Exhibit 4.2
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FIFTH AMENDMENT TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS FIFTH AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT is dated as of June 30, 2003 (this "Fifth Amendment"), by and among
XXXXX FARGO FOOTHILL, INC. ("Lender"), assignee of Bank of America, N.A., ELXSI,
a California corporation ("ELXSI"), XXXXXXXX'X HOLDINGS COMPANY, INC., a
Delaware corporation ("Holdings"), and XXXXXXXX'X FAMILY RESTAURANTS, INC., a
Delaware corporation ("Xxxxxxxx'x" and collectively with ELXSI and Holdings, the
"Borrowers").
WITNESSETH:
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WHEREAS, Borrowers and Lender's predecessor in interest entered into
that certain Amended and Restated Loan and Security Agreement, dated as of April
22, 2002, as amended by that certain First Amendment to Amended and Restated
Loan and Security Agreement dated as of August 5, 2002, that certain Second
Amendment to Amended and Restated Loan and Security Agreement dated as of
December 30, 2002, that certain Third Amendment to Amended and Restated Loan and
Security Agreement dated as of January 31, 2003, and that certain Fourth
Amendment to Amended and Restated Loan and Security Agreement dated as of March
31, 2003 (as amended, restated, supplemented or otherwise modified through the
date hereof, the "Loan Agreement");
WHEREAS, on June 18, 0000, Xxxx xx Xxxxxxx, X.X., assigned all of its
right, title and interest in and to the Loan Agreement and Related Agreements
(as defined in the Loan Agreement) and Supplemental Documentation (as defined in
the Loan Agreement) to Lender; and
WHEREAS, Borrowers have requested that the Lender consent to certain
amendments of the Loan Agreement and waive noncompliance with certain covenants,
as more fully set forth herein.
NOW THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:
SECTION 1. Defined Terms. Unless otherwise defined herein, all
capitalized terms used herein have the meanings assigned to such terms in the
Loan Agreement, as amended hereby.
SECTION 2. Amendments. Upon the Fifth Amendment Effective Date (as
hereinafter defined), the Loan Agreement shall be amended as follows:
(a) The last sentence of the definition of "Note" in
Section 1.1 shall be deleted in its entirety and replaced with the
following: "Notwithstanding the terms and provisions of the Notes, each
of the Notes shall be deemed amended hereby to provide for a maturity
date of August 29, 2003.
(b) The following definitions in Section 1.1 shall be
deleted in their entirety and replaced with the following:
"'Business Day' means any day that is not a Saturday, Sunday,
or other day on which national banks are authorized or required to
close in Los Angeles, California,.
"'L/C Draft' means a draft drawn on or pursuant to a Letter of
Credit.
"'Letter of Credit' means (a) a Letter of Credit issued by
Lender or its affiliate on the application of a Borrower and (b) either
of the following letters of credit issued by Bank of America, N.A., on
the application of Borrower, as renewed, extended, increased or
replaced, from time to time:
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L/C Number Issue Date Beneficiary Account Party Face Amount Expiry Date
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C7322207 3/12/97 Insurance Company of ELXSI Corp. $ 526,314.00 6/30/04
North America
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7405732 8/28/01 United State Fire ELXSI Corp. $2,100,000.00 7/1/04
Insurance Company
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TOTAL $2,626,314.00
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"'Reference Rate' means the rate of interest announced within
Xxxxx Fargo Bank, N.A., at its principal office in San Francisco as its
"prime rate", with the understanding that the "prime rate" is one of
Xxxxx Fargo Bank's base rates (not necessarily the lowest of such
rates) and serves as the basis upon which effective rates of interest
are calculated for those loans making reference thereto and is
evidenced by the recording thereof after its announcement in such
internal publication or publications as Xxxxx Fargo Bank may designate.
Any change in the "prime rate" will take effect at the opening of
business on the day specified in the announcement of a change in the
"prime rate."
"'Termination Date' means August 29, 2003.
(c) Section 2.2(a) of the Loan Agreement is hereby
amended and restated in its entirety to read as follows:
"(a) Borrower and Lender acknowledge that two
Letters of Credit are outstanding on the Restatement Date in accordance
with the terms of the Amended and Restated Loan and Security Agreement
dated as of April 22, 2002, between the parties, as amended, and agree
that, from and after the Restatement Date, such Letters of Credit shall
continue to be outstanding pursuant to the terms and conditions of this
Agreement. Borrower agrees to apply to Lender for, and assist Lender
in, the replacement of each Letter of Credit issued by Bank of America,
N.A., with a Letter of Credit issued by Lender or an affiliate of
Lender; provided however, that the Lender understands and agrees that:
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(i) any such Letter of Credit issued by Lender must be substantially
similar to the Letter of Credit it replaces as of the date of
replacement; and (ii) Borrowers cannot assure Lender that the
beneficiaries of existing Letters of Credit will accept replacement
Letters of Credit from Lender.. At the discretion of Lender, on the
application of Borrower, Lender may issue or arrange for the issuance
of Letters of Credit or modify or extend the expiration date of any
Letter of Credit, from time to time, prior to the Termination Date."
(d) Notwithstanding the provisions of Section 5.37 of the
Loan Agreement, Borrowers and Lender agree that the non-refundable,
non-compliance fee of $250,000 that is due and payable on June 30,
2003, shall be reduced by an amount equal to (a) (i) the amount, if
any, of the aggregate principal prepaid on the Additional Term Loan
from the sale proceeds of the property located at 1330 Soldier's Field
Road, Allston (Boston), Suffolk County, Massachusetts, and the property
located at 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxx,
Xxxxxxxxxxxxx, divided by (ii) the sum of (A) the unpaid principal
balance of the Notes plus (B) the aggregate amount of the Letter of
Credit Obligations, in each case determined immediately prior to the
first such prepayment, multiplied by (b) $250,000.
(e) In addition to the commissions payable with respect
to the Letters of Credit in accordance with Section 2.2 of the Loan
Agreement, Borrowers agree, jointly and severally, to pay Lender, on
demand, all charges and fees relating to the Letters of Credit charged
to Lender for the administration of the Letters of Credit by the issuer
thereof. Borrowers further agree, jointly and severally, to pay to
Lender, on demand, all payments made by Lender under or pursuant to or
in connection with any Letter of Credit or L/C Draft.
(f) For purposes of all notices to: (i) Lender under the
Loan Agreement and in accordance with Section 11.8 of the Loan
Agreement, Lender hereby designates its address and facsimile number
set forth on the signature page of this Fifth Amendment; and (ii)
Borrowers under the Loan Agreement and in accordance with Section 11.8
of the Loan Agreement, Borrowers hereby designate their addresses and
facsimile numbers set forth on the signature pages of this Fifth
Amendment.
(g) In addition to the other fees and charges payable by
Borrowers to Lender in accordance with the Loan Agreement, each
Borrower, jointly and severally, agrees to pay or reimburse to Lender
the actual charges paid or incurred by Lender for each audit of the
books and records of Borrowers and the Collateral for the Loans and
each assessment of the Borrowers' business valuation, costs for
background checks, travel expenses, document shipping charges and all
other costs and expenses incurred in connection with the due diligence
conducted by Lender in considering the possible extension of the
maturity date of the Notes or additional amendments to the Loan
Agreement.
SECTION 3. Waivers. On the Fifth Amendment Effective Date, the Lender
agrees as follows:
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(a) Lender waives (i) the Borrowers' noncompliance with
Section 2.1 of Supplement A to the Loan Agreement for the periods
ending April 30, 2003, May 31, 2003, June 30, 2003, and July 31, 2003,
and any Events of Default relating thereto; and (ii) any breaches or
Events of Default under the Loan Agreement occurring prior to the date
hereof relating to that certain (x) Writ of Attachment dated December
3, 2002, issued in the Commonwealth of Massachusetts in the amount of
$580,000 on properties owned by Borrowers and located at 0000 Xxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxx Xxxxxx, Xxxxxxxxxxxxx, 0 Xxxxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxxx Xxxxxx, Xxxxxxxxxxxxx, and the proceeds from the
sale of the property formerly owned by Borrowers located at 000 Xxxxxx
Xxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx Xxxxxx, Xxxxxxxxxxxxx (the "First
Shine Writ of Attachment"), (y) Writ of Attachment dated June 10, 2003,
relating to the property owned by Borrowers at 000 Xxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxx Xxxxxx, Xxxxxxxxxxxxx (the "Second Shine Writ of
Attachment" and together with the First Shine Writ of Attachment, the
"Shine Writs of Attachment") and (z) lawsuit captioned Xxxxx X. Xxxxx
x. Xxxxxxxx'x Family Restaurants, Inc. and ELXSI, MICV2002-04975 (the
"Shine Lawsuit"), as the foregoing are affected by that certain
Agreement, undated, among Xxxxx X. Xxxxx, Xxxxxxxx'x and ELXSI (the
"Settlement Agreement"), pursuant to which Shine agreed to discharge
the First Shine Writ of Attachment when certain conditions are met, and
that certain Escrow Agreement (the "Escrow Agreement"), dated as of
April 10, 2003, among Xxxxx X. Shine, Bickford's, ELXSI and Posternak,
Xxxxxxxxxx & Xxxx, LLP ("Escrow Agent"), pursuant to which the Escrow
Agent is holding proceeds from the sale of the property formerly owned
by the Borrowers located in Marlborough, Middlesex County,
Massachusetts; provided however, that the Lender does not waive any
breach or Events of Default under the Loan Agreement which may occur
after the date hereof as a result of: (A) the attachment of any portion
of the Cues Business or any portion of the Xxxxxxxx'x Business located
outside of the Commonwealth of Massachusetts; (B) a order or judgment
being issued by a court of competent jurisdiction in the Shine Lawsuit;
or (C) the breach by Xxxxxxxx'x or ELXSI of the terms of the Settlement
Agreement or Escrow Agent.
(b) Lender agrees that the quarterly principal payment on
the Term Loan due and payable on June 30, 2003, shall be deferred to
the maturity of the Notes, but the monthly principal payments on the
Additional Term Loan will continue to be due and payable on the last
day of each month. If and when installments of principal on the Term
Loan are required hereafter, the amount of the next such installment
(and only that one installment) required to be paid by Borrowers
relative to such installment shall be reduced by the aggregate fees and
charges paid by Borrower for the audit and assessment and other due
diligence costs referenced in Section 2(g) hereof and the costs, fees
and expenses paid by Borrower in accordance with Section 8 hereof;
provided, that the unpaid principal and maturity of the Term Loan shall
not be affected by such reduction.
(c) Lender agrees that, in accordance with Section
2.4.1(b) of the Loan Agreement, the "Interest Rate Margin" for Term
Loans and Revolving Loans shall be three and one-half percent (3-1/2%)
from and after June 30, 2003, until the Liabilities are indefeasibly
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paid in full, subject to the application of Section 2.4.1(c) if any
Loan or portion thereof is not paid when due.
SECTION 4. Representations, Warranties and Covenants of the Borrowers.
Each of the Borrowers represents and warrants to the Lender, and agrees that:
(a) the representations and warranties contained in the
Loan Agreement (as amended hereby) and the other Related Agreements and
Supplemental Documentation are true and correct in all material
respects at and as of the date hereof as though made on and as of the
date hereof, except (i) to the extent specifically made with regard to
a particular date, (ii) with respect to the Shine Writs of Attachment
and the Shine Lawsuit and (iii) for such changes as are a result of any
act or omission specifically permitted under the Loan Agreement (or
under any Related Agreement), or as otherwise specifically permitted by
the Lender;
(b) on the Fifth Amendment Effective Date (as hereinafter
defined), after giving effect to this Fifth Amendment, no Unmatured
Event of Default or Event of Default will have occurred and be
continuing;
(c) the execution, delivery and performance of this Fifth
Amendment has been duly authorized by all necessary action on the part
of, and duly executed and delivered by the Borrowers, and this Fifth
Amendment is a legal, valid and binding obligation of the Borrowers
enforceable against each Borrower in accordance with its terms, except
as the enforcement thereof may be subject to the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium, or
similar laws affecting creditors' rights generally and general
principles of equity (regardless of whether such enforcement is sought
in a proceeding in equity or at law);
(d) the execution, delivery and performance of this Fifth
Amendment does not conflict with or result in a breach by any Borrower
of any term of any material contract, loan agreement, indenture or
other agreement or instrument to which such Borrower is a party or is
subject; and
(e) ELXSI and Xxxxxxxx'x shall use their best efforts to
arrange for the sending of a notice from ELXSI, Xxxxxxxx'x and Xxxxx X.
Xxxxx to the Escrow Agent directing the Escrow Agent to release the
Escrow Funds (as defined in the Escrow Agreement) held by the Escrow
Agent to Lender when the conditions for such release have been
satisfied, in accordance with the wire transfer instructions provided
by Lender to the Borrowers, for application to the Additional Term Loan
and the Term Loan or, if previously paid in full, to the Revolving
Loans.
SECTION 5. Conditions Precedent to Effectiveness of Fifth Amendment.
This Fifth Amendment shall become effective (the "Fifth Amendment Effective
Date") upon completion of each of the following in form and substance
satisfactory to Lender: (a) execution and delivery of this Fifth Amendment by
Lender, Borrowers and Parent; (b) payment by Borrowers of the fee required by
Section 5.37 of the Loan Agreement, as reduced in accordance with Section 2(d)
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of this Fifth Amendment, if applicable, and (c) delivery by Borrowers of such
other documents as the Lender may reasonably request.
SECTION 6. Breach of this Fifth Amendment. Default in the performance
by any Borrower of any of Borrower's agreements set forth herein and continuance
of such default for three (3) Business Days after notice thereof to Borrower
from Lender shall constitute an Event of Default under the Loan Agreement.
SECTION 7. Execution in Counterparts. This Fifth Amendment may be
executed in counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same instrument.
SECTION 8. Costs and Expenses. The Borrower hereby affirms its
obligation under Section 11.3 of the Loan Agreement to reimburse Lender for all
reasonable costs, internal charges and out-of-pocket expenses paid or incurred
by Lender in connection with the preparation, negotiation, execution and
delivery of this Fifth Amendment, including but not limited to the attorneys'
fees and time charges of attorneys for Lender with respect thereto.
SECTION 9. GOVERNING LAW. THIS FIFTH AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUCTED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
ILLINOIS, WITHOUT REGARD TO THE INTERNAL CONFLICTS OF LAWS PROVISIONS THEREOF.
SECTION 10. Effect of Amendment; Reaffirmation of Loan Documents. The
parties hereto agree and acknowledge that (a) nothing contained in this Fifth
Amendment in any manner or respect limits or terminates any of the provisions of
the Loan Agreement or the other Related Agreements or Supplemental Documentation
other than as expressly set forth herein and (b) the Loan Agreement (as amended
hereby) and each of the other Related Agreements and Supplemental Documentation
remain and continue in full force and effect and are hereby ratified and
reaffirmed in all respects. Upon the effectiveness of this Fifth Amendment, each
reference in the Loan Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of similar import shall mean and be a reference to the Loan
Agreement as amended hereby.
SECTION 11. Headings. Section headings in this Fifth Amendment are
included herein for convenience of any reference only and shall not constitute a
part of this Fifth Amendment for any other purposes.
SECTION 12. Release. EACH BORROWER HEREBY ACKNOWLEDGES THAT AS OF THE
DATE HEREOF IT HAS NO DEFENSE, COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR
DEMAND OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR
ELIMINATE ALL OR ANY PART OF ITS LIABILITY TO REPAY THE LIABILITIES OR TO SEEK
AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM LENDER OR ITS
AFFILIATES, PARTICIPANTS OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, AGENTS,
EMPLOYEES OR ATTORNEYS. EACH BORROWER HEREBY VOLUNTARILY AND KNOWINGLY RELEASES
AND FOREVER DISCHARGES LENDER, AND ITS AFFILIATES AND PARTICIPANTS, AND ITS
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PREDECESSORS, AGENTS, OFFICERS, DIRECTORS, EMPLOYEES, SUCCESSORS AND ASSIGNS,
FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS,
EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR
UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT
LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS
FIFTH AMENDMENT IS EXECUTED, WHICH ANY BORROWER MAY NOW OR HEREAFTER HAVE
AGAINST LENDER, ITS PREDECESSORS, AGENTS, OFFICERS, DIRECTORS, EMPLOYEES,
SUCCESSORS AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS
ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND
ARISING FROM THE LIABILITIES, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE
LOAN AGREEMENT OR RELATED AGREEMENTS, SUPPLEMENTAL DOCUMENTATION OR OTHER LOAN
DOCUMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS FIFTH AMENDMENT. EACH
BORROWER HEREBY COVENANTS AND AGREES NEVER TO INSTITUTE ANY ACTION OR SUIT AT
LAW OR IN EQUITY, NOR INSTITUTE, PROSECUTE, OR IN ANY WAY AID IN THE INSTITUTION
OR PROSECUTION OF ANY CLAIM, ACTION OR CAUSE OF ACTION, RIGHTS TO RECOVER DEBTS
OR DEMANDS OF ANY NATURE AGAINST LENDER, ITS AFFILIATES, AND PARTICIPANTS, AND
THEIR RESPECTIVE SUCCESSORS, AGENTS, ATTORNEYS, OFFICERS, DIRECTORS, EMPLOYEES,
AND PERSONAL AND LEGAL REPRESENTATIVES ARISING ON OR BEFORE THE DATE HEREOF OUT
OF OR RELATED TO LENDERS' ACTIONS, OMISSIONS, STATEMENTS, REQUESTS OR DEMANDS IN
ADMINISTERING, ENFORCING, MONITORING, COLLECTION OR ATTEMPTING TO COLLECT THE
INDEBTEDNESS OF BORROWER TO LENDER, WHICH INDEBTEDNESS WAS EVIDENCED BY THE LOAN
AGREEMENT, RELATED AGREEMENTS, SUPPLEMENTAL DOCUMENTATION AND OTHER LOAN
DOCUMENTS.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amendment
to be executed by their respective officers thereunto duly authorized as of the
date first written above.
ELXSI
By: /s/ XXXXX X. XXXXXXXXX
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Name: Xxxxx X. Xxxxxxxxx
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Title: Vice President
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Address: 0000 Xxx Xxxxx Xxxxxx, Xxxxx X
Xxxxxxx, Xxxxxxx 00000
Attention: President
Facsimile number: 000-000-0000
XXXXXXXX'X HOLDINGS COMPANY, INC.
By: /s/ XXXXX X. XXXXXXXXX
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Name: Xxxxx X. Xxxxxxxxx
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Title: Vice President
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Address: 0000 Xxx Xxxxx Xxxxxx, Xxxxx X
Xxxxxxx, Xxxxxxx 00000
Attention: President
Facsimile number: 000-000-0000
XXXXXXXX'X FAMILY RESTAURANTS, INC.
By: /s/ XXXXX X. XXXXXXXXX
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Name: Xxxxx X. Xxxxxxxxx
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Title: Vice President
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Address: 0000 Xxx Xxxxx Xxxxxx, Xxxxx X
Xxxxxxx, Xxxxxxx 00000
Attention: President
Facsimile number: 000-000-0000
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XXXXX FARGO FOOTHILL, INC.
By: /s/ XXXXXX XXXXXX
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Name: Xxxxxx Xxxxxx
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Title: Vice President
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Address: 0000 Xxxxxxxx Xxxxxx, Xxxxx
0000 Xxxx
Xxxxx Xxxxxx, XX 00000
Attention: Group Credit Manager -
Specialty Finance
Facsimile number: 000-000-0000
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ACKNOWLEDGMENT AND RATIFICATION
The undersigned hereby (i) acknowledges receipt of a copy of the
foregoing Fifth Amendment to Amended and Restated Loan and Security Agreement,
(ii) consents to all of the terms and provisions thereof, (iii) ratifies and
confirms all of the terms and provisions of the Related Agreements to which it
is a party; and (iv) acknowledges and agrees that all references in the Related
Agreements to any loan or credit agreement executed by and between any of the
Borrowers and Lender shall refer without further amendment to the Loan Agreement
as amended by the foregoing Amendment.
ELXSI CORPORATION
By: /s/ XXXXX X. XXXXXXXXX
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Name: Xxxxx X. Xxxxxxxxx
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Title: Vice President
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Address: 0000 Xxx Xxxxx Xxxxxx, Xxxxx X
Xxxxxxx, Xxxxxxx 00000
Attention: President
Facsimile number: 000-000-0000
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