SECOND AMENDMENT TO CREDIT AGREEMENT
Exhibit
10.36
SECOND AMENDMENT TO CREDIT AGREEMENT
BY THIS SECOND AMENDMENT TO CREDIT DOCUMENTS (this “Amendment”), dated as of June 23,
2009, X.X. XXXXX’X CHINA BISTRO, INC., a Delaware corporation (“Borrower”), and JPMORGAN CHASE
BANK, N.A., a national banking association, as Administrative Agent, BANK OF AMERICA, N.A., a
national banking association, as Syndication Agent, and XXXXX FARGO BANK, N.A., a national banking
association, as Documentation Agent and the Lenders party hereto, agree that the Credit Agreement
dated August 31, 2007 between Borrower, Administrative Agent, Syndication Agent, Documentation
Agent and the Lenders party thereto (the “Original Credit Agreement”), as amended by that certain
First Amendment to Credit Agreement dated as of December 31, 2008 (the Original Credit Agreement as
amended by the First Amendment is referred to herein as the “Credit Agreement”) is supplemented,
amended and modified as set forth herein. All terms capitalized but not otherwise defined herein
shall have the meanings set forth in the Credit Agreement
1. Definition of “Permitted Entity Investment”. Borrower, Administrative Agent,
Syndication Agent, Documentation Agent and the Lenders party hereto hereby agree that a new
definition of “Permitted Entity Investment” shall be added to Section 1.01 of the Original
Credit Agreement as follows
“‘Permitted Entity Investment’ has the meaning set forth in Section 6.04(e).”
2. Amendment to Section 5.08 of the Original Credit Agreement. The first sentence of
Section 5.08 of the Original Credit Agreement is hereby amended as follows:
“The proceeds of the Loans will be used to finance the working
capital needs of the Borrower and for the Borrower’s general
corporate purposes, including share repurchases and acquisitions or
other investments permitted by this Agreement.
3. Amendments to Section 6.04 of the Original Credit Agreement. Borrower,
Administrative Agent, Syndication Agent, Documentation Agent and the Lenders party hereto hereby
agree that Section 6.04 of the Original Credit Agreement is amended by adding the following Section
6.04(e) thereto:
“(e) Investments (which for purposes of this Section 6.04(e) only shall include
purchasing, holding or acquiring any capital stock, evidences of indebtedness or other
securities (including any option, warrant or other right to acquire any of the foregoing)
of, making or permitting to exist any loans or advances to, or making or permitting to exist
any investment or any other interest in, any other Person, or purchasing or otherwise
acquiring (in one transaction or a series of transactions) any assets of any other Person
constituting a business unit) meeting the following requirements or otherwise approved by
the Required Lenders (each such investment constituting a
“Permitted Entity Investment”):
(i) as of the date of the consummation of such Permitted Entity
Investment, no Default shall have occurred and be continuing or
would result from such Permitted Entity Investment, and the
representation and warranty contained in Section 5.08 shall be true
both before and after giving effect to such Permitted Entity
Investment;
(ii) such Permitted Entity Investment is consummated on a
non-hostile basis pursuant to a negotiated agreement approved by the
board of directors or other applicable governing body of the seller
or entity to be acquired, and no material challenge to such
Permitted Entity Investment shall be pending or threatened by any
shareholder or director of the seller or entity to be acquired;
(iii) the business relating to such Permitted Entity Investment
is similar or related to one or more of the lines of business in
which the Borrower and its Subsidiaries are engaged on the Effective
Date;
(iv) as of the date of the consummation of such Permitted
Entity Investment, all material approvals required in connection
therewith shall have been obtained; and
(v) that do not exceed in the aggregate $10,000,000.00 in cash
and/or non-cash consideration during the term of this Agreement.”
4. Schedule 1 to Compliance Certificate. Borrower, Administrative Agent, Syndication
Agent, Documentation Agent and the Lenders party hereto hereby agree that Schedule 1 to the
Compliance Certificate is hereby replaced with Schedule 1 to the Compliance Certificate attached
hereto as Exhibit “A”.
5. Ratification. The Credit Documents are ratified and affirmed by Borrower and shall
remain in full force and effect as modified herein. Any property or rights to or interests in
property granted as security in the Credit Documents shall remain as security for the Loan and the
obligations of Borrower in the Credit Documents, except as modified herein.
6. Representations and Warranties. Borrower represents and warrants to Administrative
Agent, Syndication Agent, Documentation Agent and the Lenders party hereto that: (a) there is no
event which is, or with notice or lapse of time or both would be, a default under the Credit
Agreement, (b) the representations and warranties in the Credit Agreement are true and correct as
of the date of this Amendment as if made on the date of this Amendment, (c) this Amendment does not
conflict with any law, agreement or obligation by which Borrower is bound, and (d) this Amendment
is within Borrower’s power, has been duly authorized, and does not conflict with Borrower’s
certificate of incorporation or bylaws.
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7. Successors and Assigns; Counterparts. This Amendment shall be binding upon, and
shall inure to the benefit of, the parties hereto and their heirs, personal representatives,
successors and assigns. This Amendment may be executed in counterparts.
8. Effect of Agreement. Except as provided in this Amendment, and any documents,
agreements and/or instruments executed in connection with this Amendment, all of the terms and
conditions of the Credit Documents shall remain in full force and effect.
9. 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.
10. Laws Applicable. To the maximum extent permitted by law, this Amendment shall be
governed by and construed in accordance with the laws of the State of Arizona, without regard to
its conflicts of law principles.
11. Scope of Agreement. The execution of this Amendment shall not release Borrower or
Guarantors from liability of any kind. This Amendment does not attempt to settle, and will in no
way affect, compromise, release, waive, settle, discharge or diminish any of the rights or remedies
(i) of any individual or entity who is not a party to this Amendment, or (ii) involving any
obligations, property, transactions or subject matter not included within this Amendment. It is
the express intent and agreement of the Borrower and Guarantors that there are no third-party
beneficiaries of this Amendment.
12. Ratification of Documents. The Borrower and Guarantors acknowledge that
Administrative Agent, Syndication Agent, Documentation Agent and the Lenders party hereto are
entering into this Amendment in reliance on the truth and accuracy of the representations and
warranties in this Amendment. Despite any past or future acceptance of late or partial installment
payments, any prior reinstatement, any prior negotiations, or any other actual or implied
forbearance of any nature by Administrative Agent, Syndication Agent, Documentation Agent and/or
any of the Lenders party hereto, time remains of the essence of this Amendment and of the Credit
Documents.
13. Modification Fee. The Borrower hereby agrees to pay to each of the Lenders, on or
before the date of this Amendment, a modification fee equal to $2,500.00.
[Signature blocks appear on the following pages.]
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DATED as of the date first set forth above.
| X.X. XXXXX’X CHINA BISTRO,
INC., a Delaware corporation |
||||
| By: | /s/ Xxxxxxx Xxxxxxxx | |||
| Xxxxxxx Xxxxxxxx, Co-CEO | ||||
| JPMORGAN CHASE BANK, N.A., a
national banking association, as a Lender and as Administrative Agent |
||||
| By: | /s/ Xxxx X. Xxxx | |||
| Name: | Xxxx X. Xxxx | |||
| Title: | Vice President | |||
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BANK OF AMERICA, N.A., a national banking association, as a Lender and as Syndication Agent |
||||
| By: | /s/ Xxxxxx Xxxxxxx | |||
| Name: | Xxxxxx Xxxxxxx | |||
| Title: | Vice President | |||
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XXXXX FARGO BANK, N.A., a national banking association, as a Lender and as Documentation Agent |
||||
| By: | /s/ Xxxxx XxXxxxx | |||
| Name: | Xxxxx XxXxxxx | |||
| Title: | Vice President | |||
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| U.S. BANK NATIONAL ASSOCIATION, a national banking association, as a Lender | ||||
By: |
/s/ Xxxxx Xxxxx |
|||
| Name: | Xxxxx Xxxxx | |||
| Title: | Assistant Vice President | |||
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|
FIFTH THIRD BANK, a national banking association, as
a Lender |
||||
| By: | /s/ Xxxx Xxxxx | |||
| Name: | Xxxx X. Xxxxx | |||
| Title: | Vice President | |||
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CONSENT AND AGREEMENT OF GUARANTORS
The undersigned Guarantors have each executed a Continuing Guarantee dated August 31, 2007
(each, a “Continuing Guaranty”)in favor of Administrative Agent, Syndication Agent, Documentation
Agent and the Lenders party thereto as such terms are defined in the foregoing Second Amendment to
Credit Documents (the “Amendment”). Guarantors hereby consent and agree to the modifications and
all other matters contained in the Amendment. Each Continuing Guarantee is continued in full force
and effect and shall remain unaffected and unchanged except as amended and modified by the
Amendment. Each Continuing Guarantee is hereby ratified and reaffirmed, and Guarantor specifically
acknowledges the validity and enforceability thereof.
XXX XXX ASIAN DINER, INC., a Delaware corporation |
||||
| By: | /s/ Xxxxxxx Xxxxxxxx | |||
| Xxxxxxx Xxxxxxxx, CEO | ||||
| PFCCB ADMINISTRATION, INC., a Delaware corporation |
||||
| By: | /s/ Xxxxxxx Xxxxxxxx | |||
| Xxxxxxx Xxxxxxxx, CEO | ||||
| PFCCB SHARED CORPORATE SERVICES,
INC., an Arizona corporation |
||||
| By: | /s/ Xxxxxxx Xxxxxxxx | |||
| Xxxxxxx Xxxxxxxx, President | ||||
| PFCCB GIFT CARD, INC., an Arizona corporation |
||||
| By: | /s/ Xxxxxxx Xxxxxxxx | |||
| Xxxxxxx Xxxxxxxx, President | ||||
| PFCCB PINNACLE PEAK LLC, an Arizona limited liability
company |
||||
| By: | X.X.
Xxxxx’x China Bistro, Inc. its sole member |
|||
| By: | /s/ Xxxxxxx Xxxxxxxx | |||
| Xxxxxxx Xxxxxxxx, Co-CEO | ||||
|
PFCCB EQUIPMENT, LLC, a Delaware limited liability
company |
||||
| By: | X.X. Xxxxx’x China Bistro, Inc. | |||
| its sole member | ||||
| By: | /s/ Xxxxxxx Xxxxxxxx | |||
| Xxxxxxx Xxxxxxxx, Co-CEO | ||||
|
PFCCB LICENSING, INC., a Delaware corporation |
||||
| By: | /s/ Xxxxxxx Xxxxxxxx | |||
| Xxxxxxx Xxxxxxxx, Co-CEO | ||||
|
PFCCB RETAIL, INC., a Delaware corporation |
||||
| By: | /s/ Xxxx Xxxxxxx | |||
| Xxxx Xxxxxxx, CFO | ||||
Exhibit “A”
SCHEDULE I to Compliance Certificate
of X.X. Xxxxx’x China Bistro, Inc.
as of (Compliance Date)
of X.X. Xxxxx’x China Bistro, Inc.
as of (Compliance Date)
I. FINANCIAL COVENANTS (Section 6.09 of the Credit Agreement). |
||||
A. LEVERAGE RATIO (Section 6.09(a) of the Credit Agreement). |
||||
(1) Total Indebtedness as of the Compliance Date: |
(000’s | ) | ||
(a) obligations for borrowed money: |
$ | |||
(b) obligations evidenced by bonds,
debentures, notes or similar instruments: |
$ | |||
(c) obligations upon which interest customarily paid: |
$ | |||
(d) conditional sale/title retention agreements if liability per GAAP: |
$ | |||
(e) deferred purchase price (excluding
current accounts payable and other accrued liabilities
and contingent payments) if liability per GAAP |
$ | |||
(f) secured Indebtedness: |
$ | |||
(g) Guarantees: |
$ | |||
(h) Capital Lease Obligations and other Lease Obligations: |
$ | |||
(i) obligations in respect of bankers’ acceptances: |
$ | |||
(j) obligations as account party in respect
of letters of credit and letters of guaranty: |
$ | |||
(k) Net Xxxx-to-Market Exposure: |
$ | |||
(l) Other: |
$ | |||
(m) Indebtedness (Sum of (a) — (l)): |
$ | |||
(2) EBITDA for the four fiscal quarters most recently ended: |
($000’s | ) | ||
(a) Net Income for such period: |
$ | |||
(b) amounts deducted in the computation
thereof for (i) Interest Expense, (ii) Federal, state
and local income taxes and (iii) depreciation and
amortization: |
+ | $ | ||||||
(c) non-cash charges resulting from
adoption of FASB 123 if required to be recorded as
expense: |
+ | $ | ||||||
(d) other non-recurring expenses reducing
Net Income which do not represent a cash item: |
+ | $ | ||||||
(e) Federal, state, local and foreign income tax credits |
- | $ | ||||||
(f) all non-cash items increasing Net Income |
- | $ | ||||||
(g) EBITDA (Sum of Line A(2)(a) through Line A(2)(f)): |
= | $ | ||||||
(3) Leverage Ratio (Ratio of Line A(1)(m) to Line A(2)(g): |
_____ to 1.00 | |||||||
(4) Maximum Total Leverage Ratio for any fiscal quarter: |
2.50 to 1.00 | |||||||
B. MINIMUM FIXED CHARGE COVERAGE RATIO (Section 6.09.02 of the Credit Agreement). |
||||||||
(1) EBITDAR for the four fiscal quarters most recently ended: |
($000’s | ) | ||||||
(a) EBITDA (Line A(2)(g): |
$ | |||||||
(b) Maintenance Capital Expenditures: |
- | $ | ||||||
(c) Rental Expense: |
+ | $ | ||||||
(d) minority interest expense: |
+ | $ | ||||||
(e) imputed partner bonus expense: |
+ | $ | ||||||
(f) EBITDAR (Sum of Line B(1)(a) through Line B(1)(e)): |
= | $ | ||||||
(2) Fixed Charges for the four fiscal quarters most recently ended: |
($000’s | ) | ||||||
(a) Interest Expense: |
+ | $ | ||||||
(b) Rental Expense (Line B(1)(c)): |
+ | $ | ||||||
(c) expense for taxes: |
+ | $ | ||||||
(d) required repayment of principal of Indebtedness: |
$ | |||||||
(e) distributions to minority partners: |
+ | $ | ||||||
(f) Fixed Charges (Sum of Line B(2)(a) through Line B(2)(e)): |
= | $ | ||||||
(3) Fixed Charge Coverage Ratio (Ratio of Line B(1)(f) to Line B(2)(f)): |
____ to 1.00 | |||||||
(4) Minimum Fixed Charge Coverage Ratio for any fiscal quarter: |
1.25 to 1.00 | |||||||
II. OTHER MISCELLANEOUS PROVISIONS. |
||||||||
A. INDEBTEDNESS (Section 6.01 of the Credit Agreement). |
||||||||
(1) Indebtedness to finance the acquisition of personal
property (Maximum: $3,000,000): |
$ | |||||||
(2) unsecured Indebtedness to finance the acquisition of
partnership interests (Maximum: $20,000,000): |
$ | |||||||
(3) other unsecured Indebtedness permitted by Section 6.01
(Maximum: $3,000,000): |
$ | |||||||
B. INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND ACQUISITIONS. (Section 6.04 of the
Credit Agreement). |
||||||||
(1) Permitted Entity Investments (Maximum: $10,000,000 cash
and/or non-cash during the term of the Agreement): |
$ | |||||||
(2) Permitted Acquisitions (Maximum: $50,000,000 cash
and/or non-cash in 12 month period and $125,000,000 cash and
$200,000,000 cash and/or non-cash during the term of the
Agreement): |
$ | |||||||
C. RESTRICTED PAYMENTS. (Section 6.06 of the Credit Agreement). |
||||||||
(1) Purchases of Equity Interests in the Borrower
(Maximum: $100,000,000): |
$ | |||||||
