<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended July 27, 1996
Commission file number 1-10259
WABAN INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 33-0109661
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Mercer Road
Natick, Massachusetts 01760
(Address of principal executive offices) (Zip Code)
(508) 651-6500
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No .
--- ---
The number of shares of Registrant's common stock outstanding as of August 24,
1996: 32,705,956
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
WABAN INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<CAPTION>
Thirteen Weeks Ended
----------------------
July 27, July 29,
1996 1995
---------- ----------
(In Thousands Except
Per Share Amounts)
<S> <C> <C>
Net sales $1,157,959 $1,051,882
--------- ---------
Cost of sales, including buying and occupancy costs 985,837 891,278
Selling, general and administrative expenses 125,300 116,966
Interest on debt and capital leases (net) 4,551 3,631
--------- ---------
Total expenses 1,115,688 1,011,875
--------- ---------
Income before income taxes 42,271 40,007
Provision for income taxes 16,659 15,603
--------- ---------
Net income $ 25,612 $ 24,404
========= =========
Net income per common share (see Exhibit 11 for
detailed computations):
Primary $ 0.77 $ 0.74
========= =========
Fully diluted $ 0.71 $ 0.68
========= =========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
WABAN INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<CAPTION>
Twenty-Six Weeks Ended
-----------------------
July 27, July 29,
1996 1995
---------- ----------
(In Thousands Except
Per Share Amounts)
<S> <C> <C>
Net sales $2,132,589 $1,936,337
--------- ---------
Cost of sales, including buying and occupancy costs 1,820,630 1,646,831
Selling, general and administrative expenses 244,723 228,294
Interest on debt and capital leases (net) 9,366 7,658
--------- ---------
Total expenses 2,074,719 1,882,783
--------- ---------
Income before income taxes 57,870 53,554
Provision for income taxes 22,743 20,886
--------- ---------
Net income $ 35,127 $ 32,668
========= =========
Net income per common share (see Exhibit 11 for
detailed computations):
Primary $ 1.05 $ 0.98
========= =========
Fully diluted $ 0.99 $ 0.92
========= =========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
WABAN INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<CAPTION>
July 27, January 27, July 29,
1996 1996 1995
----------- ----------- -----------
(Dollars In Thousands)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 5,571 $ 32,155 $ 39,406
Marketable securities 14,223 20,339 68,741
Accounts receivable 56,561 59,221 46,613
Merchandise inventories 615,450 570,236 534,538
Current deferred income taxes 21,265 21,445 22,123
Prepaid expenses 11,913 10,755 17,804
--------- --------- ---------
Total current assets 724,983 714,151 729,225
--------- --------- ---------
Property at cost:
Land and buildings 407,077 376,930 333,247
Leasehold costs and improvements 87,244 84,052 75,110
Furniture, fixtures and equipment 306,304 288,929 262,436
--------- --------- ---------
800,625 749,911 670,793
Less accumulated depreciation
and amortization 191,685 169,711 152,610
--------- --------- ---------
608,940 580,200 518,183
--------- --------- ---------
Property under capital leases 14,750 15,640 16,042
Less accumulated amortization 6,531 6,904 6,732
--------- --------- ---------
8,219 8,736 9,310
--------- --------- ---------
Property held for sale (net) 59 4,603 4,282
Deferred income taxes 10,118 11,557 5,719
Other assets 12,783 13,204 12,947
--------- --------- ---------
Total assets $1,365,102 $1,332,451 $1,279,666
========= ========= =========
LIABILITIES
Current liabilities:
Current installments of long-
term debt $ 12,862 $ 12,828 $ 12,795
Accounts payable 299,388 275,963 283,232
Restructuring reserve 4,257 7,175 9,489
Accrued expenses and other
current liabilities 132,198 143,316 123,785
Accrued federal and state
income taxes 8,570 8,771 11,773
Obligations under capital leases
due within one year 440 648 824
--------- --------- ---------
Total current liabilities 457,715 448,701 441,898
--------- --------- ---------
Real estate debt 484 924 1,346
General corporate debt 12,000 24,000 24,000
Senior subordinated debt 100,000 100,000 100,000
Convertible subordinated debt 108,600 108,600 108,600
Obligations under capital leases,
less portion due within one year 11,626 11,789 12,044
Noncurrent restructuring reserve 15,583 20,623 16,535
Other noncurrent liabilities 69,729 62,694 58,410
STOCKHOLDERS' EQUITY
Common stock, par value $.01,
authorized 190,000,000 shares,
issued 33,270,685, 33,296,935
and 33,288,320 shares 333 333 333
Additional paid-in capital 329,341 328,619 327,009
Unrealized holding gains (losses) (5) 22 59
Retained earnings 270,340 235,213 194,904
Treasury stock, at cost, 562,649,
567,571 and 371,500 shares (10,644) (9,067) (5,472)
--------- --------- ---------
Total stockholders' equity 589,365 555,120 516,833
--------- --------- ---------
Total liabilities and
stockholders' equity $1,365,102 $1,332,451 $1,279,666
========= ========= =========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
WABAN INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Twenty-Six Weeks Ended
----------------------
July 27, July 29,
1996 1995
--------- ---------
(In Thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $35,127 $ 32,668
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization of property 27,322 22,554
Loss on property disposals 766 58
Amortization of premium on marketable securities 116 470
Other noncash items (net) 436 425
Deferred income taxes 1,637 2,279
Increase (decrease) in cash
due to changes in:
Accounts receivable 2,660 5,262
Merchandise inventories (45,214) (21,919)
Prepaid expenses (1,158) (8,812)
Other assets 93 (267)
Accounts payable 23,425 33,390
Restructuring reserves (7,958) (10,955)
Accrued expenses 458 981
Accrued income taxes (201) 9,237
Other noncurrent liabilities 7,035 7,251
------- -------
Net cash provided by operating
activities 44,544 72,622
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable securities (20,873) (79,881)
Sale of marketable securities 23,694 43,332
Maturity of marketable securities 3,140 31,587
Property additions (67,767) (83,269)
Property disposals 4,424 7,296
------- -------
Net cash used in investing activities (57,382) (80,935)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt (12,406) (12,374)
Repayment of capital lease obligations (371) (530)
Purchase of treasury stock (11,392) (5,472)
Proceeds from sale and issuance of common stock 10,423 1,055
------- -------
Net cash used in financing activities (13,746) (17,321)
------- -------
Net decrease in cash and cash equivalents (26,584) (25,634)
Cash and cash equivalents at beginning of year 32,155 65,040
------- -------
Cash and cash equivalents at end of period $ 5,571 $ 39,406
======= =======
Supplemental cash flow information:
Interest paid $ 10,450 $ 10,868
Income taxes paid 21,307 9,441
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
WABAN INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
<CAPTION>
(In Thousands Except Per Share Amounts)
-------------------------------------------------------------
Common Unrealized Total
Stock Additional Holding Stock-
Par Value Paid-In Gains Retained Treasury holders'
$.01 Capital (Losses) Earnings Stock Equity
--------- ---------- ---------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Balance, January 28,
1995 $ 332 $325,565 $ (44) $162,236 $ - $488,089
Net income - - - 32,668 - 32,668
Unrealized
holding gains - - 103 - - 103
Purchase of
treasury stock - - - - (5,472) (5,472)
Sale and issuance
of common stock 1 1,444 - - - 1,445
----- -------- ----- -------- ------- --------
Balance, July 29,
1995 $ 333 $327,009 $ 59 $194,904 $ (5,472) $516,833
===== ======== ===== ======== ======= ========
Balance, January 27,
1996 $ 333 $328,619 $ 22 $235,213 $ (9,067) $555,120
Net income - - - 35,127 - 35,127
Unrealized
holding losses - - (27) - - (27)
Purchase of
treasury stock - - - - (11,392) (11,392)
Sale and issuance
of common stock - 722 - - 9,815 10,537
----- -------- ----- -------- ------ --------
Balance, July 27,
1996 $ 333 $329,341 $ (5) $270,340 $(10,644) $589,365
===== ======== ===== ======== ====== ========
The accompanying notes are an integral part of the financial statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The results for the first six months are not necessarily indicative of
results for the full fiscal year because the Company's business, in common with
the business of retailers generally, is subject to seasonal influences. BJ's
Wholesale Club's sales and profits have typically been strongest in the
Christmas holiday season and lowest in the first quarter of each fiscal year.
HomeBase's sales and profits are typically lower in the first and fourth
quarters than they are in the second and third quarters, which correspond to
the most active season for home construction.
2. The financial statements are unaudited and reflect all normal recurring
adjustments considered necessary by the Company for a fair presentation of its
financial statements in accordance with generally accepted accounting
principles.
3. These interim financial statements should be read in conjunction with the
consolidated financial statements and related notes contained in the Annual
Report on Form 10-K for the fiscal year ended January 27, 1996.
4. Presented below is information relative to the operating results of the
Company's business segments (dollars in thousands):
</TABLE>
<TABLE>
<CAPTION>
Thirteen Weeks Ended Twenty-Six Weeks Ended
-------------------- ----------------------
July 27, July 29, July 27, July 29,
1996 1995 1996 1995
-------- -------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales:
BJ's Wholesale Club $ 733,688 $ 632,371 $1,356,076 $1,163,477
HomeBase 424,271 419,511 776,513 772,860
--------- --------- --------- ---------
$1,157,959 $1,051,882 $2,132,589 $1,936,337
========= ========= ========= =========
Operating income:
BJ's Wholesale Club $ 25,914 $ 21,068 $ 39,950 $ 30,991
HomeBase 22,938 24,474 31,193 33,984
General corporate expense (2,030) (1,904) (3,907) (3,763)
--------- --------- --------- ---------
46,822 43,638 67,236 61,212
Interest on debt and capital
leases (net) (4,551) (3,631) (9,366) (7,658)
--------- --------- --------- ---------
Income before income taxes $ 42,271 $ 40,007 $ 57,870 $ 53,554
========= ========= ========= =========
</TABLE>
Warehouses in operation - end of period:
- ---------------------------------------
BJ's Wholesale Club 77 65
HomeBase 82 78
5. Certain amounts in the prior year's financial statements have been
reclassified for comparative purposes.
<PAGE>
<PAGE>
Management's Discussion and Analysis
of Financial Condition and Results of Operations
Thirteen Weeks (Second Quarter) and Twenty-Six Weeks (Six Months) Ended July
27, 1996 versus Thirteen and Twenty-Six Weeks Ended July 29, 1995.
Results of Operations
- ---------------------
Consolidated net sales for the quarterly and six-month periods ended July 27,
1996 were $1.2 billion and $2.1 billion, respectively, an increase of 10.1%
over both comparable periods last year. These increases were due to the
opening of new stores and comparable store sales increases at BJ's Wholesale
Club, partially offset by comparable store sales decreases at HomeBase.
Comparable store sales at BJ's increased 5.7% in the second quarter and 6.4%
for the six-month period. HomeBase's comparable store sales decreased 3.7% in
the second quarter and 4.3% year-to-date.
Cost of sales (including buying and occupancy costs) was 85.1% of sales in this
year's second quarter versus 84.7% in the comparable period last year. For the
first six months, the cost of sales percentage was 85.4% this year versus 85.0%
last year. This year's higher cost of sales ratios were attributable primarily
to the increased proportion of consolidated sales contributed by BJ's, which
has higher cost of sales than HomeBase.
Selling, general and administrative ("SG&A") expenses were 10.8% of sales in
the second quarter this year versus 11.1% in the comparable period last year.
Year-to-date SG&A expenses were 11.5% this year versus 11.8% last year. These
decreases were primarily due to BJ's larger share of consolidated sales. SG&A
expenses are lower at BJ's than at HomeBase, whose business requires a higher
level of customer service.
BJ's operating income in this year's second quarter was $25.9 million, an
increase of 23.0% over last year's $21.1 million. Year-to-date operating
income rose 28.9% to $40.0 million versus $31.0 million last year. These
increases were due mainly to comparable store sales increases as well as
expense leverage from operating a larger number of warehouse clubs.
Operating income at HomeBase was $22.9 million for the second quarter compared
to $24.5 million last year and totalled $31.2 million for the first half versus
the prior year's $34.0 million. These decreases were attributable primarily to
comparable store sales declines, which reflected increased competition and a
weak environment for home improvement expenditures in certain of HomeBase's
markets.
The components of net interest expense were as follows (in thousands):
<TABLE>
<CAPTION>
Thirteen Weeks Ended Twenty-Six Weeks Ended
-------------------- ----------------------
July 27, July 29, July 27, July 29,
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Interest expense on debt $ 4,815 $ 4,785 $ 9,751 $10,122
Interest and investment income (657) (1,569) (1,176) (3,302)
------ ------ ------ ------
Interest on debt (net) 4,158 3,216 8,575 6,820
Interest on capital leases 393 415 791 838
------ ------ ------ ------
Interest on debt and capital
leases (net) $ 4,551 $ 3,631 $ 9,366 $ 7,658
====== ====== ====== ======
</TABLE>
Interest expense on debt was net of capitalized interest of $615,000 in this
year's second quarter and $1,309,000 year-to-date. Last year's capitalized
interest was $949,000 in the second quarter and $1,478,000 in the first six
months. Interest and investment income was lower this year because of
decreased investments in marketable securities.
The year-to-date provision rate for income taxes was 39.3% this year versus
39.0% last year.
Net income for the second quarter was $25.6 million, or $.71 per share, fully
diluted, versus $24.4 million or $.68 per share, in the second quarter of last
year. For the first six months, net income was $35.1 million, or $.99 per
share, fully diluted, versus $32.7 million, or $.92 per share last year.
Liquidity and Capital Resources
- -------------------------------
During the first half of this fiscal year, the Company opened six new BJ's
clubs (four of which opened at the end of July) and three new HomeBase
warehouse stores, and relocated one HomeBase store. Last year the Company
opened three new BJ's clubs and three HomeBase stores in the same time period.
The renovation of six older HomeBase stores was also completed during this
year's first half, bringing the total number of stores reflecting HomeBase's
new prototype design to 43. Cash expended for property additions year-to-date
was $67.8 million versus $83.3 million last year.
The Company's capital expenditures are expected to total approximately $135
million in the current fiscal year, based on opening approximately four
additional BJ's clubs and two additional HomeBase warehouse stores over the
remainder of the year. Approximately eight additional HomeBase stores are also
slated for renovation by the beginning of the next fiscal year. The timing of
actual store openings and the amount of related expenditures could vary from
these estimates due to, among other things, the complexity of the real estate
development process.
As of July 27, 1996, the Company has closed 18 HomeBase warehouse stores in
connection with its restructuring and expects to close two additional HomeBase
stores that are currently in operation. With the settlement of one closed
store lease during the second quarter and two others in August, the Company
remains obligated under leases for three closed stores.
Cash flow related to restructuring transactions, net of tax benefits, broke
even during the first six months of this fiscal year. Future net cash outflow
in connection with the disposition of the remaining warehouse locations,
including long-term lease obligations, is expected to be approximately $5
million to $10 million (net of tax benefits). The terms of the remaining
leases expire at various dates through 2007. In some cases, the Company has
made lump sum cash payments to settle lease obligations, and it may settle
other future lease obligations in the same manner. The actual future cash flows
could vary from the estimates above, depending on certain factors, principally
the Company's ability to dispose of closed HomeBase locations on anticipated
terms.
During the first half of this fiscal year, the Company repurchased 570,000
shares of common stock on the open market at a total cost of $11.4 million, or
an average cost of $19.99 per share. Cumulatively, the Company has spent $21.3
million to purchase 1.2 million shares of its common stock at an average cost
of $17.86, pursuant to the $50 million repurchase program approved by the Board
of Directors in June 1995.
During the second quarter, the Company extended its $150 million credit
agreement with a group of banks through March 30, 1999. The agreement includes
a $20 million sub-facility for standby letters of credit. As of May 1996, the
annual facility fee that the Company is required to pay was reduced from
$300,000 to $225,000, and the surcharge on borrowings made at LIBOR was reduced
from 0.45% to 0.40%. These rates are both subject to further change, based
upon the Company's fixed charge coverage ratio. At July 27, 1996, $7.7 million
of standby letters of credit were outstanding under the line's sub-facility.
The remainder of the line of credit was available for use as of the end of the
second quarter. The Company has not borrowed against this line of credit.
Increases in inventory since the end of the fiscal year and from July 29, 1995
to July 27, 1996 were attributable primarily to new stores.
Cash, cash equivalents and marketable securities totalled $19.8 million as of
July 27, 1996. The Company expects that its current resources, together with
anticipated cash flow from operations, will be sufficient to finance its
operations through the fiscal year ending January 31, 1998. However, the
Company may from time to time seek to obtain additional financing. The
Company's cash requirements may vary, based on, among other things, the rate at
which it disposes of the HomeBase stores closed in connection with the
restructuring.
Seasonality
- -----------
BJ's sales and operating income have typically been strongest in the Christmas
holiday season and lowest in the first quarter of each fiscal year. HomeBase's
sales and earnings are typically lower in the first and fourth quarters than
they are in the second and third quarters, which correspond to the most active
season for home construction.
<PAGE>
<PAGE>
PART II. OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders
---------------------------------------------------
At the 1996 Annual Meeting of Stockholders held on June 11, 1996,
two directors were elected. The tabulation of the vote was as
follows:
<TABLE>
<CAPTION>
Broker
Shares Shares Shares Shares Non-
Voted For Withheld Against Abstaining Votes
--------- -------- ------- ---------- ------
<S> <C> <C> <C> <C> <C>
Directors
- ---------
Allyn L. Levy 29,431,090 140,559 - - -
Lorne R. Waxlax 29,429,603 142,046 - - -
</TABLE>
Item 6 - Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
10.16a Amendment No. 1 dated as of June 7, 1996 to
Credit Agreement dated as of April 4, 1995
11.0 Statement regarding computation of per share
earnings
27.0 Financial Data Schedule
(b) The Company did not file any reports on Form 8-K with
the Securities and Exchange Commission during the quarter
ended July 27, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WABAN INC.
----------
(Registrant)
Date: September 5, 1996 /S/ HERBERT J. ZARKIN
----------------------------- ------------------------------
Herbert J. Zarkin
President and
Chief Executive Officer
Date: September 5, 1996 /S/ EDWARD J. WEISBERGER
----------------------------- ------------------------------
Edward J. Weisberger
Senior Vice President and
Chief Financial Officer
<PAGE>
<TABLE>
Exhibit 11
WABAN INC. AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF NET INCOME PER COMMON SHARE
(Unaudited)
<CAPTION>
Thirteen Weeks Ended Twenty-Six Weeks Ended
--------------------- ----------------------
July 27, July 29, July 27, July 29,
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net income as reported $25,612,000 $24,404,000 $35,127,000 $32,668,000
========== ========== ========== ==========
Net income used for primary
computation $25,612,000 $24,404,000 $35,127,000 $32,668,000
Add (where dilutive):
Tax effected interest and
amortization of debt expense
on convertible debt 1,086,000 1,086,000 2,171,000 2,171,000
---------- ---------- ---------- ----------
Net income used for fully
diluted computation $26,698,000 $25,490,000 $37,298,000 $34,839,000
========== ========== ========== ==========
Weighted average number of
common shares outstanding 33,000,625 33,103,796 32,958,451 33,166,395
Add (where dilutive):
Assumed exercise of those
options that are common
stock equivalents net of
treasury shares deemed to
have been repurchased 358,925 74,446 381,386 163,721
---------- ---------- ---------- ----------
Weighted average number of
common and common equivalent
shares outstanding, used for
primary computation 33,359,550 33,178,242 33,339,837 33,330,116
Add (where dilutive):
Shares applicable to stock
options in addition to those
used in primary computation
due to the use of period-end
market price when higher than
average price - 73,980 - 2,042
Assumed exercise of
convertible securities 4,387,879 4,387,879 4,387,879 4,387,879
---------- ---------- ---------- ----------
Adjusted shares outstanding
used for fully diluted
computation 37,747,429 37,640,101 37,727,716 37,720,037
========== ========== ========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Waban
Inc. consolidated statements of income and consolidated balance sheets filed
with the Form 10-Q for the quarter ended July 27, 1996 and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-25-1997
<PERIOD-END> JUL-27-1996
<CASH> 5,571
<SECURITIES> 14,223
<RECEIVABLES> 56,561
<ALLOWANCES> 0
<INVENTORY> 615,450
<CURRENT-ASSETS> 724,983
<PP&E> 815,375
<DEPRECIATION> 198,216
<TOTAL-ASSETS> 1,365,102
<CURRENT-LIABILITIES> 457,715
<BONDS> 232,710
<COMMON> 333
0
0
<OTHER-SE> 589,032
<TOTAL-LIABILITY-AND-EQUITY> 1,365,102
<SALES> 2,132,589
<TOTAL-REVENUES> 2,132,589
<CGS> 1,820,630
<TOTAL-COSTS> 1,820,630
<OTHER-EXPENSES> 244,723
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,366
<INCOME-PRETAX> 57,870
<INCOME-TAX> 22,743
<INCOME-CONTINUING> 35,127
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 35,127
<EPS-PRIMARY> 1.05
<EPS-DILUTED> .99
</TABLE>
AMENDMENT NO. 1
Dated as of June 7, 1996
to
CREDIT AGREEMENT
Dated as of April 4, 1995
This Amendment No. 1 (this "Amendment"), dated as of June 7, 1996, is
among Waban Inc. (the "Borrower"), the Lenders party to the Credit Agreement
(defined below) and The First National Bank of Chicago, as Agent.
W I T N E S S E T H:
Whereas, the Borrower, the Lenders and the Agent are parties to that
certain Credit Agreement dated as of April 4, 1995 (as heretofore amended, the
"Credit Agreement") and the other Loan Documents referred to therein; and
Whereas, the Borrower, the Lenders and the Agent desire to amend the Credit
Agreement in order to amend certain provisions thereof;
Now, Therefore, in consideration of the premises and the undertakings set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:
1. Definitions. Capitalized terms used herein and not otherwise defined
-----------
herein shall have the meanings attributed to them in the Credit Agreement.
2. Amendment. The definition of "Termination Date" contained in Article
---------
I of the Credit Agreement is hereby amended by deleting the date "March 30,
1998" contained therein and inserting in lieu thereof the date "March 30,
1999".
3. Representations and Warranties. In order to induce the Agent and the
------------------------------
Lenders to enter into this Amendment, the Borrower hereby represents and
warrants to the Agent and the Lenders as of the date of this Amendment that:
(a) There exists no Default or Unmatured Default and the execution
of this Amendment shall not create a Default or Unmatured Default.
(b) The representations and warranties contained in Article V of the
Credit Agreement are true and correct as of the date of this Amendment.
4. Legal Expenses. The Borrower agrees to reimburse the Agent for
--------------
reasonable legal fees and expenses incurred by attorneys for the Agent (who may
be employees of the Agent) in connection with the preparation, negotiation and
consummation of this Amendment and the transactions contemplated herein.
5. Ratification of Credit Agreement. Except as specifically provided
--------------------------------
herein, all of the terms and conditions of the Credit Agreement shall remain in
full force and effect and the Credit Agreement as amended hereby is agreed to,
ratified and confirmed by the Borrower, the Agent and the Lenders in all
respects.
<PAGE>
6. Miscellaneous.
-------------
(a) This Amendment may be executed in counterparts and by the
different parties hereto on separate counterparts each of which, when so
executed and delivered, shall be deemed an original, and all of which
taken together shall constitute one and the same agreement.
(b) This Amendment shall be effective as of the date first above
written; provided, that, the Agent has received executed counterparts of
-------- ----
this Amendment from the Borrower, the Agent and the Lenders.
In Witness Whereof, the Borrower, the Agent and the Lenders have executed
this Amendment as of the date first above written.
WABAN INC.
By: /s/ E. J. Weisberger
-----------------------------------
Senior Vice President
Title: Chief Financial Officer
--------------------------------
THE FIRST NATIONAL BANK OF CHICAGO,
individually and as Agent
By: /s/ Christina Zautcke
-----------------------------------
Title: Vice President
--------------------------------
THE FIRST NATIONAL BANK OF BOSTON,
Individually and as Co-Agent
By: /s/ Melanie D. Mace
-----------------------------------
Title: Vice President
--------------------------------
FLEET NATIONAL BANK (as successor by
merger to Shawmut Bank, N.A. and
Fleet Bank of Massachusetts,
N.A.), Individually and as Co-Agent
By: /s/ Gerald G. Sheehan
-----------------------------------
Title: Assistant Vice President
--------------------------------
<PAGE>
WELLS FARGO BANK, NATIONAL
ASSOCIATION,
Individually and as Co-Agent
By: /s/ Peter G. Olson
-----------------------------------
Title: Senior Vice President
--------------------------------
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA
By: /s/ Mark M. Harden
-----------------------------------
Title: Vice President
--------------------------------
LTCB TRUST COMPANY
By: /s/ Theodore R. Koerner II
-----------------------------------
Title: Senior Vice President
--------------------------------
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Kwan L. Grays
-----------------------------------
Title: Assistant Vice President
--------------------------------
