EXHIBIT 10.8
SECOND AMENDMENT TO CREDIT AGREEMENT
This SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), made and
entered into as of December 24, 1999, is by and between BUCA, INC., a Minnesota
corporation (the "Borrower"), the banks which are signatories hereto
(individually, a "Bank" and, collectively, the "Banks"), BANK OF AMERICA, N.A.,
a national banking association ("B of A"), as one of the Banks and as co-agent
for the Banks (in such capacity, a "Co-Agent"), BANKBOSTON, N.A., a national
banking association, as one of the Banks and as co-agent for the Banks (in such
capacity, a "Co-Agent") and U.S. BANK NATIONAL ASSOCIATION, a national banking
association, as one of the Banks, and as agent for the Banks (in such capacity,
the "Agent").
RECITALS
--------
1. U.S. Bank National Association, as Agent and as a Bank, and Bank of
America, N.A., as Co-Agent and as a Bank, and the Borrower entered into a Credit
Agreement dated as of September 27, 1999, as amended by that First Amendment to
Credit Agreement dated as of October 21, 1999 among U.S. Bank National
Association, as Agent and as a Bank, Bank of America, N.A., as Co-Agent and as a
Bank, and BankBoston, N.A., as Co-Agent and a Bank (the "Credit Agreement"); and
2. The Borrower has requested that the Banks amend the Credit Agreement in
certain respects.
3. The parties desire to amend the Credit Agreement, subject to the terms
and conditions set forth in this Amendment.
AGREEMENT
---------
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto hereby covenant
and agree to be bound as follows:
Section 1. Capitalized Terms. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to them in the Credit
Agreement, unless the context shall otherwise require.
Section 2. Amendment. The Credit Agreement is hereby amended as follows:
2.1 Definitions
(a) The following new definitions of "Equity Interests" and
"Pledge Agreement (Subsidiary)" are hereby added to the Credit
Agreement in the correct alphabetical order thereto, and the form of
Pledge Agreement (Subsidiary) attached hereto is hereby made part of
the Credit Agreement as Exhibit 1.1-2A thereto:
"Equity Interests": Ownership or equity interests
(including, without limitation, an interest in the profits
of any entity) in any corporation, limited liability
company, association, partnership (whether general or
limited), limited liability partnership, joint venture,
trust, or business trust.
"Pledge Agreement (Subsidiary)": A pledge agreement in the
form of Exhibit 1.1-2A hereto.
(b) The definitions of "Affiliate", "Partially Owned
Subsidiaries", "Restricted Payments", "Subsidiary", and "Wholly-owned
Subsidiary" are hereby amended in their entireties to read as follows:
"Affiliate": When used with reference to any Person, (a) each
Person that, directly or indirectly, controls, is controlled by
or is under common control with, the Person referred to, (b) each
Person which beneficially owns or holds, directly or indirectly,
five percent or more of any class of voting Equity Interests of
the Person referred to, (c) each Person, five percent or more of
the voting Equity Interest of which is beneficially owned or
held, directly or indirectly, by the Person referred to, and (d)
each of such Person's officers, directors, joint venturers,
governors and partners (both general and limited). The term
control (including the terms "controlled by" and "under common
control with") means the possession, directly, of the power to
direct or cause the direction of the management and policies of
the Person in question.
"Partially-Owned Subsidiaries": Subsidiaries in which the
Borrower, directly or through its Subsidiaries, owns less than
100% of the securities or other Equity Interests having ordinary
voting power for the election of the board of directors or other
Persons performing similar functions (other than qualifying
shares or other Equity Interests held by directors or other
Persons performing similar functions) or, in the case of a
partnership, less than a 100% interest in the profits or capital
thereof.
"Restricted Payments": With respect to the Borrower and the
Partially-Owned Subsidiaries, collectively, all dividends or
other distributions of any nature (whether in cash, securities or
Equity Interests of the Borrower or the Partially-Owned
Subsidiaries, assets or otherwise) on or in respect of, and all
payments on, any class of Equity Interests (including warrants,
options or rights therefor, but excluding Indebtedness which is
convertible into any Equity Interest, including without
limitation
-2-
common or preferred stock, which is itself not convertible into
Indebtedness) issued by the Borrower or any of the
Partially-Owned Subsidiaries, whether such Equity Interests are
authorized or outstanding on the Closing Date or at any time
thereafter, and any redemption or purchase of, or distribution in
respect of, any of the foregoing, whether directly or indirectly,
including any Equity Interest of the Borrower or any or the
Partially-Owned Subsidiaries.
"Subsidiary": Any corporation or other entity of which Equity
Interests having ordinary voting power for the election of a
majority of the board of directors or other Persons performing
similar functions are owned by the Borrower either directly or
through one or more Subsidiaries, and any partnership if more
than a 50% interest in the profits or capital thereof is owned by
the Borrower either directly or though one or more Subsidiaries
(unless such partnership can and does ordinarily take major
business actions without the prior approval of the Borrower or
one or more Subsidiaries).
"Wholly Owned Subsidiaries": Subsidiaries which are not
Partially-Owned Subsidiaries.
2.2 Organization, Standing, Etc. Section 4.1 of the Credit Agreement
is hereby amended (i) by restating the second sentence thereof in its
entirety to read as follows:
Each Subsidiary is a corporation, limited partnership or limited
liability company duly formed and validly existing and in good
standing under the laws of the jurisdiction of its organization and
has all requisite corporate, limited partnership or limited liability
company power and authority to carry on its business as now conducted.
and (ii) by deleting the phrase "foreign corporation" and replacing it
with "foreign corporation, limited partnership or limited liability
company".
2.3 Capitalization of the Borrower and Subsidiaries: Subsection (b)
and the following paragraph thereof in Section 4.21 of the Credit Agreement
are hereby amended in their entireties to read as follows:
(b) a list of all Subsidiaries of the Borrower and, as applicable, the
number and percentage of the authorized, issued and outstanding Equity
Interests owned beneficially or of record by the Borrower or any such
Subsidiary therein, and the jurisdiction or organization of that
Subsidiary.
As of the Closing Date, all of the outstanding capital stock of the
Borrower will be validly issued, fully paid and nonassessable, and all of
the outstanding Equity Interests of the Subsidiaries will be validly
issued, fully paid and nonassessable, and will be owned beneficially
-3-
and of record directly as set forth on Schedule 4.21, subject to no Liens
other than Liens in favor of the Agent, for itself and the benefit of the
Banks, and the restrictions set forth in Schedule 4.21. Except as reflected
on Schedule 4.21, as of the Closing Date, none of the Subsidiaries has
outstanding any capital stock appreciation or phantom capital stock rights
or plans or other similar rights with respect to its Equity Interests, or
is subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any of its Equity Interests. Except as set
forth on Schedule 4.21, there are no statutory or contractual preemptive
rights or rights of first offer or refusal with respect to the Equity
Interests of any of the Subsidiaries. Neither the Borrower nor any of the
Subsidiaries has violated any applicable securities laws in connection with
the offer, sale or issuance of any of its respective Equity Interests.
2.4 Corporate Existence. Section 5.2 of the Credit Agreement is hereby
amended by deleting the word "corporation" where it appears therein and
replacing it with the phrase "corporation, limited partnership or limited
liability company".
2.5 New Restaurants. Section 5.19 of the Credit Agreement is hereby
amended in its entirety to read as follows:
Section 5.19 New Restaurants. The Borrower agrees that each new
Restaurant created or acquired from and after the Closing Date shall
be owned or leased and operated only by a Wholly-Owned Subsidiary, the
Equity Interests which Equity Interests shall be certificated) of
which have been pledged and delivered to the Agent pursuant to the
Pledge Agreement or the Pledge Agreement (Subsidiary), as applicable.
2.6 Subsidiaries. Section 6.5 of the Credit Agreement is hereby
amended to read in its entirety as follows:
Section 6.5 Subsidiaries. After the date of this Agreement, the
Borrower will not, and will not permit any Subsidiary to, form or
acquire any Person which would thereby become a Subsidiary, except
that, the Borrower or any Subsidiary may form a corporation, limited
liability company, or limited partnership ("New Entity") that would
thereby become a Wholly-Owned Subsidiary provided such Borrower or
Subsidiary provides 30 days' prior written notice to the Agent of any
capitalization of such New Entity in excess of any deminimus
capitalization necessary for the organization of such New Entity. In
the event the Borrower hereafter forms a New Entity that thereby
becomes a Wholly-Owned Subsidiary, then upon such formation such New
Entity shall promptly: (a) certificate all Equity Interests in such
New Entity in form and substance reasonably satisfactory to the Agent
and its counsel; and (b) deliver a Guaranty, a Security Agreement
(Guarantor) and related UCC financing statements for filing in such
-4-
jurisdictions as the Agent shall request, all duly executed by such
New Entity, and the Borrower shall deliver to the Agent (x) in the
case of a New Entity owned directly by the Borrower, an amendment to
the Pledge Agreement in respect of such New Entity in form and
substance reasonably satisfactory to the Agent; and (y) in the case of
a New Entity owned by a Subsidiary, a Pledge Agreement (Subsidiary) in
respect of such New Entity, in each case duly executed by the Borrower
or the applicable Subsidiary, and the certificates representing the
Borrower's or the applicable Subsidiary's ownership of 100% of the
Equity Interests of such New Entity, together with stock powers or
other comparable assignment forms related thereto requested by the
Agent.
2.7 Capital Expenditures. Section 6.10 of the Credit Agreement is
hereby amended to read in its entirety as follows:
Section 6.10 Capital Expenditures. The Borrower will not, and will not
permit any Subsidiary to, make Capital Expenditures in an amount
exceeding, on a consolidated basis, $31,000,000 during Fiscal Year
1999 and $22,000,000 during any Fiscal Year thereafter; provided that
all Capital Expenditures shall be invested in the development of new
Restaurants or the maintenance of existing Restaurants or in the
construction, acquisition, repair or maintenance of the Borrower's
corporate headquarters.
2.8 Investments. Section 6.12(h) of the Agreement is hereby amended to
read in its entirety as follows:
6.12(h) Equity Interests in any Subsidiary, the formation or
acquisition of which is permitted under Section 6.5.
2.9 Modification of Ownership or Equity Structure. Section 6.23 of the
Credit Agreement is hereby amended to read in its entirety as follows:
Section 6.23 Modification of Ownership or Equity Structure. The
Borrower will not permit any Subsidiary to issue or authorize the
issuance of Equity Interests of such Subsidiary (other than qualifying
shares or other Equity Interest held by directors or other Persons
performing similar functions) which would result in any other Person
becoming an owner thereof; issue or authorize the issuance of options
to purchase Equity Interests of such Subsidiary which immediately, or
in the future upon the exercise of rights granted therein, would
result in any other Person becoming an owner thereof; issue or
authorize the issuance of warrants to purchase Equity Interests of
such Subsidiary which immediately, or in the future upon the exercise
of rights granted therein, would result in any other Person becoming
an owner thereof; issue or authorize the issuance of securities or
instruments convertible into Equity Interests of such Subsidiary which
immediately, or in the future upon the exercise of rights granted
-5-
therein, would result in any other Person becoming an owner thereof;
or authorize, issue or grant any stock appreciation rights, phantom
stock, profit participations or other similar rights with respect to
the Equity Interests of such Subsidiary which immediately, or in the
future upon the exercise of rights granted therein, would result in
any other Person becoming an owner thereof.
Section 3. Effectiveness of Amendments. The amendments contained in this
Amendment shall become effective upon delivery by the Borrower of, and
compliance by the Borrower with, the following:
3.1 This Amendment, duly executed by the Borrower.
3.2 A certificate of the Secretary or Assistant Secretary of the
Borrower (a) certifying as to a copy of the resolutions of the Board of
Directors of the Borrower authorizing the execution, delivery and
performance of this Amendment, (b) certifying that there has been no
amendment to the Articles of Incorporation or Bylaws of the Borrower since
true and accurate copies of the same were delivered to the Agent with a
certificate of the Secretary of the Borrower dated September 27, 1999, and
(c) certifying as to the name, title, and specimen signature of the officer
or officers of the Borrower authorized to execute this Amendment, and any
other instrument or agreement executed by the Borrower in connection with
this Amendment.
3.3 Payment of all reasonable unpaid legal fees and other
out-of-pocket expenses incurred by the Agent through the date of this
Amendment in connection with this Amendment of which the Borrower has been
notified as of the date of this Amendment.
Section 4. Representations, Warranties, Authority, No Adverse Claim.
4.1 Reassertion of Representations and Warranties, No Default. The
Borrower hereby represents that on and as of the date hereof and after
giving effect to this Amendment (a) all of the representations and
warranties contained in the Credit Agreement are true and correct in all
respects as of the date hereof as though made on and as of such date,
except for changes permitted by the terms of the Credit Agreement, and (b)
there will exist no Default or Event of Default under the Credit Agreement
as amended by this Amendment on such date which has not been waived by the
Agent.
4.2 Authority, No Conflict, No Consent Required. The Borrower
represents and warrants that the Borrower has the corporate power and
authority to enter into this Amendment and has duly authorized the
execution and delivery of this Amendment and any other agreements and
documents executed and delivered by the Borrower in connection herewith by
proper corporate action, and, except as set forth in Schedule 4.3 to the
Credit Agreement, none of this Amendment nor
-6-
the agreements contained herein contravenes or constitutes a default under
any agreement, instrument or indenture to which the Borrower is a party or
a signatory or a provision of the Borrower's Articles of Incorporation,
Bylaws or any requirement of law presently in effect and applicable to the
Borrower, or results in the imposition of any Lien on any of its property
under any agreement binding on or applicable to the Borrower or any of its
property except, if any, in favor of the Agent and except where the
contravention or default or the imposition of such Lien could not adversely
affect the validity or enforceability of this Amendment or constitute a
Material Adverse Occurrence. The Borrower represents and warrants that,
except as set forth in Schedule 4.3 to the Credit Agreement, no consent,
approval or authorization of or registration or declaration with any
Person, including but not limited to any governmental authority, is
required on the part of the Borrower in connection with the execution and
delivery by the Borrower of this Amendment or any other agreements and
documents executed and delivered by the Borrower in connection herewith or
the performance of obligations of the Borrower herein described, except for
those which the Borrower has obtained or provided and as to which the
Borrower has delivered certified copies of documents evidencing each such
action to the Agent and except where the failure to obtain such consent,
approval or authorization or to make such registration or declaration could
not adversely effect the validity or enforceability of this Amendment or
constitute a Material Adverse Occurrence.
4.3 No Adverse Claim. The Borrower warrants, acknowledges and agrees
that to the Borrower's knowledge no events have been taken place and no
circumstances exist at the date hereof which would give the Borrower a
basis to assert a defense, offset or counterclaim to any claim of the Banks
with respect to the Borrower's obligations under the Credit Agreement as
amended by this Amendment.
Section 5. Affirmation of Credit Agreement, Further References, Affirmation
of Security Interest. The Banks and the Borrower each acknowledge and affirm
that the Credit Agreement, as hereby amended, is hereby ratified and confirmed
in all respects and all terms, conditions and provisions of the Credit
Agreement, except as amended by this Amendment, shall remain unmodified and in
full force and effect. All references in any document or instrument to the
Credit Agreement are hereby amended and shall refer to the Credit Agreement as
amended by this Amendment. The Borrower confirms to the Banks that the
Borrower's obligations under the Credit Agreement, as amended by this Amendment,
are and continue to be secured by the security interest granted by the Borrower
in favor of the Agent under that certain Security Agreement (Borrower), that
certain Pledge Agreement, and that certain Collateral Assignment of Trademarks,
all dated as of September 27, 1999, and made by the Borrower in favor of the
Agent, and all of the terms, conditions, provisions, agreements, requirements,
promises, obligations, duties, covenants and representations of the Borrower
under such documents and any and all other documents and agreements entered into
with respect to the obligations under the Credit Agreement are incorporated
herein by reference and are hereby ratified and affirmed in all respects by the
Borrower.
-7-
Section 6. Successors. This Amendment shall be binding upon the Borrower
and the Banks and their respective successors and assigns, and shall inure to
the benefit of the Borrower and the Banks and the successors and assigns of the
Banks.
Section 7. Legal Expenses. As provided in Section 9.2 of the Credit
Agreement, the Borrower agrees to reimburse the Agent, upon execution of this
Amendment, for all reasonable out-of-pocket expenses (including reasonable
attorney' fees and legal expenses of Xxxxxx & Xxxxxxx LLP, counsel for the
Agent) incurred in connection with negotiation, preparation and execution of
this Amendment and all other documents negotiated, prepared and executed in
connection with this Amendment, and in enforcing the obligations of the Borrower
under this Amendment, and to pay and save the Banks harmless from all liability
for any stamp or other taxes which may be payable with respect to the execution
or delivery of this Amendment, which obligations of the Borrower shall survive
any termination of the Credit Agreement.
Section 8. Counterparts. This Amendment may be executed in several
counterparts as deemed necessary or convenient, each of which, when so executed,
shall be deemed an original, provided that all such counterparts shall be
regarded as one and the same document, and any party to this Amendment may
execute such agreement by executing a counterpart of such agreement.
Section 9. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAW
PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS, THEIR HOLDING COMPANIES AND THEIR AFFILIATES.
-8-
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date and year first above written.
BORROWER: BUCA, INC.
By: /s/ Xxxx Xxxxx
--------------------------------
Title: Chief Financial Officer
--------------------------------
Address:
Attention: Xxxx X. Xxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
AGENT: U.S. BANK NATIONAL ASSOCIATION
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------------
Title: Commercial Banking Officer
--------------------------------
Address:
Attention: Xxxxxx X. Xxxxxxxxx MPFP0602
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
S-1
Signature Page to Second Amendment
CO-AGENT: BANK OF AMERICA, N.A.
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------
Title: Vice President
--------------------------------
Address:
Attention: Xxxxxxx X. Xxxxxxxx, Xx.
IL1-231-06-13
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
S-2
Signature Page to Second Amendment
CO-AGENT: BANKBOSTON, N.A.
By: /s/ Xxxxxxxxxxx Xxxxx
--------------------------------
Title: Division Executive
--------------------------------
Address:
Attention: Xxxxxxxxxxx X. Xxxxx
XX 00-00-00
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
S-3
Signature Page to Second Amendment
