AMENDMENT NUMBER ONE TO SECOND AMENDED
AND RESTATED CREDIT AGREEMENT
THIS AMENDMENT NUMBER ONE TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(this "Amendment") dated as of June 4, 2002, is entered among AVADO BRANDS,
INC., a Georgia corporation ("Borrower"), each of the lenders that from time to
time is a party hereto (such lenders, each individually a "Lender" and
collectively, the "Lenders"), FOOTHILL CAPITAL CORPORATION, a California
corporation, as administrative agent for the Lender Group (in such capacity,
together with its successors in accordance with the Transferee Side Letter, if
any, in such capacity, "Administrative Agent"), and ABLECO FINANCE LLC, a
Delaware limited liability company, as collateral agent for the Lender Group (in
such capacity, together with its successors in accordance with the Transferee
Side Letter, if any, in such capacity, the "Collateral Agent"; Administrative
Agent, Collateral Agent and the Lenders, individually and collectively, the
"Lender Group"), in light of the following:
W I T N E S S E T H
WHEREAS, Borrower, the Lenders, Administrative Agent, and Collateral Agent
are parties to that certain Second Amended and Restated Credit Agreement, dated
as of March 20, 2002 (as amended, restated, supplemented, or modified from time
to time, the "Credit Agreement");
WHEREAS, Borrower has requested that the Term Loan Lenders make a Term Loan
to Borrower in the amount of $5,400,000 (the "Designated Term Loan"), for the
purpose of enabling the Borrower to make a payment of interest in the amount of
$5,400,000 in respect of the Convertible Debentures (the "Designated Payment");
WHEREAS, pursuant to Section 5.01(v) of the Credit Agreement, the proceeds
of Term Loans may not be used to fund payments of interest which are due and
payable in respect of the Convertible Debentures; and
WHEREAS, notwithstanding the provisions of the Credit Agreement and the
other Loan Documents, subject to the terms and conditions of this Amendment, the
Term Loan Lenders are willing to make the Designated Term Loan, and to consent
to the Designated Payment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree to amend the
Credit Agreement, effective immediately, as follows:
1. DEFINITIONS. Capitalized terms used herein and not otherwise defined
herein shall have the meanings ascribed to them in the Credit Agreement, as
amended hereby.
2. AMENDMENTS TO CREDIT AGREEMENT.
(a) Section 1.01 of the Credit Agreement hereby is amended by adding the
following defined terms in proper alphabetical order:
"First Amendment" means that certain Amendment Number One to Second Amended
and Restated Credit Agreement, dated as of June 4, 2002, among Borrower,
Lenders, Administrative Agent, and Collateral Agent.
"First Amendment Effective Date" means the date, if ever, that all of the
conditions set forth in Section 5 of the First Amendment shall be satisfied (or
waived by the Required Lenders in their sole discretion).
(b) Section 1.01 of the Credit Agreement hereby is amended by amending and
restating the following defined term in its entirety as follows:
"Revolving Loan Margin" means 6.00%; provided, however, that, with respect
to any month, if Borrower has timely delivered to each Agent the financial
statements required by Section 6.01(a)(iii) and the certified calculations
required by Section 6.01(a)(iv)(B), and if such financial statements and
certified calculations demonstrate that the Senior Debt to EBITDA Ratio for the
twelve fiscal month period ending on the last day of the second month
immediately preceding such month is less than or equal to 2.00, the Revolving
Loan Margin shall mean 4.00% during such month; provided, further that (a) for
the time period from the Effective Date until the date when Agents have received
the monthly financial statements and certified calculations for the fiscal month
ending December 30, 2001 required by Section 6.01(a)(iii) and Section
6.01(a)(iv)(B), the determination described in the second clause of this
definition shall be made based upon the ratio of (i) the aggregate amount of all
Obligations as of the Effective Date (after giving effect to the initial Loans
and the initial Letter of Credit Accommodations made on or after the date
hereof), to (ii) Borrower's EBITDA for the twelve fiscal month period ending on
Page 1
November 25, 2001, and (b) for the time period from the date when Agents have
received such monthly financial statements and certified calculations for the
month ending December 30, 2001 until the date when Agents have received such
monthly financial statements and certified calculations for the fiscal month
ending in January of 2002, the determination described in the second clause of
this definition shall be made based upon the ratio of (i) the aggregate amount
of all Obligations as of the Effective Date (after giving effect to the initial
Loans and the initial Letter of Credit Accommodations made on or after the date
hereof), to (ii) Borrower's EBITDA for the twelve fiscal month period ending on
December 30, 2001. The Revolving Loan Margin shall be determined on the
Effective Date and shall be redetermined each month on the fifth Business Day of
each such month. If financial statements and certified calculations described in
the second clause of this definition are not timely delivered, the Revolving
Loan Margin shall mean 6.00% until the date on which such financial statements
and certified calculations are delivered (on which date (but not retroactively),
without constituting a waiver of any Default or Event of Default occasioned by
the failure to timely deliver such certification, the Revolving Loan Margin
shall be redetermined based upon such financial statements and certified
calculations).
(c) Section 2.01(c)(ii) of the Credit Agreement is hereby amended by
deleting the word "2.50%" appearing in the first sentence thereof, and replacing
such word with the word "3.50%".
(d) Section 2.01(c)(ii) of the Credit Agreement is hereby amended by
deleting the word "5.50%" appearing in the first sentence thereof, and replacing
such word with the word "6.50%".
3. consent and additional agreement. Upon the First Amendment Effective
Date, (a) the Term Loan Lenders hereby agree, ratably in accordance with their
respective Term Loan Commitments, to make the Designated Term Loan to Borrower,
and (b) the Lender Group consents to Borrower making the Designated Payment from
the proceeds of the Designated Term Loan. The agreements contained in this
Section 3 are limited to the specifics hereof, shall not apply with respect to
any facts or occurrences other than those on which the same are based, except as
set forth in the Loan Documents, shall not constitute an agreement to make a
similar Term Loan in the future, except as set forth in the Loan Documents,
shall not constitute a consent to the Borrower making a similar payment in the
future, and, shall not operate as a waiver or an amendment of any right, power
or remedy of the Lender Group, nor as a consent to any further or other matter,
under the Loan Documents.
4. Amendment Fee. Borrower agrees to pay to Administrative Agent on the
First Amendment Effective Date, for the ratable benefit of the Lenders, an
amendment fee, in the amount of $200,000 (the "First Amendment Fee"), and
expressly authorizes Administrative Agent to designate the First Amendment Fee
as a Revolving Loan under the Credit Agreement and to charge such First
Amendment Fee to Borrower's Loan Account on the First Amendment Effective Date.
Borrower hereby acknowledges and agrees that the First Amendment Fee is fully
earned and non-refundable on First Amendment Effective Date, that such First
Amendment Fee constitutes an Obligation, and is in addition to any other fees
payable by Borrower under the Credit Agreement or any other Loan Document.
5. CONDITIONS PRECEDENT TO AMENDMENT. The satisfaction of each of the
following unless waived or deferred by the Required Lenders in their sole
discretion, shall constitute conditions precedent to the effectiveness of this
Amendment and each and every provision hereof:
(a) Collateral Agent shall have received the reaffirmation and consent of
each of the Guarantors in the form attached hereto as Exhibit A, on or before
the First Amendment Effective Date, duly executed and dated as of the First
Amendment Effective Date, and in full force and effect.
(b) Borrower shall have paid to Administrative Agent, for the ratable
benefit of the Lenders, an amendment fee, in full in immediately available
funds, in the amount of $200,000.
(c) The representations and warranties in the Credit Agreement as amended
by this Amendment, and the other Loan Documents shall be true and correct in all
material respects on and as of the date hereof, as though made on such date
(except to the extent that such representations and warranties relate solely to
an earlier date).
(d) No injunction, writ, restraining order, or other order of any nature
prohibiting, directly or indirectly, the consummation of the transactions
contemplated herein shall have been issued and remain in force by any
Governmental Authority against the Lender Group.
(e) No Event of Default shall result from the consummation of the
transactions contemplated herein.
Page 2
6. CONSTRUCTION. This Amendment shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to its
conflicts of laws principles (other than any provisions thereof validating the
choice of the laws of the State of New York as the governing law).
7. ENTIRE AMENDMENT. This Amendment, and terms and provisions hereof,
constitute the entire agreement among the parties pertaining to the subject
matter hereof and supersedes any and all prior or contemporaneous amendments
relating to the subject matter hereof. Except as expressly amended hereby, the
Credit Agreement and other Loan Documents shall remain unchanged and in full
force and effect. To the extent any terms or provisions of this Amendment
conflict with those of the Credit Agreement or other Loan Documents, the terms
and provisions of this Amendment shall control. This Amendment is a Loan
Document.
8. COUNTERPARTS; TELEFACSIMILE EXECUTION. This Amendment may be executed in
any number of counterparts, all of which taken together shall constitute one and
the same instrument and any of the parties hereto may execute this Amendment by
signing any such counterpart. Delivery of an executed counterpart of this
Amendment by telefacsimile shall be equally as effective as delivery of an
original executed counterpart of this Amendment. Any party delivering an
executed counterpart of this Amendment by telefacsimile also shall deliver an
original executed counterpart of this Amendment, but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Amendment.
9. AMENDMENTS. This Amendment cannot be altered, amended, changed or
modified in any respect or particular unless each such alteration, amendment,
change or modification shall have been agreed to by each of the parties and
reduced to writing in its entirety and signed and delivered by each party.
10. MISCELLANEOUS
(a) Upon the effectiveness of this Amendment, each reference in the Credit
Agreement to "this Agreement", "hereunder", "herein", "hereof" or words of like
import referring to the Credit Agreement shall mean and refer to the Credit
Agreement as amended by this Amendment.
(b) Upon the effectiveness of this Amendment, each reference in the Loan
Documents to the "Credit Agreement", "thereunder", "therein", "thereof" or words
of like import referring to the Credit Agreement shall mean and refer to the
Credit Agreement as amended by this Amendment.
(c) The Lender Group hereby reserves all remedies, powers, rights, and
privileges that the Lender Group may have under the Credit Agreement or the
other Loan Documents, at law (including under the Code), in equity, or
otherwise; and (b) all terms, conditions, and provisions of the Credit Agreement
and the other Loan Documents are and shall remain in full force and effect and
nothing herein shall operate as a consent to or a waiver, amendment, or
forbearance in respect of any matter (including any Event of Default whether
presently existing or subsequently occurring) or any other right, power, or
remedy of the Lender Group under the Credit Agreement and the other Loan
Documents. No delay on the part of the Lender Group in the exercise of any
remedy, power, right or privilege shall impair such remedy, power, right, or
privilege or be construed to be a waiver of any default, nor shall any partial
exercise of any such remedy, power, right or privilege preclude further exercise
thereof or of any other remedy, power, right or privilege.
[Signature page follows.]
3
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
and delivered as of the date first written above.
BORROWER:
AVADO BRANDS, INC.,
a Georgia corporation
By: _____________________
Name:
Title:
COLLATERAL AGENT:
ABLECO FINANCE LLC,
a Delaware limited liability company,
as Collateral Agent
By: ______________________
Name:
Title:
ADMINISTRATIVE AGENT:
FOOTHILL CAPITAL CORPORATION,
a California corporation,
as Administrative Agent
By: _______________________
Name:
Title:
LENDERS:
ABLECO FINANCE LLC,
a Delaware limited liability company,
for itself and certain of its
Affiliates, as Assignor
By: ________________________
Name:
Title:
FOOTHILL CAPITAL CORPORATION,
a California corporation
By: ________________________
Name:
Title:
REGIMENT CAPITAL II, L.P.,
a Delaware limited partnership
By: ________________________
Name:
Title: Its General Partner
HZ SPECIAL OPPORTUNITIES LLC,
a Cayman Islands limited liability
company, as Assignee
By: Highbridge Capital Management,LLC
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 10Q, the Registrant
hereby agrees to furnish supplementally a copy of any omitted exhibit or
schedule to the Commission upon request.
S-1