Document:

Exhibit 10.1

 

THIRD AMENDMENT AND WAIVER TO

AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS THIRD
AMENDMENT AND WAIVER TO AMENDED AND RESTATED CREDIT AGREEMENT, dated as of
April 22, 2008 (this “Amendment”), is made among SYMMETRY MEDICAL INC., a Delaware corporation
(the “Borrower”), certain Subsidiaries of the Borrower party hereto as
Subsidiary Guarantors, and WACHOVIA BANK,
NATIONAL ASSOCIATION (“Wachovia”), as administrative agent
for the Lenders under the Credit Agreement referenced below (in such capacity,
the “Administrative Agent”).

 

RECITALS

 

A.            The Borrower, the Subsidiary Guarantors, the Lenders, the
Administrative Agent and certain other agents are parties to an Amended and
Restated Credit Agreement, dated as of June 13, 2006 (the “Existing
Credit Agreement” and, as previously amended and as further amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), providing for the availability of certain credit facilities to
the Borrower upon the terms and conditions set forth therein.  Capitalized terms used herein without
definition shall have the meanings given to them in the Credit Agreement.

 

B.            The Borrower has notified the Administrative Agent and
the Lenders that it was unable to finalize, deliver and file its amended and
restated consolidated, audited financial statements for the 2007 fiscal year
(the “2007 Audited Financial Statements”) with the SEC in order to
become a Current Filer by April 14, 2008, as required under
Section 9.1(n) of the Credit Agreement, thereby resulting in an Event
of Default (the “Current Filer Event of Default” and, together with the
“Specified Events of Default” (as defined in the Term A-2 Loan Amendment) and
the “Specified Events of Default” (as defined in the Second Amendment and Waiver
to Amended and Restated Credit Agreement, dated March 27, 2008, by and between
the Borrower and the Administrative Agent (the “Second Amendment”),
collectively, the “Existing Events of Default”).  In addition, the Borrower has notified the
Administrative Agent and the Lenders that it will be unable to deliver its
unaudited financial statements for the fiscal quarter ending March 31,
2008 (the “March 2008 Financial Statements”), as required by
Section 6.1(a) of the Credit Agreement, on or before May 15,
2008.  The Borrower has requested that
the Required Lenders (i) waive the Existing Events of Default,
(ii) amend Section 9.1(n) of the Credit Agreement to give the
Borrower an opportunity to become a Current Filer on or before April 30,
2008 and (ii) agree that the 2007 Audited Financial Statements may be
delivered on or before April 30, 2008 and that the March 2008
Financial Statements may be delivered on or before June 30, 2008.

 

C.            The Borrower has also notified the Administrative Agent
and the Lenders that, as a result of the evaluation, investigation and analysis
arising in connection with the irregularities and review of operations related
to Sheffield, the Borrower (i) has incurred (A) a nonrecurring
write-down of the value of the Borrower’s tangible assets and/or charges
resulting in an unfavorable financial impact in excess of approximately $11.4
million and (B) nonrecurring cash fees, external costs and expenses to the
Borrower’s legal counsel, auditors and other professional advisors in connection
with the services provided by such professionals in an aggregate amount up to
approximately $7.0 million (collectively, the “Sheffield Nonrecurring Losses
and Charges”) and (ii) will be unable to comply with the financial
covenants set forth in Sections 7.1 through 7.3 of the Credit Agreement unless
the Required Lenders agree that the aggregate amount of the Sheffield
Nonrecurring Losses and Charges may be added-back to Consolidated Net Income to
determine Consolidated EBITDA (notwithstanding the limitations or restrictions
included in the definition of Consolidated EBITDA).  The Borrower has requested that the 

 

 

Required
Lenders agree that the aggregate amount of the Sheffield Nonrecurring Losses
and Charges may be added-back to Consolidated Net Income to determine
Consolidated EBITDA (notwithstanding the limitations or restrictions included
therein).

 

D.            The Administrative Agent and the Lenders have agreed to
waive the Existing Events of Default and agree to the other requested items in
accordance with, and subject to, the terms and conditions set forth herein.

 

STATEMENT
OF AGREEMENT

 

NOW,
THEREFORE, in consideration of the foregoing and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

ARTICLE I

 

LIMITED WAIVERS

 

The Borrower and, based upon
the representations and warranties contained herein and subject to the
satisfaction of the conditions precedent set forth in Article IV hereof, the Administrative
Agent and the Required Lenders hereby agree as follows:

 

1.1           Existing Events of Default.  The Required Lenders hereby waive the Existing
Events of Default, but only to the extent that no Event of Default under
Section 9.1(n) of the Credit Agreement (after giving effect to this
Amendment) ever occurs and is continuing. 
This waiver shall be effective only with regard to the Existing Events
of Default and shall not act as a waiver or consent with respect to any other
Default or Event of Default under the Credit Agreement or any other Credit
Document.

 

1.2           Consolidated EBITDA.  The Required Lenders hereby agree that the
aggregate amount of the Sheffield Nonrecurring Losses and Charges may be added
back to Consolidated Net Income to determine Consolidated EBITDA for any Reference
Period including the quarter ending December 31, 2007, provided
that the aggregate amount of such add-backs shall not exceed $18.4
million.  This waiver shall be effective
only with regard to the nonrecurring, noncash and cash losses, charges, fees, external
costs and expenses attributable to the Sheffield Nonrecurring Losses and
Charges and the Borrower shall not be permitted to add-back any other
nonrecurring, noncash or cash losses, charges, fees, external costs and
expenses to Consolidated Net Income to determine Consolidated EBITDA, including
without limitation any nonrecurring, noncash or cash losses, charges, fees,
external costs and expenses attributable to the Sheffield Nonrecurring Losses
and Charges in excess of $18.4 million, unless such losses or charges are
otherwise permitted to be added back by the definition of Consolidated
EBITDA.  The Borrower and the Required
Lenders hereby agree that this Section 1.2
shall supersede Section 1.3 of the Second Amendment and such
Section 1.3 of the Second Amendment shall have no further force and
effect.

 

1.3           2007 Audited Financials and 2008 Unaudited Financials.

 

2

 

(a)           The Required Lenders hereby agree to waive the requirement
that the Borrower deliver the 2007 Audited Financial Statements, as required by
Section 6.1(b) of the Credit Agreement, until April 30,
2008.  The Borrower acknowledges that the
failure to deliver the 2007 Audited Financial Statements that comply with
Section 6.1(b) of the Credit Agreement on or before April 30,
2008 shall result in an Event of Default. 
This waiver shall be effective only with regard to the 2007 Audited
Financial Statements and shall not act as a waiver or consent with respect to
the delivery of any other financial statements.

 

(b)           The Required Lenders hereby agree to waive the requirement
that the Borrower deliver the March 2008 Financial Statements, as required
by Section 6.1(a) of the Credit Agreement, until June 30,
2008.  The Borrower acknowledges that the
failure to deliver the March 2008 Financial Statements that comply with
Section 6.1(a) of the Credit Agreement on or before June 30,
2008 shall result in an Event of Default. 
This waiver shall be effective only with regard to the March 2008
Financial Statements and shall not act as a waiver or consent with respect to
the delivery of any other financial statements.

 

1.4           Applicable Percentage.  The Borrower hereby acknowledges and agrees
that, notwithstanding anything to the contrary, until such time as the Borrower
(i) is a Current Filer and (ii) delivers a Compliance Certificate
with respect to any fiscal quarter, as required by Section 6.2(a) of
the Credit Agreement, evidencing that as of the last day of such fiscal quarter
the Borrower’s (A) Total Leverage Ratio is less than or equal to 2.50 to
1.0, (B) Interest Coverage Ratio is greater than or equal to 5.0 to 1.0
and (C) Fixed Charge Coverage Ratio is greater than or equal to 1.1 to
1.0, (x) the applicable LIBOR Margin and Base Rate Margin at all levels
set forth in the matrix contained in the definition of Applicable Percentage
shall be increased by 0.50%, and (y) the applicable LIBOR Margin and Base
Rate Margin will be determined in accordance with Level I of definition of
Applicable Percentage (notwithstanding the actual Total Leverage Ratio).

 

ARTICLE II

 

AMENDMENTS

 

The Borrower and, based upon
the representations and warranties contained herein and subject to the
satisfaction of the conditions precedent set forth in Article IV hereof, the Administrative
Agent and the Required Lenders hereby agree as follows:

 

2.1           Defined Terms.

 

(a)           The following definition of “2007 SEC Filer” is
hereby added to Section 1.1 of the Credit Agreement in proper alphabetical
order:

 

“2007 SEC Filer” shall mean any time that the
Borrower is current in filing its quarterly and annual financial statements for
fiscal year 2007 under Section 13 and 15(d) of the Exchange Act.

 

(b)           The definition of “SEC Filer Sublimit” is hereby
amended and restated in its entirety as follows:

 

3

 

“SEC Filer Sublimit” shall mean (i) at
any time the Borrower is not a 2007 SEC Filer or a Current Filer, $15,500,000
and (ii) at any time the Borrower is a 2007 SEC Filer but not a Current
Filer, $25,500,000.

 

2.2           Financial Covenants. Section 7.1 and 7.2 of
the Credit Agreement are hereby amended and restated as follows:

 

7.1           Total
Leverage Ratio.  The Borrower will
not permit the Total Leverage Ratio as of the last day of (i) the fiscal
quarter ending December 31, 2007, to be greater than 2.5:1.0,
(ii) the fiscal quarter ending March 31, 2008, to be greater than
2.75 :1.0 and (ii) any fiscal quarter thereafter, to be greater than
2.5:1.0.

 

7.2           Interest
Coverage Ratio.  The Borrower will
not permit the Interest Coverage Ratio as of the last day of (i) the
fiscal quarter ending December 31, 2007, to be less than 5.0:1.0,
(ii) the fiscal quarter ending March 31, 2008, to be less than
4.75:1.0 and (ii) any fiscal quarter thereafter, to be less than 5.0:1.0.

 

2.3           Events of Default. 
Sections 9.1(n) and 9.1(o) of the Credit Agreement are hereby
amended and restated as follows:

 

(n)           The
Borrower is not a 2007 SEC Filer at any time on or after April 30, 2008;
or

 

(o)           The
Required Lenders reasonably determine, which determination may be made upon a
public announcement by the Borrower of estimated financial impact or on other
information obtained by them, that the accounting irregularities at Sheffield
resulted in, with respect to the financial statements for the 2007 fiscal year
and all subsequent fiscal years, any of the following: (i) a write-down of
the value of the Borrower’s tangible assets and/or charges resulting in an
unfavorable financial impact in excess of $11.4 million in the aggregate by a
material amount, (ii) an impairment charge reducing the value of the
Borrower’s consolidated goodwill in excess of $35 million in the aggregate by a
material amount, (iii) cash fees, external costs and expenses in excess of
$7.0 million in the aggregate by a material amount resulting from the
professional services provided by the Borrower’s legal counsel, auditors and
other professional advisors in connection with the irregularities and review of
operations related to Sheffield or (iv) any other adverse impact on
revenues or earnings for the 2007 fiscal year or all subsequent fiscal years in
excess of $1 million in the aggregate. 
For purposes of this Section 9.1(o) “material
amount” shall mean five percent (5%) or more.

 

4

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

To induce the Administrative
Agent (on behalf of itself and the Required Lenders) to enter into this
Amendment, each of the Borrower and the Subsidiary Guarantors represents and
warrants as follows:

 

3.1           Representations and Warranties.  After giving effect to this Amendment, each
of the representations and warranties of the Borrower and its Subsidiaries
contained in the Credit Agreement and in the other Credit Documents is true and
correct on and as of the date hereof with the same effect as if made on and as
of the date hereof (except as permitted pursuant to Section 5.24) of the
Credit Agreement and except to the extent any such representation or warranty
is expressly stated to have been made as of a specific date, in which case such
representation or warranty is true and correct as of such date).

 

3.2           No Default. 
After giving effect to this Amendment, no Default or Event of Default
has occurred and is continuing.

 

ARTICLE IV

 

EFFECTIVENESS

 

4.1           Conditions to Effectiveness.  This Amendment shall become effective as of
the date hereof upon the satisfaction of the following conditions precedent:

 

(a)           The Administrative Agent shall have duly executed
counterparts of this Amendment from each party hereto either signed on behalf
of such party or written evidence satisfactory to the Administrative Agent
(which may include telecopy transmission of a signed signature page to
this Agreement) that such party has signed a counterpart of this Amendment;

 

(b)           The Borrower shall have paid to the Administrative Agent,
for its own account and the account of each approving Lender, all fees and
expenses due in accordance with the consummation of this Amendment, including
without limitation the fees and expenses required by Section 6.4 hereof, and all other fees and expenses
required to have been paid under the Credit Agreement on or prior to the
effectiveness of this Amendment.

 

(c)           The Administrative Agent shall have received such other
documents, certificates, opinions, and instruments in connection with the
transactions contemplated hereby as it shall have reasonably requested.

 

5

 

ARTICLE V

 

AFFIRMATION OF OBLIGATIONS

 

5.1           Affirmation of Borrower and Subsidiary Guarantors.  Each of the Borrower and each of the
Subsidiary Guarantors that guaranty any or all of the Obligations under the
Existing Credit Agreement hereby approves and consents to the transactions
contemplated by this Amendment and agrees that its obligations under the
Existing Credit Agreement and the other Credit Documents to which it is a party
shall not be diminished as a result of the execution of this Amendment.  This acknowledgement by each of the Borrower
and each such Subsidiary Guarantor is made and delivered to induce the Lenders
to enter into this Amendment, and each of the Borrower and each such Subsidiary
Guarantor acknowledges that the Lenders would not enter into this Amendment in
the absence of the acknowledgements contained herein.

 

5.2           Liens.  Each
of the Borrower and each of the Subsidiary Guarantors party to the Existing
Credit Agreement hereby ratifies and confirms the grant of a security interest
in and Lien on the Collateral contained in the Security Documents to which each
is a party that were executed in connection with the Existing Credit Agreement,
which security interest and Lien shall continue in full force and effect
without interruption, and shall constitute the single grant of a security
interest and Lien.

 

ARTICLE VI

 

MISCELLANEOUS

 

6.1           Effect of Amendment.  From and after the effective date hereof, all
references to the Credit Agreement set forth in any other Credit Document or
other agreement or instrument shall, unless otherwise specifically provided, be
references to the Existing Credit Agreement as amended by this Amendment and as
it may be further amended, modified, restated or supplemented from time to
time.  This Amendment is limited as
specified and shall not constitute or be deemed to constitute an amendment,
modification or waiver of any provision of the Credit Agreement (including any
schedule or exhibit) except as expressly set forth herein.  Except as expressly amended hereby or in the
aforementioned Security Documents, the Credit Agreement and the other Credit
Documents shall remain in full force and effect in accordance with their
respective terms.

 

6.2           Credit Documents. 
The parties hereto acknowledge and agree that this Amendment is a Credit
Document for all purposes under the Credit Agreement and the other Security
Documents.

 

6.3           Governing Law. 
This Amendment shall be governed by and construed and enforced in
accordance with the laws of the State of New York.

 

6.4           Expenses. 
The Borrower agrees, on demand (i) to pay all reasonable fees and
expenses of counsel to the Administrative Agent, and (ii) to reimburse the
Administrative Agent for all reasonable out-of-pocket costs and expenses, in
each case, in connection with the preparation, negotiation, execution and
delivery of this Amendment.

 

6

 

6.5           Severability. 
To the extent any provision of this Amendment is prohibited by or
invalid under the applicable law of any jurisdiction, such provision shall be
ineffective only to the extent of such prohibition or invalidity and only in
any such jurisdiction, without prohibiting or invalidating such provision in
any other jurisdiction or the remaining provisions of this Amendment in any
jurisdiction.

 

6.6           Successors and Assigns.  This Amendment shall be binding upon, inure
to the benefit of and be enforceable by the respective successors and permitted
assigns of the parties hereto.

 

6.7           Construction. 
The headings of the various sections and subsections of this Amendment
have been inserted for convenience only and shall not in any way affect the
meaning or construction of any of the provisions hereof.

 

6.8           Counterparts; Effectiveness.  This Amendment may be executed in any number
of counterparts and by different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.  This Amendment shall become effective upon
the execution and delivery of a counterpart hereof by each of the parties
hereto.  A facsimile of a counterpart
executed by a party shall be acceptable temporary evidence of the execution by
that party of that counterpart.

 

 

 

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

 

 

 

 

 

7

 

IN WITNESS
WHEREOF, the parties hereto have caused this Amendment to be executed by their
duly authorized officers as of the date first above written.

 

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  	
   

  
	
   

  	
  SYMMETRY
  MEDICAL INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Fred L. Hite

  
	
   

  	
   

  	
  Fred L. Hite

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SUBSIDIARY
  GUARANTORS:

  
	
   

  	
   

  	
   

  
	
   

  	
  RILEY
  MEDICAL INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Fred L. Hite

  
	
   

  	
   

  	
  Fred L. Hite

  
	
   

  	
   

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  SYMMETRY
  MEDICAL EVEREST LLC

  
	
   

  	
  By:
  Symmetry Medical USA Inc., its Sole Member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Fred L. Hite

  
	
   

  	
   

  	
  Fred L. Hite

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  TNCO,
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Fred L. Hite

  
	
   

  	
   

  	
  Fred L. Hite

  
	
   

  	
   

  	
  Vice President

  

 

 

 

 

(Signatures continue on following page)

 

 

 

 

 

 

	
   

  	
  SPECIALTY
  SURGICAL INSTRUMENTATION, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Fred L. Hite

  
	
   

  	
   

  	
  Fred L. Hite

  
	
   

  	
   

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  UCA, LLC

  
	
   

  	
  By:  Symmetry Medical USA, Inc., its Sole
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Fred L. Hite

  
	
   

  	
   

  	
  Fred L. Hite

  
	
   

  	
   

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  SYMMETRY
  MEDICAL SSI REAL ESTATE LLC

  
	
   

  	
  By:  Symmetry Medical USA, Inc., its Sole
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Fred L. Hite

  
	
   

  	
   

  	
  Fred L. Hite

  
	
   

  	
   

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  SYMMETRY
  MEDICAL USA INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Fred L. Hite

  
	
   

  	
   

  	
  Fred L. Hite

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  SYMMETRY
  MEDICAL INTERNATIONAL INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Fred L. Hite

  
	
   

  	
   

  	
  Fred L. Hite

  
	
   

  	
   

  	
  Chief Financial Officer

  

 

 

 

 

(Signatures continue on following page)

 

 

 

 

 

 

	
   

  	
  METTIS
  GROUP INC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Fred L. Hite

  
	
   

  	
   

  	
  Fred L. Hite

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  ULTREXX,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Fred L. Hite

  
	
   

  	
   

  	
  Fred L. Hite

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  JET
  ENGINEERING, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Fred L. Hite

  
	
   

  	
   

  	
  Fred L. Hite

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  SMA REAL
  ESTATE, LLC

  
	
   

  	
  By:  Symmetry Medical USA Inc., its Sole Member

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Fred L. Hite

  
	
   

  	
   

  	
  Fred L. Hite

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  SYMMETRY
  MEDICAL NEW BEDFORD, LLC

  
	
   

  	
  By:  TNCO, Inc., Sole Member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Fred L. Hite

  
	
   

  	
   

  	
  Fred L. Hite

  
	
   

  	
   

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  SYMMETRY
  MEDICAL NEW BEDFORD REAL ESTATE, LLC

  
	
   

  	
  By:  TNCO, Inc., Sole Member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Fred L. Hite

  
	
   

  	
   

  	
  Fred L. Hite

  
	
   

  	
   

  	
  Vice President

  

 

 

 

 

(Signatures continue on following page)

 

 

 

 

 

	
   

  	
  WACHOVIA
  BANK, NATIONAL ASSOCIATION, as Administrative Agent
  and on behalf of the Required Lenders pursuant to written authorization

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Kirk Tesch

  
	
   

  	
   

  	
  Kirk Tesch

  
	
   

  	
   

  	
  Vice
  PresidentExhibit 10.1

 

AMENDMENT NO. 2 TO CREDIT AGREEMENT

 

THIS AMENDMENT NO. 2 TO
CREDIT AGREEMENT (this “Agreement”) is entered into as of the 17th day
of April 2008, by and among (a) REAL
MEX RESTAURANTS, INC., formerly known as Acapulco Acquisition Corp.,
a Delaware corporation (“Real Mex”), ACAPULCO
RESTAURANTS, INC.,  a
Delaware corporation (“ARI”), EL
TORITO FRANCHISING COMPANY, a Delaware corporation (“ETFI”), EL TORITO RESTAURANTS, INC., a Delaware
corporation (“ETRI”), TARV,
INC., a California corporation (“TARV”),
ACAPULCO RESTAURANT OF VENTURA, INC.,
a California corporation (“ARV”), ACAPULCO
RESTAURANT OF WESTWOOD, INC., a California corporation (“ARW”),
ACAPULCO MARK CORP., a Delaware
corporation (“AMC”), MURRAY PACIFIC,
a California corporation (“MP”), ALA
DESIGN, INC., a California corporation (“ALAD”), REAL MEX FOODS, INC., formerly known as ALA
Foods, Inc., a California corporation (“RMF”), ACAPULCO RESTAURANT OF DOWNEY, INC., a
California corporation (“ARD”), ACAPULCO
RESTAURANT OF MORENO VALLEY, INC., a California corporation (“AMV”),
EL PASO CANTINA, INC., a
California corporation (“EPC”), CKR
ACQUISITION CORP., a Delaware corporation (“CKR”), CHEVYS RESTAURANTS, LLC, a Delaware
limited liability company (“Chevys”) and each of the other Subsidiaries
of Real Mex which shall from time to time hereafter become a party hereto
pursuant to §9.18 hereof (collectively with Real Mex, ARI, ETFI, ETRI, TARV,
ARV, ARW, AMC, MP, ALAD, RMF, ARD, AMV, EPC, CKR and Chevys the “Borrowers”),
(b) lending institutions party hereto as Lenders, and (c) GENERAL ELECTRIC CAPITAL CORPORATION as agent and administrative agent (the “Agent”) for
itself and such lending institutions.

 

RECITALS

 

WHEREAS, the Borrowers,
Lenders, and Agent entered into a Second Amended and Restated Revolving Credit
Agreement, dated as of January 29, 2007 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”;
unless otherwise defined herein, capitalized terms used herein that are not
otherwise defined herein shall have the respective meanings assigned to such
terms in the Credit Agreement);

 

WHEREAS, Borrowers have
requested that the Agent and the Lenders amend certain provisions of the Credit
Agreement; and

 

WHEREAS, the Agent and
Lenders agree to such amendments upon the terms and subject to conditions set
forth herein.

 

NOW THEREFORE, in
consideration of the premises and the mutual agreements set forth, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:

 

1.             Definitions in Credit
Agreement; etc.  Unless
otherwise defined herein, terms defined in or by reference in the Credit
Agreement (as from time to time amended) are used herein as therein defined.

 

 

2.             Amendments.  The Credit Agreement is hereby amended as
follows:

 

(a)           §1.1 of the Credit Agreement
is amended by amending and restating the definition of the term “Applicable
Margin” to read in its entirety as follows:

 

Applicable Margin.  For the period commencing on March 31,
2008 through the date upon which the Agent receives the Compliance Certificate
required to be delivered for the period ending on or about June 30, 2008,
the Applicable Margin with respect to Revolving Credit Loans that are Base Rate
Loans shall be 1.25% and the Applicable Margin with respect to Eurodollar Rate
Loans and Letters of Credit shall be 2.75%. 
After the receipt of such Compliance Certificate, for each period
commencing on an Adjustment Date through the date immediately preceding the
next Adjustment Date (each a “Rate Adjustment Period”), the Applicable
Margin with respect to Revolving Credit Loans, (in each case, for Base Rate
Loans and Eurodollar Rate Loans) and for the Letters of Credit shall be the
applicable percentage set forth below with respect to each such Loan or Letter
of Credit, as the case may be, corresponding to the Borrowers’ Leverage Ratio,
as of the most recently completed fiscal quarter of the Borrowers ending
immediately prior to the applicable Rate Adjustment Period:

 

	
   

  	
   

  	
   

  	
   

  	
  Revolving Credit Loans

  	
   

  
	
  Level

  	
   

  	
  Leverage Ratio

  	
   

  	
  Base

  Rate

  Loans

  	
   

  	
  Eurodollar Rate

  Loans and

  Letters of Credit

  	
   

  
	
  I

  	
   

  	
  <
  2.00:1.00

  	
   

  	
  0.50

  	
  %

  	
  2.00

  	
  %

  
	
  II

  	
   

  	
  > 2.00:1.00
  and < 2.50:1.00

  	
   

  	
  0.75

  	
  %

  	
  2.25

  	
  %

  
	
  III

  	
   

  	
  > 2.50:1.00
  and < 3.00:1.00

  	
   

  	
  1.00

  	
  %

  	
  2.50

  	
  %

  
	
  IV

  	
   

  	
  > 3.00:1

  	
   

  	
  1.25

  	
  %

  	
  2.75

  	
  %

  

 

Notwithstanding the
foregoing, if the Borrowers fail to deliver any Compliance Certificate pursuant
to §9.4(e) hereof, then for the period commencing on the date after the
day on which such Compliance Certificate was due through the date immediately
preceding the Adjustment Date that occurs immediately following the date on
which such Compliance Certificate is delivered, the Applicable Margin shall be
that percentage corresponding to Level IV in the table above.

 

(b)           §11.1 of the Credit
Agreement is amended and restated to read in its entirety as follows:

 

11.1        Leverage
Ratio.  The Borrowers will not
permit the Leverage Ratio, determined at the end of and for any period of four
consecutive fiscal quarters of the Borrowers ending during any period, or
ending on the last day of the fiscal quarter which ends nearest to the calendar
quarter end date, described in the table below, to be greater than the ratio
set forth opposite such period in such table:

 

2

 

	
  Period

  (inclusive of end dates)

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2006 -
  December 31, 2007

  	
   

  	
  3.85
  to 1.00

  	
   

  
	
  January 1, 2008 -
  March 31, 2008

  	
   

  	
  4.00
  to 1.00

  	
   

  
	
  April 1, 2008 -
  June 30, 2008

  	
   

  	
  4.00
  to 1.00

  	
   

  
	
  July 1, 2008 and
  thereafter

  	
   

  	
  3.55
  to 1.00

  	
   

  

 

(c)           §11.2 of the Credit Agreement
is amended and restated to read in its entirety as follows:

 

11.2        Adjusted
Leverage Ratio.  The Borrowers will not
permit the Adjusted Leverage Ratio, determined at the end of and for any period
of four consecutive fiscal quarters of the Borrowers ending during any period,
or ending on the last day of the fiscal quarter which ends nearest to the
calendar quarter end date, described in the table below, to be greater than the
ratio set forth opposite such period in such table:

 

	
  Period

  (inclusive of end dates)

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2006 -
  December 31, 2007

  	
   

  	
  5.95
  to 1.00

  	
   

  
	
  January 1, 2008 -
  March 31, 2008

  	
   

  	
  6.25
  to 1.00

  	
   

  
	
  April 1, 2008 -
  June 30, 2008

  	
   

  	
  6.15
  to 1.00

  	
   

  
	
  July 1, 2008 and
  thereafter

  	
   

  	
  5.75
  to 1.00

  	
   

  

 

(d)           §11.3 of the Credit
Agreement is amended and restated to read in its entirety as follows:

 

11.3        Cash Flow
Ratio.  The Borrowers will not
permit the Cash Flow Ratio, determined for any Measurement Period ending during
any period, or ending on the last day of the fiscal quarter which ends nearest
to the calendar quarter end date, described in the table below, to be less than
the ratio set forth opposite such period in such table:

 

	
  Period

  (inclusive of end dates)

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2006 –
  June 30, 2007

  	
   

  	
  1.70
  to 1.00

  	
   

  
	
  January 1, 2008 - March 31,
  2008

  	
   

  	
  1.25
  to 1.00

  	
   

  
	
  April 1, 2008 -
  June 30, 2008

  	
   

  	
  1.50
  to 1.00

  	
   

  
	
  July 1, 2008 and
  thereafter

  	
   

  	
  1.70
  to 1.00

  	
   

  

 

3

 

For the avoidance of doubt, compliance with
the Cash Flow Ratio will not be tested for the fiscal quarters ending September 30,
2007 and December 31, 2007.

 

3.             Conditions.  This Agreement shall be effective on the
first day (the “Effective  Date”) upon which each of the following
conditions precedent have been satisfied:

 

(a)           The Agent shall have
received a counterpart signature of the Borrowers and the Lenders to this
Agreement;

 

(b)           The Borrowers shall have
paid, in immediately available funds, to the Agent for the account of the
Lenders a fully earned and non-refundable amendment fee in the amount of
$100,000;

 

(c)           All corporate action
necessary for the valid execution, delivery and performance by the Borrowers of
this Agreement shall have been duly and effectively taken, and evidence thereof
satisfactory to the Agent shall have been provided to the Agent, including
without limitation, a certificate from a duly authorized officer of such
Person, attaching a copy, certified by a duly authorized officer of such Person
to be true and complete on Effective Date, of the resolutions of such Person
authorizing this Agreement; and

 

(d)           The Agent shall have
received favorable legal opinions addressed to the Lenders and the Agent, dated
as of the Effective Date, in form and substance reasonably satisfactory to the
Agent from Morgan, Lewis & Bockius LLP, counsel to each of the
Borrowers.

 

4.             Representations and
Warranties.  The
Borrowers represent and warrant to the Lenders and the Agent as follows.

 

(a)           Except where a failure
thereof would not have a Materially Adverse Effect, the execution, delivery and
performance of this Agreement (i) is within the corporate authority of
such Person, (ii) has been duly authorized by all necessary corporate
proceedings, (iii) does not conflict with or result in any breach or
contravention of any provision of law, statute, rule or regulation to
which any of the Borrowers or any of their Subsidiaries is subject or any
judgment, order, writ, injunction, license or permit applicable to any of the
Borrowers or any of their Subsidiaries and (iv) does not conflict with any
provision of the corporate charter or bylaws of, or any agreement or other
instrument binding upon, any of the Borrowers or any of their Subsidiaries.

 

(b)           The execution and delivery
of this Agreement will result in valid and legally binding obligations of such
Person enforceable against it in accordance with the respective terms and
provisions hereof and thereof, except as enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors’ rights and except to the
extent that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding
therefor may be brought.

 

(c)           Except as set forth on Schedule
8.2 of the Credit Agreement and where a failure thereof would not have a
Materially Adverse Effect, the execution, delivery and 

 

4

 

performance by each of the Borrowers and
their Subsidiaries of this Agreement, does not require the approval or consent
of, or filing with, any governmental agency or authority other than those
already obtained.

 

(d)           Each of the representations
and warranties of any of the Borrowers and their Subsidiaries contained in the Credit
Agreement, the other Loan Documents or in any document or instrument delivered
pursuant to or in connection with the Credit Agreement shall be true as of the
date as of which they were made and shall also be true at and as of the time
and after giving effect to this Agreement, with the same effect as if made at
and as of that time (except to the extent of changes resulting from
transactions contemplated or permitted by the Credit Agreement and the other
Loan Documents 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 relate expressly to an earlier date) and
except for the Specified Default no Default or Event of Default shall have
occurred and be continuing.

 

5.             Execution in Counterparts.  This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which when taken together shall constitute
but one and the same instrument.

 

6.             Continuing Effect of the
Credit Agreement.  Except as
expressly set forth herein, this Agreement shall not by implication or
otherwise limit, impair, constitute a waiver of, or otherwise affect the rights
and remedies of the Lenders, the Agents or the Borrowers under the Credit
Agreement and shall not alter, modify, amend or in any way affect any of the
terms, conditions, obligations, covenants or agreements contained in the Credit
Agreement, all of which are ratified and affirmed in all respects and shall
continue in full force and effect. 
Nothing herein shall be deemed to entitle the Borrowers to a consent to,
or a waiver, amendment, modification or other change of, any of the terms,
conditions, obligations, covenants or agreements contained in the Credit
Agreement in similar or different circumstances.  This Agreement shall apply and be effective
only with respect to the provisions of the Credit Agreement specifically
referred to herein.  After the
effectiveness of this Agreement, any reference to the Credit Agreement shall
mean the Credit Agreement as amended and modified hereby.

 

7.             Applicable Law.  THIS AGREEMENT IS A CONTRACT UNDER THE LAWS
OF THE STATE OF ILLINOIS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF SAID STATE OF ILLINOIS (EXCLUDING THE LAWS
APPLICABLE TO CONFLICTS OR CHOICE OF LAW).

 

8.             Headings.  Headings herein are include herein for
convenience of reference only and shall not constitute a part hereof for any
other purpose or be given any substantive effect.

 

9.             Loan Document.  This Agreement shall constitute a Loan
Document.

 

5

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

6

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized
as of the date first written above.

 

	
   

  	
  REAL MEX RESTAURANTS, INC.

  
	
   

  	
  ACAPULCO RESTAURANTS, INC.

  
	
   

  	
  EL TORITO FRANCHISING COMPANY

  
	
   

  	
  EL TORITO RESTAURANTS, INC.

  
	
   

  	
  TARV, INC.

  
	
   

  	
  ACAPULCO RESTAURANT OF VENTURA,

  
	
   

  	
  INC.

  
	
   

  	
  ACAPULCO RESTAURANT OF

  WESTWOOD, INC.

  
	
   

  	
  ACAPULCO MARK CORP.

  
	
   

  	
  MURRAY PACIFIC

  
	
   

  	
  ALA DESIGN, INC.

  
	
   

  	
  REAL MEX FOODS, INC.

  
	
   

  	
  ACAPULCO RESTAURANT OF DOWNEY,

  
	
   

  	
  INC.

  
	
   

  	
  ACAPULCO RESTAURANT OF MORENO

  VALLEY, INC.

  
	
   

  	
  EL
  PASO CANTINA, INC.

  
	
   

  	
  CKR ACQUISITION CORP.

  
	
   

  	
  CHEVYS
  RESTAURANTS, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven L. Tanner

  
	
   

  	
  Name:

  	
  Steven L. Tanner

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  

 

SIGNATURE PAGE TO

AMENDMENT NO. 2
TO CREDIT AGREEMENT

 

 

	
   

  	
  GENERAL ELECTRIC CAPITAL

  
	
   

  	
  CORPORATION, as Agent and sole
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas Moro

  
	
   

  	
  Name:

  	
  Thomas Moro

  
	
   

  	
  Title:

  	
  Authorized Signatory

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