EXHIBIT 10.3
SECOND AMENDMENT TO SECOND
AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(the "Second Amendment") is made and dated as of the 28th day of December, 1998
by and among CHART HOUSE, INC. (the "Company"), CHART HOUSE ENTERPRISES, INC.
(the "Parent"), BIG WAVE, INC., formerly known as Islands Restaurants, Inc.
("Big Wave") (the Parent and Big Wave being sometimes referred to, collectively
and severally, as the "Guarantors"), BANKBOSTON, N.A., formerly known as The
First National Bank of Boston ("BankBoston") (BankBoston acting in its capacity
as a "Bank" under the Credit Agreement described more particularly below being
referred to herein, as the "Bank") and BANKBOSTON, acting in its capacity as
Agent and CALIFORNIA BANK & TRUST, formerly known as the Sumitomo Bank of
California ("CB&T) (CB&T acting in its capacity as Security Agent with respect
to the credit facility evidenced by the Credit Agreement described more
particularly below) (in each case, the "Agent" and the "Security Agent,"
respectively).
RECITALS
A. Pursuant to that certain Second Amended and Restated Revolving
Credit Agreement dated as of June 27, 1997 by and among the Company, the
Guarantors, the Banks party thereto, BankBoston as the "Agent" thereunder and
CB&T as the Security Agent thereunder (as amended to date, the "Credit
Agreement," and with capitalized terms not otherwise defined herein used with
the meanings given such terms in the Credit Agreement) the Banks agreed to
extend credit to the Company on the terms and subject to the conditions set
forth therein.
B. The parties have agreed to amend the Credit Agreement in certain
respects as set forth more particularly below.
NOW, THEREFORE, in consideration of the above Recitals and for other
good and valuable consideration the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
1. Increase in Commitment. To reflect the agreement of the parties to
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increase the Revolving Loan Credit Limit under the Credit Agreement, the parties
HERETO hereby agree that, effective as of the Second Amendment Effective Date,
the definition of the term "Revolving Loan Credit Limit" set forth in Paragraph
14 of the Credit Agreement is hereby amended to read in its entirety as follows:
"Revolving Loan Credit Limit" shall mean $20,000,000.00, as
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such amount may be increased or decreased by written agreement of the
Agent, the
Company and one hundred percent (100%) of the Banks."
2. Modification of Pricing. To reflect the agreement of the parties to
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modify the pricing provisions applicable to Revolving Loans made pursuant to the
Credit Agreement, effective as of the Second Amendment Effective Date, the
parties hereto hereby agree as follows:
(a) The defintion of the "Applicable Eurodollar Spread" set
forth in Paragraph 14 of the Credit Agreement is hereby amended in its entirety
to read as follows:
"'Applicable Eurodollar Spread" shall mean with respect to any
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Eurodollar Loan for the Interest Paid applicable to such Eurodollar
Loan: (a) from the Effective Date to but not including the date upon
which the Compliance Certificate showing the calculation of the
Leverage Ratio for the fiscal quarter ending June 30, 1999 has been
provided to the Agent and the Banks as required pursuant to Paragraph
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9(a)(3) above, 1.75%, and (b) thereafter, that percentage determined in
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accordance with the following table:
Leverage Ratio Applicable Eurodollar Spread
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Less than 1.00:1.00 1.25%
Greater than or Equal to 1.50%
1.00:1.00 but Less
than 1.50:1.00
Greater than or Equal to 1.75%
1.50:1.00 but Less than
or Equal to 1.75:1.00
Greater than or Equal to 2.00%
1.75:1.00 but less than
or Equal to 2.00:1.00"
(b) The definition of the term "Applicable Margin" as set
forth in Paragraph 14 of the Credit Agreement is hereby amended to read in its
entirety as follows:
"'Applicable Margin' shall mean with respect to any
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Alternate Base Rate Loan, that percentage determined in accordance
with the following table:
Leverage Ratio Applicable Margin
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Less than 1.00:1.00 0.00%
2
Greater than or Equal to 0.25%
1.00:1.00 but Less than
1.50:1.00
Greater than or Equal to 0.50%
1.50:1.00 but Less than
1.75:1.00
Greater than or Equal to 0.75%
1.75:1.00 but Less than
or Equal to 2.00:1.00"
3. Limitation of Use of Proceeds. To reflect the agreement of the
parties to limit the aggregate amount of stock that the Company may repurchase
with the proceeds of Loans made pursuant to the Credit Agreement, effective as
of the Second Amendment Effective Date, the parties hereto hereby agree that
Paragraph 1 (d) of the Credit Agreement is hereby amended to read in its
entirety as follows:
"1(d) Use of Proceeds. The proceeds of each Revolving Loan
shall be used for working capital and general corporate purposes,
including stock repurchases of up to $1,000,000.00 in the aggregate
during the period from December 28, 1998 to the Revolving Loan Maturity
Date (as the same may be extended from time to time)."
4. Amendment of Financial Covenant. To reflect the agreement of the
parties to reduce the maximum Leverage Ratio that the Company is permitted to
maintain, effective as of the Second Amendment Effective Date, the parties
hereto hereby agree as follows:
(a) The Leverage Ratio test set forth in Paragraph 10(k) of
the Credit Agreement is hereby amended to read in its entirety as follows:
"10(k) Leverage Ratio Test. Permit as of the last day of any
fiscal quarter the Parent's consolidated ratio of (1) Total Funded Debt
to (2) EBITDA of the Parent and its consolidated Subsidiaries during
such fiscal quarter and the immediately preceding three fiscal quarters
to be greater than 2.00:1.00; provided, however, that for the purpose
of calculating the Company's compliance herewith on the last day of the
calendar quarters ending March 31, 1999 and June 30, 1999, Total Funded
Indebtedness shall not include the maximum aggregate contingent
obligation under the Note Guaranties."
(b) Paragraph 14 of the Credit Agreement is hereby amended to
add, in correct alphabetical order, the following new definition:
"'Note Guaranties' shall mean those certain guaranties
described on Schedule 3 attached hereto."
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(c) The schedule attached hereto as Amendment Schedule 3 is
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hereby incorporated by this reference into the Credit Agreement as Schedule 3
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thereto.
5. Reaffirmation of Loan Documents. Each of the Company and each of the
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Guarantors hereby affirms and agrees that (a) the execution and delivery by such
Persons of, and the performance of their respective obligations under, this
Second Amendment shall not in any way amend, impair, invalidate or otherwise
affect any of such Person's obligations or the rights, remedies and powers of
the Agent and the Bank under the Loan Documents, including, without limitation,
the Security Documents, as the same are amended hereby, and (b) all Loan
Documents remain in full force and effect.
6. Representations and Warranties. Each of the Company, the Parent and
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Big Wave hereby, severally and independently as to itself only, represents and
warrants that at the date hereof and at and as of the Second Amendment Effective
Date:
(a) Except to the extent such were by their terms made solely
as of a prior date, the representations and warranties of such Person contained
in the Loan Documents are accurate and complete in all material respects.
(b) The execution and delivery by such Person of this Second
Amendment and the performance by such Person of its obligations hereunder are
within the corporate power of such Person, have been (or as of the Second
Amendment Effective Date will be) duly authorized by all necessary corporate
action and do not and will not (1) contravene any provision of such Person's
charter, other incorporation papers, by-laws or any stock provisions, or any
amendment thereof, (2) conflict with, or result in a breach of any material
term, condition or provision of, or constitute a default under or result in the
creation of any mortgage, lien, pledge, charge, security interest or other
encumbrance upon any of the property of any of such parties under any agreement,
deed of trust, indenture, mortgage or other instrument to such Person is a party
or by which any of its properties are bound, (3) violate or contravene any
provision of any law, regulation, order, ruling or interpretation thereunder or
any decree, order or judgment of any court or governmental or regulatory
authority, bureau, agency or official, (4) require any waiver, consent or
approval of any Person other than such as have been obtained and copies of which
have been provided to the Agent and the Security Agent, or (5) require any
approval, consent, order, authorization or license by, or giving notice to, or
taking any other action with respect to, any governmental or regulatory
authority or agency under any provision of law, except those actions which have
been taken or will be taken prior to the Second Amendment Effective Date.
(c) This Second Amendment constitutes the legal, valid and
binding obligations of such Person enforceable against such Person in accordance
with its terms.
(d) No Default or Event of Default has occurred and is
continuing or will occur as a result of (1) the execution and delivery of this
Second Amendment, or (2) the consummation of the transactions contemplated
hereby.
7. Effective Date. This Second Amendment shall be effective,
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retroactive to
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the date first above written, on the earliest date (the "Second Amendment
Effective Date") upon which there shall have been delivered to the Agent, in
form and substance satisfactory to the Agent, each of the following:
(a) A copy or counterpart copies of this Second
Amendment, duly executed by each of the parties hereto;
(b) Those fees required to be paid to the Agent pursuant to
that certain Agent's Fee Letter dated of even date herewith from the
Company to the Agent; and
(c) From the company and each of the Guarantors, certified
copies of such corporate resolutions, authorizations and incumbency
certificates as the Agent may reasonably request.
8. Survival. The representations and warranties, covenants and
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agreements of the Company, the Parent and Big Wave set forth herein shall
survive the Second Amendment Effective Date.
9. Captions. Paragraph or other headings contained in this Second
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Amendment are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Second Amendment.
10. Governing Law. This Second Amendment shall be governed by and
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construed in accordance with the laws of the State of California without giving
effect to its choice of law rules.
11. Expenses. The Company shall pay upon demand all costs and expenses,
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including, without limitation, legal fees of Xxxxxxxx & Xxxxxxxx, LLP, special
counsel to the Agent, in connection with the transactions contemplated hereby as
are required to be paid by the Company pursuant to Section 9(g) of the Credit
Agreement.
12. Counterparts. This Second Amendment may be executed in counterparts
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and such counterparts shall, when taken together, constitute one and the same
agreement.
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EXECUTED as of the day and year first above written.
The Company:
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CHART HOUSE, INC.
By: ______________________________
Name: ____________________________
Title: _____________________________
The Guarantors:
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CHART HOUSE ENTERPRISES, INC.
By: ______________________________
Name: ____________________________
Title: _____________________________
BIG WAVE, INC.
By: ______________________________
Name: ____________________________
Title: _____________________________
The Agent, and as a Bank:
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BANKBOSTON, N.A.
By: ______________________________
Name: ____________________________
Title: _____________________________
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The Security Agent:
CALIFORNIA BANK & TRUST
By: ______________________________
Name: __David W. Shaw____________
Title: ___ Vice President_____________
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AMENDMENT SCHEDULE 3
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SCHEDULE 3
NOTE GUARANTIES
Guarantor Maximum Favored Party Date of Guaranty
--------- Contingent Liability ------------- ----------------
as of 12/28/98
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