FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (hereinafter, as it may be
modified, amended or supplemented from time to time, called this "Amendment"),
made and entered into as of June 1, 1998, by and among APPLE SOUTH, INC., a
Georgia corporation ("Borrower"); the financial institutions from time to time
party to the "Credit Agreement" defined and described below and identified as
the "Banks" therein (collectively, the "Banks" or, individually, a "Bank"); and
WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association,
successor-by-merger to WACHOVIA BANK OF GEORGIA, NATIONAL ASSOCIATION, acting as
agent for the Banks (Wachovia, when acting in such capacity, herein sometimes
called the "Agent").
WHEREAS, heretofore, Borrower, Banks and Agent made and entered into a
certain Credit Agreement, dated as of April 1, 1998 (which, as amended pursuant
hereto, is called herein the "Credit Agreement"); and
WHEREAS, Borrower, Banks and Agent have agreed to amend the Credit
Agreement in certain respects, as described more particularly below;
NOW, THEREFORE, in consideration of the sum of TEN DOLLARS ($10.00), the
foregoing premises, to induce Banks to amend the Credit Agreement and extend the
credit provided for therein, and for other good and valuable consideration, the
sufficiency and receipt of all of which are acknowledged, Banks, the Agent and
Borrower agree as follows:
1. DEFINITIONS, TERMS AND REFERENCES.
1.1 Terms Incorporated by Reference. Capitalized terms used in this
Amendment but not otherwise expressly defined herein shall have the same
meanings as given to such terms in the Credit Agreement.
1.2 New Terms. The following shall be deemed added to Section 1.1 of the
Credit Agreement in the appropriate alphabetical order:
"Subsidiary Guarantor" shall mean any wholly-owned Subsidiary of Borrower
which has executed a Subsidiary Guaranty pursuant to Section 5.21.
"Subsidiary Guaranty" shall mean a guaranty, in substantially the form of
Exhibit H attached hereto, pursuant to which a wholly-owned Subsidiary of
Borrower shall guarantee all debts, liabilities and obligations of the Borrower
hereunder, all in accordance with Section 5.21.
2. Amendment to Existing Section 5.19. Clause (vii) of existing Section
5.19 of the Credit Agreement is amended by deleting said clause (vii) in its
entirety and substituting in its place the following revised clause (vii):
(vii) Subsidiaries. Make investments in Consolidated Subsidiaries of the
Borrower in the ordinary course of, and pursuant to the reasonable requirements
of, the Borrower's and such Subsidiaries' respective businesses, provided that
the aggregate amount of such investments which may be outstanding at any one
time hereafter, as to all such Subsidiaries, other than any which are Subsidiary
Guarantors (as to which no limitation shall apply), shall not exceed five
percent (5%) of consolidated total assets of Borrower and its Consolidated
Subsidiaries; it being understood and agreed that (a) there shall be excluded
from such calculation any investment deemed made by the Borrower in DF&R
Restaurants, Inc., a Texas corporation which is a wholly-owned, Consolidated
Subsidiary of the Borrower, pursuant to the accounting for the prior acquisition
of such corporation by the Borrower as a pooling of interests; (b) there shall
be deducted in any event from the amount of investments in Subsidiaries which
may be made pursuant to this clause (vii) the aggregate amount of Capitalized
Lease Obligations of all Subsidiaries which are at any time outstanding, if and
to the extent not already counted against such amount as an investment of
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Borrower; i.e., as a Capitalized Lease Obligation owing to Borrower as lessor or
sublessor; and (c) the provisions of this clause (vii) shall be the exclusive
means by which the Borrower (or any Subsidiary) may make investments in any
Subsidiaries (whether or not wholly-owned Subsidiaries) and shall override any
other provisions of this Section 5.19 (including, particularly, clauses (x),
(xi) and (xii) below) which may be construed otherwise to permit such
investments.
3. Amendment to Existing Section 5.20. Existing Section 5.20 of the Credit
Agreement is amended by adding thereto immediately after the words "any of the
following" and before the colon in the fourth line thereof, these words:
,unless such Subsidiary has executed and delivered to the Agent a
Subsidiary Guaranty and all related documents required by Section 5.21 such that
Section 5.20, as so amended, shall read in its entirety as follows:
SECTION 5.20. Subsidiary Debt.
Except to the extent expressly permitted in clause (vii) of Section 5.19 of
this Agreement, the Borrower will not permit any Consolidated Subsidiary of the
Borrower which is a wholly-owned Subsidiary, directly or indirectly, of the
Borrower, to create, incur or suffer to exist any of the following, unless such
Subsidiary has executed and delivered to the Agent a Subsidiary Guaranty and all
other Subsidiary Guaranty Documents required by Section 5.21: (i) indebtedness
for borrowed funds; (ii) Capitalized Lease Obligations, provided, however, that
DF&R Restaurants, Inc. and its Subsidiaries may incur Capitalized Lease
Obligations in an aggregate amount not to exceed Ten Million Dollars
($10,000,000) at any one time outstanding; (iii) Guarantees; (iv) debts,
liabilities or obligations to any seller incurred to pay the deferred purchase
price of property or services having a deferred purchase price of One Million
Dollars ($1,000,000) or more, excepting, in any event, trade accounts payable
arising in the ordinary course of business and purchase options prior to their
exercise; and (v) debts, liabilities or obligations in respect of Synthetic
Leases.
4. Addition of New Section 5.21. A new Section 5.21 shall be added to the
Credit Agreement:
SECTION 5.21 Subsidiary Guaranties.
Effective as of June 1, 1998, Borrower shall cause each Consolidated
Subsidiary of the Borrower which is a wholly-owned Subsidiary, directly or
indirectly, of Borrower then existing or thereafter acquired or coming into
existence (excepting therefrom any having total assets of less than Ten Thousand
Dollars ($10,000)) to execute a Subsidiary Guaranty, together with all other
such documents which the Agent may reasonably request in connection therewith,
including a secretary's certificate, confirming the existence of enabling
authorization in respect of such Subsidiary Guarantor and signing officer
incumbency, and an opinion of counsel, confirming that such Subsidiary Guaranty
is a valid, binding and enforceable obligation of the Subsidiary party thereto,
subject to customary assumptions, exceptions and limitations acceptable to Agent
(herein called, collectively, together with the Subsidiary Guaranties, the
"Subsidiary Guaranty Documents"). As to all such Subsidiaries in existence on
June 1, 1998, Borrower shall cause all such Subsidiary Guaranty Documents in
respect thereof to have been executed and delivered as soon as practicable but
in any event by June 30, 1998. As to all such Subsidiaries acquired or coming
into existence subsequent to June 1, 1998, Borrower shall cause all such
Subsidiary Guaranty Documents in respect thereof to have been executed and
delivered as soon as practicable after, but in any event within thirty (30) days
after, its acquisition or creation.
5. EFFECTIVE DATE; CONDITIONS TO EFFECTIVENESS. All amendments to the
Credit Agreement made herein shall become effective as of June 1, 1998;
provided, however, that the following shall have been executed and/or delivered
to the Agent on or before such date, in form and substance satisfactory to the
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Banks, to-wit: (i) a Secretary's (or Assistant Secretary's) Certificate for the
Borrower; (ii) this Amendment; (iii) Subsidiary Guaranties and corresponding
Subsidiary Guaranty Documents for each wholly-owned Subsidiary of Borrower
existing on the date of this Amendment.
6. EFFECT OF AMENDMENT. Except as set forth expressly herein, all terms of
the Credit Agreement, as amended hereby, and the other Loan Documents, shall be
and remain in full force and effect and shall constitute the legal, valid,
binding and enforceable obligations of Borrower to Banks and Agent. To the
extent any terms and conditions in any of the Loan Documents shall contradict or
be in conflict with any terms or conditions of the Credit 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
Credit 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.
7. RESTATEMENT OF REPRESENTATIONS AND WARRANTIES. To induce Banks and Agent
to enter into this Amendment (A) Borrower 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) Borrower 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, and in the Loan Documents, effective as of the date hereof; and (C)
Borrower hereby certifies that no Event of Default or Default Condition has
occurred and is continuing.
8. GOVERNING LAW. This Amendment shall be governed by, and construed in
accordance with, the laws of the State of Georgia and all applicable federal
laws of the United States of America.
9. COSTS AND EXPENSES. Borrower agrees to pay all costs and expenses of
Agent incurred in connection with the preparation, execution, delivery and
enforcement of this Amendment and all other Loan Documents executed in
connection herewith, including the reasonable fees and out-of-pocket expenses of
Agent's counsel.
10. LOAN DOCUMENT. This Amendment shall constitute a Loan Document for all
purposes of the Credit Agreement, and be governed accordingly.
IN WITNESS WHEREOF, Borrower, the Agent, and each Bank have set their hands
as of the day and year first above written.
"BORROWER"
APPLE SOUTH, INC.
By:_________________________________
Xxxxx X. Xxxxx, Chief Financial
Officer and Treasurer
Attest:_____________________________
Xxxxx Xxxxxxxx, Assistant Secretary
"BANKS"
WACHOVIA BANK, NATIONAL
ASSOCIATION, as the Agent and as a Bank
By:________________________________
X. Xxxxxxxx Xxxxx, Vice President
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SUNTRUST BANK, ATLANTA
By:_________________________________
Name:____________________________
Title:_____________________________
By:_________________________________
Name:____________________________
Title:_____________________________
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND,"
NEW YORK BRANCH
By:_________________________________
Name:____________________________
Title:_____________________________
By:_________________________________
Name:____________________________
Title:_____________________________
BANKBOSTON, N.A.
By:_________________________________
Name:____________________________
Title:_____________________________
COMERICA BANK
By:_________________________________
Name:____________________________
Title:_____________________________
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