FOURTH AMENDMENT TO CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as of
October 13, 2000 (the "Amendment Date"), is made among (i) AVADO BRANDS, INC.,
as "Borrower"; (ii) WACHOVIA BANK, NATIONAL ASSOCIATION, FLEET NATIONAL BANK,
successor in interest to BANKBOSTON, N.A., and the other parties listed as a
"Bank" or the "Banks" on the signature page(s) hereof, as "Banks"; (iii)
WACHOVIA BANK, NATIONAL ASSOCIATION, as "Administrative Agent" for the Banks,
the "Syndication Agent," as defined below, and itself; and (iv) FLEET NATIONAL
BANK, successor in interest to BANKBOSTON, N.A., as "Syndication Agent" for the
Banks. The Borrower, the Banks, the Administrative Agent and the Syndication
Agent are hereinafter called, collectively, the "Parties." The Parties are
parties to a Credit Agreement, dated as of June 22, 1999 (which, as modified and
amended to date, is hereinafter called the "Credit Agreement"). The Parties are
entering into this Amendment for the purpose of further modifying and amending
the Credit Agreement in the manner specified below.
Accordingly, for value received, intending to be legally bound, the Parties
agree as follows:
1. Definitions.
--------------------
1.1. Terms Incorporated by Reference. Capitalized terms used herein, but
not expressly defined herein, shall have the meanings given to such terms in the
Credit Agreement (including those existing defined terms modified pursuant to
Section 1.2 below and those new defined terms added thereto pursuant to Section
1.3 below).
1.2. Modification of Certain Terms.
A. The existing definition of the term "Fixed Charge Coverage Ratio," which
is set in Section 1.1 of the Credit Agreement, shall be deleted in its entirety,
and the following revised definition of "Fixed Charge Coverage Ratio" shall be
substituted in its place (in keeping with the Borrower's stated intention to
exercise its right to suspend the making of further cash distributions in
respect of the TECONS in accordance with the terms thereof):
"Fixed Charge Coverage Ratio" shall mean, for any fiscal period, the ratio
which (A) the sum of (i) EBITDAR for such period plus (ii) the sum (without
duplication) of (a) any dividends paid in respect of Redeemable Preferred Stock
during such period, plus (b) any payments made or accrued during such period
(howsoever denominated or construed) in respect of any TECONS in such period,
regardless of maturity or the timing of any redemption or repurchase rights
granted in regard thereto (the foregoing herein called "TECONS Payments"), bears
to (B) the sum (without duplication), for the same such period, of: (i) any
dividends paid in respect to Redeemable Preferred Stock, plus (ii) that portion
of any TECONS Payments actually paid in cash; plus (iii) operating lease
expense; plus (iv) interest expense; plus (v) all payments made (including
payments made in settlement of existing obligations or claims) under, or in
respect of, interest rate "hedge," "swap," "collar" or similar arrangements,
whether now or hereafter existing, including, but not limited to, those
expressly permitted to exist under clause (ix) of Section 5.21; in each case,
for the Borrower and its Consolidated Subsidiaries for the same such period; all
as determined under GAAP.
B. The existing definition of the term "Total Debt," which is set forth in
Section 1.1 of the Credit Agreement, shall be amended by adding thereto, at the
end thereof, the following:
provided, however, that notwithstanding the foregoing, in making the
foregoing calculation there shall be excluded from clause (iii) above,
concerning, Debts, liabilities and obligations which are Guaranteed, any
Guarantee by the Borrower or any Subsidiary given in respect of any of the
former Applebee's locations owned or operated by the Borrower or any such
Subsidiary.
1.3. Introduction of Additional Terms. The following defined terms shall be
added to Section 1.1 of the Credit Agreement in the appropriate alphabetical
order:
"Existing Equipment Lease" shall mean the Master Equipment Lease Agreement,
dated as of September 24, 1997 (Apple South Trust No. 97-1), between the
Existing Equipment Lessor, as "Owner Trustee" and "Lessor" thereunder, and the
Borrower, as "Lessee" thereunder, together with all exhibits and schedules
thereto, and all modifications and amendments thereto.
"Existing Equipment Lessor" shall mean First Security Bank, National
Association, not individually, but solely as "Owner Trustee" under Apple South
Trust No. 97-1; and its successors and assigns.
"Existing Leased Equipment" shall mean, collectively, all equipment,
machinery and other personal property leased to the Borrower by the Existing
Equipment Lessor under the Existing Equipment Lease.
"Fourth Amendment" shall mean the Fourth Amendment to Credit Agreement,
dated on or about the Sale-Leaseback Date, made by and among the Borrower, the
Banks, the Administrative Agent and the Syndication Agent, amending this
Agreement, among other things, to reflect the Banks' consent to the
Sale-Leaseback Transaction.
"Hops" shall mean Hops Grill & Bar, Inc. a Florida corporation and
wholly-owned Subsidiary of the Borrower.
"Hops Marks" shall mean any trade names, trademarks, service marks and
other commercial symbols and applications related to the operation of "Hops
Restaurant Bar & Brewery" restaurants on the Sale-Leaseback Realty.
"Hops Marks License" shall mean the License Agreement, dated as of the
Sale-Leaseback Date, between the Borrower, as licensor, and the SPV, as
licensee, concerning the licensing of the Hops Marks to the SPV; together with
all schedules and exhibits thereto; and any modifications or amendments thereof.
"Sale-Leaseback Agreement" shall mean the Sale-Leaseback Agreement, dated
on or prior to the Sale-Leaseback Date, between Hops and Avado, as "Seller"
thereunder, and the SPV, as "Buyer" thereunder, concerning the sale and purchase
of the Sale-Leaseback Property; together with all schedules and exhibits
thereto; and any modifications or amendments thereof, including, particularly,
any done to give effect to the Swap Equipment Transactions.
"Sale-Leaseback Date" shall mean the date on which the Sale-Leaseback
Transactions are consummated.
"Sale-Leaseback Personalty" shall mean all machinery, equipment and other
personal property of Hops located at the Sale-Leaseback Realty. The foregoing
shall include, without limitation, any such machinery, equipment or other
personal property conveyed to the SPV subsequent to the Sale-Leaseback Date in
connection with the Swap Equipment Transactions.
"Sale-Leaseback Proceeds" shall mean all Net Cash Proceeds derived by the
Borrower from the Sale-Leaseback Transactions, including, without limitation,
any such Sale-Leaseback Proceeds derived by Borrower subsequent to the
Sale-Leaseback Date in connection with the Swap Equipment Transactions.
"Sale-Leaseback Property" shall mean, collectively, (i) the Sale-Leaseback
Realty and (ii) the Sale-Leaseback Personalty.
"Sale-Leaseback Realty" shall mean the real property on which the
following, existing locations of "Hops Restaurant Bar & Brewery" restaurants are
situated:
Property No. Location
------------ --------
9004 Tampa, FL
9004B Xxxxx, XX
0000 Xxxxx, XX
0000 X. Xxxx Xxxxxx, XX
0000 Xxxxxxx, XX
0000 Xx. Xxxxxxxxxx, XX
9021 Stuart, FL
9022 Plantation, FL
9025 Xxxxxxxxx, XX
0000 Xxxxxxxx, XX
9028 Kennesaw, GA
9032 Columbia, SC
9034 Orlando, FL
9035 Xxxxxx, XX
0000 Brandon, FL
0000 Xxxxxxx Xxxxx, XX
0000 Xxxxx Xxxxx, XX
0000 X. Xxxxxxxxxx, XX
9056 Xxxxxx Xxxx, XX
0000 Xxxxxxxx, XX
9067 Lone Tree, CO
"Sale-Leaseback Transactions" shall mean, collectively, the series of
successive transactions, to occur on or after the Sale-Leaseback Date, pursuant
to which (i) Hops shall convey the Sale-Leaseback Property to the SPV in
exchange for the Sale-Leaseback Proceeds, which shall be paid to the Borrower
directly on behalf of Hops, pursuant to the Sale-Leaseback Agreement, (ii) the
SPV shall lease the Sale-Leaseback Property to Hops pursuant to the SPV Master
Lease, (iii) the Borrower shall guaranty the payment obligations of Hops to the
SPV arising under the SPV Master Lease pursuant to the SPV Master Lease
Guaranty, and (iv) the Borrower shall license the use of the Hops Marks to the
SPV pursuant to the Hops Marks License. In addition to the foregoing, the term
"Sale-Leaseback Transactions" shall also include that portion of the Swap
Equipment Transactions pertaining to the leasing of additional Sale-Leaseback
Personalty under the SPV Master Lease, whether occurring on or subsequent to the
Sale-Leaseback Date.
"SPV" shall mean Pubs Property, LLC, a Delaware limited liability company
which is not Affiliated with the Borrower.
"SPV Master Lease" shall mean the Master Lease Agreement, dated on or about
the Sale-Leaseback Date, between the SPV, as lessor, and Hops, as lessee,
concerning the lease of the Sale-Leaseback Property to Hops by the SPV; together
with all schedules and exhibits thereto, and any modifications and amendments
thereof.
"SPV Master Lease Guaranty" shall mean the Guaranty Agreement, dated on or
about the Sale-Leaseback Date, made by the Borrower to and in favor of the SPV,
concerning the guaranty by the Borrower of the payment obligations of Hops to
the SPV arising under the SPV Master Lease; together with all schedules and
exhibits thereto, and any modifications and amendments thereof.
"Swap Equipment" shall mean all the equipment, machinery and other personal
property of Hops located at such Hops' locations (in which, heretofore, a Lien
has been granted to the Agent, on behalf of the Banks, as security for the
payment of the Notes) as the Borrower shall select in coordination with the
Existing Equipment Lessor, but which shall be acceptable in any event to the
Administrative Agent, for swapping purposes, to satisfy the requirements of the
SPV Master Lease, provided that the gross book value of all such equipment,
machinery and other personal property of Hops at all such locations does not
exceed $5,500,000.
"Swap Equipment Transactions" shall mean, collectively, the series of
successive transactions, to occur on or subsequent to the Sale-Leaseback Date,
pursuant to which (i) the Existing Equipment Lessor shall convey any of the
Existing Leased Equipment intended for lease pursuant to the SPV Master Lease to
Hops or the Lessor, (ii) the Lenders shall release their Liens on the Swap
Equipment, and (iii) Hops shall convey the Swap Equipment to the Existing
Equipment Lessor in substitution for that portion of the Existing Leased
Equipment constituting Sale-Leaseback Personalty being conveyed by Hops to the
SPV pursuant to the Sale-Leaseback Agreement.
2. Consents.
-----------------
2.1. Sale-Leaseback Transactions. The Banks do hereby consent to the
Sale-Leaseback Transactions; and authorize and direct the Administrative Agent
in conjunction therewith (i) to release all Liens on the Sale-Leaseback Property
as and when made subject to the terms of the SPV Master Lease, and (ii) to
subordinate any Liens on the Hops Marks to the extent necessary to reflect and
permit the licensing thereof to the SPV under the Hops Marks License; provided,
however, that each of the foregoing consents is expressly conditioned on (i) the
entire Sale-Leaseback Proceeds being paid over and delivered by the Borrower to
the Administrative Agent upon the Borrower's receipt thereof, whenever received
(whether at or after the Sale-Leaseback Date) for application to outstanding
Borrowings under the Line of Credit, to be shared ratably among the Banks; (ii)
at least $24,800,000 of such Sale-Leaseback Proceeds shall be so received on the
Sale-Leaseback Date; (iii) simultaneously with the Agent's receipt and
application of such Net Cash Proceeds on the Sale-Leaseback Date, the aggregate
Commitments of the Banks shall be permanently reduced by $20,000,000; that is,
to $105,000,000, with such reduction to be shared ratably among all Banks; and
(iv) if aggregate Sale-Leaseback Proceeds, whenever received, ever exceed
$28,500,000, then, any amount in excess of $28,500,000 shall also result, as and
when received, in a permanent reduction in the aggregate Commitments of the
Banks, to be shared ratably among them; (v) Sale-Leaseback Proceeds arising from
the Swap Equipment Transactions must be at least $3,300,000; and (vi) no Default
or Event of Default shall have occurred.
2.2. Swap Equipment Transactions. The Banks do hereby consent to the Swap
Equipment Transactions, as and when they should occur, and authorize and direct
the Administrative Agent to release all Liens on the Swap Equipment in
conjunction therewith; subject, however, to the Sale-Leaseback Transactions
pertinent thereto occurring as prescribed in Section 2.1 above.
3. Amendments.
-------------------
3.1. Restructuring Fee. There shall be added to existing Section 2.6 of the
Credit Agreement (Fees) a new Subsection 2.6.4, to read as follows:
2.6.4 Restructuring Fee. In consideration of the Banks' entry into the
Fourth Amendment, unless by May 31, 2001, all Debts, liabilities and obligations
owing to the Banks and the Administrative Agent have been fully paid and
satisfied and all Commitments have been terminated, then, effective as of June
1, 2001, the Banks shall have earned a restructuring fee, to be shared ratably
among the Banks, which fee shall be due and payable upon the earliest to occur
after May 31, 2001, of the following dates (the earliest of such dates being
called herein the "Due Date"): (i) the Termination Date, (ii) that date, prior
to the Termination Date, on which there occurs full payment of all Debts,
liabilities and obligations owing to the Banks and the Administrative Agent and
termination of all Commitments, or (iii) that date, prior to the Termination
Date, on which there occurs termination of the Commitments and acceleration of
the date for full payment of the Notes pursuant to Section 6.1 of the Credit
Agreement; with the amount of such fee then being due and payable to be based
upon the following schedule:
If the Due Date Occurs: The Restructuring Fee Shall Be:
------------------------------------------- --------------------------------
Subsequent to May 31, 2001, but $100,000
on or prior to June 30, 2001
------------------------------------------- --------------------------------
Subsequent to June 30, 2001, but $200,000
on or prior to September 30, 2001
------------------------------------------- --------------------------------
Subsequent to September 30, $300,000
2001, but on or prior to
December 31, 2001
------------------------------------------- --------------------------------
Subsequent to December 31, 2001 $400,000
------------------------------------------- --------------------------------
This fee shall be separate and apart from any other fee paid (or payable)
to the Banks or the Administrative Agent pursuant hereto or pursuant to the
terms of the Fourth Amendment.
3.2. Mandatory Reductions in Line of Credit. Existing Section 2.7.3 of the
Credit Agreement shall be deleted in its entirety and the following revised
version of Section 2.7.3 shall be substituted in its place (in order to reflect,
among other things, the reduction in the Commitments resulting from the
consummation of the Sale-Leaseback Transactions):
2.7.3. Mandatory Ratable Reductions in Commitments. Prior to the
Commitments being reduced to zero on the Termination Date, the Commitments of
the Banks shall reduce ratably, beginning with the Fiscal Quarter of Borrower
ending on April 4, 2001, and continuing thereafter at the end of each succeeding
Fiscal Quarter, by the amounts prescribed below as of each quarterly reduction
date prescribed below corresponding thereto:
Quarterly Reduction Date: Quarterly Reduction Amount
------------------------ --------------------------
April 4, 2001 $7,500,000
July 1, 2001 $7,500,000
September 30, 2001 $7,500,000
December 30, 2001 $7,500,000
March 31, 2002 $7,500,000
Effective with each mandatory reduction in the Commitments prescribed
above, the Borrower shall be required to repay Borrowings then outstanding by
that amount necessary to cause total Borrowings then outstanding not to exceed
the total amount of the Commitments, as so reduced each quarter, in accordance
with the terms of Section 2.9.1. If the Borrower should fail at any time or from
time to time to repay its Borrowings by the amounts required to be made in
conjunction with any reduction in Commitments prescribed hereinabove, as and
when so required to be made, its failure to do so shall constitute an Event of
Default and permit the Administrative Agent, on behalf of the Banks, to exercise
the rights and remedies provided herein and in the Loan Documents attendant upon
such Event of Default occurring. Without limitation of such attendant rights and
remedies, the Borrower acknowledges and agrees that the Administrative Agent
may, as the Borrower's attorney-in-fact, cause the Capital Stock of Belgo, PLC,
then being held by it as collateral hereunder, or such portions thereof as the
Administrative Agent determines, in its sole discretion, to be sold by the most
expeditious means practicable, after first giving Borrower three (3) Business
Days advance notice thereof (which notice period shall supersede and replace any
notice period otherwise set forth in the Loan Documents in respect of such
action), and apply any cash proceeds (net of all expenses of sale) derived
therefrom to the Borrowings, without necessity of further notice to, or demand
upon, the Borrower to do so, and without any liability to the Borrower for the
price obtained in any such sale or any tax liability of the Borrower resulting
from any such sale. The Commitments of the Banks shall also reduce ratably by
the amount of any mandatory prepayments of Borrowings from Asset Sales or Asset
Recoveries made subsequent to the Sale-Leaseback Date pursuant to Section 2.9.2
(subject to the limitations thereon set forth therein); it being understood and
agreed in connection therewith that any such reductions to the Commitments made
from Asset Sales or Asset Recoveries occurring subsequent to the Sale-Leaseback
Date (excluding Sale-Leaseback Proceeds, whenever received) shall be counted
against the amount of the quarterly reductions in the Commitments prescribed in
the table set forth above. For example, and without limitation, if the total
amount of Asset Recoveries and Net Cash Proceeds from Asset Sales made during
the period subsequent to the Sale-Leaseback Date but prior to April 4, 2001
equals $4,000,000, and the Commitments have been reduced by $3,000,000 as of
such date in accordance with the terms of Section 2.9.2, then, on April 4, 2001,
an additional $4,500,000 of the Commitments shall be required to be reduced in
order that total reductions in Commitments by such date amount to $7,500,000.
The Commitments, once reduced pursuant to the operation of this Section 2.7.3,
shall not be reinstated by the Banks; that is, all such reductions shall be
permanent.
The unused commitment fees, payable to each Bank in respect of its Unused
Commitment shall continue to be due and payable at the times and in the amounts
prescribed in Section 2.6.1, notwithstanding implementation of the foregoing
reductions in Commitments (however, in accordance with the definition thereof,
the Unused Commitments shall adjust consistent with each reduction in the
Commitments and the amounts of the unused commitment fees shall be adjusted
accordingly).
3.3. Asset Sales and Asset Recoveries. Existing Section 2.9.2 of the Credit
Agreement shall be deleted in its entirety and the following revised version of
said Section 2.9.2 shall be substituted in its place (in order to reflect, among
other things, a revised methodology in determining concurrent mandatory
reductions in Commitments):
2.9.2. Asset Sales and Asset Recoveries. To the extent that, (i) in
accordance with the provisions of Section 5.11, the Borrower or any of its
Subsidiaries consummates any Asset Sale on or subsequent to the Sale-Leaseback
Date, or (ii) the Borrower or any of its Subsidiaries collects any loan or
advance made pursuant to clause (xi) of Section 5.20 or otherwise makes any
recoveries in respect of any "investments" (as that term is defined in the
introductory paragraph to Section 5.20, and including particularly, but without
limitation, the "Real Receivable," as that term is defined in Section 2.2(f) of
Consent and Waiver No. 3 to this Agreement) (the foregoing herein called,
individually and collectively, "Asset Recoveries"), on or subsequent to the
Sale-Leaseback Date, then, as soon as received, the Borrower shall apply an
amount equal to one hundred percent (100%) of the Net Cash Proceeds from such
Asset Sale, in the case of clause (i) above, and one hundred percent (100%) of
the amount of such Asset Recovery, in the case of clause (ii) above, to repay
then outstanding Revolving Loans and, if Revolving Loans are reduced to zero,
Swing Loans, plus, in each case, accrued interest thereon to the date of
prepayment and any compensation required to be paid to any Banks by Section 8.6.
In each such case, the Commitments of the Banks shall also be simultaneously
reduced by an amount equal to seventy-five percent (75%) of such Net Cash
Proceeds so received and applied; provided, however, that, notwithstanding the
foregoing, (i) in respect of Sale-Leaseback Proceeds, the terms of Section 2.1
of the Fourth Amendment shall govern and control, and (ii) if and to the extent
any Event of Default or Default exists at the time any such Net Cash Proceeds
are received and applied, the Commitments shall reduce, instead, by an amount
equal to one hundred percent (100%) of such Net Cash Proceeds.
3.4. Modifications to Existing Financial Covenants and Addition of New
Financial Covenant. Existing Sections 5.4, 5.5, 5.6 and 5.7 of the Credit
Agreement shall be deleted, each in its entirety, and the following revised
versions of said Sections 5.4, 5.5, 5.6 and 5.7, respectively, shall be
substituted in their place and any Default or Event of Default heretofore
existing solely in respect of the Borrower's failure to comply with Sections
5.4, 5.5, 5.6 and 5.7 for the Fiscal Quarter ending October 1, 2000 (prior to
giving effect to this Amendment) are hereby waived by the Banks:
SECTION 5.4 Adjusted Total Debt/Adjusted Total Capital Ratio.
The Adjusted Total Debt/Adjusted Total Capital Ratio will not at any time
exceed .73:1.0.
SECTION 5.5 Fixed Charge Coverage Ratio.
Borrower's Fixed Charge Coverage Ratio, measured on a rolling four (4)
Fiscal Quarters' basis, as of the end of each Fiscal Quarter, commencing with
the Fiscal Quarter ending closest to October 1, 2000, shall be not less than the
ratio prescribed below for each Fiscal Quarter prescribed below corresponding
thereto:
Fiscal Quarter Ending: Ratio
--------------------- -----
October 1, 2000 1.10:1
December 31, 2000 1.25:1
April 4, 2001 1.30:1
July 1, 2001 1.30:1
September 30, 2001 1.40:1
December 30, 2001 1.45:1
March 31, 2002 1.50:1
and thereafter
SECTION 5.6 Total Debt/EBITDA Ratio.
The ratio which (i) the Total Debt of the Borrower and its Consolidated
Subsidiaries at the end of any Fiscal Quarter, commencing with the Fiscal
Quarter ended closest to October 1, 2000, bears to (ii) the EBITDA of the
Borrower and its Consolidated Subsidiaries, measured on a rolling four (4)
Fiscal Quarters' basis as of the end of such Fiscal Quarter (the "Total
Debt/EBITDA Ratio"), shall be not more than the ratio prescribed below as of the
end of each Fiscal Quarter corresponding thereto:
Fiscal Quarter Ending: Ratio
--------------------- -----
October 1, 2000 6.00:1
December 31, 2000 4.70:1
April 4, 2001 4.45:1
July 1, 2001 4.40:1
September 30, 2001 4.10:1
December 30, 2001 3.90:1
March 31, 2002 3.75:1
and thereafter
In computing EBITDA in respect of the foregoing ratio, the ratio set forth
in Section 5.7 below and the minimum amount of EBITDA set forth in Section 5.7A
below, (a) any asset or stock dispositions by the Borrower consisting of the
sale of a business line, segment or other group of related restaurants occurring
within a Fiscal Quarter shall be accounted for by reducing EBITDA by the
individual EBITDA attributable to each store within such group for such Fiscal
Quarter and the three (3) preceding Fiscal Quarters or, in the event that any
such restaurant had negative individual EBITDA for such periods, by increasing
EBITDA by the amount of such negative EBITDA; and (b) any asset or stock
acquisitions by the Borrower, to the extent otherwise then permitted to occur
hereunder (and without implying such permission), consisting of the purchase of
a business, line, segment or other group of related restaurants occurring within
a Fiscal Quarter shall be accounted for by increasing EBITDA by the individual
EBITDA attributable to each store within such group for such Fiscal Quarter and
for the three (3) preceding Fiscal Quarters or, in the event that any such store
had negative individual EBITDA for such periods, by decreasing EBITDA by the
amount of such negative EBITDA; in each instance, on an historical basis, in a
manner which the Borrower shall determine, but subject to prior review with, and
approval by, the Administrative Agent.
SECTION 5.7. Total Senior Debt/EBITDA Ratio. The ratio which (i) the Total
Senior Debt of the Borrower and its Consolidated Subsidiaries at the end of any
Fiscal Quarter, commencing with the Fiscal Quarter ended closest to October 1,
2000, bears to (ii) EBITDA of the Borrower and its Consolidated Subsidiaries,
measured on a rolling four (4) Fiscal Quarters' basis as of the end of such
Fiscal Quarter (adjusted, however, as reflected in Section 5.6), shall be not
more than the amounts prescribed below for each Fiscal Quarter prescribed below
corresponding thereto:
Fiscal Quarter Ending: Ratio
--------------------- -----
October 1, 2000 4.30:1
December 31, 2000 3.25:1
April 4, 2001 3.05:1
July 1, 2001 3.00:1
September 30, 2001 2.75:1
December 30, 2001 2.55:1
March 31, 2002 2.50:1
and thereafter
and there shall be added to the Credit Agreement, immediately following
amended Section 5.7 thereof (see above), a new Section 5.7A, to read as follows:
SECTION 5.7A. Minimum EBITDA. EBITDA of the Borrower and its Consolidated
Subsidiaries for each of the following Fiscal Quarters shall be at least that
amount prescribed opposite such Fiscal Quarter:
Fiscal Quarter Ending: EBITDA
--------------------- ------
December 31, 2000 $17,900,000
April 4, 2001 $17,700,000
July 1, 2001 $20,000,000
September 30, 2001 $15,000,000
December 30, 2001 $19,000,000
March 31, 2002 $17,000,000
and thereafter
3.5. Asset Sales. There shall be deemed added to the end of existing
Section 5.11 of the Credit Agreement the following sentence:
Notwithstanding, however, the preceding terms of this Section 5.11 or the
terms of clause (vii) of Section 9.6 below, so long as no Default or Event of
Default shall have occurred, no consent of the Banks shall be required for any
Asset Sale otherwise made in conformity with the preceding terms of this Section
5.11 (but for the provision concerning consents) if, but only if, such Asset
Sale concerns the properties listed below and the Net Cash Proceeds derived
therefrom are not less than ninety percent (90%) of the targeted amount
prescribed below opposite each such listed property (the foregoing herein
called, for each such property, "Minimum Net Cash Proceeds"):
------------------------------------------------------ -------------------------
Targeted
Property Net Cash
Proceeds
------------------------------------------------------ -------------------------
Xxxxxxxx'x real estate $2,000,000
------------------------------------------------------ -------------------------
Sale of DP Alpharetta site $1,000,000
------------------------------------------------------ -------------------------
Sale of DP office (Bedford, TX) $5,250,000
------------------------------------------------------ -------------------------
Sale of Gainesville Hardee's $810,000
------------------------------------------------------ -------------------------
Sale of Hops Aventura site $1,000,000
------------------------------------------------------ -------------------------
Sale of Williamsburg Applebee's $480,000
------------------------------------------------------ -------------------------
Collection of Wis. Hospitality note $1,200,000
------------------------------------------------------ -------------------------
Collection of Apple Capital note (2001) $2,400,000
------------------------------------------------------ -------------------------
Sale of Belgo Group PLC stock (203,233,460 shares) $7,000,000
(prorated per share, if less than 100% is sold)
------------------------------------------------------ -------------------------
and the Administrative Agent may, without the consent of any Bank, release
the Liens of the Administrative Agent on any such properties made subject to any
Asset Sale provided that such Minimum Net Cash Proceeds are received as
prescribed hereinabove prior thereto and applied as prescribed in Section 2.9.2.
3.6. New Limit on Capital Expenditures. Clause (ii) of Section 5.20 of the
Credit Agreement shall be deleted in its entirety and the following revised
version of said clause (ii) of Section 5.20 shall be substituted in its place:
(ii) Capital Expenditures. Make capital expenditures in the ordinary course
of business; provided, however, commencing with the Fiscal Year ending closest
to December 31, 2000, capital expenditures shall be limited, in amount as
follows: (i) for the Fiscal Year ending closest to December 31, 2000,
$50,000,000; (ii) for the Fiscal Year ending closest to December 31, 2001,
$25,000,000; provided, however, that, within the Fiscal Year ending closest to
December 31, 2001, in addition to the aforesaid overall limitation (A) capital
expenditures shall not exceed, in any event (1) $6,600,000 for the Fiscal
Quarter ending April 4, 2001, (2) $13,200,000, on a cumulative basis, for the
two (2) Fiscal Quarters' period ending July 1, 2001, and (3) $20,400,000, on a
cumulative basis, for the three (3) Fiscal Quarters' period ending September 30,
2001, and (B) no such capital expenditures in excess of $3,000,000 may be made
in any one Fiscal Quarter in such Fiscal Year unless and until the Agent has
received financial statements from the Borrower confirming its continuing
compliance with all financial covenants set forth in Sections 5.4 through 5.7
hereof and this clause (ii) of Section 5.20 as of and for the preceding Fiscal
Quarter; and (iii) for each Fiscal Year subsequent to the fiscal year ending
closest to December 31, 2001, $12,500,000. In addition to the foregoing, in each
Fiscal Year subsequent to the Fiscal Year ending closest to December 31, 2000,
capital expenditures shall not include any expenditures for the purchase of land
or buildings or real estate interests other than fixtures and leasehold
improvements.
3.7. Special Life Insurance Program. The permission, heretofore granted to
the Borrower, pursuant to Section 5.20(ix) of the Credit Agreement, to invest up
to $850,000 per Fiscal Year in the making of annual premiums payable on certain
life insurance policies on the lives of Xxx X. XxXxxx, Xx. and Xxxx XxXxxx, is
hereby revoked, effective immediately, but any funds invested therein through
the Amendment Date shall remain as permitted investments.
3.8. Restaurant Concepts. Notwithstanding any other prohibition or
restriction thereon heretofore existing in respect of investment in restaurant
concepts and joint ventures under Section 5.20(x) of the Credit Agreement, so
long as no Default has occurred and is continuing or would be caused thereby,
the Borrower may invest up to $1,000,000, in the aggregate, in the "San Xxxxxxx"
restaurant concept/joint venture subsequent to the Amendment Date (the amount of
investment by the Borrower therein as of the Amendment Date being zero);
provided, however, that, subsequent to the Amendment Date no further investments
may be made pursuant to said Section 5.20(x), of whatever sort, in any
restaurant concept or joint venture except for the aforementioned "San Xxxxxxx"
investment.
3.9. Certain Advances to Affiliates. All loans and advances to Affiliates,
including, particularly, but without limitation, Xxx X. XxXxxx, Xx., outstanding
on the Amendment Date pursuant to the operation and effect of former Section
5.20(xi) (none being permitted to be made since March 31, 2000 in conjunction
with the elimination of the permissions granted under said clause (xi) as of
such date), shall be repaid in full not later than the Termination Date,
notwithstanding any provision of the Credit Agreement heretofore requiring any
earlier date; e.g., March 31, 2001, as the deadline date for such full payment
to be made.
3.10. Restrictions on Dividends. Existing Section 5.22 of the Credit
Agreement is hereby deleted in its entirety and the following revised version of
said Section 5.22 is substituted in its place:
SECTION 5.22 Dividends and Distributions. The Borrower will not, nor will
the Borrower 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, (A) each
Subsidiary may make Distributions on any Capital Stock of such Subsidiary owned
by the Borrower or another Consolidated Subsidiary which is a Subsidiary
Guarantor, and (B) the Borrower may make distributions from time to time in
respect of the TECONS as and when due and payable in accordance with the terms
thereof.
4. Miscellaneous.
----------------------
4.1. Effect and Effective Date of Amendments. The effective date of the
amendments to the Credit Agreement set forth hereinabove shall be the Amendment
Date. Except as set forth expressly herein, all terms of the Credit Agreement
shall remain unchanged and in full force and effect. It is not intended by the
Parties that this Amendment constitute, and this Amendment, shall not constitute
a novation.
4.2. Georgia Law. This Amendment shall be construed in accordance with and
governed by the law of the State of Georgia.
4.3. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
4.4. Entire Agreement. This Amendment constitutes the entire agreement
among the parties with respect to the subject matter hereof, and shall supersede
and replace any agreements or commitments to agree, whether oral or written,
heretofore existing in regard thereto.
4.5. Restatement of Representations and Warranties; Certifications. To
induce all other Parties to enter into this Amendment, the Borrower (A) hereby
restates and renews each and every representation and warranty heretofore made
by it under, or in connection with, the execution and delivery of, the Credit
Agreement; (B) hereby restates, ratifies and reaffirms each and every term and
condition set forth in the Credit Agreement, as amended hereby, and in the Loan
Documents, as amended hereby, effective as of the date hereof. The Borrower
hereby certifies that, after giving effect to this Amendment, no Default has
occurred which is continuing other than any which, heretofore, has been waived
in writing by the Banks. The Borrower hereby further certifies that, as of the
date hereof, no right of setoff, defense, counterclaim or cross-claim exists in
its or any Subsidiary's favor in respect of any debts, liabilities or
obligations of the Borrower or any Subsidiary to any Lender, the Administrative
Agent or the Syndication Agent and the agents, officers and employees of each of
them (the "Other Parties") arising under or pursuant to the Credit Agreement;
and the Borrower, for itself and each Subsidiary, hereby waives and releases
each of the Other Parties from any claim, action or cause of action which
exists, or hereafter may exist, in the Borrower's or any Subsidiary's favor in
respect of any action (or failure to act) taken (or omitted to be taken) by any
of the Other Parties in connection herewith or pursuant to the Credit Agreement.
4.6. Borrower as Agent. In executing this Amendment, Borrower is acting for
itself individually and as agent for each Subsidiary which is party to any Loan
Document, and, in the latter regard, binding each such Subsidiary to the terms
hereof without necessity of giving further notice to, or obtaining any further
consent from, any such Subsidiary.
4.7. Introduction of Consultants. As soon as practicable after the
Amendment Date, but in any event not later than November 3, 2000, the
Administrative Agent shall, for the benefit of the Banks, retain the services of
a nationally recognized firm of forensic accounting consultants reasonably
acceptable to the Required Banks for the purpose of reviewing the Borrower's
historical and forecasted financial performance and condition (with a particular
emphasis on cash flows) and related matters pertaining to the Borrower's
business operations on an ongoing basis; and the Borrower shall reimburse the
Agent for the reasonable costs and expenses of such consultants, provided that,
unless an Event of Default then exists, such reimbursements shall not exceed,
within any consecutive twelve (12) months' period, the aggregate sum of
$100,000. In further regard to the foregoing, the Borrower agrees to cooperate
with such consultants in accomplishing such review on a timely basis.
4.8. Additional Reporting. With reference to Section 5.19, henceforth, the
Borrower shall provide the Banks weekly with a rolling cash flow forecast for
the thirteen (13) weeks following the report date, together with a report of the
prior week's actual performance compared to projections, to be in such form and
detail as the Administrative Agent or the Syndication Agent may reasonably
request.
5. Conditions Precedent. The following shall constitute express conditions
precedent to any obligations of the Banks hereunder: (i) the Administrative
Agent shall have received from the Borrower and each Bank a duly executed
counterpart of this Amendment; (ii) the Administrative Agent shall have received
from the Secretary (or any Assistant Secretary) of the Borrower an incumbency
and authority certificate in respect of the officer(s) executing this Amendment
on behalf of the Borrower, in form and substance satisfactory to the
Administrative Agent; (iii) the Administrative Agent shall have received from
the Borrower's legal counsel an opinion of counsel as to this transaction and
the transactions contemplated hereby; (iv) the Administrative Agent shall have
received from the Borrower, reviewed and approved the terms of the
Sale-Leaseback Agreement, the SPV Master Lease, the SPV Master Lease Guaranty
and all other documents pertaining to the Sale-Leaseback Transactions and, to
the extent occurring on the Sale-Leaseback Date, the Swap Equipment
Transactions; (v) the Sale-Leaseback Transactions and, to the extent occurring
on the Sale-Leaseback Date, the Swap Equipment Transactions shall have been
consummated in accordance with the terms hereof and, without limitation, the
conditions described in Section 2.1, excluding those in clause (v) thereof,
shall have been satisfied; and (vi) the Administrative Agent shall have received
from the Borrower evidence satisfactory to the Administrative Agent that all
consents and approvals of third party creditors of the Borrower (excluding the
Banks) necessary to permit the consummation of the Sale-Leaseback Transactions
and, to the extent occurring on the Sale-Leaseback Date, the Swap Equipment
Transactions have been obtained on terms which do not contravene any terms
hereof or of the Credit Agreement. If each of the foregoing conditions precedent
is not completely fulfilled by October 20, 2000, then effective on such date,
this Amendment shall cease to be effective.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective authorized officers, as of the day and year
first above written.
"BORROWER"
AVADO BRANDS, INC.
By:_________________________________
Name:
--------------------------
Title:
-------------------------
Attest:
-----------------------------
Name:
----------------------
Title:
---------------------
"BANKS"
WACHOVIA BANK, NATIONAL
ASSOCIATION, as the Administrative
Agent and as a Bank
By:
---------------------------------
Name:
--------------------------
Title:
-------------------------
FLEET NATIONAL BANK, as successor
to BANKBOSTON, N.A., as Syndication
Agent and as a Bank
By:________________________________
Name:_________________________
Title:________________________
SUNTRUST BANK, as a Bank
By:________________________________
Name:__________________________
Title:_________________________
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK INTERNATIONAL,"
NEW YORK BRANCH, as a Bank
By:_________________________________
Name:__________________________
Title:_________________________
By:_________________________________
Name:__________________________
Title:_________________________
COMERICA BANK, as a Bank
By:_________________________________
Name:_________________________
Title:________________________
SOUTHTRUST BANK, NATIONAL
ASSOCIATION, as a Bank
By:_________________________________
Name:_________________________
Title:________________________
