Exhibit 10.1

FOURTH AMENDMENT TO CREDIT AGREEMENT

 

Parties:

   “LaSalle”:    LaSalle Bank, National Association       370 Seventeenth Street
      Suite 3590       Denver, CO 80202    “Borrower”:   

Champps Operating Corporation

10375 Park Meadows Drive, Suite 560

Littleton, Colorado 80124

   “Syndication Parties”:    Whose signatures appear below Execution Date:   
October 5, 2006

Recitals:

A. LaSalle (in its capacity as the Administrative Agent (“Agent”) and as a
Syndication Party) and Borrower have entered into that certain Credit Agreement
(Revolving Loan and Term Loans) dated as of March 16, 2004, that First Amendment
to Credit Agreement dated as of November 29, 2005 (“First Amendment”), that
Second Amendment to Credit Agreement dated as of June 13, 2006 (“Second
Amendment”), and that Third Amendment to Credit Agreement dated as of August 14,
2006 (“Third Amendment”) (as amended and as further amended, modified, or
supplemented from time to time, the “Credit Agreement”) pursuant to which
LaSalle and any entity which becomes a “Syndication Party” has extended certain
credit facilities to Borrower under the terms and conditions set forth in the
Credit Agreement.

B. Borrower has requested that the Agent and the Syndication Parties extend the
Maturity Date, incorporate the mechanics for a possible additional loan in the
future, and make certain other revisions to the Credit Agreement, which the
Agent and the Syndication Parties are willing to do under the terms and
conditions as set forth in this Fourth Amendment to Credit Agreement (“Fourth
Amendment”).

Agreement:

Now, therefore, in consideration of the mutual covenants and agreements herein
contained and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Amendments to Credit Agreement. The Credit Agreement is amended as of the
Effective Date as follows:

1.1 The following Sections of Article 1 are amended to read as follows:

1.5 Aggregate LC Commitment: shall be $7,000,000.00.

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1.6 Aggregate 3-Year Commitment: shall be $25,000,000.00, subject to increase as
provided in Section 2.9 hereof and to reduction as provided in Section 2.8
hereof.

1.20 Commitment Fee Factor: means the Commitment Fee Factor, set forth as basis
points, determined from time to time as provided in Section 4.6 hereof.

1.43 Individual 3-Year Commitment: means with respect to any Syndication Party,
the amount shown as its Individual 3-Year Commitment on Schedule 1 hereto,
subject to adjustment in the event of the sale of all or a portion of a
Syndication Interest in accordance with Section 13.25 hereof, or an increase (as
provided in Section 2.9 hereof) or decrease (as provided in Section 2.8 hereof)
in the Aggregate 3-Year Commitment.

1.62 Notes: means the 3-Year Notes and the Discretionary Notes.

1.82 3-Year Loan or Loans: means the loan or loans (including Base Rate Loans
and LIBO Rate Loans, and including the Discretionary Loan) represented by 3-Year
Advances made under the 3-Year Facility pursuant to this Credit Agreement.

1.83 3-Year Maturity Date: means September 30, 2010.

1.2 The following defined terms are added to the list immediately following
Section 1.85:

 

Discretionary Loan    Section 2.9 Discretionary Loan Date    Section 2.9
Discretionary Note    Section 2.9

1.3 Section 2.3 is amended to read as follows:

2.3 Promissory Notes. Borrower’s obligations to each Syndication Party under the
3-Year Loan, including Borrower’s payment obligations with respect to all 3-Year
Advances made by each Syndication Party shall be evidenced by, and repaid with
interest in accordance with, a promissory note of Borrower, in substantially the
form of Exhibit 2.3 hereto, duly completed, in the stated maximum principal
amount equal to such Syndication Party’s Individual 3-Year Commitment, payable
to such Syndication Party for the account of its Applicable Lending Office, and
maturing as to principal on the 3-Year Maturity Date (each a “3-Year Note” and
collectively, the “3-Year Notes”). For the purposes of

 

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Subsections 4.1.1 and 4.4.2, and Section 5.3 hereof, the terms 3-Year Note or
3-Year Notes include the Discretionary Note and the Discretionary Notes.

1.4 Section 2.5 is amended to read as follows:

2.5 Use of Proceeds. The proceeds of the 3-Year Loan will be used by Borrower
(a) to repay, in full, the outstanding balance of the Indebtedness described on
Exhibit 2.5 hereto (“Existing Refinance Debt”); (b) to fund operating costs and
for other working capital purposes; (c) to fund draws on the Letters of Credit;
(d) to repay the Subordinated Debt evidenced by those certain 5.5% Convertible
Subordinated Notes due 2007 issued by Borrower on December 16, 2002; and (e) to
fund acquisitions permitted under Section 10.7 hereof. Borrower agrees not to
request or use such proceeds for any other purpose. Borrower will not, directly
or indirectly, use any part of such proceeds for the purpose of purchasing or
carrying any “margin stock” within the meaning of Regulation U of the Board of
Governors or to extend credit to any Person for the purpose of purchasing or
carrying any such margin stock.

1.5 Section 2.7 is amended, and a new Section 2.9 is added, in each case,
reading as follows:

2.7 [INTENTIONALLY OMITTED]

2.9 Discretionary Loan. Upon the written request of Borrower, provided to the
Administrative Agent, received between September 30, 2007 and December 31, 2007,
the Syndication Parties will consider a one time increase in the Aggregate
Commitment of up to $10,000,000.00 (“Discretionary Loan”), subject to the
following provisions and conditions: (a) it will be solely at the discretion of
the Syndication Parties and the Administrative Agent whether or not to extend
the Discretionary Loan, and nothing in this Section 2.9 shall be taken as a
commitment to extend the Discretionary Loan; (b) if the Discretionary Loan is
granted, the increase in the Aggregate Commitment will take effect on a date
determined by the Administrative Agent, but no later than March 31, 2008
(“Discretionary Loan Date”); (c) principal on the Discretionary Loan will be
payable in full on the 3-Year Maturity Date and as provided in Section 5.4
hereof, and interest will be payable as provided in Sections 5.2 and 5.4 hereof;
(d) Borrower shall execute one or more promissory notes in the aggregate
principal amount equal to the amount of the Discretionary Loan (each a
“Discretionary Note” and collectively, the “Discretionary Notes”); (e) Borrower
shall execute such Security Documents, or amendments to existing Security
Documents, as the Administrative Agent shall require in order that Borrower’s
obligations under the Discretionary Loan and the Discretionary Notes are secured
by all of the Collateral; (f) Borrower shall provide to the

 

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Administrative Agent an endorsement to each of the Title Policies, to include
the amount of the Discretionary Loan and to bring the effective date thereof
forward to the Discretionary Loan Date; (g) the Individual 3-Year Commitment of
each of the Syndication Parties will be increased in a pro rata amount (based on
their respective Individual 3-Year Commitments prior to the effective date of
the Discretionary Loan) to allocate the amount of the Discretionary Loan among
each of them, and, unless the Syndication Parties unanimously agree on a
different allocation, each must agree to such increase in their Individual
3-Year Commitments; (h) each Advance under the Discretionary Loan will be
treated as, and be deemed to be, a 3-Year Advance and be made as provided in,
and be subject to, Sections 2.1, 2.2, 2.4, 2.5, and 2.6, hereof; and
(i) Borrower shall take such other action and execute such other documents as
the Administrative Agent shall reasonably require.

1.6 Subsections 4.5.1 and 4.5.5 are amended to read as follows:

4.5.1 Unused 3-Year Commitment Fee. A fee for each day during the 3-Year
Availability Period (“Unused 3-Year Commitment Fee”) payable in arrears by the
tenth calendar day following the close of each Quarter (and on the 3-Year
Maturity Date), determined for each day during such Quarter by (a) multiplying
the Commitment Fee Factor (expressed as a daily rate on the basis of a year of
360 days) times (b) the difference between the Aggregate Commitment and the
outstanding principal balance owing under the 3-Year Loans (including the
outstanding principal balance owing under the Discretionary Loans, if any) as of
the close of the Administrative Agent’s business on such day. The Unused 3-Year
Commitment Fee shall be payable by Borrower to the Administrative Agent, and the
Administrative Agent shall distribute the Unused 3-Year Commitment Fee to the
Syndication Parties based on their Individual 3-Year Pro Rata Shares.

4.5.5 Origination Fee. A one-time, non-refundable, fee in the amount of the Loan
Origination Fee, such fee to be paid by Borrower to the Administrative Agent on
the Closing Date, for distribution to the Persons who are Syndication Parties on
such date proportionately according to their respective Individual Sharing
Percentage on such date.

1.7 Section 4.6 and the pricing grid set forth in Section 4.6 are revised to
read as follows:

4.6 LIBOR Margin; Base Rate Margin; Commitment Fee Factor. The LIBOR Margin, the
Base Rate Margin, and the Commitment Fee Factor shall be determined pursuant to
the table below (expressed in basis points) based on the ratio of the
Consolidated Entities’ Total Funded Debt to EBITDA (“Debt/EBITDA Ratio”) as of
the immediately preceding Fiscal Quarter end. No later than the time required
under Subsection 9.2.2, Borrower shall provide the Administrative Agent with a

 

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Compliance Certificate signed by a Responsible Officer of Borrower reporting,
and showing in detail the calculation of, the Debt/EBITDA Ratio as of such
Fiscal Quarter end (among other items). Subject to any corrections to such
Compliance Certificate required by the Administrative Agent based on an audit
thereof, the LIBOR Margin, Base Rate Margin, and the Commitment Fee Factor shall
be set effective as of the date of the Administrative Agent’s receipt of such
Compliance Certificate. In the event the Administrative Agent does not receive
such Compliance Certificate on or before the deadline therefor pursuant to
Subsection 9.2.2, the LIBOR Margin, Base Rate Margin, and the Commitment Fee
Factor shall be set effective as of such deadline at Pricing Tier I until five
(5) Banking Days after such Compliance Certificate is received. No LIBOR
interest rate spread adjustments will be made to any LIBO Rate Loans during the
LIBOR Rate Period therefor. The initial LIBOR Margin, Base Rate Margin, and
Commitment Fee Factor shall be determined on the basis of the Closing Compliance
Certificate which shall be delivered by Borrower at least three (3) Banking Days
prior to the initial 3-Year Advance, and any failure to deliver such required
Closing Compliance Certificate by Borrower shall result in the application of
Pricing Tier I below.

 

Pricing Tier

  

Total Funded Debt/
EBITDA

   LIBOR Margin    Base Rate Margin    Commitment Fee Factor

I

  

> 2.5:1

   +300.0 bps    +50.0 bps    50 bps

II

  

>2.0:1 £ 2.5:1

   +250.0 bps    +25.0 bps    50 bps

III

  

>1.0:1 £ 2.0:1

   +200.0 bps    0.0 bps    37.5 bps

IV

  

£ 1.0:1

   +175.0 bps    0.0 bps    37.5 bps

1.8 Subsection 9.12.4 is deleted in its entirety.

1.9 Section 10.1 is hereby amended to read as follows:

10.1 Borrowing. Borrower shall not, nor shall Borrower permit any Subsidiary of
Borrower to, create, incur, assume or permit to exist, directly or indirectly,
any Indebtedness, except for: (a) Indebtedness of Borrower arising under this
Credit Agreement and the other Loan Documents; (b) the GE Indebtedness;
(c) Indebtedness, in the maximum amount outstanding at any time of
$5,000,000.00, maturing in no less than five (5) years and incurred solely for
the purposes of purchasing fee interests in real estate on which is located a
restaurant which Borrower is operating at that time under a leasehold interest
in such real estate; (d) other Indebtedness arising out of Operating Leases in a
maximum total value of minimum lease payments due and payable within one year of
$25,000,000.00; (e) Indebtedness incurred to refinance Subordinated Debt,
provided that such refinance Indebtedness is itself Subordinated Debt; and
(f) other Indebtedness with maturities of not more than one (1) year, including,
without limitation, Indebtedness arising under guarantees permitted under
Section 10.5 hereof and Indebtedness arising

 

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under Capital Leases, in a maximum aggregate amount of principal outstanding at
any time under such Capital Leases of $5,000,000.00.

1.10 Subsection 10.10.2 is hereby amended to read as follows:

10.10.2 Payments by Parent. Parent shall not, without the prior written consent
of all of the Syndication Parties (which they may grant or withhold in their
discretion) directly or indirectly, declare or pay any dividends (other than
dividends payable solely in stock of Parent) on account of any shares of any
class (including common or preferred stock) of its capital stock now or
hereafter outstanding, or set aside or otherwise deposit or invest any sums for
such purpose, or redeem, retire, defease, purchase or otherwise acquire any
shares of any class of its capital stock (or set aside or otherwise deposit or
invest any sums for such purpose) for any consideration other than common stock
or apply or set apart any sum, or make any other distribution (by reduction or
capital or otherwise) in respect of any such shares or agree to do any of the
foregoing; provided that if no Potential Default or Event of Default shall exist
before and after giving effect thereto, Parent may pay dividends, or redeem
stock, so long as Borrower has caused Parent to provide to the Administrative
Agent written notice of Parent’s intention to do so at least thirty (30) days
prior to Parent declaring, setting aside, or paying any such dividends,
accompanied by a proforma Compliance Certificate showing that, after giving
effect to the payment of such dividends, Borrower will be, on a consolidated
basis with the other Consolidated Entities, in compliance with each of the
financial covenants set forth in Subsections 9.12.1, 9.12.2, and 9.12.3 hereof
by a margin of at least .25 to 1.00, and Borrower will be in compliance with
Subsection 9.12.4 hereof; provided further that (a) the aggregate amount of such
dividends and stock redemptions shall not exceed $2,000,000.00 during any Fiscal
Year with respect to which Borrower’s Senior Debt to EBITDA is equal to or more
than 1.00 to 1.00 on a historic and/or proforma basis.

1.11 Section 10.13 is amended to read as follows:

10.13 Opening Restaurants. Neither Parent nor Borrower shall, nor shall Borrower
permit any Subsidiary of Borrower to, open more than eight (8) restaurants to be
operated by Parent, Borrower and/or any such Subsidiary during any Fiscal Year,
commencing with the Fiscal Year beginning in 2006. In addition, neither Parent
nor Borrower shall, nor shall Borrower permit any Subsidiary of Borrower to,
open any restaurant to be operated by Parent, Borrower and/or any such
Subsidiary until notice thereof, in accordance with Section 9.2.11 hereof, has
been provided.

2. Conditions to Effectiveness of this Fourth Amendment. The effectiveness of
this Fourth Amendment is subject to satisfaction, in the Administrative Agent’s

 

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sole discretion, of each of the following conditions precedent (the date on
which all such conditions precedent are so satisfied shall be the “Effective
Date”):

2.1 Delivery of Executed Loan Documents. Borrower shall have delivered to the
Administrative Agent, for the benefit of, and for delivery to, the
Administrative Agent and the Syndication Parties, the following documents, each
duly executed by Borrower and any other party thereto:

A. This Fourth Amendment.

B. Acknowledgement and Agreement of both Guarantors.

2.2 Representations and Warranties. The representations and warranties of
Borrower in the Credit Agreement shall be true and correct in all material
respects on and as of the Effective Date as though made on and as of such date.

2.3 No Event of Default. No Event of Default shall have occurred and be
continuing under the Credit Agreement as of the Effective Date of this Fourth
Amendment.

2.4 Payment of Fees and Expenses. Borrower shall have paid the Administrative
Agent, by wire transfer of immediately available federal funds (a) all fees
presently due under the Credit Agreement (as amended by this Fourth Amendment);
and (b) all expenses owing as of the Effective Date pursuant to Section 14.1 of
the Credit Agreement, including Agent’s costs and legal fees incurred in
connection with the negotiation, preparation, and execution of this Fourth
Amendment.

3. General Provisions.

3.1 No Other Modifications. The Credit Agreement, as expressly modified herein,
shall continue in full force and effect and be binding upon the parties thereto.

3.2 Successors and Assigns. This Fourth Amendment shall be binding upon and
inure to the benefit of Borrower, Agent, and the Syndication Parties, and their
respective successors and assigns, except that Borrower may not assign or
transfer its rights or obligations hereunder without the prior written consent
of all the Syndication Parties.

3.3 Definitions. Capitalized terms used, but not defined, in this Fourth
Amendment shall have the meaning set forth in the Credit Agreement.

3.4 Severability. Should any provision of this Fourth Amendment be deemed
unlawful or unenforceable, said provision shall be deemed several and apart from
all other provisions of this Fourth Amendment and all remaining provision of
this Fourth Amendment shall be fully enforceable.

3.5 Governing Law. To the extent not governed by federal law, this Fourth
Amendment and the rights and obligations of the parties hereto shall be

 

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governed by, interpreted and enforced in accordance with the laws of the State
of Colorado.

3.6 Headings. The captions or headings in this Fourth Amendment are for
convenience only and in no way define, limit or describe the scope or intent of
any provision of this Fourth Amendment.

3.7 Counterparts. This Fourth Amendment may be executed by the parties hereto in
separate counterparts, each of which, when so executed and delivered, shall be
an original, but all such counterparts shall together constitute one and the
same instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
Copies of documents or signature pages bearing original signatures, and executed
documents or signature pages delivered by a party by telefax, facsimile, or
e-mail transmission of an Adobe® file format document (also known as a PDF file)
shall, in each such instance, be deemed to be, and shall constitute and be
treated as, an original signed document or counterpart, as applicable. Any party
delivering an executed counterpart of this Fourth Amendment by telefax,
facsimile, or e-mail transmission of an Adobe® file format document also shall
deliver an original executed counterpart of this Fourth Amendment, but the
failure to deliver an original executed counterpart shall not affect the
validity, enforceability, and binding effect of this Fourth Amendment.

[Signatures to follow on next page.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Fourth Amendment to be
executed as of the Effective Date.

 

ADMINISTRATIVE AGENT:     LaSalle Bank, National Association      

By:

  /s/ Darren L. Lemkau       Name:   Darren L. Lemkau       Title:   Senior Vice
President

 

BORROWER:     Champps Operating Corporation      

By:

  /s/ David D. Womack       Name:   David D. Womack       Title:   Chief
Financial Officer

 

SYNDICATION PARTIES:     LaSalle Bank, National Association      

By:

  /s/ Darren L. Lemkau       Name:   Darren L. Lemkau       Title:   Senior Vice
President

 

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ACKNOWLEDGMENT AND AGREEMENT OF GUARANTOR

CHAMPPS ENTERTAINMENT, INC. (“Guarantor”) as guarantor of the indebtedness of
Champps Operating Corporation (“Borrower”) to LaSalle Bank, National Association
(“LaSalle”) and the other Syndication Parties as defined above (collectively
with LaSalle, the “Lenders”) to that certain Credit Agreement (as defined in
this Fourth Amendment) pursuant to a Guaranty (“Guaranty”) dated as of March 16,
2004, to induce the Lenders to execute the Fourth Amendment, (a) consents to the
terms and Borrower’s execution of the Fourth Amendment; (b) reaffirms
Guarantor’s obligations to the Lenders pursuant to the terms of the Guaranty and
agrees that (i) Borrower’s execution of this Fourth Amendment shall not relieve
such Guarantor of liability under the Guaranty, and (ii) the Discretionary Loan
(as defined in the Credit Agreement), if extended by the Lenders, in their
discretion, to the Borrower in the future, will be covered under the Guaranty as
a Guaranteed Obligation (as defined therein); and (c) acknowledges and agrees
that the Lenders may amend, restate, extend, renew or otherwise modify the
Credit Agreement and any indebtedness of Borrower thereunder and any agreement
of Borrower executed in connection with the Credit Agreement, or enter into any
agreement or extend any additional or other credit accommodations, without
notifying or obtaining the consent of the undersigned and without impairing the
liability of the undersigned under the Guaranty, all notwithstanding that
Guarantor was asked to execute this Acknowledgment and Agreement.

Dated: October 5, 2006

 

Champps Entertainment, Inc. By:   /s/ David D. Womack Name:   David D. Womack
Title:   Chief Financial Officer

 

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ACKNOWLEDGMENT AND AGREEMENT OF GUARANTOR

CHAMPPS ENTERTAINMENT OF TEXAS, INC. (“Guarantor”) as guarantor of the
indebtedness of Champps Operating Corporation (“Borrower”) to LaSalle Bank,
National Association (“LaSalle”) and the other Syndication Parties as defined
above (collectively with LaSalle, the “Lenders”) to that certain Credit
Agreement (as defined in this Fourth Amendment) pursuant to a Guaranty
(“Guaranty”) dated as of March 16, 2004, to induce the Lenders to execute the
Fourth Amendment, (a) consents to the terms and Borrower’s execution of the
Fourth Amendment; (b) reaffirms Guarantor’s obligations to the Lenders pursuant
to the terms of the Guaranty and agrees that (i) Borrower’s execution of this
Fourth Amendment shall not relieve such Guarantor of liability under the
Guaranty, and (ii) the Discretionary Loan (as defined in the Credit Agreement),
if extended by the Lenders, in their discretion, to the Borrower in the future,
will be covered under the Guaranty as Guaranteed Obligation (as defined
therein); and (c) acknowledges and agrees that the Lenders may amend, restate,
extend, renew or otherwise modify the Credit Agreement and any indebtedness of
Borrower thereunder and any agreement of Borrower executed in connection with
the Credit Agreement, or enter into any agreement or extend any additional or
other credit accommodations, without notifying or obtaining the consent of the
undersigned and without impairing the liability of the undersigned under the
Guaranty, all notwithstanding that Guarantor was asked to execute this
Acknowledgment and Agreement.

Dated: October 5, 2006

 

Champps Entertainment of Texas, Inc. By:   /s/ Amy Adams Name:   Amy Adams
Title:   President

 

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