August 30, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Room 1004
Judiciary Plaza
Washington, D.C. 20549
RE: El Chico Restaurants, Inc. 8-K for
Gentlemen:
We are transmitting electronically the Form 8-K for El Chico Restaurants,
Inc. for the filing of certain exhibits.
We are also forwarding three complete copies, one of which is manually
signed, to the National Association of Securities Dealers, Inc.
Sincerely,
Susan R. Holland
Treasurer/Controller
/ktc
cc: National Assoc. of Securities Dealers, Inc.
(w/enclosures)
Lawrence E. White
John A. Cuellar
Ron Frappier
Darl Hatfield
Britt Langford
<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8 - K
CURRENT REPORT
Pursuant to Section 13 Of 15(d) of the Securities Exchange Act of 1934
Date of Report
August 30, 1996
EL CHICO RESTAURANTS, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Texas
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(State or other jurisdiction of incorporation)
0-12802 75-0982250
------------------------ ----------------------------------
(Commission File Number) (I.R.S Employer Identification No.)
12200 Stemmons Freeway, Suite 100, Dallas, Texas 75234
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(Address of principal executive offices)
(Zip Code)
(214) 241-5500
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(Registrant's telephone number, including area code)
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(Former name, former address, if changed since last report)
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<PAGE>
PART II. OTHER INFORMATION
Item 5. Other Events
This Form 8-K is being filed hereby to effect the filing of
the exhibits contained herein.
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.
EL CHICO RESTAURANTS, INC.
Date: August 30, 1996 By: /s/Susan R. Holland
---------------------
Treasurer/Controller
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Exhibit
10.0 Loan Agreement between El Chico
Restaurants, Inc. and Texas Commerce
Bank, National Association
Dated as of September 21, 1993
10.1 First Amendment to Loan Agreement
between El Chico Restaurants, Inc. and
Texas Commerce Bank, National Association
Dated as of January 20, 1994
10.2 Second Amendment to Loan Agreement
between El Chico Restaurants, Inc. and
Texas Commerce Bank, National Association
Dated as of August 18, 1994
10.3 Third Amendment to Loan Agreement
between El Chico Restaurants, Inc. and
Texas Commerce Bank, National Association
Dated as of December 21, 1994
10.4 Fourth Amendment to Loan Agreement
between El Chico Restaurants, Inc. and
Texas Commerce Bank, National Association
Dated as of February 15, 1996
10.5 Fifth Amendment to Loan Agreement
between El Chico Restaurants, Inc. and
Texas Commerce Bank, National Association
Dated as of August 14, 1996
********************************************************************
EL CHICO RESTAURANTS, INC.
LOAN AGREEMENT
Dated as of September 21, 1993
$9,000,000 Revolving Line of Credit
$1,000,000 Letter of Credit Facility
TEXAS COMMERCE BANK, NATIONAL ASSOCIATION
********************************************************************
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I - Definitions. . . . . . . . . . . . . . . . . . . 1
Section 1.1. Definitions . . . . . . . . . . . . . . 1
Section 1.2. Other Definitional Provisions.. . . . 9
ARTICLE II - Revolving Credit Loan . . . . . . . . . . . . . 9
Section 2.1. Commitment. . . . . . . . . . . . . . . 9
Section 2.2. Revolving Credit Note . . . . . . . . . 9
Section 2.3. Repayment of Revolving Credit Loan . 10
Section 2.4. Interest. . . . . . . . . . . . . . . . 10
Section 2.5. Borrowing Procedure . . . . . . . .. . 10
Section 2.6. Use of Proceeds . . . . . . . .. . . . 10
Section 2.7. Commitment Fee. . . . . . .. . . . . . 10
Section 2.8. Reduction or Termination of Applicable
Committed Sum. . . .. . . . . . . . . . 11
Section 2.9. Facility Fee. . . . . . . . . . . . . . 11
ARTICLE III - Term Loan. . . . . . . . . . . . . . . . . . . 11
Section 3.1. Commitment. . . . . . . . . . . . . . . 11
Section 3.2. Term Note . . . . . . . . . . . . . . . 11
Section 3.3. Repayment of Term Loan. . . . . . . . . 11
Section 3.4. Interest. . . . . . . . . . . . . . . . 12
Section 3.5. Borrowing Procedure . . . . . . . . . . 12
Section 3.6. Use of Proceeds . . . .. . . . . . . . 12
ARTICLE IV - Letters of Credit . . . . . . . . . . . . . . . 12
Section 4.1. Letters of Credit . . . .. . . . . . . 12
Section 4.2. Procedure for Issuing Letters of Credit.13
Section 4.3. Payments. . . . . . . . . . . . . . . . 13
Section 4.4. Letter of Credit Fee. . . . . . . . . . 13
Section 4.5. Letter of Credit Documents. . . . . . . 13
ARTICLE V - Payments . . . . . . . . . . . . . . . . . . . . 13
Section 5.1. Method of Payment . . . . . . . . . . . 13
Section 5.2. Prepayment. . . . . . . . . . . . . . . 14
ARTICLE VI - Interest Provisions; Capital Adequacy .. . . . 14
Section 6.1. Computation of Interest . . . . . . . . 14
Section 6.2. Conversions and Continuations . . . . . 14
Section 6.3. Limitation on Eurodollar Advances . . . 14
Section 6.4. Capital Adequacy. . . . . ... . . . . 15
ARTICLE VII - Conditions Precedent . . . . . . . . . . . . . 16
Section 7.1. Initial Extension of Credit . . . . . . 16
Section 7.2. All Extensions of Credit. . . . . . . . 18
Section 7.3. Term Loan . . . . . . . . . . . . . . . 18
ARTICLE VIII - Representations and Warranties. .. . . . . . 19
Section 8.1. Corporate Existence . . . . .. . . . . 19
Section 8.2. Financial Statements. . . . . . . . . . 20
Section 8.3. Corporate Action; No Breach . . . . . . 20
Section 8.4. Operation of Business . . . . . . . . . 20
Section 8.5. Litigation and Judgments. . . . . . . . 20
Section 8.6. Rights in Properties; Liens . . . . .. 21
Section 8.7. Enforceability. . . . . . . . . . . . . 21
Section 8.8. Approvals . . . . . . . . . . . . . . . 21
Section 8.9. Debt. . . . . . . . . . . . . . . . . . 21
Section 8.10. Taxes . . . . . . . . . . . . . . . . . 21
Section 8.11. Use of Proceeds; Margin Securities . . 21
Section 8.12. ERISA . . . . . . . . . . . . . . . . . 21
Section 8.13. Disclosure. . . . . . . . . . . . . . . 22
Section 8.14. Subsidiaries. . . . . . . . . . . . . . 22
Section 8.15. Compliance with Laws; Environmental
Liabilities. . . . . .. . .. . . . . . 22
ARTICLE IX - Positive Covenants. . . . . . . . . . . .. . . 22
Section 9.1. Reporting Requirements. . . . . .. . . 22
Section 9.2. Maintenance of Existence; Conduct of Business 24
Section 9.3. Maintenance of Properties . . . . . . . 24
Section 9.4. Taxes and Claims. . . . . . . . . . . . 24
Section 9.5. Insurance . . . . . . . . . . . . . . . 24
Section 9.6. Inspection Rights . . . . . . . . . . . 25
Section 9.7. Keeping Books and Records . . . . . . . 25
Section 9.8. Compliance with Laws and Agreements 25
Section 9.9. Further Assurances. . . . . . . . . . . 25
Section 9.10. ERISA . . . . . . . . . . . . . . . . . 26
ARTICLE X - Negative Covenants . . . ... . . . . . . . . . 26
Section 10.1. Debt. . . . . . . .. . . . . . . . . . 26
Section 10.2. Limitation on Liens .. . . . . . . . . 26
Section 10.3. Mergers, Etc. . . . . .. . . . . . . . 27
Section 10.4. Restricted Payments . . .. . . . . . . 28
Section 10.5. Loans and Investments . . .. . . . . . 28
Section 10.6. Transactions With Affiliates.. . . . . 28
Section 10.7. Disposition of Assets . . . . ... . . 28
Section 10.8. Nature of Business. . . . . . . . . . . 28
Section 10.9. Environmental Protection. . . . . . . . 28
Section 10.10. Accounting. . . . . . . . . . . . . . . 29
ARTICLE XI - Financial Covenants . . . . . . . . . . . . . . 29
Section 11.1. Current Ratio . . . . . . . . . . . . . 29
Section 11.2. Coverage Ratio. . . . . . . . . . . . . 29
ARTICLE XII - Default. . . . . . . . . . . . . . . . . . . . 29
Section 12.1. Events of Default . . . . . . . . . . . 29
Section 12.2. Changes in Management . . . . . . . . . 31
Section 12.3. Remedies Upon Default . . . . . . . . . 31
Section 12.4. Setoff. . . . . . . . . . . . . . . . . 32
Section 12.5. Performance by the Lender . . . . . . . 32
ARTICLE XIII - Miscellaneous . . . . . .. . . . . . . . . . 32
Section 13.1. Expenses. . . . . . .. . . . . . . . . 32
Section 13.2. Indemnification . . . .. . . . . . . . 33
Section 13.3. Limitation of Liability .. . . . . . . 33
Section 13.4. No Waiver; Cumulative Remedies.. . . . 33
Section 13.5. Successors and Assigns. . . . . .. . . 33
Section 13.6. Survival. . . . . . . . . . . . . . . . 33
Section 13.7. ENTIRE AGREEMENT; AMENDMENT . . . . . . 34
Section 13.8. Maximum Interest Rate . . . . . . . . . 34
Section 13.9. Notices . . . . . . . . . . . . . . . . 34
Section 13.10. Governing Law; Venue; Service of Process 35
Section 13.11. Counterparts. . . . . . . .. . . . . . 35
Section 13.12. Severability. . . . . .. . . . .. . . 35
Section 13.13. Headings. . . . . . . . .. . . . .. . 35
Section 13.14. Non-Application of Chapter 15 of Texas
Credit Code. . . . . . . . . ... . . . 35
Section 13.15. Participations. . . . . .. . . . . . . 35
Section 13.16. Construction. . . . . . . .. . . . . . 35
<PAGE>
LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of September 21, 1993, is between EL
CHICO RESTAURANTS, INC., a Texas corporation (the "Borrower"), and TEXAS
COMMERCE BANK, NATIONAL ASSOCIATION, a national banking association (the
"Lender").
R E C I T A L S:
The Borrower has requested the Lender to extend credit to the
Borrower in the form of (i) revolving credit advances, to be converted
into a term loan as herein provided, and (ii) letters of credit. The
Lender is willing to make such extensions of credit to the Borrower upon
the terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1. Definitions. As used in this Agreement, the
following terms have the following meanings:
"Additional Costs" has the meaning specified in Section 6.3.
"Adjusted CMLTD" means the greater of (a) current maturities
of long-term Debt determined in accordance with GAAP or (b) ten
percent (10%) of the outstanding Advances.
"Advance" means an advance of funds by the Lender to the
Borrower pursuant to Article II or Article III.
"Advance Request Form" means a certificate, in substantially
the form of Exhibit "C-1" hereto for the Revolving Credit Loan and
Exhibit "C-2" hereto for the Term Loan, properly completed and
signed by the Borrower requesting an Advance.
"Affiliate" means, as to any Person, any other Person (a)
that directly or indirectly, through one or more intermediaries,
controls or is controlled by, or is under common control with, such
Person; (b) that directly or indirectly beneficially owns or holds
five percent (5%) or more of any class of voting stock of such
Person; or (c) five percent (5%) or more of the voting stock of
which is directly or indirectly beneficially owned or held by the
Person in question. The term "control" means the possession,
directly or indirectly, of the power to direct or cause direction
of the management and policies of a Person, whether through the
ownership of voting securities, by contract, or otherwise;
provided, however, in no event shall the Lender be deemed an
Affiliate of the Borrower or any of its Subsidiaries.
"Applicable Committed Sum" means: (a) from and including the
date hereof to and including September 8, 1994, Seven Million Five
Hundred Thousand and No/100 Dollars ($7,500,000.00), and (b)
thereafter, Nine Million and No/100 Dollars ($9,000,000.00), as
such amounts may be reduced pursuant to Section 2.8.
"Applicable Rate" means: (a) during the period that an
Advance is a Prime Rate Advance, the Prime Rate plus the Prime Rate
Margin; and (b) during the period that an Advance is a Eurodollar
Advance, the Eurodollar Rate plus the Eurodollar Rate Margin.
"Capital Lease Obligations" means, as to any Person, the
obligations of such Person to pay rent or other amounts under a
lease of (or other agreement conveying the right to use) real
and/or personal property, which obligations are required to be
classified and accounted for as a capital lease on a balance sheet
of such Person under GAAP. For purposes of this Agreement, the
amount of such Capital Lease Obligations shall be the capitalized
amount thereof, determined in accordance with GAAP.
"Code" means the Internal Revenue Code of 1986, as amended,
and the regulations promulgated and rulings issued thereunder.
"Commitment" means the obligation of the Lender to (a) make
Advances pursuant to Section 2.1 in an aggregate principal amount
at any time outstanding up to but not exceeding the Applicable
Committed Sum, and (b) issue Letters of Credit pursuant to
Section 4.1 in an aggregate face amount at any time outstanding up
to but not exceeding One Million and No/100 Dollars
($1,000,000.00), as such obligation may be reduced or terminated
pursuant to Section 12.2 or otherwise.
"Consolidated Current Assets" means, at any particular time,
all amounts which, in conformity with GAAP, would be included as
current assets on a consolidated balance sheet of the Borrower and
the Subsidiaries.
"Consolidated Current Liabilities" means, at any particular
time, all amounts which, in conformity with GAAP, would be included
as current liabilities on a consolidated balance sheet of the
Borrower and the Subsidiaries, except current maturities of
long-term Debt.
"Conversion Date" has the meaning specified in Section 3.1.
"Coverage Ratio" means the ratio of (a) the sum of (i)
consolidated net income of Borrower and the Subsidiaries determined
in accordance with GAAP, plus (ii) depreciation, amortization and
interest expense of Borrower and the Subsidiaries on a consolidated
basis, plus (iii) provision for taxes of Borrower and the
Subsidiaries on a consolidated basis, less taxes actually paid,
plus (iv) operating lease expense of Borrower and the Subsidiaries
on a consolidated basis, to (b) the sum of (i) interest expense of
Borrower and the Subsidiaries on a consolidated basis, plus (ii)
Adjusted CMLTD, plus (iii) operating lease expense of Borrower and
the Subsidiaries on a consolidated basis.
"Current Ratio" means the ratio of Consolidated Current
Assets to Consolidated Current Liabilities.
"Debt" means as to any Person at any time (without
duplication): (a) all obligations of such Person for borrowed
money, (b) all obligations of such Person evidenced by bonds,
notes, debentures, or other similar instruments, (c) all
obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable of such Person
arising in the ordinary course of business that are not past due
by more than ninety (90) days, (d) all Capital Lease Obligations
of such Person, (e) all Debt or other obligations of others
Guaranteed by such Person, (f) all obligations secured by a Lien
existing on property owned by such Person, whether or not the
obligations secured thereby have been assumed by such Person or are
non-recourse to the credit of such Person, (g) all reimbursement
obligations of such Person (whether contingent or otherwise) in
respect of letters of credit, bankers' acceptances, surety or other
bonds and similar instruments, and (h) all liabilities of such
Person in respect of unfunded vested benefits under any Plan.
"Default" means an Event of Default or the occurrence of an
event or condition which with notice or lapse of time or both would
become an Event of Default.
"Default Rate" means the Maximum Rate or, if no Maximum Rate
exists, the sum of the Prime Rate in effect from day to day plus
six percent (6%).
"Dollars" and "$" mean lawful money of the United States of
America.
"Environmental Laws" means any and all federal, state, and
local laws, regulations, and requirements pertaining to health,
safety, or the environment.
"Environmental Liabilities" means all liabilities,
obligations, responsibilities, remedial actions, losses, damages,
costs, expenses, fines, penalties, sanctions, and interest arising
from environmental, health or safety conditions or the release or
threatened release of a Hazardous Material into the environment,
resulting from the past, present, or future operations of Borrower
or any Subsidiary.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations and
published interpretations thereunder.
"ERISA Affiliate" means any corporation or trade or business
which is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the Code) as the Borrower
or is under common control (within the meaning of Section 414(c)
of the Code) with the Borrower.
"Eurodollar Advances" means Advances that bear interest at
rates determined on the basis of the rates referred to in the
definition of "Eurodollar Rate" in this Section 1.1.
"Eurodollar Rate" means, for any Eurodollar Advance for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/16 of 1%) determined by the Lender to
be equal to LIBOR for such Eurodollar Advance for such Interest
Period.
"Eurodollar Rate Margin" means: (a) three-quarters of one
percent (.75%) at all times when the Coverage Ratio is greater than
1.8 to 1.0, and (b) one and three-quarters of one percent (1.75%)
at all times when the coverage ratio is less than or equal to 1.8
to 1.0.
"Event of Default" has the meaning specified in Section 12.1.
"Funded Debt" means as to any Person at any time: (a) all
obligations of such Person for borrowed money, and (b) all Capital
Lease Obligations of such Person.
"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 the date in question.
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.
"General Partner" has the meaning specified in Section 10.3.
"Governmental Authority" means any nation or government, any
state or political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory, or administrative
functions of or pertaining to government.
"Guarantee" by any Person means any obligation, contingent
or otherwise, of such Person directly or indirectly guaranteeing
any Debt or other obligation of any other Person and, without
limiting the generality of the foregoing, any obligation, direct
or indirect, contingent or otherwise, of such Person (a) to
purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether arising by
virtue of partnership arrangements, by agreement to keep-well, to
purchase assets, goods, securities or services, to take-or-pay, or
to maintain financial statement conditions or otherwise) or (b)
entered into for the purpose of assuring in any other manner the
obligee of such Debt or other obligation of the payment thereof or
to protect the obligee against loss in respect thereof (in whole
or in part), provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding
meaning.
"Guarantors" means, collectively, the Subsidiaries specified
on Schedule 6 and any and all other Subsidiaries which hereafter
execute a Guaranty in favor of the Lender.
"Guaranties" means, collectively, the guaranties of each of
the Guarantors, each in substantially the form of Exhibit "H"
hereto, as the same may be amended, supplemented or modified from
time to time.
"Hazardous Material" means any substance, product, waste,
pollutant, material, chemical, contaminant, constituent, or other
material which is or becomes listed, regulated, or addressed under
any Environmental Law, including, without limitation, asbestos,
petroleum, and polychlorinated biphenyls.
"IBOR" means, for any Eurodollar Advance for any Interest
Period therefor, the interest rate per annum (rounded upwards, if
necessary, to the nearest 1/16th of 1%) determined by Lender at or
before 11:00 a.m. Dallas, Texas time (or as soon thereafter as
practicable) two Business Days prior to the first day of such
Interest Period, to be the annual rate of interest at which Dollar
deposits are offered to Lender by prime banks in whatever
Eurodollar interbank market may be selected by Lender in its sole
discretion, acting in good faith, at the time of determination in
accordance with the then existing practice in such market for
delivery on the first day of such Interest Period, in immediately
available funds having a term comparable to such Interest Period
and in an amount comparable to the principal amount of the
Eurodollar Advance to which such Interest Period relates.
"Interest Period" means, with respect to any Eurodollar
Advance, each period commencing on the date such Advance is made
or converted from a Prime Rate Advance or, in the case of each
subsequent, successive Interest Period applicable to a Eurodollar
Advance, the last day of the next preceding Interest Period with
respect to such Advance, and ending on the numerically
corresponding day in the first, second, third or sixth calendar
month thereafter, as Borrower may select as provided in Section 2.5
or Section 6.2 hereof, except that each Interest Period which
commences on the last Business Day of a calendar month (or on any
day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last
Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (a) each Interest Period which would
otherwise end on a day which is not a Business Day shall end on the
next succeeding Business Day (or, if such succeeding Business Day
falls in the next succeeding calendar month, on the next preceding
Business Day); (b) any Interest Period for Advances under the
Revolving Credit Loan which would otherwise extend beyond the
Revolver Termination Date shall end on the Revolver Termination
Date; (c) any Interest Period for Advances under the Term Loan
which would otherwise extend beyond the Maturity Date shall end on
the Maturity Date, and (d) no Interest Period for any Eurodollar
Advance shall have a duration of less than one month and, if the
Interest Period for any Eurodollar Advance would otherwise be a
shorter period, such Advance shall not be available hereunder.
"L/C Application" has the meaning specified in Section 4.1.
"L/C Documents" has the meaning specified in Section 4.1.
"Letter of Credit" means any letter of credit issued by the
Lender for the account of the Borrower, including without
limitation any and all letters of credit issued pursuant to
Article IV.
"Letter of Credit Request Form" means a certificate, in
substantially the form of Exhibit "D" hereto, properly completed
and signed by the Borrower requesting issuance of a Letter of
Credit.
"LIBOR" means, for any Eurodollar Advance for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary,
to the nearest 1/16th of 1%) quoted by Lender at approximately
11:00 a.m. London time (or as soon thereafter as practicable) two
Business Days prior to the first day of such Interest Period for
the offering by Lender to leading banks in the London interbank
market of Dollar deposits in immediately available funds having a
term comparable to such Interest Period and in an amount comparable
to the principal amount of the Eurodollar Advance to which such
Interest Period relates. If in the good faith judgment of Lender,
LIBOR cannot be established or quoted at any time, or otherwise at
Lender's election, IBOR may be substituted for LIBOR.
"Lien" means any lien, mortgage, security interest, tax lien,
financing statement, pledge, charge, hypothecation, assignment,
preference, priority, or other encumbrance of any kind or nature
whatsoever (including, without limitation, any conditional sale or
title retention agreement), whether arising by contract, operation
of law, or otherwise.
"Limited Partner" has the meaning specified in Section 10.3.
"Limited Partnership" has the meaning specified in
Section 10.3.
"Loan Documents" means this Agreement, the L/C Documents and
all promissory notes, letters of credit, and other instruments,
documents, and agreements 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.
"Maturity Date" means 11:00 a.m., Dallas, Texas time on
December 31, 1998, or such earlier date on which the Obligations
shall become due as provided in this Agreement.
"Maximum Rate" means, at any time, the maximum rate of
interest under applicable law that the Lender may charge the
Borrower. The Maximum Rate shall be calculated in a manner that
takes into account any and all fees, payments, and other charges
in respect of the Loan Documents that constitute interest under
applicable law. Each change in any interest rate provided for
herein based upon the Maximum Rate resulting from a change in the
Maximum Rate shall take effect without notice to the Borrower at
the time of such change in the Maximum Rate. For purposes of
determining the Maximum Rate under Texas law, the applicable rate
ceiling shall be the indicated rate ceiling described in, and
computed in accordance with, Article 5069-1.04, Vernon's Texas
Civil Statutes.
"Multiemployer Plan" means a multiemployer plan defined as
such in Section 3(37) of ERISA to which contributions have been
made by the Borrower or any ERISA Affiliate and which is covered
by Title IV of ERISA.
"Notes" means the Revolving Credit Note and the Term Note and
all extensions, renewals, and modifications thereof.
"Notice of Rate Adjustment" has the meaning specified in
Section 6.3.
"Obligations" means all obligations, indebtedness, and
liabilities of the Borrower to the Lender, now existing or
hereafter arising, whether direct, indirect, related, unrelated,
fixed, contingent, liquidated, unliquidated, joint, several, or
joint and several, including, without limitation, the obligations,
indebtedness, and liabilities of the Borrower under this Agreement
and the other Loan Documents (including, without limitation, all
of the Borrower's contingent reimbursement obligations in respect
of Letters of Credit), and all interest accruing thereon and all
attorneys' fees and other expenses incurred in the enforcement or
collection thereof.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to all or any of its functions under ERISA.
"Person" means any individual, corporation, business trust,
association, company, partnership, joint venture, Governmental
Authority, or other entity.
"Plan" means any employee benefit or other plan established
or maintained by the Borrower or any ERISA Affiliate and which is
covered by Title IV of ERISA.
"Prime Rate" means the Prime Rate as announced from time to
time by Lender and thereafter entered in the minutes of Lender's
Loan and Discount Committee, automatically fluctuating upward or
downward with each announcement without notice to Borrower or any
other Person. Borrower understands that the Prime Rate may not be
Lender's best or lowest rate or a favored rate, and any statement,
representation or warranty to that effect is expressly disclaimed
by Lender.
"Prime Rate Advances" means Advances that bear interest at
rates based upon the Prime Rate.
"Prime Rate Margin" means: (a) zero percent (0%) at all
times when the Coverage Ratio is greater than 1.8 to 1.0, and (b)
one-half of one percent (.50%) at all times when the Coverage Ratio
is less than or equal to 1.8 to 1.0.
"Principal Office" means the principal office of the Lender,
presently located at 2200 Ross Avenue, Post Office Box 660197,
Dallas, Texas 75266-0197.
"Prohibited Transaction" means any transaction set forth in
Section 406 of ERISA or Section 4975 of the Code.
"Quarterly Payment Date" means the last day of each March,
June, September, and December of each year, the first of which
shall be the first such day after the date of this Agreement.
"Regulation D" means Regulation D of the Board of Governors
of the Federal Reserve System as the same may be amended or
supplemented from time to time.
"Regulatory Change" means, with respect to the Lender, any
change after the date of this Agreement in United States federal,
state, or foreign laws or regulations (including Regulation D) or
the adoption or making after such date of any interpretations,
directives, or requests applying to a class of banks including the
Lender of or under any United States federal or state, or any
foreign, laws or regulations (whether or not having the force of
law) by any court or governmental or monetary authority charged
with the interpretation or administration thereof.
"Reportable Event" means any of the events set forth in
Section 4043 of ERISA.
"Revolver Termination Date" means 11:00 a.m. Dallas, Texas
time on December 31, 1996, or such earlier date on which the
Commitment of the Lender to make Advances under the Revolving
Credit Loan terminates as provided in this Agreement.
"Revolving Credit Loan" has the meaning specified in
Section 2.1.
"Revolving Credit Note" means the promissory note payable to
the order of the Lender, in substantially the form of Exhibit "A"
hereto, and all extensions, renewals, and modifications thereof.
"Subsidiary" means (a) any corporation of which at least a
majority of the outstanding shares of stock having by the terms
thereof ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether or not at
the time stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening
of any contingency) is at the time directly or indirectly owned or
controlled by the Borrower or one or more of the Subsidiaries or
by the Borrower and one or more of the Subsidiaries, and (b) the
Limited Partnership from and after its formation.
"Term Loan" has the meaning specified in Section 3.1.
"Term Note" means the promissory note of the Borrower,
payable to the order of the Lender, in substantially the form of
Exhibit "B" hereto, and all extensions, renewals, and modifications
thereof.
"UCC" means the Uniform Commercial Code as in effect in the
State of Texas.
Section 2. Other Definitional Provisions. All definitions
contained in this Agreement are equally applicable to the singular and
plural forms of the terms defined. The words "hereof", "herein", and
"hereunder" and words of similar import referring to this Agreement refer
to this Agreement as a whole and not to any particular provision of this
Agreement. Unless otherwise specified, all Article and Section
references pertain to this Agreement. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP.
Terms used herein that are defined in the UCC, unless otherwise defined
herein, shall have the meanings specified in the UCC.
ARTICLE II
Revolving Credit Loan
Section 1. Commitment. Subject to the terms and conditions of
this Agreement, the Lender agrees to make Advances (the "Revolving Credit
Loan") to the Borrower from time to time from the date hereof to and
including the Revolver Termination Date, provided that the aggregate
amount of all Advances at any time and from time to time outstanding
shall not exceed the Applicable Committed Sum. Subject to the foregoing
limitations, and the other terms and provisions of this Agreement, the
Borrower may borrow, repay, and reborrow hereunder.
Section 2. Revolving Credit Note. The obligation of the
Borrower to repay the Revolving Credit Loan shall be evidenced by the
Revolving Credit Note executed by the Borrower, payable to the order of
the Lender, in the principal amount of Nine Million and No/100 Dollars
($9,000,000.00), and dated the date hereof.
Section 3. Repayment of Revolving Credit Loan. The Borrower
shall repay the outstanding principal amount of the Revolving Credit Loan
on the Revolver Termination Date unless such outstanding principal amount
is converted into the Term Loan pursuant to Article III.
Section 4. Interest. The Revolving Credit Loan shall bear
interest prior to maturity at a varying rate per annum equal from day to
day to the lesser of (a) the Maximum Rate, or (b) the Applicable Rate.
If at any time the Applicable Rate shall exceed the Maximum Rate, thereby
causing the interest accruing on the Revolving Credit Loan to be limited
to the Maximum Rate, then any subsequent reduction in the Applicable Rate
shall not reduce the rate of interest on the Revolving Credit Loan below
the Maximum Rate until the aggregate amount of interest accrued on the
Revolving Credit Loan equals the aggregate amount of interest which would
have accrued on the Revolving Credit Loan if the Applicable Rate had at
all times been in effect. Accrued and unpaid interest on the Revolving
Credit Loan shall be due and payable as provided in the Revolving Credit
Note.
Section 5. Borrowing Procedure. The Borrower shall give the
Lender notice of each Advance under the Revolving Credit Loan, by means
of an Advance Request Form containing the information required therein,
at least one (1) Business Day before the requested date of each Prime
Rate Advance and at least two (2) Business Days before the requested date
of each Eurodollar Advance. The Lender at its option may from time to
time accept telephonic requests for Advances, provided that such
acceptance shall not constitute a waiver of the Lender's right to require
delivery of an Advance Request Form in connection with subsequent
Advances. Any telephonic request for an Advance shall be promptly
confirmed by submission of a properly completed Advance Request Form to
the Lender. Subject to the terms and conditions of this Agreement, each
Advance under the Revolving Credit Loan shall be made available to the
Borrower by depositing the same, in immediately available funds, in an
account of the Borrower maintained with the Lender at the Principal
Office designated by the Borrower. All notices under this Section shall
be irrevocable and shall be given not later than 11:00 a.m. Dallas,
Texas, time on the day which is not less than the number of Business Days
specified above for such notice.
Section 6. Use of Proceeds. The proceeds of the Advances shall
be used by the Borrower primarily (a) for capital expenditures related
to the construction of new restaurant units, remodeling of existing
units, and purchase of Borrower's current corporate headquarters
facility, (b) to pay in full the outstanding principal balance of and
accrued but unpaid interest on that certain promissory note dated
September 24, 1991, executed by Borrower and payable to the order of Bank
One, Texas, National Association in the original principal amount of
$1,275,000, having an outstanding principal balance of $1,051,875 as of
the date hereof, and (c) to purchase properties which are currently
leased by Borrower under leases existing on the date hereof.
Section 7. Commitment Fee. The Borrower agrees to pay to the
Lender a commitment fee on the daily average unused amount of the
Applicable Committed Sum for the period from and including the date of
this Agreement to and including the earlier of the Revolver Termination
Date or the Conversion Date, at the rate of one-quarter of one percent
(.25%) per annum based on a 360 day year and the actual number of days
elapsed. Accrued commitment fee shall be payable in arrears on each
Quarterly Payment Date and on the earlier of the Revolver Termination
Date or the Conversion Date.
Section 8. Reduction or Termination of Applicable Committed Sum.
The Borrower shall have the right to terminate in whole or reduce in part
the unused portion of the Applicable Committed Sum upon at least three
(3) Business Days prior notice (which notice shall be irrevocable) to the
Lender specifying the effective date thereof, whether a termination or
reduction is being made, and the amount of any partial reduction,
provided that each partial reduction shall be in the amount of $100,000
or an integral multiple thereof and the Borrower shall simultaneously
prepay the amount by which the unpaid principal amount of the Advances
exceeds the Applicable Committed Sum (after giving effect to such notice)
plus accrued and unpaid interest on the principal amount so prepaid. The
Applicable Committed Sum may not be reinstated after it has been
terminated or reduced.
Section 9. Facility Fee. The Borrower agrees to pay to the
Lender a facility fee in an amount equal to $10,000.00, which fee shall
be due and payable in full concurrently with the execution of this
Agreement.
ARTICLE III
Term Loan
Section 1. Commitment. Subject to the terms and conditions of
this Agreement, upon Borrower's request in accordance with Section 3.5,
the Revolving Credit Loan shall be converted into a term loan (the "Term
Loan") to be made in a single Advance on the date specified by the
Borrower (the "Conversion Date"), which date shall be on or before the
Revolver Termination Date. The Term Loan shall be in such amount as may
be requested by the Borrower, provided that the amount of the Term Loan
shall not exceed the Applicable Committed Sum.
Section 2. Term Note. The obligation of the Borrower to repay
the Term Loan shall be evidenced by the Term Note executed by the
Borrower, payable to the order of the Lender, in the principal amount of
the Term Loan, duly completed with all blanks appropriately filled in,
and dated the Conversion Date.
Section 3. Repayment of Term Loan. The Borrower shall repay the
unpaid principal amount of the Term Loan in equal consecutive
installments of principal, payable on each Quarterly Payment Date
occurring after the Conversion Date and on the Maturity Date. The amount
of such quarterly principal installments shall be determined by dividing
(a) the initial outstanding principal balance of the Term Loan by (b) the
number of Quarterly Payment Dates which would occur during an
amortization period selected by Borrower, but not to exceed ten (10)
years. Such amortization period selected by Borrower shall be solely for
the purpose of determining the amount of the quarterly installments of
principal under the Term Loan and shall not affect the maturity date of
the Term Loan, which shall be the Maturity Date.
Section 4. Interest. The unpaid principal amount of the Term
Loan shall bear interest prior to maturity at a varying rate per annum
equal from day to day to the lesser of (a) the Maximum Rate, or (b) the
Applicable Rate. If at any time the Applicable Rate shall exceed the
Maximum Rate, thereby causing the interest accruing on the Term Loan to
be limited to the Maximum Rate, then any subsequent reduction in the
Applicable Rate shall not reduce the rate of interest on the Term Loan
below the Maximum Rate until the aggregate amount of interest accrued on
the Term Loan equals the aggregate amount of interest which would have
accrued on the Term Loan if the Applicable Rate had at all times been in
effect. Accrued and unpaid interest on the Term Loan shall be due and
payable as provided in the Term Note.
Section 5. Borrowing Procedure. The Borrower shall give the
Lender at least two (2) Business Days prior notice of the Term Loan by
means of an Advance Request Form containing the information required
therein and specifying the amount of the Term Loan that is requested to
be made by the Lender on the Conversion Date pursuant to Section 3.1 and
the amortization period to be used to calculate the quarterly
installments of principal pursuant to Section 3.3.
Section 6. Use of Proceeds. The proceeds of the Term Loan shall
be used by the Borrower to renew and extend the outstanding principal of
the Revolving Credit Loan.
ARTICLE IV
Letters of Credit
Section 1. Letters of Credit. Subject to the terms and
conditions of this Agreement, the Lender agrees to issue one or more
Letters of Credit for the account of the Borrower from time to time from
the date hereof to and including the Maturity Date; provided, however,
that the aggregate face amounts of all outstanding Letters of Credit
issued hereunder shall not at any time exceed One Million and No/100
Dollars ($1,000,000.00). Each Letter of Credit shall have an expiration
date not to exceed one (1) year, shall not have an expiration date beyond
the Maturity Date, shall be payable in Dollars, shall have a minimum face
amount of Twenty-Five Thousand and No/100 Dollars ($25,000.00), must
support a transaction that is entered into in the ordinary course of the
Borrower's business, must be satisfactory in form and substance to the
Lender, and shall be issued pursuant to such documents and instruments
(including, without limitation, the Lender's standard application for
issuance of letters of credit as then in effect ["L/C Application"]) as
the Lender may require (collectively, the "L/C Documents"). A copy of
the form of L/C Application which is in effect as of the date hereof is
attached hereto as Exhibit "F". However, the form of L/C Application may
be changed by Lender from time to time without notice to Borrower.
Section 2. Procedure for Issuing Letters of Credit. Each Letter
of Credit shall be issued on at least five (5) Business Days prior notice
from the Borrower to the Lender by means of a Letter of Credit Request
Form describing the transaction proposed to be supported thereby and
specifying (a) the requested date of issuance (which shall be a Business
Day), (b) the face amount of the Letter of Credit, (c) the expiration
date of the Letter of Credit, (d) the name and address of the
beneficiary, and (e) the form of the draft and any other documents
required to be presented at the time of any drawing (such notice to set
forth the exact wording of such documents or to attach copies thereof).
Section 3. Payments. All amounts paid by the Lender pursuant
to any drawing under a Letter of Credit shall be paid and reimbursed by
Borrower in accordance with the terms of the L/C Application executed in
connection with such Letter of Credit and shall bear interest as provided
in such L/C Application.
Section 4. Letter of Credit Fee. The Borrower shall pay to the
Lender a non-refundable letter of credit fee in an amount equal to the
greater of three-quarters of one percent (.75%) per annum of the face
amount of such Letter of Credit or $500 per annum, for the period during
which such Letter of Credit will remain outstanding, based on a 360 day
year and the actual number of days elapsed. Such letter of credit fee
shall be payable quarterly in advance, commencing on the date of issuance
of such Letter of Credit and on the first day of each January, April,
July and October thereafter while such Letter of Credit is outstanding.
Section 5. Letter of Credit Documents. Certain additional
provisions regarding the obligations, liabilities, rights, remedies and
agreements of the Borrower and the Lender relative to the Letters of
Credit shall be set forth in the L/C Documents.
ARTICLE V
Payments
Section 1. Method of Payment. All payments of principal,
interest, and other amounts to be made by the Borrower under this
Agreement and the other Loan Documents shall be made to the Lender at the
Principal Office in Dollars and immediately available funds, without
setoff, deduction, or counterclaim, not later than 11:00 a.m., Dallas,
Texas time on the date on which such payment shall become due (each such
payment made after such time on such due date to be deemed to have been
made on the next succeeding Business Day). The Borrower shall, at the
time of making each such payment, specify to the Lender the sums payable
by the Borrower under this Agreement and the other Loan Documents to
which such payment is to be applied (and in the event the Borrower fails
to so specify, or if an Event of Default has occurred and is continuing,
the Lender may apply such payment to the Obligations in such order and
manner as it may elect in its sole discretion). Whenever any payment
under this Agreement or any other Loan Document shall be stated to be due
on a day that is not a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such
case be included in the computation of the payment of interest and
commitment fee, as the case may be.
Section 2. Prepayment. The Borrower may prepay the Advances in
whole at any time or from time to time in part without premium or penalty
but with accrued interest to the date of prepayment on the amount so
prepaid, provided that (a) Eurodollar Advances may be prepaid only on the
last day of the Interest Period for such Advances, and (b) each partial
prepayment shall be in the principal amount of $100,000 or an integral
multiple thereof and shall be applied to installments of principal in
inverse order of maturity.
ARTICLE VI
Interest Provisions; Capital Adequacy
Section 1. Computation of Interest. Interest on the Advances
and all other amounts payable by the Borrower hereunder shall be computed
on the basis of a year of 360 days and the actual number of days elapsed
(including the first day but excluding the last day) unless such
calculation would result in a usurious rate, in which case interest shall
be calculated on the basis of a year of 365 or 366 days, as the case may
be.
Section 2. Conversions and Continuations. Borrower shall have
the right from time to time to convert all or part of one type of Advance
into another type of Advance or to continue all or any part of any
Eurodollar Advance by giving Lender written notice at least two (2)
Business Days before such conversion or continuation specifying: (i) the
conversion or continuation date, (ii) the amount of the Advance to be
converted or continued, and (iii) in the case of a continuation of or
conversion into a Eurodollar Advance, the duration of the Interest Period
applicable thereto; provided, however, that (a) Eurodollar Advances may
only be converted on the last day of the Interest Period, and (b) no
conversions to Eurodollar Advances shall be made while a Default has
occurred and is continuing. All notices given under this Section shall
be irrevocable and shall be given not later than 11:00 a.m. Dallas, Texas
time on the day which is not less than two (2) Business Days prior to the
date of the requested conversion or continuation. If Borrower shall fail
to give Lender the notice specified above for continuation or conversion
of a Eurodollar Advance prior to the end of the Interest Period with
respect thereto, such Eurodollar Advance shall automatically be converted
into a Prime Rate Advance on the last day of the Interest Period for such
Eurodollar Advance.
Section 3. Limitation on Eurodollar Advances.
(a) Anything herein to the contrary notwithstanding, if with
respect to any Eurodollar Advance for any Interest Period therefor,
Lender reasonably and in good faith determines that:
(i) neither adequate nor reasonable means exist for
ascertaining either LIBOR or IBOR for any Interest Period selected
by Borrower, or it becomes impracticable for Lender to obtain funds
(by selling to dealers corresponding Eurodollar funds) to make or
maintain any Eurodollar Advance, or Lender shall have determined
that neither LIBOR nor IBOR will adequately and fairly reflect the
cost to Lender of making, maintaining or funding a Eurodollar
Advance, then Lender shall promptly give notice to Borrower of such
determination (a "Notice of Rate Adjustment"), and any such Advance
shall thereupon be converted into a Prime Rate Advance; or
(ii) as a result of any Regulatory Change, it shall be
or become unlawful or impossible to make, maintain or fund any
Eurodollar Advance, Lender's obligation to make the affected
Eurodollar Advance shall be automatically cancelled, and each
affected Eurodollar Advance shall be automatically converted to a
Prime Rate Advance.
(b) Borrower shall pay to Lender in full, within ten (10)
Business Days of each request by Lender, such amounts as Lender may
determine to be necessary to compensate it for any costs incurred by
Lender which Lender determines are attributable to its making or
maintaining of any Eurodollar Advance, or any reduction in any amount
receivable by Lender hereunder in respect of any such Advance (such
increases in costs and reductions in amounts receivable being herein
called "Additional Costs"), resulting from any change in law which:
(i) changes the basis of taxation of any amounts
payable to Lender under this Agreement or any Note in respect
of any of such Advance (other than taxes imposed on the
overall net income of Lender);
(ii) imposes or modifies any reserve, special deposit,
minimum capital, capital ratio, or similar requirement relating to
any extensions of credit or other assets of, or any deposits with
or other liabilities or commitments of, Lender; or
(iii) imposes any other condition affecting this
Agreement or any Note.
Lender will give Borrower notice of any event occurring after the date
of this Agreement which will entitle Lender to compensation pursuant to
this Section promptly after it obtains knowledge thereof and determines
to request such compensation. Lender shall be entitled to compensation
under this Section only in respect of Additional Costs incurred after a
period of thirty (30) days after such notice has been given to Borrower.
Lender will furnish Borrower with a certificate setting forth the basis
and the amount of each request of Lender for compensation under this
Section. Determinations and allocations by the Lender for purposes of
this Section of the effect of any Regulatory Change on its costs of
maintaining its obligations to make Eurodollar Advances or on amounts
receivable by it in respect of Eurodollar Advances, and of the additional
amounts required to compensate Lender in respect of any Additional Costs,
shall be conclusive, provided that such determinations and allocations
are made on a reasonable basis.
Section 4. Capital Adequacy. If after the date hereof, the
Lender shall have determined that the adoption or implementation of any
applicable law, rule, or regulation regarding capital adequacy, or any
change therein, or any change in the interpretation or administration
thereof by any central bank or other Governmental Authority charged with
the interpretation or administration thereof, or compliance by the Lender
(or its parent) with any guideline, request, or directive regarding
capital adequacy (whether or not having the force of law) of any such
central bank or other Governmental Authority, has or would have the
effect of reducing the rate of return on the Lender's (or its parent's)
capital as a consequence of its obligations hereunder or the transactions
contemplated hereby to a level below that which the Lender (or its
parent) could have achieved but for such adoption, implementation,
change, or compliance (taking into consideration the Lender's policies
with respect to capital adequacy) by an amount deemed by the Lender to
be material, then from time to time, within ten (10) Business Days after
demand by the Lender, the Borrower shall pay to the Lender (or its
parent) such additional amount or amounts as will compensate the Lender
for such reduction. Lender will give Borrower notice of any event
occurring after the date of this Agreement which will entitle Lender to
compensation pursuant to this Section promptly after it obtains knowledge
thereof and determines to request such compensation. Lender shall be
entitled to compensation under this Section only in respect of reductions
of rate of return for periods after a period of thirty (30) days after
such notice has been given to Borrower. A certificate of the Lender
claiming compensation under this Section and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive,
provided that the determination thereof is made on a reasonable basis.
In determining such amount or amounts, the Lender may use any reasonable
averaging and attribution methods.
ARTICLE VII
Conditions Precedent
Section 1. Initial Extension of Credit. The obligation of the
Lender to make the initial Advance or issue the initial Letter of Credit
is subject to the condition precedent that the Lender shall have received
on or before the day of such Advance or Letter of Credit all of the
following, each dated (unless otherwise indicated) the date hereof, in
form and substance satisfactory to the Lender:
(a) Resolutions. Resolutions of the Board of Directors
of the Borrower and each Guarantor, certified by the Secretary or
an Assistant Secretary of such Person which authorize (i) the
execution, delivery, and performance by the Borrower of this
Agreement and the other Loan Documents to which the Borrower is or
is to be a party, and (ii) the execution, delivery, and performance
by each Guarantor of the Guaranty and other Loan Documents to which
such Guarantor is or is to be a party;
(b) Incumbency Certificate. Certificates of incumbency
certified by the Secretary or an Assistant Secretary of the
Borrower and each Guarantor, respectively, certifying the names of
(i) the officers of the Borrower authorized to sign this Agreement
and each of the other Loan Documents to which the Borrower is or
is to be a party (including the certificates contemplated herein)
together with specimen signatures of such officers, and (ii) the
officers of each Guarantor authorized to sign the Guaranty and
other Loan Documents to which such Guarantor is or is to be a party
(including the certificates contemplated herein) together with
specimen signatures of such officers;
(c) Articles of Incorporation. The articles of
incorporation of the Borrower and each Guarantor certified by the
Secretary of State of the state of incorporation of such Person and
dated within ten (10) days prior to the date of the initial Advance
or Letter of Credit;
(d) Bylaws. The bylaws of the Borrower and each
Guarantor certified by the Secretary or an Assistant Secretary of
such Person;
(e) Governmental Certificates. Certificates of the
appropriate government officials of the respective states of
incorporation of the Borrower and the Guarantors as to the
existence and good standing of the Borrower and each Guarantor and
certificates of the appropriate governmental officials of each
state where Borrower or any Guarantor owns properties, conducts
business or employs any Persons as to the qualification and good
standing of Borrower and Guarantors, respectively, in such
jurisdictions, each dated within ten (10) days prior to the date
of the initial Advance or Letter of Credit;
(f) Revolving Credit Note. The Revolving Credit Note
executed by the Borrower;
(g) Guaranties. The Guaranties executed by the
respective Guarantors;
(h) Lien Searches. The results of current Uniform
Commercial Code searches and tax and judgment lien searches showing
all financing statements and other documents or instruments on file
against the Borrower and the Guarantors in such jurisdictions as
Lender shall deem necessary;
(i) Opinion of Counsel. A favorable opinion of legal
counsel to the Borrower and the Guarantors acceptable to Lender,
as to the matters set forth in Exhibit "E-1" hereto, and such other
matters as the Lender may reasonably request;
(j) Facility Fee. Evidence that the facility fee
required by Section 2.9 shall have been paid in full by the
Borrower to the Lender;
(k) Guaranty Fees. Evidence that the Borrower shall have
agreed to pay to each Guarantor an annual guaranty fee in the
amount determined by Borrower and such Guarantor as specified on
Schedule 6 and shall have paid the guaranty fee for the first year
of the term of the Commitment; and
(l) Compliance Certificate. A certificate of the Chief
Executive Officer, the Chief Financial Officer or the Treasurer of
the Borrower, in the form of Exhibit "G" hereto.
Section 2. All Extensions of Credit. The obligation of the
Lender to make any Advance or issue any Letter of Credit (including the
initial Advance and the initial Letter of Credit) is subject to the
following additional conditions precedent:
(a) Request for Advance or Letter of Credit. The Lender
shall have received in accordance with Section 2.5 or 4.2, as the
case may be, an Advance Request Form or Letter of Credit Request
Form dated the date of such Advance or Letter of Credit and
executed by an authorized officer of the Borrower;
(b) No Default. No Default shall have occurred and be
continuing, or would result from such Advance or Letter of Credit;
(c) Representations and Warranties. All of the
representations and warranties contained in Article VIII hereof and
in the other Loan Documents shall be true and correct on and as of
the date of such Advance or Letter of Credit with the same force
and effect as if such representations and warranties had been made
on and as of such date; and
(d) L/C Documents. With respect to issuance of any
Letters of Credit, Lender shall have received all applicable L/C
Documents as required by Section 4.1, executed by Borrower.
Section 3. Term Loan. The obligation of the Lender to make the
Term Loan to the Borrower is subject to the conditions precedent
contained in Section 7.2 and to the additional condition precedent that
the Lender shall have received on or before the day of the making of the
Term Loan all of the following, each dated (unless otherwise indicated)
the day of the Term Loan, in form and substance satisfactory to the
Lender:
(a) Term Note. The Term Note executed by the Borrower;
(b) Resolutions. Resolutions of the Board of Directors
of the Borrower certified by the Secretary or an Assistant
Secretary of the Borrower which authorize the execution, delivery,
and performance of the Term Note and all other Loan Documents
delivered in connection with the Term Loan to which the Borrower
is or is to be a party;
(c) Incumbency Certificate. A certificate of incumbency
certified by the Secretary or an Assistant Secretary of the
Borrower certifying the names of the officers of the Borrower
authorized to sign the Term Note and all other Loan Documents
delivered in connection with the Term Loan together with specimen
signatures of such officers;
(d) Certificate as to Corporate Documents. A certificate
of the Secretary or an Assistant Secretary of the Borrower
certifying as to the amendments, if any, to the articles of
incorporation and the bylaws of the Borrower delivered pursuant to
Section 7.1(c) and Section 7.1(d);
(e) Articles of Incorporation. If the certificate
delivered pursuant to Section 7.3(d) states that the articles of
incorporation of the Borrower have been amended, the articles of
incorporation of the Borrower certified by the Secretary of State
of the Borrower's state of incorporation and dated within ten (10)
days prior to the Conversion Date;
(f) Governmental Certificates. Certificates of the
appropriate governmental officials of the state of incorporation
of the Borrower as to the existence and good standing of the
Borrower, each dated within ten (10) days prior to the Conversion
Date;
(g) Guaranties. Such documents, certificates and
information as Lender may reasonably request regarding the
Guarantors or the Guaranties;
(h) Lien Searches. The results of updated Uniform
Commercial Code searches and tax and judgment lien searches showing
all financing statements and other documents or instruments on file
against the Borrower and the Guarantors in such jurisdictions as
Lender shall deem necessary; and
(i) Opinion of Counsel. A favorable opinion of Jenkens &
Gilchrist, or other legal counsel to the Borrower and the
Guarantors acceptable to the Lender, as to the matters set forth
in Exhibit "E-2" hereto and such other matters as the Lender may
reasonably request.
ARTICLE VIII
Representations and Warranties
To induce the Lender to enter into this Agreement, the Borrower
represents and warrants to the Lender that:
Section 1. Corporate Existence. The Borrower and each
Subsidiary (a) is (i) a corporation duly organized, validly existing, and
in good standing under the laws of the jurisdiction of its incorporation
or (ii) a partnership duly formed and validly existing under the laws of
the jurisdiction of its formation; (b) has all requisite power and
authority to own its assets and carry on its business as now being or as
proposed to be conducted; and (c) is qualified to do business in all
jurisdictions in which the nature of its business makes such
qualification necessary and where failure to so qualify would have a
material adverse effect on its business, condition (financial or
otherwise), operations, prospects, or properties. The Borrower has the
corporate power and authority to execute, deliver, and perform its
obligations under this Agreement and the other Loan Documents to which
it is or may become a party. Each Guarantor has the power and authority
to execute, deliver, and perform its obligations under the Guaranty and
other Loan Documents to which it is or may become a party.
Section 2. Financial Statements. The Borrower has delivered to
the Lender audited consolidated financial statements of the Borrower and
its Subsidiaries as at and for the fiscal year ended December 31, 1992
and unaudited consolidated financial statements of the Borrower and its
Subsidiaries for the six (6)-month period ended June 30, 1993. Such
financial statements have been prepared in accordance with GAAP and
fairly and accurately present, on a consolidated basis, the financial
condition of the Borrower and its Subsidiaries as of the respective dates
indicated therein and the results of operations for the respective
periods indicated therein. Neither the Borrower nor any of its
Subsidiaries has any material contingent liabilities, liabilities for
taxes, unusual forward or long-term commitments, or unrealized or
anticipated losses from any unfavorable commitments except as referred
to or reflected in such financial statements. There has been no material
adverse change in the business, condition (financial or otherwise),
operations, prospects, or properties of the Borrower or any of its
Subsidiaries since the effective date of the most recent financial
statements referred to in this Section.
Section 3. Corporate Action; No Breach. The execution,
delivery, and performance by the Borrower of this Agreement and the other
Loan Documents to which the Borrower is or may become a party, the
execution, delivery, and performance by each Guarantor of the Guaranty
and other Loan Documents to which such Guarantor is or may become a
party, and compliance with the terms and provisions hereof and thereof
have been duly authorized by all requisite corporate action on the part
of the Borrower and all requisite corporate or partnership action on the
part of each Guarantor and do not and will not (a) violate or conflict
with, or result in a breach of, or require any consent under (i) the
articles of incorporation, bylaws or partnership agreement of the
Borrower or any of the Subsidiaries, (ii) any applicable law, rule, or
regulation or any order, writ, injunction, or decree of any Governmental
Authority or arbitrator, or (iii) any agreement or instrument to which
the Borrower or any of the Subsidiaries is a party or by which any of
them or any of their property is bound or subject, or (b) constitute a
default under any such agreement or instrument, or result in the creation
or imposition of any Lien upon any of the revenues or assets of the
Borrower or any Subsidiary.
Section 4. Operation of Business. The Borrower and each of its
Subsidiaries possess all licenses, permits, franchises, patents,
copyrights, trademarks, and tradenames, or rights thereto, necessary to
conduct their respective businesses substantially as now conducted and
as presently proposed to be conducted, and the Borrower and each of its
Subsidiaries are not in violation of any valid rights of others with
respect to any of the foregoing.
Section 5. Litigation and Judgments. Except as disclosed on
Schedule 1 hereto, there is no action, suit, investigation, or proceeding
before or by any Governmental Authority or arbitrator pending, or to the
knowledge of the Borrower, threatened against or affecting the Borrower
or any Subsidiary, that would, if adversely determined, have a material
adverse effect on the business, condition (financial or otherwise),
operations, prospects, or properties of the Borrower or any Subsidiary
or the ability of the Borrower to pay and perform the Obligations. There
are no outstanding judgments against the Borrower or any Subsidiary.
Section 6. Rights in Properties; Liens. The Borrower and each
Subsidiary have good and indefeasible title to or valid leasehold
interests in their respective properties and assets, real and personal,
including the properties, assets, and leasehold interests reflected in
the financial statements described in Section 8.2, and none of the
properties, assets, or leasehold interests of the Borrower or any
Subsidiary is subject to any Lien, except as permitted by Section 10.2.
Section 7. Enforceability. This Agreement constitutes, and the
other Loan Documents to which the Borrower is party, when delivered,
shall constitute legal, valid, and binding obligations of the Borrower,
enforceable against the Borrower in accordance with their respective
terms, except as limited by bankruptcy, insolvency, or other laws of
general application relating to the enforcement of creditors' rights.
Section 8. Approvals. No authorization, approval, or consent
of, and no filing or registration with, any Governmental Authority or
third party is or will be necessary for the execution, delivery, or
performance by the Borrower of this Agreement and the other Loan
Documents to which the Borrower is or may become a party or the validity
or enforceability thereof.
Section 9. Debt. The Borrower and its Subsidiaries have no
Debt, except as disclosed on Schedule 2 hereto.
Section 10. Taxes. The Borrower and each Subsidiary have filed
all tax returns (federal, state, and local) required to be filed,
including all income, franchise, employment, property, and sales tax
returns, and have paid all of their respective liabilities for taxes,
assessments, governmental charges, and other levies that are due and
payable. The Borrower knows of no pending investigation of the Borrower
or any Subsidiary by any taxing authority or of any pending but
unassessed tax liability of the Borrower or any Subsidiary.
Section 11. Use of Proceeds; Margin Securities. Neither the
Borrower nor any Subsidiary is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose
of purchasing or carrying margin stock (within the meaning of
Regulations G, T, U, or X of the Board of Governors of the Federal
Reserve System), and no part of the proceeds of any Advance will be used
to purchase or carry any margin stock or to extend credit to others for
the purpose of purchasing or carrying margin stock.
Section 12. ERISA. The Borrower and each Subsidiary are in
compliance in all material respects with all applicable provisions of
ERISA. Neither a Reportable Event nor a Prohibited Transaction has
occurred and is continuing with respect to any Plan. No notice of intent
to terminate a Plan has been filed, nor has any Plan been terminated.
No circumstances exist which constitute grounds entitling the PBGC to
institute proceedings to terminate, or appoint a trustee to administer,
a Plan, nor has the PBGC instituted any such proceedings. Neither the
Borrower nor any ERISA Affiliate has completely or partially withdrawn
from a Multiemployer Plan. The Borrower and each ERISA Affiliate have
met their minimum funding requirements under ERISA with respect to all
of their Plans, and the present value of all vested benefits under each
Plan do not exceed the fair market value of all Plan assets allocable to
such benefits, as determined on the most recent valuation date of the
Plan and in accordance with ERISA. Neither the Borrower nor any ERISA
Affiliate has incurred any liability to the PBGC under ERISA.
Section 13. Disclosure. No statement, information, report,
representation, or warranty made by the Borrower in this Agreement or in
any other Loan Document or furnished to the Lender in connection with
this Agreement or any of the transactions contemplated hereby contains
any untrue statement of a material fact or omits to state any material
fact necessary to make the statements herein or therein not misleading.
There is no fact known to the Borrower which has a material adverse
effect, or which might in the future have a material adverse effect, on
the business, condition (financial or otherwise), operations, prospects,
or properties of the Borrower or any Subsidiary that has not been
disclosed in writing to the Lender.
Section 14. Subsidiaries. The Borrower has no Subsidiaries other
than those listed on Schedule 3 hereto, and Schedule 3 sets forth the
jurisdiction of incorporation of each Subsidiary and the percentage of
the Borrower's or any Subsidiary's ownership of the outstanding voting
stock or partnership interests of each Subsidiary.
Section 15. Compliance with Laws; Environmental Liabilities.
Neither the Borrower nor any Subsidiary is in violation in any material
respect of any law, rule, regulation, order, or decree of any
Governmental Authority or arbitrator, including without limitation any
Environmental Laws. Except as disclosed on Schedule 4 hereto, there are
no conditions or circumstances associated with the currently or
previously owned or leased properties or operations of the Borrower or
any of its Subsidiaries that has given or could reasonably be expected
to give rise to any Environmental Liabilities of the Borrower or any of
the Subsidiaries, and no Lien arising under any Environmental Law has
attached to any property or revenues of the Borrower or its Subsidiaries.
ARTICLE IX
Positive Covenants
The Borrower covenants and agrees that, as long as the Obligations
or any part thereof are outstanding or the Lender has any Commitment
hereunder, the Borrower will perform and observe the following positive
covenants, unless the Lender shall otherwise consent in writing:
Section 1. Reporting Requirements. The Borrower will furnish
to the Lender:
(a) Annual Financial Statements. As soon as available,
and in any event within one hundred twenty (120) days after the end
of each fiscal year of the Borrower, beginning with the fiscal year
ending December 31, 1993, (i) a copy of the annual audited
financial report of the Borrower and the Subsidiaries for such
fiscal year containing, on a consolidated basis, balance sheets and
statements of income, retained earnings, and cash flow as at the
end of such fiscal year and for the 12-month period then ended, in
each case setting forth in comparative form the figures for the
preceding fiscal year, all in reasonable detail and audited and
certified by, and accompanied by the unqualified opinion of,
independent certified public accountants of recognized standing
acceptable to the Lender, to the effect that such report has been
prepared in accordance with GAAP;
(b) Quarterly Financial Statements. As soon as
available, and in any event within forty-five (45) days after the
end of each of the first three (3) quarters of each fiscal year of
the Borrower, and within sixty (60) days after the end of the last
quarter of each fiscal year of Borrower, a copy of an unaudited
financial report of the Borrower and the Subsidiaries as of the end
of such fiscal quarter and for the portion of the fiscal year then
ended, containing, on a consolidated basis, balance sheets and
statements of income, retained earnings, and cash flow, in each
case setting forth in comparative form the figures for the
corresponding period of the preceding fiscal year, all in
reasonable detail certified by the chief financial officer or
treasurer of the Borrower to have been prepared in accordance with
GAAP and to fairly and accurately present (subject to year-end
audit adjustments) the financial condition and results of
operations of the Borrower and the Subsidiaries, on a consolidated
basis, at the date and for the periods indicated therein;
(c) Compliance Certificate. Concurrently with the
delivery of each of the financial statements referred to in
subsections 9.1(a) and 9.1(b), a certificate of the chief executive
officer, the chief financial officer or the treasurer of the
Borrower, in the form of Exhibit "G" hereto (i) stating that to the
best of such officer's knowledge, no Default has occurred and is
continuing, or if a Default has occurred and is continuing, a
statement as to the nature thereof and the action which is proposed
to be taken with respect thereto, and (ii) showing in reasonable
detail the calculations demonstrating compliance with Article XI;
(d) Annual Budget. Concurrently with the delivery of the
financial statements referred to in subsection 9.1(b) for the last
quarter of each fiscal year of the Borrower, an annual budget for
Borrower for the following fiscal year, in detail and format
reasonably satisfactory to Lender;
(e) Notice of Litigation. Promptly after the
commencement thereof, notice of all actions, suits, and proceedings
before any Governmental Authority or arbitrator affecting the
Borrower or any Subsidiary which, if determined adversely to the
Borrower or such Subsidiary, could have a material adverse effect
on the business, condition (financial or otherwise), operations,
prospects, or properties of the Borrower or such Subsidiary;
(f) Notice of Default. As soon as possible and in any
event within five (5) days after the occurrence of each Default,
a written notice setting forth the details of such Default and the
action that the Borrower has taken and proposes to take with
respect thereto;
(g) Notice of Material Adverse Change. As soon as
possible and in any event within five (5) days after Borrower
obtains actual knowledge of the occurrence thereof, written notice
of any matter that could have a material adverse effect on the
business, condition (financial or otherwise), operations,
prospects, or properties of the Borrower or any Subsidiary;
(h) Notice of Changes in Management. As soon as
possible, prior written notice of any material change or changes
in Borrower's management which Borrower anticipates that it will
institute or experience; and as soon as possible and in any event
within one (1) day after the occurrence thereof, written notice of
any unanticipated material change or changes in Borrower's
management; and
(i) General Information. Promptly, such other
information concerning the Borrower or any Subsidiary as the Lender
may from time to time reasonably request.
Section 2. Maintenance of Existence; Conduct of Business. The
Borrower will preserve and maintain, and will cause each Subsidiary to
preserve and maintain, its corporate or partnership existence, as the
case may be, and all of its leases, privileges, licenses, permits,
franchises, qualifications, and rights that are necessary or desirable
in the ordinary conduct of its business. The Borrower will conduct, and
will cause each Subsidiary to conduct, its business in an orderly and
efficient manner in accordance with good business practices.
Section 3. Maintenance of Properties. The Borrower will
maintain, keep, and preserve, and cause each Subsidiary to maintain,
keep, and preserve, all of its properties (tangible and intangible)
necessary or useful in the proper conduct of its business in good working
order and condition.
Section 4. Taxes and Claims. The Borrower will pay or
discharge, and will cause each Subsidiary to pay or discharge, at or
before maturity or before becoming delinquent (a) all taxes, levies,
assessments, and governmental charges imposed on it or its income or
profits or any of its property, and (b) all lawful claims for labor,
material, and supplies, which, if unpaid, might become a Lien upon any
of its property; provided, however, that neither the Borrower nor any
Subsidiary shall be required to pay or discharge any tax, levy,
assessment, or governmental charge which is being contested in good faith
by appropriate proceedings diligently pursued, and for which adequate
reserves have been established.
Section 5. Insurance. The Borrower will maintain, and will
cause each of the Subsidiaries to maintain, insurance with financially
sound and reputable insurance companies in such amounts and covering such
risks as is usually carried by corporations engaged in similar businesses
and owning similar properties in the same general areas in which the
Borrower and the Subsidiaries operate. Without in any way limiting the
foregoing, the Borrower will maintain and cause each Subsidiary to
maintain workers' compensation insurance (except as expressly provided
in this Section), property insurance, comprehensive general liability
insurance, products liability insurance, and business interruption
insurance reasonably satisfactory to the Lender. Notwithstanding the
foregoing, Borrower shall be permitted to take either of the following
courses of action in lieu of maintaining workers' compensation insurance,
provided that such course of action complies with the requirements set
forth in the first sentence of this Section and is selected by Borrower
in the exercise of prudent business judgment:
(a) maintain an alternative risk management plan which
is determined and established in accordance with prudent business
practices and provides for such employee benefits as are usual and
customary for corporations engaged in businesses similar to the
business of Borrower and the Subsidiaries which have elected not
to maintain workers' compensation insurance coverage, provided that
Borrower shall retain an independent, qualified and knowledgeable
consultant at least annually to consult with and assist Borrower
in determining the employee benefits which should be included in
a prudent and customary alternative risk management plan for
Borrower and the Subsidiaries; or
(b) self-insure as permitted by the Texas Workers'
Compensation Act, provided that Borrower complies with all
applicable requirements and provisions of the Texas Workers'
Compensation Act, including without limitation Art. 8308-3.51
through Art. 8308-3.70 thereof.
Section 6. Inspection Rights. With reasonable notification and
from time to time, the Borrower will permit, and will cause each
Subsidiary to permit, representatives of the Lender to examine, copy, and
make extracts from its books and records, to visit and inspect its
properties, and to discuss its business, operations, and financial
condition with its officers, employees, and independent certified public
accountants.
Section 7. Keeping Books and Records. The Borrower will
maintain, and will cause each Subsidiary to maintain, proper books of
record and account in which full, true, and correct entries in conformity
with GAAP shall be made of all dealings and transactions in relation to
its business and activities.
Section 8. Compliance with Laws and Agreements. The Borrower
will comply, and will cause each Subsidiary to comply, in all material
respects with all applicable laws, rules, regulations, orders, and
decrees of any Governmental Authority or arbitrator and all agreements,
contracts, and instruments binding on it or affecting its properties or
business.
Section 9. Further Assurances. The Borrower will, and will
cause each Subsidiary to, execute and deliver such further agreements and
instruments and take such further action as may be requested by the
Lender to carry out the provisions and purposes of this Agreement and the
other Loan Documents.
Section 10. ERISA. The Borrower will comply, and will cause each
Subsidiary to comply, with all minimum funding requirements, and all
other material requirements, of ERISA, if applicable, so as not to give
rise to any liability thereunder.
ARTICLE X
Negative Covenants
The Borrower covenants and agrees that, as long as the Obligations
or any part thereof are outstanding or the Lender has any Commitment
hereunder, the Borrower will perform and observe the following negative
covenants, unless the Lender shall otherwise consent in writing:
Section 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 Funded Debt, except:
(a) Funded Debt to the Lender; and
(b) Existing Funded Debt described on Schedule 2 hereto.
Section 2. Limitation on Liens. 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 Lien upon any of its
property, assets, or revenues, whether now owned or hereafter acquired,
except:
(a) Liens disclosed on Schedule 5 hereto, provided that
all Liens in favor of Bank One, Texas, N.A. or its predecessors
shall be released upon the initial Advance hereunder, and evidence
of such releases shall be provided to Lender within thirty (30)
days after such initial Advance is made;
(b) Liens in favor of the Lender;
(c) Encumbrances consisting of minor easements, zoning
restrictions, or other restrictions on the use of real property
that do not (individually or in the aggregate) materially affect
the value of the assets encumbered thereby or materially impair the
ability of the Borrower or the Subsidiaries to use such assets in
their respective businesses, and none of which is violated in any
material respect by existing or proposed structures or land use;
(d) Liens for taxes, assessments, or other governmental
charges which are not delinquent or which are being contested in
good faith and for which adequate reserves have been established;
(e) Liens of mechanics, materialmen, warehousemen,
carriers, or other similar statutory Liens securing obligations
that are not yet due and are incurred in the ordinary course of
business; and
(f) Liens resulting from good faith deposits to secure
payments of workmen's compensation or other social security
programs or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, or contracts (other
than for payment of Debt), or leases made in the ordinary course
of business.
Section 3. Mergers, Etc. Except as expressly provided in this
Section, the Borrower will not, and will not permit any Subsidiary to,
become a party to a merger or consolidation, or purchase or otherwise
acquire all or any part of the assets of any Person or any shares or
other evidence of beneficial ownership of any Person, or form any
Subsidiary, or wind-up, dissolve, or liquidate. Notwithstanding the
foregoing, Borrower shall be permitted to (a) form a corporation (the
"General Partner") to serve as general partner of a Delaware limited
partnership (the "Limited Partnership"), (b) form a corporation (the
"Limited Partner") to serve as limited partner of the Limited
Partnership, and (c) form the Limited Partnership, provided that:
(i) The Borrower shall own one hundred percent (100%)
of the issued and outstanding capital stock of the General Partner and
the Limited Partner;
(ii) The General Partner and the Limited Partner shall
own one hundred percent (100%) of the partnership interests of the
Limited Partnership;
(iii) The Limited Partner shall own no property or assets
other than its limited partnership interest in the Limited
Partnership and cash and investments in an amount not to exceed
$1,000;
(iv) Concurrently with such formation, the Borrower
shall deliver, or cause to be delivered, to the Lender the
following:
(1) a Guaranty executed by the General Partner, (2) a Guaranty
executed by the Limited Partnership, (3) evidence that Borrower has
agreed to pay to each of the General Partner and the Limited
Partnership an annual guaranty fee, in an amount determined by
Borrower, the General Partner and the Limited Partnership in the
manner specified on Schedule 6, and that the first annual portion
of such guaranty fee has been paid by the Borrower to each of the
General Partner and the Limited Partnership, (4) an amendment to
this Agreement, in form and substance satisfactory to the Lender,
amending Schedule 3 hereto to add the Limited Partner, the General
Partner and the Limited Partnership thereto and amending Schedule 6
to add the General Partner and the Limited Partnership thereto, (5)
such corporate and partnership documents and certificates as the
Lender may reasonably request, and (6) an opinion of Jenkens &
Gilchrist, or other legal counsel acceptable to Lender, as to such
matters as the Lender may reasonably request; and
(v) No Default or Event of Default shall have occurred
and be continuing.
Section 4. Restricted Payments. Except as expressly provided
in this Section, the Borrower will not declare or pay any dividends or
make any other payment or distribution (in cash, property, or
obligations) on account of its capital stock, or redeem, purchase,
retire, or otherwise acquire any of its capital stock, or permit any of
its Subsidiaries to purchase or otherwise acquire any capital stock of
the Borrower or another Subsidiary, or set apart any money for a sinking
or other analogous fund for any dividend or other distribution on its
capital stock or for any redemption, purchase, retirement, or other
acquisition of any of its capital stock. Notwithstanding the foregoing,
Borrower shall be permitted to (a) receive shares of its capital stock
tendered by optionees under Borrower's employee stock option plans and
employee stock bonus plans existing on the date hereof, or hereafter
established in the ordinary course of Borrower's business, in payment of
the exercise price for additional shares purchased by such optionees
under such plans, and (b) receive shares of its capital stock tendered
by recipients of stock under Borrower's employee stock bonus plans
existing on the date hereof, or hereafter established in the ordinary
course of Borrower's business, to Borrower for payment of withholding
taxes associated with the stock received by such recipient under such
plan.
Section 5. Loans and Investments. The Borrower will not make,
and will not permit any Subsidiary to make, any advance, loan, extension
of credit, or capital contribution to any Person, except those which are
made in the ordinary course of business and are not prohibited by
Section 10.6.
Section 6. Transactions With Affiliates. The Borrower will not
enter into, and will not permit any Subsidiary to enter into, any
transaction, including, without limitation, the purchase, sale, or
exchange of property or the rendering of any service, with any Affiliate
of the Borrower or such Subsidiary, except in the ordinary course of and
pursuant to the reasonable requirements of the Borrower's or such
Subsidiary's business and upon fair and reasonable terms no less
favorable to the Borrower or such Subsidiary than would be obtained in
a comparable arm's-length transaction with a Person not an Affiliate of
the Borrower or such Subsidiary. Further, the Borrower will not, and
will not permit any Subsidiary which is a Guarantor to, sell, lease,
assign, transfer or convey any of its properties or assets, or advance
any funds, to any Subsidiary or other Affiliate which is not a Guarantor.
Section 7. Disposition of Assets. The Borrower will not sell,
lease, assign, transfer, or otherwise dispose of any of its assets, or
permit any Subsidiary to do so with any of its assets, except
dispositions which are made in the ordinary course of business and are
not prohibited by Section 10.6.
Section 8. Nature of Business. The Borrower will not, and will
not permit any Subsidiary to, engage in any business other than the
businesses in which they are engaged as of the date hereof.
Section 9. Environmental Protection. Except in the ordinary
course of business of Borrower and the Subsidiaries and in compliance
with Environmental Laws, the Borrower will not, and will not permit any
of its Subsidiaries to, (a) use (or permit any tenant to use) any of
their respective properties or assets for the handling, processing,
storage, transportation, or disposal of any Hazardous Material, (b)
generate any Hazardous Material, or (c) conduct any activity that is
likely to cause a release or threatened release of any Hazardous
Material. The Borrower will not, and will not permit any of its
Subsidiaries to, conduct any activity or use any of their respective
properties or assets in any manner that is likely to violate any
Environmental Law or create any Environmental Liabilities for which the
Borrower or any of its Subsidiaries would be responsible.
Section 10. Accounting. The Borrower will not, and will not
permit any of its Subsidiaries to, (a) change its fiscal year, unless
Borrower shall have given Lender prior notice of such change, or (b) make
any material change (i) in accounting treatment or reporting practices,
except as required by GAAP and disclosed to the Lender, or (ii) in tax
reporting treatment, except as required by law and disclosed to the
Lender.
ARTICLE XI
Financial Covenants
The Borrower covenants and agrees that, as long as the Obligations
or any part thereof are outstanding or the Lender has any Commitment
hereunder, the Borrower will observe and perform the following financial
covenants, unless the Lender shall otherwise consent in writing:
Section 1. Current Ratio. The Borrower will at all times
maintain a Current Ratio of not less than .50 to 1.0.
Section 2. Coverage Ratio. The Borrower will at all times
maintain a Coverage Ratio of not less than 1.5 to 1.0 for each twelve
(12) month period ending on the last day of a fiscal quarter of Borrower.
ARTICLE XII
Default
Section 1. Events of Default. Each of the following shall be
deemed an "Event of Default":
(a) The Borrower shall fail to pay when due the
Obligations or any part thereof.
(b) Any representation or warranty made or deemed made
by the Borrower (or any of its respective officers) in any Loan
Document or in any certificate, report, notice, or financial
statement furnished at any time in connection with this Agreement
shall be false, misleading, or erroneous in any material respect
when made or deemed to have been made.
(c) The Borrower shall fail to perform, observe, or
comply with any covenant, agreement, or term contained in this
Agreement or any other Loan Document (other than Borrower's
agreement to pay the Obligations when due) and such failure shall
have continued for a period of thirty (30) days.
(d) The Borrower or any Subsidiary shall commence a
voluntary proceeding seeking liquidation, reorganization, or other
relief with respect to itself or its debts under any bankruptcy,
insolvency, or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator,
custodian, or other similar official of it or a substantial part
of its property or shall consent to any such relief or to the
appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it or shall
make a general assignment for the benefit of creditors or shall
generally fail to pay its debts as they become due or shall take
any corporate action to authorize any of the foregoing.
(e) An involuntary proceeding shall be commenced against
the Borrower or any Subsidiary seeking liquidation, reorganization,
or other relief with respect to it or its debts under any
bankruptcy, insolvency, or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver,
liquidator, custodian, or other similar official for it or a
substantial part of its property, and such involuntary proceeding
shall remain undismissed and unstayed for a period of ninety (90)
days.
(f) Any attachment or sequestration, or any similar
proceeding or proceedings to seize or impose a Lien upon any assets
or properties of the Borrower or any Subsidiary, involving an
aggregate amount in excess of Two Hundred Fifty Thousand Dollars
($250,000) shall have been commenced against any assets or
properties of the Borrower or any Subsidiary and shall not have
been discharged within a period of thirty (30) days after the
commencement thereof.
(g) A final judgment or judgments for the payment of
money in excess of Two Hundred Fifty Thousand Dollars ($250,000)
in the aggregate shall be rendered by a court or courts against the
Borrower, any of its Subsidiaries, or any Obligated Party and the
same shall not be discharged (or provision shall not be made for
such discharge), or a stay of execution thereof shall not be
procured, within thirty (30) days from the date of entry thereof
and the Borrower or the relevant Subsidiary shall not, within said
period of thirty (30) days, or such longer period during which
execution of the same shall have been stayed, appeal therefrom and
cause the execution thereof to be stayed during such appeal.
(h) The Borrower or any Subsidiary shall fail to pay when
due after any applicable grace period (not to exceed 30 days) any
principal of or interest on any Debt (other than the Obligations),
or the maturity of any such Debt shall have been accelerated, or
any such Debt shall have been required to be prepaid prior to the
stated maturity thereof, or any event shall have occurred that
permits (or, with the giving of notice or lapse of time or both,
would permit) any holder or holders of such Debt or any Person
acting on behalf of such holder or holders to accelerate the
maturity thereof or require any such prepayment.
(i) This Agreement or any other Loan Document shall cease
to be in full force and effect or shall be declared null and void
or the validity or enforceability thereof shall be contested or
challenged by the Borrower, any Subsidiary, any Obligated Party or
any of their respective shareholders, or the Borrower or any
Obligated Party shall deny that it has any further liability or
obligation under any of the Loan Documents.
(j) Any of the following events shall occur or exist with
respect to the Borrower or any ERISA Affiliate: (i) any Prohibited
Transaction involving any Plan; (ii) any Reportable Event with
respect to any Plan; (iii) the filing under Section 4041 of ERISA
of a notice of intent to terminate any Plan or the termination of
any Plan; (iv) any event or circumstance that might constitute
grounds entitling the PBGC to institute proceedings under Section
4042 of ERISA for the termination of, or for the appointment of a
trustee to administer, any Plan, or the institution by the PBGC of
any such proceedings; or (v) complete or partial withdrawal under
Section 4201 or 4204 of ERISA from a Multiemployer Plan or the
reorganization, insolvency, or termination of any Multiemployer
Plan; and in each case above, such event or condition, together
with all other events or conditions, if any, have subjected or
could in the reasonable opinion of the Lender subject the Borrower
to any tax, penalty, or other liability to a Plan, a Multiemployer
Plan, the PBGC, or otherwise (or any combination thereof) which in
the aggregate exceed or could reasonably be expected to exceed Two
Hundred Fifty Thousand Dollars ($250,000) and such event or
condition shall have continued for a period of thirty (30) days.
(k) The Borrower, any of its Subsidiaries, or any
Obligated Party, or any of their properties, revenues, or assets,
shall become subject to an order of forfeiture, seizure, or
divestiture and the same shall not have been discharged within
thirty (30) days from the date of entry thereof.
Section 2. Changes in Management. In the event the Borrower
institutes or experiences any material change or changes in its
management, the Lender may without notice terminate the Commitment.
Without in any way limiting the foregoing, a material change in
management shall be deemed to have occurred if there is any change of the
Borrower's chief executive officer or chief financial officer.
Section 3. Remedies Upon Default. If any Event of Default shall
occur and be continuing, the Lender may without notice terminate the
Commitment and declare the Obligations or any part thereof to be
immediately due and payable, and the same shall thereupon become
immediately due and payable, without notice, demand, presentment, notice
of dishonor, notice of acceleration, notice of intent to accelerate,
notice of intent to demand, protest, or other formalities of any kind,
all of which are hereby expressly waived by the Borrower; provided,
however, that upon the occurrence of an Event of Default under
Section 12.1(d) or Section 12.1(e), the Commitment shall automatically
terminate, and the Obligations shall become immediately due and payable
without notice, demand, presentment, notice of dishonor, notice of
acceleration, notice of intent to accelerate, notice of intent to demand,
protest, or other formalities of any kind, all of which are hereby
expressly waived by the Borrower. If any Event of Default shall occur
and be continuing, the Lender may exercise all rights and remedies
available to it in law or in equity, under the Loan Documents, or
otherwise.
Section 4. Setoff. If an Event of Default shall have occurred
and be continuing, the Lender shall have the right to set off and apply
against the Obligations in such manner as the Lender may determine, at
any time and without notice to the Borrower, any and all deposits
(general or special, time or demand, provisional or final) or other sums
at any time credited by or owing from the Lender to the Borrower whether
or not the Obligations are then due. As further security for the
Obligations, the Borrower hereby grants to the Lender a security interest
in all money, instruments, and other property of the Borrower now or
hereafter held by the Lender, including, without limitation, property
held in safekeeping. In addition to the Lender's right of setoff and as
further security for the Obligations, the Borrower hereby grants to the
Lender a security interest in all deposits (general or special, time or
demand, provisional or final) and other accounts of the Borrower now or
hereafter on deposit with or held by the Lender and all other sums at any
time credited by or owing from the Lender to the Borrower. The rights
and remedies of the Lender hereunder are in addition to other rights and
remedies (including, without limitation, other rights of setoff) which
the Lender may have.
Section 5. Performance by the Lender. If the Borrower shall
fail to perform any covenant or agreement contained in any of the Loan
Documents, the Lender may perform or attempt to perform such covenant or
agreement on behalf of the Borrower. In such event, the Borrower shall,
at the request of the Lender, promptly pay any reasonable amount expended
by the Lender in connection with such performance or attempted
performance to the Lender, together with interest thereon at the Default
Rate from and including the date of such expenditure to but excluding the
date such expenditure is paid in full. Notwithstanding the foregoing,
it is expressly agreed that the Lender shall not have any liability or
responsibility for the performance of any obligation of the Borrower
under this Agreement or any other Loan Document.
ARTICLE XIII
Miscellaneous
Section 1. Expenses. The Borrower hereby agrees to pay on
demand: (a) all reasonable costs and expenses of the Lender in connection
with the preparation, negotiation, execution, and delivery of this
Agreement and the other Loan Documents and any and all amendments,
modifications, renewals, extensions, and supplements thereof and thereto,
including, without limitation, the reasonable fees and expenses of legal
counsel for the Lender, (b) all reasonable costs and expenses of the
Lender in connection with any Default and the enforcement of this
Agreement or any other Loan Document, including, without limitation, the
reasonable fees and expenses of legal counsel for the Lender, and (c) all
other reasonable costs and expenses incurred by the Lender in connection
with this Agreement or any other Loan Document.
Section 2. Indemnification. Borrower agrees to indemnify,
defend and hold Lender, its directors, officers and employees
(collectively, "Indemnified Parties") harmless from and against any loss,
liability, obligation, damage, penalty, judgment, claim, deficiency and
expense (including interest, penalties, attorneys' fees and amounts paid
in settlement) to which the Indemnified Parties may become subject
arising out of this Agreement, other than those which arise by reason of
the gross negligence or willful misconduct of Lender.
Section 3. Limitation of Liability. Neither the Lender nor any
Affiliate, officer, director, employee, attorney, or agent of the Lender
shall have any liability with respect to, and the Borrower hereby waives,
releases, and agrees not to sue any of them upon, any claim for any
special, indirect, incidental, or consequential damages suffered or
incurred by the Borrower in connection with, arising out of, or in any
way related to, this Agreement or any of the other Loan Documents, or any
of the transactions contemplated by this Agreement or any of the other
Loan Documents. The Borrower hereby waives, releases, and agrees not to
sue the Lender or any of the Lender's Affiliates, officers, directors,
employees, attorneys, or agents for punitive damages in respect of any
claim in connection with, arising out of, or in any way related to, this
Agreement or any of the other Loan Documents, or any of the transactions
contemplated by this Agreement or any of the other Loan Documents.
Section 4. No Waiver; Cumulative Remedies. No failure on the
part of the Lender to exercise and no delay in exercising, and no course
of dealing with respect to, any right, power, or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power, or privilege under this Agreement
preclude any other or further exercise thereof or the exercise of any
other right, power, or privilege. The rights and remedies provided for
in this Agreement and the other Loan Documents are cumulative and not
exclusive of any rights and remedies provided by law.
Section 5. Successors and Assigns. This Agreement is binding
upon and shall inure to the benefit of the Lender and the Borrower and
their respective successors and assigns, except that the Borrower may not
assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of the Lender.
Section 6. Survival. All representations and warranties made
in this Agreement or any other Loan Document or in any document,
statement, or certificate furnished in connection with this Agreement
shall survive the execution and delivery of this Agreement and the other
Loan Documents, and no investigation by the Lender or any closing shall
affect the representations and warranties or the right of the Lender to
rely upon them. Without prejudice to the survival of any other
obligation of the Borrower hereunder, the obligations of the Borrower
under Sections 13.1, and 13.2 shall survive repayment of the Notes and
termination of the Commitment and the Letters of Credit.
Section 7. ENTIRE AGREEMENT; AMENDMENT. THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE
AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR
COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER
WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF 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. The provisions of this
Agreement and the other Loan Documents to which the Borrower is a party
may be amended or waived only by an instrument in writing signed by the
parties hereto.
Section 8. Maximum Interest Rate. No provision of this
Agreement or any other Loan Document shall require the payment or the
collection of interest in excess of the maximum amount permitted by
applicable law. If any excess of interest in such respect is hereby
provided for, or shall be adjudicated to be so provided, in any Loan
Document or otherwise in connection with this loan transaction, the
provisions of this Section shall govern and prevail and neither the
Borrower nor the sureties, guarantors, successors, or assigns of the
Borrower shall be obligated to pay the excess amount of such interest or
any other excess sum paid for the use, forbearance, or detention of sums
loaned pursuant hereto. In the event the Lender ever receives, collects,
or applies as interest any such sum, such amount which would be in excess
of the maximum amount permitted by applicable law shall be applied as a
payment and reduction of the principal of the indebtedness evidenced by
the Notes; and, if the principal of the Notes has been paid in full, any
remaining excess shall forthwith be paid to the Borrower. In determining
whether or not the interest paid or payable exceeds the Maximum Rate, the
Borrower and the Lender shall, to the extent permitted by applicable law,
(a) characterize any non-principal payment as an expense, fee, or premium
rather than as interest, (b) exclude voluntary prepayments and the
effects thereof, and (c) amortize, prorate, allocate, and spread in equal
or unequal parts the total amount of interest throughout the entire
contemplated term of the indebtedness evidenced by the Notes so that
interest for the entire term does not exceed the Maximum Rate.
Section 9. Notices. All notices and other communications
provided for in this Agreement and the other Loan Documents to which
Borrower is a party shall be given or made by telecopy, or in writing and
telecopied, mailed by certified mail return receipt requested, or
delivered to the intended recipient at the "Address for Notices"
specified below its name on the signature pages hereof; or, as to any
party at such other address as shall be designated by such party in a
notice to the other party given in accordance with this Section. Except
as otherwise provided in this Agreement, all such communications shall
be deemed to have been duly given when transmitted by telecopy, subject
to telephone confirmation of receipt, or when personally delivered or,
in the case of a mailed notice, when duly deposited in the mails, in each
case given or addressed as aforesaid; provided, however, notices to
Lender pursuant to Articles II, III and IV shall not be effective until
received by Lender.
Section 10. Governing Law; Venue; Service of Process. This
Agreement shall be governed by and construed in accordance with the laws
of the State of Texas and the applicable laws of the United States of
America. This Agreement has been entered into in Dallas County, Texas,
and it shall be performable for all purposes in Dallas County, Texas.
Section 11. Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
Section 12. Severability. Any provision of this Agreement held
by a court of competent jurisdiction to be invalid or unenforceable shall
not impair or invalidate the remainder of this Agreement and the effect
thereof shall be confined to the provision held to be invalid or illegal.
Section 13. Headings. The headings, captions, and arrangements
used in this Agreement are for convenience only and shall not affect the
interpretation of this Agreement.
Section 14. Non-Application of Chapter 15 of Texas Credit Code.
The provisions of Chapter 15 of the Texas Credit Code (Vernon's Texas
Civil Statutes, Article 5069-15) are specifically declared by the parties
hereto not to be applicable to this Agreement or any of the other Loan
Documents or to the transactions contemplated hereby.
Section 15. Participations. The Lender shall have the right at
any time and from time to time to grant participations in the Notes and
any other Loan Documents, provided that Lender shall have given Borrower
notice of such participation and Borrower shall have consented thereto,
which consent shall not be unreasonably withheld. Each actual or
proposed participant shall be entitled to receive from Lender, at any
time before or after such notice to Borrower, all information received
by the Lender regarding the Borrower and its Subsidiaries, including,
without limitation, information required to be disclosed to a participant
pursuant to Banking Circular 181 (Rev., August 2, 1984), issued by the
Comptroller of the Currency (whether the actual or proposed participant
is subject to the circular or not).
Section 16. Construction. The Borrower and the Lender
acknowledge that each of them has had the benefit of legal counsel of its
own choice and has been afforded an opportunity to review this Agreement
and the other Loan Documents with its legal counsel and that this
Agreement and the other Loan Documents shall be construed as if jointly
drafted by the Borrower and the Lender.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
BORROWER:
EL CHICO RESTAURANTS, INC.
By: /s/Lawrence E. White
-----------------------
Lawrence E. White
Executive Vice President
and Chief Financial Officer
By: /s/John A. Cuellar
-----------------------
John A. Cuellar
Senior Vice President
and General Counsel
Address for Notices:
12200 Stemmons Freeway, Suite 100
Dallas, Texas 75234
Fax No.: (214)888-8198
Telephone No.:
(214)241-5500
Attention:
Lawrence E. White
LENDER:
TEXAS COMMERCE BANK, NATIONAL
ASSOCIATION
By: /s/R. Britt Langford
-----------------------
R. Britt Langford
Senior Vice President
Address for Notices:
2200 Ross Avenue
Post Office Box 660197
Dallas, Texas 75201-0197
Fax No.: (214) 922-2798
Telephone No.:
(214) 922-2335
Attention:
R. Britt Langford
092093sdm1
ELCH T2408-16800
<PAGE>
INDEX TO EXHIBITS
Exhibit Description of Exhibit Section
"A" Revolving Credit Note 2.2
"B" Term Note 3.2
"C-1" Advance Request Form (Revolving Credit Loan) 2.5
"C-2" Advance Request Form (Term Loan) 3.5
"D" Letter of Credit Request Form 4.2
"E-1" Opinion of Counsel (Revolving Credit Loan) 7.1(i)
"E-2" Opinion of Counsel (Term Loan) 7.3(i)
"F" L/C Application 4.1
"G" Compliance Certificate 9.1(c)
"H" Guaranty 1.1
INDEX TO SCHEDULES
Schedule Description of Schedule Section
1 Existing Litigation 8.5
2 Existing Debt 8.9
3 List of Subsidiaries 8.14
4 Environmental Matters 8.15
5 Existing Liens 10.2
6 Guarantors 1.1
<PAGE>
EXHIBIT "A"
Revolving Credit Note
<PAGE>
REVOLVING CREDIT NOTE
$9,000,000.00 Dallas, Texas September 21, 1993
FOR VALUE RECEIVED, the undersigned, EL CHICO RESTAURANTS, INC.,
a Texas corporation ("Maker"), hereby promises to pay to the order of
TEXAS COMMERCE BANK, NATIONAL ASSOCIATION, a national banking association
("Payee"), at its offices at 2200 Ross Avenue, Post Office Box 660197,
Dallas, Texas 75266-0197, on December 31, 1996, in lawful money of the
United States of America, the principal sum of NINE MILLION AND NO/100
DOLLARS ($9,000,000.00), or so much thereof as may be advanced and
outstanding hereunder, together with interest on the outstanding
principal balance from day to day remaining, as herein specified.
This Note has been executed and delivered by Maker pursuant to the
terms of that certain Loan Agreement of even date herewith between Maker
and Payee (as the same may be amended, supplemented or modified from time
to time, the "Agreement") and is the Revolving Credit Note described
therein. Capitalized terms used and not otherwise defined herein shall
have the same meanings as set forth in the Agreement. Reference is
hereby made to the Agreement for provisions affecting this Note
including, but not limited to, provisions regarding interest rates,
repayments, prepayments, Events of Default and Payee's rights as a result
of the occurrence thereof.
The outstanding principal balance hereof shall bear interest prior
to maturity at a varying rate per annum which shall from day to day be
equal to the lesser of (a) the Maximum Rate, or (b) the Applicable Rate,
each such change in the rate of interest charged hereunder to become
effective, without notice to Maker, on the effective date of each change
in the Applicable Rate or the Maximum Rate, as the case may be; provided,
however, if at any time the Applicable Rate shall exceed the Maximum
Rate, thereby causing the interest rate hereon to be limited to the
Maximum Rate, then any subsequent reduction in the Applicable Rate shall
not reduce the rate of interest hereon below the Maximum Rate until the
total amount of interest accrued hereon equals the amount of interest
which would have accrued hereon if the Applicable Rate had at all times
been in effect. Accrued and unpaid interest on the outstanding principal
balance hereof shall be due and payable as follows:
(ii) in the case of Prime Rate Advances, on each
Quarterly Payment Date;
(ii) in the case of each Eurodollar Advance, on the
last day of the Interest Period with respect thereto and, in the
case of an Interest Period greater than three (3) months, at
three-month intervals after the first day of such Interest Period;
and
(iii) on the Termination Date.
All past due principal and interest shall bear interest at the Default
Rate.
Interest on the indebtedness evidenced by this Note shall be
computed on the basis of a year of 360 days and the actual number of days
elapsed (including the first day but excluding the last day) unless such
calculation would result in a usurious rate, in which case interest shall
be calculated on the basis of a year of 365 or 366 days, as the case may
be.
Maker may prepay the principal of this Note upon the terms and
conditions specified in the Agreement. Maker may borrow, repay, and
reborrow hereunder upon the terms and conditions specified in the
Agreement.
Notwithstanding anything to the contrary contained herein, no
provisions of this Note shall require the payment or permit the
collection of interest in excess of the Maximum Rate. If any excess of
interest in such respect is herein provided for, or shall be adjudicated
to be so provided, in this Note or otherwise in connection with this loan
transaction, the provisions of this paragraph shall govern and prevail,
and neither Maker nor the sureties, guarantors, successors or assigns of
Maker shall be obligated to pay the excess amount of such interest, or
any other excess sum paid for the use, forbearance or detention of sums
loaned pursuant hereto. If for any reason interest in excess of the
Maximum Rate shall be deemed charged, required or permitted by any court
of competent jurisdiction, any such excess shall be applied as a payment
and reduction of the principal of indebtedness evidenced by this Note;
and, if the principal amount hereof has been paid in full, any remaining
excess shall forthwith be paid to Maker. In determining whether or not
the interest paid or payable exceeds the Maximum Rate, Maker and Payee
shall, to the extent permitted by applicable law, (i) characterize any
non-principal payment as an expense, fee, or premium rather than as
interest, (ii) exclude voluntary prepayments and the effects thereof, and
(iii) amortize, prorate, allocate, and spread in equal or unequal parts
the total amount of interest throughout the entire contemplated term of
the indebtedness evidenced by this Note so that the interest for the
entire term does not exceed the Maximum Rate.
Upon the occurrence of any Event of Default, the holder hereof may,
at its option, declare the entire unpaid principal of and accrued
interest on this Note immediately due and payable without notice
(including, without limitation, notice of acceleration and notice of
intent to accelerate), demand or presentment, all of which are hereby
waived, and upon such declaration, the same shall become and shall be
immediately due and payable. Failure of the holder hereof to exercise
this option shall not constitute a waiver of the right to exercise the
same upon the occurrence of a subsequent Event of Default.
If the holder hereof expends any effort in any attempt to enforce
payment of all or any part or installment of any sum due the holder
hereunder, or if this Note is placed in the hands of an attorney for
collection, or if it is collected through any legal proceedings, Maker
agrees to pay all reasonable costs, expenses, and fees incurred by the
holder, including reasonable attorneys' fees.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES
OF AMERICA. THIS NOTE IS PERFORMABLE IN DALLAS COUNTY, TEXAS.
Maker and each surety, guarantor, endorser, and other party ever
liable for payment of any sums of money payable on this Note jointly and
severally waive notice, presentment, demand for payment, protest, notice
of protest and non-payment or dishonor, notice of acceleration, notice
of intent to accelerate, notice of intent to demand, diligence in
collecting, grace, and all other formalities of any kind, and consent to
all extensions without notice for any period or periods of time and
partial payments, before or after maturity, all without prejudice to the
holder. The holder shall similarly have the right to deal in any way,
at any time, with one or more of the foregoing parties without notice to
any other party, and to grant any such party any extensions of time for
payment of any of said indebtedness, or to grant any other indulgences
or forbearances whatsoever, without notice to any other party and without
in any way affecting the personal liability of any party hereunder.
Maker hereby authorizes the holder hereof to endorse on the
Schedule attached to this Note or any continuation thereof the amount and
type of all Advances made to Maker hereunder and all continuations,
conversions, and payments of principal in respect of such Advances, which
endorsements shall be prima facie evidence as to the outstanding
principal amount of this Note; provided, however, any failure by the
holder hereof to make any endorsement shall not limit or otherwise affect
the obligations of Maker under the Agreement or this Note.
EL CHICO RESTAURANTS, INC.
By:
Lawrence E. White
Executive Vice President
By:
John A. Cuellar
Senior Vice President
FILE: REVNOT
092093sdm1
ELCH T2408-16800
<PAGE>
Schedule
Amount of
Date Made, Principal Unpaid
Continued, Amount Continued, Principal
Converted, Type of of Converted, Balance
or Paid Advance Advance or Paid of Note
-------- ------- ------- ---------- -------
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-------- ------- ------- ---------- -------
-------- ------- ------- ---------- -------
-------- ------- ------- ---------- -------
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-------- ------- ------- ---------- -------
-------- ------- ------- ---------- -------
-------- ------- ------- ---------- -------
-------- ------- ------- ---------- -------
EXHIBIT "B"
Term Note
<PAGE>
TERM NOTE
$_____________ Dallas, Texas _________, 199__
FOR VALUE RECEIVED, the undersigned, EL CHICO RESTAURANTS, INC.,
a Texas corporation ("Maker"), hereby promises to pay to the order of
TEXAS COMMERCE BANK, NATIONAL ASSOCIATION, a national banking association
("Payee"), at its offices at 2200 Ross Avenue, Post Office Box 660197,
Dallas, Texas 75266-0197, on the dates hereinafter specified, in lawful
money of the United States of America, the principal sum of
_______________________________ DOLLARS ($___________), together with
interest on the outstanding principal balance from day to day remaining,
as herein specified.
This Note has been executed and delivered by Maker pursuant to the
terms of that certain Loan Agreement dated as of September 21, 1993,
between Maker and Payee (as the same may be amended, supplemented or
modified from time to time, the "Agreement") and is the Term Note
described therein. This Note is in renewal, extension and modification
of, but not in extinguishment of, the Revolving Note described in the
Agreement. Capitalized terms used and not otherwise defined herein shall
have the same meanings as set forth in the Agreement. Reference is
hereby made to the Agreement for provisions affecting this Note
including, but not limited to, provisions regarding interest rates,
repayments, prepayments, Events of Default and Payee's rights as a result
of the occurrence thereof.
The outstanding principal balance of this Note shall be payable in
___________________ (________) installments as follows:
(a) _______________ (_____) quarterly installments in the
principal amount of ________________________ Dollars ($___________)
each shall be due and payable on each Quarterly Payment Date,
commencing on ______________, 199___ and continuing thereafter
until and including September 30, 1998; and thereafter
(b) a final installment in the amount of all outstanding
principal shall be due and payable on the Maturity Date.
The outstanding principal balance hereof shall bear interest prior
to maturity at a varying rate per annum which shall from day to day be
equal to the lesser of (a) the Maximum Rate, or (b) the Applicable Rate,
each such change in the rate of interest charged hereunder to become
effective, without notice to Maker, on the effective date of each change
in the Applicable Rate or the Maximum Rate, as the case may be; provided,
however, if at any time the Applicable Rate shall exceed the Maximum
Rate, thereby causing the interest rate hereon to be limited to the
Maximum Rate, then any subsequent reduction in the Applicable Rate shall
not reduce the rate of interest hereon below the Maximum Rate until the
total amount of interest accrued hereon equals the amount of interest
which would have accrued hereon if the Applicable Rate had at all times
been in effect. Accrued and unpaid interest on the outstanding principal
balance hereof shall be due and payable as follows:
(i) in the case of Prime Rate Advances, on each Quarterly
Payment Date;
(ii) in the case of each Eurodollar Advance, on the last day
of the Interest Period with respect thereto and, in the case of an
Interest Period greater than three (3) months, at three-month
intervals after the first day of such Interest Period; and
(iii) on the Maturity Date.
All past due principal and interest shall bear interest at the Default
Rate.
Interest on the indebtedness evidenced by this Note shall be
computed on the basis of a year of 360 days and the actual number of days
elapsed (including the first day but excluding the last day) unless such
calculation would result in a usurious rate, in which case interest shall
be calculated on the basis of a year of 365 or 366 days, as the case may
be.
Maker may prepay the principal of this Note upon the terms and
conditions specified in the Agreement.
Notwithstanding anything to the contrary contained herein, no
provisions of this Note shall require the payment or permit the
collection of interest in excess of the Maximum Rate. If any excess of
interest in such respect is herein provided for, or shall be adjudicated
to be so provided, in this Note or otherwise in connection with this loan
transaction, the provisions of this paragraph shall govern and prevail,
and neither Maker nor the sureties, guarantors, successors or assigns of
Maker shall be obligated to pay the excess amount of such interest, or
any other excess sum paid for the use, forbearance or detention of sums
loaned pursuant hereto. If for any reason interest in excess of the
Maximum Rate shall be deemed charged, required or permitted by any court
of competent jurisdiction, any such excess shall be applied as a payment
and reduction of the principal of indebtedness evidenced by this Note;
and, if the principal amount hereof has been paid in full, any remaining
excess shall forthwith be paid to Maker. In determining whether or not
the interest paid or payable exceeds the Maximum Rate, Maker and Payee
shall, to the extent permitted by applicable law, (i) characterize any
non-principal payment as an expense, fee, or premium rather than as
interest, (ii) exclude voluntary prepayments and the effects thereof, and
(iii) amortize, prorate, allocate, and spread in equal or unequal parts
the total amount of interest throughout the entire contemplated term of
the indebtedness evidenced by this Note so that the interest for the
entire term does not exceed the Maximum Rate.
Upon the occurrence of any Event of Default, the holder hereof may,
at its option, declare the entire unpaid principal of and accrued
interest on this Note immediately due and payable without notice
(including, without limitation, notice of acceleration and notice of
intent to accelerate), demand or presentment, all of which are hereby
waived, and upon such declaration, the same shall become and shall be
immediately due and payable. Failure of the holder hereof to exercise
this option shall not constitute a waiver of the right to exercise the
same upon the occurrence of a subsequent Event of Default.
If the holder hereof expends any effort in any attempt to enforce
payment of all or any part or installment of any sum due the holder
hereunder, or if this Note is placed in the hands of an attorney for
collection, or if it is collected through any legal proceedings, Maker
agrees to pay all reasonable costs, expenses, and fees incurred by the
holder, including reasonable attorneys' fees.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES
OF AMERICA. THIS NOTE IS PERFORMABLE IN DALLAS COUNTY, TEXAS.
Maker and each surety, guarantor, endorser, and other party ever
liable for payment of any sums of money payable on this Note jointly and
severally waive notice, presentment, demand for payment, protest, notice
of protest and non-payment or dishonor, notice of acceleration, notice
of intent to accelerate, notice of intent to demand, diligence in
collecting, grace, and all other formalities of any kind, and consent to
all extensions without notice for any period or periods of time and
partial payments, before or after maturity, all without prejudice to the
holder. The holder shall similarly have the right to deal in any way,
at any time, with one or more of the foregoing parties without notice to
any other party, and to grant any such party any extensions of time for
payment of any of said indebtedness, or to grant any other indulgences
or forbearances whatsoever, without notice to any other party and without
in any way affecting the personal liability of any party hereunder.
EL CHICO RESTAURANTS, INC.
By:
Lawrence E. White
Executive Vice President
By:
John A. Cuellar
Senior Vice President
FILE: TERMNOT
EXHIBIT "C-1"
Advance Request Form
(Revolving Credit Loan)
<PAGE>
ADVANCE REQUEST FORM
TO: TEXAS COMMERCE BANK, NATIONAL ASSOCIATION
2200 Ross Avenue
Post Office Box 660197
Dallas, Texas 75266-0197
Attention: R. Britt Langford
Gentlemen:
The undersigned is an officer of EL CHICO RESTAURANTS, INC., a
Texas corporation (the "Borrower"), and is authorized to make and deliver
this certificate pursuant to that certain Loan Agreement dated as of
September 21, 1993, between the Borrower and Texas Commerce Bank,
National Association, a national banking association (the "Lender") (such
Loan Agreement, as the same may be amended, supplemented or modified from
time to time, being hereinafter referred to as the "Loan Agreement").
All terms defined in the Loan Agreement shall have the same meaning
herein.
In accordance with the Loan Agreement, the Borrower hereby (check
whichever is applicable):
____ 1. Requests that the Lender make a Prime Rate Advance in
the amount set forth in item (d) below; or
____ 2. Requests that the Lender make a Eurodollar Advance in
the amount set forth in item (d) below, having an Interest Period of
(check whichever is applicable):
_____ one month
_____ two months
_____ three months
_____ six months
In connection with the foregoing and pursuant to the terms and
provisions of the Loan Agreement, the undersigned hereby certifies to the
Lender that the following statements are true and correct:
(i) The representations and warranties contained in
Article VIII of the Loan Agreement and in each of the other Loan
Documents are true and correct on and as of the date hereof with
the same force and effect as if made on and as of such date.
(ii) No Default has occurred and is continuing or would
result from the Advance requested hereunder.
(iii) The amount of the Advance requested hereunder, when
added to all outstanding Advances, will not exceed the Applicable
Committed Sum.
(iv) All information supplied below is true, correct, and
complete as of the date hereof.
Advance or Credit Request Information
(a) Outstanding principal amount of Advances..$_____________
(b) Applicable Committed Sum . . . . ........ $_____________
(c) Net Availability for Advances:
[Line (b) minus Line (a)]...............$_____________
(d) Amount of Requested Advance. . .......... $_____________
(e) Date of Requested Advance..................______, 19___
BORROWER:
EL CHICO RESTAURANTS, INC.
By:
Name:
Title:
Dated as of: __________________
[insert date of
Requested Advance]
FILE: ADREQR
EXHIBIT "C-2"
Advance Request Form
(Term Loan)
<PAGE>
ADVANCE REQUEST FORM
TO: TEXAS COMMERCE BANK, NATIONAL ASSOCIATION
2200 Ross Avenue
Post Office Box 660197
Dallas, Texas 75266-0197
Attention: R. Britt Langford
Gentlemen:
The undersigned is an officer of EL CHICO RESTAURANTS, INC., a
Texas corporation (the "Borrower"), and is authorized to make and deliver
this certificate pursuant to that certain Loan Agreement dated as of
September ___, 1993, between the Borrower and Texas Commerce Bank,
National Association, a national banking association (the "Lender") (such
Loan Agreement, as the same may be amended, supplemented or modified from
time to time, being hereinafter referred to as the "Loan Agreement").
All terms defined in the Loan Agreement shall have the same meaning
herein.
In accordance with the Loan Agreement, the Borrower hereby requests
that the Lender make the Term Loan as hereinafter specified, in the form
of the type or types of Advance specified below (check whichever is
applicable):
____ 1. Prime Rate Advance in the amount of $________; and/or
____ 2. Eurodollar Advance in the amount of $_______, having
an Interest Period of (check whichever is applicable):
____ one month
____ two months
____ three months
____ six months
In connection with the foregoing and pursuant to the terms and
provisions of the Loan Agreement, the undersigned hereby certifies to the
Lender that the following statements are true and correct:
(i) The representations and warranties contained in
Article VIII of the Loan Agreement and in each of the other Loan
Documents are true and correct on and as of the date hereof with
the same force and effect as if made on and as of such date.
(ii) No Default has occurred and is continuing or would
result from the Term Loan requested hereunder.
(iii) The amount of the Term Loan requested hereunder will
not exceed the Applicable Committed Sum.
(iv) All information supplied below is true, correct, and
complete as of the date hereof.
Term Loan Request Information
(a) Applicable Committed Sum . . . . . $_____________
(b) Amount of Term Loan Requested. . . $_____________
(c) Amortization period (not to exceed 10 years) for
purposes of calculating quarterly principal payments_______ years
(d) Date of Term Loan Requested. . . .________, 19___
BORROWER:
EL CHICO RESTAURANTS, INC.
By:
Name:
Title:
Dated as of:
[insert date of
Requested Advance]
FILE: ADREQT
081996 v1
147:13312-67
EXHIBIT "D"
Letter of Credit Request Form
<PAGE>
LETTER OF CREDIT REQUEST FORM
TO: TEXAS COMMERCE BANK, NATIONAL ASSOCIATION
2200 Ross Avenue
Post Office Box 660197
Dallas, Texas 75266-0197
Attention: R. Britt Langford
Gentlemen:
The undersigned is an officer of EL CHICO RESTAURANTS, INC., a
Texas corporation (the "Borrower"), and is authorized to make and deliver
this certificate pursuant to that certain Loan Agreement dated as of
September 21, 1993, between Borrower and Texas Commerce Bank, National
Association, a national banking association (the "Loan Agreement"). All
terms defined in the Loan Agreement shall have the same meaning herein.
In accordance with the Loan Agreement, the Borrower hereby requests
that the Lender issue a Letter of Credit. The Letter of Credit shall:
(a) be issued on _____________, 19___;
(b) be in the amount of $___________;
(c) permit [a single drawing/multiple drawings] on the terms
and conditions set forth below;
(d) be payable upon presentation of a [sight draft/time draft.
The time draft shall be payable on _______________, 19___];
and
(e) expire on ____________________, 19___.4/
The Letter of Credit is to be delivered by the Lender to
_________________________.
[Drawing/Each drawing]3/ under the Letter of Credit shall be subject
to the following conditions:
1.
.
2.
.
3.
.
4.
.
5.
.
In connection with the foregoing and pursuant to the terms and
provisions of the Loan Agreement, the undersigned hereby certifies that
the following statements are true and correct:
(i) The representations and warranties contained in
Article VIII of the Loan Agreement and in each of the other Loan
Documents are true and correct on and as of the date hereof with
the same force and effect as if made on and as of such date.
(ii) No Default has occurred and is continuing or would
result from the issuance of the Letter of Credit requested
hereunder.
(iii) The face amount of the Letter of Credit requested
hereunder, when added to all outstanding Letter of Credit
Liabilities, will not exceed $1,000,000.
(iv) The proposed terms of the Letter of Credit requested
hereunder and the transactions proposed to be supported thereby are
accurately and completely described on Annex 1 attached hereto.
(v) All information supplied below is true, correct, and
complete as of the date hereof.
Information
(a) Outstanding Letter of Credit Liabilities$_____________
(b) Net availability for Letters of Credit: [$1,000,000 minus
Line (a)]. . . . . . . . . . . . . $_____________
(c) Face Amount of requested Letter of Credit$_____________
(d) Date requested for issuance of Letter of Credit________, 19___
BORROWER:
EL CHICO RESTAURANTS, INC.
By:
Name:
Title:
Dated as of:
[insert date of
proposed issuance of
Letter of Credit]
FILE: LCREG
081996 v1
147:13312-67
<PAGE>
ANNEX 1
TO LETTER OF CREDIT REQUEST FORM
Terms of Requested Letter of Credit
EXHIBIT "E-1"
Matters to be Addressed in
Opinion of Counsel (Revolving Credit Loan)
1. The Borrower is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Texas.
Each of the Guarantors is a corporation duly organized, validly existing,
and in good standing under the laws of its state of incorporation.
2. The Borrower has the corporate power and authority to
execute, deliver, and perform the Loan Agreement, the Notes, and the
other Loan Documents to which the Borrower is a party. The execution,
delivery, and performance by the Borrower of the Loan Agreement, the
Notes, and the other Loan Documents to which the Borrower is a party and
compliance with the terms and provisions thereof have been duly
authorized by all requisite corporate action on the part of the Borrower
and do not and will not (a) violate or conflict with, or result in a
breach of, or require any consent under (i) the articles of incorporation
or bylaws of the Borrower or any of the Subsidiaries, (ii) any applicable
law, rule, or regulation or any order, writ, injunction, or decree of any
Governmental Authority or arbitrator, or (iii) any agreement or
instrument to which the Borrower or any of the Subsidiaries is a party
or by which any of them or any of their property is bound or subject, or
(b) constitute a default under any such agreement or instrument, or
result in the creation or imposition of any Lien upon any of the revenues
or assets of the Borrower or any Subsidiary.
3. Each of the Guarantors has the power and authority to
execute, deliver and perform the Guaranty and other Loan Documents to
which such Guarantor is a party. The execution, delivery, and
performance by each Guarantor of the Guaranty and other Loan Documents
to which such Guarantor is a party and compliance with the terms and
provisions thereof have been duly authorized by all requisite corporate
action on the part of such Guarantor and do not and will not (a) violate
or conflict with, or result in a breach of, or require any consent under
(i) the articles of incorporation or bylaws of such Guarantor, (ii) any
applicable law, rule, or regulation or any order, writ, injunction, or
decree of any Governmental Authority or arbitrator, or (iii) any
agreement or instrument to which such Guarantor is a party or by which
it or any of its property is bound or subject, or (b) constitute a
default under any such agreement or instrument, or result in the creation
or imposition of any Lien upon any of the revenues or assets of such
Guarantor.
4. The Loan Agreement, the Revolving Credit Note, and the other
Loan Documents to which the Borrower is a party have been duly executed
and delivered by the Borrower and constitute the legal, valid, and
binding obligations of the Borrower enforceable against the Borrower in
accordance with their respective terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium, or other similar laws affecting the enforcement of creditors'
rights generally.
5. Each Guaranty has been duly executed and delivered by the
Guarantor named therein and constitutes the legal, valid, and binding
obligations of such Guarantor enforceable against such Guarantor in
accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium, or other
similar laws affecting the enforcement of creditors' rights generally.
6. There are no legal or arbitral proceedings, and no
proceedings by or before any Governmental Authority, pending or, to our
knowledge, threatened against or affecting the Borrower, any of its
Subsidiaries or any properties or rights of the Borrower or any of its
Subsidiaries, which if adversely determined, would have a material
adverse effect on the business, condition (financial or otherwise),
operations, prospects, or properties of the Borrower or any of its
Subsidiaries.
7. No authorization, consent, or approval of, or filing or
registration with, any Governmental Authority is required for the
execution, delivery, and performance by the Borrower of the Loan
Agreement, the Notes, and the other Loan Documents to which the Borrower
is a party or the execution, delivery, and performance by any Guarantor
of the Guaranty and other Loan Documents to which such Guarantor is a
party.
8. The extensions of credit by the Lender to the Borrower
provided for in the Loan Documents are not usurious.
FILE: OPINION
082096 v2
147:13312-67
-2-
EXHIBIT "E-2"
Matters to be Addressed in
Opinion of Counsel (Term Loan)
1. The Borrower is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Texas.
Each of the Guarantors [other than the Limited Partnership] is a
corporation duly organized, validly existing, and in good standing under
the laws of its state of incorporation. [The Limited Partnership is a
limited partnership duly organized and validly existing under the laws
of the State of Delaware.]
2. The Borrower has the corporate power and authority to
execute, deliver, and perform the Term Note and the other Loan Documents
to which the Borrower is a party. The execution, delivery, and
performance by the Borrower of the Term Note and the other Loan Documents
to which the Borrower is a party and compliance with the terms and
provisions thereof have been duly authorized by all requisite corporate
action on the part of the Borrower and do not and will not (a) violate
or conflict with, or result in a breach of, or require any consent under
(a) the articles of incorporation or bylaws of the Borrower or any of the
Subsidiaries, (b) any applicable law, rule, or regulation or any order,
writ, injunction, or decree of any Governmental Authority or arbitrator,
or (c) any agreement or instrument to which the Borrower or any of the
Subsidiaries is a party or by which any of them or any of their property
is bound or subject, or (b) constitute a default under any such agreement
or instrument, or result in the creation or imposition of any Lien upon
any of the revenues or assets of the Borrower or any Subsidiary.
3. Each of the Guarantors has the power and authority to
execute, deliver and perform the Guaranty and other Loan Documents to
which such Guarantor is a party. The execution, delivery, and
performance by each Guarantor of the Guaranty and other Loan Documents
to which such Guarantor is a party and compliance with the terms and
provisions thereof have been duly authorized by all requisite corporate
[or partnership] action on the part of such Guarantor and do not and will
not (a) violate or conflict with, or result in a breach of, or require
any consent under (i) the articles of incorporation, bylaws [or
partnership agreement] of such Guarantor, (ii) any applicable law, rule,
or regulation or any order, writ, injunction, or decree of any
Governmental Authority or arbitrator, or (iii) any agreement or
instrument to which such Guarantor is a party or by which it or any of
its property is bound or subject, or (b) constitute a default under any
such agreement or instrument, or result in the creation or imposition of
any Lien upon any of the revenues or assets of such Guarantor.
4. The Term Note and the other Loan Documents to which the
Borrower is a party have been duly executed and delivered by the Borrower
and constitute the legal, valid, and binding obligations of the Borrower
enforceable in accordance with their respective terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, or other similar laws affecting the
enforcement of creditors' rights generally.
5. Each Guaranty has been duly executed and delivered by the
Guarantor named therein and constitutes the legal, valid, and binding
obligations of such Guarantor enforceable against such Guarantor in
accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium, or other
similar laws affecting the enforcement of creditors' rights generally.
<PAGE>
6. There are no legal or arbitral proceedings, and no
proceedings by or before any Governmental Authority, pending or, to our
knowledge, threatened against or affecting the Borrower or any of its
Subsidiaries or any properties or rights of the Borrower or any of its
Subsidiaries, which if adversely determined, would have a material
adverse effect on the business, condition (financial or otherwise),
operations, prospects, or properties of the Borrower or any of its
Subsidiaries.
7. No authorization, consent, or approval of, or filing or
registration with, any Governmental Authority is required in connection
with the execution, delivery, or performance by the Borrower of the Term
Note or any other Loan Document to which the Borrower is a party or the
execution, delivery, and performance by any Guarantor of the Guaranty and
other Loan Documents to which such Guarantor is a party.
8. The Term Loan provided for in the Loan Documents is not
usurious.
FILE: OPINTER
090793TCB2
147:T2408-16800-ELCH
-2-
EXHIBIT "F"
L/C Application
<PAGE>
APPLICATION AND AGREEMENT
FOR IRREVOCABLE STANDBY LETTER OF CREDIT
___ WITHOUT RENEWALS ___ WITH RENEWALS
Renewable until ________.
latest date
To: _____________________ ("Bank") FOR BANK USE ONLY
Date:_______ l/c NO_________
_____________________ Applicant No.:________________
Beneficiary No.:______________
______________________ Advising Bank No.:____________
Date of this Application_________________
Gentlemen:
The undersigned Applicant(s) hereby request(s) you to establish an
irrevocable Standby Letter of Credit as set forth below in such language
as you may deem appropriate, with such variations from such terms as you
may in your discretion determine are necessary and are not materially
inconsistent with this Application and Agreement, and forward the same
by:
___ Cable/telex (full details) ___Airmail
___Brief Cable/telex ___Other
___ Through your correspondent for delivery to the beneficiary or advised
through ____________________________
___ Directly to beneficiary
All banking charges other than the issuing Bank's are for
____ Beneficiary ____ Applicant(s)
Liability of
__________In favor of (Beneficiary)_______ on Behalf of (as to
appear on Letter
of Credit)
Amount
In figures:
In words:
Partial drawings:
Allowed Not Allowed Expiring at the close of
business on
If drawings are allowed in installments ________________________
within given periods and no drawing At your counters, unless
is made for an installment within the otherwise indicated, for
applicable period, the credit Sight Payment
___Shall ___Shall not
be available for subsequent installments
To be available by drafts at sight drawn on you duly signed and endorsed,
or specify any other drawee:___________________
And accompanied by documents as specified below:
Beneficiary's manually signed statement on its letterhead reading exactly
as follows:
(Complete only when the beneficiary's bank or correspondent is to issue
its undertaking based on the issued Standby Letter of Credit)
___Request beneficiary's bank to issue and deliver their (specify type
of undertaking, bid or performance bond, or other)
----------------------------------
In favor of:
----------------------------------
For an amount not exceeding that specified above, effective
immediately and expiring at their office on
(30 days prior to expiry date above)
relative to .
THE OPENING OF THIS CREDIT IS SUBJECT TO THE TERMS AND CONDITIONS AS
SET FORTH ON THE FOLLOWING PAGES, TO WHICH TERMS AND CONDITIONS WE
AGREE Please date and sign this Application and Agreement on Page 4
hereof.
<PAGE>
TERMS AND CONDITIONS FOR STANDBY LETTER OF CREDIT
In consideration of the issuance of the letter of credit and all
renewals, extensions, replacements and amendments thereof (herein called
the "Credit") by Bank in accordance with this Application and Agreement
(this "Agreement"), the undersigned (hereinafter called "Applicants,"
whether one or more) jointly and severally agree to the following terms
and conditions:
1. Applicants promise to pay to Bank on demand at its office shown
on front, in United States currency as follows:
A. As to drafts, draws, demands, or other evidence of amounts drawn
under or purporting to be drawn under the Credit which are payable in
United States currency, the amount paid thereon, or, if so demanded by
Bank, to pay Bank at its office in advance the amount required to pay
such drafts, draws, demands or other evidence of amounts drawn under or
purporting to be drawn under the Credit;
B. As to drafts, draws, demands, or other evidence of amounts drawn
under or purporting to be drawn under the Credit which are payable in
currency other than United States currency, either (i) the amount paid
in the currency of the Credit at the bank of Bank's choice in the country
of such currency, or (ii) the equivalent of the amount paid, in United
States currency, at Bank's then current selling rate for such currency;
C. All taxes, levies, imposts, duties, charges, fees, deductions
or withholdings of any nature whatsoever and by whomsoever and wherever
imposed in connection with this Agreement, the Credit or any transactions
hereunder or thereunder; and
D. Interest on all amounts owing to Bank hereunder at the maximum
nonusurious rate of interest permitted by applicable laws of the United
States of America or the State of Texas, from time to time in effect,
whichever shall permit the highest lawful rate (hereinafter called "the
Highest Lawful Rate"). At all times, if any, that Chapter One of
Title 79, Texas Revised Civil Statutes, 1925, as amended, establishes the
Highest Lawful Rate, the Highest Lawful Rate shall be the "indicated"
rate ceiling (as defined therein) from time to time in effect. It is the
intention of Applicants and Bank to conform strictly to applicable usury
laws. It is therefore agreed that: (i) if, for any reason, the interest
received for the actual period of the existence of any loan by Bank
hereunder exceeds the Highest Lawful Rate, Bank shall refund to
Applicants the amount of the excess or shall credit the amount of the
excess against amounts owing hereunder and shall not be subject to any
of the penalties provided by law for contracting for, charging, or
receiving interest in excess of the Highest Lawful Rate, (ii) the
aggregate of all interest and other charges constituting interest under
applicable law and contracted for, chargeable or receivable under this
Agreement or otherwise in connection with this Agreement or the Credit,
shall not for the actual period of the existence of any loan hereunder
exceed the maximum amount of interest, nor produce a rate in excess of
the Highest Lawful Rate, (iii) if, for any reason, usurious interest is
contracted for, charged or received, then the sole remedy of Applicants
shall be to receive a refund thereof or a credit on the accrued and
unpaid interest and unpaid principal under this Agreement equal to the
usurious interest, it being agreed that usurious interest shall mean the
amount by which the total interest contracted for, charged or received
exceeds the amount of interest allowed by applicable law; and this
Agreement shall be automatically deemed reformed so as to permit only the
collection of the Highest Lawful Rate of interest, and (iv) determination
of the rate of interest on any loan evidenced hereby shall be made by
amortizing, prorating, allocating, and spreading, in equal parts during
the period of the full stated term of such loan, all interest at any time
contracted for, charged or received from Applicants in connection with
such loan.
E. Applicants assume all risks (political, economic or otherwise)
of disruptions or interruptions in currency exchange with respect to any
demand payable in other than United States currency, and if there is no
then prevailing exchange rate, Bank may obtain the non-United States
currency from any commercially reasonable source, in which case
Applicants shall pay Bank's cost therefor, inclusive of all expenses, in
United States currency.
F. Demand, for all purposes of this Agreement, shall be considered
made at the time Bank mails, telephones or otherwise sends notification
to Applicants.
G. Applicants agree to pay to Bank, any Member and/or Correspondent
(as hereinafter defined), or its correspondents, annually in advance not
later than forty-five (45) days prior to the then current expiration date
of the Credit, all fees and commissions owing to or which become owing
in respect of the Credit. Such fees and commissions shall be payable at
the then current rate charged by Bank and/or such other entity(ies).
Payment of such fees or commissions in advance shall not affect the
Bank's absolute right not to renew the Credit; however, should Bank
decide in its sole and absolute discretion not to renew the Credit, Bank
shall refund such advance payment to Applicants.
2. Applicants agree that if because of any law or regulation, or
because of any change in any existing law or regulation, or in the
interpretation thereof by any official authority, whether or not having
the force of law, which comes into effect after the date of this
Agreement, (a) Bank or Applicants should, with respect to this Agreement,
the Credit or any transactions hereunder or thereunder, be subject to any
tax, charge, fee, insurance premium, deduction or withholding of any kind
whatsoever, or (b) reserve requirements, or changes in existing reserve
requirements, should be imposed on Bank with respect to this Agreement
or the Credit or any transactions hereunder or thereunder, and if any of
the above-mentioned measures, or any other similar measure, should result
in (i) any increase in the cost to Bank of issuing and maintaining the
Credit pursuant to this Agreement or of any transaction under or in
connection with the Credit or this Agreement, or (ii) any reduction in
the payment or deposit of any amount (principal, interest, fee,
commission or otherwise) receivable by Bank in respect of the Credit or
this Agreement or of any transaction under the Credit or this Agreement,
then Applicants shall pay to Bank upon demand such increased cost or
reduction, including such additional amounts as may be necessary so that
every net payment or deposit, after deduction or withholding for or on
account of such payment or deposit (including any taxes levied on
additional amounts paid pursuant to this paragraph), will not be less
than the corresponding amount provided for under the Credit or this
Agreement before giving effect to such increased cost or reduction;
provided that in no event shall any additional amounts which constitute
interest exceed what is considered, together with other interest
payments, the Highest Lawful Rate.
3. Availments under the Credit may be effected through Bank or any
advising or confirming bank (the "Payor") at the then current buying rate
of the Payor for banker's sight drafts at the place from which the Payor
is to receive reimbursement under the terms of the Credit, it being
understood and further agreed: (a) that the amount(s) disbursed to the
beneficiary(ies) relative thereto may be in the currency local to the
site of the Payor, and may be reduced by any taxes and/or other charges
whether of the Payor or otherwise, and (b) that an advice of an availment
under the Credit from the Payor shall be sufficient evidence to Bank of
an availment under the Credit, and such evidence thereof shall be binding
upon Applicants for the purposes of this Agreement.
4. If at any time(s) any funds and/or securities are paid to or
deposited with or under the control of Bank, not as payment under
paragraph 1 hereof, but to be held relative hereto, same shall be held
as collateral security for the Obligations (as hereinafter defined) and
without Applicants having any right to dispose of the same while any
Obligations (as hereinafter defined) exist under this Agreement, but with
the discretionary right in Bank to release or surrender all or any part
of said funds and/or securities to or upon the order of Applicants. If
any such funds are available to Bank at its office in the currency of the
Credit at any time after payment may become due hereunder, Bank may
(acting in each instance in its discretion and without being required to
make any prior demand for payment hereunder) apply all or any part
thereof at any time(s) on account of the Obligations (as hereinafter
defined), irrespective of the then current rate of exchange. Should the
aggregate market value of any such funds and/or securities at any time(s)
suffer any decline, or should any such property be unavailable at any
time for any reason to Bank at its office or fail to conform to legal
requirements, Applicants will, upon demand, make such payment(s) on
account of the aforesaid Obligations, or as additional collateral
therefor, will deposit and pledge with Bank additional property that is
satisfactory to Bank. If any such funds as aforesaid be other than
United States Dollars and occasion arises for a refund by Bank of all or
any portion thereof, it shall be optional with Bank as to whether refund
will be made (a) in United States Dollars at the buying rate for the
foreign currency on the date of refund, or (b) in the amount and kind of
the foreign currency on the date of refund, or (c) by instructing a
branch or correspondent of Bank to hold the refundable amount of foreign
currency for Applicants' account and risk.
5. Applicants hereby pledge, assign and hypothecate to Bank as
security for any and all of the obligations and liabilities of Applicants
with respect to the Credit, the Application portion of this Agreement
(the "Application") and this Agreement, whether hereinbefore or
hereinafter referred to, now or hereafter existing (herein called the
"Obligations"), any and all property of Applicants now or at any time(s)
hereafter in Bank's possession or control or in the possession or control
of any third party acting in Bank's behalf, whether for the express
purpose of being used by Bank as collateral security or for safekeeping
or for any other or different purposes, including such property as may
be in transit by mail or carrier to or from Bank, a lien and security
interest being hereby given Bank upon and in any and all such property
for the aggregate amount of the Obligations; and Applicants authorize
Bank, at Bank's option, at any time(s), whether or not the property then
held by Bank as security hereunder is deemed by Bank to be adequate, to
appropriate and apply to or upon any and all of the Obligations, whether
or not then due, any and all monies now or hereafter with Bank on deposit
or otherwise to the credit of or belonging to Applicants and in Bank's
discretion, to hold any such monies as security for any such Obligations
until the exact amount thereof, if any, shall have been definitely
ascertained by Bank. Bank's rights, liens and security interests
hereunder shall continue unimpaired, and Applicants shall be and remain
obligated in accordance with the terms and provisions hereof,
notwithstanding the release or substitution of any property which may be
held as collateral hereunder at any time(s) or of any rights or interests
therein, or any delay, extension of time, renewal, compromise or other
indulgence granted by Bank in reference to any of the Obligations, or any
promissory note, draft, bill of exchange or other instrument given Bank
in connection with any of the Obligations, Applicants, and each of them
individually, hereby waiving notice of any such delay, extension,
release, substitution, renewal, compromise or other indulgence, and
hereby consenting to be bound thereby as fully and effectually as if
Applicants had expressly agreed thereto in advance.
6. Applicants agree at any time and from time to time, on demand,
(i) to deliver, convey, transfer or assign to Bank, as security for any
and all of the Obligations, and also for any and all other obligations
and/or liabilities, absolute or contingent, due or to become due, which
are now, or may at any time hereafter, be owing by Applicants to Bank,
additional security of a value and character satisfactory to Bank, or
(ii) to make such cash payment(s) in partial or full satisfaction of the
Obligations of such other obligations or liabilities as Bank in its sole
discretion may require.
7. Bank is hereby authorized, at its option and without any
obligation to do so, to transfer to and/or register in the name(s) of
Bank's nominee(s) all or any part of the property which may be held by
it as security at any time(s) hereunder, and to do so before or after the
maturity of any of the Obligations and with or without notice to
Applicants.
8. The word "property" as used herein includes goods and
merchandise (as well as any and all documents relative thereto),
securities, funds, monies (whether United States currency or otherwise),
choses in action and any and all other forms of property, whether real,
personal or mixed, tangible or intangible, and any right or interest of
Applicants, or any one or more of them, therein or thereto. Bank is
authorized, at its option, to file financing statement(s) and
continuation statement(s) without the signature of Applicants with
respect to any of the property, and Applicants jointly and severally
agree to pay the cost of any such filing and to sign upon request any
instruments, documents or other papers which Bank may require to perfect
its security interest in the property. A carbon, photographic or other
reproduction of this Agreement shall be sufficient as a financing
statement.
9. No proceeds of the Credit will be used for any purpose which
would constitute the Credit a "purpose credit" within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System.
10. Applicants jointly and severally represent and warrant that
(a) each of them which is not a natural person is duly organized in good
standing and validly existing with full power and authority to execute
this Agreement; (b) the execution of this Agreement has been duly
authorized by all necessary action on the part of all Applicants and does
not violate or contravene any law, regulation, order or decree or the
articles of incorporation, bylaws, partnership agreement or any other
organizational document of any Applicant; (c) all requisite licenses,
permits and franchises for the operation of Applicant's business are in
full force and effect; (d) any financial statements delivered to Bank in
connection herewith fairly present the financial condition and results
of operations of the subject or subjects thereof as of the dates and for
the periods indicated therein, and no material adverse change has
occurred in the financial condition of the subject or subjects thereof
since the dates thereof; (e) except as disclosed in writing to Bank in
connection herewith, no litigation or administrative proceeding is
pending or threatened against any Applicant; and (f) each Applicant has
filed all tax returns required to have been filed and paid all taxes
shown thereon to be due. Applicants further represent and warrant to
Bank that Applicants are not now in violation of any applicable
limitations on the aggregate amount of loans that may be made to a
borrower by any lender and that issuance of the Credit by Bank will not
be, or cause the aggregate credit outstanding to any or all Applicants
to exceed such limitations, and Applicants covenant and agree that
Applicants will at all times during the term of this Agreement fully
comply with and fully advise Bank and Member, if any, of all
circumstances relevant to, all applicable lending limits.
11. Upon the non-performance of any of the promises to pay herein
set forth, or upon the non-payment of any of the Obligations or other
obligations or liabilities of Applicants herein, upon the failure of
Applicants to furnish satisfactory additional collateral or to make
payments on account as hereinabove agreed, or to perform or comply with
any of the other terms or provisions of this Agreement, or in the event
of default under any security agreement or guaranty or other document
securing or guaranteeing Applicants' payment and performance of the
Obligations, or should any information supplied on behalf of Applicants
prove to be incorrect, false or misleading, or in the event of the death,
insolvency, business failure, dissolution or termination of existence of
any Applicant, or in case any petition in bankruptcy is filed by or
against any Applicant, or any proceeding is commenced for the relief or
readjustment of any indebtedness of any Applicant, either through
reorganization, composition, extension or otherwise, or if any Applicant
should make an assignment for the benefit of creditors or take advantage
of any insolvency law, or if a receiver for any property of any Applicant
should be appointed at any time, and in each case any of the foregoing
is initiated under laws or regulations of any jurisdiction relating to
the relief of debtors, then upon such occurrence, any or all of the
Obligations shall, at Bank's option, become due and payable immediately,
without demand or notice, notice of acceleration and of intention to
accelerate being hereby expressly waived by each Applicant.
12. Upon Applicants' failure to pay any Obligation when due, as
aforesaid, or upon the occurrence of any of the events described in
paragraph 11 above, Bank shall have, in addition to all other rights and
remedies allowed by law, the right immediately, without demand for
performance and without notice of intention to sell or of the time or
place of sale or of redemption or other notice or demand whatsoever to
any Applicant, all of which are hereby expressly waived, and without
advertisement, to sell at any broker's board, or at public or private
sale, or to grant options to purchase, or otherwise to realize upon the
whole or from time to time any part of the collateral upon which Bank
shall have a security interest or lien as aforesaid, or any interest
which Applicants may have therein, and after deducting from the proceeds
of sale or other disposition of the said collateral all expenses
(including but not limited to reasonable attorneys' fees for legal
services of every kind and other expenses as set forth below) shall apply
the residue of such proceeds toward the payment of any of the
Obligations, in such order as Bank shall elect, and whether then due or
not due, Applicants remaining liable for any deficiency remaining unpaid
after such application. If notice of any sale or other disposition is
required by law to be given, each Applicant hereby agrees that a notice
sent at least two (2) days before the time of any intended public sale
or of the time after which any private sale or other disposition of the
said collateral is to be made, shall be reasonable notice of such sale
or other disposition. Applicants also agree to assemble the said
collateral at such place or places as Bank designates by written notice.
At any such sale or other disposition, Bank may itself purchase the whole
or any part of the said collateral sold, free from any right of
redemption on the part of Applicants and free of any right to require
sale in inverse order of alienation, which rights are hereby waived and
released. Applicants agree that the said collateral secures, and further
agree to pay on demand, whether or not any default by Applicants has
occurred, all expenses (including but not limited to, reasonable
attorneys' fees for legal services of every kind, the cost of any
insurance and the payment of all taxes or other charges) of, or
incidental to, the custody, care, appraisal, sale or collection of, or
realization upon, any of the said collateral or in any way relating to
the enforcement or protection of Bank's rights hereunder. Where
applicable, Bank shall have, to the maximum extent permitted by
applicable law, in addition to and cumulative of the rights hereinabove
provided, all of the rights and remedies provided to a secured party by
the Uniform Commercial Code in effect in the State of Texas on the date
of this Agreement.
13. No delay on the part of Bank in exercising any power of sale,
lien, option or other right hereunder, and no notice or demand which may
be given or made upon Applicants by Bank with respect to any power of
sale, lien or other right hereunder, shall constitute a waiver thereof
or limit or impair the right of Bank to take any action or to exercise
any power of sale, lien, option or any other right hereunder, without
demand or notice or prejudice to the rights of Bank as against Applicants
in any respect. Any and all rights and liens of Bank hereunder shall
continue unimpaired, and Applicants shall be and remain obligated in
accordance with the terms and provisions hereof, notwithstanding the
release or substitution of any property as referred to herein, or of any
rights or interests therein, or any delay, extension of time, renewal,
compromise or other indulgence granted by Bank in reference to any of the
Obligations, Applicants each hereby waiving notice of any such delay,
extension, release, substitution, renewal, compromise or other
indulgence, and each hereby consenting to be bound thereby as fully and
effectually as if Applicants had expressly and specifically agreed
thereto.
14. The users and beneficiaries of the Credit shall be deemed
Applicants' agents, and Applicants assume all risks of the acts or
omissions of the users or beneficiaries of the Credit. Neither Bank nor
its correspondents or affiliates shall assume any liability to anyone for
failure to pay or accept if such failure is due to any restriction in
force at the time and place of presentment, and Applicants agree to
indemnify Bank from any consequences that may arise therefrom. Neither
Bank nor Bank's correspondents or affiliates shall be liable or
responsible in any respect for any (a) error, omission, interruption or
delay in transmission, dispatch or delivery of any one or more messages
or advices in connection with the Application or the Credit, whether
transmitted by cable, radio, telegraph, twx, wireless, mail, electronic
mail, telex, telefax, telecopy, SWIFT, or otherwise and despite any
cipher or code which may be employed, or (b) errors in translation or for
errors in interpretation of technical terms, or (c) action, inaction or
omission which may be taken or suffered by it or them in good faith or
through inadvertence in identifying or failing to identify any
beneficiary(ies) or otherwise in connection with the Credit, or (d)
validity, sufficiency or genuineness of document(s) even if such
document(s) should in fact prove to be in any or all respects invalid or
insufficient, fraudulent or forged, or (e) act, error, neglect or
default, omission, insolvency or failure in business of any of Bank's
correspondents. The happening of any one or more of the contingencies
described above shall not affect, impair or prevent the vesting of any
of Bank's rights or powers hereunder. In furtherance and extension and
not in limitation of the specific provisions hereinbefore set forth, it
is hereby further agreed that any action, inaction, or omission taken or
suffered by Bank or by any of its correspondents under or in connection
with the Credit or the relative drafts, demands, documents or property,
if in good faith and in conformity with such foreign or domestic laws,
customs or regulations as Bank or any of its correspondents may deem to
be applicable thereto, shall be binding upon Applicants and shall not
place Bank or any of its correspondents under any resulting liability to
Applicants. If the Credit or this Agreement shall be terminated or
revoked by operation of law as to any Applicant, or if any Applicant
shall restrain the payment of the Credit by court order or any other
means, or if this Agreement or the Credit are amended,modified, revoked
or cancelled as provided for herein and any dispute, claim, demand or
cause of action arises with respect thereto, Applicants will jointly and
severally indemnify and save Bank harmless from any and all loss, cost,
damage, expense, suit, claim, cause of action, judgment and attorneys'
fees which may be suffered or incurred by Bank, whether caused in whole
or in part by the negligence of Bank or any correspondent or affiliate
of Bank.
15. The Credit and this Agreement may be amended, modified,
cancelled or revoked only upon the receipt by Bank from all Applicants
of a written request therefor, and then only upon such terms and
conditions as Bank may prescribe and then only by a writing signed by all
Applicants, the beneficiaries and Bank. Notwithstanding the foregoing,
however, Bank may, upon receipt of a written request therefor, signed by
all Applicants, extend the expiration date and/or increase the amount of
the Credit without the written or oral acceptance or consent of any or
all beneficiaries of the Credit. Bank is authorized without reference
to or approval by any Applicant to set forth the terms appearing on the
Application portion hereof in the Credit and to modify or alter such
terms in such language as Bank may deem appropriate, with such variations
from such terms as Bank may at its discretion determine (which
determination shall be conclusive and binding upon Applicants) are
necessary and are not materially inconsistent with such terms.
16. Notwithstanding anything herein (except paragraph 17) to the
contrary, it is understood and agreed that, if the Credit is issued in
favor of a sovereign or commercial entity which is to issue a commitment
or guarantee on Applicants' behalf in connection herewith, each Applicant
shall remain liable on the Credit until Bank is fully released in writing
by such entity. Applicants jointly and severally agree to pay (a) all
costs and expenses incurred by Bank in collection of amounts advanced
under the Credit and any and all other amounts remaining unpaid hereunder
through probate, reorganization, bankruptcy or any other proceeding and
(b) reasonable attorneys' fees when and if collection of any such amount
is placed in the hands of an attorney for collection after default.
17. Notwithstanding anything contained herein or in any other
separate security agreement or other document executed heretofore,
herewith or hereafter in connection with or related to this credit
obligation, if this is a consumer credit obligation (as defined or
described in 12 C.F.R. 227, Regulation AA, promulgated by the Federal
Reserve Board), the security for this credit obligation shall not extend
to any non-possessory security interest in household goods (as defined
in said Regulation AA) other than a purchase money security interest, and
no waiver of any notice contained herein or therein shall be construed
under any circumstances to extend to any waiver of notice prohibited by
Regulation AA.
18. This Agreement and the Credit are subject to and incorporate
fully herein (except as expressly modified herein or in the Credit) the
Uniform Customs and Practice for Documentary Credits (1983 Revision),
International Chamber of Commerce Publication No. 400, (hereinafter
referred to as "the Uniform Customs"). This Agreement and the rights of
Applicants and Bank hereunder shall be subject to and governed by the
substantive laws of the State of Texas, without regard to the rules
regarding conflicts of laws, except when the substantive laws of the
State of Texas conflict with the Uniform Customs, in which event the
provisions of the Uniform Customs shall govern.
19. If the Credit is governed by the laws of a foreign
jurisdiction, the Credit may require Bank to pay funds as Bank's primary
obligation. In the event Bank is, or in good faith deems itself to be,
obligated to advance funds to the beneficiary(ies) hereof, Applicants
hereby expressly jointly and severally agree to reimburse Bank on demand
for all such advances made, notwithstanding any expiration or
cancellation of the Credit by Bank or under Texas law or the Uniform
Customs and even though Applicants may have an unresolved controversy
with a third party or the beneficiary(ies) related to the transaction for
which the Credit is being sought, including the proper interpretation of
the law of such foreign jurisdiction. In the event Applicants have a
dispute with the beneficiary(ies) or a third party, Applicants are
required to reimburse Bank on demand, and Applicants' remedy is to seek
reimbursement from the beneficiary(ies) or the third party. Bank is
expressly authorized to presume that all demands for payment made by the
beneficiary(ies) hereof are made in accordance with such foreign law.
20. Unless otherwise expressly stated herein or in the Credit,
neither the Credit nor this Agreement may be assigned by the
beneficiary(ies) or any Applicant without the prior written consent of
Bank. Bank may assign or transfer the Credit or this Agreement, or any
instrument(s) evidencing all or any of the Obligations, and may deliver
all or any of the property then held as security therefor, to the
transferee(s) of Bank, who shall thereupon become vested with all of the
powers and rights in respect thereof given to Bank herein or in the
instrument(s) transferred, and Bank shall thereafter be forever relieved
and fully discharged from any liabilities or responsibility with respect
thereto, but Bank shall retain all rights and powers hereby given with
respect to any and all instrument(s), rights or property not so
transferred.
21. This Agreement, the Application and the Credit constitute the
entire agreement among the parties hereto, except for such agreements
executed in connection herewith which specifically refer to this
Agreement, the Application or the Credit or which grant to Bank a lien
or security interest to secure any debts or obligation of any Applicant,
regardless of any reference or lack thereof to this Agreement,
Application or the Credit. Terms used herein in the plural number shall
be construed as singular as the context requires and vice versa.
22. Although the Credit may refer to a particular agreement or
other obligation to the beneficiary(ies) executed by Applicants, the
terms of such agreement are not in any manner incorporated herein. Bank
shall therefore make payment upon demand under the Credit unless it
appears that such demand, on its face, does not comply with the terms of
the Credit. Such payment shall be made without regard to performance of
any obligation by any contracting party under such agreement.
23. Applicants agree that at all times now and hereafter they
will indemnify and save Bank harmless from and against all suits,
judgments, liabilities, losses or damages to it arising in any manner,
including negligence on the part of Bank in connection with the Credit
or this Agreement, unless due to gross negligence or willful misconduct
on the part of Bank, and from and against all costs, charges and
expenses, including in connection with all legal proceedings, whether
groundless or otherwise, attorneys' fees, it being the purpose of this
Agreement to protect Bank fully in the premises.
24. Applicants agree that no acceptance or payment of overdrafts
or irregular drafts or of drafts with irregular documents attached shall,
if assented to or approved by any Applicant orally or in writing, or if
Bank in good faith accepts an indemnity limited to the actual damage, if
any, caused by such irregularity or discrepancy, impair any rights which
Bank may have under this Agreement. In case of any variation between the
documents called for by the Credit or this Agreement and the documents
accepted by Bank or Bank's correspondents, Applicants shall each be
deemed conclusively to have waived any right to object to such variation
with respect to any action by Bank or Bank's correspondents relating to
such documents and to have ratified and approved such action as having
been taken on Applicants' direction, unless Applicants immediately upon
receipt of such documents (and prior to receipt thereof by any
beneficiary or user of the Credit) file objection with Bank in writing,
or unless Bank has been provided with an indemnity, as aforesaid.
Applicants acknowledge and agree that, the information in the Application
portion of this Agreement may be transmitted to Bank and relied on by
Bank in issuing the Credit by any means acceptable to Bank, including
without limitation, SWIFT, electronic mail, telex, telephone, twx,
telecopy or telefax. Applicants, Member and Correspondent (both as
hereinafter defined) agree to hold Bank harmless from and against all
claims, expenses, costs, liabilities, attorneys' fees, suits, judgments,
and causes of action arising out of any discrepancy between the
information in this Agreement, including without limitation, the
Application, and that transmitted to, or received by, Bank.
25. Issuance by Bank of the Credit applied for herein shall
constitute acceptance by Bank of this Agreement.
26. If this Agreement contains the signature of a bank which is
a subsidiary of Texas Commerce Bancshares, Inc. (hereinafter referred to
as the "Member") or of a correspondent bank of Bank (hereinafter referred
to as the "Correspondent"), then this paragraph shall be applicable. In
consideration of Bank's issuing the Credit at the request of
Correspondent or Member, as applicable, Correspondent or Member as
applicable, agrees that it is an Applicant hereunder with respect to
Bank, and it agrees to reimburse Bank on demand and authorizes Bank,
without demand or any notice whatsoever, to charge, setoff against and
otherwise exercise any rights Bank may have with respect to, any monies
now or hereafter on deposit with or otherwise to the credit of or
belonging to Correspondent or Member, as applicable, at or with Bank for
any and all Obligations hereunder, whether or not any demand has been
made on Applicants hereunder. As an Applicant hereunder, each
Correspondent or Member Bank, as applicable, makes the same
representations, warranties, covenants and agreements to Bank as the
Applicants in paragraph 10 hereof and otherwise provided in this
Agreement; provided, however unless otherwise agreed to in writing, or
stated herein neither Member nor Correspondent agrees to furnish any
security for this Agreement or the Credit other than the aforementioned
monies. Upon Member's or Correspondent's, as applicable, payment to Bank
of all Obligations hereunder, Bank thereupon automatically, and without
further action on the part of any party, assigns and transfers its rights
hereunder to Correspondent or Member, as applicable, who shall be fully
subrogated thereto, and Applicants agree that any right, claim or cause
of action which any of them may have hereunder or under the Credit shall
be made only against Correspondent or Member, as applicable, and
Applicants agree to indemnify and hold Bank harmless from and against any
claims, costs, expenses, suits or causes of action by Applicants or any
beneficiary or user of the Credit. Applicants hereby agree that
Correspondent or Member, as applicable, shall also (in addition to Bank)
have the same rights, remedies, security interests and other liens as are
stated herein, to the same effect as if additional paragraphs were fully
written herein containing the same terms but substituting "Correspondent"
or "Member" for "Bank" throughout. All references to secured party,
beneficiary or other similar term contained in any deed of trust,
security agreement, financing statement or other document or instrument
executed contemporaneously herewith or previously executed by any of the
Applicants for the benefit of Member or Correspondent shall be deemed to
include Bank as well as Member or Correspondent. All such security
agreements, financing statements, deeds of trust and other documents and
instruments are amended to the extent necessary in order that the
Obligations of Applicants hereunder are secured thereby and by the
collateral described therein on a pari passu basis with, and in addition
to, any other obligations secured thereby.
27. If this box is checked this paragraph is applicable.
Applicants have requested Bank to issue a Credit which the Bank may, but
is not required, to renew on an annual basis until the "latest date"
indicated on the Application or such later date as any Applicant may
hereafter request in writing. Applicants agree that Bank has made no
commitment to any beneficiary or any Applicant, and that Bank has no
obligation, to renew the Credit at or prior to the original or any
subsequent expiration date. Except as expressly provided in the Credit,
Bank shall have no liability to any beneficiary for the renewal of, or
failure to renew, the Credit for any reason. Except as hereinafter
agreed, the Bank shall not have any liability to Applicants due to the
renewal of, or failure to renew, the Credit for any reason. Except to
the extent any notice may be required in the Credit, Bank is not required
to notify any beneficiary or Applicant of the renewal, or failure to
renew, the Credit. Subject to the other conditions and indemnities in
this Agreement, including negligence by Bank, Bank and Applicants agree
that Bank will not renew the Credit if it receives, and an authorized
officer of Bank acknowledges such receipt in writing, written
notification from any Applicant at least 14 days and not more than 30
days prior to the earliest date on which, pursuant to the terms of the
Credit, Bank must either renew or decline to renew the Credit or notify
beneficiary(ies) of its decision to renew or not to renew the Credit.
Such written notification must specify to the satisfaction of Bank the
Credit, the then current expiration date, and such Applicant's request
that the Credit not be renewed.
This written loan agreement represents the final agreement between the
parties and may not be contradicted by evidence of prior,
contemporaneous, or subsequent oral agreements of the parties.
There are no unwritten oral agreements between the parties.
APPLICANTS:
_______________________
Printed Name
____________________________
Printed Name By:
Authorized
Signature
By:
Authorized Signature
CORRESPONDENT/MEMBER BANK:
Printed Name
Printed Name
By: By:
Authorized Signature
Authorized Signature
BANK ACCEPTANCE: The Bank's Acceptance evidenced by the undersigned
authorized representative's signature is provided as its acknowledgment
that this agreement represents the final agreement by the parties which
may not be contradicted by evidence of prior contemporaneous, or
subsequent oral agreements between the parties.
Bank:
By:
FILE: LCAPP
081996 v2
147:13312-67
EXHIBIT "G"
Compliance Certificate
<PAGE>
COMPLIANCE CERTIFICATE
TO: TEXAS COMMERCE BANK, NATIONAL ASSOCIATION
2200 Ross Avenue
Post Office Box 660197
Dallas, Texas 75266-0197
Attention: R. Britt Langford
Gentlemen:
The undersigned is the chief executive officer or the chief
financial officer of EL CHICO RESTAURANTS, INC., a Texas corporation (the
"Borrower"), and is authorized to make and deliver this certificate
pursuant to that certain Loan Agreement dated as of September 21, 1993,
between the Borrower and Texas Commerce Bank, National Association, a
national banking association (the "Lender") (such Loan Agreement, as the
same may be amended, supplemented or modified from time to time, being
hereinafter referred to as the "Loan Agreement"). All terms defined in
the Loan Agreement shall have the same meaning herein.
In connection with the foregoing and pursuant to the terms and
provisions of the Loan Agreement, the undersigned hereby certifies to the
Lender that the following statements are true and correct:
A. Representations and Warranties. The representations
and warranties contained in Article VIII of the Loan Agreement and
in each of the other Loan Documents are true and correct on and as
of the date hereof with the same force and effect as if made on and
as of such date.
B. Financial Covenants. The information set forth below
is true and correct based upon the financial statements delivered
herewith as of the last day of the fiscal quarter next preceding
the date of this certificate:
(1) Current Ratio as of ____________, 19___:
(a) Consolidated Current Assets as of such
date . . $
(b) Consolidated Current Liabilities as of such
date . . $
(c) Ratio of Line (a) to Line (b). . ______:______
(d) Minimum Current Ratio required by
Section 11.1 of Loan Agreement . .50 to 1.0
(e) Borrower in compliance with Current Ratio
covenant? (Check whichever is true)
______ yes
______ no
(2) Coverage Ratio as of ____________, 19___ (for the
12-month period then ended):
(a) Consolidated net income. . . . . $
(b) Depreciation. $
(c) Amortization. $
(d) Interest expense . . . . . . . . $
(e) Provision for taxes, less taxes actually
paid . . $
(f) Operating lease expense. . . . . $
(g) Sum of Lines (a), (b), (c), (d), (e) and (f) $
(h) Current maturities of long-term Debt $
(i) Outstanding Advances . . . . . . $
(j) Ten percent (10%) of Line (i). . $
(k) Adjusted CMLTD (greater of Lines (h)
and (j)). . . $
(l) Sum of Lines (d), (f) and (k). . $
(m) Ratio of Line (g) to Line (l). . _____ to _____
(n) Minimum Coverage Ratio required by
Section 11.2 of Loan Agreement . 1.5 to 1.0
(o) Borrower in compliance with Coverage
Ratio? (Check whichever is true):
_____ yes
_____ no
C. Reports. Indicated below are the reports required to
be delivered on or before the date hereof under Section 9.1 of the
Loan Agreement and the reports actually delivered herewith:
(1) Annual Financial Statements. The annual audited
financial report for Borrower's fiscal year ending
__________, 19___, provided for in Section 9.1(a) of
the Loan Agreement, is to be delivered within 120 days
after the above date and accompanied by a Compliance
Certificate complete with calculations. If required
to be delivered, Borrower has indicated below whether
or not Borrower has complied with such requirement.
(Check whichever is applicable):
Required Delivered
____ yes ____ yes
____ no ____ no
(2) Quarterly Financial Statements. The unaudited
financial report for Borrower's fiscal quarter ending
_______, 19___, provided for in Section 9.1(b) of the
Loan Agreement, is required to be delivered within 45
days after the above date for the first three quarters
of each fiscal year of the Borrower, and within 60
days after the end of the last quarter of each fiscal
year of Borrower, and accompanied by a Compliance
Certificate complete with calculations. Borrower has
indicated below whether or not Borrower has complied
with such requirement. (Check whichever is
applicable):
Required Delivered
X yes _____ yes
no _____ no
The unaudited financial report of the Borrower and the
Subsidiaries delivered herewith was prepared in
accordance with GAAP and fairly and accurately
presents (subject to year-end audit adjustments) the
financial condition and results of operations of the
Borrower and the Subsidiaries, on a consolidated
basis, at the date and for the periods indicated
therein.
(3) Annual Budget. The annual budget provided for in
Section 9.1(d) of the Loan Agreement is required to be
delivered within 45 days after the end of the last
quarter of Borrower's fiscal year. Borrower has
indicated below whether Borrower has complied with
such requirement. (Check whichever is applicable):
Required Delivered
_____ yes _____ yes
_____ no _____ no
The undersigned hereby certifies that the above information and
calculations are true and correct and not misleading as of the date
hereof, and that no Default or Event of Default has occurred and is
continuing.
BORROWER:
EL CHICO RESTAURANTS, INC.
By:
Name:
Title:
Dated as of:
[insert date of
Requested Advance]
FILE: COMCERT
082096 v2
147:13312-67
EXHIBIT "H"
Guaranty<PAGE>
GUARANTY AGREEMENT
WHEREAS, the execution of this Guaranty Agreement is a condition
to the commitment by TEXAS COMMERCE BANK, NATIONAL ASSOCIATION, a
national banking association ("Lender"), to (a) loan to EL CHICO
RESTAURANTS, INC., a Texas corporation ("Borrower"), the aggregate
principal amount of up to Nine Million and No/100 Dollars
($9,000,000.00), and (b) issue letters of credit for the account of
Borrower in the aggregate amount of up to One Million and No/100 Dollars
($1,000,000.00), pursuant to that certain Loan Agreement of even date
herewith, between Borrower and Lender (as the same may be amended,
supplemented or modified from time to time, the "Loan Agreement");
NOW, THEREFORE, for valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the undersigned,
________________________________, a ___________ corporation (the
"Guarantor"), hereby irrevocably and unconditionally guarantees to Lender
the full and prompt payment and performance of the Guaranteed
Indebtedness (hereinafter defined), this Guaranty Agreement being upon
the following terms:
1. The term "Guaranteed Indebtedness", as used herein means all
of the "Obligations", as defined in the Loan Agreement. The term
"Guaranteed Indebtedness" shall include any and all post-petition
interest and expenses (including attorneys' fees) whether or not allowed
under any bankruptcy, insolvency, or other similar law.
2. This instrument shall be an absolute, continuing,
irrevocable, and unconditional guaranty of payment and performance, and
not a guaranty of collection, and Guarantor shall remain liable on its
obligations hereunder until the payment and performance in full of the
Guaranteed Indebtedness. No set-off, counterclaim, recoupment,
reduction, or diminution of any obligation, or any defense of any kind
or nature which Borrower may have against Lender or any other party, or
which Guarantor may have against Borrower, Lender, or any other party,
shall be available to, or shall be asserted by, Guarantor against Lender
or any subsequent holder of the Guaranteed Indebtedness or any part
thereof or against payment of the Guaranteed Indebtedness or any part
thereof.
3. The obligations of Guarantor hereunder shall be limited to
an aggregate amount equal to the largest amount that would not render its
obligations hereunder subject to avoidance under Section 548 of the
United States Bankruptcy Code or to being set aside, avoided, or annulled
under any applicable state law relating to fraudulent transfers or
fraudulent obligations.
4. If Guarantor becomes liable for any indebtedness owing by
Borrower to Lender by endorsement or otherwise, other than under this
Guaranty Agreement, such liability shall not be in any manner impaired
or affected hereby, and the rights of Lender hereunder shall be
cumulative of any and all other rights that Lender may ever have against
Guarantor. The exercise by Lender of any right or remedy hereunder or
under any other instrument, or at law or in equity, shall not preclude
the concurrent or subsequent exercise of any other right or remedy.
5. In the event of default by Borrower in payment or performance
of the Guaranteed Indebtedness, or any part thereof, when such Guaranteed
Indebtedness becomes due, whether by its terms, by acceleration, or
otherwise, Guarantor shall promptly pay the amount due thereon to Lender
without notice or demand in lawful currency of the United States of
America and it shall not be necessary for Lender, in order to enforce
such payment by Guarantor, first to institute suit or exhaust its
remedies against Borrower or others liable on such Guaranteed
Indebtedness, or to enforce any rights against any collateral which shall
ever have been given to secure such Guaranteed Indebtedness.
Notwithstanding anything to the contrary contained in this Guaranty
Agreement, Guarantor hereby irrevocably waives any and all rights it may
now or hereafter have under any agreement or at law or in equity
(including, without limitation, any law subrogating the Guarantor to the
rights of Lender) to assert any claim against or seek contribution,
indemnification or any other form of reimbursement from Borrower or any
other party liable for payment of any or all of the Guaranteed
Indebtedness for any payment made by Guarantor under or in connection
with this Guaranty Agreement or otherwise.
6. If acceleration of the time for payment of any amount payable
by Borrower under the Guaranteed Indebtedness is stayed upon the
insolvency, bankruptcy, or reorganization of Borrower, all such amounts
otherwise subject to acceleration under the terms of the Guaranteed
Indebtedness shall nonetheless be payable by Guarantor hereunder
forthwith on demand by Lender.
7. Guarantor hereby agrees that its obligations under this
Guaranty Agreement shall not be released, discharged, diminished,
impaired, reduced, or affected for any reason or by the occurrence of any
event, including, without limitation, one or more of the following
events, whether or not with notice to or the consent of Guarantor: (a)
the taking or accepting of collateral as security for any or all of the
Guaranteed Indebtedness or the release, surrender, exchange, or
subordination of any collateral now or hereafter securing any or all of
the Guaranteed Indebtedness; (b) any partial release of the liability of
Guarantor hereunder, or the full or partial release of any other
guarantor from liability for any or all of the Guaranteed Indebtedness;
(c) any disability of Borrower, or the dissolution, insolvency, or
bankruptcy of Borrower, Guarantor, or any other party at any time liable
for the payment of any or all of the Guaranteed Indebtedness; (d) any
renewal, extension, modification, waiver, amendment, or rearrangement of
any or all of the Guaranteed Indebtedness or any instrument, document,
or agreement evidencing, securing, or otherwise relating to any or all
of the Guaranteed Indebtedness; (e) any adjustment, indulgence,
forbearance, waiver, or compromise that may be granted or given by Lender
to Borrower, Guarantor, or any other party ever liable for any or all of
the Guaranteed Indebtedness; (f) any neglect, delay, omission, failure,
or refusal of Lender to take or prosecute any action for the collection
of any of the Guaranteed Indebtedness or to foreclose or take or
prosecute any action in connection with any instrument, document, or
agreement evidencing, securing, or otherwise relating to any or all of
the Guaranteed Indebtedness; (g) the unenforceability or invalidity of
any or all of the Guaranteed Indebtedness or of any instrument, document,
or agreement evidencing, securing, or otherwise relating to any or all
of the Guaranteed Indebtedness; (h) any payment by Borrower or any other
party to Lender is held to constitute a preference under applicable
bankruptcy or insolvency law or if for any other reason Lender is
required to refund any payment or pay the amount thereof to someone else;
(i) the settlement or compromise of any of the Guaranteed Indebtedness;
(j) any change in the corporate existence, structure, or ownership of
Borrower; or (k) any other circumstance which might otherwise constitute
a defense available to, or discharge of, Borrower or Guarantor.
8. Guarantor represents and warrants to Lender as follows:
(a) Guarantor is a corporation or partnership duly
organized, validly existing and in good standing under the laws of
the state of its organization, is qualified to do business in all
jurisdictions in which the nature of the business conducted by it
makes such qualification necessary and where failure to so qualify
would have a material adverse effect on its business, financial
condition, or operations.
(b) Guarantor has the power and authority and legal right
to execute, deliver, and perform its obligations under this
Guaranty Agreement and this Guaranty Agreement constitutes the
legal, valid, and binding obligation of Guarantor, enforceable
against Guarantor in accordance with its respective terms, except
as limited by bankruptcy, insolvency, or other laws of general
application relating to the enforcement of creditor's rights.
(c) The execution, delivery, and performance by Guarantor
of this Guaranty Agreement have been duly authorized by all
requisite action on the part of Guarantor and do not and will not
violate or conflict with the articles of incorporation, bylaws or
partnership agreement of Guarantor or any law, rule, or regulation
or any order, writ, injunction or decree of any court, governmental
authority or agency, or arbitrator and do not and will not conflict
with, result in a breach of, or constitute a default under, or
result in the imposition of any lien upon any assets of Guarantor
pursuant to the provisions of any indenture, mortgage, deed of
trust, security agreement, franchise, permit, license, or other
instrument or agreement to which Guarantor or its properties is
bound.
(d) No authorization, approval, or consent of, and no
filing or registration with, any court, governmental authority, or
third party is necessary for the execution, delivery or performance
by Guarantor of this Guaranty Agreement or the validity or
enforceability thereof.
(e) The value of the consideration received and to be
received by Guarantor as a result of Borrower and Lender entering
into the Loan Agreement and Guarantor executing and delivering this
Guaranty Agreement is reasonably worth at least as much as the
liability and obligation of Guarantor hereunder, and such liability
and obligation and the Loan Agreement have benefited and may
reasonably be expected to benefit Guarantor directly or indirectly.
(f) Guarantor has, independently and without reliance upon
Lender and based upon such documents and information as Guarantor
has deemed appropriate, made its own analysis and decision to enter
into this Guaranty Agreement.
(g) The ability of Borrower to borrow and obtain letters
of credit from time to time under the Loan Agreement will benefit
Guarantor and the consolidated corporate group of which the
Guarantor is a part and are necessary and convenient to the
conduct, promotion and attainment of the business of Guarantor.
(h) Guarantor hereby acknowledges that as additional
consideration for entering into this agreement, Borrower has agreed
to pay to Guarantor an annual guaranty fee as specified on
Schedule 6 to the Loan Agreement and that Guarantor has received
the first annual portion of such guaranty fee in the amount shown
on such Schedule 6.
(i) Guarantor has adequate capital to conduct its business
as presently conducted and as proposed to be conducted and will be
able to meet its obligations hereunder and in respect of its other
existing and future indebtedness and liabilities as and when the
same shall be due and payable.
(j) Guarantor has determined that the execution and
delivery of this Guaranty Agreement is to its advantage and
benefit, taking into account all relevant facts and circumstances.
9. Lender shall have the right to set off and apply against this
Guaranty Agreement or the Guaranteed Indebtedness or both, at any time
and without notice to Guarantor, any and all deposits (general or
special, time or demand, provisional or final) or other sums at any time
credited by or owing from Lender to Guarantor whether or not the
Guaranteed Indebtedness is then due and irrespective of whether or not
Lender shall have made any demand under this Guaranty Agreement. As
security for this Guaranty Agreement and the Guaranteed Indebtedness,
Guarantor hereby grants Lender a security interest in all money,
instruments, certificates of deposit, and other property of Guarantor now
or hereafter held by Lender, including without limitation, property held
in safekeeping. In addition to Lender's right of setoff and as further
security for this Guaranty Agreement and the Guaranteed Indebtedness,
Guarantor hereby grants Lender a security interest in all deposits
(general or special, time or demand, provisional or final) and all other
accounts of Guarantor now or hereafter on deposit with or held by Lender
and all other sums at any time credited by or owing from Lender to
Guarantor. The rights and remedies of Lender hereunder are in addition
to other rights and remedies (including, without limitation, other rights
of setoff) which Lender may have.
10. Guarantor hereby agrees that the Subordinated
Indebtedness (hereinafter defined) shall be subordinate and junior in
right of payment to the prior payment in full of all Guaranteed
Indebtedness, and Guarantor hereby assigns the Subordinated Indebtedness
to Lender as security for the Guaranteed Indebtedness. If any sums shall
be paid to Guarantor by Borrower or any other person or entity on account
of the Subordinated Indebtedness, such sums shall be held in trust by
Guarantor for the benefit of Lender and shall forthwith be paid to Lender
without affecting the liability of Guarantor under this Guaranty
Agreement and may be applied by Lender against the Guaranteed
Indebtedness in such order and manner as Lender may determine in its sole
discretion. Upon the request of Lender, Guarantor shall execute,
deliver, and endorse to Lender such documents and instruments as Lender
may request to perfect, preserve, and enforce its rights hereunder. For
purposes of this Guaranty Agreement, the term "Subordinated Indebtedness"
means all indebtedness, liabilities, and obligations of Borrower to
Guarantor, whether such indebtedness, liabilities, and obligations now
exist or are hereafter incurred or arise, or whether the obligations of
Borrower thereon are direct, indirect, contingent, primary, secondary,
several, joint and several, or otherwise, and irrespective of whether
such indebtedness, liabilities, or obligations are evidenced by a note,
contract, open account, or otherwise, and irrespective of the person or
persons in whose favor such indebtedness, obligations, or liabilities
may, at their inception, have been, or may hereafter be created, or the
manner in which they have been or may hereafter be acquired by Guarantor.
(a) In the event of any receivership, bankruptcy,
reorganization, rearrangement, debtor's relief, or other insolvency
proceeding involving Borrower as debtor, Lender shall have the right to
prove and vote any claim under the Subordinated Indebtedness and to
receive directly from the receiver, trustee or other court custodian all
dividends, distributions, and payments made in respect of the
Subordinated Indebtedness. Lender may apply any such dividends,
distributions, and payments against the Guaranteed Indebtedness in such
order and manner as Lender may determine in its sole discretion.
(b) Guarantor agrees that all promissory notes, accounts
receivable, ledgers, records, or any other evidence of Subordinated
Indebtedness shall contain a specific written notice thereon that the
indebtedness evidenced thereby is subordinated under the terms of this
Guaranty Agreement.
11. No amendment or waiver of any provision of this Guaranty
Agreement or consent to any departure by the Guarantor therefrom shall
in any event be effective unless the same shall be in writing and signed
by Lender. No failure on the part of Lender to exercise, and no delay
in exercising, any right, power, or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right,
power, or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power, or privilege. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
12. Any acknowledgment or new promise, whether by payment of
principal or interest or otherwise and whether by Borrower or others
(including Guarantor), with respect to any of the Guaranteed Indebtedness
shall, if the statute of limitations in favor of Guarantor against Lender
shall have commenced to run, toll the running of such statute of
limitations and, if the period of such statute of limitations shall have
expired, prevent the operation of such statute of limitations.
13. This Guaranty Agreement is for the benefit of Lender and its
successors and assigns, and in the event of an assignment of the
Guaranteed Indebtedness, or any part thereof, the rights and benefits
hereunder, to the extent applicable to the indebtedness so assigned, may
be transferred with such indebtedness. This Guaranty Agreement is
binding not only on Guarantor, but on Guarantor's successors and assigns.
14. Guarantor recognizes that Lender is relying upon this
Guaranty Agreement and the undertakings of Guarantor hereunder in making
extensions of credit to Borrower under the Loan Agreement and further
recognizes that the execution and delivery of this Guaranty Agreement is
a material inducement to Lender in entering into the Loan Agreement.
Guarantor hereby acknowledges that there are no conditions to the full
effectiveness of this Guaranty Agreement.
15. This Guaranty Agreement is executed and delivered as an
incident to a lending transaction negotiated, consummated, and
performable in Dallas County, Texas, and shall be governed by and
construed in accordance with the laws of the State of Texas. Any action
or proceeding against Guarantor under or in connection with this Guaranty
Agreement may be brought in any state or federal court in Dallas County,
Texas. Guarantor hereby irrevocably (i) submits to the nonexclusive
jurisdiction of such courts, and (ii) waives any objection it may now or
hereafter have as to the venue of any such action or proceeding brought
in such court or that such court is an inconvenient forum. Guarantor
agrees that service of process upon it may be made by certified or
registered mail, return receipt requested, at its address specified
below. Nothing herein shall affect the right of Lender to serve process
in any other matter permitted by law or shall limit the right of Lender
to bring any action or proceeding against Guarantor or with respect to
any of Guarantor's property in courts in other jurisdictions. Any action
or proceeding by Guarantor against Lender shall be brought only in a
court located in Dallas County, Texas.
16. Guarantor shall pay on demand all reasonable attorneys' fees
and all other reasonable costs and expenses incurred by Lender in
connection with the preparation, administration, enforcement, or
collection of this Guaranty Agreement.
17. Guarantor hereby waives promptness, diligence, notice of any
default under the Guaranteed Indebtedness, demand of payment, notice of
acceptance of this Guaranty Agreement, presentment, notice of protest,
notice of dishonor, notice of the incurring by Borrower of additional
indebtedness, notice of intent to accelerate, notice of acceleration, and
all other notices and demands with respect to the Guaranteed Indebtedness
and this Guaranty Agreement.
18. The Loan Agreement, and all of the terms thereof, are
incorporated herein by reference, the same as if stated verbatim herein,
and Guarantor agrees that Lender may exercise any and all rights granted
to it under the Loan Agreement and the other Loan Documents (as defined
in the Loan Agreement) without affecting the validity or enforceability
of this Guaranty Agreement.
19. Guarantor hereby represents and warrants to Lender that
Guarantor has adequate means to obtain from Borrower on a continuing
basis information concerning the financial condition and assets of
Borrower and the Guarantor is not relying upon Lender to provide (and
Lender shall have no duty to provide) any such information to Guarantor
either now or in the future.
20. THIS GUARANTY AGREEMENT EMBODIES THE FINAL, ENTIRE AGREEMENT
OF GUARANTOR AND LENDER WITH RESPECT TO GUARANTOR'S GUARANTY OF THE
GUARANTEED INDEBTEDNESS AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF. THIS GUARANTY AGREEMENT IS
INTENDED BY GUARANTOR AND LENDER AS A FINAL AND COMPLETE EXPRESSION OF
THE TERMS OF THE GUARANTY AGREEMENT, AND NO COURSE OF DEALING BETWEEN
GUARANTOR AND LENDER, NO COURSE OF PERFORMANCE, NO TRADE PRACTICES, AND
NO EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR
DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE SHALL BE USED TO
CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS GUARANTY
AGREEMENT. THERE ARE NO ORAL AGREEMENTS BETWEEN GUARANTOR AND LENDER.
EXECUTED as of the _____ day of __________________, 19___.
GUARANTOR:
a _________________________
By:________________________
Name:
Title:
Address:
FILE: GUAR
082196 v3
147:13312-67
SCHEDULE 1
EXISTING LITIGATION
(1.) Alexandria Mall Company v. El Chico Restaurants of the
Ark-La-Tex, Inc. and El Chico Corporation, [#218F] 149,777, filed
April 28, 1988 in the Ninth Judicial District Court, Parish of
Rapides, Louisiana, alleging defendant abandoned the premises on April
6, 1988, and prays judgment in the amount of $12,393.03 together with
interest thereon from date until paid, reasonable attorneys' fees and
all costs of proceedings. This case is being defended by Percy,
Smith, Foote and Honeycut of Alexandria, Louisiana (attorneys
representing B. L. Littleton, owner of the above named defendant
franchisee corporation) pursuant to the commitment dated April 6,
1988, by B. L. Littleton and El Chico Restaurants of the Ark-La-Tex,
Inc. to hold harmless and indemnify El Chico Corporation (franchisor)
from any loss resulting from this dispute.
(2.) Gaye Martin v. Southwest Cafes, Inc., et al, [#16], 373,736,
filed August 6, 1991 in the 1st Judicial District of Caddo Parish,
Louisiana alleging personal injuries received on or about August 4,
1990, and prays judgment for such sums as the Court may direct or for
any award justified under the law for the damages sustained, and for
all general and equitable relief. This general liability case is
being defended by CNA Insurance Company.
(3.) Vickie Barnette v. El Chico Restaurant No. 6, Inc., et al,
[#205], 83499, filed October 18, 1991 in the 26th Judicial District
Court of Bossier Parish, Louisiana alleging personal injuries received
on or about October 22, 1990, and prays judgment in favor of Plaintiff
and against Defendants, in solido, for all damages, together with
legal interest from date of judicial demand until paid, all costs of
this proceeding, and for all general and equitable relief. Pursuant
to a letter received by the defense attorney appointed by CNA
Insurance, Travelers Insurance Company/Whitten Acoustics and Drywall
have agreed to defend and to indemnify Southwest Cafes, Inc., in
connection with the claims brought by Vickie Barnette in this case.
This general liability case is being defended by CNA Insurance
Company.
(4.) David Bates, d/b/a D. Bates Contractor v. El Chico Realty
Corporation, et al, [#205], Cause No. 84,203, filed October 29,
1992, in the 26th Judicial Court, Bossier Parish, Louisiana, alleging
nonpayment of work performed, and prays judgment in the amount of
$7,641.00 plus legal interest from January 24, 1992 until paid, plus
all costs of these proceedings and for reasonable attorney's fees.
This case is being defended by Walker, Tooke, Perlman & Lyons of
Shreveport, LA.
(5.) Patty Berkey v. Southwest Cafes, Inc., [#37], Cause No. CJ
92 9230, filed November 6, 1992, in the District Court of Oklahoma
County, Oklahoma, alleging the Plaintiff contracted hepatitis, and
prays judgment in the amount of $10,000.00, exclusive of interest and
costs and any other relief the Court deems just and equitable. This
general liability case is being defended by CNA Insurance Company.
(6.) Lester Elie v. Southwest Cafes of Tennessee, Inc., [#51],
Cause No. 92C-3286, filed December 11, 1992, in the Circuit Court for
Davidson County, Tennessee, alleging wrongful discharge, and prays
judgment in the amount of $100,000 plus reasonable attorney's fees.
This case is being defended by Manier, Herod, Hollabaugh & Smith of
Nashville, Tennessee.
(7.) Lester Elie v. Southwest Cafes of Tennessee, Inc., [#51],
Cause No. 92C-3285, filed December 11, 1992, in the Circuit Court for
Davidson County, Tennessee, alleging personal injuries received on or
about September 2, 1992, and prays judgment against Defendant's
worker's compensation in the amount of the unpaid temporary total
disability benefits, reasonable and necessary medical expenses
incurred, reasonable and necessary future medical expenses which may
be incurred, for permanent partial and permanent disability benefits,
and a lump sum award and/or penalties, fines or damages for willful
failure to honor the Worker's Compensation claim plus attorney's fees
and such other and general relief which Plaintiff may be entitled
under the Worker's Compensation Act. This case is being defended by
CNA Insurance Company.
(8.) Jim Bruner and Dana Bruner v. El Chico Restaurants, Inc.,
[#112] Cause No. 93-3917, filed April 14, 1993, in the 192nd Judicial
District Court for Dallas County, Texas, alleging personal injuries
received on or about September 10, 1991, and prays judgment that each
plaintiff recover actual and punitive damages, prejudgment and
post-judgment interest at the highest lawful rate, costs of court and
other relief at law and equity to which they may be entitled. This
general liability case is being defended by CNA Insurance Company.
(9.) Alice Benge v. El Chico, Inc., (sic), [#73], Civil Warrant
No. 484479, filed April 28, 1993, in the Court of General Sessions
for Shelby County, Tennessee, alleging personal injuries received on
or about May 4, 1992, and seeks judgment in the amount of under
$15,000. This general liability case is being defended by CNA
Insurance Company.
FILE: EXLIT
082196 v2
147:13312-67
SCHEDULE 2
Existing Debt
Unpaid
Principal
Orig. Orig. Maturity Interest As
Lender Instrument Date Principal Date Rate @ 8/31/93
Funded Debt
-----------
Bank
One, Secured $1,275,000 Prime rate
Texas Debt 9/24/91 (1) 9/24/96 + 1/2% $1,051,875
Southwestern
Life Secured
Debt 5/1/1979 $290,000 5/1/99 9.5% $141,762
Other Debt
----------
Bank One,
Texas Letter 3/11/94
of Credit 3/30/93 $571,000 (2)
(1) To be paid in full with proceeds from this loan agreement.
(2) To be replaced with a letter of credit issued under this loan
agreement on or before March 11, 1994, subject to terms and
conditions of this loan agreement and to be terminated in the
event a replacement letter of credit is issued under this loan
agreement.
FILE: EXDEBT
082196 v2
147:13312-67
SCHEDULE 3
LIST OF SUBSIDIARIES
As of September 14, 1993
SUBSIDIARIES OF BORROWER
- ------------------------
JURISDICTION OF VOTING STOCK OWNED
NAME OF SUBSIDIARY INCORPORATION BY THE BORROWER
- ------------------------------- ------------- -----------------
El Chico Realty Corporation Texas 100%
Concepts, Inc. Texas 100%
El Chico Bebidas Company Texas 49%
El Chico Restaurant No. 6, Inc. Texas 100%
El Chico Corporation of Oklahoma, Inc. Oklahoma 100%
El Chico Restaurant No. 20, Inc. Texas 100%
Southwest Cafes of Tennessee, Inc. Tennessee 100%
El Chico Corporation (Georgia) Georgia 100%
El Chico Corporation of Alabama Alabama 100%
El Chico Corporation of Florida Florida 100%
Pronto Design & Supply, Inc. Texas 100%
Nuevo Ventures, Inc. Texas 100%
SUBSIDIARIES OF CONCEPTS, INC.
- ------------------------------
JURISDICTION OF VOTING STOCK OWNED
NAME OF SUBSIDIARY INCORPORATION BY CONCEPTS, INC.
Concepts Beverages of Oklahoma
City, Inc. Oklahoma 100%
Concepts Beverages of South
Meridian, Inc. Oklahoma 100%
SUBSIDIARIES OF EL CHICO CORPORATION OF OKLAHOMA, INC.
- ------------------------------------------------------
VOTING STOCK OWNED
JURISDICTION OF BY EL CHICO CORP.
NAME OF SUBSIDIARY INCORPORATION OF OKLAHOMA, INC.
100%
Bebidas Company of Tulsa, Inc. (#29) Oklahoma 100%
Bebidas Company of Oklahoma City,
Inc. (#56) Oklahoma 100%
Bebidas Company of Midwest City,
Inc. (#88) Oklahoma 100%
Bebidas Company of Tulsa No. 65,
Inc. Oklahoma 100%
Bebidas Company of Oklahoma City
No. 36, Inc. Oklahoma 100%
Bebidas Company of Oklahoma City
No. 101, Inc. Oklahoma 100%
Bebidas Company of Broken Arrow,
Inc. (#110) Oklahoma 100%
Bebidas Company of Oklahoma City
No. 37, Inc. Oklahoma 100%
Bebidas Company of Norman,
Inc. (New #23) Oklahoma 100%
FILE: SUBS
082196 v2
147:13312-67
SCHEDULE 4
Environmental Matters
NONE
SCHEDULE 5
Existing Liens
<PAGE>
SCHEDULE 5
EXISTING LIENS
(1.) On the 16th of February, 1993, Chris Curtis d/b/a Concrete
Carpentry Construction Plus located at 901 NW 47, Oklahoma City, Oklahoma
73118, did file a Lien Statement claiming a lien against Aubry Group,
Inc., the same being Lien No. 93-ML-1640 against the following described
property and the improvements thereof: Former Cactus Restaurant No. 703,
2037 S. Meridan, Oklahoma City, Oklahoma 73108. Said lien being for
labor and or materials furnished in the amount of $8,050.00.
(2.) John Dowd, President of United Plumbing Co., Inc., has furnished
labor and materials to improve the following described property: El
Chico Restaurant No. 67, 2909 I-40 West, Amarillo, Texas 79102.
Wilson/Barnes General Contractors, Inc., was the original contractor on
the project. The Claimant's business address is 3312 W. 45th St.,
Amarillo, Texas 79109. The principal amount of the claim is $35,147.74.
The labor and materials are described as follows: Labor necessary to
install Plumbing Materials including but not limited to pipe, valves,
fittings and related materials. Sworn to the 8th day of July, 1993.
(3.) Jeanne Herrin, the Area Credit Manager of Cummins Supply Company,
a Division of Summers Group, Inc., furnished materials to improve the
following described property: El Chico Restaurant No. 67, 2909 I-40
West, Amarillo, Potter County, Texas 79102. Wilson-Barnes General
Contractors, Inc., is the Original Contractor on the project. Folsom
Electric ("Claimant's Customer") is a subcontractor on the project, and
said materials were furnished to Folsom Electric by Claimant. The
Claimant's business address is 4601 Spring Valley Road, Dallas, Texas
75244. The principal amount of the claim is $8,537.49. The materials
are describe as follows: Electrical supplies, including, but not limited
to, wire, panels and fixtures. Sworn to August 12, 1993.
(4.) Equipment leases covering restaurant equipment, computer equipment
and software.
(5.) Liens in favor of Bank One, Texas, N.A., which shall be released
upon the initial advance under this Loan Agreement.
FILE: EXLIENS
082196 v2
147:13312-67
SCHEDULE 6
Guarantors
Date of
Guarantor Guaranty Guaranty Fee
----------------------- -------- ------------
El Chico Corporation of
Oklahoma, Inc. 9-21-93 $10,000.00*
El Chico Realty Corporation 9-21-93 $27,496.00*
Southwest Cafes of
Tennessee, Inc. 9-21-93 $10,000.00*
* Amount shown is annual guaranty fee for first year. Annual
guaranty fee for subsequent years is to be determined in accordance
with the letter agreement of even date herewith among Borrower and
the Guarantors, as follows:
Applicable Committed Sum, multiplied by .75%,
multiplied by 110%, allocated among the Guarantors as
provided in such letter agreement, but not less than
$10,000 per annum for any Guarantor.
FIRST AMENDMENT TO LOAN AGREEMENT
THIS FIRST AMENDMENT TO LOAN AGREEMENT (the "Amendment"), dated as
of January 20, 1994, is between EL CHICO RESTAURANTS, INC., a Texas
corporation ("Borrower"), and TEXAS COMMERCE BANK NATIONAL ASSOCIATION
(successor by merger to Texas Commerce Bank, National Association), a
national banking association ("Lender").
RECITALS:
A. Borrower and Lender have entered into that certain Loan
Agreement (the "Agreement") dated as of September 21, 1993.
B. Pursuant to the Agreement, El Chico Corporation of Oklahoma,
Inc., an Oklahoma corporation ("Oklahoma"), El Chico Realty Corporation,
a Texas corporation ("Realty"), and Southwest Cafes of Tennessee, Inc.,
a Tennessee corporation ("Tennessee", and together with Oklahoma and
Realty, collectively the "Guarantors" and each a "Guarantor"), each
executed a Guaranty Agreement (collectively, the "Guaranties" and each
a "Guaranty") dated as of September 21, 1993 which guaranteed to Lender
the payment and performance of the Obligations (as defined in the
Agreement).
C. Borrower and Lender now desire to amend the Agreement as
herein set forth.
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 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. Each reference
herein and in the Agreement to the "Limited Partnership" shall mean Texas
El Chico Restaurants, L.P., a Delaware limited partnership.
ARTICLE II
Amendments
Section 1 Amendment to Debt Covenant. Effective as of the date
hereof, subsections (a) and (b) of Section 10.01 of the Agreement are
hereby deleted in their entirety and replaced with the following
subsections (a), (b) and (c), which shall read in their entirety as
follows:
(a) Funded Debt to the Lender;
(b) Existing Funded Debt described on Schedule 2
hereto; and
(c) Funded Debt of any of the Subsidiaries to the
Borrower permitted by Sections 10.05 and 10.06, provided that
(i) all such Funded Debt shall at all times be unsecured, and
(ii) all such Funded Debt of any of the Guarantors to the
Borrower shall be subordinated to the obligations,
liabilities and indebtedness of the Guarantors to the Lender,
pursuant to a written subordination agreement in form and
substance satisfactory to the Lender.
Section 2 Amendment to Limitation on Liens. Effective as of the
date hereof, the phrase "within thirty (30) days after such initial
Advance is made" appearing in subsection (a) of Section 10.02 of the
Agreement is hereby amended to read "on or before February 15, 1994".
Section 3 Amendment to Covenant Regarding Mergers, Etc. Effective
as of the date hereof, the amount "$1,000" appearing in subsection (iii)
of Section 10.03 of the Agreement is hereby amended to read "$10,000".
Section 4 Amendment to Restricted Payments Covenant. Effective
as of the date hereof, Section 10.04 of the Agreement is hereby amended
by adding the following sentence to the end thereof, which shall read in
its entirety as follows:
The Limited Partnership shall not make any payment or
distribution (in cash, property, or obligations) to any of
its general or limited partners, except for (i) distributions
to any partner which is not a Guarantor, so long as no
Default or Event of Default has occurred and is continuing
and provided that the distributed amount or property is
transferred or distributed by such partner to Borrower within
ninety (90) days after the date of such distribution, and
(ii) distributions to any partner which is a Guarantor.
Section 5 Amendment to Covenant Regarding Transactions With
Affiliates. Effective as of the date hereof, Section 10.06 of the
Agreement is hereby amended by adding the following proviso to the end
of the last sentence thereof, which proviso shall read in its entirety
as follows:
; provided, however, that so long as no Default or Event of
Default has occurred and is continuing, the Borrower or any
Subsidiary which is a Guarantor shall be permitted to assign,
transfer or convey any of its properties or assets, or
advance any funds, to any Subsidiary which is not a Guarantor
provided that such properties, assets or funds are
transferred or distributed by such Subsidiary to Borrower
within ninety (90) days after the date of such assignment,
transfer, conveyance or advance.
Section 6 Amendment to Events of Default. Effective as of the
date hereof, Section 12.01 of the Agreement is hereby amended by adding
the following subsection (l) to the end thereof, which shall read in its
entirety as follows:
(1) The Borrower or any Subsidiary which is a
Guarantor shall pay, distribute, advance, assign, transfer
or convey any of its properties, assets or funds to any
Subsidiary which is not a Guarantor and such properties,
assets or funds are not transferred or distributed by such
Subsidiary to the Borrower within ninety (90) days
thereafter.
Section 7 Amendment to Schedules. Effective as of the date
hereof, Schedule 3 to the Agreement is hereby amended in its entirety to
read as set forth on Annex I hereto, and Schedule 6 to the Agreement is
hereby amended in its entirety to read as set forth on Annex II hereto.
ARTICLE III
Consent; Ratifications, Representations and Warranties
Section 1 Consent to Merger. The Lender hereby consents to the
merger of El Chico Restaurant No. 20, Inc. into El Chico Restaurants
Arkansas, Inc., to the extent such merger would otherwise violate the
covenant contained in Section 10.03 of the Agreement.
Section 2 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, each of the other Loan Documents, and the obligations,
indebtedness and liabilities of Borrower thereunder are ratified and
confirmed and shall continue in full force and effect. Borrower and
Lender agree that the Agreement as amended hereby, each of the other Loan
Documents, and the obligations, indebtedness and liabilities of Borrower
thereunder shall continue to be legal, valid, binding and enforceable in
accordance with its terms.
Section 3 Representations and Warranties. Borrower hereby
represents and warrants to Lender 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, (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, (iv) Borrower is in full compliance with all
covenants and agreements contained in the Agreement as amended hereby,
(v) Borrower owns one hundred percent (100%) of the issued and
outstanding capital stock of El Chico Service Company, a Delaware
corporation ("Service"), and of ECRT, Inc., a Delaware corporation
("ECRT"), (vi) Service and ECRT own one hundred percent (100%) of the
partnership interests of the Limited Partnership, and (vii) ECRT owns no
property or assets other than its limited partnership interest in the
Limited Partnership and cash and investments in an amount no greater than
$10,000.00.<PAGE>
ARTICLE IV
Miscellaneous
Section 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 Lender or any closing
shall affect the representations and warranties or the right of Lender
to rely upon them.
Section 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 3 Expenses of Lender. As provided in the Agreement,
Borrower agrees to pay on demand all costs and expenses incurred by
Lender 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 Lender's legal counsel, and all
costs and expenses incurred by Lender in connection with the enforcement
or preservation of any rights under the Agreement, as amended hereby, or
any other Loan Document, including without limitation the costs and fees
of Lender's legal counsel.
Section 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 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 6 Successors and Assigns. This Amendment is binding upon
and shall inure to the benefit of Lender 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 Lender.
Section 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 8 Effect of Waiver. No consent or waiver, express or
implied, by Lender to or for any breach of or deviation from any
covenant, condition or duty by Borrower or 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 9 Headings. The headings, captions, and arrangements
used in this Amendment are for convenience only and shall not affect the
interpretation of this Amendment.
Section 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 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.
Executed as of the date first written above.
Borrower:
EL CHICO RESTAURANTS, INC.
By: /s/Lawrence E. White
--------------------------
Lawrence E. White
Executive Vice President and
Chief Financial Officer
By: /s/John A. Cuellar
--------------------------
John A. Cuellar
Senior Vice President and
General Counsel
Lender:
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
By: /s/R. Britt Langford
--------------------------
R. Britt Langford
Senior Vice President
Each of the undersigned Guarantors hereby consents and agrees to this
Amendment and agrees that its Guaranty shall remain in full force and effect
and shall continue to be the legal, valid and binding obligation of such
Guarantor enforceable against such Guarantor in accordance with its terms.
Guarantors:
EL CHICO CORPORATION OF
OKLAHOMA, INC.
By: /s/Susan R. Holland
--------------------------
Susan R. Holland
President
EL CHICO REALTY CORPORATION
By: /s/Lawrence E. White
--------------------------
Lawrence E. White
Vice President
SOUTHWEST CAFES OF TENNESSEE, INC.
By: /s/Susan R. Holland
--------------------------
Susan R. Holland
President
FILE: IST
011994TCB2
ELCH T2408-16800<PAGE>
ANNEX I
Schedule 3
Subsidiaries
<PAGE>
SCHEDULE 3
LIST OF SUBSIDIARIES
As of January 20, 1994
SUBSIDIARIES OF BORROWER
- ------------------------
JURISDICTION OF VOTING STOCK OWNED
NAME OF SUBSIDIARY INCORPORATION BY THE BORROWER
- ------------------------------- ------------- -----------------
El Chico Realty Corporation Texas 100%
Concepts, Inc. Texas 100%
El Chico Bebidas Company Texas 49%
El Chico Restaurants of Louisiana, Inc. Delaware 100%
El Chico Corporation of Oklahoma, Inc. Oklahoma 100%
El Chico Restaurant No. 20, Inc. Delaware 100%
Southwest Cafes of Tennessee, Inc. Tennessee 100%
El Chico Corporation (Georgia) Georgia 100%
El Chico Corporation of Alabama Alabama 100%
El Chico Corporation of Florida Florida 100%
Pronto Design & Supply, Inc. Texas 100%
Nuevo Ventures, Inc. Texas 100%
El Chico Service Company Delaware 100%
ECRT, Inc. Delaware 100%
SUBSIDIARIES OF CONCEPTS, INC.
- ------------------------------
JURISDICTION OF VOTING STOCK OWNED
NAME OF SUBSIDIARY INCORPORATION BY CONCEPTS, INC.
Concepts Beverages of Oklahoma
City, Inc. Oklahoma 100%
Concepts Beverages of South
Meridian, Inc. Oklahoma 100%
SUBSIDIARIES OF EL CHICO CORPORATION OF OKLAHOMA, INC.
- ------------------------------------------------------
VOTING STOCK OWNED
JURISDICTION OF BY EL CHICO CORP.
NAME OF SUBSIDIARY INCORPORATION OF OKLAHOMA, INC.
100%
Bebidas Company of Tulsa, Inc. (#29) Oklahoma 100%
Bebidas Company of Oklahoma City,
Inc. (#56) Oklahoma 100%
Bebidas Company of Midwest City,
Inc. (#88) Oklahoma 100%
Bebidas Company of Tulsa No. 65,
Inc. Oklahoma 100%
Bebidas Company of Oklahoma City
No. 36, Inc. Oklahoma 100%
Bebidas Company of Oklahoma City
No. 101, Inc. Oklahoma 100%
Bebidas Company of Broken Arrow,
Inc. (#110) Oklahoma 100%
Bebidas Company of Oklahoma City
No. 37, Inc. Oklahoma 100%
Bebidas Company of Tulsa No. 23 Inc. Oklahoma 100%
<PAGE>
ANNEX II
Schedule 6
Guarantors
Guarantor Date of
Guaranty Guaranty Fee
- -------------------------- --------- ------------
El Chico Corporation of
Oklahoma, Inc. 9-21-93 $10,000.00*
El Chico Realty Corporation 9-21-93 $27,469.00*
Southwest Cafes of
Tennessee, Inc. 9-21-93 $10,000.00*
El Chico Service Company 1-20-94 $10,000.00*
Texas El Chico Restaurants,
L.P. 1-20-94 $26,604.00*
* Amount shown is annual guaranty fee for first year. Annual
guaranty fee for subsequent years is to be determined in
accordance with the agreement among Borrower and the
Guarantors, as follows:
Applicable Committed Sum, multiplied by .75%,
multiplied by 110%, allocated among the Guarantors as
provided in such agreement, but not less than $10,000
per annum for any Guarantor.
SECOND AMENDMENT TO LOAN AGREEMENT
THIS SECOND AMENDMENT TO LOAN AGREEMENT (the "Amendment"), dated
as of August 18, 1994, is between EL CHICO RESTAURANTS, INC., a Texas
corporation ("Borrower"), and TEXAS COMMERCE BANK NATIONAL ASSOCIATION
(successor by merger to Texas Commerce Bank, National Association), a
national banking association ("Lender").
RECITALS:
A. Borrower and Lender have entered into that certain Loan
Agreement dated as of September 21, 1993, as amended by that certain
First Amendment to Loan Agreement dated as of January 20, 1994 (such Loan
Agreement, as so amended, is hereinafter referred to as the "Agreement").
B. Pursuant to the Agreement, El Chico Corporation of Oklahoma,
Inc., an Oklahoma corporation ("Oklahoma"), El Chico Realty Corporation,
a Texas corporation ("Realty"), Southwest Cafes of Tennessee, Inc., a
Tennessee corporation ("Tennessee"), El Chico Service Company, a Delaware
corporation ("Service"), Texas El Chico Restaurants, L.P., a Delaware
limited partnership (the "Partnership", and together with Oklahoma,
Realty, Tennessee and Service, collectively the "Guarantors" and each a
"Guarantor"), each executed a Guaranty Agreement (collectively, the
"Guaranties" and each a "Guaranty") which guaranteed to Lender the
payment and performance of the Obligations (as defined in the Agreement).
C. Borrower and Lender now desire to amend the Agreement as
herein set forth.
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 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
Amendments
Section 1 Amendment to Current Ratio Covenant. Effective as of
the date hereof, Section 11.01 of the Agreement is amended to read in its
entirety as follows:
Section 11.01 Current Ratio. Beginning on the earlier
of (i) the date on which the unaudited quarterly financial
report of Borrower for the quarter ended March 31, 1997 is
required to be delivered to lender under Section 9.01(b), or
(ii) the date upon which the unaudited financial report of
Borrower for such quarter is actually delivered to Lender,
Borrower will at all times maintain a Current Ratio of not
less than .50 to 1.00.
ARTICLE III
Ratifications, Representations and Warranties
Section 1 Ratifications. The terms and provisions set forth in<PAGE>
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, each of the other Loan Documents, and the obligations,
indebtedness and liabilities of Borrower thereunder are ratified and
confirmed and shall continue in full force and effect. Borrower and
Lender agree that the Agreement as amended hereby, each of the other Loan
Documents, and the obligations, indebtedness and liabilities of Borrower
thereunder shall continue to be legal, valid, binding and enforceable in
accordance with its terms.
Section 2 Representations and Warranties. Borrower hereby
represents and warrants to Lender 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, (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 IV
Miscellaneous
Section 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 Lender or any closing
shall affect the representations and warranties or the right of Lender
to rely upon them.
Section 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 3 Expenses of Lender. As provided in the Agreement,
Borrower agrees to pay on demand all costs and expenses incurred by
Lender 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 Lender's legal counsel, and all
costs and expenses incurred by Lender in connection with the enforcement
or preservation of any rights under the Agreement, as amended hereby, or
any other Loan Document, including without limitation the costs and fees
of Lender's legal counsel.
Section 4 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 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<PAGE>
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.
Executed as of the date first written above.
Borrower:
EL CHICO RESTAURANTS, INC.
By: /s/Lawrence E. White
--------------------------
Lawrence E. White
Executive Vice President and
Chief Financial Officer
By: /s/John A. Cuellar
--------------------------
John A. Cuellar
Senior Vice President and
General Counsel
Lender:
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
By: /s/ R. Britt Langford
--------------------------
R. Britt Langford
Senior Vice President
<PAGE>
Each of the undersigned Guarantors hereby consents and agrees to this
Amendment and agrees that its Guaranty shall remain in full force and effect
and shall continue to be the legal, valid and binding obligation of such
Guarantor enforceable against such Guarantor in accordance with its terms.
Guarantors:
EL CHICO CORPORATION OF
OKLAHOMA, INC.
By: /s/Susan R. Holland
--------------------------
Susan R. Holland
President
EL CHICO REALTY CORPORATION
By: /s/Lawrence E. White
--------------------------
Lawrence E. White
Vice President
SOUTHWEST CAFES OF TENNESSEE, INC.
By: /s/Susan R. Holland
--------------------------
Susan R. Holland
President
EL CHICO SERVICE COMPANY
By: /s/Susan R. Hollland
--------------------------
Susan R. Holland
Vice President
TEXAS EL CHICO RESTAURANTS, L.P.
By: EL CHICO SERVICE COMPANY
By: /s/Susan R. Holland
--------------------------
Susan R. Holland
Vice President
FILE: 2NDAMD
081794TCB1
147:T2408-16800-ELCH
THIRD AMENDMENT TO LOAN AGREEMENT
THIS THIRD AMENDMENT TO LOAN AGREEMENT (the "Amendment"), dated as
of December 21, 1994, is between EL CHICO RESTAURANTS, INC., a Texas
corporation ("Borrower"), and TEXAS COMMERCE BANK NATIONAL ASSOCIATION
(successor by merger to Texas Commerce Bank, National Association), a
national banking association ("Lender").
RECITALS:
A. Borrower and Lender have entered into that certain Loan
Agreement dated as of September 21, 1993, as amended by that certain
First Amendment to Loan Agreement dated as of January 20, 1994, and as
further amended that certain Second Amendment to Loan Agreement dated as
of August 18, 1994 (such Loan Agreement, as so amended, is hereinafter
referred to as the "Agreement").
B. Pursuant to the Agreement, El Chico Corporation of Oklahoma,
Inc., an Oklahoma corporation ("Oklahoma"), El Chico Realty Corporation,
a Texas corporation ("Realty"), Southwest Cafes of Tennessee, Inc., a
Tennessee corporation ("Tennessee"), El Chico Service Company, a Delaware
corporation ("Service"), Texas El Chico Restaurants, L.P., a Delaware
limited partnership (the "Partnership", and together with Oklahoma,
Realty, Tennessee and Service, collectively the "Guarantors" and each a
"Guarantor"), each executed a Guaranty Agreement (collectively, the
"Guaranties" and each a "Guaranty") which guaranteed to Lender the
payment and performance of the Obligations (as defined in the Agreement).
C. Borrower and Lender now desire to amend the Agreement as
herein set forth.
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 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
Amendments
Section 1 Amendment to "Applicable Committed Sum". Effective as
of the date hereof, the definition of "Applicable Committed Sum" is
amended to read in its entirety as follows:
"Applicable Committed Sum" means Fifteen Million and No/100
Dollars ($15,000,000.00), as such amount may be reduced pursuant
to Section 2.08.
Section 2 Amendment to Revolving Credit Note. Effective as of
the date hereof, Section 2.02 of the Agreement is hereby amended to read
in its entirety as follows:
Section 2.02. Revolving Credit Note. The obligation of the
Borrower to repay the Revolving Credit Loan shall be evidenced by
the Revolving Credit Note executed by the Borrower, payable to the
order of the Lender, in the principal amount of Fifteen Million and
No/100 Dollars ($15,000,000), and dated December 21, 1994.
Section 3 Amendment to Use of Proceeds. Effective as of the date
hereof, Section 2.06 of the Agreement is hereby amended by adding the
following subsection (d) to the end thereof, which shall read in its
entirety as follows:
, and (d) to repurchase shares of the Borrower's capital stock as
traded on the NASDAQ Stock Exchange, for an aggregate consideration
not to exceed Four Million and No/100 Dollars ($4,000,000.00).
Section 4 Amendment to Debt Covenant. Effective as of the date
hereof, subsection (a) of Section 10.01 of the Agreement is hereby
amended to read in its entirety as follows:
(a) Funded Debt to the Lender and other Obligations to the
Lender, including without limitation obligations of the Borrower
to the Lender under or in connection with any transactions or
arrangements involving interest rate swaps; and
Section 5 Amendment to Covenant Regarding Restricted Payments.
Effective as of the date hereof, Section 10.04 of the Agreement is hereby
amended by adding the following subsection (c) to the end of the second
sentence thereof, which provision shall read in its entirety as follows:
, and (c) purchase shares of its capital stock as traded on the
NASDAQ Stock Exchange, for an aggregate consideration not to exceed
Four Million and No/100 Dollars ($4,000,000.00).
Section 6 Amendment to Exhibits. Effective as of the date
hereof, Exhibit "A" to the Agreement is hereby amended to read in its
entirety as set forth on Annex I hereto.
ARTICLE III
Conditions Precedent
Section 1 Conditions. The effectiveness of this Amendment is
subject to the satisfaction of the following conditions precedent:
(a) Lender shall have received all of the following, each
dated (unless otherwise indicated) the date of this Amendment, in
form and substance satisfactory to Lender:
(i) Renewal Note. The Revolving Credit Note in
substantially the form of Annex I hereto (the "Renewal Note")
executed by the Borrower.
(ii) Corporate and Partnership Documentation. The
partnership and corporate documents and certificates
specified on Annex II hereto.
(b) Borrower shall have paid to Lender an additional
facility fee in the amount of $10,000;
(c) 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
(d) No Default shall have occurred and be continuing.
ARTICLE IV
Ratifications, Representations and Warranties
Section 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, each of the other Loan Documents, and the obligations,
indebtedness and liabilities of Borrower thereunder are ratified and
confirmed and shall continue in full force and effect. Borrower and
Lender agree that the Agreement as amended hereby, each of the other Loan
Documents, and the obligations, indebtedness and liabilities of Borrower
thereunder shall continue to be legal, valid, binding and enforceable in
accordance with its terms.
Section 2 Representations and Warranties. Borrower hereby
represents and warrants to Lender 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, and (iii) no
Default has occurred and is continuing.
ARTICLE V
Miscellaneous
Section 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 Lender or any closing
shall affect the representations and warranties or the right of Lender
to rely upon them.
Section 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 3 Expenses of Lender. As provided in the Agreement,
Borrower agrees to pay on demand all costs and expenses incurred by
Lender 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 Lender's legal counsel, and all
costs and expenses incurred by Lender in connection with the enforcement
or preservation of any rights under the Agreement, as amended hereby, or
any other Loan Document, including without limitation the costs and fees
of Lender's legal counsel.
Section 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 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 6 Successors and Assigns. This Amendment is binding upon
and shall inure to the benefit of Lender 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 Lender.
Section 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 8 Effect of Waiver. No consent or waiver, express or
implied, by Lender to or for any breach of or deviation from any
covenant, condition or duty by Borrower or 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 9 Headings. The headings, captions, and arrangements
used in this Amendment are for convenience only and shall not affect the
interpretation of this Amendment.
Section 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 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.
EXECUTED as of the date first written above.
Borrower:
EL CHICO RESTAURANTS, INC.
By: /s/Lawrence E. White
--------------------------
Lawrence E. White
Executive Vice President and
Chief Financial Officer
By: /s/John A. Cuellar
--------------------------
John A. Cuellar
Senior Vice President and
General Counsel
Lender:
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
By: /s/R. Britt Langford
--------------------------
R. Britt Langford
Senior Vice President
Each of the undersigned Guarantors hereby consents and agrees to this
Amendment and agrees that its Guaranty shall remain in full force and effect
and shall continue to be the legal, valid and binding obligation of such
Guarantor enforceable against such Guarantor in accordance with its terms.
Each of the undersigned Guarantors acknowledges and agrees that the
indebtedness guaranteed by such Guarantor pursuant to its Guaranty includes,
without limitation, the indebtedness evidenced by the Renewal Note.
Guarantors:
EL CHICO CORPORATION OF
OKLAHOMA, INC.
By: /s/Susan R. Holland
--------------------------
Susan R. Holland
President
EL CHICO REALTY CORPORATION
By: /s/Lawrence E. White
--------------------------
Lawrence E. White
Vice President
SOUTHWEST CAFES OF TENNESSEE, INC.
By: /s/Susan R. Holland
--------------------------
Susan R. Holland
President
EL CHICO SERVICE COMPANY
By: /s/Susan R. Holland
--------------------------
Susan R. Holland
Vice President
TEXAS EL CHICO RESTAURANTS, L.P.
By: EL CHICO SERVICE COMPANY
By: /s/Susan R. Holland
--------------------------
Susan R. Holland
Vice President
FILE: 3RDAMD
122194TCB1
378:T2408-16800-ELCH<PAGE>
ANNEX I
Renewal Note
<PAGE>
REVOLVING CREDIT NOTE
$15,000,000.00 Dallas, Texas December 21, 1994
FOR VALUE RECEIVED, the undersigned, EL CHICO RESTAURANTS, INC.,
a Texas corporation ("Maker"), hereby promises to pay to the order of
TEXAS COMMERCE BANK NATIONAL ASSOCIATION (successor by merger to Texas
Commerce Bank, National Association), a national banking association
("Payee"), at its offices at 2200 Ross Avenue, Post Office Box 660197,
Dallas, Texas 75266-0197, on December 31, 1996, in lawful money of the
United States of America, the principal sum of FIFTEEN MILLION AND NO/100
DOLLARS ($15,000,000.00), or so much thereof as may be advanced and
outstanding hereunder, together with interest on the outstanding
principal balance from day to day remaining, as herein specified.
This Note has been executed and delivered by Maker pursuant to the
terms of that certain Loan Agreement dated as of September 21, 1993,
between Maker and Payee, as amended by that certain First Amendment to
Loan Agreement dated as of January 20, 1994, as further amended by that
certain Second Amendment to Loan Agreement dated as of August 18, 1994,
and as further amended by that certain Third Amendment to Loan Agreement
of even date herewith (such Loan Agreement, as the same has been and may
be amended, supplemented or modified from time to time, the "Agreement"),
and is the Revolving Credit Note described therein. Capitalized terms
used and not otherwise defined herein shall have the same meanings as set
forth in the Agreement. Reference is hereby made to the Agreement for
provisions affecting this Note including, but not limited to, provisions
regarding interest rates, repayments, prepayments, Events of Default and
Payee's rights as a result of the occurrence thereof.
This Note is given in modification and renewal of, but not in
extinguishment of, the indebtedness evidenced by that certain Revolving
Credit Note dated September 21, 1993, executed by Maker and payable to
the order of the Bank in the principal amount of $9,000,000.00.
The outstanding principal balance hereof shall bear interest prior
to maturity at a varying rate per annum which shall from day to day be
equal to the lesser of (a) the Maximum Rate, or (b) the Applicable Rate,
each such change in the rate of interest charged hereunder to become
effective, without notice to Maker, on the effective date of each change
in the Applicable Rate or the Maximum Rate, as the case may be; provided,
however, if at any time the Applicable Rate shall exceed the Maximum
Rate, thereby causing the interest rate hereon to be limited to the
Maximum Rate, then any subsequent reduction in the Applicable Rate shall
not reduce the rate of interest hereon below the Maximum Rate until the
total amount of interest accrued hereon equals the amount of interest
which would have accrued hereon if the Applicable Rate had at all times
been in effect. Accrued and unpaid interest on the outstanding principal
balance hereof shall be due and payable as follows:
(i) in the case of Prime Rate Advances, on each Quarterly
Payment Date;
(ii) in the case of each Eurodollar Advance, on the last
day of the Interest Period with respect thereto and, in the case of an
Interest Period greater than three (3) months, at three-month intervals
after the first day of such Interest Period; and
(iii) on the Termination Date.
All past due principal and interest shall bear interest at the Default
Rate.
Interest on the indebtedness evidenced by this Note shall be computed
on the basis of a year of 360 days and the actual number of days elapsed
(including the first day but excluding the last day) unless such
calculation would result in a usurious rate, in which case interest shall
be calculated on the basis of a year of 365 or 366 days, as the case may
be.
Maker may prepay the principal of this Note upon the terms and
conditions specified in the Agreement. Maker may borrow, repay, and
reborrow hereunder upon the terms and conditions specified in the
Agreement.
Notwithstanding anything to the contrary contained herein, no
provisions of this Note shall require the payment or permit the
collection of interest in excess of the Maximum Rate. If any excess of
interest in such respect is herein provided for, or shall be adjudicated
to be so provided, in this Note or otherwise in connection with this loan
transaction, the provisions of this paragraph shall govern and prevail,
and neither Maker nor the sureties, guarantors, successors or assigns of
Maker shall be obligated to pay the excess amount of such interest, or
any other excess sum paid for the use, forbearance or detention of sums
loaned pursuant hereto. If for any reason interest in excess of the
Maximum Rate shall be deemed charged, required or permitted by any court
of competent jurisdiction, any such excess shall be applied as a payment
and reduction of the principal of indebtedness evidenced by this Note;
and, if the principal amount hereof has been paid in full, any remaining
excess shall forthwith be paid to Maker. In determining whether or not
the interest paid or payable exceeds the Maximum Rate, Maker and Payee
shall, to the extent permitted by applicable law, (i) characterize any
non-principal payment as an expense, fee, or premium rather than as
interest, (ii) exclude voluntary prepayments and the effects thereof, and
(iii) amortize, prorate, allocate, and spread in equal or unequal parts
the total amount of interest throughout the entire contemplated term of
the indebtedness evidenced by this Note so that the interest for the
entire term does not exceed the Maximum Rate.
Upon the occurrence of any Event of Default, the holder hereof may, at
its option, declare the entire unpaid principal of and accrued interest
on this Note immediately due and payable without notice (including,
without limitation, notice of acceleration and notice of intent to
accelerate), demand or presentment, all of which are hereby waived, and
upon such declaration, the same shall become and shall be immediately due
and payable. Failure of the holder hereof to exercise this option shall
not constitute a waiver of the right to exercise the same upon the
occurrence of a subsequent Event of Default.
If the holder hereof expends any effort in any attempt to enforce
payment of all or any part or installment of any sum due the holder
hereunder, or if this Note is placed in the hands of an attorney for
collection, or if it is collected through any legal proceedings, Maker
agrees to pay all reasonable costs, expenses, and fees incurred by the
holder, including reasonable attorneys' fees.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES
OF AMERICA. THIS NOTE IS PERFORMABLE IN DALLAS COUNTY, TEXAS.
Maker and each surety, guarantor, endorser, and other party ever liable
for payment of any sums of money payable on this Note jointly and
severally waive notice, presentment, demand for payment, protest, notice
of protest and non-payment or dishonor, notice of acceleration, notice
of intent to accelerate, notice of intent to demand, diligence in
collecting, grace, and all other formalities of any kind, and consent to
all extensions without notice for any period or periods of time and
partial payments, before or after maturity, all without prejudice to the
holder. The holder shall similarly have the right to deal in any way, at
any time, with one or more of the foregoing parties without notice to any
other party, and to grant any such party any extensions of time for
payment of any of said indebtedness, or to grant any other indulgences
or forbearances whatsoever, without notice to any other party and without
in any way affecting the personal liability of any party hereunder.
Maker hereby authorizes the holder hereof to endorse on the Schedule
attached to this Note or any continuation thereof the amount and type of
all Advances made to Maker hereunder and all continuations, conversions,
and payments of principal in respect of such Advances, which endorsements
shall be prima facie evidence as to the outstanding principal amount of
this Note; provided, however, any failure by the holder hereof to make
any endorsement shall not limit or otherwise affect the obligations of
Maker under the Agreement or this Note.
EL CHICO RESTAURANTS, INC.
By:/s/Lawrence E. White
--------------------------
Lawrence E. White
Executive Vice President
By:/s/John A. Cuellar
--------------------------
John A. Cuellar
Senior Vice President
<PAGE>
ANNEX II
Corporate and Partnership Documentation
1. Resolutions. Resolutions of the Board of Directors of the
Borrower and each Guarantor which is a corporation, certified by the
Secretary or an Assistant Secretary of such Person which authorize the
execution, delivery, and performance by such Person of this Amendment and
the other Loan Documents to which such Person is or is to be a party.
2. Incumbency Certificates. Certificates of incumbency
certified by the Secretary or an Assistant Secretary of the Borrower and
each Guarantor which is a corporation, certifying the names of the
officers of such Person authorized to sign this Amendment and each of the
other Loan Documents to which such Person is or is to be party (including
the certificates contemplated herein), together with specimen signatures
of such officers.
3. Articles of Incorporation. The Articles of Incorporation of
the Borrower and each Guarantor which is a corporation certified by the
Secretary of State of the state of incorporation of such Person and dated
within ten (10) days prior to the date of this Amendment.
4. Bylaws. The Bylaws of the Borrower and each Guarantor which
is a corporation certified by the Secretary or an Assistant Secretary of
such Person.
5. Governmental Certificates. Certificates of the appropriate
governmental officials of the respective states of incorporation of the
Borrower and each Guarantor which is a corporation, as to the existence
and good standing of such Person, and certificates of the appropriate
governmental officials of each state where Borrower or any Guarantor
which is a corporation owns properties, conducts business or employs any
Persons as to the qualification and good standing of such Person in such
jurisdiction, each dated within ten (10) days prior to the date of this
Amendment.
6. Partnership Agreement. A copy of the Agreement of Limited
Partnership of Texas El Chico Restaurants, L.P., certified by the
Secretary of El Chico Service Company.
7. Certificate of Limited Partnership. Certificate of Limited
Partnership, certified by the Secretary of State of the State of
Delaware.
8. Partnership Governmental Certificates. Certificate of the
Secretary of State of the State of Delaware as to the existence and good
standing of Texas El Chico Restaurants, L.P., and certificate of the
Secretary of State of the State of Texas as to the qualification of Texas
El Chico Restaurants, L.P. in the State of Texas.
FOURTH AMENDMENT TO LOAN AGREEMENT
THIS FOURTH AMENDMENT TO LOAN AGREEMENT (the "Amendment"), dated
as of February 15, 1996, is between EL CHICO RESTAURANTS, INC., a Texas
corporation ("Borrower"), and TEXAS COMMERCE BANK NATIONAL ASSOCIATION
(successor by merger to Texas Commerce Bank, National Association), a
national banking association ("Lender").
RECITALS:
A. Borrower and Lender have entered into that certain Loan
Agreement dated as of September 21, 1993, as amended by that certain
First Amendment to Loan Agreement dated as of January 20, 1994, as
further amended by that certain Second Amendment to Loan Agreement dated
as of August 18, 1994, and as further amended by that certain Third
Amendment to Loan Agreement dated as of December 21, 1994 (such Loan
Agreement, as so amended, is hereinafter referred to as the "Agreement").
B. Pursuant to the Agreement, El Chico Corporation of Oklahoma,
Inc., an Oklahoma corporation ("Oklahoma"), El Chico Realty Corporation,
a Texas corporation ("Realty"), Southwest Cafes of Tennessee, Inc., a
Tennessee corporation ("Tennessee"), El Chico Service Company, a Delaware
corporation ("Service"), Texas El Chico Restaurants, L.P., a Delaware
limited partnership (the "Partnership", and together with Oklahoma,
Realty, Tennessee and Service, collectively the "Guarantors" and each a
"Guarantor"), each executed a Guaranty Agreement (collectively, the
"Guaranties" and each a "Guaranty") which guaranteed to Lender the
payment and performance of the Obligations (as defined in the Agreement).
C. Borrower and Lender now desire to amend the Agreement as
herein set forth.
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 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
Amendments
Section 1 New Definition of Interest Rate Protection Agreement.
Effective as of the date hereof, Section 1.01 of the Agreement is hereby
amended to add the following definition of "Interest Rate Protection
Agreement", which shall read in its entirety as follows:
"Interest Rate Protection Agreement" means any interest rate
swap, interest rate cap, interest rate collar, or other interest
rate hedging agreement or arrangement designed to protect against
fluctuations in interest rates.
Section 2 Amendment to Dates. Effective as of the date hereof,
(a) the date "December 31, 1998" appearing in the definition of "Maturity
Date" set forth in Section 1.01 of the Agreement is hereby amended to
read "December 31, 1999", (b) the date "December 31, 1996" appearing in
the definition of "Revolver Termination Date" set forth in Section 1.01
of the Agreement is hereby amended to read "December 31, 1997", and (c)
the date "December 21, 1994" appearing in Section 2.02 of the Agreement
is hereby amended to read "February 15, 1996".
Section 3 Amendments to Use of Proceeds and Covenant Regarding
Restricted Stock. The Third Amendment to Loan Agreement amended
Sections 2.06 and 10.04 of the Agreement to allow the Borrower to
repurchase shares of the Borrower's capital stock as traded on the NASDAQ
Stock Exchange, for an aggregate consideration not to exceed $4,000,000.
The Borrower thereafter repurchased shares of such stock for an aggregate
consideration of less than $4,000,000. Effective as of the date hereof,
the remaining amount of such $4,000,000 is expired and is no longer
available for such purpose, and a new amount is established by this
Amendment for purchases by the Borrower of shares of its capital stock
from and after the date hereof. Accordingly, effective as of the date
hereof, Sections 2.06 and 10.04 of the Agreement are hereby amended as
follows:
(a) Subsection (d) of Section 2.06 is amended to read in
its entirety as follows:
(d) to repurchase shares of the Borrower's capital stock as
permitted by clauses (c) and (d) of the second sentence of
Section 10.04.
(b) Clause (c) of the second sentence of Section 10.04 is
deleted and replaced with clauses (c) and (d), which shall read in
their entirety as follows:
(c) repurchase shares of the Borrower's capital stock, as
traded on the NASDAQ Stock Exchange, during the period prior
to February 15, 1996, for an aggregate consideration not to
exceed $4,000,000, and (d) repurchase an additional number
of shares of the Borrower's capital stock, not to exceed ten
percent (10%) of the issued and outstanding shares of the
Borrower's capital stock as of December 31, 1995 as traded
on the NASDAQ Stock Exchange, during the period from and
including February 15, 1996 to and including February 15,
1997, for an aggregate consideration not to exceed
$6,000,000.
Section 4 Covenant Regarding Interest Rate Swap. Effective as
of the date hereof, Article IX of the Agreement is hereby amended to add
Section 9.11 to the end thereof, which Section 9.11 shall read in its
entirety as follows:
Section 9.11. Interest Rate Swap. On or before
September 30, 1996, the Borrower shall enter into an Interest Rate
Protection Agreement with respect to outstanding Advances under the
Revolving Credit Loan in a principal amount not less than
$5,000,000, which Interest Rate Protection Agreement shall have a
term expiring no earlier than the Maturity Date.
Section 5 Amendment to Debt Covenant. Effective as of the date
hereof, subsection (a) of Section 10.01 of the Agreement is hereby
amended to read in its entirety as follows:
(a) (i) Funded Debt to the Lender and other Obligations to
the Lender, including without limitation obligations of the
Borrower to the Lender under or in connection with any Interest
Rate Protection Agreement, and (ii) obligations of the Borrower to
any Person other than the Lender under or in connection with any
Interest Rate Protection Agreement; provided that the notional
amounts of all Interest Rate Protection Agreements of the Borrower
shall not exceed $10,000,000 in the aggregate;
Section 6 Amendment to Exhibits. Effective as of the date
hereof, Exhibit "A" to the Agreement is hereby amended to read in its
entirety as set forth on Annex I hereto.
ARTICLE III
Conditions Precedent
Section 1 Conditions. The effectiveness of this Amendment is
subject to the satisfaction of the following conditions precedent:
(a) Lender shall have received all of the following, each
dated (unless otherwise indicated) the date of this Amendment, in
form and substance satisfactory to Lender:
(i) Renewal Note. The Revolving Credit Note in
substantially the form of Annex I hereto (the "Renewal Note")
executed by the Borrower.
(ii) Corporate and Partnership Documentation. The
partnership and corporate documents and certificates
specified on Annex II hereto.
(b) Borrower shall have paid to Lender on or before the
date hereof an amendment fee in the amount of $10,000;
(c) 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
(d) No Default shall have occurred and be continuing.
ARTICLE IV
Ratifications, Representations and Warranties
Section 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, each of the other Loan Documents, and the obligations,
indebtedness and liabilities of Borrower thereunder are ratified and
confirmed and shall continue in full force and effect. Borrower and
Lender agree that the Agreement as amended hereby, each of the other Loan
Documents, and the obligations, indebtedness and liabilities of Borrower
thereunder shall continue to be legal, valid, binding and enforceable in
accordance with its terms.
Section 2 Representations and Warranties. Borrower hereby
represents and warrants to Lender 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 each Guarantor
and will not violate the articles of incorporation or bylaws of Borrower
or any Guarantor, (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, and (iii) no Default has occurred and is continuing.
<PAGE>
ARTICLE V
Miscellaneous
Section 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 Lender or any closing
shall affect the representations and warranties or the right of Lender
to rely upon them.
Section 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 3 Expenses of Lender. As provided in the Agreement,
Borrower agrees to pay on demand all costs and expenses incurred by
Lender 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 Lender's legal counsel, and all
costs and expenses incurred by Lender in connection with the enforcement
or preservation of any rights under the Agreement, as amended hereby, or
any other Loan Document, including without limitation the costs and fees
of Lender's legal counsel.
Section 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 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 6 Successors and Assigns. This Amendment is binding upon
and shall inure to the benefit of Lender 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 Lender.
Section 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 8 Effect of Waiver. No consent or waiver, express or
implied, by Lender to or for any breach of or deviation from any
covenant, condition or duty by Borrower or 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 9 Headings. The headings, captions, and arrangements
used in this Amendment are for convenience only and shall not affect the
interpretation of this Amendment.
Section 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 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.
EXECUTED as of the date first written above.
Borrower:
EL CHICO RESTAURANTS, INC.
By: /s/Lawrence E. White
--------------------------
Lawrence E. White
Executive Vice President and
Chief Financial Officer
By: /s/John A. Cuellar
--------------------------
John A. Cuellar
Senior Vice President and
General Counsel
Lender:
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
By: /s/R. Britt Langford
--------------------------
R. Britt Langford
Senior Vice President
By: /s/Douglas M. Barnell
--------------------------
Douglas M. Barnell
Assistant Vice President
Each of the undersigned Guarantors hereby consents and agrees to this
Amendment and agrees that its Guaranty shall remain in full force and effect
and shall continue to be the legal, valid and binding obligation of such
Guarantor enforceable against such Guarantor in accordance with its terms.
Each of the undersigned Guarantors acknowledges and agrees that the
indebtedness guaranteed by such Guarantor pursuant to its Guaranty includes,
without limitation, the indebtedness evidenced by the Renewal Note. Each of
the undersigned Guarantors represents and warrants to the Lender that the
representations and warranties set forth in Section 4.2 of this Amendment are
true and correct in all respects.
Guarantors:
EL CHICO CORPORATION OF
OKLAHOMA, INC.
By: /s/Susan R. Holland
--------------------------
Susan R. Holland
President
EL CHICO REALTY CORPORATION
By: /s/Lawrence E. White
--------------------------
Lawrence E. White
Vice President
SOUTHWEST CAFES OF TENNESSEE, INC.
By: /s/Susan R. Holland
--------------------------
Susan R. Holland
President
EL CHICO SERVICE COMPANY
By: /s/Susan R. Holland
--------------------------
Susan R. Holland
Vice President
TEXAS EL CHICO RESTAURANTS, L.P.
By: EL CHICO SERVICE COMPANY
By: /s/Susan R. Holland
--------------------------
Susan R. Holland
Vice President
FILE: 4THAMD
021596 v8
147:13312-67<PAGE>
ANNEX I
Renewal Note
<PAGE>
REVOLVING CREDIT NOTE
$15,000,000.00 Dallas, Texas February 15, 1996
FOR VALUE RECEIVED, the undersigned, EL CHICO RESTAURANTS, INC.,
a Texas corporation ("Maker"), hereby promises to pay to the order of
TEXAS COMMERCE BANK NATIONAL ASSOCIATION (successor by merger to Texas
Commerce Bank, National Association), a national banking association
("Payee"), at its offices at 2200 Ross Avenue, Post Office Box 660197,
Dallas, Texas 75266-0197, on December 31, 1997, in lawful money of the
United States of America, the principal sum of FIFTEEN MILLION AND NO/100
DOLLARS ($15,000,000.00), or so much thereof as may be advanced and
outstanding hereunder, together with interest on the outstanding
principal balance from day to day remaining, as herein specified.
This Note has been executed and delivered by Maker pursuant to the
terms of that certain Loan Agreement dated as of September 21, 1993,
between Maker and Payee, as amended by that certain First Amendment to
Loan Agreement dated as of January 20, 1994, as further amended by that
certain Second Amendment to Loan Agreement dated as of August 18, 1994,
as further amended by that certain Third Amendment to Loan Agreement
dated as of December 21, 1994, and as further amended by that certain
Fourth Amendment to Loan Agreement of even date herewith (such Loan
Agreement, as the same has been and may be amended, supplemented or
modified from time to time, the "Agreement"), and is the Revolving Credit
Note described therein. Capitalized terms used and not otherwise defined
herein shall have the same meanings as set forth in the Agreement.
Reference is hereby made to the Agreement for provisions affecting this
Note including, but not limited to, provisions regarding interest rates,
repayments, prepayments, Events of Default and Payee's rights as a result
of the occurrence thereof.
This Note is given in renewal, extension and modification of, but
not extinguishment of, the indebtedness evidenced by that certain
Revolving Credit Note dated December 21, 1994, executed by Maker and
payable to the order of Payee in the principal amount of $15,000,000.00,
which note was given in modification and renewal of, but not
extinguishment of, that certain Revolving Credit Note dated September 21,
1993, executed by Maker and payable to the order of Payee in the
principal amount of $9,000,000.00.
The outstanding principal balance hereof shall bear interest prior
to maturity at a varying rate per annum which shall from day to day be
equal to the lesser of (a) the Maximum Rate, or (b) the Applicable Rate,
each such change in the rate of interest charged hereunder to become
effective, without notice to Maker, on the effective date of each change
in the Applicable Rate or the Maximum Rate, as the case may be; provided,
however, if at any time the Applicable Rate shall exceed the Maximum
Rate, thereby causing the interest rate hereon to be limited to the
Maximum Rate, then any subsequent reduction in the Applicable Rate shall
not reduce the rate of interest hereon below the Maximum Rate until the
total amount of interest accrued hereon equals the amount of interest
which would have accrued hereon if the Applicable Rate had at all times
been in effect. Accrued and unpaid interest on the outstanding principal
balance hereof shall be due and payable as follows:
(i) in the case of Prime Rate Advances, on each Quarterly
Payment Date;
(ii) in the case of each Eurodollar Advance, on the last
day of the Interest Period with respect thereto and, in the case of an
Interest Period greater than three (3) months, at three-month intervals
after the first day of such Interest Period; and
(iii) on the Termination Date.
All past due principal and interest shall bear interest at the Default
Rate.
Interest on the indebtedness evidenced by this Note shall be computed
on the basis of a year of 360 days and the actual number of days elapsed
(including the first day but excluding the last day) unless such
calculation would result in a usurious rate, in which case interest shall
be calculated on the basis of a year of 365 or 366 days, as the case may
be.
Maker may prepay the principal of this Note upon the terms and
conditions specified in the Agreement. Maker may borrow, repay, and
reborrow hereunder upon the terms and conditions specified in the
Agreement.
Notwithstanding anything to the contrary contained herein, no
provisions of this Note shall require the payment or permit the
collection of interest in excess of the Maximum Rate. If any excess of
interest in such respect is herein provided for, or shall be adjudicated
to be so provided, in this Note or otherwise in connection with this loan
transaction, the provisions of this paragraph shall govern and prevail,
and neither Maker nor the sureties, guarantors, successors or assigns of
Maker shall be obligated to pay the excess amount of such interest, or
any other excess sum paid for the use, forbearance or detention of sums
loaned pursuant hereto. If for any reason interest in excess of the
Maximum Rate shall be deemed charged, required or permitted by any court
of competent jurisdiction, any such excess shall be applied as a payment
and reduction of the principal of indebtedness evidenced by this Note;
and, if the principal amount hereof has been paid in full, any remaining
excess shall forthwith be paid to Maker. In determining whether or not
the interest paid or payable exceeds the Maximum Rate, Maker and Payee
shall, to the extent permitted by applicable law, (i) characterize any
non-principal payment as an expense, fee, or premium rather than as
interest, (ii) exclude voluntary prepayments and the effects thereof, and
(iii) amortize, prorate, allocate, and spread in equal or unequal parts
the total amount of interest throughout the entire contemplated term of
the indebtedness evidenced by this Note so that the interest for the
entire term does not exceed the Maximum Rate.
Upon the occurrence of any Event of Default, the holder hereof may, at
its option, declare the entire unpaid principal of and accrued interest
on this Note immediately due and payable without notice (including,
without limitation, notice of acceleration and notice of intent to
accelerate), demand or presentment, all of which are hereby waived, and
upon such declaration, the same shall become and shall be immediately due
and payable. Failure of the holder hereof to exercise this option shall
not constitute a waiver of the right to exercise the same upon the
occurrence of a subsequent Event of Default.
If the holder hereof expends any effort in any attempt to enforce
payment of all or any part or installment of any sum due the holder
hereunder, or if this Note is placed in the hands of an attorney for
collection, or if it is collected through any legal proceedings, Maker
agrees to pay all reasonable costs, expenses, and fees incurred by the
holder, including reasonable attorneys' fees.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES
OF AMERICA. THIS NOTE IS PERFORMABLE IN DALLAS COUNTY, TEXAS.
Maker and each surety, guarantor, endorser, and other party ever liable
for payment of any sums of money payable on this Note jointly and
severally waive notice, presentment, demand for payment, protest, notice
of protest and non-payment or dishonor, notice of acceleration, notice
of intent to accelerate, notice of intent to demand, diligence in
collecting, grace, and all other formalities of any kind, and consent to
all extensions without notice for any period or periods of time and
partial payments, before or after maturity, all without prejudice to the
holder. The holder shall similarly have the right to deal in any way, at
any time, with one or more of the foregoing parties without notice to any
other party, and to grant any such party any extensions of time for
payment of any of said indebtedness, or to grant any other indulgences
or forbearances whatsoever, without notice to any other party and without
in any way affecting the personal liability of any party hereunder.
Maker hereby authorizes the holder hereof to endorse on the Schedule
attached to this Note or any continuation thereof or to record on its
books or electronic ledgers the amount and type of all Advances made to
Maker hereunder and all continuations, conversions, and payments of
principal in respect of such Advances, which endorsements or recordations
shall be prima facie evidence as to the outstanding principal amount of
this Note; provided, however, any failure by the holder hereof to make
any endorsement or recordation shall not limit or otherwise affect the
obligations of Maker under the Agreement or this Note.
EL CHICO RESTAURANTS, INC.
By:/s/Lawrence E. White
------------------------
Lawrence E. White
Executive Vice President
By:/s/John A. Cuellar
--------------------------
John A. Cuellar
Senior Vice President
<PAGE>
Schedule
Amount of
Date Made, Principal Unpaid
Continued, Continued, Principal
Converted, Amount of Converted, Balance
or Paid Type of Advance Advance or Paid of Note
---------- ---------------- ---------- ----------- ----------
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<PAGE>
ANNEX II
Corporate and Partnership Documentation
1. Resolutions. Resolutions of the Board of Directors of the
Borrower and each Guarantor which is a corporation, certified by the
Secretary or an Assistant Secretary of such Person which authorize the
execution, delivery, and performance by such Person of this Amendment and the
other Loan Documents to which such Person is or is to be a party.
2. Incumbency Certificates. Certificates of incumbency certified
by the Secretary or an Assistant Secretary of the Borrower and each Guarantor
which is a corporation, certifying the names of the officers of such Person
authorized to sign this Amendment and each of the other Loan Documents to
which such Person is or is to be party (including the certificates
contemplated herein), together with specimen signatures of such officers.
3. Articles of Incorporation. The Articles of Incorporation of the
Borrower and each Guarantor which is a corporation certified by the Secretary
or an Assistant Secretary of such Person.
4. Bylaws. The Bylaws of the Borrower and each Guarantor which is
a corporation certified by the Secretary or an Assistant Secretary of such
Person.
5. Governmental Certificates. Certificates of the appropriate
governmental officials of the respective states of incorporation of the
Borrower and each Guarantor which is a corporation, as to the existence and
good standing of such Person, and certificates of the appropriate
governmental officials of each state where Borrower or any Guarantor which
is a corporation owns properties, conducts business or employs any Persons
as to the qualification and good standing of such Person in such
jurisdiction, each dated within ten (10) days prior to the date of this
Amendment.
6. Partnership Agreement. A copy of the Agreement of Limited
Partnership of Texas El Chico Restaurants, L.P., certified by the Secretary
or an Assistant Secretary of El Chico Service Company.
7. Certificate of Limited Partnership. Certificate of Limited
Partnership of Texas El Chico Restaurants, L.P., certified by the Secretary
or an Assistant Secretary of El Chico Service Company.
8. Partnership Governmental Certificates. Certificate of the
Secretary of State of the State of Delaware as to the existence and good
standing of Texas El Chico Restaurants, L.P., and certificate of the
Secretary of State of the State of Texas as to the qualification of Texas El
Chico Restaurants, L.P. in the State of Texas.
FIFTH AMENDMENT TO LOAN AGREEMENT
THIS FIFTH AMENDMENT TO LOAN AGREEMENT (the "Amendment"), executed
on August 14, 1996, but effective as of June 30, 1996, is between EL
CHICO RESTAURANTS, INC., a Texas corporation ("Borrower"), and TEXAS
COMMERCE BANK NATIONAL ASSOCIATION (successor by merger to Texas Commerce
Bank, National Association), a national banking association ("Lender").
RECITALS:
A. Borrower and Lender have entered into that certain Loan
Agreement dated as of September 21, 1993, as amended by that certain
First Amendment to Loan Agreement dated as of January 20, 1994, as
further amended by that certain Second Amendment to Loan Agreement dated
as of August 18, 1994, as further amended by that certain Third Amendment
to Loan Agreement dated as of December 21, 1994, and as further amended
by that certain Fourth Amendment to Loan Agreement dated as of
February 15, 1996 (such Loan Agreement, as so amended, is hereinafter
referred to as the "Agreement").
B. Pursuant to the Agreement, El Chico Corporation of Oklahoma,
Inc., an Oklahoma corporation ("Oklahoma"), El Chico Realty Corporation,
a Texas corporation ("Realty"), Southwest Cafes of Tennessee, Inc., a
Tennessee corporation ("Tennessee"), El Chico Service Company, a Delaware
corporation ("Service"), Texas El Chico Restaurants, L.P., a Delaware
limited partnership (the "Partnership", and together with Oklahoma,
Realty, Tennessee and Service, collectively the "Guarantors" and each a
"Guarantor"), each executed a Guaranty Agreement (collectively, the
"Guaranties" and each a "Guaranty") which guaranteed to Lender the
payment and performance of the Obligations (as defined in the Agreement).
C. Borrower and Lender now desire to amend the Agreement as
herein set forth.
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 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
Amendments
Section 1 Amendment to Definition of Eurodollar Rate Margin.
Effective as of June 30, 1996, the definitions of "Eurodollar Rate
Margin" and "Prime Rate Margin" set forth in Section 1.01 of the
Agreement are hereby amended to read in their respective entireties as
follows:
"Eurodollar Rate Margin" means: (a) three-quarters of
one percent (.75%) at all times when the Coverage Ratio is
greater than 1.8 to 1.0, and (b) one and three-quarters of
one percent (1.75%) at all times when the Coverage Ratio is
less than or equal to 1.8 to 1.0; provided, however, that in
the event the Coverage Ratio for either or both of the
quarters ending September 30, 1996 or December 31, 1996 is
less than or equal to 1.8 to 1.0 but Net Income for the
two-quarter period ending December 31, 1996 is greater than
$2,500,000, the Eurodollar Rate Margin shall be three-quarters
of one percent (.75%) commencing on the date the
compliance certificates for the quarter ending December 31, 1996 are
delivered to Lender, as required by Section 9.01(c). Each change
in the Eurodollar Rate Margin shall be effective on the date the
relevant compliance certificate is delivered to Lender as required
by Section 9.01(c), provided that if any such compliance certificate
is not delivered to Lender by the date required by Section 9.01(c),
the Eurodollar Rate Margin shall be one and three-quarters of one
percent (1.75%) until Borrower delivers the required compliance
certificate to Lender.
"Prime Rate Margin" means: (a) zero percent (0%) at
all times when the Coverage Ratio is greater than 1.8 to 1.0,
and (b) one-half of one percent (.50%) at all times when the
Coverage Ratio is less than or equal to 1.8 to 1.0; provided,
however, that in the event the Coverage Ratio for either or
both of the quarters ending September 30, 1996 or
December 31, 1996 is less than or equal to 1.8 to 1.0 but Net
Income for the two quarter period ending December 31, 1996
is greater than $2,500,000, the Prime Rate Margin shall be
zero percent (0%) commencing on the date the compliance
certificates for the quarter ending December 31, 1996 are
delivered to Lender, as required by Section 9.01(c). Each
change in the Prime Rate Margin shall be effective on the
date the relevant compliance certificate is delivered to
Lender as required by Section 9.01(c), provided that if any
such compliance certificate is not delivered to Lender by the
date required by Section 9.01(c), the Prime Rate Margin shall
be one-half of one percent (.50%) until Borrower delivers the
required compliance certificate to Lender.
Section 2 New Definitions. Effective as of June 30, 1996,
Section 1.01 of the Agreement is hereby amended to add the following
definitions of "Net Income" and "Specified Quarters", which shall read
in their respective entireties as follows:
"Net Income" means net income of Borrower and the
Subsidiaries on a consolidated basis, determined in
accordance with GAAP, provided that for the quarter ended
June 30, 1996, Net Income shall be calculated without taking
into account the special charge for restructure or impairment
taken for that quarter.
"Specified Quarters" means Borrower's fiscal quarters
ending June 30, 1996, September 30, 1996, December 31, 1996
and March 31, 1997.
Section 3 Amendment to Section 11.02. Effective as of June 30,
1996, Section 11.02 of the Agreement is hereby amended to read in its
entirety as follows:
Section 11.02. Coverage Ratio; Minimum Net Income.
(a) The Borrower will at all times, except for
the Specified Quarters, maintain a Coverage Ratio of
not less than 1.5 to 1.0 for each twelve (12) month
period ending on the last day of a fiscal quarter of
Borrower.
(b) As of the end of each Specified Quarter,
Borrower will not permit the average amount of Net
Income for such Specified Quarter and the previous
Specified Quarters (if any) then ended to be less than
$795,000. The average amount of Net Income for each
Specified Quarter shall be calculated as follows: (a)
the sum obtained by adding together the Net Income for
each Specified Quarter then ended, divided by (b) the
number of Specified Quarters then ended.
Section 4 Amendment Regarding Compliance Certificate. Effective
as of June 30, 1996, subsection (c) of Section 9.01 of the Agreement is
hereby amended to add the following clause to the end thereof, which
clause shall read in its entirety as follows:
; and the Borrower shall also furnish to the Lender a
compliance certificate in the form of Exhibit "G-1" for each
of the Specified Quarters to demonstrate compliance with the
minimum Net Income requirement of Section 11.02, in addition
to the compliance certificate in the form of Exhibit "G" to
demonstrate compliance with the covenants addressed therein;
Section 5 Exhibit "G-1". Effective as of June 30, 1996, the
Agreement is hereby amended to add Exhibit "G-1" thereto, which shall
read in its entirety as set forth on Annex I hereto.
ARTICLE III
Conditions Precedent
Section 1 Conditions. The effectiveness of this Amendment is
subject to the satisfaction of the following conditions precedent:
(a) Borrower shall have paid to Lender on or before the
date hereof an amendment fee in the amount of $10,000;
(b) Borrower shall have delivered to Lender a certificate
of the chief executive officer, the chief financial officer or the
treasurer of the Borrower, in form and substance satisfactory to
Lender, showing in reasonable detail the calculations demonstrating
compliance with the covenant contained in Section 11.02 of the
Agreement, as amended hereby, for the Borrower's fiscal quarter
ending June 30, 1996.
(c) 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
(d) No Default shall have occurred and be continuing.
ARTICLE IV
Ratifications, Representations and Warranties
Section 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, each of the other Loan Documents, and the obligations,
indebtedness and liabilities of Borrower thereunder are ratified and
confirmed and shall continue in full force and effect. Borrower and
Lender agree that the Agreement as amended hereby, each of the other Loan
Documents, and the obligations, indebtedness and liabilities of Borrower
thereunder shall continue to be legal, valid, binding and enforceable in
accordance with its terms.
Section 2 Representations and Warranties. Borrower hereby
represents and warrants to Lender 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 each Guarantor
and will not violate the articles of incorporation or bylaws of Borrower
or any Guarantor, (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, and (iii) no Default has occurred and is continuing.
ARTICLE V
Miscellaneous
Section 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 Lender or any closing
shall affect the representations and warranties or the right of Lender
to rely upon them.
Section 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 3 Expenses of Lender. As provided in the Agreement,
Borrower agrees to pay on demand all costs and expenses incurred by
Lender 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 Lender's legal counsel, and all
costs and expenses incurred by Lender in connection with the enforcement
or preservation of any rights under the Agreement, as amended hereby, or
any other Loan Document, including without limitation the costs and fees
of Lender's legal counsel.
Section 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 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 6 Successors and Assigns. This Amendment is binding upon
and shall inure to the benefit of Lender 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 Lender.
Section 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 8 Effect of Waiver. No consent or waiver, express or
implied, by Lender to or for any breach of or deviation from any
covenant, condition or duty by Borrower or 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 9 Headings. The headings, captions, and arrangements
used in this Amendment are for convenience only and shall not affect the
interpretation of this Amendment.
Section 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 11 ENTIRE AGREEMENT. THIS AMENDMENT EMBODIES THE FINAL,
ENTIRE AGREEMENT AMONG THE PARTIES HERETO REGARDING THIS AMENDMENT AND
SUPERSEDES 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.
EXECUTED as of the date first written above.
Borrower:
EL CHICO RESTAURANTS, INC.
By: /s/Lawrence E. White
--------------------------
Lawrence E. White
Executive Vice President and
Chief Financial Officer
By: /s/John A. Cuellar
--------------------------
John A. Cuellar
Senior Vice President and
General Counsel
Lender:
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
By: /s/R. Britt Langford
--------------------------
R. Britt Langford
Senior Vice President
Each of the undersigned Guarantors hereby consents and agrees to this
Amendment and agrees that its Guaranty shall remain in full force and effect
and shall continue to be the legal, valid and binding obligation of such
Guarantor enforceable against such Guarantor in accordance with its terms.
Each of the undersigned Guarantors represents and warrants to the Lender that
the representations and warranties set forth in Section 4.2 of this Amendment
are true and correct in all respects.
Guarantors:
EL CHICO CORPORATION OF
OKLAHOMA, INC.
By: /s/Susan R. Holland
--------------------------
Name: Susan R. Holland
Title: President
EL CHICO REALTY CORPORATION
By: /s/Lawrence E. White
--------------------------
Name: Lawrence E. White
Title: Vice President
SOUTHWEST CAFES OF TENNESSEE, INC.
By: /s/Susan R. Holland
--------------------------
Name: Susan R. Holland
Title: President
EL CHICO SERVICE COMPANY
By: John A. Cuellar
--------------------------
Name: John A. Cuellar
Title: President
TEXAS EL CHICO RESTAURANTS, L.P.
By: EL CHICO SERVICE COMPANY
By: /s/John A. Cuellar
--------------------
Name: John A. Cuellar
Title: President
FILE: 5THAMD
081496 v8
147:13312-67
<PAGE>
ANNEX I
EXHIBIT "G-1"
Additional Compliance Certificate for Specified Quarters
<PAGE>
ADDITIONAL COMPLIANCE CERTIFICATE FOR SPECIFIED QUARTERS
TO: TEXAS COMMERCE BANK NATIONAL ASSOCIATION
2200 Ross Avenue
Post Office Box 660197
Dallas, Texas 75266-0197
Attention.: R. Britt Langford
Gentlemen:
The undersigned is the chief executive officer or the chief
financial officer of EL CHICO RESTAURANTS, INC., a Texas corporation (the
"Borrower"), and is authorized to make and deliver this certificate
pursuant to that certain Loan Agreement dated as of September 21, 1993,
between the Borrower and Texas Commerce Bank National Association
(successor by merger to Texas Commerce Bank, National Association), a
national banking association (the "Lender") (such Loan Agreement, as the
same has been or may be amended, supplemented or modified from time to
time, being hereinafter referred to as the "Loan Agreement"). All terms
defined in the Loan Agreement shall have the same meaning herein.
In connection with the foregoing and pursuant to the terms and
provisions of the Loan Agreement, the undersigned hereby certifies to the
Lender that the statements made herein are true and correct and that the
information set forth below is true and correct based upon the financial
statements delivered herewith as of the last day of the fiscal quarter
next preceding the date of this certificate:
(a) Net Income as of ____________, 19___ $___________
(b) Aggregate amount of Net Income for all Specified Quarters
previously ended . . . . . . . . . . $___________
(c) Sum of line (a) plus line (b). . . . $___________
(d) Line (c) divided by number of Specified Quarters ended
prior to the date hereof . . . . . . $___________
(e) Minimum average Net Income required by Section 11.02
of Loan Agreement. . . . . . . . . . . . $795,000
Attached hereto are additional calculations of the foregoing in
such detail as the Lender may require. The undersigned hereby certifies
that the above information and related calculations are true and correct
and not misleading as of the date hereof, and that no Default or Event
of Default has occurred and is continuing.
BORROWER:
EL CHICO RESTAURANTS, INC.
By: ________________________
Name:
Title:
Dated as of: _________________
