EXHIBIT 10.1
POST-PETITION
CREDIT AGREEMENT
Dated as of February 11, 2004
by and among
AVADO BRANDS, INC.,
and its Subsidiaries
as Borrowers,
THE FINANCIAL INSTITUTIONS AND OTHER LENDERS NAMED HEREIN,
as Lenders,
DDJ CAPITAL MANAGEMENT, LLC,
as Administrative Agent and Collateral Agent,
TABLE OF CONTENTS
Page
Article I - Definitions; Certain Terms........................................2
Section 1.01. Definitions.......................................2
Section 1.02. Terms Generally..................................23
Section 1.03. Accounting and Other Terms.......................23
Section 1.04. Time References..................................23
Article II - The Loans.......................................................24
Section 2.01. Loans............................................24
Section 2.02. Letter of Credit Accommodations..................27
Section 2.03. Promise to Pay; Evidence of Debt.................28
Section 2.04. Authorized Officers and Administrative Agent.....28
Section 2.05. Optional Conversion to Exit Facility.............29
Section 2.06. Priority; Liens..................................29
Article III - Payments and Other Compensation................................29
Section 3.01. Prepayments; Reductions in Commitments...........29
Section 3.02. Payments.........................................31
Section 3.03. Taxes............................................35
Section 3.04. Increased Capital................................37
Article IV - Interest and Fees...............................................38
Section 4.01. Interest on the Loans and Other Obligations......38
Section 4.02. Fees.............................................38
Article V - Conditions to Loans..............................................39
Section 5.01. Conditions Precedent to the Initial Loans........39
Section 5.02. Conditions Precedent to All Loans................42
Article VI - Representations and Warranties..................................42
Section 6.01. Representations and Warranties...................42
Article VII - Reporting Covenants............................................49
Section 7.01. Financial Statements.............................49
Section 7.02. Borrowing Base Certificate.......................51
Section 7.03. Other Financial Information......................51
Section 7.04. Notice of Events of Default and Material
Adverse Change...................................51
Section 7.05. Lawsuits.........................................52
Section 7.06. Insurance........................................52
Section 7.07. INTENTIONALLY OMITTED............................52
Section 7.08. INTENTIONALLY OMITTED............................52
Section 7.09. INTENTIONALLY OMITTED............................52
Section 7.10. INTENTIONALLY OMITTED............................52
Section 7.11. Other Information................................52
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Article VIII - Affirmative Covenants.........................................52
Section 8.01. Existence, etc...................................52
Section 8.02. Powers; Conduct of Business......................53
Section 8.03. Compliance with Laws, etc........................53
Section 8.04. Payment of Taxes.................................53
Section 8.05. Inspection of Property; Books and Records;
Discussions......................................53
Section 8.06. Tax Identification Numbers.......................53
Section 8.07. INTENTIONALLY OMITTED............................53
Section 8.08. Condemnation.....................................54
Section 8.09. Maintenance of Properties........................54
Section 8.10. Maintenance of Insurance.........................54
Section 8.11. Obtaining of Permits, Etc........................54
Section 8.12. Environmental....................................54
Section 8.13. Further Assurances...............................55
Section 8.14. Change in Collateral; Collateral Records.........55
Section 8.15. Landlord Waivers.................................55
Section 8.16. INTENTIONALLY OMITTED............................55
Section 8.17. Fiscal Year......................................56
Section 8.18. Credit Card Agreements...........................56
Section 8.19. Concentration Account Agreements.................56
Article IX - Negative Covenants..............................................56
Section 9.01. Liens, Sales of Accounts Receivable..............56
Section 9.02. Indebtedness.....................................56
Section 9.03. Fundamental Changes, Asset Sales, and
Acquisitions.....................................56
Section 9.04. Change in Nature of Business.....................57
Section 9.05. Investments......................................57
Section 9.06. Lease Obligations................................57
Section 9.07. INTENTIONALLY OMITTED............................57
Section 9.08. Payments of Certain Fees.........................57
Section 9.09. Federal Reserve Regulations......................58
Section 9.10. Transactions with Affiliates.....................58
Section 9.11. Limitations on Dividends and Other Payment
Restrictions Affecting Subsidiaries..............58
Section 9.12. Limitation on Issuance of Capital Stock..........58
Section 9.13. Modifications of Indebtedness, Organizational
Documents and Certain Other Agreements...........59
Section 9.14. Investment Company Act of 1940...................59
Section 9.15. Securities Accounts..............................59
Section 9.16. Environmental....................................59
Section 9.17. Certain Agreements...............................60
Section 9.18. Liquor License Subsidiaries......................60
Section 9.19. Non-Wholly Owned Subsidiaries....................60
Section 9.20. Dormant Subsidiaries.............................60
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Article X - Financial Covenants..............................................60
Section 10.01. Adjusted Total Operating Cash Flow...............60
Section 10.02. Total Non-Operating Disbursements................60
Section 10.03. Repairs/Capital Expenditures.....................61
Section 10.04. Certain Defined Terms for the Financial
Covenants........................................61
Article XI - Events of Default, Rights and Remedies..........................61
Section 11.01. Events of Default................................61
Article XII - Management, Collection and Status of Accounts Receivable
and Other Collateral...........................................64
Section 12.01. Collection of Accounts Receivable; Management
of Collateral....................................64
Section 12.02. INTENTIONALLY OMITTED............................67
Section 12.03. Status of Accounts Receivable and Other
Collateral.......................................67
Section 12.04. Collateral Custodian.............................68
Article XIII - THE AGENTS....................................................68
Section 13.01. Appointment Powers and Immunities; Delegation
of Duties, Liability of Agents...................68
Section 13.02. Reliance by Agents...............................70
Section 13.03. Defaults.........................................70
Section 13.04. Rights as a Lender...............................71
Section 13.05. Costs and Expenses; Indemnification..............71
Section 13.06. Non-Reliance on Agents and Other Lenders.........72
Section 13.07. Failure to Act...................................73
Section 13.08. Resignation of Agent.............................73
Section 13.09. Collateral Sub-Agents............................73
Section 13.10. Communications by Borrowers......................74
Section 13.11. Collateral Matters...............................74
Section 13.12. Restrictions on Actions by Administrative
Agent and the Lenders; Sharing Payments..........75
Section 13.13. Several Obligations; No Liability................75
Article XIV - Miscellaneous..................................................76
Section 14.01. Notices, Etc.....................................76
Section 14.02. Amendments, Etc..................................77
Section 14.03. No Waiver; Remedies, Etc.........................78
Section 14.04. Expenses; Taxes, Attorneys' Fees.................78
Section 14.05. Right of Set-off, Sharing of Payments, Etc.......78
Section 14.06. Severability.....................................79
Section 14.07. Assignments and Participations...................79
Section 14.08. Counterparts.....................................80
Section 14.09. GOVERNING LAW....................................81
Section 14.10. INTENTIONALLY OMITTED............................81
Section 14.11. INTENTIONALLY OMITTED............................81
Section 14.12. Consent..........................................81
Section 14.13. Interpretation...................................81
Section 14.14. Reinstatement; Certain Payments..................81
Section 14.15. Indemnification..................................81
Section 14.16. Interest.........................................82
Section 14.17. Records..........................................83
Section 14.18. Binding Effect...................................83
Section 14.19. Confidentiality..................................83
Section 14.20. Power of Attorney................................84
Section 14.21. Integration......................................85
Section 14.22. Lender Advertising...............................85
Section 14.23. INTENTIONALLY OMITTED............................85
Section 14.24. Liability of Borrowers...........................85
Section 14.25. Reliance on Representations and Actions
of Avado.........................................85
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POST-PETITION
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement") is entered into as of February 11,
2004, among:
(i) AVADO BRANDS, INC., a Georgia corporation ("Avado"), and each of the
following Subsidiaries (as defined below) of Avado, CANYON CAFE LIMITED, INC., a
Georgia corporation, CANYON CAFE OF TEXAS, LP, a Texas limited partnership,
CANYON CAFE OPERATING CORP., a Georgia corporation, CANYON CAFE TX GENERAL,
INC., a Georgia corporation, CYPRESS COAST CONSTRUCTION CORPORATION, a Florida
corporation, DON PABLO'S HOLDING CORP., a Delaware corporation, DON PABLO'S
LIMITED, INC., an Ohio corporation, DON PABLO'S OF TEXAS, LP, a Texas limited
partnership, DON PABLO'S OPERATING CORP., an Ohio corporation, DON PABLO'S TX
LIQUOR, INC., a Texas corporation, XXX XXXXXX OF BALTIMORE COUNTY, INC., a
Maryland corporation, XXX XXXXXX OF XXXXXX COUNTY, INC., a Maryland corporation,
XXX XXXXXX OF PRINCE GEORGE'S COUNTY, INC., a Maryland corporation, HNEF AREA
MANAGER II, LTD., a Florida limited partnership, HOPS GRILL & BAR, INC., a
Florida corporation, HOPS MARKETING, INC., a Florida corporation, HOPS OF
ALTAMONTE SPRINGS, LTD., a Florida limited partnership, Hops of Atlanta II,
Ltd., a Florida limited partnership, HOPS OF ATLANTA, LTD., a Florida limited
partnership, HOPS OF BOWLING GREEN, LTD., a Florida limited partnership, HOPS OF
BOYNTON BEACH, LTD., a Florida limited partnership, HOPS OF BRADENTON, LTD., a
Florida limited partnership, Hops of Cherry Creek, Ltd., a Florida limited
partnership, Hops of Colorado Springs, Ltd., a Florida limited partnership, HOPS
OF CORAL SPRINGS, LTD., a Florida limited partnership, HOPS OF FLORIDA MALL,
LTD., a Florida limited partnership, HOPS OF GREATER BOSTON, LTD., a Florida
limited partnership, HOPS OF GREATER DETROIT, LTD., a Florida limited
partnership, HOPS OF GREATER XXXXXXX XX, LTD., a Florida limited partnership,
HOPS OF GREATER ORLANDO, LTD., a Florida limited partnership, Hops of Idaho,
Ltd., a Florida limited partnership, HOPS OF INDIANA, LTD., a Florida limited
partnership, HOPS OF KANSAS, LTD., a Florida limited partnership, HOPS OF
LAKELAND, LTD., a Florida limited partnership, Hops of Louisiana, Ltd., a
Florida limited partnership, Hops of Massachusetts, a Florida limited
partnership, HOPS OF XXXXXXXX, LTD., a Florida limited partnership, HOPS OF
MISSOURI, LLC, a Florida limited liability company, HOPS OF OHIO, LTD., a
Florida limited partnership, Hops of South Carolina II, Ltd., a Florida limited
partnership, HOPS OF SOUTH CAROLINA, LTD., a Florida limited partnership, HOPS
OF SOUTH FLORIDA, LTD., a Florida limited partnership, HOPS OF SOUTHEAST
FLORIDA, LTD., a Florida limited partnership, HOPS OF SOUTHWEST FLORIDA, INC., a
Florida corporation, HOPS OF SOUTHWEST FLORIDA, LTD., a Florida limited
partnership, HOPS OF STUART, LTD., a Florida limited partnership, HOPS OF THE
CAROLINAS II, LTD., a Florida limited partnership, HOPS OF THE CAROLINAS, LTD.,
a Florida limited partnership, HOPS OF THE GOLD COAST, LTD., a Florida limited
partnership, HOPS OF THE OHIO VALLEY, INC., a Florida corporation, HOPS OF THE
OHIO VALLEY, LTD., a Florida limited partnership, Hops of the Rockies II, Ltd.,
a Florida limited partnership, Hops of the Rockies, Ltd., a Florida limited
partnership, SMAS, INC., a Texas corporation, THE HOPS NORTHEAST FLORIDA JOINT
VENTURE NO. I, a Florida general partnership, THE HOPS NORTHEAST FLORIDA JOINT
VENTURE NO. II, a Florida general partnership, THE HOPS NORTHEAST FLORIDA JOINT
VENTURE NO. III, a Florida general partnership (collectively, with Avado, the
"Borrowers", and each a "Borrower");
(ii) each of the lenders that from time to time is a party hereto (such
lenders, each individually a "Lender" and collectively, the "Lenders"); and
(iii) DDJ CAPITAL MANAGEMENT, LLC ("DDJ"), as administrative agent for the
Lenders (in such capacity, together with its successors and assigns, if any, in
such capacity, the "Administrative Agent"), and as collateral agent for the
Lenders (in such capacity, together with its successors and assigns, if any, in
such capacity, the "Collateral Agent").
WHEREAS, the Borrowers have filed the Chapter 11 Cases (as defined below)
and the Lenders have agreed to provide a credit facility to the Borrowers to
finance operations during the Chapter 11 Cases and for the other purposes
specified herein;
NOW THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties agree as follows:
Article I - Definitions; Certain Terms
Section 1.01. Definitions. As used in this Agreement, the following terms
shall have the respective meanings indicated below, such meanings to be
applicable equally to both the singular and plural forms of such terms:
"Account Debtor" means any Person who is or who may become obligated under,
with respect to, or on account of, an Account Receivable.
"Account Receivable" means, with respect to any Person, all of such
Person's now owned or hereafter acquired right, title, and interest with respect
to "accounts" (as that term is defined in the UCC), and any and all "supporting
obligations" (as that term is defined in the UCC) in respect thereof.
"Acknowledgement Agreement" means that certain Acknowledgement Agreement
dated as of the date hereof, entered into by and among each of the Borrowers'
Subsidiaries and the Collateral Agent in form and substance satisfactory to the
Collateral Agent.
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"Action" has the meaning ascribed to such term in Section 14.12.
"Administrative Agent" has the meaning ascribed to such term in the
introductory paragraph hereto.
"Administrative Agent Account" means the account designated by the
Administrative Agent into which the Borrowers shall make all payments to the
Administrative Agent for the benefit of the Agents and the Lenders under this
Agreement and the other Loan Documents.
"Affiliate" means, as applied to any specified Person, any other Person
that directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person. For purposes of
this definition, "control" of a Person means the power, directly or indirectly,
either to (i) vote more than 10% of the Capital Stock having ordinary voting
power for the election of directors of such Person or (ii) direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise. Notwithstanding anything herein to the contrary, in no event shall
any Lender be considered an "Affiliate" of any Loan Party.
"After Acquired Property" has the meaning set forth in Section 8.16.
"Agents" means, collectively, the Administrative Agent and the Collateral
Agent.
"Agent-Related Persons" means the Administrative Agent and any successor
agents thereto (in accordance with the terms of this Agreement), and the
Collateral Agent and any successor agents thereto (in accordance with the terms
of this Agreement), together with their respective Affiliates, and the officers,
directors, employees, counsel, agents, and attorneys-in-fact of such Persons and
their Affiliates.
"Agreement" means this Post Petition Credit Agreement, together with all
Exhibits and Schedules hereto, as such agreement may be amended, supplemented or
otherwise modified from time to time.
"Applicable Interest Rate" means (i) with respect to any Loan or other
advance or amount other than a Loan the proceeds of which are used as described
in clause (ii) of this definition, the greater of (a) the prime rate of interest
(calculated daily as reported in The Wall Street Journal) plus 5.75 % per annum
and (b) 9.75% per annum, and (ii) with respect to any Loans the proceeds of
which are continuing to be used to cash collateralize any Approved Letter of
Credit, the per annum rate of interest as calculated under the preceding clause
(i) less two percent (2%), which reduced rate shall not apply once the cash is
used to reimburse any draw on an Approved Letter of Credit or otherwise
expended.
"Approved Budget" means as of the Closing Date the budget of the Borrowers
substantially in the form of Exhibit A hereto projecting operations of the
Borrowers for calendar year 2004 (the "Budget Period") and from time to time
thereafter any subsequent budget of the Borrowers approved by the Administrative
Agent pursuant to Section 7.01(d) and not superceded by a subsequently approved
budget of the Borrowers.
"Approved Letter of Credit" means each letter of credit to be issued by a
bank chosen by Borrowers and approved by the Administrative Agent, the terms and
conditions of which have been approved by the Administrative Agent in writing
(such approval not to be unreasonably withheld).
"Assignment and Acceptance" means an Assignment and Acceptance
substantially in the form of Exhibit B attached hereto and made a part hereof
(with blanks appropriately completed) delivered to the Administrative Agent in
connection with an assignment of a Lender's interest under this Agreement in
accordance with Section 14.07.
"Authorized Officer" means with respect to any Borrower, the chief
executive officer, the controller, chief financial officer, vice president of
financial compliance and reporting or chief accounting officer of such
Borrowers.
"Avado" has the meaning ascribed to such term in the introductory
paragraph.
"Availability" means, at any time, the amount by which the Maximum
Revolving Credit Amount at such time exceeds the Revolving Credit Obligations at
such time.
"Bankruptcy Code" means Title 11 of the United States Code (11 U.S.C.
xx.xx.. 101 et seq.), as amended from time to time, and any successor statute.
"Bankruptcy Court" means the United States Bankruptcy Court for the
Northern District of Texas in Dallas, Texas.
"Benefit Plan" means an employee pension benefit plan, excluding any
Multiemployer Plan, which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code for which a Borrower or
any of its Subsidiaries or any of their ERISA Affiliates has been an "employer"
(as defined in Section 3(5) of ERISA) within the preceding six years or has any
liability.
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"Borrowing" means a borrowing hereunder consisting of Loans made on the
same Funding Date.
"Borrower and Borrowers" have the meanings ascribed to such terms in the
preamble hereto.
"Borrowing Base" means the greater of (i) the amount expended to pay the
Drawbridge Debt plus $15,500,000 or (ii) the amount shown on the Approved Budget
as "Total Borrowing Needs", plus fifty percent (50%) of the amount by which the
Borrowers' actual Cumulative Net Operating Cash Flow is greater than the amount
of "Cumulative Net Operating Cash Flow" shown on the Approved Budget, and less
fifty percent (50%) of the amount by which the Borrowers' actual Cumulative Net
Operating Cash Flow is less than the amount of "Cumulative Net Operating Cash
Flow" shown on the Approved Budget for the period commencing on the Petition
Date through the date of measurement, less the amount of the Drawbridge Debt
then outstanding; provided, however prior to the entry of a Final Order the
Borrowing Base shall not exceed the amount set forth in clause (i) of this
definition.
"Borrowing Base Certificate" means a certificate, substantially in the form
of Exhibit C attached hereto and made a part hereof, signed by an Authorized
Officer of Avado.
"Budget Period" has the meaning set forth in the definition of Approved
Budget.
"Business Day" means a day, which is not a Saturday or a Sunday or a legal
holiday on which the New York Stock Exchange is open and on which banks are not
required or permitted by law or other governmental action to close in New York,
New York.
"Capital Expenditures" means, with respect to any Person for any period,
the sum of (i) the aggregate of all expenditures paid or payable by such Person
and its Subsidiaries during such period that, in accordance with GAAP, are or
should be included in "property, plant equipment" or similar fixed asset account
on its balance sheet, whether such expenditures are paid in cash or financed and
including all Capitalized Lease Obligations paid or payable during such period,
and (ii) to the extent not covered by clause (i) above, the aggregate of all
expenditures by such Person and its Subsidiaries to acquire by purchase or
otherwise the business or fixed assets of, or the Capital Stock of, any other
Person, excluding in each case, all expenditures made in connection with the
repair, replacement or restoration of a Restaurant which is the subject of the
loss, destruction, or taking by condemnation, to the extent permitted by Section
3.01(b)(iii).
"Capitalized Lease" means, with respect to any Person, any lease of real or
personal property by such Person as lessee which is required under GAAP to be
capitalized on the balance sheet of such Person.
"Capitalized Lease Obligations" means, with respect to any Person,
obligations of such Person and its Subsidiaries under Capitalized Leases, and,
for purposes hereof, the amount of any such obligation shall be the capitalized
amount thereof determined in accordance with GAAP.
"Capital Stock" means (i) with respect to any Person that is a corporation,
any and all shares, interests, participations or other equivalents (however
designated and whether or not voting) of corporate stock, and (ii) with respect
to any Person that is not a corporation, any and all partnership or other equity
interests of such Person.
"Carve-Out Expenses" means the aggregate amount of expenses having priority
ahead of the super priority of, and Liens securing, the Obligations for (i)
professional fees and disbursements incurred or accrued by the Borrowers, any
statutory committees appointed in the Chapter 11 Cases and AP Services LLC paid
after the occurrence and during the continuation of an Event of Default
(regardless of whether incurred prior to or subsequent to an Event of Default),
in each case, as allowed by the Bankruptcy Court (including any holdbacks
imposed by the Bankruptcy Court), and (ii) fees payable to the United States
Trustee pursuant to 28 U.S.C. ss.1930, in an aggregate amount under clauses (i)
and (ii) not to exceed $2,000,000; provided that the maximum amount of the
Carve-Out Expenses shall be irrevocably reduced by the amount of fees and other
expenses included in the Carve-Out Expenses that the Borrowers, or any of them,
pay (unless such fees are paid from Funded Reserves) if an Event of Default has
occurred and is continuing.
"Change of Control" means each occurrence of any of the following:
1. during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of Avado (together
with any new directors whose election by such Board of Directors or whose
nomination for election by the shareholders of Borrowers was approved by a vote
of the majority of the directors of Borrowers then still in office who were
either directors at the beginning of such period, or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors of Avado excluding any
individuals who resign;
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2. a change in the chief executive officer of Avado, unless replaced by a
chief executive officer reasonably acceptable to the Administrative Agent.
"Chapter 11 Cases" shall mean, collectively, the proceedings commenced by
the Borrowers under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court.
"Closing Date" means the first date practicable following the entry of the
Interim Order, on which all of the conditions precedent set forth in Sections
5.01 and 5.02 have been satisfied (or waived by the Administrative Agent).
"Collateral" means all of the property and assets and all interests therein
and proceeds thereof now owned or hereafter acquired by any Person upon which a
Lien is granted or purported to be granted by such Person as security for all or
any part of the Obligations.
"Collateral Agent" has the meaning ascribed to such term in the
introductory paragraph hereto.
"Collections" means all cash, checks, notes, instruments, and other items
of payment (including insurance and condemnation proceeds, cash proceeds of
sales and other voluntary or involuntary dispositions of property, rental
proceeds, and tax refunds).
"Commission" means the Securities and Exchange Commission and any Person
succeeding to the functions thereof.
"Commitment" means, with respect to any Lender, the obligation of such
Lender to make the Loans pursuant to the terms and conditions of this Agreement,
and which shall not exceed the principal amount set forth opposite such Lender's
name on the signature pages hereof or the signature page of the Assignment and
Acceptance by which it became (or becomes) a Lender, as such may be modified
from time to time pursuant to the terms of this Agreement or to give effect to
any applicable Assignment and Acceptance; "Commitments" means the aggregate
principal amount of the Commitments of all the Lenders.
"Commitment Termination Date" means the date that is the earliest to occur
of (i) the first anniversary of the Closing Date, (ii) the effective date of a
joint plan of reorganization in the Chapter 11 Cases for substantially all the
Borrowers or the effective date of a plan of reorganization for Avado, (iii) the
date the Commitment is terminated in connection with an Event of Default
pursuant to Section 11.01, (iv) if no budget has been approved pursuant to
Section 7.01(d),the thirtieth (30th) day following the expiration of the
Approved Budget, (v) the date of any determination to proceed with the sale or
liquidation of any of the Borrowers without the consent of the Lenders other
than pursuant to a sale or a plan that pays the Obligations in full in cash and
terminates the Commitment, or (vi) the date designated by Avado on behalf of the
Borrowers in a notice to the Administrative Agent as the date on which the
Borrowers intend to voluntarily terminate the Commitments pursuant to Section
3.01(a)(ii) and pay the Obligations in full.
"Concentration Account Agreements" has the meaning ascribed to such term in
Section 12.01(a).
"Concentration Accounts" has the meaning ascribed to such term in Section
12.01(a).
"Concentration Account Bank" means Royal Bank of Canada, or such other bank
or financial institution that is selected by the Borrowers and that is
reasonably acceptable to each Agent.
"Contingent Obligation" means, with respect to any Person, any obligation
of such Person guaranteeing or intended to guarantee any Indebtedness ("primary
obligations") of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, (i) the direct or
indirect guaranty, endorsement (other than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of a primary obligor, (ii) the
obligation to make take-or-pay or similar payments, if required, regardless of
nonperformance by any other party or parties to an agreement, (iii) any
obligation of such Person, whether or not contingent, (A) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (B) to advance or supply funds (1) for the purchase or payment of any
such primary obligation or (2) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (C) to purchase property, assets, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary obligation
or (D) otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof, provided, however, that the term
"Contingent Obligation" shall not include any products warranties extended in
the ordinary course of business. The amount of any Contingent Obligation shall
be deemed to be an amount equal to the stated or determinable amount of the
primary obligation with respect to which such Contingent Obligation is made (or,
if less, the maximum amount of such primary obligation for which such Person may
be liable pursuant to the terms of the instrument evidencing such Contingent
Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability with respect thereto (assuming such Person is required to
perform thereunder), as determined by such Person in good faith.
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"Contractual Obligation" means, as applied to any Person, any provision of
any securities issued by that Person or any indenture, mortgage, deed of trust,
security agreement, pledge agreement, guaranty, contract, undertaking, agreement
or instrument to which that Person is a party or by which it or any of its
properties is bound, or to which it or any of its properties is subject.
"Control Agreement" means, with respect to a Securities Account or a
Deposit Account, an agreement, in form and substance satisfactory to the
Collateral Agent, which effectively gives "control" (as defined in the UCC) to
the Collateral Agent in such Securities Account and all investment property
contained therein or Deposit Account and all funds contained therein, as the
case may be.
"Convertible Debentures" means those certain 7% Convertible Subordinated
Debentures due March 1, 2027 originally issued by Apple South, Inc., a Georgia
corporation, as predecessor-in-interest to Avado.
"Credit Card Agreements" means those certain agreements, dated as of the
date hereof, by and among the Administrative Agent, Avado and the applicable
credit card merchant, in form and substance satisfactory to the Agents.
"Cumulative Net Operating Cash Flow" means "Net Operating Cash Flow" as
shown as a line item on the Approved Budget from the first Business Day of the
Borrowers' fiscal month through such date of measurement.
"Cure Loans" has the meaning ascribed to such term in Section
3.02(c)(iv)(C).
"DDJ" has the meaning ascribed to such term in the introductory paragraph
hereto.
"Default" means an event which, with the giving of notice or the lapse of
time or both, would constitute an Event of Default.
"Default Rate" has the meaning ascribed to such term in Section 4.01(c).
"Delinquent Property Taxes" means the aggregate amount of sales and
property taxes that are past due or otherwise delinquent for periods after the
Petition Date.
"Deposit Account" means a "deposit account" as that term is defined in the
UCC.
"Disbursement Account" means the accounts identified on Schedule 1.01(A)
which the Borrowers will use to make disbursements after the Petition Date and
into which the Administrative Agent shall make the Loans.
"Disposition" means any transaction, or series of related transactions,
pursuant to which any Borrower or any of its Subsidiaries sells, assigns,
transfers or otherwise disposes of any property or assets (whether now owned or
hereafter acquired) to any other Person, in each case whether or not the
consideration therefor consists of cash, securities or other assets owned by the
acquiring Person, excluding (i) any sales of Inventory in the ordinary course of
business on ordinary business terms, (ii) sales or other dispositions of
Permitted Investments identified in clauses (i) through (vii) in the definition
of "Permitted Investments", and (iii) closings of Restaurants owned or operated
by any Borrower or any of its Subsidiaries, to the extent that such closings do
not involve the transfer or other disposition of the Restaurant or the assets
owned and/or operated by the Borrowers or the applicable Subsidiary in
connection with such Restaurant.
"Dollar", "Dollars" and the symbol "$" each means lawful money of the
United States of America.
"Dormant Subsidiaries" means Avado Holding Corp., a Delaware corporation,
Avado Operating Corp., a Georgia corporation, and Avado SCP VIII, Inc., an
Oregon corporation.
"Drawbridge" means Drawbridge Special Opportunities Fund LP.
"Drawbridge Credit Agreement" means the Third Amended and Restated Credit
Agreement, dated as of March 21, 2003, by and among Avado, the Lenders signatory
hereto, Drawbridge and Hilco Capital LP.
"Drawbridge Debt" means the Indebtedness and other Obligations of the
Borrowers and their Subsidiaries to repay principal and to pay interest under
the Drawbridge Credit Agreement and the other "Loan Documents" (as defined in
the Drawbridge Credit Agreement) and fees, costs, expenses, and other amounts in
connection therewith in an aggregate amount (including principal, interest,
fees, costs, expenses and all other amounts) not to exceed $30,000,000.
"Drawbridge Interest" means interest as provided under the Drawbridge
Credit Agreement.
"Drawbridge Termination Date" has the meaning set forth in Section 8.18.
5
"Effect of Bankruptcy" means, with respect to any Contractual Obligation,
contract or agreement to which any Borrower is party any default or other legal
consequence arising solely on account of filing the Chapter 11 Cases (including
the application of the automatic stay) rejecting of any such Contractual
Obligation, contract or agreement with the Bankruptcy Court's approval.
"Environmental Actions" means any complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding, judgment, letter or other communication from any Governmental
Authority involving violations of Environmental Laws or Releases of Hazardous
Materials (i) from any assets, properties or businesses of any Borrower or any
of its Subsidiaries or any predecessor in interest; (ii) from adjoining
properties or businesses; or (iii) onto any facilities which received Hazardous
Materials generated by any Borrower or any of its Subsidiaries or any
predecessor in interest.
"Environmental Laws" means the Comprehensive Environmental Response,
Compensation and Liability Act (42 X.X.X.xx.xx.. 9601, et seq.), the Hazardous
Materials Transportation Act (49 X.X.X.xx.xx.. 1801, et seq.), the Resource
Conservation and Recovery Act (42 U.S.C.ss.ss.6901, et seq.), the Federal Clean
Water Act (33 U.S.C.ss.ss.1251 et seq.), the Clean Air Act (42 U.S.C.ss.ss.7401
et seq.), the Toxic Substances Control Act (15 U.S.C.ss.ss.2601 et seq. and the
Occupational Safety and Health Act (29 U.S.C.ss.ss.651 et seq.) as such laws may
be amended or otherwise modified from time to time, and any other present or
future federal, state, local or foreign statute, ordinance, rule, regulation,
order, judgment, decree, permit, license or other binding determination of any
Governmental Authority imposing liability or establishing standards of conduct
for protection of the environment.
"Environmental Liabilities and Costs" means all liabilities, monetary
obligations, Remedial Actions, losses, damages, punitive damages, consequential
damages, treble damages, costs and expenses (including all reasonable fees,
disbursements and expenses of counsel, experts and consultants and costs of
investigations and feasibility studies), fines, penalties, sanctions and
interest incurred as a result of any claim or demand by any Governmental
Authority or any third party, and which relate to any environmental condition or
a Release of Hazardous Materials from or onto (i) any property presently or
formerly owned by any Borrower or any of its Subsidiaries or (ii) any facility
which received Hazardous Materials generated by any Borrower or any of its
Subsidiaries.
"Environmental Lien" means any Lien in favor of any Governmental Authority
for Environmental Liabilities and Costs.
"Equipment" means, with respect to any Person, all of such Person's now
owned or hereafter acquired right, title, and interest with respect to
equipment, machinery, machine tools, motors, furniture, furnishings, fixtures,
vehicles (including motor vehicles), tools, parts, goods (other than consumer
goods, farm products, or Inventory), wherever located, including all
attachments, accessories, accessions, replacements, substitutions, additions,
and improvements to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, and regulations
thereunder, in each case as in effect from time to time. References to sections
of ERISA shall be construed also to refer to any successor sections.
"ERISA Affiliate" means, with respect to any Person, any trade or business
(whether or not incorporated) which is a member of a group of which such Person
is a member and which would be deemed to be a "controlled group" within the
meaning of Sections 414(b), (c), (m) and (o) of the Internal Revenue Code.
"Event of Default" means any of the occurrences set forth in Section 11.01
after the expiration of any applicable grace period and the giving of any
applicable notice, in each case as expressly provided in Section 11.01.
"Excluded Subsidiaries" means, individually and collectively, the Liquor
License Subsidiaries, the Dormant Subsidiaries and any Subsidiary that is not a
Borrower.
"Existing Affiliate Advances" means all Indebtedness evidencing loans to
Affiliates, employees and officers of Avado, made prior to the Petition Date.
"Facility" means the post-petition credit facility provided under this
Agreement.
"Federal Reserve Board" means the Board of the Federal Reserve System or
any Governmental Authority succeeding to its functions.
"FFCA Master Lease" means that certain Master Lease Agreement dated as of
October 19, 2000 by and between SPV and Hops.
"Final Order" means an order of the Bankruptcy Court finally and
unconditionally approving this Agreement and the transactions contemplated
hereby substantially in the form of the Interim Order with such changes as are
satisfactory to the Administrative Agent.
6
"Financing Order" means, as the context requires, the Interim Order or the
Final Order.
"Fiscal Year" means the fiscal year of each Borrower and its Subsidiaries
which shall be the 52/53 week period ending on the Sunday closest to December 31
of each year.
"Forfeiture Proceeding" means any action, proceeding or investigation
affecting any Borrower or any of its Subsidiaries before any court, governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, or the receipt of notice by any such party that any of them is a
suspect in or a target of any governmental inquiry or investigation, which may
result in an indictment of any of them or the seizure or forfeiture of any of
their respective properties.
"Former Administrative Agent" means Hilco Capital LP.
"Former Collateral Agent" means Drawbridge Special Opportunities Fund LP.
"Funding Date" means the date of the funding of a Loan.
"Funded Reserves" means an account designated by the Borrowers in writing
to the Administrative Agent containing funds for payment of professional and
other fees and disbursements of the kind that are included in Carve-Out
Expenses.
"GAAP" means generally accepted accounting principles in effect from time
to time in the United States; provided that for the purpose of this Agreement
and the definitions used herein, "GAAP" shall mean generally accepted accounting
principles in effect on the date hereof and consistent with those used in the
preparation of the Financial Statements; provided, further, that if there occurs
after the date of this Agreement any change in GAAP that affects in any material
respect the calculation of any financial covenant contained in Article X, the
Administrative Agent, and Avado on behalf of itself and the other Borrowers,
shall negotiate in good faith amendment to such financial covenant and any other
provision of this Agreement that relates to the calculation of such financial
covenant with the intent of having the respective positions of the Lenders and
the Borrowers after such change in GAAP conform as nearly as possible to their
respective positions as of the date of this Agreement and, until any such
amendments have been agreed upon, the covenants in Article X shall be calculated
as if no such change in GAAP has occurred.
"Governing Documents" means, (a) with respect to any corporation, (i) the
articles/certificate of incorporation (or the equivalent organizational
documents) of such corporation, (ii) the by-laws (or the equivalent governing
documents) of the corporation and (iii) any document setting forth the
designation, amount and/or relative rights, limitations and preferences of any
class or series of such corporation's capital stock; and (b) with respect to any
general partnership, (i) the partnership agreement (or the equivalent
organizational documents) of such partnership and (ii) any document setting
forth the designation, amount and/or relative rights, limitations and
preferences of any of the partnership interests; and (c) with respect to any
limited partnership, (i) the partnership agreement (or the equivalent
organizational documents) of such partnership, (ii) a certificate of limited
partnership (or the equivalent organizational documents) and (iii) any document
setting forth the designation, amount and/or relative rights, limitations and
preferences of any of the partnership interests; and (d) with respect to any
limited liability company, (i) the certificate of limited liability (or
equivalent filings) of such limited liability company, (ii) the operating
agreement (or the equivalent organizational documents) of such limited liability
company, and (iii) any document setting forth the designation, amount and/or
relative rights, limitations and preferences of any of such company's membership
interests.
"Governmental Authority" means any nation or government, any Federal,
state, city, town, municipality, county, local or other political subdivision
thereof or thereto and any department, commission, board, bureau,
instrumentality, agency or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Hazardous Materials" means (a) any element, compound or chemical that is
defined, listed or otherwise classified as a contaminant, pollutant, toxic
pollutant, toxic or hazardous substances, extremely hazardous substance or
chemical, hazardous waste, special waste, or solid waste under Environmental
Laws; (b) petroleum and its refined products; (c) polychlorinated biphenyls; (d)
any substance exhibiting a hazardous waste characteristic, including but not
limited to, corrosivity, ignitability, toxicity or reactivity as well as any
radioactive or explosive materials; and (e) any raw materials, building
components, including but not limited to asbestos-containing materials and
manufactured products containing hazardous substances.
7
"Hedging Agreement" means any and all transactions, agreements, or
documents now existing or hereafter entered into by the Borrowers, which provide
for an interest rate, credit, commodity or equity swap, cap, floor, collar,
forward foreign exchange transaction, currency swap, cross currency rate swap,
currency option, or any combination of, or option with respect to, these or
similar transactions, for the purpose of hedging Avado or its Subsidiaries'
exposure to fluctuations in interest or exchange rates, loan, credit exchange,
security or currency valuations or commodity prices.
"Highest Lawful Rate" means with respect to any Agent or any Lender, the
maximum non-usurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on the
Obligations under laws applicable to such Agent or such Lender which are
currently in effect or, to the extent allowed by law, under such applicable laws
which may hereafter be in effect and which allow a higher maximum non-usurious
interest rate than applicable laws now allow.
"Hops" means Hops Grill & Bar, Inc., a Florida corporation.
"Hops Marks" means any trade names, trademarks, service marks and other
commercial symbols and applications related to the operation of "Hops Restaurant
Bar & Brewery" Restaurants on the realty which is the subject of the
Sale-Leaseback Agreement.
"Hops Marks License" means the License Agreement, dated as of even date
with the Sale-Leaseback Agreement, between Avado, as licensor, and SPV, as
licensee, concerning the licensing of the Hops Marks to SPV, together with all
schedules and exhibits thereto, and any modifications or amendments thereof.
"Indebtedness" means, without duplication, with respect to any Person, (i)
all indebtedness of such Person for borrowed money; (ii) all obligations of such
Person for the deferred purchase price of property or services (other than trade
payables incurred in the ordinary course of business irrespective of when paid);
(iii) all obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments or other similar instruments upon which interest
payments are customarily made; (iv) all obligations and liabilities of such
Person created or arising under any conditional sales or other title retention
agreement with respect to property used and/or acquired by such Person, even
though the rights and remedies of the lessor, seller and/or lender thereunder
are limited to repossession or sale of such property; (v) all Capitalized Lease
Obligations of such Person; (vi) all obligations and liabilities, contingent or
otherwise, of such Person, in respect of letters of credit, acceptances and
similar facilities; (vii) all obligations and liabilities, calculated on a basis
satisfactory to the Administrative Agent and in accordance with accepted
practice, of such Person under Hedging Agreements; (viii) all Contingent
Obligations; (ix) all obligations referred to in clauses (i) through (viii) of
this definition of another Person secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by) a
Lien upon property owned by such Person, even though such Person has not assumed
or become liable for the payment of such Indebtedness. The Indebtedness of any
Person shall include the Indebtedness of any partnership of or joint venture in
which such Person is a general partner or a joint venturer.
"Indemnified Matters" has the meaning ascribed to such term in Section
14.15.
"Indemnitees" has the meaning ascribed to such term in Section 14.15.
"Interest Accrual Period" means a one month period.
"Interest Rate Determination Date" means, for each Interest Accrual Period,
the second Business Day immediately preceding the first day of such Interest
Accrual Period.
"Intercompany Advance" means loans made in the ordinary course of business
from (i) any Borrower to its Subsidiaries, (ii) any Borrower to a Subsidiary of
another Borrower, (iii) any Borrower's Subsidiary to any Borrower, (iv) any
Borrower's Subsidiary to the Subsidiary of another Borrower, and (v) any
Borrower to any Borrower.
"Intercompany Subordination Agreement" means a subordination agreement
executed and delivered by each Borrower, each of its Subsidiaries, and the
Collateral Agent, the form and substance of which is reasonably satisfactory to
the Collateral Agent.
"Interim Order" means an order by the Bankruptcy Court initially approving
this Agreement and the transactions contemplated hereby substantially in the
form of Exhibit D hereto (with such changes as may be approved by the
Administrative Agent) which is entered on or before February 10, 2004.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
(or any successor statute thereto) and the regulations thereunder.
8
"Inventory" means, with respect to any Person, all of such Person's now
owned and/or hereafter acquired right, title, and interest with respect to
inventory, including goods held for sale and/or lease or to be furnished under a
contract of service, goods that are leased by such Person as lessor, goods that
are furnished by such Person under a contract of service, and raw materials,
work in process, and/or materials used and/or consumed in such Person's
business.
"Investment" means, with respect to any Person, (i) any purchase or other
acquisition by that Person of Securities, or of a beneficial interest in
Securities, issued by any other Person, (ii) any purchase by that Person of all
or substantially all of the assets of a business conducted by another Person,
and (iii) any direct or indirect loan, advance (other than prepaid expenses,
accounts receivable, advances to employees and similar items made or incurred in
the ordinary course of business) or capital contribution by that Person to any
other Person, including all Indebtedness to such Person arising from a sale of
any property or assets by such Person other than in the ordinary course of its
business.
"IRS" means the Internal Revenue Service or any successor federal tax
Governmental Authority.
"Lease" means any lease of real property to which any Borrower or any of
its Subsidiaries is a party as lessor or lessee.
"Lease Guaranties" means those certain guaranties executed and delivered by
any Borrower or any of its Subsidiaries on account of indebtedness or other
obligations of any Person other than the Borrowers or any of their Subsidiaries
in connection with one or more real property leases (other than the Leases),
including without limitation the guaranties described on Schedule 1.01(B)
hereto.
"Lender" and "Lenders" have the respective meanings ascribed to such term
in the preamble to this Agreement, and shall include any other Person made a
party to this Agreement as a "Lender" in accordance with the provisions hereof.
"Lender-Related Persons" means, with respect to any Lender, such Lender,
together with such Lender's Affiliates, and the officers, directors, employees,
counsel, agents, and attorneys-in-fact of such Lender and such Lender's
Affiliates.
"Letter of Credit Documentation" means, with respect to a letter of credit,
the application therefor and the reimbursement agreement therefor (whether in a
single or several documents, taken together) entered into by any Borrower and
the issuer or such letter of credit, with such modifications thereto as may be
agreed upon by the parties thereto with the consent of the Administrative Agent.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, conditional sale agreement, deposit arrangement, security interest,
encumbrance, lien (statutory or other), preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever in
respect of any Property of a Person, whether granted voluntarily or imposed by
law, and includes the interest of a lessor under a Capital Lease or under any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement or similar notice (other
than a financing statement filed by a "true" lessor pursuant to section 9-505 of
the Uniform Commercial Code), naming the owner of such property as debtor, under
the Uniform Commercial Code or other comparable law of any jurisdiction.
"Liquor License Subsidiaries" means, individually and collectively, Don
Pablo's TX Liquor, Inc., Xxx Xxxxxx of Baltimore County, Inc., a Maryland
corporation, Xxx Xxxxxx of Xxxxxx County, Inc., a Maryland corporation, Xxx
Xxxxxx of Prince George's County, Inc., a Maryland corporation, Hops of
Baltimore County, LLC, a Florida limited liability company, and SMAS, Inc., a
Texas corporation, each of which does not own any material assets or property
other than a liquor license.
"Loan" has the meaning ascribed to such term in section 2.01(a).
"Loan Account" means an account maintained hereunder by Administrative
Agent on its books of account, at Administrative Agent's office and with respect
to the Borrowers, in which the Borrowers will be charged, jointly and severally,
with all loans made to, and all other Obligations incurred by, the Borrowers.
"Loan Documents" means this Agreement, the Notes, the Concentration Account
Agreements, the Credit Card Agreements, and all other agreements, instruments
and all documents executed and delivered pursuant hereto or thereto or otherwise
evidencing or securing any Loan executed by the Borrowers, or any of them, in
connection with this Agreement.
"Loan Parties" means the Borrowers.
9
"Material Adverse Change" means, except for the filing of the Cases and the
retraction or modification of trade terms by vendors as a result of events
leading up to and following the commencement of a proceeding under Chapter 11 of
the Bankruptcy Code, the occurrence of any material adverse change on any of (i)
the operations, performance, business, assets, properties, or condition
(financial or otherwise) of the Borrowers, taken as a whole, since January 23,
2004, (ii) the ability of any Borrower to perform its obligations under the Loan
Documents or (iii) the ability of the Agents and the Lenders to enforce the
Loans or any of the Loan Documents.
"Material Contract" means each contract or agreement to which a Borrower or
any of its Subsidiaries is a party which is material to the business,
operations, condition (financial or otherwise), or performance, of any Borrower
and its Subsidiaries, taken as a whole, but excluding all contracts evidencing
the ownership or lease of any Restaurant, other than (i) such contracts or
agreements with respect to which the net present value of all consideration
payable by or to the Borrower or any of its Subsidiaries under such contract, as
of the date thereof, exceeds $10,000,000, including the contracts listed on
Schedule 1.01(C), and (ii) any replacement or renewal contract that is similar
in all material respects to the contract that such replacement or renewal
contract is replacing or renewing.
"Maturity Date" means the same date as the Commitment Termination Date or
such earlier date on which the Loans shall become due and payable in accordance
with the terms of this Agreement and the other Loan Documents.
"Maximum Revolving Credit Amount" means at any particular time, an amount
equal to the lesser of (a) the Commitments at such time and (b) the Borrowing
Base at such time.
"Moody's" means Xxxxx'x Investors Service, Inc. and any successor thereto.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA for which any Borrower or any of its Subsidiaries or any of
their ERISA Affiliates has contributed to, or has been obligated to contribute
to, at any time during the preceding six years, or has liability.
"Net Cash Proceeds" means, (i) with respect to any Disposition by any
Person, the amount of cash received (directly or indirectly) from time to time
(whether as initial consideration or through the payment of deferred
consideration) by or on behalf of such Person or any of its Subsidiaries or
Affiliates, in connection therewith after deducting therefrom, only (A) the
principal amount of any Indebtedness secured by any Permitted Lien on any asset
that is the subject of the Disposition (other than Indebtedness assumed by the
purchaser of such asset) which is required to be, and is, repaid in connection
with such Disposition (other than Indebtedness under this Agreement), (B)
reasonable expenses related thereto reasonably incurred by such Person or such
Affiliate in connection therewith, (C) transfer taxes paid by such Person or
such Affiliate in connection therewith and (D) a provision for net income taxes,
whether paid or payable, in connection with such Disposition (after taking into
account any tax credits or deductions and any tax sharing arrangements) and (ii)
with respect to the issuance or incurrence of any Indebtedness by any Person, or
the sale or issuance by any Person of any shares of its Capital Stock, the
aggregate amount of cash received (directly or indirectly) from time to time
(whether as initial consideration or through the payment of deferred
consideration) by or on behalf of such Person or any of its Subsidiaries or
Affiliates in connection therewith after deducting therefrom only reasonable
brokerage commissions, underwriting fees and discounts, legal fees and similar
fees and commissions.
"Non Pro Rata Loan" has the meaning ascribed to such term in Section
3.02(c)(iv).
"Non-Wholly Owned Subsidiaries" means, individually and collectively, Hops
of Rhode Island, LLC, a Rhode Island limited liability company, Hops of
Connecticut, Ltd., a Florida limited partnership, Hops of Minnesota, Ltd., a
Florida limited partnership, Hops of Virginia, Ltd., a Florida limited
partnership, Hops of Xxxxxxxx XX, Ltd., a Florida limited partnership, Hops of
Baltimore County, LLC, a Florida limited liability company, and any other
Subsidiary of Avado which is not a Wholly Owned Subsidiary of Avado, a Liquor
License Subsidiary or a Dormant Subsidiary.
"Note" has the meaning ascribed to such term in Section 2.03(a).
"Notice of Borrowing" means a notice substantially in the form of Exhibit E
attached hereto and made a part hereof.
10
"Obligations" means all Loans, advances, debts, liabilities, obligations,
covenants and duties owing by any Loan Party to the Administrative Agent, the
Collateral Agent, any Lender, any Affiliate of any Lender or any Person entitled
to indemnification pursuant to Section 14.15 of this Agreement, of any kind or
nature, present or future, whether or not evidenced by any note, guaranty or
other instrument, whether or not for the payment of money, whether arising by
reason of an extension of credit, loan, guaranty, indemnification, interest rate
contract, foreign exchange contract or in any other manner, whether direct or
indirect (including those acquired by assignment), absolute or contingent, due
or to become due, but in all such circumstances only to the extent now existing
or hereafter arising or however acquired, arising under or in connection with
this Agreement, the Notes or any other Loan Document. The term "Obligation"
includes all interest (including any interest that, but for the provisions of
the Bankruptcy Code, would have accrued), charges, expenses, fees, attorneys'
fees and disbursements and any other sum chargeable to the Loan Parties under
this Agreement, the Notes or any other Loan Document.
"Operating Lease Obligations" means all obligations for the payment of rent
for any real or personal property under leases or agreements to lease, other
than Capitalized Lease Obligations.
"Other Taxes" has the meaning ascribed to such term in Section 3.03(b)
"Payment Event of Default" means an Event of Default under Section
11.01(a).
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Permitted Indebtedness" means (i) any Indebtedness owing to the Lenders
under the Loan Documents or pursuant to the Obligations; (ii) the Indebtedness
of a Borrower or any of its Subsidiaries existing on the Petition Date; (iii)
Capital Leases and purchase money Indebtedness incurred by a Borrower to finance
the acquisition of fixed assets in an aggregate amount not to exceed $1,000,000
at any time; (iv) Indebtedness of a Borrower or any of its Subsidiaries
resulting from endorsement of negotiable instruments received in the ordinary
course of the Borrower's or such Subsidiary's business; (v) Indebtedness arising
under a Concentration Account Agreement; (vi) Contingent Obligations of the
Borrowers in support of the obligations of another Borrower; (vii) Indebtedness
of a Borrower or any of its Subsidiaries in connection with: beer, wine and
liquor related bonds, construction bonds, utility bonds and other similar bonds
or guaranties in respect of Restaurant operations or management in the ordinary
course of business; (viii) Indebtedness arising from Permitted Intercompany
Advances; (ix) Indebtedness of a Borrower and any of its Subsidiaries in
connection with unpaid insurance premiums in the ordinary course of business in
an aggregate amount not to exceed $2,000,000; (x) the Drawbridge Debt; (xi)
Indebtedness of a Borrower to the Excluded Subsidiaries incurred in the ordinary
course of business in an aggregate amount not to exceed $200,000 at any time;
and (xii) Indebtedness of a Borrower or any of its Subsidiaries not expressly
permitted by clauses (i) through (xi) above, provided that the aggregate
principal amount of the Indebtedness outstanding under this clause (xii) shall
not at any time exceed $500,000 and shall be unsecured or purchase money
Indebtedness.
"Permitted Intercompany Advance" means an Intercompany Advance (i) up to an
aggregate amount not exceed $500,000 from and after the Closing Date to
Non-Wholly Owned Subsidiaries, and (ii) any Intercompany Advance made by one
Loan Party to another Loan Party.
"Permitted Investments" means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within six (6) months from the date of acquisition thereof;
(ii) commercial paper, maturing not more than 270 days after the date of issue
rated P-1 by Moody's or A-1 by Standard & Poor's; (iii) certificates of deposit
maturing not more than one year after the date of issue, issued by commercial
banking institutions and money market or demand deposit accounts maintained at
commercial banking institutions, each of which is a member of the Federal
Reserve System and has a combined capital and surplus and undivided profits of
not less than $500,000,000; (iv) repurchase agreements having maturities of not
more than 90 days from the date of acquisition which are entered into with major
money center banks included in the commercial banking institutions described in
clause (iii) above; (v) money market accounts maintained with mutual funds
having assets in excess of $2,500,000,000; (vi) tax exempt securities rated A or
better by Moody's or A+ or better by Standard & Poor's; (vii) loans and advances
permitted under clauses (vii) and (viii) of the definition of "Permitted
Indebtedness"; (viii) the equity interests owned by Avado or any of its
Subsidiaries in the existing Subsidiaries of Avado's Subsidiaries, (ix) Existing
Affiliate Advances and other existing Investments existing on the Petition Date;
(x) loans and advances to employees and officers of the Borrowers and their
Subsidiaries from time to time in the ordinary course of business for travel
expenses, moving expenses, signing bonuses and for other purposes, in an
aggregate outstanding amount not to exceed $50,000 at any time; (xi) Investments
in connection with employee benefit plans existing on the Petition Date to the
extent included in the Approved Budget; (xii) Investments permitted pursuant to
Section 9.03(b); (xiii) Investments received in settlement of debts of insolvent
account debtors; and (xiv) Investments not otherwise described in the foregoing
clauses of this definition in an aggregate outstanding amount not in excess of
$100,000.
11
"Permitted Liens" means: (i) Liens securing the Obligations; (ii) Liens on
property of any Borrower or its Subsidiaries' for shopping center assessments
and charges, taxes, assessments and governmental charges which are not yet
delinquent or which are the subject of a Permitted Protest (but excluding any
Lien by the Internal Revenue Service that is filed in public records); (iii)
Liens on property of any Borrower or its Subsidiaries' imposed by law, such as
carriers', warehousemen's, mechanics', materialmen's and other similar Liens
arising in the ordinary course of business and securing similar obligations
(other than Indebtedness) that are not overdue or are being contested in good
faith and by appropriate proceedings promptly initiated and diligently
conducted, and a reserve or other appropriate provision, if any, as shall be
required by GAAP shall have been made therefor; (iv) existing Liens on property
of a Borrower or any of its Subsidiaries', other than the Excluded Subsidiaries,
described on Schedule 1.01(D); (v) Liens securing Indebtedness permitted
pursuant to clause (iii) of the definition of "Permitted Indebtedness";
provided, however, that (i) no such Lien shall extend to or cover any other
property of a Borrower or any of its Subsidiaries, and (ii) the principal amount
of the Indebtedness secured by any such Lien shall not exceed the lesser of 100%
of the fair market value or the cost of the property so held or acquired; (vi)
deposits and pledges of property of a Borrower or any of its Subsidiaries',
other than the Excluded Subsidiaries, securing (i) obligations incurred in
respect of workers' compensation, unemployment insurance or other forms of
governmental insurance or benefits, (ii) the performance of bids, tenders,
leases, contracts (other than for the payment of money) and statutory
obligations or (iii) obligations on surety or appeal bonds, but only to the
extent such deposits or pledges are incurred or otherwise arise in the ordinary
course of business and secure obligations not past due; (vii) the licensing of
(i) the Hops Marks to SPV under the Hops Marks License (ii) trademarks with
respect to Don Pablo in connection with the Skyline Sale and Leaseback
Transaction; (viii) easements, zoning and similar restrictions, encroachments,
operation and use requirements, maintenance obligations, reservations,
repurchase rights and other minor encumbrances on, and irregularities in, title
thereto that do not (i) secure obligations for the payment of money, or (ii)
materially impair the value of such property or its use by a Borrower or any of
its Subsidiaries in the ordinary course of such Person's business, (ix) Liens
consisting of deposits pledged to secure Indebtedness permitted pursuant to
clause (vii) of the definition of Permitted Indebtedness (x) Liens in cash
deposited into escrow in connection with the FFCA Master Lease in an aggregate
amount which as of any one time does not exceed $750,000; (xi) additional Liens
in an aggregate amount not to exceed $100,000 at any one time outstanding; (xii)
Liens in connection with the cash collateralization of Approved Letters of
Credit; (xiii) claims of professionals to Funded Reserves; and (xiii) Liens to
secure the Drawbridge Debt including, without limitation, those granted by the
Bankruptcy Court as replacement liens in exchange for use of cash and other
collateral.
"Permitted Pre-Petition Payments" means (i) payments authorized by the
Bankruptcy Court pursuant to "first-day" orders, (ii) payments on reclamation
claims, (iii) cure payments in respect of the assumption of leases and other
contracts, (iv) the application of proceeds of Collateral to validly perfected
secured pre-petition claims, and (v) payments for other pre-petition claims
reflected in the Approved Budget.
"Permitted Protest" means the right of a Borrower or any of its
Subsidiaries to protest any Lien (other than any such Lien that secures the
Obligations), taxes (other than payroll taxes or taxes that are the subject of a
United States federal tax lien), or rental payment, provided that (a) a reserve
with respect to such obligation is established by the Borrower or any of its
Subsidiaries in such amount as is required under GAAP, (b) any such protest is
instituted promptly and prosecuted diligently by the Borrowers or the applicable
Subsidiary, in good faith, and (c) the Agents are satisfied that, while any such
protest is pending, there will be no impairment of the enforceability, validity,
and/or priority of any of the Collateral Agent's Liens on any material portion
of the Collateral.
"Person" means an individual, corporation, limited liability company,
partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or Governmental Authority.
"Petition Date" means the date on which the Chapter 11 Cases are filed.
"Pledge Agreements" means the pledge agreements, executed and delivered by
the Loan Parties and Collateral Agent, in favor of the Lenders, in respect of
the outstanding Capital Stock owned by the Loan Parties, each in form and
substance satisfactory to the Agents.
"Pro Rata Share" means, with respect to any Lender, the percentage obtained
by dividing (i) such Lender's Commitment, by (ii) the aggregate Commitments of
all Lenders.
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"Property" means any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
"Register" has the meaning ascribed to such term in Section 2.03(c).
"Regulation T", "Regulation U", and "Regulation X" mean, respectively,
Regulations T, U, and X of the Board or any successor, as the same may be
amended or supplemented from time to time.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, seeping, migrating,
dumping or disposing of any Hazardous Material (including the abandonment or
discarding of barrels, containers and other closed receptacles containing any
Hazardous Material) into the indoor or outdoor environment, including ambient
air, soil, surface or ground water.
"Remedial Action" means all actions taken to (i) clean up, remove,
remediate, contain, treat, monitor, assess, evaluate or in any other way address
Hazardous Materials in the indoor or outdoor environment; (ii) prevent or
minimize a Release or threatened Release of Hazardous Materials so they do not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment; (iii) perform pre-remedial studies and
investigations and post-remedial operation and maintenance activities; or (iv)
any other actions authorized by 42 U.S.C. xx.xx. 9601.
"Required Lenders" means, at any time, Lenders whose Pro Rata Shares
aggregate more than 50% of the Commitments or, if the Commitments shall have
been terminated irrevocably, Lenders holding more than 50% of the Obligations
then outstanding.
"Requirements of Law" means, as to any Person, the charter and by-laws or
other organizational or governing documents of such Person, and any law, rule or
regulation, or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject including,
without limitation, the Securities Act, the Securities Exchange Act, Regulations
T, U and X, ERISA, the Fair Labor Standards Act and any certificate of
occupancy, zoning ordinance, building, environmental or land use requirement or
Permit or environmental, labor, employment, occupational safety or health law,
rule or regulation.
"Restaurant" means a restaurant or other similar establishment owned or
operated by Avado or any of its Subsidiaries.
"Restricted Payments" means, with respect to any Person, (i) any dividend
or other distribution, direct or indirect, on account of any shares of any class
of capital stock of, partnership interest of or other equity interest of, such
Person, now or hereafter outstanding, except a dividend payable solely in shares
of that class of stock or in any junior class of stock to the holders of that
class, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of capital stock of, partnership interest of or other equity interest
of, such Person now or hereafter outstanding, (iii) any payment or prepayment of
principal of, premium, if any, or interest, fees or other charges on or with
respect to, and any redemption, purchase, retirement, defeasance, sinking fund
or similar payment and any claim for rescission with respect to, any
subordinated indebtedness and (iv) any payment made to redeem, purchase,
repurchase or retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of capital stock of,
partnership interest of or other equity interest of, such Person now or
hereafter outstanding.
"Revolving Credit Obligations" means, at any particular time, the aggregate
outstanding principal amount of the Loans at such time.
"SEC" means the Securities and Exchange Commission or any other similar or
successor agency of the Federal government administering the Securities Act.
"Securities" means any stock, shares, voting trust certificates, bonds,
debentures, notes or other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or any certificates of interest, shares
or participations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire any of the
foregoing, but shall not include the Obligations.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor Federal statute, and the rules and regulations of the SEC thereunder,
all as the same shall be in effect at the time.
"Securities Account" means a "securities account" as that term is defined
in the UCC.
"Security Agreements" means the security agreements executed and delivered
by the Loan Parties and the Collateral Agent, in favor of the Lenders, each in
form and substance satisfactory to the Collateral Agent.
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"Senior Note Documents" means, collectively, all notes, indentures, trusts,
guarantees or other documents or agreements of any kind, as the same may be
amended, restated supplemented or otherwise modified from time to time, which
have been executed in connection with the Senior Notes.
"Senior Notes" means those certain 9.75% Senior Notes due June 2006
originally issued by Apple South, Inc., a Georgia corporation, as
predecessor-in-interest to Avado.
"Senior Subordinated Note Documents" means, collectively, all notes,
indentures, trusts, guarantees or other documents or agreements of any kind, as
the same may be amended, restated supplemented or otherwise modified from time
to time, which have been executed in connection with the Senior Subordinated
Notes.
"Senior Subordinated Notes" means those certain 11.75% Senior Subordinated
Notes due June 2009 originally issued by Apple South, Inc., a Georgia
corporation, as predecessor-in-interest to Avado.
"Settlement Period" has the meaning set forth in Section 2.01(d).
"SPV" means Pubs Property, LLC, a Delaware limited liability company.
"Standard & Poor's" means Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc. and any successor thereto.
"Subsidiary" means, with respect to any Person at any date, any
corporation, limited or general partnership, limited liability company, trust,
association or other entity (i) the accounts of which would be consolidated with
those of such Person in such Person's consolidated financial statements if such
financial statements were prepared in accordance with GAAP or (ii) of which more
than 50% of (A) the outstanding Capital Stock having (in the absence of
contingencies) ordinary voting power to elect a majority of the board of
directors of such corporation, (B) the interest in the capital or profits of
such partnership or limited liability company or (C) the beneficial interest in
such trust or estate is, at the time of determination, owned or controlled
directly or indirectly through one or more intermediaries, by such Person,
provided, that "Subsidiary" shall not include Apple South Financing I, a
Delaware business trust or any successor entity formed pursuant to the TECON
Documents.
"Taxes" has the meaning ascribed to such term in Section 3.03(a).
"TECON Documents" means, collectively, all notes, indentures, trusts,
guarantees or other documents or agreements of any kind, as the same may be
amended, restated supplemented or otherwise modified from time to time, which
have been executed in connection with the TECONS and the Convertible Debentures.
"TECONS" means those certain $3.50 Term Convertible Securities, Series A,
originally issued by Apple South Financing I.
"Total Facility" means $60,000,000.
"Trademark Security Agreement" means a Trademark Security Agreement,
executed and delivered by the Borrowers and Collateral Agent for the benefit of
the Lenders, in form and substance satisfactory to the Agents.
"UCC" means the Uniform Commercial Code enacted in the Commonwealth of
Massachusetts, as amended from time to time.
"Unused Commitment Fee" has the meaning ascribed to such term in Section
4.02(c).
"Wholly Owned Subsidiary" means, with respect to any Person at any date,
any corporation, limited or general partnership, limited liability company,
trust, association or other entity of which 100% of (A) the outstanding Capital
Stock having (in the absence of contingencies) ordinary voting power to elect a
majority of the board of directors of such corporation, (B) the interest in the
capital or profits of such partnership or limited liability company or (C) the
beneficial interest in such trust or estate is, at the time of determination,
owned or controlled directly or indirectly through one or more intermediaries,
by such Person.
Section 1.02. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement.
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Section 1.03. Accounting and Other Terms. Unless otherwise expressly
provided herein, each accounting term used herein shall have the meaning given
it under GAAP. All terms used in this Agreement which are defined in Article 8
or Article 9 of the UCC and which are not otherwise defined herein shall have
the same meanings herein as set forth therein.
Section 1.04. Time References. Unless otherwise indicated herein, all
references to time of day refer to Eastern standard time or Eastern daylight
saving time, as in effect in New York, New York on such day. For purposes of the
computation of a period of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding"; provided, however, that with respect to a computation
of fees or interest payable to the Administrative Agent or the Lenders, such
period shall in any event consist of at least one full day.
Article II - The Loans
Section 2.01. Loans.
(a) Availability. Subject to the terms and conditions set forth in this
Agreement, each Lender severally agrees to make revolving credit loans on a
revolving basis (each individually, a "Loan" and collectively, the "Loans") to
the Borrowers from time to time on any Business Day during the period commencing
on the Closing Date and ending on the Commitment Termination Date or until the
earlier reduction of its Commitments to zero in accordance with the terms hereof
in an aggregate amount not to exceed at any time such Lender's Pro Rata Share of
the Availability at such time. Subject to the provisions of this Agreement, the
Borrowers may borrow, prepay and reborrow the Loans pursuant to this Article II.
The Commitment of each Lender to make Loans shall automatically and permanently
be reduced to zero on the Maturity Date. Within the foregoing limits, the
Borrowers may borrow, repay and reborrow, on or after the Closing Date and prior
to the Maturity Date, subject to the terms, provisions and limitations set forth
herein. Notwithstanding the foregoing, the Loans shall be limited to $15,500,000
plus amounts used to pay the Drawbridge Debt until the entry of a Final Order.
(b) Notice of Borrowing.
(i) When the Borrowers desire to borrow under this Section 2.01, Avado
shall deliver, on its own behalf and on behalf of the other Borrowers, to the
Administrative Agent a Notice of Borrowing, signed by Avado, not later than
12:00 p.m. (New York City time) at least one (1) Business Day (and not more than
two (2) Business Days) in advance of any proposed borrowing.
(ii) Such Notice of Borrowing shall specify (i) the amount of the proposed
Loan and (ii) the proposed Funding Date, which must be a Business Day, and have
attached to it an updated Borrowing Base Certificate which is prepared after
giving effect to the proposed Loan, and shall certify as to the satisfaction
and/or compliance with each of the conditions precedent to a Borrowing set forth
in Section 5.02. Each Notice of Borrowing given pursuant to this Section 2.01
shall be irrevocable and binding on each and every Borrower. Each Loan shall be
made in a minimum amount of $500,000 and shall be in an integral multiple of
$100,000 in excess thereof.
(iii) The Borrowing Base Certificate delivered in connection with a Notice
of Borrowing shall be prepared using information as to Cumulative Net Operating
Cash Flow as of a week ending not more than nine (9) days prior to the Funding
Date and using the Total Borrowing Needs from the Approved Budget for the week
of the projected Funding Date.
(c) Making the Loans.
(i) The Administrative Agent shall promptly notify each Lender of the
amount of such borrowing. Each such Lender shall deposit an amount equal to its
Pro Rata Share of the amount of such borrowing with the Administrative Agent in
the Administrative Agent Account in immediately available funds, not later than
3:00 p.m. (New York City time) on any Funding Date applicable thereto. Subject
to the satisfaction of the conditions precedent set forth in Section 5.01 (in
the case of Loans made on the Closing Date) and Section 5.02, the Administrative
Agent shall make the proceeds of such amounts received by it available to the
Borrowers not later than 3:30 p.m. (New York City time) on such Funding Date and
shall disburse such proceeds to the Disbursement Account. On each day that any
Revolving Credit Obligations are outstanding, the Borrowers shall be deemed to
represent and warrant to the Agents and the Lenders that the Borrowing Base
calculated as of such day equals or exceeds the aggregate principal amount of
all Revolving Credit Obligations outstanding on such day.
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(ii) Except as otherwise provided in this subsection 2.01(c), all Loans
under this Agreement shall be made by the Lenders simultaneously and
proportionately to their Pro Rata Shares of the Commitments. The failure of any
Lender to deposit the amount described in clause (i) above with the
Administrative Agent on the applicable Funding Date shall not relieve any other
Lender of its obligations hereunder to make its Loan on such Funding Date. No
Lender shall be responsible for any failure by any other Lender to perform its
obligation to make a Loan hereunder nor shall the Commitment of any Lender be
increased or decreased as a result of any such failure, and each Lender shall be
obligated to make the Loans required to be made by it by the terms of this
Agreement regardless of the failure by any other Lender.
(iii) If the Administrative Agent has notified the Lenders, the
Administrative Agent may assume that each Lender has funded its Loan and is
depositing the proceeds thereof in the Administrative Agent Account on the
Funding Date, and the Administrative Agent in its sole discretion may, but shall
not be obligated to, disburse a corresponding amount to the Borrowers on the
Funding Date. If the Loan proceeds corresponding to that amount are advanced to
the Borrowers by the Administrative Agent but are not in fact deposited with the
Administrative Agent by such Lender on or prior to the applicable Funding Date,
such Lender agrees to pay to the Administrative Agent forthwith on demand such
corresponding amount, together with interest thereon, for each day from the date
such amount is disbursed to or for the benefit of the Borrowers until the date
such amount is paid to the Administrative Agent at the rate set forth in Section
4.01. During the period in which such Lender has not paid such corresponding
amount to the Administrative Agent, notwithstanding anything to the contrary
contained in this Agreement or any other Loan Document, the amount so advanced
by the Administrative Agent to the Borrowers shall, for all purposes hereof, be
a Loan made by the Administrative Agent for its own account. If such Lender does
not pay such corresponding amount forthwith upon Administrative Agent's demand
therefor, Administrative Agent shall promptly notify the Borrowers and, if so
notified, the Borrowers shall immediately pay such corresponding amount to the
Administrative Agent for its own account, together with interest at the rate set
forth in Section 4.01, for each day from the date such amount is disbursed to or
for the benefit of the Borrowers until the date such amount is repaid to
Administrative Agent. Any interest paid to Administrative Agent by the Borrowers
in respect of such corresponding amount shall be credited against interest
payable by the Borrowers to such Lender under Section 4.01 in respect of such
corresponding amount. If such Lender shall pay to the Administrative Agent the
corresponding amount, the amount so paid shall constitute such Lender's Loan,
and if both such Lender and the Borrowers shall pay and repay such corresponding
amount, the Administrative Agent shall promptly pay Avado, which shall
distribute such amounts to the Borrowers, as agreed among the Borrowers, such
corresponding amount (together with any interest included in such payment). This
Section 2.01(c)(iii) does not relieve any Lender of its obligation to make its
Loan on any Funding Date.
(d) Settlement Period.
(i) With respect to all periods for which the Administrative Agent has
funded Loans pursuant to subsection 2.01(c), on Friday of each week, or if the
applicable Friday is not a Business Day, then on the following Business Day, or
such shorter period as the Administrative Agent may from time to time select
(any such week or shorter period being herein called a "Settlement Period"), the
Administrative Agent shall notify each Lender of the unpaid principal amount of
the Loans outstanding as of the last day of each such Settlement Period. In the
event that such amount is greater than the unpaid principal amount of the Loans
outstanding on the last day of the Settlement Period immediately preceding such
Settlement Period (or, if there has been no preceding Settlement Period, the
amount of the Loans made on the Funding Date of such Lender's initial funding),
each Lender shall promptly (and in any event not later than 2:00 p.m. (New York
City time) if the Administrative Agent requests payment from such Lender not
later than 12:00 noon (New York City time) on such day) make available to the
Administrative Agent its Pro Rata Share of the difference in immediately
available funds. In the event that such amount is less than such unpaid
principal amount, the Administrative Agent shall promptly pay over to each
Lender its Pro Rata Share of the difference in immediately available funds. In
addition, if the Administrative Agent shall so request at any time when a
Default or an Event of Default shall have occurred and be continuing, or any
other event shall have occurred as a result of which the Administrative Agent
shall determine that it is desirable to present claims against the Borrowers for
repayment, each Lender shall promptly remit to the Administrative Agent or, as
the case may be, the Administrative Agent shall promptly remit to each Lender,
sufficient funds to adjust the interests of the Lenders in the then outstanding
Loans to such an extent that, after giving effect to such adjustment, each such
Lender's interest in the then outstanding Loans will be equal to its Pro Rata
Share thereof. The obligations of the Administrative Agent and each Lender under
this subsection 2.01(d) shall be absolute and unconditional. Each Lender shall
only be entitled to receive interest on its Pro Rata Share of the Loans which
have been funded by such Lender.
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(ii) In the event that any Lender fails to make any payment required to be
made by it pursuant to subsection 2.01(d)(i), the Administrative Agent shall be
entitled to recover such corresponding amount on demand from such Lender
together with interest thereon, for each day from the date such payment was due
until the date such amount is paid to the Administrative Agent, at the Reference
Rate for three Business Days and thereafter at the rate set forth in Section
4.01. During the period in which such Lender has not paid such corresponding
amount to the Administrative Agent, notwithstanding anything to the contrary
contained in this Agreement or any other Loan Document, the amount so advanced
by the Administrative Agent to the Borrowers shall, for all purposes hereof, be
a Loan made by the Administrative Agent for its own account. Upon any such
failure by a Lender to pay the Administrative Agent, the Administrative Agent
shall promptly thereafter notify Avado, on behalf of itself and on behalf of any
of its Borrowers, of such failure and the Borrowers shall immediately pay such
corresponding amount to the Administrative Agent for its own account. Nothing in
this subsection 2.01(d)(ii) shall be deemed to relieve any Lender from its
obligation to fulfill its Commitment hereunder or to prejudice any rights that
the Administrative Agent or the Borrowers may have against any Lender as a
result of any default by such Lender hereunder.
(e) Repayment of Loans; Termination of Commitments. The principal amount of
all outstanding Loans shall be repaid in full on the Maturity Date; and the
Commitments shall terminate on the Commitment Termination Date.
(f) Use of Proceeds. Proceeds of the Loans shall be used (i) up to
$30,000,000 to repay principal of and to pay interest on, and other fees and
amounts due in respect of, the Drawbridge Debt and to provide cash collateral
for letters of credit outstanding under the Drawbridge Credit Agreement or
replacement letters of credit, therefor, and (ii) up to $30,000,000 to pay
post-petition operating expenses of the Borrowers, and Permitted Pre-Petition
Payments, to collateralize Approved Letters of Credit (excluding letters of
credit outstanding under the Drawbridge Credit Agreement and replacement letters
of credit therefor other than incremental increases in such letters of credit)
to fund Funded Reserves and Carve-out Expenses that have been billed, but not
paid (including holdbacks imposed by the Bankruptcy Court) and other costs and
expenses incurred in connection with the administration of the Chapter 11 Cases.
Section 2.02. Letter of Credit Accommodations. The Lenders and the
Administrative Agent will not provide letters of credit. However, proceeds of
the Loans may be used to cash collateralize up to 105% of any Approved Letter of
Credit; provided that such use of proceeds with respect to any Approved Letter
of Credit supported by a "Letter of Credit Accommodation" (as defined in the
Drawbridge Credit Agreement) shall be deemed to be the repayment of Drawbridge
Debt for purpose of this Agreement and the other Loan Documents. The Lenders
shall have a Lien on Borrowers' rights to the return of any cash collateral
supporting Approved Letter of Credit junior to the Lien of the issuing bank.
Section 2.03. Promise to Pay; Evidence of Debt.
(a) Promise to Pay. Each Borrower hereby agrees, jointly and severally, to
pay on the Maturity Date, the unpaid principal amount of each Loan that has been
made to any of Borrowers, and further agrees, jointly and severally, to pay all
unpaid interest accrued thereon, in accordance with the terms of this Agreement
and the promissory notes evidencing the Loans owing to the Lenders, and the
Borrowers shall execute and deliver to each Lender requesting a promissory note
such promissory notes as are necessary to evidence the Loans owing to such
Lender after giving effect to any assignment thereof pursuant to Section 14.07,
each substantially in the form of Exhibit F attached hereto and made a part
hereof (all such promissory notes and all amendments thereto, replacements
thereof and substitutions therefor being collectively referred to as the
"Notes"; and "Note" means any one of the Notes).
(b) Indebtedness Account. Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing the Indebtedness of the
Borrowers to such Lender resulting from each Loan owing to such Lender from time
to time, including the amount of principal and interest payable and paid to such
Lender from time to time hereunder and under the Notes.
(c) Master Account. The Register maintained by the Administrative Agent
pursuant to Section 14.07(c) shall include a master account and a subsidiary
account for each Lender, in which accounts (taken together) shall be recorded
(i) the date and amount of each Loan made hereunder and any Interest Accrual
Period applicable thereto, (ii) the effective date and amount of each Assignment
and Acceptance delivered to and accepted by it and the parties thereto, (iii)
the amount of any principal or interest due and payable or to become due and
payable from the Borrowers to each Lender hereunder or under the Notes, and (iv)
the amount of any sum received by the Administrative Agent from the Borrowers
hereunder and each Lender's share thereof.
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Section 2.04. Authorized Officers and Administrative Agent. On the Closing
Date and from time to time thereafter, each Borrower shall deliver to the
Administrative Agent a secretary's certificate setting forth the names of the
officers of such Borrower authorized to request Loans on behalf of such Borrower
and containing a specimen signature of each such officer or agent. The officers
and agents so authorized shall also be authorized to act for such Borrower in
respect of all other matters relating to the Loan Documents. The Administrative
Agent shall be entitled to rely conclusively on such officer's or agent's
authority to request such Loan until the Administrative Agent receives written
notice to the contrary. In addition, the Administrative Agent shall be entitled
to rely conclusively on any written notice sent to it by telecopy. The
Administrative Agent shall have no duty to verify the authenticity of the
signature appearing on, or any telecopy or facsimile of, any written Notice of
Borrowing or any other document, and, with respect to an oral request for such a
Loan, the Administrative Agent shall have no duty to verify the identity of any
person representing himself or herself as one of the officers or agents
authorized to make such request or otherwise to act on behalf of such Borrower.
The Administrative Agent and the Lenders shall not incur any liability to such
Borrower or any other Person in acting upon any telecopy or facsimile or
telephonic notice referred to above which the Administrative Agent in good faith
believes to have been given by a duly authorized officer or other person
authorized to borrow on behalf of such Borrower except in the case of gross
negligence or willful misconduct by the Administrative Agent or any Lender as
determined in a final judgment by a court of competent jurisdiction.
Section 2.05. Optional Conversion to Exit Facility. The Borrowers shall
have the option to convert the Facility to an exit facility, which facility
would have substantially similar terms as those provided in this Agreement,
including, without limitation, Articles II, III, and IV (except that the terms
set forth in Section VII, VIII, IX, X and XIV would be as agreed between the
Agents, the Lenders and the Borrowers in good faith based on circumstances of
the Borrowers at the time of the exercise of such option), would provide Liens
on the assets of the Borrowers substantially similar to those provided in the
Final Order, and would be for a term of 364 days following the effective date of
a consensual plan of reorganization, subject to the approval of each Lender
(which may be withheld in its sole and absolute discretion) and the prior
payment in full of the Conversion Commitment Fee as provided in Section 4.02. If
the Borrowers determine to exercise such option, they shall do so by giving
notice to the Administrative Agent at least sixty (60) days prior to such
proposed effective date. On or before forty (40) days prior to such proposed
effective date, the Administrative Agent shall notify Avado, on behalf the
Borrowers, of the Lenders' agreement to convert the Facility.
Section 2.06. Priority; Liens. All of the Obligations are secured by Liens
on substantially all the assets of the Borrowers and, at all times, shall
constitute administrative expenses of the Borrowers in the Chapter 11 Cases with
priority under section 364(c)(1) of the Bankruptcy Code over any and all other
administrative expenses of the kind specified in sections 503(b) and 507(b) of
the Bankruptcy Code, subject and subordinate only to Permitted Liens, and (ii)
claims for Carve-Out Expenses. No other claim having a priority superior or pari
passu to that granted to or on behalf of the Agents or the Lenders shall be
granted or approved while any of the Obligations or the Commitments remain
outstanding.
Article III - Payments and Other Compensation
Section 3.01. Prepayments; Reductions in Commitments.
(a) Voluntary Prepayments/Reductions.
(i) The Borrowers may, upon at least two (2) Business Days' prior written
notice to the Administrative Agent, at any time and from time to time, prepay
the Loans in whole or in part without premium or penalty upon notice to the
Administrative Agent; provided, however, no such prior notice is required for
the automatic daily cash sweep and paydown of the Loans. Any notice of
prepayment given to the Administrative Agent under this Section 3.01(a)(i) shall
specify the Loans to be prepaid, the date (which shall be a Business Day) of
prepayment, and the aggregate principal amount of the prepayment. When notice of
prepayment is delivered as provided herein, the principal amount of the Loans
specified in the notice shall become due and payable on the prepayment date
specified in such notice and such notice shall be irrevocable.
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(ii) The Borrowers may, upon at least three (3) Business Days' prior
written notice to the Administrative Agent, at any time and from time to time,
terminate in whole, or permanently reduce in part, the Commitments. Any partial
reduction of the Commitments shall be in an aggregate minimum amount of
$1,000,000 and integral multiples of $250,000 in excess of that amount and shall
reduce the Commitment of each Lender proportionately in accordance with its Pro
Rata Share. Any notice of termination or reduction given to the Administrative
Agent under this Section 3.01(a)(ii) shall specify the date (which shall be a
Business Day) of such termination or reduction and, with respect to a partial
reduction, the aggregate principal amount thereof. When notice of termination or
reduction of the Commitments is delivered as provided herein, the principal
amount of the Loans so reduced shall become due and payable on the date
specified in such notice to the extent the Revolving Credit Obligations exceed
the Commitments after giving effect to such reduction. The payments in respect
of reductions and terminations described in this Section 3.01(a)(ii) may be made
without premium or penalty. Once reduced the Commitment may not be increased.
(b) Mandatory Prepayments/Reductions.
(i) Immediately upon the Revolving Credit Obligations exceeding the Maximum
Revolving Credit Amount, the Borrowers shall make or cause to be made a
mandatory prepayment of the Revolving Credit Obligations in an amount equal to
such excess.
(ii) The Commitments shall be permanently reduced among the Lenders in
accordance with their Pro Rata Share by the amount of any Net Cash Proceeds in
excess of $500,000 received by the Borrowers from the sale of assets of any
Borrower after the Petition Date.
(iii) The Commitment shall be permanently reduced among the Lenders in
accordance with their Pro Rata Share by the amount of any Net Cash Proceeds in
excess of $100,000 received by the Borrowers from insurance proceeds or
condemnation awards after the Petition Date; provided, however, the Borrower
shall have the option not to reduce the Commitments under this subsection if
such Net Cash Proceeds are to be to the costs of repairs, replacement or
restoration of the asset that is the subject of the loss, destruction, or taking
by condemnation, so long as (A) no Default or Event of Default shall have
occurred and be continuing, (B) Avado, on behalf of the Borrowers, shall have
given the Administrative Agent and the Collateral Agent prior written notice of
the intention to apply such cash proceeds to the costs of repairs, replacement
or restoration of the asset which is the subject of the loss, destruction, or
taking by condemnation, and (C) Avado or the applicable Subsidiary commences the
permitting process or the construction with respect to such repairs, replacement
or restoration within 90 days after receiving such cash proceeds and completes
such repairs, replacements or restoration at the same location that the loss,
destruction or taking occurred within 12 months after receiving such cash
proceeds all in accordance with any applicable lease obligations.
(c) Nothing in Section 3.01(b) shall be construed to constitute the
Lenders' consent to any transaction which is not expressly permitted by Article
IX.
(d) Cumulative Prepayments. Except as otherwise expressly provided in this
Section 3.01, payments with respect to any subsection of this Section 3.01 are
in addition to payments made or required to be made under any other subsection
of this Section 3.01.
Section 3.02. Payments.
(a) Manner and Time of Payment. All payments of principal and interest on
the Loans and other Obligations (including, without limitation, fees and
expenses) which are payable to the Administrative Agent or the Lenders shall be
made without condition or reservation of right, in immediately available funds,
deposited to the Administrative Agents Account not later than 1:00 p.m. (New
York time) on the date due. Thereafter, payments received by the Administrative
Agent shall be distributed to each Lender in accordance with its Pro Rata Share
in accordance with the provisions of Section 3.02(c) on the date received, if
received prior to 1:00 p.m., and on the next succeeding Business Day if received
thereafter, by the Administrative Agent. All payments shall be made by the
Borrowers without set-off, counterclaim, deduction or other defense to the
Agents and the Lenders.
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(b) Except as provided in Section 2.01 hereof, if any Lender shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) on account of any Obligation in excess of its ratable
share of payments on account of similar obligations obtained by all the Lenders,
such Lender shall forthwith purchase from the other Lenders such participations
in such similar obligations held by them as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to
such Lender's ratable share (according to the proportion of (i) the amount of
such Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender of any interest or other amount paid by the purchasing Lender
in respect of the total amount so recovered). Each Borrower agrees that any
Lender so purchasing a participation from another Lender pursuant to this
Section 3.02 may, to the fullest extent permitted by law, exercise all of its
rights (including the Lender's right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrowers in the amount of such participation.
(c) Apportionment of Payments.
(i) Subject to the provisions of Section 3.02(c)(ii) and (iv), all payments
of principal and interest in respect of outstanding Loans and all payments of
fees (other than as set forth in Section 4.01) and all other payments in respect
of any other Obligation shall be allocated among the Lenders, in proportion to
their respective Pro Rata Shares or otherwise as provided herein or, in respect
of payments not made on account of Loans, as designated by the Person making
payment at the time when such payment is made. All such payments and any other
proceeds of Collateral or other amounts received by the Administrative Agent
from or on behalf of a Borrower or any of its Subsidiaries shall be promptly
applied first, to pay principal of and interest on any portion of the Loans made
to the Borrowers that the Administrative Agent may have advanced pursuant to the
express provisions of this Agreement on behalf of any Lender, for which the
Administrative Agent has not then been reimbursed by such Lender or the
Borrower; and second, to pay all other Obligations of the Borrowers then due and
payable.
(ii) After the occurrence and during the continuance of an Event of
Default, the Administrative Agent may, and shall upon the acceleration of the
Obligations pursuant to Section 11.01, apply all payments in respect of any
Obligations and all proceeds of Collateral to the Obligations in the following
order:
(A) first, to pay interest on and the principal of any portion of the Loans
which the Administrative Agent may have advanced on behalf of any Lender for
which the Administrative Agent has not then been reimbursed by such Lender or
the Borrowers;
(B) second, to pay Obligations in respect of any expense reimbursements,
indemnities or other liabilities then due to the Administrative Agent or the
Collateral Agent;
(C) third, to pay Obligations in respect of any fees then due to the Agent,
and the Lenders;
(D) fourth, to pay interest due in respect of the Loans;
(E) fifth, to pay the principal outstanding on the Loans;
(F) sixth, to the ratable payment of all other Obligations; and
(G) seventh, to Avado, on behalf of the Borrowers, to be distributed to the
Borrowers as agreed among the Borrowers;
provided, however, that if sufficient funds are not available to fund all
payments to be made in respect of any of the Obligations described in any of the
foregoing clauses (A) through (F), the available funds being applied with
respect to any such Obligations referred to in any one of such clauses shall be
allocated to the payment of such Obligations ratably, based on the proportion of
the Collateral Agent's and each Lender's interest in the aggregate outstanding
Obligations described in such clauses.
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(iii) The Administrative Agent, in its sole discretion subject only to the
terms of this Section 3.02(c)(iii), may pay from the proceeds of the Loans
(which Loans may not have been requested by the Borrowers pursuant to a Notice
of Borrowing) made to the Borrowers hereunder, whether or not made following a
request by the Borrowers pursuant to Section 2.01, all amounts then due and
payable by any Borrower hereunder, including amounts payable with respect to
payments of principal, interest, fees and expenses. The Borrowers hereby
irrevocably authorizes each Lender to make Loans upon notice from the
Administrative Agent as described in the following sentence for the purpose of
paying principal, interest, fees and expenses due from any Borrower and paying
all other amounts due and payable by a Borrower hereunder or under the Notes,
and agrees that all such Loans so made shall be deemed to have been requested by
it pursuant to Section 2.01 as of the date of the aforementioned notice. The
Administrative Agent shall request Loans on behalf of the Borrowers as described
in the preceding sentence by notifying the Lenders by telecopy or other similar
form of transmission (which notice the Administrative Agent shall thereafter
promptly transmit to Avado, on behalf of itself and its subsidiaries), of the
amount and Funding Date of the proposed borrowing and that such borrowing is
being requested on the Borrowers' behalf pursuant to this Section 3.02(c)(iii).
On the proposed Funding Date, the Lenders shall make the requested Loans in
accordance with the procedures and subject to the conditions specified in
Section 2.01 (irrespective of whether or not any Default or Event of Default
shall be continuing or the satisfaction of the conditions described in Section
5.02 or the requirement to deliver a Notice of Borrowing in Section 2.01(b),
which conditions and requirements, the Lenders irrevocably waive). The Lenders
and the Borrowers confirm that any charges which the Administrative Agent may so
make to the Loan Account of the Borrowers as herein provided will be made as an
accommodation to the Borrowers and solely at the Administrative Agent's
discretion, provided that the Administrative Agent shall from time to time upon
the request of the Collateral Agent, charge the Loan Account of the Borrowers
with any amount due and payable under any Loan Document. Whenever any payment to
be made under any such Loan Document shall be stated to be due on a day other
than a Business Day, such payment shall be made on the next succeeding Business
Day and such extension of time shall in such case be included in the computation
of interest or fees, as the case may be. Each determination by the
Administrative Agent of an interest rate or fees hereunder shall be conclusive
and binding for all purposes in the absence of manifest error.
(iv) If any Lender fails to fund its Pro Rata Share of any borrowing
requested by the Borrowers under which such Lender is obligated to fund under
the terms hereof (the funded portion of such borrowing being hereinafter
referred to as a "Non Pro Rata Loan"), excluding any such Lender who has
delivered to the Administrative Agent written notice that one or more of the
conditions precedent contained in Section 5.02 shall not on the date of such
request be satisfied and until such conditions are satisfied, then until the
earlier of such Lender's cure of such failure and the termination of the
Commitments, the proceeds of all amounts thereafter repaid to the Administrative
Agent by the Borrowers and otherwise required to be applied to such Lender's
share of all other Obligations pursuant to the terms hereof shall be advanced to
the Borrowers by the Administrative Agent on behalf of such Lender to cure, in
full or in part, such failure by such Lender, but shall nevertheless be deemed
to have been paid to such Lender in satisfaction of such other Obligations.
Notwithstanding anything contained herein to the contrary:
(A) the foregoing provisions of this Section 3.02(b)(iv) shall apply only
with respect to the proceeds of payments of Obligations;
(B) a Lender shall be deemed to have cured its failure to fund its Pro Rata
Share of any Loan at such time as an amount equal to such Lender's original Pro
Rata Share of the requested principal portion of such Loan is fully funded to
the Borrowers, whether made by such Lender itself or by operation of the terms
of this Section 3.02(c)(iv), and whether or not the Non Pro Rata Loan with
respect thereto has been repaid;
(C) amounts advanced to the Borrowers to cure, in full or in part, any such
Lender's failure to fund its Pro Rata Share of any borrowing ("Cure Loans")
shall bear interest from and after the date made available to the Borrowers at
the rate applicable to the other Loans comprising such borrowing and shall be
treated as Loans comprising such borrowing for all purposes herein;
(D) regardless of whether or not an Event of Default has occurred or is
continuing, and notwithstanding the instructions of the Borrowers as to its
desired application, all repayments of principal which, in accordance with the
other terms of this Section 3.02, would be applied to the outstanding Loans
shall be applied first, ratably to all Loans constituting Non Pro Rata Loans;
second, ratably to the Loans other than those constituting Non Pro Rata Loans or
Cure Loans; and, third, ratably to the Loans constituting Cure Loans; and
(E) no Lender shall be relieved of any obligation such Lender may have to
the Borrowers under the terms of this Agreement as a result of the provisions of
this Section 3.02(c)(iv).
(d) Payments on Non-Business Days. Whenever any payment to be made by the
Borrowers hereunder or under the Notes is stated to be due on a day which is not
a Business Day, the payment shall instead be due on the next succeeding Business
Day, and any such extension of time shall be included in the computation of the
payment of interest and fees hereunder.
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Section 3.03. Taxes.
(a) Payment of Taxes. Any and all payments by the Borrowers hereunder,
under the Notes or under any other Loan Document shall be made free and clear of
and without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Agent and each Lender, respectively, taxes
imposed on its income, capital, profits or gains and franchise taxes imposed on
it, in each case by (i) the United States except withholding taxes contemplated
pursuant to Section 3.03(e)(ii)(C), (ii) the Governmental Authority of the
jurisdiction in which such Lender's office is located or (iii) the Governmental
Authority in which such Person is organized, managed, controlled or doing
business, in each case including all political subdivisions thereof (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Borrowers shall be
required by law to withhold or deduct any Taxes from or in respect of any sum
payable hereunder, under the Notes or under any other Loan Document to any
Lender, (x) such sum payable shall be increased as may be necessary so that
after making all required withholdings or deductions (including withholdings or
deductions applicable to additional sums payable under this Section 3.03) such
Lender receives an amount equal to the sum it would have received had no such
withholdings or deductions been made, (y) the Borrowers shall make such
withholdings or deductions, and (z) the Borrowers shall pay the full amount
withheld or deducted to the relevant taxation authority or other authority in
accordance with applicable law. The Borrowers shall not be required to increase
any such amounts payable to any Agent or any Lender with respect to any Taxes or
Other Taxes (i) that are attributable to such Agent's or such Lender's failure
to comply with the requirements of Section 3.03(e) (ii) that are United States
withholding taxes imposed on amounts payable to such Agent or such Lender at the
time such Agent or such Lender becomes a party to this Agreement, except to the
extent that such Agent's or such Lender's assignor (if any) was entitled, at the
time of assignment, to receive additional amounts from the Borrowers with
respect to such Tax pursuant to this paragraph.
(b) Other Taxes. In addition, each Borrower agrees, jointly and severally,
to pay any present or future stamp, value-added or documentary taxes or any
other excise or property taxes, charges or similar levies which arise from and
which relate directly to (i) any payment made under any Loan Document or (ii)
the execution, delivery or registration of, or otherwise with respect to, this
Agreement, the Notes or any other Loan Document other than the foregoing
excluded Taxes (hereinafter referred to as "Other Taxes").
(c) Indemnification. The Borrowers shall, jointly and severally, indemnify
each Lender and each Agent who has fully complied with the requirements of
Section 3.03(e) against, and reimburse each, within twenty (20) days of a
receipt of written demand for, the full amount of all Taxes and Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed by any
Governmental Authority on amounts payable under this Section 3.03 and any
additional income or franchise taxes resulting therefrom) incurred or paid by
such Lender or such Agent (as the case may be) or any Affiliate of such Lender
and any liability (including penalties, interest, and out-of-pocket expenses
paid to third parties) arising therefrom or with respect thereto, whether or not
such Taxes or Other Taxes were correctly or lawfully payable. A certificate as
to any amount payable to any Person under this Section 3.03 submitted by such
Person to the Borrowers shall, absent manifest error, be final, conclusive and
binding upon all parties hereto.
(d) Receipts. Within thirty (30) days after a request from the
Administrative Agent, the Borrowers will furnish to the Administrative Agent,
the original or a certified copy of a receipt, if available, or other reasonably
available documentation reasonably satisfactory to the Administrative Agent
evidencing payment of such Taxes or Other Taxes. The Borrowers will furnish to
the Administrative Agent upon the Administrative Agent's request from time to
time an Officer's Certificate stating that all Taxes and Other Taxes of which it
is aware that are due have been paid and that no additional Taxes or Other Taxes
of which it is aware are due.
(e) Foreign Lender Certifications.
(i) Each Lender that is not created or organized under the laws of the
United States or a political subdivision thereof shall deliver to Avado on
behalf of the Borrowers and the Administrative Agent on the date on which such
Lender becomes a Lender pursuant to Section 14.07 hereof a true and accurate
certificate executed in duplicate by a duly authorized officer of such Lender to
the effect that such Lender is eligible to receive payments hereunder and under
the Notes without deduction or withholding of United States federal income tax
(I) under the provisions of an applicable tax treaty concluded by the United
States (in which case the certificate shall be accompanied by two duly completed
copies of IRS Form W 8BEN (or any successor or substitute form or forms)) or
(II) under Sections 1441 or 1442 of the Internal Revenue Code (in which case the
certificate shall be accompanied by two duly completed copies of IRS Form W 8ECI
(or any successor or substitute form or forms).
(ii) Each such Lender further agrees to deliver to Avado, on behalf of
itself and its subsidiaries, and the Administrative Agent from time to time, a
true and accurate certificate executed in duplicate by a duly authorized officer
of such Lender before or promptly upon the occurrence of any event requiring a
change in the most recent certificate previously delivered by Avado, on behalf
of itself and the other Borrowers, and the Administrative Agent pursuant to this
Section 3.03(e). Each certificate required to be delivered pursuant to this
Section 3.03(e)(ii) shall certify as to one of the following:
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(A) that such Lender can receive payments hereunder and under the Notes
without deduction or withholding of United States federal income tax;
(B) that such Lender cannot continue to receive payments hereunder and
under the Notes without deduction or withholding of United States federal income
tax as specified therein but does not require additional payments pursuant to
Section 3.03(a) because it is entitled to recover the full amount of any such
deduction or withholding from a source other than the Borrowers;
(C) that such Lender is no longer capable of receiving payments hereunder
and under the Notes without deduction or withholding of United States federal
income tax as specified therein by reason of a change in law (including the
Internal Revenue Code or applicable tax treaty) after the later of the date on
which a Lender became a Lender pursuant to Section 14.07 and that it is not
capable of recovering the full amount of the same from a source other than the
Borrowers; or
(D) that such Lender is no longer capable of receiving payments hereunder
without deduction or withholding of United States federal income tax as
specified therein other than by reason of a change in law (including the
Internal Revenue Code or applicable tax treaty) after the date on which a Lender
became a Lender pursuant to Section 14.07.
(f) If any Agent or any Lender receives a refund in respect of any amounts
paid by the Borrowers pursuant to this Section 3.03, which refund in the sole
discretion of such Person is allocable to such payment, it shall promptly notify
Avado, on behalf of itself and the other Borrowers, of such refund and shall
promptly pay the amount of such refund to the Borrowers, together with all
interest received by such Person on such amount.
Section 3.04. Increased Capital. If after the date hereof any Lender
determines that (i) the adoption or implementation of or any change in or in the
interpretation or administration of any law or regulation or any guideline or
request from any central bank or other Governmental Authority exercising
jurisdiction, power or control over any Lender (whether or not having the force
of law), compliance with which affects or would affect the amount of capital
required or expected to be maintained by such Lender or any corporation
controlling such Lender and (ii) the amount of such capital is increased by or
based upon the making or maintenance by any Lender of its Loans, any Lender's
participation in or obligation to participate in the Loans or other advances
made hereunder or the existence of any Lender's obligation to make the Loans,
then, in any such case, upon written demand by such Lender (with a copy of such
demand to the Administrative Agent), each Borrower agrees to pay to the
Administrative Agent for the account of such Lender within 10 Business Days of
written demand therefor, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender or such corporation
therefor. Such demand shall be accompanied by a statement certifying in
reasonable detail as to the amount of such compensation and include a brief
summary of the basis for such demand. Such statement shall be conclusive and
binding for all purposes, in the absence of manifest error.
Article IV - Interest and Fees
Section 4.01. Interest on the Loans and Other Obligations.
(a) Rate of Interest. All Loans and the outstanding principal balance of
all other Obligations shall bear interest on the unpaid principal amount thereof
from the date such Loans are made and such other Obligations are due and payable
until paid in full, except as otherwise provided in Section 4.01(c), at a rate
equal to the Applicable Interest Rate.
(b) Interest Payments.
(i) Interest accrued on each Loan shall be payable in cash in arrears in
Dollars (A) on the first Business Day of each calendar month for the preceding
calendar month, commencing on the first such day following the making of such
Loan and (B) if not theretofore paid in full, on the Maturity Date. Interest
accrued at the Default Rate will be payable on demand.
(ii) Interest accrued on the principal balance of all other Obligations
shall be payable in arrears in Dollars on demand.
(c) Default Interest. Notwithstanding the rate of interest specified in
Section 4.01(a), and to the extent permitted by applicable law, effective
immediately upon the occurrence of any Event of Default but only for as long
thereafter as such Event of Default shall be continuing, the principal balance
of all Loans and of all other Obligations shall bear interest at a rate which is
two and one-half percent (2.5%) per annum in excess of the Applicable Interest
Rate in effect from time to time.
(d) Computation of Interest. Interest on all Obligations shall be computed
on the basis of the actual number of days elapsed in the period during which
interest accrues and a year of 360 days. In computing interest on any Loan, the
date of the making of the Loan shall be included and the date of payment shall
be excluded; provided, however, if a Loan is repaid on the same day on which it
is made, one (1) day's interest shall be paid on the Loan.
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Section 4.02. Fees.
(a) Agents' Fee. The Borrowers jointly and severally agree to pay to the
Agents a monthly administrative and collateral agency fee in the amount $25,000
per month, which shall be payable in arrears to the Administrative Agent.
(b) Commitment Fee. The Borrowers jointly and severally agree to pay a
commitment fee equal to two percent (2.00%) of the Total Facility, which shall
be payable as follows: $150,000 on the date of the issuance of a commitment
letter executed by the Administrative Agent on behalf of the Lender; $525,000 on
the date of the entry of an Interim Order; and $525,000 on the earlier of the
date of (i) the entry of the Final Order and (ii) payment in full of the
Drawbridge Debt.
(c) Unused Commitment Fee. The Borrowers agree, jointly and severally, to
pay to the Administrative Agent, for the account of the Lenders in accordance
with their respective Pro Rata Shares, a fee (the "Unused Commitment Fee"),
accruing at the rate equal to one and one-quarter of one percent (1 1/4%) per
annum on the daily average amount by which the Total Facility exceeds the
Revolving Credit Obligations during the period commencing on the Closing Date
and ending on the Commitment Termination Date, such fee being payable monthly in
arrears on (1) the first Business Day of each calendar month for the preceding
calendar month and (2) if not theretofore paid in full, on the Maturity Date.
(d) Termination; Conversion. The Borrowers agree, jointly and severally, to
pay to the Administrative Agent, for the account of the Lenders in accordance
with their respective Pro Rata Shares, additional compensation, equal to two
percent (2.0%) of the Total Facility on the Commitment Termination Date
("Termination Amount"). The Borrowers further agree, jointly and severally, to
pay to the Administrative Agent, for the account of the Lenders in accordance
with their respective Pro Rata Shares, a fee (the "Conversion Commitment Fee"),
equal to three percent (3.0%) of the Total Facility under this Agreement less
the amount of the Termination Amount actually paid. The Conversion Commitment
Fee shall be payable on or prior to the effective date of any exit facility
entered into pursuant to Section 2.05.
(e) Calculation and Payment of Fees. All of the above fees that are based
on a per annum rate shall be calculated on the basis of the actual number of
days elapsed in a 360-day year. All such fees shall be payable in addition to,
and not in lieu of, interest, expense reimbursements, indemnification and other
Obligations. All fees payable hereunder shall be fully earned and nonrefundable
when paid. All fees specified or referred to herein due to the Administrative
Agent or any Lender, including those referred to in this Section 4.02, shall
bear interest, if not paid when due, at the interest rate for Loans in
accordance with Section 4.01(c), shall constitute Obligations and shall be
secured by the Collateral. The Borrower hereby authorizes the Administrative
Agent to, and the Administrative Agent may, charge the Loan Account with the
amount of the fees or charges due under this Section 4.02.
(f) Audit; Inspections. The Borrowers acknowledge that representatives of
the Lenders or Agents may visit any or all of the Loan Parties and/or conduct
audits, inspections, appraisals, valuations and/or field examinations of any or
all of the Loan Parties at any time and from time to time in a manner so as to
not unduly disrupt the business of the Loan Parties and all the costs and
expenses therefore shall be payable, jointly and severally by the Borrowers.
Article V - Conditions to Loans
Section 5.01. Conditions Precedent to the Initial Loans . The effectiveness
of this Agreement and the obligation of each Lender on the Closing Date to make
its initial Loan requested to be made by it on the Closing Date shall be subject
to the satisfaction of all of the following conditions precedent:
(a) Documents. The Administrative Agent (on behalf of itself and the
Lenders) shall have received on or before the Closing Date all of the following:
(i) This Agreement, the Notes and all other agreements, instruments,
opinions, certificates and other documents relating to the Loans, required to be
delivered on the Closing Date (including, without limitation, a pay-off letter
executed by Avado, the Former Administrative Agent, and the Former Collateral
Agent, which provides, inter alia, pay-off figures for the Drawbridge Debt and a
release of all Liens, other than those Liens referenced in such pay-off letter
which shall survive as referenced in such pay-off letter in favor of the lenders
and agents under the Drawbridge Credit Agreement upon payment in full of the
Drawbridge Debt) each duly executed where appropriate and in form and substance
satisfactory to the Lenders and in sufficient copies for each of the Lenders;
(ii) A copy of the initial Approved Budget; and
(iii) Such additional documentation as the Administrative Agent and the
Lenders may reasonably request.
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(b) Certain Information. The Administrative Agent shall have received
complete and accurate information from the Borrowers with respect to the state
of organization, name and the location of the principal place of business and
chief executive office for each Borrower and each Subsidiary.
(c) No Legal Impediments. No law, regulation, order, judgment or decree of
any Governmental Authority shall exist, and the Administrative Agent shall not
have received any notice that any action, suit, investigation, litigation or
proceeding is pending or threatened in any court or before any arbitrator or
Governmental Authority which (i) purports to enjoin, prohibit, restrain or
otherwise affect (A) the ability of a Borrower and its Subsidiaries to perform
their respective obligations hereunder and under each Loan Document, (B) the
making of the Loans on the Closing Date or (C) the consummation of the
transactions contemplated hereby or contemplated under the other Loan Documents
or (ii) would be reasonably expected to result in a Material Adverse Change.
(d) No Change in Condition. No Material Adverse Change shall have occurred.
(e) No Default. No Event of Default shall have occurred and be continuing
or would result from the making of the Loans requested to be made on the Closing
Date.
(f) Representations and Warranties. All of the representations and
warranties contained in Section 6.01 and in the other Loan Documents shall be
true and complete in all material respects on and as of the Closing Date, both
before and immediately after giving effect to the making of the Loans.
(g) Fees and Expenses Paid. There shall have been paid to the
Administrative Agent, for its account, the account of the Collateral Agent and
the respective accounts of the Lenders, all fees and expenses including the
reasonable legal fees of counsel to the Collateral Agent and of counsel to the
Administrative Agent and local counsel to the Administrative Agent) due and
payable on or before the Closing Date.
(h) Consents, Etc. The Borrowers shall have obtained all consents and
approvals of any Governmental Authority as may be necessary to allow the
Borrowers (A) to execute, deliver and perform, in all material respects, their
respective obligations hereunder, under the other Loan Documents to which each
of them is, or shall be a party and each other agreement or instrument to be
executed and delivered by each of them pursuant thereto or in connection
therewith, and (B) to commence the Chapter 11 Cases.
(i) Closing Date. The Closing Date shall have occurred on or before
February 10, 2004.
(j) Interim Order. The Bankruptcy Court shall have entered an Interim
Order, which order shall be in full force and effect shall not have been
reversed, vacated or stayed and shall not have been amended, supplemented or
otherwise modified without the prior written consent of the Administrative Agent
(i) authorizing and approving the Loan Documents and the transactions
contemplated thereby, including, without limitation, the granting of the
super-priority status, security interests and liens, and the payment of all fees
and other amounts referred to herein, and (ii) lifting the automatic stay to
permit the Borrowers that are debtors under the Bankruptcy Code to perform their
obligations and the Lenders to exercise their rights and remedies with respect
to the Loans provided that the Administrative Agent shall provide the Borrowers
with 5 Business Days prior written notice before exercising rights and remedies.
All motions and other documents to be filed with and submitted to the Bankruptcy
Court in connection with the Loans (including, without limitation, the Interim
Order) shall be in form and substance reasonably satisfactory to the
Administrative Agent.
(k) Cash Collateral. The Collateral Agent and the Lenders shall be
reasonably satisfied with the lockbox arrangements and cash collection system,
including the arrangements with respect to the Concentration Account and
Disbursement Account (and including an assignment to the Collateral Agent, in
form and substance reasonably acceptable to the Collateral Agent, executed by
the Former Collateral Agent, pursuant to which the Former Collateral Agent shall
have assigned its rights with respect to the depository accounts maintained at
the Concentration Account Bank and referenced in Exhibit A to such assignment).
(l) Drawbridge Debt. The Lenders shall have confirmed that the Drawbridge
Debt is not greater than $30,000,000.
(m) Evidence of Insurance. The Borrower shall have provided evidence of
insurance reasonably satisfactory to the Administrative Agent.
Section 5.02. Conditions Precedent to All Loans. The effectiveness of this
Agreement, and the obligation of each Lender to make any Loan requested to be
made by it on any Funding Date on or after the Closing Date is subject to the
satisfaction of each of the following conditions precedent as of each such date:
(a) Representations and Warranties. As of such date, (except where such
representation and warranty expressly relates to a specific date, in which case,
as of such specified date), both before and after giving effect to the Loans to
be made on such date, all of the representations and warranties contained in
Section 6.01 and in the other Loan Documents shall be true and complete in all
material respects.
25
(b) No Defaults. As of such date, no Event of Default or Default shall have
occurred and be continuing or would result from the making of the requested
Loan.
(c) No Change in Condition. No Material Adverse Change shall have occurred
since the date of the immediate preceding Borrowing.
(d) Final Order. After a period of 30 days from entry of the Interim Order,
the Bankruptcy Court shall have entered a Final Order which shall not have been
stayed or amended without the consent of the Administrative Agent.
Each request by the Borrowers, or any of them, for a Loan, each submission
by the Borrowers, or any of them, of a Notice of Borrowing and, each acceptance
by the Borrowers, or any of them, of the proceeds of each Loan made hereunder,
shall constitute a representation and warranty by the Borrowers as of the
Funding Date in respect of such Loan that all conditions set forth in this
Section 5.02 have been satisfied.
Article VI - Representations and Warranties
Section 6.01. Representations and Warranties. In order to induce the
Lenders to enter into this Agreement and to make the Loans, the Borrowers
hereby, jointly and severally, represent and warrant, in each case, as follows:
(a) Organization, Good Standing, Etc. Each Borrower and each of its
Subsidiaries (i) is a corporation, limited liability company or limited
partnership duly organized, validly existing and in good standing under the laws
of the state of its organization, (ii) has all requisite power and authority to
conduct its business as now conducted and as presently contemplated and, to make
the borrowings hereunder, and to execute and deliver each Loan Document to which
it is a party, and to consummate the transactions contemplated thereby, and
(iii) is duly qualified to do business and is in good standing in each
jurisdiction in which the character of the properties owned or leased by it or
in which the transaction of its business makes such qualification necessary,
except where the failure to so qualify or to be in good standing would not
reasonably be expected to have a Material Adverse Change.
(b) Authorization, Etc. The execution, delivery and performance by each
Borrow of each Loan Document to which it is or will be a party and the
transactions contemplated thereunder, (i) have been duly authorized by all
necessary action, (ii) do not and will not contravene its Governing Documents
(iii) do not and will not violate any Requirements of Law or any material
Contractual Obligation of such Loan Party binding on or otherwise affecting it
or any of its properties, (iv) do not and will not result in or require the
creation of any Lien (other than pursuant to any Loan Document) upon or with
respect to any of its properties, and (v) subject to the Effect of Bankruptcy,
do not and will not result in any suspension, revocation, impairment, forfeiture
or nonrenewal of any material permit, license, authorization or approval
applicable to its operations or any of its properties. Each Borrower has the
requisite power and authority to execute, deliver and perform each of the Loan
Documents to which it is a party.
(c) Governmental Approvals. No authorization or approval or other action
by, and no notice to or filing with, any Governmental Authority that has not
been obtained is required in connection with the due execution, delivery and
performance by each Borrower of each Loan Document to which it is a party.
(d) Enforceability of Loan Documents. Each of the Loan Documents to which
any Borrower is a party has been duly executed and delivered by such Borrower
and constitutes the legal, valid and binding obligation of such Borrower,
enforceable against such Borrower in accordance with its terms, except as may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws, or by general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
(e) Capitalization. On the Closing Date, the authorized Capital Stock of
the Borrowers and the issued and outstanding Capital Stock of the Borrowers are
as set forth on Schedule 6.01(E) and Schedule 6.01(F). All of the issued and
outstanding shares of Capital Stock of Borrowers have been validly issued and
are fully paid and nonassessable, and the holders thereof are not entitled to
any preemptive, first refusal or other similar rights. Schedule 6.01(E) sets
forth each plan pursuant to which shares of the Capital Stock of Borrowers are
issuable as of the Closing Date, copies of which plans have been delivered to
the Administrative Agent under this Agreement, in the form and on the terms in
effect on the Closing Date, and the number of shares of Capital Stock of
Borrowers issuable under each such plan. Except as set forth on Schedule 6.01(E)
and Schedule 6.01(F) with respect to any Subsidiary), there are no other plans
or arrangements in existence relating to the issuance of shares of Capital Stock
of any Borrower, and there are no outstanding debt or equity securities of any
Borrower and no outstanding obligations of any Borrower convertible into or
exchangeable for, or warrants, options or other rights for the purchase or
acquisition from any Borrower, or other obligations of any Borrower to issue,
directly or indirectly, any shares of Capital Stock of any such Person, except
for the Convertible Debentures.
26
(f) Subsidiaries. Schedule 6.01(F) is a complete and correct description of
the name, jurisdiction of incorporation and ownership of the outstanding Capital
Stock of each Subsidiary of Avado and the other Borrowers in existence on the
date hereof. All of the issued and outstanding shares of Capital Stock of such
Subsidiaries have been validly issued and are fully paid and nonassessable, and
the holders thereof are not entitled to any preemptive, first refusal or other
similar rights. Except as indicated on such Schedule, all such Capital Stock is
owned by one or more of the Borrowers or their Subsidiaries, free and clear of
all Liens, except for Permitted Liens.
(g) Litigation. Except as set forth in Schedule 6.01(G), there is no
pending or, to the knowledge of the Borrowers, threatened action, suit or
proceeding affecting the Borrowers or any of their Subsidiaries or any of their
respective properties or assets before any court or other Governmental Authority
or any arbitrator that (A) would reasonably be expected to have a Material
Adverse Change or (B) relates to this Agreement or any other Loan Document or
any transaction contemplated hereby or thereby.
(h) Financial Condition.
The Borrowers have heretofore furnished to the Administrative Agent an
Approved Budget for the Borrower and its Subsidiaries for calendar year 2004.
The Approved Budget has been prepared on a reasonable basis and in good faith by
the Borrowers, and has been based on assumptions believed by the Borrowers to be
reasonable at the time made and upon the best information then reasonably
available to the Borrowers, and none of the Borrowers is aware of any facts or
information that would lead it to believe that such projections, as so updated,
are incorrect or misleading in any material respect.
(i) Compliance with Law, Etc. Except for the Effect of Bankruptcy, none of
the Borrowers nor any of their Subsidiaries is in violation of the Governing
Documents, any material Requirements of Law, any judgment or order of any
Governmental Authority applicable to it or any of its property or assets.
(j) ERISA. None of the Borrowers, any of their Subsidiaries, or any of
their ERISA Affiliates is now maintaining or contributing to, or has ever
maintained or contributed to, or has ever been obligated to contribute to, any
Benefit Plan or Multiemployer Plan.
(k) Taxes, Etc. All Federal, state and material local tax returns and other
material reports required by applicable law to be filed by the Borrowers and
each of their Subsidiaries have been filed, or extensions have been obtained,
except (x) to the extent subject to a Permitted Protest or if payment is not
permitted or required to be made under the Bankruptcy Code, and (y) the
Permitted Deferred Taxes.
(l) Margin Stock. None of the Borrowers nor any of their Subsidiaries are
or will be engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulations T, U or
X), and no proceeds of any Loan will be used to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or carrying
any margin stock.
(m) Nature of Business. None of the Borrowers nor any of their Subsidiaries
are engaged in any business other than the ownership and operation of restaurant
chains and reasonable extensions thereof.
(n) Adverse Agreements, Etc. On and as of the Closing Date, none of the
Borrowers nor any of their Subsidiaries are parties to any agreement or
instrument, or subject to any charter, limited liability company agreement,
partnership agreement or other corporate, partnership or limited liability
company restriction or any judgment, order, regulation, ruling or other
requirement of a court or other Governmental Authority, which, with respect to
all of the foregoing items in this clause (n), has had, or is reasonably
expected to have, a Material Adverse Change.
(o) Permits, Etc. Each of the Borrowers and their Subsidiaries has, and is
in compliance with, all material permits, licenses, authorizations, approvals,
entitlements and accreditations required for such Person lawfully to own, lease,
manage or operate each business currently owned, leased, managed or operated by
such Person, except where the failure to have or to so comply would not
reasonably be expected to have a Material Adverse Change.
(p) Properties.
(i) Each of the Borrowers and their Subsidiaries has good and marketable
title to, or valid leasehold interests in, all property and assets material to
its business, free and clear of all Liens except Permitted Liens. The properties
are in good working order and condition, ordinary wear and tear excepted.
27
(ii) Schedule 6.01(P) sets forth a complete and accurate list as of the
Closing Date of the location, by state and street address, of all real property
owned or leased by any of the Borrowers and their Subsidiaries. As of the
Closing Date, each of the Borrowers and their Subsidiaries has valid leasehold
interests in the Leases described on Schedule 6.01(P) to which it is a party as
lessee. Schedule 6.01(P) sets forth with respect to each such Lease, the
commencement date, termination date, renewal options (if any) and annual base
rents. To the best of the Borrowers' knowledge, each such Lease is valid and
enforceable in accordance with its terms in all material respects and is in full
force and effect against the applicable landlord.
(q) Full Disclosure. Avado has disclosed to the Administrative Agent all
material agreements, instruments and corporate or other restrictions to which
Avado or any of its Subsidiaries is subject, and all other matters known to it,
that, individually or in the aggregate, would reasonably be expected to result
in a Material Adverse Change. None of the reports, financial statements,
certificates or other written information furnished by or on behalf of the
Borrowers to the Administrative Agent in connection with the negotiation of this
Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, taken as a
whole, in the light of the circumstances under which it was made, not materially
misleading; provided that, with respect to projected financial information,
Avado represents only that such information was prepared in good faith based
upon assumptions believed to be reasonable at the time.
(r) Operating Lease Obligations. On the Closing Date, none of the Borrowers
nor any of their Subsidiaries has any obligations as lessee for the payment of
rent for any real or personal property other than the Operating Lease
Obligations set forth on Schedule 6.01(R) and other than leases in the ordinary
course of business where annual rental payments are less than $50,000.
(s) Environmental Matters. Except as set forth on Schedule 6.01(S), (i) the
operations of each of the Borrowers and their Subsidiaries are in compliance
with applicable Environmental Laws, except where the failure to so comply would
not reasonably be expected to have a Material Adverse Change; (ii) there has
been no Release at any of the properties owned or operated by the Borrowers or
their Subsidiaries or a predecessor in interest, or at any disposal or treatment
facility which received Hazardous Materials generated by the Borrowers or its
Subsidiaries or any predecessor in interest which would reasonably be expected
to have a Material Adverse Change; (iii) to the best of the Borrowers'
knowledge, no Environmental Action has been asserted against any of the
Borrowers or their Subsidiaries or any predecessor in interest nor do any of the
Borrowers or any of their Subsidiaries have knowledge or notice of any
threatened or pending Environmental Action against any of the Borrowers or their
Subsidiaries or any predecessor in interest which would reasonably be expected
to have a Material Adverse Change; and (iv) to the best of the Borrowers'
knowledge, no Environmental Actions have been asserted against any facilities
that may have received Hazardous Materials generated by the Borrowers or their
Subsidiaries or any predecessor in interest which would reasonably be expected
to have a Material Adverse Change.
(t) Insurance. Each of the Borrowers and their Subsidiaries keeps its
property adequately insured and maintains (i) insurance to such extent and
against such risks, including fire, as is customary with companies in the same
or similar businesses, (ii) workmen's compensation insurance in the amount
required by applicable law, (iii) public liability insurance, which shall
include product liability insurance, in the amount customary with companies in
the same or similar business against claims for personal injury or death on
properties owned, occupied or controlled by it, and (iv) such other insurance as
may be required by law (including, without limitation, against larceny,
embezzlement or other criminal misappropriation). Schedule 6.01(T) sets forth a
list of all insurance maintained by the Borrowers and their Subsidiaries on the
Closing Date.
(u) INTENTIONALLY OMITTED.
(v) Location of Bank Accounts. Schedule 6.01(V) sets forth a complete and
accurate list as of the Closing Date of all deposit, checking and other bank
accounts, all securities and other accounts maintained with any broker dealer
and all other similar accounts maintained by the Borrowers, or any of its
Subsidiaries, together with a description thereof (i.e., the bank or broker
dealer at which such deposit or other account is maintained and the account
number and the purpose thereof).
28
(w) Intellectual Property. Except as set forth on Schedule 6.01(W), each of
the Borrowers and their Subsidiaries owns or licenses or otherwise has the right
to use all licenses, patents, patent applications, trademarks, trademark
applications, service marks, tradenames, copyrights, copyright applications,
franchises, and other intellectual property rights that are necessary for the
operations of its businesses as currently conducted, without, to the knowledge
of the Borrowers, infringement upon or conflict with the rights of any other
Person with respect thereto, except for such infringements and conflicts which,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Change. Set forth on Schedule 6.01(W) is a complete and
accurate list as of the Closing Date of all such material licenses, patents,
patent applications, registered trademarks, trademark applications, registered
service marks, tradenames, registered copyrights, copyright applications and
franchises of Borrowers and their Subsidiaries. Except as set forth in Schedule
6.01(W), to the knowledge of the Borrowers, no slogan or other advertising
device, product, process, method, substance, part or other material now employed
by any of the Borrowers or their Subsidiaries in the conduct of their business,
infringes upon or conflicts with any rights owned by any other Person, except
for such infringements and conflicts which would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Change, and no claim
or litigation regarding any of the foregoing is pending or threatened against
the Borrowers or their Subsidiaries, except for such claims or litigation which
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Change.
(x) Material Contracts. Set forth on Schedule 1.01(C) is a complete and
accurate list as of the Closing Date of all Material Contracts to which the
Borrowers or any of their Subsidiaries is a party, showing the parties and
subject matter thereof and amendments and modifications thereto. As of the
Closing Date and subject to the Effect of Bankruptcy, each such Material
Contract (i) unless terminated in accordance with the terms of this Agreement,
is in full force and effect and is binding upon and enforceable against each of
the Borrowers and their Subsidiaries that is a party thereto and, to the best of
the Borrowers' knowledge, all other parties thereto in accordance with its
terms, (ii) has not been otherwise amended or modified (except to the extent
permitted by this Agreement), and (iii) except for the Senior Notes and the
Senior Subordinated Notes, is not in default due to the action of the Borrowers
or their Subsidiaries or, to the best of the Borrowers' knowledge, any other
party thereto, except to the extent disclosed in writing to the Lenders and the
Agents.
(y) Holding Company and Investment Company Acts. Neither Avado nor any of
its Subsidiaries is (i) a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended, or (ii)
an "investment company" or an "affiliated person" or "promoter" of, or
"principal underwriter" of or for, an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended.
(z) Employee and Labor Matters. (i) There is (A) no unfair labor practice
complaint pending or, to the best of the Borrowers' knowledge, threatened
against the Borrowers or any of their Subsidiaries before any Governmental
Authority and no grievance or arbitration proceeding pending or, to the best of
the Borrowers' knowledge, threatened against the Borrowers or any of their
Subsidiaries which arises out of or under any collective bargaining agreement,
(B) no strike, labor dispute, slowdown, stoppage or similar action or grievance
pending or, to the best of the Borrowers' knowledge, threatened against the
Borrowers or any of their Subsidiaries and (C) to the best of the Borrowers'
knowledge, no union representation question existing with respect to the
employees of the Borrowers or any of their Subsidiaries and no union organizing
activity taking place with respect to any of the employees of any of them, that,
in the case of (A), (B) and (C) would reasonably be expected to have a Material
Adverse Change.
(aa) Customers and Suppliers. Except for the Effect of Bankruptcy, there
exists no actual or, to the best of the Borrowers' knowledge, threatened
termination, cancellation or limitation of, or modification to or change in, the
business relationship between (A) the Borrowers or any of their Subsidiaries, on
the one hand, and any customer or any group thereof, on the other hand, whose
agreements with any Borrower or any such Subsidiary are individually or in the
aggregate material to the business or operations of the Borrowers and their
Subsidiaries, taken as a whole, or (B) the Borrowers or any of its Subsidiaries,
on the one hand, and any material supplier of the Borrowers and their
Subsidiaries, taken as a whole, on the other hand (other than with respect to
any vendor relationships, the retraction of any trade terms).
(bb) INTENTIONALLY OMITTED.
(cc) Liquor License Subsidiaries. None of the Liquor License Subsidiaries
(i) have any material assets other than those assets necessary to sell liquor,
including liquor licenses, alcohol, and such bank accounts as are necessary to
maintain cash sufficient to purchase alcohol, (ii) have any liabilities of any
nature whatsoever (except short term liabilities in connection with purchases of
alcohol and in respect of the maintenance of and compliance with liquor licenses
(in an aggregate outstanding amount which does not exceed $250,000 at any one
time)), or (iii) engage in any activity or business of any kind other than with
respect to liquor licenses and the purchase of alcohol and its sale within
Restaurants.
29
(dd) Non-Wholly Owned Subsidiaries. The Non-Wholly Owned Subsidiaries do
not have contractual liabilities of any kind or nature that have not been paid
when due, in an aggregate outstanding amount at any one time in excess of
$600,000, other than Indebtedness in respect of Permitted Intercompany Advances.
(ee) Dormant Subsidiaries. None of the Dormant Subsidiaries (i) have any
assets, (ii) have any liabilities of any nature whatsoever other than tax
liabilities due and payable after the end of the 2003 Fiscal Year or liabilities
resulting from the resolution of outstanding lawsuits, or (iii) engage in any
activity or business of any kind.
(ff) Location of Collateral; Chief Place of Business; Chief Executive
Office FEIN; Name. There is no location at which the Borrowers or any of their
Subsidiaries has any Inventory (except for Inventory in transit) other than (i)
those locations listed on Schedule 6.01(FF), (ii) those locations resulting from
a Disposition that is permitted under this Agreement, (iii) those locations
permitted by the Security Agreements, and (iv) any other locations approved in
writing by the Administrative Agent and the Collateral Agent. Schedule 6.01(FF)
contains a true, correct and complete list, as of the Closing Date, of the legal
names and addresses of each warehouse at which Inventory of the Borrowers and
their Subsidiaries is stored. None of the receipts received by the Borrowers or
any of their Subsidiaries from any warehouse states that the goods covered
thereby are to be delivered to bearer or to the order of a named Person or to a
named Person and such named Person's assigns. Schedule 6.01(FF) sets forth a
complete and accurate list as of the date hereof of (A) each place of business
of the Borrowers and their Subsidiaries, (B) the chief executive office of each
of the Borrowers and their Subsidiaries, (C) the exact legal name of each Loan
Party, (D) the jurisdiction of organization of each Borrower, (E) the
organizational identification number of each Borrower (or indicates that such
Borrower has no organizational identification number) and (F) the federal
employer identification number of each Loan Party.
(gg) Security Interests. The Security Agreement and Interim Order (and the
Final Order, when applicable) creates in favor of the Collateral Agent, for the
benefit of the Agents and the Lenders, a legal, valid and enforceable security
interest in the Collateral secured thereby. Such security interests in and Liens
on the Collateral granted thereby are perfected, first priority security
interests, subject to Permitted Liens and the failure to perfect funds on
deposit in deposit accounts (other than the Concentration Accounts and the
Disbursement Accounts) in an aggregate amount not to exceed $150,000 at any
time, and no further recordings or filings are or will be required in connection
with the creation, perfection or enforcement of such security interests and
Liens.
(hh) Schedules. All of the information that is required to be scheduled to
this Agreement is set forth on the Schedules attached hereto, and is correct and
accurate, except (i) if this Agreement refers to the correctness and accuracy of
Schedules as of an earlier date and (ii) for differences resulting from
circumstances, conditions, actions or inactions otherwise permitted by the terms
of any Loan Document, including, without limitation, the Effect of Bankruptcy.
Article VII - Reporting Covenants
Each Borrower covenants and agrees that so long as any Commitments are
outstanding and thereafter until payment in full of all of the Obligations:
Section 7.01. Financial Statements. The Borrowers and each of its
Subsidiaries shall maintain a system of accounting established and administered
in accordance with sound business practices to permit preparation of
consolidated financial statements in conformity with GAAP, and each of the
financial statements described below shall be prepared from such system and
records. The Borrowers shall deliver or cause to be delivered to the Lenders:
(a) Monthly Reports. Within twenty (20) days after the end of each fiscal
month in each Fiscal Year, the Borrowers shall deliver to the Administrative
Agent (i) the monthly operating reports as required by the Office of the United
States Trustee, which shall include the consolidated balance sheets of the
Borrowers and their Subsidiaries as at the end of such fiscal month and the
related unaudited consolidated statements of income of the Borrowers and their
Subsidiaries for such fiscal month, as certified by an Authorized Officer of
Avado as fairly presenting, in all material respects, the consolidated financial
position of the Borrowers and their Subsidiaries as at the dates indicated and
the results of their operations for the fiscal months indicated, such
consolidated balance sheets and consolidated statements of income in accordance
with GAAP, subject to normal year end adjustments; and (ii) a variance report
reflecting the actual cash receipts and disbursements for such fiscal month and
the percentage variance of actual receipts and disbursements from those
reflected in the Approved Budget for such period in a form reasonably
satisfactory to the Administrative Agent, certified by an Authorized Officer of
Avado as fairly presenting, in all material respects, the cash flow for such
fiscal month.
30
(b) Weekly Cash Flow Reports. On Wednesday of each week a report of cash
flow of Avado and its Subsidiaries, containing the line items in the Approved
Budget and indicating any variance from the Approved Budget in the actual cash
flow for such week from that reflected in the Approved Budget and on a
cumulative basis and for the prior week from the Approved Budget, certified by
an Authorized Officer of Avado, as fairly presenting in all material respects,
the cash flow for such period.
(c) Officer's Certificate. Together with each delivery of any financial
statement pursuant to Section 7.01(a), (i) an Officer's Certificate
substantially in the form of Exhibit G attached hereto and made a part hereof,
stating that the Authorized Officer signatory thereto has reviewed the terms of
the Loan Documents, and has made, or caused to be made under his supervision, a
review in reasonable detail of the transactions and consolidated and
consolidating (where applicable) financial condition of the Borrowers during the
accounting period covered by such financial statements, that such review has not
disclosed the existence during or at the end of such accounting period, and that
such officer does not have knowledge of the existence as at the date of such
Officer's Certificate, of any condition or event which constitutes an Event of
Default or Default, or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action the
Borrowers have taken, are taking and proposes to take with respect thereto and
(ii) a certificate substantially in the form of Exhibit H attached hereto (the
"Compliance Certificate"), signed by the Borrowers' chief financial officer,
vice president of financial compliance and reporting, or controller, setting
forth calculations (with such specificity as the Lenders may reasonably request)
for the period then ended which demonstrate compliance, when applicable, with
the provisions of Article X.
(d) Budgets. Not later than one month prior to the expiration of the
initial Budget Period, the Borrowers shall deliver to the Administrative Agent
an updated budget for an additional six months in substantially the same format
as the initial Approved Budget, which budget upon acceptance by the
Administrative Agent (which approval will not be unreasonably withheld), shall
become the Approved Budget.
Section 7.02. Borrowing Base Certificate. The Borrowers shall provide the
Administrative Agent with a Borrowing Base Certificate, certified as being true
and correct by the Authorized Officer of Avado, with each Notice of Borrowing,
as provided in Section 2.01, but not less frequently than monthly with the
financial information to be provided pursuant to Section 7.01, and more
frequently if requested by the Administrative Agent. Each Borrowing Base
Certificate shall be prepared as set forth in Section 2.01(b).
Section 7.03. Other Financial Information.
(a) Such other information, reports, contracts, schedules, lists,
documents, agreements and instruments with respect to (i) the Collateral and
(ii) the Borrowers' business, condition (financial or otherwise), operations,
performance, properties or prospects as the Administrative Agent, the Collateral
Agent or any Lender may, from time to time, reasonably request. The Borrowers
hereby authorizes the Administrative Agent, the Collateral Agent, each Lender
and their respective representatives to communicate directly with the
accountants so long as an Authorized Officer of Avado participates in such
communication and authorizes the accountants to disclose to the Administrative
Agent, the Collateral Agent, each Lender and their respective representatives
any and all financial statements and other information of any kind, including
copies of any management letter or the substance of any oral information, that
such accountants may have with respect to the Collateral or the Borrowers'
condition (financial or otherwise), operations, properties, performance and
prospects. The Administrative Agent, the Collateral Agent, the Lenders and such
representatives shall treat any non-public information so obtained as
confidential.
(b) Copies of all documents and financial statements, reports and notices,
if any, sent or made available generally by the Borrowers to the holders of its
publicly-held Securities or to a trustee under any indenture or filed with the
Commission, and of all press releases made available generally by the Borrowers
to the public concerning material developments in the Borrowers' business.
(c) Copies of any management reports delivered to any Borrowers or to any
officer or employee thereof by the accountants in connection with the financial
statements delivered pursuant to Section 7.01.
(d) As soon as possible and in any event within five days after execution,
receipt or delivery thereof, copies of any material notices that any Loan Party
executes or receives in connection with any Material Contract.
(e) As soon as possible and in any event within five days after execution,
receipt or delivery thereof, copies of any material notices that any Loan Party
executes or receives in connection with the sale or other Disposition of the
Capital Stock of, or all or substantially all of the assets of, any Loan Party.
31
Section 7.04. Notice of Events of Default and Material Adverse Change.
Promptly upon the Borrowers obtaining knowledge (i) of any condition or event
which constitutes an Event of Default or Default, or becoming aware that any
Lender or the Administrative Agent has given any notice with respect to a
claimed Event of Default or Default under this Agreement, (ii) that any Person
has given any notice to the Borrowers or taken any other action with respect to
a claimed default or event or condition of the type referred to in Section
11.01(g) or (iii) of any condition or event which has or could be reasonably
likely to have a Material Adverse Change, the Borrowers shall deliver to the
Administrative Agent and the Lenders an Officer's Certificate specifying (A)the
nature and period of existence of any such claimed default, Event of Default,
Default, condition or event, (B) the notice given or action taken by such Person
in connection therewith and (C) what action the Borrowers have taken, and
proposes to take with respect thereto.
Section 7.05. Lawsuits. The Borrowers shall give the Administrative Agent
written notice promptly upon the Borrowers obtaining knowledge of the
institution of, or written threat of, (A) any action, suit, proceeding or
arbitration against or affecting any Borrowers or any asset of such Borrowers
not previously disclosed pursuant to Schedule 6.01(G) which action, suit,
proceeding or arbitration would be reasonably likely to result in a Material
Adverse Change, (B) any investigation or proceeding before or by any
Governmental Authority, the effect of which is reasonably likely to limit,
prohibit or restrict materially the manner in which any Borrowers currently
conducts its business or to declare any substance contained in such products
manufactured or distributed by it to be dangerous, or (C) any Forfeiture
Proceeding.
Section 7.06. Insurance. The Borrowers shall deliver to the Administrative
Agent and the Lenders (i) an updated Schedule 6.01(T), in form and substance
reasonably satisfactory to the Administrative Agent and the Lenders, outlining
any variance from the Schedule 6.01(T) delivered with Closing Date with respect
to any insurance policies and programs currently in effect with respect to the
respective property and assets and business of the Borrowers and their
Subsidiaries, insurance coverage maintained as of the date of such report by the
Borrowers and the loss payment provisions of such coverage and (ii) at the
request of the Administrative Agent, evidence that all premiums with respect to
such coverage have been paid when due.
Section 7.07. INTENTIONALLY OMITTED.
Section 7.08. INTENTIONALLY OMITTED
Section 7.09. INTENTIONALLY OMITTED
Section 7.10. INTENTIONALLY OMITTED
Section 7.11. Other Information. Promptly upon receiving a request therefor
from the Administrative Agent or the Required Lenders, the Borrowers shall
prepare and deliver to the Administrative Agent and the Lenders such other
information with respect to the Borrowers or the Collateral, including, without
limitation, schedules identifying and describing the Collateral and any
dispositions thereof, as from time to time may be reasonably requested by the
Administrative Agent or the Required Lenders.
Article VIII - Affirmative Covenants
The Borrowers, jointly and severally, covenant and agree that so long as
any Commitments are outstanding and thereafter until payment in full of all of
the Obligations:
Section 8.01. Existence, etc. Each Borrower shall, and shall cause each of
its Subsidiaries to, at all times maintain its existence and preserve and keep,
or cause to be preserved and kept, in full force and effect its rights and
franchises material to its businesses except where the loss or termination of
such rights and franchises does not have or is not likely to have a Material
Adverse Change.
Section 8.02. Powers; Conduct of Business. Each Borrower shall, and shall
cause each of its Subsidiaries to, qualify and remain qualified to do business
in each jurisdiction in which the nature of its business requires it to be so
qualified except for those jurisdictions where failure to so qualify does not
have or would not reasonably be expected to have a Material Adverse Change.
Section 8.03. Compliance with Laws, etc. Each Borrower shall, and shall
cause each of its Subsidiaries to, (a) comply with all Requirements of Law
applicable to such Person or the business, property, assets or operations of
such person, and (b) obtain as needed all Permits necessary for its operations
and maintain such Permits in good standing except in the case where
noncompliance with either clause (a) or (b) above does not have or is not
reasonably likely to have a Material Adverse Change.
32
Section 8.04. Payment of Taxes . The Borrowers shall, and shall cause each
of its Subsidiaries to, pay all taxes, assessments and other governmental
charges imposed upon it or on any of its properties or assets or in respect of
any of its franchises, business, income or property, in each case, arising after
the Petition Date before any penalty or interest accrues thereon, the failure to
make payment of which will have or is reasonably likely to cause a Material
Adverse Change.
Section 8.05. Inspection of Property; Books and Records; Discussions. The
Borrowers shall, and shall cause each of its Subsidiaries to, permit any
authorized representative(s) designated by either the Administrative Agent or
any Lender to visit and inspect any of the assets of such Person, to examine,
audit, check and make copies of their respective financial and accounting
records, books, journals, orders, receipts and any correspondence and other data
relating to their respective businesses or the transactions contemplated by the
Loan Documents (including in connection with environmental compliance, hazard or
liability), and to discuss their affairs, finances and accounts with their
officers and independent certified public accountants, all upon reasonable
notice and at such reasonable times during normal business hours, as often as
may be reasonably requested. Each such visitation and inspection by or on behalf
of the Administrative Agent shall be at the Borrowers' expense. The Borrowers
shall keep and maintain in all material respects proper books of record and
account in which entries in conformity with GAAP shall be made of all dealings
and transactions in relation to their respective businesses and activities,
including transactions and other dealings with respect to the Collateral. If
Default or an Event of Default has occurred and is continuing, the Borrowers
upon the Administrative Agent's request, shall turn over any such records to the
Administrative Agent or its representatives.
Section 8.06. Tax Identification Numbers. Each Borrower shall, and shall
cause each of its Subsidiaries to, provide the Administrative Agent in writing
the tax identification numbers of such Person promptly upon the availability
thereof.
Section 8.07. INTENTIONALLY OMITTED
Section 8.08. Condemnation. Immediately upon learning of the institution of
any proceeding for the condemnation or other taking of any of the owned or
leased Real Property of the Borrowers, or any of its Subsidiaries, which would
reasonably be expected to have a Material Adverse Change, the Borrowers shall
notify the Administrative Agent of the pendency of such proceeding, and permit
the Administrative Agent to participate in any such proceeding, and from time to
time will deliver to the Administrative Agent all instruments reasonably
requested by the Administrative Agent to permit such participation.
Section 8.09. Maintenance of Properties. Except with respect to Restaurant
closures that do not constitute Dispositions, rejection of leases or other
executory contracts, or with the written consent of the Required Lenders, the
Borrowers shall, and shall cause each of its Subsidiaries to, maintain and
preserve all of their properties which are necessary or useful in the proper
conduct of their business in good working order and condition, ordinary wear and
tear excepted, and comply, and cause each of its Subsidiaries to comply, in all
material respects with the provisions of all material leases to which each of
them is a party as lessee or under which each of them occupies property which
are necessary or useful in the proper conduct of their business, so as to
prevent any material loss or forfeiture thereof or thereunder.
Section 8.10. Maintenance of Insurance. Each Borrower shall maintain, and
cause each of its Subsidiaries to maintain (either in the name of such Borrower
or in such Subsidiary's own name), insurance with financially sound and
reputable insurance companies or associations (including, without limitation,
commercial general liability, property and business interruption insurance) with
respect to their properties (including all real properties leased or owned by
them) and business, in such amounts and covering such risks as is required by
any Governmental Authority having jurisdiction with respect thereto or as is
carried generally in accordance with sound business practice by companies in
similar businesses similarly situated. All property policies covering the
Collateral shall name Collateral Agent for the benefit of the Lenders as an
additional insured or loss payee, in case of loss. All certificates of insurance
are to be delivered to Collateral Agent and the policies shall contain a loss
payable and additional insured endorsements in favor of Collateral Agent for the
benefit of the Lenders (substantially in the form in existence on the Closing
Date), and shall provide for not less than 30 days' prior written notice to
Collateral Agent and other named insureds of the exercise of any right of
cancellation.
Section 8.11. Obtaining of Permits, Etc. The Borrowers shall obtain,
maintain and preserve, and cause each of their Subsidiaries to obtain, maintain
and preserve, all permits, licenses, authorizations, approvals, entitlements and
accreditations which are necessary or useful in the proper conduct of its
business and where the failure to so obtain, maintain and preserve would
reasonably be expected to have a Material Adverse Change.
33
Section 8.12. Environmental. The Borrowers shall (i) keep all property
either owned or operated by it or any of its Subsidiaries free of any
Environmental Liens; (ii) comply, and cause it Subsidiaries to comply, in all
material respects with Environmental Laws and provide to the Collateral Agent
documentation of such compliance which Collateral Agent reasonably requests;
(iii) immediately notify Collateral Agent of any Release of a Hazardous Material
in excess of any reportable quantity from or onto property owned or operated by
the Borrowers or any of its Subsidiaries and take any Remedial Actions required
to xxxxx said Release; and (iv) promptly provide the Collateral Agent with
written notice within eight (8) Business Days of the receipt of any of the
following: (A) notice that an Environmental Lien has been filed against any
property of any Borrowers or any of its Subsidiaries; (B) commencement of any
Environmental Action or notice that an Environmental Action will be filed
against the Borrowers or any of its Subsidiaries; and (C) notice of a violation,
citation or other administrative order which would reasonably be expected to
have a Material Adverse Change.
Section 8.13. Further Assurances. Each Borrower shall take such action and
execute, acknowledge and deliver, and cause each of its Subsidiaries to take
such action and execute, acknowledge and deliver, at its sole cost and expense,
such agreements, instruments or other documents as the Lenders may reasonably
require from time to time in order (i) to carry out more effectively the
purposes of this Agreement and the other Loan Documents, (ii) to subject to
valid and perfected first priority Liens (except for Permitted Liens and the
failure to perfect funds on deposit in deposit accounts of the Loan Parties
(other than the Concentration Accounts and the Disbursement Account) in an
aggregate amount not to exceed $150,000 at any one time) any of the Collateral
or any other property of the Borrowers and their Subsidiaries acquired after the
Closing Date (other than property owned by a Non-Wholly Owned Subsidiary), (iii)
to establish and maintain the validity and effectiveness of any of the Loan
Documents and the validity, perfection and priority of the Liens intended to be
created thereby, and (iv) to better assure, convey, grant, assign, transfer and
confirm unto the Collateral Agent for the ratable benefit of the Lenders the
rights now or hereafter intended to be granted to the Collateral Agent for the
ratable benefit of the Lenders under this Agreement or any other Loan Document.
Notwithstanding the foregoing, the Agents do not intend to file financing
statements, record mortgages or seek landlord consents unless the Agents make a
reasonable determination that the Interim Order and Final Order fail to
adequately perfect the security interests in the Collateral.
Section 8.14. Change in Collateral; Collateral Records. The Borrowers shall
(i) give the Administrative Agent and the Collateral Agent not less than thirty
(30) days' prior written notice of any change in the location of any Collateral,
that is inventory (other than inventory in transit) or equipment other than
locations set forth on Schedule 6.01(FF) and other than any change in location
resulting from a Disposition which is permitted under this Agreement, and any
change permitted under the Security Agreements, (ii) advise the Collateral Agent
promptly, in sufficient detail, of any change which would reasonably be expected
to have a Material Adverse Change relating to the value of the Collateral or the
Lien granted thereon and (iii) execute and deliver, and cause each of its
Subsidiaries to execute and deliver, to the Collateral Agent for the benefit of
the Lenders from time to time, solely for the Collateral Agent's convenience in
maintaining a record of Collateral, such written statements and schedules,
maintained by the Borrowers and their Subsidiaries in the ordinary course of
business, as the Collateral Agent may reasonably require, designating,
identifying or describing the Collateral.
Section 8.15. Landlord Waivers. The Borrowers shall obtain at the time a
Loan Party enters into a lease for real property not occupied on the Closing
Date a landlord's waiver from the landlord of such real property (which waiver
may be contained in such lease), in form and substance satisfactory to the
Collateral Agent.
Section 8.16. INTENTIONALLY OMITTED
Section 8.17. Fiscal Year. Each Borrower shall cause its Fiscal Year to end
on the Sunday closest to December 31 of each calendar year unless the Required
Lenders consent to a change in such Fiscal Year (and appropriate related changes
to this Agreement).
Section 8.18. Credit Card Agreements. Within sixty (60) days of the Closing
Date, the Borrower shall deliver to the Administrative Agent the Credit Card
Agreements; provided, however, if Bankruptcy Court approval is required such
period is extended to one hundred twenty days (120) so long as the Borrowers
apply for such approval within sixty (60) days from the Closing Date.
Section 8.19. Concentration Account Agreements. Within thirty (30) days of
the date of payment in full of the Drawbridge Debt in accordance with the terms
of the pay-off letter therefor delivered to the Administrative Agent pursuant to
Section 5.01(a)(i) (the "Drawbridge Termination Date"), the Borrowers shall
deliver to the Administrative Agent the Concentration Account Agreements, in
each case, duly executed by Avado and the Concentration Account Bank.
34
Article IX - Negative Covenants
The Borrowers, jointly and severally, covenant and agree that each Borrower
shall comply with the following covenants so long as any Commitments are
outstanding and thereafter until payment in full of all of the Obligations:
Section 9.01. Liens, Sales of Accounts Receivable. The Borrowers shall not,
and shall not permit any of its Subsidiaries to, create, incur, assume or suffer
to exist any Lien upon or with respect to any of its property, whether now owned
or hereafter acquired, or assign or otherwise transfer any Account Receivable or
other right to receive income, other than Permitted Liens.
Section 9.02. Indebtedness. The Borrowers shall not, and shall not permit
any of their Subsidiaries to, create, incur, assume, guarantee or suffer to
exist, or otherwise become or remain liable with respect to any Indebtedness,
other than Permitted Indebtedness.
Section 9.03. Fundamental Changes, Asset Sales, and Acquisitions. The
Borrowers shall not, and shall not permit any of their Subsidiaries to, wind-up,
liquidate or dissolve itself (or permit or suffer any thereof) or merge,
consolidate or amalgamate with any Person, convey, sell, lease or sublease,
transfer or otherwise dispose of, whether in one transaction or a series of
related transactions, all or any part of its business, property or assets,
whether now owned or hereafter acquired, or (agree to do any of the foregoing)
or purchase or otherwise acquire, whether in one transaction or a series of
related transactions, all or substantially all of the assets of any Person (or
any division thereof) (or agree to do any of the foregoing); provided, however,
that, with the approval of the Administrative Agent in the cases of clauses (a)
and (b):
(a) any Dormant Subsidiary or any Non-Wholly Owned Subsidiary may be
wound-up, liquidated or dissolved, so long as the proceeds of any such
liquidation or dissolution and any remaining assets of such Dormant Subsidiary
or Non-Wholly Owned Subsidiary are promptly transferred to another Borrower in
connection therewith;
(b) any Wholly Owned Subsidiary of the Borrowers may be merged into any
Borrower, other than a Liquor License Subsidiary or a Dormant Subsidiary,
consolidate with any Borrower, other than a Liquor License Subsidiary or a
Dormant Subsidiary, or sell assets to any Borrower, other than a Liquor License
Subsidiary or a Dormant Subsidiary.
(c) the Borrowers and their Subsidiaries (other than the Liquor License
Subsidiaries and the Dormant Subsidiaries) may (A) sell Inventory in the
ordinary course of business, (B) dispose of obsolete or worn-out equipment in
the ordinary course of business, and (C) reject leases and other executory
contracts.
Section 9.04. Change in Nature of Business. The Borrowers shall not, and
shall not permit any of their Subsidiaries to, make any material change in the
nature of its business as such business is carried on at the date hereof except
as permitted under Section 9.03.
Section 9.05. Investments. The Borrowers shall not, and shall not permit
any of their Subsidiaries to, hold, own or invest in or commit or agree to hold
or invest in, or purchase or otherwise acquire or commit or agree to purchase or
otherwise acquire any Investment, except for: (i) Investments existing on the
date hereof, as set forth on Schedule 9.05, but not any increase in the amount
thereof as set forth in such Schedule or any other modification of the terms
thereof, and (ii) Permitted Investments; provided, however, that Borrowers and
their Subsidiaries shall not have Permitted Investments in Securities Accounts
or Deposit Accounts in excess of $200,000 in the aggregate for such accounts
outstanding at any time unless a Control Agreement has been executed and
delivered with respect to such Securities Accounts or Deposit Accounts.
Section 9.06. Lease Obligations. The Borrowers shall not, and shall not
permit any of their Subsidiaries to, suffer to exist any obligations as lessee
for the payment of rent for any real or personal property under leases or
agreements to lease other than (i) Capitalized Lease Obligations to the extent
included in the definition of "Permitted Indebtedness", and (ii) Operating Lease
Obligations which would not cause the aggregate amount of all Operating Lease
Obligations owing by the Borrowers and their Subsidiaries to exceed $29,000,000
during any Fiscal Year. The Borrower shall not, and shall not permit any of
their Subsidiaries to, create or incur any obligation as lessee for the payment
of rent for any real or personal property under any lease or otherwise (other
than in connection with the assumption of executory leases in effect on the
Petition Date) without the written consent of the Administrative Agent (which
consent shall not be unreasonably withheld).
Section 9.07. INTENTIONALLY OMITTED
Section 9.08. Payments of Certain Fees. So long as no Event of Default has
occurred and is continuing, the Borrower may pay fees of the type included as
Carve-Out Expenses and establish Funded Reserves for such fees that have been
billed but not paid (including holdbacks imposed by the Court) from funds
borrowed under the Facility (which Funded Reserves shall be in addition to the
Carve-Out Expenses).
35
Section 9.09. Federal Reserve Regulations. The Borrowers shall not, and
shall not permit any Subsidiary to, use any Loan or the proceeds of any Loan
under this Agreement for any purpose that would cause such Loans to be margin
loans under the provisions of Regulation T, U or X of the Board.
Section 9.10. Transactions with Affiliates. The Borrowers shall not, and
shall not permit any Subsidiary to, enter into, renew, or extend any transaction
or series of related transactions (including, without limitation, the purchase,
sale, lease, transfer or exchange of property or assets of any kind or the
rendering of services of any kind) with any of its Affiliates, except (i)
incurrence and repayment of Permitted Intercompany Advances, (ii) royalty and
management fees paid to a Borrower, and (iii) transactions in the ordinary
course of business in a manner and to an extent consistent with past practice
and necessary or desirable for the prudent operation of its business, for fair
consideration and on terms no less favorable to Borrowers or such Subsidiary
than would be obtainable in a comparable arm's length transaction with a Person
that is not an Affiliate thereof.
Section 9.11. Limitations on Dividends and Other Payment Restrictions
Affecting Subsidiaries. The Borrowers shall not, and shall not permit their
Subsidiaries to, create or otherwise cause, incur, assume, suffer or permit to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any Subsidiaries of the Borrowers (i) to pay dividends or to
make any other distribution on any shares of Capital Stock of such Subsidiary
owned by the Borrowers or any of its Subsidiaries, (ii) to subordinate (other
than in connection with the Senior Subordinated Note Documents or the
Convertible Debentures) or to pay or prepay any Indebtedness owed to the
Borrowers or any of its Subsidiaries, (iii) to make loans or advances to the
Borrowers or any of its Subsidiaries or (iv) to transfer any of its property or
assets to the Borrowers or any of its Subsidiaries, or permit any of its
Subsidiaries to do any of the foregoing; provided, however, that nothing in any
of clauses (i) through (iv) of this Section 9.09 shall prohibit or restrict: (A)
this Agreement and the other Loan Documents; (B) any applicable law, rule or
regulation (including restrictions under the Bankruptcy Code, and the rules
promulgated thereunder or in any order entered in the Chapter 11 Cases), (C)
applicable currency control laws and applicable state corporate statutes
restricting the payment of dividends in certain circumstances); (D) in the case
of clause (iv) any agreement setting forth customary restrictions on the
subletting, assignment or transfer of any property or asset that is a lease,
license, conveyance or contract of similar property or assets; (E) in the case
of clause (iv) any holder of a Permitted Lien from restricting on customary
terms the transfer of any property or assets subject thereto; or (F) the
Drawbridge Credit Agreement and related documents.
Section 9.12. Limitation on Issuance of Capital Stock. The Borrowers shall
not, and shall not permit any Subsidiaries to, issue or sell or enter into any
agreement or arrangement for the issuance and sale of any shares of its Capital
Stock, any securities convertible into or exchangeable for its Capital Stock or
any warrants, options or other rights for the purchase or acquisition of any of
its Capital Stock, other than with the prior written consent of the
Administrative Agent.
Section 9.13. Modifications of Indebtedness, Organizational Documents and
Certain Other Agreements. The Borrowers shall not, and shall not permit any of
its Subsidiaries to:
(i) Except as permitted in Section 9.16, amend, modify or otherwise change
any of the provisions of any Indebtedness for borrowed money of the Borrower or
any of its Subsidiaries or of any instrument relating to any such Indebtedness.
(ii) Except for the Obligations and the payment of the Drawbridge Debt,
make any voluntary or optional payment, prepayment, redemption or other
acquisition for value of any Indebtedness of any Borrower or any of its
Subsidiaries other than Permitted Pre-Petition Payments with the prior written
consent of the Administrative Agent or the Required Lenders.
(iii) refund, refinance, replace or exchange any other Indebtedness for any
such Indebtedness, make any prepayment, redemption or repurchase of any
outstanding Indebtedness as a result of any asset sale, change of control,
issuance and sale of debt or equity securities or similar event, or give any
notice with respect to any of the foregoing, other than with the prior written
consent of the Administrative Agent or the Required Lenders.
(iv) directly or indirectly amend, modify or otherwise change its
certificate of incorporation or bylaws (or other similar organizational
documents) except such amendments, modifications or changes that either
individually or in the aggregate would not be materially adverse to the
interests of the Lenders, or any such amendments, modifications or changes in
connection with the plans set forth on Schedule 9.12; and
(v) directly or indirectly create or acquire any Subsidiary.
36
Section 9.14. Investment Company Act of 1940. The Borrowers shall not, and
shall not permit any Subsidiaries to, engage in any business, enter into any
transaction, use any securities or take any other action that would cause any of
them or any of their Subsidiaries to become subject to the registration
requirements of the Investment Company Act of 1940, as amended, by virtue of
being an "investment company" or a company "controlled" by an "investment
company" not entitled to an exemption within the meaning of such Act.
Section 9.15. Securities Accounts. The Borrowers shall not, and shall not
permit any of its Subsidiaries to, establish or maintain any Securities Account
unless Collateral Agent shall have received a Control Agreement in respect of
such Securities Account. The applicable Borrower and/or such Subsidiary shall
comply in all material respects with the provisions of each Control Agreement to
which it is a party.
Section 9.16. Environmental. The Borrowers shall not, and shall not permit
any Subsidiaries to, permit the use, handling, generation, storage, treatment,
release or disposal of Hazardous Materials at any property owned or leased by
any Borrower or any Subsidiaries except in compliance with Environmental Laws
and so long as such use, handling, generation, storage, treatment, release or
disposal of Hazardous Materials does not result in a Material Adverse Change.
Section 9.17. Certain Agreements. The Borrowers shall not, and shall not
permit any Subsidiaries to, agree to any material amendment or other material
change to or material waiver of any of its rights under the Material Contracts
(other than the rejection of, entry into or modification of, any Contractual
Obligation under any Chapter 11 Case).
Section 9.18. Liquor License Subsidiaries. The Borrowers shall not, and
shall not permit their Subsidiaries to, permit any Liquor License Subsidiary to
(i) have or acquire any material assets other than liquor licenses or such
assets as are necessary for the sale of alcohol in certain Restaurants, (ii)
incur liabilities of any nature whatsoever (except in connection with the
maintenance of and compliance with liquor licenses, and liabilities, as are
necessary for the sale of alcohol in certain Restaurants (in an aggregate
outstanding amount which does not exceed $250,000 at any one time)), or (iii)
engage in any other activity or business of any kind other than with respect to
the sale of alcohol in certain Restaurants.
Section 9.19. Non-Wholly Owned Subsidiaries. The Borrowers shall not, and
shall not permit their Subsidiaries to, permit any Non-Wholly Owned Subsidiary
to own any Capital Stock.
Section 9.20. Dormant Subsidiaries. The Borrowers shall not, and shall not
permit their Subsidiaries to, permit any Dormant Subsidiary to (i) have or
acquire any assets, (ii) incur any Indebtedness or any additional liabilities of
any nature whatsoever, or (iii) engage in any other activity or business of any
kind other than the payment of outstanding taxes, the resolution of outstanding
lawsuits and the dissolution thereof and the prosecution of their Chapter 11
Cases.
Article X - Financial Covenants
The Borrowers covenant and agree to the following, so long as any
Commitments are outstanding and until payment in full of all of the Obligations:
Section 10.01. Adjusted Total Operating Cash Flow. Adjusted Total Operating
Cash Flow, as of any date of measurement and calculated on a three-month rolling
basis from the first Business Day of the Borrowers fiscal month of February,
2004, shall be not less than eighty-five percent (85%) of the amount shown as
"Adjusted Total Operating Cash Flow" on the Approved Budget through the
three-month period ending on such date of measurement; provided that for the
measurement dates occurring one month and two months following the commencement
of the Chapter 11 Cases, actual Adjusted Total Operating Cash Flow shall be
calculated for one month and for two months, respectively.
Section 10.02. Total Non-Operating Disbursements. Total Non-Operating
Disbursements shall not, as of any date of measurement, exceed one hundred and
ten percent (110%) of the amount shown as "Total Disbursements" on the Approved
Budget less "total Operating Disbursements" on the Approved Budget, with respect
to such measurement date, calculated, on a cumulative basis for the period
commencing with the first Business Day of the Borrowers fiscal month of February
2004 through such date of measurement.
Section 10.03. Repairs/Capital Expenditures. Repairs and
Maintenance/Capital Expenditures shall not, as of any date of measurement,
exceed one hundred and ten percent (110%) of the amount shown as "Repairs and
Maintenance/Capital Expenditures" on the Approved Budget with respect to such
measurement date, calculated on a cumulative basis for the period commencing
with the commencement of the Chapter 11 Cases through such date of measurement.
Section 10.04. Certain Defined Terms for the Financial Covenants.
(a) For the purposes of this Agreement,
37
(i) "Adjusted Total Operating Cash Flow" means Total Receipts less Total
Operating Disbursement as shown on the Approved Budget.
(ii) "Total Non-Operating Disbursements" means all disbursements by the
Borrowers except those disbursements deducted in the calculation of Adjusted
Total Operating Cash Flow.
(b) Total Operating Disbursements and Total Non-Operating Disbursements
shall be calculated on a cash basis as paid, provided that any amounts that are
outstanding for more than sixty (60) days shall be deemed paid, and, provided
further, any Operating Disbursements that are deferred by agreement with the
applicable vendor or financed shall be deemed paid on the date when such
disbursement would have been paid in the ordinary course of business absent an
agreement for such deferral or financing.
Article XI - Events of Default, Rights and Remedies
Section 11.01. Events of Default. Each of the following occurrences shall
constitute an Event of Default under this Agreement.
(a) Failure to Make Payments When Due. The Borrowers shall fail to pay any
Obligation (whether principal, reimbursement obligations, interest, fees,
expenses, indemnities or other obligations) when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise).
(b) Breach of Representation or Warranty. Any representation or warranty
made or deemed made by or on behalf of any Borrower or by any officer of the
foregoing under or in connection with any Loan Document or under or in
connection with any report, certificate, or other document delivered to the
Administrative Agent or any Lender pursuant to any Loan Document shall have been
incorrect or misleading in any material respect when made or deemed made.
(c) Any Borrower shall fail to perform or comply with any covenant or
agreement contained in Sections 7.01(a) through (e), 7.02, 8.03, 8.06, 8.10,
8.11, or 8.14, and such failure continues for a period of 3 Business Days.
(d) Any Borrower shall fail to perform or comply with any covenant or
agreement contained in Sections 7.03, 7.05, 7.06, 7.08, 7.09, 7.11, or 8.08, and
such failure continues for a period of 5 Business Days.
(e) Breach of Certain Covenants. Any Borrower shall fail to perform or
comply with any covenant or agreement contained in Sections 7.04, 7.10 or 8.05,
Article IX or Article X under this Agreement or contained in any other Loan
Document.
(f) Other Defaults. Any Borrower shall fail to perform or comply with any
other covenant or agreement (other than those set forth in Sections 11.01(a) and
(e)) and such failure continues for 10 Business Days;
(g) Default as to Other Indebtedness. Any Borrower shall fail to make any
payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) with respect to any Indebtedness entered into
after the Petition Date if the aggregate amount of such Indebtedness is in
excess of $300,000 in the aggregate and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
relating to such Indebtedness; or any other breach, default or event of default
shall occur, or any other condition shall exist under any instrument, agreement
or indenture pertaining to any such Indebtedness, if the effect thereof (with or
without the giving of notice or lapse of time or both) is to cause an
acceleration, mandatory redemption or other required repurchase of such
Indebtedness or, as to such Indebtedness, permit the holder or holders of such
Indebtedness to accelerate the maturity of any such Indebtedness or require a
redemption or other repurchase of such Indebtedness; or any Indebtedness if the
aggregate amount of such Indebtedness is $300,000 shall be declared be due and
payable (by acceleration or otherwise) or required to be prepaid, redeemed or
otherwise repurchased by any Borrower (other than by a regularly scheduled
required prepayment) prior to the stated maturity thereof; or the holder or
holders of any Lien, securing obligations of $300,000 or more, shall commence
foreclosure of such Lien upon property of any Borrower.
(h) INTENTIONALLY OMITTED.
(i) INTENTIONALLY OMITTED.
(j) Invalidity of Documents. Any provision of any Loan Document shall at
any time for any reason (other than pursuant to the express terms thereof) cease
to be valid and binding on or enforceable against a Borrower intended to be a
party thereto; or the validity or enforceability thereof shall be contested by
any party thereto; or a proceeding shall be commenced by any Borrower, seeking
to establish the invalidity or unenforceability thereof; or a Borrower shall
deny in writing that it has any liability or obligation purported to be created
under any Loan Document.
38
(k) Loan Documents. At any time, for any reason, (i) any Loan Document, the
Interim Order and the Final Order (when applicable) shall for any reason (other
than pursuant to the express terms hereof or thereof) fail or cease to create a
valid and perfected Lien or the Liens intended to be created thereby are, or any
Borrower seeks to render such Liens, invalid or unperfected except for the
failure to perfect funds on deposit in deposit accounts of the Borrowers in an
aggregate amount not to exceed $150,000 at any one time, or (ii) Liens in favor
of the Collateral Agent contemplated by the Loan Documents shall be invalidated
or otherwise cease to be in full force and effect, or such Liens shall not have
the priority contemplated hereby or by the other Loan Documents , the Interim
Order and the Final Order (subject to Permitted Liens).
(l) Judgments. One or more judgments or judicial or administrative orders
for the payment of money exceeding $300,000 in the aggregate shall be rendered
against a Borrower after the Petition Date which is not stayed under the
Bankruptcy Code (other than an order of the Bankruptcy Court) and remain
unsatisfied and either (i) enforcement proceedings shall have been commenced by
any creditor upon any such judgment or judicial or administrative order, or (ii)
there shall be a period of 20 consecutive Business Days after entry thereof
during which a stay of enforcement of any such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; provided, however, that any
such judgment or order shall not give rise to an Event of Default under this
Section 11.01(l) if and to the extent that (A) the amount of such judgment or
order is covered by a valid and binding policy of insurance between the
defendant and the insurer covering full payment thereof and (B) such insurer has
been notified, and has not disputed the claim made for payment, of the amount of
such judgment or order.
(m) Change of Control. A Change of Control shall have occurred.
(n) Material Adverse Change. A Material Adverse Change shall have occurred
and be continuing.
(o) Lease Guaranties. The Borrowers or any of its Subsidiaries shall have
made any payment or payments of any kind or nature on account of one or more
Lease Guaranties which, in the aggregate, exceed $250,000.
(p) Payments in Respect of Convertible Debentures or TECONS. The Borrowers
or any of its Subsidiaries shall have made any payments in respect of the
Convertible Debentures or the TECONS.
(q) Post Bankruptcy Filing Events. Failure of the Bankruptcy Court to enter
a Final Order within 30 days of the Closing Date; dismissal of any material
portion of the Chapter 11 Cases with respect to any of the Borrowers or
conversion of any of such Chapter 11 Cases to a Chapter 7 case; appointment of a
Chapter 11 trustee or examiner or other person with expanded powers; granting of
relief from the automatic stay to permit foreclosure on material assets of the
Borrowers; reversal, vacation or stay of the effectiveness of either the Interim
Order or the Final Order; and cessation of liens or super-priority claims
granted with respect to the Loans to be valid, perfected and enforceable in all
respects.
then, and in any such event and during the continuance thereof, the
Administrative Agent may, and at the written direction of the Required Lenders
shall, (A) by notice to Avado (which notice shall be effective notice to all the
Borrowers), (i) terminate or reduce the Commitments, whereupon the Commitments
shall immediately be terminated or reduced, and (ii) declare all or a portion of
Loans then outstanding to be due and payable, whereupon all or such portion of
the aggregate principal of such Loans all accrued and unpaid interest thereon,
all fees and all other amounts payable under this Agreement and all other
Obligations shall become immediately due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrowers and (B) following at least five (5) Business Days
written notice to Avado, exercise any and all of its other rights and remedies
hereunder, under the other Loan Documents, under applicable law and otherwise.
Article XII - Management, Collection and Status of Accounts Receivable and
Other Collateral
Section 12.01. Collection of Accounts Receivable; Management of Collateral.
39
(a) Avado has established and at all times shall maintain concentration
accounts (the "Concentration Accounts") at the Concentration Account Bank and
identified as the "Collateral Agent Accounts" in the Concentration Account
Agreements (as defined below), and shall promptly deposit, and shall cause each
of their Subsidiaries promptly to deposit, all Collections received by the
Borrowers or any of their Subsidiaries from any source, and in any event no
later than the second Business Day after the date of receipt thereof, (excluding
cash retained at locations in accordance with customary practice), into the
Concentration Accounts. From and after the Drawbridge Termination Date, the
Borrowers, the Administrative Agent and the Concentration Account Bank shall
have entered into concentration account agreements, including a depository
account agreement and a account control agreement, in form and substance
reasonably satisfactory to the Administrative Agent (the "Concentration Account
Agreements"). Neither the Concentration Account Agreements nor the arrangements
contemplated thereby shall be modified by the Borrowers or any of their
Subsidiaries without the prior written consent of the Administrative Agent. Upon
the terms and subject to the conditions set forth in the Concentration Account
Agreements, all amounts received in the Concentration Accounts shall be
deposited each Business Day into the Administrative Agent Account. Until the
Administrative Agent has advised the Borrowers to the contrary upon the
occurrence and during the continuance of an Event of Default, the Borrowers and
their Subsidiaries may and will enforce, collect and receive all amounts owing
on the Account Receivables for the benefit of, and on behalf of, the Collateral
Agent and the Lenders. All Collections (including checks, drafts, notes, money
orders, acceptances, cash and other evidences of Indebtedness) received directly
by the Borrowers or any of their Subsidiaries from any Account Debtor or any
other source (exclusive of the Lenders), whether as proceeds from Accounts
Receivable, or as proceeds of any other Collateral, or otherwise, shall be
received and held by the applicable Loan Party in trust for the Lenders and
deposited by such Loan Party in original form and no later than the next
Business Day after receipt thereof into the Concentration Accounts. The
Borrowers shall not, nor shall it permit any of their Subsidiaries to, commingle
such Collections with the proceeds of any Loan. All Collections of each
Subsidiary of the Borrowers deposited into the Concentration Accounts by such
Subsidiary shall be deemed first to be a repayment of all outstanding
Intercompany Advances made by any Loan Party to such Subsidiary, until paid in
full, with all such remaining Collections being deemed to be a distribution by
such Subsidiary to Borrowers through each Person who (directly or indirectly
through one or more intermediaries) owns the Capital Stock of such Subsidiary,
other than any limited partner of a Non-Wholly Owned Subsidiary.
(b) The Administrative Agent shall charge the Loan Account on the last day
of each month for one (1) Business Day of "clearance" or "float" at the rate
applicable to Loans set forth in Section 4.01(a) on all Collections that are
received by the Administrative Agent (regardless of whether forwarded by a
Concentration Account Bank to the Administrative Agent, whether provisionally
applied to reduce the Obligations under the Loan Documents, or otherwise). This
across-the-board one (1) Business Day clearance or float charge on all
Collections is acknowledged by the parties to constitute an integral aspect of
the pricing of the Lenders' financing of the Borrowers, and shall apply
irrespective of the characterization of whether receipts are owned by the
Borrowers or the Lenders, and whether or not there are any outstanding Loans,
the effect of such clearance or float charge being the equivalent of charging
one (1) Business Day of interest on such Collections. All funds received in the
Concentration Account in excess of $250,000 (calculated as of 2:00 p.m. New York
City time) and after the payment (or accrual therefor of disbursements made that
day) shall be sent at the end of each Business Day by wire transfer or Automated
Clearing House Inc. payment to the Administrative Agent to be credited to the
Loan Account for application to reduce the then principal balance of the Loans,
conditional upon final payment to the Administrative Agent. No checks, drafts or
other instrument received by the Administrative Agent shall constitute final
payment to the Administrative Agent unless and until such instruments have
actually been collected.
(c) During the continuance of an Event of Default, the Collateral Agent may
send a notice of assignment and/or notice of the Collateral Agent's security
interest, held for the benefit of it and the Lenders, to any and all Account
Debtors, and during such time period, the Collateral Agent shall have the sole
right to collect the Accounts Receivable and/or take possession of the Accounts
Receivable and the books and records relating thereto. Except, in the absence of
a continuing Event of Default, if the aggregate amount of Accounts Receivable
other than credit card receivables is more than $250,000, the Borrowers shall
not, and shall not permit its Subsidiaries to, without prior written consent of
the Administrative Agent, grant any extension of time of payment of any Account
Receivable, compromise or settle any Account Receivable for less than the full
amount thereof, release, in whole or in part, any Person or property liable for
the payment thereof, or allow any credit or discount whatsoever thereon.
40
(d) Avado and each other Borrower hereby appoints the Administrative Agent
for the benefit of the Collateral Agent and the Lenders or their designee as
such Borrower's attorney-in-fact with power exercisable during the continuance
of any Event of Default: (i) to demand payment of the Accounts Receivable from
Account Debtors, to enforce payment of the Accounts Receivable by legal
proceedings or otherwise, and generally exercise all of such Borrower's rights
and remedies with respect to the collection of the Accounts Receivable, (ii) to
endorse such Borrower's name upon any checks or other evidences of payment
relating to the Accounts Receivable, (iii) to sign such Borrower's name on any
invoice or xxxx of lading relating to any of the Accounts Receivable, (iv) to
sign such Borrower's name on any drafts against Account Debtors with respect to
Accounts Receivable, (v) to prepare, file, and sign such Borrower's name to a
proof of claim or similar document against any Account Debtor in connection with
a bankruptcy proceeding commenced by or with respect to such Account Debtor,
(vi) to use such Borrower's stationery and to sign such Borrower's name on any
assignments of Accounts Receivable, verifications of Accounts Receivable and
notices to Account Debtors with respect to Accounts Receivables, and (vii) to
send verifications of Accounts Receivable. All acts of said attorney or designee
are hereby ratified and approved, and said attorney or designate shall not be
liable for any acts of omission or commission, or for any error of judgment or
mistake of fact or law (other than acts, errors, or mistakes, constituting gross
negligence or willful misconduct as determined by a final order of a court of
competent jurisdiction); this power being coupled with an interest is
irrevocable until all of the Loans and other Obligations under the Loan
Documents are paid in full and all of the Loan Documents are terminated.
(e) Nothing contained herein shall be construed to constitute the
Collateral Agent, the Administrative Agent or any Lender as agent of the
Borrowers or any of their Subsidiaries in connection with its actions under this
Article XII for any purpose whatsoever, and the Collateral Agent, the
Administrative Agent and the Lenders shall not be responsible or liable for any
shortage, discrepancy, damage, loss or destruction of any part of the Accounts
Receivable wherever the same may be located and regardless of the cause thereof
(other than from acts or omissions of the Collateral Agent, the Administrative
Agent or the Lenders constituting gross negligence or willful misconduct as
determined in a final order by a court of competent jurisdiction). The
Collateral Agent, the Administrative Agent and the Lenders shall not, under any
circumstance or in any event whatsoever, have any liability for any error or
omission or delay of any kind occurring in the settlement, collection or payment
of any of the Accounts Receivable or any instrument received in payment thereof
or for any damage resulting therefrom (other than acts or omissions of the
Collateral Agent, the Administrative Agent or the Lenders constituting gross
negligence or willful misconduct). The Collateral Agent, the Administrative
Agent and the Lenders, by anything in this Article XII or in any assignment or
otherwise, do not assume any of the obligations under any contract or agreement
assigned to the Collateral Agent and shall not be responsible in any way for the
performance by the Borrowers or any of its Subsidiaries of any of the terms and
conditions thereof.
(f) If any Account Receivable includes a charge for any tax payable to any
Governmental Authority, the Administrative Agent is hereby authorized (but in no
event obligated) in its discretion to pay the amount thereof to the proper
taxing authority for the Borrowers' account and to charge the Borrowers
therefor. The Borrowers shall notify the Administrative Agent if any Account
Receivable includes any taxes due to any such Governmental Authority and, in the
absence of such notice or actual knowledge of such tax, the Administrative Agent
for the benefit of the Collateral Agent and the Lenders shall not, to the
fullest extent permitted by law, be liable for any taxes that may be due by
reason of the sale and delivery creating such Account Receivable.
Section 12.02. INTENTIONALLY OMITTED
41
Section 12.03. Status of Accounts Receivable and Other Collateral. With
respect to Accounts Receivable of the Borrowers, other than (solely to the
extent that the Credit Card Agreements are in full force and effect and are
being complied with by all parties thereto in all material respects other than
the Administrative Agent) credit card receivables, and so long as the aggregate
amount of such Accounts Receivable (other than credit card receivables) exceeds
$200,000 in the aggregate, the Borrowers, jointly and severally, covenant,
represent and warrant as follows: (a) Borrowers shall be the sole owner, free
and clear of all Liens except in favor of the Collateral Agent for the benefit
of the Lenders or as otherwise permitted hereunder, and fully authorized to
sell, transfer, pledge and/or grant a security interest in each such Account
Receivable [subject to any Permitted Lien securing the Drawbridge Debt]; (b)
substantially all of such Accounts Receivable shall be good and valid Accounts
Receivable representing undisputed bona fide indebtedness incurred or an amount
indisputably owed by the Account Debtor therein named, for a fixed sum as set
forth in the invoice relating thereto with respect to any absolute sale and
delivery upon the specified terms of goods sold or services rendered by the
Borrowers; (c) substantially all of such Accounts Receivable shall not be
subject to any defense, offset, counterclaim, discount or allowance except as
may be stated in the invoice relating thereto, discounts and allowances as may
be customary in the Borrowers' business and as otherwise disclosed to the
Administrative Agent; (d) none of the transactions underlying or giving rise to
substantially all of such Accounts Receivable shall violate any applicable state
or federal laws or regulations, and all documents relating thereto shall be
legally sufficient under such laws or regulations and shall be legally
enforceable in accordance with their terms; (e) no agreement under which any
deduction or offset of any kind, other than normal trade discounts, may be
granted or shall have been made by the Borrowers at or before the time such
Accounts Receivable are created; (f) all agreements, instruments and other
documents relating to such Account Receivable shall be true and correct and in
all material respects what they purport to be; (g) all signatures and
endorsements that appear on all material agreements, instruments and other
documents of the Borrowers and their Subsidiaries relating to such Accounts
Receivable shall be genuine and all signatories and endorsers shall have full
capacity to contract; (h) the Borrowers shall, and shall cause their
Subsidiaries to, maintain books and records pertaining to such Accounts
Receivable in such detail, form and scope as is in accordance with its past
practices; (i) the Borrowers shall immediately notify the Administrative Agent
if the material portion of any Accounts Receivable arise out of contracts with
the United States or any department, agency, or instrumentality thereof and will
execute any instruments and take any steps required by the Administrative Agent
or the Collateral Agent in order that all monies due or to become due under any
such contract shall be assigned to the Collateral Agent for the benefit of the
Lenders and notice thereof given to the United States Government under the
Federal Assignment of Claims Act; (j) the Borrowers will, immediately upon
learning thereof, report to the Administrative Agent any material loss or
destruction of, or substantial damage to, any material portion of such Accounts
Receivable, and any other matters affecting the value, enforceability or
collectibility of any material portion of such Accounts Receivable; (k) if any
amount payable under or in connection with any material portion of such Accounts
Receivable is evidenced by a promissory note or other instrument, such
promissory note or instrument shall be immediately pledged, endorsed, assigned
and delivered to the Collateral Agent for the benefit of the Lenders as
additional Collateral.
Section 12.04. Collateral Custodian. During the continuance of (i) a
Payment Event of Default or (ii) an Event of Default created by a violation of
Section 9.07 or Article X, the Collateral Agent or the Administrative Agent may
at any time and from time to time employ and maintain on the Borrowers' and any
of its Subsidiaries' premises one or more custodians selected by the Collateral
Agent or the Administrative Agent who shall have reasonable access to the books
and records of the Borrowers and their Subsidiaries and shall have full
authority to perform all acts reasonably required to (a) ensure that all
Collections are sent to the Concentration Account Bank in conformance with the
Concentration Account Agreements and the Credit Card Agreements, or (b) take
such actions as are authorized pursuant to Section 14.04(c). The Borrowers
hereby agrees to, and to cause its Subsidiaries to, cooperate with any such
custodian and to do whatever Collateral Agent may reasonably request in
connection with the foregoing. All reasonable costs and expenses incurred by the
Collateral Agent, the Administrative Agent and the Lenders by reason of the
employment of the custodian shall be the responsibility of the Borrowers and
charged to the Loan Account. The Administrative Agent, the Collateral Agent, the
Lenders and such custodians shall be responsible for any loss, liability, claim
or expense to the extent resulting from the gross negligence or willful
misconduct of any such custodian.
Article XIII - THE AGENTS
Section 13.01. Appointment Powers and Immunities; Delegation of Duties,
Liability of Agents.
42
(a) The Lender hereby designates and appoints Administrative Agent as its
administrative agent under this Agreement and the other Loan Documents and
Collateral Agent as its collateral agent under this Agreement and the other Loan
Documents. The Lender hereby irrevocably authorizes each such Agent to take such
action on the Lender's behalf under the provisions of this Agreement and each
other Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto. Each
such Agent agrees to act as such on the express conditions contained in this
Article XIII. The provisions of this Article XIII are solely for the benefit of
the Administrative Agent, Collateral Agent, and the Lenders. Borrowers shall not
have any rights as a third party beneficiary of any of the provisions contained
herein; provided, however, that certain of the provisions of Section 13.13
hereof also shall be for the benefit of Borrowers. Any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document
notwithstanding, each such Agent shall not have any duties or responsibilities,
except those expressly set forth herein, nor shall each such Agent have or be
deemed to have any fiduciary relationship with any of the Lenders and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document or otherwise exist
against each such Agent; it being expressly understood and agreed that the use
of the word "Agent" is for convenience only and that each such Agent is merely
the representative of the Lenders, and has only the contractual duties set forth
in this Agreement and the other Loan Documents. Except as expressly otherwise
provided in this Agreement, each such Agent shall have and may use its sole
discretion with respect to exercising or refraining from exercising any
discretionary rights or taking or refraining from taking any actions which such
Agent is expressly entitled to take or assert under or pursuant to this
Agreement and the other Loan Documents. No Lender shall have any right of action
whatsoever against each such Agent as a result of such Agent acting or
refraining from acting hereunder pursuant to such discretion and any action
taken or failure to act pursuant to such discretion shall be binding on the
Lenders. Without limiting the generality of the foregoing, or of any other
provision of the Loan Documents that provides rights or powers to Administrative
Agent or Collateral Agent, each of the Lenders agree that, as long as this
Agreement remains in effect: (i) (A) Administrative Agent shall have the right
to maintain, in accordance with its customary business practices, ledgers and
records reflecting the status of the Obligations, the Loans, the Collections,
and related matters, and (B) Collateral Agent shall have the right to maintain,
in accordance with its customary business practices, ledgers and records
reflecting the status of the Collateral and related matters; (ii) Collateral
Agent shall have the right to execute or file any and all financing or similar
statements or notices, amendments, renewals, supplements, documents,
instruments, proofs of claim, notices and other written agreements with respect
to the Loan Documents; (iii) Administrative Agent shall have the right to make
the Loans, for itself or on behalf of the applicable Lenders as provided in the
Loan Documents; (iv) Administrative Agent shall have the right to exclusively
receive, apply, and distribute the Collections as provided in the Loan
Documents; (v) Administrative Agent shall have the right to open and maintain
such bank accounts and lock boxes as Administrative Agent deems necessary and
appropriate in accordance with the Loan Documents for the foregoing purposes
with respect to the Collections and, on behalf of Collateral Agent, the
Collateral; (vi) (A) Administrative Agent shall have the right to perform,
exercise, and enforce any and all other rights and remedies of the Lenders with
respect to Borrowers, the Obligations, the Collections, or otherwise related to
any of same as provided in the Loan Documents, and (B) Collateral Agent shall
have the right to perform, exercise, and enforce any and all other rights and
remedies of the Lenders with respect to Borrowers, the Obligations, the
Collateral, or otherwise related to any of same as provided in the Loan
Documents; and (vii) Administrative Agent and Collateral Agent each shall have
the right to incur and pay such fees, charges, and expenses under the Loan
Documents as such Agent reasonably may deem necessary or appropriate for the
performance and fulfillment of its functions and powers pursuant to the Loan
Documents. Administrative Agent may deem and treat the payee of any Obligation
as the holder thereof for all purposes of the Loan Documents unless and until a
notice of the assignment or transfer of such Obligation shall have been filed
with Administrative Agent. Each Lender further consents to (y) the execution,
delivery, and performance by Administrative Agent or Collateral Agent of each
Loan Document entered into by such Agent on behalf of the Lenders as
contemplated by this Agreement, and (z) the terms of such Loan Documents.
(b) Except as otherwise provided in this section, each of Administrative
Agent and Collateral Agent may execute any of its duties under this Agreement or
any other Loan Document by or through agents, employees or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to such
duties. Each of Administrative Agent and Collateral Agent shall not be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects as long as such selection was made in compliance with this
section and without gross negligence or willful misconduct.
43
(c) None of the Agent-Related Persons shall (i) be liable for any action
taken or omitted to be taken by any of them under or in connection with this
Agreement or any other Loan Document or the transactions contemplated hereby
(except for its own gross negligence or willful misconduct), or (ii) be
responsible in any manner to any Lender for any recital, statement,
representation or warranty made by Borrowers or any Subsidiary or Affiliate of
Borrowers, or any officer or director thereof, contained in this Agreement or in
any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by Administrative Agent or
Collateral Agent under or in connection with, this Agreement or any other Loan
Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
Borrowers or any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of Borrowers
or any of its Subsidiaries.
Section 13.02. Reliance by Agents. Each Agent shall be entitled to rely,
and shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent, or made by the proper Person,
and upon advice and statements of legal counsel (including counsel to Borrowers
or counsel to any Lender), independent accountants and other experts selected by
such Agent. Each Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document unless it first shall
receive such advice or concurrence of the Lenders as it deems appropriate and
until such instructions are received, such Agent shall act, or refrain from
acting, as it deems advisable. If any Agent so requests, it first shall be
indemnified to its reasonable satisfaction by the Lenders against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. Each Agent in all cases shall be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of the Lenders and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all Lenders.
Section 13.03. Defaults. Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest, fees, and
expenses required to be paid to Administrative Agent for the account of the
Lenders, except with respect to Events of Default of which Administrative Agent
has actual knowledge, and unless Administrative Agent shall have received
written notice from a Lender or Borrowers referring to this Agreement,
describing such Default or Event of Default, and stating that such notice is a
"Notice of Default". Administrative Agent promptly will notify the Lenders of
its receipt of any such notice or of any Event of Default of which
Administrative Agent has actual knowledge. If any Lender obtains actual
knowledge of any Event of Default, such Lender promptly shall notify the other
Lenders and each Agent of such Event of Default. Each Lender shall be solely
responsible for giving any notices to its Participants, if any. Subject to
Sections 13.02 and 13.07, each Agent shall take such action with respect to such
Default or Event of Default as may be requested by the Required Lenders in
accordance with Article XI; provided, however, that unless and until such Agent
has received any such request, such Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable.
Section 13.04. Rights as a Lender.
(a) With respect to its Commitments and the Loans made by it, DDJ (and any
successor acting as Administrative Agent, if any, as permitted by Section
13.08(a) hereof) in its capacity as a Lender under the Loan Documents shall have
the same rights, privileges and powers under the Loan Documents as any other
Lender and may exercise the same as though it were not acting as Administrative
Agent, and the term "Lender" or "Lenders" shall, unless the context otherwise
indicates, include Administrative Agent in its individual capacity. DDJ (and any
successor acting as Administrative Agent) and its affiliates may (without having
to account for the same to any Lender) accept deposits from, lend money to, make
investments in and generally engage in any kind of banking, trust or other
business with Borrowers (and any of its Subsidiaries or Affiliates) as if it
were not acting as Administrative Agent, and DDJ (and its successors) and its
affiliates may accept fees and other consideration from Borrowers for services
in connection with this Agreement or otherwise without having to account for the
same to the Lenders.
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(b) With respect to its Commitments and the Loans made by it, DDJ (and any
successor acting as Collateral Agent, if any, as permitted by Section 13.08(b)
hereof) in its capacity as a Lender under the Loan Documents shall have the same
rights, privileges and powers under the Loan Documents as any other Lender and
may exercise the same as though it were not acting as Collateral Agent, and the
term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include Collateral Agent in its individual capacity. DDJ (and any successor
acting as Collateral Agent) and its affiliates may (without having to account
for the same to any Lender) accept deposits from, lend money to, make
investments in and generally engage in any kind of banking, trust or other
business with Borrowers (and any of its Subsidiaries or Affiliates) as if it
were not acting as Collateral Agent, and DDJ and its affiliates may accept fees
and other consideration from Borrowers for services in connection with this
Agreement or otherwise without having to account for the same to the Lenders.
Section 13.05. Costs and Expenses; Indemnification. Each Agent may incur
and pay fees, costs, and expenses under the Loan Documents to the extent such
Agent deems reasonably necessary or appropriate for the performance and
fulfillment of its functions, powers, and obligations pursuant to the Loan
Documents, including without limiting the generality of the foregoing, court
costs, reasonable attorneys fees and expenses, costs of collection by outside
collection agencies and auctioneer fees and costs of security guards or
insurance premiums paid to maintain the Collateral, whether or not Borrowers is
obligated to reimburse the Lenders for such expenses pursuant to the Loan
Agreement or otherwise. Each Lender hereby agrees that it is and shall be
obligated to pay to or reimburse Agent for the amount of such Lender's Pro Rata
Share thereof (in accordance with its Commitment). Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand the Agent-Related Persons (without limiting the obligation of
Borrowers to do so), according to their Pro Rata Shares (in accordance with
their respective Total Commitments), from and against any and all Indemnified
Matters (including without limitation Indemnified Matters arising under any
Environmental Law as provided in Section 14.15); provided, however, that no
Lender shall be liable for the payment to the Agent-Related Persons of any
portion of such Indemnified Matters resulting solely from such Person's gross
negligence or willful misconduct as determined in a final order by a court of
competent jurisdiction. Without limitation of the foregoing, each Lender shall
reimburse Administrative Agent or Collateral Agent, as the case may be, upon
demand for such Lender's ratable share of any costs or out-of-pocket expenses
(including attorneys fees and expenses) incurred by such Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement, any other Loan Document, or any document contemplated by or
referred to herein. The undertaking in this section shall survive the payment of
all Obligations hereunder and the resignation or replacement of any Agent.
Section 13.06. Non-Reliance on Agents and Other Lenders. Each Lender
acknowledges that none of the Agent-Related Persons has made any representation
or warranty to it, and that no act by any Agent hereinafter taken, including any
review of the affairs or Property of Borrowers and their Subsidiaries, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender. Each Lender represents to each Agent that it has, independently
and without reliance upon any Agent-Related Person and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of Borrowers and any other Person (other
than the Lenders) party to a Loan Document, and all applicable bank regulatory
laws relating to the transactions contemplated hereby, and made its own decision
to enter into this Agreement and to extend credit to Borrowers. Each Lender also
represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of Borrowers and any other Person
(other than the Lenders) party to a Loan Document. Except for notices, reports
and other documents expressly herein required to be furnished to the Lenders by
Agent, no Agent shall have any duty or responsibility to provide any Lender with
any credit or other information concerning the business, prospects, operations,
Property, financial and other condition or creditworthiness of Borrowers and any
other Person party to a Loan Document that may come into the possession of any
of the Agent-Related Persons.
Section 13.07. Failure to Act. Except for action expressly required of any
Agent under the Loan Documents, such Agent shall in all cases be fully justified
in failing or refusing to act under any Loan Document unless it shall receive
further assurances to its satisfaction from the Lenders of their indemnification
obligations under Section 13.05 against any and all liability and expense that
may be incurred by it by reason of taking or continuing to take any such action.
Section 13.08. Resignation of Agent.
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(a) Subject to the appointment and acceptance of a successor Administrative
Agent as provided below, the Administrative Agent may resign at any time by
notice to the Lenders and Borrowers. Upon any such resignation, the Required
Lenders shall have the right to appoint a successor Administrative Agent. If no
successor Administrative Agent shall have been appointed by the Required Lenders
and have accepted such appointment within 30 days after the retiring
Administrative Agent's giving of notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent. Upon the acceptance of any appointment as the
Administrative Agent by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, remedies, powers, privileges, duties and obligations of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations, under the Loan Documents. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this Article XIII shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Administrative
Agent.
(b) Subject to the appointment and acceptance of a successor Collateral
Agent as provided below, Collateral Agent may resign at any time by notice to
the Lenders and Borrowers. Upon any such resignation, Required Lenders shall
have the right to appoint a successor Collateral Agent. If no successor
Collateral Agent shall have been appointed by Required Lenders and have accepted
such appointment within 30 days after the retiring Collateral Agent's giving of
notice of resignation, then the retiring Collateral Agent may, on behalf of
Lenders, appoint a successor Collateral Agent. Upon the acceptance of any
appointment as Collateral Agent by a successor Collateral Agent, such successor
Collateral Agent shall thereupon succeed to and become vested with all the
rights, remedies, powers, privileges, duties and obligations of the retiring
Collateral Agent, and the retiring Collateral Agent shall be discharged from its
duties and obligations, under the Loan Documents. After any retiring Collateral
Agent's resignation as Collateral Agent, the provisions of this Article XIII
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Collateral Agent.
Section 13.09. Collateral Sub-Agents. The Lenders by its execution and
delivery of this Agreement (or any joinder hereto or any Assignment and
Acceptance hereunder), agrees that, in the event it shall hold any monies or
other investments on account of Borrowers, such monies or other investments
shall be held in the name and under the control of the Administrative Agent or
such Lender, and the Administrative Agent or such Lender shall hold such monies
or other investments as a collateral sub-agent for Collateral Agent under this
Agreement and the other Loan Documents. Borrowers by its execution and delivery
of this Agreement hereby consents to the foregoing.
Section 13.10. Communications by Borrowers. Except as otherwise provided in
this Agreement, Borrowers' communications with respect to the Loan Documents
shall be with Administrative Agent or Collateral Agent, as the case may be, and
Borrowers shall be under no obligation to communicate directly with the Lenders.
Section 13.11. Collateral Matters.
(a) The Lenders hereby irrevocably authorize Collateral Agent, at its
option and in its sole discretion, to release any Lien on any Collateral (i)
upon the termination of the Commitments and payment and satisfaction in full by
Borrowers of all Obligations; (ii) constituting property being sold or disposed
of if a release is required or desirable in connection therewith and if
Borrowers certifies in writing to Collateral Agent that the sale or disposition
is permitted under this Agreement or the other Loan Documents (and Collateral
Agent may rely conclusively on any such certificate, without further inquiry);
(iii) constituting property in which Borrowers owned no interest at the time the
security interest was granted or at any time thereafter; (iv) constituting
property leased to Borrowers under a lease that has expired or is terminated in
a transaction permitted under this Agreement, or (v) which, in the aggregate
with all other dispositions of Equipment, has a fair market value or book value,
whichever is less, of $1,000,000 or less. Except as provided above or expressly
provided in any other Loan Document, Collateral Agent will not execute and
deliver a release of any Lien on any Collateral without the prior written
authorization of all of the Lenders. Upon request by Collateral Agent or
Borrowers at any time, Administrative Agent and the Lenders will confirm in
writing Collateral Agent's authority to release any such Liens on particular
types or items of Collateral pursuant to this Section 13.11; provided, however,
that (1) Collateral Agent shall not be required to execute any document
necessary to evidence such release on terms that, in Collateral Agent's opinion,
would expose Collateral Agent to liability or create any obligation or entail
any consequence other than the release of such Lien without recourse,
representation, or warranty, and (2) such release shall not in any manner
discharge, affect, or impair the Obligations or any Liens (other than those
expressly being released) upon (or obligations of Borrowers in respect of) all
interests retained by Borrowers, including, the proceeds of any sale, all of
which shall continue to constitute part of the Collateral.
46
(b) Collateral Agent shall have no obligation whatsoever to any other
Lenders to assure that the Collateral exists or is owned by Borrowers or is
cared for, protected, or insured or has been encumbered, or that the Lenders'
Liens have been properly or sufficiently or lawfully created, perfected,
protected, or enforced or are entitled to any particular priority, or to
exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to Collateral Agent pursuant to any
of the Loan Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission or event related thereto, subject to the terms
and conditions contained herein, Collateral Agent may act in any manner it may
deem appropriate, in its sole discretion given Collateral Agent's own interest
in the Collateral in its capacity as one of the Lenders and that Collateral
Agent shall have no other duty or liability whatsoever to any other Lender as to
any of the foregoing, except as otherwise provided herein.
Section 13.12. Restrictions on Actions by Administrative Agent and the
Lenders; Sharing Payments.
(a) Administrative Agent and each of the Lenders agrees that it shall not,
without the express consent of Collateral Agent, and that it shall, to the
extent it is lawfully entitled to do so, upon the request of Administrative
Agent and Collateral Agent, set off against the Obligations, any amounts owing
by such Lenders to Borrowers or any accounts of Borrowers now or hereafter
maintained with such Lenders. Administrative Agent and each of the Lenders
further agrees that it shall not, unless specifically requested to do so by
Collateral Agent, take or cause to be taken any action, including, the
commencement of any legal or equitable proceedings, to foreclose any Lien on, or
otherwise enforce any security interest in, any of the Collateral the purpose of
which is, or could be, to give such Lenders any preference or priority against
the other Lenders with respect to the Collateral.
(b) Subject to Section 13.04, if, at any time or times any Lender shall
receive (i) by payment, foreclosure, setoff or otherwise, any proceeds of
Collateral or any payments with respect to the Obligations arising under, or
relating to, this Agreement or the other Loan Documents, except for any such
proceeds or payments received by such Lender from Administrative Agent pursuant
to the terms of this Agreement, or (ii) payments from Administrative Agent in
excess of such Lender's ratable portion of all such distributions by
Administrative Agent, such Lender promptly shall turn the same over to
Administrative Agent, in kind, and with such endorsements as may be required to
negotiate the same to Administrative Agent, or in same day funds, as applicable,
for the account of the Lenders and for apportionment and application to the
Obligations in accordance with Section 3.02 hereof.
Section 13.13. Several Obligations; No Liability. Notwithstanding that
certain of the Loan Documents now or hereafter may have been or will be executed
only by or in favor of an Agent in its capacity as such, and not by or in favor
of the Lenders, any and all obligations on the part of Administrative Agent (if
any) to make any credit available hereunder shall constitute the several (and
not joint) obligations of the respective Lenders on a ratable basis, according
to their respective Commitments, to make an amount of such credit not to exceed,
in principal amount, at any one time outstanding, the amount of their respective
Commitments. Nothing contained herein shall confer upon any Lender any interest
in, or subject any Lender to any liability for, or in respect of, the business,
assets, profits, losses, or liabilities of any other Lenders. Each Lender shall
be solely responsible for notifying its Participants of any matters relating to
the Loan Documents to the extent any such notice may be required, and no Lender
shall have any obligation, duty, or liability to any Participant of any other
Lender. Except as provided in Section 13.05, no Agent or any Lender shall have
any liability for the acts of the other Agent or any other Lender. No Lender
shall be responsible to Borrowers or any other Person for any failure by any
other Lender to fulfill its obligations to make credit available hereunder, nor
to advance for it or on its behalf in connection with its Commitment, nor to
take any other action on its behalf hereunder or in connection with the
financing contemplated herein.
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Article XIV - Miscellaneous
Section 14.01. Notices, Etc. All notices and other communications provided
for hereunder shall be in writing and shall be mailed, telecopied or delivered:
if to Borrowers, at the following address:
AVADO BRANDS, INC.
Xxxxxxx at Washington
Madison, Georgia 30650-1304
Attention: [_____________________]
Telecopier: [_____________________]
with a copy to:
SKADDEN, ARPS, SLATE, XXXXXXX & XXXX LLP
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
Telecopier: (000) 000-0000
if to either Agent or to either Agent on behalf of the Lenders, at the
following address:
Xxxxxx X. Xxxxxxx, Esq.
DDJ Capital Management, LLC
000 Xxxxxx Xxxxxx, Xxxxx 0
Xxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Xxxxx Xxxxxxxxx Xxxxxxx, Esq.
DDJ Capital Management, LLC
000 Xxxxxx Xxxxxx, Xxxxx 0
Xxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
with a copy to:
Xxx X. Xxxxxxxxx, Esq.
Xxxxxxx Procter, LLP
Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Telecopier: (000) 000-0000
or, as to each party, at such other address as shall be designated by such
party in a written notice to the other party complying as to delivery with the
terms of this Section 14.01. All such notices and other communications shall be
effective, (i) if mailed, when received or five (5) days after deposited in the
mails with postage pre-paid and properly addressed, whichever occurs first, (ii)
if telecopied, when transmitted and confirmation received, or (iii) if
delivered, upon delivery, except that notices to Administrative Agent pursuant
to Article II shall not be effective until received by Administrative Agent.
Section 14.02. Amendments, Etc. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent to any departure by
Borrowers or any Lenders therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Required Lenders (or by
Administrative Agent and Collateral Agent, in each case, at the written request
of the Required Lenders), and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
provided, however, that no such waiver, amendment, or consent shall, unless in
writing and signed by Borrowers, all the Lenders, Administrative Agent and
Collateral Agent do any of the following:
(a) increase or extend the Commitment of any Lender;
(b) postpone or delay any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees or other amounts due to
the Lenders (or any of them) hereunder or under any other Loan Document;
(c) reduce the principal of, or the rate of interest specified herein, on
any Loan, or any fees or other amounts payable hereunder or under any other Loan
Document, or forgive, compromise, or cancel any of the Obligations;
(d) change the percentage of the Commitments that is required for the
Lenders or any of them to take any action hereunder;
(e) amend this Section or any provision of the Agreement providing for
consent or other action by all Lenders;
(f) release Collateral other than as permitted by Section 13.11, or
subordinate any security interest or liens of Collateral Agent for the benefit
of the Lenders;
(g) change the definition of "Required Lenders";
48
(h) release Borrowers from any Obligation for the payment of money, or
agree to subordinate any of the Obligations in right of payment to any other
Indebtedness;
(i) amend the provisions of Section 3.03;
(j) permit the sale of all or substantially all of the Capital Stock of
Borrowers or any of its Subsidiaries (except to the extent necessary to effect a
Disposition otherwise permitted hereunder);
(k) change the definition of the Borrowing Base or Availability; or
(l) amend any of the provisions of Article XIV;
and, provided further, however, that (1) no amendment, waiver or consent
shall, unless in writing and signed by the Administrative Agent, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document, (2) no amendment, waiver or consent shall, unless in writing and
signed by Collateral Agent, affect the rights or duties of Collateral Agent
under this Agreement or any other Loan Document, and (3) each of the Lenders is
hereby deemed to have instructed the Collateral Agent (A) to release its Liens
as to the property which is the subject of any asset sale, assignment or other
disposition of property or assets which is permitted hereunder without any
further consent of any Lender, and (B) to take such other actions as are
necessary or desirable to facilitate any such disposition. The foregoing
notwithstanding, any amendment, modification, waiver, consent, termination, or
release of or with respect to Article XIII shall not require the consent by or
the agreement of any Loan Party.
Section 14.03. No Waiver; Remedies, Etc. No failure on the part of the
Lenders or Administrative Agent to exercise, and no delay in exercising, any
right hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any right under any Loan
Document preclude any other or further exercise thereof or the exercise of any
other right. The rights and remedies of the Lenders and Administrative Agent
provided herein and in the other Loan Documents are cumulative and are in
addition to, and not exclusive of, any rights or remedies provided by law. The
rights of the Lenders and Administrative Agent under any Loan Document against
any party thereto are not conditional or contingent on any attempt by the
Lenders and Administrative Agent to exercise any of their rights under any other
Loan Document against such party or against any other Person.
Section 14.04. Expenses; Taxes, Attorneys' Fees. Borrowers will pay, two
(2) Business Days following demand therefor, all (i) reasonable out of pocket
costs and expenses of the Agents (including, without limitation, all reasonable
fees, expenses and disbursements to outside counsel and consultants) in
connection with the preparation, execution and delivery of the Loan Documents,
the funding of Loans, the administration of the Loan Documents (including,
without limitation, participation in the Chapter 11 cases) and any amendment or
waiver of any provision of the Loan Documents and (ii) reasonable out of pocket
costs and expenses of the Agents and the Lenders (including, without limitation,
reasonable fees, expenses and disbursements of counsel) in connection with the
enforcement or protection of any of their rights and remedies under the Loan
Documents.
Section 14.05. Right of Set-off, Sharing of Payments, Etc.
(a) During the continuance of any Event of Default and in addition to (and
without limitation of) any right of set-off, banker's lien, or counterclaim any
Lender may otherwise have, each Lender (at its option but only with the prior
written consent of all Lenders) may, and is hereby authorized by Borrowers to,
at any time and from time to time, without notice to Borrowers (any such notice
being expressly waived by Borrowers), to the fullest extent permitted by law,
set-off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Lender to or for the credit or the account of the Borrowers against any
and all Obligations now or hereafter existing under any Loan Document,
irrespective of whether or not the Lenders shall have made any demand hereunder
or thereunder and although such obligations may be contingent or unmatured.
During the continuance of any Event of Default, the Lenders may, and is hereby
authorized to, at any time and from time to time, without notice to Borrowers
(any such notice being expressly waived by Borrowers), to the fullest extent
permitted by law, set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by the Lenders to or for the credit or the account of Borrowers
against any and all Obligations now or hereafter existing under any Loan
Document, irrespective of whether or not the Lenders shall have made any demand
hereunder or thereunder. The Lenders agree to notify Borrowers, Collateral Agent
and Administrative Agent promptly after any such set-off and application made by
the Lenders provided that the failure to give such notice to Borrowers shall not
affect the validity of such set-off and application.
(b) If any Lender shall obtain from Borrowers payment of any Obligation
through the exercise of any right of set-off, banker's lien, or counterclaim or
similar right or otherwise (other than from Administrative Agent as provided in
this Agreement), and, as a result of such payment, such Lender shall have
received a greater amount of the Obligations than the amount allocable to such
Lender hereunder, Administrative Agent and the other Lenders (including such
Lender) shall promptly make such adjustments from time to time as shall be
equitable, to the end that the Lenders shall share the benefit of such excess
payment (net of any expenses that may be incurred by such Lender in obtaining or
preserving such excess payment) in accordance with Section 3.02(b). To such end
the Lenders shall make appropriate adjustments among themselves if such payment
is rescinded or must otherwise be restored.
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(c) Nothing contained in this Section 14.05 shall require any Lender to
exercise any such right or shall affect the right of any Lender to exercise, and
retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of Borrowers. If, under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured claim in lieu of
a set-off to which this Section 14.05 applies, such Lender shall, to the extent
practicable, exercise its rights in respect of such secured claim in a manner
consistent with the rights of Lenders entitled under this Section 14.05 to share
in the benefits of any recovery on such secured claim.
Section 14.06. Severability. Any provision of this Agreement, which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 14.07. Assignments and Participations.
(a) This Agreement shall be binding upon and inure to the benefit of
Borrowers and the Lenders and their respective successors and assigns; provided,
however, that Borrowers may not assign or transfer any of their rights hereunder
without the prior written consent of the Lenders and any such assignment without
the Lenders' prior written consent shall be null and void. Each Lender may at
any time sell, assign or participate its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitments
and the Loans made by it) without notice to or the consent of the Borrowers or
any other Lenders.
(b) Any foreign Person who purchases or is assigned any portion of such
Loan shall provide the Borrowers and the Administrative Agent (in the case of a
purchase or assignment) or the applicable Lender (in the case of a
participation) with a completed Internal Revenue Service Form W-8 (Certificate
of Foreign Status) or a substantially similar form for such purchaser,
participant or any other affiliate who is a holder of beneficial interests in
the Loan.
(c) From and after the date that the Administrative Agent notifies the
assignor Lender that it has received an executed Assignment and Acceptance (i)
the Assignee thereunder shall be a party hereto and, to the extent that rights
and obligations hereunder have been assigned to it pursuant to such Assignment
and Acceptance, shall have the rights and obligations of a Lender under the Loan
Documents, and (ii) the assignor Lender shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights (except
rights granted pursuant to Section 14.15 with respect claims, losses, demands,
settlements, damages, liabilities, obligations, penalties, fines, fees
reasonable costs and expenses incurred with respect to the period of time that
the assignor Lender was a party to this Agreement) and be released from its
obligations under this Agreement (except with respect to Section 14.05) (and in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's rights and obligations under this Agreement and the
other Loan Documents, such Lender shall cease to be a party hereto and thereto),
and such assignment shall effect a novation among Borrowers, the assignor
Lender, and the Assignee.
(d) Immediately upon the effectiveness of such Assignment and Acceptance,
this Agreement shall be deemed to be amended to the extent, but only to the
extent, necessary to reflect the addition of the Assignee and the resulting
adjustment of the Commitments arising therefrom. The Commitments allocated to
each Assignee shall reduce such Commitments of the assigning Lender pro tanto.
(e) In connection with any such assignment or participation or proposed
assignment or participation, a Lender may disclose all documents and information
which it now or hereafter may have relating to Borrowers or Borrowers' business;
provided in each case that such assignee or participant (or prospective assignee
or participant) shall agree to maintain the confidentiality of such information
pursuant to Section 14.19.
Section 14.08. Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement.
Section 14.09. GOVERNING LAW. THIS AGREEMENT, THE NOTES AND THE OTHER LOAN
DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE COMMONWEALTH OF MASSACHUSETTS AND, TO THE EXTENT APPLICABLE, THE BANKRUPTCY
CODE.
Section 14.10. INTENTIONALLY OMITTED
Section 14.11. INTENTIONALLY OMITTED
Section 14.12. Consent. Except as otherwise expressly set forth herein to
the contrary, if the consent, approval, satisfaction, determination, judgment,
acceptance or similar action (an "Action") of the Lenders or the Agents (or
either of them), shall be permitted or required pursuant to any provision hereof
or any provision of any other Loan Document, such Action shall be required to be
in writing and may be withheld or denied by the Lenders or the Agents (or either
of them) with or without any reason in its sole and absolute discretion.
50
Section 14.13. Interpretation. Neither this Agreement nor any uncertainty
or ambiguity herein shall be construed or resolved against the Lender, Agents or
Borrowers, whether under any rule of construction or otherwise. On the contrary,
this Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.
Section 14.14. Reinstatement; Certain Payments. If any claim is ever made
upon the Lenders or the Agents (or any of them) for repayment or recovery of any
amount or amounts received by the Lenders or the Agents (or any of them) in
payment or received on account of any of the Obligations, the Lenders or the
Agents shall give prompt notice of such claim to the Borrowers, and if such
Lenders or such Agents repay all or part of such amount by reason of (i) any
judgment, decree or order of any court of competent jurisdiction or
administrative body having jurisdiction over such Lenders, such Agents or any of
their respective property, or (ii) any good faith settlement or compromise of
any such claim effected by such Lenders or such Agents with any such claimant,
then and in such event the Borrowers agree, jointly and severally, that (A) any
such judgment, decree, order, settlement or compromise shall be binding upon it
notwithstanding the cancellation of any instrument evidencing the Obligations or
the other Loan Documents or the termination of this Agreement or any other Loan
Document, and (B) the Borrowers shall be and remain jointly and severally liable
to the Lenders or Agents hereunder for the amount so repaid or recovered to the
same extent as if such amount had never originally been received by the Lenders
or the Agents (or any of them, as the case may be).
Section 14.15. Indemnification. In addition to the Borrowers' other
Obligations under this Agreement, the Borrowers (and each of them) agree,
jointly and severally, to defend, protect, indemnify and hold harmless, the
Administrative Agent, each Lender, the Collateral Agent, and each of their
affiliates and each of the respective officers, directors, members, partners,
employees, agents, advisors, attorneys, and representatives of each (each, an
"Indemnified Party") from and against any and all claims, damages, losses,
liabilities, and expenses (including, without limitation, reasonable fees and
disbursements of counsel), joint or several, that may be incurred by or asserted
or awarded against any Indemnified Party (including, without limitation, in
connection with or relating to any investigation, litigation or proceeding or
the preparation of any defense in connection therewith), in each case arising
out of or in connection with or by reason of the Facility, the Loan Documents or
any of the transactions contemplated thereby, or any actual or proposed use of
the proceeds of the Facility (collectively, the "Indemnified Matters"), except
to the extent such claim, damage, loss, liability or expense is found in a final
judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct. In the case of an
investigation, litigation or other proceeding to which the indemnity in this
paragraph applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by the Borrowers, any of
their directors, security holders or creditors, an Indemnified Party or any
other person, or an Indemnified Party is otherwise a party thereto and whether
or not the transactions contemplated hereby are consummated. The Borrowers
further agree that no Indemnified Party shall have any liability (whether direct
or indirect, in contract, tort, or otherwise) to the Borrowers or any of their
security holders or creditors for or in connection with the transactions
contemplated hereby, except for direct damages (as opposed to special, indirect,
consequential or punitive damages (including, without limitation, any loss of
profits, business or anticipated savings)) determined in a final judgment by a
court of competent jurisdiction to have resulted from such Indemnified Party's
gross negligence or willful misconduct. To the extent that the undertaking to
indemnify, pay and hold harmless set forth in this Section 14.15 may be
unenforceable because it is violative of any law or public policy, Borrowers
shall contribute the maximum portion which it is permitted to pay and satisfy
under applicable law, to the payment and satisfaction of all Indemnified Matters
incurred by the Indemnitees. This Indemnity shall survive the repayment of the
Obligations and the discharge of the Liens granted under the Loan Documents.
51
Section 14.16. Interest. It is the intention of the parties hereto that
each Agent and each Lender shall conform strictly to usury laws applicable to
it. Accordingly, if the transactions contemplated hereby or by any other Loan
Document would be usurious as to any Agent or any Lender under laws applicable
to it (including the laws of the United States of America and the Commonwealth
of Massachusetts or any other jurisdiction whose laws may be mandatorily
applicable to such Agent or such Lender notwithstanding the other provisions of
this Agreement), then, in that event, notwithstanding anything to the contrary
in this Agreement or any other Loan Document or any agreement entered into in
connection with or as security for the Obligations, it is agreed as follows: (i)
the aggregate of all consideration which constitutes interest under law
applicable to any Agent or any Lender that is contracted for, taken, reserved,
charged or received by such Agent or such Lender under this Agreement or any
other Loan Document or agreements or otherwise in connection with the
Obligations shall under no circumstances exceed the maximum amount allowed by
such applicable law, any excess shall be canceled automatically and if
theretofore paid shall be credited by such Agent or such Lender on the principal
amount of the Obligations (or, to the extent that the principal amount of the
Obligations shall have been or would thereby be paid in full, refunded by such
Agent or such Lender, as applicable, to the Borrowers); and (ii) in the event
that the maturity of the Obligations is accelerated by reason of any Event of
Default under this Agreement or otherwise, or in the event of any required or
permitted prepayment, then such consideration that constitutes interest under
law applicable to any Agent or any Lender may never include more than the
maximum amount allowed by such applicable law, and excess interest, if any,
provided for in this Agreement or otherwise shall be canceled automatically by
such Agent or such Lender, as applicable, as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited by such Agent or such
Lender, as applicable, on the principal amount of the Obligations (or, to the
extent that the principal amount of the Obligations shall have been or would
thereby be paid in full, refunded by such Agent or such Lender to the
Borrowers). All sums paid or agreed to be paid to any Agent or any Lender for
the use, forbearance or detention of sums due hereunder shall, to the extent
permitted by law applicable to such Agent or such Lender, be amortized,
prorated, allocated and spread throughout the full term of the Loans until
payment in full so that the rate or amount of interest on account of any Loans
hereunder does not exceed the maximum amount allowed by such applicable law. If
at any time and from time to time (x) the amount of interest payable to any
Agent or any Lender on any date shall be computed at the Highest Lawful Rate
applicable to such Agent or such Lender pursuant to this Section 14.16 and (y)
in respect of any subsequent interest computation period the amount of interest
otherwise payable to such Agent or such Lender would be less than the amount of
interest payable to such Agent or such Lender computed at the Highest Lawful
Rate applicable to such Agent or such Lender, then the amount of interest
payable to such Agent or such Lender in respect of such subsequent interest
computation period shall continue to be computed at the Highest Lawful Rate
applicable to such Agent or such Lender until the total amount of interest
payable to such Agent or such Lender shall equal the total amount of interest
which would have been payable to such Agent or such Lender if the total amount
of interest had been computed without giving effect to this Section 14.16.
For purposes of this Section 14.16, the term "applicable law" shall mean
that law in effect from time to time and applicable to the loan transaction
between the Borrowers, on the one hand, and the Agents and the Lenders, on the
other, that lawfully permits the charging and collection of the highest
permissible, lawful non-usurious rate of interest on such loan transaction and
this Agreement, including laws of the Commonwealth of Massachusetts and, to the
extent controlling, laws of the United States of America.
Section 14.17. Records. The unpaid principal of, and interest on, the
Obligations, the interest rate or rates applicable to such unpaid principal and
interest, the duration of such applicability, the Commitment, and the accrued
and unpaid fees payable pursuant to Section 4.02 hereof shall at all times be
ascertained from the records of the Lender and Agents, which shall be conclusive
and binding absent manifest or demonstrable error.
Section 14.18. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of Borrowers, Lender and Agents, and their respective
successors and assigns, except that Borrowers shall not have the right to assign
its rights hereunder or any interest herein without the prior written consent of
the Lender and Agents, and any assignment by the Lenders shall be governed by
Section 14.07 hereof.
52
Section 14.19. Confidentiality. The Lenders, Administrative Agent and
Collateral Agent agree (on behalf of itself and each of its affiliates,
directors, officers, employees and representatives) to use reasonable
precautions to keep confidential, in accordance with its customary procedures
for handling confidential information of this nature and in accordance with safe
and sound practices of comparable commercial finance companies, any non-public
information supplied to it by Borrowers pursuant to this Agreement or the other
Loan Documents which is identified in writing by the Loan Parties as being
confidential at the time the same is delivered to such Person (and which at the
time is not, and does not thereafter become, publicly available or available to
such Person from another source not known to be subject to a confidentiality
obligation to such Person not to disclose such information), or available to
such Person from another source not known to be subject to a confidentiality
obligation to such Person not to disclose such information, provided that
nothing herein shall limit the disclosure of any such information (a) to the
extent required by statute, rule, regulation or judicial process, (b) to Lender,
Administrative Agent, Collateral Agent, to counsel, accountants, auditors and
other advisors for such member of the Lenders, or to counsel for any other
member of the Lenders, (c) to examiners, auditors, accountants, to any issuer of
an Approved Letter of Credit the extent required by any court, governmental or
administrative agency, pursuant to any subpoena or other legal process, or by
any law, statute, regulation or court order, or in connection with any
litigation to which any of the Agents or the Lenders are Party or (d) to any
assignee or participant (or prospective assignee or participant) so long as such
assignee or participant (or prospective assignee or participant) first executes
a Confidentiality Agreement. The Lender agree that, upon receipt of a request or
identification of the requirement for disclosure pursuant to clause (c) hereof
(unless prohibited by applicable law, statute, regulation or court order), it
will make reasonable efforts to keep Borrowers informed of such request or
identification; provided that Borrowers acknowledges that the Lender may make
disclosure as required by any Governmental Authority or representative thereof.
Section 14.20. Power of Attorney. Borrowers hereby irrevocably designate,
make, constitute, and appoint Collateral Agent (and all Persons designated by
Collateral Agent) as Borrowers' true and lawful attorney (and agent-in-fact),
and Collateral Agent, or Collateral Agent's agent, may, without notice to
Borrowers and in either Borrowers' or Collateral Agent's name, but at the cost
and expense of Borrowers:
(a) During the continuance of an Event of Default as Collateral Agent or
said agent (including Administrative Agent), in its sole discretion, may
determine, endorse Borrowers' name on any checks or any other evidence of
payment or proceeds of the Collateral which come into the possession of the
Lenders or Agents or under the Lenders' or Agents' control and shall deposit
such item of payment into the Administrative Agent's Account and credit the
amount thereof (in accordance with the provisions of this Agreement, including
without limitation, Section 3.02) to the Obligations.
(b) During the continuance of (i) a Payment Event of Default or (ii) an
Event of Default created by a violation of Section 9.07 or Article X, do any of
the following, at its election in its Permitted Discretion: (A) sell or assign
any Collateral, and settle any legal proceedings brought to collect any
Collateral (except legal proceedings involving, on the one hand, Borrowers or
any of its Subsidiaries, and on the other hand, any member of the Lender Group),
in each case, upon such terms, for such amounts, and at such time or times as
Collateral Agent deems advisable, subject to the provisions of any Loan Document
applicable thereto and to standards of commercial reasonableness, (B) upon the
reasonable request of Collateral Agent, upon the premises of Borrowers and their
Subsidiaries (but, without disruption to the business activities of Borrowers
and their Subsidiaries), review and obtain copies of all mail related to the
Collateral which is addressed to Borrowers or any of its Subsidiaries, (C)
prepare, file, and sign Borrowers' name to any notice of lien, assignment, or
satisfaction of lien or similar document, which in each case are sent to account
debtors (as such term is defined in the UCC) of Borrowers or any of its
Subsidiaries in connection with any portion of the Collateral, (D) endorse the
name of Borrowers upon any chattel paper, instrument, freight xxxx, xxxx of
lading or similar document relating to the Collateral (including without
limitation any items of payment or proceeds relating to any Collateral) and,
shall in all such instances involving an instrument or other items, deposit the
same to the account of Collateral Agent on account of the Obligations, and (E)
to the extent permitted by Borrowers' license agreements, use the information
recorded on or contained in any data processing equipment, computer hardware,
and software relating to the Accounts Receivable, Inventory, Equipment, and any
other Collateral.
(c) During the continuance of an Event of Default make and adjust claims
under policies of casualty, property, boiler and machinery, business
interruption insurance and other similar policies of insurance with respect to
the Collateral (but excluding policies of liability or worker's compensation
insurance) involving amounts greater than $50,000.
Section 14.21. Integration. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.
53
Section 14.22. Lender Advertising. The Agents and the Lenders shall be entitled
to advertise the closing of the transactions contemplated by this Agreement in
such trade publications, business journals, newspapers of general circulation
and otherwise, as the Agents and the Lenders shall deem appropriate, including,
without limitation, the publication of a tombstone announcing the closing of
this transaction; provided, that the Agents and the Lenders shall obtain the
prior written consent of the Borrowers prior to disseminating any advertisement
described in this Section 14.22 which consent shall not be reasonably withheld.
Section 14.23. INTENTIONALLY OMITTED
Section 14.24. Liability of Borrowers. Notwithstanding any provision herein
or in any other Loan Document, the Borrowers, and each of them, are and shall be
jointly and severally liable for any and all Obligations (whether any such
Obligation is specified as an obligation of the Borrowers or of any of them).
Section 14.25. Reliance on Representations and Actions of Avado . Each
Borrower (other than Avado) hereby appoints Avado as such Borrower's agent to
execute, deliver and perform, on behalf of such Borrower, any and all notices,
certificates, documents and actions to be executed, delivered or performed
hereunder or under any other Loan Documents, and such Borrower hereby agrees
that the Agents and the Lenders may rely upon any representation, warranty,
certificate, notice, document or telephone request which purports to be executed
or made or which the Agents or the Lenders in good faith believe to have been
executed or made by Avado or any of its Authorized Officers.
54
IN WITNESS WHEREOF, the parties hereto have caused this Post-Petition
Credit Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
BORROWERS:
AVADO BRANDS, INC., a Georgia corporation
DON PABLO'S HOLDING CORP., a Delaware corporation
CANYON CAFE OPERATING CORP., a Georgia corporation
HOPS OF THE OHIO VALLEY, INC., a Florida corporation
HOPS OF SOUTHWEST FLORIDA, INC., a Florida corporation
HOPS GRILL & BAR, INC., a Florida corporation
CYPRESS COAST CONSTRUCTION CORPORATION,
a Florida corporation
HOPS MARKETING, INC., a Florida corporation
DON PABLO'S LIMITED, INC., an Ohio corporation
DON PABLO'S OPERATING CORP., an Ohio corporation
CANYON CAFE TX GENERAL, INC., a Georgia corporation
CANYON CAFE LIMITED, INC., a Georgia corporation
DON PABLO'S TX LIQUOR, INC., a Texas corporation,
XXX XXXXXX OF BALTIMORE COUNTY, INC.,
a Maryland corporation
XXX XXXXXX OF XXXXXX COUNTY, INC.,
a Maryland corporation
XXX XXXXXX OF PRINCE GEORGE'S COUNTY, INC.,
a Maryland corporation
SMAS, INC., a Texas corporation
By:_____________________
Name:
Title:
HOPS OF SOUTHWEST FLORIDA, LTD., a Florida limited partnership
HOPS OF BRADENTON, LTD., a Florida limited partnership
By: Hops of Southwest Florida, Inc.
Its: General Partner
By:_____________________
Name:
Title:
S-1
DON PABLO'S OF TEXAS, LP, a Texas limited partnership
By: Don Pablo's Operating Corp.
Its: General Partner
By:_____________________
Name:
Title:
CANYON CAFE OF TEXAS, LP, a Texas limited partnership
By: Canyon Cafe TX General, Inc.,
Its: General Partner
By:_____________________
Name:
Title:
HOPS OF THE OHIO VALLEY, LTD., a Florida limited partnership
HOPS OF BOWLING GREEN, LTD., a Florida limited partnership
By: Hops of the Ohio Valley, Inc.
Its: General Partner
By:_____________________
Name:
Title:
HOPS OF MISSOURI, LLC, a Florida limited liability company
By: Hops of Kansas, Ltd.
Its:
By: Hops Grill & Bar, Inc.
Its: General Partner
By:_____________________
Name:
Title:
S-2
HOPS OF STUART, LTD., a Florida limited partnership
HOPS OF SOUTH FLORIDA, LTD., a Florida limited partnership
HOPS OF BOYNTON BEACH, LTD., a Florida limited partnership
HOPS OF CORAL SPRINGS, LTD., a Florida limited partnership
HOPS OF SOUTHEAST FLORIDA, LTD., a Florida limited partnership
HOPS OF THE GOLD COAST, LTD., a Florida limited partnership
HOPS OF GREATER ORLANDO, LTD., a Florida limited partnership
HOPS OF FLORIDA MALL, LTD., a Florida limited partnership
HOPS OF ALTAMONTE SPRINGS, LTD., a Florida limited partnership
HOPS OF GREATER XXXXXXX XX, LTD., a Florida limited partnership
HOPS OF LAKELAND, LTD., a Florida limited partnership
HOPS OF SOUTH CAROLINA, LTD., a Florida limited partnership
HOPS OF THE CAROLINAS, LTD., a Florida limited partnership
HOPS OF XXXXXXXX, LTD., a Florida limited partnership
HOPS OF THE CAROLINAS II, LTD., a Florida limited partnership
HOPS OF ATLANTA, LTD., a Florida limited partnership
HOPS OF OHIO, LTD., a Florida limited partnership
HOPS OF GREATER DETROIT, LTD., a Florida limited partnership
HOPS OF KANSAS, LTD., a Florida limited partnership
HOPS OF INDIANA, LTD., a Florida limited partnership
HOPS OF GREATER BOSTON, LTD., a Florida limited partnership
HOPS OF ATLANTA II, LTD., a Florida limited partnership,
HOPS OF CHERRY CREEK, LTD., a Florida limited partnership,
HOPS OF COLORADO SPRINGS, LTD., a Florida limited partnership,
HOPS OF IDAHO, LTD., a Florida limited partnership,
HOPS OF LOUISIANA, LTD., a Florida limited partnership,
HOPS OF MASSACHUSETTS, a Florida limited partnership,
HOPS OF SOUTH CAROLINA II, LTD., a Florida limited partnership,
HOPS OF THE ROCKIES II, LTD., a Florida limited partnership,
HOPS OF THE ROCKIES, LTD., a Florida limited partnership,
HNEF AREA MANAGER II, LTD., a Florida limited partnership
By: Hops Grill & Bar, Inc.
Its: General Partner
By:_____________________
Name:
Title:
S-3
THE HOPS NORTHEAST FLORIDA JOINT VENTURE NO. I,
a Florida general partnership
THE HOPS NORTHEAST FLORIDA JOINT VENTURE NO. II,
a Florida general partnership
By: Hops of Southwest Florida, Inc.
Its: General Partner
By: Hops Grill & Bar, Inc.
Its: General Partner
By:_____________________
Name:
Title:
THE HOPS NORTHEAST FLORIDA JOINT VENTURE NO. III,
a Florida general partnership
By: Hops Grill & Bar, Inc.
Its: General Partner
By: HNEF Area Manager II, Ltd.
Its: General Partner
By: Hops Grill & Bar, Inc.
Its: General Partner
By:_____________________
Name:
Title:
S-4
ADMINISTRATIVE AGENT AND COLLATERAL AGENT:
DDJ Capital Management, LLC
By:______________________
Name:
Title:
LENDERS:
B III-A Capital Partners, L.P.
By: GP III-A, LLC, its General Partner
By: DDJ Capital Management, LLC,
Manager
By: _______________________
Name:
Title:
Commitment: 2.702294%
$1,621,376.40
B IV Capital Partners, L.P.
By: GP Capital IV, LLC, its General Partner
By: DDJ Capital Management, LLC,
Manager
By: _______________________
Name:
Title: Member
Commitment: 59.082949%
$35,449,769.40
S-5
GMAM Investment Funds Trust II - Promark
Alternative High Yield Bond Fund
By: DDJ Capital Management, LLC, on behalf of GMAM Investment Funds
Trust II - Promark
Alternative High Yield Bond Fund, in its capacity
as investment manager
By: _______________________
Name:
Title: Member
Commitment: 37.782390%
$22,669,434.00
The October Fund, Limited Partnership
By: October GP, LLC, its General Partner
By: DDJ Capital Management, LLC,
Manager
By: _______________________
Name:
Title:
Commitment: 0.432367%
$259,420.20
S-6
