SECOND AMENDMENT TO LOAN AGREEMENT
THIS SECOND AMENDMENT TO LOAN AGREEMENT (this "Amendment") executed
July 28, 1997 is among ROCK BOTTOM RESTAURANTS, INC, a Delaware corporation
("Borrower"), the LENDERS (as such term is defined in the Loan Agreement
described below and amended hereby) and NORWEST BANK COLORADO, NATIONAL
ASSOCIATION, a national banking association, as agent for the Lenders ("Agent").
RECITALS
A. Borrower, the Lenders and the Agent are parties to the Loan
Agreement, dated as of July 2, 1996, and amended by the Amendment to Loan
Agreement dated February 24, 1997 (as amended, and as it may hereafter be
amended, restated or supplemented from time to time, the "Loan Agreement"),
providing for a revolving line of credit Loan from the Lenders to the Borrower
in the amended maximum amount of $25,000,000. Capitalized terms that are used
but not defined herein have the meanings set forth in the Loan Agreement.
B. Borrower has requested and the Lenders have agreed to increase the
Maximum Loan Amount to $40,000,000, subject to the terms and conditions set
forth herein.
C. Additionally, the parties desire to add SunTrust Bank, Central
Florida, N.A.("SunTrust") and UMB Bank, N.A.("UMB") as additional Lenders to the
definition of Lenders, and to make certain other changes in connection
therewith.
D. The parties desire to enter into this Amendment to reflect the
changes described above.
AGREEMENT
IN CONSIDERATION of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Borrower, the Lenders and the Agent agree as follows:
1. Amendments to Loan Agreement.
a. The following definitions in Section 1.1 of the Loan
Agreement are hereby amended and restated in their entirety to read as
follows:
i. "Base Rate" means a per-annum interest
rate equal to the Prime Rate plus a percentage ("Base
Rate Spread"), which shall be adjusted on the first
day of each Quarter and determined by reference to
the following table based on Borrower's ratio of
Funded Debt to Operating Cash Flow for the applicable
Determination Period:
Ratio of Funded Debt to
Operating Cash Flow Base Rate Spread
Less than 1.50 to 1 0.00%
1.50 to 1 up to and
including 2.0 to 1 0.25%
Greater than 2.0 to 1 0.50%
The Base Rate shall be adjustable the day of any
change in the Prime Rate, regardless of whether
Borrower has notice of such change. The Base Rate
Spread shall be automatically adjusted by either
increasing or decreasing to another percentage, as
appropriate, on the first day of each Quarter based
on the applicable Determination Period. For purposes
of determining the Base Rate Spread, the Ratio of
Funded Debt to Operating Cash Flow for the
Determination Period shall be based on the
calculations set forth in the Compliance Certificate,
subject to confirmation and adjustment by the Agent.
ii. "Consolidated" means the consolidation
of any Person, in accordance with GAAP, with its
properly consolidated Subsidiaries. References herein
to Borrower's financial statements, financial
position, financial condition, liabilities, etc.
refer to the consolidated financial statements,
position, condition, liabilities, etc. of Borrower
and its properly consolidated Subsidiaries. For the
purpose of defining Consolidated, and for no other
purpose, Big River shall be included in the
definition of Consolidated Subsidiaries.
iii. "Lenders" means Norwest Bank Colorado,
National Association ("Norwest"), First Security
Bank, N.A., a national banking association (f/k/a
First Security Bank of Idaho, N.A.) ("First
Security"), U.S. Bank (f/k/a U.S. Bank of Idaho)
("U.S. Bank"), SunTrust Bank, Central Florida, N.A.,
a national banking association ("SunTrust"), and UMB
Bank, N.A., a national banking association ("UMB"),
together with any other party that acquires an
interest in the Loan and is designated as a Lender
pursuant to an amendment to this Agreement. Further,
any reference to West One in the Loan Agreement or
any other Loan Document shall hereinafter refer to
U.S.
Bank.
iv. "LIBOR Rate" means, with respect to each
Interest Period, a per-annum rate equal to the
Eurodollar Rate (as defined in the Notes), plus a
percentage ("LIBOR Spread"), which shall be adjusted
on the first day of each Quarter and determined by
reference to the following table based on Borrower's
ratio of Funded Debt to Operating Cash Flow for the
Applicable Determination Period:
Ratio of Funded Debt to
Operating Cash Flow LIBOR Spread
Less than 1.50 to 1 1.50%
1.50 to one up to and
including 2.0 to one 2.00%
Greater than 2.0 to one 2.50%
The LIBOR Spread shall be automatically adjusted by
either increasing or decreasing to another
percentage, as appropriate, on the first day of each
Quarter based on the applicable Determination Period.
For purposes of determining the LIBOR Spread, the
Ratio of Funded Debt to Operating Cash Flow for the
Determination Period shall be based on the
calculations set forth in the Compliance Certificate,
subject to confirmation and adjustment by the Agent.
v. "Maturity Date" means the earlier of (i)
acceleration, or (ii) July 28, 1999, subject to a one
time extension in accordance with the provisions of
Section 2.1(i) below.
vi. "Maximum Loan Amount" means $40,000,000.
vii. "Notes" means the promissory notes made
by Borrower and evidencing the Loan, as they may be
amended, restated, extended or supplemented from time
to time and all notes given in substitution therefor,
including, without limitation: (a) the Promissory
Note from Borrower payable to Norwest dated July 2,
1996, as amended by the Amendment to Promissory Note
dated February 24, 1997, and as further amended by
the Second Amendment to Promissory Note dated July
28, 1997, in the amended principal amount of
$10,000,000, evidencing Norwest's Percentage Interest
of the Loan, (b) the Promissory Note from Borrower
payable to First Security Dated July 2, 1996, as
amended by the Amendment to Promissory Note dated
February 24, 1997, and as further amended by the
Second Amendment to Promissory Noted dated July 28,
1997 in the amended amount of $10,000,000, evidencing
First Security's Percentage Interest of the Loan, (c)
the Promissory Note from Borrower payable to U.S.
Bank dated July 2, 1996 as amended by the Amendment
to Promissory Note dated February 24, 1997 and
further amended by the Second Amendment to Promissory
Noted dated July 28, 1997 in the amended principal
amount of $10,000,000, evidencing U.S. Bank's
Percentage Interest of the Loan, (d) the Promissory
Note from Borrower payable to SunTrust dated July 28,
1997 in the principal amount of $5,000,000,
evidencing SunTrust's Percentage Interest of the
Loan, and (e) the Promissory Note from Borrower
payable to UMB dated July 28, 1997 in the principal
amount of $5,000,000, evidencing UMB's Percentage
Interest of the Loan and any promissory note give to
any other Person that becomes a Lender after the date
hereof, together with any and all renewals,
extensions, amendments and changes of, or
substitutions for such notes.
viii. "Percentage Interest" means, with
respect to each of the Lenders, subject to the
provisions of Section 10.10 below, the percentage
interest set forth below:
Lender Percentage Interest
Norwest 25%
First Security 25%
U.S. Bank 25%
SunTrust 12.50%
UMB 12.50%
b. Section 1.1 of the Loan Agreement is further amended by
deleting the definitions for "Revolving Loan Period" and "Term Loan
Period" in their entirety. Additionally, all references to "Revolving
Loan Period" or "Term Loan Period" in the Loan Agreement are hereby
deleted.
c. Section 1.1 of the Loan Agreement is further amended by
adding a definition for "Determination Period" to read as follows:
"Determination Period" means, at any given time, the four
consecutive Fiscal Quarters ending immediately prior to the
Fiscal Quarter immediately preceding the time at which the
subject calculation or determination and adjustment is made.
For example, the Determination Period for an adjustment in the
LIBOR Rate to be effective on October 1, 1997, is the
four-Fiscal Quarter period commencing on or about July 1, 1996
and ending on or about June 30, 1997.
d. Section 2.1(a) of the Loan Agreement is amended and
restated in its entirety to read as follows:
a. Subject to the terms and conditions of this
Agreement (including without limitation, the
conditions stated in Section 3.1 below), each Lender
severally but not jointly, agrees to make future
Advances to Borrower from time to time, in an
aggregate principal amount not to exceed its
Percentage Interest of the Loan; on the condition
that at no time shall the outstanding amount of the
Loan ever exceed the Maximum Loan Amount. So long as
an Event of Default or an Unmatured Event of Default
has not occurred, Borrower may borrow, repay and
reborrow under the Notes in accordance with the terms
of this Agreement.
e. Section 2.1(f)(ii) of the Loan Agreement is amended and
restated in its entirety to read as follows:
(ii) The entire principal balance of the Loan
together with all accrued but unpaid interest thereon
and all other amounts due the Lenders pursuant to the
Loan Documents are due and payable in full on the
Maturity Date.
f. Section 2.1(h) of the Loan Agreement is hereby deleted.
g. Section 2.1(i) of the Loan Agreement is hereby amended and
restated in its entirety to read as follows:
(i) Extension of Maturity Date. Upon request of the
Borrower, which request shall be made no less than 90
days and no more than 150 days prior to the Maturity
Date, the Lenders may, but shall be under no
obligation to, extend the Maturity Date by one year
(referred to herein as an "Extension"). An Extension
shall be in the sole and absolute discretion of the
Lenders and shall require the unanimous approval of
all Lenders. Without limiting the generality of the
foregoing, an Extension shall be subject to the
following terms and conditions and such other terms
and conditions as the Agent may reasonably require:
(i) Borrower shall provide Agent a written notice
requesting the Extension; (ii) there shall not exist,
either on the date the Extension is requested by the
Borrower or on the date the Extension becomes
effective any Event of Default or Unmatured Event of
Default; (iii) all of the representations and
warranties contained in the Loan Documents shall be
true and correct on the date the Borrower requests
the Extension and on the date the Extension becomes
effective; (iv) there has been no significant
material adverse change in the financial condition of
Borrower; (v) Borrower shall execute all documents
reasonably requested by Agent in connection with the
Extension; (vi) Borrower shall pay to Agent, for the
benefit of each Lender in accordance with its
Percentage Interest, concurrent with the Extension,
an extension fee of $40,000 together with all
reasonable fees and expenses incurred by Agent in
connection with the Extension, and (vii) the Agent
and the Lenders shall have agreed in writing to the
Extension. The foregoing list of conditions to the
Extension is illustrative only and shall not in any
way restrict the right of the Lenders to impose
additional conditions nor shall the Lenders be under
any obligation to agree to the Extension even if all
of the foregoing conditions have been complied with.
Borrower specifically acknowledges and agrees that
the Extension shall be in the sole and absolute
discretion of the Lenders and that the Lenders are
under no obligation to grant the Extension. In the
event that the Lenders agree to the Extension, the
Maturity Date shall each be extended by a period of
one year.
g. Section 2.4 of the Loan Agreement is hereby amended by
deleting the phrase "During the Revolving Loan Period" in the first
sentence of the Section.
h. Sections 6.11(a), (b) and (c) are hereby amended and
restated in their entirety to read as follows:
(a) Funded Debt to Operating Cash Flow. Borrower
shall maintain a ratio of Funded Debt to Operating
Cash Flow (determined on a Consolidated basis) of
less than or equal to 2.5 to 1, calculated at the end
of each Fiscal Quarter and based on such Fiscal
Quarter and the three immediately preceding Fiscal
Quarters.
(b) Fixed Charge Coverage Ratio. Borrower shall
maintain a Fixed Charge Coverage Ratio (determined on
a Consolidated basis) of not less than 2.25 to 1 for
the period in which the applicable Fiscal Quarter
ends, calculated at the end of each Fiscal Quarter
and based on such Fiscal Quarter and the three
immediately preceding Fiscal Quarters.
(c) Total Liabilities to Tangible Net Worth. The
ratio of Borrower's Total Liabilities to Tangible Net
Worth calculated at the end of each Fiscal Quarter
shall not exceed .75 to 1 at any time during the term
of the Loan.
i. Notices. The address for notice to Lenders pursuant to
Section 12.2 of the Loan Agreement is hereby amended to include the
following additional addresses:
If to SunTrust to:
SunTrust Bank, Central Florida, N.A.
200 So. Orange Avenue, O-1043
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxxx
Facsimile: (000) 000-0000
If to UMB to:
UMB Bank, N.A.
0000 Xxxxx Xxxxxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxx
Facsimile: 000-000-0000
j. Exhibit D to the Loan Agreement is hereby replaced with
Exhibit D attached hereto and Exhibit D attached hereto is substituted
in place of Exhibit D to the Loan Agreement as locations where the
Collateral is located. Borrower hereby represents, warrants and
certifies that (a) each Subsidiary set forth on Exhibit D (as amended
by this Amendment) conducts operations only at the locations set forth
below such Subsidiary's name on Exhibit D (as amended by this
Amendment) and Borrower or such Subsidiary own all of the Collateral
located at such location, (b) the Collateral is not located in any
location, and neither Borrower nor any Subsidiary conducts any
operations in any location other than those listed on Exhibit D of the
Loan Agreement (as amended by this Amendment) and (c) Borrower leases
and does not own, directly or indirectly, any of the locations
described on Exhibit D other than the Fee Properties.
k. Exhibit F to the Loan Agreement is hereby replaced with
Exhibit F attached hereto and Exhibit F attached hereto is substituted
in place of Exhibit F to the Loan Agreement.
2. Additional Lenders.
a. From and after the date hereof, SunTrust and UMB shall be
Lenders pursuant to the Loan Documents, shall be entitled to all of the
rights and privileges granted to Lenders and agree to perform and abide
by all the terms and conditions of the Loan Documents applicable to
Lenders.
b. On the date of the execution hereof, each of SunTrust and
UMB and, to the extent necessary, First Security and U.S. Bank, shall
wire transfer to Agent their Percentage Interest of the entire
outstanding amount of the Loan. Upon receipt of such amounts from
SunTrust and UMB, Norwest shall wire to each of the other Lenders the
payment required in order to cause each Lender to have advanced and
outstanding its Percentage Interest of the entire outstanding amount of
the Loan.
3. Conditions Precedent. All of Lenders' obligations under this Amendment are
conditioned upon and subject to satisfaction of all of the following conditions
precedent in a manner acceptable to Agent on or before July 29, 1997:
a. Borrower shall pay to Agent, as agent for Lenders,
a restructure fee in the amount of $40,000. Such restructure fee shall
be distributed between the Lenders in the following manner: Norwest:
$20,000, First Security: $5,000, U.S. Bank: $5,000, SunTrust: $5,000,
and UMB: $5,000.
b. Borrower or the Subsidiaries, as the case may be, shall
have executed and delivered this Amendment, and any and all amendments
to the Note and the other Loan Documents or any other documents
required by Lenders, to give effect to the amendments effected by this
Amendment, including, without limitation, those documents set forth on
Schedule 1 attached hereto and incorporated herein by this reference;
c. Borrower shall have delivered to Agent, as agent for the
Lenders, an opinion of counsel with respect to the loan modifications
effected by this Amendment and the amendments executed concurrent
herewith, which opinion must be acceptable in form and substance to
Agent, in Agent's reasonable discretion;
d. Borrower shall pay all Loan Expenses incurred by the Agent
in connection with the transactions contemplated by this Amendment; and
e. As of the date of this Amendment, there was and is no Event
of Default or Unmatured Event of Default.
f. Borrower shall cause Xxxxxxx Title Company or North
American Title Company (as the case may be) to deliver to Lender
endorsements to each of the title insurance policies issued in
connection with the original closing of the Loan and the amendment of
the Loan in February, 1997 (other than for the property located in the
State of Texas), which title insurance endorsements shall insure that
there has been no adverse change in the status of title to any real
property securing the Loan (other than for the property located in the
State of Texas) since February 24, 1997, and shall insure that the
Deeds of Trust, as modified by the Amendments to Deeds of Trust being
delivered simultaneously herewith, remain in effect as first priority
liens against each of the parcels of real property encumbered by such
Deeds of Trust (subject to Permitted Liens).
4. Further Assurances. Borrower shall execute all documents and instruments and
take all actions or cause any other party to execute all documents and
instruments and take all actions as the Agent may reasonably require to effect
the transactions contemplated by this Amendment.
5. Representations and Warranties. Borrower hereby certifies to the Lenders that
as of the date of this Amendment (taking into consideration the transactions
contemplated by this Amendment), all of Borrower's representations and
warranties contained in the Loan Documents are true, accurate and complete in
all material respects, and no Event of Default or Unmatured Event of Default has
occurred under any Loan Document (as amended concurrent herewith). Without
limiting the generality of the foregoing, Borrower represents and warrants to
the Lenders that the execution and delivery of this Amendment has been
authorized by all necessary action on the part of Borrower, that each person
executing this Amendment on behalf of Borrower is duly authorized to do so, and
that this Amendment constitutes the legal, valid, binding and enforceable
obligation of Borrower (subject to the same limitations of enforceability as set
forth in the Loan Agreement).
6. Loan Documents.
a. The Lenders, the Agent, and the Borrower agree that all of
the Loan Documents shall be amended to reflect the amendments set forth
herein.
b. All references in any document to the Loan Agreement
hereafter refer to the Loan Agreement as amended pursuant to this
Amendment.
c. All references in the Loan Agreement to the Loan Documents,
or any particular Loan Document, hereby refer to such Loan Documents as
amended pursuant to the amendments executed concurrent herewith.
7. Continuation of the Loan Agreement Except as specified in this Amendment, the
provisions of the Loan Agreement remain in full force and effect, and if there
is a conflict between the terms of this Amendment and those of the Loan
Agreement, the terms of this Amendment control.
8. Miscellaneous.
a. This Amendment shall be governed by and construed under the
laws of the State of Colorado and shall be binding upon and inure to
the benefit of the parties hereto and their successors and permissible
assigns.
b. This Amendment may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together
shall constitute one instrument.
c. This Amendment and all documents to be executed and
delivered hereunder may be delivered in the form of a facsimile copy,
subsequently confirmed by delivery of the originally executed document.
d. Time is of the essence hereof with respect to the dates,
terms and conditions of this Amendment and the documents to be
delivered pursuant hereto.
e. This Amendment constitutes the entire agreement between
Borrower, the Agent, and the Lenders concerning the subject matter of
this Amendment. This Amendment may not be amended or modified orally,
but only by a written agreement executed by Borrower, the Agent and the
Lenders and designated as an amendment or modification of the Loan
Agreement.
f. If any provision of this Amendment is held to be invalid,
illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Amendment shall not be impaired
thereby.
g. The section headings herein are for convenience only and
shall not affect the construction hereof.
h. Execution of this Amendment is not intended to and shall
not constitute a waiver by the Lenders of any Event of Default or
Unmatured Event of Default.
EXECUTED as of the date first set forth above.
LENDERS: NORWEST BANK COLORADO, NATIONAL ASSOCIATION,
a national banking association
By: /s/XXXXX X. XXXXX
---------------------------
Xxxxx X. Xxxxx
Vice President
FIRST SECURITY BANK, N.A., a
national banking association
(f/k/a First Security Bank of Idaho, N.A.)
By:/s/ XXXX XXXXXX
--------------------------
Xxxx Xxxxxx
Vice President
U.S. BANK (f/k/a U.S. Bank of Idaho)
By:/s/ XXXXX XXXXXX
--------------------------
Xxxxx Xxxxxx
Vice President
SUNTRUST BANK, CENTRAL FLORIDA, N.A.
By:/s/
--------------------------
Name:
Title:
UMB BANK, N.A.
By:/s/
--------------------------
Name:
Title:
AGENT: NORWEST BANK COLORADO, NATIONAL ASSOCIATION,
a national banking association
By:/s/ XXXXX X. XXXXX
--------------------------
Xxxxx X. Xxxxx
Vice President
BORROWER: ROCK BOTTOM RESTAURANTS, INC., a
Delaware corporation
By:/s/ XXXXXXX X. XXXXX
---------------------------
Xxxxxxx X. Xxxxx
Executive Vice President and
Chief Financial Officer
