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THIRD AMENDMENT
TO AMENDED AND RESTATED REVOLVING CREDIT
AND TERM LOAN AGREEMENT
Third Amendment to Amended and Restated Revolving Credit and Term Loan
Agreement dated as of September 6, 1996 (the "Third 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, 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 Third 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 as follows:
(a) by deleting the date "April 30, 1997" occurring in the
definition of "Maturity Date" contained in Section 1.1 and replacing it
with "June 30, 1998".
(b) by amending the definition of Consolidated Total Debt
Service by deleting therefrom the clause "plus (c) one fifth of the
Revolving Credit Loans outstanding as of the last day of the period for
which Consolidated Total Debt Service is then being determined".
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(c) by inserting in the appropriate alphabetical order the
following definitions:
Consolidated Adjusted Cash Flow. For any specified period, the
sum of (a) Consolidated Net Income for such period, plus (b) the
aggregate amount of depreciation, amortization and other non-cash
charges for such period, in each case determined on a consolidated
basis for the Borrowers and their Subsidiaries in accordance with
generally accepted accounting principles.
Consolidated Free Cash Flow. With respect to the Borrowers and
their Subsidiaries and for any period, the sum of (a) Consolidated
Net Income for such period plus (b) the aggregate amount of
depreciation, amortization and other non-cash charges for such
period, plus (c) to the extent deducted in the calculation of
Consolidated Net Income for such period, Consolidated Total
Interest Expense for such period, less (d) the aggregate amount of
Non-Discretionary Capital Expenditures for such period, in each
case determined on a consolidated basis for the Borrowers and
their Subsidiaries in accordance with generally accepted
accounting principles.
Consolidated New Cafe Capital Expenditures. With respect to
new bakery cafes or stores which open in any relevant fiscal
period, the aggregate amount of Consolidated Capital Expenditures
of the Borrowers and their Subsidiaries which, in accordance with
generally accepted accounting principles, are properly
attributable to the acquisition, construction, or equipping of
such new cafes or stores regardless of the fiscal quarter in which
such Consolidated Capital Expenditures were incurred.
Projected New Cafe Capital Expenditures. Those Consolidated
New Cafe Capital Expenditures of the Borrowers and their
Subsidiaries anticipated by the Borrowers and their Subsidiaries
to be incurred in connection with the opening of new bakery cafes
or stores. For purposes of determining Projected New Cafe Capital
Expenditures, Consolidated New Cafe Capital Expenditures incurred
with respect to each new bakery cafe or store will be deemed to be
incurred in the earlier of (a) the fiscal quarter in which such
new bakery cafe or store actually opens for business with the
public regardless of the fiscal period in which such Consolidated
Capital Expenditures were actually incurred and (b) six (6)
calendar months after the date on which the lease of the property
where such bakery cafe or store will be located is entered into by
any Borrower or any Subsidiary of the Borrower, or in the case of
the purchase of such property, the date of such purchase by such
Borrower or such Subsidiary.
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SECTION 2. AMENDMENT TO SECTION 3.1(a)(i) OF THE CREDIT AGREEMENT.
Section 3.1(a)(i) of the Credit Agreement is hereby amended by inserting the
following language immediately before the semi-colon occurring at the end of
Section 3.1(a)(i):
"provided that if the Revolving Credit Applicable Margin which would be
applicable to such Revolving Credit Loan if such Revolving Credit Loan
were a Eurodollar Rate Loan is greater than or equal to three percent
(3.0%), then such Revolving Credit Loan shall bear interest at a rate
per annum equal to the Base Rate plus one-half of one percent (0.50%)".
SECTION 3. AMENDMENT TO SECTION 5.4 OF THE CREDIT AGREEMENT. Section
5.4 of the Credit Agreement is hereby amended by adding the following new
subsection (h) at the end thereof:
(h) simultaneously with the delivery of the financial
statements referred to in subsections (a) and (b) above, a report
containing a summary of (i) all leases entered into by any Borrower or
any Subsidiary of a Borrower and all property otherwise acquired by any
Borrower or any Subsidiary of a Borrower for new bakery cafes and
stores during the fiscal quarter ending immediately prior to the date
of delivery of such report, (ii) the Projected New Cafe Capital
Expenditures associated with each such bakery cafe and store, (iii) the
total Projected New Cafe Capital Expenditures for all bakery cafes and
stores to be opened in the current fiscal year, and (iv) together with
the delivery of financial statements for the third and fourth fiscal
quarters of each fiscal year of the Borrowers, the total Projected New
Cafe Capital Expenditures for all bakery cafes and stores to be opened
in the succeeding fiscal year.
SECTION 4. AMENDMENTS TO SECTION 7 OF THE CREDIT AGREEMENT. Section 7
of the Credit Agreement is hereby amended as follows:
(a) Section 7.1 of the Credit Agreement is hereby amended by
deleting such section in its entirety and replacing it with the
following new Section 7.1:
Section 7.1 Maximum Allowable Leverage Ratio. The
Borrowers will not, at any time, permit the Leverage Ratio to
exceed 0.65:1.00.
(b) Section 7.2 of the Credit Agreement is hereby amended by
deleting such section in its entirety and replacing it with the
following new Section 7.2:
Section 7.2 [Intentionally Omitted].
(c) 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
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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:
(i) 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 exceeds that amount
set forth in the table below opposite such fiscal year in the
column headed "100% Consolidated Adjusted Cash Flow," Maximum
Consolidated Capital Expenditures and Maximum Consolidated New
Cafe Capital Expenditures permitted hereunder for such fiscal
year shall be increased by the amount of such excess; and
(ii) with regard to any such fiscal year (other than
the fiscal year ending on December 26, 1998), if Consolidated
Adjusted Cash Flow is less than that amount set forth in the
table below opposite such fiscal year in the column headed
"95% 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 "95% Consolidated Net
Income" and the actual Consolidated Adjusted Cash Flow for
such fiscal year.
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MAXIMUM CONSOLIDATED MAXIMUM CONSOLIDATED 100% CONSOLIDATED 95% CONSOLIDATED
CAPITAL NEW CAFE CAPITAL ADJUSTED CASH ADJUSTED CASH
FISCAL YEAR ENDING EXPENDITURES EXPENDITURES FLOW FLOW
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12/28/96 $17,500,000 $ 6,800,000 $18,600,000 $17,700,000
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12/27/97 $24,000,000 $15,000,000 $21,700,000 $20,600,000
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12/26/98 $26,000,000 $16,000,000 n/a n/a
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(d) Section 7 of the Credit Agreement is hereby amended by
inserting at the end thereof the following new Section 7.5:
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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:
(a) if, with respect to each fiscal quarter (other
than the fiscal quarter ending on April 18, 1998) set forth in
the table below, Consolidated Adjusted Cash Flow determined
for the period of four consecutive fiscal quarters then ending
exceeds that amount set forth in the table below opposite such
fiscal quarter in the column headed "100% Consolidated
Adjusted Cash Flow," Maximum Projected New Cafe Capital
Expenditures permitted hereunder for such fiscal quarter shall
be increased by the amount of such excess; and
(b) if, with respect to each fiscal quarter (other
than the fiscal quarter ending on April 18, 1998) 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 "95% 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 "95% Consolidated Adjusted Cash Flow" and the actual
Consolidated Adjusted Cash Flow for such period.
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MAXIMUM 100% 95%
PROJECTED NEW CONSOLIDATED CONSOLIDATED
FISCAL QUARTER FISCAL CAFE CAPITAL ADJUSTED CASH ADJUSTED CASH
ENDING YEAR EXPENDITURES FLOW FLOW
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10/5/96 1997 $ 6,000,000 $18,200,000 $17,300,000
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12/28/96 1997 $ 9,000,000 $18,600,000 $17,700,000
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4/19/97 1997 $12,000,000 $19,100,000 $18,200,000
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7/12/97 1997 $15,000,000 $19,300,000 $18,300,000
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10/4/97 1998 $ 7,000,000 $20,600,000 $19,600,000
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12/27/97 1998 $10,000,000 $21,700,000 $20,600,000
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4/18/98 1998 $13,000,000 n/a n/a
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(e) Section 7 of the Credit Agreement is hereby amended by
inserting at the end thereof the following new Section 7.6:
Section 7.6. Consolidated Free Cash Flow. The
Borrowers will not permit the ratio of Consolidated Free Cash
Flow to Consolidated Total Debt Service, determined at the end
of each fiscal quarter of the Borrowers for the period
consisting of the four (4) consecutive fiscal quarters then
ending (after excluding from Total Debt Service to the extent
otherwise included, all principal payments due at maturity,
Revolving Credit Loans, maturities in respect of the Term
Loan, and maturities in respect of that certain Letter of
Credit Reimbursement Agreement dated as of July 1, 1995 among
ABP, ABP Midwest and Citizens Trust Company) to be less than
2.7:1.0.
(f) Section 7 of the Credit Agreement is hereby amended by
inserting at the end thereof the following new Section 7.7:
Section 7.7. No Net Losses. The Borrowers and their
Subsidiaries will not permit Consolidated Net Income for each
period consisting of two (2) consecutive fiscal quarters to be
less than $1.00.
(g) Section 7 of the Credit Agreement is hereby amended by
inserting at the end thereof the following new Section 7.8:
Section 7.8. Consolidated Adjusted Cash Flow. With
respect to each period consisting of two consecutive fiscal
quarters and ending on a date set forth in the table below,
the Borrowers and their Subsidiaries will not permit
Consolidated Adjusted Cash Flow for such period to be less
than the amount set forth in the table below opposite the date
on which such period ends:
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TWO CONSECUTIVE FISCAL CONSOLIDATED ADJUSTED
QUARTERS ENDING CASH FLOW
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10/5/96 $ 7,200,000
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12/28/96 $ 7,800,000
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4/19/97 $10,300,000
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7/12/97 $ 9,900,000
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10/4/97 $ 8,900,000
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12/27/97 $10,000,000
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4/18/98 $11,000,000.
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SECTION 5. AMENDMENT TO SCHEDULES. The Schedules to the Credit
Agreement are hereby amended by (a) deleting Schedule 1.1(d) in its entirety and
replacing it with Schedule 1.1(d) attached hereto; and (b) deleting Schedule
1.1(e) in its entirety and replacing it with Schedule 1.1(e) attached hereto.
SECTION 6. 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 4 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 Third 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.
SECTION 7. EFFECTIVENESS. The effectiveness of this Third Amendment
shall be subject to the satisfaction of the following conditions precedent:
Section 7.1. Corporate Action. All corporate action necessary
for the valid execution, delivery and performance by each of the
Borrowers of this Third 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 7.2. Loan Documents. This Third Amendment shall have
been duly executed and delivered to the Agent by each of the parties
hereto.
Section 7.3. Amendment Fee. The Borrowers shall have paid the
Agent, for the pro rata accounts of the Banks, an amendment fee in the
amount of $45,000.
SECTION 8. 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 Third 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.
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SECTION 9. NO WAIVER. 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 10. COUNTERPARTS. This Third 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 11. GOVERNING LAW. THIS THIRD AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
(WITHOUT REFERENCE TO CONFLICT OF LAWS).
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IN WITNESS WHEREOF, the parties hereto have executed this Third
Amendment as a document under seal as of the date first above written.
AU BON PAIN CO., INC.
By: /s/ Xxxxx X. Xxxx
Name: Xxxxx X. Xxxx
Title:
SAINT LOUIS BREAD COMPANY, INC.
By: /s/ Xxxxx X. Xxxx
Name: Xxxxx X. Xxxx
Title:
ABP MIDWEST MANUFACTURING CO., INC.
By: /s/ Xxxxx X. Xxxx
Name: Xxxxx X. Xxxx
Title:
USTRUST
INDIVIDUALLY AND
AS AGENT
By: /s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx
Vice President
THE FIRST NATIONAL BANK
OF BOSTON
By: /s/ Xxxxxxxx Xxxxx Stack
Name: Xxxxxxxx Xxxxx Stack
Title: Vice-President
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CITIZENS BANK OF MASSACHUSETTS
By: /s/ Xxxx Xxxxxx Van Nest
Name: Xxxx Xxxxxx Van Nest
Title: Vice-President
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Schedule 1.1(d)
REVOLVING CREDIT APPLICABLE MARGIN
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Consolidated Net Income for Most Recently Ended Consolidated Total Liabilities To Consolidated Total Liabilities To
Period of Four Consecutive Fiscal Quarters Consolidated Tangible Net Worth Consolidated Tangible Net Worth
If Such Ratio is Less Than 1.7 to 1.0 If Such Ratio Equals or Exceeds 1.7 to 1.0
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Greater Than $9,000,000 0.75% 1.25%
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from $7,000,000 to $9,000,000 (inclusive) 1.00% 1.50%
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from $5,000,000 to $6,999,999.99 (inclusive) 1.50% 2.00%
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from $2,000,000 to $4,999,999.99 (inclusive) 2.00% 2.50%
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Less Than $2,000,000 3.00% 3.00%
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Schedule 1.1(e)
TERM APPLICABLE MARGIN
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Consolidated Net Income for Most Recently Ended Consolidated Total Liabilities To Consolidated Total Liabilities To
Period of Four Consecutive Fiscal Quarters Consolidated Tangible Net Worth Consolidated Tangible Net Worth
If Such Ratio is Less Than 1.7 to 1.0 If Such Ratio Equals or Exceeds 1.7 to 1.0
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Greater Than $9,000,000 1.25% 1.75%
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from $7,000,000 to $9,000,000 (inclusive) 1.50% 2.00%
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from $5,000,000 to $6,999,999.99 (inclusive) 2.00% 2.50%
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from $2,000,000 to $4,999,999.99 (inclusive) 2.50% 3.00%
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Less Than $2,000,000 3.00% 3.00%
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