THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD 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 January 22, 1999, by and among AVADO BRANDS, INC.
f/k/a 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, is
called herein the "Credit Agreement"); and
WHEREAS, Borrower, Banks and Agent have agreed to amend further 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 Changed Terms.
(a) The defined term "Applicable Margin," set forth in Section 1.1 of the
Credit Agreement, shall be redefined, in its entirety, effective as of January
1, 1999, to read as follows:
"Applicable Margin" means: (i) for any Base Rate Loan, zero percent (0%)
per annum; and (ii) for any Euro-Dollar Rate Loan, two and one-fourth of one
percent (2-1/4) per annum.
(b) The defined term "Stockholders' Equity," set forth in Section 1.1 of
the Credit Agreement, shall be redefined by adding thereto, at the end thereof,
the following:
In determining "Stockholders' Equity," however, the amount of any Equity
Forward Contracts, pending settlement, shall be excluded therefrom.
(c) The defined term "Total Funded Debt," set forth in Section 1.1 of the
Credit Agreement, shall be redefined by adding thereto, at the end thereof, the
following:
In determining "Total Funded Debt," however, the amount of any Equity
Forward Contracts, pending settlement, shall be excluded therefrom.
1.3 New Terms. There shall be added to Section 1.1 of the Credit Agreement
a new defined term, "Equity Forward Contract," to read as follows:
"Equity Forward Contract" shall mean any contract, whether now or hereafter
existing, whereby the Borrower or any of its Consolidated Subsidiaries agrees,
directly or indirectly, to purchase Capital Stock of the Borrower on any future
date at a fixed price.
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2. MINIMUM STOCKHOLDERS' EQUITY. Effective as of September 27, 1998,
existing Section 5.4 of the Credit Agreement shall be deleted in its entirety,
and the following revised Section 5.4 shall replace same:
SECTION 5.4. Minimum Stockholders' Equity.
Stockholders' 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.
3. OTHER RESTAURANT CONCEPTS. Existing clause (xi) of Section 5.19 of the
Credit Agreement shall be amended by deleting same, in its entirety, and
replacing it with the following revised clause (xi):
(xi) 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 the Closing Date does not exceed Twelve Million
Five Hundred Thousand Dollars ($12,500,000).
4. OTHER ADVANCES. Existing clause (xiii) to Section 5.19 of the Credit
Agreement shall be amended by deleting same, in its entirety, and replacing it
with the following revised clauses (xiii):
(xiii) Other Advances. Make loans or advances to Affiliates, shareholders,
directors, officers or employees, in addition to those described in clauses (i)
through (xii) 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.
5. STOCK PURCHASES. There shall be added to Article 5, Covenants, the
following additional Section 5.21:
5.21 Stock Purchases, Etc. The Borrower will not, and will not permit any
Consolidated Subsidiary of the Borrower, to purchase any Capital Stock of the
Borrower, 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 Borrower 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.
6. DEBT PREPAYMENTS. There shall also be added to Article 5, Covenants, the
following additional Section 5.22:
5.22 Prepayment of Senior Debt. The Borrower will not prepay, and will not
permit any Consolidated Subsidiary to prepay, the principal amount of any of the
Borrower's 9-3/4% Senior Notes, due 2006, heretofore issued by the Borrower in
the aggregate principal amount of $125,000,000.
7. EFFECTIVE DATE; CONDITIONS TO EFFECTIVENESS. Except as otherwise
expressly set forth herein, all amendments to the Credit Agreement made herein
shall become effective as of the date hereof; provided, however, that (a) the
following shall have been executed and/or delivered to the Agent on or before
such date, in form and substance satisfactory to the Banks, to-wit: (i) a
Secretary's (or Assistant Secretary's) Certificate for the Borrower; and (ii)
this Amendment; and (b) the fees prescribed in Section 9 below shall have been
remitted to the Banks and the Agent.
8. 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,
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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.
9. AMENDMENT FEE. In consideration of, and to induce, their entry into this
Amendment, the Borrower shall remit (i) to each of the Banks on the date hereof
its share of an amendment fee of $50,000, each such Bank's share to be pro rata
based on the amounts of its respective Commitment, and (ii) to Agent a fee in
the amount described in Agent's supplemental fee letter of even date herewith,
addressed to the Borrower.
10. 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.
11. 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.
12. 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.
13. 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"
AVADO BRANDS, INC. f/k/a
APPLE SOUTH, INC.
By:_________________________________
Name:____________________________
Title:_____________________________
Attest:______________________________
Name:________________________
Title:_________________________
"BANKS"
WACHOVIA BANK, NATIONAL
ASSOCIATION, as the Agent and as a Bank
By:________________________________
▇. ▇▇▇▇▇▇▇▇ Rison, 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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