EXHIBIT 10.9
THIRD AMENDMENT TO CREDIT AGREEMENT
This THIRD AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), made and
entered into as of March 3, 2000, is by and between BUCA, INC., a Minnesota
corporation (the "Borrower"), the banks which are signatories hereto
(individually, a "Bank" and, collectively, the "Banks"), BANK OF AMERICA, N.A.,
a national banking association ("B of A"), as one of the Banks and as co-agent
for the Banks (in such capacity, a "Co-Agent"), FLEET NATIONAL BANK, a national
banking association formerly known as BankBoston, N.A., as one of the Banks and
as co-agent for the Banks (in such capacity, a "Co-Agent") and U.S. BANK
NATIONAL ASSOCIATION, a national banking association, as one of the Banks, and
as agent for the Banks (in such capacity, the "Agent").
RECITALS
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1. U.S. Bank National Association, as Agent and as a Bank, and Bank of
America, N.A., as Co-Agent and as a Bank, and the Borrower entered into a Credit
Agreement dated as of September 27, 1999, as amended by that First Amendment to
Credit Agreement dated as of October 21, 1999, among U.S. Bank National
Association, as Agent and as a Bank, Bank of America, N.A., as Co-Agent and as a
Bank, and BankBoston, N.A., as Co-Agent and as a Bank, and as amended by that
Second Amendment to Credit Agreement dated as of December 24, 1999, among U.S.
Bank National Association, as Agent and as a Bank, Bank of America, N.A., as
Co-Agent and as a Bank, and BankBoston, N.A., as Co-Agent and as a Bank (the
"Credit Agreement"); and
2. The Borrower has requested that the Banks amend the Credit Agreement in
certain respects.
3. The parties desire to amend the Credit Agreement, subject to the terms
and conditions set forth in this Amendment.
AGREEMENT
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NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto hereby covenant
and agree to be bound as follows:
Section 1. Capitalized Terms. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to them in the Credit
Agreement, unless the context shall otherwise require.
Section 2. Amendment. The Credit Agreement is hereby amended as follows:
2.1 Definitions
2.1(a) The definition of "Fixed Charge Coverage Ratio" contained
in Section 1.1 of the Credit Agreement is hereby amended to read in
its entirety as follows:
"Fixed Charge Coverage Ratio": For any date of determination, the
ratio of
(a) the sum of (i) Annualized EBITDA, plus (ii) the product
of (A) Operating Lease Payments for the immediately preceding
six-fiscal month period, times (B) two,
to
(b) the sum (without duplication) of (i) the product of (A)
Interest Expense for the immediately preceding six-fiscal month
period, times (B) two, plus (ii) all required principal payments
with respect to Total Liabilities (including but not limited to
all such payments with respect to Capitalized Lease Obligations
of the Borrower and the Subsidiaries) for the immediately
preceding twelve-fiscal month period, plus (iii) the product of
(A) Operating Lease Payments for the immediately preceding
six-fiscal month period, times (B) two, plus (iv) the product of
(A) $50,000, and (B) the number of restaurants operating as of
the date of determination, plus (v) the product of (A) income
taxes of the Borrower and the Subsidiaries accrued for the
immediately preceding six-fiscal month period, times (B) two,
in each case determined on a consolidated basis in accordance with
GAAP.
2.1(b) The definition of "Revolving (B) Commitment Amount"
contained in Section 1.1 of the Credit Agreement is hereby amended by
deleting the reference to "March 26, 2000" therein and replacing it
with "February 21, 2000", and by deleting the reference to "June 30,
2000" therein and replacing it with "March 15, 2000."
2.2 Revolving (B) Commitment. Section 2.1(a) of the Credit Agreement
is hereby amended by deleting the reference to "June 30, 2000" in clause
(ii) thereof and replacing it with "March 15, 2000".
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2.3 Fixed Charge Coverage Ratio. Section 6.19 of the Credit Agreement
is hereby amended to read in its entirety as follows:
Section 6.19 Fixed Charge Coverage Ratio. The Borrower will not permit
the Fixed Coverage Ratio as of the last day of any quarter which ends
during any period of measurement described below, to be less than the ratio
set forth for such period:
Minimum Fixed
Measurement Period Charge Coverage Ratio
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October 1, 1999 through
December 31, 1999 1.90 to 1.00
January 1, 2000 through
March 31, 2000 1.75 to 1.00
Thereafter 1.60 to 1.00
2.4 Cash Flow Leverage Ratio. Section 6.20 of the Credit Agreement is
hereby amended to read in its entirety as follows:
Section 6.20 Cash Flow Leverage Ratio. The Borrower will not permit
the Cash Flow Leverage Ratio, as of the last day of any fiscal quarter
which ends during any period of measurement described below, to be greater
than the ratio set forth below for such period:
Maximum Cash Flow
Measurement Period Leverage Ratio
------------------ ------------------
October 1, 1999 through
March 31, 2000 3.50 to 1.00
April 1, 2000 through
June 30, 2000 3.00 to 1.00
Thereafter 2.75 to 1.00
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Section 3. Default and Waiver.
3.1 Capital Expenditures. Under Section 6.10 of the Credit Agreement,
the Borrower agreed that it would not, nor would it permit any Subsidiary
to, make Capital Expenditures, on a consolidated basis, in fiscal year
1999, in an amount exceeding $31,000,000. The Borrower has advised the
Agent that its Capital Expenditures for fiscal year 1999 totaled
approximately $39,200,000. As a result, an Event of Default has occurred
under Section 7.1(c) of the Credit Agreement. The Borrower has requested
that the Banks waive such Event of Default.
3.2 Minimum Fixed Charge Coverage. Under Section 6.19 of the Credit
Agreement, the Borrower agreed that it would not permit its Fixed Charge
Covenant Ratio at December 31, 1999 to be less than 1.90:1.00. The Borrower
has advised the Agent that as at December 31, 1999, the actual Fixed Charge
Coverage Ratio was 1.31:1.00. As a result, an Event of Default has occurred
under Section 7.1(c) of the Credit Agreement. The Borrower has requested
that the Banks waive such Event of Default.
3.3 Waiver. Upon the date on which the amendments contained in this
Amendment become effective, the Banks hereby waive the Borrower's Defaults
and Events of Default described in Section 3.1 and 3.2 hereof. The Borrower
agrees that the waivers set forth in this Section 3.3 shall be limited to
the precise meaning of the words as written herein and shall not be deemed
(a) to be a consent to any waiver or modification of any other term or
condition of the Credit Agreement or (b) to prejudice any right or remedy
that the Agent or any Bank may now have or may in the future have under or
in connection with the Credit Agreement with respect to other Defaults or
Events of Default. The Borrower acknowledges and agrees that the waivers
set forth in this Section 3.3 are provided by the Banks as a financial
accommodation to the Borrower. Except as expressly set forth herein, the
waivers described in this Section 3.3 shall not alter, affect, release or
prejudice in any way any of the Borrower's obligations under the Credit
Agreement. The waivers set forth herein shall not constitute a waiver by
the Agent or any Bank of any other Default or Event of Default, if any,
under the Credit Agreement, and shall not be, and shall not be deemed to
be, a course of action with respect thereto upon which the Borrower may
rely in the future and the Borrower hereby expressly waives any claim to
such effect.
Section 4. Effectiveness of Amendments. The amendments contained in this
Amendment shall become effective upon delivery by the Borrower of, and
compliance by the Borrower with, the following:
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4.1 This Amendment, duly executed by the Borrower.
4.2 A certificate of the Secretary or Assistant Secretary of the
Borrower (a) certifying as to a copy of the resolutions of the Board of
Directors of the Borrower authorizing the execution, delivery and
performance of this Amendment, (b) certifying that there has been no
amendment to the Articles of Incorporation or Bylaws of the Borrower since
true and accurate copies of the same were delivered to the Agent with a
certificate of the Secretary of the Borrower dated September 27, 1999, and
(c) certifying as to the name, title, and specimen signature of the officer
or officers of the Borrower authorized to execute this Amendment, and any
other instrument or agreement executed by the Borrower in connection with
this Amendment.
4.3 A certificate of the Chief Financial Officer of the Borrower which
demonstrates to the Agent's satisfaction that the annualized EBITDA of the
Borrower was equal to or greater than $5,500,000 as of February 21, 2000.
4.4 A certificate of the Chief Financial Officer of the Borrower which
evidences the Borrower's Borrowing Base as of February 21, 2000.
4.5 Payment of all reasonable unpaid legal fees and other
out-of-pocket expenses incurred by the Agent through the date of this
Amendment in connection with this Amendment of which the Borrower has been
notified as of the date of this Amendment.
4.6 Payment to Agent of a $15,000 amendment fee.
Section 5. Representations, Warranties, Authority, No Adverse Claim.
5.1 Reassertion of Representations and Warranties, No Default. The
Borrower hereby represents that on and as of the date hereof and after
giving effect to this Amendment (a) all of the representations and
warranties contained in the Credit Agreement are true and correct in all
respects as of the date hereof as though made on and as of such date,
except for changes permitted by the terms of the Credit Agreement, and (b)
there will exist no Default or Event of Default under the Credit Agreement
as amended by this Amendment on such date which has not been waived by the
Agent.
5.2 Authority, No Conflict, No Consent Required. The Borrower
represents and warrants that the Borrower has the corporate power and
authority to enter into this Amendment and has duly authorized the
execution and delivery of this
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Amendment and any other agreements and documents executed and delivered by
the Borrower in connection herewith by proper corporate action, and, except
as set forth in Schedule 4.3 to the Credit Agreement, none of this
Amendment nor the agreements contained herein contravenes or constitutes a
default under any agreement, instrument or indenture to which the Borrower
is a party or a signatory or a provision of the Borrower's Articles of
Incorporation or Bylaws or any requirement of law presently in effect and
applicable to the Borrower, or results in the imposition of any Lien on any
of its property under any agreement binding on or applicable to the
Borrower or any of its property except, if any, in favor of the Agent and
except where the contravention or default or the imposition of such Lien
could not adversely affect the validity or enforceability of this Amendment
or constitute a Material Adverse Occurrence. The Borrower represents and
warrants that, except as set forth in Schedule 4.3 to the Credit Agreement,
no consent, approval or authorization of or registration or declaration
with any Person, including but not limited to any governmental authority,
is required on the part of the Borrower in connection with the execution
and delivery by the Borrower of this Amendment or any other agreements and
documents executed and delivered by the Borrower in connection herewith or
the performance of obligations of the Borrower herein described, except for
those which the Borrower has obtained or provided and as to which the
Borrower has delivered certified copies of documents evidencing each such
action to the Agent and except where the failure to obtain such consent,
approval or authorization or to make such registration or declaration could
not adversely effect the validity or enforceability of this Amendment or
constitute a Material Adverse Occurrence.
5.3 No Adverse Claim. The Borrower warrants, acknowledges and agrees
that to the Borrower's knowledge no events have been taken place and no
circumstances exist at the date hereof which would give the Borrower a
basis to assert a defense, offset or counterclaim to any claim of the Banks
with respect to the Borrower's obligations under the Credit Agreement as
amended by this Amendment.
Section 6. Affirmation of Credit Agreement, Further References, Affirmation
of Security Interest. The Banks and the Borrower each acknowledge and affirm
that the Credit Agreement, as hereby amended, is hereby ratified and confirmed
in all respects and all terms, conditions and provisions of the Credit
Agreement, except as amended by this Amendment, shall remain unmodified and in
full force and effect. All references in any document or instrument to the
Credit Agreement are hereby amended and shall refer to the Credit Agreement as
amended by this Amendment. The Borrower confirms to the Banks that the
Borrower's obligations under the Credit Agreement, as amended by this Amendment,
are and continue to be secured by the security interest
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granted by the Borrower in favor of the Agent under that certain Security
Agreement (Borrower), that certain Pledge Agreement, and that certain Collateral
Assignment of Trademarks, all dated as of September 27, 1999, and made by the
Borrower in favor of the Agent, and all of the terms, conditions, provisions,
agreements, requirements, promises, obligations, duties, covenants and
representations of the Borrower under such documents and any and all other
documents and agreements entered into with respect to the obligations under the
Credit Agreement are incorporated herein by reference and are hereby ratified
and affirmed in all respects by the Borrower.
Section 7. Successors. This Amendment shall be binding upon the Borrower
and the Banks and their respective successors and assigns, and shall inure to
the benefit of the Borrower and the Banks and the successors and assigns of the
Banks.
Section 8. Legal Expenses. As provided in Section 9.2 of the Credit
Agreement, the Borrower agrees to reimburse the Agent, upon execution of this
Amendment, for all reasonable out-of-pocket expenses (including reasonable
attorney' fees and legal expenses of Xxxxxx & Xxxxxxx LLP, counsel for the
Agent) incurred in connection with negotiation, preparation and execution of
this Amendment and all other documents negotiated, prepared and executed in
connection with this Amendment, and in enforcing the obligations of the Borrower
under this Amendment, and to pay and save the Banks harmless from all liability
for any stamp or other taxes which may be payable with respect to the execution
or delivery of this Amendment, which obligations of the Borrower shall survive
any termination of the Credit Agreement.
Section 9. Counterparts. This Amendment may be executed in several
counterparts as deemed necessary or convenient, each of which, when so executed,
shall be deemed an original, provided that all such counterparts shall be
regarded as one and the same document, and any party to this Amendment may
execute such agreement by executing a counterpart of such agreement.
Section 10. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAW
PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS, THEIR HOLDING COMPANIES AND THEIR AFFILIATES.
Section 11. Capacity. All agreements and waivers of any of the Banks
hereunder or under any previous amendments to the Credit Agreement shall be
considered to have been made or given by such Bank in both its capacity as a
Bank and its capacity as the Agent or a Co-Agent, as applicable.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date and year first above written.
BUCA, INC.
By: /s/ Xxxx Xxxxx
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Title: Chief Financial Officer
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Address:
Attention: Xxxx X. Xxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
S-1
Signature page to Third Amendment
U.S. BANK NATIONAL ASSOCIATION, as
Agent and a Bank
By: /s/ Xxxxxx Xxxxxxxxx
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Title: Commercial Banking Officer
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Address:
Attention: Xxxxxx X. Xxxxxxxxx MPFP0602
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
S-2
Signature page to Third Amendment
BANK OF AMERICA, N.A., as Co-Agent and
a Bank
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Title: Vice President
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Address:
Attention: Xxxxxxx X. Xxxxxxxx, Xx.
IL1-231-06-13
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
S-3
Signature page to Third Amendment
FLEET NATIONAL BANK, as Co-Agent and
a Bank
By: /s/ Xxxxxxxxxxx Xxxxx
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Title: Division Executive
----------------------------------
Address:
Attention: Xxxxxxxxxxx X. Xxxxx
MAD 10009 E
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
S-4
Signature page to Third Amendment
