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EXHIBIT 10.10
ASSUMPTION AND SECOND AMENDMENT TO
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
THIS ASSUMPTION AND SECOND AMENDMENT (this "AMENDMENT") made this 8th
day of December, 1999, is by and among O'CHARLEY'S INC., a Tennessee corporation
("ORIGINAL BORROWER"), OCI, INC., a Delaware corporation ("OCI"), O'CHARLEY'S
SPORTS BAR, INC., an Alabama corporation ("SPORTS BAR"), AIR TRAVEL SERVICES,
INC., a Tennessee corporation ("AIR TRAVEL"), O'CHARLEY'S MANAGEMENT COMPANY,
INC., a Tennessee corporation ("MANAGEMENT COMPANY"), DFI, INC., a Tennessee
corporation ("DFI"), O'CHARLEY'S RESTAURANT PROPERTIES, LLC, a Delaware limited
liability company, ("RESTAURANT PROPERTIES"; individually, OCI, Sports Bar, Air
Travel, Management Company, DFI and Restaurant Properties are sometimes referred
to herein as an "ADDITIONAL BORROWER" and when referencing two or more of such
entities, they are sometimes referred to herein as "ADDITIONAL BORROWERS");
O'Charley's Service Company, Inc., a Tennessee corporation ("NEW BORROWER"), the
Original Borrower, the Additional Borrowers and the New Borrower are sometimes
referred to herein, individually and collectively, as a "BORROWER" and the
"Borrowers"), each of the undersigned Banks, BANK OF AMERICA, N.A., a national
banking association, successor by merger to NationsBank, N.A., as a Bank and as
Co-Agent, and FIRST AMERICAN NATIONAL BANK, a national banking association
("AGENT") as a Bank and as Agent for the Banks.
RECITALS:
Pursuant to that certain Amended and Restated Revolving Credit and
Security Agreement, dated as of December 8, 1997, as amended by that certain
Assumption Agreement and Amendment to Amended and Restated Revolving Credit
Agreement dated December 7, 1998 (as amended, the "AGREEMENT"), the Banks and
Bank One, N.A. ("BANK ONE") made certain loans to the Original Borrower and the
Additional Borrowers. Capitalized terms not otherwise defined herein shall have
the same meaning as in the Agreement. The Original Borrower and the Additional
Borrowers have requested that the Banks restructure such loans to add the New
Borrower as a Borrower under the credit facility governed by the Agreement, to
increase the Commitment of several of the Banks in order to pay in full the
amounts owing to Bank One under the Loan Documents and to extend the Loan
Termination Date of Facility A and Facility B and the Swingline Facility, and
the Banks are willing to do so, subject, among other things, to execution of
this Agreement which includes, among other things, amendments to certain terms
of the Loan and to add an additional financial covenant.
NOW, THEREFORE, in consideration of the foregoing premises, and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. The New Borrower hereby joins in and assumes each of the
obligations, covenants and conditions set forth in the Agreement, as hereby
amended, and agrees to be bound by all of the terms thereof and further assumes
and agrees to pay, jointly and severally with the Original Borrower and the
Additional Borrowers, the indebtedness evidenced by the Notes and other
Obligations.
2. Section 1 of the Agreement entitled "DEFINITIONS" is hereby
amended by adding or amending the following definitions:
"Adjusted Fund Debt" means the Borrower's Funded Debt plus
eight (8) times the applicable Operating Lease Expense.
"Adjusted Funded Debt to EBITDAR Ratio" means Borrower's
Adjusted Funded Debt divided by EBITDAR.
"Borrowers" or "Borrower" means O'Charley's Inc., OCI, Inc.,
O'Charley's Sports Bar, Inc., Air Travel Services, Inc., DFI, Inc.,
O'Charley's Restaurant Properties, LLC and O'Charley's Service Company,
Inc., individually and/or collectively.
"Co-Agent" means Bank of America, N.A., successor by merger to
NationsBank of Tennessee, N.A.
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"EBITDAR" means net earnings before interest expense, taxes,
depreciation, amortization expense and Rental Expense, less any
extraordinary income generated from nonrecurring events or from events
not directly related to restaurant operations.
"Loan Termination Date" means the earlier of (i) the
occurrence of an Event of Default which is not waived by the Agent in
accordance with the terms of this Agreement, or (ii) (A) November 30,
2002, in the case of Facility A, (B) December 6, 2000, in the case of
Facility B (or such later date as may be agreed to by the Banks
pursuant to Section 2.9 of this Agreement), or (C) November 30, 2002,
in the case of the Swingline Facility.
"Note" means any of the promissory note or notes dated
December 9, 1997 and dated December 8, 1999, as applicable, and
delivered to the Banks in connection with the execution of the
Agreement and the Swingline Note, including any amendment,
modification, renewal, extension, or replacement thereof, and "Notes"
means the Notes of each of the Banks collectively.
3. The last sentence of section 2.1(A) of the Agreement is
hereby amended in its entirety to read as follows:
The maximum Commitment of each of the Banks and its respective
percentage of the Total Commitments (the "COMMITMENT PERCENTAGE") of
each Bank are as follows:
Bank Commitment Amount Commitment Percentage
---- ----------------- ---------------------
Facility A Facility B
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First American National
Bank 22,750,000 9,750,000 32.5%
Bank of America, N.A. 22,750,000 9,750,000 32.5%
Mercantile Bank
National Association 10,500,000 4,500,000 15%
First Union National
Bank 14,000,000 6,000,000 20%
4. The first sentence of Section 2.1(B) of the Agreement is
hereby amended in its entirety as follows:
The Loans shall be evidenced by (i) the $22,750,000 Note of Borrower to
First American National Bank for Facility A and the $9,750,000 Note of
Borrower to First American National Bank for Facility B, (ii) the
$22,750,000 Note of Borrower to Bank of America, N.A. for Facility A
and the $9,750,000 Note of Borrower to Bank of America, N.A. for
Facility B, (iii) the $10,500,000 Note of Borrower to Mercantile Bank
National Association for Facility A and the $4,500,000 Note of Borrower
to Mercantile Bank National Association for Facility B, and (iv) the
$14,000,000 Note of Borrower to First Union National Bank for Facility
A and the $6,000,000 Note of Borrower to First Union National Bank for
Facility B, which Notes are substantially in the form of Exhibit D-1
attached hereto, with each Note payable in accordance with its terms.
5. The first sentence of Section 2.2(A) of the Agreement is
hereby amended in its entirety to read as follows:
The Borrower shall give the Agent irrevocable notice (a "BORROWING
NOTICE") not later than 10:00 a.m., Nashville time one (1) Business Day
prior to any requested disbursement of Loans (other than Eurodollar
Loans), or 1:00 p.m. Nashville time three (3) Business Days prior to
any requested disbursement of a Eurodollar Loan.
6. The Agreement is hereby amended by adding the following
Section 2.14 and Section 2.15 immediately following Section 2.13 contained
therein:
Section 2.14. Funding Losses.
Borrowers shall compensate each Bank, upon its written request
to Borrowers (which request shall set forth the basis for requesting
such amounts in reasonable detail and which request shall be made in
good
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faith and, absent manifest error, shall be final, conclusive and
binding upon all of the parties hereto), for all actual losses,
expenses and liabilities (including, without limitation, any interest
paid by such Bank to lenders of funds borrowed by it to make or carry
its Eurodollar Loans to the extent not recovered by such Bank in
connection with the re-employment of such funds but excluding loss of
anticipated profits), which the Bank may sustain: (i) if for any reason
(other than a default by such Bank) a borrowing of, or conversion to or
continuation of, Eurodollar Loans to Borrowers does not occur on the
date specified therefor in a Borrowing Notice, any notice of conversion
or notice of continuation to a Eurodollar Loan (whether or not
withdrawn), (ii) if any repayment (including mandatory prepayments and
any conversions) of any Eurodollar Loans to Borrowers occurs on a date
which is not the last day of a Eurodollar Interest Period applicable
thereto, or (iii) if, for any reason, Borrowers default in their
obligation to repay their Eurodollar Loans when required by the terms
of this Agreement.
Section 2.15. Assumptions Concerning Funding of Eurodollar
Loans.
Calculation of all amounts payable to a Bank under this
Article 2 shall be made as though that Bank had actually funded its
relevant Eurodollar Loans through the purchase of deposits in the
relevant market bearing interest at the rate applicable to such
Eurodollar Loans in an amount equal to the amount of the Eurodollar
Loans and having a maturity comparable to the relevant Eurodollar
Interest Period and through the transfer of such Eurodollar Loans from
an offshore office of that Bank to a domestic office of that Bank in
the United States of America; provided, however that each Bank may fund
each of its Eurodollar Loans in any manner it sees fit and the
foregoing assumption shall be used only for calculation of amounts
payable under this Article 2.
7. The second sentence of Section 2.4(A) is hereby deleted in its
entirety.
8. Subsection (R) of Section 4.1 of the Agreement is hereby
amended in its entirety to read as follows:
(R) O'Charley's Inc. owns 100% of the issued and outstanding
stock of OCI, Inc., O'Charley's Sports Bar, Inc., Air Travel Services,
Inc., O'Charley's Management Company, Inc., DFI, Inc. and O'Charley's
Service Company, Inc. and DFI, Inc. owns 100% of the outstanding
membership interests of O'Charley's Restaurant Properties, LLC. Except
as set forth in the preceding sentence, none of the Borrowers owns an
interest in any Person.
9. Subsection (F) of Section 5.1 of the Agreement is hereby
amended in its entirety to read as follows:
(F) The Borrower will maintain:
(1) a Fixed Charge Coverage Ratio of greater than 2.25 to 1,
calculated quarterly on a rolling four (4) quarter basis.
(2) an Adjusted Debt to Capitalization Ratio of less than or
equal to 59% at all times.
(3) a Funded Debt to EBITDA Ratio of less than 2.50 to 1,
calculated quarterly with EBITDA computed on a rolling four (4) quarter
basis.
(4) an Adjusted Funded Debt to EBITDAR Ratio of less than 3.25
to 1, calculated quarterly with EBITDAR computed on a rolling four (4)
quarter basis.
All financial covenants shall be tested on a consolidated basis and
calculated in accordance with GAAP, except as otherwise noted.
10. Subsection (N) of Section 5.1 of the Agreement is hereby
amended in its entirety to read as follows:
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(N) On or before January 31, 2000, the Borrowers will deliver
to Agent a Certificate of Existence issued by the Tennessee Secretary
of State evidencing that all fees, taxes and penalties owed to the
State of Tennessee and affecting the existence of the Original Borrower
have been paid.
11. Section 6.1(C) of the Agreement is hereby amended by deleting
the reference to Section 5.1(M) contained therein and substituting in lieu
thereof the reference to Section 5.1(K).
12. The first sentence of Section 7.1 of the Agreement is hereby
amended in its entirety to read as follows:
With respect to all funds advanced hereunder or under the Notes, First
American National Bank, Bank of America, N.A., Mercantile Bank National
Association, and First Union National Bank shall be obligated to
advance, in the aggregate under Facilities A and B, $32,500,000;
$32,500,000, $15,000,000, and $20,000,000, respectively, and each such
Bank shall own a corresponding undivided interest in this Agreement.
13. Section 8.5 of the Agreement is hereby amended in its entirety
read as follows:
Section 8.5. Notices.
Any notices or consents required or permitted by this
Agreement shall be in writing and shall be deemed delivered in person,
or when sent by certified mail, postage prepaid, return receipt
requested or by overnight courier service, to the address as follows,
unless such address is changed by written notice hereunder:
(A) If to the Borrower:
O'Charley's Inc.
X.X. Xxx 000000
Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxxx, Chief Financial Officer
cc: J. Page Davidson, Esq.
Xxxxx Xxxxxxx, Esq.
Bass, Xxxxx & Xxxx, PLC
First American Center
Xxxxxxxxx, XX 00000
(B) If to the Agent:
First American National Bank
First American Center
Nashville, TN 37237-0202
Attn: Xxxx Xxxxxxx, Xx. Vice President
cc: Xxxxxxx X. Xxxxxxx, Esq.
Xxxxxx, Xxxxxxxx & Xxxxxxx, PLC
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
(C) If to Co-Agent:
Bank of America, N.A.
One Bank of America Plaza
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxx
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(D) If to the Banks:
First American National Bank
First American Center
Nashville, TN 37237-0202
Attn: Xxx Xxxxxxx, Xx. Vice President
Bank of America, N.A.
One Bank of America Plaza
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxx
Mercantile Bank National Association
One Mercantile Center, Tram 12-3
000 Xxxxxx Xxxxxx
Xx. Xxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx, Assistant Vice President
First Union National Bank
000 Xxxxx Xxxxxxx Xxxxxx, XX-00
Xxxxxxxxx, XX 00000-0000
Attn: Xxxx X. Xxxxxxx, Vice President
14. The first sentence of the second paragraph of Section 8.8 of
the Agreement is hereby amended in its entirety to read as follows:
Notwithstanding any other provision of this Agreement, the
Borrower understands that any Bank may at any time enter into
participation agreements with one or more participating financial
institutions whereby such Bank will allocate certain percentages of its
outstanding Loans and/or Commitment to such financial institution or
financial institutions.
15. All references to "NationsBank, N.A." or "NationsBank of Tennessee,
N.A." in the Agreement are amended to read "Bank of America, N.A."
16. All references to Bank One, N.A. in the Agreement are hereby
deleted.
17. Fees. In connection with the increased Commitments of the Banks in
connection with Facility A and Facility B and the extension of Facility B, the
Borrowers agree to pay to First American National Bank, Bank of America, N.A.,
Mercantile Bank National Association and First Union National Bank a fee in the
amount of $35,000 for Facility A and $30,000 for Facility B, each to be
apportioned among the Banks in accordance with their respective Commitment
Percentages. In addition, the Borrowers agree to pay all reasonable
out-of-pocket fees of the Agent incurred in connection with this Amendment,
including, without limitation, reasonable attorneys' fees and expenses.
18. Ratification. Subject to the terms hereof, each Borrower hereby
restates and ratifies, as of the date hereof, all the representations,
warranties and covenants contained in the Agreement in favor of Agent and Banks,
and confirms that the terms and conditions of the Agreement, as amended hereby,
remain in full force and effect and that the terms of Article 8 of the
Agreement, as hereby amended, shall continue to govern the Agreement and shall
govern this Amendment.
[Signature Pages to Follow]
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IN WITNESS WHEREOF, the parties hereby have duly executed this
Agreement as of the day and year first above written.
AGENT: BORROWER:
FIRST AMERICAN NATIONAL BANK O'CHARLEY'S INC.
By: By:
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Title: Title:
--------------------------- -----------------------------
CO-AGENT: OCI, INC.
BANK OF AMERICA, N.A. By:
--------------------------------
By: Title:
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Title:
--------------------------- O'CHARLEY'S SPORTS BAR, INC.
By:
--------------------------------
Title:
-----------------------------
AIR TRAVEL SERVICES, INC.
By:
--------------------------------
Title:
-----------------------------
O'CHARLEY'S MANAGEMENT
COMPANY, INC.
By:
--------------------------------
Title:
-----------------------------
DFI, INC.
By:
--------------------------------
Title:
-----------------------------
O'CHARLEY'S RESTAURANT
PROPERTIES, LLC
By:
--------------------------------
Title:
-----------------------------
O'CHARLEY'S SERVICE COMPANY, INC.
By:
--------------------------------
Title:
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BANKS:
FIRST AMERICAN NATIONAL BANK
By:
---------------------------------
Title:
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BANK OF AMERICA, N.A.
By:
---------------------------------
Title:
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MERCANTILE BANK NATIONAL
ASSOCIATION
By:
---------------------------------
Title:
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FIRST UNION NATIONAL BANK
By:
---------------------------------
Title:
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