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AGREEMENT OF AMENDMENT
This AGREEMENT OF AMENDMENT (this "Agreement") dated as of January 1,
1998, among DAIRY MART CONVENIENCE STORES, INC. (the "Company"), BANK OF BOSTON
CONNECTICUT, individually and as Agent under the Credit Agreement (as
hereinafter defined), HELLER FINANCIAL, INC. ("Heller") and STATE STREET BANK
AND TRUST COMPANY ("State Street").
WHEREAS, the Company, the banks and other financial institutions
listed on Schedule 1 thereto (collectively, with any banks or financial
institutions from time to time parties thereto, the "Banks"), and Bank of
Boston Connecticut ("BOBC"), as agent of the Banks thereunder (in such
capacity, the "Agent") entered into a certain Credit Agreement dated as of
April 24, 1996 (as amended the "Credit Agreement"); and
WHEREAS, the Company, the Banks and the Agent wish to amend the Credit
Agreement as more fully set forth below.
NOW THEREFORE, the parties hereto agree as follows:
I. AGREEMENT OF THE PARTIES
1. Unless the context shall otherwise require, all capitalized terms
used herein without definition shall have the meanings assigned to them in the
Credit Agreement.
2. Section 1.1 of the Credit Agreement shall be, and hereby is, amended
by deleting the definitions of "Adjusted Consolidated Indebtedness" and
"Minimum Consolidated Net Worth" in their entirety and substituting in lieu
thereof the following:
"ADJUSTED CONSOLIDATED INDEBTEDNESS" that amount which is equal to
Consolidated Indebtedness reduced by an amount equal to the sum of
(i) Cash and Cash Equivalents, and (ii) that portion of the
Company's assets (as shown on its balance sheet) which represents
real property owned by the Company and used for stores with respect
to which the Company is party to a fully binding commitment to
enter into a sale-leaseback arrangement within sixty days following
the date of such calculation.
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"MINIMUM CONSOLIDATED NET WORTH" (i) as at the FQED to occur on or
about February 1, 1997: $7,500,000; (ii) as at the FQED to occur on
or about April 30, 1997: $6,750,000; (iii) as at the FQED to occur
on or about July 31, 1997: $7,900,000; (iv) as at the FQED to occur
on or about October 31, 1997: $8,700,000; (v) as at the FQED to
occur on or about January 31, 1998: $6,300,000; (vi) as at the FQED
to occur on or about April 30, 1998: $4,800,000; (vii) as at the
FQED to occur on or about July 31, 1998: $5,400,000; (viii) as at
the FQED to occur on or about October 30, 1998: $5,850,000; and
(ix) as at the FQED to occur on or about January 31, 1999:
$5,600,000 and thereafter, $5,600,000 plus 50% of Cumulative
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Consolidated Net Income earned after the FQED ending approximately
January 31, 1999.
3. Section 7.1(a) of the Credit Agreement shall be, and hereby is,
amended by deleting such Section 7.1(a) in its entirety and substituting in lieu
thereof the following:
(a) ADJUSTED CONSOLIDATED INDEBTEDNESS TO CONSOLIDATED EBITDA. For
any period of four consecutive fiscal quarters ending on any FQED
set forth below, permit the ratio of (i) Adjusted Consolidated
Indebtedness at the end of such period to (ii) Consolidated EBITDA
for such period to be more than the ratio set forth opposite such
FQED:
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FQED Ratio
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The FQED ending on or about February 1, 1997 4.50 to 1.00
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The FQED ending on or about April 30, 1997 5.25 to 1.00
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The FQED ending on or about July 31, 1997 3.80 to 1.00
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The FQED ending on or about October 31, 1997 4.60 to 1.00
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The FQED ending on or about January 31, 1998 5.00 to 1.00
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The FQED ending on or about April 30, 1998 5.85 to 1.00
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The FQED ending on or about July 31, 1998 5.65 to 1.00
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The FQED ending on or about October 30, 1998 5.25 to 1.00
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The FQED ending on or about January 31, 1999 and thereafter 4.65 to 1.00
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4. Section 7.1(b) of the Credit Agreement shall be, and hereby is,
amended by deleting Section 7.1(b) in its entirety and substituting in lieu
thereof the following:
(b) EBITDA TO INTEREST EXPENSE. For any period of four consecutive
fiscal quarters ending on any FQED set forth below, permit the ratio
of (i) Consolidated EBITDA for the applicable period to (ii)
Consolidated Interest Expense for such period to be less than the
ratio set forth opposite such FQED:
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FQED Ratio
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The FQED ending on or about February 1, 1997 2.00 to 1.00
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The FQED ending on or about April 30, 1997, July 30, 1.60 to 1.00
1997 and October 31, 1997
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The FQED ending on or about January 31, 1998 1.60 to 1.00
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The FQED ending on or about April 30, 1998 1.40 to 1.00
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The FQED ending on or about July 31, 1998 1.45 to 1.00
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The FQED ending on or about October 30, 1998 1.60 to 1.00
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The FQED ending on or about January 31, 1999 2.00 to 1.00
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5. Section 7.1(c) of the Credit Agreement shall be, and hereby is,
amended by deleting Section 7.1(c) in its entirety and substituting in lieu
thereof the following:
(c) FIXED CHARGE COVERAGE. For any period of four consecutive
fiscal quarters ending on any FQED set forth below, permit the
ratio of (i) Consolidated EDITDAR minus the amount of any federal,
state and local income taxes levied by a Governmental Authority on
the revenues of the Company which are actually paid by the Company
or its consolidated Subsidiaries in cash during such period, to
(ii) Consolidated Interest Expense, plus all principal payments
required to be made during the period on account of any Consolidated
Indebtedness, plus the amount of any Consolidated Rent Expense
during the period, to be less than the ratio set forth opposite such
FQED:
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FQED Ratio
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The FQED ending on or about February 1, 1997 1.20 to 1.00
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The FQED ending on or about April 30, 1997, July 31, 1.25 to 1.00
1997 and October 31, 1997
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The FQED ending on or about January 1, 1998 1.25 to 1.00
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The FQED ending on or about April 30, 1998 1.05 to 1.00
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The FQED ending on or about July 31, 1998 1.15 to 1.00
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The FQED ending on or about October 30, 1998 1.20 to 1.00
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The FQED ending on or about January 31, 1999 and 1.25 to 1.00
thereafter
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6. Except as specifically amended or modified by this Agreement, all
terms and conditions set forth in the Credit Agreement and the Security
Document remain in full force and effect.
7. This Agreement shall be governed by and construed in accordance with
the laws of the State of Connecticut.
8. The Company shall reimburse the Agent for the fees and expenses of its
counsel in connection with this Agreement.
9. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute but one agreement.
II. REPRESENTATIONS AND WARRANTIES OF COMPANY
The Company represents and warrants as follows:
1. The representations and warranties set forth in the Credit Agreement
are true and correct in all material respects on the date hereof as if made on
the date hereof.
2. After giving effect to this Agreement, no Event of Default has occurred
and is continuing, and no event or condition has occurred or exists which would
constitute an Event of Default but for the giving of notice or passage of time
or both.
III. CONDITIONS TO EFFECTIVENESS
This Agreement shall be effective upon satisfaction of the following
conditions:
1. The Agent shall have received counterparts of this Agreement which,
when taken together, bear the signatures of all parties hereto.
2. The representations and warranties of the Company set forth in
Section II of this Agreement shall be true and correct in all respects.
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IN WITNESS WHEREOF, the parties have caused this agreement to be executed
and delivered as of the date first above written.
DAIRY MART CONVENIENCE STORES, INC.
By: /s/ Susan D. Adams
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Name: Susan Adams
Title: Vice President
BANK OF BOSTON CONNECTICUT,
Individually and as Agent
By: /s/ Scott S. Barnett
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Name: Scott S. Barnett
Title: Vice President
HELLER FINANCIAL, INC.
By: /s/ William P. Watkins
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Name: William P. Watkins
Title: Vice President
STATE STREET BANK AND TRUST COMPANY
By: /s/ Karen F. Booth
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Name: Karen Booth
Title: Vice President
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