Second Amendment to Credit Agreement among Schlotzsky's, Inc., Wells Fargo Bank Texas, and Lenders

Summary

This amendment updates the existing credit agreement between Schlotzsky's, Inc., Wells Fargo Bank Texas (as Agent and Issuing Bank), and the participating lenders. The main change is a revision to the debt covenant, specifying the types and limits of debt Schlotzsky's, Inc. and its subsidiaries may incur. The amendment is effective upon satisfaction of certain conditions, including payment of a $10,000 fee and confirmation that no default exists. All other terms of the original agreement remain in effect.

EX-10.60 2 a2031046zex-10_60.txt EXHIBIT 10.60 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 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 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; -1- (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 -2- 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 Austin, Travis County, Texas and shall be governed by and construed in accordance with the laws of the State of Texas. -3- 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. -4- 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) 236-3740 Telephone No.: (512) 236-3600 Attention: Chief Financial Officer AGENT, ISSUING BANK AND LENDER: WELLS FARGO BANK TEXAS, NATIONAL ASSOCIATION By: ---------------------------------------------- Name: Keith Smith Title: 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 -5- 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 -6- 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: ---------------------------------------------- Name: ----------------------------------- Title: ---------------------------------- -7-