Exhibit 10.19
Second Amendment to Loan Agreement with Texas Commerce Bank National Association
SECOND AMENDMENT TO LOAN AGREEMENT
This SECOND AMENDMENT TO LOAN AGREEMENT (this "AMENDMENT"), dated as of
September 27, 1996, 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 TEXAS COMMERCE BANK NATIONAL ASSOCIATION, a
national banking association ("TCB"), 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 that certain First Amendment
to Loan Agreement dated as of August 16, 1996 (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 to revise
the minimum Consolidated Net Worth covenant as 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 not otherwise defined herein, shall have the same meanings as in the
Agreement, as amended hereby.
ARTICLE II
AMENDMENT
Section 2.1 AMENDMENT TO MINIMUM CONSOLIDATED NET WORTH. Effective as
of August 31, 1996 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)
$103,000,000, MINUS (b) the amount of the non-cash after-tax charge to
earnings for the fiscal quarter ending August 31, 1996 due to the
Borrower's adoption of Statement of Financial Accounting Standards No. 121,
not to exceed $5,300,000, PLUS (c) for each fiscal quarter of the Borrower
ended through the date of determination, beginning with the fiscal quarter
ending May 31, 1996, (i) 100% of the positive consolidated net income of
the Borrower and the Subsidiaries for such quarter, MINUS (ii) all cash
dividends declared and paid by the Borrower for such quarter, and MINUS
(iii) the amount of all stock of the Borrower repurchased by the Borrower
during such quarter, PLUS (d) 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), (c) and (d) above be less than
$103,000,000.
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; and
(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.
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ARTICLE IV
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 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, 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, whether known or
unknown, 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
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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 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 costs
and fees of Agent's legal counsel.
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.
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Section 5.10 NON-APPLICATION OF CHAPTER 15 OF TEXAS CREDIT CODE. The
provisions of Chapter 15 of the Texas Credit Code (Vernon's Annotated Texas
Statutes, Article 5069-15) 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,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES
HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.
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Executed as of the date first written above.
BORROWER:
SONIC CORP.
By: /s/ W. Xxxxx XxXxxx
-------------------------------------
W. Xxxxx XxXxxx
Treasurer
AGENT AND BANKS:
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Agent and as a Bank
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxx
Vice President
UMB OKLAHOMA BANK
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxx
--------------------------------
Title: Senior Vice President
-------------------------------
BANK IV OKLAHOMA, N.A.
By: Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
--------------------------------
Title: Senior Vice President
-------------------------------
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BANCFIRST
By: /s/ E.G. Alexander
-------------------------------------
Name: E.G. Alexander
-----------------------------------
Title: Senior Vice President
----------------------------------
SUMMIT BANK
By: /s/ Xxxxxxxxxxx X. Annar
-------------------------------------
Name: Xxxxxxxxxxx X. Annar
-----------------------------------
Title: Regional Vice President
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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
Treasurer
SONIC INDUSTRIES INC.
By: /s/ W. Xxxxx XxXxxx
-------------------------------------
W. Xxxxx XxXxxx
Treasurer
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AMERICA'S DRIVE-IN CORP.
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxxxx
President
AMERICA'S DRIVE-IN TRUST
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxxxx
President
EACH OF THE PARTNERSHIPS SPECIFIED ON
ANNEX I HERETO, each an Oklahoma general
partnership
By: Sonic Restaurants, Inc.,
Managing General Partner of
each of such partnerships
By: /s/ W. Xxxxx XxXxxx
-------------------------------------
W. Xxxxx XxXxxx
Treasurer
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