Document:

Exhibit 10.2

 

Exhibit 10.2

AMENDMENT NO. 5 TO AMENDED AND

RESTATED CREDIT AGREEMENT

     This AMENDMENT NO. 5 TO AMENDED AND RESTATED CREDIT AGREEMENT (this
“Amendment No. 5”), dated as of October 13, 2004 and effective as of the
Amendment Effective Date (as defined below), is made among GENCORP INC., an
Ohio corporation (the “Borrower”), DEUTSCHE BANK TRUST COMPANY AMERICAS,
for itself, as a Lender and as Administrative Agent for the Lenders (the
“Administrative Agent”), and the other Lenders signatory to the
hereinafter defined Credit Agreement.

RECITALS

     A. The Administrative Agent, the Lenders and the Borrower are party to
that certain Amended and Restated Credit Agreement dated as of December 28,
2000 and amended and restated as of October 2, 2002 (as amended by that certain
Amendment No. 1 to Amended and Restated Credit Agreement and Limited Waiver and
Consent dated as of July 29, 2003 (“Amendment No. 1”), that certain
Amendment No. 2 to Amended and Restated Credit Agreement dated as of August 25,
2003 (“Amendment No. 2”), that certain Amendment No. 3 to Amended and
Restated Credit Agreement and Limited Waiver dated as of December 31, 2003
(“Amendment No. 3”), and that certain Amendment No. 4 to Amended and
Restated Credit Agreement, Consent and Waiver dated as of August 30, 2004
(“Amendment No. 4”), (collectively with Amendment No. 1, Amendment No.
2, Amendment No. 3 and Amendment No. 4, and as further amended, restated,
supplemented or otherwise modified from time to time, the “Credit
Agreement”).

     B. On and subject to the terms and conditions hereof, the Administrative
Agent, the Lenders and the Borrower wish to amend certain provisions of the
Credit Agreement as set forth herein, all subject to the express terms and
conditions specified in this Amendment No. 5.

     C. This Amendment No. 5 shall constitute a Loan Document and these
Recitals shall be construed as part of this Amendment No. 5; capitalized terms
used herein without definition are so used as defined in the Credit Agreement.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the parties hereto agree as follows:

     1. Amendments to Credit Agreement. On the Amendment Effective
Date, the Credit Agreement is hereby amended as follows:

     (a) Section 4.4(d) of the Credit Agreement shall be amended by
deleting the last five sentences of such subsection in their entirety and
inserting the following sentences in lieu thereof:

“Furthermore, notwithstanding anything to the contrary in
this Section 4.4(d), upon receipt thereof, subject to
the provisions of this subsection, an amount equal to 100%
of the Net Sale Proceeds of the Automotive Business Sale
shall be made available to the Borrower and applied, in
part, on the date of receipt thereof, as follows: (A) the
Borrower shall repay,

 

 

pro rata, the outstanding Revolving Loans (without a
permanent reduction of the Revolving Commitments) pursuant
to Section 4.5(a), and (B) the Borrower shall deposit
$70,000,000 of such Net Sale Proceeds (the “Retained
Amount”) into a designated account of the Borrower at a
domestic office of one of the Lenders (the “Retained
Proceeds Account”). The Retained Amount shall not be
withdrawn from the Retained Proceeds Account by the Borrower
except as provided in the last sentence hereof. Amounts
held in the Retained Proceeds Account shall be pledged to
the Lenders and held as cash collateral on behalf of all of
the Lenders by the Lender with which the Retained Proceeds
Account is established (and such Lender shall act as
collateral sub-agent for the Collateral Agent in accordance
with this Agreement). The Retained Amount shall be invested
solely in Cash and Cash Equivalents. Notwithstanding
anything in this Agreement to the contrary, including,
without limitation Section 12.1(a), amounts held in
the Retained Proceeds Account shall not be released from
such account, other than strictly in accordance with the
following sentence. On or prior to March 1, 2005 (the
“Approval Date”) the Borrower shall be required to
obtain approval for the use of an amount equal to 100% of
the Net Sale Proceeds (except that no such approval shall be
required to the extent the Borrower shall use such amount to
prepay, on a pro rata basis, first, the Term Loans
and second, the Revolving Loans, all in accordance
with the terms and procedures set forth in this Section
4.4(d)) as follows: (i) with respect to $20,000,000 or
less of the Net Sale Proceeds, such amount may be released
from the Retained Proceeds Account on or prior to the
Approval Date for any purpose with the consent of 75% of the
Lenders (other than Defaulting Lenders), and (ii) with
respect to more than $20,000,000 of the Net Sales Proceeds,
such amount may be released from the Retained Proceeds
Account on or prior to the Approval Date for any purpose
with the consent of 100% of the Lenders (other than
Defaulting Lenders).”

     (b) Section 5.1 of the Credit Agreement shall be amended by deleting
the last paragraph thereof in its entirely and inserting the following in
lieu thereof:

     “Notwithstanding anything in this Agreement to the
contrary, on or prior to the Approval Date and subject to
the terms of Section 4.4(d) relating thereto, the
Borrower hereby agrees and acknowledges that at any time as
the Borrower shall have $50,000,000 or more of aggregate
cash or liquid investments on hand (including, without
limitation, cash or investments held in the Retained
Proceeds Account), the Borrower shall not request a
Borrowing of any Revolving Loan hereunder and the Revolving
Lenders shall not be obligated to make any such Revolving
Loan to the Borrower; provided however that
the Borrower may request the issuance of Letters of Credit
in accordance with the terms of this Agreement, and
provided further however that the
Borrower may on or prior to the Approval Date request a
Borrowing of Revolving Loans hereunder in order to repay, on
a pro rata basis, first, the Term Loans and

2

 

second, the Revolving Loans, all in accordance
with the terms and procedures set forth in Section
4.4(d), so long as such Borrowing is in compliance in
all respects with this Agreement and so long as the amount
of such requested Borrowing does not exceed the amount of
Revolving Loans repaid by the Borrower from the Net Sale
Proceeds of the Automotive Business Sale pursuant to
Section 4.4(d)(A). At any such time, prior to the
Approval Date, that the Borrower shall request a Borrowing
of any Revolving Loan, the Borrower shall be required, in
connection with such request, to represent and warrant to
the Administrative Agent and the Lenders that the Borrower
has on hand less than $50,000,000 of aggregate cash and
liquid investments or is otherwise in compliance with this
provision. Further, notwithstanding anything in this
Agreement to the contrary, including, without limitation
Section 12.1(a), this paragraph may not be amended,
modified or waived without the consent of the Required
Lenders and the consent of 100% of the Revolving Lenders
(other than, in each case, Defaulting Lenders).”

     2. Representations and Warranties. As of the date hereof, the
Borrower hereby represents and warrants to the Administrative Agent and the
Lenders as follows:

     (a) After giving effect to this Amendment No. 5 (i) no Unmatured
Event of Default or Event of Default shall have occurred or be continuing
and (ii) the representations and warranties of the Borrower contained in
the Loan Documents shall each be true and correct in all material
respects at and as of the date hereof to the same extent as though made
on and as of such date, except to the extent such representations and
warranties expressly relate to an earlier date in which event such
representation and warranties shall be true and correct as of such
specified date.

     (b) The execution, delivery and performance, as the case may be, by
the Borrower of this Amendment No. 5 and the other Loan Documents and
transactions contemplated hereby are within the Borrower’s corporate
powers, have been duly authorized by all necessary corporate action
(including, without limitation, all necessary shareholder approvals) of
the Borrower, shall have received all necessary governmental approvals,
and do not and will not contravene or conflict with any provision of law
applicable to the Borrower, the certificate or articles of incorporation
or bylaws of the Borrower, or any order, judgment or decree of any court
or other agency of government or any contractual obligation binding upon
the Borrower. No authorization or approval or other action by, and no
notice to or filing or registration with, any governmental authority or
other Person is required in connection with the execution, delivery and
performance of this Amendment No. 5 or the transactions contemplated
herein, other than those obtained and in full force and effect.

     (c) Each of this Amendment No. 5, the Credit Agreement and any other
Loan Document is the legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with its respective terms,
except to the extent enforceability is limited by bankruptcy, insolvency
or similar laws affecting the rights of creditors generally or by
application of general principles of equity.

3

 

     (d) On the Amendment Effective Date, each of the Borrower and the
Subsidiary Guarantors is a duly organized and validly existing entity in
good standing in its jurisdiction of incorporation or formation.

     3. Conditions. This Amendment No. 5 shall become effective as of
August 30, 2004 (the “Amendment Effective Date”); provided, that
the Administrative Agent shall have received: (a) counterparts of this
Amendment No. 5 duly executed by the Borrower, the Subsidiary Guarantors, the
Administrative Agent and the percentage of Lenders required by the Credit
Agreement with respect to each amendment set forth herein; and (b) from the
Borrower all fees and expenses of legal counsel due and payable pursuant to
Section 12.4 of the Credit Agreement (to the extent then invoiced).

     4. Affirmation of Subsidiary Guarantors. By its signature set
forth below, each Subsidiary Guarantor hereby confirms to the Administrative
Agent and the Lenders that, after giving effect to this Amendment No. 5 and the
transactions contemplated hereby, the Subsidiary Guaranty of such Subsidiary
Guarantor and each other Loan Document to which such Subsidiary Guarantor is a
party continues in full force and effect and is the legal, valid and binding
obligation of such Subsidiary Guarantor, enforceable against such Subsidiary
Guarantor in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, or similar laws affecting the enforcement
of creditors’ rights generally or by equitable principles relating to
enforceability.

     5. Successors and Assigns. This Amendment No. 5 shall be binding
on and shall inure to the benefit of the Borrower, the Administrative Agent,
the Lenders and their respective successors and assigns; provided that the
Borrower may not assign its rights, obligations, duties or other interests
hereunder without the prior written consent of the Administrative Agent and the
Lenders. The terms and provisions of this Amendment No. 5 are for the purpose
of defining the relative rights and obligations of the Borrower, the
Administrative Agent and the Lenders with respect to the transactions
contemplated hereby and there shall be no third party beneficiaries of any of
the terms and provisions of this Amendment No. 5.

     6. Entire Agreement. This Amendment No. 5, the Credit Agreement
(as amended hereby) and the other Loan Documents constitute the entire
agreement of the parties with respect to the subject matter hereof.

     7. Incorporation of Credit Agreement. The provisions contained in
Sections 12.4, 12.9 and 12.10 of the Credit Agreement are incorporated herein
by reference to the same extent as if reproduced herein in their entirety with
respect to this Amendment No. 5.

     8. Amendment; Waiver. The parties hereto agree and acknowledge
that nothing contained in this Amendment No. 5 in any manner or respect limits
or terminates any of the provisions of the Credit Agreement or any of the other
Loan Documents other than as amended as expressly set forth herein, and further
agree and acknowledge that the Credit Agreement (as amended hereby) and each of
the other Loan Documents remain and continue in full force and effect and are
hereby ratified and confirmed. The execution, delivery and effectiveness of
this

4

 

Amendment No. 5 shall not operate as a waiver of any rights, power or remedy of
the Lenders or the Administrative Agent under the Credit Agreement or any other
Loan Document, nor constitute a waiver of any provision of the Credit Agreement
or any other Loan Document. No delay on the part of any Lender or the
Administrative Agent in exercising any of their respective rights, remedies,
powers and privileges under the Credit Agreement or any of the Loan Documents
or partial or single exercise thereof, shall constitute a waiver thereof. On
and after the Amendment Effective Date, each reference in the Credit Agreement
to “this Agreement,” “hereunder,” “hereof,” “herein” or words of like import,
and each reference to the Credit Agreement in the Loan Documents and all other
documents delivered in connection with the Credit Agreement shall mean and be a
reference to the Credit Agreement, as amended hereby.

     9. Captions. Section captions used in this Amendment No. 5 are for
convenience only, and shall not affect the construction of this Amendment No.
5.

     10. Severability. Whenever possible each provision of this
Amendment No. 5 shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Amendment No. 5 shall
be prohibited by or invalid under such law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Amendment No.
5.

     11. Counterparts. This Amendment No. 5 may be executed in any
number of counterparts and by the different parties on separate counterparts,
and each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
Delivery of an executed counterpart of a signature page to this Amendment No. 5
by telecopy shall be effective as delivery of a manually executed counterpart
of this Amendment No. 5.

[signature pages immediately follow]

5

 

     IN WITNESS WHEREOF, this Amendment No. 5 has been duly executed as of the
date first written above.

	 	 	 	 	 
	 	GENCORP INC.

 	 
	 	By:  	/s/ Terry L. Hall
 	 
	 	 	Name:  	TERRY L. HALL 	 
	 	 	Title:  	Chairman, President and Chief
Executive Officer 	 

 

Signature Page to Amendment
No. 5

 

	 	 	 	 	 

	 	 	 	 	 
	 	AEROJET-GENERAL CORPORATION,

as Subsidiary Guarantor

 	 
	 	By:  	/s/ Yasmin R. Seyal
 	 
	 	 	Name:  	YASMIN R. SEYAL 	 
	 	 	Title:  	Treasurer 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	AEROJET ORDNANCE TENNESSEE, INC., as

Subsidiary Guarantor

 	 
	 	By:  	/s/ Dale G. Adams
 	 
	 	 	Name:  	DALE G. ADAMS 	 
	 	 	Title:  	President 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	GENCORP PROPERTY INC., as Subsidiary

Guarantor

 	 
	 	By:  	/s/ Terry L. Hall
 	 
	 	 	Name:  	TERRY L. HALL 	 
	 	 	Title:  	President 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	GDX LLC, as Subsidiary Guarantor

 	 
	 	By:  	/s/ Terry L. Hall
 	 
	 	 	Name:  	TERRY L. HALL 	 
	 	 	Title:  	President 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	AEROJET FINE CHEMICALS LLC,

as Subsidiary Guarantor

 	 
	 	By:  	/s/ Yasmin R. Seyal
 	 
	 	 	Name:  	YASMIN R. SEYAL 	 
	 	 	Title:  	Treasurer 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	AEROJET INVESTMENTS LTD.,

as Subsidiary Guarantor

 	 
	 	By:  	/s/ Frank V. Fogarty
 	 
	 	 	Name:  	FRANK V. FOGARTY 	 
	 	 	Title:  	Vice President, Chief Financial
Officer and Treasurer 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	RKO GENERAL, INC., as Subsidiary Guarantor

 	 
	 	By:  	/s/ Terry L. Hall
 	 
	 	 	Name:  	TERRY L. HALL 	 
	 	 	Title:  	President 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	DEUTSCHE BANK TRUST COMPANY AMERICAS, as

Lender, Administrative Agent and Facing Agent

 	 
	 	By:  	/s/ Susan LeFevre
 	 
	 	 	Name:  	SUSAN LE FEVRE 	 
	 	 	Title:  	Director 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	BANK ONE, NA,

as Lender

 	 
	 	By:  	/s/ Stephen C. Price
 	 
	 	 	Name:  	STEPHEN C. PRICE 	 
	 	 	Title:  	Managing Director 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	ABN AMRO BANK N.V.,

as Lender

 	 
	 	By:  	/s/ Terrance J. Ward
 	 
	 	 	Name:  	TERRANCE J. WARD 	 
	 	 	Title:  	Senior Vice President 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                      /s/ Peter J. Hallan
 	 
	 	 	Name:  	PETER J. HALLAN 	 
	 	 	Title:  	Vice President 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	THE BANK OF NEW YORK,

as Lender

 	 
	 	By:  	/s/ Elizabeth T. Ying
 	 
	 	 	Name:  	ELIZABETH T. YING 	 
	 	 	Title:  	Vice President 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	THE BANK OF NOVA SCOTIA,

as Lender

 	 
	 	By:  	/s/ Chris Osborn
 	 
	 	 	Name:  	CHRIS OSBORN 	 
	 	 	Title:  	Managing Director 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	NATIONAL CITY BANK,

as Lender

 	 
	 	By:  	/s/ Kenneth M. Blackwell
 	 
	 	 	Name:  	KENNETH M. BLACKWELL 	 
	 	 	Title:  	Vice President 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	THE NORTHERN TRUST COMPANY,

as Lender

 	 
	 	By:  	/s/ Kathleen D. Schurr
 	 
	 	 	Name:  	KATHLEEN D. SCHURR 	 
	 	 	Title:  	Vice President 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	WELLS FARGO BANK, N.A.,

as Lender

 	 
	 	By:  	/s/ Gregory J. Mellor
 	 
	 	 	Name:  	GREGORY J. MELLOR 	 
	 	 	Title:  	Vice President 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	WACHOVIA BANK, N.A.,

as Lender

 	 
	 	By:  	/s/ Robert G. McGill, Jr.
 	 
	 	 	Name:  	ROBERT G. MCGILL JR. 	 
	 	 	Title:  	Director 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	ING CAPITAL LLC,

as Lender

 	 
	 	By:  	/s/  David Scott Orner
 	 
	 	 	Name:  	DAVID SCOTT ORNER 	 
	 	 	Title:  	Vice President 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	AMMC CDO II, LIMITED,

as Lender

 	 
	 	By:  	American Money Management Corp.,
 	 
	 	 	as Collateral Manager 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                    /s/ Chester M. Eng
 	 
	 	 	Name:  	CHESTER M. ENG 	 
	 	 	Title:  	Senior Vice President 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	PACIFICA CDO IV,

as Lender

 	 
	 	By:  	Alcentra as its Investment Manager
 	 
	 	 	 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                    /s/ D. Kawai
 	 
	 	 	Name:  	D. KAWAI 	 
	 	 	Title:  	Senior Vice President 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	STANFIELD CLO, LTD.,

as Lender

 	 
	 	By:  	Stanfield Capital Partners LLC as its
 	 
	 	 	Collateral Manager 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                    /s/ Christopher E. Jansen
 	 
	 	 	Name:  	CHRISTOPHER E. JANSEN 	 
	 	 	Title:  	Managing Partner 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	WINDSOR LOAN FUNDING, LIMITED,

as Lender

 	 
	 	By:  	Stanfield Capital Partners LLC as its
 	 
	 	 	Investment Manager 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                    /s/ Christopher E. Jansen
 	 
	 	 	Name:  	CHRISTOPHER E. JANSEN 	 
	 	 	Title:  	Managing Partner 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	STANFIELD ARBITRAGE CDO, LTD.,

as Lender

 	 
	 	By:  	Stanfield Capital Partners LLC as its
 	 
	 	 	Collateral Manager 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                    /s/ Christopher E. Jansen
 	 
	 	 	 	 
	 	 	Name:  	CHRISTOPHER E. JANSEN 	 
	 	 	Title:  	Managing Partner 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	STANFIELD QUATTRO CLO, LTD.,

as Lender

 	 
	 	By:  	Stanfield Capital Partners LLC as its
 	 
	 	 	Collateral Manager 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                    /s/ Christopher E. Jansen
 	 
	 	 	 	 
	 	 	Name:  	CHRISTOPHER E. JANSEN 	 
	 	 	Title:  	Managing Partner 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	HAMILTON CDO, LTD.,

as Lender

 	 
	 	By:  	Stanfield Capital Partners LLC as its
 	 
	 	 	Collateral Manager 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                    /s/ Christopher E. Jansen
 	 
	 	 	 	 
	 	 	Name:  	CHRISTOPHER E. JANSEN 	 
	 	 	Title:  	Managing Partner 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	C-SQUARED CDO LTD,

as Lender

 	 
	 	By:  	TCW Advisors, Inc.,
 	 
	 	 	as its Portfolio Manager 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                    /s/ G. Steven Kalin
 	 
	 	 	Name:  	G. STEVEN KALIN 	 
	 	 	Title:  	Senior Vice President 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	CELERITY CLO LIMITED,

as Lender

 	 
	 	By:  	TCW Advisors, Inc.,
 	 
	 	 	as Agent 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                  /s/ G. Steven Kalin
 	 
	 	 	Name:  	G. STEVEN KALIN 	 
	 	 	Title:  	Senior Vice President 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                   /s/ Mark L. Gold
 	 
	 	 	Name:  	MARK L. GOLD 	 
	 	 	Title:  	Managing Director 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	KZH CRESCENT-3 LLC,

as Lender

 	 
	 	By:  	/s/  Hi Hua
 	 
	 	 	Name:  	HI HUA 	 
	 	 	Title:  	Authorized Agent 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	TCW SELECT LOAN FUND, LIMITED,

as Lender

 	 
	 	By:  	TCW Advisors, Inc.,
 	 
	 	 	as its Collateral Manager 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                   /s/ G. Steven Kalin
 	 
	 	 	Name:  	G. STEVEN KALIN 	 
	 	 	Title:  	Senior Vice President 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                   /s/ Mark L. Gold
 	 
	 	 	Name:  	MARK L. GOLD 	 
	 	 	Title:  	Managing Director 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	FIRST 2004-I CLO, LTD.,

as Lender

 	 
	 	By:  	TCW Advisors, Inc.,
 	 
	 	 	as its Collateral Manager 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                    /s/ G. Steven Kalin
 	 
	 	 	Name:  	G. STEVEN KALIN 	 
	 	 	Title:  	Senior Vice President 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                       /s/ Mark L. Gold
 	 
	 	 	Name:  	MARK L. GOLD 	 
	 	 	Title:  	Managing Director 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	VELOCITY CLO, LTD.,

as Lender

 	 
	 	By:  	TCW Advisors, Inc.,
 	 
	 	 	as its Collateral Manager 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                    /s/ G. Steven Kalin
 	 
	 	 	Name:  	G. STEVEN KALIN 	 
	 	 	Title:  	Senior Vice President 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                       /s/ Mark L. Gold
 	 
	 	 	Name:  	MARK L. GOLD 	 
	 	 	Title:  	Managing Director 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	FIRST 2004-II CLO, LTD.,

as Lender

 	 
	 	By:  	TCW Advisors, Inc.,
 	 
	 	 	as its Collateral Manager 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                    /s/ G. Steven Kalin
 	 
	 	 	Name:  	G. STEVEN KALIN 	 
	 	 	Title:  	Senior Vice President 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                       /s/ Mark L. Gold
 	 
	 	 	Name:  	MARK L. GOLD 	 
	 	 	Title:  	Managing Director 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	STANFIELD MODENA CLO, LTD.,

as Lender

 	 
	 	By:  	Stanfield Capital Partners LLC as its
 	 
	 	 	Asset Manager 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                   /s/ Christopher E. Jansen
 	 
	 	 	Name:  	CHRISTOPHER E. JANSEN 	 
	 	 	Title:  	Managing Partner 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	AVL LOAN FUNDING LLC

as Lender

 	 
	 	By:  	/s/ Jason Trala
 	 
	 	 	Name:  	JASON TRALA 	 
	 	 	Title:  	Attorney-in-FactEMPLOYMENT AGREEMENT
                              --------------------

     THIS EMPLOYMENT AGREEMENT (the "Agreement") is effective as of July __,
2004 (the "Effective Date") by and between GRILL CONCEPTS, INC., a Delaware
corporation (hereinafter referred to as "Employer" or "Company"), and PHILIP GAY
(hereinafter referred to as "Employee"), with respect to the following:

     A.   Employer is in the business of restaurant operation and management,
specifically the operation and management of Daily Grill and The Grill
restaurants. Employer's principal place of business is located at 11661 San
Vicente Boulevard, Suite 404, Los Angeles, California 90049.

     B.   Employer desires to employ Employee and Employee desires to be
employed by the Employer pursuant to the terms and subject to the conditions
contained in this Agreement.

     C.   The parties desire to reduce their agreements to writing.

     NOW, THEREFORE, in consideration of the foregoing facts and the mutual
covenants and agreements contained in this Agreement, the parties agree as
follows:

     1.   EMPLOYMENT.  Employer  employs Employee as its Chief Financial Officer
          ----------
and an Executive Vice President and Employee accepts that position upon the
terms and conditions set forth in this Agreement. Employer shall have the
exclusive right to Employee's services during the term of this Agreement and
Employee shall devote his full time, attention and energies to the performance
of his duties hereunder.

     2.   DUTIES;  LIMITATIONS.
          ---------------------

          a.   Subject to the powers, authority and responsibilities vested in
the Board of Directors of Employer ("Board"), the Bylaws of Employer and the
limitations set forth below, Employee shall have the authority and
responsibility as the Chief Financial Officer reporting to CEO of the Company,
consistent with the functions of such position as previously established by the
Company, and as same may from time to time during the Term be determined by the
Board.

          b.   Employee will at all times abide by Employer's personnel policies
and will faithfully, industriously and to the best of his ability, experience
and talents perform all duties required of and from Employee pursuant to this
Agreement's express and implied terms.

          c.   Such duties shall be rendered at such place or places and at any
time Employer shall in good faith reasonably require.

          d.   The Employee shall, during the Term, be subject to the same
restrictive covenants as senior executives of the Company with respect to
confidential or proprietary information, trade secrets, works for hire,
non-competition, non-solicitation and non-inducement and, following termination
of this Agreement for whatever reason, be subject to such restrictive covenants
in accordance with their terms to the same extent that senior executives of the

                                                                               1
<PAGE>
Company are subject thereto following termination of employment as employees of
the Company. In this regard, Employee agrees to execute such other and further
documents as the Company may reasonably require incidental to such covenants by
Employee. Notwithstanding the above, the above non-compete period shall be valid
as long as employee is paid either base or severance pay by company, as further
defined in this agreement.

          e.   Employee agrees that during the Term, unless otherwise sooner
modified or terminated in writing by the Company in its sole discretion, he
shall not, in, from or at any location within the United States, directly or
indirectly, as a principal, agent, employee, employer, Employee, stockholder,
partner or in any individual or representative capacity, engage in any business
that competes with the Company, i.e., a business that provides restaurant
services similar to the "The Grill" and/or "Daily Grill" restaurant operations
as well as any restaurant or other business operations actively engaged in by
the Company. It is acknowledged that Employee has a minority ownership interest
in Mezzomondo Trattoria restaurant located in Studio City, California
("Mezzomondo"). Notwithstanding the foregoing, Employee may, without violating
the provisions hereof, (1) retain his existing ownership interest in
"Mezzomondo"; and (2) purchase and hold up to five percent (5%) of any entity
whose shares are publicly traded. If any covenant hereof should be deemed
invalid or unenforceable because of the scope, geographical area or duration, or
any combination thereof, such covenant shall be modified and reformed so that
the scope, geographic area and duration of the covenant is reduced only to the
minimum extent necessary to render the modified covenant valid and enforceable.

          f.   During the Term, and for a period of two (2) years following the
termination thereof other than for termination based on material breach by the
Company, Employee acknowledges and agrees that he will not, without the express
written consent of the Company, directly or indirectly, do or authorize or
assist any other person in doing any of the following acts:

               (i)  solicit, entice, persuade or induce any Person (whether or
not under a written contract of employment with the Company) to terminate his or
her employment by the Company or to refrain from entering into, extending or
renewing employment with the Company (upon the same or new terms) or to become
employed by a Person other than the Company; or

               (ii) solicit, entice, persuade or induce any person or any Client
(whether or not under a written contract with the Company) to terminate his or
her contract or relationship with the Company or to refrain from entering into,
extending or renewing the same (upon the same or new terms) or enter into a
contract or relationship with a person other than the Company.

          g.   Employee acknowledges and agrees that all developments, including
inventions, whether patentable or otherwise, trade secrets, restaurant designs,
recipes, discoveries, improvements, trademarks, trade names, ideas and writings
(including but not limited to operating manuals and policies) which either
directly or indirectly relate to the business of the Company or any of its
affiliates (the "Developments") which Employee, either by himself or in
conjunction with any other person or persons, shall conceive, make, develop,
acquire or acquire knowledge of during his employment with the Company (whether
during the Term or thereafter) shall become the sole and exclusive property of
the Company. Employee hereby assigns, transfers and conveys, and agrees to so
assign, transfer and convey to the

                                                                               2
<PAGE>
Company, all of his right, title and interest in and to any and all such
Developments and to disclose fully as soon as practicable, in writing, all such
Developments to the Company. At any time and from time to time, upon the request
and at the expense of the Company, Employee agrees he will execute and deliver
any and all instruments, documents and papers, give evidence and do any and all
other acts which, in the opinion of counsel for the Company, are or may be
necessary or desirable to document such transfer or to enable the Company to
file and prosecute applications for and to acquire, maintain and enforce any and
all patents, trademark registrations or copyrights under United States or
foreign law with respect to any such Developments or to obtain any extension,
validation, reissue, continuance or renewal of any such patent, trademark or
copyright. The Company will be responsible for the preparation of any such
instruments, documents and papers and for the prosecution of any such
proceedings and will reimburse Employee for all reasonable expenses incurred by
him in compliance with the provisions hereof.

          h.   Employee understands and agrees that any breach of provisions e,
f, or g above would cause irreparable harm, which irreparable harm may not be
compensable entirely with monetary damages. Employee agrees that injunctive
relief is an appropriate remedy for any breach of this paragraph. Employee
further agrees that such injunctive relief shall be in addition to and not in
limitation of any monetary relief or other remedies or rights available under
applicable law, in equity or under this Agreement.

          i.   The Employee agrees that so long as the Employee is engaged by
the Company, the Employee shall comply with all laws, regulations and rules
applicable to the conduct of the Company's business.

          j.   The Employee represents, warrants and covenants that the Employee
is not a party to or bound by any employment, consultant, non-competition,
non-solicitation or confidentiality agreement or any other agreement which would
in any manner conflict or interfere with the Employee's ability to lawfully
fulfill the Employee's duties under this Agreement.

          For purposes herein, Person shall mean any individual, partnership,
corporation, trust, joint venture, governmental agency, unincorporated
association or other entity. For purposes herein, Client shall mean any person
which the Company has conducted business with during the Term.

     3.   TERM.
          ----

          a.   Employee's employment shall be for a period of one (1) year,
commencing as of the Effective Date, subject, however, to prior termination by
the parties' mutual agreement or as otherwise provided for herein (the "Term").

          b.   Notwithstanding the foregoing provisions of this paragraph, in
the event Employee claims that Employer has materially changed the authority or
responsibility of Employee as its Chief Financial Officer from such authority
and responsibility as described in paragraph 2 hereof (a "Material Change"),
Employee may notify Employer in writing indicating the areas in which Employee
believes Employer has materially changed such authority and

                                                                               3
<PAGE>
responsibility (the "Notice"). In the event such Employee's claim of a Material
Change (a "Claim") has not been resolved between Employer and Employee within
thirty (30) days from Employer's receipt of such Notice, Employee's Claim shall
be resolved in the following manner: Employer and Employee shall each designate
one person to act as arbitrator of such claim; these two arbitrators shall
mutually agree upon a third person to serve as the third arbitrator of such
Claim. These three arbitrators shall meet as soon as possible to determine
whether or not there has been a Material Change. The determination of at least a
majority or the Arbitrators shall be required for a finding that there had been
a Material Change and the decision of these Arbitrators shall be binding and
final as to such Claim between Employer and Employee. Such Arbitrators shall
promptly give written notice of their decision to Employer and Employee. In the
event the Arbitrators' decision is that there has been a Material Change,
Employee shall be entitled to terminate his Employment hereunder and be
thereafter entitled to receive as his severance the severance as defined in
paragraph 7; same shall be paid to Employee in installments in accordance with
Company's regular payroll practices This severance payment shall be in full
settlement of Employee's Claim hereunder. The cost of such arbitrators shall be
advanced equally by Employer and Employee: provided in the event a Material
Change is found by the arbitrators, the arbitrators' fees advanced by Employee
shall be reimbursed by the Employer; in the event no Material Change is found by
the arbitrators, the arbitrator's fees advanced by Employer shall be reimbursed
by Employee.

     4.   COMPENSATION AND BENEFITS. Employee shall receive compensation and
          -------------------------
benefits for services rendered by Employee during the Term as set forth on
Schedule A attached hereto and made a part hereof. Any vacation time set forth
on Schedule A will be earned by Employee ratably during each employment year,
and upon this Agreement's termination, the salary applicable to any unearned
vacation time which has been utilized by Employee is an indebtedness of Employee
to Employer which is due and payable upon the termination date. Conversely, any
accrued but unpaid vacation time will be paid by Employer to Employee upon the
termination date. Employee, upon the expiration of the Term, provided this
Agreement is not terminated early, shall not receive any additional salary from
Employer because of Employee's failure to utilize all or any portion of his
allotted vacation time. If this Agreement is terminated due to Employee's death
or permanent disability or at Employer's or Employee's election, Employee (or
Employee's estate) is entitled to compensation for any of Employee's earned but
unused vacation time.

     5.   TERMINATION. This Agreement shall terminate upon the occurrence of any
          -----------
of the following:

          a.   The expiration of the Term or extended term hereof (subject to
paragraph 7).

          b.   The mutual written consent of the parties hereto.

          c.   The death of Employee.

          d.   The permanent disability of Employee; Employee shall be deemed to
be permanently disabled for the purposes hereof, if (i) in the mutual opinion of
two (2) licensed

                                                                               4
<PAGE>
physicians, one selected by Employer and one by Employee, he is physically or
mentally unable to perform his duties hereunder and (ii) such incapacity shall
continue for a period of ninety (90) days in the aggregate during any one
hundred and eighty (180) day period during the Term. If the two (2) physicians
are unable to agree, they shall select a third licensed physician not affiliated
with either physician, whose decision will be final and binding.

          e.   For Cause, at the option of Employer, as provided in paragraph 6
below.

          f.   By Employee pursuant to the provisions of paragraph 3b.

     Nothing contained in this paragraph 5 shall be construed, however, to
abrogate the payment by Employer to Employee or Employee's personal
representative or heirs, as the case may be, of any benefits or compensation
which had accrued and was due to Employee prior to termination of this
Agreement. However, upon such termination, all obligations of Employer shall
cease immediately, except that the Employee shall receive all Base Salary, bonus
(except if terminated for "cause") and benefits earned or accrued through and
including the date of such termination, and any expenses properly incurred by
Employee but not yet reimbursed.

     6.   TERMINATION  FOR  CAUSE.
          -----------------------

          a.   Employer shall have the right, at its sole election, to terminate
Employee's employment hereunder at any time during the Term for cause ("cause
herein") which, for purposes of this Agreement, shall be constituted by any of
the following events:

               (i)  any material failure by the Employee to perform the
Employee's duties under this Agreement or to perform specific directives of the
Company which are consistent with the scope and nature of the Employee's duties
and responsibilities as set forth herein (following a 30 day written notice to
correct such action);

               (ii) any intentional act of fraud or embezzlement by the Employee
or the Employee's admission or conviction (including a plea of nolo contendre)
of a felony or of any crime involving moral turpitude, fraud, embezzlement or
misrepresentation;

               (iii) any gross negligence or willful misconduct of the Employee
resulting in a material loss to the Employer or any of its affiliates, or
material damage to the reputation of the Employer or any of its affiliates;

               (iv) excessive use of alcohol or drugs while performing his job
duties hereunder; and

               (v)  any other material breach of this Agreement.

          b.   The exercise of the right of the Employer to terminate this
Agreement pursuant to this Section 6 shall not abrogate the rights or remedies
of the Employer in respect of the breach giving rise to such termination.

                                                                               5
<PAGE>
          c.   If the Employer terminates the Employee's employment for Cause,
all obligations of the Employer hereunder shall cease immediately, except that
the Employee shall be entitled to Base Salary and benefits actually earned or
accrued through and including the date of such termination and any expenses
properly incurred by the Employee but not yet reimbursed.

     7.   SEVERANCE. In the event that (1) the Company, in its discretion elects
          ---------
not to renew this Agreement for at least an additional twelve month period
following expiration of the Term (the "Extended Term") at a base salary during
such Extended Term at least equal to that set forth in Schedule A hereto (the
"Extended Term Base Salary"), and (2) provided the Employee has fully performed
all his obligations hereunder during the Term, has not been terminated for Cause
as provided for hereunder, and contingent upon receipt by the Company of a valid
and fully effective release of any and all Employee claims against the Company
and related parties with respect to all matters arising out of Employee's
employment by the Company (same to be of form and content satisfactory to
Company's counsel), Employee shall then receive the following severance
payments:

          The Company shall continue to pay Employee his Base Salary as set
forth on Schedule A for a period of six (6) months following the expiration of
the Term. This amount shall be paid to Employee in installments in accordance
with the Company's regular payroll practices.

     8.   EXPENSES. Employee shall be entitled to reimbursement for all of
          --------
Employee's reasonable and necessary expenses in connection with Employee's
duties hereunder, in accordance with Employer's usual practice. In addition,
Employee shall be reimbursed his actual out of pocket costs incurred incidental
to his relocation (and that of his immediate family) to Los Angeles, California
to commence his employment hereunder, provide such relocation costs shall not
exceed $25,000. This reimbursement is exclusive of the interim reimbursements
for Gay to travel to and from Dallas until his relocation with his family, which
Gay agrees to try and minimize such expense (roundtrip airfares approximately
$250, bring his own car to LA from Dallas at the beginning of his employment
etc).

     9.   NOTICE. Whenever provision is made in this Agreement for the giving,
          ------
service or delivery of any notice, statement or other instrument, notice shall
be in writing and shall be deemed to have been duly given, served and delivered,
either upon personal delivery, or if mailed, proper postage paid by United
States registered or certified mail, addressed to the party entitled to receive
the same at that address as set forth below, or to any other mailing address as
the parties may by written notice designate:

                                                                               6
<PAGE>
     If to Employer:     Grill Concepts, Inc.
                         11661 San Vicente Boulevard, Suite 404
                         Los Angeles, California  90049
                         Attn: Robert Spivak, President

     with copy to:       Herzog, Fisher, Grayson & Wolfe
                         9460 Wilshire Boulevard
                         Beverly Hills, CA  90212-2711
                         Attn:  Michael A. Grayson, Esq.

     If to Employee:     Philip Gay
                         4619 Stone Hollow Way
                         Dallas, Texas  75287

     10.  SUCCESSORS AND ASSIGNS. The rights and obligations of the parties
          ----------------------
under this Agreement shall inure to the benefit of and shall be binding upon the
successors and assigns of such parties; provided, however, that this Agreement
is personal to Employee and neither this Agreement nor the Employee's rights or
obligations hereunder may be assigned. Employer may assign all or part of its
rights hereunder to any subsidiary or parent company of Employer, in which case
services of Employee hereunder shall be rendered to such assignee.

     11.  SURVIVORSHIP OF BENEFITS. Subject to Paragraph 9, this Agreement shall
          ------------------------
bind and inure to the benefit of the respective parties, their executors,
administrators, heirs, successors, assigns and transferees.

     12.  SEVERABILITY. The invalidity or unenforceability of any provision of
          ------------
this Agreement shall not affect the validity or enforceability of any other
provision.

     13.  GOVERNING LAW. This Agreement shall be construed in accordance with
          -------------
and governed by California law.

     14.  ENTIRE AGREEMENT.
          ----------------

          a.   This Agreement contains the parties' sole and entire agreement
and shall supersede any and all other agreements between them.

          b.   The parties acknowledge and agree that neither has made any
representations with respect to the subject matter of this Agreement, or any
representation inducing the execution and delivery of this Agreement, except as
specifically set forth in this Agreement. Each acknowledges it has relied on its
own judgment in entering into this Agreement.

          c.   The parties further acknowledge that any statements or
representations that may have been made by either of them to the other are void
and of no effect, and that neither has relied on any statements or
representations in connection with its, or his dealings with the other.

                                                                               7
<PAGE>
     15.  NO MODIFICATIONS OR WAIVERS. No waiver or modification of this
          ---------------------------
Agreement, or of any covenant, condition, or limit contained in this Agreement,
shall be valid unless made in writing and duly executed by the party to be
charged. No evidence of any waiver or modification shall be offered or received
in evidence in any proceeding, arbitration, or litigation between the parties
arising out of or affecting this Agreement, or the parties' rights or
obligations, unless the waiver or modification is in writing and duly executed.

     16.  COUNTERPARTS. This Agreement may be executed in one or more
          ------------
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same Agreement.

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the day and year first above written.

Employer:                           GRILL CONCEPTS, INC., A DELAWARE CORPORATION
--------

                                    By:_______________________________________
                                            Robert Spivak, President

Employee:                           By:_______________________________________
--------                                    PHILIP GAY

                                                                               8
<PAGE>
                                   SCHEDULE A
                                   ----------

     1.   Compensation During Term
          ------------------------

          a.   Base Salary. For all the services rendered by Employee hereunder,
               -----------
the Company shall pay Employee an annual salary of $203,724.80 per year for the
Term, (the "Base Salary" herein), less withholding required by law or agreed to
by Employee, payable semi-monthly.

          b.   In addition to the Base Salary, Employee shall receive a an
option to purchase 50,000 shares of the Company's Common Stock pursuant to the
terms of the Company's Stock Option Plan. Employee acknowledges receipt of a
copy of such Plan and agrees to be bound by the terms thereof, including without
limitation, the vesting schedule for such Options.

          c.   Employee shall also be entitled to participate in the Company's
Bonus Plan and be eligible there under to receive a Bonus thereunder to a
maximum of twenty-five (25) percent of his Base Salary.

     2.   Compensation during Extended Term (if any)
          ------------------------------------------

          a.   Extended Term Base Salary shall equal the Base Salary set forth
in a. above plus an increase equal to increase, if any, in the Consumer Price
Index (CPI) between the Effective Date and the first day of the Extended Term

                                                                               9
<PAGE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00072-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00072-of-00352.parquet"}]]