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EXHIBIT 10(v)
SECOND AMENDMENT TO LOAN AGREEMENT
THIS SECOND AMENDMENT TO LOAN AGREEMENT ("Second Amendment") entered
into this 30th day of March, 2000, by and among J. ALEXANDER'S CORPORATION
(f/k/a VOLUNTEER CAPITAL CORPORATION), J. ALEXANDER'S RESTAURANTS, INC. (f/k/a
TOTAL QUALITY MANAGEMENT, INC.), Tennessee corporations (collectively referred
to as the "Borrower"), and BANK OF AMERICA, N.A., SUCCESSOR TO NATIONSBANK,
N.A., SUCCESSOR TO NATIONSBANK OF TENNESSEE, N.A., a national banking
association ("Lender").
WITNESSETH
WHEREAS, Borrower and Lender entered into that certain Loan Agreement
dated June 30, 1995, as amended by that Amendment to Loan Agreement dated March
27, 1998 ("Loan Agreement") and that Line of Credit Note dated June 30, 1995 in
the maximum principal amount of Thirty Million and 00/100 Dollars
($30,000,000.00), as amended and restated by that Line of Credit Note dated
March 27, 1998 in the maximum principal amount of Twenty Million and 00/100
Dollars ($20,000,000.00), and as further amended and restated by that Renewal
Line of Credit Note of even date herewith in the amount of Twenty Million and
00/100 Dollars ($20,000,000.00) ("Line of Credit Note"); and
WHEREAS, Volunteer Capital Corporation has changed its name to J.
Alexander's Corporation and Total Quality Management, Inc. has changed its name
to J. Alexander's Restaurants, Inc.; and
WHEREAS, Borrower and Lender desire to amend the Loan Agreement as
provided herein; and
NOW, THEREFORE, for the mutual promises contained herein and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. Sections 1.b. & c. of the Loan Agreement shall be deleted in
their entirety and in lieu thereof shall read the following:
b. Interest Rate. From the date hereof until the stated
maturity of the Note, interest shall accrue at the LIBOR Rate plus a
spread of 2.0%, 2.25%, 2.5% or 3.0% depending on the Senior Debt
Coverage Ratio ("SDCR") as further provided herein. If the SDCR is
less than or equal to 2.75 but greater than 2.5, the LIBOR spread will
be 3.0%; if the SDCR is less than or equal to 2.5 but greater than
2.25, the LIBOR spread will be 2.5%; if the SDCR is less than or equal
to 2.25 but greater than 2.0, the LIBOR spread will be 2.25%; if the
SDCR is less than or equal to 2.0, the LIBOR spread will be 2.0%:
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i. As used in this Agreement, Lender's "Prime Rate" is the
fluctuating rate of interest established by Lender from time to time
as its "Prime Rate", whether or not such rate shall be otherwise
published. Such Prime Rate is established by Lender as an index or
base rate and may or may not at any time be the best or lowest rate
charged by Lender on any loan. If at any time or from time to time the
Prime Rate increases or decreases, then the rate of interest hereunder
shall be correspondingly increased or decreased effective on the day
on which any such increase or decrease of the Prime Rate changes,
unless otherwise herein provided. In the event that Lender, during the
term hereof, shall abolish or abandon the practice of establishing a
Prime Rate, or should the same become unascertainable, Lender shall
designate a reasonably comparable reference rate which shall be deemed
to be the Prime Rate.
ii. For purposes hereof, the Senior Debt Coverage Ratio, ("SDCR")
is defined as Senior Funded Debt (as defined herein) divided by
EBITDA, all measured on a trailing four-quarter basis. Senior Funded
Debt means all long-term debt, the current portion of long-term debt,
obligations under Leases (both long-term and current), any notes
payable or other borrowed money, but Senior Funded Debt does not
include any subordinated or convertible debt.
iii. For purposes hereof, the "LIBOR Rate" shall mean the rate of
interest based on the Eurodollar Daily Floating Rate. The Eurodollar
Daily Floating Rate is a floating rate of interest and will change on
and as of the date of a change in the Eurodollar Daily Floating Rate.
The period of time during which the Eurodollar Daily Floating Rate
shall be applicable shall be a Eurodollar Daily Floating Rate Interest
Period. "Eurodollar Daily Floating Rate" shall mean the fluctuating
rate of interest equal to the rate of interest per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Telerate Page 3750 (or any successor page) as the one month London
interbank offered rate for deposits in Dollars at approximately 11:00
A.M. (London time) on the second preceding Business Day, as adjusted
from time to time in Bank's sole discretion for then applicable
reserve requirements, deposit insurance assessment rates and other
regulatory costs. If for any reason such rate is not available, the
term "Eurodollar Daily Floating Rate" shall mean the fluctuating rate
of interest equal to the rate of interest per annum (rounded upwards,
if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen
LIBO Page as the one month London interbank offered rate for deposits
in Dollars at approximately 11:00 A.M. (London time) on the second
preceding Business Day, as adjusted from time to time in Bank's sole
discretion for then applicable reserve requirements, deposit insurance
assessment rates and other regulatory costs; provided, however, if
more than one rate is specified on Telerate Page 3750 or on Reuters
Screen LIBO Page, the applicable rate shall be the arithmetic mean of
all rates on that page. Interest hereunder shall be calculated based
upon a 360-day year and actual days elapsed. If the adoption of or
change in any applicable legal requirement or any change in the
interpretation or administration thereof by any governmental authority
or compliance by the Lender with any request or directive (whether or
not having the force of law)
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from any central bank or other governmental authority, shall at any
time as a result of any portion of the principal balance of this Note
being maintained on the LIBOR Rate:
A. Subject the Lender to any tax (including without
limitation any United States Interest Equalization Tax), levy, impost,
duty, charge, fee (collectively "Taxes"), other than income and
franchise taxes of the United States and its political subdivisions;
or
B. Change the basis of taxation on payments due from
the Borrower to the Lender under any LIBOR Rate Borrowing (otherwise
than by a change in the rate of taxation of the overall net income of
the Lender); or
C. Impose, modify, increase or make applicable any
reserve requirement, special deposit requirement or similar
requirement (including, but not limited to, state law requirements and
Regulation D) against assets held by the Lender, or against deposits
or accounts in or for the account of the Lender, or against any loans
made by the Lender, or against any other funds, obligations or other
property owned or held by Lender; or
D. Impose on the Lender any other condition regarding
any LIBOR Rate Borrowing;
and the result of any of the foregoing is to increase the cost to the
Lender of agreeing to make or of making, renewing or maintaining such
borrowing on the basis of the LIBOR Rate, or reduce the amount of
principal or interest received by the Lender, then, upon demand by the
Lender, the Borrower shall pay to the Lender, from time to time as
specified by the Lender, additional amounts which shall reasonably
compensate the Lender for such increased cost or reduced amount
relating to LIBOR Rate Borrowings outstanding after Lender's demand.
The Lender's reasonable determination of the amount of any such
increased cost, increased reserve requirement or reduced amount shall
be conclusive and binding, absent manifest error.
iv. In no event shall the interest rate charged on the Line of
Credit exceed the maximum rate allowed under applicable law. Any
amounts paid in excess of the maximum lawful rate shall be applied to
reduce the principal amount of Borrower's obligations to Lender or
shall be refunded to Borrower, at Lender's election. After maturity
(by acceleration or otherwise), the principal amount under the Line of
Credit shall bear interest at the rate of interest in effect
immediately before maturity plus three percent (3%).
c. Payments. Payment of all obligations arising under
the Line of Credit shall be made as follows:
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(1) Interest. Interest on the outstanding
principal balance under the Line of Credit shall be paid in
arrears on the first (1st) day of each month beginning on
April 1, 2000.
(2) Voluntary Prepayment. Voluntary prepayments
of principal or accrued interest may be made, in whole or in
part, at any time without penalty.
(3) Mandatory Prepayment. Borrower must
immediately prepay any amount by which the principal balance
of the Line of Credit exceeds $20,000,000.
(4) All Amounts Due. All remaining principal,
interest and expenses outstanding under the Line of Credit
shall become due July 1, 2001, unless the borrower exercises
its option to extend for a seven (7) year term, in which case
all remaining principle, interest and expenses outstanding
under the Line of Credit shall become due July 1, 2008.
(5) Conversion to Term Loan. Subject to the
provisions contained herein, Borrower has the option to
convert this Line of Credit Note to a Term Note. Providing
that Borrower is not then in default hereunder, Borrower may
make a written election to convert the Line of Credit Note to
a Term Note any time prior to July 1, 2001. The written
election must be delivered to Payee at least thirty (30) days
prior to the conversion date. After receipt of the election,
Payee has sole discretion to determine what collateral will
be required of Maker to provide security for the term loan.
Payee will notify Maker whether or in what manner the term
loan shall be securitized within fifteen (15) days after
receiving the election. Upon conversion, there will be a
conversion fee equal to one-quarter (1/4) of one percent (1%)
of the then outstanding principal balance. The unpaid
principal balance will then be repayable in eighty-four (84)
equal monthly installments of principal with the first
principal payment due thirty (30) days following the
conversion date. Interest will continue to be paid monthly at
the same time as the principal payment is due. Interest shall
accrue on the Term Note at the Bank of America, N.A. Prime
Rate, as it may change from time to time or the LIBOR Rate
discussed above (subject to the restriction on the number of
LIBOR borrowings discussed above) or at a fixed rate to be
determined by Payee at the time of receiving the written
election. Maker shall specify the interest rate option (Prime
Rate, LIBOR Rate or fixed) to be used in the conversion
election.
2. Section 30.l of the Loan Agreement is hereby deleted
in its entirety and in lieu thereof shall read as follows:
l. Capital Expenditures. Make capital expenditures
(including capitalized leases) during fiscal year 2000 and
during each fiscal year thereafter exceeding, in the
aggregate, $10,000,000.00 per fiscal year.
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3. Section 31.e of the Loan Agreement is hereby deleted
in its entirety and in lieu thereof shall read as follows:
e. Profit/Loss. For any 2 consecutive fiscal quarters,
Borrower's cumulative pretax loss shall not exceed
$250,000, and Borrower's pretax profit shall exceed $500,000
for the fiscal year ending December 31, 2000 and each fiscal
year thereafter.
4. Except as amended in this Second Amendment, the
provisions contained in the Loan Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties have executed this document through
authorized agents on the day and date first above written.
BANK OF AMERICA, N.A., SUCCESSOR TO
NATIONSBANK, N.A., SUCCESSOR TO
NATIONSBANK OF TENNESSEE, N.A.
By: /s/ William H. Diehl
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Title: Senior Vice President
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J. ALEXANDER'S CORPORATION
(f/k/a VOLUNTEER CAPITAL CORPORATION)
By: /s/ R. Gregory Lewis
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Title: Vice President and Chief
Financial Officer
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J. ALEXANDER'S RESTAURANTS, INC.
(f/k/a TOTAL QUALITY MANAGEMENT, INC.)
By: /s/ R. Gregory Lewis
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Title: Vice President - Finance
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