EXHIBIT 10.17.2
ELEVENTH AMENDMENT AND WAIVER
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ELEVENTH AMENDMENT AND WAIVER dated as of August 9, 2001 (the
"Eleventh Amendment") with respect to the Revolving Credit and Term Loan
Agreement dated as of April 26, 1999 (as amended, the "Credit Agreement") by and
among Chart House Enterprises, Inc. (the "Parent"), Chart House, Inc. (the
"Borrower"), the lending institutions from time to time party thereto
(collectively, the "Banks") and Fleet National Bank (formerly known as
BankBoston, N.A.), as Agent (the "Agent").
WITNESSETH
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WHEREAS, pursuant to the Credit Agreement, the Banks have made Loans
and other Financial accommodations to the Borrower which remain outstanding;
WHEREAS, certain Events of Default have occurred and are continuing;
and
WHEREAS, the Borrower has requested that the Agent and the Banks, and
the Agent and the Banks are willing to, waive the Specified Events of Default
(as defined below) and amend the Credit Agreement, but only on the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Defined Terms. Unless otherwise defined herein,
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capitalized terms used herein have the meanings assigned in the Credit Agreement
(as amended by this Eleventh Amendment) and the following terms shall have the
following meanings:
"Amendment Fee": shall have the meaning ascribed thereto in Section
7.2(b).
"Business Plan": shall have the meaning ascribed thereto in Section
4.3.
"Collateral Certificate": means a Collateral Certificate, in the form
attached hereto as Exhibit A.
"Effective Date": shall have the meaning ascribed thereto in Article
V.
"Financial Advisor": shall have the meaning set forth in Section 4.2.
"PWC": shall mean PricewaterhouseCoopers LLP.
"PWC Engagement Letter": shall mean that certain engagement letter
dated as of July 26, 2001 between the Borrower and PWC.
"Specified Events of Default": Events of Default arising under Section
15.1(c) of the Credit Agreement as a result of the Borrower's failure to
satisfy the covenants contained in Sections 12.3 and 12.7 of the Credit
Agreement, in each case, with respect to the period ended June 25, 2001.
"Type A Capital Event": means any issuance or sale of equity
securities of junior debt securities or instruments, on terms and
conditions satisfactory to the Agent and the Required Banks, that
shall result in a payment in cash to the Banks in an amount of not
less than $1,000,000.
ARTICLE II
WAIVER
Section 2.1. Waiver. Subject to compliance with the terms and
conditions set forth in this Eleventh Amendment, the Agent and the Banks hereby
agree to waive the Specified Events of Default.
ARTICLE III
AMENDMENTS TO CREDIT AGREEMENT
Section 3.1. Amendment to Section 1.1 (Definitions). Section 1.1 of
the Credit Agreement is hereby amended by (a)(i) deleting the word "and"
immediately before clause (i) in the definition of "Consolidated EBITDA" and
(ii) inserting immediately before the word "minus" in said definition the phrase
"(j) an amount equal to $700,000 relating to an insurance adjustment recorded by
the Borrower in the second quarter of 2001 and (k) fees accrued but not paid to
Equity Group Investments, LLC pursuant to that certain Letter Agreement dated as
of November 2, 1998 between Equity Group Investments, LLC and the Parent";
(b) deleting the definition of "Interest Payment Date" and
inserting in lieu thereof the following:
"Interest Payment Date. (i) As to any Base Rate Loan, the last day of
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the calendar month with respect to interest accrued during such
calendar month; and (ii) as to any Eurodollar Rate Loan, the last day
of the Interest Period; and
(c) deleting the phrase "1.2, 3, or 6 Months" in the definition
of "Interest Period" and inserting in lieu thereof the phrase "1 month".
Section 3.2. Amendment to Section 11.16 (Subordinated Debt). Section
11.16 of the Credit Agreement is hereby amended by deleting the proviso in
Section 11.16.
Section 3.3. Amendment to Section 12.1 (Leverage). Section 12.1 of the
Credit Agreement is hereby amended by deleting from the chart therein the rows
beginning with the dates June 26, 2001, September 25, 2001, January 1, 2002 and
April 2, 2002 and inserting in lieu thereof the following:
"June 26, 200l through September 24, 200l 4.50:1.00
September 25, 200l through December 31, 2001 4.00:1.00
January 1, 2002 through April 1, 2002 4.30:1.00
April 2, 2002 through July 1, 2002 3.60:1.00".
Section 3.4. Amendment to Section 12.3 (Debt Service). Section 12.3 of
the Credit Agreement is hereby amended by deleting from the chart therein the
rows beginning with the dates December 25, 2000, September 25, 2001 and January
1, 2002 and inserting in lieu thereof the following:
"June 26, 200l through September 24, 2001 .75:1.00
September 25, 200l through December 31, 2001 .90:1.00
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January 1, 2002 through April 1, 2002 .80:1.00
April 2, 2002 through July 1, 2002 1.00:1.00".
Section 3.5. Amendment to Section 12.6 (Adjusted Leverage Ratio).
Section 12.6 of the Credit Agreement is hereby amended by deleting from the
chart therein the rows beginning with the dates June 26,2001 and January 1, 200l
and inserting in lieu thereof the following:
"June 26, 2001 through September 24, 2001 6.50:l.00
September 25, 2001 through December 31, 2001 6.25:1.00
January 1, 2002 through April 1, 2002 6.50:1.00
April 2, 2002 through July 1, 2002 6.00:1.00".
Section 3.6. Amendment to Section 12.7 (Minimum EBITDA). Section 12.7
of the Credit Agreement is hereby amended by from the chart therein the rows
beginning with the dates June 26, 2001, September 25, 2001, January 1, 2002 and
April 2, 2002 and inserting in lieu thereof the following:
"June 26, 2001 through September 24, 2001 $1,800,000
September 25, 2001 through December 31, 2001 $1,800,000
January 1, 2002 through April 1, 2002 $1,700,000
April 2, 2002 through July 1, 2002 $2,800,000".
ARTICLE IV
AGREEMENTS
Section 4.1. Capital Event. On or before September 28, 2001, or such
earlier date identified in the Business Plan (as defied hereinafter) as the date
by which the Borrower requires additional liquidity, the Borrower shall
consummate the Type A Capital Event; it being understood that the failure to
consummate the Type A Capital Event required pursuant to this Section 4.1 shall,
without the necessity of any further action by any party, constitute an Event of
Default. Notwithstanding anything to the contrary set forth in the Credit
Agreement, the net cash proceeds from the Type A Capital Event shall he applied
to prepay Revolving Credit Loans, but shall not reduce the Revolving Credit
Commitments.
Section 4.2. Financial Advisor. The Borrower shall continue the
retention of PWC or another financial advisor reasonable acceptably to the Agent
and the Required Banks (the "Financial Advisor"). Upon request, the Agent and
the Banks shall be provided with reasonable access to the Financial Advisor and
copies of all information provided to the Financial Advisor. To the extent that
information provided by the Financial Advisor to the Agent and the Banks is
confidential, the Agent and the Banks agree to keep such information
confidential in the manner and to the extent set forth in Section 19.2 of the
Credit Agreement.
Section 4.3. Business Plan; Cash Flow Forecast. (a) Business Plan. On
or before September 10, 2001, the Borrower shall deliver to the Agent and the
Banks a detailed business plan (the "Business Plan") in form satisfactory to the
Agent. To the extent the Business Plan evidences the need for any additional
liquidity on the part of the Borrower, it shall identify the source(s) of such
additional liquidity. The Business Plan shall include, on a monthly basis for
the period beginning September 1, 2001 and ending December 31, 2002, (i)
consolidated forecasts detailing cash flow and collateral levels, (ii)
consolidated profit and loss statements and (iii) consolidated balance sheets.
The Business Plan shall identify (x) all sources of revenue and expenses,
including, without limitation, intended executive compensation and (y) the
nature of all proposed Capital Expenditures.
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(b) On October 15, 2001, the Agent shall notify the Borrower in
writing as to whether or not the then-current Business Plan is acceptable to the
Agent and the Required Banks; provided, however, that the Agent shall have the
option, prior to October 15, 2001, to notify the Borrower in writing that the
then-current Business Plan is acceptable to the Agent and the Required Banks; it
being understood that the failure of the then-current Business Plan to be
acceptable to the Agent and the Required Banks pursuant to this Section 4.3(b)
shall, without the necessity of any further action by any party, constitute an
Event of Default. In determining whether the Business Plan is acceptable, the
Agent and the Banks may consider, among other things, (i) the Borrower's
then-current cash flow projection and, to the extent necessary, source(s) of
additional liquidity, (ii) the necessity for the Borrower to consumate one or
more capital events and (iii) based on, among other things, clauses (i) and (ii)
hereof and revised projections as may be contained in the Business Plan, the
necessity for further modification of one or more of the financial covenants
contained in Section 12 of the Credit Agreement.
Section 4.4. Agent's Advisors. The Borrower hereby agrees that, in the
event that the Agent or its counsel decides to retain a financial advisor, the
Borrower shall cooperate in all respects with any such financial advisor and
shall pay or reimburse the Agent for all reasonable fees and out-of-pocket
expenses incurred in connection therewith.
Section 4.5. Cash Management. The Borrower shall maintain its cash
management system at the Agent or otherwise pursuant to depositary agreements in
form and substance satisfactory to the Agent.
Section 4.6. Collateral. The Borrower shall deliver to the Agent a
Co1lateral Certificate, fully executed by a responsible officer of the Borrower,
on or before August 27, 200l. On or before September 30, 2001, in connection
with the Agent's review of the Collateral, the Parent, the Borrower and the
Subsidiary Guarantors shall execute such further instruments and documents as
the Agent shall request.
Section 4.7. Agreements Deemed Agreements under the Credit Agreement.
For purposes of the Credit Agreement, the agreements of the Borrower contained
in this Article IV shall be deemed to be, and shall be, agreements under the
Credit Agreement. Any breach on the part of the Borrower of any agreement
contained in this Article IV shall constitute an Event of Default.
ARTICLE V
EFFECTIVE DATE
This Eleventh Amendment shall become effective as of the date on which
the Agent has received (a) counterparts to this Eleventh Amendment, duly
executed and delivered by the Borrower, the Parent, the Subsidiary Guarantors,
the Agent and the Required Banks, (b) payment in full in cash of the invoiced
and unpaid fees and expenses of the Agent's professionals, (c) payment in full
in cash of the Amendment Fee and (d) an amendment to the PWC Engagement Letter,
duly executed by the parties thereto, in form and substance satisfactory to the
Agent and the Required Banks.
ARTICLE VI
INTERPRETATION
Section 6.l. Continuing Effect of the Credit Agreement. The Borrower,
the Agent and each Bank hereby acknowledges and agrees that the Credit Agreement
shall continue to be and shall remain unchanged and in full force and effect in
accordance with its terms, except as expressly modified hereby.
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Section 6.2. No Waiver. Nothing contained in this Eleventh Amendment
shall be construed or interpreted or is intended as a waiver of any Default or
Event of Default, other than the Specified Events of Default, or of any rights,
powers, privileges or remedies that the Agent or the Banks have or may have
under the Credit Agreement, the Security Documents, any other related document
or applicable law on account of such Default or Event of Default, except as
expressly provided herein.
ARTICLE VII
MISCELLANEOUS
Section 7.l. Representations and Warranties. (a) The representations
and warranties contained in Section 9 of the Credit Agreement are true and
correct at and as of the date made and as of the date hereof, except to the
extent of changes resulting from transactions contemplated or permitted by this
Amendment and the other Loan Documents, changes which have been disclosed to the
Agent and the Banks prior to the date hereof and changes occurring in the
ordinary course of business that singly or in the aggregate are not materially
adverse, and to the extent that such representations and warranties related
expressly to an earlier date.
(b) Each of the Parent, the Borrower and each Subsidiary
Guarantor has performed and complied in all material respects with all terms and
conditions herein required to be performed or complied with by it prior to or at
the time hereof, and as of the date hereof, after giving effect to the
provisions hereof, there exists no Default or Event of Default.
Section 7.2. Payment of Fees and Expenses. (a) The Borrower hereby
agrees to pay or reimburse the Agent on demand for all its reasonable
out-of-pocket costs and expenses incurred in connection with the preparation and
execution of this Eleventh Agreement, including, without limitation, the
reasonable fees and disbursements of counsel to the Agent. In furtherance of the
provisions of this Section 7.2 and Section l8.1 of the Credit Agreement, the
Borrower hereby agrees that the Agent shall be entitled, upon one Business Day's
written notice to the Borrower, to debit any account of the Borrower to collect
costs and expenses to which the Agent is entitled pursuant to this Section 7.2
and Section 18.1 of the Credit Agreement.
(b) The Borrower shall, on or before the Effective Date, pay to
the Agent, for the account of each Bank on a pro rata basis, an amendment fee in
an amount equal to $100,000 (the "Amendment Fee").
Section 7.3. Counterparts. This Amendment may be executed by the
parties hereto in any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
Section 7.4. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE COMMONWEALTH OF
MASSACHUSETTS.
Section 7.5. Reservation of Rights. Notwithstanding anything contained
in this Eleventh Amendment, the Borrower, the Parent and the Subsidiary
Guarantors acknowledge that the Agent and the Banks do not waive, and expressly
reserve, the right to exercise, at any time, any and all of their rights and
remedies under the Credit Agreement, the Security Documents, any other related
document and applicable law on account of any Default or Event of Default, other
than as expressly provided herein.
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Section 7.6. Confirmation of Indebtedness. The Borrower hereby
confirms and acknowledges that, as of the Effective Date, (i) the Borrower is
truly and justly indebted to the Banks, without defense, counterclaim or offset
of any kind and (ii) the Borrower is liable to the Banks in respect of Loans and
Letters of Credit in the aggregate principal amount of $27,737,500.
Section 7.7. Waiver. The Parent, the Borrower and the Subsidiary
Guarantors hereby release, waive, and forever relinquish all claims, demands,
obligations, liabilities and causes of action of whatever kind or nature,
whether known or unknown, which any of them have, may have, or might assert at
the time of execution of this Eleventh Amendment or in the future against the
Agent, the Banks and/or their respective parents, affiliates, participants,
officers, directors, employees, agents, attorneys, accountants, consultants,
successors and assigns (collectively, the "Bank Group"), directly or indirectly,
which occurred, existed, was taken, permitted or begun prior to the execution of
this Eleventh Amendment, arising out of, based upon, or in any manner connected
with (a) any transaction, event, circumstance, action, failure to act or
occurrence of any sort or type, whether known or unknown, with respect to the
Credit Agreement, the Security Documents, any other related document and/or the
administration thereof or the obligations created thereby; (b) any discussions,
commitments, negotiations, conversations or communications with respect to the
refinancing, restructuring or collection of any obligations related to the
Credit Agreement, the Security Documents, any other related document and/or the
administration thereof or the obligations created thereby, or (c) any matter
related to the foregoing; provided, however, that the provisions of this Section
7.7 shall not apply to any such matters of which the Borrower, the Parent and
the Subsidiary Guarantors are presently unaware and which constitute or result
from the gross negligence and/or willful misconduct of any member of the Bank
Group.
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IN WITNESS WHEREOF, the parties hereto have caused this Eleventh
Amendment and Waiver to be duly executed and delivered by their proper and duly
authorized officers as of the date first above written.
CHART HOUSE, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Title: President
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FLEET NATIONAL BANK (f/k/a BankBoston,
N.A.), as Agent and a Lender
By: /s/ Xxxxxxx Xxxxxxx
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Title: Sr. Vice President
BNP PARIBAS, as a Lender
By:___________________________________
Title:
By:___________________________________
Title:
ING (U.S.) CAPITAL LLC, as a Lender
By:___________________________________
Title:
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FLEET NATIONAL BANK (f/k/a BankBoston,
N.A.), as Agent and a Lender
By:____________________________________
Title
BNP PARIBAS, as a Lender
By: /s/ XX xx Xxxxxxxx
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Title: XX xx XXXXXXXX
Managing Director
By: /s/ Xxxxxx X. Xxxxxxxx
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Title: Xxxxxx X. Catarina
Vice President
Merchant Banking
ING (U.S.) CAPITAL LLC, as a Lender
By:____________________________________
Title:
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FLEET NATIONAL BANK (f/k/a BankBoston,
N.A.), as Agent and a Lender
By:____________________________________
Title:
BNP PARIBAS, as a Lender
By:____________________________________
Title:
By:____________________________________
Title:
ING (U.S.) CAPITAL LLC, as a Lender
By: /s/ Xxx Xxxxxxxxxxx
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Title: Vice President
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ACKNOWLEDGED AND AGREED:
CHART HOUSE ENTERPRISES, INC.
as Parent
By: /s/ Xxxxxxx X. Xxxxxx
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Title: President
CHART HOUSE ENTERPRISES OF IDAHO,
INC., as a Subsidiary Guarantor
By: /s/ Xxxxxxx X. Xxxxxx
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Title: President
CHART HOUSE ENTERPRISES OF PUERTO,
RICO INC., as a Subsidiary Guarantor
By: /s/ Xxxxxxx X. Xxxxxx
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Title: President
CHART HOUSE OF ANNAPOLIS, INC., as a
Subsidiary Guarantor
By: /s/ Xxxxxxx X. Xxxxxx
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Title: President
CHART HOUSE OF MARYLAND, INC., as a
Subsidiary Guarantor
By: /s/ Xxxxxxx X. Xxxxxx
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Title: President
CHART HOUSE ACQUISITION, INC., as a
Subsidiary Guarantor
By: /s/ Xxxxxxx X. Xxxxxx
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Title: President
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BIG WAVE, INC., as a Subsidiary Guarantor
By: /s/ Xxxxxxx X. Xxxxxx
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Title: President
CORK 'N XXXXXXX, INC., as a Subsidiary
Guarantor
By: /s/ Xxxxxxx X. Xxxxxx
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Title: President
ANALOS COMPANY, as a Subsidiary Guarantor
By: /s/ Xxxxxxx X. Xxxxxx
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Title: President
WEST 52nd STREET, INC., as a Subsidiary
Guarantor
By: /s/ Xxxxxxx X. Xxxxxx
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Title: President
CHART HOUSE ACQUISITION OF NEVADA,
INC., as a Subsidiary Guarantor
By: /s/ Xxxxxxx X. Xxxxxx
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Title: President
CHART HOUSE ACQUISITION OF
MARYLAND, INC., as a Subsidiary Guarantor
By: /s/ Xxxxxxx X. Xxxxxx
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Title: President
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EXHIBIT A
COLLATERAL CERTIFICATE
[TO BE PROVIDED]