FOURTH AMENDMENT TO LOAN AGREEMENT
THIS FOURTH AMENDMENT TO LOAN AGREEMENT (this "Amendment") executed to
be effective as of April 1, 1999 is among ROCK BOTTOM RESTAURANTS, INC, a
Delaware corporation ("Borrower"), the LENDERS (as such term is defined in the
Loan Agreement described below) 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 a Loan Agreement,
dated as of July 2, 1996, and amended by an Amendment to Loan Agreement dated
February 24, 1997, a Second Amendment to Loan Agreement dated July 28, 1997, and
a Third Amendment to Loan Agreement dated July 29, 1998 (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 $40,000,000. 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 (i) waive the
potential violation of certain provisions in the Loan Agreement arising out of
Borrower entering into the Merger Agreement (as defined below); (ii) modify the
definition of Operating Cash Flow and Capital Expenditures to take into account
certain changes in the method Borrower accounts for Pre-Opening Costs (as
defined below); (iii) modify certain provisions of the Loan Agreement with
respect to sale-leaseback transactions; and (iv) consent to the sale of certain
property in Houston, Texas.
C. 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. Limited Waivers.
a. Lenders hereby waive any violation of Section 7.6 (Mergers and
Consolidations) or Section 7.13 (Transactions with Affiliates) of the Loan
Agreement arising solely out of Borrower entering into the Agreement and
Plan of Merger, dated as of March 18, 1999, among Borrower, RB Capital,
Inc. and RBR Acquisition Corp. (the "Merger Agreement"); provided that,
notwithstanding anything to the contrary in the Merger Agreement: (i) the
waiver set forth herein is limited solely to entering into the Merger
Agreement and not to the consummation of any transactions contemplated by
the Merger Agreement; (ii) the Borrower agrees not to consummate the
transactions contemplated by the Merger Agreement without simultaneously
repaying the Loan in full and terminating the Loan Agreement; and (iii)
this waiver is limited solely to the covenants set forth above. Nothing
herein is intended to or shall waive any other Event of Default or
Unmatured Event of Default.
b. Lenders hereby waive any violation of Section 7.15 (Amendments to
Organizational Documents) of the Loan Agreement arising out of the
amendments to the bylaws of the Borrower attached hereto as Schedule I.
2. Amendments to Loan Agreement.
a. The definition of "Operating Cash Flow" in Section 1.1 of the Loan
Agreement is hereby amended and restated in its entirety to read as follows
and the following definition of "Pre-Opening Costs" is added to Section 1.1
of the Loan Agreement in appropriate alphabetical order:
"Operating Cash Flow" means, from and after January 1, 1998,
net income after taxes, plus depreciation, amortization, interest
expense, non-cash fees and/or any extraordinary or non-cash expenses
paid, plus Pre-Opening Costs (to the extent not included in the
foregoing), less any extraordinary, non-operating or non-cash income,
as determined in accordance with GAAP. Prior to January 1, 1998,
"Operating Cash Flow" means net income after taxes, plus depreciation,
amortization, interest expense, non-cash fees and/or any extraordinary
or non-cash expenses paid, less any extraordinary, non-operating or
non-cash income, as determined in accordance with GAAP.
"Pre-Opening Costs" means costs incurred prior to the opening
of any new restaurant facility for payroll, employee recruiting and
training and initial opening expenses directly related to the opening
of such new restaurant facility.
b. Section 5.1(e) of the Loan Agreement is deleted.
c. Section 7.4 of the Loan Agreement (Capital Expenditures) is amended
by adding the following sentence to the end of Section 7.4:
For purposes of determining Borrower's compliance with this
Section 7.4 at all times after January 1, 1998, Capital Expenditures
shall include Pre-Opening Costs and the limitations set forth herein
shall apply to Capital Expenditures and Pre-Opening Costs in the
aggregate.
d. Section 7.11(c) of the Loan Agreement is hereby amended and
restated in its entirety to read as follows:
(c) sale-leaseback transactions; provided that (i) the
sale-leaseback transaction is with an unaffiliated third party on fair
and reasonable terms as reasonably determined by the Agent (which
determination may, at Agent's option, be based on a certificate from
Borrower) or (ii) if it is with an affiliated party, Agent determines
that it is on terms substantially similar to the terms available from
an unaffiliated third party (which determination may, at Agent's
option, be based on a certificate from Borrower).
e. Section 4.2 of the loan agreement is amended by deleting the phrase
"Fee Properties" and substituting in its place the phrase "Fee Properties
or any other real property on which the Agent or a Lender has a lien as
security for the Loan" in order to allow releases of properties other than
the Fee Properties in the event of a sale-leaseback transaction.
f. 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, and (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).
3. Sale of Facility. Lenders hereby consent to Borrower entering into a
contract to sell and selling the parking lot property located in Houston, Texas.
4. 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:
a. Borrower shall pay all Loan Expenses incurred by the Agent in
connection with the transactions contemplated by this Amendment;
b. as of the date of this Amendment, taking into consideration the
changes contemplated by this Amendment, there was and is no Event of
Default or Unmatured Event of Default, other than the potential Events of
Default being waived pursuant to paragraph 1 above (the "Waived Defaults");
and
c. The representations and warranties set forth in Paragraph 6 below
shall be true and correct in all respects.
5. 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.
6. Representations and Warranties.
a. Borrower hereby represents and warrants 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), other than the Waived Defaults.
b. 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).
7. Loan Documents.
a. The Lenders, the Agent, and the Borrower agree that all of the Loan
Documents (including the covenant compliance certificate and any other
certificate) 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.
8. 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.
9. 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 (other than the Waived Defaults).
EXECUTED as of the date first set forth above.
LENDERS:
NORWEST BANK COLORADO, NATIONAL ASSOCIATION,
a national banking association
By:
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Xxxxx X. Xxxxxx
Vice President
FIRST SECURITY BANK, N.A., a
national banking association (f/k/a First Security Bank of
Idaho, N.A.)
By:
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Xxxx Xxxxxx
Vice President
U.S. BANK NATIONAL ASSOCIATION (f/k/a U.S. Bank of Idaho)
By:
------------------
Xxxxx Xxxxxx
Vice President
SUNTRUST BANK, CENTRAL FLORIDA, N.A.
By:
------------------
Xxxxx Xxxxx
Vice President
UMB BANK, N.A.
By:
-----------------
Xxxxx Xxxxxx
Senior Vice President
AGENT:
NORWEST BANK COLORADO, NATIONAL ASSOCIATION,
a national banking association
By:
-----------------
Xxxxx X. Xxxxxx
Vice President
BORROWER:
ROCK BOTTOM RESTAURANTS, INC., a
Delaware corporation
By:
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Xxxxxxx X. Xxxxx
Executive Vice President and Chief Financial Officer
