EXHIBIT 10 (v)
AMENDMENT NO. 3 TO
FIFTH AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
DATED AS OF SEPTEMBER 22, 2003
THIS AMENDMENT XX. 0 ("Xxxxxxxxx Xx. 0") dated as of December 17, 2004
between MAX & ERMA'S RESTAURANTS, INC., a Delaware corporation (the "Company"),
and THE PROVIDENT BANK, an Ohio banking corporation (the "Bank").
WITNESSETH:
WHEREAS, the Company and the Bank, parties to the Fifth Amended and
Restated Revolving Credit Agreement, dated as of September 22, 2003, as amended
by Amendment No.1 dated as of December 31, 2003, and as amended by Amendment No.
2 dated as of May 17, 2004 (the "Agreement"), have agreed to amend the Agreement
by this Amendment No. 3 on the terms and conditions hereinafter set forth. Terms
not otherwise defined herein are used as defined in the Agreement as amended
hereby.
NOW, THEREFORE, the Company and the Bank hereby agree as follows:
Section 1. Amendment of the Agreement. The Agreement is, effective the
date hereof, hereby amended as follows:
1.1. Section 1.4 (b) is amended and restated in its entirety as follows:
(b) Interest. From the date of Amendment No. 3 to the
Agreement until October 30, 2005, each Loan shall bear interest on
the unpaid principal balance of all Loans made by the Bank for each
day from the day such Loan is made until it becomes due, at a
fluctuating rate per annum equal to (at the option of the Company)
either (i) the Prime Rate plus 75 basis points or (ii) the LIBOR
Rate plus 350 basis points. Thereafter such rate will be adjusted
based upon the Company's submission of financial information
pursuant to Section 5.2 herein beginning with the quarter ending
October 31, 2005. The interest rate adjustment will be effective the
first Monday following receipt by the Bank of the Quarterly
Compliance Certificate pursuant to Section 5.4(c) herein. The
interest rate will be established according to the following
schedule based upon the Financial Ratio (as defined in Section
6.2(h) hereof) of the Company during the immediately preceding
twelve month period as of the date of each fiscal quarter end:
Ratio at
quarter end
Less than Rate for following quarter
--------- --------------------------
4.25:1.0 Either the Prime Rate minus 25 basis points or the LIBOR Rate plus
250 basis points
4.25 through Either the Prime Rate plus 25 basis
5.0:1.0 points or the LIBOR Rate plus 300 basis
points
Greater than Either the Prime Rate plus 75 basis
5.0:1.0 points or the LIBOR Rate plus 350 basis
points
Interest on all Loans shall be calculated on the basis of the actual
number of days elapsed over a year of 360 days. As used in this
Agreement, the term "Prime Rate" on any day shall mean the rate
published or announced by the Bank as its prime rate which rate may
not be the Bank's lowest rate. Any change in the interest rate on a
Loan due to a change in the Prime Rate shall take effect on the date
of such change in the Prime Rate. "LIBOR Rate" shall mean the
offered rate for U.S. Dollar deposits of not less than $1,000,000.00
for a period of time equal to each Interest Period as of 11:00 A.M.
City of London, England time two London Business Days prior to the
first date of each Interest Period of the Notes as shown on the
display designated as "British Bankers Assoc. Interest Settlement
Rates" on the Telerate System ("Telerate"), Page 3750 or Page 3740,
or such other page or pages as may replace such pages on Telerate
for the purpose of displaying such rate; provided, however, that if
such rate is not available on Telerate then such offered rate shall
be otherwise independently determined by the Bank from an alternate,
substantially similar independent source available to the Bank or
shall be calculated by the Bank by a substantially similar
methodology as that theretofore used to determine such offered rate
in Telerate. "London Business Day" means any day other than a
Saturday, Sunday or a day on which banking institutions are
generally authorized or obligated by law or executive order to close
in the City of London, England. Each change in the rate to be
charged hereunder will become effective without notice on the
commencement of each Interest Period based upon the LIBOR Rate then
in effect. "Interest Period" means each consecutive one, two, three
or six month period (the first of which shall commence on the date
of this Agreement) effective as of the first day of each Interest
Period and ending on the last day of each Interest Period, provided
that if any Interest Period is scheduled to end on a date for which
there is no numerical equivalent to the date on which the Interest
Period commenced, then it shall end instead on the last day of such
calendar month. Under no circumstances will the interest rate on the
Notes be more than the maximum rate allowed by applicable law.
1.2. Section 5.1 is amended and restated in its entirety as follows:
5.1 Use of Proceeds. The Company shall use the Loan proceeds
disbursed pursuant to this Agreement for (a) repayment of term
indebtedness owing to the Bank, (b) store expansion, (c) common
stock repurchases and (d) general working capital purposes;
provided, however, that the maximum amount of Loan proceeds that may
be used to repurchase common stock is $20,000,000; provided further,
however, that the maximum amount of Loan proceeds that may be used
to repurchase common stock is $1,000,000 from the effective date of
Amendment No. 3 through October 31, 2005.
1.3. Section 6.2(c) is amended and restated in its entirety as follows:
(c) Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio
shall not be less than (1) 1.00 to 1.00 from November 1, 2004 to
April 30, 2005, (2) 1.05 to 1.00 from May 1, 2005 to July 31, 2005,
(3) 1.10 to 1.00 from August 1, 2005 to October 31, 2005, (4) 1.15
to 1.00 from November 1, 2005 to February 28, 2006, and (5) 1.20 to
1.00 thereafter. "Fixed Charge Coverage Ratio" means, for the
Company during the Fiscal Period being measured, the quotient of (a)
the sum of (i) net income (adjusted upward to the extent
non-recurring, non-cash charges are reflected therein and adjusted
downward to the extent non-recurring, non-cash gains are reflected
therein), plus (ii) amortization and depreciation plus (iii) accrued
interest expense plus (iv) income taxes payable during such period
minus (v) one time non-cash charges reflected within net income,
divided by (b) the sum of (v) current maturities of other long term
indebtedness plus (w) current maturities of capitalized lease
obligations plus (x) accrued interest expense plus (y) during the
Fiscal Period this ratio is being measured, 20% of the Revolving
Credit Usage (as defined below), and (z) Store Capital Expenditures
in the prior 12 months. "Store Capital Expenditures" means the
greater of (A) the product of (i) the number of Company restaurants
that have been open more than one year during the Fiscal Period this
ratio is
being measured multiplied by (ii) $47,000 or (B) the actual Capital
Expenditures on such restaurants during the Fiscal Period.
"Revolving Credit Usage" means the amount of Revolving Loans
outstanding under the Revolving Note on the last day of the Fiscal
Period that is being measured.
1.4. Section 6.2(d), entitled "Earnings Before Taxes," is hereby
eliminated.
1.5. Section 6.2(f), entitled "Interest Coverage Ratio," is hereby
eliminated.
1.6. Section 6.2(g) is amended and restated in its entirety as follows:
(g) Senior Debt to EBITDA. At the end of any Fiscal Period
commencing (1) on the date hereof and ending on October 30, 2005,
permit the ratio of (i) the Company's Indebtedness during the Fiscal
Period being measured to (ii) the Company's EBITDA during the Fiscal
Period being measured to be greater than 2.50 to 1.00 and (2) on
October 31, 2005 and thereafter, permit the ratio of (i) the
Company's Indebtedness during the Fiscal Period being measured to
(ii) the Company's EBITDA during the Fiscal Period being measured to
be greater than 2.25 to 1.0.
1.7. A new Section 6.2(h) has been added as follows:
(h) Financial Ratio Test. Permit the Financial Ratio (1) to be
more than 5.75 to 1.00 from November 1, 2004 through October
30, 2005, then (2) to be more
(i) than 5.50 to 1.00 from October 31, 2005 through October 29,
2006, and (3) to be more than 5.25 to 1.00 thereafter.
"Financial Ratio" shall mean the sum of the Senior
Indebtedness of the Company plus the product of the Company's
Current Year Future Minimum Rental Commitments multiplied by
eight (8), as such sum is divided by EBITDAR. "Company's
Current Year Future Minimum Rental Commitments" means the sum
of the payments owing by the Company for the current fiscal
year under the non-cancelable term of the operating leases
including any residual payments guaranteed by the Company.
"EBITDAR" means EBITDA plus Rental Expense of the Company.
1.8. Exhibit C-6 attached hereto amends and restates in its entirety
Exhibit C-5.
Section 2. Governing Law. This Amendment No. 3 shall be governed by and
construed in accordance with the laws of the State of Ohio.
Section 3. Costs and Expenses. The Company hereby agree to pay on demand
all reasonable costs and expenses of the Bank in connection with the
preparation, execution and delivery of this Amendment No. 3 and the other
documents to be delivered in connection herewith, including, without limitation,
the reasonable fees and out-of-pocket expenses of counsel to the Bank with
respect thereto.
Section 4. Counterparts. This Amendment No. 3 may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which when taken together shall constitute one and the same agreement.
Section 5. Warrant of Attorney. The undersigned and all indorsers
authorize any attorney at law, including an attorney engaged by the holder, to
appear in any court of record in Columbus, Ohio, after the indebtedness
evidenced hereby, or any part thereof, becomes due and waive the issuance and
service of process and confess judgment against any one or more than one of the
undersigned and all indorsers in favor of the holder, for the amount then
appearing due, together with costs of suit and, thereupon, to release all errors
and waive all rights of appeal and stay of execution, but no such judgment or
judgments
against any one of the undersigned shall be a bar to a subsequent judgment or
judgments against any one or more than one of such persons against whom judgment
has not been obtained hereon. The foregoing warrant of attorney shall survive
any judgment; and if any judgment be vacated for any reason, the holder hereof
nevertheless may thereafter use the foregoing warrant of attorney to obtain an
additional judgment or judgments against the undersigned and all indorsers or
any one or more of them. The undersigned and all indorsers hereby expressly
waive any conflict of interest that the holder's attorney may have in confessing
such judgment against such parties and expressly consent to the confessing
attorney receiving a legal fee from the holder for confessing such judgment
against such parties.
Section 6. Conditions Precedent. Simultaneously with the execution hereof,
the Bank shall receive all of the following, each dated the date hereof, in form
and substance satisfactory to the Bank:
6.1. The certificate of an officer of the Company certifying the
resolutions of the board of directors of the Company evidencing authorization of
the execution, delivery, and performance of this Amendment No. 3 and all
documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to the Loan Documents, or the transactions
contemplated.
6.2. Executed versions of Amendment No. 3.
6.3. Payment of a waiver and restructuring fee of $36,000.
6.4. Such other documents as the Bank may, in its reasonable
discretion, so require.
Section 7. Reaffirmation of Representations and Warranties; No Defaults.
The Company hereby expressly acknowledges and confirms that the representations
and warranties of the Company set forth in Section 4 of the Agreement, as
amended, are true and accurate on this date with the same effect as if made on
and as of this date; that no financial condition or circumstance exists which
would inevitably result in the occurrence of an Event of Default under Section 7
of the Agreement; and that no event has occurred or no condition exists which
constitutes, or with the running of time or the giving of notice would
constitute an Event of Default under Section 7 of the Agreement.
Section 8. Reaffirmation of Documents. Except as herein expressly
modified, the parties hereto ratify and confirm all of the terms, conditions,
warranties and covenants of the Agreement, and all security agreements, pledge
agreements, mortgage deeds, assignments, subordination agreements, or other
instruments or documents executed in connection with the Agreement, including
provisions for the payment of the Notes pursuant to the terms of the Agreement.
The parties hereto agree that this Amendment No. 3 does not constitute the
extinguishment of any obligation or indebtedness previously incurred nor does it
in any manner affect or impair any security interest granted to the Bank, all of
such security interests to be continued in full force and effect until the
indebtedness described herein is fully satisfied.
The parties have executed this Amendment No. 3 as of the date first above
written.
WARNING - BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT,
OR ANY OTHER CAUSE.
MAX & ERMA'S RESTAURANTS, INC. THE PROVIDENT BANK
By: /s/ Xxxxxxx X. Xxxxxxx, Xx. By: /s/ Xxxxxxx X. Xxxxxx
_________________________________ _________________________________
Name: Xxxxxxx X. Xxxxxxx, Xx. Name: Xxxxxxx X. Xxxxxx
Its: Chief Financial Officer Its: Senior Vice President
Address for Notices: Address for Notices:
0000 Xxxxxxxxx Xxxxx 000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx, Xx. Attention: Xxxxxxx X. Xxxxxx
Telephone No.: 000-000-0000 Telephone No.: 000-000-0000
Telecopy No.: 000-000-0000
EXHIBIT C-5
[BORROWER TO EDIT TO ADD NEW LOCATIONS AND DELETE ANY CLOSED LOCATIONS]
MAX & ERMA'S RESTAURANTS, INC.
AT THE FOLLOWING LOCATIONS:
ADDRESS COUNTY
------- ------
000 X. Xxxxx Xx., Xxxxxxxx, Xxxx 00000 Franklin
0000 Xxxx Xxxx Xxxxx, Xxxxxxxx, Xxxx 00000 Franklin
0000 Xxxxxxxxxx Xxxxx, Xxxxxx, Xxxx 00000 Xxxxxxxxxx
0000 Xxxxxxxx Xxxx, Xxxxxxxxxxxx, XX 00000 Xxxxxx
0000 Xxxxx Xxxx, Xxxxxxxx, Xxxx 00000 Franklin
00000 Xxxxxxx Xxxx Xxxx, Xxxxxxxxxx Xxxxx, XX 00000 Oakland
0000 X. Xxxxxx-Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000 Franklin
0000 XX 00 Xxxxx, Xxxxxxxxxxxx, XX 00000 Xxxxxx
000 Xxxxxxx Xx., Xxxxxxxxxx, XX 00000 Allegheny
00000 Xxx Xxxx Xxxx, Xxxxxxx, XX 00000 Xxxxx
000 Xxxxx Xxxxx Xxxxx, Xxxxxx, Xxxx 00000 Franklin
0000 Xxxxxx Xxxxxx, Xxxxxxxxx, XX 00000 Allegheny
0000 Xxxxxxx Xxxx, Xxxxxxxxxx, XX 00000 Allegheny
000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000 Oakland
0000 Xxxx 00xx Xxxxxx, Xxxxxxxxxxxx, XX 00000 Xxxxxx
000 Xxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxxx 00000 Franklin
000 X. Xxxxxxxxxx Xxxx., Xxxxx 0, Xxx Xxxxx, XX 00000 Washtenaw
000 Xxxx Xxxx, Xxxxxxxxx Xxxxxxx, XX 00000 Xxxx
0000 X. Xxxxxx Xx., Xxxxxxxx, Xxxx 00000 Summit
00000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000 Cuyahoga
0000 Xxxxxxxxx Xxxxxxx, Xxxxxxxxxxx, XX 00000 Xxxxxx
000 X. Xxxxxxxxx Xxx., Xxxxxx Xxxxx, XX 00000 Lake
0000 Xxxxxxxxxx Xxxx, Xxxxxxx, Xxxx 00000 Xxxxxxxx
00000 Xxxx Xxxx, #X000, Xxxx, XX 00000 Oakland
0000 00xx Xx., XX, Xxxxx Xxxxxx, XX 00000 Kent
0000 X. 00xx Xxxxxx, Xxxxxxxxx, Xxx 00000 DuPage
0000 Xxxxxxx Xxxx, Xxxxxxx Xxxxxxx, XX 00000 Xxxx
0000 Xxxxxxxx Xxxx, Xxxxxxx, XX 00000 Franklin
0000 X.X. Xxxx Xxxx., Xxxxxxxxx, XX 00000 Mecklenburg
0000 Xxxxxx Xxxx, Xxxxxx, Xxxx 00000 Xxxxxxxxxx
000 Xxxxxxxx Xxxxx, Xxxx, XX 00000 Allegheny
ADDRESS COUNTY
------- ------
000 X. Xxxxxxxxx Xxxxx, Xxxx Xxxxx, XX 00000 DuPage
00000 Xxxxx Xxxx, Xxxxx, XX 00000 Cuyahoga
0000 Xxxxx Xxxxxx, Xxxxxx, XX 00000 Lake
0000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000 Fayette
000 Xxxxxx Xxxxx, Xxxxxxxxxx, XX 00000 Allegheny
0000 Xxxxxx Xxxxxx Xxxxx, Xxxxxx, XX 00000 Xxxxx
0000 Xx. Xxxxxx Xxxxxxx, Xxxxxxx, XX 00000 Xxxxxx
0000 Xxxxx Xxxxxxxx Xxxx., Xxxxxx, XX 00000 Gwinnett
0000 Xxxxxxx Xxxxxxx, Xxxxxxxx, XX 00000 Franklin
0000 Xxxxxxxx Xxxx, Xxxxxxxx, XX 00000 Franklin
0000 Xxxxxxxxx Xxxxx, Xxxxxx, XX 00000 Xxxxx
00000 Xxxxx Xxxx, Xxxxxxxxxxx, XX 00000 DuPage
0000 Xxxxxxxx Xxx, Xxxxxxxxx, XX 00000 Fayette
0000 Xxxxx Xxxx, Xxxxxxxxxx Xxxxxxx, XX 00000 Cuyahoga
0000 Xxxxxxx Xxxx, Xxxxxxxxxxx, XX 00000 Allegheny
0000 Xxxxxxxxxxx Xxxx, Xxxx XX 00000 Erie
0000 Xxxxxxx Xxxxx, Xxxx Xxxxxxx, XX 00000 Xxxxxx
0000 Xxxxxxxxxx-Xxxxxx Xxxx, Xxxxx, XX 00000 Trumbull
000 Xxxxxxxxxx Xxxxxx #000 (XxxXxxxxx Xxxxxx), Xxxxxxx, XX 00000 Norfolk
00000 Xxxxx Xxxx, Xxxxxxxx Xxxxxxx, XX 00000 Macomb
0000 Xxxxx Xxxxxxxxxxx Xxxxxxx, Xxxxxxxxxx, XX 00000 Jefferson
00000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000 Xxxxxx
0000 Xxxxxxx Xxxx, Xxxxxx, XX 00000 Franklin
000 Xxxxx Xxxxx, Xxxxxxxxxx, XX 00000 Allegheny
0000 Xxxxxx Xxxxx Xxxxx, Xxxxxxxx, XX 00000 Jefferson
0000 Xxx Xxxx Xxxx, Xxxxxxxxxxxx, XX 00000 Mecklenburg
0000 Xxxxxxxxx Xxxx, Xxxxxxx, XX 00000 Xxxxxxxx
0000 Xxxxxxxxx Xxxxxxx XX, Xxxxxxxxxx, XX 00000 Kent
0000 Xxxxxx Xxxxxxx Xxxxx, Xxxxxxxxxxxx, XX 00000 Xxxxxx
0000 Xxxxxxx Xxxx, Xxxxxx Xxxxx, XX 00000 Oakland
00000 Xxxxx Xxxx Xxxx, Xxxx Xxxx, XX 00000 Lake
000 Xxxxxx Xxxx Xxxxxx, Xxxxxxxx, XX 00000 Franklin
0000 Xxxxxxx Xxxxx Xxxxxxx, Xxxxxxxx, XX 00000 Allegheny
0000 Xxxx Xxxxxxx Xxxx, Xxxxxxx, XX 00000 Xxxxxx
0000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000 Lake
0000 Xxxxxxxxxx Xxxx, XxXxxxxx, XX 00000 Washington
000 Xxxxx Xxxxx Xxxx, Xxxxxxxxx Xxxxx, XX 00000 Oakland
ADDRESS COUNTY
------- ------
0000 Xxxxxx Xxxxx Xxxxx, Xxxxxxxxxx, XX 00000 Jefferson
0000 Xxxxxxxx Xxxx, Xxxxxxxx, XX 00000 Cuyahoga
000 Xxxxxxxx Xxxxx Xxxxx, Xxxxxxxxxx, XX 00000 Clermont
0000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000 Franklin
0000 X. Xxxxxxx Xxxxxx, Xxxxxx, XX 00000 Xxxxx
0000 Xxxxxxxx Xxxx, Xxxxxxxx, XX 00000 Xxxxx
0000 Xxxxxxxx Xxxxx Xxxx., Xxxxxxxx Xxxxx, XX 00000 Virginia Beach
[BORROWER TO EDIT TO ADD NEW LOCATIONS AND DELETE ANY CLOSED LOCATIONS]