Exhibit 10.24
WAIVER AGREEMENT AND FIRST AMENDMENT TO SENIOR
SUBORDINATED NOTE PURCHASE AGREEMENT
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THIS WAIVER AGREEMENT AND FIRST AMENDMENT TO SENIOR SUBORDINATED NOTE
PURCHASE AGREEMENT (this "WAIVER AND AMENDMENT") is entered into as of March 21,
2001 by and between THE XXXXX & WOLLENSKY RESTAURANT GROUP, INC., a Delaware
corporation (the "COMPANY"), with its principal place of business at 0000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, each of the Subsidiaries of the Company listed
on the signature pages hereto (the "SUBSIDIARY GUARANTORS"), and MAGNETITE ASSET
INVESTORS L.L.C., a Delaware limited liability company (the "PURCHASER"), with
its principal place of business at 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000.
WITNESSETH:
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WHEREAS, the Company and the Purchaser are parties to that certain
Senior Subordinated Note Purchase Agreement dated as of June 29, 1999 (the "NOTE
AGREEMENT"); and
WHEREAS, the Company has requested that the Purchaser (a) waive the
Company's failure to comply with certain provisions of the Note Agreement and
(b) agree to certain amendments to the Note Agreement; and
WHEREAS, the Purchaser is willing to do so as set forth in this Waiver
and Amendment; and
WHEREAS, the Company wishes to amend the interest provisions of the
original Note (the "ORIGINAL NOTE") issued on June 29, 1999, to provide for
progressive increases in the interest rate applicable to such note and to
provide that amounts due as a result of the additional marginal interest rate be
added to the principal amount of the note; and
WHEREAS, the Company wishes to issue a new note to the Purchaser which
incorporates such revised interest provisions; and
WHEREAS, the Company's Subsidiaries that are Guarantors under the
Subsidiary Guaranty wish to ratify the extension of the Subsidiary Guaranty to
the New Note (as defined below);
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Purchaser
agree as follows:
1. DEFINITIONS. Capitalized terms used but not defined herein shall
have the meaning given to them in the Note Agreement.
2. WAIVER. The Purchaser hereby waives the failure of the Company to
comply with certain provisions of the Note Agreement, as follows:
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(a) The Purchaser waives the failure of the Company in 1999
and 2000 to comply with the requirement found in Section 6.3(b) of the Note
Agreement that the Company deliver a certificate as described therein.
(b) The Purchaser waives the failure of the Company to comply
with the requirement found in Section 7.1(b) of the Note Agreement that the
Company and its Subsidiaries have a Consolidated EBITDA of not less than
$2,338,000 for the first fiscal quarter of 2000, of not less than $2,000,000 for
the second fiscal quarter of 2000, and of not less than $850,000 for the third
fiscal quarter of 2000.
(c) The Purchaser waives the failure of the Company to comply
with the requirement found in Section 7.1(c) of the Note Agreement that the
Company and its Subsidiaries on a consolidated basis maintain a Consolidated
Leverage Ratio, calculated on a rolling four-quarter basis, of not more than
3.50 to 1.0 in the third fiscal quarter of 2000.
3. AMENDMENT. The Purchaser and the Company agree that the Note Agreement
is hereby modified as follows:
(a) The definition of "CONSOLIDATED EBITDA" in Section 1.1 is
modified as follows: (i) by deleting the "," at the end of the first clause (b)
thereof, and inserting in its place "other than Capitalized Interest," and (ii)
by inserting after the words "the ordinary course of business" in the 15th line
of such definition (and within the parenthetical that contains those words), the
words "and specifically excluding the one-time charges of $504,000 taken by the
Company in the fourth fiscal quarter of 1999 relating to the withdrawn IPO of
the Company, and specifically excluding the EBITDA of the Washington, D.C.
Maloney & Xxxxxxxx location, but only for any fiscal months in which it has been
closed and offered for sublease, sale or other disposal".
(b) The definition of "CONSOLIDATED FIXED CHARGES" in Section
1.1 is modified by inserting in clause (B) thereof, after the words
"amortization of Indebtedness" the following: "(excluding, however, payments on
"Loan B" of the Senior Secured Revolving Credit Facility with Fleet Bank, N.A.,
as amended on February 29, 2000, to the extent such loan is used to fund the
Company's working capital needs, and in a principal amount not to exceed
$1,000,000 at any time)".
(c) The definition of "CONSOLIDATED INTEREST EXPENSE" in
Section 1.1 is modified by deleting the "." at the end thereof, and inserting in
its place "and any Capitalized Interest."
(d) The definition of "CONSOLIDATED LEASE EXPENSE" in Section
1.1 is modified in the third line thereof by inserting the words "but excluding
deferred rent" after the term "GAAP".
(e) The definition of "PERMITTED INDEBTEDNESS" in Section 1.1
is modified by deleting clause (F) thereof in its entirety and inserting in its
place the following: "(F) all Obligations under the Senior Loan not to exceed at
any time $14,000,000 in aggregate principal amount outstanding; and".
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(f) Section 1.1 is amended by inserting the following new
definitions in the appropriate alphabetical order:
"CAPITALIZED INTEREST" shall have the meaning provided in the
New Notes.
"NEW NOTES" shall mean notes issued in the form of Exhibit A
to the Waiver Agreement and First Amendment to Senior Subordinated Note
Purchase Agreement, dated as of March 16, 2001.
"POST-OFFERING PREMIUM" shall have the meaning provided in
Section 2.3(b)(ii).
"POST-OFFERING PREMIUM ISSUANCE" shall have the meaning
provided in Section 2.3(b)(ii).
(f) Section 2.1, AUTHORIZATION OF NOTES, is modified by
inserting the words "including, without limitation, New Notes" immediately prior
to the parenthetical "(the "NOTES")."
(g) Section 2.3, PREPAYMENT OF NOTES, is modified by deleting
subsection (a) in its entirety and inserting the following in its place:
"(a) VOLUNTARY PAYMENT. (i) The Company may, at its
option, upon notice as provided below, prepay the Notes, in
whole or in part, at any time and from time to time, at the
principal amount so prepaid, PROVIDED, HOWEVER, that no such
prepayment may be made after a Qualified Offering, except as
provided in Subsection 2.3(b)(ii) below;
(ii) All prepayments shall be accompanied by payment
of accrued interest on the amount being prepaid through the
date of prepayment and any other amounts then due to the
Noteholders. Partial prepayments shall be in an aggregate
principal amount of $1,000,000 or a whole multiple of $100,000
in excess thereof.
In the case of each partial prepayment of the Notes, the
principal amount of the Notes to be prepaid shall be allocated among
all of the Notes at the time outstanding in proportion, as nearly as
practicable, to the respective unpaid principal amounts thereof not
theretofore called for prepayment."
(h) Section 2.3, Prepayment of Notes, is further modified by
(i) inserting "(i)" immediately prior to the words "Upon the consummation" in
Subsection 2.3(b) and (ii) inserting the following at the end of Subsection
2.3(b):
"(ii) The Company shall prepay the Notes, in
whole (but not in part) with the Net Proceeds of Capital Stock
of a
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Qualified Offering at the principal amount so prepaid, plus a
premium (a percentage of such principal amount) of 3%, (the
"Post-Offering Premium"), PROVIDED, HOWEVER, that no
prepayment may be made unless the Senior Loan existing on the
date hereof shall have been satisfied on or prior to the date
of such prepayment. The Company may, at its option, elect to
pay the Post-Offering Premium either (x) in cash or (y)
through the issuance (a "Post-Offering Premium Issuance") of a
number of shares of the Company's Common Stock equal to (A)
the amount of the Post-Offering Premium divided by (B) the
offering price per share of the Common Stock offered at the
preceding Qualified Offering, rounded to the nearest whole
number."
(i) Section 7.1, COVENANTS, is modified as follows:
(i) In Section 7.1(a), CONSOLIDATED FIXED CHARGE
COVERAGE RATIO, the last four words ("1.30 to 1.0 thereafter.") are deleted, and
the following is inserted in their place:
"1.30 to 1.0 for the third fiscal quarter of 2000
1.15 to 1.0 for the fourth fiscal quarter of 2000
1.10 to 1.0 for the first fiscal quarter of 2001
1.15 to 1.0 for the second fiscal quarter of 2001
1.20 to 1.0 for the third fiscal quarter of 2001
1.25 to 1.0 for each fiscal quarter thereafter."
(ii) Section 7.1(b), CONSOLIDATED EBITDA, is
modified by deleting the subsection in its entirety, and inserting the following
in its place:
"(b) The Consolidated EBITDA of the Company and its
Subsidiaries, measured on a rolling four quarter basis, shall
be not less than $4,900,000 for the fourth fiscal quarter of
2000; $5,200,000 for the first fiscal quarter of 2001; and
$5,900,000 for the second fiscal quarter of 2001, and
$6,200,000 for each fiscal quarter thereafter."
(iii) In Section 7.1(c), CONSOLIDATED LEVERAGE
RATIO, the last 19 words ("4.50 to 1.0 through March 30, 2000; 4.00 to 1.0
through June 30, 2000 and 3.50 to 1.0 thereafter.") are deleted, and the
following is inserted in their place:
"4.75 to 1.0 for the fourth fiscal quarter of 2000
4.75 to 1.0 for the first fiscal quarter of 2001
4.0 to 1.0 for the second fiscal quarter of 2001
3.75 to 1.0 for the third fiscal quarter of 2001 and each fiscal quarter
thereafter."
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4. ISSUANCE OF NEW NOTE. On the date hereof, the Company shall duly
issue a new note to the Purchaser in substantially the form of EXHIBIT A hereto
(the "New Note") in an aggregate principal amount of $10,000,000.00 and, in
exchange for such note, the Purchaser shall return the Original Note to the
Company for cancellation.
5. TRANSFER RESTRICTIONS. Neither the Warrants nor any shares of Common
Stock issued or issuable in connection therewith or in connection with the
Warrant Agreement, this Waiver and Amendment or the Notes, shall be subject to
contractual transfer restrictions or lock-up provisions of any kind and the
Company and the Subsidiary Guarantors shall use their best efforts to amend or
modify any contracts or agreements to remove any such restrictions, provided,
however, that in the case of an initial public offering of the Company's equity
securities under the Securities Act of 1933, as amended, which is consummated
prior to December 1, 2001, the Purchaser would agree to enter into such lock-up
agreement as is executed by the directors, executive officers and other
significant shareholders of the Company; PROVIDED, HOWEVER, that such agreement
shall not provide for any transfer restriction that extends more than [____]
following the effective date of such offering and, PROVIDED FURTHER, that in the
event lock up terms to which a director, executive officer or shareholder of the
Company is subject, including any amendment, modification, waiver or supplement
thereto, are more favorable than those terms contained in the lock up agreement
to which the Purchaser is a party, the terms of the lock up agreement to which
the Purchaser is a party shall be revised such that such terms shall be no less
favorable to those available to such other Person.
6. REPRESENTATIONS AND WARRANTIES. In order to induce the Purchaser to
enter into this Waiver and Amendment and to accept the New Note, the Company
hereby represents and warrants to the Purchaser that the representations and
warranties made by the Company in Section 3 of the Note Purchase Agreement are
true and correct in all material respects on and as of the date hereof, before
and after giving effect to the effectiveness of this Waiver and Amendment, as if
made on and as of the date hereof, except to the extent such representations and
warranties expressly relate to a specific earlier date, in which case such
representations and warranties were true and correct as of such earlier date.
7. NO OTHER WAIVERS OR MODIFICATIONS; ENTIRE AGREEMENT. Except as
specifically set forth in this Waiver and Amendment, the Note Agreement
continues in full force and effect. All references in the Note Agreement to the
"Agreement" shall be deemed to refer to the Note Agreement as modified pursuant
to the terms hereof. This Waiver and Amendment contains the entire agreement
between the parties relating to the subject matter hereof.
8. EFFECT. In the event of any inconsistency or conflict between the
terms and provisions of the Note Agreement and the terms and provisions of this
Waiver and Amendment, the terms and provisions of this Waiver and Amendment
shall control and be binding, it being the intention of the Company and the
Purchaser that the terms and provisions contained or referred to in the Note
Agreement shall hereby be and be deemed to be amended and modified to the
extent, but only to the extent, necessary to give effect
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to the terms and provisions of this Waiver and Amendment. On and after the date
hereof, each reference in the Note Purchase Agreement to "this Agreement,"
"hereunder," "hereof" or words of like import referring to the Note Agreement,
and each reference in the Notes or the Subsidiaries Guaranty to the "Note
Purchase Agreement," "thereunder," "thereof" or works of like import referring
to the Note Purchase Agreement, shall mean and be a reference to the Note
Purchase Agreement as amended hereby. On and after the date hereof, each
reference in the Note Purchase Agreement or the Subsidiaries Guaranty to "the
Notes," "thereunder," "thereof" or words of like import referring to the Notes,
shall mean and be a reference to New Notes in the form of EXHIBIT A hereto. Each
of the Company's Subsidiaries acknowledges and agrees that any and all of its
obligations with respect to "Notes" under the Subsidiary Guaranty shall apply
equally to New Notes.
9. EXECUTION IN COUNTERPARTS. This Waiver and Amendment may be executed
in separate counterparts, each of which when so executed and delivered shall be
deemed an original and all of which taken together shall constitute one and the
same instrument. This Waiver and Amendment may be executed by the delivery of
facsimile signatures, which shall be deemed original signatures in all respects.
10. GOVERNING LAW. This Waiver and Amendment shall be governed by and
construed in accordance with the internal laws of the State of New York.
11. HEADINGS. Section headings in this Waiver and Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Waiver and Amendment for any other purpose.
IN WITNESS WHEREOF, the parties hereto have caused this Waiver and Amendment to
be duly executed as of the day and year first above written.
THE XXXXX & WOLLENSKY RESTAURANT GROUP, INC.
By:
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Name:
Title:
MAGNETITE ASSET INVESTORS L.L.C.
By: BLACKROCK FINANCIAL
MANAGEMENT, INC.
As Managing Member
By:
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Name:
Title:
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THE MANHATTAN OCEAN CLUB ASSOCIATES, L.L.C.
By:
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Name:
Title:
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LA CITE ASSOCIATES, L.L.C.
By:
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Name:
Title:
ATLANTIC & PACIFIC GRILL ASSOCIATES, L.L.C.
By:
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Name:
Title:
MRS. PARK SUB, L.L.C.
By:
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Name:
Title:
NEW YORK RGI SUB, L.L.C.
By:
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Name:
Title:
RESTAURANT GROUP MANAGEMENT HOLDINGS, INC.
By:
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Name:
Title:
RESTAURANT GROUP MANAGEMENT SERVICE, L.L.C.
By:
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Name:
Title:
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S&W CHICAGO, L.L.C.
By:
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Name:
Title:
S&W OF MIAMI, L.L.C.
By:
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Name:
Title:
S&W OF LAS VEGAS, L.L.C.
By:
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Name:
Title:
S&W D.C., L.L.C.
By:
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Name:
Title:
MOC D.C., L.L.C.
By:
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Name:
Title:
S&W NEW ORLEANS, L.L.C.
By:
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Name:
Title:
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MOC OF MIAMI, L.L.C.
By:
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Name:
Title:
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