FOURTH AMENDMENT TO PARTICIPATION AGREEMENT
THIS FOURTH 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 February 22, 1999, 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) 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)
STI CREDIT CORPORATION, a Nevada corporation, as assignee of 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, 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, and as amended by the
Third Amendment to the Participation Agreement, dated as of November 13, 1998
(as so amended, the "Participation Agreement");
WHEREAS, the Lessee, the Owner Trustee, the Holder, the Lenders and the
Administrative Agent have agreed to amend the Participation 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 the Holder and the Lenders to amend the
Participation Agreement and to continue to perform their obligations thereunder,
and for other good and valuable consideration, the sufficiency and receipt of
all of which are acknowledged, the Lessee, the Owner Trustee, the Holder, the
Lenders and the Administrative Agent agree as follows:
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.
B. AMENDMENTS:
1. Amendment to Existing Section 5.4: Effective as of September 27, 1998,
existing Section 5.4 of the Participation Agreement shall be deleted in its
entirety and the following revised Section 5.4 shall replace same:
Stockholder's Equity will at no time be less than the sum of (i)
$210,000,000, beginning with the last day of the Fiscal Quarter ended closest to
September 30, 1998.
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2. Amendment to Existing Section 5.11:Section 5.11 of the Participation
Agreement is amended by deleting subsection (k) of such Section in its entirety
and substituting in is place the following revised subsection (k):
(k) Other Restaurant Concepts:Make investments in other restaurant
concepts, besides "Applebee's," so long as the total amount of all such
investments made subsequent to April 1, 1998 does not exceed Twelve Million Five
Hundred Thousand Dollars ($12,500,00);
3. Amendment to Existing Section 5.11:Section 5.11 of the Participation
Agreement is amended by deleting subsection (m) of such Section in its entirety
and substituting in its place the following revised subsection (m):
(m) Other Advances: Make loans or advances to Affiliates, shareholders,
directors, officers or employees, in addition to those described in clauses (a)
through (l) hereinabove, in an aggregate amount, as to all such loans and
advances at any one time outstanding to all such Persons, not to exceed Twelve
Million Dollars ($12,000,000), so long as and provided that, (A) no Event of
Default then exists and (B) each such loan or advance is repaid, in full, not
later than two (2) years from the date of its disbursement.
4. Amendment to Existing Article 5: The Participation Agreement is further
amended by adding the following as a new Section 5.28:
5.28 Stock Purchases, Etc. The Lessee will not, and will not permit any
Consolidated Subsidiary of the Lessee, to purchase any Capital Stock of the
Lessee, whether in a "spot" transaction pursuant to an Equity Forward Contract
or otherwise, except in respect of shares of Capital Stock which are subject to
Equity Forward Contracts pending settlement as of December 31, 1998; nor will
Lessee enter into or permit any Consolidated Subsidiary to enter into, any
Equity Forward Contract or amend or modify any Equity Forward Contract in effect
on December 31, 1998 so as to increase the amount of, or price of any shares of
Capital Stock which are subject to Equity Forward Contracts pending settlement
as of December 31, 1998.
4. Amendment to Existing Article 5: The Participation Agreement is further
amended by adding the following as a new Section 5.29:
5.29 Prepayment of Senior Debt.The Lessee will not prepay, and will not
permit any Consolidated Subsidiary to prepay, the principal amount of any of the
Lessee's 9-3/4% Senior Notes, due 2006, heretofore issued by the Lessee in the
aggregate principal amount of $125,000,000.
5. Amendment to Appendix A: The definition of "Stockholder Equity" in
Appendix A of the Participation Agreement is amended by adding the following to
the end of such definition:
In determining "Stockholder's Equity," however, the amount of any Equity
Forward Contracts, pending settlement, shall be excluded therefrom.
6. Amendment to Appendix A: The definition of "Total Funded Debt" in
Appendix A of the Participation Agreement is amended by adding the following to
the end of such definition:
In determining "Total Funded Debt," however, the amount of any Equity
Forward Contracts, pending settlement, shall be excluded therefrom.
7. Amendment to Appendix A: Appendix A of the Participation Agreement is
amended by adding the following definition to Appendix A in the proper
alphabetical order:
"Equity Forward Contract" shall mean any contract, whether now or hereafter
existing, whereby the Lessee or any of its Consolidated Subsidiaries agrees,
directly or indirectly, to purchase Capital Stock of the Lessee on any future
date at a fixed price.
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C. MISCELLANEOUS
1. In consideration of, and to induce their entry into this Amendment,
Lessee shall remit to the Administrative Agent, for the ratable benefit of the
Lenders and the Holder based on their respective Commitments, an amendment fee
of $15,000 (the "Amendment Fee"). Upon the Administrative Agent's receipt of
executed signature pages from all parties to this Amendment and the Amendment
Fee, all amendments to the Participation Agreement made herein shall become
effective as of the date hereof unless expressly stated to become effective as
of any other date. Pursuant to Section 10.1 (a) of the Trust Agreement, the
Holder authorizes and request 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 restates and
renews each and every representation and warranty heretofore made by it under,
or in connection with, the execution and delivery of, the Participation
Agreement; (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,
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 a Operative Agreement for all purposes
of the Participation Agreement and shall be governed accordingly.
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[SIGNATURE PAGE TO FOURTH 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:_________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇
Chief Financial Officer and Treasurer
Attest:_____________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Assistant Secretary
"OWNER TRUSTEE"
FIRST SECURITY BANK, N.A.
By:_________________________________
Name:____________________________
Title:_____________________________
"HOLDER"
STI CREDIT CORPORATION
By:_________________________________
Name:____________________________
Title:_____________________________
"LENDERS"
SUNTRUST BANK, ATLANTA, as the Administrative
Agent and as a Lender
By:_________________________________
Name:____________________________
Title:_____________________________
By:_________________________________
Name:____________________________
Title:_____________________________
BANCBOSTON LEASING, INC.
By:_________________________________
Name:____________________________
Title:_____________________________
SOUTHTRUST BANK, N.A.
By:_________________________________
Name:____________________________
Title:_____________________________
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