SECOND AMENDMENT TO FINANCING AGREEMENT
Exhibit 10.22
SECOND AMENDMENT TO FINANCING AGREEMENT
THIS SECOND AMENDMENT TO FINANCING AGREEMENT (this “Amendment”) is entered into on
this ___day of June, 2007, to be effective as of the date hereof (the “Effective Date”),
by and between PIZZA INN, INC., a Missouri corporation with a principal place of business at 0000
Xxxxx Xxxxxxx, Xxx Xxxxxx, Xxxxx 00000 (herein the “Company”), and THE CIT GROUP/COMMERCIAL
SERVICES, INC., a New York corporation (the “Lender”).
RECITALS
A. The Company and the Lender have entered into that certain Financing Agreement, dated as of
January 23, 2007 (as amended from time to time, the “Financing Agreement”).
B. The Company has requested (i) that Lender amend the Financing Agreement to permit Company
to repurchase Company stock in an amount up to $3,000,000 (the “Stock Repurchase”), (ii)
that Lender amend the Financing Agreement to waive the requirement that cash dividends or cash
distributions may be allowed as a Permitted Distribution only as long as they are not made until
the first anniversary of the Closing Date, and (iii) that Lender amend the Financing Agreement to
increase the current aggregate Capital Expenditure limit of $750,000 per fiscal year pursuant to
Section 7.3(b) of the Financing Agreement to $3,000,000.
C. Pursuant to the terms and conditions of this Amendment, Company and Lender are willing to
amend the Financing Agreement as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending
to be legally bound, agree as follows:
AGREEMENT
ARTICLE I
Definitions
Definitions
1.01 Capitalized terms used in this Amendment are defined in the Financing Agreement, as
amended hereby, unless otherwise stated.
ARTICLE II
Amendments and Other Agreements
Amendments and Other Agreements
2.01 Amendment to Section 1.1 of the Financing Agreement; Amendment to Definition of
Permitted Distributions. Effective as of the Effective Date, Section 1.1 of the
Financing Agreement is hereby amended by amending and restating the definition of “Permitted
Distributions” to read as follows:
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“Permitted Distributions shall mean:
(a) dividends from a wholly-owned subsidiary of the Company to the Company;
(b) dividends payable solely in stock or other equity interests of the Company;
(c) cash distributions or cash dividends to the Company’s shareholders in the
ordinary course of the Company’s business, provided that (i)
immediately prior to and after giving effect to such cash distribution or cash
dividend no Event of Default shall have occurred or would result therefrom and (ii)
immediately prior to and after giving effect to such cash distribution or cash
dividend, Net Availability is at least $1,000,000; and
(d) any repurchase by the Company of outstanding equity interests of the
Company, provided that (i) immediately prior to and after giving
effect to such repurchase, no Event of Default shall have occurred or would result
therefrom, (ii) immediately prior to and after giving effect to such repurchase, the
Company shall be in pro forma compliance with the financial covenants as set forth
in Section 7.3 of this Financing Agreement and (iii) immediately prior to
and after giving effect to such repurchase, Net Availability is at least $1,000,000;
provided further, that the aggregate amount of all distributions
and/or repurchases made pursuant to subsection (c) and subsection (d) hereof shall
not exceed $3,000,000.”
2.02 Amendment Section 7.3(b) of the Financing Agreement. Effective as of the
Effective Date, Section 7.3(b) of the Financing Agreement is hereby amended by deleting
“$750,000” and substituting therewith “$3,000,000”.
ARTICLE III
Conditions Precedent
Conditions Precedent
3.01 Conditions to Effectiveness. The effectiveness of this Amendment is subject to
the satisfaction of the following conditions precedent in a manner satisfactory to Lender, unless
specifically waived in writing by Lender:
(a) Lender shall have received each of the following, each in form and substance
satisfactory to Lender, in its sole discretion, and, where applicable, each duly executed by
each party thereto, other than Lender:
(i) This Amendment, duly executed by the Company; and
(ii) All other documents Lender may request with respect to any matter relevant
to this Amendment or the transactions contemplated hereby.
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(b) The representations and warranties contained herein and in the Financing Agreement
and the other documents executed in connection with the Financing
Agreement (herein referred to as “Loan Documents”), as each is amended hereby,
shall be true and correct as of the date hereof, as if made on the date hereof.
(c) No Default or Event of Default shall have occurred and be continuing, unless such
Default or Event of Default has been otherwise specifically waived in writing by Lender.
(d) All organizational proceedings taken in connection with the transactions
contemplated by this Amendment and all documents, instruments and other legal matters
incident thereto shall be satisfactory to Lender.
ARTICLE IV
Ratifications, Representations and Warranties
Ratifications, Representations and Warranties
4.01 Ratifications. The terms and provisions set forth in this Amendment shall modify
and supersede all inconsistent terms and provisions set forth in the Financing Agreement and the
other Loan Documents, and, except as expressly modified and superseded by this Amendment, the terms
and provisions of the Financing Agreement and the other Loan Documents are ratified and confirmed
and shall continue in full force and effect. Company and Lender agree that the Financing Agreement
and the other Loan Documents, as amended hereby, shall continue to be legal, valid, binding and
enforceable in accordance with their respective terms.
4.02 Representations and Warranties. The Company hereby represents and warrants to
Lender that (a) the execution, delivery and performance of this Amendment and any and all other
Loan Documents executed and/or delivered in connection herewith have been authorized by all
requisite organizational action on the part of the Company and will not violate the Articles of
Incorporation or Bylaws of the Company; (b) the representations and warranties contained in the
Financing Agreement, as amended hereby, and each other Loan Document are true and correct on and as
of the date hereof and on and as of the date of execution hereof as though made on and as of each
such date; (c) no Default or Event of Default under the Financing Agreement, as amended hereby, has
occurred and is continuing, unless such Default or Event of Default has been specifically waived in
writing by Lender; (d) the Company is in full compliance with all covenants and agreements
contained in the Financing Agreement and the other Loan Documents, as amended hereby; and (e) the
Company has not amended its Articles of Incorporation or its Bylaws since the date of the Financing
Agreement.
ARTICLE V
Miscellaneous Provisions
Miscellaneous Provisions
5.01 Survival of Representations and Warranties. All representations and warranties
made in the Financing Agreement, or any other Loan Document, including, without limitation, any
document furnished in connection with this Amendment, shall survive the execution and delivery of
this Amendment and the other Loan Documents, and no investigation by Lender or any closing shall
affect the representations and warranties or the right of Lender to rely upon them.
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5.02 Reference to Financing Agreement. Each of the Financing Agreement and the other
Loan Documents, and any and all other Loan Documents, documents or instruments now or hereafter
executed and delivered pursuant to the terms hereof or pursuant to the terms of the Financing
Agreement, as amended hereby, are hereby amended so that any reference in the Financing Agreement
and such other Loan Documents to the Financing Agreement shall mean a reference to the Financing
Agreement, as amended hereby.
5.03 Expenses of Lender. As provided in the Financing Agreement, the Company agrees
to pay on demand all costs and expenses incurred by Lender in connection with the preparation,
negotiation, and execution of this Amendment and any and all amendments, modifications, and
supplements thereto, including, without limitation, the costs and fees of Lender’s legal counsel,
and all costs and expenses incurred by Lender in connection with the enforcement or preservation of
any rights under the Financing Agreement, as amended hereby, or any other Loan Documents,
including, without, limitation, the costs and fees of Lender’s legal counsel.
5.04 Severability. Any provision of this Amendment held by a court of competent
jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this
Amendment and the effect thereof shall be confined to the provision so held to be invalid or
unenforceable.
5.05 Successors and Assigns. This Amendment is binding upon and shall inure to the
benefit of Lender and Company and their respective successors and assigns, except that Company may
neither assign nor transfer any of its rights or obligations hereunder without the prior written
consent of Lender.
5.06 Counterparts. This Amendment may be executed in one or more counterparts, each
of which when so executed shall be deemed to be an original, but all of which when taken together
shall constitute one and the same instrument.
5.07 Effect of Waiver. No consent or waiver, express or implied, by Lender to or for
any breach of or deviation from any covenant or condition by the Company shall be deemed a consent
to or waiver of any other breach of the same or any other covenant, condition or duty.
5.08 Headings. The headings, captions, and arrangements used in this Amendment are
for convenience only and shall not affect the interpretation of this Amendment.
5.09 Applicable Law. THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED PURSUANT
HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN AND SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
5.10 Final Agreement. THE FINANCING AGREEMENT AND THE OTHER LOAN DOCUMENTS, EACH AS
AMENDED HEREBY, REPRESENT THE ENTIRE
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EXPRESSION OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER
HEREOF ON THE DATE THIS AMENDMENT IS EXECUTED. THE FINANCING AGREEMENT
AND THE OTHER LOAN DOCUMENTS, AS AMENDED HEREBY, MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES. NO MODIFICATION, RESCISSION, WAIVER, RELEASE OR AMENDMENT OF ANY
PROVISION OF THIS AMENDMENT SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED BY THE COMPANY AND
LENDER.
5.11 Release. COMPANY HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE, COUNTERCLAIM,
OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE ASSERTED TO
REDUCE OR ELIMINATE ALL OR ANY PART OF ITS LIABILITY TO REPAY THE “OBLIGATIONS” OR TO SEEK
AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM LENDER. COMPANY HEREBY VOLUNTARILY AND
KNOWINGLY RELEASES AND FOREVER DISCHARGES LENDER, ITS PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS
AND ASSIGNS, FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS,
EXPENSES, AND LIABILITIES WHATSOEVER, WHETHER FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN
EQUITY, KNOWN IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS EXECUTED, WHICH THE
COMPANY MAY NOW OR HEREAFTER HAVE AGAINST LENDER, ITS PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS
AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT,
VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING FROM ANY “LOANS”, INCLUDING, WITHOUT
LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN
EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE
FINANCING AGREEMENT OR OTHER LOAN DOCUMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS AMENDMENT.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK].
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IN WITNESS WHEREOF, this Amendment has been executed and is effective as of the date first
written above.
| COMPANY: PIZZA INN, INC. |
|||||
| By: | /s/ Xxxxxxx X. Xxxxxxxx | ||||
| Name: | Xxxxxxx X. Xxxxxxxx | ||||
| Title: | CFO | ||||
| LENDER: THE CIT GROUP/COMMERCIAL SERVICES, INC. |
|||||
| By: | /s/ Xxxxxxx Xxxxxxxx | ||||
| Name: | Xxxxxxx Xxxxxxxx | ||||
| Title: | Vice President | ||||
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