-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, kwMG4h5r3orqRONV3o0wy+U/y43JMNcO0NE6YTGL9omqZAy/9mZzj7P9fi5Q9y04 +bD435l9bdEJgZ2uCQ/jIw== 0000703799-95-000012.txt : 19950622 0000703799-95-000012.hdr.sgml : 19950622 ACCESSION NUMBER: 0000703799-95-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950514 FILED AS OF DATE: 19950621 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: VICORP RESTAURANTS INC CENTRAL INDEX KEY: 0000703799 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 840511072 STATE OF INCORPORATION: CO FISCAL YEAR END: 1026 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-12343 FILM NUMBER: 95548394 BUSINESS ADDRESS: STREET 1: 400 W 48TH AVE CITY: DENVER STATE: CO ZIP: 80216 BUSINESS PHONE: 3032962121 10-Q 1 SECOND QUARTER 10-Q FISCAL 1995 UNITED STATES SECURITIES & EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended May 14, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from Commission file number 0-12343 VICORP Restaurants, Inc. (Exact name of registrant as specified in its charter) COLORADO 84-0511072 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 400 West 48th Avenue, Denver, Colorado, 80216 (Address of principal executive offices) (Zip Code) (303) 296-2121 (Registrant's telephone number, including area code) Not Applicable (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No The registrant had 9,012,759 shares of its $.05 par value Common Stock outstanding as of June 16, 1995. PART I - FINANCIAL INFORMATION Item 1. Financial Statements VICORP Restaurants, Inc. CONSOLIDATED BALANCE SHEETS (in thousands) May 14, October 30, 1995 1994 ----------- ----------- (unaudited) ASSETS Current assets Cash $ 6,034 $ 6,123 Receivables 3,259 9,801 Inventories 8,308 10,585 Deferred income taxes 6,000 6,000 Prepaid expenses and other 3,184 2,592 ----------- ----------- Total current assets 26,785 35,101 ----------- ----------- Property and equipment, net 155,310 165,802 Deferred income taxes 32,319 33,550 Other assets 14,529 14,570 ----------- ----------- Total assets $ 228,943 $ 249,023 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Current maturities of long-term debt and capitalized lease obligations $ 1,683 $ 1,796 Accounts payable, trade 14,296 19,246 Accrued compensation 4,701 5,965 Accrued taxes 9,792 9,979 Accrued insurance 6,592 6,537 Other accrued expenses 5,085 6,930 ----------- ----------- Total current liabilities 42,149 50,453 ----------- ----------- Long-term debt (Note 2) 25,500 28,573 Capitalized lease obligations 12,533 13,981 Non-current accrued insurance 7,115 7,750 Other non-current liabilities and credits 11,667 13,400 Commitments and contingencies Shareholders' equity (Note 3) Series A Junior Participating Preferred Stock, $.10 par value, 200,000 shares authorized, no shares issued -- -- Common stock, $.05 par value, 20,000,000 shares authorized, 9,012,759 and 9,509,426 shares issued and outstanding 451 476 Paid-in capital 84,025 91,544 Retained earnings 45,503 42,846 ------------ ------------ Total shareholders' equity 129,979 134,866 ------------ ------------ Total liabilities and shareholders' equity $ 228,943 $ 249,023 ============ ============ The accompanying notes are an integral part of the financial statements. VICORP Restaurants, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Twelve Twenty-eight weeks ended weeks ended ----------------- ----------------- May 14, May 15, May 14, May 15, 1995 1994 1995 1994 -------- -------- ------- ------- (unaudited) Revenues Restaurant operations $84,433 $96,280 $207,474 $226,239 Franchise operations 891 765 1,883 1,632 ------ ------ ------- ------- Total revenues 85,324 97,045 209,357 227,871 ------ ------ ------- ------- Costs and expenses Restaurant operations Food 27,303 28,426 66,954 67,871 Labor 27,956 28,944 65,833 67,366 Other operating 23,364 26,806 57,171 62,555 General and administrative 5,818 8,111 13,620 18,365 Interest 811 919 1,979 2,123 Other (income) expense, net (181) (44) (451) (83) ------ ------ ------- ------- Total costs and expenses 85,071 93,162 205,106 218,197 ------ ------ ------- ------- Income before income tax expense 253 3,883 4,251 9,674 Income tax expense 95 1,456 1,594 3,627 ------ ------ ------- ------- Net income $ 158 $ 2,427 $ 2,657 $ 6,047 ====== ====== ======= ======= Earnings per common and dilutive common equivalent share $ .02 $ .25 $ .28 $ .61 ====== ====== ======= ======= Weighted average common shares and dilutive common share equivalents 9,479 9,833 9,578 9,951 ====== ====== ======= ======= The accompanying notes are an integral part of the financial statements. VICORP Restaurants, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Twenty-eight weeks ended ------------------------ May 14, May 15, 1995 1994 ------- ------- (unaudited) Operations Net income $ 2,657 $ 6,047 Reconcilation to cash provided by operations Depreciation and amortization 12,129 13,877 Deferred income tax provision 1,231 2,854 Loss on disposition of assets 287 942 Other, net (19) (153) ------- ------- 16,285 23,567 Change in assets and liabilities Trade receivables 457 835 Inventories 2,251 2,812 Accounts payable, trade (4,950) (6,837) Other current assets and liabilities (3,867) (955) Non-current accrued insurance (635) (381) ------- ------- Cash provided by operations 9,541 19,041 ------- ------- Investing activities Purchase of property and equipment (3,550) (14,678) Purchase of other assets (68) (409) Disposition of property (590) 315 Additions to non-trade receivables -- (1,088) Collection of non-trade receivables 6,234 839 ------- ------- Cash provided by (used for) investing activities 2,026 (15,021) ------- ------- Financing activities Issuance of debt 20,250 7,750 Payment of debt and capitalized lease obligations (24,255) (6,956) Purchase of common stock (7,694) (5,095) Other, net 43 193 ------- ------- Cash used for financing activities (11,656) (4,108) ------- ------- Decrease in cash (89) (88) Cash at beginning of period 6,123 5,288 ------- ------- Cash at end of period $ 6,034 $ 5,200 ======= ======= Supplemental information Cash paid during the period for Interest (net of amount capitalized) $ 1,994 $ 2,123 Income taxes 861 1,098 The accompanying notes are an integral part of the financial statements. VICORP Restaurants, Inc. NOTES TO FINANCIAL STATEMENTS (unaudited) 1. The consolidated financial statements should be read in conjunction with the annual report to shareholders for the year ended October 30, 1994. The unaudited financial statements for the twelve and twenty-eight weeks ended May 14, 1995 and May 15, 1994 contain all adjustments which, in the opinion of management, were necessary for a fair statement of the results for the interim periods presented. All of the adjustments included were of a normal and recurring nature. 2. As of May 14, 1995, the Company had $25,250,000 of borrowings and $10,284,000 of letters of credit placed under its bank credit facility. 3. During the first half of 1995, the Company purchased 508,000 shares of its common stock for $7,694,000 pursuant to authorization from its Board of Directors. 4. In the fourth quarter of 1994, the Company adopted a plan to dispose of 50 restaurant locations in trade areas that are no longer considered appropriate for the Company's existing concepts. As part of the disposal plan, the carrying value of those restaurants' assets were written down to net realizable values. The Company also accrued for expected carrying costs pending disposition and sublease disposition losses. As of May 14, 1995, the Company had closed 17 of those locations, of which eight stores were disposed through sublease or sale arrangements. The remaining 33 restaurants will continue to be operated until a satisfactory sale or sublease can be negotiated or until individual restaurant unit economics dictate closure. Operating results for the 50 locations were as follows:
Twelve Twenty-eight weeks ended weeks ended ---------------------- ----------------------- May 14, May 15, May 14, May 15, 1995 1994 1995 1994 --------- --------- ---------- ---------- Sales $5,799,000 $9,105,000 $15,636,000 $21,417,000 Store operating profit (loss) (230,000) (60,000) (222,000) 64,000
During the twenty-eight weeks ended May 14, 1995, $778,000 of closure related costs and $1,143,000 of severance were charged against the liability established for such costs. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS - --------------------- The Company's quarterly financial information is subject to seasonal fluctuation. Also, the quarterly periods ended February 19, 1995 and February 20, 1994 were comprised of sixteen weeks each, while the remainder of the Company's quarterly periods are comprised of twelve weeks each. As a result, the financial information for the periods presented is not indicative of results that may be achieved on an annual basis. RESTAURANT OPERATIONS The following table sets forth certain operating information for the Company's two primary operating concepts and the Company as a whole.
Twelve weeks ended Twenty-eight weeks ended ---------------------- ------------------------ May 14, May 15, May 14, May 15, 1995 1994 1995 1994 ------- ------- ------- ------- VILLAGE INN Restaurant sales $30,525,000 $34,756,000 $72,420,000 $80,430,000 Store operating profit % 16.6% 13.7% 15.0% 13.4% Restaurants at quarter-end 105 123 BAKERS SQUARE Restaurant sales $51,488,000 $61,022,000 $128,718,000 $144,788,000 Store operating profit % 1.9% 11.9% 5.4% 12.2% Restaurants at quarter-end 180 192 CONSOLIDATED Restaurant sales $84,433,000 $96,280,000 $207,474,000 $226,239,000 Food cost % 32.3% 29.5% 32.3% 30.0% Labor cost % 33.1% 30.1% 31.7% 29.8% Other operating cost % 27.7% 27.8% 27.6% 27.6% Store operating profit % 6.9% 12.6% 8.4% 12.6%
Consolidated restaurant sales decreased 12.3% during the second quarter and 8.3% for the fiscal first half of 1995 in comparison to the same prior year periods. The Company operated approximately twenty-four fewer equivalent restaurants in 1995's second quarter and eighteen fewer equivalent restaurants in the first half of 1995 than in the comparable time frame last year, due to restaurant closures and dispositions. The sales decreases were also affected by an 8.1% decrease in comparable sales in the quarter and a 5.5% decrease in comparable sales for the first half of the year, primarily in the Bakers Square division. A principal factor effecting same store sales in the second quarter was a menu price reduction at Bakers Square. Per person average expenditures declined by 10% as a result of lowering prices. Store operating profit for the second quarter and first half of the year decreased both in total and as a percentage of sales. The Village Inn division showed store operating profit improvement for both the second quarter and first half of 1995, while the Bakers Square division registered declines. Bakers Square reduced menu prices contributed to the decline in store operating profit in the second quarter of 1995. Lower comparable sales in relationship to the fixed portion of labor and other fixed costs and investments in food and labor to improve customer counts, also contributed to the decrease. These items were partially offset by reduced insurance expense and lower depreciation expense as a result of asset dispositions. ASSET DISPOSALS As of May 14, 1995, the Company had closed 17 of the 50 restaurants scheduled for disposition under a plan adopted in fiscal 1994. Eight of the closed units have been disposed of through sublease or sale arrangements. The remaining 33 locations will remain open until a satisfactory sale or sublease can be arranged, or until unit economics dictate closure. The following table details sales and operating results for the 50 restaurants for the first half of fiscal 1995 and 1994. The tables also segregate those restaurants which are closed and therefore only operated for a portion of 1995 but all of 1994 and those that remain open and operated for all of fiscal 1995 and 1994.
Twelve weeks ended: May 14, 1995 May 15, 1994 ------------ ------------ Operating Operating Sales Profit (Loss) Sales Profit (Loss) ----- ------------- ----- ------------- Village Inn Stores closed at May 14, 1995 $ 95,000 $ (5,000) $ 1,476,000 $ (10,000) Stores open at May 14, 1995 1,747,000 64,000 1,905,000 1,000 ----------------------------------------------------------- Total $ 1,842,000 $ 59,000 $ 3,381,000 $ (9,000) Bakers Square Stores closed at May 14, 1995 $ 113,000 $ (16,000) $ 1,269,000 $ (70,000) Stores open at May 14, 1995 3,844,000 (273,000) 4,455,000 19,000 ---------------------------------------------------------- Total $ 3,957,000 $ (289,000) $ 5,724,000 $ (51,000)
Twenty-eight weeks ended: May 14, 1995 May 15, 1994 ------------ ------------ Operating Operating Sales Profit (Loss) Sales Profit (Loss) ----- ------------- ----- ------------- Village Inn Stores closed at May 14, 1995 $ 663,000 $ (24,000) $ 3,395,000 $ (26,000) Stores open at May 14, 1995 4,136,000 144,000 4,425,000 (2,000) ----------------------------------------------------------- Total $ 4,799,000 $ 120,000 $ 7,820,000 $ (28,000) Bakers Square Stores closed at May 14, 1995 $ 1,378,000 $ (120,000) $ 3,036,000 $ (119,000) Stores open at May 14, 1995 9,459,000 (222,000) 10,561,000 211,000 ----------------------------------------------------------- Total $ 10,837,000 $ (342,000) $13,597,000 $ 92,000
In April, the Company closed its pie production facility in Phoenix, Arizona and transferred the production of pies for that market to the Company's California facility to reduce overhead costs. During the third quarter of fiscal 1995, the Company plans to discontinue internal warehousing and distribution of grocery products for its restaurants. The Company will begin utilizing an independent distribution company for those services. Management does not anticipate that significant changes in delivered product costs will result from the change, however, food inventories should be reduced by approximately $2.5 to $3.0 million. OTHER REVENUES AND EXPENSE General and administrative expense decreased largely as the result of administrative office consolidations, staff reductions and reduced incentive and legal expenses. As a percentage of revenues, general and administrative costs for the first half of 1995 were 6.5% compared to 8.1% in the comparable period last year. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- Cash provided by operations decreased 50% in the first half of 1995 compared to the same period in 1994 primarily due to lower operating income and the payment of severance expenses. Operating cash flow was supplemented by collection of an insurance receivable in 1995's first quarter. As of May 14, 1995, $25,250,000 of advances were outstanding under the Company's bank credit facility and approximately $39,500,000 was available for additional direct advances, subject to limitations on combined direct advances and letters of credit. The Company reduced its outstanding bank advances by $3,000,000 in the first half of 1995. During the first half of 1995, the Company purchased 508,000 shares of its common stock for $7,694,000, which essentially filled the existing authorizations granted by its Board. Future authorizations and purchases will be dependent upon various business and financial considerations. Capital expenditures in 1995 were significantly lower than those incurred during the same time frame in 1994, because of the Company's continued focus on service enhancement rather than remodel and growth activities. Capital expenditures approximating $9,000,000 are expected during the remainder of the fiscal year. Cash provided by operations and the unused portion of the Company's bank credit facility are expected to be adequate to fund these expenditures. ARTHUR ANDERSEN LLP REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors and Shareholders of VICORP Restaurants, Inc.: We have reviewed the accompanying condensed consolidated balance sheet of VICORP RESTAURANTS, INC. (a Colorado corporation) and subsidiary as of May 14, 1995, and the related condensed consolidated statements of operations for the 12- and 28-week periods ended May 14, 1995 and May 15, 1994, and the condensed consolidated statements of cash flows for the 28-week periods ended May 14, 1995 and May 15, 1994. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of VICORP Restaurants, Inc. and subsidiary as of October 30, 1994 (not presented herein), and in our report dated December 6, 1994 we expressed an unqualified opinion on that statement. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of October 30, 1994 is fairly stated, in all material respects, in relation to the balance sheet from which it has been derived. /s/ ARTHUR ANDERSEN LLP ----------------------- ARTHUR ANDERSEN LLP Denver, Colorado, June 9, 1995. PART II - OTHER INFORMATION Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS. On April 11, 1995, the Registrant held its Annual Meeting of Shareholders. At that meeting, four proposals were submitted to the shareholders for approval. Those proposals related to the election of directors, ratification of the appointment of the Company's independent auditors for VICORP's 1995 fiscal year, and amendments to the Company's 1982 and 1983 Stock Option Plans. As to the first proposal, each of the nominees for directors were elected based upon the following vote: Director For Against Abstain Broker Non- Votes - -------------------------------------------------------------------------------- Carole Lewis Anderson 8,139,998 33,673 -- -- Bruce B. Brundage 8,139,999 33,672 -- -- Charles R. Frederickson 8,058,998 114,673 -- -- John C. Hoyt 8,139,999 33,672 -- -- J. Michael Jenkins 8,059,480 114,191 -- -- Robert T. Marto 8,139,999 33,672 -- -- Dudley C. Mecum 8,059,898 113,773 -- -- Dennis B. Robertson 8,059,999 113,672 -- -- Arthur Zankel 8,139,598 34,073 -- -- The selection of Arthur Andersen LLP to serve as the Company's independent accountants for fiscal 1995 was ratified. The vote was 8,109,116 for; 53,669 against; 10,886 abstained; and no broker non- votes. The proposal to amend the Company's 1982 Stock Option Plan, specifically to extend the Plan's term by an additional five years, was approved. The vote was 7,577,410 for; 517,935 against; 49,831 abstained; and 28,495 broker non-votes. The proposal to amend the Company's 1983 Stock Option Plan (to extend the Plan's term by five years, and to increase by 100,000 shares the shares issuable under the Plan) was approved. The vote was 7,250,321 for; 806,139 against; 88,716 abstained; and 28,495 broker non- votes. Item 6: Exhibits and Reports on Form 8-K. (a) Exhibits (10) Amendment No. 1 Dated as of May 1, 1995 to Second Amendment and Restated Credit Agreement Dated as of June 18, 1993. (15) Letter regarding unaudited interim financial information. (27) Financial data schedule. SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. VICORP Restaurants, Inc. ------------------------ (Registrant) June 21, 1995 /s/ J. Michael Jenkins ---------------------- J. Michael Jenkins, President and Co-Chief Executive Officer June 21, 1995 /s/ Dennis L. Kuper ------------------- Dennis L. Kuper, Executive Vice President of Finance and Chief Financial Officer EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM VICORP RESTAURANTS, INC. CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS AS OF MAY 14, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 703799 VICORP RESTAURANTS, INC. 1,000 6-MOS OCT-29-1995 MAY-14-1995 6,034 0 3,259 0 8,308 26,785 284,505 129,195 228,943 42,149 38,033 451 0 0 129,528 228,943 207,474 209,357 66,954 66,954 123,004 0 1,979 4,251 1,594 2,657 0 0 0 2,657 .28 .28
EX-15 3 ARTHUR ANDERSEN LLP Exhibit 15: LETTER REGARDING UNAUDITED INTERIM FINANCIAL INFORMATION June 21, 1995 VICORP Restaurants, Inc.: We are aware that VICORP Restaurants, Inc. has incorporated by reference into the Company's previously filed Registration Statement File Nos. 33-26650, 33-32608, 33- 34447, 33-48205 and 33-49166, its Form 10-Q for the quarter ended May 14, 1995, which includes our report dated June 9, 1995, covering the unaudited interim financial information contained therein. Pursuant to Regulation C of the Securities Act of 1933, that report is not considered a part of the registration statements prepared or certified by our firm or a report prepared or certified by our firm within the meaning of Sections 7 and 11 of the Act. Very truly yours, /s/ ARTHUR ANDERSEN LLP - ----------------------- ARTHUR ANDERSEN LLP EX-10 4 EXHIBIT 10 Amendment No. 1 Dated as of May 1, 1995 to Second Amendment and Restated Credit Agreement Dated as of June 18, 1993 This AMENDMENT No. 1 ("Amendment") dated as of May 1, 1995 is entered into by and among VICORP Restaurants, Inc., a Colorado corporation (the "Borrower"), Citibank, N.A. and NationsBank of Texas, N.A., as lenders (the "Lenders"), and Citibank, N.A., as agent for the Lenders (in such capacity, the "Agent"). RECITALS -------- A. The Borrower, the Lenders and the Agent are parties to that certain Second Amended and Restated Credit Agreement dated as of June 18, 1993 (the "Loan Agreement"). Terms defined in the Loan Agreement and not otherwise defined herein are used herein as defined in the Loan Agreement. B. The Borrower has requested that the Lenders and the Agent amend, and the Lenders and the Agent have agreed to amend, certain provisions of the Loan Agreement as set forth below. NOW, THEREFORE, the Borrower, the Lenders and the Agent agree as follows: SECTION 1. Amendment. Subject to the conditions set forth in Section 2 herein, the Borrower, the Lenders and the Agent hereby amend Section 7.03(e) of the Loan Agreement to provide that the Borrower is required to maintain a fixed charge coverage ratio (as set forth in such Section 7.03(e)) greater than or equal to 1.50 to 1 for the fiscal quarters ending on May 14, 1995 and August 6, 1995; and to maintain a fixed charge coverage ratio greater than or equal to 1.75 to 1 as of the last day of each fiscal quarter thereafter. SECTION 2. Conditions Precedent to Amendment. This Amendment shall be deemed to be effective as of May 1, 1995 upon the satisfaction of each of the following conditions precedent: (a) the receipt by the Agent of four (4) original copies of this Amendment duly executed and delivered by a duly authorized officer of the Borrower and of each Lender, and (b) the absence of any Default or Event of Default under the Loan Agreement. SECTION 3. Representations and Warranties of the Borrower. (a) Upon the effectiveness of this Amendment, the Borrower hereby reaffirms all covenants, representations and warranties made in the Loan Agreement and agrees that all such covenants, representations and warranties shall be deemed to have been re-made as of the effective date of this Agreement. (b) The Borrower hereby represents and warrants that this Amendment constitutes the legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally, and general principles of equity which may limit the availability of equitable remedies. SECTION 4. Reference to and Effect on the Loan Agreement. (a) The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Lenders and the Agent under the Loan Agreement or any other document, instrument or agreement executed in connection therewith, nor constitute a waiver of any provision contained therein, except as specifically set forth herein. (b) Upon the effectiveness of this Amendment, each reference in the Loan Agreement to "this Agreement," "hereunder," "hereof," "herein," or words of like import shall mean and be a reference to the Loan Agreement as amended hereby, and each reference to the Loan Agreement in any other document, instrument or agreement executed and/or delivered in connection with the Loan Agreement shall mean and be a reference to the Loan Agreement as amended hereby. (c) Except as specifically amended hereby, the Loan Agreement and any other document, instrument or agreement executed in connection therewith shall remain in full force and effect and are hereby ratified and confirmed. SECTION 5. Governing Law. This Amendment shall be governed by and construed in accordance with the other remaining terms of the Loan Agreement and the internal laws (as opposed to conflict of law provisions) of the State of New York. SECTION 6. Section Titles. The section titles contained in this Amendment are and shall be without substance, meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto. SECTION 7. Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 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 above written. VICORP RESTAURANTS, INC. By: /s/ Charles R. Frederickson --------------------------- Name: Charles R. Frederickson Title: Chairman of the Board By: /s/ Dennis L. Kuper --------------------------- Name: Dennis L. Kuper Title: Executive Vice President-Finance CITIBANK, N.A. By: /s/ Barbara A. Cohen --------------------------- Barbara A. Cohen Vice President NATIONSBANK OF TEXAS, N.A. By: /s/ Frank M. Johnson ---------------------------- Frank M. Johnson Vice President CITIBANK, N.A., as Agent By: /s/ Barbara A. Cohen ---------------------------- Barbara A. Cohen Vice President -----END PRIVACY-ENHANCED MESSAGE-----