AGREEMENT AND AMENDMENT NO. 2 TO CREDIT AGREEMENT
Exhibit
10.16.1
AGREEMENT
AND AMENDMENT NO. 2 TO CREDIT AGREEMENT
THIS
AGREEMENT AND AMENDMENT NO. 2 TO CREDIT AGREEMENT (this “Amendment”) is made
as of December 28, 2008, by and between MEXICAN RESTAURANTS, INC., a Texas
corporation (the “Borrower”), and XXXXX
FARGO BANK, N.A., a national banking association (the “Lender”).
WHEREAS,
the Borrower and the Lender are parties to a certain Credit Agreement, dated as
of June 29, 2007, as amended (the “Credit Agreement”);
terms used herein and not otherwise defined are used herein as defined in the
Credit Agreement; and
WHEREAS,
the Borrower has requested that the Lender amend Sections 1.1 and 7.1(c) of the
Credit Agreement and consent to the sale of the La Senorita Business (as defined
below);
NOW,
THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
1. Amendments to Credit
Agreement.
1.1 The
defined term “Growth Capital Expenditures” set forth in Section 1.1 of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:
“Growth Capital
Expenditures. Capital Expenditures for growth including, but
not limited to, New Construction relating to Operating Units and the
acquisitions of restaurants, including remodeling and renovation expenditures
for any restaurant, but excluding such remodeling and renovation expenditures to
the extent (a) funded by insurance proceeds or (b) funded by the Borrower (i) to
satisfy deductibles for insured losses or (ii) to implement improvements
required by building codes not covered by insurance proceeds.”
1.2 Section
7.1(c) of the Credit Agreement is hereby amended and restated in its entirety to
read as follows:
“(c)
Commitments to Make Growth Capital Expenditures. The Borrower
and its Subsidiaries will not make or commit to make (by entering into a lease
or other agreement) any Growth Capital Expenditures (i) during Fiscal Year 2009,
in excess of $1,000,000 and (ii) during Fiscal Year 2010, in excess of
$1,200,000.”
2. Consent to Sale of La
Senorita Business. Notwithstanding Section 8.4 of the Credit
Agreement, the Lender hereby consents to the sale (the “Proposed Sale”) by
the Borrower and certain of its Subsidiaries of all or substantially all of the
assets of their La Senorita restaurants and the equity interests of the La
Senorita Franchise Company (the “La Senorita Business”), subject
to the following conditions:
(a) the
Proposed Sale shall occur on or before April 10, 2009 on substantially the same
terms specified in the Letter of Intent, dated as of July 11, 2008 (as amended
February __, 2009) executed and delivered by Hacienda Mexican Restaurants and
LAS Acquisition Company, Inc., on the one hand, and the Borrower and certain of
its Subsidiaries, on the other hand;
(b) immediately
prior to the Proposed Sale and after giving effect thereto no Default shall have
occurred and be continuing;
(c) copies
of all documents relating to the Proposed Sale and any other documents
(financial or otherwise) reasonably requested by the Lender (including, without
limitation, invoices for legal fees and other deal expenses related to the
Proposed Sale) shall have been delivered to the Lender as and when requested;
and
(d) one
hundred percent (100%) of the proceeds of the Proposed Sale, which shall not be
less than $2,600,000, net of legal fees and other deal expenses related to the
Proposed Sale (the “Net Proceeds”), shall
be paid directly from the purchaser of the Business to the Lender for
application by the Lender to the Obligations in accordance with the Credit
Agreement.
3. Effects of Proposed
Sale. From and after the consummation of the Proposed
Sale,
(a) all
Consolidated EBITDA generated by the Proposed Sale and the La Senorita Business
during any Measurement Period during which the Proposed Sale was consummated
shall be disregarded for purposes of calculating the Consolidated Fixed Charge
Coverage Ratio and the Total Leverage Ratio; and
(b) the
Commitment shall be reduced by an amount equal to one hundred percent (100%) of
the Net Proceeds paid to the Lender pursuant to Section 2(d) above.
4. Conditions to
Effectiveness. The amendments to the Credit Agreement
contemplated hereby shall become effective as of the date first written above,
provided that (i) the Lender shall have received from the Borrower a counterpart
of this Amendment duly executed by the Borrower and (ii) the Borrower shall have
paid the attorneys’ fees of the Lender incurred in connection with this
Amendment.
5. Representations.
The
Borrower represents and warrants to the Lender, as follows:
(a) upon
giving effect to this Amendment, no Default has occurred and is continuing as of
the date hereof;
(b) the
representations and warranties contained in Section V of the Credit Agreement
are true and correct in all material respects on and as of the date hereof
(except to the extent that such representations and warranties expressly relate
to an earlier date); and
(c) the
resolutions referred to in Section 4.1 of the Credit Agreement remain in full
force and effect on and as of the date hereof.
6. General. The
foregoing amendments to the Credit Agreement are limited as provided herein and
do not extend to any other provisions of the Credit Agreement not specified
herein or to any other matter. The Credit Agreement is ratified and
confirmed and shall continue in full force and effect as amended
hereby. This Amendment may be executed in any number of counterparts
with the same effect as if the signatures hereto and thereto were upon the same
instrument.
[Signature
page follows.]
IN
WITNESS WHEREOF, THIS AGREEMENT AND AMENDMENT NO. 2 TO CREDIT AGREEMENT has been
executed as a sealed instrument as of the date first written above.
MEXICAN
RESTAURANTS, INC.
By: /s/
Xxxxxx X. Xxxxxxx
Name: Xxxxxx
X. Xxxxxxx
Title: Executive
Vice President & CFO
XXXXX
FARGO BANK, N.A
By: /s/
Xxxxxxx X. Xxxx
Name: Xxxxxxx
X. Xxxx
Title: Managing
Director