UNITED STATES
SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1997
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________________________
Commission file number 0-12343
VICORP Restaurants, Inc.
(Exact name of registrant as specified in its charter)
Colorado 84-0511072
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
400 West 48th Avenue, Denver, Colorado 80216
(Address of principal executive offices)
(Zip Code)
(303) 296-2121
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
____ ____
The registrant had 9,073,520 shares of its $.05 par value Common
Stock outstanding as of March 12, 1997.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
VICORP Restaurants, Inc.
CONSOLIDATED BALANCE SHEETS
(in thousands)
January 31, October 31,
1997 1996
__________ __________
(unaudited)
ASSETS
Current assets
Cash $ 1,841 $ 1,406
Receivables 1,719 3,221
Inventories 5,238 6,517
Deferred income taxes 5,000 5,000
Prepaid expenses and other 1,128 1,202
______ ______
Total current assets 14,926 17,346
______ ______
Property and equipment, net 129,689 134,653
Deferred income taxes 40,567 41,324
Long-term receivables 2,420 2,541
Other assets 7,929 8,082
_______ _______
Total assets $195,531 $203,946
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt
and capitalized lease obligations $ 1,553 $ 1,592
Accounts payable, trade 8,987 11,131
Accrued compensation 3,751 5,686
Accrued taxes 7,780 6,941
Accrued insurance 4,791 4,524
Other accrued expenses 4,445 4,776
_______ _______
Total current liabilities 31,307 34,650
_______ _______
Long-term debt (Note 3) 19,062 24,642
Capitalized lease obligations 8,596 8,943
Non-current accrued insurance 4,871 5,349
Other non-current liabilities and credits 7,435 8,093
Commitments and contingencies
Shareholders' equity
Series A Junior Participating Preferred
Stock, $.10 par value, 200,000 shares
authorized, no shares issued
Common stock, $.05 par value, 20,000,000
shares authorized, 9,073,520 and 9,055,026
shares issued and outstanding 454 453
Paid-in capital 84,595 84,431
Retained earnings 39,211 37,385
_______ _______
Total shareholders' equity 124,260 122,269
_______ _______
Total liabilities and shareholders'
equity $195,531 $203,946
======= =======
The accompanying notes are an integral part of the financial statements.
VICORP Restaurants, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Three
Months Months
Ended Ended
__________ __________
January 31, January 31,
1997 1996
__________ __________
(unaudited)
Revenues
Restaurant operations $83,102 $88,410
Franchise operations 828 871
______ ______
Total revenues 83,930 89,281
______ ______
Costs and expenses
Restaurant operations
Food 27,287 31,928
Labor 25,829 28,923
Other operating 21,308 23,403
General and administrative 6,047 5,594
______ ______
Operating profit (loss) 3,459 (567)
Interest expense 757 1,130
Other (income) expense, net (151) (232)
______ ______
Income (loss) before income
tax expense (benefit) 2,853 (1,465)
Income tax expense (benefit) 1,027 (549)
______ ______
Net income (loss) $ 1,826 $ (916)
====== ======
Earnings (loss) per common and dilutive
common equivalent share $ .20 $ (.10)
====== ======
Weighted average common shares and
dilutive common share equivalents 9,162 9,045
====== ======
The accompanying notes are an integral part of the financial statements.
VICORP Restaurants, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three Three
Months Months
Ended Ended
_________ _________
January 31, January 31,
1997 1996
_________ _________
(unaudited)
Operations
Net income (loss) $ 1,826 $ (916)
Reconciliation to cash provided by operations
Depreciation and amortization 4,989 5,415
Deferred income tax provision 757 (557)
Loss on disposition of assets 32 28
Other, net (120) (47)
______ _____
7,484 3,923
Change in assets and liabilities
Trade receivables 1,464 (131)
Inventories 1,279 2,548
Accounts payable, trade (2,144) (5,203)
Other current assets and liabilities (1,087) (1,556)
Non-current accrued insurance (478) (335)
_______ _______
Cash provided by (used for) operations 6,518 (754)
_______ _______
Investing activities
Purchase of property and equipment (1,370) (1,743)
Purchase of other assets (37) (1)
Disposition of property 954 44
Collection of non-trade receivables 175 230
______ _______
Cash provided by (used for)
investing activities (278) (1,470)
______ _______
Financing activities
Issuance of debt 0 10,000
Payment of debt and capitalized lease
obligations (5,969) (9,238)
Other, net 164 95
______ ______
Cash provided by (used for) financing
activities (5,805) 857
______ ______
Increase/(Decrease) in cash 435 (1,367)
Cash at beginning of period 1,406 3,988
______ ______
Cash at end of period $1,841 $ 2,621
====== ======
Supplemental information
Cash paid during the period for
Interest (net of amount capitalized) $ 451 $ 1,055
Income taxes 35 77
The accompanying notes are an integral part of the financial statements.
VICORP Restaurants, Inc.
NOTES TO FINANCIAL STATEMENTS (unaudited)
_____________________________
1. The consolidated financial statements should be read in conjunction with
the annual report to shareholders for the year ended October 31, 1996.
The unaudited financial statements for the three months ended January 31,
1997 and January 31, 1996 contain all adjustments which, in the opinion
of management, were necessary for a fair statement of the results for the
interim periods presented. All of the adjustments included were of a
normal and recurring nature.
2. As of January 31, 1997, the Company had $19,000,000 of
borrowings outstanding and $4,916,000 of letters of credit
placed under its bank credit facility. The Company's bank
credit agreement expires on October 31, 1999, but may be
extended for one year.
3. In the fourth quarter of 1994, the Company adopted a plan to
dispose of 50 restaurant locations in trade areas that are no
longer considered appropriate for the Company's existing
concepts. As part of the disposal plan, the carrying value of
those restaurants' assets were written down to net realizable
values. The Company also accrued for expected carrying costs
pending disposition and sublease disposition losses. In the
third quarter of fiscal 1996, the Company recorded an asset
disposal charge related to a decision to close and dispose of
six of its Angel's Diners. As of the end of fiscal 1996, the
Company had closed all the restaurants related to both disposal
plans. Forty stores have been disposed through sublease, lease
termination or sale. Operating results for the closed
restaurants for first quarter of fiscal 1996 were as follows:
Three months ended
January 31, 1996
________________
Sales $2,268,000
Store operating profit (loss) (402,000)
During the first quarter of 1997, $479,000 of closure and
carrying related costs were charged against the liability
established for such costs. Partially offsetting the charges
are gains on properties sold. As of January 31, 1997,
the Company had $8,861,000 of reserves remaining to provide for
the disposal of 22 closed properties and 13 subleased properties.
Units classified as subleased may return to closed status upon
sublease termination. The reserves consisted of $6,114,000 to
reduce the disposal property to net realizable value and $2,747,000
to provide for expected carrying costs and sublease losses.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of operations
_____________________
The Company's quarterly financial information is subject to
seasonal fluctuation.
Restaurant operations
The following table sets forth certain operating information for
the Company's operating concepts and the Company as a whole.
Three months Three months
ended ended
January 31, 1997 January 31, 1996
________________ ________________
Bakers Square
Restaurant sales $ 50,435,000 $ 54,141,000
Restaurant operating profit 3,356,000 54,000
Restaurant operating profit % 6.7% .1%
Divisional administrative costs 1,131,000 854,000
Divisional operating profit (loss) 2,225,000 (800,000)
Restaurants at quarter-end 152 158
Village Inn
Restaurant sales $ 32,285,000 $ 32,534,000
Restaurant operating profit 5,348,000 4,392,000
Restaurant operating profit % 16.6% 13.5%
Franchise income 828,000 871,000
Divisional administrative costs 778,000 593,000
Divisional operating profit 5,398,000 4,670,000
Restaurants at quarter-end 98 99
Angel's
Restaurant sales $ 382,000 $ 1,735,000
Restaurant operating profit (loss) (26,000) (290,000)
Restaurant operating profit % (6.8%) (16.7%)
Divisional administrative costs 6,000 110,000
Divisional operating profit (loss) (32,000) (400,000)
Restaurants at quarter-end 1 5
Consolidated
Restaurant sales $ 83,102,000 $ 88,410,000
Food cost % 32.8% 36.1%
Labor cost % 31.1% 32.7%
Other operating cost % 25.6% 26.5%
Restaurant operating profit % 10.4% 4.7%
Restaurant operating profit 8,678,000 4,156,000
Franchise income 828,000 871,000
Divisional general and
administrative costs 1,915,000 1,557,000
___________ ___________
Divisional operating profit 7,591,000 3,470,000
___________ ___________
Unallocated general and
administrative costs 4,132,000 4,037,000
___________ ___________
Operating profit (loss) $ 3,459,000 $ (567,000)
============ ==========
Consolidated restaurant sales decreased $5.3 million, or 6.0%, in
the first fiscal quarter of 1997 compared to the first quarter of
1996. Contributing to lower sales was the closure of 11.3
equivalent restaurants.
During the first fiscal quarter of 1997, sales decreased 2.9% and
guest counts declined 1.4% on a comparable same store basis. Same
store sales for Village Inn decreased .2% and Bakers Square's same
store sales contracted by 4.6%. Comparable guest counts for
Village Inn decreased .2% and Bakers Square declined 2.4%.
Improvements in sales and guest counts early in the first quarter
over the same period in 1996 were offset by severe weather
conditions in the strategic midwest and west coast markets during
the later half of the quarter.
Consolidated restaurant operating profit increased $4.5 million,
or 108.8%, and increased as a percentage of restaurant sales from
4.7% to 10.4% in the first quarter of 1997 versus the first
quarter of 1996. Although both Village Inn and Bakers Square
contributed to the improvement, Bakers Square went from breakeven
to 6.7% and represented the majority of the increase. The
improved operating profit was largely due to operating
efficiencies in food, labor and other costs. Also, the closure of
underperforming restaurants contributed to the improved results.
The following presents select quarterly trend data related to the
operations of Bakers Square and Village Inn:
Bakers Square Village Inn
_____________ ___________
Comparable Comparable
Comparable Store Store Comparable Store Store
Store Guest Operating Store Guest Operating
Sales Counts Margin Sales Counts Margin
________________________________ _________________________________
1996:
1st Qtr -7.6% -0.3% 0.1% 0.0% -0.8% 13.5%
2nd Qtr 1.1% 0.0% 4.0% 4.4% 3.5% 13.7%
3rd Qtr 0.5% -4.5% 6.8% 2.4% 2.9% 15.6%
4th Qtr -3.6% -4.3% 7.7% 0.1% 0.7% 17.7%
1997:
1st Qtr -4.6% -2.4% 6.7% -0.2% -0.2% 16.6%
As of January 31, 1997, the Company had closed all of the 56
restaurants scheduled for disposition under plans adopted in
fiscal 1994 and fiscal 1996. The following table details sales
and operating results for the 56 restaurants for the first quarter
of fiscal 1996:
Three months
1996
____
Operating
Sales Profit (Loss)
_____ _____________
Bakers Square $861,000 $(160,000)
Village Inn 221,000 (6,000)
Angel's 1,186,000 (236,000)
____________________________________________________
Total $2,268,000 $(402,000)
====================================================
Other revenues and expense
__________________________
Franchise revenue decreased in 1997's first quarter by $43,000.
The decrease was largely the result of a decrease in royalties
related to adoption of a revised franchise agreement by several
existing franchisees as well as lower franchise sales income and
net sublease and equipment income.
General and administration expense increased to 7.2% of revenues
in the first quarter of 1997 from 6.3% last year. The percentage
increase results from 1) lower revenues, 2) accrued management
bonuses due to a profitable first quarter versus a loss last year,
and 3) increased severance and relocation expenses.
Interest expense declined 33% or $373,000 for the first quarter of
1997 due to reduced credit line borrowings.
The Company's effective tax rate for the first quarter of 1997 was
36% representing statutory tax rates offset somewhat by the effect
of FICA tax credits.
Liquidity and capital resources
_______________________________
Operating cash flows increased $7.3 million in the first quarter
of 1997 versus 1996 first quarter. The increase resulted
primarily from improved operating results and reduced working
capital requirements.
As of January 31, 1997, $19,000,000 of advances were outstanding
under the Company's bank credit facility and approximately
$16,100,000 was available for additional direct advances, subject
to limitations on combined direct advances and letters of credit.
In the first quarter of 1997, the Company reduced its outstanding
borrowings by $5.5 million. The Company's bank credit agreement
expires on October 31, 1999, but may be extended for one year.
During the first quarter of 1997, the Company disposed of five
properties, two through sale, and three through sublease. Also in
that quarter, closure and carrying costs of $479,000 were charged
against the liability established for such and cash proceeds of
$1,433,000 were realized from the disposition of properties.
At January 31, 1997, the Company had 22 closed properties remaining which
it was trying to sell or sublease. Seven of those properties were owned in
fee and the rest were leased. The Company also had 13 subleased properties.
The Company hopes to sell the fee properties over the next year and $5.3
million of proceeds are expected to be realized from their sale. The Company
does not anticipate significant proceeds from the disposition of the leased
properties. It is expected that the majority of the leased properties will
be subleased over the next twelve to eighteen months. Cash carrying costs
of approximately $2.7 million are expected to be incurred over that period.
The Company expects to sublease five of the properties at rentals
lower than the Company's obligations under the prime leases.
Those sublease losses will be incurred over the remaining years of
the leases and the Company does not anticipate that the losses
will materially affect the Company's liquidity.
As of January 31, 1997, authorizations granted by the Board of
Directors for the purchase of 300,500 common shares of the
Company's common stock remained available. No shares were
purchased in the first quarter of 1997. Future purchases with
respect to the authorizations may be made from time to time in the
open market or through privately negotiated transactions and will
be dependent upon various business and financial considerations.
Capital expenditures approximating $16.6 million are expected
during the remainder of the fiscal year. The level of planned
expenditures may be reduced if expected operating improvements do
not occur. Cash provided by operations, the unused portion of the
Company's bank credit facility and other financing sources are
expected to be adequate to fund these expenditures and any cash
outlays for the purchase of the Company's common stock as
authorized by the Board.
VICORP has guaranteed certain leases for (25) restaurant
properties sold to others in 1986 and (20) restaurant leases of
certain franchisees and others. Minimum future rental payments
remaining under these leases were approximately $11.5 million as of
October 31, 1996. These guarantees are included in the definition
of financial instruments with off-balance-sheet risk of accounting
loss; however, the Company has not been required to make any
payments with respect to these guarantees and presently has no
reason to believe any payments will be required in the future.
The Company believes it is impracticable to estimate the fair
value of these financial guarantees (e.g., amounts the Company
could pay to remove the guarantees) because the Company has no
present intention or need to attempt settlement of any of the
guarantees.
Outlook
- -------
The Company is evaluating various alternative investment
strategies for utilizing cash flow from operations. These
alternatives include, but may not be limited to, new Village Inn
restaurant properties, paydown of credit facility debt, repurchase
of common stock, and acquisition of restaurant concerns in the
family style segment.
Certain matters disucssed in this report are "forward-looking statements"
intended to qualify for the safe harbors from liability established by the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements can generally be identified as such because the context of the
statement will include words such as the Company "believes," "anticipates,"
"expects" or words of similar import. Similarly, statements that describe
the Company's future plans, objectives or goals are also forward-looking
statements. Such forward-looking statements are subject to certain risks
and uncertainties which are described in close proximity to such statements
and which could cause actual results to differ materially from those
currently anticipated. Shareholders, potential investors and other readers
are urged to consider these factors carefully in evaluating the forward-
looking statements and are cautioned not to place undue reliance on such
forward-looking statements. The Forward-looking statements made herein are
only made as of the date of this report and the Company undertakes no
obligation to publicly update such forward-looking statements to reflect
subsequent events or circumstances.
PART II - OTHER INFORMATION
Item 6: Exhibits and Reports on Form 8-K.
(a) Exhibits
(10) Material Contracts.
(i) First Amendment and Waiver to Multi-Bank Agreement and Single Bank
Agreement dated March 3, 1997 to U. S. $35,000,000 Credit Agreement
dated October 31, 1996, between VICORP Restaurants, Inc. and
NationsBank of Texas, N.A. and Colorado National Bank, and U. S.
$5,000,000 Credit Agreement dated October 31, 1996, between VICORP
Restaurants, Inc. and NationsBank of Texas, N.A.
(27) Financial data schedule.
(b) Reports on Form 8-K.
None.
SIGNATURES
__________
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
VICORP Restaurants, Inc.
------------------------
(Registrant)
March 14, 1997 By: /s/ J. Michael Jenkins
__________________
J. Michael Jenkins, President and
Chief Executive Officer
March 14, 1997 By: /s/ Richard E. Sabourin
___________________
Richard E. Sabourin, Executive
Vice President/CFO
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM VICORP
RESTAURANTS, INC. CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS
AS OF JANUARY 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000703799
<NAME> VICORP RESTAURANTS, INC
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> JAN-31-1997
<CASH> 1,841
<SECURITIES> 0
<RECEIVABLES> 1,719
<ALLOWANCES> 0
<INVENTORY> 5,238
<CURRENT-ASSETS> 14,926
<PP&E> 281,660
<DEPRECIATION> 146,106
<TOTAL-ASSETS> 195,531
<CURRENT-LIABILITIES> 31,307
<BONDS> 27,658
0
0
<COMMON> 454
<OTHER-SE> 123,806
<TOTAL-LIABILITY-AND-EQUITY> 195,531
<SALES> 83,102
<TOTAL-REVENUES> 83,930
<CGS> 27,287
<TOTAL-COSTS> 27,287
<OTHER-EXPENSES> 47,137
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 757
<INCOME-PRETAX> 2,853
<INCOME-TAX> 1,027
<INCOME-CONTINUING> 1,826
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,826
<EPS-PRIMARY> .20
<EPS-DILUTED> .20
</TABLE>
March 3, 1997
Vicorp Restaurants, Inc.
400 West 48th Avenue
Denver, Colorado 80216
Attention: Stanley Ereckson, Jr.
Re: First Amendment and Waiver to Multi-Bank Agreement and
Single Bank Agreement
Ladies and Gentlemen:
Reference is made to (a) that certain $35,000,000
Credit Agreement dated as of October 31, 1996 (the "Multi-
Bank Agreement"), among Vicorp Restaurants, Inc.
("Borrower"), the financial institutions named therein as
lenders ("Lenders"), and NationsBank of Texas, N.A.
("NationsBank"), as Agent for Lenders, and (b) that certain
$5,000,000 Credit Agreement dated as of October 31, 1996
(the "Single Bank Agreement") between Borrower and
NationsBank. Unless otherwise indicated, all capitalized
terms herein are used as defined in the Multi-Bank
Agreement.
Borrower has advised NationsBank and Lenders that (a)
Borrower has established a payroll account (the "Payroll
Account") with Wells Fargo Bank, N.A., pursuant to
documentation which provides that Wells Fargo Bank, N.A., has
a security interest in the monies in the Payroll Account
(the "Subject Transaction"), and (b) certain real property
owned by Borrower has been the subject of an eminent domain
condemnation proceeding (the "Condemnation Proceeding")
which resulted in compensation to Borrower in the
approximate amount of $1,100,000.
Borrower has asked NationsBank and Lenders to consent
to the Subject Transaction, and to amend, modify and waive
certain provisions of Section 7.02 of the Multi-Bank Agreement and
Section 6.02 of the Single-Bank Agreement relating to the Subject
Transaction, the Condemnation Proceeding and certain other matters.
Therefore, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, Borrower, NationsBank and
Lenders agree as follows:
1. Amendments.
a. Section 7.02(a)(ii)(D) of the Multi-Bank
Agreement and Section 6.02 of the Single Bank Agreement
regarding Liens, is hereby amended by deleting
"$20,000,000" in the last line of such Section and
inserting in lieu thereof "$24,000,000".
b. Section 7.02(e) of the Multi-Bank Agreement
and Section 6.02 of the Single Bank Agreement regarding
Guarantees is hereby amended by deleting the word "and"
prior to subclause (ii) thereof, and adding a new
subclause (iii) at the end of such section, as follows:
"and (iii) existing guarantees as disclosed on
Schedule 7.02(b)."
c. Schedule 7.02(b) of the Multi-Bank Agreement
is hereby amended by deleting such schedule in its
entirety and inserting in lieu thereof the new Schedule
7.02(b) attached hereto.
2. Consent and Waivers.
a. NationsBank and Lenders consent to the
Subject Transaction and agree not to enforce any of
their rights or remedies under Section 7.02(a)(ii) of
the Multi-Bank Agreement and Section 6.02 the Single
Bank Agreement relating to a prohibition against
certain Liens on Borrower's property that will be
created as a result of Borrower's entry into the
Subject Transaction; provided that on any given day the
balance in the Payroll Account may never exceed
$500,000, and the total amount on deposit less the
amount subject to payment orders issued by Borrower
shall never exceed $10,000.
b. NationsBank and Lenders agree not to enforce
any of their rights and remedies under Section
7.02(h)(ii)(C) of the Multi-Bank Agreement and Section
6.02 of the Single Bank Agreement relating to a
mandatory prepayment in the event of certain asset
dispositions that will otherwise be required as a
result of the Condemnation Proceeding.
3. No Waiver of Defaults. Borrower agrees that this
letter does not constitute a wavier of, or a consent to, any
present or future violation of or noncompliance with any
provision of any Loan Document, or a wavier of NationsBank's
and Lender's right to insist upon future compliance with
each term, covenant, condition and provision of the Loan
Documents, and the Loan Documents shall continue to be
binding upon, and inure to the benefit of, Borrower,
NationsBank and Lenders and their respective successors and
assigns.
4. Representations and Warranties. Borrower
represents and warrants to NationsBank and Lenders that (a)
the execution and delivery of this letter have been
authorized by all requisite corporate action on its part and
will not violate its organization documents, (b) the
representations and warranties in each Loan Document to
which it is a party are true and correct in all material
respects on and as of the date hereof as though made on and
as of the date hereof (except to the extent that (i) such
representations and warranties speak to a specific date or
(ii) the facts on which such representations and warranties
are based have been changed by transactions contemplated by
the Loan Documents or this letter), and (c) it is in full
compliance with all covenants and agreements contained in
each Loan Document to which it is a party (except for
noncompliance permitted by this letter).
5. Loan Document; Effect. This letter is a Loan
Document, and, therefore, this letter is subject to the
applicable provisions of Article IX of the Multi-Bank
Agreement and Article VIII of the Single Bank Agreement, all
of which applicable provisions are incorporated herein by
reference the same as if set forth herein verbatim. Except
as affected by this letter, the Loan Documents are unchanged
and continue in full force and effect. Borrower agrees that
all Loan Documents to which it is a party remain in full
force and effect and continue to evidence its legal, valid,
and binding obligations enforceable in accordance with their
terms (as the same are affected by this letter). Borrower
hereby releases NationsBank and Lenders from any liability
for actions or failures to act in connection with the Loan
Documents prior to the date hereof. This letter shall be
binding upon and inure to the benefit of each of the
undersigned and their respective successors and permitted
assigns.
6. Multiple Counterparts. This letter may be
executed in more than one counterpart, 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.
7. Fees and Expenses. Borrower agrees to pay the
reasonable fees and expenses of counsel to NationsBank and
Lenders rendered in connection with the preparation,
negotiation and execution of this letter.
8. Final Agreement. THE LOAN DOCUMENTS, AS AMENDED
HEREBY, REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENT OF THE
PARTIES. THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.
This letter shall not become effective unless and until
NationsBank receives copies executed by Borrower,
NationsBank and each Lender in the spaces provided below.
If you are in agreement with the foregoing, please so
indicate by executing the enclosed counterparts of this
letter in the spaces provided below and returning them to
NationsBank to the attention of the officer named below.
Very truly yours,
NATIONSBANK OF TEXAS, N.A. COLORADO NATIONAL BANK
By: /s/ Kimberly Knop By: /s/ Andres C. Koeneke
_________________________ _______________________________
Kimberly Knop Andres C. Koeneke
Vice President Vice President
AGREED AND ACCEPTED:
VICORP RESTAURANTS, INC.
By: /s/ Michael R. Kinnen
____________________________________
Name: Michael R. Kinnen
__________________________________
Title: Vice President/Treasurer
_________________________________
SCHEDULE 7.02(b)
PERMITTED EXISTING DEBT
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1. Promissory note of VICORP Restaurants, Inc. in the
original principal amount of $249,642.00 dated January
16, 1996 payable to the Morton A. Ives Trust.
2. Existing capital lease obligations totaling $10,928,000
as of 7/31/96 (per attached)
3. Existing Guarantees totaling $5,976,727 (per attached)
4. Existing Guarantees of obligations relating to
properties previously disposed of not exceeding $4,000,000
