Exhibit 10.4
FIRST AMENDMENT TO THE
REVOLVING CREDIT AGREEMENT
This FIRST AMENDMENT, dated as of June 28, 2000 (the "AMENDMENT") is by
and among AMERICAN RESTAURANT GROUP, INC. ("ARG"), the subsidiaries of ARG
listed on the signature pages hereto (such subsidiaries collectively referred to
herein as the "SUBSIDIARIES" and such Subsidiaries together with ARG
collectively referred to herein as the "BORROWERS"), the financial institutions
that are or may become party thereto (the "BANKS"), FLEET NATIONAL BANK
(formerly known as BankBoston, N.A.), as agent (the "AGENT") for itself and the
Banks.
WHEREAS, the Borrowers, the Agent and the Banks are party to that certain
Revolving Credit Agreement, dated as of February 25, 1998 (as amended, restated,
modified or supplemented and in effect from time to time, the "CREDIT
AGREEMENT"); and
WHEREAS, ARG has entered into a transaction pursuant to which ARG is
selling all non-Black Angus restaurant concepts to NBACo, Inc., including but
not limited to, ▇▇▇▇▇▇'▇, Inc., ("Grandy's"), Spectrum Foods, Inc. ("Spectrum"),
Spoons Restaurants, Inc. ("Spoons") and Local Favorite, Inc. ("Local", and
collectively with Grandy's, Spectrum and Spoons, the "NBACo Borrowers") (the
"Transaction") and in connection therewith the Borrowers have requested that the
Agent and the Banks consent to the Transaction and release the NBACo Borrowers
from their Obligations under the Credit Agreement; and
WHEREAS, the Borrowers, the Agent and the Banks, subject to the terms and
conditions hereof, have agreed to amend the Credit Agreement as set forth
herein, and the Banks have agreed to consent to the Transaction and to release
the NBACo Borrowers from their Obligations under the Credit Agreement and the
other Loan Documents;
NOW, THEREFORE, the Borrowers, the Agent, and the Banks hereby agree as
follows:
Section 1. DEFINED TERMS. Capitalized terms used herein without
definition that are defined in the Credit Agreement shall have the same meanings
herein as in the Credit Agreement.
Section 2. AMENDMENTS TO THE CREDIT AGREEMENT. The Borrowers, the Agent
and the Banks hereby agree to amend the Credit Agreement as follows:
(a) The following new definition is inserted following the definition
of "APM":
"ARG TERRA. ARG Terra, Inc., a Delaware corporation."
(b) The definition of "Borrowers" is hereby deleted in its entirety
and replaced with the following new definition:
"BORROWERS. Collectively, ARG, AEI APM, and ARG Terra."
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(c) The definition of "Revolving Credit Loan Maturity Date" is hereby
deleted in its entirety and replaced with the following new definition:
"REVOLVING CREDIT LOAN MATURITY DATE. June 30, 2002."
(d) Section 4.1.1 of the Credit Agreement is hereby amended by
deleting the words "shall not exceed $10,000,000" and replacing them with the
words "shall not exceed $7,000,000".
(e) Section 9.1 of the Credit Agreement is hereby amended by (i)
deleting the word "and" at the end of Section 9.1(e) thereof, and (ii) deleting
the period at the end of Section 9.1(f) thereof and replacing it with "; and",
and (iii) inserting the following new Section 9.1(g):
"(g) other unsecured Indebtedness in an aggregate amount
not to exceed $5,000,000 at any time."
(f) Section 10.1 of the Credit Agreement is amended by deleting the
table set forth therein and inserting in place thereof the following new table:
-------------------------------------------------
Period Ratio
-------------------------------------------------
Beginning of second fiscal 1.20:1.00
quarter, 2000 - fourth fiscal
quarter, 2000
-------------------------------------------------
Beginning of first fiscal 1.30:1.00
quarter, 2001 - fourth fiscal
quarter, 2001
-------------------------------------------------
Thereafter 1.35:1.00
-------------------------------------------------
(g) Section 10.2 of the Credit Agreement is amended by deleting the
table set forth therein and inserting in place thereof the following new table:
-------------------------------------------------
Period Ratio
-------------------------------------------------
Beginning of second fiscal 1.60:1.00
quarter, 2000 - fourth quarter,
2001
-------------------------------------------------
Thereafter 1.75:1.00
-------------------------------------------------
(h) Section 10.3 of the Credit Agreement is amended by deleting the
table set forth therein and inserting in place thereof the following new table:
-------------------------------------------------
Period Ratio
-------------------------------------------------
Beginning of second fiscal 4.50:1.00
quarter, 2000 - fourth fiscal
quarter, 2001
-------------------------------------------------
Thereafter 4.25:1.00
-------------------------------------------------
(i) The SCHEDULE 1 attached to the Credit Agreement is hereby deleted
in its entirety and replaced with the new SCHEDULE 1 attached hereto as EXHIBIT
A.
Section 3. LIMITED WAIVER. The Borrowers have advised the Agent and the
Banks that they have failed to comply with the covenants set forth in Section
10.3 of the Credit Agreement for
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the fiscal periods ending December 27, 1999 and March 27, 2000, and have
requested that the Agent and the Majority Banks waive such non-compliance. Upon
the effectiveness of this Amendment, the Agent and the Majority Banks hereby
waive compliance with the provisions of Section 10.3 of the Credit Agreement
solely for the fiscal periods ending December __, 1999 and March 27, 2000. The
waiver given herein is limited strictly to its terms and shall apply only to the
specific provisions described herein. The waiver contained herein shall not
extend to or affect any other obligations of the Borrowers and their
Subsidiaries contained in the Credit Agreement or any other Loan Documents and
shall not impair or prejudice any rights consequent thereon.
Section 4. CONSENT TO TRANSACTION. Pursuant to Section 9.5.2 of the
Credit Agreement, the Agent and the Majority Banks hereby give their consent to
the sale of assets contemplated by the Transaction.
Section 5. RELEASE OF BORROWERS. Subject to the completion of the
Transaction, the Agent and the Banks hereby agree (i) to release each NBACo
Borrower from all of its Obligations under the Credit Agreement and the other
Loan Documents, and (ii) to direct the Collateral Agent to release all
Collateral of each NBACo Borrower subject to a security interest.
Section 6. AGENCY ACCOUNT AGREEMENT. Each Remaining Borrower agrees to
enter into a new Agency Account Agreement with Union Bank of California, N.A. in
accordance with the provisions of 8.14.1 of the Credit Agreement within fifteen
(15) Business Days of the date of this Amendment.
Section 7. CONTINUED VALIDITY OF CREDIT AGREEMENT; AFFIRMATION OF THE
REMAINING BORROWERS. Except as specifically amended by this Amendment, the
Credit Agreement shall remain in full force and effect, and each of ARG, ARG
Terra, ARG Enterprises, Inc. and ARG Property Management Corporation
(collectively, the "Remaining Borrowers" and each individually a "Remaining
Borrower") reaffirms the continued validity of the Credit Agreement as amended
on the date hereof. The Credit Agreement and this Amendment shall be read and
construed as a single agreement. All references in the Indenture, the
Intercreditor Agreement, any Loan Document or any other agreement or instrument
to the Credit Agreement shall hereafter refer to the Credit Agreement as amended
hereby. Each of the Remaining Borrowers hereby affirms its joint and several,
absolute and unconditional promise to pay to each Bank and the Agent the Loans
and all other amounts due under the Notes and the Credit Agreement as amended
hereby, at the times and in the amounts provided for therein. Each of the
Remaining Borrowers confirms and agrees that the obligations of the Remaining
Borrowers to the Banks and the Agent under the Credit Agreement as amended
hereby are secured by the Security Documents.
Section 8. REPRESENTATIONS AND WARRANTIES. Each of the Borrowers
represents and warrants to the Banks and the Agent as follows:
(a) REPRESENTATIONS AND WARRANTIES IN THE CREDIT AGREEMENT.
The representations and warranties as set forth in the Credit Agreement
are true and correct in all material respects on and as of the date
hereof. All such representations and warranties are hereby ratified,
affirmed and incorporated herein by reference, with the
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same force and effect as though set forth herein in their entirety,
except for representations and warranties expressly stated to relate to a
specific date, in which case such representations and warranties were
true and correct in all material respects as of such earlier date.
(b) AUTHORITY, NO CONFLICTS, ETC. The execution, delivery and
performance of this Amendment and the consummation of the transactions
contemplated hereby (i) are within the corporate powers of the Borrowers
and have been duly authorized by all necessary corporate action on the
part of the Borrowers, (ii) do not require any approval or consent of, or
filing with, any governmental agency or authority, or any creditor of any
of the Borrowers, or any other person, association or entity, (iii) do
not violate any provisions of any law, rule or regulation or any
provision of any order, writ, judgment, injunction, decree, determination
or award presently in effect in which any of the Borrowers is named, or
any provisions of the charter documents of any of the Borrowers, (iv) do
not result in any breach of or constitute a default under any agreement
or instrument to which any of the Borrowers is a party or by which any of
the Borrowers or any of their properties is bound, including without
limitation any indenture, loan or credit agreement, lease, debt
instrument or mortgage, and (v) do not result in or require the creation
or imposition of any mortgage, deed of trust, pledge, lien, security
interest or other charge or encumbrance of any nature upon any of the
assets or properties of any of the Borrowers.
(c) ENFORCEABILITY OF OBLIGATIONS. This Amendment and the
Credit Agreement as amended hereby constitute the legal, valid and
binding obligations of the Remaining Borrowers, enforceable against the
Remaining Borrowers, in accordance with their respective terms, subject
to applicable bankruptcy, insolvency, reorganization moratorium or other
laws affecting creditor's rights generally and subject to general
principles of equity regardless of whether considered in a proceeing in
equity or at law.
Section 9. NO WAIVER. Except as set forth in Sections 3 and 4 hereto,
nothing contained herein shall constitute a waiver of, impair or otherwise
affect any Obligations, any other obligation of the Remaining Borrowers or any
right of the Agent or any Bank consequent thereon.
Section 10. NO OTHER AMENDMENTS. Except as expressly provided in this
Amendment, all of the terms, conditions and provisions of the Credit Agreement
shall remain the same.
Section 11. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
(WITHOUT REFERENCE TO CONFLICT OF LAWS).
Section 12. EXECUTION IN COUNTERPARTS. This Amendment may be executed
in any number of counterparts and by each party on a separate counterpart, each
of which when so executed and delivered shall be an original, but all of which
together shall constitute one instrument. In proving this Amendment, it shall
not be necessary to produce or account for more than one such counterpart signed
by the party against whom enforcement is sought.
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Section 13. EFFECTIVENESS OF AMENDMENT. This Amendment shall become
effective as of the date hereof upon receipt by the Agent of (a) counterparts
of this Amendment duly executed by each of the Borrowers, the Agent and the
Banks, and (b) an amendment fee in the amount of $30,000.
Section 14. EXPENSES. The Remaining Borrowers hereby jointly and
severally agree to pay to the Agent, on demand by the Agent all reasonable
out-of-pocket costs and expenses incurred or sustained by the Agent in
connection with the preparation of this Amendment (including reasonable legal
fees).
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
and Release to be executed by their duly authorized officers as of the date
first set forth above.
AMERICAN RESTAURANT GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ARG ENTERPRISES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Title: Vice President
ARG PROPERTY MANAGEMENT CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Title: Vice President
ARG TERRA, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Title: Secretary
▇▇▇▇▇▇'▇, INC.
By: /s/ ▇▇▇ ▇. ▇▇ ▇▇▇▇▇
--------------------------------
Title: Treasurer
SPECTRUM FOODS, INC.
By:/s/ ▇▇▇ ▇. ▇▇ ▇▇▇▇▇
--------------------------------
Title: Treasurer
SPOONS RESTAURANTS, INC.
By: /s/ ▇▇▇ ▇. ▇▇ ▇▇▇▇▇
--------------------------------
Title: Treasurer
LOCAL FAVORITE, INC.
By: /s/ ▇▇▇ ▇. ▇▇ ▇▇▇▇▇
--------------------------------
Title: Treasurer
FLEET NATIONAL BANK
(f/k/a BankBoston, N.A.),
individually and as Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Director
SCHEDULE 1
BANKS AND COMMITMENTS
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COMMITMENT REVOLVING CREDIT
BANK PERCENTAGE COMMITMENT
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FLEET NATIONAL BANK 100% $12,000,000
Domestic and Eurodollar Lending Office:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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TOTAL: 100% $12,000,000
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