THIRD AMENDMENT TO LOAN AGREEMENT
Exhibit
10.1
THIRD
AMENDMENT TO LOAN AGREEMENT
This Third Amendment to Loan Agreement
(“Amendment”) is dated as of October 31, 2008, by and among X. XXXXXXXXX’X CORPORATION, X.
XXXXXXXXX’X RESTAURANTS, INC., both Tennessee corporations (collectively
referred to as the “Borrower”), and BANK OF AMERICA, N.A., a
national banking association (“Lender”).
W
I T N E S S E T H
WHEREAS, Borrower and Lender
entered into that certain Loan Agreement dated May 12, 2003, as amended by that
certain First Amendment to Loan Agreement dated January 20, 2004, as amended by
that certain Second Amendment to Loan Agreement dated September 20, 2006 (the
“Loan Agreement”); and
WHEREAS, Borrower has
requested and Lender has agreed to amend the Loan Agreement as set forth
herein.
NOW, THEREFORE, as an
inducement to cause Lender to extend credit to Borrower, and for other valuable
consideration, the receipt and sufficiency of which are acknowledged, it is
agreed as follows:
1. Capitalized
terms not defined herein shall have the meaning contained in the Loan
Agreement.
2. Section
1(b) of the Loan Agreement is hereby deleted in its entirety and in lieu thereof
shall read as follows:
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“(b)
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“Applicable
Margin” means for any Fiscal Quarter the applicable rate per annum in
excess of the LIBOR Fixed Rate set forth in the table
below:
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LEVEL
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Ratio of Adjusted Debt to
EBITDAR
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Applicable Margin
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Unused Commitment Fee %
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I
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Less
than or equal to 2.50
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2.25%
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0.25%
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II
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Less
than or equal to 3.00 but greater than 2.50
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2.75%
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0.50%
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III
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Less
than or equal to 4.00 but greater than 3.00
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3.25%
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0.50%
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IV
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Greater
than 4.00
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3.75%
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0.75%
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3. Section
1(d) of the Loan Agreement is hereby deleted in its entirety and in lieu thereof
shall read as follows:
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“(d)
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“Base
Rate” means the LIBOR Fixed Rate plus the Applicable
Margin. For purposes hereof, the Applicable Margin will be that
shown as Level II in the table contained in the definition of Applicable
Margin for the period from October 17, 2008 until delivery by Borrower of
the quarterly financial statements of the Borrower in accordance with
Section 17(b) for the Fiscal Quarter ending September 28,
2008. Upon receipt of the Borrower’s quarterly financial
statements for such Fiscal Quarter, Lender shall determine if the results
of such financial statements justify resetting the Applicable Margin to
another Level, and if so, then the Applicable Margin shall be
retroactively adjusted as of the first day of the then Fiscal Quarter to
Level I, II, III, or IV, as applicable, and shall continue to the last day
of such Fiscal Quarter. This will continue each Fiscal Quarter
thereafter. If Borrower fails to deliver the quarterly
financial statements in accordance with time limits set forth in Section
17(b), the Applicable Margin shall be retroactively adjusted as of the
first day of the then Fiscal Quarter to Level
III.”
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4. Effective
September 28, 2008, Section 34(a) of the Loan Agreement is hereby deleted in its
entirety and in lieu thereof shall read as follows:
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“(a)
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Fixed Charge Coverage
Ratio. The Fixed Charge Coverage Ratio measured at the
end of each fiscal quarter computed on a trailing four quarters basis
shall be at least 1.50 to 1.00. For purposes hereof, the Fixed
Charge Coverage Ratio is defined as: (Net Income (excluding the effect of
any extraordinary or non-recurring gains or losses) plus depreciation and
amortization plus interest expense plus rent payments plus non-cash FASB
123R items, i.e.,
stock based compensation plus changes in the valuation allowance for
deferred tax assets, minus the greater of i) total store maintenance
capital expenditures (excluding major remodeling or image enhancements),
or ii) the total number of Borrower’s stores operating for at least 18
months multiplied by $40,000.00) divided by
(interest expense plus rent payments plus current maturities of long term
debt plus current maturities of capital leases, plus an amount equal to
the aggregate value of all stock redemptions during the applicable
period).”
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5. Effective
September 28, 2008, Section 34(b) of the Loan Agreement is hereby deleted in its
entirety and in lieu thereof shall read as follows:
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“(b)
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Maximum Adjusted Debt
to EBITDAR Ratio. The Maximum Adjusted Debt to EBITDAR
Ratio measured at the end of each fiscal quarter computed on a trailing
four quarters basis shall be less than 4.50 to 1.00 through March 29, 2009
and 3.50 to 1.00 at the end of each fiscal quarter
thereafter. For purposes hereof, the Maximum Adjusted Debt to
EBITDAR Ratio is defined as the ratio of (i) total Funded Debt minus
Invested Funds plus (rent payments multiplied by 8), to (ii)
EBITDAR. For purposes hereof, Invested Funds is defined as
short term, liquid investments such as money markets with maturities less
than one year in length, and cash and cash equivalents; provided that
investments into any joint venture or any endeavor not consistent with the
Borrower’s core restaurant operating business without the written consent
of Lender shall be specifically excluded. For purposes hereof,
EBITDAR is defined as the sum of Net Income for such period (excluding the
effect of any extraordinary or non-recurring gains or losses) plus an
amount which, in the determination of Net Income for such period has been
deducted for (i) interest expense for such period; (ii) total
federal, state, foreign or other income taxes for such period; (iii) all
depreciation and amortization for such period; (iv) rent payments; and (v)
non-cash FASB 123R items, i.e., stock based
compensation, all as determined in accordance with
GAAP.”
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6. Collateral, Security
Interest & Liens. Borrower hereby acknowledges that the
Revolving Loan is secured by the Lender’s security interest and liens in certain
real property located in Lyndhurst, Ohio and Northbrook, Illinois, as evidenced
by that certain Open End Mortgage Deed, Security Agreement and Assignment of
Rents and Leases made by X. Xxxxxxxxx’x Corporation in favor of Lender dated May
12, 2003 and of record as instrument no. 200305230500, Cuyahoga County, Ohio
Recorder’s Office; and that certain Mortgage dated May 12, 2003 made by X.
Xxxxxxxxx’x Restaurants, Inc. in favor of Lender and of record as Instrument Xx.
0000000000, Xxxx Xxxxxx, Xxxxxxxx, Recorder of Deeds, both as
amended. Furthermore, Borrower has executed in favor of Lender those
certain Negative Pledge Agreements whereby Borrower has agreed to refrain from
granting a security interest or lien in certain real property owned by Borrower
as more particularly set forth therein.
7. Representations &
Warranties; Waiver & Release. When the Borrower signs this
Amendment, the Borrower represents and warrants to the Lender that after giving
effect to this Amendment: (a) there is no event which is, or with
notice or lapse of time or both would be, a default under the Loan Documents
except those events, if any, that have been disclosed in writing to the Lender
or waived in writing by the Lender, (b) the representations and warranties in
the Loan Agreement are true as of the date of this Amendment as if made on the
date of this Amendment (except with regard to matters expressed only as of a
specific time or which have been supplemented or superseded by disclosures to
Lender in writing), (c) this Amendment does not conflict with any law,
agreement, or obligation by which the Borrower is bound, and (d) this Amendment
is within the Borrower's powers, has been duly authorized, and does not conflict
with any of the Borrower's organizational papers. Borrower further
acknowledges that Borrower’s obligations evidenced by the Loan Documents are not
subject to any counterclaim, defense or right of set-off and Borrower does
hereby release Lender from any claim, known or unknown, that Borrower may have
against Lender as of the execution of this Amendment.
8. Conditions. This
Amendment will be effective when the Lender receives the following items, in
form and content acceptable to the Lender:
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(a)
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If
the Borrower or any guarantor is anything other than a natural person,
evidence that the execution, delivery and performance by the Borrower
and/or such guarantor of this Amendment and any instrument or agreement
required under this Amendment have been duly
authorized.
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(b)
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Payment
by the Borrower of a loan modification fee in the amount of Fifteen
Thousand Dollars
($15,000.00).
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(c)
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Payment
by the Borrower of all costs, expenses and attorneys' fees (including
allocated costs for in-house legal services) incurred by the Lender in
connection with this Amendment.
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9. Effect of
Amendment. Except as provided in this Amendment, all of the
terms and conditions of the Loan Agreement shall remain in full force and
effect. The validity, construction and enforcement hereof shall be
determined according to the substantive laws of the State of
Tennessee.
10. Counterparts. This
Amendment may be executed in counterparts, each of which when so executed shall
be deemed an original, but all such counterparts together shall constitute but
one and the same instrument.
11. FINAL
AGREEMENT. BY
SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT: (A) THIS
DOCUMENT REPRESENTS THE FINAL AGREEMENT BETWEEN PARTIES WITH RESPECT TO THE
SUBJECT MATTER HEREOF, (B) THIS DOCUMENT SUPERSEDES ANY COMMITMENT LETTER, TERM
SHEET OR OTHER WRITTEN OUTLINE OF TERMS AND CONDITIONS RELATING TO THE SUBJECT
MATTER HEREOF, UNLESS SUCH COMMITMENT LETTER, TERM SHEET OR OTHER WRITTEN
OUTLINE OF TERMS AND CONDITIONS EXPRESSLY PROVIDES TO THE CONTRARY, (C) THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (D) THIS DOCUMENT MAY
NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.
IN WITNESS WHEREOF, the parties have
executed this Amendment to be effective the day and year first above written
(except as otherwise set forth herein).
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BANK
OF AMERICA, N.A.
By:
/s/ Xxxxxxx X.
Xxxxx
Title:
Senior Vice President
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X.
XXXXXXXXX’X CORPORATION
By:
/s/ R. Xxxxxxx
Xxxxx
Title:
Vice President and Chief Financial Officer
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X.
XXXXXXXXX’X RESTAURANTS, INC.
By:
/s/ R. Xxxxxxx
Xxxxx
Title:
Vice President
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