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EXHIBIT 10.1
RESTATED SIXTH AMENDMENT AND WAIVER
TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS SIXTH AMENDMENT AND WAIVER TO THE AMENDED AND RESTATED CREDIT
AGREEMENT (hereinafter referred to as the "Agreement") is being executed and
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delivered as of April 27, 2000 and restated and modified as of June 15, 2000, by
and among Einstein/Noah Bagel Corp., a Delaware corporation formerly known as
Einstein Bros. Bagels, Inc. (as debtor-in-possession, the "Borrower"),
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Einstein/Noah Bagel Partners, L.P., a Delaware limited partnership (as debtor-
in-possession, the "Partnership", each of the Borrower and the Partnership being
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hereinafter sometimes referred to individually as a "Debtor" and hereinafter
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sometimes referred to collectively as "Debtors"), Einstein/Noah Bagel Partners,
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Inc., a California corporation formerly known as Noah's New York Bagels, Inc.
(the "Corporate GP", and together with the Borrower and the Partnership,
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collectively, the "Credit Parties" and each individually a "Credit Party"), Bank
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of America, N.A. (as successor to Bank of America National Trust and Savings
Association), as the "Agent" for the Lenders (the "Agent"), General Electric
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Capital Corporation, as "Co-Agent" for the Lenders (the "Co-Agent") and the
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financial institutions from time to time party to the Credit Agreement referred
to and defined below (collectively, the "Lenders", and each individually, a
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"Lender"). Undefined capitalized terms which are used herein shall have the
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meanings ascribed to such terms in the Credit Agreement.
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders, the Agent and the Co-Agent are parties
to that certain Amended and Restated Secured Credit Agreement dated as of
November 21, 1997 (as heretofore amended and modified by that certain First
Amendment and Waiver thereto dated as of March 27, 1998, that certain Consent
thereto dated as of May 7, 1998, that certain Second Amendment thereto dated as
of October 4, 1998, that certain Third Amendment and Waiver thereto dated as of
January 29, 1999, that certain Fourth Amendment and Waiver thereto dated as of
May 15, 1999, and that certain Fifth Amendment and Waiver thereto dated as of
February 29, 2000, in each case among such parties, collectively, the "Credit
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Agreement"), pursuant to which the Lenders have agreed to provide, subject to
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the terms and conditions contained therein, certain loans and other financial
accommodations to the Borrower; and
WHEREAS, in connection with the Credit Agreement, and to provide
additional security for the Borrower's obligations thereunder, each of the
Partnership and the Corporate GP executed and delivered to the Agent, for the
benefit of the Lenders, certain guaranties, security agreements, pledge
agreements and other Loan Documents;
WHEREAS, on April 27, 2000, each of the Debtors filed with the United
States Bankruptcy Court for the District of Arizona (the "Bankruptcy Court")
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voluntary petitions for relief under Chapter 11 of title 11 of the United States
Code, 11 U.S.C. (S)(S)101 et seq. and have continued in the possession of their
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assets pursuant to Sections 1107 and 1108 thereof;
WHEREAS, in connection with such filings, on April 28, 2000, at the
Debtors' request the Bankruptcy Court entered an interim order (the "Interim
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Order"), among other things,
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authorizing the Borrower to borrow Revolving Loans in a maximum aggregate
principal amount of $36,000,000 under the Credit Agreement subject to the terms
and conditions of the Interim Order, this Agreement, the Loan Documents and the
"Final Order" (as defined below);
NOW, THEREFORE, in consideration of the foregoing premises, the terms and
conditions stated herein and other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the Credit Parties, the Lenders,
the Agent and the Co-Agent, such parties hereby agree as follows:
1. Amendment No. 6 to Credit Agreement. Subject to the satisfaction
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of each of the conditions set forth in Paragraph 4 of this Agreement, and
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effective as of the date the Interim Order is entered by the Bankruptcy Court
(the "Entry Date"), the Credit Agreement is hereby amended as follows (except as
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otherwise specified, section references used herein refer to those of the Credit
Agreement):
(a) Article I is amended to add the following definitions to such section
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in their respective alphabetical locations:
"`Bankruptcy Code' means title 11 of the United States Code, 11
---------------
U.S.C. (S)(S)101 et seq., and each successor statute thereto."
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"`Bankruptcy Court' means the United States Bankruptcy Court for
----------------
the District of Arizona or such other court having original jurisdiction
over the Case."
"`Borrower' means Einstein/Noah Bagel Corp., as debtor and as
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debtor-in-possession, and all successors and assigns thereof, including,
without limitation, any trustee in bankruptcy with respect thereto."
"`Budget' means, a projected budget of the Borrower's and its
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Subsidiaries' cash receipts, cash expenditures and Revolving Loans balances
for the Borrower's thirteen (13) Retail Periods ending during its 2000
fiscal year, a copy of which is attached hereto as Exhibit O and made a
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part hereof."
"`Capital Expenditures' means, for any period, the aggregate
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amount of all expenditures of the Borrower and its Subsidiaries for fixed
or capital assets made or incurred during such period (whether or not paid
in cash and including that portion of Capital Leases which is capitalized
on the consolidated balance sheet of the Borrower and its Subsidiaries)
which, in accordance with GAAP, would be classified as capital
expenditures.
"`Carveout' shall have the meaning ascribed to such term in the
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Interim Order or the Final Order, whichever is in effect as of the date of
any determination thereof."
"`Case' means, collectively, the bankruptcy cases captioned
----
"Einstein/Noah Bagel Corp., a Delaware corporation, et al.", and related
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case with respect to the Partnership, bearing case numbers 00-04447-ECF-CGC
and 00-04448-
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ECF-CGC and arising upon the filing by the Borrower of petitions with the
Bankruptcy Court on April 27, 2000."
"`Change of Management' means the chief executive officer of the
--------------------
Borrower or the president of the Corporate GP shall, for any reason, no
longer serve in such office or no longer carry out the functions of such
office, or the Corporate GP shall no longer be the sole general partner of
the Partnership."
"`Corporate GP' means Einstein/Noah Bagel Partners, Inc., a
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California corporation, and all successors and assigns thereof."
"`Credit Parties' means, collectively, the Borrower, the
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Partnership and the Corporate GP."
"`EBITDA' means, for any period, calculated on a consolidated
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basis in accordance with GAAP, the Borrower's and its Subsidiaries' (1)
gross revenue net of customer coupons and discounts, minus (2) cost of
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stores, minus (3) the sum of field operating overhead and support center
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overhead (exclusive of non-recurring charges and non-cash charges of not
more than $15,000,000 in the aggregate incurred at any time after the
Petition Date), plus (4) depreciation and amortization."
----
"`Entry Date' means the date on which the Interim Order was
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entered by the Bankruptcy Court."
"`Exit Financing Commitment' means a written commitment, in form
-------------------------
and substance satisfactory to the Agent and the Required DIP Lenders, by a
third-party lender or financial institution to provide financing to the
Borrower upon and after the confirmation of a plan of reorganization of the
Borrower by the Bankruptcy Court pursuant to the Case, which financing
shall be in an amount equal to or greater than $57,750,000."
"`Fee Letter' means that certain Fee Letter Agreement among the
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Borrower and the Agent as of the Petition Date."
"`Final Order' means the final order of the Bankruptcy Court
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approving the Loans made and to be made to the Borrower by the Lenders on
and after the Entry Date in accordance with this Agreement (which order
shall be substantially in the form of the Interim Order), as the same may
be modified or supplemented from time to time with the express written
joinder or consent of the Lenders and the Agent."
"`Interim Order' means the interim order of the Bankruptcy Court
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entered on April 28, 2000 with respect to the Loans made and to be made to
the Borrower by the Lenders in accordance with this Agreement (a copy of
which is attached hereto as Exhibit N), as the same may be modified or
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supplemented from time to time with the express written joinder or consent
of the Lenders and the Agent."
"`Obligations' means all present and future loans, advances,
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liabilities, obligations, covenants, duties, and debts owing by the
Borrower to the Agent or any
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Lender, arising under or pursuant to this Agreement, the Original Credit
Agreement, the Guaranty executed and delivered by Baltimore Bagel Co.,
formerly a Delaware corporation and wholly-owned Subsidiary of the Borrower
which previously merged with and into the Borrower, and the Guaranty
executed and delivered by Brackman Brothers, Inc., formerly a Utah
corporation and wholly-owned Subsidiary of the Borrower which previously
merged with and into the Borrower, in each case whether or not evidenced by
any note, or other instrument or document, whether arising from an
extension of credit, opening of a letter of credit, acceptance, loan,
guaranty, indemnification or otherwise, whether direct or indirect
(including, without limitation, those acquired by assignment from others,
and any participation by the Agent and/or any Lender in the Borrower's
debts owing to others), absolute or contingent, due or to become due,
primary or secondary, as principal or guarantor, and including, without
limitation, all principal, interest (including, without limitation,
interest arising after the commencement of any proceeding commenced under
the Bankruptcy Code with respect to the Borrower, regardless of whether
such interest would be an allowed claim in such proceeding), charges,
expenses, fees, attorneys' fees, filing fees and any other sums chargeable
to the Borrower hereunder, under another Loan Document, or under any other
agreement or instrument to which the Agent or any Lender is a party,
including, without limitation, all "Cash Management Obligations" (as
defined in that certain General Modification of Collateral Documents dated
as of January 31, 2000 among the Borrower, the Corporate GP and the
Partnership) and all other cash management or deposit or disbursement
account agreement or under or with respect to any interest rate, foreign
exchange or commodity hedge arrangement. "Obligations" includes, without
limitation, all LC Obligations.
"`Partnership' means Einstein/Noah Bagel Partners, L.P., a
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Delaware limited partnership, as debtor and as debtor-in-possession, and
all successors and assigns thereof, including, without limitation, any
trustee in bankruptcy with respect thereto."
"`Petitions" means the voluntary filings by the Debtors with the
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Bankruptcy Court for relief under Chapter 11 of the Bankruptcy Code
pursuant to which the Case was commenced."
"`Petition Date' means April 27, 2000."
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"`Post-Petition Collateral' means all Collateral acquired,
------------------------
created or generated by either Debtor after the Petition Date which does
not constitute Pre-Petition Collateral."
"`Post-Petition Obligations' means those Obligations of the
-------------------------
Debtors, and those guaranty obligations of the Partnership with respect to
the Obligations under the Loan Documents, in each case which have arisen or
arise on or after the Petition Date; provided, however, that all LC
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Obligations existing as of the Petition Date shall thereafter constitute
Post-Petition Obligations notwithstanding anything in this Agreement or any
other Loan Document to the contrary."
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"`Pre-Petition Collateral' means all Collateral of the Debtors
-----------------------
which exists as of the Petition Date, all property on which replacement
Liens are granted to the Agent and the Lenders pursuant to the Interim
Order or Final Order, and all accessions, substitutions, replacements,
products and proceeds thereof."
"`Pre-Petition Obligations' means those Obligations of the
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Borrower, and those guaranty obligations of the Partnership with respect to
the Obligations under the Loan Documents, in each case which arose prior to
the Petition Date."
"`Pre-Petition Permitted Liens' means those Permitted Liens
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(other than those in favor of the Agent) which existed pursuant to
applicable law and were properly perfected, valid, non-avoidable and
enforceable as of the Petition Date."
"`Pre-Petition Priority Permitted Liens' means those Pre-Petition
-------------------------------------
Permitted Liens which as a matter of applicable nonbankruptcy law have
priority over the Agent's Liens as of the Petition Date and which are
allowed in the Case."
"`WPSA' means, for any Retail Period, calculated on a
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consolidated basis in accordance with GAAP, the Borrower's and its
Subsidiaries' average weekly per store gross revenue net of customer
coupons and discounts."
(b) Article I is further amended to delete in their entirety each of
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the following definitions and to replace such definitions, respectively, with
the following definitions:
"`Collateral' means all property which is subject to, or is to be
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subject to, a Lien granted, created or established under a Collateral
Document, Loan Document, the Interim Order or the Final Order."
"`Collateral Documents' means each security agreement, pledge
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agreement, mortgage, collateral assignment, and other document establishing
or purporting to establish a Lien in favor of the Agent as security for any
of the Obligations and executed and delivered by any Credit Party in
connection with this Agreement or any amendment hereof.
"`Lending Office' means, with respect to any lender, any office
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designated (whether or not notice is given to the Borrower) by such Lender
in its sole discretion as a Lending Office for purpose hereof."
"`Percentage' means, as to any Lender, the percentage set forth
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opposite such Lender's name on Schedule 1.1(B)."
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"`Termination Date' means the earliest of (i) December 31, 2000,
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(ii) the date on which a plan of reorganization in the Case becomes
effective, and (iii) the stated date on which the Exit Financing Commitment
expires by its terms (and not by reason of any default or failure of
condition by the Borrower), as such date under the Exit Financing
Commitment may be extended from time to time."
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"`Total Revolving Loan Commitment' means, subject to the
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modification thereof pursuant to Sections 2.7 and 2.8, (i) at any time
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following the entry of the Interim Order and prior to the entry of the
Final Order, $5,000,000 and (ii) at any time following the entry of the
Final Order, $36,000,000."
(c) Article I is further amended to add to the definition of "Loan
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Documents", immediately following the reference in the third line of such
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definition to the phrase "the Affirmation," the following phrase and to delete
the phrase "and Amendment" therefrom:
"the Interim Order, the Final Order, each amendment and other modification
agreement with respect to any of the foregoing"
(d) Article I is further amended to add the following provision to
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the end of the definition of "Material Adverse Change":
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", other than the filing of the Petitions and commencement of the Case."
(e) Article I is further amended to delete, in their entirety, the
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definitions of "Affected Lender", "Annualized Store EBITDAL," "Annualized System
--------------- ------------------------ -----------------
EBITDAL," "Applicable Margin," "Cash Flow Ratio," "Combined Overhead,"
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"Continuation/Conversion Notice," "Eurocurrency Reserve Percentage," "Eurodollar
------------------------------- ------------------------------- ----------
Loan," "Eurodollar Rate," "Eurodollar Rate (Reserve Adjusted)," "Floating Rate
---- --------------- ---------------------------------- -------------
Loan," "Floating Rate Borrowing," "Interest Period," "Pro Forma Fixed Charges",
---- ----------------------- --------------- -----------------------
"Senior Indebtedness," "Significant Subsidiary," "Store EBITDAL," "System
------------------- ---------------------- ------------- ------
EBITDAL" and "Type."
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(f) Article I is further amended to delete, in its entirety, the last
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sentence of the definition of "Borrowing."
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(g) Section 2.1(2)(b) is deleted in its entirety and replaced with
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the following provision:
"(b) The Term Loan shall be due and payable in full on the
Petition Date and shall be payable in accordance with the Lenders' rights
as pre-petition secured creditors with respect thereto in accordance with
the provisions of the Bankruptcy Code."
(h) Section 2.1(3) is deleted in its entirety and replaced with the
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following:
"[intentionally omitted]."
(i) The Section 2.2(1) is deleted in its entirety and replaced with
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the following provision:
"SECTION 2.2. Borrowing Procedure.
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(1) Any Authorized Officer of the Borrower may request
a Revolving Loan on behalf of the Borrower on any Business Day after the
Effective Date and prior to the Termination Date and the Term Loan on
behalf of the Borrower on the Restatement Effective Date in United States
dollars by giving the Agent telephonic, telex
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or facsimile notice (which notice shall be irrevocable once given and shall
be promptly confirmed in writing if given telephonically) in the form of
Exhibit B ("Borrowing Request") or such other form as shall be acceptable
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to the Agent. Each Borrowing Request must be received by the Agent prior to
10:00 A.M., Chicago time, on the proposed date of such Borrowing (which
must be a Business Day) and shall request the principal amount of such
Borrowing and specify the proposed date of Borrowing (which must be a
Business Day). Promptly upon receipt of such Borrowing Request, the Agent
shall advise each Lender thereof. On the date of a proposed Borrowing, each
Lender shall provide the Agent at the Head Office with immediately
available funds in an amount equal to such Lender's Percentage of the
principal amount of the proposed Borrowing specified in the Borrowing
Request. Each Borrowing shall be in a principal amount of $1,000 or an
integral multiple thereof (or such lesser amount equal to the unadvanced
portion of the Total Revolving Loan Commitment Amount available under
Section 2.1(1)). All Borrowings shall be pro rata among the Lenders in
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accordance with their respective Commitments. Not later than 1:00 P.M.,
Chicago time, on the proposed date of Borrowing specified in the Borrowing
Request, subject to the satisfaction of the applicable conditions precedent
set forth in Article III hereof, the Agent shall make the proceeds of each
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Revolving Loan available to the Borrower by causing an amount of
immediately available funds equal to the principal amount of such Revolving
Loan to be credited to the account of the Borrower at Bank of America
unless otherwise required pursuant to the terms of this Agreement."
(j) Section 2.2(2) is deleted in its entirety and replaced with the
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following:
"[intentionally omitted]."
(k) Section 2.3 is amended to delete the reference "by 9:00 A.M. (or
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12:00 Noon with respect to Floating Rate Loans)" contained in the first sentence
thereof and to replace such reference with the reference "by 12:00 Noon,".
(l) Section 2.4 is deleted in its entirety and replaced with the
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following provision:
"SECTION 2.4. Interest.
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(1) Interest Rate. With respect to each Loan, the Borrower
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hereby promises to pay interest on the unpaid principal amount thereof for
the period commencing on the date of such Loan until such Loan is paid in
full, at a rate per annum equal to the Floating Rate plus one percent
----
(1.00%).
(2) Interest Payment Dates. Accrued interest on each Loan
----------------------
shall be due and payable monthly in arrears on the first Business Day of
each calendar month and at maturity. After maturity, accrued interest on
all Loans shall be payable on demand.
(3) Default Interest. Any principal payments on the Loans
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not paid when due, whether at stated maturity, by notice of repayment, by
acceleration or otherwise, shall, to the extent permitted by applicable
law, thereafter bear interest (compounded monthly and payable upon demand)
at a rate which is two percent (2.00%) per annum in excess of the rate of
interest otherwise payable under this Agreement in respect of such
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principal amount until such unpaid amount has been paid in full (whether
before or after judgment)."
(m) Section 2.5(1) is amended to delete the phrase "payable quarterly
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in arrears on the first Business Day of March, June, September and December of
each year" and to replace such phrase with the phrase "payable monthly in
arrears on the first Business Day of each calendar month".
(n) Section 2.5(2) is deleted in its entirety and replaced with the
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following provision:
"(2) Agent's Fee. The Borrower agrees to pay to the Agent
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the fees provided for in the Fee Letter."
(o) Section 2.5 is further amended to add the following subsection to
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the end of such section:
"(3) DIP Facility Fee. The Borrower agrees to pay the
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Agent, for the ratable benefit of the Lenders, a non-refundable facility
fee equal to $250,000, payable on the Entry Date."
(p) Section 2.7(1) is amended to be deleted in its entirety and
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replaced with the following provision:
"(1) The Borrower may voluntarily prepay at any time the Loans in whole or
in part without premium or penalty; provided, that (a) each partial
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prepayment shall be in a principal amount of not less than $25,000, (b) the
Borrower has given notice to the Agent of such prepayment no later than
10:00 A.M., Chicago time, on the day of such prepayment and (c) such amount
prepaid shall be applied, first, to the payment of any fees and expenses
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owing to the Agent, second, to the payment of accrued interest owing with
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respect to the Loans, ratably among such Loans (consisting of both Pre-
Petition Obligations and Post-Petition Obligations), third, to the payment
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of the outstanding principal balance of those Revolving Loans constituting
Pre-Petition Obligations, fourth, to the payment of the outstanding
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principal balance of those Revolving Loans constituting Post-Petition
Obligations, and fifth, subject to the further order of the Bankruptcy
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Court, to the payment of the outstanding principal balance of the Term
Loan. Unless otherwise agreed to in writing by the Required Lenders, the
Total Revolving Loan Commitment shall be permanently reduced concurrently
with, and to the extent of, the amount of voluntary prepayments applied
pursuant to this Section 2.7(1) to the payment of the outstanding principal
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balance of the Revolving Loans (whether Pre-Petition Obligations or Post-
Petition Obligations)."
(q) Section 2.8(1) is amended to delete the phrase "or such lesser
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amount as required by Section 5.13" at the end of such section.
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(r) Section 2.8(2) and the last sentence of Section 2.8 are deleted
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in their entirety and replaced with the following provisions:
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"(2) If the Borrower or any Subsidiary shall at any time or from
time to time (a) sell, lease, assign, transfer, or otherwise dispose of any
of its now owned or hereafter acquired assets, other than a sale or other
disposition of inventory in the ordinary course of business (and, in any
event, including any rejection or assumption and assignment of leases, any
refund of security deposits), (b) receive the proceeds of any federal,
state or local income tax refund, or any prepayment of indebtedness for
borrowed money owed to it or other indebtedness owed to it by any of its
Subsidiaries or Franchisees or (c) receive any insurance or condemnation
proceeds with respect to any Collateral, then the (i) the Borrower shall
----
promptly notify the Agent of the occurrence thereof and the amount of net
proceeds received or anticipated to be received (net of reasonable closing
costs and expenses in the case of a disposition of assets) and (ii)
promptly after the Borrower's or any Subsidiary's receipt of the proceeds
of any of the foregoing, the Borrower shall prepay the Obligations in an
aggregate amount equal to such proceeds (or net proceeds in the case of a
disposition of assets). Notwithstanding the foregoing, in the event of the
receipt of insurance or condemnation proceeds pursuant to clause (c) above,
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if the Borrower shall (x) promptly notify the Agent, upon the occurrence of
the casualty or condemnation event giving rise to such proceeds, that it
intends to rebuild, repair or replace the property affected by such
casualty or condemnation with substantially comparable replacement
property, (y) deliver to the Agent within sixty (60) days of the occurrence
of such casualty or condemnation, a budget reasonably acceptable to the
Agent estimating all costs and expenses necessary to complete such
rebuilding, repair or replacement and (z) the Borrower or any Subsidiary
shall in fact complete such rebuilding, repair or replacement within one
hundred and fifty (150) days of the occurrence of such casualty or
condemnation, then, no prepayment shall be required under this section with
----
respect to the insurance proceeds received by the Borrower or any
Subsidiary to the extent of the amount of costs and expenses used by the
Borrower for such rebuilding, repair or replacement and not exceeding the
amount of such costs and expenses set forth in the budget approved thereof
pursuant to clause (y) of this section. All amounts prepaid pursuant to
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this Section 2.8(2) shall be applied, first, to the payment of the
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outstanding principal balance of the Term Loan, second, to the payment of
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any fees and expenses owing to the Agent, third, to the payment of accrued
-----
interest owing with respect to the Loans, ratably among such Loans
(consisting of both Pre-Petition Obligations and Post-Petition
Obligations), fourth, to the payment of the outstanding principal balance
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of those Revolving Loans constituting Pre-Petition Obligations, and fifth,
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to the payment of the outstanding principal balance of those Revolving
Loans constituting Post-Petition Obligations. Unless otherwise agreed to in
writing by the Required Lenders, the Total Revolving Loan Commitment shall
be permanently reduced concurrently with, and to the extent of, the amount
of mandatory prepayments applied pursuant to this Section 2.8(2) to the
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payment of the outstanding principal balance of the Revolving Loans
(whether Pre-Petition Obligations or Post-Petition Obligations).
"(3) In addition to the foregoing, on each Business Day, the
Borrower shall repay the outstanding principal balance of the Revolving
Loans in an amount equal to the gross amount of all cash received by the
Borrower and their Subsidiaries on or before such Business Day which is
available for withdrawal by the Borrower and their Subsidiaries from their
respective deposit accounts as of such Business Day. All amounts
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prepaid pursuant to this Section 2.8(3) shall be applied, first, to any
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fees or expenses which are past due and payable to the Agent, second, to
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the payment of any past due interest owing with respect to the Obligations,
ratably as between any such interest owing with respect to Pre-Petition
Obligations and Post-Petition Obligations, third, to the payment of the
-----
outstanding principal balance of those Revolving Loans constituting Pre-
Petition Obligations, and fourth, to the outstanding principal balance of
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those Revolving Loans constituting Post-Petition Obligations. The Total
Revolving Loan Commitment shall not be reduced as a result of any
prepayments of the Revolving Loans required pursuant to this Section
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2.8(3)."
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(s) The last two sentences of Section 2.9 are deleted in their
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entirety and replaced with the following provisions:
"All payments under Sections 2.12 and 2.13 shall be made by the Borrower
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directly to the Lender or Lenders entitled thereto. All interest and fees
payable hereunder shall be calculated on the basis of a year of 365 (or 366
as applicable) days for the actual number of days elapsed."
(t) Section 2.10 is amended to add the following parenthetical
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to such section at the end of the first sentence of such section:
"(including, without limitation, (i) the payment of fees and expenses to
professionals under Sections 330 and 331 of the Bankruptcy Code to the
extent provided in the Interim Order or the Final Order, whichever is
applicable, and (ii) the payment of administrative expenses of the kind
specified in Section 503(b) of the Bankruptcy Code incurred in the ordinary
course of business of the Borrower to the extent provided in the Interim
Order or the Final Order, whichever is applicable, and, in either case
under clauses (i) or (ii) of this parenthetical, to the extent not
----------- ----
otherwise prohibited by this Agreement)."
(u) Section 2.12 is deleted in its entirety and replaced with
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the following provision:
"SECTION 2.12. Increased Costs. If after the date
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hereof, the adoption of any applicable law, rule or regulation, or any
change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by
any Lender (or any Lending Office of such Lender) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency,
(a) shall subject any Lender (or any Lending Office of
such Lender) to any tax, duty or other charge with respect to its LC
Obligations or its obligation to issue Letters of Credit, or shall change
the basis of taxation of payments to any Lender with respect to its LC
Obligations (except for changes in the rate of tax on the overall gross or
net income of such Lender or its Lending Office); or
(b) shall impose on any Lender (or its Lending Office)
any other condition affecting its LC Obligations;
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and the result of any of the foregoing is to increase the cost to such
Lender (or any Lending Office of such Lender) of issuing or participating
in any Letter of Credit or making any LC Commitment or commitment to
participate in any Letter of Credit, or to reduce the amount of any sum
received or receivable by such Lender (or any Lending Office of such
Lender) under this Agreement or with respect to Loans made in connection
therewith, then upon demand by such Lender (which demand shall be made
within 45 days after such Lender has actual knowledge of such additional
cost or reduced sum receivable and shall be accompanied by a statement
setting forth the basis of such demand), the Borrower shall pay directly to
such Lender such additional amount or amounts as will reimburse such Lender
for such increased cost or such reduction."
(v) Sections 2.14, through 2.20 shall be deleted in their entirety
------------- ----
and replaced with the following provisions:
"SECTION 2.14. [intentionally omitted].
SECTION 2.15. [intentionally omitted].
SECTION 2.16. [intentionally omitted].
SECTION 2.17. [intentionally omitted].
SECTION 2.18. [intentionally omitted].
SECTION 2.19. Mitigation of Circumstances. Each Lender shall
---------------------------
promptly notify the Borrower and the Agent of any event of which it has
knowledge which will result in, and will promptly thereafter use all
reasonable commercial efforts available to it (and not, in such Lender's
good faith judgment, otherwise disadvantageous to such Lender) to mitigate
or avoid, (i) any obligation by the Borrower to pay any amount pursuant to
Section 2.12 or 2.13 (and, if any Lender has given notice of any such event
------------ ----
and thereafter such event ceases to exist, such Lender shall promptly so
notify the Borrower and the Agent). Without limiting the foregoing, each
Lender will designate a different Lending Office if such designation will
avoid (or reduce the cost to the Borrower of) any event described in the
preceding sentence and such designation will not, in such Lender's
reasonable judgment, be otherwise materially disadvantageous to such
Lender.
SECTION 2.20. Conclusiveness of Statements; Survival of Provisions.
----------------------------------------------------
Determinations and statements of any Lender pursuant to Sections 2.12 or
-------------
2.13 shall be conclusive absent demonstrable error. The provisions of
----
Sections 2.12 and 2.13 shall survive termination of this Agreement."
------------- ----
(w) Article II is further amended to add the following provision to
----------
the end of such article:
"SECTION 2.21. Weekly Settlements. Notwithstanding the
------------------
contrary provisions of Sections 2.2, 2.3 and 2.9 (which provisions shall be
------------ --- ---
superseded by the provisions of this section to the extent of any
inconsistencies with such sections):
-11-
<PAGE>
(1) The outstanding principal balance of the Revolving Loans
may fluctuate from day to day as a result of the Agent's disbursement of
Revolving Loans on behalf of the Lenders to the Borrower without the Agent
obtaining funding for such Loans from the Lender pursuant to Section 2.2 on
-----------
the date of the Agent's making of such Loans; provided, however, the Agent,
-------- -------
in its sole discretion, may choose from time to time to require compliance
by the Lenders and the Borrower with the procedures set forth in Sections
--------
2.2 in lieu of the procedures set forth in this section.
---
(2) If on any "Calculation Date" (as defined below) the
amount of any Lender's "Net Investment" (as defined below) with respect to
any Revolving Loan is less than such Lender's Percentage of the outstanding
principal balance of such Revolving Loan, then, pursuant to the procedures
set forth below in this section, such Lender shall pay the Agent a sum
sufficient to increase such Lender's Net Investment in such Loan to such
Lender's Percentage of such outstanding principal balance. If on any
Calculation Date the amount of any Lender's Net Investment with respect to
any Revolving Loan is greater than such Lender's Percentage of the
outstanding principal balance of such Revolving Loan, then, pursuant to the
procedures set forth below, the Agent shall pay such Lender a sum
sufficient to reduce such Lender's Net Investment in such Loan to such
Lender's Percentage of such outstanding principal balance.
(3) The Agent shall calculate the outstanding dollar amount
of each Lender's total Net Investment as of the close of business (a) on
the second to last Business Day of each calendar week, (b) on the last
Business Day of each calendar month, (c) on the date of the occurrence of
an acceleration of the Loans, or a termination of the Commitments, and (d)
on any other date on which the Agent, in its discretion, desires to effect
a settlement among the Lenders hereunder (each such date being referred to
herein as a "Calculation Date").
----------------
(4) For purposes of this Agreement, "Net Investment" shall
--------------
mean, as to any Lender with respect to any particular Revolving Loan on a
Calculation Date, the cumulative principal amount advanced by such Lender
to the Agent for the benefit of the Borrower with respect to such Revolving
Loan prior to such Calculation Date minus the cumulative principal amount
-----
paid by the Agent to such Lender on account of such Revolving Loan prior to
such Calculation Date.
(5) Payments received by the Agent as of any Calculation
Date, but not distributed since the immediately preceding Calculation Date
shall be applied, and the Net Investment of each Lender shall be adjusted,
in accordance with the following procedures. Any amount payable by the
Agent or any Lender under this paragraph (5) shall be due on the first
-------------
Business Day following the Calculation Date as of which such amount was
determined, except in the case of a Calculation Date occurring on the last
Business Day of a calendar month in which case such amount shall be due and
payable on the same such Business Day (each such date being referred to
herein as a "Settlement Date"):
---------------
-12-
<PAGE>
(a) If as of any Calculation Date the increase, if any, in any
Lender's aggregate amount of Net Investments in Revolving Loans which
is required (after giving effect to any payments allocable to such
Lender's Net Investments received by the Agent but not distributed
since the previous Calculation Date) to make such aggregate amount of
Net Investments equal to such Lender's Percentage of the outstanding
principal balance of all Revolving Loans is less than such Lender's
Percentage of any such payments received by the Agent but not
distributed since the immediately preceding Calculation Date, the
Agent shall apply such Lender's Percentage of such payments to the
increase in the amount of such Lender's aggregate Net Investments and
shall pay any excess to such Lender (which excess payment shall reduce
the amount of such Lender's aggregate Net Investments).
(b) If as of any Calculation Date the increase, if any, in any
Lender's aggregate amount of Net Investments in Revolving Loans which
is required (after giving effect to any payments allocable to such
Lender's Net Investments received by the Agent but not distributed
since the previous Calculation Date) to make such aggregate amount of
Net Investments equal to such Lender's Percentage of the outstanding
principal balance of all Revolving Loans is greater than such Lender's
Percentage of any such payments received by the Agent but not
distributed since the immediately preceding Calculation Date, the
Agent shall apply such Lender's Percentage of such payments to the
increase in such Lender's aggregate amount of Net Investments and such
Lender shall pay to the Agent the amount by which such increase in its
Net Investments exceeds such Lender's Percentage of such payments
(which payment amount shall increase the amount of such Lender's
aggregate Net Investments).
(c) If as of any Calculation Date the increase, if any, in the
amount of any Lender's aggregate of Net Investments in Revolving Loans
which is required (after giving effect to any payments allocable to
such Lender's Net Investments received by the Agent but not
distributed since the previous Calculation Date) to make such Net
Investments equal to such Lender's Percentage of the outstanding
principal balance of all Revolving Loans is exactly equal to such
Lender's Percentage of any such payments received by the Agent but not
distributed since the immediately preceding Calculation Date, the
Agent shall apply such Lender's Percentage of such payments to the
increase in the amount of such Lender's aggregate Net Investments.
(d) If as of any Calculation Date no change is required with
respect to the amount of any Lender's aggregate of Net Investments in
Revolving Loans, the Agent shall pay any payments allocable to such
Lender's Net Investments received by the Agent but not distributed
since the immediately preceding Calculation Date to such Lender (which
payment shall reduce the amount of such Lender's aggregate Net
Investments).
(6) If any payments received by the Agent and distributed or credited
to any Lender as provided herein are later returned or repaid by the Agent
to the Borrower, its
-13-
<PAGE>
representative or successor in interest, whether by court order, settlement
or otherwise, each Lender's Percentage of all such payments returned or
repaid representing principal of the Revolving Loans, together with any
interest thereon received by such Lender, and its allocable share of any
other payments, so returned or repaid shall be returned to the Agent.
(7) Distributions to any Lender with respect to its interest in any
Revolving Loan shall be made and payable only out of payments actually
received by the Agent in good funds.
(8) Subject to a Lender's compliance with the terms hereof, or after
any non-compliance shall be cured, the Agent agrees to pay such Lender, out
of any payments collected by the Agent which are allocable to interest, as
so collected, such Lender's share thereof at the applicable rate of
interest per annum paid by the Borrower under the Credit Agreement upon
such Lender's daily Net Investment in each Revolving Loan. Payment to each
Lender of amounts due pursuant to this paragraph (8) shall be due from the
-------------
Agent on the first Settlement Date immediately following each date on which
interest is paid to the Agent under the terms of the Credit Agreement. If
any payment of interest actually received by the Agent constitutes less
than the amount required to be paid by the Borrower under the Credit
Agreement, then the Agent shall be required to pay to each Lender such
Lender's Percentage of the aggregate amount of such payment actually
received by the Agent."
(x) Section 2.1A is amended to delete the figure "$5,000,000" which
------------
appears in such section and to replace such figure with the figure "$1,500,000."
(y) Section 2.9A is amended to delete the words "Floating Rate" which
------------
appears immediately prior to the words "Revolving Loan" in second sentence of
such section, to delete the figure "$100,000" which appears in such section and
to replace such figure with the figure "$1,000."
(z) Section 2.14A(1) is deleted in its entirety and replaced with the
----------------
following provision:
"(1) The Borrower agrees to pay to the Agent for the account of each
Lender a fee for each (a) Non-Financial Letter of Credit (the `Non-
Financial LC Commitment Fee'), from the date of issuance thereof to the
earlier to occur of the expiration or termination thereof or the date of
final and complete payment by the Agent thereunder, at a rate per annum
equal to one and five-eighths of one percent (1.625%) per annum with
respect to the aggregate outstanding face amount of each such Non-Financial
Letter of Credit, and (b) Financial Letter of Credit (the `Financial LC
Commitment Fee'), from the date of issuance thereof to the earlier to occur
of the expiration or termination thereof or the date of final and complete
payment by the Agent thereunder, at a rate per annum equal to three and
one-quarter of one percent (3.25%) per annum with respect to the aggregate
outstanding face amount of each such Financial Letter of Credit, all such
fees under this section to be paid in arrears on the first Business Day of
each month (or at such
-14-
<PAGE>
other times as the Agent shall request, for any period prior to such date
or time for which such LC Commitment Fees shall not have been theretofore
paid).
(aa) Section 3.2 is amended to add the word "and" to the end of
-----------
clause 1(a) of such section, to replace the semicolon and the word "and" at the
-----------
end of clause 1(b) thereof with a period, to delete clause 1(c) thereof in its
----------- -----------
entirety and to add the following provisions to the end of such section
immediately following subparagraph (2) thereof:
----------------
"(3) Bankruptcy Orders. The Interim Order or the Final
-----------------
Order, as the case may be, shall have been entered by the Bankruptcy Court,
and the Agent and Lenders shall have received a certified copy of the same
and such order shall be in full force and effect and shall not have been
reversed, stayed, modified, vacated, amended or appealed."
(4) Final Order. With respect to any requested Loan to be
-----------
made or issued on or after the thirtieth (30th) day following the Entry
Date, the Final Order, in form and substance reasonably satisfactory to the
Agent and the Required Lenders, shall be in full force and effect and shall
not have been reversed, stayed, modified, vacated, amended or appealed."
(bb) Each of Sections 4.2, 4.3 and 4.8 is amended to add the
------------ --- ---
following clause to the beginning of the first sentence of such section:
"Subject to the entry of the Interim Order and the Final Order,"
(cc) Section 4.4 is amended to delete in its entirety the fourth
-----------
sentence of such section and to replace such sentence with the following
sentence:
"Since December 26, 1999, there has been no Material Adverse Change."
(dd) Section 4.9 is amended to add the following provision to the end
-----------
such section:
"Notwithstanding anything to the contrary contained herein, (i) the Pre-
Petition Obligations are secured by the Pre-Petition Collateral and the
replacement Liens in favor of the Agent and the Lenders provided for in the
Interim Order and Final Order, (ii) the Post-Petition Obligations are
secured by the Post-Petition Collateral and the Pre-Petition Collateral,
(iii) except with respect to the Pre-Petition Priority Permitted Liens, the
Liens securing the Post-Petition Obligations and the Carveout, the Liens
securing the Pre-Petition Obligations have priority over all other Liens
against the Collateral and (iv) the Liens securing the Post-Petition
Obligations are first priority Liens under Section 364(d)(1) of the
Bankruptcy Code, subject only to the Carveout and the Pre-Petition Priority
Permitted Liens, and the Post-Petition Obligations constitute allowed
administrative superpriority expenses in the Case having priority, and the
Agent's Lien securing Post-Petition Obligations have priority, in
accordance with the provisions of Section 364(c)(1) of the Bankruptcy Code
over all administrative expenses (other than the Carveout), secured claims
and unsecured claims against the Borrower now existing or hereafter
arising, of any kind or nature whatsoever, including, without limitation,
all such
-15-
<PAGE>
administrative expenses of the kind specified in or awarded under Sections
105, 326, 328, 330, 331, 503(b), 506(c), 507(a), 507(b) or 726 of the
Bankruptcy Code."
(ee) Article IV is further amended to add the following provisions to
----------
the end of such article:
"SECTION 4.23. The Budget. The Budget, attached hereto as
----------
Exhibit O, reasonably presents, in all material respects, on a pro forma
--------- --- -----
basis projected financial operations of the Borrower and their Subsidiaries
for the Retail Periods from the Entry Date until December 31, 2000.
SECTION 4.24. Pre-Petition Obligations; Defenses. As of
----------------------------------
the Petition Date, the aggregate outstanding principal balance of the Pre-
Petition Obligations, all accrued and unpaid interest, fees and expenses
constituting Pre-Petition Obligations, and the aggregate face amount of all
outstanding Loans and LC Obligations constituting Pre-Petition Obligations,
are approximately as set forth in Exhibit P attached hereto, and the
---------
Borrower is truly and justly indebted (as an allowed secured claim) to the
Agent and the Lenders, and each of the Partnership and the Corporate GP are
truly and justly indebted as guarantors, with respect to the Pre-Petition
Obligations without setoff, defense or counterclaim."
(ff) Sections 5.3, 5.4, 5.6 and 5.9 are each amended to add the
------------ --- --- ---
following phrase to the beginning of such sections:
"Except as may be required or permitted by the provisions of the Bankruptcy
Code or by the Bankruptcy Court during the existence of the Case, and
except with respect to the payment of claims or performance of obligations
which are subject to the automatic stay in the Case,"
(gg) Section 5.8(4) is deleted in its entirety and replaced with the
--------------
following provision:
"(4) Certificate of No Default. Together with the financial
-------------------------
statements furnished by the Borrower pursuant to preceding Clauses (1), (2)
----------- ---
and (3), a duly completed compliance certificate in the form of Exhibit M,
--- ---------
in each case signed by the Chief Financial Officer or any Vice President of
the Borrower (in his or her capacity as such, and without personal
liability therefor);"
(hh) Section 5.8 is further amended to delete the word "and" at the
-----------
end of subparagraph (13) of such section and to add the following provisions to
-----------------
such section immediately following subparagraph (14) of such section:
-----------------
"(15) On a date no later than the fifteenth (15/th/) day of each
Retail Period occurring on or after the Petition Date, in form and
substance reasonably satisfactory to the Agent and the Required Lenders, a
variance report reflecting on a line-item basis the actual cash receipts
and disbursements, and actual Revolving Loan usage, for the preceding
Retail Period and the percentage variance of such items on a year to date
-16-
<PAGE>
cumulative basis through the last day of such Retail Period from those
reflected in the Budget;
(16) On a date no later than the fifteenth (15/th/) day of each
Retail Period occurring on or after the Petition Date, in form and
substance reasonably satisfactory to the Agent and the Required Lenders, an
average weekly net revenue report calculating WPSA for the preceding Retail
Period; and on or before Friday of each calendar week, in form and
substance reasonably satisfactory to the Agent and the Required Lenders, an
average weekly net revenue report calculating WPSA for the preceding
calendar week;
(17) Concurrently with any Credit Party's filing thereof, copies
of all written pleadings, motions, applications, financial information,
petitions, schedules, reports and other papers and documents filed by or in
behalf of any Credit Party in the Case (delivery of which shall be deemed
to have been accomplished if served on or otherwise delivered to the
Agent's, Co-Agent's and/or Lender's counsel, as applicable); and
(18) Concurrently with any Credit Party's delivery thereof,
copies of all written reports delivered by or in behalf of any Credit Party
to any official or unofficial creditors' committee in the Case.
The Borrower hereby confirms and agrees that it is solely responsible for
the preparation, production and implementation of the Budget and the
information contained therein and that neither the Agent, the Lenders nor
any of their respective Affiliates, employees, agents, attorneys or other
third parties (a) had any involvement in or responsibility for the
preparation, production or implementation thereof or (b) shall be deemed to
have made any representation or warranty in connection therewith."
(ii) Section 5.13 is deleted in its entirety and replaced with the
------------
following provision:
"[intentionally omitted]."
(jj) Clause (b) of Section 6.8(1), and the provisions of Section
---------- -------------- -------
6.8(11), are each amended to delete in its entirety therefrom the phrase "solely
-------
in exchange for capital stock of the Borrower."
(kk) Section 6.14 is amended to delete in its entirety all of the
------------
provisions of such section following the first reference therein to
"Subordinated Debt."
(ll) Article VI is further amended to add the following provisions
----------
immediately following Section 6.17 thereof:
------------
"SECTION 6.18. Case Matters.
------------
(a) Seek, consent to or suffer to exist any modification,
stay, vacation or amendment of the Interim Order or the Final Order;
-17-
<PAGE>
(b) Suffer to exist a priority for any administrative
expense, secured claim or unsecured claim against any Credit Party
(now existing or hereafter arising of any kind or nature whatsoever,
including, without limitation, any administrative expenses of the kind
specified in Sections 105, 326, 328, 503(b), 506(c), 507(a), 507(b) or
726 of the Bankruptcy Code) which are equal or superior to the
priority of the Agent and the Lenders in respect of the Post-Petition
Obligations, except for expenses included within the Carveout and
those secured by Pre-Petition Permitted Priority Liens;
(c) Prior to the date on which the Obligations have been
paid in full in cash and the Revolving Loan Commitment has been
terminated, pay any administrative expenses except for, and provided
such expenses are included with the Budget, (i) administrative expense
claims incurred in the ordinary course of the business of the Borrower
and their Subsidiaries in accordance with the terms of the Interim
Order or the Final Order, whichever is applicable, and (ii) expenses
included within the Carveout in accordance with the terms of the
Interim Order or the Final Order, whichever is applicable;
(d) Make any payments or transfer any property on account of
claims asserted by any of the Borrower's or their Subsidiaries'
vendors for reclamation in accordance with Section 2-702 of any
applicable Uniform Commercial Code and Section 546(c) of the
Bankruptcy Code, unless otherwise ordered by the Bankruptcy Court upon
prior notice to the Agent or unless otherwise consented to by the
Agent;
(e) Return any Inventory to any vendor pursuant to Section
546(g) of the Bankruptcy Code, unless otherwise ordered by the
Bankruptcy Court in accordance with Section 546(g) of the Bankruptcy
Code upon prior notice to the Agent or unless otherwise consented to
by the Agent;
(f) Pay expenses (other than cost of goods sold), or obtain
advances of Revolving Loans, during any Retail Period which would
cause the aggregate amount of all such expenses (other than cost of
goods sold), or the aggregate net amount of all such borrowings, in
either case for the year-to-date period ending as of the date of such
incurrence or borrowing (after giving effect to such proposed
incurrence or borrowing, as the case may be), to exceed, (i) in the
case of such expenses, 110% of the aggregate amount of all such
expenses contemplated by the Budget for the year-to-date period ending
as of the last day of such Retail Period or (ii) in the case of such
borrowings, the sum of 110% of the aggregate net amount of such
borrowings contemplated by the Budget for the year-to-date-period
ending as of the last day of such Retail Period plus $3,000,000, minus
the aggregate holdback amount as of the date of determination
established pursuant to decretal paragraph 10 of the Interim Order (or
the analogous paragraph of the Final Order, as applicable); provided,
--------
however, that in no event shall the Borrower obtain Revolving Loan
------- ----
advances during any year-to-date period ending as of the last day of a
Retail Period which would cause the aggregate net amount of such
borrowings to exceed 110% of the aggregate net
-18-
<PAGE>
amount of such borrowings contemplated by the Budget for such year-to-
date period minus the aggregate holdback amount as of the date of
determination established pursuant to decretal paragraph 10 of the
Interim Order (or the analogous paragraph of the Final Order, as
applicable); or
(g) Amend or otherwise modify the Exit Financing Commitment
in any manner to impose additional conditions, covenants or other
requirements upon the Borrower or its Subsidiaries or the Lenders, or
to make any existing conditions, covenants or other requirements more
onerous to the Borrower or its Subsidiaries or the Lenders."
(mm) Sections 7.1 through 7.5 are deleted in their entirety and
------------ ---
replaced with the following provisions:
"SECTION 7.1. Minimum Cumulative EBITDA. Maintain EBITDA for
-------------------------
each period commencing on December 27, 1999 and ending on the last day of
the following Retail Periods for the Borrower's fiscal year ending December
31, 2000 which is greater than or equal to the corresponding amounts set
forth below opposite such Retail Periods:
Retail Period Ending Minimum Cumulative EBITDA
-------------------- -------------------------
Retail Period 4 $ 4,470,000
Retail Period 5 $ 6,810,000
Retail Period 6 $ 8,700,000
Retail Period 7 $ 10,505,000
Retail Period 8 $ 12,595,000
Retail Period 9 $ 15,160,000
Retail Period 10 $ 16,395,000
Retail Period 11 $ 19,055,000
Retail Period 12 $ 21,620,000
Retail Period 13 $ 22,665,000
SECTION 7.2. Minimum WPSA. Maintain WPSA for each of the
------------
following Retail Periods ending during the Borrower's fiscal year ending
December 31, 2000 which is greater than or equal to the corresponding
amounts set forth below opposite such Retail Periods:
Retail Period Minimum WPSA
------------- ------------
Retail Period 4 $ 12,500
Retail Period 5 $ 13,000
Retail Period 6 $ 12,614
Retail Period 7 $ 12,437
Retail Period 8 $ 12,666
Retail Period 9 $ 12,944
Retail Period 10 $ 12,833
-19-
<PAGE>
Retail Period 11 $ 13,004
Retail Period 12 $ 12,920
Retail Period 13 $ 12,227
SECTION 7.3. Capital Expenditures. Not pay or incur Capital
--------------------
Expenditures during its fiscal year ending December 31, 2000 in excess of
$14,600,000 in the aggregate."
(nn) Section 8.1(1) is deleted in its entirety and replaced with the
--------------
following provision:
"(1) The Borrower fails to pay (a) any principal amount of any Loans
or LC Obligations, or any interest with respect thereto, when due and
payable hereunder or under any other Loan Documents (whether constituting
Pre-Petition Obligations or Post-Petition Obligations), other than the
payment of principal with respect to the Term Loan pursuant to Section
-------
2.1(2)(b), or (b) any Obligations, other than the principal amount of any
---------
Loans or LC Obligations or interest with respect thereto (whether for fees,
expenses, reimbursement, indemnification, or other charges, and whether
constituting Pre-Petition Obligations or Post-Petition Obligations), when
due and payable hereunder or under any other Loan Documents and such
failure under this clause (b) shall continue for three (3) Business Days;"
----------
(oo) Sections 8.1(3) through 8.1(8) are deleted in their entirety and
--------------- ------
replaced with the following provisions:
(3) The Borrower or any Subsidiary shall fail to perform or observe
any term, covenant or agreement contained in any of Sections 2.3A, 6.1,
------------- ---
6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 6.11, 6.12, 6.13, 6.14, 6.18,
--- --- --- --- --- --- --- --- ---- ---- ---- ---- ---- ----
10.6 or 10.12;
---- -----
(4) The Borrower or any Subsidiary shall fail to perform or observe
any term, covenant or agreement contained in (a) Sections 5.8(1), 5.8(2),
--------------- ------
5.8(3) or 5.8(4) of this Agreement and such failure shall continue for five
------ ------
(5) Business Days, or (b) any of Sections 7.1 through 7.3, of this
------------ ---
Agreement and such failure shall continue for four (4) Business Days after
the earliest of notification or discovery thereof, the delivery by the
Borrower to the Agent, Lenders, or the Securities and Exchange Commission
of financial statements with respect to the Retail Periods during which
such failure occurred, or the last date on which such financial statements
may be delivered to the Agent and the Lenders in accordance with this
Agreement;
(5) The Borrower or any Subsidiary shall fail to perform or observe
any other term, covenant, or agreement contained in any Loan Document
applicable thereto (other than the Notes and those Sections referenced in
the foregoing Clauses(1) through (4)) on its part to be performed or
---------- ---
observed and such failure shall continue for fifteen (15) Business Days
following notice thereof from the Agent or the Required Lenders;
(6) An order with respect to the Case shall be entered by the
Bankruptcy Court, or any Credit Party shall file an application for an
order with respect to the Case,
-20-
<PAGE>
(i) appointing a trustee under Section 1104 of the Bankruptcy Code or (ii)
appointing an examiner with enlarged powers (beyond those set forth in
Section 1106(a)(3) and (4) of the Bankruptcy Code) relating to the
operation of the business under Section 1106(b) of the Bankruptcy Code;
provided, however, that the appointment of an examiner with solely those
-------- -------
investigatory duties referenced in Section 1106(a)(3) of the Bankruptcy
Code, or solely those reporting duties set forth in Section 1106(a)(4) of
the Bankruptcy Code, or both, shall not constitute an Event of Default
under this paragraph;
(7) An order with respect to the Case shall be entered by the
Bankruptcy Court confirming a plan of reorganization in the Case which is
not acceptable to the Required Lenders;
(8) An order with respect to the Case shall be entered by the
Bankruptcy Court confirming a plan of reorganization in the Case which does
not contain a provision for termination of the Revolving Loan Commitment
and payment in full in cash of all Obligations of the Borrower hereunder
and under the other Loan Documents on or before the effective date of such
plan (in which case the Obligations shall not be discharged by the entry of
any order confirming any such plan of reorganization and the Borrower
hereby waives such discharge);"
(pp) Section 8.1(15) is amended to add the phrase "or any other
---------------
Collateral Document" to the end of the lead-in language of such section
immediately prior to the colon.
(qq) Section 8.1(17) is amended to add the phrase "or a Change in
---------------
Management" to the end of such section.
(rr) Section 8.1 is further amended to add the following provisions
-----------
immediately following such subparagraph (17):
-----------------
"(18) An order shall be entered by the Bankruptcy Court
dismissing the Case, or converting the Case to a case under Chapter 7 of
the Bankruptcy Code, which order, in either such case, does not contain a
provision for termination of the Revolving Loan Commitment and payment in
full in cash of all Obligations of the Borrower hereunder and under the
other Loan Documents upon entry thereof;
(19) An order with respect to the Case shall be entered by
the Bankruptcy Court without the express prior written consent of the
Required Lenders, (i) to revoke, reverse, stay, modify, supplement or amend
the Interim Order or the Final Order, (ii) to permit any administrative
expense or any claim (now existing or hereafter arising, or any kind or
nature whatsoever) to have administrative priority as to any Credit Party
equal or superior to the priority of the Agent and the Lenders in respect
of the Post-Petition Obligations (except for those expenses included in the
Carveout and those secured by Pre-Petition Priority Permitted Liens), or
(iii) to grant or permit the grant of a Lien on any of the Collateral other
than Permitted Liens;
(20) An order shall be entered by the Bankruptcy Court that
is not stayed pending appeal granting relief from the automatic stay to any
creditor of any Credit Party with respect to any claim in an amount equal
to or exceeding $250,000 in the aggregate;
-21-
<PAGE>
provided, however, that it shall not be an Event of Default if relief from
-------- -------
the automatic stay is granted (i) solely for the purpose of allowing such
creditor to determine the liquidated amount of its claim against a Credit
Party or (ii) to permit the commencement of or prosecution of a proceeding
to collect against an insurance company;
(21) An application for any of the orders described in
subparagraphs (6), (8), (18), (19) or (20) of this section shall be made by
a Person other than a Credit Party and such application is not withdrawn,
dismissed or denied within thirty (30) days after the filing, or any Credit
Party shall make any such application;
(22) The entry of the Final Order shall not have occurred
within thirty (30) days after the Petition Date;
(23) Any Credit Party files any pleading seeking, or
otherwise consenting to, (i) the invalidation or other challenging of any
of the Agent's Liens securing the Pre-Petition Obligations, or which
otherwise objects to or contests in any manner, or raises defenses to, the
extent, amount, validity, perfection, priority, or enforceability of any of
the Pre-Petition Obligations or Liens securing any Pre-Petition
Obligations, or (ii) any relief under Section 506(c) of the Bankruptcy Code
with respect to any property which secures any of the Pre-Petition
Obligations; or
(24) The Exit Financing Commitment shall expire or be
terminated prior to its stated expiration date, or the lender or lenders
party to such commitment shall otherwise declare or assert that their
commitments thereunder are no longer binding or effective (other than on or
as of the stated expiration date thereof).
(ss) Section 8.2 is deleted in its entirety and replaced with the
-----------
following provision:
SECTION 8.2. Effect of Event of Default. If any Event of
--------------------------
Default shall occur, the Agent may (or shall, upon the written request of
the Required Lenders) (1) declare the Commitment of each of the Lenders and
the agreement of the Issuing Lender to issue Letters of Credit to be
terminated, and (2) declare the outstanding principal amount of the Notes,
all interest thereon, and all other amounts payable under this Agreement
and the other Loan Documents to be forthwith due and payable, whereupon the
Notes, all such interest, and all such amounts shall become and be
forthwith due and payable, without presentment, demand, protest, or further
notice of any kind all of which are hereby expressly waived by the Borrower
and without further order or application to the Bankruptcy Court; provided,
--------
however, that, (a) prior to the Agent's or any Lender's exercise of
-------
remedies under clause (1) of this section, the Agent shall provide written
----------
notice of the occurrence of an Event of Default to the Credit Parties,
counsel to the Credit Parties and counsel for any official committee of
unsecured creditors with respect to the Case which has been duly appointed
pursuant to Section 1102 of the Bankruptcy Code (the "Termination Notice")
------------------
and (b) prior to the Agent's exercise of any of its remedies under any of
the Loan Documents other than this Agreement, the Agent shall provide the
Credit Parties and the unsecured creditors' committee with three (3)
Business Days prior notice to allow the Credit Parties or such committee
the opportunity to obtain a
-22-
<PAGE>
determination from the Bankruptcy Court (at a hearing at which the Agent
shall have had an opportunity to contest such determination and with
respect to which the Agent shall have been given at least 48 hours' notice)
that no Event of Default shall have occurred and, unless at such hearing or
within such three (3) Business Day period the Bankruptcy Court orders
otherwise, the Agent and the Lenders may immediately exercise such
remedies."
(ss) Section 10.1 is amended to add the following provision to the
------------
end of the last paragraph of such section:
"Without in any way limiting the Lenders' right to withhold their consent
or agreement with respect thereto, the Required Lenders and the Borrower
shall be permitted to amend, waive or modify the Budget without the further
requirement of any approval or order by the Bankruptcy Court with respect
thereto."
(tt) Section 10.5 is amended to delete in its entirety the first
------------
sentence of such section and to replace such sentence with the following
provision:
"Each Lender may (without the Borrower's consent) grant participations in
or (subject to the consent of the Borrower (unless an Event of Default
shall have occurred and be continuing), which consent shall not be
unreasonably withheld) sell, assign, transfer or otherwise dispose of, at
any time and from time to time hereafter, such Lender's rights, title,
interests, remedies, powers and duties under this Agreement and the other
Loan Documents (each Person to whom such participation is to be made being
herein referred to as a "Participant" and each Person to whom such
assignment, transfer or disposition is to be made being herein referred to
as an "Assignee"), provided, that (a) each such participation, assignment,
-------- ----
transfer and disposition shall be of a constant, and not a varying,
percentage of all of the selling, assigning, transferring or disposing
Lender's rights and obligations under this Agreement (including, without
limitation, a constant percentage of all of such Lender's commitments
hereunder and interests in Pre-Petition Obligations and Post-Petition
Obligations) and (b) each assignment of a Lender's rights and commitments
must be to a prospective Lender which has the administrative ability, as
reasonably determined by such assigning Lender, to fund Revolving Loans
hereunder (and in the case of such an assignment by the Issuing Lender the
prospective Lender has the ability and willingness, as reasonably
determined by such assigning Issuing Lender, to issue Letters of Credit as
Issuing Lender hereunder)."
(uu) Section 10.8 is amended to add the following provision to the
------------
end of such section:
"and, to the extent applicable, the Bankruptcy Code."
(vv) Section 10.11 is amended to add the phrase "OF THE BANKRUPTCY
-------------
COURT, AND" to such section immediately prior to the existing phrase "OF ANY
ILLINOIS STATE OR FEDERAL COURT" set forth therein.
(ww) The Credit Agreement is further amended (i) to delete Exhibit B
---------
thereto and replace such exhibit with the exhibit attached hereto as Exhibit 1
---------
to this Agreement and (ii)
-23-
<PAGE>
to add as new Exhibits N, O and P thereto the exhibits respectively attached
---------- - -
hereto as Exhibits 2, 3 and 4 to this Agreement.
---------- - -
2. Security; Administrative Superpriority. Subject to the
--------------------------------------
satisfaction of each of the conditions set forth in Paragraph 4 of this
-----------
Agreement, and effective as of the Entry Date, the Credit Parties, the Agent and
the Lenders hereby agree that, notwithstanding anything in the Credit Agreement
or other Loan Documents to the contrary (and in addition to, and not in lieu of,
all of the security, claims, benefits and other terms and provisions set forth
in the Credit Agreement and other Loan Documents):
(a) To secure all of the Post-Petition Obligations, each Credit Party
hereby grants, assigns, pledges, transfers, conveys and sets over to the Agent,
for the benefit of itself and the Lenders, a lien on and security interest in
all of such Credit Party's now owned and hereafter acquired (i) property and
interests in property described in Section 2 of that certain Security Agreement
---------
dated as of May 17, 1996, and as amended as of November 21, 1997, between the
Borrower and the Agent, (ii) "Collateral" under and as defined in that certain
Pledge Agreement dated as of May 17, 1996 between the Borrower and the Agent,
(iii) property and interests in property described in Section 2 of that certain
---------
Security Agreement dated as of May 17, 1996, and as amended as of November 21,
1997, between the Corporate GP and the Agent, (iv) property and interests in
property described in Section 1 of that certain Collateral Assignment of Loan
---------
Documentation dated as of May 17, 1996, and as amended as of November 21, 1997,
between the Borrower and the Agent, (v) property and interests in property
described in Section 2 of that certain Security Agreement dated as of December
---------
5, 1997 executed by the Partnership in favor of the Agent and the Lenders, (vi)
"Collateral" under and as defined in that certain Pledge Agreement dated as of
December 5, 1997, between the Corporate GP and the Agent, (vii) property and
interests in property described in Section 3 of that certain Amended and
---------
Restated Trademark Security Agreement dated January 31, 2000, executed by the
Borrower in favor of the Agent and the Lenders, (viii) property and interests in
property described in Section 3 of that certain Amended and Restated Trademark
---------
Security Agreement dated January 31, 2000, executed by the Partnership in favor
of the Agent and the Lenders, (ix) property and interests in property described
in Section 3 of that certain Amended and Restated Trademark Security Agreement
---------
dated January 31, 2000, executed by the Corporate GP in favor of the Agent and
the Lenders, (x) property and interests in property described in Section 3 of
---------
that certain Patent Security Agreement dated January 31, 2000, executed by the
Borrower in favor of the Agent and the Lenders, (xi) other real and personal
property and interests therein of any Credit Party (including, without
limitation, the Credit Parties' respective rights and interests in any and all
real property leases and all rents and income thereunder and any and all fee
simple interests in real property) and (xii) products, accessions,
substitutions, additions and proceeds of any of the foregoing (but specifically
excluding, in any event, any depository accounts which may be established to
hold trust fund taxes in accordance with the requirements of the Interim Order
or Final Order and any causes of action or recoveries under Sections 544, 545,
547, 548, 549, 550 or 553 of the Bankruptcy Code).
(b) The Liens in favor of the Agent and the Lenders described in
Paragraph 2(a) hereof shall be valid and perfected liens and security interests,
--------------
prior to all other liens and interests now existing or hereafter arising (other
than Pre-Petition Permitted Liens). Such liens
-24-
<PAGE>
and security interests and their priority shall remain in effect until all Post-
Petition Obligations have been repaid and performed in full.
(c) Each Credit Party hereby agrees that the Post-Petition
Obligations shall constitute allowed administrative superpriority expenses in
the Case having priority in accordance with Section 364(c)(1) of the Bankruptcy
Code over all administrative expenses, secured claims and unsecured claims
against any Credit Party now existing or hereafter arising, of any kind or
nature whatsoever, including, without limitation all administrative expenses of
the kind specified in Sections 105, 326, 328, 330, 331, 503(b), 506(c), 507(a),
507(b) and 726 of the Bankruptcy Code (other than the fees and expenses included
in the Carveout and those secured by Pre-Petition Priority Permitted Liens).
(d) The Liens granted pursuant to Paragraph 2(a) hereof and the
--------------
administrative superpriority referenced in Paragraph 2(c) hereof, and the
--------------
corresponding Liens and superpriority provided in the Interim Order or the Final
Order, may be independently granted by the other Loan Documents and by other
Loan Documents hereafter entered into. This Agreement, the Interim Order, the
Final Order and such other Loan Documents supplement each other, and the grants,
priorities, rights and remedies of the Agent and the Lenders hereunder and
thereunder are cumulative.
(e) The Liens granted pursuant to Paragraph 2(a) and in the other
--------------
Loan Documents (with respect to the Post-Petition Obligations) shall be deemed
valid and perfected by entry of the Interim Order. Each Credit Party shall
execute and deliver to the Agent such financing statements as the Agent may
request, but neither the Agent nor the Lenders shall be required to file any
financing statements, notices of Liens or similar instruments in any
jurisdiction or filing office or to take any other action in order to validate
or perfect any such Liens.
(f) The Liens, their priority, the administrative priorities and
other rights and remedies granted the Agent or the Lenders pursuant to this
Paragraph 2, the Interim Order, the Final Order, or the other Loan Documents
-----------
(with respect to the Post-Petition Obligations) shall not be modified, altered
or impaired in any manner by any other financing or extension of credit or
incurrence of debt by the Borrower (pursuant to Section 364 of the Bankruptcy
Code or otherwise), or by any dismissal or conversion of the Case, or by entry
of an order confirming a plan of reorganization in the Case for or in behalf of
any Credit Party, or by any other act or omission whatever. Without limiting
the foregoing, notwithstanding any such order, financing, extension, incurrence,
dismissal, conversion, act or omission:
(i) no costs or expenses of administration which have been or
may be incurred in the Case or any conversion of the same or in any other
proceedings related thereto, and no priority claims, are or will be prior
to or in a parity with any claim of the Agent or the Lenders against the
Credit Parties in respect of any Post-Petition Obligation, other than those
expenses included in the Carveout and those secured by Pre-Petition
Priority Permitted Liens;
(ii) the Liens described in Paragraph 2(a) hereof and in the
--------------
Loan Documents (with respect to the Post-Petition Obligations) shall
constitute valid and
-25-
<PAGE>
perfected first priority Liens, and shall be prior to all other Liens, now
existing or hereafter arising, in favor of any other creditor of any Credit
Party or any other Person other than Pre-Petition Priority Permitted Liens;
and
(iii) the Liens described in Paragraph 2(a) hereof and in the
--------------
Loan Documents (with respect to the Post-Petition Obligations) shall
continue valid and perfected regardless of whether or not the Agent or any
Lender files financing statements, continuation statements or any other
instruments otherwise effective to perfect its Liens under applicable
nonbankruptcy law.
3. Waiver of Existing Defaults. Subject to the satisfaction of each
---------------------------
of the conditions set forth in Paragraph 4 of this Agreement, and effective as
-----------
of the Entry Date, the Agent and each Lender hereby waive each Event of Default
which has occurred and is continuing under the terms of the Credit Agreement
prior to the Entry Date, but only to the extent (a) described in Exhibit 5
---------
attached hereto (collectively, the "Existing Defaults") or (b) constituting the
Borrower's non-compliance with one or more of the financial covenants set forth
in Article VII of the Credit Agreement (before giving effect to the amendments
-----------
contemplated by Paragraph 1 of this Agreement) for a period ending, or date
-----------
occurring, prior the date hereof and such non-compliance is not actually known
by any of the executive officers of the Borrower as of the date hereof.
4. Effectiveness of this Agreement; Conditions Precedent. The
-----------------------------------------------------
provisions of Paragraphs 1 through 3 hereof shall be deemed to have become
------------ -
effective as of the Entry Date, but such effectiveness shall be expressly
conditioned upon the Agent's receipt of each of the following:
(a) an originally-executed counterpart of this Agreement executed and
delivered by a duly authorized officer of the Credit Parties and the Lenders;
(b) an originally-executed set of resolutions of the Board of
Directors of each of the Borrower and (on its own behalf and as general partner
for the Partnership) the Corporate GP, executed by a duly authorized officer (or
other duly authorized signatory) of each authorizing and approving the
commencement of the Cases, the Loans and other provisions contemplated by this
Agreement;
(c) an opinion of the Debtors' and the Corporate GP's counsel
addressed to the Agent and the Lenders with respect to this Agreement in form,
scope and substance acceptable to the Agent;
(d) a certified copy of the "Interim Order" (as defined in Paragraph
---------
1 hereof), which Interim Order shall have been entered by the Bankruptcy Court
-
no later than 5 days after the Petition Date and shall, prior to the entry of
the Final Order, not have been reversed, stayed, modified, vacated, amended or
appealed;
(e) receipt of an "Exit Financing Commitment" (as defined in
Paragraph 1 hereof);
-----------
-26-
<PAGE>
(f) an executed copy of the "Fee Letter" (as defined in Paragraph 1
-----------
hereof), together with payment in full, in cash or other immediately available
funds, of all costs and fees owing by the Borrower to the Agent, the Co-Agent
and the Lenders at such time thereunder and under the Credit Agreement (as
proposed to be amended pursuant to Paragraph 1 hereof); and
-----------
(g) copies of all "first day orders" entered on or about the Petition
Date (certified by the Bankruptcy Court to the extent affecting the Agent or any
Lender as determined by the Agent in its reasonable discretion).
5. Representations and Warranties. Subject to the entry by the
------------------------------
Bankruptcy Court of the Interim Order (as to the period prior to the entry of
the Final Order) and the Final Order, each Credit Party hereby represents and
warrants that:
(a) this Agreement constitutes the legal, valid and binding
obligation of each Credit Party enforceable against such Credit Party in
accordance with its terms;
(b) each Credit Party's execution and delivery of this Agreement, and
its performance hereafter of the Loan Documents as modified by this Agreement,
have been duly authorized by all necessary corporate or partnership action, do
not violate any provision of its certificate of incorporation, bylaws,
partnership agreement or other organizational documents, will not violate any
law, regulation, court order or writ applicable to it, will not require the
approval or consent of any governmental agency, and except as may have otherwise
been heretofore obtained, will not require the approval or consent of any third
party under the terms of any contract or agreement to which any Credit Party or
any Subsidiary or other Affiliate of any Credit Party is bound;
(c) after giving effect to all of the provisions of this Agreement
(and except with respect to the Existing Defaults), (i) no Default has occurred
and is continuing or will have occurred and be continuing and (ii) all of the
representations and warranties of each Credit Party contained in the Credit
Agreement and the other Loan Documents (other than such representations or
warranties which, in accordance with their express terms, are made only as of a
specified date) are, and will be, true and correct as of the date of the Credit
Parties' execution hereof in all material respects as though made on and as of
such date; and
(d) Attached hereto as Exhibits 6 and 7, respectively, are
----------- -
restatements of the contents of Schedules 4.10 and 4.14 of the Credit Agreement
-------------- ----
as if the representations and warranties set forth in Sections 4.10 and 4.14 of
-------------- ----
the Credit Agreement were remade as of the Petition Date and referred to such
exhibits hereto as of such date (instead of as of the Restatement Effective Date
as provided in such sections). All of such representations and warranties, with
respect to such exhibits are true and correct as of the Petition Date.
(e) as of the Petition Date, none of their properties are subject to
any Liens other than Liens in favor of the Agent or the Lenders with respect to
the Obligations, Liens of the types described in clauses (4) through (9) of
----------- ---
Section 6.1 of the Credit Agreement and Liens described on Exhibit 8 attached
----------- ---------
hereto and made a part hereof.
(f) as of the Petition Date, except as expressly disclosed in writing
to the Agent on or prior to the date hereof, there is no pending or (to the
Borrower's knowledge) threatened
-27-
<PAGE>
action or proceeding against the Borrower or any of its Subsidiaries before any
court, governmental agency, or arbitrator, other than threatened actions arising
in the ordinary course of business none of which is material either individually
or in the aggregate.
6. Reference to and Effect on Credit Agreement and Other Loan
----------------------------------------------------------
Documents. The Credit Agreement and each of the other Loan Documents, as
---------
amended hereby, shall remain in full force and effect and are hereby ratified
and confirmed. Except as is expressly set forth in Paragraph 3 hereof, neither
-----------
the execution, delivery or effectiveness of this Agreement shall operate as a
waiver of any right, power or remedy of the Agent or any Lender of any Default
under the Credit Agreement, all of which the Agent and the Lenders hereby
expressly reserve. The Credit Parties, the Lenders and the Agent agree and
acknowledge that this Agreement constitutes a "Loan Document" under and as
defined in the Loan Agreement. In the event of an irreconcilable inconsistency
between the terms of this Agreement and those of the existing Loan Documents,
the inconsistent terms in such other Loan Documents shall be deemed superseded
by the provisions of this Agreement to the extent of such inconsistency. In the
event of an irreconcilable inconsistency between the terms of the Loan Documents
(as modified by this Agreement) and those of the Interim Order or Final Order
(whichever is effective), the inconsistent terms in the Loan Documents (as
modified by this Agreement) shall be deemed superseded by the provisions of such
order to the extent of such inconsistency.
7. Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws and decisions of the State of Illinois.
8. Agent's Expenses. The Borrower hereby agrees that the Agent has
----------------
been authorized by the Borrower to charge all the reasonable out-of-pocket fees
and expenses (including, without limitation, attorneys' and paralegals' fees, it
or the Co-Agent has heretofore or hereafter incurred or incurs in connection
with the preparation, negotiation and execution of this Agreement) to the
Borrower's Account, which authorization is hereby ratified and confirmed by the
Borrower.
9. Reaffirmations by the Partnership and the Corporate GP. The
------------------------------------------------------
Partnership and the Corporate GP, in their respective capacities as guarantors,
pledgors, grantors, contributors, or other providers of financial accommodations
under the terms of the Loan Documents (including, without limitation, under that
certain Guaranty dated as of May 17, 1996 executed and delivered by the
Corporate GP in favor of the Agent and the Lenders, that certain Guaranty dated
as of December 5, 1997 executed and delivered by the Partnership in favor of the
Agent and the Lenders, and each of the other Loan Documents referred to and
described in Paragraph 2(a) hereof and to which the Corporate GP or the
--------------
Partnership is a party), hereby each reaffirms and ratifies each of its
obligations, covenants, guaranties, grants of security interests, pledges,
grants of liens and other undertakings and accommodations under the Loan
Documents to which it is a party, all of which shall hereafter remain in full
force and effect, with respect to both Pre-Petition Obligations and Post-
Petition Obligations. Each of the Partnership and the Corporate GP hereby
further agrees, to the extent within their respective powers and authority, to
carry out each term, provision, covenant and condition of the Credit Agreement
as modified by Paragraph 1 of this Agreement. Each of the Partnership and the
-----------
Corporate GP hereby agree and acknowledge it is truly and justly indebted as a
guarantor with respect to all Pre-Petition Obligations and Post-Petition
Obligations of the Borrower, without setoff, defense or counterclaim.
-28-
<PAGE>
10. Counterparts. This Agreement may be executed in counterparts,
------------
each of which shall be an original and all of which together shall constitute
one and the same agreement among the parties.
* * *
-29-
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
day and year first above written.
EINSTEIN/NOAH BAGEL CORP., as debtor and debtor-
in-possession
By: /s/ Paul A. Strasen
--------------------------------------------
Name: Paul A. Strasen
---------------------------------
Title: Sr. Vice President
--------------------------------
EINSTEIN/NOAH BAGEL PARTNERS, L.P., as debtor and
debtor-in-possession
By: EINSTEIN/NOAH BAGEL PARTNERS, INC., as General
Partner
By: /s/ Paul A. Strasen
--------------------------------------------
Name: Paul A. Strasen
---------------------------------
Title: Vice President
--------------------------------
EINSTEIN/NOAH BAGEL PARTNERS, INC.
By: /s/ Paul A. Strasen
--------------------------------------------
Name: Paul A. Strasen
---------------------------------
Title: Vice President
--------------------------------
BANK OF AMERICA, N.A.., as the Agent
By: /s/ David A. Johanson
--------------------------------------------
Name: David A. Johanson
---------------------------------
Title: Vice President
--------------------------------
BANK OF AMERICA, N.A.., as a Lender
By: /s/ Michael Staunton
--------------------------------------------
Name: Michael Staunton
---------------------------------
Title: Vice President
--------------------------------
-30-
<PAGE>
GENERAL ELECTRIC CAPITAL CORPORATION, as a Lender
and as Co- Agent
By: /s/ Jeff Fitts
--------------------------------------------
Name: Jeff Fitts
---------------------------------
Title: Senior Vice President
--------------------------------
LASALLE BANK NATIONAL ASSOCIATION, (as successor
to LaSalle National Bank), as a Lender
By: /s/ David C. Shapiro
--------------------------------------------
Name: David C. Shapiro
---------------------------------
Title: First Vice President
--------------------------------
-31-
