FOURTH AMENDMENT TO CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is
made as of the 17th day of November, 1999, by and among PICCADILLY
CAFETERIAS, INC. (the "Borrower"), HIBERNIA NATIONAL BANK, as Co-Arranger,
Administrative Agent, Letter of Credit Issuer and a Bank, WACHOVIA BANK,
N.A., as Co-Arranger, Documentation Agent and as a Bank, SOUTH TRUST BANK
NATIONAL ASSOCIATION, AMSOUTH BANK, BRANCH BANKING AND TRUST COMPANY,
WHITNEY NATIONAL BANK, BANKONE LOUISIANA, N.A., THE FUJI BANK, LIMITED,
FIRST TENNESSEE BANK NATIONAL ASSOCIATION, and DEPOSIT GUARANTY NATIONAL
BANK (collectively referred to herein as the "Banks"), PICCADILLY
RESTAURANTS, INC. and ▇▇▇▇▇▇▇▇ RESTAURANTS INC. (collectively referred to
herein as the Guarantors).
R E C I T A L S:
The Borrower, the Administrative Agent and the Banks have entered
into a certain Credit Agreement dated June 24, 1998, as amended by a First
Amendment to Credit Agreement dated July 31, 1998, a Second Amendment to
Credit Agreement dated October 30, 1998 and a Third Amendment to Credit
Agreement dated June 28, 1999 (the "Credit Agreement"). Capitalized terms
used in this Amendment which are not otherwise defined in this Amendment
shall have the respective meanings assigned to them in the Credit
Agreement.
The Guarantors have executed a certain Guaranty Agreement dated
June 24, 1998 (the "Guaranty").
The Borrower and the Guarantors have requested the Administrative
Agent and the Banks to amend the Credit Agreement upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the Recitals and the mutual
promises contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Borrower,
the Administrative Agent and the Banks, intending to be legally bound
hereby, agree as follows:
SECTION 1. RECITALS. The Recitals are incorporated herein by
reference and shall be deemed to be a part of this Amendment.
SECTION 2. AMENDMENTS. The Credit Agreement is hereby amended
as set forth in this SECTION 2.
SECTION 2.1. AMENDMENT TO SECTION 1.1. The following
definitions are added to Section 1.1 of the Credit Agreement:
"Collateral" shall mean the Real Property Collateral and the
Personal Property Collateral.
"Collateral Documents" means any and all Real Property
Mortgages, Security Agreements, financing statements and any
other document evidencing, relating to or securing the Loans or
the Letters of Credit, and any other document or instrument
delivered from time to time in connection with the foregoing, as
such documents and instruments may be amended or supplemented
from time to time.
"Commitment Reduction Date" means each of March 31, 2000 and
March 31, 2001;
"Consolidated Adjusted Tangible Net Worth" means, as
determined at the end of each Fiscal Quarter, Stockholders'
Equity, less the sum of the value, as set forth or reflected on
the most recent consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries, prepared in accordance with GAAP,
of
(A) Any surplus resulting from any write-up of assets
subsequent to June 30, 1999;
(B) All assets that would be treated as intangible assets
for balance sheet presentation purposes under GAAP, including
without limitation goodwill (whether representing the excess of
cost over book value of assets acquired, or otherwise)
trademarks, tradenames, copyrights, patents and technologies, and
unamortized debt discount and expense.
(C) To the extent not included in (B) of this definition,
any amount at which shares of capital stock of the Borrower
appear as an asset on the balance sheet of the Borrower and its
Consolidated Subsidiaries;
(D) Loans or advances to stockholders, directors, officers
or employees;
(E) An amount equal to the difference between the deferred
tax assets of the Borrower and its Consolidated Subsidiaries and
the deferred tax liabilities of the Borrower and its Consolidated
Subsidiaries;
(F) To the extent not deducted from Stockholders' Equity,
dividends declared but not paid by the Borrower and its
Consolidated Subsidiaries during the Fiscal Quarter then ended;
and
(G) Dividends declared but not paid by the Borrower and its
Consolidated Subsidiaries during the period commencing on the
first day after the Fiscal Quarter then ended and ending on the
date on which the Compliance Certificate is delivered to the
Banks for such Fiscal Quarter pursuant to Section 5.1(c).
"Excluded Transaction" shall mean collectively: (1) sales
of inventory by the Borrower or any Subsidiary in the ordinary
course of business; (2) the sale by the Borrower or any
Subsidiary in the ordinary course of business of Equipment that
is obsolete; (3) the sale, lease, transfer or other disposition
of any Collateral by the Borrower or any Subsidiary in the
ordinary course of business to the Borrower or any Guarantor
provided that the Administrative Agent's perfected, first
priority lien upon and security interest in such transferred
Collateral continues and remains in full force and effect; (4)
leases and subleases of real property assets of the Borrower and
the Subsidiaries which are entered into in the ordinary course of
business consistent with past practices and in the prudent
business judgment of the Borrower and its Subsidiaries provided
that the rights, interests and privileges which the Borrower or
such Subsidiary as lessor or sublessor may have in such lease or
sublease are subject to the Administrative Agent's valid
perfected first priority security interest; (5) the sale by the
Borrower or a Guarantor of the Marketed Properties to the extent
that the Net Disposition Proceeds of such sold Marketed
Properties are less than $2,500,000, in the aggregate; and (6)
the sale, lease, transfer or other disposition by the Borrower or
any Subsidiary of any Collateral to the extent that the Net
Disposition Proceeds of such sold, leased, transferred or
disposed Collateral is used by the Borrower or the applicable
Subsidiary to purchase Collateral having a fair market value
substantially equivalent to or greater than the Collateral so
disposed and the Administrative Agent is immediately provided a
valid, perfected first priority security interest in such asset.
"Marketed Properties" shall mean the following properties
currently offered for sale by the Borrower and more fully
described on Group B of Schedule I: Carrolton, Georgia
(undeveloped property); (2) Newport News, Virginia (closed); (3)
Kansas City, Kansas (undeveloped property); (4) Baton Rouge,
Louisiana (undeveloped property); and (5) Myrtle Beach, South
Carolina (undeveloped).
"Net Disposition Proceeds" means the aggregate proceeds
received by the Borrower or a Subsidiary upon the disposition of
any Collateral after deducting from the amount of such proceeds
all reasonable costs and expenses of such disposition.
"Owned Real Properties" means the real properties owned by
the Borrower and the Guarantors and further described in Group A
on Schedule I hereto.
"Personal Property Collateral" shall have the same meaning
as "Collateral" as defined in the Security Agreement.
"Real Property Collateral" means: (1) the Owned Real
Properties; and (2) the real property interests owned by the
Borrower and Guarantors and further described in Group B on
Schedule I hereto.
"Real Property Mortgages" means the mortgages, deeds to
secure debt, deeds of trust and security deeds substantially in
the form attached hereto as Exhibit A (with such changes as the
Administrative Agent may deem necessary to conform such Exhibit A
to the laws of the state in which the real property interests
encumbered thereby is located or to encumber the leasehold nature
of such interests) pursuant to which the Borrower and the
Guarantors will grant to the Administrative Agent (or a trustee
for the benefit of the Administrative Agent) a security interest
and lien to secure any and all Obligations (as defined in the
Deed to Secure Debt attached hereto as Exhibit A), as such
mortgages, deeds to secure debt, deeds of trust and security
deeds may be amended or supplemented from time to time.
"Security Agreement" means the security agreement
substantially in the form attached hereto as Exhibit B (with such
changes as the Administrative Agent may deem necessary to conform
such Exhibit B to the laws of the state in which the Personal
Property Collateral is located) pursuant to which the Borrower
and the Guarantors will grant to the Administrative Agent (or a
trustee for the benefit of the Administrative Agent) a security
interest in the Personal Property Collateral in order to secure
any and all Obligations (as defined in the Security Agreement
attached hereto as Exhibit B), as such security agreement may be
amended or supplemented from time to time.
2.02 AMENDMENT TO DEFINITIONS OF EBITDA, CONSOLIDATED FIXED
CHARGES, MAINTENANCE CAPITAL EXPENDITURES AND LOAN DOCUMENTS. The
definitions of "EBITDA," "Consolidated Fixed Charges," "Maintenance Capital
Expenditures" and "Loan Documents" set forth in Section 1.1 of the Credit
Agreement are hereby amended and restated to read as follows:
"EBITDA" means for any period the sum of: (a) Consolidated
Net Income, plus (b) the amount deducted in determining
Consolidated Net Income for such period for (i) taxes on income,
(ii) Consolidated Interest Expense, (iii) Depreciation and
Amortization, (iv) all non-cash asset impairment charges, (v) all
non-cash unit closing charges, (vi) all non-cash charges, in an
aggregate amount that shall not exceed $12,985,000, for the
reduction in goodwill relating to ▇▇▇▇▇▇▇▇ Restaurants, Inc.; and
(vii) all non-cash charges, in an aggregate amount that shall not
exceed $7,225,000, for net deferred tax assets relating to
▇▇▇▇▇▇▇▇ Restaurants, Inc., all determined with respect to the
Borrower and its Consolidated Subsidiaries on a consolidated
basis for such period and in accordance with GAAP; provided,
however, the calculation of EBITDA shall: (1) exclude any
amounts (based upon historical operating results) which would
otherwise be included in calculation of EBITDA with respect to
the assets and operations included within the Sale of ▇▇▇▇▇ &
Kacoo's; (2) exclude to the extent deducted in determining
Consolidated Net Income for such period, the costs and expenses
(excluding fees paid to the Administrative Agent, Co-Arrangers
and the Banks) paid by the Borrower in connection with the
preparation and negotiation of this Amendment, the Collateral
Documents and compliance with the collateral documentation
requirements described on Schedule II; and (3) exclude the gain
realized by the Borrower and its Consolidated Subsidiaries from
the Sale of ▇▇▇▇▇ & Kacoo's. Beginning with the Fiscal Quarter
ending September 30, 1999, for purposes of determining the
"Applicable Margin" under Section 2.6 and the "Applicable
Commitment Fee Rate" under Section 2.7, items (iv) and (v) from
above shall be removed from the above definition of EBITDA.
"Consolidated Fixed Charges" means, as of the date of
determination, the sum (without duplication) of (a) Consolidated
Interest Expense, (b) regularly scheduled payment obligations of
the Borrower and its Consolidated Subsidiaries under all leases
and rental agreements (including, without limitation, any and all
payment obligations of the Borrower and its Consolidated
Subsidiaries, with respect to common area maintenance charges,
but expressly excluding any and all prepayments under any leases
or rental agreements), and (c) (i) for periods prior to October
1, 1999, Maintenance Capital Expenditures; and (ii) for periods
after October 1, 1999, Capital Expenditures.
"Maintenance Capital Expenditures" means for any period
Capital Expenditures incurred during such period by the Borrower
and its Consolidated Subsidiaries for the purposes of and in
connection with regularly scheduled maintenance and remodeling of
the Properties and other assets of the Borrower and its
Consolidated Subsidiaries.
"Loan Documents" means this Agreement, the Notes, the
Collateral Documents, the Letter of Credit Agreement, the
Guaranty, any other document evidencing, relating to or securing
the Loans or the Letters of Credit, and any other document or
instrument delivered from time to time in connection with this
Agreement, the Guaranty, the Collateral Documents, the Notes, the
Letters of Credit or the Loans, as such documents and instruments
may be amended or supplemented from time to time.
2.03 AMENDMENT TO SECTION 2.6(A). Section 2.6(a) of the Credit
Agreement is hereby amended and restated to read as follows:
(a) "Applicable Margin" shall be determined quarterly based
upon the ratio of Consolidated Total Funded Debt (calculated as
of the last day of each Fiscal Quarter) to EBITDA (calculated for
the Fiscal Quarter then ended and the immediately preceding three
Fiscal Quarters), as follows:
CONSOLIDATED SWING LINE
TOTAL FUNDED ADVANCES AND
DEBT TO BASE RATE LETTERS OF EURO-DOLLAR
EBITDA LOANS CREDIT LOANS
--------------- --------- ---------- ------------
Greater than or 1% 3.00% 3.00%
equal to 3.50
Greater than or 0.75% 2.75% 2.75%
equal to 3.00,
but less than
3.50
Greater than or 0.375% 2.375% 2.375%
equal to 2.50,
but less than
3.00
Greater than or 0.125% 2.125% 2.125%
equal to 2.00,
but less than
2.50
Less than 2.00 0% 1.75% 1.75%
The Applicable Margin shall be determined effective as of the
date (herein, the "Rate Determination Date") which is 50 days
after the last day of the Fiscal Quarter as of the end of which
the foregoing ratio is being determined, based on the quarterly
financial statements for such Fiscal Quarter, and the Applicable
Margin so determined shall remain effective from such Rate
Determination Date until the date which is 50 days after the last
day of the Fiscal Quarter in which such Rate Determination Date
falls (which latter date shall be a new Rate Determination Date);
PROVIDED that (i) for the period from and including the Closing
Date to but excluding the Rate Determination Date occurring on
November 19, 1998, the Applicable Margin shall be (A) 0% for Base
Rate Loans, (B) 1.50% for Letters of Credit, and (C) 1.50% for
Euro-Dollar Loans and Swing Line Advances, (ii) in the case of
any Applicable Margin determined for the final Fiscal Quarter of
a Fiscal Year, the Rate Determination Date shall be the date
which is 100 days after the last day of such final Fiscal Quarter
and such Applicable Margin shall be determined based upon the
annual audited financial statements for the Fiscal Year ended on
the last day of such final Fiscal Quarter, and (iii) if on any
Rate Determination Date the Borrower shall have failed to deliver
to the Banks the financial statements required to be delivered
pursuant to Section 5.1(a) or Section 5.1(b) with respect to the
Fiscal Year or Fiscal Quarter, as the case may be, most recently
ended prior to such Rate Determination Date, then for the period
beginning on such Rate Determination Date and ending on the
earlier of (A) the date on which the Borrower shall deliver to
the Banks the financial statements to be delivered pursuant to
Section 5.1(b) with respect to such Fiscal Quarter or any
subsequent Fiscal Quarter, or (B) the date on which the Borrower
shall deliver to the Banks annual financial statements required
to be delivered pursuant to Section 5.1(a) with respect to the
Fiscal Year which includes such Fiscal Quarter or any subsequent
Fiscal Year, the Applicable Margin shall be determined as if the
ratio of Consolidated Total Funded Debt to EBITDA was more than
3.50 at all times during such period. Any change in the
Applicable Margin on any Rate Determination Date shall result in
a corresponding change, effective on and as of such Rate
Determination Date, in the interest rate applicable to each
Syndicated Loan and in the fees applicable to each Letter of
Credit outstanding on such Rate Determination Date; provided,
that: (i) for Euro-Dollar Loans, changes in Applicable Margin
shall only be effective for Interest Periods commencing on or
after the Rate Determination Date; and (ii) no Applicable Margin
shall be decreased pursuant to this Section 2.6 if a Default is
in existence on the Rate Determination Date.
Section 2.04. AMENDMENT TO SECTION 2.7(A). Section 2.7(a) of the
Credit Agreement is hereby amended and restated to read as follows:
(a) The Borrower shall pay to the Administrative Agent for the
ratable account of each Bank a commitment fee equal to the
product of: (i) the aggregate of the daily average amounts of
such Bank's Unused Commitment, times (ii) a per annum percentage
equal to the Applicable Commitment Fee Rate. Such commitment fee
shall accrue from and including the Closing Date to and including
the Termination Date. Commitment fees shall be payable quarterly
in arrears on the first Quarterly Payment Date following each
Commitment Fee Determination Date and on the Termination Date;
provided that should the Commitments be terminated at any time
prior to the Termination Date for any reason, the entire accrued
and unpaid commitment fee shall be paid on the date of such
termination. The "Applicable Commitment Fee Rate" shall be
determined quarterly based upon the ratio of Consolidated Total
Funded Debt (calculated as of the last day of each Fiscal
Quarter) to EBITDA (calculated for the Fiscal Quarter then ended
and the immediately preceding three Fiscal Quarters), as follows:
RATIO OF CONSOLIDATED TOTAL APPLICABLE
FUNDED DEBT TO EBITDA COMMITMENT FEE RATE
----------------------------- -------------------
Greater than or equal to 3.50 0.500%
Greater than or equal to 3.00, but 0.500%
less than 3.50
Greater than or equal to 2.50 but 0.500%
less than 3.00
Greater than or equal to 2.00 but 0.375%
less than 2.50
Less than 2.00 0.375%
The Applicable Commitment Fee Rate shall be determined effective
as of the date (herein, the "Commitment Fee Determination Date") which is
50 days after the last day of the Fiscal Quarter as of the end of which the
foregoing ratio is being determined, based on the quarterly financial
statements for such Fiscal Quarter, and the Applicable Commitment Fee Rate
so determined shall remain effective from such Commitment Fee Determination
Date until the date which is 50 days after the last day of the Fiscal
Quarter in which such Commitment Fee Determination Date falls (which latter
date shall be a new Commitment Fee Determination Date); PROVIDED that (i)
for the period from and including the Closing Date to but excluding the
Commitment Fee Determination Date occurring on November 19, 1998, the
Applicable Commitment Fee Rate shall be 0.375% (ii) in the case of any
Applicable Commitment Fee Rate determined for the fourth and final Fiscal
Quarter of a Fiscal Year, the Commitment Fee Determination Date shall be
the date which is 100 days after the last day of such final Fiscal Quarter
and such Applicable Commitment Fee Rate shall be determined based upon the
annual audited financial statements for the Fiscal Year ended on the last
day of such final Fiscal Quarter, and (iii) if on any Commitment Fee
Determination Date the Borrower shall have failed to deliver to the Banks
the financial statements required to be delivered pursuant to Section 5.1
(a) or Section 5.1(b) with respect to the Fiscal Year or Fiscal Quarter, as
the case may be, most recently ended prior to such Commitment Fee
Determination Date, then for the period beginning on such Commitment Fee
Determination Date and ending on the earlier of (A) the date on which the
Borrower shall deliver to the Banks the financial statements to be
delivered pursuant to Section 5.1(b) with respect to such Fiscal Quarter or
any subsequent Fiscal Quarter, and (B) the date on which the Borrower shall
deliver to the Banks annual financial statements required to be delivered
pursuant to Section 5.1(a) with respect to the Fiscal Year which includes
such Fiscal Quarter or any subsequent Fiscal Year, the Applicable
Commitment Fee Rate shall be determined as if the ratio of Consolidated
Total Funded Debt to EBITDA was more than 3.50 at all times during such
period.
Section 2.05. AMENDMENT TO SECTION 2.9. Section 2.9 of the
Credit Agreement is hereby amended by adding subsections (c) and (d) which
shall read as follows:
(c) The aggregate amount of the Commitments shall be reduced by:
(i) $5,000,000, on November 17, 1999; (ii) $5,000,000 on
March 31, 2000; and (iii) $10,000,000 on March 31, 2001.
Each such reduction shall be applied to reduce the Commitments of
the several Banks ratably. Any optional reduction of the
Commitments pursuant to Section 2.8 shall reduce the amount
of any subsequent mandatory reduction required pursuant to this
Section 2.9(c). Any mandatory reduction of the Commitments
pursuant to Section 2.9(b), Section 2.9(d)(1) resulting from the
sale, lease, transfer or other disposition of any Owned Real
Property or equipment located on or used in connection with
such Owned Real Property, or Section 2.9(d)(2)shall not reduce
the amount of any subsequent mandatory reduction required
pursuant to this Section 2.9(c); provided, that a reduction
of the Commitments pursuant to Section 2.9(b) resulting from
the issuance of Debt which is subordinate to the Loans, Letters
of Credit and Letter of Credit Advances upon terms and
conditions satisfactory to the Administrative Agent in its
reasonable discretion shall reduce the amount of any subsequent
mandatory reduction required pursuant to Section 2.9(c). Any
mandatory reduction of the Commitments pursuant to Section 2.9(d)
(1) arising from the sale, lease, transfer or other disposition
of any Collateral other than the Owned Real Property or equipment
located on or used in connection with such Owned Real Property
shall reduce the amount of any subsequent mandatory reduction
required pursuant to this Section 2.9(c), provided that any
such reduction shall be applied to the reductions in the
Commitments required pursuant to this Section 2.9(c) first, to
the Commitment reduction scheduled on March 31, 2001, and
then, to the extent necessary, to the Commitment reduction
scheduled to occur on March 31, 2000.
(d)(1) After the sale, lease, transfer or other disposition of
any Collateral resulting in Net Disposition Proceeds in an
aggregate amount of $5,000,000 (excluding Net Disposition
Proceeds resulting from any Excluded Transaction), then
thereafter on each occasion of a sale, lease, transfer or other
disposition by the Borrower or any Subsidiary of any Collateral
otherwise permitted and in compliance with this Agreement in any
Fiscal Year resulting in Net Disposition Proceeds in excess of
$100,000, or when aggregated with all other Net Disposition
Proceeds received by the Borrower or any Subsidiary during such
Fiscal Year are in excess of $100,000, then simultaneously with
each such sale, lease, transfer or other disposition the Borrower
shall immediately notify the Administrative Agent of such sale,
lease, transfer or other disposition and effective on the date of
such sale, lease, transfer or other disposition the Commitments
shall be immediately reduced, ratably, in an amount equal to the
excess of (i) the sum of (A) the Net Disposition Proceeds thereof
and (B) the aggregate amount of all Net Disposition Proceeds
received from all other sales, leases, transfers or other
dispositions by the Borrower and its Subsidiaries during such
Fiscal Year, over (ii) the aggregate amount of reductions in the
Commitments previously made during such Fiscal Year pursuant to
this paragraph (d)(1). Notwithstanding anything contained herein
to the contrary the Commitments shall not be reduced pursuant to
this Section 2.9(d)(1) by the Net Disposition Proceeds resulting
from an Excluded Transaction. The Borrower covenants and agrees
that the gross proceeds payable to the Borrower or any Subsidiary
in connection with any sale, lease, transfer or other disposition
of any Collateral shall be in cash and received at the time of
such disposition; provided that the Borrower or any Subsidiary
may accept as consideration for any such sale, lease, transfer or
other disposition of any real or personal property, a deferred
payment obligation which is secured by a first priority lien on
the asset being transferred so long as: (1) the aggregate
outstanding principal amount of all deferred purchase obligations
for all assets transferred by the Borrower and the Subsidiaries
shall not at any time exceed $2,500,000; and (2) the
creditworthiness of the obligor and the terms and conditions of
such deferred purchase obligations shall be satisfactory to the
Administrative Agent in its sole and absolute discretion.
(2) In the event there shall occur any casualty or
condemnation with respect to any Collateral (or portion thereof),
and if the proceeds arising from such casualty or condemnation
are required pursuant to Section 5.27 of this Agreement to be
used to reduce the Commitments, then the Borrower shall
immediately notify the Administrative Agent that such proceeds
shall not be so used for repair, restoration or replacement
purposes, as required in accordance with Section 5.27, and the
Commitments shall be immediately reduced, ratably in an amount
equal to 100% of such casualty and condemnation proceeds.
(3) Immediately upon receipt by the Borrower or any
Subsidiary, any and all Net Disposition Proceeds shall be paid by
the Borrower or such Subsidiary, as the case may be, to the
Administrative Agent and applied to prepay ratably the Loans
of the several Banks; provided that such prepayment shall be
applied first to Swing Line Advances outstanding on the date of
such prepayment and then, to the extent necessary, to the
Syndicated Loans outstanding on the date of such prepayment in
the inverse order of maturity. Any optional reduction of
the Commitments pursuant to Section 2.8 shall not reduce the
amount of any subsequent mandatory reductions required pursuant
to Section 2.9(d)(1) or 2.9(d)(2). Any mandatory reduction of
the Commitments pursuant to Section 2.9(b) or 2.9(c) shall
not reduce the amount of any subsequent mandatory reduction
required pursuant to Sections 2.9(d)(1) or 2.9(d)(2). In the
event any reduction pursuant to Section 2.9(c), 2.9(d)(1),
or 2.9(d)(2) shall result in the aggregate Commitments of all of
the Banks to be reduced to an amount less than $30,000,000,
the Borrower shall be required to either: (1) terminate the
Commitments (including, without limitation, the Swing Line
Subcommitment, the Swing Line Lender's obligations under
Section 2.3, the Letter of Credit Subcommitment and the Letter
of Credit Issuer's obligations under Section 2.14) in their
entirety; or (2) pay to the Administrative Agent an amount in
immediately available funds (which funds shall be held as
collateral for the Loans, Letters of Credit, Letter of Credit
Advances and Undrawn Amounts pursuant to arrangements
satisfactory to the Administrative Agent) equal to the Net
Disposition Proceeds which would otherwise be applied to reduce
Commitments to the amount less than $30,000,000.
Section 2.06. AMENDMENT TO SECTIONS 5.3, 5.4, 5.6 AND 5.7.
Sections 5.3, 5.4, 5.6 and 5.7 of the Credit Agreement are hereby amended
and restated to read as follows:
SECTION 5.3 RATIO OF CONSOLIDATED TOTAL FUNDED DEBT TO
EBITDA. At the end of each Fiscal Quarter the ratio of
Consolidated Total Funded Debt, calculated on the last day of the
Fiscal Quarter then ended, to EBITDA, calculated for the Fiscal
Quarter then ended and the immediately preceding three Fiscal
Quarters shall be less than: (i) at the end of each Fiscal
Quarter ending on September 30, 1999 and December 31, 1999,
respectively, 4.00 to 1.00; (ii) at the end of the Fiscal Quarter
ending on March 31, 2000, 3.60 to 1.00; (iii) at the end of each
Fiscal Quarter ending on June 30, 2000, September 30, 2000 and
December 31, 2000, respectively, 2.75 to 1.00; and (iv) at the
end of each Fiscal Quarter ending after January 1, 2001, 2.50 to
1.00.
SECTION 5.4 FIXED CHARGE COVERAGE RATIO. At the end of
each Fiscal Quarter the Fixed Charge Coverage Ratio shall be less
than: (i) at the end of each Fiscal Quarter ending between July
1, 1999 and December 31, 1999, inclusive, 1.05 to 1.00, (ii) at
the end of each Fiscal Quarter ending between January 1, 2000 and
March 31, 2000, inclusive, 1.20 to 1.00; and (iii) at the end of
each Fiscal Quarter ending after April 1, 2000, 1.35 to 1.00.
SECTION 5.6. RESTRICTED PAYMENTS. The Borrower will not
declare or make any Restricted Payment during any Fiscal Quarter
in an aggregate amount exceeding $2,000,000; provided, however:
(1) the Borrower will not permit any Subsidiary that is not a
Wholly Owned Subsidiary to declare or make any Restricted
Payment; and (2) after December 31, 1999, the Borrower will not
declare or make any Restricted Payment (excluding Restricted
Payments declared prior to December 31, 1999) in an amount
exceeding the lower of (i) $2,000,000 and (ii) Consolidated Net
Income determined for the Fiscal Quarter immediately preceding
the Fiscal Quarter in which such Restricted Payment is being
declared.
SECTION 5.7 CAPITAL EXPENDITURES. Capital Expenditures
will not exceed in the aggregate: (1) $7,000,000 during the
period July 1, 1999 to June 30, 2000, inclusive; and (2)
$5,000,000 in any Fiscal Year thereafter, provided that after
giving effect to the incurrence of any Capital Expenditures
permitted by this Section, no Default shall have occurred and be
continuing.
Section 2.07. AMENDMENT TO SECTION 5.5. Section 5.5 of the
Credit Agreement is hereby amended and restated to read as follows:
SECTION 5.5. MINIMUM CONSOLIDATED ADJUSTED TANGIBLE NET
WORTH. At the end of each Fiscal Quarter calculated as of the
last day thereof, Consolidated Adjusted Tangible Net Worth will
not be less than $54,000,000.00, less all non-cash asset
impairment charges and all non-cash unit closing charges.
Section 2.08. AMENDMENT TO SECTION 5.10. Section 5.10 of
the Credit Agreement is hereby amended and restated to read as
follows:
SECTION 5.10 NEGATIVE PLEDGE. Neither the Borrower nor any
Consolidated Subsidiary will create, incur, assume or suffer to
exist, or permit any of its Subsidiaries to create, incur, assume
or suffer to exist, any Lien upon or with respect to any of its
properties, rights or other assets of any character (including,
without limitation, accounts), whether now owned or hereafter
acquired, or sign or file, or permit any of its Subsidiaries to
sign or file, under the Uniform Commercial Code of any
jurisdiction, a financing statement which names the Borrower or
any of its Subsidiaries as debtor, or sign, or permit any
Subsidiary to sign, any security agreement, mortgage, deed of
trust or other security instrument authorizing any secured party
thereunder to file such financing statement or assign, or permit
any of its Subsidiaries to assign, any accounts, or assign or
otherwise transfer, or permit any of its Subsidiaries to assign
or otherwise transfer, any right to receive income, other than:
(a) Liens for taxes, assessments or governmental charges,
levies or Liens in favor of the United States of America or any
subdivision thereof given to secure partial payments pursuant to
contracts, and Liens securing claims or demands of mechanics and
materialmen; PROVIDED the Borrower or any of its Subsidiaries
shall not be required to pay any such tax, assessment, charge,
levy, account payable or claim if (i) not paid in good faith or
the validity, applicability or amount thereof is being contested
in good faith by such appropriate actions or proceedings which
are necessary to prevent the forfeiture or sale of any material
property of the Borrower or any of its Subsidiaries or any
material interference with the use thereof by the Borrower or any
of its Subsidiaries, and (ii) the Borrower or any of its
Subsidiaries shall record on its books, such reserves, if any, as
are deemed by it to be required with respect thereto;
(b) Liens of or resulting from any judgment or award or
otherwise arising in connection with court proceedings, the time
for the appeal or petition for rehearing of which shall not have
expired, or in respect of which the Borrower or any of its
Subsidiaries shall at any time in good faith be prosecuting an
appeal or proceeding for a review and in respect of which a stay
of execution pending such appeal or proceeding for review shall
have been secured or the execution of which is otherwise stayed;
(c) Liens incidental to the conduct of business or the
ownership of properties and assets (including easements and
similar encumbrances, Liens in favor of contractors, materialmen,
warehousemen or similar Persons, and attorneys' liens and
statutory or contractual landlords' liens under operating leases)
and deposits, pledges or liens to secure obligations under
workers' compensation laws, unemployment insurance or other forms
of governmental insurance or benefits, or judgments thereunder
which are not currently dischargeable, or to secure the
performance of bids, tenders, leases or contracts, or to secure
statutory obligations, surety or appeal bonds or other Liens of
like general nature incurred in the ordinary course of business
and not in connection with the borrowing of money, PROVIDED such
Liens do not have a Material Adverse Effect on the Borrower and
its Subsidiaries taken as a whole;
(d) restrictions on the use of real or immovable property
and minor irregularities in the title thereto, minor survey
exceptions or minor encumbrances, easements or reservations, or
rights of others for rights-of-way, utilities and other similar
purposes, or zoning or other restrictions as to the use of real
or immovable properties, which are necessary for the conduct of
the activities of the Borrower and any of its Subsidiaries or
which customarily exist on properties of corporations engaged in
similar activities and similarly situated and which do not in any
event materially impair the business of the Borrower or any of
its Subsidiaries taken as a whole;
(e) Liens securing Debt of any Subsidiary to the Borrower or
to another Subsidiary;
(f) Liens securing Debt arising from the Borrower=s
reimbursement obligations in respect of amounts paid under the
Existing Letters of Credit, which Liens shall be released on or
before August 15, 1998;
(g) Liens on Margin Stock;
(h) Liens securing the Loans, Letter of Credit Advances and
any and all other indebtedness, liabilities and obligations of
the Borrower and Guarantors to the Administrative Agent, Letter
of Credit Issuer and the Banks under the Loan Documents; and
(i) any Lien on any asset securing Debt incurred or assumed
for the purpose of financing all or any part of the cost of
acquiring such asset, PROVIDED that (1) such Debt is permitted
under Section 5.24(v); (2) such Lien attaches to such asset
concurrently with the acquisition thereof; and (3) each such Lien
shall be confined only to the asset financed by the Debt referred
to in this subsection (i).
Section 2.09. AMENDMENT TO SECTION 5.20. Section 5.20 of
the Credit Agreement is hereby amended and restated to read as
follows:
SECTION 5.20 ACQUISITIONS. Neither the Borrower, any
Guarantor nor any Subsidiary of the Borrower or of any Guarantor
will purchase, lease or otherwise acquire, directly or
indirectly, all or any substantial part of the assets or stock
of, any other Person, except that the Borrower may purchase,
lease or otherwise acquire the assets or stock of any Subsidiary
of the Borrower (including, the Guarantors).
Section 2.10. ADDITION OF SECTION 5.27. A new Section 5.27
is added to the Credit Agreement to read as follows:
SECTION 5.27. CASUALTY AND CONDEMNATION.
(a) The Borrower will furnish to the Administrative
Agent and the Banks prompt written notice of any casualty or
other insured damage to any of the Collateral occurring in
any Fiscal Year resulting in gross proceeds in excess of
$100,000 or, when aggregated with all other casualties or
damage which shall have previously occurred in such Fiscal
Year, in excess of $100,000, or the commencement of any
action of proceeding for the taking of any of the Collateral
or any part thereof or interest therein under power of
eminent domain or by condemnation or similar proceeding.
(b) If any event described in paragraph (a) of this
Section results in cash proceeds (whether in the form
of insurance proceeds, condemnation awards or otherwise),
the Borrower or such Subsidiary, as the case may be, shall
utilize such cash proceeds to pay the costs of repairing,
restoring or replacing the affected property in accordance
with paragraph (c) of this Section and any applicable
provisions of the Security Agreement and the Real Property
Mortgages, unless the Borrower elects not to replace,
restore or repair such property.
(c) If any cash proceeds have not been utilized to
replace, restore or repair such property on that date
that is nine months after the occurrence of the event
resulting in such cash proceeds or if the Borrower elects
not to replace, repair or restore the affected property,
then, to the extent required under Section 5.27(a), such
cash proceeds shall be applied to the reduction of the
Commitments as provided in Section 2.9(d)(2).
Section 2.11. AMENDMENT TO SCHEDULE 4.08. Schedule 4.08 to the
Credit Agreement is amended and restated to read in its entirety as
follows:
NAME JURISDICTION OF ORGANIZATION
Piccadilly Restaurants, Inc. Louisiana
▇▇▇▇▇▇▇▇ Restaurants, Inc. Georgia
Section 2.12. AMENDMENT TO SECTION 9.5. Section 9.5(a)(viii) of
the Credit Agreement is amended and restated to read in its entirety as
follows:
(viii) release or substitute all or any substantial part of
the Collateral; provided that notwithstanding anything contained
in this Section 9.5(a) to the contrary, the Administrative Agent
shall, upon the written request of the Borrower and without any
further consent or authorization of any Bank: (1) in connection
with the sale or transfer of any Collateral by the Borrower or a
Subsidiary, release such Collateral from any Lien of the
Collateral Documents provided that (a) the Borrower represents to
the Administrative Agent that at the time of such release no
Default or Event of Default exists under this Agreement that has
not been waived by the Required Banks or cured in accordance with
this Agreement; (b) such transfer or sale is permitted under the
terms of this Agreement (including, without limitation Section
5.13 of this Agreement); (c) the Net Disposition Proceeds
resulting from such sale or transfer are paid to the
Administrative Agent and applied in accordance with Section
2.9(d)(3); and (d) the Commitments are reduced in accordance with
Section 2.9(d)(1); and (2) execute subordination documents as the
Administrative Agent may deem appropriate in its sole discretion
in order to subordinate the Lien of the Collateral Documents on
an asset to a Lien on such asset permitted under Section 5.10(i).
Section 2.13. ADDITION OF SECTION 5.28. A new Section 5.28 is
added to the Credit Agreement to read as follows:
SECTION 5.28 RATIO OF CONSOLIDATED TOTAL FUNDED DEBT TO
CONSOLIDATED ADJUSTED TANGIBLE NET WORTH. At the end of each
Fiscal Quarter the ratio of Consolidated Total Funded Debt,
calculated on the last day of the Fiscal Quarter then ended, to
Consolidated Adjusted Tangible Net Worth, calculated on the last
day of the Fiscal Quarter then ended, shall not exceed 1.6 to
1.00; provided, that, for purposes of this definition only: (1)
in determining Consolidated Total Funded Debt, Consolidated Total
Funded Debt shall include all obligations (absolute or
contingent) of the Borrower and its Consolidated Subsidiaries to
reimburse any bank or other Person in respect of amounts paid or
payable under a letter of credit or similar instrument that
secures the obligations of any Person under a lease or trade
payable; and (2) in determining Consolidated Adjusted Tangible
Net Worth, the amounts described in (G) of such definition shall
not be deducted from Stockholders Equity.
Section 2.14. AMENDMENT TO SECTION 6.1(B). Section 6.1(b) of
the Credit Agreement is amended and restated to read in its entirety as
follows:
(b) the Borrower shall fail to observe or perform any
covenant contained in Sections 5.2(ii), 5.3 to 5.15, inclusive,
or Section 5.20, 5.23, 5.24 or 5.28; or
SECTION 3. COLLATERAL.
(a) In accordance with Schedule II Part A, the Borrower shall and
shall cause each of its Subsidiaries to promptly, but in any event
prior to December 20, 1999, at the Borrower's expense: (1) grant to
the Administrative Agent (or a trustee for the benefit of the
Administrative Agent), for the benefit of the Administrative Agent and
the Banks, a lien upon and security interest in the Collateral; (2)
execute and deliver to the Administrative Agent and shall cause each
Subsidiary of the Borrower to execute and deliver to the
Administrative Agent: (A) the Collateral Documents, all in form and
content satisfactory to the Administrative Agent and its counsel in
its reasonable discretion; and (B) the other documentation,
information and materials described on Part A of Schedule II. Each
Collateral Document shall be duly recorded in each office where such
recording is required to constitute a perfected lien on the property
covered thereby.
(b) The Borrower shall and shall cause each of its Subsidiaries
to promptly, but in any event prior to March 15, 2000 deliver to the
Administrative Agent, as applicable, at the Borrower's expense the
documentation, information and materials described on Part B of
Schedule II attached hereto.
(c) After March 15, 2000, the Borrower shall and shall cause the
Subsidiaries to perform or cause to be performed such acts as the
Administrative Agent may request to establish or maintain for the
Administrative Agent and the Banks a valid and perfected security
interest in and security title to the Collateral, free and clear of
any liens other than in favor of the Administrative Agent (or a
trustee for the benefit of the Administrative Agent), for the benefit
of the Administrative Agent and the Banks and other than as permitted
under Section 5.10(d) or (i) of the Credit Agreement.
SECTION 4. CONDITIONS TO EFFECTIVENESS. The effectiveness of
this Amendment and the obligations of the Banks hereunder are subject to
the following conditions, unless the Required Banks waive such conditions:
(a) receipt by the Administrative Agent from each of the
parties hereto of a duly executed counterpart of this Amendment signed
by such party; and
(b) the fact that the representations and warranties of the
Borrower and Guarantors contained in Section 6 of this Amendment shall
be true on and as of the date hereof.
SECTION 5. NO OTHER AMENDMENT. Except for the amendments set
forth above, the text of the Credit Agreement shall remain unchanged and in
full force and effect. This Amendment is not intended to effect, nor shall
it be construed as, a novation. The Credit Agreement and this Amendment
shall be construed together as a single agreement. Nothing herein
contained shall waive, annul, vary or affect any provision, condition,
covenant or agreement contained in the Credit Agreement, except as herein
amended, nor affect nor impair any rights, powers or remedies under the
Credit Agreement as hereby amended. The Banks and the Administrative Agent
do hereby reserve all of their rights and remedies against all parties who
may be or may hereafter become secondarily liable for the repayment of the
Notes and the Letter of Credit Advances. The Borrower promises and agrees
to perform all of the requirements, conditions, agreements and obligations
under the terms of the Credit Agreement, as heretofore and hereby amended,
the Credit Agreement, as amended, being hereby ratified and affirmed. The
Borrower hereby expressly agrees that the Credit Agreement, as amended, is
in full force and effect.
SECTION 6. REPRESENTATIONS AND WARRANTIES. The Borrower and
Guarantors hereby represent and warrant to each of the Banks as follows:
(a) After giving effect to this Amendment, no Default or Event
of Default, nor any act, event, condition or circumstance which with the
passage of time or the giving of notice, or both, would constitute an Event
of Default, under the Credit Agreement or any other Loan Document has
occurred and is continuing unwaived by the Banks on the date hereof.
(b) The Borrower and Guarantors have the power and authority to
enter into this Amendment and to do all acts and things as are required or
contemplated hereunder, or thereunder, to be done, observed and performed
by it.
(c) This Amendment has been duly authorized, validly executed
and delivered by one or more authorized officers of the Borrower and
Guarantors and constitutes a legal, valid and binding obligation of the
Borrower and each Guarantor enforceable against it in accordance with its
terms, provided that such enforceability is subject to general principles
of equity.
(d) The execution and delivery of this Amendment and the
performance of the Borrower and Guarantors hereunder do not and will not
require the consent or approval of any regulatory authority or governmental
authority or agency having jurisdiction over the Borrower or any Guarantor,
nor be in contravention of or in conflict with the articles of
incorporation or bylaws of the Borrower or any Guarantor, or the provision
of any statute, or any judgment, order or indenture, instrument, agreement
or undertaking, to which the Borrower or any Guarantor is party or by which
the assets or properties of the Borrower and Guarantors are or may become
bound.
SECTION 7. COUNTERPARTS. This Amendment may be executed in
multiple counterparts, each of which shall be deemed to be an original and
all of which, taken together, shall constitute one and the same agreement.
At the request of the Administrative Agent, each of the Banks agrees to
enter into a collateral agency and intercreditor agreement in form and
content satisfactory to the Administrative Agent and the Required Banks.
SECTION 8. GOVERNING LAW. This Amendment shall be considered in
accordance with and governed by the laws of the State of Georgia.
SECTION 9. CONSENT BY GUARANTORS. The Guarantors consent to the
foregoing amendments. The Guarantors promise and agree to perform all of
the requirements, conditions, agreements and obligations under the terms of
the Guaranty, said Guaranty being hereby ratified and affirmed. The
Guarantors hereby expressly agree that the Guaranty is in full force and
effect.
SECTION 10. EFFECTIVE DATE. This Amendment shall be effective
as of September 30, 1999; provided, however: (1) the Applicable Margin
determined in accordance with Section 2.03 of this Amendment shall be
effective with regard to: (i) Base Rate Loans and Euro-Dollar Loans for
Interest Periods commencing on or after November 15, 1999; provided that
for the period from November 15, 1999 to the Rate Determination Date
occurring on February 19, 2000, the Applicable Margin shall be determined
as if the ratio of Consolidated Total Funded Debt to EBITDA was more than
3.50 during the applicable period; and (ii) Swing Line Advances and Letters
of Credit outstanding on November 15, 1999 and any and all Swing Line
Advances and Letters of Credit made or issued after November 15, 1999;
provided that for the period from November 15, 1999 to the Rate
Determination Date occurring on February 19, 2000, the Applicable Margin
shall be determined as if the ratio of Consolidated Total Funded Debt to
EBITDA was more than 3.50 during the applicable period; and (2) the
Applicable Commitment Fee Rate determined in accordance with Section 2.04
of this Amendment shall be effective November 15, 1999; provided that for
the period from November 15, 1999 to the Commitment Fee Determination Date
occurring on February 19, 2000, the Applicable Commitment Fee Rate shall be
determined as if the ratio of Consolidated Total Funded Debt to EBITDA was
more than 3.50 during the applicable period.
SECTION 11. AMENDMENT FEE. On the date hereof, the Borrower
shall pay to each Bank executing this Amendment an amendment fee equal to:
(1) the amount of such Bank's Commitment, multiplied by (2) 0.25%.
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IN WITNESS WHEREOF, the parties hereto have executed and
delivered, or have caused their respective duly authorized officers or
representatives to execute and deliver, this Amendment as of the day and
year first above written.
BORROWER:
PICCADILLY CAFETERIAS, INC.
By:_______________________________________
Title:_____________________________________
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HIBERNIA NATIONAL BANK, as Co-Arranger,
Administrative Agent, Letter of Credit Issuer
and a Bank
By:_______________________________________
Title:_____________________________________
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WACHOVIA BANK, N.A., as Documentation Agent,
Co-Arranger and as a Bank
By:_______________________________________
Title:_____________________________________
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SOUTH TRUST BANK NATIONAL
ASSOCIATION, as a Bank
By:_______________________________________
Title:_____________________________________
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AMSOUTH BANK, as a Bank
By:______________________________________
Title:_____________________________________
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BRANCH BANKING AND TRUST COMPANY, as a Bank
By:_______________________________________
Title:_____________________________________
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WHITNEY NATIONAL BANK, as a Bank
By:_______________________________________
Title:_____________________________________
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BANKONE LOUISIANA, N.A., as a Bank
By:_______________________________________
Title:_____________________________________
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THE FUJI BANK, LIMITED, as a Bank
By:_______________________________________
Title:_____________________________________
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FIRST TENNESSEE BANK NATIONAL ASSOCIATION, as
a Bank
By:_______________________________________
Title:_____________________________________
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DEPOSIT GUARANTY NATIONAL BANK, as a Bank
By:_______________________________________
Title:_____________________________________
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Guarantor:
PICCADILLY RESTAURANTS, INC.
By:_______________________________________
Title:_____________________________________
ATTEST:
__________________________
Secretary
[CORPORATE SEAL]
[Remainder of this page intentionally left blank]
▇▇▇▇▇▇▇▇ RESTAURANTS INC.
By:_______________________________________
Title:_____________________________________
ATTEST:
__________________________
Secretary
[CORPORATE SEAL]
[SCHEDULES HAVE BEEN OMITTED]
