SECOND STANDSTILL AGREEMENT
This Second Standstill Agreement ("Agreement") entered into the
19th day of April, 2001, by and among COOKER RESTAURANT CORPORATION, an
Ohio corporation ("Borrower"), CGR MANAGEMENT CORPORATION, a Florida
corporation, FLORIDA COOKER LP, INC., a Florida corporation, and
SOUTHERN COOKER LIMITED PARTNERSHIP, an Ohio limited partnership,
(collectively the "Co-Obligors" and individually a "Co-Obligor"),
jointly and severally, and BANK OF AMERICA, N.A., successor to
NATIONSBANK, N.A., successor to NATIONSBANK OF TENNESSEE, N.A., a
national banking association ("Bank of America") and FIRST UNION
NATIONAL BANK, a national banking association ("First Union") (Bank of
America and First Union being individually referred to as a "Lender"
and collectively referred to as the "Lenders") and BANK OF AMERICA,
N.A., successor to NATIONSBANK, N.A., successor to NATIONSBANK OF
TENNESSEE, N.A., a national banking association, as administrative
agent for the Lenders (in such capacity the "Agent").
W I T N E S S E T H
WHEREAS, on September 24, 1998, the Borrower, the Co-Obligors,
Bank of America and First Union entered into that certain Loan
Agreement, which was amended by a First Amendment to Loan Agreement
entered into the 28th day of April , 1999, to be effective March 24,
1999, and a Second Amendment to Loan Agreement dated August 31, 1999,
which was amended by a Third Amendment to Loan Agreement dated November
12, 1999, which was amended by a Fourth Amendment to Loan Agreement
dated December 3, 1999 (the "Loan Agreement"); and,
WHEREAS, Effective January 8, 2001 the Borrower, the Co-Obligors,
Bank of America and First Union entered into that certain Standstill
Agreement ("First Standstill Agreement"); and
WHEREAS, The First Standstill Agreement has expired and the
Borrower, the Co-Obligors, Bank of America and First Union wish to enter
into this Agreement to provide for the granting of additional collateral
to the Lenders and the extension of the standstill period to permit the
parties to attempt to negotiate a long-term forbearance agreement on
terms acceptable to all parties.
NOW, THEREFORE, as an inducement to cause Lenders to extend
the standstill period and for other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the parties agree as
follows:
1. Capitalized terms not defined herein shall have the meaning
contained in the Loan Agreement and, if not defined therein, in the
First Standstill Agreement.
2. To induce the Lenders to enter into this Agreement, Borrower
and Co-Obligors shall, concurrently with the mutual execution and
delivery of this Agreement, execute and deliver a first priority
mortgage on Borrower's and/or Co-Obligors' restaurant property located
in Troy, Michigan ("the Troy Mortgage") and an amendment to the Grand
Rapids Mortgage deleting the provision in the Grand Rapids Mortgage that
provided for the release of the Grand Rapids Mortgage upon payment of
Exhibit 10.1 - Pg. 1
the Grand Rapids Release Price. The provisions in the First Standstill
Agreement relating to the release of the Grand Rapids Mortgage are also
terminated. Upon execution of this Agreement, Borrower and Co-Obligors
shall also pay to Lenders $630,000.00 to be applied to outstanding
interest owed to Lenders and a modification fee of $50,000.00.
3. Lenders contend that Borrower and Co-Obligors are in
default under the Loan Agreement and Notes in the following respects
(collectively, the "Default"): (a) the failure to make payments of
principal and interest on the Notes from and after the installment due
on July 1, 2000 (except for payments associated with the First
Standstill Agreement of $4,085,052.92 received January 9, 2001,
$25,458.74 received January 11, 2001, and $339,488.34 received on
January 22, 2001, and the $630,000.00 payable in connection with this
Agreement); (b) the failure to comply with the financial covenants
contained in Sec. 36 of the Loan Agreement; (c) the Default by Borrower and
Co-Obligors under their Loan Agreement with CIT; and (d) Borrower's and
Co-Obligors' defaults under their subordinated 6 _ public bonds. In
consideration of the provisions of this Agreement, Lenders agree to
forbear from exercising rights against the Borrower and Co-Obligors as a
result of such Default until the date (the "Forbearance Date") which is
the first to occur of the following: a) May 25, 2001; b) the filing of
a petition under any Chapter of the Bankruptcy Code by or against
Borrower or any Co-Obligor; or c) a material breach by any Borrower or
Co-Obligor of any provision of this Agreement which is not cured within
ten (10) business days following Borrower's and Co-Obligors' receipt of
written notice thereof from Lenders; provided, however, in the event
Borrower and/or Co-Obligors cure the Default, Lenders shall have no
further right or remedy against Borrower whatsoever in connection with
or by reason by such Default. Notwithstanding the foregoing, this
forbearance shall not prohibit Lenders from re-advertising foreclosure
sale of Borrower and/or Co-Obligors' properties located in Davidson
County, Tennessee, so long as the sale is scheduled for May 30, 2001, or
later. Pending the Forbearance Date, the failure of Borrower and Co-
Obligors to make scheduled payments of principal and interest under the
Notes and other payments under the Loan Documents (other than the
payments provided for in Paragraph 7) shall not be a Default under this
Agreement. Notwithstanding anything to the contrary in this Agreement,
Lenders agree that any representation or warranty in the Loan Agreement
or any related document that is not true as of the date of this
Agreement and any covenant or other undertaking or obligation of which
the Borrower and/or Co-Obligors are in breach as of the mutual execution
and delivery of this Agreement or of which they would be in breach by
reason of matters existing on such date upon the giving of notice from
Lenders, the passage of time or both shall for purposes of this
Agreement be deemed one of the defaults comprising the Default (i.e., it
shall not be considered a default which would entitle Lenders to
exercise any right or remedy under the Loan Agreement or any related
document prior to the Forbearance Date).
4. (a) Borrower and Co-Obligors shall provide to Lenders the
following information during the term of this Agreement:
(i) Weekly reports of store operations;
(ii) Monthly accounts payable aging within
fifteen (15) days of the end of each month, starting
with the March 31, 2001, report;
Exhibit 10.1 - Pg. 2
(iii) A report as to the current status of
any defaults under agreements with any secured
creditors and a supplemental report in the future in
the event any default occurs. In addition, such report
will show the current balance owed to each secured
creditor and a general description of the collateral
securing this obligation;
(iv) Copies of any executed letters of intent,
commitment letters or contracts signed by the Borrower
and/or Co-Obligors from and after February 1, 2001, for
the sale, sale-leaseback, disposition or refinance of
any real property or any material personal property of
any Borrower and/or Co-Obligor, provided, however, that
Lenders shall execute a confidentiality agreement with
respect to the information to be provided under this
subparagraph if requested by any third party;
(v) Monthly and year-to-date unaudited financial
statements consisting of an income statement, balance
sheet and cash flow statement for the Borrower and Co-
Obligors within fifteen (15) days of the end of each
month beginning with the March 31, 2001, statements;
(vi) Weekly cash flow reports showing changes in
cash position to be provided within a week of the close
of the prior week.
(b) Borrower and Co-Obligors shall provide to Lenders
the following information within two weeks of the execution
of this Agreement:
(i) Reports showing actual performance through
March 31, 2001 and projections for the balance of year
2001 showing store operations and company operations,
an operating plan for the remainder of calendar year
2001 including provisions relating to improving same
store performance and a list of all pending or proposed
real estate dispositions.
(ii) Title updates for the Grand Rapids, Troy and
Vandalia stores showing the mortgages granted to
Lenders to be first mortgages subject only to current
year's real property taxes and encroachments that do
not affect the use and operation of the real property
as a restaurant.
(c) Borrower and Co-Obligors shall allow Lenders to
conduct an appraisal on the Cool Springs, Tennessee facility promptly
following execution of this Agreement.
5. Borrower and Co-Obligors have advised Lenders that they
intend to enter into a transaction involving the sale-leaseback of
the Troy and Grand Rapids, Michigan stores and the sale of the
Palm Harbor, Florida store (the "Dorsey Transaction"). The Dorsey
transaction is projected to gross Borrower and Co-Obligors at
least $4,600,000.00, subject to reductions for customary closing
costs excluding any broker's fees. The Dorsey Transaction is
presently scheduled to close on or before May 25, 2001. The
Borrower and Co-Obligors make no representations or warranties
about the closing of the Dorsey Transaction or the proceeds to be
Exhibit 10.1 - Pg. 3
realized in connection with the Dorsey Transaction and they shall
not be in default hereunder if the Dorsey Transaction does not
close or the proceeds generated from the Dorsey Transaction are
less than estimated. Lenders agree that Lenders will release and
fully reconvey their liens on the Troy, Grand Rapids and Palm
Harbor stores (collectively, the "Release Properties")
concurrently with the occurrence of the following:
(a) A payment by wire transfer of $2,900,000.00 (the
"Release Payment") from the closing proceeds of the Dorsey
Transaction; and
(b) Borrower's agreement (as provided herein) to use
up to the approximately $1,700,000.00 of remaining proceeds
from the closing of the Dorsey Transaction to acquire a
restaurant located in Cool Springs, Tennessee which is
currently leased and operated by Borrower (the "Cool Springs
Store"). Upon a closing of the acquisition of the Cool
Springs Store, Lenders will receive a first deed of trust in
substantially the same form that encumbers other property in
Tennessee encumbering the fee interest in the real property
comprising part of the Cool Springs Store (the "Cool Springs
Real Property") to secure all obligations owed to Lenders,
together with a lender's policy of title insurance (at
Borrower's expense) in an amount equal to the greater of the
purchase price paid by Borrower for the Cool Springs Store or
the appraised value thereof. The lender's policy will insure
the Lenders as having a first priority deed of trust on the
Cool Springs Real Property, subject only to the current
year's real property taxes and easements and encumbrances
that do not materially interfere with the site's use as a
restaurant. In the event that the acquisition of the Cool
Springs Store does not close concurrently with the closing of
the Dorsey Transaction, the Lenders shall hold the
approximately $1,700,000.00 as additional collateral in an
interest bearing account (such amount, together with all
interest from time to time earned thereon is referred to
herein as the "Cool Springs Purchase Money"). Provided that
the Cool Springs Store acquisition occurs prior to the Cool
Springs Outside Date (as defined in subparagraph (c) below)
and the other conditions set forth in this subparagraph (b)
are satisfied, Lenders shall fund the Cool Springs Purchase
Money directly to the title company conducting the closing of
the acquisition of the Cool Springs Store solely for
Borrower's use and account in acquiring the Cool Springs
Store. The deed of trust will be recorded immediately
following the deed conveying the Cool Springs Store to
Borrower.
(c) As provided above, Lenders shall release and
fully reconvey their liens on the Release Properties
concurrently with their receipt of the Release Payment and
in reliance upon Borrower's agreement set forth in Paragraph
5(b) above, but only if the Lenders receive the Release
Payment on or before August 27, 2001 (the "Dorsey Outside
Date"). Further, the Lenders' obligation to fund the Cool
Springs Purchase Money for use in connection with Borrower's
acquisition of the Cool Springs Store is conditioned upon
such acquisition occurring by no later than August 27, 2001
(the "Cool Springs Outside Date"). Notwithstanding
anything to the contrary herein, so long as the express
conditions to the Lenders' obligations under Paragraph 5(a)
Exhibit 10.1 - Pg. 4
and (b) are satisfied by the respective outside dates
applicable thereto, Lenders' obligation to perform their
covenants and obligations in favor of Borrower under this
Paragraph 5 shall be unaffected by and shall survive: (a)
any termination of this Agreement; (b) any default by
Borrower and/or Co-Obligors under this Agreement; and/or (c)
any filing of bankruptcy cases by or against Borrower and/or
any Co-Obligor. If, however, any of the express conditions
precedent to Lenders' obligation to release and fully
reconvey the liens on the Release Properties is not
satisfied by the Dorsey Outside Date, then (a) Lenders' and
Borrower's respective agreements under Paragraphs 5(a) and
(b) above shall terminate and be of no further force or
effect. In the event that the Dorsey Transaction occurs by
the Dorsey Outside Date, but the Cool Springs Store
acquisition does not close by the Cool Springs Outside Date,
then Lenders' obligation to fund the Cool Springs Purchase
Money for purchase of the Cool Springs Store or to allow the
funds to be used for any other purpose shall lapse and be of
no further force or effect, whereupon Lenders shall have the
immediate right and obligation to cause the Cool Springs
Purchase Money to be credited and applied to payment of the
obligations in the manner provided in the Loan Agreement.
(d) It is possible that the Dorsey Transaction and/or
the acquisition of the Cool Springs Store may not be
consummated prior to the commencement of a bankruptcy case
involving the Borrower and/or Co-Obligors. In such event,
Lenders agree that, subject to the outside dates contained in
Paragraph 5(c), (i) the Cool Springs Purchase Money will
constitute cash collateral of the Lenders pursuant to Section
363 of the United States Bankruptcy Code; (ii) Lenders'
obligation to release the Cool Springs Purchase Money
pursuant to the terms of this paragraph shall not be a
contract to provide financial accommodations under Section
365 of the Bankruptcy Code; (iii) compliance by the Borrower
and Co-Obligors with the provisions of this Paragraph 5,
including the provision of a first deed of trust encumbering
the Cool Springs Store shall constitute adequate protection
for the release of the Release Properties and use of the Cool
Springs Purchase Money to purchase the Cool Springs Store;
(iv) the Borrower and/or Co-Obligors shall be entitled to a
turnover order from the Bankruptcy Court directing the money
to be paid to the title company, if the Borrower and Co-
Obligors comply with the provisions of this Paragraph 5 and
Lenders do not release the Cool Springs Purchase Money in
accordance with the provisions of Paragraph 5(c) above; (v)
the Lenders will not oppose consummation of the Dorsey
Transaction on or before the Dorsey Outside Date; and (vi)
the Lenders will not oppose the acquisition of the Cool
Springs Store on or before the Cool Springs Outside Date.
(e) Any proceeds from the Dorsey Transaction remaining
after the purchase of the Cool Springs Store shall be paid to
Lenders.
6. Borrower and Co-Obligors agree to allow Lenders or their
agents reasonable access to Borrower's and Co-Obligors' books and
records and to the restaurants. Access to the restaurants will be for
Exhibit 10.1 - Pg. 5
the purposes of inspecting collateral and/or performing appraisals.
Access to the restaurants will be upon reasonable notice to the Borrower
and Co-Obligors and scheduled and conducted in such a way as to not
disrupt the business or operations of the restaurants.
7. Borrower and Co-Obligors agree to promptly reimburse Lenders
for all un-reimbursed legal fees and expenses recoverable by Lenders
under the terms of the Loan Agreement as of the date of this Agreement
in an aggregate amount not to exceed Twelve Thousand Dollars
($12,000.00).
8. This Agreement shall be construed in accordance with the
laws of the State of Tennessee. This Agreement shall be deemed to be
an amendment to the Loan Agreement, the terms of which, as amended, are
ratified and affirmed by the parties effective the date hereof,
provided, however, that Borrower and Co-Obligors are not (i) ratifying
or affirming any representations or warranties made in the Loan
Agreement which are not true as of the date of this Agreement; or (ii)
agreeing to perform any covenant, undertaking or other obligation under
the Loan Agreement of which the Borrower and/or Co-Obligors are in
default as of the mutual execution and delivery of this Agreement or of
which they would be in default by reason of matters existing on such
date upon the giving of notice by Lenders, the passage of time or both.
9. This Agreement may be signed in multiple counterparts and
will be effective when each party has signed a counterpart.
IN WITNESS WHEREOF, the parties have executed this Agreement
to be effective the day and year first above written.
LENDERS:
BANK OF AMERICA, N.A., successor to
NATIONSBANK, N.A., successor to
NATIONSBANK OF TENNESSEE, N.A.
By: /s/Roger O. Gore
----------------------------------
Title: Senior Vice President
FIRST UNION NATIONAL BANK
By: /s/Marinus Otte
----------------------------------
Title: Senior Vice President
Exhibit 10.1 - Pg. 6
AGENT:
BANK OF AMERICA, N.A., successor to
NATIONSBANK, N.A., successor to
NATIONSBANK OF TENNESSEE, N.A.
By: /s/Roger O. Gore
----------------------------------
Title: Senior Vice President
BORROWER:
COOKER RESTAURANT CORPORATION,
an Ohio corporation
By: /s/Henry R. Hillenmeyer
----------------------------------
Title: Chairman and Chief
Executive Officer
CO-OBLIGORS:
CGR MANAGEMENT CORPORATION,
a Florida corporation
By: /s/Henry R. Hillenmeyer
----------------------------------
Title: Chairman and Chief
Executive Officer
FLORIDA COOKER LP, INC.,
a Florida corporation
By: /s/Henry R. Hillenmeyer
----------------------------------
Title: Chairman and Chief
Executive Officer
Exhibit 10.1 - Pg. 7
SOUTHERN COOKER LIMITED
PARTNERSHIP, an Ohio limited
partnership
By: COOKER RESTAURANT
CORPORATION, General Partner
By: /s/Henry R. Hillenmeyer
----------------------------------
Title: Chairman and Chief
Executive Officer
Exhibit 10.1 - Pg. 8