Exhibit 10.18
EXECUTION COPY
AMENDMENT NO. 3
This Amendment No.3 dated as of July 30, 2002 ("Agreement") is among
Xxxxxx'x Restaurants, Inc., a Delaware corporation (the "Borrower"), the lenders
from time to time party to the Credit Agreement described below ("Lenders"), and
Bank of America, N.A., as administrative agent for the Banks ("Administrative
Agent").
INTRODUCTION
A. The Borrower, the Administrative Agent, and the Lenders are parties to
the Credit Agreement dated as of June 28, 2000, as amended by Amendment No. 1
and Consent dated as of October 17, 2000 and by Amendment No. 2 dated as of
February 22, 2002 (as so amended, "Credit Agreement").
B. The Borrower has requested that the Lenders agree to make certain
amendments to the Credit Agreement in connection with the purchase (the
"Transaction") by the Borrower of thirty-nine Chart House Restaurant locations
and related assets from Chart House Enterprises, Inc. ("Seller") subject to the
terms hereof.
C. Subject to the terms hereof, the Lenders party to this Agreement agree
to the amendments contained herein.
THEREFORE, the Borrower, the Administrative Agent, and the Lenders hereby
agree as follows:
Section 1. Definitions. Unless otherwise defined in this Agreement, terms
used in this Agreement which are defined in the Credit Agreement shall have the
meanings assigned to such terms in the Credit Agreement.
Section 2. Amendment. The Credit Agreement shall be amended as follows:
(a) The following definitions shall be added to Section 1.01:
"Chart House Acquisition" means the purchase by Borrower of
thirty-nine Chart House Restaurant locations and related assets pursuant to
the Asset Purchase Agreement dated May 17, 2002 by and among Chart House,
Inc., Chart House Enterprises, Inc., the Borrower, and LCH Acquisition,
Inc., an indirect, wholly owned Subsidiary of the Borrower.
"Third Amendment Effective Date" means the date upon which all
conditions to effectiveness of Amendment No. 3 to this Agreement, dated as
of July 30, 2002, among Borrower, Lenders, and Administrative Agent have
been met and such document has become effective.
(b) Section 7.01 is amended to add the following subsection (k) after the
existing subsection 7.01(j), and the existing subsection 7.01(k) shall be
renamed subsection 7.01(l):
(k) Unsecured Indebtedness in the form of a seller note which (i) is
in an aggregate original principal amount that does not exceed $20,000,000,
(ii) is made in connection with an acquisition of the Saltgrass Steakhouse
chain of restaurants, and (iii) has a term not longer than seven years;
provided that any such acquisition must comply with any other applicable
requirements contained in this Agreement, including without limitation the
provisions of section 7.11.
(c) Section 7.11 is amended to read in its entirety as follows:
7.11 Acquisitions. Make any Acquisition other than the Chart House
Acquisition without the prior written consent of the Requisite Lenders
unless (a) after giving effect to such Acquisition, the aggregate purchase
price (including cash, stock, and debt assumed) of all such Acquisitions
other than the Chart House Acquisition does not exceed (i) $85,000,000
during the period from the Third Amendment Effective date until the end of
the Borrower's fiscal year 2002 and (ii) $55,000,000 during each fiscal
year thereafter, (b) (i) the Person is engaged in, or the business to be
acquired is in, substantially the same Lines of Business as the Borrower
and its Subsidiaries (a "Similar Business") or (ii) if the Person or
business to be acquired is not a Similar Business, then the sum of (A) such
Acquisition and all other Acquisitions of Persons or businesses which are
not Similar Businesses and (B) the aggregate amount of Investments,
permitted under Section 7.05(e), in Persons or businesses which are not
Similar Businesses, shall not exceed $7,500,000 in the aggregate at any
time outstanding, and (c) such Acquisition is not opposed by the board of
directors or management of such Person to be acquired. The Borrower shall
not make the Chart House Acquisitions unless (a) the aggregate purchase
price (including without limitation cash, stock, debt assumed, near term
severance costs, cash payouts for options, non-compete payments, and other
transaction costs and including any adjustment for net working capital) for
the Chart House Acquisition does not exceed $60,000,000, and (b) prior to
the closing of the Chart House Acquisition, the Borrower has received
written approval of the terms of the Chart House Acquisition from the
Administrative Agent, and (c) prior to the closing of the Chart House
Acquisition, the Administrative agent has received from the Borrower a
Compliance Certificate showing compliance with the covenants under this
Agreement, on a pro forma basis as if the Chart House Acquisition had been
made.
(d) Section 7.12 is amended to read in its entirety as follows:
7.12 Capital Expenditures. Make, or become legally obligated to make,
any capital expenditure (excluding Acquisitions permitted under Section
7.11), except capital expenditures in any fiscal year of the Borrower not
exceeding the sum of (a) (i) in fiscal year 2001, $75,000,000 and (ii) in
fiscal years thereafter, $115,000,000 and (b) the amount, up to
$10,000,000, of unused capital expenditure allowance for the immediately
preceding fiscal year.
Section 3. Representations and Warranties. The Borrower represents and
warrants to the Administrative Agent and the Lenders that:
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(a) the representations and warranties set forth in the Credit Agreement
and in the other Loan Documents are true and correct in all material respects
as of the date of this Agreement;
(b) (i) the execution, delivery and performance of this Agreement are
within the corporate power and authority of the Borrower and have been duly
authorized by appropriate proceedings and (ii) this Agreement constitutes a
legal, valid, and binding obligation of the Borrower, enforceable in accordance
with its terms, except as limited as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting the rights
of creditors generally and general principles of equity; and
(c) as of the effectiveness of this Agreement, no Default or Event of
Default has occurred and is continuing.
Section 4. Effectiveness. This Agreement shall become effective as of the
date of this Agreement, and the Credit Agreement shall be amended as provided in
this Agreement, upon the occurrence of the following conditions precedent:
(a) the Borrower shall have delivered duly and validly executed originals
of this Agreement to the Administrative Agent and the Requisite Lenders and the
Administrative Agent shall have executed and delivered this Agreement;
(b) the representations and warranties in this Agreement shall be true
and correct in all material respects;
(c) the Administrative Agent shall have received a duly executed
reaffirmation of each Guaranty by a Subsidiary of the Borrower in form and
substance satisfactory to the Administrative Agent;
(d) The Administrative Agent shall have received a favorable opinion of
counsel for the Borrower in form and substance acceptable to the Administrative
Agent;
(e) the Borrower shall have paid to the Administrative Agent and to each
Lender which executes this Agreement on or prior to July 30, 2002 the fees and
expenses payable to them pursuant to any oral or written agreement between the
Borrower and the Administrative Agent;
(f) (i) the respective boards of directors of Seller and the Borrower and
its Subsidiaries shall have approved and shall not have withdrawn, modified, or
terminated their approval of the Transaction, the documents relating thereto, or
any of the transactions contemplated thereby and (ii) 40% of the shareholders of
the Seller shall have approved the Transaction; and
(g) all governmental, shareholder, and all material third-party non-
governmental consents (including Xxxx-Xxxxx-Xxxxxx clearance) and approvals
required as of the closing date in connection with the Transaction and the other
transactions contemplated hereby shall have been obtained; all such consents
and approvals shall be in full force and effect; and all applicable waiting
periods shall have expired without any action being taken by any authority that
could
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reasonably be expected to restrain, prevent, or impose any material adverse
conditions on the Transaction or such other transactions or that could
reasonably be expected to seek or threaten any of the foregoing.
Section 5. Effect on Loan Documents.
(a) Except as amended herein, the Credit Agreement and the Loan documents
remain in full force and effect as originally executed. Nothing herein shall act
as a waiver of any of the Administrative Agent's or Lenders' rights under the
Loan Documents, as amended, including the waiver of any Default or Event of
Default, however denominated.
(b) This Agreement is a Loan Document for the purposes of the provisions of
the other Loan Documents. Without limiting the foregoing, any breach of
representations, warranties, and covenants under this Agreement may be a Default
or Event of Default under other Loan Documents.
Section 6. Choice of Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York.
Section 7. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original.
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