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AMENDMENT NO. 2, dated as of May 21, 1998 (this
"AMENDMENT"), to the Credit Agreement dated as of January 7,
1998, as amended by Amendment No. 1 and Waiver dated as of
March 16, 1998 (the "CREDIT AGREEMENT"), among DENNY'S, INC.,
a California corporation, EL POLLO LOCO, INC., a Delaware
corporation, FLAGSTAR ENTERPRISES, INC., an Alabama
corporation, FLAGSTAR SYSTEMS, INC., a Delaware corporation,
QUINCY'S RESTAURANTS, INC., an Alabama corporation (each of
the foregoing, except for FLAGSTAR ENTERPRISES, INC.,
individually, a "BORROWER" and, collectively, the
"BORROWERS"), ADVANTICA RESTAURANT GROUP, INC., a Delaware
corporation ("PARENT"), the Lenders (as defined in Article I
of the Credit Agreement) and THE CHASE MANHATTAN BANK, a New
York banking corporation, as swingline lender (in such
capacity, the "SWINGLINE LENDER"), as issuing bank, as
administrative agent (in such capacity, the "ADMINISTRATIVE
AGENT") and as collateral agent (in such capacity, the
"COLLATERAL AGENT") for the Lenders.
A. The Lenders have extended credit to the Borrowers, and have
agreed to extend credit to the Borrowers, in each case pursuant to the terms and
subject to the conditions set forth in the Credit Agreement.
B. Parent and the Borrowers have requested that the Required Lenders
agree to amend certain provisions of the Credit Agreement as provided herein.
C. The Required Lenders are willing to agree to such amendments, on
the terms and subject to the conditions set forth herein.
D. Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Credit Agreement.
Accordingly, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the sufficiency and receipt
of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Amendment. (a) Section 1.01 of the Credit Agreement is
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hereby amended as follows:
(i) by inserting the following definition in the appropriate
alphabetical order:
"'QUINCY'S SALE' shall have the meaning assigned to such term in
Section 6.05(i)."
(ii) by substituting for the proviso at the end of the definition of
the term "Consolidated EBITDA" before the period the following proviso:
"; provided, however, that (a) Consolidated EBITDA for each period
that includes the date of occurrence of the Enterprises Sale that
occurred on
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April 1, 1998, will, solely for purposes of determining compliance
with Sections 6.11, 6.12, 6.13 and 6.14, be determined on a pro
forma basis, as if Enterprises had been sold on the first day of
such period, (b) upon and after the occurrence of a Quincy's Sale,
Consolidated EBITDA for each period that includes the date of
occurrence of such Quincy's Sale will, solely for purposes of
determining compliance with Sections 6.11, 6.12, 6.13 and 6.14, be
determined on a pro forma basis, as if Quincy's had been sold on the
first day of such period, and (c) after the occurrence of any
acquisition of any person by Parent, any Borrower or any Specified
Subsidiary, Consolidated EBITDA for each period that includes the
date of occurrence of such acquisition will, solely for purposes of
determining compliance with Sections 6.11 and 6.12, be determined on
a pro forma basis, based on the actual historical results of
operations of such person, as if such acquisition had occurred on
the first day of such period";
(iii) by substituting for the last sentence of the definition of the
term "Consolidated Interest Expense" the following sentence:
"Notwithstanding the foregoing, (a) Consolidated Interest Expense
(i) for each period that includes the date of occurrence of the
Enterprises Sale that occurred on April 1, 1998, will, for all
purposes in this Agreement, be determined on a pro forma basis, as
if Enterprises had been sold and the SRT Defeasance had been
effected on the first day of such period and (ii) for each period
will, for all purposes in this Agreement, be determined without
regard to (A) interest expense in respect of the Spardee's Mortgage
Notes, the Quincy's Mortgage Notes and the SRT Bonds and (B)
interest income in respect of the Defeasance Eligible Investments
(as defined in the Real Estate Financing Documents), and (b) upon
and after the occurrence of a Quincy's Sale, Consolidated Interest
Expense for each period that includes the date of such Quincy's Sale
will, for all purposes in this Agreement, be determined on a pro
forma basis, as if Quincy's had been sold on the first day of such
period.";
(iv) by substituting for the last sentence of the definition of the
term "Consolidated Lease Expense" the following sentence:
"Notwithstanding the foregoing, (a) Consolidated Lease Expense for
each period that includes the date of occurrence of the Enterprises
Sale that occurred on April 1, 1998, will, for all purposes of this
Agreement, be determined on a pro forma basis, as if Enterprises had
been sold on the first day of such period, and (b) upon and after
the occurrence of a Quincy's Sale, Consolidated Lease Expense for
each period that includes the date of occurrence of such Quincy's
Sale will, for all purposes of this Agreement, be determined on a
pro forma basis, as if Quincy's had been sold on the first day of
such period.";
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(v) by substituting for the text beginning with the phrase ", MINUS"
and ending immediately before the period in the definition of the term
"Consolidated Total Debt" the following text:
", MINUS, for purposes of determining the Consolidated Total Debt
Ratio and Section 6.11, the lesser of (x) $170,000,000 PLUS, at any
time after a Quincy's Sale has occurred, $75,000,000, (y) the Net
Cash Proceeds of the Enterprises Sale that occurred on April 1, 1998
and such Quincy's Sale that have not previously been applied to
incur Consolidated Capital Expenditures (or investments in lieu
thereof permitted under Section 6.04(k)), pay Indebtedness, effect
the SRT Defeasance or make investments or for any other purpose and
(z) the aggregate amount of all cash and cash equivalents of Parent,
the Borrowers and the Specified Subsidiaries (excluding the
Defeasance Eligible Investments (as defined in the Real Estate
Financing Documents) acquired in connection with the SRT Defeasance)
that would be set forth on a consolidated balance sheet of Parent,
the Borrowers and the Specified Subsidiaries prepared as of such
date in accordance with GAAP";
(b) Section 6.05 of the Credit Agreement is hereby amended as
follows:
(i) by deleting the word "and" set forth at the end of Section
6.05(g); and
(ii) by inserting the following new Sections:
"(i) Spartan may sell all the capital stock of Quincy's (the
"QUINCY'S SALE") and, in connection therewith, Parent may assign,
license, sublicense, convey and deliver (the "INTELLECTUAL PROPERTY
SALE") the intellectual property specified in the Stock Purchase
Agreement among Xxxxxxx Acquisition Corporation, Spartan and Parent
dated as of May 13, 1998 (the "QUINCY'S STOCK PURCHASE AGREEMENT"),
provided that (i) at the time of the Quincy's Sale and the
Intellectual Property Sale and immediately after giving effect
thereto no Event of Default or Default shall have occurred and be
continuing, (ii) the Quincy's Sale and the Intellectual Property
Sale are consummated in accordance with the terms of the Quincy's
Stock Purchase Agreement (without giving effect to any amendments,
waivers, supplements or other modifications thereto that are adverse
to the Lenders) and applicable law and regulations and otherwise on
terms reasonably satisfactory to the Administrative Agent, and (iii)
Spartan and Parent shall have received gross cash proceeds in the
aggregate of not less than $81,495,724 (subject to adjustment as
provided in the Quincy's Stock Purchase Agreement) from the Quincy's
Sale and the Intellectual Property Sale; and
(j) any of Parent, any Borrower or any Specified Subsidiary may
effect any transaction permitted by Section 6.04(k);"
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(c) Section 6.10 of the Credit Agreement is hereby amended by
substituting for the final proviso thereof the following proviso:
", PROVIDED FURTHER, that, in addition to the Consolidated Capital
Expenditures (or investments in lieu thereof permitted under Section
6.04(k)) permitted to be incurred pursuant to the foregoing
provisions of this Section, Parent, the Borrowers and the Specified
Subsidiaries may from time to time incur Consolidated Capital
Expenditures (or investments in lieu thereof permitted under Section
6.04(k)) in an aggregate amount during the term of this Agreement
not to exceed the lesser of (a) $170,000,000 PLUS, at any time after
a Quincy's Sale has occurred, $75,000,000 and (b) the Net Cash
Proceeds of the Enterprises Sale that occurred on April 1, 1998, and
such Quincy's Sale that have not previously been applied to incur
Consolidated Capital Expenditures (or investments in lieu thereof
permitted under Section 6.04(k)), pay Indebtedness, effect the SRT
Defeasance or make investments or for any other purpose";
SECTION 2. Representations and Warranties. Parent and the Borrowers
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represent and warrant to the Administrative Agent and to each of the Lenders
that:
(a) This Amendment has been duly authorized, executed and delivered
by Parent and each of the Borrowers and constitutes their legal, valid and
binding obligations, enforceable in accordance with its terms except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in
equity).
(b) Before and after giving effect to this Amendment, the
representations and warranties set forth in Article III of the Credit
Agreement are true and correct in all material respects with the same
effect as if made on the date hereof, except to the extent such
representations and warranties expressly relate to an earlier date.
(c) The execution, delivery and performance by Parent and each
necessary Loan Party of the Quincy's Stock Purchase Agreement, and the
completion of the Quincy's Sale and the Intellectual Property Sale (a)
have been duly authorized by all requisite corporate and, if required,
stockholder action and (b) will not (i) violate (A) any provision of law,
statute, rule or regulation, or of the certificate or articles of
incorporation or other constitutive documents or by-laws of Parent, any
Borrower or any Subsidiary, (B) any order of any Governmental Authority or
(C) any provision of any indenture, agreement or other instrument to which
Parent, any Borrower or any Subsidiary is a party or by which any of them
or any of their property is or may be bound or (ii) be in conflict with,
result in a breach of or constitute (alone or with notice or lapse of time
or both) a default under, or give rise to any right to accelerate or to
require the prepayment, repurchase or redemption of any obligation under
any such indenture, agreement or other instrument.
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(d) Before and after giving effect to this Amendment, no Event of
Default or Default has occurred and is continuing.
SECTION 3. Conditions to Effectiveness. This Amendment shall become
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effective as of the date first above written when the Administrative Agent shall
have received counterparts of this Amendment that, when taken together, bear the
signatures of Parent, each of the Borrowers and the Required Lenders.
SECTION 4. Credit Agreement. Except as specifically amended hereby,
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the Credit Agreement shall continue in full force and effect in accordance with
the provisions thereof as in existence on the date hereof. After the date
hereof, any reference to the Credit Agreement shall mean the Credit Agreement as
amended hereby.
SECTION 5. Loan Document. This Amendment shall be a Loan
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Document for all purposes.
SECTION 6. APPLICABLE LAW. THIS AMENDMENT SHALL BE
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GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.
SECTION 7. Counterparts. This Amendment may be executed in two or
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more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one agreement. Delivery of an executed
counterpart of a signature page of this Amendment by telecopy shall be effective
as delivery of a manually executed counterpart of this Amendment.
SECTION 8. Expenses. Parent and the Borrowers agree to reimburse the
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Administrative Agent for its out-of-pocket expenses in connection with this
Amendment, including the reasonable fees, charges and disbursements of Cravath,
Swaine & Xxxxx, counsel for the Administrative Agent.
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 written above.
ADVANTICA RESTAURANT GROUP, INC.,
by
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Name:
Title:
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DENNY'S, INC.,
by
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Name:
Title:
EL POLLO LOCO, INC.,
by
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Name:
Title:
QUINCY'S RESTAURANTS, INC.,
by
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Name:
Title:
THE CHASE MANHATTAN BANK,
individually and as Administrative Agent,
Collateral Agent, Swingline Lender and Issuing Bank,
by
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Name:
Title:
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SIGNATURE PAGE TO
AMENDMENT NO. 2,
DATED AS OF
May 21, 1998
To approve the Amendment:
Name of Institution ----------------------------------------------------------
by
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Name:
Title:
