EXHIBIT 10.3
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (the "First Amendment") is
entered into effective as of August 14, 1998, among ▇▇▇▇▇▇'▇ SEAFOOD
RESTAURANTS, INC., a Delaware corporation (the "Company"), BANK OF AMERICA
TEXAS, N.A. ("BofA"), as letter of credit issuing bank and as agent for the
Banks (BofA in its capacity as agent hereinafter referred to as "Agent"), THE
BANK OF NOVA SCOTIA, as co-agent, and the several financial institutions party
to the Credit Agreement as identified on the signature pages hereto
(collectively, the "Banks).
W I T N E S S E T H:
WHEREAS, Company, Agent and the Banks entered into that certain Credit
Agreement dated to be effective as of June 19, 1997 (the "Credit Agreement");
and
WHEREAS, in connection with the execution of the Credit Agreement, the
Company executed a Promissory Note payable to each Bank dated as of June 19,
1997 (the "Notes"); and
WHEREAS, the Obligations (as defined in the Credit Agreement) of the
Company were guaranteed by each of the Guarantors (as defined in the Credit
Agreement) pursuant to that certain Guaranty agreement (the "Guaranty") executed
by the Guarantors in favor of Agent, for the ratable benefit of the Banks, dated
as of June 19, 1997; and
WHEREAS, Company, Agent and the Banks desire to amend the Credit
Agreement as hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, Company, Guarantors, Agent and the Banks agree as follows:
1. Land and Restaurant Sales. The Banks acknowledge that the Company
intends to sell the following and the Banks have no objections to such sales
with the following provisos:
(a) the sale of that certain approximately 4 acre tract of land located
in Houston, ▇▇▇▇▇▇ County, Texas, as more particularly described on Exhibit "A"
to this First Amendment, so long as such sale is made in compliance with Section
8.06 of the Credit Agreement; and
(b) the sale of approximately 6 restaurants (the "Restaurant Sales");
provided, however, that no more than $15,000,000.00 in write-downs or charges
incurred in connection with such Restaurant Sales shall be excluded from the
calculation of the financial covenants contained in Section 8.16 (Maximum
Leverage Ratio) or 8.17 (Minimum Fixed Charge Coverage Ratio) of the Credit
Agreement, and the calculation of the cap on cash dividends contained in Section
8.11(c) of the Credit Agreement, to the extent such write-downs or charges are
taken by the Company on or before December 31, 1998.
2. Cash Dividends. Subsection (c) of Section 8.11 of the Credit
Agreement, Restricted Payments, is hereby deleted in its entirety and replaced
with the following:
(c) declare or pay cash dividends to its stockholders and purchase,
redeem or otherwise acquire shares of its capital stock or warrants,
rights or options to acquire any such shares for cash each fiscal year
in an amount not to exceed 15% of the net income of the Company for the
preceding fiscal year, computed on a consolidated basis, provided, that,
immediately after giving effect to such proposed action, no Default or
Event of Default would exist.
3. Stock Repurchase. Section 8.11 of the Credit Agreement, Restricted
Payments, is hereby amended by the addition of the following subsection:
(d) repurchase shares of its common stock in an amount not to exceed
$45,000,000.00. Any such repurchase shall be completed on or before
December 31, 1999.
4. Deferred Pre-Opening Costs. Deferred pre-opening costs of the
Company's restaurants which are required, due to new accounting standard AICPA
statement #98-5, to be expensed during the fourth quarter of fiscal year 1998
shall not be included in the calculation of the financial covenants contained in
Sections 8.16 (Maximum Leverage Ratio) or 8.17 (Minimum Fixed Charge Coverage
Ratio) of the Credit Agreement, or in the calculation of the cap on cash
dividends contained in Section 8.11(c) of the Credit Agreement; provided,
however, that the amount of such costs which may be excluded from the
calculation of the foregoing covenants shall not exceed $6,000,000.00.
5. Renewal; Continued Effect. Except as set forth above, the Credit
Agreement shall continue in full force and effect in accordance with its
original provisions.
6. Representations. To induce Agent and the Banks to enter into this
First Amendment, the Company ratifies and confirms each representation and
warranty set forth in the Credit Agreement as if such representations and
warranties were made on even date herewith, and further represents and warrants
(a) that no material adverse change has occurred in the financial condition or
business prospects of Company since the date of the last financial statements
delivered to Agent, (b) that no Event of Default exists and no event or
condition exists or has occurred which with passage of time, or notice, or both,
would become an Event of Default (a "Default"), and (c) that the Company is
fully authorized to enter into this First Amendment.
7. Conditions Precedent. As a condition to the effectiveness of this
First Amendment and to Agent and the Banks entering into this First Amendment,
no Default or Event of Default shall exist on the date hereof, and Agent must
have received executed originals of each of the following documents and
instruments, in form and substance satisfactory to Agent and the Banks:
(a) Corporate resolutions of the Company and each of the
Guarantors (or comparable action for any Guarantor that is a partnership)
authorizing the execution of this First Amendment; and
(b) Such other documents or certificates as Agent or the Banks
may reasonably request.
8. Notes; Amendment and Ratification. Each of the Notes are hereby
amended such that the defined term "Credit Agreement" shall refer to the Credit
Agreement as amended by this First Amendment. The Company ratifies and confirms
each of the Notes and acknowledges and agrees that the Notes shall continue in
full force and effect, as amended hereby.
9. Guaranty Agreement; Amendment and Ratifications. The Guaranty is
hereby amended such that the defined term "Credit Agreement" shall refer to the
Credit Agreement as amended by this First Amendment. Each of the Guarantors
ratifies and confirms the Guaranty agreement delivered to Agent for the ratable
benefit of the Banks, and acknowledges and agrees that such Guaranty agreement
shall continue in full force and effect, as amended hereby and that pursuant to
such Guaranty agreement, such Guarantor has guaranteed payment and performance
of all Obligations.
10. Miscellaneous.
(a) Severability. In case any of the provisions of this First
Amendment shall for any reason be held to be invalid, illegal, or unenforceable,
such invalidity, illegality, or unenforceability shall not affect any other
provision hereof, and this First Amendment shall be construed as if such
invalid, illegal, or unenforceable provision had never been contained herein.
(b) Capitalized Terms. Except as otherwise defined herein,
capitalized terms shall have the meanings specified in the Credit Agreement.
(c) Execution in Counterparts. This First Amendment may be
executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument, and any party hereto may execute this
First Amendment by signing one or more counterparts.
(d) Governing Law. This First Amemdment shall be construed in
accordance with and governed by the laws of the State of Texas (without
reference to principles of conflicts of laws), provided, however, that Agent and
the Banks shall retain all rights under federal law.
(e) Rights of Third Parties. All provisions herein are imposed
solely and exclusively for the benefit of the Company, the Guarantors, Agent and
the Banks, and their permitted successors and assigns, and no other Person shall
be a direct or indirect legal beneficiary of, or have any direct or indirect
cause of action or claim in connection with this First Amendment or any of the
other Loan Documents.
(f) COMPLETE AGREEMENT. THIS WRITTEN FIRST AMENDMENT AND THE OTHER
WRITTEN AGREEMENTS ENTERED INTO AMONG THE PARTIES REPRESENT THE FINAL AGREEMENT
AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
(g) The person executing this First Amendment on behalf of the
Guarantors, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, represents and warrants that he is a duly
authorized signatory of each of the Guarantors and that he is executing this
Guaranty on behalf of each of the Guarantors as the act and deed of each of the
Guarantors.
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