Exhibit 10.22
FIFTH AMENDMENT TO LOAN AGREEMENT
This FIFTH AMENDMENT TO LOAN AGREEMENT (this "AMENDMENT"), dated as of
April 2, 1998, is among SONIC CORP., a Delaware corporation (the "BORROWER"),
each of the banks or other lending institutions which is or may from time to
time become a signatory or party to the Agreement (hereinafter defined) or
any successor or permitted assignee thereof (each a "BANK" and collectively,
the "BANKS"), and CHASE BANK OF TEXAS, N.A. (formerly known as Texas Commerce
Bank National Association), a national banking association ("CHASE"), as
agent for itself and the other Banks and as issuer of Letters of Credit under
the Agreement (in such capacity, together with its successors in such
capacity, the "AGENT").
RECITALS:
A. Borrower, Agent and Banks have entered into that certain Loan
Agreement dated as of July 12, 1995, as amended by (i) that certain First
Amendment to Loan Agreement dated as of August 16, 1996, (ii) that certain
Second Amendment to Loan Agreement dated as of September 27, 1996, (iii) that
certain Third Amendment to Loan Agreement dated as of June 19, 1997, and (iv)
that certain Fourth Amendment to Loan Agreement dated as of January 27, 1998 (as
amended, the "AGREEMENT").
B. Pursuant to the Agreement, the undersigned guarantors (each a
"GUARANTOR" and, collectively, the "GUARANTORS") executed those certain Guaranty
Agreements dated as of July 12, 1995 (each a "GUARANTY" and collectively, the
"GUARANTIES"), which guarantee to Agent the payment and performance of the
Obligations (as defined in the Agreement).
C. Borrower, Agent and Banks now desire to amend the Agreement (i) to
decrease the commitments of the Banks to $60,000,000 in the aggregate, (ii) to
modify certain covenants, and (iii) as otherwise provided herein.
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 hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. Capitalized terms used in this Amendment, to
the extent no otherwise defined herein, shall have the same meanings as in the
Agreement, as amended hereby.
ARTICLE II
AMENDMENTS
Section 2.1 AMENDMENT TO COMMITMENTS. Effective as of the date hereof,
the Commitment amounts set forth on the signature pages to the Agreement are
hereby amended to be amounts set forth below for the respective Banks:
Chase Bank of Texas, National Association $15,750,000
NationsBank, N.A. 14,250,000
UMB Oklahoma Bank 11,250,000
Summit Bank 11,250,000
BancFirst 7,500,000
-----------
TOTAL $60,000,000
-----------
-----------
Section 2.2 DEFINITION OF CONSOLIDATED EBIT. Effective as of the date
hereof, Section 1.1 of the Agreement is hereby amended to add the following
definition of "CONSOLIDATED EBIT" which definition shall read in its entirety as
follows:
"CONSOLIDATED EBIT" means for any period, the sum of the
following, calculated on a consolidated basis for the Borrower and the
Subsidiaries without duplication: (a) the amount of net income for such
period (whether positive or negative), PLUS (b) (to the extent actually
deducted in calculating net income) interest expense (including the
interest portion of Capital Lease Obligations) and Income Taxes, PLUS
(c) losses (or MINUS gains) from the sale of fixed assets not in the
ordinary course of business and other extraordinary or nonrecurring
items.
Section 2.3 DEFINITION OF FIXED CHARGE COVERAGE RATIO. Effective as of
the date hereof, the definition of "Fixed Charge Coverage Ratio" set forth in
Section 1.1 of the Agreement is hereby amended to read in its entirety as
follows:
"FIXED CHARGE COVERAGE RATIO" means, at the end of each fiscal
quarter of the Borrower for the most recent four (4) fiscal quarters
then ended, the ratio of (a)
-2-
Consolidated EBIT PLUS noncapitalized lease obligations to (b) interest
expense PLUS noncapitalized lease obligations.
Section 2.4 AMENDMENT TO COVENANT REGARDING DEBT. Effective as of the
date hereof, Section 9.1 of the Agreement is hereby amended to add a new
subsection (i) to read in its entirety as follows:
(i) Debt incurred in connection with senior notes issued by
Borrower in an amount not to exceed Fifty Million Dollars ($50,000,000)
(the "PRIVATE PLACEMENT"); provided that the Private Placement shall be
upon terms substantially in accordance with the terms and covenants
attached hereto as Annex 2 and shall have been completed by May 31, 1998.
Section 2.5 AMENDMENT TO COVENANT REGARDING STOCK REPURCHASE.
Effective as of the date hereof, the amount of "Five Million and No/100
Dollars ($5,000,000.00)" appearing in Section 9.4 of the Agreement is hereby
amended to read "Ten Million and No/100 Dollars ($10,000,000.00)".
Section 2.6 AMENDMENT TO MINIMUM CONSOLIDATED NET WORTH. Effective as
of the date hereof, Section 10.2 of the Agreement is hereby amended to read in
its entirety as follows:
Section 10.2 MINIMUM CONSOLIDATED NET WORTH. The Borrower will
not permit the Consolidated Net Worth to be less than the sum of (a)
$95,000,000, PLUS (b) for each fiscal quarter of the Borrower ended
through the date of determination, beginning with the fiscal quarter
ending November 30, 1997, 50% of the positive consolidated net income of
the Borrower and the Subsidiaries for such quarter, PLUS (c) 100% of the
Net Proceeds received by the Borrower from any issuance, sale or other
disposition of any shares of capital stock or other equity securities of
the Borrower of any class (or any securities convertible or exchangeable
for any such shares, or any rights, warrants, or options to subscribe
for or purchase any such shares), but in no event shall the sum of (a),
(b) and (c) above be less than $95,000,000.
Section 2.7 AMENDMENT OF FIXED CHARGE COVERAGE RATIO. Effective as of
the date hereof, Section 10.3 of the Agreement is hereby amended to read in its
entirety as follows:
Section 10.3 FIXED CHARGE COVERAGE RATIO. The Borrower will
maintain or cause to be maintained, as of the end of each quarter of
each fiscal year of the Borrower, a Fixed Charge Coverage Ratio of not
less than 2.0 to 1.0 for the most recent four (4) fiscal quarters then
ended.
-3-
Section 2.8 AMENDMENT TO CONSOLIDATED FUNDED DEBT TO CONSOLIDATED
EBITDA RATIO. Effective as of the date hereof, the ratio "2.00 to 1.00"
appearing in Section 10.4 of the Agreement is hereby amended to read "2.50 to
1.00".
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 CONDITIONS. The effectiveness of this Amendment is subject
to the satisfaction of each of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained herein and in all other Loan Documents, as amended
hereby, shall be true and correct as of the date hereof as if made on
the date hereof;
(b) NO DEFAULT. No Event of Default shall have occurred and be
continuing and no event or condition shall have occurred that with the
giving of notice or lapse of time or both would be an Event of Default;
and
(c) CORPORATE MATTERS. All corporate 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 Agent and its legal counsel, Xxxxxxxx Xxxxxxxx &
Xxxxxx P.C.
ARTICLE VI
RATIFICATIONS, REPRESENTATIONS AND WARRANTIES
Section 4.1 RATIFICATIONS. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Agreement and except as expressly modified and superseded by this
Amendment, the terms and provisions of the Agreement are ratified and confirmed
and shall continue in full force and effect. Borrower, Agent and the Banks
agree that the Agreement as amended hereby shall continue to be legal, valid,
binding and enforceable in accordance with its terms.
Section 4.2 RELEASE OF CLAIMS. The Borrower and the Guarantors each
hereby acknowledge and agree that to their knowledge none of them has any and
there are no claims or offsets against or defenses or counterclaims to the terms
and provisions of or the obligations of the Borrower, any Guarantor or any
Subsidiary created or evidenced by the Agreement or any of the other Loan
Documents, and to the extent any such claims, offsets, defenses or counterclaims
exist,
-4-
the Borrower and the Guarantors each hereby waive, and hereby release the
Agent and each of the Banks from, any and all claims, offsets, defenses and
counterclaims that are known to the Borrower or any Guarantor as of the date
hereof, such waiver and release being with full knowledge and understanding
of the circumstances and effects of such waiver and release and after having
consulted legal counsel with respect thereto.
Section 4.3 REPRESENTATIONS AND WARRANTIES. Borrower hereby
represents and warrants to Agent and the Banks that (i) 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 corporate, partnership and trust action on the
part of Borrower and the Guarantors and will not violate the articles of
incorporation, bylaws, partnership agreement or other organizational
documents of Borrower or the Guarantors, (ii) the representations and
warranties contained in the Agreement, as amended hereby, and any other Loan
Document are true and correct on and as of the date hereof as though made on
and as of the date hereof, (iii) no Event of Default has occurred and is
continuing and no event or condition has occurred that with the giving of
notice or lapse of time or both would be an Event of Default, and (iv)
Borrower is in full compliance with all covenants and agreements contained in
the Agreement as amended hereby.
ARTICLE V
MISCELLANEOUS
Section 5.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made in this Amendment or any other Loan
Document including any Loan 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 Agent or any Bank or any
closing shall affect the representations and warranties or the right of Agent
and the Banks to rely upon them.
Section 5.2 REFERENCE TO AGREEMENT. Each of the Loan Documents,
including the Agreement and any and all other agreements, documents, or
instruments now or hereafter executed and delivered pursuant to the terms
hereof or pursuant to the terms of the Agreement as amended hereby, are
hereby amended so that any reference in such Loan Documents to the Agreement
shall mean a reference to the Agreement as amended hereby.
Section 5.3 EXPENSES OF AGENT. As provided in the Agreement,
Borrower agrees to pay on demand all reasonable costs and expenses incurred
by Agent in connection with the preparation, negotiation, and execution of
this Amendment and the other Loan Documents executed pursuant hereto and any
and all amendments, modifications, and supplements thereto, including without
limitation the reasonable costs and fees of Agent's legal counsel.
-5-
Section 5.4 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.
Section 5.5 APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER LOAN
DOCUMENTS EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO
BE PERFORMABLE IN DALLAS, DALLAS COUNTY, TEXAS AND SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
Section 5.6 SUCCESSORS AND ASSIGNS. This Amendment is binding upon and
shall inure to the benefit of Borrower, Agent and the Banks and their respective
successors and permitted assigns, except Borrower may not assign or transfer any
of its rights or obligations hereunder without the prior written consent of
Agent.
Section 5.7 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.
Section 5.8 EFFECT OF WAIVER. No consent or waiver, express or
implied, by Agent or any Bank to or for any breach of or deviation from any
covenant, condition or duty by Borrower or any Guarantor shall be deemed a
consent or waiver to or of any other breach of the same or any other covenant,
condition or duty.
Section 5.9 HEADINGS. The headings, captions, and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.
Section 5.10 NON-APPLICATION OF CHAPTER 346 OF TEXAS FINANCE CODE. The
provisions of Chapter 15 of the Texas Finance Code (formerly Chapter 15 of the
Texas Credit Code (Vernon's Annotated Texas Statutes, Article 5069-15)), as
amended, are specifically declared by the parties not to be applicable to this
Amendment or any of the Loan Documents or the transactions contemplated hereby.
Section 5.11 ENTIRE AGREEMENT. THIS AMENDMENT AND ALL OTHER
INSTRUMENTS, DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION
WITH THIS AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES
HERETO REGARDING THIS AMENDMENT AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THIS AMENDMENT, AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE
OF PRIOR,
-6-
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES
HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.
Executed as of the date first written above.
BORROWER:
SONIC CORP.
By: /s/ W. Xxxxx XxXxxx
-----------------------------------
W. Xxxxx XxXxxx
Chief Financial Officer
AGENT AND BANKS:
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
(formerly known as Texas Commerce Bank
National Association), as Agent and as
a Bank
By: /s/ Xxx Xxxxxxxxx
-----------------------------------
Name: Xxx Xxxxxxxxx
------------------------------
Title: Vice President
-----------------------------
NATIONSBANK, N.A. (formerly
Boatmen's National Bank of Oklahoma,
formerly Bank IV Oklahoma, N.A.)
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
------------------------------
Title: Sr. Vice President
-----------------------------
-7-
UMB OKLAHOMA BANK
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
------------------------------
Title: Executive Vice President
-----------------------------
SUMMIT BANK
By: /s/ Xxxxxxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxxxxxx X. Xxxxx
------------------------------
Title: Regional Vice President
-----------------------------
BANCFIRST
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
------------------------------
Title: Vice President
-----------------------------
Each Guarantor hereby (a) consents and agrees to this Amendment, (b)
agrees that its respective Guaranty shall continue to be the legal, valid and
binding obligation of such Guarantor enforceable against such Guarantor in
accordance with its terms, and (c) represents and warrants that each of the
representations and warranties set forth in this Amendment with regard to each
such Guarantor are true and correct in all respects.
GUARANTORS:
SONIC RESTAURANTS, INC.
By: /s/ W. Xxxxx XxXxxx
-----------------------------------
W. Xxxxx XxXxxx
Chief Financial Officer
-8-
SONIC INDUSTRIES INC.
By: /s/ W. Xxxxx XxXxxx
-----------------------------------
W. Xxxxx XxXxxx
Chief Financial Officer
AMERICA'S DRIVE-IN CORP.
By: /s/ W. Xxxxx XxXxxx
-----------------------------------
Name: W. Xxxxx XxXxxx
------------------------------
Title: Chief Financial Officer
-----------------------------
AMERICA'S DRIVE-IN TRUST
By: /s/ W. Xxxxx XxXxxx
-----------------------------------
Name: W. Xxxxx XxXxxx
------------------------------
Title: Chief Financial Officer
-----------------------------
EACH OF THE PARTNERSHIPS SPECIFIED ON
ANNEX 1 HERETO, each an Oklahoma general
partnership
By: /s/ Sonic Restaurants, Inc.,
Managing General Partner of
each of such partnerships
By: /s/ W. Xxxxx XxXxxx
-----------------------------------
W. Xxxxx XxXxxx
Chief Financial Officer
-9-
