AMENDMENT NUMBER ELEVEN TO CREDIT AGREEMENT AND WAIVER

Exhibit 10.1

AMENDMENT NUMBER ELEVEN TO CREDIT AGREEMENT AND WAIVER

This AMENDMENT NUMBER ELEVEN TO CREDIT AGREEMENT AND WAIVER (this “Amendment”) is entered into as of November 2, 2007, by the lenders identified on the signature pages hereof (the “Lenders”), ▇▇▇▇▇ FARGO FOOTHILL, INC., a California corporation, as the arranger and administrative agent for the Lenders (in such capacity, together with its successors and assigns, if any, in such capacity, “Agent”; and together with the Lenders, the “Lender Group”), BUCA, INC., a Minnesota corporation (“Parent”), and each of Parent’s Subsidiaries identified on the signature pages hereof (such Subsidiaries, together with Parent, are referred to hereinafter each individually as a “Borrower”, and individually and collectively, jointly and severally, as the “Borrowers”), with reference to the following:

WHEREAS, Borrowers and the Lender Group are parties to that certain Credit Agreement, dated as of November 15, 2004 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”);

WHEREAS, Borrowers has advised the Lender Group that Borrowers have failed to comply with Section 6.16(a)(i) of the Credit Agreement by permitting EBITDA as of the last day of the 12 month period ending September 30, 2007 to be less than $7,500,000 (the “Designated Event of Default”);

WHEREAS, Borrowers have requested that the Lender Group agree to certain amendments to the Credit Agreement, as set forth herein; and

WHEREAS, upon the terms and conditions set forth herein, the Lender Group is willing to accommodate Borrowers’ requests.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

 

1.	Defined Terms. Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement, as amended hereby.

 

2.	Amendments to Credit Agreement.

 

(a)

Section 6.16(a)(i) of the Credit Agreement is hereby amended by replacing the reference to “$9,100,000” contained in the fourth row of the table contained therein for the 12 month period ending December 30, 2007 with “$5,695,000”.

 

(b)

Section 6.16(a)(ii) of the Credit Agreement is hereby amended by replacing the reference to “1.25:1.00” contained in the thirteenth row of the table contained therein for the 12 month period ending December 30, 2007 with “1.00:1.00”.

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(c)

Schedule 1.1 of the Credit Agreement is hereby amended by amending and restating the definition of “EBITDA” as follows:

““EBITDA” means, with respect to any fiscal period, in each case as determined in accordance with GAAP, Parent’s and its Subsidiaries’ consolidated net earnings (or loss), minus extraordinary gains and interest income for such period, plus:

(a) interest expense, income taxes, depreciation and amortization, and Restaurant Pre-Opening Expenses for such period;

(b) for fiscal year 2005 through and including fiscal year 2006 only, legal fees and disbursements incurred in connection with any of the Investigations, charges relating to the reimbursement of witnesses in any of the Investigations, and fees and disbursements of forensic accountants retained by the Borrowers in connection with any of the Investigations, in an aggregate amount not to exceed $3,000,000 (the “Investigations Expenses”);

(c) for any fiscal year after fiscal year 2004 through and including fiscal year 2006, charges not to exceed $1,000,000 (inclusive of legal fees and disbursements) in the aggregate for amounts, if any, in excess of the remaining reserve therefor paid during such period under the settlement of the Class Action Lawsuit;

(d) any non-cash asset impairment charges or fixed asset additions for restaurant properties that have previously been impaired, in each case in accordance with FASB 144 (to the extent having been deducted in the calculation of net earnings (loss) for such period);

(e) for the fourth fiscal quarter of fiscal year 2005 and each fiscal year thereafter, any charges related to FIN 47 in amount not to exceed $359,857 for the fourth fiscal quarter of fiscal year 2005 and $210,000 for each fiscal year thereafter;

(f) for fiscal year 2006 and each fiscal year thereafter, any charges related to FASB 123;

(g) any non-recurring store closure expenses and lease termination charges for such period related to any store closures; and

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(h) for the third fiscal quarter of fiscal year 2007, asset write-off and renovation expenses related to the store located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ in an aggregate amount not to exceed $700,000;

provided that any reversal (or reimbursement) of charges set forth in the foregoing clauses (b) through (h) shall not be included in (and, as applicable, subtracted from) EBITDA.”

 

3.

Waiver of Designated Events of Default. Subject to the satisfaction by Borrowers of the conditions precedent set forth in Section 4 herein, and anything in the Credit Agreement to the contrary notwithstanding, the Lender Group hereby waives the Designated Event of Default; provided, however, nothing herein shall be deemed a waiver with respect to any other future failure of Borrowers to comply fully with any provision of the Credit Agreement or any other provision of any Loan Document. This waiver shall be effective only for the Designated Event of Default, and in no event shall this waiver be deemed to be a waiver of enforcement of any of the Lender Group’s rights with respect to any other Defaults or Events of Default now existing or hereafter arising. Nothing contained in this Amendment nor any communications between any Borrower and any member of the Lender Group shall be a waiver of any rights or remedies any member of the Lender Group has or may have against Borrowers, except as specifically provided herein. Except as specifically provided herein, each member of the Lender Group hereby reserves and preserves all of its rights and remedies against Borrowers under the Credit Agreement and the other Loan Documents.

 

4.	Conditions Precedent to Amendment. The satisfaction of each of the following shall constitute conditions precedent to the effectiveness of this Amendment and each and every provision hereof:

 

(a)

Agent shall have received this Amendment, duly executed by the parties hereto, and the same shall be in full force and effect.

 

(b)

Agent shall have received a reaffirmation and consent substantially in the form attached hereto as Exhibit A, duly executed and delivered by each Guarantor.

 

(c)

Borrowers shall have paid to Agent, for WFF’s sole and separate account, an amendment fee of $75,000 (the “Eleventh Amendment Fee”), which Eleventh Amendment Fee shall be fully earned (and non-refundable) and paid in full on the date hereof by charging such fee to Borrowers’ Loan Account.

 

(d)

After giving effect to this Amendment, the representations and warranties herein and in the Credit Agreement, as amended hereby, and the other Loan Documents shall be true and correct in all material respects on and as of the date hereof, as though made on such date (except to the extent that such representations and warranties relate solely to an earlier date).

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(e)

After giving effect to this Amendment, no Default or Event of Default shall have occurred and be continuing on the date hereof, nor shall result from the consummation of the transactions contemplated herein.

 

(f)

No injunction, writ, restraining order, or other order of any nature prohibiting, directly or indirectly, the consummation of the transactions contemplated herein shall have been issued and remain in force as of the date hereof by any Governmental Authority against any Borrower, any Guarantor, Agent, or any Lender.

 

5.

Release. Each Borrower hereby waives, releases, remises and forever discharges each member of the Lender Group, each of their respective Affiliates, and each of their respective officers, directors, employees, and agents (collectively, the “Releasees”), from any and all claims, demands, obligations, liabilities, causes of action, damages, losses, costs and expenses of any kind or character, known or unknown, past or present, liquidated or unliquidated, suspected or unsuspected, which any Borrower ever had from the beginning of the world, or now has against any such Releasee which relates, directly or indirectly, to the Credit Agreement or any other Loan Document, or to any acts or omissions of any such Releasee with respect to the Credit Agreement or any other Loan Document, or to the lender-borrower relationship evidenced by the Loan Documents. As to each and every claim released hereunder, each Borrower hereby represents that it has received the advice of legal counsel with regard to the releases contained herein, and having been so advised, each Borrower specifically waives the benefit of the provisions of Section 1542 of the Civil Code of California which provides as follows:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH A CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

As to each and every claim released hereunder, each Borrower also waives the benefit of each other similar provision of applicable federal or state law (including without limitation the laws of the state of New York), if any, pertaining to general releases after having been advised by its legal counsel with respect thereto.

 

6.

Costs and Expenses. Borrowers agree to pay all reasonable out-of-pocket costs and expenses of each member of the Lender Group (including, without limitation, the reasonable fees and disbursements of outside counsel to each member of the Lender Group) in connection with the preparation, execution and delivery of this Amendment and all agreements and documents executed in connection herewith and the review of all documents incidental thereto.

 

7.

Representations and Warranties. Each Borrower represents and warrants to the Lender Group that (a) the execution, delivery, and performance of this Amendment and the Credit Agreement, as amended hereby, (i) are within its corporate or limited partnership powers, (ii) have been duly authorized by all necessary corporate or limited partnership action on its part, and (iii) are not in contravention of any law, rule, or regulation

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applicable to it, or any order, judgment, decree, writ, injunction, or award of any arbitrator, court, or Governmental Authority binding on it, or of the terms of its Governing Documents, or of any material contract or undertaking to which it is a party or by which any of its properties may be bound or affected; (b) each of this Amendment and the Credit Agreement, as amended hereby, are legal, valid and binding obligations of each Borrower, enforceable against each Borrower in accordance with their respective terms (except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors rights generally); and (c) after giving effect to this Amendment, no Default or Event of Default has occurred and is continuing on the date hereof.

 

8.	Choice of Law. The validity of this Amendment, its construction, interpretation and enforcement, and the rights of the parties hereunder shall be determined under, governed by, and construed in accordance with the laws of the State of New York.

 

9.

Counterpart Execution. This Amendment may be executed in any number of counterparts, all of which when taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Amendment by signing any such counterpart. Delivery of an executed counterpart of this Amendment by telefacsimile or electronic mail shall be equally as effective as delivery of an original executed counterpart of this Amendment. Any party delivering an executed counterpart of Amendment by telefacsimile or electronic mail also shall deliver an original executed counterpart of this Amendment, but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.

 

10.	Effect on Loan Documents.

 

(a)

The Credit Agreement and each of the other Loan Documents, as amended, modified or waived hereby, shall be and remain in full force and effect in accordance with their respective terms and hereby are ratified and confirmed in all respects. The execution, delivery, and performance of this Amendment shall not operate, except as expressly set forth herein, as a modification or waiver of any right, power, or remedy of Agent or any Lender under the Credit Agreement or any other Loan Document. The waivers, consents, and modifications herein are limited to the specifics hereof, shall not apply with respect to any facts or occurrences other than those on which the same are based, shall not excuse future non-compliance with the Loan Documents, and shall not operate as a consent to any further or other matter under the Loan Documents.

 

(b)

Upon and after the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “herein”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to “the Credit Agreement”, “thereunder”, “therein”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as modified and amended hereby.

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(c)

To the extent that any terms and conditions in any of the Loan Documents shall contradict or be in conflict with any terms or conditions of the Credit Agreement, after giving effect to this Amendment, such terms and conditions are hereby deemed modified or amended accordingly to reflect the terms and conditions of the Credit Agreement as modified or amended hereby.

 

(d)

This Amendment is a Loan Document.

 

11.

Entire Agreement. This Amendment embodies the entire understanding and agreement between the parties hereto with respect to the subject matter hereof and supersedes any and all prior or contemporaneous agreements or understandings with respect to the subject matter hereof, whether express or implied, oral or written.

[signature page follows]

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IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date first above written.

 

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