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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Act of 1934
Date of Report (Date of earliest event reported): September 5, 1997
BOSTON CHICKEN, INC.
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(Exact name of registrant as specified in this charter)
Delaware 0-22802 36-3904053
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(State or other (Commission (IRS Employer
jurisdiction of File No.) Identification No.)
incorporation)
14103 Denver West Parkway, P.O. Box 4086, Golden, Colorado 80401-4086
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(Address of principal executive offices)
(303) 278-9500
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(Registrant's telephone number, including area code)
Not applicable
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(Former name or former address, if changes since last report)
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Item 5. Other Events.
As of September 5, 1997, Boston Chicken, Inc. (the "Company") received from
its lenders a waiver of compliance with the financial covenant in the Company's
senior credit facilities requiring systemwide gross weekly per store average
("WPSA") revenue of not less than $20,500 per accounting period. The waiver (a)
waives the Company's compliance with the covenant during the accounting period
ended September 7, 1997 and (b) modifies the covenant to require the Company to
maintain systemwide net WPSA revenue of not less than (i) $17,750 during the
accounting period ending October 5, 1997 and (ii) $18,000 during the accounting
period ending November 2, 1997, which reflects levels more consistent with
recent systemwide net WPSA revenue levels. During this two month period, the
Company has agreed not to draw more than $45 million under its $110 million
senior revolving credit facility. There is currently no principal balance
outstanding under the senior revolving credit facility. Based upon this
modification, the Company believes that it will not violate the modified
covenant.
Certain statements in this report constitute "forward-looking statements"
and involve risks, uncertainties and other factors which may cause the actual
results and the performance of the Company, its area developers and franchisees,
and its and their Boston Market stores to be materially different from the
results, performance or achievements expressed or implied by such statements.
Such factors include, among others: availability and cost of capital; success of
operating initiatives; development and operating costs; area developers'
adherence to development schedules; advertising and promotional efforts; store
performance; adverse publicity; changes in business strategy, including the
possible integration of fresh, chilled prepared foods in the Boston Market
concept; changes in development plans; availability, locations, and terms of
sites for store development; and other factors set forth in the Company's
filings with the Securities and Exchange Commission.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Exhibits. See Exhibit Index appearing elsewhere herein, which is
incorporated herein by such reference.
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SIGNATURE
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 hereunto duly authorized.
Dated: September 15, 1997
BOSTON CHICKEN, INC.
By: /s/ Mark W. Stephens
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Mark W. Stephens
Vice Chairman of the Board and Chief
Financial Officer
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EXHIBIT INDEX
Exhibit
Number Exhibits
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10.1 Waiver of Compliance to Facilities Agreement dated as of September 5,
1997, by and between the Company, Bank of America National Trust and
Savings Association, as agent for the Lenders and the Issuing Lender,
and General Electric Capital Corporation, for itself and as agent for
the Lease Participants.
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Exhibit 10.1
WAIVER OF COMPLIANCE
TO
FACILITIES AGREEMENT
THIS WAIVER OF COMPLIANCE (this "Waiver") dated as of September 5, 1997 is
among BOSTON CHICKEN, INC., a Delaware corporation (the "Company"), BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION (as successor by merger to Bank
of America Illinois), as agent for the Lenders and the Issuing Lender referred
to below (in such capacity, together with its successors and assigns, the "Loan
Agent"), and GENERAL ELECTRIC CAPITAL CORPORATION, for itself and as agent for
the Lease Participants referred to below (in its individual capacity, "GECC";
and in such dual capacity, together with its successors and assigns, the "Lease
Agent").
WHEREAS, the Company has entered into that certain Secured Revolving Credit
Agreement dated as of December 9, 1996 (the "Credit Agreement") among the
Company, the financial institutions from time to time party thereto (the
"Lenders"), Bank of America National Trust and Savings Association (as successor
by merger to Bank of America Illinois), as letter of credit issuing bank (in
such capacity, the "Issuing Lender"), and the Loan Agent;
WHEREAS, the Company has entered into that certain Master Lease Agreement
No. 2, dated as of December 9, 1996 (the "1996 Master Lease Agreement") between
the Company and the Lease Agent;
WHEREAS, GECC has heretofore and may hereafter convey to certain financial
institutions (collectively with GECC, the "Lease Participants") participation
interests in its rights, duties and obligations under the 1996 Master Lease
Agreement; and
WHEREAS, the Company, the Loan Agent and the Lease Agent have entered into
(i) that certain Intercreditor Agreement dated as of December 9, 1996 (as
heretofore amended, the "Intercreditor Agreement") which sets forth certain
agreements among the Lenders, the Issuing Lender, the Loan Agent, the Lease
Agent and the Lease Participants with respect to, among other things, voting
rights and collateral issues and (ii) that certain Facilities Agreement dated as
of December 9, 1996 (as heretofore amended, the "Facilities Agreement") which
sets forth certain agreements and provisions governing the conduct of the
Company and certain of its Subsidiaries;
WHEREAS, the Company has requested the Loan Agent and the Lease Agent to
waive compliance by the Company with the provisions of Section 5.4 of the
Facilities Agreement; and
WHEREAS, the Loan Agent and the Lease Agent have received consents to this
Waiver from the requisite percentage of Lenders and Lease Participants in
accordance with Section 2.1 of the Intercreditor Agreement.
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NOW, THEREFORE, in consideration of the mutual promises herein contained
and for other good and valuable consideration, the parties hereto agree as
follows:
SECTION 1. WAIVERS.
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In reliance on the Company's warranties set forth in Section 2 below, as of
the date hereof the Loan Agent and the Lease Agent hereby waive compliance by
the Company with the provisions of Section 5.4 of the Facilities Agreement
during the Retail Periods ending on September 7, 1997, October 5, 1997 and
November 2, 1997; provided, that this Waiver shall be null and void if:
(a) the Company shall fail to maintain average weekly net
revenue (i.e., gross revenue net of customer coupons and discounts)
per Store for all such Stores (whether operated by the Company or a
Franchisee) of not less than (i) $17,750 during the Retail Period
ending October 5, 1997 and (ii) $18,000 during the Retail Period
ending November 2, 1997; or
(b) the aggregate outstanding principal amount of Revolving
Loans shall exceed $45,000,000 at any time prior to delivery by the
Company in accordance with Section 3.8(1) of the Facilities Agreement
of the financial statements with respect to the Retail Period ending
November 2, 1997.
SECTION 2. WARRANTIES.
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To induce the Loan Agent and the Lease Agent to enter into this Waiver, the
Company warrants to the Loan Agent and the Lease Agent as of the date hereof
that:
(a) The representations and warranties contained in Article VI
of the Credit Agreement, Section II of the Facilities Agreement and
Section XVI of the 1996 Master Lease Agreement are true and correct as
of the date hereof; and
(b) After giving effect to this Waiver, no Default or Event of
Default has occurred and is continuing.
SECTION 3. GENERAL.
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(a) Terms used but not otherwise defined herein are used herein as defined
in the Facilities Agreement.
(b) As hereby modified, the Facilities Agreement shall remain in full
force and effect and is hereby ratified, approved and confirmed in all respects.
(c) This Waiver shall be binding upon and shall inure to the benefit of
the Company and the Agents and respective successors and assigns of the Agents.
2
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(d) This Waiver may be executed in any number of counterparts and by the
different parties on separate counterparts, and each such counterpart shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same Waiver.
Delivered at Chicago, Illinois, as of the date and year first above
written.
BOSTON CHICKEN, INC.
By: /s/ Bernadette M. Dennehy
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Title: Vice President
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BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION (as successor by merger to Bank of
America Illinois) as Loan Agent
By: /s/ David A. Johanson
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Title: Vice President
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GENERAL ELECTRIC CAPITAL CORPORATION, as Lease
Agent
By: /s/ Daniel Gioia
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Title: AVP - SEC
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