EXHIBIT 10.2
FIRST AMENDMENT TO SECOND
AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(the "First 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"), CALIFORNIA BANK & TRUST, formerly
known as the Sumitomo Bank of California ("CB&T") (BankBoston and CB&T acting in
their capacities as "Banks" under the Credit Agreement described more
particularly below being referred to herein, collectively and severally, as the
"Banks"), BANKBOSTON, acting in its capacity as Agent and 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 such capacities, 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 from time to time, 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. CB&T has indicated that it desires to withdraw as a Bank under the
Credit Agreement. The parties have agreed, among other things, to permit CB&T to
withdraw as a Bank from the Credit Agreement and to amend the Credit Agreement
in certain respects, all 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. Withdrawal of CB&T as a Bank. The parties hereto agree that,
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effective as of the First Amendment Effective Date (as such term is defined in
Paragraph 11 below), CB&T shall be permitted to, and shall, withdraw as a Bank
under the Credit Agreement and BankBoston, as the sole Bank under the Credit
Agreement upon the occurrence of the First Amendment Effective Date, shall on
the First Amendment Effective Date purchase and take from CB&T all outstanding
Obligations held by CB&T
on such date such that CB&T shall have been paid in full. The Credit Agreement
and each of the other Loan Documents are hereby amended, effective as of the
First Amendment Effective Date, mutatis mutandis as appropriate to reflect the
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fact that CB&T is no longer a Bank thereunder and that BankBoston's Percentage
Share thereunder is one hundred percent (100%).
2. Return of Promissory Note. CB&T hereby agrees that on the First
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Amendment Effective Date, it shall return that certain Replacement Note dated as
of June 27, 1997 and executed by the Company in favor of CB&T in connection with
the Credit Agreement (the "CB&T Replacement Note") to the Agent marked "Paid in
Full" on its face.
3. Continuance of CB&T as Security Agent. Notwithstanding the fact
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that, effective as of the First Amendment Effective Date CB&T will no longer be
a Bank under the Credit Agreement, CB&T hereby agrees that it shall continue to
act as Security Agent under the Credit Agreement until notified in writing by
the Agent that it has been replaced by a successor Security Agent. CB&T further
agrees that, following the First Amendment Effective Date, it will take no
action in its capacity as Security Agent except at the written direction of the
Agent.
4. Continuing Protection of CB&T. Notwithstanding the occurrence of the
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First Amendment Effective Date, CB&T shall, following the First Amendment
Effective Date, continue to be entitled to all protections which the Credit
Agreement would accord a withdrawing Bank thereunder to the same extent as it
would have been entitled thereto if it had not withdrawn as a Bank thereunder.
5. Reduction of Commitment. To reflect the agreement of the parties to
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reduce the Revolving Loan Credit Limit under the Credit Agreement, the parties
hereto hereby agree that, effective as of the First 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 $15,000,000.00, as
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such amount may be increased or decreased by written agreement of the
Agent, the Company and one hunder percent (100%) of the Banks."
6. Amendment of Interest Rates. To reflect the agreement of the parties
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to amend the interest rates applicable to Revolving Loans made pursuant to the
Credit Agreement, effective as of the First Amendment Effective Date, the
parties hereto hereby agree as follows:
(a) Paragraph 1(c) of the Credit Agreement is hereby
amended to read in its entirety as follows:
"1(c) Calculation of Interest. The
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Company shall pay interest on Revolving Loans outstanding hereunder
from the date disbursed to but not
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including the date of payment, at a rate per annum equal to, at the
option of and as selected by the Company from time to time (subject to
the provisions of Paragraphs 3(b), 3(c) and 3(d) below): (1) the daily
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average Alternate Base Rate in effect during the applicable computation
period plus the Applicable Margin, and (2) the Applicable Eurodollar
Rate for the applicable Interest Period, said interest to be payable as
provided in Paragraph 3(a) below."
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(b) The definition of the term "Applicable Eurodollar Spread"
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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
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respect to any Eurodollar Loan for the Interest Period 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 December 31, 1998
has been provided to the Agent and the Banks as required pursuant to
Paragraph 9(a)(3) above, 1.50% and (b) thereafter, that percentage
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determined in accordance with the following table:
Leverage Ratio Applicable Eurodollar Spread
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Less than 1.50:1.00 1.25%
Greater than or Equal to 1.50%
1.50:1.00 but Less
than 2.00:1.00
Greater than or Equal to 1.75%
2.00:1.00"
(c) Paragraph 14 of the Credit Agreement is hereby amended to
add, in correct alphabetical order, a new definition of the term "Applicable
Margin" 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 1.50:1.00 0.00%
Greater than or Equal to 0.25%
1.50:1.00 but Less than
2.00:1.00
Greater than or Equal to 0.50%
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2.00:1.00"
7. Expansion of Use of Proceeds. To reflect the agreement of the
parties to permit the Company to use the proceeds of Loans made under the Credit
Agreement for an additional purpose, effective as of the First Amendment
Effective Date, the parties hereto hereby agree that Paragraph 1(d) of the
Credit Agreement is hereby amended to insert the phrase ", including stock
repurchases" immediately prior to the period appearing at the end of that
Paragraph.
8. Amendment of Financial Covenants. To reflect the agreement of the
parties to amend certain of the financial covenants set forth in Paragraph 10 of
the Credit Agreement and to add certain new financial covenants thereto,
effective as of the First Amendment Effective Date, the parties hereto hereby
agree as follows:
(a) The Coverage Ration test set forth in Paragraph 10(l) of
the Credit Agreement is hereby amended to read in its entirety as follows:
"10(l) Coverage Ratio Test. Permit as of the last day
of any fiscal quarter the ration of (l) EBITDA of the Parent and its
consolidated Subsidiaries during such fiscal quarter and the
immediately preceding three fiscal quarters, less cash taxes paid (net
of refunds) and Maintenance Capital Expenditures, to (2) Interest
Expense and Required Principal Payments of Debt during such fiscal
quarter and the immediately preceding three fiscal quarters to be less
than 1.25:1:00."
(b) Paragraph 14 of the Credit Agreement is hereby amended to
add, in correct alphabetical order, a new definition of the term "Maintenance
Capital Expenditures" as follows:
"'Maintenance Capital Expenditures' shall mean
Capital Expenditures made in the ordinary course of the Company's
business with respect to existing Properties but excluding, in any
event, Capital Expenditures made in connection with restaurant
conversions and upgrades."
(c) Paragraph 10(m) of the Credit Agreement is hereby deleted
in its entirety and replaced with the following new financial covenant:
"10(m) Interest Coverage Ration Test. Permit as of
the last day of any fiscal quarter the ration of: (1) EBITDA of the
Parent and its consolidated Subsidiaries during such fiscal quarter and
the immediately preceding three fiscal quarters to (2) Interest Expense
to be less than 6.00:1.00."
(d) A new Paragraph 10(o) is hereby added to the Credit
Agreement as follows:
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"10(o) Capital Expenditures. Permit as of
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the last day of any fiscal year Capital Expenditures for such fiscal
year to exceed $16,000,000.00."
9. 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
First 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 Banks 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.
10. 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 First 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 First
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 First
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 First Amendment Effective Date.
(c) This First Amendment constitutes the legal, valid and
binding obligations of such Person enforceable against such Person in accordance
with their respective 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
First Amendment, or (2) the consummation of the transactions contemplated
hereby.
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11. Effective Date. This First Amendment shall be effective upon the
date (the "First 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) The CB&T Replacement Note;
(b) A copy or counterpart copies of this First Amendment, duly
executed by each of the parties hereto; and
(c) An amendment fee in the amount of $43,750.00, to be paid
by the Company to the Agent upon execution of this First Amendment.
Following the Effective Date, but in no event later than January 20,
1999, the Company and each of the Guarantors will provide to the Agent certified
copies of such corporate resolutions and authorizations confirming the
representations and warranties set forth in Paragraph 10(b) herein as the Agent
may reasonably request.
12. Survival. The representations and warranties, covenants and
agreements of the Company, the Parent and Big Wave set forth herein shall
survive the First Amendment Effective Date.
13. Captions. Paragraph or other headings contained in this First
Amendment are for reference purposes only and shall not affect in any way the
meaning or interpretation of this First Amendment.
14. Governing Law. This First Amendment shall be governed by and
construed in accordance with the laws of the State of California.
15. Expenses. The Company shall pay upon demand all costs and expenses,
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.
16. Counterparts. This First Amendment may be executed in counterparts
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:
CHART HOUSE, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President & Treasurer
The Guarantors:
CHART HOUSE ENTERPRISES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer
BIG WAVE, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President & Treasurer
The Agent:
BANKBOSTON, N.A.
By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Director
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The Security Agent
CALIFORNIA BANK & TRUST
By:
Name:
Title:
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