SECOND AMENDMENT AGREEMENT
dated as of May 7, 1997
among
DAKA INTERNATIONAL, INC.
SUBSIDIARY GUARANTORS
THE BANKS SIGNATORY HERETO
and
THE CHASE MANHATTAN BANK
as Agent
SECOND AMENDMENT AGREEMENT
SECOND AMENDMENT AGREEMENT (this "Agreement") dated as of May 7, 1997
among DAKA INTERNATIONAL, INC., a corporation organized under the laws of
Delaware (the "Borrower"); each of the Subsidiaries of the Borrower which is a
signatory hereto (collectively the "Subsidiary Guarantors" and, together with
the Borrower, the "Obligors"); each of the banks which is a signatory hereto
(collectively the "Banks"); and THE CHASE MANHATTAN BANK, a bank organized under
the laws of New York, as agent for the Banks (in such capacity, together with
its successors in such capacity, the "Agent").
WHEREAS, the Borrower, the Subsidiary Guarantors, the Banks and the
Agent have entered into that certain Third Amended and Restated Credit Agreement
dated as of October 15, 1996 (as amended by that certain First Amendment
Agreement dated as of February 7, 1997 (the "First Amendment Agreement"), as
further amended by that certain side letter dated February 20, 1997 and as in
effect prior to the effectiveness of this Agreement, the "Existing Credit
Agreement," and, as amended by this Agreement, the "Amended Credit Agreement")
pursuant to which the Banks have extended credit to the Obligors evidenced by
certain Promissory Notes dated October 15, 1996 issued by the Borrower and
guarantied by the Subsidiary Guarantors;
WHEREAS, the Borrower, the Subsidiary Guarantors, the Banks and the
Agent have agreed to enter into this Agreement to provide for, among other
things, the modification of certain covenants and definitions contained in the
Existing Credit Agreement; and
WHEREAS, the Facility Documents, as amended and supplemented by this
Agreement (including, without limitation, this Agreement and the Amended Credit
Agreement) and as each may be amended or supplemented from time to time, are
referred to herein as the "Amended Facility Documents".
NOW THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1. AMENDMENTS TO EXISTING AGREEMENTS.
Section 1.01. Amendments to Existing Credit Agreement. Each of the
Obligors and, subject to the satisfaction of the conditions set forth in Article
3, the Agent and the Banks hereby consents and agrees to the amendments to the
Existing Credit Agreement set forth below:
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(a) The definition of "Letter of Credit Availability" in
Section 1.01 of the Existing Credit Agreement is hereby amended to substitute
"$3,023,387" in place of "$5,000,000".
(b) The definition of "Termination Date" in Section 1.01 of
the Existing Credit Agreement is hereby amended to substitute "April 2, 1998" in
place of "January 2, 1998".
(c) Section 2.01(a) of the Existing Credit Agreement is hereby
amended to add ", (vii) $5,000,000 on January 31, 1998, (viii) $5,000,000 on
February 28, 1998 and (ix) $7,500,000 on March 31, 1998" immediately subsequent
to "December 31, 1997" in the second sentence thereof.
(d) Section 8.04(a) of the Existing Credit Agreement is hereby
amended to add "and, on or after January 1, 1998, three additional 'Champps'
restaurants" immediately subsequent to "Schedule V".
(e) Section 8.15 of the Existing Credit Agreement is hereby
amended (i) to add "or (v) if such fiscal quarter ends on March 28, 1998,
$3,000,000" immediately subsequent to "$2,800,000" in subsection (a) thereof;
and (ii) to add "; and (c) during the fiscal period from March 29, 1997 through
March 28, 1998 would exceed $14,032,000" immediately subsequent to
"$20,000,000".
(f) Section 8.16(c) of the Existing Credit Agreement is hereby
amended to add "and, on or after January 1, 1998, three additional 'Champps'
restaurants" immediately subsequent to "Detroit, Michigan".
(g) Section 9.01(a) of the Existing Credit Agreement is hereby
amended to add "or (v) if such fiscal quarter ends on March 28, 1998, $500,000"
immediately subsequent to "$0".
(h) Section 9.02 of the Existing Credit Agreement is hereby
amended (i) to delete "January, February, March" in subsection (a) thereof; and
(ii) to add "January, February, March, " immediately prior to "June" in
subsection (b) thereof.
(i) Section 9.04 of the Existing Credit Agreement is hereby
amended to add "or (e) if such fiscal quarter ends on March 28, 1998, 1.00 to
1.00" immediately subsequent to ".90 to 1.00".
(j) Section 9.05 of the Existing Credit Agreement is hereby
amended (i) to add "or (v) if such fiscal quarter ends on March 28, 1998, 2.47
to 1.00" immediately subsequent to "2.33 to 1.00" in subsection (a) thereof;
(ii) to substitute
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"(.39)" in place of "(.24)", "(.20)" in place of "(.09)" and ".49" in place of
".57" in subsection (b) thereof; and (iii) to add "; and (c) for the fiscal
period from March 29, 1997 through March 28, 1998 shall be not less than 1.05 to
1.00" immediately subsequent to ".57 to 1.00".
(k) Schedules I-IV of the Existing Credit Agreement are
hereby amended and restated as set forth in Schedules I-IV hereto.
Section 1.02. Amendments to First Amendment Agreement. Each of the
Obligors and, subject to the satisfaction of the conditions set forth in Article
3, the Agent and the Banks hereby consents and agrees to the amendments to the
First Amendment Agreement set forth below:
(a) Section 5.01 of the First Amendment Agreement is hereby
amended to substitute "establish by May 30, 1997" in place of "take all
necessary actions to establish within 60 days, and agrees to establish within 90
days, of the Effective Date" in the second sentence thereof.
(b) Section 5.03 of the First Amendment Agreement is hereby
amended to add "or, if not financed in accordance with the terms hereof prior to
February 15, 1998, on or after February 15, 1998" immediately subsequent to
"Event of Default" in the last sentence thereof.
Section 1.03. Amendments to Security Agreement. Each of the Obligors
and, subject to the satisfaction of the conditions set forth in Article 3, the
Agent and the Banks hereby consents and agrees that Schedule A to the Security
Agreement is hereby amended and restated as set forth in Schedule V hereto.
Section 1.04. Amendments to Pledge Agreement. Each of the Obligors and,
subject to the satisfaction of the conditions set forth in Article 3, the Agent
and the Banks hereby consents and agrees that Schedule A to the Pledge Agreement
is hereby amended and restated as set forth in Schedule VI hereto.
ARTICLE 2. REPRESENTATIONS AND WARRANTIES.
Each of the Obligors hereby represents and warrants that as of the
Effective Date:
Section 2.01. Existing Representations and Warranties. Each of the
representations and warranties contained in Article 6 of the Existing Credit
Agreement, in Article 3 of the Security Agreement, in Article 3 of the Trademark
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Security Agreement and in Article 3 of the Pledge Agreement are true and correct
as of the Effective Date.
Section 2.02. No Defaults. No event has occurred and no condition
exists which would constitute a Default or an Event of Default under the
Facility Documents, and no event has occurred and no condition exists which
would constitute a Default or an Event of Default under the Amended Facility
Documents.
Section 2.03. Corporate Power and Authority; No Conflicts. The
execution, delivery and performance by each of the Obligors of the Amended
Facility Documents to which it is a party have been duly authorized by all
necessary corporate, partnership or limited liability company action and do not
and will not: (a) require any consent or approval of its stockholders, partners
or members; (b) contravene its organizational documents; (c) violate any
provision of, or require any filing (other than the filing of the financing
statements contemplated by the Security Agreement and the filing of the
Mortgages and the Trademark Security Agreement), registration, consent or
approval under, any law, rule, regulation (including, without limitation,
Regulation U), order, writ, judgment, injunction, decree, determination or award
presently in effect having applicability to any Consolidated Entity; (d) result
in a breach of or constitute a default or require any consent under any
indenture or loan or credit agreement or any other agreement, lease or
instrument to which any Consolidated Entity is a party or by which it or its
properties may be bound or affected if such breach, default or failure to obtain
consent could reasonably be expected to have a Material Adverse Effect; (e)
result in, or require, the creation or imposition of any Lien (other than as
created under the Security Documents), upon or with respect to any of the
properties now owned or hereafter acquired by any Consolidated Entity; or (f)
cause any Consolidated Entity to be in default under any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award or
any such indenture, agreement, lease or instrument if such default could
reasonably be expected to have a Material Adverse Effect.
Section 2.04. Legally Enforceable Agreements. Each Amended Facility
Document to which any Obligor is a party has been duly executed and delivered by
such Obligor. Each Amended Facility Document to which any Obligor is a party is
a legal, valid and binding obligation of such Obligor enforceable against such
Obligor in accordance with its terms, except to the extent that such enforcement
may be limited by applicable bankruptcy, insolvency and other similar laws
affecting creditors' rights generally.
Section 2.05. Financial Statements. The consolidated balance sheet of
the Consolidated Entities as at June 29, 1996, and the related consolidated and
consolidating (by business segment) income statements and consolidated
statements
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of cash flows and changes in stockholders' equity of the Consolidated Entities
for the fiscal year then ended, and the accompanying footnotes, together with
the unqualified opinion on the consolidated statements of Deloitte & Touche,
independent certified public accountants, and the interim draft unaudited
consolidated balance sheet of the Consolidated Entities as at March 29, 1997,
and the related draft unaudited consolidated and consolidating (by business
segment) income statements and consolidated statements of cash flows and changes
in stockholders' equity of the Consolidated Entities for the nine months then
ended, copies of which have been furnished to each of the Banks, are complete
and correct and fairly present the financial condition of the Consolidated
Entities at such dates and the results of the operations of the Consolidated
Entities for the periods covered by such statements, all in accordance with GAAP
consistently applied. There are no liabilities of any Consolidated Entity, fixed
or contingent, which are material but are not reflected in the financial
statements or in the notes thereto and which would be required to be recorded in
such financial statements or notes in accordance with GAAP, other than
liabilities arising in the ordinary course of business since March 29, 1997. No
information, exhibit or report furnished by any Consolidated Entity to the Banks
in connection with the negotiation of this Agreement contained any material
misstatement of fact or omitted to state a material fact or any fact necessary
to make the statements contained therein not materially misleading. Since March
29, 1997, there has been no change which could reasonably be expected to have a
Material Adverse Effect.
ARTICLE 3. CONDITIONS PRECEDENT.
The effectiveness of this Agreement is subject to the condition
precedent that the Agent shall have received on or before May 7, 1997 (the
"Effective Date") each of the following, in form and substance satisfactory to
the Agent and its counsel:
(a) counterparts of this Agreement executed by each of the
Borrower, the Subsidiary Guarantors, the Banks and the Agent;
(b) evidence that all actions necessary or appropriate (or, in
any event, as may be requested by the Agent) to create, perfect or protect the
Liens created or purported to be created by the "Mortgages" (as defined in the
First Amendment Agreement), the Security Agreement, the Trademark Security
Agreement and the Pledge Agreement have been taken;
(c) certificates of the Secretary or Assistant Secretary of
each of the Obligors, dated the Effective Date, (i) attesting to all corporate
action taken by such Obligor, including resolutions of its Board of Directors
authorizing the execution, delivery and performance of each of the Amended
Facility Documents to which it is
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a party and each other document to be delivered pursuant to this Agreement, (ii)
certifying the names and true signatures of the officers of such Obligor
authorized to sign the Amended Facility Documents to which it is a party and the
other documents to be delivered by such Obligor under this Agreement and (iii)
verifying that the organizational documents of such Obligor attached thereto are
true, correct and complete as of the date thereof;
(d) a certificate of a duly authorized officer of each of the
Obligors, dated the Effective Date, stating that the representations and
warranties in Article 2 are true and correct on such date as though made on and
as of such date and that no event has occurred and is continuing which
constitutes a Default or Event of Default; and
(e) evidence that the fees and expenses incurred as of the
Effective Date under Section 4.05 shall have been paid in full.
ARTICLE 4. MISCELLANEOUS.
Section 4.01. Defined Terms. The terms used herein and not defined
herein shall have the meanings assigned to such terms in the Amended Credit
Agreement.
Section 4.02. Reaffirmation. Each of the Obligors acknowledges that the
Liens granted to the Agent under the Security Documents in and to the Collateral
secure all of the Obligations, including, without limitation, all liabilities
and obligations under the Loans as herein modified and decreased. All references
to "Secured Obligations" in any Facility Document shall be deemed to include all
liabilities and obligations under the Loans as herein modified and decreased.
Each of the Obligors further acknowledges and reaffirms all of its other
respective obligations and duties under the Amended Facility Documents to which
it is a party.
Section 4.03. Nonwaiver. The terms of this Agreement shall not operate
as a waiver by the Agent or any Bank or otherwise prejudice the rights, remedies
or powers of the Agent or any Bank under the Amended Credit Agreement, the other
Amended Facility Documents or applicable law. Except as expressly provided
herein: (x) no terms and provisions of the Facility Documents are modified or
changed by this Agreement; and (y) the terms and provisions of the Facility
Documents shall continue in full force and effect.
Section 4.04. Amendments and Waivers. Any provision of this Agreement
may be amended or modified only by an instrument in writing signed by the
Borrower, the Agent and the Required Banks, or by the Borrower and the Agent
acting with the consent of the Required Banks and any provision of this
Agreement may be waived
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by the Required Banks or by the Agent acting with the consent of the Required
Banks; except any provision the subject matter of which the consent of all of
the Banks would be necessary under the Facility Documents shall require the
consent of all of the Banks prior to the amendment or waiver thereof.
Section 4.05. Expenses. The Borrower shall reimburse the Agent on
demand for all reasonable costs, expenses and charges (including, without
limitation, reasonable fees and charges of legal counsel to the Agent and of
Xxxxxxx & Marsal, Inc.) in connection with the preparation of, and any
amendment, supplement, waiver or modification to (in each case, whether or not
consummated), this Agreement, any other Amended Facility Document and any other
documents prepared in connection herewith or therewith. The Borrower shall also
pay to the Agent for the account of the Banks an amendment fee equal to $125,000
to be split among the Banks in accordance with their Pro Rata Shares.
Section 4.06. Notices. Unless the party to be notified otherwise
notifies the other party in writing as provided in this Section, and except as
otherwise provided in this Agreement, notices shall be given to the Agent by
telephone, confirmed by telex, telecopy or other writing, and to the Banks and
to the Obligors by ordinary mail or telecopier addressed to such party at its
address on the signature page of this Agreement. Notices shall be effective: (a)
if given by mail, 72 hours after deposit in the mails with first class postage
prepaid, addressed as aforesaid; and (b) if given by telecopier, when the
telecopy is transmitted to the telecopier number as aforesaid; provided that
notices to the Agent and the Banks shall be effective upon receipt.
Section 4.07. Headings; Parentheticals. The headings and captions
hereunder are for convenience only and shall not affect the interpretation or
construction of this Agreement. All numbers contained herein enclosed by
parentheticals are deemed to reflect losses or the negative of such numbers.
Section 4.08. Severability. The provisions of this Agreement are
intended to be severable. If for any reason any provision of this Agreement
shall be held invalid or unenforceable in whole or in part in any jurisdiction,
such provision shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the validity
or enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
Section 4.09. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any party hereto may execute this Agreement by signing any
such counterpart.
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Section 4.10. Integration. The Amended Facility Documents set forth the
entire agreement among the parties hereto relating to the transactions
contemplated thereby and supersede any prior oral or written statements or
agreements with respect to such transactions.
SECTION 4.11. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF
THE COMMONWEALTH OF MASSACHUSETTS.
Section 4.12. Release. Each of the Obligors hereby releases and forever
discharges the Agent and each of the Banks and their respective successors,
assigns, affiliates, directors, employees and agents from all causes of action,
covenants, agreements, damages, claims and demands whatsoever, in law or in
equity, which such Obligor ever had or now has in any way relating to or arising
out of the Existing Credit Agreement, any other Facility Document or any other
document contemplated by or referred to herein or the transactions contemplated
hereby or thereby or the enforcement of any of the terms thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
DAKA INTERNATIONAL, INC.
By__________________________________
Name:
Title:
FUDDRUCKERS, INC.
By__________________________________
Name:
Title:
DAKA, INC.
By__________________________________
Name:
Title:
CASUAL DINING VENTURES, INC.
By__________________________________
Name:
Title:
ATLANTIC RESTAURANT VENTURES,
INC.
By__________________________________
Name:
Title:
[SIGNATURE PAGE TO SECOND AMENDMENT AGREEMENT]
FRENCH QUARTER COFFEE COMPANY
By__________________________________
Name:
Title:
AMERICANA DINING CORP.
By__________________________________
Name:
Title:
CHAMPPS ENTERTAINMENT OF
EDISON, INC.
By__________________________________
Name:
Title:
CHAMPPS ENTERTAINMENT OF
TEXAS, INC.
By__________________________________
Name:
Title:
[SIGNATURE PAGE TO SECOND AMENDMENT AGREEMENT]
CHAMPPS AMERICANA, INC.
(Formerly known as Champps
Entertainment of Wayzata, Inc.)
By__________________________________
Name:
Title:
CHAMPPS ENTERTAINMENT, INC.
By__________________________________
Name:
Title:
SPECIALTY CONCEPTS, INC.
By__________________________________
Name:
Title:
THE GREAT BAGEL AND COFFEE
COMPANY
By__________________________________
Name:
Title:
HOSPITALITY SUPPLY, INC.
By__________________________________
Name:
Title:
[SIGNATURE PAGE TO SECOND AMENDMENT AGREEMENT]
FUDDRUCKERS EUROPE, INC.
By__________________________________
Name:
Title:
Address for Notices:
Xxx Xxxxxxxxx Xxxxx
00 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Telecopier No.:(000)000-0000
[SIGNATURE PAGE TO SECOND AMENDMENT AGREEMENT]
AGENT:
THE CHASE MANHATTAN BANK
By__________________________________
Name:
Title:
Address for Notices:
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
[SIGNATURE PAGE TO SECOND AMENDMENT AGREEMENT]
BANKS:
THE CHASE MANHATTAN BANK
By__________________________________
Name:
Title:
Lending Office and Address for
Notices:
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
[SIGNATURE PAGE TO SECOND AMENDMENT AGREEMENT]
BANKS:
FLEET NATIONAL BANK
By__________________________________
Name:
Title:
Lending Office and Address for
Notices:
00 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X'Xxxxx
[SIGNATURE PAGE TO SECOND AMENDMENT AGREEMENT]
BANKS:
MELLON BANK, N.A.
By__________________________________
Name:
Title:
Lending Office and Address for
Notices:
Xxx Xxxxxx Xxxx Xxxxxx
Xxxx 0000
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxx
[SIGNATURE PAGE TO SECOND AMENDMENT AGREEMENT]
BANKS:
BANKBOSTON, N.A.
By__________________________________
Name:
Title:
Lending Office and Address for
Notices:
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
[SIGNATURE PAGE TO SECOND AMENDMENT AGREEMENT]
SCHEDULE I
Commitments
Loan Commitments
The Chase Manhattan Bank $57,500,000.00
Fleet National Bank $19,166,666.67
Mellon Bank, N.A. $19,166,666.67
BankBoston, N.A. $19,166,666.66
--------------
Total Loan Commitments $115,000,000.00
Standby Letter of Credit Commitments
The Chase Manhattan Bank $1,511,693.50
Fleet National Bank $503,897.83
Mellon Bank, N.A. $503,897.83
BankBoston, N.A. $503,897.84
-----------
Total Letter of Credit Commitments $3,023,387.00
