PAGE 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
__X__ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 28, 1995
_________________
OR
____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to _______________
Commission file number 1-10046
_______
TCBY ENTERPRISES, INC.
________________________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 71-0552115
________________________________________________________________
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
425 W. Capitol Avenue Little Rock, AR 72201
________________________________________________________________
(Address of principal executive offices) (Zip Code)
501/688-8229
____________________________________________________
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 of the Securities Exchange Act of 1934
during the preceding 12 months, (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to
such filing requirements for the past 90 days.
Yes _X_ No ___
On March 31, 1995 there were 25,595,139 shares of the registrant's common
stock outstanding.
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<TABLE>
TABLE OF CONTENTS
<CAPTION>
PART I. FINANCIAL INFORMATION Page
<S> <C> <C>
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets
February 28, 1995 and November 30, 1994 3
Consolidated Statements of Operations
Three months ended February 28, 1995
and February 28, 1994 5
Consolidated Statements of Cash Flows
Three months ended February 28, 1995
and February 28, 1994 6
Notes to Consolidated Financial Statements
February 28, 1995 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 16
SIGNATURES 17
</TABLE>
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<PAGE>
PART 1
FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS (UNAUDITED)
TCBY ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
February 28, November 30,
1995 1994
_________________________________
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 294,268 $ 4,938,118
Short-term investments 8,528,069 15,213,179
Receivables:
Trade accounts 17,953,657 15,805,358
Notes 2,062,699 2,120,932
Allowance for doubtful accounts
and notes (449,395) (383,515)
_____________ _____________
19,566,961 17,542,775
Refundable income taxes 2,311,965 1,501,663
Inventories 17,266,203 13,621,790
Distribution allowances 4,180,219 4,098,965
Prepaid expenses and other assets 2,368,269 2,051,808
_____________ _____________
TOTAL CURRENT ASSETS 54,515,954 58,968,298
PROPERTY, PLANT, AND EQUIPMENT
Land 4,225,248 4,225,248
Buildings 23,433,378 23,583,374
Furniture, vehicles, and equipment 55,998,012 55,172,254
Leasehold improvements 11,526,081 10,986,674
Construction in progress 5,593,589 3,089,350
Allowances for depreciation
and amortization (41,981,704) (40,213,323)
_____________ _____________
58,794,604 56,843,577
OTHER ASSETS
Notes receivable, less current portion
(less allowance for doubtful notes
1995 - $1,048,588; 1994 - $894,869) 7,819,309 8,358,703
Intangibles (less amortization
1995 - $3,472,705; 1994 - $3,317,663) 5,677,871 5,795,445
Distribution allowances, less current
portion 6,179,514 7,105,649
Other 4,890,800 5,208,415
_____________ _____________
24,567,494 26,468,212
_____________ _____________
TOTAL ASSETS $137,878,052 $142,280,087
============= =============
</TABLE>
See notes to consolidated financial statements.
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<PAGE>
TCBY ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
February 28, November 30,
1995 1994
____________ ____________
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 4,825,369 $ 2,890,869
Accrued expenses 4,115,501 5,742,510
Deferred income taxes payable 751,859 751,859
Current portion of long-term debt 3,160,558 3,072,756
____________ ____________
TOTAL CURRENT LIABILITIES 12,853,287 12,457,994
LONG-TERM DEBT, less current portion 15,209,508 15,909,857
DEFERRED INCOME TAXES 5,638,287 5,638,287
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, par value $.10 per share;
authorized 2,000,000 shares - -
Common stock, par value $.10 per share;
authorized 50,000,000 shares; issued
26,911,833 shares in 1995 and
26,911,333 shares in 1994 2,691,183 2,691,133
Additional paid-in capital 24,842,569 24,840,431
Retained earnings 86,054,417 90,153,584
_____________ _____________
113,588,169 117,685,148
Less treasury stock, at cost
(1,317,069 shares) (9,411,199) (9,411,199)
_____________ _____________
104,176,970 108,273,949
_____________ _____________
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $137,878,052 $142,280,087
============= =============
</TABLE>
See notes to consolidated financial statements.
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<PAGE>
TCBY ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
February 28,
1995 1994
________________________________
<S> <C> <C>
Sales $ 26,036,075 $ 22,587,248
Cost of Sales 15,826,334 13,336,265
_____________ _____________
GROSS PROFIT 10,209,741 9,250,983
Franchising revenues:
Initial franchise and license fees 195,900 107,812
Royalty income 1,720,784 1,563,523
_____________ _____________
Total franchising revenues 1,916,684 1,671,335
_____________ _____________
12,126,425 10,922,318
Selling, general, and administrative
expenses 16,465,479 12,035,886
_____________ _____________
(4,339,054) (1,113,568)
Interest expense (298,451) (162,830)
Interest income 274,440 288,207
Other income 25,444 35,615
_____________ _____________
1,433 160,992
_____________ _____________
LOSS BEFORE INCOME TAX BENEFIT (4,337,621) (952,576)
Income tax benefit (1,518,167) (331,209)
_____________ _____________
NET LOSS $ (2,819,454) $ (621,367)
============= =============
NET LOSS PER SHARE $ (0.11) $ (0.02)
============= =============
Average shares outstanding 25,595,638 25,489,439
============= =============
Cash dividends paid per share $ 0.05 $ 0.05
============= =============
</TABLE>
See notes to consolidated financial statements.
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<PAGE>
TCBY ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
February 28,
1995 1994
________________________________
<S> <C> <C>
OPERATING ACTIVITIES
Net loss $ (2,819,454) $ (621,367)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 2,981,444 1,910,653
Amortization of intangibles 155,042 156,053
Provision for doubtful accounts and notes 210,079 205,497
Gain on disposal of property and
equipment (1,354) (153,400)
Changes in operating assets and liabilities:
Accounts receivable (2,294,022) (2,940,552)
Inventories (3,644,413) (1,912,002)
Prepaid expenses (316,461) 85,300
Distribution allowances (175,860) (1,575,238)
Intangibles and other assets 218,243 809,534
Accounts payable and accrued expenses 307,491 11,847
Income taxes (810,302) (588,136)
_____________ _____________
NET CASH USED IN OPERATING
ACTIVITIES (6,189,567) (4,611,811)
INVESTING ACTIVITIES
Purchases of property, plant, and equipment (3,877,561) (2,722,498)
Proceeds from sale of property and equipment 89,089 346,799
Origination of notes receivable (92,539) (806,500)
Principal collected on notes receivable 631,690 727,572
Purchases of short-term investments (92,112) (1,695,732)
Proceeds from sale of short-term investments 6,777,222 1,486,410
_____________ _____________
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES 3,435,789 (2,663,949)
FINANCING ACTIVITIES
Proceeds from sale of common stock 2,188 16,155
Dividends paid (1,279,713) (1,274,366)
Principal payments of long-term debt (612,547) (524,243)
_____________ _____________
NET CASH USED IN FINANCING ACTIVITIES (1,890,072) (1,782,454)
_____________ _____________
Decrease in cash and cash equivalents (4,643,850) (9,058,214)
Cash and cash equivalents at beginning
of period 4,938,118 10,167,074
_____________ _____________
CASH AND CASH EQUIVALENTS AT END
OF PERIOD $ 294,268 $ 1,108,860
============== =============
</TABLE>
See notes to consolidated financial statements.
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PAGE 7
TCBY ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FEBRUARY 28, 1995
NOTE A -- FINANCIAL STATEMENT PRESENTATION
The notes to the consolidated financial statements do not include all notes
which would be included in the annual report to stockholders and reference
to the footnotes contained in the annual report to stockholders for the
year ended November 30, 1994, will give additional information on such
items as significant accounting policies, long-term debt, income taxes,
lease commitments, contingencies and employee benefit plans. However, in
the opinion of management, all footnotes have been included for disclosures
required for compliance with the Securities and Exchange Commission rules,
as contained in Accounting Series R elease No. 177. Also in the opinion of
management, all adjustments (consisting of normal recurring accruals) which
are necessary for a fair statement of the results for the interim periods
have been included.
NOTE B -- INVENTORIES
<TABLE>
<CAPTION>
February 28, November 30,
1995 1994
___________ ____________
<S> <C> <C>
Manufacturing materials and
supplies $ 5,874,133 $ 4,417,832
Finished yogurt products and
other food products 5,466,908 4,162,242
Equipment and other products 5,925,162 5,041,716
___________ ___________
$17,266,203 $13,621,790
=========== ===========
</TABLE>
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PAGE 8
NOTE C -- ACCRUED EXPENSES
Accrued expenses consist of the following:
<TABLE>
<CAPTION>
February 28, November 30,
1995 1994
___________ ___________
<S> <C> <C>
Rent $ 741,123 $ 799,979
Compensation 1,882,687 2,411,903
Other 1,491,691 2,530,628
___________ ___________
$ 4,115,501 $ 5,742,510
=========== ===========
</TABLE>
NOTE D -- CONTINGENCIES
A purported investor in a former franchisee has claimed approximately $26
million in trebled damages plus costs and prejudgment interest from the
former franchisee for alleged fraudulent acts. The compensatory damages
requested are $8.7 million. The Company has also been named in this suit
as a defendant. The Company believes the plaintiff's claims against the
Company to be without merit, and the Company is vigorously contesting the
suit.
Other than as set forth above, there is no material litigation pending
against the Company. Various legal and administrative proceedings are
pending against the Company which are incidental to the business of the
Company. The ultimate legal and financial liability of the C ompany in
connection with such proceedings and that discussed above cannot be
estimated with certainty, but the Company believes, based upon its
examination of these matters, its experience to date, and its discussions
with legal counsel, that resolution of these proceedings will have no
material adverse effect upon the Company's financial condition, either
individually or in the aggregate; of course, any substantial loss pursuant
to any litigation might have a material adverse impact upon results of
operations in the fiscal quarter or year in which it were to be incurred,
but the Company cannot estimate the range of any reasonably possible loss.
NOTE E -- SUBSEQUENT EVENT
In April 1995, the Company sold the rights for the exclusive manufacturing
and distribution of the "TCBY" refrigerated yogurt product line throughout
the United States to Mid-America Dairymen, Inc., who co-packed the products
for the Company. The product line currently consists of low fat and
nonfat/no sugar added varieties of refrigerated yogurt, and the "TCBY"
Twosome product - refrigerated yogurt and topping, side-by-side. TCBY
sales of these products were approximately $23 million and $5.3 million for
fiscal 1994 and the first quarter of fiscal 1995, respectively.
Under the terms of the 15 year agreement, Mid-America Dairymen plans to
expand the distribution of these products, as well as develop additional
refrigerated dairy items under the "TCBY" brand. Mid-America currently
manufactures and distributes over 2,000 products nationwide. TCBY will
continue to manufacture and distribute "TCBY" brand hardpack frozen yogurt
products through the retail grocery trade.
The sale of the product line is expected to generate a pre-tax gain of
approximately $2.3 million, or $.06 per share net of taxes, for TCBY in its
second quarter.
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ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company's total sales for the first quarter of fiscal 1995 increased 15
percent from sales in the first quarter of fiscal 1994. The Company's
operations were primarily in two segments: food products and equipment.
The following table sets forth sales by category within the Company's
primary segments of operation (dollars in thousands):
<TABLE>
<CAPTION>
1st Quarter 1st Quarter
1995 1994
____________________
____________________
Sales % Sales %
________ ____ ________
____
<S> <C> <C> <C>
<C>
Food Products:
______________
Yogurt sales to Martin-
Brower and other food
service distributors $ 9,705 37% $ 8,459
37%
Yogurt sales to the retail
grocery trade 8,713 33% 6,448
29%
Retail sales by Company-
owned stores 3,640 14% 4,087
18%
________ ____ ________
____
22,058 84% 18,994
84%
Equipment:
__________
Sales by equipment
distributor 2,556 10% 2,939
13%
Sales of manufactured
specialty vehicles 1,186 5% 444
2%
________ ____ ________
____
3,742 15% 3,383
15%
Other 236 1% 210
1%
________ ____ ________
____
Total Sales $ 26,036 100% $ 22,587
100%
======== ==== ========
====
</TABLE>
Sales from the Company's food products segment include (i) wholesale sales
of frozen yogurt products to the Martin-Brower Company, which distributes
yogurt and other products primarily to "TCBY" stores, and to other
foodservice distributors, which distribute to non-traditional locations
such as airports, on-premises business cafeterias, hospitals, sporting
arenas, toll road plazas, etc., (ii) sales of hardpack frozen yogurt,
refrigerated yogurt, and frozen novelties for distribution to the retail
grocery trade, and (iii) retail sales of yogurt and related food items by
Company-owned stores. Sales in the food products segment increased from
$19.0 million in the first quarter of fiscal 1994 to $22.1 million during
the first quarter of 1995. The food products segment represented 84
percent of the Company's total sales during the first quarter of fiscal
1995 and fiscal 1994.
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PAGE 10
Within the food products segment, wholesale sales of frozen yogurt
increased 15 percent during the first quarter of fiscal 1995 as compared to
the first quarter of fiscal 1994. This increase is due to a greater number
of non-traditional locations operating during the first quarter of fiscal
1995 compared to the same period in fiscal 1994 and improved same store
sales, and was partially offset by a reduction in the number of domestic
traditional "TCBY" stores (Company-owned and franchised stores) in
operation. The Company expects a continuation of growth in the number of
non-traditional locations during the remainder of fiscal 1995.
The following table sets forth location activity for the first quarter of
fiscal 1995 and 1994.
<TABLE>
<CAPTION>
NON-
FRANCHISED COMPANY INTERNATIONAL
TRADITIONAL TOTAL
STORES STORES LOCATIONS
LOCATIONS LOCATIONS
1995 1994 1995 1994 1995 1994 1995
1994 1995 1994
__________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C>
<C> <C> <C>
For the first three months:
Locations open at
beginning of period 1,245 1,298 96 121 141 66 1,319
989 2,801 2,474
Opened 10 5 0 0 10 6 46
83 66 94
Closed (16) (31) (8) (1) 0 0
(35) (38) (59) (70)
Net locations purchased
(sold) between fran-
chisees and Company - 1 - (1) - - -
- - -
___________________________________________________________________
Locations open at
February 28 1,239 1,273 88 119 151 72 1,330
1,034 2,808 2,498
====================================================================
</TABLE>
Included in the franchised and Company store information are 163 and 175
"TCBY" stores closed for relocation or for the season on February 28, 1995
and 1994, respectively.
Sales of yogurt to the retail grocery trade increased 35 percent during the
first quarter of fiscal 1995 as compared to the first quarter of fiscal
1994. This increase is a result of expanded geographic distribution of
both hardpack frozen yogurt and refrigerated yogurt products. In April
1995, the Company sold the rights for exclusive manufacturing and
distribution of the "TCBY" refrigerated yogurt products throughout the
United States to Mid-America Dairymen, Inc., who co-packed the products for
the Company. The sale closed in the second quarter of 1995 with a pre-tax
gain of approximately $2.3 million. As the Company's sales of refrigerated
yogurt products totaled approximately $23.0 million in fiscal 1994 and $5.3
million in the first quarter of fiscal 1995, the sale of this business will
result in lower sales for the Company to the retail grocery trade.
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PAGE 11
Sales by Company-owned stores declined 11 percent during the first quarter
of fiscal 1995 as compared to the first quarter of fiscal 1994. This
decline results primarily from a reduction of Company-owned stores operated
during the first quarter of fiscal 1995 compared to the first quarter of
fiscal 1994. The Company currently operates 88 units and expects to remain
near this level throughout 1995. However, the Company will continue to
evaluate opportunities to refranchise stores or close stores when
necessary.
Sales in the Company's equipment segment which, represented 15 percent of
the Company's total sales during the first quarter of fiscal 1995 and
fiscal 1994, include (i) sales from the distribution of equipment to the
foodservice industry and (ii) sales of manufactured mobile kitchens and
other specialty vehicles primarily to businesses and governments. Sales in
the equipment segment increased 11 percent during the first quarter of
fiscal 1995 over the same period in the prior year from $3.4 million in
fiscal 1994 to $3.7 million during fiscal 1995. The increase in sales by
the Company's equipment manufacturer is primarily due to increased orders
for specialty vehicles. This increase was partially offset by a decrease
in sales by the Company's equipment distributor due to fewer sales of
equipment packages to international franchisees in the first quarter of
fiscal 1995 compared to the same period in fiscal 1994.
Same store sales (the comparison of fiscal 1995 individual domestic
traditional "TCBY" store sales with sales by the same stores operating
during the same period of fiscal 1994) increased 6.4 percent in the first
quarter of fiscal 1995 from the first quarter of fiscal 1994. The
improvement in same store sales for the quarter reflects the Company's
continuing efforts to increase sales through national and local
advertising, menu extensions, store decor upgrades, and relocations. The
restaurant industry continues to be highly competitive. Even with the
continuation of these programs and implementation of similar programs, same
store sales may decline and store closings may continue.
The ratio of cost of sales to sales was 61 percent for the first quarter of
fiscal 1995 as compared to 59 percent for the first quarter of fiscal 1994.
The ratio of cost of sales to sales for the food products segment and
equipment segment in the first quarter of fiscal 1995 was 59 percent and 77
percent, respectively, compared to 57 percent and 76 percent, respectively,
in the first quarter of fiscal 1994.
The increase in the overall cost of sales to sales ratio is attributed
primarily to a change in sales mix. Retail sales through Company-owned
stores declined while wholesale sales to the retail grocery trade and
private label customers, which have a higher cost of sales to sales ratio,
increased. A major component of the Company's cost of sales of food
products is milk. Milk pricing is regulated by the USDA which sets pricing
on a monthly basis. Milk prices declined during the first quarter of 1995
but have increased in the second quarter to price levels consistent with
those at November 30, 1994. The Company in the past has not adjusted its
selling price to reflect fluctuations in milk prices. In addition, the
Company has experienced increases in other components of cost of sales,
such as product packaging costs. As a result of these increased product
packaging costs, the Company has announced a price increase of
approximately one percent, which is effective April 15, 1995. The cost of
sales to sales ratio for the equipment segment decreased due to an increase
in sales of equipment with higher gross profit margins.
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PAGE 12
Franchising revenues consist of initial franchise and license fees and
royalty income. In the first quarter of fiscal 1995, initial franchise and
license fees increased 82 percent while royalty income increased 10 percent
from the same period in fiscal 1994. This increase in franchise and
license fees results primarily from domestic franchising activity. The
increase in royalty income results from international franchise activity
and a higher number of non-traditional locations.
Selling, general, and administrative (SG&A) expenses in creased 37 percent
in the first quarter of fiscal 1995 compared to the same period in fiscal
1994. This increase is due primarily to an increase in expenses (e.g.,
hiring of additional salespersons and administrative staff and higher
selling costs, such as consumer marketing expenses, trade allowances,
distribution allowances, and brokerage fees) associated with the sales
growth and increased distribution of yogurt products within the retail
grocery trade. As a result of the sale of the "TCBY" refrigerated yogurt
business to Mid-America Dairymen, Inc., the Company will no longer incur
the promotional costs and distribution allowances of these product lines.
The Company will continue to manufacture and distribute "TCBY"R brand
hardpack frozen yogurt products through the retail grocery trade, and will
continue to incur expenses associated with the sales growth and increased
distribution of these products. As the retail grocery trade continues to
be very competitive, annual SG&A expenses as a percentage of combined sales
and franchising revenues may remain at the current level. Increases in
SG&A expenses were partially offset by a reduction in the number of
Company-owned stores operating during fiscal 1995 (see location activity
schedule above) which results in a decrease in the amount of total
operating expenses within Company-owned stores. As a percentage of
combined sales and franchising revenues, SG&A expenses were 59 percent and
50 percent for the first quarter of fiscal 1995 and 1994, respectively.
Interest expense increased approximately $136,000 in the first quarter of
fiscal 1995 compared to the first quarter of fiscal 1994. This increase is
due to an additional borrowing in November 1994 related primarily to the
expansion of the Company's yogurt manufacturing facility and an increase in
the average interest rate paid.
Interest income decreased approximately $14,000 for the first quarter of
fiscal 1995 compared to the same period of fiscal 1994. The decrease is
due to reductions in the outstanding balances which were partially offset
by increases in the yields on interest earning assets.
Income taxes as a percentage of income (loss) before income taxes were 35.0
percent in the first quarter of fiscal 1995. This compares to an effective
rate of 33.3 percent recorded for
Sequential Page No. 12
<PAGE>
PAGE 13
the fiscal year ended November 30, 1994. The change in the effective tax
rate is primarily due to a higher expected tax rate in fiscal 1995.
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically generated cash from operations sufficient to
meet its normal op erating requirements. However, the Company normally
experiences a decrease in cash and cash equivalents in the first quarter as
a result of the seasonality of the Company's business. The Company's cash
and short-term investments decreased approximately $11.3 million in the
first quarter of fiscal 1995. This decrease resulted primarily from (i)
the net loss for the first quarter of fiscal 1995, (ii) an
increase in trade accounts receivable, other assets, and inventories
primarily attributed to the normal increase in these accounts in the first
quarter along with expansion into the private label and retail grocery
trade markets, (iii) purchases of property, plant and equipment, and (iv) a
cash dividend of five cents per share or $1.3 million paid in January 1995.
The Company's foreseeable cash needs for operations and capital
expenditures will continue to be met through cash flows from operations;
however, the Company has available with an existing lender, on an unsecured
basis, a $5 million credit line to meet seasonal cash needs.
On February 28, 1995, working capital was $41.7 million compared to $46.5
million on November 30, 1994. The current ratio was 4.2 to 1.0 on February
28, 1995 and 4.7 to 1.0 on November 30, 1994. The long-term debt to equity
ratio was .15 to 1.0 at February 28, 1995 and November 30, 1994. The
Company has a tangible net worth of $98.5 million at February 28, 1995.
On March 15, 1995, the Company's Board of Directors declared a five cents
per share dividend payable on April 7, 1995 to the stockholders of record
on March 27, 1995. The Company will consider adjustments to the dividend
rate after giving consideration to return to stockholders, profitability
expectations and financing needs.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There were no changes from previously reported litigation.
ITEM 5. OTHER INFORMATION
In April 1995, the Company sold the rights for the exclusive manufacturing
and distribution of the "TCBY" refrigerated yogurt product line throughout
the United States to Mid-America Dairymen Inc., who co-packed the products
for the Company. The sale is expected to result in a $2.3 million pre-tax
gain. The "TCBY" refrigerated yogurt lines consist of nonfat/no-sugar
added and low fat varieties of "TCBY" traditional style yogurt products and
the Twosome refrigerated products.
Sequential Page No. 13
<PAGE>
PAGE 14
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>
a) Exhibits
<S> <C>
4(ii) (a) Second Amended and Restated Loan Agreement
between TCBY Enterprises, Inc. and Bank One,
Texas, N.A., dated April 7, 1995 to include a
$5,000,000 revolving credit note dated April 7,
1995
27 Article 5, Financial Data Schedule for the First
Quarter Fiscal 1995 10-Q
99(a) Press release, dated March 15, 1995,
"TCBY Declares Cash Dividend"
99(b) Press release, dated March 20, 1995, "Mid-America
Dairymen to Purchase Rights to "TCBY" Traditional
Style Yogurt"
99(c) Press release, dated March 20, 1995, "TCBY
Reports Operating Results for the First Quarter"
99(d) Purchase and Sale with Continuing Trademark
License Agreement with Repurchase Rights by and
between TCBY Systems, Inc. and Mid-America
Dairymen, Inc. dated March 15, 1995.
b) The Company did not file any reports on Form 8-K
during the three months ended February 28, 1994,
but did on March 24, 1995, in relation to the
Mid-America Dairymen transaction.
</TABLE>
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<PAGE>
PAGE 15
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.
TCBY ENTERPRISES, INC.
Date: 04/10/95 /s/ Frank D. Hickingbotham
__________________________
Frank D. Hickingbotham,
Chairman of the Board and
Chief Executive Officer
Date: 04/10/95 /s/ Gale Law
__________________________
Gale Law,
Senior Vice President,
Chief Financial Officer
Sequential Page No. 15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF FEBRUARY 28, 1995 AND THE CONSOLIDATED
STATEMENT OF INCOME FOR THE QUARTER ENDED FEBRUARY 28, 1995 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-END> FEB-28-1995
<CASH> 294,268
<SECURITIES> 8,528,069
<RECEIVABLES> 20,016,356
<ALLOWANCES> 449,395
<INVENTORY> 17,266,203
<CURRENT-ASSETS> 54,515,954
<PP&E> 100,776,308
<DEPRECIATION> 41,981,704
<TOTAL-ASSETS> 137,878,052
<CURRENT-LIABILITIES> 12,853,287
<BONDS> 15,209,508
<COMMON> 2,691,183
0
0
<OTHER-SE> 101,485,787
<TOTAL-LIABILITY-AND-EQUITY> 137,878,052
<SALES> 26,036,075
<TOTAL-REVENUES> 27,952,759
<CGS> 15,826,334
<TOTAL-COSTS> 15,826,334
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 298,451
<INCOME-PRETAX> (4,337,621)
<INCOME-TAX> (1,518,167)
<INCOME-CONTINUING> (2,819,454)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,819,454)
<EPS-PRIMARY> (.11)
<EPS-DILUTED> (.11)
</TABLE>
EXHIBIT 99(a)
PRESS RELEASE
FOR IMMEDIATE RELEASE
WEDNESDAY
MARCH 15, 1995
CONTACT PERSON: STACY DUCKETT
DIRECTOR, CORPORATE COMMUNICATIONS
(50) 688-8229
TCBY DECLARES CASH DIVIDEND
LITTLE ROCK, AR - March 15, 1995 - TCBY ENTERPRISES, INC. (NYSE:TBY)
today announced the Board of Directors of the Company declared a $.05 per
share cash dividend. This dividend is payable on April 7, 1995 to
shareholders of record as of March 27, 1995.
TCBY Enterprises, Inc., through subsidiary companies, manufactures and
sells soft serve frozen yogurt, hardpack frozen yogurt, novelty products
and custom foodservice vehicles, and markets refrigerated yogurt and
foodservice equipment. The Company is the largest franchisor, licensor
and operator of frozen yogurt stores in the world.
-30-
EXHIBIT 99(b)
PRESS RELEASE
FOR IMMEDIATE RELEASE
MONDAY
MARCH 20, 1995
CONTACT PERSON: STACY DUCKETT
CORPORATE COMMUNICATIONS
501-688-8229
MID-AMERICA DAIRYMEN TO PURCHASE RIGHTS
TO "TCBY" TRADITIONAL STYLE YOGURT
LITTLE ROCK, AR - Monday, March 20 - TCBY ENTERPRISES, INC., (NYSE:TBY)
TCBY Systems, Inc., a subsidiary of TCBY Enterprises, Inc., and
Mid-America Dairymen Inc. announced today they have entered into an
agreement whereby Mid-America Dairymen Inc. has acquired the rights for
the exclusive manufacturing and distribution of the "TCBY" refrigerated
yogurt products division throughout the United States. The terms of the
agreement were not disclosed.
The "TCBY" refrigerated yogurt products consist of nonfat/no-sugar added
and low fat v arieties of "TCBY" Traditional Style Yogurt and the new
"TCBY" Twosome refrigerated yogurt with a variety of toppings on the
side. The "TCBY" Traditional Style Yogurt products have been
manufactured by Mid-America Dairymen since these products were introduced
into the market in 1991.
Estimated retail sales of the "TCBY" Traditional Style Yogurt products
approximated $35 million in 1994. Frank D. Hickingbotham, Chairman of
the Board and Chief Executive Officer of TCBY Enterprises, Inc., stated,
"We are pleased to enter into this new strategic alliance with
Mid-America Dairymen that will allow for the continuing placement and
development of the "TCBY" brand in the refrigerated yogurt category of
the retail grocery trade." Gary Hanman, Chief Executive Officer of
Mid-America Dairymen Inc., stated, "We are excited to produce a high
quality product under the "TCBY"R brand and look forward to the
opportunity to expand the marketing and distribution of the "TCBY"
Traditional Style Yogurt products."
TCBY Enterprises will continue to manufacture and distribute "TCBY" brand
hardpack frozen yogurt products through the retail grocery trade.
Recently the Company announced a major expansion at its manufacturing
facility located in Dallas, Texas to accommodate the expected growth in
this division.
<PAGE>
TCBY Enterprises, Inc., through subsidiary companies, manufactures and
sells soft serve frozen yogurt, hardpack frozen yogurt, novelty products,
custom foodservice vehicles, and markets foodservice equipment. TCBY is
the largest franchisor, licensor and operator of frozen yogurt stores in
the world.
Mid-America Dairymen Inc. is the nation's largest dairy marketing
cooperative, with almost 18,000 dairy farm family members in 30 states.
Last year Mid-America Dairymen had sales of more than $2.5 billion.
-30-
EXHIBIT 99(c)
PRESS RELEASE
FOR IMMEDIATE RELEASE
MONDAY
MARCH 20, 1995
CONTACT PERSON: STACY DUCKETT, DIRECTOR
CORPORATE COMMUNICATIONS
(501) 688-8229
TCBY REPORTS OPERATING RESULTS FOR THE FIRST QUARTER
LITTLE ROCK, AR - March 20, 1995 - TCBY Enterprises, Inc., (NYSE:TBY)
announced sales and franchising revenues for the first quarter ended
February 28, 1995, increased 15% to $27,952,759 compared to $24,258,583
in the first quarter of 1994. The increase in sales and franchising
revenues is attributed to increased sales to the retail grocery trade.
Operations resulted in a net loss of $2,819,454 or $.11 per share in the
first quarter of fiscal 1995, as compared to a loss of $621,367, or $.02
per share in the first quarter of 1994. The decline i n earnings in the
first quarter of fiscal 1995 compared to the first quarter of fiscal 1994
results primarily from increased selling, general, and administrative
expenses, which includes marketing and promotional expenses associated
with the increased sales made to the retail grocery trade. A significant
portion of these increased expenses related to increased marketing costs
attributable to the Company's refrigerated yogurt line. These marketing
and promotional expenditures resulted in improved sales, market share,
and product distribution for the Company's entire retail grocery product
line.
The Company recently announced an agreement to sell its refrigerated
yogurt line of business to Mid-America Dairymen Inc., the manufacturer of
the "TCBY" refrigerated yogurt product line, and the nation's largest
dairy marketing cooperative with annual sales of over $2.5 billion.
Mid-America Dairymen will continue to expand the marketing and
distribution of "TCBY" Traditional Style Yogurt products. This sale is
expected to close in the second quarter of 1995, with a pre-tax gain of
approximately $2.3 million, or $.06 per share net of taxes, estimated to
result from this transaction.
<PAGE>
TCBY 1995 FIRST QUARTER RESULTS 30
Frank D. Hickingbotham, Chairman of the Board and CEO, stated, "During
the first quarter of 1995, the Company made significant investments in
order to increase sales and gain additional market share in the retail
grocery trade. With the sale of the refrigerated yogurt product line,
the Company's retail grocery division will now concentrate on the further
development of the "TCBY" hardpack frozen yogurt product line which is
manufactured at our recently expanded plant in Dallas, Texas."
As of February 28, 1995, there were 2,808 "TCBY" locations open, compared
to 2,498 at the end of the first quarter of 1994. This includes 1,239
franchised stores, 88 Company-owned stores, 151 international stores, and
1,330 non-traditional locations, and represents a net increase of 310
locations, including four new franchise locations in the Denver airport.
Same store sales for Company-owned and franchised stores increased 6.4
percent in the first quarter of fiscal 1995 from the first quarter of
1994. Same store sales comparisons do not include sales from
non-traditional locations.
The Company recently rolled out its new store concept, "TCBY" Treats. To
date, there are over 350 stores that have converted to or are under
development for this new concept. "TCBY" Treats features soft serve
frozen yogurt, hand-dipped frozen yogurt, hand-dipped premium ice cream
and shaved ice, as well as a new decor package.
"We are pleased with the results of our "TCBY" locations this quarter.
Consumer response to the "TCBY" Treats concept has been positive. The
strategic changes in our retail division will a dd to this momentum as we
continue to move forward and pursue opportunities for sale and
distribution of all "TCBY" frozen yogurt products," said Hickingbotham.
TCBY Enterprises, Inc., through subsidiary companies, manufactures and
sells soft serve frozen yogurt, hardpack frozen yogurt, novelty products
and custom foodservice vehicles, and markets refrigerated yogurt and
foodservice equipment. The Company is the largest franchisor, licensor
and operator of frozen yogurt stores in the world.
<PAGE>
TCBY 1995 FIRST QUARTER RESULTS 31
TCBY Enterprises, Inc.
Selected Financial Highlights
(In Thousands, Except Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
February 28
1995 1994
<S> <C> <C>
Operating Results
Sales & Franchising Revenues $ 27,953 $ 24,259
Net Loss $ (2,819) $ ( 621)
Net Loss Per Share $ (.11) $ (.02)
Average Shares Outstanding 25,596 25,489
Dividends Paid Per Share $ .05 $ .05
February 28 November 30
1995 1994
Financial Position
Current Assets $ 54,516 $ 58,968
Current Liabilities $ 12,853 $ 12,458
Property, Plant & Equipment, Net $ 58,795 $ 56,844
Total Assets $137,878 $142,280
Long-term Debt $ 15,210 $ 15,910
Stockholders' Equity $104,177 $108,274
-30-</TABLE>
EXHIBIT 99(e)
PRESS RELEASE
FOR IMMEDIATE RELEASE
MONDAY
APRIL 3, 1995
CONTACT PERSON: STACY DUCKETT
CORPORATE COMMUNICATIONS
501-688-8229
TCBY AND MID-AMERICA DAIRYMEN
COMPLETE SALE OF "TCBY" REFRIGERATED YOGURT LINE
LITTLE ROCK, AR - MONDAY (April 3, 1995) - TCBY ENTERPRISES, INC.,
(NYSE:TBY) and Mid-America Dairymen Inc. completed the sale of the "TCBY"
refrigerated yogurt product line on April 1, as scheduled. As previously
announced, TCBY sold the exclusive marketing and distribution rights for
the United States of its refrigerated yogurt product line to Mid-America
Dairymen, the manufacturer of the line.
The product line currently consists of low fat and nonfat/no sugar added
varieties of refrigerated yogurt, and the "TCBY" Twosome product -
refrigerated yogurt and topping, side-by-side. In 1994, TCBY sales of
this product were approximately $23 million.
Under the terms of the 15-year agreement, Mid-America Dairymen plans to
expand the distribution of these products, as well as develop additional
refrigerated dairy items under the "TCBY" brand. Mid-America currently
manufactures and distributes over 2,000 products nationwide. TCBY will
continue to manufacture and distribute "TCBY" brand hardpack frozen
yogurt products through the retail grocery trade.
The sale of the product line is expected to generate a pre-tax gain of
approximately $2.3 million, or $.06 per share net of taxes, for TCBY in
its second quarter. Over the term of the agreement, TCBY expects to
receive minimum proceeds of $17.7 million.
Frank D. Hickingbotham, Chairman of the Board and Chief Executive Officer
of TCBY Enterprises, Inc., stated, "We are pleased to enter into this
strategic alliance with Mid-America Dairymen that will allow for the
continuing placement and development of the "TCBY" brand in the
refrigerated yogurt category of the retail grocery trade." Gary Hanman,
Chief Executive Officer of Mid-America Dairymen Inc., stated, "We are
excited to produce a high quality product under the "TCBY" brand and look
forward to the opportunity to expand the <PAGE>
marketing and distribution of the " TCBY" Traditional Style Yogurt
products."
TCBY Enterprises, Inc., through subsidiary companies, manufactures and
sells soft serve frozen yogurt, hardpack frozen yogurt, novelty products,
custom foodservice vehicles, and markets foodservice equipment. TCBY is
the largest franchisor, licensor and operator of frozen yogurt stores in
the world.
Mid-America Dairymen Inc. is the nation's largest dairy marketing
cooperative, with almost 18,000 dairy farm family members in 30 states.
Last year Mid-America Dairymen had sales of more than $2.5 billion.
-30-
PURCHASE AND SALE WITH CONTINUING
TRADEMARK LICENSE AGREEMENT
WITH REPURCHASE RIGHTS
THIS AGREEMENT is made and entered into effective as of the 15th day
of March, 1995, by and between TCBY Systems, Inc., a corporation having
its principal place of business at 1100 TCBY Tower, 425 West Capitol
Avenue, Little Rock, Arkansas, 72201, United States of America (herein
"SELLER") and Mid-America Dairymen, Inc., a Kansas corporation, having
its principal place of business at 3253 East Chestnut Expressway,
Springfield, Missouri 65802 (herein "PURCHASER"), wherein the parties, in
exchange for the mutual covenants, consideration, representations, and
warranties herein set forth, do agree as follows:
I. ___________ Definitions
1.00 "Annual" shall mean the period April 1 through March 31.
1.01 "Assets" shall mean the business operations of SELLER as such
pertain to the Inventory on hand and Licensed Products. Specifically
included in the definition of "Assets" are all slotting, promotional,
distribution, and warehousing fees and costs paid by SELLER pertaining to
the Inventory on hand and the Licensed Products prior to the Transfer and
Closing Date, all lists of customers, brokers, and distributors of and
for the Licensed Products, all existing rights and privileges to sell the
Licensed Products in the Territory, and future rights (during the term
fixed in this Agreement) to sell the Licensed Products together with new
products to be developed by PURCHASER in the futur e for sale within the
Territory.
1.02 "Facility" shall mean t he physical plant as selected by PURCHASER
and agreed to by SELLER which agreement shall not unreasonably be
withheld at which Licensed Operations shall be undertaken, as appropriate
for the context in which used herein.
1.03 "Inventory" shall mean all products, materials, ingredients,
supplies, and goods (as such are applicable) used in the Licensed
Operations and the packaging and shipping thereof or finished Licensed
Products on hand as of the date of this Agreement, as appropriate for the
context in which used herein.
1.04 "Licensed Operations" shall mean the actual processing, assembling,
manufacturing, or marketing of the Licensed Products of PURCHASER.
1.05 "Licensed Products" shall mean refrigerated or shelf stable dairy
products bearing the Marks as listed on Exhibit "A", hereto attached,
produced, assembled, manufactured or marketed by PURCHASER. This
Agreement shall be deemed a single agreement governing all the Licensed
Products notwithstanding the fact that various Licensed Products may be
listed on different versions of Exhibit "A" which may from time to time
be agreed upon by the parties subsequent to the date of this Agreement.
1.06 "Marks" shall mean the trademarks and tradenames used by SELLER or
any affiliate of SELLER to identify the Licensed Products.
1.07 "Territory" shall mean the fifty (50) States of the United States
of America and the District of Columbia.
1.08 "Transfer and Closing Date" shall mean April 1, 1995.
II. ____________________ Sale and Appointment
2.01 SELLER hereby sells to PURCHASER, upon the terms and conditions set
forth in this Agreement, the Assets and the exclusive right and license
(the "License") to process, assemble, manufacture or market the Licensed
Products and to sell them to whomever PURCHASER shall select within the
Territory.
2.02 Neither during the term of the License granted pursuant to this
Agreement nor after its termination shall PURCHASER, without SELLER's
prior written consent or direction, either establish any line of
distribution for t he Licensed Products or knowingly sell any Licensed
Product outside the Territory.
2.03 PURCHASER expressly acknowledges and agrees that the License herein
set forth relates solely to the right to process, assemble, manufacture,
or market and then sell the Licensed Products in the Territory, and that
the grant of rights herein set forth is expressly subject to the
conditions and limitations set forth in this Agreement.
2.04 PURCHASER expressly acknowledges and agrees that a precondition to
commencement of Licensed Operations with respect to any particular newly
developed product by PURCHASER (but excluding products set forth in
Exhibit A) shall be SELLER's written authorization to commence.
III. ___________________ Time and Manner of Consummation;
______________________Duration of Licensed Operations
MID-AMERICA.PASA.4th
3.01 The closing of the purchase and sale transaction herein set forth
shall occur on the Transfer and Closing Date, unless the parties shall
mutually agree upon an alternative date. The transfer of assets shall
become effective immediately upon the Transfer and Closing Date, but the
parties acknowledge and agree that a reasonable period of time, extending
no later than November 30, 1995, following the Transfer and Closing Date
may be required for an orderly transition of the Assets from SELLER to
PURCHASER.
3.02 The term of the Licensed Operations under this Agreement shall be
for fifteen (15) years from the Transfer and Closing Date. Under no
circumstances shall the term hereof extend beyond the fifteenth (15th)
anniversary of the Transfer and Closing Date, unless formally renewed as
provided in this Section. Provided no default by PURCHASER has occurred
hereunder, and provided further that this Agreement is otherwise
continuing in full force and effect as of the fourteenth (14th)
MID-AMERICA.PASA.4th
anniversary hereof, then PURCHASER shall have the right to extend the
term hereof for an additional ten (10) years upon giving SELLER written
notice thereof at any time between the thirteenth (13th) and fourteenth
(14th) anniversary hereof.
3.03 The parties acknowledge and agree that they are currently in a
post-term relationship under that certain Co-Packing Agreement made and
entered into by them effective as of December 1, 1992, and which ended
November 30, 1994. Both parties agree to diligently and in good faith
work to arrange for a smooth transition from the prior relationship to
the one contemplated by the closing of the transaction contemplated in
this Agreement. Subsumed within the foregoing, and not by way of
limitation, the parties shall cooperate in:
(A) The announcement of this transaction, to the extent deemed
necessary by either party;
(B) Introductions of PURCHASER and joint announcements to key
accounts;
(C) The expeditious and orderly transfer of order-taking for
the Licensed Products;
(D) The expeditious and orderly transfer of books and records;
and
(E) The introduction of PURCHASER to distributors,
warehousemen, and brokers currently involved in the sale of Licensed
Products.
3.04 Both parties represent to the other that all necessary authority
and power to enter into this Agreement, as may be required for either of
them by their respective Charters, Bylaws, or Boards of Directors, has
been obtained for itself. Both parties further represent to the other
tha t all costs in connection with entering into this Agreement have been
or will be paid by the party incurring the cost, and it is understood and
agreed that each party shall bear its own costs in connection with the
entering into and performance under this Agreement.
IV. _________________ Time and Manner of Payments and Fees
4.01 In partial consideration for the Assets, PURCHASER agrees to pay
SELLER as follows:
(A) The sum of Two Million Dollars ($2,000,000), in the
following manner:
(i) PURCHASER's first installment shall be paid to SELLER
on April 1, 1995, in the amount of One Million, Two Hundred Thousand
Dollars ($1,200,000), less the cost of saleable Inventory on hand,
determined pursuant to Section 4.04 of this Agreement;
MID-AMERICA.PASA.4th
(ii) Starting on April 1, 1997, the sum of Eight Hundred
Thousand Dollars ($800,000) in four equal quarterly payments (four
payments of $200,000 each), provided the cost of saleable Inventory
deducted from the first installment, set forth in Section 4.01 (A)(i)
above, shall be divided by four and added to each of the quarterly
payments starting with the April 1, 1997, payment; and
(B) Commencing on the Transfer and Closing Date, and payable
quarterly over each calendar quarter starting with the quarter ending
June 30, 1995, PURCHASER shall pay SELLER with reference to the amount of
Licensed Products sold by PURCHASER, at a rate of Seven Cents per Pound
(7r /lb.) of Licensed Products sold, until One Hundred Fifty Million
Pounds (150,000,000 lbs.) are sold by PURCHASER. PURCHASER agrees to
sell a Annual Minimum Volume ("Minimum Volume") of Fifteen Million Pounds
(15,000,000 lbs.) of Licensed Products during the initial term of this
Agreement.
4.02 After PURCHASER has sold One Hundred Fifty Million Pounds
(150,000,000 lbs.) of Licensed Products, PURCHASER shall pay to SELLER,
in partial consideration for the rights granted hereunder, a recurring,
quarterly, nonrefundable royalty of Seven Cents per Pound (7 r /lb.) of
Licensed Products sold by PURCHASER. PURCHASER agrees to sell a minimum
annual volume of Fifteen Million Pounds (15,000,000 lbs.) of Licensed
Products.
4.03 Following the complete payment for the Assets as set forth in
Section 4.01 of this Agreement, PURCHASER shall establish a marketing
fund to be used in support of sales of the Licensed Products. SELLER
shall quarterly pay into this marketing fund at a rate of Two Cents per
Pound (2r /lb.) of Licensed Products sold during the previous quarter
pursuant to this Agreement, and PURCHASER shall be entitled to use this
fund for the promotions and marketing of the Licensed Products. In
undertaking these marketing fund expenditures, PURCHASER shall seek
SELLER's opinions and advice on a continuing basis; however, under no
circumstances shall PURCHASER use any marketing device, media,
advertisement, or related material in support of the Licensed Products
without first obtaining SELLER's written approval; PURCHASER acknowledges
and agrees that the need to obtain SELLER's prior written permission for
use of any marketing materials in connection with the Licensed Products
shall be continuing.
4.04 As of the Transfer and Closing Date, an accounting of the Inventory
on hand will be made or caused to be made jointly by SELLER and
PURCHASER, and results thereof shall be furnished to PURCHASER.
PURCHASER shall purchase all saleable Inventory at a price equal to
PURCHASER's invoice price to SELLER and inbound freight to the warehouse
for such Inventory. PURCHASER shall pay this amount to SELLER within ten
(10) days of presentation of the accounting results to PURCHASER, and
PURCHASER shall be entitled to offset against the amount any outstanding
invoice amounts due from SELLER prior to the Transfer and Closing Date.
4.05 Upon the commencement of the renewal term of this Agreement, if
such should occur, the Annual Minimum Volume of PURCHASER's required
MID-AMERICA.PASA.4th
sales of Licensed Products, and concomitant liability for any shortfall
in any year of the renewal term, shall be adjusted upward to equal the
MID-AMERICA.PASA.4th
average Annual Minimum Volume of PURCHASER's sales of Licensed Products
over the last three (3) years of the initial term of this Agreement.
That average shall then become the Annual minimum volume of PURCHASER's
required sales of Licensed Products for the duration of the renewal term.
Under no circumstances shall said Annual volume requirement decline below
Fifteen Million Pounds (15,000,000 lbs.).
4.06 Upon the commencement of the renewal term of this Agreement, if
such should occur, the royalty rate payable by PURCHASER to SELLER
hereunder shall be adjusted by agreement of the parties, provided that it
shall not under any circumstances be less than Five Cents per Pound
(5r/lb.) nor greater than Nine Cents per Pound (9r/lb.).
4.07 All payments hereunder or by virtue of this Agreement shall be
made at SELLER's address first above written or such bank as SELLER shall
designate, in currency of the United States of America.
4.08 All payments hereunder shall be calculated quarterly with calendar
quarters ending as stated above, and paid to and received by SELLER on or
before the twentieth (20th) day following such quarter end. To the
extent necessary, and after commencement of royalty payments, any
shortfall from the annual minimum royalty shall be paid with every fourth
quarterly payment starting with the fourth quarterly payment due
following commencement of royalty payments, unless other method of cure
has been selected.
V. ________________ Duties of PURCHASER
5.01 PURCHASER understands and acknowledges that every detail of
Licensed Operations is important to SELLER, and in order to maintain the
high standards associated with the Marks, to increase the demand for the
Licensed Products in the Territory, and to protect SELLER's reputation
and goodwill, PURCHASER undertakes to fully cooperate with SELLER in
every practical and reasonable manner throughout the term of this
Agreement. This general statement of intent shall not limit in any manner
other duties and obligations imposed upon or undertaken by PURCHASER by
or under this Agreement.
5.02 PURCHASER shall operate the Facility in conformity with such
uniform methods, standards and specifications as industry standards may
require, as applicable governmental authorities may require, to ensure
that the highest degree of quality is uniformly maintained.
5.03 PURCHASER shall permit SELLER or its agents, at any reasonable time
during Licensed Operations, to enter the Facility for the purpose of
conducting inspections and, at SELLER's option, to remove from the
Facility samples of any Inventory items in amounts reasonably necessary
for testing by SELLER or its designee, to determine whether said samples
meet SELLER's standards and specifications.
VI. _____ Marks
MID-AMERICA.PASA.4th
6.01 SELLER represents with respect to the Marks that:
(A) SELLER or TCBY Enterprises, Inc., the parent corporation
of SELLER, is the owner of all right, title, and interest in and to the
Marks; and
(B) SELLER has taken and will take all steps reasonably
necessary to preserve and protect the ownership and validity in and of
the Marks.
6.02 With respect to PURCHASER's authorized use of the Marks pursuant to
this Agreement, PURCHASER agrees that:
(A) In the packaging, marketing, and advertising of the
Licensed Products PURCHASER shall use only the Marks designated by SELLER
in writing and shall use them only in the manner authorized and permitted
by SELLER in writing;
(B) PURCHASER shall use the Marks only for Licensed Operations
licensed hereunder at the Facility;
(C) PURCHASER's right to use the Marks is limited to such uses
as are authorized under this Agreement, and any unauthor ized use thereof
shall constitute an infringement of SELLER's rights;
(D) PURCHASER shall not use the Marks to incur any obligation
or indebtedness on behalf of SELLER;
(E) PURCHASER shall not use the Marks as part of any corporate
or other legal name;
(F) PURCHASER shall comply with any of SELLER's instructions
in executing documents deemed necessary by SELLER or its counsel to
obtain protection for SELLER for the Marks or to maintain for SELLER
their continued validity and enforceability; and
(G) In the event that litigation involving the Marks is
instituted or threatened against PURCHASER, PURCHASER shall promptly
notif y SELLER and shall cooperate fully in defending or settling such
litigation, all at SELLER's expense provided PURCHASER shall not incur
any such expense without SELLER's permission.
6.03 PURCHASER expressly understands, acknowledges, and agrees that:
(A) To the best of PURCHASER's knowledge, SELLER is the owner
of all right, title and interest in and to the Marks and the goodwill
associated with and symbolized by them;
(B) To the best of PURCHASER's knowledge, the Marks are valid
and serve to identify the Licensed Products;
MID-AMERICA.PASA.4th
(C) PURCHASER shall not directly or indirectly contest the
validity or SELLER's ownership of the Marks;
(D) PURCHASER's use of the Marks pursuant to this Agreement
does not give PURCHASER any ownership interest or other interest in or to
the Marks, except the license granted by this Agreement;
(E) Any and all goodwill arising from PURCHASER's use of the
Marks in the Licensed Operations shall inure solely and exclusively to
SELLER's benefit, and upon expiration or termination of this Agreement or
the license herein granted, no monetary amount shall be assigned as
attributable to any goodwill associated with PURCHASER's use of the
Marks;
(F) Subject to Article II of this Agreement, the right to use
the Marks granted hereunder to PURCHASER is qualified, and SELLER thus
has and retains the right, among others:
(i) To develop and establish, other systems of
distribution for other products or services, specifically excluding the
Licensed Products within the Territory, utilizing the same or similar
Marks; and
(ii) To develop and establish, within and outside the
Territory, other systems of distribution for products or services under
any proprietary marks not now or hereafter designated in writing as part
of the Licensed Products, and to grant licenses thereto without providing
PURCHASER any right therein.
VII. _________________ Confidential Information
7.01 PURCHASER shall not, during the term of this Agreement or
thereafter, communicate, divulge, or use for the benefit of any other
person, persons, partnership, association, or corporation any
confidential information, knowledge, or know-how concerning the methods
of operation of SELLER which may be communicated to PURCHASER or of which
PURCHASER may be apprised by virtue of PURCHASER's operations under the
terms of this Agreement. PURCHASER shall divulge such confidential
information only to such of its employees or its subcontractors as must
have access to it in order to operate the Facility and produce, assemble,
manufacture, or market the Licensed Products. Any and all information,
knowledge, know-how, and techniques which SELLER conveys to PURCHASER
shall be deemed confidential for purposes of this Agreement, except
information which PURCHASER can demonstrate came to its attention prior
to disclosure thereof by SELLER, or which, at the time of disclosure by
SELLER to PURCHASER, had become a part of the public domain, through
publication or communication by others, or which, after disclosure to
PURCHASER by SELLER, becomes a part of the public domain, through
publication or communication by others who had independent lawful rights
to so disclose.
7.02 PURCHASER acknowledges that any failure to comply with the
requirements of this Article will cause SELLER irreparable injury, and
MID-AMERICA.PASA.4th
PURCHASER, if it is established by a court of competent jurisdiction that
PURCHASER has violated the terms and conditions of this Agreement, agrees
to pay all court costs and reasonable attorneys' fees incurred by SELLER
in obtaining specific performance of, or an injunction against violation
of, the requirements of this Article.
VIII. ______________________ Accounting and Records
8.01 PURCHASER agrees to maintain and preserve, during the term of this
Agreement and for a period of three (3) years thereafter, full, complete
and accurate books, records and accounts in accordance with generally
accepted accounting principles.
8.02 PURCHASER agrees to furnish on a quarterly basis sales reports and
remittance reports for purposes of payment verification. PURCHASER
agrees if SELLER discovers by any means that sales of Licensed Products
reported to SELLER by PURCHASER are understated for any year by one
percent (1%) or more, then PURCHASER shall immediately pay all amounts
payable on the unreported sales of Licensed Products.
8.03 SELLER shall have the right at any time during normal business
hours to examine or audit, or cause to be examined or audited, the
business records of PURCHASER which pertain to or would substantiate the
weekly sales and remittance reports furnished pursuant to this Article
VIII. PURCHASER shall fully cooperate with SELLER in the conduct of any
such examination or audit.
IX. _________ Insurance
9.01 PURCHASER shall procure, prior to commencement of Licensed
Operations, and maintain in full force and effect during the term of this
Agreement, and any renewal hereof, at PURCHASER's expense, an insurance
policy or policies protecting PURCHASER, SELLER, and TCBY Enterprises,
Inc., against any loss, liability or expense whatsoever from fire,
lightning, personal injury, death, theft, vandalism, malicious mischief,
property damage, the perils included in the extended coverage endorsement
approved for use in the United States of America, or otherwise, arising
or occurring upon or in connection with Licensed Operations, or by reason
of the construction, operation or occupancy of the Facility, as well as
such other insurance applicable to such other special risks created by
PURCHASER's affiliated businesses, if any, as SELLER may reasonably
require for its own and PURCHASER's protection. PURCHASER shall cause
SELLER to be designated an additional named insured in such policy or
policies.
9.02 Such insurance policy or policies shall provide, at a minimum
comprehensive general liability insurance, including p roducts liability
coverage to the extent such may apply, with a combination of primary and
excess coverage limits of not less than Ten Million Dollars
($10,000,000).
9.03 PURCHASER's obligation to obtain and maintain the foregoing policy
or policies in the amounts specified shall not be limited in any way by
reason of any insurance which may be maintained by SELLER, nor shall
MID-AMERICA.PASA.4th
PURCHASER's performance of that obligation relieve it of liability under
the indemnity provisions set forth in Paragraph 13.01 of this Agreement.
9.04 Upon the Transfer and Closing Date, certificates of insurance
issued by an approved insurance company showing compliance with the
foregoing requirements shall be furnished by PURCHASER to SELLER. The
certification of insurance shall include a statement by the insurer that
the policy or policies will not be cancelled or materially altered
without at least sixty (60) days' prior written notice to SELLER.
Evidence of commitments or binders for such insurance shall be submitted
promptly to SELLER after execution of this Agreement.
9.05 Should PURCHASER, for any reason, fail to procure and maintain the
insurance required by this Agreement, SELLER, upon reasonable notice to
PURCHASER, shall have the right, in addition to any other rights it may
have hereunder, at its option, to procure, upon reasonable notice to
PURCHASER, such insurance and to charge the cost thereof to PURCHASER,
which charges, together with a reasonable fee for SELLER's expenses in so
acting, shall be payable by PURCHASER immediately upon notice of such
procurement.
X. ___________________Transferability and Assignability
10.01 This Agreement and the duties and obligation hereunder shall not
be assigned by either party without the prior, written approval of the
other, which shall not be unreasonably withheld. In the event of a
request for approval of an assignment, grounds for withholding approval
may include concerns as to the assignee's ability to perform under this
Agreement or the retention by the assignee of personnel having
appropriate expertise, and these and other grounds for objection must
first be satisfied to the satisfaction of the party withholding approval.
10.02 In the event of an assignment (but specifically excluding Facility
subcontracting) in accordance with the provisions of Paragraph 10.01
above, the party requesting assignment shall pay the other the sum of Ten
Thousand Dollars ($10,000) to defray all costs of due diligence in
examining the proposed assignee.
XI. ___________ Default, Termination, and Obligations Thereupon
11.01 PURCHASER shall be deemed to be in default under this Agreement,
and all rights granted herein shall automatically terminate without
notice to PURCHASER if:
(A) PURCHASER becomes insolvent or makes a general assignment
for the benefit of creditors;
(B) A petition in bankruptcy is filed by PURCHASER or such a
petition is filed against and not opposed by PURCHASER;
(C) PURCHASER is adjudicated as bankrupt or insolvent;
MID-AMERICA.PASA.4th
(D) A bill in equity or other proceeding for the appointment
of a receiver of PURCHASER or other custodian for PURCHASER's business or
assets is filed or consented to by PURCHASER;
(E) A receiver or other custodian (permanent or temporary) of
PURCHASER's assets or property, or any part thereof, is appointed by any
court of competent jurisdiction;
(F) Proceedings for a composition of creditors under any law
should be instituted by or against PURCHASER; or
(G) A final judgment against PURCHASER remains unsatisfied or
of record for thirty (30) days or longer (unless appropriate bond is
filed) the effect of which, in the opinion of SELLER, is to substantially
impair PURCHASER's ability to perform under this Agreement;
(H) PURCHASER is dissolved;
(I) Execution is levied against t he Facility, PURCHASER's
business, or PURCHASER's property the effect of which, in the opinion of
SELLER, is to substantially impair PURCHASER's ability to perform
hereunder and such impairment is not removed or stayed within ten (10)
days of execution;
(J) Suit to foreclose any lien or mortgage against the
Facility or Inventory is instituted against PURCHASER and not dismissed
or contested by litigation within thirty (30) days; or
(K) The real or personal property of the Facility shall be
sold after levy thereupon by any sheriff, marshal, constable or other
officer acting on behalf of a court of competent jurisdiction.
11.02 PURCHASER shall be deemed to be in default and SELLER may, at its
option, terminate all rights granted under this Agreement, without
affording PURCHASER any opportunity to cure the default, effective
immediately upon receipt of notice by PURCHASER, upon the occurrence of
any of the following events:
(A) If PURCHASER fails to commence and continue Licensed
Operations upon the Transfer and Closing Date;
(B) If PURCHASER becomes involved in any crime or offense that
is reasonably likely, in the sole opinion of SELLER, to adversely affect
the Marks, the goodwill associated therewith, SELLER's interest therein,
or the Licensed Products;
(C) If PURCHASER purports to transfer any right or obligations
under this Agreement or any intere st in PURCHASER to any third party
without SELLER's prior written consent, contrary to the terms of Article
X of this Agreement;
(D) If PURCHASER discloses or divulges to unauthorized persons
confidential information provided to PURCHASER by SELLER;
MID-AMERICA.PASA.4th
(E) If PURCHASER knowingly maintains false books or records,
or submits any false reports to SELLER;
(F) If PURCHASER is in default more than twice in a twelve
(12) month period after notice un der Paragraph 11.03 hereof for failure
substantially to comply with any of the requirements imposed by this
Agreement, whether or not cured after notice;
(G) If this Agreement or any part of it is determined by a
court or governmental agency of competent jurisdiction to be invalid or
unenforceable under any applicable law, governmental regulation, or
treaty.
11.03 Except as provided in paragraphs 11.01 and 11.02 of this
Agreement, PURCHASER shall have thirty (30) days after its receipt from
SELLER of a written notice of termination of rights within which to
remedy any default hereunder and to provide evidence thereof to SELLER.
If any such default is not cured within that time, or such longer period
as applicable law may require, then this Agreement shall terminate
without further notice to PURCHASER effective immediately upon the
expiration of the thirty (30) day period or such longer period as
applicable law may require. PURCHASER shall be in default hereunder for
any failure to comply with any of the requirements imposed by this
Agreement or to carry out the terms of this Agreement in good faith.
Such defaults shall include, for example, but without limitation, the
occurrence of any of the following events:
(A) If PURCHASER fails, refuses, or neglects promptly to pay
any monies owing to SELLER when due, or to submit the financial or other
information required by SELLER under or pursuant to this Agreement;
(B) If PURCHASER defaults in the performance or observance of
any other agreement, term, or condition contained herein;
(C) If PURCHASER fails, refuses, or neglects to obtain
SELLER's prior written approval or consent as required by this Agreement;
(D) If PURCHASER engages in any business or markets any
service or product under a name or mark which, in SELLER's opinion, is
confusingly similar to the Marks;
(E) If PURC HASER fails to comply with the in-term covenants
set forth in Article XII hereof or fails to obtain execution of the
covenants required thereunder; or
(F) If PURCHASER misuses any unauthorized use of the Marks or
otherwise materially impairs the goodwill associated therewith or
SELLER's rights therein.
11.04 In the event PURCHASER fails to achieve Annual Minimum Volume
sales of Licensed Products, as set forth in Article IV of this Agreement,
PURCHASER shall have the right to elect one of the following three (3)
remedies:
MID-AMERICA.PASA.4th
(A) PURCHASER shall pay SELLER at the rate of Seven Cents per
Pound (7r/lb.) for the shortfall from the Annual Minimum Volume;
(B) The shortfall then realized shall be added to the next
Annual Minimum Volume amount, provided this may not occur in successive
years; or
(C) The Agreement shall be terminated; in such event, SELLER
shall repurchase the Assets for a purchase price equal to the unpaid
balance of payments (excluding the first installment due pursuant to
Section 4.01(A). above) due from PURCHASER pursuant to Section 4.01(B).
11.05 Upon termination of PURCHASER's rights under this Agreement or
expiration of this Agreement (or any renewal or extension hereof), all
rights granted hereunder to PURCHASER shall forthwith terminate, and:
(A) PURCHASER shall immediately cease the Licensed Operations
licensed under this Agreement, and shall not thereafter, directly or
indirectly, represent to the public or hold itself out as present or
former PURCHASER of SELLER;
(B) PURCHASER shall immediately and permanently cease to use,
in any manner whatsoever, all Marks and distinctive forms, slogans,
symbols, and devices associated with the Licensed Products; in
particular, PURCHASER shall cease to use, without limitation, all paper
goods, stationery, forms, and any other articles which display the Marks;
(C) PURCHASER shall take such action as may be necessary to
cancel any
MID-AMERICA.PASA.4th
assumed name, user, or equivalent registration belonging to or controlled
by PURCHASER which contains the Marks, and shall furnish SELLER with
evidence satisfactory to SELLER of compliance with this obligation within
thirty (30) days after termination or expiration of this Agreement;
(D) PURCHASER shall not use any reproduction, counterfeit,
copy, or colorable imitation of the Marks in any business or the
promotion thereof, which is likely to cause confusion, mistake, or
deception, or which is likely to dilute SELLER's rights in and to the
Marks, and further agrees not to utilize any designation of origin or
description or representation which falsely suggests or represents an
association or connection with SELLER constituting unfair competition;
(E) PURCHASER, if it is established by a court of competent
jurisdiction that PURCHASER has violated the terms and conditions of this
Agreement, shall pay to SELLER all damages, costs, and expenses,
including reasonable attorneys' fees, incurred by SELLER subsequent to
the termination or expiration of this Agreement in obtaining injunctive
or other relief for the enforcement of any provisions of this paragraph;
(F) PURCHASER shall comply with certain covenants as set forth
in Paragraph 12.01 of this Agreement;
(G) SELLER shall not, upon termination of this Agreement for
any reason, be liable to PURCHASER for compensation, reimbursement or
damages of any kind due to the loss of prospective profits on anticipated
sales or due to expenditures, inve stments, leases, or commitments in
connection with the business or goodwill of PURCHASER; and
(H) SELLER shall have the absolute right to purchase all
Inventory and Licensed Products on hand at the Facility or controlled by
PURCHASER at PURCHASER's cost; SELLER shall have ten (10) days to notify
P URCHASER of its exercise of such right to purchase hereunder and upon
such notice SELLER shall promptly and diligently effect such purchase,
but in the event SELLER fails to so notify PURCHASER such right to
purchase shall lapse. In the event SELLER does not purchase the Licensed
Products, in whole or in part, then PURCHASER shall have the right to
dispose of all Licensed Products on hand, provided such is accomplished
within forty (40) days of the date of termination.
XII. _______________ Certain Covenants
12.01 PURCHASER specifically acknowledges that pursuant to this
Agreement, PURCHASER will receive valuable specialized training and
confidential information, including, without limitation, information
regarding the sales, promotional and marketing methods and techniques of
SELLER. PURCHASER covenants that, during the term of this Agreement,
except as otherwise approved in writing by SELLER, PURCHASER shall not,
either directly or indirectly, for itself, or through, on
MID-AMERICA.PASA.4th
behalf of, or in conjunction with any person, persons, partnership, or
corporation, or other legal entity:
(A) Divert or attempt to divert any business or customer of
SELLER, SELLER's affiliates, or any purchaser, franchisee or
subfranchisee of SELLER or any affiliate thereof to any competitor by
direct or indirect inducement or otherwise, or do or perform, directly or
indirectly, any other act injurious or prejudicial to the goodwill
associated with SELLER's Marks and the Licensed Products; or
(B) Employ or seek to employ any key person who is at that
time employed by SELLER, or otherwise directly or indirectly induce such
person to leave his or her employment.
12.02 PURCHASER covenants that, for a continuous uninterrupted period
commencing upon the expiration or termination of this Agreement,
regardless of the cause for termination, and continuing for three (3)
years thereafter, PURCHASER will observe and honor the covenants stated
in the immediately foregoing paragraph of this Agreement.
12 .03 The parties agree that each of the foregoing covenants shall be
construed as independent of any other covenant or provision of this
Agreement. If all or any portion of a covenant in this Article XII is
held unreasonable or unenforceable by a court or agency having valid
jurisdiction in an unappealed final decision to which SELLER is a party,
PURCHASER expressly agrees to be bound by any lesser covenant subsumed
within the terms of such covenant that imposes the maximum duty permitted
by law, as if the resulting covenant were separately stated in and made a
part of this Article XII.
12.04 PURCHASER understands and acknowledges that SELLER shall have the
right, in its sole discretion, to reduce the scope of any covenant set
forth in this Article XII, or any portion thereof, without PURCHASER's
consent, effective immediately upon receipt by PURCHASER of written
notice thereof, and PURCHASER agrees that it shall comply forthwith with
any covenant as so modified, which shall be fully enforceable
notwithstanding the provisions of Paragraph 13.04 of this Agreement
pertaining to amendments.
12.05 PURCHASER acknowledges that PURCHASER's violation of the terms of
this Article XII would result in irreparable injury to SELLER for which
no adequate remedy at law may be available, and PURCHASER accordingly
consents to the issuance of an injunction prohibiting any conduct by
PURCHASER in violation of the terms of this Article XII. PURCHASER, if
it is established by a court of competent jurisdiction that PURCHASER has
violated the terms and conditions of this Agreement, agrees to pay all
costs and expenses (including reasonable attorneys' fees) incurred by
SELLER in connection with obtaining such injunction.
XIII. ___________________Miscellaneous Provisions
MID-AMERICA.PASA.4th
13.01 It is understood and agreed by the parties hereto that this
Agreement does not create a fiduciary relationship between them, that
PURCHASER shall be an independent contractor, and that nothing in this
Agreement is intended to constitute PURCHASER an agent, legal
representative, subsidiary, joint venturer, partner, employee or servant
of SELLER for any purpose whatsoever. PURCHASER is in no way authorized
by this Agreement to make any contract, agreement, warranty or
representation, or to create any obligation, express or implied, on
behalf of SELLER, and shall neither represent that PURCHASER has the
right so to act nor so act. SELLER shall hold PURCHASER out to the
public to be an independent contractor operating the business pursuant to
this Agreement. It is understood and agreed that under no circumstances
shall SELLER be liable for any act, omission, contract, debt, or any
other obligation of, or claim or judgment (collectively "claims" for
purposes of this paragraph) against PURCHASER. PURCHASER shall indemnify
and hold SELLER harmless against any and all such claims arising directly
or indirectly from, as a result of, or in connection with PURCHASER's
operation of the Facility or conduct of Licensed Operations, as well as
the costs, including attorneys' fees, of defending against them.
Specifically excluded from this paragraph are any claims arising due to
SELLER's violation of its duties under this Agreement.
13.02 No failure of SELLER to exercise any power reserved to it by this
Agreement, or to insist upon strict compliance by PURCHASER with any
obligation or condition hereunder, and no custom or practice of the
parties at variance with the terms hereof, shall constitute a waiver of
SELLER's right to demand exact compliance with any of the terms herein.
Waiver by SELLER of any particular default by PURCHASER shall not affect
or impair SELLER's rights with respect to any subsequent default of the
same, similar or different nature, nor shall any delay, forbear ance, or
omission of SELLER to exercise any power or right arising out of any
breach or default by PURCHASER of any of the terms, provisions, or
covenants hereof, affect or impair SELLER's right to exercise the same,
nor shall such constitute a waiver by SELLER of any right hereunder, or
the ri ght to declare any subsequent breach or default and to terminate
PURCHASER's rights under this Agreement prior to the expiration of its
term. Subsequent acceptance by SELLER of any payments due to it
hereunder shall not be deemed to be a waiver by SELLER of any preceding
breach by PURCHASER of any terms, covenants or conditions of this
Agreement.
13.03 Absent notice to the contrary in writing, any and all notices
required to be given hereunder shall be sent by mail, certified or
registered, postage prepaid, or by way of courier such as Federal Express
or a substantially similar company or via telecopy confirmed by telephone
communication, and addressed to either party at their address as first
set forth above. Notices of address changes for either SELLER or
PURCHASER shall be given in accordance with the notice provisions of this
paragraph. All notices hereunder must be written in the English
language.
13.04 This Agreement and the documents referred to herein constitute the
entire, full and complete agreement between SELLER and PURCHASER
MID-AMERICA.PASA.4th
concerning the subject matter hereof and supersede all prior agreements,
no other representation having induced PURCHASER to execute this
Agreement, and no representations, inducements, promises or agreements,
oral or otherwise, not embodied herein or attached hereto (unless of
subsequent date) were made by either party, and none shall be of any
force or effect with reference to this Agreement or otherwise. No
amendment, changes or variance from this Agreement shall be binding on
either party unless mutually agreed to by the parties and executed in
writing.
13.05 Except as expressly provided to the contrary herein, each article,
paragraph, part, term, and/or provision of this Agreement shall be
considered severable; and if, for any reason, any article, paragraph,
part, term and/or provision herein is determined to be invalid and
contrary to, or in conflict with, any existing or future law or
regulation of a court or agency having valid jurisdiction, such shall not
impair the operation or affect such other portions, articles, paragraphs,
parts, terms and/or provisions of this Agreement as may remain otherwise
intelligible, and the latter will continue to be given full force and
effect and bind the parties hereto; and said invalid articles,
paragraphs, parts, terms and/or provisions shall be deemed not to be a
part of this Agreement. PURCHASER expressly agrees to be bound by any
promise or covenant imposing the maximum duty permitted by law which is
subsumed within the terms of any provision hereof, as though it were
separately articulated in and made a part of this Agreement, that may
result from striking from any of the provisions hereof any portion or
portions which a court may hold to be unreasonable and unenforceable in a
final decision to which SELLER is a party, or from reducing the scope of
any promise or covenant to the minimum extent required to comply with
such a court order.
13.06 All references herein to the masculine, neuter or singular shall
be construed to include the masculine, feminine, neuter or plural, where
applicable, and all acknowledgments, promises, covenants, agreements and
obligations herein made or undertaken by PURCHASER shall be deemed
jointly and severally undertaken by all the signatories hereto on behalf
of PURCHASER.
13.07 Should the parties hereto have any controversy, dispute, or claim
arising out of or related to this Agreement which requires either of them
to seek judicial resolution, then the parties agree that the proper forum
and venue shall be before a three member commercial arbitration tribunal
convened in accordance with the rules of the American Arbitration
Association in Dallas, Texas.
13.08 This Agreement shall be governed by and construed in accordance
with the laws of the State of Arkansas, United States of America, except
to the extent any statute or law pertaining to conflict of laws may
result in a choice of forum inconsistent with the immediately preceding
paragraph. No right or remedy conferred upon or reserved to SE LLER or
PURCHASER by this Agreement is intended to be, nor shall be deemed,
exclusive of any other right or remedy herein or by law or equity
provided or permitted; but each shall be cumulative of every other right
or remedy. Nothing herein contained shall bar SELLER's right to obtain
MID-AMERICA.PASA.4th
injunctive relief against threatened conduct that will cause it loss or
damages, under the usual equity rules, including the applicable rules for
obtaining restraining orders and preliminary injunctions.
13.09 The Article headings appearing in this Agreement are for reference
purposes only and shall not affect, in any way, the meaning or
interpretation of this Agreement.
13.10 Upon full and complete execution of this Agreement, neither party
hereto shall have any right whatsoever to make any press release or other
public announcement concerning this Agreement, the transactions herein
contemplated, or matters hereto and thereto ancillary, without first
obtaining the written approval of the other party.
IN WITNESS WHEREOF, the parties hereto, intending to be legally
bound hereby, have duly executed this Agreement effective as of the date
first above written.
ATTEST: TCBY SYSTEMS, INC.
By:_________________________________________
_____________________________
Title:________________________________________
Assistant Secretary
(SEAL)
ATTEST: MID-AMERICA DAIRYMEN, INC.
By:_________________________________________
_____________________________
Title:_______________________________________
______________________Secretary
(SEAL)
MID-AMERICA.PASA.4th
SECOND AMENDED AND RESTATED LOAN AGREEMENT
BETWEEN
BANK ONE, TEXAS, N.A.
AND
TCBY ENTERPRISES, INC.
DATED
APRIL 7, 1995
TABLE OF CONTENTS
SECTION 1. DEFINITIONS 1
1.1. Defined Terms 1
1.2. Accounting Terms 15
1.3. Singular and Plural 15
SECTION 2. COMMITMENT, INTEREST AND FEES 15
2.1. Commitment 15
2.2 Revolving Loans 15
2.3. Term Loan 16
2.3.1. Term Facility 16
2.3.2 Note 16
2.3.3 Interest 17
2.4. Renewals and Extensions 17
2.5. Maximum Interest 17
2.6. Fees. 18
2.6.1. Preparation Fees 18
18
2.7 Changes in Commitment and Prepayments 18
2.7.1. Termination or Reduction in Commitment
Amount 18
2.7.2. Optional Prepayments 18
2.8. Basis of Payments 19
2.9. Notice and Manner of Borrowing, Continuing and
Converting Eurodollar Loans 19
2.10 Conditions to Loan Conversion 19
2.11 Duration of Interest Periods 20
2.12 Changed Circumstances Applicable to Eurodollar
Loans 20
2.13 Payments Not at End of Interest Period 21
SECTION 3. CONDITIONS PRECEDENT TO OBLIGATIONS OF LENDER 22
3.1. Conditions to Borrowing 22
3.1.1. Documents Executed 22
3.1.2. Certified Resolutions 22
3.1.3. Certified Articles 22
3.1.4. Certified Bylaws 22
3.1.5. Certificate of Good Standing 22
3.1.6. Certificate of Incumbency 22
3.1.7. Opinions of Counsel 23
3.1.8. UCC Lien Search 23
3.1.9. Approval of Lender Counsel 23
3.1.10. Other Information and Documentation 23
SECTION 4. WARRANTIES AND REPRESENTATIONS 24
4.1. Corporate Existence and Power 24
4.2. Authorization and Approvals 24
4.3. Valid and Binding Agreement 24
4.4. Actions, Suits or Proceedings 24
4.5. Subsidiaries 24
4.6. No Liens, Pledges, Mortgages or Security
Interests 25
4.7. Accounting Principles 25
4.8. No Adverse Changes 25
4.9. Conditions Precedent 25
4.10. Taxes 25
4.11. Compliance with Laws 25
4.12. Indebtedness 25
4.13. Material Agreements 25
4.14. Margin Stock 26
4.15. Misrepresentation 26
4.16. Forfeiture 26
SECTION 5. AFFIRMATIVE COVENANTS. 26
5.1. Financial and Other Information 26
5.1.1. Annual Financial Reports 26
5.1.2. Interim Financial Statements 26
5.1.3. Compliance Certificate 26
5.1.4. Adverse Events 27
5.1.5. Reports 27
5.1.6. Other Information as Requested 27
5.2. Insurance 27
5.3. Taxes 27
5.4. Maintain Corporation and Business 27
5.5. Use of Loan Proceeds 28
5.6. Leverage Ratio 28
5.7. Current Ratio 28
5.8. Profitability Ratio 28
5.9. Fixed Charge Coverage 28
SECTION 6. NEGATIVE COVENANTS 28
6.1. Liens and Encumbrances 28
6.2. Subsidiary Indebtedness 28
6.3. Extension of Credit and Investments 29
6.4. Guarantee Obligations 29
6.5. Subordinate Indebtedness 29
6.6. Property Transfer, Merger or Lease-Back 29
6.7. Investments 29
6.8. Misrepresentation 30
6.9. Margin Stock 30
6.10. Compliance with Environmental Laws 30
6.11. Principal Place of Business 30
6.12. Repurchase of Stock 30
SECTION 7. EVENTS OF DEFAULT - ENFORCEMENT - APPLICATION OF
PROCEEDS 30
7.1. Acceleration of Indebtedness 30
7.2. Cumulative Remedies 30
SECTION 8. MISCELLANEOUS 30
8.1. Independent Rights 31
8.2. Covenant Independence 31
8.3. Waivers and Amendments 31
8.4. GOVERNING LAW 31
8.5. Survival of Warranties, Etc. 31
8.6. Attorneys' Fees 31
8.7. Payments on Non-Business Days 31
8.8. Binding Effect 31
8.9. Notices 32
8.10. Counterparts 32
8.11. Headings 32
8.12. Capital Adequacy 32
8.13. INDEMNIFICATION AND REIMBURSEMENT BY THE
BORROWER 32
8.14. Gender 33
8.15. Joint Borrowers 33
8.16. Severability of Provisions 33
8.17. Assignment 33
8.18 Amendment and Restatement 34
8.19. NO ORAL AGREEMENTS 34
LIST OF EXHIBITS AND SCHEDULES
_____________ Exhibit/Sched
Agreement
Exhibit A Form of Borrower's Section 1.1
Compliance definition of
Certificate "Compliance
Certificate"
Exhibit B Notice of Eurodollar Section 2.8
Conversion
Schedule 1.1 Permitted Liens Section 1.1
definition of
"Permitted Liens"
Schedule 4.4 Actions, Suits and Section 4.4
Proceedings
Schedule 4.5 Ownership of Section 4.5
Subsidiaries
Schedule 4.11 Noncompliance with Section 4.11
Laws
Schedule 4.12 Indebtedness Section 4.12
Schedule 4.13 Material Agreements Section 4.13
AMENDED AND RESTATED LOAN AGREEMENT
THIS AMENDED AND RESTATED LOAN AGREEMENT is made and delivered as of
April 7, 1995 by and among Bank One, Texas, N.A. and TCBY Enterprises,
Inc.
SECTION 1. ___________ DEFINITIONS.
1.1. Defined Terms. As used herein, the following terms shall have
the following meanings:
"Adjusted Eurodollar Rate Adjusted Eurodollar Rate" shall mean, as
applicable to any Interest Period, a rate per annum determined
pursaunt to the following formula:
AER = [___IOR ]*
[ 1.00 - RP ]
AER = Adjusted Eurodollar Rate
IOR = Interbank Offered Rate
RP = Reserve Percentage
*The amount in brackets shall be rounded upwards, if necessary,
to the next higher 1/100 of 1%.
Where:
"Interbank Offered Rate" applicable to any Eurodollar Loan for
any Interest Period means the rate of interest determined in
accordance with subpart (a) or (b) below which Lender shall, in
its sole discretion, designate: (a) the interbank offered rate
for dollar deposits in the London market that is quoted to
Lender by Knight-Ridder Money Center Services (or such
comparable service as Lender may, in its sole discretion,
designate) two Business Days before the first day of such
interest period; or (b) the rate, determined by the Lender, to
be the prevailing rate per annum at which deposits in U.S.
dollars are offered to the Lender by first-class banks in the
interbank Eurodollar market in which it regularly participates
on or about 10:00 a.m. (Dallas time) two Business Days before
the first day of such Interest Period in an amount
approximately equal to the principal amount of the Eurodollar
Loan to which such Interest Period is to apply for a period of
time approximately equal to such Interest Period; provided,
however, that Lender shall not designate the rate of interest
determined pursuant to clause (b) above unless Lender actually
participates in the Eurodollar market for purposes of
"match-funding" the applicable Eurodollar Loan.
"Reserve Percentage" applicable to any Interest Period means
the rate (expressed as a decimal) applicable to the Lender
during such Interest Period under regulations issued from time
to time by the Board of Governors of the Federal Reserve System
for determining the maximum reserve requirement (including,
without limitation, any basic, supplemental, emergency or
marginal reserve requirement) of the Lender with respect to
"Eurocurrency liabilities" as that term is defined under such
regulations.
The Adjusted Eurodollar Rate shall be adjusted automatically as
of the effective date of any change in the Reserve Percentage.
"Agreement" shall mean this Loan Agreement.
"Americana" shall mean Americana Foods Limited Partnership.
"Bankruptcy Code" shall mean Title 11 of the United States
Code, as amended, or any successor act or code.
"Base Rate" shall mean that rate of interest per annum
published by the Lender as its base rate (or equivalent rate)
and which is charged by the Lender from time to time. The Base
Rate may not necessarily be the lowest rate charged by the
Lender.
"Borrower" shall mean and, if more than one, shall refer
jointly and severally to the Person named below together with
each such Person's successors and assigns (provided that no
consent to any succession or assignment shall be inferred
herefrom):
State of Chief
________ Borrower ___ Type of Entity ______________
_________________Executive Offices
TCBY Enterprises, Inc. Corporation Delaware
Little Rock, AR
"Borrower's Address" shall mean:
425 West Capitol Avenue, #1100
Little Rock, Arkansas 72201
Attn: Mr. Gale Law
Fax No.: (501) 688-8284
Telephone No.: (501) 688-8213
"Business Day " shall mean (a) for all purposes other than as
covered by subpart (b) below, any day on whi ch the Lender is
open to carry on its normal commercial lending business and (b)
with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar
Loans, any day that is a Business Day described in subpart (a)
above and that is also a day for trading by and between banks
in United States Dollar deposits in the interbank Eurodollar
market.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, or any corresponding provision or provisions
of any succeeding law.
"Commitment Amount" shall mean the aggregate principal balances
outstanding on Term Note #1 and Term Note #2 on the date hereof
____ plus the Revolving Loan Commitment Amount or such lesser amount
to which the Commitment Amount may be reduced from time to time
pursuant to this Agreement. The recital of a Commitment Amount
does not mean that the Lender shall be obligated to advance
such amount except in strict accordance with the terms,
provisions, and conditions of this Agreement.
"Commitment Fee " shall mean an amount payable to the Lender
based on the unused portion of the Revolving Loan Commitment
Amount which shall be calculated as of the last day of each
June, September, December and March of each calendar year and
as of the Termination Date, beginning June 30, 1995, and shall
equal the amount determined by multiplying (a) the average
daily Revolving Loan Commitment Amount less the average daily
principal balance outstanding on the Revolving Credit Note
during the quarter of the calendar year which ends on that
date, times(b) the product (expressed as a percentage)
determined by multiplying one-quarter of one percent (.25%) by
a fraction, the numerator of which is the actual number of days
contained in the applicable quarter of the calendar year and
the denominator of which is the actual number of days contained
in the applicable calendar year (e.g. 365 or 366); provided,
however, if the effective date of this Agreement does not occur
on the first day of a calendar year quarter or if the
Termination Date occurs on a date other than the last day of
the quarter of the applicable calendar year, then the fraction
used to calculate the Commitment Fee for such quarter shall
have, as its numerator, the actual number of days occurring
during such quarter from and after the effective date of this
Agreement or through the Termination Date, as the case may be.
" Commitment Fee Payment Date " shall mean (a) the tenth (10th)
day of each calendar month following the determination of the
Commitment Fee for the immediately preceding month (or, if such
date is not a Business Day), the first Business Day, beginning
July 10, 1995, and (b) the Revolving Credit Maturity Date.
" Compliance Certificate " shall mean a certificate in the form
of Exhibit A to this Agreement, completed in all appropriate
respects and executed by the chief executive or chief financial
officer of the Borrower.
" Contract Rate " shall mean, as of any date of determination,
either the Revolving Credit Contract Rate or the Term Loan
Contract Rate, as the context may require.
"Current Assets " shall mean, as of any applicable date of
determination, all cash, nonaffiliated customer receivables,
United States government securities, inventories and any other
assets of a Person that should be classified as current in
accordance with GAAP.
" Current Liabilities " shall mean, as of any applicable date of
determination, all liabilities of a Person that should be
classified as current in accordance with GAAP.
"Current Maturities of Long Term Debt" shall mean the principal
portion of current maturities of long term indebtedness of any
Person and current obligations of any Person on long term
capital leases, as determined according to GAAP, for the next
succeeding period of twelve (12) calendar months.
" Debt " shall mean, as of any applicable date of determination,
the sum of: (a) all items of indebtedness, obligation or
liability of a Person, whether matured or unmatured, liquidated
or unliquidated, direct or indirect, absolute or contingent,
joint or several, that should be classified as liabilities in
accordance with GAAP; plus (b) the Guarantee Obligations of
such Person; plus (c) without duplication of any liabilities
described in subpart (a) or __(b) above, all liabilities of such
Person with respect to letters of credit, commercial paper,
banker's acceptances and similar financial transactions.
" Default" shall mean a condition or event which, with the
giving of notice or the passage of time or both, would become
an Event of Default.
" Default Rate" shall mean a fluctuating per annum interest rate
at all times equal to the lesser of (a) the Maximum Legal Rate
(such interest rate to be adjusted simultaneously with any
change in the Maximum Legal Rate) or (b) the sum of the
applicable Contract Rate plus two percent (2.0%); provided,
however, subject to all provisions of Section 2.5 , if at any
time the Default Rate shall be computed on the basis of the
Maximum Legal Rate, any subsequent reduction in the Default
Rate shall not reduce such interest rate thereafter payable
hereunder below the Maximum Legal Rate until the aggregate
amount of such interest that is accrued an d payable equals the
total amount of interest that would have accrued if interest
had at all times been computed solely on the basis of the rate
specified in subpart (b) above. Subject to Section 2.5 hereof,
interest computed at the Default Rate shall be computed on the
basis of a year of 365 days and actual days elapsed. In the
event the laws of the State of Texas are applicable, unless
preempted by Federal law or other state laws now or hereafter
in effect and applicable hereto, the applicable interest rate
ceiling shall be the "indicated rate ceiling" from time to time
in effect under Texas Revised Civil Statutes Annotated, Article
5069-1.04, as amended.
" Disbursement Date " shall mean each day on which the Lender
makes a Revolving Loan under this Agreement.
"Environmental Laws " means any and all federal, state, and
local laws, rules, regulations, orders and requirements
pertaining to health, safety, or the environment, including,
without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. e 9601 et
___ seq ., the Resource Conservation and Recovery Act of 1976, 42
U.S.C. e6901 ___et seq., the Occupational Safety and Health Act of
29 U.S.C. e 651 et seq ., the Clean Air Act, 42 U.S.C. e 7401 et
seq ., the Clean Water Act, 33 U.S.C. e 1251 et seq ., the Toxic
Substances Control Act, 15 U.S.C. e 2601 et seq ., and all other
laws, regulations, and requirements of any governmental
authority or agency having jurisdiction over Borrower or any
other Loan Party or any of their respective properties or
assets, as such laws, regulations, and requirements may be
amended or supplemented from time to time.
"ERISA " shall mean the Employee Retirement Income Security Act
of 1974, as amended, or any successor act or code.
" ERISA Affiliate " shall mean any Subsidiary or subsidiary of a
Loan Party or trade or business (whether or not incorporated)
which is a membe r of a group of which the Borrower or any Loan
Party is a member and which is under common control with the
Borrower or such Loan Party, or within the same affiliated
service group as the Borrower or such Loan Party, within the
meaning of Section 414 of the Code (such rules and regulations
shall also be deemed to apply to foreign corporations and
entities).
"Eurodollar Loan" shall mean any portion of any Revolving Loan
or Term Loan which bears interest at a rate determined with
reference to the Adjusted Eurodollar Rate.
" Event of Default " shall mean the occurrence of any of the
following:
(a) Failure to Pay Indebtedness . If any principal of or
interest on the Note, any fees under this Agreement or any
other Loan Document or any other Indebtedness shall not be
paid within five (5) Business Days after the same becomes
due; or
(b) Misrepresentation . If any warranty or representation of
the Borrower or any other Loan Party in connection with or
contained in this Agreement or any other Loan Document, or
if any financial data or other information now or
hereafter furnished to the Lender by or on behalf of the
Borrower, any Subsidiary or any other Loan Party, shall
prove to be false or misleading in any material respect;
or
(c) Noncompliance with Loan Documents. If the Borrower or any
Subsidiary or any other Loan Party shall fail to perform
any of its obligations and covenants under this Agreement
or under any other Loan Document; or
(d) Noncompliance with Other Agreements . If the Borrower or
Guarantor shall fail to comply with any of the provisions
of any other ag reement with the Lender pursuant to which
the Lender extends credit to the Borrower or the
Guarantor, and such failure shall c ontinue for forty-five
(45) days after written notice from the Lender to the
Borrower of such failure;
(e) Noncompliance with Financial Covenants . If the Borrower
shall fail to perform any financial covenant set forth in
Sections 5.6, 5.7 , 5.8 , and 5.9 of this Agreement, and
same shall be continuing for thirty (30) days;
(f) Other Defaults. If the Borrower or any Material
Subsidiary or any other Loan Party shall default in the
due payment of any of its Material Indebtedness (other
than the Indebtedness, which shall constitute an Event of
Default under subpart (a) above) or in the observance or
performance of any term, covenant or condition in any
agreement or instrument evidencing, securing or relating
to such Material Indebtedness and such default shall be
continued for a period sufficient to permit acceleration
of such Material Indebtedness, whether or not any such
default shall be forgiven or waived by the holder thereof;
or
(g) Judgments . If: (i) there shall be rendered against the
Borrower or any Material Subsidiary or any other Loan
Party, one or more judgments or decrees involving an
aggregate liability of $1,000,000.00 or more, which has or
have become nonappealable and shall remain undischarged,
unsatisfied by insurance or unstayed for more than 10
days, whether or not consecutive; or (ii) a writ of
attachment, sequestration or garnishment against the
property of the Borrower or any Material Subsidiary or any
other Loan Party shall be issued and levied in an action
claiming $1,000,000.00 or more and not immediately
released or appealed and bonded in a manner satisfactory
to the Lender; or
(h) Business Suspension, Bankruptcy, Etc. If the Borrower or
any Material Subsidiary or any other Loan Party shall
voluntarily suspend transaction of its business; or if the
Borrower or any Material Subsidiary or any other Loan
Party shall not pay its debts as they mature or shall make
a general assignment for the benefit of creditors; or
proceedings in bankruptcy, or for reorganization or
liquidation of the Borrower or any Material Subsidiary or
any other Loan Party, under the Bankruptcy Code or under
any other state or federal law for the relief of debtors
shall be commenced by the Borrower or any Material
Subsidiary or any other Loan Party; or any such
proceedings shall be commenced against the Borrower or any
Material Subsidiary or any other Loan Party and shall not
be permanently discharged within ninety (90) days
following the commencement thereof; or a receiver, trustee
or custodian shall be appointed for the Borrower or any
Material Subsidiary or any other Loan Party or for any
substantial portion of its properties or assets; or
(i) ERISA . If any of the following events shall occur: (i)
Borrower, any Loan Party or an ERISA Affiliate, or any of
their agents or representatives shall engage in any
conduct which constitutes a "prohibited transaction" (as
defined in sections 406 or 407 of ERISA or section 4975 of
the Code) which could, in Lender's opinion, be expected to
result in a material liability (as such term is
hereinbelow defined) to Borrower or such Loan Party or any
ERISA Affiliate; (ii) any "accumulated funding deficiency"
(as defined in section 302 of ERISA or section 412 of the
Code), whether or not waived, shall exist with respect to
any PBGC Plan or Multiple Employer Plan, if such
accumulated funding deficiency would give rise to a
material liability of Borrower, any Loan Party or any
ERISA Affiliate; (iii) Borrower, any Loan Party or any
ERISA Affiliate shall apply for or b e granted a funding
waiver under section 302 of ERISA or section 412 of the
Code, which waiver or request for waiver is for a material
amount (as such term is hereinbelow defined) ; (iv) a
Termination Event shall occur with respect to any PBGC
Plan, Multiemployer Plan, or Multiple Employer Plan, which
Termination Event is likely, in Lender's opinion, to give
rise to a material liability of Borrower, any Loan Party
or any ERISA Affiliate; (v) any Lien arising under
sections 302(f) or 4068 of ERISA or section 412(n) of the
Code shall attach to the assets or property of Borrower,
any Loan Party or any ERISA Affiliate which could, in
Lender's opinion, be expected to result in a material
adverse effect; (vi) Borrower, any Loan Party or any ERISA
Affiliate shall permit, through action or failure to act,
any Pension Plan to fail to meet the requirements of
section 401(a) or 403(a) of the Code and such failure
would give rise to a material liability of Borrower, any
Loan Party or any ERISA Affiliate; (vii) Borrower, any
Loan Party or any ERISA Affiliate shall fail to pay when
due any amount owed by it to any Pension Plan,
Multiemployer Plan, Welfare Plan, government agency, or
other Person that, when aggregated with all other such
amounts in default, exceeds $1,000,000.00;
(viii) Borrower, any Loan Party or any ERISA Affiliate
shall be obligated to contribute to a Pension Plan or
Welfare Plan (other than a Multiemployer Plan or a
Multiple Employer Plan) whose Accumulated Benefit
Obligation (as defined in FASB 87) exceeds the fair market
value of its assets by more than $1,000,000.00; (ix) any
other event or condition shall occur or exist with respect
to any Pension Plan, Multiemployer Plan, or Welfare Plan
which, either alone or in the aggregate, either gives rise
or, in Lender's opinion, is likely to give rise, to a
material liability of Borrower, any Loan Party or any
ERISA Affiliate; or (x) any event or condition described
in (i) through (ix) above (determined without regard to
whether the event or condition taken alone would or could
result in a material liability) shall occur or exist with
respect to a Pension Plan, Welfare Plan, or Multiemployer
Plan which individually or in combination with one or more
of any events described in (i) through (ix) above
(determined without regard to whether the event or
condition taken alone would or could result in a material
liability), if any, would likely subject Borrower, any
Loan Party or any ERISA Affiliate to any material excise
tax, penalty, addition to tax or other liability. For
purposes of this definition, the terms "material
liability" and "material amount" mean any liability or
amount, as applicable, which exceeds $1,000,000.
"Financial Statements " shall mean all those balance sheets,
earnings statements and other financial data (whether of the
Borrower, any Subsidiary, any other Loan Party or otherwise)
which have been or may hereafter be furnished to the Lender in
connection with this Agreement or the transactions contemplated
hereby including, but not limited to, the consolidated balance
sheets, income statements and statements of cash flow and
consolidating balance sheets and income statement of the
Borrower and the Subsidiaries as of the fiscal year ending
November 30, 1994, and the fiscal quarter ending as of February
28, 1995.
" gAAP " shall mean, as of any applicable date of determination,
generally accepted accounting principles consistently applied.
" Good faith " shall have the same meaning
ascribed to such term in Section 1.201(19) of the UCC.
" Guarantee Obligations " shall mean, as of any applicable date
of determination, all items of obligation or liability of a
Person which arise, directly or indirectly, from any guarantee
or other agreement or undertaking by which such Person is or
becomes, in any way, responsible for the obligations of another
Person, whether by agreement to purchase the indebtedness of
such other Person, agreement to furnish funds to any such other
Person (whether throu gh the furnishing of goods, supplies or
services, by way of Stock purchase, capital contribution,
advance or loan or otherwise) for the purpose of paying or
discharging (or causing the payment or discharge of) the
indebtedness or obligations of any other Person (except for the
endorsement of negotiable instruments in the ordinary course of
business for deposit or collection and, with respect to the
Borrower or any Subsidiary, the continuing liability of any
such Person, as lessee, pursuant to an operating lease that is
assigned to and assumed by a franchisee in connection with such
franchisee's acquisition of a yogurt store from the Borrower or
such Subsidiary.
" Guarantor " shall mean each and every Person (other than the
Borrower) who may now or hereafter be or become obligated or
liable for the payment or performance of all or any portion of
the Indebtedness including, without limitation, the following
Person:
_________ Guarantor Address for Notice
Americana Foods Limited Partnership 425 West Capitol
Avenue, #1100
Little Rock, Arkansas 72201
Attn: Mr. Gale Law
Fax No.: (501) 688-8284
Telephone No.: (501) 688-8213
" Guaranty " shall mean each and every agreement or undertaking
on the part of any Person other than the Borrower to be or
become oblig ated or liable for the payment or performance of
all or any portion of the indebtedness together with all
renewals, extensions, increases, restatements, amendments and
other modifications made from time to time with respect thereto
including, without limitation, those executed in favor of the
Lender on the dates and by the Person named below:
_________ Guarantor Date
Americana Foods Limited Partnership June 11, 1993,
amended and restated November 28,
1994
" Hazardous Substance " 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.
" Indebtedness " shall mean (a) all loans, advances,
indebtedness, obligations and liabilities of the Borrower to
the Lender under this Agreement or any other Loan Document, (b)
all other loans, advances, indebtedness, obligations and
liabilities whatsoever of the Borrower to the Lender, whether
liquidated or unliquidated, direct or indirect, absolute or
contingent, joint or several, due or to become due, now
existing or hereafter arising, and (c) all indebtedness,
obligations, and liabilities now or hereafter owing to the
Lender by any other Loan Party under any Loan Document whether
liquidated or unliquidated, direct or indirect, absolute or
contingent, joint or several, due or to become due.
" Interest Period " shall mean, with respect to each Eurodollar
Loan, the period commencing on the date of the making or
continuation of or conversion to such Eurodollar Loan and
ending thirty, sixty, ninety, or one hundred eighty days
thereafter, as the Borrower may elect (but subject to Section
2.11 ) in the applicable Notice of Eurodollar Conversion;
________ provided that:
(i) any Interest Period (other than an Interest Period
determined pursuant to clause (ii) below) that would otherwise
end on a day that is not a Business Day shall be extended to
the next succeeding Business Day;
(ii) any Interest Period applicable to any portion of and
Revolving Loan or the Term Loan that would otherwise end after
the final maturity date of the Revolving Loan or Term Loan, as
the case may be, shall end on said final maturity date; and
(iii) notwithstanding clause (ii) , no Interest Period
applicable to a Eurodollar Loan shall have a duration of less
than thirty days, and if any Interest Period applicable to a
Eurodollar Loan would be for a shorter period, such Interest
Period shall not be available hereunder.
Notwithstanding anything to the contrary stated in clause (i)
above, with respect to any Interest Period that is applicable
to any Eurodollar Loan which accrues interest at the Interbank
Offered Rate that is determined in accordance with subpart (b)
of the definition of such term (as such term is defined in the
definition of "Adjusted Eurodollar Rate" set forth in Section
1.1 above) then: (aa) any Interest Period (other than an
Interest Period determined pursuant to clause (ii) above) that
would otherwise end on a day that is not a Business Day shall
be extended to the next succeeding Business Day unless such
Business Day falls in the next calendar month, in which case
such Interest Period shall end on the immediately preceding
Business Day; and (bb) any Interest Period that begins on the
last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall, subject to clause
(ii) above, end on the last Business Day of a calendar month.
" Lender " shall mean Bank One, Texas, N.A., a national banking
association, and its successors and assigns.
" Lender's Address" shall mean:
a. For payment of the Indebtedness:
Bank One, Texas, N.A.
1717 Main Street, 3rd Floor
Dallas, Texas 75201
Attn: Gina Norris and Lisa Peterson
b. For notice purposes:
Bank One, Texas, N.A.
1717 Main Street, 3rd Floor
Dallas, Texas 75201
Attn: Gina Norris and Lisa Peterson
Fax No. for Lisa Peterson: (214) 290-2683
Telephone No. for Lisa Peterson: (214) 290-2614
Fax No. for Gina Norris: (214) 290-2765
Telephone No. for Gina Norris: (214) 290-2713
" Lien " shall mean any valid and enforceable interest in any
property, whether real, personal or mixed, securing an
indebtedness, obligation or liability owed to or a claim by any
Person other than the owner of such property, whether such
interest is based on the common law or any statute or contract
and including, but not limited to, a security interest, pledge,
mortgage, assignment, conditional sale, trust receipt or lease,
consignment or bailment for security purposes.
" Loans " shall mean, collectively, any or all
Revolving Loans and Term Loans.
" Loan Documents " shall mean, collectively, this Agreement, the
Note, the Guaranty and any and all other agreements,
instruments, certificates and other documents executed or
delivered or contemplated to be executed or delivered in
connection with this Agreement or the transactions that are the
subject matter hereof, as such agreements, instruments,
certificates and other documents may be renewed, extended,
restated, supplemented, increased, amended or otherwise
modified from time to time.
" Loan Party " shall mean the Borrower, the Guarantor and each
other Person who shall be liable for the payment or performance
of all or any portion of the Indebtedness or who shall own any
property that is subject to (or purported to be subject to) a
Lien which secures all or any portion of the Indebtedness.
" Loan Purposes" shall mean:
(a) with respect to the indebtedness evidenced by Term Note
#1, the refinancing of the indebtedness evidenced by the
following described instruments:
(i) Promissory Note dated as of June 1, 1988,
executed by the Borrower and the Guarantor and made
payable to the order of First Interstate Bank of Dallas in
the original principal amount of $9,000,000.00, with an
outstanding principal balance as of the date of this
Agreement equal to $6,030,444.20;
(ii) Promissory Note dated as of June 1, 1988,
executed by the Borrower and the Guarantor and made
payable to the order of First Interstate Bank of Dallas in
the original principal amount of $10,000,000.00, with an
outstanding principal balance as of the date of this
Agreement equal to $5,838,643.94;
(iii) Promissory Note dated as of June 1, 1988,
executed by the Borrower and the Guarantor and made
payable to the order of First Interstate Bank of Dallas in
the original principal amount of $2,967,671.62, with an
outstanding principal balance as of the date of this
Agreement equal to $975,912.49; and
(iv) Promissory Note dated as of June 1, 1988,
executed by the Borrower and made payable to the order of
First Interstate Bank of Dallas in the original principal
amount of $3,314,371.00, with an outstanding principal
balance as of the date of this Agreement equal to
$1,764,776.01; and
(b) with respect to the indebtedness evidenced by Term Note
#2, to finance the construction of new expanded plant
facilities owned by Americana located in Redbird
Industrial Park West, City of Dallas, Dallas County,
Texas, which costs are required to be capitalized in
accordance with GAAP.
(c) with respect to the indebtedness evidenced by the
Revolving Credit Note, to provide working capital needs
incurred by the Borrower in the ordinary course of its
business including, but not limited to, expenditures made
to acquire Inventory, to pay distribution allowances to
retail grocers for shelf space and to pay advertising
expenses.
" Material Indebtedness " shall mean (a) any single item of Debt
of any Person in an amount equal to $250,000.00 or more, (b)
any series of related items of Debt of any Person which in the
aggregate equal $500,000 or more and/or (c) the total Debt owed
by any Person to the same creditor or obligor (or group of
creditors or obligors) if the aggregate amount of such Debt
equals or exceeds $500,000 to the extent, but only to the
extent, that the Debt described in clause (a), (b) or (c) above
was incurred in connection with a loan or other financial
transaction (including, without limitation, liabilities arising
in connection with letters of credit, commercial paper,
banker's acceptances and similar financial transactions.
" Material Subsidiary" shall mean (unless otherwise agreed to by
the Lender in writing): (a) the Subsidiaries specifically
identified below; (b) each other Subsidiary, whether now or
hereafter existing, which may at any time hereafter, hold
assets with a book value that is equal to or greater than five
percent (5%) of the book value of all assets held by the
Borrower and all Subsidiaries on an aggregate basis; and (c)
each other Subsidiary which holds assets, performs services or
conducts a business or other operation that the Lender in good
faith believes could, if adversely affected, have a material
adverse effect on the financial conditions, operations or
business of the Borrower or any other Material Subsidiary:
Americana Foods Limited Partnership, a Texas limited
partnership
Carlin Manufacturing, Inc., an Arkansas corporation
Food Services Leasing, Inc., an Arkansas corporation
FSL, Inc., a Nevada corporation
Riverport Equipment and Distribution Company, Inc., an
Arkansas corporation
TCBY of Georgia, Inc., a Georgia corporation
TCBY of Texas, Inc., a Texas corporation
TCBY Systems, Inc., an Arkansas corporation
Without limiting the foregoing, it is understood that, as of
the date of this Agreement, the following Subsidiaries do not
constitute Material Subsidiaries: American Best Care, Inc.;
For Future Use VI, Inc.; TCBY International, Inc.; TCBY
International Foreign Sales Corporation; TCBY of Aruba, Inc.;
TCBY of Saudi Arabia, Inc.; TCBY of Qatar, Inc.; TCBY of
Mexico, Inc.; and TCBY United Kingdom, Inc.
" Maturity Date" shall mean, as applicable, the Revolving Credit
Maturity Date or applicable Term Loan Maturity Date.
" Maximum Legal Rate " shall mean the maximum rate of interest
per annum from time to time permitted under applicable law
after taking into account, to the extent required by applicable
law, any and all relevant payments, charges and calculations.
" Multiemployer Plan" shall mean a multiemployer plan as defined
in sections 3(37) or 4001(a)(3) of ERISA or Section 414 of the
Code (or any similar type of plan established or regulated
under the laws of any foreign country) to which the Borrower or
any Loan Party or any ERISA Affiliate is making, is required to
make, or has made, or is accruing, has accrued, or is required
to accrue or have accrued, an obligation to make contributions.
" Multiple Employer Plan " shall mean any employee benefit plan
within the meaning of section 3(3) of ERISA (or any similar
type of plan established or regulated under the laws of any
foreign country) other than a Multiemployer Plan, to which the
Borrower or any other Loan Party or any ERISA Affiliate and an
employer other than an ERISA Affiliate or Borrower or any Loan
Party contribute, is required to contribute, or is required to
accrue an obligation to contribute.
" Net Income " shall mean, as of any applicable date of
determination, earnings of a Person from continuing operations
after deduction of income taxes for such period and excluding
any nonrecurring or extraordinary items, all as determined in
accordance with GAAP.
" Noncash Charges " shall mean, as of any applicable date of
determination, depreciation, amortization, deferred income
taxes, and additions to reserves (insurance, taxes, bad debt,
insurance, or otherwise) of a Person, all as determined in
accordance with GAAP.
"Note " shall mean and refer collectively to the Revolving
Credit Note, the Term Note #1 and the Term Note #2 or,
separately, to each such Note, as the context requires.
" Notice of Borrowing " shall have the meaning assigned to such
term in ___________ Section 2.9.
" Notice of Eurodollar Conversion " shall have the meaning
assigned to such term in Section 2.9.
" PBGC " shall mean the Pension Benefit Guaranty Corporation or
successor thereof established pursuant to ERISA.
" PBGC Plan " shall mean any Pension Plan subject to Title IV of
ERISA (or any similar type of plan established or regulated
under the laws of any foreign country).
" Pension Plan " shall mean any employee pension benefit plan as
defined in section 3(2) of ERISA (or any similar type of plan
established or regulated under the laws of any foreign country)
in which any personnel of Borrower or any Loan Party or any
ERISA Affiliate participate, excluding any Multiemployer Plan,
including any plan established or maintained by Borrower or any
Loan Party or any ERISA Affiliate, or to which the Borrower or
any Loan Party or any ERISA Affiliate contributes, is required
to contribute, accrues an obligation to contribute, or is
required to accrue an obligation to contribute, under the laws
of any foreign country to the extent applicable.
" Permitted Liens" shall mean:
(a) Liens and encumbrances in favor of the Lender;
(b) Liens for taxes, assessments or other governmental charges
incurred in the ordinary course of business a nd not yet past
due or being contested in good faith by appropriate proceedings
and, if reasona bly requested by the Lender, bonded in a manner
satisfactory to the Lender;
(c) Liens not delinquent created by statute in connection with
worker's compensation, unemployment insurance, social security
and similar statutory obligations;
(d) Liens of mechanics, materialmen, carriers, warehousemen,
landlords or other like statutory or common law liens securing
obligations incurred in good faith in the ordinary course of
business that are not yet due and payable;
(e) Encumbrances consisting of zoning restrictions,
rights-of-way, easements or other restrictions on the use of
the properties of the Borrower and/or any Subsidiary, none of
which encumbrances impairs the use of such property in the
operation of the business for which it is used or intended to
be used and none of which is violated in any respect by any
existing or proposed structure or use to the extent that such
impairment could materially and adversely affect the financial
condition or business of the Borrower and/or any Material
Subsidiary;
(f) Liens encumbering the properties and/or assets of the
Borrower and/or any of the Subsidiaries, which secure Debt up
to, but not in excess of, $5,000,000.00 in the aggregate
provided that such Liens secure purchase money obligations
incurred by the Borrower or a Subsidiary in good faith in the
ordinary course of its business and the obligations that are
secured are not yet due and payable;
(g) UCC Financing Statements filed by the lessor of goods
pursuant to Section 9.408 of the UCC (or comparable provision
of any other applicable Uniform Commercial Code), as a
precautionary matter (nothing contained in this subpart shall,
however, be deemed to authorize the Borrower or any Subsidiary
to enter into a lease which is actually intended as security
except to the extent such financing transaction would otherwise
be permitted pursuant to this Agreement); and
(h) Existing Liens described as Permitted Liens on Schedule
___ 1.1 attached hereto.
" Person " shall mean any individual, corporation, partnership,
joint venture, association, trust, unincorporated association,
joint stock company, government, municipality, political
subdivision or agency or other entity.
" Replacement CapEx " shall mean, as of any applicable date of
determination, the sum of all capital expenditures incurred by
a Person to maintain and/or replace existing plant, property,
and equipment.
" Revolving Credit Contract Rate " shall mean, as of any date of
determination, the fluctuating per annum rate of interest which
equals the lesser of the Maximum Legal Rate (such interest rate
to be adjusted simultaneously with any change in the Maximum
Legal Rate), or: (a) with respect to Stated Rate Loans, the
Base Rate less three-quarters of one percent (0.75%) (such
interest rate to be adjusted simultaneously with any change in
the Base Rate); or (b) one percent (1.0%) plus the applicable
Adjusted Eurodollar Rate; provided, however, subject to all
provisions of Section 2.5 , if at any time the Revolving Credit
Contract Rate payable hereunder shall be computed on the basis
of the Maximum Legal Rate, any subsequent reduction in the
Revolving Credit Contract Rate shall not reduce such interest
rate thereafter payable below the Maximum Legal Rate until the
aggregate amount of such interest accrued and payab le under
this Agreement equals the total amount of interest which would
have accrued if such interest had been at all times computed
sol ely on the basis of the applicable rates specified in
subparts (a) and (b) above. Subject to the provisions of
Section 2.5 hereof, interest computed at the Revolving Credit
Contract Rate shall be computed on the basis of a year of 365
days and actual days elapsed. In the event the laws of the
State of Texas are applicable, unless preempted by federal law
or other state laws now or hereafter in effect and applicable
hereto, the applicable interest rate ceiling shall be the
" indicated rate ceiling " from time to time in effect under
Texas Revised Civil Statutes Annotated, Article 5069-1.04, as
amended.
" Revolving Credit Note " shall mean that certain Revolving
Credit Note dated April 7, 1995 executed by the Borrower
payable to the order of Lender in the maximum principal amount
of $5,000,000.00 together with any and all renewals,
extensions, restatements, supplements, increases, amendments
and other modifications made from time to time with respect
thereto.
" Revolving Credit Interest Payment Date " shall mean: (a) with
respect to a Eurodollar Loan, the date upon which the Interest
Period therefor ends; and (b) with respect to a Stated Rate
Loan, the 1st day of each calendar month, commencing on May 1,
1995, and continuing regularly and monthly thereafter for the
term of such Stated Rate Loan; provided, however, if any such
payment date does not occur on a Business Day, then the
Revolving Credit Interest Payment Date shall be the next
succeeding Business Day.
" Revolving Credit Maturity Date " means April 30, 1996, or such
earlier date on which the entire unpaid principal amount of the
Revolving Loans becomes due and payable whether by the lapse of
time, the occurrence of the Terminati on Date, acceleration or
otherwise; provided, however, if any such date is not a
Business Day, then the Revolving Credit Maturity Date shall be
the next succeeding Business Day.
" Revolving Loan " shall mean an advance made by the Lender to
the Borrower under Section 2.2 of this Agreement.
Collectively, all such advances are referred to as "Revolving
Loans".
" Revolving Loan Commitment Amount " shall mean $5,000,000.00 or
such lesser amount to which the Revolving Loan Commitment
Amount may be reduced from time to time pursuant to this
Agreement. The recital of a Revolving Loan Commitment Amount
does not mean that the Lender shall be obligated to advance
such amount.
" Stated Rate " shall mean the rate of interest specified in
subpart (a) of the definition of Revolving Credit Contract Rate
or Term Loan Contract Rate, as applicable.
""Stated Rate Loan" shall mean the portion or portions of any
Revolving Loan or Term Loan which bears interest at a rate
which is determined with reference to the Base Rate.
" Stock " shall mean any capital stock or other equity rights,
bonds, notes, or other instruments convertible into capital
stock or other equity interests and options, warrants or other
rights to acquire capital stock or other equity interests.
" Subsidiaries " shall mean any corporation or other entity of
which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or
other Persons performing similar functions are, at the time,
directly or indirectly owned, collectively, by the Borrower and
any Subsidiaries of the Borrower (the term includes
Subsidiaries of Subsidiaries and so on), including, without
limitation, those set forth on Schedule 4.5.
"Tangible Net Worth " shall mean, as of any applicab le date of
determination, the excess of (a) the book value of all assets
of a Person (other than patents, patent rights, trademarks,
trade names, franchises, copyrights, licenses, goodwill,
research and development expenses unless prepaid and similar
intangible assets) after all appropriate deductions (including,
without limitation, reserves for doubtful receivables,
obsolescence, depreciation and amortization), all as determined
in accordance with GAAP, over (b) all Debt (other than
Guarantee Obligations and contingent liabilities arising with
respect to letters of credit) of such Person.
" TCBY" shall mean TCBY Enterprises, Inc.
" Termination Date " shall mean April 30, 1996 or such earlier
date on which the Borrower or the Lender shall permanently
terminate the Lender's commitment under this Agreement to make
Revolving Loans.
" Termination Event " shall mean (i) a "reportable event" as
defined in section 4043 of ERISA (or which would be so defined
if a plan were subject to Title IV of ERISA); (ii) the
withdrawal of the Borrower or any Loan Party or any ERISA
Affiliate from a Multiple Employer Plan during a plan year in
which it was a "substantial employer" as defined in 4001(a)(2)
of ERISA; (iii) the filing of a notice of intent to terminate a
PBGC Plan or a Multiple Employer Plan or the treatment of a
plan amendment as a termination under section 4041(c) of ERISA;
(iv) the institution of proceedings to terminate a PBGC Plan or
a Multiple Employer Plan by the PBGC; (v) any other event or
condition which might constitute grounds under section 4042 of
ERISA for the termination of, or the appointment of a trustee
to administer, any PBGC Plan or a Multiple Employer Plan; (vi)
the occur rence of an event described in section 4068(f) of
ERISA with respect to a PBGC Plan; (vii) the occurrence of an
event described in sections 302(f), 4069, 4070, or 4212(c) of
ERISA or sections 401(a)(29) or 412(n) of the Code, with
respect to a PBGC Plan, Multiple Employer Plan, or
Multiemployer Plan; (viii) any complete or partial withdrawal
from a Multiemployer Plan as defined in sections 4203 or 4205
of ERISA, any termination of a Multiemployer Plan within the
meaning of section 4041A of ERISA or any Multiemployer Plan
being insolvent or in reorganization status under section 4241
or 4245 of ERISA; or (ix) any occurrence similar to any of
those referred to clauses (i) to (viii) above under the
applicable laws of a foreign country.
" Term Loan " shall mean the advances made by the Lender to the
Borrower under Section 2.2 of this Agreement.
" Term Loan Contract Rate " shall mean, as of any date of
determination, the fluctuating per annum rate of interest which
equals the lesser of the Maximum Legal Rate (such interest rate
to be adjusted simultaneously with any change in the Maximum
Legal Rate) or: (a) with respect to Stated Rate Loans, the
Base Rate less three quarters of one percent (0.75%) (such
interest rate to be adjusted simultaneously with any change in
the Base Rate); and (b) with respect to Eurodollar Loans, one
percent (1.0%) plus the applicable Adjusted Eurodollar Rate;
provided, however, subject to all provisions of Section 2.5, if
at any time the Term Loan Contract Rate payable hereunder shall
be computed on the basis of the Maximum Legal Rate, any
subsequent reduction in the Term Loan Contract Rate shall not
reduce such interest rate thereafter payable below the Maximum
Legal Rate until the aggregate amount of such interest accrued
and payable under this Agreement equals the total amount of
interest which would have accrued if such interest had been at
all times co mputed solely on the basis of the applicable rates
specified in subparts (a), (b) and (c) above. Subject to the
provisions of Section 2.5 hereof, interest computed at the Term
Loan Contract Rate shall be computed on the basis of a year of
365 days and actual days elapsed. In the event the laws of the
State of Texas are applicable, unless preempted by federal law
or other state laws now or hereafter in effect and applicable
hereto, the applicable interest rate ceiling shall be the
" indicated rate ceiling " from time to time in effect under
Texas Revised Civil Statutes Annotated, Article 5069-1.04, as
amended.
" Term Loan Interest Payment Date " shall mean: (a) with respect
to a Eurodollar Loan, the date upon which the Interest Period
therefor ends; and (b) with respect to a Stated Rate Loan, the
1st day of each calendar month, commencing on May 1, 1995, and
continuing regularly and monthly thereafter for the term of
such Stated Rate Loan; provided, however, if any such payment
date does not occur on a Business Day, then the Term Loan
Interest Payment Date shall be the next succeeding Business
Day.
" Term Loan Maturity Date" shall mean:
(a) with respect to the portion of the Term Loan evidenced by
Term Note #1, June 1, 2000;
(b) with respect to the portion of the Term Loan evidenced by
Term Note #2, December 31, 2001; or
(c) whether or not any such portion of the Term Loan is
evidenced by Term Note #1 or Term Note #2, such earlier
date on which the entire unpaid principal amount of such
portion of the Term Loan shall become due and payable
whether by the lapse of time, acceleration or otherwise;
provided, however, if such date is not a Business Day, then the
Term Loan Maturity Date shall be the next succeeding Business
Day.
" Term Note #1 " shall mean that certain Term Promissory Note,
dated June 11, 1993 executed by the Borrower payable to the
order of the Lender in the maximum principal amount of
$14,609,776.64 together with all renewals, extensions,
restatements, supplements, increases, amendments and other
modifications made from time to time with respect thereto.
" Term Note #2 " shall mean that certain Term Promissory Note,
dated November 28, 1994 executed by the Borrower payable to the
order of the Lender in the maximum principal amount of
$7,500,000.00 together with all renewals, extensions,
restatements, supplements, increases, amendments and other
modifications made from time to time with respect thereto.
" UCC " shall mean the Uniform Commercial Code as in effect in
the State of Texas or as in effect in any other state, the laws
of which are required by Section 9.103 of the Texas UCC to be
applied, as any such UCC may be amended from time to time.
" Welfare Plan " shall mean an employee welfare benefit plan as
defined in section 3(1) of ERISA (or any similar type of plan
established or regulated under the laws of any foreign country)
in which any personnel of Borrower or any Loan Party or any
ERISA Affiliate participate, excluding any Multiemployer Plan,
but including any such plan established or maintained by
Borrower, any Loan Party or any ERISA Affiliate, or to which
the Borrower, any Loan Party or any ERISA Affiliate
contributes, is required to contribute, accrues an obligation
to contribute, or is required to accrue an obligation to
contribute, under the laws of any foreign country.
1.2. Accounting Terms . All accounting terms not specifically
defined in this Agreement shall be construed in accordance with
GAAP.
1.3. Singular and Plural . Where the context herein requires, the
singular number shall be deemed to include the plural, and vice
versa.
SECTION 2. COMMITMENT, INTEREST AND FEES.
2.1. Commitment . Subject to the terms and conditions of this
Agreement, the Lender agrees to make credit available to the
Borrower of such amounts as the Borrower shall request pursuant
to this Section 2 at any time from the date of this Agreement
until the Termination Date, up to an aggregate principal amount
outstanding at any time not to exceed the Commitment Amount;
provided, however, that each Disbursement Date under this
Agreement must be a Business Day, and Lender shall have no
obligation to disburse any Loan if the amount thereof is less
than $500,000.
2.2 _______________ Revolving Loans.
2.2.1 Notice . The Borrower shall give the Lender at least
one (1) Business Days' prior written notice of the
Borrower's desire for a Revolving Loan that is also a
Stated Rate Loan. Such notice shall be signed by an
authorized officer of the Borrower and shall specify the
proposed Disbursement Date and the principal amount of the
proposed advance for such Revolving Loan. Notice of the
Borrower's desire for a Eurodollar Loan shall be given in
accordance with Section 2.9.
2.2.2 Lender Obligations . The Lender agrees to make the
Revolving Loan on the Disbursement Date as set forth in a
notice to the Lender from the Borrower conforming to the
requirements of Section 2.2.1 by crediting TCBY
Enterprises, Inc., Account No. ___________ maintained by
the Borrower with the Lender or any substitute deposit
account approved by the Lender in writing, with the amount
of such Revolving Loan; provided, however, that the Lender
shall not be so obligated if:
(a) any of the conditions precedent set forth in
Section 3 of this Agreement shall not have been
satisfied or waived by the Lender in accordance with
Section 8.3 of this Agreement;
(b) such proposed Revolving Loan would cause the
aggregate unpaid principal amount of the Revolving
Loans outstanding under this Agreement to exceed the
Revolving Loan Commitment Amount;
(c) such Revolving Loan would cause the sum of the
aggregate unpaid principal amount of the Revolving
Loans then outstanding plus the aggregate unpaid
principal balance of the Term Loans to exceed the
Commitment Amount; or
(d) a Default or Event of Default has occurred (or
will result therefrom) which has not been waived by
Lender in writing in accordance with Section 8.3.
2.2.3 Revolving Credit Note . The Revolving Loans shall be
evidenced by the Revolving Credit Note, and the same shall
be due and payable on the Revolving Credit Maturity Date.
The date and amount of each Revolving Loan made by the
Lender and each repayment of principal thereon received by
the Lender shall be recorded by the Lender in its records,
or at, the option of the Lender, on a schedule attached to
the Revolving Credit Note. The aggregate unpaid principal
amounts so recorded by the Lender shall constitute the
best evidence of the principal amount owing and unpaid on
the Revolving Credit Note; provided, however, that the
failure by the Lender to so record any such amount or any
error in so recording any such amount (whether on a
schedule attached to the Revolving Credit Note or
otherwise) shall not l imit or otherwise affect the
obligations of the Borrower under this Agreement or the
Revolving Credit Note to repay the principal amount of all
of the Revolving Loans together with all interest accrued
or accruing thereon.
2.2.4 Interest . Subject to the provisions of Section 2.5
below, the Revolving Loans shall bear interest on the
principal balance from time to time outstanding at the
Revolving Credit Contract Rate (and after the Revolving
Credit Maturity Date, at the Default Rate). Interest on
the Revolving Loans, to the extent then accrued, shall be
payable on each Revolving Credit Interest Payment Date.
2.2.5 M andatory Prepayments . Notwithstanding anything
contained in this Agreement or the Revolving Credit Note
to the contrary, Borrower shall prepay the entire unpaid
principal balance outstanding on the Revolving Credit
Note, together with all accrued unpaid interest thereon,
at least one time during each twelve consecutive calendar
months commencing with the twelve consecutive month period
that ends on the first anniversary date of this Agreement,
and following such prepayment, the Borrower shall not
request the disbursement of any Revolving Loan, and no
Revolving Loan shall be made, for a period of thirty (30)
days following the date on which the entire principal
balance and all accrued unpaid interest on the Revolving
Credit Note is fully prepaid, as hereinabove required.
2.3. _________ Term Loan.
2.3.1. Term Facility . Subject to and on the terms and
conditions of this Agreement, the Lender hereby agrees to
make the Term Loan, as evidenced by Term Note #1 and Term
Note #2. The portion of the Term Loan evidenced by Term
Note #1 was initially funded in whole as a single
Eurodollar Loan with a ninety (90) day Interest Period.
That portion of the Term Loan evidenced by Term Note #2
was initially funded in whole as a single advance on or
before December 30, 1994.
2.3.2 Note . The Term Loan shall be evidenced by Term Note
#1 and Term Note #2, and the same shall be due and payable
in installments as provided in each such Note with the
entire unpaid principal balance and all accrued unpaid
interest on each such Note being due and payable on the
Term Loan Maturity Date that is applicable thereto.
2.3.3 Interest . Subject to the provisions of Section 2.5
below, the portions of the Term Loan evidenced by Term
Note #1 and Term Note #2 shall, respectively, bear
interest on the principal balance from time to time
outstanding at the applicable Term Loan Contract Rate
until the applicable Term Loan Maturity Date (and after
the applicable Term Loan Maturity Date, at the Default
Rate). Interest on the Term Loan shall be payable, to the
extent then accrued, on each Term Loan Interest Payment
Date.
2.4. Renewals and extensions . Renewals and extensions, if any, of
the Loan, or any portion thereof, shall be at the Lender's
discretion and shall be evidenced by such documents and
instruments as the Lender may require in its sole discretion.
The Lender shall not be obligated to accommodate any such
renewals or extensions.
2.5. Maximum Interest . The following provisions shall control this
Agreement, the Note and the other Loan Documents:
(a) No agreements, conditions, provision or stipulations
contained in this Agreement or in any other Loan Document,
or the occurrence of a Default or an Event of Default, or
the exercise by the Lender of the right to accelerate the
payment of the maturity of principal or interest, or to
exercise any option whatsoever contained in this Agreement
or any other Loan Document, or the arising of any
contingency whatsoever, shall entitle the Lender to
collect, in any event, interest exceeding the maximum
amount allowed from time to time by applicable state or
federal laws as now or as may hereinafter be in effect
(the " Maximum Amount ") , and in no event shall the
Borrower or any other Loan Party be obligated to pay
interest exceeding the Maximum Amount, and all agreements,
conditions or stipulations, if any, which may in any event
or contingency whatsoever operate to bind, obligate or
compel the Borrower or any other Loan Party to pay
interest exceeding the Maximum Amount shall be without
binding force or effect, at law or in equity, to the
extent only of the excess of interest over such Maximum
Amount. In the event any interest is charged or collected
in excess of the Maximum Amount (the " Excess "), the
Borrower and each other Loan Party acknowledge, agree and
stipulate that any such amount shall be the result of an
accidental and bona fide error, and any such charge shall
be canceled and any such Excess that is collected shall
be, first, applied to reduce the principal of any
obligations due, and second, returned to the Borrower or
to such other Person who may be entitled thereto by law,
it being the intention of the parties hereto not to enter
at any time into an usurious or otherwise illegal
relationship. The parties hereto and each other Loan
Party recognize that with fluctuations in the Base Rate
and the Adjusted Eurodollar Rate from time t o time an
unintentional result could inadvertently occur. By the
execution of this Agreement, the Borrower and each other
Loan Party covenant that (i) the cancellation, credit or
return of any Excess shall constitute acceptance of such
Excess, and (ii) neither the Borrower nor any other Loan
Party shall seek or pursue any other remedy, legal or
equitable, against the Lender based, in whole or in part,
upon the charging or receiving of any interest in excess
of the Maximum Amount. For the purpose of determining
whether or not any Excess has been contracted for, charged
or received by the Lender, all interest at any time
contracted for, charged or received by the Lender in
connection with the Borrower's obligations or any other
Loan Party's obligations shall be amortized, prorated,
allocated and spread in equal parts during the entire term
of this Agreement and the other Loan Documents.
(b) The provisions of Section 2.5(a) shall be deemed to be
incorporated into every Loan Document or communication
relating to the Indebtedness, whether or not any provision
of Section 2.5(a) is referred to therein. All such
documents and communications and all figures set forth
therein shall, for the sole purpose of computing the
extent of the obligations asserted by the Lender
thereunder, be automatically recomputed by the Borrower or
any other Loan Party, and by any court considering the
same, to give effect to the adjustments or credits
required by Section 2.5(a).
(c) If the applicable state or federal law is amended in the
future to allow a greater amount of interest to be charged
under this Agreement or any other Loan Document than is
presently allowed by applicable state or federal law, then
the limitations on interest hereunder and thereunder shall
be increased to the maximum allowed by applicable state or
federal law, as amended, which increase shall be effective
hereunder on the effective date of such amendment, and all
interest charges owing to the Lender by reason thereof
shall be payable upon demand.
(d) The provisions of Chapter 15 of the Texas Credit Code
(Vernon's Texas Civil Statutes), Article 5069-15, as
amended, are specifically declared by the parties hereto
not to be applicable to this Agreement or any of the other
agreements executed in connection herewith or therewith or
to the transactions contemplated hereby or thereby.
2.6. ____ Fees.
2.6.1. Preparation Fees . Subject to Section 2.5 ,
contemporaneously with the execution of this Agreement,
the Borrower shall pay to the Lender the amount of the
Lender's expenses (including attorney's fees and
disbursements, which shall not exceed $7,500) incurred by
the Lender in connection with the preparation of this
Agreement and other Loan Documents.
2.6.2 Commitment Fee. Subject to Section 2.5, the Borrower
agrees to pay the Commitment Fee to the Lender on each
Commitment Fee Payment Date.
2.7 Changes in Commitment and Prepayments.
2.7.1. Termination or Reduction in Commitment Amount . The
Commitment Amount shall be reduced automatically at the
time and in the amount of each payment or prepayment of
principal made on the Term Loan whether such payment or
prepayment is voluntary or involuntary. In addition to
the mandatory reductions of the Commitment Amount, the
Borrower may, at any time and from time to time, upon at
least five (5) Business Days' prior written notice
received by the Lender, permanently terminate the Lender's
commitment to make Revolving Loans under Sections 2.1 and
2.2 of this Agreement or permanently reduce the Revolving
Loan Commitment Amount; provided, however, that the
Borrower, on the effective date of such termination or
reduction, shall, in the case of a termination, pay to the
Lender the aggregate unpaid principal amount of all
Revolving Loans or, in the case of a reduction, the
amount, if any, by which the aggregate unpaid principal
amount of all Revolving Loans exceeds the then reduced
Revolving Loan Commitment Amount together, in either case,
with all interest accrued and unpaid on the principal
amount that Borrower is required to prepay, but without
other premium or penalty. After any such reduction, the
Commitment Fee shall be calculated on the Revolving Loan
Commitment Amount as so reduced. Following any reduction
hereunder, the Revolving Loan Commitment Amount may not be
increased or otherwise reinstated without the express
written agreement of the Lender.
2.7.2. Optional Prepayments.
(a) Revolving Loans that are Eurodollar Loans may be
prepaid at any time, without premium or penalty,
on the last day of any Interest Period
applicable thereto, upon three Business Days'
notice. Revolving Loans that are Stated Rate
Loans may be prepaid at any time, without
premium or penalty, upon one Business Day's
notice. Any interest accrued on the amount so
prepaid up to the day of such prepayment must be
paid at the time of any such payment. No
optional prepayment made under this Section
2.7.2(a) shall reduce the Revolving Loan
Commitment Amount. Prepayments of the Revolving
Loans shall be applied first toward the payment
of accrued but unpaid interest and then toward
the reduction of principal.
(b) The Term Loan may be prepaid at any time, in
whole or in part, without premium or penalty,
upon five (5) Business Day's notice; provided
that interest accrued on the amounts so paid to
the date of such payment must be paid at the
time of any such payment and, provided further,
in the case of any Eurodollar Loan, that the
prepayment is made on the last day of the
applicable Interest Period. Prepayments of the
Term Loan shall be applied in such manner as the
Lender may elect which may include application
to installments of principal due thereunder in
the inverse order of their maturities; provided,
however, that Borrower may, so long as no
Default or Event of Default shall then exist,
designate in writing whether a specified
prepayment shall be applied to the portion of
the Term Loan evidenced by Term Note #1 or the
portion thereof evidenced by Term Note #2.
2.8. Basis of Payments . All sums payable to the Lender under this
Agreement shall be paid directly to the Lender in immediately
available funds, without set-off, deduction or counterclaim at
the place designated for payment in the definition of Lender's
Address set forth in Section 1.1 of this Agreement or at such
other place in the United States of America as Lender may
designate in writing delivered in accordance with the notice
provisions of this Agreement.
2.9. Notice and Manner of Borrowing, Continuing and Converting
Eurodollar Loans. Whenever the Borrower desires to obtain or to
continue any Revolving Loan as a Eurodollar Loan or to continue
any portion of the Term Loan as a Eurodollar Loan or to convert
all or any portion of any Loan into an Eurodollar Loan, the
Borrower shall, by and through its chief executive officer,
chief financial officer, chief accounting officer, or corporate
controller, notify the Lender (which notice shall be
irrevocable) by telex, telegraph, telecopier or telephone
received no later than 10:00 a.m. Dallas, Texas time on the
date two (2) Business D ays before the day on which the
Revolving Loan advance is to be made or, as applicable, any
portion of any Loan is to be continued as a Eurodollar Loan or
converted to a Eurodollar Loan. Such notice shall specify (a)
if Borrower desires to obtain an advance on the Revolving Loan,
the effective date for the advance and the amount thereof that
shall constitute a Eurodollar Loan, (b) in the case of any
portion of any Loan then outstanding, the effective date and
amount of each portion thereof to be continued as or converted
to a Eurodollar Loan, (c) the interest rate option to be
applicable to each portion of any Loan to be continued or
converted, and (d) the duration of the applicable Interest
Period, if any (subject to the provisions of the definition of
Interest Period and Section 2.10). Each such notification (a
" Notice of Borrowing " or " Notice of Eurodollar Conversion ", as
applicable) shall be immediately followed by a written
confirmation thereof by the Borrower in substantially the form
of Exhibit B hereto; provided that if such written confirmation
differs in any material respect from the action taken by the
Lender, the records of the Lender shall control absent manifest
error.
2.10 Conditions to Loan Conversion. The Borrower may not convert or
continue any portion of any Loan into a Eurodollar Loan if a
Default or Event of Default shall have occurred and be
continuing. Furthermore, no more than two (2) Eurodollar Loans
shall be outstanding at any one time. Subject to all
conditions set forth in this Agreement, conversions may be made
on any Business Day (which, in the case of a conversion of a
Eurodollar Loan, shall be the last day of the Interest Period
applicable to such Eurodollar Loan).
2.11 ____________________________ Duration of Interest Periods.
(a) Subject to the provisions of the definition of Interest
Period and Section 2.9 above, the duration of each
Interest Period applicable to a Eurodollar Loan shall be
as specified in the applicable Notice of Borrowing or
Notice of Eurodollar Conversion.
(b) If the Lender does not receive a notice of election of
duration of an Interest Period for a Eurodollar Loan
within the applicable time limits specified herein, or if,
when such notice must be given, a Default or Event of
Default exists, the Borrower shall be deemed to have
elected to convert such Eurodollar Loan into a Stated Rate
Loan on the last day of the then current Interest Period
with respect thereto.
(c) Notwithstanding the foregoing, the Borrower may not select
an Interest Period for any Eurodollar Loan that would end,
but for the provisions of the definition of Interest
Period, after the applicable Maturity Date of the Loan.
2.12 Changed Circumstances Applicable to Eurodollar Loans.
(a) In the event that:
(i) on any date on which the Adjusted Eurodollar
Rate would otherwise be set, the Lender shall have
determined in good faith (which determination shall be
final and conclusive after inquiry) that adequate and fair
means do not exist for ascertaining the Interbank Offered
Rate; or
(ii) at any time the Lender shall have determined in
good faith (which determination shall be final and
conclusive) that:
(aa) the continuation of or conversion of any
Loan (or any portion thereof) to a Eurodollar
Loan has been made imprac ticable or unlawful by
(1) the occurrence of a contingency that
materially and adversely affects the interbank
Eurodollar market or (2) compliance by the
Lender in good faith with any applicable law or
governmental regulation, guideline or order or
interpretation or change thereof by any
governmental authority charged with the
interpretation or administration thereof or with
any request or directive of any such
governmental authority (whether or not having
the force of law); or
(bb) the Adjusted Eurodollar Rate shall no
longer represent the effective cost to the
Lender for U.S. dollar deposits in the interbank
market for deposits in which it regularly
participates;
then, and in any such event, the Lender shall forthwith so
notify the Borrower thereof. Until the Lender notifies
the Borrower that the circumstances giving rise to such
notice no longer apply, the obligation of the Lender to
allow selection by the Borrower of the Eurodollar Loan
shall be suspended. If at the time the Lender so notifies
the Borrower, the Borrower has previously given the Lender
a Notice of Borrowing or Eurodollar Conversion but the
advance has not yet been made or the continuation or
conversion has not yet gone into effect, such notification
shall be deemed to be void.
(b) In the event any change in law, regulation, treaty or
official directive or the interpretation or application
thereof by any court or by any governmental authority
charged with the administration thereof or the compliance
with any guideline or request of any central bank or other
governmental authority (whether or not having the force of
law):
(i) subjects the Lender to any tax with respect to
payments of principal or interest or any other amounts
payable hereunder by the Borrower or otherwise with
respect to the transactions contemplated hereby (except
for taxes on the overall net income of the Lender imposed
by the United States of America or any political
subdivision thereof); or
(ii) imposes, modifies or deems applicable any
deposit insurance, reserve, special deposit or similar
requirement against assets held by, or deposits in or for
the account of, or loans by, the Lender (other than such
requirements as are already included in the determination
of the Adjusted Eurodollar Rate); or
(iii) imposes upon the Lender any other condition
with respect to its performance under this Agreement,
and the result of any of the foregoing is to increase the cost
to the Lender, reduce the income receivable by the Lender or
impose any expense upon the Lender with respect to the any
Loans, the Lender shall notify the Borrower thereof. The
Borrower agrees to pay to the Lender the amount of such
increase in cost, reduction in income or additional expense as
and when such cost, reduction or expense is incurred or
determined, upon presentation by the Lender of a statement in
the amount and setting forth the Lender's calculation thereof
and an explanation of the change which has resulted in such
increase in cost, reduction in income, or additional expense,
which statement shall be deemed true and correct, absent
manifest error.
2.13 Payments Not at End of Interest Period . If the Borrower for
any reason makes any payment of principal with respect to any
Eurodollar Loan (other than regularly scheduled installments of
principal) on any day other than the last day of an Interest
Period applicable to such Eurodollar Loan, or fails to borrow,
continue or convert to a Eurodollar Loan after giving a Notice
of Borrowing or a Notice of Eurodollar Co nversion pursuant to
Section 2.9 , or if any Eurodollar Loan is accelerated, the
Borrower shall pay to the Lender an amount computed pursuant to
the following formula:
L = (R - T) x P x D
365
L = amount payable to the Lender
R = interest rate on such Loan
T = effective interest rate per annum at which any
readily marketable bond or other obligation of
the United States, selected at the Lender's sole
discretion, maturing on or near the last day of
the then applicable Interest Period of such Loan
and in approximately the same amount as such
Loan can be purchased by the Lender on the day
of such payment of principal or failure to
borrow or continue or convert
P = the amount of principal prepaid or the amount of
the requested Loan
D = the number of days remaining in the Interest
Period as of the date of such payment or the
number of days of the requested Interest Period
The Borrower shall pay such amount upon presentation by the
Lender of a statement setting forth the amount and the Lender's
calculation thereof pursuant hereto, which statement shall be
deemed true and correct, absent manifest error.
SECTION 3. CONDITIONS PRECEDENT TO OBLIGATIONS OF LENDER.
3.1. Conditions to Borrowing . The obligations of the Lender under
this Agreement are subject to the occurrence, prior to or
simultaneously with execution of this Agreement, of each of the
following conditions, any or all of which may be waived in
whole or in part by the Lender in writing:
3.1.1. Documents Executed. The Borrower and each other Loan
Party shall have each executed (or caused to be executed)
and delivered each of the Loan Documents to the Lender.
3.1.2. Certified Resolutions . The Borrower and each other
Loan Party shall have each furnished to the Lender a copy
of resolutions of the Board of Directors (or, if the
Borrower or such Loan Party is not a corporation,
comparable evidence of authorization) of the Borrower and
each other Loan Party authorizing the execution, delivery
and performance of the Loan Documents to which such Person
is a party or by which it or any of its assets are bound,
which shall have been certified by the Secretary or
Assistant Secretary of the Borrower or such other Loan
Party (or, if the Borrower or such Loan Party is not a
corporation, comparable verification shall be provided) as
of the date of this Agreement.
3.1.3. Certified Articles. The Borrower and each other Loan
Party shall have each furnished to the Lender a copy of
its articles of incorporation, including all amendments
thereto, and all other charter documents of the Borrower
and each other Loan Party, (or, if the Borrower or such
other Loan Party is not a corporation, copies of all
documents by which such Person was created and governed)
all of which shall have been certified by the state agency
issuing the same as of a date reasonably near the date of
this Agreement (or, if the Borrower or such other Loan
Party is not a corporation, comparable verification shall
be provided).
3.1.4. Certified Bylaws . The Borrower and each other Loan
Party shall have each furnished to the Lender a copy of
its bylaws (or, if the Borrower or such other Loan Party
is not a corporation, copies of all documents by which
such Person was created and governed), which shall have
been certified by the secretary or assistant secretary of
the Borrower or such other Loan Party as of the date of
this Agreement (or, if the Borrower or such other Loan
Party is not a corporation, comparable verification shall
be provided).
3.1.5. Certificate of Good Standing . The Borrower and each
other Loan Party shall have each furnished to the Lender a
certificate of good standing (or, if the Borrower or such
Loan Party is not a corporation, comparable evidence of
its continued existence), which shall have been certified
by the state agency issuing the same as of a date
reasonably near the date of this Agreement (or, if the
Borrower or such other Loan Party is not a corporation,
comparable verification shall be provided).
3.1.6. Certificate of Incumbency . The Borrower and each
Loan Party shall have each furnished to the Lender a
certificate from its secretary or assistant secretary (or,
if the Borrower or such Loan Party is not a corporation,
from the Person(s) who exercises managerial control over
its business), certified as of the date of this Agreement,
as to the incumbency and signatures of the officers or
other representatives of the Borrower or such other Loan
Party signing this Agreement, the Note or any other Loan
Document.
3.1.7. Opinions of Counsel . The Borrower and each other
Loan Party shall have each furnished to the Lender the
favorable written opinion of cou nsel to the Borrower or
such other Loan Party, dated as of the date of this
Agreement and in the form satisfactory to the Lender.
3.1.8. UCC Lien Search . The Lender shall have received UCC
record and copy searches, disclosing no notice of any
liens or encumbrances filed against any of the assets of
the Borrower or any Subsidiary in any relevant
jurisdiction other than as relate to Permitted Liens or
which are to be wholly released in connection with the
closing of the transactions contemplated by this
Agreement.
3.1.9. Approval of Lender Counsel . All actions,
proceedings, instruments and documents required to carry
out the transactions contemplated by this Agreement or any
other Loan Document or incidental thereto and all other
related legal matters shall have been satisfactory to and
approved by legal counsel for the Lender, and said counsel
shall have been furnished with such certified copies of
actions and proceedings and such other instruments and
documents as they shall have requested.
3.1.10. Other Information and Documentation . The Lender
shall have received such other information, certificates
and executed documents as it shall have reasonably
requested in connection with this transaction.
3.2 Conditions to all Disbursements . The obligation of the Lender
to make (or renew or extend) any Loan on any Disbursement Date
(including, but not limited to, the Disbursement Date first
occurring) is subject to the prior occurrence of each of the
following conditions, any or all of which may be waived in
whole or in part by the Lender in writing:
3.2.1 Certificate . The Lender shall have received a
certificate, executed by the Chief Executive or Chief
Financial Officer of the Borrower, certified as of such
Disbursement Date and confirming that, as of such
Disbursement Date:
a. no Default or Event of Default has occurred and is
continuing; and
b. the warranties and representations set forth in this
Agreement and each Loan Document are true and correct
in all material respects on and as of such
Disbursement Date and nothing is omitted therefrom
that causes any such representations or warranties to
be misleading in any material respect.
3.2.2 Lender Satisfaction . The Lender shall not know or
have any belief that, as of such Disbursement Date:
a. any Default or Event of Default has occurred and is
continuing;
b. any warranty or representation set forth in this
Agreement or any other Loan Document shall not be
true and correct on or as of such date or that any
thereof shall be misleading in any material respect;
or
c. any provision of law, any order of any court or other
agency of government or any regulation, rule or
interpretation thereof, shall have had any material
adverse effect on the validity or enforceability of
this Agreement or any other Loan Document or on the
financial condition of the Borrower or any Loan Party
or the business or operations of any such Person.
SECTION 4. WARRANTIES AND REPRESENTATIONS.
The Borrower represents and warrants to the Lender that:
4.1. orporate Existence and Power . (a) The Borrower and each Loan
Party is an existing legal entity as specified in the
definitions of the terms "Borrower" and "Loan Party" contained
in Section 1.1 of this Agreement duly organized, validly
existing and in good standing under the laws of its State of
formation, as specified in such definition, (b) each of the
Subsidiaries is an existing legal entity as specified in the
definition of such term contained in Section 1.1 of this
Agreement, duly organized, validly existing and in good
standing under the law of its State of formation, as therein
specified, (c) the Borrower, each Loan Party which is not an
individual and each of the Subsidiaries have the power and
authority to own their respective properties and assets and to
carry out their respective businesses as now being conducted
and are qualified to do business and in good standing in every
jurisdiction wherein such qualification is necessary, and (d)
the Borrower and each Loan Party each has the capacity, power
and authority to execute, deliver and perform each of the Loan
Documents to which it is a party (including, with respect to
the Borrower, this Agreement), to borrow money in accordance
with its terms and to do any and all other things required of
it hereunder or under any other Loan Document.
4.2. Authorization and Approvals . The execution, delivery and
performance of this Agreement, the borrowing hereunder and the
execution and delivery of the other Loan Documents (a) have
been duly authorized by all requisite action, (b) do not
require registration with or consent or approval of, or other
action by, any federal, state or other governmental authority
or regulatory body, or, if such registration, consent or
approval is required, the same has been obtained and disclosed
in writing to the Lender, (c) will not violate any provision of
law, any order of any court or other agency of government, the
articles of inc orporation or bylaws (or comparable documents)
of the Borrower or any other Loan Party, any provision of any
indenture, agreement or other instrument to which the Borrower
or any other Loan Party is a party, or by which it or any of
its properties or assets are bound, (d) will not be in conflict
with, result in a breach of or constitute (with or without
notice or passage of time) a default under any such indenture,
agreement or other instrument, and (e) will not result in the
creation or imposition of any lien, charge or encumbrance of
any nature whatsoever upon any of the properties or assets of
the Borrower or any other Loan Party other than in favor of the
Lender.
4.3. Valid and Binding Agreement. This Agreement and the other Loan
Documents are (or will be, when executed and delivered) valid
and binding obligations of the Borrower and each other Loan
Party to the extent they are a party thereto, in each case
enforceable in accordance with their respective terms except as
such enforcement may be limited by bankruptcy, reorganization,
insolvency and similar laws and equitable principles affecting
the enforcement of creditors' rights generally.
4.4. _ Actions, Suits or Proceedings. Except as disclosed on Schedule
4.4 , there are no actions, suits or proceedings, at law or in
equity, and no proceedings before any arbitrator or by or
before any governmental commission, board, bureau or other
administrative agency, pending, or, to the best knowledge of
the Borrower, threatened against or affecting the Borrower, any
Loan Party or any of the Material Subsidiaries, or any
properties or rights of the Borrower, any Loan Party or any of
the Material Subsidiaries which, if adversely determined, could
materially impair the right of the Borrower, any Loan Party or
any of the Material Subsidiaries to carry on their respective
businesses s ubstantially as now conducted or could have a
material adverse effect upon the financial condition of the
Borrower, any Loan Party or any of the Subsidiaries.
4.5. Subsidiaries . The Subsidiaries specifically named in the
definition of such term that is contained in Section 1.1 hereof
are the only wholly or partially owned Subsidiaries of the
Borrower and the ownership (both legal and beneficial) of each
Subsidiary is completely and correctly described on
____________ Schedule 4.5.
4.6. No Liens, Pledges, Mortgages or Security Interests. Except for
Permitted Liens, none of the Borrower's or the Subsidiaries'
assets and properties is subject to any Lien of any kind or
character.
4.7. Accounting Principles . The Financial Statements have been
prepared in accordance with GAAP and fully and fairly present
the financial condition of the Borrower and the Subsidiaries
and each other Loan Party who has furnished Financial
Statements, as of the dates (and the results of their
operations for the periods) for which the same are furnished to
the Lender. Neither the Borrower, any Subsidiary nor any other
Loan Party who furnished Financial Statements has material
contingent obligations, liabilities for taxes, long-term leases
or unusual forward or long-term commitments not disclosed by,
or reserved against in, the Financial Statements.
4.8. No Adverse Changes . There has been no material adverse change
in the business, properties or condition (financial or
otherwise) of the Borrower, any Material Subsidiary or any Loan
Party who has furnished Financial Statements since the date of
the latest Financial Statement.
4.9. Conditions Precedent . As of the date of this Agreement, all
appropriate conditions precedent referred to in Section 3
hereof shall have been satisfied (or waived in writing by the
Lender).
4.10. Taxes . The Borrower and the Material Subsidiaries and
each other Loan Party have filed by the due date therefor all
federal, state and local tax returns and other reports they are
required by law to file and which are material to the conduct
of their respective businesses, have paid or caused to be paid
all taxes, assessments and other governmental charges that are
shown to be due and payable under such returns, and have made
adequate provision for the payment of such taxes, assessments
or other governmental charges which have accrued but are not
yet payable. The Borrower has no knowledge of any deficiency
or assessment in a material amount in connection with any
taxes, assessments or other governmental charges not adequately
disclosed in the Financial Statements.
4.11. Compliance with Laws . Except as disclosed on Schedule
4.11, the Borrower and the Material Subsidiaries and each other
Loan Party have complied with all applicable laws, to the
extent that failure to comply would materially affect any of
their assets or interfere with the conduct of the business of
the Borrower or any of the Material Subsidiaries.
4.12. Indebtedness . The Borrower and the Subsidiaries have no
Debt, whether contingent or otherwise, that was incurred in
connection with any loan, credit or other financial transaction
(including liabilities arising in connection with letters of
credit, commercial paper, banker's acceptances and similar
financial transactions) except for the Indebtedness, the Debt
disclosed on Schedule 4.12 and, to the extent Borrower makes or
is deemed to make this representation and warranty at any time
in the future, the Debt permitted under Section 6.2 of this
Agreement.
4.13. Material Agreements . Except as disclosed on Schedule
4.13 , the Borrower and the Subsidiaries have no leases,
contracts, or patent or trademark licenses which, if breached,
terminated, lost or otherwise adversely affected, could
materially and adversely affect the financial condition or
business of the Borrower or any Material Subsidiary; to the
best knowledge of Borrower following diligent inquiry, all
parties to such agreements (including the Borrower and the
Subsidiaries) have complied with the provisions of such
agreements; and to the best knowledge of Borrower, following
diligent inquiry, no party to such agreements (including the
Borrower and the Subsidiaries) is in default thereunder, and no
event has occurred which with notice or the passage of time, or
both, would constitute such a default.
4.14. Margin Stock . Neither the Borrower nor any of the
Subsidiaries nor any Loan Party is engaged principally, or as
one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any " margin
stock " t of the
proceeds of any Loan has been or will be used, directly or
indirectly, to purchase or carry any margin stock or to extend
credit to others for the purpose of purchasing or carrying any
margin stock or for any other purpose that might violate the
provisions of Regulation G, T, U or X of the said Board of
Governors. Neither the Borrower, any Subsidiary nor any other
Loan Party owns any margin stock.
4.15. Misrepresentation . No warranty or representation by the
Borrower or any Loan Party contained herein or in any
certificate or other document furnished by the Borrower or any
Loan Party pursuant hereto or in connection herewith contains
any untrue statement of material fact or omits to state a
material fact necessary to make such warranty or representation
not misleading in light of the circumstances under which it was
made.
4.16. Forfeiture . Except as disclosed on _ Schedule 4.4 , neither
the Borrower, any Subsidiary nor any other Loan Party is or has
been charged with or, to its knowledge, is under investigation
for possible violations of the Racketeering, Influence and
Corrupt Organizations Act ("RICO"), the Continuing Criminal
Enterprises Act ("CCE"), the Contraband Substance Act of 1978,
the Money Laundering Act of 1986, the Drug Abuse Act of 1986,
or any similar law providing for the possible forfeiture of any
of its assets or properties.
SECTION 5. _____________________ AFFIRMATIVE COVENANTS.
From the date hereof until the Indebtedness is paid and performed in
full, the Borrower covenants and agrees:
5.1. Financial and Other Information.
5.1.1. Annual Financial Reports . Borrower will furnish or
cause to be furnished to the Lender in form satisfactory
to the Lender not later than one hundred twenty (120) days
after the close of each fiscal year of the Borrower and
the Subsidiaries consolidated balance sheets, income
statements and statements of cash flow and consolidating
balance sheets and income statements for the Borrower and
the Subsidiaries as of the close of each such fiscal year,
and such other comments and financial details as are
usually included in similar reports. Such reports shall
be prepared in accordance with GAAP and shall be audited
by independent certified public accountants of recognized
standing selected by the Borrower and shall contain
unqualified opinions as to the fairness of the statements
therein contained.
5.1.2. Interim Financial Statements . Borrower will furnish
or cause to be furnished to the Lender, not later than
sixty (60) days after the close of each quarter of each
fiscal year of the Borrower and the Subsidiaries,
financial statements containing consolidated balance
sheets, income statements and statements of cash flow and
consolidating balance sheets and income statements as of
the end of each such period. These statements shall be
prepared on substantially the same accounting basis as the
statements required in section 5.1.1 of this Agreement,
and the accuracy of the statements shall be certified by
the chief executive or financial officer of the Borrower.
5.1.3. Compliance Certificate . Together with each delivery
of the financial statements required by Sections 5.1.1 and
5.1.2 of this Agreement, Borrower will furnish to the
Lender a Compliance Certificate of its chief executive or
financial officer stating, among the other requirements
thereof, that no Event of Default or Default has occurred,
or if any such Event of Default or Default exists, stating
the nature thereof, the period of existence thereof and
what action the Borrower proposes to take with respect
thereto.
5.1.4. Adverse Events . Borrower will promptly inform the
Lender of the occurrence of any Even t of Default or
Default, or of any occurrence which has or could be
expected to have a materially adverse effect upon any of
the business, properties, financial condition or ability
of the Borrower or any other Loan Party to comply with its
obligations under any Loan Document.
5.1.5. Reports . Borrower will promptly furnish to the
Lender, upon becoming available, a copy of all financial
statements, reports, notices, proxy statements and other
communications sent by the Borrower to the owners or
holders of Borrower's Stock and all regular and periodic
reports filed by the Borrower with the Securities and
Exchange Commission and all Offering Franchise Circulars
filed with any state (or agency thereof) within the United
States of America.
5.1.6. Other Information as Requested . Borrower will
promptly furnish or cause to be furnished to the Lender
such other information regarding the operations,
properties, business affairs and financial condition of
the Borrower and the Subsidiaries as the Lender may
reasonably request from time to time, and if Lender
believes in good faith that good cause for inspection may
exist (which cause shall be communicated to Borrower),
Borrower shall permit (or cause to be permitted) the
Lender, its employees, attorneys and agents, to inspect
all of the books, records and properties of the Borrower
and the Subsidiaries at any reasonable time.
5.2. Insurance. Borrower will keep and will cause to be kept all of
its insurable properties and the insurable properties of the
Subsidiaries adequately insured and will maintain and cause the
Subsidiaries to maintain (a) insurance against fire and other
risks customarily insured against by companies engaged in the
same or a similar business to that of the Borro wer or the
Subsidiaries, (b) worker's compensation insurance, to the
extent required by applicable law, (c) public liability and
product liability insurance in amounts and against risks
customarily insured against by companies engaged in the same or
a similar business, (d) business interruption insurance, and
(e) such other insurance as may be required by law. The
Borrower will deliver to the Lender, at the Lender's reasonable
request, evidence satisfactory to the Lender that such
insurance has been so procured and, with respect to liability
insurance, such insurance shall name the Lender as an
additional insured.
5.3. Taxes. Borrower will pay or will cause to be paid promptly and
within the time that they can be paid without interest or
penalty all taxes, assessments and similar imposts and charges
of every kind and nature lawfully levied, assessed or imposed
upon the Borrower or the Subsidiaries or any of their
respective properties, except to the extent being contested in
good faith and, if reasonably requested by the Lender, bonded
in a manner satisfactory to the Lender. If the Borrower shall
fail to pay or cause to be paid such taxes and assessments by
their due date, the Lender shall have the option to do so, and
the Borrower agrees to repay the Lender, with interest at
Default Rate, all amounts so expended by the Lender.
5.4. Maintain Corporation and Business . Borrower will do or cause
to be done all things necessary to preserve and keep in full
force and effect the Borrower's and the Material Subsidiaries'
existence, rights and franchises and to comply and to cause
each Subsidiary to comply with all applicable laws; Borrower
will and will cause each Material Subsidiary to continue to
conduct and operate their respective businesses substantially
as conducted and operated at the present time; Borrower will
and will cause each Material Subsidiary to at all times
maintain, preserve and protect all franchises, trademarks and
trade names and preserve all of their respective properties
used or useful in the conduct of their respective businesses
and to keep the same in good repair, working order and
condition; and Borrower will and will cause each Material
Subsidiary to from time to time make, or cause to be made, all
needed and proper repairs, renewals, replacements, betterments
and improvements thereto so that the business carried on in
connection therewith may be properly and advantageously
conducted at all times.
5.5. Use of Loan Proceeds . Borrower will use the proceeds of the
Loans for the Loan Purposes set forth in the definition of such
term that is contained in Section 1.1 of this Agreement.
5.6. Leverage Ratio. On a consolidated basis with the Subsidiaries,
Borrower will at all times maintain a ratio of Debt to Tangible
Net Worth of the Borrower and Subsidiaries that is less than
0.75 to 1.0.
5.7. Current Ratio . On a consolidated basis with the Subsidiaries,
Borrower will at all times maintain a ratio of Current Assets
to Current Liabilities of the Borrower and Subsidiaries that is
greater than 2.0 to 1.0.
5.8. Profitability Ratio . On a consolidated basis with the
Subsidiaries, Borrower will at all times maintain a
Profitability Ratio greater than 1.5 to 1.0. As used in this
Section 5.8, " Profitability Ratio " shall mean, as of any
applicable date of determination, the ratio of Net Income for
the immediately preceding period of twelve calendar months to
Current Maturities of Long Term Debt of the Borrower and
Subsidiaries.
5.9. Fixed Charge Coverage . On a consolidated basis with the
Subsidiaries, Borrower will at all times maintain a Fixed
Charge Coverage ratio greater than 1.0 to 1.0. As used in this
Section 5.9 , " Fixed Charge Coverage " shall mean, as of any
applicable date of determination, the ratio of Net Income of
the Borrower and Subsidiaries for the immediately preceding
period of twelve calendar months plus Noncash Charges of the
Borrower and Subsidiaries for the same period to Current
Maturities of Long Term Debt of the Borrower and Subsidiaries
plus cash dividends paid by TCBY to the shareholders of TCBY
for the preceding period of twelve calendar months plus
Replacement CapEx of the Borrower and Subsidiaries for the
preceding period of twelve calendar months (Replacement CapEx
incurred by the Borrower and Subsidiaries during the 12 months
preceding the date of this Agreement may be based upon the best
estimate of such expenditures as made by Borrower's chief
financial officer and controller).
SECTION 6. __________________ NEGATIVE COVENANTS.
From the date hereof until the Indebtedness is paid and performed in
full, the Borrower covenants and agrees that it will not and it will not
permit any Subsidiary to:
6.1. Liens and Encumbrances . Create, incur, assume or suffer to
exist any Lien, encumbrance, or charge of any kind (including
any lease required to be capitalized under GAAP) upon any of
its properties and/or assets other than Permitted Liens.
Notwithstanding the foregoing, should Lender consent to the
Borrower and/or any of the Subsidiaries voluntarily creating,
incurring, assuming or suffering to exist any such Lien,
encumbrance or charge of any kind (including any lease required
to be capitalized under GAAP) upon any of its properties and/or
assets, such consent shall be conditioned upon the immediate
granting of, and Americana shall immediately grant to the
Lender, a first priority Lien and security interest against, in
and to all of the assets and properties of Americana.
6.2. Subsidiary Indebtedness . As to the Subsidiaries only, incur,
create, assume or permit to exist any Debt, except for (a) the
Indebtedness, (b) existing Debt described on Schedule 4.12, (c)
trade indebtedness and liability upon negotiable instruments
resulting from the endorsement of such instruments for
collection or deposit to the extent the same are incurred in
good faith in the ordinary course of business, and (d) purchase
money obligations incurred in good faith in the ordinary course
of business and secured by Permitted Liens.
6.3. Extension of Credit and Investments . (a) Make any loan,
advance or extension of credit to any Person, or (b) acquire or
hold beneficially any Stock of any Person or make any
investment or acquire any interest whatsoever in any Person
(unless the Borrower and/or its wholly-owned Subsidiaries own,
legally and beneficially, 50% or more of all Stock and/or other
interests in such Person or the Borrower holds the requisite
power and ownership interests to solely direct and manage such
Person's business and affairs pursuant to its charter,
articles, bylaws and/or other governing documents) if, as a
result of any action described in clause (a) or (b) above, the
aggregate amount of all such loans, advances and extensions of
credit plus the value of all such Stock and other investments
made by the Borrower and the Subsidiaries, on an aggregate
basis, would exceed twenty-five percent (25%) of the
consolidated Tangible Net Worth of the Borrower and the
Subsidiaries; provided, however, that (i) sales made or
services provided on open account and other trade receivables,
provided the same arise in the ordinary course of business, and
(ii) loans, advances and extensions of credit between or among
the Borrower and wholly-owned Subsidiaries, and (iii)
"slotting" allowances funded in connection with the acquisition
of store space for retail yogurt sales activities, and (iv)
equipment placement contracts entered into in connection with
yogurt retail sales activities (provided that the Borrower or
Subsidiary, as applicable, retains ownership of the equipment)
shall not be taken into consideration for purposes of
determining compliance with this provision.
6.4. Guarantee Obligations . As to the Subsidiaries only, directly
or indirectly, in any way be or become responsible for
Guarantee Obligations.
6.5. Subordinate Indebtedness . Subordinate any indebtedness due to
it from a Person (or any Lien securing such indebtedness) to
indebtedness of other creditors of such Person (or any Lien
securing such indebtedness).
6.6. Property Transfer, Merger or Lease-Back . (a) Sell, lease,
transfer or otherwise dispose of any assets, except the sale
of yogurt stores in the ordinary course of business, the sale
of Subsidiaries in the ordinary course of business (other than
Material Subsidiaries), the sale of Carlin Manufacturing, Inc.,
the sale of inventory in the ordinary course of business and
disposition of obsolete or worn-out equipment upon the
replacement thereof, (b) change its name, consolidate with or
merge into any other Person, permit another Person to merge
into it, enter into any reorganization or recapitalization or
reclassify its Stock, or (c) enter into any sale-leaseback
transaction; provided, however , that a Subsidiary which is
wholly owned by the Borrower may be merged into, or
consolidated with, another Subsidiary which is wholly owned by
the Borrower, and such Subsidiary may sell, lease or transfer
all or a substantial part of its assets to another Subsidiary
wholly owned by the Borrower, and such Subsidiary may acquire
all or substantially all of the properties and assets of the
Subsidiary so to be merged into (or consolidated with) it or so
to be sold, leased or transferred to it.
6.7. Investments . Make any investment including, without
limitation, the acquisition or holding of any Stock of, or any
investment in or acquisition of any interest whatsoever in any
other Person except for: (a) the Stock of the Subsidiaries
owned by the Borrower and/or any Subsidiary on the date of this
Agreement and/or JBY Co.,Inc., a Japanese corporation (20% of
which is owned by TCBY International, Inc.); (b) Stock,
investments and other interests acquired by the Borrower and
Subsidiaries in other Persons, to the extent permitted by
Section 6.3 , above; (c) Stock in wholly owned Subsidiaries of
the Borrower; (d) certificates of deposit with maturities of
one (1) year or less; (e) direct obligations of the United
States Government or its agencies or mutual funds holding
solely such obligations; (f) commercial paper, maturing not
more than two hundred seventy (270) days after the date of
issue, issued by corporations with a minimal rating of "P-1"
(or its equivalent) according to Moody's Investor Service,
"A-1+" (or its equivalent) according to Standard & Poors
Corporation, or "F-1" (or its equivalent) according to Fitch's
Investors Service, Inc.; (g) banker's acceptances issued by
banks organized under the laws of the United States or any
state thereof which mature no later than and have ratings equal
to or greater than those stated for commercial paper in subpart
(f) above; (h) money market a ccounts; and (i) investment grade
bonds rated "AA" or"AAA" (or the equivalent) by Standard &
Poors Corporation.
6.8. Misrepresentation . Furnish the Lender with any certificate or
other document that contains any untrue statement of a material
fact or omits to state a material fact necessary to make such
certificate or document not misleading in light of the
circumstances under which it was furnished.
6.9. Margin Stock . Apply any of the proceeds of any Loan, or any
portion thereof, to the purchase or carrying of any " margin
stock " within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System, or any regulations,
interpretations or rulings thereunder.
6.10. Compliance with Environmental Laws . Use (or permit any
tenant to use) any of its assets for the handling, processing,
storage, transportation, or disposal of any Hazardous Substance
unless the same is handled in all respects in compliance with
all Environmental Laws, or generate any Hazardous Substance
unless the same is generated in all respects in compliance with
Environmental Laws, or conduct any activity which is likely to
cause a release of any Hazardous Substance, or otherwise
conduct any activity or use any of its assets in any manner
that is likely to violate any Environmental Law.
6.11. Principal Place of Business . Move Americana's principal
place of business from the address for Americana specified in
Section 1.1 of this Agreement under the term "Guarantor."
6.12. Repurchase of Stock . With respect to the Borrower,
repurchase the Stock of TCBY using, directly or indirectly, the
proceeds of any loan.
SECTION 7. EVENTS OF DEFAULT - ENFORCEMENT - APPLICATION OF PROCEEDS.
7.1. Acceleration of Indebtedness. Upon the occurrence of any Event
of Default, all Indebtedness shall be due and payable in full
forthwith at the option of the Lender without presentation,
demand, protest, notice of dishonor, notice of intention to
accelerate, or other notice of any kind, all of which are
hereby expressly waived. Unless all of the Indebtedness is then
fully paid, the Lender shall have and may exercise any one or
more of the rights and remedies which shall be available to
Lender under this Agreement or any other Loan Document or
otherwise at law or in equity including, without limitation,
the right to set-off against the Indebtedness any amount owing
by the Lender to the Borrower.
7.2. Cumulative Remedies . The rights and remedies provided for
herein or in any other Loan Document are cumulative to one
another and to the rights and remedies for collection and
enforcement of the Indebtedness as provided by law or in
equity. Nothing herein contained is intended, and it should
not be construed, to preclude the Lender from pursuing any
other right or remedy for the recovery of any other sum to
which the Lender may be or become entitled for the breach of
this Agreement or any other Loan Document.
SECTION 8. _____________ MISCELLANEOUS.
8.1. Independent Rights . No single or partial exercise of any
right, power, privilege or remedy hereunder or under any other
Loan Document, or any delay in the exercise there of, shall
preclude other or further exercise thereof.
8.2. Covenant Independence . Each covenant in this Agreement and in
each Loan Document shall be deemed to be independent of any
other covenant, and an exception in one covenant shall not
create an exception in another covenant.
8.3. Waivers and Amendments . No forbearance on the part of the
Lender in enforcing any of its rights under this Agreement or
any other Loan Document and no renewal, extension or
rearrangement of any payment or covenant to be made or
performed hereunder or thereunder, shall constitute a waiver of
any of the terms of this Agreement or any other Loan Document
or of any such right. No Default or Event of Default shall be
waived by the Lender except in writing signed and delivered by
an officer of the Lender, and no waiver of any Default or Event
of Default shall operate as a waiver of any other Default or
Event of Default or of the same Default or Event of Default on
a future occasion. No other amendment, modification or waiver
of, or consent with respect to, any provision of this Agreement
or any other Loan Document shall be effective unless the same
shall be in writing and signed and delivered by an officer of
the Lender.
8.4. GOVERNING LAW . THIS AGREEMENT, AND EACH AND EVERY TERM AND
PROVISION HEREOF, SHALL BE CONSTRUED IN ACCORDANCE WITH THE
THE LAWS OF THE STATE OF TEXAS. IF ANY PROVISION OF THIS AGREEMENT
SHALL FOR ANY REASON BE HELD INVALID OR UNENFORCEABLE, SUCH
INVALIDITY OR UNENFORCEABILITY SHALL NOT AFFECT ANY OTHER
PROVISION HEREOF, BUT THIS AGREEMENT SHALL BE CONSTRUED AS IF
SUCH INVALID OR UNENFORCEABLE PROVISION HAD NEVER BEEN
CONTAINED HEREIN..
8.5. Survival of Warranties, Etc. All of the Borrower's and the
Subsidiaries' and each other Loan Party's covenants,
agreements, representations and warranties made in connection
with this Agreement and any document contemplated hereby shall
survive the making of the Loans and the delivery of the Note
and other Loan Documents and shall be deemed to have been
relied upon by the Lender notwithstanding any investigation
heretofore or hereafter made by the Lender. All statements
contained in any certificate or other document delivered to the
Lender at any time by or on behalf of the Borrower or any
Subsidiary or any other Loan Party pursuant hereto or in
connection with the transactions contemplated hereby shall
constitute representations and warranties by the Borrower in
connection with this Agreement.
8.6. Attorneys' Fees . The Borrower agrees that it will pay all
reasonable costs and expenses of the Lender in connection with
the enforcement of the Lender's rights and remedies under this
Agreement or under any other Loan Document and in connection
with the preparation or making of any amendments,
modifications, waivers or consents with respect to this
Agreement or any other Loan Document. If Borrower shall
prevail in any litigation brought to enforce Lender's
obligations under this Agreement or any other Loan Document,
Borrower shall be entitled to recover reasonable attorney's
fees and court costs incurred by Borrower in the course of such
litigation.
8.7. Payments on Non-Business Days. Whenever any payment to be made
hereunder or under any other Loan Document shall be stated to
be due on a day which is not a Business Day, such payment may
be made on the next succeeding Business Day, and such
extension, if any, shall be included in computing interest.
8.8. Binding Effect . This Agreement shall inure to the benefit of
and shall be binding upon the parties hereto and their
respective successors and assigns; provided, however, the
Borrower may not assign, transfer or delegate its rights or
obligations hereunder without the prior written consent of the
Lender.
8.9. _ Notices. All notices and communications provided for herein or
in any other Loan Document or required by law to be given shall
be in writing (including bank wire, telecopy or similar
writing) and shall be given to such party at its address or
telecopy number (if any) set forth below: (a) if to the
Borrower, to the Borrower's Address or telecopy number
specified for such purpose in the definition of such term
contained in Section 1.1 of this Agreement; and (b) if to the
Lender, to the address or telecopy number specified for such
purpose in the definition of the term "Lender's Address "
contained in Section 1.1 of this Agreement; or (c) to such
other address in the United States of America or telecopy
number in the United States of America as a party shall have
designated to the other in writing delivered in accordance
herewith. Each such notice or other communication shall be
effective if given by telecopier, when such telecopy is
transmitted to the telecopy number (if any) specified above and
the appropriate confirmation is received or, if given by mail,
72 hours after such communication is deposited in the United
States mail with first-class postage prepaid, addressed as
aforesaid, provided that such mailing is by registered or
certified mail, return receipt requested, or if given by any
other means, when delivered at the address heretofore
specified. The giving of at least 5 days' notice before the
Lender shall take any action described in any notice shall
conclusively be deemed reasonable for all purposes, including
for purposes of determining if the not ice or action described
in the notice is commercially reasonable.
8.10. Counterparts . This Agreement may be signed in any number
of counterparts with the same effect as if the signatures were
upon the same instrument.
8.11. Headings . Article and section headings in this Agreement
are included for the convenience of reference only and shall
not constitute a part of this Agreement for any purpose.
8.12. Capital Adequacy . If, as a result of any regulatory
change directly or indirectly affecting the Lender or any of
the Lender's affiliates, there shall be imposed, modified or
deemed applicable any tax, reserve, special deposit, minimum
capital, capital ratio, or similar requirement against or with
respect to or measured by reference to any Loan made hereunder
or participations therein, and the result shall be to increase
the cost to the Lender or any of the Lender's affiliates of
making or maintaining of any Loan hereunder or to any other
party maintaining any participation therein, or reduce any
amount receivable in respect of any Loan (which increase in
cost, or reduction in amount receivable, shall be the result of
the Lender's or the Lender's affiliated company's reasonable
allocation among all affected customers of the aggregate of
such increases or reductions resulting from such event) then,
within 10 days after receipt by the Borrower of notice from the
Lender containing the information described below in this
Section which shall be delivered to the Borrower, the Borrower
agrees from time to time to pay the Lender such additional
amounts (provided that Lender shall not be entitled to double
compensation hereunder for amounts previously paid by Borrower
pursuant to Section 2.12 ) as shall, from time to time, be
sufficient to comp ensate the Lender or any of the Lender's
affiliates (for as long as such increased costs or reductions
in amount receivable exist) for such increased costs or
reductions in amount receivable which the Lender determines in
the Lender's sole discretion are material. The notice to be
delivered pursuant to this Section shall identify the
regulatory change which has occurred, the requirements which
have been imposed, modified or deemed applicable, the amount of
such additional cost or reduction in amount receivable and the
manner in which such amount has been calculated. All
provisions hereof are subject to Section 2.5 of this Agreement.
8.13. INDEMNIFICATION AND REIMBURSEMENT BY THE BORROWER
SUBJECT TO SECTION 2.5 S AGREEMENT, THE BORROWER HEREBY
COVENANTS AND AGREES TO INDEMNIFY, REIMBURSE, DEFEND AND HOLD
HARMLESS THE LENDER AND ITS OFFICERS, DIRECTORS, EMPLOYEES AND
AGENTS FROM AND AGAINST ANY AND ALL CLAIMS, DAMAGES,
LIABILITIES, COSTS AND EXPENSES (INCLUDING WITHOUT LIMITATION,
THE FEES AND OUT-OF-POCKET EXPENSES OF COUNSEL) WHICH MAY BE
INCURRED BY OR ASSERTED AGAINST THE LENDER OR ANY SUCH OTHER
INDIVIDUAL OR ENTITY IN CONNECTION WITH:
(A) ANY INVESTIGATION, ACTION OR PROCEEDING ARISING OUT OF OR
IN ANY WAY RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR ANY ACT OR OMISSION RELATING TO ANY OF THE
FOREGOING (EXCLUDING, HOWEVER, EXAMINATIONS OF LENDER BY
REGULATORY AUTHORITIES UNLESS SUCH EXAMINATION IS MADE
SPECIFICALLY AS TO THE LOAN AND NOT AS TO THE LENDER'S
ASSETS GENERALLY); OR
(B) THE CORRECTNESS, VALIDITY OR GENUINENESS OF ANY
INSTRUMENTS OR DOCUMENTS THAT MAY BE RELEASED OR ENDORSED
TO BORROWER OR ANY OTHER LOAN PARTY BY THE LENDER (WHICH
SHALL, IN ANY EVENT, AUTOMATICALLY BE DEEMED TO BE WITHOUT
ANY REPRESENTATION OR WARRANTY FROM THE LENDER, EXPRESS OR
IMPLIED, AND WITHOUT RECOURSE TO THE LENDER), OR THE
EXISTENCE, CHARACTER, QUANTITY, QUALITY, CONDITION, VALUE
OR DELIVERY OF ANY GOODS PURPORTING TO BE REPRESENTED BY
ANY SUCH INSTRUMENTS OR DOCUMENTS.
NOTWITHSTANDING THE FOREGOING, THE BORROWER SHALL HAVE NO
OBLIGATION TO INDEMNIFY, REIMBURSE, DEFEND OR HOLD HARMLESS THE
LENDER OR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS
FROM ANY CLAIM, DAMAGE, LIABILITY, COST OR EXPENSE WHICH IS
INCURRED BY OR ASSERTED AGAINST THE LENDER OR SUCH OTHER PERSON
AS A RESULT OF THE LENDER'S OR SUCH PERSON'S OWN GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT.
8.14. Gender . Throughout this Agreement, the masculine shall
include the feminine and vice versa and the singular shall
include the plural and vice versa, unless the context of this
Agreement indicates otherwise.
8.15. Joint Borrowers . If more than one party executes this
Agreement as Borrower, then for the purpose of this Agreement
the term Borrower shall mean each such party and each such
party shall be jointly and severally liable as Borrower for the
Indebtedness without regard to which party receives the
proceeds of any portion of the Loans. Each such party hereby
acknowledges that it expects to derive economic advantage from
the Loans.
8.16. Severability of Provisions . Any provision of this
Agreement, the Note or any other Loan Document that is
prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions of this Agreement or such other Loan
Document or affecting the validity or enforceability of such
provision in any other jurisdiction.
8.17. Assignment . The Lender shall have the absolute and
unrestricted right to sell, assign, transfer, or grant
participation in, all or any portion of the Loans without the
consent of Borrower or any other Loan Party; provided, however,
no such action on the part of the Lender shall have the effect
of changing any of the Borrower's obligations hereunder without
the written consent of the Borrower.
8.18 Amendment and Restatement . This Agreement amends and restates
that certain Loan Agreement dated as of June 11, 1993, as
amended and restated by that certain Amended and Restated Loan
Agreement dated as of November 28, 1994, each of which was
entered into by Bank One, Texas, N.A. and TCBY Enterprises,
Inc. but shall not extinguish or constitute a novation of the
indebtedness or obligations evidenced by said agreements or any
of the Loan Documents described therein, and all such Loan
Documents are hereby amended so that any reference contained
therein to the Loan Agreement dated June 11, 1993 or the
Amended and Restated Loan Agreement dated November 28, 1994
shall be deemed to mean and refer to this Agreement. The
Borrower hereby expressly acknowledges that all such
indebtedness and obligations continue in full force and effect
and the same are, hereby, ratified and confirmed by the
Borrower.
8.19. NO ORAL AGREEMENTS . THIS AGREEMENT TOGETHER WITH THE
OTHER LOAN DOCUMENTS, AS WRITTEN, REPRESENT THE FINAL
AGREEMENTS BETWEEN THE LENDER AND THE BORROWER 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 LENDER AND THE BORROWER
IN WITNESS WHEREOF, the Borrower an d the Lender have caused
this Agreement to be executed by their duly authorized officers as of the
day and year first written above.
BORROWER:
TCBY ENTERPRISES, INC.
By:
Printed Name:
Title:
LENDER:
BANK ONE, TEXAS, N.A.
By:
Printed Name:
Title:
___ EXHIBIT A
COMPLIANCE CERTIFICATE OF TCBY ENTERPRISES, INC.
FOR THE _________ (QUARTER/YEAR) ENDED ___________, 199_
TO: Bank One, Texas, N.A.
1717 Main Street, 3rd Floor
Dallas, Texas 75201
Attention: Lisa Peterson
FOR: Second Amended and Restated Loan Agreement dated as of April 7,
1995, entered into by and among Bank One, Texas, N.A., and TCBY
Enterprises, Inc.
This Certificate is delivered to you pursuant to Section 5.1.3 of
the Second Amended and Restated Loan Agreement (the " Agreement") dated as
of _________ ____, 1995 by and between Bank One, Texas, N.A. and TCBY
Enterprises, Inc. (the " Borrower "). Unless otherwise defined herein,
capitalized terms used in this Certificate have the meanings given to
them in the Agreement.
I hereby certify to you:
1. I am the Chief Executive Officer, Chief Financial Officer,
Chief Accounting Officer or Corporate Controller (as stipulated below my
signature below) of TCBY Enterprises, Inc.
2. As required by Section 5.1.1 or 5.1.2 of the Agreement, as
applicable, financial statements of the Borrower and its Subsidiaries for
the _________________ (year/quarter) ended __________________, 19___ (the
" Financial Statements "), prepared in accordance with generally accepted
accounting principles consistently applied, accompany this Certificate.
The Financial Statements present fairly the financial condition of the
Borrower and Subsidiaries as of the date thereof and the results of
operations of the Borrower and Subsidiaries for the period covered
thereby.
3. A review of the activities of the Borrower and the Subsidiaries
during the Subject Period has been made under my supervision with a view
to determining whether, during the Subject Period, the Borrower and the
Subsidiaries have observed and performed all of the obligations under the
Loan Documents. During the Subject Period, the Borrower and the
Subsidiaries observed and performed each and every covenant and condition
of the Loan Documents (except as described on Schedule 2 attached
hereto).
4. The status of compliance by the Borrower with the provisions of
Sections 5.6, 5.7, 5.8, 5.9, 6.2, 6.3, 6.4, 6.5 and 6.8 of the Agreement
as of the end of the Subject Period is stated on Schedule 1 attached
hereto and mad e a part hereof for all purposes. The language set forth
on Schedule 1 is intended only to paraphrase or summarize certain
provisions of the Loan Agreement and shall not constitute a modification
_________ EXHIBIT A - Page 103
of such provisions. The language of the Agreement shall control in all
events.
5. The representations and warranties contained in the Agreement
and all of the other Loan Documents and all facts stated therein are true
and correct as of the date hereof. No material adverse change has
occurred in the Borrower's or any Material Subsidiary's business,
properties, or financial condition or in the ability of the Borrower or
any Subsidiaries to comply with the obligations under any Loan Document.
WITNESS my hand this ________ day of ________________, 19___.
TCBY ENTERPRISES, INC.
By:
Printed Name:
Title:
_________ EXHIBIT A - Page 104
SCHEDULE 1
FINANCIAL COVENANTS
__________________________LEVERAGE RATIO (SECTION 5.6)
REQUIRED: less than .075 TO
1.00
ACTUAL:
(i)
Debt (all items of indebtedness, obligations
and liabilities of the Borrower and
Subsidiaries, on a consolidated basis,
whether matured or unmatured, liquidated or
unliquidated, direct or indirect, absolute
or contingent, joint or several, that should $________
be classified as liabilities in accordance
with GAAP Guarantee Obligations of such plus
Persons plus , without duplication of the
foregoing, all liabilities of such Persons
arising with respect to letters of credit,
commerc ial paper, banker's acceptances and
similar financial transactions)
(ii)
Tangible Net Worth:
(a)
The book value of all assets of the
Borrower on a consolidated basis with
the Subsidiaries (other than patents, $________
patent rights, trademarks, trade names,
franchises, copyrights, licenses,
goodwill, research and development
expenses, unless prepaid, and similar
intangible assets) after appropriate
deductions, all determined in
accordance with GAAP
(b)
All items of indebtedness, obligations
and liabilities of the Borrower and
Subsidiaries, on a consolidated basis, $________
whether matured or unmatured,
liquidated or unliquidated, direct or
indirect, absolute or contingent, joint
or several, that should be classified
as liabilities in accordance with GAAP
$________
(c)
Guarantee Obligations
_________ EXHIBIT A - Page 105
(d) $________
Contingent liabilities with respect to
letters of credit and similar financial
transactions
$________
(e)
Tangible Net Worth: (a) minus (b)
minus (c) minus (d)
(iii) _____ to
Leverage Ratio: line ( i) divided by line_____
(ii)(e)
___________________________CURRENT RATIO (SECTION 5.7)
REQUIRED: greater than 2.00 to
1.00
ACTUAL:
(i)
Current Assets for the Borrower on a
consolidated basis with the Subsidiaries:
$________
(a)
All cash
$________
(b)
All nonaffiliated customer receivables
$________
(c)
All Investments allowed per Section 6.7
of the Loan Agreement that should be
classified as current in accordance
with GAAP
$________
(d)
All inventories
(e) $________
All other assets that should be
classified as current in accordance
with GAAP
$________
(f)
Current Assets: sum of (a) through (e)
(ii)
Current Liabilities for the Borrower on a $________
consolidated basis with the Subsidiaries
(liabilities classified as current in
accordance with GAAP)
(iii) _____ to
Current Ratio: line (i)(f) divided by line _____
_________ EXHIBIT A - Page 106
(ii)
_________________________________PROFITABILITY RATIO (SECTION 5.8)
REQUIRED: greater than 1.50 to
1.00
ACTUAL:
(i)
Net income, after deduction of income taxes,
for the Borrower on a consolidated basis
with the Subsidiaries for the immediately $________
preceding period of twelve calendar months
determined in accordance with GAAP
(including, within the calculation thereof,
nonrecurring or extraordinary items)
(ii)
Nonrecurring or extraordinary gains for the $________
immediately preceding period of 12 calendar
months, determined in accordance with GAAP
(iii)
Nonrecurring or extraordinary losses for the $________
immediately preceding period of 12 calendar
months, determined in accordance with GAAP
(iv) $________
Net Income: (i) minus (ii) plus (iii)
(v)
Current Maturities of Long Term Debt (the
principal portion of current maturities of
long term indebtedness and current
obligations on long term capital leases, as $________
determined according to GAAP) for the
Borrower on a consolidated basis with the
Subsidiaries for the next succeeding period
of twelve calendar months
(vi) _____ to
Profitability Ratio: line (iv) divided by _____
line (v)
___________________________________FIXED CHARGE COVERAGE (SECTION 5.9)
REQUIRED: greater than 1.00 to
1.00
ACTUAL:
(i)
Net income for the Borrower after deduction
of income taxes on a consolidated basis with
the Subsidiaries for the immediately $________
preceding period of twelve calendar months
determ ined in accordance with GAAP
(including, within the calculation thereof,
nonrecurring or extraordinary items)
(ii)
_________ EXHIBIT A - Page 107
Nonrecurring or extraordinary gains for the $________
immediately preceding period of 12 calendar
months, determined in accordance with GAAP
(iii)
Nonrecurring or extraordinary losses for the $________
immediately preceding period of 12 calendar
months, determined in accordance with GAAP
(iv) $________
Net Income: (i) minus (ii) plus (iii)
(v)
Noncash Charges for the Borrower on a
consolidated basis with the Subsidiaries for
the immediately preceding period of twelve
calendar months:
$________
(a)
All amortization
$________
(b)
All depreciation
$________
(c)
All deferred income taxes
(d) $________
All non-cash additions to reserves
(insurance, taxes, bad debt, or
otherwise)
$________
(e)
Noncash Charges: sum of (a), (b), (c)
and (d)
(vi) $________
Net Income plus Noncash Charges: total of
line (iv) and line (v)(e)
(vii)
Current Maturities of Long Term Debt (the
principal portion of current maturities of
long-term indebtedness and current $________
obligations on long-term capital leases, as
determined in accordance with GAAP) for the
next succeeding period of 12 calendar months
(viii)
All cash dividends paid by TCBY Enterprises, $________
Inc., to shareholders of TCBY Enterprises,
Inc. for the preceding period of twelve
calendar months
(ix)
Replacement CapEx for the Borrower on a
_________ EXHIBIT A - Page 108
consolidated basis with the Subsidiaries for
the preceding period of twelve calendar
months (estimated for the 12 months
preceding 6/11/93):
(a) $________
Total capital expenditures for the
immediately preceding period of twelve
calendar months (estimated for the 12
months preceding 6/11/93)
(b)
Total non-replacement capital $________
expenditures for the immediately
preceding period of twelve calendar
months (estimated for the 12 months
preceding 6/11/93)
$________
(c)
Replacement CapEx: (a) minus (b)
(x) $________
Subtotal of lines (vii) and (viii) and
(ix)(c)
(xi) _____ to
Fixed Charge Coverage: line (vi) divided by _____
line (x)
_______________MAXIMUM PERMITTED LIENS TO SECURE PURCHASE MONEY
___________________OBLIGATIONS (SECTION 1.1 AND SECTION 6.1)
PERMITTED:
$5,000,00
For the Borrower and the Subsidiaries on a 0.00
consolidated basis:
ACTUAL:
For the Borrower and the Subsidiaries on a
consolidated basis:
(a) Total Liens encumbering the properties
and/or assets of the Borrower and/or the
Subsidiaries, which secure purchase money
obligations incurred by the Borrower and/or
the Subsidiaries in good faith in the
ordinary course of business and not yet due
and payable
$________
________SUBSIDIARY INDEBTEDNESS (SECTION 6.2)
(i) $_______
Total Subsidiary Debt
_________ EXHIBIT A - Page 109
(ii) $_______
Subsidiary liability for payment of the
Indebtedness
(iii) $_______
Debt described on Schedule 4.12 of the
Agreement
(iv)
Total of (i) Subsidiary liability for trade
indebtedness and liability on negotiable
instruments resulting from the endorsement
of such instruments for collection or
deposit to the extent the same are incurred $_______
in good faith in the ordinary course of
business plus ( ii) purchase money
obligations incurred by the Subsidiaries in
good faith in the ordinary course of
business and secured by Permitted Liens
(v) $-0-
tal Subsidiary Debt: line (i) above minus To
the sum of (ii) through (iv)
EXTENSION OF CREDIT AND INVESTMENTS (SECTION 6.3)
PERMITTED:
For the Borrower and the Subsidiaries, on a
consolidated basis, the aggregate amount of
credit extended to Persons (other than (a)
open accounts from sales and services and
other trade receivables in the ordinary
course of business, (b) credit between and
among the Borrower and wholly owned
Subsidiaries, (c) "slotting" allowances
funded in connection with the acquisition of
store space for retail yogurt sales
activities, and (d) equipment placement
contracts entered into in connection with
yogurt retail sales activities if the
Borrower or Subsidiaries retain ownership of
the equipment) the value of Stock and plus
other investments in any Person (unless the
Borrower and/or its wholly-owned
Subsidiaries own, legally and beneficially,
50% or more of all Stock and/or other
interests in such Person or the Borrower
holds the requisite power and ownership
interests to solely direct and manage such
Person's business and affairs pursuant to
its charter, articles, bylaws and/or other
governing documents), outstanding at any
time may not exceed, on an aggregate basis,
an amount equal to twenty-five percent of
the Tangible Net Worth of the Borrower and
_________ EXHIBIT A - Page 110
the Subsidiaries, on a consolidated basis
ACTUAL:
(i)
Tangible Net Worth of the Borrower on a
consolidated basis with the Subsidiaries:
(a)
The book value of all assets of the
Borrower on a consolidated basis with
the Subsidiaries (other than patents,
patent rights, trademarks, trade names, $________
franchises, copyrights, licenses,
goodwill, research and development
expenses, unless prepaid, and similar
intangible assets) after appropriate
deductions, all determined in
accordance with GAAP
(b)
All Debt of the Borrower on a
consolidated basis with the
Subsidiaries (all items of
indebtedness, obligations and $________
liabilities of the Borrower and the
Subsidiaries on a consolidated basis,
whether mature or unmatured, liquidated
or unliquidated, direct or indirect,
absolute or contingent, joint or
several, that should be classified as
liabilities in accordance with GAAP
$________
(c)
Guarantee Obligations
$________
(d)
Contingent liabilities with respect to
letters of credit
$________
(e)
Tangible Net Worth: (a) minus (b)
minus (c) minus (d)
$________
(f)
25% of Tangible Net Worth (line (e) x
.25)
(ii)
The aggregate amount of credit extended by
the Borrower and the Subsidiaries, on a
consolidated basis to Persons (other than
(a) open accounts from sales and services in
_________ EXHIBIT A - Page 111
the ordinary course of business, (b) credit
between or among the Borrower and wholly
owned Subsidiaries, (c) "slotting"
allowances fun ded in connection with the
acquisition of store space for retail yogurt
sales activities, and (d) equipment
placement contracts entered into in
connection with yogurt retail sales
activities if the Borrower or Subsidiaries $________
retain ownership of the equipment) the us
value of Stock and other investments in any
Person (unless the Borrower and/or its
wholly-owned Subsidiaries own, legally and
beneficially, 50% or more of all Stock
and/or other interests in such Person or the
Borrower holds the requisite power and
ownership interests to solely direct and
manage such Person's business and affairs
pursuant to its charter, articles, bylaws
and/or other governing documents)
__GUARANTEE OBLIGATIONS OF SUBSIDIARIES (SECTION_
____6.4)____6.4)____6.4)
(i)
Total obligations of other Persons which the
Subsidiaries guarantee or for which the
Subsidiaries are otherwise, directly or
indirectly, responsible (whether by
agreement to purchase the indebtedness of
another Person, agreement to furnish funds
to another Person through the furnishing of
goods, supplies or services, by way of Stock
purchase, capital contribution, advance or
loan for the purpose of paying or
discharging, or causing the payment or
discharge, of the indebtedness of any other $________
Person (excluding, however, the total
amounts that result from the endorsement of
negotiable instruments by the Subsidiaries
in the ordinary course of business for
deposit or collection and the continuing
liability of any Subsidiary, as lessee,
pursuant to an operating lease that is
assigned to and assumed by a franchisee in
connection with such franchisee's
acquisition of a yogurt store from such
Subsidiary)
_________ EXHIBIT A - Page 112
__________SCHEDULE 2
_________ EXHIBIT A - Page 113
_ EXHIBIT B
Bank One Texas, N.A.
1717 Main Street
3rd Floor
Dallas, Texas 75201
Re: Second Amended and Restated Loan Agreement dated as of April 7,
1995 by and between Bank One, Texas, N.A. and TCBY Enterprises,
Inc. (the " Agreement")
Gentlemen:
Pursuant to Section 2.9 of the Agreement the undersigned hereby
confirms its request made on ________________, 19___ for one or more or
Eurodollar Loans to be made on _____________, 19__ in the following
amounts and for the following Interest Periods (30, 60, 90 or 180 days):
Loan Amount Interest Period
Eurodollar Loan #1 $ days
Eurodollar Loan #2 $ days
Eurodollar Loan #1 represents a _______________
(continuation/conversion) of the _______________________ (Stated Rate or
Eurodollar Loan) made on ________________ in the amount of
$_____________.
Eurodollar Loan #2 represents a _______________
(continuation/conversion) of the _______________________ (Stated Rate or
Eurodollar Loan) made on ________________ in the amount of
$_____________.
The representations and warranties contained or referred to in
Section 4 of the Agreement are true and accurate on and as of the
effective date of the conversion made the basis hereof as though made at
and as of such date, and no Default or Event of Default has occurred and
is continuing or will result from the conversion made the basis hereof.
TCBY ENTERPRISES, INC.
By:
Printed Name:
Title:
Date:
