SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (the "AMENDMENT"), dated as
of May 1, 2000 is among SCHLOTZSKY'S, INC., a Texas corporation ("BORROWER"),
each of the Lenders party to the Agreement referred to below, and XXXXX FARGO
BANK TEXAS, NATIONAL ASSOCIATION, a national banking association (successor by
consolidation to Xxxxx Fargo Bank (Texas), National Association), as Agent for
itself and the other Lenders (in such capacity, together with its successors in
such capacity the "AGENT") and as the Issuing Bank.
RECITALS:
A. Borrower, Agent, Lenders and Issuing Bank have previously entered
into that certain Credit Agreement dated as of December 7, 1999, as amended by
that certain First Amendment to Credit Agreement dated as of December 31, 1999
(the Credit Agreement as so amended is hereinafter referred to as the
"AGREEMENT").
B. Borrower, Agent, Lenders and Issuing Bank now desire to amend the
Agreement to amend Section 9.1 of the Agreement as hereinafter more specifically
provided.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
1.1 DEFINITIONS. All capitalized terms not otherwise defined herein,
shall have the same meanings as in the Agreement, as amended hereby.
ARTICLE II.
AMENDMENT
2.1 AMENDMENT TO DEBT COVENANT. Effective as of the date hereof
Section 9.1 of the Agreement is hereby amended to read in its entirety as
follows:
"Section 9.1 DEBT. The Borrower will not incur, create,
assume, or permit to exist, and will not permit any Subsidiary to
incur, create, assume, or permit to exist, any Debt, except:
(a) Debt to the Lenders and the Issuing Bank pursuant
to the Loan Documents;
(b) Debt listed on SCHEDULE 9.1;
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(c) Debt not to exceed $1,000,000 in the aggregate at
any time outstanding secured by purchase money Liens permitted
by SECTION 9.2;
(d) Intercompany Debt among the Borrower and the
wholly-owned domestic Subsidiaries; provided that the
obligations of each obligor of such Debt shall be subordinated
in right of payment to the Obligations from and after such
time as any portion of the Obligations shall become due and
payable (whether at stated maturity, by acceleration or
otherwise) and shall have such other terms and provisions as
the Agent may reasonably require; and
(e) Unsecured Debt in addition to Debt that is
specifically described in CLAUSES (a) through (d) of this
SECTION 9.1 which in the aggregate does not exceed One Million
Dollars ($1,000,000) at any time outstanding."
ARTICLE III.
CONDITIONS PRECEDENT
3.1 CONDITION. The effectiveness of this Amendment is subject to the
satisfaction of the following conditions precedent:
(a) Agent shall have received all of the following, each dated
(unless otherwise indicated) the date of this Amendment, in form and
substance satisfactory to the Agent:
(i) This Amendment executed by all parties hereto.
(b) NO DEFAULT. No Default shall have occurred and be
continuing.
(c) REPRESENTATIONS AND WARRANTIES. All of the representations
and warranties contained in Article VII of the Agreement, as amended
hereby and in the other Loan Documents shall be true and correct on and
as of the date of this Amendment with the same force and effect as if
such representations and warranties had been made on and as of such
date, except to the extent such representations and warranties speak to
a specific date.
(d) AMENDMENT FEE. Borrower shall have paid to the Agent for
the benefit of the Lenders who execute this Amendment an amendment fee
in the amount of $10,000.00.
ARTICLE IV.
RATIFICATIONS, REPRESENTATIONS AND WARRANTIES
4.1 RATIFICATIONS. The terms and provisions set forth in this
Amendment shall modify
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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 and the other Loan Documents are
ratified and confirmed and shall continue in full force and effect. Borrower,
Lenders, Issuing Bank and Agent agree that the Agreement as amended hereby
and the other Loan Documents shall continue to be legal, valid, binding and
enforceable in accordance with their respective terms.
4.2 REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants to the Lenders, Agent and Issuing Bank 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 action on the part of Borrower and will not violate the articles of
incorporation or bylaws of Borrower, (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, except to the extent such representations and warranties speak to a
specific date, (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
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 the Lenders, Agent or Issuing Bank or any closing shall affect
the representations and warranties or the right of the Lenders or Agent or
Issuing Bank to rely upon them.
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.
5.3 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.
5.4 APPLICABLE LAW. This Amendment and all other Loan Documents
executed pursuant hereto shall be deemed to have been made and to be performable
in Xxxxxx, Xxxxxx County, Texas and shall be governed by and construed in
accordance with the laws of the State of Texas.
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5.5 SUCCESSORS AND ASSIGNS. This Amendment is binding upon and shall
inure to the benefit of the Lenders, Agent, Issuing Bank and Borrower and their
respective successors and assigns, except Borrower may not assign or transfer
any of its rights or obligations hereunder without the prior written consent of
the Lenders.
5.6 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.
5.7 ENTIRE AGREEMENT. THIS AMENDMENT AND ALL OTHER INSTRUMENTS,
DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS
AMENDMENT REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES HERETO AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES HERETO.
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Executed as of the date first written above.
BORROWER:
SCHLOTZSKY'S, INC.
By:
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Name:
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Title:
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Address for Notices:
000 Xxxxxxxx Xx.
Xxxxxx, XX 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Chief Financial Officer
AGENT, ISSUING BANK AND LENDER:
XXXXX FARGO BANK TEXAS, NATIONAL
ASSOCIATION
By:
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Name: Xxxxx Xxxxx
Title: Vice President
Address for Notices:
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxx Xxxxx
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OTHER LENDERS:
FROST NATIONAL BANK
By:
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Name:
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Title:
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Address for Notices:
0000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
TEXAS CAPITAL BANK, NATIONAL
ASSOCIATION
By:
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Name:
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Title:
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Address for Notices:
0000 XxXxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxx Xxxxxx
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OBLIGATED PARTIES CONSENT
Each of the undersigned Obligated Parties (i) consent and agree to this
Amendment; and (ii) agree that the Loan Documents to which it is a party shall
remain in full force and effect and shall continue to be the legal, valid and
binding obligation of such Obligated Party enforceable against it in accordance
with their respective terms.
OBLIGATED PARTIES:
RAD Acquisition Corp.
Schlotzsky's Real Estate, Inc.
Schlotzsky's Restaurants, Inc.
DFW Restaurant Transfer Corp.
Schlotzsky's Equipment Corporation
SREI Turnkey Development, L.L.C.
56th & 6th, Inc.
By:
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Name:
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Title:
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