SEVENTH AMENDMENT TO CREDIT AGREEMENT
EXHIBIT
10.1
SEVENTH AMENDMENT TO CREDIT AGREEMENT
THIS SEVENTH AMENDMENT TO CREDIT AMENDMENT (this “Amendment”) is made and entered into as of
September ___ 2008, by and among VOLUME SERVICES AMERICA, INC., a Delaware corporation (“VSA”),
VOLUME SERVICES, INC., a Delaware corporation (“VS”), SERVICE AMERICA CORPORATION, a Delaware
corporation (“SAC”) (VSA, VS and SAC are sometimes collectively referred to herein as the
“Borrowers” and individually as a “Borrower”), CENTERPLATE, INC., a Delaware corporation
(“Holdings”), the Lenders signatory hereto, and GENERAL ELECTRIC CAPITAL CORPORATION, as a Lender
and as the Administrative Agent (“Administrative Agent”).
Statement of Facts
A. Borrowers, Holdings, the Lenders, and the Administrative Agent are parties to that certain
Credit Agreement, dated as of April 1, 2005, as amended by that certain (i) First Amendment to
Credit Agreement, dated as of Xxxxx 00, 0000, (xx) Consent and Amendment, dated as of September 30,
2005, (iii) Third Amendment to Credit Agreement, dated as of June 8, 2007, (iv) Waiver and Fourth
Amendment to Credit Agreement, dated as of March 10, 2008, (v) Consent and Fifth Amendment to
Credit Agreement, dated as of April 1, 2008, and (vi) Sixth Amendment to Credit Agreement dated as
of May 19, 2008 (as so amended, the “Credit Agreement”; capitalized terms used but not defined in
this Amendment have the meanings given in the Credit Agreement, as amended by this Amendment),
whereby the Lenders have made certain extensions of credit to Borrowers.
B. Borrowers, the other Loan Parties and the Lenders desire to waive and amend certain
provisions of the Credit Agreement as provided for herein.
Statement of Terms
NOW THEREFORE, in consideration of the premises and mutual covenants contained herein, and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Waiver. The Borrower has requested that the Administrative Agent and the Lenders
waive the annual clean-up requirements of the Borrower as set forth in Section 2.10(j) of
the Credit Agreement solely for the 2008 Annual Fiscal Period (the “Specified Non-Compliance”).
Subject to the terms and conditions of this Amendment, the Administrative Agent and the Lenders
hereby waive the Specified Non-Compliance, together with any Default or Event of Default that would
otherwise occur as a result of the Specified Non-Compliance; provided that the waiver set
forth in this Section 1 (a) shall apply only for the 2008 Annual Fiscal Period, and (b)
shall be deemed null and void ab initio and of no further effect and such Specified Non-Compliance
shall be an immediate Event of Default if at any time a Merger Termination Event (as defined below
at the end of Section 2 hereof) shall have occurred.
2. Amendment. Subject to the terms and conditions of this Amendment, the Credit
Agreement shall be amended as follows:
(a) Section 1.1 of the Credit Agreement is hereby amended by inserting the following
new definitions in proper alphabetical order:
“Merger” shall mean the merger of Holdings with and into KPLT Mergerco, Inc.,
a Delaware corporation, with KPLT Mergerco, Inc., a Delaware corporation, being the
survivor of such merger, as contemplated by the terms of the Merger Agreement.
“Merger Agreement” shall mean that certain Merger Agreement, dated on or about
September 18, 2008 by and among KPLT Holdings, Inc., a Delaware corporation, KPLT Mergerco,
Inc., a Delaware corporation and a direct, wholly owned Subsidiary of KPLT Holdings, Inc.,
and Holdings, existing as of the Seventh Amendment Effective Date, together with all
schedules, annexes, attachments and exhibits thereto, as the same may be further amended or
modified after the Seventh Amendment Effective Date, provided, however that such
amendment or modification does not violate the terms of Section 4 of the Seventh Amendment.
“Seventh Amendment” shall mean that certain Seventh Amendment to Credit
Agreement dated as of September ___, 2008 by and among Holdings, the Borrowers, the Lenders
party thereto and the Administrative Agent.
“Seventh Amendment Effective Date” shall have the meaning given to such term in
Section 8 the Seventh Amendment.
(b) Section 1.1 of the Credit Agreement is hereby amended by deleting the definition
of “EBITDA” and substituting in lieu thereof the following new definition to read in its
entirety as follows:
“EBITDA” shall mean, for any Fiscal Period, consolidated net income (or loss),
as the case may be, of Holdings and its Subsidiaries determined on a consolidated basis in
accordance with U.S. GAAP for such Fiscal Period (excluding all extraordinary gains or
losses), and adding back to the extent deducted in determining such consolidated net income
(or loss) for such Fiscal Period: (a) Interest Expense, (b) Depreciation, (c) Amortization,
(d) Closing Costs in an amount not to exceed $8,000,000, (e) Tax Provisions, and (f) solely
for the purpose of determining (i) the Interest Coverage Ratio under Sections 6.10 and 6.18,
(ii) the Total Leverage Ratio under Sections 6.11 and 6.18, and (iii) the Senior Leverage
Ratio under Sections 6.12 and 6.18, in each case, and solely for each Monthly Fiscal Period
commencing with the Monthly Fiscal Period ending September 30, 2008 through and including
the Monthly Fiscal Period ended as of February 28, 2009, the following items shall be
excluded: (A) the IDS Secondary Expenses; (B) up to $7,000,000 for investment banking fees
(including a fairness opinion) and for legal expenses not related to amendments in respect
of this Agreement, in each case incurred for cash by Holdings after the Fifth Amendment
Effective Date; (C)
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up to $500,000 for other costs and expenses incurred for cash by Holdings after the Sixth
Amendment Effective Date; (D) up to $800,000 in costs and expenses related to the Fifth
Amendment; (E) up to $2,500,000 in costs and expenses related to the Sixth Amendment; and
(F) up to $1,300,000 in costs and expenses related to the Seventh Amendment;
provided that in the event Holdings or any of its Subsidiaries makes a Permitted
Business Acquisition during such period, EBITDA for such period shall be calculated on a pro
forma basis, based on the results of such acquired person as if such Permitted Business
Acquisition had occurred on the first day of such period; and provided, further, that with
respect to any such Permitted Business Acquisition, EBITDA may be further adjusted for
post-acquisition cost savings so long as any and all such adjustments are satisfactory to
the Administrative Agent and the Administrative Agent has received from the Borrowers all
supporting financial information as the Administrative Agent may reasonably request in order
to properly consider its approval of such adjustments. Solely for the purpose of
determining (i) the Interest Coverage Ratio under Sections 6.10 and 6.18, (ii) the Total
Leverage Ratio under Sections 6.11 and 6.18, and (iii) the Senior Leverage Ratio under
Sections 6.12 and 6.18, any amendment fees paid by Holdings or any other Loan Parties in
connection with any amendments of the Credit Agreement shall be deemed not to constitute
Cash Interest Expense, but shall be deemed to constitute other costs and expenses of
Holdings or such Loan Party.
(c) Section 1.1 of the Credit Agreement is hereby amended by deleting the definition
of “Cash Interest Expense” and substituting in lieu thereof the following new definition to
read in its entirety as follows:
“Cash Interest Expense” shall mean, for any Fiscal Period without duplication,
cash interest payments made in respect of the Indebtedness outstanding under the Loan
Documents, the Holdings Subordinated Notes, and other permitted Indebtedness, including,
without limitation or duplication, cash payments in respect of Deferred Subordinated Note
Interest and interest thereon, such amounts to be net of any interest income (after giving
effect to any interest rate xxxxxx) during such Fiscal Period, but excluding the amount of
the Deferred Subordinated Note Interest that has accrued on or prior to the date of
determination during such Fiscal Period and not been paid in cash. Solely for the purpose
of determining (i) the Interest Coverage Ratio under Sections 6.10 and 6.18, (ii) the Total
Leverage Ratio under Sections 6.11 and 6.18, and (iii) the Senior Leverage Ratio under
Sections 6.12 and 6.18, any amendment fees paid by Holdings or any other Loan Parties in
connection with any amendments of the Credit Agreement shall be deemed not to constitute
Cash Interest Expense, but shall be deemed to constitute other costs and expenses of
Holdings or such Loan Party.
(d) Section 5.4 of the Credit Agreement is hereby amended by adding the
following new subsection (q) to read in its entirety as follows:
(q) promptly upon receipt thereof, and in any event within three Business Days,
a copy of any written notice (I) received by any Loan Party or Subsidiary stating or
alleging that (i) such Loan Party or Subsidiary has breached
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its obligations under the Merger Agreement, (ii) any of the conditions precedent to
the effectiveness of the Merger have not been, or are incapable of being, timely
satisfied at any time and for any reason on or after the Seventh Amendment Effective
Date in accordance with the terms of the Merger Agreement, or (iii) any other event
has occurred that permits the termination of the Merger Agreement or of the Merger,
or that permits the MergerSub or Parent (under and as defined in the Merger
Agreement) to not consummate the Merger, in each case, unless the MergerSub and
Parent (under and as defined the Merger Agreement) has agreed in a writing, in form
and substance satisfactory to Administrative Agent, to waive the effect of such
event and to consummate the Merger and related transactions in accordance with the
terms of the Merger Agreement, (II) received by any Loan Party of termination in
respect of the Merger Agreement or the Merger, or of any written amendment or
modification of the Merger Agreement entered into by any of the parties to the
Merger Agreement, or (III) delivered by any Loan Party to the MergerSub or Parent
(under and as defined in the Merger Agreement) of termination in respect of the
Merger or the Merger Agreement.
(e) Section 6.12 of the Credit Agreement is hereby amended by deleting such Section in
its entirety and substituting in lieu thereof the following:
SECTION 6.12 Senior Leverage Ratio. Permit the Senior Leverage Ratio as of the
end of any Monthly Fiscal Period ending during the period set forth below to be greater than
the ratio set forth below for such Monthly Fiscal Period:
| Maximum Senior | ||
| Applicable Period | Leverage Ratio | |
As of the Closing Date and for all Monthly Fiscal Periods
ending on March 31, 2005 and thereafter through and
including the Annual Fiscal Period 2007
|
2.50 to 1.00 | |
Monthly Fiscal Period ending on January 31, 2008
|
2.40 to 1.00 | |
Monthly Fiscal Periods ending on February 29, 2008 through
and including March 31, 2008
|
2.50 to 1.00 | |
Monthly Fiscal Periods ending on April 30, 2008 through and
including June 30, 2008
|
2.95 to 1.00 | |
Monthly Fiscal Periods ending on July 31, 2008 through and
including February 28, 2009
|
2.90 to 1.00 | |
All Monthly Fiscal Periods ending thereafter
|
2.40 to 1.00 |
(f) Section 6.18 of the Credit Agreement is hereby amended by deleting the initial
clause (iii) in such Section in their entirety and substituting in lieu thereof the following:
(iii) The Senior Leverage Ratio is greater than:
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| Maximum Senior | ||
| Applicable Period | Leverage Ratio | |
As of the Closing Date and for all Monthly Fiscal Periods
ending on March 31, 2005 and thereafter through and
including the Annual Fiscal Period 2007
|
2.40 to 1.00 | |
Monthly Fiscal Period ending on January 31, 2008
|
2.30 to 1.00 | |
Monthly Fiscal Periods ending on February 29, 2008 and
March 31, 2008
|
2.50 to 1.00 | |
Monthly Fiscal Periods ending on April 30, 2008 through and
including June 30, 2008
|
2.85 to 1.00 | |
Monthly Fiscal Periods ending on July 31, 2008 through and
including September 30, 2008
|
2.80 to 1.00 | |
All Monthly Fiscal Periods ending thereafter
|
2.30 to 1.00 |
The amendments provided for above in Section 2 shall be deemed null and void ab initio and
of no further effect if, at any time on or after the date of this Amendment, any of the
following events shall have occurred (each such event is referred to herein as a “Merger
Termination Event”) (i) the Merger is not consummated by February 28, 2009 for any reason,
(ii) the Merger Agreement terminates pursuant to its terms, (iii) Borrowers or any other
Loan Party receives a written notice of termination in respect of the Merger Agreement or
the Merger, or (iv) Borrowers or any other Loan Party delivers to the MergerSub or Parent
(under and as defined in the Merger Agreement) a written notice of termination in respect of
the Merger or the Merger Agreement.
3. Representations and Warranties. Each Borrower hereby represents and warrants to
the Administrative Agent and the Lenders that (a) this Amendment and the Confirmation attached
hereto have been duly authorized, executed and delivered by such Borrower and any other Loan Party
signatory thereto, (b) no Default or Event of Default has occurred and is continuing on and as of
the date of this Amendment and after giving effect to this Amendment, and (c) all of the
representations and warranties made by Holdings, Borrowers or any of the other Loan Parties in the
Credit Agreement are true and correct in all material respects on and as of the date of this
Amendment and after giving effect to this Amendment (except to the extent that any such
representations or warranties (i) expressly referred to a specific prior date, or (ii) have changed
based upon events expressly permitted by the Credit Agreement).
4. Covenants. Each Borrower hereby covenants and agrees that (a) the consummation of
the Merger shall constitute a Change of Control as such term is defined in the Credit Agreement,
and (b) immediately upon the effective date of the Merger, the Borrowers shall repay in full all of
the outstanding Loans and other Obligations and terminate the Commitments, and any failure on the
part of the Borrowers to do any of the foregoing shall constitute an immediate Event of Default
under the Credit Agreement.
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5. Ratification. Each Borrower hereby ratifies and reaffirms each and every term,
covenant and condition set forth in the Credit Agreement and all other documents delivered by such
Borrower in connection therewith (including without limitation the other Loan Documents to which
such Borrower is a party), effective as of the date hereof and after giving effect to this
Amendment.
6. Release. (a) Each Loan Party, on behalf of itself and its successors, assigns, and
other legal representatives, hereby absolutely, unconditionally and irrevocably releases, remises
and forever discharges the Administrative Agent and Lenders, in their respective capacities as
Administrative Agent and Lenders under the Credit Agreement, and their successors and assigns, and
their present and former shareholders, affiliates, subsidiaries, divisions, predecessors,
directors, officers, attorneys, employees, agents and other representatives (the Administrative
Agent, each Lender and all such other Persons being hereinafter referred to collectively as the
“Releasees” and individually as a “Releasee”), of and from all demands, actions, causes of action,
suits, controversies, sums of money, accounts, bills, reckonings, damages and any and all other
claims, counterclaims, defenses, rights of set off, demands and liabilities whatsoever
(individually, a “Claim” and collectively, “Claims”) of every name and nature, known or unknown,
suspected or unsuspected, both at law and in equity, which such Loan Party or any of its
successors, assigns, or other legal representatives may now or hereafter own, hold, have or claim
to have against the Releasees or any of them for, upon, or by reason of any circumstance, action,
cause or thing whatsoever which arises at any time on or prior to the date that this Amendment is
executed by all parties, in each case solely for or on account of or relating to the Credit
Agreement, any of the other Loan Documents or the transactions thereunder or related thereto, but
not including any Claims based on (i) any unfulfilled Borrowing request that remains outstanding as
of the date of this Amendment and for which a request for Borrowing has been properly given by
Borrower Representative under the Credit Agreement but not yet funded by Lenders, or (ii) checks,
wire transfers or other matters which are ancillary to the credit transactions contemplated by the
Credit Agreement.
(b) Each Loan Party understands, acknowledges and agrees that its release set forth above may
be pleaded as a full and complete defense and may be used as a basis for an injunction against any
action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the
provisions of such release.
(c) Each Loan Party agrees that no fact, event, circumstance, evidence or transaction which
could now be asserted or which may hereafter be discovered shall affect in any manner the final,
absolute and unconditional nature of the release set forth above.
7. Reimbursement of Expenses. Additionally, Borrowers hereby agree, on a joint and
several basis, to reimburse the Administrative Agent and the Lenders on demand for all reasonable
costs and expenses (including without limitation reasonable attorney’s fees) incurred by such
parties in connection with the negotiation, documentation and consummation of this Amendment and
the other documents executed in connection herewith and therewith and the transactions contemplated
hereby and thereby.
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8. Conditions to Effectiveness. This Amendment shall be effective as of the date of
this Amendment (the “Seventh Amendment Effective Date”), subject to satisfaction of each of the
following conditions precedent, which conditions in any event must be satisfied in full on or prior
to October 16, 2008 in order for this Amendment to be considered effective:
(a) the Administrative Agent shall have received counterparts of this Amendment, duly
executed, completed and delivered by Borrowers, the Administrative Agent and each of the
Required Lenders;
(b) the Administrative Agent shall have received payment from Borrowers of all fees and
expenses payable to it for its own account in connection with this Amendment;
(c) the Administrative Agent shall have received counterparts of the Confirmation
attached to this Amendment, duly executed, completed and delivered by each Loan Party party
thereto;
(d) the Administrative Agent shall have received payment by 3:00 P.M. (New York time),
on the date that is one Business Day after the signing of the Merger Agreement by all
parties thereto, from Borrowers of the Amendment Fee (defined below) for the account of the
Lenders that have duly executed and delivered a counterpart of this Amendment to the
Administrative Agent on or prior to 3:00 P.M. (New York time),
September 16, 2008; and
(e) the Administrative Agent shall have received a copy of the Merger Agreement in
substantially final form, which Merger Agreement shall be in form and substance reasonably
satisfactory to the Administrative Agent.
The parties hereto acknowledge and agree that this Amendment shall not become
effective, but shall terminate and be null and void, if each of the foregoing conditions
precedent are not satisfied in full on or prior to October 16, 2008.
9. Amendment Fee. Borrowers hereby agree to pay to each Lender (including General
Electric Capital Corporation) that executes and delivers a counterpart of this Amendment to the
Administrative Agent on or prior to 3:00 P.M. (New York time),
September 16, 2008 (such Lender
referred to herein as a “Consenting Lender”), an amendment fee (the “Amendment Fee”) an amount
equal to the sum of (1) the product of 0.50% multiplied by the amount of such Lender’s Revolving
Credit Commitment as of September 16, 2008 (prior to giving effect to the reduction in such
Revolving Credit Commitment pursuant to the amendment to “Total Revolving Credit Commitment” set
forth in Section 2(b) of this Amendment) plus (2) the product of 0.50% multiplied
by the outstanding principal amount of such Lender’s Term Loans
as of September 16, 2008. Borrower
shall pay the Amendment Fee in immediately available funds to the Administrative Agent for
distribution to the Consenting Lenders on or prior to 3:00 P.M. (New York time) on the date that is
one Business Day after the signing of the Merger Agreement by all parties thereto;
provided, however, that the Amendment Fee shall not be due and payable by Borrowers
(or distributed by the Administrative Agent) to Consenting
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Lenders unless and until all of the conditions precedent set forth in Sections 8(a) and
(c) of this Amendment shall have been satisfied. Any such Amendment Fees shall be
distributed by the Administrative Agent to Consenting Lenders within five (5) Business Days after
receipt thereof from Borrower, provided that all conditions precedent in Sections
8(a) and (c) have been satisfied.
10. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK FOR CONTRACTS TO BE PERFORMED ENTIRELY WITHIN SAID STATE.
11. Severability of Provisions. Any provision of this Amendment which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other jurisdiction. To the
extent permitted by applicable law, each Borrower hereby waives any provision of law that renders
any provision hereof prohibited or unenforceable in any respect.
12. Counterparts. This Amendment may be executed in any number of counterparts, all
of which shall be deemed to constitute but one original and shall be binding upon all parties,
their successors and permitted assigns.
13. Entire Agreement. The Credit Agreement as amended by this Amendment embodies the
entire agreement between the parties hereto relating to the subject matter hereof and supersedes
all prior agreements, representations and understandings, if any, relating to the subject matter
hereof.
14. No Other Amendments or Waivers. Except for the waiver and the amendments set
forth in Sections 1 and 2 above, the Credit Agreement and the other Loan
Documents shall remain unchanged and in full force and effect. Nothing in this Amendment is
intended, or shall be construed, to constitute a novation or an accord and satisfaction of any of
the Obligations or to modify, affect or impair the perfection or continuity of the Administrative
Agent’s and the Lenders’ security interests in, security titles to or other Liens on any
Collateral.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties have caused this Seventh Amendment to Credit Agreement be duly
executed by their respective duly authorized officers, as of the date first above written.
| VOLUME SERVICES AMERICA, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| VOLUME SERVICES, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| SERVICE AMERICA CORPORATION |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| CENTERPLATE, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
[Signature Page to Seventh Amendment to credit agreement]
| GENERAL ELECTRIC CAPITAL CORPORATION, as a Lender and as Administrative Agent |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
[Signature Page to Seventh Amendment to credit agreement]
| , as a Lender |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
[Signature Page to Seventh Amendment to credit agreement]
CONFIRMATION
Each of the undersigned Loan Parties hereby acknowledges, consents and agrees to the terms of
the foregoing Amendment and agrees and confirms that its obligations under each Loan Document to
which it is a party will continue in full force and effect after giving effect to such Amendment.
This day of 2008.
| SERVICE AMERICA CONCESSIONS CORPORATION, a Maryland corporation |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| SERVICE AMERICA OF TEXAS, INC., a Texas corporation |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| V.S.I. OF MARYLAND, INC., a Maryland corporation |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
[Signature Page to Seventh Amendment to Credit Agreement]
| CENTERPLATE OF KANSAS, INC., a Kansas corporation |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
[Signature Page to Seventh Amendment to Credit Agreement]
