FOURTH AMENDMENT
Exhibit 10.1
Execution Version
THIS FOURTH AMENDMENT (this “Agreement”), is made and entered into as of December 5,
2008, with an effective date set forth in Section 4 hereof, by and among O’CHARLEY’S INC.,
a Tennessee corporation (the “Borrower”), the Lenders party to the Credit Agreement
referred to below and identified on the signature pages hereto as a “Lender” (the
“Lenders”), and WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent (the
“Administrative Agent”).
Statement of Purpose
The Borrower, the Lenders and the Administrative Agent are parties to that certain Second
Amended and Restated Credit Agreement dated as of October 18, 2006 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”), pursuant to
which the Lenders have extended certain credit facilities to the Borrower.
The Borrower has requested, and the Lenders and the Administrative Agent have agreed, subject
to the terms and conditions set forth herein, to amend the Credit Agreement and waive an Event of
Default that may have occurred, each as specifically set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. Capitalized Terms. All capitalized undefined terms used in this Agreement
(including, without limitation, in the Statement of Purpose hereto) shall have the meanings
assigned thereto in the Credit Agreement.
2. Amendments to Credit Agreement. Subject to and in accordance with the terms and
conditions set forth herein, the Administrative Agent and the Lenders hereby agree to amend the
Credit Agreement as follows:
(a) Amendments to Section 1.1.
(i) Section 1.1 is hereby amended by adding the following defined terms in the
proper alphabetical order:
“‘Excess Cash Flow’ means, for the Borrower and its Subsidiaries on a
Consolidated basis, in accordance with GAAP for any Fiscal Year, the excess, if any,
of:
(a) cash flow from operations, minus
(b) the sum, without duplication, of (i) the aggregate amount actually paid by
the Borrower and its Subsidiaries in cash during such Fiscal Year on account of
permitted Capital Expenditures (other than to the extent any such Capital
Expenditure is made with the proceeds of Debt (other than purchases of
Capital Assets financed through the Borrower’s cash management system under the
Revolving Credit Facility), any equity issuance, casualty proceeds, condemnation
proceeds or other proceeds that would not be included in cash flow from operations),
(ii) the aggregate amount of all Scheduled Principal Repayments made by the Borrower
and its Subsidiaries during such Fiscal Year, but only to the extent that such
payments or repayments by their terms cannot be reborrowed or redrawn and do not
occur in connection with a refinancing of all or any portion of such Debt and (iii)
prepayments or repayments of principal of Revolving Credit Loans to the extent that
the Revolving Credit Commitment is permanently reduced by an equal amount at the
time of such payment or prepayment.”
“‘Fourth Amendment Effective Date’ means December 5, 2008.”
“‘LIBOR Unavailability Period’ means any period of time during which a
notice to the Borrower in accordance with Section 5.8 shall remain in force and
effect.”
(ii) The definition of “Aggregate Commitment” is hereby deleted in its entirety and
replaced as follows:
“‘Aggregate Commitment’ means the aggregate amount of the Lenders’
Commitments hereunder, as such amount may be reduced or otherwise modified at any
time or from time to time pursuant to the terms hereof. On the Fourth Amendment
Effective Date, the Aggregate Commitment shall be Ninety Million Dollars
($90,000,000).”
(iii) The definition of “Aggregate Permitted Note Repurchases Amount” is hereby deleted
in its entirety.
(iv) The definition of “Base Rate” is hereby deleted in its entirety and replaced as
follows:
“‘Base Rate’ means, at any time, the higher of (a) the Prime Rate, (b)
the Federal Funds Rate plus 1/2 of 1% and (c) except during a LIBOR Unavailability
Period, 0.750% plus the LIBOR Rate; each change in the Base Rate shall take effect
simultaneously with the corresponding change or changes in the Prime Rate, Federal
Funds Rate or LIBOR Rate.”
(v) The definition of “Business Day” is hereby deleted in its entirety and replaced as
follows:
“‘Business Day’ means (a) for all purposes other than as set forth in
clause (b) below, any day other than a Saturday, Sunday or legal holiday on which
banks in Charlotte, North Carolina and New York, New York, are open for the conduct
of their commercial banking business, and (b) with respect to all notices and
determinations in connection with the LIBOR Rate, and payments of principal
and interest with respect to any LIBOR Rate Loan, any day that is a Business
Day
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described in clause (a) and that is also a day for trading by and between banks
in Dollar deposits in the London interbank market.”
(vi) The definition of “EBITDA” is hereby deleted in its entirety and replaced as
follows:
“‘EBITDA’ means, for any period, the sum of the following determined on
a Consolidated basis, without duplication, for the Borrower and its Subsidiaries in
accordance with GAAP: (a) Net Income for such period plus (b) the sum of
the following to the extent deducted in determining Net Income: (i) Tax Expense,
(ii) Interest Expense, (iii) amortization, depreciation and other non-cash charges
and (iv) non-cash stock compensation expenses, less (c) interest income and
any extraordinary gains, plus (d) extraordinary losses in amounts reasonably
acceptable to the Administrative Agent; provided that the Borrower shall be
entitled to add back to EBITDA certain cash and non-cash charges in an aggregate
amount not to exceed $14,000,000 that are incurred during the 2007 and/or 2008
Fiscal Years in connection with the asset dispositions permitted pursuant to the
Amendment and Consent by and among the Credit Parties, the Lenders and the
Administrative Agent dated as of July 12, 2007.”
(vii) The definition of “LIBOR” is hereby deleted in its entirety and replaced as
follows:
“‘LIBOR’ means,
(a) with respect to LIBOR Rate Loans, the rate of interest per annum determined
on the basis of the rate for deposits in Dollars in minimum amounts of at least Five
Million Dollars ($5,000,000) for a period equal to the applicable Interest Period
which appears on the Telerate Page 3750 at approximately 11:00 a.m. (London time)
two (2) Business Days prior to the first day of the applicable Interest Period
(rounded upward, if necessary, to the nearest 1/100th of 1%). If, for any reason,
such rate does not appear on Telerate Page 3750, then “LIBOR” shall be determined by
the Administrative Agent to be the arithmetic average of the rate per annum at which
deposits in Dollars in minimum amounts of at least Five Million Dollars ($5,000,000)
would be offered by first class banks in the London interbank market to the
Administrative Agent at approximately 11:00 a.m. (London time) two (2) Business Days
prior to the first day of the applicable Interest Period for a period equal to such
Interest Period. Each calculation by the Administrative Agent of LIBOR shall be
conclusive and binding for all purposes, absent manifest error;
(b) for any interest calculation with respect to a Base Rate Loan, the rate of
interest per annum determined on the basis of the rate for deposits in Dollars in
the approximate amount of the Base Rate Loan being made, continued or converted for
a period equal to one (1) month commencing that day which appears on the Telerate
Page 3750 at approximately 11:00 a.m. (London time) on
the applicable date of determination. If, for any reason, such rate does not
appear
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on Telerate Page 3750, then “LIBOR” shall be determined by the Administrative
Agent to be the arithmetic average of the rate per annum at which deposits in
Dollars the approximate amount of the Base Rate Loan being made, continued or
converted would be offered by first class banks in the London interbank market to
the Administrative Agent at approximately 11:00 a.m. (London time) on the applicable
date of determination for a period equal to one (1) month. Each calculation by the
Administrative Agent of LIBOR shall be conclusive and binding for all purposes,
absent manifest error.”
(viii) The definition of “Permitted Note Repurchases” is hereby deleted in its
entirety.
(ix) The definition of “Ratings Downgrade” is hereby amended by deleting the word “and”
at the end of clause (i) and replacing it with the word “or”.
(x) The definition of “Revolving Credit Commitment” is hereby deleted in its entirety
and replaced as follows:
“‘Revolving Credit Commitment’ means (a) as to any Lender, the
obligation of such Lender to make Revolving Credit Loans to the account of the
Borrower hereunder in an aggregate principal amount at any time outstanding not to
exceed the amount set forth opposite such Lender’s name on the Register as such
amount may be reduced or modified at any time or from time to time pursuant to the
terms hereof and (b) as to all Lenders, the aggregate commitment of all Lenders to
make Revolving Credit Loans, as such amount may be reduced or modified at any time
or from time to time pursuant to the terms hereof. The Revolving Credit Commitment
of all Lenders on the Fourth Amendment Effective Date shall be Ninety Million
Dollars ($90,000,000).”
(xi) The definition of “Swingline Commitment” is hereby amended by replacing the amount
“Ten Million Dollars ($10,000,000)” with “Seven Million Five Hundred Thousand Dollars
($7,500,000)”.
(b) Amendments to Section 2.6.
(i) Section 2.6(a) (“Voluntary Reduction”) is hereby deleted in its
entirety and replaced as follows:
“(a) Voluntary Reduction. The Borrower shall have the right at any
time and from time to time, upon at least five (5) Business Days prior written
notice to the Administrative Agent, to permanently reduce, without premium or
penalty, (i) the entire Revolving Credit Commitment at any time or (ii) portions of
the Revolving Credit Commitment, from time to time, in an aggregate principal amount
not less than $1,000,000 or any whole multiple of $500,000 in excess thereof. The
amount of each partial permanent reduction shall permanently reduce the Lenders’
Revolving Credit Commitments pro rata in accordance with their respective Revolving
Credit Commitment Percentages.”
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(ii) Section 2.6(b) (“[Intentionally Omitted]”) is hereby deleted in
its entirety and replaced as follows:
“(b) Mandatory Reduction. The Revolving Credit Commitment shall be
permanently reduced on the date of each mandatory prepayment under Section 4.3 by an
amount equal to the mandatory prepayment amount required pursuant to such Section
until the Revolving Credit Commitment has been reduced to Sixty-Five Million Dollars
($65,000,000). To the extent outstanding Revolving Credit Loans have been reduced
to zero, the Revolving Credit Commitment shall continue to be permanently reduced by
the mandatory prepayment amounts required by Section 4.3 until the Revolving Credit
Commitment has been reduced to Sixty-Five Million Dollars ($65,000,000).
Thereafter, any additional mandatory prepayments shall not permanently reduce the
Revolving Credit Commitment; provided, however, the Borrower shall have the
right to voluntarily further reduce the Revolving Credit Commitment in accordance
with Section 2.6(a). In addition to the foregoing, the Revolving Credit Commitment
shall be permanently reduced to Sixty-Five Million Dollars ($65,000,000) on April
18, 2010.”
(iii) Section 2.6(c) (“Corresponding Payment”) is hereby amended by
adding the words “or required” immediately after the phrase “Each permanent reduction
permitted” in the first sentence of such clause (c).
(c) Amendment to Section 2.8. Section 2.8 (“Increase of Revolving Credit
Commitment”) is hereby deleted in its entirety.
(d) Amendment to Section 4.3. Section 4.3 (“[Intentionally Omitted]”)
is hereby deleted in its entirety and replaced as follows:
“SECTION 4.3 Mandatory Prepayments of Revolving Credit Loans.
(a) The Borrower shall prepay the Revolving Credit Loans in the manner set
forth in Section 4.4 below in amounts equal to one hundred percent (100%) of the
aggregate Net Cash Proceeds from any asset sale or sale-leaseback transaction by the
Borrower or any of its Subsidiaries (other than such asset sales or sale-leaseback
transactions permitted pursuant to Xxxxxxxx 00.0(x), (x), (x), (x), (x), (x), (x),
(x), (x) or (o)). Such prepayments shall be made within three (3) Business Days
after receipt of the Net Cash Proceeds of any such transaction by the Borrower or
any of its Subsidiaries.
(b) No later than one hundred twenty (120) days after the end of each Fiscal
Year (commencing with the Fiscal Year ending December 27, 2009), the Borrower shall
make mandatory principal prepayments of the Revolving Credit Loans in the manner set
forth in Section 4.4 below in an amount equal to seventy-five percent (75%) of
Excess Cash Flow, if any, for such Fiscal Year.”
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(e) Amendment to Section 4.4. Section 4.4 (“Application of Proceeds”)
is hereby deleted in its entirety and replaced as follows:
“SECTION 4.4 Application of Proceeds. Upon the occurrence of any event
triggering the prepayment requirement under Section 4.3 above, the Borrower shall
promptly deliver a Notice of Prepayment to the Administrative Agent and upon receipt
of such notice, the Administrative Agent shall promptly so notify the Lenders.
Concurrently with any prepayment under Section 4.3(b) above, the Borrower shall also
deliver a worksheet containing the calculations of Excess Cash Flow in form and
substance reasonably satisfactory to the Administrative Agent. Each prepayment of
the Revolving Credit Loans under Section 4.3 shall be applied to reduce the
outstanding Revolving Credit Loans with a corresponding permanent reduction in the
Revolving Credit Commitment to the extent such Commitment reduction is required by
Section 2.6(b). For clarification purposes, it is understood and agreed that even
if there are no outstanding Revolving Credit Loans on the date of such required
prepayment, the Revolving Credit Commitment shall still be reduced by such mandatory
prepayment amount to the extent such Commitment reduction is required by Section
2.6(b); provided, however, to the extent any excess proceeds exist after all
outstanding Revolving Credit Loans have been repaid in full, the Borrower shall be
entitled to keep such excess proceeds.”
(f) Amendment to Section 5.1. Section 5.1(c) (“Applicable Margin”)
and the accompanying pricing grid is hereby deleted in its entirety and replaced as follows:
(c) Applicable Margin. The Applicable Margin provided for in Section
5.1(a) with respect to any Loan (the “Applicable Margin”) shall be based
upon the table set forth below and shall be determined and adjusted quarterly on the
date (each a “Calculation Date”) ten (10) Business Days after the earlier of
(i) the date on which Borrower provides or (ii) the date on which the Borrower is
required to provide, an Officer’s Compliance Certificate for the most recently ended
Fiscal Quarter of the Borrower; provided, however, that (A) commencing on
the Fourth Amendment Effective Date, the Applicable Margin shall be based on Pricing
Level IV (as shown below) and shall remain at Pricing Level IV until the first
Calculation Date occurring after the Fourth Amendment Effective Date and, thereafter
the Pricing Level shall be determined by reference to the Adjusted Debt to EBITDAR
Ratio as of the last day of the most recently ended Fiscal Quarter of the Borrower
preceding the applicable Calculation Date, and (B) if the Borrower fails to provide
the Officer’s Compliance Certificate as required by Section 8.2 for the most
recently ended Fiscal Quarter of the Borrower preceding the applicable Calculation
Date, the Applicable Margin from such Calculation Date shall be based on Pricing
Level I (as shown below) until such time as an appropriate Officer’s Compliance
Certificate is provided, at which time the Pricing Level shall be determined by
reference to the Adjusted Debt to EBITDAR Ratio as of the last day of the most
recently ended Fiscal Quarter of the Borrower preceding such Calculation Date.
Subject to Sections 5.1(c)(ii)(A) and (B) in the preceding sentence, the
Applicable Margin shall be effective from one
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Calculation Date until the next Calculation Date. Any adjustment in the Applicable
Margin shall be applicable to all Extensions of Credit then existing or subsequently
made or issued.
Pricing Grid
| Adjusted Debt to | Applicable Base | Applicable LIBOR | ||||||||||
| Level | EBITDAR Ratio | Rate Margin | Rate Margin | |||||||||
I |
Greater than or equal to 5.25 to 1.00 | 3.250 | % | 4.000 | % | |||||||
II |
Greater than or equal to 5.00 to 1.00 but less than 5.25 to 1.00 | 2.750 | % | 3.500 | % | |||||||
III |
Greater than or equal to 4.50 to 1.00 but less than 5.00 to 1.00 | 2.500 | % | 3.250 | % | |||||||
IV |
Greater than or equal to 4.00 to 1.00 but less than 4.50 to 1.00 | 2.250 | % | 3.000 | % | |||||||
V |
Less than 4.00 to 1.00 | 2.000 | % | 2.750 | % | |||||||
(g) Amendment to Section 5.3. Section 5.3(a) (“Commitment Fee”) is
hereby deleted in its entirety and replaced as follows:
(a) Commitment Fee. Commencing on the Closing Date, the Borrower shall
pay to the Administrative Agent, for the account of the Lenders, a non-refundable
commitment fee at a rate per annum equal to the applicable rate based upon the table
set forth below (the “Commitment Fee Rate”) on the aggregate average daily
unused portion of the Revolving Credit Commitment; provided, that the amount
of outstanding Swingline Loans shall not be considered usage of the Revolving Credit
Commitment for the purpose of calculating such commitment fee (other than with
respect to calculating any commitment fee due to the Swingline Lender in which case,
the full Swingline Commitment shall be deemed usage of the Revolving Credit
Commitment). The commitment fee shall be payable in arrears on the last Business
Day of each calendar quarter during the term of this Agreement commencing on the
first such date following the Closing Date, and on the Revolving Credit Maturity
Date. Such commitment fee shall be distributed by the Administrative Agent to the
Lenders pro rata in accordance with the Lenders’ respective
Revolving Credit Commitment Percentages. The Commitment Fee Rate shall be based
upon the table set forth below and shall be determined and adjusted quarterly on
each Calculation Date; provided, however, that (i) commencing on the
Fourth Amendment Effective Date, the Commitment Fee Rate shall be based on Pricing
Level IV (as shown below) and shall remain at Pricing Level IV until the first
Calculation Date occurring after the Fourth Amendment Effective Date and thereafter
the Pricing Level shall be determined by reference to the Adjusted Debt to EBITDAR
Ratio as of the last day of the
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most recently ended Fiscal Quarter of the Borrower preceding the applicable Calculation Date,
and (ii) if the Borrower fails to provide the Officer’s Compliance Certificate as required by
Section 8.2 for the most recently ended Fiscal Quarter of the Borrower preceding the applicable
Calculation Date, the Commitment Fee Rate from such Calculation Date shall be based on Pricing
Level I (as shown below) until such time as an appropriate Officer’s Compliance Certificate
is provided, at which time the Pricing Level shall be determined by reference to the Adjusted
Debt to EBITDAR Ratio as of the last day of the most recently ended Fiscal Quarter of the
Borrower preceding such Calculation Date. Subject to Sections 5.3(a)(i) and (ii) in the preceding sentence,
the Commitment Fee Rate shall be effective from one Calculation Date until the next Calculation
Date.
| Pricing Level | Adjusted Debt to EBITDAR Ratio | Commitment Fee Rate | ||||||
I |
Greater than or equal to 5.25 to 1.00 | 0.875 | % | |||||
II |
Greater than or equal to 5.00 to 1.00, but less than 5.25 to 1.00 | 0.750 | % | |||||
III |
Greater than or equal to 4.50 to 1.0, but less than 5.00 to 1.00 | 0.750 | % | |||||
IV |
Greater than or equal to 4.00 to 1.00 but less than 4.50 to 1.00 | 0.625 | % | |||||
V |
Less than 4.00 to 1.00 | 0.500 | % | |||||
(h) Amendment to Section 5.8. Section 5.8 (“Changed Circumstances”)
is hereby deleted in its entirety and replaced as follows:
“SECTION 5.8 Changed Circumstances.
(a) Circumstances Affecting LIBOR Rate Availability. If, with respect
to any Interest Period or with respect to Base Rate Loans as to which the interest
rate is determined with reference to the LIBOR Rate, the Administrative Agent or any
Lender (after consultation with the Administrative Agent) shall determine that, by
reason of circumstances affecting the foreign exchange and interbank markets
generally, deposits in eurodollars, in the applicable amounts are not being quoted
via the Telerate Page 3750 or offered to the Administrative Agent or such Lender for
such Interest Period, then the Administrative Agent shall forthwith give notice
thereof to the Borrower. Thereafter, until the Administrative Agent notifies the
Borrower that such circumstances no longer exist, the obligation of the Lenders to
make LIBOR Rate Loans and Base Rate Loans as to which the interest rate is
determined with reference to the LIBOR Rate and the right of the Borrower to convert
any Loan to or continue any Loan as a LIBOR Rate Loan or a Base Rate Loan as to
which the interest rate is determined with reference to the LIBOR Rate shall be
suspended, and (i) the Borrower shall repay in full (or cause to be repaid in full)
the then outstanding principal amount of each such LIBOR Rate Loan together with
accrued interest thereon, on the last day of the then current Interest Period applicable to such LIBOR
Rate Loan or convert the then outstanding principal amount of each such
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LIBOR Rate Loan to a Base Rate Loan as of the last day of such Interest Period and (ii)
all outstanding Base Rate Loans as to which interest was determined with reference
to the LIBOR Rate shall have interest rates calculated in accordance with clauses
(a) and (b) in the definition of Base Rate.
(b) Laws Affecting LIBOR Rate Availability. If, after the date hereof,
the introduction of, or any change in, any Applicable Law or any change in the
interpretation or administration thereof by any Governmental Authority, central bank
or comparable agency charged with the interpretation or administration thereof, or
compliance by any of the Lenders (or any of their respective Lending Offices) with
any request or directive (whether or not having the force of law) of any such
Governmental Authority, central bank or comparable agency, shall make it unlawful or
impossible for any of the Lenders (or any of their respective Lending Offices) to
honor its obligations hereunder to make or maintain any LIBOR Rate Loan or any Base
Rate Loan as to which the interest rate is determined with reference to the LIBOR
Rate, such Lender shall promptly give notice thereof to the Administrative Agent and
the Administrative Agent shall promptly give notice to the Borrower and the other
Lenders. Thereafter, until the Administrative Agent notifies the Borrower that such
circumstances no longer exist, (i) the obligations of the Lenders to make LIBOR Rate
Loans and Base Rate Loans as to which the interest rate is determined with reference
to the LIBOR Rate and the right of the Borrower to convert any Loan or continue any
Loan as a LIBOR Rate Loan or a Base Rate Loan as to which the interest rate is
determined with reference to the LIBOR Rate shall be suspended and thereafter the
Borrower may select only Base Rate Loans (as to which the interest rates shall be
calculated pursuant to clauses (a) and (b) of the definition of “Base Rate”)
hereunder, and (ii) if any of the Lenders may not lawfully continue to maintain a
LIBOR Rate Loan or any Base Rate Loan as to which the interest rate is determined
with reference to the LIBOR Rate to the end of the then current Interest Period
applicable thereto, the applicable Loan shall immediately be converted to a Base
Rate Loan (as to which the interest rates shall be calculated pursuant to clauses
(a) and (b) of the definition of “Base Rate”) for the remainder of such Interest
Period.”
(i) Amendment to Section 9.11. Section 9.11(a) (“Additional Domestic
Subsidiaries”) is hereby amended by adding the phrase “other than those Franchisees that are or
become wholly-owned by the Borrower” immediately following the phrase “excluding any Franchisees”
in the parenthetical in such Section.
(j) Amendment to Section 10.1. Section 10.1 (“Maximum Adjusted Debt to
EBITDAR Ratio”) is hereby deleted in its entirety and replaced as follows:
SECTION 10.1 Maximum Adjusted Debt to EBITDAR Ratio. As of any Fiscal
Quarter ending during the periods specified below, permit the ratio of (a) Adjusted
Debt on such date (less any cash existing on the Consolidated
balance sheet on such date) to (b) EBITDAR for the period of four (4)
consecutive Fiscal Quarters ending on or immediately prior to such date to be
greater than the corresponding ratio set forth below:
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| Period | Maximum Ratio | |||
Fourth Amendment Effective Date through December 28, 2008 |
5.25 to 1.00 | |||
December 29, 2008 and thereafter |
5.50 to 1.00 | |||
(k) Amendment to Section 10.2. Section 10.2 (“Maximum Senior Secured
Leverage Ratio”) is hereby deleted in its entirety and replaced as follows:
“SECTION 10.2 Maximum Senior Secured Leverage Ratio. As of any Fiscal
Quarter end, permit the ratio of (a) Senior Debt on such date (less any cash
existing on the Consolidated balance sheet on such date) to (b) EBITDA for the
period of four (4) consecutive Fiscal Quarters ending on or immediately prior to
such date to be greater than 1.25 to 1.00; provided, however, that for
purposes of calculating compliance with this financial covenant, EBITDA for the four
(4) consecutive Fiscal Quarter period ending on or immediately prior to such date
shall be reduced to reflect rental expense associated with any sale-leaseback
transaction permitted hereunder on a pro forma basis.”
(l) Amendment to Section 10.3. Section 10.3 (“Minimum Fixed Charge
Coverage Ratio”) is hereby deleted in its entirety and replaced as follows:
“SECTION 10.3 Minimum Fixed Charge Coverage Ratio. As of any Fiscal
Quarter end, permit the ratio of (a) (i) EBITDAR for the period of four (4)
consecutive Fiscal Quarters ending on or immediately prior to such date, minus (ii)
Maintenance Capital Expenditures for the period of four (4) consecutive Fiscal
Quarters ending on or immediately prior to such date to (b) (i) Rental Expense for
the period of four (4) consecutive Fiscal Quarters ending on or immediately prior to
such date (provided, however, that for purposes of calculating
compliance with this Section 10.3, Rental Expense for the four (4) consecutive
Fiscal Quarter period ending on such date shall be increased to include rental
expense associated with any sale-leaseback transaction permitted hereunder on a
pro forma basis), plus (ii) Interest Expense for the period of four
(4) consecutive Fiscal Quarters ending on or immediately prior to such date, plus
(iii) Scheduled Principal Repayments for the period of four (4) consecutive Fiscal
Quarters ending on or immediately prior to such date, plus (iv) dividends or similar
distributions that are paid in cash during the period of four (4) consecutive Fiscal
Quarters ending on or immediately prior to such date, plus (v) Consolidated Cash
Taxes for the period of four (4) consecutive Fiscal Quarters ending on or
immediately prior to such date to be less than 1.25 to 1.00.”
(m) Amendment to Article 10. The following new Section 10.5 (“Maximum
Expansion Capital Expenditures”) is hereby inserted in proper numerical order:
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“SECTION 10.5. Maximum Expansion Capital Expenditures. Without
limiting Section 10.4 and in addition thereto, commencing December 29, 2008 through
the remaining term of the Credit Facility unless and until all outstanding Revolving
Credit Loans have been repaid in full and the Revolving Credit Facility (other than
outstanding and undrawn Letters of Credit) remains undrawn for forty-five (45)
consecutive days, permit the aggregate amount of all Expansion Capital Expenditures
to exceed Eight Million Dollars ($8,000,000).”
(n) Amendment to Section 11.1. Section 11.1(j) (“Limitations on Debt)
is hereby amended by replacing the amount “Thirty-Five Million Dollars ($35,000,000)” with “Twenty
Million Dollars ($20,000,000)”.
(o) Amendment to Section 11.3. Section 11.3(c) (“Limitations on Loans,
Advances, Investments and Acquisitions) is hereby deleted in its entirety and replaced as
follows:
“(c) investments by the Borrower or any of the Subsidiary Guarantors in the
form of acquisitions of a substantially similar business or line of business
(whether by the acquisition of capital stock, assets or any combination thereof) of
any other Person (each, a “Permitted Acquisition”) and other loans,
investments and advances by the Borrower or any of the Subsidiary Guarantors in (i)
Franchisees of the Borrower or (ii) any SRLS Entities; provided,
however, that the aggregate amount of all such Permitted Acquisitions
permitted under this Section 11.3(c) plus the aggregate outstanding amount
of all loans, investments and advances (other than Permitted Acquisitions) permitted
under this Section 11.3(c) plus the aggregate outstanding amount of all
Guaranty Obligations permitted under Section 11.1(j) hereunder plus the
aggregate amount of all sales permitted under Section 11.5(j) hereunder shall not
exceed Twenty Million Dollars ($20,000,000) in the aggregate during the term of the
Credit Facility; provided further, however, that any such investment
or other acquisition of equity of a Franchisee resulting in the Borrower owning one
hundred percent (100%) of the assets of such Franchisee shall be excluded from the
foregoing aggregate dollar limitation so long as the Borrower shall comply with the
applicable provisions of Section 9.11 with respect to such Franchisee;”
(p) Amendments to Section 11.5 (“Limitations on Sales of Assets).
(i) Section 11.5(f) is hereby amended by replacing the amount “Forty-Five
Million Dollars ($45,000,000)” with “Forty Million Dollars ($40,000,000)”.
(ii) Section 11.5(j) is hereby amended by replacing the amount “Thirty-Five
Million Dollars ($35,000,000)” with “Twenty Million Dollars ($20,000,000)”.
(q) Amendment to Section 11.6. Effective as of October 5, 2008, Section 11.6
(“Limitations on Dividends and Distributions”) is hereby deleted in its entirety and
replaced as follows:
“SECTION 11.6 Limitations on Dividends and Distributions. Declare or
pay any dividends upon any of its capital stock or any other ownership
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interests;
purchase, redeem, retire or otherwise acquire, directly or indirectly, any shares of
its capital stock or other ownership interests, or make any distribution of cash,
property or assets among the holders of shares of its capital stock or other
ownership interests, or make any change in its capital structure, except:
(a) the Borrower or any Subsidiary may pay dividends in shares of its own
capital stock, membership interests, or other ownership units;
(b) any Subsidiary may pay cash dividends to the Borrower or to its parent
Subsidiary; and
(c) the Borrower may accept shares of its stock owned by the applicable
optionee or employee (i) in payment of the exercise price of stock options or (ii)
to satisfy tax withholding requirements in respect of equity incentives in the form
of restricted stock awards, in each case, granted to employees of the Borrower or
its Subsidiaries by the Borrower’s board of directors or a committee thereof.
(r) Amendment to Section 11.10. Section 11.10 (“Amendments; Payments and
Prepayments of Subordinated Debt”) is hereby deleted in its entirety and replaced as follows:
“SECTION 11.10 Amendments; Payments and Prepayments of Subordinated
Debt. Amend or modify (or permit the modification or amendment of) any of the
terms or provisions of the Senior Subordinated Notes or any other Subordinated Debt,
or cancel or forgive, make any payment or prepayment on, or redeem or acquire for
value (including without limitation by way of depositing with any trustee with
respect thereto money or securities before due for the purpose of paying when due)
the Senior Subordinated Notes or any other Subordinated Debt, other than, so long as
no Default or Event of Default shall have occurred and be continuing or would be
caused thereby, (i) regularly scheduled payments of accrued interest on the Senior
Subordinated Notes (including additional interest required to be paid on account of
a registration default arising under the registration rights agreements in
connection with the Senior Subordinated Notes in an amount not to exceed more than
one percent (1%) per year per annum) to the extent such payments are permitted under
the subordination provisions thereof and (ii) principal payments or prepayments of
intercompany Subordinated Debt between the Borrower and the Subsidiary Guarantors.”
(s) Amendment to Section 12.1. Section 12.1(n) (“Judgment”) is hereby
deleted in its entirety and replaced as follows:
“(c) Judgment. A judgment or order for the payment of money which
causes the aggregate amount of all such judgments (net of any amounts paid or fully
covered by independent third party insurance as to which the relevant
insurance company does not dispute coverage) to exceed $5,000,000 in any Fiscal
Year shall be entered against the Borrower or any of its Subsidiaries by any court
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and such judgment or order shall continue without discharge or stay for a period of
thirty (30) days.”
(t) Amendments to Section 14.11. Section 14.11 (“Amendments, Waivers and
Consents”) is hereby amended by deleting the second full paragraph after clause (b) of Section
14.11 in its entirety and replacing it as follows:
“In addition, no amendment, waiver or consent to the provisions of Section 5.4 with
respect to the pro rata treatment of payments, or Sections 4.4 or
5.5 with respect to the application of proceeds, shall be made without the consent
of each Lender adversely affected thereby.”
3. Waiver. Subject to and in accordance with the terms and conditions set forth
herein, the Administrative Agent and the Lenders hereby waive any Event of Default that may have
occurred in connection with the Borrower’s repurchase of shares of its stock in connection with the
vesting of employee restricted stock awards in excess of the amount permitted by Section
11.6(c) (prior to the effective date hereof) of the Credit Agreement.
4. Effectiveness. This Agreement shall become effective when, and only when:
(a) the Administrative Agent shall have received counterparts of this Agreement executed by
the Borrower, the Subsidiary Guarantors, the Administrative Agent and the Required Lenders;
(b) the Administrative Agent shall have received (i) resolutions of the board of directors of
the Borrower authorizing the amendments set forth herein and (ii) favorable opinions of counsel to
the Borrower and the Subsidiary Guarantors with respect to the Borrower, the Subsidiary Guarantors,
the Loan Documents and this Agreement;
(c) the Administrative Agent shall have been reimbursed by the Borrower for all reasonable
fees and out-of-pocket charges and other expenses incurred in connection with this Agreement, the
Credit Agreement, the other Loan Documents and the transactions contemplated hereby and thereby,
including, without limitation, the fees and expenses set forth in Section 9 and the
reasonable fees and expenses of counsel to the Administrative Agent;
(d) The Borrower shall have paid in full in cash an amendment fee for the account of each
Lender executing this Agreement (including the Administrative Agent) equal to 0.500% times the sum
of each Lender’s Commitment (as reduced concurrently with the effectiveness hereof) under the
Credit Agreement as of the effective date of this Agreement; and
(e) the Administrative Agent shall have received any other documents or instruments reasonably
requested by the Administrative Agent in connection with the execution of this Agreement.
5. Post-Closing Covenant. The Borrower hereby agrees that following the effective
date of this Agreement in accordance with Section 4 above, it shall pay in full in cash an
amendment fee for the account of each Lender executing this Agreement after 12:00 noon
(Eastern) on December 5, 2008 through 12:00 noon (Eastern) on December 11, 2008. Such
13
amendment
fee shall be equal to 0.500% times the sum of each Lender’s Commitment (as reduced concurrently
with the effectiveness of this Agreement) under the Credit Agreement and shall be paid by the
Borrower to the Administrative Agent, for the account of each such Lender, on December 11, 2008.
6. Limited Effect. Except as expressly provided herein, the Credit Agreement and the
other Loan Documents shall remain unmodified and in full force and effect. This Agreement shall
not be deemed (a) to be a waiver of, or consent to, or a modification or amendment of, any other
term or condition of the Credit Agreement or any other Loan Document, (b) to prejudice any right or
rights which the Administrative Agent or the Lenders may now have or may have in the future under
or in connection with the Credit Agreement or the other Loan Documents or any of the instruments or
agreements referred to therein, as the same may be amended, restated, supplemented or modified from
time to time, (c) to be a commitment or any other undertaking or expression of any willingness to
engage in any further discussion with the Borrower, any of its Subsidiaries or any other Person
with respect to any waiver, amendment, modification or any other change to the Credit Agreement or
the Loan Documents or any rights or remedies arising in favor of the Lenders or the Administrative
Agent, or any of them, under or with respect to any such documents or (d) to be a waiver of, or
consent to or a modification or amendment of, any other term or condition of any other agreement by
and among the Borrower or any of its Subsidiaries, on the one hand, and the Administrative Agent or
any other Lender, on the other hand. References in the Credit Agreement to “this Agreement” (and
indirect references such as “hereunder”, “hereby”, “herein”, “hereof” or other words of like
import) and in any Loan Document to the “Credit Agreement” shall be deemed to be references to the
Credit Agreement as modified hereby.
7. Representations and Warranties/No Default. The Borrower represents and warrants as
follows:
(a) The Borrower is a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction indicated at the beginning of this Agreement.
(b) The execution, delivery and performance by the Borrower of this Agreement are within the
Borrower’s corporate powers, have been duly authorized by all necessary corporate action and do not
contravene (i) the Borrower’s charter or by-laws, (ii) any law or contractual restriction binding
on or affecting the Borrower, or result in, or require, the creation or imposition of any mortgage,
deed of trust, pledge, lien, security interest or other charge, encumbrance or preferential
arrangement of any nature upon or with respect to any of the properties now owned or hereafter
acquired by the Borrower (other than as contemplated hereby).
(c) No authorization, approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for the due execution, delivery and
performance by the Borrower of this Agreement.
(d) This Agreement constitutes the legal, valid and binding obligation of the Borrower and its
Subsidiaries, as the case may be, enforceable against the Borrower and its Subsidiaries, as the
case may be, in accordance with its terms.
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(e) There is no pending or overtly threatened action or proceeding affecting the Borrower or
any of its Subsidiaries before any court, governmental agency or arbitrator, which could reasonably
be expected to materially adversely affect the financial condition or operations of the Borrower or
any of its Subsidiaries or which purports to affect the legality, validity or enforceability of
this Agreement.
(f) After giving effect to this Agreement, (i) the representations and warranties made by the
Borrower pursuant to Article VII of the Credit Agreement are true and correct with the same effect
as if made on and as of the date hereof, except for any representation and warranty made as of an
earlier date, which such representation and warranty shall remain true and correct as of such
earlier date and (ii) no Default or Event of Default has occurred and is continuing.
8. Acknowledgement and Reaffirmation. By their execution hereof:
(a) Each of the Borrower and each Subsidiary Guarantor hereby expressly (i) consents to the
amendments set forth in this Agreement, (ii) reaffirms all of its respective covenants,
representations, warranties and other obligations set forth in the Credit Agreement, the Collateral
Agreement, the Subsidiary Guaranty Agreement and the other Loan Documents to which it is a party
and (iii) acknowledges, represents and agrees that its respective covenants, representations,
warranties and other obligations set forth in the Credit Agreement, the Collateral Agreement, the
Subsidiary Guaranty Agreement and the other Loan Documents to which it is a party remain in full
force and effect; and
(b) Each of the Borrower and each Subsidiary Guarantor hereby confirms that each of the
Security Documents to which it is a party shall continue to be in full force and effect and is
hereby ratified and reaffirmed in all respects as if fully restated as of the date hereof by this
Agreement.
9. Costs, Expenses and Taxes. The Borrower agrees to pay on demand all reasonable
costs and expenses of the Administrative Agent in connection with the preparation, execution,
delivery, administration, modification and amendment of this Agreement and the other instruments
and documents to be delivered hereunder, including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Administrative Agent with respect thereto and with
respect to advising the Administrative Agent as to its rights and responsibilities hereunder and
thereunder. The Borrower further agrees to pay on demand all reasonable costs and expenses, if any
(including, without limitation, reasonable counsel fees and expenses), in connection with the
enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement and
any other instruments and documents to be delivered hereunder, including, without limitation,
reasonable counsel fees and expenses in connection with the enforcement of rights under this
Section 9. In addition, the Borrower shall pay any and all stamp and other taxes payable
or determined to be payable in connection with the execution and delivery of this Agreement and any
other instruments and documents to be delivered hereunder,
and agrees to save the Administrative Agent and each Lender harmless from and against any and
all liabilities with respect to or resulting from any delay or omission to pay such taxes.
15
10. Execution in Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall constitute one and
the same agreement.
11. Governing Law. This Agreement shall be governed by, construed and enforced in
accordance with and all issues related to the legality, validity or enforceability hereof shall be
determined under the laws of the State of New York (including Section 5-1401 and Section 5-1402 of
the General Obligations Law of the State of New York), without regard to the other conflicts of law
principles thereof.
12. Fax Transmission. A facsimile, telecopy or other reproduction of this Agreement
may be executed by one or more parties hereto, and an executed copy of this Agreement may be
delivered by one or more parties hereto by facsimile or similar instantaneous electronic
transmission device pursuant to which the signature of or on behalf of such party can be seen, and
such execution and delivery shall be considered valid, binding and effective for all purposes. At
the request of any party hereto, all parties hereto agree to execute an original of this Agreement
as well as any facsimile, telecopy or other reproduction hereof.
13. Entire Agreement. This Agreement is the entire agreement, and supersedes any
prior agreements and contemporaneous oral agreements, of the parties concerning its subject matter.
14. Successors and Assigns. This Agreement shall be binding on and insure to the
benefit of the parties and their heirs, beneficiaries, successors and assigns.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed under seal by
their duly authorized officers, all as of the day and year first written above.
| O’CHARLEY’S INC., as Borrower |
||||
| By: | /s/ Xxxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxxx X. Xxxxx | |||
| Title: | Chief Financial Officer, Secretary and Treasurer | |||
| SUBSIDIARY GUARANTORS: O’CHARLEY’S MANAGEMENT COMPANY, INC. |
||||
| By: | /s/ Xxxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxxx X. Xxxxx | |||
| Title: | Secretary and Treasurer | |||
| STONEY RIVER MANAGEMENT COMPANY, INC. |
||||
| By: | /s/ Xxxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxxx X. Xxxxx | |||
| Title: | Secretary and Treasurer | |||
| STONEY RIVER, LLC |
||||
| By: | /s/ Xxxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxxx X. Xxxxx | |||
| Title: | Secretary and Treasurer | |||
[Signature Pages Continue]
17
| O’CHARLEY’S RESTAURANT PROPERTIES, LLC |
||||
| By: | /s/ Xxxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxxx X. Xxxxx | |||
| Title: | Secretary and Treasurer | |||
| STONEY RIVER LEGENDARY MANAGEMENT, L.P. |
||||
| By: | Stoney River, LLC, its General Partner | |||
| By: | /s/ Xxxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxxx X. Xxxxx | |||
| Title: | Secretary and Treasurer | |||
| AIR TRAVEL SERVICES, INC. |
||||
| By: | /s/ Xxxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxxx X. Xxxxx | |||
| Title: | Secretary and Treasurer | |||
| OCI, INC. |
||||
| By: | /s/ Xxxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxxx X. Xxxxx | |||
| Title: | Secretary and Treasurer | |||
| DFI, INC. |
||||
| By: | /s/ Xxxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxxx X. Xxxxx | |||
| Title: | Secretary and Treasurer | |||
[Signature Pages Continue]
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| O’CHARLEY’S SERVICE COMPANY, INC. |
||||
| By: | /s/ Xxxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxxx X. Xxxxx | |||
| Title: | Secretary and Treasurer | |||
| O’CHARLEY’S SPORTS BAR, INC. |
||||
| By: | /s/ Xxxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxxx X. Xxxxx | |||
| Title: | Secretary and Treasurer | |||
| O’CHARLEY’S FINANCE COMPANY, INC. |
||||
| By: | /s/ Xxxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxxx X. Xxxxx | |||
| Title: | Secretary and Treasurer | |||
| OPI, INC. |
||||
| By: | /s/ Xxxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxxx X. Xxxxx | |||
| Title: | Secretary and Treasurer | |||
| 99 RESTAURANTS, LLC |
||||
| By: | /s/ Xxxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxxx X. Xxxxx | |||
| Title: | Secretary and Treasurer | |||
[Signature Pages Continue]
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| 99 WEST, INC. |
||||
| By: | /s/ Xxxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxxx X. Xxxxx | |||
| Title: | Clerk and Treasurer | |||
| 99 RESTAURANTS OF VERMONT, LLC |
||||
| By: | 99 West, Inc., its Sole Member | |||
| By: | /s/ Xxxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxxx X. Xxxxx | |||
| Title: | Clerk and Treasurer | |||
| 99 RESTAURANTS OF
MASSACHUSETTS, a Massachusetts business trust |
||||
| By: | /s/ Xxxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxxx X. Xxxxx | |||
| Title: | Secretary and Treasurer | |||
| 99 COMMISSARY, LLC |
||||
| By: | /s/ Xxxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxxx X. Xxxxx | |||
| Title: | Secretary and Treasurer | |||
| 99 RESTAURANTS OF BOSTON, LLC |
||||
| By: | /s/ Xxxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxxx X. Xxxxx | |||
| Title: | Secretary and Treasurer | |||
[Signature Pages Continue]
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| WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent and Lender |
||||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | Director | |||
[Signature Pages Continue]
| SUNTRUST BANK, as Lender |
||||
| By: | /s/ Xxxxxxx Xxxxxxx | |||
| Name: | Xxxxxxx Xxxxxxx | |||
| Title: | Managing Director | |||
[Signature Pages Continue]
| REGIONS BANK, as Lender |
||||
| By: | /s/ Xxxxx Xxxxxx | |||
| Name: | Xxxxx Xxxxxx | |||
| Title: | Senior Vice President | |||
[Signature Pages Continue]
| JPMORGAN CHASE BANK, N.A., as Lender |
||||
| By: | /s/ Xxxx X. Xxxxxxxxxx | |||
| Name: | Xxxx X. Xxxxxxxxxx | |||
| Title: | SVP | |||
[Signature Pages Continue]
