<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report under Section 13 or 15 (d) of
The Securities Exchange Act of 1934
For Quarter Ended: Commission File Number
July 12, 1995 0-14370
BUFFETS, INC.
(Exact name of registrant as specified in its charter)
Minnesota 41-1462294
(State of incorporation) (I.R.S. Employer Identification No.)
10260 Viking Drive, Suite 100, Eden Prairie, MN 55344
(Address of principal executive offices)
(612) 942-9760
(Registrant's telephone number)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
----- -----
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable date.
Class Outstanding as of August 16, 1995
----- ---------------------------------
Common Stock, $.01 par value 31,115,569 shares
<PAGE>
BUFFETS, INC. AND SUBSIDIARIES
INDEX
Page No.
--------
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets-
December 28, 1994 and July 12, 1995. . . . . . . . 3
Consolidated Statements of Earnings-
Twenty-Eight Weeks ended July 13, 1994
and July 12, 1995 and Twelve Weeks ended
July 13, 1994 and July 12, 1995 . . . . . . . . . 4
Consolidated Statements of Cash Flows-
Twenty-Eight Weeks ended July 13, 1994
and July 12, 1995. . . . . . . . . . . . . . 5
Notes to Consolidated Financial
Statement . . . . . . . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . 7
PART II. OTHER INFORMATION. . . . . . . . . . . . . . 11
2
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. CONSOLIDATED FINANCIAL STATEMENTS
BUFFETS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
DECEMBER 28, JULY 12,
ASSETS 1994 1995
----------- ----------
(IN THOUSANDS)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents. . . . . . . . . . . $ 6,822 $ 11,128
Receivable from landlords . . . . . . . . . . . 4,291 2,483
Inventory . . . . . . . . . . . . . . . . 2,438 2,789
Notes receivable . . . . . . . . . . . . . . 133 83
Other current assets . . . . . . . . . . . . 1,587 2,551
Deferred income taxes . . . . . . . . . . . . 5,249 5,949
-------- --------
TOTAL CURRENT ASSETS . . . . . . . . . . . 20,520 24,983
-------- --------
PROPERTY AND EQUIPMENT:
Land . . . . . . . . . . . . . . . . . 3,936 5,026
Building . . . . . . . . . . . . . . . . 8,013 12,651
Equipment . . . . . . . . . . . . . . . . 141,261 154,403
Leasehold improvements . . . . . . . . . . . . 95,852 106,702
-------- --------
249,062 278,782
Less accumulated depreciation and amortization . . . . 65,962 78,246
-------- --------
183,100 200,536
GOODWILL, net of accumulated amortization of $1,046
and $1,163, respectively . . . . . . . . . . . 4,319 4,782
OTHER ASSETS . . . . . . . . . . . . . . . . 587 525
-------- --------
$208,526 $230,826
-------- --------
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . . . . $ 21,757 $ 20,608
Accrued payroll and related benefits . . . . . . . 10,308 12,396
Accrued rents . . . . . . . . . . . . . . 7,685 7,909
Accrued sales taxes . . . . . . . . . . . . . 1,998 2,743
Other accrued expenses . . . . . . . . . . . . 6,584 9,046
Income taxes . . . . . . . . . . . . . . . 356 2,977
-------- --------
TOTAL CURRENT LIABILITIES 48,688 55,679
LONG-TERM DEBT . . . . . . . . . . . . . . . 7,000 6,000
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES . . . . 544 611
DEFERRED INCOME TAXES . . . . . . . . . . . . . 10,772 11,122
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value; authorized 5,000 shares;
none issued and outstanding
Common stock, $.01 par value; authorized 60,000 shares;
issued and outstanding 30,939 and
31,101 shares, respectively . . . . . . . . . 309 311
Additional paid-in capital . . . . . . . . . . 49,158 50,668
Retained earnings . . . . . . . . . . . . . 92,055 106,435
-------- --------
TOTAL STOCKHOLDERS' EQUITY . . . . . . . . . 141,522 157,414
-------- --------
$208,526 $230,826
-------- --------
-------- --------
</TABLE>
See Notes to Consolidated Financial Statements.
3
<PAGE>
BUFFETS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
TWENTY-EIGHT WEEKS ENDED TWELVE WEEKS ENDED
------------------------ ------------------
JULY 13, JULY 12, JULY 13, JULY 12,
1994 1995 1994 1995
-------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNT)
<S> <C> <C> <C> <C>
RESTAURANT SALES . . . . . . . . $211,410 $261,372 $98,922 $119,282
RESTAURANT COSTS:
Food Costs . . . . . . . . . . 72,428 91,337 33,921 41,505
Labor Costs . . . . . . . . . . 56,107 73,668 25,313 33,163
Direct and occupancy costs . . . 46,032 59,256 20,898 26,633
-------- -------- ------- --------
Total restaurant costs . . . . . 174,567 224,261 80,132 101,301
-------- -------- ------- --------
RESTAURANT PROFITS . . . . . . . 36,843 37,111 18,790 17,981
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES . . . . 15,663 14,034 7,480 5,820
-------- -------- ------- --------
21,180 23,077 11,310 12,161
OTHER INCOME (EXPENSE) . . . . . . 424 118 250 52
-------- -------- ------- --------
EARNINGS BEFORE INCOME TAXES . . . 21,604 23,195 11,560 12,213
INCOME TAXES . . . . . . . . . . 8,636 8,815 4,616 4,642
-------- -------- ------- --------
NET EARNINGS . . . . . . . . . . $ 12,968 $ 14,380 $ 6,944 $ 7,571
-------- -------- ------- --------
-------- -------- ------- --------
NET EARNINGS PER COMMON AND
COMMON EQUIVALENT SHARE . . . . . $.41 $.46 $.22 $.24
-------- -------- ------- --------
-------- -------- ------- --------
WEIGHTED AVERAGE COMMON AND
COMMON EQUIVALENT SHARES
OUTSTANDING . . . . . . . . . . 31,785 31,231 31,603 31,331
</TABLE>
See Notes to Consolidated Financial Statements.
4
<PAGE>
BUFFETS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
TWENTY-EIGHT WEEKS ENDED
-------------------------
JULY 13, JULY 12,
1994 1995
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings . . . . . . . . . . . . . . $12,968 $14,380
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Depreciation and amortization . . . . . . . . 9,897 12,946
Tax benefit from early disposition of common stock 729 146
Deferred income taxes . . . . . . . . . . 594 (350)
Changes in assets and liabilities net of
acquisitions:
Inventory . . . . . . . . . . . . . (338) (351)
Other current assets . . . . . . . . . . (1,126) (909)
Other assets . . . . . . . . . . . . (243) 74
Accounts payable . . . . . . . . . . . 4,333 (1,149)
Accrued payroll and related benefits . . . . 2,085 2,088
Other accrued expenses . . . . . . . . . 2,724 3,431
Income taxes currently payable . . . . . . 2,441 2,621
------- -------
Total adjustments . . . . . . . . . . 21,096 18,547
------- -------
Net cash provided by operating activities . . 34,064 32,927
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures, net of retirements . . . . . (29,272) (32,337)
Cash received from landlords . . . . . . . . 3,718 4,240
Purchase of Des Moines Royal Fork restaurant . . . (850)
------- -------
Net cash used in investing activities . . . (25,554) (28,987)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of employee's stock options . 1,265 1,366
Payments of long-term debt . . . . . . . . . (1,000)
------- -------
Net cash provided by (used in) financing
activities . . . . . . . . . . . . 1,265 366
------- -------
NET INCREASE IN CASH AND CASH EQUIVALENTS . . . . . 9,775 4,306
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR . . . 12,193 6,822
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD . . . . $21,968 $11,128
------- -------
------- -------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (net of capitalized interest of $19,000 and
$243,000 in 1994 and 1995, respectively) . . . . $ 3 $ 95
Income taxes . . . . . . . . . . . . . 4,872 6,398
</TABLE>
See Notes to Consolidated Financial Statements.
5
<PAGE>
BUFFETS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of Management, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting only of normal
recurring adjustments) necessary to present fairly the financial position
of Buffets, Inc. and subsidiaries as of July 12, 1995 and the results of
operations for the twelve weeks ended July 13, 1994 and July 12, 1995 and
the results of operations and cash flows for the twenty-eight weeks ended
July 13, 1994 and July 12, 1995.
2. These statements should be read in conjunction with the Notes to
Consolidated Financial Statements contained in the Company's Annual Report
on Form 10-K for the fiscal year ended December 28, 1994 and with
Management's Discussion and Analysis of Financial Condition and Results of
Operations appearing on pages 7 thru 10 of this quarterly report.
6
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
The Company operates on a fifty-two or fifty-three week fiscal year,
which ends on the Wednesday nearest December 31. The Company's first quarter
consists of sixteen weeks; all other quarters are comprised of twelve weeks.
When a fifty-three week year occurs, the Company's fourth quarter consists of
thirteen weeks.
RESULTS OF OPERATIONS
TWELVE WEEKS ENDING JULY 12, 1995
RESTAURANT SALES. Restaurant sales of $119.3 million during the second quarter
of 1995 represented a 20.6% increase over sales of $98.9 million for the
comparable period of 1994, primarily due to sales generated by new restaurants.
Five new restaurants opened in the second quarter of 1995, bringing the total
number of Company-owned restaurants to 230 at the end of the quarter, compared
to 185 restaurants open at the end of the 1994 period. Average weekly sales per
restaurant for the second quarter of 1995 decreased 3.7% to $43,906 from $45,589
in the comparable period of 1994. Comparable restaurant sales were down 5.9%
for the comparable periods. The Company's price increases have been nominal.
RESTAURANT COSTS. As a percentage of restaurant sales, total restaurant costs
increased to 84.9% for the second quarter of 1995 from 81.0% for the second
quarter of 1994. Food costs as a percentage of restaurant sales increased to
34.8% from 34.3%, due primarily to increases in the costs of fruits, vegetables
and general groceries which were partially offset by decreases in the cost of
beef; labor costs increased to 27.8% of sales from 25.6% due to increased
staffing and higher wage rates of hourly employees due to the Company's
introduction of a customer service program in the first quarter of 1995. The
Company anticipates food and labor costs to be higher than 1994 throughout 1995
due to the customer service program. Direct and occupancy costs increased to
22.3% from 21.1%, due to increases in various restaurant costs and lower sales
volumes.
7
<PAGE>
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses as a percentage of restaurant sales decreased to 4.9% in
the second quarter of 1995 from 7.6% in the second quarter of 1994. Expenses in
absolute terms decreased 22.2% to $5.8 million for the second quarter of 1995
from $7.5 million for the comparable period of 1994, primarily due to the
decrease in advertising costs to .7% in 1995 from 2.1% in 1994 as a percentage
of restaurant sales. The Company will have $3 million in marketing expenditures
in the third quarter relating to the Company's new marketing campaign, which
will cover approximately 50% of the Old Country Buffet restaurants.
INCOME TAXES. Income taxes were 38.0% of earnings before taxes for the quarter
ended July 12, 1995, compared to 39.9% for the quarter ended July 13, 1994,
resulting from lower effective tax rates.
TWENTY-EIGHT WEEKS ENDING JULY 12, 1995
RESTAURANT SALES. For the first twenty-eight weeks of 1995, restaurant sales
increased 23.6% to $261.4 million from $211.4 million in 1994, primarily due to
sales generated by new restaurants. Twenty-two new restaurants opened in the
first half of 1995, bringing the total number of company-owned restaurants to
230 at the end of the period, compared to 185 restaurants open at the end of the
1994 period. The average weekly sales per restaurant decreased by 1.1% to
$42,168 from $42,650 in 1994. Comparable restaurant sales were down 3.5%. The
Company's price increases have been nominal.
RESTAURANT COSTS. Restaurant costs for the twenty-eight weeks in 1995 increased
to $224.3 million from $174.6 million in 1994. As a percentage of sales, 1995
costs were 85.8% and 1994 costs were 82.6%. Food costs increased to 34.9% from
34.3%, due primarily to increases in the cost of fruits, vegetables, general
groceries, bakery and dessert items; labor costs increased to 28.2% from 26.5%
due to increased staffing and higher wage rates of hourly employees resulting
from the introduction of a customer service program; and direct and occupancy
costs increased to 22.7% in 1995 from 21.8% in 1994, due to increases in various
restaurant costs and lower sales volumes.
8
<PAGE>
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. For the twenty-eight weeks of
1995, selling, general and administrative expenses decreased to $14.0 million
from $15.7 million in 1994. This decrease was primarily due to a decrease in
advertising costs of $2.76 million which was partially offset by increases in
training and opening costs due to the opening of 22 restaurants during the
twenty eight week period compared to 11 in the same period of 1994. As a
percentage of sales, selling, general and administrative expenses decreased to
5.4% in 1995 from 7.4% in 1994. Advertising for 1995 was .5% of sales compared
to 1.8% in 1994. The Company expects advertising expenditures to be 1% to 1.5%
of restaurant sales for the current year as a whole, with expanded advertising
starting in the third quarter as previously discussed.
INCOME TAXES. Income taxes were 38.0% of earnings before income taxes for 1995
and 40.0% in 1994, resulting from lower effective tax rates.
LIQUIDITY AND CAPITAL RESOURCES
The Company has an unsecured $40 million revolving line of credit which was
amended August 4, 1995. The Company is required to pay a quarterly commitment
fee equal to 1/4 of 1% per annum of the unused balance. On June 30, 1998,
providing no default or event of default has occurred and is continuing, the
line of credit is convertible, at the Company's option, to a three year term
loan, maturing on June 30, 2001. As of July 12, 1995, the Company had
borrowings of $6 million outstanding under this credit line.
The Company continues to require substantial amounts of capital to fund its
growth. The Company currently expects to open approximately 35 to 40 new
restaurants during 1995, with 25 already opened at August 2, 1995. The Company
expects to spend an aggregate of approximately $16 to $27 million during the
remainder of 1995, depending on the level of contributions obtained from
landlords for leasehold improvements and the amount of land purchased for free
standing buildings. The Company expects to spend approximately $10 to $15
million during 1995 and 1996 remodeling restaurants to include an improved
bakery/dessert area. The Company anticipates that, as it further pursues the
development of freestanding locations, the cost per location and
9
<PAGE>
related cash requirements will increase substantially over prior years and these
costs will not be offset by landlord contributions that typically have been
associated with strip mall locations. The capital expenditure required for a
freestanding location can be over 100% greater than for a mall location. The
Company estimates that approximately 20% of 1995 new locations
will be purchased freestanding units, and that approximately another 20% will be
freestanding leased units. Sources of capital for these restaurant development
and remodeling projects are anticipated to be funds provided by operations,
credit received from trade suppliers, landlord contributions to leasehold
improvements and current bank financing. The Company believes that these
sources will be adequate to finance operations and the additional restaurants
and remodeling costs included in the Company's restaurant development plans for
the next twelve months. However, in order to remain prepared for further
significant growth in future years, the Company will continue to evaluate its
financing needs and seek additional funding if appropriate.
10
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
No Material developments.
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Shareholders of the Company was held on May 9,
1995. At the meeting the five directors of the Company were
reelected, the proposed 1995 stock option plan was approved, and the
appointment of independent auditors for the current year was approved,
by the following votes:
Election of Directors FOR WITHHOLD NONVOTES
--------------------- ---------- -------- --------
Roe H. Hatlen 27,096,033 157,435 0
Raymond A. Lipkin 27,097,609 155,859 0
Alan S. McDowell 27,097,659 155,809 0
Keith H. Erickson 27,097,089 156,379 0
David Michael Winton 27,096,459 157,009 0
FOR AGAINST ABSTAIN NONVOTES
---------- ------- ------- --------
1995 Stock Option Plan 24,275,389 2,696,440 190,404 0
Approval of auditors 27,109,193 45,964 99,407 0
Item 5. Other Information
None
Item 6. Exhibits and reports on Form 8-K
a) Exhibits
10(j) Amendment No. 5 to Amended and Restated Credit Agreement dated as of
August 4, 1995 between the Company and First Bank National
Association
27) Financial Data Schedule
b) There were no reports on Form 8-K filed during the twelve weeks
ended July 12, 1995.
11
<PAGE>
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.
BUFFETS, INC.
(Registrant)
August 24, 1995
/s/ Roe H. Hatlen
---------------------------
Roe H. Hatlen
Chairman of the Board,
Chief Executive Officer
(Principal Executive Officer)
/s/ Clark C. Grant
---------------------------
Clark C. Grant
Executive Vice President of
Finance and Administration
and Treasurer
(Principal Financial
Officer)
/s/ Marguerite C. Nesset
---------------------------
Marguerite C. Nesset
Vice President and
Controller(Principal
Accounting Officer)
<PAGE>
EXHIBIT INDEX
Exhibits Page
-------- ----
10(j) Amendment No. 5 to Amended and Restated
Credit Agreement dated as of August 4,
1995 between the Company and First Bank
National Association . . . . . . . . . Filed
Electronically
27 Financial Data Schedule . . . . . . . Filed
Electronically
____________________
<PAGE>
EXHIBIT 10(j)
AMENDMENT NO. 5
TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDMENT NO. 5 TO AMENDED AND RESTATED CREDIT AGREEMENT, dated as of
August 4, 1995 (this "Amendment"), between BUFFETS, INC., a Minnesota
corporation (the "Borrower"), and FIRST BANK NATIONAL ASSOCIATION, a national
banking association (the "Bank").
WITNESSETH:
WHEREAS, the Borrower and the Bank are the parties to that certain Amended
and Restated Credit Agreement dated as of April 16, 1993, as amended by that
certain Amendment No. 1 to Amended and Restated Credit Agreement dated as of
June 29, 1993, that certain Amendment No. 2 to Amended and Restated Credit
Agreement dated as of March 24, 1994, that certain Amendment No. 3 to Amended
and Restated Credit Agreement dated April 8, 1994 and that certain Consent and
Amendment No. 4 to Amended and Restated Credit Agreement dated as of June 30,
1994 (as so amended, the "Agreement"); and
WHEREAS, the Borrower and the Bank desire to amend the Agreement to extend
the maturity thereof, and to make other changes as set forth herein.
NOW, THEREFORE, the parties agree as follows:
1. DEFINED TERMS. All capitalized terms used in this Amendment shall,
except where the context otherwise requires, have the meanings set forth in the
Agreement.
2. AMENDMENT. The Agreement is hereby amended as follows:
(a) AMENDED DEFINITIONS. The following definitions in Article I of
the Agreement are amended in their entirety to read as follows:
"DOMESTIC RESERVE PERCENTAGE" shall mean, as of any day, that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board for determining the maximum reserve
requirement (including without limitation any basic, supplemental or
emergency reserves) for a member bank of the Federal Reserve System,
with deposits comparable in amount to those held by the Bank, in
respect of new non-personal time deposits in dollars having a maturity
comparable to the related
<PAGE>
Interest Period and in an amount of $100,000 or more. The rate of
interest applicable to any outstanding CD Rate Loan shall be adjusted
automatically on and as of the effective date of any change in the
Domestic Reserve Percentage.
"INTEREST PERIOD" shall mean (a) with respect to each Eurodollar
Rate Loan, the period commencing on the date of such Loan or on the
last day of the immediately preceding Interest Period, if any,
applicable to an outstanding Loan and ending seven days or one, two,
three, four or six months thereafter, as the Borrower may elect in the
applicable notice of borrowing, continuation or conversion; PROVIDED
THAT:
(1) Any Interest Period that would otherwise end on a day
which is not a Eurodollar Business Day shall be extended to the
next succeeding Eurodollar Business Day unless such Eurodollar
Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Eurodollar
Business Day;
(2) Any Interest Period that begins on the last Eurodollar
Business Day of a calendar month (or a day for which there is no
numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Eurodollar Business
Day of a calendar month;
(3) No Interest Period in respect of a Eurodollar Rate Loan
outstanding during the Revolving Loan Period shall end after the
date set forth in clause (a) of the definition of Termination
Date, and no Interest Period in respect of a Eurodollar Rate Loan
outstanding during the Term Loan Period shall end after the date
set forth in clause (b) of the definition of Maturity Date; and
(4) Interest Periods shall be selected so that the
installment payments on the Term Loan can be paid without having
to pay a Eurodollar Rate Loan prior to the last day of the
Interest Period applicable thereto.
(b) With respect to each CD Rate Loan, the period commencing on
the date of such Loan or on the last day of the immediately preceding
Interest Period, if any, applicable to an outstanding Loan and ending
7, 30, 60, 90, 120, 150 or 180 days thereafter, as the Borrower may
elect
<PAGE>
in the applicable notice of borrowing, continuation or conversion;
PROVIDED THAT:
(1) Any Interest Period that would otherwise end on a day
which is not a Business Day shall be extended to the next
succeeding Business Day;
(2) No Interest Period in respect of a CD Rate Loan
outstanding during the Revolving Loan Period shall end after the
date set forth in clause (a) of the definition of Termination
Date, and no Interest Period in respect of a CD Rate Loan
outstanding during the Term Loan Period shall end after the date
set forth in clause (b) of the definitions of Maturity Date; and
(3) Interest Periods shall be selected so that the
installment payments on the Term Loan can be paid without having
to pay a CD Rate Loan prior to the last day of the Interest
Period applicable thereto.
"LETTER OF CREDIT TERMINATION DATE" shall mean the earlier of:
(i) June 30, 1998, or (ii) the date upon which the obligation of the
Bank to issue Letters of Credit is terminated pursuant to Section
2.12(c).
"LOAN" shall mean individually or collectively, as the case may
be, the aggregate amount of all outstanding Advances made by the Bank
to the Borrower pursuant to Section 2.01 and shall include all
Reference Rate Loans, CD Rate Loans, Eurodollar Rate Loans and the
Fixed Rate Term Loan.
"MATURITY" of the Note shall mean the earlier of: (a) the date
upon which the Note is declared to be due and payable (or
automatically becomes due and payable) upon the occurrence of an Event
of Default as provided in Article v'; or (b) July 1, 2001.
"NEW NOTE" shall mean the Promissory Note in the form of Exhibit
A attached to Amendment No. 5 to Amended and Restated Credit
Agreement, which shall be the Note from and after the date of such
Amendment No. 5.
"TERMINATION DATE" shall mean the date which is the earlier of:
(a) June 30, 1998; or (b) the date upon which the obligation of the
Bank to make Advances is terminated pursuant to Section 2.01(c).
<PAGE>
"TRANSFORMATION DATE" shall mean July 1, 1998.
(b) DELETED DEFINITIONS. The definitions of "ASSESSMENT RATE"
"DOMESTIC FIXED RATE" "DOMESTIC CD RATE" and "DOMESTIC FIXED RATE LOAN"
shall be deleted in their entirety.
(c) NEW DEFINITIONS. The following definitions are added to Article
I in alphabetical order:
"ADJUSTED CD RATE" shall mean, with respect to each Interest
period applicable to a CD Rate Loan, the sum (rounded upward, if
necessary, to the next one hundredth of one percent) of (a) the rate
per annum obtained by dividing (i) the CD Rate as of the first day of
the Interest Period, by (ii) 1.00 minus the Domestic Reserve
Percentage, plus (b) the annual rate most recently estimated by the
Bank as the then current net annual assessment rate payable by the
Bank to the Federal Deposit Insurance Corporation (or any successor)
for insuring time deposits made in Dollars at the Bank's domestic
offices, plus (c) the cost (converted to an equivalent rate per annum)
of customary brokerage fees incurred by the Bank in obtaining funds by
the sale of its negotiable certificates of deposit
"ADJUSTED EURODOLLAR RATE" shall mean, with respect to each
Interest Period applicable to a Eurodollar Rate Loan, the rate
(rounded upward, if necessary, to the next one hundredth of one
percent) determined by dividing the Eurodollar Rate for such Interest
Period by 1.00 minus the Eurodollar Reserve Percentage.
"APPLICABLE MARGIN" shall mean, with respect to each Reference
Rate Loan, the Applicable Margin set forth in the table below as in
effect from time to time, and with respect to each CD Rate Loan or
Eurodollar Rate Loan, the Applicable Margin set forth in the table
below as in effect on the first day of each Interest Period for such
CD Rate Loan or Eurodollar Rate Loan for such Interest Period, in each
case determined based on the Cash Flow Leverage Ratio calculated as of
the end of the most recent Quarterly Period of the Borrower for which
the Borrower has furnished the financial statements and reports
required under Sections 4.01(iii) (adjustments to the Applicable
Margin to become effective on the first day of the first month after
the date the Borrower is required to deliver its financial statements
for such quarterly period under Section 4.01(iii)).
<PAGE>
<TABLE>
<CAPTION>
Revolving Loan Term Loan
-------------- ---------
Cash Flow Reference Reference
Leverage Ratio Rate CD Rate Eurodollar Rate CD Rate Eurodollar
(in each case to 1.00) Loans Loans Rate Loans Loans Loans Rate Loans
---------------------- ----- ----- ---------- ----- ----- ----------
<S> <C> <C> <C> <C> <C> <C>
Greater than 3.99 0.125% 1.75% 2.00% 0.625% 2.25% 2.50%
3.00 to 3.99 0% 1.50% 1.75% 0.500% 2.00% 2.25%
2.00 to 2.99 0% 1.25% 1.50% 0.500% 1.75% 2.00%
Less than 2.00 0% 1.00% 1.25% 0.500% 1.50% 1.75%
</TABLE>
Notwithstanding the foregoing, if the Borrower has not furnished the
financial statements and reports required under Sections 4.01 (iii)
for any Quarterly Period by the first day of the first month after
such financial statements and reports were required to be delivered,
the Applicable Margin shall be calculated as if the Leverage Ratio as
of the end of such Quarterly Period was greater than 3.99 to 1.00 for
the period from the first day of the first month after such financial
statements and reports were required to be delivered until the first
day of the month following the month in which such financial
statements and reports are delivered.
"CASH FLOW LEVERAGE RATIO" shall mean, on the last day of any
Quarterly Period, the ratio of (a) the sum of (i) Total Interest-
bearing Indebtedness on such date and (ii) eight times lease payments
for restaurant and office facilities pursuant to leases that are not
Capitalized Lease Obligations made or required to be made by the
Borrower and its Consolidated Subsidiaries during the four Quarterly
Periods ended on such date, to (b)the sum of (A) E.B.I.T. for the four
Quarterly Periods ended on such date and (B) depreciation and
amortization deducted in calculating the Borrower's Consolidated net
income for such four Quarterly Periods.
"CD RATE" shall mean, with respect to any CD Rate Loan for any
Interest Period applicable thereto, the rate of interest determined by
the Bank for the relevant Interest Period to be the average (rounded
upward, if necessary, to the nearest 1/100th of 1%) of the rates
quoted to the Bank at approximately 8:00 a.m., Minneapolis time (or as
soon thereafter as practicable), or at the option of the Bank at
approximately the time of the request for a CD Rate Loan if such
request is made later than 8:00 a.m., Minneapolis time, in each case
on the first day of the applicable Interest Period by certificate of
deposit dealers selected by the Bank, in its sole discretion, for the
purchase from the Bank, at face value, of certificates of deposit
issued
<PAGE>
by the Bank in an amount and maturity comparable to the amount and
maturity of the requested CD Rate Loan (or for an Interest Period
shorter than 30 days, for a maturity of 30 days); provided, that in
lieu of determining the rate in the foregoing manner, the Bank may
substitute a rate based on published composite quotations of rates for
certificates of deposit of comparable maturity selected by the Bank.
"CD RATE LOAN" shall mean each portion of the Loan with respect
to which the interest rate is determined by reference to the Adjusted
CD Rate.
"EURODOLLAR BUSINESS DAY" shall mean a Business Day which is also
a day for trading by and between banks in United States dollar
deposits in the interbank Eurodollar market and a day on which banks
are open for business in New York City.
"EURODOLLAR RATE": shall mean, with respect to each Interest
Period applicable to a Eurodollar Rate Loan, the interest rate per
annum (rounded upward, if necessary, to the next one sixteenth of one
percent) at which United States dollar deposits are offered to the
Bank in the interbank Eurodollar market two Eurodollar Business Days
prior to the first day of such Interest Period for delivery in
Immediately Available Funds on the first day of such Interest Period
and in an amount approximately equal to the Loan to which such
Interest Period is to apply as determined by the Bank and for a
maturity comparable to the Interest Period (or, for an Interest Period
shorter than one month, a maturity of one month); provided, that in
lieu of determining the rate in the foregoing manner, the Bank may
substitute the per annum rate (LIBOR) for United States dollars
displayed on the Reuters Screen, LIBO Page, two Business Days prior to
the first day of such Interest Period.
"EURODOLLAR RATE LOAN" shall mean each portion of the Loan with
respect to which the interest rate is determined by reference to the
Adjusted Eurodollar Rate.
"EURODOLLAR RESERVE PERCENTAGE" shall mean, as of any day, that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board for determining the maximum reserve
requirement (including any basic, supplemental or emergency reserves)
for a member bank of the Federal Reserve System, with deposits
comparable in amount to those held by the Bank, in respect of
"Eurocurrency Liabilities" as such term is defined in
<PAGE>
Regulation D of the Board. The rate of interest applicable to any
outstanding Eurodollar Rate Advances shall be adjusted automatically
on and as of the effective date of any change in the Eurodollar
Reserve Percentage.
"FIXED RATE LOAN" shall mean a CD Rate Loan, a Eurodollar Rate
Loan or the Fixed Rate Term Loan.
"TOTAL INTEREST-BEARING INDEBTEDNESS" shall mean at the time of
any determination, the outstanding amount of all Indebtedness of the
Borrower other than liabilities not consisting of Indebtedness for
borrowed money or the deferred purchase price of property incurred in
the ordinary course of business, as determined in accordance with
GAAP.
(d) INTEREST. Section 2.01(f)(i) and (ii) are amended in their
entirety to read as follows:
(i) The Borrower agrees to pay interest on the outstanding
principal amount of the Loan from the date of this Agreement until the
maturity thereof as follows:
(A) On that portion of the outstanding principal amount
thereof maintained from time to time as a Reference Rate Loan, at
a rate per annum equal at all times to the Reference Rate plus
the Applicable Margin;
(B) On that portion of the outstanding principal amount
thereof maintained as a CD Rate Loan during each applicable
Interest Period, at a rate per annum equal at all times to the
Adjusted CD Rate in effect for such Interest Period plus the
Applicable Margin;
(C) On that portion of the outstanding principal amount
thereof maintained as a Eurodollar Rate Loan during each
applicable Interest Period, at a rate per annum equal at all
times to the Adjusted Eurodollar Rate in effect for such Interest
Period plus the Applicable Margin.
(D) During the Term Loan Period, if, in accordance with
Section 2.01(g), the Borrower exercises its options to maintain
the Loan as a Fixed Rate Term Loan, at a rate per annum equal to
the Fixed Term Loan Interest Rate; and
(E) Upon the occurrence and during the
<PAGE>
continuation of an Event of Default at a fluctuating rate per
annum at all times equal to the greater of (1) the rate that
would otherwise be applicable and (2) the Reference Rate PLUS the
Applicable Margin for Reference Rate Loans PLUS 2.00% per annum.
(ii) Interest accrued on the Loan through Maturity shall be
payable as follows:
(A) On that portion of the outstanding principal amount
thereof maintained as a Reference Rate Loan or the Fixed Rate
Term Loan, interest accrued through the last day of each month
shall be payable on the next Monthly Payment Date; and
(B) On that portion of the outstanding principal amount
thereof maintained as a CD Rate Loan or a Eurodollar Rate Loan,
accrued interest shall be payable on the last day of each
applicable Interest Period and, in the case of Interest Periods
of more than three months or 90 days, at the end of each three
month or 90 day period during such Interest Periods.
(e) CONVERSION AND PAYMENT OF LOAN. Section 2.01(g) is amended by
(i) deleting the reference in the third paragraph thereof to "a Reference
Rate Loan" in both places where it appears and substituting "Reference Rate
Loans, CD Rate Loans and/or Eurodollar Rate Loans, as provided herein"
therefor, and (ii) deleting the reference in the fourth paragraph thereof
to "August 1, 1997" and substituting "the first Quarterly Payment Date
after the Transformation Date" therefor.
(f) CALCULATION OF FIXED TERM LOAN INTEREST RATE. Section 2.01(h) is
amended (i) by deleting "Domestic Fixed Rate" where it appears in clause
(i)(x) thereof and substituting "Adjusted CD Rate" therefor, and (ii)
deleting clause (i)(y) thereof and substituting the following therefor:
(y) the Applicable Margin for CD Rate Loans during the Term Loan
Period, determined as of the Transformation Date;
(g) INTEREST RATE ELECTION. Section 2.02 is amended in its entirety
to read as follows:
2.02 ELECTION BY BORROWER. On the terms and subject to the
limitations hereof, the Borrower shall have the option at any time and
from time to time to convert all or any portion of the Loan into
Reference Rate Loans, Eurodollar Rate Loans or CD Rate Loans, or to
continue a
<PAGE>
Eurodollar Rate Loan or a CD Rate Loan as such; provided, however that
a Eurodollar Rate Loan or a CD Rate Loan may be converted or continued
only on the last day of the Interest Period applicable thereto and no
Loan may be converted or continued as a Eurodollar Rate Loan or a CD
Rate Loan if a Default or Event of Default has occurred and is
continuing on the proposed date of continuation or conversion. Loans
may be converted to, or continued as, Eurodollar Fate Loans or CD Rate
Loans only in amounts of $100,000 or an integral multiple thereof.
The Borrower shall give the Bank written notice of any continuation or
conversion of any Loan and such notice must be given so as to be
received by the Bank not later than 11:00 a.m. (Minneapolis time) two
Eurodollar Business Days prior to requested date of conversion or
continuation in the case of the continuation of, or conversion to, a
Eurodollar Rate Loan and not later than 11:00 a.m. (Minneapolis time)
on the date of the requested continuation of a CD Rate Loan or
conversion to a CD Rate Loan or Reference Rate Loan. Each such notice
shall specify (a) the amount to be continued or converted, (b) the
date for the continuation or conversion (which must be (i) the last
day of the preceding Interest Period for any continuation or
conversion of Eurodollar Rate Loans or CD Rate Loans, (ii) a
Eurodollar Business Day in the case of conversions to or continuations
as Eurodollar Loans, and (iii) a Business Day in the case of
continuations as CD Rate Loans or conversions to CD Rate Loans or
Reference Rate Loans), and (c) in the case of conversions to or
continuations as Eurodollar Fate Loans or CD Rate Loans, the Interest
Period applicable thereto. Any notice given by the Borrower under
this Section shall be irrevocable. If the Borrower shall fail to
notify the Bank of the continuation of any Eurodollar Rate Loan or CD
Rate Loan or of the conversion of a Eurodollar Rate Loan to a CD Rate
Loan or vice versa within the time required by this Section, such Loan
shall, on the last day of the Interest Period applicable thereto,
automatically be converted into a Reference Rate Loan of the same
principal amount.
(h) INCREASED COSTS, ETC. Section 2.03 is amended in its
entirety to read as follows:
2.03 INCREASED COSTS. ETC.
(a) If any Regulatory Change:
(i) Shall subject the Bank to any tax, duty or other
charge with respect to its Fixed Rate Loans, the Revolving
Note, or its obligation to
<PAGE>
make Fixed Rate Loans or shall change the basis of taxation
of payment to the Bank of the principal of or interest on
Fixed Rate Loans or any other amounts due under this
Agreement in respect of Fixed Rate Loans or its obligation
to make Fixed Rate Loans (except for changes in the rate of
tax on the overall net income of the Bank imposed by the
jurisdiction in which the Bank's principal office is
located); or
(ii) shall impose, modify or deem applicable any
reserve, special deposit, capital requirement or similar
requirement (including, without limitation, any such
requirement imposed by the Board, but excluding (i) with
respect to any CD Fate Loan or the Fixed Fate Term Loan, any
such requirement to the extent included in calculating the
applicable Adjusted CD Rate and (ii) with respect to any
Eurodollar Rate Loan any such requirement to the extent
included in calculating the applicable Adjusted Eurodollar
Rate) against assets of, deposits with or for the account
of, or credit extended by, the Bank's Applicable Lending
Office or shall impose on the Bank (or its Applicable
Lending Office) or on the United States market for
certificates of deposit or the interbank Eurodollar market
any other condition affecting its Fixed Rate Loans, the
Revolving Note or its obligation to make Fixed Fate Loans;
and the result of any of the foregoing is to increase the cost to
the Bank of making or maintaining any Fixed Fate Loan, or to
reduce the amount of any sum received or receivable by the Bank
under this Agreement or under the Note, then, within five days
after demand by the Bank, the Borrower shall pay to the Bank such
additional amount or amounts as will compensate the Bank for such
increased cost or reduction. The Bank will promptly notify the
Borrower of any event of which it has knowledge, occurring after
the date hereof, which will entitle the Bank to compensation
pursuant to this Section; provided however, that the Borrower's
liability for additional amounts computed in accordance with this
Section shall be neither changed nor waived by the failure to
give such notice. If the Bank fails to give such notice within
45 days after it obtains knowledge of such an event, the Bank
shall, with respect to compensation payable pursuant to this
Section, only be entitled to
<PAGE>
payment under this Section for costs incurred from and after the
date 45 days prior to the date that the Bank does give such
notice. A certificate of the Bank claiming compensation under
this Section, setting forth the additional amount or amounts to
be paid to it hereunder and stating in reasonable detail the
basis for the charge and the method of computation, shall be
rebuttable presumptive evidence of the matters stated therein.
In determining such amount, the Dank may use any reasonable
averaging and attribution methods. Failure on the part of the
Bank to demand compensation for any increased costs or reduction
in amounts received or receivable with respect to any Interest
Period shall not constitute a waiver of the Bank's rights to
demand compensation for any increased costs or reduction in
amounts received or receivable in any subsequent Interest Period.
(c) If, on or prior to the date for determining the
Adjusted CD Rate or the Adjusted Eurodollar Rate in respect of
the Interest Period for any CD Rate Loan or Eurodollar Rate Loan,
the Bank determines (which determination shall be conclusive and
binding, absent error) that:
(i) deposits in dollars (in the applicable amount) are
not being made available to the Bank in the relevant market
for such Interest Period, or
(ii) the Adjusted CD Rate or the Adjusted Eurodollar
Rate, as the case may be, will not adequately and fairly
reflect the cost to the Bank of funding or maintaining CD
Rate Loans or Eurodollar Rate Loans for such Interest
Period,
the Bank shall forthwith give notice to the Borrower of such
determination, whereupon the obligation of the Bank to make or
continue, or to convert any Loans to, CD Rate Loans or Eurodollar
Rate Loans, as the case may be, shall be suspended until the Bank
notifies the Borrower that the circumstances giving rise to such
suspension no longer exist. While any such suspension continues,
all further Loans by the Bank shall be made with an interest rate
option to which such suspension does not apply. No such
suspension shall affect the interest rate then in effect during
the applicable Interest Period for any CD Rate Loan or Eurodollar
Rate Loan outstanding at the time such suspension is
<PAGE>
imposed.
(d) If any Regulatory Change shall make it unlawful or
impossible for the Bank to make, maintain or fund any Fixed Rate
Loans, the Bank shall notify the Borrower, whereupon the
obligation of the Bank to make or continue, or to convert any
Loans to, CD Rate Loans or Eurodollar Rate Loans, as the case may
be, shall be suspended until the Bank notifies the Borrower that
the circumstances giving rise to such suspension no longer exist.
If the Bank determines that it may not lawfully continue to
maintain any CD Rate Loans or Eurodollar Rate Loans, as the case
may be, to the end of the applicable Interest Periods, all of the
affected Loans shall be automatically converted to Reference Rate
Loans as of the date of the Bank's notice, and upon such
conversion the Borrower shall indemnify the Bank in accordance
with Section 2.04.
(e) In the event that any Regulatory Change reduces or
shall have the effect of reducing the rate of return on the
Bank's capital or the capital of its parent corporation (by an
amount the Bank deems material) as a consequence of the
Commitment and/or the Loan to a level below that which the Bank
or its parent corporation could have achieved but for such
Regulatory Change (taking into account the Bank's policies and
the policies of its parent corporation with respect to capital
adequacy), then the Borrower shall, within five days after
written notice and demand from the Bank, pay to the Bank
additional amounts sufficient to compensate the Bank or its
parent corporation for such reduction. Any determination by the
Bank under this Section and any certificate as to the amount of
such reduction given to the Borrower by the Bank shall be
rebuttable presumptive evidence of the matters stated therein.
The Bank shall promptly give the Borrower written notice of any
Regulatory Change or other circumstances which may result in
increased costs under this Section; PROVIDED, HOWEVER, that the
Borrower's liability for additional amounts computed in
accordance with this Section shall be neither changed nor waived
by any failure to give such notice.
(i) DELETION. Section 2.05 is deleted in its entirety and the
following is substituted therefor:
2.05 [INTENTIONALLY OMITTED]
<PAGE>
(j) FUNDING LOSSES. Section 2.04 is amended in its entirety to read
as follows:
2.04 FUNDING LOSSES.
(a) The Borrower shall compensate the Bank, upon its
written request, for all losses, expenses and liabilities
(including any interest paid by the Bank to lenders of funds
borrowed by it to make or carry Fixed Rate Loans to the extent
not recovered by the Bank in connection with the reemployment of
such funds and including loss of anticipated profits) which the
Bank may sustain: (i) if for any reason, other than a default by
the Bank, a funding of a Fixed Rate Loan does not occur on the
date specified therefor in the Borrower's request or notice as to
such Fixed Rate Loan under Section 2.02, or (li) if, for whatever
reason (including, but not limited to, acceleration of the
maturity of Loans following an Event of Default), any repayment
of a Fixed Rate Loan, or a conversion pursuant to Section
2.03(c), occurs on any day other than the last day of the
Interest Period applicable thereto. The Bank's request for
compensation shall set forth the basis for the amount requested
and shall be final, conclusive and binding, absent error.
(b) The Bank shall be entitled to fund and maintain its
funding of CD Rate Loans and Eurodollar Rate Loans in any manner
it may elect, it being understood, however, that for the purposes
of this Agreement all determinations hereunder (including, but
not limited to, determinations under Section 2.04(a)) shall be
made as if the Bank had actually funded and maintained each CD
Rate Loan and Eurodollar Rate Loan during each Interest Period
through the issuance of its certificates of deposit, or the
purchase of deposits, having a maturity corresponding to the last
day of the Interest Period and bearing an interest rate equal to
the CD Rate or the Eurodollar Rate, as the case may be, for such
Interest Period.
(j) EVENTS OF DEFAULT. Section 6.01(h) is amended by deleting
"$500,000" where it appears therein and substituting "$1,000,000" therefor.
3. CONDITIONS AND EFFECTIVENESS. This Amendment shall become effective
upon satisfaction of the following conditions:
(a) The Borrower and the Bank shall each have duly
<PAGE>
executed and delivered, and each New Subsidiary shall have duly
acknowledged and delivered, this Amendment No. 5.
(b) The Borrower shall have duly executed and delivered the New Note
to the Bank.
(c) The Bank shall have received copies of all corporate action taken
by the Borrower to authorize the execution, delivery and performance of
this Amendment and the New Note and borrowing hereunder, and by each New
Subsidiary to authorize its acknowledgment of this Amendment, certified by
the Secretary of the Borrower or such New Subsidiary as of the date of this
Amendment, together with such other papers as the Bank shall reasonably
require.
(d) The Bank shall have received a Certificate of Good Standing
certified by the Minnesota Secretary of State for the Borrower and each New
Subsidiary dated no more than 10 days prior to execution of this Amendment
No. 5.
(e) The Bank shall have received a certificate of the Secretary or
Assistant Secretary of the Borrower and each New Subsidiary to the effect
that there have been no amendments to the Articles of Incorporation or
Bylaws of such corporation since the date of the most recent certification
thereof to the Bank.
4. REPRESENTATIONS AND WARRANTIES. To induce the Bank to enter into the
Amendment:
(a) the Borrower hereby confirms, reaffirms and restates the
representations and warranties set forth in Article III of the Agreement as
of the date hereof.
(b) the Borrower hereby represents and warrants that the execution,
delivery and performance by the Borrower of this Amendment and any other
loan documents to which the Borrower is a party have been duly authorized
by all necessary corporate action, do not require any approval or consent
of, or any registration, qualification or filing with, any governmental
agency or authority or any approval or consent of any other Person
(including, without limitation, any stockholder), and do not and will not
conflict with, result in any violation of or constitute any default under,
any provision of the Borrower's articles of incorporation or bylaws, any
agreement binding on or applicable to the Borrower or any of its property,
or any law or governmental regulation or court decree or order, binding
upon or applicable to the Borrower or of any of its property; and
<PAGE>
(c) the Borrower hereby represents and warrants that the Agreement,
as amended by this Amendment, and the New Note are the legal, valid and
binding obligations of the Borrower and are enforceable m accordance with
their respective terms, subject only to bankruptcy, insolvency,
reorganization, moratorium or similar laws, rulings or decisions at the
time in effect affecting the enforceability of rights of creditors
generally and to general equitable principles which may limit the right to
obtain equitable remedies.
5. REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS.
(a) Upon the effectiveness of Section 2 hereof, on and after the date
hereof, each reference in the Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the Agreement, and
each reference to the "Agreement", "thereunder", "thereof", "therein" or
words of like import referring to the Agreement in the Note or any other
loan document shall mean and be a reference to the Agreement as amended
hereby.
(b) Except as specifically set forth above, the Agreement remains in
full force and effect and is hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of the Bank under the Agreement, the Note or any other loan
document, nor constitute a waiver of any provision of the Agreement, the
Note or any such loan document.
6. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay on demand all
costs and expenses of the Bank in connection with the preparation, reproduction,
execution and delivery of this Amendment and the other documents to be delivered
hereunder or thereunder, including its reasonable attorneys' fees and legal
expenses. In addition, the Borrower shall pay any and all stamp and other taxes
and fees payable or determined to be payable in connection with the execution
and delivery, filing or recording of this Amendment and any other instruments
and documents to be delivered hereunder, and agrees to save the Bank harmless
from and against any and all liabilities with respect to, or resulting from, any
delay in paying or omission to pay, such taxes or fees.
7. GOVERNING LAW. This Amendment shall be governed by and construed in
accordance with the internal laws, and not the law of conflicts, of the State of
Minnesota.
<PAGE>
8. HEADINGS. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the date
first written above.
BUFFETS, INC.
By: (Clark Grant)
---------------------------------
Its: (Executive Vice President)
------------------------------
FIRST BANK NATIONAL ASSOCIATION
By:
Its: (Assistant Vice President)
------------------------------
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheet as of July 12, 1995 and the Consolidated Statement of
Earnings for the period ended July 12, 1995 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000750274
<NAME> BUFFETS, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-03-1996
<PERIOD-START> DEC-29-1994
<PERIOD-END> JUL-12-1995
<CASH> 11,128
<SECURITIES> 0
<RECEIVABLES> 2,483
<ALLOWANCES> 0
<INVENTORY> 2,789
<CURRENT-ASSETS> 24,983
<PP&E> 278,782
<DEPRECIATION> 78,246
<TOTAL-ASSETS> 230,826
<CURRENT-LIABILITIES> 55,679
<BONDS> 6,000
<COMMON> 311
0
0
<OTHER-SE> 157,414
<TOTAL-LIABILITY-AND-EQUITY> 230,826
<SALES> 261,372
<TOTAL-REVENUES> 261,372
<CGS> 91,337
<TOTAL-COSTS> 224,261
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 39
<INCOME-PRETAX> 23,195
<INCOME-TAX> 8,815
<INCOME-CONTINUING> 14,380
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,380
<EPS-PRIMARY> .46
<EPS-DILUTED> .46
</TABLE>
