Credit Agreement [Amendment No. 4] - Rubio's Restaurants Inc., Rubio's Restaurants of Nevada Inc. and Fleet National Bank
FOURTH AMENDMENT TO CREDIT AGREEMENT
This FOURTH AMENDMENT TO CREDIT AGREEMENT dated as of December 30, 2001
(this "Amendment"), among RUBIO'S RESTAURANTS, INC AND RUBIO'S RESTAURANTS OF
NEVADA, INC. (collectively the "Borrower") and FLEET NATIONAL BANK formerly
known as BANKBOSTON, N.A., (the "Bank").
WHEREAS, pursuant to the Credit Agreement (as defined below), the Bank
has agreed to make Revolving Credit Loans to the Borrower as provided in the
Credit Agreement (as defined below);
WHEREAS, the Borrower and the Bank wish to revise certain provisions of
the Credit Agreement as provided below amending certain covenants and making
certain other changes to the Credit Agreement.
NOW, THEREFORE, in consideration of the foregoing and the agreements
contained herein, the parties hereby agree as follows:
1) REFERENCE TO CREDIT AGREEMENT.
Reference is made to the Revolving Credit and Term Loan Agreement dated
as of May 13, 1998 (as the same may be amended and restated from time to time,
the "Credit Agreement") between the Borrower and the Bank. Capitalized terms
used herein which are defined in the Credit Agreement have the same meanings
herein as therein, except to the extent that such meanings are amended hereby.
2) AMENDMENTS.
The Borrower and the Bank agree that the Credit Agreement is hereby
amended, effective as of the date hereof, as follows:
a) Section 1.1 of the Credit Agreement is amended by amending the
definition of Consolidated EBITDA to read as follows:
"Consolidated EBITDA" means, for any period, the sum of (a) Consolidated
Net Income of the Borrower and its Subsidiaries, if any, (determined in
accordance with GAAP), plus (b) the consolidated income tax expense and
consolidated Interest Expense of the Borrower and its Subsidiaries, if
any, plus, (c) consolidated depreciation and amortization expenses of
the Borrower and its Subsidiaries, if any, plus (d) other consolidated
non-cash charges of the Borrower and its Subsidiaries and for the fiscal
quarter ending December 2001 the cash reserve items listed on Schedule
EBITDA, if any, minus (e) other consolidated non-cash credits of the
Borrower and its Subsidiaries, if any (provided that all of the
forgoing shall
-1-
<PAGE>
be calculated without reference to any extraordinary and unusual gain
during such period).
b) Section 2.8 (a) of the Credit Agreement is amended in its entirety to
read as follows:
(a) The Borrower agrees to pay to the Bank on the daily average
unused amount of the respective Revolving Credit Commitment, during each
fiscal quarter from and including the Closing Date any unused commitment
fees equal to .50% per annum in each fiscal quarter that EBITDA is less
than $8,000,000 and .375% per annum in each fiscal quarter that EBITDA
is equal or greater than $8,000,000. Accrued commitment fees shall be
payable in arrears on each Quarterly Date commencing on the first such
date occurring after the date hereof. All commitment fees shall be
computed on the basis of a year of 360 days and shall be payable for the
actual number of days elapsed (including the first day but excluding the
last day).
c) Section 5.1 (b) of the Credit Agreement is amended in its entirety to
read as follows:
(b) as soon as available and in any event within 30 days after
the end of each fiscal month of the Borrower statements of income,
retained earnings and cash flows of the Borrower for such period and for
the period from the beginning of the respective fiscal year to the end
of such period and the related balance sheets of the Borrower as at the
end of such period, setting forth in each case in comparative form the
corresponding figures for the corresponding period in the preceding
fiscal year (except that, in the case of balance sheets, such comparison
shall be to the last day of the prior fiscal year) (provided that the
Borrower shall deliver the reports under this Section 5.1 (b) (i) for
each fiscal month in calendar year 2002 and thereafter until EBITDA for
the last twelve months of the Borrower exceeds $8,000,000),
d) Section 6.9 (b) of the Credit Agreement is amended in its entirety to
read as follows:
(b) Revolving Incurrence Test: The Bank shall not advance any
additional Loan during any of the periods set forth below unless
a Senior Officer can certify at the time the Loan is requested
that the Consolidated EBITDA equals or exceeds the following
minimums:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
Period Minimum Consolidated EBITDA
-----------------------------------------------------------------------
<S> <C>
First Fiscal Quarter of Fiscal Year $5,600,000
2001 for the four fiscal quarter
then ended
-----------------------------------------------------------------------
Second Fiscal Quarter of Fiscal $5,900,000
Year 2001 for the four fiscal
quarter then ended
-----------------------------------------------------------------------
Third Fiscal Quarter of Fiscal Year $6,500,000
-----------------------------------------------------------------------
</TABLE>
-2-
<PAGE>
<TABLE>
<S> <C>
-----------------------------------------------------------------------
2001 for the four fiscal
quarters then ended.
-----------------------------------------------------------------------
Fourth Fiscal Quarter of Fiscal $6,400,000
Year 2001 for the four fiscal
quarter then ended
-----------------------------------------------------------------------
First Fiscal Quarter of Fiscal Year $6,500,000
2002 and each Fiscal Quarter thereafter
for the four fiscal quarters
then ended
-----------------------------------------------------------------------
</TABLE>
e) Section 6.9 (e) of the Credit Agreement is amended in its entirety to
read as follows:
(e) Minimum EBITDA. The Borrower shall have minimum Consolidated
EBITDA at the end of each fiscal period as follows:
<TABLE>
<CAPTION>
Fiscal Period Minimum EBITDA
------------- --------------
<S> <C>
Fourth Fiscal Quarter of Fiscal $5,000,000
Year 2000 for the four fiscal
quarters then ended.
First Fiscal Quarter of Fiscal $5,000,000
Year 2001 for the four fiscal
quarters then ended.
Second Fiscal Quarter of Fiscal $5,500,000
Year 2001 for the four fiscal
quarters then ended.
Third Fiscal Quarter of Fiscal $6,500,000
Year 2001 for the four fiscal
quarters then ended. and at the
end of each fiscal quarter
thereafter for the four fiscal
quarters then ended.
Fourth Fiscal Quarter of Fiscal $6,400,000
Year 2001 for the four fiscal
quarters then ended.
First Fiscal Quarter of Fiscal $6,500,000
Year 2002 and each Fiscal
Quarter thereafter for the four
fiscal quarter then ended.
</TABLE>
f) Section 6.9 (f) is added to the Credit Agreement to read as follows:
(f) Application Against Cash Reserve. Borrower may expend no more than
$1,500,000 each fiscal year against the cash reserve created under
Schedule EBITDA and only for expenditures related to reserve items
listed in such Schedule EBITDA as cash reserves.
-3-
<PAGE>
3) AFFIRMATION OF SECURITY AGREEMENTS AND INTELLECTUAL PROPERTY SECURITY
AGREEMENTS.
a) The Borrowers affirm that the Security Agreements (as defined in the
Credit Agreement) remain in full force and effect and secure all of the
Obligations either current or future due to the Bank.
b) The Borrower has delivered this date revised Perfection Certificates
in the form appended hereto as Exhibit A for each of them, which are
true and correct.
c) The Borrowers affirm that the Intellectual Property Security
Agreements (as defined in the Credit Agreement) remain in full force and
effect and secure all of the Obligations either current or future due to
the Bank.
d) The Borrowers have delivered this date revised Schedules for the
Intellectual Property Security Agreement, which are true and correct.
4) NO DEFAULT; REPRESENTATIONS AND WARRANTIES, ETC.
The Borrower hereby confirms that: (a) the representations and
warranties of the Borrower contained the Credit Agreement are true on and as of
the date hereof as if made on such date (except to the extent that such
representations and warranties expressly relate to an earlier date), as modified
by any amendment of Schedules presented herewith; (b) the Borrower is in
compliance in all material respects with all of the terms and provisions set
forth in the Credit Agreement on their part to be observed or performed; and (c)
after giving effect to this Amendment, no Event of Default, nor any event which
with the giving of notice or expiration of any applicable grace period or both
would constitute such an Event of Default, shall have occurred and be
continuing.
5) CONDITIONS TO THIS AMENDMENT.
This Fourth Amendment shall not become effective until the date on which
each of the following conditions is satisfied:
a) Counterparts of Agreement. The Bank shall have received from each
party hereto a counterpart of this Agreement signed on behalf of such.
b) Corporate Matters. The Bank shall have received such documents and
certificates as the Bank may reasonably request relating to the
organization, existence and good standing of the Borrower, the
authorization of the Transactions and any other legal matters relating
-4-
<PAGE>
to the Borrower, this Agreement, the other Loan Documents or the
Transactions, all in form and substance reasonably satisfactory to the
Bank and its counsel.
c) Perfection Certificates. The Borrower has delivered to the Bank
updated Perfection Certificates
d) Fees and Expenses. The Bank shall have received all fees and other
amounts due and payable at or prior to the Closing Date, including, all
out-of-pocket expenses required to be reimbursed or paid by the Borrower
hereunder (including reasonable attorneys' fees and costs).
e) Other Documents. The Bank shall have received such other documents as
the Bank and its counsel shall have reasonably requested.
6) MISCELLANEOUS.
a) Except to the extent specifically amended hereby, the Credit
Agreement, the Loan Documents and all related documents shall remain in
full force and effect. Whenever the terms or sections amended hereby
shall be referred to in the Credit Agreement, Loan Documents or such
other documents (whether directly or by incorporation into other defined
terms), such defined terms shall be deemed to refer to those terms or
sections as amended by this Amendment.
b) This Amendment may be executed in any number of counterparts, each of
which, when executed and delivered, shall be an original, but all
counterparts shall together constitute one instrument.
c) This Amendment shall be governed by the laws of the Commonwealth of
Massachusetts and shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
which shall be deemed to be a sealed instrument as of the date first
above written.
RUBIO'S RESTAURANTS, INC.
By
-------------------------------------
Name: Ralph Rubio
Title: President
-5-
<PAGE>
RUBIO'S RESTAURANTS OF NEVADA, INC.
By
-------------------------------------
Name: Ted Frumkin
Title: President
FLEET NATIONAL BANK
formerly known as BankBoston, N.A.
By
-------------------------------------
Name: Thomas Tansi
Title: Director
-6-
<PAGE>
SCHEDULE EBITDA
MARKET RATIONALIZATION PROJECT
ONE TIME RESERVE DETAIL
AMTS IN 000'S
<TABLE>
<CAPTION>
ONE TIME BOOKED
RESERVE IN
-------- ------
<S> <C> <C>
- FAS121 writedown $ (3,219) Q3
- Writedown Las Vegas in order to franchise (838) Q3
- Writedown Salt Lake in order to franchise (323) Q3
- Writedown Tucson in order to franchise (884) Q3
- Writedown Denver in order to franchise (1,046) Q3
ONE TIME CHARGE IN THIRD QUARTER $ (6,310)
=========
- Close 11 stores in November (3,171) Q4
- Close additional 4 stores in next 12 months (1,259) Q4
- Store Closure Severance (171) Q4
- Reduction-in-force Severance (151) Q4
- Franchise Transfer Retention payment (187) Q4
- Reserve for Signage Change (13 stores at $10K
each) (130) Q4
- Reserve for Franchise Broker Fees (80) Q4
- Aurora lease termination (150) Q4
- Legal costs (48) Q4
- Deferred Rent reversal 267 Q4
- Employee travel to close markets & other support (35) Q4
ESTIMATED ONE TIME CHARGE IN FOURTH QUARTER $ (5,114)
=========
TOTAL $ (11,424)
=========
</TABLE>
-7-