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EXHIBIT 10(a)
THIRD AMENDMENT TO LOAN AGREEMENT
THIS THIRD AMENDMENT TO LOAN AGREEMENT ("Third Amendment") entered into
this 14 day of August, 2001, by and among ▇. ▇▇▇▇▇▇▇▇▇'▇ CORPORATION (f/k/a
VOLUNTEER CAPITAL CORPORATION), ▇. ▇▇▇▇▇▇▇▇▇'▇ RESTAURANTS, INC. (f/k/a TOTAL
QUALITY MANAGEMENT, INC.), Tennessee corporations (collectively referred to as
the "Borrower"), and BANK OF AMERICA, N.A., SUCCESSOR TO NATIONSBANK, N.A.,
SUCCESSOR TO NATIONSBANK OF TENNESSEE, 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 August 29, 1995, as amended by that Amendment to Loan Agreement dated
March 27, 1998, and as further amended by that Second Amendment to Loan
Agreement dated March 30, 2000 ("Loan Agreement"); and
WHEREAS, Volunteer Capital Corporation has changed its name to ▇.
▇▇▇▇▇▇▇▇▇'▇ Corporation and Total Quality Management, Inc. has changed its name
to ▇. ▇▇▇▇▇▇▇▇▇'▇ Restaurants, Inc.; and
WHEREAS, Borrower and Lender desire to amend the Loan Agreement as
provided herein; and
NOW, THEREFORE, for the mutual promises contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. All capitalized terms not defined herein shall have the
meaning set forth in the Loan Agreement.
2. Section 1.c. of the Loan Agreement is hereby deleted in its
entirety and in lieu thereof shall read as follows:
"c. Payments. Payment of all obligations arising under
the Line of Credit shall be made as follows:
(1) Interest. Interest on the outstanding
principal balance under the Line of Credit shall be paid in
arrears on the first (1st) day of each month beginning on
September 1, 2001.
(2) Voluntary Prepayment. Voluntary prepayments
of principal or accrued interest may be made, in whole or in
part, at any time without penalty.
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(3) Mandatory Prepayment. Borrower must
immediately prepay any amount by which the principal balance
of the Line of Credit exceeds $20,000,000.
(4) All Amounts Due. All remaining principal,
interest and expenses outstanding under the Line of Credit
shall become due July 1, 2002, unless the borrower exercises
its option to extend for a seven (7) year term, in which case
all remaining principle, interest and expenses outstanding
under the Line of Credit shall become due July 1, 2009.
(5) Conversion to Term Loan. Subject to the
provisions contained herein, Borrower has the option to
convert this Line of Credit Note to a Term Note. Providing
that Borrower is not then in default hereunder, Borrower may
make a written election to convert the Line of Credit Note to
a Term Note any time prior to July 1, 2002. The written
election must be delivered to Payee at least thirty (30) days
prior to the conversion date. After receipt of the election,
Payee has sole discretion to determine what collateral will be
required of Maker to provide security for the term loan. Payee
will notify Maker whether or in what manner the term loan
shall be securitized within fifteen (15) days after receiving
the election. Upon conversion, there will be a conversion fee
equal to one-quarter (1/4) of one percent (1%) of the then
outstanding principal balance. The unpaid principal balance
will then be repayable in eighty-four (84) equal monthly
installments of principal with the first principal payment due
thirty (30) days following the conversion date. Interest will
continue to be paid monthly at the same time as the principal
payment is due. Interest shall accrue on the Term Note at the
Bank of America, N.A. Prime Rate, as it may change from time
to time or the LIBOR Rate discussed above (subject to the
restriction on the number of LIBOR borrowings discussed above)
or at a fixed rate to be determined by Payee at the time of
receiving the written election. Maker shall specify the
interest rate option (Prime Rate, LIBOR Rate or fixed) to be
used in the conversion election."
3. Section 30.l of the Loan Agreement is hereby deleted in its
entirety and in lieu thereof shall read as follows:
"l. Capital Expenditures. Make capital expenditures
(including capitalized leases) during fiscal year 2001 and during each
fiscal year thereafter exceeding, in the aggregate, $11,000,000.00 per
fiscal year."
4. Section 30.c. of the Loan Agreement is hereby deleted in its
entirety and in lieu thereof shall read as follows:
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"c. Stock Transactions. Redeem or agree to redeem any
stock, subordinated debt, warrants, or debt securities convertible into
stock; provided that, Borrower may (i) make an early redemption(s) of
its outstanding convertible debentures up to $1,875,000.00 prior to
June 1, 2002; and (ii) buy back up to a maximum of $2,000,000.00 of
Borrower's currently issued and outstanding common stock."
5. Section 31.c. is hereby deleted in its entirety and in lieu
thereof shall read as follows:
"c. Senior Funded Debt to EBITDA Ratio. Borrower shall
maintain a Senior Funded Debt to EBITDA Ratio ("SDCR") of less than or
equal to 2.75 to 1.00 at all times."
6. Section 31.e. is hereby deleted in its entirety and in lieu
thereof shall read as follows:
"e. Fixed Charge Coverage Ratio. The Fixed Charge
Coverage Ratio measured at the end of each fiscal quarter computed on a
rolling four quarters basis shall be at least 1.25 to 1.00. For
purposes hereof, the Fixed Charge Coverage Ratio is defined as: (net
income plus depreciation and amortization plus interest expense plus
rent expense minus dividends and distributions paid) divided by
(interest expense plus rent expense plus current maturities of long
term debt (as further described below) plus current maturities of
capital leases). For purposes hereof, (i) with respect to Borrower's
outstanding convertible debentures, this portion of Borrower's current
maturities of long term debt shall be limited to Borrower's required
$1,875,000.00 redemption for fiscal year 2002; and (ii) current
maturities of long term debt shall not include any amounts outstanding
under the Line of Credit Loan)."
7. Borrower shall pay all costs incidental to this Third
Amendment, including, but not limited to, the fees and expenses of Lender's
counsel.
8. Borrower warrants and represents that (a) the Loan Documents
are valid, binding and enforceable against the Borrower according to their
terms; (b) all warranties and representations made by Borrower in the Loan
Documents are hereby again warranted and represented to be true as of the date
hereof, 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
and (c) no default presently exists under the Loan Documents. 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 Third Amendment.
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9. As amended hereby, the Loan Agreement remains in full effect,
and all agreements among the parties with respect to the subject hereof are
represented fully in this Third Amendment and the other written documents among
the parties. The provisions of the Loan Agreement regarding the arbitration of
disputes and other general matters also govern this Third Amendment. The
validity, construction and enforcement hereof shall be determined according to
the substantive laws of the State of Tennessee.
IN WITNESS WHEREOF, the parties have executed this document through
authorized agents on the day and date first above written.
BANK OF AMERICA, N.A., SUCCESSOR TO
NATIONSBANK, N.A., SUCCESSOR TO
NATIONSBANK OF TENNESSEE, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Senior Vice President
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▇. ▇▇▇▇▇▇▇▇▇'▇ CORPORATION
(f/k/a VOLUNTEER CAPITAL CORPORATION)
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Title: Vice President and Chief Financial Officer
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▇. ▇▇▇▇▇▇▇▇▇'▇ RESTAURANTS, INC.
(f/k/a TOTAL QUALITY MANAGEMENT, INC.)
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Title: Vice President - Finance
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