000,000.00);(ii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Agreement or any other Loan Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Agreement or any other Loan Document, other than that it is legally
authorized to enter in this Amendment, it is the legal and beneficial owner of
the interest being assigned by it hereunder and that such interest is free and
clear of any adverse claim; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or any Obligated Party or the performance or observance by the Borrower
or any Obligated Party of any of their obligations under the Agreement or any
other Loan Document.
Section 3.3 New Bank Representations and Agreements. Each Bank (i)
represents and warrants to each of its Assignor Banks and to Agent that it is
legally authorized to enter into this Amendment; (ii) confirms that it has
received a copy of the Agreement and the other Loan Documents, together with
copies of the most recent financial statements delivered pursuant to Section 8.1
thereof, and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Amendment; (iii)
agrees that it will, independently and without reliance upon the Agent or any
other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Agreement and the other Loan Documents; (iv)
appoints and authorizes the Agent to take such action on its behalf and to
exercise such powers under the Loan Documents as are delegated to the Agent by
the terms thereof, together with such powers as are reasonably incidental
thereto; and (v) agrees that it will perform in accordance with their terms all
obligations which by the terms of the Agreement and the other Loan Documents are
required to be performed by it as a Bank.
Section 3.4 Effectiveness. The Assignments are consented to and
accepted by the Borrower, the Obligated Parties and the Agent for purposes of
Section 13.8 of the Agreement and are effective in accordance with the terms
hereof. From and after the Effective Date, (i) each New Bank shall be a party to
the Agreement and shall have the rights and obligations of a Bank thereunder and
under the other Loan Documents, (ii) each Existing Bank shall, to the extent of
the Assignments provided in this Article 3, relinquish its rights and be
released from its obligations under the Agreement and the other Loan Documents,
and (iii) the Agent shall make all payments in respect of the interest assigned
hereby (including payments of principal, interest, fees, and other amounts) to
the applicable New Bank.
Section 3.5 Exchange of Notes; New Commitments. Borrower agrees to
exchange the Assignor Banks' existing Revolving Notes for new Revolving Notes
payable to the order of each Bank in amounts equal to the Revolving Commitments
of each such Bank after giving effect to this Amendment.
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Section 3.6 Address for Notices. For purposes of Section 13.13 of the
Agreement, the "Address for Notices" and "Applicable Lending Office" for each
New Bank is as set forth on the signature pages hereto.
Section 3.7 Outstandings. The Agent agrees to advise each Bank on the
Effective Date of the Revolving Loans and Letters of Credit outstanding on the
Effective Date as reflected in its records and the Purchase Price due from each
New Bank.
ARTICLE IV
Conditions Precedent
Section 4.1 Conditions. The effectiveness of this Amendment is subject
to the satisfaction of the following conditions precedent on or before November
5, 1998:
(a) Agent shall have received all of the following, each dated
(unless otherwise indicated) the date of this Amendment, in form and substance
satisfactory to Agent and in sufficient numbers for each of the Banks:
(i) Resolutions. Resolutions of the duly authorized Board of
Directors of each of the Borrower and each Obligated Party certified by their
respective duly authorized officers, which authorize such company's execution,
delivery, and performance of this Amendment, the Revolving Notes executed
pursuant hereto and all other documents related to the Amendment (collectively,
the "Amendment Documents") to which such company is a party;
(ii) Incumbency Certificate. A certificate of incumbency certified by
a duly authorized officer of each of the Borrower and each Obligated Party
certifying to the name of each of such company's respective officers who are
authorized to sign the Amendment Documents together with specimen signatures of
each such officers;
(iii) Articles of Incorporation. The articles of incorporation (or
similar governing document) of the Borrower and each Obligated Party, certified
by the Secretary of State of the state of such company's incorporation (or the
other appropriate governmental officials of such company's jurisdiction of
organization) and dated a current date;
(iv) Bylaws. The bylaws of the Borrower and each Obligated Party,
certified, respectively, by such company's duly authorized officer;
(v) Governmental Certificates. Certificates of the appropriate
government officials of the respective states of organization of the Borrower
and each Obligated Party as to such company's existence and good standing;
(vi) Notes. The Revolving Notes in the amount of the new Revolving
Commitments executed by the Borrower;
(vii) Opinion of Counsel. A favorable opinion of legal counsel to the
Borrower and each Obligated Party as to such matters relating to the Amendment
Documents as the Agent may reasonably request; and
(viii) Additional Information. Such additional documents, instruments
and information as Agent may request; and
(b) The Banks shall have received (i) the fees payable under that
certain fee letter from Agent to Borrower dated October 9, 1998, and (ii) all
unpaid interest, commitment and letter of credit fees that have accrued as of
the Effective Date;
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(c) The representations and warranties contained herein and in all
other Loan Documents, as amended hereby, shall be true and correct as of the
date hereof as if made on the date hereof;
(d) No Default shall have occurred and be continuing; and
(e) All proceedings taken in connection with the transactions
contemplated by the Amendment Documents and other legal matters incident thereto
shall be satisfactory to Agent.
ARTICLE V
Ratifications, Representations and Warranties
5.1 Ratifications. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Agreement and except as expressly modified and superseded by this
Amendment, the terms and provisions of the Agreement and the other Loan
Documents are ratified and confirmed and shall continue in full force and
effect. Borrower, Agent and the Banks agree that the Agreement as amended hereby
and the other Loan Documents shall continue to be legal, valid, binding and
enforceable in accordance with their respective terms. Borrower acknowledges
that the Revolving Notes executed pursuant to this amendment are "Revolving
Notes" under the Agreement and that the Debt evidenced thereby is included
within the "Obligations" secured by the Borrower Pledge Agreement.
5.2 Representations and Warranties. Borrower hereby represents and
warrants to Agent and the Banks that (i) the execution, delivery and performance
of this Amendment, the Revolving Notes, and the other Amendment Documents are
within Borrower's and the Obligated Parties' power and authority, have been
authorized by all requisite action on the part of Borrower and the Obligated
Parties and will not violate the articles of incorporation or similar governing
documents of Borrower or any of the Obligated Parties nor violate or conflict
with, or result in a breach of, or require any consent under any applicable law,
rule, or regulation or any order, writ, injunction, or decree of any
Governmental Authority or arbitrator or any material agreement or instrument to
which Borrower or any Obligated Party is a party or by which the Borrower or any
Obligated Party or any of their respective property is bound or subject, nor
constitute a default under any such agreement or instrument, nor result in the
creation or imposition of any Lien (except as provided herein) upon any of the
revenues or assets of the Borrower or any Obligated Party; (ii) the
representations and warranties contained in the Agreement, as amended hereby and
by any other Loan Document are true and correct on and as of the date hereof as
though made on and as of the date hereof; (iii) no Default has occurred and is
continuing; (iv) Borrower is in full compliance with all covenants and
agreements contained in the Agreement, as amended hereby and in the other Loan
Documents.
ARTICLE VI
Miscellaneous
Section 6.1 Reference to Agreement. Each of the Loan Documents,
including the Agreement and any and all other agreements, documents, or
instruments now or hereafter
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executed and delivered pursuant to the terms hereof or pursuant to the terms of
the Agreement as amended hereby, are hereby amended so that any reference in
such Loan Documents to the Agreement shall mean a reference to the Agreement as
amended hereby.
Section 6.2 Fees and Expenses. As provided in the Agreement, Borrower
agrees to pay all reasonable costs and expenses incurred by Agent in connection
with the preparation, negotiation, and execution of this Amendment and the other
Amendment Documents, including without limitation the reasonable costs and fees
of Agent's legal counsel.
Section 6.3 Severability. Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
Section 6.4 Applicable Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of Texas.
Section 6.5 Successors and Assigns. This Amendment is binding upon
and shall inure to the benefit of Borrower, the Banks, the Agent and their
respective successors and assigns, except Borrower may not assign or transfer
any of its rights or obligations hereunder without the prior written consent of
the Banks.
Section 6.6 Counterparts. This Amendment may be executed in one or
more counterparts and on telecopy counterparts, each of which when so executed
shall be deemed to be an original, but all of which when taken together shall
constitute one and the same agreement.
Section 6.7 Effect of Waiver. No consent or waiver, express or
implied, by Agent or any Bank to or for any breach of or deviation from any
covenant, condition or duty by Borrower or any Obligated Party shall be deemed a
consent or waiver to or of any other breach of the same or any other covenant,
condition or duty.
Section 6.8 Headings. The headings, captions, and arrangements used
in this Amendment are for convenience only and shall not affect the
interpretation of this Amendment.
Section 6.9 ENTIRE AGREEMENT. THIS AMENDMENT EMBODIES THE FINAL,
ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR
COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR
ORAL, RELATING TO THIS AMENDMENT, AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.
9
Executed as of the date first written above.
BORROWER:
XXXX & BUSTER'S, INC.
By:
-------------------------------------
Xxxxxxx Xxxxxx
Chief Financial Officer
EXISTING BANKS:
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, formerly known as Texas
Commerce Bank National Association,
individually as a Bank and as the Agent
By:
-------------------------------------
Xxxxx X. Xxxxxx, Vice President
COMERICA BANK-TEXAS
By:
-------------------------------------
Xxxxxxx X. Xxxxxx
Vice President
GUARANTY FEDERAL BANK, F.S.B.
By:
-------------------------------------
Name: Xxxxxx X. Xxxx
Title:
BANKBOSTON, N.A.
By:
-------------------------------------
Name:
Title:
NEW BANKS
BANK ONE, TEXAS, N.A.
By:
-------------------------------------
Name:
Title:
10
Address for Notices and Lending Office
for Base Rate Accounts and Eurodollar
Accounts
0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxx
Phone: 000-000-0000
Fax: 000-000-0000
NATIONSBANK, N.A.
By:
-------------------------------------
Name:
Title:
Address for Notices and Lending Office
for Base Rate Accounts and Eurodollar
Accounts
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000-0000
Attn: Xxx X. Xxxxxxx
Phone: 000-000-0000
Fax: 000-000-0000
Each Obligated Party consents and agrees to this Amendment, including the
increase in the aggregate Revolving Commitments of the Banks, and agrees that
the Loan Documents to which it is a party remain in full force and effect and
continue to be its legal, valid and binding obligations enforceable against it
in accordance with their respective terms. By its execution below, each
Obligated Party acknowledges (a) that each guaranty executed by it and securing
the payment or performance of the Borrower's obligations under the Agreement
secures, among other things, the payment of the outstanding Revolving Loans as
such may be increased in accordance with the terms of this Amendment and (b)
that each pledge agreement or other security agreement executed by it and
securing the payment or performance of its obligations under any such guaranty
secures, among other things, such obligations as they may be increased, directly
or indirectly, by this Amendment and the new Revolving Notes.
11
OBLIGATED PARTIES:
DANB TEXAS, INC.
XXXX & BUSTER'S OF PENNSYLVANIA, INC.
XXXX & BUSTER'S OF ILLINOIS, INC.
XXXX & BUSTER'S OF COLORADO, INC.
XXXX & BUSTERS OF FLORIDA, INC.
XXXX & BUSTER'S OF GEORGIA, INC.
XXXX & BUSTER'S OF MARYLAND, INC.
XXXX & BUSTERS OF NEW YORK, INC.
D&B REALTY HOLDING, INC
By:
-------------------------------------
Xxxxxxx Xxxxxx, Chief Financial
Officer of each of the foregoing
Obligated Parties
XXXX & BUSTER'S OF CALIFORNIA, INC.
By:
-------------------------------------
Xxxx X. Xxxxxx, Treasurer
XXXX & BUSTER'S I, L.P.
By: Xxxx & Buster's, Inc., its general
partner
By:
-------------------------------------
Xxxxxxx Xxxxxx,
Chief Financial Officer
12
ANNEX A
to
XXXX & BUSTER'S, INC.
SECOND AMENDMENT TO CREDIT AGREEMENT
Schedule 15
13
SCHEDULE 15
TO
XXXX & BUSTER'S, INC.
CREDIT AGREEMENT
Revolving Commitments
Revolving
Bank Commitment
---- ----------
Chase Bank of Texas, National Association $ 20,000,000
Comerica Bank - Texas $ 15,000,000
Guaranty Federal Bank, F.S.B. $ 15,000,000
BankBoston, N.A. $ 15,000,000
NationsBank, N.A. $ 20,000,000
Bank One, Texas, N.A. $ 15,000,000
------------
TOTAL $100,000,000
============
14
ANNEX B
to
XXXX & BUSTER'S, INC.
SECOND AMENDMENT TO CREDIT AGREEMENT
EXISTING
COMMITMENT ASSIGNED
EXISTING BANK NEW BANK PERCENTAGE PERCENTAGE
-------------------- --------------------- ---------- ----------
1. BankBoston, N.A. NationsBank, N.A. 20% 5%
2 Guaranty Federal Bank, FSB NationsBank, N.A. 20% 5%
3. Chase Bank of Texas, NationsBank, N.A. 30% 10%
National Association
4. Comerica Bank-Texas Bank One, Texas, N.A. 30% 15%
15
EXHIBIT "E"
to
XXXX & BUSTER'S, INC.
SECOND AMENDMENT
TO
CREDIT AGREEMENT
Compliance Certificate
16
COMPLIANCE CERTIFICATE
for the
quarter ending ________ __, ____
NOTE: THIS COMPLIANCE CERTIFICATE
REQUIRES A CHANGE IN THE MARGIN AND FEES AS
SET OUT IN SECTION 11
__ YES __ NO
To: Chase Bank of Texas,
National Association, as agent
0000 Xxxxxx, 0xx Xxxxx MS46
Xxxxxxx, Xxxxx 00000
with a copy to
00000 Xxxxx Xxxx
Xxxxxx, Xxxxx 00000
and each Bank
Ladies and Gentlemen:
This Compliance Certificate (the "Certificate") is being delivered
pursuant to Section 8.1(c) of that certain Credit Agreement (as amended, the
"Agreement") dated as of May 21, 1997 among XXXX & BUSTER'S, INC. (the
"Borrower"), CHASE BANK OF TEXAS, NATIONAL ASSOCIATION (formerly known as Texas
Commerce Bank National Association), as agent, and the Banks named therein. All
capitalized terms, unless otherwise defined herein, shall have the same meanings
as in the Agreement. All the calculations set forth below shall be made pursuant
to the terms of the Agreement.
The undersigned, an authorized financial officer of the Borrower in his
capacity as such financial officer and not in his individual capacity, does
hereby certify to the Agent and the Banks that:
1. DEFAULT.
No Default has occurred and is continuing or, if a Default has occurred and is
continuing, I have described on the attached Exhibit "A" the nature thereof and
the steps taken or proposed to remedy such Default.
Compliance
----------
2. SECTION 8.1 - FINANCIAL STATEMENTS AND RECORDS
(a) Annual audited financial statements of Borrower on a Yes No N/A
consolidated basis within 90 days after the end of each Fiscal Year end
(together with Compliance Certificate).
(b) Quarterly unaudited financial statements of Borrower on a Yes No N/A
consolidated basis within 45 days after each Fiscal Quarter end (together with
Compliance Certificate).
COMPLIANCE CERTIFICATE - Page 2
17
3. SECTION 9.1 - DEBT
No Additional Debt except:
(a) Purchase money not to exceed: $750,000
Actual Outstanding: $_______ Yes No
(d) Other Debt not to exceed: $250,000
Actual Outstanding: $_______ Yes No
4. SECTION 9.5 - INVESTMENTS
(a) Basket of other permitted investments, loans, etc. not to exceed: $250,000
(b) Actual book value: $_______ Yes No
5. SECTION 9.8 - ASSET DISPOSITIONS
(a) Asset dispositions (other than dispositions of obsolete, worn-out
etc., assets) not to exceed $250,000 in any four (4) consecutive Fiscal Quarters
(based on the book value of the assets sold).
(b) Actual book value of assets disposed of in the last four (4) $_______ Yes No
Fiscal Quarters.
6. SECTION 9.11 - NEW BUSINESS LOCATIONS
(a) No more than the Authorized Number of new retail locations opened
in any four (4) Fiscal Quarters.
(i) Authorized Number ________
(b) Current retail locations opened within past 4 Fiscal Quarters:
1. __________________
2. __________________
3. __________________
4. __________________
5. __________________
6. __________________
7. __________________
8. __________________
Total ________ Yes No
7. SECTION 10.1 - CONSOLIDATED NET WORTH
(a) Consolidated Tangible Net Worth as of ________________ $_______
(b) Positive consolidated net income for current Fiscal Quarter (if
positive) $_______
(c) Aggregate positive consolidated net income (for each) Fiscal
Quarter since February 2, 1997 (excluding current Fiscal Quarter) $_______
(d) 7(b) + 7(c) = $_______
(e) 50% of 7(d) = $_______
(f) Net proceeds of the sale of all capital stock of Borrower received
since February 4, 1997 $_______
(g) Required Consolidated Tangible Net Worth: 7(a) + 7(e) + 7(f) $_______
COMPLIANCE CERTIFICATE - Page 3
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(h) Actual Consolidated Net Worth
(i) Consolidated stockholders equity $_______
(ii) Stock of Borrower on Balance Sheet $_______
(iii) Goodwill $_______
(iv) Intellectual Property $_______
(v) Deferred expenses $_______
(vi) Loans and advances to stockholders, officers, etc. $_______
(vii) Other intangible assets $_______
(viii) sum of (ii) through (vii) = $_______
(ix) Consolidated Tangible Net Worth:
(h)(i) minus (h)(viii) = $_______ Yes No
8. SECTION 10.2 -LEVERAGE RATIO
(a) Total Debt as of Fiscal Quarter end
(i) borrowed money $_______
(ii) evidenced by notes, etc. $_______
(iii) deferred purchase price $_______
(iv) Capital Lease Obligations $_______
(v) total $_______
(b) Operating Lease Expense for previous 4 Fiscal Quarters $_______
(c) 8(b) x 8 = $_______
(d) 8(a)(v) + 8(c) = $_______
(e) Consolidated net income as of Fiscal Quarter end for last 4 Fiscal
Quarters $_______
(i) Net Income $_______
(ii) Income of Person not received in a cash distribution
(iii) Extraordinary, non-cash, nonrecurring or nonoperating $_______
increase or gains
(iv) Sum of (ii) and (iii) $_______
(v) Total (i) minus (iv) $_______
(f) provisions for tax $_______
(g) benefit from tax $_______
(h) Interest Expense $_______
(i) amortization $_______
(j) depreciation $_______
(k) Total Pre-Opening Expenses (limited to $1,200,000 per location) $_______
(l) SOP 98-5 one time charge (added only if Fiscal Quarter ending on
January 31, 1999 included) $_______
(m) EBITDA: 8(e)(v) + 8(f) - 8(g) + 8(h) + 8(i) + 8(j)+ 8(k) + 8(l) $_______
(n) Adjusted EBITDA: 8(m) + 8(b) =
(o) Adjusted Debt to Adjusted EBITDA ratio (8(d) a 8(n)) $_______
(p) Maximum Adjusted Debt to Adjusted EBITDA ratio $_______
____ : 1.00
2.50 : 1.00 Yes No
9. SECTION 10.3 - FIXED CHARGE COVERAGE
(a) Cash Flow for last 4 Fiscal Quarters
(i) EBITDA (from 8(m)) $_______
(ii) 8(i) + 8(j) $_______
(iii) Operating Lease Expenses for the last 4 Fiscal Quarters
(iv) Cash Flow: (9(a)(i) - 9(a)(ii) + 9(a)(iii)) = $_______
(b) Fixed Charges for last 4 Fiscal Quarters
(i) Interest Expense paid in cash $_______
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(ii) Operating Lease Expense (9(a)(iii)) $_______
(iii) Total 9(b)(i) + 9(b)(ii) $_______
(c) Actual Fixed Charge Coverage: 9(a)(iv) a 9(b)(iii)= ________
(d) Minimum Fixed Charge Coverage :1.00 Yes No
2.25:1.00
10. SECTION 10.4 - CAPITAL EXPENDITURES
(a) Per location Capital Expenditure Limit $15,000,000
(b) Current new retail locations under development:
Location Capital Expenditures
-------- --------------------
(i) ___________ $________________ Yes No
(ii) ___________ $________________ Yes No
(iii)___________ $________________ Yes No
(iv) ___________ $________________ Yes No
11. DETERMINATION OF MARGIN AND FEES
(a) Adjusted Debt to Adjusted EBITDA Ratio (from 8(o))
(b) Adjustment to margin and fees required by Section 3.2? :1.00 Yes No
(c) If adjustment required, set forth below new margins and fees in
accordance with Section 3.2:
(i) Base Margin
(ii) Commitment Fee Rate _______%
(iii) Libor Rate Margin _______%
_______%
12. SECTION 8.10(d) - PLEDGE OF EQUIPMENT PARTNERSHIPS
(a) Gross revenue from Equipment Partnerships for trailing 4 quarters $_________
(b) Borrower gross revenue for trailing 4 quarters $_________
(c) 12(a) a 12(b) = ._______
(d) Pledge required (?) (i.e., if greater than .15) Yes No
13. ATTACHED SCHEDULES
Attached hereto as schedules are the calculations supporting the computation set
forth above in this Certificate. All information contained herein and on the
attached schedules is true and correct.
14. FINANCIAL STATEMENTS
The financial statements attached hereto were prepared in accordance with GAAP
(or the generally accepted accounting principles of the jurisdiction of
organization of the applicable Person) and fairly present (subject to year end
audit adjustments) the financial conditions and the results of the operations of
the Persons reflected thereon, at the date and for the periods indicated
therein.
IN WITNESS WHEREOF, the undersigned has executed this Certificate
effective this _______ day of _____________, _______.
XXXX & BUSTER'S, INC.
By:
--------------------------
Name:
------------------------
Title:
-----------------------
COMPLIANCE CERTIFICATE - Page 5
