THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT (the "AMENDMENT"), dated as of
September 30, 2000 is among SCHLOTZSKY'S, INC., a Texas corporation
("BORROWER"), each of the Lenders party to the Agreement referred to below, and
WELLS FARGO BANK TEXAS, NATIONAL ASSOCIATION, a national banking association
(successor by consolidation to Wells 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
(a) that certain First Amendment to Credit Agreement dated as of December 31,
1999, and (b) that certain Second Amendment to Credit Agreement dated as of May
1, 2000 (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 (a) to add certain real property as Collateral, (b) to extend the
Revolving Credit Loan Termination Date to December 31, 2000, (c) to modify
certain financial covenants, (d) to modify the applicable interest rates, and
(e) to make such other modifications, in each case, 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
AMENDMENTS
2.1 AMENDMENT TO SECTION 1.1. Effective as of the date hereof, the
following definitions in Section 1.1 of the Agreement are amended and restated
to read in their entirety as follows:
"COLLATERAL" means the property in which liens have been
granted pursuant to the Borrower Pledge Agreement and the Borrower
Security Agreement or pursuant to any Subsidiary Pledge Agreement or
Subsidiary Security Agreement executed by Subsidiary (including any
Subsidiary added in accordance with SECTION 8.10), or pursuant to any
Mortgages executed by the Borrower or any Subsidiary whether such Liens
are now existing or hereafter arise.
"CONTINGENT LIABILITIES" means, at any particular time, the
contingent liabilities of the Borrower and its Subsidiaries determined
on a consolidated basis in accordance with GAAP; provided however,
solely for the purpose of SECTION 10.6, "Contingent Liabilities" will
not include that portion of contingent liabilities of the Borrower
incurred in connection with a transaction in which the Borrower
received cash to the extent of cash received.
"FIXED CHARGE COVERAGE RATIO" means, for each Fiscal Quarter,
the quotient determined by dividing (i) the sum of (a) EBITDA, plus (b)
rent expense in each case for such Fiscal Quarter and the prior three
(3) Fiscal Quarters, plus (c) as long as the Fiscal Quarter ended June
30, 2000 is included in the prior three (3) Fiscal Quarters,
$6,900,000, and otherwise $0.00 by (ii) the sum of (x) the aggregate
interest expense and rent expense of the Borrower and its consolidated
Subsidiaries, plus (y) that portion of Long-Term Debt of the Borrower
and its consolidated Subsidiaries that should be classified as current
in accordance with GAAP, in each case for such Fiscal Quarter and the
prior three (3) Fiscal Quarters.
"GAAP" means generally accepted accounting principles, applied
on a consistent basis, as set forth in Opinions of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and/or in statements of the Financial Accounting Standards
Board and/or their respective successors and which are applicable in
the circumstances as of September 30, 2000. Accounting principles are
applied on a "consistent basis" when the accounting principles applied
in a current period are comparable in all material respects to those
accounting principles applied in a preceding period.
"LEVERAGE RATIO" means, as of any Fiscal Quarter end the ratio
of Funded Debt to the sum of (i) EBITDA, plus (ii) as long as the
Fiscal Quarter ended June 30, 2000 is included in the prior three (3)
Fiscal Quarters, $6,900,000, and otherwise $0.00, in each case for such
Fiscal Quarter and the prior three (3) Fiscal Quarters.
"LOAN DOCUMENTS" means this Agreement, the Notes, the
Guaranties, the Borrower Security Agreement, the Borrower Pledge
Agreement, the Subsidiary Security Agreement, the Subsidiary Pledge
Agreement, the Contribution and Indemnification Agreement, the Existing
LC Guaranty, the Mortgages, and all other promissory notes, guaranties
and other instruments, documents and agreements now or hereafter
executed and delivered pursuant to or in connection with this
Agreement, as such instruments, documents and agreements may be
amended, modified, renewed, extended, or supplemented from time to
time.
"REVOLVING CREDIT COMMITMENT" means, as to each Lender, the
obligation of such Lender to make Revolving Credit Loan Advances as
described in ARTICLE II hereunder in an aggregate principal amount at
any one time outstanding up to but not exceeding the amount set forth
opposite the name of such Lender on Schedule 1.1(a) hereto under the
heading "Revolving Credit Commitment," as the
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same may be reduced pursuant to Section 2.1 or 2.9 or terminated
pursuant to Section 2.9 or 11.12.
"REVOLVING CREDIT LOAN TERMINATION DATE" means 8:00 A.M. San
Francisco, California time on December 31, 2000, or such earlier date
and time on which the Revolving Credit Commitments terminate as
provided in this Agreement.
2.2 ADDITIONS TO SECTION 1.1. Effective as of the date hereof, the
following definitions are added to Section 1.1 of the Agreement in alphabetical
order to read in their entirety as follows:
"MORTGAGES" means all deeds of trust, mortgages, leasehold
deeds of trusts and other instruments, documents and agreements
executed and delivered by the Borrower or any Subsidiary in favor of
the Agent for the benefit of the Lenders, which creates a Lien on such
Person's interests in the Real Property, as the same may be amended,
restated, supplemented or modified from time to time.
"REAL ESTATE LOANS" has the meaning set forth in SECTION
2.9(b)(i).
"REAL PROPERTY" means, collectively, the fee owned real
property, interests in fee owned real property, the real property
leased and the leasehold interests in leased real property of the
Borrower or any of its Subsidiaries as identified on SCHEDULE 1.1(c)
attached hereto, and all improvements and fixtures thereon and all
appurtenances thereto, whether now existing or hereinafter arising.
2.3 AMENDMENT TO SECTION 2.1. Effective as of the date hereof, Section
2.1 of the Agreement is amended and restated to read in its entirety as follows:
Section 2.1 COMMITMENTS. Subject to the terms and conditions
of this Agreement, each Lender has made one or more Revolving Credit
Loan Advances to the Borrower in an aggregate principal amount at any
time outstanding up to but not exceeding the amount of such Lender's
Revolving Credit Commitment as then in effect, provided that the
aggregate amount of all Revolving Credit Loan Advances at any time
outstanding shall not exceed the Revolving Credit Commitments. The
Borrower may not reborrow any amounts repaid hereunder and all amounts
paid on the Revolving Credit Loan shall permanently reduce the
Revolving Credit Commitment by such amount. No additional Revolving
Credit Loan Advances will be requested by the Borrower or made by any
Lender on or after September 30, 2000. Revolving Credit Loan Advances
made by each Lender shall be made and maintained at such Lender's
Applicable Lending Office.
2.4 AMENDMENT TO SECTION 2.8. Effective as of the date hereof, Section
2.8 of the Agreement is amended and restated to read in its entirety as follows:
"Base Rate Margin" shall mean (i) for Revolving Credit Loan,
two percent (2%) and (ii) for the Term Loan, (a) during the period
commencing September 30, 2000 and ending on but not including the first
Adjustment Date, two percent
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(2%) per annum, and (b) during each period, from and including one
Adjustment Date to but excluding the next Adjustment Date (herein a
"CALCULATION PERIOD"), the percent per annum set forth in the table
below in this SECTION 2.8 under the heading "BASE RATE MARGIN"
opposite the Debt to EBITDA Ratio calculated for the completed four
(4) Fiscal Quarters which immediately preceded the beginning of the
applicable Calculation Period.
-------------------------------------------------------------- -----------------
Debt to EBITDA Ratio Base Rate Margin
-------------------------------------------------------------- -----------------
Greater than or equal to 6.0 to 1.0 2%
-------------------------------------------------------------- -----------------
Greater than or equal to 4.0 to 1.0 but less than 6.0 to 1.0 1%
-------------------------------------------------------------- -----------------
Less than 4.0 to 1.0 0%
-------------------------------------------------------------- -----------------
Upon delivery of the Quarterly Certificate pursuant to SECTION
8.1(c) commencing with such Quarterly Certificate delivered at the end
of the Fiscal Quarter ending on September 30, 2000, the Base Rate
Margin shall automatically be adjusted as set forth in the table above,
such automatic adjustment to take effect as of the first Business Day
after the receipt by the Agent of the related Quarterly Certificate
(each such Business Day when the Base Rate Margin is adjusted pursuant
to this sentence or below, herein an "ADJUSTMENT DATE"). If the
Borrower fails to deliver such Quarterly Certificate which so sets
forth the Debt to EBITDA Ratio within the period of time required by
SECTION 8.1(c), the Base Rate Margin shall automatically be adjusted to
the highest applicable percentage set forth in the grid above, such
automatic adjustment to take effect as of the first Business Day after
the last day on which the Borrower was required to deliver the
applicable Quarterly Certificate in accordance with SECTION 8.1(c) and
to remain in effect until subsequently adjusted in accordance herewith
upon the delivery of a Quarterly Certificate.
2.5 AMENDMENT TO SECTION 2.9(b)(i). Effective as of the date hereof,
Section 2.9(b)(i) of the Agreement is amended and restated to read in its
entirety as follows:
(i) On the date the Borrower or any Subsidiary receives loans
from lenders secured by mortgages on restaurants or other real property
owned by the Borrower or any of its Subsidiaries as of September 30,
2000 (the "REAL ESTATE LOANS"), the Revolving Credit Commitments shall
automatically be reduced by the amount of such funds received, and the
Borrower shall simultaneously prepay the amount by which the unpaid
principal amount of the Revolving Credit Loan Advances exceeds the
Revolving Credit Commitments (after giving effect to such reduction).
2.6 ADDITION TO SECTION 5.3. Effective as of the date hereof, a new
subsection (c) is added Section 5.3 of the Agreement to read in its entirety as
follows:
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(c) Upon receipt of the cash portion of Net Proceeds from the
sale of any restaurants, stores or other real property owned by the
Borrower or any Subsidiary as of September 30, 2000 or upon funding of
any Real Estate Loan (in each case, the "SUBJECT NET PROCEEDS"), if the
Revolving Credit Commitments have been reduced to $0.00, then the
Borrower shall promptly prepay the outstanding Term Loan by the amount
equal to 75% of the Subject Net Proceeds (less any amounts applied to
the Revolving Credit Loan Advances). Upon receipt by Agent of such
Subject Net Proceeds or portions thereof, the Agent will release its
Lien on the Real Property which is subject of such sale or Real Estate
Loan.
2.7 ADDITION TO ARTICLE VII. Effective as of the date hereof, a new
Section 7.20 is added to Article VII of the Agreement to read in its entirety as
follows:
Section 7.20 REAL PROPERTY. The Real Property described on
SCHEDULE 1.1(c) attached hereto consists of all stores or restaurants
owned or leased by the Borrower or any Subsidiary which each has (a) a
net book value of at least $300,000 and (b) is not encumbered by a Lien
other than the Lien of the Agent.
2.8 ADDITIONS TO ARTICLE VIII. Effective as of the date hereof, new
Sections 8.13 and 8.14 are added to Article VIII of the Agreement to read in
their entirety as follows:
Section 8.13 POST-CLOSING ITEMS. If, on or before November 15,
2000, (i) the outstanding Revolving Credit Loan Advances have not been
paid in full or (ii) the Borrower has not received signed commitment
letters from lenders for financing or signed sale contracts from buyers
for the purchase of restaurants or other real property owned by the
Borrower or any Subsidiary in an aggregate amount sufficient to pay in
full the outstanding Revolving Credit Loan Advances, the Borrower
agrees that it shall, and shall cause each Subsidiary, to:
(a) Use its commercially reasonable best efforts to
obtain and deliver to the Agent on or before December 31, 2000
from each landlord of each leased Real Property, consents to
the grant by the Borrower and the Subsidiaries of a Lien to
the Agent in the leased Real Property and other agreements
from such landlord, in each case in form and substance
reasonably satisfactory to the Agent;
(b) Deliver to the Agent as soon as available but in
any event on or before December 31, 2000, with respect to each
parcel of the Real Property, a title insurance commitment
issued by a title insurance company selected by the Borrower
and reasonably acceptable to the Agent, and all documentation
evidencing any exceptions to title reflected thereon, all of
which shall be in form and substance reasonably satisfactory
to the Agent;
(c) Deliver to the Agent on or before December 31,
2000, with respect to each parcel of the Real Property, a
survey of such Real Property and certified by a licensed
surveyor selected by the Borrower and
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reasonably acceptable to the Agent, in form and substance
reasonably satisfactory to the Agent;
(d) Deliver to the Agent as soon as available but in
any event on or before December 31, 2000, with respect to each
parcel of the Real Property, a phase I environmental report
for such Real Property, prepared by a third party
environmental engineer selected by the Borrower and reasonably
acceptable to the Agent;
(e) Deliver to the Agent as soon as available but in
any event on or before December 31, 2000, with respect to each
parcel of the Real Property, an appraisal for such Real
Property by a licensed appraiser selected by the Agent in form
and substance satisfactory to the Agent;
(f) Deliver to the Agent as soon as available but in
any event on or before February 15, 2001, with respect to each
parcel of the Real Property, a lender's title insurance policy
(together with any required endorsements thereto) issued by a
title insurer selected by the Borrower and reasonably
satisfactory to the Agent in an amount equal to the fair
market value of the underlying property as determined by the
appraisal described in SUBSECTION (e) above; and
(g) Deliver to the Agent such additional approvals,
opinions, documents, instruments or agreements related to the
items described in CLAUSES (a) through (f) above as the Agent
may reasonably request.
Section 8.14 LANDLORD WAIVERS. With respect to all locations
of Collateral and on or before December 31, 2000, the Borrower shall,
and shall cause each Subsidiary to, use its commercially reasonable
best efforts to cause each landlord of real property leased by the
Borrower or any Subsidiary to execute and deliver instruments
satisfactory in form and substance to the Agent by which landlord
waives or subordinates its rights, if any, in the Collateral.
2.9 AMENDMENT TO SECTION 9.5(e). Effective as of the date hereof,
Section 9.5(e) of the Agreement is amended and restated to read in its entirety
as follows:
(e) (i) loans to Schlotzsky's National Advertising
Association, Inc. not to exceed $8,000,000 for the Fiscal Quarter
ending September 30, 2000 and $7,000,000 thereafter, and (ii) loans to
Schlotzsky's N.A.M.F., Inc. not to exceed $500,000 in the aggregate at
any time outstanding; provided that such loans are evidenced by
promissory notes, which original promissory notes shall be endorsed and
delivered to the Agent in accordance with the Loan Documents;
2.10 AMENDMENT TO SECTION 10.1. Effective as of the date hereof,
Section 10.1 of the Agreement is amended and restated to read in its entirety as
follows:
Section 10.1 CONSOLIDATED WORKING CAPITAL. As of the last day
of any Fiscal Quarter, the Borrower will maintain a Consolidated
Working Capital of not
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less than (a) $4,500,000 for the Fiscal Quarter ending September 30,
2000 and (b) $10,000,0000 thereafter, in each case minus any payments
made pursuant to SECTION 5.3(c) of this Agreement.
2.11 AMENDMENT TO SECTION 10.2. Effective as of the date hereof,
Section 10.2 of the Agreement is amended and restated to read in its entirety as
follows:
Section 10.2 LEVERAGE RATIO. As of the last day of any Fiscal
Quarter, the Borrower will maintain a Leverage Ratio of not greater
than (a) 3.35 to 1.00 beginning as of the Fiscal Quarter ending
September 30, 2000 through and including the Fiscal Quarter ending June
30, 2001, (b) 3.00 to 1.00 for the Fiscal Quarter ending September 30,
2001 and (c) 2.75 to 1.00 thereafter.
2.12 AMENDMENT TO SECTION 10.3. Effective as of the date hereof,
Section 10.3 of the Agreement is amended and restated to read in its entirety as
follows:
Section 10.3 CONSOLIDATED NET WORTH. As of September 30, 2000,
the Borrower will maintain a Consolidated Net Worth in an amount not
less than Seventy-Two Million Dollars ($72,000,000), and for the last
day of each Fiscal Quarter thereafter, not less than the sum of (i) the
minimum Consolidated Net Worth required for the prior Fiscal Quarter,
plus (ii) 100% of Consolidated Net Income (not less than zero dollars
[$0.00]) for the Fiscal Quarter then ended.
2.13 AMENDMENT TO SECTION 10.4. Effective as of the date hereof,
Section 10.4 of the Agreement is amended and restated to read in its entirety as
follows:
Section 10.4 FIXED CHARGE COVERAGE RATIO. As of the last day
of any Fiscal Quarter, the Borrower will maintain a Fixed Charge
Coverage Ratio for the preceding four (4) Fiscal Quarters then ended of
not less than (a) 1.10 to 1.00 beginning as of the Fiscal Quarter
ending September 30, 2000 through and including the Fiscal Quarter
ending June 30, 2001, (b) 1.20 to 1.00 for the Fiscal Quarter ending
September 30, 2001 and (c) 1.35 to 1.00 thereafter.
2.14 AMENDMENT TO SECTION 10.5. Effective as of the date hereof,
Section 10.5 of the Agreement is amended and restated to read in its entirety as
follows:
Section 10.5 CAPITAL EXPENDITURES. The Borrower will not
permit the aggregate amount of Capital Expenditures of Borrower and the
Subsidiaries to exceed (a) $6,000,000 during the Fiscal Year ending
December 31, 2000, (b) $9,000,000 during the Fiscal Year ending
December 31, 2001, and (c) $6,000,000 during any Fiscal Year
thereafter.
2.15 AMENDMENT TO SECTION 10.6. Effective as of the date hereof,
Section 10.6 of the Agreement is amended and restated to read in its entirety as
follows:
Section 10.6 CONTINGENT LIABILITIES. The Borrower will not
permit at any time the aggregate amount of Contingent Liabilities to
exceed (a) $32,000,000 as
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of September 30, 2000 through and including December 30, 2000 and (b)
$30,000,000 thereafter.
2.16 TERMINATION OF LC COMMITMENT. The Borrower and the Lenders agree
that each Lender's LC Commitment under the Agreement is terminated.
2.17 AMENDMENT TO SCHEDULE 1.1(a). Effective as of the date hereof, all
references in the Agreement to "Schedule 1.1(a)" shall be deemed to be
references to the SCHEDULE 1.1(a) attached hereto.
2.18 ADDITION OF SCHEDULE 1.1(c). Effective as of the date hereof, all
references in the Agreement to "Schedule 1.1(c)" shall be deemed to be
references to the SCHEDULE 1.1(c) attached hereto.
2.19 AMENDMENT TO SCHEDULE 7.14. Effective as of the date hereof, all
references in the Agreement to "Schedule 7.14" shall be deemed to be references
to the SCHEDULE 7.14 attached hereto.
2.20 AMENDMENT TO SCHEDULE 9.5(g). Effective as of the date hereof, all
references in the Agreement to "Schedule 9.5(g)" shall be deemed to be
references to the SCHEDULE 9.5(g) attached hereto.
ARTICLE III
CONDITIONS PRECEDENT
3.1 CONDITIONS. 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;
(ii) Mortgages on the Real Property executed by the
Borrower and its Subsidiaries, in form and substance
satisfactory to the Agent;
(iii) Resolutions of the Board of Directors of the
Borrower certified by its secretary or assistant secretary
which authorize the execution, delivery and performance by the
Borrower of this Amendment, the Mortgages and the other Loan
Documents executed in connection herewith;
(iv) A certificate of incumbency certified by the
secretary or the assistant secretary of the Borrower
certifying the names of the officers thereof authorized to
sign this Amendment, the Mortgages and the other Loan
Documents together with specimen signatures of such officers;
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(v) Resolutions of the Board of Directors or
comparable authority of each of the Obligated Parties
certified by its secretary or assistant secretary which
authorize the execution, delivery and performance by each of
the Obligated Parties of this Amendment, the Mortgages and the
Loan Documents executed in connection herewith; and
(vi) A certificate of incumbency certified by the
secretary or the assistant secretary of each Obligated Party
certifying the names of the officers thereof authorized to
sign this Amendment, the Mortgages and the other Loan
Documents together with specimen signatures of such officers.
(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 an amendment fee in the amount of
$58,013.56.
(e) Additional Documentation. The Agent shall have received
such additional approvals, opinions or documents as the Agent may
request.
ARTICLE IV
LIMITED WAIVER
4.1 LIMITED WAIVER. By execution of this Amendment, Agent and the
Lenders waive any Events of Default which would arise under the Agreement solely
by reason of Borrower's failure to comply with the notification requirements and
delivery of certain documents pursuant to Section 8.10 of the Agreement with
respect to Schlotzsky's Brands I, L.L.C., a Delaware limited liability company,
and Schlotzsky's Brand Products, L.P., a Texas limited partnership
(collectively, the "SB EVENTS OF DEFAULT"). Except as otherwise specifically
provided for in this SECTION 4.1, nothing contained herein shall be construed as
a waiver by the Agent or any Lender of any covenant or provision of the
Agreement, the other Loan Documents, this Amendment, or any other contract or
instrument among the Borrower, the Agent and the Lenders, and the failure of the
Agent or any Lender at any time or times hereafter to require strict compliance
by Borrower of any provision thereof shall not waive, affect or diminish any
right of the Agent or any Lender to thereafter demand strict compliance
therewith. The Agent and the Lenders reserve all rights granted under the
Agreement, the other Loan Documents, this Amendment and any other contract or
instrument among the Borrower, the Agent and the Lenders.
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ARTICLE V
RATIFICATIONS, REPRESENTATIONS AND WARRANTIES
5.1 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 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.
5.2 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) except for the SB Events of Default,
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) except for the SB
Events of Default, no Default has occurred and is continuing, and (iv) Borrower
is in full compliance with all covenants and agreements contained in the
Agreement as amended hereby.
ARTICLE VI
MISCELLANEOUS
6.1 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, Agent or Issuing
Bank to rely upon them.
6.2 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.
6.3 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.
6.4 APPLICABLE LAW. This Amendment and all other Loan Documents
executed pursuant hereto shall be deemed to have been made and to be performable
in Austin, Travis
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County, Texas and shall be governed by and construed in accordance with the
laws of the State of Texas.
6.5 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.
6.6 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.
6.7 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.
[Remainder of Page Intentionally Left Blank]
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Executed as of the date first written above.
BORROWER:
SCHLOTZSKY'S, INC.
By:
-------------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address for Notices:
203 Colorado St.
Austin, TX 78701
Fax No.: (512) 236-3650
Telephone No.: (512) 236-3600
Attention: Chief Financial Officer
AGENT, ISSUING BANK AND LENDER:
WELLS FARGO BANK TEXAS, NATIONAL ASSOCIATION
By:
-------------------------------------------
Keith Smith
Vice President
Address for Notices:
111 Congress Avenue, Suite 300
Austin, TX 78701
Fax No.: (512) 344-7318
Telephone No.: (512) 344-7011
Attention: Keith Smith
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OTHER LENDERS:
FROST NATIONAL BANK
By:
-------------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address for Notices:
2728 North Harwood, Suite 100
Dallas, TX 75201
Fax No.: (214) 515-4955
Telephone No.: (214) 515-4907
Attention: Shannon Bettis
TEXAS CAPITAL BANK, NATIONAL
ASSOCIATION
By:
-------------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address for Notices:
2100 McKinney Avenue, Suite 900
Dallas, TX 75201
Fax No.: (214) 932-6604
Telephone No.: (214) 932-6675
Attention: Tim Monter
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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.
SCHLOTZSKY'S BRANDS, INC.
By:
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Name:
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Title:
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SCHLOTZSKY'S BRANDS I, L.L.C.
By:
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Name:
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Title:
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SCHLOTZSKY'S BRAND
PRODUCTS, L.P.
By: Schlotzsky's Brands, Inc.,
as general partner
By:
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Name:
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Title:
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