Exhibit 10.51
EXECUTION COPY
FIRST AMENDMENT TO
COLLATERAL ASSIGNMENT AGREEMENT
Among
SECURED RESTAURANTS TRUST,
FINANCIAL SECURITY ASSURANCE INC.
and
THE BANK OF NEW YORK,
as Trustee and Collateral Agent.
Dated as of April 1, 1998
FIRST AMENDMENT TO
COLLATERAL ASSIGNMENT AGREEMENT
THIS FIRST AMENDMENT TO COLLATERAL ASSIGNMENT AGREEMENT (this
"Amendment") is dated as of April 1, 1998 among SECURED RESTAURANTS TRUST, a
Delaware statutory business trust (the "Issuer") existing pursuant to the
Amended and Restated Trust Agreement dated as of October 15, 1990 between
Spartan Holdings, Inc. and Wilmington Trust Company, FINANCIAL SECURITY
ASSURANCE INC. ("Financial Security") and THE BANK OF NEW YORK, as Trustee under
the Indenture (in such capacity, the "Trustee") and as Collateral Agent
hereunder (in such capacity, the "Collateral Agent").
This Amendment amends and supplements the Collateral Assignment
Agreement, dated as of November 1, 1990, among the Issuer, Financial Security
and The Citizens and Southern National Bank of South Carolina, as Trustee and
Collateral Agent (as succeeded in such capacities by The Bank of New York) (the
"Original Agreement," and as amended by this Amendment, the "Collateral
Assignment Agreement"), as set forth below.
Terms used in this Amendment and not otherwise defined in this
Amendment have the meanings assigned to such terms in the Original Agreement.
RECITALS
A. The Issuer has entered into separate Loan Agreements with Quincy's
Realty, Inc. ("Quincy's") and Spardee's Realty Inc. ("Spardee's") pursuant to
which the Issuer made a Loan to each of Quincy's and Spardee's, which Loans were
in the aggregate initial outstanding principal amount of $225,000,000.
B. Each of Quincy's and Spardee's owned its Properties and executed and
delivered to the Issuer certain Mortgage Notes to evidence its borrowings
pursuant to the related Loan Agreement.
C. As security for its obligations under the related Loan Agreement and
its Mortgage Notes, each of Quincy's and Spardee's executed and delivered to the
Issuer one or more Mortgages and certain other Collateral.
D. In order to obtain sufficient funds for the making of the Loans, the
Issuer issued Bonds in the initial aggregate principal amount of $225,000,000
pursuant to the Indenture between the Issuer and the Trustee.
E. Financial Security issued its Policy, under which Financial Security
has guaranteed the scheduled payment of interest and principal payable on the
Bonds.
F. As an inducement to Financial Security to issue and deliver the
Policy and the Liquidity Policy, the Issuer and Financial Security executed and
delivered the Insurance Agreement.
G. As additional inducement to Financial Security to issue the Policy
and the Liquidity Policy and to execute the Insurance Agreement, and as security
for the repayment of all sums paid by Financial Security under the Policy and
the Liquidity Policy and the payment and performance by the Issuer of all of its
obligations then or thereafter existing under the Insurance Agreement, pursuant
to the Original Agreement, the Issuer assigned certain of its property as
Collateral to the Collateral Agent, as agent for (i) Financial Security and (ii)
the Trustee, as trustee for the holders of the Bonds, as the interests of
Financial Security and the Trustee may appear, upon the terms and conditions set
forth in the Original Agreement.
H. Quincy's and Spardee's now desire to defease the Mortgage Notes by
causing the deposit with the Collateral Agent of Defeasance Eligible Investments
and cash sufficient to pay the principal of and interest on each Mortgage Note
as the same becomes due.
I. On the date of this Amendment, pursuant to an Assignment and
Assumption Agreement, made as of April 1, 1998 by and between Spardee's and
Quincy's (the "Assignment and Assumption Agreement") Spardee's has assigned to
Quincy's, and Quincy's has assumed, all obligations and liabilities of Spardee's
under the Spardee's Loan Agreement and under the related Mortgage Notes, and, as
consideration for such assumption by Quincy's, there has been delivered to
Quincy's by or on behalf of Spardee's immediately available funds sufficient to
purchase Defeasance Eligible Investments to defease the Spardee's Mortgage
Notes.
J. On the Defeasance Date, Quincy's shall deliver to the Collateral
Agent immediately available funds which, together with funds on deposit in the
Accounts, after liquidation of all Eligible Investments held therein (other than
existing Defeasance Eligible Investments), shall be sufficient to purchase
Defeasance Eligible Investments, which together with the Defeasance Eligible
Investments currently held by the Collateral Agent, are sufficient to defease
all remaining payments due under the Mortgage Notes.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. The following capitalized terms have the
meanings set forth below for purposes of the Collateral Assignment Agreement.
"BORROWER" or "BORROWERS" means Quincy, both in its capacity as one of
the original Borrowers (as defined in the Original Agreement) and as assignee of
Spardee's obligations as one of the original Borrowers (as defined in the
Original Agreement).
"BORROWER COLLATERAL" has the meaning set forth in the Loan Agreements,
as amended.
"CHASE LETTER OF CREDIT" has the meaning set forth in Section 6(c) of
this Amendment.
"COLLATERAL" means Collateral (as defined in the Original Agreement, as
amended by this Amendment) and the Borrower Collateral.
"COLLATERAL ASSIGNMENT AGREEMENT" means the Original Agreement, as
amended by this Amendment.
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"DEFEASANCE DATE" means April 1, 1998.
"DELIVERY," when used with respect to any Defeasance Eligible
Investments, means:
(i) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that
constitute "instruments" within the meaning of Section 9-105(1)(i) of
the UCC and are susceptible of physical delivery, transfer thereof by
physical delivery to the Collateral Agent endorsed to, or registered in
the name of, the Collateral Agent or its nominee or endorsed in blank,
and, with respect to a certificated security (as defined in Section
8-102 of the UCC) transfer thereof (A) by delivery of such certificated
security to the Collateral Agent in accordance with the provisions of
Section 8-301(a) of the UCC, and such additional or alternative
procedures as may hereafter become appropriate to effect the complete
transfer of ownership of or a security interest in any such Defeasance
Eligible Investment to the Collateral Agent, consistent with changes in
applicable law or regulations or the interpretation thereof;
(ii) with respect to any security issued by the U.S. Treasury,
the Federal Home Loan Mortgage Corporation or the Federal National
Mortgage Association that is a book-entry security held through the
Federal Reserve System pursuant to federal book-entry regulations, the
following procedures, all in accordance with applicable law, including
applicable federal regulations and Articles 8 and 9 of the UCC; the
crediting of such Defeasance Eligible Investment to a securities
account maintained with a Federal Reserve Bank by a securities
intermediary; the indication by such securities intermediary that such
Defeasance Eligible Investment has been credited to the Collateral
Agent's securities account at the securities intermediary; and such
additional or alternative procedures as may hereafter become
appropriate to effect complete transfer of ownership of or a security
interest in any such Defeasance Eligible Investment to the Collateral
Agent, consistent with changes in applicable law or regulations or the
interpretation thereof; and
(iii) with respect to any Defeasance Eligible Investment that
is an uncertificated security under Article 8 of the UCC and that is
not governed by clause (ii) above, registration on the books and
records of the issuer thereof in the name of the Collateral Agent or
another Person (other than a "securities intermediary" (as defined in
Section 8-102(a)(4) of the UCC)) acting on behalf of the Trustee.
"STOCK PLEDGE" means the Stock Pledge Agreement, dated as of November
1, 1990, among Quincy's Restaurants, Inc. and the Issuer, as amended by the
First Amendment to Stock Pledge Agreement, dated as of April 1, 1998, and any
further amendments thereto.
SECTION 2. SECURITY AGREEMENTS.
(a) Section 2.01(a) of the Original Agreement is hereby
amended by adding the word "and" at the end of subsection (vi) and
adding the following new subsection (vii) thereto:
"(vii) the Borrower Collateral."
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(b) The Issuer hereby restates and confirms the provisions set
forth in the first paragraph of Section 2.01 of the Original Agreement
with respect to the granting of a security interest in the Collateral
(as amended by this Agreement) and hereby collaterally assigns,
transfers, sets over, pledges and conveys to the Collateral Agent, as
agent for Financial Security and the Trustee, as trustee for the
holders of the Bonds, and their respective successors and assigns, as
the interests of Financial Security and the Trustee may appear, all of
the right, title, interest and estate of the Issuer, whether now or
hereafter acquired in, to and under the Collateral (as such term is
defined in the Original Collateral Agreement, as amended by this
Amendment).
(c) Section 2.01 of the Original Agreement is hereby further
amended by adding the following new subsections thereto:
"(c) As of the date hereof, Quincy's has deposited
with the Collateral Agent $173,144,195 in immediately
available funds. The Collateral Agent hereby accepts such
funds and will use such funds, together with all funds on
deposit in the Accounts, after liquidation of all Eligible
Investments held in or credited to the Accounts (other than
any existing Defeasance Eligible Investments), to purchase the
Defeasance Eligible Securities listed on Exhibit A attached
hereto.
(d) The Collateral Agent agrees as follows with
respect to the Defeasance Eligible Investments, and the
proceeds thereof, held from time to time in the Prepayment
Account:
(i) any Defeasance Eligible Investment that
is held in deposit accounts shall be made in the name
of the Collateral Agent and shall be subject to the
exclusive custody and control of the Collateral
Agent, and the Collateral Agent shall have sole
signature authority with respect thereto;
(ii) any Defeasance Eligible Investment that
constitutes Physical Property (as defined in the
definition of Delivery) shall be delivered to the
Collateral Agent in accordance with paragraph (i) of
the definition of "Delivery" and shall be held,
pending maturity or disposition, solely by the
Collateral Agent or a securities intermediary (as
such term is defined in Section 8-102(a)(14) of the
UCC) acting solely for the Collateral Agent;
(iii) any Defeasance Eligible Investment
that is a book-entry security held through the
Federal Reserve System pursuant to federal book-entry
regulations shall be delivered in accordance with
paragraph (ii) of the definition of "Delivery" and
shall be maintained by the Collateral Agent, pending
maturity or disposition, through continued book-entry
registration of such Defeasance Eligible Investment
as described in such paragraph; and
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(iv) any Defeasance Eligible Investment that
is an "uncertificated security" under Article 8 of
the UCC and that is not governed by clause (iii)
above shall be delivered to the Collateral Agent in
accordance with paragraph (iii) of the definition of
"Delivery" and shall be maintained by the Collateral
Agent, pending maturity or disposition, through
continued registration of the Collateral Agent's (or
its nominee's) ownership of such security directly or
through one or more securities intermediaries."
SECTION 3. REPRESENTATIONS AND WARRANTIES.
(a) The Issuer hereby confirms that, as of the Defeasance
Date, its representations and warranties set forth in Section 3.01, of
the Original Agreement are true and correct with respect to this
Collateral Assignment Agreement.
(b) The Collateral Agent hereby confirms that, as of the
Defeasance Date, its representations and warranties set forth in
Section 3.04(b), (c), (d), (e) and (f) of the Original Agreement are
true and correct with respect to this Collateral Assignment Agreement
and hereby makes the following representation:
"The Collateral Agent is a state banking corporation
organized and existing under the laws of the State of
New York; and is duly qualified to do business, is in
good standing and has obtained all necessary
licenses, permits, charters, registrations and
approvals (together, "approvals") necessary for their
performance of its obligations under this Agreement."
SECTION 4. DELETION OF PROVISIONS. The Original Agreement is hereby
amended by deleting the following Sections thereof: Section 3.02, Sections
4.02(f) and (g) and Sections 4.10(a), (c), (d), (e), (f), (g) and (i). Section
4.10(h) of the Original Agreement is hereby amended and restated to provide as
follows:
"The Borrower or the Issuer will deliver to the Collateral Agent, and
the Collateral Agent shall maintain on file, copies of all financing
statements required to be prepared by the Controlling Party."
SECTION 5. COLLECTIONS AND ACCOUNTS.
(a) Section 6.02(f) of the Original Agreement is hereby
amended and restated in its entirety to provide as follows:
"The Collateral Agent will deposit the proceeds of
any drawing under the Chase Letter of Credit in the
Collection Account and apply such funds solely as
directed by Financial Security."
(b) Section 6.02(g) of the Original Agreement is amended and
restated to provide as follows:
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"(g) Within the Prepayment Account, the Collateral
Agent shall maintain a Defeasance Collateral Subaccount and
shall deposit in and maintain within such subaccount the
Defeasance Eligible Investments delivered by, or purchased
with cash by the Collateral Agent at the direction of the
Issuer in connection with the defeasance of the Mortgage
Notes. Prior to their maturity, such Defeasance Eligible
Investments shall not be liquidated or otherwise transferred
to the Mortgage Payment Account or any other Account and shall
be used solely to make payments due and payable on the Bonds,
or otherwise in accordance with the Collateral Assignment
Agreement. All payments and collections on the Defeasance
Eligible Investments will be deposited in the Prepayment
Account on the day of receipt."
(c) Section 6.03(i) of the Original Agreement is hereby
amended and restated to provide as follows:
"(i) by 10:00 on each Payment Date, the Collateral
Agent shall transfer from the Prepayment Account to the
Mortgage Payment Account funds equal to the aggregate amount
of principal and interest due on the Bonds on such Payment
Date;"
Sections 6.03(ii), (iii) and (iv) of the Original
Agreement are hereby deleted in their entirety.
(d) Sections 6.03(v) and (vi) of the Original Agreement are
hereby amended and restated to provide as follows:
"(v) by 10:30 a.m. on each Payment Date, moneys on
deposit in the Mortgage Payment Account shall be applied first
as set forth in Section 6.04(a), and then as set forth in
Section 6.04(c) below;
(vi) by 11:00 a.m. on each Payment Date, moneys on
deposit in the Mortgage Payment Account shall be applied as
set forth in Section 6.04(d) below;"
(e) Sections 6.03(vii), (viii), (ix), (x), (xi), (xii),
(xiii), (xiv), (xv), (xvi) and (xvii) are hereby deleted in their
entirety.
(f) Sections 6.04(b), (e), (f), (g), (j), (k) and (l) and
Section 6.06 of the Original Agreement are hereby deleted in their
entirety.
(g) Section 6.08(a) of the Original Agreement is hereby
deleted in its entirety.
SECTION 6. MISCELLANEOUS.
(a) Section 7.08 of the Original Agreement is hereby amended
and restated to provide as follows:
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"Section 7.08. NOTICES. All demands, notices and
other communications to be given hereunder shall be in writing
(except as otherwise specifically provided herein) and shall
be mailed by overnight delivery or personally delivered or
telecopied to the recipient as follows:
(b) To Financial Security: Financial Security Assurance Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Surveillance Department
Telephone: (000) 000-0000
Facsimile Nos.: (000) 000-0000
(000) 000-0000
(in each case in which notice or other
communication to Financial Security refers
to a Security Event, Event of Default, a
claim on the Policy or with respect to which
failure on the part of Financial Security to
respond shall be deemed to constitute
consent or acceptance, then a copy of such
notice or other communication should also be
sent to the attention of each of the General
Counsel and the Head-Financial Guaranty
Group and shall be marked to indicate
"URGENT MATERIAL ENCLOSED.")
(c) To the Issuer: Secured Restaurants Trust
Wilmington Trust Company
Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Corporate Trust
Administration
Telephone No.: (000) 000-0000
Telex No.: 835437
Answer Back: WILM-TR
Facsimile No.: (000) 000-0000
with a copy to
the Manager: Advantica Restaurant Group, Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Legal Department
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
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(d) To the Trustee: The Bank of New York
Towermarc Plaza
00000 Xxxxxxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Corporate Trust Department
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
(e) To the Collateral
Agent: The Bank of New York
Towermarc Plaza
00000 Xxxxxxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Corporate Trust Department
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
(f) To the Borrower: Quincy's Realty, Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Legal Department
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
A party may specify an additional or different
address or addresses by writing mailed or delivered to the
other parties as aforesaid. Except as may be otherwise
specified herein, all such notices and other communications
shall be effective two Business Days after being sent. Any
notice required to be given to any Non-Controlling Party shall
also be given to the Controlling Party."
(g) Notwithstanding any provision in the Original Agreement to
the contrary, each of the Collateral Agent and the Trustee acknowledges
and agrees that all of their fees and expenses due and payable on or
prior to the Defeasance Date, and fees due thereafter, have been paid
in full by or on behalf of Quincy's, and neither the Trustee nor the
Collateral Agent has any lien on the Collateral for payment thereof or
for any expenses incurred in connection with this Collateral Assignment
Agreement or the Indenture. Financial Security hereby agrees that if,
at the direction of Financial Security, the Collateral Agent takes any
action to enforce a Mortgage Note, a Loan Agreement, this Agreement or
takes action against the Borrower or its Properties, Financial Security
will reimburse the Collateral Agent for any reasonable expenses
incurred in connection with taking such actions. The Collateral Agent
agrees to assist with such actions described in the preceding sentence
as it is reasonably requested to take.
(h) On the Defeasance Date, Quincy's will deliver to the
Collateral Agent, to hold for the benefit of Financial Security, a
letter of credit having an aggregate available amount of $1 million
issued by The Chase Manhattan Bank (the "Chase Letter of Credit"). The
Collateral Agent will (i) hold the Chase Letter of Credit on behalf of
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Financial Security in accordance with the terms of this Collateral
Assignment Agreement (ii) make drawings thereunder, at the times and
for the amounts directed in writing by Financial Security, in
accordance with the terms of the Chase Letter of Credit, and (iii)
release such Chase Letter of Credit, only at the time and as directed
in writing by Financial Security. If the Collateral Agent receives
notice from The Chase Manhattan Bank that the Chase Letter of Credit
will expire and will not be automatically extended, the Collateral
Agent shall provide a copy of such notice to Financial Security within
two Business Days.
(i) This Amendment may be executed in counterparts and by
different parties hereto in separate counterparts, each of which when
so executed and delivered shall be deemed to be an original and all of
which taken together shall constitute but one and the same instrument.
(j) THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(k) This Amendment shall be construed in connection with, and
as part of, the Original Agreement. The terms, conditions,
representations, warranties, covenants, agreements, rights, remedies,
powers and privileges set forth in the Original Agreement, as amended
or otherwise modified hereby, are hereby confirmed in all respects by
the parties hereto and shall continue in full force and effect.
(l) Each reference to the Collateral Assignment Agreement, or
words of similar import in the Original Agreement or any notice,
communication, certificate, instrument or other document executed and
delivered in connection therewith after the date hereof shall be deemed
to be a reference to the Original Agreement, as amended, supplemented
and otherwise modified hereby, and as the same may be amended,
supplemented or otherwise modified from time to time after the date
hereof, unless the context requires otherwise.
(m) This Amendment shall be binding upon, shall inure to the
benefit of, and shall be enforceable by, the parties hereto and their
respective successors and permitted assigns.
(n) Any provision of this Amendment which is prohibited or
unenforceable in any jurisdiction shall be, as to such jurisdiction,
ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions of this Amendment, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
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IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment to Collateral Assignment Agreement as of the date set forth on the
first page hereof.
SECURED RESTAURANTS TRUST
By Wilmington Trust Company, not in its
individual capacity but solely as Issuer Trustee
By /s/ Xxxx St. Xxxxx
Xxxx St. Xxxxx
Assistant Vice President
FINANCIAL SECURITY ASSURANCE INC.
By /s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
General Counsel and Managing Director
THE BANK OF NEW YORK, in its capacity as Trustee
By /s/ Xxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx
Title Agent
THE BANK OF NEW YORK, in its capacity as Collateral Agent
By /s/ Xxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx
Title Agent
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EXHIBIT A
DEFEASANCE ELIGIBLE INVESTMENTS
[List to be Attached]
