SUPPLEMENTAL CREDIT FACILITY AGREEMENT
Atlanta, Georgia
December 24, 1998
Avado Brands, Inc.
f/k/a Apple South, Inc.
Corporate Headquarters
Xxxxxxx at Washington
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxx,
Chief Financial Officer
Gentlemen:
At your request, we, Wachovia Capital Investments, Inc. (the "Lender"),
hereby establish a supplemental, non-revolving, short term credit facility of
$30,000,000 in your favor (the "Credit Facility").
The Credit Facility is being established entirely separate and apart from
the credit facility previously established in your favor by Wachovia Bank, N.A.
(the "Bank"), among others, pursuant to that certain Credit Agreement, dated as
of April 1, 1998, between them and you (herein, as it has been, or may be,
modified or amended from time to time, called the "$100,000,000 Credit
Agreement"). Capitalized terms used hereinbelow, but not expressly defined
hereinbelow, shall have the meanings given to such terms in the $100,000,000
Credit Agreement. The Credit Facility is being offered subject to the following
terms and conditions:
1. The Credit Facility shall be fully disbursed to you (or your order) in
one (1) disbursement, on today's date, in the amount of $30,000,000. No portion
of the Credit Facility may be re-borrowed, once repaid; i.e., this is not a
revolving credit line. The outstanding Debt under the Credit Facility is herein
called your "Borrowing." The entire proceeds of the Borrowing shall be used by
you, when received, to fund (together with your own funds, as necessary), the
aggregate settlement amount associated with an Equity Forward Agreement dated
June 24, 1998 between the Company and the Bank (the "Equity Forward Contract"),
including applicable fees, charges and accrued interest associated therewith.
2. Your Debt shall be evidenced by a single promissory note, dated of even
date herewith, in the principal amount of $30,000,000, issued by the Borrower to
the order of the Lender (the "Supplemental Credit Facility Note").
3. The Credit Facility shall terminate, and your Borrowing shall become due
and payable in full, on March 1, 1999 (the "Maturity Date"). Prior to the
Maturity Date, however, (a) the Borrowing may be voluntarily prepaid, in whole
or in part (subject to the terms of the $100,000,000 Credit Agreement in respect
of voluntary prepayments generally), and (b) the Borrowing shall be subject to
mandatory prepayment (i) in full, if any Event of Default occurs, (ii) in an
amount equal to 100% of all debt or equity issuances made subsequent to the date
hereof, but excluding issuances of debt under the Borrower's lines of credit
existing on today's date, excluding any financings under the Borrower's lease
facility with SunTrust Bank, Atlanta, existing on today's date, and excluding
issuances of equity, subsequent to today's date, consisting of the issuance of
stock options to employees, officers or directors of the Borrower or consisting
of the issuance of any common stock of Borrower upon the exercise of any stock
options held by employees, officers or directors of Borrower, and (iii) in an
amount equal to the entire net proceeds received by you from "Identified Asset
Sales" (as hereinafter defined), upon the closing of each such "Identified Asset
Sale." For purposes hereof, "Identified Asset Sales" means your sale of any
Applebee's restaurants previously identified by you to us as the "West Virginia
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Properties," "Louisville Properties," and the "Washington, D.C. Properties."
4. The unpaid principal amount of the Borrowing from time to time
outstanding shall bear interest, payable at the expiration of each Interest
Period (except for Base Rate Borrowings, which shall be due and payable at
maturity), and on demand on maturity, at an interest rate equal to the Base Rate
plus one percent (1%) per annum or, at the Borrower's option, the Adjusted LIBOR
Rate established by the Lender for each applicable Interest Period plus three
and one-half percent (3-1/2%) per annum; provided, however, that after a Credit
Line Event of Default occurs and during its continuation, the Borrowing shall,
at the Lender's option, bear interest instead at the Default Rate.
5. You shall pay the Lender a nonrefundable, transaction fee of $300,000 on
January 4, 1999 as compensation for its arranging the Credit Facility.
6. The following shall constitute "Credit Line Events of Default"
hereunder: (i) you shall fail to pay the Borrowing, when due, or any interest or
fee, within five (5) Domestic Business Days after its due date; or (ii) any
breach by you of Paragraph 7 hereof; or (iii) any Event of Default occurring
under the $100,000,000 Credit Agreement (except under Section 5.4 of the Credit
Agreement until such time as such provision is amended by the parties thereto).
Upon the occurrence of any Event of Default, all existing Credit Line Borrowings
shall become immediately due and payable, at the Lender's option.
7. All representations, warranties and covenants (including affirmative,
negative and financial covenants) set forth in the $100,000,000 Credit Agreement
shall be deemed incorporated by reference herein and made an integral part
hereof, as if fully set forth herein. In addition to the foregoing, and without
limitation thereof, you further agree not (i) to prepay any Debt (except for
prepayments made in respect of borrowings under lines of credit existing on
today's date), or (ii) make any additional common stock repurchases hereafter
(except with respect to the Equity Forward Agreement), so long as any part of
the Borrowing remains outstanding and unpaid.
8. This Agreement is intended by the parties hereto to survive any
termination of the $100,000,000 Credit Agreement. In such event, however, all
terms of the $100,000,000 Credit Agreement shall be deemed to continue in
existence and remain applicable hereto until the Borrowing is fully paid and
satisfied.
9. This Agreement 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.
10. You agree to pay all costs and expenses of the Lender incurred in
connection with the preparation, execution, delivery and enforcement of this
Agreement and all other loan documents executed in connection herewith,
including the reasonable fees and out-of-pocket expenses of Bank's counsel.
AVADO BRANDS, INC.
f/k/a APPLE SOUTH, INC., as Borrower
By:_________________________________
Xxxxx X. Xxxxx, Chief Financial
Officer and Treasurer
Attest:_____________________________
Xxxx XxXxxx, Secretary
Accepted and Agreed:
WACHOVIA CAPITAL INVESTMENTS, INC., as Lender
By:________________________________
Name:___________________________
Title:____________________________
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SUPPLEMENTAL CREDIT FACILITY NOTE
Atlanta, Georgia
December 24, 1998
For value received, AVADO BRANDS, INC., f/k/a APPLE SOUTH, INC., a Georgia
corporation (the "Borrower"), promises to pay to the order of WACHOVIA CAPITAL
INVESTMENTS, INC. (the "Lender"), the principal sum of Thirty Million and No/100
Dollars ($30,000,000.00), or so much thereof as shall be disbursed and remain
outstanding under the Credit Facility established pursuant to the Credit
Agreement (defined below), on the Credit Facility Maturity Date. The Borrower
promises to pay interest on the unpaid principal amount of this Note on the
dates and at the interest rate provided for in the Credit Agreement referred to
below. Interest on any overdue principal of and, to the extent permitted by law,
overdue interest on the principal amount hereof shall bear interest at the
Default Rate, as provided for in the Credit Agreement. All such payments of
principal and interest shall be made in lawful money of the United States in
federal or other immediately available funds at the office of the Lender at 000
Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000-0000.
This Note is the "Supplemental Credit Facility Note" referred to in the
Supplemental Credit Facility Agreement dated as of December 24, 1998, between
the Borrower and the Lender (as the same may be amended and modified from time
to time, the "Credit Agreement"). Terms defined in the Credit Agreement are used
herein with the same meanings. Reference is made to the Credit Agreement for the
provisions for the voluntary and mandatory prepayment and the repayment hereof
and the acceleration of the maturity hereof.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed,
under seal, by its duly authorized officer as of the day and year first above
written.
AVADO BRANDS, INC.,
f/k/a APPLE SOUTH, INC. (SEAL)
By:_______________________________
Xxxxx X. Xxxxx, Chief Financial
Officer and Treasurer
Attest:___________________________
Xxxx XxXxxx, Secretary
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