FIRST AMENDMENT
TO
LOAN AGREEMENT
THIS FIRST AMENDMENT TO LOAN AGREEMENT (this "Agreement") is
made as of the 20th day of February, 1997, by and among DAVCO
RESTAURANTS, INC., a corporation organized and existing under the
laws of the State of Delaware ("DavCo"), and its Subsidiaries
signing below, jointly and severally (each of DavCo and those
Subsidiaries, a "Borrower"; DavCo those Subsidiaries
collectively, the "Borrower"), jointly and severally, and THE
FIRST NATIONAL BANK OF MARYLAND, a national banking association
(the "Lender").
RECITALS
1. The Lender and the Borrower are parties to a Loan
Agreement dated July 5, 1996 (as amended, modified, restated,
substituted, extended and renewed at any time and from time to
time, the "Loan Agreement") under which the Lender has
established the "Second Revolving Credit Facility" described in
the Loan Agreement, which has a Second Revolving Credit
Termination Date of January 18, 1997.
2. The Borrower has requested that the Lender extend the
Second Revolving Credit Expiration Date and expand the permitted
uses of advances under the Second Revolving Credit Facility.
3. The Lender has agreed to do so subject to the terms and
conditions set forth in this Agreement.
NOW, THEREFORE in consideration of the premises and of the
mutual covenants and conditions contained herein, the Borrower
and the Lender agree as follows:
AGREEMENTS
NOW, THEREFORE, in consideration of the premises and for
other good and valuable consideration, receipt of which is hereby
acknowledged, the Borrower and the Lender agree as follows:
1. The Borrower and the Lender agree that the Recitals
above are a part of this Agreement. Unless otherwise expressly
defined in this Agreement, terms defined in the Loan Agreement
shall have the same meaning under this Agreement.
2. The Borrower represents and warrants to the Lender as
follows:
(a) The Borrower is a corporation duly organized, and
validly existing and in good standing under the laws of the state
in which it was organized and is duly qualified to do business as
a foreign corporation in good standing in every other state
wherein the conduct of its business or the ownership of its
property requires such qualification;
(b) The Borrower has the power and authority to
execute and deliver this Agreement and perform its obligations
hereunder and has taken all necessary and appropriate corporate
action to authorize the execution, delivery and performance of
this Agreement;
The Loan Agreement, as amended by this Agreement,
and each of the other Loan Documents remains in full force and
effect, and each constitutes the valid and legally binding
obligation of the Borrower, enforceable in accordance with its
terms;
(d) All of the Borrower's representations and
warranties contained in the Loan Agreement and the other Loan
Documents are true and correct on and as of the date of the
Borrower's execution of this Agreement; and
(e) No Event of Default and no event which, with
notice, lapse of time or both would constitute an Event of
Default, has occurred and is continuing under the Loan Agreement
or the other Loan Documents which has not been waived in writing
by the Lender.
3. The Loan Agreement is hereby amended as follows:
(a) The definition of "Second Revolving Credit
Termination Date" in Section 1.1 of the Loan Agreement is hereby
amended in its entirety as follows:
"Second Revolving Credit Termination Date"
means the earliest of (a) October 31, 1997, (b) the
date on which the Second Revolving Credit Note matures
(by acceleration or otherwise), or the date on which
the Lender's obligation to make advances under the
Second Revolving Loan is terminated by the Lender
following an Event of Default.
(b) Section 2.1.2 of the Loan Agreement is hereby
amended in its entirety as follows:
Section 2.1.2 Use of Second Revolving Credit
Facility. The Second Revolving Credit Facility may be
used by the Borrower (a) to fund tax indemnification
obligations of the Borrower and refund timing
differences, (b) to repurchase its own common stock,
provided that advances for such repurchases
(collectively, "Stock Purchase Advances") shall be
limited to $2,500,000 in the aggregate, and for the
Borrower's other working capital purposes.
(c) Section 2.1.3 of the Loan Agreement is hereby
amended by changing the second sentence (containing only the
definition of "Interest Period") in its entirety as follows:
A Fixed Rate may be in effect for a period of 30, 60,
90, or 180 days (an "Interest Period")
4. The Borrower hereby issues, ratifies and confirms the
representations, warranties and covenants contained in the Loan
Agreement, as amended hereby. The Borrower agrees that this
Agreement is not intended to and shall not cause a novation with
respect to any or all of the Obligations.
5. The Borrower shall pay at the time this Agreement is
executed and delivered all fees, commissions, costs, charges,
taxes and other expenses incurred by the Lender and its counsel
in connection with this Agreement, including, but not limited to,
reasonable fees and expenses of the Lender's counsel and all
recording fees, taxes and charges.
6. This Agreement may executed in any number of duplicate
originals or counterparts, each of such duplicate originals or
counterparts shall be deemed to be an original and taken together
shall constitute but one and the same instrument. The parties
agree that their respective signatures may be delivered by
facsimile. Any party who chooses to deliver its signature by
facsimile agrees to provide a counterpart of this Agreement with
its inked signature promptly to each other party.
IN WITNESS WHEREOF, the parties hereto have signed and
sealed this Agreement on the day and year first above written.
WITNESS OR ATTEST: DAVCO RESTAURANTS, INC.
_________________________ By:/S/ Xxxxxx Xxxxxxxxx(Seal)
Xxxxxx Xxxxxxxxx
Executive Vice President
WITNESS OR ATTEST: SOUTHERN HOSPITALITY CORPORATION
_________________________ By:/S/ Xxxxxx Xxxxxxxxx(Seal)
Xxxxxx Xxxxxxxxx
Executive Vice President
WITNESS OR ATTEST: MDF, Inc
_________________________ By:/S/Xxxxxx Xxxxxxxxx(Seal)
Xxxxxx Xxxxxxxxx
Executive Vice President
WITNESS: THE FIRST NATIONAL BANK OF MARYLAND
_________________________ By:/S/ Xxxxxxxxxxx X. Xxxxxxx(Seal)
Xxxxxxxxxxx X. Xxxxxxx
Vice President
