EXHIBIT 10.1
EXECUTION COPY
WAIVER AND AGREEMENT dated as of June 17,
2002 (this "Waiver"), to the Credit Agreement
dated as of January 7, 1998, as amended by
Amendment No. 1 and Waiver dated as of March
16, 1998, Amendment No. 2 and Waiver dated as
of May 21, 1998, Amendment No. 3 and Waiver
dated as of July 16, 1998, Amendment No. 4
dated as of November 12, 1998, Amendment No. 5
dated as of March 12, 1999, Amendment No. 6
dated as of December 20, 1999, Amendment No. 7
dated as of June 20, 2000, Amendment No. 8 and
Agreement dated as of December 26, 2000
("Amendment No. 8"), and Amendment No. 9 dated
as of October 18, 2001 (the "Credit
Agreement"), among DENNY'S, INC.("Denny's"), a
California corporation, EL POLLO LOCO, INC., a
Delaware corporation, FLAGSTAR ENTERPRISES,
INC., an Alabama corporation, ADVANTICA
SYSTEMS, INC.(formerly Flagstar Systems, Inc.),
a Delaware corporation, QUINCY'S RESTAURANTS,
INC., an Alabama corporation (each of the
foregoing, except for FLAGSTAR ENTERPRISES,
INC., QUINCY'S RESTAURANTS, INC. and EL POLLO
LOCO, INC., for purposes of this Waiver and the
Credit Agreement, individually, a "Borrower"
and, collectively, the "Borrowers"), ADVANTICA
RESTAURANT GROUP, INC., a Delaware corporation
("Parent"), the Lenders (as defined in
Article I of the Credit Agreement) and JPMORGAN
CHASE BANK (formerly known as The Chase
Manhattan Bank), a New York banking
corporation, as swingline lender (in such
capacity, the "Swingline Lender"), as issuing
bank, as administrative agent (in such
capacity, the "Administrative Agent") and as
collateral agent (in such capacity, the
"Collateral Agent") for the Lenders.
A. The Lenders have extended credit to the Borrowers, and
have agreed to extend credit to the Borrowers, in each case pursuant to the
terms and subject to the conditions set forth in the Credit Agreement.
B. Parent, Denny's, FRI-M Corporation, Coco's Restaurants,
Inc., Carrows Restaurants, Inc., FRD Acquisition Co. ("FRD") and the Official
Committee of Unsecured Creditors of FRD (the "Committee") entered into a
Stipulation and Agreement of Settlement made as of February 19, 2002 (the
"Stipulation and Agreement"), as filed with the United States Bankruptcy Court
for the District of Delaware and delivered to the Administrative Agent prior to
the date hereof .
C. The Committee, FRD, Parent and Denny's filed (a) a First
Amended Joint Plan of Reorganization dated April 23, 2002 under Chapter 11 of
Section 1125 of title 11, United States Code (the "Joint Plan"), as delivered
to the Administrative Agent prior to the date hereof , and (b) a First Amended
Disclosure Statement to Accompany the Joint Plan of Reorganization dated
April 23, 2002 (the "Disclosure Statement"), as delivered to the Administrative
Agent prior to the date hereof .
D. Parent and the Borrowers have requested that the Required
Lenders agree to waive any Default or Event of Default that might arise from
the consummation of certain transactions contemplated by the Stipulation and
Agreement and the Joint Plan and Disclosure Statement and otherwise consent to
such transactions.
E. The Required Lenders are willing to agree to such waiver,
on the terms and subject to the conditions set forth herein.
F. Capitalized terms used but not defined herein shall have
the meanings assigned to them in the Credit Agreement after giving effect to
this Waiver.
Accordingly, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Waiver. The Lenders hereby consent under the Loan
Documents to, and waive any Default or Event of Default (including but not
limited to any Default or Event of Default arising under Section 3 of Amendment
No. 8) that is caused by, (a) Advantica's and Denny's having entered into the
Stipulation and Agreement and being a co-proponent of the Joint Plan, (b) the
cancellation of the capital stock of FRD pursuant to the Joint Plan, (c) the
receipt pursuant to the Joint Plan and ownership by Denny's of (i) common stock
of FRD (FRD, after giving effect to the consummation of the Joint Plan, the
"Reorganized Debtor"), (ii) junior secured notes (the "New Junior Secured
Notes") of theReorganized Debtor and (iii) additional junior secured L/C notes
(the "L/C Notes") of the Reorganized Debtor related to outstanding letters of
credit under the New FRI-M Credit Agreement, in each case issued to Denny's
pursuant to the Joint Plan, (d) the settlement and satisfaction in full, to the
extent provided in the Joint Plan, of all claims of Advantica and Denny's
against FRD and its subsidiaries, including without limitation those that arose
(i) in connection with the New FRI-M Credit Agreement or the Advantica
Guarantee or (ii) under the management services agreement dated as of May 24,
1996, between Parent and FRD (the "Management Services Agreement"),
(e) Advantica's entering into with the Reorganized Debtor, and performing
Advantica's obligations under, a transition services agreement, an information
technology services agreement and an intercreditor agreement as contemplated by
the Joint Plan (the actions referred to in clauses (a) through (e) above, the
"Specified Transactions"), and (f) the filing of Uniform Commercial Code
financing statements with respect to the assets of FRD and its subsidiaries in
connection with, and for the benefit of the Agent and lenders under, the Exit
Financing (as defined in the Joint Plan), so long as no liens on such assets
are granted in connection with the Exit Financing prior to the consummation of
the Joint Plan, provided that (A) each Specified Transaction shall be on terms
(to the extent not expressly set forth in the Stipulation and Agreement or
the Joint Plan) reasonably satisfactory to the Administrative Agent and (B) the
consummation of each Specified Transaction (1) shall have been duly authorized
by all requisite corporate and, if required, stockholder action and (2) will
not (x) violate (A) any provision of law, statute, rule or regulation, or of
the certificate or articles of incorporation or other constitutive documents or
by-laws of Parent,any Borrower or any other Subsidiary, (B) any order of any
Governmental Authority or (C) any provision of any indenture, agreement or
other instrument to which Parent, any Borrower or any other Subsidiary is a
party or by which any of them or any of their property is or may be bound or
(3) be in conflict with, result in a breach of or constitute (alone or with
notice or lapse of time or both) a default under, or give rise to any right to
accelerate or to require the prepayment, repurchase or redemption of any
obligation under any such indenture, agreement or other instrument.
SECTION 2. Agreements. (a) Parent and the Borrowers agree
that they will not, at any time (whether before or after the confirmation or
effectiveness of the Joint Plan), without the prior written consent of the
Required Lenders, (i) make or agree to make any amendment, addition or
supplement or other modification to or grant any waiver under (A) the
Stipulation and Agreement or the Joint Plan (in each case, from the form
thereof attached hereto as an Exhibit) or (B) the terms of the New Junior
Secured Notes or the L/C Notes (in each case, from the form thereof having the
terms described in the term sheets therefor included in Exhibit B hereto and
otherwise reasonably satisfactory to the Administrative Agent), including but
not limited to any reduction in the amount of distributions to which Denny's
will be entitled under the Joint Plan and any change to the requirement that
FRD reject the Management Services Agreement, (ii) grant or otherwise consent
to any waiver of the conditions to the Stipulation and Agreement or to the
confirmation or effectiveness of the Joint Plan, or (iii) otherwise grant any
discretionary approval or consent, or agree that it is satisfied (if its
satisfaction is required by the terms of the Stipulation and Agreement or Joint
Plan), with respect to any matter arising under the Joint Plan, including but
not limited to the treatment of net operating losses, the terms of any
shareholders agreement to be entered into with respect to the Reorganized
Debtor, and any modification to the classification of claims and interests
under the Joint Plan, in the case of each of clauses (i), (ii) and (iii) above,
if doing so could reasonably be expected to be materially adverse to the
interests of the Lenders.
(b) Parent and the Borrowers further agree that (i) any cash
payments received by Parent or any of its Subsidiaries pursuant to the Joint
Plan, or in respect of the New Junior Secured Notes or L/C Notes issued
pursuant to the Joint Plan, shall be deemed to be "Subrogation Payments" for
purposes of Section 3(e) of Amendment No. 8, (ii) any New Junior Secured Notes
and L/C Notes issued to Parent or any of its Subsidiaries shall be deemed to
constitute "Pledged Debt Securities" and "Collateral" under the Pledge
Agreement, and shall be certificated and delivered promptly after the receipt
by Parent or such Subsidiary of such New Junior Secured Notes or L/C Notes, as
applicable, tothe Collateral Agent, together with undated instruments of
transfer, in form and substance reasonably satisfactory to the Collateral
Agent, duly executed by Parent or its applicable Subsidiary, and (iii) Parent
and the Borrowers will, at their own cost and expense, take such further
actions as may be reasonably requested by the Collateral Agent to effect the
creation and perfection of the Collateral Agent's security interest in the New
Junior Secured Notes and L/C Notes intended to be created under the Pledge
Agreement and this Section 2(b).
SECTION 3. Waiver Fee. In consideration of the agreements
of the Required Lenders contained in this Waiver, the Borrower agrees to pay to
the Administrative Agent, for the account of each Lender that delivers an
executed counterpart of this Waiver prior to 5:00 p.m., New York City time, on
June 17, 2002, a waiver fee (the "Waiver Fee") in an amount equal to 0.1% of
such Lender's Commitment as of such date.
SECTION 4. Representations and Warranties. Parent and the
Borrowers represent and warrant to the Administrative Agent and to each of the
Lenders that:
(a) This Waiver has been duly authorized, executed and
delivered by Parent and each of the Borrowers and constitutes their
legal, valid and binding obligations, enforceable in accordance with
its terms except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding at law or in equity).
(b) Before and after giving effect to this Waiver, the
representations and warranties set forth in Article III of the Credit
Agreement are true and correct in all material respects with the same
effect as if made on the date hereof, except to the extent such
representations and warranties expressly relate to an earlier date.
(c) Before and after giving effect to this Waiver, no Event
of Default or Default has occurred and is continuing.
(d) Parent has delivered to the Agent true, correct and
complete copies of the Stipulation and Agreement, as in effect on the
date hereof and the Joint Plan and Disclosure Statement as most
recently filed with the United States Bankruptcy Court for the
District of Delaware.
SECTION 5. Conditions to Effectiveness. This Waiver shall
become effective as of the date (the "Effectiveness Date") on which all of the
following conditions are satisfied:
(a) The representations and warranties set forth in Section
4 hereof shall be true and correct with the same effect as if made on
the Effectiveness Date, except to the extent such representations and
warranties expressly relate to an earlier date, and the Administrative
Agent shall have received a certificate, dated the Effectiveness Date
and signed by a Financial Officer of Parent, confirming compliance
with such condition.
(b) The Administrative Agent shall have received (i)
counterparts of this Waiver that, when taken together, bear the
signatures of Parent, each of the Borrowers and the Required Lenders
and (ii) the Waiver Fee.
SECTION 6. Credit Agreement. Except as waived or modified
hereby, the Credit Agreement shall continue in full force and effect in
accordance with the provisions thereof as in existence on the date hereof. On
and after the Effectiveness Date, any reference to the Credit Agreement shall
mean the Credit Agreement as waived and otherwise modified hereby.
SECTION 7. Loan Document. This Waiver shall be a Loan
Document for all purposes.
SECTION 8. Applicable Law. THIS WAIVER SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 9. Counterparts. This Waiver may be executed in two
or more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one agreement. Delivery of an
executed counterpart of a signature page of this Waiver by telecopy shall be
effective as delivery of a manually executed counterpart of this Waiver.
SECTION 10. Expenses. Parent and the Borrowers agree to
reimburse the Administrative Agent for its out-of-pocket expenses in connection
with this Waiver, including the reasonable fees, charges and disbursements of
Cravath, Swaine & Xxxxx, counsel for the Administrative Agent.
IN WITNESS WHEREOF, the parties hereto have caused this
Waiver to be duly executed by their respective authorized officers as of the
day and year first written above.
ADVANTICA RESTAURANT GROUP, INC.,
by
/s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President and
Treasurer
XXXXX'X, INC.,
by
/s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President and
Treasurer
ADVANTICA SYSTEMS, INC.,
by
/s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President and
Treasurer
JPMORGAN CHASE BANK (formerly known
as The Chase Manhattan Bank),
individually and as Administrative
Agent, Collateral Agent, Swingline
Lender and Issuing Bank,
by
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Name:
Title:
SIGNATURE PAGE TO
WAIVER AND AGREEMENT
DATED AS OF
JUNE 17 2002
To approve the Waiver and Agreement:
Name of Institution ___________________________________
by
_______________________________
Name:
Title:
