EIGHTH AMENDMENT TO PARTICIPATION AGREEMENT
THIS EIGHTH AMENDMENT TO PARTICIPATION AGREEMENT (hereinafter, as it may be
modified, amended or supplemented from time to time, called this "Amendment"),
made and entered into as of March 25, 2002, among (i) AVADO BRANDS, INC.
formerly known as Apple South, Inc., a corporation organized and existing under
the laws of Georgia (herein, together with its successors and assigns permitted
hereunder, called the "Lessee"), (ii) ▇▇▇▇▇ FARGO BANK NORTHWEST NATIONAL
ASSOCIATION, formerly known as First Security Bank, National Association, a
national banking association ("First Security"), not in its individual capacity
except as expressly provided herein, but solely as Owner Trustee under Apple
South Trust No. 97-1 (herein in such capacity, together with its successors and
assigns permitted hereunder, called the "Owner Trustee"), (iii) SunTrust Leasing
Corporation, as successor by merger to STI Credit Corporation, a Nevada
corporation, as assignee of SunTrust Bank, formerly known as SunTrust Bank,
Atlanta, in its capacity as the holder of the beneficial interest in the trust
estate established under Apple South Trust No. 97-1 (in such capacity as of the
date hereof, the "Holder", and together with its successors and assigns
permitted hereunder, called the "Holders"), (iv) the financial institutions now
parties to the Participation Agreement (as defined below) as Lenders (each
herein in such capacity, together with its successors and assigns permitted
hereunder, called a "Lender" and collectively, the "Lenders"), and (v) SUNTRUST
BANK, formerly known as SunTrust Bank, Atlanta, a banking corporation organized
and existing under the laws of Georgia, ("SunTrust"), as collateral agent and
administrative agent for the Lenders and the Holders (in such capacity, the
"Administrative Agent").
W I T N E S S E T H
WHEREAS, the Lessee, the Owner Trustee, the Holder, the Lenders and the
Administrative Agent are parties to that certain Participation Agreement, dated
as of September 24, 1997, as amended by the First Amendment to the Participation
Agreement, dated as of March 27, 1998, as amended by the Second Amendment to the
Participation Agreement, dated as of August 14, 1998, as amended by the Third
Amendment to the Participation Agreement, dated as of November 13, 1998, as
amended by the Fourth Amendment to the Participation Agreement, dated as of
February 22, 1999, as amended by the Fifth Amendment to Participation Agreement,
dated as of August 24, 1999, as amended by the Sixth Amendment to Participation
Agreement dated as of December 22, 2000, and as amended by the Seventh Amendment
to Participation Agreement dated as of April 2, 2001 (as so amended, the
"Participation Agreement");
WHEREAS, the Owner Trustee and the Lessee are parties to that certain
Master Equipment Lease Agreement, dated as of September 24, 1997, as amended by
the First Amendment to Lease Agreement, dated as of March 27, 1998, as amended
by the Second Amendment to Lease Agreement, dated as of May 18, 1999, as amended
by the Third Amendment to Lease Agreement, dated as of December 22, 2000, as
amended by the Fourth Amendment to Lease Agreement, dated as of April 22, 2001,
and as amended by the Fifth Amendment to Lease Agreement, dated as of the date
hereof (as so amended, the "Lease");
WHEREAS, the Lessee, the Owner Trustee, the Holder, the Lenders and the
Administrative Agent have agreed to amend the Participation Agreement in certain
respects and to waive certain covenant defaults, as described more particularly
below.
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency whereof are hereby acknowledged, the
Lessee, the Owner Trustee, the Holder, the Lenders and the Administrative Agent
agree as follows:
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A. DEFINITIONS
Unless the context otherwise requires, all capitalized terms used herein
and not otherwise defined herein shall have the meanings set forth in Appendix A
to the Participation Agreement for all purposes of this Amendment. The General
Provisions of Appendix A to the Participation Agreement are hereby incorporated
by reference herein. Terms used herein and not otherwise defined herein or in
Appendix A to the Participation Agreement, but are defined in the Credit
Agreement shall have the meaning set forth for such term in the Credit
Agreement.
B. AMENDMENTS
1. Amendment to Existing Section 3.2: Section 3.2 of the Participation
Agreement is hereby amended by adding the following new Section 3.2(x)
(x) The Lessee has heretofore furnished to the Administrative Agent (i)
projected monthly balance sheets, income statements and statements of cash flows
of the Lessee and its Subsidiaries for the period from January 1, 2001 through
December 31, 2001, and (ii) projected annual balance sheets, income statements
and statements of cash flows of the Lessee and its Subsidiaries for the Fiscal
Years ending in 2002 through 2005, in each case as updated from time to time
pursuant to Section 5.1(e). Such projections, as so updated, have been prepared
on a reasonable basis and in good faith by the Lessee, and have been based on
assumptions believed by the Lessee to be reasonable at the time made and upon
the best information then reasonably available to the Lessee, and the Lessee is
not aware of any facts or information that would lead it to believe that such
projections, as so updated, are incorrect or misleading in any material respect.
2. Amendment to Existing Section 5.1: Section 5.1 of the Participation
Agreement (Information) is hereby amended by deleting Section 5.1 in its
entirety and substituting in its place the following revised Section 5.1:
5.1 Information
(a) With respect to the 2001 Fiscal Year, on or before April 2, 2001, and
with respect to each subsequent Fiscal Year, within 60 days after the end of
such Fiscal Year, a consolidated balance sheet of the Lessee and its
Subsidiaries as of the end of such Fiscal Year and the related consolidated
statements of income, shareholders' equity and cash flows for such Fiscal Year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all certified by independent public accountants of nationally
recognized standing, with such certification to be free of any material
exceptions and qualifications; provided that, the information required by this
paragraph may be satisfied by delivery of information pursuant to Section 5.1(f)
or Section 5.1(g);
(b) With respect to the fourth Fiscal Quarter of the 2001 Fiscal Year, on
or before April 2, 2002, with respect to the fourth Fiscal Quarter of each
subsequent Fiscal Year, within 60 days after the end of the fourth Fiscal
Quarter of such Fiscal Year, and with respect to each other Fiscal Quarter of
Lessee and its Subsidiaries, within 45 days after the end of such Fiscal
Quarter, a consolidated balance sheet of the Lessee and its Subsidiaries as of
the end of such Fiscal Quarter and the related statement of income and statement
of cash flows for such quarter and for the portion of the Fiscal Year ended at
the end of such quarter, setting forth in each case in comparative form the
figures for the corresponding quarter and the corresponding portion of the
previous Fiscal Year, all certified (subject to normal year-end adjustments) as
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to fairness of presentation, GAAP and consistency by the chief financial officer
of the Lessee;
(c) With respect to each of the fiscal months of December 2001, January
2002 and February 2002, on or before April 2, 2002 and (except for months ending
in a Fiscal Quarter of the Lessee) within 30 days of the end of each other
fiscal month of Lessee and its Subsidiaries, unaudited consolidated balance
sheets, consolidated statements of operations, consolidated statements of cash
flows, and statements of cash flow for such fiscal month of Lessee and for the
period from the beginning of such Fiscal Year to the end of such fiscal month,
setting forth in each case in comparative form the figures for the corresponding
quarter and the corresponding portion of the previous Fiscal Year, all certified
(subject to normal year-end adjustments) as to fairness of presentation, GAAP
and consistency by the chief financial officer of the Lessee;
(d) Simultaneously with the delivery of each set of financial statements
referred to in Sections 5.1(a), 5.1(b) and 5.1(c), a certificate, substantially
in the form of Attachment B (a "Compliance Certificate"), of the chief financial
officer of the Lessee (i) setting forth in reasonable detail the calculations
required to establish whether the Lessee was in compliance with the requirements
of Sections 5.4, 5.5, 5.6, 5.7 and 5.19 on the date of such financial statements
and (ii) stating whether any Lease Default exists on the date of such
certificate and, if any Lease Default then exists, setting forth the details
thereof and the action which the Lessee is taking or proposes to take with
respect thereto;
(e) On or before December 21 of each year, financial projections (A)
supplementing and superseding the financial projections for such period referred
to in Section 3.2(x), prepared on a monthly basis, for the immediately
succeeding Fiscal Year for the Lessee and its Subsidiaries and (B) on or before
the date that is 45 days after the last day of each fiscal quarter of the
Lessee, financial projections supplementing and superseding the financial
projections for such period referred to in Section 3.2(x), prepared on a monthly
basis, for each remaining quarterly period in such Fiscal Year, all such
financial projections to be prepared on a reasonable basis and in good faith,
and to be based on assumptions believed by the Lessee to be reasonable at the
time made and from the best information then reasonably available to the Lessee;
(f) Promptly (and, in any event, within five (5) Domestic Business Days)
after the Lessee becomes aware of the occurrence of any Lease Default, a
certificate of the chief financial officer of the Lessee setting forth the
details thereof and the action which the Lessee is taking or proposes to take
with respect thereto;
(g) Promptly upon the mailing thereof to the shareholders of the Lessee
generally, copies of all financial statements, reports and proxy statements so
mailed;
(h) Promptly upon the filing thereof, copies of all registration statements
and annual, quarterly or monthly reports which the Lessee shall have filed with
the Securities and Exchange Commission;
(i) If and when any member of the Controlled Group (i) gives or is required
to give notice to the PBGC of any reportable event (as defined in Section 4043
of ERISA) with respect to any Plan which might constitute grounds for a
termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or partial
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withdrawal liability under Title IV of ERISA, a copy of such notice; or (iii)
receives notice from the PBGC under Title IV of ERISA of an intent to terminate
or appoint a trustee to administer any Plan, a copy of such notice; and
(j) From time to time such additional information regarding the financial
position or business of the Lessee and its Subsidiaries as the Administrative
Agent, at the request of any Holder or Lender, may reasonably request.
3. Amendment to Existing Section 5.4: Section 5.4 of the Participation
Agreement (Adjusted Total Debt/Adjusted Total Capital Ratio) is hereby amended
by deleting Section 5.4 in its entirety and substituting in its place the
following revised Section 5.4:
5.4 Tangible Net Worth
Lessee shall not permit Tangible Net Worth of Lessee and its
Subsidiaries at any time to be less than $20,000,000.
4. Amendment to Existing Section 5.5: Section 5.5 of the Participation
Agreement (Fixed Charge Coverage Ratio) is hereby amended by deleting Section
5.5 in its entirety and substituting in its place the following revised Section
5.5:
5.5 Fixed Charge Coverage Ratio. Lessee shall not permit the Fixed Charge
Coverage Ratio for the twelve fiscal month period ending on each date set forth
below to be less than the amount set forth opposite such date:
Trailing Twelve Fiscal Month Period Ending Fixed Charge Coverage Ratio
March 31, 2002 0.56
April 30, 2002 0.58
May 31, 2002 0.59
June 30, 2002 0.57
July 31, 2002 0.55
August 31, 2002 0.54
September 30, 2002 0.51
October 31, 2002 0.50
November, 30, 2002 0.53
December 31, 2002 and
thereafter until March 31, 2003 0.55
March 31, 2003 and
thereafter until June 30, 2003 0.58
June 30, 2003 and thereafter
until September 30, 2003 0.58
September 30, 2003 and thereafter
until December 31, 2003 0.57
December 31, 2003 and thereafter 0.70
provided that the financial covenant set forth in this Section 5.5 for each
trailing twelve fiscal month period ending on the last day of each fiscal month
after December 31, 2003 shall be reset at a level based on 80% of the monthly
projections most recently prepared and timely delivered by the Lessee pursuant
to Section 5.1(e) hereof with respect to such period.
5. Amendment to Existing Section 5.6: Section 5.6 of the Participation
Agreement (Total Debt/EBITDA Ratio) is hereby amended by deleting Section 5.6 in
its entirety and substituting in its place the following revised Section 5.6:
5.6 Minimum Restaurants Generating Positive Operating Income. As of the
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last day of each fiscal month of Lessee, Lessee shall not permit the number of
Restaurant locations which generate positive Cash Flow From Restaurant
Operations for the twelve fiscal month period ending on each such date, to be
less than the lesser of: (i) 150 Restaurant locations, or (ii) the smallest
whole number equal to seventy percent (70%) of all Restaurant locations.
6. Amendment to Existing Section 5.7: Section 5.7 of the Participation
Agreement (Total Senior Debt/EBITDA Ratio) is hereby amended by deleting Section
5.7 in its entirety and substituting in its place the following revised Section
5.7:
5.7 Maximum Senior Debt to EBITDA Ratio. Lessee shall not permit the Senior
Debt to EBITDA Ratio, for the twelve month period ending on that last day of any
month, to be greater than 2.25.
7. Amendment to Existing Section 5.7A:Section 5.7A of the Participation
Agreement (Minimum EBITDA) is hereby amended by deleting Section 5.7A in its
entirety and substituting in its place the following revised Section 5.7A:
5.7A Lessee EBITDA. Lessee shall not permit its EBITDA for the twelve
fiscal month period ending on each date set forth below to be less than the
amount set forth opposite such date:
Trailing Twelve Fiscal Month Period Ending Lessee's EBITDA
March 31, 2002 $24,218,000
April 30, 2002 $24,563,000
May 31, 2002 $25,000,000
June 30, 2002 $23,975,000
July 31, 2002 $24,150,000
August 31, 2002 $24,200,000
September 30, 2002 $24,250,000
October 31, 2002 $24,325,000
November, 30, 2002 $25,275,000
December 31, 2002 and thereafter
until March 31, 2003 $26,400,000
March 31, 2003 and thereafter
until June 30, 2003 $26,800,000
June 30, 2003 and thereafter
until September 30, 2003 $27,825,000
September 30, 2003 and thereafter
until December 31, 2003 $29,225,000
December 31, 2003 and thereafter $30,740,000
provided that the financial covenant set forth in this Section 5.7A for
each trailing twelve fiscal month period ending on the last day of each fiscal
month after December 31, 2003 shall be reset at a level based on 80% of the
monthly projections most recently prepared and timely delivered by the Lessee
pursuant to Section 5.1(e) hereof with respect to such period.
8. Amendment to Existing 5.7: Section 5.7 of the Participation Agreement is
hereby amended by adding to the Participation Agreement, immediately following
amended Section 5.7A thereof, new Sections 5.7B and 5.7C as follows:
5.7B Maximum Repurchase Payments. Lessee shall not pay or permit its
Subsidiaries to pay, in the aggregate, more than $1,050,000 during any Fiscal
Year to any limited partner of any Non-Wholly Owned Subsidiary in connection
with the purchase of the Capital Stock in the Lessee or any of its Subsidiaries
owned by such limited partner.
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5.7C Maximum Pre-Opening Costs. Lessee shall not incur, or permit any of
its Subsidiaries to incur, Pre-Opening Costs in any four consecutive fiscal
quarters of Lessee, tested quarterly beginning with the fiscal quarter ending
December 30, 2001, in excess of the amount set forth below for the applicable
period set forth below:
Four Fiscal Quarter Period Ending Maximum
Pre-Opening
Costs
-----------------------------------------------------------------------------
March 31, 2002 $200,000
June 30, 2002 $400,000
September 30, 2002 $900,000
December 31, 2002 $2,145,000
March 31, 2003 $3,300,000
June 30, 2003 $4,600,000
September 30, 2003 $5,450,000
December 31, 2003 $4,600,000
March 31, 2004 and thereafter $5,130,000
provided that the financial covenant set forth in this Section 5.7C for
each trailing twelve fiscal month period ending on the last day of each fiscal
month after December 31, 2003 shall be reset at a level based on 80% of the
monthly projections most recently prepared and timely delivered by the Lessee
pursuant to Section 5.1(e) hereof with respect to such period.
9. Amendment to Existing Section 5.8: Section 5.8 of the Participation
Agreement (Negative Pledge) is hereby amended by deleting Section 5.8 in its
entirety and substituting in its place the following revised Section 5.8:
5.8 Negative Pledge.
The Lessee will not, nor will the Lessee permit any Subsidiary to, create,
assume or suffer to exist any Lien on any asset now owned or hereafter acquired
by it, except: (i) the ▇▇▇▇▇▇ Liens, (ii) Liens on the Hops Marks to the extent
necessary to reflect and permit the licensing thereof to the SPV under the Hops
Marks License, (iii) those Liens, if any, described on Schedule 5.8, concerning
existing Debt of the Lessee, to be set forth and described more particularly
therein, together with any Lien arising out of the refinancing, extension,
renewal or refunding of any Debt secured by any such Lien, provided that such
Debt is not secured by any additional assets, and the amount of such Debt
secured by any such Lien is not increased; (iv) Liens incidental to the conduct
of its business or the ownership of its Properties which (A) do not secure Debt
and (B) do not in the aggregate materially detract from the value of its
Properties or materially impair the use thereof or the operation of its
business, including, without limitation, easements, rights of way, restrictive
covenants, zoning and other similar restrictions on real property; (v)
materialmen's, mechanics', warehousemen's, carriers', landlords' and other
similar statutory Liens which secure Debt or other obligations that are not past
due, or, if past due are being contested in good faith by the Lessee or the
appropriate Subsidiary by appropriate proceedings; (vi) Liens for taxes not
delinquent or taxes being contested in good faith and by appropriate
proceedings; (vii) pledges or deposits in connection with worker's compensation,
unemployment insurance and other social security legislation; (viii) deposits to
secure performance of bids, trade contracts, leases, statutory obligations (to
the extent not excepted elsewhere herein); (ix) grants of security and rights of
setoff in deposit accounts, securities and other properties held at banks or
financial institutions to secure the payment or reimbursement under overdraft,
letter of credit, acceptance and other credit facilities; (x) rights of setoff,
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banker's liens and other similar rights arising solely by operation of law; (xi)
Purchase Money Liens, provided that the Purchase Money Debt secured thereby is
permitted under Section 5.20(viii); (xii) rights of lessors under Capital
Leases, provided that the Debt secured thereby is permitted under Section
5.20(viii); (xiii) rights of lessors in respect of Properties leased to the
Lessee or its Subsidiaries under operating leases, to the extent permitted under
Section 5.34; and (xiv) Liens granted pursuant to or permitted by the Credit
Agreement (as amended and restated to date).
10. Amendment to Existing Section 5.11:Section 5.11 of the Participation
Agreement (Consolidations, Mergers and Sales of Assets) is hereby amended by
deleting Section 5.11 in its entirety and substituting in its place the
following revised Section 5.11:
5.11 Consolidations, Mergers and Sales of Assets. The Lessee will not
wind-up, liquidate or dissolve itself (or permit or suffer any thereof) or
merge, consolidate or amalgamate with any Person, convey, sell, lease or
sublease, transfer or otherwise dispose of, whether in one transaction or a
series of related transactions, all or any part of its business, property or
assets, whether now owned or hereafter acquired, or (agree to do any of the
foregoing) or purchase or otherwise acquire, whether in one transaction or a
series of related transactions, all or substantially all of the assets of any
Person (or any division thereof) (or agree to do any of the foregoing), or
permit any of its Subsidiaries to do any of the foregoing; provided, however,
that:
(i) any Dormant Subsidiary or any Non-Wholly Owned Subsidiary may be
wound-up, liquidated or dissolved, so long as the proceeds of any such
liquidation or dissolution and any remaining assets of such Dormant Subsidiary
or Non-Wholly Owned Subsidiary are promptly transferred to the Lessee or any of
its Wholly Owned Subsidiaries in connection therewith;
(ii) any Subsidiary of the Lessee may be merged into the Lessee or another
such Wholly Owned Subsidiary of the Lessee, other than a Liquor License
Subsidiary or a Dormant Subsidiary, consolidate with another such Wholly Owned
Subsidiary of the Lessee, other than a Liquor License Subsidiary or a Dormant
Subsidiary, or sell assets to the Lessee or another Wholly Owned Subsidiary of
the Lessee, other than a Liquor License Subsidiary or a Dormant Subsidiary, so
long as (A) the Lessee gives the Administrative Agent (I) at least 15 days'
prior written notice of any such merger or consolidation, or (II) at least 10
days' prior written notice of any such sale of assets, (B) no Lease Default or
Lease Event of Default shall have occurred and be continuing either before or
after giving effect to such transaction, (C) the Owner Trustee's rights in any
Collateral, including, without limitation, the existence, perfection and
priority of any Lien thereon, are not adversely affected by such merger,
consolidation or sale of assets (D) and the Lessee complies with Section 14(r)
of the Lease; and
(iii) the Lessee and its Subsidiaries (other than the Liquor License
Subsidiaries and the Dormant Subsidiaries) may (A) sell Inventory in the
ordinary course of business, (B) dispose of obsolete or worn-out equipment in
the ordinary course of business, (C) conduct Voluntary Store Closings provided
that the Lessee complies with Section 14(q) of the Lease, (D) consummate the
Permitted Affiliate Transaction, (E) sell or otherwise dispose of other property
or assets as provided for in Section 6.02(c)(iii)E of the Credit Agreement or
Section 6.02(c)(iii)F of the Credit Agreement provided that the Lessee complies
with Section 14(r) of the Lease.
11. Amendment to Existing Section 5.12: Section 5.12 of the Participation
7
Agreement (Compliance with Laws; Payment of Taxes) is hereby amended by deleting
Section 5.12 in its entirety and substituting in its place the following revised
Section 5.12:
5.12 Compliance with Laws; Payment of Taxes. The Lessee will, and will
cause each of its Subsidiaries and each member of the Controlled Group to,
comply in all material respects with applicable laws (including but not limited
to ERISA), regulations and similar requirements of governmental authorities
(including but not limited to PBGC), except where the necessity of such
compliance is being contested in good faith through appropriate proceedings and
except for the tax returns and material reports identified on Schedule
5.01(k)(i) to the Credit Agreement, for which the Lessee shall have 60 days
after the Eighth Amendment Effective Date to file such tax returns and material
reports. The Lessee will, and will cause each of its Subsidiaries to, pay
promptly when due all taxes, assessments, governmental charges, claims for
labor, supplies, rent and other obligations which, if unpaid, might become a
Lien against the Property of the Lessee or any Subsidiary, except liabilities
being contested in good faith and against which, if requested by the
Administrative Agent, the Lessee will set up reserves in accordance with GAAP
and except for Permitted Deferred Taxes. In respect of the foregoing, the Lessee
acknowledges that the Administrative Agent may or, at the request of the
Lenders, the Administrative Agent shall conduct (or cause to be conducted by one
or more representatives, including certified public accountants) a periodic
audit of the Lessee's and its Subsidiaries' payment of all property taxes, sales
and use taxes, payroll taxes, and income taxes as and when due and payable
(subject to the items listed on Schedule 5.01(k)(i) of the Credit Agreement and
Permitted Deferred Taxes) to federal, state or local governmental authorities,
all at the Lessee's expense.
12. Amendment to Existing Section 5.19(b): Section 5.19(b) of the
Participation Agreement (Capital Expenditures) is hereby amended by deleting
Section 5.19(b) in its entirety and substituting in its place the following
revised Section 5.19(b):
(b) Capital Expenditures. Make or commit or agree to make any Capital
Expenditures that would cause the aggregate amount of all such Capital
Expenditures made by Lessee and its Subsidiaries to exceed the amount set forth
below opposite the applicable Fiscal Year:
Fiscal Year Maximum Capital
Expenditures
----------------------------------------------------------------
2002 $19,334,000
2003 $22,494,000
2004 and each $28,697,000
Fiscal Year thereafter
13. Amendment to Existing Section 5.19(k): Section 5.19(k) of the
Participation Agreement (Advances to Affiliates) is hereby amended by deleting
Section 5.19(k) in its entirety and substituting in its place the following
revised Section 5.19(k):
(k) Advances to Affiliates. Continue to hold Debt evidencing loans and
advances to Affiliates made prior to the Eighth Amendment Effective Date, to the
extent disclosed on Schedule 5.19K, provided (i) all such loans and advances
shall have been repaid in full on or prior to the Basic Term Expiration Date and
(ii) no new loans and advances to Affiliates may be made on or subsequent to the
8
Eighth Amendment Date.; provided, further, that so long as no Event of Default
has occurred and is continuing and so long as approved by the Board of Directors
of the Lessee, Lessee may enter into the Permitted Affiliate Transaction and may
cancel any Subordinated Notes in connection with the payment of the New ▇▇▇▇▇▇
Note.
14. Amendment to Existing Section 5.19: Section 5.19 of the Participation
Agreement is hereby amended by adding the following new Section 5.19(m):
(m) Permitted Investments. Make investments in any of the following: (i)
marketable direct obligations issued or unconditionally guaranteed by the United
States Government or issued by any agency thereof and backed by the full faith
and credit of the United States, in each case maturing within six months from
the date of acquisition thereof, (ii) commercial paper, maturing not more than
270 days after the date of issue rated P-1 by ▇▇▇▇▇'▇ or A-1 by Standard &
Poor's; (iii) certificates of deposit maturing not more than one year after the
date of issue, issued by commercial banking institutions and money market or
demand deposit accounts maintained at commercial banking institutions, each of
which is a member of the Federal Reserve System and has a combined capital and
surplus and undivided profits of not less than $500,000,000; (iv) repurchase
agreements having maturities of not more than 90 days from the date of
acquisition which are entered into with major money center banks included in the
commercial banking institutions described in clause (iii) above, (v) money
market accounts maintained with mutual funds having assets in excess of
$2,500,000,000, (vi) tax exempt securities rated A or better by ▇▇▇▇▇'▇ or A+ or
better by Standard & Poor's, (vii) investments permitted pursuant to Section
2.05(c)(v) of the Credit Agreement, (viii) investments arising from Permitted
Intercompany Advances and from Debt of Lessee to Excluded Subsidiaries, (ix)
investments made in connection with the operation of a Restaurant or purchases
of goods or services, in each case in the ordinary course of business, (x)
Capital Expenditures, to the extent otherwise permitted under Section 5.19(b),
(xi) Existing Affiliate Advances, (xii) investments arising from the Tender
Offer, (xiii) investments arising from escrow deposits for the payment of taxes,
rents, utilities, insurance or like matters in the ordinary course of business
of Lessee and its Subsidiaries, (xiv) deposits of cash in demand deposit
accounts of banks in the ordinary course of its business in furtherance of any
Concentration Account Agreement, and endorsement of checks, drafts or other
instruments in connection therewith, (xv) loans and advances to employees and
officers of Lessee and its Subsidiaries from time to time in the ordinary course
of business for travel expenses, moving expenses, and signing bonuses, (xvi)
other loans to employees and officers of Lessee and its Subsidiaries from time
to time in the ordinary course of business, other than Existing Affiliate
Advances and Investments described in paragraph (xvii) of this definition, in an
aggregate outstanding amount not in excess of $100,000, (xvii) investments in
connection with the plans identified on Schedule 5.01(e) to the Credit
Agreement, (xviii) Investments permitted pursuant to Section 6.02(c)(ii) of the
Credit Agreement, and (xix) investments not otherwise described in the foregoing
clauses of this definition in an aggregate outstanding amount not in excess of
$100,000.
15. Amendment to Existing Section 5.20.Section 5.20 of the Participation
Agreement (Debt) is hereby amended by deleting Section 5.20 in its entirety and
substituting in its place the following revised Section 5.20:
5.20 Debt. The Lessee will not create, incur, assume, guarantee or suffer
to exist, or otherwise become or remain liable with respect to any Indebtedness
other than Permitted Indebtedness.
16. Amendment to Existing Section 5.21. Section 5.21 of the Participation
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Agreement (Dividends and Distributions) is hereby amended by deleting Section
5.21 in its entirety and substituting in its place the following revised Section
5.21:
5.21 Dividends and Distributions.
The Lessee will not, nor will the Lessee permit any Subsidiary to, (i) pay
any cash dividend; (ii) make any capital distribution; (iii) redeem, repurchase
or retire for cash any Capital Stock provided, however, that, notwithstanding
the foregoing, so long as no Default or Event of Default is occurring and is
continuing, each Subsidiary may pay dividends and may make other distributions
on any Capital Stock of such Subsidiary which is owned by the Lessee or another
Consolidated Subsidiary which is a Subsidiary Guarantor.
17. Amendment to Existing Section 5.22: Section 5.22 of the Participation
Agreement (Transactions With Affiliates) is hereby amended by deleting Section
5.22 in its entirety and substituting in its place the following revised Section
5.22:
5.22 Transactions With Affiliates. The Lessee shall not enter into, renew,
extend or be a party to any transaction or series of related transactions
(including, without limitation, the purchase, sale, lease, transfer or exchange
of property or assets of any kind or the rendering of services of any kind) with
any of its Affiliates, except (i) in the ordinary course of business in a manner
and to an extent consistent with past practice and necessary or desirable for
the prudent operation of its business, for fair consideration and on terms no
less favorable to Lessee or such Subsidiary than would be obtainable in a
comparable arm's length transaction with a Person that is not an Affiliate
thereof, (ii) in connection with the Permitted Affiliate Transaction, the
Permitted Convertible Debenture Payments, Permitted Intercompany Advances and
payments in respect of Indebtedness permitted pursuant to clauses (j) and (o) of
the definition of "Permitted Indebtedness" in the Credit Agreement, (iii) with
the consent of the Administrative Agent (which consent shall not be unreasonably
withheld), the cancellation of the ▇▇▇▇▇▇ Documents (as defined in the Credit
Agreement) and the payments made to effect such cancellation and release, and
(iv) royalty and management fees, solely to the extent permitted by Section
6.02(h)(vi) of the Credit Agreement and to the extent consistent with past
practices.
18. Amendment to Existing Section 5.23: Section 5.23 of the Participation
Agreement (Subsidiary Guaranties) is hereby amended by deleting Section 5.23,
which was labeled "5.25 Subsidiaries" in the Seventh Amendment to Participation
Agreement dated as of April 2, 2001, in its entirety and substituting in its
place the following revised Section 5.23:
5.23 Subsidiaries.
Without the prior written consent of the Lenders, such consent not to be
unreasonably withheld, the Lessee will not, and will not permit any Subsidiary
to, create or acquire any Subsidiary subsequent to the Eighth Amendment
Effective Date.
19. Amendment to Existing Section 5.24: Section 5.24 of the Participation
Agreement (Stock Purchases, Etc.) is hereby amended by deleting Section 5.24 in
its entirety and substituting in its place the following revised Section 5.24:
5.24 Stock Purchases, Etc.
The Lessee will not, and will not permit any Consolidated Subsidiary of the
10
Lessee, to purchase any Capital Stock of the Lessee, whether in a "spot"
transaction, pursuant to an Equity Forward Contract or otherwise; nor will the
Lessee issue any Redeemable Preferred Stock subsequent to the Eighth Amendment
Effective Date without the prior written consent of the Lenders, such consent
not to be unreasonably withheld; nor will the Lessee create any new class of, or
issue any new voting Capital Stock, or warrants to acquire new voting Capital
Stock or redeem any capital stock, subsequent to the Eighth Amendment Effective
Date without the prior written consent of the Lenders, such consent not to be
unreasonably withheld; provided, however, that the Lessee shall not in any case
redeem more than $1,000,0000 of capital stock in the aggregate.
20. Amendment to Existing Section 5.25: Section 5.25 of the Participation
Agreement (No Prepayment of Senior Notes.) is hereby amended by deleting Section
5.25 in its entirety and substituting in its place the following revised Section
5.25:
5.25. No Prepayment of Senior Notes. The Lessee will not prepay, and will
not permit any Subsidiary to prepay, the principal amount of any of the Senior
Notes, heretofore issued by the Lessee, nor will Lessee repurchase or permit any
Subsidiary or Affiliate to repurchase, such Notes; provided, that the Lessee
shall not prepay nor permit any Subsidiary to prepay, the principal amount of
any of the Senior Notes, heretofore issued by the Lessee, nor will Lessee
repurchase or permit any Subsidiary or Affiliate to repurchase at any time an
Event of Default has occurred and is continuing under the Credit Agreement;
provided, further, that this Section 5.25 shall have no force and effect so long
as Section 5.01(v) of the Credit Agreement and the Side Letter (as defined in
the Credit Agreement) are in effect.
21. Amendment to Existing Section 5.26: Section 5.26 of the Participation
Agreement (Stock Purchases, Etc.) is hereby amended by deleting Section 5.26 in
its entirety and substituting in its place the following revised Section 5.26:
5.26. Subordinated Debt. The Lessee will not, and will not permit any
Subsidiary to: (i) make any payment (whether of principal, interest, premium or
otherwise) on any Subordinated Debt unless and except to the extent, if any,
expressly permitted by the express, written terms of subordination governing
such Subordination Debt as then approved in writing by the Required Lenders; or
(ii), in any event, make any prepayment of any part or all of any Subordinated
Debt, or otherwise repurchase, redeem or retire any instrument evidencing any
Subordinated Debt prior to maturity; or enter into any agreement which could in
any way be construed to amend, modify, alter or terminate any one or more
instruments or agreements evidencing or relating to any Subordinated Debt;
provided, that the Lessee shall not make any payments or prepayments on any
Subordinated Debt at any time an Event of Default has occurred and is continuing
under the Credit Agreement; provided, further, that this Section 5.26 shall have
no force and effect so long as Section 5.01(v) of the Credit Agreement and the
Side Letter (as defined in the Credit Agreement) are in effect.
22. Amendment to Existing Section 5.34: Section 5.34 of the Participation
Agreement (Operating Leases) is hereby amended by deleting Section 5.34 in its
entirety and substituting in its place the following revised Section 5.34:
5.34 Operating Leases. The Lessee shall not create, incur or suffer to
exist any obligations as lessee for the payment of rent for any real or personal
property under leases or agreements to lease other than (A) Capitalized Lease
Obligations which would not cause the aggregate amount of all obligations under
Capital Leases entered into after the Eighth Amendment Effective Date owing by
Lessee and its Subsidiaries in any Fiscal Year to exceed the amounts set forth
11
in subsection (b) of Section 5.19, and (B) Operating Lease Obligations which
would not cause the aggregate amount of all Operating Lease Obligations (other
than the portion of the Operating Lease Obligations which is based on the level
of sales of Lessee or the applicable Subsidiary) owing by Lessee and its
Subsidiaries to exceed $25,500,000 during any Fiscal Year.
23. Amendment to Existing Section 5.35: Section 5.35 of the Participation
Agreement (Real Property) is hereby amended by deleting Section 5.35 in its
entirety and substituting in its place the following revised Section 5.35:
5.35 [INTENTIONALLY OMMITTED]
24. Amendment to Existing Section 5.37: Section 5.37 of the Participation
Agreement (Sales Tax) is hereby amended by deleting Section 5.37 in its entirety
and substituting in its place the following revised Section 5.37:
5.37 Sales Tax. Effective beginning with the Fiscal Quarter ending closest
to March 31, 2002, the Lessee will not, and will not permit its Subsidiaries, to
have its and their total sales taxes (including late charges, penalties and
interest) exceed at any time Ten Million Dollars ($10,000,000).
25. Amendment to Appendix A: Appendix A of the Participation Agreement is
amended by adding the following definitions to Appendix A in the proper
alphabetical order:
"Capital Expenditures" means, with respect to any Person for any period,
the sum of (i) the aggregate of all expenditures paid or payable by such Person
and its Subsidiaries during such period that in accordance with GAAP are or
should be included in "property, plant equipment" or similar fixed asset account
on its balance sheet, whether such expenditures are paid in cash or financed and
including all Capitalized Lease Obligations paid or payable during such period,
and (ii) to the extent not covered by clause (i) above, the aggregate of all
expenditures by such Person and its Subsidiaries to acquire by purchase or
otherwise the business or fixed assets of, or the Capital Stock of, any other
Person, excluding in each case, all expenditures made in connection with the
repair, replacement or restoration of a Restaurant which is the subject of the
loss, destruction, or taking by condemnation, to the extent permitted by Section
2.05(c)(v) of the Credit Agreement.
"Cash Flow From Restaurant Operations" means, for any period and with
respect to any Restaurant location, the earnings before interest, taxes,
depreciation, amortization, the non-cash component of "operating lease expenses"
(as such term is defined under GAAP), Pre-Opening Costs, and allocable general
and administrative expenses of such Restaurant location for such period, which
shall be calculated as consistently accounted for by Lessee and its Subsidiaries
in their internal financial accounts and reports.
"Concentration Account Agreement" has the meaning set forth in Section
7.01(a) of the Credit Agreement.
"Contingent Obligation" means, with respect to any Person, any obligation
of such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, (i) the direct or indirect guaranty, endorsement (other than
for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of the obligation
of a primary obligor, (ii) the obligation to make take-or-pay or similar
payments, if required, regardless of nonperformance by any other party or
12
parties to an agreement, (iii) any obligation of such Person, whether or not
contingent, (A) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (B) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (C) to purchase
property, assets, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (D) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect thereof,
provided, however, that the term "Contingent Obligation" shall not include any
products warranties extended in the ordinary course of business. The amount of
any Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation with respect to which such
Contingent Obligation is made (or, if less, the maximum amount of such primary
obligation for which such Person may be liable pursuant to the terms of the
instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability with respect thereto
(assuming such Person is required to perform thereunder), as determined by such
Person in good faith.
"Disposition" means any transaction, or series of related transactions,
pursuant to which Lessee or any of its Subsidiaries sells, assigns, transfers or
otherwise disposes of any property or assets (whether now owned or hereafter
acquired) to any other Person, in each case whether or not the consideration
therefor consists of cash, securities or other assets owned by the acquiring
Person, excluding any sales of inventory in the ordinary course of business on
ordinary business terms, sales or other dispositions of Permitted Investments
(as such term is defined in the Credit Agreement), or sales or other
dispositions permitted by Section 6.02(c)(ii)(B) of the Credit Agreement and
closings of Restaurants owned or operated by Lessee or any of its Subsidiaries,
to the extent that such closings do not involve the transfer or other
disposition of the Restaurant or the assets owned and/or operated by Lessee or
the applicable Subsidiary in connection with such Restaurant.
"Dormant Subsidiaries" means Avado Holding Corp., a Delaware corporation,
Avado Operating Corp., a Georgia corporation, and Avado SCP VIII, Inc., an
Oregon corporation.
"Eighth Amendment Effective Date" shall mean, March 25, 2002.
"ERISA Affiliate" means, with respect to any Person, any trade or business
(whether or not incorporated) which is a member of a group of which such Person
is a member and which would be deemed to be a "controlled group" within the
meaning of Sections 414(b), (c), (m) and (o) of the Internal Revenue Code.
"Excluded Subsidiaries" means, individually and collectively, the Liquor
License Subsidiaries, the Dormant Subsidiaries and the Non-Wholly Owned
Subsidiaries.
"Existing Affiliate Advances" means all Indebtedness evidencing loans to
Affiliates, employees and officers of the Lessee, made prior to the date hereof,
to the extent disclosed on, and in an amount not in excess of the amount set
forth on, Schedule E to the Credit Agreement, and extensions and renewals
thereof.
"Existing Notes" means those certain promissory notes (other than the New
▇▇▇▇▇▇ Note) executed prior to the Eighth Amendment Effective Date by ▇▇▇ ▇.
13
▇▇▇▇▇▇, Jr., in favor of the Lessee.
"Hedging Agreement" means any and all transactions, agreements, or
documents now existing or hereafter entered into by Lessee or any of its
Subsidiaries, which provide for an interest rate, credit, commodity or equity
swap, cap, floor, collar, forward foreign exchange transaction, currency swap,
cross currency rate swap, currency option, or any combination of, or option with
respect to, these or similar transactions, for the purpose of hedging Lessee's
or its Subsidiaries' exposure to fluctuations in interest or exchange rates,
loan, credit exchange, security or currency valuations or commodity prices.
"Intercompany Advance" means loans made in the ordinary course of business
from the Lessee to one of the Lessee's Subsidiaries or from one of the Lessee's
Subsidiaries to the Lessee or another of the Lessee's Subsidiaries.
"Inventory" means all of each of the Loan Parties' now owned and/or
hereafter acquired right, title, and interest with respect to inventory,
including goods held for sale and/or lease or to be furnished under a contract
of service, goods that are leased by a Loan Party as lessor, goods that are
furnished by a Loan Party under a contract of service, and raw materials, work
in process, and/or materials used and/or consumed in such Loan Party's business.
"Investment" means, with respect to any Person, any investment by such
Person in any other Person (including Affiliates) in the form of loans,
guarantees, advances, or capital contributions (excluding (a) commission,
travel, and similar advances to officers and employees of such Person made in
the ordinary course of business, and (b) bona fide accounts arising from the
sale of goods or rendition of services in the ordinary course of business
consistent with past practice), purchases or other acquisitions for
consideration of Indebtedness or Capital Stock of such other Person (including
without limitation an acquisition of Indebtedness pursuant to the Tender Offer),
and any other items that are or would be classified as investments on a balance
sheet prepared in accordance with GAAP.
"Lender Group" has the meaning set forth in the introductory paragraph to
the Credit Agreement.
"Lessee's Business Operation Plan" shall mean that certain business plan
dated as of December 12, 2001, delivered by the Lessee to the Administrative
Agent and attached hereto as Schedule A.
"Lessee's EBITDA" means, with respect to Lessee and its Subsidiaries for
any period, the EBITDA of Lessee and its Subsidiaries for such period, minus the
EBITDA of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Holding Corp. and its Subsidiaries during such
period (if any).
"Initial Letter of Credit" the irrevocable standby letter of credit, in the
face amount of $600,000, issued for the account of the Lessee by a commercial
bank acceptable to the Administrative Agent in its sole discretion and naming
the Administrative Agent on behalf of the Lessor beneficiary thereof, and under
which the Administrative Agent may draw, upon the occurrence and during the
continuation of an Event of Default, substantially in the form and substance
satisfactory to the Administrative Agent in its sole discretion. Any draws on
the Initial Letter of Credit due to an Event of Default caused by a failure of
the Lessee to make a Scheduled Rent payment shall be applied to outstanding Rent
in inverse order of maturity and shall not cure the Event of Default caused by a
failure of the Lessee to make a Scheduled Rent payment.
14
"Letter of Credit" means one or more irrevocable standby letters of credit,
each in the face amount of $200,000, issued for the account of the Lessee by a
commercial bank acceptable to the Administrative Agent in its sole discretion
and naming the Administrative Agent on behalf of the Lessor beneficiary thereof,
and under which the Administrative Agent may draw, upon the occurrence and
during the continuation of an Event of Default, all substantially in the form
and substance satisfactory to the Administrative Agent in its sole discretion.
Any draws on any Letter of Credit due to an Event of Default caused by a failure
of the Lessee to make a Scheduled Rent payment shall be applied to outstanding
Rent in inverse order of maturity and shall not cure the Event of Default caused
by a failure of the Lessee to make a Scheduled Rent payment.
"Letter of Credit Obligation" means (i) the Lessee's obligation to pay
$600,000 with respect to the Initial Letter of Credit and (ii) the Lessee's
obligation to pay an additional $200,000 per month plus applicable taxes,
commencing on April 1, 2002, in connection with the Lease.
"Liquor License Subsidiaries" means, individually and collectively, Don
Pablo's TX Liquor, Inc., ▇▇▇ ▇▇▇▇▇▇ of Baltimore County, Inc., a Maryland
corporation, ▇▇▇ ▇▇▇▇▇▇ of ▇▇▇▇▇▇ County, Inc., a Maryland corporation, ▇▇▇
▇▇▇▇▇▇ of Prince George's County, Inc., a Maryland corporation, SMAS, Inc., a
Texas corporation, and any other Subsidiary of the Lessee which does not own any
assets or property other than a liquor license.
"Loan Documents" means the Credit Agreement, the Acknowledgment Agreement,
the Guaranties, the Security Agreements, the Side Letter, the Transferee Side
Letter, the Pledge Agreements, the Former Mortgages, the New Mortgages, the
Mortgage Assignments, the UCC Assignments, the Mortgage Amendments, the
Trademark Assignment, the Trademark Security Agreements, the Estoppel Letter,
the Concentration Account Agreement, the Credit Card Agreements, and all other
agreements, instruments, and other documents executed and delivered pursuant
hereto or thereto or otherwise evidencing or securing any Loan, as each of the
forgoing terms is defined in the Credit Agreement.
"Loan Party" shall have the meaning assigned to such term in the Credit
Agreement.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA for which a Loan Party or any ERISA Affiliate of such Loan
Party has contributed to, or has been obligated to contribute to, at any time
during the preceding six (6) years.
"Net Income" means, with respect to any Person for any period, the net
income (loss) of such Person for such period, determined in accordance with
GAAP.
"Net Interest Expense" means, with respect to any Person for any period,
gross interest expense of such Person for such period determined in conformity
with GAAP (including, without limitation, interest expense paid to Affiliates of
such Person, and accrued interest expense in connection with the TECONS), less
(i) the sum of (A) interest income for such period and (B) gains for such period
on Hedging Agreements (to the extent not included in interest income above and
to the extent not deducted in the calculation of such gross interest expense),
plus (ii) the sum of (A) losses for such period on Hedging Agreements (to the
extent not included in such gross interest expense) and (B) the upfront costs or
fees for such period associated with Hedging Agreements (to the extent not
included in gross interest expense), each determined in accordance with GAAP for
such Person.
15
"New ▇▇▇▇▇▇ Note" means that certain promissory note, dated as of the
Eighth Amendment Effective Date, executed by ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. in favor of the
Lessee, in an aggregate amount equal to $14,130,472.99 as contemplated by the
Permitted Affiliate Transaction.
"Non-Wholly Owned Subsidiaries" means, individually and collectively, Hops
of Louisiana, Ltd., a Florida limited partnership, Hops of the Rockies, Ltd., a
Florida limited partnership, Hops of the Rockies II, Ltd., a Florida limited
partnership, Hops of Cherry Creek, Ltd., a Florida limited partnership, Hops of
Colorado Springs, Ltd., a Florida limited partnership, Hops of Connecticut,
Ltd., a Florida limited partnership, Hops of Minnesota, Ltd., a Florida limited
partnership, Hops of Virginia, Ltd., a Florida limited partnership, Hops of
▇▇▇▇▇▇▇▇ ▇▇, Ltd., a Florida limited partnership, Hops of Baltimore County, LLC,
a Florida limited liability company, Hops of Greater Boston, Ltd., a Florida
limited partnership, and Hops of Rhode Island, LLC, a Rhode Island limited
liability company and any other Subsidiary of Lessee which is not a Wholly Owned
Subsidiary of Lessee, a Liquor License Subsidiary or a Dormant Subsidiary.
"Operating Lease Obligations" means all obligations for the payment of rent
for any real or personal property under leases or agreements to lease, other
than Capitalized Lease Obligations.
"Permitted Affiliate Transaction" means the proposed transaction pursuant
to which (a) the real property securing the Existing Notes will be sold, (b) the
proceeds of such sale (in an amount equal to the lesser of the amount of such
proceeds and the amount which is necessary to purchase Senior Subordinated Notes
with a face value equal to the face amount of the New ▇▇▇▇▇▇ Note) will be used
to purchase a portion of the Senior Subordinated Notes, which will be pledged to
secure the New ▇▇▇▇▇▇ Note, (c) the New ▇▇▇▇▇▇ Note will be executed and
delivered by ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. to Lessee, and (d) the Existing Notes will be
either terminated or exchanged for the New ▇▇▇▇▇▇ Note.
"Permitted Convertible Debenture Payments" means those payments that are
permitted pursuant to the terms of paragraph 1 of the Side Letter (as defined in
the Credit Agreement).
"Permitted Deferred Taxes" means with respect to any date (each such date,
a "Determination Date") (A) before the date that is 90 days after the Eighth
Amendment Effective Date, taxes which are set forth on Schedule 5.01(k)(ii) of
the Credit Agreement in an aggregate outstanding amount as of such Determination
Date which is not more than $9,741,000, (B) on or after the date that is 90 days
after the Eighth Amendment effective date and before the date that is 180 days
after the Eighth Amendment Effective Date, penalties with respect to sales taxes
set forth on Schedule 5.01(k)(iii) of the Credit Agreement in an aggregate
outstanding amount as of such Determination Date which is not more than
$2,100,000, and (C) as of any Determination Date, any other taxes, interest
thereon and/or penalties in an aggregate outstanding amount as of such
Determination Date which is not more than $250,000.
"Permitted Indebtedness" means:
(a) any Indebtedness owing to the Lender Group under the Loan Documents or
pursuant to the Obligations (as defined in the Credit Agreement);
(b) any other Indebtedness of Lessee or its Subsidiaries', other than the
Liquor License Subsidiaries, listed on Schedule 6.02(b) of the Credit Agreement,
including the extension of maturity, refinancing or modification of the terms
thereof; provided, however, that (i) such extension, refinancing or modification
is pursuant to terms that are not, in the aggregate, materially less favorable
16
to Lessee or any of its Subsidiaries than the terms of the Indebtedness being
extended, refinanced or modified and (ii) after giving effect to the extension,
refinancing or modification, such Indebtedness is not greater than the amount of
Indebtedness outstanding immediately prior to such extension, refinancing or
modification;
(c) Indebtedness of Lessee or its Subsidiaries', other than the Excluded
Subsidiaries, evidenced by Capitalized Lease Obligations entered into in order
to finance Capital Expenditures made by Lessee or such Subsidiaries in
accordance with the provisions of Section 5.19(b), which indebtedness, when
aggregated in the principal amount of all indebtedness incurred under this
clause (c) and clause (d) of this definition, does not exceed the amounts set
forth on Lessee's Business Operation Plan dated December 12, 2001;
(d) Indebtedness of Lessee or its Subsidiaries', other than the Excluded
Subsidiaries, permitted by clauses (e) and (l) of the definition of "Permitted
Liens";
(e) Indebtedness of Lessee or its Subsidiaries resulting from endorsement
of negotiable instruments received in the ordinary course of Lessee's or such
Subsidiary's business;
(f) Indebtedness of Lessee and its Subsidiaries resulting from (A) unpaid
taxes, licenses and fees, to the extent that such Indebtedness is either (i) not
yet due and payable, or (ii) the subject of a Permitted Protest, or (B)
Permitted Deferred Taxes.
(g) accrued and unfunded pension fund, workers compensation and other
employee benefit plan obligations and liabilities, provided that such
Indebtedness does not otherwise result in the existence of a Default or Event of
Default;
(h) Indebtedness in respect of guarantees by the Lessee or its Subsidiaries
of Indebtedness permitted hereunder;
(i) Indebtedness arising under a Concentration Account Agreement (as
defined in the Credit Agreement);
(j) Indebtedness in connection with the plans identified on Schedule
5.01(e) of the Credit Agreement;
(k) Indebtedness of Lessee or its Subsidiaries' resulting from Permitted
Investments (as defined in the Credit Agreement);
(l) Indebtedness secured by liens permitted under clause (j) of the
definition of Permitted Liens (as defined in the Credit Agreement);
(m) Indebtedness of Lessee or any of its Subsidiaries in connection with:
beer, wine and liquor related bonds, utility bonds, construction bonds and other
similar bonds or guaranties in respect of Restaurant operations or management in
the ordinary course of business;
(n) Indebtedness arising from Permitted Intercompany Advances;
(o) Indebtedness of Lessee to Excluded Subsidiaries;
(p) Indebtedness of Lessee and its Subsidiaries in connection with unpaid
insurance premiums in the ordinary course of business; and
17
(q) additional Indebtedness of Lessee or any of its Subsidiaries, other
than the Excluded Subsidiaries, not expressly permitted by clauses (a) through
(p) above, provided that the aggregate principal amount of the Indebtedness
outstanding under this clause (q) shall not at any time exceed $750,000.
"Permitted Intercompany Advance" means an Intercompany Advance, so long as
(a) the Intercompany Subordination Agreement (as defined in the Credit
Agreement) is in full force and effect with respect to the proposed Intercompany
Advance, (b) if the Person acting as the borrower with respect to such
Intercompany Advance is a Non-Wholly Owned Subsidiary and has not executed a
Guaranty (as defined in the Credit Agreement) or a Security Agreement (as
defined in the Credit Agreement), (i) the aggregate outstanding amount of all
such Intercompany Advances to non-guarantors other than Liquor License
Subsidiaries, as of the last day of each fiscal quarter of the Lessee, shall not
be greater than the sum of (A) the aggregate outstanding amount of such
Intercompany Advances as of December 30, 2001, and (B) $1,000,000, and (ii) the
proceeds of each such Intercompany Advance are used solely for Capital
Expenditures and other general business or operating expenses of a Restaurant
operated by such Person, and (c) if the Person acting as the borrower with
respect to such Intercompany Advance is a Liquor License Subsidiary and has not
executed a Guaranty (as defined in the Credit Agreement) or a Security
Agreement(as defined in the Credit Agreement), the proceeds of each such
Intercompany Advance are used solely for the obligation of such Liquor License
Subsidiary to pay for or maintain licenses and related expenses in respect
thereof.
"Permitted Protest" means the right of Lessee or any of its Subsidiaries to
protest any Lien (other than any such Lien that secures the Obligations (as
defined in the Credit Agreement) and Liens with respect to the interests of the
Owner Trustee under the Lease and the Lease Supplement), taxes (other than
payroll taxes or taxes that are the subject of a United States federal tax
lien), or rental payment, provided that (a) a reserve with respect to such
obligation is established by Lessee in such amount as is required under GAAP,
(b) any such protest is instituted promptly and prosecuted diligently by Lessee
or the applicable Subsidiary, in good faith, (c) the Agents (as defined in the
Credit Agreement) are satisfied that, while any such protest is pending, there
will be no impairment of the enforceability, validity, and/or priority of any of
the Lender Group's Liens on any material portion of the Collateral (as defined
in the Credit Agreement), and (d) the Administrative Agent is satisfied that,
while any such protest is pending, there will be no impairment of the
enforceability, validity, and/or priority of any of the Liens with respect to
the interests of the Owner Trustee under the Lease and the Lease Supplement.
"Pre-Opening Costs" means costs incurred by Lessee or any of its
Subsidiaries prior to opening a Restaurant location including wages and
salaries, hourly employee recruiting and training, initial license fees,
advertising, pre-opening parties, lease expense, food cost, utilities, meals,
lodging, and travel plus the cost of hiring and training the management teams.
"Provident Cash Management Agreement" means any Cash Management Services
Contract between Provident Bank and the Lessee or one or more if its
Subsidiaries existing prior to, on or subsequent to the Eighth Amendment
Effective Date.
"Senior Debt to EBITDA Ratio" means, for any period, the ratio of (a) the
aggregate amount of all Obligations (as defined in the Credit Agreement) as of
the last date of such period, to (b) Lessee's EBITDA for such period.
"Senior Notes" means those certain 9.75% Senior Notes due June 2006
18
originally issued by Apple South, Inc., a Georgia corporation, as
predecessor-in-interest to Lessee.
"Senior Subordinated Notes" means those certain 11.75% Senior Subordinated
Notes due June 2009 originally issued by Apple South, Inc., a Georgia
corporation, as predecessor-in-interest to Lessee.
"Tangible Net Worth" means, with respect to any Person at any time, (i) the
sum of the following accounts (or their equivalents) set forth on a consolidated
balance sheet of such Person and its Subsidiaries prepared in accordance with
GAAP: the par or stated value of all outstanding Capital Stock, capital surplus,
retained earnings (or less accumulated deficits), and, with respect to the
Lessee, the TECONS, less (ii) all intangibles included on the asset side of such
balance sheet, including, without limitation, goodwill (including any amounts,
however designated on such balance sheet, representing the excess of the
purchase price paid for assets or stock acquired over the value assigned thereto
on the books of such Person and its Subsidiaries), patents, trademarks, trade
names, copyrights and similar intangibles.
"Tender Offer" means the cash offer by the Lessee for the repurchase
Indebtedness in accordance with the Side Letter.
"Triggering Event" has the meaning specified therefor in Section 2.05(c)(v)
of the Credit Agreement.
"Wholly Owned Subsidiary" means, with respect to any Person at any date,
any corporation, limited or general partnership, limited liability company,
trust, association or other entity of which 100% of (A) the outstanding Capital
Stock having (in the absence of contingencies) ordinary voting power to elect a
majority of the board of directors of such corporation, (B) the interest in the
capital or profits of such partnership or limited liability company or (C) the
beneficial interest in such trust or estate is, at the time of determination,
owned or controlled directly or indirectly through one or more intermediaries,
by such Person.
26. Amendment to Appendix A: Appendix A of the Participation Agreement is
amended (i) by deleting the definitions of "Capital Stock", "EBITDAR", "Renewal
Rent Adjustment" and "Renewal Rent Adjustment Multiple" in their entirety and
(ii) by deleting the definitions of "Credit Agreement", "EBITDA", "Fee Letter",
"Fixed Charge Coverage Ratio", "GAAP", "Indebtedness", "Net Cash Proceeds",
"Operative Agreements" "Renewal Rent" and "Subordinated Debt" in their entirety
and replacing such definitions in Appendix A in the proper alphabetical order
with the following definitions:
"Capital Stock" means (i) with respect to any Person that is a corporation,
any and all shares, interests, participations or other equivalents (however
designated and whether or not voting) of corporate stock, and (ii) with respect
to any Person that is not a corporation, any and all partnership or other equity
interests of such Person.
"Credit Agreement" shall mean that certain Second Amended and Restated
Credit Agreement dated as of March 20, 2002, by and among Lessee, the lenders
signatory thereto, Foothill Capital Corporation, as administrative agent, and
Ableco Finance LLC, as collateral Agent, without giving effect to any amendments
thereto.
"EBITDA" means, with respect to any Person for any period, the Net Income
of such Person for such period, plus without duplication, the sum of the
following amounts of such Person for such period and to the extent deducted in
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determining Net Income of such Person for such period: (A) Net Interest Expense,
(B) income tax expense, (C) depreciation expense, (D) amortization expense, (E)
Pre-Opening Costs, (F) restructuring charges, asset revaluation and other
special charges, (G) extraordinary (on an after tax basis) or non-recurring
losses, (H) net losses attributable to Dispositions, (I) all other non cash
items (including without limitation, the cumulative effect from changes in
accounting principles (on an after tax basis)), and (J) items properly included
the category entitled "Other Income (Expense), Net" in Lessee's financial
statements (other than payments made to any limited partner of any non-wholly
owned Subsidiary) and which are properly excluded from the operating income of
Lessee and its Subsidiaries, in each case consistent with the past accounting
practices of Lessee and its Subsidiaries, in all instances in (A) through (J)
above, reducing Net Income, minus without duplication, the sum of the following
amounts of such Person for such period and to the extent included in determining
Net Income of such Person for such period: (W) extraordinary (on an after tax
basis) or non-recurring gains, (X) net gains attributable to Dispositions, (Y)
items properly included the category entitled "Other Income (Expense), Net" in
Lessee's financial statements (other than payments made to any limited partner
of any non-wholly owned Subsidiary) and which are properly excluded from the
operating income of Lessee and its Subsidiaries, in each case consistent with
the past accounting practices of Lessee and its Subsidiaries, and (Z) all other
non cash items (including without limitation, the cumulative effect from changes
in accounting principles (on an after tax basis)), in all instances (W) through
(Z) above, increasing Net Income, if any.
"Fee Letter" shall mean the letter agreement dated as of June 4, 1997, as
amended by that certain Amended and Restated Fee Letter, dated as of the Eighth
Amendment Effective Date, executed by Lessee, SunTrust, and SunTrust Capital
Markets, Inc. with respect to the Administrative Agent's Fees.
"Fixed Charge Coverage Ratio" means, for any period, the ratio of (i)
Lessee's EBITDA for such period, to (ii) the sum of (A) all principal of
Indebtedness for borrowed money of Lessee and its Subsidiaries scheduled to be
paid or prepaid during such period (not including prepayments of the Revolving
Loans (as defined in the Credit Agreement) unless such prepayments are
accompanied by a reduction of the Revolving Credit Commitment (as defined in the
Credit Agreement)), plus (B) Net Interest Expense of Lessee and its Subsidiaries
for such period, plus (C) income taxes paid or payable by Lessee and its
Subsidiaries during such period (other than income taxes paid or payable by
Lessee during such period as a result of the transactions contemplated by
paragraphs 2 or 3 of the Side Letter (as defined in the Credit Agreement)) plus
(D) cash dividends or distributions paid by Lessee or any of its Subsidiaries
(other than dividends or distributions paid (1) to Lessee, or (2) on account of
Lessee's interest obligations with respect to the Convertible Debentures (as
defined in the Credit Agreement)) during such period, plus (E) Capital
Expenditures made by Lessee and its Subsidiaries during such period, plus (F)
all amounts paid or payable by Lessee or any of its Subsidiaries in connection
with the Letter of Credit Obligation during such period.
"GAAP" means generally accepted accounting principles in effect from time
to time in the United States, provided that for the purpose of Sections 5.4,
5.5, 5.6, 5.7, 5.7A, 5.7B and 5.7C hereof and the definitions used therein,
"GAAP" shall mean generally accepted accounting principles in effect on the date
hereof and consistent with those used in the preparation of the Financial
Statements (as defined in the Credit Agreement), provided, further, that if
there occurs after the Eighth Amendment Effective Date any change in GAAP that
affects in any material respect the calculation of any covenant contained in
Sections 5.4, 5.5, 5.6, 5.7, 5.7A, 5.7B or 5.7C hereof, the Administrative Agent
and the Lessee shall negotiate in good faith amendments to the provisions of
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this Agreement that relate to the calculation of such covenant with the intent
of having the respective positions of the Administrative Agent and the Lessee
after such change in GAAP conform as nearly as possible to their respective
positions as of the Eighth Amendment Effective Date and, until any such
amendments have been agreed upon, the covenants in Sections 5.4, 5.5, 5.6, 5.7,
5.7A, 5.7B and 5.7C hereof shall be calculated as if no such change in GAAP has
occurred.
"Indebtedness" means, without duplication, with respect to any Person, (i)
all indebtedness of such Person for borrowed money; (ii) all obligations of such
Person for the deferred purchase price of property or services (other than trade
payables or other accounts payable incurred in the ordinary course of such
Person's business irrespective of when paid); (iii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments or
upon which interest payments are customarily made (excluding the TECONS); (iv)
all obligations and liabilities of such Person created or arising under any
conditional sales or other title retention agreement with respect to property
used and/or acquired by such Person, even though the rights and remedies of the
lessor, seller and/or lender thereunder are limited to repossession or sale of
such property; (v) all Capitalized Lease Obligations of such Person; (vi) all
obligations and liabilities, contingent or otherwise, of such Person, in respect
of letters of credit, acceptances and similar facilities; (vii) all obligations
and liabilities, calculated on a basis satisfactory to the Administrative Agent
and in accordance with accepted practice, of such Person under Hedging
Agreements; (viii) all Contingent Obligations; (ix) liabilities incurred under
Title IV of ERISA with respect to any plan (other than a Multiemployer Plan)
covered by Title IV of ERISA and maintained for employees of such Person or any
of its ERISA Affiliates; (x) withdrawal liability incurred under ERISA by such
Person or any of its ERISA Affiliates to any Multiemployer Plan; (xi) all other
items which, in accordance with GAAP, would be included as liabilities on the
liability side of the balance sheet of such Person; and (xii) all obligations
referred to in clauses (i) through (xi) of this definition of another Person
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) a Lien upon property owned by such
Person, even though such Person has not assumed or become liable for the payment
of such Indebtedness. The Indebtedness of any Person shall include the
Indebtedness of any partnership of or joint venture in which such Person is a
general partner or a joint venturer.
"Lease Rental" shall mean, for each Class of Equipment, during the Basic
Term and the Renewal Term, if any, the respective "Lease Rental" for such Class
of Equipment shown on Exhibit C attached to the Lease; provided, that the Lease
Rental shown on Exhibit C shall be subject to adjustment on the first day of the
Renewal Term for each Class of Equipment such that the Lease Rental shall
reflect an amount which is equal to four hundred (400) basis points plus the
rate of interest for U.S. Treasury Bills published on the first day of the
Renewal Term by the Bloomberg Reporting Service with a maturity equal to two (2)
years. Holder shall prepare a schedule reflecting the adjustment in the Lease
Rental as provided for above and deliver such schedule to Lessee promptly upon
the commencement of the Renewal Term with respect to each such Class of
Equipment.
"Net Cash Proceeds" means, (i) with respect to any Triggering Event or any
other Disposition by any Person, the amount of cash received (directly or
indirectly) from time to time (whether as initial consideration or through the
payment of deferred consideration) by or on behalf of such Person or any of its
Subsidiaries or Affiliates, in connection therewith after deducting therefrom,
solely in connection with a Triggering Event which involves a Disposition, only
(A) the principal amount of any Indebtedness secured by any Permitted Lien on
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any asset that is the subject of the Disposition (other than Indebtedness
assumed by the purchaser of such asset) which is required to be, and is, repaid
in connection with such Disposition (other than Indebtedness under this
Agreement), (B) reasonable expenses related thereto reasonably incurred such
Person or such Affiliate in connection therewith, (C) transfer taxes paid by
such Person or such Affiliate in connection therewith and (D) a provision for
net income taxes, whether paid or payable, in connection with such Disposition
(after taking into account any tax credits or deductions and any tax sharing
arrangements) and (ii) with respect to the issuance or incurrence of any
Indebtedness by any Person, or the sale or issuance by any Person of any shares
of its Capital Stock, the aggregate amount of cash received (directly or
indirectly) from time to time (whether as initial consideration or through the
payment of deferred consideration) by or on behalf of such Person or any of its
Subsidiaries or Affiliates in connection therewith after deducting therefrom
only reasonable brokerage commissions, underwriting fees and discounts, legal
fees and similar fees and commissions.
"Operative Agreements" shall mean each Certificate of Delivery and
Acceptance, the Participation Agreement, the Trust Agreement, the Certificates,
the Loan Agreement, the Notes, the Agency Agreement, each Assignment Agreement,
the Lease, each Lease Schedule, each Lease Replacement Schedule, each Purchase
Agreement Assignment, each Purchase Agreement, , the Initial Letter of Credit,
each Letter of Credit and the Fee Letter.
"Renewal Rent" shall mean, on any Scheduled Payment Date during the Renewal
Term for any Class of Equipment, an amount equal to (i) the Lease Rental for
such Class of Equipment, multiplied by (ii) the Equipment Cost for such Class of
Equipment.
"Subordinated Debt" shall mean Debt of the Lessee evidenced by, and limited
to, the Senior Subordinated Notes.
27. Amendment to Schedules: Schedule 5.8. 5.20 of the Participation
Agreement are amended by deleting Schedules 5.8 and 5.20 in their entirety and
replacing such schedules with the attached Schedules 5.8 and 5.20. In addition,
the Participation Agreement is hereby amended by adding the attached Schedule A.
C. WAIVERS
Upon the effectiveness of this Amendment and subject to Section D hereof,
the Holder, the Owner Trustee and the Lenders hereby waive the following Events
of Default that arose as a result of: (i) the failure of the Lessee maintain a
Minimum EBITDA of at least $16,900,000 for the Fiscal Quarter ending September
30, 2001 and $16,800,000 for the Fiscal Quarter ending December 31, 2001; (ii)
the failure of the Lessee to maintain a sales tax liability less than $8,000,000
for the Fiscal Quarters ending September 30, 2001 and December 31, 2001; (iii)
the failure to pay the additional $200,000 per month for the months of January,
February and March 2002, (iv) the failure of the Lessee maintain a Fixed Charge
Coverage Ratio greater than 1.20:1.00 for the Fiscal Quarter ending December 31,
2001, (v) the failure of the Lessee maintain a Total Debt/EBITDA Ratio less than
5.35:1.00 for the Fiscal Quarter ending December 31, 2001, (vi) the failure of
the Lessee maintain an Adjusted Total Debt to Adjusted Total Capital Ratio less
than .80:1.00 for the Fiscal Quarters ending September 30, 2001 and December 31,
2001, and (vii) the failure of the Lessee maintain a Total Senior Debt/EBITDA
Ratio less than 4.00:1.00 Fiscal Quarters ending September 30, 2001 and December
31, 2001.
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D. POST CLOSING COVENANT
The Lessee agrees to deliver to the Holder no later than 5:00 p.m. on March
26, 2002, the Initial Letter of Credit, with a copy to the Administrative Agent.
The Lessee acknowledges and agrees (a) that the failure of the Lessee to deliver
the Initial Letter of Credit by 5:00 p.m. on March 26, 2002, shall constitute an
Event of Default under the Participation Agreement or the Lease Agreement, as
the case may be and (b) that the waiver of the Events of Default by the Holder,
the Owner Trustee and the Lenders in Section C of this Amendment shall be void
and of no effect.
E. MISCELLANEOUS
1. This Amendment shall become effective (i) receipt by the Administrative
Agent of a duly executed counterpart of this Amendment executed by each party
hereto, (ii) receipt by the Administrative Agent of a duly executed copy of the
Credit Agreement, (iii) receipt by the Administrative Agent of a duly executed
counterpart of the Fee Letter, (iv) receipt by the Administrative Agent for the
ratable benefit of the Lenders, an amendment fee of $75,000, and (v) receipt by
the Administrative Agent of all other fees and expenses of the Administrative
Agent (including attorneys fees and expenses). Pursuant to Section 10.1 (a) of
the Trust Agreement, the Holder authorizes and requests that the Owner Trustee
execute this Amendment.
2. Except as expressly set forth herein, this Amendment shall be deemed not
to waive or modify any provision of the Participation Agreement or the other
Operative Agreements, and all terms of the Participation Agreement, as amended
hereby, and all other Operative Agreements shall be and remain in full force and
effect and shall constitute a legal, valid, binding and enforceable obligations
of the Lessee. All references to the Participation Agreement shall hereinafter
be references to the Participation Agreement as amended by this Amendment. To
the extent any terms and conditions in any of the Operative Agreements shall
contradict or be in conflict with any terms or conditions of the Participation
Agreement, after giving effect to this Amendment, such terms and conditions are
hereby deemed modified and amended accordingly to reflect the terms and
conditions of the Participation Agreement as modified and amended hereby. It is
not intended by the parties that this Amendment constitute, and this Amendment
shall not constitute, a novation or accord and satisfaction.
3. To induce the Owner Trustee, the Holder, the Lenders and the
Administrative Agent to enter into this Amendment (A) Lessee hereby represents
and warrants that the representations and warranties set forth in Section 3.2 of
the Participation Agreement, other than the representation and warranty set
forth in Section 3.2(g), as amended hereby are true and correct, (B) Lessee
hereby restates, ratifies and reaffirms each and every term and condition set
forth in the Participation Agreement, as amended hereby, and in the Operative
Agreements as amended hereby, and in the Operative Agreements, effective as of
the date hereof; and (C) Lessee hereby certifies that no Lease Event of Default
has occurred and is continuing.
4. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF GEORGIA AND ALL APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.
5. This Amendment may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same document.
6. This Amendment shall be binding on, and shall inure to the benefit of,
23
the successors and assigns of the parties hereto.
7. In the event that any part of this Agreement shall be found to be
illegal or in violation of public policy, or for any reason unenforceable at
law, such finding shall not invalidate any other part thereof.
8. TIME IS OF THE ESSENCE UNDER THIS AGREEMENT.
9. The parties agree that their signatures by telecopy or facsimile shall
be effective and binding upon them as though executed in ink on paper but that
the parties shall exchange original ink signatures promptly following any such
delivery by telecopy or facsimile.
10. Lessee agrees to pay all costs and expenses of Administrative Agent
incurred in connection with the preparation, execution, delivery and enforcement
of this Amendment and all other Operative Agreements executed in connection
herewith, including the reasonable fees and out-of-pocket expenses of
Administrative Agent's counsel.
11. This Amendment shall constitute an Operative Agreement for all purposes
of the Participation Agreement and shall be governed accordingly.
[Signatures appear on next page]
[SIGNATURE PAGE TO EIGHTH AMENDMENT TO
PARTICIPATION AGREEMENT]
IN WITNESS WHEREOF, the Lessee, the Owner Trustee, the Holder, each Lender
and the Administrative Agent have set their hands as of the day and year first
above written.
"LESSEE"
AVADO BRANDS, INC. formerly known as
Apple South, Inc.
By:_________________________________
Name:
Title:
"OWNER TRUSTEE"
▇▇▇▇▇ FARGO BANK NORTHWEST NATIONAL
ASSOCIATION, formerly known as First
Security Bank, National Association
By:_________________________________
Name:____________________________
Title:_____________________________
24
"HOLDER"
SunTrust Leasing Corporation, as successor by
merger to STI Credit Corporation
By:_________________________________
Name:____________________________
Title:_____________________________
[SIGNATURE PAGE TO EIGHTH AMENDMENT TO PARTICIPATION AGREEMENT]
"LENDERS"
SUNTRUST BANK, formerly known as
SunTrust Bank, Atlanta, as the Administrative Agent and
as a Lender
By:_________________________________
Name:____________________________
Title:_____________________________
FLEET CAPITAL CORP., as successor in interest
to BancBoston Leasing, Inc.
By:_________________________________
Name:____________________________
Title:_____________________________
SOUTHTRUST BANK, N.A.
By:_________________________________
Name:____________________________
Title:_____________________________
Exhibits and schedules to this agreement are not filed pursuant to Item
601(b)(2) of SEC Regulation S-K. By the filing of this Form 10-Q, the Registrant
hereby agrees to furnish supplementally a copy of any omitted exhibit or
schedule to the Commission upon request.
