THIRD AMENDMENT TO CREDIT AGREEMENT
Exhibit
10.31
THIRD
AMENDMENT TO CREDIT AGREEMENT
This
Third Amendment (this “Third
Amendment”
is
made
as of July 31, 2006 by and between KFLG WATERTOWN, INC., a Massachusetts
corporation, with an address at 000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, XX
00000 (the “Borrower”),
and
TD BANKNORTH, N.A., a national banking association with an office at 000 Xxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 (the “Lender”).
A. The
Lender and the Borrower are parties to that certain Credit Agreement, dated
as
of May 27, 2005, as amended by that certain First Amendment to Credit Agreement,
dated as of December 31, 2005, and as further amended by that certain Second
Amendment to Credit Agreement dated as of May 31, 2006 (as the same is and
may
hereafter be amended from time to time, the “Credit
Agreement”)
Capitalized terms used herein without definition have the meanings assigned
to
them in the Credit Agreement.
B. The
Borrower has requested that the Lender make certain modifications to the terms
and conditions of the Credit Agreement as described herein.
C. Subject
to certain terms and conditions, the Lender is willing to agree to the same,
as
hereinafter set forth.
I. AMENDMENTS
TO CREDIT AGREEMENT.
A. Section
5.9 of the Credit Agreement entitled “Additional
Collateral; Subsidiaries; New Units”
is
hereby amended by deleting subsection (b) in its entirety and by substituting
the following therefor:
“(b)
Not
form or acquire any direct or indirect Subsidiary, except: (i) the Borrower
as a
wholly-owned Subsidiary of the Guarantor; (ii) KnowFat of Downtown Crossing,
Inc., as a wholly-owned Subsidiary of the Borrower; and (iii) KnowFat of
Landmark Center, Inc., as a wholly-owned Subsidiary of the
Borrower.”
B. Section
5.9 of the Credit Agreement entitled “Additional
Collateral; Subsidiaries; New Units”
is
hereby further amended by deleting subsection (d) in its entirety and by
substituting the following therefor:
“(d)
Insure that all Units opened after the date hereof are owned by the Borrower;
provided, however, that KnowFat of Landmark Center, Inc. may own the Unit
located at Landmark Center, 0000 Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx (the
“Landmark
Center Restaurant”).
Except for the Landmark Center Restaurant, any interest in any restaurant or
Unit now or hereafter acquired by the Guarantor shall be an asset owned directly
by the Borrower.”
C. Section
6.1(a) of the Credit Agreement entitled “Minimum
Additional New Equity”
is
hereby deleted in its entirety and the following is substituted
therefor:
“(a)
Minimum
Additional New Equity
Fail to
cause the Guarantor to raise the Additional New Equity by December 31,
2006.”
D. Section
6.2 of the Credit Agreement entitled “Indebtedness”
is
hereby amended by deleting the word “and” at the end of subsection (e) thereof,
substituting a semi-colon for the period at the end of subsection (f) thereof,
and adding the following new subsections (g) and (h) immediately following
subsection (f) thereof as follows:
“(g)
Indebtedness and obligations of KnowFat of Landmark Center, Inc. (“KnowFat
Landmark”)
to KF
Partners Boston Limited Partnership, a Massachusetts limited partnership
(“LP”)
and
Xxxxxxx Management Group, LLC, a Massachusetts limited liability company and
the
general partner of LP (“GP”)
pursuant to a certain Asset Purchaser Agreement among LP, GP and KnowFat
Landmark dated as of September 6, 2006;
(h)
Indebtedness and obligations of the Guarantor to LP and GP pursuant to that
certain Guaranty of the Guarantor in favor of GP and LP dated as of September
6,
2006.”
E. Section
6.3 of the Credit Agreement entitled “Liens”
is
hereby amended by deleting the word “and” at the end of subsection (f) thereof,
substituting a semi-colon for the period at the end of subsection (g) thereof,
and adding the following new subsection (h) immediately following subsection
(g)
thereof as follows:
“
(h)
Liens granted by KnowFat Landmark in favor of LP and/or GP pursuant to a certain
Security Agreement from KnowFat Landmark dated as of September 6, 2006 securing
the Indebtedness and obligations described in Section 6.2(g)
hereof.”
F. Section
8.2 of the Credit Agreement entitled “Notices” is hereby amended by deleting the
notice address for the Borrower in its entirety and by substituting the
following therefor:
“Borrower:
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KFLG
Watertown, Inc.
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000
Xxxxxxxxxx Xxxxxx
|
|
Xxxxx
000
|
|
Xxxxxx,
Xxxxxxxxxxxxx 00000
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|
Attention:
Xxxx Xxxxx
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Telecopy:
000-000-0000
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Telephone:
000-000-0000”
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II. OTHER
AMENDMENTS TO LOAN DOCUMENTS
A.
Section
5.1 of the Guarantee and Security Agreement between the Lender and the Guarantor
(the “Guarantee”)
entitled “Minimum
Cash Balance”
is
hereby deleted in its entirety and the phrase “Intentionally Omitted” is
substituted therefor.
B. Schedule
A
to the
Guarantee is hereby amended to delete the Notice Address for the Guarantor
in
its entirety and by substituting the following Notice Address therefor:
KnowFat
Franchise Company, Inc.
000
Xxxxxxxxxx Xxxxxx
Xxxxx
000
Xxxxxx,
Xxxxxxxxxxxxx 00000
Attention:
Xxxx Xxxxx
Telecopy:
000-000-0000
Telephone:
000-000-0000
C. Schedule
D
to the
Guarantee is hereby amended to reflect that the chief executive office of the
Guarantor is at: 000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxxxxx
00000.
D. The
Borrower agrees that it will not permit any amendment to any of the following
agreements without the prior written consent of the Lender: (a) the Asset
Purchase Agreement among KF Partners Boston Limited Partnership, Xxxxxxx
Management Group, LLC and KnowFat Landmark Center, Inc. dated as of September
6,
2006; (b) the Security Agreement in favor of KF Partners Boston Limited
Partnership and Xxxxxxx Management Group, LLC from KnowFat Landmark Center,
Inc.
dated as of September 6, 2006; and (c) the Guaranty of the Guarantor in favor
of
KF Partners Boston Limited Partnership and Xxxxxxx Management Group, LLC dated
as of September 6, 2006.”
E. Notwithstanding
any representation, warranty or covenant contained in the Credit Agreement
or
any of the other Loan Documents to the contrary, the Lender agrees and
acknowledges that the priority of the Permitted Liens in favor of LP and GP
shall be governed by a certain Lien Subordination Agreement between the Lender
and LP and GP dated September 6. 2006.
III. NO
FURTHER AMENDMENTS.
Except
as
specifically amended herein, all terms and conditions of the Credit Agreement
shall remain in fill force and effect as originally constituted and is hereby
ratified and affirmed in all respects, and the indebtedness of the Borrower
to
the Lender evidenced hereby and by the Note is hereby reaffirmed in all respects
This Third Amendment constitutes an amendment to and modification of the Credit
Agreement On and after the date hereof, each reference in the Credit Agreement
to “this Agreement”, “hereunder”, “hereof” or words of like import referring to
the Credit Agreement, shall mean and be a reference to the Credit Agreement
as
amended by this Third Amendment, and each reference in any Loan Document between
the Borrower and the Lender or, the Guarantor and the Lender, to the credit
Agreement, “thereunder”, “thereof’ or words of like import referring the Credit
Agreement shall mean a reference to the Credit Agreement as amended by this
Third Amendment.
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IV. REPRESENTATIONS,
WARRANTIES AND COVENANTS.
The
Borrower represents, warrants and covenants as follows as of the date
hereof:
A. Each
of
the representations and warranties contained in the Credit Agreement, as amended
by this Third Amendment, and the other Loan Documents are true and correct
as of
the date hereof. No material adverse change has occurred in the assets,
liabilities, financial condition, business or prospects of the Borrower or
the
Guarantor from that disclosed in the management-prepared financial statements
most recently distributed to the Lender. No Default or Event of Default has
occurred or is continuing.
B. The
Credit Agreement, as amended by this Third Amendment, constitutes the legal,
valid and binding obligations of the Borrower, enforceable against it in
accordance with their respective terms, subject to bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the rights and remedies
of
creditors generally or the application of principles of equity, whether in
any
action at law or proceeding in equity, and subject to the availability of the
remedy of specific performance or of any other equitable remedy or relief to
enforce any right thereunder.
C. The
execution and delivery of this Third Amendment and the other documents, if
any,
by the Borrower and the transactions contemplated hereby are within the
corporate power and authority of the Borrower and have been authorized by all
necessary corporate proceedings, and do not and will not (i) contravene any
provision of the charter documents or by-laws of the Borrower or any law, rule
or regulation applicable to the Borrower; (ii) contravene any provision of,
or
constitute an event o f default or event that, but for the requirement that
time
elapse or notice be given (or both) would constitute an event of default under,
any other agreement, instrument, order or undertaking binding on the Borrower;
or (iii) result in or require the imposition of any encumbrance or lien on
any
of the properties, assets or rights of the Borrower (other than pursuant to
any
Security Document executed in connection with the Credit
Agreement).
D. The
Borrower and the Lender acknowledge and agree that but for this Third Amendment,
the Borrower would have been in default under the terms and conditions o f
the
Credit Agreement; and that the terms and conditions set forth herein and the
avoidance of such a default constitute fair and adequate consideration mutually
exchanged by the Borrower and the Lender in their execution and delivery of
this
Third Amendment.
V. CONDITIONS.
A. This
Third Amendment shall become effective on the first date on which the Borrower
shall have executed and/or delivered to the Lender (or shall have caused to
be
executed and delivered to the Lender by the appropriate persons) the
following:
1. This
Third Amendment;
2. A
Guarantee and Security Agreement from KnowFat of Landmark Center, Inc. in favor
of the Lender; and
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3. Such
other supporting documents and certificates as the Lender or its counsel may
reasonably request.
B. All
legal
matters incident to the transactions contemplated hereby shall be satisfactory
to counsel for the Lender.
VI. CONFIRMATION
OF SECURITY.
The
Obligations of the Borrower to the Lender, including, without limitation, the
liabilities and obligations of the Borrower under the Credit Agreement, as
amended hereby, and the Notes, are secured by, and entitled to all benefits
of,
the Security Agreement, the Guarantee and Security Agreement, any Mortgage,
any
Leasehold Security Document, and any other collateral granted by the Borrower
or
Guarantor to the Lender. The Covered Parties confirm and reaffirm that each
has
granted to Lender a security interest in, among other property, its deposit
accounts and all credits or proceeds thereto and all monies, checks and other
instruments held or deposited therein.
VII. MISCELLANEOUS
A. The
Borrower represents, warrants, and agrees that, to its know1edge, the Borrower
has no claims, defenses, counterclaims or offsets against the Lender in
connection with the Credit Agreement or the Obligations, and, to the extent
that
any claim, defense, counterclaim, or offset may exist, the Borrower thereby
affirmatively WAIVES AND RELEASES the Lender from the same.
B. This
Third Amendment shall take effect as a sealed instrument under the laws of
The
Commonwealth of Massachusetts.
C. This
Third Amendment may be executed by the parties hereto in several counterparts
hereof and by the different parties hereto on separate counterparts hereof,
all
of which counterparts shall together constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Third Amendment
by facsimile shall be effective as delivery of a manually executed counterpart
of this Third Amendment.
[SIGNATURE
PAGE FOLLOWS]
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KFLG
WATERTOWN, INC.
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By:
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Name: | |
Title: | |
TD
BANKNORTH, N.A.
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By:
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Name: | |
Title: |
By
its
signature below, KnowFat Franchise Company, Inc. hereby agrees and acknowledges
that it shall not grant any liens or security interests on any of its assets
in
favor of KF Partners Boston Limited Partnership (“LP”) or Xxxxxxx Management
Group, LLC (“GP”) to secure any of its obligations to LP or GP under its
Guaranty in favor of LP and GP dated as of September 6, 2006.
KNOWFAT
FRANCHISE COMPANY, INC.
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By:
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Name: | |
Title: |
[Signature
Page to Third Amendment to Credit Agreement]