Exhibit 4.04(j)
EIGHTH AMENDMENT TO SECOND AMENDED AND RESTATED
REVOLVING CREDIT AND TERM LOAN AGREEMENT
This EIGHTH AMENDMENT (this "Amendment"), executed, delivered, and dated
as of February 12, 1998 (but effective as of the specified Effective Date
referred to below), by and among ▇▇▇▇▇▇'▇ RESTAURANT GROUP, INC., a Delaware
corporation (formerly known as Quantum Restaurant Group, Inc.) having its
principal place of business at ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
Park, New York 11042 (referred to below and in the Credit Agreement, as
defined below, as "Quantum"), PEASANT HOLDING CORP., a Delaware corporation
having its principal place of business at ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ Park, New York 11042 ("Peasant Holding"), ▇▇▇▇▇▇'▇ OF CHICAGO, INC.,
an Illinois corporation with its principal place of business at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Morton's") (Quantum, Peasant
Holding and Morton's are referred to herein collectively as the "Borrowers",
and each, individually, as a "Borrower"), BANKBOSTON, N.A. (formerly known as
The First National Bank of Boston), as Agent (the "Agent") for the Lenders
(as defined in the Credit Agreement referred to below), BANKBOSTON, N.A.
(formerly known as The First National Bank of Boston and referred to below
and in the Credit Agreement, as defined below, as "FNBB") in its individual
capacity as a Lender, and IMPERIAL BANK, as a Lender, amends the Second
Amended and Restated Revolving Credit and Term Loan Agreement dated as of
June 19, 1995, as amended by the First Amendment dated as of February 14,
1996, the Second Amendment dated as of March 5, 1996, a letter agreement
dated as of May 2, 1996, the Third Amendment dated as of June 28, 1996 (the
"Third Amendment"), a letter agreement dated as of November 7, 1996, the
Fourth Amendment dated as of December 26, 1996, the Fifth Amendment dated as
of December 31, 1996, the Sixth Amendment dated as of February 6, 1997, the
Seventh Amendment dated as of June 27, 1997, and as the same may be further
amended, modified, or supplemented from time to time (the "Credit
Agreement"), by and among the Borrowers, the Agent, and the Lenders.
Capitalized terms used but not defined herein shall have the meanings set
forth in the Credit Agreement.
WHEREAS, the Borrowers have requested the Lenders agree to amend certain
provisions of the Credit Agreement relating to the rates of interest
applicable to the Loans, and certain other provisions of the Credit
Agreement; and
WHEREAS, the Agent and the Lenders, subject to the terms and provisions
hereof, have agreed to so amend the Credit Agreement;
NOW THEREFORE, the parties hereto hereby agree as follows:
Section 1. Amendments to Credit Agreement. Subject to the satisfaction
of the conditions precedent set forth in Section 3 hereof, upon the
effectiveness of this Amendment the Credit Agreement is hereby amended as
follows:
Section 1.1. Certain New Definitions. The following new definitions
are hereby added to Section 1 of the Credit Agreement, in the appropriate
location in the alphabetical sequence (upon the effectiveness of this
Amendment, the previously existing definition of Ratio
Calculation Date being hereby deleted in its entirety, and the previously
existing definition of Adjustment Date being hereby deleted and replaced by
the new definition of such term set forth below):
"Adjustment Date. Except as otherwise provided elsewhere
in this Agreement, each Adjustment Date shall be that date which is
the first Business Day which occurs at least forty-five (45) days
after the end of each Fiscal Quarter of the Companies."
"Cash Flow Leverage Ratio. As of any date of
determination, the ratio of (a) Funded Indebtedness outstanding as
of such date, to (b) Consolidated EBITDA for the immediately
preceding four consecutive Fiscal Quarters (treated as a single
accounting period) ended on such date."
"Consolidated EBITDA. For any period, Consolidated
EBITDA shall be equal to Consolidated Net Income for such period
plus (i) Interest Charges, plus (ii) depreciation, amortization,
and other non-cash charges (reduced by any non-cash gains), plus
(iii) federal, state, and local income tax expense for such period."
"Funded Indebtedness. As of any date of determination,
an amount equal to the sum (without duplication) of the
Indebtedness of the Companies (determined on a consolidated basis
in accordance with generally accepted accounting principles) in
respect of the borrowing of money or the obtaining of credit,
including, without limitation, Indebtedness consisting of the
Obligations hereunder in respect of Loans and Letters of Credit
(whether or not contingent), other Indebtedness of the types
referred to in clauses (iii) and (iv) of the definition of
Indebtedness, purchase money Indebtedness, and Indebtedness in
respect of Capitalized Leases, but excluding, in any event, for the
avoidance of doubt, accounts payable and accrued expense
liabilities (in each case) incurred in the ordinary course of
business, any Indebtedness referred to in clause (b) of Section
10.1 hereof, and Operating Leases."
Section 1.2. Certain Accounting Matters. The following new sentence is
hereby added to the definition of Generally Accepted Accounting Principles,
at the end of such definition:
"Without limitation of the generality of the foregoing, for
purposes of calculations of compliance with Sections 10.2, 10.6 and
10.7 hereof, generally accepted accounting principles shall exclude
any future changes thereunder in the accounting treatment of
capitalized start-up expenses and capitalized pre-opening expenses."
Section 1.3. Certain Adjustments to Financial Calculations. The
following new paragraph (j) is hereby added to Section 1.2 of the Credit
Agreement, immediately after paragraph (i) thereof:
"(j) For purposes only of Sections 10.2, 10.6, and 10.7
hereof, the computation of Consolidated EBITDA, and the
determination of the Applicable Margin under Section 2.4 hereof,
the parties agree that any applicable federal tax credits,
associated with excess federal social security taxes previously
paid, earned in any fiscal period, shall (if and to the extent such
taxes were expensed as labor costs when paid) be treated as
reductions in labor cost expense (or reductions in
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other applicable operating expenses), without duplication in each
case, for the period in which such federal tax credits are earned
(rather than as reductions in federal tax expense for such period),
notwithstanding any other provisions of this Agreement to the
contrary."
Section 1.4. Interest on Revolving Credit Loans. Effective as of the
Effective Date referred to below, Sections 2.4(b) and 2.4(c) of the Credit
Agreement are hereby amended in their entirety to read as follows:
"(b) On each Adjustment Date following the end of each
Fiscal Quarter, the Applicable Margin shall be determined on the
basis of the financial statements and Compliance Certificates
required to be delivered under Section 9.4 hereof with respect to
such Fiscal Quarter. The Applicable Margin shall be the applicable
rate per annum set forth in the table below opposite the level of
the Cash Flow Leverage Ratio determined for the applicable fiscal
period of four consecutive Fiscal Quarters, treated as a single
accounting period (as referred to in the definition of Cash Flow
Leverage Ratio), ending on the last day of the Fiscal Quarter that
ended immediately prior to such Adjustment Date (the "Quarter End
Date"). The Applicable Margin that is so determined on each such
Adjustment Date shall be effective with respect to the Loans as
follows: (i) with respect to all Base Rate Loans, such Applicable
Margin shall be deemed to have become effective as of the date
immediately following the preceding Quarter End Date (i.e., as of
the first day of the Fiscal Quarter immediately following such
Quarter End Date) and shall continue to be effective through the
next Quarter End Date; and (ii) with respect to Eurodollar Rate
Loans, such Applicable Margin shall be deemed to have become
effective with respect to all Interest Periods (or the applicable
portions thereof) of Eurodollar Rate Loans for which the Interest
Payment Date occurs on or after such Adjustment Date (but prior to
the next Adjustment Date).
Applicable
Applicable Eurodollar
Pricing Cash Flow Base Rate Rate
Tier Leverage Ratio Margin (p.a.) Margin (p.a.)
------- -------------- ------------- -------------
1 Less than 1:1 0% 0.875%
2 Greater than or equal 0% 1.25%
to 1:1 but less than 1.25:1
3 Greater than or equal 0% 1.50%
to 1:25:1 but less
than 1.50:1
4 Greater than or equal to 0% 1.75%
1.50:1 but less
than 2.00 to 1
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5 Greater than or equal 0% 2.00%
to 2:00:1 but less
than 2.50 to 1
6 Greater than or equal 0.25% 2.25%
to 2.50 to 1 but less
than 3.00 to 1
7 Greater than or equal 0.75% 2.75%
to 3:00 to 1
(c) Notwithstanding the foregoing provisions,
(i) the initial Adjustment Date shall be deemed to occur
on February 15, 1998 (notwithstanding the definition of Adjustment
Date in Section 1 hereof) with the Applicable Margin to be
determined on such date on the basis of the calculation of the Cash
Flow Leverage Ratio for the fiscal period of four consecutive
Fiscal Quarters ended in December 1997 (treated as a single
accounting period); thereafter, each Adjustment Date subsequent to
each applicable Quarter End Date shall be such date as is provided
in the definition of Adjustment Date in Section 1 hereof;
(ii) if the Companies fail to deliver any financial
statements or Compliance Certificates (as the case may be) required
under Section 9.4 hereof with respect to any Fiscal Quarter on or
prior to the scheduled Adjustment Date immediately following such
Fiscal Quarter, then (notwithstanding such failure) the Applicable
Margin shall be deemed provisionally set on such Adjustment Date at
that "Tier" which was determined on the prior Adjustment Date;
provided, however, in the event such failure to deliver such
financial statements or Compliance Certificates (as the case may
be) is subsequently cured, the Applicable Margin shall be
appropriately re-adjusted and shall be deemed to have been
initially set on such scheduled Adjustment Date at that correct
"Tier" which should have been set on such Adjustment Date had such
failure not occurred; in any event, the Applicable Margin so
determined under this paragraph (c)(ii) shall be effective with
respect to the Loans as provided in paragraph (b) above; and
(iii) if, as a result of any such delay in delivery
of financial statements or Compliance Certificates (as the case may
be) as described above, or as a result of any such delay as
described above in correctly determining the Applicable Margin that
should have been determined on the relevant Adjustment Date, or for
any other reason, an incorrect interest rate shall have been
applied hereunder to the Loans, then such interest rate
determination shall be appropriately corrected retroactively, and
within three (3) Business Days after written notice thereof in
reasonable detail requesting a retroactive correction of interest
previously paid given by either the Borrowers, the Agent or any
Lender, the Borrowers shall pay to the Lenders, or (as the case may
be) the Lenders on a several and ratable basis shall credit the
Borrowers with, the amount of the appropriate retroactive
correction in the amount of interest paid with respect to the
Loans."
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Section 1.5. Reporting Provisions. Section 9.4(d) of the Credit
Agreement is hereby amended by deleting the phrase "at the delivery of each
fiscal monthly statement under Section 9.4(c), a calculation of the Leverage
Ratio as of the end of such fiscal monthly period, in reasonable detail," and
inserting in its place the phrase "including in such Compliance Certificate
to be prepared for each such fiscal quarter, a calculation of the Cash Flow
Leverage Ratio as of the end of such fiscal quarter, to be provided in
reasonable detail," immediately before the word "sufficient" in the
next-to-last line of Section 9.4(d).
Section 1.6. Change In Financial Covenants. Section 10.7 of the Credit
Agreement is hereby amended in its entirety to read as follows:
"Section 10.7. Cash Flow Leverage Ratio. The Cash Flow
Leverage Ratio, determined as of the end of any Fiscal Quarter,
shall not exceed 4.00 to 1."
Section 1.7. Deletion of Net Worth Covenant. Section 10.8 of the
Credit Agreement is hereby deleted.
Section 2. Representations and Warranties. The Borrowers hereby
represent and warrant to the Agent and the Lenders as follows:
(a) Representations and Warranties in Credit Agreement.
Except as specified in writing by the Borrowers to the Agent with
respect to the subject matter of this Amendment prior to the
execution and delivery hereof by the Agent and the Lenders, the
representations and warranties of the Borrowers contained in the
Credit Agreement were true and correct in all material respects
when made and continue to be true and correct in all material
respects on and as of the date hereof, and as of the Effective
Date, except, in each case to the extent of changes resulting from
transactions contemplated or permitted by the Loan Documents and
this Amendment and changes occurring in the ordinary course of
business which singly or in the aggregate are not materially
adverse, and to the extent that such representations and warranties
relate expressly to an earlier date.
(b) Authority, No Conflicts, Enforceability of Obligations,
Etc. Each of the Borrowers hereby confirms that the
representations and warranties of the Borrowers contained in
Sections 6.1, 6.3 and 6.4 of the Credit Agreement are true and
correct on and as of the date hereof, and as of the Effective Date,
as if made on each such date, treating this Amendment, the Credit
Agreement as amended hereby, and the other Loan Documents as
amended hereby, as "Loan Documents" for the purposes of making said
representations and warranties.
Section 3. Conditions to Effectiveness. This Amendment shall be deemed
to be effective as of February 15, 1998 (the "Effective Date"), subject to
the delivery to the Agent and the Lenders by (or on behalf of) each of the
Borrowers or the Guarantors, as the case may be, of each of the following,
each in form and substance satisfactory to the Agent and the Lenders:
(a) this Amendment signed by each of the Borrowers, each of
the Guarantors, the Agent, and each of the Lenders;
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(b) such evidence as the Agent may reasonably request such
that the Agent shall be satisfied that the representations and
warranties contained in Section 2 hereof are true and correct on
and as of date hereof and as of the Effective Date; and
(c) such other certificates, documents, or instruments with
respect to this Amendment, the Borrowers, and the Guarantors as the
Agent or the Lenders may reasonably request.
Section 4. No Other Amendments or Waivers; Execution in Counterparts.
Except as otherwise expressly provided by this Amendment, all of the terms,
conditions and provisions of the Credit Agreement and the other Loan
Documents shall remain in full force and effect. Each of the Borrowers and
the Guarantors confirms and agrees that the Obligations of the Borrowers to
the Lenders under the Loan Documents, as amended and supplemented hereby, are
secured by, guarantied under, and entitled to the benefits, of the Security
Documents. The Borrowers, the Guarantors, the Agent and the Lenders hereby
acknowledge and agree that all references to the Credit Agreement and the
Obligations thereunder contained in any of the Loan Documents shall be
references to the Credit Agreement and the Obligations, as amended hereby and
as the same may be amended, modified, supplemented, or restated from time to
time. The Security Documents and the perfected first priority security
interests of the Lenders thereunder as collateral security for the
Obligations shall continue in full force and effect, and the collateral
security and guaranties provided for in the Security Documents shall not be
impaired by this Amendment. This Amendment may be executed in any number of
counterparts, but all such counterparts shall together constitute but one
instrument. In making proof of this Amendment it shall not be necessary to
produce or account for more than one counterpart signed by each party hereto
by and against which enforcement hereof is sought.
Section 5. Governing Law. This Amendment shall be construed according
to and governed by the internal laws of the Commonwealth of Massachusetts
without reference to principles of conflicts of law.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized.
The Borrowers:
▇▇▇▇▇▇'▇ RESTAURANT GROUP, INC.
PEASANT HOLDING CORP.
▇▇▇▇▇▇'▇ OF CHICAGO, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President and Chief
Financial Officer
BANKBOSTON, N.A. (formerly known as The First
National Bank of Boston), for itself and as Agent
By: /s/ ▇▇ ▇▇▇▇▇
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Name: ▇▇ ▇▇▇▇▇
Title: V.P.
IMPERIAL BANK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
Consented and agreed to, by each of
THE GUARANTORS (as defined in the Credit
Agreement)
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer for each of the
Guarantors
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