1
FOURTH AMENDMENT AND WAIVER
TO AMENDED AND RESTATED REVOLVING CREDIT
AND TERM LOAN AGREEMENT
Fourth Amendment and Waiver to Amended and Restated Revolving Credit and
Term Loan Agreement dated as of November 22, 1996 (the "Fourth Amendment"), by
and among AU BON PAIN CO., INC., a Delaware corporation ("ABP"), SAINT LOUIS
BREAD COMPANY, INC., a Delaware corporation ("Saint Louis Bread"), ABP MIDWEST
MANUFACTURING CO., INC., a Delaware corporation ("ABP Midwest", and,
collectively with ABP and Saint Louis Bread, the "Borrowers"), and USTRUST, a
Massachusetts trust company, THE FIRST NATIONAL BANK OF BOSTON, a national
banking association, CITIZENS BANK OF MASSACHUSETTS, a Massachusetts savings
bank (collectively, the "Banks"), and USTRUST as agent for the Banks (in such
capacity, the "Agent"), amending certain provisions of the Amended and Restated
Revolving Credit and Term Loan Agreement dated as of March 17, 1995 (as amended
by the First Amendment to Amended and Restated Revolving Credit and Term Loan
Agreement dated as of September 6, 1995, the Second Amendment to Amended and
Restated Revolving Credit and Term Loan Agreement dated as of July 24, 1996, the
Third Amendment to Amended and Restated Revolving Credit and Term Loan Agreement
dated as of September 6, 1996, and as further amended and in effect from time to
time, the "Credit Agreement") by and among the Borrowers, the Banks and the
Agent. Terms not otherwise defined herein which are defined in the Credit
Agreement shall have the same respective meanings herein as therein.
WHEREAS, the Borrowers, the Banks and the Agent have agreed to modify
certain terms and conditions of the Credit Agreement as specifically set forth
in this Fourth Amendment;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION 1. AMENDMENT TO SECTION 1 OF THE CREDIT AGREEMENT. Section 1 of
the Credit Agreement is hereby amended by amending the definition of
"Consolidated Net Income" as follows:
(a) by inserting after the words "Consolidated Net Income" in the
heading thereof the parenthetical phrase "(or Deficit)"; and
(b) by inserting after the words "the net income" in the first line
thereof the parenthetical phrase "(or deficit)".
SECTION 2. AMENDMENTS TO SECTION 7 OF THE CREDIT AGREEMENT. Section 7 of
the Credit Agreement is hereby amended as follows:
2
-2-
(a) Section 7.3 of the Credit Agreement is hereby amended by
deleting such section in its entirety and replacing it with the following
new Section 7.3:
Section 7.3. Consolidated Capital Expenditures. With respect
to each fiscal year of the Borrowers set forth in the table below,
the Borrowers will not permit (a) Consolidated Capital Expenditures
(other than Capital Expenditures incurred in such fiscal year in
connection with the acquisition and equipping of, and improvements
to, the Borrowers' facilities in Mexico, Missouri) to exceed the
amount set forth in the table below opposite such fiscal year in the
column headed "Maximum Consolidated Capital Expenditures" or (b)
Consolidated New Cafe Capital Expenditures to exceed the amount set
forth in the table below opposite such fiscal year in the column
headed "Maximum Consolidated New Cafe Capital Expenditures";
provided that with regard to any such fiscal year (other than the
fiscal year ending on December 26, 1998), if Consolidated Adjusted
Cash Flow for such fiscal year is less than that amount set forth in
the table below opposite such fiscal year in the column headed
"Consolidated Adjusted Cash Flow," Maximum Consolidated Capital
Expenditures and Maximum Consolidated New Cafe Capital Expenditures
permitted hereunder for such fiscal year shall be reduced by the
difference between the amount set forth for such fiscal year in such
column headed " Consolidated Adjusted Cash Flow" and the actual
Consolidated Adjusted Cash Flow for such fiscal year.
----------------------------------------------------------------
MAXIMUM MAXIMUM
CONSOLIDATED CONSOLIDATED NEW CONSOLIDATED
FISCAL YEAR CAPITAL CAFE CAPITAL ADJUSTED CASH
ENDING EXPENDITURES EXPENDITURES FLOW
----------------------------------------------------------------
12/28/96 $14,000,000 $4,000,000 $15,300,000
----------------------------------------------------------------
12/27/97 $20,000,000 $9,000,000 $22,000,000
----------------------------------------------------------------
12/26/98 $26,000,000 $16,000,000 n/a
----------------------------------------------------------------
(b) Section 7.5 of the Credit Agreement is hereby amended by
deleting such section in its entirety and replacing it with the following
new Section 7.5:
Section 7.5 Projected New Cafe Capital Expenditures. With
respect to each fiscal quarter of the Borrowers set forth in the
table below, the Borrowers will not permit Projected New Cafe
Capital Expenditures for the fiscal year specified opposite such
fiscal quarter in the table below to exceed the amount set forth in
the table below opposite such fiscal quarter in the column headed
"Maximum Projected New Cafe Capital Expenditures"; provided that if,
with respect to each fiscal quarter (other than the fiscal quarters
ending on October 5, 1996 and April 18, 1998)
3
-3-
set forth in the table below, Consolidated Adjusted Cash Flow
determined for the period of four consecutive fiscal quarters then
ending is less than that amount set forth in the table below
opposite such fiscal quarter in the column headed "Consolidated
Adjusted Cash Flow," Maximum Projected New Cafe Capital Expenditures
permitted hereunder for such fiscal quarter shall be reduced by the
difference between the amount set forth for such period of four
consecutive fiscal quarters in such column headed "Consolidated
Adjusted Cash Flow" and the actual Consolidated Adjusted Cash Flow
for such period.
------------------------------------------------------------
MAXIMUM
FOR PROJECTED NEW CONSOLIDATED
FISCAL QUARTER FISCAL CAFE CAPITAL ADJUSTED CASH
ENDING YEAR EXPENDITURES FLOW
------------------------------------------------------------
10/5/96 1997 $1,000,000 n/a
------------------------------------------------------------
12/28/96 1997 $4,000,000 $15,300,000
------------------------------------------------------------
4/19/97 1997 $6,000,000 $16,200,000
------------------------------------------------------------
7/12/97 1997 $9,000,000 $16,800,000
------------------------------------------------------------
10/4/97 1998 $6,000,000 $20,000,000
------------------------------------------------------------
12/27/97 1998 $9,000,000 $22,000,000
------------------------------------------------------------
4/18/98 1998 $12,000,000 n/a
------------------------------------------------------------
(c) Section 7.7 of the Credit Agreement is hereby amended by
deleting such section in its entirety and replacing it with the following
new section:
Section 7.7. Net Losses. The Borrowers and their Subsidiaries
will not permit (a) Consolidated Net Deficit for the period of two
consecutive fiscal quarters ending December 28, 1996 to exceed
$2,700,000, and (b) Consolidated Net Income for each period
consisting of two consecutive fiscal quarters commencing with the
period of two consecutive fiscal quarters ending April 19, 1997 to
be less than $1.00.
(d) Section 7.8 of the Credit Agreement is hereby amended by
deleting the table set forth therein in its entirety and replacing it with
the following new table:
------------------------------------------
TWO CONSECUTIVE CONSOLIDATED
FISCAL QUARTERS ADJUSTED CASH
ENDING FLOW
------------------------------------------
12/28/96 $ 5,100,000
------------------------------------------
4/19/97 $ 9,500,000
------------------------------------------
7/12/97 $10,500,000
------------------------------------------
10/4/97 $ 8,700,000
------------------------------------------
4
-4-
12/27/97 $ 9,700,000
------------------------------------------
4/18/98 $11,000,000
------------------------------------------
SECTION 3. AMENDMENT TO SCHEDULE 1.1(a). Schedule 1.1(a) to the Credit
Agreement is hereby amended by deleting such schedule in its entirety and
replacing it with Schedule 1.1(a) attached hereto.
SECTION 4. WAIVER. The Borrowers have informed the Banks that they are not
in compliance with the financial covenants under Section 7.7 and Section 7.8 of
the Credit Agreement (prior to the effectiveness of this Fourth Amendment) as of
the end of the fiscal quarter ending October 5, 1996, resulting in two Events of
Default under Section 10(c) of the Credit Agreement (the "Existing Defaults").
The Borrowers hereby request that the Banks waive the Existing Default. In
response to the Borrowers' request, the Banks hereby waive the Existing Default,
provided that the waiver contained herein shall operate solely with respect to
the Existing Defaults as in effect as of the end of the fiscal quarter ending
October 5, 1996 and shall not impair any right or power accruing to the Banks
with respect to any other Default or Event of Default which may now exist or any
Default or Event of Default which may occur after the date hereof including
without limitation any Event of Default with respect to Section 7.7 and
Section 7.8 of the Credit Agreement.
SECTION 5. REPRESENTATIONS AND WARRANTIES. Each of the Borrowers hereby
repeats, on and as of the date hereof, each of the representations and
warranties made in Section 5 of the Credit Agreement as though such
representations and warranties refer specifically to such Borrower, except to
the extent of changes resulting from transactions contemplated or permitted by
this Fourth Amendment or the Credit Agreement and except to the extent that such
representations and warranties relate expressly to an earlier date; provided,
that all references therein to the Credit Agreement shall refer to such Credit
Agreement as amended hereby. No Default or Event of Default has occurred and is
continuing under the Credit Agreement after giving effect to this Fourth
Amendment.
SECTION 6. EFFECTIVENESS. The effectiveness of this Fourth Amendment shall
be subject to the satisfaction of the following conditions precedent:
Section 6.1. Corporate Action. All corporate action necessary for
the valid execution, delivery and performance by each of the Borrowers of
this Fourth Amendment and the other Loan Documents to which they are or
are to become a party shall have been duly and effectively taken, and
evidence thereof satisfactory to the Banks shall have been provided to
each of the Banks.
Section 6.2. Loan Documents. This Fourth Amendment shall have been
duly executed and delivered to the Agent by each of the parties to the
Credit Agreement.
5
-5-
Section 6.3. Amendment Fee. The Borrowers shall have paid the Agent,
for the pro rata accounts of the Banks, an amendment fee in the amount of
$15,000.
Section 6.4. Amendment of Letter of Credit Reimbursement Agreement.
The Banks shall have received a duly executed amendment and waiver to that
certain Letter of Credit Reimbursement Agreement dated as of July 1, 1995
among ABP, ABP Midwest and Citizens Trust Company, as amended, in form and
substance satisfactory to the Banks and the Agent.
Section 6.5. Side Letter. A side letter concerning Consolidated
Capital Expenditures shall have been duly executed and delivered to the
Agent by each of the parties to the Credit Agreement.
SECTION 7. RATIFICATION, ETC. Except as expressly amended hereby, the
Credit Agreement and all documents, instruments and agreements related thereto,
including, but not limited to the Loan Documents, are hereby ratified and
confirmed in all respects and shall continue in full force and effect. The
Credit Agreement and this Fourth Amendment shall be read and construed as a
single agreement. All references in the Credit Agreement or any related
agreement or instrument to the Credit Agreement shall hereafter refer to the
Credit Agreement as amended hereby.
SECTION 8. NO WAIVER. Except as otherwise expressly provided in Section 4,
nothing contained herein shall constitute a waiver of, impair or otherwise
affect any Obligations, any other obligation of the Borrowers or any rights of
the Agent or the Banks consequent thereon.
SECTION 9. COUNTERPARTS. This Fourth Amendment may be executed in one or
more counterparts, each of which shall be deemed an original but which together
shall constitute one and the same instrument.
SECTION 10. GOVERNING LAW. THIS FOURTH AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
(WITHOUT REFERENCE TO CONFLICT OF LAWS).
6
-6-
IN WITNESS WHEREOF, the parties hereto have executed this Fourth Amendment
as a document under seal as of the date first above written.
AU BON PAIN CO., INC.
By: /s/ Louis I. Kane
Name: Louis I. Kane
Title: Co-Chairman
SAINT LOUIS BREAD COMPANY, INC.
By: /s/ Louis I. Kane
Name: Louis I. Kane
Title: Executive Vice President
ABP MIDWEST MANUFACTURING CO., INC.
By: /s/ Louis I. Kane
Name: Louis I. Kane
Title: Executive Vice President
USTRUST
INDIVIDUALLY AND
AS AGENT
By: /s/ Anthony Wilson
Anthony Wilson
Vice President
THE FIRST NATIONAL BANK
OF BOSTON
By: /s/ Margaret Ronan Stack
Margaret Ronan Stack
Vice President
7
-7-
CITIZENS BANK OF MASSACHUSETTS
By: /s/ Anne Forbes Van Nest
Name: Anne Forbes Van Nest
Title: Vice President
8
Schedule 1.1(a)
REVOLVING CREDIT COMMITMENTS
Commitment
Lender Commitment Percentage
- ------ ---------- ----------
USTrust $9,333,333.34 33-1/3%
30 Court Street
Boston, Massachusetts 02108
Telefax Number: (617) 726-7380
Telex: 681752
Answerback: UST BSN
Attention: Anthony G. Wilson, V.P.
The First National Bank of Boston $9,333,333.33 33-1/3%
100 Federal Street
Boston, Massachusetts 02110
Telefax Number: (617) 434-4426
Telex: 940581
Answerback: BOSTONBK BSN
Attention: Margaret R. Stack, V.P.
Citizens Bank of Massachusetts $9,333,333.33 33-1/3%
55 Summer Street
Boston, MA 02110
Telefax Number: (617) 482-9730
Attention: Anne Forbes Van Nest
9
November 22, 1996
Au Bon Pain Co., Inc.
19 Fid Kennedy Avenue
Marine Industrial Park
Boston, Massachusetts 02210
Attention: Mr. Anthony J. Carroll, Chief Financial Officer
Re: Consolidated Capital Expenditures
Ladies and Gentlemen:
Please refer to that certain Amended and Restated Revolving Credit and
Term Loan Agreement dated as of March 17, 1995 (as amended by the First
Amendment to Amended and Restated Revolving Credit and Term Loan Agreement dated
as of September 6, 1995, the Second Amendment to Amended and Restated Revolving
Credit and Term Loan Agreement dated as of July 24, 1996, the Third Amendment to
Amended and Restated Revolving Credit and Term Loan Agreement dated as of
September 6, 1996, and the Fourth Amendment and Waiver to Amended and Restated
Revolving Credit and Term Loan Agreement dated as of November 22, 1996, and as
further amended and in effect from time to time, the "Credit Agreement") by and
among the Borrowers, the Banks and the Agent. Terms not otherwise defined herein
which are defined in the Credit Agreement shall have the same respective
meanings herein as therein.
This letter is being executed in connection with the Fourth Amendment and
Waiver to Amended and Restated Revolving Credit and Term Loan Agreement dated as
of November 22, 1996 among all the parties to the Credit Agreement pursuant to
which the Credit Agreement is being amended.
The undersigned hereby agree that at any time between April 30, 1997 and
May 30, 1997, if Citizens Bank of Massachusetts ("Citizens") remains a party to
the Credit Agreement as a Bank thereunder at such time, any Bank may
unilaterally demand that the "Maximum Consolidated Capital Expenditures"
permitted to be made by the Borrowers under Section 7.3 of the Credit Agreement
for fiscal year 1997 be reduced to an amount of not less than $15,000,000 as
specified by such Bank. Such demand may be made regardless of whether the
Borrowers are in compliance with the covenants set forth in the Credit
Agreement.
The undersigned hereby further agree that upon any Bank making such
demand, the Credit Agreement shall be promptly amended to evidence such
reduction in the "Maximum Consolidated Capital Expenditures" permitted to be
made by the Borrowers under Section 7.3 of the Credit Agreement.
If the foregoing correctly sets forth our agreement, kindly execute this
letter in the appropriate space below, whereupon this letter shall become
enforceable as a sealed instrument under the laws of the Commonwealth of
Massachusetts.
10
-2-
Very truly yours,
USTRUST
INDIVIDUALLY AND AS AGENT
By:/s/ Anthony Wilson
Anthony Wilson
Vice President
THE FIRST NATIONAL BANK OF BOSTON
By:/s/ Margaret Ronan Stack
Margaret Ronan Stack
Vice President
CITIZENS BANK OF MASSACHUSETTS
By: /s/ Anne Forbes Van Nest
Name: Anne Forbes Van Nest
Title: Vice President
ACCEPTED:
AU BON PAIN CO., INC.
By: /s/ Louis I. Kane
Name: Louis I. Kane
Title: Co-Chairman
SAINT LOUIS BREAD COMPANY, INC.
By: /s/ Louis I. Kane
Name: Louis I. Kane
Title: Executive Vice President
ABP MIDWEST MANUFACTURING CO., INC.
By: /s/ Louis I. Kane
Name: Louis I. Kane
Title: Executive Vice President