AMENDMENT NO. 7, dated as of June 20, 2000 (this
"Amendment"), to the Credit Agreement dated as of January 7,
1998, as amended by Amendment No. 1 and Waiver dated as of
March 16, 1998, Amendment No. 2 and Waiver dated as of May
21, 1998, Amendment No. 3 and Waiver dated as of July 16,
1998, Amendment No. 4 dated as of November 12, 1998,
Amendment No. 5 dated as of March 12, 1999, and Amendment
No. 6 dated as of December 20, 1999 (the "Credit Agreement"),
among DENNY'S, INC., a California corporation, EL POLLO LOCO,
INC., a Delaware corporation, FLAGSTAR ENTERPRISES, INC., an
Alabama corporation, FLAGSTAR SYSTEMS, INC., a Delaware
corporation, QUINCY'S RESTAURANTS, INC., an Alabama
corporation (each of the foregoing, except for FLAGSTAR
ENTERPRISES, INC., QUINCY'S RESTAURANTS, INC. and EL POLLO
LOCO, INC., for purposes of this Amendment and the Credit
Agreement, individually, a Borrower and, collectively, the
"Borrowers"), ADVANTICA RESTAURANT GROUP, INC., a Delaware
corporation ("Parent"), the Lenders (as defined in Article I
of the Credit Agreement) and THE CHASE MANHATTAN BANK, a
New York banking corporation, as swingline lender (in such
capacity, the "Swingline Lender"), as issuing bank (in such
capacity, the "Issuing Bank"), as administrative agent (in
such capacity, the "Administrative Agent") and as collateral
agent (in such capacity, the "Collateral Agent") for the
Lenders.
A. The Lenders have extended credit to the Borrowers, and have
agreed to extend credit to the Borrowers, in each case pursuant to the terms and
subject to the conditions set forth in the Credit Agreement.
B. Parent and the Borrowers have requested that the Required
Lenders agree to amend certain provisions of the Credit Agreement as provided
herein.
C. The Required Lenders are willing to agree to such
amendments, on the terms and subject to the conditions set forth herein.
D. Capitalized terms used but not defined herein shall have
the meanings assigned to them in the Credit Agreement after giving effect to
this Amendment.
Accordingly, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the sufficiency and receipt
of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Amendment. (a) Section 1.01 of the Credit
Agreement is hereby amended as follows:
(i) by inserting the following definition in the appropriate
alphabetical order:
"'FRD Sale' shall have the meaning assigned to such term in
Section 6.05(l)."
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2
(ii) by substituting for the proviso at the end of the
definition of the term "Consolidated EBITDA" before the period the
following proviso:
"; provided, however, that (a) upon and after the occurrence
of an EPL Sale, Consolidated EBITDA for each period that
includes the date of occurrence of such EPL Sale will, solely
for purposes of determining compliance with Sections 6.11,
6.12, 6.13 and 6.14, be determined on a pro forma basis, as if
EPL had been sold on the first day of such period, (b) upon
and after the occurrence of the FRD Sale, Consolidated EBITDA
for each period that includes the date of occurrence of the
FRD Sale will, solely for purposes of determining compliance
with Sections 6.11, 6.12, 6.13 and 6.14, be determined on a
pro forma basis, as if FRD had been sold on the first day of
such period, and (c) after the occurrence of any acquisition
of any person by Parent, any Borrower or any Specified
Subsidiary, Consolidated EBITDA for each period that includes
the date of occurrence of such acquisition will, solely for
purposes of determining compliance with Sections 6.11 and
6.12, be determined on a pro forma basis, based on the actual
historical results of operations of such person, as if such
acquisition had occurred on the first day of such period";
(b) Section 6.04(c) of the Credit Agreement is hereby amended by
inserting the text "subject to Section 6.15(a)," immediately following the text
"(c)" at the beginning of such Section.
(c) Section 6.05 of the Credit Agreement is hereby amended as follows:
(i) by deleting the word "and" set forth at the end of
Section 6.05(j); and
(ii) by inserting the following new paragraphs:
"(l) Parent may dispose of FRD on terms determined reasonably
and in good faith by the Board of Directors of Parent to be
fair (the "FRD Sale"), provided that (i) at the time of the
FRD Sale, and immediately after giving effect thereto, no
Default or Event of Default shall have occurred and be
continuing, (ii) the FRD Sale is consummated in accordance
with (A) an agreement and related documentation the terms of
which are reasonably satisfactory to the Administrative Agent
(without giving effect to any amendments, waivers, supplements
or other modifications thereto that are materially adverse to
the Lenders) and (B) applicable law and regulations and
otherwise on terms reasonably satisfactory to the
Administrative Agent, (iii) prior to or simultaneously with
the FRD Sale, the Advantica Guarantee shall, pursuant to an
agreement in form and substance reasonably satisfactory to the
Administrative Agent, be irrevocably terminated and (iv) the
execution, delivery and performance by Parent and each
necessary Loan Party of the documentation in respect of the
FRD Sale, and the completion of the FRD Sale, (a) shall have
been duly authorized by all requisite corporate and, if
required, stockholder action and (b) will not (i) violate (A)
any provision of law, statute, rule or regulation, or of the
certificate or articles of incorporation or other constitutive
documents or by-laws of Parent, any Borrower or any other
Subsidiary, (B) any order of any Governmental Authority or (C)
any
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3
provision of any indenture, agreement or other instrument to
which Parent, any Borrower or any other Subsidiary is a party
or by which any of them or any of their property is or may be
bound or (ii) be in conflict with, result in a breach of or
constitute (alone or with notice or lapse of time or both) a
default under, or give rise to any right to accelerate or to
require the prepayment, repurchase or redemption of any
obligation under any such indenture, agreement or other
instrument; and
(m) Denny's or any of its subsidiaries may (i) sell or
transfer the rights to operate restaurants under the Denny's
name as franchisees (but not the restaurant buildings
themselves (the "Retained Denny's Restaurants") or the land on
which such restaurants are located (the "Retained Denny's
Land")) to franchisees of Denny's (the "Denny's Franchisees")
generally in accordance with Parent's March 2000 Business Plan
for cash consideration equal to the Fair Market Value of such
rights and (ii) may lease or sublease the Retained Denny's
Restaurants and the Retained Denny's Land to the Denny's
Franchisees that operate such Retained Denny's Restaurants
pursuant to operating leases or subleases on terms determined
in good faith by Denny's or the applicable Subsidiary to be
market terms at the time such leases or subleases are entered
into, provided that (i) such Retained Denny's Restaurants
continue to be operated by such Denny's Franchisees under the
Denny's name and (ii) such sales, and such leases or
subleases, do not violate, conflict with, result in the breach
of or constitute a default under any provision of, or give
rise to any right to terminate, any indenture, agreement or
other instrument to which Parent, any Borrower or any
Subsidiary is a party;".
(d) Section 6.06(a) of the Credit Agreement is hereby amended by
inserting the text "subject to Section 6.15(a)," immediately following the text
"provided, however, that (i)" in such Section.
(e) Section 6.08(a) of the Credit Agreement is hereby amended as
follows:
(i) by deleting the word "and" set forth at the end of Section
6.08(a)(ii); and
(ii) by inserting the word "and" immediately following the
semi-colon at the end of Section 6.08(iii) and by then adding the
following new paragraph:
"(iv) Parent shall be permitted to purchase voluntarily New
Senior Notes from time to time after the Advantica Guarantee
has, pursuant to an agreement in form and substance reasonably
satisfactory to the Administrative Agent, been irrevocably
terminated, provided that (A) immediately after giving effect
to each such purchase, the Borrowers shall be in compliance,
on a pro forma basis, with the covenants set forth in Sections
6.11, 6.12, 6.13 and 6.14 of this Agreement, which shall be
recomputed as of the last day of the most recently ended
fiscal quarter of Parent as if such repurchase had occurred on
the first day of each relevant period for testing such
compliance, and Parent shall have delivered to the
Administrative Agent an officer's certificate to such effect,
(B) the aggregate consideration paid by Parent
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4
with respect to any purchase of New Senior Notes pursuant to
this clause (iv) shall not exceed the lesser of (1) a
percentage separately agreed upon between the Administrative
Agent and Parent of the principal amount of such New Senior
Notes and (2) the Fair Market Value of such New Senior Notes,
(C) the aggregate consideration paid for the purchase of New
Senior Notes pursuant to this clause (iv) (excluding the
aggregate amount of accrued but unpaid interest in respect of
such New Senior Notes included in such consideration) shall
not exceed $50,000,000 less the positive difference (if any)
between (A) the aggregate amount paid by Parent at any time,
and (B) the aggregate amount paid back to Parent at any time,
in each case pursuant to the Advantica Guarantee, (D) no
Default or Event of Default shall have occurred or be
continuing or would result therefrom and (E) Parent promptly
cancels such New Senior Notes; ".
(f) Section 6.15(a) of the Credit Agreement is hereby amended by
inserting the following new language after the first sentence of such Section:
"Parent shall not (i) own or acquire any assets other than
shares of capital stock of Parent's subsidiaries, assets owned
by Parent on June 20, 2000, other assets acquired by Parent
after such date in the ordinary course of Parent's business,
cash and Permitted Investments, provided that the amount of
such cash, together with the Fair Market Value of such
Permitted Investments, shall not at any time exceed $500,000
other than on any day on which (1) any payment is due in
respect of the New Senior Notes (and no Default or Event of
Default shall have occurred and be continuing), (2) Parent is
making any payment to purchase New Senior Notes pursuant to
Section 6.08(a) (iv), (3) any payment is due in respect of the
Advantica Guarantee (and no Default or Event of Default shall
have occurred and be continuing) or (4) any payment is due in
respect of any liabilities referred to below in clause (ii)(B)
or (C), in which event Parent may, during such day, hold
additional cash in an amount up to the aggregate amount of
such payment to enable Parent to make such payment) or (ii)
incur any liabilities (other than (A) liabilities under the
New Senior Notes Indenture, the Loan Documents and the
Advantica Guarantee, (B) liabilities imposed by law, including
tax liabilities, and (C) other liabilities incidental to its
existence and permitted business and activities)."
(g) Section 1.02 of the Security Agreement is hereby amended by
substituting the text "Denny's, Inc." for the text "Advantica Restaurant Group,
Inc." in the definition of the term "General Fund Account".
(h) Section 5.01(d) of the Security Agreement is hereby amended by
substituting the text "Denny's, Inc." for the text "Parent" in the third
sentence of such Section.
SECTION 2. Amendment Fee. In consideration of the agreements
of the Required Lenders contained in this Amendment, the Borrower agrees to pay
to the Administrative Agent, for the account of each Lender that delivers an
executed counterpart of this Amendment on or prior to June 20, 2000, an
amendment fee (the "Amendment Fee") in an amount equal to 0.25% of such Lender's
Commitment as of such
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5
date; provided that the Amendment Fee shall not be payable unless and until this
Amendment becomes effective as provided in Section 5 below.
SECTION 3. Representations and Warranties. Parent and the
Borrowers represent and warrant to the Administrative Agent and to each of the
Lenders that:
(a) This Amendment has been duly authorized, executed and delivered by
Parent and each of the Borrowers and constitutes their legal, valid and binding
obligations, enforceable in accordance with its terms except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
(b) Before and after giving effect to this Amendment, the
representations and warranties set forth in Article III of the Credit Agreement
are true and correct in all material respects with the same effect as if made on
the date hereof, except to the extent such representations and warranties
expressly relate to an earlier date.
(c) Before and after giving effect to this Amendment, no Event of
Default or Default has occurred and is continuing.
SECTION 4. Releases. Upon the consummation of the FRD Sale, if
any, in accordance with the terms of the Credit Agreement, all Liens on the
capital stock of FRD under the Credit Agreement and the other Loan Documents
will be released.
SECTION 5. Conditions to Effectiveness. This Amendment shall
become effective as of the date first above written when the Administrative
Agent shall have received (a) counterparts of this Amendment that, when taken
together, bear the signatures of Parent, each of the Borrowers and the Required
Lenders and (b) the Amendment Fee.
SECTION 6. Credit Agreement. Except as specifically amended
hereby, the Credit Agreement shall continue in full force and effect in
accordance with the provisions thereof as in existence on the date hereof. After
the date hereof, any reference to the Credit Agreement shall mean the Credit
Agreement as amended hereby.
SECTION 7. Loan Document. This Amendment shall be a Loan
Document for all purposes.
SECTION 8. Applicable Law. THIS AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.
SECTION 9. Counterparts. This Amendment may be executed in two
or more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one agreement. Delivery of an
executed counterpart of a signature page of this Amendment by telecopy shall be
effective as delivery of a manually executed counterpart of this Amendment.
SECTION 10. Expenses. Parent and the Borrowers agree to
reimburse the Administrative Agent for its out-of-pocket expenses in connection
with this
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6
Amendment, including the reasonable fees, charges and disbursements of Cravath,
Swaine & Moore, counsel for the Administrative Agent.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their respective authorized officers as of the
day and year first written above.
ADVANTICA RESTAURANT GROUP, INC.,
by /s/ Kenneth E. Jones
--------------------------------
Name: Kenneth E. Jones
Title: Vice President and Treasurer
DENNY'S, INC.,
by /s/ Kenneth E. Jones
--------------------------------
Name: Kenneth E. Jones
Title: Vice President and Treasurer
ADVANTICA SYSTEMS, INC.,
by /s/ Kenneth E. Jones
--------------------------------
Name: Kenneth E. Jones
Title: Vice President and Treasurer
THE CHASE MANHATTAN BANK, individually and as
Administrative Agent, Collateral Agent,
Swingline Lender and Issuing Bank,
by /s/ Barry K. Bergman
--------------------------------
Name: Barry K. Bergman
Title: Vice President
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BHF (USA) CAPITAL CORPORATION,
by /s/ Perry Forman
--------------------------------
Name: Perry Forman
Title: Vice President
by /s/ Nina Zhou
--------------------------------
Name: Nina Zhou
Title: Associate
FARALLON DINING INVESTORS LLC,
by /s/ Meridee Moore
--------------------------------
Name: Meidee Moore
Title: Managing Member
JACKSON NATIONAL LIFE INSURANCE COMPANY,
by
--------------------------------
Name:
Title:
KZH CNC LLC,
by /s/ Susan Lee
--------------------------------
Name: Susan Lee
Title: Authorized Agent
KZH PAMCO LLC,
by
--------------------------------
Name:
Title:
FOOTHILL INCOME TRUST II, L.P.,
by /s/ Dennis R. Ascher
--------------------------------
Name: Dennis R. Ascher
Title: Managing Member
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8
PAM CAPITAL FUNDING LP,
by
--------------------------------
Name:
Title:
FLEET BUSINESS CREDIT CORPORATION,
by /s/ Robert J. Price
--------------------------------
Name: Robert J. Price
Title: Senior Vice President
TORONTO DOMINION (TEXAS), INC.,
by /s/ Mark A. Baird
--------------------------------
Name: Mark A. Baird
Title: Vice President
GENERAL ELECTRIC CAPITAL CORP.,
by
--------------------------------
Name:
Title:
TRANSAMERICA BUSINESS CREDIT CORPORATION,
by /s/ Perry Vavoules
--------------------------------
Name: Perry Vavoules
Title: Senior Vice President
AMSOUTH BANK,
by /s/ Kathleen F. Kerlinger
--------------------------------
Name: Kathleen F. Kerlinger
Title: Attorney-in-Fact
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