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Exhibit 10(s)
FIRST AMENDMENT TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
DATED AS OF JANUARY 30, 1998
THIS FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT ("First Amendment") dated as of December 11, 1998, between MAX &
ERMA'S RESTAURANTS, INC., a Delaware corporation ("Borrower") and THE PROVIDENT
BANK, an Ohio banking association (the "Lender").
WITNESSETH:
WHEREAS, the Borrower and the Lender, parties to the Amended and
Restated Loan and Security Agreement, dated as of January 30, 1998 (the
"Agreement"), have agreed to amend the Agreement by this First Amendment on the
terms and conditions hereinafter set forth. Terms not otherwise defined herein
are used as defined in the Agreement as amended hereby.
NOW, THEREFORE, the Borrower and the Lender hereby agree as follows:
Section 1. AMENDMENT OF THE AGREEMENT. The Agreement is, effective the
date hereof, hereby amended as follows:
1.1. In Section 1.1(a), the "Maturity Date" shall be
changed from January 1, 2004 to August 1, 2006.
1.2. Section 1.1(b) is amended and restated in its
entirety as follows:
(b) MAXIMUM COMMITMENT. The Bank agrees to lend to
the Company up to an amount (the "Maximum
Commitment") equal to the lesser of (a) the Bank's
Baseline Commitment, or (b) the Residual Commitment.
The Baseline Commitment of the Bank is $20,000,000
which Baseline Commitment shall decrease by
$1,000,000 every three months, with the first
decrease to occur on November 1, 2001; PROVIDED,
HOWEVER, that $9,000,000 of the Baseline Commitment
shall be reserved for a single Loan to be made on or
before January 31, 1999 (the "Fixed Rate Advance"),
which Fixed Rate Advance shall bear interest as
specified in Section 1.4(c). The Residual Commitment
shall equal the Baseline Commitment less the
scheduled decreases, as reflected in the attached
Schedule 1.1(b). The maximum amount of all
outstanding Loans of the Bank to the Company under
this Agreement shall not exceed the Maximum
Commitment of the Bank. The Maximum Commitment of the
Bank as adjusted from time
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to time is hereinafter called the "Commitment" of the
Bank. No Commitment shall become effective until each
of the parties hereto shall have executed this
Agreement or a counterpart hereof.
1.3. Section 1.2 is amended and restated in its entirety
as follows:
1.2 CANCELLATION OR REDUCTION OF THE COMMITMENT BY
THE COMPANY. During the period from and including the
date of this Agreement to but excluding the Maturity
Date, the Commitment of the Bank may, subject to the
payment of the Interest Preservation Amount described
in Section 1.5, be cancelled or may be reduced
permanently from time to time by the Company in the
amount of $100,000 or any larger amount which is a
whole multiple of $100,000 upon 10 Banking Days'
written notice to the Bank of the Company's election
to do so, which notice shall specify the date when
such cancellation or reduction shall be effective and
on the effective date of such reduction the
Commitment of the Bank shall be reduced; PROVIDED
that-
(a) any such cancellation or reduction shall be
irrevocable;
(b) in the event of a cancellation of the Commitment
of the Bank, (i) the Note shall be paid in full, (ii)
all Commitment Fees due to the date of cancellation
shall be paid in full and (iii) all expenses due
pursuant to Section 10.7 hereof shall be paid in
full; and
(c) in the event of a reduction of the Commitment of
the Bank to an amount less than the principal amount
then outstanding hereunder, the Note shall be prepaid
so that the unpaid aggregate principal amount of the
then outstanding Loans does not exceed the Commitment
of the Bank as so reduced.
1.4. Section 1.4(b) is amended and restated in its
entirety as follows:
(b) INTEREST. Each Loan other than the Fixed Rate
Advance shall bear interest on the unpaid principal
balance of all Loans made by the Bank for each day
from the day such Loan is made until it becomes due,
at a fluctuating rate per annum which rate will be
immediately adjusted upon the execution of this
Amendment. Thereafter such
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rate will be adjusted based upon the Borrower's submission of financial
information pursuant to Section 5.2 herein beginning with the quarter
ending November, 1995. The interest rate adjustment will be effective
the first Monday following receipt by the Bank of the Quarterly
Compliance Certificate pursuant to Section 5.4(c) herein. The interest
rate will be established from the following schedule based upon the
Borrower's ratio of Unsubordinated Indebtedness to the sum of Tangible
Net Worth plus Subordinated Debt as of the date of such fiscal quarter
end:
Ratio at quarter end Rate for following quarter
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Less than 0.75:1.0 The Prime Rate
0.751 through 1.25:1.0 One-quarter percent (1/4%) above
the Prime Rate
1.251 through 1.5:1.0 One half percent (1/2%) above
the Prime Rate
Greater than 1.51:1.0 Three quarters (3/4%) above the
Prime Rate
Interest on all Loans shall be calculated on the basis of the actual
number of days elapsed over a year of 360 days. As used in this
Agreement, the term "Prime Rate" on any day shall mean the rate
published or announced by the Bank as its "Prime Rate" which rate may
not be the Bank's lowest rate. Any change in the interest rate on a
Loan due to a change in the Prime Rate shall take effect on the date of
such change in the Prime Rate. Interest on the Loans shall be payable
quarterly on the last day of each December, March, June and September,
commencing on the first such date following the initial Loan. To the
extent permitted by applicable law, the Bank may charge interest at the
foregoing rates on all interest and other amounts owing hereunder which
are not paid when due.
1.5. A new Section 1.4(c) is added to the Agreement as follows:
(c) The Fixed Rate Advance shall bear interest on the unpaid principal
balance from the day such Fixed Rate Advance is made until it becomes
due, at a per annum rate of 7.38%. Interest on the Fixed Rate Advance
shall be
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calculated on the actual number of days elapsed over a year of
360 days. Interest on the Fixed Rate Advance shall be payable
quarterly on the last day of each December, March, June and
September, commencing on the first such date following the
disbursement of the Fixed Rate Advance.
1.6. Section 1.5 is amended and restated in its entirety as
follows:
1.5 PREPAYMENTS AND RIGHT TO REBORROW. Outstanding Loans may
be prepaid in whole at any time or in part from time to time
without premium or penalty; PROVIDED, HOWEVER, that any and
all prepayments that reduce the outstanding principal balance
under the Note to less than the amount of the Fixed Rate
Advance will be required to be accompanied by a payment (the
"Interest Preservation Amount") equal to two percent (2%) of
the difference between the amount of the Fixed Rate Advance
and the then-current principal balance outstanding under the
Note. No prepayment shall affect the Company's right to
reborrow from the Bank under the Commitment of the Bank up to
the permissible amount hereunder prior to the Maturity Date.
1.7. Section 5.1 is amended and restated in its entirety as
follows:
5.1 USE OF PROCEEDS. The Company shall use the Loan proceeds
disbursed pursuant to this Agreement for legal and proper
purposes; PROVIDED, HOWEVER, that the Fixed Rate Advance (as
defined in Section 1.1(b) hereof) shall be used solely to
redeem the convertible subordinated debentures of the Company,
and for other specific general corporate purposes approved by
the Bank.
1.8. Section 6.2(b) is amended and restated in its entirety as
follows:
(b) INDEBTEDNESS/TANGIBLE NET WORTH RATIO. Permit the ratio of
Unsubordinated Indebtedness to the sum of Tangible Net Worth
plus Subordinated Debt at any time to exceed 1.75 to 1.
1.9. Exhibit A and Schedule 1.1(b) attached to the Agreement are hereby
deleted and replaced by the new Exhibit A-2 and Schedule 1.1(b)-2 attached to
this First Amendment.
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Section 2. GOVERNING LAW. This First Amendment shall be governed by and
construed in accordance with the laws of the State of Ohio.
Section 3. COSTS AND EXPENSES. The Borrower hereby agrees to pay on
demand all reasonable costs and expenses of the Lender in connection with the
preparation, execution and delivery of this First Amendment and the other
documents to be delivered in connection herewith, including, without limitation,
the reasonable fees and out-of-pocket expenses of counsel to the Lender with
respect thereto.
Section 4. COUNTERPARTS. This First Amendment 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 when taken together shall constitute one and the same agreement.
Section 5. CONDITIONS PRECEDENT. Simultaneously with the execution
hereof, the Lender shall receive all of the following, each dated the date
hereof, in form and substance satisfactory to the Lender:
5.1. Certified copies of (a) the resolutions of the board of
directors or other appropriate management committee of the Company evidencing
authorization of the execution, delivery, and performance of this First
Amendment; and (b) all documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this First Amendment, or the
transactions contemplated hereby.
5.2. The executed Note.
5.3. A $25,000 closing fee.
5.4. Such other documents as the Lender may, in its reasonable
discretion, so require.
Section 6. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES; NO
DEFAULTS. The Borrower hereby expressly acknowledges and confirms that the
representations and warranties of the Borrower set forth in Section 9 of the
Agreement are true and accurate on this date with the same effect as if made on
and as of this date; that no financial condition or circumstance exists which
would inevitably result in the occurrence of an Event of Default under Section
13 of the Agreement; and that no event has occurred or no condition exists which
constitutes, or with the running of time or the giving of notice would
constitute an Event of Default under Section 13 of the Agreement.
Section 7. REAFFIRMATION OF DOCUMENTS. Except as herein expressly
modified, the parties hereto ratify and confirm all of the terms, conditions,
warranties and covenants of the Agreement, and all security agreements, pledge
agreements, mortgage deeds, notes, assignments, subordination agreements, or
other instruments or documents executed in connection with the Agreement. This
First Amendment does not constitute the extinguishment of any obligation or
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indebtedness previously incurred, nor does it in any manner affect or impair any
security interest granted to the Lender, all of such security interests to be
continued in full force and effect until the indebtedness described herein is
fully satisfied.
The parties have executed this First Amendment as of the date first
above written.
THE PROVIDENT BANK
By: /s/ Xxxxxxx X. Guilioli
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Name: Xxxxxxx X. Guilioli
Its: Senior Vice President
MAX & ERMA'S RESTAURANTS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
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Name: Xxxxxxx X. Xxxxxxx, Xx.
Its: Executive Vice President
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EXHIBIT A-2
[Form of Note to follow]
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SCHEDULE 1.1(b)-2
DATES RESIDUAL COMMITMENT
Prior to November 1, 2001 $20,000,000.00
November 1, 2001 - January 31, 2002 19,000,000.00
February 1, 2002 - April 30, 2002 18,000,000.00
May 1, 2002 - July 31, 2002 17,000,000.00
August 1, 2002 - October 31, 2002 16,000,000.00
November 1, 2002 - January 31, 2003 15,000,000.00
February 1, 2003 - April 30, 2003 14,000,000.00
May 1, 2003 - July 31, 2003 13,000,000.00
August 1, 2003 - October 31, 2003 12,000,000.00
November 1, 2003 - January 31, 2004 11,000,000.00
February 1, 2004 - April 30, 2004 19,000,000.00
May 1, 2004 - July 31, 2004 9,000,000.00
August 1, 2004 - October 31, 2004 8,000,000.00
November 1, 2004 - January 31, 2005 7,000,000.00
February 1, 2005 - April 30, 2005 6,000,000.00
May 1, 2005 - July 31, 2005 5,000,000.00
August 1, 2005 - October 31, 2005 4,000,000.00
November 1, 2005 - January 31, 2006 3,000,000.00
February 1, 2006 - April 30, 2006 2,000,000.00
May 1, 2006 - July 31, 2006 1,000,000.00
August 1, 2006 0
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